Archive for March 2011
by C. Douglas Lummis
IN THE EARLY 1970s I HELPED ORGANISE A TOUR OF STUDENTS FROM JAPAN TO THE HANFORD NUCLEAR FACILITY in central Washington State. We timed it so that our guided tour of the site would be on the anniversary of the nuclear bombing of Nagasaki. This knocked the official guide a bit off balance; when we came to the big photograph of the Hanford workers cheering when they learned that it was the plutonium they had made that went into the Nagasaki bomb, his words got a little mumbly and hard to hear.
But he was very energetic when it came to explaining how safe the Hanford Facility was. Waste plutonium, he said, was buried in pits dug deep into the ground, and then carefully monitored to make sure there was no leakage. I asked him, “But didn’t you tell us just now that plutonium has a half-life of 24,000 years? Who is going to monitor it for that long?” “The US Government, of course.” “In all of human history, has there ever been a government that lasted for 24,000 years?” He did not answer, but only looked at me with contempt. Evidently he thought I was lacking in patriotism.
This was the moment I realized that a very intelligent, highly trained nuclear engineer can be a fool.
My field, political science, has produced probably only one scientific law: Power corrupts, and absolute power corrupts absolutely. But few political scientists have noticed that the closest thing we have to absolute power is nuclear power. Nuclear power corrupts the thinking of its believers in a peculiar way. It seems to tempt them to imagine that they have been raised to a higher level, where common sense judgments don’t apply. Common sense judgments like, it’s very dumb to produce a substance that will continue to radiate death, and will therefore require “monitoring”, for tens of thousands of years.
And then there’s the problem of accidents. As my common-sense grandmother used to say, “Accidents do happen”. An “accident” means something unexpected, something you hadn’t planned for. In the case of some dangerous activities, we seem to be willing to take the risk. We (we who are not the direct victims, that is) are satisfied if the probability of auto accidents or airplane crashes is kept fairly low. But in the case of nuclear reactors, a low accident rate is not enough. The consequences of a full-scale meltdown are so horrifying that, to justify building a nuclear reactor, the promoters must guarantee that there will be no accidents at all.
by James Howard Kunstler
Originally posted March 28, 2011
Taking in Charles Ferguson’s excellent documentary, Inside Job, about the dark doings of Wall Street in our time, I confess I was awestruck all over again at the complete surrender of Obama to the very characters who embodied the corruption that rotted our system from the heart outward.
Summers, Rubin, Geithner, and a host of other revolving door grifters who did everything possible to set up the implosion of banking, defeat the rule of law in money matters, and ruin millions who wanted nothing more than something useful to do in this society for a living wage.
Most impressive of all in this brave film were the shameless academic mandarins caught on camera trying to weasel out of their greed-driven misdeeds – Glenn Hubbard, chair of the Columbia University Econ department, a perfectly programmed polished WASP (like out of a “Ken” doll box) on the outside, slithering corruption inside, who played a major role in removing all restraints on Wall Street, then served as a director on the boards of several predatory financial giants, including the biggest, Black Rock, and pretended not to remember if he got paid for it; Martin Feldstein of the Harvard Econ department, in-and-out of government like a rat in a cheese-box, who sat on the board of AIG in the months before it blew itself up on credit default swaps, and who saw nothing about the company’s operations that gave off a bad odor after it entered the most massive government receivership the world has ever seen; and most memorably Fred Mishkin, former Federal Reserve governor, now an academic rover, who wrote a cheerleading report for the Icelandic banking system about five minutes before it collapsed, then changed the report’s title from Financial Stability in Iceland to Financial Instability in Iceland, then denied it on camera in the face of obvious evidence, then forgot whether he got paid six-figures to write the glowing report, then dissolved on camera into a maundering puddle of indignity and humiliation.
How do these rogues survive the disclosure of their turpitudes? Is there no one at places like Harvard and Columbia who has any sense of shame or even an inkling of disappointment that they employ such odious hustlers? Apparently not. This is a system with no mechanism of self-regulation left. And there’s Obama at the tippy-top of it serving like a department store mannequin with a Department of Justice that someone has hung a “gone fishin'” sign on. I voted for him in 2008, and I want to start a movement in whatever’s left of the Progressive core to get rid of him. Being a decent, presentable fellow with a nice family is just not enough. Even his vaunted speech-making abilities have gotten on my nerves. If I hear him say “make no mistake” one more time, someone will have to restrain me from kicking in the flat screen TV. Obama, it turns out, is the mistake.
by Rick Ackerman
Posted originally March 28, 2011
Watching the Dow Industrial Average cavort in the thin air above 12000 while the world goes to hell, we’re reminded of the famous exchange between Senator Joseph McCarthy and U.S. Army counsel Joseph Welch during the Army-McCarthy hearings: “Have you no decency, sir?” asked Welch after the Commie-baiting McCarthy had smeared a junior lawyer from Welch’s firm with a ruinous accusation.
We might ask the same question of the decision makers who in recent weeks have been driving stocks higher no matter how grave the news or world-shaking the event: Have you, the Masters of the Universe, no decency? Apparently not — at least none capable of registering even a mote of doubt or concern about what is going on in the real world. Granted, there was a fleeting loss of confidence in the literal wake of March 11’s epic earthquake and tsunami. Some investors wondered how global manufacturers would fare with their most important supplier of just-in-time parts out of commission. Others grew nervous that Japan’s very financial stability was in jeopardy. But it didn’t take long before such anxious speculation gave way to the sunny notion that it would take vast quantities of capital investment to rebuild Japan. Ka-ching!
That was more than a week ago. Since then, Japan’s predicament has grown increasingly menacing. Radioactive waste is spilling into the sea, a reactor containment vessel appears to have cracked, and there is no longer even a timetable for fixing the problem. Will Geiger counters in L.A. have to go crazy for Wall Street to at least act as though all of this matters?
by Graham Summers
Phoenix Capital Research
Posted originally on March 28, 2011
This is the most important chart related to the financial system today:
This is a chart of the US monetary base. In simple terms, it charts how much money the Fed has pumped into the system (at least that it admits). So it’s a kind of visual of the Fed hitting the PANIC button: when the monetary base explodes higher, the Fed is FREAKING out.
You’ll note that during the Financial Crisis the Fed didn’t do much until the autumn of 2008 when it pumped nearly $1 trillion into the system. Think about that, the Fed didn’t go nuts pumping money until the stuff REALLY hit the fan. You’ll also note that there’s only one other time when the monetary base went absolutely vertical: TODAY.
Indeed, the Fed has pumped nearly $500 billion into the system since the start of 2011. Don’t even try to tell me this is QE 2. If it was then the monetary base should have spiked in late 2010, NOT in 2011.
No, this is the Fed FREAKING OUT about the financial system again. And it’s a freak out on par with 2008. So if you think that all is well “behind the scenes” you’re in for a rude surprise. Something BIG is going down and I think it’s this:
This is the 31-year weekly chart of the 30-Year Treasury. As you can see, since 1988, the 30-Year has respected the above trendline. Every time we touched up against it, the 30-Year bounced hard and continued its long-term bull market.
The last time we nearly took out this line? The very beginning of 2011:
Remember, the interest-rate based derivatives market in the US is $196 TRILLION. If the Fed lets interest rates get out of hand, then the entire system breaks down even worse than it did in 2008: 2008’s crisis was triggered by the credit defaults swap market which was just $50-60 trillion in size (less than 1/3 of the interest rate based derivatives market).
Small wonder the Fed is going nuts pumping $500 billion into the system in the last three months alone. After all, once the Fed loses control of interest rates (and it will) we’re going to see a market 4-5 times bigger than the credit default swap market implode.
Are you prepared?