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...

Love Is Not The Drug

yo!...cheap debt is...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+258...


...every day here in...


...palookaville...


...we have the famous fiesta...


ECONOMY OF THE LIVING DEAD


...it's official...


...our prime minister has achieved...


...zombie status...


...dead politician walking...


...all here agree...


...it's the right thing for a zombie economy...



IT'S LIFE JIM BUT NOT AS WE KNEW IT


...long ago there was demand...


...people bought what they needed...


...and were prepared to pay real money for it...


...or...


...pay decent interest rates in order to own their own home...


...now...


...the blood has drained away...


...demand can only be brought back to life...


...by the zirp...


THE ZOMBIE INTEREST RATE


...no one here in palookaville...


...will admit that the economy is dead...


...the banks are dead...


...and...


...our great leader is now dead too...



NOTHING SUCCEEDS LIKE
EXCESS


...the zombie housing boom...


...is in all the papers...


...brown set out to bring it back to life...


...and has succeeded...


...like he succeeded with the banks...


...now everyone is happy again...


...except the savers and the pensioners...


...and the people who had the money...


...and the first time buyers who were waiting for prices to fall...


...in order for them to afford to buy...



ZOMBIE SAYS DO THIS


...the zombie economy...


...controls prices...


...and knows best what each asset is worth...


...nothing dies...


...nothing new is created...


...this may go on for some time...

..."Large swaths of Britain have been left excessively dependent on taxpayer-funded activity that has crowded out the private sector and stifled enterprise. The State accounts for more than two thirds of the economy in the North East, Scotland, Wales and Northern Ireland. Now, with a protracted period of austerity in public spending made inescapable by the Government’s record plunge into the red, these regions will suffer disproportionately as the Treasury is forced to retrench...."

Times

Brown But Not Out update 1

yo!..for now...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+255...

...it's election time today...


...here in palookaville...


OUT BUT NOT BROWN


...nobody voted him in...


...but he's still here...


...all his ministers have gone...


...but he's still here...


...all his labour councils have gone...


...but he's still here...


...he robbed our pensions...


...let the banks bust the country...


...raised taxes...


...even on the poor...


...his agenda is...


...a client state...


...well...


NOBODY LIKES BIG BROTHER


...tax credits...


...state control...


...our money is their money...


BUY TO RUIN


...without this unfair system...


...there would have been no property bubble...


...people who lived in a town or village...


...could have afforded to buy homes where their parents lived...


...but nobody in government wanted to legislate...


...to stop this disasterous game...


...they did not want to tax it...


...they were all doing it themselves...


...big time...


PALOOKAVILLE FINANCIAL
capitulation day
+256...


...liam...

..."We're paying a heavy price for Brown's successes

Everyone knows, of course, about Gordon Brown's policy failures. During his 10 years at the Treasury, the Prime Minister clearly spent recklessly and stored up massive future liabilities (many buried off balance sheet).

It would be tough to design a worse way to tackle poverty than Brown's complex, fraud-ridden tax-credits.

His annual raid on pension schemes, a policy buried in his first Budget, has also gained pariah status – depriving our retirement funds of some £130bn and counting, a stealth tax they can ill afford.

What's happening now, though, is that even Brown's policy "successes" – the basis of any claim he has to a "legacy" – are starting to unravel.

The 1997 Bank of England Act has often been cited as his masterstroke. Handing the Bank "operational independence" to set interest rates was clearly the right thing to do.

The Monetary Policy Committee hasn't been truly independent, featuring too many of Brown's stooges for my liking, but has worked quite well. Over the past 12 years, inflation has generally been lower than it otherwise would have been because populism has been tempered by economic common sense and rates set with at least an eye on price pressures.

In recent months, though, quantitative easing has destroyed even the pretence of independence. Brown and his henchmen have yanked control back from the Bank – creating money to buy government debt, a policy doomed to backfire.

Last week the other aspect of Brown's once-lauded 1997 legislation came under attack as the House of Lords' Economic Affairs Committee laid into his decision to strip the Bank of responsibility for banking supervision and transfer it to the newly-created Financial Services Authority.

This resulted in "an inadequate definition of roles and responsibilities of the Bank of England, the Treasury and the FSA", said the committee, causing "failures of regulation and supervision that contributed to the UK financial crisis".

Their Lordships infer the Bank was deprived of crucial information about specific institutions, hindering its ability to make well-informed decisions on overall financial stability.

A separate paper on the same subject by Sir Martin Jacomb, also published last week, went further. Brown's tripartite regime has been "disastrous" said the one-time Prudential Chairman, accusing the former Chancellor of splitting supervisory responsibilities between the FSA and the Bank in order to "divide and rule".

As Sir Martin says: "Brown's desire for ultimate control was decisive, and ultimately ended in failure"....liam...

THEY STILL THINK IT'S ALL OVER

...ambrose..."

Those of us who still question whether the world has purged its toxins are reduced to the same tiny band of moaning Druids from early 2007, when we shook our heads in disbelief as the carry trade swept Iceland to fresh madness and bankers laughed off sub-prime rot at Bear Stearns.

We learned then to thicken our skins with walnut juice, lie down in dark rooms, and dissent from Goldman Sachs. Such seclusion is called for once again as Goldman replays its BRIC anthem and raises its oil forecast to $85 a barrel this year, betting that the world will roar back on a tidal wave of liquidity....

...The elastic was bound to snap back, just as it did in the bear rally of early 1931. Whether the underlying economy has begun to heal is another matter. World Bank chief economist Justin Yifu Lin said capacity utilization is running at an historic low of 50pc-60pc. Companies will have to fire a lot of workers. This is where the danger lies, and why he fears that deflation is creeping up on us.

Trade data from Asia are flashing warning signals again. Korea's exports were down 28.3pc in May, reversing the April rebound. Malaysia has slipped to -26pc, and India has touched a new low of -33pc.

US freight data is getting worse, not better. The Association of American Railroads said traffic was down 22pc in the third week of May from a year earlier. Canadian freight was down 34pc.

The American Trucking Association (ATA) said it saw fresh drops of 4.5pc in March and a further 2.2pc in April. Tonnage is down 13pc over 12 months. Bob Costello, the ATA's chief economist, said companies have not cut inventories fast enough to keep pace with declining sales. The contraction in truck volume has "accelerated".

Yes, the Baltic Dry Index for bulk shipping of resources has quadrupled since January, but this reflects China's bid to stockpile metals while prices are low....ambrose...

MIND THE DEBT

...irwin..."...Treasury IOUs are flooding the market to finance deficits that by White House estimates will take the national debt from 40% of GDP to 70% (the Congressional Budget Office puts the figure at 80%) by 2011, the highest level since the second world war. Throw in the printing of money to support the Fed’s efforts to prop up credit markets and investors have good reason to fear inflation and a decline in the value of the dollars with which the government will repay their loans. So they are driving up long-term interest rates. And dumping dollars.

If those trends continue, the green shoots will wither as higher rates abort the housing recovery, and make it more expensive for businesses to make job-creating investments. Bernanke told Congress that “we, as a nation, [must] begin planning now for the restoration of fiscal balance . . . [that] will require a willingness to make difficult choices”. This can only be interpreted as a warning to the administration that if it doesn’t get the deficit under control, the Fed will start contracting the money supply and allow interest rates to rise. Just how the president and Congress can be persuaded to make those “difficult choices” remains unclear.

Perhaps that friendly persuasion will come from the folks who, like the Fed, pose a threat to the Obama agenda: the Chinese who are sitting on about $1.4 trillion of America’s IOUs. On last week’s trip to China, Tim Geithner, the Treasury secretary, was greeted with derisive laughter when he assured students at Peking University that “Chinese assets are very safe”. Their elders were more polite. Guo Shuqing, chairman of the China Construction Bank, helpfully noted that the dollar will remain the world’s reserve currency “in the short term” because the American “economy is No 1 in terms of competitiveness, in terms of innovation”. Longer-term prospects are being made clear by Chinese officials who are warning that unless America puts its fiscal house in order they will seek to reduce the role of the dollar in world trade and will not buy IOUs at anything like current interest rates....irwin...

THOSE GREEN, GREEN SHOOTS OF HOME

...david..."For me, one of the central questions is whether a pick-up in growth can be sustained even when bank lending remains weak. Amid the flurry of stronger news last week was some downbeat evidence from the Bank of England on lending.

Lending to households rose a modest 0.2% in April, the Bank said, and was up by 3.4% on a year earlier. But lending to nonfinancial companies fell by 0.9% and was a tiny 0.8% up on a year earlier.

This chimed with a survey from the Engineering Employers’ Federation, which showed that 45% of firms had seen an increase in the cost of their finance and only 4% had seen an improvement in credit availability in the latest three months. It is a familiar story throughout business.

Charlie Bean, the Bank’s deputy governor, buys into the story of a resumption in growth before the end of the year, but he also warned in a recent speech that bank lending was likely to remain subdued, at best, for some time.

“We are still some way from having banks feel sufficiently secure that they can lend normally, and from investors that have enough confidence in the banks to provide them with sufficient funds,” he said.

The government’s October banking measures were a straightforward rescue operation but its subsequent actions, particularly in January, have been intended to get lending flowing again. Quantitative easing, confirmed last week at £125 billion for now, was intended to boost lending and, while it is early days, is not doing so"....david...

...petey...

...inquirin minds should visit the links an read the lot...innit!

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...

Remorse : The New Bull Market

yo!...pitchforks averted...for now...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+231...


...here in palookaville this morning...


...the talk is all about...


...forgiveness...


SERIOUS REMORSE


...the recession...


...caused by the ending of polititions expence claims...


...is almost over...


...as new money will be created...


...by...


...increasing their salaries...


...to compensate for their loss of privilige...



THE GOOD NEWS


...is that...


...this will increase their pensions...


...and this is a much more secure form of income for them...


...maybe now that they won't be spending all their time...


...working out how to claim maximum benefits...


...they will be able to find jobs for the 2.2 million newly unemployed...



TAKE AND GIVE


...the great debt...


...caused by the massive cost of MP's expences and pensions...


...is to disappear...


...they are to give back all of their extravagent takings...


...the national debt...


...will now not be...


...£240,000,000,000,000...


...after all...

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...

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...

ROBBIN B*STARDS

y0!...daylight robbery...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+171...

...here in palookaville all the talk is about the local outlaw...


...his band of merry men and women...

...with guaranteed, index linked pensions...


...who are stealing the pensions from the poor...


this robbin band

...STEALS FROM THE POOR...

...GIVES TO THE RICH BANKERS...

...AND THOSE WORKING FOR THE STATE...


...meanwhile...


...the serfs here in palookaville are all watching the football...

...or phoning in their votes for some reality tv idiot...


...they do not know about how they have been robbed...

...they have been told that...

...the boarded up stores are part of some american problem...

Retirement plans of millions of Britons at risk after Bank of England 'prints money'

The retirement plans of millions of Britons have been put at risk after the Bank of England's controversial plan to create money tore an unprecedented hole in pension schemes.

..."The Bank was accused of hammering the final nail into the coffin for Britain’s final salary pension schemes, which have seen their deficits climb in recent years, partly as a result of Gordon Brown’s decision as Chancellor to levy a £6 billion tax raid on pension funds’ dividends.

Some 2.5 million workers are currently signed up for these schemes which provide retirees with a guaranteed annual income when they reach the appropriate age.

Having enjoyed a small surplus only a year ago, these funds have also been hit by the fall in the stock market over the past year.

However, the effect of the Bank’s scheme has been to increase the deficit between what is in the funds and what is needed to pay out future pensioners by an almost instant £100 billion. Although some expect the deficits to fall in the years ahead as the economy improves, insiders warned that this could be the final straw that persuades companies to shut down these schemes altogether and turn instead to far less generous defined contribution plans.

However, experts warned that even these more parsimonious schemes, which 8 million workers are subscribed to, will suffer as a direct result of the Bank’s actions. The amount these people receive from their pension depends not only on the size of pot they amass over their working life but on the rate of the so-called annuity which provides them an annual income from the moment of retirement...."sunday telegraph

painty : now watch the companies with these pension deficits...
...see their share prices come under even more pressure...

THE MSM TELLS THE TRUTH AT LAST

yo!...abaht time...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+122...

peteynation : foolin alla the people alla the time is difficult...

...1997 - 2007...

smoke an mirrors...profits of wax...

...less of the benefit...

...more of the tax...

DOWN BY BROWN

albert edwards : ..."What I find amazing is that people aren’t really nailing Gordon Brown and [Bank of England Governor] Mervyn King for this,” he said. “At least in the US they had the excuse of the arrival of sub-prime — a new sector of the market. We didn’t really have anything similar but we ended up with a bigger national Ponzi scheme than the US.”

THEY ARE NOW

from the times :-

The case against Gordon Brown

...seven nails in his political coffin...

THE LONELINESS OF THE LONG DISTANCE SAVER

y0!...long shot kikka buckit...innit!

PALOOKAVILLE FINANCIAL
capitulation day
+114...


...petethepainter is dead but still on the run...

...head shot with a sawn off, reactivated .45...

...he was under water at the end of 2008 by 7%...


...he has been tryin ta get to the bottom of the pension fund collapse...

...by swimming the pools of famous silent movie actresses in downtown palookaville...

...he hopes to find the...

...mother of all bottoms...

Distressed asset indices fall sharply

Indices tracking the value of the trillions of dollars of distressed assets that continue to blight bank balance sheets fell sharply this week as a negative spiral of financial distress and subsequent economic pain continued.

The declines – which signal further potential writedowns by banks – are fuelling fears that the first quarter of this year could herald further pain for the financial system, even as many banks reveal sharp losses for the fourth quarter of 2008.

SHORT FOR SHORT'S SAKE


Short for Shorts sake...

Money for Gods sake...

Gimme the readys...Gimme the cash...

Gimme a bullet...Gimme yo stash...

Gimme yo silver...Gimme yo gold...

Make it a million for when I get old..!

Short for Shorts sake...

Money for Gods sake!


SPECIAL LITERARY EDITION

mish : Huddling Under The TARP

Inquiring minds are reading Andrew Jeffery's column, Bank of America Huddling Under TARP.

To quote a recent op-ed in the Journal, which likened the government response to the current financial crisis to the circumstances described in Ayn Rand's Atlas Shrugged...

"Politicians invariably respond to crises -- that in most cases they themselves created -- by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism."

The similarities are so striking, it almost seems like regulators are using Atlas Shrugged as a playbook for their policy response to the crisis. They must not have waded through all 1,000 pages to see how the story ended.

Atlas Shrugged: Fiction To Fact

The Wall Street Journal article that Jeffrey quoted is Atlas Shrugged': From Fiction to Fact in 52 Years. Here is another snip.

The current economic strategy is right out of "Atlas Shrugged": The more incompetent you are in business, the more handouts the politicians will bestow on you. That's the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies -- while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers.

With each successive bailout to "calm the markets," another trillion of national wealth is subsequently lost. Yet, as "Atlas" grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate "windfalls."

...Mike "Mish" Shedlock...


GROUCHO, HARPO, CHICO,

...KARL...

..."Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take on more and more expensive debt, until their debt becomes unbearable.

The unpaid debt will lead to the bankruptcy of all banks, which will have to be nationalised, and the State will have to take the road which will eventually lead to communism.”

...So says the Karl Marx quote that has been whizzing round Wall Street and the City...

times :

"We seemed a step closer to that prospect yesterday.
Bank shares plunged again on both sides of the Atlantic amid concern that more capital injections will be required. Bank of America shares fell 20 per cent on reports that it needed further government help to complete the acquisition of Merrill Lynch. Merrill has suffered higher than expected losses in the fourth quarter and BoA is in talks with the American authorities about an infusion of capital.

Citigroup shares tumbled further, ahead of today's results, which are expected to be horrible.

These falls took the combined value of Citigroup and BoA - so recently the two most valuable banks in the world - below that of Wells Fargo, the conservative West Coast lender.

Back in Britain, bank shares were also under the cosh again, as ministers scurried to finalise another package of measures designed to get credit flowing again.

Gordon Brown said that the toxic assets of banks had to be dealt with, which could require more capital, while Capital Economics forecasts British banks will lose £85billion over the next three years and lending will be slashed by £400billion unless they get more capital.

At this rate, RBS will be fully nationalised before Sir Philip Hampton takes over as chairman.

According to the Marx quote, this means communism will not be far behind.

Except, of course, Marx didn't say that.

The quote is a fake. You just can't trust those bankers. times

1984 : THE WAY WE LIVE NOW

The Ministry of Truth...

wikipedia : ..."is where the main character of the book Nineteen Eighty-Four, Winston Smith, works.^[1] It is an enormous pyramidal structure of glittering white concrete rising 300 meters into the air, containing over 3000 rooms above ground.

On the outside wall are the three slogans of the Party:

"War is Peace,"

"Freedom is Slavery,"

"Ignorance is Strength."

There is also a large part underground, probably containing huge incinerators where documents are destroyed after they are put down...

memory holes.

For his description Orwell was inspired by...

the Senate House at the University of London.<sup>[2]..."




ANYONE FOR KAFKA ?</sup>

Adj.	1.	Kafkaesque - relating to or in the manner of Franz Kafka or his writings
	2.	kafkaesque - characterized by surreal distortion and a sense of impending danger; "the kafkaesque terror of the endless interrogations" unrealistic - not realistic; "unrealistic expectations"; "prices at unrealistic high levels"

<sup>http://www.thefreedictionary.com/Kafkaesque



THE PEN IS MIGHTIER THAN THE PENCIL


...so!...

...ayn rand, karl marx, george orwell, kafka...

...things are startin ta look serious...</sup>

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...

UP THE GARDEN PATH

yo!...itta pantomime...innit?


PALOOKAVILLE FINANCIAL stardate : capitulation day+95


...we three kings from orient are...

...one with a bucket an one wiya jar...

...one onna scoota...pappin it's hoota...

...followin yonder star...



...in palookaville we take Christmas seriously...


...our panto this year is 'up the garden path' by henry gibson...



...a cast of thousands is bin vyin fo a parts wot stars is born of...


petey : ah gone be sinbad cos i gets ta wear a sword...

beulah : ah bags be snowhite cos i gotta cute ass...

laverne : shoot! ah bets at painty bastard meks me be a wicked witch...

...jus becos i gotta wart on me nose...


SNOW WHITE AND THE CRUNCH CREDITS


...featurin --- dubbya as dopey, obama as doc, admiral brown as grumpy, mervyn king as sleepy, gordon trichet as happy...

...and introducin...the american economy as sneezy...


...admiral paulson as aladdin wot lets a genie outa a bottle...


...featurin the fed as the fairy godmother...


...uk economy gone be cinderella...


...nouriel roubini be prince charmin...


...bernanky as the wizard of oz...


LIVE AT THE PALOOKAVILLE ODEON


...here come the plot...

...the capitalist world has been captured by the big bad wolf...who has blown down the gingerbread cottage...built on sand...


...the workin stiffs are bein held inna tower, inna frozen forest of socialism...


...the banks have been taken over by the state in a vain attemt...

...to reflate the financial souflee...


...a great ponzi scheme has been revealed...in place of the financial system...

...and alla kings horses an alla kings men...

...cannot put humpty dumpty back together again...


...sinbad has been saved from bankruptzy by jason and the argonauts who have all their money in golden fleeces....an silver...


...upstairs...inna gods...zeus anna gang are laughing they bollocks off...

...atta twats dahn here inna auditorium o the palookaville odeon...



aladdin : open sesame an lets have a butchers at yo treasure...


goldilocks : f*ck off aladdin we wuz jus allright on our own in heah...

...yo panto dudes jus f*ck it all up...


wizard of oz : follow the yellow brick road...


cinders : get yo freakin maulers offa me ya crazy b...

buttons : cool it sista...yo caint swear inna panto...


puss in boots : where alla credit gone dudes?

audience : itz behind you!..

grumpy brown : oh no itz not...


imf : oh yes it is...


dick wittinghton : 'cats goin crazy fo ta sell they houses...


the grand ole duke o york : had £10,000, an then theys woz worth 10,000 euros...

...and once me funds woz up...an then me funds woz dahn...an now they only halfway up...

...which is neither up nor dahn?..


...INTERVAL...


...act two...


DEEP SHIT '09


...cardboard is the new bricks an morta...


...after a rally towards the inauguration of doc obama...shocks an scares head south...


...again...


...itta black swan song fo a capialism...anna chinese don lak it...


widow twanky : wot fo we gotta be goin broke when it woz em western gits wot started it?


nanky poo : ah so! ...velly sirry western porritix...innit!



dopey : so long suckers...ha,ha,ha!...


Ozzeh : yo! where alla dosh gone man?...

...ah don geddit...one minute we was sailin along onna crest o a bubble...then whumppp!!



paulie : it aint me babe...no..no..no..it aint me babe...it aint me yo lookin for...babe!



sinbad : this panto sucks man...a lak it betta when we woz playin DORKTREK...

EVERY BODY KNOWS THIS IS NOWHERE ?

yo!...DIY hedgefund...innit!

PALOOKAVILLE FINANCIAL stardate : capitulation day+75

...evva boddy seasick nah...onna choppy waters...

...noboddy inna proppa bollox said it would get this rough...

...them as had sense ta stand up an tell a truth was told...

...sit dahn, sit dahn, sit dahn...yo rockin a boat...


HEDGE YO BETS : WATCH YO ASS

beulah : wot fo i got speak ta a dude onna phone?

petey : it fo yo own good innit!...yo pension fund need watchin lak a ork...

laverne : yo f*cked it up antcha!

zooneh : no he aint...well not much any road...

'cat : sh*t...nah i gon be eatin tin food fo evva...innit?

vince : whahoppen musky?

musky : deputy dawg...bin stood dahn onna pay cut an notice ta quit...

governator : yo slobs is too fat ta catch no crimnals...y'all gon be aht onna asses...

....states bust innit!...revnue dried right up...

beulah : STFU alla yous...i wants ta know wot iss dick head painty bastard is...

....doin wi me stash...

petey : calm dahn honeh...we all doin ah best ta keep yo stash from disappearin...

spider : tell em painty...tell em abaht a fund switchin...

petey : well.. it sure int no piece o piss...y'all gotta keep yo eyes peeled alla time an yo...
...still gets it wrong sommathetime...

zooneh : ya gotta spread yo stuff arahnd an hedge one agin anutha...lak a posh folk do...

petey : lak theys times ta be long in shocks an times ta be short...times when index linked...
..is hot...an times when not...

beulah : shoot! yo suckers is apeshit...how come a bunch a losers in palookaville...
...gets ta says wots wot?

petey : it inna plan babe...yo kin switch yo heart out iffn yo...only dare...

zooneh : we woz outa property atta top man...that one wuz easy...buy bits o wotz...
...goin cheap...an switch aht when itz riz some good bit...

petey : don try this at home boys an girls...not on our say so...we don give advice...

CHECK OUT THE DISCLAIMER

opkin : yo! boss...are we there yet...is the bum in yet?

painty : this aint no sprint dude...this a real bummer...keep yo wellies dry an...
...yo eyes wide open...we a rowin boat inna hurricane...

...lookin back an goin... ?..

CRY ON THE DIPS

yo!...cry me a river...innit!

PALOOKAVILLE FINANCIAL stardate : capitulation day+61



...an investor...undressed as Burt Lancaster...is attempting to bring back the bull market by swimming...under water...through every pool in FUNDSVILLE...

...the story takes place in the affluent suburbs of Westchester County, New York, and focuses on Bully Bulltard, who despite being middle-aged, wants to grow his pension fund and believes that he is a shrewd investor...

...he marvels at his trail-blazing idea of "swimming the county"...

...at the beginning of the story, Bully is at a cocktail party at a local investment club and realizes that by following an imaginary chain of private and public pools in his affluent community he can literally swim to retirement...

...next we have a succession of similar scenes, as Bully enters the backyard of his neighbours...

...sometimes bursting into a party, sometimes engaging in conversation, and most of the time having a drink - but always swimming the length of their pool. Soon it becomes clear to the viewer that something has gone awry.

...at first Bully is well-received in the backyards and pools, but after finding a dried pool and waiting for a storm to pass in a gazebo, he starts to feel tired and disillusioned with his idea...

...although he is still determined to go on, he can hardly remember the excitement he first had at the investment club...

...Bully is terribly upset to find out that the Welchers' pool was dry, in fact their house was up for sale...

...he recognizes that his memory must be failing him or he is repressing unpleasant facts for not remembering what had happened to the other bulls...

...at the Halloran residence, Mrs. Halloran tells Bully she is sorry to hear of his misfortunes which, again his memory seeming to fail him, cannot remember, although Mrs. Halloran mentions Bully selling his house and something about his children...

at the Biswangers’ he is received as a gate-crasher and even their barman treats him with disrespect...

...he overhears Mrs. Biswanger saying that someone, possibly Bully himself, showed up one day asking for money since he went bankrupt...

...further on, bully's former mistress Shirley Adams, whom he cannot even clearly remember having an affair with, tells him that she won't "give him another cent".

...several signs indicate that time is passing more rapidly than Bully realizes...

...he slowly observes that each pool is significantly colder and much more difficult to swim...

...by the end of the story, Bully is unable to recognize the constellations of the midsummer sky, instead finding the northern constellations Andromeda, Cepheus, and Cassiopeia, implying a change of season....

...in the story's conclusion, Bully reaches his retirement...

...as he looks inside the locked and deserted home, he wonders why his money is not there anymore...

in fact...it's all gone!

REVIEW

...John Cheever's "misery in suburbia" short stories, brief and to the point, have always proven excellent TV fodder. Director Frank Perry's The Swimmer, adapted for the screen by Perry's wife Eleanor, is a rare, and for the most part successful, attempt at offering a Cheever story in feature-length form. Dressed only in swimming trunks throughout the film, Burt Lancaster plays a wealthy, middle-aged advertising man, embarked on a long and revelatory journey through suburban Connecticut. Lancaster slowly makes his way to his split-level home by travelling from house to house, and from swimming pool to swimming pool...."

petey : don go near the water...don do the swim...

WHAT'S YOURS IS THEIRS, WHAT'S THEIRS, THEIR OWN

yo!...pornographic...innit!

PALOOKAVILLE FINANCIAL stardate capitulation day+48


...the very thing that... makes them rich... will...make you poooor!!!...


halfcat : yo boss...jus wot is it abaht all iss crisis sh*t that makes yo so uncool?

plastered : 'cat man...i jus don lak bullsh*t b*stards innit!...

...i wuz ovva at barry's an click a link ta bloomboig ta watch jimbo onna vid man...

...an he speak a lotta sense...not jus on investin but also nailed the people who are causin alla crap...

...seems lak mish an jimbo see the fed, an paulie, an alla wizards o oz as...
...the problem an not the solution...

...itta politix wot ruinin a future...proppin up a zombie banks an zombie companies...

...instead a lettin a good take ovva a assets o a bad...they bustin a public finances...
...ta protec they friends!

'cat : yo!...chill dude!..don go gettin poplexed...it all loada bollox anyhow innit?

peteypoplex : WTF man!..me pension goin dahn a pluggole innit!...
...me house value sinkin by a minute... freakin deflation nah...
follered by hyper-inflation whenna liquity jexions kick in...

...an alla time a politix gettin massive index linked pensions...

...fo f**kin up...


OH YEAH...

...an theys this..

bloomberg : ..."The U.K. spent its way into trouble. It can't spend its way out again. Taxes have risen too high, and debt has soared out of control. The nation needs to pay down its obligations and lessen its dependence on financial services. There is no reason it can't make that transition with hard work and some belt-tightening.

A final splurge of public spending will only postpone that adjustment and create a real risk of economic disaster."

(Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.)

petey : my italics and emphasis