Update: On Friday April 26, JPM customers (US government??) added a whopping 558 contracts (55,800 troy oz.) to the totals reflected in this article.  The CME group daily report can be found here, but note, these daily reports go into Never-neverland when the new one comes out (so save it if you want it for future reference).

Somebody should explain to the blathering numbskulls at CNBS that when just one firm accounts for 99.3% of the physical gold sales at the COMEX in the last three months it’s not what most of us on this side of the rainbow would consider “broad-based” selling.  Of course discovering this kind of relevant information requires an internet connection, 2nd grade math and reading skills, and the desire to do a teeny-weeny bit of reporting.  Sadly they’ve wandered so far down the rabbit hole that the concept of “physical demand” (i.e. people actually wanting to take possession of the stuff) is puzzling to them because the vast majority of the world’s so-called “gold-trading” takes place in the realm of make believe (which is their natural habitat).  It’s all fun and games until somebody loses their metal and “somebody” has lost one hell of a lot of metal in the last 90 days.

This is the CME Group’s COMEX metals issues and stops year-to-date report, which can be found here everyday for free.  It chronicles the physical delivery notices of various metals, including gold.  Let’s have a look:

“I” is for “Idiot”
That’s how I remember it, anyway. “I” actually stands for “issues,” meaning the firm parted with its metal (@ 100 troy ounces a shot), and “S” stands for “stops,” meaning the firm took delivery of gold. “C” is for customer accounts, “H” is house accounts.  The first thing you should notice is that most transaction net out to zero in a given month (blue boxes), meaning the firm’s gold holdings didn’t change. What they delivered one day they got back the next, or vice versa.  The green boxes show firms who received more than they delivered and the red boxes indicate firms who coughed up gold for Bernanke bucks (aka idiots). Note that Deutsche Bank’s massive take in February more than offsets its deliveries in December and April.

Notice one more thing before we move on: Despite Goldman’s much ballyhooed “Gold Sucks!” call a few weeks ago, the squid has not parted with any yellow metal whatsoever in 2013.  Hmmm.

Now for the main event:

J P Morgan has fumbled ownership of 1,966,000 Troy ounces of gold since February 1.  That’s 74% more gold than the US mint delivered through its American Eagle program in all of 2012.  I mention this because there’s little doubt in my mind that the US government is one of JPM’s gold “customers.”  So (if I am correct) the same US government who just let the Morgue dump its gold on the COMEX floor will once again be suspending gold sales to peasants.

Maybe Jamie Dimon figures he’ll buy back all that gold on the cheap when the rest of the world realizes how smart he is.  Or maybe he’s once again displaying that his firm doesn’t have the slightest idea what “hedging” is and is teetering on the brink of collapse.  That would explain the April 11th meeting between President Obama and the Pig 5 bank CEOs, wouldn’t it?  And you just have to get a little misty that Lloyd Blankfein was nice enough to provide some hot-air cover for his competitor, don’t you?

One thing’s very clear: When it comes to selling physical gold, J P Morgan is acting alone.  The 130 contracts NOT delivered by JPM in the last three months (of which  110 were fromABN AMRO) are but a footnote.  If Jamie’s right, he’ll look like a genius in a few months, if not he should be able to recycle his quote regarding the infamous “London Whale” losses: “Just because we’re stupid, doesn’t mean everybody else was.”  Time will tell.

100 years ago John Pierpont Morgan famously testified to Congress, “Money is gold, and nothing else.” (Note: That is the exact quote, the full testimony can be found here).  One has to wonder what the big guy would think of his legacy’s disregard for sound money, $70 Trillion derivatives book, and “House of Cards” “Fortress” balance sheet.

One more very, very important thing.
Anybody who says there’s been gold selling in the GLD is a freaking moron (Bob Pistrami, I’m looking in your direction).   The GLD works much like a coat check.  Unless you think checking your coat constitutes a real transaction of some kind you shouldn’t think of changes in the GLD’s gold holdings as sales. They’re not. When you check your gold into the GLD you get shares (like a claim check). Where it gets wierd is you can sell these claim checks to nimrods who seem to think they’ve bought your coat, but aren’t actually allowed to wear it.

What nobody seems to appreciate is that every share of GLD is allowed to be sold TWICE (long and short, and it’s really important to understand that).  If you’re foolish enough to doubt me (and foolish enough to short gold), go short GLD shares and see if anyone knocks on your door demanding gold.  Saying the GLD is 100% backed by gold is a bold face lie because they’re can be twice as many shares in play as gold backing them, which means GLD shares may be only 50% backed by gold before any rules are broken.

When GLD (or any ETF for that matter) shares sold exceed the existing shares PLUS all the shortable (double-sold) shares, legitimate shares can not be found for settlement and that must be reported to the SEC’s “Fails to Deliver” list, which is published twice a month with about a four-week delay (here).

April 15, 2013 was this biggest volume day ever for GLD (93.7mm) and I’ll guarantee you right now that record fails to deliver will be reported on or around that date, which should have required more gold to be deposited with the GLD (but that didn’t happen).  So instead of the half-assed explanation Pistrami offered (here) of how he thinks the GLD works, he should have raised the question of whether or not there were enough legitimate shares of GLD to facilitate trading (I say no way in hell).

Gold continues to be pulled from the GLD (which really means people want their coats back) and still no one’s concerned about the number doubled-owned shares.  Worse yet, the responsibility for sorting this unholy mess out falls to SEC chief Mary Jo White who is celebrating her 16th day in office.

I can’t wait to see what happens next….

Notes for Nerds:  This piece is not intended to describe the inner workings of the COMEX or GLD in detail, so don’t bust my balls with minutiae, unless it is relevant to the discussion of JPM’s massive gold sales or the double-ownership of ETF shares. Double-owned ETF shares are huge problem with ETFs in general, but the misrepresentation (by omission) of this fact by ETFs supposedly backed by tangible assets like gold and silver seems more egregious to me.  

In addition to the YTD CME Group metals report, you can track the hilarity on a day-by-day basis here.

The February 1 to April 25 delivered gold contracts info referenced included only transactions between firms.   For that reason Morgan Stanley’s 307 contracts transferred from  house account to customer account was excluded from the calculations.

Total Net gold deliveries Feb 1 to April 25:

Vision Financial – 1 contract
R J O’Brien – 2
ADM Investor Services INC – 2
Marex – 5
Citigroup Global Markets – 10
ABN AMRO – 110
JP Morgan – 19,660

Update: Friday April 26 (not included in article):

(Updated) Total Net gold deliveries Feb 1 to April 26:

Vision Financial – 1 contract
R J O’Brien – 2
ADM Investor Services INC – 2
Marex – 5
Citigroup Global Markets – 10
ABN AMRO – 112
JP Morgan – 20,218

Creating the illusion of economic growth is easy if you can print money.  It’s a prank you can play on an entire country.  Cut the value of the currency in half and the economy’s size will appear to double.  If it doesn’t, you’re in recession (whether you know it or not).   Cavemen probably understood this concept better than America’s best economic minds.

The only way to accurately measure changes in a nation’s economy is to do so relative to the world (see Notes for non-nerds below before protesting).  According to the World Bank, the U.S. represented 31.8% of the world’s economic activity in 2001.  By the end of 2011, that share had dropped to 21.6%, meaning America’s slice of the world economy is 32% smaller than it was a decade ago, and getting smaller every day.  Note that America’s housing bubble did nothing to boost the U.S. on the global stage.

As horrific as these results are, they’re better than Japan’s, whose “lost decade” proved only to be prologue for its “lost-er decade.”  Japan’s share of the world economy fell more than 35% from 2001 to 2011 (literally worse than Zimbabwe) and has now shriveled 54% from its peak.  But Japan’s real collapse did not coincide with the bursting of its stock and real estate bubbles in 1990 and 1991 respectively.  The decline actually began in 1995 when policymakers allowed government debt to exceed 90% of GDP (a milestone the U.S. quietly passed in 2010). 

The more they “fixed” it, the more it broke.  17 years later, the only thing Japan has proved is that smart Japanese economists are about as real as Godzilla.  Time and time again, the country has chosen collapse over admitting failure. On November 19, 2012, Bloomberg reported, “The Japanese government will spend 1 trillion yen ($12.3B) on a second round of fiscal stimulus as it tries to revive an economy at risk of sliding into recession.”  It would be funny if it wasn’t so tragic.

The United Kingdom gets third place in the 2001-2011 major economies’ “Race to Oblivion”, although with a less than 3.5% share of world GDP it’s hard to call this a major economy with a straight face anymore.  While the U.K. printed its way to 24% loss in world GDP, France and Brazil both passed the nation where an actual troy pound of sterling silver now costs about 235 “pounds sterling”.  With government debt expected to reach 88.7% of GDP in 2012, once-Great Britain will soon be seated at the kids’ table at economic summits, if it gets invited at all.

All three of these countries are in death spirals for the same reason:  They believe that they have the ability to avoid recession by simply printing their own money.  As America’s 100-year numbskull (and current Federal Reserve Chairman) Ben Bernanke once mused:

“…the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

True dat, Ben….unless there’s “cost” associated with turning the nation’s currency into the world’s laughing stock….

Oh wait, there is.  So just for fun, let’s project the last ten years growth rates forward another ten years:

And there you have the real New World Order (sorry Freemasons).  In ten years China’s economy will be bigger than those of the U.S., Japan, and the U.K. combined.  What are the chances they will drink the same kool-aid we are presently guzzling?  Will they need, or even tolerate, the opinions spewed by our pundits and politicians?  And more importantly, will the U.S. dollar still be the world’s reserve currency?

Being a war-mongering banana republic isn’t all it’s cracked up to be, and despite what CNBC’s fast-money fuckwits may think, the stock market is not America’s report card.  Wall Street is the white elephant that America can’t afford to feed anymore and China doesn’t have the slightest interest in buying (just take a look at the Shanghai Composite).   Continuing to yield to its tantrums will undoubtedly destroy us.

Fun Facts:  Total U.S. GDP growth in the 20th century was $9.93 Trillion, while the  government accumulated $5.5 Trillion in debt.  In the 21st century, the US has borrowed $10.7T and has a grand total of $5.30T in GDP growth.

***

Notes for nerds: Most of the calculations presented were derived from data compiled by the World Bank which can be viewed or downloaded here.   World GDP was set to 100% and each country’s percentage determined simply by dividing by world GDP.   Japan’s debt as a percentage of GDP from Fred (225% was used for 2011).  Estimate of U.K.’s 2012 Debt/GDP from here.  U.S. GDP stats from USgovernmentspending.com (2012 estimate adjusted for 2% growth).  US debt from Debt to the Penny.

Notes for non-nerds:  How much World GDP changes from one year to the next depends entirely on what is being used to measure it.  For example, World GDP expanded by 109% from 2002 to 2011 in USD terms, but contracted (-59%) in terms of gold.  Using the Euro would produce different results (+59%), as would using barrels of oil (you figure it out).  Looking at countries relative to World GDP is an honest measure of their changes.  To say that Japan is still growing (at least in terms of Yen), but everyone else is growing much, much faster in terms of Yen distorts the reality that  Japan is undeniably shrinking relative to the world (no matter what currency is used).

On October 3, 2008, 338 elected officials (263 House reps, 74 Senators and 1 President) took it upon themselves to save America from certain financial doom by passing the Emergency Economic Stabilization Act of 2008, completely ignoring the will of the American people,  opting instead to fulfill a Thomas Jefferson prophesy:

“The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations.” 
~ Thomas Jefferson

Texas representative Ron Paul had this to say:

“The money for this bailout does not just materialize out of thin air. The entire burden will be borne by the taxpayers, not now, because that is politically unacceptable, but in the future….our children and grandchildren will be burdened with increased taxes in order to pay that increased debt…. For years, many people have been warning about the housing bubble and the inevitable bust. Congress ignored the impending storm, and responded to this crisis with a poorly thought-out piece of legislation that will only further harm the economy. We ought to be ashamed.”

The most memorable component of that piece of treason legislation was the $700B TARP (Troubled Asset Relief Program), which was scrapped by Treasury Secretary Hank Paulson 11 days later in favor of the Capital Purchase Program (CPP), which injected money directly into banks.  In February 2009, new Treasury Secretary Turbo Geithner ended the CPP and announced the Capital Assistance Program (CAP), which also blasted money directly into banks.

Fun Fact: Hankenstein Paulson worked at Goldman Sachs for 32 years and served as Treasury Secretary for 31 months.

So TARP never happened; making discussions of the program’s merits every bit as psychotic as analysis of Ross Perot’s presidency, but that didn’t stop CNBC from having a birthday cake for TARP, nor does it prevent politicians from claiming that the fictitious program was somehow profitable.  To make that claim, you must use accounting techniques pioneered by Homer Simpson in “Lard of the Dance” :

Homer Simpson: Okay, boy. This is where all the hard work, sacrifice, and painful scaldings pay off.
Employee: Four pounds of grease… that comes to… sixty-three cents.
Homer Simpson: Woo-hoo!
Bart Simpson: Dad, all that bacon cost twenty-seven dollars.
Homer Simpson: Yeah, but your mom paid for that!
Bart Simpson: But doesn’t she get her money from you?
Homer Simpson: And I get my money from grease! What’s the problem?

Some of us prefer using this one:

Q: Since the Emergency Economic Stabilization Act of 2008 explicitly states that all profits from TARP be used to pay down the National Debt, the true measure of the program’s success can be found at the Treasury’s “Debt to the Penny” website.  How much of the national debt has been paid off since October 3, 2008?

A: Negative Six Trillion Dollars.

Fun Fact (if you’re into child abuse): America’s kids have been saddled with more debt in the past 48 months than the Nation accumulated from the signing of the Declaration of Independence to 9-11-2001 (225 years).

That $6 Trillion in debt has produced a grand total of $1.17T in nominal GDP growth ($361B in chained 2005 dollars).   Using the nominal, each dollar of GDP growth has cost taxpayers $5.13 (assuming you understand that deficit dollars are tax dollars put on a deferred-payment plan.  A concept  Greece and Spain are just now beginning to grasp).

EESA-approving-congressman-turned-Chicago-Mayor Rahm Emanuel observed:

You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before (i.e. Looting the Country in broad daylight without passing a budget).

Which brings me to the point:  Despite all the kicking, screaming, TEA-partying and Occupying, of the 338 elected officials who saw fit to pass the EESA, no less than 229 still hold public office:

• One became President, one didn’t.  
• One’s Vice-President, one wants to be.  
• The speaker of the House and the House minority leader swapped titles after both voted in favor of the bill.  
• Two have already been promoted to Senator and 5 more currently running for that privledge.
• One got demoted to Secretary of State while another got demoted to Mayor of Chicago.
• One retired to a 1600 acre off-the-energy-grid ranch in Texas, 23 more will join him in retirement in January 2013.
• 168 face re-election next month.

The next un-funded war is already in the works and there’s another economic crisis on the horizon.  The so-called “Fiscal Cliff” is what happens if we DON’T continue $Trillion-plus deficits, and I must admit I find myself somewhat in awe of how grossly mis-framed this discussion has become.

So here’s your opportunity to reward these (heroes/traitors) as you see fit, because every nation gets the government it deserves.

 Senators who voted in favor of the Emergency Economic Stabilization Act of 2008:

House Representatives who voted in favor of the Emergency Economic Stabilization Act of 2008:

Sources:

Official House vote:

Official Senate vote:

http://www.govtrack.us/congress/votes/110-2008/h681

http://www.govtrack.us/congress/votes/110-2008/s212

http://en.wikipedia.org/wiki/United_States_House_of_Representatives_elections,_2012

http://en.wikipedia.org/wiki/United_States_Senate_elections,_2012

Debt to the Penny

Caveat:

The compilation of the data contained herein is the product of hundreds of pieces of data manually collected, keyed-in and tallied by the author, who by his own admission is somewhat of a dunce.  Readers are encouraged to verify data points before operating heavy equipment.  The mess of a spreadsheet used to assemble this data can be found here: EESA 2008 votes CALCULATIONS, and the way the author actually wanted the infomation to display can be found here: EESA 2008 yes votes  This information may be re-broadcast in the interest of truth, Justice and the American way, without the consent of Major League Baseball, or the author.

Correction: Maine Senator Olympia Snowe’s status changed from “Running for re-election” to “Retiring”

Previously:

http://acrossthestreetnet.wordpress.com/2011/09/11/september-11-ten-years-later-selected-statistics/

“Hi, Doc.”

“Hi,” he said, examining my file.  He looked up, “You’ve put on twenty pounds since the last time I saw you”

“Thanks for noticing,” I beamed.

He frowned.  “I remember now.  You’re the guy on the diet designed to make you grow.  What’s that called again?”

“The Keynesian Plan.”

“Is that the one where you eat bacon and cheese, but not vegetables?”

“No,” I replied, “But I have incorporated some elements of that plan” (I don’t like vegetables).

“And how’s this whole Keynesian thing working out?” he asked.

“I’ll admit I’m a little disappointed.  I’ve only grown and inch and a half so far, but..”

“No you haven’t,” he interrupted, pointing, “You’ve just got those stupid elevator wedges in your shoes to make you look taller.”

“They’re to get me acclimated to being taller.”

“Which you’re not,” he declared.  “I told you, you’re fully grown.  The only thing you’ve succeeded in doing is collapsing you arches and giving yourself  Type 2 Diabetes.”

“We Keynesians call things like that “unintended consequences” (I used finger-quotes to let him know it was a technical term).  And trust me, Doc, I’m no happier about them than you.  Can I see that height-weight chart of yours again?”

He handed me the chart. After a moment, I sighed, “Looks like I’ll have to do more QE.”

“What?”

“Quantitative eating.  It’s how you stimulate growth, Doc.  It’s technical.”

“Oh,” he said.  “Because it sounds an awful lot like what we in the medical profession call “stuffing your fat face”  (giving me finger-quotes, but in a condescending, not-at-all-helpful kind of way).”

I tried to stay calm and empathize.  “Doc, it’s not your fault you haven’t been educated about Keynesian principles.  They only teach it at top-notch schools like M.I.T. and Harvard.  I don’t know about you, Doc, but I feel better knowing that no matter what happens on election day, the White House will be occupied by someone who attended Harvard.”

“As did the Unabomber,” he added.

“Still better than the bumblefuck medical school you went to!”  I snapped.

“Johns Hopkins?” he queried, thrusting his eyebrows up.

“John Hopkins.” I corrected (Friggin’ Idiot!)

“Tell me, how are you paying for all this stimulus?”

“Food Stamps…and my ex-wife’s credit card.”  (I just knew he wasn’t going to understand this part…)

He looked at me with a curious mixture of confusion and utter disgust.  “What….Does she even know?”

“I’m no Dr. Bernanke, but I know one of the most important aspects of Keynesian stimulus is sticking someone else with the bill. It works out better for everyone if the victim, er , stimulus provider is unaware.  She’ll be OK.  I’m going to make it all up to her.”

“Really?  How?”  

“Look at your damn chart, Doc!”  I bellowed.  “I’m going to be taller than Shaq when all this stimulus kicks in!  Can you say NBA contract?“

“No,” he said, unimpressed, “just over-sized casket.”

(I could tell he was about to launch into another one of his “austerity” sermons.  You know, “Consume less, do more, stop spending other people’s money, blah-blah-blah.”  Pinhead.  Obviously Dr. Quackenstein was beyond all hope.)

“No offense Doc, but I need help from people with a better understanding of these things.  Any chance you can refer me to the Mayo clinic?”

“Is that where they treat illness with mayonnaise?”

“Yes,” I said.

“No,” he said, and walked out.

As I sat down to rest in the lobby on the way back to my car, I remembered that the key ingredient to the Keynesian system is confidence and realized that what I was feeling, beside the tingling sensation in my left arm, was nothing more than the sting of rejection felt by true visionaries like Jon Corzine and the Octomom.

So if anyone asks, I’m at the grocery store.

 Velocity of money is the  frequency with which a unit of money is spent on new goods and services.   It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling).  In a healthy economy, the same dollar is collected as payment and subsequently spent many times over.  In a depression, the velocity of money goes catatonic.  Velocity of money is calculated by simply dividing GDP by a given money supply.  This VoM chart using monetary base  should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face:

In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression.  Hard to believe, but the guy who made a career out of Monday-morning quarterbacking the Great Depression has already proven himself a bigger idiot than all of his predecessors (and in less than half the time!!).  During the Great Depression, monetary base was expanded in response to slowing economic activity, in other words it was reactive  (here’s a graph) .  They waited until the forest was ablaze before breaking out the hoses, and for that they’ve been rightly criticized.  Our “proactive”  Fed elected to hose down a forest that wasn’t actually on fire, with gasoline, and the results speak for themselves.  With the IMF recently  lowering its 2012 US GDP growth forecast to 2%, while  the monetary base is expanding at about a 5% clip, know that velocity of money is grinding lower every time you breathe.

The Fed’s refusal to recognize the importance of velocity of money quickly goes from idiotic to insidious.  Here’s a question:  If I give you 50¢ and as a result of that transaction, you owe me $1.00, what interest rate have I charged you?  Obviously, I’ve charged you 100% interest and I don’t give a rat’s ass about you or your kids.  I’m pure evil and you’re pure stupid.  But believe it or not, this kind of master-slave  arrangement isn’t enough to satisfy a true narcissist.   The narcissist needs to be exalted for his actions, no matter how unjust. 

He likes to be thought of as “accommodative.”

In 2011, every dollar of GDP growth created $2.08 in debt.  In real life, that’s 108% interest plus the nominal rate, and our twisted leaders want  you say, “Thank you sir, may I have another!”

2011 wasn’t an anomaly either; it’s the new normal.  Since the Bush deficit increases (to call a spade a spade) went into effect,  the rise in debt has exceeded the rise in GDP 6 of the last 10 years (the four years of positive GDP-minus-Debt can be directly attributed to the housing bubble).  That never happened in the U.S. during Great Depression/WWII era.  One place where it did happen was in the Weimar Republic (which shortly thereafter became known as Nazi Germany) .  No one’s ever done a better job of explaining how quickly things unraveled there than Art Cashin (this is an absolute MUST read):

In 1920, a loaf of bread soared to $1.20, and then in 1921 it hit $1.35. By the middle of 1922 it was $3.50. At the start of 1923 it rocketed to $700 a loaf. Five months later a loaf went for $1200. By September it was $2 million. A month later it was $670 million (wide spread rioting broke out). The next month it hit $3 billion. By mid month it was $100 billion. Then it all collapsed.

 ….In 1913, the total currency of Germany was a grand total of 6 billion marks. In November of 1923 that loaf of bread we just talked about cost 428 billion marks.

So I’ve got a whole bag of “Fuck You!” for anyone who still thinks nothing could be worse than another Great Depression.  The path we’re on ends with mountains of corpses when the great experiment fails. 

America’s most prestigious education institutions have become grooming salons for malignant narcissists.  Men and women high on their own self-important sense of entitlement, but short on any sense of honor or duty (like passing a budget or arresting someone who stole a billion dollars) and devoid of any real insight or achievement.  So far it’s working out quite nicely for them:

Fun fact:  Washington DC now boasts, by far, the highest and fastest growing income per capita in America.

No matter what color Kool-aid you prefer, a Harvard Law School graduate who wipes his ass with the constitution will occupy the White House  until 2016.   Any flavor difference you think you detect is artificial.  Neither party has any intention of balancing the budget or stopping the generational rape of America.  They exist only to give you the illusion of choice.

There’s another reason nobody wants you thinking about velocity of money and triple-digit principle-based interest rates.  When you get comfortable with the idea that the same dollar gets spent over and over in the economy,  you’ll begin to reconcile that notion with the fact that total government spending (Federal, State and Local) accounted for over 40% of GDP  in 2011.  Then it becomes clear that you are already living in on of those countries where the government controls everything (call it whatever -ism you want).   Next thing you know,  you’ll start connecting the dots between the nation’s skyrocketing public debt and the private fortunes amassed by a select few, and no one who’s in on the fix wants that.

Better than one in seven Americans are now on food stamps thanks to Washington’s disastrous policies, but narcissists refuse to recognize the consequences of their own actions.  That’s how they sleep at night.  They see themselves as saviours, feeding the inferior huddled masses too stupid to fend for themselves, so of course they deserve more money.  The only thing they learn from shitty results is that they need more power, more control and more money.  

The so-called “fiscal cliff” represents nothing more than a return to policies proven far less dysfunctional than the current ones, but Washington doesn’t see it that way. Instead they want you to beg them to save you from this horrific monster and adore them when they double down on policies that serve to increase your dependency on them.

By any and all reasonable measures, it’s worse than the Great Depression, and still deteriorating.  Just remember that truth is the narcissist natural enemy before you speak.

***

 Notes for nerds:

 The Fed calculates and publishes M1 velocity, M2 velocity (currently at all-time lows) and MZM velocity (also at all-time lows), however velocity of monetary base (which has data back to 1918) must be calculated manually by dividing GDP by monetary base.   Here’s the link to that chart with downloadable data:

http://research.stlouisfed.org/fred2/graph/?g=9wK

William T. Gavins Fed paper on understanding recent changes to the monetary base:

http://research.stlouisfed.org/publications/review/09/03/Gavin.pdf

This chart, with downloadable data compares changes in National Debt vs.  Changes in GDP, so it shows how much bang for the buck you’re getting.  2002-2011, 9.3 Trillion in National Debt has produced 4.8 Trillion in GDP growth, making the effective interest rate (based on repaying principal only) 94%.

 http://research.stlouisfed.org/fred2/graph/?g=9wJ

If you’re not familiar with malignant narcissism (I wasn’t until very recently):

http://en.wikipedia.org/wiki/Narcissistic_personality_disorder 

Art Cashin’s terrific piece on the Weimar collapse:

http://www.zerohedge.com/news/art-cashin-most-important-history-lesson-last-century

Foodstamp data:

http://www.zerohedge.com/news/465-million-americans-record-223-million-us-households-foodstamps

2011 Total Government spending:

http://www.usgovernmentspending.com/total_2011USrt_13rs5n

Producing anything that anyone might ever call “art” wasn’t on my bucket list.  When I started writing, images just started popping into my head.  This was the first:

I still think it sums up our nation’s folly better than any words I’ll ever write.  Since then, a lot of other strange pictures have fallen out of my head, and someday I’ll round them up and display them all together.  But this is not that day.

I quickly realized that making gag images was far more fun for me than fact-finding and writing.  Long story short: I’ve got some images to get rid of. 

I was saving this for QE3, but I’ve grown impatient.

***

I’m a huge Gary Larson fan.  When Draghi replaced Trichet, I looked him up and found he was an M.I.T. PhD,  just like Bernanke.  Then the vice president of the ECB (Lucas Papademos) appointed himself king of Greece.  Another MIT PhD!!!  Either nobody else noticed, or nobody else cared that the engineers of the Great Greek Tragedy were MIT fucktards (as is Paul Krugman).   M.I.T. has developed weapons-grade stupidity and the fallout is everywhere!!!  Israel’s Benjamin Netanyahu, Christina Romer, Larry Summers, John Thain, Carly Fiorina, just about everybody connected to LTCM.  Wherever there’s a financial trainwreck, I guarantee you there’s an M.I.T. douchenozzle nearby.  Of course M.I.T. is located in Cambridge, Mass., which is also home to Harvard.  Harvard, in case you didn’t know, is where the rest of the numbskulls the world would be better off without learned to cheat, lie and steal, including BOTH presidential candidates. 

Anyway, I was planning a piece called, “Where Do These Idiots Come From?”, but it was just too big a list for me to do justice to.  All you other bloggers out there, please, feel free.

My Super-Mario

….And sometimes all you’ve gotta do is crop it.  Since we don’t have Sarkozy to kick around any more, I decided to cut out Angela, and wait….

Never worked this one into a post.  Still can’t believe he said that out loud.  I should probably be a whole lot rougher on Geithner, but I can’t because he’s Barney-fuckin’-Fife to me.  Who could persecute Barney?

This is “super” Grover Nordquist, king of the pseudo-conservatives.   I pledge to never vote for one!

Fellow bloggers:  Please take ‘em and use ‘em.  And that goes for all of my original content.

My only question is why is this suddenly news?   The only thing I’m sure of is it has nothing to do with a desire to return to honest markets.  Maybe Jamie Dimon’s comment that JPM is positioned to profit from rising rates didn’t flush out enough suckers.  Maybe the spectre of rising mortgage interest rates will spook buyers into the housing market, which has now “bottomed” for 63rd time by my count.

I don’t really care, but I know bad theatre when I see it.

236 years ago, there was no such place as the United States of America and the 56 brave souls who signed the treasonous Thomas Jefferson  document we celebrate today didn’t change that.   It took a war fought on the soil beneath our feet with women and children very much in harm’s way to convince the world that there was in fact a place called the United States of America.  Only after the Black-Swanish outcome of that war would this country’s first President take office, almost thirteen years later.   What we should celebrate today is the horrors endured by those who made that declaration a reality.

For most Americans today, war is something we do to others.  The prospect of a war with Iran is Iran’s problem, me, I got dogs to grill.   We smack around countries like a drunkard whaling on his kids, feared but not respected.   The kids have all learned to know when it’s coming too because the M.O. never changes.

Since WWII aircraft carriers have been the crown jewels of the U.S. military.  Their awesome presence silently announces that some rogue nation is in deep shit.  It’s an extremely predictable ritual, not a strategy.

So the question is this:

When will a U.S. aircraft carrier be sunk again and by whom?

If your answer is never, you might be a redneck, but if you believe that the U.S. State Department had any choice at all in exempting China from the sanctions against Iran last week, you’re definitely a mainstream media propaganda-swallowing shithead, but I digress.

Less than two weeks seperate the last time an aircraft carrier was sunk in battle (Japan’s Amagi – July 24, 1945) and the first time nuclear weapons were used on humans (Hiroshima – August 6, 1945).   I don’t believe that’s a coincidence.   Since then “war” has become a grotesque blend of political theatre and big business extortion that still gets plenty of people killed and maimed, but in much more “gladiatorial” kind of way (which is still better than real war).   In this not-so brave world aircraft carriers are invincible, so crack open another cold one before the fireworks. 

You may need that slack-jawed look again the day you wake to find a U.S. aircraft carrier has been sunk.  You’ll expect your TV to tell you an honest account of what happened and scream for politicians to do something, forgetting that the only thing congress knows how to do is shower other people’s money on their worthless cronies.  So much for independence.  If we’re lucky, this “Black Swan” will be nothing more than a false flag operation designed to further impoverish our children.  If not, it will mean a sudden return to the kind of war whose outcome can’t be scripted. 

Are we ready? 

Declaring something doesn’t make it so.  So  please take a few moments to remember all the blood, sweat and tears (read shared sacrifice)  it took to make that 236 year old declaration a reality this Independence Day.

Fun Fact: The USS Enterprise, currently deployed in the Persian Gulf, is scheduled to decommissioned March 15, 2013.

http://en.wikipedia.org/wiki/List_of_sunken_aircraft_carriers

My original content (99% of what’s here) is free to anyone.   Take it in good health.

Muppets have received a lot of bad press since Greg Smith realized that he is not, in fact, a one-percenter.  Fortunately Elmo’s back to reclaim his rightful place in the financial world:  Making the seemingly incomprehensible  comprehensible while politely pointing out what should be obvious to everyone not in diapers.  That’s not so easy when the economic views espoused by everyone from central bankers to TV talking heads can only be accurately described as infantile.

It’s hard to get the right answer when you’re counting the wrong stuff, and maybe that’s why Wall Street’s minions never discuss income per capita.  It’s a meaningful measure of economic strength that ordinary Americans can relate to.  Well, that and it exposes “pro-growth” policies for what they actually are:  An excuse to loot the country in broad daylight by focusing on GDP, where government money, no matter how horribly misspent, shows up in the “win” column.  Strip away that illusion and it becomes crystal clear that their path to prosperity is our highway to hell.

In case you haven’t noticed, incomes (not GDP) pay mortgages and support small businesses.  Increasing the National Debt by a can you say “parabolic?” 54% in the last 42 months hasn’t budged income per capita in nominal terms.  If you adjusted for inflation, you’d find that Americans are actually about 12% poorer today than they were in 2006.   We’re not “growing” our way out of this, we’re just going deeper and deeper into hock, courtesy of a government with about as much fiscal discipline as crack-whores with a stolen credit card.  Here’s the thing: It’s your credit card, so maybe you should understand how much they’re spending:

Just to be clear, we’re talking about $400 per citizen per month in new charges alone, month after month after month.  Here’s what me and Elmo can’t figure out: Why would attempting to break this spiral be labeled Class Warfare?  Of course you don’t have to believe  us, there’s far more distinguished schools of thought out there:

Fun facts:

• From 1947 to 1974 US income per capita grew more than National debt per capita 25 times.
• In the last 30 years, National debt per capita has grown more than income per capita 24 times.
• The last time income per capita grew more than national debt per capita was 2001.
• Ben Bernanke arrived at the Federal Reserve in 2002.

I’m going to ask Elmo to leave before this gets ugly…

Sources:

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm
http://www.census.gov/hhes/www/income/data/historical/people/
http://www.census.gov/hhes/www/income/data/historical/people/2010/P01AR_2010.xls
http://www.treasurydirect.gov/NP/BPDLogin?application=np
http://www.bls.gov/data/inflation_calculator.htm
http://www.usgovernmentdebt.us/
http://www.usgovernmentspending.com/

Previously:

http://acrossthestreetnet.wordpress.com/2010/09/24/understanding-the-national-debt-sesame-street-edition/

Nobody but me spends any time thinking about how I aspire to write, but if I were ever to point to a shining example of something that I wish I had written, this is it:

Fix income inequality with $10 million loans for everyone!

By Sheila Bair, Published: April 13 The Washington Post

Are you concerned about growing income inequality in America? Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a modest proposal that involves just a small adjustment in the Federal Reserve’s easy monetary policy. Best of all, it will mean that none of us have to work for a living anymore.

For several years now, the Fed has been making money available to the financial sector at near-zero interest rates. Big banks and hedge funds, among others, have taken this cheap money and invested it in securities with high yields. This type of profit-making, called the “carry trade,” has been enormously profitable for them.

So why not let everyone participate? 

Under my plan, each American household could borrow $10 million from the Fed at zero interest. The more conservative among us can take that money and buy 10-year Treasury bonds. At the current 2 percent annual interest rate, we can pocket a nice $200,000 a year to live on. The more adventuresome can buy 10-year Greek debt at 21 percent, for an annual income of $2.1 million. Or if Greece is a little too risky for you, go with Portugal, at about 12 percent, or $1.2 million dollars a year. (No sense in getting greedy.) 

Think of what we can do with all that money. We can pay off our underwater mortgages and replenish our retirement accounts without spending one day schlepping into the office. With a few quick keystrokes, we’ll be golden for the next 10 years. 

Of course, we will have to persuade Congress to pass a law authorizing all this Fed lending, but that shouldn’t be hard. Congress is really good at spending money, so long as lawmakers don’t have to come up with a way to pay for it. Just look at the way the Democrats agreed to extend the Bush tax cuts if the Republicans agreed to cut Social Security taxes and extend unemployment benefits. Who says bipartisanship is dead? 

And while that deal blew bigger holes in the deficit, my proposal won’t cost taxpayers anything because the Fed is just going to print the money. All we need is about $1,200 trillion, or $10 million for 120 million households. We will all cross our hearts and promise to pay the money back in full after 10 years so the Fed won’t lose any dough. It can hold our Portuguese debt as collateral just to make sure. 

Because we will be making money in basically the same way as hedge fund managers, we should have to pay only 15 percent in taxes, just like they do. And since we will be earning money through investments, not work, we won’t have to pay Social Security taxes or Medicare premiums. That means no more money will go into these programs, but so what? No one will need them anymore, with all the cash we’ll be raking in thanks to our cheap loans from the Fed. 

Come to think of it, by getting rid of work, we can eliminate a lot of government programs. For instance, who needs unemployment benefits and job retraining when everyone has joined the investor class? And forget the trade deficit. Heck, we want those foreign workers to keep providing us with goods and services. 

We can stop worrying about education, too. Who needs to understand the value of pi or the history of civilization when all you have to do to make a living is order up a few trades? Let the kids stay home with us. They can play video games while we pop bonbons and watch the soaps and talk shows. The liberals will love this plan because it reduces income inequality; the conservatives will love it because it promotes family time. 

I’m really excited! This is the best American financial innovation since liar loans and pick-a-payment mortgages. I can’t wait to get my super PAC started to help candidates who support this important cause. I think I will call my proposal the “Get Rid of Employment and Education Directive.” 

Some may worry about inflation and long-term stability under my proposal. I say they lack faith in our country. So what if it cost 50 billion marks to mail a letter when the German central bank tried printing money to pay idle workers in 1923? 

That couldn’t happen here. This is America. Why should hedge funds and big financial institutions get all the goodies? 

Look out 1 percent, here we come.

 ***

Love it!

http://www.youtube.com/watch?v=bfRxFFhhWnk

Rick starts off by displaying he has no idea how many million-dollar earners there are (which probably means you should step away from the whiteboard).  If the White House actually published the utterly insane number (22,000) Rick attributes to them, we should all start looking for a new country immediately, but I digress.

Here’s a link to the IRS’s stats page:

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=134951,00.html#_pt1

And here is the exact file Rick should have used:

http://www.irs.gov/pub/irs-soi/09in21id.xls

Note: Personally, I’d love to see a high-octane Santelli rant on how the fuck it could possibly be that as of April, 2012, the most recent IRS taxpayer data is from, wait for it, 2009!!!

In 2009, there were 230,323 filers with adjusted gross incomes of one million or more. 

Rick does some crazy shit where he takes $1,000,000 from all of them (like he’s taking all their money or something).  Here’s a much more reasonable thing to do: Let them keep a million, because that 230,323 actually earned $711.6B.  Hold that thought.

Next Rick asserts that our deficits are $200B a month, drawing another bullshit flag from yours truly.  While the March deficit was $198.2B, if Rick had divided the last six months borrowing ($792B) by six, he’d have discovered that $132B per month is a much more realistic number.

Taxing the Rich isn’t worth it in Rick’s mind because it would only pay off the deficit for one month.  Rick is now down the rabbit hole…

Let me point out if we let the rich keep the first million and took the rest for taxes, the government would get $481B, which would finance the deficit for 3.64 months, or 109 of the 365 days in the year.

Still not worth it, Brother?

Funny story, periods of real prosperity in America (like post-WWII, when income per capita outpaced debt per capita for 25 of 28 years) were marked by high taxes on high-earners.  If you’re looking to create another great depression, keep cutting taxes on the rich like they did in the 1920s.  Looky here.

Here’s the “Top Secret” part that no one seems to understand.  Raising tax rates on high earners doesn’t increase tax revenues, it forces people to avoid the tax.  Here’s a list of ways successful people can avoid those taxes:

Hire more people
Pay employees more
Increase benefits
Buy new equipment
Expand business

Rick turns himself into a walking, talking Italian joke when he asks, “How are my kid’s opportunities effected by how many millionaires there are?”

If you don’t understand the answer to that question, Rick, you may as well build a time machine and send your kids to coal country circa 1875.  Spoiler alert: If your kids inherited the mental acuity displayed in this clip, they ain’t gonna be running the mine.

Fact-finding…FAIL
Arithmetic…..FAIL
Reasoning……FAIL

Note: Don’t miscontrue this piece as an endorsement of fucktarded goverment deficit spending.  It is not.  Horrific  fiscal policy and poorly reasoned tax policy are the yin and yang that will produce a total collapse that will make the Great Depression seem like an afternoon at the park.

Get it together, Santelli and quit sniffing those markers.

Previously:

http://acrossthestreetnet.wordpress.com/2011/07/13/raising-taxes-absolutely-promotes-job-growth/

My sister sent me this.   Maybe I spend too much time thinking about the bad guys.

We are going to have to deal with energy because we can’t keep on borrowing from the Chinese and sending money to Saudi Arabia. We are mortgaging our children’s future. We’ve got to have a different energy plan.

~Barack Obama

Presidential debate, October 7, 2008

The outstanding balance on your kids’ mortgage is up 51% ($5.2T) since those words were spoken.  The US Government owed China $587B then.  Three years later, that debt more than doubled to $1.27T and the only reason it isn’t even higher now is because China has lost its appetite for US paper.  Although the US has decreased the amount of oil imported from Saudi Arabia in recent years, it is  still America’s second biggest supplier (Canada is #1) and prices paid have more than quintupled in the last decade (the average price in 2002 was $22.81).  Just to drive home the point: Natural gas is 40% cheaper today than Saudi oil was ten years ago.

“The next time you hear some politician trotting out some three-point plan for $2 gas you let him know we know better. Tell him we’re tired of hearing phony election year promises that never come about.”

~President Barack Obama

March 7, 2012* 

(Thank You, Jesus)

Obama made those juicy remarks yesterday regarding Presidential hopeful Newt Gingrich’s assertion that high gasoline prices are a “direct result” of Obama’s energy policies.  Loathe as I am agreeing with anything coming out of Moon Base’s pie hole, he’s right.  When you spend most of your time completely ignoring your most viable option, bad things tend to happen.  Go ahead, see if you can find a video clip of the President talking about developing natural gas in the first two years of his administration (pack a lunch).  There’s more than 13 million vehicles worldwide running on natural gas, and less than 1% are in the United States. 

Fun Fact:  According to the World Policy Institute,  Iran is the World leader in natural gas vehicles, with 2.86 million NGVs as of November 2011.  

Meanwhile back in the land of PT Barnum, the Chevy Volt is cementing its reputation as the WTF product of the 21st century (and I don’t mean “Winning The Future”).  On March 4, 2012 General Motors suspended production of the Turd Volt due to poor sales.  The Volt would be a national disgrace if it could be called an “American” car with a straight face, but I won’t spend any time trying to convince you of that.  Simply google the exact phrase “Chevy Volt sucks” and you will find 10,900 results to explain it in agonizing detail.

Since 1998, Honda has been making a compressed natural gas (CNG) version of its popular Civic model in East Liberty, Ohio (’98 – ’08) and Greensburg, Indiana (’09 – present), called the Civic GX.  It has been the only natural gas passenger vehicle produced and sold in the United States and although it’s won tons of awards, including “Greenest vehicle of the year” eight years in a row by the American Council for an Energy-Efficient Economy, most of us have never seen one.  Why? Because there are less than 400 CNG stations open to the public in the country.

The Civic GX isn’t without drawbacks.  It has less responsive acceleration, reduced trunk space, and you can’t commit suicide by running it in a closed garage because its tailpipe emissions are often cleaner than ambient air.  Googling the exact phrase “Civic GX sucks” this morning produced this:

WMDs, again?

Of course I speak of “Weapons of Mass-media Distortion.”   If you listen to CNBS today, you’ll get the impression that cars running on natural gas is a brand spanking new idea, and that GE is racing to develop a CNG home-filling station (something Honda began offering in 2005).   GM and Chrysler say they will have engines that will run on both gasoline and nat gas by year’s end!  Neato, but Iran’s ICKO started producing dual-fuel engines in 2009. 

At this point you have all the information you should need to determine if the American energy policies of the last decade have helped or hurt working Americans, and if those policies,  or lack thereof,  were the product of greed and corruption or the fact that our elected officials are utter idiots.  No matter what your opinion, we are here and it is now, so here’s a much more important question:  Why doesn’t the US Government step in and buy natural gas futures and options?  In doing so they could put a cap on energy prices for years to come and create millions of  jobs while transitioning  to a more sensible energy policy.  Stable prices and maximum employment (does that ring a bell?).

They won’t.  They’ll say, “It’s not the government’s place to interfere in the free market.”   Really?  The same government that spent $170B last year propping up the housing market to keep big banks solvent doesn’t like interfering?  $100B+ in student loans to keep education over-priced and young people in debt doesn’t count?

The cruel nature of capitalism is supposed to kill stupidity, by sending the misguided to the poorhouse and the criminal to the jailhouse, yet time and time again, we have seen the natural outcomes of capitalism deemed “unacceptable” by our politicians.   The US Government and/or the Federal Reserve rushed in with trillions of other people’s money to rescue Countrywide, Bear Stearns, Merril Lynch, AIG, Goldman Sachs, General Motors, General Electric, Citigroup, Wachovia, Bank of America, Morgan Stanley and JP Morgan from the fate they rightly deserved.   Yet when faced with the opportunity to help ordinary Americans, create millions of jobs and move the nation toward energy independence, all of a sudden, they’re laissez-faire?  

The Obama administration recently accused Iran’s elite of profiteering  “on the back of the average Iranian” regarding imposed US sanctions.  I guess our government would know an awful lot about that sort of thing….

Hopefully you’re beginning to understand just how expensive pseudo-capitalism is.

Data Sources:

US imports from Saudi Arabia:

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTIMUSSA1&f=M

Imports from all countries:

http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm

Most recent “top importers”

ftp://ftp.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

 Gross Heat Content of Crude Oil by Country, Most Recent Annual Estimates, 1980-2007

 www.eia.gov/international/RecentGrossHeatContentCrudeOil.xls

Natural Gas Prices:

http://www.eia.gov/dnav/ng/hist/rngwhhdm.htm

 Note: Prices actually paid for Saudi oil are based on the Argus Sour Crude Index, which is almost as elusive as the Argus Apocraphex (stifle your curiosity unless you have an hour to waste). 

http://www.cmegroup.com/trading/energy/crude-oil/argus-sour-crude-index-financial_quotes_settlements_futures.html

 Debt to the Penny:

http://www.treasurydirect.gov/NP/BPDLogin?application=np

 

On Tuesday,  when silver shot up more than 4%, the CMEgroup initially issued blank trading reports, as in “!!!! NO DATA !!!!”, but eventually  published this:

492 of the 513 contracts delivered (96%) came from the Bank of Nova Scotia (425!) and the US Government   JPM customers.  So it wasn’t exactly so “widespread buying!” was it?

Now let’s jump over and see what happened in gold:

Of the 335 gold contracts delivered, JPM (customer & house combined) supplied 334.  There was only one  gold delivery that didn’t come from JPM, and that one contract went to, wait for it, JPM.  So JPM was involved in 100% of the physical gold transactions on February 28, 2012.  To recap, JPM delivered a bunch of gold and took a bunch of silver, BoNS delivered silver and took gold.  That’s really all that happened, unless you believe paper-metal traders throwing confetti around  impacts things (spoiler alert: nope). 

So it all boils down to this multiple choice question:

A) JPM suddenly hates gold

B) BoNS suddenly needs/wants more gold

C) BoNS suddenly hates silver

D) JPM’s house account suddenly needs/wants more silver

Figuring out the correct answer is your job, but I will tell you that in the wake of the “Gold & Silver Crash!!!” hyped on TV,  BoNS has nibbled at silver (6 contracts),  and JPM customer(s) have taken back 47 gold contracts.  Maybe the Bank of Nova Scotia is looking to buy oil from Iran, or maybe despite everything you’ve been told, QE3 is very much on the table.  Either way, I highly recommend looking beyond the chart.

You can follow the action whenever the tools at the CMEgroup (who definitely picked the wrong week to stop sniffing glue)  feel like updating their data:

http://www .cmegroup.com/delivery_reports/MetalsIssuesAndStopsReport.pdf

http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsMTDReport.pdf

http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf

The data delays, combined with missing and incomplete reports by the CMEgroup has gone from annoying (like all the Jamie Dimon knob-polishing  going on at CNBC…JPMs a “fortress”?  And how would Maria B know?) to downright disgraceful (which is what Jamie’s appointment to Treasury Secretary will be….just wait).

****

Update:  JPM House took delivery of another 187 silver contracts Friday 3/2/2012, bringing them to 813 for March and 1245 YTD net.    ….The big sellers were Jefferies (customer) and HSBC (house) who delivered 134(net) and 80 respectively.  Note: You have to save the reports to your own computer if you want them for future reference.

Other notes: Remember, a gold contract is 100 t oz., silver is 5000 toz (fifty times as much stuff).  6.2 million (the amount of t oz. silver JPM has taken so far in Q1) might not sound like a lot, but US production is only about 10 million t oz. per quarter.

Fun Facts:  As mentioned in the article, JPMs house account has not taken delivery of this much physical silver since September of 2010, when they took 1,630 contracts.  The last time the London Bullion Market Association (LBMA) silver fix was below $20 was September 13, 2010.  http://www.lbma.org.uk/pages/?page_id=54&title=silver_fixings&show=2010&type=daily

Funner Facts:  On November 23, 2011 JPM agreed to buy an additional 4.7% stake in the London Metals Exchange (LME) from the bankrupt MF Global for $38.9 million (read “dirt cheap”).  The purchase made JPM the largest shareholder of the metals exchange (which trades aluminium, copper, tin, nickel, zinc, lead, aluminium alloy and NASAAC, steel billet, cobalt and molybdenum), with a 10.9% stake.  http://dealbook.nytimes.com/2011/11/23/jpmorgan-said-to-buy-mf-global-stake-in-london-metal-exchange/ JPM is also the custodian for the iShares Silver Trust  (SLV), which is the World’s largest silver stockpile, currently with 313 million t oz.

People who don’t have money don’t understand the stress.   Could you imagine what it’s like to say I got three kids in private school, I have to think about pulling them out?   How do you do that?”

Dluglash is describing the horror of scraping by on $350,000 a year.   Really.  How could you lucky bastards ever understand?

Ordinary Americans, with their fancy foodstamps and foreclosure notices, are increasingly turning a blind eye to the plight of the people who outsourced their jobs.  You  just don’t get it, do you?    These people are light years smarter than you, and they work really hard.  Now things are so dire, some are actually considering sending their kids to school with your germy kids.   It’s bad.

Some have even been forced to shop for discount Salmon.  How could people who enjoy cat food ever understand that kind of humiliation?  If someone doesn’t halt this death spiral soon they may have to settle for Microsoft products (which even poor people hate).  

This is all a joke, right?  Cause if it’s not, wait ’til they find out about Walmart….

Story:

http://www.bloomberg.com/news/2012-02-29/wall-street-bonus-withdrawal-means-trading-aspen-for-cheap-chex.html

Yum-Tum-Yummy-Tum-Tay!

U.S. Says Iran Elite Profiting From Currency Plunge Triggered by Sanctions

The Obama administration is accusing the elite of Iran’s regime and the Islamic Revolutionary Guard Corps of profiting “on the back of the average Iranian” as the nation’s currency plunges under pressure from international sanctions.

Oligarchs profiting off the demise of their country (Gasp!)

From the New York Times:

Economic Downturn Took a Detour at Capitol Hill

Largely insulated from the country’s economic downturn since 2008, members of Congress — many of them among the “1 percenters” denounced by Occupy Wall Street protesters — have gotten much richer even as most of the country has become much poorer in the last six years, according to an analysis by The New York Times based on data from the Center for Responsive Politics, a nonprofit research group.

Pot meet kettle.

But I must re-emphasize, I don’t know any of these people.

The realm I’m  familiar with has more than its fair share of people who will weasel out of their obligations by any means conceivable, so try this on for size:  Yes Virginia, there is a European debt crisis, but there’s also a credit default swap issuer crisis.  The latter has been with us for at least four years.  Worse yet, there’s considerable evidence that protecting 5 banks from having to honor their CDS obligations is Job 1 in America.  Now these US banks are trying to conquer Europe.

5 US firms represent more than 70% of Global CDS market.

Fun facts: JPMorgan’s Blythe Masters is widely credited with the creation of the modern credit default swap in connection with JPM’s obligations over the Exxon Valdez oil spill (the clusterfuck that just keeps on giving) and is living proof that Americans will embrace any harebrained scheme pitched with a British accent.

Credit default swaps distort markets.  Wall Street could never have sold mortgage-backed securities without the ”guarantees” CDSs promise.  No MBS, no housing bubble.  When the housing bubble broke, Goldman CEO/Treasurer Hank Paulson drafted a three-page memo demanding that the US taxpayers buy $700B in “Troubled assets.”  What made these assets so troubling for Wall Street was that they had insured most of them and were on the hook for the losses.  Congress gave Paulson the money, but he never bought any troubled assets.  Instead the Fed stepped in and bought $1.25T in mortgage backed securities, and rumors are that HeliBen will be buying more in 2012.  Meanwhile the Fed unleashed program after program to stabilize the financial system.   If you’re inclined to review the madness in detail, I recommend the Government Accountability Office’s 266-page report on the Federal Reserve’s management of the last crisis (found here).  If not, I recommend Laura Numeroff & Felicia Bond’s If You Give A Pig A Party with this special edition cover I made:

If You Give A Pig A Party, chronicles a rollicking series of unforseen events that in the end only leads to another party. We could learn a lot from this masterpiece.  More than 60% of the Fed’s so-called “broad-based” emergency programs went to Pig 5 ($9.9T of $16.1T).  

In other news, I’m trying to cash in on the success of the If You Give A _____ A _____ franchise with an offering of my own:

So far no takers.

 Happy Holidays!

Mark

Notes: All CDS data is notional value.  Data on Global credit default swaps from most recent BIS Semiannual OTC derivatives statistics (Q2, 2011).    The BIS claims to capture more than 95% of the OTC derivatives market.   Individual bank data from OCC’s Quarterly Report on Bank Trading and Derivatives Activities (Q2 2011) .   According to the OCC, 97% of credit derivates are credit default swaps.The “Pig 5″ added more than $135 B in credit derivatives in Q3 (comparable BIS data is not available).  The data used from the GAO report can be found in Table 8.  Fun fact: Artist Felicia Bond’s name is an anagram for “Fed bail con I.”

I assert that Americans are far more united than we realize, so here’s a very simple question:

Since it is unlikely that Gallup picks up this question anytime soon, I’m asking for your help to make this go viral.

Thanks,

Mark

The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.

~Paul Krugman, from the article “Panic of the Plutocrats“

Fuckety-Fuckfuckfuckfuck!!!

There are people in this world that I love to hate, and Paul Krugman is one of them (close to tops on my list).  That said, I try to listen to what is being said, not who said them.  Today I found an excellent explanation of the Occupy Wall Street movement, and to my horror it came from none other than my sworn archenemy, Krugnuts:

What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re not John Galt; they’re not even Steve Jobs. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.

And there it is; far better than I could ever say it.  I wish those protesters wouldn’t bash capitalism so much because what’s happening ISN”T CAPITALISM!!!!  Capitalism is supposed to kill companies like JP Morgan, Goldman, General Electric, Morgan Stanley etc., etc., etc.  These companies simply shouldn’t exist anymore and everyone associated with them should be in the poorhouse.  Instead they hijacked America.

I think everyone should read this Krugman article.

http://www.nytimes.com/2011/10/10/opinion/panic-of-the-plutocrats.html

(You’ll never know how much it hurt to write that)

Unless there has been some kind of mix-up, no historic pages from Yahoo can be  accessed via the wayback machine, so hold on to those memories.   A few weeks back I was looking at the September 12, 2001 Yahoo front page and I thought it would always be there.  As it stands now, that snapshot of American history (along with countless others) is gone forever.

I wonder how many people share my outrage over this.  Certainly no one at the New York Times, CNBC, Fox News or anyplace else where  journalism has degenerated into a sideshow.  Facts are enemies to them anyway.

As 2011 unfolds, we are witnessing the same people tell the same lies they told just three years ago.   It’s insulting.  Jim Cramer’s assertions that “Morgan Stanley is fine…” and “2011 is not 2008!” make him sound like a wifty used car salesman.  Had Cramer understood 2008 was “2008″ it might be interesting to hear what he had to say, but he didn’t.   I agree with Cramer however; 2011 is not 2008, it’s Nineteen Eighty-Four.

So say hello to the memory hole.

Note: I’ve contacted the Wayback Machine for an explanation.  I’d at least like to know whose decision it was to remove yahoo from the Wayback.  I’ll let you know what I find out.

Fun fact:  The Wayback Machine is operated by Alexa Internet, a subsidiary of Amazon.com. 

***

Nevermind!!!!!

The pages are back.  The above screenshot is the only proof I have that they were ever gone.

 I think we should probably do something to insure that those pages never disappear.

It’s Morgan Stanley.

CNBC’s repeated denials confirm this (thanks Cramer & other sock puppets!)

I hope to put together more soon (but don’t count on it).

***

Wall Street’s biggest charity case.

August 22, 2011 – Bloomberg reports that Morgan Stanley received $107B in bailouts from the Fed. 

Morgan Stanley, facing a crisis of confidence after the fall of Lehman Brothers Holdings Inc., got a $9 billion injection from Japanese bank Mitsubishi UFJ Financial Group Inc. and agreed to take a $10 billion bailout from the U.S. Treasury to shore up capital. As hedge-fund customers pulled funds out of the New York-based firm, it plugged the hole with $107.3 billion of secret loans from the Federal Reserve’s Primary Dealer Credit Facility and Term Securities Lending Facility, set up earlier in the year to supply brokerage firms with emergency financing.

Morgan Stanley was the biggest Fed charity case in 2008 and nobody knew it for three years.  See here and here.

Pursing other interest?

September 15, 2011 -  NYT’s Susanne Craig (remember that name) reports that Morgan Stanley Chairman, John Mack has announced plans to step down.  Unless this is your first week investing, you know that a Chairman stepping down is always a red flag, usually because they’ve trainwrecked the company, or put their dick somewhere they shouldn’t have.  Of course those angles were completely unexplored by Ms. Craig, who chooses instead to focus on Mack’s upcoming book (on, get this, “leaders”) and his role as an economic advisor to a presidential candidate no one’s ever even heard of. 

1.76 Trillion in OTC Forex contracts

September 24, 2011 – In this article, based on the OCC’s quarterly report on derivatives activity Zerohedge observed:

Of particular note is that while virtually every single bank has a preponderance of its derivative exposure in the form of plain vanilla IR swaps (on average accounting for more than 80% of total), Morgan Stanley, and specifically its Utah-based commercial bank Morgan Stanley Bank NA, has almost exclusively all of its exposure tied in with the far riskier FX contracts, or 98.3% of the total $1.793 trillion. For a bank with no deposit buffer, and which has massive exposure to European banks regardless of how hard management and various other banks scramble to defend Morgan Stanley, the fact that it has such an abnormal amount of exposure (but, but, it is “bilaterally netted” we can just hear Dick Bove screaming on Monday) to the ridiculously volatile FX space should perhaps raise some further eyebrows…

Here’s something else noteworthy from the OCC report:

The Morgan Stanley holding company is third in total notional amount derivatives contracts with $56.4T, yet Morgan is sixth in total assets with $830.7B.  Their ratio of derivatives to assets is 68, the highest in the group (Goldman is a distant second at 57).  Hmmmm. 

(more to come…)

 ***

Google “MORGAN STANLEY”

G’head.  Here’s what I got this morning:

 Again, unless you just opened your E-trade account yesterday, you should know that large banks are far more interested in quelling  truths than rumors.