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"The Vampire Squid Strikes Again"- Matt Taibbi Takes On Blythe Masters And The Banker Commodity Cartel

Tyler Durden's picture




 

The story of how JPMorgan, Goldman and the rest of the Too Big To Fails and Prosecutes, cornered, monopolized and became a full-blown cartel - with the Fed's explicit blessing - in the physical commodity market is nothing new to regular readers: to those new to this story, we suggest reading of our story from June 2011 (over two and a half years ago),  "Goldman, JP Morgan Have Now Become A Commodity Cartel As They Slowly Recreate De Beers' Diamond Monopoly." That, or Matt Taibbi's latest article written in his usual florid and accessible style, in which he explains how the "Vampire Squid strikes again" courtesy of the "loophole that destroyed the world" to wit: "it would take half a generation – till now, basically – to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is "complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally." Complementary to a financial activity. What the hell did that mean?... Fifteen years later, in fact, it now looks like Wall Street and its lawyers took the term to be a synonym for ruthless campaigns of world domination."

Some key excerpts:

Today, banks like Morgan Stanley, JPMorgan Chase and Goldman Sachs own oil tankers, run airports and control huge quantities of coal, natural gas, heating oil, electric power and precious metals. They likewise can now be found exerting direct control over the supply of a whole galaxy of raw materials crucial to world industry and to society in general, including everything from food products to metals like zinc, copper, tin, nickel and, most infamously thanks to a recent high-profile scandal, aluminum. And they're doing it not just here but abroad as well: In Denmark, thousands took to the streets in protest in recent weeks, vampire-squid banners in hand, when news came out that Goldman Sachs was about to buy a 19 percent stake in Dong Energy, a national electric provider. The furor inspired mass resignations of ministers from the government's ruling coalition, as the Danish public wondered how an American investment bank could possibly hold so much influence over the state energy grid.

...

The motive for the Kochs, or anyone else, to hoard a commodity like oil can be almost beautiful in its simplicity. Basically, a bank or a trading company wants to buy commodities cheap in the present and sell them for a premium as futures. This trade, sometimes called "arbitraging the contango," works best if the cost of storing your oil or metals or whatever you're dealing with is negligible – you make more money off the futures trade if you don't have to pay rent while you wait to deliver.

 

So when financial firms suddenly start buying oil tankers or warehouses, they could be doing so to make bets pay off, as part of a speculative strategy – which is why the banks' sudden acquisitions of metals-storage companies in 2010 is so noteworthy.

 

These were not minor projects. The firms put high-ranking executives in charge of these operations. Goldman's acquisition of Metro was the project of Isabelle Ealet, the bank's then-global commodities chief. (In a curious coincidence commented upon by several sources for this story, many of Goldman's most senior officials, including CEO Lloyd Blankfein and president Gary Cohn, started their careers in Goldman's commodities division.)

Then there are the political connections:

In 2010, a decade after the Rich pardon, Holder was attorney general, but under Barack Obama, and two Rich-created firms, along with two banks that have been major donors to the Democratic Party, all made moves to buy up metals warehouses. In near simultaneous fashion, Goldman, Chase, Glencore and Trafigura bought companies that control warehouses all over the world for the LME, or London Metals Exchange. The LME is a privately owned exchange for world metals trading. It's the world's primary hub for determining metals prices and also for trading metals-based futures, options, swaps and other instruments.

 

"If they were just interested in collecting rent for metals storage, they'd have bought all kinds of warehouses," says Manal Mehta, the founder of Sunesis Capital, a hedge fund that has done extensive research on the banks' forays into the commodities markets. "But they seemed to focus on these official LME facilities."

 

The JPMorgan deal seemed to be in direct violation of an order sent to the bank by the Fed in 2005, which declared the bank was not authorized to "own, operate, or invest in facilities for the extraction, transportation, storage, or distribution of commodities." The way the Fed later explained this to the Senate was that the purchase of Henry Bath was OK because it considered the acquisition of this commodities company kosher within the context of a larger sale that the Fed was cool with – "If the bulk of the acquisition is a permissible activity, they're allowed to include a small amount of impermissible activities."

 

What's more, according to LME regulations, no warehouse company can also own metal or make trades on the exchange. While they may have been following the letter of the law, they were certainly violating the spirit: Goldman preposterously seems to have engaged in all three activities simultaneously, changing a hat every time it wanted to switch roles. It conducted its metal trades through its commodities subsidiary J. Aron, and then put Metro, its warehouse company, in charge of the storage, and according to industry experts, Goldman most likely owned some metal, though the company has remained vague on the subject.

 

If you're wondering why the LME would permit a seemingly blatant violation of its own rules, a good place to start would be to look at who owned the LME at the time. Although it eventual­ly sold itself to a Hong Kong company in 2012, in 2010 the LME was owned by a consortium of banks and financial companies. The two largest shareholders? Goldman and JPMorgan Chase.

 

Humorously, another was Koch Metals (2.32 percent), a commodities concern that's part of the Koch brothers' empire. The Kochs have been caught up in their own commodity-manipulation schemes, including an episode in 2008, in which they rented out huge tankers and sed them to store excess oil offshore essentially as floating warehouses, taking cheap oil out of available supply and thereby helping to drive up energy prices. Additionally, some banks have been accused of similar oil-hoarding schemes.

And then there is of course Blythe, who is now looking for a new job precisely as a result of the cartel story:

Chase's own head of commodities operations, Blythe Masters – an even more famed Wall Street figure, sometimes described as the inventor of the credit default swap – admitted that her company's warehouse interests weren't just a casual thing. "Just being able to trade financial commodities is a serious limitation because financial commodities represent only a tiny fraction of the reality of the real commodity exposure picture," she said in 2010.

 

Loosely translated, Masters was saying that there was a limited amount of money to be made simply trading commodities in the traditional legal manner. The solution? "We need to be active in the underlying physical commodity markets," she said, "in order to understand and make prices."

 

We need to make prices. The head of Chase's commodities division actually said this, out loud, and it speaks to both the general unlikelihood of God's existence and the consistently low level of competence of America's regulators that she was not immediately zapped between the eyebrows with a thunderbolt upon doing so. Instead, the government sat by and watched as a curious phenomenon developed at all of these new bank-owned warehouses, in the aluminum markets in particular.

Finally, the big picture:

[T]he potential for wide-scale manipulation and/or new financial disasters is only part of the nightmare that this new merger of banking and industry has created. The other, perhaps even darker problem involves the new existential dangers both to the environment and to the stability of the financial system. Long before Goldman and Chase started buying up metals warehouses, for instance, Morgan Stanley had already bought up a substantial empire of physical businesses – electricity plants in a number of states, a firm that trades in heating oil, jet fuels, fertilizers, asphalt, chemicals, pipelines and a global operator of oil tankers.

 

How long before one of these fully loaded monster ships capsizes, and Morgan Stanley becomes the next BP, not only killing a gazillion birds and sea mammals off some unlucky country's shores but also taking the financial system down with them, as lawsuits plunge the company into bankruptcy with Lehman-style repercussions? Morgan Stanley's CEO, James Gorman, even admitted how risky his firm's new acquisitions were last year, when he reportedly told staff that a hypothetical oil spill was "a risk we just can't take."

 

The regulators are almost worse. Remember the 2008 collapse happened when government bodies like the Fed, the Office of the Comptroller of the Currency and the Office of Thrift Supervision – whose entire expertise supposedly revolves around monitoring the safety and soundness of financial companies – somehow missed that half of Wall Street was functionally bankrupt.

 

Now that many of those financial companies have been bailed out, those same regulators who couldn't or wouldn't smell smoke in a raging fire last time around are suddenly in charge of deciding if companies like Morgan Stanley are taking out enough insurance on their oil tankers, or if banks like Goldman Sachs are properly handling their uranium deposits.

 

"The Fed isn't the most enthusiastic regulator in the best of times," says Brown. "And now we're asking them to take this on?"

Read the full story here (Rolling Stone link), or alternatively for those curious, here is a presentation highlighting all the key aspects of the aluminum price manipulation story by the big banks.

 

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Thu, 02/13/2014 - 15:27 | 4433346 johny2
johny2's picture

In case it is correct that bankers organised fall of the monarchies and then they took over; What are the chances that they will let populace wake up to the fact they were behind almost every war in the past 200 years at least? 

Thu, 02/13/2014 - 15:30 | 4433362 BrigstockBoy
BrigstockBoy's picture

"If the bulk of the acquisition is a permissible activity, they're allowed to include a small amount of impermissible activities."

- the Fed


Fuck you Yellen (oh and you too Blythe)

Thu, 02/13/2014 - 15:31 | 4433363 NOTaREALmerican
NOTaREALmerican's picture

Wake me when the trash-class is revolting.

Thu, 02/13/2014 - 15:55 | 4433437 Jack Burton
Jack Burton's picture

It is really simple, when the Fed gave Bankers access to newly printed billions, they gave them all the interest free loans they needed to become manipulators of markets. I can not believe that the Fed did not see the potential for fraud and manipulation. Since I can not believe this, that means I do believe the Fed knew and didn't care if the great banking powers became manipulators of the markets for their personal gain. All this has been done under the cover of a great lie. The lie is that the Fed must stimulate the economy to create jobs and produce growth. Instead, as all ZH readers know, we have gotten the greatest financial fraud in world history. Why is the 1% becoming much more wealthy every day, while real jobs are not created? Because if YOU want a loan, you pay a bank interest rate, if the bank wants a loan, it gets it for free.

I am no financial genius, but, and I mean BUT, give me a 500 billion dollar zero interest rate loan, let me invest and trade with that money, and I know for a fact, I can be a 1%'er in short order. Now, tell me again about the 1% and their great job creating capitalist genius!

We know the crimes, we know the result, but our government, under the liar Obama, and the liar before him, Bush, that government protects and enables the banker fraud to grow, spread and take over the world. Which main stream media economist said that the dollar is all powerful because it is backed by the men with the most and biggest guns? He was right, our wars and our enemies are for one purpose, to spread banker power and the tool of that power is the world reserve currency, the dollar, back by printing presses and giant guns. Banks should be utilities that serve the public, small business, and enable capitalism to work, they should not be CAPITALISM! In short, we now exist to service banks, they do not exist to service us and the economy. Shut the big ones down, sell off the assets to smaller banks and close the bankrupt banks. Never ever do business with a major money center bank, if we all did this, they would be in big fucking trouble. There is a small town bank here in my town, private and not part of any major bank, we also have a Wells Fargo, I ask people, why in fuck do you walk through the doors of a Wells Fargo when the bank on the other side of Main Street, has been locally owned since before my father was even born?

Thu, 02/13/2014 - 16:27 | 4433591 Spastica Rex
Spastica Rex's picture

"give me a 500 billion dollar zero interest rate loan, let me invest and trade with that money, and I know for a fact, I can be a 1%'er in short order."

I think you could probably just pocket it and walk away.

Brilliant +1

Thu, 02/13/2014 - 20:56 | 4434612 grekko
grekko's picture

Brilliant!  If you just walk away with it, they'll just print up more next month...no loss at all.

Fri, 02/14/2014 - 00:32 | 4435348 the0ther
the0ther's picture

but...but...they're "market makers"...not price fixers at all. wth would real prices look like for various things if these people weren't playing games they play?

Fri, 02/14/2014 - 05:19 | 4435749 kurt
kurt's picture

By Bartaromo's cunt I curse thee!

Thu, 02/13/2014 - 15:54 | 4433445 assistedliving
assistedliving's picture

missing the boat.  all the 'anti-trust' laws are written and re-written.

the problem is NO POLITICAL FIGURE HAS THE BALLS TO ENFORCE THEM ie break up the banks, the oil cartel, now COMCAST.  why?  we know why but u hv to add CHINA into the mix.  under the guise of we hv to be BIG to COMPETE and add Holder's too big to prosecute BS...well there u hv it

BHO the next FDR???

Thu, 02/13/2014 - 16:29 | 4433593 Manipulism
Manipulism's picture

Why must mericans always screw their writing?

Can you please write "Have" and "you".

Is it too painstaking to press the a and e button?

WTF.

Signs of idiocy.

Thu, 02/13/2014 - 17:24 | 4433854 Nick Jihad
Nick Jihad's picture

or signs that he's posting from a phone. Cut him some slack.

Thu, 02/13/2014 - 20:54 | 4434607 grekko
grekko's picture

Hey, people get excited here.  Cut them some slack.

Thu, 02/13/2014 - 20:55 | 4434601 grekko
grekko's picture

What?  Political figures?  Do you really believe that they will give up millions in campaign contributions to show some balls?  Dude!  Wake up and smell the coffee.

Thu, 02/13/2014 - 15:58 | 4433455 Squiddly Diddly
Squiddly Diddly's picture

Complementary to a financial activity. What the hell did that mean?... Fifteen years later, in fact, it now looks like Wall Street and its lawyers took the term to be a synonym for ruthless campaigns of world domination."  Vampire Squid....Vampire Squid.......... repeat chant.

My Squiddly avatar is holding grenades which explode in the actual cartoon.  We should be fortunate if Blankfein et al would follow suit.

 

 

Thu, 02/13/2014 - 16:24 | 4433582 Save_America1st
Save_America1st's picture

I foresee a day when the government will classify death by Predator drone strike a "suicide". 

Because hey, if we didn't want to die by drone strike then we shouldn't have been doing anything wrong, right? 

So then it must be a suicide wish.

Thu, 02/13/2014 - 20:53 | 4434597 grekko
grekko's picture

Where is Charles Bronson when we really need him?

Thu, 02/13/2014 - 16:37 | 4433639 MarcusAurelius
MarcusAurelius's picture

I think Willim Black has said it a number if times in relation to all these assholes. Gresham's Dynamics are now the only thing that the big banks have become. 

Any child of 5 understands that when there are no consequences for their negative actions that behavior is likely to continue and will undoubtledly get worse. This is simply Behavior Mod. 101 that any parent with half a brain knows. The major problem still exists because the regulators that were paid off back in the good ol' days are still there. These things will continue to surface as if they were simply part of another day at the office (which they are) until these guys are forced out or until people have had enough. I amnot sure any more that either one will happen. Like an athlete that uses performance enhancing drugs to compete (which is most) it is justified on the basis of "if I don't do it then I can't compete". 

All that is needed for evil to spread is for good people to do nothing. 

Thu, 02/13/2014 - 20:51 | 4434580 grekko
grekko's picture

Well Marcus, there isn't a whole lot we can do presently besides try to make ourselves less reliant on the system.  Grow a veggie garden, have a few egg laying chickens, solar panels, etc.  Hell, put a well on your property for water.  Starve the beast by not contributing to it in some small ways.  Eventually we all add up to a massive blow to the PTB and they WILL collapse.  It really can be a peaceful revolution.  At least until the day they come destroy your garden...then the shooting, pitchforks and ropes come into play.  We'll probably lose just as many as they do, but there are multiples of their numbers on our side.

With my attitude, I probably won't survive it, I'm a pitchfork kind of guy.  I promise you that after me, there will be at least one less taker to come after you.

Thu, 02/13/2014 - 16:52 | 4433678 Walt D.
Walt D.'s picture

The biggest market manipulator of them all is the Fed.

Having companies that actually produce commodities trading in the futures market has been going on ever since the futures exchanges have been open. Insider trading in the futures market is not illegal.

Also, the futures price is not the same as the forward spot price - I do not need to know what the price of IBM is going to be in 12 months time to sell you a futures contract to deliver you 100 shares in 12 months time.

Thu, 02/13/2014 - 16:57 | 4433691 pupdog1
pupdog1's picture

I hope Matt doesn't have a horrific accident with a random orbit sander.

Thu, 02/13/2014 - 17:35 | 4433885 Bastiat
Bastiat's picture

HEheh.  Good one. 

Thu, 02/13/2014 - 20:39 | 4434554 grekko
grekko's picture

No way!  He's more of the nail gun type of guy, and you know what they say about nail guns...if at first you don't succeed, then try, try again!

Thu, 02/13/2014 - 17:10 | 4433775 Last of the Mid...
Last of the Middle Class's picture

Wondered a long time about pharmaceutials. Would see the price of a generic drug that's been on the market for 20 years suddenly increase in price wholesale 1000%. I don't care where the shit is made that's not a normal supply and demand price increase. Basically you want any kind of good or service in this economy you have to go through a hidden cartel to get it.

Thu, 02/13/2014 - 20:36 | 4434543 grekko
grekko's picture

Dude!  You are seeing life with blinders on.  If buying in the manipulated market doesn't feel right to you, then embrace the "Black Market".  It is the only true free, supply and demand market left.  Do yourself a favor and exit the system, stage left.  Really, why patronize this corrupt system as it exists?  Find another corrupt system that will give you a better deal.  Problem?  I don't see a problem.  Besides, it's a tax free system.  STARVE THE BEAST!

Thu, 02/13/2014 - 17:14 | 4433805 Johnny Cocknballs
Johnny Cocknballs's picture

Blythe Masters who was gonna be in an advisory role for the CFTC Blythe Masters?

Angry sullen breasts, Blythe Masters?

 

Can't wait for Tarp 2, more printing, and more acquisitions by the big banks.  Probably, they'll be making the chips that DHS will require us to have implanted in our body to fight terror.

And for the children.

 

I knew about this, but didn't see it all together.  It never ends.  It just never ends.  And we all just keep fucking taking it.

 

Thu, 02/13/2014 - 17:31 | 4433868 Nick Jihad
Nick Jihad's picture

Umm, Blythe withdrew from the CFTC post, in response to widespread protest. So we do win a few.

Thu, 02/13/2014 - 17:54 | 4433954 Wen_Dat
Wen_Dat's picture

Those pesky Twitter protests

Thu, 02/13/2014 - 18:04 | 4434007 Johnny Cocknballs
Johnny Cocknballs's picture

Ummm, I know that, cunt, she never should have been named in the first place.

 

We don't win shit.

Thu, 02/13/2014 - 20:57 | 4434606 lotsoffun
lotsoffun's picture

jc  - they have no shame and they have no limits.  i don't know your background, but i've been in the center of it.  and for me, it's of course she would have been the FIRST named.  you think gary gensler was different?  obama wins a nobel prize?  having done nothing?

Thu, 02/13/2014 - 20:28 | 4434517 grekko
grekko's picture

We lose a lot more battles than we win.  But the time will arrive someday, not too far into the future, when we will hold all the cards, and if we play them right, then the war will be won.  Hunker down, bide your time, and prepare.  Our day will come like a thief in the night.  Then we act.

Fri, 02/14/2014 - 01:25 | 4435495 e_goldstein
e_goldstein's picture

icy slime hole

Thu, 02/13/2014 - 19:18 | 4433829 Radical Marijuana
Radical Marijuana's picture

The banksters' bonuses are not due to any superficial "economic" justification. Rather, the banksters' bonuses are a reflection of the way that the banksters' REAL culture operates, which is upon the basis of triumphant organized crime, which became triumphant enough to legalize its own crimes, and thereafter have those crimes enforced by the legalized violence of the government. The people getting the biggest bonuses are like "partners" within the ACTUAL system, which is operated as organized crime. There is no genuine "economic" justification for those bonuses, other than that the whole system is the result of triumphant organized crime, capturing control over the government. Those who continue to participate in making that system develop get the proportional bonuses, as "partners" in that overall triumphant organized crime operation.

I thought the most important sentence in the article was:

"If the bulk of the acquisition is a permissible activity, they're allowed to include a small amount of impermissible activities."

That describes the progressive leveraging of successful organized crime, capturing control over the government, by corrupting the political processes, in order to wedge open their advantages. The standard modus operandi of the banks has been to get their crimes legalized. They have been constantly pushing that envelope, so that previously impermissible activities were eventually transformed into permissible activity. That was a continuous process, but there were clearly quantum leaps that took place in the past. The emerging world domination of the biggest banks was primarily built on their ability to get their puppet politicians, and the masses of muppets, to agree to PRIVATIZED FIAT MONEY, MADE OUT OF NOTHING, AS DEBTS, SYSTEMS, which transformed the impermissible activities of FRAUDS into legalized counterfeiting, by private banks, as a permissible activity.

After the banksters were able to corrupt the political processes enough so that they could legally make the public money supply out of nothing, and have the government enforce that fraud, then AUTOMATICALLY that became a runaway LEVERAGING. After any group in society starts to get away with fraud, then that becomes a positive feedback, where they can thereafter continue to get away with more frauds, because they constantly become more wealthy and powerful, and so, nobody else could compete with them within the established systems that they have set up.

The masses of muppets tend to operate on the basis of their kind of presumed "common sense," which is actually totally wrong, and has almost nothing to do with how the real monetary and taxation systems operate. However, they have been so successfully brainwashed to believe in that bullshit for so long that they do not want to learn about how the real systems work. Within that context, the banksters' political puppets have a very easy time performing as professional liars and immaculate hypocrites for those masses of muppets. 

We are looking at a situation of runaway triumphant financial frauds being the foundation of the whole economic system, which is necessarily headed towards final failure from too much success!

To REPEAT the way that our current situation is actually trillions of times worse than ever before, and headed towards becoming quadrillions of times worse in the foreseeable future, I quote from this link:

http://www.conspiracyarchive.com/NWO/silent_weapons_quiet_wars.htm

Silent Weapons for Quiet Wars

"Energy is recognized as the key to all activity on earth. Natural science is the study of the sources and control of natural energy, and social science, theoretically expressed as economics, is the study of the sources and control of social energy. Both are bookkeeping systems: mathematics. Therefore, mathematics is the primary energy science. And the bookkeeper can be king if the public can be kept ignorant of the methodology of the bookkeeping. ... In this structure, credit, presented as a pure element called "currency," has the appearance of capital, but is in effect negative capital. Hence, it has the appearance of service, but is in fact, indebtedness or debt. ... if balanced in no other way, will be balanced by the negation of population (war, genocide)... They must eventually resort to war to balance the account, because war ultimately is merely the act of destroying the creditor ... War is therefore the balancing of the system by killing the true creditors (the public ...)"

THE PATH THAT AMERICA, AND THE WHOLE WORLD, IS ON IS A TRAGIC TRAJECTORY, WHERE THE MASSES OF MUPPETS, THAT VOTE FOR THE BANKSTERS' POLITICAL PUPPETS, HAVE BECOME ZOMBIE SHEEPLE.

Zombie Sheeple get fleeced to exhaustion, then slaughtered.

There is no doubt that the international banksters are engaged in "ruthless campaigns of world domination." Those campaigns are obviously based on the application of the principles and methods of organized crime through the political processes. Thus, the REALITY is that the whole world is dominated and directed by FRAUDS. However, the banksters have already been successful in doing that, by constantly leveraging the impermissible activities to become permissible activity. In order for that system to continue, as it does, the vast majority of politicians, as well as the public, have been brainwashed to believe in bullshit, by maintaining attitudes of EVIL DELIBERATE IGNORANCE, which has become the attitude behind everything that our civilization actually does, due to the degree of the success of the banksters' "ruthless campaigns of world domination."

Thu, 02/13/2014 - 20:21 | 4434501 grekko
grekko's picture

Very good comment, long, but good.  Most of us here totally understand exactly what you wrote, and whole-heartedly believe that.  Today, it would be nice to have a hologram of "Harry Seldon" (Isaac Azimov's FOUNDATION series) appear at times of crisis to guide us as to the answer to our problems derived from the mathematical study of psychohistory.  It makes me wonder what stage is next after it all collapses and the worldwind takes us to the stage of barbarism (if we aren't already at that stage).  Perhaps out of the ashes we will become "The Traders", Religeous Cults, or we will have to face the Mentalists (Second foundation), etc.

 

It certainly is a tragic, but interesting time we live in.  The smallest mis-step made by the PTB could set off a chain reaction that would begger the entire world overnight and engulf us in the flames of nuclear war in an effort to cover up their mistakes/errors.  If I live through that, then I'm going after Jamie, Lloyd, Blythe, numerous Bush's, Clintons, and whoever else of their ilk is still alive.  They will be swinging in the wind from lamposts or trees for the world to see.

 

For too many years I've lived in the system (matrix?) around me, but haven't been a part of it.  I pay my taxes, and even help my landlady take out her garbage, but I'm an outsider living inside the system.  I watch, I wait. 

 

Radical?  Do you feel that way as well?

Thu, 02/13/2014 - 22:54 | 4435103 Radical Marijuana
Radical Marijuana's picture

Yes, grekko:

"It certainly is a tragic,

but interesting time we live in."

In that context, I will repeat this quote of Haldane:

"I have no doubt that in reality the future will be vastly more surprising than anything I can imagine.

Now my own suspicion is that the Universe is not only queerer than we suppose, but queerer than we can suppose."

http://en.wikiquote.org/wiki/J._B._S._Haldane

Thu, 02/13/2014 - 20:57 | 4434617 Absinthe Minded
Absinthe Minded's picture

Rad,

You summed it up better than most ZH articles. I read all of your posts because despite the radical handle you have a most profound and logical take on most subjects. Now being the thinker that you are, please work on a grass roots campaign that will actually capture the hearts and minds of real people to understand and rise up against these scumbags! it is the politicians and the bankers. What would it take? How do we start? I have been here from the beginning. I am disheartened. How do we bring change? I want change. How? I challenge you all. How?

Thu, 02/13/2014 - 23:24 | 4435184 Radical Marijuana
Radical Marijuana's picture

Absinthe Minded, regarding your recommendation "please work on a grass roots campaign," the project that I have been working on for the past 30 years is described in this article on CANADIAN Electoral District Associations.

That has been my attempt to "FIGHT FIRE WITH FIRE" through the use of the Canadian Political Contribution Tax Credit, because the funding of politics is at the core of the problems, where the maximum leverage exists. Certainly, it was through the domination of the funding of the political processes that enabled the banksters to gradually capture control of the government. ... All we need is a series of political miracles to have enough people wake up enough, (and be able to survive through that) in order to perhaps change things. If we could reach a critical threshold where, say, 5% of the people sufficiently understood, and another 20% generally supported them, then it could become possible to change the system ???

Overall, I believe, it would take a tipping point of about 10% of the people generally understanding the gist of the messages which are found as themes in Web sites like Zero Hedge, in order for that kind of information to become sufficiently significant. Although extremely difficult, I can not imagine anything better to do than for us ALL to contribute to understanding the problems better. I like to day dream of when 10% of the people consciously say to themselves:

"WTF, private banks are making the public "money" supply out of nothing as debts!"

First of all, enough people would have to be aware of that social fact, and how and why that happened, in order to them to understand that problem enough to demand better resolutions of that insane situation.

P.S.

Excellent Videos on Money Systems

Fri, 02/14/2014 - 08:42 | 4435950 tip e. canoe
tip e. canoe's picture

dr. ganja, imho, a much better reply to AM is contained on the bottom of your link:

Going backwards, to old-fashioned religions or ideologies, is guaranteed to fail, while going "forwards," through the madness of electronic frauds, backed by atomic bombs, must finally result in insane collapses to horrible chaos.

We are already doomed to have to wait and watch as the established systems destroy themselves!

It is not possible to predict what may be on the other side of psychotic social storms!

i choose to believe that Bucky Fuller was dead-on when he mentioned that, at their core, all the world's problems are design problems.   the core problem being, as you say ad nauseum (with all due respect), is that humans choose to organize themselves under social pyramid systems that are so etched within the collective (and each individual) human mind (& genetics) that it is impossible for most everyone to be able to envision any other form of social cohesion, even when starting from scratch.

this perhaps explains why although recent movements such as TP, Occupy, Burning Man & Bitcoin may have each had their own "noble beginnings" as spontaneous self-organized systems, they all eventually coalesced to pyramid systems themselves, and thus became an easily-controllable & co-opted fractal within a fractal of the same big bully bullshit, even if & when they were able to maintain the appearance of a self-organized system 

the question i continue to have is why do humans continue to design social pyramid systems on all levels of social organization, even after it has been proven to those individuals participating that it is the social pyramid system that is the problem?

perhaps Yeats pointed to an answer when he wrote:   "The center will not hold, things fall apart"   if this is true (and i choose to believe, after watching numerous satellite videos of hurricanes and polar vortecies, that on many layers of reality it is), then perhaps it is more of an issue of misindentifying where the real center really exists.    

if so, then this will require no less than a fundamental shift of collective & individual human consciousness.   and as you note so eloquently and so often, this will be most likely have to be preceeded by a collective & individual nervous breakdown(s) as the Center is protected by enormous stones that have been built up around it over millenia.

if so, then perhaps it is the duty & responsibility of those of us who surf on a razor's edge of doom here on the hedge & elsewhere in the noosphere, to obsess less over the Big Bullies that occupy the Center(s) that we know to be false (or rather, not any more central than any other center)...

and to explore more (while trying the best we can to not predict) the other side of the storms where the  "center is everywhere and whose circumference nowhere."   don't forget, those numerous vorticies heading our way all may be EPIC (TM), but they all (like every thing else) eventually dissipate back into the stream...

 

Sat, 02/15/2014 - 03:08 | 4438948 Radical Marijuana
Radical Marijuana's picture

Thanks for the thoughtful reply tip e. canoe.

I believe that nature selects for diversity IN THE LONG RUN, because diversity works best, IN THE LONG RUN. However, nature also allows any specialization to runaway, as far it could, before the environmental conditions change, so that that kind of specialization can not longer adapt, and instead gets wiped out.

The human social pyramid system, with its ability to wipe out diversity, and prop up monopolistic central planning, looks like one of those specializations that has to run its course, by maximizing its potential, before it itself changes its own environment enough to wipe itself out. Social pyramid system drove themselves, through their ability to back up lies with violence. The vast majority of people never agreed to that. It only took a dominate minority able to be the best at backing up their deceits with destruction to force everyone else to agree with their frauds. Several hundred years ago, there were lots of diverse cultures, adapted to their local environments. Those were all deliberately wiped out and assimilated by the dominate systems of organized lies, operating organized robberies. Therefore, I do not believe that most people "choose" social pyramids, but rather that the few that do are able to get into a postive feedback of backing up lies with violence that benefits them enough to keep on doing that more and more ... In the case of North Americans, it was primarily the runaway results of the feedbacks between the funding of politics, and being able to corrupt the political processes to make profits from frauds, some of which could then be reinvested in more frauds.

These days, banksters give themselves billions of dollars in bonuses. There is nobody else that can compete with them, in their ability to dominate the funding of politics. The same principles applies to all the special interest groups that are able to buy up control of the governmental monopoly powers, to advance their special interests, while those adversely affected have less and less real ability to participate in the political processes in order to resist that. Look at any public meeting, and ask, "Who is getting paid to be there, and who is not?" Keep that going long enough, and eventually the results that come out of those meetings favour those who were being paid to be there, while working against those who were not paid to be there. Every special interest that makes more money from corrupting the use of the powers of government automatically becomes even more able to do that in the future, while those who suffer under that regime become less able to actually resist. The monopolization automatically runs amok, due to its positive feedback features.

But nevertheless, IN THE LONG RUN, diversity works best, because it is the most adaptable. Therefore, we should not be allowing so much monopolization and central planning to gain the upper hand, because that will surely have extremely bad longer term consequences. However, in each short-term increment, that kind of lies, backed by violence, keeps on being the most successful, despite how bad that will surely become later.

However, from a sublime point of view, nature seems to allow both runaway specialization, and subsequent mass extinctions. The irony of human evolution is that we are doing it to ourselves!

Thu, 02/13/2014 - 18:05 | 4433997 butchtrucks
butchtrucks's picture

In other news, former Citibank head Sandy Weill just sold his Manhatten apartment for $88 million to the daughter of a Russian oligarch. 

Still, people like Weill are exemplars of the free market at work. They work in an industry that delivers clear value to the economy, and has never relied on government bailouts. Oh, wait.

For a bit of perspective: the median full-time worker in the United States makes about $40,000 a year. So it would take the typical worker 2,000 years to earn enough to buy the Weill apartment.

Thu, 02/13/2014 - 21:05 | 4434489 Absinthe Minded
Absinthe Minded's picture

Jesus I hope Obamacare keeps me alive that long.

Thu, 02/13/2014 - 20:26 | 4434511 Tinky
Tinky's picture

I'd recommend a fixed, rather than adjustable rate 2,000 year mortgage.

Thu, 02/13/2014 - 20:38 | 4434555 grekko
grekko's picture

Now, that's precious!

Thu, 02/13/2014 - 20:43 | 4434568 lotsoffun
lotsoffun's picture

assume i'm a marxist.  it would require him stealing the wages of of 2,000 workers for a year to fund that. 

karl marx says - weill skimmed either the complete wages for a year from 2,000 workers, or 10% of the wages from 2,000 workers for 10 years, or 20% of x workers for  z years, etc. 

by the way  - i don't disagree with marx.  it's just a fact.  if lloyd and jamie can make 35 million this year, well, where did it come from ?

i'll let the zh team run with that. 

 

Thu, 02/13/2014 - 23:39 | 4435210 Radical Marijuana
Radical Marijuana's picture

lotsoffun, I distinguish scientific Marxism, from messianic Marxism.

The scientific aspects were accurate enough for their day, however, the messianic politics that were supposed to be based upon that ended up being just more bullshit. (Generally speaking, people who talk about "communism" or "socialism" tend to be spouting absurd bullshit, since those impossible ideals tend to cause the opposite to happen in the real world.)

The scientific Marxism from the previous Centuries ought to be up-dated to become more consistent with 21st Century sciences. However, the messianic Marxism was garbage that should be composted.

In many of my comments on Zero Hedge, I have outlined the high lights of what I believe is needed in terms of intellectual scientific revolutions, in order to go through sufficient paradigm shifts in the philosophy of science, which could then be applied to politics, and especially to militarism. Some of the core of the old scientific Marxism still has some merit, but everything that facilitated the messianic Marxism, political propaganda (where "communism" rapidly became a Huge Lie), had no merit.

Fri, 02/14/2014 - 05:12 | 4435738 kurt
kurt's picture

dead end

Thu, 02/13/2014 - 23:18 | 4435160 samsara
samsara's picture

Martin Armstrongs take.

Gangster Bankers: Too Big to Jail

Matt Taibbi is back exposing the deal they snuck under the table for HSBC who got caught money laundering for drug dealers and terrorists. The bankers have been getting away with unbelievable fraud because they have been blackmailing government arguing who will sell their debt if they go down. The days of these bankers are really coming to an end.

Once the Economic Confidence Model turns 2015.75, this will begin to look rather grim as they blow-themselves-up once again.

Bankers simply follow the money and that is why they always collapse for they have no ethics or long-term strategy. They go with the trend until it takes them down EVERY time.

They can control the New York courts, keep federal prosecutors on a short leash, and they can keep politicians in play with bribes (campaign donations), and they can blackmail the mainstream press. However, they cannot control the press outside of mainstream and includes these days the internet where the majority of the younger generation read – not newspapers.

http://armstrongeconomics.com/2014/02/13/gangster-bankers-too-big-to-jail/

Thu, 02/13/2014 - 23:50 | 4435239 money4nuttin
money4nuttin's picture

"If the bulk of the acquisition is a permissible activity, they're allowed to include a small amount of impermissible activities."...This was accepted by Congress as a Fed explanation & justification!

well, that seals it.  Defense attorneys, jailhouse lawyers. littles guys everywhere trying to defend yourselves... you have a new defense.  If you woke up 364 days of the year and did not break & enter, if you did not run over pedestrians, if you did not kidnap a CEO... then on the 365th you indulged in the forementioned. Well, that's  a small amount of impermissible activity. Congress has accepted this from the FED. and the FED is subject to Congressional oversite. WE, the people, the citizens are endowed with constitutional rights that Congress is mandated to protect. Congress, the FED has set a new precedent. A small amount of impermissible activity for all. get your cheatin the system groove on now!


Fri, 02/14/2014 - 05:09 | 4435732 kurt
kurt's picture

They haven't killed Matt, yet, because they enjoy seeing the chronicle of their sheer naked balls in your face!

Fri, 02/14/2014 - 14:48 | 4437098 Raging Debate
Raging Debate's picture

I always enjoy your dry sarcasm here Kurt. As long as the country still has freedom of speech their is a chance to restructure without a violent outcome. It's about all I can muster for the moment to say, this article really made me depressed at the dark side of our human nature and I tend to be a natural optimist.

 I started a very strong drink. Cheers to all of you especially the ones with the endurance to continuously educate the pubic and not give up on them. They are awake now and will likely have a new inerest in understanding why it all went wrong. Be patient, remember life and how you treat people isn't like how you treat noobs on Call of Duty video game.

Here's to the Freakin Weekend, a tune to drink to: http://www.youtube.com/watch?v=ZR0v0i63PQ4 

 

Fri, 02/14/2014 - 14:48 | 4437099 Raging Debate
Raging Debate's picture

I always enjoy your dry sarcasm here Kurt. As long as the country still has freedom of speech their is a chance to restructure without a violent outcome. It's about all I can muster for the moment to say, this article really made me depressed at the dark side of our human nature and I tend to be a natural optimist.

 I started a very strong drink. Cheers to all of you especially the ones with the endurance to continuously educate the pubic and not give up on them. They are awake now and will likely have a new inerest in understanding why it all went wrong. Be patient, remember life and how you treat people isn't like how you treat noobs on Call of Duty video game.

Here's to the Freakin Weekend, a tune to drink to: http://www.youtube.com/watch?v=ZR0v0i63PQ4 

 

Fri, 02/14/2014 - 06:29 | 4435777 Disenchanted
Disenchanted's picture

RM, +1 for the reference to Silent Weapons for Quiet Wars. I first read that back in the late 1990s, it was a lightbulb moment for yours truly.

IMO this below is a better link for that, as it also contains the original illustrations:

 

Silent Weapons for Quiet Wars

[ http://www.lawfulpath.com/ref/sw4qw/index.shtml ]

 

Here's an excerpt from SWQW I found useful...does anything here sound familiar:

 

Diversion Summary

Media: Keep the adult public attention diverted away from the real social issues, and captivated by matters of no real importance.

Schools: Keep the young public ignorant of real mathematics, real economics, real law, and real history.

Entertainment: Keep the public entertainment below a sixth-grade level.

Work: Keep the public busy, busy, busy, with no time to think; back on the farm with the other animals.

Fri, 02/14/2014 - 17:57 | 4437777 theprofromdover
theprofromdover's picture

You can print your own money, and then spend it.

As the legislature doesn't foresee trouble.

 

Maybe there is an us, and a them.

Who'da thunkit.

Note to self- better read about the French Revolution, heading our way someday soon.

Do NOT follow this link or you will be banned from the site!