December 15, 2013

Bits Bucket for December 15, 2013

Post off-topic ideas, links, and Craigslist finds here.

RSS feed


Comment by goon squad
2013-12-15 05:36:28

Realtors are liars.

Comment by Mr. Banker
2013-12-15 05:53:54

Realtors are tools who are used by bankers to scour the countryside for marks and then these tools of bankers spend much of their own time, energy, and money persuading these marks to come to the banks so as to have the marks willingly sign away to the bank tens of thousands of dollars of future income via a mortgage that will most likely span many decades.

God’s Master Plan: Realtors work, bankers reap. Just as it should be.

Comment by Mr. Banker
2013-12-15 06:02:41

In addition to this, these tools of bankers (also known as realtors) spend much of their own time and money and energy convincing marks that any equity they happen to get to enjoy because of a price rise in their house should immediately be cashed-out. This cash-out is done by convincing these stupid marks to extend their financial obligation to the banks.

Once again, the realtors work, the bankers reap.

Comment by Mr. Banker
2013-12-15 06:21:27

What is most interesting, amazing, amusing, as well as lucrative to us bankers is to see a mark of age sixty or maybe even age seventy being brought to the bank by a realtor for an equity cash-out - which boils down to an extension of the terms of the stupid mark’s mortgage obligation just as the stupid mark nears the age of retirement.

Nearing the age of retirement suggests very strongly that future income after retirement will take a dramatic plunge. Interestingly, while income will plunge the mortgage obligation will remain the same, but for some reason or other this rather obvious fact does not seem to enter the stupid mark’s dim consciousness.

(Comments wont nest below this level)
Comment by 2banana
2013-12-15 06:57:49

1. All Real Estate agents work for the seller (unless you have a buyer’s agent UNDER a signed contract).

2. All Real Estate agents get paid more if a house sells for more. Including the Real Estate agent you are working with who you think is on your side.

3. They do not work for you. They hate you if you ask a lot of question or make them work for their commission. They want you to make a deal as fast as possible for the highest price possible. They could care less if the house will fall down the day after the cash their check or you will be bankrupt in 3 months.

ABC - Always be closing.

Comment by Strawberrypicker
2013-12-15 07:08:51

This gives them too much credit. Many are simply clueless. Some, maybe most?, beleive their own koolaid. Believing or thinking otherwise never enters the picture cause that doesn’t get them a check.

Those guys from Glengarry Glenross weren’t typical residential real estate agents.

Comment by Mr. Banker
2013-12-15 07:17:24

1. Ultimately real estate agents work for the lender if there is a mortgage involved.

2. The lender gets paid more in the form of more interest income on the mortgage if the house sells for more.

3. Yes, they do work for you if you are the lender of the money that goes into making the sale.

ABC - Always be closing if you are a tool of the bank,

ABL - Always be lending if you are a using the realtor as a tool.

The realtor closes the deal and gets a one-time nip at the money, the lender sits back and gets some very large and very regular nips at the money for some very, very many years.

Comment by Bill, just South of Irvine
2013-12-15 07:52:47

“they could care less” - why don’t they care less then?

Comment by phony scandals
2013-12-15 06:12:09

South Africa buries ‘greatest son’ Mandela

(No reports of any graveside selfies)

By Ed Cropley

South Africa
Sun Dec 15, 2013 7:06am EST

(Reuters) - South Africa buried Nelson Mandela on Sunday, closing one chapter in its tortured history and opening another in which the multi-racial democracy he founded will have to discover if it can thrive without its central pillar. - -

Comment by 2banana
2013-12-15 08:12:55

Remembering Mandela, without Rose-Colored Glasses
National Review Online | December 14, 2013 | Andrew C. McCarthy

The South African reality differs from the Western lore.

‘Go safely Umkhonto. Umkhonto we Sizwe. We the members of the Umkhonto have pledged ourselves to kill them — kill the whites.” These are lyrics from the anthem of Umkhonto we Sizwe, or “Spear of the Nation.” The organization is better known as the MK, the military wing of the Marxist African National Congress (ANC). The MK was established by its commander, Nelson Mandela, to prosecute a terrorist war against South Africa’s racist apartheid regime.

Mandela had been out of prison for about two years in September 1992 when, fist clenched in the “black power” salute, he was filmed singing the anthem with a number of his comrades. Interestingly, but not ironically, as Mandela and others repeated the refrain about killing Boer farmers, it was a white man who stood next to him, similarly clench-fisted and singing. The man’s name is Ronnie Kasrils. A Soviet-trained terrorist who helped Mandela found the MK, Kasrils was a member of the Central Committee of the South African Communist Party.

So was Mandela. No surprise there: Communism was, and remains, the animating ideology of the ANC. That makes it the enduring tragedy of South Africa.

In South Africa, the fissure to exploit was race — with the added advantage that apartheid was immoral because it rejected the equal human dignity of every citizen. The ANC, however, were no freedom fighters. The armed struggle Mandela led was not to give every South African an equal opportunity to enjoy the fruits of liberty. It was a will-to-power struggle to give the Communists dominion over the country.

As Ron Radosh recounts in the most clear-eyed Mandela remembrance to be found this week, Mandela fully accepted the positions of the South African Communist Party and used its strength to turn the ANC to terrorism. Western journalists want to bleach this history into a noble “people’s war” against an evil, murderous, racist regime. It was hardly that.

The MK led a terrorist insurgency that included bombings of public places. It killed many, many more civilians than it did members of the regime’s security forces — copiously including women and children. Indeed, it killed many more people than the approximately 7,000 black South Africans who, according to the post-apartheid Truth and Reconciliation Commission, were killed by the regime during the 46 years of apartheid. In fact, twice that number, over 14,000 people, were killed between 1990 and 1994 — the period during which the ANC was legalized and black-on-black violence became rampant, just as it is in South Africa today. The ANC systematically killed rivals for power and suspected regime informants — most notoriously, by the savage method of “necklacing,” in which a tire filled with gasoline was hung around the terrified victim’s neck and then set on fire.

As Ron Radosh further recounts, Mandela struck alliances with the world’s worst Communist thugs. A particular favorite was Fidel Castro, the leader of a Cuba that, Mandela brayed, “stands out head and shoulders above the rest . . . in its love for human rights and liberty.” He similarly courted Moammar Qaddafi, Yasser Arafat, and the totalitarian regimes of North Korea and Iran.

He is deservedly lauded for not following the path of Zimbabwe’s monstrous Marxist dictator, Robert Mugabe. Nevertheless, the thunderous ovation Mugabe received upon arriving at the Soweto stadium for Mandela’s memorial service spoke volumes about “democratic” South Africa, and where it is headed.

Defying fears justified by his past, Mandela did not allow South Africa to slide into civil war upon becoming president in 1994. Nor did he immediately fulfill the revolutionary hopes of his fellow Communists. Nevertheless, as the South African journalist Ilana Mercer recounts in Into the Cannibal’s Pot, a searing if depressing account of her country post-apartheid, approximately 300,000 South Africans have been murdered since the day, almost 20 years ago, that Mandela took office.

Under one-party leftist domination since 1994, South Africa has become a Third World basket case. It vies with Iraq and Colombia to be the world’s most violent country. In a country of 43 million, the official estimate of 60 annual murders per every 100,000 people (compared to six in the U.S. and fewer than two in the EU), is a gross understatement: Interpol pegs it at nearly twice that amount, for a staggering 54,000 homicides per annum. Rape is so commonplace it is estimated that one occurs every seven minutes (with one report putting it at one every 26 seconds). Most of the crime is black-on-black, but it is open season on whites — especially white land owners — as one would expect in a place where ditties like the one Mandela was filmed singing in 1992 remain immensely popular. A million white South Africans have fled the country.

Comment by NH Hick
2013-12-15 10:48:03

I’m glad to see someone putting out the facts about this guy, instead of the crap on the MSM.

Comment by NH Hick
2013-12-15 10:49:17

I haven’t heard one word about the “Winnie Necklaces”.

(Comments wont nest below this level)
Comment by Mr. Banker
2013-12-15 10:55:41

“Winnie Necklaces”

Supposidly Bridgstones work best. Then comes Goodyear.

These facts may become useful for someone who is interested in making a tire commercial.

Comment by NH Hick
2013-12-15 11:32:21

I prefer Maypops. Maypop now, maypop later!

Comment by Ben Jones
2013-12-15 12:16:19

‘the “Winnie Necklaces”

In the 80’s I saw some photos of ‘necklacing’. From what I’ve read, there was never a white person necklaced. It was always done publicly, so as to terrify the local black population.

Comment by rms
2013-12-15 15:04:29

“I’m glad to see someone putting out the facts about this guy, instead of the crap on the MSM.”

+1 I was reminded of Israel’s Menachem Begin, a “hands-on” killer, as I read this Mandela piece. Disgusting.

(Comments wont nest below this level)
Comment by Bill, just South of Irvine
2013-12-15 11:25:33

It is racis to say such things about Mandela

Comment by phony scandals
2013-12-15 06:38:38

Obamacare exchange ‘mistakenly debting bank accounts’

KING 5 News
December 15, 2013

For the second week in a row, the Washington Healthplanfinder website is down, and it’s causing problems for people who are dealing with billing issues. Some of them say the website is mistakenly debiting their accounts.

Shannon Bruner of Indianola logged on to her checking account Monday morning, and found she was almost 800 dollars in the negative.

“The first thing I thought was, ‘I got screwed,’” she said.

Full article here

This article was posted: Sunday, December 15, 2013 at 3:20 am

Comment by 2banana
2013-12-15 07:40:20

Bigger and bigger government will solve all problems…

If it doesn’t work - we just need more government.

Comment by 2banana
2013-12-15 07:53:05

If You Like Your Checking Account, You Can Keep Your Checking Account

Comment by AbsoluteBeginner
2013-12-15 11:53:07

‘If You Like Your Checking Account, You Can Keep Your Checking Account’

As long as it meets the minimum balance.

Comment by Bill, just South of Irvine
2013-12-15 11:37:16

The thugernment has the ability to grab any amount they choose from any of your electronic assets as fast as light. They have all our account numbers by law. 1099 forms.

If you decide to hoard cash for twenty years the solution is to issue new currency often and make banks refuse to accept currency older than ten years.

If you instead accumulate tangibles people could use…parts for Honda Accords and Toyota Camrys and Fords, quality liquor, handguns, ammo, silver bullion, you have a better chance at keeping a good chunk of assets.

Comment by AbsoluteBeginner
2013-12-15 12:52:25

Bill, it has been a conjecture I read that if the government really, really wanted to stamp out the drug trade, they would make a go of re-issuing the currency. Yeah, maybe egg on our face in some ways, but heck, an iron-fisted government action like that could leave marks on a few that missed the lowering tide, those that could not launder fast enough.

Wonder why they don’t do it Bill. I mean, money printing costs and managerial stuff and all that logistics stuff, the ACA could be a primer for that action. What is the government afraid of? Why doesn’t anyone make an argument for re-issuing the currency? They made darn sure we got our blackbox converters when TV went digital and they certainly crammed the ACA on us. What is the hold up on forcing the drug dealers hands? Could banks somehow get caught in a bind of unexpected redactions?

Comment by Bill, just South of Irvine
2013-12-15 15:13:58

AB, the banks started giving out the new blue $100s a month or so ago. I asked the teller what they do with the old ones. They return them to the government, which burns the old ones. So this also discourages hoarding cash.

(Comments wont nest below this level)
Comment by AbsoluteBeginner
2013-12-15 17:40:01

‘So this also discourages hoarding cash.’

How? The non-latest $100 bills are still legal or are they gonna be made defunct?

Comment by Bill, just South of Irvine, CA
2013-12-15 18:56:39

I’ll put it this way: Would you think any merchant accepts a $100 bill with a 1965 year on it? Or would you think they would give you some grief? It would definitely look old. If it looks very old to you, would you consider it worthwhile spending? Or keeping?

Comment by Mr. Banker
2013-12-15 06:55:28

Anyone here ever notice how many people - as in thousands of them - quit their good-paying jobs a few years back so as to get immediately rich by becoming realtors?

Yes? You do remember?

Now, how many of you remember the thousands of people a few years back that quit their good-paying jobs so as to become bankers? You don’t remember that, do you? Well, that’s because it did not happen.

The REAL MONEY is to be made in the long-term commitment of a mortgage obligation, not in the one-time fee of making the sale. But the stupid folks who quit their good-paying jobs some years back so as to hustle up sales as realtors - as tools of the banks - did not know that then. But, now they do.

Comment by AbsoluteBeginner
2013-12-15 07:45:43

Every time I walk into a bank, I think, which one of these suits has my best interests in mind?

Comment by Mr. Banker
2013-12-15 07:51:53

All the suits that work in a bank have your best interests in mind.

If you can’t trust a banker then just who can you trust?

Comment by Strawberrypicker
2013-12-15 07:58:05

The people in the banks you can walk into aren’t the ones you need to worry about.

Comment by Mr. Banker
2013-12-15 08:02:05

Bingo! They are tools just as realtors are tools.

(Comments wont nest below this level)
Comment by Mr. Banker
2013-12-15 08:56:39

I especially like it when a totally stupid policy I dream up and force to be implemented by my low-paid employees - my tools - blows up and then these same low-paid tools are the ones that have to endure the customer’s rage.

My low-paid tools endure the customer’s rage while I get to go out into the sunshine and play golf.

Life is good.

Comment by phony scandals
2013-12-15 06:59:50

Trans-Pacific Partnership (TPP): Bigger and More Dangerous Than ObamaCare (Video)

Written by William F. Jasper
Saturday, 14 December 2013 14:45

We all remember Representative Nancy Pelosi’s infamous statement that we have to pass the ObamaCare legislation so that we can find out what’s in it. That was in 2010 and Mrs. Pelosi was then speaker of the House of Representatives.

Well, Congress followed her advice and passed ObamaCare, formally known as the Patient Protection and Affordable Care Act. Three years later, in October of 2013, tens of millions of Americans began finding out what was really in the bill, as they began receiving health insurance cancellations and/or massive premium hikes. They also began to learn that under ObamaCare the IRS has been given new powers to go after them, their businesses, and their bank accounts. And that is only the beginning. As with all legislation, the devil is in the details, and lots of devils keep popping out of the constantly evolving details, as dozens of federal agencies continue churning out thousands of pages of regulations to implement the misbegotten, misnamed Affordable Care Act.

There are many important lessons from ObamaCare that we should apply to another huge project that could have a similarly devastating impact on our nation. In November 2009, President Obama announced his intention to have the United States participate in a so-called trade agreement known as the Trans-Pacific Partnership. I say so-called trade agreement because 80 percent of the proposed agreement deals with a great many issues besides trade.

The Trans-Pacific Partnership, or TPP, as it is called, is an all-out assault on our national sovereignty. It would unconstitutionally transfer legislative powers from the U.S. Congress, our state legislatures, and our city and county governments to multi-national corporations and unaccountable international bureaucrats at the World Trade Organization, or WTO. Incredibly, it also would transfer judicial powers from our federal and state courts — which are bad enough — to globalist TPP judges at regional tribunals and the WTO. It would also confer huge advantages on foreign businesses and large multinationals, while at the same time putting companies that operate here in America — especially small and medium-sized enterprises — at a competitive disadvantage. American businesses would remain shackled by the regulations of EPA, FDA, OSHA, etc. while their foreign competitors could operate here unimpeded by those same strictures.

Like the infamous NAFTA trade agreement passed in the ’90s, the TPP would usher in another wave of outsourcing, as the remaining manufacturing and technology bases would be given incentives to move to Pacific Rim countries, resulting in millions more American job losses.

With TPP negotiations on track to be completed by the end of 2013, President Obama will likely ask Congress to approve this trade agreement in early 2014. Contact your senators and representative and urge them to oppose the Trans-Pacific Partnership, and see the many additional articles listed below the video that we’ve published detailing the dangers of the TPP. - -

Comment by jose canusi
2013-12-15 07:40:29

Thanks for the info on this. I will definitely contact my senators and rep and urge them to oppose.

I’ve had it up to here with globalization. It’s really the pits.

And I’m sick of being sh^t on by the occupation government. They’re at war with us, make no mistake about it.

Comment by Bill, just South of Irvine
2013-12-15 07:57:19

Hell i would not recognize any thugernment as having authority over me, let alone our own. I started not liking the concept of Star Trek’s “Federation of Planets” concept long ago.

Read alysander Spooner’s “No Treason: The Constitution of No Authority,” and you will be convinced.

Comment by Bill, just South of Irvine
2013-12-15 07:59:15

That’s Lysander Spooner.

Comment by Janet Felon
2013-12-15 18:12:17

Such brazen talk from a person who has been afforded the opportunity to succeed financially through the protections the government and its military have provided.

Comment by Bill, just South of Irvine, CA
2013-12-15 18:52:16

I did not ask for any protection racket.

(Comments wont nest below this level)
Comment by Bill, just South of Irvine, CA
2013-12-15 19:21:09

You call 3,000 American lives lost in 2001 “protected?” I call them the sacrificial animals the government used to get rid of more of our freedoms and institute the draconian “Patriot Act,” which made many ordinary nonviolent people criminals overnight. Not coicidentally, minor federal bureacuratic agencies have had paramilitary outfits.

You call this protection. I don’t. You call them public servants. They aren’t.

(Comments wont nest below this level)
Comment by Ben Jones
2013-12-15 19:25:47

“After the 9/11 attacks, the public was told al Qaeda acted alone, with no state sponsors.

But the White House never let it see an entire section of Congress’ investigative report on 9/11 dealing with “specific sources of foreign support” for the 19 hijackers, 15 of whom were Saudi nationals.

It was kept secret and remains so today.

President Bush inexplicably censored 28 full pages of the 800-page report. Text isn’t just blacked-out here and there in this critical-yet-missing middle section. The pages are completely blank, except for dotted lines where an estimated 7,200 words once stood (this story by comparison is about 1,000 words).

A pair of lawmakers who recently read the redacted portion say they are “absolutely shocked” at the level of foreign state involvement in the attacks.

Reps. Walter Jones (R-NC) and Stephen Lynch (D-Mass.) can’t reveal the nation identified by it without violating federal law. So they’ve proposed Congress pass a resolution asking President Obama to declassify the entire 2002 report, “Joint Inquiry Into Intelligence Community Activities Before and After the Terrorist Attacks of September 11, 2001.”

Some information already has leaked from the classified section, which is based on both CIA and FBI documents, and it points back to Saudi Arabia, a presumed ally.

The Saudis deny any role in 9/11, but the CIA in one memo reportedly found “incontrovertible evidence” that Saudi government officials — not just wealthy Saudi hardliners, but high-level diplomats and intelligence officers employed by the kingdom — helped the hijackers both financially and logistically. The intelligence files cited in the report directly implicate the Saudi embassy in Washington and consulate in Los Angeles in the attacks, making 9/11 not just an act of terrorism, but an act of war.”

Comment by Bill, just South of Irvine, CA
2013-12-15 19:39:17

So this protection racket that did not protect us did not declare war on Saudi Arabia for sponsoring the terror and instead went to Afghanistan and Iraq. Again I feel so safe by a government that failed to do its duty and declare war against Saudi Arabia. I feel so safe by having far more draconian laws. I also believe in candy crapping unicorns.

Comment by Bill, just South of Irvine, CA
2013-12-15 19:42:28

It still plays into the hands of statism, the government getting bigger and bigger. Coverup or not. They count on gullible types (or trolls) such as Janet Felon to ask for more security in exchange for less freedom.

Comment by United States of Crooked Politicians and Bankers
2013-12-15 21:11:46

Pick a better country, then. We need to do better, yes, but where is the better alternative? We are broken, but we are fixable. Things could be MUCH worse. You’re benefiting from living in possibly the most user friendly country in the world.

Comment by Ben Jones
2013-12-15 21:19:14

I agree. I refuse to give up on this country.

Comment by rms
2013-12-15 21:49:52

“I refuse to give up on this country.”

+1 I agree, Ben.

Unfortunately it’s going to be a long slog ahead, IMHO, particularly for our younger generations.

Comment by Blue Skye
2013-12-15 22:06:13

I agree. There are many good people in the rising generation. Uphill yes.

Comment by Smalls
2013-12-15 22:08:57

Heeheeheee…Bin Ladin’s family was flown out of the United States on 9/12…Prince Bandar and W were very very close friends you know.

Bin Laden Family Evacuated
Two dozen members of Osama bin Laden’s family were urgently evacuated from the United States in the first days following the terrorist attacks on New York and Washington, according to the Saudi ambassador to Washington.

One of bin Laden’s brothers frantically called the Saudi Arabian Embassy in Washington looking for protection, Prince Bandar bin Sultan told The New York Times. The brother was sent to a room in the Watergate Hotel and was told not to open the door.

Most of bin Laden’s relatives were attending high school and college. The young members of the bin Laden family were driven or flown under FBI supervision to a secret place in Texas and then to Washington, The Times reported Sunday.

Many were terrified, fearing they would be lynched after hearing reports of violence against Muslims and Arab-Americans.

They left the country on a private charter plane when airports reopened three days after the attacks.

King Fahd, the ailing Saudi ruler, sent an urgent message to his embassy in Washington pointing out that there were “bin Laden children all over America” and ordered, “Take measures to protect the innocents,” the ambassador said.

It’s a tragedy,” Prince Bandar told the Times. “The elders” of the students “came to see me, and one of them was a bright boy from Harvard who like the others had absolutely nothing to do with this and yet we had to tell him to go home and wait until the emotions calmed down. And he told me that he never really appreciated why the Japanese wanted a memorial or an apology for their treatment in World War II.

The student added, according to the prince, “I understand now that when you are innocent, in the face of emotion, nothing, not even common sense, can help argue your case.”

Osama bin Laden is one of more than 50 children of a Yemeni-born migrant who made a vast fortune building roads and palaces in Saudi Arabia and his extended family spans the globe. Many have been educated in the United States and the family has donated millions of dollars to several American universities.

Bin Laden is estranged from his family and from Saudi Arabia, which revoked his citizenship in the early 1990s after he was caught smuggling weapons from Yemen.

© MMI, CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report
Copyright 2001 CBS. All rights reserved.

Comment by Housing Analyst
2013-12-15 07:22:51

mortgage salesmen are liars

Comment by jose canusi
2013-12-15 07:37:31

NOW yer talkin’!

Comment by azdude02
2013-12-15 07:38:58

drive till your qualify buddy!

Comment by Housing Analyst
2013-12-15 08:30:00

Why when you can rent for half the monthly cost of buying at current prices?

Comment by azdude02
2013-12-15 10:20:35

cost more to rent here dude. your numbers are seriously flawed.

(Comments wont nest below this level)
Comment by Housing Analyst
2013-12-15 11:37:30

Prove it.

Comment by Janet Felon
2013-12-15 18:13:59

Are you drunk, az?

Comment by Mr. Banker
2013-12-15 07:41:13

Here is proof that there is a God, and here is proof that this God looks out for bankers and this is probably so because bankers are doing God’s work:

If you are a lender and you discover that the collateral that backs some rather stupid loans you made has fallen in value then you just might end up taking a hit on your balance sheet. Taking a hit on one’s balance sheet just might possibly result in some red ink and if you, the lender, are stuck with a boss who has a limited sense of humor then you just might find yourself out of your cushy job and (gasp) you may have to go out in this rather cruel world and get an honest-to-god real job. Oh, the horror!

But if the collateral that backs the rather stupid loans you made happen to be real estate then you have no worries because somehow, somebody, somewhere in this Great Land of ours has determined it to be in the National Interest that real estate prices should forever remain elevated. And this forever elevating of real estate prices will forever elevate the values of the stupid mortgages that you stupidly written a few years back when the entire country went crazy, when the entire country went stupid.

And thus, because you are a banker, you are saved. And thus, because you are a banker, there is Redemption. And thus, there is a God.

Comment by 2banana
2013-12-15 07:44:30

Or in this case…

God = the US Government and endless bailout for the banks and wall street

It was not always this way.

S&L Crisis?

Banks went bankrupt and over 1500 bankers went to jail

Comment by Mr. Banker
2013-12-15 07:49:39

“It was not always this way.”

This happened before we bankers were able to totally buy up Congress.

Please try to keep up.

Comment by 2banana
2013-12-15 07:56:39

Amazing how well government worked when they only cared about fraud and general accounting practices…and not about how “fair things are…”

Amazing how corrupt government gets when they deal with picking winner and losers, subsidizing industries, taking over industries, bailing out industries, making things “affordable”, etc…

(Comments wont nest below this level)
Comment by Mr. Banker
2013-12-15 08:08:19

When you have what is essentualy a one-party system divided up into two factions and both factions are owned by the same groups of people - in my case, bankers - then this is what you end up with.

Nobody seems to question why large interests, such as banks, tend to contribute large sums of money to BOTH political parties. You would think they would favor one party over the other but for some mysterious reason they don’t.


Comment by scdave
2013-12-15 08:54:37

how well government worked when they only cared about fraud and general accounting practices ??

Really ?? Please…LOL…My laugh for the day 2-fruit…

Comment by Strawberrypicker
2013-12-15 09:13:10

Scdave, you have a point, as I think you are saying that to think govt ever cared about these (as opposed to serving the interests) seems naive.

I wonder about that too. Has it always been thus? On the other hand there is the example from the S and L crisis of massive loss being taken, bankruptcies and people going to jail. How do we deal with that datapoint comparing it to today when nada, zip, zilch happened ?

Comment by scdave
2013-12-15 09:45:50

How do we deal with that datapoint comparing it to today when nada, zip, zilch happened ?

As bad as the S & L crisis was, it was small potatoes compared with what happened in the run up to the September 2008 crash…

Why nothing much happened in this latest “sting” on the american people I just don’t know…The easy answer is that our system both political & economic is corrupt at the top…

Comment by Strawberrypicker
2013-12-15 12:20:28

“The easy answer is that our system both political & economic is corrupt at the top”

But then isn’t the further conclusion that the power structure today is MORE corrupt than previously because at least a few years ago something happened?

I’m not talking R or D or conservative/liberal here, but I’ve been struggling with the question of whether we’ve crossed a line or whether it’s always been this way. The implications to me of the answer to this question are huge.

Comment by scdave
Comment by Bill, just South of Irvine
2013-12-15 08:05:46

LOL, further in the article it predicts many from the Bay area are going to repeat the 2000 bubble era idea of going inland to the central valley and buy houses because they are 40% off their peak!

I still recall reading about near empty subdivisions of communities around Sacramento in the late 2000s and graffiti moving in while prices were cratering.

Rinse, wash, repeat.

Home buying two hours from work is as dumb as progressivism.

Comment by Mr. Banker
2013-12-15 08:25:10

If houses are being bought up 40% off their peak then that suggests that the values of the mortgages that are backed by these off-their-peak-value houses are down as well.

This is the real tragedy here, not the suffering of the homebuyers but the suffering of the lenders. If fools want to buy up houses that are two-hour drives away from where they work then they should be encouraged to do so. Any discouragement may endanger the health of the banking industry and thus the health of the economy - and such endangerment could even be considered to be a threat to national security.

Comment by Housing Analyst
2013-12-15 14:01:38

Which tells us the epicenter of the housing collapse will be in SF Bay area.

If you think your house is worth some inflated amount in San Francisco, you’re in for a major disappointment.

Comment by azdude02
2013-12-15 15:30:22

a lot of those shanty towns int he bay area are crime and drug infested dumps.

Comment by Strawberrypicker
2013-12-15 07:53:48


(PNI) Prospecive buyers in metro Phoenix counting on Federal Housing Administration-backed mortgages soon either will have to come up with a bigger down payment or buy a less expensive property. The limit on FHA loans in the Valley is dropping by more than $120,000 to $217,000.

Buried on page D10 of the Az Republic today, most important story of the year.

Comment by Bill, just South of Irvine
2013-12-15 08:08:35

That is the right direction. But $217,000 is still an outrageous giveaway for many parts of Phoenix. Hell, even in my Phoenix neighborhood there are decent houses for that price.

Comment by Strawberrypicker
2013-12-15 08:41:02

From the article: Many of the nation’s priciest housing areas, in California and on the East Coast, will see their FHA loan limit fall to $625,000 from $729,500.

It’s only fair everyone gets a cut by 100k or so.

It also says that FHA loans are only 20 percent of buyers. I think it is much more.

Comment by azdude02
2013-12-15 10:24:49

i would think it would be a higher percentage too. I guess it has no impact on the usda rural loan program with zero down?

(Comments wont nest below this level)
Comment by 2banana
2013-12-15 08:02:01

2banana’s definition:

A conservative is more than happy to live under the laws they want for everyone else.

A liberal/progressive expects to be exempted from the laws they want for everyone else. A liberal/progressive expects to be exempted from the taxes they want for everyone else. Those laws and taxes are for the little people.

I see “obama people” except they don’t know they are “obama people”


In NYC, thousands of Obama voting, upper class professionals complain about losing their insurance
wordpress | December 15, 2013

The New York Times is reporting this news about five years too late, but I guess that’s better than never. Obamacare is forcing thousands of Obama voting, well educated, upper class, professionals from New York City to lose their insurance.

Even before Obamacare was passed, its critics were saying this would happen. It’s a shame that the New York Times waited until after the 2012 election to report information that Obamacare critics knew five years ago.

These people are intelligent, well educated professionals. How could they not see that these cancellations were coming? How could so many people who are this smart, simultaneously be so dumb that these cancellations are coming as a surprise?

The New York Times reports:

Many in New York’s professional and cultural elite have long supported President Obama’s health care plan. But now, to their surprise, thousands of writers, opera singers, music teachers, photographers, doctors, lawyers and others are learning that their health insurance plans are being canceled and they may have to pay more to get comparable coverage, if they can find it.

“I couldn’t sleep because of it,” said Barbara Meinwald, a solo practitioner lawyer in Manhattan.

Ms. Meinwald, 61, has been paying $10,000 a year for her insurance through the New York City Bar. A broker told her that a new temporary plan with fewer doctors would cost $5,000 more, after factoring in the cost of her medications.

It is not lost on many of the professionals that they are exactly the sort of people — liberal, concerned with social justice — who supported the Obama health plan in the first place. Ms. Meinwald, the lawyer, said she was a lifelong Democrat who still supported better health care for all, but had she known what was in store for her, she would have voted for Mitt Romney.

“We are the Obama people,” said Camille Sweeney, a New York writer and member of the Authors Guild. Her insurance is being canceled, and she is dismayed that neither her pediatrician nor her general practitioner appears to be on the exchange plans. What to do has become a hot topic on Facebook and at dinner parties frequented by her fellow writers and artists.

“I’m for it,” she said. “But what is the reality of it?”

Comment by Skroodle
2013-12-15 10:05:57

Insurance companies will not be satisfied until they have 100% of the economy.

Comment by NH Hick
2013-12-15 12:04:04

Obama will not be satisfied until he controls 100% of the economy.

Comment by MacBeth
2013-12-15 11:16:54

“In NYC, thousands of Obama voting, upper class professionals complain about losing their insurance.”

Dumb@sses. What did they expect? That their “good for the masses” mantra wouldn’t somehow affect them negatively, too?

Socialism is great until you run out of other people’s money.

Elitists cannot escape the clutches of socialism, either. They’ve deluded themselves into thinking they can.

Got your Titanic chairs reserved all you statists out there? Think again. There never were more than a few hundred seats available.

Comment by Bill, just South of Irvine
2013-12-15 11:49:22

Actually the elitists who kiss Obama’s a$$ have international tax havens. Irishman Bono of U2 and his band mates for years have enjoyed artist tax breaks while preaching altruism to their middle class and lower middle class fans. Or how about the late John Lennon? When I hear his song “Imagine,” I change the words a bit and imagine him singing “Imagine all the people, sharing all my wealth.” No, of course he would never use those words. To elitists, it is Other People’s Money. They are pure scum. Worst is the young gullibles who believe them.

Comment by goedeck
2013-12-15 13:41:15

Nelson Muntz, pick up the courtesy phone.

Comment by AbsoluteBeginner
2013-12-15 08:04:13

Is a STEM degree really worth getting?

Comment by Mr. Banker
2013-12-15 08:26:51

Yes, and one should finance such a degree by borrowing as much money as possible.

Comment by Mr. Banker
2013-12-15 08:40:32

If this country is to compete with other countries then workers here must work harder and get paid less because their competitors overseas are working harder and are getting paid less.

There is little incentive for one to work hard UNLESS he has a lot of bills to pay. And if this worker has a lot of student loans then he will have at least one large bill that he will have to pay, this means he will have to work long and hard.

Plus …

Because the idea has been sold to the Great Multitude Of Unwashed Masses that inhabit this Great Country that the only way to successfully make their way in this world is via higher education they are going to be a LOT of college gratuates and a lot of college graduate translates to a lot of desperate-but-qualified potential employees, and if these desperate-but-qualified employees can be successfully pitted against each other then an employer may end up with getting more and paying less. The ultimate, of course, is getting interns to work for you for no pay at all.

Comment by AbsoluteBeginner
2013-12-15 08:48:55

You could write a ‘Dummies Guide to Adulthood’ with this prose you type. Even if most of us will not be bankers, at least we can say we employ one.

(Comments wont nest below this level)
Comment by Mr. Banker
2013-12-15 09:51:37

“You could write ‘Dummies Guide to Adulthood’ with this prose you type.”

It would have to be a coloring book since most of these dummies can’t read. Or even if they can read they won’t take the trouble to do so.

Isn’t it interesting that someone who signs a dotted line on a multi- MULTI-thousand dollar contract that commits him to make monthly payments to total strangers over a time span of many, many years would not take the trouble to read it?

And isn’t it amazing that if the contract he willingly signs contains an obvious spelled-out condition - say, a scheduled change in the interest rate he will be charged sometime in the future - that this will come as a total surprise to him?

Comment by AbsoluteBeginner
2013-12-15 12:56:19

Dummies Guide to Low Interest

Comment by scdave
2013-12-15 09:01:49

Children in China go to school 50 days more “per year” then their USA counterparts…Thats 2 1/2 years more schooling at the end of Yr-12….Also, if I understood correctly on GPS this morning, there are no school sanctioned sports…

Combine the two, which is going to produce a more educated young adult…

(Comments wont nest below this level)
Comment by scdave
2013-12-15 09:05:48

I will mention one more thing…A teacher from Oregon wrote a letter to Tom Friedman saying that he had many “A” students but he also had many “F” students that are not prepared, willing or concerned about learning…They do not connect the dots between their education and their future quality of life…They are more interested in tweeting, texting, surfing and friday night football….

Comment by Mr. Banker
2013-12-15 09:35:34

“They do not connect the dots between their education and their future quality of life … They are more interested in tweeting, texting, surfing and friday night football …”

Send them into the military so they can put their lives on the line in protecting the interests of Big Business that have lucrative operations overseas. Fill their lost souls full of patriotism and they will willingly storm any hill in your behalf.

American interests and thus American jobs have been exported overseas so now American Armed Forces must be exported overseas to protect these exported American interests. Some could make the case that the cost in the form of blood and money of protecting these exported American interests should be borne by the people who benifit from these exported interests but such is not the case as it stands now with the policies of our current bought-and-paid-for U.S Congress.

Perhaps after the next election Congress will finally see the light and do the right thing.


Comment by In Colorado
2013-12-15 09:53:34

Also, if I understood correctly on GPS this morning, there are no school sanctioned sports

That’s pretty much non-existent outside of North America. This of course saves a lot of money: much smaller schools without pricey and expensive to maintain gyms and outdoor facilities, no highly paid athletic staff (I understand that in Texas High Schools it’s not unusual for the football to be the best paid member of the staff).

As for the Chinese being better educated, from what I have seen at the multinationals where I have worked they aren’t all that. They put too much emphasis on rote memorization (just think about how hard it must be to learn to read and write and how much time that must take). At the end of the day, most of the creativity still happens here in the US and in Europe.

Comment by scdave
2013-12-15 10:11:33

At the end of the day, most of the creativity still happens here in the US and in Europe ??

I would not disagree but at least through the lens that I see here they are mostly not born in the USA and most of their K-12 education was in their homeland although we do see more & more coming for High School…

I have a friend who has a child in a Cupertino elementary school…Not sure what blend of ethnicity my friend is but I will just call them Caucasian…Their son, is the only caucasian in the entire class…All others are either Asian or Indian…

API score = 980…… Coincidence ??

Comment by Skroodle
2013-12-15 10:08:50

Of all the big money makers at the companies I have worked for, none of them had a STEM degree, except for one with an EE degree that went back to school and got an MBA.

Comment by Carl Morris
2013-12-15 17:50:50

That may be true. But there is no manual for how to join that club. At least with a STEM degree you can feed a family while solving that puzzle.

Comment by Bill, just South of Irvine
2013-12-15 11:50:30

in 1985 yes.

Comment by rms
2013-12-15 16:52:38

“Is a STEM degree really worth getting?”

I’d have to submit a resounding, yes. But since this is how I earn my living realize that my vote is skewed. A great deal of caution is in order since you will likely have to take on student loan debt, and you’ll likely end up working for one of the various public utilities or government entities as an employee or contractor.

I’ve developed a variety of skills through various jobs and the military, and I’ve come to one overwhelming conclusion: It’s still better to have an engineering degree and no job than it is to have a job and no engineering degree.

Comment by shendi
2013-12-15 17:57:56

It is not for your run of the mill students. For the disciplined student, meaning interested and motivated, it is a good field. One who can finish the Bachelor’s in 4 years will be in great shape to get a RA while doing Masters.

Unfortunately most everyone that I know of who are doing STEM, especially engineering, are there because they think it is easy to get a job. It isn’t. The key is you have to have aptitude and be willing to learn patiently and master the nuances on the job. After that moving up is easier.

Comment by Bill, just South of Irvine, CA
2013-12-15 18:48:38


The problem is the USA is not a capitalist economy. The lieberals who are on HBB would laugh at you to fall for their hounding you to take a lower paying job to avoid government contracting while they work for the government themselves - example: Polly. Or contract to the government: Example: Joey (Liberace).

The reality is that you have to eat. You have to make what is best for you in this semi totalitarian economy. Take the money and build up net worth then bail out, disengage, when ready.

Comment by rms
2013-12-15 20:41:38

IMHO, there are two sure paths to making more money in engineering: Become a manager of an engineer department, or a lawyer and sue engineers and their employers; I’m not well suited for either.

I don’t need money; it’s just money. If our economy would return to its meritocratic principals I’d be more than successful.

Comment by Bill, just South of Irvine
2013-12-15 21:03:31

When I had a net worth of $1,000 at the age of 31 and a salary of $35,000, I was very happy. I had so many women after me and loved every minute of it. When you are young and strong and buff you don’t need money.

Now that I made money I acquiesce to lower income (dont need money) and still work out with 95% of the intensity I did at age 31 but I stay home in the evenings at age 54. Most of my generation stay home. I have very little in common with the younger set and am bored with most computer games, as well as the iPhone. So here I am blogging like the rest of you.

(Comments wont nest below this level)
Comment by phony scandals
2013-12-15 08:25:20

Governments Admit They Carry Out False Flag Terror
by Washingtons Blog - December 9th, 2013, 1:30am

Tweet This Email This Post Print This Post Governments from around the world admit they carry out false flag terror:

•A major with the Nazi SS admitted at the Nuremberg trials that – under orders from the chief of the Gestapo – he and some other Nazi operatives faked attacks on their own people and resources which they blamed on the Poles, to justify the invasion of Poland. Nazi general Franz Halder also testified at the Nuremberg trials that Nazi leader Hermann Goering admitted to setting fire to the German parliament building, and then falsely blaming the communists for the arson
•Soviet leader Nikita Khrushchev admitted in writing that the Soviet Union’s Red Army shelled the Russian village of Mainila in 1939, and declared that the fire originated from Finland as a basis launching the Winter War four days later
•Israel admits that an Israeli terrorist cell operating in Egypt planted bombs in several buildings, including U.S. diplomatic facilities, then left behind “evidence” implicating the Arabs as the culprits (one of the bombs detonated prematurely, allowing the Egyptians to identify the bombers, and several of the Israelis later confessed) (and see this and this)
•The CIA admits that it hired Iranians in the 1950′s to pose as Communists and stage bombings in Iran in order to turn the country against its democratically-elected prime minister
•The former Italian Prime Minister, an Italian judge, and the former head of Italian counterintelligence admit that NATO, with the help of the Pentagon and CIA, carried out terror bombings in Italy and other European countries in the 1950s and blamed the communists, in order to rally people’s support for their governments in Europe in their fight against communism. As one participant in this formerly-secret program stated: “You had to attack civilians, people, women, children, innocent people, unknown people far removed from any political game. The reason was quite simple. They were supposed to force these people, the Italian public, to turn to the state to ask for greater security” (and see this)(Italy and other European countries subject to the terror campaign had joined NATO before the bombings occurred). And watch this BBC special
•As admitted by the U.S. government, recently declassified documents show that in the 1960′s, the American Joint Chiefs of Staff signed off on a plan to blow up AMERICAN airplanes (using an elaborate plan involving the switching of airplanes), and also to commit terrorist acts on American soil, and then to blame it on the Cubans in order to justify an invasion of Cuba. See the following ABC news report; the official documents; and watch this interview with the former Washington Investigative Producer for ABC’s World News Tonight with Peter Jennings.
•2 years before, American Senator George Smathers had suggested that the U.S. make “a false attack made on Guantanamo Bay which would give us the excuse of actually fomenting a fight which would then give us the excuse to go in and [overthrow Castro]“.
•And Official State Department documents show that – only nine months before the Joint Chiefs of Staff plan was proposed – the head of the Joint Chiefs and other high-level officials discussed blowing up a consulate in the Dominican Republic in order to justify an invasion of that country. The 3 plans were not carried out, but they were all discussed as serious proposals
•The South African Truth and Reconciliation Council found that, in 1989, the Civil Cooperation Bureau (a covert branch of the South African Defense Force) approached an explosives expert and asked him “to participate in an operation aimed at discrediting the ANC [the African National Congress] by bombing the police vehicle of the investigating officer into the murder incident”, thus framing the ANC for the bombing
•An Algerian diplomat and several officers in the Algerian army admit that, in the 1990s, the Algerian army frequently massacred Algerian civilians and then blamed Islamic militants for the killings (and see this video; and Agence France-Presse, 9/27/2002, French Court Dismisses Algerian Defamation Suit Against Author)
•Senior Russian Senior military and intelligence officers admit that the KGB blew up Russian apartment buildings and falsely blamed it on Chechens, in order to justify an invasion of Chechnya (and see this report and this discussion)
•According to the Washington Post, Indonesian police admit that the Indonesian military killed American teachers in Papua in 2002 and blamed the murders on a Papuan separatist group in order to get that group listed as a terrorist organization.
•The well-respected former Indonesian president also admits that the government probably had a role in the Bali bombings
•As reported by BBC, the New York Times, and Associated Press, Macedonian officials admit that the government murdered 7 innocent immigrants in cold blood and pretended that they were Al Qaeda soldiers attempting to assassinate Macedonian police, in order to join the “war on terror”.
•Although the FBI now admits that the 2001 anthrax attacks were carried out by one or more U.S. government scientists, a senior FBI official says that the FBI was actually told to blame the Anthrax attacks on Al Qaeda by White House officials (remember what the anthrax letters looked like). Government officials also confirm that the white House tried to link the anthrax to Iraq as a justification for regime change in that country
•Former Department of Justice lawyer John Yoo suggested in 2005 that the US should go on the offensive against al-Qaeda, having “our intelligence agencies create a false terrorist organization. It could have its own websites, recruitment centers, training camps, and fundraising operations. It could launch fake terrorist operations and claim credit for real terrorist strikes, helping to sow confusion within al-Qaeda’s ranks, causing operatives to doubt others’ identities and to question the validity of communications.”
•United Press International reported in June 2005:

U.S. intelligence officers are reporting that some of the insurgents in Iraq are using recent-model Beretta 92 pistols, but the pistols seem to have had their serial numbers erased. The numbers do not appear to have been physically removed; the pistols seem to have come off a production line without any serial numbers. Analysts suggest the lack of serial numbers indicates that the weapons were intended for intelligence operations or terrorist cells with substantial government backing. Analysts speculate that these guns are probably from either Mossad or the CIA. Analysts speculate that agent provocateurs may be using the untraceable weapons even as U.S. authorities use insurgent attacks against civilians as evidence of the illegitimacy of the resistance.

•Undercover Israeli soldiers admitted in 2005 to throwing stones at other Israeli soldiers so they could blame it on Palestinians, as an excuse to crack down on peaceful protests by the Palestinians
•Quebec police admitted that, in 2007, thugs carrying rocks to a peaceful protest were actually undercover Quebec police officers (and see this)
•At the G20 protests in London in 2009, a British member of parliament saw plain clothes police officers attempting to incite the crowd to violence
•A Colombian army colonel has admitted that his unit murdered 57 civilians, then dressed them in uniforms and claimed they were rebels killed in combat
•U.S. soldiers have admitted that if they kill innocent Iraqis and Afghanis, they then “drop” automatic weapons near their body so they can pretend they were militants
•The highly-respected writer for the Telegraph Ambrose Evans-Pritchard says that the head of Saudi intelligence – Prince Bandar – admitted last the Saudi government controls “Chechen” terrorists
So Common … There’s a Name for It
This tactic is so common that it was given a name for hundreds of years ago.

“False flag terrorism” is defined as a government attacking its own people, then blaming others in order to justify going to war against the people it blames. Or as Wikipedia defines it:

False flag operations are covert operations conducted by governments, corporations, or other organizations, which are designed to appear as if they are being carried out by other entities. The name is derived from the military concept of flying false colors; that is, flying the flag of a country other than one’s own. False flag operations are not limited to war and counter-insurgency operations, and have been used in peace-time; for example, during Italy’s strategy of tension.

The term comes from the old days of wooden ships, when one ship would hang the flag of its enemy before attacking another ship in its own navy. Because the enemy’s flag, instead of the flag of the real country of the attacking ship, was hung, it was called a “false flag” attack.

Indeed, this concept is so well-accepted that rules of engagement for naval, air and land warfare all prohibit false flag attacks.

Leaders Throughout History Have Acknowledged False Flags
Leaders throughout history have acknowledged the danger of false flags:

“This and no other is the root from which a tyrant springs; when he first appears he is a protector.”
- Plato

“If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy.”
- U.S. President James Madison

“A history of false flag attacks used to manipulate the minds of the people! “In individuals, insanity is rare; but in groups, parties, nations, and epochs it is the rule.”
― Friedrich Nietzsche

“Terrorism is the best political weapon for nothing drives people harder than a fear of sudden death”.
- Adolph Hitler

“Why of course the people don’t want war … But after all it is the leaders of the country who determine the policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship … Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.”
- Hermann Goering, Nazi leader.

“The easiest way to gain control of a population is to carry out acts of terror. [The public] will clamor for such laws if their personal security is threatened”.
- Josef Stalin

People Are Waking Up to False Flags
People are slowly waking up to this whole con job by governments who want to justify war.

More people are talking about the phrase “false flag” than ever before.

Category: Think Tank, War/Defense - 78k -

Comment by Gulf Of Tonkin Incident
2013-12-15 08:50:07


Comment by AbsoluteBeginner
2013-12-15 08:54:48

People are waking up. How do you erase that etch-a-sketch picture?

Comment by phony scandals
2013-12-15 09:39:12

Do you want me to read the card?

Comment by Bill, just South of Irvine
2013-12-15 11:54:58

Yuppers. Our own government keeps fanning the flames of middle east rension and gladly invites blowback to kill innocent American citizens. The gullible, in turn, favor more security and less freedom. Same old $hit.

Comment by Bill, just South of Irvine
2013-12-15 11:56:08


Comment by Strawberrypicker
2013-12-15 12:27:33

There are those who believe the entire government is a false flag operation.

Comment by AbsoluteBeginner
2013-12-15 13:11:04

They do have a hand in things big and small. Continuity is their prime directive IMHO. One hundred years ago we had the same players just with different names and clothing and contemporary contraptions. Human nature.

Hits me like a ton of bricks at work sometimes that we are so wired with our I-devices and technological things so much and that has only been a saturated cultural milestone for a few generations. People are being programmed to obey the tech gadget master role. I make this note, because I wonder about government policy and its intrusion into our daily doings. You don’t have any privacy or should not think you do. That bothers me because anything can be held against you if the controlling authorities start going down a list of shakedown candidates.

Comment by RioAmericanInBrasil
2013-12-15 08:46:40

I guess economic “Trickle-down” fails in any language. You’re seeing more and more people talking all around the world about “Supply-Side’s” now-proven failures.

Lapid: I’m no socialist, but trickle-down has failed

“Trickle-down failed in the US, it failed in Britain, and it failed in Israel. When the money reaches the top it stays at the top.”

Minister of Finance Yair Lapid in a speech to the Israel Securities Authority:
“I am no socialist,” declared Lapid. “Far from it, but the time has come to admit that trickle-down economics, Reganomics of the 1980s, which asserted that the rich should be allowed to make unlimited profits and all the tax breaks possible, and the money would trickle down to the poor, simply does not work. It failed in the US, it failed in Britain, and it failed in Israel. When the money reaches the top it stays at the top.

“Money should not be at the top. We should invest the money in the middle class. From there, it will flow down; from there it will flow up. We need the middle class to earn more money,…

….The rich grew richer, the poor grew poorer, and people who are now in their 30s are the first generation of Israelis who live less well than their parents. Not only that, they also live at their parents’ expense, and are still stuck living at home. This has to change.

Comment by Albuquerquedan
2013-12-15 08:59:40

The economics you want was tried and failed in Zimbabwe and to the degree it is being tried by Obama in the US it is failing. Obama can try his bubblenomics just like his ideological father Mugabe but it does not work. True supply side economics, which just means that you cut taxes to encourage investments in productive capacity, does work and it is a major reason for China’s rapid growth and our poor growth. It is no accident that Ireland with its very low corporate tax rate is recovering while Greece with its higher corporate tax rate is flat on its back. Rio, you just can’t take that Reagan succeeded in reviving an economy but Obama failed. Your talking points seem to be coming straight out of the White House with Obama last week seeming to blame Reagan for his failures.

Comment by In Colorado
2013-12-15 09:56:08

The economics you want was tried and failed in Zimbabwe succeeded during the Eisenhower administration.

Comment by Ben Jones
2013-12-15 10:12:19

‘The economics you want…succeeded during the Eisenhower administration’

That’s fantastic! It worked pretty good for the Pharaohs too. Of course, it’s all pretty much ancient history. Meanwhile, back to the current epoch, we have central bankers creating trillions of dollars and running up massive bubbles all over the globe. But by all means, let’s quibble over Martin Van Buren’s economic policy next. I’ll go first.

(Comments wont nest below this level)
Comment by Albuquerquedan
2013-12-15 10:52:02

Eisenhower tried bubblenomics based on the printing of unlimited fiat currency and exploding government debt? Nice try. We were on the gold standard during Eisenhower’s presidency and the government did not monetize the debt. While the tax rates were higher during his administration that is much easier to sustain when your competitors have been destroyed and they also have high tax rates. He did it due to the need to reduce the debt as a percentage of the GDP. Finally, defense spending was much higher as a percentage of gdp than today due to the cold war. Comparing the eras is really comparing apples to oranges. But we certainly were not attempting bubblenomics which is built on more and more debt both private and public.

(Comments wont nest below this level)
Comment by In Colorado
2013-12-15 12:46:23

Eisenhower tried bubblenomics based on the printing of unlimited fiat currency and exploding government debt? Nice try.

No. He had high taxation rates on the wealthy, which is why he was the last Republican prez to not run a deficit. He never espoused Reaganomics, supply side nor trickle down economics.

Nice try.

Comment by 2banana
2013-12-15 10:55:48

Where the US government (as measured by % of GDP) was less than HALF of what it is today???

The economics you want was tried and failed in Zimbabwe succeeded during the Eisenhower administration.

(Comments wont nest below this level)
Comment by MacBeth
2013-12-15 11:40:57

Almost any policy would have succeeded during Eisenhower’s administration.

Most of Europe and Japan was flat on its back. China, India, Mexico and South America were basically non-existent economically.

(Comments wont nest below this level)
Comment by In Colorado
2013-12-15 12:48:24

Almost any policy would have succeeded during Eisenhower’s administration.

I’m sure that current policies that concentrate wealth at the very top would have worked wonders back then.

Comment by Albuquerquedan
2013-12-15 14:47:56

I guarantee that a smaller percentage of the overall tax revenue came from the top 10% during Eisenhower’s presidency than now. Tax the rich 91% and they put their money into tax free investments like municipal bonds and they ever sell their stocks to avoid ever having to pay taxes.

Comment by Albuquerquedan
2013-12-15 15:04:21

Raising the tax rates will just drive more people into tax shelters:

Government spent a lot less on social programs during the Eisenhower presidency. It was that fact and not the tax rates that led to a balanced budget.

Comment by Albuquerquedan
2013-12-15 15:17:46

The key question is if the tax rates were working so well why did Kennedy feel the need to cut them and why did the economy respond so well when he did cut them? Now, I don’t think that every tax cut on the wealthy is justified under supply side economics. I think the Bush tax cuts should have been directed at cutting corporate rates since it is the high corporate rates that are putting us at a competitive disadvantage. Thus, the Bush tax cuts were tax cuts for the rich being justified as supply side economics. However, that is still better than pork barrel spending justified as stimulus.

Comment by Bill, just South of Irvine
2013-12-15 16:32:17

1) municipal bonds
2) Roth 401k
3) Roth IRA
4) buy and hold tax managed stock index funds.
5) build up movable hidable tangibles.
6) buy short term US treasuries two years or less, and series I savings bonds

Mix it all together and you have a very good diversified portfolio that is inflation and deflation proof, insures a bit against some electronic confiscation, and you can use to diversify among tax avoidance strategies.

For example, one year your entire income might be from a Roth. No income tax. One year you can sell stocks while living in Nevada. No state capital gains tax and your federal tax is 15% long term.

This is the beauty of diversification.

Comment by Strawberrypicker
2013-12-15 09:17:21

A guy in Israel blaming Israel’s economics on Reagan? Nice reach.

Welcome back from your ban Lola.

Comment by scdave
2013-12-15 09:24:03

Lapid offered a mea culpa, saying

“How much I didn’t like it, and not proud of what we did, but that that there was no choice, because if we didn’t do this, the Israeli economy would have crumbled in our hands”…

That same quote could have came from Hank Paulson IMO…

Comment by Bill, just South of Irvine
2013-12-15 11:57:51

Oh goody! Another liberal post by Riotard, who would not ever have moved to Brazil (or claim to live there) if Brazil did not shed its 1970s socialism.

Comment by Albuquerquedan
2013-12-15 08:50:17

Speaking of false information NASA seems to be promulgating more and more of it. While satellite data is more accurate than ground data to determine global temperatures, NASA uses ground base. Several times when data filed to establish a milestone NASA would relook at the data and discover that a milestone would be reached. But this always involved a small change like .01F. However, in the last few months the data between the satellites and the ground based data has increasingly diverged. For the month of November, NASA is reporting the temperature close to .4 F warming than the UAH data set. It may be that the third world sh*t holes are providing bad data to get more aid or NASA may be involved by it needs to be investigated. The manipulation of unemployment data was bad enough but science should be above this type of manipulation.

Comment by Albuquerquedan
2013-12-15 09:06:30

If you look at Greece and apply Rio’s theories they should be doing quite well due to their “progressive” tax structure:

Comment by phony scandals
2013-12-15 09:06:38

2016 Looks Disturbingly Good For the Corporate State

Sheldon Richman | December 15, 2013

If you share my belief that the major obstacle to the free society is the national-security/corporate state, 2016 is shaping up to be a year of apprehension. The Wall Streeters, who are among the biggest advocates of partnership between big government and big business, are looking forward to a presidential contest between Hillary Clinton and Chris Christie, a contest the bankers can’t lose.

They have already discounted any populist rhetoric Clinton may need to fight off a primary challenge from, say, Sen. Elizabeth Warren. As “one well-placed Democrat” told Politico, “Wall Street folks are so happy about [having Clinton run] that they won’t care what she says.”

Clinton recently spoke to a gathering in New York organized by Goldman Sachs, the giant, influential (and bailed-out) investment bank, a gathering that Politico says was attended by “a few hundred major investors.”

Ordinarily these masters of the universe might have groaned at the idea of a politician taking the microphone. In the contentious years since the crash of 2008, they’ve grown wearily accustomed to being called names — labeled “fat cats” by President Obama and worse by those on the left — and gotten used to being largely shunned by Tea Party Republicans for their association with the Washington establishment. And of course there are all those infuriating new rules and regulations, culminating this week with the imposition of the so-called Volcker Rule to make risky trades by big banks illegal.
“But,” Politico continues, “Clinton offered a message that the collected plutocrats found reassuring, according to accounts offered by several attendees, declaring that the banker-bashing so popular within both political parties was unproductive and indeed foolish.”

Striking a soothing note on the global financial crisis, she told the audience, in effect: We all got into this mess together, and we’re all going to have to work together to get out of it. What the bankers heard her to say was just what they would hope for from a prospective presidential candidate: Beating up the finance industry isn’t going to improve the economy — it needs to stop. And indeed Goldman’s Tim O’Neill, who heads the bank’s asset management business, introduced Clinton by saying how courageous she was for speaking at the bank. (Brave, perhaps, but also well-compensated: Clinton’s minimum fee for paid remarks is $200,000).

She got one thing right:

The politicians and big bankers “all got into this mess together.” The financial and housing collapse of 2008 was the fruit of that malign partnership of big government and big business. (See my article “Wall Street Couldn’t Have Done It Alone.”) But the big banks are doing fine now, thank you, and there’s no reason to think that too-big-to-fail is over. It’s regular people who are still hurting.

So the bankers liked what they heard. Politico reports:

“It was like, ‘Here’s someone who doesn’t want to vilify us but wants to get business back in the game,’” said an attendee. “Like, maybe here’s someone who can lead us out of the wilderness.”
Back in the game? That’s a good one!

In Clinton, then, we have a friend of the bankers and a friend of the military-industrial complex, since as secretary of state she was an advocate of a muscular foreign policy, including intervention in Libya. (When she was in the Senate she voted to give George W. Bush a blank check to invade Iraq, and when she was first lady, she pushed Bill Clinton to drop bombs on the Balkans).

“And if the banking class is delighted with Clinton lately,” Politico notes, “the feeling appears mutual.”

Wall Street’s first choice on the GOP side is apparently Chris Christie, the governor of New Jersey. He had his own meeting with the big-money crowd in July 2011. Politico calls him “the candidate with the best chances at winning the support of bankers in the next presidential election.”

At that 2011 meeting: “Henry Kissinger [!], the former secretary of state, stood and pleaded with the governor to enter the presidential race for the good of his country. Christie would, of course, resist their pleas, becoming perhaps even more alluring to those on Wall Street as a prospect for 2016.”

“I like him. I do. I think he’s authentic, and I think he is a good manager and a good leader,” Goldman’s Lloyd Blankfein said of Christie at a recent Wall Street industry event, where he also praised Hillary Clinton.

So there you have it. The titans of Wall Street have a shot at a can’t-lose 2016 election.

Who’s surprised? The corporate state’s roots go quite deep, having had a couple of hundred years to spread. It’s easy to discount its pervasiveness because of the chronic public feuding between business, particularly big banks, and some politicians, but don’t be fooled by this. The feud is more superficial than it appears. Roderick Long explains:

Those who see government power and corporate power as being in conflict, and those who seem them as being in cahoots, each have a point. The alliance between government and the corporate elite is like the partnership between church and state in the Middle Ages: each one wants to be the dominant partner, so there’s naturally some pushing and shoving from time to time; but on the other hand the two parties have a common interest in holding down the rest of us, and so the conflict rarely goes too far. The main difference between “left-wing” and “right-wing” versions of statism, as I see it, is that the former generally seek to shift the balance a bit farther in favour of the state (i.e., toward state-socialism) while the latter generally seek to shift the balance a bit farther in favour of corporatism and plutocracy. (In the U.S., the reigning versions of liberalism and conservatism are arguably both more corporatist than state-socialist; but the liberals are still a few notches farther toward state-socialism than the conservatives are.)
This disagreement is useful in discouraging spectators from discovering the radical alternative to statism, the free market. Those with an aversion to state socialism will be drawn to the plutocrats, thinking they represent the free-market choice — hence the free-market rhetoric from people who want no part of the free market. Meanwhile, those with an aversion to corporate abuse will find the “statocrats” (Long’s term) appealing, believing they represent the only alternative to plutocracy. You know who wins — and who loses.

Comment by Mr. Banker
2013-12-15 10:14:26

This article is a work of beauty that describes an effort that, in itself, is a work of beauty.

My favorite part: “… the two parties have an interest in holding down the rest of us.” Here the author was not talking about our two major political parties (which, IMHO, is but one party with two factions) no, he was talking about the government and the corporate elite.

The government and the corporate elite are essentially one and the same as can be easily seen by watching as The Big Players of one side move on over and immediately become The Big Players of the other side.

Comment by phony scandals
2013-12-15 10:40:19

2016 Looks Disturbingly Good For the Corporate State

Sheldon Richman | December 15, 2013

(Page 2 of 2)

Alas, not even Nelson Mandela could see beyond this rigged framework. (Apartheid, of course, was the negation of the free market.) He came out of prison sounding like a state socialist. “Two years later, however,” the New York Times’ Andrew Ross Sorkin reports, “Mr. Mandela changed his mind, embracing capitalism, and charted a new economic course for his country.” Sorkin conflates “capitalism” with free markets, but he means corporate statism, or plutocracy.

Mandela’s change of mind occurred in 1992 at the World Economic Forum in Davos, Switzerland, not a known hangout for advocates of the radically freed market.

“They changed my views altogether,” Mr. Mandela told Anthony Sampson, his friend and the author of “Mandela: The Authorized Biography.” “I came home to say: ‘Chaps, we have to choose. We either keep nationalization and get no investment, or we modify our own attitude and get investment.”…

Mr. Mandela’s push toward free markets [sic] opened up his country to become the fastest growing in Africa and eventually brought in billions of dollars of investment from large companies outside the country. Barclays, for example, acquired Absa, South Africa’s largest consumer bank, in 2005. Iscor, the country’s largest steel maker, was sold to Lakshmi Mittal’s LNM in 2004. Industrial and Commercial Bank of China bought a big stake in Standard Bank, South Africa’s largest financial services company, in 2008. And Massmart, a South African supermarket chain, sold a majority stake to Walmart in 2011.

Note the odd equation of the free market with an environment hospitable to big corporations. As Kevin Carson notes, “The same corporate interests retained control of the South African economy — but with newly rich members of the ANC leadership buying in and new black faces on the boards of directors.”

The results? Some economic growth, but lately nothing spectacular. (Conventional measures of growth are highly misleading.) Meanwhile, Sorkin reports:

The gap between the haves and have-nots is now higher than it was when Mr. Mandela became president. Inequality in South Africa is a real and growing issue.

South Africa’s National Planning Commission has said that in 1995, the proportion of its citizens living below the poverty line of $2 a day was about 53 percent; the figure has gone as high as 58 percent and as low as only 48 percent.

The official unemployment rate hovers at about 25 percent and may, in truth, be much higher. According to Bloomberg News, the average white household earns six times what a black one does. Among young black men, unemployment is close to 50 percent. Whites still hold nearly three-quarters of all management jobs.

Too bad Mandela never learned there is a radical alternative to both plutocracy and statocracy. I hope it’s not too late for us.

Comment by reedalberger
2013-12-15 12:52:51

Chris Christie’s only chance at the Presidency would be to run as a Democrat. The bloated authoritarian stands no chance in a TEA party dominated Republican party.

Comment by Ben Jones
2013-12-15 10:05:32

‘Google confirmed on Friday that it had completed the acquisition of Boston Dynamics, an engineering company that has designed mobile research robots for the Pentagon. The company, based in Waltham, Mass., has gained an international reputation for machines that walk with an uncanny sense of balance and even — cheetahlike — run faster than the fastest humans.’

‘It is the eighth robotics company that Google has acquired in the last half-year.’

‘Under a $10.8 million contract, Boston Dynamics is currently supplying Darpa with a set of humanoid robots named Atlas to participate in the Darpa Robotics Challenge, a two-year contest with a $2 million prize. The contest’s goal is creating a class of robots that can operate in natural disasters and catastrophes like the nuclear power plant meltdown in Fukushima, Japan.’

“Competitions like the Darpa Robotics Challenge stretch participants to try to solve problems that matter and we hope to learn from the teams’ insights around disaster relief,” Mr. Rubin said in a statement released by Google.’

Oh yeah, DARPA is concerned with natural disasters. And Googles spying is just for advertising.

Comment by 2banana
2013-12-15 10:57:22

What ever happened to Google’s “Do no evil” motto?

Comment by AbsoluteBeginner
2013-12-15 13:32:50

Sara Connor?

Comment by Bill, just South of Irvine
2013-12-15 12:04:44

The DOD is not the same DOD of the 80s. No longer concerned with the threat of nuclear annihilation by communism, it has become an arm of thugernment at its worst. The robots will be used for population control of its own citizens. It used to be patriotic to admirer the defense. Now it is like admiring the east Germany special police in the 1970s and early 1980s. More and more American patriots are disengaging their admiration of a “strong national defense.”

The Muslims are not as much a threat as the statism here at home by outr very same government. Manufacturing tension to get more people to gullibly give up liberty.

Comment by AbsoluteBeginner
2013-12-15 13:20:37

Greatest country on the planet. First World Problems R US. Love it or leverage it.

Comment by Housing Analyst
2013-12-15 13:52:34

Bills massive hammer hit nail head perfectly.

Comment by reedalberger
2013-12-15 12:56:48

So when will skynet become self aware?

Comment by scdave
Comment by Strawberrypicker
2013-12-15 12:32:10

Anyone who is interested in this might also like the tv show Continuum (available on Netflix), it deals with this in a nice scifi way, what the future becomes once the government goes broke and the corporations take over and do away with the rights of citizens.

Comment by RioAmericanInBrasil
2013-12-15 11:08:58

Now this is “rich”, and shows what perverse results arise from following Trickle-down/Reaganomics (Funneling all our wealth to the rich) for over 3 decades. Here we have Mitt Romney’s old company Bain and Company fretting on how there is “too much money” in the world and how the very few who have too much money can get around this “problem”. The report came out about a week after the 2012 election. Can you imagine if it would have come out a month earlier? The title: “A world awash in money”. But where is all this money that the world is “awash” in? In the average American’s pocket’s as we were promised if we cut the rich’s taxes and deregulated as per supply-side economics? I think not. We are still waiting for the Trickle-down.

It also talks a lot about the endless bubbles that arise from this “too much money” in the hands of the very few.

A world awash in money
November 14, 2012 Bain and Company report

Introduction: The world of capital turned upside down

Global capital markets have been in a state of turmoil since the financial collapse in late 2008. Ongoing intervention by fiscal policy makers and central banks to stimulate growth since then has heavily impacted equity and bond markets and depressed benchmark interest rates in many markets to historic lows. The turbulence has left senior corporate executives, institutional investors and financial intermediaries looking to allocate capital in a quandary: After the crisis has passed, will familiar capital market conditions once again reassert themselves? Or will markets settle into a new pattern that will require major shifts in investor behavior?

….What does a world that is structurally awash in capital look like—and what will it mean for businesses and investors? The most immediate effect has been to paralyze, confuse and distort investment decisions. Large financial flows are creating dangerous pockets of excess capital in some places, while simultaneously cutting off access in other places where risk premiums are prohibitively high.

….Prepare for bubble risks. Capital superabundance will increase the frequency, intensity, size and longevity of asset bubbles. The propensity for bubbles to form will be magnified as yield-hungry investors race to pour capital into assets that show the potential to generate superior returns. Because the global financial system has grown so large relative to the underlying economy, asset values can quickly reach unsustainable levels and remain inflated for months or years, tempting businesses to commit resources in pursuit of unachievable returns.

Comment by Strawberrypicker
2013-12-15 12:34:18

Can you imagine if it would have come out a month earlier?

Can you imagine what would have happened if the truth about Messiahcare would have come out a month before the election?

If you want your liar, you can keep your liar.

Comment by Housing Analyst
2013-12-15 13:51:11


Comment by Hi-Z
2013-12-15 14:37:02

Our left wing propagandist is back.

Comment by Housing Analyst
2013-12-15 14:14:38

Hey Lola The LIEberal…… How many frequent liar miles have you accumulated?

Comment by Bill, just South of Irvine
2013-12-15 21:08:21


Comment by phony scandals
2013-12-15 16:06:53

Nazi Counterfeiters and the Fed

Economic law applies regardless of political circumstances

Tim Kelly
December 15, 2013

What is the fundamental difference between the SS pumping “liquidity” into the British economy via black markets in the 1940′s and the Federal Reserve pumping “liquidity” into the US economy today?
During the Second Word War, Germany devised a secret plan to undermine the British economy by flooding the country with counterfeit Bank of England notes.

Codenamed Operation Bernhard, in recognition of its mastermind, SS Major Bernhard Krüger, the plan involved a team of 142 counterfeiters, drawn primarily from the inmate populations at Sachsenhausan and Auschwitz concentration camps. Beginning in 1942, the dragooned engravers and artists worked feverishly, forging huge quantities of £5, £10, £20, and £50 notes. By the time of Germany’s surrender in May of 1945, the operation had produced 8,965,080 banknotes worth a total value of £134,610,810, an amount exceeding all the reserves in the Bank of England’s vaults.

The original plan called for the dropping of the forged notes from aircraft flying over Great Britain in the expectation that they would be picked up and eagerly circulated but that part of the scheme was never put into effect. By 1943, the Luftwaffe lacked the capacity to deliver the “economic weapon” in sufficient quantities and the operation was taken over by SS foreign intelligence agents who laundered the counterfeit currency, using it to finance their own espionage activities and pay for strategic imports.

Although Operation Bernhard failed to meet its primary objective (the collapse of the British wartime economy), it was successful in flooding the European black markets with counterfeit pounds, thus undermining confidence in Britain’s currency abroad, and causing its value to plummet.

The Nazi plot may have been the most ambitious counterfeiting racket in history but it pales in comparison to the recent exploits of the world’s central banks, especially those of the Federal Reserve.

The Fed is currently creating, ex nihlio, more than a trillion dollars a year and using the funny money to buy U.S. government debt and mortgage-backed securities and then taking them out of circulation. These purchases have propped up the bond market and kept banks solvent. But they have also caused the Fed’s balance sheet to quadruple, growing from just under $1 trillion in 2008 to nearly $4 trillion today.

And there appears to be no end in sight to the reckless money creation. Janet Yellen, a “monetary policy dove” by all accounts, is about to be confirmed by the U.S. Senate as the next head of the Federal Reserve. Were Messrs. Bernanke and Greenspan “monetary policy hawks?”

Now if a Nazi plot to flood Great Britain with counterfeit currency was a considered a serious threat to that nation’s economy, what are we to make of our own central bank’s policies? What is the fundamental difference between the SS pumping “liquidity” into the British economy via black markets in the 1940′s and the Federal Reserve pumping “liquidity” into the US economy today?

The answer, of course, is there really is no difference. Economic law applies regardless of political circumstances. If you print money faster than the rate of production, you will have more money chasing fewer goods and sooner or later you will have price inflation. It really is just that simple.

An important distinction, however, between the Nazi counterfeiting scheme and the Fed’s current monetary policy is that the US dollar is still the dominant international reserve currency. This “exorbitant privilege” enables US monetary authorities to engage in periodic devaluations without being immediately confronted with a balance of payments crisis or domestic price inflation.

Right now the Fed’s inflationary policies have yet to show up in the Consumer Price Index though there are those who claim the rate of price inflation has been purposely understated by the US government. And indeed consumer prices have gone up in the last five years.

It should also be taken into consideration that the consequences of currency devaluation can manifest themselves in ways other than overt sticker shock. For instance, producers anticipating consumer resistance to price inflation can reduce the quality or quantity of their goods rather than raise prices. This is happening today as many products are now being packaged in smaller amounts yet are being sold at the same price.

Moreover, when you’re measuring price inflation, your baseline is crucial to your analysis. Absent intervention by the US government and the Fed, the Crash of 2008 would have precipitated widespread deflation. This did not happen as the US Treasury and central bank pumped in trillions of new dollars to arrest the panic. The new money has created relative “price stability” in the past few years but this itself is evidence of inflation because otherwise prices would have fallen.

And we can look at bond prices as evidence of inflation. The bond market is an enormous bubble that has been intentionally created by the Fed in order to forestall the inevitable reckoning for decades of overspending by the Congress.

That said, the dreaded hyperinflation that many predicted would happen has yet to occur. Why?

It appears the inflationary deluge is being held back by the Fed’s policy of paying banks not to lend money. Boston University economist Laurence Kotlikoff elaborated on this very point in Forbes last September. He wrote:

But why haven’t prices started rising already if there is so much money floating around? This year’s inflation rate is running at just 1.5 percent. There are three answers.

First, three quarters of the newly created money hasn’t made its way into the blood stream of the economy – into M1 – the money supply held by the public. Instead, the Fed is paying the banks interest not to lend out the money, but to hold it within the Fed in what are called excess reserves.

Since 2007, the Monetary Base – the amount of money the Fed’s printed – has risen by $2.7 trillion and excess reserves have risen by $2.1 trillion. Normally excess reserves would be close to zero. Hence, the banks are sitting on $2.1 trillion they can lend to the private sector at a moment’s notice. i.e., we’re looking at an gi-normous reservoir filling up with trillions of dollars whose dam can break at any time. Once interest rates rise, these excess reserves will be lent out.

But, and this is point two, other things aren’t equal. As interest rates and prices take off, money will become a hot potato. i.e., its velocity will rise. Having money move more rapidly through the economy – having faster money – is like having more money. Today, money has the slows; its velocity – the ratio GDP to M1 — is 6.6. Everybody’s happy to hold it because they aren’t losing much or any interest. But back in 2007, M1 was a warm potato with a velocity of 10.4.

If banks fully lend out their reserves and the velocity of money returns to 10.4, we’ll have enough M1, measured in effective units (adjusted for speed of circulation), to support a nominal GDP that’s 3.5 times larger than is now the case. I.e., we’ll have the wherewithal for almost a quadrupling of prices. But were prices to start moving rapidly higher, M1 would switch from being a warm to a hot potato. i.e., velocity would rise above 10.4, leading to yet faster money and higher inflation.

So, if commercial banks began lending at a rate resembling the historical norm, we would soon be experiencing hyperinflation. That is hardly a comforting thought. I suppose the only saving grace at that point would be in an economy already laden with massive debt, there might be very little demand for more credit and thus the money multiplier effect may not kick-in, at least not with the vengeance foreseen by Mr. Kotlikoff.

The Fed’s massive intervention into the market has been defended by the usual Keynesian suspects as a necessary measure to spur economic recovery. And yes, the Fed’s overheated printing presses have fueled a stock market boom. Unfortunately, this latest bubble has not lifted the real economy which remains in the doldrums. Private sector investment remains low and unemployment high.

The problem with this situation is the moment the Fed takes away the easy money, the market will collapse. Indeed, we have reached a point where just the suggestion of the Fed “tapering off” sends financial markets into a panic.

So the Fed has painted itself, and the entire U.S economy, into a corner. There is no way the Fed can stop creating money and liquidate its bloated balance sheet without reaping a deflationary whirlwind. And with an economy addicted to perennial trillion-dollar budget deficits and consumer debt, the political will to stomach such a painful yet necessary correction is not likely to be manifested anytime soon.

Vladimir Lenin is reported to have said, “the best way to destroy the capitalist system is to debauch the currency.” He was right. So why is the Fed following the advice of a deceased communist revolutionary?

No, I don’t think it is because the Federal Reserve Board has been infiltrated by communist moles, or Nazi agents for that matter. Although it is difficult to imagine commie saboteurs doing more damage to the U.S. economy than the monetary commissars now in charge at the Eccles building.

Perhaps the famed economist and alleged Fabian socialist John Maynard Keynes provided the answer when he wrote:

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

That ratio has probably improved somewhat lately. A greater portion of the public appears to be catching on to the Fed’s monetary sleights of hand. The increasing demand for physical gold and silver as well as the various state initiatives to re-monetize those precious metals are auspicious signs of such an awakening.

Comment by azdude02
2013-12-15 16:24:23

that was quite interesting.

the CPI is a joke.

inflation is a strange beast. It seems to happen a lot more in the products or services you really need the most. look at healthcare and energy for instance. They have pricing power. whereas a gallon of milk I can simply stop buying.

as far as housing goes:

Drive away from CA until you qualify!!!!

Comment by Housing Analyst
2013-12-15 18:02:48

Just drive away from CA like everyone else is doing……. It’s a God foresaken, crime ridden poverty pit.

Comment by Bill, just South of Irvine, CA
2013-12-15 19:44:06

Many people here enjoy the Kool Aid too much to leave.

(Comments wont nest below this level)
Comment by Bill, just South of Irvine
2013-12-15 16:49:25

The war on terror is not a war against radical Muslims who blow themselves and innocent people up.

The war on terror is a war against that terrifying idea of traditional American freedoms. Conservatives have taken the bait for wanting security in exchange for their freedoms and the freedoms of their neighbors.

The same thing is said for the war on drugs.

Manufacturing threats is a win-win for statists.

Comment by Ben Jones
2013-12-15 18:22:22

‘Conservatives have taken the bait for wanting security in exchange for their freedoms’

It just shows how simple minded most people are. Bush was president, “conservatives” say let’s support whatever the heck he says. (BTW, don’t forget those 90% approval ratings). Then as his wars fell apart, man we saw those “liberals” hit the streets. No more war, stop the warrant-less wiretaps, close Gitmo, etc. I really thought we were seeing a coalition of freedom loving people.

In rolls Obama, the war on “terror” (that everybody made fun of under Bush) is suddenly escalated. More drone killings, more wars, spying, assassinations. Where is the “anti-war left”? Some of them are here, saying, “oh the drones aren’t so bad. Spying is here to stay, get used to it.” I can’t imagine what their excuse is for Gitmo or staying in Afghanistan UNTIL 2024!

None of this is going to change until enough people stop playing the red-blue game.

Comment by Bill, just South of Irvine, CA
2013-12-15 18:41:32

Myself and other Obama critics have kept asking where is Cindy Sheehan, who vocally prostested Bush. Yet many anti-Obama types did not even look for themselves. In this 2011 piece, she basically considers Obama an “evil emperor.” She recognizes that she would be called a “tea bagger” or “racist” for opposing Obama’s war policies.
She realizes the Democrat Party who helped her protest against the wars under Bush have now fallen silent.

Comment by Prime_Is_Contained
2013-12-15 23:26:31

Myself and other Obama critics have kept asking where is Cindy Sheehan, who vocally prostested Bush.

Yeah, Cindy Sheehan is one of the few who deserves some credit. She’s getting zero coverage from the press now (interesting, no?) but her message is still the same, unwavering. Contrast that with the rest of the anti-war contingent that went silent the instant Obama was elected…

(Comments wont nest below this level)
Comment by phony scandals
2013-12-15 17:53:44

Lucy, you got some `splainin` to do!

Name (required)
E-mail (required - never shown publicly)
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post