Tasteful Photo: Courtesy Jesse's Cafe Americain

We have discussed the phoniness of the U3 measure of unemployment. We have discussed the "marginally attached" worker not being counted as unemployed by U3 when their unemployment benefits run out... even though they are obviously still unemployed by U-Reality measure...

We have discussed the Birth/Death Ratio model used by the Bureau of Labor Statistics before. The BLS invented this model to account for jobs created by the Births and Deaths of small businesses that add or subtract employment (mostly add) that are supposedly missed by the BLS monthly surveys.

The BLS claims these jobs are added, yet the only hard data the BLS uses is payroll and payroll tax data, which they choose to ignore or give less weight to. After all if the IRS is collecting payroll tax payments monthly for businesses with payrolls over $50k of payroll and quarterly for businesses under $50k in payroll... why believe that kind of hard data on payroll expansion?

On October 2, 2009, the BLS admitted it had overstated job creation by 824,000 jobs mostly in the first quarter 2009. According to Bloomberg:

U.S. Job Losses May Be Even Larger, Model Breaks Down (Update1)

"About 824,000 more jobs may be subtracted from the payroll count for the 12 months through last March when the figures are officially revised early next year, a Labor Department report showed today. The revision would be the biggest since at least 1991."

From our pal Bill the Brain at Calculated Risk:

"Note: The total jobs lost does not include the preliminary benchmark payroll revision of minus 824,000 jobs. (This is the preliminary estimate of the annual revision that will be announced early in 2010)."

From the Brilliant Jesse at Jesse's Cafe Americain:

A Reader Asks "How Did 558,000 People Lose Their Jobs When Only 190,000 Jobs Were Lost?"

"The most obvious reason for the discrepancy is that job creation in the US seems to be centered in the smaller business and the self-employed areas in recent years. These sectors are not polled by the BLS and their impact would only be obtained by the Household Survey's interviews.

The BLS does have a way to account for this called the "Birth Death Model" which is supposed to estimate jobs created by smaller businesses. That model is a bit of a joke actually since it almost always follows the same pattern of adding jobs, with two big corrections in January and July of each year when it will do the least damage to the headline number. Any model that does not reflect the job declines that started in 2007 can most certainly be called a statistical joke. Small business is not immune to business cycles"

In other words the 824,000 phantom jobs that don't exist won't be subtracted from the employment numbers and put back on the unemployment numbers where they belong until February 2010.

So, let us do it for them:

BLS says there are 15.7 million unemployed by U3 at 10.2% unemployment rate... 

So simple math tells us 15.7 at 10.2% means the work force being counted is 153.9 million, although that seems high to me...

Oh yeah, the Alzheimer's puppet Reagan added military personnel to civilian employment in 1982 to dilute unemployment percentage by increasing the labor force by several million and lie about the unemployment rate in the Reagan '82 recession... anyway...

So we add back the 824,000 unemployed that the BLS shaved off with their imaginary B/D Ratio:

We get   15.7 + .824 = 16.5 million unemployed.

16.5 / 153.9  =  10.7% by U3.

Based on 153.9 million in the work force as above, by U3, I come up with 10.7% unemployment.

Now what say you Mr. Change? Fancy Nancy? Harry "Spineless" Reid? Timmay G? Bennie Bernank-ster? Fat Larry?

Courtesy Houston Chronicle

"Perhaps the biggest lie - the equivalent of smoking is good for you - is Obama's announcement that the US is leaving Iraq, the country it has reduced to a river of blood. According to unabashed US army planners, as many as 70,000 troops will remain 'for the next 15 to 20 years'."

"... It is not surprising that the polls are showing that a growing number of Americans believe they have been suckered - especially as the nation's economy has been entrusted to the same fraudsters who destroyed it. Lawrence Summers, Obama's principal economic adviser, is throwing $3 trillion at the same banks that paid him more than $8 million last year, including $135,000 for one speech. Change you can believe in."

John Pilger, Obama's 100 Days - The Mad Men Did Well

"He has tried to have it all on three fronts, and his administration is in serious danger of going bankrupt. He has blundered into a deepening quagmire in Afghanistan, has continued the Bush policy of buying off Wall Street hustlers instead of confronting them and is now on the cusp of bargaining away the so-called public option, the reform component of his health care program.'

 "But what is nerve-racking about Obama is that even though he campaigned against Bush's follies he has now embraced them. He hasn't yet managed to significantly reduce the U.S. obligation in Iraq and has committed to making a potentially costlier error by ratcheting up America's "nation-building" role in Afghanistan."

Robert Scheer, Obama's Presidency Isn't Too Big to Fail, Truthdig.com

Robert Scheer, John Pilger and I go back a long way. During the 1960s Scheer and Pilger reported from Vietnam on a rather unjust, criminal war enterprise, massively escalated on deceit... the Gulf of Tonkin incident that never happened. That was 1965, the excuse for Congress to give the President the green light to go to war on Vietnam without going to war in Vietnam... technically. It took 10 years from the Gulf of Tonkin non-incident to wind that one up. The war sold DuPont and Dow chemical a lot of napalm and Boeing a lot of military aircraft in the mean time. What is good for US defense contractors, is good for the American economy after all. Sells a lot of wars.

In the 1960s, I was a kid. I remember the name Hubert Humphrey in the summer of 1968. I remember when some train carried a Kennedy all the way from Los Angeles back to Washington. Seems somebody shot that Kennedy so now Humphrey was some big deal. I saw Nixon on TV. He reminded me of the typical school principal back in '68. Narrow pants, narrow tie, mean streak. Probably had a ruler in his desk drawer called the "board of education" he liked to beat kids like me with. That was legal and common in public schools in '68.

The Vietnam War was on TV every night. It had a score, like a football game. USA 223, NVA and Vietcong 3,450. Every week we would see the score. There were enough westerns on in the 60s that you knew if you were shooting 3,450 of the other guys... you were wining. Simple as that.

In the 1970s, Scheer covered politics including Watergate for Ramparts magazine and by 1976 the LA Times. I remember Watergate. Summer of '73, some old southern guy named Ervin going on and on about something. Now these guys like Haldeman and MaGruder, slick suit and tie guys, raised right hands and swore in. I had seen slick guys like this, usually selling insurance or stocks or something. 

Years Later

We had this moron as president for 8 years. He was installed through election fraud the first time. The supreme court was involved in what essentially was a coup. This guys old man was president. He got everything in life because of his family name. College, job opportunities, investments... real dunce. Of course it did not hurt that the other candidate was a bit condescending, picked a real douche bag as a running mate and lost his home state.

The dunce was installed a second time. Election fraud again in another state. Routing all the computerized voting tallies through a server in another state. Nobody ever looked into it. Not even the side that lost. Kind of ball-less. Of course it did not help the other candidate was a mumbler. When I was a kid, teachers told you not to mumble or things like this would happen to you. It did not help that this guy belonged to a secret club in college same as the dunce. The club is all knowing and all powerful. The other guy would not say what the club did. Gave you the felling the mumbler rolled over on command for the dunce, a club member...

Then this change guy starts running. Never heard of him. All these speeches. News reporters go on and on about him. But the ex presidents wife looks to be a shoe in. Every one knows her. But she voted for a war, he did not. And he made a big deal out of not voting for that war. He went on about that for a year. She voted for unjust war, he did not.

Reminded me of another "Peace" candidate. Lyndon Johnson. LBJ made this guy Goldwater out to be a war monger. Goldwater lost. I thought it had more to do with the black dork glasses and the fact he appeared mean even on TV. Once LBJ was in, he insisted he was not a peace candidate. The public dreamed that one up on their own. Uh-huh. No more "Peace" candidate. LBJ became a "Piece" candidate and escalated the war like he had campaigned on it. Told the people they were crazy if they thought he said otherwise...

Which brings us to:

Mr. Change -- The "Peace" Candidate

"I don't oppose all wars." Obama said, "What I am opposed to is a dumb war. What I am opposed to is a rash war....What I am opposed to is the attempt by political hacks like Karl Rove to distract us from a rise in the uninsured, a rise in the poverty rate, a drop in the median income."

Mr. Change -- Federal Plaza in downtown Chicago, October 2, 2002.

By the way Mr. Change, uninsured up, poverty up, income down, right here right now on your watch. So, who is distracting whom?

"We should be more modest in our belief that we can impose democracy on a country through military force. In the past, it has been movements for freedom from within tyrannical regimes that have led to flourishing democracies; movements that continue today."

Mr. Change, speech, Nov. 20, 2006.

"If people tell you that we cannot afford to invest in education or health care or fighting poverty, you just remind them that we are spending $10 billion a month in Iraq. And if we can spend that much money in Iraq, we can spend some of that money right here in Cincinnati, Ohio, and in big cities and small towns in every corner of this country."

 Mr. Change at 99th NAACP Convention Jul 12, 200.

Those of us who listened to Mr. Change knew he was careful with words, a parser if you will. No where was he more careful not to get pinned down than on the illegal wars for corporate profit. From December 2007 before the Iowa caucus, Mr. Change went on long and loud about how Clinton had voted for the Iraq war and he had not. In fact, Mr. Change went on so long and loud about Clinton "Yes" and Mr. Change "No" that by every standard the implication was clear to the voting public.

Mr. Change opposed the foreign wars.

As Mr. Change began to put away Clinton-time, his parsing became more evident as did one of Mr. Change's greatest skills... the back pedal.

"Those who write of Obama that "when it comes to international affairs, he will be a huge improvement on Bush" demonstrate the same willful naivety that backed the bait-and-switch of Bill Clinton - and Tony Blair...as the American writer Mike Whitney put it succinctly, "bait-and-switch" Democrats, of whom Obama is the prince."

 John Pilger, "Obama, the Prince of Bait-and-Switch"

The US military is in Afghanistan because there are pipelines to be built for Eurasian oil and natural gas for US corporate profit. The US military is being used at tax payer expense to enforce corporate profit that does not benefit those who bear the cost. Mr. Slick is a corporate tool. Corporate tools make sure the public pays for private profit.

Mr. Slick -- The Piece Candidate

Artwork Courtesy Sam Green & Bill Seigel

"I was reporting from Vietnam when that buildup began, and then as now there was an optimism not supported by the facts on the ground. Then as now there were references to elections and supporting local politicians to win the hearts and minds of people we were bombing. Then as now the local leaders on our side turned out to be hopelessly corrupt, a condition easily exploited by those we term the enemy.

Those who favor an escalation of the Afghanistan war ought to own up to its likely costs. If 110,000 troops have failed, will we need the half million committed at one point to Vietnam, which had a far less intractable terrain? And can you have that increase in forces without reinstituting the draft?

It is time for Democrats to remember that it was their party that brought America its most disastrous overseas adventure and to act forthrightly to pull their chosen president back from the abyss before it is too late."

Robert Scheer, "Obama's Quagmire Looks a Lot like Vietnam"   September 11, 2009.

"America now has more military personnel in Afghanistan than the Red Army had at the peak of the Soviet invasion and occupation of that country. According to a Congressional Research Service report, as of March of this year, the U.S. had 52,000 uniformed personnel and another 68,000 contractors in Afghanistan -- a number that has likely grown given the blank check President Obama has written for what's now being called "Obama's War."

That makes 120,000 American military personnel fighting in Afghanistan, a figure higher than the Soviet peak troop figure of 115,000 during their catastrophic 9-year war. Just this week, General McChrystal, whom Obama appointed to command American forces in Afghanistan, is talking of sending tens of thousands more American troops. At the height of the Soviet occupation ,Western intelligence experts estimated that the Soviets had 115,000 troops in Afghanistan -- but like America, the more troops and the longer the Soviets stayed, the more doomed their military mission became."

Mark Ames, AlterNet  Obama Is Leading the U.S. Into a Hellish Quagmire

Posted September 3, 2009.

"Since 1945, by deed and by example, the US has overthrown 50 governments, including democracies, crushed some 30 liberation movements and supported tyrannies from Egypt to Guatemala (see William Blum's histories). Bombing is apple pie. Having stacked his government with warmongers, Wall Street cronies and polluters from the Bush and Clinton eras, the 45th president is merely upholding tradition. The hearts and minds farce I witnessed in Vietnam is today repeated in villages in Afghanistan and, by proxy, Pakistan, which are Obama's wars."

John Pilger, Obama's 100 Days - The Mad Men Did Well

"In Afghanistan, the US "strategy" of killing Pashtun tribespeople (the "Taliban") has been extended by Obama to give the Pentagon time to build a series of permanent bases right across the devastated country where, says Secretary Gates, the US military will remain indefinitely."

John Pilger, Obama's 100 Days - The Mad Men Did Well

$1 trillion Iraq war WAS $1 trillion in Wall Street Revenue



A Newly Escalated $1 trillion Afganhstan War will be a NEW $1 trillion in Wall Street Revenue.

"Meaningless is the right term for the Afghanistan war, too, because our bloody attempt to conquer this foreign land has nothing to do with its stated purpose of enhancing our national security. Just as the government of Vietnam was never a puppet of communist China or the Soviet Union, the Taliban is not a surrogate for al Qaeda. Involved in both instances was an American intrusion into a civil war whose passions and parameters we never fully have grasped and will always fail to control militarily.

 The Vietnamese communists were not an extension of an inevitably hostile, unified international communist enemy, as evidenced by the fact that communist Vietnam and communist China are both our close trading partners today. Nor should the Taliban be considered simply an extension of a Mideast-based al Qaeda movement, whose operatives the United States recruited in the first place to go to Afghanistan to fight the Soviets."

Mark Ames, AlterNet  Obama Is Leading the U.S. Into a Hellish Quagmire

Posted September 3, 2009.

What the Corporate News Media DOES NOT WANT YOU TO SEE. GE: Owner of all the NBC's, the US 10th largest, most civilly fined, criminal charged military contractor. Watch "Today" with the idiot Matt Lauer... enjoy mindless fluff... ask no questions... buy idiot consumer products... be happy...
 

Watch CNBC...See gals with big boobs talking stocks... don't look here...
 

While You Are Shown Retards With "Death Panel" Signs



This is What is Done to Human Beings in YOUR Name for Corporate Profit
 

"They're probably going to be pretty much like the preliminaries a couple of months ago. Which showed that both Obama and McCain were getting the bulk of their financing from the financial institutions and for Obama, law firms which means essentially lobbyists.

The distribution of funding has over time been a pretty good predictor of what policies will be like for those of you who are interested, there's very good scholarly work on this by Tom Ferguson in Umass Boston, what he calls the investment theory of politics.

Which argues essentially that elections are moments when groups of investors coalesce and invest to control the state and has quite the substantial predictive success. Gives some suggestion as to what's likely to happen. So that part's familiar."

Noam Chomsky: "What Next? The Elections, the Economy and the World"
http://www.democracynow.org/2008/11/24/noam_chomsky_what_next_the_elections
Democracy Now. November, 2008.

"It is time the Obama lovers grew up. It is time those paid to keep the record straight gave us the opportunity to debate informatively. In the 21st century, people power remains a huge and exciting and largely untapped force for change, but it is nothing without truth. "In the time of universal deceit," wrote George Orwell, "telling the truth is a revolutionary act."

 John Pilger, "The Politics of Bollocks"

I am not the only one hearing double talk. 

If you got this far, thanks for reading.

Photo: Courtesy Truthdig.com

"He has blundered into a deepening quagmire in Afghanistan, has continued the Bush policy of buying off Wall Street hustlers instead of confronting them and is now on the cusp of bargaining  away the so-called public option, the reform component of his health care program."

Robert Scheer,  Obama's Presidency Isn't Too Big to Fail

The New Democrat is the Old Republican. Just as the Old Republicans devolve into some sort of deranged regional Confederate Party full of Michael Douglas' "Falling Down" character, taking the perceived demise of the white male in society as some sort of personal attack on their world.

The religious fanatics populating the Old Republicans are an angry unintelligible mass of screamers without logic. Raised by not sparing the rod, these beaten little Christers are now lashing out in the anger as the adults of abused children. The abused become the abusers in Max Blumenthal's well researched analysis of the angry white mobs of the Christian right... the New Confederate Party.

The New Democrat is really the old Rubin-McAuliffe corporate Democrat. McAuliffe whose guiding political philosophy is "Hey pal, payola for me not the other guy's party..." witnessed for the first time in 2006 Democrats receiving more campaign bribes from corporations than the Republicans by 60% to 40% advantage. Pelosi and Reid behaved like it. Not able to find the votes to stop anything or for any traditional Democrats populace position promised in the elections. From 2006 to 2008, Reid and Pelosi's marching orders came from their corporate owners whose bidding was carefully followed with excuses to the public.

So why would Wall Street and corporate power hand $600 million for a presidential campaign to an obscure first term center from Illinois with political speeches like these?

"This is a verdict on the failed policies of the last eight years that said that we should strip away consumer protections, let the market run wild, and prosperity would rain down."

"You've got to have somebody in Washington who is thinking about the middle class and not just those who can afford to hire lobbyists."

"It's not enough just to help those at the top. Prosperity is not just going to trickle down."

"The problem we have is that Washington has become a place where good ideas go to die. They  go to die because the lobbyists and special interests have a strangle-hold on the agenda in Washington."

Mr. Change, Presidential Debate, University of Texas, Austin, February 21, 2008.

"We'll make it clear to the special interests that their days of setting the agenda in Washington are over, because the American people are not the problem in this 21st century--they are the answer."

Mr. Change, Speech in Flint, MI, in "Change We Can Believe In," p.258-9 Jun 15, 2008.

Robert Scheer, the west coast Seymour Hirsch, hits the nail on the head finding the fatal flaw in the snow blower named Obama. Brand Obama is fading fast, about to be found out by the gullible American public as nothing more than the empty calories of a political slurpee in a wasteful plastic convenience store cup. Scheer is not alone in detailing the constant contradiction in the campaign rhetoric of Mr. Change versus the actions of the now elected Mr. Slick.

Regulation?

"Let's, first of all, understand that the biggest problem in this whole process was the deregulation of the financial system. Sen. McCain, as recently as March, bragged about the  fact that he is a deregulator. On the other hand, two years ago, I said that we've got a sub-prime lending crisis that has to be dealt with."

Mr. Change, Presidential Debate, Belmont University, Nashville, Tennessee, October 7, 2008.

According to Business Week's Chad Terhune and Robert Berner, the new Mr. Slick "save the economy policy" is reinflating the housing bubble using the FHA to spread new sub prime loans:

FHA-Backed Loans: The New Subprime

"Washington, meanwhile, has vastly expanded the availability of such taxpayer-backed loans as part of the emergency campaign to rescue the country's swooning economy."

"Their new strategy: taking advantage of a long-standing federal program designed to    encourage homeownership by insuring mortgages for buyers of modest means."

"You read that correctly. Some of the same people who propelled us toward the housing market calamity are now seeking to profit by exploiting billions in federally insured mortgages."

Regulation?? The Birth of Mr. Slick 

"A year ago, I went to Wall Street and said we've got to reregulate, and nothing happened."

Mr. Change, Presidential Debate, University of Texas, Austin, February 21, 2008.

Photo: Courtesy Phil Stock World

"Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some but also our collective failure to make hard choices and prepare the nation for a new age."

"The state of our economy calls for action: bold and swift."

"But this crisis has reminded us that without a watchful eye, the market can spin out of control. The nation cannot prosper long when it favors only the prosperous."

"To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history..."

Transcript: Barack Obama's Inaugural Address, January 20, 2009.

Allow me to retort, Mr. President.

8 months ago you were sworn in with the high rhetoric of change and reigning in Wall Street's greed that had brought down the economy. Yet your solution was to send the compromised regulator Tim Geithner to Wall Street to bring back a plan. Take the Federal Reserve whose shareholders, Chase, Citi, JP Morgan, Goldman Sachs are the very players who caused the destruction through fraud and criminality, have the Fed as the new super regulator. The problem is the Fed had the power to stem the fraud and corruption and completely failed to do so. After all, look at who owns the Fed...

In response to Obama's speech on Wall Street, September 15, 2009. Professor of Economics, Columbia University, Joseph Stiglitz in the UK Guardian:

For all Obama's talk of overhaul, the US has failed to wind in Wall Street

"Last night Barack Obama defended his administration's response to the financial crisis, but the reality is that a year on from Lehmans' collapse, it has failed to take adequate steps to restrict institutions' size, their risk-taking, and their interconnectedness. Indeed, it has allowed the big banks to become even bigger - just as it has failed to stem the flow of profligate executive bonuses. Obama's call on Wall Street yesterday to support "the most ambitious overhaul of the financial system since the Great Depression" is welcome - but the devil, as ever, will be in the detail."

"But the Obama administration has created a new concept: institutions too big to be resolved, too big for capital markets to provide the necessary discipline. The perverse incentives for excessive risk-taking at taxpayers' expense are even worse with the too-big-to-be-resolved banks than they are at the too-big-to-fail institutions. We have signed a blank cheque on the public purse. We have not circumscribed their gambling - indeed, they have access to funds from the Fed at close to zero interest rates, and it appears that "trading profits" have (besides "accounting" changes) become the major source of returns."

"I fear that our collective response has been mistaken and inadequate - that we may just have made matters worse. The financial sector would like us to believe that if only the Federal Reserve and the Treasury had leapt to the rescue of Lehman all would have been fine. Sheer   nonsense. Lehmans was not a cause but a consequence: a consequence of flawed lending practices, and of inadequate oversight by regulators.

Professor William Black, Associate Professor, Economics and Law, University of Missouri, Kansas City was a deputy director at the former Federal Savings and Loan Insurance Corp. during the Reagan deregulation fueled savings and loan crises of the 1980s.

Professor Black HAS credibility because he is the man with THE record in the last banking scandal. In spite of repeated resistance and interference from the Reagan and Bush Sr. administrations, Black help round up Keating, corrupt Senators and brought criminal charges and 1,000 felony convictions for S&L insiders with about 700 doing  jail time.

From Bill Moyers April 2009 interview with Professor Black, Bill Moyers Journal, PBS

Moyers' Introduction:

"William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri -- Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law..."

"Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC...and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on  Financial Institution Reform, Recovery and Enforcement."

"Black developed the concept of "control fraud" -- frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined...and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management."

The Interview:

WILLIAM K. BLACK: Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it's going to take $2 trillion -- a trillion is a thousand billion -- $2 trillion taxpayer dollars to deal with this problem. But they're allowing all the banks to report that they're not only solvent, but fully capitalized. Both statements can't be true. It can't be that they need $2 trillion, because they have masses losses, and that they're fine.

WILLIAM K. BLACK: These are all people who have failed. Paulson failed, Geithner failed. They were all promoted because they failed, not because...

BILL MOYERS: What do you mean?

WILLIAM K. BLACK: Well, Geithner has, was one of our nation's top regulators, during the entire subprime scandal, that I just described. He took absolutely no effective action. He gave no warning. He did nothing in response to the FBI warning that there was an epidemic of fraud. All this pig in the poke stuff happened under him. So, in his phrase about legacy assets. Well he's a failed legacy regulator.

BILL MOYERS: But he denies that he was a regulator. Let me show you some of his testimony before Congress. Take a look at this.

TIMOTHY GEITHNER: I've never been a regulator, for better or worse. And I think you're right to say that we have to be very skeptical that regulation can solve all of these problems. We have parts of our system that are overwhelmed by regulation.

Overwhelmed by regulation! It wasn't the absence of regulation that was the problem, it was despite the presence of regulation you've got huge risks that build up.

WILLIAM K. BLACK: Well, he may be right that he never regulated, but his job was to    regulate. That was his mission statement.

 ...WILLIAM K. BLACK: I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they're refusing to obey the law.

BILL MOYERS: In other words, they could have closed these banks without nationalizing them?

WILLIAM K. BLACK: Well, you do a receivership. No one -- Ronald Reagan did receiverships.Nobody called it nationalization.

BILL MOYERS: And that's a law?

WILLIAM K. BLACK: That's the law.

BILL MOYERS: So, Paulson could have done this? Geithner could do this?

WILLIAM K. BLACK: Not could. Was mandated--

BILL MOYERS: By the law.

WILLIAM K. BLACK: By the law.

BILL MOYERS: This law, you're talking about.

WILLIAM K. BLACK: Yes.

BILL MOYERS: What the reason they give for not doing it?

WILLIAM K. BLACK: They ignore it. And nobody calls them on it. 

As Barron's astutely points out in an April 2009 interview, The Lessons of the S&L Crisis:

"We have failed bankers giving advice to failed regulators on how to deal with failed assets. How can it result in anything but failure?"

"If they are going to get any truthful investigation, the Democrats picked the wrong financial team. Tim Geithner, the current Secretary of the Treasury, and Larry Summers, chairman of the National Economic Council, were important architects of the problems. Geithner especially represents a failed regulator, having presided over the bailouts of major New York banks."

"Geithner has appropriated the language of his critics and of the forthright to support dishonesty. That is what's so appalling -- numbering himself among those who convey tough medicine when he is really pandering to the interests of a select group of banks who are on a first-name basis with Washington politicians."

As astute financial blogger Jesse from Jesses Café American notes:

Stock Market Rally: Shenanigans Abound

"Obama and his team have NO credibility for reform on Wall Street after their handling of  Goldman Sachs and the AIG payouts."

"Inflation is good for financial assets, and we think another bubble is in the cards, at least for now given Obama's unwillingness to reform, unless some exogenous event or actor intervenes."

Is Jesse alone? Analyst Larry Doyle from "Sense on Cents" Whatever Happened to Financial Reform

"Today President Obama will make a campaign stop on Wall Street to promote his calls for financial regulatory reform. We will receive the standard platitudes. Obama will likely recruit a few high profile Wall Street executives to support his initiatives or lack thereof. The fact is, Wall Street has been working diligently to make sure that ultimately "business as usual" carries the day." 

Kevin Depew at Minnyanville, Five Things: The Myths of the Crisis

"Think about it this way. The word credit comes from the Latin "credere," which means, literally, "to believe, or to trust." That is really all you need to know about the modern financial system. When the credere is gone, the whole thing unravels, and it works both ways, from lender to borrower, and from borrower to lender. This is why monetary and fiscal policies aren't working."

"Well, unfortunately, we're rapidly moving right back to the same place we were before the real issues facing us in The Crisis became apparent. In other words, all that has happened is that the doctor (the government) has been successful in treating the symptoms of the disease (failed institutions and widespread insolvency), but in doing so the disease itself (too much debt) has actually worsened."

Wall Street Reform- Mr. Slick gets an "F"

Cartoon: By Mike Keefe, The Denver Post

"We are at a defining moment in our history, going through the worst financial crisis since the  great depression..."

Mr. Change, Presidential Debate, University of Mississippi, September 26, 2008.

Oh really? You could not tell by the Obama lack of action, the sin of omission.

So how does an eloquent speech delivering academically accomplished graduate from Harvard Law mislead those who voted for him on the true intent of his policies?

Like Reid and Pelois who have been in control of Congress since 2006 but yet just can't seem to find the votes on any of those supposed positions of the Democratic Party...

Mr. Change simply fails at all those promises of Wall Street reform, ending imperial wars for profit at tax payer expense and now the most stark failure to put forward any measure of health care reform. The New Democrats know who their corporate masters are and now do the bidding of Wall Street and corporate power by selling out the American public at every turn.

Mr. Change ran a campaign of implication. He IMPLIED to progressive voters that he was all about "fairness" and Wall Street reform. He campaigned repeatedly on the excess of greed and reform to help main street. He parsed his words, made vague implications.

Once elected he claimed we all just did not hear what he said...

Mr. Change ran a campaign calling for the end to unjust wars that the American public was lied into by the installed Junta regime of Bush the Dunce. Mr. Change campaigned long and loud about how he had voted against Congressional approval for the Iraq war, while his opponent from Clinton time had been a war monger.

Once elected he claimed we all just did not hear what he said...

Mr. Change campaigned on Health care for all. Mr. Change campaigned on reform of the current rip off system that enriches health insurance corporations while denying treatment to those with insurance and dumping any one with an anything as pre existing condition from the roles after taking their premiums year after year in a criminal cabal of rip off. Mr. Change even campaigned for universal single payer.

Once elected he claimed we all just did not hear what he said...

Now progressives may start to be getting the picture. Mr. Change is in fact Mr. Corporate, Mr. Tool of Wall Street.

Mr. Change is careful. He is a word parser and clever dealer in logic and implication when speaking. He continually tells those who voted for him that it is their fault they implied what was not there. The biggest and most useful weapon of Mr. Change for his Wall Street and Corporate masters against the American people is his sin of omission.

It is more important what Mr. Change DOES not do rather than continuing to buy the kool-aid and listen to those eloquent speeches of high rhetoric. He talks major reform but some how never acts or accomplishes. This is the pattern. Talk the big game but never do anything.

This has been the Pelosi/Reid MO since being given a majority in 2006. Mr. Change has embraced this style of inaction as cover for the looting of the American public by Wall Street, continuing foreign wars for corporate profit that bleed the American tax payer and kill the sons and daughters of the less advantaged.

Now what may be the final straw to the American public... Health Care Reform that wasn't. It won't kick in until 2013 once Mr. Change is safely reelected. Then the big screw turns. Simply look at the Willard "the Rat" Romney Massachusetts plan of forced public purchase of private policies with no reform of the corrupt health insurance industry. Premiums are going up at 10% a year including a 9% increase this year.

Even with the careful timing of the "big health care screw," progressives and independents must be starting to catch on. Mr. Change is in fact Mr. Slick, a flim flam man, a con artist a bull shitter. Of the big three campaign themes of Mr. Slick, the economy, Wall Street reform, ending unjust wars and health care "reform," the first big failure of Mr. Slick is lack of Wall Street reform.

Mr. Slick allowed his minions to use Fed monetary policy to flood the investment banks with capital. Being the greedy worms they are, Wall Street banks leveraged the cash like crazy and went on an equity market pumping binge. Summers et al do know one thing... higher stock prices mean higher consumer confidence. As Summers and the boys love to trot out these two pointless statistics along with a host of BLS manipulated economic statisitics unemployment (way too low), GDP (way too high), CPI (way too low)...

Is there a pattern here? Can you believe any statistic or green shoot report out of this government or corporate owned news media?

The Great Transformation: Mr. Change to Mr. Slick

Photo: Courtesy Jesse's Cafe Americain

"The Obama Economics and Regulatory Team, in conjunction with the Federal Reserve, have accomplished no serious reform of the fiancial system. They have enabled the type of market inefficiency, soft fraud and price manipulation that is undermining global confidence in the integrity of US markets and financial products. And they have advanced a proposal to consolidate a huge amount of regulatory power under the Federal Reserve, a private banking agency that was at the root of our unfolding financial crisis.

The time has passed when Obama could have pointed to the past mistakes of his predecessors as the fault for our problems. Thanks to Tim Geithner, Barney Frank, and Larry Summers he now owns the financial crisis, and the coverups, policy errors, scandals, conflicts of interest and bailouts that have occurred since he has taken office. His reappointment of Ben Bernanke as Federal Reserve chairman most surely tied a bow on his ownership package for the crisis, which is in danger of becoming his 'financial New Orleans.'

Wall Street insiders and their enablers pig out on public money while the nation suffers. This is not change, this is business as usual."

Jesse: August 9, 2009, US Equity Markets Look Dangerously Wobbly As Insiders Sell In Record Numbers

Mr. Slick owes somebody something. The somebody is the masters of Wall Street. The something is the $600 million to run a Madison Avenue slick campaign to sell the people on the latest brand illusion.

Once upon a time Reagan and the conservative Republicans looked Madison Avenue slick thanks to the backing of Wall Street worm and CIA criminal Bill Casey and Alfred Bloomingdale. Reagan and his cronies looked smart, competent, man with the plan. In contrast, Mondale, Tip O'Neil and Michael Dukakis could not come up with a plan to tie their own shoes on time.

So what has changed? Now it is Democrats who appear Madison Avenue slick, smart, competent, men and women with the plan. By contrast Boehner (pronounced Bone-er) and Cantor can't even stand in front of the press with a budget plan that has any numbers inside... just a cartoon cover, a National Chairman so policy dumb and contradiction challenged that he makes less sense than the guests on Jerry Springer...

These are the same Republicans that looked so smart just two decades ago and Democrats that looked so dumb. It is the same people...people. So what changed? Nothing. Just the big money propaganda switched sides to buy the other brand and sell it to you as something new Madison Avenue style. It is working as the new brand of Kool-Aid, the super popular brand even in the face of over whelming evidence that the new Kool-Aid is just some cheap powder in a bag that is not to our benefit, just the benefit of elite wealth who own this government and the country.

It is in fact the same old soak the working class and screw us until we melt policy.

Mr. Slick says that is change you and I can believe in. 

Here is change I can believe in:

Photo:  "We the Jury" Courtesy of Portfolio.com

If you got this far, thanks for reading.

Care to comment? Refute my facts with facts. Save invalid argument, fallacy of logic and shrill dogma for the Daily Kos where such fundamentalism is celebrated...

Warning! May contain Conspiracy Theory Related Materials!


Courtesy eons.com

So you are an NRA member.

You proclaim and support your right to bear arms under the constitution. Why not? Like religion and press, you have your own constitutional amendment in the Bill of Rights.

Currently, your amendment ranks #2. So why not be proud and celebrate it.

Bearing arms is useful. With real unemployment, U6...

Not that phony U3 where you are only unemployed as long as you are collecting unemployment insurance payments... once you run out of unemployment insurance you are no longer counted as unemployed by U3... are you any less unemployed?

I thought so.

What if you are an unemployed construction worker and there are no construction jobs in your area for you to apply for? You are then marginally attached according to U3 and therefore not unemployed...are you any less unemployed?

I thought so.

So real unemployment, U6 is closer to 16% and will probably rise close to 20% by that fine election year of 2010.

With millions of people running out of unemployment insurance and no new jobs under the Bush implosion and Obama no plan/ no recovery team of Save Wall Street Bankers Summers and Save Wall Street Bankers Geithner, the food budgets of Americans may get a little meager during record Wall Street bonus season.

That is when it may pay to have a shotgun and a hunting rifle. Deer and pheasant. Many of us may need to put some food on the table.

So you 2nd amendment fans have a practical side as well.

But I have to ask you something:

You, Steve Urkel looking rifle carrier interviewed near Obama town hall meeting:


Courtesy TPM



Yeah, you.



I have to ask you... Let us think about this logically:

1. You are walking around armed at a political event where the President is present.

2. The FBI, Secret Service and NSA are clearly going to be using full video surveillance and face recognition software, running the scans through state ID and drivers license data bases to identify you and locate your residence...even if no one officially walks up to you and asks for ID.

3. You will then no doubt be subject to full NSA wiretaps, electronic location surveillance and records searches, bank, tax, etc.

4. So you accomplished what walking around with your AR-15?

Painted a big bulls-eye on your own ass?

You think you are going to become some sort of gun control martyr when the ATF shows up and seizes you and your guns?

Or is it more likely they will serve the warrant at 4am and no one but you will even notice you are in custody.



No right wing hero press appearances... nothing. You will be held as a non person at the leisure of your government.

Until 45 days from now when your ex wife did not get the child support and files a complaint with the judge in family court...then some one will miss you.

Even if it only is your ex wife wanting the child support your jailed ass failed to pay.

That is what I think is funny about people who walk around with guns because they can... serious people don't make a show of it.

The US government has reached the $1 trillion budget deficit level for fiscal year 2009 which will end September 30, 2009. The forecast budget deficits for 2010 are in excess of $1 trillion. The US Treasury traditionally finances deficits by having the Federal Reserve auction US Treasury bonds. So, in the face of record US national debt and record yearly budget deficits, how much debt is there a market for? How many Treasuries will Fed be able to hoist onto an already saturated market.

While the corporate news media reports the daily fluctuations in bond prices and interest spreads, there is little analysis of the overall trend, the big picture. There are a few independent commentators and bloggers who truly understand the ramifications of debt, service of the debt and an economies ability to carry that debt. Interest is a tax on an economy. It is rent for the money borrowed. When debt levels become too high, an economy cannot generate enough earnings to keep servicing exponentially growing levels of rent (interest)... Euler's magic number "e" with those wonderful properties...

The debt saturated US consumer is perfect example. The US consumer has spent the last 30 odd years since that policy genius Reagan helped us out by replacing falling real incomes (as opposed to non inflation adjusted or nominal income) with consumer debt to continue consumption growth.

We all know now the routine. Run up credit cards, take out a 2nd from the home as ATM machine, pay off the credit cards, buy an SUV, rinse and repeat. Which was all good and well keeping standards of US consumption in the needed (?) zone of flat screen tv's, club med vacations, and blackberries.

The same scenario faces our wonderful Federal Government. Rent, interest on the national debt is eating up more and more discretionary income, our tax revenue. Unlike consumers, the Federal Government is still issuing more and more debt.

Ilagri at The Automatic Earth posted an excellent analysis on who owns all the Treasury bonds now by category. Of these 11 categories, who has the capacity to step up and triple their purchases to finance this new massive 2009 and fiscal year 2010 Federal deficits. The analysis is done by Eric Sprott and David Franklin at Sprott Asset Management.

The Solution is the Problem

Me: The Premise:

The US government raised $705 billion worth of new debt in 2008. The debt was raised to pay for a $455 billion budget deficit and $250 billion in "supplemental appropriations" for the wars in Iraq and Afghanistan. In 2009, the US government will (and must) sell $2.041 trillion in new debt. This debt will pay for a projected budget deficit of $1.845 trillion, supplemental appropriations of $196 billion for Iraq and Afghanistan, a fund for pandemic flu response and a line of credit to the IMF.In fiscal 2009, the United States must find buyers for almost three times the debt that was issued last year. Table A presents the ownership breakdown of current outstanding US debt as of September 2008. Each of the debt buyers presented will have to buy three times the debt that they bought last year, by September 2009, in order to balance the accounts of the United States Government.

Me: Who is the biggest holder of US Treasury debt?

Sprott and Franklin  run it down like this:

Me: Remember America needs:

1. $500 billion for a couple of escalating  wars to make the world safe FROM democracy.

2. $120 billion for 800 over seas military bases, plus an extra $50 for new massive base and "embassy" construction.

3. $80 billion on new 21st century gold plated Pentagon armaments projects and MISGUIDED missile systems to keep you safe from people that can't hit with anything anyway...

4. Another $350 billion in Wall Street welfare, bank bailouts once the phony mark to what market? Accounting wears off, and the Alt-A and option ARM foreclosure tsunami hits...

5. $200 billion ($1 trillion over 5 years) bailout for the Health Insurance industry marketed to you as health care reform...

Which will screw the consumer by locking everyone into the shitty rip off HMO they get from their employer and the uninsured and unemployment will be forced to buy a mandated overpriced policy.

Amendments written of course by the Health Insurance industry who owns Congress two days a week... $180 million in campaign bribes over 4 years buys you 2 days... Wall Street's $400 million in campaign bribes buys you 3 days...

Judging by Ensign, Vitter and Sanford, former Congressman, Congress are just regular whores on the weekends...

6. Say $300 billion in your average run of the mill "other" corruption: corporate tax cuts, bailouts for commercial real estate bond holders, AIG may need another $100 billion for Goldman... Jamie Dimon may need a new pair of shoes...

Jamie Dimon's Brand New Gucci Loafers... With 24 carat gold tassels.... Obama's favorite banker... maybe Barak will buy Jamie those new shoes...

5 states may need $50 billion...

So, who according to Sprott & Franklin is going to step up??

2. Foreign holders? Nope:

"They collectively purchased $564 billion last year, and the US will require them to increase their purchases to $1.6 trillion in 2009. Thus far, they have only purchased $465 billion to March 2009, which is halfway through US fiscal year - and well behind the pace needed to triple last year's purchases.Current data does not bode well for further purchases either. In fact, April Treasury data revealed that 'Foreign and International Holders' were net sellers of US debt from March to April 2009"

3. Mutual Funds? Nope.

"#3 on our list, drove a surge in debt purchases last year as the financial collapse took hold. They purchased $311 billion in 2008, so the US needs them to purchase close to a trillion this year.How are they doing thus far in 2009? A paltry $151 billion as at the end of December - and current data doesn't look promising for further purchases. Assets in money markets funds fell by $72.85 billion over the past week alone, including a large portion of which was comprised of US debt.We can safely assume that 'Mutual Funds' will fall short of their one trillion dollar quota for fiscal 2009."

 4. State & Local Government?  HaHaHa... talked to Arnold lately??

"I would like a bail out please, for which I will gladly pay you... on Tuessssday."

"Next, we examine 'State and Local Governments' (#4). As you have probably already heard, the majority of State governments are in serious financial trouble.The latest estimates show income tax revenues down a whopping 26% from last year. The State of California, which represents the 10th largest economy in the world, is currently on the verge of collapse from economic stress.Seeing as how they were net sellers of US debt last year, we will assume, given their difficulties, that they will be net sellers this year as well - so no help here."       

6. Other Investors: Up for the year... but triple?

'Other Investors', #6 on our list, is a catch-all category. It includes individuals, government- sponsored enterprises, brokers and dealers, bank personal trusts and estates, corporate and non-corporate businesses and other investors.

They collectively purchased $141 billion last year, and have currently purchased $158 billion to December 2008. As a group they are on track to purchase over $600 billion in debt this fiscal year.

They are the only group realistically capable of tripling the purchases they made last year."         

 7. Pensions--Private.. let's se, GMs pension fund just traded revenues for GM stock. No cash for treasuries there.... Every corporation of the NYSE is cutting contributions to 401k's... not much help there... how about all those unemployed and forced part timers? Got to be 16 million people you could hit up there...

9. Pension Funds-- State & Local Gov't... let's see, Arnold needs to make some big payments in CalSTRS and CalPERS...

HaHa... yeah Arnold has his own brand of IOU for state pension funds. And after the state gets done stealing $2 billion in property taxes from county and local gevernments to close the state deficit, the counties and cities won't be able to meet their pension obligations either...

Next we assess the pension funds. We combine 'Pension Funds - State and Local Governments' (#9) and 'Pension Funds - Private' (#7), as they both purchase US debt for similar purposes.

Last year they collectively purchased a combined total of $52.6 billion of US debt, and under our tripling scenario they must purchase over $150 billion worth of US debt this year.

As at the end of December 2008, the last date for which we have data, records show that they have purchased a mere $8.5 billion - so they have a long way to go. In fact, the Canada Pension Plan Investment Board recently stated that 'it would be dangerous to increase the fixed-income portion of our portfolio at this point.

'If the Canada Pension Plan is any indication, it is unlikely this group will carry their weight in fiscal 2009."

8. US Savings Bonds: The people have cash to buy Treasuries. Ask the People! Ask the People:

'US Savings Bonds' (#8), which represents US domestic buyers of government debt, were net sellers in 2008 and net sellers again in 2009.This is no surprise to us given the state of the economy. There are no buyers in this category.

Oh yeah, I forgot about the economy...

10. Depository Institutions & 11. Insurance Companies: We know the banks have big cash!!

Look at the huge earnings JP Morgan put out! Goldman that newly converted deposit bank... because it bought a couple of backwater NY state banks so it could pony up to the Feds discount window and bilk the American tax payer so more... hey Goldman the public only has so many orifices you can rape us in...

But wait! The insurance industry is solid! Look at all the money AIG has been lavishing on Wall Street banks at 100 cents on the dollar and foreign banks no less... 

'Depository Institutions'  and 'Insurance Companies' Together they have been net sellers of US debt so far this fiscal year, selling a combined total of $20 billion in US bonds.As a group they made no new net purchases last fiscal year, and were sellers of debt as of the first quarter of this fiscal year. 

1. INTERGOVERNMENTAL INSTITUTIONS (not for the squeamish):

Me: Well, they don't actually buy bonds. They get bonds when their tax revenue is stolen. Congress and various presidents have STOLEN $4.2 trilllion dollars to date from Social Security and left nothing but IOUs that we all can see now will never be repaid.

The next time Congress or what ever front man is President says we NEED to reform Social Security remember that. These are the same people that stole $4.2 trillion of our taxes that was supposed to be dedicated to paying our retirements.

It may not surprise you to learn that the largest percentage owner of US debt is the United States Government itself. Perhaps this doesn't make immediate sense to some readers, but it is a fact. The debt holdings are held in accounts for the various trust funds the US manages for its future obligations - the largest of which are set aside for Social Security and Medicare. These trust funds are lumped together and referred to as "Intragovernmental Holdings".

The only 'assets' held by these 'trust funds', however, are special-issue Treasury Bonds. Why? Because the US Treasury takes the Social Security and Medicare payroll taxes and uses these funds to pay for anything from aircraft carriers to education to welfare. To cover this drawdown, special-issue Treasury Bonds are deposited into the trust funds for Social Security and Medicare as IOU's.

In 2008, the Treasury Department issued the "Intragovernmental Holdings" account $254 billion in bonds (IOU's), and in the first half of fiscal 2009 this account actually became a net seller of bonds.

Because the account is not broken down by individual trust fund, it is difficult to see which specific trust fund liquidated their bonds, but we suspect it was Medicare.

Me: You can call this first item what it is: Corporate welfare direct to the Pharmaceutical and Health Insurance  Industry:

"As it stands, Medicare is in an operating deficit in 2009 with premiums coming in at $14 billion and outlays totaling $348 billion."

Me: $14 billion in corporate welfare...

Because the US Treasury takes the Social Security and Medicare payroll taxes and uses these funds to pay for anything from aircraft carriers to education to welfare. To cover this drawdown, special-issue Treasury Bonds are deposited into the trust funds for Social Security and Medicare as IOU's.

For all intents and purposes, Social Security and Medicare receipts are essentially considered to be another source of government tax revenue that can be spent each year.

Obviously this is a very troubling development for the US, and unfortunately it is likely to get worse. This year's Social Security fund is only expected to balance, which is bad news for the government.

Along with Social Security, Medicare is one of the trust funds that should be posting surpluses right now in anticipation of the massive future commitments the retiring Baby Boomers will require.The difference will be supplemented by sales of its IOU bonds, which will ultimately add to the amount of new government debt that must be sold in fiscal 2009.

We won't speculate on what would happen to the Social Security program if new buyers for US debt disappeared, but we should all bear in mind that in that scenario the special-issue 'IOU's' in the "Intragovernmental Holdings" account would be rendered worthless, and the US Government's social 'safety net' would vanish.

5. AAHHHHHHHH.....The Federal Reserve:

So, after all this, it should be clear by now as to who is going to cover the difference this fiscal year. As the lender of last resort, the only purchaser left is the Federal Reserve. In 2008 they were net sellers of almost $300 billion of bonds, but in the first half of this fiscal year they have been buyers of almost $280 billion of bonds.

The Federal Reserve is the lender of last resort and must support the market for US debt. The policy 'solution' that the Federal Reserve implemented in March 2009 is called 'Quantitative Easing'. Given our projections above, this was not an option for them, but a necessity.It is an extreme form of monetary policy used to stimulate the economy when interest rates are at or close to zero.

The Federal Reserve's 'solution' to the debt problem is the problem. It has resulted in the Federal Reserve doubling the monetary base of the United States over the span of a mere nine months. Rather than stimulate the real economy, the QE program has instead resulted in increasing weakness in the international market for US bonds - the proof of which can be seen in the chart below.

Bond investors are running for the exits, and our discussion above confirms what we see in this chart. Traditional buyers of US bonds are now sellers, and they are exercising a non-confidence vote in the US dollar and in US debt.

As we hope the breakdown above has revealed, the future solvency of the United States as a nation state is currently in jeopardy. It is in far deeper trouble than the mainstream press cares to admit.

There are simply not enough new buyers of debt on this planet to support the spending programs of the United States government - and it appears that current holders of debt are beginning to sell.

Because it is impossible to balance the budget from outside sources of capital, the only source of funds left for the US, in all reality, is continued money printing.The Federal Reserve's policy of Quantitative Easing is failing.

The US budget is ludicrous, spending is out of control, spending promises are out of control, the world knows it - and we know it. For all the pundits who see the economy improving over the next year, we invite you to explain to us how this debt crisis will resolve itself without significant turmoil. We've tabulated the numbers above - and they do not lie. As we wrote this past January, welcome to 2009.

Me: Any one want out there want to buy some Treasuries?

Any questions?

Thank you for the posting Mr. Ilargi, and thank you Eric Sprott and David Franklin for a fascinating discussion of clusterf@ck debt financing in the 21st century.

Back to math...

Cockburn Becomes US Citizen

From the Nation:

Alexander Cockburn... columnist and one of America's best-known radical journalists, was born in Scotland and grew up in Ireland.

Wait, they are letting radicals into this country? Radical journalists no less?

Dick Cheney is right... This current administration is failing to protect America from these radicals.

From NNDB:

Alexander Cockburn (pronounced Coburn) is an expatriate Irishman living in Northern California as a radical leftist journalist.

Who is this guy?

Father: Claud Cockburn, from wiki:

Claud Cockburn (1904-1981) was a radical English journalist controversial for communist sympathies. Under the name Frank Pitcairn, Cockburn contributed to the British Communist newspaper, the Daily Worker.... Cockburn was attacked by George Orwell in Homage to Catalonia (1938). Orwell accused Cockburn of being under the control of the Communist Party and was critical of the way Cockburn reported the Barcelona May Days.

 Well, the ol' man was a full blown commie agitator.What else does the Nation say?

He graduated from Oxford in 1963 with a degree in English literature and language.

I knew it, an intellectual left wing commie radical. Wait Northern California?
This intellectual left wing commie agitator is now a voting citizen in my Congressional district? He is going to cancel out my vote?
 
Note: Thanks to California's legendary gerrymandering of Congressional districts, even though I live 6 hours and 300 miles from this pinko, our Congressional district looks like a chicken that has had its neck wrung about 5 times, with one wing sticking out with three dog legs when viewed on a map...
 
Who let this guy into the country anyway? The Nation:

 A permanent resident of the United States since 1973, Cockburn wrote for many years...

Wait, Nixon let this guy in? Law and Order, the silent majority, Nixon?

A permanent resident of the United States since 1973, Cockburn wrote for many years for The Village Voice about the press and politics. Since then he has contributed to many publications including The New York Review of Books, Harper's Magazine, The Atlantic Monthly and the Wall Street Journal (where he had a regular column from 1980 to 1990)...

The Wall Street Journal hired commies and radicals during the Reagan years? Wouldn't Wall Street worm and CIA henchman William Casey have this guy removed?
 
Let's read this thing from the Nation again:

Alexander Cockburn, The Nation's "Beat the Devil" columnist and one of America's best-known radical journalists, was born in Scotland and grew up in Ireland. He has written "Beat the Devil" since 1984.

Wait, I read Beat the Devil all the time... this guy does not seem radical. He seems pretty normal to me.

...with Jeffrey St. Clair he has written or coedited several books including: Whiteout, The CIA, Drugs and the Press; The Politics of Anti-Semitism; Imperial Crusades; Al Gore, A User's Manual; Five Days That Shook the World; and A Dime's Worth of Difference, about the two-party system in America.

Wait, I have read Whiteout, The CIA, Drugs and the Press. It is quite well written and documented.

He is co-editor, with Jeffrey St Clair, of the newsletter and radical website CounterPunch (http://www.counterpunch.org) which have a substantial world audience. In 1987 he published a best-selling collection of essays, Corruptions of Empire...

Oh, that is where I heard the name... I read CounterPunch all the time. This guy is not radical or a commie. He edits one of the best political and economic websites I have read. He has some of the best contributors on a variety of important topics on a daily basis. How do you pull that one off from the lost coast?

Okay Cockburn, you are in for now. But keep that little flag handy at all times and watch your step.

The well written recent essays of Mr. Alexander Cockburn:

I Become an American

Though the U.S. Constitution  seemingly blocks my path at this time, I have taken the first necessary step in my own quest for the White House by becoming a citizen of the United States at approximately 10 am, Pacific time,  last Wednesday, June 17, in the Paramount Theater in Oakland, California

To my immediate left in the vast and splendid deco theater was a Moroccan, to my right a Salvadoran and around us 956 other candidates for citizenship from 98 countries, each holding a small specimen of the flag that was about to become our standard. All of us had sworn early that day that since our final, successful interview with immigration officials we had not become prostitutes or members of the Communist Party.

Well, Mr. Cockburn, you are a member of the press and have been associated with individuals at the Washington Post. Seeing the latest Post scandal of fees for service in arranging lobbyists meeting politicians, pure prostitution, I would worry about that one. And the communist thing, dad and all. Better bring your lawyer to the swearing in.

 Inductees to U.S. nation-hood were downstairs; relatives and friends were up in the balcony, including CounterPuncher and friend Scott Handleman, attorney at law. I was determined to start out on the right path. What is more American than to have a lawyer nearby?

My own path to citizenship began with a green card in 1973, allowing me to work for the Village Voice in New York and to be a legal resident...

How do guys like this get here in the first place?

The man who helped me get that card was Ed Koch, at that time a supposedly liberal US congressman living, then as now, in Greenwich Village. A few years later, in 1977, he ran for mayor of New York City and I wrote about him harshly. Koch was heavily backed by Rupert Murdoch and the New York Post, running on a law and order platform.

Murdoch's pal Ed Koch got him in? You want to talk about some one who should be deported as an undesirable alien... Murdoch.

Ed was always a petty man, and this trait was well displayed the night he won. A PBS interviewer asked him what his "worst moment" on the race had been and he promptly said in his trade-mark squeaky whine, "the attack by Alexander Cockburn in the Voice... To think I got him his green card!" 

In that race there had been slurs a lot nastier than any I made. If you walked around Queens in that campaign you'd see "Vote for Cuomo, not the homo", scrawled on plenty of walls.

The INS never checked on this guy??

In my Voice column I made fun of a New Yorker writer, a woman dispensing lethal does of tedium on an almost weekly basis. I didn't know that her lover was a New Jersey congressman powerful on the Immigration and Naturalization subcommittee. Within days I was the object of a probe by the INS.

A resident alien perches on a frail branch.  That New Jersey congressman could have pressured the INS to put me on the watch list, meaning the next time I returned to the US I could have found the door slammed in my face.

In the mid 1980s a nutball colonel called Oliver North, working in the White House for Ronald Reagan, began to re-activate a national system of prison camps for lefties from a blueprint that had sat in government filing cabinets ever since the Palmer raids in the Red Scare following World War One. Dick Cheney most certainly dusted it off after 2001. On North's plan it was safe to assume, as with Cheney's, that potentially troublesome legal residents would have been locked up, then kicked out...

How Long Does It Take?

How long does it take a mild-mannered, antiwar, black professor of constitutional law, trained as a community organizer on the South Side of Chicago, to become an enthusiastic sponsor of targeted assassinations, "decapitation" strategies and remote-control bombing of mud houses the far end of the globe?

There's nothing surprising here. As far back as President Woodrow Wilson in the early twentieth century, American liberalism has been swift to flex imperial muscle, to whistle up the Marines. High explosive has always been in the hormone shot...

Woodrow Wilson, Virginian, lover of the DW Griffith film "The Clansman," documented racist (his own writings), US Corporate stooge and banking shill... banking shill is back in vogue these days. Read Wilson's 14 point speech for a lesson on US Rockefeller corporate agenda disguised as high ideals... a hallmark of Wilson speeches.

Thin Ice From Here to the Horizon

On any rational assessment the popular new president is skating on thin ice. Pollyanna bulletins about the economy puff up from the White House and Federal Reserve, like auguries of a new Pope through the  Vatican chimney. "Habemus spem." We have hope.

We've just heard it from President Obama: "We are starting to see glimmers of hope across the economy." From Fed Chairman Ben Bernanke, who's so far unleashed $12 trillion in booster money, we get the always sinister reassurance, like Death giving the Appointee in Samarra a friendly tap on the shoulder, "the foundations of our economy are strong".

 Ouch.

Harlots High and Low: a Foul Saga in the History of Network TV

And then... a miracle! A very American kind of miracle to be sure, being the sort of miracle achieved by the usual megatonnage of campaign contributions from the drug industry dropped into the pockets of the relevant FDA overseers in Congress in Clinton's slush-sodden second term, plus direct lobbying of the FDA by media companies such as Time-Warner. The miracle went by the name of DTC: Direct to the Consumer Advertising.

Broadcast advertising of prescription drugs in the U.S. had actually been legal for years, but in 1997 the FDA "clarified" the rules about alerting consumers to any risks in a number of deft ways that suddenly made the game a whole lot easier for the drug companies. Thirty-five years after Congress moved to curb pharmaceutical company advertising of amphetamine antidepressants and barbiturates, the floodgates were opened once again. Through them poured the drug companies and their advertising dollars...

Back at the start of the 1990s the drug companies were spending $55 million on DTC ads. By 2003 the outlay had soared to $3 billion, and by 2005 to $7.5 billion. DTC sales-pitching of prescription drugs has been a huge boon to the networks, whose revenues from this source have surged since 1997. 2005 saw NBC, ABC and CBS pull in $1.4 billion in prescription drug advertising...

For the drug lords in the big pharmaceutical companies - America's most profitable industry - the FDA's 1997 decision has indeed been a license to print money, bales of it.

Back to our "Media as Whores" theme.

On any given day, CounterPunch can have a dozen or more articles and essays from gifted writers in many fields. Mr. Cockburn leads the Friday edition with one of his pieces. You will find some extremely interesting and thought provoking analysis.

This is why we like Mr. Cockburn. I guess Nixon was just too busy with other problems in 1973 to keep this subversive radical out of the country.

Back to math..

 

Note: Sorry I had to repost this... my learning is often steep...

This is why we like Bill the Brain at Calculated Risk.

Bill writes excellent analysis on economic issues and trends in general, mortgages, foreclosures in particular with great clarity. Now that I praised Bill's clarity, under the odd title "Another Involuntary Landlord and Summary"...Bill covers unemployment with his usual insight and links to his previous top notch posts on the subject.

Another Involuntary Landlord and Summary

Known for is ironic wit, the picture of the "Another Involuntary Landlord" with for lease sign in front is? Click on his photo and read the plaque:

The National Association of Homebuilders, National Housing Center in Washington DC.

But I thought sentiment among homebuilders was up on increasing month over month new home sales??

As Bill has taught me... Real Estate is cyclical on an annual basis. Sales always go up in April through August. People always try to buy and get moved in before school starts for their kids and/or the holiday season. These trends have repeated in the US, year after year, decade after decade. Believe the trend line.

Never pay attention to month over month, always pay attention to year over year... this month last year. Month over month is used to mislead... like the National Association of Realtors and Homebuilders.

Bill on unemployment:

 

Courtesy Calculated Risk

Unknown to the American public, historical perspective is important because so much of what happens today, is path dependent on past political and economic decisions. Path Dependency is real. We will look at good ol' Glass-Steagall here shortly...

I think it was Gore Vidal who coined the phrase "Citizens of the United States of Amnesia" for their unfailing lack of forgetting what happened yesterday. Those who defraud the American public count on that.

In one of the links below the chart, Bill gives a good break down on how unemployment is spread among different industries in the US economy:

Unemployment: Stress Test Scenarios, Diffusion Index, Weekly Claims

Here is a look at how "widespread" the job losses are using the employment diffusion index from the BLS...

Before September, the all industries employment diffusion index was close to 40, suggesting that job losses were limited to a few industries. However starting in September the diffusion index plummeted. In December, the index hit 20.5, suggesting job losses were very widespread. The index has recovered since then, but declined slightly in June to 28.6, suggesting job losses are still widespread.

However job losses have really picked up over the last 9 months (4.4 million jobs lost, red line cliff diving on the graph), and the current recession is now the 2nd worst recession since WWII in percentage terms - and also in terms of the unemployment rate (only early '80s recession was worse).

On unemployment insurance: Notice a nice chart showing both initial and continuing unemployment insurance claims since 1971.

Employment-Population Ratio, Part Time Workers, Hours Worked

In this post, Bill analyzes hours worked and those forced to work part time, either because they are full time employees who have been cut  to part time or were hired part time because that was all that was available. Why should part time workers be an issue in the unemployment numbers? Have you ever tried paying your rent or more importantly in this foreclosure environment, your mortgage with part time wages? Part time employment might just affect economic conditions after all...

So why exclude part time from the U3 unemployment numbers? Why exclude people who have run out of unemployment insurance? Why invent job creation (Birth/Death Ratio) that your payroll data and 60k a month household survey has allegedly missed? Add 1.3 million jobs in a single year (Bush Jr. 2007) ?

Two great charts:

Part Time Unemployment: 

Employment-Population Ratio

 

The general upward trend from the early '60s was mostly due to women entering the workforce. As an example, in 1964 women were about 32% of the workforce, today the percentage is close to 50%.

This measure is at the lowest level since the early '80s and shows the weak recovery following the 2001 recession - and the current cliff diving!

Part Time for Economic Reasons (sometimes referred to as involuntary part-time workers)

Not only has the unemployment rate risen sharply to 9.5%, but the number of workers only able to find part time jobs (or have had their hours cut for economic reasons) is at 9.0 million.

You can find analysis on increasing year over year personal bankruptcies in June, up 40%...

 Then move on to "Naught for the Naughts" Just an observation ..."

 Naught for the Naughts?

This is a nice little comparison. This guy has an eye for data and what to do with it. There is a lot of data out there. The whole thing about statistics is what method you use to analyze it based on the parameters and are you correctly taking into account outlier data... What you use and what you do with it. Mr. Bill has a keen mind for both... and is it relevant.

On the '00s (the "Naughts") ...

Employment Dec 1999: 130.53 million

Employment Jun 2009: 131.69 million

A gain of just 1.16 million. What are the odds that the economy loses another 1.16 million jobs over the next 6 months? Pretty high. That would mean no net jobs added to the economy for the naughts:

Naught for the Naughts!

Mr. Bill on education: Really his blog is to inform the public on economic issues. In that regard if you click:

The Compleat UberNerd

You will find some very informative subject postings by his former writing partner. 

From December 2006, until she passed away from ovarian cancer on Nov 30, 2008, Tanta was my co-blogger. Tanta worked as a mortgage banker for 20 years, and we started chatting in early 2005 about the housing bubble and the changes in lending practices.

 In Memoriam: Doris "Tanta" Dungey

The UberNerd Collection:

Mortgage Servicing

Negative Amortization

Private Mortgage Insurance I

Private Mortgage Insurance II

Foreclosure and REO

MBS I

MBS II

MBS III

Delinquency and Default

Reverse Mortgages

Leverage, Ratings, and Forced Unwind

Mortgage Origination Channels

These are all worth taking the time to read to better understand this "once in century" economic calamity that no one could see coming... fraudsters never want to see a good thing coming, huh Wall Street?

For a little foreclosure lunacy and sarcastic comments with facts and figures, click on "Jim The Realtor" on the right margin.

Note: Jim's link seems to move. The Calculated Risk list of Jim's postings:

Calculated Risk list of Jim the Realtor videos

Jim works in San Diego handling a lot of banked owned foreclosures. While Jim video tapes, he gives a run down on the property, the facts, figures and assessment of what is going on. His commentary is both hilarious and truly astounding. He critiques banks that are too cheap to paint or repair foreclosures so they can sell, to the original purchase prices, how may refinances and how each particular foreclosure ended up where it did.

His latest video documents a rash of foreclosures and NOD's on upper end homes in the over $1 million price range.

 Jim TV SD Pre-Foreclosure Tour

If you watch the series of Jim's videos as a whole they are quite educational. From the low end and investor rental end of the market, to the upper end 4k square footers and unscrupulous new home development deals... with brand new houses foreclosing less than a year after they sold... it gives you a whole new perspective on the foreclosure problem, the lack of regulation at all levels and top down securitization greed from Wall Street that got us into this fine mess.

All of Jim's videos:

Jim the Realtor

Got to love Jim the Realtor... and Bill the Brain at Calculated Risk.

Back to math...

 

 

Paul Farrell at Market Watch gives us some summer school in macroeconomic policy theory:

"BS-1. Don't give the recovery to the same idiots who created the mess"

From Mr. Farrell's piece:

'Pretty Boy' Paulson and the Goldman Gang Commentary: 'Public Enemies' run, not rob, our banks today

http://www.marketwatch.com/story/public-enemies-run-not-rob-our-banks?ref=patrick.net

ARROYO GRANDE, Calif. (MarketWatch) -- Yes, two Great Depressions linked in a mysterious time-warp: Bank robbers and robber banks. Back in the dark days of the first Great Depression John Dillinger was admired, a dapper Robin Hood. Banks were the real villains.

With any good lecturer, start with the context. Historical and economic path dependency help:

Modern Dillingers own the banks, and government

How bad is it? Real bad: Remember former SEC chairman Arthur Levitt, who stood up for the little guy in the '90s? The guy who once attacked banks with this comment: "America's investors have been ripped off as massively as a bank being held up by a guy with a gun and a mask.

"Well, he's inside too, just hired as a "policy adviser" by Wall Street's Goldman Gang, just weeks after Goldman hired away the top staffer on the U.S. House Financial Services Committee. The pattern's obvious: Wall Street's arming itself with vast lobbying firepower to kill off much of the proposed regulations, just as they did during the Enron and mutual fund scandals reform movement earlier this decade.

And that, my dear friends, is why today's Wall Street conspiracy of banks and lobbyists, their well-paid pals in Congress and throughout the federal bureaucracies and regulators, plus their Trojan Horses in the White House, will continue driving America straight into the third meltdown Robert Shiller warns about: Our "vulnerability to bubble thinking is greater than it's ever been ... We recently lived through two epidemics of excessive financial optimism ... the dot-com and the subprime ... we are close to a third episode."

A little humor to hold our attention:

Because today's new Dillingers are inside the system, officers and bureaucrats running the banks, regulators, monetary system, government. The usual suspects: "Pretty Boy" Paulson and his Goldman Gang, "Helicopter Machine Gunner" Bernanke, "Bonny" Dodd and "Clyde" Geithner.

I always liked my Economic Three Stooges analogy:

Moe: Larry Summers, clearly the leader, mean streak, vindictive, always looking for an angle to get the other stooges to do the work. Will take a hammer to Curly's skull (see Bernanke) and pull Larry's protruding hair why yelling "Come here, porcupine!" (see Geithner).

Larry: Turbo Timmy Geithner, clearly not the leader, clearly not the sharpest of the group, but follows orders to the best of his stooge like ability. Plus Timmy has the Larry porcupine. Notice Timmy keeps it trimmed so Moe... I mean Larry can't get a painful handful.

Curly: Helicopter Ben Bernanke, baldy head says it all. Curly the tragic figure and most loved of the stooges.

Shemp: Christina Romer, look at the hair cut. That's a Shemp.

Obama: Ted Healy, now a lot of people think Obama IS one of the economic stooges. Obama is the Ted Healy. He found the stooges, he brought them to the public, he promoted them and he appears in a couple of their shorts. Short films, not shorts. Ted Healy towers over the stooges physically, and though the straight man, can slap the three of them around at will.

Mr. Farrell then builds us a list of lists:

So Wall Street will surrender nothing, and, therefore, every one of Taleb's 10 Black Swans remains intact, a time bomb, a disaster waiting to happen. Here's why:

BS-1. Don't give the recovery to the same idiots who created the mess

Taleb was more colorful: "People who were driving a school bus blindfolded (and crashed it), should never be given a new bus." There were so many drivers it is "irresponsible and foolish to put our trust in the ability of such experts to get us out of this mess." But we have. And they will fail to create a "Black Swan-proof world."

BS-2. Nothing should ever become too big to fail

Get rid of losers early, while small, warns Taleb. Unfortunately, bankers are so greedy they're already spending millions on lobbyists and political donations to do just the opposite. They love "big." So count on endless loopholes undermining new regulations.

BS-3. Stop socialization of losses and privatization of gains

Taleb warns: We've "managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the U.S. in the 2000s, the banks took over the government." Only a naive idealist would expect them to surrender this Black Swan: After the next crash Wall Street will dump their losses on taxpayers (again).

BS-4. Incentive bonuses are increasing America's financial risks

You wouldn't give incentives to the manager of a nuclear plant, says Taleb. Incentives risk financial safety. "Bonuses do not accommodate the hidden risks of blow-ups. It is the asymmetry of the bonus system that got us here. No incentives without disincentives: capitalism is about rewards and punishments, not just rewards." Sadly, Wall Street greed demands huge bonuses. So no changes: This Black Swan also remains as a WMD.

BS-5. High-leveraged debt increases the danger of a massive meltdown

While past equity bubbles were "mild," future "debt bubbles are vicious." Add highly leveraged debt, as we're doing now with bailouts and stimulus spending, and you get "wild and dangerous gyrations and leaves no room for error." But the Gang can't see it.

BS-6. No more derivatives ... nobody understands these WMDs

Taleb warns: "Do not give children sticks of dynamite, even if they come with a warning. ... Derivatives need to be banned because nobody understands them and few are rational enough to know it. Citizens must be protected from themselves, from bankers selling them 'hedging' products, and from gullible regulators who listen to economic theorists."

Me: Yeah I like this one:

BS-7. 'Restoring confidence' is for Ponzis, politicians and economists

Rumors are part of life, "governments cannot stop the rumors." If you hear rhetoric about "restoring confidence" from politicians or economists, they're hiding something.

BS-8. Do not give an addict more drugs if he has withdrawal pains

What a great metaphor: "Using leverage to cure the problems of too much leverage is not homeopathy, it is denial. The debt crisis is not a temporary problem, it is a structural one. We need rehab." And yet, Obama's new bank regulatory reform package gives Wall Street access to an endless supply of their favorite drugs: derivatives, debt and bonuses.

Me: Painful condemnation here for the Privatize Social Security crowd:

BS-9. Never count on Wall Street advice or management for retirement

Wall Street hates Taleb for saying this: Markets are not "storehouses of value," they lack "the certainties that normal citizens require." But this Black Swan is Wall Street's "cash cow." They make hundreds of billions delivering advice and skimming money under the guise of managing our assets. They'll never give up this opportunity to steal our money.

Me: Can a brother get some Glass Steagall up in here:

BS-10. Let entrepreneurs, not bankers, take risks and run America

 Taleb the idealist: "Finally, this crisis cannot be fixed with makeshift repairs, no more than a boat with a rotten hull can be fixed with ad-hoc patches. We need to rebuild the hull with new (stronger) materials." Before Obama's reforms Taleb offered his own: We must help "what needs to be broken break on its own, converting debt into equity, marginalizing the economics and business school establishments, shutting down the 'Nobel' in economics, banning leveraged buyouts, putting bankers where they belong, clawing back the bonuses of those who got us here, and teaching people to navigate a world with fewer certainties."

I think Mr. Farrell's list about sums it up. Take us home Mr. Farrell:

Remember Taleb's 10 Black Swans, because any one could trigger a disaster. Yet sadly and unfortunately, we already know Wall Street refuses to rebuild its rotting hull. Wall Street hates change. And is now, like the Titanic before it, on a collision course that will sink the good ship, the USS Utopia and its cargo of 10 beautiful black swans, steaming into the great fog banks hiding a massive iceberg ... the Great Depression 2.

Double ouch. And this is why Wall Street and the Financial industry have bought your politician with a record $400 million in campaign bribes... I mean contributions in the last 4 years. As Wall Street knows money talks... and the American public can walk.

Back to math...

This is why we like Ilargi and Stoneleigh at the Automatic Earth:

"Ilargi: When the New York Times starts publishing articles on how bad the financial crisis really is, despite all the green recovery shooting stories sprouting from government circles and media such as, among others, the New York Times, I'm going to have to guess that it's official now."

 June 27, 2009: Is That the Sound of a Baton Dropping?

 http://theautomaticearth.blogspot.com/2009/06/june-27-2009-is-that-sound-of-baton.html

Ilargi is commenting on two NY Times financial reporters, Floyd Norris and Bob Herbert. Herbert's op-ed "No Recovery in Sight" and Norris' article "Off the Charts: A Recession Measured by New-Home Sales" both appeared in June 26, 2009 in the NY Times online:

 Watch out for the pop ad... it's annoying:

http://www.nytimes.com/2009/06/27/opinion/27herbert.html?_r=2

http://www.nytimes.com/2009/06/27/business/economy/27charts.html

Let us let Ilargi, a person with a written history of clarity summarize this:

"Can the editorial staff wash their hands clean of revered writers like Floyd Norris and Bob Herbert? Or should we perhaps look at this from another angle? Is the Times changing its stance on the entire Obama government politics? Is it going to give up the noble art of cheerleading? Is that the sound of a baton dropping?

Herbert's piece is entitled: "No Recovery in Sight". Some quotes:

• There are now more than five unemployed workers for every job opening in the United States.
• Economists are currently spreading the word that the recession may end sometime this year, but the unemployment rate will continue to climb. That's not a recovery. That's mumbo jumbo.
• There were roughly seven million people officially counted as unemployed in November 2007, a month before the recession began. Now there are about 14 million.
• By May 2009, [..] the total number of underutilized workers had increased dramatically from 15.63 million to 29.37 million -- a rise of 13.7 million, or 88 percent. Nearly 30 million working-age individuals were underutilized in May 2009, the largest number in our nation's history".
• Three-quarters of the workers let go over the past year were permanently displaced, as opposed to temporarily laid off. They won't be going back to their jobs when economic conditions improve."

Me: Yeah, the problem with the BLS U3 unemployment measurement which is well addressed at John Williams' Shadow Government Statistics:

http://www.shadowstats.com/alternate_data

... and we shall take some time in the future to document changes (manipulations) in the measure of unemployment and statistical tampering in the future...

Back to Ilargi:

"Those are serious points, and there's nothing green about them. They're also bordering on a direct attack on everything rosy that Obama and his administration have been claiming lately. They fall about 0.0001% short of painting the president as a liar."

Me: No mincing words or analysis with Mr. Ilargi...

"Floyd Norris's "A Recession Measured by New-Home Sales", also in today's edition of the Times, has this:

• There have been bad housing markets before, but never in post-World War II history has the market for new homes suffered as badly as it has in this decline...

(There is more, here)...

• Of the 135,000 completed but unsold new homes at the end of May, nearly half had been sitting for a year or more. The median age of such homes was 11.5 months, an unprecedented figure."
  

Me: Ilargi's punch line:

"For those among you who read websites like The Automatic Earth, there is nothing here that wasn't already known and obvious. The same is not true for the average reader of the New York Times. And that, when you come to think of it, is completely insane. After all, why do people read a paper? To find out what's going on, or to see confirmed that la-la land still exists?

These numbers don't suddenly come falling out of the sky in broad daylight. They merely depict an ongoing trend that is worsening fast. That last part is temporarily hidden behind a $13.8 trillion veil, but all that has achieved is for the worsening trendlines not to hit exponential territory. It hasn't stopped the numbers themselves from deteriorating."

Me: This is true. The numbers are posted and analyzed by numerous individuals, all smarter in their fields, with more time, financial experience and writing talent than I will ever posses, Yves Smith at Naked Capitalism, Tyler Durden at Zero Hedge, Karl Denninger at The Market Ticker, Bill the Brain at Calculated Risk...

Back to Ilargi:

"And it should be clear that the next $13.8 trillion will be much harder to find. And that it won't be able to stop the deterioration either. It will at best halt the plunge in mid-air for another painfully expensive fleeting moment in time.

People have a right to know what's truly going on in their societies, rather than fall prey to the interests of politicians and financiers that are better served by hiding what's real. The situation is about to get a whole lot worse, and people deserve the right to make preparations for that as best they see fit."

Me: See this story about Congress members on the House Financial Services Committee make stock trades on banks beneficial to themselves in he midst of negotiating bailout to those very same banks:

From the Cleveland Plain Dealer:

Members of U.S. House Financial Services Committee snapped up or dumped bank stocks as bottom fell out of market

http://blog.cleveland.com/metro/2009/06/members_of_us_house_financial.html

Back to Ilargi:

"The ongoing refusal to inform them of what's real and what is not, perpetrated by governments, media and industry, is a disgrace. It's not how a civilized society treats its citizens. Perhaps the New York Times today put a first step on the path to doing what needs to be done. Not that I'm not skeptical about it."

Me: Ouch...

Can it be that Obama head economic stooge Larry "the Moe" Summers is running out of "Green Shoot Lime" Obama Kool-Aid? Was it not just last week that Moe and Larry (Summers and Geithner) were op-ed opining in the Washington Post? Spent a lot of Kool-Aid on that one, boys?

Ilargi and Stoneleigh

Ilargi and Stoneleigh are realists. Formerly of  "The Oil Drum", Ilargi cuts through rhetoric daily while his writing partner Stoneleigh posts to the Daily Kos on occasion:

http://stoneleigh.dailykos.com/

Both are always worth reading... Ilargi's early 20th century photos heading the blog appear to be from the Library of Congress. Those history buffs out there will enjoy the photo slice of Americana. Those resource economics officinatos will enjoy Ilgari's view that growth is not exponential and unlimited. It performs more like Logistical Growth... you know, every environment has a carry capacity that can not be exceeded?

It has often been my humble view that economists fail to follow their own rules.... like the Law of Diminishing Returns. But then again I wonder about calling a social study a social "science" when it takes 24 feet of black board to write a mathematical formula to describe an economic principal.

Diminishing returns apply to more than the typical first microeconomic course treatment. Imagine Ben Stein of the Ferris Bueller era... a farmer plants an acre of corn. Plants his best acre, uses his best seed, puts in his best effort and gets X amount of corn. So he plants a second acre expecting 2X corn but the second acre produces less than X...

Why? He planted his second best acre, with the next best available seed and now had to expend the effort on two acres instead of one.... Hence, diminishing marginal return for every additional unit of resource employed. But debt and interest can grow exponentially for ever with out bound? Economies can continue to grow at 3-5% on every economic forecast from the late 20th century until... well ... post September 2008, with out bound?

One of my few dumb jokes I lifted from some source somewhere:

"The purpose of economic forecasting is to make astrology look good." Anonymous.

I will try to find the real author for credit...

It just doesn't apply to acres of corn or industrial production either. Think about it.

• We pay more and more money into education and get less out of every additional dollar we pour in.

• We pour more and more money into health care and get less out of every additional dollar we pour in.

 • We pour more and more money into the military and get less out of every additional dollar we pour in.

• We pour more and more money into law enforcement and get less out of every additional dollar we pour in.

 • We pour more and more money into financial regulation and get less out of every additional dollar we pour in.

 • We pour more and more money into the government in general and get less out of every additional dollar we pour in.

This my friends, is the Law of Diminishing returns. Are diminishing returns related to the complexity level a society is limited to? Is a society's complexity limited by its technology?

As Stoneleigh pointed out in "40 Ways to Lose Your Future,"

http://theautomaticearth.blogspot.com/2009/06/june-17-2009-40-ways-to-lose-your.html

 " Hard limits to capital and energy will greatly reduce socioeconomic complexity (see Tainter)"

Me: Stoneleigh is referring to Dr. Joseph Tainter, anthropologist by degree, archeologist by specialization. Dr. Tainter's book "The Collapse of Complex Societies" is a text book, but affordable, a little dense but very informative.

 http://www.amazon.com/Collapse-Complex-Societies-Studies-Archaeology/dp/052138673X

When Dr. Tainter states collapse, he does not mean collapse like the Roman Empire specifically. Collapse means a reduction in complexity with in the society...

Complexity is measured by the number of defined roles with in the society. Societies run from groups, to clans, to chiefdoms to organized modern societies. What separates us from a tribe or clan is giving up our autonomy to a state or government. i.e. giving a government or state life and death power over us. Like criminal laws, military conscription, execution for desertion, etc. In these circumstances, we have surrendered the power over our own life to the state.

Now count the roles, leader, food gatherer, hunter/self defense member, child. Pretty simple.

Now think of all the occupations and roles in current US society, from Wall Street scammer... I mean financier, to Congressional Aid, to Principal Accounting Technician, to Program Administrative Analyst IV... well you get the drift. Collapse can mean from some current 20k distinct role society... maybe down to 10k roles. Maybe auto manufacturer and used mortgage salesman and mortgage backed securities analyst fall by the wayside.

Would America be worse off with 1 million less salesman all vying for the zero sum gain of tricking you by hook or by crook to pay more for your mortgage than you otherwise would if the truth be told?

You think that is a false analogy? Guess what?

6 out of 10 Americans did pay too much for mortgages between 2004 and the present than they had to if banks and mortgage brokers had been forced to follow the laws on the books. And we won't even get into Wall Street's role in these top down MBS frauds.

So, to Tainter, collapse means simplification usually due to strategies for energy capture. In agrarian societies, how much energy in acres of food production is required to support all of those who do not raise food to feed themselves, but engage in other roles in society. That is how you measure if a society has a successful strategy for energy capture. Does the society have the ability to feed all the people necessary to run the society at its complexity level that do not produce food and energy for say... heat.

It is viewed as progress that a small percentage of US society is involved in food production and home heating so the rest of us can be involved in more profitable pursuits for ourselves and then benefit our society with further productivity and innovation.

But what if it takes 10 calories of fossil fuels to produce, processes, refrigerate and truck to market one calorie of food?  That is a pretty major net energy negative. As long as there is easy to get cheap oil, then this system is economically feasible. What happens when the cheap, easy, sweet, light crude diminishes and we have to hunt from hear to the arctic looking for easy to refine non sour crude? Can't just pump it out of McCamey Texas anymore.

That is when the energy capture of food by the massive, corporate, industrial, petro chemical industry becomes too difficult and non economically sustaining. Dr. David Goodstein. Professor of Physics at CalTech wrote a very readable brief book on the subject. Physicists tend to study energy and work and all those mind numbing equations.

http://www.its.caltech.edu/~dg/

The Book: "Out of Gas: The End of the Age of Oil"

http://www.amazon.com/gp/product/0393326470

If you prefer videos:

http://video.google.com/videoplay?docid=5763291727572188135

Like I say, the guy studies energy, work and its usage. Goodstein, Tainter, Ilargi and Stoneleigh... what I learned during summer vacation...last year.

Back to math...

 

From Reuters 6/26/09:

"Ruth Madoff forfeits assets, left with $2.5 million"

 http://www.reuters.com/article/domesticNews/idUSTRE55Q0BF20090627

 WHAT???

"Court documents filed on Friday night showed Ruth Madoff, 68, who has said nothing in public about her husband's crimes in the six months since his arrest, would be left with $2.5 million in cash."

Our DOJ prosecutors are as corrupt and useless as the SEC, our Congress people, Dodd, Shumer et al.?

Now of course Ruth Madoff should receive a fair trial, but she was the bookkeeper for Bernie from the start. There is strong evidence her father was in on the Madoff frauds from way back when.

So what part of her inheritance from her father and "her" money is not traceable right back to Bernie's crimes?

So where are the indictments against the brother, sons, nieces and Ruth?

In a related article it was reported the Madoff's relinquished claims to loans... does that mean the millions "loaned" to Mark, Andrew and Peter for property purchases are not viewed as payola in the scheme?

"The Madoffs will also lose their interest in "tens of millions of dollars" in loans they had made to family, employees and friends."

Read this completely misleading CNN title:

"Madoff reduced to nothing"

http://money.cnn.com/2009/06/26/news/economy/madoff_sentence/?postversion=2009062622

Ruth's $2.5 million ain't nothing you morons at CNN...

Add the useless Corporate News media to the list.

Prosecutors have a lot of explaining to do. Our federal government teeters on the edge of both financial and moral/legal bankruptcy.

20 years ago, within a year of Michael Milken's junk bond fraud implosion, he faced a 98 count felony indictment.

Wall St. has perpetrated fraud on an exponentially larger scale and we see NO INDICTMENTS of the MBS junk bond crowd. Not one. In fact the opposite. Wall Street received the greatest asset shift from the US tax payer in human history as a reward for their crimes courtesy of our elected representatives.

Can any one say "Regulatory Capture" ?

These issues are not unrelated. It has taken the Fed 20 years to become completely corrupt and ineffective in law enforcement against the "HAVES" as opposed to the have nots... yet we the latter pick up the tab.