02.29.08
Posted in Old Posts at 1:10 am by Administrator
Gang, this chart….
is a screaming, warning terrifying
The Japanese equity markets are not liking the dollar/yen disaster one iota. Normally I would post a full op-ed in the morning and I shall try around 4 a.m. But events are in motion, again, and it concerns me that tomorrow could turn into one very ugly day. The US Dollar is in serious trouble and the Kitco chart says it all. More in the morning.
0500 update: It’s not looking any better this morning. The Fed is in a box. They have to loosen up the spigots to keep the reserves high or risk collapsing bank after bank. On the flip side if they continue to just assist in the dollar destruction the consequences are, well, obvious. I think the dollar gets smoked again today and with the 73 level in play, it’s time for everyone to review their financial emergency plans. Remember the 3 day plan Homeland Security had with tuna, duct tape and plastic sheeting? I hope you have a 3 YEAR emergency plan because you’re going to need it. More on the show tonight but there is nothing to indicate that conditions have improved. And for those that follow it, the municipal bond markets are just plain nasty. Watch their movement today as that impacts everything as much as the housing disaster has.
Permalink
02.23.08
Posted in Old Posts at 2:44 am by Administrator
Yes, even as I try to revive my email from the dead as I got another 50 plus (thanks to all my fans and listeners) after the show plus what I got during the show, the news breaks again and this time, it’s just to validate the “Municide” piece below. This is accelerating and Benron Bernanke had best remove his blinders and drop Fed Funds 100 bps on Monday or this could overwhelm the Fed before the week is out. Check this story out and start to think about the financial models our cities, counties and states put together to finance short term operations then the implications of the great municipal bond crash we could be witnessing:
I think we can all start to put the implications together but for those that think this is a “nothing to see here move along” event, I hate to disappoint you; it could be a lot worse than just a bunch of monolines blowing up. It could mark the end of our equity markets as we’ve known them.
They had best nationalize the monolines now or forget about it and let the markets make the necessary corrections.
I choose Door#2 but then again, I’m an unabashed laissez-faire capitalist for the most part.
Permalink
02.22.08
Posted in Old Posts at 3:24 am by Administrator
Municide
By John Galt
February 21, 2008
How the Suicidal Fiscal Behavior of Government at every level, Federal, State and Local will Crash the US Financial Markets
“….In a report to the City Council last week, City Manager Joseph Tanner said the city faces a $10.1 million general fund operating deficit for the current fiscal year and a negative available fund balance of $5.9 million on June 30, 2008.
“Based upon the updated financial projections, the current estimate for insolvency is late April 2008,” Tanner said.
“It may become necessary for staff to recommend that the City Council consider filing and pursuing Chapter 9 bankruptcy in the event the city is unable to meet its existing obligations with its existing revenues,” Tanner said in the report.”
From “Vallejo Fears Bankruptcy; Solutions Sought” KCRA TV Channel 3 -
The news headlines in the last six months have a nasty tendency to “speak for themselves” yet few Americans have opened their ears to the deafening din of economic destruction impacting our shores. Tonight’s headlines are no different with the Financial Times screaming “The Monoline Clock is Ticking” and the mainstream media starting to pick up on the story of Vallejo, California possibly going bankrupt, it would appear that we are getting ever closer to two plus two equaling four again and everyone figuring out how our government, at every level, will be the final death knell to this economy and will initiate the final crash which destroys the United States financial markets. The absurd spending projects from sports stadiums to aquariums, butterfly colonies, ant farm research facilities or Malibu tennis courts are indicative of the extraction mentality inherent in almost every level of government. The consequences of this behavior have a price. I call it “Municide” and after my usual historical reference points and theories on how they apply to our current dilemma, the definition will become crystal clear.
During The Great Depression of the 1930’s home ownership dropped then recovered considerably by 1939 in most of the nation, as had median income for the average worker. After the 1940 census, home ownership for the nation as a whole was only down 4.2% from the 1930 pre-depression peak. The problem was that housing values were down 48.6% in the same time period and would take considerably longer to recover (Source: US Bureau of the Census 1943 and The Origins of Modern Housing Finance: The Impact of Federal Housing Programs During the Great Depression-September 2001-
Price V. Fishback, William C. Horrace, and Shawn Kantor University of Arizona). While the affordability of housing was a boom for the average citizen as the economy crawled out of it’s depths with no thanks to the socialist interventionism of FDR, the dilemma the housing crash created during that time period wiped out many towns throughout America and helped to contribute to the mass migration of citizens from town to town looking for work and an affordable place to live. This mass migration had the effect, along with the economic consequences of the depression, of wiping out the fiscal health of the cities, counties and states which suffered population drops and substantial job losses. This trend would continue until World War II began and revitalized the economy, but for many now non-existent communities it was too late.
I am not going to review with any in-depth analysis of the problems with towns defaulting on their debts during that time period because the creation of Chapter 9 bankruptcy was a child of the Great Depression and for the purposes of this paper would make research a far more considerable task than this writer has time for at the moment. Considering it took until 1978 for the first town to threaten to default on it’s debt obligations, the new system installed by the Keynesian theorists until that time seemed sound and functional. Mayor Dennis Kucinich (that’s right the UFO guy who keeps running for President for some reason) screamed at a city council meeting:
“This is the politics of insanity!” he shouted at the city council in his high-pitched voice. “You participated in the murder of the city.”
-“Dennis Defaults”, Time Magazine, December 25, 1978
Yes, old Cleveland, Ohio almost defaulted on $15.5 million in notes that came due, but they were able to avoid filing for Chapter 9 bankruptcy reorganization thanks to massive intervention. As we all know, the 1970’s ended with such a resounding economic thud that the stagflationary times are still referenced and feared in current economic commentary. The news from Vallejo, CA should not come as any shock to the average reader or my readers who have paid attention to the warnings that I have been posting. To get some idea of just how dangerous a point in time we are in, we have to review the monoline insurance crisis, housing crisis and ineptness of government at every level to see how America is about to commit “Municide.”
2004-2007: The Seeds of Destruction are Planted
“Real Estate Never Declines”
Ah the mantra we got beaten over the head with over and over and over again this decade as prices accelerated and the obvious problems began to appear to even the casual observer. While I am not a Yale economist like Professor Shiller, the stories about illegal aliens obtaining no-doc loans from banksters in Denver hit the papers and it was a screaming siren of pain on the horizon. I was unfortunate enough to have been invited to participate in the bubble when one of my former business associates established his own mortgage brokerage office, for example. The office was nice and the two friends he persuaded to participate with him enjoyed their work sitting in front of computers set up in his converted “garage office” sipping beer and cold calling candidates who had decent FICO scores and had huge equity parked in their homes after making payments for over ten years. I disagreed with my former friend’s ethics which caused a rift, but if you think about it, just how many hundreds of thousands of other folks set up operations like this in home offices throughout the nation? Ugh. On second thought, I don’t want to know as it would upset my stomach.
So with the ease of lending money to every Tom, Dick, Harry and Jose accomplished through the ignorance and bliss of Greenspanism (defined as the act of blowing bubbles regardless of consequence for the purpose of future book sales) and friends like mine able to make the connections, people realized they could easily buy more home than they needed or could ever afford and what the heck as “real estate never declines.” This bubble blowing extravaganza led to a cooperative effort that expanded beyond the financial realm as the restrictions on creative financing options were removed and the towns which suffered in the 2000-2002 economic decline saw one of those once in a lifetime opportunities. In communities from Northport, FL to Tucson, AZ local planning commissions and zoning boards were pitched the idea of expanding their cities and tax bases to grow, grow, grow. Unfortunately to accomplish this the annexation policies were abused to absurd levels. This was no problem thanks to cheap, free and easy money, and the issuing of municipal bonds to willing investors also became a common practice which allowed the development of infrastructure for these expansions. The willingness of cooperative developers to write their own land-use plans for these expanding locales all but guaranteed rapid sales, accelerated property tax revenues and of course donations to political coffers at every level. As long as the good times were rolling, why not expand beyond any comprehensible level or logic and at the same time who cared because the bonds were “insured” and rated as AAA the majority of the time.
After the infrastructure was laid into place, the developers went into action creating community after community, each one more expensive and expansive allowing the cities and counties to claim more tax revenue for themselves. The missing part of the equation, industrial expansion or “job creation” was a concern that solved with the theory that when people moved into these communities they would bring the jobs with them. Thankfully that theory held true for quite a while and the demand for illegal aliens to perform yard work and build those houses helped to occupy the older homes that were on the markets that the buyers in the new communities left behind. Huh? Well, don’t worry, I’m sure the millions of new homeowners all spoke Mandarin Chinese and worked as importers or WalMart inventory specialists. Or maybe not so much….as we shall see later on in this editorial.
Insured Disaster
Amazingly the monoline insurers were apparently given incentives to insure the AAA derivatives of the Residential Mortgage Backed Securities (RMBS) as well as the Commercial Mortgage Backed Securities (CMBS). This gave the insurers a huge opportunity to expand their operations and grow their companies that usually insured only the safe, mundane municipal bonds issued for things like libraries, hospitals, roads and utilities (etc…). This rapid growth has been well documented and the crisis we find ourselves in is now the huge ticking time bomb which has everyone terrified that their demise or crash will destroy the financial markets. According to a news report the largest insurers, MBIA and Ambac, would both need $30 billion each to become fully capitalized and thus the flurry of activity from Bill Ackman and Warren Buffett to perform nature’s role as vultures except this time they want the carcass still warm, not dead cold and frozen. The theories proposed in the mainstream financial media about the “good bank, bad bank” split seem viable only to sustain the illusion of solvency just a bit longer while denying the underlying rot. This is akin to calling the tilt of the deck on the Titanic a “feature” to enable skateboarders to have more fun as it slipped under the icy waters. There is a hope that foreign investors can be taken to the cleaner just one more time to bail out the financial houses of horror which have yet to mark to market the garbage being protected by the various insurers and rating agencies, both of which will be destroyed should the derivatives be forcibly revealed to the investing world.
What is the rot you ask? Let’s go back to the concept of “good bank” versus “bad bank” which is so patently ridiculous it’s beyond the pale. The idea was to shove the bad paper or derivatives into the “bad bank” and capitalize with shares from the “good bank” which would hold the municipal paper. In theory this is sound as who ever heard of cities and counties being unable to service their notes or pay their bonds off as taxpayers can handle it according to liberal politicians and investment banksters. Unfortunately the Vallejo, California story is just the tip of the iceberg. I live in a county where the word “foreclosure” is a daily utterance and the signs are posted everywhere. This same county has the earlier referenced “Northport” as part of it’s realm. This town is basically one giant snapshot of the real estate crisis with literally thousands of homes for sale for years now, thousands of vacant lots for sale for years now, and businesses failing on a weekly basis. I may not be an expert but I have stayed at a few Holiday Inn Expresses lately and the last time I checked, people in bankruptcy or foreclosure, empty houses, vacant lots, bankrupt businesses and empty office parks do not provide what I would call “steady streams of income” to finance the city or the county. And believe it or not, it took until this past December for these morons to reduce the “impact fees” on new homes and businesses built there because they noticed no one wanted to build due to the high taxes! Ah yes, but why do they have high taxes? Hmmmm. Could it be to service the municipal bond debt payments?!?!?!?!?!?!!!!!
You see, this problem is ignored just like the pinheads on Wall Street ignored the problem of falsified ratings for communities, derivatives and creative financing. These idiots think that in a period of declining economic activity where the falsified job numbers give the indication of “continuing strength” in some areas will not put a burden on the average taxpayer to meet their obligations. Well, guess what sparky? The average homeowner prefers to feed their children, buy medicine for them, and shockingly remain employed if possible with as many jobs as possible to try to keep their homes. But when a home is falsely appraised at $505,000, an ARM is written which resets in November of 2007, and the payments skyrocket problems (wow) start to occur. Under the government sponsored cancellation of private contract project of the week, usually code-named project HopelifelinesaveourbuttspleasesoIcankeepmyStJohnscondo that the banksters all endorse as opposed to a FBI investigation, the desperate homeowner contacts the customer service representative in New Delhi, who instructs the homeowner to go meet with the banksters in person anyways, in the hopes of refinancing the home. Of course the refinancing goes swimmingly until the appraiser arrives on the scene and says “I appraised this at $505,000 last time? I must have been drunk. It’s only worth $250,000” This closes the books as far as the banksters are concerned and they can blame it on the homeowner in the government’s eyes and be done with this until foreclosure proceedings begin. Because the homeowner, now very jaundiced, remembers Cramer’s advice back in August of 2007 to just “walk away” from upside down real estate thus the increase in “Jingle Mail” back to the banksters. The bottom line is that unemployed or underemployed individuals or households can not afford the same payments they had in 2005 now, much less the reset payments or re-financed ones being promoted as the “savior” now.
While all that is happening, the pinheads deny reality while sipping Pina Colada’s in the USVI and lower level schmucks keep warning and warning until they are laid off for annoying upper management with facts. In the mean time, the lobbyists come back to the local governments all tanned, rested and ready with the “what’s in your wallet” question of the day to which the local governments reply “nothing, which is what is being paid on our debt service next quarter if it doesn’t turn around soon.” The lobbyist leaves and calls New York or the Cayman’s (one and the same really) and reports “hey boss, we could have problems on the horizon.” But the “Horizon” is just a golf course project they are working on in China and something they will worry about “tomorrow.” In the mean time, localities and counties are considering closing libraries, hospitals, schools, road repair projects, utility improvements, etc. as the money runs out which eventually leads to Vallejo, California and many other cities raise their hands to the on staff legal team to ask “is Chapter 9 really that bad?” After a quick call out to Orange County, California (the biggest Chapter 9 to date), the legal time replies “Chapter 9 is not so bad. Heck, Orange County even has it’s own show about the housewives there.”
False Economic Assumptions Based on a False Economic Reality
This brings us back to the problem we are encountering now. For several years now the false economic assumptions that “real estate never declines” and “homeowners would never walk away from their homes” built the derivatives up, up, and up on RMBS and allowed the risk to spread out the world over. The mathematical models assumed that it was beyond any reality to assume a default rate above 1.5% or so and the political assumption was that the Federal Government would never allow it to get that bad.
Ooops.
Now that it is officially worse than “that bad” and those assumptions are obviously blown to smithereens, let’s take a look at the false economic reality which is impacting this side of the equation:
1. Wages are increasing. While that sounds nice, concise and easy to perceive it’s complete, utter and total nonsense. The BLS statistical reports have demonstrated flat to declining net income levels for years now.
2. Inflation is under control and reasonable. And hedonically speaking I’m the Pope.
3. Real Estate valuations fluctuate but never experience long term declines. I guess these folks ignored the 1930’s. Along with the 1830’s. And many other time periods of stagnant prices in the real estate markets.
4. Governments will never let everyone fail. The problem with that theory is what if government is the preeminent cause of all the failures?
5. Unemployed people will always find a way to pay their bills. No comment necessary.
The attempts to micro manage our economy at the state and federal levels has been an unmitigated disaster but statistically speaking we are not in a recession yet. Of course the NEBR has stated that the data they receive is garbage and they often have to wait months or years to determine the exact time frames when one begins and ends, so get your cardboard to build your Hooverville home now and beat the rush. The inexactitude of the data is not only creating a Fantasy Island themed economy but distorting investment decision making from the household level right up to the corporate board room. And this dissonance, desperately created by the politicians to maintain power, will be our downfall. The falsification of economic reality is contributing to the poor investment decisions we see by municipalities and individuals alike. And that distorted view of reality did not help the rating agencies nor monolines in their decision making process either. This is where the complications of their upcoming failures will destroy our financial markets completely in my opinion.
“Municide”
The “good bank” theory would hold up oh so well if the economic situation were traditional and valid in the current day and time. We are not creating new industries or new jobs. The government has over-burdened our society with such a myriad of rules, regulations, fees and taxes that the hassle of creating sustainable manufacturing or any type of industrial base is almost impossible besides unprofitable. Thus with declining net incomes, the evaporation of disposable income, the implosion of local budgets thanks to the housing collapse, and the imposition of the inflation tax by our central bank the future is very bleak for the average citizen or municipality. These counties and cities are engaged in a service cutting frenzy lopping off the softball instruction classes and janitors in a weak effort to meet the budget. But the phrase “municipal bond default” is slipping into the modern American lexicon and that is where the rules change.
Pension plans, conservative investors, and many millions of other souls have piled billions of dollars into supposedly safe, insured and low-yielding municipal bond funds. The idea that the valuations of these instruments changing in a drastic manner never even crossed the minds of anyone (well exclude myself and a few others), as there seemed to be a huge gap in the River of Denial where the disconnect between the “subprime crisis” and the solvency of the cities involved was huge. Well, the connection was finally made when the Auction Rate Security markets went off the scale recently. With failed auctions resulting in some communities seeing back breaking 18 to 20% yields, the idea of issuing new paper or starting new projects will fade quickly. And that reduces employment opportunities in those cities. As well as impacting the investors, be they pension plans or just a bankster in the Caymans, to shun this market and fly for safety in tangible assets. That is why the stories about declining home sales, falling building permit applications and small to medium sized business bankruptcies are starting to scare the dickens out of the investors domestically and overseas. What happens if the monolines have to start paying out on defaulting municipal bonds? What happens if the “good bank” becomes as insolvent as the bad one, reducing the capitalization of the “bad bank” with it’s devalued shares? And what happens when the Municide kills the insurers causing a massive write down of actually worthless assets by the largest banks in the United States? These questions are ones that they do not want to have answers to, but the Federal Reserve has to be aware of this pending implosion.
Unfortunately for all of us, the failure to project future revenues and growth does impact everyone in the U.S. The decline in sales tax receipts, property tax receipts, and other fees originally projected from an expanding economic base as well as healthy real estate market, will eventually lead us to city after city, county after county, defaulting on various securities once thought or perceived to be the safest in the nation. As the resets continue this year and next, even more over-valued real estate which will force property tax revaluations and appraisals to be evaluated lower and lower, feeding the vicious cycle downward even more so. Asset devaluations with accelerating commodity inflation will eventually destroy the average American citizen’s standard of living. Add in the starting wave of HELOC and second or third home equity defaults and you have a formula for a banking crisis on top of the municipal bond crisis to come. The result of this economic contraction along with the forced decline in government spending on the state and local level will leave huge revenue gaps that will result in either default or increased federal intervention.
In the long run, I can foresee the Northern Rock solution being implemented. There is a “too big to fail” mentality in this nation as there is in the U.K. which results in a very low pain threshold on a political level. The natives are restless and if the government fails to prevent a total collapse of the system, they will be held accountable during this election season. Thus the inflationary solution, the most damaging and damning one, shall be implemented. Municide will have the consequence of destroying the retirements of millions, the standard of living of many more, and re-introducing the dominance of Washington, D.C. into our lives on a scale unseen in over half a century. To think all of it could have been avoided by cities and counties setting up rainy day funds, maintaining cash reserves and not supporting inane projects like bike paths to honor dead Mayan Gods that don’t even know where Podunkville, Arkansas would have been located on a 912 B.C. map.
God help us.
Permalink
02.12.08
Posted in Old Posts at 11:04 pm by Administrator
Screams and cries filled the air, as 1,500 passengers floated in the freezing water. As the cries continued, the survivors sat in lifeboats. Only a few wanted to go back for more people. Most of them thought the lifeboats would get “swamped” if they went back. After time, the cries died down and there came a deadly silence. At 3:30 am, rockets were sighted. These were from the rescue ship, the Carpathia. The first lifeboat is picked up at 4:10 and the last one is picked up at 8:30. At 8:50, the Carpathia heads for New York. She arrives at New York on April 18 at 9:00 pm. She carried 705 survivors.
- Web Titanic by Karl Metelko www.webtitanic.com
And so as the freezing waters slowly froze the bodies of the unfortunate souls, then bloated, floated and eaten by the ocean life of the North Atlantic. The reason this analogy is so pertinent is this news story from today “US Announces Plan to Delay Foreclosures” which does nothing, absolutely nothing (as Kwazy Cramer likes to say) about the solvency issue of the banksters. This “plan” only buys time for the mega wealthy to divert their cash out of the losers and into the winners as the political instability which results in two million people being thrown out into the streets grows daily. The problem, as it always has been, quite simple.
First, unemployed people can not pay for homes no matter the price. Guess that outsourcing idea for our manufacturing base didn’t git-er-dun eh what Kudlow?
Second, if a home needs a refinancing agreement and the borrower got a mortgage for oh, say $525,000 but the assessed value this week is $275,000 then just where oh where are the homeowners going to come up with $250,000 to cover the difference? Better yet, I’m dying to see the happy, happy face put on freezing the rates even though valuations will continue to plummet in most markets. Heck, if I were facing the situation described in the news story above, I would stop paying on my home, stall in negotiations, hoard cash and run for it. Because one thing is obvious:
The abrogation of private party contracts through government coercion is now not only legal, but encouraged.
Which is quite obvious since the banksters can steal you blind via stock or securities fraud and walk away unpunished but if you breech a contract, well, it’s jail time for you sparky.
So as the banksters through rope with life preservers at the end on the lifeless bodies floating in the freezing North Atlantic Mortgage Waters, this stall will only accelerate the situation, not change the ultimate ending.
I’m just wondering what’s next; will we literally begin dropping money from military transports over the cities of America to keep the riots from breaking out.
Or will we just make sure everyone is fat, dumb, drunk and happy when they go to the polls by passing out free booze to everyone before they vote. Sounds like a great job for the unemployed illegals, passing out tequila shots to kill the pain of voting for the bunch of losers on this year’s ballot while dealing with an economic disaster unseen in our history.
Permalink
02.08.08
Posted in Old Posts at 12:24 am by Administrator
by John Galt
Yes, here we go again. The celebration in Washington kicks off as the national debt accelerates in just one day by 1% of our total GDP. We have provided money for smokes, lotto and malt liquor to calm the masses and keep them from being angry one day this summer as they are laid off from their jobs and the benefits run out.
Absurd. Wasteful. Foolish.
Yet in more “shocking” news today the GOP’s only “conservative” (Stop snickering, it took me over an hour to quit laughing) withdrew from the race and basically handed the Mexichurian Candidate the nomination. I never thought I would see a day where I would hope for a Huckabee win but today is the day. Yes, I know, I voted for Dr. Paul but that was out of principle. Now we are down to Dr. Paul, 3 socialists and a preacher running for the office of head of the free world. Crap, we are screwed.
Speaking of which, I can not announce this loud enough:
RUSH IS WRONG
While Mr. Limbaugh is entertaining, his shows lately are sounding somewhat empty. He will never admit it but he’s been wrong for twenty years now, begging conservatives to “work within the party to change it.” Well Mr. Limbaugh, hows that been working out so far? We have wide open borders, a “temporary” tax cut, spending out of control, undeclared wars, an underfunded and understaffed military, internationalist treaties which have reduced our sovereignty, and a hotheaded fruitcake as the GOP front runner who had the nerve to actually congratulate Presidente Calderon in Mexico for his help on the border issue. Of course this is the same el President whose military he controls routinely shoots at our border patrol while escorting drug dealers into the U.S., but hey, who’s accounting for taste.
So basically speaking you’ve made a gazillion bucks but the conservatives who followed you got, uh, ummm, “screwed” by following your advice. Well, I “unscrewed” myself by quitting the GOP in 2004 after the border betrayal by the loon in charge now and to be quite honest, I don’t feel bad at all. Add in the fact that we have a snotty liberal CINO representing us in Congress, a faux conservative CINO Senator, and Arnie Lite as governator of Florida and you can see why we are somewhat disillusioned down here. But hey, at least we don’t have a Senator like McCain who is proud of working with an alcoholic philandering (alleged) manslaughter dirtbag who is a Senator from Massachusetts. Sheesh, we’re not bragging too much now as I’m sure he’ll retire down here and there’s plenty of bridges and our liquor stores are open on Sunday.
Back to the Limbaugh fallacy though. He’s begged us to work within the party which lies, degrades and ignores us. Dr. Dobson sent the message the other day, but these people continue to say “party first” instead of “THE NATION COMES FIRST” which is most telling. These idiots who think that I will ever send them anything other than “Da Nadas” are completely delusional.
So now the moderate talk radio hosts who claimed to be conservatives in a prior life are claiming “we have to support the party candidate to keep Hillary out” and other such nonsense. So let’s analyze their ignorance:
1. 1st Amendment: McCain’s horrible campaign finance reform bill was one thing, but think people. If the Democratically controlled legislature passes the “fairness doctrine” in it’s new form, don’t you think he’ll sign it to shut up his critics as he is a vindicative soul? Hillary on the other hand will just sign an executive order.
2. 2nd Amendment: GOA Ratings are as follows:
McCain: F-
BJC (Black Jimmy Carter): F
Mussolini in Drag: F-
Is there really any need for any further comment? Goodbye gun rights….(are you paying attention yet el Rushbo, Beck and others?)
3. 4th Amendment:
McCain - Anti-waterboarding of select terrorist suspects.
BJC - Ditto
Mussolini in Drag - Megaditto
4. American Sovereignty
McCain supports aspects of Kyoto and is against drilling in ANWR. He wants a 50 cent per gallon gasoline tax to pay for carbon credits so he’ll get continued invites on the Letterman show and free golf with Arnie. He also supports the L.O.S.T. (Law of the Sea Treaty) and the S.P.P. For those that think the S.P.P. is just a myth, that’s fine. But if you think he’s retracted his support of open borders in the U.S. you are on crack.
BJC - Who knows but he’s an internationalist and socialist so odds are he’s married to McCain at the hip on issues of the sovereignty of our nation and preservation of our identity.
Mussolini in Drag - Whoever bribes her the most, that’s her policy of the day.
So el Rushbo, please, educate us foolish masses. We have a bunch of lazy, imperial, impetuous, vapid, dis-loyal “Republicans”, some of who claim to be conservative, which have demonstrated in the last twenty years a consistent ability to be bought, sold or outwitted by the socialists who seek to destroy this nation. If you think for one minute they see a dime, a vote or anything from moi, you are sadly mistaken again.
It’s time for you and your talking buddies to quit submitting your audience to this nonsense and get serious about changing this nation before it’s too late. And it’s time for the Republicans to go the way of the Whigs (That is an extinct political party for those of you who are NEA impaired or live in Rio Linda). I see no difference despite the scare tactics being created in the two parties, the potential nominees nor the personalities in charge. When the true conservatives elect to support a party or create one which actually supports, gasp, the CONSTITUTION, then I’ll support your causes and start to believe what you have been saying.
In the mean time, put up or shut up gang. The choice is yours.
Permalink
02.07.08
Posted in Old Posts at 1:40 am by Administrator
By John Galt
Jamie felt like a super safe scooter rider and ever so green for switching from her old car to her new Vespa. Once regular unleaded topped $4.59 per gallon she felt that she had to do something as her dad was paying for her college and auto expenses and it was just too much. The scooter her family got her for Christmas was such a nice surprise and would save everyone a ton of money. Now that everyone who had a car or truck was on a strict rationing schedule she felt blessed as she could buy gas as little as once every three weeks if she didn’t travel too much. As she had been doing for weeks, she got ready for her late afternoon class by putting the iPod earbud in one ear so she could still hear the traffic, then her helmet on and putting the backpack on for the short drive to her college class. After driving past the gas station, she noticed the hot-headed screaming going on in the long line of cars and pickups and just kept moving, worried that things were getting worse. As she turned on the next street and came around a curve, WHAM, a two by four hit her square in the face shattering the face shield and knocking her off the scooter violently. As she started to move she saw a man catch the scooter and throw it into the back of a pick up before the man with the two by four kicked her in the head, knocking her unconscious…..
Carol and Mike felt good following the advice of the local PBS home improvement show. They had installed a solar panel system in the back yard which provided almost seventy five percent of their needed power and despite the cloudy days, the wind turbine provided a buffer and enough to sell some power back to the electric company for a tax break. One afternoon after a trip downtown, they came home and the power looked like it was out and there were no lights, no power to the refrigerator, nothing. It was weird because it had been sunny and windy that day and they could not understand why in this suburban area the power would be out in their home only. Mike walked into the back yard in utter horror and started screaming “no, no, no.” Carol ran out and saw the empty space where the solar panels once were mounted and the slab where their wind turbine tower once stood. The thieves even had yanked the power line down from their system which allowed them a last resort back up and the ability to sell power back to the electric utility. Mike just could not understand why anyone would do this…..
Tom had hit his wit’s end. For the fourth time in a month, thieves had popped his locking gas cap off and siphoned off all of the diesel from his semi. This time he had a plan. He knew if he stayed up all night, watching the truck in his front yard, that nothing would happen and he would just lose a night’s sleep. He did a little research and decided this time to surprise the thieves. He took the main fuel line and sealed it off and put a spar tank he had in his back yard and filled it with a cyanide based pesticide he borrowed from a friend. “The hell with these animals” he thought to himself as he bolted the tank back on. After finishing all the work, he locked a new cap on the tank and went into town for the evening to shoot pool and catch up on old times with friends. Well, after a few beers and a lot of pool Tom looked at his watch and said “fellas, I’ve got to get on home, it’s almost midnight.” As Tom pulled into his driveway he saw the two cop cars and lights everywhere. The officer walked over to Tom and asked “Sir, is this your semi?” Tom replied “yes officer, what’s wrong, was someone stealing stuff off of it again?” The office said “please get out of the car sir” and put his hand on his gun. Tom, being a lawful citizen obeyed and asked “so what happened officer.” With that Tom was slammed on the hood and the officer started to speak; “Sir, you are under arrest for murder. Two teenage boys attempted to siphon the diesel out of your truck and a deadly substance was added to the mixture. You have the right to remain silent….” After hearing his rights, Tom, now handcuffed and angry yelled back “where were you when these animals were stealing from me!” The officer warned him to calm down or they would taser him. Tom, furious by now, yelled again “this is BS! Let me go…” and before he finished the sentence he was dropped to the ground with the officer’s taser….
Sound far-fetched? Not in the current world we live in. The police have a job to do and there is no way they could ever answer every call about stolen goods, fuel, or scooters once the energy based inflation hits the next stride upwards. No matter what the deflationists and unbelievers say, there is a looming energy shortage unless we elect to liquidate about 1 billion people and reduce demand. My money is on the idea that we will not be losing the Chinese communists any day soon so the demand, thanks to Chindia will continue to grow. Keeping in mind the peak oil curve we are experiencing (thank you for that education Matt Simmons) and the fact that the global warming bogeyman will be used to make matters worse if not doubly expensive for us average souls, the price of energy will be frightening. This means that those tools and implements used to save money and provide savings in the coming energy shortage will be of prime interest to those who possess or sell them. Now the question is “what do I do?”
A lot depends on the neighborhood you live in. If you live in or near the inner city, well, you’re toast. Just accept that you love FEMA and find cookies to bribe the soldiers in exchange for goods you’ll need once your supplies run out.
If you live in suburbia, again, it depends on the area. If there are prolonged brownouts and you have a solar panel system it might be wise to keep it under wraps or as camouflaged as much as possible. If it were me and I had a bunch of nosy neighbors I would “participate” in the brownouts and shut down my personal grid as much as possible to hide the fact you have power and they do not. Fencing to hide this set up is highly advisable and I would never brag about it. As far as wind turbine systems, those are hard to hide, so good luck! If you live in the “country” then barbed wire is your friend and as much security as you can afford is a capital idea.
Gasoline and diesel will become a premium item once rationing begins. For the scooter rider who was assaulted in this story I would advise traveling in large groups. The safest mode of travel will soon be in large groups or convoys and this will apply to motorcycle as well as scooter riders even in just short local trips as high mileage vehicles will become the desired target of thieves everywhere. The fuel theft situation will ramp up dramatically much like the copper theft problem has. So to protect your resources the first thing to consider is the locking gas cap. Then if possible, strange as this sounds, parking your vehicle as close as possible to another vehicle or wall where the gas cap is blocked making it almost impossible to access unless the thief is five foot seven and weighs thirty pounds. It might be a pain exiting the vehicle from the opposite side, but at this point in time you have to ask yourself: Which is worse? Ten seconds of inconvenience crawling out of the passenger side or walking to the gas station for some fuel?
I’m sure my readers have literally dozens of suggestions of your own so please comment below with your suggestions as much as possible. The “learning to live like a caveman” idea is still open but that’s the one Algore wishes to impose and living in Florida I think I’ll take a pass on that suggestion.
Permalink
02.06.08
Posted in Old Posts at 10:58 pm by Administrator
Vapornews.
Here I am, after another long day at the office and low and behold the rumor machine is running wild again. Tonight the Titanic is attempting to merge with the Lusitania according to Bubblevision, er, I mean Delta and Northwest and if that wasn’t good enough, UAL and Continental are now “serous”. I’m glad these are “serious” talks because all four of the airlines suck and a merger then rapid Chapter 7 would be merciful on the flying public and then maybe, just maybe we could find all that luggage they’ve stolen.
So why do I title this “Blue Horseshoe” etc.? Just recall that wonderful piece of cinema titled Wall Street and think back to the gossip call involving Gecko’s lacky Bud (played by Charlie Sheen). Well Bubblevision is that lacky. They are the useful idiot using their on air talent to vent vapornews so longs can cover and shorts can load up at the corporate level and burn the ignorant. It’s entertainment that costs the foolish money and helps the arbs make a buck on the stupid. The amazing thing is the SEC does, well, nothing about it. Never mind, that’s not so amazing. The entire market is rigged and unless you realize that, well, you’re better off investing in Teldar Paper or Blue Star Airlines.
This is not the time to be brave and if you listen to the wise, this market has a long way to go.
Down.
Permalink
Posted in Old Posts at 3:36 am by Administrator
By John Galt
Once upon a time there were three little pigs. Each of the little pigs had their own ideas but two of them went to public schools where they were trained in Keynesian idealism while the third little pig won a scholarship to Hillsdale and learned the Austrian economic theory. The first little pig took one look at the other two and walked off muttering “you two are so ignorant! I’m taking advantage of my agricultural subsidies to build my house.” And with that he elected to cut the wheat down he spent all season growing and make it into a firm strong house, much better than hay as he could grind into flour if he got hungry. Then suddenly, one day, the inflationwolf knocked on his door screaming “Hey little piggy, I know you’re in there! Open the door or I’ll huff and I’ll puff and I’ll blow your house in!” The little piggy just laughed and yelled back at the inflationwolf, “Kudlow and Cramer said you are just a figment of my imagination. Now leave me alone as I buy more stocks while the market crashes because my television told me too!” The inflationwolf, puzzled and now angry yelled back “I am the ultimate tax and in a second you shall see!” With that utterance the inflationwolf inhaled, and inhaled, and inhaled until he blew so hard wheat was flying everywhere. Much to the inflationwolf’s surprise the door still stood but there was a fat little piggy screaming at his locked up E*Trade screen as the market continued to plummet. And just like that the first little piggy was devoured in a pig roast and the inflationwolf became the talk of the town as Emril’s barbecue sauce was still affordable and quite tasty on that first little piggy for the town’s first ever Inflationary Pig Roast.
The second little piggy was quite horrified at this turn of events. He was more resolved than ever to follow the Keynesian ideals of his education and decided to build his house out of fiat dollars. He made the trip down the street to the local Federal Reserve branch where the second little piggy claimed hardship and dumped a bucketful of derivatives as a long term TAF deposit, enabling the little piggy to obtain billions of fiat dollars so his house would be insulated, thick and secure as the dollar was always the strongest currency to build on. After finishing his home, the happy little piggy stood in amazement, smiling back at Jefferson and Franklin, Lincoln and Washington, and just how huge the house was he was able to build. Then one afternoon as the second little piggy was watching Maria ask “It’s 4 o’clock, do you know where your money is?”, there was a loud knock at the door. A slightly fatter but much bigger looking inflationwolf was standing at his door screaming “Alright piggy, I know you are in there! Open the door now or I’ll huff and I’ll puff and blow your house in!” The second little piggy laughed and yelled back “hey Maria’s talking to Dillon now. Shut up or I’ll whack you upside the head with one of my bags of bonds I use for self-defense you pesky wolf!” The inflationwolf took one wheeze, put his cigarette out and huffed, and puffed and whoooooooooooossssshhhhhhhhh the dollars flew all over town and it rained money for days. And in the middle of a concrete slab there was a little piggy, holding his remote and hiding behind a bag of bonds. The inflationwolf just chuckled “guess who’s coming to dinner” and with that snatched the little piggy from his perceived place of safety. The second piggy was the surprise pig roast but due to the inflationwolf being very busy, they had to use the store brand barbecue sauce that was on sale as everything else was getting pretty darned pricey. The second little piggy was a wee bit tougher but the town’s pig roast was excellent as the monetary rain storm the day before had everyone drunk and delirious shopping on eBay for useless widgets as they chowed down on ham hocks.
The third little piggy was the wisest one of them all. He thought “that inflationwolf is clever, but there is a way to defeat him.” The third little piggy took his fortunes from working hard and saving and bought hundreds upon hundreds of gold bars and mortar. He painted the bars to look like bricks and built a solid house with a cast iron door which would handle almost any storm that mother nature or the Fed could unleash. As expected, the inflationwolf showed up smoking his food stamp purchased smokes and getting fatter than ever. He wheezed at the top of his voice “Alrighty then! This is your worst nightmare! I’m the inflationwolf here to take you away from your slovenly life of excess in this house of yours! Now open this door piggy or I’ll huff and I’ll puff and I’ll blow your house in!” The third little piggy yelled back “go for it fatso” and with that the inflationwolf huffed and puffed and blew and blew. But the house stood firm. The inflationwolf, ready to pass out and wheezing from air tried one more time. He inhaled and huffed, and puffed, and huffed, and puffed and blew it as hard as he could. Yet the house of gold stood firm. The little piggy yelled out to the inflationwolf “had enough yet fatso?” To which the inflationwolf yelled back “no fair, no fair, you have to have had government help!” The piggy yelled back “nope and just some advice if you try to break in, I’m a 2nd Amendment piggy and will blow you away!”
The dejected inflationwolf went whimpering down the driveway crying as he had failed again, as all his ancestors have, to defeat the house of gold. And with that he thought “I wonder if Little Red Riding Hood tastes good with the garlic onion grilling sauce.”
The moral of the story:
If you live in a house built on a fiat foundation it’s not indestructible. And Austrian educated golden piggies live longer, happier lives…..
Permalink
02.05.08
Posted in Old Posts at 2:39 am by Administrator
Despite popular belief, the equities bull market is still dead. It thrashes around every now and then, but the new reality is starting to sink in. If you look at the numerous problems in the banking system reality is starting to set in again and the short covering rally we witnessed last week seems like a distant memory. Despite what I would call “flare ups” the pattern we saw last week when the Fed cut again was not only extremely bearish but an indication that things are about to get a lot worse, a lot faster. The most terrifying aspect of what we are about to see is that any crisis could trigger the final capitulation.
Thus this warning before my next series of articles are posted:
Much of what we have seen thus far has a historical parallel and unfortunately the mistakes made in the past have been repeated and amplified now. The de-leveraging process is one that could have been resolved in a short period of time yet the political environment will never allow it. This means the ongoing agony of a slow and painful decline instead of a short, sharp bear market.
How does this play out? The theory that there is a bank sponsored mirage known as a monoline bailout is a stall until a real solution can be found or more of the fertilizer derivatives can be sold to suckers. This stall will not work. The “Bailout” will be recognized by investors for what it is, much like the Super-SIV which never existed was.
Then the bull can mercifully be dragged off the stage in the cart and off to it’s final slaughter.
Beef. It’s what Americans eat.
As well as bears….
Permalink
« Previous entries ·
