Japan households reduce spending as unemployment rises
+
Japan's youth turn to rural areas
seeking a slower life

Citizens go

$2,400,000,000,000

deeper into trillions of debt -

politicians applaud

A National Debt Of $14 Trillion? Try $211 Trillion

INTERESTING TIMES

Some of the trees up here been playing havoc with our way of life, and folks 'round these parts won't stand for it, nosir.

For example there's the big chunk of incipient firewood from the gargantuoak a few hundred meters above here whose monstrous branch was lowverhanging the road and was cut down a couple of months ago before it could crush somebody, its superbulk then being rolled over the roadside edge into the bamboo and down toward the stream before the cutters knew that I was a firewood type person and would want it, so later I found out it was ok for me to take it away, but now I'll have to stand on that steep slope as if beside a nervous elephant and chainsaw the mass into half-meter segments weighing about 300 k each that I'll have to stay out of the way of, then have to split and quarter in situ so as to render them liftable to the road above. Love those kinds of tasks...

After that I can tackle the big oak on a transverse road thereabove that the recent hurricane blew over onto some power wires, causing a multihour blackout up there until the power company cut it down in big sections and shoved it into the woods where it now belongs to me but I won't get to that for a week or two beyond the first cache, though whats the hurry, since no way will it ever be dry in time to use this winter, even with the impossible miracle of constant sunlight during the rainy season plus the worst of global warming. It's warmth for the winter of 2012-13, if we're still here then, given the ongoing govern/mental revelations of Fukushima, but even so I'm going to try to leave the split wood out in the sunniest, breeziest place...

Then I'll have Azuma-san fell those three big crowdy oaks that our upmountain neighbor girded because they need the sunlight on their house, so when that's done I should have enough firewood to last until the world economy has successfully collapsed and everyone has gotten used to bottom line frugality so we can hopefully move on to essential changes.

We do live in interesting times, do we not...

SIGNS OF THE NEW ECONOMY

Here's hoping this kind of thing happens more and more in the coming new world economy...

BUBBLE BEN

How have the mighty fallen...

100-dollar Ben (the most frugal of the founding fathers!) was once the go-to guy, the face in demand at every black market in Asia, but has now fallen in value to such an extent that he is not only less desired by back-alley street corner money changers, but has been turned by a Japanese toy company into a soapy parody, a currency bubble bath no less, as a 1000-dollar bill that is nothing but bubbles, popping all over the world...

I remember when a hundred-dollar bill was really worth a hundred real dollars, and reality in general was still pretty common...

LET US RESOLVE OUR PROBLEMS OVER DRINKS

Here at the depths of the economic depression brought on by the major financial entities who were subsequently rescued by the taxpayers, said financial entities and taxpayers met over drinks last night in a welcome attempt to discuss and resolve the economic crisis vis-a-vis the vast profits and bonuses recently accrued by those entities, who at the event paid for their champagne with IOUs against rumored equity at 0.01% non-compounding that mature in 2050 if not later, to be backed by several generations of taxpayers, who drank from plastic cups of water from a well surrounded by economic cesspools; but upon seeing the tailored silk suits, breast pockets holding million-dollar bonus checks, the Grand Cru, the crystal goblets, Cuban cigars, $500 haircuts, $2000 eyeglasses, $1000 shoes, easy laughter and waiting chauffeurs, the greasy work-clothed taxpayers took their work tools in calloused hands and charged, throwing the financiers into the cesspools, reclaimed their own money and country, then walked home.

Looks like it's already beginning...

+

NY AG: Banks Paid Bonuses That Were
Substantially Greater Than Their Net Income

"...combined, these three firms earned $9.6 billion,
paid bonuses of nearly $18 billion,
and received TARP taxpayer funds worth $45 billion.

+

Five Firms Hold 80% of Derivatives Risk, Fitch Report Finds

+

Goldman's new 'American Socialism Manifesto'

+

THE ROYAL SCAM

OLD CRIMES, NEW NAMES

I bet the suits who sit around a table in a secure boardroom somewhere and come up with new names for old crimes had a big laugh among themselves when they came up with the latest euphemism for general and ongoing theft of your income.

As all the possibilities raced around their one-track minds, they likely threw out suggestions-- some of them serious, like 'Terminal EconoCare, 'or 'Painless Extraction,' some of them comical, like 'Fiduciary Exuberance' or 'Beltway Robbery.' Then they'd chuckle for a while and get back to pondering over coffee amid discussions of the psychoeconomic aspects of optimally deceiving the cashcow electorate, who have always done all the backbreaking work needed to actually create actual goods and actually earn actual money.

It wasn't that the econoguys were feeling at all bad about the idea of deceiving the public one more time, it was just that they had to give the official kleptoproject a name - that was part of their taxpayer-funded job - but they didn't want John Q to figure out what was really going on with the money; plus, there's always the aesthetic aspect to such efforts, of creating a classic bit of copy or a catch phrase that pulls the wool over in excellent fashion, like Ask Why, or Liebensraum, or Mission Accomplished...

Then at some point in one of those econocreative brainstormings, one of the participants threw out the term "Quantitative Easing" and the whole table just cracked up at the deceptive beauty of it, how not only was the phrase sufficiently opaque to befuddle Joe Sixpack and beguile Sam Lunchbox-- the reporters and anchors would eat it up! It was perfect!

They figured that with the right tone and spin, the Sixpacks and Lunchboxes of the land - who were too busy worrying where their next dollar was coming from anyway - would just think that the project had something to do with the quantity of-- something comfortable, something helpful that the government was doing, sort of like handing out easy chairs, when what it actually meant was that the Federal Reserve, a private corporation with no reserves, was going to print a few quadrillions of completely paper money out of nothing, so that the value of each dollar in the taxpayers' bankbooks and pensions would eventually go down to the basement of value, and the Sixpacks and Lunchboxes and their kids would have to work it all off (plus the econoguys' and their buddies' bonuses) without even knowing it! They'd say stuff like: "Boy, these bills are sure piling up, I'm gonna have to get a third job, things are really getting expensive, looks like you'll have to give up college," the same way they say "Boy it sure is raining!"

"Quantitative Easing": what a laugh there must have been around the table at that moment.

You gotta wonder if the trick is gonna work, but that's why they don't teach finance in high school.

BRADY DECIDES TO GIVE HIMSELF A BONUS

Cracking me up at the moment is the the sight of the American public and its elected officials - who in accordance with the new trickle-up theory have been giving away their descendants' economy - getting rabid over the fact that on the way out of the public bank with their arms full of billions of taxpayer dollars, one of the thieves bent down and picked up a penny off the floor as a bonus. What an outrage! ($165 million / $1.1 trillion = .015%)

So after a long spell of reading all the mind-numbing economic news from the USA, and following deep and responsible consideration - one doesn't approach such issues lightly - I've decided to give myself a bonus, like the guys at the Big Trough in Washington.

I haven't decided yet how big my bonus will be; it's tricky in my case because, unlike the Wall Streeters, I deserve a bonus more than they do, since I'm not rewarding myself for losing other people's money and haven't committed possible malfeasance, plus I care about appearing too greedy. Integrity can hold you back in this kind of situation.

On the other hand, I don't want my bonus to be too small, because once the job withers and after the foreclosure my pension dries up just as medical care blows away in the economic duststorm that's coming - thanks to the unceasing hand-over-fist work of all those folks at the top of the pyramid - I'm gonna need some long-term partytime backup, so I figure a modest 10 million rapidly shrinking dollars should cover the tab till the next bubble.

First, though, I have to incorporate myself as a failing but needy financial entity that has avoided paying taxes for decades. How does CitiBrady, Morgan, Lynch, Gold, Merrill and Sachsman sound? Mind you, this is not a bailout, it's just humble greed. But at least I'm being honest.

*******

The Real AIG Scandal

AIG ... and the Politics of Deflection

The Big Takeover

"People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — 'our partners in the government,' as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers."

***********

One Small Problem...

"When a bank says an asset is worth 60 cents and the market says it's worth 30 cents, someone has to cover that spread. The genius of Geithner's plan is that it pawns most of the cost (and most of the risk) off on the taxpayer without the taxpayer noticing.

But unless the taxpayer gets stuck with the entire spread, which is probably what Geithner is hoping, banks that sell assets will have to take massive writedowns. This will start the whole cycle of violence again."

THE PERFECT HEIST

"We denounce the international and national economists as complete frauds, crooks and liars who have only their own interests at heart and screw you out of your money any way they can.

We denounce the private bankers as a bunch of crooks, liars, scumbags and frauds.

We denounce the international economic institutions to be the instigators of this whole fraud scheme, and we think they should ALL go to jail."

Interesting opinion from The Guatemala News...

PAULSON SAYS "LET THEM EAT CAKE."

"The swindle of American taxpayers is proceeding more or less in broad daylight, as the unwitting voters are preoccupied with the national election. Treasury Secretary Hank Paulson agreed to invest $125 billion in the nine largest banks, including $10 billion for Goldman Sachs, his old firm. But, if you look more closely at Paulson's transaction, the taxpayers were taken for a ride--a very expensive ride. They paid $125 billion for bank stock that a private investor could purchase for $62.5 billion. That means half of the public's money was a straight-out gift to Wall Street, for which taxpayers got nothing in return."

***

"How else to make sense of the bizarre decisions that have governed the allocation of the bail-out money? When the Bush administration announced it would be injecting $250bn into US banks in exchange for equity, the plan was widely referred to as 'partial nationalisation' - a radical measure required to get banks lending again. Henry Paulson, the treasury secretary, had seen the light, we were told, and was following the lead of Gordon Brown.

In fact, there has been no nationalisation, partial or otherwise. American taxpayers have gained no meaningful control over the banks, which is why the banks are free to spend the new money as they wish. At Morgan Stanley, it looks as if much of the windfall will cover this year's bonuses. Citigroup has been hinting it will use its $25bn buying other banks, while John Thain, the chief executive of Merrill Lynch, told analysts: 'At least for the next quarter, it's just going to be a cushion.'"

***

"Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses - despite asking the U.S. government for an emergency bail-out.

The struggling Wall Street bank has set aside £7billion for salaries and 2008 year-end bonuses, it emerged yesterday.

Each of the firm's 443 partners is on course to pocket an average Christmas bonus of more than £3million.

The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S. government is throwing to Goldman as part of its £430billion bail-out.

As Washington pours money into the bank, the cash will immediately be channelled to Goldman's already well-heeled employees."

***

In the old days, crowds would be heading for Wall Street with pitchforks, tar and feathers!

MAYBE WE COULD RUN THE WORLD ON HOT AIR?

An interesting perspective on fuel (and other) price rises...

"The system and its apologists are desperate to keep this obvious truth hidden from the public, or at least to keep the public confused about it. For example, last week, U.S. Treasury Secretary Henry Paulson said that 'a weaker dollar cannot be blamed for soaring oil prices.' This is on par with saying that 'heavy rain cannot be blamed for flooding in the Midwest.'

Proof – and this is where that pesky 'reality' thing really gets in the way of a good lie – is that gasoline prices have hardly changed in terms of real money. A gallon of gasoline today costs about $4.10 in American fiat money, but can still be had for less than a quarter-ounce of silver. [Currently 18.37 per ounce and rising]. A silver quarter from 1964 or earlier contains nearly a quarter-ounce of silver, and, despite fluctuations in the price of the two commodities, will usually buy roughly a gallon of gas. This situation has changed little in decades."

--Glen Allport

GETTING STIMULATED

When it comes to stimulation, often as not you'll find me first in line. I've got nothing against being stimulated, as long as it isn't by a government; that's like being stimulated by an oversized steam-driven contraption in desperate need of oil.

So I chuckled when I heard about the Economic Stimulus Act of 2008, the Diebold president’s Surge-like plan to save the US economy from what he and his crew have done to it, by giving each not-yet-completely-broke citizen a nanodrop to put in their personal debt bucket-- if they don’t, under the circumstances, simply blow the check on a few cases of beer.

With a national debt in the trillions and a derivative threat of many more trillions, the crew call $300 an Economic Stimulus. (Those with qualifying income of less than $3000 [!] and tax liability of zero don’t get stimulated at all; somehow that makes a GOP kind of sense.)

I expected, though, since I’ve been living outside the country for the past 35 years, that I personally would not get stimulated in such a way. But not long ago I received one of those classy tear-along-dotted-lines-to-open letters from my relentless friend the IRS, addressed precisely to my foreign home, informing me of my possibly being entitled to a payment of anywhere from zero to $600 "plus additional amounts for each qualifying child.” In natural disbelief I looked the pulp document over carefully, searching for the must-be-there clause along the lines of “...those who have lived overseas for more than 34 years and have never paid any US taxes do not qualify for the Stimulus Payment, and will be liable for $10,000 or more in Life Elsewhere Tax for every year spent abroad.”

But I could find no sign of the naysay clause that characterizes hopefully scanned government/financial/insurance documents; there was nothing specifying my ineligibility, not even in the small print or between the lines. Can I therefore expect-- my “Net Income Tax Liability” being “Zero” (Foreign-Earned Income Exclusion) and my “Qualifying Income” being “At least $3000"-– a check from the IRS for this summer’s beer? According to this hedgy letter, I can.

Actually, I suspect I’ll get the old steam-delivered naysay clause instead of a check, but that's ok-- I’d rather not be stimulated by the G-device; who knows where it's been.

Anyway, E pluribus unum, Sed quis custodiet ipsos custodes and so forth.

+

In re which: How I Spent My Stimulus

THE STUFF IS NOW HITTING FANS EVERYWHERE...

Hope your equity is out of the system and there's not a fan near you...

The worldwide deception that has created this mass and propelled it toward the revolving blades may set a new world record for venality.

[Update: Global Derivatives Market Expands to $516 Trillion]

THE MUSHROOMS OF UNDERSTANDING CHINA

There I was the other day - a fine day - with 40 beautiful, fresh shiitake oak logs tapping their feet waiting to be inoculated with that fine megashiitake spore I'd copped at the farmer store along with a special shiitake-inoculating drill bit, but by the time I got home from the store it was too dark.

Then after a next day in the office doing one-after-another-after-another of just a few of all the things that are distinctly unrelated to the task of inoculating shiitake logs (there are approximately 10 trillion such things), early the next morning I stacked up the already ongoing shiitake logs for the winter, then did some editing of mere words, saving the late afternoon hours to inoculate about 10 logs.

Then a little more than an hour before dusk I plugged in the long extension cord for the old 100W drill and began, got about 6 logs drilled and inoculated, when on the seventh log the tired little drill said Nope, no more, Bob; this is it pal, see ya in heaven, then darkness fell exactly the way it does after your drill gives up. Then I was in the office again among the 10 trillion things.

In time I managed to reach the shore of another weekend and went off to the farm store once more, this time in search of a bigger, better, more powerful drill, and found one I wanted, a Japanese brand-name 400-Watter, for about 120 dollars-- and then another I wanted more: a 430-Watter with an extra sidebar handle for about 160 dollars, but I didn't want to spend that much, since I'll mainly be using it just to drill shiitake logs once or twice a year as the old logs get used up and become great compost.

As I stood there pondering a solution to my econoshiitake dilemma I noticed some other, differently colored drills lower down on the tool display shelf-- way down there, in fact, sort of pushed to the way back of the way bottom. Their price was too low for the kind of drill I was after, but I hunkered down there anyway, since I wasn't going anywhere at the moment, reached in and pulled out one of the boxes, noticed that it was in fact the same kind of drill, except that it was a 480-Watter, had one of those great sidebars, and cost about 30 dollars! And was made in China-- probably using fine, Japanese-made electric parts.

One-fourth the price of the higher-up drills of less power and more costly utility, Japanese drills that only a moment ago had gleamed in my mind's eye as equipment of the highest standard, prestigious and priced out of reach; they now looked a bit forlorn, their luster dimmed, their true price now apparent (approx. 80% markup over labor cost, since they too were assembled in China, I'll bet).

So of course I bought a bright and shining miracle Chinese drill, took it home, plugged it in and finished five logs like a dream, in a tenth of the time. It was the Ferrari of drills, as far as I was concerned. And as I drilled on efficiently into the dusk I suddenly saw first hand what China was really about to do to (and at the expense of) the developed world and its laborers, apart from vastly increasing my shiitake crop.

THE MODERN ECONOMY IS UPON US.

Only trouble is, computers just can't lie,
or even bend the truth very well.
Yet.

via reddit

DARK AGES

"Bill Gross, the chief investment officer of Pacific Investment Management, said US mortgage delinquencies and defaults would rise in 2008. 'There are $1 trillion worth of sub-primes, Alt-As [self-certified] and basically garbage loans,' he said, adding that he expects some $250bn in defaults. 'We've only begun to see the pain from rising mortgage payments,' he added. Brian Gendreau, an investment strategist at ING, commented: 'Financials are 20 per cent of the S&P 500 and if that sector doesn't do well all bets are off. People just don't know what’s on the balance sheets.'"

Of course they don't mention the other 99% of the iceberg, as those at the top get their money out. Sub-prime is the buzz word at the moment, but next comes the $20-40 trillion in credit default OTC derivatives (now beginning to hit the fan) - nobody knows how much, really - and teetering above them, high over the global economy, maybe another 300 trillion in further derivatives... (the annual world production is valued at ca. 65 trillion once-upon-a-time dollars.)

And to think those garbage derivative AAA raters and marketers to the public are not (yet) being prosecuted for the biggest fraud in history! And who will pay? The public, as always.

Advice from Jim Sinclair, as of November 6: "How Can You Be so Complacent?"

A COMFORTING THOUGHT

No need to worry about the economic future-- rest assured, the rising tide will lift all yachts.

INDEPENDENCE

"July 4th is Independence Day... It's time to get out of debt and live small, not large. Own only what you need, not what you want so you can save. Invest in beautiful things you will enjoy for years, rather than fancy dinners that only leave your stomach bloated and your wallet empty. Build up savings in tangible assets that will hold their value regardless of the rate of inflation. America the beautiful is still a rich country. On July 4th we should be celebrating our financial independence because without it, there is no freedom."

Independence Day is Here, but Not for Many Americans
by Richard Benson