...the vezzel wiya bezzle...has a pellet wiya poison...
...the pension fromma palace has a brew wot is true...
snowhite : (sotto voce)(to the audience) pssst!...don tell at painty bastard...
...but ahm glad he guardin me stash an not at bezzle b*stard...
...still avvin said that...santa look all pooped aht ta me...
NB chart is uk based and funds reflect the effect of currency movements
charts from equitable life are used as an illustration of sector performance comparisons only and not as a commentary on their investment performance. no opinionis offered here either for or against equitable life as a pension company...
...they just happen to have these charts... ...which i find very helpful... ...when comparing sector fund performance...
richie : hey ponzie...how come everyone stopped shoppin man?
ralf malf : yeahhhhhhh...crummy Christmas anna sucking new yeah...
potsie : whooeeee ponzi i think my strings have snapped...
ponzi : y'all jus stop suckin dudes...i gotta scheme ta get us outa this jam...
THE PONZI CHAPEL CEILING
paintybollox : shoot! ....ah jus bin onna ticker blog...anna bin shocked and awed...
zooneh : wot fo yo bin frazzled man?
beulah : at f**kin ticker jus blowin offa steam innit? ...he allus inna bate...
laverne : ah dunno beulie babe him n mish be two offa best bloggers onna planet...
spidah : onna web yo kin scare yo self...iffn yo aint street smart...
peteyangelo : that ole ticker gotta ponzi scheme all laid bare...itta woik o art...
ticker : ..."This is an uncomfortable reality, but it is reality.
Mr. Madoff stands accused of (in his own words) running "a Ponzi Scheme."
In fact, our entire economy over the last ten years, and really back to at least 1987, has been roughly equivalent to what Mr. Madoff was doing.
So has our government.
Let's go down the list of things that have been inflated beyond their natural boundaries, and look at how each and every one of them was destined to collapse - and why they're all collapsing at once:
The Internet Bubble.
The Housing Bubble.
The Stock and Credit Markets Generally.
Our Government's Finances.
There are many who say that our government debt-bubble will not collapse, and they list a whole host of reasons.
Why would you believe that?
Can you show, through history, one speculative bubble that has not popped?
Can you find one time - just once - that such a bubble was able to be grown without limit?
Simply put: No......
.......Americans have, as a nation, become fat, dumb, "entitled" and lazy.
There are many who argue that those who live "hand to mouth" don't have that choice. Really? Here are two statistics that make clear that this is simply false:
In 2003 there were 159 million cell phone subscribers in the United States, and the average monthly bill was $49.91. Penetration has since grown to approximately 70% of the population (from ~60% in 2003.) Since 25% of all persons are under the age of 18, the majority of the non-subscribers to cellular services are in fact children under the age of 10.
In 2002 58 percent of persons age 18 and over were overweight, and 23 percent were considered medically obese.
.....So in fact we have two "inconvenient facts" that contradict the claim that those who live "hand to mouth" and yet are working could not save for their retirement and old age if they decided to do so - the first being that they spend nearly $600 a year on cellular service - a luxury, and the second being that nearly 6 in 10 are consuming significantly more food (and paying for it) than their body demands for metabolic balance......
.........As the embedded (and fraudulently-concealed) debt continued to mount banks and other institutions found themselves performing a Madoff - that is, issuing new credit (debt) to be able to "show earnings" that in fact were a phantom. Unlike Madoff they did not have to go find someone new to put money in to be able to issue the checks to existing investors, since a bank that can operate with no reserve requirements imposed on it is capable of issuing as much credit as it wants, effectively "printing money."
.....Regulations and leverage limits are supposed to prevent this, but they were systematically and intentionally dismantled in the name of "financial innovation."
In truth they were dismantled in the name of a massive financial fraud that permeated every corner of our credit system, from credit cards to student loans to automobiles to housing.
This ponzi scheme even extended to individual consumers - that is, you.
If you HELOC'd out money and paid down your credit cards with it, then charged anew or cash-out refinanced, you were a Madoff. If you bought a house with an Option ARM, knowing full well you could not make make a fully-amortized "recast" payment, you were a Madoff. If you played the balance transfer game with your credit cards, rolling balances from one zero-interest offer to another, you were a Madoff.Tens of millions of Americans did one or more of these things - and each and every one of them - if not you then someone you knew - was running a personal version of Madoff's scheme.
Every organ of our government and regulatory system was involved in this knowing deceit and the complicity required for it to occur - Congress, The White House, Treasury, The Federal Reserve - and still is.
So why did the bubble collapse, if these institutions are able to continue to literally "print money" and the regulators were intentionally ignoring all of it?
The fundamental problem with all Ponzi Schemes, even those in which the operator is able to issue credit at will, is that it relies on people not challenging the books.
It requires "belief" - that is, confidence.
Thus the phrase "con game".
When Bear Stearns two hedge funds collapsed, the house of cards began to shake. People started looking at balance sheets and asking lots of very inconvenient questions, including exactly how one can have a mortgage-backed security rated "AAA" when 40% of the loans in it are either delinquent or in foreclosure. A few people started to listen to those who had analyzed the math, such as myself and Mish, and the light came on in their head - "Oh My God, they're right!"
See, while credit spends like money, it is not money. ........
.............You would think that Bernanke and Paulson would recognize what is going on - and that they are unable to stop the inevitable collapse.
Here's the problem - they do recognize it, but they are two of the architects of it, and admitting the truth means taking responsibility for what they have done.
That's not going to happen so long as they believe they can manage to keep the "con" going with someone.
The group of "someone's", however, is shrinking rapidly. Commercial and Investment bank loans, then Fannie and Freddie, then commercial paper issuers, and now various sorts of consumer loan products such as credit cards, automobile financing and student loans are all being shunned by those with actual money as they start to peek under the kimono and find not a pleasant sight but rather something both ugly and hairy staring back at them.
Thus, the transfer of all of this "credit" (really bad debt) no longer backed by money (as the producers have taken their ball and left) from the institutions that created the ponzi scheme to "the sovereign" - the Government - in all of its forms, whether it be Treasury or The Fed directly.
The latest announcement came on Friday, when The Fed loosened the terms of the TALF (one of its alphabet soup programs) and effectively allowed hedge funds to borrow from it.
This, incidentally, is why Bloomberg has had to sue The Fed to try to get disclosure of the crap they have taken on their balance sheet, and why Fox News announced that it is suing Treasury to gain disclosure of what they have taken on.
It is also why Markit has announced that they're "postponing" the listing of performance data on "Prime" mortgages - they were pressured to do so (by their own admission) because a published price means no more lying about values, and that could mean immediate (and monstrous) new writedowns for banks which hold trillions of dollars of "Prime" mortgages yet are valuing them pretty much "however they want."
As I said before, evil requires secrecy.
There is real (and justified) fear that should the truth of what is being held in these "Fed and Treasury programs" be disclosed in full that those with money (that is, producers) would flee United States Treasuries (and dollars.)
This is not an unjustified fear; it is, in fact, fear of exactly what has happened thus far and led to the collapse of AIG, Lehman, Bear Sterns and the near-collapse of Fannie and Freddie.
And what is The Fed using for its "credit grade"? Ratings from the same agencies that graded as "AAA" toxic subprime debt that all blew up.
If this last gambit fails so does our government's ability to deficit spend.
There is a near-100% probability that it will fail - we are simply arguing about the "when", not the "if".
See, without evidence that the debt (not deficit) they are asked to back will be paid down at some date-reasonable in the future, eventually the people with money will flee.
It is simply a matter of exactly when their confidence fails (that is, at what leverage ratio do they say "screw this!"), not if it will fail.
Removal of the ability to deficit spend, when the government will be running a $1 trillion+ deficit next year, would result in a roughly 25% instantaneous reduction in the government's budget - assuming tax receipts will be maintained. The problem is that they won't - with unemployment skyrocketing and GDP collapsing, tax receipts are likely to fall 30% or more, meaning that in all probability the government will find itself having to cut its budget in half on an immediate basis.
Since a goodly part of that budget is in fact interest and it cannot be cut (without causing a general default) the consequence would be a requirement to slash all government programs immediately by approximately 60% - including Medicare, Social Security, the military, education, other social programs (e.g. Title I) and everything else. In addition The Fed would be forced to immediately disgorge all of its bad assets into the market at whatever price they could be sold for, lest The Dollar become "de-currencied" almost instantaneously.
Think about Iceland and how quickly their situation unraveled.
hamish macrae : ..."I don't think Gordon Brown has any idea of the contempt in which he is held in the rest of the world. I sat at lunch next to a top European politician a few months ago and his assessment was unrepeatable. (He cheered up noticeably when I said that the PM couldn't win an election.)
carmen macrae : There'll be no tomorrow, no matter how we pretend....
....Tomorrow brings sorrow, and loneliness without end....
beulah : WTF...aint no carmen macrae onna vid.....ya limey b*stard...
..." This was the Book of the Credit Machine...In it were instructions against every possible contingency...
...If she was hot or cold or dyspeptic or at a loss for a word, she went to the book...
...and it told her which button to press... ...The Central Committee published it...
...In accordance with a growing habit, it was richly bound...
ALL PRAISE THE MACHINE
..."The Machine," they exclaimed, "feeds us and clothes us and houses us...
...through it we speak to one another, through it we see one another, in it we have our being...
...The Machine is the friend of ideas and the enemy of superstition...
...the Machine is omnipotent, eternal; blessed is the Machine."
LATER...
..."The Machine stops."...
..."What do you say?"
"The Machine is stopping, I know it, I know the signs."
...She burst into a peal of laughter. He heard her and was angry, and they spoke no more...
"Can you imagine anything more absurd?" she cried to a friend...
..."A man who was my son believes that the Machine is stopping...It would be impious if it was not mad."
"The Machine is stopping?" her friend replied. "What does that mean? The phrase conveys nothing to me."
"Nor to me."
"He does not refer, I suppose, to the trouble there has been lately with the music?"
"Oh no, of course not. Let us talk about music."
VOTE...MACHINE..!
"The Machine," they exclaimed, "feeds us and clothes us and houses us; through it we speak to one another, through it we see one another, in it we have our being....
The Machine is the friend of ideas and the enemy of superstition...
...the Machine is omnipotent, eternal; blessed is the Machine."
THE CREDIT MACHINE STOPS
"Have you complained to the authorities?"
"Yes, and they say it wants mending, and referred me to the Committee of the Mending Apparatus...."
...No one confessed the Machine was out of hand...
...Year by year it was served with increased efficiency and decreased intelligence...
...The better a man knew his own duties upon it, the less he understood the duties of his neighbour...
...and in all the world there was not one who understood the monster as a whole.
...Those master brains had perished...
...They had left full directions, it is true, and their successors had each of them mastered a portion of those directions.
But Humanity, in its desire for comfort, had over-reached itself...
...It had exploited the riches of nature too far...
...Quietly and complacently, it was sinking into decadence, and progress had come to mean...
...the progress of the Machine.
THE CENTRAL SCRUTINIZER
...To attribute these two great developments to the Central Committee, is to take a very narrow view of civilization.
The Central Committee announced the developments, it is true, but they were no more the cause of them than were the kings of the imperialistic period the cause of war.
Rather did they yield to some invincible pressure, which came no one knew whither, and which, when gratified, was succeeded by some new pressure equally invincible...
...To such a state of affairs it is convenient to give the name of progress.
petey : it were me wot messed abaht wiyit but...a story is from E M Forster
...the Emperor has been caught flashing he dick instead o wearin a latest fashions...
...some sucker took his finger outa damn an pointed at a Edude...an said... ... "is that a dick or wot"!
...almost immediately..they was a great intake o breath...an alla bubbles burst...
...dahn come baby..cradle an all...
...nah ya can git almost any thang yo wants...fo half price or less...
...an they still aint no takers...
...most o a financial bollox is sayin...itta buy signal...an before ya know it... alla stocks be risin...anna sun shinin...anna normal service be resumed...
'cat : yo boss...is we is or is we aint buyers o stox man?
beulah : sucker aint gon bust ma pension on no shock an scares...
laverne : shudda nevah married at painty b*astard an all...
spider : seven f*ckin legs man...wot fo i got only seven...
opkin : nex f*cker calls me a rat...gon get his ass kicked...
bearpetey : ahm in cash mostly innit!...ahm lookin atta bollox an am... ...not convinced o a case fo investin any much cep onna nibbly type way...
Paul J Lamont : ..."As we stated last October (the month of the stock market’s peak); “the stock market is a sideshow, it can adjust to the economic reality very quickly as it did in 1929 (especially with credit losses already in place).”
As mentioned in April of 2007, “When the effects of inflation have been extracted, the DJIA is much more cyclical than Wall Street promoters would care to admit.”
Steve Williams of Cycle Pro has updated his inflation-adjusted Dow Jones Industrial Average chart (below) which we previously cited. The recent sell off seems insignificant when viewed over the last 200 years. Our target is unchanged; we expect the market to swing to the lower end of the trend channel.
On the way to the bottom, the market must relieve bearish sentiment (make you forget your fear). It can only do this through sharp powerful rallies (where we all laugh for a day with CNBC on how close we came to the brink). We have described these as “rocket-launched (oh they’ve saved us) bear market rallies.” Investors who cheer these sharp up moves as a sign of the bottom should take note of the chart provided by Tom Denham from Elliotwave.com below.
Finally, and more important, yields on Treasury Inflation-Protected Securities (TIPS) due in five years or less have now become higher than yields on conventional Treasuries of similar maturity. The difference between yields on five-year Treasuries and five-year TIPS, known as the break-even rate, fell to minus 0.43 percentage points. This is a record. Since the difference between the conventional Treasuries and TIPS is a proxy for expected inflation, the TIPS market is now signaling that investors expect inflation to be negative over the next five years, as a severe recession is ahead of us.
TIPS are signaling negative inflation for the next 5 years and inflation below 1% for the next 10 years! Therefore we would like to reiterate our call to investors to preserve their portfolios with U.S. Treasury Bills (interest bearing cash). Higher returns require more risk, which in our view will not be rewarded in this type of environment...." seeking alpha
bearpetey : thanx ta alla bloggers(specially em atta side bar) fo bein there in this sh*tty time an tellin alla suckers a troof an savin us all fromma msn bollox an...poverty...
US leading indicators have biggest weekly plunge in 37 years.
US leading indicators are at 33-year low.
US Consumer sentiment drops most on record to 57.5 from 70.3, the biggest decline since monthly records began in 1978.
US big-ticket purchase sentiment slumped to 58.9, the lowest level ever, from 75.
Canada Consumer Confidence Drops to 26-Year Low.
German investor expectations slumped to minus 63 from minus 41.1 in September.
French manufacturing confidence slumped in September to the lowest in 15 years.
edmond : " Britain faces deflation for first time since 1960
Britain will slump into deflation next year for the first time in half a century, experts have warned.
For the first time since 1960, the cost of living will start to shrink next year, in a worrying parallel of the Japanese "disease" of the 1990s, according to new research.
The news comes amid growing speculation that the Bank of England will soon be forced to cut borrowing costs to 2pc or below, taking them to their lowest level since it was founded in 1694. Telegraph
"Pay and bonus deals equivalent to 10% of US government bail-out package"
FANTASY ISLAND
simon : ..."As we reported on Friday, Mr Brown has promised to maintain his spending pledges on capital projects and public services. This is despite the fact that the economic prospects predicted at the time these pledges were made are now fantasy. Growth is non-existent, tax revenues are tumbling, borrowing is ballooning, yet Mr Brown thinks it is business as usual.
I have quoted Jim Callaghan before and, for Mr Brown's edification if no one else's, I do so again: you can't spend your way out of a recession.
Mr Brown thinks he knows better. Having also borrowed money to bail out the banks - and who is to say that will work, or that more banks might not need assistance? - the total borrowing this year is predicted to be £90 billion- £100 billion.
Given how wildly inaccurate most earlier predictions have been, we can assume that is a conservative estimate. Mr Brown has learned nothing. The debt will take generations to pay off. I hope our grandchildren will be grateful for this unwarranted imposition on them...."Telegraph
SSSSSHHHHHHHH....sotto voce man innit! big secret day. don let a wurld catch yo cryin.....
pickardthepumkin : don tell no one, don tell noboddy... we all jus bin onna nuvva 'ship.....all a sudden they woz a pingin and we was beamed up.....
Enter... The Klangon
wort : how do you do chaps? my colleagues and I would like to welcome you aboard the klangon warbird SSSHITKIKKER.
pickardy : say wot? wassorta shit is dis? ah don unnerstan a woyd e sayin man!
'cat : it a alien tong boss! yo gotta toyn on a intastella translata.
pickerty : dang blasted nebla! F**kin disrupted me name tag anna translata pingin an all....WHACK!...
wort : we brung yo cross space an outa the sh*t fo a moments o calm and reflection...to see ifn yo can git a handle on wots goin down wi da nebla anna deleveragin black ole...
picardicity:that berrer!.. ah kin git yo gist nah, man..
wort : us klangons usta be on two diffrent shows! we wus mindin us own bizniss wen long comma swizz bank an 'celerated us moneh inna HARDON machine... dough goin rahn fasta an fasta ...collidin inta BIG BANGS an stuff. noboddy new were they woz or who they woz no mo... ...ONE MINUTE I WAS A LITTLE PINK NITTED DUDE onna blue planet...an a next i woz iss ugly, fierce guy wi a deep tan, anna back- bone onna fore hed.
spider : itta SWIZZ innit!
'cat : so yo think yo kin help us outa they shit wot weez in?
wort : ah commin ta it man..don rush me...
pickardthetuffguy : wotta ya got sucker..tork fast or sling it man..we got stuff ta do an we outa here...
wort : sheesh enuff already..we gotta message fo ya from admiral ROUBINI of dorkfleet...
zooneh : wow that admiral roubini he CAPPIN O DA SHIP man! po ole jim he look IN SHOCK.
pickardthe painter : so wot e sayin en? sahn lak im say we F**KED man...NEW WURL ODOUR innit! alla movies inna forrin tong anna merican gel wot wants ta be inna movies gotta wear fruit baskit onner ed.
beulah : say wot? no freakin way man! I aint gonna wear no baskit o fruit onna ed....
zooneh : alla movies gon be breakin inta song n dance ever few minnits. curvey soyds an saris instedda good ole guns an sex an stuff.....
opkin : y'all shudda stayed in bed man. yo nebla gon kick yo ass inta a future where yo gon be in debt ta all yo enemies an they gon laff they bollocks off at yo....yo banks is bust cos they 'cellerated they dollas inta evva smaller particles an mixed em up inna alphabet soup o sh*t....they spread em aroun a wurl an foul up a whole shootin match.....
