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Charting The Latest Iteration Of Moral Hazard

Tyler Durden's picture


Since this chart from the WSJ sums up petty much everything about the "efficient market hypothesis" or whatever it is those wacky Chicago PhD's call their multi-variable, self-similar, Lorenzian "strange attractor" equations that describe human irrationality to the dot, there is little need for commentary (those who wish to do so, can read more about it at "Fed Faces Old Foe as Hazard Returns")


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Sun, 08/28/2011 - 22:57 | 1610702 Kali
Kali's picture


Sun, 08/28/2011 - 23:34 | 1610787 ratso
ratso's picture

Chicago Ph.D. ?? I think not.  Sounds much more like mutual fund salesmen blather to justify marginal returns for high management fees; sounds more like Smith Barney and Merrill Lynch lying their way into your pocket.   

Sun, 08/28/2011 - 23:49 | 1610827 IBelieveInMagic
IBelieveInMagic's picture

Despite the gnashing of teeth, hasn't the USD enabled consumption been great -- all the Fed/US Treas/EU effort is to keep it going a little longer -- the real losers are the population in the commodity rich/defenceless countries who have disgorged their natural wealth for bits and papers!

All the rest is just hypocricy and denial...

Mon, 08/29/2011 - 00:23 | 1610886 Dick Fitz
Dick Fitz's picture

"the real losers are the population in the commodity rich/defenceless countries who have disgorged their natural wealth for bits and papers!"

That's the scariest part- we've exported inflation (in the form of worthless bits of paper and data entries) while importing real goods, like oil, iPhones and Barbie dolls. When that tide turns- and we can see the waves lapping at the shore today- we are going to see the value of the dollar plummet in value in a manner unseen in history. One day soon, dollar holders overseas are going to see the writing on the wall, and the slow trickle of repatriated dollars will become a flood. No one wants to be left holding the bag. The governments that hold US debt will be loathe to do it- they know that when they do they will have to revalue their "marked to fantasy" US holdings, which will hurt their economy- but when the dam breaks, it will be better to lose 50% of their value than 99%. The loss in value will be swift, and will devastate the US (and world) economy.

That day is fast approaching, and I fear it's going to be sooner than we think...

Mon, 08/29/2011 - 01:33 | 1610986 Fish Gone Bad
Fish Gone Bad's picture

In a democracy, the 51% pretty much make the rules for everyone, including the 49% who dissagree.  There is a problem when the majority wants to enact some law over the minority though.  This has been seen in voting rights for blacks, women, and other disinfranchised peoples.  So now we get to see what happens when the "young people" who did not vote to give out money, finally get a voice.  Ron Paul will be the front man for that voice screaming, "It's not my debt!!!" 

Mon, 08/29/2011 - 02:29 | 1611029 TruthInSunshine
TruthInSunshine's picture

In a democracy, the 51% pretty much make the rules for everyone


We don't have a democracy NOR a republic.

We REALLY DO have a kleptocracy  whereby 0.1% make the rules for everyone, and the system is hopelessly broken.

Ask any politician or regulator in government who really owns them (and then ignore their response & FOLLOW THE MONEY).

Mon, 08/29/2011 - 05:49 | 1611103 Idiocracy
Idiocracy's picture

Exactly.  Let's all us ZH posters agree to agree that the US of A is not a democracy.  That's the low-hanging fruit, in terms of thought work.  

Reasonable prefixes to join with "ocracy" in the context of the USA are "plut-" "klept-" "idi-" and the like.  

Mon, 08/29/2011 - 21:32 | 1613670 Tompooz
Tompooz's picture


Mon, 08/29/2011 - 09:54 | 1611452 Leopold B. Scotch
Leopold B. Scotch's picture

Yeah.. the 0.1% really were chomping at the bit for a vastly expaneded Healthcare Welfare program. (Let's not call this insurance.)

Mon, 08/29/2011 - 10:55 | 1611672 Pants McPants
Pants McPants's picture

I think you mean 51% of voters.  When you consider elections have very low turnout the actual "lawmaking" arm of the voting population is quite small.

Mon, 08/29/2011 - 06:09 | 1611108 Ying-Yang
Ying-Yang's picture

Good catch Ahmeexnal... The 2nd link is a good watch for Ron Paul debunkers. Fox spent serious time with Paul to allow hime to make some points. He is right about FEMA if debunkers think about what he is saying. He is not a JFK, Clinton or Reagan when it comes to excitement but his message is spot on if you want this country to get back on track.


Mon, 08/29/2011 - 12:27 | 1611972 RockyRacoon
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Ron Paul: "FEMA creates many of our problems because they sell the insurance because you can't buy it from a private company, which means there's a lot of danger, so we pay people to build on beaches, and then we have to go and rescue them," he said.

There is the nuclear industry in a nutshell as well.   What insurance company would cover a nuclear power plant?   Look at the Japanese debacle....   So, the gov't insures them and that creates moral hazard.   If private insurers were on the hook the maintenance and upgrades would have to be done to prevent "accidents".   But no, these things cost money and the cost of the electricity to the end user would go up.   So, government is subsidizing YOUR power costs.   Moral hazard at work.

Mon, 08/29/2011 - 06:50 | 1611121 Confused
Confused's picture

I fear that the good doctor will be co-opted once TPTB realize the support he is capable of obtaining. 


Let me be clear. I do not think that Ron Paul will compromise. But I think it would be hard to resist getting swallowed up by them once they decide to endorse him in some fashion. Easier to direct his course, then to let him do his thing. 

Mon, 08/29/2011 - 00:50 | 1610930 TBT or not TBT
TBT or not TBT's picture

And our government will collapse.


Sun, 08/28/2011 - 22:59 | 1610710 trampstamp
trampstamp's picture

Nothing wrong making some money going long to the bottom.

Sun, 08/28/2011 - 22:59 | 1610711 Eireann go Brach
Eireann go Brach's picture

Hope and change at it's finest!

Sun, 08/28/2011 - 23:38 | 1610799 hardcleareye
hardcleareye's picture

Yes sir, but behind door two was McCain/Palin   (Deep sigh, shaking head,)  

Mon, 08/29/2011 - 12:42 | 1612022 RockyRacoon
RockyRacoon's picture

Upside:  This train would be fully wrecked by now.   That's the optimistic view.

Sun, 08/28/2011 - 22:59 | 1610712 PulauHantu29
PulauHantu29's picture

"No one saw this coming," they testitifed.....

Sun, 08/28/2011 - 23:35 | 1610722 TruthInSunshine
TruthInSunshine's picture

OT, but OH SO Worth it:

In the mean time, The New York Times (of all papers), comes out with a major piece by Grethchen Morgensen, saying "oh noes! The bailouts didn't help Main Street, and Paulson, Geithner & Bernanke have lied to the American People" -

- but wait for it; Morgensen says the Bernank WILL DO IT AGAIN, but that this may be a "tough sell" to the American People.


The best part of this article is having a former Cleveland Federal Reserve Attorney spill the beans on the SHAM & SCAM & RACKETEERING OUTFIT THAT IS THE FEDERAL RESERVE (down with The Fed & ALL FIATSKI-FRACTIONAL RESERVE PONZIS).


Published: August 27, 2011

FOR the last three years we have been told repeatedly by government officials that funneling hundreds of billions of dollars to large and teetering banks during the credit crisis was necessary to save the financial system, and beneficial to Main Street.

But this has been a hard sell to an increasingly skeptical public. As Henry M. Paulson Jr., the former Treasury secretary, told the Financial Crisis Inquiry Commission back in May 2010, “I was never able to explain to the American people in a way in which they understood it why these rescues were for them and for their benefit, not for Wall Street.”

The American people were right to question Mr. Paulson’s pitch, as it turns out. And that became clearer than ever last week when Bloomberg News published fresh and disturbing details about the crisis-era bailouts.

Based on information generated by Freedom of Information Act requests and its longstanding lawsuit against the Federal Reserve board, Bloomberg reported that the Fed had provided a stunning $1.2 trillion to large global financial institutions at the peak of its crisis lending in December 2008.

The Rescue That Missed Main Street



Sun, 08/28/2011 - 23:38 | 1610796 Missiondweller
Missiondweller's picture

+ 10 Long but good post.

Sun, 08/28/2011 - 23:39 | 1610800 TruthInSunshine
TruthInSunshine's picture

It's shortened, now, by magic.

I didn't edit it. Ghost in the Machine.

Sun, 08/28/2011 - 23:53 | 1610839 PulauHantu29
PulauHantu29's picture

Excellent post. I am reading her book now...excellent also ....a little depressing.....

Sun, 08/28/2011 - 23:04 | 1610725 KennyG09
KennyG09's picture

"But fiat paper money also creates moral hazard for the money users — the citizens, the banks, and the governments — because they sooner or later realize that the masters of the printing press have the power to bail out any bankrupt firm or government. They engage in reckless financial planning, expecting that the monetary authorities will not allow too many reckless planners to go bankrupt. This speculation has been borne out by the last thirty years. Public and private debts are at record heights all over the world."

Sun, 08/28/2011 - 23:46 | 1610819 wisefool
wisefool's picture

Snarkasm Flashback to the 'aughts.

"But if we sent you a $600 stimulus check, $1800 if you aint a homo, would you join us? How about we throw in the ole' secretary of treasury spot?"

Monetary is Central banks. They fired every wad they have. Fiscal is politicians and there are many more pages to add to the tax code to get this economy going good and proper. My point is many of us sound money advocates on ZH and other places are not adressing the particular printing press causing the true problems.

Mon, 08/29/2011 - 07:37 | 1611147 malikai
malikai's picture

Yes, but with sound money, the only way the .gov can spend money is by direct taxation. Taxation which is burdensome and unpopular will make politicos think twice before handing out the fruits of their constituent's labor to their pals. Furthermore, when people directly experience the negative effects (taxation, null results) of the latest and greatest porkulous, they'll probably think twice before electing Mr. Promises and probably think twice before shunning Mr. Reality.

Sun, 08/28/2011 - 23:06 | 1610728 DeadFred
DeadFred's picture

Nothing changed, just some nebulous words, The market goes where it's told to go when volume is low. The robots will pump it up again so we can make more money going down again through the same territory. Do they publish a chart of when they will tell the bots to move down? (sarcasm). Not sarcasm is where is the best place to check on how short the market is because my guess is the market will turn down when 'they' determine there are enough sheep on board to the rally-express to be worth shearing.

Mon, 08/29/2011 - 00:01 | 1610852 unununium
unununium's picture

It's easy to know when it will go down.  Right after they ban shorting.

Sun, 08/28/2011 - 23:08 | 1610737 krispkritter
krispkritter's picture

Wondering why all these graphs don't show a downline ending in a big swirling toilet bowl? Banzai? Fuck 'Moral Hazard', I want Turdbowl 'Punch In the Face' Hazard. Something that gets the attention of the electorate and gets some meaningful change underway, whether with dropped Chads or Chads with UZI's. Otherwise who cares what the 'hazard' is? It's going to end the same way if not. Screw the system that has been screwing us. All you assbags that voted for 'Change', here's your chance to redeem yourselves; light yourself on fire and go hug your favorite elected official. A nice warm hug will do. You're obviously too brain deficient to be worthwhile to those that saw through the smoke and mirrors...

Sun, 08/28/2011 - 23:33 | 1610783 hardcleareye
hardcleareye's picture

You may want to consider increasing your meds. 

Mon, 08/29/2011 - 09:41 | 1611410 krispkritter
krispkritter's picture

Nah, can't afford them. Beer works fine. Just venting after a weekend of listening to friends/relatives and reading posts of Obamanaut apologists singing the praises for O's magnificient handling of a 'historic hurricane' and psycho-babble on his handling of the economy and how Irene will give a boost to the economy thanks to the almighty O'. Try explaining the Broken Window Fallacy to the Progressive-minded. The storm cleanup hasn't even started and the '...if this is O's Katrina, he did WAY better than Bushy...' is being spewed.  Had already read/saw RP's stuff on Fox(oops) and it just set me off.  The title bar on the chart says 'hopes, hopes, hopes' which pretty much says it all about this economy. Everyone 'hoping' things will work out but not many seem to be doing much about it. RP is, always has been, the voice of reason and even here he gets panned regularly, sometimes by those who admit to voting for Obama on the premise that the 'Hope and Change' thingy would work out for them. What a laugh. And how pathetic. Had they backed RP maybe the dead horse that was McCain wouldn't have been resurrected so easily and there would have been a viable alternative in '08. Nah, still probably wouldn't have worked but at least you could say you didn't vote for the current DIC (Disaster In Chief) in the WH. I stopped talking prepping, PM's, and politics with these people years ago and now I can't even get through hurricane season without more endless blathering on how O' is helping US 'recover' from one thing or another. Actually I take back my initial statement and will just stick my head in the toilet bowl and give myself a swirly. It'll cool me off, wash some of the BS from my ears, and prevent me from hearing anymore of these whiners for a brief moment...and to the 6 downers, if you voted for O, fuck you. If not, thanks...

Mon, 08/29/2011 - 13:28 | 1612143 RockyRacoon
RockyRacoon's picture

Nice rant!   The only caveat I'd add is that we really don't know where we'd be without the onslaught of "stimulus" and all the other money thrown at the problems.   I'd rather have had the money not spent at all, but it is impossible to prove the proverbial negative.   If the wasted money spend on the oligarchs has done anything at all it has allowed me extra time to buy the precious metals that I'll hold through the coming maelstrom.   I can be thankful for that at least.

Mon, 08/29/2011 - 02:24 | 1611028 darkstar7646
darkstar7646's picture

People had better start understanding how many voters there are going to be in next year's election that truly want the opposition _dead_. Not defeated, and not just the politicians. Dead, and including the voters too.

We're headed for probably a Corn-pone Hitler (as Kunstler puts it), which describes the Republicans well.

(And that's if we (and I don't think we will) get that far.)

Sun, 08/28/2011 - 23:09 | 1610738 IMA5U
IMA5U's picture

it's a kommunist market.  when the government wants you to take risk, take risk.  and when they want the market to crash, they let it

Sun, 08/28/2011 - 23:09 | 1610740 Cursive
Cursive's picture

What, they couldn't have worked "Bernanke Put" into the copybook heading?

Sun, 08/28/2011 - 23:11 | 1610745 RobotTrader
RobotTrader's picture

Asia is up

ES is up tonight

Could be a big day tomorrow.

Sun, 08/28/2011 - 23:17 | 1610759 Subprime JD
Subprime JD's picture

Robo you strangely disappeared during the big selloff

Sun, 08/28/2011 - 23:30 | 1610778 hardcleareye
hardcleareye's picture

Yeah Robo we missed you, no one to bust on....


Sun, 08/28/2011 - 23:21 | 1610760 TruthInSunshine
TruthInSunshine's picture

Hey RoboWanker, it may take a few days to get a big sell off so you go into hiding again, but at least you'll go into hiding again.

Now give me my cash, teller boy.

Mon, 08/29/2011 - 12:36 | 1611996 malikai
malikai's picture

Don't be so hard on him. I for one, appreciate his dumb money indications.

Sun, 08/28/2011 - 23:18 | 1610762 lizzy36
lizzy36's picture

or the dax could trade down another 3%.

its a crap shoot. not a market.

Sun, 08/28/2011 - 23:28 | 1610776 DeadFred
DeadFred's picture

There must be wailing and gnashing of teeth for the FOMC meeting to provide cover. The crystal ball ball is a bit fuzzy in the short term but the wailing and gnashing as Bennie walks into the meeting that's something I'm betting on. How high can it rally short term and still have the required angst in three weeks? Not very.

Sun, 08/28/2011 - 23:50 | 1610829 chump666
chump666's picture

this is a suckers rally...the market will short insurance/banks/transport/retail...everything.  reparitation trade after a disaster.

could be wrong, or i could be right.

Mon, 08/29/2011 - 00:50 | 1610931 chump666
chump666's picture

but I think I am right, EZ endgame is creeping up

Sun, 08/28/2011 - 23:12 | 1610749 Shineola
Shineola's picture

The real hazard comes when you breathe your last breath and go to your final accounting.

Sun, 08/28/2011 - 23:14 | 1610750 chartcruzer
chartcruzer's picture

with a bit more detail[s206018187]&disp=P

the last stimulus (QE2) produced little stock market gains and virtually zero economic progress.    Imagine what happens to the markets when QE3 proves that printing can not cure a debt loaded economy?

Sun, 08/28/2011 - 23:14 | 1610753 zorba THE GREEK
zorba THE GREEK's picture

In a rigged casino, always bet with the house. Better yet, stay out of the casino.

Mon, 08/29/2011 - 00:03 | 1610856 unununium
unununium's picture

> In a rigged casino, always bet with the house.

You can't even do that in a regular casino.

Sun, 08/28/2011 - 23:19 | 1610763 hackettlad
hackettlad's picture

I fear we'll be back to a position where the worse the data, the more the stocks rally on the hope of even more stimulus.  The disconnect between fundamentals and the market is astonishing.

Sun, 08/28/2011 - 23:25 | 1610771 Lazane
Lazane's picture

The only stimulus required is economic growth at a minimum of 4-6 % per quarter, by unleashing a starving private sector. Something an elite government stateist can never begin to comprehend.

Sun, 08/28/2011 - 23:25 | 1610772 Lazane
Lazane's picture

The only stimulus required is economic growth at a minimum of 4-6 % per quarter, by unleashing a starving private sector. Something an elite government stateist can never begin to comprehend.

Sun, 08/28/2011 - 23:27 | 1610773 Mr. Magniloquent
Mr. Magniloquent's picture

At ease, Gentlemen. This is just validation that Keynesianism is effective. We've got markets going up with liquidity increase to suppliment demand! Even animal spirits!


Sun, 08/28/2011 - 23:31 | 1610779 Yen Cross
Yen Cross's picture

Is it just me? usd/jpy looks like it want's to break that H-1 Parabolic line. London?

Sun, 08/28/2011 - 23:34 | 1610784 Mongrel
Mongrel's picture

Tossers and wankers, the lot of 'em . . .

Sun, 08/28/2011 - 23:44 | 1610790 sasebo
sasebo's picture

Want to have some fun this week? Easy. Everybody just convert all your demand deposits to FRN's. Banks would have to cash in their reserves at the fed, therefore reduce their liabilities, call in loans etc. due to reserve requirements. A run. Easy. It's coming sooner or later. Why not next week? I did a 60k last week. They really had to scramble, took them a week to get the FRN's from the fed. It's all just funny money printed by the banks & fed anyway.     

Mon, 08/29/2011 - 00:11 | 1610868 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 more     Great move!

And remember, paper fiat is better than electrons (at least for a while).  Also, with interest rates so low, there is NO opportunity cost to holding long green.  Everyone ought to have a few thousand lying around the house in case of a Bank Holiday...

Consider buying some gold with all that yummy fiat you took out!  

Mon, 08/29/2011 - 00:25 | 1610892 sasebo
sasebo's picture


Everything but the 60k is in AU & AG in my possession in a fire & water protective safe. 

Sun, 08/28/2011 - 23:37 | 1610793 Stuck on Zero
Stuck on Zero's picture

The Bernanks stimulus works.  Just ask any billionaire.

Sun, 08/28/2011 - 23:37 | 1610794 element115
element115's picture

I treated my wife and kids to a "Robo Sunday" today. I am not making this up. We had lunch at Chipotle, bought a bunch of overpriced shit at Lululemon (it is very upsetting that they make their sales staff wear skimpy yoga outfits, I had to endure this for like 25-30 minutes), finally got a White iPhone 4, and we just finished watching a movie on Netflix.


Sun, 08/28/2011 - 23:42 | 1610812 TruthInSunshine
TruthInSunshine's picture

Don't buy his bullshit.

A true RoboTarder Sunday is wankin it to a re-run of Three's Company, eating a frozen burrito cooked via microwave from 7-11, and talking to LuLu, the weird, foreign neighbor, through the paper thin drywall separating RoboTarder's apartment and his.

Sun, 08/28/2011 - 23:42 | 1610810 reader2010
reader2010's picture

“The society which scorns excellence in plumbing as a humble activity and tolerates shoddiness in philosophy because it is an exalted activity will have neither good plumbing nor good philosophy: neither its pipes nor its theories will hold water.” - John W. Gardner

Mon, 08/29/2011 - 00:13 | 1610873 DoChenRollingBearing
DoChenRollingBearing's picture

I am really looking forward to more comments by reader2010.  You are off to a great start.

Mon, 08/29/2011 - 01:31 | 1610981 Dick Fitz
Dick Fitz's picture

I just sent that to a few of my friends, reader2010. Great quote.


Sun, 08/28/2011 - 23:43 | 1610814 chump666
chump666's picture

QE3 will be a flop.  China and EZ will forcefully plea that maniacal madman to go QE3light (very light) or operation twist ad infinitum.

IF Another wave of inflation comes from 'Chairsatan' (haha), you might as well lock in a war (major) next 6mths


Sun, 08/28/2011 - 23:47 | 1610821 JustPrintMoreDuh
JustPrintMoreDuh's picture

QE2 didn't work because it just wasn't big enough ... but this time will be different!


Bend over bitchez.

Mon, 08/29/2011 - 06:06 | 1611107 Bicycle Repairman
Bicycle Repairman's picture

Go big or go home!!

Sun, 08/28/2011 - 23:52 | 1610834 medicalstudent
medicalstudent's picture

bernanke's favorite word is 'credibly', his second favorite is 'threaten'.

Sun, 08/28/2011 - 23:52 | 1610836 I am Jobe
I am Jobe's picture

PhD should only be awarded to Engineers and not economists. We are seeing the stupidty and the waste of Education eppecially those from ivy league Schools.

Mon, 08/29/2011 - 07:49 | 1611158 Koffieshop
Koffieshop's picture

Yep. Economy is not a science, it's a game. A game of skill, strategy and psychology. Basically like just poker.

Maybe we should just have tournaments then to see who the best economists are.....

Sun, 08/28/2011 - 23:54 | 1610841 Sunshine n Lollipops
Sunshine n Lollipops's picture

Ya gotta admit, that chart's pretty funny. I think it shows that the Bernank has a sense of humor, albeit rather twisted. Kinda like messin with your dog by fake throwin the tennis ball. I bet Ben's laughin.

Sun, 08/28/2011 - 23:59 | 1610848 Caviar Emptor
Caviar Emptor's picture

There are major cracks now in evidence in the very foundations of the global economic system. It's big stuff we're facing now. Not just banks and stocks like in 2008. The problems have now exceeded the scope of the Fed to deal with them. There is no questions that the decsions and actions taken in the next few months will decide the fate of the next bunch of years. Hang on to yer seats and yer gold

Mon, 08/29/2011 - 00:14 | 1610874 DoChenRollingBearing
DoChenRollingBearing's picture

Well said as usual Caviar.  Train wreck dead ahead.

Mon, 08/29/2011 - 00:34 | 1610909 Caviar Emptor
Caviar Emptor's picture

Hey DoCHen...

Agree. My take on the Jackson Hole inaction is that current policies have reached an impasse. In a word, the risks of immediate QE exceeded the possible benefits. Of course to realize this the Fed had to first nearly destroy the global economy. After 3 decades of addiction to the Fed's every word, every action and non-stop addicition-feeding, WS and the financial system are going to be forced into detox. Ouch. But worse, the big decisions will now be political

Mon, 08/29/2011 - 01:35 | 1610991 Dick Fitz
Dick Fitz's picture

Caviar, why do you attack Ron Paul but believe the same things he does? I can't figure you out.

Mon, 08/29/2011 - 15:01 | 1612513 RockyRacoon
RockyRacoon's picture

It's one thing to deplore the status quo, yet another to take steps to fix it.

Mon, 08/29/2011 - 00:00 | 1610849 props2009
props2009's picture

US fixed Income analysis and charts

Mon, 08/29/2011 - 00:03 | 1610857 Setarcos
Setarcos's picture

In some far distant future world (Fuckyoushima permitting, or enabling?) a new species might have evolved, which does not have the temerity to call themselves "sapiens" before actually proving to have wisdom.

Flight of fancy:

They might still have access to Plato's writings and so will know that when Socrates got accused of being the wisest man in Athens; he was bemused and spent years questioning people who claimed to KNOW this and that and were confident in their 'wisdom'.  But, as he discovered, they all disagreed with each other on matters of religion, politics, morality, law and economics.

Socrates got forced to conclude that such wisdom as he had resided in his ignorance ... not being able to believe in anything that those around him espoused as certainties.

Nearly 2500 years later, nothing has changed.

The Ancient Greek empires collapsed, the Roman Empire collapsed, all empires have collapsed, or are collapsing.

Read all about it in Plato's "Republic", including why 'democracy' does not work.

He likened 'democracy' to boarding a ship and then voting for a captain on the basis of charisma and rhetoric, rather than any actual navigational skills.  Ring any warning bells? 

If you have the endurance needed to read the "Republic" more than once and absorb, then you will discover the truism that everything said and written, since Plato, is just a footnote.

Maybe some future species will understand that.

Meanwhile wars rage, in large part because the Chicago School of Economics claims to have 'wisdom' ... pah, no one does.






Mon, 08/29/2011 - 04:49 | 1611090 Escapeclaws
Escapeclaws's picture

I like the definition of democracy as two foxes and a chicken voting about what to have for dinner. Funny that you mention Plato, I was just thinking about him and Aristotle. I've come to the conclusion that if I were stuck on a desert island and had a choice between reading Plato or Aristotle, I would choose Aristotle. I used to be a big Plato fan, but his theory of forms, I think, should be taken literally, in which case it's pure bunk. Politically I think he represents the first apologist for elitism, believing, as he does that philosopher kings should rule. Funny how people criticize Marx because in practice communism turned out to be a disaster, yet people are completely willing to take Plato at face value. I think Plato is a very persuasive propagandist with his use of Socrates, his allegory of the cave, and his spelling Truth with a capital T. But nowadays, I think the world in general is fed up (pardon the pun) with elite rule.  I recall that back in the 80's, Plato was very popular among the arch conservatives hailing from the University of Chicago. One guy from there was an intellectual named Allan Bloom who had a great audience on Wall St and in the Ivy League business and law schools.

You can tell a lot about an author by who his/her audience is. Just consider Ayn Rand. Not saying you shouldn't also read the author, particularly someone as important as Plato. I've read the Republic a couple of times and many of his other dialogs. The irony is that Socrates was a real exemplar of "Question Authority", yet Plato himself was a staunch advocate, as in the Statesman, of authoritarian rule.

Mon, 08/29/2011 - 07:33 | 1611143 jimijon
jimijon's picture

I used to run a fairly large business in Chicago... had 30 employees, etc. And one common element I found about U of C graduates is that they are all hat and no cattle. They "believe" they are smart, but when it came to actually working, boy would they be fast to take a pass, bullshit, obfuscate, over analyze... basically anything but doing the work. 

Worst hirees and partners ever.

Mon, 08/29/2011 - 00:06 | 1610861 props2009
props2009's picture


Euro charts and analysis. EURO may not be the best short candidate out there according to this piece.

Mon, 08/29/2011 - 00:09 | 1610865 Caviar Emptor
Caviar Emptor's picture

I don't think, I know that the market and nearly everybody has not yet grasped the significance of the Jackson-Hole non-starter. This is a huge turning point. 

Mon, 08/29/2011 - 00:12 | 1610871 The Grifter
The Grifter's picture

I think the script is pretty well laid out going forward this fall.  The Bernank is looking for some political cover in the near term to get the pressure off his back to do something, but he won't wait too long until he unleashes QE3.

Like Jim Rogers said, the only think Bernanke knows how to do is to print.  He doesn't understand finance,  currencies, or economics, all he knows how to do is print money.   The Bernank spent his entire academic career studying a depression from 80 years ago that isn't particularly relevant at this point, never mind - he'll still go back to the only playbook he knows and follow the thesis.   To the academics, the only thing wrong with QE2 was is wasn't big enough, so expect QE3 to be even bigger.

Looking forward to upcoming events in September to see how this will play out - Obama about to unveal his jobs/stimulus package in hopes of getting re-elected.  Where is that money going to come from?  Read the Pritchard article from earlier today - Germany will tell the EU and ECB to get lost and then Bernank will have to backdoor save Europe again with some funny money to hold things together.   

The scenario looks a lot like 2010 to me again, but we haven't had a flash crash yet to trigger the event Bernanke needs to fire up the presses and get the ball rolling.  We came close - just not there yet.   






Mon, 08/29/2011 - 00:46 | 1610912 sasebo
sasebo's picture

The only purpose for banks & paper money is to mediate loans between savers & entrepreneurs to grow the real economy with interest rates set by the market to correctly allocate capital & labor.

With interest rates set at artificially low levels & paper money being used like poker chips by the banks & markets is it any wonder why the real economy isn't going anywhere?

We don't need no fucking federal reserve.   

Mon, 08/29/2011 - 01:00 | 1610945 FreedomGuy
FreedomGuy's picture

This is exactly the hazard that free market and Austrian economics warns of. In a centrally planned and manipulated economy all eyes are on the political decisions of the central bankers and the government. Earnings, P/E ratios, free cash flow, market shares, etc. are all paltry distant considerations. It even comes down to who the government will bail out, Lehman, no, Goldman, yes! You invest primarily on the actions of the planners who are at best mere mortals and at worst fools. Even gold is a political animal. It is the short sale of currencies and even central planning, in general.

Welcome to the centrally planned all powerful state. Invest accordingly.

Mon, 08/29/2011 - 01:41 | 1610998 Dick Fitz
Dick Fitz's picture


Until freedom in money, property and contract is restored, and aggression and unfettered action by government dramatically curtailed, the world will continue to slide towards chaos.

Mon, 08/29/2011 - 15:05 | 1612534 RockyRacoon
RockyRacoon's picture

I wish that big-assed black swan would swoop down.  This shit is wearing me out.   The fat lady has been tuning up way too long.   Get yer fat ass on stage already.

Mon, 08/29/2011 - 05:11 | 1611095 Escapeclaws
Escapeclaws's picture

A good person to read on Bernankes lack of understanding of the depression, and therefore of our current depression, is Steven Keene. He wrote a paper on that topic specifically. See

Mon, 08/29/2011 - 00:25 | 1610890 Milton Waddams
Milton Waddams's picture

There is a strong possibility that the author of the linked article has absolutely no understanding of 'moral hazard' (not that i read the piece- the chart said it all.).


Mon, 08/29/2011 - 00:32 | 1610902 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

a deal has been done...the TBTF always's axiomatic

Mon, 08/29/2011 - 00:32 | 1610905 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

Lehman's must be SO fucked off...why them?

Mon, 08/29/2011 - 01:13 | 1610959 banksterhater
banksterhater's picture

now the scumbags are rigging it for end of month, behead them all, publically.

Mon, 08/29/2011 - 01:58 | 1611007 silvereagle1
silvereagle1's picture

Hang on guys here we goooooooooo

ONE WORLD ORDER IS THE ORDER dejour, excuse me if I have misspelt that for our french speaking readers.

If the investment / trading world has reached a point where  it awaits the breath of 1yep just ONE individual to exhale from his mouth his plans for the good of the WORLD and of course taking his ORDERs  from Walll st, then we have a HUGE problem.

This individual whats his nickname? Chairsatan, hmmmm wonder whey he has that plastered against his reputation.

I had a read of Rev 13: some time ago about giving breath to the image of he Beast and discounted it, but you know I think John the Revelator had some Revelations to talk about. Something to consider! The things that make you hmmmmm.. . . . . .



Mon, 08/29/2011 - 08:33 | 1611229 gwar5
gwar5's picture

The stock market gains have become another government subsidy, to be doled out.  Equities welfare, Bitches!  Traders are waiting for their stock market extensions handed out by the Fed the same way people line up for food stamps.



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