Paul Krugman Clarifies the Outcome of the NJ Gubernatorial Race for Us: Spend More! Spend More! Spend More!

Abstract: Paul Krugman juggles fruits from different bins in a circus performance that rings of Joel Gray in Cabaret with the political roles reversed. He ‘analyzes’ the New Jersey fiasco and finds hidden diamonds in the outcome for the left. He grinds away on the current authorized hurdy-gurdy tune that says the Jon Corzine wipeout was not a reflection of Obama. He rejects any reference to restoring the economy with the indicated tax cuts and spending reductions, the items that, strangely, propelled Chris Christie[1] to glory and forced the tax-grubbing parasite Corzine to be humiliated with only 30% of the vote. The Krugman fairy tale surges on with iridescent tinsels and kazoo honking and terminates with a rare condemnation of Obama for not spending enough, a rare criticism for the dedicated. He then offers the prediction that the use of “…economic half-measures may haunt Democrats for years to come.” My conclusion, agreeing with Krugman in this rare instance, is that Obama may become the Second Peanut after Jimmy Carter’s sterling performances. The baboon is scrounging around for diamonds again.

Perusing the New York Times (that is known affectionately as the Walter Duranty Papers[2] in honor of their most beloved Pulitzer Prize winner) may be likened to solving a crossword puzzle where the words tax or spend are the only candidates that seems to fit almost anywhere both vertically and horizontally. There are apparently no examples of cost-cutting or financial sobriety to be found in the pages of the NYT in the past few years, or decades. The clarion chants celebrating the electric nostrum of the inevitable defeat of the  evil Tax-cut Zombies[3] ring like ceremonial gongs in the press room of this bankrupt newspaper. The answer to all social problems is more government, higher spending and higher taxes.

For today’s example of metastatic government we study the teachings and counsel of one Paul Krugman[4][5][6][7][8] as his works provide the political and thus economic  impetus for effortlessly  fleecing the cognitively disnimble. The ‘poor’ must be serviced [they provide the votes!!] and ‘educated’ as to how to be handsomely rewarded for their political support. The current loss of Jon Corzine in New Jersey requires some redaction and purification so as to position the left to benefit politically. Christie threatens to cut taxes!

As an example of advanced propaganda we must firstly suffer through a meaningless analogy to get to the core of his message:

“Remember those Republican boasts that they would turn health care into President Obama’s Waterloo? Well, exit polls suggest that to the extent that health care was an issue in Tuesday’s elections, it worked in Democrats’ favor. But while health care won’t be Mr. Obama’s Waterloo, economic policy is starting to look like his Anzio.”[9]-- Obama Faces His Anzio

 By Paul Krugman Op-Ed Columnist Published: November 5, 2009 [Emphasis is mine in all quotes.]

We are reminded of sampling blunders and outright fraud here when we study the aftermath of voting using ‘exit polls’ that clearly showed in one case that John Kerry was several points ahead of George Bush. [10][11] Nevertheless, such false or misleading ‘information’ is readily translated into ‘facts’ and those ‘facts’ can be used to assemble The Ultimate Truth and that is that.

The Truth unfolds for us:

“True, the elections weren’t a referendum on Mr. Obama. Most voters focused on local issues — and those who did focus on national issues tended, if anything, to go Democratic. In New Jersey, voters who considered health care the top issue went for Gov. Jon Corzine by a 4-to-1 margin; Chris Christie won voters who were concerned about property taxes and corruption.”-- Obama Faces His Anzio

Another sampling issue stretched to its breaking point. The national polls strangely differ[12] as they seem to show a 55 /35 or a 57/37 view against health care ‘reform’ and its exorbitant costs. The conundrum here is that Krugman fails to recognize that a national poll is merely an ensemble of local views, but such facts fly in the face of certain narrowly defined political objectives so the mandate it to cherry pick the results that fit the current tall tale. That is good liberalism.

Then a brief caveat before resuming the current disinformation charge:

“Yet there was a national element to the election. Voters across America are in a bad mood, largely because of the still-grim economic situation. And when voters are feeling bad, they turn on whomever currently holds office. Even Michael Bloomberg, the mayor of New York City, saw his supposedly easy reelection turn into a tight race.”-- Obama Faces His Anzio

Did he just contradict himself??  No matter. Apparently, the NYT cannot seem to observe the current bad mood, from listening to reptiles like Nancy Pelosi’s lies[13] or to the freak show bunglers in the White House who are not rescuing our economy while proposing and promising to do so.

A foreboding?

“This bodes ill for the Democrats in the midterm elections next year — not because voters will reject their agenda, but because all indications are that a year from now unemployment will still be painfully high. And Republicans may well benefit, despite having become the party of no ideas.”-- Obama Faces His Anzio

This no idea theorem references the essential tax cuts and spending cutbacks and unavoidable  high interest rates that are customarily used to unwind the  typical sorry socialist mess that people like Peanut Jimmy have thrust upon us. These ideas are basic capitalism thus are anathema to the drooling left.

Stimulus amount redaction—more should have been wasted.

“Thus the stimulus bill fell far short of what many economists — including some in the administration itself — considered appropriate. According to The New Yorker, Christina Romer, the chairwoman of the president’s Council of Economic Advisers, estimated that a package of more than $1.2 trillion was justified.”-- Obama Faces His Anzio

Oh, I thought she said this level would ‘work’ and turn around the economy and unemployment levels by July? How about 3 trillion or 5 trillion? It is not too late!

History: Stimulus Act of Jan 2009

“An Act: Making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for the fiscal year ending September 30, 2009, and for other purposes.”[14] [Emphasis is mine in all quotes.]

The Christine Romer Prophecy:

“…, even with the large prototypical package, the unemployment rate in 2010Q4 is predicted to be approximately 7.0%, which is well below the approximately 8.8% that would result in the absence of a plan.”[15][16]

Oh, gee—did the unemployment rate soar beyond 10% barely an hour ago??[17] Do Romer and Obama look like jerks yet? Or how about spending on clunkers[18] or other follies? We spent $16,000 per car? Was that enough? Why not just use printed money to give cars to loyal Democrats!

Did Romer recant?

“Most analysts predict that the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009,” Romer said. “By mid-2010, fiscal stimulus will likely be contributing little to growth.”[19]— Christine Romer Oct. 22

From a previous blog: The current outrage is the Clunkers Calamity where our government went out to ‘stimulate’ car sales and spent $24,000 per car on an average car cost of about the same price as that number. [20][21][22] Extending this insanity to the housing problem we learn that “…the Brookings institute estimates that the $8,000 credit equates to a cost to the taxpayer of $43,000 per home.”[23] This is money wasted for political reasons. We must search for reasons why our government is so stupid and how they arrive at these ‘programs’ and what mentally tortuous paths they traverse as they concoct such wonders. And we do not think we have idiots in our government?[24]

This guy has no shame:

“And more is needed. Yes, the economy grew fairly fast in the third quarter — but not fast enough to make significant progress on jobs. And there’s little reason to expect things to look better going forward. The stimulus has already had its maximum effect on growth. Even Timothy Geithner, the Treasury secretary, admits that banks remain reluctant to lend. Many economists predict that the economy’s growth, such as it is, will fade out over the course of next year.”-- Obama Faces His Anzio

A criticism of Obama bursts forth??

“If the Democrats lose badly in the midterms, the talking heads will say that Mr. Obama tried to do too much, this is a center-right nation, and so on. But the truth is that Mr. Obama put his agenda at risk by doing too little. The fateful decision, early this year, to go for economic half-measures may haunt Democrats for years to come.”-- Obama Faces His Anzio

What may haunt the liberals is the high inflation and massive debt that this guy has piled up to soak our kids with. Obama may become the Second Peanut[25] and trash his phony socialist party for a generation.

It has been stated in more explicit terms than printed here that:

 Liberalism is like probing a baboon’s sphincter for diamonds. There is little chance for success, but there are several opportunities for anger and frustration. [26][27]

There ain’t no diamonds there Dorothy—but the levels of frustration of the left soars.

“I told you so!”—Future comment by Hillary Clinton.

Losers deserve to lose. "Life is tough, tougher if you're stupid."
-John Wayne

Losers deserve to lose. "Life is tough, tougher if you’re a leftist or one of their victims."--rycK

rycK

Comments: ryckki@gmail.com

Quoth the Old Red Lady of the NYT: Mirror Mirror on the Wall! 

Do I see My Party and Myself in My Writings?

Abstract: There is a cliché in politics that goes something like this: we soon become exactly what we criticize or words to that effect. This notion is amplified today by the New York Times. Maureen Dowd performs a decent hack job on herself with a raft of sticky aphorisms and amusingly boomeranging hypocritical harangues while chucking spears at Rush Limbaugh. Maureen morphs into Maureen and tries to defend Obama for his political blunders like she has done to him in the past. Her Beloved tried to intervene in two important gubernatorial races and boogered both of them. Dowd cannot seem to comment on this and focuses on Rush. Hypocrisy, thy name is Dowd and thy mirror is our witness.

We are always entertained by the well-scripted but mostly slanted scribblings that appear in the NYT—aka the Walter Duranty Papers[1]-- as they attempt to ‘form public opinion’ with stale propaganda that surges unerringly along its destined path despite the news.[2] Upon pressing new and sweeping ‘changes’ in our economy and society  that ultimately lead to socialism, inflation, debt as they appear to redouble the  losses of our  Constitutional Rights not to mention our wealth.  This has been the mission of this turn-of-the-crank screed extruder for many decades so we need not bother to search any of their written works for a trace of any substance that might conflict with their sacred, to them, mission. They are mired in the leftist stooge tank and when it comes to ‘thinking outside the box’ they can no longer even identify a box.  Their box collapsed in 1989 along with their Beloved USSR.

Today, we are treated to a rather tautological, highly propagandistic and a nasty screed by the Old Red Lady[3][4][5] of the Old Gray Lady[6] [Dah Dowdy Dowd]. [7]  She takes it upon herself to instruct us in criticism?! A stage whisper suddenly materializes:  [Does Maureen cook her hair in the microwave??[8] Where does that color come from? As a chemist, I know that some chemicals that color can eat through glass. [9]]

She chucks her first spear at Rush:

“In those days, he [Rush Limbaugh] called himself a “harmless little fuzzball.” He’s a lot less harmless now. I went on to columny [A clever play on the word Calumny[10] ed], as my pal Bill Safire called it, and Rush went on to calumny. [Emphasis is mine in all quotes.]

As he and Sarah Palin conduct their auto-da-fé of moderate Republicans — “Moderates by definition have no principles,” he told his radio audience on Monday — Limbaugh is more than ever the face of his party, as Rahm Emanuel said.

He’s also the mouth.”[11]-- Who Are You Calling a Narcissist, Rush? By Maureen Dowd Op-Ed Columnist Published: November 3, 2009

Note the word association stratagem here coupled with a name association gem! Here we are led, in a propagandistic manner characteristic of the NYT, that Rush is an evil mud slinger and Sarah Palin is his co-conspirator. This is good propaganda but is it not judged hypocritical when she uses calumny to point out her examples of calumny? Such are the little tricks that keep her readers giggling in their tutus. This is so much fun.

A bit of veiled advice to her Fürher Whom She Doth Not Question:

“President Obama will have to step it up on jobs and fixing the deficit if he wants to block conservatives from stoking the anger of Americans who only see a recovery on Wall Street, especially given the Republican sweep in top races on Tuesday night.”-- Who Are You Calling a Narcissist, Rush?

As if all these trillion dollar stimuli and cash for clunkers[12] and such have not failed? We have a ‘recovery in progress’ so what be the need for some stepping up? And, why should the greedy whites who “who cling bitterly to their 401(k)s[13]” feint anger as they are the ones who hoard wealth from the poor and marginalized? They are guilty of their sins of the past.

More name dropping:

“But the tactics of Limbaugh, Palin, Cheney & Fille are more cynical: They spin certainty[??], ignoring their side’s screw-ups, and they exploit patriotism, labeling all critics as traitors.”-- Who Are You Calling a Narcissist, Rush?

The ‘all’ clause here is the standard leftist nostrum that any remark made against one of their enemies (or victims) is directed to all humanity. So, when we speak of criminals we must be criticizing the plight of the entire poor masses or other such nonsense. But, to be a bit analytical here, can we wonder if some of our critics are traitors? We still hear that the Rosenbergs were ‘innocent!’ Was Tookie innocent? Mumia? Dan Rostenkowski or Cold Cash Jefferson?

Some traitors:

“It was okay for John Kerry [14]to talk with the Communists in Paris and try to defeat the US in the Vietnamese war.  It was okay for Harry Hopkins to be a paid Soviet Stooge for the Russians and sell of Eastern Europe to Stalin or for the Rosenbergs[15] to be paid Soviet spies [his code name was ‘liberal’—how fitting!] who then sold our nuclear secrets to the Communists. That is okay. It is fine that Mumia is a cop killer and can have routine radio broadcasts from his cell. [16] [17] [from a previous blog[18]].

No traitors in this list of liberals?

One of the difficulties in creating plastic  messiahs  from floor sweepings and other base substances and the similar attempt to create other but lesser ethereal beings for less important work [Hillary Clinton] is the tricky task of  preventing the audience from giving off a few Bronx Cheers or snickers when The One boogers the load and looks like a fool. In New Jersey, the YoYo Corzine[19] broke the state with his moronic tax mongering and corruption and he was tainted with slime and summarily embarrassed in the polls.  We had a repeat of this in the good state of Virginia that just swung back from dark blue to hot red. The six visits of The Anointed One to rescue his New Jersey lackey were embarrassingly futile and made His Greatness look like a gibbering fool trying to rescue his cell phone from deep in the sewers looking something like Old Weird Harold on speed. This was so faultily constructed it seems to bear the Mark of Shrum[20], the leftist operative with the highest number of political failures so far, but the future is approaching quickly and we can expect to see more of these gems.

Of course the Old Red Lady did chide her Beloved a time or two[21] in the past when she detected him straying from the Path and advised him to ‘unwind.’

“It’s hard not to be who you are, but it’s doubly hard to be who you’ve strived not to be. Obama not only has to figure out how to unwind with a Bud. He has to rewind his life.”[22]-- This Bud’s for You By Maureen Dowd Op-Ed Columnist Published: May 4, 2008.

And, a poisoned spear for Hillary:

“The lioness of Chappaqua is hot on the trail of the Chicago gazelle, eager to gnaw him to pieces, like a harrowing scene out of a George Stubbs painting.”[23]-- This Bud’s for You

She continues to dump on Rush:

“In an interview on “Fox News Sunday With Chris Wallace,” Limbaugh accused the president of trying to destroy the economy — yes, the same economy that W. came within a whisker of ruining.

“I have to think that it may be on purpose,” Limbaugh said, “because this is just outrageous, what is happening — a denial of liberty, an attack on freedom.”

We could inquire whether his ‘porkulus[24]’ is really fixing up the infrastructure or creating new jobs[25] 0r strengthening the currency or just wantonly plunging us deeper into debt. That sounds like destroying the economy[26] to me even if it is unintentional and he is just foaming at the mouth while trying to understand basic economics and finance. I am surprised it is not worse given his history and training when coupled with the losers he has surrounded himself with. [27][28] Is Obama really an Afro-Leninist, an ideological racist[29][30], a consummate liar[31] and a Marxian advocate or stooge[32]? He acts like one. He might become our new Hoover and bury the leftists for a generation.

The Old One runs out of venom:

“But on Sunday, he ripped the president for having “an out-of-this-world ego,” for being “very narcissistic,” “immature, inexperienced, in over his head.” (Isn’t immaturity scoring OxyContin from your maid?)”

“It gives new meaning to pot, kettle and black.”

It is so Greenwich Village-like[33] to end her screed with what is doubtless a vain valiant entwine on the most hackneyed cliché in literary history. But, with the news and circumstances and shrummery abounding in this circus we have to give Maureen some slack as she has little to work with this week.  Things will worsen and Rush’s predictions are coming true.

 rycK

Comments: ryckki@gmail.com

Buffy the Bozo Buffett Blows his Baloney Wad in Rails? He must have Another Sweetheart Done Deal in the Bag.

There was a famous scam that continues to be reinvented and it goes like this: Somebody calls you up and gives you a guaranteed bet on some stocks. This will work! When the stock goes up, as he promised, he calls back and gives you a second pick and makes the same guarantee. When that pick goes up he calls you back and offers you the Big One. Only a fool would pass up this new tasty morsel so the sucker buys in and the stocks drops.  What has happened is that the scammer had made phone calls to several thousand people using a dozen different stock picks and only called back the marks on the list when their particular assigned stock hit. Same process was used for the second round to provide ‘proof’ that this guy was a stock wizard. The third pick, with very few remaining marks in tow was actually some phony off shore shell where they cashed promptly in the sucker’s money and fled the Caymans. This is a boiler room art form. I wonder if Berkshire Hathaway is playing this game with our government.

A more appealing version of this scam is to observe that some people can apparently just pick the best stocks from a market array and that there must be something innate or magical about this person given their ‘record.’ Might I recall for discussion one Joseph Granville[1] for all of you to wonder about who ‘controlled’ his own markets with his recommendations and then he picked the wrong direction and the whole scam went suddenly crashing down. His Granville Market Letter produced average loses of 20% per year for a quarter century. [2] Nevertheless his calls produced remarkable results on April 22, 1980 (+4.05%) and on January 6, 1981. That was all the ‘proof’ that he needed. Jean Dixon was like that and gained fame with a single prediction about JFK. We must survey a broad picture of all the picks from the celebrated pickers and perform some analytical work or we invite disaster under the conception of the "the Jeane Dixon effect,” which refers to a tendency to acknowledge a few correct predictions while ignoring a larger number of incorrect predictions.”[3] “She predicted that World War III would start in 1958 over some offshore Chinese Islands and that labor leader Walter Reuther would run for president in 1964 and that the Russians would land the first man on the moon.”[4]

Buffy the Bozo does not go so far as to run a freak show “…featuring a trained chimpanzee … could play Granville's theme song "The Bagholder's Blues," on piano” in his works. But the investment world has never had  a sage that lasted very long as we find from  Elaine “Go-Go “Garzarelli’s predictions of the 1987  stock market crash[5], (along with me). She has done poorly since.[6] I have done better. She called “it” weeks before the crash and I sold out on Wednesday of the week before the Black Monday[7] crash. Her crystal ball must have gone murky as her predictions since then have been spotty. See footnote.[8] She did pick Lehman and Bear Stearns for 2007 and 2008 stock picks, but nobody is perfect. My record is spotty too with picks like Texas Instruments at $86 and Oracle at the wrong time and then Sun. My Arriba pick did soar from $25 at IPO to some $145 with a couple of splits along the way producing a $14,000 return on a measly 25 shares that I paid 525$ for including commissions and a flip or Red Hat was fun—owing the stock for 11 min and making $1100 dollars on the opening of the IPO. But, what heck—that was just luck. There is a limit to luck and sooner later we must find that the ‘luck’ is manufactured if it looks too promising and that is the subject of today’s blog: nobody is that good or that lucky in the long term.

Not to get us too far off the track with personalities we need to make something clear: nobody can predict the markets and most take a big hit along the way like Garzarelli and Granville and many others have done.  The fund manager for my old fund Wellington Fund lost money for 11 years in a row since its inception in 1960 and he is considered one of the best. I can give a wide margin for allowing for guesses for most stock pickers until somebody wants me to dive under a steaming freight train for a nickel or two. The current euphoria about rails by Buffett apparently ignores the salient facts that the unions in league with the Democrats poisoned the rail business in the last 150 years and the whole mess crashed and morphed in the soggy stinky messes now known as Amtrak and Conrail. They were regulated to death by politicians and unions. Union feather bedding and work rules and the mandate that the rail companies keep running empty passenger cars wrecked the business.[9] The worthless Amtrak system has never made a profit since 1970. Nada—zip and their cars stink, are windy and drafty and cold and the food is crap. Here is some political history on train wrecks:

From the New York Times of July 6, 1970. we read:

“THE nation's largest railroad succumbed last week to a lethal combination of politics [Time  blames Nixon here--ed], tight money, mismanagement and fumbled Government rescue efforts. A federal court ordered the tottering Penn Central Transportation Co. into a bankruptcy reorganization.”[10]

Does this sound familiar?

“Many Congressmen and Senators [read Democats here too ed.] questioned whether the Government ought to come to the aid of any private company—large or small—with a record of sloppy management.”[11] [Emphasis is mine in all quotes.]

Now, we spring the trap: More money is apparently need to infuse this corpse so Buffy has decided to split his Class B shares 50:1 to get more “ordinary investors” to buy in. Does this sound like a Three Card Monte game[12] yet?

“Buffett's decision to conduct a 50-for-1 split of Class B shares of his Berkshire Hathaway Inc lowers the price of entry for ordinary investors who long found it prohibitively costly to buy the stock”--More people now likely to invest with Buffett

Tue Nov 3, 2009 3:15pm EST 

Well, there is a sucker punch for you. Can you follow the peanut as it bounces along between the magical walnuts?

He might, but he ignores the economic fundamentals here.  But, he could do this with union help and the Democrats of course, groveling stooges to unionism. The several states where he now owns right of ways are bound to see this as a tax target and the regulators and such will pile on new restrictions and fees and such as what happens when the bandwagon comes to town with a trailer full of fresh straw and all the hookers and cops and politicians grab a sausage sandwich, some beer and jump in the pile for a great ride. He can probably get around these hurdles with some political assistance and make a pile. My view of this wreckage is that Buffett is betting [or is assured] that he can make money in spite of the unionism and regulatory costs and the offensive sputum of the EcoNazis who will rail and bawl over his heavy rail system and cite light rail options instead. He must have a deal cooking here.

Buffet is also in a scam to buy tax credits from the phony and bankrupt Fannie Mae, a disgraceful plundering of the US taxpayer. Partnered with his usual crony Goldman Sachs [involved in some complicated preferred stock deal[13]], he is apparently indirectly seeking a tax subsidy with TARP money.

“The credits are virtually worthless to Fannie Mae and require the company to take losses each quarter as their value declines. Companies such as Berkshire Hathaway and Goldman Sachs could use them to offset federal tax expenses.” [14]--Buffett Joins Goldman in Bid for Fannie Mae Tax Credits NOVEMBER 4, 2009

The Bozo has other ‘deals’ with the government or some of their TARPies[15]:

[1] A deal with MidAmerican Energy and Constellation Energy (CEG). This is a nukie pooh Power Company and is allied in some way with the French.[16]

[2] He paid “$5 billion for Goldman Sachs (GS) preferred shares that pay a 10% dividend.” Isn’t that sweet! Another TARPIE Sweetie! [Emphasis is mine in all quotes.]

We currently get 0-0.25% from government bonds. How sweet? Or, how sour??

[3] His company “agreed to buy $3 billion of preferred General Electric (GE) stock. This stock pays a generous dividend of 10%. On top of that, Berkshire gets the option to buy $3 billion of GE common stock at $22.25 per share, well under the current trading price of around $25 a share.”

[4] “Wells Fargo (WFC) said early Friday that it would pay 0.1991 of a share of common stock in exchange for each common share of Wachovia Bank (WB) in a deal worth $15B. Berkshire Hathaway is the largest shareholder of WFC. That's a whopping potential for over $30B in deals with up to $16B in cash.” A quickie 100% deal falling something short of Hillary Clinton’s 1000X cattle futures deal.[17] Isn’t Wachovia a TARPie?

This is not the program of an ‘enlightened’ investor this is what a political crony does. There is the stench of insider trading swirling around here.

Somewhere buried deep in this rail road junket is some artificial sweetness that has yet to surface. To think that he can make money in an industry polluted by unionism and a myriad of state laws and his offensive energy systems that burn oil and coal for their electricity and fuel is an insult to the Green Weenies[18][19][20][21][22][23][24][25][26][27][28]. They will kep silent only if they are bribed.

Buffy is not an ‘investor’ --he is a political opportunist [like the Harpy—e.g.-- “…one of the winged spirits best known for constantly stealing all food from Phineas [the “government”, ed]”] who swims in the sleazy political latrines of corruption. I suspect these are just fixed insider deals and have little to do with ‘investing.’

I think this railroad gig is a fait accompli and the taxpayers will provide him with huge profits. Buffet’s chimp, played by Goldman Sachs, is playing new versions of The Bagholder's Blues” for the suckers and taxpayers and I think the taxpayers are going to wind up holding an empty bag.

rycK [a 5^th generation Californian in exile]

Comments to: ryckki@gmail.com

California Offers “Build American Bonds” to Unknowns. Their Credit Rating was Just Slashed.

Abstract: California continues to grovel in the political alleyways like a diseased hooker in need of a quick fix with a frantic clarion call for money from anywhere and everywhere. The social and moral composition of California has been dissipated into a sickening puddle of tears, debt and drugs while their skill and reputation for handling finances are the basis for some of the funniest jokes in the universe. Besotted and mired in a drug infested financial inferno with hoards of swarming illegal aliens milking every possible benefit they have hit the very bottom of the Pit.  They now proffer “Build American Bonds” to some unknown investors probably looking for a sweetheart deal. They must continue to probe for co-suckers to partner with them as their noisy public misery surges on, punctuating the atmosphere with a cavalier style resembling Zimbabwe. They glubber forth so they can borrow even more money at even more exorbitant interest rates knowing that they have no way of paying back the loans and all the while shouting out the mandate that  they have no plans to cut spending—the financial disease that initiated this mess. They are busted along many dimensional lines. Only a fiscal earthquake can jolt these lunatics back into financial reality and that will be a general default. That disaster will happen soon because the number of suckers on this planet is fortunately limited and our currency is threatened with massive inflation.

The End of California

We all know that the duly elected Assembly and their wonderful governor ‘agreed’ on a ‘path forward’ to ‘compromise on the budget.[1]’ California[2]descends into oblivion.[3] is finished as a society in moral, social and economic terms.[4][5][6][7]  Polluted with drug-crazed Marxian puppets parading as those who ‘represent the people,’ the Sacramento Legislature cannot seem to find ways to arrest their psychotic spending sprees that will sink the state in massive debt for decades. We know that the Golden State has had some nasty encounters with financial reality in past years, but now they face The Abyss and what is their plan? Beg for money from somewhere else—any where!!

“Nov. 3 (Bloomberg) -- California is responding to investor demand for more of the state’s Build America Bonds by offering about $750 million today after a so-called reverse inquiry that is more common for corporate issues than for municipals”[8]-- California Answers Call for $750 Million in Build America Bonds By Jeremy R. Cooke and Andrew Frye November 3, 2009

But, what and who support this reverse inquiry?? People like Soros or Buffett looking for another sweetheart deal? “Despite all of its credit and supply issues, there’s at least one buyer” with a “sizeable” appetite.  Neither California nor Citigroup, in brief statements yesterday, identified the investor or investors who asked the state to create a new issue of its taxable debt.

“Reverse inquiry is much more common in taxables,” Fabian said in an interview. “It doesn’t happen a lot in munis.”

Is this like dithering with a hooker for a special price?

“Taxable bonds due in April 2039 with a 7.55 percent taxable coupon interest rate traded to customers at prices to yield about 7.2 percent yesterday, Municipal Securities Rulemaking Board trade data show.”-- California Answers Call

This was precipitated, we learn from the ‘experts,’ like Paul Krugman[9] of the Walter Duranty Papers, [10] who advised  us that the constitutional limits to taxation in California are the root problem to their debt and deficits and we need to raise taxes![11]

Wasn’t this predictable?? Higher taxes will bring us prosperity. But, when did this leftist puppet ever suggest anything other than more taxes and bigger government for any problem? Never.

So, the grubby quest for more funds morphs into a sickening spectacle of tears and threats and howls that match many of the elements of the Divine Comedy[12]. We have passed the first two cantos [first was the drug/political culture and the second canto was the uncontrolled social spending] in this epic and, now having passed Purgatorio, we enter the Inferno. We have to acknowledge that Paradiso is lost forever in a social swamp infested with sloth, sodomy and drug addiction. This dismal failure was predictable and is actually a desirable outcome for the elitists of the Left.[13] But, not to suggest that they have no designs on the wealth of others, as the rest of us are their targets, we must study this nonsense in some detail:

Now, let us do some thinking here. Some idiot wants to put out 750 million dollars for some bonds in a state with a lowered credit rating that mature in 2039—a mere 30 years at 7.2% and taxable to boot?? Who can this be and since Citi[14] was fixed up by TARP we wonder if there is an end-run play here and the ‘inquirer’ is attached to or cohabitating with the federal government. Here is the phony co-signer theory advanced by someone. 

Previous pleas:

“California is not asking for cash, like the tens of billions given to AIG, General Motors or Morgan Stanley. (MS) Instead, the state with the worst credit rating in the nation is asking that Washington act as a sort of co-signer on the state's borrowing, to be backed up with money from the Troubled Asset Relief Program.”[15]-- Judy Lin [Emphasis is mine in all quotes. All quotes in this blog reference the Judy Lin article unless stated otherwise.]

This is like “sort of “selling your little sister into slavery so you can keep your sick mother fixed up with the latest in designer drugs and living in the trendy new  green ambience financed with some expensive carbon cap receipts and weekly trips to Mexicali. 

And an echo from L. A.:

“"We are not asking for a bailout," said state Assembly Speaker Karen Bass, a Los Angeles Democrat.”We're asking for the federal government to step in where commercial banks can't this year because of the crisis within the financial industry.””—quote from Assembly Speaker Karen Bass

Now, you have a commercial loan or one that is disguised to look like one.

“"I think if the federal government can go to the aid of major financial institutions, particularly when state and local governments face short-term liquidity issues, I think helping them out is very relevant," Frank said.”-- Barney Frank [Backside Barney[16]]

Short-term?? Liquidity?

Here are the major problems with this:

[1] California is a dead beat and frantically scrounging for more and more loans and cannot avoid a default.

[2] 750 million is peanuts in their 15 billion dollar deficit—soon to balloon to 30 billions and beyond.  This cannot help much.  California will default anyway. 30 years is so far out that 750 million might not buy even one lid of grass in the not-s0-far future.

[3] California’s credit rating is poop grade now as of today just a few hours ago: “Moody's Investors Service downgraded California's general-obligation bonds to A2 from A1, the New York-based agency announced Friday.”[17]

[4] There is no hint that the union-dominated state Assembly, a maudlin parade of Marxian stooges, will cut spending especially on their phony ejukashon where 40% of tax revenues are destined to be spent.

[5] People are wildly fleeing the state as debt soars and the ‘fees’ increase in lieu of taxes and control by the Green Weenies[18][19][20][21][22][23][24][25][26][27][28] now known as EcoNazis because of their dictatorial and psychotic conduct and thus  becomes intolerable. Tax revenues will crash and, of course, they will have to raise more money. What they really want is to get their claws into property taxes.

[6] We generally don’t find suckers of this base cognitive level unless we look to the federal government. Something is phony here.

California will soon have matched Somalia’s social structure and Zimbabwe’s financial success. Evabody gonna get well from cheap grass and rich.

This is hopeless. Move out!

rycK [a 5^th generation Californian in exile]

Comments to: ryckki@gmail.com

The Bubble that will Burst Higher than all Previous Bubbles: Depression Looms as the Dollar Crashes.

Economics, formerly known as the queen of the social sciences[1], is now so complicated that few can understand the process. But, this cognitive barrier does not prevent political activists from distorting the destined outcome of some financial misadventure as they can readily identify and enlist enough lackeys and stooges to rally and assemble a noxious chorus[2] to sing the praises of such an action. Thus we can assemble a quorum to merrily sing the praises of our destruction. That is happening now as we print money with no end in sight. The ‘rich’ will pay for all this.

The current case of rising asset prices has been analyzed by Nouriel Roubini[3] , as is his custom, and his predictions are usually correct. In his article entitled “Mother of all carry trades faces an inevitable bust” we learn this:

“Since March there has been a massive rally in all sorts of risky assets – equities, oil, energy and commodity prices – a narrowing of high-yield and high-grade credit spreads, and an even bigger rally in emerging market asset classes (their stocks, bonds and currencies). At the same time, the dollar has weakened sharply, while government bond yields have gently increased but stayed low and stable.”-- Mother of all carry trades [Emphasis is mine in all quotes.]

Normally, the value of some asset is calculated from its intrinsic value[4] which involves a time element and some projection of the asset’s return in a given time span. We saw wealth evaporate in the housing bubble[5] recently where the intrinsic value was distorted by demand that was driven by explosive credit and government propaganda about ‘affordable’ housing.  Fortunately, we have the law of supply and demand that cannot readily be repealed by governments and that law controls prices and supply. Our current liquidity circus has stimulated demand for assets way beyond their intrinsic values and this will correct itself in a bubble[6] when demand collapses.

“But a more important factor fuelling this asset bubble is the weakness of the US dollar, driven by the mother of all carry trades. The US dollar has become the major funding currency of carry trades as the Fed has kept interest rates on hold and is expected to do so for a long time. Investors who are shorting the US dollar to buy on a highly leveraged basis higher-yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms; they are borrowing at very negative interest rates – as low as negative 10 or 20 per cent annualised – as the fall in the US dollar leads to massive capital gains on short dollar positions.”-Mother of all carry trades

The carry trade[7], which is a return or a profit from just holding an asset, allows for big profits as the dollar loses value thus the intrinsic value of equities and such are temporarily distorted until a massive correction is forced by supply and demand as the carry trade becomes negative. The bubble then bursts. This is all driven by shorting the dollar and that increases the supply of dollars and accelerates the downward spiral.

“Let us sum up: traders are borrowing at negative 20 per cent rates to invest on a highly leveraged basis on a mass of risky global assets that are rising in price due to excess liquidity and a massive carry trade. Every investor who plays this risky game looks like a genius – even if they are just riding a huge bubble financed by a large negative cost of borrowing – as the total returns have been in the 50-70 per cent range since March.”-- Mother of all carry trades

This is what happens when governments start to just print money. The investment and financial structure of the country is distorted and people find out how to make huge profits off of the money swimming around in every yard and sidewalk.

A reversal in dollar weakness would require that traders then cover their short positions and:

“But one day this bubble will burst, leading to the biggest co-ordinated[sic] asset bust ever: if factors lead the dollar to reverse and suddenly appreciate – as was seen in previous reversals, such as the yen-funded carry trade – the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated[sic] collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments.”-- Mother of all carry trades

This one, in my view, is just another of several looming bubbles. The phony mortgage mess we had stimulated a false demand on housing and that collapsed as people could not pay their mortgage payments. The next bubble will be whatever our phony government attempts to pump up and that is now: jobs, green products, subsidized cars and other follies. This all stems from a belligerent attitude on finances by our elected officials. They seem to believe that if wealth is lost by homeowners who should never have been given loans to buy houses then we can just print money and ‘forgive’ these excesses with do damage to the economy and the ‘rich’ will take the haircut. The ‘rich’ don’t have that much wealth.

The total world gold supply is thought to be about 158,000 tonnes[8] we find and could be contained in a cube with dimensions of less than 20 meters to an edge. At 32,000 ounces per ton[9] we get about $5,308,800,000,000 valuation on the world’s supply at the current price of $1050 in US dollars. Thus 5.3 trillion dollars represents only ½ of our national debt of 12 trillion and is very small compared to our imputed debt from Social Security, Medicare and the 8 or so trillion dollars printed up by the Federal Reserve which might hit 100 trillion according to some estimates. Note also, that the world debt is much higher than this so it appears that gold is one of the few assets that can withstand an explosion in the money supply. Now, what does the supply and demand law tell us about the future price of gold in US dollars? Thus, there must soon be a rush to convert worthless dollars to tangible assets like gold or real estate or other physical goods.

But, our bubble may be off in time and the next big bust may be Japan. Their current debt to GDP ratio is currently 218% and will rise and our US debt is about 85% [=12/14] and rapidly rising. :

"The debt situation is irrecoverable," said Carl Weinberg from High Frequency Economics. "I don't see any orderly way out of this. They [Japan] will not be able to fund their deficit. There will be a fiscal shutdown, a pension haircut, and bank failures that will rock the world. It is criminally negligent that rating agencies are not blowing the whistle on this."[10]-- It is Japan we should be worrying about, not America. Japan is drifting helplessly towards a dramatic fiscal crisis. By Ambrose Evans-Pritchard Published: 5:33PM GMT 01 Nov 2009 

But, the hokum chuckers[11][12] in our government will just raise taxes and ‘soak the rich’ and continue on spending all the merry while. That is what parasites do: they feed off the host until it dies.

When this bubble bursts the debris and residue will litter the moon.  

rycK

Comments to: ryckki@gmail.com

The New Obama Diplomacy: Clinton and Her Nasty Mouth Soars Beyond Dignity, But Does She Have a Point?

Diplomacy is supposed to be the communication device that is conducted with aplomb, dignity and respect although there is no  cited directive in any history books where diplomacy is presumed to effective. We read from Wikipedia that “…diplomacy is the employment of tact to gain strategic advantage or to find mutually acceptable solutions to a common challenge,[1]” and that definition seems to be out of date. We need some diplomacy that works.

We can search for examples of how certain wars were averted, or, on the contrary how diplomacy obviously failed to prevent our Civil War, WW 1, 2 and Korean and Viet Nam and all that. The only conclusion that makes sense is that diplomacy as currently being practiced is nonsense. A careful reading of the 1957 book:  War and Aftermath 1914-1929 by Pierre Renouvin enlightens us on diplomacy. [2] This source gives us an objective view of the workings of ‘diplomacy’ from the early teens to 1929 and the results obtained from the expenditures seems to show that nearly all the talking and mumbling went for naught. All the meetings and subsequent treaties and erratic whooping about preventing Germany from getting her revenge after Versailles and restraining Japan in the Pacific went for nothing.  For the case of the Middle East, we have had decades of such performances leading to exactly nothing of substance. We need some diplomacy that works.

Perhaps Secretary of State Mx. Hillary Clinton has broken new diplomatic barriers and soars enlightened in the very ethers as she seems to have tossed out the older rules and inserted some kind of trendy Arkansas Dialogue. Some think she is abrasive and insulting; I wonder if she is a herald for a new era of communication among states. She may hold the key to effective diplomacy.

But, the definitive proof is contained in the end result, if we fall back on reason, and assess cause and effect mechanics before the fact. Then, we can test out her new methods. Here are some problems to be solved:

Problem: The Pakistanis cannot find Al Qaeda anywhere in Pakistan.

Solution: “I find it hard to believe that nobody in your government knows where they [Al Qaeda] are and couldn’t get them if they really wanted to,” she [Hillary Clinton] added. [Emphasis is mine in all quotes.]

“Maybe that’s the case; maybe they’re not gettable. I don’t know... As far as we know, they are in Pakistan,”[3]-- Al Qaeda leadership in Pakistan: Hillary Clinton

Freshly translated and presented here, but only broaching the delicate fringe of the new frontier of the new method of reading scripts I have selected to use: the ‘Unspoken Words Theorem’--so aptly invented by Maureen Dowd the Old Red Lady [4][5][6]of the Old Gray Lady[7] [e.g. Quoting Dowd: “But, fair or not, what I heard was an unspoken word in the air: You lie, boy!”[8]]—and here it is!

[Fair, or not], we seem to be able to deduce [translations in blue] what Hillary was actually saying:

“Listen you drooling bumpkins, you have terrorists everywhere in your backward country, your military and even your intelligence services so you look like idiots when you say you cannot neutralize them.  Don’t lie to us!”

And more:

Problem: Not enough taxes

“The percentage of taxes on GDP (in Pakistan) is among the lowest in the world... We (the United States) tax everything that moves and doesn’t move, and that’s not what we see in Pakistan,” she said.”

“You are so stupid not to tax your citizens into oblivion as we are going to do. Where have you been? Do you realize how much money you are ignoring? My co-conspirator and I have made more than 100 million dollars from our corruption and bias and you are cutting off some of that future income. ”

Problem: Population

“You do have 180 million people. Your population is projected to be about 300 million. And I don’t know what you’re going to do with that kind of challenge, unless you start planning right now,” she said.

“Do anything, including total or even nuclear war, to reduce your population and think about free condoms for all citizens. You are screwing yourselves into poverty. “

Perhaps she even hints about the zero-growth notion of spreading around AIDs or malaria in Pakistan as this was very successful in Africa. Capital punishments from committing sodomy under the law in your state might help lower the count also.

And, on tax and population concerns merged we might read:

A combined solution to two problems:

“Raise the taxes as high as you can and make food scarce and expensive and then institute 100% inheritance taxes and then, for the grand move, withhold healthcare for the oldies[9] and this will moderate your population increases and put more money into the hands of politicians.  Those are useless mouths anyway.”

I think being ‘frank’ with the tribalistic protosimians in the Middle East might just shake up the jar and reassemble the marbles. The Clintons have shown us hitherto unknown and unexplored nuances in political conduct such as erotic cigar diddlings, syntax conundrums (like calling taxes “investments”) and how criminality can be excused by political acclaim.

But, there are tacky potential backlashes to her new methods such as her relaying the Obama message that:

“On a one-day Middle East visit on Saturday, Secretary of State Hillary Clinton endorsed Israel's view that settlement expansion in the occupied West Bank should not be a bar to resuming negotiations -- contradicting the Palestinian position.”

The reply:

"The negotiations are in a state of paralysis, and the result of Israel's intransigence and America's back-pedaling is that there is no hope of negotiations on the horizon," Abbas spokesman Nabil Abu Rdainah said.--[10] Palestinians accuse U.S. of killing peace prospects

“Go ahead and build new homes in the settlements because the Jewish lobby was very generous to us in the last election so we owe you one.”

There is a bit of perceptible conflict here among the players from Hillary’s message, but we should give these comments some time to soak into the soft and minuscule neuronal sets of our Middle Eastern friends. It may simply be a soggy residual from the older form of ‘diplomacy.’ Who knows?

Only time will tell, but with Hillary on the scene there are bound to be fireworks and other pyrotechnic illuminations. She is not exactly ‘neutral’ on any topic so we expect her to carve out new ruts in the phony nostrum called diplomacy and might even accomplish something even if it is war.

rycK

Comments to: ryckki@gmail.com