Thursday, April 29, 2010
Wednesday, April 28, 2010
A fierce global equities sell-off was sparked on Tuesday after ratings agency Standard & Poor's cut Greek debt to junk status, while a downgrade to Portugal also stoked concerns about a widening eurozone crisis. As the European Union announced that it would hold an emergency summit on Greece, the Frankfurt stock market plummeted 1.93 percent and Paris plunged 2.16 percent in late morning deals. London fell 0.98 percent, one day after suffering its biggest one-day loss since November. Lisbon tumbled 5.56 percent and Madrid fell by 2.72 percent, while Athens was down 1.69 percent after massive losses in recent days.Spain has now been downgraded to AA and finally, the bailout total is more in line with 100 billion euros. Just for Greece.
Here's what I see so far --- Greece is kind of like Lehman Brothers. Not big, but big enough to cause a LOT of damage. The key date that the European Central Bank (ECB) has to get this done by is May 19th. That's when Greece's bonds are due.
The money would be coming from Germany, but the German and Greek people want NOTHING to do with a bailout. If Greece blows out, it'll blow out Spain, the U.K., Portugal. Each one of those, in turn will blow out more countries.
If Greece doesn't blow out, the pressure will be on to bail out Portugal who will just become the next, bigger Greece. In June, California has bonds due and they're in the same boat. There's a world of hurt coming fast. I think they can prop it up a bit longer perhaps 3-6 months? But every time they do, they make the end result that much more devastating, EXPONENTIALLY.
Look out for the shell game at this point. This is where the "leaders", who caused the mess by the way, give you your solution by stating the only thing that will save us is TOTAL GLOBAL POWER.
"Only a sustainable global economy can continue to guarantee growing wealth without jeopardizing the chance for future generations to meet their own needs." And how do we sustain it? Why, by having the developed world issue half a trillion in debt each and every month.But to achieve their goal, they need to first be UNSUCCESSFUL with their bureaucratic efforts. It only works if you bring in a global despot as the world savior, much like Adolph was to Germany in the 30's.
A global Hitler you say? No way, it could neeeever happen.
Tuesday, April 27, 2010
Standard & Poor's said Tuesday it cut Greece's ratings to junk status. The ratings agency lowered the long-term sovereign credit rating on Greece to BB+ from BBB+. The outlook is negative. "The downgrade results from our updated assessment of the political, economic, and budgetary challenges that the Greek government faces in its efforts to put the public debt burden onto a sustained downward trajectory," said Marko Mrsnik, an S&P credit analyst, in a statement.In addition, Portugal's got cut by two as well.
This seems to have resulted in a massive sell off in the markets: Greek stocks are down 7%, PMI is getting thrashed right now, other losers include Citigroup, Ford. The Shanghai Composite is down 2.1%, FTSE is down 2.6%, gold is surging, China is in the same boat everyone else is and trying to stimulate as well.
Long and short, no pun intended, every time the market moves in volume, it plunges, bad. This means that there is little more than duct tape and Ben Bernake's pleasant dreams propping up the stock market.
The Real Effect
Overall, the problem is, the Greeks don't want "help". But bankers don't exactly take no for an answer, especially when they can take control of your country doing it. Think Iceland.
I believe that this is similar to what happened in Jun - Sept of 2008, there will be tons of rumblings, some casualties, but the real plunge will happen later. The elite seem to want to patch things together to hold it up for just a bit longer.
In addition, a key indicator has been displayed for hints on the US bond meltdown. Namely, the politicians are blaming the "greedy" bankers for wrecking their rates by shorting them. Watch for this to continue to intensify as politicians realize their hides are on the line here.
Monday, April 26, 2010
Moody's Investors Service has taken the following rating actions on covered bonds issued by Greek banks:And defaults are starting to take place -
- Mortgage covered bonds issued by National Bank of Greece S.A. ("NBG"): Downgraded to Aa2 and placed on review for further downgrade; previously on 31 March 2010 downgraded to Aa1;
- Mortgage covered bonds issued by Alpha Bank S.A. ("Alpha"): Aa2 placed on review for possible downgrade; Previously on 31 March 2010 downgraded to Aa2;
- Mortgage covered bonds issued by EFG Eurobank Ergasias S.A. ("EFG Eurobank"): Aa2 placed on review for possible downgrade; previously on 31 March 2010 confirmed at Aa2.
Payments of amounts owed to health service providers [6 billion euros of debt], public sector construction [1.2 billion], ICT [200 million] and media-advertising [100 million] have ceased, according to Kathimerini.The Real Effect
Notice how everyone is starting to end up in the same boat, broke? Notice how the semi-not broke countries (at least as of now) are getting sucked into the drain right along with the bad ones? (Portugal, Spain)
Still think "globalism" and "free trade" are good ideas?
Still think spending 50% of your income on "government services" is a good idea?
Starting to see some parallels between the "socialistic" countries of the 1950s-1990s and our own?
Perhaps now would be a good time to investigate what liberty really is. Or perhaps you'd rather wait until the World War breaks out?
Saturday, April 24, 2010
Iceland: (9.5) - Earthquakes are shaking the big volcano, could blow
Greece: (9.5) - Bonds are exploding, needs even more aid, but Europeans have a right to a vacation, debt downgraded, asking for the bailout
U.K.: (9.5) - No flights for you, unemployment hits high
U.S.: (9.5 + 0.5) - Goldman is effecting everything, is not credible, Citibank accounts for most of the market volume, dollar is sinking despite safety flight from Euro, durable goods down significantly
Portugal: (9.0) - CDS surge close to record, lying about their debt (Greece anyone?), spreads are gearing up
Kyrgyzstan (9.0 +0.5 ) - Violence is flaring up
Italy (8.5) - Debt is spreading
Ireland (8.5) - Debt is looking worse than reported
U.S./Mexico: (10 +.5) - Reports of military members from Mexico AND the U.S. slaughtering competing drug gangs on the border. 17,000 dead. It's all out war.
Israel/Syria & Lebanon: (9.5) - Rocket attacks
U.S.: (9.5) - Clinton's worried about subversives, so is Perry, and Rush, and the FBI
Thailand: (9.0 +.5) - Army deploys against the Red Shirts
Georgia: (8.5) - Seized a "Highly Enriched Uranium Shipment"
North/South Korea: (9.0) - The South Korean ship that sunk was allegedly hit by a North Korean torpedo, North seizes hotel chains
Catholic Church: (9.5) - Is rolling out the PR campaign, upset about mouthy mayors
US/Protestant: (8.5) - GM is marketing directly IN the churches
Friday, April 23, 2010
Wednesday, April 21, 2010
Tuesday, April 20, 2010
Monday, April 19, 2010
Among Federal Candidates, 2008 Cycle
Name Office Total Contributions
Obama, Barack (D-IL) Senate $996,595
Clinton, Hillary (D-NY) Senate $411,150
Romney, Mitt (R) Pres $234,275
McCain, John (R-AZ) Senate $230,095
Himes, Jim (D-CT) House $155,098
Dodd, Chris (D-CT) Senate $112,500
Giuliani, Rudolph W (R) Pres $111,750
Edwards, John (D) Pres $66,450
Specter, Arlen (R-PA) Senate $47,600
Emanuel, Rahm (D-IL) House $37,750
Sununu, John E (R-NH) Senate $31,400
Reed, Jack (D-RI) Senate $30,100
Skelly, Michael Peter (D-TX) House $26,171
Baucus, Max (D-MT) Senate $26,000
Harkin, Tom (D-IA) Senate $24,580
Lautenberg, Frank R (D-NJ) Senate $24,100
Chambliss, Saxby (R-GA) Senate $22,400
Collins, Susan M (R-ME) Senate $21,900
Warner, Mark (D-VA) Senate $21,800
Landrieu, Mary L (D-LA) Senate $20,700
Gillibrand, Kirsten (D-NY) House $20,500
Durbin, Dick (D-IL) Senate $19,500
Coleman, Norm (R-MN) Senate $19,200
Shays, Christopher (R-CT) House $18,400
Rangel, Charles B (D-NY) House $18,100
McConnell, Mitch (R-KY) Senate $17,500
Hoyer, Steny H (D-MD) House $17,300
Kanjorski, Paul E (D-PA) House $16,100
Kirk, Mark (R-IL) House $15,700
Maloney, Carolyn B (D-NY) House $14,600
Cote, Adam (D-ME) House $14,000
Biden, Joseph R Jr (D-DE) Senate $13,800
Rockefeller, Jay (D-WV) Senate $13,400
Cornyn, John (R-TX) Senate $13,100
Dole, Elizabeth (R-NC) Senate $12,800
Pryor, Mark (D-AR) Senate $12,600
Boehner, John (R-OH) House $12,000
Roberts, Pat (R-KS) Senate $11,500
Pelosi, Nancy (D-CA) House $11,000
Udall, Tom (D-NM) House $10,850
Blunt, Roy (R-MO) House $10,500
Udall, Mark (D-CO) House $10,200
Bachus, Spencer (R-AL) House $10,000
Clyburn, James E (D-SC) House $10,000
Dingell, John D (D-MI) House $10,000
Frank, Barney (D-MA) House $10,000
Johnson, Tim (D-SD) Senate $10,000
Menendez, Robert (D-NJ) Senate $10,000
Castle, Michael N (R-DE) House $9,600
Capito, Shelley Moore (R-WV) House $9,500
Allen, Tom (D-ME) House $9,400
Smith, Gordon H (R-OR) Senate $9,400
Crapo, Mike (R-ID) Senate $9,200
Kuhl, John R Jr (R-NY) House $9,000
Enzi, Mike (R-WY) Senate $8,600
Richardson, Bill (D) Pres $8,600
Crowley, Joseph (D-NY) House $8,500
Cantor, Eric (R-VA) House $8,000
Murphy, Chris (D-CT) House $7,700
Schwartz, Allyson (D-PA) House $7,600
Maffei, Dan (D-NY) House $7,500
McCrery, Jim (R-LA) House $7,500
Fitz-Gerald, Joan (D-CO) House $7,400
Murphy, Patrick J (D-PA) House $7,100
McCaul, Michael (R-TX) House $6,900
Becerra, Xavier (D-CA) House $6,600
Biggert, Judy (R-IL) House $6,600
Roskam, Peter (R-IL) House $6,600
Sullivan, Sean Patrick (R-CT) House $6,600
Miller, George (D-CA) House $6,500
Neal, Jim (D-NC) Senate $6,100
Cazayoux, Donald J (D-LA) House $6,000
Foster, Bill (D-IL) House $6,000
Johanns, Michael O (R-NE) Senate $6,000
Lowey, Nita M (D-NY) House $6,000
Reid, Harry (D-NV) Senate $6,000
Lalor, Kieran Michael (R-NY) House $5,650
Salazar, Alfredo (3-PR) $5,600
Treadwell, Sandy (R-NY) House $5,600
Etheridge, Bob (D-NC) House $5,500
Levin, Carl (D-MI) Senate $5,500
Nadler, Jerrold (D-NY) House $5,500
Neugebauer, Randy (R-TX) House $5,500
Walberg, Tim (R-MI) House $5,500
Wexler, Robert (D-FL) House $5,500
Shafroth, William G (D-CO) House $5,300
Martin, James Francis (D-GA) Senate $5,100
Minnick, Walter Clifford (D-ID) House $5,100
Andrews, Robert E (D-NJ) House $5,000
Arcuri, Michael (D-NY) House $5,000
Camp, Dave (R-MI) House $5,000
DeLauro, Rosa L (D-CT) House $5,000
Hall, John (D-NY) House $5,000
Kerry, John (D-MA) Senate $5,000
McMahon, Michael E (D-NY) House $5,000
Moore, Dennis (D-KS) House $5,000
Peterson, Collin C (D-MN) House $5,000
Putnam, Adam H (R-FL) House $5,000
Reynolds, Tom (R-NY) House $5,000
Scott, David (D-GA) House $5,000
Saturday, April 17, 2010
Greece: (9.5 N/A) - Banks are getting downgraded by Fitch, no actual bailout implementation, trying bonds one last time
Japan (9.5) - Economy is in a world of hurt
U.S. (9.5 + 0.5) - Tax day is here and saboteurs are in the open, CO2 emission cuts will destroy the last of the "recovery", coming to the table April 26th, unemployment is up again, Soros is talking smack on the market, foreclosures are accelerating, Goldman Sachs and WaMu were committing fraud, China is selling U.S. bonds, confederate soldiers were terrorists, gold manipulation, Patriot Day is Monday, who needs priests when the educators can spy on your kids?
Spain (9.0) - 20% Unemployment
Portugal (8.5) - Debt is blowing up bonds
Iceland/Western Europe (9.0) - No air travel can't help the economies
Kyrgyzstan (8.5 -0.5 ) - U.S. Airbase is back open
Dubai (8.5) - Deferments
Israel/Syria & Lebanon (9.5) - Syria has SCUDS and War is imminent, police drills in Jerusalem, Israelis leaving Sinai
Thailand (9.0 +.5) - Will the step down?
Georgia (8.5) - Thousands rally to demand resignations
Catholic Church (9.5) - Catholic church is backpedaling as people leave in droves and cases of abuse explode.
Updated: 1/26/2012 - Mild format and spelling issues.
Friday, April 16, 2010
Miami Beach Police Officer Manuel Chorens...has secrets. For one, he's rich. In 2008, he pulled in $175,651.84.Pretty cut and dry, right? Wrong...
Also, he's a crook.
In August 2008 at the Lincoln Road CVS — a drugstore blocks from the beach where hordes of tourists buy flip-flops and sunscreen — managers noticed goods disappearing from the shelves. They began watching the 14-year veteran cop. Soon they saw Chorens, who had been paid tens of thousands of dollars to protect their store, filling plastic CVS bags and stashing them in the security room in back. More than $5,000 worth of stuff went missing.
A CVS investigator decided to dig a little deeper. He noted the time each night Chorens showed up for his shift and when he clocked out. The hours didn't add up.
So someone from the store called internal affairs investigators, who poked around some more.
Sure enough, they found Chorens was blatantly cheating CVS. Night after night, he'd arrive around 8 p.m. and stay until 10 or 11. Sometimes he didn't even show up. On his pay sheets, though, he claimed six or seven hours at the drugstore.
Though internal investigators found video footage of Chorens stuffing bags and taking them home, they exonerated him of theft charges.Just one guy right?
A Miami New Times investigation has found that 200 officers — 54 percent of the 367 nonexecutive cops — made six figures last year. One of them raked in almost $214,000, more than the chief or the Beach's mayor. A sergeant earned just under $230,000 a few years ago; that's about equal to Vice President Joe Biden's annual salary. It gets worse. The Beach force, which patrols an idyllic strip of sand relatively free of blight and gang violence, is not only the best paid in the region but also among the most troubled.The article then goes on to cite cases of sleeping on the job, harassment, domestic violence, drug use, kidnapping, torture and murder. And where is the mayor?
"I certainly didn't realize our police officers were making so much money," Miami Beach Mayor Matti Herrera Bower says.Asleep on the job as well.
The Real Effect
This is why America is angry. There is a definite divide between the public and private sector and a further divide within the public sector favoring those who "play ball" with the public sector "authorities". This has created a tiered system with more and more "public policy" which is little more than a system to empower those who would assure us they are our leaders.
The law is supposed to be blind. But all too often your connections will not only reduce your sentence, it will allow for flagrant and rampant evil.
And now they want more taxes, more control and assuredly more evil? At some point, the oppressed say no more. To quote -
One of the great myths is that Americans are free people and once upon a time they were but they've not been free since 1913. Because once you have an income tax you no longer own your own labor and the historic definition of a free person is a person who owns his own labor. If you don't own your own labor, you are a serf or a slave. ~ Paul Craig Roberts
Thursday, April 15, 2010
If you haven’t read “It’s Impossible to Get By In the US”by Graham Summers of Phoenix Capital Research, you really need to. In his article, Summers analyzes the expenses of a typical family making the median U.S. household income of $50,300 (he was using 2008 figures). According to Summers, if a family making that much did everything right financially, they would maybe have a couple hundred bucks at the end of the month for discretionary spending. But if they overpaid for their house or had any consumer debt then according to his calculations the typical American family would be operating in the red.
The truth is that the day is fast approaching when it will not be possible for the average American family to make it from month to month.
Even now record numbers of American families are failing financially.
In March 2010, there were 158,000 bankruptcy filings. That was up 19% from March 2009’s number, and it was also up 35% from February 2010’s number.
Things are getting scary out there.
The Real Effect
Good to see that the obvious is now observable to anyone who is remotely paying attention. As I have been droning on about for the five years that I have run this blog, this is a DEPRESSION. The kind your grandparents lived through. Now that you're listening you need to hear the following:
- This depression cannot be avoided. Perhaps it could have been 10 years ago, but not now.
- Anything done to try to prevent it from happening will make it significantly worse. (Go back, read the commentary on the Great Depression.)
- Everyone is broke. There are few individuals that actually have the capital to not be broke.
- The bankers want that capital.
- This lust for power is the primary reason for much of the suffering in the earth's history.
- The banking elite don't want you to know that, because if you did, you'd take away their power.
- The depression will give way to war, probably a world-wide war.
- The elite want the war because that allows them to consolidate their power and remove potential challenges to their power.
We now have both driven the low end of the rate curve to zero and taken on more than $3 trillion in new Federal debt. To put this in perspective the total outstanding accumulated Federal Debt at the end of 1992 - from the founding of the US to January 1st of 1993 - was just $4.2 trillion. We added more Federal debt than had been accumulated in 217 years in just a little over THREE years - from 2007 to the third month 2010.
The ugly is that this debt load (currently $12.8 trillion, more or less) presents interest expense. If the Fed Funds Target was to reach just five percent, and every bit of the Treasury debt was to be refinanced into overnight obligations at that same 5%, the interest expense alone of the current debt would be $640 billion a year.
If the Treasury was to have to pay a roughly 6% average coupon (reasonably aggressive with a 5% Fed Funds Target) the interest expense would be $768 billion annually.
To put this in perspective that is an amount roughly equivalent to that spent on defense, and is higher than Social Security, Medicare, or all other "mandatory" program spending combined.
It would consume nearly all of Social Security and Medicare tax receipts ($891 billion) or the personal income tax ($915 billion) (ed. All 2009 federal budget numbers)
It is also four times what we spent last year on interest.
There is not a snowball's chance in Hades that the Federal Government can afford that.
Tuesday, April 13, 2010
So, over $29bn of Argentine civic savings are to be used as a funding kitty for the populist antics of President Cristina Kirchner. This has been dressed up as an anti-corruption and efficiency move. Aren’t they always?The Real Effect
Argentine sovereign debt was trading at 29 cents on the dollar today, pushing the yield to 25pc. Tempted?
Credit Default Swaps on Argentine bonds reached 2,900. Do we have a Latin Iceland on our hands, but with 100 times the population? Or several, Pakistan, Ukraine, Hungary? …… Switzerland? Australia? Britain?
The funds being targeted are known as AFJPs or retirement accounts, but how long will it now be before Mrs Kirchner cracks down on the entire $97bn pool of private pensions? There are a lot of much-needed hard currency assets in those portfolios.
Banks will start to claim ownership of 401k and pension funds (private and public) and begin "looting" them. (Read as taking your cash and continue to "invest" as they double-double down) and the government moves to “protect” them by seizing them. I would assume they would be placed in a new 'secure conservatorship'.And if the political will is not present for the banks to do it, they will defer to the government to finish the job.
When you remove the concept of property rights from a society, any sort of property posession becomes scandalous and subject to
Watch for increased calls of legal reformation to prevent"loopholes", "evasion" and "protests" of individuals that refuse to "pay their fair share of taxes" by allowing the banks to consume their life savings. Of course this will preclude massive rioting, as who wants to work their entire lives to end up destitute at the hands of corporate elite?
Monday, April 12, 2010
A total of 33 states and the Virgin Islands have depleted their funds and borrowed more than $38.7 billion to provide a safety net, according to a report released Thursday by the National Employment Law Project. Four others are at the brink of insolvency.
|New York||$3.00 billion|
|North Carolina||$2.14 billion|
|New Jersey||$1.55 billion|
|South Carolina||$851 million|
|Rhode Island||$204 million|
|New Hampshire||$23 million|
|South Dakota||$23 million|
|Virgin Islands||$13 million|
The Real Effect
States going bankrupt?
Friday, April 09, 2010
I thought I would offer my readers a quick update on the worldwide situations this weekend. I have employed a danger rating on a 1-10 scale with 10 being catastrophic. Enjoy!
Greece: (9.5) Seriously in trouble: 6% for emergency loans, capitol flight/bank runs and controls, 3-month yields of about 15%, debt rating cut to BBB- by Fitch, . It's Armageddon for Greece.
U.S. (9.0) - 200:1 leveraging, 11% deficit spending as a percentage of GDP, Banks hiding 42% of debt risks (Greece 2 anyone?), FDIC in Puerto Rico(25% of the island's assets), unemployment deepening, $4 a gallon gas, sporadic riots, Civilian Service Corps(SA brownshirts?), John Paul Stevens is retiring, April 15th is looking like a prime protest date.
Kyrgyzstan - (9.0) Riots, an interim government and a US airbase important to the Global War of Terror. Is Russia smelling blood in the water?
U.K. (9.0) - Gas is $9 a gallon! Good luck recovering.
China (8.5) - A failed bond auction bodes ill. What, Tim Geithner is there? I wonder why...
Canada (8.0) - Has no gold, real estate is looking overpriced.
Israel/Gaza (9.0) - Like a bully caught crying on the playground, Israel is going to go home and kick the family dog.
U.S./World (9.0)- Video scandals make the U.S. appear like the bully it is.
U.S./Mexico (9.0) - More troops? And more?
Thailand (8.5) - Martial law in the capital.
Iran - (8.0) - Baring it's teeth, get's centrifuges!
Catholic Church (9.5) - Sex scandal is melting down any moral credibility the church had. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, At least it's safer than public school, I guess.
At least it was an uneventful week?
The Bilderberg Group will meet this year in Spain and continue to advance their agenda for world economic governance while agreeing to prolong the global financial recession for another year, according to Bilderberg sleuth Jim Tucker, who has discovered through his routinely accurate inside sources that the conference will take place from June 3-6.
Bilderberg sleuths were correct in predicting that this year's meeting would take place in western Europe, but were wrong in pinpointing the UK as the likeliest location. The 2010 conference will take place in a coastal resort called Sitges, which is about 20 miles from Barcelona.
This year's confab will focus around prolonging the global financial recession and creating more economic woe in order to provide the pretext for more regulation in pursuit of world economic governance, according to Jim Tucker's sources.
"Bilderberg hopes to keep the global recession going for at least a year, according to an international financial consultant who deals personally with many of them. This is because, among several reasons, Bilderberg still hopes to create a global “treasury department” under the United Nations. Bilderberg first undertook this mission at its meeting last spring in Greece, but the effort was blocked by nationalists in Europe and the United States. “Nationalists” (a dirty word in Bilderberg) objected to surrendering sovereignty to the UN," writes Tucker.Tucker's source highlighted a recent speech by French President Nicolas Sarkozy in which he called for a "new global monetary order.” As we have highlighted, such rhetoric has been abundant over the past year, with British Prime Minister Gordon Brown and EU President Herman Van Rompuy repeatedly echoing similar ideas.
Thursday, April 08, 2010
Wednesday, April 07, 2010
Tuesday, April 06, 2010
By April 2005, when Bextra was taken off the market, more than half of its $1.7 billion in profits had come from prescriptions written for uses the FDA had rejected. But when it came to prosecuting Pfizer for its fraudulent marketing, the pharmaceutical giant had a trump card: Just as the giant banks on Wall Street were deemed too big to fail, Pfizer was considered too big to nail.The Real Effect
Why? Because any company convicted of a major health care fraud is automatically excluded from Medicare and Medicaid. Convicting Pfizer on Bextra would prevent the company from billing federal health programs for any of its products. It would be a corporate death sentence.
Prosecutors said that excluding Pfizer would most likely lead to Pfizer's collapse, with collateral consequences: disrupting the flow of Pfizer products to Medicare and Medicaid recipients, causing the loss of jobs including those of Pfizer employees who were not involved in the fraud, and causing significant losses for Pfizer shareholders.
"We have to ask whether by excluding the company [from Medicare and Medicaid], are we harming our patients," said Lewis Morris of the Department of Health and Human Services.
So Pfizer and the feds cut a deal. Instead of charging Pfizer with a crime, prosecutors would charge a Pfizer subsidiary, Pharmacia & Upjohn Co. Inc.
Wow, just wow...
Monday, April 05, 2010
A sobering look at the current economy by Denninger -
There's no particular reason for Greece to get funds from the Eurozone "directly" in this case irrespective of anything else. If there's no rate advantage why not just sell into the market?The Real Effect
This is the problem with debt spirals, you see. Trying to borrow and spend your way out of recession runs the risk of interest costs exceeding cash tax inflows. If that happens you're done, and the market will react to the possibility long before it actually happens.
Contrary to popular belief we aren't any better off than Greece is. We've been at the same game they played for the same amount of time, basically - we embarked on our "borrow and spend to lie about GDP" in 2003, and we have maintained that level of borrow and spend ever since, until it blew out to where it is now in 2008.
Those who refuse to learn from what others have done (and blew up in their faces) are destined to have to go through it themselves.
We cannot mask a 10% GDP deficiency for very long. We've gotten away with it for two years, with the first of those years coming on the back of an all-on stock market collapse that fed the bond market with fear-driven money, and the second half with "QE" and similar shenanigans.
But now both of those influences are gone - and we're still trying to spend and borrow the same way, continuing to lie about our GDP circumstances.
We had better stop it and get behind some concrete block before Greece goes up in smoke - from what I can see from here, which is an admittedly-imperfect picture, the only two ways out for them are an outright default or departure from the EU; the latter would allow them to issue in massive quantity and thus effectively devalue.
Nothing else is going to work - they're too far down the hole - and if we don't cut this crap out right now we're going to follow them down the bowl.
Of course Denninger is correct in noting that we are facing a similar fate as Greece, the operative question is - How do you "bail out" the largest economy in the world? And if the eurozone is so hesitant to "help" Greece, how much more hesitant will the world powers be to help us? I think we know the answer to that question.
Keep a close eye on Greece as the countries of the world blow out their currencies in a coordinated fashion so as to set up the idea that collapse was "unavoidable" and that we now need a global currency to chase the global trade zone.
There was a reason why Jesus chased the money changers out of the temple...
Saturday, April 03, 2010
Friday, April 02, 2010
Brilliant and it makes the point that I will expound on at a later date -
Police in Franklin Township, New Jersey recently announced an innovative program “designed to improve the safety of senior citizens,”reported WCBS-TV.
Through “Operation Blue Angel,” elderly residents would leave a key to their front doors in a lockbox accessible by a combination known to police. Police doing “safety checks” of the homes would knock on the door and, if nobody responds, would use the keys to enter.
What could possibly go wrong? What does anybody have to fear from angelic armed strangers sent to check on their “welfare”?
One possible problem is demonstrated bythe shooting death of a 47-year-old Prairie Village, Kansas woman this morning (March 31).
Police were sent to her apartment to conduct a “welfare check.” For some reason, the woman didn’t want to be “helped” by the friendly state functionaries with guns.
Oh, but we insist, replied the “Blue Angels,” as they summoned their khaki-clad comrades from the Tactical Squad. Eventually, because of “threats” she supposedly made against the stormtroopers, the police (in the words of a local TV reporter) “were forced to shoot her.”
Perhaps it has something to do with this -
Thursday, April 01, 2010
with the city facing a budget deficit that could drain its reserves by summer, Mayor Villaraigosa wants to re-open contract talks with 45,000 cops, firefighters, librarians and other city employees in hopes of persuading them to contribute more to their pensions and health-care costs. His deputy chief of staff, Matt Szabo, puts it bluntly: "Unions have priced themselves out of a job."What? We can't demand whatever no matter how out of line with the private sector?
In December, state and local governments spent an average of $39.60 in wages and benefits per hour worked on their employees, versus an average $27.42 for private employers, the Labor Department said.You do realize that government employees spend 44% more than a private employee? And who is paying for that? Since government can only seize wealth, the private employee.
Just to drive home the fact that union employees are absolutely clueless -
Public-employee unions argue that it's unfair to penalize them for a financial crisis that isn't their fault. They say cities and states are opportunistically taking advantage of a short-term crisis to gut benefit plans in place for decades.The Real Effect
Uh no, what is "unfair" is expecting individuals who are UNEMPLOYED to support your behind with a good percentage of what they DON'T have because you like a big check. Get used to it, because the electorate knows that the public won't tolerate a much higher level of taxation without revolting completely, at which point YOU will be the one unemployed.