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Archive for October 2010

Is the Elite Destabilizing the World on Purpose?

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from The Daily Bell
Originally posted October 27, 2010

 

Problem, Reaction, Solution: “Crisis is an Opportunity” … In May of 2010, Dominique Strauss-Kahn (left), Managing Director of the IMF, stated that, “crisis is an opportunity,” and called for “a new global currency issued by a global central bank, with robust governance and institutional features,” and that the “global central bank could also serve as a lender of last resort.” However, he stated, “I fear we are still very far from that level of global collaboration.” Well, perhaps not so far as it might seem. – Market Oracle

 

Dominant Social Theme:
Capitalism is prone to booms and busts and it is natural, to point fingers when times are bad. Get over it.

Free-Market Analysis:
THIS IS A VERY LONG AND LEARNED ARTICLE (excerpted above) FROM A FORTHCOMING BOOK BY ANDREW GAVIN MARSHALL ON GLOBAL GOVERNMENT, from Global Research Publishers, Montreal. It was just published online yesterday, interestingly enough on the same day we published our modest analysis of power elite, global plans entitled Why the West Is Losing. The two articles make an interesting point-counterpoint presentation in our view, so we will try to analyze Mr. Marshall’s brilliant article (keeping in mind it is part of a longer book) within the context of the Bell’s admittedly idiosyncratic perspective.

First a little background. Marshall is apparently a close associate of the courageous academic editor Michel Chossudovsky who runs the alternative-news website Centre for Research on Globalization. Marshall apparently contributed three chapters on the history of Western economics to a recent book Chossudovsky edited. Here is some background on Chossudovsky from Wikipedia:

Michel Chossudovsky is Director of the Centre for Research on Globalization (CRG). He has taught as visiting professor at academic institutions in Western Europe, Latin America and Southeast Asia, has acted as economic adviser to governments of developing countries and has worked as a consultant for international organizations including the United Nations Development Programme (UNDP), the African Development Bank, the United Nations African Institute for Economic Development and Planning (AIEDEP), the United Nations Population Fund (UNFPA), the International Labour Organization (ILO), the World Health Organisation (WHO), the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). In 1999, Chossudovsky joined the Transnational Foundation for Peace and Future Research as an adviser. … The Centre for Research on Globalization is “committed to curbing the tide of globalisation and disarming the New world order.”

Chossudovsky and presumably Marshall approach economic “conspiratorial” analysis from a somewhat Leftist perspective. Here is the crux paragraph in the article. It appears about midway, as follows: “Simon Johnson, former Chief Economist at the IMF, wrote an article in May of 2009 explaining that the problem with most third world nations (’emerging market economies’) is that the governments are so closely tight-knit with the corporate and banking elite that they form a financial oligarchy, and that this is essentially the same problem in the United States.

He wrote that, ‘the finance industry has effectively captured our government,’ and ‘recovery will fail unless we break the financial oligarchy that is blocking essential reform.'”

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No Mr. President, Larry Summers did not resolve the financial crisis for a pittance, he just papered over the problem

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by William K. Black
Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle

Originally posted October 28, 2010

I PASSED UP THE OBVIOUS TITLE: “HECKAVA JOB, LARRY!” THAT WAS THE MOMENT OF PRESIDENT OBAMA’S appearance on The Daily Show with Jon Stewart that set all Americans cringing. Yes, he really said that Summers “did a heckuva job.” The candidate that was gifted the opportunity to run against the legacy of one of the worst presidents in U.S. history has, as president, used Bush as his role model to continue many disastrous policies. It was strangely fitting that he would channel Bush’s infamous praise (“Heckuva job Brownie”) for the FEMA chief who failed New Orleans so badly in the hurricane.

President Obama understandably wishes to focus attention on the economic disaster he inherited from President Bush. But Jon Stewart’s question to him, which led to the president’s gaffe, correctly asked about the message that Summers’ appointment sent about the administration’s commitment to fundamental change.

Summers had financial red ink on his hands at the time he was appointed. He was Rubin’s chief minion in the successful effort to defeat effective financial regulation and supervision. (Yes, the effort was bipartisan and the Republican leadership shares in the guilt.) Summers was not simply wrong, but also arrogant and brutal, in blocking effective regulation at the SEC and the Commodity Futures Trading Commission. Summers was made rich by Wall Street in one of those sordid consulting arrangements designed to buy influence and reward past and future favors.

President Obama’s appointment of Summers as his chief economic advisor made the administration’s overall response to the crisis predictable. (Robert Kuttner gives a detailed explanation of the policies that Rubin’s protégés championed in his new book, A Presidency in Peril.) The response would follow the disastrous Japanese model that has harmed their economy and damaged their integrity.

The dominant characteristics can be summarized quickly: (1) the government would act for the benefit of the largest financial firms and their CEOs, even when they directed massive frauds, by (2) engineering a cover up of the banks’ losses and the CEO’s misconduct; (3) the administration would use the fictional reports generated to conduct the cover up to declare victory (due to their brilliance); and (4) the same strategy would impair the recovery.

The strategy was also an assault on integrity, the rule of law, and the core precepts of the Obama campaign for president. This is why we warned from the beginning that the cover up could enrage the nation and make him a one-term president.

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The Economics of the World Apartments

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by Gregory Wyche
Originally posted Oct 26 2010
perfectpitch-media.com

Why pretending to have money is a bad idea…

IMAGINE AN APARTMENT BUILDING REPRESENTING THE WORLD, and imagine different countries residing in the building, each within their own apartment. Each of the tenants in the building own and produce various things. Imagine then, a long time ago the tenants began trading with each other to obtain things they didn’t have. A few of the tenants were lucky enough to have gold mines. It turned out gold was something everyone in the building liked. As time went by each apartment ended up owning some gold as they traded goods with the tenants that had mines. Gold was rare, ever- lasting and considered beautiful. It was worn by both men and women and used to symbolize intimate relationships.

An agreement was made that rather than having to exchange one good for another (which was cumbersome and inefficient) the building would use gold for medium of trade. This caused gold to become currency. Some apartments had used salt as currency as it was once very rare. Later salt was discovered almost everywhere which caused it to lose its rarity (and so devalued) and it was no longer suitable as currency.

Thousands of years went by and some of the tenants decided to use paper notes that would represent the gold they owned. Soon each tenant used their home printers to make notes and paper money was born. This made trade easier since gold was heavy and hard to carry from one floor to next; after all, the building had not yet installed elevators. The ability to exchange paper money for gold created trust between neighbors and trade increased. After a while the tenants of the world apartments enjoyed a wide variety of goods they purchased from each other with notes back by gold.

From time to time tenants disagreed with each other. If the disagreements were serious games (war) were played to resolve them. The winning apartment received a prize from the looser. Games were expensive to play so many tenants began to avoid them. In the 1960’s two tenants (USSR and USA) played a very expensive game in Southeast Asia’s apartment. The game dragged on and in 1971 some tenants worried about the value of the US money.

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Yes We Can…

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Courtesy of William Banzai:


Trigger Points, Black Swans, and other unpleasant realities

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by Giordano Bruno
Originally posted October 27, 2010

Neithercorp Press

AN AVALANCHE IS NOT AN “EVENT”, IT IS AN EPIC; A SERIES OF SMALLER EVENTS DRIFTING AND COMPACTING ONE AFTER ANOTHER until the contained potential energy reaches an apex, a point at which it can no longer be managed or inhibited. A single tremor, an inopportune echo, an unexpected shift in the winds, and the entire icy edifice, the product of countless layered storms, is sent crashing down the valley like a great and terrible hand.

In this way, avalanches in nature are quite similar to avalanches in economies; both events accumulate over the long span of seasons, and finally end in the bewildering flash of a single moment.

The problem that most people have today is being unable to tell the difference between a smaller storm in our economy, and an avalanche. Very few Americans have ever personally witnessed a financial collapse, and so, when confronted with an initiating event, like the stock market plunge of 2008, they have no point of reference with which to compare the experience. They misinterpret the crash as a finale. Untouched, they breathe a sigh of relief, unaware that this is merely the beginning of something much more complex and threatening.

So, without personal experience on our side to help us recognize a trigger point incident; the catalyst that brings down our meticulously constructed house of cards, how will we stand watch? Will we miss the danger parading right in front of our faces? Will we be caught completely off-guard?

The key in avoiding such a scenario is in identifying the primary pillars of our particular financial system, and tracking them carefully. Once we are able to cut through the haze of distractions and minor events promoted mostly by the mainstream media, and focus on that which is truly important, our ability to foresee danger greatly increases. But what are the crucial mainstays of our economy, and what kind of disastrous occurrence could possibly bring them tumbling down?

Mortgage Crisis Redux

The health of property markets is a vital indicator of the stability of almost any country, but most especially in the United States. The reason why the bust in mortgage values is so dangerous to our particular economy is because Americans allowed themselves to become completely dependent on debt in order to sustain their consumption. We have been surviving on mortgage loans and Visa cards for nearly two decades! The fantastical boost in stocks and retail during the late 90’s and early 2000’s was an illusion built on artificially low interest rates and easy credit. Of course, it doesn’t help that corporate interests outsourced most of our industrial foundation to the third world leaving us with an emaciated jobs market utterly reliant on the service sector. Many people were given few options besides taking loan after loan using homes they couldn’t afford in the first place as collateral.

Regardless, without the support of solid industry and innovation in a system to supply employment opportunities and create true wealth (not debt), we have only “derivatives” and toxic securities, worthless bits of paper representing liabilities that will never be repaid. Now that these contracts are known to be worthless, there is only one thing left to prop up the economy; fiat printing of the U.S. dollar.

Back in 2008, I called the bailout of Fannie Mae and Freddie Mac a “black hole” of debt which would siphon the last remaining vestiges of wealth from the American taxpayer, and this is exactly what has happened. Every quarter, MSM analysts claim the housing market has “bottomed” and is ready for a rebound, yet, every quarter the mortgage crisis gets just a little bit worse. It is now projected that Fannie and Freddie could end up costing taxpayers over $1 Trillion:

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Imminent Big Bank Death Spiral

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by Jim Willie CB
Posted originally October 28, 2010
www.GoldenJackass.com

Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

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THE MORTGAGE AND FORECLOSURE SCANDAL RUNS SO DEEP THAT ORDINARY OBSERVERS can only conclude the US financial foundation is laced with a cancer detectable by ordinary people. The metastasis is visible from the distribution of mortgage bonds into the commercial paper market, money market funds, the bank balance sheets, pension funds under management, foreign central banks, and countless financial funds across the globe.

Some primary features of the cancerous tissue material are allegations of mortgage bond fraud, major securities violations, absent linkage to property title, income tax evasion, forged foreclosure documents, duplicate property linkage to single mortgage bonds, NINJA (no income, no job or assets) loans to unqualified buyers, and more. In fact, more is revealed it seeems each passing week toward additional facie to high level and systemic fraud. The world is watching. The growing international reaction will be amplified demand for Gold, from impressions that the USDollar & USEconomy have RICO racketeering components extending to Wall Street banks and Fannie Mae mortgage repositories.

The centerpiece question, when allegation of the US bond fraud is coupled with European sovereign debt distress, comes down to WHAT IS MONEY? The answer is Gold and Silver and not much of anything else. Other assets like crude oil or farmland are effective hedges against tainted money, but when they contain debt tethers, they too are vulnerable. Huge flows of funds are fleeing traditional asset groups. Some mistakenly still believe the USTreasurys to be a safe haven. A shock of cold water comes to them when that bubble goes into reverse perhaps several months later after reaching 2% yields. The big magnificent epiphany in the last couple years has been that a house is not a hard asset, but rather a debt instrument extension. Important questions have arisen as to what assets are free from counter-party debt risk. The grand demands for physical gold prove that the futures gold contracts are not money either, but tainted Wall Street and London securities contracts that keep the system going.

The big banks have been called too big to fail. They are too big to plow under without removal from power of the bankers themselves. They are too big to permit their balance sheets to be liquidated without a US banking system seizure together, and a 30% to 50% additional housing market price decline. They are too big to send into receivership without igniting a credit derivative sequence of explosions. They are too big to block the widespread illicit practices and enforcement of law of regulations. However, a wondrous spectacle has begun to shine light:

The mortgage & foreclosure scandal could turn out to be the big US Bank tombstone epitaph, as bank revenues from mortgages slide, as home owners tend to refuse on mortgage payments, as court cases unfold in full view, as class action lawsuits provide evidence on racketeering at a systemic level, as MERS and REMICs are isolated by the courts for further investigation. Time will tell. Time will reveal extraordinary efforts by the USCongress to pass additional laws that grease the bank pathways, past and present. Remember back in July 2007 when Bernanke claimed this was just a subprime mortgage problem. The Jackass called it an absolute bond contagion from its origin, which it surely turned out to be.

THE GIGANTIC ACHILLES HEEL EXPOSED

Two critical elements have been identified. The MERS electronic title registry system was designed to facilitate recording of property titles as associated mortgage bonds traded freely and changed ownership hands. Unfortunately, the title database has no legal standing, as declared by several state courts, including some supreme courts. Banks or financial firms holding the mortgage notes cannot team with the title database and force eviction during the home foreclosure process. That is the first gaping flaw.

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Orwell targets Bernanke: An unteachable hole in the air

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by Frederick Sheehan
Posted originally October 21, 2010

On Friday, October 15, 2010, Federal Reserve Chairman Ben S. Bernanke delivered a dishonest speech: “Monetary Policy Tools and Objectives in a Low-Inflation Environment.” What follows is not a critique of the talk, since that would be redundant. Please see one of my recent articles “Exploiting Bernanke” (September 21, 2010), which discussed the anticipated speech of October 15, 2010. Also see, “Central Bankers are Paid to Lie – Buy Corn” (October 5, 2010), which showed how Federal Reserve Chairman Arthur Burns fibbed his way through the 1970s. Investors who either believed him or were not adept at translating signals from the real world suffered.

Bernanke’s mendacious speech confirmed my general investment advice in “Central Bankers are Paid to Lie”: “Courses of protection include buying farms (including machinery companies, grain commodity funds, water rights, and desalinization companies), as well as precious metals, mining and drilling companies, and freeze-dried food.” As a guess, Bernanke’s current intention (this will change, and change often) is to add a trillion dollars to the economy. Such a wild, mad experiment has never been attempted before, outside of Argentina, Zimbabwe, and such.

The reason last Friday’s speech could be analyzed three weeks before it was delivered is Bernanke’s predictability. He will do nothing that veers from the course he found convenient for personal advancement three decades ago. He has neither said nor would dare process a thought that deviates from his doctoral thesis.

Even the title of his latest speech is a lie or stupid, as you wish – broadcasting as he did our “Low-Inflation Environment.” Inflation is practically everywhere that counts: food, insurance premiums, utility bills, tuitions. (“Where it counts” does not include the deflation of what really counts: wages, net wealth, house prices. This is why the “inflation vs. deflation” question is false.) Commodity prices keep rising, partially because there is greater demand than supply; partially because we are used to seeing oil and corn quoted in dollars. Producer and consumer prices generally lag commodity prices. The length of the lag differs. Anywhere from three months to one year captures most instances, under normal conditions. (When further depreciation of the dollar against commodities is anticipated, the lag will be compressed.) The dollar has fallen against a basket of currencies by 13% over the past 18 weeks. It is prudent to at least hedge for a contraction of this lag.

Bernanke’s speech was characteristic. He turned logic on its head and ignored the most debilitating consequences of his past actions. The Fed chairman used official government numbers to claim inflation was too low. Homage to government inflation calculations should have, alone, been enough for the media to ignore anything else he said. Of course, he was dutifully quoted and taken at his word.

It was not that long ago when an economist who claimed inflation was too low would have lost credibility. Bernanke stated “that FOMC participants generally judge the mandate-consistent inflation rate to be about 2 percent or a bit below.” The FOMC is the Federal Open Market Committee – the body that has absolute authority to act upon such inverted thinking as 2% inflation being good for the country.

A step back, to 1957: This was a time when academic economists were learning that theories manipulated to satisfy politicians could put themselves in positions of power. Most from this guild never dreamt anyone outside a college classroom noticed their existence. They miscalculated, as is the rule for these humbugs.

Politicians want money and credit to fulfill their constituents’ every wish. A Harvard economist told Congress that the U.S. needed a 2% rate of inflation to defeat communism. Washington loved him.

On August 13, 1957, William McChesney Martin, the Federal Reserve chairman at the time (and not an economist – he had been a Latin scholar at Yale, so understood that shortcuts destroy empires), lectured the Senate Banking Committee on the specific topic of the Federal Reserve “targeting” (Bernanke’s word – not Martin’s) a 2% rate of inflation: “Consumers are encouraged to postpone saving and instead purchase goods which they do not immediately need, and the incentive to strive for efficiency no longer governs business decisions…and speculative influences impair reliance upon business judgment.” Of utmost importance, groups struggle to insulate themselves from the loss of purchasing power, then “fundamental faith in the fairness of our institutions and our government deteriorates.”

The Bernanke Fed has stated its current policy is to chase consumers out of savings and into speculative ventures. (See The 2004 Fed Transcripts: A Methodical, Diabolical Destruction of America’s “Wealth”.) That is exactly the recipe for the Fed to accelerate its impoverishment of the American people. Alan Greenspan, of course, was the master at jumbling a few words to distract attention from this long-running plan to prevent the Fed’s extinction. Bernanke also resorts to nonsense. From his October 15, 2010, speech: a 2% rate of inflation is to “attain… price stability” and to “bring the unemployment rate down significantly.” He is doing exactly the opposite of what he pretends.

George Orwell wrote about “[t]his lunatic world in which opposites are turned into one another.” That was not lunacy for lunacy’s sake, nor is it today.

In 1940, Orwell wrote of World War II: “After 1936, of course, the thing was obvious to anyone except an idiot.” He was not erasing his own past, as was common with many others and is universal among “experts” today. (See the first paragraph of Ben Bernanke’s October 15, 2010, speech.) In 1938, upon returning to England from continental Europe, Orwell had written about the “familiar streets, the posters telling of cricket matches and Royal weddings, the men in bowler hats, the pigeons in Trafalgar Square, the red busses the blue policemen – all sleeping the deep, deep sleep of England, from which I sometimes fear that we shall never wake till we are jerked out of it by the roar of bombs.” The bombs flattened London in 1940.

The British institutions in the 1930s were in the same condition that the Federal Reserve, other government manipulators, the so-called economics profession, and the revered think tanks are in today. Orwell wrote of Neville Chamberlain, British Prime Minister from 1937 to 1940: “He was merely a stupid old man doing his best according to his very dim lights. It is difficult otherwise to explain the contradictions of his policy, his failure to grasp any of the courses that were open to him. Like the mass of the people, he did not want to pay the price either of peace or of war. ” At another point: “Tossed to and fro between their incomes and their principles, it was impossible that men like Chamberlain should do anything but make the worst of both worlds.”

This is an apt summation of the desiccated American hierarchy today. It is withering into dust.

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Look Out Below (I’ve got a bad feeling about this)

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by Charles Hugh Smith
Originally posted October 8, 2010

As the Star Wars guys always said just before the bottom dropped out: “I’ve got a bad feeling about this…”

TAKE ONE PART SCHIZOPHRENIA AND ANOTHER PART PROPAGANDA, MIX WELL, and you get a nasty little cocktail called “October 2010.” For a bit of absurdist, schizophrenia-tinted humor, consider these two stories in the Wall Street Journal of October 7, 2010:

Middle Class Slams Brakes on Spending

Retailers’ Solid September Sales Raise Holiday Hopes

Uh, right. Which one is it, because you can’t have both a middle class slamming on the brakes of discretionary spending AND have a Holiday season of blow-out retail sales.

The propaganda about the “recovery” has gone beyond the merely unbelievable and the surreal all the way to psychosis.

See this analysis of Fed Chairman Ben Bernanke’s recent speech in which is outlined the fiscal train wreck just ahead – which never mentions his own part in loosening all those rails so the train will have no choice but to derail.

Is this merely surreal, or is it yet more evidence that the Chairman’s propaganda is veering into a state of disassociation akin to late-stage mental disorders?

The truly pernicious aspect of this crazy-making propaganda-schizophrenia cocktail is that it is masked by the econo-speak of Bernanke and the other shills. If Bernanke mentioned that the delightfully helpful inhabitants of Planet X were coming to save the economy with a spaceship full of quatloos, then we would understand the tragedy of his situation and the unfortunate schizophrenia which arises when basically decent people must do the bidding of an Evil System and its global Empire.

“This is now the norm: decent people in a most indecent system.” – David D. (M.D.)

The whole “recovery” facade is falling apart, and the market knows it. Take a look at this chart of the Dow Jones Industrial Average, and imagine large ravenous rats fleeing a sinking ship while media shills are cajoling retail investors to jump on board while the tickets are still cheap:

Look at the anemic volume. Who’s buying to hold longer than a few minutes or perhaps days? Nobody. Insiders are selling at an unprecendented ratio of a gazillion-to-one (slight imprecision in the data) of shares sold versus shares bought.

The scurrying of little desperate feet is becoming louder. The powers that be had to pummel the U.S. dollar mercilessly for the past two weeks to keep the equity rally going, and now they’re encountering push-back on multiple fronts.

Every propaganda and manipulative tool has been pushed to the limit. All the levers have been pulled and the wheels are all hard over; the engines are straining and the crew knows we’re not going to miss the iceberg, but there is still a reservoir of magical thinking, a terribly misplaced hope that “it won’t be too bad.”

By pushing every button, yanking every lever and maxing out every propaganda ploy, the Power Elites managed to pump the DJIA up to the resistance offered by the 200-day moving average around 10,900. They’d hoped to blast through this barrier, just to show the doubters that the “recovery” was indeed “real,” but unfortunately their glass slippers are turning to dust and their grand bejeweled carriage is taking on the unmistakable shape of a large pumpkin.

I’ve got a bad feeling about this market. I was pointing out the technical reasons to be long all summer, but those have vanished. Now there is the stink of fear in the air, the whiff of desperate men (and a very few women) trying futilely to maintain the illusion that “everything’s normal now” and most absurdly, “this recovery is tracking previous recoveries.” Yeah, if you turn the charts upside down so “down” becomes “up.”

After revving the engines to the redline and devoting every shred of energy to ceaseless propaganda, all they managed was this sordid little rally back to key resistance. Claiming the “recovery” is “not bad” is like saying the rip below the Titanic’s waterline is only 300 feet long–it could have been worse. True, but the end result is pretty much the same: this ship is going down and the rats sense it.

MACD has been declining since January, and the stochastic is overbought and looking ready to roll over. All the pumping, all the unprecedented QE and stimulus, all the goosing of profits and propaganda about forward Price-Earnings ratios proving that stocks are “cheap” (ignore the frantic rats and the list to starboard) have had this meager result: a wheezing little rally on declining volume.

I just have a feeling that something is going to trigger a decline so sharp and “unexpected” that the mainstream media shills will be gulping for “answers” when the reality has been staring them in the face all year: the recovery is nothing but manipulation and those who believed it were simply delusional.

Maybe they will manage a few more manipulated rallies (pump it up before the market opens and then lock it down, the old “ramp and camp” which has proven so resilient), but this is like the passengers being herded back inside to listen to the band while the ship lists deeper into the water. You can only jam a market with no volume for so long, and then the whole thing comes apart. We are close to that moment.

It is sad, really, how the propaganda-schizophrenia cocktail was designed to lure the retail investor back to equities; but that Mickey Finn failed to daze the wary “little guy,” who has continued pulling billions of dollars out of equity funds and pouring hundreds of billions into Treasuries and other bonds.

The cliche is that the little guy is “always wrong” and thus equities are set to explode higher without them, but that line is wearing thin after months of listening to the cheerleaders hype the market while the ship sank lower in the water.

Keep your eye on the rats (insiders); they know what the bridge crew doesn’t want you to know.

HUGE GIANT BIG FAT DISCLAIMER: Nothing on this site should be construed as investment advice or guidance. It is not intended as investment advice or guidance, nor is it offered as such. It is solely the opinion of the writer, who is NOT an investment counselor/professional. All the content of this website is solely an expression of his personal interests and is posted as free-of-charge opinion and commentary. If you seek investment advice, consult a registered, qualified investment counselor (As with any other professional service, confirm their track record and referrals).

What Happened to Change We Can Believe In?

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by Frank Rich
Originally published in The New York Times
October 23, 2010

PRESIDENT OBAMA, THE RODNEY DANGERFIELD OF 2010, GETS NO RESPECT for averting another Great Depression, for saving 3.3 million jobs with stimulus spending, or for salvaging GM and Chrysler from the junkyard. And none of these good deeds, no matter how substantial, will go unpunished if the projected Democratic bloodbath materializes on Election Day. Some are even going unremembered. For Obama, the ultimate indignity is the Times/CBS News poll in September showing that only 8 percent of Americans know that he gave 95 percent of American taxpayers a tax cut.

The reasons for his failure to reap credit for any economic accomplishments are a catechism by now: the dark cloud cast by undiminished unemployment, the relentless disinformation campaign of his political opponents, and the White House’s surprising ineptitude at selling its own achievements. But the most relentless drag on a chief executive who promised change we can believe in is even more ominous. It’s the country’s fatalistic sense that the stacked economic order that gave us the Great Recession remains not just in place but more entrenched and powerful than ever.

No matter how much Obama talks about his “tough” new financial regulatory reforms or offers rote condemnations of Wall Street greed, few believe there’s been real change. That’s not just because so many have lost their jobs, their savings and their homes. It’s also because so many know that the loftiest perpetrators of this national devastation got get-out-of-jail-free cards, that too-big-to-fail banks have grown bigger and that the rich are still the only Americans getting richer.

This intractable status quo is being rubbed in our faces daily during the pre-election sprint by revelations of the latest banking industry outrage, its disregard for the rule of law as it cut every corner to process an avalanche of foreclosures. Clearly, these financial institutions have learned nothing in the few years since their contempt for fiscal and legal niceties led them to peddle these predatory mortgages (and the reckless financial “products” concocted from them) in the first place. And why should they have learned anything? They’ve often been rewarded, not punished, for bad behavior.

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The Economic Dirt-Nap?

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Warren Edward Pollock discusses the chilling scenario of the “economic dirt-nap”, without histrionics, and without raising his voice. What might it look like? Imagine Haiti, or New Orleans, but without the clear cause of earthquake or hurricane. This is a must-see, especially for, but not limited to, citizens of the United States. Warning: this could keep you awake at night.