Killing Savings+Boosting Spending=Bankruptcy

January 24, 2008

Elaine Meinel Supkis

The Plunge Protection Team has finally openly revealed themselves. Unsurprisingly, they are the private bankers of the Federal Reserve which is neither Federal nor protects reserves. Savers, as always, are being raided in order to increase debtors and deadbeats. Believing there is a global savings glut, our government is gutting the savings of Americans to expand the 72% consumer buying economy of America. And we buy foreign goods and this increases the FOREX reserves and SWF of nations we fear or hate or think are our allies depending upon our own whims. So we want them to tell us what their plans are. HAHAHA. I know their plans but no one listens to me.

First, before we go into today's amazing news, I want to explain how we are in a massive transfer of wealth from savers to spenders. In the USA, the impulse to encourage spending is totally out of control. The consumer side of the GNP has ballooned to over 72% and is climbing with inflation. When it hits 100% of our economy, we see this economy go bankrupt from top to bottom. Instead of viewing these statistics as meaningless or unimportant, it is one of the most important of them all.

Readers wonder if I ever tire of being a pessimist. I am actually an optimist. When my husband was poisoned at work in 1994, he came out of the emergency room feeling just fine. We worried about his lungs but not much else. 'I'll be out of work for six weeks and then I can go back into the dark room again,' he said, cheerfully.

Just to be on the safe side, he got a book about poisoning photographers. He could barely read it because it scared him. I read it carefully. One thing it said was that photographers have a higher suicide rate due to chemical poisoning. My husband said, 'Hey, my predecessor at the museum committed suicide! This is how I got his position.' My hair stood on end, so to speak. My husband was the most cheerful guy on earth.

Within weeks of his poison episode, he was alternately in a rage or suicidal. We had to put him in the hospital and then we had to go to court to get workman's compensation, sue the museum for poisoning him and get social security disability. At one hearing, the court said, 'Why can't your husband work?'

I said, 'It is awfully hard to hold a job if you are in a psycho ward.'

These trials took years and years. The first week of this nightmare, I cried for about an hour. Then I shoved it all aside and began to plan our financial futures. We had to use up all our savings if we wanted to save our property. I was in the middle of building the house we now live in and I figured, I would have to suspend work until we won. So we lived in this tent complex nearby the main house while all this was going on, year after year. We raised our son and I cared for a badly damaged husband in a tent on a mountain in the north where it snows. I had to go out with the sled dog and a sled in winter to saw up trees and burn them for heat. I had to dig through garbage dumps for clothing or things to make our tent complex work.

I grew a lot of our food, made everything from scratch. I went out with a gun to kill animals in winter, skin and gut them. I carried my husband through all this the hard, hard way and raised our son with no electricity except for our solar panel which charged some batteries which I used for lights at night. Three light bulbs worth. My son grew up listening to books which I read him at night, we plowed through many books. We played chess and Go. And cards. And made up games like 'Crater Your Neighbor', a WWI game my son and I devised after reading the memoirs of an ace fighter pilot in that war.

The point here is, life is living and living is loving and money has NOTHING to do with this in the end. I kept my husband from killing himself while we lived in terrible poverty, I could not work because just within one month of his illness, I was getting frantic calls daily from my son, asking me to stop my husband from killing himself. Now, he is no longer in such terrible condition thanks to therapy and drugs. But the gist of this story is, I actually had a wonderful time in the end, we pulled through together, the bonds made during this struggle for survival made my son a much better adult, and it made our marriage stronger, not weaker.

This was because I don't believe money matters in the end. This peculiarity is why it doesn't make me happy or sad depending on the level of money in my life. I like more money but I won't cry over spilt milk. I save that for tears shed for loved ones. I will cry over the loss of a lamb but not over the loss of a dollar.

Today, I got a call from someone who 'lost' money in stocks and was now happy that the 'money' was back and thought the Fed was a hero to 'save' his 'money.' I was aghast. 'Do you realize, this means your SAVINGS will be losing money compared to inflation? Do you realize that you can't buy more stocks because they are being artificially inflated due to the Fed raiding your savings accounts?' I asked him.

He said, 'But my stocks are WORTH MORE again!' This is psychological. He isn't a day or even a year trader. He is a saver. Who has lots of bonds and when he buys stocks, he HOLDS. For half a century or more. Since he NEVER sells, he should have NO interest in how high they go except if they go high, he can't buy as many as when low. In fact, his blue chip stocks all pay high dividends. This is very good. They pay high dividends because they want people like him to hold their stocks and not sell on downturns. So he holds them.

On top of this, he buys new stocks with the dividends so stocks in companies he worked for in the past [all top companies] that gave him stock years ago, grow in size to a considerable size since he is living a long, long time. So when his stocks fall in price, he gets MORE. Indeed, on top of this, each one brings in the same dividend. So as they grow in number, the amount of money pouring into this grows even faster. So he is on a steep climb...upwards! This is very good investing.

But he is crying over the loss of wealth that was hurting him! Why is this?

It is TV and the media hammering him with unhappy faces when stocks drop and then celebrating when they rise! He is addicted to this news. On top of this, the people on TV give very bad advice which is why I will never be on TV. They let the bears go on TV so long as they only scare people. Telling people the secret to wealth without harsh risk and stomach ulcers is to buy and hold blue chip stocks that pay high dividends and then to turn the dividends into more stocks paying high dividends. This gentleman has a fine financial advisor who says what I just said here. This is why the money is growing.

But this doesn't bring happiness. I watched people rejoice as their properties that have no debts on them like mine, would shoot up in value. 'We have a house now worth $500,000,' gloats my neighbors and relatives.

Me: 'Your taxes and overhead will now shoot up. Only if you are selling it, does the price matter. Then, you will be forced to pay a high price for another house anyway so there is less profit than you think.'

Well, as prices retreat, taxes stay high. Hello, everyone! The mirage of wealth was FAKE. On top of all this, the dropping of interest rates means the last few savers in America who buy CDs will be hammered. I hated the 1% interest regime. The return on my savings which I put aside all year long to pay the high taxes on my over-valued property earn virtually no return! This angers me a lot which is why I talk about savings a lot. And America has ceased saving. Since the vast majority don't save for annual taxes, the funds being taken all year long out of their mortgage deals, they are unaware of the need for a good return on savings! Ergo: they don't worry a minute if the Federal Reserve raids my bank account to float the mountain of debts we are accumulating.

Savers are also being hammered by investors using 'leverage' to buy speculative stocks or play the Japanese carry trade game. They have inflated everything from property values to stocks this way. If I were a trader using loans to play games, I would want 0% interest rates on savings. But the entire system needs at least 10% savings to work. Our savings rate is well below -10% which is now 20% too low and thus, we are having a banking crisis. The Fed drops are not curing the banking crisis which is a crisis of savings, nay they actually pretend there is a savings GLUT!

Only it isn't here in the US. It is in Asia. And Asia's glut is in the news all over the place. And the Fed solution makes this MUCH MUCH WORSE. This insane plan is designed only to make the rich richer at the expense of our entire system of saving money which has been thrown out the window in favor of increasing debt and increasing speculative futures trading! A total disaster for our nation.

Biting the hand that feeds you:

Wealth Funds Hear Disclosure Warning in Davos Meeting

Leaders of world finance told the holders of $2.5 trillion in sovereign wealth funds that they need to reveal more about their activities or risk further antagonizing American politicians.

In a meeting in Davos, Switzerland, that included chief executive officers James Dimon of JPMorgan Chase & Co., Lloyd Blankfein of Goldman Sachs Group Inc., John Mack of Morgan Stanley and Stephen Schwarzman of Blackstone Group LP, representatives of government-controlled investment funds from Kuwait, Saudi Arabia, Malaysia, Russia and South Korea heard that ``Washington'' would demand more disclosure if they didn't provide it, according to a person who was in the room.

The session yesterday at the World Economic Forum was closed to the press and public. The funds have invested at least $59 billion in the past year to shore up the balance sheets of such Wall Street banks as Citigroup Inc., the biggest U.S. bank, and Merrill Lynch & Co., prompting U.S. legislators to call for them to show more openness.

``We were talking to trillions and trillions of dollars in sovereign wealth funds,'' said Rahul Bajaj, chairman of Bajaj Auto Ltd., India's second-largest motorcycle maker. He said that when the U.S. banks asked for ``more transparency, the Middle East said, `What do we need that for?'''

The US and Europe don't need to have China, Russia and the Arabs tell them their plans. I know the Chinese plan and I can guess the Russian plan and I certainly know the Arab strategy. It is very simple: they intend to put us in their control! The entire reason for everything happening is, they all hope to either bankrupt us or own all our financial and manufacturing systems as well as put us in debt to them so we have to obey them or if we defy them, we go bankrupt and they still win in the end since our navy cannot sail the seven seas and menace the world if it can't sail due to no money. This is what killed the Spanish Main. This is what sunk the Sun That Never Sets. This is what ancient Rome discovered when no more grain ships came from Egypt.

If we don't want this fate, we have to expand renewable and nuclear energy systems by about 100X over. We have to stop consumer spending and direct it towards changing how energy is created. We have to severely tax gasoline so gas guzzlers vanish. We have to put up trade barriers to importers so we can rebuild our industrial base again. We are in grave danger here. US corporations outsourcing jobs should be heavily taxed! The exact opposite of 'globalization' must commence immediately. The very rich can pay for all this by being taxed. If they hate our taxes, they can all move to the Cayman Islands and we can then declare their finances to be illegal since it comes from a hostile off shore nation that refuses to let us tax these guys.

Of course, this means changing the way money flows, the world will go into a tailspin since the present system is predicated on the US over-consuming world resources and we can no longer afford to do this. We could do this but it means IN THE FUTURE, we all get to wear dog collars and bark on command. If Americans want to be slaves, then have fun! You all won't like this because the new masters will put us on a diet when this happens and our consumption of world resources will be reduced drastically anyway. But with a difference: we will be slaves. Right now, we have a chance of avoiding that fate while still reducing our planetary consumption.

Rate Cut a `Sad Testament'

Bill Gross, manager of the world's biggest bond fund, said the Federal Reserve's emergency cut in borrowing costs today is a ``sad testament'' to the state of the U.S. economy.
*snip*
``We need a fed funds level at 2.5 percent to 3 percent,'' Gross said. ``The sooner the better.''

Look at this! Gross thinks our condition is 'sad' but what is the cure? KILL THE SAVERS! Then all will be what? Will we be saving more money next year? Will then negative savings rate switch to savings? No? I sigh with disgust. This man never mentions protecting my savings because Gross is grossly over compensated in this stupid economy that is destroying my savings and destroying my nation. He wants 0% interest on savings so he can steal my money and use it to buy more speculative commodities, stocks and bonds of other nations. He wants me to die so he can grow grossly fat on my wealth. The only way I can tap into this wealth is to go into debt and gamble.

Bear Stearns: The Fed Will Cut Rates AGAIN Next Week

All the wild gambling houses want those rate cuts. The Fed listens to them, not me. Many people are angry with Volker's rate hikes back when Carter was begging us to switch to alternative energy and to please turn down the thermostats and to increase savings. We hated this message. Volker backed this up by raising rates until even the pirates wanted to save money in banks in the old fashioned way. This killed inflation! And about time! It was nearing warp speed there for a while. The gold speculators howled with rage but Volker saved our economy. Then Reagan came in promising easy money, easy times and off we went, on the same track we are on today: rising inflation, higher budget deficits and much higher trade deficits.

Soros predicts worst recession for 50 years

Soros likes to tell it as it is. But he doesn't offer a sane solution. He, too, want 0% interest rates in America. This way, he can speculate endlessly and not spend a penny of his own considerable wealth much of which is parked outside the US. The parts parked here are 'bad' parts which I call 'weeds.' He wants more fertilizer for these weeds that are chocking out our real capitalist base which happens to be our industrial base!

Builders, Banks Could Get Tax Break

President Bush and lawmakers from both parties aim to quickly inject capital into the economy, which has been hit hard by turmoil in the housing and credit markets, by extending the timeframe under which companies are allowed to retroactively deduct net operating losses against earlier profits.

It would be the second time in recent history that the government has amended this accounting tool, known as a "tax loss carryback," to stimulate the economy in the face of a recession.

All the cures being peddled is for our government to take over speculative systems and protect them all from losses. Doing this increases government debt. We have great government debt which has grown in good times and bad and is heading rapidly towards $10 trillion. In contrast, when Reagan attacked Carter over government debts, is as only $1 trillion. Imagine that. This was a mere 25 years ago. The year my son was born. This is pure craziness. Normally, we run a surplus in good times and spend only in bad times. The economy has 'boomed' several times since 1982 and we have had a series of housing and stock market bubbles and throughout all of this with one year's exception which was at the top of the Dot Com bubble, we have run in the red. All the cures this week are raids on our future and raids on our savings accounts. None of them address any of the problems.

I have speculated in real estate. And made and lost money! And NEVER did I expect the government to give me my losses back or to support me when I failed. I do expect them to protect my husband who was injured at work, for example. But protect my capitalist profits?

NEVER! The builders who are now weeping for money are speculators. They hired oodles of illegal aliens. They did all sorts of goofy things like build lousy houses with chip board [ugh!] and built in irresponsible places like on earthquake fault lines. They have done many goofy things including overbuilding in inappropriate places and now they will vanish and be replaced by new builders. But they want to keep on going so if they destroy AMERICA in order to keep in business, they don't care. They are no longer builders in my own books, they are DESTROYERS.

U.S. may have tough medicine to swallow if economic relief efforts don't work

In the 1990s, when Latin America and Asia were rocked by financial crises, U.S. officials were quick with advice: Don't bail out bad banks. Don't intervene when stock market and real estate bubbles pop. Let your overblown economies shrink to their natural levels.

"It was all, 'You've got to be tough and take your castor oil,' " said Joseph Stiglitz, a Nobel Prize-winning economist.

To date, U.S. officials haven't followed their own advice. They have tried to aid troubled banks, slashed interest rates to help the housing and stock markets and made it clear that they will go to almost any lengths to keep the economy out of recession.

We are not only parasites, we are hypocrites. The whole world knows this. No one admires a hypocrite or wants a parasite as a friend. We should pay attention to this fact and cease being both. We can't do this because we want to be both! So we will demand all SWF follow our orders as we beg them for money. We will leave our front door open to invasive imports and terrorists while pretending to be protecting America. And we will invade and terrorize the world in return. This goofy internationalism is destroying our reputations, eating up our finances and wrecking our infrastructure. This has a bad ending. Dropping rates to go deeper into debt only makes all this much worse.

U.S. Notes Fall After Fed Rate Cut Sends Asian Stocks Higher

Treasury notes fell, trimming the biggest gain in two-year securities since 2001, as the Federal Reserve's surprise interest-rate cut eased concern the economy will slide into recession and caused Asian stocks to rally.

When Japan is happy we should be very alarmed. This country is the exact opposite of our own. They go out of their way to strangle consumer spending. Note that the Japanese consumer has NO benefit from .5% loans. None. This is deliberate. They are not buying American goods, either. This novel way of preventing trade should be hammered on by the US but isn't because our speculators use the Japanese carry trade to play the markets. So they love this dynamic.

Banks, New York Regulator Meet on Bond Insurer Rescue

New capital may help preserve the top credit ratings for the bond guarantors such as MBIA, the industry's largest, and halt any erosion of investor confidence in the $2.4 trillion of assets they guarantee. Ambac, MBIA's biggest rival, lost its AAA grade from Fitch Ratings this month on concerns that losses tied to subprime mortgages may increase.

``The market is obviously viewing it as positive news,'' said Kathleen Shanley, an analyst with bond research firm Gimme Credit LLC in Chicago. ``Shareholders and holding company creditors should keep in mind, however, that the insurance department's primary mandate is to protect policyholders, not to boost the share price.''

At all levels, as our systems collapse due to lack of savings, the government is stepping in to guarantee capitalist systems operate. This is pure Stalinism. The security state overspending on military stuff making all the other systems run via confiscation of funds. Not through taxes alone but through confiscating personal PROFITS which used to be called 'savings'. Why have MBIA or Ambac? Why not make this a government agency? HAHAHA. Ditto, the Federal Reserve. Why have it private, too? And this is the same group of clowns screaming for 'privatization'! Remember that? Where business is smarter and more efficient than the government?

The privatized the parts that should be public like roads, water and infrastructure while doing the opposite for things like guaranteeing mortgages and bank accounts as well as all other financial systems the pirates want to loot! Gads! Talk about insane. The military/industrial complex is private and so is increasingly, our security systems WHILE the capitalist parts that are supposed to be private are being turned in to government agencies....rich irony, isn't it? This is pure fascism.

Seeing Signs of ‘Systemic Failure’

“This is not a normal crisis,” George Soros, the hedge fund pioneer turned philosopher, said today to a group of reporters he had invited to lunch at the World Economic Forum. “It is the end of an era.”

It was the “era of superleverage,” he said, and regulators have not appreciated how serious it is. “Systemic failure,” he said, may be taking place.

Mr. Soros has been overly alarmed before, notably a decade ago during the Asian financial crisis, and he readily admitted Wednesday that he might be wrong. Despite his talk of systemic risk, he said, “I’m not predicting the collapse of the financial system.” But he still thinks regulators should send in the auditors to the big banks that are deemed “too big to fail,” and then give them bills of health.

What is needed, he said, is “assurance that the main market makers will not be allowed to fail.”

Again, Soros says sensible things and then ends with a demand for more Stalinist fascism! The main market makers SHOULD fail! They are FAILURES! Proof of this is...they are failing. Why should they be rescued? They should be arrested! For treason, if not also fraud and insider trading. Davos is all about insiders trading INFORMATION and then using it to make themselves richer. They are working to make interlocking monopolies and cartels so they can steal more money from us. They are trying to turn us into slaves, not free us.

And they want government protection if they make mistakes and their schemes they devise turn around and bite them in the assets.

No Recession Expected This Year: Congressional Budget Office

In the meantime, the U.S. budget deficit will grow to $219 billion this year, up from the $163 billion registered last year, according to a CBO report submitted to Congress.

But that forecast by Congress' nonpartisan budget analyst does not include the cost of an economic stimulus measure that is quickly moving through Congress and could cost around $150 billion or more. The deficit projection for fiscal 2008, which ends September 30, also does not include more money Congress is likely to approve this year for the war in Iraq.

HAHAHA. Throughout the collapse of our banking and economic systems, I have seen only rosy forecasts from our government and our private central bankers at the Fed. All of them without exception ignore the trade deficits. All of them blame our government budget messes on social programs while ignoring our huge military spending as well as misguided tax cuts. Now this! Right when they are talking about increasing consumerism and debts while savings plummets even lower! And there is no recession, anyway?

Of course, the 'recession' won't happen. Our masters in Asia want us to spend more and they will help us go deeper and deeper and deeper into debt. This is a trap! And we are sticking our heads into it, laughing like drunks.

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Comments

[shargash]

"Gimme Credit LLC in Chicago"

Gimme credit? LMAO! What a perfect name for an American financial company!

[Rich]

OK - So what do we do with our savings?
I've already bought some of that yellow metal and some euros. No debt. How do I keep what little savings I have that may be needed for a rainy day?

[Teddy]

IMO, there is no global savings glut since there is inflation worldwide including Chindia. And the standard of living for most workers and people in the world is going down including Chindia because wages and income for most are not keeping up with inflation. IMO, real interest rates in most countries are negative and now they want to lower them! Huh?...........so much for a global economy that benefits all, even in the emerging economies. Hopefully, some better policy makers will emerge worldwide to work for meaningful, alternate energy alternatives. And hopefully some genius will emerge to invent a viable alternative fuel real soon to correct the dangerous imbalances that are going parabolic.

[mad mike]

i went to the bank today to renew my CD.
i had to take out 10% to pay feb 1st property taxes. the rest was rolled over for 3 months at 4.85% interest.
so inflation is +7% and i can even get 5%!
but the nice clerk told me folks are locking in lower rates for longer maturities.
because they think rates will go lower.
maybe china can force rates up. i figger that if dollar investments stay below 5% then the dollar is worthless.
and $600 bucks tax rebate! it should be
$6000.00! after all those fed guys passed out liqiudity to all their buddies to the tune of uncounted billions. down in D.C. they are laffing at us. heh-heh! we stole all the money, wrecked the economy, tanked the dollar, let's give those bastids 600 bucks, so they dont tar and feather us and ride us out on rails.
i wish i had dollar for every dollar paulison gave to his rich buddies.
HUMBUBBAH!

[Elaine Supkis]

100% correct, Teddy. As always.

Yes, there is NO savings glut but in ONE PLACE ONLY: FOREX reserves! This is why I yap about FOREX reserves so much. They are one of several important keys to track and think about.

Isn't it sad?

Shargash, that name is like Pirates LLP. Their ship sank several months ago. I predicted it would. Hell, all these creeps are going under and their creepy names will be a laugh riot for historians.

[DeVaul]

I would dearly love to see some of these despicable politicians and bankers tarred and feathered and shoved out of town on a rail through a guantlet of onlookers. That is what is sorely needed in our society today: some kind of public accountability and mass identification of the criminals.

This is why I call this age The Collapse of the Great Hidden Ponzi Scheme. 95% of the world's people will not see the pyramid collapse. They will only see the huge tsunami crash into shore and wipe everything out, but they won't know where it came from and no one will tell them.

Except for Elaine.

[D.F. Facti]

On a more mundane level - - - eggs are two dollars a dozen where not too long ago they were maybe 1.49. At the local discount grocery, they were between 69 and 79 cents per dozen - oh - 6 years ago, perhaps. Today they are 1.69 at the same store.

Meat - beef - unbelievable. I saw a cut of sirloin yesterday - a better cut - for $25.00 - for a good sized roast. (And this is not prime or in a "high end" grocery.)

EVERYTHIG is MUCH more expensive.

I'm all for the tar and feather solution.

Elaine - I will have some very interesting things to send you shortly. The new world order types have a plan - and it's out there - the blue print - and I am not a conspiracy theorist or a nut.

[Elaine Supkis]

Glad to see you, Facti!

I raised the price of my green eggs from my Chilean hens this week. Grain costs so much more. Here, eggs go for $3.00 a dozen. Isn't it amazing. I feel like I am back in 1978 only Volker isn't here to stop this garbage.

So we will see 20% interest CDs in 10 years if we don't see WWIII.

[tutterfrut]

The cheapest foodstore in Belgium(Europe) sells them for 1.78 euros(a dozen)

[Bokonon]

Latest news from Davos, American official says we could have stayed at home and just read Elaine's news from Berlin. (Joking)

Congrats on calling the change in behaviour of the Chinese correct.
http://blogs.telegraph.co.uk/business/davosdiary/jan08/chinesecurrency.htm

On the price of eggs, $3.00 is cheap for excellent quality eggs. (I pay AU$4.00 for my jumbos).

[Carli]

"The point here is, life is living and living is loving and money has NOTHING to do with this in the end"... This was because I don't believe money matters in the end. This peculiarity is why it doesn't make me happy or sad depending on the level of money in my life. I like more money but I won't cry over spilt milk. I save that for tears shed for loved ones. I will cry over the loss of a lamb but not over the loss of a dollar."

Perhaps Elaine, the coming crash, crunch, debacle, Depression, or whatever people choose to call it will change the way people live their lives. From one of NEED to one of PURPOSE. You have lived it, you know what I'm talking about. May your tribe grow and prosper.

"For what profit is it to a man if he gains the whole world, and loses his own soul? Or what will a man give in exchange for his soul?" ~ (Matthew 16:26)

[Not Student]

Just a thought, it might not be so bad to be owned by the Asians.

[Greg]

ya gotta love denninger!!!!

Thursday, January 24, 2008
Boing! Go Interest Rates

Got priapism?

The Bond Market does.

Our government never ceases to amaze me.

They of course announce a "bipartisan stimulus package" to supposedly "help" our economy.

The bond market no likey, to put it bluntly.

The TNX, 10 year Treasury Rates, spiked hard - by more than 20 basis points, to 3.64%.

That's a six and a quarter percent change on the day!

Oh, and before someone says "oh it was rotation out into equities", no it wasn't.

It was the bond market telling our government to quick jacking around with bullshit "handouts" and tampering with sound mortgage lending practices!

What Pelosi tries to giveth, the Bond Market taketh away, and faster than Pelosi-cum-clown can try to hand it out.

Specifically, what the market didn't like was the prospect of bypassing OFHEO and indexing Freddie and Fannie to "average" home prices for the rest of the year.

Well DUH.

Oh, that wasn't all of it.

We also found out that a supposed "rogue trader" caused a multi-billion-dollar loss for a French Bank, which they had to unwind last week and into Monday.

Then this afternoon The Fed claimed this had nothing to do with their deliberations, and further, that they didn't know about it before their teleconference?

One word: HORSESHIT.

Let's talk about what probably really happened at The Fed.

Ben and Buds saw a precipitous drop in commercial credit demand last week. They were faced with either draining huge amounts of liquidity or dropping the FFT.
Instead of allowing the market to sort out what was going on or doing the right thing and telling the banks - both in the US and overseas - to fess up to what was going on "or else", they PANICED, and held an emergency meeting via teleconference, "agreeing" that the solution was an emergency rate action. This decision was allegedly made (according to Steve Lies-man) Monday night.
NOW we find out that the "collapse" in credit demand (and flight to Treasury debt) was actually caused by this "rogue trader" who spasm'd the equity markets worldwide. Or was it? Was that a rogue trader or was it really an institutional attempt - with authorization - on their part to bail themselves out of a bad position or three? Hmmm... who knows.... but the CAUSE of the panic is now clear.
And NOW the crack-whore equity market is demanding another 50 bips in rate cut next week!
Now this wouldn't be so bad except that BenDover had to inject a shitload of liquidity to maintain the target today. In fact, the slosh took a fairly sizeable rocket shot northward.

The bond market, being experts at sniffing out bullshit, saw all of the above and, having behaved itself up until this point along with a slowing economy, reversed hard, rocketing the cost of money for government debt upwards by six percent in one day!

Oh, and if you look at the short term (13 week) Bill market (the IRX) it rocketed higher by NINE PERCENT!

But but but you sputter, I thought BenDover's move was going to make mortgages and other loans more affordable?

Well let's see.

On 1/18 the 10 year closed at 3.648%.

Today, the 10 year closed at 3.640%.

Rate cut? Lower interest rates for mortgages and other debt?

Where?

BenDover cut the FFT by 75 bips and the Treasury Market gave him the finger, taking it ALL back in less than 24 hours!

You had about three hours yesterday to capture that lower mortgage rate.

If you didn't lock yesterday, tough crap - you missed it.

And if The Fed - and Congress - doesn't listen to the Bond Market and stop this stupidity government debt costs will continue to skyrocket and drag private debt costs higher, instead of the other way around, and will ultimately force the government to contract itself due to an inability to meet its interest obligations.

You only think The Fed controls interest rates.

It doesn't, and this is what the debt markets do when they get pissed off at government stupidity.

You want to know what I think homeowners who are upside down ought to do after being RAMMED by the politicians today and Ben Bernanke on Turesday?

After seeing Ben Bernanke AND our government DRIVE UP, RATHER THAN DOWN, DEBT COSTS, DIRECTLY AND INDIRECTLY SCREWING MORE AND MORE PEOPLE?

They should walk away. Send in the keys. Fuck it. Yes, your credit will be trashed for 7 years. So what?

Tell the bank to get fucked.

Today we had reported the first ANNUAL decline in home prices since the statistics began in the 1960s, and in all probability, since The Depression!

THIS IS NOT OVER.

House prices will continue to decline for the next TWO TO THREE YEARS, and if you're underwater NOW, you're going to be MORE UNDERWATER in a couple more years.

YOU WILL BE A DEBT SLAVE UNLESS YOU ACT TO STOP IT!

CUT YOUR LOSSES! Screw it. Check with an attorney to see if you can have other assets attached (in MANY states the answer is "no" on a purchase money first) and tell the people who have screwed you - and us - to get fucked.

You can either default the debt NOW, or LATER, after throwing even more money down the rathole. But either way, as the economy contracts and your job comes under stress, if you're upside down you're screwed.

Better to take the pain RIGHT NOW and cut off a finger rather than losing an entire LEG in a year or two!

Hell, even Cramer recommended doing this ON NATIONAL TELEVISION a couple of months ago!

Oh, and guess what - the mainstream press is even talking about it! Read all about it right here!

LISTEN UP FOLKS: YOU HAVE EVERY RIGHT TO TAKE ANY LEGAL ACTION YOU WISH. Analyze this as a pure BUSINESS DECISION, talk to an attorney, and then ACT.

SAVE YOURSELF.

As this deflation of the monetary base gains steam if you do not act you will have thrown away valuable money you could have otherwise held on to. Go rent a place first - so you pass the credit check and dig yourself out of your personal housing hell!

Beware equity investors.

The short bus is busting at the seams.

Buy this rally? Oh hell no.

It won't take long before reality sets in.

This is a time to sit on your hands and patiently wait for the opportunity to throw darts at the quote page of the Wall Street Journal, then short whatever you hit.

That day is coming, and soon.

Here's your technical.

posted by Genesis | 2:44 PM Links to this post

[Greg]

FFS WTF Facti????

the new world order types have a plan???? Of fucking course they do, its been out there for ages, pick any of the following and they all form part of the grand plan.

global population reduction
wealth transfer
serfdom
fascist style control
rfid chipping
brainwashing

the list goes on....

lol

WTC 7 "JUST PULL IT!!!"

[Richard]

Dear Ms. Supkis: Please don't worry about any systemic risks or failures, as I document in the linked article one has the Security And Prosperity Partnership to deal with those things.

As for me, I plan to sleep well tonight because my pillow is filled with silver coins; and I've taken a full dose of the Investors Klonopin -- the gold ETF, GLD, and loaded up to today with 'sells' of the ETF, TLT, and 'puts' of the closed end municipal bond fund VGM and others using margin credit on my gold ETF.

[MIKE]

stimulate our spending fixes other peoples economies, more treasons????????????

[K]

the new world order types have a plan???? Of fucking course they do, its been out there for ages, pick any of the following and they all form part of the grand plan.

Not that long ago I would write off your whole list as conspiracy theory hooey. Now...there have been so much has gone down where I thought "naw, they can't get away with that", "WTF? There's gonna be riots!", "But, but, that is a flat out LIE!!!"...I find "crazy" stuff more believable.

Y'all pick up the avian flu item in the news? Y'know I don't even remember where I saw it but I swear I read something about vaccinating/inoculating "important" people against a virus that would wipe out many of us peons. Sounds totally tinfoil..but then you remember hearing about some people being warned not to fly on commercial airlines prior to 9/11, and you think hmmmm...naw, couldn't be, could it?

[Pluto]

Now hold on a minute, folks.

Yes, the old savings and investing game is over. But that doesn't mean you have to do without. For godsake. It's so easy to make money in this type of market, whether you use leverage or not. Plus, it's a sure thing. Geesh.

For you savers and CD people, go over to Everbank.com world desk and buy global currency basket CDs. Here's a link:

http://www.everbank.com/001WorldCurrencyCDIndexRates.aspx

Make interest PLUS currency appreciation. FDIC insured and all that for you Americans. It's not that complicated. Look at the fundamentals that Elaine presents and it's easy to tell which countries to invest in and for how long. Just roll over if you're in a drawdown.

And that's just for savers. Currency trading is certainly the only way to decouple yourself from a nation's economic destiny. You can become sovereign yourself. What difference does it make where you actually live?

[blues]

Well lookie here!

The New York Times

By Elizabeth Becker And David E. Sanger
Published: December 2, 2003

President in a Political Vise Over Steel Tariff Decision

((----- Copy & Paste - W/O The Line Breaks -----))

http://query.nytimes.com/gst/fullpage.html?res

=9E03E3DE1E3AF931A35751C1A9659C8B63&sec=&spon

=&pagewanted=all

With the White House signaling that President Bush would abide by a ruling of the World Trade Organization and lift the tariffs he placed last year on foreign steel, American steel makers angrily declared on Monday that he should resist doing so rather than give in to threats of retaliation from Europe.

''This blackmail, this intimidation by Europe, is just further weakening our manufacturing base,'' Thomas J. Usher, chairman and chief executive of the United States Steel Corporation, told reporters in a telephone news conference.

Mr. Usher insisted that the White House had not indicated what Mr. Bush would do, and said he planned to ask the president about the issue on Tuesday.

He will have his chance: awkwardly for Mr. Bush, to whom the decision is fraught with political implications, Mr. Usher is a host of a $1 million fund-raiser scheduled for Pittsburgh on Tuesday, and it appears that the White House may be delaying any announcement until the president has left the city that steel built.

[....]

In a taste of a debate within the Democratic Party over trade, another candidate, Representative Dennis J. Kucinich of Ohio, challenged the right of the W.T.O. to declare the tariffs illegal. ''Clearly the tariffs are needed and are effective,'' he said. ''But the president has abandoned the sovereignty required to maintain them.''

But the Mainstream Globalist Media insists that only another NAFTonian Clinton is "electable." I demand Kucinich, dammit. I know he dropped out, but the hell with it. I'm voting Green in '08.

[John East]

Elaine,
Your healthy attitude to money is rare in this day and age. The majority display ignorance and indifference to their finances, as long as they are allowed to spend 105% of their income, year after year, often on bigger and better goods (according to the advertisers) their lives achieve fulfilment. Then we have the other side of the coin, a significant minority addicted to the making of money for its own sake. I find nothing sadder than the sight of multi-billionaires such as Warren Buffet or Jack Welch, whilst probably admirable individuals in many ways, who will probably still be working 12 hour days until the day they drop dead from exhaustion. Let’s face it, once one has sufficient income for the basic needs of survival any extra is nice, but it shouldn’t come before relationships and personal mental wellbeing.

My philosophy is to earn extra money above my current needs solely to cover future inflation and property taxes to pay the ever growing demands of our greedy, incompetent ruling elites. Knowing them for what they are, and their methods of robbing us all, makes contrarian investing relatively easy and lucrative.

Keep up the good work. Your insights are invaluable.

[CK]

Do not hold your breath waiting for those rebate checks, the IRS is in the middle of income tax processing right now and won't be done with that job until mid-May. The IRS cannot even beging processing the "stimulus" checks until they have addresses and number of dependents and incomes and other assorted marginalia available from THIS year's filings to determine who is eligible and for how much.

[Teddy]

Kucinich had the best ideas to correct the imbalances, and Ron Paul's platform to eliminate the Fed and sound money also would have demolished the New World Order. We are being told that debt doesn't matter by our politicians. That has to mean that the debt we owe to China, Japan, Europe, and the rest of the world has to be non-recourse. What the Fed, Congress, and the president have been enacting into law, especially recently, has to reinforce this mind set that we will never, ever have to nor will we pay back that debt. The only thing that would wake us up from this fairy tale would be a US dollar tanking. And as Elaine said, this could very easily lead to WW III. Or will it lead to a one world government? Highly unlikely.

[Elaine Supkis]

Thank you all for all the information and insights. I learn so much from everyone here. I really appreciate people who take the time to write back here at the comments section.

About the bonds: YIKES!! I am NOT surprised that bonds traders who are, by nature, BEARS, are hammering the 'Lucky House, Joy Eatery' fake free money being processed by the Western central bankers. They know that inflation is taking off again...oil is up!

We are on the Horns of Dilemma. Everything we do to try to avoid the inevitable pain will make things worse.

And Kucinich: He had to give up. Alas. He and Ron Paul are friends and even joked about running together. I wish they would. I would vote for them both, they balance each other out.

[Teddy]

It's being reported that Ecuador's government is seizing 17 mining concessions held by foreign companies. Yup, it's ok to use foreign money to develop natural resources in poor countries, but if it suddenly becomes valuable, it's a whole new ballgame.

[CK]

There's an update to the Ecuador story. Not 17, 100's of local and international mining ops.
Ecuador also offered to extend the American lease on that airbase in Ecuador if the USA would allow Ecudaor to build an airbase in Miami. ( That was a few months ago but I liked the idea )
All government is theft.

[Elaine Supkis]

I constantly talk about confiscations. I had property confiscated long ago when I was a young adult. Lesson in life: power does whatever it wants to do. This includes wars.

The US is fatally weakened. This free for all shows the world, we are out of control and we can't fight all our trade partners when we can't control Iraq and very poor Afghanistan, the poorest nation on earth.

We are PWND.

[MIKE]

given the right price, one year of afghanistans dope production would pay of all debts...sad but true?

[Greg]

we are pwnd :) LOL

;)

WTC 7 "JUST PULL IT"