April 26, 2008
Elaine Meinel Supkis
Thanks to everyone helping me buy a great camera, I can take pictures like this one. This proud bear is over 8' tall and was carved by a local lumberjack out of a huge tree stump. This winsome bear can stand sentinel for all of us bears who know very well the truth about the present economic milieu. Although the bears can be sandbagged by the con artists and liars, in the long run, we are right. Tonight is a weekend yet the economic news continues to pour in unabated. And it is all, virtually to the last item, all bad news. Oil and food continue their hyperinflation. War madness is worse with the US. And the G7 banking system continues to collapse. All the queen's horses and all the queen's pirates can't put this broken Humpty Dumpty together again. Not even with the Japanese carry trade.
Now for the regular statistics from the Labor Department of the USA: HAHAHA. NO!!!!! No! OOPS. It is only nearly one month late! We wonder why?
March 2004 Producer Price Index Released on
Thursday, April 22
The Producer Price Index (PPI) for March 2004, originally scheduled for release on April 8, was released on Thursday, April 22, at 8:30 a.m. EDT.The Bureau of Labor Statistics has not scheduled a revised release date for the April 2004 PPI, originally scheduled for Thursday, May 13. If a postponement is necessary, it will be announced at least one day ahead of time on this web page and through a news advisory.
The release of the PPI for January 2004, originally scheduled for February 19, was delayed to March 18. The February 2004 PPI, originally scheduled for release on March 12, was delayed to April 1. The delay of the January PPI was caused by unexpected difficulties in the conversion from the Standard Industrial Classification system to the North American Industry Classification System; the January PPI delay disrupted the normal Producer Price Index production cycle, and as a result, the February and March releases were also delayed.
BLS expresses its sincere apologies to those who have experienced any problems as a result of these delays.
HAHAHA. TECHNICAL DIFFICULTIES! Right at the exact same time the Fed was sloshing all over the place trying to figure out how to lie about job statistics. Like inflation statistics or the Money 1, 2 and 3 statistics, the government has to lie. If lying fails, then they delay. If delays fail, they have to SHOOT THE DAMN MESSENGER! Eliminate the statistics totally! At least, so we mortals can't see them. At this point in time, all the bears with lamps are wandering in the dark, growling, 'Where are those cowards. I want to rip their arms off and stuff them into my jaws and chew.' The bears know that anyone who tries shorting these whacked markets will be destroyed. This is because of naked market manipulations.
Feeding investors trashy information, for example, is a con game. Lying about banking matters is criminal. Faking statistics so they give a false sense of security is evil. And there are a number of people who use the internet to stop this! We are hated by the rulers, obviously. And people like Craig Paul Roberts who once were part of the system and now are bears with lamps, are particularly hated. And then there is Volker; he glares at these con artists who replaced him and increasingly, we are seeing the Cone of Silence being lifted and his words are reappearing in public again. About time.
Here is an amazing chart put out by the Department of Labor. It has NO text to it. We have to interpret it as best we can. And I say, 'Oh my god'. As the Financial Ninja likes to say, 'Scary charts!'
From the quite excellent GMTFO Repo Reader: a very interesting chart.
From the 21st of the month to the 25th of the month, the big bankers flooded into the new special markets where the Fed allowed them to fob off crummy, worthless loans and get US Treasuries in exchange. Now these Treasuries are also FAKE. They have value only because our trade partners and the guys supplying oil are propping up both the dollar and our government so we go into hock to them while deindustrializing our economy.
On top of this, the guys buying our Treasuries have been people who have made it pretty clear, 'We shall bury YOU.' This is not like when we got in trouble with the Vietnam War. Back then, Russia had a famine and we sold them lots of wheat which they used to strengthen their military and invade Afghanistan. This destroyed Russia just as Afghanistan is destroying US power. This time around, we are no longer a creditor nation in trouble, we are a DEBTOR nation in trouble. The Treasuries are worthless unless we can pay the interest on that $9+ trillion and all of our demented, evil, stupid candidates are madly appealing to the worst in US voters. All three are offering to be Santa Claus and give us goodies! But they cannot unless China gives them the green light. And China is in a very foul mood these days. We have to give them something very generous. Taiwan plus silencing the Dalai Lama, for starters.
Our goofy bankers, though, are very happy to have Treasuries right now. This is better than toxic wastes. This is because our goofy central banks will accept Treasuries as CREDIT and thus can be used to make more loans! Isn't that cool? Hopeless government debts are CREDITS the minute this trash moves over into other banks' vaults! Why not simply have play money?
The trillion-dollar mortgage time bomb
Risks are rising that Fannie Mae and Freddie Mac may need a government bailout that could cost far more than previous
rescues. Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money.This dwarfs how much it cost to help banks during the savings and loan crisis of the late 1980's and early 1990's. That cost taxpayers about $250 billion in today's dollars.
S&P added that saving Fannie (FNM) and Freddie (FRE, Fortune 500) might cost so much that the federal government's AAA credit rating, the top possible rating, might even be at risk. If that was lost, then all federal government borrowing would become more expensive.
HAHAHA. Our government's AAA rating is about as real as AMBAC's AAA rating. Everyone is AAA in the USA! This is like giving all the children in school 'A's if they show up in class. Even when they throw spitballs. This, of course, is carrying the silly, 'We are NUMBER ONE!' too far.
On the other hand, Fannie Mae and Freddie Mac were set up to service people who couldn't get mortgages. This was done during the long, long housing slump after the Great Depression. I remember when loans became easy. My parents moved rapidly from a house that cost $12,000 in 1954 to one that cost $17,000 in 1959 and then to the big 6 bedroom ranch that still cost only $39,000 in 1964. On the other hand, I bought a burned out slum brownstone in NYC in 1978 for $36,000. Then a mansion in New Jersey for $128,000, cash from the profits on selling the NYC property in 1984. A mere 6 years later! Then I sold the mansion for $319,000 in 1986. Ahem. Today, this mansion has been sold for over $2.5 million. My brownstone is $3.8 million. I should have kept both! Except for the taxes.
But a lot of this is the long, long housing bubble that started after WWII. This bubble's high numbers means that no one can hold mortgages and survive even tiny downturns. The flood of bad numbers would swamp any bank or investor. So what has been the solution?
CNN:
Wagner pointed out that at the end of January, 82% of all mortgages in the U.S. were backed by one of the firms, up from only 46% in the second quarter of 2007.
VIRTUALLY ALL MORTGAGES ARE NOW GOVERNMENT'S HEADACHE! The bankers collected all the fees and fun times and then dumped the entire history of the housing bubble, virtually the entire schmear, into the laps of the American tax payers who are the VERY SAME PEOPLE who OWE THIS MONEY!!!!
Now, what on earth do we see? Ouroboros. 
This is an ancient Egyptian illustration of the snake eating its own tail. This is a very magical thing and very intimately connected with money, life and power. The fact that the bankers have managed to turn what was supposed to be a responsible and careful system into itself so the very people who owe the money in the first place are the guaranteers of this same money...is magical in the extreme as well as TOTALLY INSANE AND IMPOSSIBLE. Click on this old Soviet cartoon illustrating how an internal system that chases its own tail looks like:
Doesn't this cartoon drive us nutty? Heh. I can barely tolerate watching it. We either laugh or rip out our hair or leave the room to get a beer. Or all three. But it is a perfect analogy for what is going on. Using this method, the bankers can now make MORE loans and the park them with the Fed! They can and will do this eternally if allowed. But there is a problem: both the American people AND the Fed are GOING FUCKING BANKRUPT. This is a serious flaw.
CNN:
Investors are signaling growing concern as well. The yield premium for securities backed by Freddie and Fannie compared to the yield on Treasury bills has grown to about 2.25 percentage points from 1.7 percentage points at the beginning of the year. That's a sign that the investors see a greater risk of Fannie and Freddie running into bigger problems.
Geeze, dear investors: watch that cartoon. That is YOU ALL. Ha. No! We must resist this. Note how the snake creature has human legs. And it goes around and around and wonders why the tail disappears into the dark cave! Then it comes out again! This treadmill is just the sort of system the Goddesses Dire love to devise. It is a trap. Once in this trap, one can't escape by stopping. And one doesn't want to be in it. For as we feed this system and go in circles, above us, other nations are building huge systems set up so they will crush us as we walk in this circle.
U.S. Notes Decline, Headed for Biggest Two-Week Loss Since 2001
Treasuries fell, with two-year notes headed for the biggest two-week decline since November 2001, as traders increased bets the Federal Reserve will stop cutting interest rates at its policy meeting next week.The yield on two-year Treasuries, more sensitive to changes in borrowing costs than longer maturities, touched the highest in more than three months. Traders also sold U.S. debt as yields on German bunds touched a one-year high and Japan's five-year notes dropped the most in nine years.
Japan's carry trade is part of this Ouroboros circular system! Look at the above cartoon only imagine the poor serpent, as he goes around and around, is slowly drowning in red ink! England, the US and Japan are all drowning themselves and the entire planet in red ink. Note also, the one nation most hysterical about inflation is the one has raised the value of their bunds! And what is a bund?
In German, this is an organization. Just like Al Qaeda is 'the organization.' It is a collective. Germany will not drop interest rates while having gross inflation. Japan totally ignores inflation. No nation except for Zimbabwe does this so openly as Japan. The US is right behind Japan in this regard. The yen is now dropping like a rock due to this horrible refusal to protect their own people. This is why the 'carry trade' has been able to resume. And the carry trade is FATAL to the US. The only fix for it is for the US to put up trade barriers to Japan to punish them for dropping the value of the yen. But the US is doing the same: ignoring inflation. Bernanke still might drop rates despite this but the whole world, the part that is not the US taxpayer, is threatening to stomp on our tail that we are dragging around in a circle. So Bernanke is hesitating.
U.S. States `Deteriorating' as Slump Curbs Taxes, Lawmakers Say
U.S. states expect to have at least $26 billion less than they need to pay their bills during the next budget year as a slumping economy erodes tax receipts, according to a national survey.The study by the National Conference of State Legislatures shows that pressure is mounting in nearly half of the states as businesses fire workers, fuel prices soar and consumers grow more worried about the economy. States rely on income and sales taxes to pay for schools, health care and criminal justice.
``With a few exceptions, state finances are deteriorating, in some cases considerably,'' the survey found. The group said that ``if the national economy continues to struggle and indeed falls into recession, the state fiscal situation will worsen.''
Our government can't save the over-mortgaged American homeowner. They are going bankrupt. And the US government is also going bankrupt. The banks are already bankrupt but they just transfered the hazards of bankruptcy to the taxpayers who are listening to three fools yap about how taxes won't go up, they will be cut and everyone will get another $600 bonus from the bankrupt government and all will be well! Who do we get to choose? All three want war with Iran Kitty. And so far, Iran Kitty is winning every round. They spend $1,000 on some cheap cigarette boats they bought from Castro and we spend half a trillion on aircraft carriers. And every time they buzz us, we flip out, the price of oil jumps and they rake in the profits. Whew. This resembles the cartoon of the serpent going after his tail. We keep doing this mindlessly.
So here we are: the US taxpaying public is very deep in debt and hopes the very deep in debt government will bail everyone out and in turn, the central bank that has no reserves will bail everyone out by accepting all the bad debts and holding them in lieu of reserves!
Steel Says Premature to Call U.S. Credit Crisis Over
Treasury Undersecretary Robert Steel said it's premature to say that financial market turmoil stemming from tightening credit conditions is near an end.``This is going to take a while to work through, and the improvement from here won't be in a continual line,'' Steel said in an interview on Bloomberg Television's ``Political Capital with Al Hunt,'' to be aired today. While progress is being made, he added, ``there will be some bumps and fallbacks.''
Steel's remarks suggest he's less optimistic than Wall Street executives such as JPMorgan Chase & Co. Chairman Jamie Dimon, who have said the credit-market freeze is more than half over. Steel said it's ``a bit simplistic'' to say the turmoil is closer to the end than the beginning, as Citigroup Inc. Chief Executive Officer Vikram Pandit did this week.
To help restore liquidity in capital markets, the government should consider easing limits on how much private- equity firms can invest in banks, Steel said in the interview. The Bush administration is also open to discussions with Congress on the creation of a federal agency to monitor financial market risk, he said.
Far from over, it has barely begun! NO banking collapse, NO housing collapse EVER ends instantly! And if the central bankers flood the landscape with Funny Money™, this doesn't end it, it makes it worse. For this is how rampant hyperinflation operates! And they know this. But don't care. They still hope the outraged Chinese will soak up all this loot for us and run their FOREX reserves to over $2 trillion. And the Japanese, the same! But there is a problem. China is royally angry with us. If they hold our money it will be only so they can kill us in the end. And no one will blame them. We can't pretend innocence here. For the last 5 years, I have heard the ruling elites joyously say, the Chinese can't ever pull the plug on us. They need us.
This is utter bull. The Chinese know what they are doing. They don't want to pull the plug too soon, that is all. But they are tempted. Below is a good article about the Plunge Protection Team, the clowns who pour out of a VW in the center ring of the circus:
Kevin Phillips is the author of the new book, "Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism." His previous books include "Arrogant Capital: Washington, Wall Street and the Frustrations of American Politics" and "Boiling Point: Republicans, Democrats and the Decline of Middle Class Prosperity."Over the last decade or so, the Treasury Dept. and the Fed have both developed something of a scofflaw attitude toward strict interpretation of federal statutes and regulations. For example, both winked in the late 1990s, as federal regulators allowed Citibank to merge with Travelers Insurance, despite contrary law still on the books. Both winked in more recent years, as major banks set up huge multi-billion-dollar structured investment vehicles, or SIVs, to do on an off-the-books basis what they were not allowed under banking law. Now we have the federally funded J.P Morgan Chase takeover of Bear Stearns. The PPT may well have had a quiet role in some of these actions.
For the bigger picture, look back to the stock market crash of 1987 -- the sickening Oct. 19 fall when the Dow-Jones Industrial Average lost 508 points or 23.6 percent of its value in a single trading day. Alan Greenspan had just taken over as the Federal Reserve Bank chairman, and some believe that the Fed intervened to support the market the next day -- by either buying Standard & Poors futures or telling several collaborative broker-dealers to do so.
It is good that a mainstream media reporter talks about all this. When we discuss this matter, the mainstream usually calls us 'conspiracy theorists.' The PPT has been in operation since the CIA was formed by Wall Street bankers! It often fails to do its magic only because lack of audacity, constrictions from German bankers who flip out if anyone tries to create hyperinflation and of course, political reality. Jimmy Carter had to take up the huge mess left behind by Nixon and his gang as well as all the post-Korean War Presidents. He cleaned up this mess using traditional banking tools wielded by his Federal Reserve captain, Volker.
Kevin Phillips:
Former Fed Chairman Paul Volcker, a well-respected senior statesman, stated his concern bluntly. “To meet the challenge," Volcker said, "the Federal Reserve judged it necessary to take actions that extend to the very edge of its lawful and implied powers, transcending certain long-embedded central banking principles and practices.”
Volcker is regarded as one of the last honest men in U.S. finance. But since 1987, the lawful and implied powers of the Federal Reserve have probably been extended further than the former Fed chairman would like – and, conceivably, further than he knows.
You Tube of the famous Get Smart 'Cone of Silence' [This show was my very favorite TV show when I was young!]:
Every day, I see Volker in the news more and more. The Cone of Silence that prevented anyone from hearing his voice, has been lifted. And about time. I am frantic for him to go to Washington, DC, and arrest Bernanke! Make him eat his tail!
Just for the hell of it, here is the first 'Get Smart' show. Control versus Chaos!
Elaine, not two weeks ago, you disagreed when I called the Treasuries fake! You modifier was 'pickpockets'. The AAA of the Treasuries is as much of a joke as the AAA of Ambac. Don't laugh. Canada is the only G7 with fiscal surpluses. Hint. Though the brokeass mountain bankers with the bulge brackets and the hedgeswines will try to crash the loonie. Just a good old fuck you, you die too, and deserve has got nothing to do with it.
The Fed is the Treasuries lapdog, there to sniff around and take a lick at the turds of its masters. That's why they put in a bearded clam at the Fed, clams love to eat shit. I am amazed every time the Treasury announces a successful auction. I anticipate a catastrophic collapse at one of their auctions, then will find out for whom the bell tolls. Nomura just gave up it's primary dealer cachet. The biggest dealer of Hammerhead Hank's toilet tissue in the East. Of course this meant nothing to the marauding cows in the markets. Who is responsible for these successful auctions in that case, the insolvent piggies on Whore Street? The insolvent buying the debt of the broke. They are going to have to print to pay up at the auctions. The six hundred dollar print job is the first trial baloon.
Posted by: calvino | April 27, 2008 at 06:53 AM
Did you have a falling out with Mike Whitney? His excellent "US Fed to Blame for Global Food Crisis" is floating around on the internet, but not here. Hmmmm...perhaps he got peeved at the persist editoralizing.
Revolution is so close I can taste it. No one sees it yet, but food prices are the trigger. They always have been. They always will be. Watch for food prices to creep upwards... the poor to starve... and the bankers to run to Israel screaming in fear.
Posted by: Karmaisking | April 27, 2008 at 07:50 AM
I had a problem with Mike's articles. He won't use a template for links. Most of the people who publish him publish people who can't figure out how to use links.
Most serious online writers use links properly. At first, I tried to put in links but since he often didn't give a clue where to find his quotes, I gave up. It really stressed me out, trying to turn his articles into proper postings.
But then, he is also published by the older online groups that seem hopelessly unable to put in charts, graphs, data or pictures. This is too pathetic.
I offer to teach any writer how to make a template and how to publish pictures! for example. Raimondo of Antiwar.com had a fight with me when he banished writes who didn't make links but I told him to publish pictures, etc and he refused.
Then, just about a month ago, he was forced to do this and acted like it was some great accomplishment. Gads. Some of us have been posting pictures online for YEARS. I am one of the earlier poster of pictures on a daily basis!
But due to telling the truth as I see it, I am not one of the 'big bloggers.' For example, I lost readers when the Democrats took the Senate and the House.
"Nothing will change. The war will get even more money and last longer, ' I wrote back then. Just like a good way to lose readers and be banned is to talk about Zionism.
Posted by: Elaine Meinel Supkis | April 27, 2008 at 08:20 AM
Your comment regarding the source for the Fed repo chart is inaccurate - it is not from the Department of Labor. It is compiled from NY Federal Reserve website data and converted into a bar graph by a private individual, who makes his work available to the public on his website:
http://www.gmtfo.com/RepoReader/OMOps.aspx
Please correct your attribution.
Posted by: Dan Scan | April 27, 2008 at 12:42 PM
I followed the links and that link got lost in the shuffle. Sorry. I have a very complex mess here sometimes and I try to keep links and their results lined up. In fact, the right link is in the coding here, it just didn't get the slot filled in.
Posted by: Elaine Meinel Supkis | April 27, 2008 at 04:40 PM
The Russian video won't play for me from this page. Here's the URL to it, for anyone else who has the same problem: http://www.youtube.com/watch?v=HdOWqQbdOR0
Posted by: John | April 27, 2008 at 09:00 PM
I was reading a post the other day and the fellow who wrote it was talking basically how the government was going to take over all of these properties and rent them out. He is right, and that is exactly what is going to happen. Welcome to Amerika comrades!
Posted by: Royal Dutch | April 27, 2008 at 09:42 PM
Indeed Bloomberg had picked up on the imminent failure of the Treasury auctions. Apparently, our good friends in the land of the White Chrysanthemum would rather own their own govt debt at half the yield of ours.
http://www.bloomberg.com/apps/news?pid=20601087&sid=adQ8ReGYJ.D8&refer=home
Posted by: calvino | April 28, 2008 at 01:41 AM
"Persistent". Sorry. My record of appalling typos is without peer.
You have sharp elbows. I hope Mike can see out of his black eye...
And don't worry about being banning anyone. The "fringe" guys on the outer always "lose", so they're never a real threat to anyone. You know that.
Posted by: Karmaisking | April 28, 2008 at 02:48 AM
"it is all, virtually to the last item, all bad news."
There is no such thing as good news. Any news is bad news to someone.
Posted by: JSmith | April 28, 2008 at 09:28 AM
Does anyone on this forum have a sense of the tide turning? Is there ANY possibility that voters are getting angry enough that our politicians will HAVE to do their jobs and put Bernanke and his ilk in their place? (Which would be prison--long term--if I were in charge). Or will things just roll merrily along until Homeland Security enforces martial law? That's an agency that frightens me and it should frighten everybody IMHO.
Posted by: Paul S | April 29, 2008 at 01:53 AM
Ron Paul voters are motivated but have been utterly crushed. Though a huge number did file a protest vote last week in Pennsylvania!
As for the left: it is utterly fractured as usual. But there is a warning shot: the truckers are very angry.
Posted by: Elaine Meinel Supkis | April 29, 2008 at 09:40 AM
Calvino, I read that article - the Chinese and Koreans are dumping treasuries also.
Posted by: Ed-M | April 29, 2008 at 11:46 AM