Tuesday, November 29, 2011

Away, Offline

Hi folks, I'll be away and offline until Tuesday, December 6.  Posting will resume then. Commenting has been disabled to deter those pesky comment live-link spammers. Meanwhile, there are 16,879 posts here, hopefully some of interest. Thanks for your patience! See you then.  - CP

Monday, November 28, 2011

The Poet: David Whyte, "Sweet Darkness"

 "Sweet Darkness"

"When your eyes are tired the world is tired also.

When your vision has gone no part of the world can find you.

Time to go into the dark where the night has eyes
to recognize its own.

There you can be sure you are not beyond love.

The dark will be your womb tonight.

The night will give you a horizon
further than you can see.

You must learn one thing:
the world was made to be free in.

Give up all the other worlds
except the one to which you belong.

Sometimes it takes darkness and the sweet confinement of your aloneness
to learn anything or anyone that does not bring you alive
is too small for you."

- David Whyte
"House of Belonging"

"A Look to the Heavens"

“Big, beautiful, barred spiral galaxy NGC 1300 lies some 70 million light-years away on the banks of the constellation Eridanus. This Hubble Space Telescope composite view of the gorgeous island universe is one of the largest Hubble images ever made of a complete galaxy. NGC 1300 spans over 100,000 light-years and the Hubble image reveals striking details of the galaxy's dominant central bar and majestic spiral arms. 
Click image for larger size.
In fact, on close inspection the nucleus of this classic barred spiral itself shows a remarkable region of spiral structure about 3,000 light-years across. Unlike other spiral galaxies, including our own Milky Way, NGC 1300 is not presently known to have a massive central black hole.”

Chet Raymo, "What Does It All Mean?"

"What Does It All Mean?"
by Chet Raymo
"A good friend tells me via e-mail that she is reading Leo Tolstoy's "Anna Karenina." I read the book for a second time two years ago, in the new translation by Richard Pevear and Larissa Volokhonsky. It's one of those novels I had to read twice - once in middle age (I would not have had the patience in youth) and once in settled maturity. In middle age, it was all about Anna, and passion, and doubt. In old age - for me at least - it's about Levin, settled, happily married, enjoying as much intellectual peace as might be possible in this big, sprawling epic of a world.

The book ends with Levin on the terrace of his house under a starry sky. Away on the horizon a storm has gathered and lightning flashes. He meditates on his Christian faith and its ethical imperatives, and on the vast and seemingly indifferent universe of nebulas and distances spread out before his eyes. He thinks about how it is that the stars appear to move, when in fact it is the Earth that turns under the sky. And he thinks too about how a moral imperative is apparently part of the human condition, as much so for the Jew, the Muslim, the Confucian, the Buddhist - and, one must suppose, the secular agnostic - as for the Christian. The accident of Christian faith make as little difference to the moral trajectory of his life as does the question of whether it is the stars or the Earth that turns.

In the last words of the novel, Levin muses: "There will be still the same wall between the holy of holies of my soul and other people, even my wife; I shall still go on scolding her for my own terror, and being remorseful for it; I shall still be as unable to understand the mystery of existence, and I shall still go on attending to the mystery; but my life now, my whole life apart from anything that can happen to me, every minute of it is no more intrinsically meaningful or meaningless than it was before, but it still has the positive meaning of goodness which I have the power to put into it."

The Daily "Near You?"

Jonesborough, Tennessee, USA. Thanks for stopping by.

Archaeology:"Secret History of Stonehenge Revealed"

"Secret History of Stonehenge Revealed"
by David Keys

"Extraordinary new discoveries are shedding new light on why Britain's most famous ancient site, Stonehenge, was built - and when. Current research is now suggesting that Stonehenge may already have been an important sacred site at least 500 years before the first Stone circle was erected - and that the sanctity of its location may have determined the layout of key aspects of the surrounding sacred landscape. What's more, the new investigation - being carried out by archaeologists from the universities' of Birmingham, Bradford and Vienna - massively increases the evidence linking Stonehenge to pre-historic solar religious beliefs. It increases the likelihood that the site was originally and primarily associated with sun worship.

The investigations have also enabled archaeologists to putatively reconstruct the detailed route of a possible religious procession or other ritual event which they suspect may have taken place annually to the north of Stonehenge. That putative pre-historic religious 'procession' (or, more specifically, the evidence suggesting its route) has implications for understanding Stonehenge's prehistoric religious function - and suggests that the significance of the site Stonehenge now occupies emerged earlier than has previously been appreciated.

The crucial new archaeological evidence was discovered during on-going survey work around Stonehenge in which archaeologists have been 'x-raying' the ground, using ground-penetrating radar and other geophysical investigative techniques. As the archaeological team from Birmingham and Vienna were using these high-tech systems to map the interior of a major prehistoric enclosure (the so-called 'Cursus') near Stonehenge, they discovered two great pits, one towards the enclosure's eastern end, the other nearer its western end. When they modelled the relationship between these newly-discovered Cursus pits and Stonehenge on their computer system, they realised that, viewed from the so-called 'Heel Stone' at Stonehenge, the pits were aligned with sunrise and sunset on the longest day of the year - the summer solstice (midsummer's day). The chances of those two alignments being purely coincidental are extremely low.

The archaeologists then began to speculate as to what sort of ritual or ceremonial activity might have been carried out at and between the two pits. In many areas of the world, ancient religious and other ceremonies sometimes involved ceremonially processing round the perimeters of monuments. The archaeologists therefore thought it possible that the prehistoric celebrants at the Cursus might have perambulated between the two pits by processing around the perimeter of the Cursus. Initially this was pure speculation - but then it was realized that there was, potentially a way of trying to test the idea. On midsummer's day there are in fact three key alignments - not just sunrise and sunset, but also midday (the highest point the sun reaches in its annual cycle). For at noon the key alignment should be due south.

One way to test the 'procession' theory (or at least its route) was for the archaeologists to demonstrate that the midway point on that route had indeed a special relationship with Stonehenge (just as the two pits - the start and end point of the route - had). The 'eureka moment' came when the computer calculations revealed that the midway point (the noon point) on the route aligned directly with the center of Stonehenge, which was precisely due south. This realization that the sun hovering over the site of Stonehenge at its highest point in the year appears to have been of great importance to prehistoric people, is itself of potential significance. For it suggests that the site's association with the veneration of the sun was perhaps even greater than previously realized.

But the discovery of the Cursus pits, the discovery of the solar alignments and of the putative 'processional' route, reveals something else as well - something that could potentially turn the accepted chronology of the Stonehenge landscape on its head. For decades, modern archaeology has held that Stonehenge was a relative latecomer to the area - and that the other large monument in that landscape - the Cursus - pre-dated it by up to 500 years. However, the implication of the new evidence is that, in a sense, the story may have been the other way round, i.e. that the site of Stonehenge was sacred before the Cursus was built, says Birmingham archaeologist, Dr. Henry Chapman, who has been modelling the alignments on the computerized reconstructions of the Stonehenge landscape

The argument for this is simple, yet persuasive. Because the 'due south' noon alignment of the 'procession' route's mid-point could not occur if the Cursus itself had different dimensions, the design of that monument has to have been conceived specifically to attain that mid-point alignment with the center of Stonehenge. What's more, if that is so, the Stonehenge Heel Stone location had to have been of ritual significance before the Cursus pits were dug (because their alignments are as perceived specifically from the Heel Stone). Those two facts, when taken together, therefore imply that the site, later occupied by the stones of Stonehenge, was already sacred before construction work began on the Cursus. Unless the midday alignment is a pure coincidence (which is unlikely), it would imply that the Stonehenge site's sacred status is at least 500 years older than previously thought - a fact which raises an intriguing possibility.

For 45 years ago, archaeologists found an 8000 BC Mesolithic ('Middle' Stone Age) ritual site in what is now Stonehenge's car park. The five thousand year gap between that Mesolithic sacred site and Stonehenge itself meant that most archaeologists thought that 'sacred' continuity between the two was inherently unlikely. But, with the new discoveries, the time gap has potentially narrowed. Indeed, it's not known for how long the site of Stonehenge was sacred prior to the construction of the Cursus. So, very long term traditions of geographical sanctity in relation to Britain's and the world's best known ancient monument, may now need to be considered.

The University of Birmingham Stonehenge area survey - the largest of its type ever carried out anywhere in the world - will take a further two years to complete, says Professor Vince Gaffney, the director the project. Virtually every square meter in a five square mile area surrounding the world most famous pre-historic monument will be examined geophysically to a depth of up to two metres, he says. It's anticipated that dozens, potentially hundreds of previously unknown sites will be discovered as a result of the operation. The ongoing discoveries in Stonehenge's sacred prehistoric landscape - being made by Birmingham's archaeologists and colleagues from the University of Vienna's Ludwig Boltzmann Institute - are expected to transform scholars' understanding of the famous monument's origins, history and meaning.”
- http://www.sott.net/

"How It Really Is"

Bill Bonner, "Tracking the Government’s Plans to Save the Economy"

"Tracking the Government’s Plans to Save the Economy"
by Bill Bonner

"Plan A doesn’t work…neither does Plan Z. Last week ended with a whimper and a bang. Stock markets whimpered. Investors didn’t know what to think. And nothing happened last week to help them figure it out. On the other hand, Black Friday was a bang. It showed retailers that if they wanted to bring shoppers out, they would have to cut prices a lot more than usual.

Conversation overheard in the check-out line at local grocery store: “It’s crazy the way they carry on…I mean this Black Friday thing.” “Yeah…it’s crazy.” “If they could make money selling things so cheaply, why don’t they just cut the prices all year ’round…instead of making us crazy on one day of the year?” “Yeah…it’s crazy…” “You know what I think… I think they’re messing with us. That’s what I think. They know that if they give you some real discounts you’ll come to the store…and then you’ll buy something you didn’t intend to buy…and you’ll pay a lot for it. Otherwise, it doesn’t make sense. How can they sell a cotton sheet for $12 one day and then sell it for $10 the next day? Doesn’t make sense. I heard they lose money on everything they sell today. But I guess if they sell enough stuff…” “Yeah…it’s crazy…but I don’t care if it’s crazy. I gotta go out and save as much as I can. Milton’s not getting as much work as he used to. He’s an electrician. I guess people have decided to live by candle light. Either that, or Milton is just goofing off.” There are a lot of ways to look at what is going on.

When the crisis began in 2007 people thought we might be in for a little setback. They couldn’t imagine any fundamental change happening. As far as they could tell the economy had been expanding for nearly 30 years with only minor periods of sluggishness. And the last 5 years had seen the biggest housing boom in history. Electricians worked night and day trying to keep up with it. And who doubted that America’s financial system of buy now/pay later was the best form of capitalism ever created? As for America’s political system, was it not the crown of creation? The rich were getting fabulously richer. But who cared? Everybody was getting richer. Everybody’s house was going up in price. If you wanted money all you had to do was to take out some of your accumulated equity. Everybody was getting a bigger house and more stuff. Life was as good as it gets. Then, in 2008, when Lehman Bros. went broke it became obvious that something was wrong. People began to refer to a “liquidity crisis.” Everything was fundamentally solid, said the authorities. Just a cash-flow problem caused by excesses in subprime debt, they thought.

‘Move along…nothing to see here,’ they said. ‘We’ve got it all under control.’ Then, the feds came up with Plan A…they would solve the liquidity crisis by putting in cash — about $5 trillion or so. The biggest intervention ever. If it had only been a liquidity problem, that would have done the trick. But it wasn’t a liquidity problem at all. Still, the cash had an effect. The stock market started to bounce back. Then, the price of oil and commodities rose, which made things worse. Because it raised the typical household’s cost of living…without providing it with more money. Unemployment grew worse. Houses kept falling in price. Experts began to refer to the “Great Recession” and to speculate about how long it would take for a full recovery. The feds then came up with Plan B — ultra-low interest rates, cash for clunkers, shovel-ready projects and other stimulus measures.

But it wasn’t a recession either. Not even a great one. Recessions can be fixed by lowering the price of credit. Deals that wouldn’t work at a higher rate become attractive. The money flows. The deals get done. The economy picks up. But that wasn’t happening. Gradually experts, commentators and average people are beginning to realize that there is something else going on. This is a period of de-leveraging. The problem with credit isn’t the price of it. The Fed has been lending money at zero interest rate for more than two years. But neither businesses nor individuals seem to be in the mood. Only the government will borrow and spend.

That’s when the Fed came up with Plan C — quantitative easing. If people won’t borrow and spend, the Fed reasoned, we can’t get money into the system through the banking system. So, we’ll try something else. We’ll print money and use it to buy US government debt. In effect, we’ll allow the federal government to spend money without raising taxes or borrowing the money from the public. This will increase the amount of money in the system. It will be like a stealth fiscal stimulus measure…one the politicians don’t have to vote on. But Plan C didn’t work any better. Instead of going down, as they were supposed to, US bond yields went up…

Meanwhile, in Europe, same alphabet. Same troubles. Even worse. There, the central bank is less willing to help. So even governments are tapped out. Lenders are afraid they won’t get their money back. One by one, the fringe countries ran out of credit. And now, the countries at the core are struggling too. Last week, even Germany had trouble selling its debt. Plan A for saving Europe didn’t work. Neither did Plan B. Or Plan C. Now, poor Europe is running out of alphabet…running out of time…and running out of money too. So, what’s going on? How can you best understand what is happening? It’s a Great Correction. It is a period in which errors are corrected. What errors?

Oh…we were afraid you’d ask. That’s what we don’t know. It seems obvious that it is correcting the excess debt built up over the last 50 years. In America, the private sector probably has about twice as much debt as it “ought” to have. People need to stop spending…save…and get rid of debt. It will take time — about 10 more years, by our reckoning. But it’s not just that. There’s all the zombie build-out that the debt paid for too. That is, it’s not just debt that has to go bye-bye… Jobs, businesses, assets, and whole industries have to be corrected too. Cheap finance…and all that goes with it…led people to spend more than they could afford. They caused an economy to evolve in a direction that makes little sense. How many people do you need who install granite countertops? How many electricians? How many subprime lenders?

How many foreign wars could you afford if you had to actually pay for them? How much health care? How many pensions? Can middle-class people really afford to live in big middle-class houses 40 miles from their work? Can you really afford to make a salad in California and eat it in New York? Maybe when oil was $50 a barrel. But how about when it is $100? The correction could be aiming for a lot more than just the economic mistakes of the last 10 years. Americans’ standard of living is too high. It needs to be corrected downward.

And the rich…the 1%, God bless ’em, aren’t they asking for correction too? Aren’t they set up now for a double-whammy…? The first whammy hits them when their assets go down. The rich wouldn’t have this public relations problem if the feds had listened to us. The rich own stocks and other financial assets. And the feds stopped the stock market/banking crash that would have taken them down a notch. But the feds can’t hold up asset prices forever. When the bear market is over, the rich will not be half as rich as they are today. The second whammy will come from the feds…or the mobs. They’ll be hit with big tax hikes. We wouldn’t be surprised to see them whammed by a wealth tax. That will be Plan Z…to take money directly from the rich in order to fund the federal government’s latest giveaway programs. The politician who comes up with it is almost certain to be offered a seat in Congress.

The rich will moan and whine…but they’ll be lucky to escape with their lives."

"Occupy Philadelphia: Livestreaming From the Occupation"

Judge Andrew Napolitano, "What If?"

Judge Andrew Napolitano, astonishingly, on FAUX News.

The Economy: "$707,568,901,000,000"

"$707,568,901,000,000: How (And Why) Banks Increased Total
Outstanding Derivatives By A Record $107 Trillion In 6 Months"
By Teotwawki Daily

"While everyone was focused on the impending European collapse, the latest soon to be refuted rumors of a quick fix from the Welt am Sonntag notwithstanding, the Bank of International Settlements reported a number that quietly slipped through the cracks of the broader media. Which is paradoxical because it is the biggest ever reported in the financial world: the number in question is $707,568,901,000,000 and represents the latest total amount of all notional Over The Counter (read unregulated) outstanding derivatives reported by the world’s financial institutions to the BIS for its semi-annual OTC derivatives report titled “OTC derivatives market activity in the first half of 2011.” Indicatively, global GDP is about $63 trillion if one can trust any numbers released by modern governments. Said otherwise, for the six month period ended June 30, 2011, the total number of outstanding derivatives surged past the previous all time high of $673 trillion from June 2008, and is now firmly in 7-handle territory: the synthetic credit bubble has now been blown to a new all time high. Another way of looking at the data is that one of the key contributors to global growth and prosperity in the past 10 years was an increase in total derivatives from just under $100 trillion to $708 trillion in exactly one decade. And soon we have to pay the mean reversion price.

What is probably just as disturbing is that in the first 6 months of 2011, the total outstanding notional of all derivatives rose from $601 trillion at December 31, 2010 to $708 trillion at June 30, 2011. A $107 trillion increase in notional in half a year. Needless to say this is the biggest increase in history. So why did the notional increase by such an incomprehensible amount? Simple: based on some widely accepted (and very much wrong) definitions of gross market value (not to be confused with gross notional), the value of outstanding derivatives actually declined in the first half of the year from $21.3 trillion to $19.5 trillion (a number still 33% greater than US GDP). Which means that in order to satisfy what likely threatened to become a self-feeding margin call as the (previously) $600 trillion derivatives market collapsed on itself, banks had to sell more, more, more derivatives in order to collect recurring and/or upfront premia and to pad their books with GAAP-endorsed delusions of future derivative based cash flows. Because derivatives in addition to a core source of trading desk P&L courtesy of wide bid/ask spreads (there is a reason banks want to keep them OTC and thus off standardization and margin-destroying exchanges) are also terrific annuities for the status quo. Just ask Buffett why he sold a multi-billion index put on the US stock market. The answer is simple – if he ever has to make good on it, it is too late.

Which brings us to the total outstanding notional derivatives by 6 month period. This is what the BIS, the bank regulators, and the OCC urgently hope that the general public promptly forgets about and brushes under the carpet. Try not to laugh. Or cry. Or gloss over, because when it comes to visualizing $708 trillion most really are incapable of doing so. There is much more than can be said on this topic, and has to be said, because an increase of that magnitude is simply impossible to perceive without alarm bells going off everywhere, especially when one considers the pervasive deleveraging occurring at every sector but the government. All else equal, this move may well explain the massive surge in bank profitability in the first half of the year. It also means that with banks suffering massive losses, and rumors of bank runs and collateral calls, not to mention the aftermath of the MF Global insolvency, the world financial syndicate will have no choice but to increase gross notional even more, even as the market value continues to get ever lower, thus sparking the risk of the mother of all margin calls: a veritable credit fission reaction.

But no matter what: the important thing to remember is that “they are all hedged” – or so they say, a claim we made a completely mockery of a few weeks back. So ex-sarcasm, the now parabolic increase in derivatives means that when the bilateral netting chain is once again broken, and it will be (because AIG was not a one off event), there will simply be trillions more in derivatives that no longer generate a booked cash flow stream for the remaining counterparty, until at the very end, the whole inverted credit0money pyramid collapses in on itself. And for those wondering what the distinction is between notional and...

Notional amounts outstanding: Nominal or notional amounts outstanding are defined as the gross nominal or notional value of all deals concluded and not yet settled on the reporting date. For contracts with variable nominal or notional principal amounts, the basis for reporting is the nominal or notional principal amounts at the time of reporting.

Nominal or notional amounts outstanding provide a measure of market size and a reference from which contractual payments are determined in derivatives markets. However, such amounts are generally not those truly at risk. The amounts at risk in derivatives contracts are a function of the price level and/or volatility of the financial reference index used in the determination of contract payments, the duration and liquidity of contracts, and the creditworthiness of counterparties. They are also a function of whether an exchange of notional principal takes place between counterparties. Gross market values provide a more accurate measure of the scale of financial risk transfer taking place in derivatives markets.

Well, no. It is logical that the BIS will advise everyone to ignore the bigger number and focus on the small one: just like everyone was told to ignore gross exposure and focus on net… until Jefferies had to dump all of its gross PIIGS exposure or stare bankruptcy in the face; so no – the correct thing to say is “gross market values provide a more accurate measure of the scale of financial risk transfer” if one assumes there is no counterparty risk. Because one the whole bilateral netting chain is broken, net becomes gross. And gross market value becomes total notional outstanding. And, to quote Hudson, it’s game over.

As for the largely irrelevant gross market value, which is only relevant in as much as it will be the catalyst which will precipitate margin calls on the underlying notionals, all $700+ trillion of them: Gross positive and negative market values: Gross market values are defined as the sums of the absolute values of all open contracts with either positive or negative replacement values evaluated at market prices prevailing on the reporting date. Thus, the gross positive market value of a dealer’s outstanding contracts is the sum of the replacement values of all contracts that are in a current gain position to the reporter at current market prices (and therefore, if they were settled immediately, would represent claims on counterparties). The gross negative market value is the sum of the values of all contracts that have a negative value on the reporting date (ie those that are in a current loss position and therefore, if they were settled immediately, would represent liabilities of the dealer to its counterparties).

The term “gross” indicates that contracts with positive and negative replacement values with the same counterparty are not netted. Nor are the sums of positive and negative contract values within a market risk category such as foreign exchange contracts, interest rate contracts, equities and commodities set off against one another. As stated above, gross market values supply information about the potential scale of market risk in derivatives transactions. Furthermore, gross market value at current market prices provides a measure of economic significance that is readily comparable across markets and products. And here again, what they ignore to add is that the measure of economic significance is only relevant in as much as the world’s banks don’t begin a Lehman-MF Global tango of mutual margin call annihilation. In that case, no. They are not measures of anything except for what some banks plug into some models to spit out a favorable EPS treatment at the end of the quarter.

Expect to see gross market value declines persisting even as the now parabolic increase in total notional persists. At this rate we would not be surprised to see one quadrillion in OTC derivatives by the middle of next year. And, once again for those confused, the fact that notional had to increase so epically as market value tumbled most likely means that the global derivative pyramid scheme (no pun intended) is almost over."
Source: OTC derivatives market activity in the first half of 2011 and Semiannual OTC derivatives statistics at end-June 2011

Karl Denninger, "Fed "Secrecy" Slowly Falls..."

"Fed "Secrecy" Slowly Falls..."
by Karl Denninger

"From Bloomberg.... "The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing. The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue."

Why did they have to "fight", and what were they "fighting"? The rest of this article makes it sound like the government was interested in the little guy on the street, and Bloomberg fought the good fight with the government against those e-vile bastards at The Fed. Nothing could be further from the truth. Oh, it's true that Bloomberg sued.  And it's true that they won.  But it's false to assert that government and The Fed are on opposite sides of this issue.  They most-certainly are not. “When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” says Sherrod Brown, a Democratic Senator from Ohio who in 2010 introduced an unsuccessful bill to limit bank size. “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”

That's a lie. The Fed and Congress are complicit.  They're both in what would be called a "deadly embrace" if it was adversarial in some fashion but it is not.  In point of fact The Fed is the sole enabler of Congressional and Executive overspending, which in turn allows pretending that our "economy" is somehow healthy or recovering and that the "programs" put forward by the Government have "helped" our economy. The employment data says otherwise.  Housing says otherwise.  But The Fed continues to try to "protect" the bubble mentality it created along with Congress, to wit: "The biggest bond dealers in the U.S. say the Federal Reserve is poised to start a new round of stimulus, injecting more money into the economy by purchasing mortgage securities instead of Treasuries. Fed Chairman Ben S. Bernanke and his fellow policy makers, who bought $2.3 trillion of Treasury and mortgage-related bonds between 2008 and June, will start another program next quarter, 16 of the 21 primary dealers of U.S. government securities that trade with the central bank said in a Bloomberg News survey last week. The Fed may buy about $545 billion in home-loan debt, based on the median of the 10 firms that provided estimates."

Remember folks where this came from.  It's embedded in our psyche now, but it wasn't always this way.  Go look in rural America or older near-urban places and you will see "shotgun" construction - original buildings that were made with three load-bearing walls and two or three rooms (a place to live, a place to cook, and somewhere to sleep along with a small bathroom) with the rear wall designed to be knocked out.

Why? Because those homes, inclusive of the land, were sold at 1x average incomes or less, and families added to the building as they grew - often across generations. Then came the 1920s. Balloon notes were the "preferred" means of financing, damnably like "Option ARMs" of today less the fancy computers.  Home prices and real estate costs soared.  And then, of course, crashed. What was done then?  FNMA happened - in 1938.  Now known as "Fannie Mae", its purpose was to provide a means of financializing homes.  With it ended the practice of a young couple saving 10 or 20% of their incomes for five to ten years and purchasing their home outright for cash. Suddenly it became "chic" to have more and better than you could afford right now, today.  You couldn't buy it but we'll lend you the money - you just need to pay a little interest.

Uh huh. There never was a future in this, because ultimately such a practice is nothing more than pulling forward into today that which you would have bought tomorrow, and the skimming that takes place through interest and fees means that your labor simply gets turned into a foil for slavery - of you, to the banksters. Has any of this changed since the crash?  Oh hell no.  But while the Fed's wheel-spinning and desperation both within The Fed and Congress hasn't changed, it is changing among the population.  The latest is the screed coming from colleges: Even as college prices and average student loan debt rise, educators in some sectors of higher education report they're also seeing plenty of students like Yeh. After watching debt cause widespread damage in their families and communities, they're determined to avoid loans no matter what.

What's surprising is this: Educators aren't sure that's always such a good thing. Of course they're not "sure" it's a good thing.  Why their outsized salaries and pensions might be threatened, not to mention all the bond issues that were floated by colleges to build palaces that look more like a luxury hotel than an educational establishment and do exactly nothing to improve the quality of instruction in Calculus. More to the point some of those "educators" might realize that education, like everything else, responds to supply and demand.  If students are waking up to the idiocy of taking out $70,000 in debt to pursue a 4-year degree that earns $30,000/year then the price of that degree must come down - a lot, by like more than half - in order to meet the available supply of money!

But back to the central point: Congress enables The Fed's lawless behavior on purpose despite the absolute ability to stop it any time it wants.  It does so because this is how Congress is able to promise you, dear reader, programs that they cannot pay for with current tax revenues.  The error is that Congress seems to think that this can go on basically forever.  It cannot. That's the lesson coming from Europe - validation of my central thesis, that the math always wins and the longer you keep screwing around the worse the damage will be that you must absorb. The only question is whether Congress will stop acting like a two-year old that wants another piece of candy before or after the entire economy and financial system melts into radioactive slag. I'll take the under on that.”

Sunday, November 27, 2011

J. K. Rowling, "The Power..."

“If you choose to use your status and influence to raise your voice on behalf of those who have no voice; if you choose to identify not only with the powerful, but with the powerless; if you retain the ability to imagine yourself into the lives of those who do not have your advantages, then it will not only be your proud families who celebrate your existence, but thousands and millions of people whose reality you have helped change. We do not need magic to change the world, we carry all the power we need inside ourselves already: we have the power to imagine better.”

— J. K. Rowling, Harvard Commencement speech.

"Amazing Race", A Gospel Country Western Song Sung by J. Gale Kilgore in Texas"

Uploaded by on Nov 27, 2011
Hat tip and many thanks to Dan Bloom for this material.

Thomas Traherne, "The Nobility of Man's Soul..."

“It is of the nobility of man's soul that he is insatiable: for he hath a benefactor so prone to give, that he delighteth in us for asking. Do not your inclinations tell you that the WORLD is yours? Do you not covet all? Do you not long to have it; to enjoy it; to overcome it? To what end do men gather riches, but to multiply more? Do they not like Pyrrhus the King of Epire, add house to house and lands to lands, that they may get it all?”
 - Thomas Traherne

Michael Franti, "Hey World (Don't Give Up)"

"A Warning from the Ancestors- Psychopaths in Folklore and Fairy Tales"

"A Warning from the Ancestors-
Psychopaths in Folklore and Fairy Tales"
Thomas Sheridan

"Recently, I received a message from a someone who read "Puzzling People" and they asked me this question: "Why are ALL fairy tales about psychopaths and psychopathic behavior?" Mythology and folklore are really an early form of psychology. In a pre-scientific era - it was the only means by which average people could anchor their frustration and warnings to others regarding the Consciousness Parasites and other pathological predators within the material world - without having to rely exclusively on supernatural-religious concepts such as demons, succubi and so on. This was probably to avoid charges of witchcraft and blasphemy. So rather than deal with purely religious motifs - from around the Middle Ages on - the psychopath entered into the world of children's fairy tale.

Just about all European fairy tales from this period on are about psychopaths and psychopathic behaviour. How to recognise their traits, and deal with them. This is not by accident - a collective folk memory was generated in the guise of children's stories of wicked stepmothers, wolves disguised as kindly and familiar people turning out to be killers. This repository of pathological awareness was essentially the only option available to a mainly illiterate population of the time. A powerful method to warn others in such a way that would be passed on and without risking ridicule and censure - by application of a linguistic folk art to develop changes in the collective consciousness. Ultimately, this is what these fairy tales were attempting to achieve going forward - a warning of sorts. While also serving the function of an allegorical collective therapy session to heal past trauma within a community caused by psychopaths in the past.

An oral tradition retained within the tribal consciousness to keep the community's "spirits up". Their need to go to the trouble of creating a vast and complex canon of fairy tales - shows how people of the past knew they were dealing with something that wasn't fully human. These "uneducated" pre-Freudian folk were acutely aware that the mind contained different levels of awareness. Trauma was not always retained within the ego - but in "another mind" behind it. This also, in a collective senses, was linked to the overall emotional health and safety of the community at large.

Anyone who has ever been personally damaged by a psychopath - in a psychological sense - will freely admit that there is something unearthly about the experience. I myself have spoken to hardcore atheists who used terms such as "demonic" to describe the effects it had on them and how they rationalised the experience. They used terms such as demonic not because they were ignorant, superstitious, or lacked any erudite skills - but because it was all they had left in their intellect to deal with the psychological effects in terms of expressing what had been done to them.

The proliferation of the psychopath in European fairy tales just goes to show how serious the psychopath was taken by our ancestors. More tellingly, in terms of the written word and popular literature - not until the arrival of Bram Stoker's Dracula was the metaphor of the psychopath brought back into the popular consciousness. There wasn't much else in between in this regard.

Increasing levels of literacy among the population as a whole, then became a means whereby the Psychopathic Control Grid could essentially deny their own existence to the mass of the population. Filling their minds and expectations with impossible and doomed love stories and flowery epics. Were heroes unquestioningly sacrifice themselves willingly for the nobility and nation, and the toxic relationship was deemed "romantic". Even today, Robert Hare spending 30 years studying this issue still came up with the term "Intra-Species" predator. If that does not conjure up a folklore image then I don't know what does.”


"Begin doing what you want to do now.
We are not living in eternity.
We have only this moment,
sparkling like a star in our hand-
and melting like a snowflake..."

- Marie Beyon Ray

Chet Raymo, “Of Pumpkins And Velvet Cushions”

 “Of Pumpkins And Velvet Cushions”
by Chet Raymo

"Art is I; science is We," said the great French physician Claude Bernard. Which says a lot in six words. Science is consensus, and because of that it is pretty much confined to the simple. It is no accident that science had its origin in astronomy, describing the motions of mere dots of light across the sky. It took rather longer to bring the experimental method to bear on the human body, say; Bernard was himself a founder of modern experimental medicine. Above all else, science is a way of finding a compelling We. Everyone on the planet is bound together in that We - though medicine and technology - even if some of us scorn science or don't know a molecule from a mastodon.

The We is there to put constraints on the I, to rein in megalomania, to short-circuit the divine rights of kings and the infallibility of popes. The We is there because we cannot live in an anarchy of I's. But every individual life is - or can be - a work of art. The I carries us beyond the simplicities of science. Is it not the We that walks the boundary between knowledge and mystery, but the I. Science takes us to the limits of consensus, but only the I can step through the door into infinity.

I pondered these matters the other day after spending a hour-and-a-half outdoors with Professor Mooney and seven students from her environmental ethics class. We did some We-ing. We talked about Frederick Law Olmsted under the curious gaze of tree swallows. We ran our hands across glacial striae and looked at glacial erratic boulders. For an hour-and-a-half we were a We. But we were also nine I's. On Whale Rock in the deep woods, with sunlight streaming through the trees, we read fragments from Thoreau, who taught us as much as anyone about finding a balance between We and I. He left the woods for as good a reason as he went there, he tells us. He urged us to build castles in the air - and then take care to give them proper foundations.”

"A Look to the Heavens"

“The most distant object easily visible to the eye is M31, the great Andromeda Galaxy some two and a half million light-years away. But without a telescope, even this immense spiral galaxy - spanning over 200,000 light years - appears as a faint, nebulous cloud in the constellation Andromeda. In contrast, details of a bright yellow nucleus and dark winding dust lanes, are revealed in this digital telescopic image. Narrow band image data recording emission from hydrogen atoms, shows off the reddish star-forming regions dotting gorgeous blue spiral arms and young star clusters. 
 Click image for larger size.
While even casual skygazers are now inspired by the knowledge that there are many distant galaxies like M31, astronomers seriously debated this fundamental concept in the 20th century. Were these "spiral nebulae" simply outlying components of our own Milky Way Galaxy or were they instead "island universes" - distant systems of stars comparable to the Milky Way itself? This question was central to the famous Shapley-Curtis debate of 1920, which was later resolved by observations of M31 in favor of Andromeda, island universe.”

Hermann Hesse, "Faith And Doubt..."

“Faith and doubt belong together; 
they govern each other like inhaling and exhaling.”

- Hermann Hesse, "The Glass Bead Game"

The Daily "Near You?"

Mannford, Oklahoma, USA. Thanks for stopping by.

“Study: Guilt May Be A Top Factor In PTSD”

“Study: Guilt May Be A Top Factor In PTSD”
by Gregg Zoroya

"A leading cause of post-traumatic stress disorder is guilt that troops experience because of moral dilemmas faced in combat, according to preliminary findings of a study of active-duty Marines. The conflicts that servicemembers feel may include "survivor's guilt," from living through an attack in which other servicemembers died, and witnessing or participating in the unintentional killing of women or children, researchers involved in the study say. "How do they come to terms with that? They have to forgive themselves for pulling the trigger," says retired Navy captain Bill Nash, a psychiatrist and study co-author.

The idea of "moral injury" as a cause of PTSD is new to psychiatry. The American Psychiatric Association is only now considering new diagnostic criteria for the disorder that would include feelings of shame and guilt, says David Spiegel, a member of the working group rewriting the PTSD section. Traditionally, PTSD symptoms such as nightmares or numbness to the world have been linked to combat violence, fear of being killed or loss of friends. Half of all Iraq and Afghanistan veterans treated by the Department of Veterans Affairs have been diagnosed with mental health issues and the most common is PTSD, which is experienced by nearly 200,000 of these veterans, according to the VA.

PTSD caused by moral injury can lead to more severe reactions such as family violence or even suicide, says Jonathan Shay, a psychiatrist who has worked on military mental health policies. The Marine Corps study helps expand the knowledge of the relationship between moral injury and PTSD, says Shira Maguen, a psychologist and VA researcher who has studied links between killing and the disorder among Vietnam War, Gulf War and Iraq War veterans."This (Marine Corps) study is important because so little work has been done to understand moral injury in a scientific context," Maguen says.

The ongoing research involves about 2,600 Marines and sailors examined before and after combat tours. The preliminary findings on moral injury were gleaned from 208 Marines involved in severe combat in Afghanistan in 2009 and 2010. It showed that three months after coming home, 7% of the Marines likely had PTSD. Their condition was more closely linked to an inner conflict rather than threats to their lives, the sight of bodies or blood or family problems, the study said.”

Pepe Escobar, "That Rocky Road to Damascus"

"That Rocky Road to Damascus"
Pepe Escobar

"The trillion-dollar question in the "Arab Winter" is who will blink first in the West's screenplay of slouching towards Tehran via Damascus. As they examine the regional chessboard and the formidable array of forces aligned against them, Supreme Leader Ayatollah Ali Khamenei and the military dictatorship of the mullahtariat in Tehran must face, simultaneously, superpower Washington, bomb-happy North Atlantic Treaty Organization (NATO) members, nuclear power Israel, all Sunni Arab absolute monarchies, and even Sunni-majority, secular Turkey.

Meanwhile, on their side, the Islamic Republic can only count on Moscow. Not as bad a hand as it may seem. Syria is Iran's undisputed key ally in the Arab world - while Russia, alongside China, are the key geopolitical allies. China, for the moment, is making it clear that any solution for Syria must be negotiated. Russia's one and only naval base in the Mediterranean is at the Syrian port of Tartus. Not by accident, Russia has installed its S-300 air defense system - one of the best all-altitude surface-to-air missile systems in the world, comparable to the American Patriot - in Tartus. The update to the even more sophisticated S-400 system is imminent.

Click image for larger size.

From Moscow's - as well as Tehran's - perspective, regime change in Damascus is a no-no. It will mean virtual expulsion of the Russian and Iranian navies from the Mediterranean. Yet key lateral moves by the West are already on. Diplomats in Brussels confirmed to Asia Times Online that the former Libyan "rebels" - now trying to come up with a credible government - have already given the go-ahead for NATO to build a sprawling military base in Cyrenaica.

NATO has no final say in such matters. This is decided by the boss - the Pentagon - interested in emboldening Africom in coordination with NATO. As many as 20,000 boots are expected to be deployed on the ground in Libya - at least 12,000 of them Europeans. They will be responsible for Libya's "internal security", but also be on alert for possible, further military campaigns targeted at - who else - Syria and Iran.

Bring those Shi'ites down: As much as the latest "coalition of the willing" - which by the way repeats the Libya model - is against the Bashar al-Assad regime in Syria, it also represents a Christian/Sunni war against Shi'ites, be they the Alawite minority in Syria or the Shi'ite majorities in Iran, Iraq and Lebanon. This is part and parcel of the "strategic opportunity" identified by the powerful Israel lobby in Washington; if we strike against the Damascus-Tehran link, we deal a mortal blow to Hezbollah in Lebanon. That, ideologues believe, can now be sold to world public opinion under the cover of the former Arab Spring - now "Arab Winter" after a metamorphosis, before "Arab Summer", into the Arab counter-revolution).

As Tehran sees it, what's really going on regarding Syria is a "humanitarian" cover for a complex anti-Shi'ite and anti-Iran operation. The road map is already clear. A fractious, unrepresentative Syrian National Council - Libya-style - is already in place. Same for a heavily armed Sunni "insurgency" crisscrossing the borders in Lebanon and Turkey. Sanctions are already essentially hurting the Syrian middle class. A relentless, international campaign of vilification of the Assad regime has been deployed. And psy ops abound, with the aim of seducing sections of the Syrian army to defect (it's not working).

A report by a Qatar-based researcher for the International Institute for Strategic Studies (IISS) even comes close to admitting that the self-described "Free Syria Army" is basically a bunch of hardcore Islamists, plus a few genuine army defectors, but mostly radicalized Muslim Brotherhood bought, paid for and weaponized by the US, Israel, the Gulf monarchies and Turkey. There's nothing "pro-democracy" about this lot - as incessantly sold by Western corporate and Saudi-owned media.

As for the National Council, based in Washington and London and sprinkled with the usual dodgy exiles, its program calls for governing Syria alongside the same military that has been - a la the Egyptian military junta - shooting civilian protesters. Makes one think that the only sensible solution would be for the people in Syria to topple the police state Assad regime, while being vehemently against the dodgy Syrian National Council.

This year's model (dictator): Then there's the usually misguided and misinformed West, which believes that the Arab League - now no more than a puppet of US foreign policy - is siding with the democratic aspirations of the Syrian people. Angry Arab blogger As'ad Abu Khalil is correct when he says that after the fall of president Hosni Mubarak in Egypt, "the League is now an extension of the Gulf Cooperation Council [GCC]". The GCC is in fact the Gulf Counter-revolution Club. Their favorite sport is to privilege "model" dictators - starting with themselves, but also including Ali Abdullah Saleh in Yemen and the little kings of Jordan and Morocco, who will be annexed to the GCC because they wish they were in the Persian Gulf (geography dictates they aren't). On the other hand, the GCC abhors "bad" dictators - the snuffed-out Muammar Gaddafi and Assad, who not by accident are from secular republics.

The House of Saud, Jordan and rising Qatar are more than comfortable doing the US's and Israel's bidding. The House of Saud - the GCC's top dog - invaded Bahrain with 1,500 troops to smash pro-democracy protests very much like the ones in Egypt and Syria. The House of Saud helped the ruling, Sunni al-Khalifa dynasty in 70% Shi'ite Bahrain to conduct widespread torture; Bahrainis confirm that everyone tortured was forced to confess direct links with "evil" Tehran. In Egypt, the House of Saud supported Mubarak even after he was deposed. Now it supports - with over US$4 billion so far - a military junta that basically wants to keep power, unchecked, over a "democratic" facade.

The House of Saud couldn't possibly coexist with a successful, democratic Egypt. Anyone believing the House of Saud's claim to defend human rights and democracy in the Middle East should check into an asylum. The Arab League - also a House of Saud extension - gave a green card to NATO to bomb a member state. It suspended Syria on November 12 - as it had done with Libya on February 22 - because, unlike in Libya, US and European designs in the United Nations Security Council were duly vetoed by Russia and China.

Welcome to a "new" Arab League where if you don't prostrate in front of the GCC altar, you're condemned to regime change. Worshipping the GCC can't compare to worshipping the Pentagon and NATO. Jordan and Morocco are members of NATO's Mediterranean dialogue, and Qatar and the United Arab Emirates (UAE) are members of NATO's Istanbul Cooperation Initiative. In addition, Jordan and the UAE are the only Arabic Troop Contributing Nations for NATO in Afghanistan.

Ivo Daalder, the Obama administration's ambassador to NATO, has already ordered Libya to enter the Mediterranean Dialogue, alongside Morocco, Jordan, Egypt, Tunisia, Algeria, Mauritania and Israel. And early this month he told the Atlantic Council what's needed for an attack on Syria; an "urgent necessity" (such as giving the impression Assad is going to raze Homs to the ground); "regional support" (that will come in a flash from the GCC/Arab League); and a UN mandate (it won't happen, as Russia and China had made it clear). So one may expect exactly that from the "coalition of the willing"; some black ops blamed on the Assad regime; immediate support from GCC/Arab League; and probably unilateral action, because via the UN is a no-no.

The Greater Middle East dream: No wonder some sound minds in Damascus, watching the tea leaves, decided to take some action. Damascus did send secret couriers to sound out Washington's mood. The price to be left alone; to cut all ties with Tehran, for good. The Assad regime was left wondering what would they get in return. The Alawites, roughly 12% of the population and members of the ruling elite, won't desert the Assad regime. Christians and Druze expect only the worst from a possible, hardcore, Muslim Brotherhood-dominated new order. Same for a crucial neighbor, the Nuri al-Maliki government in Baghdad.

Russia knows that if the current Libyan model is reproduced in Syria - and with Lebanon already under a de facto NATO blockade - the Mediterranean will indeed become that dream, a NATO lake, which is code for total US control. Moscow also sees that in the US-conceived Greater Middle East - and talk about "great", spanning from Mauritania to Kazakhstan - the only countries that are not linked with NATO through myriad "partnerships" are, apart from Syria: Lebanon, Eritrea, Sudan and Iran.

As for the Pentagon, the name of the game is "repositioning". As in if you leave Iraq you go somewhere else in the "arc of instability", preferably the Gulf. There are 40,000 US troops already in the Gulf - 23,000 of them in Kuwait. A secret army for the Pentagon and the Central Intelligence Agency is being trained by former Blackwater, "repositioned" as Xe, in the UAE. A NATO of the Gulf is being born. NATOGCC, anyone? When the US neo-conservatives ruled the universe - that was only a few years ago - the motto was "Real men go to Tehran". An update is in order. Call it "Real men go to Tehran via Damascus only if they have the balls to stare down Moscow".
- http://www.sott.net/

"How It Really Is"

"Horrible Bosses, Pitchforks & Torches"

"Horrible Bosses, Pitchforks & Torches"
By: D Sherman Okst

"If you haven’t seen the movie “Horrible Bosses” I’d recommend that you do. Please see it. Go enjoy yourself. As bad as things are getting it is incredible to realize that we can still laugh. And trust me, you’ll laugh hard at this movie. When I left the theater with my wife, I realized why it was that movie theaters did well in the last Great Depression. For an hour and forty minutes we escaped all the negativity that has crept into this world. It had a long lasting effect. For at least a week I was in a good mood.

The movie “Horrible Bosses” is comprised of a few character types: The ‘Psycho’, the ‘Maneater’ and the ‘Tool.’ Three friends come to the realization that their lives are miserable because of them. They like their jobs, they hate their bosses. One friend, Dale used a playground, near the bar he frequented, as a late night urinal. He was arrested for indecent exposure. This got him the tile of "registered sex offender"—for what he claims was entrapment, (putting a playground adjacent to a bar). The irony is that his boss, Dr. Julia is a ‘manteater,’ the one the cops should have arrested. Bottom line—he’s not marketable. Then we have Dave who works for a financial psycho who threatens to expose him to future employers for having a drinking problem—a problem that he really doesn’t have. Another non-marketable, stuck in his job for life worker.

Friend number three is Kurt. The owner of Kurt’s place of employment dies suddenly. This leaves the owners kid, ‘Bobby-the-Tool-Coke-Head’ as Kurt’s new boss. With the economy being what it isn’t, Kurt is also stuck at his job. So the three come to the realization that their lives can only get better if they each kill their friend's boss. They hire MF Jones as their murder consultant . He got the name MF because when he was a kid he stole from his mother's purse and it really “set her back.”

The Psychopaths Have Crossed the Line: As I knock out my book “Where Psychopaths & Economics Meet,” I’ve resolved myself to not write “too many” articles. But, Gerald Celente is one of us. He’s one of the economic bloggers. One of the good guys. The ones out there reading good and spreading good in a world ruled by evil. Our world has been taken over by three bad bosses: Political Capture, Economic Capture and Mainstream Media Capture. A sequel to "Horrible Bosses" is about to be written. Sadly I don't think it'll be a comedy.

A depression created by psychopaths. I was just a college drop-in. My wife just got her degree. Twelve years of slogging through classes. I read most of her books along the way. When I wasn't tutoring her in computer programming she was teaching me. I don’t recall the philosopher, but one said something to the effect: “Names aren’t coincidental.” When the Madoff scandal broke we laughed about his name, “made-off,” as in I made-off with your money. As my favorite author, the late Kurt Vonnegut would say, “someone should look into this.”

Celente got taken by MF Global. When I told my wife the story over coffee this morning she laughingly said, “MF as in Mother-F(again, I’ll let you fill in the blanks here)r Global. Hey, just like the movie “Horrible Bosses” and MotherF(ehem)r Jones.” Even the name Jon is a tipoff. I don’t trust people who spell their names like they are better than the rest of us, and Corzine I first misread as Conman somehow. Can you spot the two criminals in this lineup? So here we have 7,000 clients who got MF’d out of some $800,000,000 and Jon is walking around a free man. Let’s not mince words here, Jon is Obama’s top Wall Street Fundraiser.

Pitchforks and Torches: In 2004 we downsized. By 2007 our new house was complete. We literally built it ourselves. I didn’t use the cheapest materials. The house is very sound, 2 x 6 walls, heavier sheathing on the roof, the silent floor system, low-e windows, stone and HardiPlank all on top of a poured concrete foundation. The circa mid-2000 appliances we got are made like junk—and we didn’t buy the cheapest ones. I’ve decided not to let this “slip.” My Jihad these days has been accountability.

The well guy put a computer in that sounds like one of the turbine engines on the planes I used to fly. He claims he did this to save me $300 dollars in electrical wire. I’m still trying to get his Bernanke math. I paid $2,000 bucks for this computer to save $300 bucks in wire. I must be a moron because losing $1,700 dollars doesn’t sound like a savings to me? Of course this computer turns the 3.5 horsepower, electric power guzzling, well pump on every time we so much as flush a toilet, and pushing age 50 we seem to do that a lot more often. As a result our downsizing to a smaller home hasn’t downsized our electric bill. But I "saved" 300 bucks in wire. I've got that going for me.

The stove has a broken knob. Turning on various burners is like playing musical knobs. Puts my wife in a great mood. The oven door has to be screwed back together, it only separates when the oven is hot. Using a screwdriver with oven mitts on drives me bat(ehm) crazy. The dishwasher racks had their track “stoppers” fall out, so now the racks fall out the tracks and we get to pick up glass. The ice-maker in the fridge has to be manually turned on and off or ice goes all over the packed freezer. When we use the door dispenser we get more ice on the floor than in our glasses.

The gate opener outside has been replaced 12 times, and is ready again for a new computer board. The intercom by the gate stopped working — I’m not replacing it, I’m not social. It’s one reason I have an 8,400 volt electric fence, the other is I like keeping my garbage outside and I don’t like bears messing with it or eating it. Some poor son of a gun out west shot a bear because he was worried about his kids outside and the police charged him. More governmental insanity that we pay for.

There is something in Celente’s voice. I’m not the only one who hears it. It reminds me of flying in weather, the times we got so close while deviating between cells that I could hear the thunder over the planes engines. Kunstler hears it too. Jim—another good guy—wrote today about Celente’s getting taken by MF Global, “I heard him [Gerald] fulminating over it on a podcast and he is not somebody I’d want to be on the bad side of.” Last week the wood stove manufacturer’s CEO and president heard my thunder. This week they buy their stove back and we put a more expensive one in.

I’m done dealing with morons and through with being robbed blind. It's bad enough inflation rips us off, but to be forced into buying lifetime warrenties which cost as much as the product that you're buying, or having to replace what you just bought a year ago is criminal. Things should not come down to pitchforks and torches—but they are quickly coming to that. It isn’t a pleasant fix but when the authorities think that it is permissible for someone to steal $800 million from 7,000 customers and nothing is immediatly done about it then it is proof that they have—once again—failed us. If you can backstop Wall Street you better backstop those ripped off by them—and this time, go liquidate their assets to pay it back. K-Street of course won’t tolerate that, and that’s who really pays our horrible bosses we call politicians. (Ron Paul and a few other good eggs excluded).

What happened to Celente and 7,000 other Celentes is no different from the cops who beat the ex-war vet protester until his spleen ruptured; or pepper sprayed those two little girls; or shot a kid in the head with teargas canisters and then, while lying helplessly on the ground in a puddle of his own blood, proceed to lob a flash grenade at him and those helping him. Sick! Like I told the stove compnay—Nice job champs!

Americans have been very tolerant. We’ve handed money over for Wall Street bonuses rewarding the psychopaths who blew up our economy and created 23.9% unemployment (the real undistorted employment rate). We’ve watched silently as Bernanke lied to us about the banks being fixed—as if we’re too stupid to know that FASB is now just legalized Enron accounting. We’ve rolled our eyes and bitten our tongues when some of the psychopaths later professed to be, “Doing God’s work." We’ve watched our kids get molested by perverts hired off adds on pizza boxes, had our wives breasts exposed during these idiotic searches and ourselves been exposed to radiation while in naked body scanners that could be used in the oncology departments of hospitals.

I seriously suspect that people have had enough and that it won’t be long before they break out the pitchforks and torches. Throughout history we’ve read about times when citizens were forced to resort to violence in order to restore law and order. Ironic—if you really think about it. I seriously suspect we are about to witness this first hand—pitchforks and torches. Right now I’m just entirely ecstatic that my name isn’t Jon Corzine. Like Kuntsler says, ‘Celente isn’t someone that I’d want to be on the bad side of. If tomorrow I open up my RSS reader and see one of those 7,000 screwed by Mother F#r Global holding a pitchfork with Corzine’s head on it I won’t be surprised.'"
D. Sherman Okst, Bernardston MA USA, davossherman @ gmail.com. I'm an ex-airline captain with about 15,000 hours and am amazed at all the BS we are taught. Most of my friends still in the business were also taught the wrong aerodynamic principles with respect to what makes planes fly. Aviation or economics, Keynes to Austrian - Bernulli to Newton we've been sold bad goods. It's amazing anything works as backwards as we do things.

"Congress to Vote Next Week on EXPLICITLY Creating a Police State"

Saturday, November 26, 2011

Kofi Annan, "Choices..."

“To live is to choose. But to choose well, you must know who you are and
what you stand for, where you want to go and why you want to get there.”

 - Kofi Annan

Karl Denninger, "The Great Swindle (From Both Right and Left)"

"The Great Swindle (From Both Right and Left)"
by Karl Denninger

“Comes now this morning into my email notification that The Daily Bell has not only ripped off my commentary and opined upon it (legitimate) they further attributed it to CNBC (not kosher folks.) But let's examine their opinion a bit, shall we?
Dominant Social Theme: By expanding the regulatory state, we can make things better.
Free-Market Analysis: One of the main emergent US dominant social themes is that the government and regulators must step in to clean up the market and make it safe for investors. The idea is that the larger modern marketplace is very necessary for the functioning of modern society and that one must "clean up fraud" so that people will "trust" the market again. This meme is being enunciated aggressively all over the place lately, and we have done our best to point it out. It is based on a misapprehension and is placing good people into rhetorical boxes where they decry modern finance but turn to the US's penitentiary-industrial complex for solutions. Here's more from the article excerpted above:

Uh, no. Expand the regulatory state?  How about we actually enforce the laws that already exist?  And for those that are not laws but written as laws, how about if we either turn them into actual laws (instead of lying about what they are) or repeal them so that nobody thinks they're a law when they are not?

It is against the law, for example, to swindle people.  It's a crime.  And as I pointed out here, the Right side of the aisle, including the Tea Party, refuses to address the fact that our nation's largest financial institutions are serial violators of the law to the point that nearly all would have committed their "third strike" and be disbanded (the equivalent to life imprisonment) by now. There is no shortage of laws under which to actually prosecute.  The Daily Bell goes on to sling around the common mud of "fiat funny money" and allege that but for The Fed there would be no problem at all.  This, however, is a lie, for two simple reasons:

   1. The Fed is already constrained in what it can do - it has a mandate for stable prices (that is, zero inflation) that it has serially and repeatedly violated for its entire 100 year history, even prior to the implementation of the so-called "dual mandate", and yet there has been no enforcement.  Why not?  There is no punishment called out in that law, just as there is no punishment called out in the former enabling law for the OTS and thus "backdating" deposits by IndyMac bank didn't lead to a criminal indictment against either IndyMac or the so-called "regulator" who did it.  A "law" or "regulation" without a punishment for violations is no law or regulation at all - it is a mere suggestion.  As such these so-called "laws" are nothing more than sops for the fools at places like The Daily Bell who love to point to all these "laws" and then claim that "more regulation" is futile.  That would be true if those were actual ineffectual laws but due to the lack of a punishment clause they stand as nothing more than blank pieces of paper.

   2. The proffered solution, free market currencies, is just another sop to idiocy.  Government will always denominate its current taxes due in something.  Whatever that something is will be the defacto currency of the nation and will be the majority -- by far -- currency that is used for transactions.  The "why" is simple: Nobody in their right mind wants to wake up some morning and find that their currency du jour has been devalued by some sort of debauchery and their taxes due but not yet paid have suddenly doubled or more, instantly bankrupting them.  The simplest and "zero cost" way to hedge against such an event is to transact in the currency you pay your taxes in.  Sorry folks, but logic resolves this conflict and it doesn't go where the Paulites would like; you must employ magical thinking to get to their claimed nirvana.

Indeed, the problem with the "free market" currency solution is that if you do not resolve the actual problem - the lack of The Rule of Law (that is, #1) so-called "free market" people will intentionally create the situation in #2 and get away with it! That, incidentally, is the history of monetary systems going all the way back to the American Revolution and beyond.  Indeed if you look at historical inflation rates prior to The Fed you will find ridiculous changes in the valuation of the currency over very short periods of time.  10, 20, even 30% swings in valuation were common.  If you happen to believe that the fact that over the long haul the "more or less stable value" was preferable to what we have today you're cherry-picking your timeline -- get it wrong by a year or so and you'd either have made a bundle or been bankrupted.

Unfortunately life doesn't work this way; you fall in love, you get sick, you get well, you find a job, you lose a job, your roof leaks, you get hit by a bus and you die all on a very unpredictable timeline.  But those who pull the strings through government are more than happy to use your series of unfortunate events to screw you blind and steal everything you have - and absent The Rule of Law, they will.

Our latest little corruption was sent to me here, from the Fed weekly balance sheet:

Click image for larger size.

Where did that $45 billion go?  Oh, in the nice catch-all bucket called "Other", right?  What's in "Other"? Let's see.... the GSEs are in there (Fannie/Freddie), the IMF is in there, the UN is in there, a lot of things are in there.  So which "other" was this and why wasn't it identified with specificity?  Oh that's simple: There is no rule of law when it comes to Fed operations as there is no "or else" to be found anywhere in the Federal Reserve Act of 1913, as amended. Thus The Fed could "decide" that Fannie and Freddie paper was "ok" to buy, even though the black letter of the law says otherwise.  They could point to their own "interpretation" and since there was no "or else", if they interpreted wrong, even intentionally wrong, there was no cost to them personally that could be imposed.  Ditto for "Maiden Lane" and their other machinations. In this case it appears they bailed out someone yet didn't tell us who it was.  Gee, with all the turmoil in the markets you can't find someone who needed to be bailed out, can you? :-)

Those who argue for "End The Fed" have yet to reconcile the fundamental nature of the problem: It is not The Fed that is the issue, it is the presence of so-called "laws" with no penalty for non-compliance that is where the problem resides. In point of fact The Fed's actual mandate for stable prices is exactly correct.  Followed to the letter we have no debasement of the currency over time, no inflation, and you can save a mere 7% of your income - if your Social Security taxes were then to be merely returned to you in retirement along with that 7% you would have an effective 20% saving rate for retirement and would need exactly nothing beyond that for a reasonable retirement lifestyle similar to that of your working years!  If you saved nothing you would still have a 13% saving rate and we would meet the mandate of the "social safety net" allegedly to be provided.

If the "law" had actually been followed there would have been no ramp in credit compared to GDP because it could not have been funded.  There would have been no Internet bubble, no Housing bubble and no crash.  House prices never would have gone materially over 2x incomes and likely would be between 1x and 2x.  Medical and college costs would be what they were then.  Wages would have risen with productivity but not beyond, and you would have kept that standard of living increase instead of having it stolen by the vipers of Wall Street and the Capitol.  Jobs would not have been offshored and there would have been no incentive to hire illegal aliens and displace American workers.

So why didn't it happen this way?  That's easy: There is no "or else" in these so-called "laws." Ending The Fed will do exactly nothing without fixing this problem.  Competing currencies will do nothing without fixing this problem.  In point of fact essentially every current economic issue we face is found, at some point, in this singular premise. Those who continue to beat on the "End The Fed", "Competing Currencies" and other similar-sounding drums are either missing the mark because they fail to analyze the problem or worse, they're shilling for those who are looking for yet another way to rob you blind when the current scam, which is about to collapse, comes down around their ears. Don't fall for it."