04.20.08

BEWARE of the Killer “B’s”

Posted in Old Posts at 5:12 pm by Administrator

BEWARE of the Killer B’s

by John Galt

April 21, 2008

1916-Sheep grazing on the South lawn at the White House

The Bloodsuckers B’s

The average person might ask “so what’s so dangerous about a group of sheep grazing at the White House?” Since sanity has departed America’s shores decades ago, it should not be that insane to point out that those are not sheep but sheeple. They are “Killer B’s” of which there are several types which are both dangerous and could ultimately prove lethal to the American economy and political system. The Bloodsuckers are so dangerous to our system the former Comptroller of the United States, one David Walker, resigned in frustration that the entitlement and accounting nightmare was not being addressed by the Killer B’s in Congress nor the American people as a whole. In less than a decade, we could well find ourselves taking less revenue into the Treasury Department than is needed to maintain any semblance of sanity to cover just the interest payments on the debts we owe. Instead of tightening our belts, addressing the long term implications of over $53,000,000,000,000 plus in debt and obligations, the current administration and those prior have expanded the role of government in every aspect of life, be it an unrealistic prescription drug program or nation building around the world. This nightmare is not helped by the Bloodsucker, that individual who lives off of the government largess regardless if they need it or not, regardless if they are a citizen or not and regardless if the problems they endure are self-inflicted. These Bloodsuckers are expanding in population as their parent creature, the Bloated Bloodsucking Bureaucracy(BBB) is allowed and encouraged to reproduce, expand and multiply at every level of government. The bills are coming due folks and this expansion in government socialism will eventually collapse of it’s weight. The BBB’s will continue to leech off of the productive souls of society as long as we allow it, and that’s creating dependency for the sake of dependency. Unfortunately, this Killer B has spawned larger children every four years and this years batch of mega-leeches is no better….

The Killer B Parties

Ah yes, another four years, another spawn from hell to torture the American psyche and sanity. You look at those photos and ask yourself “and people wonder why the public hates to vote?” Yes, these Killer B’s, not necessarily the candidates themselves in total, but what they represent are exactly why America is on the bullet train to historical irrelevancy. The two political parties have elected to become interchangeable farces who’s sole benefit is to promote an entrenched class of elites to live large off of the producers of society. Some of these producers, a different kind of Killer B, have adopted the “why fight City Hall” philosophy and seek to expand the government also, thus their feigned support of clowns like those in the photos above. The two parties have ceased being objective opponents working towards a unified management of the people’s affairs and instead prefer to just have title interchange as their only priority as long as they can be re-elected to office with all of the accompanying power; one party becomes the “Social Democrats” one week and the other the “Democratic Socialists” the next. Regardless, any of the candidates pictured above will only do more harm than good with regards to our economic affairs and all of them appear to wish to implement some degree of even more drastic socialist solutions that will ultimately lead to the dissolution of the economic system which created modern America and enabled Algore to create the internet. Thank you Al, if I have not already.

Ben Bernanke during recent Congressional testimony praying for Greenspan to un-retire

The Economic Killer B

Alas, I feared it would not happen but the reincarnation of Arthur Burns could not escape my pen in another editorial nor should it. The economy “Killer B“, one Ben Bernanke, has taken over as steward of the Federal Reserve and in the process, attempted to approach the mess Greenspan left him from an academic rather than a practical reality. The interventionist policy approach is far outside the legal mandate outlined in Section 13 of the Federal Reserve Act, yet the “law” is just a minor inconvenience to the powers that be. This tact is what Ben said he would have done during the Great Depression but in reality, he is falling for the same trap as another “Killer B“, Arthur Burns, the FOMC Chairman in the late 1970’s.

The inflationary spiral which Greenspan laid the foundation for is an inevitable result of flooding the world with dollars and unless Ben tightens the reigns severely and quickly, the genie will not return to the bottle. These inflationary pressures are much like what Chairman Burns encountered in the 1970’s and made similar egregious mistakes that made the problem worse. If you look at the USD index chart as of this past Friday, you will note when Ben became chairman and where we are at today.

On Friday we settled at 71.923, well off our all time lows but one has to ask the obvious question: How long will the dollar be allowed to decline before the average person puts 2+2 together? The basic math is simple; we have witnessed a marked acceleration of inflationary forces on commodity and select assets. The commodity inflation we are witnessing is being blamed on everything from speculation to a desire to park money in a “safe” place like U.S. Treasury instruments. But that theory can be tossed out the window with the new volatility introduced into the government debt markets by the obligations that Ben has elected to bring on to the Federal Reserves balance sheet at the expense of taxpayers. And the central underlying demand by over two billion people for such things as food and raw materials is an extra factor that the 1929 Fed did not have to contend with nor did Ben’s paper ever consider addressing. Sisyphus had a minor task compared to the historic nightmare that Ben has inherited, yet few wish to allow the capitalist system to correct itself so every FOMC meeting, Ben is pushing the rock back up to the top again. The basic supply demand curve can not be violated nor altered, yet the mythologists who run our economy continually create new works of fiction to adapt to the new reality while still spewing such creative utterances as “it’s OPEC’s fault” or “it’s the speculators.” The US taxpayer is not supposed to be an insurance policy for the follies of the investing community but Ben and the Central Banksters gave themselves the power despite never being elected to office nor given Constitutional authority to do so. If one takes the time to read Section 13, there is nothing that should have allowed them to create said power. If you read subsection 13 of Section 13, it says:

“13. Advances to Individuals, Partnerships, and Corporations on Obligations of United States

Subject to such limitations, restrictions and regulations as the Board of Governors of the Federal Reserve System may prescribe, any Federal reserve bank may make advances to any individual, partnership or corporation on the promissory notes of such individual, partnership or corporation secured by direct obligations of the United States or by any obligation which is a direct obligation of, or fully guaranteed as to principal and interest by, any agency of the United States.”

In other words there is nothing that says a CDO, RMBS, or CMBS created by a non-commercial investment bankster or any derivative thereof shall be accepted by any member Federal Reserve bank. So just like money, the Fed is not creating “law” out of thin air yet the sheeple continue to graze on the south lawn. The implications are mind boggling and unless you people get off your butts and start screaming at your local Congress Critters, other private institutions which are married to the government and various agencies within governments at all levels might begin to create policy or laws as things begin to deteriorate, seeing how Congress has abdicated it’s Constitutional oversight responsibilities. Call, write or fax, do not waste your time emailing. The seizure of powers allocated only to the people can not be allowed to pass. And this dangerous spate of activities by this “Killer B” should be everyone’s number one concern as we move forward and the monetary crisis deepens.

The Killer Talking B’s

Oh no! Please, don’t scream at me or the computer. The dancing banana is a “Killer B” that should keep you staring at the ceiling all night long in utter frustration and anger. It represents the summation of a basically formula:

=++

Yes, even cheerleading “Killer B” bananas require some basic math, even though those laws do not apply on Bubblevision, America’s propaganda arm for the economic “Killer BSERS” who have found new ways to report information, not news, but information, that would make Goebbels blush. Imagine if Africanized honey bees could speak to you before they stung you to death. I imagine it would sound alot like “Booyah” boy telling viewers to hang on to Bear Stearns right before it lost 95% of its value. Oh, and for those who doubt that there is a problem when people passing their network off as “financial journalists” begin to spout their nonsense, I refer you back to this:

Jim Cramer’s Guide to Market Manipulation

March 20, 2007, 9:22 am

NY Times

“Mad Money” host Jim Cramer has gained a huge following, and more than a few critics as well, with his explosive stock-picking patter. But in a revealing video interview with TheStreet.com, the financial Web site he cofounded, Mr. Cramer drops some bombshells that go well beyond his usual chair-throwing, ‘Booyah’-shouting routine. In the clip, which has drawn lots of commentary on YouTube, Mr. Cramer brags about his ability as a former hedge-fund manager to game the stock market and offers what amounts to a how-to to aspiring stock manipulators, The New York Post reported Tuesday.

In the December interview with the site’s “Wall Street Confidential” Webcast, Mr. Cramer describes at least two strategies, including a way of driving stock futures up or down that he explicitly said was legal. “A lot of times when I was short, I would create a level of activity beforehand that would drive the futures. … It’s a fun game,” he told TheStreet.com’s executive editor, Aaron Task.

But Mr. Cramer spends most of the interview describing a practice called “fomenting,” where a hedge fund manager essentially creates a false impression about a company in order to drive its stock one way or another — which he says is “blatantly illegal,” but adds that “the Securities and Exchange Commission doesn’t understand it.” While he claims this practice is widespread, he never says he has used it himself.

Here’s how fomenting works, according to Mr. Cramer: Say a hedge fund manager is holding a short position — a bet that a stock will decline — in Research in Motion, which has just announced blockbuster quarterly earnings results. An enterprising fund manager might call several brokerage houses and either feed them bad information or order a slew of short sales. Then he or she could call up a “bozo reporter” with a fake news tip about Resarch in Motion rival Palm.

The result, he says, is a perfect storm of bad news that temporarily lowers R.I.M.’s stock price, long enough for the manager to reap a tidy profit. He recommends a similar procedure with Apple (the video was filmed before the company introduced its iPhone at its annual Macworld convention in January).

“These are all the things that you should be doing on a day-to-day basis and if you’re not doing it, maybe you shouldn’t be in the game,” Mr. Cramer tells Mr. Task.

Mr. Cramer sums up his philosophy this way:

What’s important when you are in that hedge fund mode is to not do anything remotely truthful, because the truth is so against your view, that it’s important to create a new truth, to develop a fiction.

Updated March 23: We’ve swapped the link to the video; the previous YouTube link no longer works.

Link to Original Video on TheStreet.com

Yet he is still employed on Bubblevision (CNBC), he still has his own evening program even though CNBC denies endorsement of his statements, and worse, the people on their network like infobabe Maria Bartiromo continue to hold him up in high regard as an “expert” when the sums of money he plays with is beyond the perception of the average individual investor. The so-called “breaking news” these clowns promote are twisted or key facts deliberately omitted to give a different impression as to reality. Let’s perform the “Killer B” exercise using history as an example using the business channel ideal of bovine scattalogical distribution. What if CNBC existed when the HMS Titanic sunk? Would the breaking news be something like:

“Tragic cruise line accident as HMS Titanic hits iceberg! Thankfully 201 first class passengers survived!”

Of course they are not “lying” they are just omitting the key fact that 1496 other people perished, yet that same methodology is how our financial news is reported today. On Friday April 19th, the Bubblevision Network reported Citigroup’s quarterly report was “not as bad as expected” and of course threw in the line “this time they tossed in the kitchen sink.” The part about $14 billion in write downs was gleefully omitted as was mentioning briefly in passing that several thousand more people were being laid off. How anyone in their right mind can promote a quarterly loss as a good thing while there has been no indication for over a year now that these banksters are about to be honest as to the depths of their problems is not only irresponsible it should be criminal! To prove the insanity is just that, let’s go back a little while further to Intel’s report. Back in March, as required, Intel reduced their quarterly earnings expectations from 35 cents per share down to 25 cents per share causing angst within the Bubblevision propaganda department. The Fast Money gang all stewed on their program that this could indicate tech is actually under threat from this “slowdown” or possible recession. Then when Intel reported on April 16th, that they beat expectations by 1 penny, the same group all went nuts saying “wow, the worst is over, they beat expectations” to paraphrase the lunacy. It’s really hard to not beat your own expectations yet these morons on Bubblevision want you to sink your hard earned retirement into an obviously rigged game which is guaranteed for them to never lose by your tax dollars (thank you Ben)!!!!! Before you get excited about one thing coming from the so-called “Financial Press” in this country or any other, I simply point you to some key charts to review and you draw your own conclusions; focus especially on the S&P 500 price level on December 31, 1999 of 1469.25 and April 19th’s closing price of 1390; 9 years almost after the fact, if you had invested in a S&P 500 index based mutual fund, you are still down, and that’s not adjusted for inflation. THINK PEOPLE!!! Quit believing this nonsense and look at who advertises on these networks, in these magazines and especially the daily newspapers. Everyone has an interest in propagating the myth that stocks are now in a perpetual bull market and the idea that bear markets are impossible. Now check out the charts and start to think:

(Chart added with 200 DMA and NOT adjusted for inflation)

Being a historian allows one to keep things in perspective and the last time the 200 Day Moving Average rolled over as in the chart above, well, you can see for yourself what happened.

Of course if that chart does not convince you, let’s refer to some charts that Kevin Depew used from Minyanville.com in his article Five Things You Need to Know: The Point of Recognition published on March 19, 2008 which point out what the S&P 500 looks like priced in other fiat currencies that have not experienced the attack of the Killer B’s….

First the S&P 500 priced in Euros as of the publish date of the article above:

Not so hot. So much for the rallies which appear a tad bit hollow now. So let’s see if this confirms with the S&P priced in Yen:

A bit more tolerable but then again, I can only handle so much Sushi. Let’s pick the currency closer to home, the Canadian Dollar:

Ouch. But that really does not indicate the severe amount of pain that we are trapped in. From another one of my favorite websites, here is the Dow priced in Gold which indicates that the bear market which began in 2000 really has not ended but traded within a channel thanks to inflation:

That’s about all I need to see to realize that inflation has taken a death grip on our markets, the reporting of financial news is akin to getting the location of the Holy Grail from a drunken housewife at ten in the morning while you’re working in your yard and that this game will not continue much longer with the dilution of our currency at the pace we are at. So listen to the Killer BSers of Bubblevision at your own risk and make the research and judgment decisions for your financial future yourself. Which leads me to the final “Killer B” in our story, the banksters.

Baptists have Faith, Banksters Destroy It

Would you buy a used car from this man?

There is a myth that the banking community as a whole only has the best interests of their customers at heart. In reality they are a business and the bottom line is all that matters. Unfortunately we have allowed an arrogant class of banksters to develop a base of power which could threaten the economic well being of the Western world. There is a theory that these clowns propagated over the last six years that by spreading the risk around the world, the impacts of variations in the business cycle would be evenly distributed and the risk distribution would minimize impacts in changes to the climate by keeping them within some carefully constructed formulas or norms. The problem with these calculations and theories is that the “Black Swan” or unexpected event, oh, you know, like a greater percentage of people defaulting on homes they could ever afford (who could have seen that one coming), will distort the results and amplify the crisis, especially when these bozos start to distort the information flow to protect what ill gotten gains they have achieved. No less an investor than Warren Buffett has warned about the games these people play with his “economic weapon of mass destruction” comment referring to the derivatives time bomb, yet the banksters continued to churn out highly leveraged instruments based on another theory, a not so public one.

The “we’re too big to fail” economic theory allowed a diverse group of banks in Europe and North America to create a nightmarish problem in excess of $500 trillion in derivatives (notional values) that if just 10% imploded, it would eviscerate the economies of the West for over a decade and the regulators know it, the politicians know it, but the average citizen who will pay for it is not allowed or too lazy to find out about it. Folks, this is not just a passing storm as some nut cases will have you believe, this is a long term problem and we are just beginning to see the impact. Instead of absorbing a short term politically painful recession before the 2004 elections, the philosophy of over-expansion of the money supply and turning the other cheek in regulatory matters has allowed this new manifest destiny to appear. As the deleveraging process accelerates, which it always does, charts like this one of the Philadelphia Banking Index will tell the tale:

If you think that the roll over in the 200 day moving average on the chart above is any indication, the fear that should make you stand up and pay attention is that we have yet to retest lows unseen in over a decade. As the banksters begin to fail, it should trigger a wave of counterparty risk failures which eventually cause that roll over to turn into a waterfall. And that waterfall will drown the American people and those of Western Europe who smugly think they are immune as they sip their lattes. The banksters would have you believe because there are some that are too big to fail, the taxpayer must bail them out at all costs even if it includes the introduction of hybrid socialism as is practiced in Communist China. This is a dangerous and slippery slope we are progressing down and the idea of income redistribution to be shared in management by a strong central government and bankster community would have had our forefathers in the streets with pitchforks and bonfires ready to rock and roll. Instead we are more concerned with the release of the next video game for the Playstation III or just will the new Apple Iphone have the ability to provide back massages while playing MP3’s back. Folks, you had best wake up. This is a historical crossroads which has every indication that our society will undergo a massive change from top to bottom and unfortunately the bottom half of the citizenry will experience it first and feel it with the greatest amount of pain.

What do you do? As highlighted earlier in this story, call, write, and fax your political reps, or sign petitions like those over at www.tickerforum.org complaining about these abuses of power. It may not help, but it can not hurt. If you are an investor in the markets, complain about the manipulation to the SEC as much as you can within legal limits. But at the same time, I would hunker down expecting the worst and praying for the best. Right now there is a smokescreen being deployed and the election can not come fast enough for the elites to confuse and distract the critical eye cast now on the financial markets. This system, our political and economic one, needs some disinfectant. Or as this editorial is trying to drive home, one hell of a lot of bug spray. We must stop this game now and get rid of the “Killer B’s” and their control over our future. Otherwise, the complaints you hear in the near future might be your own. And the “B” stings this nightmare could inflict will leave you a debt ridden collapsed pile of Jello for the rest of your adult life.

Permalink