Iceland Shows The World

This would have been the perfect gift for the country to give to its people on the joy of the season……start putting the thieves that work at banks in prison…….wishful thinking I know but at least one country has done the right thing…….(read on)…..

There has been lots of mumbling and grumbling about what the bankers were allowed to get away with when they caused the economic meltdown of 2008……..they have made obscene bonuses and still walk among us even after about 50% of the population lost lots of their coveted nest egg that they were depending on for a comfortable retirement….the American Dream was crapped on by the banks and the thieves they employ……some Americans have called for these crooks to be jailed for they basically robbed the population of their funds….but so far they got bigger bonuses and are not help responsible for their actions…….what to do…..what to do?

The small island country of Iceland has shown the world what should be done to these cons……

(Newser) – Iceland has done something highly unusual with some of the bank chiefs blamed for the country’s 2008 financial collapse: put them on trial and sent them to prison. Four former Kaupthing Bank bosses have been sentenced to between three and five years for market abuses relating to a deal where a Qatari sheikh bought a confidence-boosting stake in the bank with money that had been provided by the bank itself, the BBC reports.

Prosecutors said the loans, made soon before Kaupthing collapsed under massive debts, were made solely to boost the bank’s share price, reports Reuters. The bank’s former chief executive and chairman of the board received prison terms, along with one of its majority owners and the chief of its Luxembourg branch. The sentences are the heaviest Iceland has ever handed down for financial fraud, but prosecutors say a bigger case against Kaupthing is in the works

And that my friends is how you hold con artists responsible for their actions……America should follow suit….but NO…we fine them and let them return to the actions they were doing that caused the economic collapse……where is the logic here?

Do You Know What happened In 2008?

Yes, I am talking about the crash and the ensuing recession, the unemployment, foreclosures and the tune continues…….you may know that your 401k is not worth the paper it is printed on…..but do you know just how the crash happened?

I am guessing that most Americans either do not know or maybe they just do not give a crap……but if you are truly interested in educating yourself on how you were screwed….then by all means read on…….if not then maybe a good episode of “Jersey Shore” that teaches a lot about life is on MTV….if you do not care enough to learn what happen then keep thy mouth shut when it blows up again….and make NO mistake ….IT WILL!

A very good explanation has been written by Zeus Yiamouyiannis……..

Here is how the counterfeit value derivative con works.  It’s a game of “I pretend, you pretend, we all pretend, and the taxpayer will pay in the end”.

1) I’ll create an instrument, say a credit default swap (CDS), an unregulated insurance with no capital requirements, with a certain “notional” value. Notional value is just something I assign. It does not have to be attached to or backed by any real asset or actual money/principal, but I can pretend as if it is. (Notional amount.)

2) As a seller, I will just declare that this swap covers the full value X of this company, contract, etc. if credit event Y happens. I receive lucrative insurance premiums and fees for my unbacked promise. The CDS’s value is based in nothing more than my promise to pay. I don’t have to have adequate capital reserves on hand, but I can pretend as if I do perhaps with some mini-reserves based on objective-seeming risk ratios calculated by my mathematical models. (credit default swap.)

3) As a buyer, you can then buy as many of these CDS’s as you want, even for a single default. If you are really sure something is going to tank you can insure it 30 times over (or a 100 or 1,000) and get 30 (or 100 or 1,000) times the return when it goes bust! In regulated insurance it is unacceptable to insure beyond the full replacement value of the underlying asset. Not so with CDS’s. The seller has gotten 30x the premiums and the buyer gets 30x value in the event of default. As a buyer of this phony “insurance” you don’t have a stake in the affected properties, but you can essentially pretend you do.

4) As buyer and seller of CDS’s either one of us can assign our risks to a third party through another contract, and pretend as if we are covered in case our own game playing blows up in our faces. This allows us to retain even less reserve capital and spend freed-up funds on more high-risk, high-(pseudo) return speculation. (The monster that ate Wall Street.)

5) We can purchase and sell of these derivative contracts to each other at unlimited rates to generate massive volume and huge fees and profits. We can simply hyper-cycle risk and take our chunk each time.

According to the Bank of International Settlements, as of June 2011 total over-the-counter derivatives contracts have an outstanding notional value of 707.57 trillion dollars, ( 32.4 trillion dollars in CDS’s alone). Where does this kind of money come from, and what does it refer to? We don’t really know, because over-the-counter derivatives are not transparent or regulated.

Read More…

The answer to your questions are not as difficult to understand as the msm and the economists want you to believe……..once you learn the facts then you can keep your bank and brokers in check….that is if you really give a crap……and Dodd-Frank is a blowjob….it does little to keep the financial sector from gaming the system again and causing another meltdown….personally, I want to see someone go to prison because of what has been done to the economy and beyond that I want to make sure these con men cannot either game the system again so that we, the taxpayer, give them an out…..let them ROT in their own deceitfulness!

On State Capitalism

College of Political Knowledge

My readers know that I spend an inordinate amount of time trying to explain and make complex theories more palatable to the average working stiff…..and I hope that I succeed in some small way so that we all can make more informed decisions in our political thinking……

State Capitalism?  Now there is a subject that would make a person’s eyes bleed or the head explode….we can either look at it as some secret code word for socialism (not necessarily so) or we could talk about the government programs…….it conjurers up some many images for people….but what is it really?  State capitalism, that is.  I am sure that most people already have a preconceived idea of what socialism is and that is the subject for yet another post….

State capitalism simply put is….the idea of combining state funded projects and state regulation of the market with private ownership and profit taking…..if you think about it it sounds a lot like what we have now only on a limited basis…..

Now with that under our belt….state capitalism can impose regulations on labor and generate a bunch of it, especially when capitalists are reluctant to invest  (sound familiar?)…….it can encompass private financial gain with an overview of the needs of the country as a whole….(still sounding familiar?)…..In really bad economic times…it can motivate and stimulate local investment when other markets look more inviting to the private investors…..(once again, familiar?)…..

Let’s be real……state capitalism can be a far more effective way of dealing with a bad recession or depression than traditional liberal capitalism……

And yes, we can associate state capitalism most often with some form of dictatorship….however in dire economic times it may just be the best way to fight a recession or a deep depression….you want an example?  Then look no further than Germany after WW1…here we are talking about economics and not the political theory that we all detest……because of direct government spending in infrastructure and industry….Germany was the first country out of the Great Depression…..

You may not like the idea….but think about it hard….how else will we pull ourselves out of the economic funk we live in today?  Sorry to pee on their parade….but spending cuts and tax breaks will NOT bring the US out of this making of our demise……and is it not government’s purpose to insure the country has a strong economy?

The Land Of Hungry Children

You have heard of the Land Down Under or the Land of the Free or possibly the Land that Time Forgot…..but there is another that is NOT reported so much by the mainstream media….poverty and hunger in the US….with all the crap that the economic collapse has given us there is one that is NOT acceptable, at least in my way of thinking……child poverty!

Black listed news was compiled an excellent list of horrible consequences……

#1 Child homelessness in the United States is now 33 percent higher than it was back in 2007.

#2 According to the National Center on Family Homelessness, 1.6 millionAmerican children “were living on the street, in homeless shelters or motels, or doubled up with other families last year”.

#3 The percentage of children living in poverty in the United States increased from 16.9 percent in 2006 to nearly 22 percent in 2010.  In the UK and in France the child poverty rate is well under 10 percent.

#4 A higher percentage of American children is living in poverty today than was living in poverty back in 1975.

#5 The number of children living in poverty in the U.S. has risen for four years in a row.

#6 There are 10 different U.S. states where at least one out of every four babies is born to a family living in poverty.

#7 Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.

#8 According to the National Center for Children in Poverty, 36.4% of all children that live in Philadelphia are living in poverty, 40.1% of all children that live in Atlanta are living in poverty, 52.6% of all children that live in Cleveland are living in poverty and 53.6% of all children that live in Detroit are living in poverty.

#9 In the United States today, more than 35 percent of all African-American children are living in poverty and more than 33 percent of all Hispanic children are living in poverty.

#10 There are seven million children in the United States today that are not covered by health insurance at all.

#11 Today, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps.

#12 It is being projected that approximately 50 percent of all U.S. children will be on food stamps at some point in their lives before they reach the age of 18.

#13 In 2010, 42 percent of all single mothers in the United States were on food stamps.

#14 There are 314 counties in the United States where at least 30% of the children are facing food insecurity.

#15 In Washington D.C., the “child food insecurity rate” is 32.3%.

#16More than 20 million U.S. children rely on school meal programs to keep from going hungry.

These show the extent of how bad the recession is on the kids….yes, it is bad for everybody (with the exception of Wall Street) but how bad does it have to get to force our politicians to face this problem?  I thought children were our future, if so the future is pretty damn bleak!

We have an election coming up soon……now would be a good time to show your distaste for the policies coming out of Washington……

It’s The Economy, Right?

I was watching CNBC the other day and the anchor got all bubbly because the market went up over 100 points and the GDP figures were in and it expanded by 2.5%, which is pretty good since the last two quarters sucked bad…..

The US’ total economic output shot up 2.5% from July through September, after two dismal quarters of rising just 0.4% and 1.3%, according to a new GDP report released today. Consumers amped up their spending on both durable goods and services, and business investments soared 16.3%—indicating that we may not be in for a second recession after all.

The numbers were also boosted by federal government spending, though drops in state government spending dampened that effect. And there’s some more moderately positive news: New jobless claims fell 2,000 this week, after dropping 7,000 last week. But that still leaves claims at 402,000—economists think claims must fall below 400,000 for job growth to outpace job losses.

All the pundits are jerking off at the news….but there is still no jobs!  There are still millions of Americans that are unemployed!  Then for whom is all this good news?  Apparently, investors and by investors I mean hedge funds and by hedge funds I mean the same thieves that help tank the economy in the first place……those figures will be seasonal adjusted……which means in the final analysis….it will NOT be as good as they want it to be….

Let’s review……..0.1% of the population controls 34% of the country’s wealth, and owned as much much money as the bottom 42%.  Corporate profits are up by 62%, and the earnings of the top percentage almost doubled, while the average raise for workers only rose about 9%.  The Prez and the Congress gave massive tax cuts and even the Supreme Court got involved in politics………(pause here to re-read)……Wait!  That was the crash of 1929, not 2008!  And just like 1929 the economic crisis spread worldwide…..

My point here that all this has happened before and for the same reasons, well almost the same reasons, The Prez was Coolidge in1926….and the Supreme Court got involved in the process by ruling the minimum wage law was unconstitutional (they were controlled by business kinda like today and the ruling in the “People United” thing)…..why allow the same things to occur over and over and do nothing to change the vicious cycle?

And just like the crisis in 1929….Tax cuts and deficit debate will do NOTHING to repair the failing economy…..Bold new ideas must be found and I do not see that possible with a Congress owned by special interests….and yes…that could mean a bit of socialism….

I suggest if you truly want change then find another path….they are there…you just have to want it!

Small Busisness To The Rescue

I hope that people are listening………I am sorry to be redundant but……..

Just how many times have you heard the crap from the GOP and from the president?  Small business creates all the jobs in this economy…..I have tried to help the people realize what a pile of bovine fecal matter the politicians are handing you….they are force feeding you erroneous information….and now it is not just me that is telling the voter what crap it is but Bloomberg’s Business Week…….

While extolling small business “might be a good way for politicians to win elections,” Bloomberg Businessweek notes that “the notion that small business is the force behind prosperity is not true.”

“Most small employers are restaurateurs, skilled professionals or craftsmen (doctors, plumbers), professional and general service providers (clergy, travel agents, beauticians), and independent retailers. These aren’t sectors of the economy where product costs drop a lot as the firm grows, so most of these companies are going to remain small.”

Read the article closely……..learn what is meant by small business….to the politicians they want you to believe that an oil company that employs a 1000 workers with $7 million in income is somehow a small business….not so!

The Little Engine That Could

Today is one of my days of Zen, but I feel that I must for go those days because of the events in the past week demands that I stay on topic…….hopefully I can return to my whimsical posts on the weekends that have very little to do with the politic doings of the week…….bear with me for I am a sick puppy…….

We have heard both sides of the jobs debate calling the engine of the recovery will be small businesses….that any taxes will harm the recovery and kill those small businesses……and we cannot have that….now can we?  And then there was Obama’s new proposal to give tax cuts to small businesses that hire new employees…….

When you hear Obama or his opponents, the Repubs, mention the small businesses….what do you think of?  (pause here for a moment or two for thought)………I would bet that you think of that Mom and Pop grocery store on the corner of Main and 5th…..or maybe it is that cute little bakery in the walking mall……or how about that liquor store on the way home that you get relief from the day’s hassles… I close?

All in all you would be close but unfortunately….NO CIGAR!  Yes Mom and Pop would be a small business….but then according to the SBA so would a cigarette maker that employs 1000 people……I know…..huh?

The SBA Act also states: “…a small business concern is one that is independently owned and operated and which is not dominant in its field of operation.” Size standards vary by classification. The average standards, by occurrence in the SBA table, are 500 employees or $7 million a year in sales. A very general rule-of-thumb is the size of most manufacturers and wholesalers is determined by the number of employees while the size of the remaining businesses are determined by yearly receipts.

So you see about 90% or more of the companies in this country can be considered small business, as per the SBA definition……so when the Repubs talk about helping small business they are really talking about the larger companies… see….they are lying!  And when Obama talks about the tax cuts and incentives to get small business to create jobs…..he is talking about larger companies…..for they both know that a true small business doing its part even in this recession…..what they need is to help the larger companies enhance their profits with the hope that if they do that that they will hire a few people……

In closing… is a play on words… is a scam!  They are only helping those that can help them.  Mom and Pop are just the hook to get you to side with the larger companies…….it helps them sound like they are on your side…..but that is a lie!  It is ALL a lie and the sooner you realize that, the sooner we can start doing something about all the BS from Washington…..

Another Economic Hit Approaches

My thinking was that the ratings would be lowered……and this post was going to be about that…..but the bastards best me to it…….oh well….onward and upward.

I wish that I had better news…..I hate being that guy that seems to always delivers the crappy stuff….but I do what I must to help people see what is coming…….

The economy is in the toilet….so it cannot get any worse, right?  Wrong again!  It will soon get a lot worse and this time it will be again on the backs of the unemployed……Washington is doping the spending cut two step and there is an economic storm approaching….NO!  This time it is not he debt or the debt ceiling……..but rather the stopping of the unemployment benefits……I know…I know……I can suck the fun out of the party…..but forewarned is fore armed…….

This from Yahoo News…….

At the start of 2012, the extended unemployment benefits approved by Congress in December 2010, which cover a maximum of 99 weeks per person, will expire. Though the benefits are hardly lavish–a little more than $300 a week for most recipients–their total impact on the economy is huge, because so many Americans are currently taking advantage of them. Moody’s Analytics estimates that when the benefits expire, $37 billion will be taken out of the economy, the New York Times reports. That’s enough to exert a significant slowing effect–at a time when the recovery is already a long way from robust.

Government benefits that go to poorer Americans, like unemployment insurance, tend to boost consumer spending more than other kinds of stimulus, because people living paycheck to paycheck have little choice but to spend the money, rather than saving it. So the disappearance of jobless benefits will take money out of circulation when economic growth is seeking to gain some traction.

Indeed, economists say that the withdrawal of jobless benefits will create a major ripple effect on growth as a whole. Consumer spending accounts for around 60-70 percent of U.S. economic activity, economists say. But with so many Americans having lost wealth in the housing bust, spending has been tepid for a while, preventing the recovery from gaining any momentum. Now, the end of the extended benefits will likely soon put a further crimp in spending.

Oh crap!  It cannot get much worse, huh?  Nope!  And how will our cowards in Washington handle this new crisis?  I know that at times I can be a bummer and I see boogey men behind every bank account….but so far I have been pretty accurate in my concerns….

And then there is Cantor, the House majority leader who said to Jim Kramer…..

CANTOR: Jim, the most important thing we can do for somebody who’s unemployed is to see if we can get them a job. I mean, that’s what needs to be the focus. For too long in Washington now we’ve been worried about pumping up the stimulus moneys and pumping up unemployment benefits and to a certain extent you have states for which you can get unemployment for almost two years and I think those people on unemployment benefits would rather have a job. So that’s where our focus needs to be.

So if you are unemployed you will most likely be one the chess pieces in a debate in the House and if all goes like it did with the debt debate…..YOU ARE SCREWED!

Would You Like A Double Dip?

I wish my question was about a visit to Ben and Jerry’s…..but unfortunately it is not but rather a crashing economy…….the debt deal has been made and it will involve tax cuts, spending cuts, balance budget and NO revenue…….and I am old enough to ask….where have I heard all this before?

But what do the people think about all the wheelin’ and dealin’?

A new USA Today/Gallup poll finds 39% of Americans approve of the debt ceiling agreement that President Obama signed into law this week with 46% opposing it.

Key finding: Only 33% of independent voters approved of the deal, while 50% disapproved.

First Read: “But if you want evidence that conservative opinion leaders (Limbaugh, Red State, DeMint) might have more sway over Republicans and conservatives than liberal opinion leaders (Krugman, Daily Kos, Bernie Sanders) have over Democrats and liberals, check out these numbers. According to the poll, 64% of Republicans and 64% of conservatives opposed the deal. By comparison, 58% of Democrats and 51% of liberals supported it. Bottom line, at least per this poll: More Democrats and liberals sided with Obama. than with the liberal opinion elite.”

But let us get back to where I have heard all this BS before?

In 1937 the Roosevelt administration attempted to balance the federal budget by curtailing public works and cutting relief employment programs, while the Federal Reserve limited credit and reduced the money supply to prevent a resurgence of inflation. These actions weakened the economy, which already suffered from a lack of business confidence, and a severe recession ensued after the stock market plunged steeply on 7 September 1937. Over the following nine months, manufacturing employment fell by almost a quarter, industrial output by a third, the stock market by half, and profits by over three-quarters. By June, as the economy began to revive, 4,000,000 workers had become jobless. A major reason for the upturn in business activity was a greater willingness to use budget deficits for economic stimulus……….Geez all that sounds darn familiar, huh?  By all means Google this and see if I lie…please…do not take my word for it!

Everybody has claimed victory in the new debt deal…….the truth is these twats are just repeating the mistake made in 1937…..and that was a disaster…..and guess what?  This will be also!  The use of budget deficits is a proven solution for a recession……regardless of what Tea baggers want you to believe……….recent activity or the lack thereof, on Wall Street shows the reader that all is NOT well with the American economy…..and to keep playing moronic, childish little games will do NOTHING to help the country…it will NOT create demand and without demand….we have NOTHING!

A Double dip?  This from the Economist magazine…..

WALL STREET is betting on a double-dip recession.

All financial-market signs now point to a return to economic contraction. The S&P 500 has dropped 9% in two weeks. American government borrowing costs are plummeting, which could conceivably be construed as a result of increased confidence in America’s finances in the wake of the debt-ceiling deal, except for three things: 1) the deal didn’t fundamentally improve America’s finances, 2) equities are tanking, and 3) so are inflation expectations. Yesterday afternoon, yields on inflation-protected Treasuries signaled a 5-year expected inflation rate of about 2.08%. That has since fallen to about 1.86%. The yield on 3-month debt is back to 0.0%, the yield on the 30-year Treasury is 3.79%, and 10-year yields are back to levels observed last August, which prompted the Fed to engage in QE2. Commodities are dropping like rocks.

If Washington continues down this road…that would be the road that that darn pesky can is on…….we have nothing to look forward to but More Economic Misery……..don’t you just love this crap?

But wait, sports fans….there is more observations….this one from Newser……..

Economists say we could be headed for a second recession—and if they’re right, it’s poised to be even more devastating than the first, writes Catherine Rampell in the New York Times. That’s because the starting point for the second dip would be our current weak economy, and this time, policymakers have little room to fix things. Consumers don’t have much fat to cut, either—they did that already—meaning families would have to “cut from the bone.” Other signs round two would be a doozy: Consumer spending hasn’t grown; industrial production is down 8% compared to December 2007; and while the civilian working-age population has grown about 3% since 2007, there are 5% fewer jobs for it. Interest rates can’t go lower than their current zero, and Washington lacks the financial and political means for another stimulus. Finally, “and perhaps most worrisome,” is the fact that the economy is smaller now than it was at the beginning of the recession.

This country is in deep trouble……as long as we allow idiots to run the country and shape economic policy….the deeper the recession will get and the harder it will be to pull out of it…..