Wednesday, April 29, 2009

It's All Coming To A Head.

The corruption and criminality that exist in the halls of government and in the financial arena are well known to readers of this blog. However, in the coming months look for the nation at large to be exposed like never before to the perfidious inner workings of the Mussolini Corp/Gov Business model. Between Hank Paulson and Ben Bernanke's mendacity with respect to, specifically, Bank of America, along with a whole host of equally combustible outrages by the aforesaid (and others), and the general economic collapse being brought on by factors as diverse as the fall of Wall Street, disintegration of General Motors, and a burgeoning flu epidemic, there are just too many desperate things that have transpired for whistleblowers of various colors and stripes to not eventually show up and spill.

The canaries will be emboldened to sing by an economy that is supine, confident in the knowledge that, regardless of what the denizens of the newly formed "green shoots" school would have us believe, the nation's economy is far from "recovery." In fact, the weakness in the economy will have spread to other areas such that the very legitimacy of the federal government will be, with ample reason, called into question. I posit that our prospective whistle blowers, motivated in party by their own disgust at what they have taken part in will feel unconstrained by worries of reprisal by their former masters. In the main, I imagine the confessors will be interested in cleansing themselves by simultaneously taking down their corrupt higher ups and giving the rest of us a sense of just how deep the rabbit hole goes. It should be more than interesting.

Wednesday, April 22, 2009

Larry Kudlow, Wall Street Detective!

Try not to laugh to the point of having a bladder accident or ceasing to breath, as the header is just a wee joke. CNBC's number one Wall Street shill has not turned into a hard charging crusader against Wall Street treachery. However, he may be showing signs of having the semblance of a brain by allowing himself to ask the following obvious question: "Is the whole TARP a criminal enterprise? Well, Larry, in case you hadn't noticed, or did notice but once denied, the "No Banker Left Behind" bailout bill, (aka TARP, which stands for Troubled Asset Relief Pogrom, er Program), was heaped on the American public in much the same manner as many of the legislative monstrosities of Mussolini's government were foisted on the Italian people, via fear, menace and threats. Nothing good from such rotten seeds may grow.

What's more, recall that the foister in chief at the time, Secretary of The Treasury, Hank Paulson, asked for, nay demanded, at the outset, plenary powers in the disposal of approximately seven hundred billion dollars. "Give me (unfettered) liberty, said Mr. Paulson, or I'll give you (financial) death." He pretty much got his way on that one, as very little oversight was applied to the operation of the TARP. So it should come as no surprise, except perhaps to a super shill like Larry Kudlow, that Special Inspector of the TARP, Neil Barofsky, has uncovered enough corruption to begin twenty, that's right, twenty criminal investigations into such Wall Street staples as securities fraud, tax-law violations, insider trading and mortgage modification fraud. I love that locution- mortgage, ahem, modification. "Yes, sir, we've modified that thar mortgage so ya'll will hardly even recognize that it is a mortgage."

As Mr. Barofsky has offered, and as I strongly suggested to Barney Frank in the numerous faxes I sent him at the time the TARP's funding was being debated by Congress, the TARP program is very susceptible to corruption. Specifically, Mr. Barofsky has asserted that "the very character of the bailout program makes it inherently vulnerable to fraud, waste and abuse, including significant issues related to conflicts of interest facing fund managers, collusion between participants and vulnerabilities to money laundering.”

And in a real howler, Mr. Kudlow notices that present Treasury Secretary, Turbo Tax dodgin' Tim Geithner, "has said very little about this. "Kudlow also wonders why all the suspected corruption is not being reported on the front page of our better news print organs? The Fourth Estate has long since failed to report adequately the news we Americans most need to hear. And where the gaudy crimes of the diabolic duo (that is Wall Street and the federal government) are concerned, they certainly haven't been anywhere near the watchdog required. No, in the aggregate, they are more like spoon fed disseminators of whatever party line suits the Powers that Be.

Gil Scott-Heron is famous for giving us the phrase, "The revolution will not be televised." Obviously Mr. Scott-Heron thought that there would at least be a revolution. I'd like to think so too, but with so little stirring in the face of all the outrageous revelations ( and with apologies to tea party participants) I am beginning to have my doubts.

Friday, April 17, 2009

PEI Strikes Again

For those of you who don't know, PEI stands for the erstwhile Princeton Economics International. The one time money management outfit has nothing to do with Princeton University other than being located in the same New Jersey town that is home to the aforementioned august university. PEI was run by a brilliant but possibly shady economist by the name of Martin Armstrong. Armstrong has been in prison for years for refusing to cooperate with the courts around a case that is shrouded in mystery. Suffice it to say that there are many who, whatever their feelings about Mr. Armstrong's innocence or guilt may be, laud his brilliance on matters pertaining to finance and economics.

And so, with that bit of background in mind, I'd like to offer that while it may not be on your radar screen presently, Sunday the 19th marks, as per Mr. Armstrong' s work, another of his well known, and equally well regarded, economic confidence model turn dates. This one happens to be an interim turn date, and my view is that, especially given that, to my knowledge, Mr. Armstrong's turns were meant to be quite precise and not wide band turns, that it is likely marking another top in the economy. I do not view March 6th, when the stock market put in its lows, as some sort of proxy for the turn date, which is not a market turn model by definition. This is not to say that markets can't turn precisely on Mr. Armstrong's dates, they can, and I believe have, but I do not think that the stock market's lows in March coincided with the latest turn. Since we have been hearing little but tepidly happy talk about the economy for quite a while now, I'd just like to offer, on behalf of the latest turn date, that we buyers best beware!

Thursday, April 9, 2009

Obama the Reformer?

It was stated on the Sudden Debt blog that it is "imperative" that Obama do away with the "already withered" "shadow" banking system. Here is my response to that idea.

President Obama will do not do away with the shadow banking system because he is even more captured by the banking cabal, shadow and otherwise, than his horrid economic team.

Obama is at least as captured by the banking system as the ignominious Larry S and Tim G because A.) he is an ignoramus about financial matters, and so can be easily bamboozled, and B.) because, long ago, Obama was bought and paid for- small contributions from sucker voters notwithstanding- by the banking industry.

What's more, Obama does not have the personality to fight powerful interests, (quite the opposite, he bends to them) or even, much less, to take some risks. Over the long run, Mr. Obama will likely prove to be what he has demonstrated himself to be during the first three months of his Presidency, a go along to get along spokesman in chief. Let's face it, the number of examples of Presidents acting as reformers are very few, and at this point in our vitiated Republic's life, seemingly non-existent.

Obama, rhetoric aside, has allowed what transpired during the waning days of the odious Bush Administration to continue unabated, and so, we the people have been robbed to replenish a criminal banking establishment in a manner that Mussolini's Fascist big corporate/ government enablers and facilitators would have instantly recognized. We do it without threats or acts of violence, but otherwise there is little difference in the way that government conducts itself vis a vis the (shadow) banking industry.

With all that in mind:

Today was a particularly infamous day as Wells Fargo posted "record earnings." The only problem with their triumphant announcement is that they did not earn their "record" earnings. Their fraudulent winnings were appropriated by the not so invisible hand of our very own government from its seemingly somnambulant subjects. Pardon the purple prose.

There are only two ways this honking, toxic, world class king hell abomination of a financial system we have will be properly put down; It will either destroy itself once and for all, the people, in an uncivil manner, will take it down, or perhaps, outside forces, (think competitor nations) will deliver what amounts to a coup de grace. None of the above are, of course, mutually exclusive.

Have a pleasant Easter or Passover.

Friday, April 3, 2009

G20 Revisited

Perhaps I did not make explicit what may be the biggest single mistake (though mistake is certainly the wrong word) governments across the globe, particularly the U.S. government, are making "this time around." That "mistake" is to tax the living you know what out of the citizenry. You may not have noticed that one of the "accomplishments" of the G20 was to come up with a resolution to, if not abolish, put pressure on global tax havens. In a mad effort to save themselves, because that is what all governments do (regardless of creed), try to save themselves, every spare penny owned by individuals is being pursued by any means possible. How does this initiative fit with the ongoing massive transfer of wealth engineered by government from the citizenry to the big/banking nexus? They are all of a piece. What the Obama administration is engaged in is worse than what the corrupt Bush/Cheney regime did from the standpoint that, not only is the fascist business model being replenished from the pocket books of the citizenry, but now we citizens are going to be directly taxed at a greater rate as well.

As a result, do not for one minute believe that economy is on any road to anything but ruin because the total effect of the government's efforts will be to either destroy or scare away all capital from these shores (though the government is doing everything in its power to make it as difficult as possible to do so) to wherever it can be deployed with the idea that decent profits can be made and kept. It is worth noting that perhaps the biggest dispute at the G20 was between France and China regarding the status of tax safe havens. Guess which nation was for leaving them alone, and guess which nation was for attacking them? The People's Republic of China demonstrated that they understand successful capital creation far better than France, and so they opposed the attack on tax havens because they know that wherever tax haven money may have come from, given the chance, it inevitably recycles itself back into "legitimate" investment. And finally, guess which of the two aforesaid nations did not, until relatively recently, (within a generation) have an income tax?

Thursday, April 2, 2009

G 20 Fiesta

The G20 meeting in London is being hailed by many in the press as something of a success. No doubt, as a public relations exercise, it is. Certainly leaders like France's Nicolas Sarkozy gushing that the meeting achieved "more than we could have hoped for", and German Chancellor Angela Merkel asserting that the meeting yielded a "clearer financial market architecture, and a "very, very good, almost historic compromise." give one pause. (One wonders how something is "almost historic." An event is either in the annals or it isn't.)

In any case, at least one major paper, the New York Times, wasn't ready to jump on the G20 success story bandwagon. Just so, since despite pledging 1.1 trillion dollars to stem the tide of a global economic debacle, there were very few specifics offered by the assembled nations regarding how to deal with, as The Times put it, the "trillions of dollars in toxic assets clotting the financial system in the United States and Europe." In the meantime, count me among those skeptical of President Obama's proclamation, made at the conclusion of The Summit, that the world's nations had learned the lessons of history. Yes, it is true that, among other things, calls for protectionism are non existent. Yet there are new, perhaps even more egregious mistakes being made in the name of system preservation that are almost assuredly sowing the seeds for grave trouble down the line. I am, of course, referring to the pillaging of the U.S. citizenry's wealth by government on behalf of the very same malefactors who brought the nation's financial system to its knees. In an eerie echo of Depression era history, albeit of a central and southern European strain, the approach by the U.S. powers to the sins of the big banking system has been to ratchet up and defend a perverse fascist business model the likes of which has not been practiced since the awful days of Mussolini and Hitler.