25 Jul 2012

Banker Brushfires Risk Jumps - Jim Willie

By: Jim Willie CB, As preface, consider that the USTreasury 10-year yield went below 1.4% this week. Some unenlightened celebrate the asset appreciation and point to a successful asset in performance in an otherwise dismal financial market. The Jackass said in the June 6th public article "USTBonds: Black Hole Dynamics" that such a success is a marquee billboard message of economic meltdown and systemic failure. As the rally continues, possibly the onliest rally outside of corn and soybeans in yet another disaster, people should focus on whether the systemic collapse will occur before the 10-yield hits 1.0% in my warning. Focus on four major points:

  • The unspoken effect of ZIRP (0%) is the powerful ongoing destruction of capital, as the entire cost structure rises
  • As equipment goes off line further, the USEconomy will weaken further, in a powerful vicious cycle
  • The official Zero Percent Interest Policy is the calling card of the Gold Bull Market, powered by negative inflation adjusted returns on savings
  • The USTBonds will fail from their own success, unleashing the Gold Price when the investment community and global creditors realize no further potential appreciation in the most massive asset bubble in modern history, supported by Interest Rate Swap derivative machinery. Money will eventually fly out of bonds and seek true safe haven.
Fear not. The USTBond 10-year yield (TNX) will not and cannot reach below 1.0% as all ponderings of a world with 0% on 10-year yield are divorced from reality. The Black Hole is working hard, gathering force, amplifying the gravitational field. It is happening right on schedule, no surprise here, a very easy correct forecast. The original supposed Flight to Safety in the USTBonds was totally fabricated and phony. As mentioned at least a dozen times by the Jackass, the last half of year 2010 saw the dutiful Wall Street outpost Morgan Stanley devote a fresh $8 trillion in interest rate derivatives, fully documented by the Office of the Comptroller to the Currency. Their reports never make the headlines, since they are so chock full of rancid fetid scum. As the TNX  marches down the swirling pathways within the vast USGovt debt sewer-like cisterns, their energy will be derived from the massive recession that has engulfed the US Economy.

You Didn’t Build That - azizonomics

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business–you didn’t build that. Somebody else made that happen. The internet didn’t get invented on its own. Government research created the internet so that all the companies could make money off the internet.
Much of the blogosphere has defended Obama’s statement, along one of two lines:
  1. That Obama didn’t mean that business-owners didn’t build their businesses — he was talking about infrastructure creation and the wider economic, legal and political system.
  2. That Obama is right — and businesses owners are really not responsible for building their businesses.
Both of these arguments are nonsensical.
Economic and business growth is a complex and multi-dimensional thing, driven by the complex relationship between both supply and demand. To claim that those who put the legwork into building a businesswhether that is the owners, or workers — “didn’t buildthe business is totally false and absurd.

G. Edward Griffin - Currency & The Federal Reserve (The Creature From Jekyll Island)

The banking cartel appoints the president who is then effectively given a list of one to choose from by the banking interests that have already paid for both sides of the political contest, to complete the illusion for the public that the president they elected picks the FED chairman who is therefore subordinate to the president when in fact he is not, he is picked and paid for by the bankster cartel. Source

China will be Growing in Low Single Digits - Gordon Chang

At the Recovery Reality Check Casey Research Conference in Weston, Florida, Casey Research's Chief Metals and Mining Investment Strategist Louis James sits down with Gordon Chang, columnist at Forbes.com. Source

The Syrian WMD Lies With Webster Tarpley + Aleppo Critical - Helicopter GunShips Used - Mr Aleppo + 'Gangs destruct Syria on behalf of Israel'

Morris: A lot of fighting in Aleppo over the last three days. Mr Aleppo is there and explains. Apologies for some poor sound quality.

ECONOMISTS: 'Europe Is Sleepwalking Toward A Disaster Of Incalculable Proportions'

By Alexandra Hudson: The eurozone faces economic disaster unless its financially stronger states and its central bank commit to bearing a larger share of the region's debt burden, leading global economists including two advisers to the German government said.
"We believe that ...Europe is sleepwalking toward a disaster of incalculable proportions... The sense of a never-ending crisis, with one domino falling after another, must be reversed," the Institute for New Economic Thinking (INET, AKA BSBR Bankster Shill Brain Rinse), backed by veteran investor (currency rapist) George Soros, wrote in its report.
Policymakers must tackle two problems separately - dealing with the legacy costs of the "initially flawed design" of the euro zone, and fixing the structure of the bloc itself.
Among their recommendations, the economists called for an early partial mutualisation of the region's debt - which Germany has refused to consider - and the eventual creation of a supranational financial watchdog with authority over national regulators.
They also urged the European Central Bank to become a lender of last resort in the longer term for states that meet budget targets, or allow the region's ESM rescue fund to play that role and give it a banking license.
The ECB has hitherto strongly objected to both options, though central bank policymaker Ewald Nowotny said on Wednesday there were arguments for giving the ESM a banking license to increase its capacity.
Nowotny's comment reinforced indications that the euro zone crisis has entered a dangerous new phase, with Spain edging towards a full sovereign bailout and evidence mounting up that Greece cannot meet the terms of its emergency funding, possibly triggering its exit from the single currency.
INET (BSBR) said although Europe's leaders recognized the need for a collective response, surplus and deficit countries had so far failed to agree on a plan that convinced markets and addressed public needs. Steps taken at summits earlier this month and in June did not go far enough.

British Double Dip Accelerates Following "Terrible" GDP Data - ZeroHedge

Tyler Durden's picture If the UK was desperately hoping for a "terrible" economic print, it got it this morning after preliminary Q2 GDP printed 0.7% on expectations of a -0.2% decline, following a -0.3% drop in Q1, cementing the country's double dip collapse. Reuters explains: "The Office for National Statistics said Britain's gross domestic product fell 0.7 percent in the second quarter, the sharpest fall since early 2009 and a bigger drop than any of the economists surveyed in a Reuters poll last week had expected. The figures confirmed that Britain is mired in its second recession since the financial crisis, with the economy shrinking for a third consecutive quarter. It will add pressure on Osborne to get the economy growing again after a crisis that has left many Britons poorer as rising prices and higher taxes ate up meager wage increases. Sterling hit its lowest in nearly two weeks against the dollar after the data, and government bond prices rallied on speculation that the Bank of England may have to provide more economic stimulus than expected. Earlier this month the BoE has announced another 50 billion pound program of gilt purchases with newly created money to soften a grim economic outlook, but Wednesday's data is likely to add to market speculation that it may cut interest rates later this year. 
"This is terrible data. Frankly there's nothing good that comes out of these numbers at all," said Peter Dixon, an economist at Commerzbank. "The economy looks to be badly holed below the water line at this stage. It's a far worse period of activity than we'd expected."" Amusingly, according to Goldman "It is difficult to reconcile the weakness of today’s official
GDP data with any other indicator of economic or labour market activity." We knew the peripherals were doing all they can to sabotage their economies and be eligible for more aid and bailouts. But the UK?

Obama's drones 'militant' definition "Any male over 16 in Strike Zone"

US led drone strikes have killed more than 150 supposed militants in Pakistan so far this year and zero civilians - that's from a recent New America Foundation poll. However, critics say the Obama Administration, with its definition of 'militant', is blurring the line between what's classed as a civilian and what's a threat. Source

Mike 'MISH' Shedlock with Charlie McGrath

How A Country Rationally Exits The Eurozone - Gonzalo Lira

We are about to experience the Euro Exit Crisis.
Mish Shedlock and I have a private bet as to whether Italy or Spain will exit first—he says Italy, I say Spain. But either way, it’s gonna pretty much suck.

The whole point of exiting the eurozone is because a country no longer has the money to finance its continuing operations. Insofar as Spain, Greece and possibly Italy, that moment will arrive shortly—possibly within
days in the case of Spain. So if a sovereign government reaches this moment, it will have no choice but to exit the EMU and revert to a local currency which the government can then devalue.

By doing this, the government simultaneously has all the cash it needs to continue operations, and also inflates away its debts. The private sector gets a shot of adrenaline insofar as foreign trade is concerned, because its goods and services become that much cheaper on the foreign markets. And the employment situation gets a boost, as those producers selling their cheap goods and services overseas begin to hire more workers to fulfill demand.

The downside is that the government gets shut out of foreign bond markets, its financial sector takes a huge hit, and prices for essential goods and services rise dramatically, hurting the poor, the lower middle-class, the elderly, and the unprepared.

Even with these negatives, though, a forced conversion and devaluation is a boon to bankrupt nations. It is, basically, a reset of the economy: And historical experience shows that though it hurts a lot in the short term, it helps to reignite an economy, and get the people moving once again.

NWO Shill Bloomberg: police should strike until government acts on gun control

By Madison Ruppert:  
(Image credit: David Shankbone)
Michael Bloomberg, NWO Shill, the Mayor of New York City, has been an outspoken critic of the Second Amendment for quite a while and co-founded the group known as “Mayors Against Illegal Guns” in 2006.
Bloomberg has jumped on the tragic shooting at the midnight showing of the new Batman film with alacrity in order to shamelessly push his anti-gun agenda which is perfectly in line with that of the United Nations.
On Monday night’s “Piers Morgan Tonight” on CNN, Bloomberg made some astounding statements, not the least of which is saying that police should actually strike unless the public somehow forces the legislature to “do what’s required to keep us [meaning the police] safe.”
Oddly enough, Bloomberg seems to be completely ignorant of the fact that studies have shown that private gun ownership actually reduces crime and thus keeps people safe.
If Bloomberg and his anti-gun pals had their way, it would be much more difficult for the average person to legally own a firearm, thus reducing the overall number of firearms in the population and actually working against the problem which Bloomberg is supposedly trying to solve.
“I don’t understand why the police officers across his country don’t stand up collectively and say, ‘We’re going to go on strike. We’re not going to protect you unless you, the public, through your legislature, do what’s required to keep us safe,’” said Bloomberg on “Piers Morgan Tonight.”

David Stockman: "The Capital Markets Are Simply A Branch Casino Of The Central Bank"

Tyler Durden's picture: A selected excerpt by David Stockman from his just released interview with Alex Daley of Casey Research:
This market isn't real. The two percent on the ten-year, the ninety basis points on the five-year, thirty basis points on a one-year – those are medicated, pegged rates created by the Fed and which fast-money traders trade against as long as they are confident the Fed can keep the whole market rigged. Nobody in their right mind wants to own the ten-year bond at a two percent interest rate. But they're doing it because they can borrow overnight money for free, ten basis points, put it on repo, collect 190 basis points a spread, and laugh all the way to the bank. And they will keep laughing all the way to the bank on Wall Street until they lose confidence in the Fed's ability to keep the yield curve pegged where it is today. If the bond ever starts falling in price, they unwind the carry trade. Then you get a message, "Do not pass go." Sell your bonds, unwind your overnight debt, your repo positions. And the system then begins to contract... The Fed has destroyed the money market. It has destroyed the capital markets.
Full Transcript: