ARROYO GRANDE, Calif. (MarketWatch) — "How my G.O.P. destroyed the U.S. economy." Yes, that is exactly what David Stockman, President Ronald Reagan’s director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, "Four Deformations of the Apocalypse."
Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."
Jobs recovery could take years
In the wake of Friday’s disappointing jobs report, Neal Lipschutz and Phil Izzo discuss new predictions that it could be many years before the nation’s unemployment rate reaches pre-recession levels.
Yes, Stockman is equally damning of the Democrats’ Keynesian policies. But what this indictment by a party insider — someone so close to the development of the Reaganomics ideology — says about America, helps all of us better understand how America’s toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.
But why focus on Stockman’s message? It’s already lost in the 24/7 news cycle. Why? We need some introspection. Ask yourself: How did the great nation of America lose its moral compass and drift so far off course, to where our very survival is threatened?
We’ve arrived at a historic turning point as a nation that no longer needs outside enemies to destroy us, we are committing suicide. Democracy. Capitalism. The American dream. All dying. Why? Because of the economic decisions of the GOP the past
That is, with all my pesky math and charts like this:
Remember that I’ve been preaching for a while that we embedded a roughly $500-600 billion structural deficit into the economy post-2000? And that now, in response to this recession (and in a refusal to admit that we have been playing credit drunk) we’ve now embedded a roughly 10% structural deficit – three times the former?
Before you consider me a chucklehead for having the temerity to look at the math you might take it up with the BIS - the Bank of International Settlements, or the "bankers’ bank" – which agrees with me:
According to the Bank for International Settlements, the United States’ structural deficit — the amount of our deficit adjusted for the economic cycle — has increased from 3.1 percent of gross domestic product in 2007 to 9.2 percent in 2010.
Gee, you mean they looked at the same chart I’ve been preaching from?
This stuff isn’t hard folks!
Now Einhorn of Greenlight Capital, a rather-well-known hedge fund manager, is sounding off. He said:
A good percentage of the structural increase in the deficit is because last year’s “stimulus” was not stimulus in the traditional sense. Rather than a one-time injection of spending to replace a cyclical reduction in private demand, the vast majority of the stimulus has been a permanent increase in the base level of government spending — including spending on federal jobs.
This is exactly what I’ve been saying now since this mess began and the "response" became clear: Government didn’t "stimulate", it instead built in structural deficits – just as it did in 2003.
But you can read David’s missive any time you’d like, or the BIS’.
The key question is why would the government take such a step?
Some would claim that it was about trying to exert more control over the economy, as of there is some sort of grand conspiracy extant to take every piece of control you have over your life and transfer it to government.
I’m a bit more realistic in my assessment – and less conspiratorial.
Government did this because it was the only way to avoid having to admit that we have too much debt in the…
I do not know what to think about this, except to just offer it up to you for your own information.
I am disappointed, however, that only the blogs, and almost no one in the mainstream media, have bothered to cover this story and to speak to the principals, and to either debunk them, support them, or even consider what they have to say.
This really is like the Harry Markopolos story, trying to get a hearing on the Madoff ponzi scheme, and being repeatedly ignored, intimidated, and discouraged in every way possible by the establishment, and even fearing for his life.
Even if this is a mistake, a hoax, some conspiracy, it deserves a proper hearing and an airing in the public. Ignoring it raises even more questions, and serious concerns about the integrity of the US markets. If instead of a proper airing there are only the smears, and disinformation, and the usual sly ad hominem attacks, or even worse, I will begin to believe that it is true.
I cannot believe that testimony is being completely ignored. I do not understand why this is a ‘national security’ issue. It seems just too bizarre to me.
Do people inside the trade know something that we don’t know? Are these fellows frauds or just mistaken? Is this a hoax? Part of some conspiracy?
Or is this something coming right at us, that will end up hurting the public once again, as the rampant fraud in the financial markets has done so thoroughly.
Is there is something going on then it is time to bring it out into the open. If it is national security concern, or more properly the national interest, because it involves the US banking industry, how long do they think they can keep this sort of thing quiet?
If this is something else, why is it not aired, investigated, and nipped in the bud?
I am trying to keep an open mind on this, but it is not being made any easier by what looks like a curtain of silence while the stories and counter-moves are prepared.
I was disappointed that in the interview they never seemed to discuss the hit and run car incident.
Because of my former career at The Disinformation Company, Ltd., I am often asked—I was asked this yesterday, in fact—if I have ever investigated a conspiracy theory that I was skeptical of and then become a convert? Nope. Not once. And for the record, I am not a conspiracy theorist. I just played one on TV.
First of all, you have to parse the term. There are criminal conspiracies—events that can be proven in a court of law or that are a matter of historical record; and then there is the Montauk Project/David Icke side of things. Iran-Contra, the CIA shenanigans we’ve all heard about, Watergate, etc., these were real events. When you get into the territory of aliens, the 9-11 nonsense, and the “reptilian beings” like the Queen, the Royal Family and the Bushes, I just pretty much tune it out. Been there, done that. I went down that rabbit hole when I was a teenager and came back out again on the other side.
Conspiracy theorists tend to be people who have been a bit cut off, from, let’s just say, the power centers of the world. If you’ve never been to Washington, DC or Manhattan or been in a Beverly Hills country club, or know how the news gets produced, then the way the world runs must seem very mysterious. Like someone is in control. But that’s not true.
People who are in positions of power—industrial, political, financial, media power—went to high school like the rest of us did. The class president type who went on to become a congressman did so because he could. He got into that position of power because… people voted for him and not for the other guy. And don’t be surprised if rich guy A makes a…
Once again a series of videos is making the rounds touting how evil short sellers destroyed Bear Stearns. I was asked to comment on this.
The video makes a bunch of assumptions
1. That whoever bought way out of the money Bear Stearns PUTs "knew" something and illegally acted on it.
2. The same institution that bought the PUTs was illegally shorting shares.
3. There is a conspiracy to protect those evil doers.
How The System Really Works
Fact #1: When someone buys PUTs the market maker or counterparty who sold them is short those PUTs. This is a mathematical statement of fact.
Fact #2: The market maker who sold the PUTs, shorts stocks as a hedge against those short PUTs.
Fact #3: The lower the share price, the more shares the market maker has to short to stay delta neutral.
Fact #4: Market Makers are not governed by naked shorting rules
The video alleges that it was the person buying way out of the money PUTs that was doing the shorting. The reality is the market makers who sold PUTs were most likely those doing the allegedly "illegal" naked shorting.
To stay delta neutral, the market makers were forced to short more shares the lower the price dropped. Also remember this happened with every PUT at every strike all the way down, not just on that batch of way out of the money PUTs.
It should not take a genius to figure out how easily this could spiral out of control.
Who Was Shorting?
It was probably Goldman Sachs, Citigroup, Morgan Stanley, Merrill Lynch or whoever sold the PUTs. Moreover, those market makers probably lost money shorting because of how quickly the stock plunged.
The irony is everyone blames the naked sellers for making a fortune by short selling when the PUT sellers lost more on the PUTs they were short than they gained shorting the shares.
Did Someone Know Something?
The video alleges that someone "knew something". Well someone did know something, and that something is what we all knew: Bear Stearns was not only the most leveraged of the large institutions, but also held the highest concentration of subprime mortgage garbage.
Also other institutions could see or at least feared a run on the bank at Bear…
The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.
We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.
Treasury Secretary Timothy Geithner was head of the New York Fed at the time of the AIG moves. The hearing before the House Committee on Oversight and Government Reform also focused on what many in Congress believe was the New York Fed’s subsequent attempt to cover up buyout details and who benefited.
By pursuing this line of inquiry, the hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve.
This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.
As Representative Marcy Kaptur told Geithner at the hearing: “A lot of people think that the president of the New York Fed works for the U.S. government. But in fact you work for the private banks that elected you.”
Let’s take Geithner at his word that a failure to resolve the insurer’s default swaps would have led to financial Armageddon. Given the stakes, you might think Geithner would have coordinated actions with then-Treasury Secretary Henry Paulson. Yet Paulson testified that he wasn’t in the loop.
“I had no involvement at all, in the payment to the counterparties, no involvement whatsoever,” Paulson said.
Fed Chairman Bernanke also wasn’t involved. In a written response to questions from Representative Darrell Issa, Bernanke said he “was not directly involved in the
One of America’s wealthiest men was among six hedge fund managers and corporate executives arrested Friday in a hedge fund insider trading case that prosecutors say reaped more than $20 million in illegal profits and should be a wake-up call for Wall Street.
Raj Rajaratnam, a partner in Galleon Management and a portfolio manager for Galleon Group, a hedge fund with up to $7 billion in assets under management, was accused of conspiring with others to trade based on insider information about several publicly traded companies, including Google Inc.
U.S. Attorney Preet Bharara, putting total profits in the scheme at $20.6 million, told a news conference it was the largest hedge fund case ever prosecuted and marked the first use of court-authorized wiretaps to capture conversations by suspects in an insider trading case…
Robert Khuzami, director of enforcement at the Securities and Exchange Commission, said the charges show Rajaratnam’s "secret of success was not genius trading strategies."
"He is not the master of the universe. He is a master of the Rolodex," Khuzami said.
Rajaratnam, 52, was ranked No. 559 by Forbes magazine this year among the world’s wealthiest billionaires, with a $1.3 billion net worth…
The others charged in the case were identified as Danielle Chiesi, 43, of New York City, and Mark Kurland, 60, also of New York City.
According to court papers, Chiesi worked for New Castle, the equity hedge fund group of Bear Stearns Asset Management Inc. that had assets worth about $1 billion under management. Kurland is a top executive at New Castle.
A criminal complaint filed in the case shows that an unidentified person involved in the insider trading scheme began cooperating and authorities obtained wiretaps of conversations between the defendants.
In one conversation about a pending deal that was described in a criminal complaint, Chiesi is quoted as saying: "I’m dead if this leaks. I really am. … and my career is over. I’ll be like Martha (expletive) Stewart."…
Prosecutors charged those arrested Friday with conspiracy and securities fraud…
A separate criminal complaint in the case said Chiesi and Moffat conspired to engage in insider trading in the securities of International Business Machines Corp.
According to a criminal complaint in the case, Chiesi and Rajaratnam were heard on…
The financial disaster taking place at the U.S. Government costs one heck of a lot of gold and silver. I doubt many precious metals investors understand the tremendous amount of gold and silver it takes to service the U.S. debt or supplement the massive budget deficits.
I was actually quite surprised by the results when I compared the calculations. In 2015, the U.S. Federal Government paid $402 billion just to service the interest on its debt. This figure can be found at ...
Summary: The stock market rises on days when the FOMC releases its policy statement, probably as a result of some uncertainty being removed for market participants. This pattern has existed for more than 30 years. The Fed's ability to "jawbone" the market higher is no more exceptional now than it was during any prior bull market.
* * *
Morgan Stanley's chief economist this week stated ...
The U.S. economy is on track to grow at a 2.4 percent annualized rate in the third quarter, the Atlanta Federal Reserve's GDP Now forecast model showed on Friday, following the latest data on inventories, trade and consumer spending this week.
Every day that goes by brings more shady deals from Trump's past – now Cuba, more stuff about his foundation, his taxes! No wonder he doesn't want to release his taxes either – who the heck knows is buried in there.
In the meantime, Trump gets up at 5:00 AM to tweet about Alicia Machado! What a despicable coward little man-child!
I admit I find it hard to keep up the sense of humor about things these days. We laughed a lot during the Bush years, didn't we, my fellow pony aficionados. Trump should just make me laugh and laugh and laugh and laugh. But with Bush we could sorta pretend that people voted for him because they didn't quite see him for what he was. There's no doing that with Trump. Trump is Trump. He won't win, but a lot of...
Below looks at Commodities ETF DBC over the past decade. Since the highs in 2008, DBC has been a great asset to avoid. Is it time to start paying attention and potentially own this hard hit ETF? Check out the rare price situation below in DBC.
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The CRB (Commodities Index) has been down 5-years in a row, this has never happened in the history of commoditi...
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I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.
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Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer. One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."
Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.
Genetic components are the DNA sequences that are 'inherited.' Some of these genes are stronger than others in their expression (e.g., eye color). Yet, some genes turn on or off due to external factors (environmental), and it is und...
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