On Money Printing...

Ben Bernake swung by Jacksonville to drop some enlightenment on our future printing press operators economists. One of his statements had me waxing nostalgic for Ace Ventura's response when presented with
"dubious" information. "Re-he-he-heaalllly?"
Bernake speaks in Jacksonville
"Bernanke defended the Fed's decision earlier this week to buy $600 billion in government bonds to push interest rates even lower. Some critics worry that the move will be inflationary."
"Sometimes you hear the Fed is printing money. That's not happening," he said.
So... we just had $600 billion laying around in reserve for a rainy day? Just like we had $1.7 trillion laying around in March of 2009? Hmmm. To quote Desi Arnaz Ben, "Lucy, you've got some splainin' to do!" The world bank chief is calling for a new gold standard based currency, as nations are losing faith in the U.S.peso dollar.
"Gold briefly hit a record high of $1,398.35 an ounce in early trade on Monday on concerns of a continued weakening dollar trend after the U.S. Federal Reserve last week acted to resume buying Treasuries.

SUMMIT ACRIMONY?
That policy has fed acrimony among leading economies in the Group of 20 in the run-up to their summit in Seoul on Wednesday and Thursday.
China and Germany, major exporting nations, have both decried the Fed's quantitative easing -- effectively printing money -- which is weakening the dollar."
China, Russia slam Fed move
Washington has frequently criticized China, saying it deliberately undervalues its currency to boost exports.
China says the United States, via the Fed, is engaged in the same thing that it stands accused of, and some emerging nations have already acted to curb their currencies' rise.
Resentment abroad stems from worry that Fed pump-priming will hasten the U.S. dollar's slide and cause their currencies to shoot up in value, setting the stage for asset bubbles and making a future burst of inflation more likely.
"As a major reserve currency issuer, for the United States to launch a second round of quantitative easing at this time, we feel that it did not recognize its responsibility to stabilize global markets and did not think about the impact of excessive liquidity on emerging markets," Chinese Finance Vice Minister Zhu Guangyao said on Monday.
The Fed's quantitative easing policy was unveiled last week to jeers from emerging market powerhouses from Latin America to Asia. Russia renewed its assault on Monday.

The Dollar has the had the same trajectory as the Titanic post-iceberg since 1985, losing a whopping 55% of it's value, with two huge downdrafts in March of 2009 ($1.7 Trillion in "reserves") and August 2010 (We still have at least $500 billion in "reserves" Jackson Hole speech). Every finance minister from sea to shining sea is blasting the Fed for printing money. Ben says he's not printing money. Hmmmmmm...

Addendum: 12/9/10
Hey don't take my word for it...take BEN's word for it! (Thanks John Stewart!)

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
The Big Bank Theory
http://www.thedailyshow.com/
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“The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”
—John Maynard Keynes

d

Currency Wars

While the majority of people are focused on the November 2 elections, the stock market is focused on one thing only: 2:15 PM Eastern time November 3rd. Why? That's when Printin' Ben Bernake announces the size of the latest "Quantitative Easing". Our monetary masters prefer the fancy term for printing money the same way your neighborhood garbage man prefers "Sanitation Engineer".
Problem is, the rest of the world isn't planning on letting us print our way out of this mess. ECB to respond in kind as FED weakens dollar On Nov. 3 at about 2:15 p.m. in Washington, the Fed will release its policy decision. About 18 hours later, at noon in London (8 a.m. in New York and Washington), the U.K. central bank will announce its move. The ECB will go public with its decision 45 minutes later, at 1:45 p.m. in Frankfurt (8:45 a.m. in New York). The Bank of Japan concludes its talks on Nov. 5 at about noon local time (11 p.m. in New York).

They have printers too and by golly they're prepared to use them...not to help unemployment as Ben says but simply to offset the Fed. Check and Mate. The losers in this will, of course, be anyone who doesn't make enormous amounts of money (the bottom 90% of society) as central banks flush their paper currencies down the toilet. Maybe Printin' Ben is due for a new nickname. The Trillionator. Hasta la Vista, dollar.

Currency War escalates
Dollar drops most in 4 weeks on Fed move
U.S. Dollar Index breaks long-term support
Spend and Pretend strategy pummelled by G20

Nov 8th Addendum: The stock market reaction to Ben's widely expected and anticipated move on Wednesday was...nothing. The market closed marginally up on Wednesday. You usually get a "sell the news" reaction to such an anticipated event...everyone knew it was coming. What everyone DIDN'T know was the reactions of all the foreign central banks. By Thursay morning, the verdict was in and no other central banks were firing up the presses...yet. I believe this is why you had the tremendous gap up Thursday and technical breakout. "They ARE going to let us print our way out of this!" thinks Mr. Market. We shall see. Ponzi on for now, Wayne. I also found this excellent article by Andy Xie on the inevitable end-game of currency wars:

TO HELL THROUGH QE

Death of the Tea Party

I truly dislike Partisan politics. Here is why. Take a good idea, something the vast majority of Americans need to understand and would gladly embrace. Throw in partisans, in this case the Republican right. This alienates the independents (and majority) as well as energizes the Democratic left. The morons in the Republican right give endless ammunition to the morons in the Democratic left, who launch assualts across all media outlets. Next thing you know, no one remembers what the original intent of what was a very good idea (the Tea Party) and plan was. Mission accomplished, as both parties are tools of the Banking Oligarchy that really run our country. What started as a legitimate third party opportunity has been emasculated by BOTH parties, neither of whom wants to see said third party exist. America, in turn, loses. Please watch these two videos in order, and recognize what an expert military DISINFORMATION campaign looks like.

Why don't we get it yet?

You might have heard the news recently that Britain is slashing government, military and public workers in an effort to cut their staggering debt and restore health to their economy. This is, of course, immediately denounced by the general press as "hurting the poor". It won't work, they say, and the poor will get poorer. Print some more money and Party on!
Well, I've got news for you. They're getting poorer anyway. Ladling borrowed and printed money on an already heavily indebted people merely gives the temporary illusion of prosperity. The money they have too little of is now worth less as a result. The debts they couldn't afford before now become a chain as the inescapable tax of inflation without income growth strangles their meager finances, making them a slave to debt. Doug Kass summed up our government's policy perfectly with the term "Screwflation".
Screwflation, like its first cousin stagflation, is an expression of a period of slow and uneven economic growth, but, its potential inflationary consequences have an outsized impact on a specific group. The emergence of screwflation hurts just the group that you want to protect -- namely, the middle class, a segment of the population that has already spent a decade experiencing an erosion in disposable income and a painful period (at least over the past several years) of lower stock and home prices. Importantly, quantitative easing is designed to lower real interest rates and, at the same time, raise inflation. A lower interest rate policy hurts the savings classes -- both the middle class and the elderly. And inflation in the costs of food, energy and everything else consumed (without a concomitant increase in salaries) will screw the average American who doesn't benefit from QE 2.

Why then do we insist on this path? Who benefits? Whoever collects interest on that ever-growing mountain of debt, that's who. Our old pals the Banksters, who happen to own all the major media outlets, Congress, and everyone's overpriced mortgage. Wall Street does OK as well, as anything that can't be printed (like gold, equities, you-name-it) soars as the dollar sinks.

There is hope, however. Little old Germany, the 4th largest economy in the world, told our President "No, Danke schön", when pressed to print more money for "stimulus". Instead, they chose to cut government spending and lower taxes, allowing the real economy to heal as opposed to the Ponzi Finance economy our leaders prefer. Here's the link to Econophile's piece that you won't see in the major networks...Germany defies Keynesian stimulus and recovers nicely as well as Germany's latest opinion on "Quantitative Easing". Germany says Federal Reserve headed the "wrong way" with Quantitative Easing. Germany did what most Americans are screaming for and successfully revived their real domestic economy. Britain is preparing to face reality and have their public unions and government SHARE THE SACRIFICE their private sector has been suffering for years. Yet our Federal Reserve is preparing to print up another Trillion or so in "prosperity" November 3 because of "uncomfortably high unemployment". The same unemployment that has gone steadily higher despite the 1.7 Trillion they printed from March 2009 through May of 2010 (of course that's when the stock market bottomed, but I'll save that for another post). There is a a hard, but healthy, choice to be made regarding our future but unfortunately our Nintendo / American Idol / No Pain/ Sugar High/ Go to School Forever on Government grant/ Money grows on trees government keeps choosing the easy route. Surprise.

How can stocks rise when the economy sucks?

Straight from the horse's mouth...I just happened to catch this on SPINbc this morning and my draw dropped, as I heard someone telling the truth. And not just anyone, but one of the biggest players on the Street. Normally you get a littany of mind-numbing company lines about why stocks are rising. Earnings, fundamentals, yada-yada-yada. Ignore all that crap. Just click the video below to see what really makes equities go up even if the economy sucks. I'll give you a hint..it rhymes with "dead" (like our middle class). If you've ever wondered how the stock market can be going up while you can plainly see the economy sliding all around you (think 2007), here's your answer. It's good times for Wall Street but for Average Joe Sixpack you just get your purchasing power whacked again...and again...and again...without the ability to vote yourself a raise like Congress or print yourself some more cash like the "Too Big To Fail" Banks. For you impatient types the really good stuff is at the 6:30 mark. This man controls BILLIONS in his hedge fund. Note he does not mention fundamentals. Or research. Or value. In fact, there is only one reason he's buying equities...wait for it... THE FED. Because they just guaranteed him that they would backstop his purchases with your money. So when you see markets soaring even though your world is in recession, filter out the propaganda and just google the minutes of the last FOMC meeting to see how much of our future free money was just promised to Wall Street to instill "confidence" that all is well. The economy is fine because stocks are up. Any questions?

Ponzi on, Wayne!

Stocks rise on hopes of more FED easing
European stocks rise on FED hopes
95000-Jobs-Lost-But-Stocks-Rally-On-Fed-Rescue-Hopes
Wall Street set to open higher on FED stimulus hopes
Stocks gain as FED signals more easing

Now, just in case you still need some convincing, the always-sunny Carl on CNBC asks a rare pertinent question of Jason Trenner of Oppenheimer funds. "What would happen to all assets if the FED didn't do Quantitative Easing (print money for you new guys) at the November meeting?" The answer, at 7:50 mark, is exactly what you'd expect. (Stocks down. A lot. Dollar up. A lot.) The whole exchange is interesting as you listen to Rick stick up for the bottom 90% of America while this asshole smugly enjoys the fruits of the FED's largesse (as opposed to the "unemployed" or "economy" they say they're trying to help).

Recession's Over!

The Creature from Jekyll Island

Most people I know feel like our friend here when it comes to finances. No matter how fast you run or how hard you work, you can't seem to get ahead. If you weren't pissed off about the bailouts, Wall Street's record bonuses last year and CEO's of bailed-out companies getting paid more to leave than the combined average annual salaries of 5,000 private sector Americans, it might be because you didn't know how our monetary system has been perverted and abused by our financial elite and Congress.
G Edward Griffin's book "The Creature from Jekyll Island" details the origins and history of our revered (by Wall St and subsidiaries) Federal Reserve, recently credited with "saving" the world financial system. I compiled his 5-part synopsis here for you. I promise you will not be bored. Do these two look alike or what?

PS...I've added a bonus link at the bottom if you think this is all tin-foil hat action. Feel free to pull a dollar bill out of your wallet to verify.

Sure Graham is pimpin' his newsletter and services here...but he's also right.
We do not own or control our own money system

Ben Franklin we need YOU!

You might have caught in the local news that we've got a spanking new C-note coming out. The company line is it's to prevent counterfeiting. We're talking you North Korea and Iran. Anyhow I couldn't help but wonder if the new $100 had more to do with the fact we just printed up over 2 TRILLION of them to get that pesky stock market to quit going the wrong way.

First, a little history so you can read along yourself. Here's the low down on the C-note, and not coincidentally it's also the history of bailing out our financial oligarchs when they make bad bets at the parlor.

Watch and be amazed at the world's most advanced Ponzi Scheme. Pay special attention to this paragraph in the Ponzi definition:

"Knowingly entering a Ponzi scheme, even at the last round of the scheme, can be rational economically if there is a reasonable expectation that government or other deep pockets will bail out those participating in the Ponzi scheme."

On Main St. the Ponzi implodes when too many people want their money back. Not this bad boy...we just print Mo' Money to pay off those who want it, and once the supply of panicked sellers is exhausted away we go to the upside. The peasants wind up having to pay more for EVERYTHING, since the currency value just went down by the amount printed, but that's a small price to pay for saving "The System". We're reminded nightly of "How bad things could've been" if we'd let the slide continue. The reality is we won't get the chance to find out, until the final collapse of our currency (which will be blamed on something other than Keynesianism Gone Wild). There's always a new Fed chief in shining armor that spent 14 years at Princeton learning how turn on a printing press, enabling what has become a parasitic banking system to continue sucking the life out of our middle class while grossly enriching themselves in FDIC insured Casinos. You'll never hear that on the TV since the major networks are wholly owned subsidiaries of said banks. The ultra-wealthy won't lose money or power as long as the bottom 90% of America is willing to keep picking up the tab. This fiat money system is da BOMB when you're at the top!
History of the $100 bill
Here is the history of the $100 along with the Dow Jones Industrial Average. Behold the power of the printing press...



The Dow Chart doesn't go back that far, but we can see we're coming up from somewhere much lower in 1914.





45% decline from 1919-1922. Decline halted.



A 50% drop in two months, as the "wealth effect" from 1922 flames out. It's not enough, however.



Unable to stop the slide, FDR makes Joe Kennedy chairman of the SEC. An experienced inside trader and market manipulator, this unlimited power allows him to halt the 90% stock slide via the printing press, but the recession wears on until WWII.
The fact the rest of the world's industrial capacity was demolished in WWII, resulting in America being the "last man standing" and pulling our REAL economy out of recession has been lost. Now it's FDR's adoption of John Maynard Keynes visionary monetary policies that did the job. Hey, why don't we try that just to make things go UP?

No, the founding fathers did not put that on our currency notes. Those asshole athiests are actually right about that.
A 40% drop in three months? Let's print some cash with "God" on it. "Ponzi on Wayne!" Also, Lloyd Blankfein was born. Ok I made the last part up.

A 31% drop in two years? Dammit we just printed some in 63! Where's the green ink at!

Hey, things are going OK! Don't you think they'd be better if we had more money though? We'll pass it off as "anti-counterfeiting" measures.

Note how we've evolved into printing money to make things go up, not just stop them from going down. Man this is great! Who cares if milk is now $4 a gallon! You know what'd be even BETTER? Let's get rid of that stupid Glass Steagall Law!

We managed to halt the 2000 bear market with only 1% interest rates for the big banks for four years. I'm sure that'll turn out..oh crap. Housing bubble.

Ok..our private economy is in big trouble. It's 70% consumption driven, but the consumption is credit driven. With little to no savings for many it's one credit bubble to the next, in the final chapters of "kick the can". This decline halted with 2.2 trillion in printing and 20 trillion at the discount window. Bankers are doin AH-ight with that it seems. Financial firms report 40% rise in bonuses worldwide Main Street keep paying your mortgages by the way.

A family of four now has a very difficult time making ends meet on $70,000 per year. That's about what Wall St executives spend on shower curtains annually. I'm sure glad "The System" is still intact.

"I conceive that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things."

-Benjamin Franklin

"Experience demands that man is the only animal which devours his own kind, for I can apply no milder term to the general prey of the rich on the poor."
-Thomas Jefferson

Casino's doing great! (Don't fight the FED)

Here's a look at what $2.2 trillion freshly printed greenbacks and a $20-trillion interest-free credit line can do in the "right" hands. It'll trickle down to the peasants eventually, I'm sure. Please remember not to ask questions when stocks are going up children. What's good for stocks is good for the banks and what's good for the banks is good for everyone. Quit your bitching about banks paying zero percent while you pay 10% -29% and realize this is "for the good of the country" (well, the top 10% anyway).

Citigroup "surprises" with profit on gambling trading

JP Morgan "surprises" with record fixed-income gambling trading revenue

Bank of America posts profit on record Merrill Lynch gambling trading revenue

Goldman Sachs earns 3.46 billion on record gambling trading

You might be unfamiliar with the Wall St. trading axiom "Don't fight the Fed". It means don't short the market when the FED is conducting open market operations. Ignore it at your peril. It's not there because of the FED's wisdom and foresight, perfectly adjusting policies and getting it "right" so markets respond "positively" i.e. GO UP. It's there because in times of market duress, the Federal Reserve Bank ("Fed" for short) will physically PRINT MONEY (called "quantitative easing" so it doesn't erode "confidence") and use it to buy anything they want (shitty mortgage backed securities and treasuries this time around) to arrest falling markets. More importantly for stocks, they open the discount window to the largest market players (see above) which at 0% interest rates is essentially a free line of credit, for them to do with as they will. The FED tells the public it's for "lending..to spur job growth". Really? Seems like they mostly trade with it to me, paying themselves absurd amounts of money, with a little set aside to screw the common folk with predatory lending rates. But I'm biased. There is one teensy little string attached to this...You have to BUY!BUY!BUY! stocks if you wanna "play ball". Once the largest players have an unlimited bankroll (the fix is in), the bears get the hell out of dodge,and fast, to avoid being mauled by the newly enabled bulls (a picture's worth a thousand words!)
Fundamentals? fugettaboutit. Reality? fugettaboutit. Just changed the accounting rules to hide losses? doesn't matter. It is on like Donkey Kong! Pity anyone who attempts to short in this environment. The Fed is dispensing "confidence", and you can't have that if markets keep falling. The bears must be taught that there's no money to be made selling short, and short positions are quickly vaporized. It's like playing Texas Hold-em where you're opponent goes all in, every time, and even if he loses another mountain of chips just "appears" before him. You'd have to leave the rigged table in disgust, bet against him and lose everything eventually, or in the case of markets start betting with him, even if you think his hand sucks. He's got unlimited chips, after all. Presto! We now have a bull stock market that "surprisingly" exists in it's own little printed world where unemployment, taxes, massive deficits, commodity prices, inflation, deflation, or anything else no longer matters. Reality has been put in suspended animation, to be dealt with sometime down the road. The thinking goes that eventually, the real economy will catch up with our artificially created market. The "wealth effect" where printed money = rising markets = rising bank accounts = rising confidence = growing business = hiring = jobs = more earnings = rising markets in a positive feed-back loop. Unfortunately the loop the last 20 years now is free/ printed money = massive price distortion (tech stocks, home prices) = rapidly rising markets = record bank trading profits = record bank bonuses = more reckless/leveraged trading = more obscene bank profits = even more leverage = bubble implosion=bailout = more free/printed money. The Main Street parts of "hiring" and "jobs" are no longer "in the loop" as the endless greed of Wall Street consumes the capital. Don't fret though..Main Street does get one thing out of this...they are stuck with the tab! The inflationary results of increasing money supply. All this printed money comes from America's future in the form of astronomical debt levels and devalued currency, for the benefit of the top 10% of individuals who actually even own stocks. You can earn the same but it buys less. Look at what your dollar is worth compared to 25 years ago (HT Jesse at Cafe Americain). Even a novice can see it's...half of what it was. Meaning you need to be earning twice as much now as in 1985 to have the same standard of living.

Food and Energy prices (dutifully stripped out of the Consumer Price Index...they're volatile!), gold, commodities in general. Everything under the sun becomes more expensive, and hurts the bottom of the economic ladder all the more. 50k a year used to be a nice job. Now you can barely support a family of four on that...assuming of course no savings, no vacations, no college for the kids, and you hold off retirement until death.

I suppose I'd view it more favorably if I was the one on top of the ladder...

SpiNBC

In the most blatant case (this week) of the corporate shills being bullish because...well...they're paid to be bullish I give you this WTF? Spin not 4 HOURS after Goldman Sachs is indicted for fraud by the SEC. Try not to spit up whatever you're eating on the monitor as you laugh out loud. And if you value your money you'll watch CNBC with the sound off like the pros, and just watch the tape. I love the way the head cheerleader cues in the "experts" with "Is this a golden buying opportunity?" Like, Omygod fer sure! I can't imagine anything I'd rather own than a company under investigation for fraud! The truly funny part is this is like..so..deja vu 2008. One wonders what could make these hacks not tell you to buy something. Iran with nukes? Bullish for anti-missile contractors and hazmat cleanup. Imminent meteor strike that could destroy all life? Bullish for canned food and MRE companies. Plus Smith & Wesson. All delivered with a straight face in a fancy suit, so they must know. They're experts, after all. Honestly. Look at these Dweebs. I don't know about you but I'm buying whatever they're selling!


Here's a refresher course in "buyer beware" in case you missed it.


If you wonder "Why don't we get opposing points of view?" Funny you should ask. Opposing view...meet "the door".

Matt Taibbi Collection

Matt Taibbi is a reporter for Rolling Stone, and you won't get a better dissemination of the screw-job Main Street America is getting courtesy of Wall Street anywhere. I've compiled several of his articles for easy access here. Hat tip to you Matt please keep up the great work.

The Great American Bubble Machine A scathing indicitment of Goldman Sachs and Wall St in general. A must read if you've ever wondered why ordindary Americans seem to be falling further behind, while the rich get richer. Goldman and the general media painted Matt as a "tin-foil hat guy" and conspiracy theorist, and never responded to his claims. However not one defamation lawsuit or even refutation of the facts as he saw them ever surfaced. Curious. Here's why:
Goldman Sachs charged with fraud

A little vindication nearly a year and a half after Matt's article (and nearly 100 years Goldman's been screwing the lower 99% of Americans and the world). Goldman players have always been touted as "the smartest guys in the room". The reality is they're the most connected guys in the room, and have had a license to steal for generations via Congress. Let's hope that's about to change.

Obama's big sellout A look at Obama's cabinet that somehow escaped the Main Stream media's attention. Think Matt's off-base? This is from December now read the next one...

Wall Street's "Bailout Hustle" A sobering update on what the TBTF banks are doing with the trillions in bailouts. Failure must always be an option for capitalism to work..otherwise you get this.

Looting Main Street The title speaks for itself but trust me...your jaw will drop. Again, you won't see this on CNBC since they're a subsidiary of bailout recipient GE capital.

Vampire Squid follow-up It's been one year since the "Great American Bubble Machine". What's been going on?

Putting the "M" in Manipulation

Most everyone probably missed this story since the mainstream media squashed it like a bug on a windshield. Andrew Maguire is a London commodities trader who blew the whistle on JPM's active manipulation of the silver market. This is a very informative interview from someone who was profiting from the manipulation because he could see when and where it was occurring, but chose to expose it because, in a nutshell, he knows it's completely destabilizing to our financial future. How can governments the world over print trillions of paper currency and not have commodities go sky-high? By manipulating the markets, that's how. As long as everybody plays ball it seems fine on the surface but underneath it's rotten. Most won't know about the rot until it collapses under them. People that voice concerns like this get the "tin foil hat" treatment but listen to what these guys have to say when you can.

Andrew Maguire interview on King World News

Underwater Mortgage? This might help.

Visit msnbc.com for breaking news, world news, and news about the economy

Here's the link to the website. youwalkaway.com

Here's what Bailout recipient Morgan Stanley is doing: Morgan Stanley walks away from 5 office towers.

Have you recieved a bailout yet? Didn't think so. But you're supposed to keep paying like a good little sheeple.
This is a link to the most recent (and quite belated) efforts to actually help us peasants and not the banks. You'll need to be at least 20% overvalued on your home and stop making payments to qualify. Easy enough.
Government plan to help homeowners

And a recent one from the hometown..
Should you walk away?<

The common thread is a complete lack of cooperation or proactive modification on the part of the banks. For those naive honest enough to still be honoring their obligations and doing what we've done for generations in this country, you have to ask why there are different standards for our financial oligarchs than for us peasants. Unfortunately no one will even return your call until you're at least three payments behind.

Wilshire 5k...trouble ahead.

This is the weekly chart of the Wilshire 5000, which includes 5000 component stocks and as such is the broadest snapshot of the US stock market. The top horizontal line is the 62% fibonacci retrace level of the 2007 bear market, which is of vital importace in large movements. Follow along that line and you'll see the Wilshire has bounced along it several times the past decade, making it an important support / resistance zone as well. Now follow the arrows from top to bottom. The top area is the current price level of the Wilshire at 12229, a mere 214 points from the retrace line (it's already up 153 so far this week). The middle area is pointing to MACD. This should be above it's zero line when prices are rising, and below it when they are falling. Prices are still rising but this is negative...a bearish divergence. The bottom arrow is pointing to stochastics, which visually do three things..when the blue crosses the red you get a sell signal, which we've had. When they're above the midline you're in an uptrend, which we are. When they approach the very top of the window or the very bottom, it's an indication of extreme overbought or oversold, meaning things are too giddy or pessimistic. It's not often you get this many indicators to line up. Throw in the fact the Wilshire will have rallied 80% or so from the March bottom without a meaningful correction (greater than 10%) and there's a very high probability the bears will probe short and the bulls will take money off the table..at the same time. Setting us up for the long awaited correction. Game on.

"YOU CAN'T HAAAAANDLE THE TRUTH!"

Apparently not all the judges are bought and paid for. Time to find out some long overdue details about just who got the goodies and why. Court Rules Fed must disclose bank bailout records.
For the record, I believe the Fed's concern is not that the public sees astronomical sums of money being channeled to a priveleged and connected few that won the hallowed "Too Big to Fail" designation, like GMAC. I believe their concern is that it will become common knowledge that our entire banking system was and still is bankrupt. When you use 30 and 40 to 1 leverage, in a fractional reserve banking system that at best requires a mere 10% of the money being lent to be actual reserves, you're open to some rather serious losses, should the bets ever go against you. The general mark-to-market accounting principles were changed, under intense congressional pressure, to hide the severity of the losses. We now use "mark -to -make-believe" where banks value assets at what they "believe" they are worth, if sold in an "orderly" way. Think I'm making that up? Click HERE. The losses are still there. The FED has printed 1.2 trillion dollars to buy mortgage-backed securities for the last year and prop up housing prices. Why? Wouldn't lower prices spur demand and let us get through this faster? Sure it would. So you have go back to the whole leverage bomb that went off in 2008. Banks cannot have everyone ask for their money back at once because it doesn't exist..fractional reserves remember? The system works because people don't do that...usually. But if you're leveraged at 40x that amount, like Citigroup was, then it takes 40x LESS losses than before to have the same effect..which is insolvency in a hurry. And which exists now, despite all the shennanigans. The FED is dutifully taking all that toxic crap from the bank's balance sheet and moving it to...yours the taxpayer's. Freeing the banks to get back to the vital business of speculating in the stock market, raping consumers with 29% interest rates on credit card balances they can no longer pay off, paying obscene bonuses because with all the rule changes the balance sheet looks GREAT! and of course lobbying congress not to change anything. Which is why I expect the FED to fight this all the way to the supreme court. And probably win, as they're persuaded it might not be in the country's best interest to be seen as Bernie Madoff wanna-be's by the rest of the world. Even if we are.

Follow up...I wrote that a month ago. Now this. Banks threaten to go to supreme court to prevent bailout disclosure *Sigh* I need to get paid for being right...

We're not alone...

Many people I speak to regarding construction, jobs and the future are universally pessimistic down here on Main St. If the old adage "misery loves company" is true, then you might be somewhat surprised to learn how global this recession really is. Click below to see how Europe and particularly Spain is doing. You might see some similarities to us and realize "across the pond" is a lot closer than it used to be. We gotta buckle up and git er done. This has a long way to go, and there is no quick fix. Recognition of the dramatic spending cuts at the government level necessary to put us back on a sustainable growth path is vital. Unfortunately the prevailing plan seems to be we can "spend our way out of this". We spent our way INTO this boys and girls.

Europe's bruised economies

Stupid in America

This is a video on education in America, union-style. It's actually from three years ago. The more recent post is underneath it. Grab some Pepto-Bismol or Rolaids you'll be compelled to use soon and watch.


After getting suitably pissed off about public employee unions sucking the life out of America you'll need a pick-me-up. I've got just the thing..click over to MISH's blog HERE
and check out his favorite new badass Governor Chris Christie of New Jersey. He's getting it done...more power to you Christie and bravo. Let's hope the independents can keep you in over the union's objections.