Friday, March 26, 2010

Wall Street declares war on Obama

Wall Street’s big money players didn’t take well to the public declaration by President Obama that financial reform was the next priority. After defeating the Republicans in Congress, the White House is feeling that it’s game on. On top of this they announced getting a new treaty with the Russians reducing nuclear weapons without giving up defensive missiles (something Bush couldn‘t do and he just let the treaty expire).

So big money is taking the offensive. They all but declared Treasury bonds worthless after a weak showing at the auctions Wed. and Thursday and incredibly they are saying investors have more faith in corporate bonds than in Treasury bonds. The only way that the United States of America will default on its bonds will be if things are so bad that investors will have already burned their worthless corporate bonds and stock certificates in the fireplace for heat. There is a reason the same people who are saying bad things about Treasury bonds have installed personal vaults and filled them with gold and not corporate bonds.

Treasuries are of course tied directly to the value of the USD and with Wall Street already at war with the Euro, the Dollar is up to new post crash highs. China has said publicly they aren’t sure how many bonds they want to own since they rightly believe there is no future owning sovereign debt. They are buying things you can stand on like copper mines and farmland in east Africa. The dictators and despots that China is buying these things from are still taking USD in payment for now. But in the future they know they will be trading with China and not the US since we have nothing to sell them.

Part of today’s cost from letting the Wall Street crooks who call themselves the Masters of the Universe run the country for the last thirty years is 320 million USD to pay for closing four more banks.

Add to that more jobs lost everyday, more businesses closed and the average income of Americans continues to decline. Personal income declined almost 2% nationwide and this was for the first time since 1949. ’49 was the only year of decline after the Great Depression and it was caused by disastrous policies forced through by a post war Republican Congress and that resulted in a Democratic majority for the next forty plus years. It will be decided in the next two years what the next forty years will look like. Wall Street is betting on a feudal system with a plantation revival.

Thursday, March 25, 2010

History is a long time ago...

The world currency collapse took another turn today as China weighed in on all the sovereign debt floating around. “We don’t see decisive actions telling the market we can solve this,” according to Zhu Min, a deputy governor of the People’s Bank of China. In other words he doesn’t think that the debtor countries can keep going to the people like him and expecting more and more credit.

Speaking of a lack of credit; Wednesday’s Auction of five year Treasury notes did not go well and was immediately reflected in the interest rate of home loans. (there is an official linkage between the two). Thursday’s auction of seven year notes didn’t go any better and this is going to start causing problems. Mr Zhu and his colleagues are showing less and less interest in buying debt, preferring things like copper mines and farmland in east Africa.

Fed Chairman Ben Bernanke’s says not to worry, Fed monetary policy will remain extremely accommodative. In other words he will just keep printing money and loaning it out at zero interest so Wall Street can keep inflating the bubble. Cash will keep draining in trillion dollar chunks to China and they will keep spending around the world. Potentates and dictators will continue to swell their sovereign wealth funds and buying Wall Street financial products like water systems in Greece. (oops, that one didn’t work out) Well there’s Portugal (uh-oh)…

It’s all a long line of dominos set up by the Masters of the Universe on Wall Street with the full participation of the people in Washington who did away with all those pesky 1930’s laws that would have put them all in prison for this sort of thing. There are probably still laws that deal with fraud that could be brought to bear despite a concerted effort by the Bush Crime Family to literally scrub them from the books.

The Fed claims they have a plan to control the money supply (actually taking money out of circulation) to avoid the wild waves of inflation. Supposedly that will also avoid the economy crushing deflation as debtors default en masse. Throughout history this has always been the eventual out come this sort of insane monetary policy that we’ve been living with for the last thirty years. That’s why they wrote all those laws seventy-five years ago, but like Bush said, “history is a long time ago”.

Now we’re about to stare history in the face.

Wednesday, March 24, 2010

The roller coaster ride to Hell

The Euro plunged today, driving up the USD after Portugal (one of the PIGS countries) had its credit rating downgraded at the same time rumors that Greece (another PIGS country) will be cut loose rather than rescued. The PIGS (Portugal, Ireland, Greece and Spain) have been living on debt, credit derivatives and neo-con privatization and it’s time to pay the piper. The rest of Europe is terrified since they don’t know how deep the rot goes and this of course was all orchestrated by Wall Street banks. Remember when we were told that we didn’t need real jobs in this country because our financial services “industry” would pay our way.

You can bet the Wall Street firms that have been playing the inside line made a killing today on derivatives with the USD streaking past recent highs and destabilizing trade in oil, gold and other commodities. Remember that I mentioned yesterday that JP Morgan was talking down the USD and I said if this is true it would be a wild roller coaster ride. This turned out to be not true and set up people to take the down position just as USD was poised to rise. The USD spiking up is not a better turn of events because the higher the USD goes on roller coaster, the faster the drop will be when it comes. The insiders will make a killing on that too, then they can afford to add another wall around their gated communities. These places already resemble feudal keeps as the really rich live in gated communities inside gated communities.

This looting and pillaging is boiling over into the real international economy and this is great for certain people and bad for the rest of us. Your typical tea bagger chuckles over the plight of commie loving Europeans but they (Europe) are the only back stop we have when China cuts off trade and the pharmacy at Wal-Mart won’t be able to fill 80% of prescriptions anymore (the other 20% already come from Europe). How many meds do you suppose the average tea bagger takes? The answer: not enough.

Tuesday, March 23, 2010

Those little punk staffers don't understand that markets are self correcting

European governments demanded and got a measure of Wall Street banking reform in the wake of the Greek debt crisis over the lack of disclosure to regulators of credit market activity. They have pushed the new body in charge of collecting global trading data to provide more information to financial watchdogs. Regulators from around the globe including the US SEC will now be able to obtain breakdowns of trading activity in credit default swaps, including the identity of the investors.

The DTCC Trade Information Warehouse is a body set up by Wall Street clearing houses in the wake of the 2008 financial crisis to allow regulators to track positions and trading in over-the-counter credit derivatives (to avoid the government doing it). Their policy up until now was to not share information on what was really happening with those pesky regulators. The market is self correcting you know.

The looming financial crisis has apparently not escaped Senator Chris Dodd who has surprised everyone by ignoring Republican objections and is forwarding his bill to regulate the big banks to the full Senate. It had been expected to languish in his committee indefinitely. Critics of the bill question the regulatory effectiveness of the proposal but there is one important thing that the bill does do. It will provide authority to the FDIC to carve up and dispose of the corpse of any large bank or bank like institution deemed insolvent and creates a 50 billion USD fund for the purpose. Previously nobody really had the authority to do anything with the “too big” to fail banks. They were traditionally so well connected as to be above the reach of any puny Federal regulatory agency. The market is self correcting you know.

"Don't let those little punk staffers take advantage of you, and stand up for yourselves," Republican Congressman Boehner told the American Bankers Association last Wednesday. It was the practice of the Republicans to “write” legislation by reprinting word for word anything corporate lobbyists sent over. Apparently the punk Democratic staffers changed the fax number and put a “no corruption” block on the spam filter and Boner is telling the masters of the universe that they don’t need to put up with that.

The talking point the Minority Leader is pushing is that if Wall Street has to pay to clean up its own mess they won’t have any money to lend to mom and pop. The 50 billion called for in Dodd’s bill is a third of this year’s bonuses but they claimed those bonuses had nothing to do with the lack of lending. They brag about how much lending they are doing but it’s to corporate pirates who use it to further loot and pillage the wealth of the middle class and not for economic recovery. The markets are self correcting to make sure wealth flows to the wealthy, you little punk staffer.

Monday, March 22, 2010

The tea baggers aren't gone, they are just out buying their brown shirts

JP Morgan economists are floating the notion that the USD rally is over. If that’s true and it’s always really been a question of when and not “if”, then the wild ride could start in earnest. The USD has only been “strong” as other countries have been trying to cope with China tying the value of its currency to the USD. But this has been building a bubble that will burst at some point. Throw in the fact that those credit derivatives we’ve heard so much about have not gone away and banks around the world have been buying them to try and shield themselves from wild currency swings. This sets up the big Wall Street banks for another crisis requiring a massive government bail out.

The Obama Administration apparently felt it had no choice but to continue the Bush policy of guarantying the big banks since they threatened to plunge the world into total chaos. With the US government choc a bloc with Bush Crime Family appointees, trying to deal with such a crisis would be “heck of a job Brownie” times a thousand. Thanks to the Republican Senate blocking Obama’s appointments and any banking reform, little has changed.
The real problem is that the money doesn’t exist to do another bailout, it didn’t really exist to do the last one but everybody went along with the illusion. This time the magic may not work. The consequences of the USD collapse are unpredictable. In history one of the first things that happened when the dominate currency collapsed is that international trade stops overnight as a realignment of power occurs. US businesses are already finding China increasingly difficult to deal with as it becomes more apparent China doesn’t want or need or perhaps fears US involvement in its economy.

After the last crisis in 2008 we lost 11 million jobs as another big chunk of our economy was out sourced by the multi-national corporations that pass themselves off as the US Chamber of Commerce. The 27 companies that really fund the US C of C create what is often described as the “shadow government”. Bush pushed the privatization of government functions and the concentration of all business activity in the hands of these overwhelming monopolies.

The orchestration of the tea bag rallies was a pilot project funded by these same corporations. Some liberal pundits are predicting the end of the tea bag movement with their failure to block health insurance reform. Rumors of their demise are greatly exaggerated. Rush, Glen Beck and the others are predicting the end of the world now that this socialist takeover has begun and their rhetoric is becoming increasingly violent. To these people; empty Wal-Marts would prove they were right all along.