It's Been a While

It's been a little while since my last post.  Partly, because the news has been the same.  The holiday week was the second reason.  Let's see if I can remember how this works.

The top news is still the Euro bailout farce, so I'll start there.  Over the weekend there were more rumors that the IMF would bail out Italy for $600 billion euros.  The IMF then squashed those rumors.  You know there is trouble when the rating agencies finally get worried.  Moody's is at that point.  Here is their comment:
"The continued rapid escalation of the euro area sovereign and banking credit crisis is threatening the credit standing of all European sovereigns," Moody's said. "While the euro area as a whole possesses tremendous economic and financial strength, institutional weaknesses continue to hinder the resolution of the crisis… The euro area is approaching a junction, leading either to closer integration or greater fragmentation."

The European banks are in just as much trouble.  Look at these numbers:

European banks have sold $413 billion in bonds this year. That's only two-thirds of the $654 billion in bonds that will mature this year, leaving banks with a $241 billion funding gap… This is the first time European banks haven't been able to roll over maturing debt in at least five years. Next year, $720 billion of bonds will mature.

If the market won't fund these banks, who will? We all know the answer is the European Central Bank, the Federal Reserve, and the world's other major central banks. They will provide a flood of cash larger than we've ever seen – even larger than the subprime crisis.

Mohamed El-Erian, co-CEO of PIMCO, wrote a good piece on Europe for CNBC. He discussed the ailing European nation's recently inverted yield curves, when short-term debt is yielding more than long-term debt…

Curve inversions are often seen as indicative of a potential tipping point – when market perceptions of a liquidity problem risk turning into self-fulfilling solvency concerns. As such, there is nothing good associated with last week's curve inversion in Italy, the third largest bond market in the world.

With the two-year interest rate on Italian bonds surging towards 8%, the yield differential with the 10-year ended the week at an inverted 60 basis points. Judging from what has happened in other European economies (namely, Greece, Ireland and Portugal), a prolonged inversion would materially increase the risk of Italy losing market access and having to seek a bailout.

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Some of you know about our charity wiffle ball tournament we do every year.  The Gobble is on the Saturday after Thanksgiving.  We got a nice write up in the paper this year.  Here is the link.

Wiffle Ball Tourney Fun Way to Give Back

We also have injuries every year.  We are all getting too old for running around like kids.  Slade Bridwell was a victim this year.

Chris Purdy does the videos.  We have around 15 of them on Youtube for you to watch.

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Ohio puts 200-pound third-grader in foster care

CLEVELAND (AP) — An Ohio third-grader who weighs more than 200 pounds has been taken from his family and placed into foster care after county social workers said his mother wasn't doing enough to control his weight.

The Plain Dealer reports (http://bit.ly/t68M7D ) that the Cleveland 8-year-old is considered severely obese and at risk for such diseases as diabetes and hypertension.

The case is the first state officials can recall of a child being put in foster care strictly for a weight-related issue.

Lawyers for the mother say the county overreached when authorities took the boy last week. They say the medical problems he is at risk for do not yet pose an imminent danger.

A spokeswoman says the county removed the child because caseworkers saw his mother's inability to reduce his weight as medical neglect.

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In continuation of our welfare state...

Number of N.J. residents receiving food stamps doubled in last four years

The number of New Jersey residents receiving food stamps has doubled in the past four years and is at its highest level in more than a decade as the nation’s still sputtering economy continues to take its toll on the poorest residents of the Garden State, state and federal data show.

As of September, the most recent data released by the state Department of Human Services, more than 400,000 households and nearly 822,000 people were enrolled in the food stamp program, meaning nearly one out of every 10 residents in New Jersey receives assistance.
Larena Reed a 49-year-old Newark resident, has been on food stamps since 2007. The former county worker, nurse and security officer now spends much of her time tending to her elderly mother, and although she doesn’t like being enrolled in the food stamp program, it’s become a necessity.
"All over the economy is so bad. We need these food stamps, there just isn’t enough money or jobs," Reed said Saturday while shopping at ShopRite in Hillside. "I don’t want welfare, (and) I can’t get unemployment anymore. We at least need food stamps to feed our family."
It’s a stark reminder that even one of the nation’s wealthiest states — New Jersey ranked number two in household income last year — is far from immune to the effects of the sustained economic slump.
And although there has been a slight dip in what has been a stark increase in food stamp recipients since 2008, state officials caution that it would be "presumptuous" to interpret the slightly lower increases as a sign of an improving economy. "We would have to see this sustained for several consecutive months to establish any verifiable trend," said Nicole Brossoie, a spokeswoman for the Department of Human Services.
New Jersey has seen large annual increases in food stamp participation rates each month since late 2008, according to the state data. The Department of Human Services releases monthly reports comparing the enrollment in the food stamp program with the same month in the previous year. Since November 2008, the number of households enrolled has grown by double digits year over year and peaked in March when the number of households receiving food stamps was 28.6 percent higher than it had been 12 months earlier. In July, the increase dropped to 18.2 percent before moving north once again to 19.4 percent in September.
Frank Pinto, director of the Morris County Department of Human Services, agreed that it’s far too early to draw conclusions.
"There seems to be signs of things picking up, but until there’s significant job creation in Morris County and throughout New Jersey, you are going to see a large increase in those seeking assistance," Pinto said.

Video Friday

It's Video Friday!  First, I want you to read Mike Krieger's post.


We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years.  It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.

– David Rockefeller

The interests behind the Bush Administration, such as the CFR, The Trilateral  Commission -- founded by Brzezinski for David Rockefeller -- and the  Bilderberger Group, have prepared for and are now moving to implement open world dictatorship within the next five years. They are not fighting against terrorists. They are fighting against citizens.

– Dr. Johannes B. Koeppl

Chancellor Angela Merkel said that Germany is ready to cede some sovereignty to strengthen the euro area and restore confidence in the common currency…“Germany sees the need in this context to show the markets and the world public that the euro will remain together, that the euro must be defended, but also that we are prepared to give up a little bit of national sovereignty,” Merkel said. Germany wants a strong EU and a euro “of 17 member states that is just as strong and inspires confidence on international markets.”

– Bloomberg article November 16, 2011 http://www.bloomberg.com/news/2011-11-16/merkel-says-germany-ready-to-cede-some-sovereignty-to-eu-for-closer-ties.html

Three Card Monti
Just like the con (confidence) game Three Card Monte through which people have been swindled out of their hard earned money in alleyways and street corners all over the world for half a millennium, the previously sovereign nations of Greece and Italy have now officially been placed into the receivership of “technocratic governments” and are now in the final phase of their looting.  It truly is sad to watch these proud nations whose histories form the very core of Western civilization be taken down one by one but what is even more nauseating is watching the corporate media pundits, Wall Street analysts and financial experts cheer the news because it is ostensibly “good for markets.”  First of all, it doesn’t take a genius to see that the people that screw up the most get promoted and advanced in the Western world’s current political/economic structure.  The primary reason for this is that there is a very serious agenda of TPTB and that consists on using crisis to consolidate power in a one-world government, headed by a global central bank that issues a global fiat currency.  People have been saying this on the fringe for decades and have been called conspiracy theorists the whole time but if you look at how things are progressing today you’d have to be asleep to not notice that the guys in charge are completely and totally determined to bring this sick, twisted dream into place.  That is why the agenda moves forward despite the repeated, desperate cries of the citizenry for them to stop.

Let’s take a look at Mario Monti, the “soft” dictator that has been thrust upon the people of Italy by TPTB.  He is a member of the Bilderberg Group, he is the European Chairman of the Trilateral Commission (a think tank founded by David Rockefeller in 1973, see quote at the top) and is international advisor to none other than Goldman Sachs.  This guy was put into place by design.  Anyone in Italy that thinks they achieved a victory in by ridding themselves of Berlusconi you better think again.  You just got the biggest insider, crony financial terrorist around put in charge of your country without having a say in it.  Even for someone like me that expects these things, I am amazed by how badly Italy was just screwed.  Speaking of the unreported coup that just happened in Italy I will let my friend Jared Dillian of the Daily Dirtnap add his two cents.  From his piece today:

So I read recently that Italy wasn’t going to have elections because of “market crisis” or something like that, and I am the last guy who should be writing about this, since I know very little about political systems in any European country, for example, how can you just announce or not announce an election? Aren’t these things on a schedule? So already I don’t know what I am talking about. But I am worried about Greece and Italy that have chosen not to have elections to choose their leaders, I am actually quite concerned about that. You can’t use “market crisis” as an excuse to not hold elections. Even if elections take time and are messy and (most importantly) don’t produce the desired result, it is a part of gosh darn democracy, and if they are going to suspend elections for this, then they can suspend elections for anything. Like, say, pretend Mario Monti is a closet dictator and they just put a guy in there who is never going to hold another election again.

So this is a bad precedent.

This is way worse than a bad precedent but well said my friend.  Oh and another thing.  If you are looking at the gold market and wondering why it is so weak stop wondering.  In my opinion, all you have to look at is Mario “three card” Monti (credit to Gerald Celente for that name).  If I were anyone in Italy that cared I would be checking the gold in the vault every single day.  I have zero doubt that Monti is letting the country’s treasure out the back door by the ton in the name of “global stability” and ECB bond purchases.  The backroom deals that are happening right now at the expense of the people of Italy have got to be completely off the charts.  As I have said many times before, the reason Europe doesn’t announce a solution is because there is no solution.  They also know that the minute they announce massive monetization gold and silver will go no offer and the gig will be up.  This is also why the FED hasn’t announced QE3 despite their desire to do so.  So the strategy is to announce nothing, sell sovereign gold behind the scenes and perform all sorts of market manipulations behind closed doors.  While the sheep in most nations will be completely unaware until way after the looting is over and then they are left with chaos and then a real dictator, the leaders of nations of China, Russia and others know exactly what is happening and will happily take Italy’s gold (and whatever Greece hasn’t already sold without telling anyone).  I love how leaders keep coming out with stuff like “we need to stop freedom of speech and we need to manipulate markets and we need to take your sovereignty away to create confidence.”  The worst part is people actually fall for this crap!  On what planet does robbing someone, taking their freedom away and saying you and your children will be slaves forever inspire confidence?

Germany
How do you say “sucker” in German?  No seriously, I want to know.  I mean how about the quote from Merkel at the top. I mean did David Rockefeller write that speech for her.  I love how politicians are now openly out there offering their countries sovereignty in the name of 50 up points in the S&P500.  I seriously hope the Germans are buying Three Card Monti’s gold for their sake. After all, as Jim Rickards has stated they will never see an ounce of whatever gold they were stupid enough to store in NY.  That’s all I have to say about the Germans.  Ditch the periphery (and that includes you France) or go down with the ship.  Gute Nacht.
 
The Ben Bernank is Superman
Banana Ben Bernanke is superman didn’t you know?  Oh and on the side he prevents all economic downturns from ever happening in a single bound.  It’s true.  Didn’t you hear about the speech he gave in from of the military in Texas (what a sad joke).  Yep, he was quoted as saying the following: "I'm not a believer in the Old Testament theory of business cycles. I think that if we can help people, we need to help people.”  Wait, let’s do that again.  "I'm not a believer in the Old Testament theory of business cycles. I think that if we can help people, we need to help people.”  Good lord this man is a maniac and he is in charge of global monetary policy and the world’s reserve currency.  Good luck to you if you don’t own gold.

As My Friend Tony Greer (if you aren’t getting his emails you’d better start) Likes to Say…Time to Hit the Links!     

The Postal Service just lost $5 billion for the year.  Did you know they employ 670,000 people?  http://news.yahoo.com/postal-loses-5-1-billion-fiscal-2011-232706243.html

Jon Stewart destroys the criminal bankster/political hack Corzine in one great clip.  http://nation.foxnews.com/jon-corzine/2011/11/09/jon-stewart-makes-mincemeat-out-jon-corzine

Finally for the biggest joke of the day….U.S. banks.  This article is a gem.  It talks about how the big financial institutions don’t break out CDS exposure by region because it might scare people.  How about this line.  “As of Sept. 30, JPMorgan said it had sold $3.13 trillion of credit-derivative protection and purchased $3.07 trillion.”  All good I guess!  No one loses.

I DO know what the word for this in English is.  PONZI.  http://www.bloomberg.com/news/2011-11-16/jpmorgan-joins-goldman-keeping-investors-in-dark-on-italy-derivatives-risk.html

Peace and wisdom,

Mike
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I usually talk about fast food restaurant violence.  Here is a Japanese McDonald's commercial instead.

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For those of you who used to watch Ren and Stimpy, it's LOG!

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The Silver Bears are back!  The person that does these cracks me up.

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Triumph, MF Global, and Euro Yields

I'm running behind today so I'm keeping my commentary short.  These articles speak for themselves anyway.

From Stansberry:

*"The marketplace is saying that this is not just an Italian problem, this is now becoming a European problem," Larry Fink, CEO of BlackRock, said on CNBC this morning. "Liquidity is vanishing."

 

We won't dwell on Europe today, as we all know the situation – too much debt, soaring yields, and fragmented leadership. But it's worth noting the opinion of the CEO and chairman of the world's largest asset manager, with $3.3 trillion under management.

 

Fink noted the divergence of triple-A-rated European countries from the benchmark German bund. The spread between the bund and debt from Norway and the Netherlands moved 20 basis points (bps) in one day – the biggest moves in history. Fink also said you need to watch France, the European Union's other supposed iron-clad credit. In the midst of the subprime crisis, France was trading 10-20 basis points off Germany. Today, the spread jumped 23 basis points to 187.9 bps, an all-time record.

 

*Executives of publicly traded companies are notoriously bad capital allocators. They overpay for companies. They make purchases using stock when it's undervalued. They pay cash when the stock is dear. And they repurchase shares at the worst times.

 

It's no surprise that today, U.S. companies are buying back shares at the highest rate in four years. A Bloomberg report attributed the purchases to companies "taking advantage of record-high cash levels and low interest rates to purchase equities at valuations 15% cheaper than when the credit crisis began." Companies have authorized more than $453 billion in repurchases this year, putting 2011 on track to be the third-highest annual total behind 2006 and 2007. Do you remember what happened after 2007?

 

*What would you expect government-owned mortgage giants Fannie Mae and Freddie Mac to do after receiving nearly $200 billion in taxpayer bailouts? Pay huge executive bonuses, of course. Since accepting government money, Fannie and Freddie spent nearly $100 million for top executive compensation.

 

The top five executives at Fannie received a combined $33.3 million in 2009 and 2010. The top five at Freddie received $28.1 million.

 

Fannie CEO Michael Williams and Freddie CEO Charles Halderman each received around $5.5 million in pay last year. And that number could increase when final deferred compensation is set.

 

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MF Global Caused My Accounts to Get Looted

Celente told Russia Today (RT), “I really got burned, I got a call last Monday, I have an account with Lind-Waldock, and I have been trading gold since 1978, and I have a very simple strategy. As you well know, I’ve been very bullish on gold for many years…  So I was building up my account to take delivery on a contract, and I got a call on Monday, and they said I needed to have a margin call.  And I said, what are you talking about, I’ve got a ton of money in my account.  They responded, oh no you don’t, that money’s with a trustee now.”
He said that MF Global “have cleaned out and ruined a lot of people. So maybe the name MF, I’m thinking the first word of MF is ‘mother’ and we could put the other word in there if you use your imagination . . .  because that is what they are doing to everybody.”
Celente is astute and is on record regarding the importance of owning physical gold bullion. The incident shows the increasingly fundamental importance of owning physical bullion (see table above) – either by taking delivery or by owning in personal allocated accounts.

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I love Triumph the Insult Comic Dog!

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Handcuffed Couple Engaged in Sex Act in Back of Cop Car


Meet Tina Marie Arie and Howard Windham.
The Texas duo was arrested on drug charges last Monday after a cop was summoned to a Whataburger, where a male acquaintance of Arie and Windham was passed out.
Arie, 44, who admitted providing the unconscious man with Hydrocodone, was arrested for delivery of a controlled substance. Windham, 30, was collared on a possession rap after he was found with the painkiller Soma. The pair was cuffed and stuffed into a police cruiser for the trip to get booked.
That’s when things got interesting, according to a spokesperson for Montgomery County Constable Precinct 4. When the officer looked in his rear view mirror, he “could no longer see Tina Arie,” who subsequently explained that she was resting her head in Windham’s lap because she was “tired.”
Suspicious, the officer pulled over to the side of the road to further investigate, according to a press statement. He discovered that, “despite being handcuffed behind their backs,” the pair were engaged in a sexual act. Windham’s jeans were undone “and Arie was servicing his exposed genitalia.”
It is unclear how Windham’s jeans were unfastened--or whether teeth were somehow involved in the undoing of said britches. A spokesperson said she was unaware whether the jeans were of the zipper or button-fly variety.
The lewd Houdini act (Lewdini?) abrupty ended when the cop “ordered them to cease sexual contact.” Though Arie and Windham could have faced an additional public indecency charge, they apparently caught a break when investigators opted not to tack on a misdemeanor count to the more serious felony narcotics charges.

DC is Corrupt?

I'm sure a lot of you saw the 60 Minutes on Sunday.  I posted several months ago that it was legal for Congress to use inside information to trade the market.  Washington D.C. is full of self-serving, corrupt members of Congress, who frequently use their power to enrich themselves at the expense of the public.

 

In 2008, for example, Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke held a closed-door meeting warning politicians that a global financial meltdown could occur within a few days, giving them enough time to get their money out of the market ahead of the general public.  Congressman Spencer Bachus, for one, shorted General Electric four times in early September 2008. Between July 2008 and November 2008, he made 40 options trades on GE, in one case nearly doubling his money in two days.

 

In other news, CBS has also recently discovered that presidents lie, that the U.S. has been borrowing money for 40 years, and that Elvis is actually dead.

 

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I've had a hard time finding some new topics.  The news is dominated by Europe, the GOP nomination, and Penn St.  I finally think I've found a few new things.

Wal-Mart reported earnings that were below the analyst estimates.  However, their sales are finally turning around.  I think that is good news for a lot of businesses.  I just hope people are using the money they earn, not credit, for their purchases.

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More violence at McDonald's.  This woman freaks out because they switched to the breakfast menu.

I want my Big Mac

When Shanaya Edgell arrived early yesterday morning at a McDonald’s in Janesville, Wisconsin, she was expecting to order from the fast food joint’s regular menu--Big Macs, french fries, Chicken McNuggets, and the like. Except it was around 3 AM and the restaurant had already switched over to its breakfast menu--hash browns, Egg McMuffins, hotcakes, and the like.
This enraged Edgell, according to Janesville Police Department officers, since she wanted a cheeseburger.
The 22-year-old--for some unexplained reason--turned on her boyfriend, biting him on the arm and tearing off his shirt. Darrell Page, 40, explained to a cop that Edgell “wanted a burger from McDonald’s,” so they drove to the restaurant--only to discover at the drive-thru window that the eatery “had stopped serving hamburgers and was now only serving breakfast.” Edgell, he added, “got upset because she did not want breakfast and only wanted a cheeseburger.”
After driving away, Edgell apparently changed her mind, and directed Page to “return to McDonald’s so that she could get breakfast,” according to a misdemeanor criminal complaint filed in Circuit Court. At this point, Edgell allegedly began striking Page in the face and biting his right arm. Page also told police that when he pulled his car over during the assault, Edgell got out of the vehicle and climbed atop the hood to keep him from leaving.
During police questioning, Edgell confirmed that she became “upset” after discovering that McDonald’s had “switched over to the breakfast menu and…she wanted to order food off the regular menu.” She reported “freaking out over this,” adding that Page was trying to calm her down over the matter of the unavailable cheeseburgers.
When a cop asked why he had spotted her on the car’s roof, Edgell answered, “because I was acting crazy.” After dismounting from the vehicle, Edgell was collared for disorderly conduct.
Pictured in the above mug shot, Edgell is being held in the Rock County jail in lieu of $150 bond. She is scheduled for a court appearance later this afternoon.

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Target Employees Want Store Closed on Thanksgiving

As more retailers try to turn Thanksgiving Thursday into Black Friday — some employees are fighting back.
More than 40,000 people signed an online petition on change.org  asking retail giant Target to reverse its decision to open its doors on Thanksgiving Day — and allow workers to spend the holiday with family and friends.
There are hundreds of comments on the petition supporting retail workers’ rights to Thanksgiving Day off, including this one from Caroline Hemenway: “This is absurd! Corporations are treating their workforce like serfs and fomenting a toxic consumer culture. Pure, unadulterated greed.”
The campaign was launched by Anthony Hardwick, a Target employee from Omaha, Nebraska, following news that the company’s management had moved the standard Black Friday opening time from 5 a.m. on Friday to midnight on Thanksgiving. The new opening time will require employees to arrive at work by 11 p.m. on Thanksgiving Day.
“All Americans should be able to break bread with loved ones on Thanksgiving,” said Hardwick, who works as a part-time parking attendant at a Target store in Omaha. “With the midnight opening, employees like myself will have to leave for work right in the middle of Thanksgiving dinner. We don’t mind hard work, but cutting into our holidays is a step too far.”
“If Target doesn’t reverse its decision and allow associates to spend Thanksgiving holidays with their family, they might suffer from a fast-growing consumer backlash,” Hardwick added.
Will they? After Target, Macy’s, Best Buy and Kohl’s announced plan to open at midnight on Thanksgiving – the biggest fish of them all — Walmart — decided to go even further and open at 10 p.m. on Thanksgiving.

Great Lakes Crossing in Auburn Hills, Mich., will open at 9 p.m. on Thanksgiving and Tanger Outlets in Howell and West Branch, Mich., will open at 10 p.m. on Thanksgiving.
“We’re trying to stay ahead of the curve,” explained Steve Schuknecht, general manager of the Tanger Outlet Center in Howell. “We’ll offer a free premium $10 gift card to the first 250 people in line when we open. We do try to drive traffic that way and create a buzz.”
That may be a bonanza for avid shoppers, but how about all those hard-working retailers who have to leave their families to man the registers? Schuknecht takes it in stride.
“I don’t like the fact I have to come in on Thanskgiving, but when you work in retail it’s the nature of the beast,” Schuknecht said. “I understand the value of it. Our traffic has been tremendous.”
Other major retailers are choosing to remain closed on Thanksgiving Day, citing their employees’ right to a holiday.
“We wanted to give our associates Thanksgiving Day to spend with their families,” said Bill Gentner, senior vice president for marketing at J.C. Penney, in an interview with the New York Times.
Locally, when news first broke about retailers turning Thanksgiving Thursday into Black Friday, Jennifer Hamilton Boisvenue posted on CBS Detroit’s Facebook wall, “No ‘thing’ is worth more than my time whether it’s time relaxing at home or spent with friends for the holiday. Pure insanity all in the name of consumerism.”
Facebook fan Chris Stearns wrote, “And I thought 4 a.m. was too early to get up and go shopping.”

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Did anyone see Obama slamming China for the way they are handling their currency?  He told them to act like a "Grown up" economy.  I'm not sure it's a good idea to piss off your largest debt holder.  Here is China's response

For the United States, it should put its house in order before chiding others. Since the onset of U.S. subprime crisis in 2007, it was the country's domestic economic problems that triggered a disastrous financial crisis that swept the world. Excessive spending for many years has added up debts. Meanwhile, traditional strong industries such as finance and auto were devastated by the crisis, pushing up unemployment.   In face of such serious domestic problems which probably could trigger a new global economic tsunami, many U.S. politicians seemed only to care about how many votes they could get, without having a single thought about what kind of the global responsibilities the country should take. Thus it should come as no surprise that the angry "Occupy Wall Street" protesters are calling for an end to the political tricks in Washington.

Video Friday

It's Video Friday!  This is quickly becoming my favorite day to write the blog.  However, I want to start with an open letter written by CNBC.com's editor, Allen Wastler.  Does anyone remember the last time the media was so scared of a Presidential candidate?  Ron Paul won the CNBC.com poll on the debate at a 75% clip.  So they pulled the poll.

Dear folks,
You guys are good. Real good. You are truly a force on World Wide Web and I tip my hat to you.
That's based on my first hand experience of your work regarding our CNBC Republican candidate debate. After the debate, we put up a poll on our Web site asking who readers thought won the debate. You guys flooded it.
Now these Internet polls are admittedly unscientific and subject to hacking. In the end, they are really just a way to engage the reader and take a quick temperature reading of your audience. Nothing more and nothing less. The cyber equivalent of asking the room for a show of hands on a certain question.
So there was our after-debate poll. The numbers grew ... 7,000-plus votes after a couple of hours ... and Ron Paul was at 75%.
Now Paul is a fine gentleman with some substantial backing and, by the way, was a dynamic presence throughout the debate , but I haven't seen him pull those kind of numbers in any "legit" poll. Our poll was either hacked or the target of a campaign. So we took the poll down.
The next day, our email basket was flooded with Ron Paul support messages. And the computer logs showed the poll had been hit with traffic from Ron Paul chat sites. I learned other Internet polls that night had been hit in similar fashion. Congratulations. You folks are obviously well-organized and feel strongly about your candidate and I can't help but admire that.
But you also ruined the purpose of the poll. It was no longer an honest "show of hands" -- it suddenly was a platform for beating the Ron Paul drum. That certainly wasn't our intention and certainly doesn't serve our readers ... at least those who aren't already in the Ron Paul camp.
Some of you Ron Paul fans take issue with my decision to take the poll down. Fine. When a well-organized and committed "few" can throw the results of a system meant to reflect the sentiments of "the many," I get a little worried. I'd take it down again.
Sincerely,

Allen Wastler
Managing Editor, CNBC.com

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If you didn't read the blog yesterday, I'm replaying the end of Rick Perry's chances for the GOP nomination.

Since I'm on politics, here is Mike Tyson doing a Herman Cain impersonation.  Fantastic!

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Here is what you get when you put your money with a hedge fund or an investment bank.  From Stansberry Research:

Now, let's take the opposite of capital efficiency. What if, instead of rewarding shareholders, a company took the majority of its revenues and paid its executives and employees? You'd have investment banks. Investment banks are notorious for lavish employee compensation, often allocating 50% of revenues to compensation. Some banks set aside even more. UBS, which recently suffered an unauthorized $2.3 billion trading loss, will set aside nearly 90% of its investment banking revenue (revenue, not earnings) for compensation – 90% of revenues…

That's what investment banking is about. It's a compensation scheme. It's like the hedge-fund industry in that way. The entire industry is based not on what service the business can offer, but on how efficiently it can pay itself. Nice work if you can get it, I suppose. But you'd have to be certifiably insane to put your money into the shares of an investment bank. There is no way anyone outside the company can hope to get paid a reasonable share of the profits. It's as though these companies are still partnerships, but they figured they could raise some money by going public, knowing shareholders will never get much.

And if they mess up, good chance they get a bailout...

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The Best Buy Uniform Prank

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The Lonely Island guys are great.  D*ck In A Box was maybe the funniest thing I've seen on SNL.

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Tim Brando impersonating Nutt.  Pretty funny...

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Free BMWs and Goodbye Rick Perry

Did you hear, Italy is broke too?  NO WAY!  Here's a secret, so is Spain, Ireland, and Portugal.  This Euro mess is getting old.  Just blow it up.  Rip off the bandaid.

There I got that out of my system.  China real estate is having problems, they are just giving BMWs away with apartments as an incentive.  Riiiiiiggghhhtttt...

Chinese property buyers get BMW thrown in

By Simon Rabinovitch in Beijing

The sudden downturn in China’s property market is bad news for many global companies, but luxury German carmakers stand to benefit, at least in one city.

In Wenzhou, where house prices have fallen sharply, a real estate developer said that from Wednesday it would throw in the keys to a BMW with each apartment at a new residential complex for the first 150 buyers.

The deal is a sign of the desperation felt by developers in China’s once-booming property market, which has been pounded by government measures aimed at heading off a bubble. The slowdown is a matter of international concern, with Chinese house construction driving demand for commodities and propping up growth in the sputtering global economy.

Chinese developers have been reluctant to cut prices as transactions have slowed this year, but some are finally capitulating after dreadful sales in October. Others, afraid of the stigma of slashing prices, are offering giveaways such as extra garden plots, Louis Vuitton handbags, cruise vacations and now cars.

“Whoever signs a contract and makes the downpayment will be able to drive away in a BMW,” said the sales assistant at Central Mansions, a cluster of brown towers with 868 apartments that have just come on to the Wenzhou market.

“No, it doesn’t mean that sales are bad. It’s just that we’re trying to attract customers,” she said.

Home to legions of entrepreneurs and speculators, Wenzhou’s economy soared when China was flush with cash. But it has been hit harder than most cities by the government’s shift to a much tighter monetary policy to control inflation, as well as the property clampdown.

Wenzhou’s housing sector is now the weakest in the country, with prices falling 1.4 per cent in September month on month. Its smaller firms have suffered from a lack of bank credit, triggering dozens of bankruptcies and prompting the government to take action to boost financing in the city.

But while Wenzhou is an extreme case of the stress in China’s property market, it is certainly not alone. Housing prices have started to fall nationwide, according to the China Real Estate Index System.

That has been tough to digest for many Chinese who had come to believe that house values could only rise. When several developers in Shanghai cut their asking prices last month, homeowners protested, ransacking showrooms and demanding refunds.

Fearing similar fallout, many developers are trying to entice buyers with special deals instead of discounts. The BMWs in Wenzhou cost Rmb300,000 locally, equivalent to about 10 per cent of the price for an apartment, the sales assistant said.

Xiaoyunli No. 8, a development in Beijing that has sent workers to leaflet cars at busy intersections, said there would be no discount and no car for buyers.

“But you’ll get a deal and it will be no problem for it to amount to the tens of thousands. It will be like giving you a car,” the receptionist said.

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So Rick Perry is officially out of the running.  I don't think there is any way he can recover from his "Howard Dean" moment last night during the debate.  I'm glad because I think he would have been worse than our current Teleprompter in Chief.  For those who didn't watch the debate, here it is.  YYYEEEEEEAAAAAAHHHHHHHH!

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I notice gold is going to be down today, but I believe it has resumed it's bull run.  I have several pieces about it today.  As gold soars to new highs against the euro (and eventually the dollar), it's important to keep one major thing in mind…

 

Governments hate gold. They will soon take steps to make it more of a hassle to acquire, transport, and store. They might even, as some suggest, try to tie the idea of gold to terrorism.

 

The idea might be farfetched, but a desperate, bankrupt government is like a dangerous, bankrupt man. Its capacity for surprising stupidity should not be underestimated.

 

From Stansberry Research:

Why do governments hate gold, you ask? It's simple.

 

Gold is the "anti-paper currency." Unlike paper currency, gold has real "inherent" value and cannot be created on a political whim. In contrast, paper money has no real value... beyond the faith society puts in it. People must have faith that the money will remain relatively stable in value over time. They must TRUST the money.

 

Governments around the world exploit that trust to commit a huge fraud against their people. The fraud is that a government can spend incredible amounts of money, take on unlimited entitlement obligations, and support a bloated military empire without bankrupting itself and impoverishing its citizens.

 

Governments hate a soaring gold price because it alerts the world that their massive spending and borrowing plans are out of control. A rising gold price unmasks how all their campaign promises, bailouts, handouts, loans, wars, and entitlement programs constitute a huge fraud.

 

That's why the current set of political leaders – from the socialists in Europe to liberal East Coast Democrats to red state Republicans – will do everything in their power to keep citizens believing in paper money.

 

And since gold is "real money" – with real, intrinsic value – that has been used for thousands of years, it represents a tremendous threat to political elites like Barack Obama, John Boehner, and Nancy Pelosi.

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Jim Rogers thinks there will be a gold bubble years from now, but not until the price goes much higher. 

Gold has many years left on its bull run, but the precious metal will eventually reach a bubble, famed investor Jim Rogers told CNBC Wednesday.

"It will easily go to $2,000 but it will reach $2,400 over the course of the bull run, which has years to run," said Rogers, the CEO and chairman of Rogers Holdings.

"It will end in a bubble when this is over. The way bull markets work is they go up and up and then by the end they turn into a bubble and that will happen to gold.

He said, however, that such a bubble is still years from happening.

"That could be five years, 18 years or six years," he said.

"I hope I am smart enough to sell but when that happens it will probably double." He said that currently he would buy silver instead of gold because it's cheaper on a historic basis.

"I own both, I'm not selling either but if I had to buy one today I would buy silver," he said.

Rogers said he was short stocks because he is not very optimistic about the fundamentals.

"You're better off in real assets than in stocks, at least I hope," he added.

Not everyone agrees with Rogers.

Ken Kamen, president of Mercadien Asset Management told CNBC that gold should not be used as an insurance product.

"I'm not a metal head. All this talk about gold suggests if you have it you have some sort of insurance policy.

Any asset class that fluctuates hundreds of points in a week is not a safe haven. Gold is not a silver bullet," Kamen said.

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Here is an article about some of the ridiculous taxes that are being proposed.  The most absurd is the "Christmas Tree" tax.

 

In the pre-dawn darkness of a chilly LA morning, my day started off with a chuckle. A friend in the reforestation business sent me an email detailing the US Department of Agriculture’s new ‘Christmas Tree’ tax that was approved yesterday.  I thought it was a joke. It wasn’t.
One can only laugh at the absurdity of the government getting involved in such a matter. But it’s happening more and more.
You see, the United States is on a one-way collision course with its financial judgment day; the country long ago passed the historical point of no return– the point at which it has to start borrowing money simply to pay interest on the money it has already borrowed.
Throughout history, countries that passed this point of no return soon defaulted on their debts, entered into extended periods of severe inflation, or both. This is nothing new– the idea of a government going bankrupt is practically as old as the concept of government itself.
Along the way as they slide down the slippery slope of economic calamity, governments typically hit the accelerator by resorting to financial repression; rather than making the economy open and attractive to talented people and investment capital, they instead confiscate, inflate, and overregulate.
These tactics include oldies but goodies like civil asset forfeiture, capital controls, and a host of whacky new taxes. Like a Christmas Tree tax, for example.
Sumptuary laws (regulation and taxes over lifestyle habits) are quite common, dating back to the Renaissance period ‘beard taxes’. If you wore a beard during the time of Peter the Great in Russia, or Henry VIII in England, you paid a tax to the government for the privilege.
There are many modern day equivalents of the beard tax– taxes on cigarettes, mobile phones, vehicles, luxury goods, etc. We should expect the introduction of even more– a national sales tax, an Internet tax, a carbon emissions tax, and a financial transactions tax.
After this, the next mind-boggling category of taxes that will be introduced are ‘social taxes’. In other words, you get taxed on what everyone else is doing… like an anti-terrorism security tax, or better yet, national healthcare where you pay for other people to go to the doctor.
During the Tokugawa period in feudal Japan, they called this ‘honto mononari’. Village peasants were taxed by the local daimyo on the basis of the entire village’s rice yield for that season. Even if you didn’t grow a single grain, you still paid.
Perhaps the most heinous forms of taxes to come, though, are asset taxes. And at roughly $5 trillion in total value, individual retirement accounts (IRAs) are the lowest hanging fruit that the federal government can grab.
It’s not that far-fetched. Argentina has done it. Hungary and Ireland have done it. Even France passed a law last year authorizing the government to use pension fund assets to pay off its debts. And if you recall, the US Treasury raided public pensions this year to tide itself over during the budget debacle.
The next step will be for the government to nationalize a portion of IRA assets. They’ll wait for a severe market downturn that wipes a huge chunk from most IRA accounts, blame capitalism for the failure, and then pass a law requiring that X% of IRA funds be held in the ‘safety and security’ of government debt.
If you think this can’t happen, then I encourage you to do absolutely nothing. Keep your IRA funds parked with a big, conventionally-thinking financial institution that has absolutely no interest in your financial security.
If, on the other hand, you can see the writing on the wall, then one of the biggest no-brainers you can undertake is establishing an Open Opportunity IRA.
This is a structure where YOU take control over your own retirement funds, opening up your savings to a world of possibilities and protecting against government confiscation.

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How many of you wish you had a bailout?  This one is of epic proportions.  Makes me sick...

The government-controlled mortgage zombie Fannie Mae announced a third-quarter loss of $5.1 billion today. And it requested another $7.8 billion in federal aid to stay afloat. The walking dead has now "borrowed" $112.6 billion from the U.S. Treasury. Despite the massive injection of taxpayer funds to date, Fannie Mae CFO Susan McFarland says the entity is working to "limit taxpayer exposure."

Germany - "Not Selling Our Gold"

We know global central banks will work together to paper over Europe's problems. But what about liquidating real assets, perhaps some gold, to help fund the bailout?

"German gold reserves must remain untouchable," Germany's Economy Minister Philipp Roesler said today. Roesler – the head of the Free Democrats, a partner of Chancellor Angela Merkel's coalition – squashed calls from France, the U.K., and the U.S. for Germany to use gold reserves as collateral for the bailout. He also negated calls from the G20 – the gathering of finance ministers from 20 of the world's leading economies – for Germany to post its gold as collateral.

"Germany's gold and foreign exchange reserves, administered by the Bundesbank, were not at any point up for discussion at the G20 summit in Cannes," he said.

One of the world's economic powers is willing to print euros to save its continent, completely debasing its currency, but unwilling to sacrifice an ounce of gold.  The irony is not lost on me.

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Here is a stat I saw posted by Stansberry Research.  Don't tell me Wall Street doesn't love Obama.

Wall Street banks earned more in the first 2.5 years of the Obama administration than they did during all eight years of the George W. Bush administration. 

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Bank Transfer Day seems to have been a success.  For whatever that's worth.

How Much Was Actually Transferred

The founder of Bank Transfer day has claimed that the whole "day" was misunderstood.
The idea was never to have a massive one day move from big banks to credit unions, but rather for the day, November 5, to be the deadline of a broader movement.
And it turns out that the movement actually had some heft behind it...
According to ABC News, In October alone Credit Unions around the country gained 650,000 new customers and $4.5 billion was moved out of major banks.
That is obviously a sliver of total bank deposits, but banks have been sent a clear message.
You can check out the report here, and you'll see what is the most important point. ... The report briefly profiles David Meinert, a Seattle small business owner who, after being denied another line of credit, moved $3 million out of Chase and Bank of America and into a local credit union.
In his own words, he did it because, "That kind of money and my level of business doesn't really matter to them (the banks)."
That's probably not what banks want small business owners around the country to be thinking. Credit Unions, on the other hand, are jumping on the opportunity to grab more customers.
From the Credit Union National Association (CUNA):
“They are conducting advertising campaigns (by themselves or cooperatively with other credit unions), sending ‘switch kits’ to existing members to share with family members or other prospective members, beefing up web sites... email blasts to members, maximizing social media campaigns, putting up banners in lobbies (and on their buildings), offering bonuses to members who bring in new members (and giving bonuses to new members as well)," said Bill Cheney, president and CEO of CUNA.

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You know how a parasite lives off it's host, but eventually kills it?  Welcome to EBT...

 

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I was going to post an article about the sex scandal at Penn St.  The more I read the more I was disgusted and decided not to post it.  I hope there is a special place in hell for people like that.  


We had another earthquake as well last night.  All these weird weather patterns, tsunamis, and earthquakes really make  you think.  Nah, you way Al Gore was right. ;-)

Happy Monday

I hope everyone had a good weekend.  I have a bunch of random news articles today.  First, congratulations to Missouri for joining the best conference in the country.  They officially became the 14th team in the SEC over the weekend.  I hope they become our regular opponent from the east division.  I think it would become a great rivalry.

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This video was made in Quinhagak, Alaska.  For those of you who don't know, that's where we have our fishing lodge.  They have over 800,000 hits already on youtube.  Amazing...

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I've said for a while that there is manipulation in the silver market.  I hope something comes out of this investigation.


“I mean nothing that would jeopardize the furtherance of the investigation.  We do a really poor job of communication at this agency.  People don’t respond to emails, we don’t put out information.  I think this goes back, by the way, to something that we were talking about earlier, are we captives of the exchanges or the banks?”
“but I can tell you based on what I have been told by members of the public and reviewed in publicly available documents, I believe that there’s been violations of the law, The Commodity Exchange Act.”

Bart Chilton - There is Manipulation in the Silver Market
With many lawsuits having been filed against JP Morgan for alleged manipulation of the silver market, today King World News interviewed CFTC Commissioner Bart Chilton.  Commissioner Chilton was incredibly candid throughout the entire interview.  As an example, when asked if there is nefarious activity (manipulation) going on or that has gone on in the silver market, Chilton responded, “I think there has been, Eric.  I talked last year about this, I urged the agency to say something.  I just think it’s fair that after so long, on an investigation that you’ve publicly announced, that you give some sort of update.”
“I mean nothing that would jeopardize the furtherance of the investigation.  We do a really poor job of communication at this agency.  People don’t respond to emails, we don’t put out information.  I think this goes back, by the way, to something that we were talking about earlier, are we captives of the exchanges or the banks?

I think by and large we haven’t been a very retail, consumer that is, focused agency.  Here’s what I can tell you about silver, Eric, I have been contacted, for years, by some folks that I think have a lot of credibility.  It’s one thing when they say this and that is going on and I check it out and maybe some of it’s true and maybe some of it’s not. 

But when people email me and say, ‘You watch the market (silver) between 9:15 and 9:45 tomorrow and it’s going to tank or it’s going to do this or it’s going to do that.’  I hold on to it and I watch the market and what they say happens, and I’m not saying this always happens, but it happens even 50% of the time, 60% of the time, there’s no way that doesn’t raise my antenna, like major, electric antenna goes up.

So to me that was the reason why I thought we needed to look at this (silver), investigate it.  That’s why I called for it, Commissioner Dunn also called for the investigation, but I can tell you based on what I have been told by members of the public and reviewed in publicly available documents, I believe that there’s been violations of the law, The Commodity Exchange Act.

They’ve taken place in the silver market and I think any such violation, of course, should be prosecuted to the full extent of the law.  I believe there has been repeated attempts to influence prices in the silver market.  And there’s been fraudulent efforts to persuade and deviously control the price.”

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I was be furious if I lived somewhere for 30 years and the government decided I now needed to move my house.  That is happening in the Lake of the Ozarks.

MO Residents to Move Their Homes

CAMDENTON, Mo. (AP) -- Nearly every year, Patsy Riley has gotten unsolicited offers for her house on Missouri's Lake of the Ozarks with its spectacular views of tree-lined bluffs and its ample shoreline, but she never wanted to leave. Now, she and hundreds of her neighbors wonder what will become of their homes after a federal agency declared that many structures built close to the lake may have to go.

The Federal Energy Regulatory Commission, citing restrictions on private developments around dams, says thousands of residences, decks, patios and boathouses appear to encroach on land belonging to the hydroelectric project in violation of federal regulations.

The announcement has triggered panic in the area's lakefront communities and led to a growing battle among regulators, a utility company, land attorneys and the state's congressional delegation. Officials say they are searching for a way to settle the issue without mass evictions.

"We are mad as hell and we're not going to take it anymore," said Riley, who has lived at the lake for more than 30 years and estimates about half of her neighborhood is threatened.

The dispute pits the government's rules for hydroelectric projects against the potential vagaries of land records and private transactions that go back more than 80 years. Riley and other property owners say they have legal deeds to their land that permitted construction. The agency says it has regulations protecting the lake's recreation, scenery and environment against development.

The winding, 93-mile-long Lake of the Ozarks was created in 1931 by the Bagnell Dam and Osage hydroelectric project, and has become a playground for water sports enthusiasts and vacationers. The thickly wooded shores and hills are dotted with houses, resorts and weekend cottages.

The problem with the lakefront property arose when Ameren Missouri, the power company that owns the project, applied to the Federal Energy Regulatory Commission for a new 40-year license to operate the dam. A required shoreline plan noted that some structures had been built over time on some of the utility's property for the dam, in many cases when Union Electric Co., an earlier form of Ameren, was the owner. How the property was sold was not clear. But the utility had no problem with many of the structures.

FERC objected, however. "In the majority of cases, the existing non-conforming structure/encroachment should be removed in a timely manner and the site restored to its pre-existing conditions," the agency's ruling last summer said. For hardship cases, regulators said Ameren could propose allowing some homes to remain temporarily or could seek an adjustment in the property's boundaries.

Homeowners say the ruling leaves their property worthless.

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We all know the extent of the jobs "recovery" in the US.  Here is a chart comparing the jobs situation in every recession since WWII.  This is so much worse than any other.

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The bizarre for the day involves 60,000 bees living in the walls of a dead man's house.

Woman Finds Father Dead in House Full of Bees

MIAMI -
A woman found her father dead inside his home with thousands of bees living in the walls.

The man's daughter found him in the upstairs bedroom of his home at 129 Northwest 15th Avenue in Miami on Saturday.

The man was renovating the home, which neighbors said had been in the family for decades, for his daughter.

They added that the cause of death has not been determined.

"We're not sure if he fell, had a medical condition or if it was bee stings," said Miami Fire Rescue Lt. Ignatius Carroll.

Willie Sklaroff, who runs a bee eradication company, said at least 60,000 bees were living in the walls of the home.

He plans to return to the home in the coming days to remove the bees.

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I just thought this was interesting.  The highest ranked teams seem to win by the largest margins.

Video Friday

It's almost the weekend.  Which means it's time for Video Friday.  First, I'm posting something serious from Mike Krieger.  Everyone should read it.

Power concedes nothing without a demand. It never has, and it never will.
– Frederick Douglass

Fairly quickly, Corzine accumulated a massive net long sovereign debt position that eventually totaled $6.3 billion, or five times the company's tangible common equity as of the end of its fiscal second quarter. I'm told Corzine's move was highly controversial within the firm. But no one overruled him, maybe because after all, he was Jon Corzine. In a mark of just how much Corzine mattered to the market, in early August, MF Global filed a preliminary prospectus for a bond deal, in which the firm promised to pay investors an extra 1 percent if Corzine was appointed to a "federal position by the President of the United States" and left MF Global.

– Did accounting help sink MF Global? http://in.reuters.com/article/2011/11/01/idINIndia-60255420111101?type=economicNews

It Takes 5 Minutes
Alright I am going to kick things off with Europe and get that out of the way as quickly as possible.  Nothing has changed and absolutely nothing has been accomplished.  There is no “solution” to the crisis that will not result in massive pain, confusion and wealth decimation.  The reason is patently obvious.  At least half the continent is completely and helplessly bankrupt.  There are only two outcomes to the entire situation.  Either the sovereign debts are written off aggressively and the banking system declared insolvent and restructured or the ECB decides to turn on those printing presses to the tune of trillions and destroys the purchasing power of the union in Zimbabwe-like fashion.  People will read this and think I am exaggerating .  The phrase “it takes 5 minutes” keeps running through my head because all it takes is a small amount of time to see the situation for what it is.  I am not that smart.  This is obvious.  The scary thing is that it is abundantly clear that the vast majority of U.S. investors have not bothered to take the 5 minutes necessary to understand how extreme and binary the outcomes to all this is.  Their clients will suffer massively in the months and years ahead as a result of their laziness and lack of macro curiosity.

Remember, there is a very good reason that no “definitive solution” has been announced.  There is none.  What the Eurocrats are trying to do is pretend that lifelines to bankrupt nations will be enough to tide them over until strong growth allows them to wiggle out of the problems.  This has already been proven a failure after they tried it last year as Greece is now worse than ever.  So there are two choices and no one can be totally certain which outcome it will be but either one will result in massive wealth destruction.  The first choice is the one I prefer (hard defaults and a declaration of insolvency of the banking system followed by restructuring) because it will place the majority of the losses and pain on the elites that led us to this ruin and who own most of the financial assets in the world.  The second option (massive inflation and loss of purchasing power) will kill the poor and middle classes as well as the wealthy but financially illiterate.  The ruling oligarchs will be fine (until the masses come for their heads) as they understand what they are doing and will move to protect their assets.  Since the same criminal, crooked and morally bankrupt financial oligarchy is still pulling the strings worldwide you have to assume they will opt for choice number two, although unforeseen social and political events could throw a wrench into their twisted plans.  Gold is the only asset that should outperform in either scenario.       

Before I leave Europe, there is a must read article posted this week on Zerohedge that everyone needs to read and understand.  http://www.zerohedge.com/news/how-us-banks-are-lying-about-their-european-exposure-or-how-bilateral-netting-ends-bang-not-whi

MF Global
What is there to say about this debacle that hasn’t been said already.  The main point I want to make is that the collapse of this firm and its crony capitalist CEO Jon Corzine fits in perfectly to one of my overriding themes regarding the current fourth turning we find ourselves in.  Namely, that the celebrated elites and “financial wizards” will be disrobed, disgraced and proven once and for all to be the frauds they always were.  If nothing else, the story of MF Global should make it crystal clear to all observers that the biggest problem the world faces today comes back to a small cadre of financial engineering misfits that continue to be recycled all over the world’s positions of power.  Most of them have Goldman on their resume or at the least JP Morgan.  I just find this hilarious considering that I don’t think the clowns at any of these banks could make a dime without government help.  When I write this I do not mean to insult individual rank and file people at these firms because I happen to know some of them to be capable and decent; however, come on guys.  How can you feel good about your paycheck or trades when you are just a ward of the state that  in reality owns you souls.  Let’s see how you do without the government backstop.  We just saw how Corzine did.      

So Corzine was as “insider” as you get and he blew his firm to smithereens because he made the mistake of working at a firm that was allowed to fail.  He represents everything that is ruining America today.  Guys like him are everywhere and their reputations and firms will all be plunging into the ground over the next several years.  The best part about this whole story is how Corzine was apparently being considered for Treasury Secretary of the United States.  I mean this doesn’t surprise me at all, but it should be a warning to everyone around the world that it is people exactly like Corzine that make all the important decisions in the world today.  While it takes a long time to run entire nation-states into the ground don’t you worry they are working hard and are well on their way.  You’ve got to read this gem http://mobile.gothamist.com/2011/07/05/corzine_to_obama_if_i_raise_enough_1.php

The State of the Union (and Financial Markets)
The one thing I feel more confident in than anything else right now is that the U.S. consumer is about to roll over.  The most interesting dichotomy lately has been the extremely depressed consumer confidence numbers (and falling) coupled with resilient consumer spending.  I believe this is about to reconcile itself via much lower rates of consumption.  Let’s start off with today’s Bloomberg Consumer Comfort reading.

Bloomberg Consumer Comfort Reading 10 Year Chart



This chart tells us two things.  First the number was the second lowest on record.  People aren’t lying on these surveys.  They are being screwed and they know it.  The second observation is that it is clear there is basically no bounce since the recession supposedly ended.  Why?  Because we are in a depression.  Sadly, it is a depression in which Central Bankers are doing everything in their power to transfer more and more purchasing power to the elite financial oligarchs that already own everything via money printing.

Despite the horrific consumer confidence numbers and the recent stats showing a new food stamp participation record in the United States where we have about 15% of citizens needing government assistance to survive, spending has held up pretty well.  How has this happened?  Well, it seems the main reason is a decline in the savings rate.    

U.S. Personal Savings as a % of Disposable Income 10 Year Chart



Ok, so what we see is that as confidence has dropped so has the savings rate as people scramble to maintain some semblance of a lifestyle that is gone forever.  Many will point to this and say, well look at the 2005 period where savings went even further south and kept the economy afloat.  Why can’t this happen again?  There are two reasons I think it won’t.  The main one is that in 2005 housing prices will still at their peaks and people thought they were much wealthier than they were due to these “assets.”  As a result, they were willing to dip into their savings.  That is not the case today and therefore I think people will only dip so far into their savings.  I think people are right here right now about to cut back.  The other reason relates to commodity prices.  Although the important ones have all have all shown large year-over-year increases, they have been more or less flat sequentially as of late.  I believe that is about to change and if the governments of the world continue to prop things up and sustain unsustainable consumption we will see oil and other commodities make another meaningful move higher in the months ahead.  Since I think a large percentage of U.S. investors are totally clueless about the real state of inflation and the consumer, once spending starts to get cutback it will catch markets completely flatfooted.  I think this is a near-term event.  As always, we shall see.    

Peace and wisdom,
Mike

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I can't imagine how much money this guy spent on Hot Wheels tracks.

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This is made by the same person that did the 100 Best Movie Insults from last week.  Strong language alert.

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This last video is totally random, but interesting.  It's a song made out of nothing but Mike Tyson quotes.

Market Run By Computers

I have a meeting out of town today so I won't have much commentary.  I saw this article and it reminded me why we seem to have 2% swings every day.  It's definitely not fundamentals.

Citi: Bear Market Rally Behind Us, 1,000 on the S&P Ahead

While we are the last to put much weight in the predictive power of technical analysis, lately it has become all too clear that the only thing more worthless than technicals is fundamentals. Which unfortunately means that with the lowest common denominator (and marginal price setter) in the market being robots, in turn programmed by 20 year old math Ph.Ds who only know charts, it may be time to revise our skepticism. Enter Citigroup's Tom Fitzpatrick, who together with Goldman's John Noyce, are the two best sellsiders in this particular field. In short, neither has much good to sayl in fact when it comes to near-term bearish sentiment, it will be hard to find someone as pessimistic as Fitzpatrick, even among the Janjuahs and Rosenbergs of the world. Citi's conclusion from a just released note should be enough to scare anyone who believes that the bear market rally started just about a month ago will persist: "While we respect the October monthly close on the S&P 500, we did not close above the 12 month moving average...we believe the bear market rally is behind us and anticipate a move towards the 1,000-1,015 target over the weeks and months ahead." And while charts will never be a good guide as to what words may come out of G-Pip's mouth next, with so much market action these days being purely backward looking, we would urge caution.
From Citi:
What to make of the monthly close on the S&P 500

• October 2011 saw the largest monthly gain on the S&P 500 in almost 20 years (since December 1991)
• We also saw a bullish outside month posted in October
• Does that mean everything is fine and we are set to go higher? No
• While the monthly close may seem constructive it alone is not enough. The charts below instead suggest that the downtrend has resumed and a move towards our 1,000-1,015 target area lies ahead

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More restaurant violence.  I just don't get it.

Police Arrest 3 Men in Machete Attack

PATERSON, N.J. (CBSNewYork) — They’ve got their men.
Police said Wednesday they’ve arrested the trio caught on tape attacking two people, including chopping at one victim with a machete. The Paterson Police Department turned to social media in its hunt for the attackers, posting the stunning video of the attack on its Facebook page.
WARNING GRAPHIC VIDEO: Click Here To Watch (Must be logged in to Facebook to view video)
The incident took place on Sept. 10 at the U.S. Chicken restaurant at 194 Straight St. Police said the “vicious assault” began just before 4 a.m.
There were two attacks, said Paterson Police Capt. Heriberto Rodriguez.
“Both attacks were unprovoked, as far as we could see. Nothing was taken in the second attack,” Rodriguez told CBSNewYork.
In the first case, the victim, seen on the video wearing a white shirt with a black insignia on the top left corner, was attempting to walk out of the restaurant when he was confronted by two men in the doorway. While they talk, police say Omar Villota, 22, comes up behind him and pistol whips him in the back of the head. The trio tumble into the street.
Things then go from bad to worse.
A few minutes later, the group comes tumbling back into the restaurant, this time struggling with a second victim. The second victim is seen on tape being repeatedly punched in the face, allegedly by 20-year-old Johel Gomez. Police said Tyree Seegers, 22, then started hacking at the second victim with a machete.
According to police, Seegers is seen on the tape hacking at the victim at least 14 times with the machete. During one of his swings, he chops into Villota, who is continually pistol-whipping the victim. Seegers nearly severs Villota’s right arm, leaving a blood trail that the cops used to track them down.

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All the Hog fans saw that Wade was suppended for the game this weekend because of a hit on a Vandy punt returner.  It was vicious but the public outrage is ridiculous.  Here is the hit.

 

What I want to know is why this player from Bama didn't get suspended.  The guy lowers his helmet right into the returner.  Oh yeah, he plays for Alabama. 

Lastly, I'm sick of the attacks on Arkansas by ESPN.  Or should I call it the Home Depot Network.  Petrino left Atlanta years ago, get over it Arthur Blank.



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This is just funny.  I'm not sure I want Todd's job.

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Here is another reason why Greece is still hosed.

 

The latest rumblings are all about how the IMF won't be paying out a dime more to Greece unless it gets its act together and resolves this referendum issue in one way or another.
The question is: How long does Greece have to pass the referendum, get the money, and pay off its debts.
This chart should answer that.
Sent to use from Erwan Mahe of OTCexGroup, it shows when Greece has some big debt payments due. Obviously, you can see why Greece can't wait until next year.
12/29 looks like a pretty certain drop dead, if not before that.