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Now that the $700b-to-infinity bailout is passed, maybe that arms sales is a deliberate attempt to anger china, just to trigger some kind of financial retaliation that will destroy most medium and small banks, and JP + GS will buy up all the broken pieces to sell to the government at max value... Just before they both get eaten by the derivatives beast...

This will be much more fun to watch, if it isn't for that impending approach of ww3.


Instead of "Groundhog Day" (my favorite movie of all time) I think "Beowolf" and its discussion of the consequence of unlimited greed and ambition might fit even better.


Elaine Meinel Supkis

Beognome. The movie about the battle between a bunch of drunk gnomes and the Derivatives Beast which becomes visible only after eating banks.


The arms sale does not matter that much since Taiwan is on friendly terms with China atm
Sounds more like trying to make the 700 B to pay for the rescue

Blunt Force Trauma

'Beognome'! Ha, ha, ha, how suiting.

GK's suggestion is plausible, but the latest animated soft porn offering of the tale was terrible.

This was, in my opinion, the better version:


As far as Irael is concerned, it's good that the IAEA is now going to bug Israel into 'fessing up on it's nukes; since the world doesn't know how many they have and is non-signatory of the NPT, yet whines about Iran and their legal nuclear power program that Israel claims is for making weapons, when clearly, it is not and the IAEA has, after many inspections, claimed that it is not.

Blunt Force Trauma

....speaking of collapse....

Listen for the buzz phrases this week, such as; "difficult to value" and "hard to price" as we may see the DOW tank all on it's own starting tomorrow morning; as it did last Friday afternoon AFTER the vote.

That, by the way, has to be an all-out new speed record for a broken "promise". The bill will save the markets and see them move upwards. We need this bill. 'Yes' vote. PLOP.

It's all B.S. anyway. I suspect the LIBOR will remain at it's current level and may even rise signalling banks to not trust each other even more so strangling credit beyond it's already oxygen-starved blue phase. Isn't this how we got into this in the first place?

Bunch-o-goofs. Anyone want to guess when the next "bailout" will be? I'm throwin' mine in for Tuesday.

Wee, more funny money. Americans are already closer to 3000 bucks poorer after Friday; why not more?


It's been 50 years since the "Who lost China" spasms, almost time for the sequel "Who Lost Formosa."
Since Formosa will be reabsorbed in the PRC just as Hong Kong, Macao, QuemoyandMatsu, have already been. Letting Formosa have xBillions of American military dross is just sweetner for the PRC.


@BFT: Meanwhile, expectations are building for an interim rate cut by the FED before its next meeting at the end of this month. Short term treasuries will be paying 0 or negative nominal interest rates. Not exactly the Japanese carry trade but close.

Blunt Force Trauma

CK said:

"Meanwhile, expectations are building for an interim rate cut by the FED before its next meeting at the end of this month."

I know. Can you f-ing believe it?!

"Short term treasuries will be paying 0 or negative nominal interest rates."

3 to 12 month term rate bonds already are and have been since last month.

Blunt Force Trauma

Did Mr. Hopey Changey Unicorn Man do this or not?

"Several Democratic members of the House of Representatives Friday said calls from Barack Obama helped convince them to switch their votes and back a 700 billion dollar Wall Street bailout."

If he did, well, what a President he'll make. More of the same, different pile.

But, you know; he can do no wrong. Especially with his broodish clut following. I keep having visions of Jim Jones for some strange reason....


Blunt Force Trauma

Hey CK, more...

Flight to Treasuries may spell disaster for investors (Investment News)

"The financial rescue plan, which Friday was passed by Congress and signed by President Bush, will likely "accelerate" a stock market recovery, said Jim Lowell, partner and chief investment strategist of Adviser Investment Management Inc. of Newton, Mass., which manages $1.2 billion."

Sure, Jim. "Accelerate stock market rocovery". Just as it did on Friday afternoon, right? Ass.


Bond rates, according to Bloomberg:



Watch and consider a new way: http://www.addendummovie.com/


On a slow news day we could take a poll.

What will be the new "reserve" currency?

And when will that currency emerge?


Watching the Clock in New York:

Population of America: 304 million
Within 24 hours it grows to 3 billion a day
since Sept. 28th, 2007
That averages about 34,000 for each
American, now pay up.....................


Elaine, to my knowledge, hyperinflation has never occured during falling home prices. I know the Fed is going to "print" money, but don't you think the banks will do the same thing as the Japanese banks did under a similar scenario? That is.....hoard money. It seems that it would result in deflation. I suppose it depends on one's definition of inflation but if the debased currency will not be lent out then it is not really mis-representing goods and services. Hyperinflation seems very possible but I would think it would be down the road a bit. At least until a bottom is reached. Any thoughts on this?

gg battams

Hypo Real Estate,german bank on verge of bankruptcy after deal falls thru/italian bank unicredit spa.in deep trouble .europe is not going into recession ?they said/yeah right i believe them


This is the tail-end of an article posted September 7th by Bob Moriarty on his website: www.321gold.com
The whole article is worth a read.

"Today, Sunday September 7th, the US government announced formal nationalization of Fannie Mae and Freddie Mac. A big reason was that the Bank of China was screaming like a stuck pig because they are sitting on $1 trillion in Fannie Mae and Freddie Mac bonds and treasuries. What does that mean for gold and for the dollar?

Here's what to consider. Let's say a nice couple in Miami with an income of $100,000 bought a $600,000 home two years ago with a $500,000 mortgage guaranteed by Freddie Mac. Those are all perfectly reasonable numbers.

The husband lost his job and now they can't keep up with the mortgage payments and are in foreclosure. The house is now worth $400,000. The government steps in to help. But who do they help and how? The couple really couldn't afford a $500,000 mortgage on an income of $100,000 in the first place and the husband is now collecting unemployment. How can the government help them? It can't.

The house is now worth only $400,000 with a loan against it of $500,000. How can the government help?

Answer: they can't. The government should let the homeowner lose the house they can't afford and the bank lose the money they shouldn't have loaned.

But the US government doesn't want anyone to feel any pain, much less the Bank of China that loaned us every cent to pay for a useless war in Iraq. So the government is going to bail out Fannie Mac and the Bank of China. At your expense.

The US government isn't collecting enough taxes to pay for all the money they are spending; we are $100 trillion in debt. So they are going to print dollars until they are totally worthless. Fannie Mae and Freddie Mac will pay off their bonds that the Bank of China owns.

In Zimbabwe dollars."


First the Irish guaranteed all the deposits in 6 of their Irish based banks.
The English banking establishment went gonzo as deposits were pulled from English banks and ran to Ireland.
Then "leaders" of the EU tried to get together and develop guarantees.
Worked not at all
Then the Greeks guaranteed all their bank deposits.
The Italian govt strutted as to how no criminals were going to speculate on Italian banks. ( Unnecessary as Italian banks are already all criminal )
Now the Germans appear to be guaranteeing all the deposits in their banks.
Oh and the USA is now guaranteeing up to 200K of deposits instead of the old 100k.
From my reading ( limited and cynical ) the European banks do not trust each other at all and do not trust the Big name american banks either. Meanwhile Citi is suing and has acquired a temporary restraining order against Wachovia and Wells Fargo ... There is a HUGE tax loss carry forward available to whichever bank sucks up Wachovia thanks to a change in the IRS code that slipped into the books a few days ago.
Meanwhile the lard bailout bill does appear to have some very nice things in it for ME.
Yes I will get to expense some of my new furnace and my new windows and siding against my taxes.... maybe.


Let me be frank. If I were tasked with developing a plan to utterly destroy the USA, I could not have come up with a better one than our current "leaders" have followed. Also, frankly, from my personal perspective, the economic side is somewhat secondary to the productive system (mostly industry) in terms of "big picture" significance. We do produce bombers and bombs and rockets, etc., but this cannot continue if the rest of the productive system is lost.

For example, we presently appear to have no supersonic bombers at all. The B-1 was supposed to be supersonic, and originally was, but stealth items were added, and now it is not quite supersonic anymore. according to Pravda (this is generally backed up by "Western" sources):

(This should be read!)

|¯ The Tupolev Tu-160 is a supersonic, variable-geometry heavy bomber designed by the Soviet Union. The Tu-160 is the heaviest combat aircraft ever built. The aircraft is similar to the B-1 Lancer, but 430mph (692 km/h) faster than the Lancer, and possesses greater range and payload capabilities. Produced 10 years later than the B-1, it flies at 10,000 ft (3,048 m) lower maximum altitude. _|

According to "Western" sources, the Tu-160 was designed with stealth in mind, and its engines have stealth internal components. So, it is "born steathier," and is much faster than the B-1. I have read that our current weapons systems actually incorporate circuit chips from China that are absurdly sensitive to electromagnetic pulse. And I read the Russians actually use advanced vacuum tubes because of their relative immunity to EMP. From my own experience, I can assure you that vacuum tubes must be something in the neighborhood of 1,000,000 time more resistant (if not more) than typical MOS semiconductor chips. Shielding helps, but is very tricky and probably unreliable, since EMP pulses can be produced anywhere in the RF frequency spectrum, and no shielding is perfect. (Maybe it would be if comprised of cryogenic superconductor material, but I think the vacuum tubes would be much simpler and more reliable. Superconductors can only handle so much current.)

I actually view the (collective) national possession of a complete productive system in much the same way as some readers here view (personal) possession of gold. But a productive system turns out food, medicine, and products of all kinds, whereas gold does not.


Dear Elaine,
I had the luxury of eating at Waverly last night in Manhatten. The men at the table next to me were bankers from Morgan Stanley enjoying the fare and talking about Morgans business. THEY WERE TERRIFIED. Depression,panic,fear,no-understanding. These guys were literally shitting in their pants. The word DERIVATIVES was used numerous times. I was dining with a friend on the sell-side of Wall st. who overheard the comments as well and he agreed with them. I really think Wall St. is screwed up real bad from this. I personally thought alot of this was consolidation of power in NY by the FED by bankrupting everyone by pulling in credit lines to whomever they wanted and enriching JPM,C,BAC,GS. However, Iam convinced you are 100% right. This is an outright total bankruptcy from derivatives of all of Wall St and most likely all of the USA.


I respectfully disagree with you Ralph.

I still think this is about consolidation of power in NY by the FED bankrupting everyone by pulling in credit lines to whomever they wanted to enrich a few.

What's happening, I think, is that the concentration of power is so intensified that some (those you overheard) of those who simply assumed it was being concentrated on their behalf (ie thought power was being concentrated to them, for them) are now in fact being cut out of the action. I believe this in part explains the confusion in Washington and the temporary defeat of the bailout.

The elite is not monolithic and there is competition between elite factions. Some factions lost out here. Overhearing some factions complain is not evidence, however, that all factions lost, are bewildered, or are on the way down. Paulson and Bernanke weren't feigning anxiety and distress--they were really sweating. Their faction was feeling some heat. They could have lost. They didn't-- they pulled their fat out of the fire. The ones crying now we'll not likely see on TV or hear about through other media. They'll bitch in restaurants--they're gone, they're powerless. It doesn't mean all of them are.


Thanks for the heads-up, Ralph. This is precisely the sort of tip I would expect if this was all going to happen according to the signs. Oh fuck...

"Beyond the reach of human range, a drop of hell, a touch of strange" — Steven King

Bob Chapman's International Forecaster

|¯ A dish of Bailout with a side of pork, shareholders vaporized by Derivatives Death-Star, We all await the financial markets implosion, No problems solved by the bailout, Stay prepared for a full shutdown of the financial system with some cash on hand, Credit default swaps unregulated point in the chain...


|¯ The $700 billion bailout, a mere sideshow, sweetened with 150 billion in pork, has now been approved so that Wall Street can continue to game the system and its hapless suckers, the American sheople. Just put some pork in, and the hungry piranha in Congress would legislate their own mothers into slavery for a nice juicy morsel of that pork. And never mind the moral hazard dripping from the pork, because that makes it taste all the sweeter. _|

Bob Chapman is nominally "conservative," but I heard him on Coast To Coast, and am convinced he is a great guy. And deadly accurate. Oh fuck.

Elaine Meinel Supkis

The huge hyperinflation years of the 1970's featured a collapsing housing market. In NYC, it literally burned up whole neighborhoods. I bought a partially-burned house for a song and rebuilt it. This is how I made a lot of money back then. Housing didn't really begin to rise until the early 1980's after inflation was suppressed by Volcker.


I am always mentioning Cult of Life News over at Wild Wild Left. In any fairness, they are a GREAT online community, and I should mention them here:



Uh Oh. For the first time, the little bastard Tiny Earl screwed me. Not a good sign. Wild Wild Left:

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


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