Once upon a time...

Time for bed son.

But you promised me a story Daddy!

Yes I did…

There once was a country called America.

It was started by a bunch of rich white guys who were upset about their taxes.

Eventually they became the most powerful country in the world when the rest of the powerful countries darn near destroyed themselves.

The rich and powerful Americans saw a lot of opportunity to plunder the planet. They stopped a lot of other countries from developing self-sufficiency through either war or debt. Their wars were fought to make the other peoples free. The debt was created to make the other peoples prosperous.

It was called free market capitalism and democracy and it was good.

But then there was a war that America lost. The war was very expensive and the American people didn’t approve of it.

So rich and powerful Americans had to change the way they used war and debt to plunder.

They started to use debt to make their own people more prosperous and to make wars less messy.

But the wars were very expensive and their prosperous people became more and more indebted to their prosperity.

Prosperity got out of control and the free market crashed.

So the rich and powerful Americans created more debt and launched more wars.

But the free market crashed again.

So the rich and powerful Americans decided that the free market had to be abandoned in order to save it. They created all the debt they could in order to protect their riches and their power. Eventually they couldn’t afford the wars. Eventually they couldn’t afford the debt.

The people became very upset.

And a bunch of rich folks, not just, but mostly, white men (guess that’s progress!), became very very upset about their taxes.

THE END.

Is that all Daddy?

What happened to America?

Well son, that’s exactly what folks began to ask themselves.

But the real America was less of a place than an ideal and lots of folks in lots of other countries aspired to that same ideal.

So America went global as did their prosperity. And although times in the old country might be hard right now at least we have a chance to pursue the American dream.

Now it’s time to go to sleep son you need to be well rested for your exam tomorrow if you want to join the cadre.

Sweet dreams.

To each according to their eligibility... for each according to their greed.

You got no time for the messenger,
got no regard for the thing that you don't understand,
you got no fear of the underdog,
that's why you will not survive!
-Billy Joel


The Oracle at Eccles will bless us mere surplus eaters with transparency this week er scratch that will bless us with unveiling the latest in a series of Jedi mind tricks.

‘You don’t need to see our collateral.’

‘This is not the monetization that you are looking for.’

‘Go about your recovery.’

‘Move along.’

After all it can’t be monetization if it is only temporary unlike death and taxes which unless we apply some semblance of egalitarianism to the latter will result in the economic forecast, the least for the most, of the former.

And golly don’t expect us to keep track of the collateral folks, seriously we’re still using Windows 95. And it is hard to get that stuff onto floppies. Would you care for a nice game of Pong?

But let us all raise our liquidity chalices Nancy Capitalists to the Glee-shaped Recovery! Let us cheer the depreciating scrip and the magnificence of America’s wealth exporting machine!

Nothin’ but blue skies…. waitaminnit…

Thefiscaltimes.com: ‘According to the Census Bureau households paid $2.2 trillion in taxes in 2010 and received $2.3 trillion in some kind of government support. 59% of the 309 million Americans in this country got at least one federal benefit in 2009 according to the Census Bureau. Government cash handouts accounted for 79% of household growth since 2007.’

All this whilst wealth inequality is approaching levels last seen since, gee I don't know, the Tyler's Rebellion of 1381?

No wonder 84% want no change to Medicare. No wonder a majority favor increased spending over decreased spending. In fact the only majority for decreased spending is for foreign aid (YouGov poll). McClatchey-Marist recently reported that almost 70% oppose raising the federal debt limit - however 80 percent, including 70% of the teabaggers, oppose cutting Medicare or Medicaid to deal with the budget deficit. Good luck with that.

Where you sit is where you stand.

But you are going to need to stand for something America lest you fall for anything.

Perhaps it is appropriate that a narcissistic, egomanic, borderline pathological, deadbeat shill is at the top of the leader board in the Republican sweepstakes.

Every day in every way this s#$ is starting to resemble a bad science fiction movie from the 70s.

Let’s investigate the oil price Barry? Hint , google Eccles. Let’s arm the mudžahedin against a bad guy? Sure... worked pretty good last time! Let’s bring down insurance costs by giving Big Pharma a half a trillion bucks worth of new premiums? Brilliant! Let’s make the banking system solvent by shoving trillions of bad speculative bets into the rabbithole? Outstanding!

But above all let’s get the spokesperson for the supranational star chamber to better articulate the psych-ops that will keep those shoppers happy and ignore this slow train-wreck of a Great Depression by refuting, negating, and verily daring them to believe their lying ojos….

And at no time will his hands leave his arms.

To each according to their eligibility... for each according to their greed.

The truths you hold to be most dear are lies told to you by liars.

‘Afterward he measured a thousand; and it was a river that I could not pass over: for the waters were risen, waters to swim in, a river that could not be passed over. And he said unto me, Son of man, hast thou seen this?’ – Ezekiel 47:5-6

‘There’s blood in the streets, it’s up to my ankles.’- Jim Morrison

‘The iron never lies to you.’ –Henry Rollins

As I sit here in my new office (purchased at 30% off 1998 prices …viva la recovery!) getting ready to spend a full Saturday perusing charts - for whatever reason - the Spirit is movin’ this fella to a lonely bray into the wilderness of the blogosphere yet again. Please excuse the indulgent and self-centered segue gentle reader but a recent article illuminating the consequence of the ‘manufacture of contempt’ oft-referenced here has left me scratching my curmudgeon keppe.

About a week ago a group called GlobeScan asked 12,884 folks nestled in 25 different countries whither they agreed or disagreed with the statement that ‘the free market is the best system on which to base the future of the world.’

In 2002, despite the tulip er dot-com crash, 80% of Americans stated that they either strongly agreed or somewhat agreed that the free market was the best economic system for the future which, not surprisingly, was the highest percentage of any country.

That percentage is now down to 59%, less than Brazil (68%) and less than China(67%).

But that’s not all!

A majority of our youth, per the American Red Cross, approve of torturing or even killing captured enemies.

And to round out this trifecta of tyranny…

59% of adults, per McClatchy-Marist, believe that those who publish confidential or secret U.S. documents should be prosecuted. 22% think it is a ‘good thing’.

Oh shining city upon a hill whose beacon light guides freedom-loving people everywhere, you knew Daniel Ellsberg, Daniel Ellsberg was a friend of yours… Bradley E. Manning you’re no Daniel Ellsberg.

Life, liberty and the pursuit of justice…you’ve been punked.

How in the frak did we get here? Was it the ideological institualization of stupid… the crazy- hole, Big Lie, co-opting of regular folks’ inner monologues so that they would vote against their self-interests?

Was it the incessant worshipping of all things military? Fly-bys,and medals of honor,and colour presentations at every single sporting event of note, wars of choice with a roulette wheel supporting our ‘tribes with flags’ du jour … Eisenhower no doubt for many years has been convulsing in his tomb.

Was it the full-out psych-ops perpetrated by our solons to keep the shoppers happy? Employment improvement through division causing derision, retail improvement through survivor bias causing folks to contemplate their lyin’ eyes, magical deflators applying Potemkin lipstick to an economy of craters?

Perhaps all to some measure.

Eras have markers, signifying events, as it were, that although part of the scenery at the time become a sentence or two that future history texts are built on.

For my demographic -give or take a couple weeks am the very last of the boomer generation- the snippet of our times is best elucidated by the epigram of ‘ failure to liquidate the insolvent banksters, to apply the acid-bath of price discovery, to effect the principles of capitalism long espoused by the plutocracy, to rich folks’ bad speculative bets… has liquidated a large part of the productive economy.’

It is the wellspring of derision marking the inflection that, to be gentle, will for some future student be seen as the ‘transition’ of the American empire.

The solutions are quite simple hence the arguments made by the aristocracy are by necessity so complex. Failure to stand for, and embrace, the simple is why we fall for the complex.

As an example, if the markets are the dataset of humanity, then given the ridiculous complexity of the latter, theories on the former must be comparably so.

And yet the methodology that generates…

AUDJPY sell
AUDUSD buy
AUDCAD sell
AUDCHF buy/sell
CADCHF buy/sell
CADJPY buy/sell
EURAUD sell
EURGBP buy/sell
EURJPY sell
EURUSD buy/sell
EURCAD sell
EURCHF buy/sell
GBPCHF sell
GBPJPY sell
GBPUSD buy/sell
GBPAUD sell
GBPCAD buy/sell
NZDJPY buy/sell
NZDUSD buy
NZDCHF buy
USDCAD buy/sell
USDJPY buy/sell
ZC buy/sell
CL3 buy
GX buy/sell
YM buy
DX buy/sell
GC3 buy
ES buy
SI3 buy
ZS sell
ZB buy
ZW buy

… with proprietary linked entry stops and exit stops and limits (for next Sunday-Monday trading) works to the utter bafflement of the adherents of the failed-theory of randomwalking.

The Book of Books states that the Kingdom of Heaven belongs to those who are like … children.

Indeed.

My eight year old has a better sense of things then the bloviating publicans and libs.

Unfortunately the simple children will become complex adults. And verily, complexity for complexity’s sake is most certainly the road to perdition.

Although the truths you hold to be most dear are lies told to you by liars, much like Rollins’ iron which never lies… neither do the charts.

So back to ‘em.

AM out.

It's Raining Ben! Hallelujah! It's Raining Ben!

"Note to Fed -namby-pamby won't allow you to realize your goals,"
-David Ader, CRT Capital

Bloomberg: Bernanke said resuming large-scale asset purchases should boost economic growth through larger borrowing costs and higher stock prices and that concerns about the strategy are "overstated". 'This approach eased financial conditions in the past', Bernanke said.

(Bea.gov): Personal income decreased $16.8 billion, or 0.1 percent… Personal current transfer receipts decreased $21.5 billion in September, in contrast to an increase of $35.1 billion in August. The September change reflected the effects of unemployment compensation legislation, which reduced emergency unemployment insurance benefits by $25.5 billion at an annual rate in September, after boosting benefits by $20.5 billion in August…Real disposable income decreased 0.3 percent in September, in contrast to an increase of 0.2 percent in August.

Quelle surprise! The demand restoration project is still not working. Hoocoodanode?

Once again, here are the top ten reasons why this ends in tears or (hopefully not) fireworks...

10. Nancy Capitalists in a Sovereign Democracy that are Hell Bent to Seek Rent.
9. Although we walk through the Valley of Debt we fear 'No Easing'.
8. Socialized Guts will lead to diminished glories.
7. Failure to liquidate the insolvent banksters has led to the liquidation of a large part of the productive economy.A taxpayer financed bailout of rich folks' bad speculative bets has resulted in zombie banks and zombie customers... a fiscal tide that lifts no boats.
6. The cold hard fact of our age is that the bankrupt ideology of the rich that had greatly succeeded in drafting the inner monologue of regular folks so that they would vote against their self-interests is colliding head-on with a Mr. Market that is a bit pissed off that we've inflated it out of the business cycle for the last quarter century.
5. Mr. Hand's strong dollar policy is the chimera of currency debasement masquerading as America's wealth exporting machine that is regularly promulgated by our leaders as an exceptional example of America's resiliency.
4. Yes Virginia, there is no collateral.
3. The government is 'all in' and can't pull out.
2. Employment, inflation, productivity, GDP, and other sundry stats are massaged into irrelevance ... the markets are rigged.
1. After World War 2, our blessed leaders, impressed by German 'organizational' skills crafted a policy of manufacture of consent.Over time these techniques moved to the economic realm in an attempt to manufacture content.Federales now risk the manufacture of contempt, for it is only a Great Depression if they say it is.

Bernanke institutionalizes the concept of PPT, tinfoil hat comrades?, as the pablum narrative collectively shrugs. The continuation of QE1 is estimated as the equivalent of cutting the fed funds rate by three quarters of a percentage point, per the Fed, and even double this amount would result in no more than a .2 percentage point drop in the unemployment rate by 2011, per Macroeconomic Advisers.

One neither need have stayed at a Holiday Inn Express last night nor need have worn a Sherlock Holmes costume on Halloween to deduce that The Fed's mandate of reducing unemployment is unattainable.

What then of the fabled stratagem of 'price stability'? Stability where? A special sauce applied to the trillions of bad meatballs at the insolvent banks where the excess reserves are nothing but DIP financing for a generational workout? That's the deflationary chasm that has already been disappeared from the ojos of us mere mortals - QSPEs and VIEs existing only in the realm of the Google Cache. Stability through debasing our standard of living for a Potemkin recovery where the commons can enjoy prices declining in things they want but can't afford and prices rising in things they need but can barely afford? Ah, say our solons, stability per the pablum narrative description of Federales Psych ops, the clever chestnut of 'portfolio balance'. The Divine Might of Wizards through buying bonds will increase the 'demand' for those hell bent to seek rent in equities, thus trickling household wealth and the resultant spending to the surplus eaters.

But households only have about 7 trillion in equities and if you calculate equities going up 10% from here that translates into about one-quarter of one percent of GDP.

As the Oracle of Eccles goes on his speaking tour over the next few days what will be said is, given the slack in the economy we have to do something... we have the technology to reduce this portfolio... Washington needs to get its' house in order... and the world needs a vibrant and growing America.

What won't be said is @#$%^#$#%$% I pray for the day when I can declare victory and walk away.

And the Nancy Capitalists with their chalice of confidence raised toward liquidity's faucet chortle, 'It's Raining Ben! Hallelujah! It's Raining Ben!'

Squircling the drain, the name for our pain?... the inculcation of disdain.

Two generations from the denouement of the summer of love and we've portmanteaued from the counter culture to the culture counter. Today's political discourse akin to the fellas at Stuckey's rippin' on anything that isn't white and male or subservient to same. The grizzly MILVF's, (Mom's I'd Like to Vote For) today's surrogate for dingbat housewife, the cynical pablum narrative akin to the hot meal waiting with scotch properly poured.

It's a feedback loop that doesn't stop giving. Besmirch the stupidity and the authors of same use such accusations as proof of their legitimacy. And the press? Trapped in the hell of cognitive dissonance. This just in... the science of ambulation but first a special report from a momma whose back was broken when yonder crack was stepped on.

In my life no matter what the pursuit there has always been a line of intellectual demarcation best described as retail and wholesale. Perhaps it is conceit to suggest that the chasm between the two seems wider than I've ever perceived but verily if stupid is as stupid does, the wholesale product has transcended the continuum of criminally stupid or stupidly criminal.

Economically we seem damned to exacerbate this Potemkin recovery into something that not even the Divine Might of Wizards can transmogrify. The Great Game as a scum scrum for the crumbs. The unarmed combatants staring at their impotent swords of currencies like Black Knights. Even if reality were to declare the 'fight is mine' the solons would proclaim it to be naught but a flesh wound as they launched the middle class, their chests as cannons, at the great whale of deflation.

Politically, the devils in red dresses, manchurian candidates of the fear industrial complex whose denizens are uniformly hell bent to seek rent, employing 'common' wisdom for the 'common' man for purposes of anything but the commons. Verily, they will hand power to the elites in a way that will beggar credulity all the while being incredulous at any treatises of reasons that might suggest contrary.

Not only must the windfall apples be reserved for the more equal of brainworkers but the tree of egality must be refreshed with the blood of your standard of living.

After World War 2, our blessed leaders, impressed by German 'organizational' skills crafted a policy of manufacture of consent.Over time these techniques moved to the economic realm in an attempt to manufacture content.Federales now risk the manufacture of contempt, for it is only a Great Depression if they say it is.(AM Rule #1)

Squircling the drain, the name for our pain?... the inculcation of disdain.

*%&$^# Eh what the hell.... Honey? Where's my scotch!

Sipping sweet ambrosia from the skull cap of the common man.

'Bernanke and his ilk are not just trying to boost the US economy, they are trying to salvage their reputations and theories. The crime is that they are savaging average Americans and have bet the country in a desperate attempt to prove that they know best.'
-Bill King, the King Report 10/14/2010

'The effect of QE2 on interest rates could be small and limited to an announcement effect...many believe that the effect on output or employment would be small...unlikely to stimulate aggregate demand...little effect on aggregate demand implies a corresponding small effect on output and, hence employment. QE2 could have adverse effects.'
-Federal Reserve Bank of St. Louis

'The folks at the Fed are frozen in fear. They don't know what to do.'
-Chris Whalen

'But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition. For the love of money is the root of all evil...'
- 1 Timothy 6:9-10

'There hath no temptation taken you but such as is common to man...'
- 1 Corinthians 10:13

'Don't Task Don't Smell', the central plank of the 'I Can't Believe it's Not Capitalism Plan', has given us Sugar Mountain, where stupidity is cupidity.

Ringfencing the multitude through financial pulchritude is but Federales psych ops, masquerading debasement as growth, as the plutocracy sips sweet ambrosia from the skull cap of the common man.

Phat, Plummed and Cupid is no way to go through strife son. Mr. Hand's strong dollar policy is the chimera of currency debasement masquerading as America's wealth exporting machine that is regularly promulgated by our leaders as an exceptional example of America's resiliency(AM Rule #5). Timmy G even takes credit for the creation of the 'strong dollar' policy.'Nuff said!

As the epigram, 'Yes Virginia , there is no collateral' becomes an accepted norm, as the metaphorical fork in the middle of the road er scratch that kicked can hangs with horsehair, the splinter of our disconnect in the deep bosom of our equity buried is proclaimed by the Federales as nothing but a thorn discovered as they fervently hope not to be cast to the lions.

Is it Back to the Future of folly and bubbles or Fade to Back as we peer down the chasm of the black diamond demographic? Building a bridge to nowhere is at least doing something, but please don't peer down dear citizens lest ye randomwalkers realize the gravity of our situation.

The Oracle at Eccles and assembled throngs of Nancy Capitalists beseech their models that show 100% chance of 'no fail' when the money is easy and free to deliver them like Aesop's Shepherd so when the masses see that which healed them, they will pardon and not attack.

Golden goose or scrambled eggs?

The answer it would seem as we destroy our standard of living to create a Potemkin recovery, is both, in an ever increasing divergent measure.

The insouciance of elites and the Antoinette economy.

Verily, let them eat debt.

Fed for the people, chasing Bennie's steeple, gathereth the reapers.

'As we have been asserting, the FED continues to apply QE, despite it official announcement that Q.E 1.0 ended two quarters ago. For the week ended on Wednesday, the Fed balance sheet increased $9.358B due to the monetization of $7.390B of Treasury notes and an increase of $2.248B of 'assets denominated in foreign currencies' (footnote #13; currency swaps?)'
-The King Report, Issue 3856, October 8,2010

...He that gathereth not with me scattereth...
- Matthew 12:30

Faced with the surplus eaters rubbing sus ojos Bernanke had to fire up the psych ops jets after the Jackholios shrimpfest.

The Diving Might of Wizards again on display, gangbanging the string framed as many easings away, the levers of debasement screened whilst shadowfoxing the fray, all in the blind hope that we can avoid anchors aweigh.

"Bennie-boy, whaddaya say there pal of mine ?"

"You know Mr. Market, I've been watching you.
And I know you've been watching me.
You watch me! I know!"

"So, Bennie, what are you gettin' at?"

"Mr. Market, my friend!
How would you like to pump me up the curve?"

"I know you wanna pump me, Market!"

"And you know that I know that you know
that I know that you wanna pump me!"

"Now I'm gonna leverage up,
and when I do, start pumpin'!"

And yet there is dissension in the chattering class of Nancy Capitalists, who with their chalice of confidence half-empty, parry like duck and rabbit.

'Fiscal Stimulus! Monetary Stimulus!'

'Fiscal Stimulus! Monetary Stimulus!'

'Monetary Stimulus!'

Pause

'Fiscal Stimulus!'

Verily they are all despicable. The struggle of virtue and vice is writ large as the debate between deflationistas and debasionistas. The former pines for reason before farce, the latter embraces the tragedy.

The Oracle at Eccles contemplating Rallye's mend at Recession's end scratch that Depression's bend.

To QE, or not to QE: that is the question:
Whether 'tis nobler in the markets to suffer
The slings and arrows of outrageous fortune,
Or to halt QE against a sea of troubles,
And by opposing end the rally?

To short: to buy;
No more; and by buy to say we end
The heart-burn of the thousand little trades
That this office is heir to, 'tis a consummation
Devoutly to be wish'd.

The butterfly wings of the banksters reflected back by the synarchy of the squatters reflected back by the imperfection of collateral liens reflected back by the political palliative of misdirection through scapegoating.

Now is the splinter of our disconnect
Made glorious summer by this sun of Ben;
And all the clouds that lour'd upon our house
In the deep bosom of our equity buried.

At this point at the end of the trend - 2009 low besting the 2002 low breaking a line of lower lows from 1897 up- our prosperity is now in the hands of Fleck's battle of unarmed combatants (currencies) where the U.S. is the dealer (reserve), at least for the near term.

It is not so much a race to the bottom as it is a pace to a bottom. QE2 can't sail until Euroland hits the rocks again. We can't let their upcoming crisis go to waste.

In choosing 'prophetic' models with a track record of failure we are mortgaging the ability to be masters of our fate. To foresee a future that rhymes with a past is not, as the pablum narrative whines, to refute self-determination but ironically such recognition would harness the same to shape the unknown to a more benevolent conclusion.

Deficits do matter, belief in a random deliverance is foolish, better to accept a mandatory across the board cut and employ a fair and flat tax.

Free market statistics that are transparent and real allow the free market to allocate resources productively and intelligently.

Creative destruction is the progenitor and the instigator of the wealth creating mechanism of capitalism.

Empires are not eternal. The hard fought blessings of liberty are secured by the prudent not the profligate.

Years from now all this, and most assuredly more, will be obvious and this chapter in history, marked by excesses and folly, will be seen as similar to the ones preceding.

Fed for the people, chasing Bennie's steeple, gathereth the reapers.

We will kick the can until the can kicks us.

"Bennie-boy, whaddaya say there pal of mine ?"