July 15, 2008
Elaine Meinel Supkis
Last summer, every time the US government and the central bankers in the G7 nations did rescue operations, Wall Street and the investment community went hog wild with joy. Everything would shoot upwards despite my warnings that these were signs of a rapidly deteriorating situation. Stocks hit their highs in early Fall. Now, they fall and fall even when there is news of 'successful' rescues. There is this gnawing fear that something is very, very wrong. Well, DUH. Nothing fundamental has been fixed, anywhere. These rescue operations are the proverbial 'helicopter drops' we all figured Bernanke would do.
Bernanke Forecasts Foiled by Fannie-Freddie Rescue
(Bloomberg) -- For Federal Reserve Chairman Ben S. Bernanke, events keep getting in the way.The chairman is seeing his efforts at using forecasts to map an anti-inflation strategy shoved aside by the need to contain immediate damage to the economy, Fed watchers say. Bernanke today delivers his semiannual testimony on the economy to Congress, where he will release the projections officials discussed at their June 24-25 meeting.
``Things are out of his control,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina.
I like this new concept being peddled: poor, baby boy Bernanke is not in control of events. HAHAHA. Things are mysteriously out of whack but it isn't the fault of Bernanke. Of course, it is the fault of him, his predecessors, the entire US political class, several reckless Presidents, the US dreams of world military domination and the desire to get filthy rich while not doing a day's worth of real work on the part of bankers and investors. I would highly recommend Congress do an investigation of the history of US finance and investment of the last 50 years. A committee can be chaired under the name of 'Woes of the Empire' to investigate all this.
Everything is one piece here: our trade deficits, our budget deficits, our consumer spending deficits, our military obligations that are totally outsized. For example, right when we are menacing Iran with a goodly number of boats in our fleet, we are also running WAR GAMES right on the border of Russia, in Ukraine and then in Georgia. Not only is this totally irresponsibly provocative it is also hideously expensive. And the tax payers of Europe and the former Soviet states are not paying for this. We are paying. Via IOUs. For there is another piece to this financial puzzle Congress refuses to talk about: the nations which are buying these IOUs are increasingly the very same nations we are clearly declaring to be a military danger to the US.
Bernanke controls the value of Treasuries. He controls the fundamental interest rates of the US banking/lending systems. He makes choices every day and manages to make the worst choices in this time frame. The US is caught in a trap: we can't fund our gigantic, militarily aggressive empire while running huge trade and budget deficits. We run these deficits because, for the last 25 years, interest rates have nearly always been below the rate of real inflation. Basically, it is 'free' money since there is no funds feeding back into the banking system. This shows up in the savings rate: it is negative, of course. The longer rates sit below inflation, the worse this gets. We also call savings 'capitalization'. Also, banks call savings 'debits' not 'assets'. This is because savings usually is someone else's capital handed over to the bankers so they can 'invest' it in lending schemes whereby both the bankers and the capital savers share the profits.
This is what has broken down totally. Thanks to the Federal Reserve's refusal to lend banks 'money' at rates that bring in savings, they did the opposite. Now, our entire banking system is basically being 'capitalized' by the Federal Reserves which, I always add, is neither Federal nor has much in reserves. The Federal Reserve's banking mess is the Great White Whale and Bernanke is Captain Ahab being dragged off by this whale to the silvery, dark depths. The Great White Whale, I might add, also thrashed apart the Ship of State and the only survivor was a kid using a coffin as a life raft.
Bernanke can't raise rates to realistic levels because our entire economic system is based on RED INK. He stops this and the whole thing shuts down. But unfortunately for us, we are at the limit of red ink so we cannot simply continue to expand our military domination of the earth while spending deeper and deeper in the red. This is an impossible proposition and should be the main topic today in Congress! Not to mention, the Presidential campaigns. Note the mess this year: all the candidates have been rushing overseas to assure our 'allies' and others that our empire won't shrink one inch nor will our wild spending shrink by one penny. Hitherto, all our Presidential wanna-bees buzzed about the US and talked up America, not running around AIPAC or heading off repeatedly to Europe for donations or assurances we will not change course at all. Something is very, very wrong this year, much more than in previous elections.
Risks to that outlook have risen after the Standard and Poor's Financials Index dropped 17 percent and Fannie Mae and Freddie Mac, the largest sources of U.S. home financing, lost more than half their value since the June FOMC meeting.The U.S. Treasury and Fed were forced to assemble a rescue plan for Fannie and Freddie July 13 in an effort to stem a collapse of confidence in the firms. Two days earlier, the Federal Deposit Insurance Corp. took over IndyMac Bancorp Inc. as the California lender collapsed under soaring losses.
``The Fed's messages, complicated by the interaction between the real economy and financial system, have been confusing,'' said Mark Spindel, who runs the Washington-based hedge fund Potomac River Capital LLC and used to manage a $15 billion portfolio at the World Bank's International Finance Corp. ``They were hoping financial turbulence would have subsided. It hasn't at all.''
Only a fool would think that financial turbulence caused by the US empire's wild overspending on every possible level was subsiding. At no point was there balance. If we suddenly balanced even one of our books, this might be so. Only it is worse, not better. Is the US government less in the red this year or more?
The answer is obvious: far, far more! These rescue operations have been mostly based on producing more red ink, not less. The government's attempt at papering over fundamental overspending on all levels has made things worse, not better! This is painfully obvious. Until Americans understand that we MUST balance our books, we will continue this death march towards economic destruction. We cannot have a banking system based on no savings. We cannot have a government based on no collection of taxes or tariffs.
Chinese Government is Top Foreign Holder of Fannie Mae, Freddie Mac Bonds
(BUSINESS WIRE) -- As politicians call for taxpayer bailouts and a government takeover of troubled mortgage lenders Freddie Mac and Fannie Mae, FreedomWorks would like to point out that a bailout is a transfer of possibly hundreds of billions of U.S. tax dollars to sophisticated investors and governments overseas.The top five foreign holders of Freddie and Fannie long-term debt are China, Japan, the Cayman Islands, Luxembourg, and Belgium. In total foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury's most recent "Report on Foreign Portfolio Holdings of U.S. Securities."
FreedomWorks President Matt Kibbe commented, "The prospectus for every GSE bond clearly states that it is not backed by the United States government. That's why investors holding agency bonds already receive a significant risk premium over Treasuries."
Well, now the bonds sold by Fannie Mae and Freddie Mac are now backed by the deep in debt Federal Government! Isn't that charming? So there is really no risk, eh? Except for the obvious risk that the US government will be bankrupt. Incidentally, this is the deep-set Chinese plan for us: they become our bank and then we owe them and they bankrupt us. Just as Bin Laden's plan is to bog our empire down in fruitless battles in the high mountains of Central Asia. Both plans are maturing wonderfully, alas for us. I would suggest Congress hold hearings about this matter, too.
Note also that front countries, namely Luxembourg, Belgium and England are buying these for third parties. And then there are the pirate island crew: they, too, hold a lot of this. Offshoring our banking is INSANITY. It is STUPID. It is TREASON. This idiotic idea was birthed along with the ending of the gold peg for the dollar and the introduction of the Floating Currency, one of the stupidest things ever hatched by an empire. Both China and Japan are holding these instruments that should have been parked here at home, they hold these things so they can flood our markets with exports which profit their own countries while ravaging our own bottom line. The entire idea that we must ship our debts overseas must stop. It is a high priority. We cannot allow foreign powers to hold our government debts or our banking debts! This is how we will be destroyed. Until we figure this out, we will suffer more and more as things collapse. Will we learn in time?
Not if the media refuses to talk about this, if our politicians deliberately ignore this or if economics professors tell us this is all wonderful. There is no easy solution here. The painful solutions are the only ones left. First, interest rates must run AHEAD of inflation, not behind. Second, the US must accept some sort of barrier to endless lending. Lending must be restricted. Gold works. Otherwise, we have to use the Stalin/Mao method of the government dictating what the level will be. This is a very brutal method and wrong in so many ways. Yet I detect most solutions are sliding in this direction. We cannot allow this!
How Chuck Schumer Caused the Second Largest Bank Failure in US History
Federal officials aren’t supposed to cause bank runs. In fact, much of the New Deal bank regulatory apparatus was set up for the purpose of eliminating such panics. When FDR was hit with a massive set of bank runs shortly after taking office, he gave an address in order to calm terrified depositors, assuring them that the banks would reopen shortly, and that everything would be fine. But Chuck Schumer is no FDR. He doesn’t stop bank runs; he starts them. Or, at least, has started one. The collapse of Indymac bank, the second largest bank failure in American history, began with a letter from the office of Senator Charles Schumer on June 27. He questioned the viability of the bank. When a senior senator who is in a number of influential posts regarding oversight of bank regulators directly attacks the confidence of a depository institution, it matters. Not surprisingly, the director of the Office of Thrift Supervision concluded that the collapse of the bank immediately following the Senator’s comments was not a coincidence. Director Reich concluded that Senator Schumer had ‘given the bank a heart attack’.
This editorial shows how stupid right wingers can be: first, Schumer is not a Federal official. He is a Representative who is a Senator. He represents the people of New York. He does NOT represent the government, he is supposed to be our voice controlling the government. Secondly, he has to tell us the truth some times. In this case, as our banking system collapses, he has to talk about all this and tell us what is really going on. The news media often won't do this. Nor will the Federal Reserve. The Reserve is filled with liars who can't tell us what is happening because they are con men ripping off our economic system. They should be arrested.
Indybank went under not because of a run on the bank. It went under due to making too many easy loans at ridiculous interest rates that are now behind the billowing waves of inflation. Let me make this very clear: mortgages are not short term loans. They are LONG TERM. And over the last two disastrous decades, they have been increased in length to 30 years. This means that cheap loans made during hyper-cheap interest rate regimes like the recent 1% period thanks to Greenspan goosing the economy, these things become WORTHLESS to holders if the rate of inflation leaps forwards! Once the rate of inflation surpasses 5% a year, all is lost to those holding these mortgages for the long term. They can't sell them to other investors because the value is now growing slower than the rate of inflation. Thus the need to 'haircut' the sales. Which means the seller loses capital. This is the vanishing capital we are talking about.
To prevent this from worsening, the Fed must raise rates fast. But like Japan, it won't. They are content with the easy funny money so far. Even as inflation is now screaming like a banshee across Japan, the Bank of Japan won't budge one inch. Nor will the Fed. With the world's top two economies refusing to admit to the inflation they are creating, we get global financial meltdown. Indybank went under because they could not sell increasingly worthless mortgages. By the way, even people paying their interest payments on the mortgages are increasingly worthless. They are paying off long term debts with increasingly worthless dollars. The collapse of the dollar vis a vis much of the planet earth means this is a DOUBLE WHAMMY overseas. And this is where we peddle nearly all our debts these days!
Bloomberg:
Policy makers on Aug. 7 kept their benchmark lending rate unchanged at 5.25 percent, and cited inflation as the ``predominant policy concern.'' Ten days later, a surge in funding costs prompted them to reverse course and lower the charge for direct loans to banks.Two months later, the FOMC said that growth and inflation risks ``roughly balance'' each other, before abandoning that assessment to lower rates again in December and execute an emergency reduction in January.
In June, Bernanke began highlighting a rising risk of inflation, presaging the June 24-25 FOMC meeting, where officials halted their series of seven rate cuts since September.
At this point, why have interest rates at all? Japan has dumped this ancient concept. Why have real money? Japan dumped that, too. The value of a currency is supposed to, under the Floating Currency regime, it is supposed to rise when there is a trade surplus. But Japan made the yen drop, not rise, vis a vis its main trade partner who sells very little back to Japan! This is supposed to be impossible. Now that it has been happening for over 15 years, we better ditch the entire concept of the Floating Currency correcting for trade imbalances. It is obviously a flawed system. Fatally flawed, in our own case.
Real rate of inflation could be 10 per cent, says John Major
The former Conservative prime minister forecast more job losses and bankruptcies and accused the Government of under-stating the real impact of price rises.He said changes to the way inflation is calculated had been "extremely misleading", with increasing food prices and heating bills not reflected by the official statistics on the cost of living.
England is lying about inflation. Most governments in the world have been lying about inflation which is why inflation is now a global problem. But when the world's #1 and #2 economies, the US and Japan are viciously lying about inflation and deliberately keeping rates far below inflation, all others must do the same to survive in this warped, stupid system that is destroying capitalism.
China's Currency Reserves Rise 36% to $1.81 Trillion
(Bloomberg) -- China's foreign-exchange reserves climbed by more than a third to a record $1.81 trillion at the end of June, evidence that investors may be betting on further gains by the yuan.Currency holdings rose 35.7 percent from a year earlier, the People's Bank of China said today on its Web site. The assets grew $126.6 billion from the end of March, after a $153.9 billion gain, the biggest on record, in the first quarter.
Chinese regulators are adding controls this month to limit ``hot money'' inflows from investors betting the yuan will keep appreciating after 25 straight monthly gains. The trade surplus, foreign direct investment and speculative capital have flooded the world's fourth-biggest economy with cash, threatening to stoke inflation.
As China sops up all the excess finances created by trade partners, the US and Japan, it is not doing this for trade or for getting rich. China is in a race with the US to see who will collapse first. The recent riots in Tibet showed China their grave internal dangers. The earthquakes that destroyed so many in Sichuan province is another hazard. As the US sleepwalks towards a massive earthquake in California, we can't point fingers. China, by holding these excess inflationary dollars for the US are not doing us a favor. The plan is to use this as a weapon of mass economic destruction once it is clear the leverage of this money will destroy the US empire totally. Up until then, the Chinese must hold their fire and continue to frantically build up their own economic base. This is why they are running around the planet, making many deals we don't like. In particular, they are tying up and holding more and more energy sources and commodity market resources. We cannot outbid them.
My story from exactly one year ago:
2001's fix was very simple: the central banks all decided to imitate Japan and drop interest rates really low. The global slow down was significant. But the cure was very dangerous. It instantly created an asset bubble. It didn't improve the underlaying fundamentals of industry. Now we see a shocking series of buy-outs and buy-backs that have unloaded many trillions of created dollars which will, collectively, act as a huge drag on our economic futures. Just like absurd real estate prices take many years to wring out of a system, all this takes time to unwind. The fact that the behemoths of industry are still madly merging and loading up on debt isn't a happy sign, it is a sign of desperation. The downturn isn't in its final stages, it is barely begun.
As usual, I was right. We can see in the above stories that the professionals in the US who get on the news so much were woefully wrong. My analysis was spot-on correct due to the simple fact, I never lose sight of the multiple financial forces at work here. I don't look at stocks, analyze graphs or track just one thing like, say, housing. There are many sites that track housing and banking but leave out any mention of world trade. There are professors online who will track China's economy but not Russia, Japan, Europe or anything else. There are 'tulip mania' web sites that track one or another product being used to dump dollars. In an inflationary world with sub-inflation rate lending, EVERYTHING is a 'tulip bulb'.
Lehman Should Go Private, Fox-Pitt's Trone Says
(Bloomberg) -- Lehman Brothers Holdings Inc., the securities firm that tumbled 81 percent in New York trading this year, should go private to end rumor-mongering about its shares, Fox-Pitt Kelton Cochran Caronia Waller analyst David Trone said.``Lehman's best course of action would be a `going private' transaction, since it is the public equity markets that are the threat to the company's survival,'' Trone wrote in a note today. ``Without a public stock, there would be no shorting, thus no motivation for rumor-mongering, thus no source to spook the counterparties and creditors.''
*snip*
``This would eliminate the disconnect between Lehman's true financial condition and current stock price by eliminating the run-on-the-bank discount in the process of the buyout,'' Trone wrote. ``This value-release would be big enough to avoid the need for leverage.''Lehman employees own about $2.5 billion of the current market capitalization, according to Trone. The company could be taken private through a buyout consortium, sovereign wealth funds or other purchasers, he said.
HAHAHA. Lehman can escape by going private? Then they can hide information! What a solution. Actually, it is funny that someone seriously suggests this obviously dying organization be held only by the employees. Then, when it kicks the bucket, they get shafted, not investors. Of course, investors have been fleeing this sinking ship for some time now. This is why it lost over 80% of its stock value. Some of us bears online have been placing bets for when Lehman finally follows Bear Stearns and Fannie Mae/Freddie Mac into the hands of the Stalinists running the Federal Reserve.
Weak US dollar hits papal profits
The Vatican made a loss last year as the weaker dollar reduced the value of donations from the faithful in the United States. Almost a quarter of the $79.8m (£40.4m) worth of offerings it received came from collections made in US churches.But as the dollar lost 15% of its value against the euro, the Catholic Church's governing body made a loss of 9.1m euros (£7.3m: $14.3m) in 2007. That was despite receiving a single anonymous donation of $14.3m.
The poor Pope can't go to China for money. Actually, he has been frantically negotiating with the Chinese concerning the issue of Papal control of the Chinese Catholic Church. The Chinese kind of like the Henry VIII model whereby the Dragon Throne is the ultimate arbiter for church finances. The Pope sits on his golden throne in one of the most expensive palaces on earth, bar NONE. Not even the Queen of England has what the Pope has. And the value of the art works in this system is mind-boggling. But just like when Martin Luther challenged Papal finances 500 years ago, so it is here: the Pope doesn't need the pennies of grannies going to church. He can sell his vast wealth and live more like Jesus who had nothing. How about that? HAHAHA. Impossible. Like all religious rulers, he is demonic. He worships in the Cave of Death and he embraces the dragon.
Market start the big crash. Pray China isn't dumping stuff.
Posted by: Anthony | July 15, 2008 at 10:17 AM
The PPT are in overdrive today. As Boy George addressed the nation, the market dropped 50 points. The man lied throughout the interview, something he doesn't do very well. His body language reflected a man who wanted to run out of the room.
It's not in China's interest to destabilize at this time. After the Olympics is another story. The right question to ask is, "Who benefits most from a collapse at this time?"
Posted by: Carli | July 15, 2008 at 11:16 AM
Let's see...SEVEN of the biggest budget deficits in history belong to the current President. And the media asks HIM about the economy? So what does "Dubaya" advise the American people? Take a deep breath. I do take a deep breath, Mr. President. Every time I think of you being in the White House.
Posted by: Paul S | July 15, 2008 at 12:00 PM
Bernanke: Inflation has remained high and "seems likely to move temporarily higher in the near term," he warned.
If nothing changes, how can it be forecast as 'temporary'. I guess he means it will shoot up and then return to 'normal' - just the way they like their 'Inflation Targeting', dear Goldilocks; warm but not hot. Time to go sleep in Baby bear's bed - at least until Mama and Papa 'Bears' come home and take care of the matter.
Also it seems like funny money is fleeing to safety: Despite strict capital controls, China is being flooded by the biggest wave of speculative capital ever to hit an emerging economy
Posted by: RobG | July 15, 2008 at 12:16 PM
I'm not really sure what anyone expected when an alcoholic crack-head was placed in the White House, unless millions of people were hoping for the complete and total destruction of the Republic. If so, they will get their wish.
Garbage in, garbage out.
Posted by: DeVaul | July 15, 2008 at 12:39 PM
DeVaul - that make senses. But I think it is worth adding the old saying:
"One person's garbage is anothers treasure"
Posted by: Buffalo Ken | July 15, 2008 at 12:46 PM
Today, President Bush says his plans to stabilize the mortgage finance companies Fannie Mae and Freddie Mac will work as well as his invasion of Iraq and Afghanistan (Mission Apocalypse), the Federal response to Katrina (Great job Brownie) his endorsing the use of ethanol causing skyrocketing food prices, blocking Federal agencies from publishing evidence of man-made climate change, lowering taxes to the wealthy and at the same time borrowing billions to fight a costly war........of course his plan to help the mortgage industry will work!
Don't worry, America, because our next President, Obama, says that the Iraq war is a dangerous distraction and all we need to do is focus our guns on Afghanistan.
Yep, a little change, that's all we need and it's a comin'....
Posted by: Jojo | July 15, 2008 at 12:51 PM
Yeah, I know. For some, Dubya is pure "black gold".
Oblivion awaits them.
Posted by: DeVaul | July 15, 2008 at 12:54 PM
Good one DeVaul - I concur.
Posted by: Buffalo Ken | July 15, 2008 at 12:59 PM
and yeah, as each day goes by obama-rama seems like bad drama no different than before...what a shame - he might of had a chance seems to me....
Posted by: Buffalo Ken | July 15, 2008 at 01:01 PM
Either Kucinich or Ron Paul would have been WAY better, but NO - "intelligent minds" didn't want to let them in the discourse --- seems to me now we are all going to pay for this bad intelligence.
God - there has been plenty of that lately. I'm sick of it. I have FURY.
Posted by: Buffalo Ken | July 15, 2008 at 01:03 PM
I have two children also and I imagine most of the folks posting here have children as well. Well shit, its time to put our foot down. Locally, nationally, internationally - however it can be done.
For the sake of the children, its time for some serious but peaceful "direct action". Don't you think? Oh yeah, some "mutual aid" is also essential.
Don't you think?
Posted by: Buffalo Ken | July 15, 2008 at 01:09 PM
Buffalo,
It's better to emigrate. Here in Portugal we have the same problems with our governements. Almost 50% of Portuguese live abroad...
Here we still have almost free health service and higher education... And we need business minded professionals like most of US people are... We don´t have jobs... Think about moving to here !
Posted by: PJSV | July 15, 2008 at 01:20 PM
I would love to live in Portugal, but I'm not from there. I'm sticking in my little house until the very end!
Peace,
Ken
Posted by: Buffalo Ken | July 15, 2008 at 01:38 PM
I really dont understand why Americans are
so conditioned to think that there are only two parties to vote for. They create their own self-fulfilling prophecy when they say that "third parties cant win". We have to get over this somehow.
I will vote for Cynthia McKinney in the Green Party and if she's not on the ballot
I simply will not participate in this dog
and pony show of "elections". It will be a
sub zero day in hell before I vote for either a Demorat or a Repuglikan.
Posted by: Gary | July 15, 2008 at 02:08 PM
When I read about Helicopter Ben, I think of the Beany & Cecil Show. The Beany's Beany Cap Copter cartoon is funny as Washington politicians want to buy the beanie copter for a zillion dollars. http://www.youtube.com/watch?v=qUUS63kkH-Y
Posted by: rockpaperscizzors | July 15, 2008 at 03:29 PM
I have been pondering why McCain was quick to drop Sleazy Phil "Enron" Gramm like a hot potato. The whiners remark is nothing new for the GOP's feelings towards the "little people." I came across a financialsense.com article (July 10)about the IRS demanding turn over the names of American account holders. And who is the Vice Chair UBS/Warburg. None other than Phil Gramm.
An article in the Timesonline about the IRS and UBS, July 2: US demands names of UBS customers
The US Government moved a step closer yesterday to ripping off the veil of secrecy that for centuries has protected the identity of UBS clients as a federal court took the unprecedented step of demanding that the Swiss bank hand over the names of as many as 20,000 of its customers.
A federal judge in Miami issued an order authorising the Internal Revenue Service (IRS) to retrieve from UBS information about US taxpayers who may be using Swiss accounts to evade income taxes.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4251600.ece
From the Phoenix Business Journal May 28:
Phil Gramm's UBS work raises new lobbyist questions for John McCain
http://www.bizjournals.com/phoenix/stories/2008/05/26/daily15.html
On July 13 McCain rids himself of Sleazeball Phil.
Slate has an article on Gramm's sleazeness relationship with UBS since 2002.
Phil Gramm's UBS Problem
If the Texas senator and McCain adviser was supposed to keep the Swiss bank out of trouble, he's made a mess of it.
http://www.slate.com/id/2194933/
Posted by: rockpaperscizzors | July 15, 2008 at 03:48 PM
Bernanke wants to officially cut the Fed loose from it's obligation to rein in inflation, and is about to ask Congress to change the rules to allow him that (reports Bloomberg). Swell isn't it. They seriously believe they can inflate themselves to joy.
Posted by: Christian W | July 15, 2008 at 03:53 PM
"Hands Full of Money but all in debt"
"Everybody's Gone to the Moon"---and left
behind the former boundaries,ie gravity.
Streets full of people, all alone
Roads full of houses, never home
A church full of singing, out of tune
Everyone's gone to the moon
Eyes full of sorrow, never wet
Hands full of money, all in debt
Sun coming out in the middle of June
Everyone's gone to the moon
Nina Simone........
Posted by: Gary | July 15, 2008 at 04:24 PM
Hands full of money but all in debt.....
Streets full of people, all alone
Roads full of houses, never home
A church full of singing, out of tune
Everyone's gone to the moon
Eyes full of sorrow, never wet
Hands full of money, all in debt
Sun coming out in the middle of June
Everyone's gone to the moon
Nina Simone
Posted by: Gary | July 15, 2008 at 04:28 PM
Christian W, have you considered adding a link to the article in Bloomberg that you mention?
Suggesting that the criminals in the Federal Reserve have allowed themselves to be reined in my ANY regulation is a somewhat amazing claim in these times.
So, I am very interested to learn what, if any, rules the congress enforces on the Fed.
Since you may be learning how the federal reserve bank (as federal as federal express) works, I thought link this might help.
Notice how THEY decide the interest rate, and give us an 'explanation'. GEE, THANKS!
http://www.federalreserve.gov/KIDS/#inflation
"At each of its meetings, the FOMC decides whether or not to change its target for the federal funds rate, and if so, by how much. The FOMC also issues a statement after each meeting explaining its decision, and these statements contain some important information about the FOMC’s evaluation of the economy."
Posted by: GK | July 15, 2008 at 04:34 PM
Bravo to Gary and his sentiments toward voting for a another political party. He is correct in his self-fulfilling prophecy statement also. It HAS to start sometime. There is simply no future in the two corporate political party's that exist now. Voting the lessor of 2 evils will still get you evil. And please spare the waste your vote logic. A vote for a democrat or republican is a true waste.
Posted by: Oops | July 15, 2008 at 05:05 PM
I have always endorsed third and fourth parties. But we have a 'winner takes all' government and so other parties have no chance at all. Perot took this the furthest and then got bought off by the tax cut goodies business.
Ron Paul continues to hew to the GOP and supports Gramm and McCain. So he went from hero to zero in a flash. This leaves Bob Barr and McKinney. Both were hated by their own parties and both are even more hated by AIPAC.
Posted by: Elaine Meinel Supkis | July 15, 2008 at 05:24 PM
during bernake speeech, the price of fuel
dropped drastically, a cover in place or did
the CFTC plan it that way. Biggest drop in
17 years !! CFTC put the ice futures in
place now its time for the pits in New York.
Posted by: don | July 15, 2008 at 05:50 PM
Yup. Mad market manipulation big time.
Posted by: Elaine Meinel Supkis | July 15, 2008 at 06:18 PM
Don:
I was surprised they didn't manage to take down gold and silver much, and the Dow and S&P are not looking well tonight.
Gary:
Nina Simone is too heavy, too soon. This coming tragedy is still farce. I nominate "Three Wheels On My Wagon" (and I'm still rolling along) for the Fed theme song.
YouTube seems a bit short of choices here, but this seems good enough if you're too young to remember it (is that Sir Alan, BTW):
http://www.youtube.com/watch?v=wLtiS6fPUFI
As it is, if you didn't laugh, you'd cry.
Posted by: Bear of Little Brain | July 15, 2008 at 06:31 PM
Hi Elaine. How much Level 3 does AIG have? Are they long for this world? Thanks.
Posted by: Ditka Butkus | July 15, 2008 at 06:49 PM
GK, I found the link to the Bernanke comment I posted above:
http://tinyurl.com/6ytstl
"Inflation Mandate
Bernanke's appearances this week on Capitol Hill provide him with the chance to separate the Fed's approach to financial markets from its mandate to keep a lid on inflation, says Dean Maki, chief U.S. economist at Barclays Capital in New York."
I know the Fed doesn't really follow rules, but these guys are very good at legalese and they know when they need to cover their backs.
Posted by: Christian W | July 15, 2008 at 06:52 PM
Bear-I went back and looked at
the Monthly Mortgage Rates Resets
from 2007-2016 !! They are ugly at best !
Bernake didnt have any gold or silver in
his portfolio "yet". Maybe the person
who was doing the shorting was the one
who was speaking to us today...hhmmm
Posted by: don | July 15, 2008 at 07:05 PM
The quote following is from book "The Nameless War" for which author was imprisoned.
"The real objective of the "Glorious Revolution" was achieved a few years later in 1694, when the Royal consent was given for the setting up of the "Bank of England" and the institution of the National Debt. This charter handed over to an anonymous committee the Royal prerogative of minting money; converted the basis of wealth to gold; and enabled the international money lenders to secure their loans on the taxes of the country, instead of the doubtful undertaking of some ruler or potentate which was all the security they could previously obtain.
From that time economic machinery was set in motion which ultimately reduced all wealth to the fictitious terms of gold which the Jews control; and drained away the life blood of the land, the real wealth which was the birthright of the British peoples.
The political and economic union of England and Scotland was shortly afterwards forced upon Scotland with wholesale corruption, and in defiance of formal protests from every county and borough. The main objects of the Union were to suppress the Royal Mint in Scotland, and to force upon her, too, responsibility for the "National Debt." The grip of the moneylender was now complete throughout Britain. The danger was that the members of the new joint Parliament would sooner or later, in the spirit of their ancestors, challenge this state of affairs."
Posted by: PLovering | July 15, 2008 at 07:21 PM
haa haaa...Bernanke say no more naked shorting Fannie Mae and Freddie Mac.
Boy are those puppies now gonna get shorted to death.
Posted by: Anthony | July 15, 2008 at 07:22 PM
Yes, I am drawing a cartoon about that. HAHAHA. Online in about an hour.
Posted by: Elaine Meinel Supkis | July 15, 2008 at 08:16 PM
Elaine, dear,
You are so totally misled about voting. Please disabuse yourself about the "winner-take- all" bullshit. You do the economics; let me do the voting theory!
Here's the real deal: the supposed "winner-take- all" concept is a total straw man. That is simply NOT the real problem. So get up on this stuff, since it DOES matter! The real problem is the Black Hat Syndrome. That is the entire problem! Study it a bit. Put a little effort in, please. I laid this out years ago. Here:
((----- Copy & Paste - W/O The Line Breaks -----))
http://dailytrough.wordpress.com/2007/09/23
/real-democracy-is-the-only-answer/
I'll even re-post the damn thing right now. It's a simple matter of getting the mechanics right! So read this sucker, please!:
__________
Consecutive runoff approval voting was designed to comply with three dominant principles: removal of the black hat syndrome (also called the spoiler syndrome), the ability to count a ballots at the voting station level in such a way as to produce simple numerical sums that can then be added into larger tabulations, thus avoiding any need to send any complex information to the larger tabulations, and achieving a method that provides extreme overall simplicity. It does seem to comply with these principles. The third principle that two-consecutive runoff voting is required to comply with is that it must harbor no black hat (spoiler) syndrome. This method always results in an absolute majority winner, so by some definitions, it may not constitute a “winner take all” method. The structure of the two runoff method is as follows:
TWO-CONSECUTIVE RUNOFF VOTING:
In the first runoff, the approval method is used to choose exactly two candidates to run in the second runoff. The first runoff is simply an approval election; each voter can give just one vote to as many candidates she or he “approves of,” or finds acceptable. There is one practical consideration, however, due to the potential problem of voters casting an inordinate number of votes. So it would seem advantageous to limit the total number of votes that each voter can cast to some arbitrary number. A limit of 20 is suggested, but many people holding currently dominant perspectives seem to prefer a limit of 10. At the end of the polling, all of the votes are simply added up, and only the two candidates with the most votes go on to the second runoff.
The second runoff is quite simple; the two remaining candidates run against each other, and the one who achieves an absolute majority becomes the winner. Obviously, there can be no black hat (spoiler) syndrome, since there can be no third candidate.
The design of this method was undertaken with the express assumption that some interested party will often, if not always, attempt to use the black hat (spoiler) syndrome to circumvent the will of the voters. Therefor, we are not merely attempting to attain a method that precludes “voter strategies,” but to gain a method that precludes the black hat (spoiler) syndrome from being exploited by dominant special interests. This is a somewhat subtle consideration, which only becomes more tricky if it is assumed that special interests will actively attempt to use this syndrome to manipulate elections.
It seems reasonable to assume that any ranked voting method will be susceptible to black hat manipulation, since it appears obvious that if special interests vigorously promote black hat candidates, voters will effectively be forced to cast their highest rank vote for whatever, generally minimally, acceptable candidate is perceived as likely to defeat the black hat candidates. In fact, this writer has engaged in countless discussions, in which it appeared that, with only four, at most, in a race, most (if not all) reasonably simple methods of ranked voting could enable a vote for a white hat candidate, from the perspective of some individual voter, to eventually lead to the actual election of a candidate that that individual voter perceives as a black hat. And this is a result that would have been avoided if the voter had given a gray hat candidate their highest rank vote. But at minimum, it seems reasonable to assume that a voter would tend to cast his or her first rank ballot for a likely-to-win gray hat candidate, rather than a “long shot” candidate, if a strong black hat is in the race. This would eventuate in the evolution of a closed two-party system.
Two-consecutive runoff voting cannot cause the situation in which a voter causes the election of a black hat by giving a high-rank vote a white hat, or even a case in which a voter perceives a need to give a high-rank vote to a gray hat in order to avoid the election of a black hat. And the obvious reason is that there are no ranks involved in this method. However a “gray hat” syndrome is present, in that, if a black hat is in the race, voters may feel some pressure to include some gray hats of “darker shades” in the first runoff if a black hat is in the race. However, this gray hat syndrome is vastly more benign than the black hat syndrome; for example, a voter could still vote for as many white hats as he or she desired.
It seems likely that the gray hat syndrome would be further ameliorated if a three runoff method is employed. On the other hand, this method requires three consecutive runoffs, which present-day online straw poll voters seem to dislike.
Merely by use of this very simple method, the year 2000 election debacle, in which Ralph Nader was blamed for throwing the election to black hat George W. Bush (by being a “spoiler”), could have been entirely eliminated. Gore and Bush would have received the most votes in the first runoff, and would have faced ONLY each other in the second runoff.
However, Nader would undoubtedly have received 10,000 times more votes in an initial approval-style runoff than he ever did in the ultimately futile general “plurality-style” “election.” of 2000.
So it would have been perfectly safe to campaign for Nader, and we would not have become pushed onto the the “two-party” merry-go-round that is now destroying us. There are simple solutions to our problems, but the Ford Foundation types are determined to divert us into solutions that are total dead ends.
THREE-CONSECUTIVE RUNOFF VOTING:
As mentioned above, two-consecutive runoff voting does harbor a “gray hat” syndrome, since, if black hats are inserted in a race, voters will then feel pressure to include some gray hats of “darker shades” in the first runoff, and this is not an ideal condition for the election of the candidates that the voters find most desirable. If we want candidates that the voters truly desire to be elected, we should minimize the gray hat syndrome, and the best way to accomplish that would be to adopt a three-consecutive runoff voting method. It does require three runoff elections, but it seems that voters would still be more inclined to participate if understood that they could have a real say in election outcomes.
In the first runoff of a three-consecutive runoff method, the approval method is used to choose the six candidates with the most votes, who would go on to the second runoff. In the second runoff, only the two candidates with the most votes go on to the third runoff (so no third candidate could become a “spoiler”), and the one candidate who achieves an absolute majority then becomes the winner.
Totally unlike the abstract, ranked voting proposals of academic game theorists, these methods really are just as simple as they appear. All the counting involves nothing more exotic than simple arithmetic. The public is not so ignorant as many game theorists seem to prefer to believe, and people will get out and vote once they realize they really have choices.
There are many steps that could be taken to make voting easier. Why not give the voters two days to vote, say, the first Friday and Saturday in the month of June, when the weather is comfortable? Silly tricks like declaring election days holidays are not likely to reduce the public’s cynicism. Again, election juries should control each voting station, and all results should be announced publicly at each polling station at the end of each day of voting, before being handed up into larger pools of tabulation. And of course, all ballots should be paper ballots, since computers will always be rigged by people who have powerful special interests to promote. People will vote once they are provided with real choices.
Posted by: blues | July 15, 2008 at 08:29 PM
The only way voting changes in a country is via a tool we call 'revolutions'. They tend to be rather violent.
Posted by: Elaine Meinel Supkis | July 15, 2008 at 08:41 PM
Maybe we should hold a New Orleans style Jazz Funeral for the
Democratic party. We could wrap its coffin with a flag and
convince everybody that the darn thing passed away happily
in its sleep.
We could have Dr.John sing, "I'll be glad When You're Dead You
Rascal, You".
Then the coffin would be catapulted off a garbage scow into
the turning basin, ready to be borne off by the tides down
into that oily dead zone in the Gulf of Mexico.
Posted by: Gary | July 15, 2008 at 08:42 PM
After we wrap the anchor around the GOP's neck.
Posted by: Elaine Meinel Supkis | July 15, 2008 at 08:57 PM
@Christian W
Thanks for the link! I am glad we are now fully clear that a MANDATE has ABSOLUTELY NO LEGAL ramifications to Congress.
His job is merely to sell what has already been planned to congress people so they can pretend to be watching out for our interests, which they are not.
@blues: I will have to do some more research on voting theory. After what I have learned from blackboxvoting, I pretty much have written off the possibility of honest vote counting anyway, making the theory pointless until resolved. Also, do some research on how the RAND corporation has applied aggressive Game Theory to achieve total societal control and destruction.
http://www.blackboxvoting.com/
@PLovering: Brilliant discovery of the book "The Nameless War"!!!
It's even available online. Will read ASAP.
THIS IS THE TYPE OF WORK WE NEED TO BE DOING!
http://www.sweetliberty.org/issues/wars/nameless/intro.shtml
http://tinyurl.com/5gnmsk
Posted by: GK | July 15, 2008 at 09:19 PM
Sorry, it is:
http://blackboxvoting.org/
Posted by: gk | July 15, 2008 at 09:21 PM
Elaine, I never addressed the issue of whether a revolution would be required for the establishment of a workable democracy. My guess is that it would likely require a rather forceful revolutionary scenario. But that is not my issue at all. Regardless of the methods to bring it about, we should have definite things to demand. Otherwise, we will get absolutely nowhere, no matter what happens.
So I say, DEMAND A WORKABLE DEMOCRACY!!!
Even if you tear down everything, it's totally pointless unless you have specific demands. Without them, nothing the people do will ever go anywhere at all!
So one vital thing to demand would be consecutive runoff approval democracy. That could achieve something really substantial.
Before you even get started, regardless of the methods of achieving something, YOU MUST HAVE SOME GOALS. There is no way around this. So I am proposing some meaningful goals. Someone must surely do that. If you have such goals, at least you have something coherent to struggle for. What I am asking for is totally specific; it's not something vague and frilly. So why not think about it? It is the only meaningful first step. You may not know how to get positive change, but you must have something specific to demand beyond some nebulous feel-good "agenda." So start thinking about these things!!!
Posted by: blues | July 15, 2008 at 09:41 PM
Correct. I am just pointing out the ultimate tools. See, if we ask politely, it won't happen. Just like jerrymandering: twice, the US got rid of this and it came right back because politicians love it. They want to keep power.
Posted by: Elaine Meinel Supkis | July 15, 2008 at 09:55 PM
The Black Box Voting people are focused exclusively on the issue of election hacking, NOT election methods. Maybe the best site for election methods would be the wiki:
http://wiki.electorama.com/
But this site is currently off-line for some reason. If you look on the left there, and click on "special pages," > "all pages," the page that lists my entry "Consecutive Runoff Approval" should be listed.
The election methods crowd is mostly focused on complex and unworkable mathematical/ game theory oriented methods, that are interesting to political science mavens, but which are beset by tricky paradoxes and complications that render them useless for the implementation of truly effective voting systems. The fancy one-off methods (like "IRVs") would not really eliminate the Black Hat dilemma at all.
Posted by: blues | July 15, 2008 at 10:02 PM
Elaine.....
I think the GOP is already on the bottom of the sea, chained together with the 100 lawyers from the bus that went off the cliff with a couple unsold seats.
But who knows ? According to "polls" Mack the Kain is gaining on
BarracksO. and only a couple pints seperate them. MacCain may well be able to govern from the bottom of the sea ! After all, Bush has governed from the bottom of Exxons barrel for 8ys.
and almost nobody noticed.
Only two more pints seperate me from sobriety now and I tink
I'm headed for cooler pleasures along with my spicy shrimp etouffe.
Posted by: Gary | July 15, 2008 at 10:47 PM
Hey Mr Blues
I like your voting runoff take.---the 3 consecutive runoff scenario.
But but but... This still depends on a democratic information
system (media) which depends on some publicly financed media
coverage. Which depends on a middle class which depends on good rigorous schools which depend on a public that reads more than watch the telly.Which............ Och !
Otherwise we will get 6 near identical stooges after
the first go-round.
Posted by: Gary | July 15, 2008 at 11:01 PM
I always encounter this issue, Gary. The people over at My Left Wing had similar questions. First, if the voting methods are a ritual, not about real choice, it doesn't matter how well informed we are. We can never vote for Nader, for example, because then we get Bush or McCain, and not the about-as- bad Obama. This will be so no matter how astute the voters may be. The black hat sees to it. So why bother about being informed at all, since you have no say, really?
The educational system is merely another disaster in the making. When I was young, the schools actually tried to teach me something. It wasn't great, but it wasn't miserable failure. Nowadays it truly is miserable failure. In many schools the kids sit there, in many cases virtually all day long, learning essentially nothing. The testing craze has been catastrophic. One writer said it's like spending all day weighing the cattle and not feeding them.
The Monopoly Mass Media is another disaster. Essentially, the basic concept of "freedom of speech" has been totally subverted by "freedom of markets." The people who sell you the cars and whatnot control all that you see and hear. The Rupert Murdoch effect. Here's a load of old Rupert:
The Guardian
Their Master's Voice
by Roy Greenslade
February 17, 2003
((----- Copy & Paste - W/O The Line Breaks -----)
http://www.guardian.co.uk/media/2003
/feb/17/mondaymediasection.iraq
«Most revealing of all was Murdoch's reference to the rationale for going to war, blatantly using the o-word. Politicians in the United States and Britain have strenuously denied the significance of oil, but Murdoch wasn't so reticent. He believes that deposing the Iraqi leader would lead to cheaper oil. "The greatest thing to come out of this for the world economy...would be $20 a barrel for oil. That's bigger than any tax cut in any country."»
«He went even further down this road in an interview the week before with America's Fortune magazine by forecasting a postwar economic boom. "Once it [Iraq] is behind us, the whole world will benefit from cheaper oil which will be a bigger stimulus than anything else."»
Yeah sure Rupert...
This is the guy who seems to own most of what we see and hear. So if it's so vital for us to have good information to get by in the world, why are we in thrall to this tin-horn whatever? One reason would be that, really, we have no need of good information. Because the basic decision procedures for our getting by are completely broken. And not just in the U.S. Democracy, you understand, simply does not, cannot work. And that is all because of the black hat dilemma!
If you want to control a population without absolute dictatorship, you do it by building layers of transparent oppression. It's all a matter of having enough layers. Let's say you have a tinted window that allows 50% of the light through. Two layers give you (1/2)*(1/2) = (1/4) the amount of light coming through. Three layers is (1/4)*(1/2) = (1/8). Five layers is (1/2)*(1/2)*(1/2)*(1/2)*(1/2) = (1/32). Which is approaching total darkness. Take off any layer, and you instantly get twice as much light.
That's the secret.
Posted by: blues | July 16, 2008 at 03:46 AM
I don't go to My Left Wing anymore. It's been totally, absolutely taken over by pro-zionists who will not tolerate anyone who finds the least fault with Israel. I was quite shocked by that; they can get downright nasty. I now sometimes go to a site that was set up by one of the site's former moderators who apparently was banned in connection with anti-zionism. (It's Wild Wild Left, but don't surge over there like a flock of rabid sheep. It has a quite different context. But Diane G who runs it does remind me of Elaine in some ways.)
Posted by: blues | July 16, 2008 at 04:26 AM
The peace movement died because of the huge split on the left concerning Israel. There is no peace movement anymore. People try to get it rolling but no one shows up because the fight over condemning Israel's obviously illegal ethnic cleansing comes up and all is shattered. All the leftist sites are now pretty much useless due to an inability to debate this vigorously. The Empire is dying and no one is united on anything.
About the media: it is mostly owned by Zionists. They want us to go to wars that make Zionist stronger in Jerusalem. If one doesn't read international news, one lives in this dim, dark box here that has nearly zero real information that matters.
I lost most of my Jewish readers here because I talk about the Verboten things like ethnic cleansing by Jews, for example. The Jews in America happily talk, nay, SCREAM about ethnic cleansing in Africa but then stomp on anyone who makes the obvious connections to their own private projects.
This is classic schizophrenia. This sort of schizoid thinking has fractured the US in other ways. The moralists in the GOP want to run around like gnomes, stealing money so they can have wild orgies, while condemning others over sex issues. It is beyond pathetic.
The US elections have several unfortunate features: everything is about sex, skin color and bloopers. Very little is about substance, nay, nearly nothing is about substance. I liked Ross Perot because he forced everyone to talk about the economy, outsourcing and free trade.
Note the silence from his sector! He and I and lots of other people who used to appear on TV no longer can appear there. We are censored, totally and completely.
Without an open debate carried by honest media owners, we get a total failure of the systems. The internet certainly has pried some fingers off of freedom's throat but note that we are still steadily losing our freedoms. Look at Obama's recent vote to spy on citizens.
Posted by: Elaine Meinel Supkis | July 16, 2008 at 07:51 AM
I am through with the self-appointed "peacenik" zionists. I want nothing to do with them. People who try to claim that, after all that has transpired, the Israel that has systematically starved and slaughtered defenseless Palestinians, and DEMANDED THAT THE U.S. LAUNCH OFF INTO RUINOUS WARS THAT WILL DESTROY THE U.S. cannot be supported by peace advocates. They should try to pressure Israel to stop the madness of Israel. The effort to stop the U.S. from its own folly is a task for the rest of us. There simply is zero room for zionists in any peace movement. They are loaded with Likudnik moles who will subvert any movement for peace.
My own blogs are dormant, but I would not tolerate any comments from pro-zionists. They are thoroughly infiltrated with stealth moles who would subvert everything. Frankly, I would simply immediately delete any pro-zionist comments. If there are any serious peace advocates who think they can support zionism, they would have to go elsewhere until they demonstrated an ability to distinguish themselves from the stealth-hawk moles.
We could get by just fine without this distraction. I am fully prepared to draw this line, at this point.
Posted by: blues | July 16, 2008 at 08:38 AM
Watch out. Black box voting group is a fraud.
Posted by: Anthony | July 16, 2008 at 08:39 PM
I have have relatively extensive dealings with Bev Harris' Black Box Voting (ORG) ( www.blackboxvoting.org ). I am 99% sure they are totally on the level.
The site blackboxvoting.com is a business that merely sells Bev's book. Bev advises people to avoid the .com site.
Posted by: blues | July 17, 2008 at 03:54 PM
Frankly, I censor no one. And there are creepy people out there. I figure, people have brains. If they wish to debate with me, OK. I am quite capable of chatting with anyone, even gnomes.
Posted by: Elaine Meinel Supkis | July 17, 2008 at 04:31 PM