THE MUSHROOM UNSEEN

Shiitake have IQs. You don't believe it, just ask me. Admittedly, it's a kind of intelligence most folks don't encounter in everyday life, outside certain areas of finance; it's an intelligence we who prefer full daylight don't know much about. I've never read any scientific studies on shiitake IQ either, but if you actually raise the savory creatures, you come to understand the shadowy time-transcendent intelligence you're dealing with. You get that eerie Twilight-Zone feeling, as in the presence of chronic bankers. 

One example of shiitake savvy, apart from the amazing hydraulics of their existence and other unfathomable skills, is that they always grow biggest in places you don't look for them. When you're out searching for lunch on a log and at some point realize that there aren't any shiitake worth harvesting and are willing to swear there are no places on that log that you didn't check for shiitake, just a short time later you’ll see a giant sofa arm edging out from the very same log, with that TZ theme deedling in the background. You swear to yourself once more that you checked there, you checked everywhere, you've been doing this for 15 years now, after all, you should know, hunger doesn't overlook food, but your time and experience mean little to the brown-hooded brood...

This happens year after year; they always grow biggest where you definitely looked for them. I can only conclude that certain places are forever invisible to non-mushrooms. This is not standard reality we’re dealing with here, this is shiitake reality; they live in multiple dimensions and are not fully of this earth. I know the round-earthers and other reality-restricted types are right away poo-pooing this idea but of course they do not raise shiitake and probably work in finance or its vicinity. They react with knee-jerk responses like "Of course they grow biggest where you didn't look, it's because you didn't look there, so they weren't found, but were left to grow big!" The obvious is often all the reality-prone can command...

The metafact is not that shiitake grow big because I don't look where they are growing, it’s that they grow big in those places because they know where I cannot look! I understand this because of all the times I have left a good-looking mushroom in place to grow bigger in a couple of days, and it NEVER DOES... That's right, it knows I'm going to harvest and consume it, so it doesn't bother growing any further! The resources go elsewhere: they go to the mushroom unseen.

Moreover, the shroom I haven't spotted knows I haven't spotted it and thus that it has a chance to spore, so it goes for it, rockets out and up, aiming for the fences right before my unseeing eyes. With every fiber of all the mycelium backing its effort, it goes massive. It then permits itself to be spotted, because by then it doesn’t care, it has grown beyond edibility. It stands there jauntily, in plain sight now, doing its oh-so-subtle victory dance and wearing that protosmirk they get at that stage, like the good guy at the end of the war movie who's dying but has managed to blow the bridge.

Still. I get most of the newbies sooner or later, so in some ways I'm smarter than most mushrooms, if the monkeys don't get them first, though in other ways I'm dumber than mushrooms, and throw the monkeys in there too for good measure, it all works out in its own way-- monkeys, mushrooms, humanity, finance, all one big cycle bobbling in its own kind of balance, just ask the universe. 

The evidence is always right there before your eyes, where a shiitake isn't.

RIPENINGS 

                                                                                                  [from unposted archives]

Here in the Japanese countryside there aren't any movie theaters or entertainment districts, like they have in the big cities. I don't know how we survive out here with just trees and flowers, rivers, lakes, wild animals, genuine weather and distant neighbors-- the most exciting event right now where I live is the plums ripening. Nothing like standing under the plum tree in the cool of the morning and having a couple of sweet ones for breakfast. 

We saved a lot of plums from the ravages of the scoundrelly simians in the historical Battle of the Big Plum Job a few days ago, our victory thanks to the advanced rock-propulsion system we've developed during the million years of struggle between sapience and simiance, a struggle still ongoing in politics and finance. 

Right after that engagement I picked a couple of basketfuls of ripening plums, just in case the furry marauders returned, but I couldn't reach the purplings high up, which are now hanging there ripening in the sun, like the finest rubies in perfectly complementary leaf greenness. Beautiful. 

Whoever designed plum trees sure knew what she was doing.

THE NEANDERTHAL SEQUENCE

When I was a teenager I was often called a Neanderthal by Mr. Rapazzardi, who generally sat on his front stoop keeping an eye on that nice front lawn of his that I used as a shortcut. For my part, I felt that Mr. Rapazzardi was the Neanderthal. Turns out we were both right.

Later, in my college years, I smirked at the academic puzzlement over whether or not the noble Cro-Magnon, crafter of superb arrowheads, pure high-browed ancestor of those strong-jawed subjects of highest nobility, known as "us," had ever, ever deigned to couple with the bestial, low-browed hairy chipper of nothing but hand axes: the Neanderthals next door! I smirked because, well, I was in a fraternity; we were much closer to how reality actually worked.

So all these decades later I was not shocked when the scientists announced that, like all non-Africans, I am part Neanderthal, and so was Mr. Rapazzardi. There have always been certain ancient cave-dwelling propensities, have there not, certain primal feelings in taking a risk, hefting a stone, sighting a wild animal, gathering around a fire, spotting an untrod lawn...

So what does this mean for us modern human folk, this Neanderthal quality so many of us share, even without reference to certain reality tv programming? It could explain some major anomalies, such as creationists, Wall Street financiers and certain folksy politicians, who are torn between the progressive abilities of one ancestral line and the inviting stolidity of the other, between malignant greed and staunch integrity, complexity, simplicity, pride, humility, the list can be found in any "holy" book, whichever from wherever. Familiar mixes that are especially stressful to politicians and financiers, for example, who as a way of life must appear one way while acting the opposite.

No real need at this point in these exciting revelations to mention that I am also very likely a descendant of King Tut, who was probably also part Neanderthal, as are you, maybe you have the Tut part too, all of which means more to me, such as it is, than the Adam and Eve agenda I was heir to, but there you are-- people are impressionable are they not, yearning as they do for admittedly mythical roots, even as they carry the actuals in their very genes, with far more lineage than any mere king.

So now, thanks to science, we mongrels can at last perhaps begin admitting who we all really are, begin finding, studying, facing and accepting the many gifts and glitches we have inherited from the Cro-Magnons, Neanderthals and Denisovans, among all our uncounted forebears - including King Tut, where applicable - and so get past the dark sides of politics, finance, other bipolar activities and evolve at last into the beings that have been trying for so long to be.

FOREST MONKEYS, STREET MONKEYS

As a sapient being and anciently practiced discerner of patterns amidst chaos, I can't help but perceive the similarities between the lowdown thieving conscienceless behavior of my local simians at one end of the Intelligence Spectrum, and the lowdown thieving conscienceless behavior of Wall Street simians at the other end. The forest monkeys in their basal integrity come and take a few onions, bite a radish or two, then are gone till they're again hungry in this neighborhood and there is nothing better around than my onions. They never get bonuses or flaunt the success of their scam, they never make off with more than they can carry.

The Street monkeys, in contrast, find that integrity gets in the way of their desires; they want more than just the onions of it all, they want the yachts and the golf courses, the 25 million dollar houses, they want the respect of folks like themselves, who can only envy. So they package a dozen actual onions and millions of promises of onions and trillions of onion IOUs into tranches that they get rated AAA 100% ONION by some bribed rating agency, then sell the Fully Onionized Derivatives at declared value to widows and pensioners, mayors and governments all over the world, who then believe they are rich in onions and will be even richer when they cash in their fat onion portfolios in 20 years.

Both parties of perpetrators know, somewhere in their "Heart," that they are committing dishonest acts, the main difference being that it's easier to perceive in the forest monkeys. You can see they feel guilty when stealing - which they know must be clandestine - and they look guilty when caught red-faced. The Street monkeys, in contrast, feel no guilt; in fact they reward themselves all the more handsomely the greater their dishonesty. What's more, they even flaunt their actions, lately praising themselves for so many brilliantly (and honestly impossible) profitable quarters in a row, achieved by further milking the biggest scam in the history of sapience.

Forest monkeys, with their ingrained integrity, would never stoop so low.

IS THERE TRUTH IN GOVERNMENT?

U.S. Unemployment Rates (SGS: Shadow Govt Stats)

via: shadowstats.com

But why would the government lie? Aren't the people the government? Why would they lie to themselves? Either they're not the selves they think they are, or they're not the government they think they are... There seems to be a major fallacy in the framework, something the people don't want themselves to know... Wonder what it is...

In any case, now that Wall Street knows what it can get away with, better watch out below!

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"Goldman Sachs (GS), Morgan Stanley (MS), BP (BP), Total (TOT), Shell (RDS.A), Deutsche Bank (DB) and Societe Generale (SCGLY.PK) founded the Intercontinental Exchange (ICE) in 2000. ICE is an online commodities and futures marketplace. It is outside the US and operates free from the constraints of US laws. The exchange was set up to facilitate 'dark pool' trading in the commodities markets. Billions of dollars are being placed on oil futures contracts at the ICE and the beauty of this scam is that they NEVER take delivery, per se. They just ratchet up the price with leveraged speculation using your TARP money. This year alone they ratcheted up the global cost of oil from $40 to $80 per barrel."

--The Global Oil Scam

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"I believe we have not begun to see a fraction of the damage inflicted on Western economies by the sociopathic, short-sited banksters and their control of government. Perhaps that is why we see so little rage. People really have no idea what is coming."

Richard B.

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“Bloomberg reported: 'Goldman Sachs, the most profitable securities firm in Wall Street history, had a record profit in the first nine months of this year and set aside $16.7 billion for compensation expenses.' Goldman Sachs is on pace for the best year in the firm’s history, and it is also benefiting by only paying 1 percent in taxes."

15 Signs American Society Is Coming Apart at the Seams

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...

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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.

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

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Goldman's new 'American Socialism Manifesto'

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THE ROYAL SCAM

WATCH THE SKIES!

But not only the skies... "the Pension Benefit Guaranty Corp.'s former director invoked the Fifth Amendment in response to lawmakers' questions about possible mismanagement under the Bush administration."

They're everywhere in your now and future earnings...

US Debt Clock

Morgan Stanley to Boost Executive Salaries as Bonuses Decline
No reason we should all suffer...

A TOUCH OF AMUSEMENT

I had never seen a funnier waiting room in my life.

The expression on the walls, the look on the door combined to drive me into shrieks of laughter.

I was rolling on the floor, my sides aching, tears streaming from my eyes when the secretary called my name, announcing my turn for the job interview.

I straightened myself as best I could and brushed the floor dust off my suit, still chuckling at the color of the carpet and stifling guffaws at the lamps on the hilarious stands at the ends of the outrageous couch, as I gathered my papers together and wiped my eyes with my tie.

By the time I opened the door to the inner office, overcoming a new surge of laughter at the sight of the ludicrous doorknob, I had gained sufficient control over myself to present a reasonably staid appearance, suited to the position for which I was applying, that of bank manager.

The board of interviewers, however, was seated around such a side-splitting table that I lost control at once and doubled over roaring, dropping my briefcase onto a carpet even funnier than the one I'd just left, and going into absolute convulsions at each boffo question the comical crew asked me.

It was too much; I nearly crack up even now, just thinking about it.

Anyway, I howled all the way through the interview-- you should have seen their ties! I simply couldn't contain myself!

At the end of it, they had the secretary help me out of there - I was absolute jelly by then - and later I was informed that I had gotten the job.

As you can see, I don't laugh at all any more. Now that I actually manage money, it isn't the least bit funny.

Used to read this at the Kyoto Connection, over 20 years ago,
perhaps anticipating our current surreal global financial comedy;
a slightly different version was published later, in Kyoto Journal #19...
w/thanks to Ken Rodgers.

INTERESTING QUOTES ON THE BAILOUT

"How much inflation has there been? From the signing of the Constitution right up until landing a man on the moon the whole American experience, every house, car, television, freeway, airplane, war... everything, cost one trillion dollars. Then consider that the debt ceiling has been raised 2 1/2 trillion dollars just this last 12 months. Do you see the value in that? Of course not; that is because you didn't get it. The rich bankers and their Wall Street friends that you are now being told you have to bail out got the lot."

--Sam Mathid

"It is just that simple. When the Secretary of the Treasury said it is too complicated and that time was critical and that no one needs to understand all this and that we just needed to give him the biggest blank check ever written in the history of the world and that he would be exempt from all prosecution and his use of these funds was final... I almost burst a blood vessel. The 700 billion dollar fund is just the start. How many times have you heard of a deal gone bad that asks for more money only to come back a while later and say they needed even more; and then more; and then more. Does anyone think it a bit odd that the very man asking for dictatorial power over the finances of these United States was the chairman of Goldman Sachs; one of the largest culprits that got us into this mess and that profited greatly in the process. We, as a country, are being asked to give a known arsonist the keys to the fire truck and then look the other way? We are being told that there is no other option but to give one of the very men who got us into this mess by unrestrained greed a blank check to spend with his cronies to fix the mess... with no oversight... and a get out of jail free card stapled to the check for good measure?"

--Larry LaBorde

"The scheme is actually pretty simple. Please forgive my primitive graphics abilities.
The fund will buy mortgages from the banks at market value, and then re-sell them back to the banks at a discount. The fund will then repurchase those mortgages from the banks, who will sell them back to the fund again. The same product (perhaps an ill-advised mortgage for a half-million dollars taken out on a house in the distant suburbs of Las Vegas) will be bought, then resold, then re-bought and re-resold in an endless spiral of profit-taking. The taxpayer will lose on every transaction, the banks robbing the treasury each time each mortgage, or package of mortgages is swapped.

It is amazing to observe the greatest transfer of wealth in history, from Main Street to Wall Street,from the many to the few. What is even more amazing is that nobody seems to be stopping it."

--breadwithcircus.com

"I was sitting at the table on Saturday night trying to figure out which bills to pay. Times are tough. I owe $25 billion on my GM Visa card and they are bitching about payment. I've been paying the minimum and the bastards just raised my interest rate to 31%. My AIG Master Card is sitting at $85 billion and they want to lower my credit limit. Like where am I supposed to raise enough money to pay that down?

My FDIC Sears card is bumping the limit at $150 billion but I may be able to hold them off for another month. It would be nice to have some money for food this month.

Then my brother-in-law Bill comes over. He's a nice guy but he's a crack addict and hits the bottle and my sister a little hard. But a nice guy at heart.

He hits me up for a loan. How can I turn him down? As I said, he's a nice guy. He needs $700 billion. Or is it trillion? Those numbers are so high I can barely cope with them. He needs $700 billion and he needs it now so he can sort out his crack problem. I can understand that, a crack problem needs sorting out.

'Here,' I say, 'Take my American Express Platinum card and punch it for the $700 billion. They may give you a little bit of a hard time but they know I'm good for it. I pay my bills mostly on time. What's $700 billion between friends?'

I know it's foolish but he really does need help with his crack problem and I want to do everything I can. My friends at American Express are sure to understand."

--Bob Moriarty

"We won the battle. Please remember this is a war."

--Mike Shedlock

And just a side note about caring from above:
"The Bush administration has abruptly halted a program that tests levels of pesticides in fruits, vegetables and other crops, arguing that the $8 million dollar a year program is too expensive."

--greendaily.com

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[October 4]

"Less than two weeks after Uncle Sam gave American International Group (AIG) an $85 billion loan - staving off financial collapse - execs from one of its insurance subsidiaries, AIG American General, gathered for a conference at the uber-swank St. Regis Monarch Beach Resort, billed as “California’s only Mobil Travel Guide Five-Star Resort,” where ocean-view rooms start at $565 a night and “world class luxury” is the rule."

HANDI-BARF

Do you find yourself among the growing number of perceptive individuals suffering the onslaughts of modern life who don't want to cause dangerously slippery carpets, sidewalks and stairwells, yet are experiencing a steadily intensifying need to barf your guts out right on the spot, several times a day?

Well here's the solution to that nagging problem: new Handi-Barf, a compact, portable place to toss your cookies pretty close to spontaneously, anywhere irrepressible nausea is generated.

Handi-Barf is just what the intelligent and tasteful modern-day individual needs to keep in social trim without losing any throwup time from the metaphysical rollercoaster of modern living. Carried in purse, slipped into a pocket, hooked onto your tie, placed on your desk or suspended from the person in front of you on the subway, Handi-Barf affords civilized relief in a flash-- with no muss, no fuss and no apologies.

Bring Handi-Barf with you to bureaucracies, financial houses, art openings, fashion shows, political gatherings–- anywhere that old metaphoric finger can slip down your throat. And while you're reading the latest best-seller, just clip your Handi-Barf to the bottom of the book, so you can upchuck as you read; could anything be more convenient?

And if you have to watch the tube, simply suspend your Handi-Barf from the patented Handi-Barf headgear as you experience an evening of typical programming, and you won't have to stop watching, even during commercials, to ralph your tv dinner.

Or should you be unavoidably exposed to the fundamentally righteous, simply whip out your Handi-Barf and let your soul experience the truth and light afforded only by the joy that surpasseth the surrender of understanding.

No more waiting, hand over mouth! No more scrambling for a door handle, racing for a toilet bowl, groping for a wastebasket, searching for an open window, hassling with a coat pocket or wrestling with a handbag! No more panic at the surging of all those existential cookies that so urgently need tossing in these times of potentially non-stop nausea!

Handi-Barf, Inc.: pioneers in metaphysical hardware.

BACK IN THE USSA

Hard to focus these days on the beauty of the autumn... I'll go out into it and take a deep breath, do some physical work right in the midst of all that actual magnificence, as soon as I post this...

Never thought I'd live to see what's going down in the US of late, particularly under what was ostensibly labeled a conservative administration; but then again, since when have political labels actually meant anything... China, the last major bastion of socialism, now looks to be a model of financial wisdom and capitalist probity compared to the US. Karl Popper once said that he knew socialism would fail because its success hinged upon the innate goodness of man. It appears that the same is true of capitalism.

The US taxpayers are now, without their consent or prior notice, the collectively puzzled owners of several (and soon to be more) failed financial services (or is it the other way around), with their neonotional debt limit not a freshly printed and inflationary 700 billion dollars (the figure being bandied about by those who don't want the public to know what's going on just yet beyond the smoke and mirrors), but hundreds (thousands?) of trillions of dollars. Money borrowed by the US government taxpayer from the private banking consortium known as the Federal Reserve, the taxpayers' new hedge fund.

I've always wondered why, if the Federal Reserve is a private corporation, it gets to use the .gov domain; just a little thing that bugged me; a small point, really-- never been so small before, though...

.....

"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."

---Alexis deTocqueville

GREED PAYS.

"The bailout of AIG has exposed more than just the collapse of Casino Capitalism. It exposes the governmental system to be as much a sham as our economy has been! How is it that $85 billion can just materialize to bail out this one insurance company (insuring for the most part, opaque, enormously complicated and risky investments) without so much as a session of Congress? Where is the appropriations committee in this matter? Where were they when the Bear, Stearns/JP Morgan deal went down on a Sunday?

What has been exposed here is the complete absence of the United States Government as it is supposed to work. In its place are Treasury Sec. Henry Paulson and Federal Reserve Chairman Ben Bernanke making decisions about spending sums of money equal to the budgets of many small nations – money that will have to be paid back by the taxpayers, who have seen none of the gilded rewards. You have had no say – nor have your impotent representatives."

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And as to Lehman's collapse the day before:
"The quoted amount of OTC derivatives on Lehman's books are not notional value, but some silly mark to no market. The real number is trillions. When either party to an OTC derivative fails the value of that derivative instantaneously become the size of what was previously called notional value. With one quadrillion, one thousand one hundred and forty four trillion (BIS) in notional value, there is NO means to stop this financial cataclysm." --Jim Sinclair

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"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." [emphases mine. RB]

What part of 'Democracy' don't they understand?

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Paulson Bailout Plan a Historic Swindle

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"The double standard is stunning:
their profits are their profits,
but their losses are our losses."

ARE WE STILL IN KINDERGARTEN?

I shouldn't demean the sharp little brains of genuine kindergarteners by comparing them to current US economic advisors, but I just got my in-all-seriousness Economic Stimulus check, sort of money-colored, with the Statue of Liberty on it, though it was only for $300 because being an expat with a good accountant I have paid no US taxes since 1972, and $300 is all that 36 years of zero taxes deserves. Great return on investment, though!

And not to bite the hand that stimulates me, but it strikes me somewhere in preschool that the US government, which I'd mistakenly thought had an economic department filled to the rafters with top-level financial advisers who knew way more than any of my economics professors ever did - in the face of the biggest national debt in history, negative personal savings, financial entities swooning and collapsing right and left, a trillion-dollar war going on, personal debt surpassing Everest, a sky-high Sword of Derivatives hanging over the world, housing foreclosures up the cliche ("When the Treasury/Fed team moved to rescue Bear Stearns and, more recently, Fannie Mae and Freddy Mac, the $5 trillion-plus burden of risk was neatly transferred to the American citizen."), multiple industrial giants on the brink of bankruptcy, pensions and health plans in respective black holes - sends a 300 dollar check (payable in fiat money, no less) to stimulate a guy on a mountain on the other side of the world! It's somewhat less stimulating to me than it is to a guy on a mountain back in the US, since by the time I get it cashed via the labyrinthine Japanese banking system, the dollar could well be toast and I'll wind up getting stimulated by maybe half a tank of gas, whereas maybe the guy on the other mountain can still get a case of world-class beer.

As hinted at in the aforegoing, I find it it a very unpalatable reality to swallow regarding my native country-- that a select group of America's best minds (excluding those currently creating the vacuum at the very top) actually got together, brainstormed and concluded that the best thing to do right now, to begin pulling the US economy out of its 10-year, multitrillion dollar hole (the money to pay for which will of course come out of the common taxpayers' wallet) is to send everybody some pocket change! They think they're stimulating the economy by giving people back a smidgeon of THEIR OWN MONEY! Your money, in my case. Nice of you; thanks.

There's always hope, though; maybe the next administration can get the whole class into the first grade...

MY CENTRAL BANK

I go to an American ATM for the first time and all the instructions are in plain English, so helpful and direct for the newbie, no overload of boilerplate politeness, just the familiar minimalism of step A, step B etc.

I put in my card, zip through the procedure and to my strange surprise real, old-fashioned money comes out, that the core of me reflexively realizes it can buy stuff with, the bills looking just the way real money still looks in the central bank of my mind even after all these years, with pictures on it of people I learned about long ago in school-- iconic revolutionaries and generals, presidents and other members of that permanent psychopantheon, with historic buildings on the back, every denomination impractically pale green and uniform in size, the ones and hundreds differentiated only by the zeros and the portraits of George and Ben, each bill mythically charged by particulars deeply interwoven with my own history, unlike multicolored and varisized Japanese money, which, though artier, more practical and (at the moment) economically stronger, is nevertheless not fully accepted by my central bank, where it has no historic heft and does not viscerally impress me; only my intellect knows I can actually buy stuff with those pretty pieces of paper.

Ever surprising, all the insitutional minutiae the traveler never leaves behind...

MORE KOOL-AID, ANYONE?

"Flash forward: Real life, Washington, new leaders, a new Congress, old wizardry. Be forewarned: No matter who's elected president, America will soon see a massive statistical curtain pulled back, exposing a con game of historic proportions. And when that happens, you and I will suffer another ear-splitting global meltdown, bigger than today's housing-credit crisis, dragging us deep into a recession and bear market for years...

How bad is it? 'The real numbers ... would be a face full of cold water,' says Phillips. 'Based on the criteria in place a quarter century ago, today's U.S. unemployment rate is somewhere between 9% and 12%; the inflation rate is as high as 7% or even 10%; economics growth since the recession of 2001 has been mediocre, despite the surge in wealth and incomes of the superrich, and we are falling back into recession.'"

Megabubble Waiting for New President in 2009

'Numbers racket' exposes potential disaster for economy, markets

By Paul B. Farrell

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"Collapse is the risk now, and those words are no longer alarmist or poppycock. A major seizure is on the horizon, as prices have interfered with viability of commerce, especially internationally. Households face much higher costs just to arrive to work sites. Employers face much higher costs just to maintain profitability. Suppliers face much higher costs just to keep production lines flowing. Schools, hospitals, and other public facilities face higher costs in order to maintain function. The first failures and seizures will likely occur in California, where the greatest home loan abuses took place, where the biggest nastiest and most painful home price declines have taken place, where the biggest state government budget cuts have been ordered."

--Jim Willie

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UBS (NYSE:UBS) has told members of its former private banking team
responsible for rich US clients not to travel to America.
Could get arrested for something, I guess.
Laws are such a pain in the bank.

AMERICA BARELY MEETS A MARGIN CALL

And this is just the first of hundreds - thousands - of moneyshifts, most of which the paying public will never even hear about until their shares in the US (i.e. the dollar) are worth pennies, before the freeprinting currency reaches its intrinsic value and surviving US banks are nationalized.

There is blood in the water, as the sharks begin to eat their own...

The transaction is all the more odd in that Bear Stearns' purchaser J.P. Morgan is the world's largest holder of derivatives!

Foreign investors are withdrawing their support of the currency...

For a view of where all this may be headed, see the Weimar experience...

BTW, the current derivative nominative total is over 500 TRILLION dollars...

And The Street on Welfare...

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Ads for sites like this are increasing...

JAPAN BANKS ODDLY UNWILLING TO FLING GOOD MONEY AFTER BAD

This is fascinating. If this were you or me asking for money on these terms we'd be laughed out of the bank.

Citigroup, Bank of America and JPMorganChase, holders of major quantities of derivatives in which, one way or another, your bank account/pension fund may be invested, and who are losing big time as a result (right now we're only feeling the spray of the tsunami), are calling upon other banks around the world to put money into a fund to rescue whichever poor banks that in their mastery of financial acumen threw big money (i.e., yours) onto these mountains of derivatives and then sold them on, all the way to the last fool, just ahead.

Now they want everybody to chip in and rescue them. Though the proposed fund would comprise but one droplet in the tsunami of derivative-linked debt that is now looming over the world, you gotta admire the chutzpah, the sheer, imitation brass of it. The biggest holders of derivatives? Citigroup, Bank of America and JPMorganChase. ("Today, more than ever before in the short history of derivatives, one leading United States institution effectively IS the derivatives market. This company, as we will explore in this essay, is the American giant superbank JPMorganChase (www.JPMorganChase.com)."

But for reasons to do with the economic vision and loss-avoidance generally associated with financial institutions, big Japanese banks are saying: do we really want to throw this much more money out the window?

A good explanation of derivatives

Krugman's take

The coming collapse of the modern banking system
"The banks don't have the reserves to cover their downgraded assets and the Federal Reserve cannot simply monetize their bad bets. There's no way out."

Dec 22 update: Banks Decide Not to Go Ahead With Super-SIV Fund, WSJ Reports...
They'll make the Scrooge announcement on Christmas eve, to take advantage of extended holiday amnesia... Mortgage holders, fund investors and pensioners should be this crafty...

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?"

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