Flip This Burger

The Last Best Hope

2010-09-25T00:50:00.001-05:00

Karl Rove, you ignorant slut.

2010-09-15T19:54:00.002-05:00

Your services are no longer required. That'll be all.

AP Orders Staff: STOP USING THE PHRASE 'GROUND ZERO MOSQUE'

2010-08-22T13:23:00.006-05:00

Nope, no media bias here. No siree.

In an unusual move, the Associated Press has publicly released an advisory memo [1] to its reporters on how to cover the Ground Zero mosque story - and the first rule is that journalists must immediately stop calling it the "Ground Zero mosque" story.

"We should continue to avoid the phrase ‘Ground zero mosque' or ‘mosque at ground zero' on all platforms," reads the advisory, which was issued by the AP's Standards Center.

Instead of the "Ground Zero mosque," AP recommends that reporters use the terms "mosque 2 blocks from WTC site," "Muslim (or Islamic) center near WTC site," "mosque near ground zero," or "mosque near WTC site."

The AP suggests that it might "useful in some stories to note that Muslim prayer services have been held since 2009 in the building that the new project will replace." In addition, the news service offers a "succinct summary of President Obama's position" on the mosque, but doesn't include the positions of any other politicians.

Also included in the advisory is a "Fact Check" to provide "additional background" for reporters.

(an excerpt)

Missouri Voters reject Obamacare by a 3-1 margin!

2010-08-03T22:09:00.004-05:00

“The several States composing the United States of America, are not united on the principle of unlimited submission to their General Government.”
–Thomas Jefferson

75% Vote for the nullification of Obamacare.

Today, voters in Missouri helped bring the Jeffersonian principle of Nullification one step closer to the mainstream by approving Proposition C – the Health Care Freedom Act.

The new Missouri statute is nearly identical to Virginia’s Health Care Freedom Act – which is being defended by Virginia AG Ken Cuccinelli, and was given the green light to proceed in court by a Federal Judge this week. The Missouri proposition passed the Senate on May 4th by a 26-8 vote, and the House on May 11th by 108-47 vote. Today, voters approved Prop C by a wide margin – early returns showed over 75% in favor.

The legislation provides that:

No law or rule shall compel, directly or indirectly, any person, employer, or health care provider to participate in any health care system.

and

A person or employer may pay directly for lawful health care services and shall not be required by law or rule to pay penalties or fines for paying directly for lawful health care services. A health care provider may accept direct payment for lawful health care services and shall not be required by law or rule to pay penalties or fines for accepting direct payment from a person or employer for lawful health care services.

BP Spills Coffee

2010-06-11T09:47:00.001-05:00

Obama Unplugged

2010-03-08T21:00:00.001-06:00

Although I disagree with him in just about every way imaginable, Barack Obama makes some really fine points here.

Obama, Pelosi & Reid along with the other Traitorous Hypocrites say 'To Hell With The People', We're Going Nuclear

2010-03-03T08:37:00.007-06:00

President Obama to Say Democrats Will Use Reconciliation to Pass Senate Health Care Reform Fix

Here is Obama, Pelosi, Reid and many many other socialist/democrats back in 2005 railing against the Bush Administration for contemplating using reconciliation or what they termed "The Nuclear Option".

Obama called the process "UNCONSTITUTIONAL" and said that it would change the character of the Senate forever. He went on to say that this would be against what the Founders intended.

Sen. Biden called this process a "naked power grab" and warned the Republicans that they wouldn't always have a majority.

Sen. Baucus, "This is the way a Democracy ends..."

And as is the usual now, the democrats/socialists (and their media minions) many of whom were in this video, say that this didn't really happen in the same context. They argue what they were protesting is different that what they are proposing doing today.

Putting aside the complex senatorial procedural protocols away for just a minute, the democrats here are simply trying to use a 51 vote majority in The U.S. Senate chambers to enact brand new legislation.

There it is. The Republicans used reconciliation to amend budgetary items inside legislation already enacted (which had to be passed originally with 60 votes).

This blatant power-grab against the will of the majority of Americans united against ObamaCare is shocking. Especially only 45 days from when Scott Brown was elected into Teddy Kennedy's Massachusetts seat, by saying that he would represent the 41st vote to kill ObamaCare.

U.S. Gov't Manipulating The Markets - YOU MUST SEE THIS!

2010-01-25T10:41:00.001-06:00

THE CONSERVATIVE REVOLUTION BEGINS TODAY!

2010-01-19T20:52:00.000-06:00

SNL rips Obama a new one...

2009-11-22T14:44:00.002-06:00

Democrats: "Whaaaa!!!"

2009-10-30T21:07:00.000-05:00

CNBC allows a non-cheerleader to speak

2009-10-04T16:51:00.004-05:00

Jim Rickards: "Federal Reserve needs to cut US Dollar in half over next 14 years."

Alan Grayson vs. The Federal Reserve General Counsel

2009-09-27T21:36:00.003-05:00

Could you define the meaning of "manipulating the stock market/futures market to the tune of one trillion by front-running and insider trading"?

Obama Criticism Flow Chart

2009-09-20T01:10:00.004-05:00

http://www.missourah.com/2009/09/15/obama-criticism-flow-chart/

Congressman Mike Rogers on Obamacare.

2009-09-17T00:55:00.003-05:00

My response:

State-run Media says DOUBLE DIGIT JUMP in support for Obamacare after speech

2009-09-11T06:47:00.005-05:00

Of course, here is the fine print:

The CNN/Opinion Research Corporation poll was conducted just before and just after the president's speech, with 427 adult Americans questioned by telephone. The survey's sampling error is plus or minus 5 percentage points.

The sample of speech-watchers in this poll was 45 percent Democratic and 18 percent Republican. Our best estimate of the number of Democrats in the voting age population as a whole indicates that the sample is about 8-10 points more Democratic than the population as a whole.

What GREAT news for President Obama and his healthcontrol debacle, right?!

Only sample 18% Republicans and you will get this kind of result everytime. Good job State-run Media. Dear Leader Approves, and you will be seeing TARP money real soon.

In other news, Obama has a 90% approval rate according to CNN's latest poll just released this hour. The random non-partisan polling data reveals that CNN asked one representative from an organization/company how they thought Obama was doing in overall job performance as President.

Small-business Owner
ACORN Executive
SEIU Executive
ACLU Executive
DNC Official (H. Dean, whoever that is)
NBC Executive
Screen Actors Guild Executive
Goldman Sachs Executive
Socialist Party USA Official
A randomly chosen Boston ghetto resident

WAKE UP AND THEN STAND UP FOR AMERICA.

2009-09-02T23:06:00.007-05:00

Our Great Country is going through a most perilous journey as I type this blogpost. It has not been a good last few years for America, to say the least. And there is plenty of blame to spread around, lest this be just about our current President Obama.

George W. Bush and the Republican-controlled Congress literally opened pandora's box with the Patriot Act, and for allowing, nay championing, the first Bailout for more than three-fourths of a trillion dollars in the Fall of 2008.

Bush will forever be known for this sad quotation: "I've abandoned free-market principles to save the free-market system."

What has transpired in the last 9 months, since President Obama has taken over has been truly breathtaking. Not breathtaking like seeing The Grand Canyon for the first time, or holding your first child in your arms minutes after they were born. No, breathtaking in that same sense where you just witnessed the death and destruction of a massive eighty car pileup on the interstate in front of you.

Not even fully going into the debacle that is Obama's (hopefully) failed socialized medicene, errr..."Public Option Plan" in the last few weeks, here are some other top priority scares that We The People need to be aware of, and stop.

President Obama has surrounded himself with czars or "advisors to the President" who are outright communists/socialists/fascists or have these evil tendencies at their core. Van Jones, Cass Sunstein, John Holdren & Mark Lloyd are just a few of the radicals Obama has chosen to advise him on critical issues that are worthy of 'change'.

Van Jones, Green Jobs Czar, is a self-admitted COMMUNIST who started the group STORM, and has been quoted as saying, "Spread the wealth, change the whole system."

Where have I heard that phrase "Spread the wealth" before? Oh, that's right, it was during the 2008 Presidential campaign from Barack Obama.

Cass Sunstein, Regulatory Czar, has lobbied for legal rights for animals, not that he probably cares for the animals, no it's a means to enact environmental/societal change on America.

John Holdren, Science Czar, has written how it would be "Constitutional for the Government to use sterilization methods on its people in order to control population...and that it would be easier to sterilize women at the hospital after the 2nd or 3rd child than to track down the men for sterilization"

Mark Lloyd, FCC Diversity Czar, opined how great it was that Venezuela's Chavez took control over the media and turned it into state controlled media. (Research NBC, MSNBC, CNBC, GE & Goldman Sachs to how they all tie in)

Obama and the Dept. of Education in the last few days have prepared a mandatory speech to all of the school-aged kids in America. They have provided cirriculum that asks the students how they can help President Obama. No, not help America, or help the community, it asks how they can help a politician.

The National Endowment for the Arts, has recently been caught communicating with left-leaning artist groups on how they can enact change on the debate for healthcare reform and other vital policy propaganda for Barack Obama. So, we the taxpayers get to fund the NEA whereby they use that money to bribe artists to create propaganda.

Barack Obama and his wife, along with his Czars and other political appointees, have been consistent at least. They have all maintained that they want to "fundamentally change America".

I, for one, am taking their word for it, and just using the above examples of the kinds of people Obama has surrounded himself, is truly frightening.

It is not much of a leap to start connecting the dots here and seeing what Obama is up to and his grand plan objectives.

Bottomline, I really don't care if you are a Conservative or a Democrat, an Independant, a Liberal or a Republican, as long as you are an American is all that matters.

READ THIS CAREFULLY!

You cannot allow any one man to enact this type of change on Your Country, no matter what political party symbol is beside his name. You must understand that unless he can pull off the truly unthinkable, and become a dictator like the left's favorite Chavez and Castro, the opposite party of yours will be in positions of power again.

You will be allowing this President to create "precedent", that you will surely be raising hell about should you find yourself in the political minority again, and you will.

The next successor might use the tools Obama gave him to finally take away all of our rights some day.

Since the birth of The United States of America, her citizens have been freedom-loving capitalists who cherished The Bill of Rights as was given to them by God, not man. Meaning, these rights were not up for debate, and could not be taken away by man.

The founders knew all to well, that in the future, powerful men with evil hearts could destroy the Republic if certain steps were not taken to make this virtually impossible from the start.

So, great men like Madison, Franklin & Hamilton wrote the Constitution and The Bill of Rights, specifically limiting the powers of the federal government, and granting to the people (states) as having ALL the rest.

The Tenth Amendment states: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Wake up and then stand up for America.

Obama Joker Poster Popping Up In Los Angeles

2009-08-02T02:32:00.004-05:00

Read the story from Noel Sheppard @ Newsbusters

US Soldier Demands Apology From Senator Claire McCaskill at Town Hall

2009-07-28T22:38:00.001-05:00

Ahmed and Salim - Episode 1

2009-04-27T12:30:00.001-05:00

Found this at http://islaminaction08.blogspot.com/2009/04/israeli-made-south-park-like-cartoon-of.html

Can we trade Obama for this guy?

2009-03-25T18:21:00.001-05:00

Different Presidents, A Different Corps

2009-03-18T08:49:00.000-05:00

Is stimulus spending cash into 'black hole'?

2009-03-16T19:23:00.002-05:00

Winnipeg Free Press
By: Ray Turchansky
3-15-09

There is a growing list of educated people predicting that the trillions of dollars spent by governments around the world to stimulate a moribund economy will not work.

There's already Peter Schiff, head of Euro Pacific Capital in Connecticut, and Peter Morici, professor at the University of Maryland and former chief economist of the U.S. International Trade Commission. And you can add the name of Allan Brennan, manager of economic analysis and forecasting with the Alberta government's Department of Infrastructure and Transportation.

"Stimulus packages will not help the economy at all," Brennan said in a presentation with Dundee Private Investors branch manager Trevor Hamon.

"A lot of money is going to banks, but unless you get that money to consumers, things will not improve. Money is going down the black hole. If you think they're going to start consuming wildly, I don't think it's going to happen."

Brennan said that within a year, we will face a cataclysmic event that will shake world finances to the roots, leading to a major period of either deflation or hyperinflation, either of which will rock the global economy. Just what that event will be, he's not sure.

It could be the failure of eastern European countries, or the collapse of the U.S. dollar. If it causes hyperinflation, investors can prosper by letting stock prices plummet for a couple of months, and then invest in commodities, with copper leading the rebound.

"With deflation, you would end up with a very violent, very short, very deep recession, and within three years you'd start climbing out of that. With inflation, it could go on for 20 years."

Brennan explained that we are in this mess where banks are going under because they used over-the-counter derivatives, instruments whose value is based on underlying assets, in many cases the debt from subprime housing mortgages in the U.S.

"When it fails big-time, a lot of people will be hurt. If you think we're having trouble now, just wait until the mountain of garbage goes rotten.

"Debt is 470 per cent of the current economy, and the last time things were bad, in 1979, it was 300 per cent. We are probably beyond the point where that debt can ever be saved. This is a solvency crisis, not a liquidity crisis."

Portugal, Italy, Greece, Ireland and Spain are all near bankruptcy. So is the state of California.

"The United States has actually lost sovereignty over its own interest rates and the value of the dollar."

Hamon warned that banks have lured people into home-equity lines of credit, and they are now retiring while in debt.

"In the next couple of years, the art of investing will be not losing your principal," Brennan said. "The way out of this, in the long term, is for people to start saving." Then they can start spending again, without being in debt.

"The new economy that comes out of this mess will not resemble this economy at all."

Brennan said the nationalization of banks in many countries is inevitable, but it will be done "under the table," as governments buy in and reduce the equity value of other shareholders. He sees the British pound disappearing as an independent currency, the U.S. dollar in peril as the reserve currency, and the euro perhaps splitting into a strong Nordic euro and a weak Latin one.

In the end, Hamon said, we will return to the way we used to live a generation or two ago. That means grandparents living with their children. Workers taking lunch pails to work. One-income families. People raising their own children and cutting their own grass. Camping instead of cruising.

"There will be a reduction in living standards," Brennan said.

-- Canwest News Service

New Era of Responsibility? - Whatever.

2009-03-03T00:37:00.002-06:00

(Source Yahoo Finance)

The late Dr. Adrian Rogers (1931-2005) offered the following observation several years ago and it bears poignant significance today:

"You cannot legislate the poor into freedom by legislating the rich out of freedom.

What one person receives without working for, another person must work for without receiving.

The government cannot give to anybody anything the government does not first take from somebody else.

When half of the people get the idea that they do not have to work because the other half is going to take care of them,

and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for,

that my dear friend is about the end of any nation. You cannot multiply the wealth by dividing it."

10 things that won't survive the recession

2008-12-23T22:46:00.004-06:00

Tight times, and budgets, will hasten the end for some things.

The government says we've been in a recession for the past year. Experts say it'll be at least another year before it's over. And everybody says it's the worst economic downturn since the Great Depression.

Nice sound bite. What does that mean?

Who knows? We can be sure that this downturn will differ totally from the Depression, and also different from the many recessions we've suffered every decade or every other decade since the '30s. I'm not an economist or a historian, but it seems to me that this recession will be something unprecedented.

Sounding The Alarms - Ron Paul & Peter Schiff

2008-12-17T15:37:00.004-06:00

Imitation is the sincerest form of flattery. But in this case, this video needs to go viral if 'We The People' have any chance of saving our Country.

I found this on W.C. Varone's excellent blog. This video should be required watching for EVERYONE!

GREAT NEWS! 533,000 LOST JOBS LAST MONTH!!!

2008-12-05T23:48:00.008-06:00

After hearing this unexpectedly fantastic jobs number, I rushed on over to my online brokerage account; and went 1000% long on full-margy.

I can't really divulge my proprietary stock market methodology here (*cough*yahoofinancestockscreener*cough*largecap*cough*retail/luxury/commercialrealestate/reits/homebuilders/mortgagecompanies/ratingsagencies/homeimprovement/automakers/furniture/yachtbuilders/casinos/commercialmortgagebackedsecurities/~~investmentbanks(2)~~"bankholdingcompanies(2)"*cough*p/e>150*cough*), but!, I will say that my conservative investing style has a 91% chance of producing such large sums of cash profits, that I'll need to hire Wells Fargo Armored to deliver them directly into waiting holes dug into my back yard.

I cannot overstate how great this news is and how extremely bullish it is for the stock market, and the overall U.S. economy in general.

Please allow me to explain. But first, I'll need you to put your skepticism on hold for a few minutes and let your mind fully expand with no prejudices, pro or con.

See, this is all about reading the story within the story. Sure, there are some that would say there are now 1.9 million jobs that have vanished so far in 2008 (not including December), and then they'd say this is the largest monthly negative number since 1974. And then they'd follow that "Doom & Gloom" statistical mumbo-jumbo up with nonsense about fruadulent BLS adjustments, and that actually based on just 2008, the revisions for Nov. + Dec. will add another 300,000 - 400,000 to the unemployment number. Then they'll really piss me off and insinuate that these unemployment numbers are a lagging indicator and the U.S. economy is in very bad shape.

But!, I'm a glass half-full type of cat. Soon to be President Obama has already indicated that he wants to start public works projects that will rival FDR in size/scope, right? This linked article mentions 2.5 million jobs created by Obama.

Just where do you think Obama will find the workers to pull this off? No, not illegal aliens. But BAMM! these 2 million plus unemployed workers of 2008, silly. This is what you call a good old fashioned "WIN-WIN".

You add this explosive ingredient to the fact that there is "billions of dollars sitting on the sidelines waiting to invest in this market" AND also within the same 5 minutes of watching CNBC, I learned we are officially at the bottom.

So, connect the dots, and you will see as I do, that this market is poised to explode with great force into the stratosphere of Dow 9200 or so.

Get on the rocket ship "Challenger" for this historic voyage.

Top 10 Biggest Percentage Dow Gains

2008-10-15T16:57:00.005-05:00

Found this on one of my favorite blogs - www.FinancialArmageddon.com

Michael Panzner is a true visionary, and the book with the same name as his blog is a MUST READ - (written in late 2006, published in March 2007) just make sure to throw on some Depends adult diapers before reading it.

So what is interesting about the dates in the chart?? Anyone?

What a RALLY!!! Woo-HOO! We are saved. Whew.

2008-10-13T21:38:00.003-05:00

KARL MARX APPROVES!

Bankruptcy, not bailout, is the right answer

2008-09-30T13:50:00.001-05:00

By Jeffrey A. Miron
Special to CNN

Editor's note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.

CAMBRIDGE, Massachusetts (CNN) -- Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown.

This bailout was a terrible idea. Here's why.

The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.

This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.

Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets.

The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.

Thoughtful advocates of the bailout might concede this perspective, but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time.

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.

Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.

If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.

The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.

Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.

So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.

The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.

Hey Chris, how ya like them apples?

2008-09-29T21:58:00.003-05:00

Today the Dow dropped a cool 777 points, ending at 10,365.

But I thought when Christopher Cox, SEC Chairman, made it illegal to short stocks, that it was supposed to prevent meltdowns like this?

Whoops.

Don't worry Chris. It'll all be better when The Paulson Plan XXIIV is finally passed. Good Ol' Hank will then begin to buy actual stock of certain companies on behalf of the US Gov't so as to make sure the stock prices of those privileged companies (*cough*GoldmanSachs*cough*) won't decline. Talk about a buy and hold strategy - Buy and Never Sell.

Nancy Pelosi - A National Disgrace

2008-09-27T22:22:00.017-05:00

The facts are this: Nancy Pelosi, our wonderfully incompetent and cowardly Speaker of the House having the power and votes lined up to pass any bailout legislation that she chooses, continues to delay. She could have rammed Paulson's first plan through the House on the same day they received the three-page proposal. She doesn't need those pesky House Republicans votes to ensure passage; she already has the required votes. Those House Republicans cannot do a damn thing to stop her if she chooses.

Once it passes the House, experts agree that it will fly through the Senate into the waiting arms of President Bush, who will instantly sign it.

So why doesn't Mrs. Pelosi pass the legislation that she says, "has to happen."?

So if it "has to happen", why can't Pelosi pull the trigger? Public sentiment, of course, is the reason.

From the various congressional aides that have spoke to the media; the phone calls, faxes and emails are running 99-1 against this bailout plan; and in other surveys taken recently, almost 60% of all respondents are against ANY form of a bailout, no matter the details, updates or "protections to the taxpayer" etc etc.

The volume of public outcry measured in those calls and emails is putting extreme heat on those legislators (especially 5 weeks from an election). But make no mistake, it's a truly organic and grass roots type of feedback that Congress is hearing. Congress knows the difference between a run-of-the-mill fax/email blast campaign orchestrated by some lobby group and the geniune one they are seeing here all last week.

Mrs. Pelosi understands that if she passes this wildly unpopular bailout scheme, with no agreement from a large block of House Republicans, that the legislation will be blamed on her and her Democrats, who hold majority - just 5 weeks out from an election.

Nancy Pelosi is absent of any conscience or duty to the American People - and in the end only cares about keeping her job and her majority, to hell with everyone else.

Ironically, by Pelosi selfishly trying to protect her (political) ass - she is accidentally helping to protect the American Citizen from this $700 BILLION BOONDOGGLE.

KEEP THE LETTERS, FAXES & CALLS COMING IN FOLKS! WE CAN STOP THIS!

"Change We Can Believe In" or "More Of The Same Old Bullshit"?

2008-09-24T23:15:00.007-05:00

You do the math.

9/21/08 Barack Obama, the Democratic Presidential Nominee and self-admitted "Agent Of Change", responded in an interview to this question:

HARWOOD: When you talk to voters, how do you convince them to trust you as a relatively inexperienced person on the national stage, that they can entrust this economy and their savings to you?

OBAMA: Well, a couple of things. I think if you--if you look this week, I was in constant communication with Hank Paulson, Ben Bernanke; my economic advisers which include Paul Volcker, the former Federal Reserve Board chairman; Bob Rubin, former Treasury secretary; Warren Buffet, who I think everybody feels knows the economy pretty well. And I think if you talk to those folks, they would say this guy knows what he's talking about and, most importantly, he knows how to put together a team of people that know what they're talking about and has the ability to bring them together to ask the right questions and find solutions.

9/22/08 President Bush on Monday morning urged legislators to resist the temptation to add provisions that, he said, “would undermine the effectiveness of the plan.”

9/23/08 Key Economic Advisor to Barack Obama, Warren Buffett invests $5 BILLION in Goldman Sachs, one of the only two Wall Street Investment Banks remaining after the financial wreckage of the past year.

9/23/08 Former Goldman Sachs CEO and current Bush appointed Treasury Secretary, Hank Paulson says, It would be 'a grave mistake' for Congress to delay or curtail the $700 billion he requested to buy troubled assets to stabilize the financial system.

9/24/08 Bush appointed Federal Reserve Chairman, Ben Bernanke warns of 'bleak result' if Congress balks.

9/24/08 John McCain and Barack Obama issued a joint statement on Wednesday urging lawmakers to cooperate and reach a U.S. economic bailout agreement to avoid "economic catastrophe". Obama said in a statement he issued on his own that both he and McCain agreed that the bailout must be passed without any other measures attached.

9/24/08 Key Economic Advisor to Barack Obama, Warren Buffett says, Congress should "Act on bailout or face 'Economic Pearl Harbor'.

"Market Confidence"

2008-09-23T11:19:00.005-05:00

Senate Banking Committee Hearing (ON CNBC NOW)

Sen. Schumer: Secretary Paulson, if you don't think you'll actually use the entire $700 Billion, why couldn't we give you $150 billion now, and then come next January, to revisit this and see how much progress you've made.

Paulson: Blah, blah, blah, market confidence, blahbiddy, blahbiddy, blah.

I really hate to disappoint you Dictator Paulson, but giving away billions to your banking buddies certainly won't restore confidence to the market. And, I'd argue that by your actions on NATIONAL TV begging for;

$$$$$$$$$$$$$

S-E-V-E-N

H-U-N-D-R-E-D

B-I-L-L-I-O-N

$$$$$$$$$$$$$

...proves my point. Take your market confidence, and shove it up your ass along with the 500 million that you took when you cashed out of Goldman Sachs virtually tax free because of your relationship with George W. Bush.

Karl Denninger's Letter to Congress (written yesterday)

2008-09-22T09:39:00.004-05:00

September 21, 2008
The Honorable Senator XXXXXXXXXX

The Honorable Senator XXXXXXXXXX
I write to you this evening on a matter of the utmost importance – the meeting you had with Mr. Paulson and Bernanke regarding the health of our financial system.

I am absolutely certain you are being critically misled in terms of this crisis, and the actions being taken to allegedly “stabilize” it. Further, it is a fact that the record speaks for itself.

I am compelled to quote Einstein:
“Insanity: Doing the same thing over and over again and expecting different results.”
This came from a man who without question was more intelligent than any us.
We would be wise to heed his words.

First, last August, we had two hedge funds run by Bear Stearns that blew up. The solution to this was “more liquidity”, injected by The Fed.

Next, Bear Stearns itself blew up. We once again saw not only more liquidity injected, but in addition, The Fed effectively purchased the bad assets of the company to the tune of $29 billion dollars and put it in their quasi-legal LLC “Maiden Lane”.

Not to be outdone, Fannie and Freddie blew up. The “solution” to this was to once again buy up the bad assets, this time wholesale by placing the companies in conservatorship, and allocating $300 billion dollars of taxpayer money to “solve the problem.”

Of course it didn’t solve the problem, and we were then treated to both Lehman Brothers and AIG which blew up in a one-two staccato burst last weekend. While Lehman was “technically” allowed to explode, in truth there appears to be some “back door” liquidity out of the NY Fed that remains, as near as I can determine, unaccounted for. In the case of AIG, the “taking of bad assets” was explicit,
in the form of an $80 billion credit facility (a significant part of which was immediately drawn down) along with the forcible issuance of warrants representing 79.9% ownership interest – again, the taking of ownership interest.

Now we have Hank Paulson and Ben Bernanke at your door once again, this time with a stunning $700 billion+ proposal to literally purchase all sorts of dicey assets from various financial institutions, along with a separate $50 billion guarantee for money market funds – yet more liquidity and effective asset purchases.

The important fact, Senator, is that none of these previous “fixes” in fact worked to fix a thing, and each successive “rescue” is getting more expensive, while each successive “flare up” of the crisis becomes more severe.

The cause of these problems has not been addressed, nor are you hearing plans to address it in the latest proposal. Let me briefly chronicle the various regulatory restraint removals and market manipulations of the last year, all of which we, and you, were told would solve the problems in our financial system and return us to orderly markets:

· Administrative removal of Rule 23A restrictions from certain “favored” banks (Spring 2007)
· The (Selectively Leaked) Shock and Awe Discount Rate Cut on Options Expiration
(August 2007)
· The Bank Super SIV (October 2007)
· The Fed Term Auction Facility (December 2007)
· Bear Stearns/JP Morgan bailout and subsidy (March 2008)
· 325 basis points of rate cuts in less than six months and unprecedented additions of liquidity to defend them (Fall 2007 – Spring 2008)
· Primary Dealer Credit Facility (March 2008)
· Reverse MBS Swaps (April 2008)
· Fannie Mae/Freddie Mac nationalization (September 2008)
· Equity investment and collateral (September 2008)
· Administrative Repeal of 23A (September 2008)
· AIG nationalization (September 2008)
· Expansion of the Fed Balance Sheet through unprecedented Treasury refinance without
appropriation by Congress (September 2008)
· Central bank dollar liquidity draws (September 2008)
· Ban on short-selling 799 financial stocks (September 2008)
· The Mother-of-all-Bailouts/Taxpayer-funded Super SIV Redux (pending)

You cannot fix a sucking chest wound with a band-aid, nor can you cure an alcoholic by giving him a bottle of whiskey. If you provide the drunk with some booze as soon as he sobers up his hand is out – demanding another bottle. Mr. Bernanke and Mr. Paulson have not only squandered the opportunity for meaningful reform they have loosened regulations on the banking system further as the crisis has deepened! Their response to the drunk’s bleating hasn’t been akin to a bottle of whiskey – it has instead been a couple of dozen cases of booze!

NOW you are being asked to trust the entirety of the taxpayer balance sheet to these same men who have failed in every intervention in this crisis to date, and they demand this right to once again saunter into the breach, this time without oversight, without recourse, and without limit upon their authority.

I would like to remind you that in the “white paper” I sent to all of your offices on July 22nd, I outlined the raw misunderstandings and “wrong calls” that Mr. Bernanke and Mr. Paulson have made to you and to the American Public in general. In the interests of space, I will not repeat each of those falsehoods, whether by lack of understanding or intentional deception, on this page.

It is clear that “more of the same” will not solve the problem – and I believe, gentlemen, that we get only one more chance at this before there is a financial meltdown of epic proportions.

Should you undertake what Secretary Paulson and Chairman Bernanke have asked for, I firmly believe you will be responsible for precipitating the meltdown outright.

Let me be clear: if you enact this bill your legacy, written in history, will be that you caused the second Great Depression along with the institutionalized theft of at least $700 billion dollars from the taxpayers of this nation.

As I’m certain you are aware our government requires $2 billion a day in foreign purchase of Treasuries. The latest TIC data, released on September 16th, documents a precipitous decline in the purchase of those Treasuries by foreign interests, and an outright divestiture of agencies.ii This trend, if it continues or worse, accelerates, will force much higher borrowing costs upon the Treasury and
effectively foreclose further Congressional, Treasury or Federal Reserve intervention.

The root cause of this dislocation in the economy has been three-fold:

1. The SEC, OTS, OCC and OFHEO permitted firms to “lever up” at close to unlimited
degree. Fannie and Freddie were operating with an 80:1 leverage ratio on their entire book of business, while in 2004 The SEC removed the 12:1 leverage limit that formerly applied to broker/dealers.iii Five of the seven firms covered by these two examples have collapsed due to excessive leverage.

2. Permitting firms, including both investment and commercial banks, to hold assets in “Level 3” buckets where there is no disclosure of exactly what those assets are or how their declared values are determined. Many have called this “mark to make-believe”; I call it by its more common name - fraud. As a consequence it has become impossible to determine whether any particular financial institution is in fact solvent, and if so, what its true value is.

3. Unregulated, over-the-counter derivatives. There are scary numbers floated out there (in the hundreds of trillions of dollars or more) of “notional value” outstanding. The problem with these numbers is that they don’t represent actual amount-at-risk, and in fact nobody seems to know what that figure actually is. The lack of a regulated exchange and central clearing means that there is no margin supervision of any sort; ergo, you have no way to know if your contract is in fact good (that is, the other guy has the money.) AIG, as an example, had
$500 billion dollars of exposure outstanding in these contracts, and while this sounds somewhat reasonable when one considers they have a $1 trillion dollar balance sheet in fact it is not because most of AIG’s balance sheet assets are committed to cover liabilities (e.g. insurance policies, annuities and the like.) The lack of margin and regulatory supervision is directly responsible for this. These derivatives have become nothing more than a fancy game of “pick pocket”, where Broker “A” sells protection to Client “A” for $X, and then tries to find someone to buy that same protection from for “$X – something.” While speculation in the marketplace is fine, speculation without being able to prove capital adequacy to back up your bets is not.

When you take these three things together you have a financial system where there is no confidence – not even overnight. This in turn leads people to be unwilling to lend, and that is the root of the problem.

All of the other ills – loose or non-existent lending standards, outright fraud in mortgage origination and extreme levels of excess liquidity in the system – flow from the above three sins.

You can throw all the money you want at this problem but that won’t solve a thing; there is in fact too much money in the system but nobody knows who they can trust, and thus it will not circulate normally. Effectively, the only money circulating today is that provided by The Federal Reserve, as the lack of trust throughout the market has seized the credit system. In addition these “sneak attacks” on the markets, such as “surprise” rate cuts, “surprise” bans on short sales and other
similar blatant market manipulations have resulted in people departing the market entirely, as they have no way to figure out what the rules will be tomorrow, and thus no ability to invest and trade based on their analysis of market conditions.

In order to actually solve the problem we must address all three points above.

What Ben Bernanke and Hank Paulson are recommending you do is pure folly and in fact dangerous. After over a dozen separate failed attempts to fix the problem by doing the “same thing”, is it not time to declare the proponents of a sixteenth attempt insane and travel a different path?

You can address the root cause of the market’s panic through the following actions, all of which can be taken today, and all of which, combined, will restore confidence and allow the market to clear and return to normal function:

1. Broker-dealer, insurance company and bank leverage ratios must be reduced to no more than 12:1. A change in the law to require this, with a 180 day requirement for compliance on a declining basis (e.g. from your current leverage ratio to no more than 12:1 within 180 days with “checkpoints” monthly) must be implemented immediately. In addition ongoing regulatory supervision must require that any institution that is within 10% of leverage limits must report monthly to their primary regulator, and that report must be published. This will eliminate excessive leverage in the system over the next six months and restore confidence
that firms are not excessively geared.

2. “Level 3” must either be barred or all firms utilizing such a “bucket” for assets must disclose, to the individual CUSIP level (or equivalent) each instrument in that bucket and the full formulaic method, variables and assumptions that resulted in the derivation of its claimed value. This data must be included in each 10Q and 10K filing by these entities. This will immediately expose the “reasonableness” or lack thereof that pertains to these “marks” and remove the uncertainty – and lack of confidence – surrounding these valuations. An enormous part of the reason that short-sellers attacked Lehman and Merrill is that they simply did not believe the marks that had been taken were “real”, and with Level 3 assets there was no way for anyone to independently evaluate that belief. A year ago I called for all “Level 3” assets to be barred entirely; we must still eliminate “Level 3”, but doing it all at once, today, is not possible without literally detonating every large bank in America, as they have all taken advantage of this scheme to hide their losses. Therefore the
appropriate action is to force disclosure of all marks, the securities to which they are applied, and the precise computational or observational means by which the mark was derived so market participants can form their own conclusions about the validity of that process on an individual level.

3. All OTC derivatives must be moved to an exchange or repudiated. The easiest way to do this is to mimic the OCC structure used for listed options. In the listed option world your “counterparty” is always the OCC that guarantees clearance of your trades. The OCC, being “on the hook” for the value of your position, is very interested in proper margin supervision with the person on the other side, and any brokers that are in the middle. Even during the 1987 panic option contracts did not “fail” for this reason. Provide through statute that ninety days hence all now-OTC derivatives must be cleared via such a central (but private) party. Any contract not so placed (by agreement of both parties) at the close of the ninety days is declared worthless due to inability to prove capacity to pay, and therefore, failure of a primary element in any contract – ability to perform. This conclusively and permanently defuses the “derivative time bomb” and its attendant systemic risk.

Once these three steps are in place then and only then should Congress take up the issue of whether or not to create an RTC-like structure. I will note that such an enterprise must be undertaken with the greatest of care; the original estimated cost of the first RTC effort was $20 billion dollars, and yet the final total was somewhere between $140 and $160 billion, depending on who you ask, or anywhere
from seven to eight times the claimed original price tag. Such a structure cannot be undertaken hastily nor is it as simple as it was with the RTC, where the assets in question belonged to alreadyfailed institutions. Buying assets out of operating entities is fraught with extreme levels of risk, especially if competitive market prices are not used. This is especially true for complex securities where accurate valuations are nearly impossible to fix. As a consequence any such action must be
taken fully “in the sunshine” of the public view and not at the exclusive discretion and direction of one man such as the Treasury Secretary.

There has been much hay made about “stabilizing” housing prices. Senator, a material part of the underlying issue in this matter is that house prices remain too high. The definition of affordability, since The Depression, has been a 20% down payment, 36% DTI or “back end” ratio, and a 30 year fixed mortgage. For all but the wealthiest of Americans this corresponds to a house price of approximately three times annual household income. In many areas of the nation, particularly
California and Florida, median home prices today are still 30-40% above median income levels by this classic measure of affordability. We should be encouraging home prices to return to affordable levels, not taking actions that will simply force more Americans into foreclosure and bankruptcy,
turning them into debt slaves. “Easy” credit has not only escalated prices of home, food and energy at a ridiculous rate but has also depressed wages, giving Americans little choice but to finance their lives with ever-increasing debt.

We cannot return lending to normal, nor can we return the banking system to normal until house prices come down to historical norms and the bad debt in the system has been defaulted, with the losses taken by those who made the bad loans. Taking it onto the taxpayer’s balance sheet will not fix the problem as it is the taxpayer who doesn’t have the ability to make the payments. This proposed bill is nothing more than an elaborate asset-stripping scheme for the benefit of a few favored bankers at the expense of other market participants and the taxpayer, and will in fact make the economic and systemic problems worse by further encumbering the Government’s balance sheet.

I will make a bold prediction, and remind you that my prior efforts in this vein, and predictions, have proved accurate – if you pass this bill you will see a market meltdown worse than last week’s in its wake, and you will be (justly) blamed for it.

Finally, to address the comment that was reported to have been made in your meeting by Henry Paulson about some “financial types” wanting the market to collapse, I assure you that while there may be some people who would take great joy in such an event, I am not one of them. As an American living here, not abroad, with my investments and capital deployed here in the United States, should the market collapse I will drown in the vomit along with everyone else.

While I am semi-retired and ran an Internet Company in the 1990s, I lack the wealth necessary to be able to “ride through” such an event without catastrophic losses, and am very concerned about the potential loss of social and political order that such a collapse is likely to bring. I am in addition a single parent of a 12 year old daughter and am concerned for her future. As I write this letter I am,
for all intents and purposes, flat in the markets with essentially all of my investments in either cash or short-term Treasury-linked instruments. I do speculate on a regular basis in the capital markets, but have no particular bias in either direction at present; it is just as easy for me to profit from a rise in a
given market as a fall. I am willing to “open my kimono” to you in order to prove this, including showing you, in real-time, the positions that I currently hold and my total financial base.

My interest here is singular – restoring order in the capital markets and thus to Main Street USA. Like all other Americans, I have suffered greatly from the insane gyrations on Wall Street and the incredible distortions that the game-playing has caused in commodities, especially food and energy.

Only through restoring trust can we actually solve the problem, and none of what Secretary Paulson and Chairman Bernanke propose will accomplish that.

What I have outlined above will solve the problem as it addresses the underlying cause instead of attempting to flood the market with money we do not have. Many commentators have stated that the financial system is having a “heart attack”, and they are correct; the circulatory system is the credit markets, and money can be thought of as blood.

You can pump in all the blood you want, but if you do not convert the heart from ventricular fibrillation to a normal sinus rhythm, the patient still dies.
It is time for us to learn something from Einstein and choose a different path before our markets expire.

I can be reached at any time at XXX-XXX-XXXX and would appreciate discussing this matter with you at your earliest convenience. I am prepared to fly to Washington DC this coming week if required and testify under oath in front of the House, Senate, or both on these matters and elaborate on the material contained herein.

Our Nation’s future is at stake – don’t make a horrific error.

Sincerely,
Karl Denninger

You Must Act Now - THIS IS URGENT!

2008-09-19T16:16:00.013-05:00

The U.S. Government has allowed Treasury Secretary Paulson to hijack The United States of America - without one single bullet being fired. Hank Paulson is now the new dictator of America. George W. Bush might have the title of President of The United States, but the great folks down at FedEx/Kinko's are busily changing his business cards to read:

George W. Bush
Paulson's Bitch (and president)
1600 Pennsylvania Avenue
Washington DC

Speaking of bitches, have you seen Ben Bernanke around lately?! You know why you haven't seen that little punk ass around? BECAUSE HE DOESN'T MATTER ANYMORE. And he's off hiding with Greenspan hoping the mobs don't come after them.

Oh and Pelosi and Reid are just about worthless as hell too. MEMO TO HARRY REID: PELOSI HAS MORE BALLS THAN YOU - YOU ARE A WHINY PATHETIC LITTLE BITCH - F'IN GROW A PAIR. Also, I have an idea - How about you two sons of bitches doing something more in 2008 than holding hearings on nutritional standards for domestic parakeets.

Paulson has usurped Bernanke+Bush+Pelosi+Reid+AmericanPeople+TheConstitution all in one fell swoop. He calls the shots now.

However, possibly our only saving grace is that this super-neat new resolution trust type socialist devil-spawned corporation that Paulson proposes REQUIRES congressional approval before it can be implemented.

If you don't have a clue and want information on how America has been transformed into a SOCIALIST state, you'd do well to check out the blogs to the right. With the most important one being here.

Read Karl Denningers site, watch his videos (which are on YouTube btw).

YOU MUST ACT NOW TO SAVE OUR COUNTRY. YOU MUST CALL YOUR CONGRESSPERSON'S IMMEDIATELY. YOU MUST CALL THE PRESIDENT. YOU MUST WRITE EMAILS TO THE LEADERS OF OUR GOVERNMENT (UNTIL PAULSON REMOVES THEM FROM OFFICE).

Here's where you can get all the contact information for those people.

"If the American people ever allow private banks
to control the issue of their money,
first by inflation and then by deflation,
the banks and corporations that will
grow up around them (around the banks),
will deprive the people of their property
until their children will wake up homeless
on the continent their fathers conquered."
Thomas Jefferson

Florida at the Precipice of Depression - Mike Morgan

2008-06-08T00:06:00.008-05:00

I was going to call this “Banks March Us Into Depression,” or maybe more fitting is . . . “Complete Collapse of US Banking System.” Folks, that is what we are looking at. I don’t see any way around it. What we’re seeing here in Florida, is your crystal ball. And what happens here, is coming to a town near you . . . soon. - Mike Morgan, J.D. Morgan Florida Real Estate

To read the rest.

Permabear Peter Schiff's Worst-Case Scenario

2008-06-03T22:13:00.004-05:00

By Kirk Shinkle
U.S. News & World Report
May 30, 2008

Economic punditry tends to fall broadly into glass-half-full or half-empty categories. Then there are those who see a cracked glass, teetering on the edge of a table just moments from a shattering fall. Enter Peter Schiff, the permabear president of brokerage Euro Pacific Capital and coauthor of last year's Crash Proof: How to Profit From the Coming Economic Collapse. Schiff spent the past decade urging brokerage clients to jump ship from the American economy ahead of what he views as inevitable pain caused by a toxic cocktail of lax monetary policy, wayward spending, and tougher competition from all corners of the globe.

Say something positive about the U.S. economy.
There's nothing good to say about our situation. The policies both the Fed and government are pursuing are making the situation worse. We've been getting a free ride on the global gravy train. Other countries are starting to reclaim their resources and goods, so as Americans are priced out of various markets, the rest of the world is going to enjoy the consumption of goods Americans had previously purchased. This is a natural consequence of this phony economy. If America had maintained a viable economy and continued to produce goods instead of merely consuming them, and if we had saved money instead of borrowing, our standard of living could rise with everybody else's. Instead, we gutted our manufacturing, let our infrastructure decay, and encouraged our citizens to borrow with reckless abandon.

So what are you doing about it?
I'm getting my clients' money outside of the United States as fast as they can send it to me. I've been recommending that to my clients for close to 10 years. You've got to own resources and energy. I was saying oil was going to $200/barrel in 2002. I've been buying gold, silver, industrial metals, and all kinds of stocks. My main theme is the global economy will survive and the U.S. economy is a disaster. Everything is about how you benefit from the increased purchasing power and rising standard of living in the rest of the world.

OK, where are the best non-U.S. markets this year?
I still like Singapore, Hong Kong. Asian markets are the place to be. I like resource markets like Scandinavia. I'm spreading my chips around the world. I'm just avoiding the United States.

What are your best or worst calls through this downturn?
I've been bearish on bonds. U.S. bonds have lost a lot of real value but not nominal value. I still think that's going to be proven to be correct. While the housing bubble was inflating, I was telling people to rent. I was telling people to get out of tech stocks in 1998 and 1999. They kept rising, but then they collapsed, and I turned out to be right. The reality is I don't think I've been wrong on anything.

Most people disagree with that sort of pessimism.

If you're staying in the United States, how do you invest?
If you want to be in U.S markets, you avoid anything connected with the American economy. You avoid retailers, the home builders, the financials—anything having to do with consumers buying something or paying back the money they borrowed. If you want to invest in U.S. markets, stick with exporters and resource companies. I've been saying that for five or six years; I haven't gotten anything wrong. We shorted subprime mortgages. I have clients that made 10 times their money. We've never sold an oil stock. We've never sold a gold stock.

Why don't you think soaring oil, grains, or commodities prices are the next bubble?
These prices do not constitute bubbles. They simply constitute the repricing of goods to reflect the diminished value of our money. The way you can tell there's not a bubble is that these markets are clearing. People are buying food and eating it. They're buying gasoline and using it. Speculators aren't buying gasoline and warehousing it in big facilities because they think the price is going to go up. At the same time, we've increased the supply of money dramatically, and the Fed is increasing it even faster now to deal with the bursting of the housing bubble. The only thing that can happen is for prices of commodities to rise to reflect the equilibrium of a greater supply of money. It's not even that oil prices are going up. Oil prices are staying the same. What's happening is the value of money is diminishing, so we need more units of currency to buy the same amount of oil or wheat or corn or whatever.

How about some predictions?
I think the stock market is headed lower. Gold is going to be $1,200 to $1,500 by the end of the year. That puts the Dow at a less-than-10-to-1 price ratio to gold. Right now, it's about 13 to 1. That's another 30 percent drop in the real value of stocks by the end of the year if you price them in gold. The Dow was worth 43 ounces of gold in 2000. It'll get to 10 by the end of the year and continue to fall from there.

Oil prices had a pretty big run and might not make more headway by the end of the year. But we could see $150 to $200 next year. I don't think oil will hit $250 because there will be enough destruction of demand in the United States to keep it from doubling. The big problem for us is if the Chinese substantially allow their currency to rise. It could increase at least fivefold against the dollar over the span of a year or two. That reduces the price of oil by 80 percent for 1.3 billion Chinese. Consumption would go through the roof, and that will drive prices through the roof for us.

At a minimum, the dollar will lose another 40 to 50 percent of its value. I'm confident that by next year we'll see more aggressive movements to abandon the dollar by the [Persian] Gulf region and by the Asian bloc. That's where the stuff really hits the fan.

You're a Ron Paul adviser. He's out of contention, so who wins the election, and what happens then?
The Obama presidency will be like the Jimmy Carter presidency on steroids. I'm pretty sure it's Obama because the economy will be so bad into the election that as damaged a candidate as the guy is, I don't think a Republican could beat him. I think Ron Paul could've had a slim chance because he was different enough.

So how bad do you think this economy will get?
The other problem we'll have during those years is civil [unrest]. There will be a big increase in crime. People are going to be hungry. People are going to be cold. There's a sense of entitlement in this country, and when a lot of people used to having things suddenly don't, everybody looks for someone to blame.

Really?

We're going through a very rough period in our history. In many ways, it's going to be worse than the Depression.

Mr. Mortgage Lehman Update

2008-04-06T18:15:00.001-05:00

Banks Fail to Lower Mortgage Rates as Bernanke Cuts Money Costs

2008-03-27T08:48:00.003-05:00

Lenders aren't helping the central bank even after they've been given seven interest rate cuts and a new program designed to jumpstart borrowing. Banks are defying Bernanke and hoarding cash after writing down the value of more than $200 billion of mortgage-related securities since July.

Yep, clearly market confidence is being restored.

Fed's Magic Mirror

2008-03-25T21:45:00.004-05:00

Carl Mortished
From The Times
March 26, 2008

Seen in the Fed's magic mirror, Bear Stearns appears to be worth it.
“Yo! Ben Bernanke! Give us a million dollars. I promise to pay it back as soon as I cut a deal. You want collateral? I'll give you collateral.

“I got a house — the realtor says he can sell it tomorrow for half a million. A condo in Florida, two cars, a boat and a stock portfolio — that must be worth a hundred grand.

“Whaddya mean, what's it all worth? Don't worry, Mr Bernanke, I'm not going bust. I just need some cash to tide me over until these deals come good. It's a little cashflow problem. What do you call it? Liquid-something. No, not liquidation. I mean liquidity. Like that friend of yours on Wall Street... what's his name? Barry Stearns?”

It is indeed astonishing what the support of the Federal Reserve Bank can do for your business if your name is Bear Stearns. Only a week ago the once-proud and stern Bear was whimpering like a teddy, sold for $2 per share to JPMorgan, a $300 million fire sale hailed as a lifeline. Threadbare, its stuffing of mortgage-backed securities spilling on the street, Bear Stearns was said to be as good as bust, fit only for dismemberment by the brigade of gleeful boys in buttoned-down shirts at JPMorgan.

Except this week it is worth $1.4 billion or $10 per share and it's all because of Mr Bernanke and his magic money guarantee.

The Federal Reserve did an extraordinary thing — it guaranteed the value of $30 billion of assets held by Bear Stearns. All over America, people are losing their businesses and their homes because lenders no longer believe that their assets are worth what they say they are worth.

But last week the Government of the United States of America said, if Bear Stearns believed its assets were worth $30 billion, that was good enough and the Federal Reserve would stand by it. The Fed had underpinned the house of Bear, it would no longer sink and that made possible JPMorgan's initial $2-per-share grab.

Unsurprisingly, Bear Stearn's shareholders suddenly gained confidence. They could smell the money. The difference between bankruptcy and solvency is nothing more than confidence in value and the allowance of time for that value to crystallise into cash. Confidence that bricks and mortar or stocks and bonds or even a contract can become cash is what some people call liquidity and it is what underpins solvency.

The Fed's action gave Bear Stearns what every cashflow-challenged businessman wants — a guarantee of value and a week's grace. Of course, the guarantee was not really a lifeline because Mr Morgan doesn't care two figs for Mr Bear or Mr Stearns. Mr Morgan wants to expand his house into his neighbour's plot.

More importantly, he wants to make sure that there is no embarrassment at the Bear Stearns home that might bring down property values in the Wall Street neighbourhood. No bailiffs please, no car repossessions at 2am, no foreclosures and tacky garage sales.

Central bankers have a fancy name for embarrassment. They call it systemic risk — a sudden, panicky fear that everyone's home is worth as little as the Bear Stearns home. But Mr Bernanke's wand has worked its magic. Suddenly, the house of Bear and Stearns is on solid ground. There is no systemic risk. Stock prices are rising and the stampede of frightened investors towards the safety of gold and oil appears to have slowed.

This is illusion. Nothing has really changed except that, like every good magician, the Chairman of the Federal Reserve held up a mirror that showed an alternative reality. Bear Stearns and every other Wall Street bank are still holding the rubbish assets they owned a week ago and American families are still swimming hard in the deep end, trying to keep their heads above the water line of illiquidity.

Let us be real about liquidity. It is not some technical term — it is the essence of a business, it is the ability to generate cash from what you do. If your business depends on a million-dollar contract with a customer who is deemed unreliable, is your turnover really a million dollars? If a bank refuses you an overdraft to fund that business, are you just illiquid? At what point do you become insolvent?

What lies beneath the Wall Street towers rarely bothers bankers as long as the surface glitz is untarnished. A clutch of Bear Stearns investors will continue to scream injustice — if $2 can become $10 in the space of a week, surely by the end of three months the bank that was bust will be worth billions more.

Outside, in the not very real world of American consumer finance, perceptions of reality may also change. There has been a slight pick-up in home sales in America — normal as a real estate downturn shifts from deadlock to sell-off mode.

Dubious lenders that had shut up shop will see the distorting mirror, not the reality, and will begin to scout for new victims in the belief that any transaction can be turned into a commission and a cash margin. Some talk of moral hazard in the Fed's underwriting of the Bear Stearns takeover, but we should not imagine that the Ivy League team at Bear will carry on with their country club memberships intact. Many will lose their jobs, punishment for the financial crime of pretending that risk was a statistic that could be manipulated. There was talk of 20,000 job losses on Wall Street even before the Bear stumbled.

The bigger question is whether this loss of liquidity, the massive sucking of cash out of the wallets of Americans is part of something bigger — a loss of confidence in the ability of Americans to maintain the lifestyle to which they have become accustomed.

The liquidity has been flying east and south for many years, chasing profits in huge industrial and energy projects in emerging markets. It will continue to do so, seeking better returns, more promising prospects than funding the lifestyle of the underskilled, the tired and the underperforming.

Restoring Market Confidence Is E-A-S-Y!

2008-03-21T21:02:00.008-05:00

So now the next plan to avoid certain financial armageddon is for the world's biggest central banks to open up their gold vaults Errrr, I mean turn on the lexmarks, and to buy massive amounts of mortgage-backed securities (MBS) so as to "shore up the market in a key financial instrument and restore confidence by ending the current vicious circle of forced sales, falling prices and weakening balance sheets."

This seems like a perfectly reasonable plan if you think about it. Okay, no it doesn't.

We are supposed to believe that The U.S. Government's true intention is to help out the poor homeowners who can't pay their mortgage payments because they were duped by vicious and malicious mortgage brokers and lenders...that these homeowners are somehow the truest of victims and without government help they will become homeless? That Ben Bernanke & Bank of England Governor Mervyn King care so much about the peeps, that they are willing to buy up 100's of billions (maybe a cool Tril) of mortgage securities and the underlying collateral?

Let me tell you something, El Capitan, THIS IS BULLSHIT! Plain and simple.

The obvious reason for this plan is so that ABC Investment Bank and XYZ Hedge Fund (and the hundreds of other similar worldwide firms) won't have to mark-to-market their toxic mortgage backed excrement-sandwich portfolios. This brilliant ostrich-philosophy will keep those companies from becoming "officially" bankrupt, so long as they don't properly give value to the MBS holdings that they are carrying on some Enronesque shell company HQ'd out of the Cayman Islands.

The leverage these firms employed on the ride up booked amazing gains. That same leverage threatens to destroy each and every firm who gambled in these.

And memo to Ben Bernanke et al, do you think the Florida Pension Fund wants to touch these investment products ever again? What about foreign municipalities in Norway? What about the banks who are desperately trying to offload their MBS holdings? I'd say, the cat is out of the bag on the quality of this investment.

This bailout of Big Banks will not restore any amount of confidence into the market. I'd argue that it will only prolong the misery.

George Fox a.k.a. Client #9 a.k.a. Eliot Spitzer

2008-03-11T10:32:00.003-05:00

Over/Under on Eliot's junk still being attached to his person = 1 week

The Super Tuesday 100 Yard Dash.

2008-02-05T21:09:00.000-06:00

Super Tuesday was important to watch because of the obvious ramifications for the future of our country. Twenty four states went to the polls to decide who might become the nominee for each of the two completely identical political parties.

The drama unfolding between The Crying Game Liberal (double-pun intended) vs. The 1981 Cocaine Salesman of the Year Liberal for the Democratic nomination was riveting to watch until my laser-beam-like focused attention was snared by that Nun on that Channel reading a poem.

Likewise, the heated Republican contest between Republican-In-Name-Only "Proud Reagan Pen Owner" Economic Moron Liberal vs. That wealthy NorEastern Governor Liberal who happens to be "The True Reagan Conservative" vs. Rush Limbaugh's favorite: God's Warrior aka The Snake-oil Selling, Guitar Picking, Cross Levitating, "True Reagan Conservative"...and by True Reagan Conservative here, I really mean "True Jimmy Carter Liberal". It has been fascinating on many levels.

But just like a lot of folk enjoy watching the Super Bowl commercials more than the actual Super Bowl game; it's the same for me during Super Tuesday in watching the 100 yard dash of political coverage.

The race to project the winner of a particular state before that other rival alphabet news organization does, is apparently, of great importance.

Is there an actual prize one gets when they project out a winner before the others?! Is it some sort of prestigious claim for CNN to call a winner of a state with say less than 10% reporting? How about NBC calling it for a candidate with only 5% or even 1% reporting? I Raise. Hows about less than 1%? Bwahahahahaha! That couldn't even happen, right?

Yeah it could. Tonight while watching Fox News that's exactly what happened. Fox News called the New York Republican Race for John McCain with less than 1% reporting. Vote tally was at 750; I'll write it out like a check for clarity. (Seven hundred and fifty votes) Not 750,000 votes, not even 7,500 votes.

To give you a greater perspective... Just about the number of kooks being released from New York State mental wards in a given day, seven hundred and fifty.

Wowser.

Are we headed for an epic bear market? - Jon Markman 9/20/07

2008-01-26T23:50:00.001-06:00

I started by asking the Calcutta-born Australian whether the credit crisis was in what Americans would call the "third inning." This was pretty amusing, it seemed, judging from the laughter. So I tried again. "Second inning?" More laughter. "First?"

I read this MSN Money article several months ago, and I think it's fitting to re-post the article for all to enjoy.

You Gotta Check This Out.

2007-09-14T11:48:00.001-05:00

Very funny.

Game of Shadows

2007-08-20T22:32:00.000-05:00

Barry Bonds broke the all-time Major League career homerun record to jubilant pandemonium at his home track, ~~Pacific Bell Park~~, I mean ~~SBC Park~~, I mean ~~AT&T Park~~, I mean Maurie's Wig's Park on August 7, 2007.

Had Barry not sat out untold times throughout this season to "rest his legs" (or maybe the more accurate summary: to guarantee that his record* would not get overshadowed by empty syringes and supersized cardboard Barry Heads being thrown at him from hostile fans on national t.v.), he might have broken the record several weeks before. Oh, let's just throw a random date out there...perhaps July 19, 2007 at Wrigley Field versus the Cubs.

Had it been this day, both Barry & the Dow Jones Industrial Average would have had to share the limelight as the Dow broke its all-time record by closing above 14,000 to jubilant pandemonium by the usual CNBC Cheerleaders, including Mad Money's Jim Cramer who continued to prophesize "15000 By Year End".

Today we know that bookies across Cramerica would be willing to take that bet. That is, if he were able to borrow money from Action Alerts Plus (his charitable trust ya know).

The Market, like Barry, has been inflated and pumped-up by financial steroids. Those securitized mortgage-backed debt bundles were given the green light for credit worthiness (wink-wink, nod-nod) from all the major credit rating agencies. This allowed banks and hedge funds to then borrow against the underlying value many times over to buy ever more securitized debt. Which in turn, created more money that needed to be invested in more and more profitable debt deals. Wall Street was awash in cash, and it fueled the M&A mania, private equity and hedge fund deals that sent the market ever higher and higher.

It was even rumored that Pet's.com was using an old warehouse as collateral to get back in the game.

Small problem. These ratings companies and the models they used to value debt did not ever account for the real-estate market plummeting. Or they did factor it in, and they chose to ignore the perils hoping for Greenspan's young-grasshopper to once again save their asses.

Forget Helicopter, "Doctor Jekyll Ben" who was on one day worried about inflation and not worried at all about sub-prime contagion, the very next day lowered the discount rate, which is likely a precursor to a future Fed Funds Rate decrease.

Only time will tell what will happen to this crazy market. But Barry's got one thing on the Dow; his record can never go back down.

I'm Tired, Tired, Tired of the Perma-Bulls Whining

2007-08-15T16:09:00.000-05:00

Larry Kudlow especially. This jack-hole is crying on national television about how the Fed should be lowering rates, buying bundles of mortgage-backed debt and generally rescuing all of the Billionaire Boys, STAT!

What happened to good ole-fashioned responsibility?

re·spon·si·bil·i·ty
–noun, plural -ties.
1.the state or fact of being responsible.
2.an instance of being responsible: The responsibility for this mess is yours!
3.a particular burden of obligation upon one who is responsible: the responsibilities of authority.
4.a person or thing for which one is responsible: A child is a responsibility to its parents.
5.reliability or dependability, esp. in meeting debts or payments. —Idiom
6.on one's own responsibility, on one's own initiative or authority: He changed the order on his own responsibility.

These market geniuses took other people's money, added a healthy helping of leverage and baked enormous gains over the course of many years. Everything was honky-dory as long as the market remained in rocket trajectory. But eventually, that rocket "corrects".

Uh, Wall Street...We have a problem.

Memo to Wall Street Billionaires: TAKE YOUR MEDICINE AND STOP WHINING.

I'm tired of hearing that "There are no bids" for your junk. That's complete bovine-dung. There are bids out there, you just don't like the idea of taking 50% or stronger haircuts. Yes, it is going to be painful. Extremely painful probably. But that's Capitalism.

Parents Just Don't Understand

2007-08-14T22:30:00.000-05:00

"Naaa, you don't really need your money right now. We'll just hang on to it so that you don't do something irrational that we errr! you might regret. We promise, this is going to hurt us a lot more than it will hurt you."

Apparently the newest trend in money management, is for firms to halt redemption requests. The latest copycat of this market confidence-building tactic is Sentinel Management Group, who today told its investors in hard to understand financese, Quote Don't let the door hit ya, where the good Lord split ya. End quote.

What's particularly puzzling for Sentinel is that it oversees money-market funds. Ooops. Old-timers across America will be scramblin' to exit those "Safe & Liquid" investment vehicles.

Other notable funds that have been saying no-no to redemptions lately are: Bear Stearns (3) (but don't worry Fitch has given the all-clear regarding BSC.), United Capital (4), Germany's BHF-Bank(1), Germany's Union Investment (1), France's BNP Paribas (3).

I know it looks strangely like I have just given you the latest scores to European Soccer matches, but I assure you, these funds and the companies behind them are deucing doo-doo bricks about right now.

But just remember that the true culprit of this current market mayhem is "Speculators Exploiting Market Fears." - Ben Stein

Nicely played sir.

My Inaugural Post

2007-08-13T18:59:00.000-05:00

This my first post (and blog name) is dedicated solely to those wild and crazy "flippers" out there who at this moment are stuck with at least one but usually numerous unsold homes that your bank(s) will end up short selling for 50 cents on the dollar (if they are lucky).

In honor of your past career, I'd like to point you to the next logical choice to pay those bankruptcy attorneys.

Burger Patty = $1.00
Sides = $.50
Fries = $.50
Cola = $1.00

Burger supplies bought for: $3.00 ...
Budget for styrofoam cup, charcoal & lighter fluid: $.50 ...
Total costs: $3.50

Selling burger combo for $4.75

POTENTIAL PROFIT: $1.25!