FedUpUSA

Archive for May 20th, 2010

Guest Post: Who Will Your Senator Stand With Now?

By Dylan Ratigan

At this very instant, many of those in our Senate are in danger of being led off the plank by outgoing Chairman of the Senate Banking Committee Chris Dodd. With cloture passing, Senator Dodd now has one final chance to present a manager’s amendment to make a weak bill stronger (or possibly even weaker.)

Once again, this financial “reform” process has thankfully brought into the light of day that we have politicians who are brazen in their willingness to aid the same fraudsters who have brought a great nation to its knees. But as this week’s primaries have clearly shown, there is no hesitation by the voters in throwing out the Establishment that got us into this mess and apparently has no plans to help us get out.

Thankfully, once forced to vote, politicians can no longer merely pretend to working for the People as they do the bidding of the Banksters. So once you look beyond all of the well-documented behind-the-scenes work by Dodd to weaken financial reform, we also have his on-the-record votes on a few of the meaningful attempts at real reform:

• No on the Kaufman-Brown SAFE act to actually stop Too Big To Fail with actual laws.

• No on the Franken Amendment to finally end the horrendous scam that is the current credit ratings system.

• No on the Vitter Audit the Fed Amendment that would give true transparency to a shadowy organization that has helped destroy our economy.

And just so you don’t think he can’t say yes to anything…

• Yes on the Carper Amendment to actively prevent state Attorney Generals from fighting for YOUR rights, because apparently the one lesson Senator Dodd learned from this mess is that our country will be much better off if he can just keep the next Eliot Spitzer from protecting citizens.

Now is the time to contact Senator Dodd and let him and his staff know that you demand real financial reform. Though Senator is leaving office voluntarily, chances are that your Senator would like to stay. So if you are so inclined, ask them to exert their influence on the Chairman as well.

Ask them if they stand with Chris Dodd, who vacates his office with our nation in tatters largely due to the same banking system run amok that has plied him with campaign dollars, in danger of leaving this as his legacy:

• A weak reform bill that even in his own words he admits will not “keep the next crisis from coming.”

• A Sweetheart Mortgage Deal from notorious Countrywide CEO Angelo Mozilo

• Staffers who bought stock in the very banks they were secretly rescuing during the collapse.

• A revolving door of Wall Streeters working on his staff, as well as staffers leaving his office to go work on Wall Steet.

Chris Dodd can still do what is right and give our country real reform. But since he is leaving the Senate for what is sure to be greener pastures, there is very little incentive for him to work for the People other than in the hopes of saving his legacy. However, we have a right to be represented in our Government and this is the time for your representative to hear the will of the People.

From Mike Krieger of KAM LP

A Time to Speak Out

Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won’t come again
And don’t speak too soon
For the wheel’s still in spin
And there’s no tellin’ who
That it’s namin’.
For the loser now
Will be later to win
For the times they are a-changin’.

- Bob Dylan

Carl Quintanilla:  Futures were down 30 now down 175.
Joe Kernan: These pictures (Greece) aren’t helping.
 
- This morning on CNBC

The technetronic era involves the gradual appearance of a more controlled society. Such a society would be dominated by an elite, unrestrained by traditional values. Soon it will be possible to assert almost continuous surveillance over every citizen and maintain up-to-date complete files containing even the most personal information about the citizen. These files will be subject to instantaneous retrieval by the authorities.

Zbigniew Brzezinski in his book Between Two Ages: America’s Role in the Technetronic Era

I wasn’t going to write this week so this will be extremely brief.  The entire charade that has been propagated on humanity is coming completely unglued and there is absolutely no stopping it.  I have only one request to those that are reading this.  If you know of specific incidences of corruption or serious wrong-doing come forth and tell everyone now.  This is your last chance.  When this things breaks the 99% of people on this planet that have been unwilling victims of a very small group of elitist political and corporate players and others will be so completely destroyed they are going to go after people and in a very serious way.  This must be done calmly and without violence but it must be done and it will be done.  At that point the backstabbing and selling out by people that previously held alliances with one another will be so chaotic it is going to be tough to separate those did the most harm from those that were willfully ignorant.  I fear that being willfully ignorant will not be a defense that will appease many so it is best to come out before that point is reached.  For those that have read A Tale of Two Cities or just generally know your history remember what happened in the aftermath of the French Revolution.  There was illogic and indiscriminate punishment applied in many cases.  I hope this never happens and I will fight to prevent it all the way but the best thing one can do now is come clean if there is anything you need to come clean about.  Bob Dylan said it best in the quote at the top.  This is the chance.  Do not let it pass you by because of fear or greed.  Truth is all that matters.
 
Turn the Television Off

I barely watch any television anymore.  It has been this way for several years now and it is the best thing I have ever done in my life.  I turn it on to CNBC when I wake up for 15 minutes or so and then I watch reruns of “The Office” before I go to sleep.  That said, the 15 minutes I get from CNBC in the morning is invaluable.  It reinforces why I don’t watch tv and it also reminds me why many investors are so lost.  As the futures plunged this morning Joe Kernan stated “ These pictures aren’t helping.”  Helping what exactly?  Helping an agenda.  An economic philosophy that unfortunately dominates our current financial system.  A system that is NOT free market in many crucial ways, but rather is top down autocratic system run by Central Bankers (you have to read this http://www.marketskeptics.com/2010/05/federal-reserve-has-been-abusing.html).  That profession needs to go or be changed entirely back to its root functions.   Later in the news segment one of the guests begged the CNBC anchors to take the pictures off the screen.  They don’t play well in Disneyland.  Television can be great for certain purposes but do not for a minute think you are getting the news of the day.  You see what you are permitted to see.  Mainstream journalism is dead.   
      
The Latest Martin Armstrong Piece

I also wanted to implore everyone to read the latest piece by political prisoner Martin Armstrong.  Here is the link.  http://www.martinarmstrong.org/files/Closing-at-10520-32-Down-3-2-5-14-10.pdf
If we don’t stand up now then the world envisioned by Zbigniew Brzezinski may come to pass.  It will be a technocratic neo-feudalism.  Your children and grandchildren are going to ask what you did during this time.  How you stood up.  What side were you on.  We can’t let this chance slip away.

Mike

The Roof Is On Fire

Posted by Karl Denninger

The Euro Zone is in serious trouble, and Britain and we are next.

The game’s up folks.

Many people talk about us “printing” money.  Indeed, there’s a large brokerage that runs advertisements on CNBS with that exact claim, over and over and over.  Ron Paul and Peter Schiff have run this mantra for years.

This chart says something else entirely:

THERE HAS BEEN NO PRINTING GOING ON!

No, what’s been happening is worse. 

Worldwide governments have borrowed and spent huge percentages of their GDP in a puerile attempt to protect a criminal class that has looted the public and bribed the legislature – THE BANKS.

There was always a point where this would fail, but it is flatly impossible for anyone to know exactly where it was beforehand.

But mathematically, there was a point where it would fail.

The gamble that Bernanke, Trichet, Obama, Bush, Paulson, Geithner and everyone else in the world took is that we could do this for a short period of time and that in doing so private demand would pick up and return us to “stability.”

THESE PEOPLE DID NOT STUDY THE ABOVE CHART, AND THEY’RE F^#KING IDIOTS FOR BELIEVING THAT WHICH WAS TRIED IN 2003-2007, WITH A HIGHER DEBT LOAD THAN WE HAD THEN, WOULD WORK NOW WHEN IT FAILED IN 2003.

Failed?

Yes, FAILED.

O’Neill was on Bloomberg the other day.  He was Bush’s Treasury Secretary during part of his first term, until he resigned under pressure from the administration.  Why did he resign in 2002?

BECAUSE HE KNEW THAT WHAT THE BUSH ADMINISTRATION WAS DOING WOULD NOT WORK.

A study he ran in 2002 showed that the United States would be running budget deficits of more than $500 billion going forward, and that to fix it we would have to enact an across-the-board tax increase of more than 60% or radically cut entitlement spending.

We did neither, of course, and Bush pushed through a huge entitlement increase in an attempt to appease Democrats.  It did, but it also created a structural $500 billion budget deficit that we couldn’t get rid of.

The remaining years of the “boom” from 2003-2007 were all fueled by fraud.  Unable to generate positive GDP through organic growth and productivity we instead imported 20 million illegal Mexicans (who our current President refuses to send home and seal the border against, even though Calderon, who wants us to legalize them all, arrests and deports more illegal immigrants a year from Mexico than we catch!) and blew a huge housing bubble, giving anyone with a pulse a loan to buy a house irrespective of their ability to pay.

These weren’t even mortgages – they were virtually all balloon notes that were never intended to be paid, but instead designed and intended to force the “buyer” to come back in 2 or 3 years and refinance, so the banks could skim off yet another set of fees for themselves and steal any equity that the hapless owner had accumulated.  If there was excess “equity” the banks graciously let you have some of it during that refinance to buy a boat (with equity that didn’t really exist, but for which you’d be obligated in the future.)

Three years ago I said we couldn’t get away with the intervention.  Those who have been reading The Ticker since the beginning know that I have written several open letters, have faxed tens of thousands of pages to Congress, and have offered to get in a car or on a plane and come testify – under oath – as to the mathematical certainty of what we face and what we must do.

You also know that nobody wants to hear it and no such invitation has been forthcoming, that I was basically laughed off CNBS and that the “rah rah” crowd all got millions of Americans to pile back into the stock market.

Yeah, ok.

Folks, it’s quite simple.  Accumulation of debt is inflationary.  It pulls forward demand from tomorrow.  Look at house prices from 2003-2007 for your best and finest example – they quadrupled in some areas and doubled in many more.  20%+ “appreciation” annually was common.

But when you take on debt to buy something you’re buying today what you would otherwise consume tomorrow.  This is the Wimpy action: “I will gladly pay you Tuesday for a hamburger today.”

But when Tuesday comes, you’ve already eaten the hamburger, you’re hungry again, and if you pay the hamburger stand owner you now have no money with which to buy another hamburger. 

When debt loads rise to the point that you can no longer buy both today’s hamburger and pay for the one you ate last week the impact is deflationary, because today’s demand, having been pulled forward from yesterday, can no longer be sustained.  Without demand sales collapse and without sales there is no profit – and no employment.

Keynesian economic thought is fundamentally bankrupt, as it requires that treasuries be rebuilt during flush times so you can spend the money during bad times.  Keynesian economics does not include, and never did, borrowing to spend.  That’s a corruption of Keynes beliefs but it is where attempting to apply Keynes economic “theories” to the real world always ends up, as government will always find a place to blow a surplus, thereby guaranteeing there won’t be one to spend when the bad times come.

As such the best we can do is allow business cycle downturns to work themselves out.  Yes, this process will suck.  Yes, people will lose their jobs.  Yes, people will go bankrupt.  But we must never, ever backstop businesses – including banks.  We can (and should) backstop depositors (people) through a self-funded insurance fund (which is what the FDIC is supposed to be, and would be if run correctly) but even there we can’t make people 100% whole, as it drives them to “reach for yield” and thus chase insolvent institutions.  Changing the FDIC to pay 80% of insured deposits (instead of 100%) would be sufficient to both prevent people from being bankrupted but also stop the “chase for yield” that winds up supporting those who have already gone bust.

I remain willing and able to get on that plane or in that car and come testify before any body of Congress, under oath, or lay it all out on any form of broadcast media. 

But Congress doesn’t want to hear it, and “Tout TV” sure as hell doesn’t want to broadcast it – especially not the above chart and what it means, even though that, properly explained, makes everything crystal-clear – and irrefutably so.

It sucks to have to say “See, I told you so!”, because we had an opportunity to flush these banksters down the toilet in 2007 and 2008, and failed to take it.  Yes, we would have had to recognize the Depression we are in right now, but by now it would be over and employment would be truly recovering.  We would have been forced to put in place something like The Fair Tax to keep our government from imploding and that would have brought 70% or more of all the multinational corporations to our shores over the intervening couple of years, stabilizing our economy.  We would have broken the back of the bankster cartel, jailed a bunch of ‘em and made damn sure it could not happen again by re-imposing Glass-Steagall.  Those who were not jailed would have fled to other nations, waving their fingers at us at how “those countries” would be better off.  Then they would have flushed in their excessive debt loads while we, in America, would have taken our medicine already.

Yes, all this would have been at the rest of the world’s expense – that’s what happens when you do it right and everyone else does it wrong.

But we didn’t choose to do that.  We still can do the right thing, by the way, but now the damage is greater, because you can’t unbreak an egg.  The $3 trillion+ that we borrowed and spent is gone. 

Our options remain as they were in 2007.  We can take our medicine and accept the damage that has already been done yet papered over and shoveled under the carpet or we can continue to lie and pray that we don’t end up like Greece.

But prayer doesn’t work when you’re asking God to intervene against a mathematical reality that you created by your own hand, and thus what’s coming – and you’re asking for the divine to stop - is something you deserve.