Archive for the ‘Bonfire of the Vanities’ Category

A song written in 2005 about what is going down in 2011!

Into the Silos

Making love
Under silos
Trapped above
What do I know?
Whispering sweetest secrets
For all the World to hear
It’s live on television
Intimacy revealed

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For absolutely no good reason.. Just reinflating the housing market in preperation for the next housing market crash which is now CERTAINLY going to be worse than the last one.

Here’s Tyler Durden’s suscinct evalutation. (BTW QE = Quantative Easing)…

From Zero Hedge

The Freddie Mac 30 year Fixed Rate Mortgage rate for the May 27 week was announced, and, in tried and true “let no crisis go to waste” fashion, it has dropped to a fresh 2010 low of 4.78%. So to recap: stocks are where they were at the beginning of the year, the US federal debt is over $13 trillion, QE is over, Europe is imploding, China is tightening, North and South Korea are blasting The Eagles at each other at over 200 dB in clear violation of the Geneva convention, there is no oil left in the GOM, US double dip is accelerating, Marsian global rescue swaps are being considered by the Fed, yet mortgages are cheaper than they ever have been, as the government goes double all in in its attempt to reflate the housing bubble. Well played, Ben, well played.

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When Warren Buffet invested $5 billion into Goldman Sachs everyone took that as a sign that if he had faith in GS then that just demonstrated how good that company really was. But when Goldman Sachs started getting into trouble and he came prancing out in its categorical defense I got a sinking feeling in my stomach that Mr. Buffet might very well be THE man behind the curtain at the Emerald City.. That other oracle, Alan Greenspan was just a foil… Darth Vader to Warren’s Palpatine if you will…

When the news broke that he was fighting the regulation of derivatives I new for sure that he’s been turned to the Dark Side. This is the man who coined the phrase “Weapons of Financial Mass Destruction” to describe the financial instruments that he has since loaded up on to the tune of $63 billion, no doubt at the insistence of his buddy Lloyd B. over at Goldman’s.

Paul Farrell is a 70s Wall Street veteran.. A lot of people think he’s flown the coop. I do not. He’s of Buffet’s generation so I take his shock and dismay with the mess the World is heading into quite seriously.

Here is his take on the situation:
Buffett defends Goldman, joins greed Conspiracy

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I’ve read in a number of places that nothing should be done to break up mega banks and to expose the fraud that has become the cornerstone of the American political and economic systems because it is too risky. Which is to say it’s too difficult to put the genie (i.e. “Fraud”) back in the bottle.
Should BP give up on trying to fix the hole in the bottom of the sea that’s spewing black death into the Ocean because it’s extremely difficult and expensive to pull off?

This Financial Crisis is one of the greatest man made disaster ever unleashed. The Collapse of Lehman was the Deep Horizon toppling into the sea and the obstructionism on Capitol Hill is equivalent to just sitting on the shore and sipping mohitos while waiting for the slick to devastate the shore.

It would seem that the oligarchy has no qualms whatsoever about hanging Civilization as we know it over the Abyss of financial ruin by its ankles, I’m starting to think that sky’s the limit on what these people are willing and capable of doing. (more…)

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Here’s an excerpt from Monkeywrenching the World Economy ,a fairly concise overview of the thinking behind the Financial Crisis.

“Here’s what happened: Before to the meltdown, the depository “regulated” banks got their funding through the repo market by exchanging collateral (mainly mortgage-backed securities) for short-term loans with the so-called “shadow banks” (investment banks, hedge funds, insurers) But after Lehman defaulted, the funding stream was severely impaired because the prices on mortgage-backed securities kept falling. When the bank-funding system went on the fritz, stocks went into a nosedive sending panicky investors fleeing for the exits. As unbelievable as it sounds, no one saw this coming. (more…)

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Take a look at Fraudonomics and Fun Fraudonomic Facts by Mark Ames in New York Press.

I’m surprised that these are the first articles I have seen to spell out clearly what’s been obvious to me for a few weeks now after reading tons of material on synthetic CDOs that has come to the surface following the SEC fraud case against Goldman Sachs.  The entire U.S. economy is one big Ponzi scheme. The Financial Crisis destroyed nearly every job that was created since 1999 but to keep the economy from collapsing the U.S. Government had to pump, in one way or another, close to 9 trillion dollars , (to give you an idea how ludicrous a trillion is..there are only..ONLY…100 to 200 billion galaxies in the Universe) into the economy…  America has exported the lion’s share of it’s industrial jobs to Asia. Several U.S. states are on the verge of bankruptcy…  Europe is fraying at the edges and more and more it seems that the Euro might very possibly become a thing of the past

It’s great that markets are rallying and all…but I don’t see any happy endings on the horizon…Lehman’s was the oil rig burning up and sinking and ever since oil has been pouring from the man made whole at the bottom of the ocean of  Big Finance.  They can fight the fire, they can try and contain the slick..but it’s coming to shore and there ain’t much we can do about it.

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Read how America has become a Banana Republic With No Bananas.

I’ve been wondering for months how come Americans are not marching in the streets with pitchforks and torches, ready to burn down Wall Street.. Apparently that time has come…minus the pitchforks and torches..for now…

After reading “The Sickening Abuse Of Power At The Heart Of Wall Street” from Simon Johnson, chief economist at the IMF from 2007 to 2008,  it is no stretch of the imagination to presume that more protests will follow… It will make the Tea Party seem like small potatoes… America might finally be awakening from its Reaganomics Bushite Induced Coma… but is it too late?

Things I read this weekend  are making it look like the S.E.C. suit against Goldman is the tipping point, the Avalanche control mortar that has set off the entire ridge. Things are moving fast. For weeks there’s been tons of speculation on whether or not the U.S. Senate was going to get bogged down into the same fillibuster blackmail scenario that dragged the Health Bill through lawmaking hell… And then with the flip of an S.E.C. switch, overnight,  it became apparent to the G.O.P. that there was no way they could possibly get away with siding with the banking industry.  So now it seems that a financial regulation bill is on its way and it might even include a break-up the banks amendment.

What is clear is that the Oligarchy is scared.  If Goldman loses it’s legitimacy there is no telling what might happen to it.  Is it really too big to fail?  Or has it become too big to be allowed to exist?

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Today at Naked Capitalism, Yves Smith compares the news that Greece is broke and needs a 45 billion euros bailout (60 billion U.S.) with the collapse of Creditanstalt, an Autsrian bank that collapsed in 1931 when markets thought a sustainable recovery was underway..

“The news about Greece’s bailout has me thinking a lot about Creditanstalt, the Austrian bank which collapsed in 1931. This account bears remembering because we should see the 1929-1933 descent as a two-part episode, with the second part starting in the Spring of 1931 with Creditanstalt.It should be noted that there were a lot of positive economic signs before the Creditanstalt ruined this. The key difference to today is the monetary liquidity and fiscal stimulus, which has buoyed both asset markets and the real economy. But, the situation in Greece makes me think a lot about Creditanstalt.”

She then points to a website that chronicles news from the 1930s to highlight the similarities with that era…

“First, there is the blog site News from 1930 which provides verbatim news from the Wall Street Journal exactly 79 years ago because the September 2008 Lehman bankruptcy roughly corresponds to the October 1929 crash . They have an entry from yesterday with a lot of good data points. The ones I want to highlight are bulleted below. By and large, they are very bullish. Everything is upbeat.”

In a nutshell we’re back to a situtation where just when things seem to be on the mend two years after a critical financial shock a systemically important financial player goes insolvent bringing down Europe and subsequently the U.S. along for the ride.

Check it out. Very interesting, if not unsettling, demonstration of Mark Twain’s insight into the rhymes of the times…

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One should not underestimate the narcotic effect of Survior (first episode aired in 2000) and the simultaneous dumbing down of MTV which began phasing out video programming at about the same time. By 2008 MTV was only playing 3 hours of music videos in their 8 hour rotation. Now MTV is mostly know for The Tom Green Show, Jackass, The Real World, The Osbournes, Newlyweds: Nick and Jessica and in 2005 and 2006 they upped the ante with favourites such as 8th & Ocean, Laguna Beach, my Super Sweet 16 and Viva La Bam but to name a few.

Get Rich or Die Tryin’: Fittie’s Crib

The most damaging show produced by MTV in the context of the Financial Crisis has to be MTV cribs, on the air since -you guessed it – 2000 – an obscene glorification of the excesses of wealth targeted directly at teens and young adults, many of which would now be on Wall Street pursuing the Cribsyian Dream of living in mansions and having an endless stream of wealth and not enough time to spend it. The MTV generation have become the footsoldiers of Bank CEOs and upper management, so desperate for fast and easy wealth that they will gladly sell their fellow Americans down the river to obtain it.

Despite the development of ground breaking dramatic series on cable that have arguably trumped film and novels as the de facto fictional narratives that inform the masses, the damage done to the collective conscience of America by the putridity of reality television and it’s toxic parade of venal celebrity seekers, wealthy exhibitionists and overall crudeness as entertainment is coming home to roost. Twisted by pathological narcisism, a critical number of Americans have been duped into believing that their destiny was in home ownership which could then be leveraged to obtain the luxurious lifestyles of those people, from all walks of life, that they saw reflected on television – when they could shift their attention long enough from their navels to see it.

And this is not to blame the citizens of America. It is their leaders, across the entire spectrum of American life, that have failed them. Breaking up the banks and regulating them is just the beginning. Repairing America’s soul will be the real challenge.. And my apologies to those who don’t see themselves at all in this post. You are many. But don’t you feel like you are losing the battle?

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Read The Discount Rate Mismatch

This is very enlightening post by Statsguy, a frequent guest contributor to the Baseline Scenario, that explains why we are at a critical point in economic history.  The entire system is so far in debt that there is no painless way to get out of it.  What would you be willing to sacrifice so that the historic theft of wealth on Wall Street gets justly punished?  Your retirement?  Your pensions fund?  Your home?  And don’t think that Canada would be immune.  Despite having avoided the worst of the 2007 phase of the Financial Crisis, it is far from over and if the U.S. collapses in earnest, there will be nowhere to hide.  This is one of the greatest challenges humanity will face and it is intimately connected to controlling climate change and wether or not the 21st Century descends into the blood bath that was the 20th.   If we chose to continue with more or less the same system… then we will likely pay a nasty price.

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