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Guest Post: Another Empty Obama Promise

Tyler Durden's picture


Submitted by Azizonomics

Another Empty Obama Promise

The extent of Obama’s duplicity continues to grow apace. And yes — it’s duplicity. If you can’t or won’t fulfil a promise, don’t make it.

From Bloomberg:

Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail,” the nation’s largest banks are bigger than they were before the credit crisis.


Five banks — JPMorgan Chase & Co. (JPM), Bank of America Corp., Citigroup Inc., Wells Fargo & Co., and Goldman Sachs Group Inc. — held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to the Federal Reserve.


Five years earlier, before the financial crisis, the largest banks’ assets amounted to 43 percent of U.S. output. The Big Five today are about twice as large as they were a decade ago relative to the economy, sparking concern that trouble at a major bank would rock the financial system and force the government to step in as it did during the 2008 crunch.


“Market participants believe that nothing has changed, that too-big-to-fail is fully intact,” said Gary Stern, former president of the Federal Reserve Bank of Minneapolis.

And the hilarious (or perhaps soul-destroying) thing?

The size of the banks isn’t even the major issue. AIG didn’t have to be bailed out because of its size; AIG was bailed out because of its interconnectivity. If AIG went down, it would have taken down assets on balance sheets of a great deal more firms, thus perhaps triggering even more failures. So the issue is not size, but systemic interconnectivity.

And yes — that too is rising, measured in terms of gross OTC derivatives exposure, as well as the size of the shadow banking system (i.e. pseudo-money created not by lending but by securitisation) — which sits, slumbering, a $35 trillion wall of inflationary liquidity ready to crash down on the global dollar economy.

On the other hand, Keynesians — and Obama (in spite of his supporters’ best protestations) is certainly one — are insistent that the easiest and best way to reduce systemic indebtedness is by unleashing additional inflation, and thus reducing the real value of debt.

From Paul Krugman:

To be sure, more aggressive Fed policies to fight unemployment might lead to inflation above that 2 percent target. But remember that dual mandate: If the Fed refuses to take even the slightest risk on the inflation front, despite a disastrous performance on the employment front, it’s violating its own charter. And, beyond that, would a rise in inflation to 3 percent or even 4 percent be a terrible thing? On the contrary, it would almost surely help the economy.

Such simplistic reasoning. Given the sizeable deflationary impact we know that deleveraging in the shadow banking system can have — even in spite of a tripling of the monetary base — we should surely understand by now that the global financial system no longer works by the old rules.   We are living in the fat tail of history. 

As I wrote in January:

Simply, the Fed’s huge expansion of the monetary base has still failed to prevent the contraction of this strange and exotic part of the “money” supply. It has failed to prevent the sector from deflating and sucking down the wider economy.


In the years preceding 2008 the definition of “money” became extremely loose. When securities made up of sub-prime mortgages which are in arrears comes to pass for “money” — and came to stand on balance sheets as debt — it should have been painfully obvious that modern finance had mutated into an uncontrollable monster, and that no amount of quantitative easing could prevent prevent the inevitable credit contraction from blown-up asset prices tanking.


The shadow banking sector was never “too big to fail”; it was too monstrous to succeed.

Working toward a “mild” inflationary uptick would certainly debase the real value of debt, but there is a clusterflock of black swans circling above that road, not least the impact on U.S. relations with creditor nations who also happen to produce a huge portion of the goods we consume. What would we do if the Chinese central planners decided to slash exports to America (e.g. by imposing heavy tariffs) and instead recycle their $3 trillion dollar hoard on domestic consumption (after all, they hardly need any more of our dollars)? America would be faced with a painful transition.

Today it struck me that Franklin D. Roosevelt’s famous aphorism that “all we have to fear is fear itself” — at least applied to the present situation — is possibly one of the most dangerous and foolish ideas in history. We have plenty of things to fear; real and present dangers to our civilisation.

Living with a fundamentally broken, fundamentally monstrous economic and financial paradigm is a recipe for future disasters. Here is something for Obama and Bernanke to think about:

One should never stand in a place of danger and say that a miracle will be wrought for them, lest it is not. And if a miracle is wrought for them, it is deducted from their merits.


Shabbat 32a


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Mon, 04/16/2012 - 11:11 | 2348569 battle axe
battle axe's picture

Hope  and  Change!! Catch the spirit!! sarc

Mon, 04/16/2012 - 11:18 | 2348584 nope-1004
nope-1004's picture

Yup, Change you can bereave in!

The only requisite for becoming Commander in Chief is to be full of shit.  The 2 party system is the headfake to making you think you are choosing, when really both are corrupt.


Mon, 04/16/2012 - 11:17 | 2348599 LowProfile
LowProfile's picture


as well as the size of the shadow banking system (i.e. pseudo-money created not by lending but by securitisation) — which sits, slumbering, a $35 trillion wall of inflationary liquidity ready to crash down on the global dollar economy.

Someone correct me if I'm wrong, but if those derivatives implode, isn't that DE-flationary?

The reaction if it does implode will be for the CBs to inflate, but still.  Deflation->Inflation->Currency Crisis-Hyperinflation, right?

Mon, 04/16/2012 - 11:26 | 2348625 pods
pods's picture

That is always how I have viewed it.  The cause is deflation (credit collapse) and the solution is hyper inflation.

Those 35 trillion of derivatives are never going to be paid out.  And they are someone's asset.

Is this wrong?

Oh, and you have to add one more step to your flowchart:  >zombie apocalypse.


Mon, 04/16/2012 - 11:30 | 2348646 Buckaroo Banzai
Buckaroo Banzai's picture

Phony paper assets will be made whole with printed cash. That is the whole reason the Federal Reserve was invented! It has no reason to exist except to inflate the currency as necessary.

I believe the term they used in 1913 was "elastic currency".

Mon, 04/16/2012 - 11:45 | 2348709 LowProfile
LowProfile's picture

That's how I see it.

Question is, how much are they going to have to make good on?

I have a feeling $35T is just a START...

Mon, 04/16/2012 - 12:22 | 2348825 Richard Chesler
Richard Chesler's picture

Mickey-Mouse promise from a Mickey-Mouse POTUS with a Mickey-Mouse birth certificate.

Yes we can't!


Mon, 04/16/2012 - 12:30 | 2348843 LowProfile
LowProfile's picture

Thank you for that scintillating and completely fucking unrelated and pointless response, Richard.


The question I asked was how much debt out there is going to HAVE to be covered by freshly printed cash?

Some debt will doubtless be given a haircut (those TPTB figure they can screw), but a lot of it (most?) will be made whole via the CBs.

Any takers on that guess?

Mon, 04/16/2012 - 13:02 | 2348930 iDealMeat
iDealMeat's picture

The derivatives market is in the Quadrillions (some guess).. Those assets are someones debt.. real, synthetic, and reHypothecated.. But no one knows.. Then you have shadow banking. Elimination of mark to market.. Literally every single number out there that should be used as a gauge for risk or budget is exaggerated or falsified with fuzzy math..

No one knows...  Its all total bullshit..

I just stopped caring and saved myself the stress and lost life points..


Mon, 04/16/2012 - 13:19 | 2348979 TuesdayBen
TuesdayBen's picture

Was Obama dealt a tough hand? Yes.

Has Obama played that hand well?  No.

He has screwed the pooch raw for 3 years.

Mon, 04/16/2012 - 22:13 | 2350355 StychoKiller
StychoKiller's picture

During the crisis in Oct. 2008, he could have just dropped out of the race and said:  "It's ALL yours, Hillary!"

Mon, 04/16/2012 - 11:49 | 2348720 Darth..Putter
Darth..Putter's picture

A confidence game, or "Con Game" only fails when the confidence is gone.  The idea of getting something out of the digital world of accounts is what's keeping people putting the results of their labors into those accounts. 


Don't follow the money.  Follow the Gold!!

Mon, 04/16/2012 - 12:02 | 2348768 eddiebe
eddiebe's picture

'Phony paper assets will be made whole with printed cash. That is the whole reason the Federal Reserve was invented! It has no reason to exist except to inflate the currency as necessary.'

Actually it was created to make the banksters richer; as in wealth transfer.

Mon, 04/16/2012 - 12:07 | 2348776 Hippocratic Oaf
Hippocratic Oaf's picture


Mon, 04/16/2012 - 12:51 | 2348895 battle axe
battle axe's picture

And how much do you want to bet that Citi and Bank of America are on the bad side of that trade? Any takers? I will give you 100-1 odds. 

Mon, 04/16/2012 - 19:36 | 2350081 Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture



Those 35 trillion of derivatives are never going to be paid out.  And they are someone's asset.

Is this wrong?

Not exactly.

Suppose you have a 250K fire insurance policy on your house, is that an asset?  Yes in the sense that it's worth something, but you wouldn't say holding such a policy increases your net worth by 250k.

Or suppose you bought 10 AAPL puts at $600 strike price.  That would be a derivative with a face value of 600K, but it would only be worth the full face value if AAPL goes all the way to 0 before it expires.

Mon, 04/16/2012 - 11:33 | 2348666 tarsubil
tarsubil's picture

Yes, but what if 2008 was the deflationary event with housing and now is the time of printing and inflation? Or maybe it goes through several cycles of deflation and inflation as wings of the credit house collapse and are monetized until the perception management and monopoly of force of the government is eroded to the point a currency crisis occurs?

Mon, 04/16/2012 - 11:58 | 2348759 pods
pods's picture

That is how I see it.  The end game is currency crisis.  We probably have several waves of gyratory deflation-inflation before things get out of hand.  The oscillations will become more pronounced until it finally lets go.


Mon, 04/16/2012 - 12:16 | 2348794 Don Keot
Don Keot's picture

This is what I have feared the most, a deinflationary enviornment.

Mon, 04/16/2012 - 12:35 | 2348845 francis_sawyer
francis_sawyer's picture

IMO... If you know what you're looking 4, you'll know the deflationary environment when you see it...

In 2008, Crude & PM's took a precipitous fall, but paper gold & silver bottomed long before the S&P (PM's in November 2008, S&P in March 2009)...

Since... & despite many attempts to crash the PM markets by margin hikes & naked shorting, there still remains a constant bid for PM's (because it is well known now that if paper gold or especially silver prices drop too far, physical inventory is gobbled up quickly)...

This game can only be played for so long (& I believe it is only still possible because general economic hardship is forcing physical onto the market on the margin [weak hands to strong hands])... Everytime I go into a coin shop, the ratios of 'sellers' (desperate for cash) to buyers of gold & silver is about 5-1... This, too, will only last so long (until there is no more of grandma's silver to sell)...

Thus, the 'deflationary environment' has already passed... Hyperinflation cometh... The only thing is, it might not end up being 'called' a hyperinflationary event... IOW... It's not going to be like it takes a wheelbarrow full of dollars to buy a loaf of bread... Instead, they'll probably invent some clever way to 'market' the dollar collapse by creating some sort of other monetary unit... Within 6 months after its implementation, all the things you used to buy for 'x' units of currency, now cost 5x units of the new currency... It's still hyperinflation, but it isn't marketed that way...

Stock up on things you NEED (while they are still relatively cheap) while you can...

Mon, 04/16/2012 - 15:46 | 2349497 House of Ronin
House of Ronin's picture


How did they get to that 56% of the u.s. economy. The way the article phrases that number is a bit awkward and leads the quick reader to believe that banks control that amount. Upon closer look, I believe the author is stating that is –equal--- or ‘equivalent to’ which is drastically different. I think a blend between increased reserve requirements, cheap Fed money, and a more hostile economy leads to larger banks which is the FED not Berry.


Mon, 04/16/2012 - 11:22 | 2348612 Problem Is
Problem Is's picture

The Change is in your pocket...

Mon, 04/16/2012 - 11:46 | 2348713 Lord Blankcheck
Lord Blankcheck's picture

the "chains" will be on your arms and legs

Mon, 04/16/2012 - 12:05 | 2348769 RafterManFMJ
RafterManFMJ's picture

The only requisite for becoming Commander in Chief is to be full of shit.



And be a CIA/Globalist/NWO stooge.  And you gotta be tall. And read reasonably well.  I'm thinking about 2 election cycles out they'll have to find a half-black Eurasian Jewish woman with a cojoined twin who is a White Hispanic(TM) Marxist gay.

It's no wonder all the circuses died; all you have to do is go outside and see as many clowns and freakshows as you can stomache.  Reality TV? Just watching the antics oozing from DC is enough reality for me.

Mon, 04/16/2012 - 12:17 | 2348805 Debeachesand Je...
Debeachesand Jerseyshores's picture

"Change you can breave in!".

That just about sums up the Obama Administration in a nut shell.

Mon, 04/16/2012 - 23:00 | 2350413 Pitchman
Pitchman's picture

The power to invade countries, indefinite imprisonment American of citizens and the claimed right to assassinate Americans, right here in the good old USA.  Are these offenses and the Abdication of His Sworn Oath to Defend the Constitution from enemies both foreign and domestic grounds for Impeachment?

Are President Obama's Offenses Grounds For Impeachment?


Also: President Obama; BRICked Over U.S. Monetary Policy

Mon, 04/16/2012 - 14:11 | 2349138 krispkritter
krispkritter's picture


Mon, 04/16/2012 - 11:14 | 2348578 rosiescenario
rosiescenario's picture

"Another empty Obama promise, but I repeat myself..."

Mon, 04/16/2012 - 11:34 | 2348664 Buckaroo Banzai
Buckaroo Banzai's picture

Calling Obama a lying sack of shit is an insult to lying sacks of shit everywhere.

Tue, 04/17/2012 - 00:15 | 2350531 Pitchman
Pitchman's picture

Buckaroo; You are far to kind!

To admire the gift of oratory without regard to the moral quality behind the gift is to do wrong to the republic. - Theodore Roosevelt, from: “Citizenship in a Republic”

My contempt lies with Brand Obama (see: Word of the Day: TREACHEROUS - See: "LIFTING THE VEIL ) .  The package that attracted loyal followers is devoid of substance and was so from the start.  Promises made and supporters were tossed aside to serve the king makers at the expense of the people.  Sans a soul the President has no heart.  Self interest and reputation among the leading cabal is valued above the well being of the people and honor which comes from a higher power.  - MR. PRESIDENT: LEAD OR BE REMOVED FROM OFFICE


Mon, 04/16/2012 - 11:15 | 2348581 bugs_
bugs_'s picture


Mon, 04/16/2012 - 11:15 | 2348582 mayhem_korner
mayhem_korner's picture

So the issue is not size, but systemic interconnectivity.


Dominoes, muppets.

Correlation is the catalyst to revealing the fractal nature of risk. 

Mon, 04/16/2012 - 11:14 | 2348586 Papasmurf
Papasmurf's picture


Mon, 04/16/2012 - 11:16 | 2348588 taniquetil
taniquetil's picture

"That's why today, I'm pledging to CUT the deficit we inherited by half by the end of my first term in office."


Barack Obama, Feb 2009


But hey, let's give the guy a break. He only missed by a few hundreds billion dollars per year.

Mon, 04/16/2012 - 11:33 | 2348660 Buckaroo Banzai
Buckaroo Banzai's picture

He only missed by a few trillion dollars per year.

Fixed it for ya.

Mon, 04/16/2012 - 11:39 | 2348690 jayman21
jayman21's picture

"That's why today, I'm pledging to CUT the deficit we inherited by half by the end of my first term in office."


Barack Obama, Feb 2009

Further proof that we have two parties that offer more of the same, otherwise, we would see him called out on this.

Mon, 04/16/2012 - 13:07 | 2348948 johansen
johansen's picture

What he actually said was divide the deficit, the government journalists didn't know what that meant so they corrected it to cut.

Mon, 04/16/2012 - 11:17 | 2348590 beaker
beaker's picture

you'd think the Republican Party would point this out to highlight Obummer's profound lack of understanding of today's markets.  ....but frankly, I don't think anyone in DC understands the sea of shit we are in.

Mon, 04/16/2012 - 11:20 | 2348603 LFMayor
LFMayor's picture

Two wings, same shit bird.

Mon, 04/16/2012 - 11:31 | 2348639 Problem Is
Problem Is's picture

"Birds of a shitfeather flock together."
J. Lahey

Mon, 04/16/2012 - 12:33 | 2348854 gjp
gjp's picture

Nice avian anaology, and a complement to the poster's "clusterflock of black swans", which is great.

Mon, 04/16/2012 - 11:52 | 2348733 Vince Clortho
Vince Clortho's picture

They don't understand jack and they don't want to.  

They do what they are told by the bank cartel, and they get nice compensation and benefits for doing exactly that.

Mon, 04/16/2012 - 19:45 | 2350101 Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture

If they actually understood what they were doing that would make them culpable.  Much better to be ignorant than malicious.

Mon, 04/16/2012 - 12:09 | 2348783 WonderDawg
WonderDawg's picture

Or, possibly, there are some who do understand, and either: 1. They're busy preparing their own plan for the post collapse, or 2. They've been instructed to keep their fucking mouths shut or else, or 3. Some combination of 1 and 2.

Mon, 04/16/2012 - 22:34 | 2350384 nmewn
nmewn's picture

Number one know me, I never listen to anyone else ;-)

Mon, 04/16/2012 - 11:15 | 2348591 rosiescenario
rosiescenario's picture

We need a pie chart showing just who owns what % of Obama. We know Monsanto owns a goodly chunk, ditto GS, etc.


Maybe WB could provide this much needed visual data???????

Mon, 04/16/2012 - 11:36 | 2348681 Jena
Jena's picture

And another pie chart to show who owns what % of Holder.

Mon, 04/16/2012 - 11:53 | 2348737 Problem Is
Problem Is's picture

Eric "Empty Suit" Holder?????

Wait, has that moron shown up for his first day of work yet?

Some one tell that idiot his office is at 950 Pennsylvania Avenue Washington DC..

Mon, 04/16/2012 - 11:17 | 2348593 mayhem_korner
mayhem_korner's picture



That Paul Krugman is employed and paid for his opinions is proof positive that the IQ distribution is left-skewed.

Mon, 04/16/2012 - 13:26 | 2349002 mikesswimn
mikesswimn's picture

HA!! +1

Mon, 04/16/2012 - 11:18 | 2348596 trembo slice
trembo slice's picture

Almost everything FDR did was dangerous and foolish.

Mon, 04/16/2012 - 11:17 | 2348602 Shizzmoney
Shizzmoney's picture

What would we do if the Chinese central planners decided to slash exports to America?

I'd laugh my ass off?

Mon, 04/16/2012 - 11:22 | 2348616 LFMayor
LFMayor's picture

I'd get ready to daddy warbucks weapons and ammo to the New Improved Warring States and make a fucking mint. 

The Chinese have to, have to keep those people busy making rubber dog shit, or else they'll get hungry and bored and invent all sorts of new fun shit that is funny.  Like lynching the local party elite and looting their digs.

Mon, 04/16/2012 - 11:40 | 2348698 jayman21
jayman21's picture

If they do not have oil, this war thing might get confusing.

Mon, 04/16/2012 - 22:19 | 2350365 StychoKiller
StychoKiller's picture

Oh well, back to Triremes!

Mon, 04/16/2012 - 11:19 | 2348606 mendigo
mendigo's picture

But he did find time to lecture the oas on the importance of democracy and rule of law. How does he keep a sraight face? He is the master bull-shitter of our time.

Mon, 04/16/2012 - 11:21 | 2348607 Dr. Engali
Dr. Engali's picture


"all we have to fear is fear itself"

All we have to fear is an ever encroaching monsterous police state.


There fixed it for you.

Mon, 04/16/2012 - 11:24 | 2348617 SheepDog-One
SheepDog-One's picture

All we have to fear is those who say we have nothing to fear.

Mon, 04/16/2012 - 11:20 | 2348610 Element
Element's picture

Anyone got a spare grassy knole?

Mon, 04/16/2012 - 11:24 | 2348622 LFMayor
LFMayor's picture

Too Soon.  

But keep dangling that bait out there, you're bound to get a bite from one of those menacing, threat to our way of life Hutaree militia types.

Mon, 04/16/2012 - 12:33 | 2348858 takinthehighway
takinthehighway's picture

Oh yes, let's make him a martyr...

Can't you see what that would produce? Martial law; race riots; suspension of habeas corpus; President Joe Biden...

As much as I may dislike the policies of President Bush III...excuse me, Obama...I'm all for having him remain where he is to bring about the necessary collapse and reset of America.

Mon, 04/16/2012 - 12:53 | 2348898 krispkritter
krispkritter's picture

Someone here once referred to Biden as 'assasination insurance'. Laughed my ass off until I thought about it, then I wanted to cry. Just wondering if TPTB have thought through the scenario that your list would provide them? It would bring an abrupt end to the US as we know it and give them the control that they seek...

Mon, 04/16/2012 - 11:23 | 2348619 Village Smithy
Village Smithy's picture

The fact that his secret service agents would, pardon the pun, fuck around on him this past week is telling. There is no respect, and no loyalty there. I am of the opinion that respect is given to a certain point and earned the rest of the way. Someone is coming up short here.

Mon, 04/16/2012 - 11:28 | 2348634 LFMayor
LFMayor's picture

i agree with you fully.  The fun part would be trying to 'splain this to him, or any of the faux bourgesouie like him.  Entitled and sheltered their whole life, they just couldn't grok it.

The tyranny of lowered expectations.  that shall be their undoing.

Mon, 04/16/2012 - 11:30 | 2348644 Dr. Engali
Dr. Engali's picture

I was thinking the same thing. One by one we are seeing the rot and decay within  every institution this country has to offer.

Mon, 04/16/2012 - 11:47 | 2348717 Vince Clortho
Vince Clortho's picture

Green shoots?

Mon, 04/16/2012 - 12:34 | 2348862 takinthehighway
takinthehighway's picture

More like gangrene shoots...

Mon, 04/16/2012 - 12:54 | 2348899 ThisIsBob
ThisIsBob's picture

Anybody back checking the detail that went on spring break to Mexico?

Mon, 04/16/2012 - 22:19 | 2350369 StychoKiller
StychoKiller's picture

Moral Hazard getting more and more immoral (What's to stop it?)

Mon, 04/16/2012 - 11:25 | 2348623 Sandmann
Sandmann's picture

Rarely in human history have Institutions which have brought themselves to the brink of insolvency been permitted to take over rivals and increase concentration in the very areas that brought them to the brink of ruin. The way Geithner FORCED banks to merge is typical of a Centrally-Planned economy and is exactly the type of Machtergreifung undertaken by Adolf Hitler after the Reichstag Fire.

The American Public should be ashamed to have been suckered in this way

Mon, 04/16/2012 - 11:31 | 2348653 tradebot
tradebot's picture

The American public is yet still asleep...they simply want to be left alone to work, raise kids, make the car payments and the house note.  It has become painfully clear to me, they simply will not wake up until that is something they find impossible to do.

Mon, 04/16/2012 - 11:27 | 2348630 writingsonthewall
writingsonthewall's picture

Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail

...and you believed THAT?


I say more fool you then - I bet you believe George when he said he would win the war on terror too? 


Democracy 101 - politicians will tell you ANYTHING to get you to vote for them Hence the flawed system.


Better find a new system quick - this one if finished.

Mon, 04/16/2012 - 11:48 | 2348716 spiral_eyes
spiral_eyes's picture

I don't believe anything politicians say unless (like Ron Paul) they have a record of delivering, but I think it's only fair to point out where Obama has been deluded/deceptive/misleading/bullshitty.

Mon, 04/16/2012 - 11:28 | 2348635 eddiebe
eddiebe's picture

Hope? Nope!

Mon, 04/16/2012 - 11:31 | 2348637 Element
Element's picture



What would we do if the Chinese central planners decided to slash exports to America (e.g. by imposing heavy tariffs) and instead recycle their $3 trillion dollar hoard on domestic consumption (after all, they hardly need any more of our dollars)?



Do they make anything you actually need? ... we'll sell you the rare earths.

Mon, 04/16/2012 - 11:33 | 2348668 cymro33
cymro33's picture

-ASk Walmart.

Mon, 04/16/2012 - 11:49 | 2348704 spiral_eyes
spiral_eyes's picture


Most American "manufacturing" – including military hardware (see the hacked drone over Iran) is actually just the assembly of Chinese components. 

American companies can switch over to other supply chains but it'd be quite a difficult road, and there are a few things that China does absolutely have a monopoly in.

Mon, 04/16/2012 - 12:15 | 2348788 Element
Element's picture

I still think that if tarrifs go on, you get new suppliers or you go without, and I suspect you could all manage to go without.


And you will too.

Mon, 04/16/2012 - 12:33 | 2348852 spiral_eyes
spiral_eyes's picture

Supply and demand doesn't really work like that.

The reality of this is that scarcer goods means more inflation. If we're looking for an inflationary spark, there isn't a better one than the restricted availability of goods.

Tue, 04/17/2012 - 00:26 | 2350555 Pitchman
Pitchman's picture

@ Spi eye

Trade wars are always fun.  They lead to other types of war and boy we just can't get enough of that.

Mon, 04/16/2012 - 11:29 | 2348642 Normalcy Bias
Normalcy Bias's picture

I was blown away in 2008 when so many people fell for this glorified street hustler. P.T. Barnum had it right...

Mon, 04/16/2012 - 11:31 | 2348654 No One
No One's picture

Wouldnt have been any different if McCain was in the White House. (R) or (D) means nothing. 


Let's just call it what it is.. this is now a country of the banks, by the banks and for the banks that will soon perish from this Earth. 

Mon, 04/16/2012 - 11:51 | 2348724 Spastica Rex
Spastica Rex's picture

I agree with everything but the very last part. Wish it were true.

Mon, 04/16/2012 - 11:51 | 2348727 Dr. Engali
Dr. Engali's picture

The sooner people wake up to that fact and stop allowing themselves to be pigeonholed into one of two colors the better off we are.

Mon, 04/16/2012 - 11:54 | 2348735 Lord Blankcheck
Lord Blankcheck's picture


Mon, 04/16/2012 - 11:31 | 2348657 midgetrannyporn
midgetrannyporn's picture

usa presidents are all empty suits.

Mon, 04/16/2012 - 11:34 | 2348673 Sleepless Knight
Sleepless Knight's picture

I cant believe I was conned into voting for this idiot. Never again for either F'ed up party unless its Ron Paul. If its not Ron Paul on the ballot, then I am writting him in.

Mon, 04/16/2012 - 11:39 | 2348686 writingsonthewall
writingsonthewall's picture

Never again for either F'ed up party unless its Ron Paul

So flushed with your success of being conned before - you still need to pin your 'hope' on someone else?

You're destined for disappointment - Ron Paul is just a Republican who has old world ideas of value.

He's still a republican and therefore would still allow the disparity of wealth continue to worsen breaching the brittle fabric of American society (i.e. that dream everyone believes in)

Mon, 04/16/2012 - 11:47 | 2348712 Sleepless Knight
Sleepless Knight's picture

I believe old world ideas are a step in the right direction. No one else has offered up anything more - What you you suggest?

Mon, 04/16/2012 - 11:40 | 2348694 boogerbently
boogerbently's picture

Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law.” Romans 13:8 NIV

Mon, 04/16/2012 - 14:53 | 2349281 therearetoomany...
therearetoomanyidiots's picture

So, YOU'RE to blame!  



Mon, 04/16/2012 - 11:34 | 2348674 writingsonthewall
writingsonthewall's picture

What this article shows is the inevitibility of it all - it wouldn't have mattered who got elected - the results would have been the same.


The red v blue league just use it as a weapon to bash each other with - but truthfully BOTH parties were heavily involved in the making of the crisis.


Why is the question "what should Obama have done" - when really the question should be "why do these highly paid bankers continue to act without any responsibility at all - even though we know they know better (after last time) and they are perfectly aware of the consequences.

Ultimately this is the end game of Milton friedman's 'experiment' - as everyone follows self interest.


The banks just want to make money (they don't care what it's worth)

The Government /parties just wants to get re-elected (they don't care if they can deliver or not)

The people just want salvation, jobs and prosperity (they don't want to hear the part they need to play - they 'employed' someone else to do that)


With all these parties following self interest to the exclusion of all other parties interests - it's going to end in one rather large fight as these aims are contradictory and unworkable in the current environment.

Mon, 04/16/2012 - 11:44 | 2348697 Problem Is
Problem Is's picture

Bullshit Barry and The Bernank
Useful idiots. Frontboys for the real rulers... the finance oligarchy.

Obama Bin Lyin' reads what ever is loaded into the Teleprompter for him and follows orders. The only decision this clown makes is which Cheeseburger joint for lunch...

The Bernank does exactly what his bosses and owners... the shareholders of the FRBNY... tell him to do.

MF Global as Dry Run for TARP II
This thing is going exactly the way the financial elite want it to go. Or it wouldn't be this way. Besides MF Global showed us customer accounts will be seized by derivative counter parties.

Why do you think The Bernank allowed BofA to put Merrill's $53 trillion in derivatives on the deposit bank? Same for JPM same for Shitibank, etc...

Jamie & Lloyd et al will seize $1 trillion in FDIC customer insured deposits from BofA customers... Congress will have to vote to replace the looted money... but they won't call it a Back door Wall Street bailout... Neatly done...

Win-Win for Congressional douche bags and Wall Street criminals...

BTW: +5 Tyler... Nice summation of reality...

Mon, 04/16/2012 - 11:46 | 2348711 nah
nah's picture

inflations gotta be running 20% a year on commodities...


give it time

Mon, 04/16/2012 - 11:58 | 2348752 Problem Is
Problem Is's picture

Cost of Goods Sold was up 12% year over year for US retailers...

That is a little more accurate than the B(L)S CPI 2%, there Cue-Bald Bennie The Bernank...

Mon, 04/16/2012 - 11:55 | 2348743 lakecity55
lakecity55's picture

What a homo.

Maybe he's got AIDS.

Mon, 04/16/2012 - 11:59 | 2348760 sexcellent
sexcellent's picture

hope & change bitchez!

Mon, 04/16/2012 - 12:01 | 2348765 Dixie Rect
Dixie Rect's picture


When is MajorDoucheBag going to post one of his comedic monologs telling us how great Obunghole is doing?

Mon, 04/16/2012 - 12:00 | 2348766 tahoebumsmith
tahoebumsmith's picture


Another day, another hypocritical quote from Barack Obama.  Today we head back to March of 2006 where the young, inexperienced Senator was trying to score political points against then-President Bush.

Here is part of Congress's transcript from March 16, 2006:

Obama- Mr. President, I rise today to talk about America's debt problem.

The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. Government can't pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is "trillion'' with a "T.'' That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President's budget will increase the debt by almost another $3.5 trillion...

Increasing America's debt weakens us domestically and internationally. Leadership means that "the buck stops here.'' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

I therefore intend to oppose the effort to increase America's debt limit.

And here is the speech from the other one that speaks out of both sides of his mouth...

Change you can believe in?


Mon, 04/16/2012 - 12:03 | 2348767 tony bonn
tony bonn's picture

babycakes, i gots news for youse - obama been lyin about his birf place for the what makes youns all surprised that he lied about his fake promises?

Mon, 04/16/2012 - 12:07 | 2348777 vegas
vegas's picture

Imagine that, another broken promise from Chalky; who could have guessed? History will judge him as one of the absolute worst presidents Amerika fell for elected Prez. What a joke.

Mon, 04/16/2012 - 12:08 | 2348786 azzhatter
azzhatter's picture

Are you trying to say Obama lied? Man, I hate when that happens

Mon, 04/16/2012 - 12:32 | 2348853 Appleseed
Appleseed's picture

Thank you krugman,

sincerely a gold bug, a happy one at that

Mon, 04/16/2012 - 12:43 | 2348882 ThisIsBob
ThisIsBob's picture

No reason to fear Barry when you got Ben on your side.

Mon, 04/16/2012 - 13:02 | 2348932 dirtbagger
dirtbagger's picture

It has been a constant irritant to see the Tea Bagger, Eric Cantor and Fox New crowd attack Obama as a Marxist, socialist, muslim, Kenyan, etc etc, when there has been so many policy areas in which to legitamately criticize the President. 

The NUMBER ONE Obama criticism should be his policies toward financial institutions.  The renomination of Ben, ZIRP, GS appointees, and continuation of the TBTF of the previous administration represent a deeply flawed policy that negatively affects nearly every US citizen.  How about the SEC and DOJ failure to prosecute financial crimes?  These issues should be front page news every day, regardless of one's political affiliations.   Dylan Ratigan is the only one in the media who constantly makes this part of his program.   They can go on for hours about a birth certificate, by why do you not hear CNN amd Fox news rant about TBTF issues?  By the same token why is the DOJ's inaction not attacked by Pelosi or Reid? 

The ad hominem attacks on Obama divert us from the real discusions that should be taken place about social and economic policies.   It seems like NOBODY wants these topics as front page news

Mon, 04/16/2012 - 13:47 | 2349075 azzhatter
azzhatter's picture

ZIRP alone is enough

Mon, 04/16/2012 - 15:38 | 2349451 Kobe Beef
Kobe Beef's picture

"why do you not hear CNN amd Fox news rant about TBTF issues?"

Probably because the people who own the banks also own the MSM, and are not interested in publicizing the magnitude of their crimes.

Mon, 04/16/2012 - 13:04 | 2348942 Lost Wages
Lost Wages's picture

The banks are bigger. The war is bigger. Whistleblower punishments are bigger. Why don't we just refer to Obama as "President Black Bush." Bama and Dubya are both barely smart enough to read a speech and half-retarded. But if you want to play basketball or get high, they could come in handy. Don't get me wrong. I like to get high, but Presidents are a buzzkill. Seth Macfarlane likes to portray Bill Clinton as a pot-smoking cankle-fucking dimwit who presided over the greatest economic expansion in history, but that asshole did everything he could to throw the American worker under the bus. His actions have greatly harmed the people of Haiti as well. The uppity, sycophantic "experts" who surround these morons could say anything and they would believe it. Why you keep electing people to rule you is beyond me. Those who want to rule are the least among us: the least moral, the least intelligent, the least human. They should all be removed from power and no group should ever be allowed to organize and rule us again.

Mon, 04/16/2012 - 13:16 | 2348973 sschu
sschu's picture

This article is a waste of time.  Anyone who actually thought this empty suit was really going to do anything is a fool.  His biggest accomplishment, ObamaCare, is a complete mess, no one knows what it will do, how much it will cost or even if it is constitutional. 

We are getting what we asked for, he makes/made some people feel good about ourselves.  The disaster many predicted is upon us; soon we will all pay the piper.  The opportunity for him and the country was lost in early 2009 when he could have taken a very different path and insured a generation of Democratic majority.  


Mon, 04/16/2012 - 13:34 | 2349033 j0nx
j0nx's picture

Agreed. I remember in late summer 2008 I got in a conversation with a really nice, seemingly well spoken and educated young black family about Obama and they were all excited about how he was going to be so different for the country and change things for the better. I, on the other hand told them not to hold their breath that he would be no different than any other shitbird politician. Looks like I was right. Not only right as it turns out, way right since he is actually probably the worst President and the most corrupt administration in the history of this country. And that's saying a shit ton coming off the heels of GW.

Mon, 04/16/2012 - 13:46 | 2349073 James
James's picture


This link will explain what Ocare will do.

Mon, 04/16/2012 - 13:25 | 2348999 j0nx
j0nx's picture

You silly kids thinking hyperinflation can take hold in a world full of labor arbitrage. There is no method for increasing American wages again. Ever. You get sky high commodities costs with deflating or stagnant wages if you are lucky. The end.

Mon, 04/16/2012 - 13:41 | 2349051 I should be working
I should be working's picture

Are there any campaign promises that guy has kept?  Not that the GOP is any better.

Please let Paul run as an independent.  At least then I can vote for someone with a clear conscience.

Mon, 04/16/2012 - 14:02 | 2349120 therearetoomany...
therearetoomanyidiots's picture

That will certainly assure another 4 of obama.   I am sorry to disagree with so many here, but I say whomever we get from GOP is better than Obama. 

I am a Ron Paul supporter....our best bet at this point is to have Romney pick up Ron as VP. 

Mon, 04/16/2012 - 13:45 | 2349067 ableman28
ableman28's picture

Another worthless post from an ideolog to simpleminded to put any thought into what they have to say.

What is Obama supposed to do?  Wave a magic wand and make all this stuff happen.

No republican/teabagger has any interest in cooperating with him regardless of the cost.  Obama can introduce whatever legislation he wants.  It will go nowhere.

All members of congress are bought by the financial industry that figures large in their reelection fund needs.  They would be just thrilled shitless to bight the hand that feeds them.  And, none of them are particulalry inconvenienced by the current or future consequences of TBTF.  They are the beneficiaries.

TBTF is a multidecade result of the concentration of financial power into the hands of fewer and fewer institutions.  Obama happened to show up at a late stage in the process.


Seriously, folks. does anyone out there have a clue?


Mon, 04/16/2012 - 15:52 | 2349521 Kobe Beef
Kobe Beef's picture

Here's a clue, dumbass:

Obama didn't "happen to show up"--he was chosen by the TBTF banks, who funded his campaign, and was promoted to the Presidency by their public relations machines in the MSM. Check the hagiography, buddy; Obama was portrayed as some "messiah" sent to redeem America. Sorry you fell for the propaganda, chump, but Obama is just as bought by the TBTF banks as the members of congress are.

If you can't get this simple fact, then just stop breathing now, please. Barring that, stop posting skittle-shitting-unicorns. Seriously.


Mon, 04/16/2012 - 17:22 | 2349831 ableman28
ableman28's picture

You sound just like the kind of guy I'd like to meet.  Do you by chance live in Manhattan?

Mon, 04/16/2012 - 20:07 | 2350132 ableman28
ableman28's picture

Kobe Chicken, I'm waiting.

Tue, 04/17/2012 - 01:17 | 2350620 Kobe Beef
Kobe Beef's picture

Just fuck off retard. I dont live anywhere near you.

Tue, 04/17/2012 - 10:34 | 2351332 ableman28
ableman28's picture

I'll visit.  Should be fun.  We can have some drinks, talk philosophy, you know, chill as the special new bros we are.

Lets make it happen. 

Mon, 04/16/2012 - 13:46 | 2349070 surf0766
surf0766's picture

The only way to get rid of capitalism is to consolidate everything and then take it over. Is this not the plan?

Mon, 04/16/2012 - 16:03 | 2349565 Mad Mad Woman
Mad Mad Woman's picture

$35 trillion?  Oh it's a lot more than that.  As for Obama, at some point the peasants will realize that he is only carrying the water for Wall Street and the banksters. When we get to that reckoning, there's going to be a shitload of trouble. That will be the change we've been hoping for. There's not enough security to protect the banksters and the Wall Street moguls. Bloodbath coming.

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