Thursday, April 29, 2010

Decoupling Myth was True :)

We have seen the likes of Peter Schiff say the world will decouple from the United States. Well, he was right, Europe is decoupling right into the Mediterranean right before our eyes. I don't think that is what he envisioned though.

There is no alternate global financial credit system, when the US goes it all goes. All the countries have the same system within the same global system, it's based on expanding credit at an exponential growth, unfortunately humans can't expand exponentially long-term.

Greek debt crisis spreads to Spain as credit rating is cut
The Greek debt crisis appears to be spreading.

Standard & Poor's cut Spain's credit rating one level to AA and maintained its negative outlook. The move came just one day after the rating agency dropped Greece by three levels to junk status and pulled also-troubled Portugal down two notches.
Credit-rating agencies loom large in Europe crisis
Yet less than two years after the crisis peaked, investors still take them seriously. Case in point: S&P on Tuesday cut Greece sovereign debt to 'junk' status and dropped Portugal's down two notches. That downgrade sent financial markets from London to Hong Kong plunging.

From Peter Schiff, ok, sure buddy.
US Stock Market
Unlike the "legitimate bull markets" of many foreign markets, Peter Schiff believes the US is merely experiencing a "rally in a bear market," and is lagging the rest of the world "for a reason." Sep 25, 2009 The Business Insider

When the US goes down the whole system goes down, end of story. Anyone that decouples before that date will find themselves at the bottom of an ocean.

May 26, 2009
The World Does Not Need Our Consumption
The world doesn't need our consumption, we need their production. The global economy is fine without propping up the U.S. economy.

Sure, that is why Europe is falling into the ocean. More great entertainment. You think Greece is bad you wait to see what the rest of the European countries are like, they are actually in worse shape.

PS: Well, ultimately, a lot of the currencies that are currently pegged to the U.S. dollar will be very strong, a lot of the Asian currencies. We already see a lot of the resource currencies starting to move back. We have seen rather substantial strength in the Australian and the New Zealand dollars in the past few weeks. I do think you're going to see strength also in the Euro, as the Euro seems to be a good alternative to the dollar as far as a reserve-type currency. And the Europeans' monetary policy is not nearly as bad as ours, so more of that type money will be attracted to the Euro and will probably benefit other Euro-zone type currencies - Scandinavian currencies, the Swiss Franc - those currencies will benefit, as well.

Ok, sure buddy. Thanks for the entertainment.

Wednesday, April 28, 2010

The Equation Must Feed

Click on the image above to see a better picture.

The equation must be feed, as you can see from the chart above, the equation is not being feed it's required feeding. Debt/credit creation is rolling over and has been for over a year. You can see the federal government spending increase to try and bridge the gap between what is required and what is being created by everyone else. As I explained in an earlier post, it's the equivalent of bridge to nowhere.

The equation must feed, if you don't feed it, it will start to feed on the non-funded liabilities sooner or later.

Monday, April 26, 2010

Portuguese 5-yr CDS at record high, spread wider

Portuguese 5-yr CDS at record high, spread wider
The cost of insuring Portuguese government debt against default jumped to a record high on Monday on concern that Portugal could be next to suffer a Greek- style debt crisis if no lasting solution was found for Athens.

Who would have ever thought this would happen? Sarcasm.

The sharks next victim is on deck.

It's pure Math folks, you are not creating enough new credit to sustain the system.
Greece under pressure as Germany drags feet
Restructuring, contagion fears shadow market despite aid request

Worries Germany will resist the early release of bailout funds for Greece put Greek government bonds and the euro back under pressure Monday, cutting short a relief rally triggered by Athens' request last week to tap a joint European Union-International Monetary Fund bailout plan.

Oh here we go again.

German Foreign Minister Guido Westerwelle on Monday said Berlin opposes providing financial aid to Greece without Athens presenting a credible debt-reduction program, Agence-France Presse reported. Westerwelle heads the Free Democratic Party, the coalition partner of German Chancellor Angela
Merkel's Christian Democratic Union.

If a bailout happens every country will upping spending in the hopes that German or someone bails them out. If nothing is done, defaults will occur.

There is no out there is only in.

Thursday, April 22, 2010

Oh I Can See This Ending Well

You can't save the financial system, but there is time to save your State. Oh I can see this ending well.

It's over folks, the sooner you get that through your head the sooner you can get on with life. The only way to save your States is to eliminate the parasites and break the chains.

Greece Roadshow Moving onto Portugal

Portugal Says It’s on Right Track to Reach 2010 Deficit Target

Sounds about right until you read the details.
Portugal had a deficit of 9.4 percent of gross domestic product in 2009, more than three times the European Union limit of 3 percent, and the government has pledged to narrow its deficit to 8.3 percent this year and 2.8 percent in 2013.

Moody's is running late as usually but the Greece roadshow is about to possible begin in Portugal.

Debt woes overseas continue to drive dollar gains

Of course, the stupid bitch on CNBC was telling me the other day that Greece was saved and that Europe was fine. Now the stupid ho is on TV telling me Greece might default.

The Greece Plan Roadshow

Don't worry folks, what is happening to Greece will be coming to a Country and/or State near you within time.

German Stocks Fall as Greece Leads Jump in Euro-Region Deficit

The European Union said Greece’s deficit was 13.6 percent last year, higher than the government’s April 7 forecast of 12.9 percent, and could top 14 percent of gross domestic product as “off-market swaps” cloud its estimates. Ireland overtook Greece as the EU nation with the largest shortfall, which was revised up to 14.3 percent.

Greece holds all the cards, and if you don't like the cards they hold wait till you see Portugal, Spain, and Italy's cards. The amount of new credit being generated is not enough to sustain the system, therefore the system must continue to collapse.

Wednesday, April 21, 2010

Greece Plan #7 or #8?

Greece begins aid talks as bond rout continues

Investors "want to make sure that the aid plan for Greece is no bluff," said Luca Cazulanni, deputy head of fixed-income strategy at UniCredit Bank in Milan. "It appears very unlikely that the curve will come down significantly before the package is activated."

On a few websites yesterday rumors of a backdoor bailout of Greece, it sounded like more jawboning to me. The market is now saying show me the money. Less then 16 hours later we have yet another plan.

France is going to lend to Greece, Greece will have to probably lend money to Portugal in a few months, Portugal will have to lend to Spain, Spain will then lend the money to Italy, Italy will do the final reach around and lend it back to France. Problem solved.

Monday, April 19, 2010

Goldman, So What?

All the focus is on Goldman, I really don't get what the big deal is. I mean if you think Goldman is the only company creating these products to sell to gullible people you are sadly mistaken. The whole financial system is one big ass pyramid scheme, sold to all you gullible people all the way back before your grandfather's grandfather was even a thought.

I mean you have the government actually telling everyone to hide their losses, if all these banks wrote down the true worth of these so called assets, well goodbye company and goodbye financial system. People can promote these lies all they want, the Truth always wins. The system will collapse and there is nothing you can do to stop that.

Give it a few more days they will move on to more pressing needs Greece.
April 17 (Bloomberg) -- Merrill Lynch & Co. engaged in the same investor fraud that the U.S. Securities and Exchange Commission accused Goldman Sachs Group Inc. of committing, according to a bank that sued the firm in New York last year.

Goldman wasn't the only one, Duhhhhh!

The only way the system survives longer is to find more and more gullible people at an exponential rate. Humans can't supply the equation long-term.

Thursday, April 15, 2010

Ron Paul Good Intention But...

I love Ron Paul for his views on liberty but his knowledge of the banking system is very flawed. He keeps on saying the Federal Reserve "creates money out of thin air", well, the system is "credit", if it's not created out of thin air where is stored?

All "credit" is created out of thin air, always has, always will. Just like love is created out of thin air.

He has also expressed a desire to go back to a gold standard, well, sounds good on paper but you ran out of gold to support the credit system back almost a century ago. If he with Peter Schiff had been elected the system would have collapse instantly.

THERE IS NO SUCH THING AS A GOLD STANDARD IF PEOPLE BORROW AND LEND WITH COMPOUNDING INTEREST ATTACHED because eventually you run out of the underlying asset, how do I know this... it happened in 1930. Actually, it happened before that but that is when stupid humans went running to the bank.

What Ron Paul is suggesting is the exact same system you have now, he just doesn't want the government involved, well it's going to rise then one day it's going to collapse into a big heap of a mess and people are going to have to be liquidated.

Wednesday, April 14, 2010


The only questions I really can think of from Lemmings using the equation are these.

How man Lemmings are going to jump into the fire pit at the end of their march?
Where (when) in the road will the fire pit appear?

Everything else was decided way before most of the present Lemmings where even born.

Greece Is Not Alone

EU Says Portugal May Need Additional Deficit Measures

Portugal itself may need “pre-emptive” aid from euro-region governments, former International Monetary Fund chief economist Simon Johnson said in an interview on Bloomberg Television on April 12.

Here you go, change the "may need" to "will need".

If you think Greece is the only one, well I have a bridge to sell you. (Insert your Country and/or State here) will be inline sooner or later. As you can see the Greece bailout #5 or 6 or whatever number we are calling it is now being called in. Players on deck and warming up Portugal, Spain, Italy, Ireland or how about California, New York or even Illinois. Eventually every country will be sucked right down the hole.

How many can fit in the warmup circle?

Some say the end is near.
Some say we'll see armageddon soon.
I certainly hope we will.
I sure could use a vacation from this

Tuesday, April 13, 2010

"They'll Just Inflate Out of this Mess"

"They'll Just Inflate Out of this Mess"

This is the most humorous thing I keep reading on the internet. Now, if someone had magical powers what are the waiting for if they can just inflate the system out of this mess? Why didn't they use this in ancient Rome? Heck, you would have thought Hilter with all his scientist could have figure out how to inflate out of the mess.

There is no inflating out of the mess, as you inflate you are actually getting closer to your ultimate doom. The current global financial credit system has been inflating for 66+ years, now it's not inflating. Now if you believe Helicopter Ben or Benny and the Jets can just endlessly drop money from the sky and produce credit, please have him send me over a pizza and 99 virgins oh and a 6 pack of beer.

Humans have no ability to supply exponential growth, there is no avoiding what is coming down the pike. Benny and the Jets do have enough power to effect the rate of decline, Benny does not have unlimited power to sustain the equation long-term.

If all it takes is putting a few digits in a computer, everyone go home and wait on all the virgins and pizzas to show up at your door and please send me a note as to how this all worked out for you.

Monday, April 12, 2010

Ken Thompson is on Youtube as well (archives)

The financial system is toast, there is time for you to reclaim your State government and the Federal government.

Dubai Will Eventually Fall Back Into The Sea

Dubai’s $330 Billion Deferred Buildings Impose Fees

Those Dubai islands will eventually sink back into the sea. Suckers still lining up for the slaughter.

Silvia Turrin paid two-thirds of the $520,000 purchase price of her Dubai apartment, only to learn that it won’t be finished until 2012, two years late. When she stopped payments to Emaar Properties PJSC, the developer hit her with late fees.

Boris Thinks the Paulson Bazooka Will Work This Time

The euro advanced the most in seven months versus the dollar after Europe offered Greece a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates.

“The deal has quelled any notion that Greece would default on its debt,” said Boris Schlossberg, director of currency research at the online currency trader GFT Forex in New York.

Well, he is correct, it has slightly abated the notion overnight, spreads have come in slightly.

quell (kwl)
tr.v. quelled, quell·ing, quells
1. To put down forcibly; suppress: Police quelled the riot.
2. To pacify; quiet: finally quelled the children's fears.

The question is for how long? Another minute, another hour, another day, another week, or another month. Paulson tried this same thing back in 2008 and his famous Bazooka blew up in his face. To me this just sounds like plan #4 or #5 or whatever number they are on now.

Don't worry this is coming down the pike for every country and the States won't be far behind. Maybe Italy can send Greece some money and then Greece can turn around and send some to Italy. Sounds like a plan, plan number 6.

None of these plans will work long-term, the system is unsustainable long-term.

Sunday, April 11, 2010


Highly recommended website, Common Sense Radio. Ken talks about the republic and how the politicians have stolen the American way of life. The financial system as you know it is over, there is time to save the 50 republics of the one United States republic.

Friday, April 9, 2010

It's Over, Last One to Realize is the Biggest Loser

The graph shows you above that your system is coming to an end, the system DEMANDS exponential growth but you can't even achieve what is needed with interest rates going to all-time lows.

I saw this discussion on TV, there was interviewer and two people being interviewed. One guy was a small businessman, the other was a banker. The businessman was like I can't get a loan to fund payroll, the interviewer was like all angry and says to the banker why won't you give this guy a loan. The banker looked confused, well my first question would be what kind of business model do you have if you have to have continuous loans to fund your payroll.

The seniors are crying because rates are too low, well the reason they are low is because nobody wants your money. The system is coming to an end.

Everyone is searching for yield but no one can or wants to borrow from you. IT'S OVER JACKASSES.

China the 2010 version of the 1930 United States

Headlines: China fin min fails to sell out bills at auction

China is no different than the United States was in the late 1920s and early 1930s. The United States was a huge exporter, flooding the world with cheap products.

The only reason those factories in China keep running is because of newly created credit created worldwide, lead by the United States. Wait till all you nutbags see the hidden balance sheets over in China where they are building large cities that have no occupants.

China runs the exact same system as the United States, and is a part of the global financial credit system. The system is expands at the rate needed or it starts to collapse. The Chinese have about as much power to sustain the equation long-term as Snoopy.

Monday, April 5, 2010

Inflation My Ass... Dig Up The Corpses
Interesting article over at zerohedge.

Of course, the one aspect that Moody's does not discuss at all is the surge in money printing. Yet as monetary aggregates are still falling, and all the excess money is held by banks in the form of excess reserves, the debate continues to be just what catalyst will force banks to part ways with this handy $1.2 trillion buffer.

Not this again. The banks are not holding onto anything at all. If you line up a 100 million people that are able and willing to take on additional credit at an exponential rate, you would be back on the road to growth. The problem is the system is tapped out, you ran out of the amount of lemmings to support your pyramid scheme.

Banks will lend, they have no one to lend to. Why people continue to talk about this is beyond me. You ran out of brick to put in your pyramid, I guess you could start digging up corpses and have them sign on the dotted line.

Inflation is the increase of money. In today's system "credit" is used as money. Credit use is not expanding, it's collapsing. Unless you can find more and more people willing to take on more and more debt, it's over... simple as that. You are simply running out bricks to put in your scheme.


The Big Unraveling

It has never been about "if" it will unravel but the size of the problem humans would create "when" it unraveled. This is the largest wave in the history of man to date, the unraveling will be the largest humans have ever seen.

The attempt is to fight off the inevitable as long as possible.

"That is the sound of inevitability"

In this case, the government has figured out that the equation only works in one direction. The problem is, you would have to have unlimited ability to supply and demand from the equation to keep it going. The private sector is gone, the only player left at the table is the federal government. Of course, the house will allow the government to play at the table by themselves until the house has taken everything the government has to play is gone.

For the system to survive even longer leverage must continue to go up, of course that is just going to make the fall that much more interesting.

See Federal government Z1 report, it's over folks.

It's like have this nice sports car, you ramp up to 5000rpm to get some speed, then you ramp it up to 7000rpm, then when that is not fast enough you ramp it up to 9000rpm, eventually smoke starts coming out of the hood and it doesn't matter how far down you press that gas pedal, it's over.

It's not the fall that kills you, it's the landing.

There is no Perpetual Motion Machines in this financial system, all of you are the machine, and when the machine has hit it's max that's it, it's over. You have no ability to supply and demand at an exponential rate for the long-term, around a generation or 60-80years.

Friday, April 2, 2010

3 Suprises This Week

Well, the 3 biggest surprise for the week for me were, that other people were surprised to find out:

1.) Comex is a highly leverage exchange, a paper exchange.
2.) That the Fed were buying products outside of their statutory authority.
3.) The Fed is unhedged in large portions of their holdings.

I am actually shocked these things were news this week. I thought the above was common knowledge among professionals.

Thursday, April 1, 2010

End Game (Not April Fools)

Why Is The Fed Actively Managing A $25 Billion Maiden Lane MBS Portfolio When Its $2.4 Trillion SOMA Holdings Have A $1 Billion DV01? (And Are Unhedged)

Interesting article over at Zerohedge. Goes on to discuss a non-hedge position by the Fed in case of MBS and Treasuries. It goes to the heart of the end of the system. Tyler goes on to say,

"Yet that which is truly relevant, the Fed's nearly $2.4 trillion in holdings of MBS, Agency and Treasuries is completely unhedged. Good luck finding the counterparty that would be willing to put on a $200 trillion gross notional interest rate swap with the Fed."

There is no counterparty even close to big enough to handle that trade. This is the end game of the equation. They don't call it a death spiral for nothing. I don't know why this is a big surprise, the Fed is the buyer of last resort, if there were a party larger enough to sustain the loses you wouldn't need the Fed in there buying. I assumed everyone already knew this, they don't call them the lender or buyer of last resort for nothing.

One point I would disagree with is this.

"If rates do go up, and if the System Open Market Account holdings are unhedged, hyperinflation Catch 22 - here we come (oh yes, and the Federal Reserve is now a ticking time bomb)."

The only thing hyperinflating will be graves and funerals, that is the final result of using the equation. I assure you credit will not be inflating, it will be non-existent. You can't feed 7 billion without a credit system, no way Jose. The liquidation process will be long, hard and very deep this time -- it's not going to be a picnic like last time.

Also, the Federal Reserve is not a ticking time bomb, the whole system is. It's been a ticking time bomb since humans came up with this pyramid scheme.