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02.08.10- Corruption, Culpability and
02.06.10- America Not Near To Solving Its Debt Problems
02.05.10- Garbage In, Garbage Out
Former Federal Reserve chairman Alan Greenspan answered that he had placed his trust in a flawed theory when he was called before Congress to explain why he, Goldman Sachs Treasury Secretary Robert Rubin and Deputy Treasury Secretary Larry Summers, prevented Brooksley Born, head of the Commodity Futures Trading Corporation, a government regulatory agency, from doing her job of regulating over-the-counter derivatives. The efficient markets theory is that unregulated markets are efficient and rational. According to this theory in which Greenspan placed his trust, unregulated markets produce the best possible result. Any regulatory interference worsens the outcome. Read More 02.04.10- Taleb Says 'Every Human' Should Short U.S. Treasuries It's "a no brainer" to sell short Treasuries, Taleb, a principal at Universa Investments LP in Santa Monica, California, said at a conference in Moscow today. "Every single human being should have that trade." Read More 02.03.10- The Bernanke Disaster
Once the Republicans were certain which way the vote would go, they were able to voice some nice populist sound bites for the mid-term elections this November. Jeff Sessions of Alabama and Sam Brownback of Kansas voted against Bernanke’s confirmation. Jim deMint of South Carolina warned that reappointing him would be "The biggest mistake that we’re going to make for a long time.” Read More 02.02.10- The Myth of the Fed's Exit Strategy
Unfortunately, this time there will be no Prince Charming riding in on a white horse. In 2009, the US ran an unprecedented $1.5 trillion budget deficit, financing the shortfall by issuing Treasury bonds. The Fed happily obliged by soaking up this tsunami of paper, either directly, or indirectly through mortgage purchases. Read More 02.01.10- Secret Banking Cabal Emerges From AIG Shadows
Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials. Read More 01.30.10- The Precarious State of Our Union
In this week's much anticipated State of the Union address, President Obama again demonstrated his poor understanding of the fundamental problems that confront our nation. By following the advice of the same people who helped guide our economy to the precipice of total collapse, Obama now threatens to push it over the edge. Read More 01.29.10- Creating A Trillion From Thin Air
As we all know, the large banks were in deep trouble in 2008 and 2009. The subprime mortgages were the trigger, but the problems rapidly spread into other investments. Markets totaling trillions of dollars were in danger of collapsing because of a lack of buyers. Read More 01.28.10- Save the Middle Class While Fixing Banks for Good
01.27.10- Looking Over Into The Abyss?
01.26.10- State of the Republic Address
Official unemployment is at 10% but even the government knows that if everyone is counted, including those individuals that are too discouraged to even be looking for work, the unemployment rate is 17%. Free-market economists claim the actual unemployment rate is closer to 22%. Read More 01.25.10- We Are All Speculators Now
When the Keynesian fractional reserve fiat banking model was sold to the public, the idea was that the citizens would accumulate wealth and prosper, furthering wealth and prosperity among the many and building the nation from the ground up. Using hindsight, we now know it was all a fraud. The American Dream was sold on the idea that a citizen could work hard and save. You could "invest" your savings and earn a rate of return greater than the increase in the cost of living, thus increasing your real wealth over time with the magic of compound interest. That was the incentive to save. That was the basis for retirement. This could be easily accomplished by investing in government bonds which would yield a rate of return greater than the rate of inflation, plus a risk premium, plus a real return. The return could be calculated in advance at purchase time, and the only risk associated with the investment was a US default, which would have been called "impossible". Read More Silver
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People are increasingly collectively horrified at the extent of the fraud and corruption that lies at the heart of our financial and broader governance structures. They seem surprised, as if this were something new, when in it has actually been growing in tandem with our credit hyper-expansion for decades. Corruption in complex systems never goes away, it merely waxes and wanes, and goes through phases where it is more or less visible.
As we have been forecasting for the last two years, the second wave of mortgage defaults and foreclosures will hit the economy this year. Not only will we have failure in prime loans and option-arm loans, but we are faced with a new crop of subprime and ALT-A loans put into motion by Fannie Mae, Freddie Mac, Ginnie Mae and FHA. In addition, we find it of great interest that the FHA is changing the rules to purchase homes. That, of course, means fewer homes will be purchased. 
The Free Market Fetish
Feb. 4 (Bloomberg) - Nassim Nicholas Taleb, author of "The Black Swan," said "every single human being" should bet U.S. Treasury bonds will decline, citing the policies of Federal Reserve Chairman Ben S. Bernanke and the Obama administration.
If the economy deteriorates in the L-shaped "hockey-stick” rut that many economists forecast, what political price will President Obama and the Democrats pay for having returned the financial keys to the Bush Republican appointees who gave away the store in the first place? Reappointing Federal Reserve Chairman Ben Bernanke may end up injuring not only the economy but also the Democratic Party for years to come. Recognizing this, Republicans made populist points by opposing his reappointment during the Senate confirmation hearings last Thursday, January 27 - the day after Obama’s State of the Union address.
The "Exit Strategy" the Fed's Bernanke is contemplating is nothing less than a total, unadulterated myth. This is the fairy tale you read to your young children at night where the government cuts back its spending and the Fed shrinks its lending. The private economy then picks up the slack, and the rest of us live happily ever after. 
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. After this week’s congressional hearing into the bailout of 
(Editor's Note: We have a problem, and it can no longer be eliminated by simply getting rid of the FED. Most of our leaders are afflicted with a pandemic case of stupidity, brought on by greed. Even the Wall Street bad guys have caught it. The majority of the voters were infected with it intentionally through the "Great Dumbing Down". Consequently, the only real cure will come through purging. Happily though, that process will, eventually, provide more parking places. - JSB)
The Federal Reserve reported a $45 billion profit for 2009, making it the most profitable financial institution in the nation. Many news outlets put a positive spin on this report, saying it was great news for the economy and the financial sector. Are they right about that? Or could the full story of what happened represent a direct threat to the value of your savings and your retirement investments? Let’s take a short look at the story behind the headlines, and the personal implications for you and your family.
While I'm disgusted with the level of banker's bonuses and with the obscene leverage practices financial institutions undertook, I do not think the answer to how we clean up them up now is to pile on yet more regulation. To be sure, banks that helped bring down the world economy and then subsequently got bailed out by the taxpayers should not be making billions of dollars in bonuses, especially while the middle class is suffering so greatly. And if we're going to keep the FDIC in effect, a certain amount of regulation is required to protect taxpayer-backed deposits. But the real remedy does not rest with government, as it was their consistent meddling with markets that engendered the crisis to begin with. 
We have never subscribed to the notion that the policies given to us by our ruling elite would fix our economy. In fact, we are of the mind that each "remedy" is making everything far worse. Why? Because all the so-called fixes involve printing more money, which is to say creating more and more debt at a faster and faster pace. Since debt combined with mal-investment that results from huge amounts of money pumped into the economy in a short period of time, policies provided for us have been pathological. 
As we start the new year 2010, the establishment politicians, economists and Wall Street are trying to convince themselves that we have turned the corner and economic growth has once again begun. The predictions that conditions are getting back to normal come from those who never saw the crisis coming and don’t have the vaguest notion what caused it. Some of them concede that it could be a jobless recovery. That will establish a new definition for a recovery.
n•vest (n-vst)
