Full Circle

[chuck kottke]

All things have ripple effects, and all the circles of connections are tied to one-another. One lever trips another, one gear drives another. So I began to see it all, and it surprises me it's not already common knowledge:

Without fair elections and fair campaigns, we get elected officials who do the bidding of the highest bidder (or campaign donor). First the bidders buy favors - they deregulate the systems designed to keep the economy stable and equitable. Then these bidders create a racket, and rig the economy. Then the economy goes bust, and unemployment soars. And donations to charities plummet - which includes gifts to Oxfam, since not only are the unemployed unable to give, the employed are uncertain of spending on anything. Which is of course unfortunate, as this affects people in African states and elsewhere there are urgent needs to be met.

This is not a partisan issue - it's systemic, and fully a problem with both major US parties. As sure as the Bush administration deregulated to the hilt and allowed the game riggers to tilt the table at a 90 from level, the Obama administration is not getting to the root of the problem, and investigating why things failed, and what needs to be done to fix the problem. Perhaps it's the contributors. Goldman Sachs is a major shareholder in the Obama campaign, and it's little wonder that they came out on top, and some major firms sank to the bottom. But by not fixing the problem, the economy cannot fully recover, as we have what Mr. Black describes as "living with a lie" - and we may be entering what in Japan came to be referred to as "the lost decade".

So, I am again asking anyone reading this to consider amending the US Constitution so that the Right to Fair Elections, including Fair Campaigns be included as an essential right, protected as strongly if not more so than all the rest, as without a fair process, we cannot here in the US guarantee that all our natural rights, nor our cherished middle class, will be protected and enhanced for ourselves and our posterity. It's all connected - and without a fair process to keep undue influence out and let the better representatives win, we all end up loosing from the corruption that eats our democracy. Consider supporting campaign finance reform as the driving gear to get things back on track, and please remember - it's not partisan, it's systemic. Fair Campaigns, Fair Elections, Fair Trade. It's all connected.:bulb2:

Check this out, in case you missed it:Bill Moyers Journal . Feedback | PBS

[Matter-Eater Lad]

Hey, it's been awhile!

 

Goldman Sachs is a major shareholder in the Obama campaign, and it's little wonder that they came out on top,

 

Goldman Sachs should be called Government Sachs. They are a prime example of what is wrong with government and wall street. And J.P. Morgan too! Did you know Chuck JP Morgan has 60-70 TRILLION dollars of derivatives off the balance sheet? Thats 5-6 times the US GDP and about the size of the global GDP!

 

Obama administration is not getting to the root of the problem,

 

And won't because like Bush and all other presidents they subscribe to the same economic thought. Controlled interest rate, credit expansion and inflation.

 

Black describes as "living with a lie" - and we may be entering what in Japan came to be referred to as "the lost decade".

Jay had a good point about this, Japan was a saving nation, with a good currency, and produced a lot when its problems hit, we are the opposite so I don't think it'll be likely we'll have just a lost decade, that's the best we could hope for. Our dollar is losing its reserve currency status and we're in major trouble. The Fed is the market right now for debt, that is a bad sign. China defaulted last year on derivatives contracts and they told their government companies they do not have to honor derivative contracts.

 

We legalized accounting fraud this year to help hide the problem, mark to market was lifted. Now banks can mark things much higher than market values, thus making their balance sheets look better. One of the solutions is to mark to market and NOTHING off the balance sheet! Full transparency, sadly Bush, Obama and the Fed do not want that.

[chuck kottke]

Hello Nick!

Yes, I got busy - the absentee landholder needed to tend to the estate here. Glad you're still checking in!

Goldman Snacks acc. to Peterlin - quite a lot of meals and goodies they scarfed down over there I gather..:P

But hmm.. anything very large merges with the gov't. these days.. John Pierpont Morgan - Robber Baron of the late 19th century, no doubt repeating history (no offense to Captain Morgan's side of the family). 60-70 Trillion dollars of funny money. How did we ever let it go to this level?.. Nobel Laureate level mathematicians running the show, creating this "perfect investment system", which works perfectly assuming the markets & people behaved rationally and corruption never runs rampant.. Icarus's wings.

Derivatives, derivatives. Why can't people just play video board games instead of merging their fantasy worlds with the real markets? I miss the olden days, when the owners of the companies really knew their businesses - when Oscar Meyer actually went on picnics with the farmers who raised their pork.

Perhaps Obama might yet, if given enough "incentive" to do so - but I think he's prone to listening to advice from those architects of the mess, and defenders of the cover-ups. I think he's honorable, but dealing with a great deal of influence clouding his higher ethical standards. If the truth ever got out, a lot of proverbial heads would roll..

Yes, I thought about Japan's savings as well - quite the opposite situation in that regard. We do manufacture a significant number of things here, despite the appearances, but yes, a "service sector" economy isn't sustainable in my mind either. Maybe if robots made everything, and only technicians were required, but that's not the case yet. Sometimes I wonder about robustness in the economy - efficiency taking too much precedence over stability in the system.

The Fed is buying the bad debt I assume you mean to say - Treasury bonds are doing quite well from what I hear, but the commercial banks are not whetting many appetites. Maybe I don't want to know - it's all such a house of cards, akin to what Enron had created, only on a grander scale...

China defaulted on the derivative contracts? My understanding of a market contract is that if you buy a future's contract for wheat, then the price is set today, and the delivery of the wheat is in the future. How does someone receive a shipment of derivatives?:laugh3: (it's all so ethereal to me..) Here's your container ship full of derivatives, Mr. Ho. It arrived at the dock yesterday. Please handle them gently - they're all full of thin air and their shells are paper-thin! What do you get? Is is like a property deed, but listing the gambling odds of market fluctuations as to what gets paid out if all the right horses pick up speed near the finish line?? How do you default on it? I think we've entered the twilight zone with this stuff.:thinking:

Well, that's good. Finally, we've legalized accounting fraud. That should really fix things! I gather enough money was in the pipeline to accomplish this feat as well? You know Nick, if it weren't so true, it would make a great science fiction novel! I hear someone wants to buy land on the moon too.. At least there's a real moon, and one might possibly be able to visit it!;)

Full Transparency - more like full Opacity. Time for reform to get reformers into office, and then maybe a real investigation could ensue. Since the rules changes, the referees have have been barred from the game, and now the outcome is set by highest bidder.

Invest in a full garden of carrots. Real substantial growth in the last quarter, excellent yields in less than a year, and tastier than what's on the market of mathematical mud.

[Matter-Eater Lad]

The Fed is buying the bad debt I assume you mean to say - Treasury bonds are doing quite well from what I hear, but the commercial banks are not whetting many appetites.

 

Yes, the Fed is buying huge amounts of "toxic assets" and even good debt. They are the bond market right now, which is very very bad. T-bills are doing "well" because of the Fed and foreign banks buying them due to fear in the stock market, but it's a major bubble that will burst and have long term consequences. There is simply no way we can service the debt and it's only getting worse. Eventually the Fed will be most the Treasury market and other nations will leave the dollar and we'll be in major trouble.

 

Most major nations are moving away from Tbills and the dollar.

 

it's all such a house of cards, akin to what Enron had created, only on a grander scale...

 

Enron will be considered the good ole days when this is over, Ken Lay will look like a saint, sadly. Our government is a giant ponzi scheme, the Tbill market is a ponzi scheme, like social security. Madoff will be "small potatoes" too when this is over.

 

China defaulted on the derivative contracts? My understanding of a market contract is that if you buy a future's contract for wheat, then the price is set today, and the delivery of the wheat is in the future. How does someone receive a shipment of derivatives?

 

Derivatives are many things. One type are Credit Default Swaps(CDS) that are basically insurance against a stock or bond. Another derivative are CDO's (Collateralized Debt Obligations) and than they have Synthetic CDO's, all of these things are "bets upon bets upon bets with other peoples money".

 

So when China defaulted, from what I understand, they didn't honer CDS that were written, say a bank in China insured a bond and that bond went bad, they did not have to pay the insurance money out for it. The CDS, CDO and Synthetic CDO's market are very complicated, I'm still trying to learn about them. So when you hear derivative think more on the lines of shady economic activity, not option trading or futures trading. There are so many trillions in CDS, and I believe CDO's are in the trillions too, I'm not sure about Synthetic CDO's.

 

Invest in a full garden of carrots. Real substantial growth in the last quarter, excellent yields in less than a year, and tastier than what's on the market of mathematical mud.

 

I agree!

 

EDIT: Chuck, if you can watch the gold market and the dollar index in the coming years. Gold has probably been oversold by the bankers, and now people are starting to call them on it and prices will rise. Just recently a major party bought a large amount of gold from the LBMA(London Bullion Market Association) and then asked for physical delivery, when that happened it became clear the banks JP Morgan and another in the deal did not actually have enough of the gold to give them! So they offered to pay 25% above spot price in a desperate attempt to keep this out of the news and they refused so the Bank of England got involved. It looks like more gold was sold than there actually is in the world, which could lead to a huge rise in prices.