Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Thursday, December 01, 2011

Hinde Capital: Future "transfer[s] of gold will take place at much higher prices"

Remember when Anthony 'Tweet My' Weiner was attacking legitimate gold retailers like Goldline?

He said it was because they were allegedly ripping off consumers, but the real reason was to silence popular conservative pundits like Mark Levin and Glenn Beck by intimidating their advertisers. Stalin-esque, eh?

So how's that $700/oz. gold look now, Weiner?

Because gold's tracking over $1,700/oz., there's an argument to be made that it's risen too far, too fast.

That doesn't appear to be Hilde Capital's opinion, however:

GOLD ADOPTION RATES LOW


Gold investor holdings stands at $2.0 trillion (Nov 2011), 0.96% of Global Financial Assets (GFA). In 2000 gold holdings were worth $227 billion, or 0.2% of GFA, but this isn’t the whole story...

• Today 0.2% would be worth $1.45 trillion ($1800 troy oz. Au) or 0.7% of Global Financial Assets (GFA).
• Therefore new investment gold only provided 0.26% increase in % gold holdings.
• In 1968 to 1970 % gold holdings of GFA = 5%, to attain this % at current values of gold ($1,800), $10.4 trillion dollars need to be invested...
• $10.4 trillion is equivalent to 5.8 billion troy oz at $1,800 or 1.2 x gold ever produced.
• 5.8 billion troy oz. is 3.6 x known gold reserves (based on US Geological Survey).
• Clearly not only is public ownership miniscule, but to return to the 70s % holdings requires too much gold than these prices can handle.
• This transfer of gold will take place at much higher prices.

From their lips to Bernanke's ear.


Wednesday, November 30, 2011

Compare-and-contrast the Obama agenda with Karl Marx's 10-point program of Communism

According to Karl Marx, the following ten elements were requisite conditions for "a transition from capitalism to communism."

1. Abolition of property in land and application of all rents of land to public purposes. Washington Examiner: The great Obama land grab: "White House officials have been meeting quietly with environmental groups to map out government plans for acquiring untold millions of acres of both public and private land... The federal government, as the memo boasted, is the nation's 'largest land manager.' It already owns roughly one of every three acres in the United States... This is apparently not enough."

2. A heavy progressive or graduated income tax. National Taxpayer Union: The top 1% of taxpayers already pay 40% of all income taxes. The top 5% pay 61% of all income taxes. And the top 25% pay 87%. The bottom 50% pay 3% of all income taxes. And Democrats want more from entrepreneurs: "Democrats seek a new 'Millionaire's Tax'."

3. Abolition of all right of inheritance. Idaho Statesman: "Sen. Mike Crapo, R-Idaho [is] writing an estate tax bill that would help family farms remain in family hands... Thanks, Sen. Crapo, for helping pen something that truly helps rural [Americans]."

4. Confiscation of the property of all emigrants [those leaving the country] and rebels. New York Post: The President's new jobs-killer: "...President Obama explicitly targeted ... industry for two massive tax hikes. First, he'd ban oil and gas companies from using the 'Section 199' tax credit, a measure for domestic manufacturers enacted in 2004 to boost US employment... Second, he wants to end 'dual capacity' protection for US energy firms... Without this shield against double taxation on foreign revenues, American companies would be competing on an uneven global playing field... Yet, by the federal government's own economic model, these tax hikes would lead to huge, immediate job losses."

5. Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly. New York Post: Democrats, Fannie Mae still issuing subprime loans, even after meltdown. Politics Daily: "Obama's Risky Plan: Government Takeover of the Student Loan Business." And New American: "$5 Debit Card Fee: Don't Blame Banks — but Durbin, Dodd, Frank, the Fed."

6. Centralisation of the means of communication and transport in the hands of the State. Tom's Hardware: "Bill Allows Obama Power to Shut Down Internet." And "Advertisers on talk radio targeted by Congressional investigations." And "In an exclusive interview with Rolling Stone Magazine, President Obama made the extraordinary claim that Fox News is 'destructive to [America's] long-term growth.'."

7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan. National Legal and Policy Center: "Obama Arranges Takeover of GM and Chrysler; Auto Workers Union Gets Huge Stake." And Discover: "New EPA Rules Clamp Down on Mountaintop Removal Coal Mining." And "Obama shuts down Keystone XL pipeline, says no to 20,000 jobs." And News 9 Oklahoma: "EPA to Crack Down on Farm Dust."

8. Equal liability of all to labour. Establishment of industrial armies, especially for agriculture. Wall Street Journal: "SEIU’s Stern Tops White House Visitor List." And The Blaze: "Obama’s OFA, Churches Join Democratic Socialists for Saturday March in Washington."

9. Combination of agriculture with manufacturing industries; gradual abolition of the distinction between town and country, by a more equitable distribution of the population over the country. Heritage: "The Clean Water Restoration Act Means Troubled Waters For Property Owners": "...The Waxman-Markey global warming bill is far and away the most worrisome environmental measure currently working its way through Congress, but it is certainly not the only cause for concern... S. 787, the Clean Water Restoration Act (CWRA)... would do much more harm than good, especially for farmers, ranchers, developers, energy producers, and other property owners."

10. Free education for all children in public schools. Abolition of children's factory labour in its present form. Combination of education with industrial production.: New York Sun: "Obama Tells Teachers Union He Opposes Vouchers." And Big Hollywood: "[Teachers' Union] NEA: Obama’s Ministry of Propaganda."

* * * * * * * * *

No federal government has damaged the American free market more than this one. No federal government has stolen more employment, more freedom, more private property -- from this and future generations -- than this one. No government has created more regulations, more unconstitutional dictates, more -- dare I say it -- indentured servitude than this one.

Now, given all of these facts: can there be any doubt what Barack Obama meant when he twice proposed, "a civilian national security force that's just as powerful, just as strong, just as well-funded" as our military?

The Obama-Democrat Left has mounted the first successful counter-revolution -- against the American Revolution -- in our history. Using an incessant series of attacks by a fifth column, the intent of the counter-revolution is to eradicate the effects of the American Revolution. The most magnificent society ever created hangs in the balance.


Next November represents our last chance to salvage the American experiment.

Marshal your parents, your children, your siblings, your neighbors, your coworkers -- marshal everyone you know, because the stakes could not be higher.


Update:
The Obama Temptation by Mark R. Levin: Corner (11/3/2008)
Barack Obama, Fabian Socialist: Forbes (11/3/2008)


Hat tip: Mark Levin.

Tuesday, November 29, 2011

It's official: we're in the midst of Jimmy Carter's second term

Welcome back, Carter! Does this scene look familiar?

Regarding Iran, remember when then-presidential candidate Obama's website read as follows: "Obama is the only major candidate who supports tough, direct presidential diplomacy with Iran without preconditions"?

That kind of tough talk really showed the Mullahs, eh?

In related news, I believe I've come up with an excellent proxy for the level of economic distress felt around the world thanks to our feckless Democrat leaders. I call it O-FAIL, which stands for the Obama Financial Anxiety Index Level™.

O-FAIL takes all of the world's instability, hysteria, deficit spending, money printing, fears of energy disruption, terrorism and war -- and encapsulates them into a single, easy-to-understand number.

The higher O-FAIL gets, the worse things are around the world. Check out the O-FAIL index. You can see that over the past couple of years, immediately after the election of Barack Obama, it began going parabolic.

O-FAIL is also known as the price of gold.

The last time it was this high, in inflation-adjusted terms, one James Earl Carter was President.

Carter's second term -- confirmed.


Update: SCOAMF's Gallup Job Approval Falls Below Carter's!

Monday, November 28, 2011

Mission Accomplished! America's Job Market Begins to Resemble Europe's

Excellent charts from the Wall Street Journal's graphics feed (@WSJgraphics):

As the U.S. tries to dodge Europe's debt crisis, the job market is starting to look a lot like Europe's.


Which is the point, I suppose.


More media myths shattered: #OWS 'income inequality' scam exposed

Democrats, the media and Marxists hardest hit. But I repeat myself. Jim Pethokoukis explains:

The core argument of the Occupy movement and its Obamacrat friends is this: The rich stole all the money. That explains why over the past four decades, the income of the broad American middle class supposedly has stagnated even as the economy expanded. Why? Did you forget already? The rich stole all the money. And now it’s time to take it back...

...From 1975-2009, real per capita GDP increased by 90 percent vs. 17 percent growth in real median household income, as measured by the Census Bureau. What happened? Again, the rich stole all the money. Yet if you make a couple simple adjustment for household size and a more accurate inflation measure, a different picture emerges, as Sanandaji illustrates:

Let’s sum up. Income inequality may have increased in recent decades, but a stagnating middle class has not been the result. And the 1 percent didn’t steal all the money.

This is but a snippet. Read the whole thing.


Say, Anyone Know How President Obama's Mortgage Modification and Home-Buyer Tax Incentive Programs Worked Out?

Answer: Just as well as the Stimulus, Cash-for-Clunkers, "green jobs" programs and the rest of the President's exercises in central planning. Which is to say: it's another Obama record!

Today's new annualized home sales print was 307k, below expectations of 315k (yet oddly better than last month's downward revised which moved from 313k to 303k, wink wink nudge nudge Census bureau). This is not to be confused with the actual number of houses sold which came at a whopping 25k, and the third month in a row in which under 500 homes sold in the over $750,000 category.

Yet the most notable data point was the average new house sale price which dropped to $242,300. This is the lowest price since 2003! Something tells us that an MBS LSAP [Ed: i.e., monetization of securitized mortgage debt by the Fed] is pretty much guaranteed at this point.

And I simply adore the shrill shrieks of the drones when confronted with these increasingly dire statistics after three years under the Obama regime. They follow the same general template:

"After eight years of Bush (please note the heart-wrenching affliction -- that all drones suffer -- of Bush Tourette's Syndrome, even after all these years), what d'ya expect? It would'a been worse if he hadn't a'done it!"


Really, drones?

May I then refer you to One Chart to Rule Them All? This is a joint product of The New York Times and The Los Angeles Times, which patiently explains to even the most radicalized Leftist how the mortgage crisis began. Enjoy, miscreants!


Saturday, November 26, 2011

Circle Quirk: how the EPA takes your money, gives it to the eco-Marxist Left, which then uses it to sue... the EPA

Item 1: EPA sued over unenforced ozone standards


...In a suit filed Tuesday in U.S. District Court in San Francisco, the environmental group [WildEarth Guardians] said the Clean Air Act requires the Environmental Protection Agency to adopt regulations by March 2010 requiring states to meet the new ozone levels... Because of the EPA's inaction, air quality is still measured by weaker standards enacted in 1997, the suit said.

...WildEarth Guardians has about 5,000 members, mostly in the Southwest, and is based in Santa Fe... The EPA did not respond to a request for comment on the suit.

Item 2: WildEarth Guardians Annual Report 2010 (PDF)


...WildEarth Guardians’ goal has been and continues to be simple: To help clean energy take root by exposing the true cost of fossil fuels.

• Filed lawsuits to overturn billions of tons of new coal mining in the nation’s largest coal producing region, the Powder River Basin of Wyoming.
• Brought pressure to bear against the region’s largest coal-fired power plants, including New Mexico’s San Juan Generating Station and Four Corners Power Plant, two of the largest coal-fired power plants in the American West.
• Applied pressure until Xcel Energy committed to retiring four coal-fired power plants in Colorado.
• Halted 41,000 acres of oil and gas drilling in Montana.
• Successfully pressured the Environmental Protection Agency to adopt the first-ever rules to limit greenhouse gas emissions from industrial sources of air pollution.
• Filed first-ever lawsuit challenging global warming impacts of coal mining in Wyoming’s Powder River Basin.

Item 3: Public Sources of Funding for WildEarth Guardians (PDF)


Major Contributors

make our work possible from January 1 - December 31, 2010.

GOVERNMENT GRANTS
City of Santa Fe
NM Enviromental Department
Santa Fe County
US Environmental Protection Agency
US Fish and Wildlife Service
US Forest Service

Item 4: The Executive Summary


The federal government, already spending more than a trillion dollars every year that it doesn't have, is devoting substantial funds to groups like "WildEarth Guardians" so they can sue... the federal government.

Oh, but there's nothing to cut -- right, liberals?

Think about it. The EPA takes your money -- without your permission, mind you -- and then redistributes it to the flat-earth, no growth, anti-civilization eco-Marxists. The flat-earthers then use your money to turn around and sue the federal government! And, at this point, the federal government steals more of your money to "defend" against these insane, self-flagellating lawsuits and hire more bureaucrats!

The federal government already owns nearly a third of all land in the country. And these enemies of humanity want still more, so they can continue to kill hundreds of thousands of jobs and continue their mission to turn America into a centrally-planned, socialist-style, agrarian, third-world country.

Consider: the U.S. is the only country in the world that restricts access to its own vast treasure troves of energy.

If this kind of insanity doesn't make you scream in anger, then -- I'm sorry -- you're simply not paying attention.

2012 is coming. And it's high time we nuke these bureaucracies' budgets from orbit. It's the only way to be sure.


Related: Genocide in Green

One Chart to Rule Them All

Before you click to enbiggen the chart (below), please consider this Los Angeles Times article by Ronald Brownstein, which appeared in print on page A-5 of the May 31st, 1999 morning edition.

"It’s one of the hidden success stories of the Clinton era. In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. The number of African Americans owning their own home is now increasing nearly three times as fast as the number of whites; the number of Latino homeowners is growing nearly five times as fast as that of whites.

These numbers are dramatic enough to deserve more detail. When President Clinton took office in 1993, 42% of African Americans and 39% of Latinos owned their own home. By this spring, those figures had jumped to 46.9% of blacks and 46.2% of Latinos.

That’s a lot of new picket fences. Since 1994, when the numbers really took off, the number of black and Latino homeowners has increased by 2 million. In all, the minority homeownership rate is on track to increase more in the 1990s than in any decade this century except the 1940s, when minorities joined in the wartime surge out of the Depression.

This trend is good news on many fronts. Homeownership stabilizes neighborhoods and even families. Housing scholar William C. Apgar, now an assistant secretary of Housing and Urban Development, says that research shows homeowners are more likely than renters to participate in their community. The children of homeowners even tend to perform better in school. Most significantly, increased homeownership allows minority families, who have accumulated far less wealth than whites, to amass assets and transmit them to future generations.

What explains the surge? The answer starts with the economy. Historically low rates of minority unemployment have created a larger pool of qualified buyers. And the lowest interest rates in years have made homes more affordable for white and minority buyers alike.

But the economy isn’t the whole story. As HUD Secretary Andrew Cuomo says: “There have been points in the past when the economy has done well but minority homeownership has not increased proportionally.” Case in point: Despite generally good times in the 1980s, homeownership among blacks and Latinos actually declined slightly, while rising slightly among whites.

All of this suggests that Clinton’s efforts to increase minority access to loans and capital also have spurred this decade’s gains. Under Clinton, bank regulators have breathed the first real life into enforcement of the Community Reinvestment Act, a 20-year-old statute meant to combat “redlining” by requiring banks to serve their low-income communities. The administration also has sent a clear message by stiffening enforcement of the fair housing and fair lending laws. The bottom line: Between 1993 and 1997, home loans grew by 72% to blacks and by 45% to Latinos, far faster than the total growth rate.

Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more.

In 1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains. It has aimed extensive advertising campaigns at minorities that explain how to buy a home and opened three dozen local offices to encourage lenders to serve these markets. Most importantly, Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income. That’s made banks willing to lend to lower-income families they once might have rejected.

But for all that progress, the black and Latino homeownership rates, at about 46%, still significantly trail the white rate, which is nearing 73%. Much of that difference represents structural social disparities–in education levels, wealth and the percentage of single-parent families–that will only change slowly. Still, Apgar says, HUD’s analysis suggests there are enough qualified buyers to move the minority homeownership rate into the mid-50% range. [Ed: brilliant.]

...But with discrimination in the banking system not yet eradicated, maintaining the momentum of the 1990s will also require a continuing nudge from Washington. One key is to defend the Community Reinvestment Act, which the Senate shortsightedly voted to retrench recently. Clinton has threatened a veto if the House concurs.

The top priority may be to ask more of Fannie Mae and Freddie Mac. The two companies are now required to devote 42% of their portfolios to loans for low- and moderate-income borrowers; HUD, which has the authority to set the targets, is poised to propose an increase this summer... Barry Zigas, who heads Fannie Mae’s low-income efforts, is undoubtedly correct when he argues, “There is obviously a limit beyond which [we] can’t push [the banks] to produce.” But with the housing market still sizzling, minority unemployment down and Fannie Mae enjoying record profits (over $3.4 billion last year), it doesn’t appear that the limit has been reached.

The breathless mainstream media and the race-obsessed Democrat Party hyped the kind of no-documentation, loosely underwritten loan that formed the core of the housing crisis.

In July of 2009, according to The New York Times, Andrew Cuomo's Department of Housing and Urban Development mandated that half of all loans purchased by Fannie Mae and Freddie Mac were to have originated with low- and moderate-income borrowers. In 1998, 44% of all Fannie loans had already met those criteria.

Consider the chart in that context.

On the way: more central planning, more social engineering, more Democrat-inspired disasters, but this time with your health care, not just your home.


The ancestor of #OWS: "The Other 95%", a Democrat propaganda arm

The birth of Occupy Wall Street's "99 percenters" may have occurred early in 2010. It was then that a group called "The Other 95%" came into being. The group was funded by Democrats and appeared explicitly designed to counter the Tea Party movement.

And the group also fit a template for propaganda marketed by a man named Cass Sunstein. Sunstein, Barack Obama's 'Regulatory Czar', has a long history of left-wing advocacy. Unfortunately for Americans, it's for the kind of Statism that would make Mussolini cringe. Sunstein, among other egregious activities, supports the establishment of government propaganda ministries.

Writing on January 15, 2010, Glenn Greenwald at Salon noted Barack Obama’s new head of the Office of Information and Regulatory Affairs, Cass Sunstein, had championed creating fake websites and using outside 501(c)(3) interest groups to act as alleged independent champions of government policy and to “cognitively infiltrate” opposition websites, etc...

Sunstein advocates that the Government’s stealth infiltration should be accomplished by sending covert agents into “chat rooms, online social networks, or even real-space groups.” He also proposes that the Government make secret payments to so-called “independent” credible voices to bolster the Government’s messaging

These tactics may explain websites like The Other 95, which itself was a thinly veiled propaganda site hawking White House talking points. Some would call it astroturf.

Why this sort of site was needed, when Democrats already have The New York Times, is a question for the DNC. Or its contributors, who appear happy to throw money into a sinkhole.

In 2010, RedState's Erick Erickson reported the website designer was affiliated with MoveOn.org and other Soros-controlled groups. You know, grassroots.

Let’s also remember that Center for American Progress, led by Obama’s transition team director John Podesta, has regular 8 a.m. phone calls to coordinate activity on the left.

It’s a play right out of Lenin’s handbook, forget Alinsky, to call the authentic “inauthentic” and then create something inauthentic demanding it be called “authentic.”

We would do well to consider the probable genesis of "The Other 99%": it's as genuine a pro-America movement as astroturf is real grass.


Friday, November 25, 2011

Found Video: Milton Friedman Obliterates the Communist Shrew Frances Fox Piven

I had no idea that Milton Friedman and Thomas Sowell once publicly battled Leftists like Frances Fox Piven in a televised debate. Which explains my surprise in happening upon this video.

Piven, for those unaware of her despicable background, was one of the authors of the "Cloward-Piven Strategy". Put simply, Piven helped create an architecture for collapsing capitalistic economic systems through the exploitation of their social welfare systems.

It is this strategy that many astute observers believe that Barack Obama is executing as he follows through on his promise to "fundamentally transform" America.


Fortune 500 companies come and go -- it's the federal government that never shrinks

Professor Mark J. Perry points us to some fascinating historical data concerning corporations, the amorphous collections of individuals so often demonized by the Left.

What do the companies in these three groups have in common?

Group A. American Motors, Studebaker, Detroit Steel, Maytag and National Sugar Refining.

Group B. Boeing, Campbell Soup, Deere, IBM and Whirlpool.

Group C. Cisco, eBay, McDonald's, Microsoft and Yahoo.

All the companies in Group A were in the Fortune 500 in 1955, but not in 2011.

All the companies in Group B were in the Fortune 500 in both 1955 and 2011.

All the companies in Group C were in the Fortune 500 in 2011, but not 1955.

Comparing the Fortune 500 companies in 1955 and 2011, there are only 67 companies that appear in both lists. In other words, only 13.4% of the Fortune 500 companies in 1955 were still on the list 56 years later in 2011, and almost 87% of the companies have either gone bankrupt, merged, gone private, or still exist but have fallen from the top Fortune 500 companies (ranked by gross revenue).

Perry notes that the cause is creative destruction -- the continual economic upheaval necessary for the advancement of humankind. Yes, these changes include ATMs and automated car washes, which certain politicians believe cause unemployment.

What Perry doesn't say is that over the same period of time, the federal government has swallowed more and more of the private sector. Through its unelected fourth branch of government -- the federal bureaucracies -- its agencies, offices, bureaus, czars, departments, committees, and countless other groups have spewed forth millions of pages of regulations, all with the force of law.

For those who demonize corporations, I ask you to consider:

• It is the U.S. government, not a corporation, that is the most powerful monopoly on the planet, for it is the largest insurer, guarantor, pension provider, banker, health care system, debtor, etc.

• It is the U.S. government, not a corporation, that grows always larger -- never shrinking -- as temporary politicians attempt to construct a Utopian society that never was and never can be.

• It is the U.S. government, not a corporation, that constantly seeks to evade the laws, the bonds and constraints placed upon it by the Constitution.

• It is the U.S. government, not a corporation, that has the ability to imprison, to punish, to fine under force of law, almost always for the sole purpose of growing larger and confiscating more and more private property.

Those on the Left would do well to consider the government as the world's largest, most powerful corporation. And now that it has breached the firewalls of the Constitution, it is a corporation on the road to total control over its citizens. In fact, some would call it tyranny.


Image: AdClassix.

Thursday, November 24, 2011

While America Gave Thanks, the Fat Lady Sang in the Eurozone

Contagion continued to rake the Eurozone today, reflected in 10-year bond yields and elsewhere:

...we thought we would once again remind readers just what the very simple math behind the entire spectacle is, which Europe tries so hard to ignore with each passing day. Because at the end of the day it is a very simple tension: there is massive demand for fresh cash in the form of 1.7 EUR trillion in maturing debt (ignoring interest payments)...

Of this Morgan Stanley says, "Policy makers and investors have consistently underestimated the bank funding roll as a transmission mechanism of sovereign fears into the banks and real economy."

...[The rollover funding crunch] is precisely what Europe is now fighting each and every day with, coming up with crazier and crazier plans to mask the fact that no matter what, there simply is not enough cash...

...Because while the [above] chart shows cash demand needs, the ... one [below] shows that when it comes to cash 'supply', or said otherwise issuance of unsecured debt, the market is now completely and totally dead. Indeed, November issuance is just laughable as the red-boxed region so vividly demonstrates.

...And that, in two charts is that - everything else is hype, rhetoric, smoke and mirrors.

Or, in terms even progressives can understand, it's Game Over for the grand European Democrat Social Welfare State™ experiment they desperately tried to make America emulate for lo these many decades.


Wednesday, November 23, 2011

Ode to the Welfare State, 1949 [Papa B]

Papa B:


Related: Welfare Kills.

Brother, can you spare $2.1 trillion? Eurozone needs a cash infusion "ten times bigger than TARP"

The head of the Carlyle Group, Oliver Sarkozy, just left CNBC's cheerleaders aghast as he described the scale of the Eurozone crisis.

The math I'm working with is very simple.

In the U.S. banking sector, we had $3 trillion of wholesale funding that needed to be stabilized, got stabilized by the implementation of TARP which saw the U.S. treasury buy $212 billion worth of preferred in the banking sector to stabilize that $3 trillion, give our banks the time to work through their problem their problem assets.

In Europe, that $3 trillion is $30 trillion. So if you multiply the $212 by ten, you get the $2.12 trillion. In my view, the issues on the European banks are bigger than the issues on the books of the US banks. So if you want to stabilize that $30 trillion and in my view it's not that you want to, it's that you have to, you do not have a choice, you're going to have to be at least at $2.1 trillion and I suspect it may need to be more.

In other words, the Eurozone needs a cash infusion that is ten times the size of TARP*.

I'll check the couch to see if there's a spare $2.1 trillion that fell under the cushions.

* Pssst: hey, liberals -- Europe's imploding model is one your heroes Barack Obama and Paul Krugman keep trying to emulate. Hint: it don't work.

Barack Obama, Emperor of Insolvency

The lede in today's coverage of the U.S. deficit struggle ("Obama reopens debate on US stimulus") at the Financial Times is troubling on two fronts.

Barack Obama sought to reignite the debate over an ­economic stimulus package on Tuesday, demanding that a bitterly divided Congress pass an extension of payroll tax cuts before the end of the year.

“We still have to give the economy the jolt that it needs,” the US president said on the campaign trail in New Hampshire, a day after a bipartisan committee failed to agree on a $1,200bn deficit reduction package. He added he would do “everything in his power, with or without Congress”.

Consider:

• Fact: the "payroll tax cuts" simply accelerate the collapse of the Social Security system

• And what kind of president talks about operating "without Congress"?

Our beloved Dictator-in-Chief knows that America is insolvent, that Social Security is headed for collapse, and that Obamacare simply hastens the implosion.

But, some believe that was the plan all along.


Tuesday, November 22, 2011

Weird coincidence: Obama bundler Corzine got a range of regulatory "gifts" before his firm collapsed

Losses from the collapse of MF Global, John Corzine's trading firm, may be double the original estimate -- totaling a cool $1.2 billion.

In the wake of this disclosure, Janet Tavakoli, president of Tavakoli Structured Finance, offers some fascinating forensic details that implicate not only Corzine, but Washington's culture of crony capitalism.

When MF Global collapsed on October 21, it was the biggest financial firm to collapse since Lehman in September 2008. Then Chairman and CEO Jon Corzine is connected to the head of one of his key regulators, the Commodity Futures Trading Commission (CFTC), through his former protégé at Goldman Sachs, Gary Gensler. He also knows the Fed’s William Dudley, a key member of the Fed’s Open Market Committee, from their days at Goldman Sachs. The Fed approved MF Global’s status as a primary dealer, a participant in the Fed’s Open Market Operations, just before Jon Corzine took its helm and beached it on a reef called leveraged credit risk...

...MF Global’s officers admitted to federal regulators that before the collapse, the firm diverted cash from customers’ accounts that were supposed to be segregated...

...MF Global reportedly employed 35:1 leverage—some reports are 40:1—against a portfolio comprised around 20% of European Sovereign risks including Belgium, Italy, Spain, Portugal, and Ireland... MF Global was so thinly capitalized that this trade alone could eat up half of its capital... From a risk management point of view, examiners have to consider the very strong possibility that MF Global had several negative equity days throughout 2011... How did MF Global meet margin calls throughout 2011? It seems an investigation into money flows throughout 2011 is in order.

...[Obama supporter] Jon Corzine resigned as Chairman and CEO of MF Global on November 4, just days after the October 31 bankruptcy announcement... The Financial Industry Regulatory Authority Inc. (FINRA) [had given] Jon Corzine a waiver from his Series 7 and Series 24 exams when he took the helm of MF Global in March 2010...

...The test waiver by regulators seems to be blatant cronyism, because Corzine not only hadn’t been involved in the day-to-day markets for more than a decade, his responsibilities at MF Global included active decision making. The waiver wasn’t justified. Corzine reportedly authored the strategy for the MF Global killing trades,
and he also had authority on the trading floor...

...MF Global’s financials were shaky ever since Man Group spun it off in 2005 and saddled it with a lot of debt. Yet MF Global was added to the Fed’s list of 22 primary dealers in February 2011, just before former Goldman CEO Jon Corzine officially came on board. Primary dealers buy and sell U.S. treasuries at auction and are a counterparty to the Fed’s Open Market operations...

...Why did the Fed award prestigious primary dealer status to a shaky operation like MF Global, an entity it does not regulate?

...In August, customers started pulling billions of dollars out of their segregated accounts with MF Global. It was the biggest outflow of funds since January 2009 [and] it is likely that employees within MF Global were well aware of the problems and tipped off key customers.

Yet Gary Gensler, head of the CFTC, did not investigate or begin transferring accounts out of MF Global before the bankruptcy, and that is unprecedented for the CFTC. Given that Gary Gensler was a protégé of Jon Corzine at Goldman Sachs, one should question why Gary Gensler didn’t act...

...[Because of the collapse of MF Global, c]onfidence in the futures market has been shaken. No one knows if their money is safe, but what is more disturbing is the appearance of crony capitalism once again giving favored treatment, lax regulation, and absent oversight to a crony capitalist that abused all of these perks to blow up a large financial firm and damage a key global market.

John Corzine is one of Barack Obama's top 2012 fundraisers, having raised over $500,000.

In short:

• FINRA waived licensing requirements for Corzine

• No one is saying how MFG received a lucrative primary dealer designation

• And, despite numerous red flags, the CFTC didn't act in time to prevent an implosion

All right-thinking Americans, irrespective of party, should reject this kind of lawless crony capitalism. The time has come to throw out all of these bums and to replace them with Constitutional conservatives.

And then we prosecute.


Contagion

Today's 10-year yields for the sovereign debt of the PIIGS (Portugal, Ireland, Italy, Greece and Spain) confirm that Europe's debt crisis has spiraled out of control.

The can-kicking appears to have come to an end:

The time has come to confront an ugly truth: The possibility that the Eurozone will break up, or rather fall apart, is growing increasingly likely.

In fact, I'd say given recent developments in Italy the probability of a breakup is as high as 40%... [and] a Eurozone split would be bad news - no matter which way it happened.

Germany would survive an orderly breakup and do well in a tight-money default, but fare poorly in a period of hyperinflation. Conversely non-Eurozone Eastern Europe would do well in an orderly breakup and survive hyperinflation, but it would be battered by a tight-money default.

At the end of the day there are no easy answers on this one. The best you can do is to find markets with little economic connection to Europe - and even that's not easy.

The Eurozone is dead, whether or not the coroner has been called.


Monday, November 21, 2011

Hilarity in the White House Press Room: European Reporter Rips Obamaconomy for "Worse than Eurozone" Debt Levels

Today, as the Eurozone melted down in a debt-fueled replay of the 2008 Lehman crisis, a curious scene unfolded in the White House press room.

In an apparent suggestion of United States hypocrisy on debt issues, a journalist in the German media challenged White House Press Secretary Jay Carney on the role of the United States in responding to the European debt crisis.

"The U.S., as far as I know, has a worse debt-to-GDP ratio than the whole eurozone, and we are talking about the eurozone, not about the United States and that Congress can't get its act together," said a member of the German press during the briefing. "So from the European perspective, it seems that this country is in a bigger mess than Europe.  We are not proud where we are.  We know that it's slow and not bold, and so on, but at least they are doing something; they are deciding something, they're trying to pull that through.  And here, nothing is happening -- third time this year," he added, referring to the Supercommittee failure.

..."I don't think it's helpful to get into which side of the Atlantic handles its problems better or worse," Carney responded. "I think each side needs to -- we need to act and the Congress needs to act, this country needs to act.  And obviously, as I just discussed in answer to a question earlier, the Europeans need to move forward with rapid implementation of their plans."

That answer, with its recommendation regarding European action, did not seem to satisfy Carney's interlocutor, who began to ask "do you have [any] understanding -- the feeling in the eurozone, I said, it’s not really a time where the U.S. is in a position to give advice to Europe."

The debt ceiling debacle. The "debt commission", ignored by the very man who created it. The continuing resolution collapse. The bogus balanced-budget amendment.

Every single effort to contain the devastating federal spending addiction has been opposed not only by the Marxist left, but by John Boehner, Eric Cantor and the rest of the big government RINOs.

As Michelle Malkin puts it, "The disease [is e]ntrenched incumbency. The cure? Fresh fiscal conservative blood. Remember in November."


Weird: job growth consistently higher in right-to-work states

Why, this must be some sort of strange coincidence:

Currently, the U.S. has 22 right-to-work states. All of them are in the South, West, and Central Midwest. During the past 15 years, these states have collectively outperformed the rest of the nation to an almost embarrassing degree:

• “From 1995 to 2005, incomes of residents in right-to-work states grew by 142 percent more than the incomes of Ohioans,” and “private-sector job growth was 500% greater.”

• After passing right-to-work legislation in 1986 and 2001, respectively, Idaho and Oklahoma both experienced explosive growth in their economies and overall employment.

• An after-tax dollar earned in a right-to-work state has more real purchasing power than it does in other states, “because union labor tends to raise (the) costs of goods and services.”

I took a look at economic growth in the individual states during the past decade as measured by gross domestic product (GDP). What I found also shows that right-to-work states clearly outperformed the others [see table at right]...

...2001-2010 economic growth weighted by average population in all right-to-work states was 21.7%; in the rest of the states and the District of Columbia, it was only 13.6%. During the past thirty years, the tremendous leads in per-capita GDP industrial states like Ohio and Michigan once had over the right-to-work states have mostly and in a few cases entirely evaporated.

Wealthy union bosses like Dick Trumka proudly proclaim their hatred of capitalism and their desire to push America into a Soviet-style, socialistic economy.

Furthermore, union leadership has aligned itself with the environmental, flat-earth, no-growth "green" movement that has dedicated itself to the de-industrialization of America. Labor bosses support -- of all things -- the EPA, which is gutting energy exploration, pipeline construction, the drilling business, the mining industry, all power generation facilities, refinery construction, and the like.

Put simply, in their rapacious quest for power, union bosses have thrown their members to the wolves.

At some point in the very near future, union members are going to rise up against their bosses -- who have aligned with far Left Marxists -- to destroy the economy and all of their members' jobs. A good start will be voting to pink-slip the top union boss, one Barack H. Obama in 2012.