How many times has the FED given Wall Street access to 'Free' Money?


In the 'Old Days', WE would call this Money Laundering.


The same 'Dollars' are being used to drive up prices & the FED has lost control of the glorious 'Wealth Effect', so nothing they do will instill Confidence in the Markets or Real Economy.


Central Banks have lost control & are showing just how ignorant they truly are.


Once a 'Crash' occurs nothing will work to stop it; "If it didn't work the other times, why would it this time?"





Bubbles have grown faster and bigger, with none of the past sins being resolved...in my opinion
• Santelli Slams "Don't Ignore The Long-End... Recessionary Pressures Are Building"






Snip...

















• David Stockman: The Born Again Jobs Scam, Part 2: The Fed’s Labor Market Delusio





Snip...


"As a practical matter, however, the Fed cannot stimulate additional
"spending” unless it can also cause the economy’s leverage ratio
to rise, thereby supplementing "spending” derived from current income
with purchases financed by freshly minted (incremental) credit.
Yet the flood of demand by which the Fed endeavors to "pull” idle and
underemployed workers back into production cannot be activated if the US
economy has reached a condition of peak debt, as I strongly believe to
be the case. Indeed, when the credit expansion channel is broken and
done, all the Fed’s liquidity "accommodation” flows into the Wall Street
finance channel where it pulls up the price of existing financial assets, not the employment rate of idle labor."





 
 
 

If you want a scary read, take a look at the OCC's 4th qtr report on the derivatives market activity. You can find it here

What you will find is some interesting tidbits that bolster my argument for saying if one of the major banks goes bust, the whole financial system collapses overnight. For example:

- The notional value of all the derivatives held by the banks is some $237 TRILLION dollars. This is more that the GDP of all the countries in the world added together.
- Just the credit derivatives, roughly 5% of the notional, comes to $11.2 TRILLION, or about the same as all the deposits in all banks and financial institutions put together.
- The top 4 banks for derivatives are JP Morgan, Blight-on-America, Citi, and Goldman. They account for 93% of all the derivatives. Again, it's a mutual suicide pact that they hold the banking system hostage with.
- "Interest rate products", which is a euphemism for gambling bets on which way interest rates will go, represents 82% of the total notional derivatives. This means that if even 1% of those contracts fire off because of a sudden interest rate swing, there is insufficient capital amongst the top 4 to survive such.
- Think about the Credit Exposure to Risk-Based Capital ratio, i.e., how many chips do they have on the table vs. money to back up their bets. The consolidated average for the top 4 is 298.4% or three times as many bets as they have money to cover them.
- Of the credit derivatives 11.2 large, roughly 3.75 of that is sub-investment grade contracts. So if the economy really tanks, those 3.75 TRILLION worth of derivatives go up in smoke.
- The top 25 commercial banks, savings associations, and trust companies have assets totaling $9.37 trillion. Their derivatives holdings are $236.6 trillion. I think you can see the math doesn't really work there in the event of an economic shock.

Think about these little known facts when you're considering whether you should be putting even more money into your 401k/IRA/investment account at a major institution. If even one of these players goes south, even if it's not the one you have money in, you're money will still be just as "vaporized" as the customers' of MF Global.

$237 Trillion in Derivatives = Fantasy Land = Anyone believing they will recoup those dollars needs a Mental Evaluation



Controlled Bankruptcies, Reorganize Debt & Everyone will take their hit, but at the same time they move to Strengthen the dollar.

Fewer Dollars in the Bank, but WE won't need as many to make those typical purchases; The Free-Market will dictate real values.

Bankruptcy will be the only way to stop this Deflationary path WE are on.



 

Fantasy or not (I'm on the side of fantasy), no-one seems to be interested in getting rid of these things or even regulating them such that they don't pose a systemic risk to the banking system as a whole. The problem is if these banks go bankrupt with these toxic derivatives still on the books, there isn't enough money in the money supply IN TOTAL nor could we print enough money to even cover the deposits of the big banks. Back in 2008-2009, most of the banks that went bust were undercapitalized by 20-40%. Guess who had to make up the difference? Yep, you and me pal thru the FDIC. The FDIC doesn't have even a fraction of the money that would be required to cover people's deposits if ONE big bank goes bust, much less 4-5. So, they keep pretending as though they are solvent, keep letting them gamble with HFTs in the stock market (which the Fed dutifully supplies the feedstock for), keep letting them manipulate commodities prices and blow other kinds of bubbles because they KNOW that at the end of the day, they are a protected class and the .gov will cover their bets no matter how stupid.

Keep in mind that there have been tons of corporations who have borrowed massively not because they need the money, but because the cost of capital is so artificially low right now, they can employ the money to make more than the interest they are paying on that money. So, it's a no-brainer for these outfits. But, unlike most times when a company goes into debt to expand, buy capital equipment, and fund new ventures that build new markets/customers/revenues, this money they borrow now is simply arbitrage between the silly low cost to borrow and what they can make in the financial markets. It's a calculated gamble that everybody makes out on, until they don't. Then they have this massive debt load and no way to expand when the economy does pick up.

BTW, I'm in the camp of a little deflation now and again being a GOOD thing because it restores price and wage stability. A constant "2%" Fed target means your money is ALWAYS reducing its purchasing power. I'd like things to go the other way for a while. Or, at least cycle up and down around the zero line so that the purchasing power of my dollars remains roughly the same over time. With interest rates near zero, there is no way to "beat inflation" without risky "investments" which can and do go poof at inopportune times.

Short term: Deflation can be a fantastic thing for all holding Cash.
Long term: Since everyone expects a cheaper price, many businesses won't be able to keep their doors open; More People will lose their job; Social Services will be overwhelmed, i.e. think Depression era Soup Lines, not today's hidden ones; Federal/State Tax Revenues will Plummet...Their next 'Crisis''



Then those that had their Cash, will wish they didn't spend it because they needed it to pay the Taxman.
Deflation will cause major, major failures, Corporate, Small Business & Individually, so as fixed costs increase, while OUR take home pay keeps Shrinking.



As the Public demands cheaper Pricing, Business will demand Cheaper Labor, but Government will demand higher Tax Revenues...Doesn't quite fit the Laws of Economics.
ETA


I left out the Technological Advances that a few have mentioned here, from the Federal Corporate Welfare giving access to 'Free' $$$; Shrinking Labor Market = Shrinking Tax Revenues = Who's left Paying all OUR 'Guaranteed' Retirement/Medical Programs?
 

See, the problem with the above is that there's no historical evidence to support the notion that deflation results in soup kitchens. In the past, particularly the Depression, deflation was the OUTPUT of the underlying economic problems, not the CAUSE. In the electronics world, the consumer has been demanding lower prices for decades. Yet, that segment of the industry has continued to grow and thrive. Where we run into problems is when companies try to "cheat" in the supply-and-demand game by trying to outsource their production to other countries that have penny labor and no constraints at all. This is a self-defeating approach as the very people who would be the customers for the products being produced can no longer afford them and/or have no money with which to buy them because they are unemployed. Furthermore, in many parts of the business and financial worlds, there is huge effort given to strategies to combat the potential effects of inflation because it is known that the Fed will do whatever they think they can get away with to CREATE inflation, even where none would normally exist. This results in all manner of mal-investment, similar to that for tax-avoidance strategies. Which brings me to the second point:

The "Government will demand higher Tax Revenues" comment is right on target and a certainty to happen, regardless of the economic conditions.

I know of one thing that could care less about Deflation or Inflation...Profit Margins

Over the past few months, specifically, I keep hearing people say, 'Well, at least the bills are still getting paid'; Work to Just get by...What?

More and more businesses on 'Main' street are getting behind, most seem to use the 'bad winter' excuse, but the problems are systemic.



For a few, 'Record' numbers might walk through their doors, but most are watching their Profits disintegrate; Not a good long-term formula.

I can not remember a more frustrating time



Whatever, WE don't have time to worry about what WE can't control, OUR focus needs to be on what WE can directly affect, so keep working hard People...Winners always Win!



 

 
















































































































 

 

Thanks to the 'Free' money being handed out by the FED/Treasury, Corporation are advancing Technologically at faster pace than the Real economy can adjust to absorb the Unemployed, plus, federal hand-outs are allowing most to enjoy Temporary Retirement.





When a Free-Market Capitalist gets it wrong, progress is delayed.


When Socialized Corporations get it wrong, they get unlimited 'Mulligans'





The FED = Bank/Corporate Entitlement


The Treasury = Civilian Entitlements


OUR Congress = Enables all of It, for a Nominal 'Fee'


OUR President = Solidifies It, for a Lucrative 'Legacy'





No Where in OUR Constitution can you find the language needed to Support these Actions, no where.





The closest example would be the 'Old' Mafia & how Laundered Money was used to keep it in 'check', of course when Cash didn't work Involuntary 'Suicide' was very effective





Authorized to Tax, but Taxation without Representation leads to trouble...Scalia : If Taxes Go Too High 'Perhaps You Should Revolt'?





What's the message, maybe, the only way for a Citizenry to end 'questionable' policies would be to stop Funding their Bureaucracies?


Who has the balls to stand on the Platform?




The Slogan for the next few Election cycles: 'FIRE A PIMP'




Whatever, let's debate Gay Marriage, Abortion, and Argue which Party best Represents the People of OUR Constitutional Republic





WE are still breathing & have Internet Service, Life is Good

*I still can't figure out which scope to mount on my Knight's LPR, good out to 600m!!!
 
 

'Almost every asset is overvalued'

 
 
 
 
 

So how do we prepare for the reduction in quantitative easing?

Good.  I read the article and it says to have cash.  I moved to cash, but did so before the market blew past 14,000.  I got out to early, but oh well.

What good is cash going to be when the dollar becomes worthless?

Current Market Volatility is a run up to the coming Correction/Crash, so the 'Players' are planning for a Stock 'fire-sale', to jump-start their next bubble.




You'll need cash to play or at least a line of Credit
That would be the best case scenario, in my opinion.
Personally, I think OUR 'New' Great Depression will finally begin to show itself & cause the pain needed for a Citizenry to finally hold people accountable.




Amplified by Deflation, that will leave Government, especially State, searching for ways to increase Tax Revenues.




So in the end, it really won't matter how much Cash/Wealth WE have, it will never be enough to cover all costs.
At least, that's what this Internet Genius thinks
 


 

It's never about what they say, but how they act...A Saga known as the Big Lie
These 'Oligarchs' will never admit failures, but WE sure are feeling them, in their Ingenious 'Recovery'
eta


U.S. economy slows drastically...


Trillions of Dollars for this?



 

New Speak. "Your gracious and compassionate govt has decided to grant everyone a wonderful dip in a nutrient-rich organic solution!"
Tomac

 

Weather, my a$$. How about Ocommiecare kicking in? How about all those companies who held off dumping people until after the holidays even though their 4th quarter sales/earnings sucked rocks? How about thousands of new, spiteful regulations kicking in 1 January?

And, oh, that +0.1% was more like a -5%. It's just if they actually print a negative number, then the obvious piss-poor Odumbo policies will be blamed for it. We can't have that!

I'll tell you that from what I'm seeing, the problem is getting substantially worse. People are not going to the stores towards the end of the month any more. They're running out of month at the end of their money. We're seeing that coming earlier in the month now, with the falling-off-the-cliff happening a week earlier than it had been most of last year. It's spooky to be at a mall, Wal-Mart, Target, etc. and seeing employees standing around twiddling their thumbs because there are NO customers late in the month.

Another tidbit on the real state of the economy. The night before Easter, we were killing time and drove by a few places. Target had a few customers getting their last-minute Easter stuff, Wallyworld had a few more. The biggest crowd (by far)? Dollar Tree. That pretty well sums it up.

Gee, could this be a result of, perhaps, this? The Real Unemployment rate

Our investment guy stopped today and went over our stuff.  We averaged 8% gains last year.  We're invested very conservatively because we have businesses that are fairly risky.  He thinks we should increase our risk.  I told him "no".

 




























































 

There's kind of an interesting trend gaining ground recently.  We raise and sell plants, both at a hobby level (me) and professionally (my wife). Demand for garden plants and seeds has gone up dramatically over the last couple of years; well beyond "fad" level.  It's not just a trendy peak... for the first time in our 25-year+ experience in this, we can't keep enough garden plants on the shelf to meet demand.

I think people sense that the day is approaching when they're going to have to depend more on themselves, and are taking to gardening, food preservation, etc. in self-defense.  Personally, I think that's good (and long overdue), but in another way it's kind of scary.  Those who have the means to produce at least some of their own food to defray grocery expenses are on the right track, but very few (probably a fraction of a percent, actually) could ever be completely self-sufficient.  Others, like the people clustered into big cities like rats in a cage, don't stand a chance.

I fear there are scary times ahead.

Or, in other words, "You ain't seen bad yet but it's comin'"

17 Facts To Show To Anyone That Still Believes That The U.S. Economy Is Just Fine

 

 












 

 

What are you going to do with 5,000 strawberry plants?  That's a lot of wine and jam.

Interesting story on CNBC today.
















 


 

damn

Everyday I wake up and hope to find out that I am insane thinking it is collapsing, for my kids, and then articles like this just show me I am perfectly sane and that it is really happening.

This is the picture on the front page of CNBC Europe this morning....















































 

Any of this look familiar?

“How to Create a Social State”, by Saul Alinsky

 

 There are eight levels of control that must be obtained before you can create a social state.  The first is the most important.

   

1) Healthcare – Control healthcare and you control the people.

   

2) Poverty – Increase the poverty level as high as possible.  Poor people are easier to control and will not fight back if you are providing everything for them to live.

   

3) Debt – Increase debt to an unsustainable level.  That way you will be able to increase taxes – and this will produce more poverty.

   

4) Gun Control – Remove the ability for citizens to defend themselves from the government.  That way you will be able to create a police state.

 

5) Welfare – Take control of every aspect of their lives (food, housing, and income).

   

6) Education – Take control of what people read and listen to – take control of what children learn in school.

   

7) Religion – Remove belief in the God from the government and schools.

   

8) Class Warfare – Divide the people into the wealthy and the poor.  This will cause more discontent and it will be easier to take (tax) the wealthy with the support of the poor.

Double click, sorry.

Looks very familiar and is going ahead with gusto.
I don't think they will get what they want/need from #4 in time to succeed but then I'm an optimist.

Hooray!
U.S. payrolls surge, jobless rate hits 5-1/2 year low

Oh wait
One Million People Dropped Out Of Labor Force In April: Participation Rate Plummets To Lowest Since 1978

92,594,000 AMERICANS NOT WORKING HITS RECORD



...and it's all ignored



F'in Pimps



 
 

 





 

Cool tech.   We could eliminate the need for all commercial truck, cab, and delivery drivers...  right now.  

So what is the purpose? Hasn't it been proven time and time again that socialism doesn't work as a model for government?

What motivates the would be tyrant or the wild-eyed idealist who want to change the world?

If reason and good intentions motivated man this would be a very different world than the one we live in.

Couldn't have said it any better.

I can only prepare for me and my family to last as long as we can. I think we (America) will have a long slow death, not a cataclysmic one. I only hope it happens before I get too old to fight off the starving masses.


Jim

Me and my family are pretty much in the same boat but I would not be surprised to see a black swan or natural crisis be used as an excuse to implement virtual martial law before things become completely uncontrollable for those in power as an (ultimately futile) attempt to maintain (the illusion of) power/control (Reichstag fire, anyone?).
Tomac

Kyle Bass Sums It All Up: "Proceed With Caution"

eta link: https://www.youtube.com/watch?v=VBPZ58dzjfE



Take the time & watch this.

 

GREAT NEWS!  





















































 

Yes I would like fries with my order of donuts.

I wonder what is going to happen once obamaca the affordable care act fully kicks in and earnings drop off for more health care related businesses.