Thought I'd post some recent snippets from a fellow I used to read/converse with on a market forum. I just love his style (not hard to tell his german heritage), and if I had any money, I would sign up for his trading service.
http://marketrant.blogspot.com/
USRant: Isn't This Just The MOST Fun?
Although I am on record as declaring that the Euro zone is fundamentally sounder than the US, you should not then assume that I think that Europe is well run, dearest Reader. The Euro will outperform the dollar simply because the friction between nations in Europe will prevent the politician-parasites from interfering too much; contrast that with the US, where Jefferson's Nightmare is coming to fruition... a standing army deployed domestically, a central bank that fulfils the whims of the banksters, and a government dominated by sectional (party) interests. All things against which Jefferson warned... but it seems that Hamilton (and Lenin) won the longer-term ideological battle: this will eventually bankrupt the US and cause its utter ruin.
Now jsut because the US is doomed, does not mean that Europe is not a basket case as well.. it's just less of a basket case. Charles Manson and Jeffrey Dahmer are both nutters - but they have different screws loose.
Virtually every economy in the Euro zone will soon fail to comply with the 'stability pact' - they will all be outside their agreed bands on either external imbalances (the ratio of trade deficit to GDP) or government finance (the ratio of government deficit to GDP and the ratio of the public sector borrowing requirement to GDP). Nobody is making much noise about that.
That's how politicians expect to be able behave - a 'pact' is only a pact if it can be adhered to without genuine discomfort; a promise is a statement to be discarded whenever it becomes inconvenient.
It's a bit like the idea that the law of Contract is important, or the idea that people should pay their debts. Both are true, but neither apply to government if the government decides otherwise.
In other words, politicians expect their herds to be upstanding (and threaten them with hordes of armed goons if the herd misbehaves), but the political class themselves view any constraint on their own behaviour as (a) non-binding; and (b) something to be 'got around' either by smart-arse weaseling or by appointment of friendly judges to various benches.
Ask yourself what you would call it if a person had a relationship in which they were forced to accept a specific service, under threat of kidnap, imprisonment and - if they sought to defend themselves - DEATH.
Now assume also that whatever it is they were forced to accept could be bought at a lower price in the marketplace, but they were forced nonetheless to pay the higher price. In fact, when all things were taken into account, fully half the income of the average individual was forcibly extorted by the 'supplier'.
Furthermore, the suppliers of this forced consumption at excessive prices could also force consumers to kit up to fight turf wars between similar suppliers. And the costs of these pissing contests would be borne by... you guessed it - the consumer.
What would you call such a situation? You would call it either slavery, or a Mafia protection racket. Politicians call it "government".
And that is why, dear Reader, any right-thinking individual will conduct a personal pogrom against every politician that crosses their path. They are not like us - they are not members of the species homo sapiens sapiens; they are a parasitic subspecies that must be made extinct if humanity is to make any genuine progress.
Now I'm not a nasty guy - although I have often mentioned that in my view 'an eye for an eye' does not go far enough; aggressors need to face a highly asymmetric response (thus my motto: "hurt The Lovely, get gutted").
There are very very few species on Earth that I would willingly wipe out if given the chance: guinea worms, leeches, ticks, lice, and politicians. See the pattern? All of them are parasites that do no good whatsoever to their hosts - the relationship between these species and their hosts has no genuinely symbiotic element whatsoever.
I could spend time writing colourful prose about how, in the name of Liberty (and backed by 100% of my constituency - me) a trial was held and - after weighing the evidence, and consistent with the laws that were promulgated (again, backed by a 100% mandate from my constituency - me), all politicians were found guilty of crimes against my constituency (me), and, after full consideration of their lack of remorse, the guilty were condemned to a punishment as laid down in the laws as promulgated by my representative body (my Parliament, which has one member who was elected with 100% of the popular vote). That punishment being "death by whatever means presents itself, at any time and place at which the opportunity arises".
And of course , pursuant to GT Law GT/2008-002 of 2008, jurisdiction is universal (land, sea, air, space, dimensions other than the 4 we experience directly) and with no statute of limitations.
What is the difference between that, and the same behaviour undertaken by some jerkoff megalomaniac who claims to represent 'The People', despite having been voted for by a minority of the population?
For example - Sarkozy got 53% of the 67% who voted... 0.57*0.67=35% of the adult population. Obama got 53% of those who voted (66%) - 34% of the adult population.
And don't try this "they got a majority of people who bothered to vote" malarkey... I will counter by saying that "None of the above" is as valid a choice as either candidate. In fact, for people of good will, it is the only valid choice.
Wednesday, November 05, 2008
OzRant: Yes We Can (Gack on the Schmaltz)...
Well, those who took the SPISpy call on the Euro are now sitting on a 3-cent gain (equal to $3000 per contract) - having had to endure a countermove which was flagged as a possibility. Those who chose not to close the short in the SPI are no doubt feeling the pinch, but take it as read that the spike to overbought is not the start of a new bull leg... the silliness we are witnessing in equity markets is simply the washing off of a deep overbought condition: it has washed off more than expected, but we have still not seen any valid configuration that would indicate a bottom.
You'll know when I think the bottom is in - the MM Model Portfolios will have their hedges removed (they have been fully hedged with respect to the ASX200, since the All Ords was at 5800). Needless to say, removing market-wide risk from the portfolios proves to have been an absolute belter of an idea.
AS I said at the time, portfolio hedging is not hard to do - simply short the SPI, or buy SPI puts, until the net exposure on the short side equals the value of your portfolio. This removes market risk, and leave you with a portfolio that will advance so long as your stock selections outperform the index.
Everybody now knows that the non-white guy won the election. So the corruption machine has to change sides (what will Fox News do? it will do what Pravda would have done if the Republicans had won office in Moscow in the 1940s... it will change its tune).
Those who believe in the strong form of the Efficient Markets Hypothesis will now say that the Obama win is now fully priced in.
That's rubbish: the bond market has not priced in a further fiscal loosening, nor has it priced in additional monetary easing. The bond market hasn't even priced in an increase in the riskiness of the Federal Reserve's balance sheet, which is now loaded with toxic sludge. And the USD has not priced in the effects of the massive money printing that has been happening over the last few weeks.
Once that starts to happen, the USD will crater (it has started) but more importantly, the US long bond will head towards 100. It's for this reason that there has been no attempt to take profits on the short position in the 30-year, which is now a month old.
Tuesday, November 04, 2008
USRant: Everything Is Just Too Rosy...
It's funny watching professional auto-cue readers - those who call themselves 'financial journalists'. From Faux News to CNBC to Bloomberg , these folks ride every market wiggle like the worst of the nuffnuffs. They desperately search for silver linings during declines, but advances are accorded some sort of 'state of grace'. Declines need explanations, but advances are just reasons to smile - if only to show off the $5k spent on teeth that now look like a bleached mouthguard.
Couple that with the gallons of peroxide evident among the gazillion presenters who didn't think they looked pretty enough as a brunette, and you have a recipe for some of the most fatuous repartee in human history.
Still - today the story is that some bright spark has managed to show that if you ignore the beginning valuation and choose the starting point judiciously, that Democratic presidencies are 'good for the stock market'.
Oh please. That sort of selective analysis tripe should have joined Abby Joseph Cohen and Tom Galvin in history's trash-heap.
Still, it really does look as if America's parasites will be headed up by a skinny bisexual mulatto, replacing the skinny bisexual inbred we know as Brokeback Cowboy, George the Turd.
Now don't get me wrong - I have nothing whatsoever against bisexuals, or homosexuals or even people who want to have sex with vegetables. I would love a world in which nobody gave a rat's, and it wasn't an issue.
But it is an issue for most mouth-breathers... and if it's an issue, you ought not hide it (as 'Dubya' has been doing with his silly Village People cowboy schtick) - he ought to have declared his love of wearing makeup openly, and let folks decide if they still want you to lead.
Can you imagine what will happen to Carlyle's stock price if they accept Dubya into their ranks? Can you imagine anybody being prepared to employ him (except to aid research to show that people shouldn't breed with their cousins)?
Anyway... go back a bit further in history and include a few more Democratic administrations, and you will find that it makes absolutely no difference which party is in power. Beginning valuations matter, and valuations right now are not good - and prospects are for earnings to continue to fall (making valuations even worse).
The US market just touched overbought today, and in all likelihood will test the previous bounce high (set less than three weeks ago). But it's not going higher for any length of time worth measuring.
Monday, November 03, 2008
USRant: One More Sleep...
Only one more sleep before the GOP machine tries to steal another election. I still think that the skinny bisexual black guy will beat the failed pilot war criminal who collaborated with the Viet Cong, but it depends critically on what the Republicans think they can get away with. As Stalin once said, it's not important that people have a vote - it's important who get to COUNT them.
If Obama manages to fend off the chicanery that the old guy's side will throw at him, we will get to play "Guess the assassination date" for four years. Frankly, that's the only interest that any sane individual can have in this ridiculous display of the US public's collective ignorance.
The old guy is a corrupt politician who collaborated with the enemy after being involved in deliberate attempts to bomb civilian infrastructure. He finished fourth-l;ast in his graduating class, blew up five aircraft ... and he's a "hero".
He took cash and gifts from a rip-off artist who ran a dodgy Savings & Loan... but he's the 'campaign reform' guy.
He dumped the wife who waited for him when he was singing for the Cong', and married a beer heiress... but he's the 'values' candidate.
The skinny bisexual black guy is a corrupt politician.
Both of them are mentally defective - they believe that there is a wizard in the sky that listens to them and/or intervenes in the world. That should disqualify them from holding public office, on the basis that they are profoundly deluded. After all, Charles Manson believed that Jeebus (or Jeebus' Dad) told him to do the Tate-laBiance murders... do you want a guy who believes in the same Sky Wizard to be at the helm of the USS Disaster?
Anyhow - they are both prison bitches for Wall Street, so expect more of the same attempts to transfer taxpayer money to the banksters. Nothing ever changes, dearest Reader..
OzRant: Fade This Rubbish...
Several things are true about today's session: the first is that SPISpy subscribers pocketed a 30-odd point short scalp entered just before 11 a.m. Sydney time and exited just before 12 noon (in the second e-mail I said that it would be OK to close it and take profits, but that I advocated keeping it open, since the market is primed to fall to pieces over the coming weeks).
Sure, it wasn't as good as the Bond short entered on October 6th (search for "ScalpRant" in the archive... and note that the US 30-year bond was above 120 when it was issued: it's now below 114, for a lazy 600% profit in less than a month).
The second core truth about today is that the Strayan market is being deliberately 'fluffed' - by the same sort of professionals who ensure 'ability to perform' for male porn stars.
The price action screams "Smart Money At Work"... setting up a situation in which "Kochie" and the rest of his journalistic ilk, will receive press releases from the brokerage community, and will parrot same across all the air-waves in Straya.
This, it is hoped, will encourage Mum and Dad investors to dive back into the market: the brokerage community knows that there is a load of dough which has been withdrawn from mortgage-type funds, and which is sitting in bank accounts. They also know that this amount will increase dramatically once the fund managers get a large enough government bribe to encourage them to release the money that is currently being held hostage.
So they figure that is they goose the market indices, the punters will be tricked into putting that cash back into market-linked investments... but not into mortgage funds. The game that is now afoot, is to get them to slosh it into stock funds.
And then, the smart money will be selling like mad.
You mark my words, dear Readers... from Koch to Pascoe to Kohler, these chuckleheads who never saw disaster coming, will tout stocks simply because we've seen a dead cat bounce (and because they are all Brokerage Bitches).
Nobody who reads this screed is dumb enough to listen to the likes of Koch et al (except for some of our Froggo Schoolteacher types... but there's only one of those).
Speaking of short-arse Frogs, I admit I'm buggered if I know why he logs in to RantWorld ten times a day: maybe he thinks I will post the link to the Teacher Porn video, or maybe he's the sort of dill that has to read something ten times to understand what it's about.
Thursday, October 30, 2008
OzRant: Fade This...
Mark my words, dearest Reader, this little bounce has about as much chance of success as the French had before we - the Anglo-Saxon world - took up arms to save the Frogs from the Wehrmacht.
For those unfamiliar with history, let's wander down the byways for a bit...
It's funny to think that the Frogs were so mind-bogglingly humiliated that had we not taken up arms against our Germanic cousins, the National Anthem of France would be "Deutschland Uber Alles".
Like the Italians, the Frogs embed a surrender flag within their national drapeau... and are the only European nation to have been forced to defend their own capital four times in the space of a hundred years... each time as a result of wars that they declared.
Quel honte! I don't think they have beaten anybody (except African tribesmen) since Agincourt... poor dears.
And they idolise a General - Big-nose de Gaulle - who was an utter coward... who ran away to London as soon as the Krauts entered Alsace, and didn't show his honk in France until it was all over. He then promptly declared himself the winner: as we Strayans say, he had more front than a shithouse rat with a gold tooth.
A common joke amongst those who saved France twice in a generation, is that there is only one thing that prevents immediate French surrender under fire: it takes time to unpick the sewing that connects the red and blue bits of the flag to the bit that you need in order to surrender.
In fact amongst those of a Saxon persuasion, the white flag of surrender is known as the 'Franco-Italian Battle Flag'.
But I digress...
As I have often said, France itself is delightful, and the people are very nice indeed - well, most of them. The half-breed Spaniards who don't really know who their father is aren't really French, so they don't count.
Catullus wrote some nasty things about Iberians, and nothing has crossed my field of view which would make me countermand his opinion.
When the chaps from StormFront come calling to East Walnut Street, tell them I said l'Chaim.
Wednesday, October 29, 2008
OzRant: Nuffie Spurt Results in Fail...
From time to time it's nice to see global markets reject the whackery that emanates from the Retarded Soviet Union of America. Anybody who looked at an intraday Dow chart before the open of the Asian session must have wondered why Wall Street handed control to the passengers on the Special Bus.
Seriously - can you think of anything that changed yesterday at 2 p.m. (NY time) that made the Dow components suddenly become 'must have' investments?
Nah - didn't think so. And yet the Dow rose 700 points in the last two hours of trade.
In the Strayan market, the usual nuffie stampede occurred - stock nuffnuffs with the collective intelligence of a brain-damaged Frenchman, piled in for one reason and one reason only... the US went up strongly.
We all know what happens to people who join in the nuffie orgasm and dive in at the ASX open... they get gutted like fish. And today the trail of gizzards began just before noon, and Crom only knows how the market managed to stay in the green by the end of the day.
It really is quite amusing, if you're not fretting about the impact of the market on your super. If your super is in long-only stock positions, then it's not funny in the slightest. A lot of people will have to revise their retirement expectations downwards as a result of this episode - and as I have said before, this episode is going to last a generation.
My Favourite Market Commentator
Re: My Favourite Market Commentator
Monday, October 27, 2008
OzRant: Brown Corduroys Still Un-Donned...
I promise a much more effusive set of prefatory comments tomorrow. For now let's just settle with the following piece of wisdom...
White supremacist organisations can be useful if you want someone's head kicked in at low cost. Plus there is the additional benefit of helping improve marriage statistics - by ensuring that at least one couple will spend the rest of their lives together.
Friday, October 24, 2008
OzRant: Is Look Like Turd, Is Smell Like Turd...
Boy O Boy, it's starting to get interesting. When a career hack like Greensplatt admits he hasn't got a clue how things function, your beloved GT starts to think that perhaps Greensplatt has had a visit from the Ghost of Hannukah Past and has been shown that in the not-too-distant future, people will spit on him in the streets.
As I have said often over the past 10 years, such an outcome would be no less than Mr Magoo deserves. He sat in his crony heaven - a government-provided sinecure - as the western world rode the benefits of a 20-year bull market in bonds (and stocks), and claimed those benefits as the natural outcome of his genius. This was the same post hoc ergo propter hoc analysis that makes journalists think that any economic upswing is caused by political interference in an economy, when in fact good things happen despite political distortion of the economy.
Journalists, schoolteachers and the congenitally dim accepted the "Maestro Magoo" crapola as fact, and the hagiography was set in motion. And all the while, there were the Jeremiahs and Isaiahs of the intarwebs tubes, yelling that Emperor Maestro had no clothes.
That said, we are near to a short-term bottom. We could easily bounce 30% from here.
Why do I think that? Simple. Greenspan babbled yesterday about further downside - and if that guy ever had to back his opinions with his own money, he would be dead within a week.
That said, Mr Magoo is the only contrarian indicator which is flashing 'big bounce' - everything else points to a continuation of the decline. So while 'Fade Greenspan's Big Calls' has been something that has paid good dividends for over thirty years, I think that this time he is going to prove useless even as a contrarian indicator.
We are still in the formative stages of this event - as former parasite Paul Keating said the other day, the pain that started in earnest a year ago is going to last eight to ten years.
If we take that fork, then a few things are easy to predict. By the time the dust has settled, we will have had at least one world war, the US will be at least 3 different countries, at least two European capitals will be reduced to sheets of glowing glass, and western society will have regressed much as it did between the end of the Western Roman Empire and the start of the Renaissance. (Note that this time is what we refer to as the Dark Ages, but they were dark only in Europe: culture flourished in the Islamic world and in Asia, advances in mathematics, philosophy and engineering were made, and we benefited from them starting in the mid 1300s.)
There is one thing that will save us from a new Dark Ages, and only one.
That one thing is that we might be lucky enough to pass the inflection point on the 'knee' of our development curve, and attain the Kurzweilian idea of the Singularity, before we do too much more damage to our own civilisation.
Thursday, October 23, 2008
OzRant: Time to Die, Mr Bond...
So here we are again, making new multi-year closing lows. The Cancer Fairy has come and gone, spreading its vile infection hither and yon. Trillions of dollars (and counting) of promises from the globe's most parasitic species (politicians), and yet bits keep dropping off the combined market capitalisation of the world's bourses - like fingers off a lazy leper.
Nobody has mentioned Mr Hankie's name in awe-infused tones for some time now - his cred has disappeared faster than the 'MILF factor' for Caribou Barbie/Bible Spice. She was unable to keep her religious whackery and nasty streak from seeping through the $45k makeover, and 95% of the men who 'would have', wouldn't now if you paid them.
In some sense, the short-lived Palin phenomenon and the Paulson aura were both symptoms of the same social trends - a trend which is also made clear by the almost insulting tone of most TV advertising.
The political class and their media propaganda machine, all think that you and I and the rest of the western world, are absolute morons. So car ads have to be exercises in CGI smart-arse-ery, shampoo is now a 'hair reglamouring service' (OK, I made up the reglamouring bit, but there is an ad - forget which - in which the makers actually call their latest shampoo a 'service' rather than 'dishwashing liquid with perfume in it').
And of course when women get their period or shave their legs, they go to the beach and frolic with other women in a sunny world where everyone is about 18 years old and flawless.
I've met quite a few women in my life - my mother is a woman. As far as I can tell, they are not all buffoons. Not every one of them has a shoe fetish to rival Imelda Marcos: sure, the bulk of them will pour highly toxic chemicals into their scalps and smear coloured mud on their faces in a bid to look younger... after having taken up smoking at the age of 14 in a bid to look older.
Here's a hint for the 14 year old girls out there: the smoking bit doesn't make you look grown up - it makes you look like a 14 year old who is so desperate for attention that she would do something known to be highly bad for you, in order to be noticed. It's like walking around with a sign saying "Hey paedophiles - I'm really insecure. Tell me I look like a grown up and you're in with a shot."
But smoking does make you look older - much older - over time. And one final word - once the accelerated aging you induce has wreaked its havoc on your skin, and your mouth looks like a cat's bum, the coloured mud and hair dye doesn't make you look younger...
But enough of feminine stupidity (which on balance is far less entrenched than you might think if you watched 100 ads aimed at women)... on to the markets.
OzRant: Are You Still Having Fun?
It is difficult to write sensibly about the damage being done (or more correctly, about the previous damage which is now being exacerbated) by politicians, without sounding like a candidate for the looney bin. That said, the situation is pretty grim for anybody who is not getting indemnified for some-or-other whackery.
Paid over the odds for a house with no money down, and didn't really bother to inform yourself of the terms of the highest value contract of your life? Oh, you poor dear... here, let's have the frugal and the responsible pay the consequences.
Managed a bank and got your equityholders hip-deep in instruments which were palpably ridiculous? Poor lamb... tell you what, let's tax the living shit out of the population from here to eternity, in order that you don't have to deny your trophy wife the Botox that she thinks will stop you from drilling a 20 year old from the typing pool.
The whole circus was based on a false premise - that clever people doing sums could make risk vanish into thin (profit laden) air.
I wrote - back in 2004 - that this was stupid. That just because bank Boards (who by and large have middling bachelor's degrees, usually in law) got bamboozled by the algebra and were too proud to admit they didn't understand it, didn't mean that the risk ceased to exist.
Way way way back, when Dicko and I did some consulting for Westpac (for their Credit Policy and Control department), the people we liaised with were bright enough. Rob Eales - the head of the section - was a bright man, and rightly understood that overlending in good times is as much of a source of balance sheet damage as loan impairment brought on by persistent bad times.
This was in 1997/8, when everybody thought there was going to be a recession - and people like Peter Brain (PBrain) were touting a situation in which yen hit 240 to the USD.
That same year I gave a presentation to the Econometrics seminar, pointing out that according to my modelling, the odds of recession were less than 5% and that growth through to 2004 would average 4.1% a year.
But back to Westpac: they understood that in good times, people fail to put anything aside. Farmers go out and buy shiny new tractors, textile manufacturers raise employee wages to above poverty levels, and generally people act as if prosperity is eternal. Most of them do virtually all of their spending on credit. And even if prosperity is ongoing, overborrowing can lead to hardship if income growth fails to match rising debt costs.
Sounds obvious now - that banks should be prudent during good times, not ust react when thie crap hits the fan.
That was the theory we went with, and we furnished Westpac with our best guesses as to which industries had similar reaction profiles to a range of economic phenomena. It was really quite interesting stuff, and became the topic of my (unfinished) PhD.
I only mention it because lo and behold, that very same ethos - keep dancing until the music stops, and then try and find a chair - took over bank management in the mad scramble to ddrive up share values. Annd now everybody gets to have higher rates of tax (or theft through inflation - the same thing) for eternity.
Best move straight to the markets - I've got to be down at the cop shop in 45 minutes, and I'm sitting here in my underpants.
Well. I guess we had better get cracking.
One short advance warning - there might not be an OzRant for the upcoming Australian session.
I have to go down to see my chum Adjutant Lienard (at the gendarmerie) tomorrow morning. If I can't keep my gob shut I might end up in a concentration camp. Again.
Wouldn't that be funny?
The funniest thing about French concentration camps is that they give you duck confit and quail once a week. YUM!
The second funniest is that each expulsion costs about the same amount as a year's worth of a gendarme's pension. The poor bastards who act as the State's goon squad are squandering their own retirement incomes.
Anyhow, Adj. Lienard is not a bad egg. His boss - M. Belouis - is a very nice fellow.
I might be very opposed to any system that has paramilitary police swanning about in jackboots on behalf of a Hungarian reffo runt, but that does not extend to personal dislike of the chaps themselves, even if they don't appear to be freemasons.
Anyway - tomorrow I might give them a full excursus on how their political masters will, in the end, stiff them on their retirement benefits.
Imagine the annoyance they will feel when I ring them twenty years from now and tell them "Quand j'ai vu sur le télé que le gouvernement francais refuse desormais d'honorer les pensions des anciens fonctionnaires, j'ai pensé a vous... vous rappellez ce que je vous disais en 2008? J'avais raison!"
No, it's not perfect, but it'll get the point across. Besides, by then French (as a language) will no longer exist (half of all corporate signage is now in English - it's the bigget cultural defeat since Agincourt).
I've thought about this for some time - there would definitely be a silver lining: I would go back into the pain-inducing industry just for a month or so, to tie up some short ends.
Oops - I mean loose ends.
Call it privatised justice. Or, as a funny fellow once said...
Economic News
Global unprecedented co-ordinated easing by central banks.
Hearing the breathless blather on Bloomberg and CNBC, you would swear that central bank intervention was the biggest thing since Hitler's gas bill.
Here's a tip for all journalist dickwads - central banks have been intervening since just after 9-11: they didn't stop the low being set in 2003 (which was advertised by me on the CNBC forums to within three minutes) and they're not going to stop it now either.
Apart from that, there was something about house sales rising. Well I'll be damned - prices falling and volume increased... the words "demand curves are downward sloping" come to mind.
Fed Open Market Operations
The Fed's Open Market Operations desk performed a single repurchase today - a 1 Day repurchase totalling $ 20.000bn, with not a single cracker in Treasury-backed collateral.
Frankly I don't think the usual repo-pump paradigm is operational - there has been such a proliferation of market-goosing mechanisms under Doctor Helichopper, that alas I fear that I could drop the repo bit altogether without a loss of expanatory power.
"Without loss of explanatory power" is one of those wank-filled statements used by academics who are only passingly good at stats. People like Professor Helichopper, who was an essay writer and economic historian, use it all the time.
My mate Ditch (who is probably the only person I know who is more numerate than me) would never say such a thing, even though he went to work for Merrill Lynch.
Oddly enough, I thought Ditch would not pass the Ethics exam at Merrill... because Ditch actually had a sense o ethics.
Some time ago - I think it was around 2001, but it might have been slightly later - I saw two pieces of evidence that were the perfect evidence as to why Alan Greenspan had to become a bureaucrat: had he not made the decision to suckle at the public teat, he risked starving to death in an alley.
Those who recall the ancient history of the old HotCopper days, will recall that prior to 2000 I was putting the boot into Greenspan for his belief in Y2K (as well as for being a complete ignoramus and a hack). But his stupidity goes back decades further than that.
Anyway - as I say... two pieces of compelling evidence as to why Greenspan's attempt at a private-sector consultancy fell apart and went bust. You could not get it more wrong if you actually could see into the future and you wanted to bankrupt your clients.
behold...
Why Greenspan was a bureaucrat...
Posted by GT at 3:09:00 PM
USRant: Reaping the Whirlwind...
Bugger. That long scalp from yesterday - which was showing a gain of 200 points just before yesterday's close - wound up getting stopped out for no gain..
Still, that's better than it would have been if it had been let ride: the US market got torched today and closed right on its session low.
Rather than put a link to the magnificent call (which as I say resulted in a stopout - although the stop was at breakeven as mentioned in TootRant), let's reminisce on yesterday's post in its entirety and then assess the outcomes.
ScalpRant: BUY NOW....
As prefatory witticisms, the foregoing is hardly up to the normal USRant standard - I thought I would dedicate the first USRant for a while as a boast post.
TOOT....
One other thing though... I heard a very sensible explanation for why there is such disdain for stock markets recently (even without short sellers - stick that up your collective pig-ignorant arses, politicians).
the reason: well, think like an investor - one who has just been shown that the regulatory environment can change on the whim of a set of politicians who would not know their arses from a set of hot rocks
In other words, the US and the UK and Australia and Japan have all showed that any decision to invest in their listed equities should incorporate a risk premium the same as a third world junta-run oligarchy. This is because the politicians in those economies (and their lickspittle 'regulators') have shown that they have no interest in a stable regulatory environment, or even (when push comes to shove) in the law of contract.
That should actually come as no surprise, when you consider that the whole of political life is predicated on the idea that that the 'voter' actually belongs to the government. Western governments arrogate to themselves, the right to change the terms of their relationship to the voter whenever they please - all they do is agree to write down their collective opinion, and call it a 'law': your contract with the government is then changed and there's not a damned thing you can do about it.
Economic News
Nothing - although as usual, some politicians (e.g., the terminally inarticulate 'Brokeback Cowboy' George the Turd) and their lickspittle hacks (e.g., Helichopper Bernanke) felt theat they were important enough to jawbone the market.
The PPT was called to action while Bush was pretending he knew how to run a business without his Daddy's money connections, and they drove the Dow up almost 100 points in ten minutes. But by the time George the Turd had finished, the Dow was lower than when he started. Sort of a microcosm of his reign.
(Those who aren't aware should know - the US has had three presidents called George... Washington, and the two Bushes.
Thus, the current George is the Third George, or George the Third. Hence George the Turd. And the 'brokeback cowboy' jibe is due to his barely-closeted homosexuality.
As an aside: how odd that the US was started as a result of a tax revolt against England's George III, and under its own third George the US has sowed the seeds of its final demise).
OzRant: Big Bounce to Nowhere...
Well, what to make of the Dow's 500-point upward thrust in the second half of the day? Obviously it was Mr Hankie the Cancer Fairy and his cronies in the Wall Street Bailout Crew, but nobody cares who gave the markets a goosing - just that the goosing was performed.
It is a mark of how bovine the average schlub has become, that the media reports massive injections of 'liquidity' as if it was the Second Coming. Central banks have magicked about two trillion dollars out of thin air in recent weeks, and nobody bats an eyelid.
All those folks wearing red stars on their caps, who got persecuted by Western political machines between the 1950s and the 1990s, ought to be receiving compensation right now. They got suckered into some other political idiot's plan to Save Us All by centralising the means of production, and they were persecuted for trying to encourage others to try it. And of course let's not forget, the US slaughtered 6 million Vietnamese and a further couple of million Laotians and Cambodians because the US specifically declared that public ownership of the means of production was simply not on ... anywhere that could be reached by a strategic bomber.
And now the US and the rest of the West have now handed over their entire financial systems to politically appointed apparatchiki. The control over the means of financing the machinery of production, now rests with a soi-disant 'elite' group of ... central planners. The least they can do is put up a statue of Lenin in Washington, and write a letter of apology to those they persecuted for nothing more than an idea. And we should all get a refund for the debt accumulated to prosecute the Cold War... the ultimate political pissing contest.
This is how Empires end - with rampant corruption, debasement of the coin, and mismanagement of unnecessary foreign entanglements.
No matter - and do not think for a minute that the worst is over. Sure, we made plenty money scalping the Dow yesterday from the long side (although it was annoying having to withstand a further fall after initiating the position), and mark my words, the latecomer euro-short and oil-short nuffnuffs are going to get absolutely smeared in coming days. The Euro in particular - it has fallen about 10c against the USD in the last week and a bit - despite the fact that the US economy is in a much bigger shambles than Europe.
Europe is infested with parasites to a greater degree than the US, perhaps - although if you take the view that national governments in Europe are now like US State governments, it could easily be argued that the additional layer of bullshit artists and parasites in Brussels adds enough politicians to replicate the US Federal government.
And isn't it funny to watch these charlatans trying to pretend that they have the capability to solve this 'crisis'. These vermin who cannot earn a wage in the private sector without either nepotism or 'contacts', and whose entire livelihood depends on legalised extortion of the wages of the polity. Sure, those are the guys who are going to save the financial sector.
Politics attracts the skeeviest, most corruptible, most oily scumbags that walk the earth. They are uniformly either megalomaniacs, or wild eyed crazies who think they know what's good for everybody and would live the chance to use a police force and an army to make everybody act in some fashion deemed acceptable by the political class. Meanwhile they're screwing their secretaries, raping the Treasury, and killing other people's children by the tens of thousands.
It is past time for a bloodbath, with politicians as the victims. They are not like us - they are a metastasized cancer at the heart of human society. They collectively were responsible for a quarter of a billion deaths in the last century and unless we get rid of them they will do for us all.
As you know, I'm a big fan of the Brick Top method of dealing with foes - top them, and feed them to pigs. A very clever man once said that if pigs cold vote, the man who comes each day with the slops bucket would be elected leader. I would like to think that pigs aren't as stupid and Pavlovian as people who believe in democracy - the system that legitimises the rape of the entire country in order to fund the wild schemes of the majority of people who vote.
Now let's all put on our surprised faces ... the Tycoons' Whores of the US Congress not only dropped to their knees - as was obviously always going to happen - but they have already loaded another $150 billion of grift into the new version.
OzRant: Another Lurch Downwards...
The imprisonment of this Toben fellow for challenging politically-mandated facts, should serve as a reminder to everybody that the "law" is nothing more than the codification of the opinions of a bunch of corrupt politicians, backed up by the threat of violent force (the state-sanctioned armed goons who get all twitchy if their families are threatened, but whose job is to rip families apart on some politician's say-so - usually for something that involves no harm to anybody). And let's ignore the historical irony... Moses leads a campaign of pillage and genocide from Egypt all the way to the Levant, and thirty centuries later folks who think of his story as their cultural foundation myth, are cryng foul about mass killings.
As I've said many times, I have no idea whether or not the Kraut government (another pack of politicians) had a policy of systematic annihilation of some or other set of whackballs who believed in a 3000-year old fairy tale of genocide, ethnic cleansing and rapine (and whose political leadership had declared war on Germany in 1933).
For the sake of argument, let's say it actually did happen.
Well, apart from the bits that have been shown to be bullshit, like the 'riveting first person account' of Jacob Wilkomerski... and the 'I was raised by wolves' of the latest fraud, and the 'soap from human fat' rubbish, and the 'electrified floor that completely evaporated a thousand people at a time' fiction, and the people who apparently survived being gassed six times, and the ethnically-coloured smoke from crematorium chimneys.
We can't be expected to believe those - and it's hard to imagine that there could be legal sanctions for pointing out that they are bullshit. We will likewise overlook the photos that were retouched to add smoke, and we will forget about the absolutely scary fuel requirements to cremate all the evidence. We will accept that the Germans chose the most inefficient means of annihilation imaginable (so 'German efficiency' goes in the bin as a myth, alongside 'US military dominance' and 'French culinary supremacy').
Now think about this: questioning any of those things would currently be illegal under French, German, British, Australian law, had they not already been exposed as fabrications. What does that mean for other parts of the narrative that have yet to be properly investigated?
But let's say that everything that has not yet been shown to be bullshit, did in fact happen.
So what? It proves that a government that gained power through a perfectly normal democratic process, can and will do heinous things to self-declared internal enemies. Few people recall that nasty old Adolf rose to power by forming a coalition with another party after an election. People forget that every action of the German government was legal under German law at the time (this is now the 'Bush/Ashcroft/Rumsfeld,/Kissinger/Cheney defence').
So politicians routinely kill people, and try to provide themselves with legal cover to do so - where's the surprise?
And when politicians kill people they are too gutless to actually get their hands dirty, so they use goon squads. Again - where's the news?
Here's a tip: if the government of a country is led by a dude who wrote a book declaring his distrust for members of your sect, don't declare war on his country. You might think it will feel good at the time - you'll feel smart, and you'll think it makes him look like an idiot. Think again - life isn't an episode of Everybody Loves Raymond where you get away with 'zingers' and everybody just moves on to the next scene.
You've got two choices: have him knocked off, or shut up and keep your head down. Being a smartass is not a good long term solution.
But i digress...
Without people like this Toben fellow, frauds like Wilkomerski and others would still be peddling their bullshit fabrications. They would have political cover for their bullshit, and would benefit from the politically-orchestrated oppression of anybody who is not prepared to blindly accept their word for it. Again, not a viable long term solution. You would think that the political classes would have learned something from the Vatican's requirement to apologise to Galileo - not to mention the impending suit requiring the return of Templar assets seized by Rome under false pretences in 1307... that's a suit worth almost as much as the US bank bailout.
Moving right along...
Why isn't there a law forbidding questioning of the death of Elvis or JFK? Why isn't there a law forbidding flat-earth theorising? Why isn't there a law forbidding whackjobs like Bible Spice (Caribou Barbie) from asserting that the Earth is less than 6000 years old and that dinosaurs and humans once shared the same environment?
I'll tell you why: because they aren't necessary: the facts speak for themselves, and anyone who believes the same as Caribou Barbie is just dismissed as a screwball by anyone with an IQ above about 80. The only time you have to legislate an opinion is when there are facts that would otherwise reveal your opinion to be bullshit. This is why politicians promulgate tens of thousands of pages of laws.
This is why I have no respect whatsoever for any law that conflicts with my personal beliefs.
I don't drive fast - not because it's against the law, but because it's doesn't change trip times enough to justify the additional risk.
I don't engage in pre-emptive assault: not because it's against the law to assault people, but because pre-emptive assault is not a sound basis on which to run a life or a set of lives. Game theory shows you that pre-emptive action in repeated games is only a dominant strategy if the pre-emption is overwhelmingly successful (and it never is overwhelmingly successful, even if you kill the other guy: and if all you do is piss him off, you can find yourself in a mortally-dangerous world).
Passports, drivers licenses and the other forms of political ear-tagging that the parasite class requires in order to properly oversee their livestock is another case in point. Not particularly of interest to me, but their absence can cause the attention of the politician's armed goon squads. Similarly, in the 1900s I would not have publicly declared my atheism: it was a death penalty offense to be an atheist.
To my way of thinking, the bones of any politician who voted for the Act imposing death for non-belief, ought to be disinterred and fed to pigs. And anybody who legislated for current laws that outlaw belief in rational inquiry (albeit only imposing imprisonment) - they ought to be fed to pigs as well.
People who try and dick around with other people's lives and livelihoods need to be reminded from time to time, by graphic examples, that the world is a very dangerous place. If you live in a big city, the last thing you hear might be a click behind your left ear. Big cities are violent places - and some folks don't think hard enough about how long people normally live, versus how long they live if they stick their noses where they're not wanted. (That is why part of the State's rape of taxpayers is used to pay for a lifetime's supply of armed goons for its former politicians and their families).
Imagine a world in which the ability of the State to properly protect its citizens is heavily compromised - as it is in the US at the moment. Between drug gangs, organised crime and other private security structures, there is a huge increase in the likelihood of running foul of someone who can organise to do you real harm: someone who doesn't play around, and who makes Prick Cheney look like a powdered fag choirboy.
Imagine being a run of the mill dude - just a workaday schlub - and finding out that a local drug gang has got it into their head that you're the police informant who led to the incarceration of their 'homie'. That sort of shit has happened before, and the results are universally unpleasant - the last person that it happened to that I am aware of, would have ended their life praying for that click behind the left ear.
OzRant: Brown Corduroys Still Un-Donned...
I promise a much more effusive set of prefatory comments tomorrow. For now let's just settle with the following piece of wisdom...
White supremacist organisations can be useful if you want someone's head kicked in at low cost. Plus there is the additional benefit of helping improve marriage statistics - by ensuring that at least one couple will spend the rest of their lives together.
Friday, October 24, 2008
OzRant: Is Look Like Turd, Is Smell Like Turd...
Boy O Boy, it's starting to get interesting. When a career hack like Greensplatt admits he hasn't got a clue how things function, your beloved GT starts to think that perhaps Greensplatt has had a visit from the Ghost of Hannukah Past and has been shown that in the not-too-distant future, people will spit on him in the streets.
As I have said often over the past 10 years, such an outcome would be no less than Mr Magoo deserves. He sat in his crony heaven - a government-provided sinecure - as the western world rode the benefits of a 20-year bull market in bonds (and stocks), and claimed those benefits as the natural outcome of his genius. This was the same post hoc ergo propter hoc analysis that makes journalists think that any economic upswing is caused by political interference in an economy, when in fact good things happen despite political distortion of the economy.
Journalists, schoolteachers and the congenitally dim accepted the "Maestro Magoo" crapola as fact, and the hagiography was set in motion. And all the while, there were the Jeremiahs and Isaiahs of the intarwebs tubes, yelling that Emperor Maestro had no clothes.
That said, we are near to a short-term bottom. We could easily bounce 30% from here.
Why do I think that? Simple. Greenspan babbled yesterday about further downside - and if that guy ever had to back his opinions with his own money, he would be dead within a week.
That said, Mr Magoo is the only contrarian indicator which is flashing 'big bounce' - everything else points to a continuation of the decline. So while 'Fade Greenspan's Big Calls' has been something that has paid good dividends for over thirty years, I think that this time he is going to prove useless even as a contrarian indicator.
We are still in the formative stages of this event - as former parasite Paul Keating said the other day, the pain that started in earnest a year ago is going to last eight to ten years.
If we take that fork, then a few things are easy to predict. By the time the dust has settled, we will have had at least one world war, the US will be at least 3 different countries, at least two European capitals will be reduced to sheets of glowing glass, and western society will have regressed much as it did between the end of the Western Roman Empire and the start of the Renaissance. (Note that this time is what we refer to as the Dark Ages, but they were dark only in Europe: culture flourished in the Islamic world and in Asia, advances in mathematics, philosophy and engineering were made, and we benefited from them starting in the mid 1300s.)
There is one thing that will save us from a new Dark Ages, and only one.
That one thing is that we might be lucky enough to pass the inflection point on the 'knee' of our development curve, and attain the Kurzweilian idea of the Singularity, before we do too much more damage to our own civilisation.
Thursday, October 23, 2008
OzRant: Time to Die, Mr Bond...
So here we are again, making new multi-year closing lows. The Cancer Fairy has come and gone, spreading its vile infection hither and yon. Trillions of dollars (and counting) of promises from the globe's most parasitic species (politicians), and yet bits keep dropping off the combined market capitalisation of the world's bourses - like fingers off a lazy leper.
Nobody has mentioned Mr Hankie's name in awe-infused tones for some time now - his cred has disappeared faster than the 'MILF factor' for Caribou Barbie/Bible Spice. She was unable to keep her religious whackery and nasty streak from seeping through the $45k makeover, and 95% of the men who 'would have', wouldn't now if you paid them.
In some sense, the short-lived Palin phenomenon and the Paulson aura were both symptoms of the same social trends - a trend which is also made clear by the almost insulting tone of most TV advertising.
The political class and their media propaganda machine, all think that you and I and the rest of the western world, are absolute morons. So car ads have to be exercises in CGI smart-arse-ery, shampoo is now a 'hair reglamouring service' (OK, I made up the reglamouring bit, but there is an ad - forget which - in which the makers actually call their latest shampoo a 'service' rather than 'dishwashing liquid with perfume in it').
And of course when women get their period or shave their legs, they go to the beach and frolic with other women in a sunny world where everyone is about 18 years old and flawless.
I've met quite a few women in my life - my mother is a woman. As far as I can tell, they are not all buffoons. Not every one of them has a shoe fetish to rival Imelda Marcos: sure, the bulk of them will pour highly toxic chemicals into their scalps and smear coloured mud on their faces in a bid to look younger... after having taken up smoking at the age of 14 in a bid to look older.
Here's a hint for the 14 year old girls out there: the smoking bit doesn't make you look grown up - it makes you look like a 14 year old who is so desperate for attention that she would do something known to be highly bad for you, in order to be noticed. It's like walking around with a sign saying "Hey paedophiles - I'm really insecure. Tell me I look like a grown up and you're in with a shot."
But smoking does make you look older - much older - over time. And one final word - once the accelerated aging you induce has wreaked its havoc on your skin, and your mouth looks like a cat's bum, the coloured mud and hair dye doesn't make you look younger...
But enough of feminine stupidity (which on balance is far less entrenched than you might think if you watched 100 ads aimed at women)... on to the markets.
OzRant: Are You Still Having Fun?
It is difficult to write sensibly about the damage being done (or more correctly, about the previous damage which is now being exacerbated) by politicians, without sounding like a candidate for the looney bin. That said, the situation is pretty grim for anybody who is not getting indemnified for some-or-other whackery.
Paid over the odds for a house with no money down, and didn't really bother to inform yourself of the terms of the highest value contract of your life? Oh, you poor dear... here, let's have the frugal and the responsible pay the consequences.
Managed a bank and got your equityholders hip-deep in instruments which were palpably ridiculous? Poor lamb... tell you what, let's tax the living shit out of the population from here to eternity, in order that you don't have to deny your trophy wife the Botox that she thinks will stop you from drilling a 20 year old from the typing pool.
The whole circus was based on a false premise - that clever people doing sums could make risk vanish into thin (profit laden) air.
I wrote - back in 2004 - that this was stupid. That just because bank Boards (who by and large have middling bachelor's degrees, usually in law) got bamboozled by the algebra and were too proud to admit they didn't understand it, didn't mean that the risk ceased to exist.
Way way way back, when Dicko and I did some consulting for Westpac (for their Credit Policy and Control department), the people we liaised with were bright enough. Rob Eales - the head of the section - was a bright man, and rightly understood that overlending in good times is as much of a source of balance sheet damage as loan impairment brought on by persistent bad times.
This was in 1997/8, when everybody thought there was going to be a recession - and people like Peter Brain (PBrain) were touting a situation in which yen hit 240 to the USD.
That same year I gave a presentation to the Econometrics seminar, pointing out that according to my modelling, the odds of recession were less than 5% and that growth through to 2004 would average 4.1% a year.
But back to Westpac: they understood that in good times, people fail to put anything aside. Farmers go out and buy shiny new tractors, textile manufacturers raise employee wages to above poverty levels, and generally people act as if prosperity is eternal. Most of them do virtually all of their spending on credit. And even if prosperity is ongoing, overborrowing can lead to hardship if income growth fails to match rising debt costs.
Sounds obvious now - that banks should be prudent during good times, not ust react when thie crap hits the fan.
That was the theory we went with, and we furnished Westpac with our best guesses as to which industries had similar reaction profiles to a range of economic phenomena. It was really quite interesting stuff, and became the topic of my (unfinished) PhD.
I only mention it because lo and behold, that very same ethos - keep dancing until the music stops, and then try and find a chair - took over bank management in the mad scramble to ddrive up share values. Annd now everybody gets to have higher rates of tax (or theft through inflation - the same thing) for eternity.
Best move straight to the markets - I've got to be down at the cop shop in 45 minutes, and I'm sitting here in my underpants.
Well. I guess we had better get cracking.
One short advance warning - there might not be an OzRant for the upcoming Australian session.
I have to go down to see my chum Adjutant Lienard (at the gendarmerie) tomorrow morning. If I can't keep my gob shut I might end up in a concentration camp. Again.
Wouldn't that be funny?
The funniest thing about French concentration camps is that they give you duck confit and quail once a week. YUM!
The second funniest is that each expulsion costs about the same amount as a year's worth of a gendarme's pension. The poor bastards who act as the State's goon squad are squandering their own retirement incomes.
Anyhow, Adj. Lienard is not a bad egg. His boss - M. Belouis - is a very nice fellow.
I might be very opposed to any system that has paramilitary police swanning about in jackboots on behalf of a Hungarian reffo runt, but that does not extend to personal dislike of the chaps themselves, even if they don't appear to be freemasons.
Anyway - tomorrow I might give them a full excursus on how their political masters will, in the end, stiff them on their retirement benefits.
Imagine the annoyance they will feel when I ring them twenty years from now and tell them "Quand j'ai vu sur le télé que le gouvernement francais refuse desormais d'honorer les pensions des anciens fonctionnaires, j'ai pensé a vous... vous rappellez ce que je vous disais en 2008? J'avais raison!"
No, it's not perfect, but it'll get the point across. Besides, by then French (as a language) will no longer exist (half of all corporate signage is now in English - it's the bigget cultural defeat since Agincourt).
I've thought about this for some time - there would definitely be a silver lining: I would go back into the pain-inducing industry just for a month or so, to tie up some short ends.
Oops - I mean loose ends.
Call it privatised justice. Or, as a funny fellow once said...
Economic News
Global unprecedented co-ordinated easing by central banks.
Hearing the breathless blather on Bloomberg and CNBC, you would swear that central bank intervention was the biggest thing since Hitler's gas bill.
Here's a tip for all journalist dickwads - central banks have been intervening since just after 9-11: they didn't stop the low being set in 2003 (which was advertised by me on the CNBC forums to within three minutes) and they're not going to stop it now either.
Apart from that, there was something about house sales rising. Well I'll be damned - prices falling and volume increased... the words "demand curves are downward sloping" come to mind.
Fed Open Market Operations
The Fed's Open Market Operations desk performed a single repurchase today - a 1 Day repurchase totalling $ 20.000bn, with not a single cracker in Treasury-backed collateral.
Frankly I don't think the usual repo-pump paradigm is operational - there has been such a proliferation of market-goosing mechanisms under Doctor Helichopper, that alas I fear that I could drop the repo bit altogether without a loss of expanatory power.
"Without loss of explanatory power" is one of those wank-filled statements used by academics who are only passingly good at stats. People like Professor Helichopper, who was an essay writer and economic historian, use it all the time.
My mate Ditch (who is probably the only person I know who is more numerate than me) would never say such a thing, even though he went to work for Merrill Lynch.
Oddly enough, I thought Ditch would not pass the Ethics exam at Merrill... because Ditch actually had a sense o ethics.
Some time ago - I think it was around 2001, but it might have been slightly later - I saw two pieces of evidence that were the perfect evidence as to why Alan Greenspan had to become a bureaucrat: had he not made the decision to suckle at the public teat, he risked starving to death in an alley.
Those who recall the ancient history of the old HotCopper days, will recall that prior to 2000 I was putting the boot into Greenspan for his belief in Y2K (as well as for being a complete ignoramus and a hack). But his stupidity goes back decades further than that.
Anyway - as I say... two pieces of compelling evidence as to why Greenspan's attempt at a private-sector consultancy fell apart and went bust. You could not get it more wrong if you actually could see into the future and you wanted to bankrupt your clients.
behold...
Why Greenspan was a bureaucrat...
Posted by GT at 3:09:00 PM
USRant: Reaping the Whirlwind...
Bugger. That long scalp from yesterday - which was showing a gain of 200 points just before yesterday's close - wound up getting stopped out for no gain..
Still, that's better than it would have been if it had been let ride: the US market got torched today and closed right on its session low.
Rather than put a link to the magnificent call (which as I say resulted in a stopout - although the stop was at breakeven as mentioned in TootRant), let's reminisce on yesterday's post in its entirety and then assess the outcomes.
ScalpRant: BUY NOW....
As prefatory witticisms, the foregoing is hardly up to the normal USRant standard - I thought I would dedicate the first USRant for a while as a boast post.
TOOT....
One other thing though... I heard a very sensible explanation for why there is such disdain for stock markets recently (even without short sellers - stick that up your collective pig-ignorant arses, politicians).
the reason: well, think like an investor - one who has just been shown that the regulatory environment can change on the whim of a set of politicians who would not know their arses from a set of hot rocks
In other words, the US and the UK and Australia and Japan have all showed that any decision to invest in their listed equities should incorporate a risk premium the same as a third world junta-run oligarchy. This is because the politicians in those economies (and their lickspittle 'regulators') have shown that they have no interest in a stable regulatory environment, or even (when push comes to shove) in the law of contract.
That should actually come as no surprise, when you consider that the whole of political life is predicated on the idea that that the 'voter' actually belongs to the government. Western governments arrogate to themselves, the right to change the terms of their relationship to the voter whenever they please - all they do is agree to write down their collective opinion, and call it a 'law': your contract with the government is then changed and there's not a damned thing you can do about it.
Economic News
Nothing - although as usual, some politicians (e.g., the terminally inarticulate 'Brokeback Cowboy' George the Turd) and their lickspittle hacks (e.g., Helichopper Bernanke) felt theat they were important enough to jawbone the market.
The PPT was called to action while Bush was pretending he knew how to run a business without his Daddy's money connections, and they drove the Dow up almost 100 points in ten minutes. But by the time George the Turd had finished, the Dow was lower than when he started. Sort of a microcosm of his reign.
(Those who aren't aware should know - the US has had three presidents called George... Washington, and the two Bushes.
Thus, the current George is the Third George, or George the Third. Hence George the Turd. And the 'brokeback cowboy' jibe is due to his barely-closeted homosexuality.
As an aside: how odd that the US was started as a result of a tax revolt against England's George III, and under its own third George the US has sowed the seeds of its final demise).
OzRant: Big Bounce to Nowhere...
Well, what to make of the Dow's 500-point upward thrust in the second half of the day? Obviously it was Mr Hankie the Cancer Fairy and his cronies in the Wall Street Bailout Crew, but nobody cares who gave the markets a goosing - just that the goosing was performed.
It is a mark of how bovine the average schlub has become, that the media reports massive injections of 'liquidity' as if it was the Second Coming. Central banks have magicked about two trillion dollars out of thin air in recent weeks, and nobody bats an eyelid.
All those folks wearing red stars on their caps, who got persecuted by Western political machines between the 1950s and the 1990s, ought to be receiving compensation right now. They got suckered into some other political idiot's plan to Save Us All by centralising the means of production, and they were persecuted for trying to encourage others to try it. And of course let's not forget, the US slaughtered 6 million Vietnamese and a further couple of million Laotians and Cambodians because the US specifically declared that public ownership of the means of production was simply not on ... anywhere that could be reached by a strategic bomber.
And now the US and the rest of the West have now handed over their entire financial systems to politically appointed apparatchiki. The control over the means of financing the machinery of production, now rests with a soi-disant 'elite' group of ... central planners. The least they can do is put up a statue of Lenin in Washington, and write a letter of apology to those they persecuted for nothing more than an idea. And we should all get a refund for the debt accumulated to prosecute the Cold War... the ultimate political pissing contest.
This is how Empires end - with rampant corruption, debasement of the coin, and mismanagement of unnecessary foreign entanglements.
No matter - and do not think for a minute that the worst is over. Sure, we made plenty money scalping the Dow yesterday from the long side (although it was annoying having to withstand a further fall after initiating the position), and mark my words, the latecomer euro-short and oil-short nuffnuffs are going to get absolutely smeared in coming days. The Euro in particular - it has fallen about 10c against the USD in the last week and a bit - despite the fact that the US economy is in a much bigger shambles than Europe.
Europe is infested with parasites to a greater degree than the US, perhaps - although if you take the view that national governments in Europe are now like US State governments, it could easily be argued that the additional layer of bullshit artists and parasites in Brussels adds enough politicians to replicate the US Federal government.
And isn't it funny to watch these charlatans trying to pretend that they have the capability to solve this 'crisis'. These vermin who cannot earn a wage in the private sector without either nepotism or 'contacts', and whose entire livelihood depends on legalised extortion of the wages of the polity. Sure, those are the guys who are going to save the financial sector.
Politics attracts the skeeviest, most corruptible, most oily scumbags that walk the earth. They are uniformly either megalomaniacs, or wild eyed crazies who think they know what's good for everybody and would live the chance to use a police force and an army to make everybody act in some fashion deemed acceptable by the political class. Meanwhile they're screwing their secretaries, raping the Treasury, and killing other people's children by the tens of thousands.
It is past time for a bloodbath, with politicians as the victims. They are not like us - they are a metastasized cancer at the heart of human society. They collectively were responsible for a quarter of a billion deaths in the last century and unless we get rid of them they will do for us all.
As you know, I'm a big fan of the Brick Top method of dealing with foes - top them, and feed them to pigs. A very clever man once said that if pigs cold vote, the man who comes each day with the slops bucket would be elected leader. I would like to think that pigs aren't as stupid and Pavlovian as people who believe in democracy - the system that legitimises the rape of the entire country in order to fund the wild schemes of the majority of people who vote.
Now let's all put on our surprised faces ... the Tycoons' Whores of the US Congress not only dropped to their knees - as was obviously always going to happen - but they have already loaded another $150 billion of grift into the new version.
OzRant: Another Lurch Downwards...
The imprisonment of this Toben fellow for challenging politically-mandated facts, should serve as a reminder to everybody that the "law" is nothing more than the codification of the opinions of a bunch of corrupt politicians, backed up by the threat of violent force (the state-sanctioned armed goons who get all twitchy if their families are threatened, but whose job is to rip families apart on some politician's say-so - usually for something that involves no harm to anybody). And let's ignore the historical irony... Moses leads a campaign of pillage and genocide from Egypt all the way to the Levant, and thirty centuries later folks who think of his story as their cultural foundation myth, are cryng foul about mass killings.
As I've said many times, I have no idea whether or not the Kraut government (another pack of politicians) had a policy of systematic annihilation of some or other set of whackballs who believed in a 3000-year old fairy tale of genocide, ethnic cleansing and rapine (and whose political leadership had declared war on Germany in 1933).
For the sake of argument, let's say it actually did happen.
Well, apart from the bits that have been shown to be bullshit, like the 'riveting first person account' of Jacob Wilkomerski... and the 'I was raised by wolves' of the latest fraud, and the 'soap from human fat' rubbish, and the 'electrified floor that completely evaporated a thousand people at a time' fiction, and the people who apparently survived being gassed six times, and the ethnically-coloured smoke from crematorium chimneys.
We can't be expected to believe those - and it's hard to imagine that there could be legal sanctions for pointing out that they are bullshit. We will likewise overlook the photos that were retouched to add smoke, and we will forget about the absolutely scary fuel requirements to cremate all the evidence. We will accept that the Germans chose the most inefficient means of annihilation imaginable (so 'German efficiency' goes in the bin as a myth, alongside 'US military dominance' and 'French culinary supremacy').
Now think about this: questioning any of those things would currently be illegal under French, German, British, Australian law, had they not already been exposed as fabrications. What does that mean for other parts of the narrative that have yet to be properly investigated?
But let's say that everything that has not yet been shown to be bullshit, did in fact happen.
So what? It proves that a government that gained power through a perfectly normal democratic process, can and will do heinous things to self-declared internal enemies. Few people recall that nasty old Adolf rose to power by forming a coalition with another party after an election. People forget that every action of the German government was legal under German law at the time (this is now the 'Bush/Ashcroft/Rumsfeld,/Kissinger/Cheney defence').
So politicians routinely kill people, and try to provide themselves with legal cover to do so - where's the surprise?
And when politicians kill people they are too gutless to actually get their hands dirty, so they use goon squads. Again - where's the news?
Here's a tip: if the government of a country is led by a dude who wrote a book declaring his distrust for members of your sect, don't declare war on his country. You might think it will feel good at the time - you'll feel smart, and you'll think it makes him look like an idiot. Think again - life isn't an episode of Everybody Loves Raymond where you get away with 'zingers' and everybody just moves on to the next scene.
You've got two choices: have him knocked off, or shut up and keep your head down. Being a smartass is not a good long term solution.
But i digress...
Without people like this Toben fellow, frauds like Wilkomerski and others would still be peddling their bullshit fabrications. They would have political cover for their bullshit, and would benefit from the politically-orchestrated oppression of anybody who is not prepared to blindly accept their word for it. Again, not a viable long term solution. You would think that the political classes would have learned something from the Vatican's requirement to apologise to Galileo - not to mention the impending suit requiring the return of Templar assets seized by Rome under false pretences in 1307... that's a suit worth almost as much as the US bank bailout.
Moving right along...
Why isn't there a law forbidding questioning of the death of Elvis or JFK? Why isn't there a law forbidding flat-earth theorising? Why isn't there a law forbidding whackjobs like Bible Spice (Caribou Barbie) from asserting that the Earth is less than 6000 years old and that dinosaurs and humans once shared the same environment?
I'll tell you why: because they aren't necessary: the facts speak for themselves, and anyone who believes the same as Caribou Barbie is just dismissed as a screwball by anyone with an IQ above about 80. The only time you have to legislate an opinion is when there are facts that would otherwise reveal your opinion to be bullshit. This is why politicians promulgate tens of thousands of pages of laws.
This is why I have no respect whatsoever for any law that conflicts with my personal beliefs.
I don't drive fast - not because it's against the law, but because it's doesn't change trip times enough to justify the additional risk.
I don't engage in pre-emptive assault: not because it's against the law to assault people, but because pre-emptive assault is not a sound basis on which to run a life or a set of lives. Game theory shows you that pre-emptive action in repeated games is only a dominant strategy if the pre-emption is overwhelmingly successful (and it never is overwhelmingly successful, even if you kill the other guy: and if all you do is piss him off, you can find yourself in a mortally-dangerous world).
Passports, drivers licenses and the other forms of political ear-tagging that the parasite class requires in order to properly oversee their livestock is another case in point. Not particularly of interest to me, but their absence can cause the attention of the politician's armed goon squads. Similarly, in the 1900s I would not have publicly declared my atheism: it was a death penalty offense to be an atheist.
To my way of thinking, the bones of any politician who voted for the Act imposing death for non-belief, ought to be disinterred and fed to pigs. And anybody who legislated for current laws that outlaw belief in rational inquiry (albeit only imposing imprisonment) - they ought to be fed to pigs as well.
People who try and dick around with other people's lives and livelihoods need to be reminded from time to time, by graphic examples, that the world is a very dangerous place. If you live in a big city, the last thing you hear might be a click behind your left ear. Big cities are violent places - and some folks don't think hard enough about how long people normally live, versus how long they live if they stick their noses where they're not wanted. (That is why part of the State's rape of taxpayers is used to pay for a lifetime's supply of armed goons for its former politicians and their families).
Imagine a world in which the ability of the State to properly protect its citizens is heavily compromised - as it is in the US at the moment. Between drug gangs, organised crime and other private security structures, there is a huge increase in the likelihood of running foul of someone who can organise to do you real harm: someone who doesn't play around, and who makes Prick Cheney look like a powdered fag choirboy.
Imagine being a run of the mill dude - just a workaday schlub - and finding out that a local drug gang has got it into their head that you're the police informant who led to the incarceration of their 'homie'. That sort of shit has happened before, and the results are universally unpleasant - the last person that it happened to that I am aware of, would have ended their life praying for that click behind the left ear.
Re: My Favourite Market Commentator
OzRant: Toot-ily Toot toot toot....
How sweet it is...
I've said it before, and I'll keep saying it until I'm blue in the face... when the 'hangers on' are all a-flutter - in either direction - then the only place to be is on the other side of the trade.
And of course we know that apart from schoolteachers, the ultimate hangers-on are journalists. Calling yourself a 'finance journalist' is basically an admission that you don't have the skills to actually make a living from trading or investing... yet somehow you're equipped to tell others how to do so.
Schoolteachers are - on the whole, and with five exceptions in my entire life - pig ignorant (the exceptions: Mr Rodgers (Y10 Advanced Maths), Mr Fox (Y12 Pure Maths), Mr Statham (Y12 Physics), Mrs Brown (Y12 English), Mrs Nacholinski (Y10 French) ... and maybe Mr Dobinson (Y12 Applied Maths). The rest were people who basically had no alternative use except if they were ground up and used to feed pigs.
And just think - they all became teachers before the bureaucratisation of education. At the time they were teaching me, most of the good'uns were in their 50s or 60s (although Mr Fox and Mr Statham were younger). Mr Rodgers was a tail gunner in a Liberator during WWII.
In more recent history, have never known an Honours level undergraduate in any discipline who then undertook a teaching 'qualification', but I can give you forty examples of people who didn't make the Honours class and who decided to become teachers. Teaching courses are absolutely chock full of the also-rans from other disciplines. Teaching courses are the Special Olympics of the university world.
The few talented-but-lazy people who gravitate toward teaching after an unsuccessful undergraduate stint (like my former colleague Matthew Peter) seldom stomach it for long - those individuals generally then make a decision to get back into proper intellectual harness. Thus Matt, having surfed during his undergraduate years and having never gotten more than 60% in any subject as an undergrad, spent a year or so teaching, hated it. He then returned to Uni and eventually got his doctorate and went to work for a very good hedge fund.
Journalists - on the whole - are almost as stupid as schoolteachers. They are herd animals - and it is a watchword in the World of Rant that when all four major journalism outlets (Bloomberg, CNBC, CBSMarketWatch and Reuters) are on the same side of the boat, we want to be on the other side (and preferably, in another boat altogether).
OzRant: Back Up The Truck...
Ordinarily I would write something about how the intraday bounce erased almost half of the early decline, and how we're not going to find a bottom while everybody is looking for it... given the lack of a final 'flush' downwards - a high volume session in which th market closes near its low. The usual schtick.
But - to use the phrase so often implied by brokerage shills - this time it's different.
How come? I hear you muse.
Simple, silly. The Tycoon's Whores in the US are undertaking a little bit of political-campaign theatre in order to wring as many posturing-points as possible out of this event. In the end tthey will do what they're paid to do - drop to their collective knees and administer the trillion-dollar blowjob that Wall Street is demanding - which will give the world financial system the equivalent of gonorrhoea crossed with Ebola, and which will have an eventual price tag of $5-6trillion.
That's the 'bullshit gap' for this bill. The political class is not willing to give any hint to the polity that the bill will be that high, though. I'm sure you all now recall the similar underquotes given for other little projects... the Iraq War was going to be a short affair that paid for itself (Perle, Wolfowitz), or would cost $50-70 bill (Rumsfeld in response to Summers) or would cost $200 bill (Summers, just before being fired for saying so).
The actual cost of Iraq (thus far)? About $850 bill once the latest trillion-dollar trough for the Pentagon is refilled. With accrued liabilities for health care and pensions, Stiglitz thinks the final cost will be $3-$6 trillion.
However as we all know, government is not obliged to do accrual-accounting: if government budgets around the planet moved to accrual accounting (recognising future liabilities as they are incurred), the mask would slip and we would all see that this government lark loses money hand over fist.
But back the the 'failure' of the US bailout. Or as I prefer to say, the rather neat political campaign move by the Republicans (who voted 2:1 against the bill... the Democrats were about 60% for the bill).
In a week the average Yank won't know who voted for or against, since each episode of America's Got Talent and America's Next Top Model are the national equivalent of a reset button for the brain. Plus, every news outlet from Bloomberg to FauxNews has reframed the entire thing into a politician's talking points... it's not a 'bailout', it's a plan to help working 'merkins. Hell, even I support that... everybody's merkin should work.
(A merkin is either a pubic wig, or one of those electrical fake vaginas... depends on who you ask, but either way fits with the US national identity: fake, cheap, and utterly lacking in class: the entire US 'Empire' is like a fat bird who gets a(nother) tattoo and dyes her hair to try and become more attractive, instead of spending twenty minutes a day not shovelling fast food into her gob).
But I digress...
What Joe Schlub will remember is that the Democrats control both houses. The Republicans will make a hue and cry in their press (the NYT, the WSJ and so on), decrying the Pelosi-led process... and will be seen as the driving force behind a new bill. The new bill will pass, and the Republican campaign of John the Collaborating War Criminal McCain will be rescued from meltdown.
And - not to put too fine a point on it - if the markets continue to be weak, the Republicans will try and stall the Vice Presidential debate, which will avert another revelation of the almost Bushian stupidity of Caribou Barbie, who would become Roadkill Barbie if she had to debate a waffling fraud like Biden. (For those who are wondering: yes, if I was single I would... but only if I had a well planned escape route - because Caribou Barbie is a dead set nutcase).
So in a nutshell: at the start of today's US session, sell bonds and buy the Dow. (Or buy SPI futures in the overnight).
OzRant: No Fireworks? Odd...
I admit a certain bewilderment at the market's behaviour today: I never expected the post-bailout orgasm to last, but it's hard to believe that it only lasted 25 minutes of the Australian session.
After all, the Tycoon's Whores of the US Congress are a lay down misère to pass Wall Street's biggest-ever tax-funded payday. I seriously doubt that the market reaction we've seen thus far represents a manifestation of the old 'Buy the rumour, sell the news' mantra - after all, the market is now dominated by people who are dumber than a bag of offal (even hedge funds are now staffed almost entirely by people who behave like small spec futures traders... late onto any trend, buying tops and selling bottoms... that's why so many hedge funds have blown up lately).
Perhaps Strayan market participants are anticipating a Wall Street hissy-fit since they haven't got exactly what Goldman's Trojan Horse (Mr Hankie) demanded. Apparently the deal (at the moment) is that they only get half of the $700 bill up front.
The fact is, this bailout is going to cost waaaaaaaaaaaaaaaaaay more than the $700 bill that is claimed.
As I said when the political class first started with the claim that the cost of the subprime meltdown would be "between $50bn and $100 bn"... the $700 claimed bailout price tag is bullshit.
I said at the time (look in the archive) that the cost of the subprime mess would be at least a trillion and a half. At the moment (ignoring Fannie and Freddie, Lehman, AIG and Merrill) the total writeoffs have run to about $650 bill... so we are almost halfway there. If you include Fannie and Freddie, the total cost balloons to about $5 trillion, because its assets are now worthless.
This latest bailout will, when all is said and done, cost about half of one years US GDP. that is, about $6 trillion. And it's not important whether you believe me or not, because you just know I am going to yell "I told you so" when it turns out that I'm right.
So thus far, the US whiz kids have generated a transfer of problems from the market to the government, totalling - eventually - a year's worth of US GDP. That signals the beginning of a process that can only end in a US default on its sovereign debt.
The US dollar is already losing its reserve status - slowly, but surely - and once that is gone the end game will be stunningly quick. The one thing that stands in the way of a more rapid unraveling, is the gutlessness of Moody's and S&P when it comes to rating US government debt: they are too chicken to declare openly that the US can never make good on its debt.
Think of the US as a company. It has 'revenue' (the taxes extorted from taxpayers) of a couple of trillion dollars. It has a negative operating cash flow - even on a cash basis - so think of that as negative EBITDA.
Once you add in accruals for the promises it has already made (pensions, and so on) its annual loss is four or five trillion dollars.
And it has recently acquired a dog of an asset - the loan book of Fannie and Freddie - and is about to write a cheque which in the fullness of time will amount to twice its annual revenue.
If you were a credit analyst and you had such a company in front of you, it would rate C- (at best)... junk, and bad junk at that.
And it wouldn't matter how many cruise missiles or battleships or trained killers it had, the thing would be obvious as a candidate for disappearing from the pages of history (as the Ayatollah Khomeini once said of Israel, and which was repeated by Mahmoud Amedinejad, deliberately mistranslated by MEMRI and flogged as evidence of the Iranian's malevolent intent).
GovRant: Maybe Even Before 2025?
Without wanting to get too melodramatic - and making it clear that I fully expect the US Congress to fulfill its role as tycoon's whore - I have been preoccupied this weekend with the events of early November, 1989. You might not recall the 11th and 12th of November, but I do, and it made a real impression on me.
At the time, I was a private hired goon: some years earlier I had quit being a trained killer, had dithered aimlessly through my early 20's. Well, I say 'dithered', but the dithering was punctuated by (and exacerbated by) a motorcycle accident that helped me lose 5 stone in two months. Along with the weight went all the self-esteem that comes with being 20 years old and 110kg with horse-steroids seeping from an intramuscular injection site once a week. Having 19" arms and being able to bench 330 does wonders for one's sense of invulnerability.
Anyway - as I say... having regained a 70-odd percent range of motion in my left shoulder, I went back on the gear (Dianabol, Deca-durabolin and Spectriol) and within a few months was back up to 100-odd kg and benching 300 again. I was still carrying some self-esteem issues though.
With bugger-all idea of what I would do while the lawsuit was in progress (the accident wasn't my fault, so of course I sued the other party), I resumed dithering.
So anyway. It was 1989.
Since September of that year, I had been taking a passing interest in what was going on in eastern Europe. In August - unbeknownst to me - Hungary had dismantled its border with Austria, and in September, East Germans had started seeking asylum en masse. Honecker had resigned, and massive demonstrations had started, culminating in a massive one in Alexanderplatz which I had seen on the news, I think.
Anyway, it was something I kept an eye on from time to time. Don't get me wrong - I would not let it make me late for the gym. But it was clear that momentous things were happening.
It was the morning of November 11th - about 10 a.m., maybe a little later - and in getting ready to go to the gym I happened to look at the telly. And bugger me if it didn't seem that East Germany had ceased to exist (more accurately, it was in its death throes).
Even then - at the age of 24 - it was clear to me that Communism/Socialism was unlikely to work. I had no understanding whatsoever of the theory, but it just struck me that the whole Eastern bloc was run by scowling arseholes. That's as deep as the analysis went in those days: the political world was divided into arseholes and not-arseholes. Arseholes didn't always scowl. As far as I could tell, there were about 20 not-arseholes on the planet; none of them was a politician.
Come to think of it, that's not a bad basis for a political theory - except that it must be added that 49 people out of every 50 are basically nice: the 50th should be killed.
I was utterly uninterested in domestic politics at the time: still am - except as a target for disgust, and a near-homicidal hatred of all politicians of whatever stripe. I've voted precisely once in my life: in a Victorian State election, for Jan Wade - a pointless vote for the incumbent in the Liberal safe seat of Kew. I voted only because the polling booth was near where Joanna and I were having breakfast, and because she had enrolled me to vote, the silly moo. I took steps to remove myself from the electoral rolls straight away thereafter. So don't tell me that voting is compulsory in Australia... people who don't vote are legion. The compulsory nature of voting is a scam designed to give an undeserved credibility to the final 'mandate' of the government.
Now why would your beloved GT be musing on events in East Germany in 1989 - a little under 19 years ago? Simple.
A lot of folks - mostly Americans, who think the entire world lives on sunshine emanating from the arsehole of their country - as I say, a lot of folks think that it was the arms race, or the posturing of that fake windbag Reagan, that put paid to East Germany (and later, the Soviet Union). That is naive bullshit - anybody who parrots that line should be dismissed as a critical thinker immediately. Ronny Ray-gun's massive deficit spending on armaments actually set in train the disaster that we see today in the States - not because of the spending per se, but because of the manner in which all press criticism of it was stifled.
That was when the US system moved to a genuinely Imperial presidency: Ronny Ray-gun was the President who began the system whereby all the press were behind a rope near a lectern in front of a set of doors leading to a corridor... the Prez sweeps up to the podium, answers only those questions he wants to, smiles, waves, turns and sweeps back out.
Folks ate that shit up. So much so that everybody started doing it - even little Johnny Howard (he upon whose tombstone I will smear IRAQ in my own shit) got into the act.
Anyway... it was absolutely not the arms race that did for the Soviets.
So what was it?
It was a loss of faith by the population. People who had been force-fed a diet of bullshit for two generations finally decided that they had had it and were no longer prepared to be treated like livestock. So they jjust stopped complying, and relied on the assumption that since at least 80% of the (conscript) soldiery were just like them, the soldiery were likely to be just as pissed off.
And they were right.
You see, all political systems are systems based on lies. The promise of any system is that some set of careerist Party hacks can reallocate resources in such a way as to have growth which is greater and/or more evenly distributed than it otherwise would have been. That is really the sum total of the promise of those who want to be our policial overlords: add that they are almost invariably short men with persecution complexes (like little Sarko, the Runt-King of France... a 5-foot-5 Eastern European Reffo).
You can change the terminology - that politicians 'look after' infrastructure, that they build schools, that they administer national defence. But at the end of the day, all of those things would exist even if all the politicians were slaughtered in one long orgy of glorious humanity-advancing gore. The level of production of education, health and military services would change (and would likely become more efficient... monopoly production is always and everywhere of lower quality and efficiency than competitive provision).
So anyhow... politicians expand certain parts of the economy - education, health spending (but not health care necessarily), welfare and warfare - to a greater extent than the free market would provide. To do so, they extract money from their polity under threat of violence: at the end of the day, you either pay your taxes, or your face arrest, imprisonment, asset forfeiture... and if you resist, death at the hands of the armed goons that the government send to kidnap you. Either that, or you can flee (I recommend Central France).
For periods of varying length (depending on the success of the political classes' propaganda), people are prepared to accept the lie that what is being done with their money is an economic enhancement - while vast sums are quietly shovelled to the cronies of the political classes. There has never been a political system in which there were not cronies who got palaces as a result of beeing given stuff by the rulers.
But then the State goes too far: it starts getting sloppy, and stops feeling any obligation to hide its corruption. Payola to and from the cronies of the political class goes from being a hidden aspect of political life, to something that is not even hidden anymore. Think "The Court of the Sun King" - or the white House, circa 2008.
In the Soviet world, it took the form of ever-larger country dachas for Party apparatchiki. By the end, the Soviet hierarchy were living lives not dissimilar to those of Western oligarchs... while the great mass of people were going backwards at an accelerating rate. Without a private credit market to enable Soviet citizens to borrow, they did not have recourse to debt to fund the lifestyle which the parasite-infested economy would not furnish otherwise.
And that's the secret: up til now, Joe Schlub the 'Merkin has been able to borrow, to spend on credit in order to give his life the veneer of success. All the touts who blather about America being the richest country on the planet, are looking at expenditure per head. They are looking at snapshot asset valuations at the peak of a credit-induced, generation long asset bubble... during which a lot of the equity in those assets has been spent. And when they look at measures of net worth, they concentrate on average wealth per capita - whle for at least four generations the national wealth has been being funnelled upwards at the behest of the political class.
Now that it seems that there will be a much-reduced access to credit markets for individuals, and now that the wealth transfer to the politically-connected is becoming more and more naked, we run the risk that Joe Schlub finally awakens to the fact that he has been played.
As we saw in Eastern Europe in the late 1980s, an entire political system can be reduced to so much vapour in days. It is not too much to say that the United States - which I declared in 2000 was going to be three countries by 2025 - is literally a week away from being thrown completely off balance.
And it's not Paulson's Golem that will save it if it is to be saved. It is the continuing ignorance of its population: Russian peasants under the 8 Soviet leaders may not have had access to Google, but they had the common sense that one finds in those who live by the genuine sweat of their own brow. I'm not as stupid as Rousseau, in that I don't believe in a inherent nobility of the agrarian working classes - but I think that they are far more aware of their lot than American-Idol-watching, Dorito-eating mouth-breathers.
The peasantry usually knows when the system is being gamed well before the urban majority - not least because the reach of the government's goon squads is always weaker in the regions. I'm not saying that dirt farmers are Aristotle or Socrates, but a ten minute conversation with a cattle farmer will contain more sense - and less support for statism - than a two hour conversation with a schoolteacher or a functionary.
Posted by GT at 10:19:00 AM
OzRant: Upward Tilt at the Close...
With the Theatre of the Absurd continuing to play out in Washington - with the pretence that there is any risk that the banksters don't get their trillion bucks - and with Washington Mutual having been taken over by regulators... let's take a shot at understanding how hard it is to be a bank.
When you're a bank, you're protected from genuine open competition - you participate in a government-ordained oligopoly with limited competition from foreign entities.
When you're a bank, you gain a spread between your risible deposit rates (after fees, most deposit holders earn zero or negative net interest) and the rate at which you can loan money - which is set in an oligopolistic marketplace with endemic collusion.
When you're a bank, you can loan out a staggering multiple of the funds you have on deposit - earning the spread on the first multiple, and the entire rate on the remainder.
When you're an Australian bank, you have the added benefit that almost every wage-earner is forced to be paid by electronic transfer - employers have the right to refuse to pay people in cash: this necessitates more people having bank accounts than would be the case in a free society. No more yellow envelopes... but millions of $5 a month 'account keeping fees'.
When you're National Australia Bank, and your client does an international transfer, you use an exchange rate more than TEN CENTS above spot to convert from $A to Euro (spot at the time: $A1.7345 $A = 1€ ; rate used by NAB: $A1.8460 = 1€ ... plus a $4 fee!)... pocketing the difference. I am certain that conversions going the other way are similarly clipped.
When you're National Australia Bank, an outgoing payment is deducted in seconds... an incoming payment sits on their books for at least three days before it is credited to the customer's account.
In short, when you're a bank - particularly if you're NAB, who appear to be the absolute worst offender - the entire business landscape is tilted in your favour... and yet they manage to cock it up with misadventures like Homeside, and Australian banks' RoE does not reflect the massive monopoly power and entrenched privilege they enjoy. (Disclosure: I don't bank with NAB).
Bankers are the ones who - in every economy in which they have ever operated - have driven the major economic crises of the day. Every single one - from the John Law crisis in pre-Revolutionary France, to the manifold economic crises of the 19th century, through to the Great Depression. Of course they are always aided and abetted by politicians, who profit greatly alongside them as they drag the polity into a morass. Politicians are the coin-clippers and cheque-kiters of history - they who call each other "The Honourable Member for [X]"... but they are the only people apart from journalists and primary school children who think that the 'Honourable' bit of that nomenclature is merited.
A lot of dills throughout history have blamed, and continue to blame, the 'Red Sea Pedestrians' - they've been kicked out of country after country over the centuries (in some countries they were let back in, but then kicked out again years or even centuries later). They've been the 'short sellers' of history - blamed when crises have unfolded, simply because some of their number were lenders-at-interest (i.e., bankers).
My only beef with da Jooze is the same as my beef with the Musselmen, the Micks, the Protties, and snake-kissing speaking-in-tongues loonies from the Deep South in the US: namely, that they are all either delusional or frauds.
Delusional - or if you prefer, 'looney' - is what we call people who hear voices and who think that belonging to a group of similarly-delusional people confers inherent superiority. And those people who claim to hear voices but who actually don't are the frauds.
The 'looney' label also goes for anybody who thinks that there is a giant Sky Wizard who listens to them, or gives a flying rat's ass if they go to church/mosque/synagogue or not. And that goes for the lot of them... from Zulu witch-doctors to imams, to the Grand Rabbi and the Pope.
And don't tell me that religious faith is harmless. You might think it's sweet that someone's Nan believes in the Sky Wizard, and that it gives her solace now that Gramps is off the twig. But that very belief is exploited in every war, and the Nans of the day become the women who send white feathers to those who see through the sham. Nans are among the most bloodthirsty on the home front - because they believe in the Righteousness of The Cause. "Onward Christian Soldier" - a vile tale of the righteous wreaking of death and destruction on one's fellow men - was written by a middle aged woman 'believer'.
I included the Pope in the list above, even though anybody in such a position is highly unlikely to believe in God... like all positions of great power, to get there you have to spend an entire career positioning yourself: jostling for the eventual run at the throne. You are, thereby, a politician: venal, scheming and amoral. Look at Pope Rattie-of-the-Hitler-Jugend Ratzinger's eyes.
Now if I am wrong, and those who hear voices aren't delusional and are to be taken at their word, Charles Manson ought to be released immediately, 'coz he was acting under orders from the same Sky Wizard. Those orders were very consistent with the orders the Sky Wizard gave to Moses in the Old Testament - genocide, mayhem, butchery.
I usually try not to get into the whole shebang that revolves around the Eastern-European peasant pretenders currently occupying Palestine based on some spurious historical narrative, so I will stop here, and we will move on to the markets... where you don't have to believe in anything.
How sweet it is...
I've said it before, and I'll keep saying it until I'm blue in the face... when the 'hangers on' are all a-flutter - in either direction - then the only place to be is on the other side of the trade.
And of course we know that apart from schoolteachers, the ultimate hangers-on are journalists. Calling yourself a 'finance journalist' is basically an admission that you don't have the skills to actually make a living from trading or investing... yet somehow you're equipped to tell others how to do so.
Schoolteachers are - on the whole, and with five exceptions in my entire life - pig ignorant (the exceptions: Mr Rodgers (Y10 Advanced Maths), Mr Fox (Y12 Pure Maths), Mr Statham (Y12 Physics), Mrs Brown (Y12 English), Mrs Nacholinski (Y10 French) ... and maybe Mr Dobinson (Y12 Applied Maths). The rest were people who basically had no alternative use except if they were ground up and used to feed pigs.
And just think - they all became teachers before the bureaucratisation of education. At the time they were teaching me, most of the good'uns were in their 50s or 60s (although Mr Fox and Mr Statham were younger). Mr Rodgers was a tail gunner in a Liberator during WWII.
In more recent history, have never known an Honours level undergraduate in any discipline who then undertook a teaching 'qualification', but I can give you forty examples of people who didn't make the Honours class and who decided to become teachers. Teaching courses are absolutely chock full of the also-rans from other disciplines. Teaching courses are the Special Olympics of the university world.
The few talented-but-lazy people who gravitate toward teaching after an unsuccessful undergraduate stint (like my former colleague Matthew Peter) seldom stomach it for long - those individuals generally then make a decision to get back into proper intellectual harness. Thus Matt, having surfed during his undergraduate years and having never gotten more than 60% in any subject as an undergrad, spent a year or so teaching, hated it. He then returned to Uni and eventually got his doctorate and went to work for a very good hedge fund.
Journalists - on the whole - are almost as stupid as schoolteachers. They are herd animals - and it is a watchword in the World of Rant that when all four major journalism outlets (Bloomberg, CNBC, CBSMarketWatch and Reuters) are on the same side of the boat, we want to be on the other side (and preferably, in another boat altogether).
OzRant: Back Up The Truck...
Ordinarily I would write something about how the intraday bounce erased almost half of the early decline, and how we're not going to find a bottom while everybody is looking for it... given the lack of a final 'flush' downwards - a high volume session in which th market closes near its low. The usual schtick.
But - to use the phrase so often implied by brokerage shills - this time it's different.
How come? I hear you muse.
Simple, silly. The Tycoon's Whores in the US are undertaking a little bit of political-campaign theatre in order to wring as many posturing-points as possible out of this event. In the end tthey will do what they're paid to do - drop to their collective knees and administer the trillion-dollar blowjob that Wall Street is demanding - which will give the world financial system the equivalent of gonorrhoea crossed with Ebola, and which will have an eventual price tag of $5-6trillion.
That's the 'bullshit gap' for this bill. The political class is not willing to give any hint to the polity that the bill will be that high, though. I'm sure you all now recall the similar underquotes given for other little projects... the Iraq War was going to be a short affair that paid for itself (Perle, Wolfowitz), or would cost $50-70 bill (Rumsfeld in response to Summers) or would cost $200 bill (Summers, just before being fired for saying so).
The actual cost of Iraq (thus far)? About $850 bill once the latest trillion-dollar trough for the Pentagon is refilled. With accrued liabilities for health care and pensions, Stiglitz thinks the final cost will be $3-$6 trillion.
However as we all know, government is not obliged to do accrual-accounting: if government budgets around the planet moved to accrual accounting (recognising future liabilities as they are incurred), the mask would slip and we would all see that this government lark loses money hand over fist.
But back the the 'failure' of the US bailout. Or as I prefer to say, the rather neat political campaign move by the Republicans (who voted 2:1 against the bill... the Democrats were about 60% for the bill).
In a week the average Yank won't know who voted for or against, since each episode of America's Got Talent and America's Next Top Model are the national equivalent of a reset button for the brain. Plus, every news outlet from Bloomberg to FauxNews has reframed the entire thing into a politician's talking points... it's not a 'bailout', it's a plan to help working 'merkins. Hell, even I support that... everybody's merkin should work.
(A merkin is either a pubic wig, or one of those electrical fake vaginas... depends on who you ask, but either way fits with the US national identity: fake, cheap, and utterly lacking in class: the entire US 'Empire' is like a fat bird who gets a(nother) tattoo and dyes her hair to try and become more attractive, instead of spending twenty minutes a day not shovelling fast food into her gob).
But I digress...
What Joe Schlub will remember is that the Democrats control both houses. The Republicans will make a hue and cry in their press (the NYT, the WSJ and so on), decrying the Pelosi-led process... and will be seen as the driving force behind a new bill. The new bill will pass, and the Republican campaign of John the Collaborating War Criminal McCain will be rescued from meltdown.
And - not to put too fine a point on it - if the markets continue to be weak, the Republicans will try and stall the Vice Presidential debate, which will avert another revelation of the almost Bushian stupidity of Caribou Barbie, who would become Roadkill Barbie if she had to debate a waffling fraud like Biden. (For those who are wondering: yes, if I was single I would... but only if I had a well planned escape route - because Caribou Barbie is a dead set nutcase).
So in a nutshell: at the start of today's US session, sell bonds and buy the Dow. (Or buy SPI futures in the overnight).
OzRant: No Fireworks? Odd...
I admit a certain bewilderment at the market's behaviour today: I never expected the post-bailout orgasm to last, but it's hard to believe that it only lasted 25 minutes of the Australian session.
After all, the Tycoon's Whores of the US Congress are a lay down misère to pass Wall Street's biggest-ever tax-funded payday. I seriously doubt that the market reaction we've seen thus far represents a manifestation of the old 'Buy the rumour, sell the news' mantra - after all, the market is now dominated by people who are dumber than a bag of offal (even hedge funds are now staffed almost entirely by people who behave like small spec futures traders... late onto any trend, buying tops and selling bottoms... that's why so many hedge funds have blown up lately).
Perhaps Strayan market participants are anticipating a Wall Street hissy-fit since they haven't got exactly what Goldman's Trojan Horse (Mr Hankie) demanded. Apparently the deal (at the moment) is that they only get half of the $700 bill up front.
The fact is, this bailout is going to cost waaaaaaaaaaaaaaaaaay more than the $700 bill that is claimed.
As I said when the political class first started with the claim that the cost of the subprime meltdown would be "between $50bn and $100 bn"... the $700 claimed bailout price tag is bullshit.
I said at the time (look in the archive) that the cost of the subprime mess would be at least a trillion and a half. At the moment (ignoring Fannie and Freddie, Lehman, AIG and Merrill) the total writeoffs have run to about $650 bill... so we are almost halfway there. If you include Fannie and Freddie, the total cost balloons to about $5 trillion, because its assets are now worthless.
This latest bailout will, when all is said and done, cost about half of one years US GDP. that is, about $6 trillion. And it's not important whether you believe me or not, because you just know I am going to yell "I told you so" when it turns out that I'm right.
So thus far, the US whiz kids have generated a transfer of problems from the market to the government, totalling - eventually - a year's worth of US GDP. That signals the beginning of a process that can only end in a US default on its sovereign debt.
The US dollar is already losing its reserve status - slowly, but surely - and once that is gone the end game will be stunningly quick. The one thing that stands in the way of a more rapid unraveling, is the gutlessness of Moody's and S&P when it comes to rating US government debt: they are too chicken to declare openly that the US can never make good on its debt.
Think of the US as a company. It has 'revenue' (the taxes extorted from taxpayers) of a couple of trillion dollars. It has a negative operating cash flow - even on a cash basis - so think of that as negative EBITDA.
Once you add in accruals for the promises it has already made (pensions, and so on) its annual loss is four or five trillion dollars.
And it has recently acquired a dog of an asset - the loan book of Fannie and Freddie - and is about to write a cheque which in the fullness of time will amount to twice its annual revenue.
If you were a credit analyst and you had such a company in front of you, it would rate C- (at best)... junk, and bad junk at that.
And it wouldn't matter how many cruise missiles or battleships or trained killers it had, the thing would be obvious as a candidate for disappearing from the pages of history (as the Ayatollah Khomeini once said of Israel, and which was repeated by Mahmoud Amedinejad, deliberately mistranslated by MEMRI and flogged as evidence of the Iranian's malevolent intent).
GovRant: Maybe Even Before 2025?
Without wanting to get too melodramatic - and making it clear that I fully expect the US Congress to fulfill its role as tycoon's whore - I have been preoccupied this weekend with the events of early November, 1989. You might not recall the 11th and 12th of November, but I do, and it made a real impression on me.
At the time, I was a private hired goon: some years earlier I had quit being a trained killer, had dithered aimlessly through my early 20's. Well, I say 'dithered', but the dithering was punctuated by (and exacerbated by) a motorcycle accident that helped me lose 5 stone in two months. Along with the weight went all the self-esteem that comes with being 20 years old and 110kg with horse-steroids seeping from an intramuscular injection site once a week. Having 19" arms and being able to bench 330 does wonders for one's sense of invulnerability.
Anyway - as I say... having regained a 70-odd percent range of motion in my left shoulder, I went back on the gear (Dianabol, Deca-durabolin and Spectriol) and within a few months was back up to 100-odd kg and benching 300 again. I was still carrying some self-esteem issues though.
With bugger-all idea of what I would do while the lawsuit was in progress (the accident wasn't my fault, so of course I sued the other party), I resumed dithering.
So anyway. It was 1989.
Since September of that year, I had been taking a passing interest in what was going on in eastern Europe. In August - unbeknownst to me - Hungary had dismantled its border with Austria, and in September, East Germans had started seeking asylum en masse. Honecker had resigned, and massive demonstrations had started, culminating in a massive one in Alexanderplatz which I had seen on the news, I think.
Anyway, it was something I kept an eye on from time to time. Don't get me wrong - I would not let it make me late for the gym. But it was clear that momentous things were happening.
It was the morning of November 11th - about 10 a.m., maybe a little later - and in getting ready to go to the gym I happened to look at the telly. And bugger me if it didn't seem that East Germany had ceased to exist (more accurately, it was in its death throes).
Even then - at the age of 24 - it was clear to me that Communism/Socialism was unlikely to work. I had no understanding whatsoever of the theory, but it just struck me that the whole Eastern bloc was run by scowling arseholes. That's as deep as the analysis went in those days: the political world was divided into arseholes and not-arseholes. Arseholes didn't always scowl. As far as I could tell, there were about 20 not-arseholes on the planet; none of them was a politician.
Come to think of it, that's not a bad basis for a political theory - except that it must be added that 49 people out of every 50 are basically nice: the 50th should be killed.
I was utterly uninterested in domestic politics at the time: still am - except as a target for disgust, and a near-homicidal hatred of all politicians of whatever stripe. I've voted precisely once in my life: in a Victorian State election, for Jan Wade - a pointless vote for the incumbent in the Liberal safe seat of Kew. I voted only because the polling booth was near where Joanna and I were having breakfast, and because she had enrolled me to vote, the silly moo. I took steps to remove myself from the electoral rolls straight away thereafter. So don't tell me that voting is compulsory in Australia... people who don't vote are legion. The compulsory nature of voting is a scam designed to give an undeserved credibility to the final 'mandate' of the government.
Now why would your beloved GT be musing on events in East Germany in 1989 - a little under 19 years ago? Simple.
A lot of folks - mostly Americans, who think the entire world lives on sunshine emanating from the arsehole of their country - as I say, a lot of folks think that it was the arms race, or the posturing of that fake windbag Reagan, that put paid to East Germany (and later, the Soviet Union). That is naive bullshit - anybody who parrots that line should be dismissed as a critical thinker immediately. Ronny Ray-gun's massive deficit spending on armaments actually set in train the disaster that we see today in the States - not because of the spending per se, but because of the manner in which all press criticism of it was stifled.
That was when the US system moved to a genuinely Imperial presidency: Ronny Ray-gun was the President who began the system whereby all the press were behind a rope near a lectern in front of a set of doors leading to a corridor... the Prez sweeps up to the podium, answers only those questions he wants to, smiles, waves, turns and sweeps back out.
Folks ate that shit up. So much so that everybody started doing it - even little Johnny Howard (he upon whose tombstone I will smear IRAQ in my own shit) got into the act.
Anyway... it was absolutely not the arms race that did for the Soviets.
So what was it?
It was a loss of faith by the population. People who had been force-fed a diet of bullshit for two generations finally decided that they had had it and were no longer prepared to be treated like livestock. So they jjust stopped complying, and relied on the assumption that since at least 80% of the (conscript) soldiery were just like them, the soldiery were likely to be just as pissed off.
And they were right.
You see, all political systems are systems based on lies. The promise of any system is that some set of careerist Party hacks can reallocate resources in such a way as to have growth which is greater and/or more evenly distributed than it otherwise would have been. That is really the sum total of the promise of those who want to be our policial overlords: add that they are almost invariably short men with persecution complexes (like little Sarko, the Runt-King of France... a 5-foot-5 Eastern European Reffo).
You can change the terminology - that politicians 'look after' infrastructure, that they build schools, that they administer national defence. But at the end of the day, all of those things would exist even if all the politicians were slaughtered in one long orgy of glorious humanity-advancing gore. The level of production of education, health and military services would change (and would likely become more efficient... monopoly production is always and everywhere of lower quality and efficiency than competitive provision).
So anyhow... politicians expand certain parts of the economy - education, health spending (but not health care necessarily), welfare and warfare - to a greater extent than the free market would provide. To do so, they extract money from their polity under threat of violence: at the end of the day, you either pay your taxes, or your face arrest, imprisonment, asset forfeiture... and if you resist, death at the hands of the armed goons that the government send to kidnap you. Either that, or you can flee (I recommend Central France).
For periods of varying length (depending on the success of the political classes' propaganda), people are prepared to accept the lie that what is being done with their money is an economic enhancement - while vast sums are quietly shovelled to the cronies of the political classes. There has never been a political system in which there were not cronies who got palaces as a result of beeing given stuff by the rulers.
But then the State goes too far: it starts getting sloppy, and stops feeling any obligation to hide its corruption. Payola to and from the cronies of the political class goes from being a hidden aspect of political life, to something that is not even hidden anymore. Think "The Court of the Sun King" - or the white House, circa 2008.
In the Soviet world, it took the form of ever-larger country dachas for Party apparatchiki. By the end, the Soviet hierarchy were living lives not dissimilar to those of Western oligarchs... while the great mass of people were going backwards at an accelerating rate. Without a private credit market to enable Soviet citizens to borrow, they did not have recourse to debt to fund the lifestyle which the parasite-infested economy would not furnish otherwise.
And that's the secret: up til now, Joe Schlub the 'Merkin has been able to borrow, to spend on credit in order to give his life the veneer of success. All the touts who blather about America being the richest country on the planet, are looking at expenditure per head. They are looking at snapshot asset valuations at the peak of a credit-induced, generation long asset bubble... during which a lot of the equity in those assets has been spent. And when they look at measures of net worth, they concentrate on average wealth per capita - whle for at least four generations the national wealth has been being funnelled upwards at the behest of the political class.
Now that it seems that there will be a much-reduced access to credit markets for individuals, and now that the wealth transfer to the politically-connected is becoming more and more naked, we run the risk that Joe Schlub finally awakens to the fact that he has been played.
As we saw in Eastern Europe in the late 1980s, an entire political system can be reduced to so much vapour in days. It is not too much to say that the United States - which I declared in 2000 was going to be three countries by 2025 - is literally a week away from being thrown completely off balance.
And it's not Paulson's Golem that will save it if it is to be saved. It is the continuing ignorance of its population: Russian peasants under the 8 Soviet leaders may not have had access to Google, but they had the common sense that one finds in those who live by the genuine sweat of their own brow. I'm not as stupid as Rousseau, in that I don't believe in a inherent nobility of the agrarian working classes - but I think that they are far more aware of their lot than American-Idol-watching, Dorito-eating mouth-breathers.
The peasantry usually knows when the system is being gamed well before the urban majority - not least because the reach of the government's goon squads is always weaker in the regions. I'm not saying that dirt farmers are Aristotle or Socrates, but a ten minute conversation with a cattle farmer will contain more sense - and less support for statism - than a two hour conversation with a schoolteacher or a functionary.
Posted by GT at 10:19:00 AM
OzRant: Upward Tilt at the Close...
With the Theatre of the Absurd continuing to play out in Washington - with the pretence that there is any risk that the banksters don't get their trillion bucks - and with Washington Mutual having been taken over by regulators... let's take a shot at understanding how hard it is to be a bank.
When you're a bank, you're protected from genuine open competition - you participate in a government-ordained oligopoly with limited competition from foreign entities.
When you're a bank, you gain a spread between your risible deposit rates (after fees, most deposit holders earn zero or negative net interest) and the rate at which you can loan money - which is set in an oligopolistic marketplace with endemic collusion.
When you're a bank, you can loan out a staggering multiple of the funds you have on deposit - earning the spread on the first multiple, and the entire rate on the remainder.
When you're an Australian bank, you have the added benefit that almost every wage-earner is forced to be paid by electronic transfer - employers have the right to refuse to pay people in cash: this necessitates more people having bank accounts than would be the case in a free society. No more yellow envelopes... but millions of $5 a month 'account keeping fees'.
When you're National Australia Bank, and your client does an international transfer, you use an exchange rate more than TEN CENTS above spot to convert from $A to Euro (spot at the time: $A1.7345 $A = 1€ ; rate used by NAB: $A1.8460 = 1€ ... plus a $4 fee!)... pocketing the difference. I am certain that conversions going the other way are similarly clipped.
When you're National Australia Bank, an outgoing payment is deducted in seconds... an incoming payment sits on their books for at least three days before it is credited to the customer's account.
In short, when you're a bank - particularly if you're NAB, who appear to be the absolute worst offender - the entire business landscape is tilted in your favour... and yet they manage to cock it up with misadventures like Homeside, and Australian banks' RoE does not reflect the massive monopoly power and entrenched privilege they enjoy. (Disclosure: I don't bank with NAB).
Bankers are the ones who - in every economy in which they have ever operated - have driven the major economic crises of the day. Every single one - from the John Law crisis in pre-Revolutionary France, to the manifold economic crises of the 19th century, through to the Great Depression. Of course they are always aided and abetted by politicians, who profit greatly alongside them as they drag the polity into a morass. Politicians are the coin-clippers and cheque-kiters of history - they who call each other "The Honourable Member for [X]"... but they are the only people apart from journalists and primary school children who think that the 'Honourable' bit of that nomenclature is merited.
A lot of dills throughout history have blamed, and continue to blame, the 'Red Sea Pedestrians' - they've been kicked out of country after country over the centuries (in some countries they were let back in, but then kicked out again years or even centuries later). They've been the 'short sellers' of history - blamed when crises have unfolded, simply because some of their number were lenders-at-interest (i.e., bankers).
My only beef with da Jooze is the same as my beef with the Musselmen, the Micks, the Protties, and snake-kissing speaking-in-tongues loonies from the Deep South in the US: namely, that they are all either delusional or frauds.
Delusional - or if you prefer, 'looney' - is what we call people who hear voices and who think that belonging to a group of similarly-delusional people confers inherent superiority. And those people who claim to hear voices but who actually don't are the frauds.
The 'looney' label also goes for anybody who thinks that there is a giant Sky Wizard who listens to them, or gives a flying rat's ass if they go to church/mosque/synagogue or not. And that goes for the lot of them... from Zulu witch-doctors to imams, to the Grand Rabbi and the Pope.
And don't tell me that religious faith is harmless. You might think it's sweet that someone's Nan believes in the Sky Wizard, and that it gives her solace now that Gramps is off the twig. But that very belief is exploited in every war, and the Nans of the day become the women who send white feathers to those who see through the sham. Nans are among the most bloodthirsty on the home front - because they believe in the Righteousness of The Cause. "Onward Christian Soldier" - a vile tale of the righteous wreaking of death and destruction on one's fellow men - was written by a middle aged woman 'believer'.
I included the Pope in the list above, even though anybody in such a position is highly unlikely to believe in God... like all positions of great power, to get there you have to spend an entire career positioning yourself: jostling for the eventual run at the throne. You are, thereby, a politician: venal, scheming and amoral. Look at Pope Rattie-of-the-Hitler-Jugend Ratzinger's eyes.
Now if I am wrong, and those who hear voices aren't delusional and are to be taken at their word, Charles Manson ought to be released immediately, 'coz he was acting under orders from the same Sky Wizard. Those orders were very consistent with the orders the Sky Wizard gave to Moses in the Old Testament - genocide, mayhem, butchery.
I usually try not to get into the whole shebang that revolves around the Eastern-European peasant pretenders currently occupying Palestine based on some spurious historical narrative, so I will stop here, and we will move on to the markets... where you don't have to believe in anything.
