Wednesday, July 11, 2012

Un po 'di questo e un po' di quella (A Little Of This And A Little Of That)

The few who understand the system, will either be so interested in its profits, or so dependent on its favors that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantages...will bear its burden without complaint, and perhaps without suspecting that the system is inimical (harmful) to their best interests  - The Rothschild brothers of London writing to associates in New York, 1863
Lest anyone think that I'm a Romney supporter, given all the criticism of Obama that I issue, I found this to be not only funny but truly awesome:   “Romney has a Koch problem” (the name is pronounced "coke").  That was the banner being towed by an airplane over the Hamptons, where a couple fundraisers were being conducted for Romney this past weeekend:  LINK

If you ever want to figure out who the puppeteers are that control the puppet strings of a politician, look to the biggest campaign donors.  So for instance, with Obama it's several Wall Street firms and individuals like JP Morgan, Goldman Sachs, Jon Corzine and Warren Buffet.  Now we see that the Koch brothers will have a heavy influence on Romney, should he be elected.  In addition to the double dose of social and moral regulation and control that will come with a Romney White House, the Kochs are truly the modern day equivalent of robber barons.  I'd rather have my teeth pulled out one by one with no novacaine than live in a country influenced by Romney and the Kochs.

How are your muni bonds looking?  LINK  San Bernardino is going to be the 3rd city in California to file bankruptcy in the last two weeks.  It starts slowly and then avalanches.  Anyone who thinks this can't happen in their own city is either hopelessly naive or tragically ignorant.  Most municipalities are running some kind of spending deficit.  If you look into the San Bernardino situation, the city council was given fraudulent budget reports for 13 of the last 16 years. Imagine that?   San Bernardino isn't unique in this regard.  This is going on across the country.

A few months ago I wrote some commentary explaining why the housing market had not bottomed and showed how the recent "stabilization" being promoted in the media as a "bounce in housing" was really nothing more than a big moratorium on foreclosures.  I suggested that 2012 would see a resumption in the escalation of foreclosures.  Well wouldn't you know it: "FHA's mortgage delinquencies soar"  LINK.  The banks and FNM/FRE have been working overtime to work off their REO foreclosure inventory, mostly selling them as rentals to "investors," in order to prepare for the next cycle of foreclosures.  As an aside, it was reported that over 45% of the mortgages in San Bernardino are under water.  Look out below.  If you bought a house in the last 12 months thinking it was "a great value and investment," my condolences.

Finally, I wanted to share some thoughts I sent to GATA's Bill Murphy last night, as he had reflected in his nightly "Midas" report LINK that something about the markets "spooked" him last night:

I just read where you felt "spooked" all day.  Same here.  I can't put my finger exactly on it but I think it has to do with the PFG thing.  That this happened after Madoff and MF Global is just incomprehensible.  Either the people enforcing the laws are retarded or are in on this looting.  My bet with Gary Gensler is the latter.

If Obama was merely just doing his job as President, he would make Gensler step down from the CFTC and go away.  If Obama is worth anything at all as an ethical, principled, moral human being  he would have Gensler investigated.  This would include all email correspondence and phone logs at the CFTC AND his private residence/cell phone.

What is "spooky" about what is going is that our system is being completely looted while the Government stands by and enables it.  The fraud and corruption runs deeper than any of us can possibly comprehend.  The public in general is clueless other than to know vaguely that "things ain't right."
Our country is disintegrating before our eyes.  Buona sera a tutti (Good evening to everyone).


  1. The Seeds For An Even Bigger Crisis Have Been Sown

    L.S.: Do you think the BRICS, SCO and ASEAN countries follow a very different gold policy than the West?

    R.S.: Absolutely. They want to cast off the shackles of the US dollar. There are a number of examples indicating the increasing skepticism vis-à-vis the US dollar. For example South Africa has already taken concrete steps to replace the US dollar as the favoured currency for international trade transactions. From now on, the country wants to invoice in Chinese renminbi when trading with other emerging countries. Standard Bank, the largest African bank, expects trading volume in renminbi between China and Africa to hit USD 100bn by 2015. China seems to regard South Africa as the gate to the entire African market.
    China and Japan, too, want to increasingly avoid the USD. In December, Prime Minister Wen Jiabao and the Japanese Prime Minister Noda agreed to promote trade in yuan and yen. China has become the most important trading partner for Japan (USD 340bn per year). The two countries hold the biggest volumes of US Treasuries. Therefore, the importance and symbolic power of this piece of news cannot be ver-emphasised.

    L.S.: Quite a lot of people want to tell their audiences that gold is in a bubble. Your take?

    R.S.: Well, while gold remains a highly popular issue for discussion, it is not a highly popular asset in portfolios. The underweighting of gold by institutional investors is particularly profound. Institutions continue to hold only 0.15% of their assets in gold. I do not expect an imminent paradigm shift, this is practically impossible for regulatory reasons. But even a weighting of 2-3% in institutional portfolios would trigger enormous effects.
    The allocation of investment capital in gold mining shares is similarly insignificant. The market capitalisation of all 16 stocks in the Gold Bugs index amounted to USD 180bn as of the end of June. By comparison, the monthly budget deficit of the US was USD 198bn in March alone. To make a log story short, I would say no, gold is in no bubble at all.
    L.S.: Do you welcome the possible new classification of gold as a zero-risk asset? What consequences would this likely have?

    R.S.: Yes, absolutely. At the moment it is only a proposal, but I think that the decision would have a wide range of implications. Gold would officially become “as good as gold” again and would rank on the same level as cash. The opportunity cost of holding gold will be reduced massively. There’s also a number of other aspects that I called “the renaissance of gold in finance”.

  2. Moral bankruptcy always flows down. Obama, the greatest fraud ever, turned a blind eye to any kind of restorative justice. The corruption is now in your face. Sooner or later, people will arm themselves and drag out the guillotines.

    You cannot have this type of lawlessness for long. Today, the government extorted another 23 million and rather than compensating the victims...compensated themselves. Like always.

  3. Nice GG tank job today. Must be more manipulation huh? I guess the miners just keep looking better all the time-if you're shorting them..

  4. Ciao Dave e complimenti per il tuo italiano.
    Comunque, non è solo il TUO paese che si sta disintegrando davanti ai vostri occhi, ma anche l'EX-Bel Paese !
    Comunque, sursum corda e ... tiriamo avanti !


    1. Ciao Marco! Come stai?

      Cosa significa "sursum corda?"

    2. Sto bene, grazie (caldo a parte !).
      Sursum corda è latino e significa: in alto i cuori, cioè: forza e coraggio ! (quello che ci vuole per sopportare questi tempi orrendi)

  5. I'm not really much of anything. Not a conspiracy theorist, not a day trader, not a protestor etc... With that, I was born in this country and until 911, I used to consider myself a person that loved his country.

    The one thing I am is an engineer, and I was formally educated on how to think, analyze and problem solve. In fact, I thrive on such things.

    What astounds me is the complete and total "sheep" mentality of my fellow citizens. In fact, many are worse then sheep, they actually think they are Sheppards and go around telling the sheep what they are clueless about.

    I mean, who can't see the political system in the US is done? They are all idiots. I'm sorry, but I even have to throw Ron Paul in there because he thinks he can somehow fix the system by using the system.

    The reason I even bring this up is your blog today. You seem to be one of the few that at least gets it. I can hardly stand to listen to these democrat and republican morons try to convince me they aren't just as corrupt as the other guy.

    My last comment concerns the truth. If anyone has one ounce of integrity left they will watch this investigation and consider what it really means. The truth is, the government had to be involved in 911. This is not speculation, it is derived fact based on simple investigative journalism supported by witness testimony.

    So wake the hell up and realize the government doesn't give a rats ass about you or your family and it is certainly is not for the people. You think you got a scary feeling about something that occurred over the weekend? I got news for you and it is nothing good. There is a mad man at the wheel, the pedal is to the metal and we are headed off a cliff.

    1. I am an engineer, myself...probably one of the most despised professions in America today, I even worked in the Towers. Hell, I was on the B4 level that morning testing Medium Voltage cables, but I had to leave to go across town to a meeting at one of the Squid's facilities for a Project meeting. As much as I hate to admit it, GS saved my life that day. But I digress, as part of your 911 conspiracy non-sense, you should ask yourself how the hell can you set up shape charges down the length of a building 110 story building without anybody knowing. That would have taken months, say as long as an asbestos abatement project in which all the core closets of the building resulting in lovely "Danger - Peligro" signs and locking them off not only to the public but to most authorized PA personnel. Something like that would put all the pieces of the puzzle together. Unfortunately, I have to believe that it was all an act of a couple of sand monkeys with a couple of flying lessons under there belt performing precise aerial acrobatics with commercial jets otherwise I would have to leave this country behind and it is just too comfortable on my Sofa where I reign as King.

  6. Romney cannot and will not save us but Obama will surely destroy us. Romney may well be nothing more then a place keeper until someone smarter and more willing to take on the challenges comes along.

    1. The good news is bonkers Bolton is one of Romney's senior advisors and a potential Secretary of State. In bonkers own words “what would a negotiated deal look like? Our goal is to deny Iran nuclear weapons; Tehran manifestly wants the opposite. What is the compromise? Iran gets to keep a small nuclear weapons program?”

      Just in case you are unaware Iran does not have a weapons program, so clearly it wouldn’t be part of any negotiated deal for Iran to “keep a small nuclear weapons program.” This sort of logic doesn't stop Romney or bonkers asking for an invasion not to be on the table but in my hand.

      If you think things are bad now just look at the world after Iran permanently destroys Saudi Arabia's oil, which they have threatened to do and which everyone agrees they have the ability to do. A world with bonkers and Romney at the helm is going to make the road look like a film about a Sunday school picnic.

      The mormons have an old prophecy that in it's trouble a man from the mountains of Utah is going to ride on a white horse to Washington to save the country. This is most likely to be one of the four horsemen bringing on armeggedon and his name is Romney ably advised by bonkers Bolton.

  7. My muni's are truly doing fantastic. Bought PML when it sunk to $10 a year and a half ago, now up 30% + fat interest payments. Yes, it makes no sense and I wouldn't buy any here but this has been a great run. Thanks for asking :)

  8. Sofa King , I 100 % agree with you ! I'm tired of hearing all these conspiracy stories about the U.S. Gov. in on the act. Thanks for your take on it. How much more does someone need to concentrate on something else more believable ? Like how about this ~ the U.S gov. in on the act of helping to manipulate the true value of physical gold and silver while in cahoots with the central banking system.....yeah ! that's one they'll have a problem getting their heads around !!!!

  9. Hey Chico Loco,

    USD breaking out again. Next stop over 85 on the indie.

    Have your Beckie Quick go down on Warren for a golden woodie.

  10. You got the date of the quote wrong, the good Mayer Amschel died in 1812... (and his son Nathan made a killing in the London stock market during Waterloo battle, way before 1863, you must have meant 1763).

    1. You're right. Thanks for the heads up. I fixed it.


    1. You can take issue all you want. The Kochs are unethical businessmen who are trying to use their wealth to strangle democracy and completely shape the political agenda of the country in a way that funnels as much wealth as possible their way.

      There's no way they're Libertarians. They're more like James Taggart mixed with Karl Rove (James Taggart is the buffoon brother of Dagny in Atlas Shrugged). They're anti-Libertarian.

      I would do the same thing if I had their dough.

  12. Jim Grant: The Fed is Not Out of Bullets, It’s Gun Shoots Backwards!

    Jim Grant has given another memorable interview to CNBC tonight, discussing the banks’ manipulation of LIBOR, and stating that outrage at the banks for manipulating interest rates should be redirected at central banks, who manipulate everything on a massive scale routinely for a living!
    Regarding The Fed’s options going forward Grant stated:
    ‘The Fed is not out of bullets, the trouble is it’s gun shoots backwards!
    These massive interventions in the markets distort the prices we call interest rates. There’s this great scandal with LIBOR- ‘the banks fixed the rates’. The Fed fixes everything! The banks do it opportunistically, The Fed does it for a living, it does it on principle!‘
    Full MUST WATCH interview below:
    The Fed has Operation Twist by which it manipulates the credit markets. It has QE by which it manipulates bond yields. It has the portfolio balance effect by which it manipulates the stock market.

  13. It would seem that QE is really just in aid of the precious metal market. The rest is doing just fine!!! Especially the banks!!

  14. I think you might be giving politicians too much credit for actually possessing the knowledge and moral foundation to act accordingly. I'm not sure many politicians grasp (especially POTUS) or care to grasp, how quickly the situation could deteriorate when they rely on the advice of the same people responsible for the previous crisis and the one before that and the one...

    Or, maybe, the next crisis will create enough fear and panic for the govt to swoop in, be the hero, and convince its citizens to hand over their retirement accounts in exchange for a guaranteed 3% return... backed of course by the full faith and credit of the US Govt.

    Or I could just paranoid, but I don't think so.

  15. Full Show: Banking on Greed
    July 13, 2012

    Just when you think the reputation of banks couldn’t get any worse, comes word that we’ve seen nothing yet. As many as 20 banking institutions, including Barclays Bank, Deutsche Bank, Citigroup, JPMorgan Chase, UBS and HSBC, are reportedly under investigation for illegal and unethical practices toward protecting their profits at all costs and letting others pay for their mistakes. In this episode, financial expert Sheila Bair talks with Bill about the lawlessness of our banking system and the prognosis for meaningful reform. Bair was appointed in 2006 by President George W. Bush to chair the FDIC. During the 2008 meltdown, she argued that in some cases banks were NOT too big to fail — that instead of bailouts, they should be sold off to healthier competitors. Now a senior adviser to the Pew Charitable Trusts, Bair has organized a private group of financial experts including former Fed chairman Paul Volcker, former Senators Bill Bradley and Alan Simpson, and John Reed, once the chairman of Citicorp, to explore ways to prevent the banking industry from scuttling reforms created by the Dodd-Frank Act.

  16. Tavakoli: JPM's Risky Business

  17. Look at maria trying to revise history?
    no one is going to jail...ever...from the top

    Eliot Spitzer Tells Maria Bartiromo 'You Are Under Oath Right Now' During Unbelievably Tense CNBC Interview

    1. James Rickards on CNBC: “Jamie Dimon Should Go.”

    2. The Real Libor Scandal ~Paul Craig Roberts and Nomi Prins
      But the banks did not fix the Libor rate with their customers in mind. Instead, the fixed Libor rate enabled them to improve their balance sheets, as well as help to perpetuate the regime of low interest rates. The last thing the banks want is a rise in interest rates that would drive down the values of their holdings and reveal large losses masked by rigged interest rates.

      Indicative of greater deceit and a larger scandal than simply borrowing from one another at lower rates, banks gained far more from the rise in the prices, or higher evaluations of floating rate financial instruments (such as CDOs), that resulted from lower Libor rates. As prices of debt instruments all tend to move in the same direction, and in the opposite direction from interest rates (low interest rates mean high bond prices, and vice versa), the effect of lower Libor rates is to prop up the prices of bonds, asset-backed financial instruments, and other “securities.” The end result is that the banks’ balance sheets look healthier than they really are.

      On the losing side of the scandal are purchasers of interest rate swaps, savers who receive less interest on their accounts, and ultimately all bond holders when the bond bubble pops and prices collapse.

      We think we can conclude that Libor rates were manipulated lower as a means to bolster the prices of bonds and asset-backed securities. In the UK, as in the US, the interest rate on government bonds is less than the rate of inflation. The UK inflation rate is about 2.8%, and the interest rate on 20-year government bonds is 2.5%. Also, in the UK, as in the US, the government debt to GDP ratio is rising. Currently the ratio in the UK is about double its average during the 1980-2011 period.
      The question is, why do investors purchase long term bonds, which pay less than the rate of inflation, from governments whose debt is rising as a share of GDP? One might think that investors would understand that they are losing money and sell the bonds, thus lowering their price and raising the interest rate.

      Why isn’t this happening?

  18. So now for the million dollar question....Knowing how dishonest JPM, CFTC,PFG,MF Global,CME,CIO Grp.,Barclays,Goldmn Sachs,wallstreet,and on&on -is , what is the point of following all the regurgitated matter that constantly resurfaces in the form of financial untruths? Why not cut to the chase and beat the ones who are going to screw you anyway ~ sooner or later ?
    The sooner you stack em the sooner you crack em.

  19. I say this again - this "QE to infinity" stupidity has to change. Politically it is getting less and less acceptable.

    Before 2008 came along QE never entered the debate - money supply sure - and now everything hinges on QE.

    But the Gold crowd is just too fixated on this argument and that will be their downfall.

    This rigidity and inability in changing the debate is amazing.

    Everytime now - every other week Bernanke comes and his decision is bad for gold. He will still break it to the down side.

  20. Talk is cheap , paper is cheap.

    Put your money where your mouth is , buy physical gold and silver and hold it yourself.

    The day is coming where you'll wish you had.

  21. In a local English newspaper

    Britain will consume less oil this year than in previous years, according to a projection in Oil and Gas UK's annual report. A 19% drop in 2011 caused analysts to reconsider what they thught was going to be a 2012 increase.

    Talking retail - retain on this Spanish Island is terrible most shops have a 50% reduction and many doing liquidation sales. It's interesting to note that the Spanish Government gets involved in the retail sales lately too. They determine the time and sales discounts for the retail shops. I thought this unbelievable.

  22. Another observation about Coin shops on this Spanish Island, there are three of them. I have bought only from one because his prices are good. But recently - since the Greek elections and the worsening Spanish crisis they have now set their prices at 33Euros per oz. There is lots of silver but they refuse to follow the quoted prices. They are happy to sit on their physical.

    In addition Spain hasn't that many online dealer option and are generally more expensive then the German online dealers who have the closest quoted prices. But to get them delivered into Spain is a problem - either the German online dealers don't do it or their is a 10% surcharge on it.


  23. Banking Is a Criminal Industry Because Its Crimes Go Unpunished

    Just another month in financial services. Is it unusual? No, it's not. If we go back just a little further, we have UBS, HSBC, Julius Baer, and other banks actively marketing tax evasion services to wealthy U.S. and European citizens. We have senior executives of several banks (including JP Morgan Chase and UBS) strongly suspecting that Bernard Madoff was running a Ponzi scheme, but deciding to make money from him rather than turn him in. And then, of course, we have the financial crisis and everything that led to it. As I show in great detail in my book Predator Nation, we now possess overwhelming evidence of massive securities fraud, accounting fraud, perjury, and criminal Sarbanes-Oxley violations by mortgage lenders, investment banks, and credit insurers (including senior executives of Countrywide, Citigroup, Morgan Stanley, Goldman Sachs, Bear Stearns, AIG, and Lehman Brothers) during the housing bubble that caused the financial crisis. If we go back to the late 1990s, we have the massively fraudulent hyping of Internet stocks, and several banks (including Merrill Lynch and Citigroup) actively aiding Enron in committing its frauds.

    So, July 2012 really isn't abnormal at all. The reason for this is very simple. Over the past two decades, the financial services industry has become a pervasively unethical and highly criminal industry, with massive fraud tolerated or even encouraged by senior management. But how did that happen?

    Well, deregulation helped, of course. But something else was far more important. It is the one critical factor that unites all of the episodes cited above, including those of this month. This critical unifying factor is the total number of criminal prosecutions of major firms and senior executives as a result of all of these crimes combined.

    And what is that number?

    Consider the Obama administration's choices for the four most important positions in financial sector law enforcement. The attorney general (Eric Holder) and the head of the Justice Department's criminal division (Lanny Breuer) both come to us from Covington & Burling, a law firm that represents and lobbies for most of the major banks and their industry associations; indeed Breuer was co-head of its white collar criminal defense practice, and represented the Moody's rating agency in the Enron case. Mary Schapiro, the head of the SEC, spent the housing bubble in charge of FINRA, the investment banking industry's "self-regulator," which gave her a $9 million severance for a job well done. And her head of enforcement, perhaps most stunningly of all, is Robert Khuzami, who was general counsel for Deutsche Bank's North American business during the entire bubble. So zero prosecutions isn't much of a surprise, really.