The Chart That Proves The Fed's Policies Have Been A Failure

Tyler Durden's picture

A few days ago we presented an analysis by ConvergEx showing that due to the very close historical correlation between home prices and employment, it is the Fed's view that the only way to stimulate employment (aside from such BLS shennanigans as pretending that despite the natural growth of the labor force by 90k a month to keep up with population, those willing to work are in fact declining) is to raise home prices. Raising home prices be definition means either reducing supply - an event which is proving impossible with shadow inventory in the millions and rising, even as thousands of new delinquent mortgages appear each day while homebuilders keep on chugging out new homes that remain vacant for years, or increasing demand. It is the latter that the Fed targets, by attempting to make mortgage rates ever cheaper via LSAP, Operation Twist or other Treasury curve interventions that attempt to push down long-dated yields ever lower. This works in theory. In practice, however, as the chart below demonstrates, the Fed's entire ZIRP-targeting policy over the past several years has been one abysmal failure (for everyone expect those with immediate access to the Fed's zero interest rate capital - i.e., the Primary Dealers). As proof of this we present the following chart, which maps the SAAR in New Home Sales against the 30 Year Fannie Cash Mortgage. What appears very clearly on this chart is that despite ever declining mortgage rates, there is simply no interest in home turnover, and sales are at record low levels due to lack of demand, and lack of desire to sell into a bidless market, in essence causing the entire housing market to halt.

And this makes intuitive sense: the bulk of home owners who can take advantage of cheap credit are those who already have a mortgage and at best will refi into a cheaper one. For everyone else, either the bank's admissions criteria are too stringent, or the potential borrower is simply convinced that a year from today, the 30 Year mortgage rate will be another 1% lower (most likely with 100% justification). As such there is absolutely no drive to naturally restart the housing market (one can commence here a discussion of how central planning destroys every market it infect like a lethal virus, but we will spare that for another, more preachy night). For now we will leave you with this chart which proves beyond a reasonable doubt that the Fed's primary mandate: to lower the unemployment rate (by boosting home prices) has been a failure.

This also means that the ovecompensating academic idiots of Marriner Eccles will do next what is a perfectly logical next step for a cabal of deviant misfits hell bent on bending the world to their will: devalue the US currency to a point that "compensates" for their failure in the housing market. And that they can and will do. Even if it means dumping crisp hundred dollar bills out of helicopters.

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I think I need to buy a gun's picture

usa today....todays edtion the average retiree has less or about 25k saved......holy SHIT we are screwed......

SheepleLOVEcheddarbaybiscuits's picture

ha! 25k? try less than 10k............thats what happens when you create money not backed by specie. Fixed incomes are eviscerated through excessive money and credit creation which invariably leads to rampant inflation, lower standards of living. During the credit fueled boom, wage earners wealth declines, during the bust owners of capital welath declines. Slow steady growth with high savings and gold backed currency is the way to prosperity, not funny money.

TruthInSunshine's picture

The Bernank's greatest quotes (thus far). Be afraid. Be very afraid:


  • (November 15, 2005) "With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly."
  • (July, 2005) "We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though."
  • (October 31, 2007) "It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions."
  • (November 21, 2002) "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost."
  • "The money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying Treasury securities."
  • "One myth that’s out there is that what we’re doing is printing money. We’re not printing money."
  • (When asked directly during a congressional hearing if the Federal Reserve would monetize U.S. government debt) "The Federal Reserve will not monetize the debt."


The only banks that fear deflation are those that control governments, which is the case with the relationship between almost all developed nations today and their 'central bank' masters.

The central banks can print as much fiat as they wish, to compensate for any and all "losses" that inflation theoretically could do to their holdings.

Federal Reserve Notes, aka BernankBux, are prolific and compuslive liars of the worst order, and the same can be said of all fiat worldwide now, as all of it is conjured from thin air, backed by nothing of any inherent value (just empty platitudes such as "full faith & credit" at no cost to the central merry banksters & then loaned at interest, leveraged many dozens of times over, and then either repaid with interest - or better yet - defaulted on, allowing the masters of the Merry Central Bankster Puppets to Harvest the real assets that have actual, inherent wealth, that were pledged to securitize said loans (think homes, land, factories, equipment/machinery, farms, natural resources in the case of alleged sovereign nations, etc.).

Even if a huge percentage of unsecuritized loans are defaulted upon, it's no skin of the Money Masters sacks, as the basis of the loan was conjured from thin air, with zero cost of production, and any loans that perform (even a single one) are pure gravy.

Bonds are, for the most part, securitized by fiat such as EuroWipes or BernanBux.

It's such a brilliant racket that they're running.

Banks that have to earn profits via the conventional banking model of borrowing money at a low rate from a central bank, and loaning that money out at a higher interest rate (the interest rate differential is their gross profit, essentially), have everything to fear from inflation, as it completely destroys their conventional and main method of making profits, during normal times in the economic cycle, wherein rising interest rates drown the value of their past loans extended, absent extraordinary subsidization from some external source.

Bank loans are bank 'assets,' while deposits are 'liabilities,' and all things being equal, inflation destroys any profit (and could put the bank deep in loss) that the conventional spread between money borrowed and loaned typically offers it.

So, aside from central banks, which can compensate for inflationary impact by printing more fiat, and too-big-to-fail entities, which enjoy de facto central bank status (literally; plus, look at all the revolving door nepotism as to hiring between central banks and too-big-to-fail banks) and all sorts of 'extras' in the form of guaranteed and risk free profit making avenues offered exclusively to them by central bank policies, inflation destroys lenders and rewards borrowers.

It's not deflation on home values that wipes out those banks that choose to carry (rather than sell at the time of closing) mortgage backed paper - it's the fact that the loans go bad since a greater % of the people who are indebted on the mortage quit paying on their loans.

Could the deflation lead to the non-payment? Sure. But it's far more likely that job losses and wage reductions affecting affordability of repayment will do that trick. To say that the deflation in home values will lead to job losses and wage reductions is a common misnomer, IMO, that many economists are perpetuating these days - the health of the job market governs home values; the value of homes DOES NOT GOVERN THE JOB MARKET.

Take a moment to think about the people still working, but who are underwater 20% to literally 75% on their home values, but are still making their mortgage payments because they are still working and still have that ability (although more and more who can do so are CHOOSING not to do so, but I digress).

All things being equal, deflation in general, and on home values, means that the bank is getting supercharged returns on the loan it extended to the homebuyer, assuming the loan performs and the bank receives repayment on the underlying note.

It's my humble opinion that one of Bernanke's main goals was to flood as many banks with as much excess reserves as possible, while also extending extraordinary access to the discount window (offering de facto 0% loans), in an effort to keep as many of them from crashing as possible (I think about 900 have failed since 2008), during a time in which he knew their conventional means of generating income and making profits - via loaning money at higher rates than their borrowing costs - would completely break down.

And here we are, with banks that allegedly survived (so far), stuck with toxic balance sheets, full of shitty ass loans secured by eroding value assets, depending more and more on their excess reserve income and massive amounts of new fees (adding significant revenue to their top line) they are imposing on their customers, praying and hoping that here never comes the day that reverse repo operations really do take place, as that would mean a death sentence for another estimated 2500 banks (maybe more).

Anyone who tells me that banks are in anything other than extend and pretend mode, made possible by incredible intervention and excess reserves compliments of Bernanke & Geithner, along with incredibly lax regulation and fantasy-land valuation of assets (thanks to Congress), is really knee or thigh high in the Kool-Aid.

Similarly, given the unsettling trends of high inflation (real numbers), pathetic job growth (with the risk of actually printing negative numbers soon again - even by official and highly massaged measurements via the BLS), incredibly weak demand for loans and incredibly weak willingness/ability to make loans (unless its guaranteed/backstopped by the Fed or Treasury or subagencies of government), anemic retail and manufacturing data, etc., anyone who thinks Bernanke and our own beloved government haven't merely kicked the can at the expense of taxpayers and the organic economy and organic growth, for two long years, to the tune of at least 5 trillion in direct and incredibly inefficient spending (Stimulus, TARP, TALF, QE1 and QE2, etc.), and as much as 12 trillion considering what's yet to be paid back or what the government is still on the hook for in terms of guarantees on loans and toxic asset portfolios it contractually made, only complicating his dilemna and the nation's dilemna, should seriously reassess their level of intelligence or sources of information gathering.

The more that The Bernank pushes on a string (QE, ZIRP4EVER), the more people white knuckle their fiat. Oh, the irony.

It's all the snake eating its own tail.

The Bernank is DESTROYING the desire to consume, as he's freaking the world of savers and the presently liquid out with his absolute abomination of policies, while the non-savers and the majority who have difficulty getting credit have difficulty spending, also (given the banking sectors precarious-dead state of health).

Here is but one of many examples I can cite:  Mr. Smith, who is 78 years old, worked hard his whole life and retired with enough savings that would have, in an ordinary interest rate environment, have produced an income stream from interest on his savings, that would have prompted him to spend far more freely (he may even have already have replaced his 2001 Mercury Grand Marquis by now if not for the fact he is anxious due to his meager/non-existent interest ZIRP income).

So, Mr. Smith buys no new car, hires no one to put a sunroom on his (now radically depreciated home), and gets all of his grandchildren a lump of coal for Christmas this year.

All thanks to The Bernank.

And the cherry on top is The Bernank is thinking of going all in, doubling down on his failures in the U.S., with a sure fire IMF (i.e. U.S.) and credit swap line liquidity tsunami of USD into the EuroZone Debt Black Hole, which sucks in all capital, never to be seen again.

The alleged great academician, expert on The Great Depression, wizard of monetary policy, etc. etc., who is The Bernank, is a total and complete failure IF the goal of his actions was to help the broadest swath of people.

If his goal was to debase their purchasing power, concentrate more and more wealth in the hands of fewer and fewer Crony Capitalists (the opposite of true capitalists) who know all the right players in what is unquestionably now our Kleptocracy, he's succeeding magnificently.

No one really knows whether deflation or inflation takes firm grasp of the global economy, as things will spiral out of control, inevtiably, and social and political unrest will foment great changes that can't be predicted or controlled by even the Money Masters, and no one knows how the current system will implode or what will take its place (it will implode without question, however).

And to be honest, it doesn't really matter whether a deflationary death spiral or inflationary destruction of consumption does the economy in - the end result, the destruction of the global economy as we know it, will come about.

Some sane theses have been put forth that we'll have a deflationary collapse first, followed by hyperinflation. While that certainly sounds as likely as anything, no one knows, because people like The Bernank and those he runs errands for won't be calling the shots after things break down.

NumNutt's picture

I agree 100% with your post, but think you failed to draw attention to the next shoe that is sure to drop as a result of the destruction of the global economy, war. The clouds or war are already starting to gather. Russia is being taken over by a dictator, China is threatening war over the dispute with Iran with western powers, Iran is rushing to develope the nuclear bomb, Venezuela and Cuba are working to destabilize South America, Argentina is trying (again) to lay claim to the Falkland islands and restricting access to them. All this is happening within the past several months, not to mention the middle east becoming more secular daily. In the past the tensions between the different world powers was kept in check by a mutual need and want to maintain the cash flow in and out of their countries. That need is quickly vanishing, and when there is no longer concern about how an aggressive act will affect capital flow, it will occur. Add into this formula a dwindling world energy source (oil) and the formula becomes explosive. The clouds of war are gathering, batten down the hatches, and reef the mainsail, there is a storm on the horizon....

cranky-old-geezer's picture



This is one of the most nonsensical bullshit comments I've seen. It's full of misconceptions indicating the author has little or no understanding of monetary theory, to wit:

It's not deflation on home values that wipes out those banks that choose to carry (rather than sell at the time of closing) mortgage backed paper

1) Using "deflation" to describe falling home values and collapsing economic demand in general.

"Deflation" is not about prices. It's about the money supply relative to GDP. "Deflation" describes shrinking money supply relative to GDP with resultant increase in the value of the currency.

Falling home prices are just that, falling prices, not "deflation".

2) Alleging falling home values don't affect value of home-related financial paper held on banks' books.

Pure bullshit.

Falling home values in '07 and '08 are one of the major causes of the '08 financial collapse. It's WHY "mark-to-myth" accounting was put into effect. So banks did not have to mark home-related financial paper down to collapsing market value and instantly be in balance sheet insolvency.

it's the fact that the loans go bad since a greater % of the people who are indebted on the mortgage quit paying on their loans.

3) Yes, this is a factor. But not the major factor. The major factor was collapsing market value, as stated in 2.

Majority of those loans were guaranteed by Freddie and Fannie, who had to make good on them when the borrower stopped paying and was foreclosed upon, shielding banks and MBS investors from the cashflow loss, vastly reducing the effect of borrower defaults on banks and secondary market investors.

So author's allegation here is complete utter bullshit.

The only banks that fear deflation are those that control governments, which is the case with the relationship between almost all developed nations today and their 'central bank' masters.

4) Central banks don't fear deflation because they control deflation / inflation by having control over the money supply.

So again, author's allegation here is complete bullshit.

The central banks can print as much fiat as they wish, to compensate for any and all "losses" that inflation theoretically could do to their holdings.

5) Central banks cannot print currency willy-nilly to allegedly increase the value of their balance sheet holdings. Currency printed must be linked to loans made or assets purchased. It doesn't affect the book value of previous loans and asset purchases.

6) Value of previous loans and asset purchases held on central bank books is determined by market value just like anyone else.

So author's statement here is completely false.

These two blatantly false statements form the basis for author's entire comment, making the rest of it utter complete bullshit.

When you begin with a false nonsensical premise, everything that follows is false nonsensical bullshit.

Author is just as wrong and foolish as statements he quotes from Bernanke.

Apocalicious's picture

Actually, you show more ignorance than said author. Mortgage paper is not "marked down" as the value of homes per se falls - AT ALL. It is marked down as the default rate of the paper increases, and as the recovery rate (based on collateral value) decreases. If the collateral value were to decrease, and somehow default rate were also to decrease simultaneously, concievably the value of the paper could remain the same. Realistically, that does not occur. In practice, default rates increase when recovery rates fall. The major driver of defaults has been shown to be not employment, income or monthly payment affordability, but rather equity. The less equity, the more likely a default, increasing exponentially as the equity goes negative. Equity is driven by value minus debt. Debt amortizes down by the monthly principal payment, and value is driven by market forces. So as the market value falls faster than the principal balance of the loan, default probability goes up, recoveries go down, RMBS drops in value. However, if the borrower continues to pay, those implied probabilities could be very wrong, and actually create significant value in performing mortgages, regardless of the market value. So clearly, value is a driver in equity, but EQUITY has the highest Rsquared with default rates. Period.

TruthInSunshine's picture

Cranky Old Geezer:  Talk about making a preliminary mistatement of fact/reality that dooms the legitimacy of everything that follows!

First, the phenomena of "deflation" is NOT characterized by a contractionary money supply, but it is precisely "a decrease in the general price level of goods and services."

While a contraction in the money supply or, more LIKELY, a contraction in credit, can contribute to deflationary forces, such a contraction is more symptomatic of deflation or deflationary impulses already in play, and is not, in and of itself, "deflation." Rarely has there been a contraction in money supply or CREDIT PRIOR to some form of major economic disruption (such as some dislocation or 'bubble' popping)

Who would not loan money or extend credit to another on the basis of the holding of assets that one was confident would rise, rather than fall, in price? Was Goldman Sachs selling or buying MBS at or near the peak of the real estate bubble, and to whom (who was buying? Aha!)

C'mon, CrankyOldGeezer, this basic stuff you're flubbing.

Second, on this point, you CAN'T be serious:

Here's what I said -

The central banks can print as much fiat as they wish, to compensate for any and all "losses" that inflation theoretically could do to their holdings.

And here was your response:

5) Central banks cannot print currency willy-nilly to allegedly increase the value of their balance sheet holdings. Currency printed must be linked to loans made or assets purchased. It doesn't affect the book value of previous loans and asset purchases.

Really? So you mean to overtly state or at least imply that the Federal Reserve a) can't simply print as much fiat as it wishes, literally absent any constraint (as it can find a recipient of such fiat, whether U.S. Treasuries, plying bank excess reserve accounts or funding massive swap lines with European counterparties), and more crucially, you actually believe that b) the Federal Reserve DOES CURRENTLY have a balance sheet which fairly and fully approximates the true value of its holdings in the form of toxic shit it took off the hands of entities such as Goldman Sachs and JP Morgan (i.e. bail out via Maiden Lane Slush Fund) consistent with anything remotely approaching Fair Market Values?

If so (to a or b above), you are high on crack.

More importantly & fundamentally, and to your point, Apo, not only is Cranky Old Geezer apparently ignorant of the fact that many pension & other retirement funds (see those in the UK, US and , yes, Iceland! as examples) hold reams of residential (and commercial) MBS (there's a reason why Goldman Sachs was so fiercly intent on getting "shitty" paper revalued to investment grade, right?), but Cranky Old Geezer apparently is unaware of one of the greatest scams now in process, to wit, the ability of banks and other financial institutions to be able to value their paper at levels that have more to do with intergalaxy planetary alignment and unicorns than anything even remotely facsimilating reality.

The New Global Regulatory Architecture

"Indicating that true global leadership in finance remains in the United States, perhaps the fiercest and hottest battle of the credit crisis revolves around the issue of mark-to-market and fair value reporting standards, set by the US accounting body, FASB, and its international counterpart, which takes its cue from FASB, the IASB, Some are predicting the disappearance of jobs, many say they fear another banking crisis, depending on the outcome.

Letters pouring into the Financial Accounting Standards Board (FASB) predict those shocks and more from the rule-makers’ proposal to expand mark-to-market, or fair value accounting at US banks.

Meant to give investors more up-to-date information about banks’ financial condition, the proposal would require banks to put market values on all of their loans, even those that they don’t intend to sell. Banks now value most loans based on historical costs, a measure critics say can become outdated. The new rule would be effective in 2013, though small banks could take four more years to comply.

The proposal, partly a response to the global financial crisis, has generated fierce opposition from banks, which fear it would reduce their reported capital and require them to increase reserves. Banks argue this could discourage them from making some types of loans, hurting businesses, triggering more unemployment and harming an already fragile American economy.
Head: Robert Tweedie
Location of Head Office: London, UK

United States of America
Financial Accounting Standards Board (FASB)
Cheered by the announced retirement of FASB Chairman Robert Herz, a mark-to-market proponent, opponents have stepped up their assault. According to the American Bankers Association (ABA), a lobbying group for the $13 trillion banking industry, the change would bring about $6.7 trillion of bank loans under mark-to-market rules.
Mark-to-market critics, including members of Congress, blamed earlier tightening of fair value rules for intensifying the 2008-2009 financial crisis by triggering massive bank write-downs as prices of mortgage securities plunged. Fair value proponents dispute those claims and say more market-based information just reveals riskiness already there."


macholatte's picture


"a new tax on every foreign currency transaction in the world,"





President Obama's team of negotiators at the United Nations Climate Change Conference may agree to a tax on foreign currency transactions, designed to pay for a "Green Climate Fund," that would fall disproportionately on American travellers and businesses, according to a group attending the conference that is skeptical of the UN position on global warming.

Negotiators at the conference are considering "a new tax on every foreign currency transaction in the world," according to the Committee for a Constructive Tomorrow (CFACT). "Every time you travel abroad, you'll have to pay a climate tax," explains CFACT, the group that released the "Climategate" emails. "More importantly, every time we import goods, every time we export our fine products (think jobs) we will do so with a climate tax skimming off the top."

European countries would evade much of the tax burden, however, because "transactions within the Eurozone won't have to pay this new tax."

CFACT suggests that Obama is open to implementing this tax and similar policies in the absence of a full climate treaty, which would require congressional approval.  "We have learned that while many have discounted this conference, knowing that a full climate treaty is difficult to achieve especially with a U.S. Senate that will not vote to ratify," CFACT says. "Obama and his fellow climate travelers are working around the Senate and planning to stick America with the bill."


Zgangsta's picture

That and another 25k will buy a cup of coffee once retirement time rolls around.

Scribbles's picture

"For now we will leave you with this chart which proves beyond a reasonable doubt that the Fed's primary mandate: to lower the unemployment has been a failure."

I agree, but what does that chart have to do with unemployment?

Tyler Durden's picture

It sometimes pays to read the first sentence of a given post.

voshnishki's picture

Psh. Who needs the first sentence when you see the first word?

dark pools of soros's picture

Who needs to see the first word when one knows they will never stick around for the reply and thus be assured to have the last word... in their mind anyway

Pool Shark's picture

Who reads the first word when,.. oooh, look,.. something shiny...

Scribbles's picture

My reply is a few posts down, still unaddressed. 

I think Tyler does some great work, I love the site, but this correlation is specious. 

jcaz's picture

"Daddy, why do you kick your legs when you swim?".....

Apocalicious's picture

The correlation isn't specious, it's causal in the other direction. Employment drives home prices, as do mortgage rates. Keeping rates low allows people to buy more house, as they can "afford" bigger mortgages. The thinking is that the causal relationship in home prices may work the other direction, i.e. higher home prices will lead to higher employment. This is like pushing on a rope. The chart shows that low interest rates have not really even stimulated home purchases, let alone a price recovery (and clearly, not employment.) There's nothing specious about it, but it highlights how people who can't think through correlation, causation, etc. can misinterpret data.

A key missing link in why homes can't rally is that appraisers refuse to let prices go up - period. They are in full CYA mode, reacting to the last disaster. Houses simply cannot print an uptick because they are not going to let it. That is, unless people can pay cash.

francis_sawyer's picture

Who reads the first word when,.. oooh, look,... Dancing With the Stars is on...

TheSilverJournal's picture

The Fed's only view is to stop depositors from losing money and a bank run. Everything else is just noise.


Fed policies were a failure if we were to assume that their success was predicated on anything other than making their bankster friends wealthy. 

topcallingtroll's picture

It could have been much much worse, but strangely that might have been a good thing.

slewie the pi-rat's picture

plus, the experiments in mass hypnosis are coming along nicely

JungleJim's picture

I assume that's supposed to be facitious, right ?

francis_sawyer's picture

Not sure if it was facitious or not, but I'd guess it was "facetious"

Scribbles's picture

Well, it's just interesting that the correlation argued is between unemployment and housing prices. The graph shown is number of sales for a SUBSET (new home) category.

Are we supposed to assume that number of "new home sales" is related to average prices of all homes which is also related to unemployemt?

It's a long way to go when there's unemployment data available (ie: where you got the initial data for the home prices/unemployment relationship)

flattrader's picture

>>>Are we supposed to assume that number of "new home sales" is related to average prices of all homes which is also related to unemployemt?<<<

I thought the first article from these morons was poorly conceived and written.  This is just as bad.

Everything you need to know about housing is here--

If only that second chart were adjusted for SGS shadow inflation.

ToNYC's picture

The proof of the Bernanke's ZIRP fiasco is prolonged Unemployment and uncreative destruction of the seniors as savings engine.

Why deposit to receive worth less? The money is  BROKEN because it doesn't earn rent like ONLY the monopoly banks' fake freely-invented, disembowled, Night-of-the-Living-Dead money that won't meet the impossible future returns they throw around.

"Kill the brain; Kill the ghoul."

- Night of the Living Dead by George Romero

GubbermintWorker's picture

How did this guy pass the bot test?

Eireann go Brach's picture

Hey Bernanke, if you are reading this article too, if I ever meet you on the street I will give my kids permission to kick you in the nuts until you scream like a girl!

Ronaldo's picture

One kick with a sandaled foot should do it, he is a sissy!

zorba THE GREEK's picture

Fed policies may not have failed to achieve their real purpose.

But only the Fed and TPTB know the real objectives of the Fed.

The Big Ching-aso's picture



It's wholly apparent that Bernanke is so terrified of repeating the mistakes of GD1 that he's determined to not repeat them in GD4.

topcallingtroll's picture

The problem is that generals are always fighting the last war.

The dollar and world economy are vastly different this time around.

Its a long story why he cant get traction. Maybe i will submit an article someday.

bob_dabolina's picture

The US feels so much like Soviet Russia

It's a tough crow to swallow but you have to look at the facts. 

It feels dangerous where we are today.

....if Ron Paul get's Polonium poisoning, or leaps out of a sky scraper.... it would be confirmed. 

topcallingtroll's picture

I never imagined I would live in a time when the government was the mortgage market, comrade.

Strike Back's picture

But Bob, wasn't Soviet Russia culturally and racially homogenous?  I thought those societies were always successful?!!  What the fuck do we do now BOB?  OOOO, Mr. Dabolina.

C'mon Trav, I know you are just waiting in the wings.

bob_dabolina's picture

I never argued for a homogenous society....EVER

I have argued that Asians and people of European heritage are more intelligent than African Americans. That has been proven and I stand by that.  

If you would like to prove me wrong....DO IT

bob_dabolina's picture

Do you have something to say?

Al Gorerhythm's picture

You're not too fast on the uptake there, Bob, you being so genetically endowed and all.

dolph9's picture

Ha, the Soviet Union was anything but culturally and racially homogenous.

Even so, I would make the following argument:  a certain degree of homogeneity is a precondition, but not a guarantee, of a successful society.

So in wonderful, diverse America we're fucked no matter how hard we try.

francis_sawyer's picture

If one might desire to take the notion of being 'homogenous' to the "n"th level, at some point you'd reach the concept of "inbreeding"...

At which point you'd have to consider 'clans' like the Hapsburgs or Rothschilds as being 'more intelligent' &/or more advanced...

I'd therefore seriously challenge the notion... Blithely I'd offer that, to the extent offered in the hypothesis mentioned above, Efforts towards becoming more homogenous would lead to becoming deranged, sociopathic fuckfaces...

Al Gorerhythm's picture

Bob, you must have missed the memo of the law that was passed by the senate the other day, 90-something to 7, that gives the military the power to arrest you, hold you, your wife or kid, your mother! in indefinate detention without trial. Many disappearances were recorded in Argentina and Chile using the same powers. Waaaaay past Russia. They never had a constitution like this to destroy. They never had Liberty enshrined by Constitutional Law. Look where we are now. Waaaayy fucked up the shute.

RobotTrader's picture

Bernanke has performed a miracle.

84% rally in the SPY since March 2009

In the face of the absolute worst economy in a generation.

However, Gold is tanking in Asia.

That is because Bernanke is simply not printing fast enough.

If he punched down the accelerator, printed trillions more, maybe the 10-yr. yield would be at 5% - 7%, the Dow would be over 15,000 and gold would be at $2,000.

The Big Ching-aso's picture



Ingesting psychotropics while under the influence of alcohol is not good for treating megalomanic schizophrenia.

ToNYC's picture

So it's a good thing for all else but megalomanic schizophrenics? It's all good, there's plenty of Thorazine for them.

Mike2756's picture

Oh, i'm sure they have something up their sleeve to keep the buck under pressure if other currencies implode.

topcallingtroll's picture

I have said for a year now we are gonna japanify.

The deflation monster is huge. There is no escape.