W.C. Varones

B-Daddy takes one for the team

2012-01-24T19:26:00.000-08:00

I couldn't bear to listen to another State of the Union from that crony capitalist looter.

Fortunately, B-Daddy did, and gives us the Cliff's Notes here.

Remember what the dormouse said...

2012-01-24T17:46:00.000-08:00

Feed your head!

Scientists discover how psychedelic mushrooms work.

Within a minute after subjects got an infusion of psilocybin, researchers said, scanners that plot blood flow within the brain detected a sudden drop in activity in the medial prefrontal cortex and the posterior cingulate cortex, two areas of the brain that appear to be key in "grounding" us in reality. These areas also are key nodes of the brain's newly identified Default Mode Network, which springs to life when our minds wander.

Thus untethered, the brain's sensory regions are free to soar. Subjects reported unusual changes in their visual experiences, including geometric patterns, distortions of space and size, and dreamlike perceptions. They reported that their thoughts and imaginations wandered, their perceptions of time were changed, and sounds they heard brought on vivid images -- a mingling of sights, sounds and thoughts such as those experienced by people with synaesthesia. And researchers noted that the more suppressed the observed activity in a subject's posterior cingulate cortex and medial prefrontal cortex, the more potent the sensory distortions the subject reported.

Hockey Goalies are Cool

2012-01-24T06:21:00.000-08:00

Tim Thomas didn't join his Boston Bruins teammates to meet Premier Obama at the White House yesterday. He released this statement:

"I believe the Federal government has grown out of control, threatening the Rights, Liberties, and Property of the People.

This is being done at the Executive, Legislative, and Judicial level. This is in direct opposition to the Constitution and the Founding Fathers vision for the Federal government.

Because I believe this, today I exercised my right as a Free Citizen, and did not visit the White House. This was not about politics or party, as in my opinion both parties are responsible for the situation we are in as a country. This was about a choice I had to make as an INDIVIDUAL.

This is the only public statement I will be making on this topic. TT"

The Silicon T-bill

2012-01-22T07:42:00.000-08:00

Bernie Madoff's consistent returns earned him the nickname "the Jewish T-bill." While 10% - 12% annual returns were too good to be true, the market does offer some nice, consistent yields now and then.

Back on Thanksgiving 2008, we pointed out that you could buy a very well-known semiconductor stock with a rock-solid balance sheet with a dividend yield of 4.5%, paying more than long-term Treasuries. That stock is now up 91% since then, and the dividend has increased three times and is now 50% higher. If you'd bought then, you'd be earning 6.75% on your cost in addition to nearly doubling your principal. Even at the current price, the stock still yields more than 30-year Treasuries, and dividends look set to continue increasing while Treasury coupons remain fixed at anemic levels. (Note: the balance sheet is no longer as rock-solid due to an acquisition and the opportunistic issuance of a modest amount of long-term debt at attractive yields to fund stock buybacks.)

While the hyperinflation we feared back then has yet to materialize, the U.S. fiscal and monetary situation has continued to deteriorate. We recently crossed 100% debt/GDP (even excluding off-balance-sheet liabilities like Medicare, Fannie/Freddie, and state and local pension obligations). To put that in perspective, here is a historical chart.

The only other time in history we had these debt levels was at the end of World War II, where we'd sent millions of people and machines halfway around the world to fight global fascism. How did we get out of it then? Two ways: 1) immediately stopping the deficit, and 2) serious inflation.As soon as WWII ended, the US cut the deficit to zero and actually ran surpluses in the late 1940's and early 1950's.

In contrast, four years after the financial crisis, we are still running trillion-dollar deficits, and both Obama and the cowardly Congressional Republicans plan to run deficits at least in the high hundreds of billions as far as the eye can see.

As for inflation, did your high school history teacher tell you about the inflation the US used to erode the value of the debt?

Year	Inflation
1946	8.43%
1947	14.65%
1948	7.74%

That's a cumulative devaluation of 34% in three years! Patriotic investors who had bought war bonds yielding low single digits had their faces ripped off.

It took large doses of both fiscal austerity and inflation to get us out of 100% debt/GDP in the 1940s. Given that neither political party is proposing even modest fiscal responsibility now, eventual inflation is the closest thing to a sure bet I can imagine.

As we said back in 2008:

Do you buy the Treasury bond that will be destroyed with inflation, or do you buy the chip stock whose products, assets, and dividends will rise with inflation? We at the W.C. Varones Blog would buy the chip stock all day long.

WWII war bond buyers lost money to help their country fight fascism. Are you willing to lose money to prop up the Obama regime?

Internet: 1, Congressional Rats: 0

2012-01-21T17:54:00.000-08:00

Ed. note: I wrote this last night. Normally I'd just cross-promote with a link but WCV suggested I repost in full here for your reading pleasure. Enjoy. WCV, I know how you feel about the excessive swearing on your site but A) you told me to do this and B) if anything warrants cussing people out, it's this. Remember, kids, the Internet never forgets. - JDA

Hey, listen to me and listen good. NEVER FORGET. Never forget the assholes in Washington who wanted to build a Great Wall of America across the Internet. Never forget the proposed Cybersecurity Act of 2009. NEVER EVER WHATEVER YOU DO, don't you dare forget. That's all I ask.

Ding dong, the witch is dead (for now):

After getting panned on the Web, Hollywood’s blockbuster anti-piracy bill imploded like a box-office bomb this week — and Washington realized the Internet’s “series of tubes” now may have more clout than the vaunted motion picture and music industries.

By the time Senate Majority Leader Harry Reid (D-Nev.) called a time of death on the PROTECT IP Act on Friday, it already had been trampled by a stampede of one-time supporters anxious to distance themselves from the political threat of a Web-driven uprising against the bill. Lying alongside it: The House’s Stop Online Piracy Act.

Here is a convenient list of 60 companies that supported SOPA (remember these names, people):

List of Supporters: H.R. 3261, the Stop Online Piracy Act
60 Plus Association

ABC
Alliance for Safe Online Pharmacies (ASOP)
American Bankers Association (ABA)
American Federation of Musicians (AFM)
American Federation of Television and Radio Artists (AFTRA)
American Society of Composers, Authors and Publishers (ASCAP)
Americans for Tax Reform
Artists and Allied Crafts of the United States
Association of American Publishers (AAP)
Association of State Criminal Investigative Agencies
Association of Talent Agents (ATA)
Beachbody, LLC
BMI
BMG Chrysalis
Building and Construction Trades Department
Capitol Records Nashville
CBS
Cengage Learning
Christian Music Trade Association
Church Music Publishers’ Association
Coalition Against Online Video Piracy (CAOVP)
Comcast/NBCUniversal
Concerned Women for America (CWA)
Congressional Fire Services Institute
Copyhype
Copyright Alliance
Coty, Inc.
Council of Better Business Bureaus (CBBB)
Council of State Governments
Country Music Association
Country Music Television
Creative America
Deluxe
Directors Guild of America (DGA)
Disney Publishing Worldwide, Inc.
Elsevier
EMI Christian Music Group
EMI Music Publishing
Entertainment Software Association (ESA)
ESPN
Estée Lauder Companies
Fraternal Order of Police (FOP)
Gospel Music Association
Graphic Artists Guild
Hachette Book Group
HarperCollins Publishers Worldwide, Inc.
Hyperion
Independent Film & Television Alliance (IFTA)
International Alliance of Theatrical and Stage Employees (IATSE)
International AntiCounterfeiting Coalition (IACC)
International Brotherhood of Electrical Workers (IBEW)
International Brotherhood of Teamsters (IBT)
International Trademark Association (INTA)
International Union of Police Associations
L’Oreal
Lost Highway Records
Macmillan
Major County Sheriffs
Major League Baseball
Majority City Chiefs
Marvel Entertainment, LLC
MasterCard Worldwide
MCA Records
McGraw-Hill Education
Mercury Nashville
Minor League Baseball (MiLB)
Minority Media & Telecom Council (MMTC)
Motion Picture Association of America (MPAA)
Moving Picture Technicians
MPA – The Association of Magazine Media
National Association of Manufacturers (NAM)
National Association of Prosecutor Coordinators
National Association of State Chief Information Officers
National Cable & Telecommunications Association (NCTA)
National Center for Victims of Crime
National Crime Justice Association
National District Attorneys Association
National Domestic Preparedness Coalition
National Football League
National Governors Association, Economic Development and Commerce Committee
National League of Cities
National Narcotics Offers’ Associations’ Coalition
National Sheriffs’ Association (NSA)
National Songwriters Association
National Troopers Coalition
News Corporation
Pearson Education
Penguin Group (USA), Inc.
Pharmaceutical Research and Manufacturers of America (PhRMA)
Pfizer, Inc.
Provident Music Group
Random House
Raulet Property Partners
Republic Nashville
Revlon
Scholastic, Inc.
Screen Actors Guild (SAG)
Showdog Universal Music
Sony/ATV Music Publishing
Sony Music Entertainment
Sony Music Nashville
State International Development Organization (SIDO)
The National Association of Theatre Owners (NATO)
The Perseus Books Groups
The United States Conference of Mayors
Tiffany & Co.
Time Warner
True Religion Brand Jeans
Ultimate Fighting Championship (UFC)
UMG Publishing Group Nashville
United States Chamber of Commerce
United States Olympic Committee
United States Tennis Association
Universal Music
Universal Music Publishing Group
Viacom
Visa Inc.
W.W. Norton & Company
Wallace Bajjali Development Partners, L.P.
Warner Music Group
Warner Music Nashville
Wolters Kluewer Health
Word Entertainment

Of course, the dickheads lobbying to gain control over the Internet at large would rather they weren't called "supporters," and demanded a correction and explanation from the Judiciary Committee. “The listing of the law firms was a mistake made at the staff level of the committee,” the committee said in a statement to POLITICO. “Once we were made aware of the mistake, we immediately removed the list of supporters from the website and revised the document. Our staff has been in contact with several of the firms and made them aware of our efforts to remedy the mistake.”

As of last time I checked, the Judiciary Committee had an updated list of SOPA "supporters" free of these law firms' names. Sorry, my name didn't show up as a supporter, how exactly did these firms end up there if they didn't - in one way or another - support SOPA? Nice work, you Judiciary Committee morons, you revealed the scam!

Reps. Lamar Smith (R-Tex.), John Conyers (D-Mich.), Bob Goodlatte (R-Va.), and Howard Berman (D-Calif.) should ALL be out of a job come November, period.

Especially Lamar Smith, who is a moronic copyright thief in his own right.

Vice tracked down a pre-SOPA view of Smith's website and discovered that the asshole was using a non-credited, STOLEN image lifted from photographer DJ Schulte:

Here's the original (credit, obviously, goes to DJ Schulte, who has licensed his work under a Creative Commons license, so all Lamar's dumbass team had to do was throw the dude a credit - WAS IT THAT FUCKING HARD, LAMAR?):

The cowardly pricks have retreated for now thanks to the overwhelming response by the Internet. Not any one of us or some of us or certain ones of us, just "the Internet." There will be no taking credit (there will be giving it, however, because what assholes like Lamar don't get is that we, as the Internet, do shit like that for each other), there will be no celebrating. It isn't over.

I'm a threat for writing this. You are a threat for reading it. The Internet is a threat for breaking through the bureaucratic bullshit and offering FREE knowledge to every American. Not Sallie Mae loans and failed hood colleges but real knowledge; and the fruit of the Tree of Life has taught us that the (capital G) government has but one goal: self preservation. It is not the Government's job to do anything for you, it is its job to keep you suppressed enough to continue feeding it and stupid enough not to figure out what its real job is.

The Internet is a direct threat to the Government's single mandate. It has nothing to do with copyright violators or even the chickenshit movie companies delusional enough to think movie downloading is eating into its profits when it's really SHITTY ASS MOVIES. It's that we are all a threat for disseminating this information amongst ourselves freely, openly, politely and often, 24 hours a day. No longer are we tethered to the Government-controlled media (remember when CNN used to show news?), and are instead allowed to roam free and share as much information as we like to anyone who wants it. It isn't always correct, a lot of it is opinion and some (OK, a lot) is LOLcats but it is a constant conversation the world is having with itself and that scares the shit out of the Government. Not just ours, everywhere.

I hope we, the Internet, have effectively made our point. We will not stand for it. We know what the Government is trying and we aren't going to sit here quietly and allow them to do it. This is not China, it's the United States of America (in case anyone forgot). I'm sorry a bunch of assholes we pay to represent us in Washington think it's OK to fuck us like this and we're too stupid to notice but we're not going to take it.

Get it yet? They will be back. And we'll be ready.

Here is some recommended reading: Green Czar Resigns, Creepy White House Internet Tactics Still Creepy

Obama Supporter-Like Quotes

2012-01-20T10:32:00.000-08:00

I've heard most of these for reals:

People don't want to be part of democracies; they want to be part of religions. The Democrat and Republican parties are super religions but they are becoming destroyers of democracy.

HT: Daily Bail

Greenspan's Body Count:

2012-01-19T16:50:00.000-08:00

UPDATE: Post removed at request of victim's family.

Not to mention those holes in his hands!

2012-01-19T04:59:00.001-08:00

Tim Tebow played through rib, lung, and chest injuries.

More bang for your buck

2012-01-17T15:54:00.000-08:00

In between QE2 and QE3, we're getting quite a lull in inflation.

Indeed, there are increasing signs of deflation.

Consider, for example, what you can get for a few bucks worth of Chicken McNuggets in Burbank:

A Los Angeles woman was arrested after she offered sexual favors in exchange for chicken McNuggets, Burbank police said.

Khadijah Baseer of Los Angeles reportedly opened customers’ car doors in the drive-thru of McDonald’s on the 1700 block of Olive Avenue about 11 p.m. Wednesday, asking for free chicken McNuggets in exchange for sexual favors, Officer Joshua Kendrick said.

A man told police Baseer approached him but he refused the offer Baseer was arrested Wednesday on suspicion of prostitution.

Prostitution? So the 1% can take a girl to Spago and woo her with a $300 bottle of wine but the rest of us aren't allowed to buy a girl some chicken nuggets?

Newsweek: Obama is not a horrible president; you're just too stupid to realize how awesome he is

2012-01-17T04:00:00.000-08:00

This is how low the mainstream media have sunk. You're not still reading them, are you?

QE3!!!

2012-01-15T07:57:00.000-08:00

The Fed voting rotation has just ejected all the hawks and brought in a bunch of doves. The only voting hawk will now be Jeffy Lacker, who is sure to have a series of lone dissents this year.

Get ready for QE3!

CNBC:

Federal Reserve officials are seriously considering giving the US economy—and especially the housing market—an added jolt with more quantitative easing.

Fed officials are likely to discuss such a move at their Jan. 24-25 meeting, when the central bank will issue its first quarterly forecast on interest rates under the new communication policy.

Two of the new voting members this year on the Federal Open Market Committee, which sets interest-rate policy, have recently suggested they would support more assets purchases.

San Francisco Fed President John Williams said that sustained high levels of unemployment, as forecast by many Fed members, "does make an argument that we should have more stimulus."

Hurry up, Fedsters! Those trillion-dollar deficits aren't going to monetize themselves!

Federal Reserve exposed as a pack of giggling morons as economic collapse loomed

2012-01-13T16:06:00.000-08:00

Just the facts here. From their own meeting transcripts, in the New York Times:

“We think the fundamentals of the expansion going forward still look good,” Timothy F. Geithner, then president of the Federal Reserve Bank of New York, told his colleagues when they gathered in Washington in December 2006.

Some officials, including Susan Bies, a Fed governor, suggested that a housing downturn actually could bolster the economy by redirecting money to other kinds of investments.

And there was general acclaim for Alan Greenspan, who stepped down as chairman at the beginning of the year, for presiding over one of the longest economic expansions in the nation’s history. Mr. Geithner suggested that Mr. Greenspan’s greatness still was not fully appreciated, an opinion now held by a much smaller number of people.

... and this:

Ms. Yellen said: “It’s fitting for Chairman Greenspan to leave office with the economy in such solid shape. The situation you’re handing off to your successor is a lot like a tennis racquet with a gigantic sweet spot.”

Click on over and read the whole sickening thing, exposing plainly that the puppetmasters pulling the strings of our economy are driveling idiots.

Then check out the reactions from around the web: ZeroHedge, Kenny Bing, and soon I hope from the Dirty Fed's tormentor-in-chief Jr. Deputy Accountant.

UPDATE: Randall Forsyth weighs in at Barron's:

just-released transcripts of its deliberations from 2006 shows the central bankers at the time to be relatively unconcerned about impending decline in the housing market, which touched off the worst financial crisis and economic downturn since the Great Depression.

Which raises the question: if the Fed can't accurately assess the present, how well will policy makers be able to forecast [or centrally plan! - ed.] the future?

And while some of the Fed officials from five years ago have moved on -- notably former Fed Chairman Alan Greenspan, whose term was up at the end of January 2006 -- the main players are still in power. That would include the two most important U.S. economic officials -- the present Fed chairman, Ben Bernanke, who took over after the erstwhile Maestro's departure, and Tim Geithner, then the head of the New York Fed (which makes him vice chairman of the policy-setting Federal Open Market Committee) and now the Secretary of the Treasury.

Foreign Treasury holders requesting three steps toward the door

2012-01-12T19:35:00.000-08:00

Like any bubble, the Treasury bubble will be immensely profitable for holders who get out in time.

... which is what an increasing number of foreign holders look like they are trying to do.

[...] as of today's H.4.1 update, the outflow has increased by yet another $8 billion to a new all time record of $85 billion, in 6 consecutive weeks, which is also tied for the longest consecutive period of outflows from the Fed's Custody account ever. This week's sale brings the total notional of Treasurys in the Custody account to just $2.66 trillion (down from a record $2.75 trillion) and the same as April of last year. And since the sellers are countries who have traditionally constantly recycled their trade surplus into US paper, this is quite a disturbing development.

Obama just asked for another trillion dollars in borrowing, and the cowardly Republicans have already agreed to give it to him. And then after the election, we'll need another trillion, which will again be approved without any spending cut concessions. And within a year, another trillion. The U.S. is spending more than a trillion dollars a year that it doesn't have, and no one other than Ron Paul is proposing to change course.

Anyone buying a long-term Treasury at 2% or 3% is a martyr for the regime. Sane people do not lend at 3% to governments with 100% debt/GDP adding on annual 7% GDP deficits, not to mention the gargantuan off-balance-sheet Medicare, Social Security, and state liabilities.

Got gold?

Ron Paul stunning 24% second place in New Hampshire

2012-01-10T18:31:00.000-08:00

Please donate to carry the message of freedom to South Carolina.

Your US-taxpayer-funded IMF dollars and US Federal Reserve swap lines at work

2012-01-10T08:54:00.000-08:00

In the welfare state of the absurd:

Greece’s Categorization of Pedophilia as ‘Disability’ Sparks Outrage

Disabled people in Greece are furious over a plan by the Athens government to categorize pedophiles, pyromaniacs, fetishists, exhibitionists, compulsive gamblers, kleptomaniacs, sado-masochists, among others, as “disabled,” suggesting such groups may also be eligible to receive state benefits.

The country’s Labor Ministry explained that it consulted with a panel of medical experts to include people with behavioral disorders to widen the definition of “disability.” However, it added that the categorization does not necessarily mean they will all be entitled to state benefits.

Now excuse me while I go to Greece, strip naked and start a fire, and retire on two disabilities.HT: T-Dub.

Unoccupied

2012-01-10T03:12:00.000-08:00

"Occupy Encinitas," Sunday, Jan. 8, Highway 101

Photo credit: Left Coast Rebel.

Not Illegal Obama?

2012-01-06T13:55:00.000-08:00

This from 60 Minutes:

PRESIDENT BARACK OBAMA: You know, I can't, as President of the United States, comment on the decisions about particular prosecutions. That's the job of the Justice Department. And we keep those things separate, so that there's no political influence on decisions made by professional prosecutors. I can tell you, just from 40,000 feet, that some of the most damaging behavior on Wall Street, in some cases, some of the least ethical behavior on Wall Street, wasn't illegal. That's exactly why we had to change the laws. And that's why we put in place the toughest financial reform package since F.D.R. and the Great Depression.

William K. Black disagrees:

US Debt for Dummies

2012-01-05T09:56:00.000-08:00

This is fun.
Of course my econ prof always says debt doesn't matter. I must be a dummy.

Santorum's ruling-class sellout problem

2012-01-05T05:51:00.000-08:00

You know about this blog's long-held disdain for Rick Santorum's religious nuttiness.

But I've never had a reason to question his blue-collar, humble origins shtick until now.
Like Gingrich before him, he got rich selling his Washington connections after leaving Congress.

Since his 2006 re-election defeat, the former Pennsylvania lawmaker has gone from being one of the poorer members of the U.S. Senate to earning $1.3 million between January 2010 and August 2011. In 2007, he spent $2 million to buy a 5,000-square foot home in Great Falls, Virginia, according to property records.

Santorum’s financial rise was powered by consulting contracts with fuel producer Consol Energy Inc., faith advocacy group Clapham Group and American Continental Group, a Washington consultancy, as well as media engagements.

“If he’s claiming he’s not an insider, this is the thing that insiders do -- after public office they cash in,” said Kent Cooper, a campaign finance expert and former Federal Elections Commission assistant staff director.

Outside of his employment contracts, Santorum’s greatest financial gain came from $395,414 in director fees and stock options he listed in a recent financial disclosure.

The fees and options came from King of Prussia-based Universal Health Services Inc. (UHS), a publicly traded health-care management company that was sued in 2010 by the federal government for alleged Medicaid fraud.

HT: JF.
I should note that veteran newsman The Lazy Paperboy had this side of Santorum covered before the Bloomberg story.

Ice Cream, You Scream.....

2012-01-03T06:43:00.000-08:00

The Bernanke's dirty deeds are showing up in the most unhappy places, in this case in the form of my beloved Breyers Mint Chocolate Chip ice cream. I remember buying half gallons of my fav cold treat but for obviously transitory reason Breyers is now pushing it's product in 1.5 quart containers. That's a half quart short a half gallon for those metrically inclined.

You aren't even going to let us eat cake are you Ben???

Stephanie Edwards back covering the Rose Parade

2012-01-02T11:10:00.000-08:00

We're getting lots of blog traffic this morning from people googling "Stephanie Edwards."

I didn't watch it this year, but I hope she equaled her epic 2011 performance.

Senator Rick "Man-on-dog" Santorum gives Ron Paul and Romney a challenge for Iowa

2012-01-02T08:47:00.000-08:00

... sez PPP:

Ron Paul is at 20%, Mitt Romney at 19%, and Rick Santorum at 18%. Rounding out the field are Newt Gingrich at 14%, Rick Perry at 10%, Michele Bachmann at 8%, Jon Huntsman at 4%, and Buddy Roemer at 2%.

This blog has been following Rick Santorum since long before he was a has-been and a 17-point loser in his most recent election.

Lest we forget, some of Rick Santorum's Greatest Hits:

* The problem with Social Security is there are too many abortions.

* Homosexuals are like child molesters and dog rapists.

* God plays with light switches to send signals to me.

* Priests rape children because society is too tolerant of homosexuals.

* The Founding Fathers opposed the pursuit of happiness.

* Freedom is only for people who do what I think they should do.

* Dang, I still haven't found anyone who can fix that little SEO problem.

An Obama-Santorum race would have results remarkably similar to Casey-Santorum. Maybe bigger.

Flat is the new up

2011-12-30T13:36:00.000-08:00

... and it doesn't get much flatter than the S&P 500 this year. It closed at 1257.60 compared to last year's 1257.64 for a loss of 0.003%. But you got 2% in dividends at least. Small-caps, foreign stocks, and emerging markets all did much worse.

Meanwhile, gold was up 11%, and up for the tenth year in a row.

A man for his time

2011-12-29T20:25:00.000-08:00

"He's just an honest man, and that's something we need now in this day and time. It's a lot of politics, and no honesty. When you have honesty, well, people will try to do anything to blot you out, and that's what they will try to do is blot him out, because he will be honest, and they need more like him."

Truer words were never spoken. Are any other candidates speaking the truth about the sustainability of trillion-dollar deficits or the Federal Reserve's monetization of the them?

Charles Hugh Smith: Why I am hopeful

2011-12-27T21:11:00.000-08:00

This is worth a read. While the Nanny/Police State is doomed to collapse under its own weight, people are social creatures and will re-discover community to save themselves and each other.

Putting Obama on Clearance

2011-12-26T20:02:00.000-08:00

GayPatriot has Obama collectors' plates marked down to $2.99. HT: Instapundit.

I can beat that. I snapped this picture of an Obama "Yes We Can" puzzle at Big Lots! (née Pic n' Save) for $2.00 two days before Christmas. Hate to see what that's marked down to now!

UPDATE: Welcome, Instapundit readers! Please check out our Tea Party buddies the SLOBs (San Diego Local Order of Bloggers).

Greenspan's Body Count: Aziz "Bob" Yazdanpanah, NaFatemah Rahmati, Nona Yazdanpanah, Ali Yazdanpanah, Mohamad Hossein Zarei, Zohreh Rahmaty, and Sara Fatemeh Zarei

2011-12-26T17:39:00.000-08:00

Alan Greenspan gets really twisted around the holidays.

His latest massacre involved a man dressing up as Santa to kill his family among their just-opened presents on Christmas Day.

The Dallas Morning News reported the family was having financial troubles and that the mother moved into the Grapevine apartment after separating from her husband, who is still living in the family's Colleyville home just a couple of miles away.

Last year, the bank foreclosed on the home, which was tied go the father's filing for bankruptcy according to federal records, The Dallas Morning News reported.

Neighbors told News 8 that the father had been living at the house and was seen just last week cleaning up leaves in the yard. They said the family lived there for at least 12 years.

Neighbors also told News 8 they believe the father works in real estate.

Aziz Yazdanpanah is listed at 5406 Sycamore Court in Colleyville, TX, which was purchased pre-bubble in 1999, so he almost certainly took out a big home equity loan to get in trouble.

Greenspan's Body Count stands at 207.

UPDATE: Islamic honor killing? There's plenty of blame to go around for this. Greenspan's Body Count killers are never otherwise well-adjusted individuals. Greenspan's bubble crashing is always a contributing factor that pushes at-risk people over the edge. So is Islam, apparently.

It's beginning to look a lot like Christmas

2011-12-25T12:35:00.000-08:00

Merry Christmas

2011-12-24T16:33:00.001-08:00

Same debt crisis, different Christmas.

We can dream, can't we?

Efficient Portfolio Advisors' William Bernstein criticizes Ron Paul's portfolio

2011-12-23T09:13:00.000-08:00

In the WSJ blog, on Ron Paul's heavy exposure to gold mining stocks and lack of bonds:

At our request, William Bernstein, an investment manager at Efficient Portfolio Advisors in Eastford, Conn., reviewed Rep. Paul’s portfolio as set out in the annual disclosure statement. Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe. ”This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,” he says.

There are many possible doomsday scenarios for the U.S. economy and financial markets, explains Mr. Bernstein, and Rep. Paul’s portfolio protects against only one of them: unexpected inflation accompanied by a collapse in the value of the dollar. If deflation (to name one other possibility) occurs instead, “this portfolio is at great risk” because of its lack of bonds and high exposure to gold.

Running an investment portfolio that protects against only one bad outcome is like living in California and buying homeowner’s insurance that protects only against earthquakes, says Mr. Bernstein. You also want protection against fire and wind and theft and the full range of risks that houses are prone to.

The bumbling Mr. Bernstein fails to consider the first and most important thing in financial planning: looking at the totality of the investor's financial circumstances. Having served in Congress for decades, Ron Paul is entitled to a Congressional pension which caps out at 80% of final year's salary of $174,000, as well as full health care benefits. He's also likely got some Social Security and a Congressional 401(k).

How exactly is a 76-year-old man with a Congressional pension well over $100,000 a year, $500,000 in cash, and full Congressional health care benefits at risk from deflation? In the unlikely event that sound money breaks out, Ron Paul is set for life! Wouldn't it then make sense to use the bulk of Paul's investment assets to protect against the risk of unsound money, especially with serial deficits running around 10% of GDP and the central bank printing trillions of new dollars?

And as for bonds, don't get me started. Treasuries have negative real yield. You lose more in inflation than you are paid in nominal interest. And then the government taxes you on the nominal interest anyway. Sure, you could pick up a little more yield by taking on credit risk, but then if deflation actually does hit, those credit risks are going to default! Ron Paul's decision to hold cash instead of bonds is sound.

UPDATE: I stand corrected. In a selfless and principled move that sets him miles apart from the rest of the scum in Washington (I'm looking at you, Newt Gingrich!), Ron Paul refused his Congressional pension. Still, with a half million in cash and millions in dividend-paying mining stocks, I don't think the deflation boogeyman keeps Ron Paul up at night. And don't forget all that gold that he once had that he mysteriously stopped reporting to the government.

How central planners destroyed the economy and killed capitalism

2011-12-23T07:26:00.000-08:00

... in the Wall Street Journal, nonetheless.

Via ZeroHedge:

Strangely parallel to the Yellowstone catastrophe was the start of the federal government's other fire-suppression policy with the 1984 Continental Illinois "too big to fail" bank bailout. This was followed by Alan Greenspan's pronouncement immediately after the 1987 stock market crash that the Federal Reserve stood by with "readiness to serve as a source of liquidity to support the economy and financial system," which heralded the birth of the "Greenspan put." The Fed would no longer tolerate fires of any size.

From a forestry point of view, the lessons were learned. In 1995, the Federal Wildland Fire Management Policy stated, "Science has changed the way we think about wildland fire and the way we manage it. Wildland fire, as a critical natural process, must be reintroduced into the ecosystem."

Herein are pearls of great wisdom for central bankers today. Central banks are creating a tinderbox by keeping alive many very bad investments, fertilizing them with everything from artificially low interest rates to preferential liquidity to outright securities purchases. As these institutions and instruments overrun the financial landscape, they hamper the economic ecosystem and perpetuate the environment of low growth and high unemployment in which we currently find ourselves.

Seeing periodic, naturally occurring catastrophes as part of the growth cycle requires thinking more than one step ahead, not only longer term but, more specifically, intertemporally. This is perhaps an insurmountable cognitive challenge, both to investors and central bankers in today's news-flash world. When contemplating the forest, we may intuitively understand nature's logic of growth. Yet when we look at the seeds of destruction we have sown through current monetary policy, it is clear we are lost in the trees.

Note: You Can Smuggle Knives Onto a Plane But Not a Fake Bullet Belt

2011-12-22T22:06:00.000-08:00

Ahh the TSA. They've molested me, pulled out my questionable battery-operated devices in winding lines, scanned my boyfriend's naughty bits, harassed me for the state of California budget problems that prevented my state-issued ID from being released in a timely manner and destroyed my $700 HP laptop. My relationship with them goes beyond love-hate, it's a necessary evil that I accept as a person who actually needs to get out of town every few weeks or months. I've driven across the country - several times - but with 3 or 4 vacation days to cash in, what can I do but subject myself to the TSA violations just to escape from my homebase for 72 short but precious hours?

So when I read about the person stopped on a Washington to Chicago flight trying to smuggle in knives hidden in a carved-out book (a book about ninjas, none the less), I couldn't help but think back to my harassment on a flight to San Francisco from Richmond way back in 2009:

If anyone recalls, the first time I'd flown in a long time was mid 2009. The very nice but totally wrong TSA agent at Richmond International Airport confiscated my pink bullet belt (available from the terrorist costume outlet Hot Topic) because bullets were a "replica weapon," which are not allowed on American flights. I repeat: fake bullets grommeted to a pink canvas belt, looped into my pants. I'm crying in the airport carrying an Eeyore I used as a pillow and this guy wants to confiscate my lame Hot Topic belt because its (likely plastic) fake bullets "replicate" a weapon. Who am I going to threaten with the fake bullets firmly attached to what is holding up my pants?

Whatever. I let him toss it in the trash. It's not worth getting violated (I had been on vacation, I'd spent days doing that anyway) over a cheap ass belt. It was an awesome belt. My pants slipped down my ass all the way home once I made it back to San Francisco. Dickhead.

Anyway. What happened to the wanna-be ninja shlepping daggers to Reagan Airport in a ninja book? Finally, we know.

WUSA reports there are no plans to file charges, since investigators determined the passenger was not a security threat.

If I would have fought the TSO in Richmond about my precious bullet belt, I'd have missed my flight while sitting in a Richmond Airport jail cell. And yet, you're telling me some dude tried to hide knives in his carry-on and yet wasn't charged with anything?

There is something horribly fishy about this story.

Porter Stansberry: The Corruption of America

2011-12-21T17:48:00.000-08:00

I've got mixed feelings about newsletter writer Porter Stansberry. I generally agree with his investment views, but his newsletter pitches are really annoying. He talks cryptically about basic investment ideas, making them sound like state secrets in order to get people to subscribe to his newsletter. Case in point: his $3.00 government silver secret. Or a recent e-mail pitch for the secret Walmart retirement strategy which made people into millionaires. Reading between the lines, he's just talking about ordinary old dividend reinvestment plans (DRIPs).

However, a friend sent me his most recent subscription newsletter, which was devoted not to investment advice but to commenting on the sad state of our nation. Every one of those words rang true, and it glowed like burning coal. I forwarded it to friends but regretted not having an online copy that I could link here for WCV readers.

Well, here it is, a concise and precise explanation of the corruption that is rotting America from within. Enjoy.

Porter Stansberry: The Corruption of America.

Ron Paul leads Iowa!

2011-12-19T04:34:00.000-08:00

We are on the verge of a historic win for liberty.

PPP shows Ron Paul in the lead in Iowa.

According to the PPP poll, Mr. Gingrich's campaign poll numbers are dropping "rapidly" and Ron Paul has now taken the lead in Iowa. While Rep. Ron Paul, Texas Republican, is leading the poll at 23 percent, Mr. Gingrich is now at 14 percent. Only former Massachusetts Governor Mitt Romney barely trails Rep. Paul at 20 percent.

We have a stark choice in 2012: the status quo of never-ending debt, intrusive government, Wall Street looting of the economy, and global military adventurism; or peace, liberty, and fiscal responsibility.

Please give what you can here.

Greenspan's Body Count: Andre L. Turner, Henry Serrano, Robert Scott Lindsay

2011-12-18T11:12:00.000-08:00

Another workplace shooting, and -- surprise! -- the killer was deeply underwater on his house.

UPI:

An employee who killed two people at a Southern California Edison office before taking his own life targeted his victims, a witness said.

The shooter was identified Saturday as Andre Turner, 48, of Norco, the Los Angeles Times reported. He shot four co-workers at the company's information and technology office in Irwin Friday afternoon, including two who were critically injured.

Let's go to the real estate records. Turner was listed at 1495 Andalusian Drive in Norco in California's Inland Empire, ranked the #2 worst place in America.

Turner bought the McMansion in 2004 for $711,000, reportedly put a lot more money into it, and was trying to short-sell it for $590,000.

Workplace disputes rarely end in violence. The psychological impact of severe financial distress caused by Greenspan's bubbles cannot be underestimated. It is what pushes a few, like Andre Turner, over the edge.

Greenspan's Body Count stands at 200.

How to protect your assets from a thoroughly corrupt financial system

2011-12-18T09:32:00.000-08:00

Barron's is aghast at the blatant theft of client gold and silver from segregated accounts at MF Global:

It's one thing for $1.2 billion to vanish into thin air through a series of complex trades, the well-publicized phenomenon at bankrupt MF Global.

It's something else for a bar of silver stashed in a vault to instantly shrink in size by more than 25%. That, in essence, is what's happening to investors whose bars of silver and gold were held through accounts with MF Global.

The trustee overseeing the liquidation of the failed brokerage has proposed dumping all remaining customer assets—gold, silver, cash, options, futures and commodities—into a single pool that would pay customers only 72% of the value ...

Jesse's Cafe and Market Ticker have additional thoughts, with which I agree completely.This completely violates the basic assumption that any financial assets you hold through a broker are legally yours and protected by law. You should immediately reassess ALL of your financial assets held through brokers.Here are a few steps I'd recommend:

1) Immediately take your stock brokerage accounts out of "Type 2" (margin) and make them all "Type 1" (cash). If you have Type 2 accounts, your broker can lend out your securities to other banks (called "rehypothecation"), which is similar to what may have happened at MF Global. You don't need margin anyway unless you want to use risky leveraged stock and option strategies.

2) Consider taking your securities out of brokerage accounts entirely. You can request stock certificates be sent out to you, and you'll receive your dividend checks in the mail.

3) With respect to precious metals, there is no substitute for physical that you hold yourself or with a private storage firm such as Brinks that is not connected to a leveraged financial firm. We've warned before not to buy the ETFs, and that applies to futures and other derivatives. Just ask Gerald Celente or Bill Fleckenstein.

4) Don't hold any significant money in money market funds. Use FDIC-insured savings accounts or buy FDIC-insured short-term CDs instead. Many money market funds are invested in paper from European banks, and with funds paying essentially 0%, you are taking real risk without any compensation.

5) Where you must stay with a broker (for IRAs, for example), stick with independent, plain-vanilla firms like Schwab, e-Trade, Vanguard, or Fidelity. Avoid brokerages owned by the dirty, leveraged, global banks. See what Bank of America just did moving trillions of derivatives from its investment arm to its FDIC-insured bank arm? The global banks are ticking time bombs and they want to take their customers and the taxpayers down with them. Want to hide by going to 100% cash and Treasuries? Not so fast. Also in this week's Barron's, here is "Face-ripping inflation" from Lee Quaintance and Paul Brodsky of QB Asset Management:

The [trillions in systemic] bad debt could be restructured so that creditors get cents on the dollar. The QB partners doubt this will happen because it would cause too much pain.

The more likely outcome is that the central bankers print more base currency, reducing the buying power of the money already in circulation.

And voila! You have skin-peeling inflation.

"A full deleveraging of the banking system could mean that the dollar and other currencies will lose 70% to 80% of their purchasing power," Quaintance says, arguing that all major banks in developed lands will suffer because markets are so interconnected.

How should investors prepare if they buy into this Grinch-y world view? Buy gold and unlevered assets, says Quaintance. The losers in this scenario: holders of cash and "risk-free" Treasuries. Of course, cash and Treasuries are what risk-adverse investors favor right now.

Long-time W.C. Varones readers will recognize a familiar theme here. The unsustainable debt will be resolved either by inflation or default, and inflation is likely to be the political path of least resistance. I'm not as confident on the timing as Quaintance and Brodsky, as this has already taken longer to play out than I would have expected.

Stay diversified out there.

Tea Party News

2011-12-18T06:18:00.000-08:00

Where has the Tea Party gone? Why haven't we seen them in the streets lately?

They've gone indoors and are hammering the phones, organizing, and holding politicians accountable. Read all about Tea Party 2.0 at Reuters, including a quote from our own Leslie Eastman.

In other Tea Party news, Tea Party Patriots spokesman Mark Meckler was arrested at a New York airport while declaring his permitted, locked, and unloaded gun per TSA regulations. Leslie has the full story at Temple of Mut, and Sarah Bond discusses it with KOGO radio's LaDona Harvey here (starting 01:40). Apparently the local cops have a history of harassing lawful gun owners in violation of federal law. I think there's going to be blowback on this one.

Heckuva job, 'merica!

2011-12-15T08:56:00.000-08:00

Notes on Iraq over at McDanger.

We Fully Support This Bill

2011-12-14T16:28:00.000-08:00

Given we have families we are most inclined to support whatever our leaders do. I have to say without reservation that we fully support the NEW America where the Constitution is now being openly gutted, as it should for the good of our leaders, and us of course. And where we should all view it a privilege to obey what our leaders mandate.

I for one am proud of this step and never ever want to be considered a terrorist because I'm certainly not one. I can state without reservation that I would give up all my freedoms to ensure that my freedoms are protected.

(Reuters) - The U.S. House of Representatives approved a defense bill on Wednesday requiring the military to handle suspected militants linked to al Qaeda, acting not long after President Barack Obama removed a veto threat from the controversial legislation.

The bill is expected to pass the Senate this week and then go to Obama's desk for his signature into law.

Shortly before the House vote, the White House announced the president's advisers would not recommend a veto, although they said they still had concerns about the measure.

CHEERIO CONGRESS! CHEERIO SUPREME LEADER! WE SUPPORT YOU UNCONDITIONALLY BECAUSE IF WE DIDN'T, WE KNOW OUR CONSTITUTIONAL RIGHTS NO LONGER EXIST.....

The Change You Voted For

2011-12-14T07:44:00.000-08:00

Posted on Patrick

Ron Paul ad on Newt Gingrich: Selling Access

2011-12-13T20:21:00.000-08:00

I love that Ron Paul is now the leading Not Newt Romney candidate. The polls are looking great in Iowa!

Daniel Hannan Drops F'Bombs on the EU

2011-12-13T14:43:00.000-08:00

It sounds so cool when English people go blue:

Hey Gay Legal Men and Those That Question McQueary

2011-12-13T10:18:00.000-08:00

To anyone who believes that version of events, Amendola said, "I suggest you dial 1-800-REALITY."

Hey guys, welcome to the hottest place for triple-X action. Get ready for bulging, bursting pleasure with horny gay, bi, and bi-curious studs. Just 99 cents per minute.

More on Jerry Sandusky's rock solid legal defense here.

I'll see you on the dark side of the moon

2011-12-10T07:16:00.000-08:00

President Obama is right

2011-12-06T17:25:00.000-08:00

Now this is a surprise -- President Obama delivered the beginning of a good speech today.

This bit made think for the first time that he -- or at least his speechwriter -- actually understands what's going on:

Long before the recession hit, hard work stopped paying off for too many people. Fewer and fewer of the folks who contributed to the success of our economy actually benefited from that success. Those at the very top grew wealthier from their incomes and their investments -- wealthier than ever before. But everybody else struggled with costs that were growing and paychecks that weren't -- and too many families found themselves racking up more and more debt just to keep up.

Now, for many years, credit cards and home equity loans papered over this harsh reality. But in 2008, the house of cards collapsed. We all know the story by now: Mortgages sold to people who couldn't afford them, or even sometimes understand them. Banks and investors allowed to keep packaging the risk and selling it off. Huge bets -- and huge bonuses -- made with other people's money on the line. Regulators who were supposed to warn us about the dangers of all this, but looked the other way or didn't have the authority to look at all.

That's exactly right.

The middle class fell behind for many reasons, both natural economic reasons and Washington-created policy error reasons. Chief among the first category are technological developments and international competition, in that order. ATMs replaced tellers, e-mail replaced mailmen, MERS replaced loan processors, computers replaced cubicle-dwellers (see our earlier posts Rise of the Machines and RotM continued).

The policy errors that contributed to the demise of the middle class include the Federal Reserve deliberately facilitating stock market and housing bubbles so that a generation of Americans thought they could get rich quick. Why get a difficult degree in engineering or medicine when you can make more money flipping stocks or flipping houses? These bubbles enriched those at the top (investment bankers, stock brokers, mortgage brokers, asset owners), and left middle-class workers with neither jobs nor skills after the bust. Beyond the Federal Reserve, Congress and many Administrations were complicit in the bubble-blowing with misguided policies via FHA, Fannie Mae, Freddie Mac, CRA, etc. Obama doesn't understand -- or doesn't admit to understanding -- this yet.

But if Obama is beginning to understand how we got here, he couldn't be further from understanding how to get us out of here. Obama's solutions are expensive mandates on businesses like ObamaCare, left-wing tribunals like the NLRB telling companies how they can run their businesses, and demonization and taxation of successful business people. Oh, and raising taxes for 10 years to pay for a 1-year re-election stimulus. All these will destroy job opportunities for the middle- and aspiring-middle classes.

What might turn the tide? Repeal ObamaCare, scrap the NLRB, and flatten the tax structure, ending loopholes and subsidies. Yeah, we need to deal with the debt issue too, but that's another post (and another area where Obama's policies make things worse).

I'm reminded of the lyrics of Son Volt's Drown:

What goes wrong
You're causing it to drown
Didn't want to turn that way
You're causing it to drown
Doesn't make a difference now
You're causing it to drown

ESPN Sportswriter Gets It

2011-12-06T10:39:00.001-08:00

Sportswriters write the darndest things:

Scariest Words I Have Heard All Year: The Federal Reserve's moves to grant special favors to European governments "pose little risk to the U.S. taxpayer, Fed officials said, because the Fed is doing business with foreign central banks viewed as trustworthy." Fannie Mae and Freddie Mac, Bear Sterns, Lehman Brothers, Merrill Lynch, Dexia Bank of Belgium -- they were "viewed as trustworthy," too. U.S. taxpayers once were told they would never, ever have to cover Fannie Mae losses. Now U.S. taxpayers are being told they will never, ever have to cover losses for European bonds.

What happened last week was that the Fed offered deeply discounted "liquidity swap lines" to European banks. This mumbo-jumbo means European banks can borrow U.S. dollars from the United States at 0.5 percent interest. If you need to borrow for a car or credit card debt, can you get a 0.5 percent loan directly from the United States government? Now wealthy Europeans can!

As collateral, the Federal Reserve received promises of euros. Possibly you have read a newspaper at some point in the past year. If so, you know there is a real chance the euro might go out of existence. In that case the collateral becomes worthless. The Fed will have given a large amount of U.S. dollars to Europe to be squandered.

The Federal Reserve did not say how many U.S. dollars have been offered to European governments. The last time transactions of this sort happened, Fed "swaps" to Europe peaked at $580 billion. And as Bloomberg News pointed out last week in an important investigative story by Bob Ivry, Bradley Keoun and Phil Kuntz, the Fed recently has been handing insider companies huge subsidies without even disclosing that it is doing so.

The reason European banks seek dollars in the first place is that, at the moment, companies and investors don't want to borrow euros: corporations and investors know there is a risk the euro will become worthless. Last week that risk was shifted onto American taxpayers. Now European banks can make loans in dollars rather than in euros. If the loans succeed, the rich of Europe keep the profits. If the loans fail, average Americans will be handed the bill. Perhaps that's why the Fed announcement was written so as to be incomprehensible.

At the Fed, when high-level staffers leave, one year later they may seek lucrative jobs at the banks whose profits rise because of Fed actions. Banks and other big businesses often hire former regulators to cushy jobs, in order to send this message to current regulators: sell the public down the river, and there will be a cushy job for you too.

A Fed defender would say that if the economy rebounds and the euro stabilizes, then there will be GDP growth with no losses to taxpayers. Let's hope. Yet in this best-case scenario, the wealthy of Europe get their capital at a half percent courtesy of Uncle Sam, while typical Americans pay 4 to 20 percent interest to borrow. That's the best case!

Washington has not only put the younger generation on the hook for at least $14 trillion in debt -- now young Americans may end up on the hook for money squandered in Europe. TMQ asks again: Why aren't voters under age 30 outraged about this?

~ Gregg Easterbrook

CNBC "experts" should read more ESPN columns and watch more Comedy Central shows. They might learn something.

Newt Gingrich: ultimate hypocrite

2011-12-06T09:16:00.000-08:00

A couple different friends have sent me this excellent Ron Paul ad against Gingrich today:

Also well worth reading is George Will's column, Romney and Gingrich, from bad to worse.

Gingrich, however, embodies the vanity and rapacity that make modern Washington repulsive. And there is his anti-conservative confidence that he has a comprehensive explanation of, and plan to perfect, everything.

Granted, his grandiose rhetoric celebrating his “transformative” self is entertaining: Recently he compared his revival of his campaign to Sam Walton’s and Ray Kroc’s creations of Wal-Mart and McDonald’s, two of America’s largest private-sector employers. There is almost artistic vulgarity in Gingrich’s unrepented role as a hired larynx for interests profiting from such government follies as ethanol and cheap mortgages. His Olympian sense of exemption from standards and logic allowed him, fresh from pocketing $1.6 million from Freddie Mac (for services as a “historian”), to say, “If you want to put people in jail,” look at “the politicians who profited from” Washington’s environment.

His temperament — intellectual hubris distilled — makes him blown about by gusts of enthusiasm for intellectual fads, from 1990s futurism to “Lean Six Sigma” today. On Election Eve 1994, he said a disturbed South Carolina mother drowning her children “vividly reminds” Americans “how sick the society is getting, and how much we need to change things. . . . The only way you get change is to vote Republican.” Compare this grotesque opportunism — tarted up as sociology — with his devious recasting of it in a letter to the Nov. 18, 1994, Wall Street Journal (http://bit.ly/vFbjAk). And remember his recent swoon over the theory that “Kenyan, anti-colonial” thinking explains Barack Obama.

Gingrich, who would have made a marvelous Marxist, believes everything is related to everything else and only he understands how. Conservatism, in contrast, is both cause and effect of modesty about understanding society’s complexities, controlling its trajectory and improving upon its spontaneous order. Conservatism inoculates against the hubristic volatility that Gingrich exemplifies and Genesis deplores: “Unstable as water, thou shalt not excel.”

Meanwhile, Ron Paul is a strong second in Iowa!

Let's hope Gingrich implodes before, not after, the nomination. And maybe we'll have a chance to vote for a real reform candidate this time.

What is Gold?

2011-12-06T07:33:00.001-08:00

We've been huge fans of shiny metals for years. We love gold, silver, platinum, and even nickel. Precious metals are the bomb and when our fiat bubble bursts we believe they'll be worth a tad bit more than the price we acquired them for. But why is that and what kind of investment is it really? Is gold "a put against the idiocy of the political cycle" as Kyle Bass states here?

Seeking Alpha posted commentary on metals and fiat currencies titled "Is Gold A Risk Asset Or A Safe Haven" which offers an interesting argument.

One of the reasons the debate over whether gold is a risk asset or a safe haven seems to live on is the fact that one troy ounce of gold has a monetary value priced in fiat currency. This monetary value fluctuates up and down. As it does, people like to call gold a risk asset or a safe haven, based on how the fiat monetary value is performing relative to asset classes such as equities or fixed income. It seems like every time we see gold, in dollar terms, move in a direction opposite the S&P 500’s (SPY) daily movement, the debate heats up. Furthermore, people like to point out the bear market that dollar-priced gold suffered during the 1980s and 1990s as evidence that gold is neither an inflation hedge nor worth owning over long periods of time.

All of this misses the point about what gold as a store of value represents in a fiat currency world. When owning gold as a store of value in a world dominated by fiat currency, the only thing that should matter to the owner is the number of ounces owned. If gold is being owned to protect against the destruction of the current monetary system, then debating its daily moments when priced under the current monetary regime is pointless. All that matters is how many ounces an investor owns. These ounces, kept as a store of value, would then either be converted into whatever new currency regime comes about, if the current one fails, or continue to be held as a store of value in those instances in which the owner simply doesn’t trust the new currency structure.

Ciao Dr. Socrates

2011-12-05T06:43:00.001-08:00

FROM THE WC SOCCER DESK

Last week we lost legendary Welsh player and manager Gary Speed to, still yet to be determined why, suicide. Yesterday we lost Dr. Socrates to a far more reasonable means of exit, death by alcohol abuse.

Socrates was the captain of the greatest soccer team that didn't win the World Cup, in 1982. While some may debate that, what is not debatable was that he was part of the most loved team in Brazil. That 1982 team was the most elegant practitioners of the beautiful game maybe in history. Socrates was their leader. Click here for a link to a fantastic tribute to that 1982 team.

He was known as Dr. Socrates because while playing he earned a medical degree and after his playing career was over became a doctor.

Obrigado Dr. Socrates, boa viagem.....

Jon Stewart viewers learn about the Dirty Fed and the biggest bank bailout in history

2011-12-03T05:51:00.000-08:00

Adam Corolla on OWS

2011-12-02T18:53:00.000-08:00

Hard to refute this. (Warning: language).

15.1 TRILLION LARGE

2011-12-01T13:43:00.000-08:00

On November 17th we noted that the US National Debt hit $15,000,000,000,000. Today we hit $15,100,000,000,000. It took us 14 days to get one tenth of the way to $16,000,000,000,000. Using the most crude of methods that means we will hit that next milestone on April 5th of 2012.

And this guy added 6 trillion by his lonesome in his first 3 years in office:

Zerohedge with the deets.

Eliminate 5th Amendment - CHECK

2011-11-30T10:41:00.000-08:00

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Read about the quite literal traitors of the Constitution here.

Those who swore to defend the Constitution are trying to destroy the Constitution, and we were always at war with Eurasia. If you don't see a post from me again, please send all mail correspondence to:

Negocios Loucos, care of O'Brien
U.S. Naval Station Guantanamo Bay, Cuba
PSC 1005, Box 25
APO AE 09593

You're spelling that wrong

2011-11-30T04:08:00.000-08:00

One of the doomed gatherings of bumbling European bureaucrats today is called the "Ecofin summit."

That should be €coffin.

It's All Black Baptists Fault!

2011-11-29T12:23:00.001-08:00

I'm so sorry, I got that completely wrong. According to Hale Stewart our economic woes are all White Anglo-Saxon Protestants fault. See:

The president sends a proposal to the Republicans and then offers the "pre-compromised" version before negotiations get out of the gate. He has yet to figure out that he is hated -- as in really hated -- because of what he symbolizes: the end of the WASP power structure as we know it.

Aside from religious stereotyping that is completely unacceptable unless it's targeted at people we don't like, apparently, he also provides a sixth grader's view of how to fix the economy. Of course when I write sixth grader I mean Keynesian. So how do we fix the economy?

1.) Borrow money. Despite the incredibly stupid complaints of people about federal spending, the bond market isn't worried about the US' fiscal situation right now. The 10-year bond is trading right around 2%.
2.) Rebuild the nation's infrastructure: According to the society of civil engineers, the US' infrastructure gets a grade of D-. I recently noted a story from AgWeb that also illustrates the problem.

3.) Hire people to do the work. Considering that half the un\employed are blue collar workers (people that do things like ... construction) this would lower unemployment -- which also happens to be a big problem right now.

4.) This increases aggregate demand, which increases GDP. Once you get GDP growing at 3%+ for a few quarters, the economy because self-sustaining. This also helps to halt the debt/GDP growth rate.

STIMULUS! OF COURSE! Why haven't we tried that yet? Oh, what, we did, and it totally doesn't work, and it actually got our debt rating downgraded because we can never pay our current debts let alone add on for more stimulus that won't work. We've already tried this and it failed? I would say the "incredibly stupid" thing is to argue for something that continually fails.

Business Insider provides the good with the bad. It's sort of like the People Magazine of the blogo-sphere while Zerohedge is the Economist. Hey I like it but there are a bunch of dolts working there.

One Party for the Destruction of the Constitution

2011-11-29T00:43:00.000-08:00

We had a "choice" in November of 2008: elect a member of the liberal party hell bent on destroying the Constitution for the profit of the military, banking and corporate machines, or elect a member of the liberal party hell bent on destroying the Constitution for the profit of the military, banking and corporate machines. We got your choice (I voted libertarian). What is different between the 2 is the avenue of Constitutional destruction.

Obama promised everything and delivered nothing except for the Marxist doctrine that he was so passionate about pre-elected career, but the MSM felt that wasn't relevant to comment on.

We have yet to see a bankster charged in the fraud cases that have cost the US taxpayer trillions; we have yet to see troops removed from Iraq and Afghanistan and have seen a new front opened up in Libya and another on coming in Syria (Dems love, love, love war when Dems wage war especially when it's a Nobel Peace Prize winner doin' the wagin'); and we have seen the opposite of a the most transparent administration ever. We have also seen continued bailouts, continued reductions in our Constitutional rights and megalomaniac like disregard for the majority's wishes and instead the transfer of Chicago mafia union politics to Washington DC.

And what would we have gotten if we had voted for that senile, geriatric, Hanoi Hilton pigeon Maobama was running against?

Termed the National Defense Authorization Act (NDAA) and drafted behind closed doors by Senators Carl Levin (D-Mich.) and John McCain (R-Ariz.) the NDAA would:

1) Explicitly authorize the federal government to indefinitely imprison without charge or trial American citizens and others picked up inside and outside the United States;

(2) Mandate military detention of some civilians who would otherwise be outside of military control, including civilians picked up within the United States itself; and

(3) Transfer to the Department of Defense core prosecutorial, investigative, law enforcement, penal, and custodial authority and responsibility now held by the Department of Justice.

That's all of course completely unconstitutional but we have become a fake democracy that doesn't adhere to any law of the land. It's communists on the left, fascists on the right, both with a mission to destroy liberty and the Constitution. They work together for that common goal and there is really only one party. We've woken up and our choice is tyranny. Khrushchev was right.

UPDATE:

McCain finished by mentioning Paul simply had no idea the massive threat posed to the US by terrorists."An individual, no matter who they are, if they pose a threat to the security of the United States of America, should not be allowed to continue that threat," McCain said. " We need to take every stop necessary to prevent that from happening, that’s for the safety and security of the men and women who are out there risking their lives....in our armed services."

So according to a guy who might have been President, if the State deems you a threat you have no rights and you could be detained or even eliminated without any process. Wonder what McCain thinks of the movie Brazil?

Anyone who voted for McCain needs to reconsider why they are a Republican. This is terrifying.

Greenspan's Body Count: Cheryl Regazzi and Robert Regazzi

2011-11-28T16:27:00.000-08:00

Serial killer Alan Greenspan is known to commit multiple murders in the same area in a short span of time. Earlier this year, he was very active around San Diego.

Now, it seems, Greenspan is haunting New Jersey. Just days after the murder of Kimberly Allen in Red Bank, Greenspan went to Clifton:

A man apparently shot and killed his mother at their Gillies Street house before deliberately overdosing on drugs sometime over the holiday weekend, authorities said Sunday.

Police were called to the two-story, single-family home around 4:30 p.m. Saturday after a family friend reported finding the bodies inside, said Detective Sgt. Robert Bracken of the Clifton police.

Bracken identified the victims as Cheryl Regazzi, 53, and her son, Robert Regazzi, 20.
[...]

Neighbors said they believed that Cheryl Regazzi was having financial problems, but they could not be specific.

A for-sale sign was posted outside the four-bedroom, colonial-style house on Sunday.Regazzi's next-door neighbor, Gloria Kirwin, said the house has been on the market since early this year. Trulia, a real estate website, says the house had been listed for 140 days, and real estate listings show the most recent asking price as $239,000.

Kirwin, 69, said Regazzi recently told her she could no longer afford the house.

"She was trying to sell the home but she had no luck," Kirwin said.

A public records search indicates that Cheryl Regazzi refinanced the mortgage on the house at least three times since 2003, with the mortgage amount rising from nearly $61,000 that year to $105,000 in 2008.

Real estate records show that Regazzi and her husband, Jacques, bought the house in 1992 for $110,000.

Greenspan's Body Count stands at 197.

Greenspan's Body Count: Kimberly Allen

2011-11-26T05:21:00.000-08:00

Greenspan's Body Count goes to the Jersey Shore! In Red Bank / Middletown / Lincroft, New Jersey:

Patrick F. Allen, 44, accused of killing his wife, Kimberly, on Nov. 19, remained in the Monmouth County jail in Freehold Township Friday in lieu of $1.5 million bail with no options to post 10 percent to secure his release, as set by state Superior Court Judge Anthony J. Mellaci Jr.

[...]

“Patrick Allen killed his wife of 20 years during a financial dispute. He was the only person at home with her and he is the only person who could have killed her,” [prosecutor Marc] LeMieux said in court.

[...]

A check of financial records show that Patrick and Kimberly Allen held two mortgages totaling $625,000 on their home on West Front Street, and that Patrick Allen individually owed nearly $25,000 in credit card debt that was being levied against his property and a bank account following three court judgments handed down earlier this year.

Records held at the Monmouth County Clerk’s Office reveal the Allens financed $352,800 when they initially purchased the lot upon which they built a 3,184-square-foot home. They also show that by 2006, the Allens had refinanced the mortgage on the home three different times, taking out increasing amounts until the final $455,000 mortgage was obtained in 2006.

In addition to the mortgages, three additional home equity lines of credit were taken out during a six-year period beginning with a $45,000 secondary loan the Allens secured 18 months after the initial purchase, up to the outstanding $160,000 in the form of a 15-year second mortgage was obtained in 2005.

The two mortgages put the couple into debt totaling $615,000, but a source said the couple was also about $19,000 behind in their mortgage payments.

Greenspan's Body Count stands at 195.

Selling PFUIX

2011-11-23T09:16:00.000-08:00

A couple years ago, I posted Advice to a young man on supporting a mistress, recommending a basket of investments as protection against dollar debasement. The basket has performed very well since, led by silver, gold, and the GDX gold miner ETF. The laggards have been foreign equities: VEA, EWA, SWISX, and VWO. Stick with them. They all yield more than five-year Treasuries, and some of them yield more than 10- and 30-year Treasuries.

I still like this diversified basket, and I am continuing to dollar-cost average into these asset classes. One exception is the bond fund I mentioned, Pimco Foreign Equity Unhedged (PFUIX). It has performed well, but I think it is time to dump it. The fund invests heavily in European debt and bond futures, and with Europe facing the choice between printing and default, neither is likely to be good for Euro bondholders.

History repeats itself

2011-11-23T07:49:00.000-08:00

"Have I a legal right to do this?" Roosevelt asked a group of senators in the Oval Office. He was talking about his plan to devalue the dollar. "Mr. President," replied Thomas Gore of Oklahoma, who opposed the idea, "you could go on the street right now, knock down an old man, drag him into the White House, and take his clothes. You could sell them second-hand. It would be just about as legal as what you are planning to do. But that doesn't matter. You can do it anyway." Roosevelt roared his approval, and, indeed, did it anyway.

- Supreme Power: Franklin Roosevelt vs. the Supreme Court

Happy Supercommittee Fail Day!

2011-11-21T04:44:00.000-08:00

So the Supercommittee is going to announce failure.

The good news is it doesn't mean much. The Supercommittee's goal was a farce anyway, cutting only $1.2 trillion over 10 years, or $120 billion a year, when we are currently running deficits over $1.2 trillion each and every year.

And the automatic cuts that will kick in when the Supercommittee fails? They are a joke, too. Conveniently for Obama's re-election, they don't kick in until 2013. And they are so annoying to the military-industrial and welfare-industrial complexes that a future Congress is sure to undo them. Both Obama's Defense Secretary Leon Panetta and Congressional Republicans are already freaking out over the defense cuts.

The allegedly Draconian Congressional Republicans have now achieved precisely zero spending cuts in three opportunities: the budget, the debt ceiling, and the Supercommittee. What exactly are Republicans good for?

Damn the credit rating; full speed spending ahead.

The lesson of the first Thanksgiving: socialism kills

2011-11-20T15:44:00.000-08:00

Please print this and share this story with your OWS nephew and your SEIU sister-in-law at the Thanksgiving table this Thursday.

From Karl Denninger:

The first winter was disasterous - nearly half of the Pilgrims died of starvation, pneumonia and tuberculosis. Many claim that Bradford's first wife perished that first winter, but that is not quite true - she actually fell off the Mayflower quite close to land and drowned, never making it to Plymouth (he later remarried.)

During the first two years the colony lived under what could only be called Communism, enshrined in the Mayflower Compact. Each person was accorded a "share" of the totality of what was produced at the colony, and each person was expected to do their part in working toward the common good. The land, and that upon it, was owned by the colony as a collective.

It not only did not work out, it nearly killed them all.

William Bradford wrote in his diary "For in this instance, community of property (so far as it went) was found to breed much confusion and discontent, and retard much employment which would have been to the general benefit and comfort. For the young men who were most able and fit for service objected to being forced to spend their time and strength in working for other men’s wives and children, without any recompense. The strong man or the resourceful man had no more share of food, clothes, etc., than the weak man who was not able to do a quarter the other could. This was thought injustice.”

After the second winter, realizing that the colony had survived only through the friendship and largesse of the native Americans, and would soon perish if changes were not made, Bradford tore up the Mayflower Compact. He instead assigned each family a plot of land to be their property, to be worked as the family saw fit, and with the fruits of that land to be their own. It was the beginning of private property rights in the New World.

The result? Again, from his diary: "It made all hands very industrious, so that much more corn was planted than otherwise would have been by any means the Governor or any other could devise, and saved him a great deal of trouble, and gave far better satisfaction.”

From the very day that Bradford tore up the Mayflower Compact, Plymouth began to prosper. Within a year the colonists found themselves with more food than they could eat. Flush with a bountiful harvest far in excess of their need for food and having bartered for all the goods they needed to get through the winter, they had a feast of thanks with their Indian trading partners.

Don't hold your breath waiting for the leftist teachers unions to teach this lesson to your children. Better show them this video from Reason:

You mean Obama's getting tingly pants now?

2011-11-20T15:15:00.000-08:00

So it's mutual?

"MSNBC Matthews turns on Obama" - headline, Drudge Report, November 20, 2011

Penn State plot thickens

2011-11-18T09:54:00.000-08:00

Coincidence? Or is EA Sports part of the coverup?

Happy $15 trillion!

2011-11-17T03:44:00.001-08:00

We're #1 -- the biggest debtor nation in the world, and about to cross 100% debt/GDP -- and that's not counting off-balance sheet garbage like Fannie/Freddie debt, student loan guarantees, Social Security and Medicare liabilities, etc.

And as China starts to back away from holding our bad debt, the Dirty Fed has stepped in to print money and become the largest Treasury holder.

How convenient to be able to spend at will and not have to actually borrow money from real investors. This will surely end well.

Bloomberg censors headline questioning Fed independence

2011-11-15T16:00:00.000-08:00

I was originally going to title this "Breaking News from 2008." That's because Bloomberg ran a story titled, "Fed independence risked by Treasury coziness." That is funny on its own, you know, because the Fed has been the Treasury's goo dumpster, monetizing Treasury's monstrous deficits, ever since Benny and Hank threatened to blow up the world if Congress didn't pass TARP.

Now, however, Bloomberg has changed the headline! Now it's "Fed Employees Serve Treasury in Assignments Deepening Crisis-Forged Ties." Here's a screen cap of the pre-censorship headline.

The Ministry of Truth must not allow the Fed-Treasury money-printing circle jerk to be exposed!

Newt Gingrich took $300,000 bribe from Freddie Mac in 2006

2011-11-15T05:01:00.000-08:00

Newt is neck-deep in the institutional corruption in Washington.

Former Freddie Mac officials familiar with the consulting work Gingrich was hired to perform for the company in 2006 tell a different story. They say the former House speaker was asked to build bridges to Capitol Hill Republicans and develop an argument on behalf of the company’s public-private structure that would resonate with conservatives seeking to dismantle it.

If Gingrich concluded that the company’s business model was at risk and that the housing market was a “bubble,” as he said during the debate, he didn’t share those concerns with Richard Syron, Freddie Mac’s chief executive officer at the time, a person familiar with the company’s internal discussions said.

Newt claims that they were paying him not for influence with Republicans, but for his opinion as a historian. Riiiiiiiiiight. How many third-rate professors who weren't politically connected did they cut $300,000 checks to?

It looks like it was an investment that paid off for the corrupt government-sponsored enterprise. The Republican-controlled House didn't pass GSE reform, and we all know how that worked out for the country. But hey, Newt had to pay for that half-million debt to Tiffany's somehow, right?

They're all whores, with the apparent exceptions of Ron Paul and Gary Johnson.

Herman Cain is an empty suit

2011-11-15T04:29:00.000-08:00

This has been my position from the beginning (I was being too kind, actually, in attributing his lack of specifics to caginess; he actually doesn't know anything).

Glad to see it's catching on.

This dog hates the iPhone

2011-11-14T09:35:00.000-08:00

HT: FilmDrunk

McDanger on Penn State

2011-11-14T08:39:00.000-08:00

Our friend Charlie debates a Texas prosecutor on the similarities between Penn State and the TSA.

Makana - The Many Not The Few

2011-11-13T18:27:00.000-08:00

Here's an Occupier who gets it that Congress and the Dirty Fed are the problem.

That explains a lot about the last three years

2011-11-13T07:45:00.001-08:00

Biden: White House got its economic policy from Jon Corzine.

Religious advice from Jeremiah Wright, legal advice from Eric Holder, "green jobs" advice from Van Jones, health care advice from Peter Orszag, propaganda advice from Kumar.... I'm starting to see a trend here.

Violence comes home

2011-11-12T09:16:00.000-08:00

Charlie McDanger discusses the Police Batons Versus Student Bellies incident at UC Berkeley.

Veterans' Day 2011

2011-11-11T16:01:00.000-08:00

Happy Veterans' Day. And a big thanks to all the veterans and active duty military people out there.

Let's thank and support the troops by bringing them home and ending Obama's military adventurism.

Obama to strangle economic recovery in its crib

2011-11-10T13:15:00.000-08:00

U.S. to Delay Keystone Pipeline Decision

The State Department said Thursday it would postpone until after the 2012 election a decision on an oil pipeline that had raised a furor among environmental groups, a delay that angered the oil industry and unions that have pushed for the project.

The department, in a statement, said it would examine alternate routes for TransCanada Corp.'s Keystone XL pipeline to avoid an environmentally sensitive portion of Nebraska.

That would require an assessment of the new route's environmental impact, which "could be completed as early as the first quarter of 2013," the department said.
The delay is a temporary victory for environmental groups, which have pressed the administration to deny the request by TransCanada to construct a pipeline from Alberta to Texas.

The oil and gas industry as well as unions have urged the administration to approve the project this year, arguing that it will create thousands of jobs and reduce U.S. dependence on oil imports from the Middle East. The government of Canada also supports the project.

"The president is putting politics ahead of American jobs," said a spokeswoman for the American Petroleum Institute. "The project has been under review for three years. This delay would be another year and a half. I don't know what would happen after that."

The very moderate and non-partisan UCSD economist James Hamilton discusses the economic importance of the pipeline here.

Penn State - Have You Been Touched?

2011-11-07T13:03:00.000-08:00

ESPN article here.

Sandusky, who retired from coaching in 1999 after 32 years on Paterno's staff, was arrested Saturday on 40 charges that include felony sex crimes against children. Penn State athletic director Tim Curley and university vice president Gary Schultz have been charged with felony perjury in their grand jury testimony in the case, as well as failure to report to law enforcement what they knew about Sandusky's behavior.

His book:

If you too have been touched by Jerry Sandusky, you are asked to contact the Pennsylvania Attorney General's office located at this fantastic URL (way to be first in line): http://www.attorneygeneral.gov/

Where it states:

...from the messy business of prosecuting its pedophiles. Well until now.

UPDATE:
Apparently the Happy Valley branch of NAMBLA is lending support to Joe Paterno.

To be fair, he was only notified that his ex-assistant coach was showering with a 10 year old boy (which would have been enough for me to dial 911) and having sexual contact with the boy. He told his boss and therefore his conscience is good. Because remember folks, in Pennsylvania, if a grown man rapes a boy, the legal thing to do is tell your boss...WTF???

Extreme poverty in the USA

2011-11-06T01:35:00.000-07:00

Tulsa World:

Cell phone? Check.
Satellite TV? Check.
Enough food to get fat? Check.

Extreme poverty is a real bitch.

Mike Mayo on Wall Street rot

2011-11-05T18:11:00.001-07:00

Wall Street bank analyst Mike Mayo, who called the bank crash:

To fix the banking sector, should we rely more on government regulation and oversight or let the market figure it out? Tougher rules or more capitalism? Right now, we have the worst of both worlds. We have a purportedly capitalistic system with a lot of rules that are not strictly enforced, and when things go wrong, the government steps in to protect banks from the market consequences of their own worst decisions. To me, that's not capitalism.

It's easy to understand the appeal of certain regulation. If we'd had the right oversight in place, we would have limited the degree of the financial crisis, which included bailouts measured in hundreds of billions of dollars and millions of people losing their homes due to foreclosures. But we also would have sacrificed innovations in credit and a vibrant financial sector.

Moreover, the real problem with regulation is that it often doesn't work very well, in part because it's always considering problems in the rearview mirror. The financial system today is almost dizzyingly complex and moving at light speed, and new rules tend to address fairly precise things, like banning specific types of securities or deals.

The more effective solution would come from letting market forces work. That doesn't mean no rules at all—a banking system like the Wild West, with blood on the floor and consumers being routinely swindled. We need a cultural, perhaps generational, change that compels companies to better apply accounting rules based on economic substance versus surface presentation.

Even in 2011, some banks were woefully deficient in detailing the amount of their securities and loans that are vulnerable to the ravages of the European financial crisis. The solution is to increase transparency and let outsiders see what's really going on.

What we need is a better version of capitalism. That version starts with accounting: Let banks operate with a lot of latitude, but make sure outsiders can see the numbers (the real numbers). It also includes bankruptcy: Let those who stand to gain from the risks they take—lenders, borrowers and bank executives—also remain accountable for mistakes. As for regulation, the U.S. may want to look to London for ideas. In the last decade, the U.K. equivalent of the Securities Exchange Commission (called the Financial Services Authority) fired much of its staff and hired back higher-caliber talent, at higher salaries. This reduced the motivation for regulators to jump to more lucrative private sector jobs and improved the understanding between banks and regulators.

A better version of capitalism also means a reduction in the clout of big banks. All of the third-party entities that oversee them need sufficient latitude to serve as a true check and balance. My peer group, the army of 5,000 sell-side Wall Street analysts, can help lead the way to provide scrutiny over the markets. Doing this involves a culture change to ensure that analysts can act with sufficient intellectual curiosity and independence to critically analyze public companies that control so much of our economy.

That's about right: no more Too Big To Fail and no more mark-to-fantasy and off-balance-sheet accounting fraud. Too bad the Dodd-Frank fake financial reform bill did exactly zero to address either of these issues.

Happy Bank Transfer Day!

2011-11-05T09:31:00.000-07:00

Yes, today is the day to close your bank accounts and go to a credit union. Stop supporting the dirty banksters who blew up the economy and corrupted the government.

I must confess that I haven't moved my money yet. I'm looting the dirty banksters by taking them up on serial offers of $100 - $150 to open new credit card, savings, and checking accounts. Currently Citi is handing out Benjis like party favors for opening credit card accounts, and Chase is handing them out for bank deposits. And I make sure never to pay any fees or interest, and not to leave enough money in checking or savings to make it profitable for the bank to hold my account.

It's also important to always return those credit card offer reply envelopes.

UPDATE: ZeroHedge and Karl Denninger on why REAL capitalists choose credit unions.

And now for something completely different: Hugh Hendry

2011-11-05T07:39:00.001-07:00

If it's not Scottish, it's crap. And outspoken hedge fund manager Hugh Hendry is most certainly Scottish.

For years, we at the W.C. Varones blog have been advocating owning gold and equities, primarily because the federal government's debt and deficit situation is beyond the point of no return and far more likely to be resolved by money-printing than default.

Via ZeroHedge, Hugh Hendry gives us the other view: inflation is the consensus trade and it's wrong. We are going into debt deflation and the dollar will strengthen.

In the US, he says, capital has always been allocated where it could achieve the highest return [until Obama: Government Motors, AIG, Fannie/Freddie, Solyndra... -ed.]. In the 19th century, when America was the economic upstart on the block, it was also on the gold standard. Which is very important, according to Hendry, because it allotted entrepreneurs one – and only one – chance to succeed. It was not a time of bailouts and multiple bankruptcies!

China is different, he believes, because it is industrializing with a fiat currency. Thus they fall into the trap of misallocating capital – building bridges to nowhere, towers for nobody, and so on. China’s goal is similar to that of 1980’s Japan in his opinion – full employment, rather than maximizing return on capital. A critical, and even fatal, difference, in his mind.
You know the old drill – China and Asia produce, the US consumes. They cycle their greenbacks back over this way, finance our debt, we buy more of their stuff, and the beat goes on.

This model officially stopped with the launch of QE2, Hendry says, as the US officially started rejecting the globalization that had made the global economy hum (perhaps largely at the expense of US employment and manufacturing). With QE2, dollars were printed and exported – along with inflation – to Asia.
[...]
Because wage labor is approximately 70% of total business costs, he does not see meaningful inflation without wage inflation.

He’s also down on gold because it is not a contrarian investment today as it was 10 years ago (he had a nice year in 2003 buying gold and gold stocks when nobody wanted them).

The widespread belief among the greatest financial minds today that hyperinflation is inevitable greatly disturbs him.

In the Western world, he sees hyperinflation as a political choice – one that requires the will of the populous. (Forget Zimbabwe, he says – that might as well be Timbuktu. It’s not our culture.)

He sees society’s current mood as “dark” (Tea Party, Occupy Wall Street, and social unrest in Europe to name a few), and believes this makes bailouts and money printing very hard. The only environment that makes hyperinflation possible is “the mother of all depressions” he says.

All of which is possible, I suppose, but "hyperinflation" is a straw man. I'm not calling for hyperinflation, just inevitable eventual debasement of the dollar. This could take the form of 70's style stagflation, or Argentinian-style step devaluation, or slow and steady erosion of the dollar just like the Federal Reserve has done the last 100 years. The "political choice" is not hyperinflation, but inflation vs. depression. Even the Tea Party electoral tsunami and debt-ceiling posturing didn't make a dent in federal spending or the deficit. What makes Hendry think austerity will become politically popular now?

Two problems with Hugh's view:

1) If we do get his crash, how on earth does Ben Bernanke (or even a more sober successor) not print money in response? (Similarly, does he really think Europe will choose default and banking system collapse rather than printing?)

2) The U.S. Federal Government is currently running deficits of 9% - 10% of GDP, and in a depression scenario this would get even worse as revenues declined and social welfare costs increased. Running double-digit percent of GDP deficits is not consistent with a strong dollar or deflation.

Protesting? We got shirtz.

2011-11-03T09:46:00.000-07:00

Get our Hope/Change design delivered to your door for a measly twelve bucks. Order here.

Rasmussen: Americans want the gold standard!

2011-11-02T06:43:00.000-07:00

This could be the issue that unites the Tea Party and Occupy Wall Street. It addresses both big government and the dirty banksters.

Forbes:

Superpollster Scott Rasmussen has pulled the pin and rolled one of his patented hand grenades under the chair of the Political Class. Rasmussen’s “October Surprise” is contained in a recent poll showing 44% of likely voters favor returning to the gold standard, 28% opposed. That intensifies. If the public knew that it would “dramatically reduce the powers of bankers and the political class to steer the economy” support goes up to 57%. Opposition drops to 19%.
[...]

The only solid majority opposition comes, unsurprisingly, from self-described members of the political class. If anybody picks up on this dynamic it could prove decisive in what remains a remarkably fluid field with early contests fast approaching.

So what we have is an education challenge. The more the public learns how fiat currency has enabled both government and Wall Street to run amok, the more they'll support a return to the gold standard. These pages are a good starting point. Tell a friend.

Global Competitive Devaluation continues

2011-11-01T04:36:00.000-07:00

We've been predicting Global Competitive Devaluation here for years.

Now, The Economist discusses:

What are the potential implications of a world in which many large economies are weighing the benefits of competitive devaluation?

The first point to make is that Japan is not particularly good at this game. Large, one-off interventions against a backdrop of sustained deflation are unlikely to be effective; markets know the yen will be going back up again in no time. Second, a real intervention would be very good for Japan. Consumer prices are falling in Japan, as they tend to. Were the Bank of Japan to make a concerted effort to print yen and sell them for other things—dollars, say—then deflation might finally be vanquished and the economy might stumble into sustained growth for a change.

Third, that kind of intervention would have a direct, negative impact on other economies, whose currencies would appreciate relative to the yen. This negative impact could easily be offset, however, if those economies were to respond by printing their currencies and using them to buy yen. No one would get an exchange rate advantage, but broad monetary easing would lead to reflation, a higher level of aggregate demand, and better conditions in depressed economies. If everyone plays along, the net effect is of a coordinated monetary stimulus. Fourth, however, if other central banks are reluctant to play along, then elected governments may respond to pressure from foreign exporters by adopting trade restrictions. This was the common response among gold bloc countries to devaluations by other economies.

In sum, a crummy economic situation will encourage economies to pursue competitive devaluation. This action needn't be globally harmful and it could kick off a beneficial series of imitative efforts, approximating coordinated stimulus. There is a risk, however, that it will lead to a troubling unravelling of liberal trade regimes. It would therefore seem to be a good idea to skip right to the coordinated stimulus, which would reduce the pressure for risky economic policies in the first place.

And in the wake of The Economist's post, today the Australian central bank, custodian of one of the world's recently relatively sound currencies, takes a first step toward easing by cutting interest rates.

Shall we play a game?

Love to. Let's play Global Competitive Devaluation.

Wouldn't you prefer a nice game of chess?

Later. Let's play Global Competitive Devaluation.

Fine.

Got gold?

Common ground between the Tea Party and Occupy Wall Street

2011-11-01T04:21:00.000-07:00

Check out these thoughts at Liberator Today which echo our own.

Danny Elfman on the 99%-ers

2011-10-29T19:58:00.000-07:00

Ladies and gentlemen, the genius behind Oingo Boingo, The Simpsons and Nightmare Before Christmas soundtracks, and Jenna Elfman:

I'm so tired of hearing you whine
About the revolution
Bringin' down the rich
When was the last time you dug a ditch, baby!

You're just a middle class, socialist brat
From a suburban family and you never really had to work
And you tell me that we've got to get back
To the struggling masses (whoever they are)
You talk, talk, talk about suffering and pain
Your mouth is bigger than your entire brain
What the hell do you know about suffering and pain . . .

Movie Review: Drive

2011-10-27T21:20:00.000-07:00

I recently saw Drive, not knowing anything about it other than it inspired a man to throw a hot dog at Tiger Woods because he "wanted to do something courageous and epic."

The movie is strange. It starts off with pink script credits reminiscent of Miami Vice or 80's John Hughes teen movies. And the soundtrack, though original, is heavily influenced by 80's music.

After an opening heist and getaway scene sets the hook, the film turns to a character drama replete with love interest, cute kid, flawed but loving mentor, etc. And then Ryan Gosling does the worst James Dean act I've ever seen. He stands around, wearing a denim jacket, leaning against doorways, and not talking. Except he doesn't look cool and disaffected as James Dean did. He looks retarded. I thought this might be Gilbert Grape 2: The Driver Years.

The theme song from the movie is "A Real Hero" by "College featuring Electric Youth," though I'm not sure whether College is the chick singer and Electric Youth is the synthesizer or vice versa. The lyrics were so clunky that I initially thought they were a tribute to the retard Gosling, but alas, they appear just a contorted way to arrive at the line "Real human being, and a real hero..." as a chorus which sounds really cool the way the chick with the great voice sings it to Top Gun music.

All of which is a really bizarre way to lead up to the main point of this review: you have got to go see this movie. It is amazing. It is a real genre-bender. The bad acting fades away and the weird music becomes compelling. The film is a good human drama and a good action movie (one middle-aged couple left mid-film because of some Tarantino-ish ultraviolence), and the combination of the two is incredible.

I can't begin to do justice to this movie, so let me leave you with this song which I initially found so cheesy and now can't stop listening to.

It Depends What the Definition of Default Is

2011-10-27T13:21:00.000-07:00

You silly sovereign CDS holders thought you had something of value didn't you? I'm so sorry, the appropriate instrument for today's "event" is the CHS - Credit Haircut Swap. Credit Default Swaps on sovereigns are worthless. Thanks for the risk-less cash flow though, piggy.

More from ZH, the source of the graphic

So,
the European joke has come full circle. Indebted nations borrow more
money to bail out other indebted nations who ask insolvent banks to cut a
50% off deal on the loans that were given to them, but the insolvent
banks will then have to raise capital which the will of course borrow
from the over-indebted nations whom they just gave money to. Get it?
Problem solved - BTMFD!!!

Also Mish with some commentary

As a result of labeling 50% haircuts "voluntary", Credit Default Swap contracts have proven to be useless when it comes to protecting against sovereign default. The serious implication is investors will need to find another way to hedge.

And Denninger

In yet another stunning "agreement", this will somehow not trigger credit default swaps - in other words, they're not really default swaps any more, now they're "whatever we call thems when we want them to be whatevers."

UPDATE: another ZH Post authored by Finance Addict

The big question–apart from how many investors they will get to go along with this, given that they couldn’t reach their target of 90% investor participation when the write-down was only going to be 21%–is whether this will trigger a CDS pay-out.

That this is even up for discussion is mind-boggling. These credit default swaps are meant to be an insurance policy in case Greece doesn’t pay the agreed upon interest and return the full principal within the agreed timeframe. If they don’t pay out when bondholders are taking a 50% hit then what’s the point? I call shenanigans.

Sound familiar?

2011-10-25T22:33:00.001-07:00

Fiat currencies of the ages: French Assignats.

HT: Jesse.

When Irony Attacks!

2011-10-25T04:28:00.000-07:00

A mere month into the grand experiment that is Occupy Wall Street, the kids discover the joys of dictatorial bureaucrats who take all their money and tell them what to do.

Even in Zuccotti Park, greed is good.

Occupy Wall Street’s Finance Committee has nearly $500,000 in the bank, and donations continue to pour in -- but its reluctance to share the wealth with other protesters is fraying tempers.

Some drummers -- incensed they got no money to replace or safeguard their drums after a midnight vandal destroyed their instruments Wednesday -- are threatening to splinter off.

“F--k Finance. I hope Mayor Bloomberg gets an injunction and demands to see the movement’s books. We need to know how much money we really have and where it’s going,” said a frustrated Bryan Smith, 45, who joined OWS in Lower Manhattan nearly three weeks ago from Los Angeles, where he works in TV production.

Smith is a member of the Comfort Working Group -- one of about 30 small collectives that have sprung up within OWS. The Comfort group is charged with finding out what basic necessities campers need, like thermal underwear, and then raising money by soliciting donations on the street.

“The other day, I took in $2,000. I kept $650 for my group, and gave the rest to Finance. Then I went to them with a request -- so many people need things, and they should not be going without basic comfort items -- and I was told to fill out paperwork. Paperwork! Are they the government now?” Smith fumed, even as he cajoled the passing crowd for more cash.

The Finance Committee dives on whatever dollars are raised by all the OWS working groups, said Smith, and doesn’t give it back.

These kids just got more education in one month about how the real world works than they got in their five-year, $100,000 debt, Grievance Studies programs.

Steve Jobs, teabagger

2011-10-20T21:15:00.000-07:00

HuffPo via Instapundit:

“You’re headed for a one-term presidency,” he told Obama at the start of their meeting, insisting that the administration needed to be more business-friendly. As an example, Jobs described the ease with which companies can build factories in China compared to the United States, where “regulations and unnecessary costs” make it difficult for them.

Jobs also criticized America’s education system, saying it was “crippled by union work rules,” noted Isaacson. “Until the teachers’ unions were broken, there was almost no hope for education reform.”

I am the 99%

2011-10-20T19:17:00.001-07:00

I've never posted a picture of myself on the blog before, and I think it's about time I do so.

Greenspan's Body Count: Samuel Friedlander, Amy Friedlander, Molly Friedlander, Gregory Friedlander

2011-10-19T17:34:00.001-07:00

Serial killer Alan Greenspan paid a visit to the wealthy New York suburb of Cross River:

A Westchester County attorney, apparently facing financial straits and a crumbling marriage, bludgeoned his wife to death, then shot and killed the couple's two children before turning the gun on himself, authorities said.

New York State Police said they believe 50-year-old Samuel Friedlander repeatedly struck Amy Friedlander, 46, with a blunt object during a heated argument in the master bedroom of their Lewisboro home sometime around midnight Monday night. He then walked down the hallway and shot his two children with a 12-gauge Remington 870 shotgun as they lay in bed, according to state police spokesman Major Michael Kopy.

[...]

Several media outlets reported that the couple's house had been put up for sale.

Michael Foley, a New York City police officer turned associate criminology professor at Western Connecticut State University, said that in many cases, people who come from more affluent backgrounds are less equipped to handle financial crises.

"I think everybody has a different coping mechanism. If you've always been poor and you're still poor, you don't know any different," Foley said, although he was quick to point out that domestic violence is not particularly prevalent among the wealthy. "I think that everybody, with the exception of the extremely affluent, they live check-to-check. It's just that their toys cost more."

His colleague in WestConn's Justice and Law Administration Department, George Kain, who is also the acting police commissioner in Ridgefield, agreed with Foley.

"The stress for those people (the wealthy) is much, much more intense, because they've never had to deal with that before," Kain said. "It's much different when you're an affluent person making a six-figure income and you can't make a mortgage payment."

The Friedlanders bought their house at 2 Lambert Ridge Road in 2002 for $737,500, and had been trying to sell it since May. It was "worth" well over a million dollars in Greenspan's bubble. Property taxes on the house were $18,956 a year, more in taxes alone than the median American household pays in rent or mortgage.

UPDATE: Yup.

They took a second, $100,000 mortgage out on the house in 2005, according to county property records.

Greenspan's Body Count stands at 194.

Steve Wynn goes off again about how Obama is destroying the economy

2011-10-19T15:51:00.000-07:00

On his 3rd quarter earnings call, courtesy ZeroHedge [bad transcription corrected by WCV]:

What you do have on Wall Street is a reflection of the anxiety, insecurity and the fear that is endemic in the United States of America about the way government has gotten into the business of managing everyone's life and the ability of the government to manage the economy intelligently, by increasing these deficits, and government spending irrationally to the point of threatening everybody's financial security. I am watching my employees' standard of living drop like a rock because of deficits. I think that the American public is beginning to make the connection between deficits and their own loss of living standard.

People that work for me are being paid in 80-cent dollars on the way to 70-cent dollars, and even though I have given two cost of living increases to my employees, in spite of operating losses in America, because I've been able to use some money from Macau. I have not been able to keep up with the effect of deficits on the living standard of my employees. The net result of all of this is frustration, anxiety, and anger.

Click on over and listen to the whole rant, starting at minute 45 in the embedded audio.

Glorious

2011-10-18T08:54:00.000-07:00

I wonder how the 99% feel about property rights now that their sh*t is being stolen?

Occupy Wall Street protesters said yesterday that packs of brazen crooks within their ranks have been robbing their fellow demonstrators blind, making off with pricey cameras, phones and laptops -- and even a hefty bundle of donated cash and food.

BREAKING: America leaderless as Obama's Teleprompter is stolen!

2011-10-18T07:00:00.000-07:00

Henrico, Virginia:

A truck filled with President Obama's podiums and audio equipment was stolen in Henrico just days before his visit to Chesterfield.

We confirmed an investigation with the U.S. Defense Department. There are still a lot of questions. The biggest one being did the thieves intentionally target the President's truck or did they take advantage of a crime of opportunity and give a big "uh-oh" when they saw what was inside.

When you see President Obama speak, there is a pretty typical setup including the presidential seal on a podium, the see-thru Teleprompter and a portable sound system.

Thieves saw the truck carrying that equipment and couldn't resist the target.

We're told the truck was parked at the Virginia Center Commons Courtyard Marriott in advance on Wednesday's presidential visit to Chesterfield.

The thieves are reportedly holding TOTUS for ransom, but the American public is refusing to take their phone calls.

2011-10-17T19:30:00.000-07:00

"Loose lips sink ships, but they also gobble up seamen."
-Old Zeke's Adages and Additions

We are the 53%

2011-10-17T16:25:00.000-07:00

A great response to the "We are the 99%" crowd is We are the 53%. That's 53% as in the percentage of Americans who pay taxes while the other 47% contributes nothing (yes, it's safe to assume that 99% of the 99% are in the 47%).

Read through the people's life stories. It's amazing how so many start out just like the 99%-ers. But then they diverge: the 53%-ers went to work while the 99%-ers went whining for a handout.

We don't have a "rich not paying their fair share" problem

2011-10-17T12:04:00.001-07:00

... We have a Warren Buffett not paying his fair share problem.

HT: T-Dub.

I am the 1%

2011-10-15T18:40:00.000-07:00

Photo courtesy Exurban League.

Gold and Asset Allocation: Less Risk, More Return

2011-10-15T12:08:00.000-07:00

One of the basic principles of investing is that expected return increases with risk. The "safest" investments like FDIC-insured CDs and short-term Treasuries have essentially zero risk of loss of principal, but you will earn close to zero on them. Corporate bonds are riskier but will return more on average. Stocks are still riskier but can be expected to earn even more, perhaps several percentage points above inflation over the long run.

The range of possible optimal portfolios then looks something like this, with cash and conservative bond-heavy portfolios in the lower left corner and aggressive stock-heavy portfolios in the upper right. The below, from Charles Schwab, is based on actual returns since 1/1/2009 for various mixes of cash, bonds, large cap, small cap, and international equity. This was a period of strong market returns, so the numbers are higher than long-run expected returns, but the shape of the curve is the same.

On the vertical axis is annualized return, and on the horizontal axis is the volatility (standard deviation of returns) of the portfolio, which is "risk" as defined by academics and investment practitioners (which is a silly way to define risk, but that's a discussion for another day).

Portfolios that lie below the curve are by definition bad portfolios -- taking on too much risk for the amount of return they earn. The Holy Grail would be to be able to build a portfolio that lies above this curve. Which, incidentally, is what you've done if you added gold to your portfolio.

The below portfolio returns are the actual results of an actual investor following the Varones investment strategy of mostly stocks with some cash and gold thrown in.

Given what gold has done has done the past few years, it's not surprising that adding a little gold increased portfolio returns. But what's really beautiful is how gold also reduces portfolio risk. The portfolio returned more than Schwab's "Aggressive" model, but had volatility in line with the "Moderate" model. This has been true long before gold's recent surge. It's because the correlation of gold with other asset classes like stocks, bonds, and real estate is low and even sometimes negative. All this information was available to anyone five years ago, and if gold returns were plugged into any asset allocation model, it would have recommended at least a few percent in gold. And all this is completely apart from, and in addition to, the fundamental reasons this blog has been pounding the table on gold the last few years. So if your financial advisor left you with a zero weight in gold, she's got some 'splaining to do.