Obama Thinks We Won’t Notice Or That We Don’t Care

Using taxpayer money to buy and sell guns to arm Mexican Drug Cartels; using Solyndra as a money laundering operation with TARP funds; picking an ex-Google Exec from a town hall audience who pleads for his taxes to be raised – Obama thinks he can continue to fool us all with impunity.

By INVAR

Fool me once, shame on you.  Fool me twice, shame on me.  Fool us a third time?  Get re-elected?  There are more tricks and scandalous treats from this regime on a daily basis than you find on Halloween at your average college frat house.  Obama apparently thinks that continuous attempts to bamboozle, lie, obfuscate and otherwise whitewash his misdeeds in front of the American people, is a sign that he is a fit enough politician to be elected as emperor for life.

Either that, or Obama is beginning to crack up under the pressure of trying to keep the lid on the pressure cooker of scandal, lies and guffaws his regime has ignited to the boiling point.  Such a case with a hubris narcissist running the country can be more than dangerous.

In a case of covering -up treason, the propaganda media and the Obama regime are not commenting about the facts in the Gunwalker scandal that funneled guns to Mexican drug lords for the purpose of getting them used on Americans so as to circumvent, infringe and perhaps abolish the Second Amendment. New evidence shows that the Obama regime used taxpayer funds to buy and sell weapons that were sent to Mexican drug cartels. As Fox reported:

Not only did U.S. officials approve, allow and assist in the sale of more than 2,000 guns to the Sinaloa cartel — the federal government used taxpayer money to buy semi-automatic weapons, sold them to criminals and then watched as the guns disappeared.

This disclosure, revealed in documents obtained by Fox News, could undermine the Department of Justice’s previous defense that Operation Fast and Furious was a “botched” operation where agents simply “lost track” of weapons as they were transferred from one illegal buyer to another.

…In June 2010, however, the ATF dramatically upped the ante, making the U.S. government the actual “seller” of guns.

Of course the fact that most Americans don’t know about, or don’t care that these weapons were then used to kill American cops and border agents like Brian Terry, is the one big kahuna Eric Holder’s INJustice Department is counting on for the regime to continue playing it’s plausible deniability game with no real fear of an accounting of what they tried to do.

Then there’s the question about what happened to all the billions of TARP II bailouts since we’re learning that part of it was ordered to be given to faux-front ‘green energy’ business Solyndra that simply laundered the money and resent it back into Democrat’s campaign war chests.

Not only did Solyndra’s execs take the 5th Amendment before a Congressional panel looking into the scandal, documents reveal that the California Democrat Party was listed as a CREDITOR to the now bankrupt company, that refuses to say what it did with all the millions of taxpayer dollars Obama’s regime ordered our government to give them.

Why California Democrats would be creditor to a company that received more than a half-billion dollars in federal loans to build a solar-panel plant isn’t clear. Even party officials say they’re not sure.

Just two years ago, the company received federal loan guarantees of more than $500 million, money it burned through but hasn’t repaid. Because of a subsequent loan restructuring, taxpayers won’t be repaid before the private investors who poured $75 million into the company earlier this year as it tried to stay afloat.

Those of us paying attention and reading through all the Barbara Streisand understand that this was just a good old fashioned mob-ish Chicago-style money laundering operation.  But of course for a huge chunk of Americans who get their news from a cable comedy network , would have no clue what is really going on.  And Obama is counting on that level of woeful ignorance to keep him in the White House and out of prison for fraud and conspiracy to commit fraud.

And if you thought those feats of magic and obfuscation for money laundering and treason were impressive, then something as benign as staging a campaign question for consumption by the useless eaters who vote is almost amateur.  But it does showcase the unwaning arrogance and incredible in-our-face manipulation Obama thinks he can get away with.

Right before NerObama let some truth slip from his lips about Jews being janitors, or that janitors should pay less taxes than Jews – or whatever slogans Obama learned from Reverend Jeremiah Wright from 20 years as a member, His Heinous supposedly picks a ‘random’ member of the audience to ask a question, and BEHOLD! Miracle of miracles! – Obama miraculously gets a “Please raise my taxes” multi-millionaire puppet, who adds himself as a theater prop to Obama’s ridiculous war on the “rich” since he began his outrageous Joint Session of Congressional Campaign Rally:

Politico (the White House Propaganda Office) asserts that Obama made a “lucky pick”.

Oh really?

What are the odds that Obama can pick at ‘random’ from the crowd when supposedly ‘put on the spot’, a rich multi-millionaire former Google Exec who gave more than 230,000 in campaign contributions to the Democrats, to have him spew the current Obama campaign “Buffet Rule Mantra”??  Obama seems to have more ‘luck’ picking at ‘random’ those who lend their credence to Obama’s preaching than actors lined up on the altar at a Benny Hinn Crusade.

This would be almost funny if it was not so dangerous to our liberty and perhaps even our lives.  A ruler who thinks he can get away with committing crimes, fraud, lies, treason and deliberately staged theater for public acceptance of his dictates, simply because he thinks we won’t notice or don’t care, is every measure of a tyrant.

Does Obama really think we’re this stupid – or is he correct to assume the majority of Americans don’t care?

If it’s the latter, prepare for tyrannical doom.

1934 Tribune Cartoon Paints Our Current Future

A Picture is worth a thousand words.  A Cartoon is worth 3.6 trillion.  Kudos to Five Doves for the find.

Primary Bailout: Marxist Centralized Planning & Abandoning What Made America Great

Primary Bailout

By John Galt

 

October 5, 2008

“Forward, the Light Brigade!”
Was there a man dismay’d?
Not tho’ the soldier knew
 Someone had blunder’d:
Their’s not to make reply,
Their’s not to reason why,
Their’s but to do and die:
Into the valley of Death
 Rode the six hundred.

–Charge of the Light Brigade by Alfred Lord Tennyson

The particular charge for this article is the fiasco that was just completed by only five hundred and thirty four but the futility of their charge will soon be realized by anyone with one half of a clue about the reality of markets, monetary systems and the true reasons behind the largest assault on free market capitalism since the days of Franklin Delano Roosevelt. The real motivations behind what I call the Debt Nationalization Act of 2008 may never be known until Treasury Secretary Henry Paulson writes his memoirs, yet there is a nagging feeling that the days where capital innovation originating in the marketplace have been sunset, hopefully to arise when the dark pall of the new socialist America regresses in a fury of voter vengeance. It would appear that the American public needs to feel the pain of what so many people worldwide have lost their lives to run from and destroy: Marxist centralized planned economies.

Nous Sommes Francais

“We are French.”

While this might offend some people with the inference that it is a derogatory term, that is too bad. As for myself and our fellow frogs of Amerika, this is going to become a larger nightmare than anyone could ever conceive. The lack of hearings on this bill, the lack of study and discussion will come back to haunt our nation in spades. The pork that was loaded into the bill was indicative of the kind of games banana republics of the 1930’s in Latin America and the Caribbean used to play with their budgets which made them the mockery of the capitalist world of the time. Now we are the mocked, the joke, the sad fat bloated buffoon which gets featured on Jerry Springer as the wall to our house is cut out and the socialist forklift hauls our nation’s financial system into a dump truck because we are too large to fit into an ambulance.

The idea that we need centralized planning for our economy reminds me of the days in college where we studied under the Keynesian idealists and some of the professors actually praised a government planning committee to insure that resources and monetary needs were allocated based on a preconceived formula versus the capitalist utilization model where profit was the ultimate motive. Unfortunately the bailout does nothing more than create a GOSPLAN for the United States where not only the management of eighty plus percent of the housing industry now becomes the responsibility of the Department of the Treasury and an office building full of socialist bureaucrats, but the whims of political appointees in positions throughout the cabinet including HUD, the Fed and SEC. Scared yet? Better learn French just to get a taste of what is to come. Also buried in the bill is every wet dream fantasy of Al Gore and the Marxist environmentalist whacko movement laying the tax credit and planning for carbon sequestration, carbon credits along with IRS implications, and the penalties plus benefits for people who live in modern “green” homes and higher taxes for non-conformist homes, which means a tax increase on oh, most of us.

Unfortunately for the Bubblevision cheerleaders, the perception that this will instantly put the twenty percent down in the pockets of every man, woman, child, cat, dog, turtle, illegal, snake or hyena so everyone or anything can buy a home from the modern version of the National Recovery Administration is not only false, but a fantasy that is going to become even more impaired by the inflation this act will create. The only thing that will ultimately occur is that instead of 1,000 to 1,500 banks failing throughout the nation as such respected experts as Nouriel Roubini has speculated about, it is this writer’s opinion that in excess of 3,000 banks are probably doomed to failure. Before the debt nationalization and spurious comments about “urgency” and “disaster” sparked by vague and unsubstantiated comments from Paulson there was and always has been a prudent distrust by the American public of Wall Street, the banking system and most of all the government. Instead of calming these markets and the underlying institutions within our quasi-capitalist system, the actions of Bush, Paulson, the so-called Financial Mainstream Media, and our politicians has initiated a justifiable panic and loss of confidence in a system which was built upon data streams fraught with fraud and deliberate distortion. This is so much like the Euro-socialist model where the bad news was and always has been manipulated for political purposes instead of defining finite data points where capitalists can exploit the situation and expand economies using traditional investing methods.

Sadly, ever since John F. Kennedy, the concept of data distortion is now the unwritten policy of every administration and this is one of the reasons we have landed where we are today. The market’s distrust of inflation, unemployment, credit, real estate, and durable goods reports is one of the reasons the honest and practical investor is no longer wishing to participate in the system which appears “rigged” to the untrained eye. To the trained eye, with the manipulations and massive interventions in the system by central bankers worldwide and weekly edicts changing trading rules and roles, they know it has turned into a roulette wheel with a large magnet under the wheel designed to favor the few and punish the rest of the gambling public. Thus the real reason for this alleged rescue which does nothing but throw a lead laden life preserve and a Mai-Tai with a pretty umbrella to the man struggling in the ocean while sharks circle around him.

The Primary Bailout

Now the question everyone seems to have been asking:

Why the panic, why the sudden emergency, and why are foreign banks included?

I think the following list from the Federal Reserve Bank of New York will answer your question.

 

List of the Primary Government Securities Dealers Reporting to the Government Securities Dealers Statistics Unit of the Federal Reserve Bank of New York

BNP Paribas Securities Corp.
Banc of America Securities LLC
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Securities America Inc.
Deutsche Bank Securities Inc.
Dresdner Kleinwort Securities LLC
Goldman, Sachs & Co.
Greenwich Capital Markets, Inc.
HSBC Securities (USA) Inc.
J. P. Morgan Securities Inc.
Merrill Lynch Government Securities Inc.
Mizuho Securities USA Inc.
Morgan Stanley & Co. Incorporated
UBS Securities LLC.

If you notice those banks that are highlighted in red and bolded, they are all American subsidiaries of foreign banks with operations inside the United States. Since July 15, 2008 Countrywide Financial, Lehman Brothers and of course Bear Stearns have been removed from the list of Primary Dealers for United States Treasury Securities, leaving only seven domestically based operations and none of the American banks remaining operating solely as investment banks. What a difference a year makes.

This now begs the question, why the sense of urgency. The answer is simple. If the United States Government, meaning the legislative and executive branches did not reach an accommodation to create valuations for the so-called toxic debt instruments and agree to buy a substantial portion of them back into the U.S. Treasury portfolio, they would refuse to buy United States Treasury debt instruments, in essence blackmailing the people of this country into creating a market which was created under false Level III pretenses.

Although this entire piece is just my opinion, it does not take a rocket scientist or Hockey Mom from Alaska to figure this out. Without the primary dealership network, the U.S. Treasury would have auctions which consist of some computerized bids and a very empty room with a few drunks from the closed Lehman bond desk who act as bidders but haven’t received the memo that their company has been wiped out by Goldman’s right hand man, Hanky Panky Paulson. The foreign bidders are critical to the survival of the United States because we have to raise over $2,000,000,000.00 per day to keep the lights on and justify the existence of thousands of stupid people enforcing thousands of needless and stupid regulations. It also keeps the stupid people populations down on our streets, which is a net positive but is financially inefficient. If the foreign bidders via the banks in the primary dealer network from Scotland, Japan, Hong Kong, Germany, Switzerland, France, and the United Kingdom is not enough of a concern, add in the threat from our own institutions refusing to use their Caribbean Island proxy hedge funds to buy also.

Ignored in this flurry of fluffernuttery and malfeasance was the streamlining of a thirty day application process by one Ben Bernanke to enable Goldman and Morgan to divest themselves of the “investment bank” tag and become commercial retail banks in five freaking days. Gee, do you think the bank examiners still dusting themselves off at the craters Indymac, Washington Mutual and Wachovia have had enough time to review the books at GS and MS to insure that they are viable commercial banks? Probably not but “Ben’s” word is good enough for me (snicker). So if they were not allowed to change their structure, begin the process of gifts from the FDIC of free deposits and the ability to leverage funds in an unlimited manner via the new zero reserve requirement, what incentive would they have to call their offices in the cubicles down the hall and tell them to buy half a billion in government paper for the Pirates of the Caribbean? None. So the game was rigged and allowed to proceed forward at all costs, including the middle class and integrity of our markets, and voila, instant bailout.

If the President and Legislature refused to move forward on a taxpayer funded boondoggle to destroy the monetary system by acquiring assets at prices way in excess of their underlying value, the banksters were going to blackmail the United States public by destroying their retirements and deflating everything in sight to insure that no politician was safe in their comfortable position and the American public would be in full outrage mode to restructure both political parties and quite possibly the political system currently in place. Since the deal of 1913 was the first institutionalized incident of M.A.D. (Mutually-Assured-Destruction) of record and the Federal Reserve reminded the politicians of this, it was completely evident after the so-called meltdown on September 29th, that action of some sort would have to be taken, taxpayer be damned.

Taxpayer Benefits or “There’s a Sucker born every minute”

Now the political talking heads, the lying elected officials and so-called financial press are all reporting the “aw gee, this is so wonderful the homeowners won’t have their homes foreclosed on and the reforms in this bill are so sweeping that we have planned for the future that the taxpayer could actually turn a profit on these turds.”

If you believe that one, please contact me immediately as I have a printer and I love selling promises to stupid people.

The reality of what this will cost will start to hit home in about forty-eight hours. The insipid and insane FDIC insurance increase from $100,000 to $250,000 decades after inflation has already made the U.S. Dollar worth about $0.146  (That’s in 1967 dollars per the BLS) is only adding insult to injury. The real purpose was to prevent a bank run by wealthier depositors at smaller institutions which are on the GS and MS Christmas shopping list submitted as part of the “we’ll keep buying Treasuries if…” bailout provisions. Add in the costs that will be passed on to the smaller depositors and you can say goodbye to free checking, free online bill paying, free ATM usage, etc., etc. But don’t worry, increasing fees, creating unlimited reserves and diluting the monetary base is not inflationary because Ben told me so; allegedly.

Next will be an array of fees and tax increases across the government spectrum to raise revenues for everything from boarding an airplane to breathing as they have to raise money in the face of declining economic activity and since government is ruled by generally the least intelligent life forms other than those that lay their eggs on cowpies, it is about a 99.9% assurance that taxes and fees will be increased even as GDP sinks lower, and lower, and lower.

The one benefit for those taxpayers “who qualify” has been highlighted under Section 110 of the debt nationalization act, but there will be consequences to that. The mortgage forbearance program has been established to help homeowners before foreclosure proceedings begin or bankruptcy filings have been made. That could prove to be a great political benefit for any political party in power that is suffering from the market based reality of declining real estate prices and the inability of their constituents to read a contract. The other pork in the bill guarantees that biodiesel will be manufactured against the will of the market place and energy efficiency will be imposed as opposed to allowing market forces to take effect and do the job that Americans won’t do. None of the solutions or pork proposals are based on free market capitalism so Ellsworth Monkton Toohey, aka Lawrence Kudlow will have to go back to haranguing about “Goldilocks” and the fictional drug induced booming economy he perceives to see in his world of purple dinosaurs and hand mirrors on his dressing room desk.

And now the Consequences of Abandoning What Made America Great

The lesson of this past week is as obvious as the truth of the blue stained dress:

Capitalism, risk and the rule of law matter no more.

America became a great nation because we believed that individuals had the right to succeed or fail based on their abilities or lack thereof. The lesson we began teaching our children started to deteriorate with the ‘no scoreboard’ mentality at Little League Baseball games and furthered with the rewarding of mediocrity in our eduction system. That lesson has carried through to our political elites, ruling economic class and the middle class of America:

Failure is an option, and not a bad one at that; as long as it is your political opponent and their supporters.

Because you can never really fail as long as you force the remainder of the population to fork up blood, sweat, tears and dollars at gun point to reward the losers of society and let the misdeeds of the ruling class go unpunished. If an investor recognizes the shortcomings of a particular company and wishes to perform the legal act of shorting their equity because of the mistakes, the solution is simple; ban the activity on that stock and tell the investor that he’s evil for exercising his plans within the rule of law. However the CFO who maliciously assists in the creation of questionable investment vehicles for that same company has no fear of prosecution, as long as they are inside the game, purchasing the securities of the other players and government and becoming “too large to fail.”

That lesson has been transferred across our society and is best illustrated by the latest data that the mainstream media reported from this same inept government that approximately fifty seven percent of our population is receiving some sort of check or benefit from the government. So why not increase it to a nice, fat round sixty-five percent and tell the other thirty-five to shut up and “do their patriotic duty” to prevent the “safety net” from failing.

Instead of the process where the weak, inept and mismanaged are allowed to die and stronger companies with more dynamic models to replace them allowed to flourish, the good old boy network established by FDR and expanded by every President ever since has allowed a diversified group of companies that should not exist in a normal, straightforward Adam Smith model to survive every downturn or inept strategic decision. The result has been to pass judgment on companies not based on their capitalist performance, but on their ability to promote the “public good” or the contribution to the society as a whole. This is neither capitalist nor desirable in any society and the Soviet model best illustrates why with the automotive industry which flourished under the USSR Communist Party hierarchy, but  in reality produced substandard products at prices totally out of line with the realities of the marketplace. Now one more time, someone please tell me the difference between the failed Soviet auto industry and the derivative models and quant hedge fund programs invented by our zit faced math whizzes just one more time?

What this means for our future is a bleak attempt at the “Lost Decade” model of Japan except the extreme risk of hyperinflation has been introduced not just into the U.S. Currency but into fiat currencies worldwide. The question is which central bank will shut it down first and try to establish a sound monetary base instead of an unlimited inflationary based economic model. My fear is that the entitlement society that America has become along with the aging work force and lack of an industrialized base will make any type of recovery a purely digital fantasy with short term hope being destroyed with long term reality. As American economic reporting is a mark to fantasy  model at best, outright blatant political lies at worst, the lack of consistent and viable data measurements will result in a floundering nation with little desire by foreign investors to plow trillions into the black hole located in the District of Columbia. In the end, we will not witness ’stagflation’ per se; the consequences will be a persistent, grinding inflation with negative economic growth, some quarters worse than others and vice versa, destroying the viability of the current American system of the Federal Reserve central banking model and the political class shall emerge being viewed as the savior as opposed to self-reliance and the Constitutional alternatives.
The end result of two weeks of hysteria and rhetoric is that our Primary Dealership network for the Fed will remain intact and the banking system is now subservient to the political parties in control. This two shall see a reversal of roles as the ecnomic decline accelerates. The new era of emerging superbanks, able to create a new fractional reserve system with the limits only being the ability of the display screen to show numbers and the IT departments at the banks learning how to calculate “quadrillions” into the formulas has begun. As the superbanks in the U.S. and Europe begin to absorb those institutions deemed worthy of saving, billions, perhaps hundreds of billions of depositor’s wealth will be wiped out in uninsured accounts, money market funds that collapse and equity liquidations.

Welcome to the brave new world boys and girls.

Mr. Toohey would be proud.

An Open, First and Final Letter to Mr. Rush Limbaugh

October 2, 2008

Dear Mr. Limbaugh,

As one of the few remaining powerful voices in America, the time for you to speak is now. You have a choice to make, much more important than the upcoming election and the hypocritical rhetoric espoused by the two parties currently mismanaging our nation. In the next forty-eight hours our nation makes a choice between socialism in the darkest of forms under an autocratic regime masked by a Franco-Soviet style cloak of democracy or a return to the hearty, tough, freedom loving America we all know and love.

The members of the United States Senate have elected to choose the route of bribery and subterfuge to achieve a coup that empire nor enemy could never achieve on our soil or against our nation. The remaining legislative body has some honorable men within the realm, but they too are eager to bring home booty under the incorrect assumption that selling our nation out for trinkets in their districts will silence the outrage. They are wrong.

On this date, you have a choice, and it is a tough one. You are the last person who can influence this debate with any voice or force loud enough to impact the people who will decide our future.

Your choice is to become Ellsworth Monkton Toohey and hide behind Dominique’s skirts or be the man that you say you are, the namesake of Atlas Shrugged, John Galt.

I chose that moniker only because the representation that a group of individuals made this nation great, built this nation, drove it from the East to the West to create greatness while spreading freedom and enabling the individual to take nothing and build great empires be they railroads or wireless, gold or grains, creativity or innovation. Now that opportunity shall be reduced if not completely destroyed with the betrayal of the party you have supported and the members who proclaim that the individual, the little man, has no clue as to what is best for their future.

It is not their choice to decide how and when I succeed or fail.

Or that i need a parental state of supervision to run my affairs.

Or that I need a supervisor in every aspect of my personal economy.

Your voice can quite possibly prevent October 3rd from becoming a day of infamy and change it into a day of celebration. There is no Constitutional mandate that says Americans, be they individuals or corporations, can not fail. There was no fear of the darkness when World War I or World War II stared; we were scared but we overcame the hardships and the victory we achieved was overwhelming. Unfortunately the mistakes of 1913 have not been erased and as the “progressive” movement has moved forward our nation built its entire economic theoretical base on the writings of a socialist, John Maynard Keynes.

This mistake can be undone, but not without a period of pain and retrenchment by the American people. It must be explained that true, honest and real free market capitalism rewards excellence and creativity while punishing malfeasance and misdeeds. Socialism and statism only demands “sacrifice for the state” in the name of equalizing pain for all while maintaining the facade of freedom while promoting the Fatherland and “fairness” instead of the individual.

The explanations we have seen to justify the vote for this heinous act are laughable. There is no such thing as “a little bit pregnant” or having a “little Marxism” when discussing such matters. Unfortunately, these pawns of foolishness who proclaim to represent our interests are for sale to the same creators of this Keynesian web of deceit that could easily destroy our nation.

It is up to you to take drastic action if you dare.

You claim the mantle as the professor of Conservatism and a stalwart for American idealism. If so, please explain how buying real estate or bonds for an office building in Hanoi, Vietnam from a foreign based bank will expand this ideal? Or better yet, please explain the expansion of autocracy which flies in the face of the dreams and ideals of William F. Buckley, your late friend and colleague of whom I have deep respect.

If you are who you say you are, join me.

Go on strike.

Do not quit working, not yet at least. You will be forced off the air in the next twenty-four months regardless of what the outcome of this election brings forth. Take a moment, some time, a deep breath and threaten to take the action that any sane freedom loving soul who could take with the forcefulness that only you can. Submit your resignation from our system. Advise the Congress that if this legislation passes, you will sell all of your stock and bond holdings. You will remove all but the bare minimum of your financial resources from our banking system and purchase nothing but Swiss Government short term bonds, where your money will be safe from the new socialist banking regime. Tell your “friends” inside the industries who shall benefit from this new neo-socialist Keynesian nightmare wearing the Democratic and Republican Party tags that your money shall not be abused and used to build their statist empire.

Tell the world that you want no part of the new exploitation state.

A true capitalist and freedom loving American does not subscribe to the ideals that government or corporations need a handout as individuals should not either.

The only bailout we need now is one to save our Constitution.

The ball is in your court.

Toohey or Galt; the choice is yours.

Sincerely,

John Galt

They Broke It – Let THEM Eat It!

Thanks to the fine folks over at thetreeofliberty.com for the assignment and idea for this No Bailout Poster:

Obama Skips Directly Dealing With Crisis – Says “Call Me If You Need Me”

Remember that Clinton Campaign commercial about the 3 A.M. Phone call??

It came a little early for The One, Barrack The Hussein Obama – when John McCain suspended his campaign Wednesday to go back to work as a Senator to deal directly with the proposed trillion dollar bailout of the banks and the Congressional cronies and CEO’s that jump started this crisis with mandating low-income housing loans, and true-to-form – Obama bailed and defered, while pontificating the Leftist talking points about evil CEO’s and how Bush was responsible for this mess.

In short, while McCain is putting the country first by upholding his duty as a Senator in charge of legislation – Obama is going to keep on campaigning while McCain goes to try and work out a solution to the crisis that threatens to topple the American financial system.

Looks like the debate Obama says he is still going to have on Friday will just be a media-fed press conference for Obamanation.

McCain had asked to delay the scheduled debate with Obama on Friday, to which the messiah said he saw no need to delay the debate.

Isn’t Barrack The Hussein Obama a senator with a duty to deal with legislation also??

Oh, I forgot – all he knows to do is to campaign for kingship.

What was hilarious was Obama’s quip in response to directly dealing with the crisis was for Harry Reid and Nancy Pelosi to call him if they needed help.

 

UPDATE:  Obama changes his mind again to accept invite by White House to deal with crisis.

Wonder if Obama will bring his financial advisor Jim Johnson to the meeting with him?    He and Raines ought to have plenty of answers, since they are the one’s who kicked this crisis into high gear while giving kickbacks to guys like Obama, Dodd and Frank.

The Damned Don’t Cry

 

The Damned Don’t Cry

by John Galt

 

Wow. What a month this has been. The start of a new stock bull market, now postponed by that pesky insolvency thing that I’ve been warning about for two years.

Then those dratted politicians daring to question the edicts of the Almighty General Zog, er, Hank Paulson (Zog sounds more intimidating than a nickname of Hanky-Panky) and daring to question a demand for $700 billion per Viagra moment to buy that pesky alleged sub-prime/Alt-A/Prime/Jumbo/Commercial/CDO/CDS/CLO/Auto-loan-securitization/Credit-Card-Securitization/Student-Loan-Securitization/the-Salmon-I-Loaned-To-My-Cat debt load America is carrying so they can create new debt loads to be purchased eight years later by another ignorant bunch of slobs.

Then gold rising almost $100 in a week. Then Oil rising $25 in a day only to fall back to a much more palatable and reasonable $16 plus gain.

Yes, well, I’m just happy the markets are stable and have not crashed and burned yet so I can find a nice safe money market fund to, er, never mind.
Despite popular belief, I am not focused on precious metals, equities or Senatorial song and dance routines. The smart money is and always has been in the corporate, municipal and Treasury bond markets. If anyone does just a wee bit of research, they will find what everyone at those formal dinner parties, you know, the ones schmucks like I do not get invited to, a total disintegration in market stability which indicates a real fear that the big jet liner that Glenn Beck refers to has fortunately not careened into a mountainside. Instead it has plowed into Mount Rushmore and the pilots, Ben and Hank, while free falling through the air are still barking out “please assume the crash position.”

Unfortunately for the United States while the games are afoot, the rest of the world, the smart money, is voting while Congress plays its election year games during this crisis.

The world is not sure if the United States is a ’sure bet’ and the investing community is trying to reconcile the instability in our banking system with a ration investing approach that will enable them to liquidate dollar holdings in a rapid fashion should the worst case scenario erupt. So what is the worst case scenario? Glad you asked. It is all related to the super duper MOAB (Mother of All Bailouts) also known as the biggest nationalization in capitalist history since Castro told the United States to assume the position.

The Final Vote

Despite popular rhetoric, the vote is a 50/50 proposition; yes or ‘yea’ = inflation and no or ‘nay’ = deflation. While this might sound like an over simplified version of events, I think it gets into the crux of reality. Politicians are not the best and brightest souls in the world because if they were they would be running hedge funds making $80 million per year or managing a corporation with enough naked pictures of other politicians with mules to insure they get bailouts and a $10 million per year salary for life. So assuming that the majority of our politicians are that stupid, corrupt or perverted (there’s a reach, eh Barney?) let’s get down to brass tacks. They will jawbone. They will demand concessions as if the Treasury did not anticipate that. They will threaten. Then the Fed and Treasury will grab them by the short hair, set it on fire, then reinsert it painfully to remind them that bankers control their primary arteries of Western Civilization and the votes will occur. Sadly, when this vote occurs, there is a consequence for all of North America. I will skip over the geopolitical implications and get down to some bottom line information as some idiot might make some money off of this, adopt me and prevent my wife and I from stealing a monkey from the Lowry Park Zoo to dance for pencils and pennies.

With that cheery little introduction, a brief explanation to the title of this editorial. The damned do not cry as they are cast into hell for they realize their sins and the pain they are to endure forever. The American economy is on a precipice, but sadly it seems that few beyond the smart money ‘get it’ and even they are shuddering in fear as to the consequences of action or inaction this week. World markets, be they capitalist, semi-capitalist, socialist hybrids or outright Marxist monopolies are voting on America and the actions of its politicians every waking moment of the day and have been for years. The voting was mild for years as the perception was that we could create a new deck of cards to build a new house of cards to support the elephant dancing on the top card year after year.

Until now.

The voting is much more intense and despite popular belief that we are ‘too big to fail’ that voting in our bond markets has major implications for our future. Thus why I present the final vote.

Yea=Inflation

Unfortunately for the American public, your opinion is limited. Despite numerous website proclamations and the voices of the boisterous on mainstream commercial talk radio, this is a decision left to bankers and bankers hold 51.75 of the 52 cards in every deck. The protestations are heard by secretaries, volunteers and clerical staff in every hall of Congress but the reality an adult has to admit is that the control of our economic and political system is summed up by basic mathematical formulas:

Do you listen to the guy with $1,000,000,000.00 or the guy with $2,000.00 ?

Hmmmmm.

So you think you have found 50,000 people with $2,000.00?

Ok, good luck with that one. That buys one politician if you have.
The reality is that our system has introduced a pathetic level of Roman Imperial corruption that would make Caligula, not Bill Clinton, but Caligula, blush.

Now that you have that basic understanding of math, $700 billion is more than you could ever conceive of, let us move forward to the consequences of an unfortunate and justified ‘yes’ vote.

The wording, no matter how you cut it, was for $700 billion “at any one time” to purchase securities. The definition was deliberately vague to infer that illiquid securities were the only ones to be purchased, yet the who defines “illiquid” was not. This could mean that Joe’s Sixpack Massage Parlor and Savings of Newark could submit his double lap dance coupons or Mary Joe Shclupper’s 13.7% subprime paper as an illiquid asset to be purchased by the government and added to the debt.

Of course, Joe’s is probably submitting better paper than Washington Mutual or Citigroup, but hey, who’s that picky?

The proposal is inherently inflationary as it gives discretionary powers to the Federal Reserve and US Treasury to issue new debt obligations, not only as needed, but as desired to “stabilize” economic conditions as they feel necessary. Since the positions in both branches in discussion are political yet tied to the banking substrata, there is no way in hell that paper will not be issued to bail out unfortunate (Ok, irresponsible) gambles by substantive banks in the system.

Considering our current situation where the various types of bonds created in the last five plus years have no assigned valuations other than that of the originating bank, why in God’s name would any bank devalue it’s own assets when selling the paper back to the taxpayer realizing that they can hedge that sale with commodities or a bond issuance from a more stable entity like the U.S. government? In the long run, the underlying assets be it a home or business with a declining market value could go to zero but our government will hold a security against that asset that could be worth thousands of times more than reality which means you and I own garbage. Monetizing assets that are near worthless is one of the most inflationary actions our central bank could take and at this time, considering the differing types of submissions they are wanting to accept, this could be the most inflationary action since the Central Bank in Weimar Germany attempted to monetize the war reparations debt.

Considering the alternative though a “Yea” vote could be the least painful for the American people when all is said and done.

‘Nay’ = Deflation

A no vote on any type of bail out package is the equivalent of throwing a grandmother on top of a live grenade to keep Senator Dodd’s suit from getting messed up. That possibility does exist. There is a level of vitriol, which is justified, as the regulatory authority that has been granted and expanded repeatedly by the House and Senate since 1913 to give the Federal Reserve and Treasury whatever authority it sought  to manage the economy could undermine any efforts to allocate trillions of dollars to stop the bleeding. There are several politicians who understand the inflationary implications of allowing an unlimited flow of monetary creation to begin unabated in an effort to preserve the current system and allow the fox to not only steal the chickens, but the hen house and the farmer’s wife also.

If the political elites vote no, the banksters have the excuse they need to preserve those institutions they wish to by allowing a seizure of all credit and monetary markets, thus crashing the economy almost immediately and bringing any dreams of economic expansion to an end for almost a decade. There will be a massive wave of bank failures as a result and the real estate market would probably experience across the board price declines of another fifty to sixty percent as the lack of credit prompts bankruptcy after bankruptcy. The idea of a deflationary reset should terrify any sane man or woman but if the political class chooses a non-reflationary course of action, it provides cover for the financial world to allow this to happen.

The resulting implosion by such a move would create an unemployment level well over twenty percent in short order, cause thousands of corporate bankruptcies, millions of more individual bankruptcies and put well over half of the construction industry out to pasture for a long time to come. It would also create a political upheaval that will change the face of America forever and the reflationary effort would originate with a wave of government sponsored projects and an expansion of socialism to prevent retirees from suffering more than they have already.

This is a damned if you do something, damned if you do not approach and sadly, either choice puts those on fixed incomes into a box as they will not have sufficient resources to maintain their current standard of living.

The immediate contraction of the money supply also creates a lack of liquidity for state and local governments finally eviscerating the municipal bond market and bringing spending at the local level under control. Unfortunately services, both non-essential and critical for localities would be impacted.

There you have it gang. The choice is there and only those who are prepared will be able to survive. For those of you with more debt than the ability to repay, life will be hell. For those who did not buy essentials for the long term or prepare for a paralysis in financial markets via either deflation or inflation I hope you enjoy your government masters. It is a sad statement that our society has reached this point.

Unfortunately, we, the American people get to witness this and endure history one more time and at our expense.

Welcome to Weimarica.

2008 style.