"I Ain't Gonna Work On Angie's Farm No More" - Bob Dylanopoulos

Tyler Durden's picture

From Mark Grant, author of Out of the Box

Ain't Gonna Work On Angie's Farm No More


“The wind is rushing after us, and the clouds are flying after us, and the moon is plunging after us, and the whole wild night is in pursuit of us; but, so far we are pursued by nothing else.”

                 -Charles Dickens, The Tale of Two Cities

I have left St. John’s Newfoundland and I will be three days at sea now heading for Reykjavik, Iceland. The seas are up, the wind is cold and icy, the sky is that grey color of mid-winter in the arctic north and it is all reminiscent of what is taking place in Europe as the seams come undone and as bleak depression is the mood on the Continent. Aside from the politics I remark that “can kicking” has its consequences. It may move the crisis down the road some but with the accumulation of ever more debt to pay off past obligations the day of the inevitable reckoning worsens and we are quickly approaching that day, those days, as the grand experiment unravels due to national ambitions, a game badly played by the political elite in Europe and simple arithmetic working in Greece, Spain and Italy.  Contingent liabilities are counted on the balance sheets of corporations for a reason, a very good reason, which is that the “contingent” often become the “actual” which is exactly what is happening in Europe. The misguided fabrication of the European Union to not count guarantees, promises to pay and contingencies as part of their debt to GDP ratios or as part of anyone’s obligations is a page torn Grimm’s Fairy Tales and make-believe is always an ingredient promising to breed disaster when penned into anyone’s balance sheets; corporate or sovereign.

"You know, my dear, it isn't safe for a little girl to walk through these woods alone."

                       -The Wolf, Little Red Riding Hood

It should be noted that one government after another has fallen in Europe. Mrs. Merkel’s party fared the worst at German elections over the weekend since shortly after World War II. Spain is now talking of bailing out their regional governments, bailing out their banks and they just do not have the capital for all of this making a turn for funding to the EU/ECB/IMF virtually inevitable. The Italian 10 year is at 5.75% this morning and the Spanish 10 year is at 6.25% leaving the Italian and Spanish banks in worse shape after utilizing much of their LTRO money to buy their sovereign debt which is now at appreciable losses. Europe is losing the bet as the entire Continent besides Germany is in recession and without growth or significant Inflation; the long walk down the Road to Perdition continues. It must be candidly said that all of the German imposed austerity measures not only did not solve any of the problems but that they made matters much worse. The punishment did not fit the crime.

"I ain't gonna work on Angie's farm no more."
                              -Bob Dylanopoulos

I am asked, from time-to-time, why I write about Europe with such frequency. The answer is quite simple; there is nothing more important, nothing that will have a greater impact upon the world’s financial system, nothing that will impact any and all markets more than what is transpiring on the Continent. It is a grand experiment gone bad, a Federalist’s dream floundering in the dust, a vision of Heaven that is being dragged through the narrow gates of Hades and there is no longer any painless way home if home is to be found at all. The notion that there is some sort of decoupling in the marketplace between America and Europe is an adage quoted by the village idiots for the fools listening in the town’s square; nothing more than that. 

In the Coming Days

He stood there, stoic, gleaming in his silvery armor; the Germanic Prince. Without emotion he unsheathed his sword and cleaved the Hellenic head from its neck. He was positive that he knew what would happen. He knew in his heart and in his mind that the awkward, whimpering creature before him should now transform into a dazzling, beautiful Princess made wise by her hardship.

This is not what is going to happen.

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Cognitive Dissonance's picture

"It is a grand experiment gone bad, a Federalist’s dream floundering in the dust...."

I just hate it when my wet dreams go dry. More K-Y on that finger Jamie.........please.


markmotive's picture

There ain't no such thing as being hedged. In fact, those that believe they are hedged can become complacent creating even greater risks as their hedges fall apart.

strongband's picture

Can someone please answer a simple question: what does the 500billion debt comprise of?

Olympics cost about 10bil. Even if they "spent an olympics" every year for the past 10 years, they'd only be in 100bil debt. And that would be a highly tangible debt.

So please, where the hell did the rest go? Anyone? No one seems to be asking that one simple question? Where's the breakdown of debt?? Some simple numbers people?

fuu's picture

 "So please, where the hell did the rest go?"

GS, JPM, MS, C, BAC, UBS, etc.

Normalcy Bias's picture

Hookers and Blow for the Mandarins? Just a guess...

tonyw's picture

The rest was just frittered away.

francis_sawyer's picture

 "So please, where the hell did the rest go? Anyone?"


and POOF... It's gone...

Sandmann's picture

BANK MULTIPLIER.  How did JP Morgan have a Derivatives exposure 500% US Government Debt Levels ?  How does a New York Bank Holding Company FDI C - insured have  FIVE TIMES the exposure of the Government of the United States ?  How can the US taxpayer owe 102% GDP for US Government Debts PLUS another 500% GDP in JP Morgan Derivatives PLUS another FOUR times US GDP in Bank of America Derivates + PLUS another THREE TIMES  US GDP at Goldman


In short how do SIX US Banks have Derivatives Exposure EIGHTEEN TIMES the amount the US Government Owes ?

Where did all that money go ? Nowhere - it was never real money - it was CLAIMS against Assets just like when you borrow Casino Chips against your unborn children's income

flacorps's picture

The Pogo comic strip famously observed: "We have met the enemy, and he is us!" Europe has spent on cradle-to-grave socialism, health and welfare for non-producers plus lavish vacation and other benefits for those who do work.

They have spent more than they made in order to keep getting re-elected by people who felt they benefited by the state doing that. The financiers profited from it to the point where they permitted it for far too long. Hence the hard brush by the iceberg that the interconnected economies of Europe have experienced. Now too many compartments are compromised and she's going down by the bow, with compartments labeled P, I, I, G, and S already taking on far too much water...

walküre's picture

So what you're saying is that you prefer the American system where 1% have the privilege to take ALL the vacations ALL the time and the 99% are happy to have the occasional Thanksgiving trip to their families?

Fuck that. It's not socialism when a good run company pays their employees decent wages and allows them a few paid weeks off each year. That concept by the way is a German concept and was created by the big steel and coal magnates of their time at the tail end of the Industrial Revolution.

Socialism is when you have political and financial parasites who surround themselves with armies of useless pencil pushers and bureacrats who don't know their ass from their elbow and create nothing of value.

flacorps's picture

No, I didn't say I preferred the American system. What I prefer is that the Iron Law of Oligarchy not be allowed to dominate the finances and politics of nations. So far the thing seems inescapable (particularly where people are allowed to vote for their own benefits ... which puts the oligarchs in faster than anything else).

GernB's picture

I don't know what the American system would be called, certainly not a free market. In many respects, particularly for the elderly, it is more socialistic than capitalistic and thus those industries directly impacted by the elderly, like healthcare, suffer from many of the ills of socialism. As in many strong central governments which subordinate the freedom of the individual to the power of the state it favors the power elite, through it's ability to sell the majority on policies that give up their freedom of choice for the security the state promises. A security it never delilvers. Like all central power it is corruptible, and since it is power over the individual, the 99% do not get the benefits of the rich and powerful who can shape the system to their benfit.

Take the federal reserve for example. A creation of the federal government, not of free markets. It's obsession with managing the economy to prevent recessions is not only a dismal failure as recession after recession has occured since it's creation, but in attempting to create continuous inflation it is creating a massive gap between rich and poor, as the money printing needed to create inflation benefits the rich (investors and owners of banks) far more than the poor. It's policy is to intervene in recssions and in so doing prevents them from performing one of their most beneficial functions, to redistribute wealth back to the middle income and lower class.

Judge Arrow's picture

The money? It goes to the corrupt elites first and then just enough to quiet the species Boobus Publicus - their pensions, the economic subsidies to failed enterprises (Solyondra X10000), their government bureaucracies, their sense of entitlement, their lack of motivation, their endemic corruption as societies and failed states, it is human weakness at its weakest and will get worse and then worse than that as it lands in the USA with both feet stomping on the FED/Treasury corruption that will take us all down. It is a drama being played out over time, and in the US some states will prosper and others will be under martial law, an exponential expansion of what can be seen in the shadows now - paralysis and chaos - and impossible to prepare for unless you already have.

strongband's picture

Surely though, SURELY someone has an itemized account of these debts. Where is it? Enough of the bankster slamming, the money that they're talking about must be itemized in some way, somewhere.

CH1's picture

Surely though, SURELY someone has an itemized account of these debts.

Easily fixed with a tragic, accidental fire in a records room. Ho hum, Dancing With The Stars is on!

mick_richfield's picture

Where did it go?  Well, the Greek government is spending about $25 billion a year more than they take in.

So, that would be 2.5 Olympics a year, I guess.  I think something like 25-30% of Greek government spending is financed by borrowing.  Multiiply that by twenty years.

So they're not as bad as the US, but they're still .. um .. cretins? 

Matt's picture

strongband: So please, where the hell did the rest go? Anyone? No one seems to be asking that one simple question? Where's the breakdown of debt?? Some simple numbers people?



First of all, I highly doubt that all debts were forgiven and they started from zero 10 years ago. All the outstanding debts they had in Drachma were probably just switched over to Euros.

Second, compounding interest.

Third, money borrowed to pay back other money that was borrowed, along with the interest on the previously borrowed money.

SwingForce's picture

Yes, let's here it for Iceland! I look forward to your posts later this week.

ziggy59's picture

Eventually even the sheeple on the Animal farm grow tired of being effed and told its good for them..

CH1's picture

You would think... but it's damn slow in coming.

Starvation guarantees it, but not much else.

falak pema's picture

wet dreams of icy scream and little red riding hood riding dick tracy into the wood to beat the shit out of big bad wolf; disguised into grandma Morg. How's that! Leg before or not!

midgetrannyporn's picture

Nobody can blow a banker like Angie.

emersonreturn's picture

a classic piece, thank you, Mark Grant, and Tyler. 

Stoploss's picture

One train, one cliff.

gjp's picture

All true about Europe, but there are one of two paths for Europe to take:

1. Federalization, in which sovereignty is ceded and fiscal policies and debts are aggregated

2. Exit from the monetary union, either by peripheral defaulting nations, or by Germany and smaller surplus nations

In case 1, when aggregated the fiscal / debt picture of Europe looks much better than America.  In case 2, US looks even worse compared to an unecumbered Deutschemark.

The worst thing that can happen from American perspective is some sort of European resolution.  Even more than decoupling, the US has been living off of Europe's troubles for two or three years now.  And American media, pundits, and bankers are having a field day preaching about European problems ... awfually hard to swallow, that.

Sandmann's picture

1. Federalization, in which sovereignty is ceded and fiscal policies and debts are aggregated


I've always thought it would be great if Mexico and the USA were one country with common citizenship and currency  - no more illegals, no more border problems - just a happy American Federation of 440 million. Still smaller than the EU and EEA but a good start to equalising living standards between New York and Mexico City. 


That would be true Federalization and recognition of the true reality of the future of the United States

Ben Burnyankme's picture

Yeah, that will work.  Europe is no different than the 50 US states under the beast of Leviathan that lives in DC.  We see how well equalization works when you have idiot states like CA (read Greece) that require the more reponsible like Texas (read Germany) ones having to contribute to their excesses. 

Euro going down with the EU.  Dollar will eventually follow along with the secession word.

Umh's picture

I had dream. It was a lot more likely than a successful one world paradise.

Possible Impact's picture

How much debt can an unencumbered African swallow? (11 m/sec   money velocity)

Zero Govt's picture

Nice summation but what does the author think is failing here???

What is failing in the "grand experiment gone bad" is not the Fedelarists dream but the very foundations of the multitude of lies that support the idea and existence of Govt

we are not taxed for the benefit of society we are thieved for the benefit of a lazy cancerous few 

we are not governed by democratic representatives we are abused by scum

this is a failure of democratic Govt not of policy but of the very precept of Govt itself... the biggest lie ever told

Govt is failing EVERYWHERE and failing for the exact same reason. You don't enrich society by thieving from it, you don't enhance freedom by putting some tosspot in power above you

Are we all crystal clear?

..or shall we go around again for another 2,000 years of complete failure and Govt wrecking every nation another dozen times each

AssFire's picture

It seems the last 50 years were about creating enough parasites to enable the welfare class to reach the critical mass of a 50% voting block that supports any promises for more freebies. It was done so in a way that seeks to demoralize any person that must come in contact with a federal worker or comply with the multitude of laws that have all basically become pay to play kickbacks along the line the mafia would enforce. Even made up enemies were created to reduce our freedoms and be abused by TSA goobermint loosers who are allowed to steal and abuse without recourse.

There are too many of them now to allow the corrupted "democratic process" to work so revolt is the only answer. The simplest being a tax revolt whereby the people of wealth buy huge connecting properties and only barter. They become self sufficient like Galt's Gulch and just wait for it to crumble. It is a big step not to become a paranoid prepper; but to be a calculating independent who with others of common mind and purpose wait out the tsunami that needs to occur. Once the ignorant leeches are reduced in number perhaps a very small government without the ability to reward will be put in control. By that time most of us will be dead.

nowhereman's picture


Most people don't realize the extent to which they are beholden to gov't, all in the drive to achieve the lowest common denominator.

I recall a book called "the Merchants of Fear" that I'd read back in the early 70's exposing the methodology of the insurance industry.  Apperantly, gov't has learned it's lesson well, and it costs us dearly.

How much does it cost for a drivers licence, to protect us from other drivers?

Has it worked? Are we more safe? Or is it just a tax on driving?

Emision testing? Safety inspections? Manditory Insurance?  Has any of this worked? Or is it another pay to play scheme, offered as a panacea to protect us from ourselves?  Because as everyone now knows, you can't be held accountable for your actions anymore.

I'm sick of hearing Sociological excuses for peoples behavior.  I'm sick of having my life controlled by regulation designed to lower my freedom in order to enhance the right of other people to fuck up.

It used to be that the cream rose to the top, but now, through the alchemy of gov't intervention, the cream is suspended in the liquid of mediocrity lest someone, not connected" should gain an advantage.


blunderdog's picture

       It used to be that the cream rose to the top...

Nah, that's bullshit.  Just different people derive different benefits as the corruption changes.

walküre's picture

The Greek elite has plundered their own nation. Billions of Greek wealth is sitting offshore. The Greek church is sitting on billions of cash.

Let 'em eat dirt.

Sandmann's picture

Billions of Greek wealth is sitting offshore.


No it isn't. It is held offshore but invested onshore in Manhattan, London, Hong Kong, Vancouver.....it is invested in hard assets but owned offshore

walküre's picture

Sure, part of the money is invested. Other parts are sitting in numbered accounts or offshore corps across the globe. I'm sorry for the ordinary Greek who still doesn't understand what happened. But at some point I totally expect the Greeks to take to the streets and demand that heads are rolling from their own elite who has gamed the system for 10 years including the wealthy Greek Orthodox Church.

The money is there. C'mon Panos, are you really that gay?

GMadScientist's picture

Those Greek elites are behaving like Turks. ;)

carbonmutant's picture

More like "Highway 61"...

daxtonbrown's picture

I'm okay with the article until it says German austerity didn't work and made things worse. More Keynesian crap.  How does one solve problems created by loose money and over extended credit - by following the same prescription??

rwe2late's picture

German (aka bankster) austerity for the populace

as opposed to

populist austerity (aka Iceland style default) for the banksters

digalert's picture

Europe, in many cases, has been a leading indicator for the US. For for all those saying it can't/won't happen here, will be wrong.

Chump's picture

Nothing to add here except to say I gave a dollar to a couple guys performing this song on a street corner over the weekend.  Weird.

GMadScientist's picture

"Well, he hands you a nickel

He hands you a dime

He asks you with a grin

If you’re havin’ a good time"

carbonmutant's picture

"In fact I think it can be easily done, out on Highway 61..." -BD

Shizzmoney's picture

"The European Union: 'It Gets Worse'!"

PR Guy's picture

People in Europe won't get seriously pissed and do something about incompetent leadership and robbing banks until they actually get hit hard in the pocket or someone close to them dies because of what they are being subjected to.

Change Euros in peoples' bank accounts to Drachmas/Pesatas/monopoly  money and then devalue 50%, then another 50% then another 50% till they can barely afford to eat and there's no petrol in the pumps to run the car any more.

The you'll see some real rock throwing as the 1% deploy their armies and police forces out onto the streets and they start shooting real bullets directly at people.

Death of a family member or close friend or being hit real bad in the pocket is what makes people put down their TV remotes and start filling bottles with petrol.

But what's happening in Europe isn't bad enough to make them budge off the couch yet. You call what's happened in countries there in terms of cuts and tax rises so far austerity? That's not austerity. When I was a kid we used to eat offal (e.g. ox heart) if we wanted to celebrate big time and splash out on some meat, we had worn second hand clothes to wear to school and plain white bread and butter for normal dinners, no heating on in the winter, one bath a week, etc. - and this was in England and my dad was in a paying job!! Most people don't know they're fu**ing born and whine at the slightest inconvenience.

If you don't like what bankers and politicians are doing and you don't do anything about it, who's the idiot?

aztec two step's picture

An old veteran trader once opined to me that the only perfect hedge is in a Japanese garden.