Washington D.C.

Something tells us not even an ARIMA X-12, 13 or even 14 seasonal adjustments will do much to change the opinion of America's population that Congress is now more useless, incompetent and corrupt than ever. From Gallup: "Ten percent of Americans in August approve of the job Congress is doing, tying last February's reading as the lowest in Gallup's 38-year history of this measure. Eighty-three percent disapprove of the way Congress is doing its job." So what happens when the approval rating hits 0%? Does America automatically revert back to Monarchy (for all you Sid Meier fans out there), and what then? Back to Slavery? And in the New Centrally Planned normal is Darwin really right?

Reuters summarizes the key facts about the 42-year old House Budget Chair and potential future American vice president. Enclosed also select reactions from various individuals across the political spectrum to his nomination as well as a summary of his lifetime donors as well as those of Joe Biden.

As we reported first earlier, moments after today's market moving initial claims data was posted, we observed that it had been leaked previously as various other data aggregators, but not the main wires, had looked at the DOL's website and found today's claims number had been posted at least 15 minutes before the formal release, and possibly far prior to that. Minutes ago, the DOL, already embroiled in numerous data disclosure SNAFUs was force to add epic humiliation to mere modest humiliation, and admit that the data was indeed released before its official embargo lift time of 8:30 am. 15 hours before. And whose fault is it? Why a "computer glitch" of course. In other words, computers now have the capacity to not only destroy market makering firms, to push key currency pairs at will, to cause stock market flash crashes, to scuttle mega-IPOs, but also to released key data at will, and entirely on their own. Needless to say, there is never a human being behind any of these errors, which are always in the passive voice. It is always the computer's "fault."

Putting our trust and faith in a few unelected bureaucrats and bankers, who use their obscene wealth to buy off politicians in writing the laws and regulations to favor them has proven to be a death knell for our country. The captured main stream media proclaims these men to be heroes and saviors of the world, when they are truly the villains in this episode. These are the men who unleashed the frenzy of Wall Street greed and pillaging by repealing Glass Steagall, blocking Brooksley Born’s efforts to regulate derivatives, encouraging mortgage fraud, not enforcing existing regulations, and creating speculative bubbles through excessively low interest rates and making it known they would bailout recklessness. They have created an overly complex tangled financial system so they could peddle propaganda to the math challenged American public without fear of being caught in their web of lies. Big government, big banks and big legislation like Dodd/Frank and Obamacare are designed to benefit the few at the expense of the many. The system has been captured by a plutocracy of self-serving men. They don’t care about you or your children. We are only given 80 years, or so, on this earth and our purpose should be to sustain our economic and political system in a balanced way, so our children and their children have a chance at a decent life. Do you trust that is the purpose of those in power today? Should we trust the jackals and grifters who got us into this mess, to get us out?   

“Suspicious Cartel Agreements that Include Derivatives”

In an administration that has completely lost its mind, and in which the solution to every problem is the forgiveness of debt to those who lived beyond their means, FHFA's Ed DeMarco is a lone voice of sanity. In a letter to Tim Geithner, the FHFA has the temerity to tell the truth and say that "after extensive analysis of the revised [Principal Reduction Act]...FHFA has concluded that the anticipated benefits do not outweigh the costs and risks... FHFA concluded that HAMP PRA did not clearly improve foreclosure avoidance while reducing costs to taxpayers relative to the approaches in place today."Via Bloomberg:

• *FANNIE MAE, FREDDIE MAC WON'T WRITE DOWN LOANS, DEMARCO SAYS
• *FHFA'S DEMARCO SAYS PRINCIPAL REDUCTION WON'T BENEFIT TAXPAYERS

Needless to say, when presented with a minority opinion that socialism just may not be the answer, Geithner was not happy and penned his own response. Both are presented below.

Former Goldman appartchik Gary Gensler is about to take the stage (again) and explain why the CFTC should exist at all after allowing not only MF Global but a few weeks ago, Peregrine Financial, to steal hundreds of millions in client money without any regulatory supervision at all. All we can say here is: Free Corzine!

For over four years, virtually everyone in the finance industry knew that Libor was manipulated. The stench of manipulation rose to the very top and thanks to a document release of formerly confidential information, we now know for a fact that even the Fed was in on it - recall that as part of production, the Fed provided a transcript of an April 2008 phone call between a Barclays trader in New York and Fed official Fabiola Ravazzolo, in which the unidentified trader said: "So, we know that we're not posting um, an honest LIBOR." And yet without any tangible, black on white evidence, there was no catalyst for pursuing legal action. That all changed when in a desperate attempt to protect its ass, Barclays decided to rat out everyone by settling with regulators, and "turn state" producing e-mail based evidence, most of it quite visual (after all what is more tangible to the common man that evil bankers sipping on Bollinger), which essentially threw years of quiet cartel cooperation under the bus. As a result, regulators, enforcers, and legal authorities, many of whom were in on this manipulation from the beginning, no longer had an excuse to not pursue civil and criminal charges against perpetrators, who until recently were footing the tabs at various gentlemen's venues and ultra expensive restaurants. And while the imminent waterfall of civil prosecution will force bank litigation reserves to go through the roof, here comes, with a very long delay, the criminal charges. As Reuters reports, here come the arrests.

Too Big Leads To Destruction of the Rule of Law

It’s tough to do just about anything today without experiencing the far-reaching hand of the growing regulatory state.  Virtually everything the average shopper see on the store shelf is stamped with government approval.  With the increasing use of red light safety cameras and even domestic surveillance drones, the dystopian world which George Orwell painted so brilliantly in 1984 is sounding more prophetic by the day.  The result is a new generation that is coming of age amongst a pervasive and all-inclusive nanny state.  With a federal register that grows by tens of thousands of pages each year, tyranny is spewing forth across America from Leviathan’s home of Washington D.C. every single day. In a free society, it would be unjust to force some into paying for the constant supervision of those less cautious of life’s risks.  Just as a child learns to avoid a hot stove by painfully touching it, we all learn through misfortune.  The Jersey Shore drownings, tragic as they are, should serve as a lesson all beach visitors.  Common sense isn’t something to be legislated.  It can only form when the right incentives are involved for people to make smart decisions without relying on a central source of authority.  And just like the free market, common sense is also a product of spontaneous order.

At least superficially, they appear to be coming more and more often.

Most of you that are taking the time to read this have already experienced some level of "waking up" over the past several years or longer.  Most of you have also probably felt from time to time that the knowledge you possess is a burden and have fully appreciated the meaning of "ignorance is bliss."  We know this because we have felt these very same emotions at times.  The most important thing to remember; however, is that we are just awake individuals within a wave or cycle of awakening.  There were those that came before us and there will be many, many more to come after us. Most importantly, once you are truly awakened you never go back to sleep.

Ben Bernanke will deliver the semiannual report on monetary policy to the Senate Banking Committee Tuesday. The market is hoping and praying that the Chairsatan will make it rain. He won't. In fact, as explained earlier, it is likely that Ben will say absolutely nothing of significance today and in a world in which only the H.4.1 matters, this is not going to be taken well by the market. Of course, if Benny does crack and promises to push the S&P to 1450 just in time for the re-election, all bets are off.

Wasendorf take note: step 1, become powerful governor and/or senator (editor of SFO magazine won't cut it); step 2, hire Blankfein's lawyer for key personnel who can throw you under the bus

Big Banks Are Rotten to the Core