DANSE MACABRE

yo!...buggar thy neighbor...innit!

PALOOKAVILLE FINANCIAL
...capitulation day postponed...


...here in...

...palookaville...

...all bets are hedged...

...as we await the resumption of normal service...

...a V shaped recovery has been achieved in the financial markets...

...and the puppet masters have made loads-a-money...


IT TAKES ONE TO TANGO

...the states within the Eurodisunion...

...are locked in a dance of death...

...those that sell and those that buy...


...those who sell will not buy and those who buy must borrow to do so...

...those who lend fear they will not be repaid...

...the price of borrowing must rise for those who buy...

...those who sell...will not lend...

...round and round we go...

...until the music stops...

...when all must find a seat at the table...

...or fall to the floor...

...and must then sit out the game...

...in the corner...with the dunce's hat...


WE TWO KINGS


...Chi Na and Berlin...

...are kings of the castle...

...all the rest are dirty rascals...


STANDS WITH A BOWL

...our great leader...

...is asking for more...


...more time to rule...

...more money to spend...

...he can't get enough from all us palookas...

...so he stands with a bowl...

...begging for more money...

...so that he can pay the interest...

...on the money he has borrowed...

...mr bumble the beedle...

...wants to give him to the undertaker...

...who will bury him for good...


FATAL ATTRACTION

...but he just keeps emerging from the dead...

...consumate zombie that he is...

...the people of palookaville...

...will vote for death...

...so long as somebody else will pay for it...

BAGPIPE MUSIC

It's no go the merry-go-round, it's no go the rickshaw,
All we want is a limousine and a ticket for the peepshow.
Their knickers are made of crepe-de-chine, their shoes are made of python,
Their halls are lined with tiger rugs and their walls with head of bison.

John MacDonald found a corpse, put it under the sofa,
Waited till it came to life and hit it with a poker,
Sold its eyes for souvenirs, sold its blood for whiskey,
Kept its bones for dumbbells to use when he was fifty.

It's no go the Yogi-man, it's no go Blavatsky,
All we want is a bank balance and a bit of skirt in a taxi.

Annie MacDougall went to milk, caught her foot in the heather,
Woke to hear a dance record playing of Old Vienna.
It's no go your maidenheads, it's no go your culture,
All we want is a Dunlop tire and the devil mend the puncture.

The Laird o' Phelps spent Hogmanay declaring he was sober,
Counted his feet to prove the fact and found he had one foot over.
Mrs. Carmichael had her fifth, looked at the job with repulsion,
Said to the midwife "Take it away; I'm through with overproduction."

It's no go the gossip column, it's no go the Ceilidh,
All we want is a mother's help and a sugar-stick for the baby.

Willie Murray cut his thumb, couldn't count the damage,
Took the hide of an Ayrshire cow and used it for a bandage.
His brother caught three hundred cran when the seas were lavish,
Threw the bleeders back in the sea and went upon the parish.

It's no go the Herring Board, it's no go the Bible,
All we want is a packet of fags when our hands are idle.

It's no go the picture palace, it's no go the stadium,
It's no go the country cot with a pot of pink geraniums,
It's no go the Government grants, it's no go the elections,
Sit on your arse for fifty years and hang your hat on a pension.

It's no go my honey love, it's no go my poppet;
Work your hands from day to day, the winds will blow the profit.
The glass is falling hour by hour, the glass will fall forever,
But if you break the bloody glass you won't hold up the weather.

Louis Macneice

	Malcolm Evison (9/16/2005 9:59:00 AM)
	Humorous as it may be with regards to Class and social mores, flirtations with theosophy etc., one is brought up with a start... the realization that this was written in 1937 and, the more specific social unrest in Spain and Germany... the fall of the glass is unstoppable!

...petey...

the more things change...innit!

Zombiegrad Spring

yo!...good news week...innit!

ZOMBIEGRAD FINANCIAL
capitulation day
+265...


...this morning...


...here in...


...zombiegrad...


...even the msb...


...are carryin the real news...


GERMAY F**KED


..."Paul Krugman: The "Nipponisation" of the world economy with a bunch of "Argentinafications" playing a role in the acute crisis. But even after those are over, we have the Nipponisation of the world economy. And that's really something.

Will Hutton: What was the heart of the Japanese problem? What was at the heart of their 17 years of going nowhere?

PK: Well, my guess is that it was that the balance-sheet problems took a very long time to resolve. And it is difficult to get enough demand in an economy where you have really very adverse demography ...

WH: So, which countries look closest to being Nipponised - combining balance-sheet problems and ageing populations?

PK: Well, the US doesn't have the same combination. But in Europe, Germany and Italy look comparable. France is better and Europe as a whole is considerably better.

WH: Germany matches Japan to an uncanny degree. You talk about the Nipponisation of the world economy: I'm not so sure. But I would talk about the Nipponisation of Europe via a German economy at its centre in the grip of the same problem - and that starts to be a global problem.

PK: Germany has huge inadequacy of domestic demand. Their economic recovery in the first seven years of this decade rested on the emergence of gigantic current account surplus.

How is it possible that Germany, which did not have a house price bubble, is having a steeper GDP fall than anyone else in the major economies?

The answer is that they depended upon exporting to the bubble regions of Europe, so they actually got side-swiped by the loss of those exports worse than the bubble regions themselves got hit.

It's Germany on a global scale that is the concern. We worry about the drag on world demand from the global savings coming out of east Asia and the Middle East, but within Europe there's a European savings glut which is coming out of Germany. And it's much bigger relative to the size of the economy.

WH: And on top there is an unique and unaddressed huge potential banking crisis. The Germans pride themselves on their three-legged banking system, but it is incredibly interlinked. The IMF warns that Germany could have to take at least $500bn of writedowns, which its banks have not begun to recognise. German banks hold a trillion dollars - maybe more - of maturing collateralised debt obligations that can only be refinanced by crystallising the losses. We've had RBS and you've had Citigroup. Germany's GDP will fall 6% this year - before the banking crisis has hit it....

...PK: That the cause is primarily financial. Certainly, Lehman and all of that alerted us all. And it did trigger an immediate drop in demand. But the housing bust was going to happen regardless.

The fall in business investment is at least to a large degree a response to excess capacity, which is the result of falling consumer demand and the housing bust. So we don't know.

WH: I think we know more than that. The links between bank capital, loan losses, credit availability and economic activity and asset prices have never been clearer. That was why there was a threat of Depression.

PK: Clearly, re-establishing stability in the financial markets is a necessary condition for recovery. But we're not sure it's sufficient.

WH: That's very scary.

PK: Well, that is part of the reason why I am so depressed.

WH: In one of your lecture charts you seemed to be suggesting that we're 12 months into what you think could be a 36-month period of downturn, albeit at a slower rate.

PK: Easily.

WH: It's quite shocking that you think it will be that severe.

petey : Im shocked that you're shocked...Will

PK: If we measure the 2001 US recession by when the labour market finally started to turn around, it was a 30-month recession. It was really 30 months in before you started to see the unemployment rate come down."

...guardian...

wolfgang in the FT...

..."The March signs of revival turned out to be little more than a technical inventory correction, with no change in the underlying trend. The world economy is still contracting, though perhaps not quite as fast as at the start of the year.

As an analysis by economists Barry Eichengreen and Kevin O’Rourke* shows, global industrial output is still on the same trajectory as it was during 1930.

The only question is whether we can avoid 1931 and 1932.

The answer is yes, but on conditions that seem increasingly implausible if we extrapolate current policies. We can avoid calamity if monetary and fiscal policies remain supportive throughout the duration of this crisis, if we fix the banking system and if we impose regulations to constrain a resurgent financial sector. We also have to be lucky to avoid another round of market turbulence in the near future.

In other words ... the answer may well be no. Central banks and governments therefore risk moving too swiftly out of a recession-mode strategy. When Axel Weber, president of the Bundesbank, publicly talks at this time about how to communicate a rise in interest rates, it tells me that the danger of a premature exit, at least in Europe, is clear and present....

...So at this point, I see the chances as roughly even between a global slump and a return to quasi-stagnation. What is so galling about this scenario is that it is avoidable. The central banks took the right decisions. But the political reaction has been near-catastrophic almost everywhere.

Instead of solving the problems to generate a recovery, the political strategies have consisted of waiting for a recovery to solve the problem. The Europeans are relying on the Americans to generate growth. The Americans are relying on the Chinese, who in turn are waiting for the rest of the world.

Even if the US were to generate some growth, as is likely after this summer, it would not benefit global exporters; China may be one of the fastest growing economies in the world, but it is only about half as large as the eurozone in dollar terms. And as Brad Setser** has pointed out in his blog, there is absolutely no evidence that China contributes to a global recovery. While Chinese investments are up by more than 30 per cent from last year alone, imports are down 25 per cent. All this hype about decoupling and China pulling the world out of recession is baloney. The data tell us that China’s exports and imports are both falling, and that imports are falling faster.

As everybody expects the others to move first, nobody ends up moving. In the meantime, the problems grow worse. US house prices, which are down by a little over 30 per cent from their peak, still have some way to fall. Until the US housing market hits rock bottom, perhaps sometime in 2010, there is no chance of a recovery in the securitisation market, without which there may not be sufficient credit growth....

...The only potentially good news in the past three months has been the receding threat of a currency crisis in central and eastern Europe. But I am not even sure that this is for real. The persistent refusal by eurozone policymakers to concede fast-track euro accession for central and eastern member states could yet prove destabilising.

Last week, the ECB had to provide €3bn in euro liquidity to Sweden’s Riksbank, in the absence of which Sweden may have experienced its second banking meltdown in less than two decades. The inevitable collapse of Latvia will have ripple effects on the Baltic region and may cause panic among investors in other central and east European countries.

This is why last week’s news about the withering green shoots is so important.

It tells us that the non-strategy of waiting until things get better is not working.

The March signs of life reinforced complacency.

Optimism will get us out of this crisis only if it is founded in reality.

Last week showed us that this is not the case."

...FT...

..."Neil Mackinnon, chief economist at ECU Group, said Washington believes European states are "free riding" on American stimulus, expecting the US to pull them out of crisis yet again.

Europe's industrial output continued to slide in April and was down 22pc from a year earlier, suggesting that talk of a "V-shaped" rebound is premature. At best, the pace of decline has slowed. Production fell 23pc in Germany and 24pc in Italy.

The ECB expects the eurozone economy to contract by 4.6pc this year and a further 0.3pc next year, with no recovery until mid-2010.

Structural rigidities of the region raise risks that it will remain trapped in slump well after the rest of the world has turned the corner, as it did after the dotcom bust.

This time Europe faces the extra head-winds of a strong euro, over-valued against the 45-odd countries such as China that are linked to the dollar. This currency effect is slowly "hollowing out" Europe's industrial core...."

...ambrose...

...oh yeah!..

...an this...

OF BONDS AND ZOMBIES

yo!..as good as it gets...innit!

PALOOKAGRAD FINANCIAL
capitulation day
+261...


...here in...


...palookagrad...


...the zombie capital of the worst...


...the gangreene shoots of zirp forced ungrowth...


...have stolen our hearts away...



AFTER THE NEXT UNLECTION


..."It really is 1979 all over again – and perhaps even worse. I don't know whether that is something David Cameron is relishing or dreading, but I hope he knows what he's in for....


...we have not dealt with the massive overhang of debt racked up by individuals and governments over the past decade or so.
In the 1930s, the flipside of mass bankruptcy, bank failures and record unemployment was that in a relatively short time private debt levels dropped back down to manageable levels. This time, we have avoided the bankruptcy; the consequence is that we still need to repay the debt.

And, as I wrote last week, the slow reinvigoration of the financial sector is down to the Faustian pact it made with the Government: the public sector has assumed its enormous debts, on the proviso that the banks will operate on a shorter leash. Even amid signs of recovery, those banks remain nervy, paranoid institutions, unwilling to take even mild risks.

In the immediate future, they will remain zombie banks.

Barring another disaster of some sort (which should not be ruled out), the Bank of England will at some point in the next year start raising interest rates. All those households which have only survived because of near-zero borrowing costs will hit a massive financial wall.

They are zombie households.

Then there is the Government. As George Osborne pointed out in his speech to the Association of British Insurers this week, the biggest challenge in the coming decade is how to bring down the national debt. Britain has three options: default on the debt (fatal for our long-term prospects), inflate it away (near fatal, but feasible) or pay it back through a long period of austerity.

The latter course is by no means easy. The Tories insist it can be done through spending cuts, but they will almost certainly also have to raise taxes to get the books back in order. Don't be surprised if VAT is higher than 17.5 per cent before long.

This week, London has been crippled by Tube strikes that presage the next few years, which will be peppered with clashes between heavily unionised public-sector workers and a government with no choice but to bring down costs...."

...edmund...


..."Unveiling mixed results, which saw Homebase return to sales growth for the first time since 2005, Mr Duddy said he will "continue to plan cautiously" for the year ahead.

"I don't think we're strong proponents of green shoots at this early stage of the year," said Terry Duddy, chief executive of Home Retail, which owns Argos and Homebase. "The first quarter was helped by increases in disposable income because of lower interest rates, and it was not offset by unemployment. That could easily change," he said, citing forecasts of unemployment rising to 3 million by the end of the year...."

...telegraph...


..."Not that it will feel that good, because unemployment and company failures will continue to rise.
And the big worry is that the British patient, after a feeble recovery, could suffer a relapse.

If the upturn we are seeing now is in large part because of restocking, there will be a spike in orders which will inevitably fall back again. How far they fall back depends largely on the strength of consumer demand.

And there the picture is still pretty gloomy.

Consumers remain shackled by heavy debts, battered by the housing slump, fearful of unemployment and hampered by banks still reluctant to lend.

Public spending provides no alternative, since the massive burden of government borrowing is about to force severe cutbacks.

The industrial production figures show some signs of the hoped-for rebalancing of the economy away from its dependence on the indebted (zombie)consumer.

But without a big easing of credit or a strong rebound in export demand, the recovery is likely to be anaemic, if it is sustained at all."

...times...(petey ; my emphasis and zombie)

..."The fall in Chinese exports and imports accelerated in May, dashing hopes that a collapse in the country’s external trade flows had bottomed out and pointing to the continued weakness in global demand......

....“The global economic situation has hit a bottom but it will still take time to recover. I expect it to take one to three years,” said Hu Yifan, chief economist (global) at CITIC Securities in Hong Kong.

“A technical rebound [in exports] may happen in November but a demand-driven rebound will not come in the short term.”

Beijing has announced a Rmb4,000 ($586bn) stimulus plan after its exports-powered economy was hit hard by weak global demand.

The stimulus packages have spurred investment in government-supported sectors such as transport infrastructure, the power grid and housing, as reflected in a 38.7 per cent rise in fixed asset investment in May from a year earlier.

This marked a larger increase than in April, when FAI rose 33.9 per cent. For the first five months of this year, investments increased 32.9 per cent from the same period in 2008, compared with 30.5 per cent in the first four months of the year and against an estimate of 31 per cent.

“Fixed asset investment in China continues to increase on the back of state-directed projects ... This will help keep the economy growing but there are increasing concerns about the amount of lending that has been required to fund the projects,” said Alaistair Chan, economist at Moody’s Economy.com."...

...FT...



SOONER OR LATER
ONE OF US MUST BLOW


..."“Once the 30-year is out of the way, the market should have a window to rally,” said analysts at MF Global. “The bull story rests in higher mortgage rates slowing the recovery.”...FT


..."Now both groups are out on market patrol, trampling green shoots back into the dust. Every $1 rise in the price of oil costs global consumers $82m more a day. Meanwhile UK 10-year gilts on Thursday hit a seven-month high of 3.98 per cent, while US Treasuries sold for 3.99 per cent at auction, their highest since August.

Further rises would lynch the recovery. Then, as market strategist Ed Yardeni puts it, the vigilantes can go back home and do what they like best: nestle up with bonds...."

...lex...

Vigilante Man

yo!..million pound note...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+249...

...nobody here in palookaville...


...knows anything about bonds...




THE END OF MORAL HAZARD


...but we know about debt...


...bad debtors pay more...


...credit is...


...where credit is due...


FEAR OF 'FLATION


...he who pays the piper...


...calls the tune...


...not so good when you're in a hole...


STOP DIGGING


..."The Treasury bond sell-off is now putting pressures on other markets in the economy. We should worry most about housing where borrowing rates are rising notwithstanding the Federal Reserve purchase programme. Indeed, according to data released on Thursday, already 12pc of US households are facing difficulties meeting their mortgage payments.

Housing is still central to the stabilisation and eventual recovery of the US and global economies. Any further decline in house prices will erode the collateral many Americans borrowed against, dampen their already-fragile consumption appetite, and increase the headwinds facing a banking system that is finally regaining its footing. The US can ill-afford a further sell-off in US bonds at this stage in the economy's rehabilitation process. Yet there is no easy way for policymakers to address this challenge.

As an illustration, consider the dilemma facing the Federal Reserve. Should the central bank step up its purchases of both Treasuries and mortgages in order to stabilise interest rates, but at the risk of adding to the distortions in these markets; or should it refrain from intervening further and risk a return of widespread economic and financial disruptions?

I suspect that, when push comes to shove, policymakers will opt for greater purchases of mortgages and Treasuries – not because they really want to, but because the alternative is viewed as worse.

Believe it or not, there is a silver lining in all this. As they contemplate this difficult situation, they can draw some comfort from one thing: with the anchoring of the short-term policy rate near 0pc, the steepening of the yield curve is generating significant profits for banks.

Remember, banking is fundamentally about mobilising cheap deposits (at the short end of the curve) and, supported by deposit insurance and central bank liquidity windows, lending at the longer-end of the yield curve. Come to think of it, the smartest trade for investors today is to find a bank that, unencumbered by legacy issues, is able to take advantage of an enormously attractive environment for old-style banking."

...Mohamed El-Erian is chief executive of Pimco....

CHERCHEZ LA FEMME


...or...


...follow the money...


...me...


...I wonder about the banks, the shadow banks, and the men that run them...


...has it all been deliberate?...


...surely not...


...who would benefit...?


..." For a long time, this column has warned that the bond-market vigilantes would ultimately rebel against the Western world's profligate borrowing and spending – not least the ill-judged, cowardly and ultimate grotesque "bail-out" packages for well-connected banks that should anyway be allowed to fail...."

...Liam Halligan...

The Green Green Shoots of Home

yo!..capitulation up...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+229...

...the old town looks much the same...

...as I step down from the train...


...and there to greet me...


...are...

...my momma an poppa...


RIDING ALONG ON THE CREST OF A WAVE


...here in palookaville this morning...


...everything goes along as if nothing has happened...


...world trade has collapsed...


...ships are mothballed...


...the newly unemployed are in their homes and not on the streets...


...the boarded up shops go unnoticed...


...there is no return on our savings...


...the country is bust...


...but our government still sits in westminster...


SAUCE FOR THE GOOSE


...still cramming their pockets with our money...


...while raising our taxes...


...and robbing our pensions...


...no wonder that no-one was at the helm...


...when the banks went bust...


RALLY ROUND THE FLAG


...they are starting to talk about a melt-up...


...as stock prices have risen for 9 weeks...


SUCKERS

...it's a bear market rally...


...but a long one...


...all the talk is of panic among the fund managers...


...afraid to miss the train...


...the last train to palookaville...

In Danger of Talking Ourselves Out of Recession

yo!...credit is debt...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+210...


...here in palookaville...

...the talk is all about the green shoots...


THEY THINK IT'S ALL OVER...


...of course they don't...


...but...


...what they think and what they say...


...are two different things...


THE BANKS ARE BUST


...this is not often alluded to...


...there will be no return to boom...


...this time it really is different...


ONCE BITTEN, TWICE SHY


...they say that the consumer will return...

...that banks will lend as before...

...that people will borrow again...

...like they did last summer...


...i don't think so...

We are not even half-way through the

banking crisis - IMF

..."The simple truth is laid out in page 33 of the Global Financial Stability Report , published today in Washington: "if banks were to bring forward to today loss provisions for the next two years, before expected earnings, US and European banks in aggregate would have tangible equity close to zero."In other words, the entire global banking system would be bankrupt - kaput - if its institutions immediately wrote off all the toxic assets still sitting in their vaults without any government assistance...." Telegraph...


...this from the big picture...

..."So we keep the system going. Now, where are we today?

We are at the Great Deleveraging.

We are seeing massive losses and destruction of assets, on a scale that is unprecedented. There was massive destruction of assets during the Great Depression, which caused a lot of problems, and we are seeing the same thing today. We are watching trillions simply being poofed (another technical economics term — which will drive my poor Chinese translator crazy!). We are watching people pay down their credit lines, which is one way of saying the supply of money and credit is shrinking.

This is not just in the US, but all over the world. Because when you start adding European cash-to-credit, and Japanese cash-to-credit, and Indonesian and Chinese cash-to-credit, it becomes multiple tens of trillions, and we are watching a goodly portion of that credit be vaporized. So we — individuals and businesses — are trying to find that $2 trillion in real cash and get some of it to pay down our debts. We are reducing that massive leveraged money supply down to some smaller number. We are hitting the Blue Screen of Death. We don’t know what it is going to reset to, but we have permanently seared the psyche of the American consumer, and it is going to get reset to some lower number, about which I will speculate in a minute.

Now to give you some idea of how important credit was in our recent period of economic growth — and I keep using this slide, but it is an important slide because it shows you what would have happened in the economy without mortgage equity withdrawals. The red lines are what GDP would have been without MEWs. Notice that in 2001 and 2002 we would have had negative GDP for two years, that’s 24 months. It would have been as long as or longer than the current recession. Not quite as deep, because we had the Bush stimulus and Bush tax cuts at the time. The Bush tax cuts were very important in keeping the economy rolling over in 2001 and 2002.

But notice that the recovery for the next four years would have been under 1%. We would have had under 1% GDP for four years running, without mortgage equity withdrawals, without people being able to spend more. That doesn’t even count the leverage we increased on our auto loans, on credit cards — you saw the two charts that Louie [Gave] and Martin [Barnes] used yesterday about the growth of credit, and we are now seeing it in reverse. Do you think George Bush would have stood even a small chance of being reelected without mortgage equity withdrawals?

GREEN SHOOTS

..."The force that through the green fuse drives the flower
Drives my green age; that blasts the roots of trees
Is my destroyer...." dylan thomas


...IT IS NOW

..."In other words, if you thought the immense amounts of taxpayer cash funnelled into the system over the past couple of years was enough to bring us back to good health, think again.

It is an extremely worrying verdict, particularly coming at a time when many had been assuming that green shoots were starting to sprout and the recession was coming to an end.

But it underlines one simple but undeniable truth:

that this recession is different.

It is the consequence not of a simple one-nation housing crash or a consumer slowdown but a catastrophic collapse of the financial system. And with that system still in a wreck normal service will simply not be resumed without more costly bail-outs - or else we must accept the consequence that money will be far more expensive to borrow in the future, and that economic growth will be far less in the future." Telegraph...edmond conway blog...

petey : it were me wot done the italics an stuff...

IT'S THE PENSION, STUPID !

yo!..pay now, pay later...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+210...


...here in palookaville we have pensions paid for by the state...

...they tell us that all pensioners are equal...

...but...

...some are more equal than others...

Vampire pensions could be a corporate nightmare

By Charles Millard

Published: April 16 2009 21:57 | Last updated: April 16 2009 21:57

While economists worry about “zombie” banks holding back lending, vampire pension plans may soon be stalking a company near you. The underfunding of America’s corporate defined benefit pensions poses a daunting challenge, threatening not only their 40m beneficiaries but the entire US economy.

Recently enacted funding rules require underfunded pension plans, and that’s most of the big ones, to suck needed cash from salaries and jobs just when suffering companies need scarce resources to survive. Under 2006 legislation, companies that have underfunded pensions must put extra funds into their pension plan to close the gap within seven years. After precipitous drops in assets, most plans now have serious funding gaps....more...

...heh heh heh...

...of course this is just an american thang...

...innit ?...

THEN WHAT ?

yo!...over capacity...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+194...


...in palookaville today...

...a great pow wow is taking place...

...as the great and the not so great...

...meet to try and fix the boom that's bust...


...they are to kill some chickens and drink their blood...

..and dance around and loose their selves...

...in a frenzy of fire and liquor...


THE ZOMBIE BOOM


...here in palookaville they just don't get it...


...the money they created yesterday...


...was used to buy tomorrow's stuff...


...now we all shopped out...

...an deep in debt...


...our friends in the east have invested heavily...

...in machinery...

...to make the stuff we want...

...at ever faster rates...

...and ever cheaper prices...


...in order for us to buy their stuff...

...they bought our debt...


AFTER THE MUSIC STOPPED


...all good things must come to an end...

...and in august 2007...

...the band stopped playing...



...the hope today...

...here in palookaville...

...is that by bringing the dead world boom...

...back to life...


...normal service will be resumed...


...but...


...the boom was unsustainable...

...so what next?...


GARAGE SALE OF THE CENTURY


...all over palookaville the garages are emptying out the stuff that no one wants...

...they want to put their new cars in there...

...yes...

...they have a new car already...

...and now they want out of debt...


TOO MUCH IS NOT ENOUGH


...too many factories...

...not enough buyers...


...time to grow your own home markets...


...y'all want to export your stuff...

...an keep the money...


...well...


...where's that got ya ?...

Now taxpayers bail out MPs' pensions

A fresh row over MPs' pay and perks erupted after taxpayers were asked to foot an £800,000-a-year bill to bail out their gold-plated pension scheme.

Under the plans unveiled by the Leader of the Commons, Harriet Harman, the Exchequer will increase its contribution from £12.4m to £13.2m a year. MPs will each have to pay an extra £60 a month to help fill a £51m black hole in the parliamentary pension fund.

The package was published after government financial experts found a growing deficit in the pension scheme because former MPs were living longer.

The Government Actuary said that taxpayer contributions to the scheme – already one of the most generous in the country – would have to increase by £2.1m a year to cover the shortfall.

Ms Harman said she wanted MPs to increase their payments into the scheme from 10 per cent to 11.9 per cent – equivalent to £60 a month – to help limit the extra bill for the taxpayer.

Steve Webb, the Liberal Democrat pensions spokesman, branded the decision a "spectacular own goal for MPs". "The pensions of MPs and other well-paid public sector workers have to be brought in line with reality. With members of the public losing their jobs and seeing their pensions plummet, MPs cannot insulate themselves from the harsh realities of the recession."

Susie Squire, the campaign manager at the Taxpayers' Alliance, said: "Asking for more money to plug the deficit in politicians' gold-plated pensions is an utter disgrace. These pensions have been a bottomless pit for too long, and continuing to pump in taxpayers' money is no solution in the long term.

"Why should taxpayers fund politicians retiring into the lap of luxury when they have seen their own pension reduced out of recognition? If MPs want such a generous pension, they must pay for it out of their own salary and not simply keep dipping into the pockets of hard-working people."...indy

Leading article: Time for root and branch reform

RULE THE PEOPLE : LIVE LIKE THE PEOPLE


...here in the loft...

...beulah an me an the gang...

...believe that the people who make the laws...

...should live by the laws...


...politicians should send their children to state schools...


...politicians should only use public hospitals and services...

...politicians should keep all of their assets on shore...

...and available to normal tax rates...


...they should not be able to make laws for us and avoid them themselves...

...they should have the same pension scheme as those that they rule...


...they should not have ridiculous levels of expenses...

...no government person of any government should get a tax free salary...


...ever...


...no taxation without the taxer's paying the same...

HOUSE OF THE SETTING SUN

yo!...itz property wot done it...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+165...

...

There is a house in many a town
They call the Rising Debt
And it's been the ruin of many a poor boy
And God I know I'm it

My mother was a tailor
She sewed my new bluejeans
My father was a gamblin' man
Down in New Orleans

Now the only thing a gambler needs
Is a mortgage and trunk
And the only time he's satisfied
Is when he's on a drunk

------ organ solo ------

Oh mother tell your children
Not to do what I have done
Spend your lives in sin and misery
In the House of the Rising Debt

Well, I got one foot on the platform
The other foot on the train
I'm goin' back to Rentin a room
To wear that ball and chain

Well, there is a house in New Orleans
They call the Settin Sun
And it's been the ruin of many a poor boy
And God I know I'm one

EVERY PICTURE TELLS A STORY

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 opinion is 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...

...THERE IS A DISCLAIMER AT THE TOP O THE PAGE...

...THIS AINT ADVICE AN WE AINT IN BUSINESS...

...WE JUS SUCKERS LAK YOU...

...PISSIN INNA WIND...

THE MORE I OWE, THE MORE I MAKE

yo!...some are more equal than others...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+137...


...palookaville 2009...


...debt has reached the nexus phase...

...retirement is not an option...


...the debtists have passed new laws to increase debt - quantum time...


...the cure for debt is debt...


...long live the debt!...


...their friends the boomists have lobbied hard for this day...


...they believe in perpetual boom...



IGNORANCE IS STRENGTH


...nobody knows what we've done...


...they're all so f**kin thick...

...we keep them up to date with what is happening in the soaps...

...with who is F**king whom...

...they check their 'phones every minute...

...to see who is "on the bus" or "at the checkout"...

...meanwhile we f**k them over...


...we bury them in debt, we take away their savings or at least their interest...


THE MORTGAGE-GO-ROUND


...we give their money to the debtors...

...the more they owe, the more they make...


...we hate savers...

...so we rob their savings...

...we f**k up their investments...

...we rob their pension plans...

...


WAR IS PEACE


...war is good...

...it increases economic growth...

...bullets and bombs must be replaced...

...we can start a new war any time we want...

...all the twats will be watching the soaps...

...or reading about some sports or movie or soap "star"...


FREEDOM IS SLAVERY


...we will be the spender of last resort...

...all their money is ours...


...we create it...

...so we shall spend it...


...big goverment sets you free...

...cradle to grave without the need to think...

...like mushrooms, we keep you warm, in the dark...and covered in sh*t...


...we decide how much tax you will pay...

...and how we spend your money...

...we provide your education and health service...

...and we decide what quality of care you get...


...we tax your income and your spending and your saving...

...you get to decide who wins big brother...



...Ha ha ha ha ha ha ha ha ha ha ha ha...



THE GOVERNATOR


...the great depressionist artist...

...arnold terminator...

...is trying to balance the budget...


...the debtists just don geddit...

...they think the boom can be restarted...

...in time to save their bacon...


...but...


...perpetual boom is an illusion...

...the boomists have done their best...

...but...

...now it's over...

...bust follows boom as night follows day...

...

ZOMBIESTEIN

...they like to keep their money off shore...

... in tax havens and secret accounts...

...not here in zombiestein...

...land of the living dead...

...where all that moves is subsidised...

...state owned...

...insolvent...

...devalued...

...

ONCE-UPON-A-TIME IN THE EAST

yo!...bad day at black rock...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+122...


...in palookaville everybody goes to meet the train...

...so you can understand our dismay when we are met there by four horsemen...

...three of em are wearin long dusters...


...the fourth is roy rogers...


...the american engine has failed to decouple from the eastern train...

...an now it looks like they all goin over the cliff together...

...the stuffed shirts have caused all tomorrows spending to be spent yesterday...

...an now china is full of dollars an we are full of sh*t...


ALL TOMORROWS PARTIES


...roy says that the west is finished and in particular...

...that the pound is sunk, the oil all gone an a banks in debt...


...sell evva british thang ya got boys...fill yo boots wi oil an gold...

...this sukka goin dahn...innit!...


AN IT'S AN EARLY BATH FOR STERLING


...the pound has taken an early bath...

...and everyone is laughing they bollox off...

...but the guys in the dusters is waitin fo the train...

...they have blown the bridge...

...and the great eastern is goin over...


...seems like they chinese was balancin on a wooden cross in a spaghetti eastern...

...dude with the wicked smile was playin a harmonica...

...only it was a double cross...



THE GHOST OF ELECTRICITY

Lights go out across Britain as recession hits home

Electricity demand falls as economy slows at fastest rate since 1980

China Powers Down..."The global recession has meant a big decline in demand for iron and steel. That has meant sharp decreases in electricity demand from China’s metal producers, which have been leading the country’s demand for increased electricity production.For November, the Chinese government expects total power generation to fall by 7 percent compared to November 2007. That drop follows a 4 percent decline in October. This will mark the first time in recent history that China’s power demand has fallen for two consecutive months. Falling power demand mirrors a decline in exports. In November, China’s exports fell by 2.2 percent compared to November 2007. That’s the biggest year-over-year slide in exports since April 1999. Foreign investment is also falling. According to the latest Chinese government statistics, foreign direct investment fell by 36.5 percent in November, when compared to the year-earlier period."


THE DOLLAR YOU GET YOU DESERVE


...in china they know a thing or two about dollars...

...they have all of the real ones in a box under the bed...

...peraps they know a way to enhance their value...

...maybe then sell a few...


IN THE WHITE ROOM...WITH BLACK CURTAINS


...here in palookaville the train is late...

...come to think of it...

...so is the ship...

THE MORE I SAVE...THE MORE I LOSE

yo!...hell hath no fury...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+109...


...on sunset boulevard...peterthepainter lies...

...face down in vilma banky's pool...

...beulah...a famous ex gansta's moll...

...has shot him inna head with a reactivated .45...



...the lazy, painty b*stard had shrunk the pension stash...


GIRL ON A RAMPAGE


beulah : who soever seeks ta f**k up mi finances shall...pay!...

...itz that brown wot done it...

...alla msm bollox are too scared ta tell atruth...

...he caused us ta lose...

...our pension stash...our holiday...our savins interest...


BROWN : BLAME ANYONE BUT ME


...he allas sayin it were a sub prime or it caused by america...


...he says he saved the world...that he saved the banks...


...but the banks is still bust...an they won't lend...


...an they gon be commin back fo mo...



BOULEVARD OF BROKEN DREAMS


edmond conway :..."

Definitive proof that the Bank of England saw the financial crisis coming

edmond conway : ..."As we wrote in our City Comment that day: "One statistic in particular shows precisely how exposed the City is to the bursting of the household debt bubble. At the beginning of 2001, our banks were not lending customers any more than the total amount of deposits they held. By the end of 2005, banks were lending customers £500bn in cash which simply wasn't in the vaults. Should customers default on their loans, these banks could be in trouble, having to resort to borrowing chunks of money at penal interbank rates."

Not only did the Bank's report, which can be found here (page 28 is the one on the funding gap - p30 on the pdf version), lay out the City's increased reliance on wholesale funding - it also warned that this leaves banks extremely vulnerable in the event of a slowdown. Now, the Bank was not the first to diagnose the seeds of the crisis: there were one or two hedge funds which were already trading on the likelihood of a UK banking breakdown caused by this reliance on securitisation. There were plenty of commentators warning on the excessive build-up of debt. But as far as I can tell this was about the earliest warning on the problems inherent to the UK mortgage market.

The report completely debunks the notion that the financial crisis came as a surprise to the City, or indeed the Bank. The Government had been warned explicitly not by some crackpot economist but by its own employees in Threadneedle Street about precisely how the crisis could erupt. Not only this, but the report also revealed that its "war games" plotting out scenarios including a credit crunch revealed that a debt-fuelled crisis could cause a severe UK recession, a 25pc fall in house prices and a wiping out of a third of banks' tier one capital - around £40bn at the time. It is difficult to think how it could have made more noise about the possible risks the debt build-up entailed...."

...Of course, the eventual crisis has been far greater than even this worst-case scenario, but remember that this was a warning delivered more than a year before the securitisation markets broke down in August 2007. Had it been heeded in Government, Northern Rock - not to mention the rest of the banking system - could very possibly have been saved from complete collapse. The UK could have been let off with a mild rather than severe recession. House prices could have been brought back under control, rather than booming again for another breakneck year of growth." Telegraph


HERE IS THE NEWS

...vilma banky looks out of the orangery at the leaves floatin in her new pool...

...yikes!...is that petey?...floatin there?


...petey is sayin nuthin...not because he's dead...

...thats just a minor detail inna much bigger plot...


...he's waitin fo beulah ta git dahn ta the msm bollox...


...she gon tell em fo sho...


...yo sat on yo asses an did nowt...

...while brown and his gang...


...bullied their way ta this bust...


...the plan ta bust the country was in place from the start...


...increase taxes, increase the public sector workforce, create a client state...


...put alla the voters onna state payroll, nationalise the banks...


...punish savers, rob the private pensions, complicate the tax system...


...increase treasury power, politicise the civil service...


HERE IS THE BILL


...a devalued currency...

...unsustainable public finances...

...insolvent banks...

...pension funds in deficit...

...no income for people who rely on interest on their savings...

...house price crash...

...negative equity...

...first time buyers kept out of the housing market...

...rapidly rising unemployment...

...stock market crash...

...commercial property crash...

...20% cuts in with profits policy bonuses...

...no jobs for graduates...

...middle class poverty...

...a new wave of violent robberies...

...car sales slump...

...tax revenues wiped out...

...massive national debt...


INDEXED LINKED PENSIONS FOR POLITICIANS


...and when you have gone...

...whether we recover or not...


...you and your gang will have the best pensions in the land...

safe from any inflation you will have caused...

BORROW YOUR WAY OUT OF DEBT

yo...the bollox are back in town...innit!


PALOOKAVILLE FINANCIAL
stardate : capitulation day
+106...


...desperate times call for desperate columns...


...it would appear that anatole has himself been crunched...


...what would mish say?...


...all roads lead to palookaville...it would seem...

Punish savers and make them spend money

Near-zero interest rates and even a tax on bank deposits are necessary to force those with cash to use it productively

Anatole Kaletsky


..." I believe, in line with the vast majority of non-socialist economists, that Mr Cameron's campaign for savings is completely wrong; that “borrowing our way out of debt”, paradoxical as it sounds, is exactly the right prescription for our present problems. This paradox is easily explained: if governments or wealthy individuals increase their borrowings they replace weak debtors - bankrupt hedge funds, struggling businesses or repossessed homeowners - with strong ones and this helps to stabilise the financial system and sustain economic activity and employment. The country can borrow its way out of debt. But what I think is of little importance, especially as I have been wrong about so many aspects of this crisis - as have most conventional economists and policymakers, whose views I broadly share....

...Assuming interest rates are reduced to about 1 per cent today, it will make little difference to savers if they fall all the way to zero. To all intents and purposes, income from bank accounts will be reduced to nil.

The next logical step, although it may be politically controversial, would be to do the opposite of what the Tories suggest. Instead of reducing taxes on interest payments, the Government could tax all bank deposits and other risk-free savings. This would create a negative risk-free interest rate, encouraging savers either to invest in property, shares and other productive assets - or simply to save less and consume more. In either case, the result would be more consumption and physical investment, less unemployment and faster recovery from the slump.

In the absence of a savings tax - and even Mr Obama would probably balk at anything so controversial - there are plenty of other measures to boost consumption and investment. Most obvious are direct government spending on infrastructure; public guarantees and subsidies for business loans or home mortgages; or tax cuts and handouts, especially for those on low incomes who tend to spend all their money. The beauty of such policies in a world of zero or near-zero interest rates is that they are effectively cost free. In the present environment, extra public borrowing does not displace private employment or “crowd out” business investment.

There are plenty of objections to ever-increasing public borrowing, not just fairness and efficiency but also the moral hazard of creating a culture of state-dependence. But in a slump, when the alternative is business bankruptcies and longer dole queues, these objections make little sense.

PLEASE DO NOT ADJUST YOUR SETS


SENSE OF HUMOUR REQUIRED


beuhla : too daft ta laugh at innit!

GOODBYE TO ALL THAT

yo!...that woz a yeah wot woz...innit?

PALOOKAVILLE FINANCIAL stardate : capitulation day+102


...it sho am cold...inna loff...


...folks is all bundled up inna xmas swettez...freezin they bollocks off...


...hardleh a soun come aht o any onnem...


ECSTATIC INNA ATTIC


paintbrush : ??.suckah gone dahn...innit!

zooney : tomorra be anutha day...anna new yeah...

beulah : ....yawn...

laverne : sumbich...

opkin : bollox is fulla pre-dicks...

spidah : onna web...no one hear ya laff...

dopey : ake me up wennit all ovva...

grumpy : we saved the wurld...innit!

neinstine : time is relative...time ta see the relatives...time ta cut loose...


The financial crisis has slashed the equivalent of £60,000 from the wealth of every family in Britain in the past year, research suggests.


ANOTHER YEAR ANOTHER DOLLAR


...in palookaville we take predictions seriously...


...which is why we don't make none...


scheizer : ...: It's pretty clear the pros aren't buying. They are selling to the usual victims with the help of the Wall Street media.

The November low was a panic low and not a capitulation low. Capitualtion is when no one wants stocks, period. With the latest EPS forecast for SP500 earnings now at $42, and a Bear market bottom of a PE=8 (based on the last 4 big recession bottoms), the SP500 could/should see 42 x 8 = $332 in 2009. Perhaps we will see capitulation then. comment



...scheizer : Inning one of the Depression - perhaps that is the way you should look at it, plus read this:

seekingalpha.com/artic...


petey : my comments on seekin alpha stuff

RAG TAG AN BOBTAIL

yo!...merry Christmas...innit!

PALOOKAVILLE FINANCIAL stardate : capitulation day+97


UP THE GARDEN PATH act 3


...the audience at THE BRITISH ECONOMY have been led up the garden path...


...Admiral Brown and Gordon Darling...have had to learn some new lines...


...the audience are getting restless and are...starting to fidget...



brown : darling...this end of the garden has no roses...

darlin : aye aye cappin...no roses it is...


brown : no more boom an bust!

darlin : aye aye sir...no more boom it is...


brown : so!...how much ammo we got left...darlin?

darlin : look!...there's bill an ben...the flower pot men...


bill : loddelop...loddelop...

ben : innit!

brown : who's the tall broad wiyi blond hair?

darlin : thats the weed...

weed : : weeeeeeeeeeeEEEEEEEDDDD!!


...the woodentops are out inna garden lookin fo some turnip greens...


daddy woodentop : dig fo victory!...

mummy woodentop : yo shudda voted...tory...baby...


MEANWHILE BACK ATTA ROLLERCOASTER


dopey : hold on tite dudes...this sucker goin dahn!...

aladdin : f**kin wishes don run aht...

Ozzeh : yo don need no courage...jussa medal will do...

dopey : ah cars issa best inna wurld...

beulah : yo cars is the biggest inna wurld...innit!


...the rollercoaser ride speeds up in 2009...anna folks all gettin sick...


doc : build it...build it...jussa likkle bit...take it easy...sho yo lakkin it...

sleepy : whahoppen musky?...one minute all woz cosy an swell...

sneezy : sh*t hitta fan...innit?


VIRGIN ONNA RIDICULOUS


...the crew fomma loft are on their way ta the local piggly wiggly...

...fo turnip greens...


spidah : where alla shops gone man...??

zooneh : shops is toast dude...

laverne : say wot?...ah don care wot they say...i won't stay...inna wuld wiyaht shops...


...heh..heh..heh...looks lak yo gonna hafta get yo kicks fromma web...


NEXT TIME ON UP THE GARDEN PATH


...andy pandy gets a day job...somebody buys a house...

...oh yeah...anna sucker guz dahn...


y'all come back soon...heah?

UP THE GARDEN PATH act 2

yo!...alladin insane....innit?


PALOOKAVILLE FINANCIAL stardate : capitulation day+96

...while shepherds washed their socks by night...

...all seated onna grahnd...


BE CAREFUL WHAT YOU WISH FOR


...the story so far...

...the audience have been led up the garden path by the politix anna banks...

...this is their last Christmas in work...

...they savins have been de-interested and their currency devalued...

...they house value is way down anna negative equity is nokkin onna door...

...they pension pot is lak a scrotum inna arctic sea...

...they holiday abroad is off...


BUT THE SHOW MUST GO ON

...aladdin has freed the genie fromma bottle an made a wish...number one of three...


...ah wan a end ta leverage restrictions so as a 'vestment banks can go for it big time...


...the genie laughs his bollocks...off as a huge credit bubble grows out of the stage...


aladdin : WTF..!...ah dint mean it ta go lak at...Gdude...stop the credit bubble man...


...no sooner are the woids ahter his gob than...the Gdude laughs again an...


...whummmppppp!!!...lehman bros. is toast...as credit contracts...

...an two trillion bucks go up in smoke...


aladdin : F**k me!....oooohhhhhh sh*t......the genie laughs agin....


....aladdin is seen runnin fo his dear ass....


Gdude : cool it large bald aladdin!...i aint gon nail yo ass...ah nood thet wern't yo wish...


aladdin : ok...ah wants 700,000,000,000,000(whatever)bucks ta wipe uppa mess inna banks...


...the genie laughs agin...


ALLA DOUGH BIN MADE OFF WI


...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 opinion is 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...

...THEY IS A DISCLAIMER AT THE TOP O THE PAGE...

...THIS AINT ADVICE AN WE AINT IN BUSINESS...

...WE JUS SUCKERS LAK YOU...

...PISSIN INNA WIND...