ANTIESTABLISHMENTARIAN

Finance, Fuel Prices, Economics, Markets

CitiBank Loan Sharks

Citibank sent out letters this week notifying credit card holders that they were raising their interest rate to 30% (I exaggerate, its really only 29.99%, aren’t they clever?). Citi has 92 million card accounts outstanding. Never mind that this violates usury laws of most states, there is no enforcement of federal laws except when people attack the government.

The average cardholder was paying $3,600/yr in interest but will now be paying over $5,200 in interest. The net effects of this are obvious. First, people will cease spending via credit. Secondly, increasing the interest rate by 50% will remove that much more from consumer spending even by cash. Both consumers and retailers will take a big slap in the face from Citi.

In raw dollar terms, this means $113 billion in less disposable income exclusive of lost credit purchasing. [1]

I would be remiss if I didn’t point out that Citi is a ward of the taxpayers, partly owned by government, so folks, it is your dear government, directed by Saint Obama, who is giving you the royal shaft. Economic recovery? Who the hell do they think they’re kidding!

Welcome to government of the banks, by the banks and for the banks. The rest of you can go pound salt.

[1] Data obtained from Market Ticker

October 23, 2009 Posted by | Daily Brief | Leave a comment

Pick Pockets

LONDON, WSJ — This could end up being viewed as the week when dollar weakness became too much for the rest of the world to bear, setting the scene for tense encounters at the upcoming meeting of finance ministers from the world’s 20 largest economies.

So what does one do to make the  dollar rise in value? Well, one way is to remove a lot of them from circulation right at a time when “they” are trying to stimulate the economy. So raise interest rates and watch the dollar soar . . . and also watch the economy collapse, and with it US imports from those nations that are complaining so loud. So they want the US to go into a double-down depression and take the rest of the world with it? Huh, is that what they want, because that’s what they’ll get.

Oddly enough this article never once mentions China which, after Japan, is most responsible for kiting the dollar for years to facilitate their export machine. But THEIR Ponzi scheme has collapsed and now they’re looking for a scapegoat. China has the power to stop the descent of the dollar simply be removing their currency’s peg to the dollar and letting the Wan rise. Oh, no, they’re not about to do that since that would tank what’s left of their export machine.

This is what happens when governments take control of economies. It always has a very bad ending and its always the little people’s pockets that get picked clean.

That article is about as monitarily illiterate as one can get. Just goes to show what Rupert Murdock can do when he puts his mind to something. I canceled my WSJ subscription months ago. No point in paying for propaganda mixed with stupidity.

October 22, 2009 Posted by | Daily Brief | Leave a comment

Gangster Banks Refuse to be Regulated

There is not only no hope that our economy will recover unless that criminal mafia know as banks are reigned in with a bull whip, but even no hope that it will not continue to sink into severe regression and depression.

Congress has proposed some very weak new regulations for banks, but as soon as the gangsters heard about it they sent out howls of protest, saying no way, forget about it. And congress did. They bowed to the mafia bosses because the dons of Wall Street simply threaten to cut off the money those rats called congressmen need to gain re-election. Ergo, whatever Wall Street wants, Wall Street gets.

The economy cannot recover because innumerable bankrupt enterprises are being kept afloat with borrowed money. The massive amounts of debt we have accumulated quite simply drains the economy of necessary capital to keep it prospering. With the USG pulling $2 trillion of capital out of the economy every year, and hundreds of billions being paid out to foreign entities to service that debt, the economy is denuded of necessary capital. We have now reached the point that instead of productive enterprise, the number one money-making enterprise in this nation is speculating in financial markets. The insolvent zombie banks are surviving by borrowing from the Fed at zero percent interest and plunking it down into every speculative gamble imaginable. For example, it is reported that 20% of Goldman Sachs revenue last quarter was from speculating in US Treasury bonds alone.

The ten largest “banks” account for 40% of all stock market trades. They don’t do much lending anymore since there are few credit worthy entities left that wish to borrow, so despite the lowest interest rates in history, credit continues to collapse. Greenshoots? I won’t even bother to dignify that horse hockey. The consumer is finally starting to roll over and play dead as the banks have slashed consumer credit and hiked interest rates to levels that would make Joe Gambino blush. It will certainly stimulate the economy to gouge credit card accounts with 30% rates. Banks can rent money for 0.025% and charge 30% and above, a spread of 29.975 or better. Positively stimulating.

So with real unemployment approaching 20% and rising by a half million or better per month (and those are only the one’s they deign to count), with consumer credit being slashed, with wages and salaries on the decline, with the US dollar collapsing, which causes the price of all imports to rise, what are we then to say about the 70% consumer economy, that it is recovering? Sure, and you might as well claim that gold coins are falling from the sky.

The only way the US economy would be able to recover would be to seize the top ten banks and liquidate them, since they are technically insolvent anyway. All those trillions in worthless mortgages need to be purged from the system. Pretending that they don’t exist is what Japan did and put them into a 20 year depression that is now getting worse. The US is following that path precisely, yet the results will not be the same, the results will be far worse because the yen is not the world currency. And when the US dollar is repudiated, even Walmart will look like a luxury retailer. If, that is, there is still a Walmart left to sell Chinese goods no American could afford to buy.

The gangster bankers hold this nation in their iron grip and are milking it dry, just as Thomas Jefferson and Andrew Jackson said they would if control of money were turned over to them. It was as predictable as the sun rising.

October 17, 2009 Posted by | Economics | , , , , , , , , , , , | Leave a comment

Oil Again

Oil closed at 83 cents short of $80.00 today setting the highest price of the year. So what’s going on, are the speculators driving it up again, are there looming shortages, shrinking supply?

No, none of the above. The rising oil price is simply a function of the falling dollar, although I’ve seen quite a few “analysts” provide all sorts of reasons from peak oil to that grand bogyman, Goldman Sachs. Oil is priced in dollars, so when the dollar falls, the price of oil rises proportionately.

I am expecting both to level off soon. The fate of the dollar charted below.usdx

October 16, 2009 Posted by | Oil Updates | Leave a comment

How Our Economy Works

This is how the “recovery” is engineered,

Oct. 14 (Bloomberg) — Some of Treasury Secretary Timothy Geithner’s closest aides, none of whom faced Senate confirmation, earned millions of dollars a year working for Goldman Sachs Group Inc., Citigroup Inc. and other Wall Street firms, according to financial disclosure forms.

The advisers include Gene Sperling, who last year took in $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies, including the firm run by accused Ponzi scheme mastermind R. Allen Stanford. Another top aide, Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group, a New York hedge fund.

As part of Geithner’s kitchen cabinet, Sperling and Sachs wield influence behind the scenes at the Treasury Department, where they help oversee the $700 billion banking rescue and craft executive pay rules and the revamp of financial regulations.

The way to get ahead in this nation is to go to Washington with buckets of cash and buy whatever you need to ensure success. The rest of you can go pound salt. The place to be is in banking where success is guaranteed by the power of the U.S. government at all costs. If you don’t like the numbers, just change them and all will be well. Remember that at tax time.

October 14, 2009 Posted by | Blowing Steam | Leave a comment

UN Attacks the Dollar

If you’re wondering why I have been posting infrequently, it is because I am constantly getting locked out of my own blog. And I just don’t have the time to t ry to figure out why this keeps happening. Then, all of a sudden, without explanation, it starts working again.

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The UN is once again calling for a new “reserve currency,” only this time they have a plan. They want it to be IMF special drawing rights. Now, if you know what SDR’s are, then you know that it is the equivalent of PayPal, which is not a currency. Here is the description of SDR’s right from the horse’s mouth:

The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions. In addition to its role as a supplementary reserve asset, the SDR, serves as the unit of account of the IMF and some other international organizations. (See? PayPal :lol: )

Now, if you can make any sense out of that, you are pretty damn smart. Actually, its a defunct system that attempted to prevent the drain of gold from national treasuries; it didn’t work. The way its devised today is basically the “basket of currencies” approach. Its used for such obscure things as international settlement of postal accounts between nations. Sexy, huh? And can you see more than $3 trillion per day in transactions going through that system? Not a snowball’s chance in hell.

A major problem with “basket of currencies” idea is that it further removes penalties for monetary mismanagement as a result of concealing individual values in averages. It has all the negative attributes of socialism. If nations are monetarily irresponsible now, this will make them even more so. Moreover, it will concentrate power in the hands of who ever ends up controlling this system. For ultimately somebody has to make critical value decisions, decisions that today are made by a fairly free market.

What would ultimately happen is that every nation who’s currency was part of that basket of averages, would end up going hog wild in printing money because the inflationary effects would be protected or muted by that basket of averages, but the whole freaking basket would go right to hell in the proverbial hand basket. Try putting brain in gear before mouth in motion.

The reason why this is NOT going to happen is that the faults of such a system are painfully obvious and when push comes to shove ( and there will surely be a lot of that), nobody will want to take a chance on it. The current system is subject to Churchill’s comment about democracy: its a terrible system and the only good thing about is that every other system is worse.

If people don’t like the dollar, they should stop trading in it, but they don’t. Why? Because they don’t trust any other currencies either, so they prefer the devil they know over the ones they don’t. They DO trust the degree of transparency from the Fed, but they surely would NOT trust the ECB nor Beijing, nor Tokyo because they have NO transparency, so they bitch and moan, make a lot of noise and complain, but in the end they will not move away from the dollar.

Nobody is forcing China to accept payment in dollars. So why do they? If you can answer that question, you’ll understand why I say China is now in deep doo-doo.

October 7, 2009 Posted by | Uncategorized | , , , , | Leave a comment

Newspeak & The Minstry of Truth

Oct. 1 (Bloomberg) — The number of Americans filing first-time claims for jobless benefits rose more than forecast last week, a sign companies are still cutting workers as the economy pulls out of the recession.

Applications rose by 17,000 to 551,000 in the week ended Sept. 26, from a revised 534,000 the week before, Labor Department data showed today in Washington. The total number of people collecting unemployment insurance fell in the prior week to 6.09 million, the least since April.

And just yesterday they were telling us that jobless claims were falling. (CNBC, September 30th)

Reuters, 10/1/09  – September US Auto sales  off 47.2% yoy.

“As the economy pulls out of recession.”  Uh huh, sure, right. No lie is ever too large to tell.

“The economy is on track for a jobless recovery and unemployment will likely remain high well into next year,” said Sal Guatieri, a senior economist at BMO Capital Markets.  Never mind who this man is, this kind of crap is flooding all media of late.

They are making it very clear that a “recovery” is the very same thing as the bottom of a recession. Thirty million people without jobs is recovered, good, all is well, getting better. The lying just becomes increasingly insane.

Its interesting, too, how they take us for total blithering idiots, as if we can’t see the contradiction in the term “jobless recovery. Either that or far too many Americans have become blithering idiots that they will swallow such crap without a peep.

October 1, 2009 Posted by | Uncategorized | , , , | Leave a comment

Still Talking Recovery?

Propaganda broadcast by or through the media can be a powerful tool to sway public perceptions.  Back during the great depression every possible means of convincing people that the worst was over and all was deployed just as it is today. It has an effect that may last a little while, but not for long. When lots of people are broke and unemployed, the reality can’t be hidden for long.

Neither can basic economic data, which is what I propose to do today with only two simple graphs that tell us that there is no recovery underway despite the massive amounts of borrowed money thrown at a mountain of collapsing debt.

ABCconfidence

The above graph reveals a severe divergence between the S&P 500 stock index and the ABC consumer confidence index.  Stocks are soaring, thanks to lots of gasoline thrown on the fire by the Fed, but consumer confidence index says that the consumer is not nearly so exuberant. That’s an understatement; note the index stands at minus 45, while the S&P has rebounded by 60%. If the consumer doesn’t want to spend, then where are corporate profits going to come from? They’ve already burned through capital and borrowing to maintain dividends, but this charade can’t last.  And when there is no correlation between consumer attitudes and stock prices, guess which one always wins?

retailsales

This next chart reveals the actual results of consumer attitudes, and the fact that the stock market has rocketed off on yet another orgy of greed-induced self delusion. Stocks  are now, only six months after reaching their bottom, grossly overpriced. And we  know how it got that way, too. The very same way the monstrous credit bubble created six years ago got created, and by the very same outfit. The man is often dubbed, Bubbles Bernanke.  He is desperately blowing another one using the most extreme tactics of nearly bankrupting the Federal government with debt.

And if you didn’t much care for the ending of the last bubble, this next one will be the bubble to end all bubbles.

September 30, 2009 Posted by | Uncategorized | , , , , , | Leave a comment

A Terminal Cancer

Michael Moore was on  TV the other day claiming that capitalism has failed. That isn’t true because we don’t have capitalism; our current system is best described as a mutant of fascism controlled by a financial mafia of mega banks that are nothing more than financial crime syndicates. Moore is just a propagandist for a communist movement that disguises itself under the banner of environmentalism and “the people”. One might also claim that democracy has failed as well, but we no longer have a democratic republic. That has been slowly dismantled over the last 100 years, replaced by a sham of free elections that perpetually keeps the same political mafia in office in a fascist oligarchy.

Who would have imagined that Obama would be a puppet of Wall Street and that Goldman Sacks and J.P. Morgan have aligned themselves with the likes of Acorn? Truth is stranger than fiction, but the political criminals have been put to good use by the syndicates.

Crime is a parasitical activity that feeds on its host and ultimately kills it, like viruses, bacteria and leaches. The financial syndicates known as banks have consumed its host to the point where the host is dying. In order to save themselves, the parasites have determined that the best way to save themselves and their political lackies is to increase their rate of consumption. But having indentured the nation to the tune of $109 trillion, they now find little blood left to suck. All that is left is a vast mountain of debt and capital has all but vanished, so next they are turning to the savings and pensions of the people, which is all that remains of the host. Just like Argentina did, twice.

The word on the street is that the Fed is now attempting to drive money out of the money markets, which is where the majority of pension money resides. The purpose of this is to keep the stock markets from collapsing. It is a last gasp effort by the mafia to avoid total collapse, and of course, such actions can only hasten the day of collapse, for do they not claim that this is a 70% consumer economy? And do not corporations and the very mafia itself depend on consumers to fuel their boundless greed? Once the consumer is dead, upon whom will they feed? They have already engaged in cannibalism, killing, cooking and eating their fellow hoodlums; Bear-Sterns, Lehman Brothers, Morgan-Stanley, IndyMac, etcetera.

In robbing the pensions of the hosts, the parasites make one last desperate attempt to save themselves. It is an attempt that can only fail, for with a dead host they cannot continue. And when the host has nothing left to loose, is near starvation, that is when the host reverses roles with the parasite, turns on it and consumes it. That day is drawing ever closer.

To claim that the Great American Experiment has failed hits the nail squarely on the head, for we have strayed far, far beyond any hope of reform and recovery. The cancer is now terminal.

September 26, 2009 Posted by | Uncategorized | Leave a comment

Where Have All the Hurricanes Gone?

Was my prediction that there would be no hurricanes coming near the US spot on or what? Of course, the season is not entirely over yet, but close. Its still possible that one could form in the lower Gulf and move north, but I doubt it. Conditions remain poor for storm formation. Looks like 2009 will go down as a record year for the least number of both hurricanes and named storms.

Actually, I can’t take any credit for this prediction; give all the credit to the El Nino scientists who determined the effects of El Nino with an amazing degree of accuracy. For El Nino and La Nina are the two most powerful weather determinates for the whole planet, and these, in turn, are caused by solar activity. For the coming winter it will be warmer in the uppper Midwest and Northeast; the west will be wetter and the southeast will be wetter and cooler.

You may recall that the claim was that global warming would cause a riot of category 5 hurricanes. What happened?

I brought this up after reading a report on the status of the arctic icecaps that, for the second year running are not only not melting away to nothing, but are increasing in size, so our poor old man-eating polar bears won’t be having to swim a lot. Quite contrary to predictions.  Its interesting too, what has happened to all those ridiculous claims that melting arctic ice would cause oceans to rise and land masses to flood. You see, somebody forgot about Archimedes Principle: an object immersed in a fluid is buoyed up by a force equal to the weight of the fluid displaced by the object. Meaning that if you drop an ice cube in your martini, and that ice melts, it won’t raise the level of the fluid in the glass. Why? Because the ice displaces an exactly equal volume of water. You boatmen should know that.  So, lets’ see now, is the arctic ice cap sitting on land or is it floating? You know the answer: there is no land under the arctic ice cap. Pretty stupid, huh?

But of course our Baptist preacher-man president wants to suck $10 trillion out of our hides to end the global warming that had to be renamed climate change since they can no longer deny that the earth is presently cooling, to be followed by warming, and then cooling again. So we’ll all be driving the equivalent of golf carts to prevent the climate from changing.

But since climate change is controlled by solar radiation, I wonder what they propose to do about that? Most likely nothing since they will likely be content with the $10 trillion at least for a little while, or until they think up some new scam.

September 25, 2009 Posted by | Uncategorized | Leave a comment