Occupy Wall Street vs the Tea Party

[Shine]

Shine is your contention that Stocks have preformed poorly?  Remember 6500 just a two and a half years ago? The market has almost doubled under Obama.

Obama had little to do with why the Dow was cut in half back in the Spring of 09 â€" and the policy actions the administration took as a result are inconclusive to what affect they had, positive or negative.  Politicians are quick to own success and make failure and orphan.  As for stocks, the Dow was at 10,000 in 2000.  And have averaged out not far from that level.  With inflation, that makes stocks a fairly stagnant investment through much of the decade.  Stock prices are ultimately determined by earnings and accumulation of assets.   The phrase, “a rising tide lifts all ships” is an accurate one â€" a good economy will result in more jobs, better pay and an increase in consumption.  Consumption growth is arguably the single most important factor in corporate earnings.

If you bought into the market when the Dow went below 7000 (literally a matter of days to do it) then you made a lot of money.  Fact is, the markets went that low because most people were selling and many are still out of the market, putting them more in a posture of loss, not gain.  Don’t get me wrong, I think we need reforms and reforms will be good for workers, corporations and stock investors.   But, I hold to my initial point in that conservative interest are not going to take any action of the agenda of OWS, and I, like others, are not totally clear on what that agenda is.  OWS needs to attempt to motiveate its political ally - liberal and reform oriented elected officials. Complaints about Tea Partiers is wasted effort.

[FayeforCure]

OWS needs to attempt to motiveate its political ally - liberal and reform oriented elected officials. Complaints about Tea Partiers is wasted effort.

OWS knows the system is corrupt..........there are very few people in congress that can be motivated to act decisively to protect the interest of the people. For example lead paint is A-ok again in this country of ours since a few days ago.

There is only one strong voice in Florida and that is the voice of Alan Grayson...........he will say it like it is and fight corruption where he sees it.

That's why you intramural approach may be futile.........it may need to be an outside the box approach......

[finehoe]

In the last 30 years the top 1% of Americans saw their real, after-tax  income increase nearly fourfold. And how about the "other" 99%? Look below

The chart appears in an article in The Economist (Income Inequality in America:The 99 Percent), which includes the following passage:

...the data are powerful because they tend to support two prejudices. First, that a system that works well for the very richest has delivered returns on labour that are disappointing for everyone else. Second, that the people at the top have made out like bandits over the past few decades, and that now everyone else must pick up the bill.

Couldn't have said it better myself (and I don't frequently agree with The Economist).


The chart in The Economist article comes from a very interesting study done by the US Congressional Budget Office.  The following chart is on its cover.


Class warfare indeed.

[JeffreyS]

Shine is your contention that Stocks have preformed poorly?  Remember 6500 just a two and a half years ago? The market has almost doubled under Obama.

Obama had little to do with why the Dow was cut in half back in the Spring of 09 â€" and the policy actions the administration took as a result are inconclusive to what affect they had, positive or negative.  Politicians are quick to own success and make failure and orphan.  As for stocks, the Dow was at 10,000 in 2000.  And have averaged out not far from that level.  With inflation, that makes stocks a fairly stagnant investment through much of the decade.  Stock prices are ultimately determined by earnings and accumulation of assets.   The phrase, “a rising tide lifts all ships” is an accurate one â€" a good economy will result in more jobs, better pay and an increase in consumption.  Consumption growth is arguably the single most important factor in corporate earnings.

If you bought into the market when the Dow went below 7000 (literally a matter of days to do it) then you made a lot of money.  Fact is, the markets went that low because most people were selling and many are still out of the market, putting them more in a posture of loss, not gain.  Don’t get me wrong, I think we need reforms and reforms will be good for workers, corporations and stock investors.   But, I hold to my initial point in that conservative interest are not going to take any action of the agenda of OWS, and I, like others, are not totally clear on what that agenda is.  OWS needs to attempt to motiveate its political ally - liberal and reform oriented elected officials. Complaints about Tea Partiers is wasted effort.

I would agree Obama was not the driving force behind how phenomenally Wall Street has preformed recently.  I would point out he had nothing to do with it's decline.  The point I was calling you on was your false claim that Wall Street has not done well when it has probably had it's best three years in almost a century.  Wall Street is not the best barometer of the rising tide for corporations corporate profits are ( not total revenue) unfortunately that tide has been trickling down to places like China and India and cutting out the American worker. 

Your basic premiss seems reasonable OWS is not the movement to end all movements it is a cry for help.  It will mature or perhaps be a flash that fades.  It is just pointing out that we seem to have forgotten the average citizen in our efforts to have the best economy possible. 

[Shine]

In the last 30 years the top 1% of Americans saw their real, after-tax  income increase nearly fourfold. And how about the "other" 99%?

These things are very true.  The rich have gotten richer.  But there is still the issue of the political affinity of those in that segment and the assumption that their level of political influence has changed.  The assumption that this “1%” is the political bad guy, may or may not be accurate.  Looking at our local community, a few years back, the new fees John Peyton proposed to sustain local revenue levels were largely backed by the social elite who did not want social programs like libraries and stipends to groups such as Sulzbacher on the chopping block.  Consider the recent Mayor’s race.  Many of the people of wealth in this community, jumped party, got behind Democrat Alvin Brown because they did not want Hogan’s view of cutting social programs and slashing economic development.  I am not trying to say one political point of view here is right or wrong but OWS brings the assumption that people in this “1%” are uniformly corrupt.  Where is the evidence of that?  Again, its easy to say it’s the “1%” when they are unnamed, faceless â€" anonymous.

[Shine]

The point I was calling you on was your false claim that Wall Street has not done well when it has probably had it's best three years in almost a century. 

So the Dow was basically cut in half, then gains back only 85% of its high and that is your view of a Bull market?  You would fit right in on Wall Street.  LOL!

[buckethead]

In the last 30 years the top 1% of Americans saw their real, after-tax  income increase nearly fourfold. And how about the "other" 99%?

These things are very true.  The rich have gotten richer.  But there is still the issue of the political affinity of those in that segment and the assumption that their level of political influence has changed.  The assumption that this “1%” is the political bad guy, may or may not be accurate.  Looking at our local community, a few years back, the new fees John Peyton proposed to sustain local revenue levels were largely backed by the social elite who did not want social programs like libraries and stipends to groups such as Sulzbacher on the chopping block.  Consider the recent Mayor’s race.  Many of the people of wealth in this community, jumped party, got behind Democrat Alvin Brown because they did not want Hogan’s view of cutting social programs and slashing economic development.  I am not trying to say one political point of view here is right or wrong but OWS brings the assumption that people in this “1%” are uniformly corrupt.  Where is the evidence of that?  Again, its easy to say it’s the “1%” when they are unnamed, faceless â€" anonymous.

Good post.

I'm not a fan of the 1% labeling. The 99% is also a misnomer. There are corrupt welfare recipients, just like there are corrupt Wall St bankers.

I agree with placing blame directly where it belongs, and in some cases, the blame belongs on all of us.

That said, I don't believe OWS is anti-capitalist. (some within their ranks are, but I don't see them as a majority or even relevant within the movement)

[buckethead]

In the last 30 years the top 1% of Americans saw their real, after-tax  income increase nearly fourfold. And how about the "other" 99%? Look below

The chart appears in an article in The Economist (Income Inequality in America:The 99 Percent), which includes the following passage:

...the data are powerful because they tend to support two prejudices. First, that a system that works well for the very richest has delivered returns on labour that are disappointing for everyone else. Second, that the people at the top have made out like bandits over the past few decades, and that now everyone else must pick up the bill.

Couldn't have said it better myself (and I don't frequently agree with The Economist).


The chart in The Economist article comes from a very interesting study done by the US Congressional Budget Office.  The following chart is on its cover.


Class warfare indeed.

These charts do not account for persons within each category. They are meaningless without knowing if less people are in the bottom quintile while more are in the top, for instance.

Charts and graphs can be used to make virtually any point, no matter how nonsensical. (not calling your point nonsensical)

Earning money legally is just that. A garbage man is not likely to earn the same as a lawyer.

A student can become either.

I would rather focus on creating and re-instating laws that protected citizens from wall st gamblers than base laws on economic equality.

Should the garbage man make the same as a lawyer?

(Garbage men do fairly well, fwiw)

[finehoe]

The Occupiers’ Responsive Chord

Monday, October 31, 2011

A combination of police crackdowns and bad weather are testing the young Occupy movement. But rumors of its demise are premature, to say the least. Although numbers are hard to come by, anecdotal evidence suggests the movement is growing.

As importantly, the movement has already changed the public debate in America.

Consider, for example, last week’s Congressional Budget Office report on widening disparities of income in America. It was hardly news â€" it’s already well known that the top 1 percent now gets 20 percent of the nation’s income, up from 9 percent in the late 1970s.

But it’s the first time such news made the front page of the nation’s major newspapers.

Why? Because for the first time in more than half a century, a broad cross-section of the American public is talking about the concentration of income, wealth, and political power at the top.

Score a big one for the Occupiers.

Even more startling is the change in public opinion. Not since the 1930s has a majority of Americans called for redistribution of income or wealth. But according to a recent New York Times/CBS News poll, an astounding 66 percent of Americans said the nation’s wealth should be more evenly distributed.

A similar majority believes the rich should pay more in taxes. According to a Wall Street Journal/NBC News poll, even a majority of people who describe themselves as Republicans believe taxes should be increased on the rich.

I remember the days when even raising the subject of inequality made you a “class warrior.” Now, it seems, most Americans have become class warriors.

And they blame Republicans for stacking the deck in favor of the rich. On that New York Times/CBS News poll, 69 percent of respondents said Republican policies favor the rich (28 percent said the same of Obama’s policies).

The old view was anyone could make it in America with enough guts and gumption. We believed in the self-made man (or, more recently, woman) who rose from rags to riches â€" inventors and entrepreneurs born into poverty, like Benjamin Franklin; generations of young men from humble beginnings who grew up to became president, like Abe Lincoln. We loved the novellas of Horatio Alger, and their more modern equivalents â€" stories that proved the American dream was open to anyone who worked hard.

In that old view, being rich was proof of hard work, and lack of money proof of indolence or worse. As Herman Cain still says “if you don’t have a job and you’re not rich, blame yourself.”

But Cain’s line isn’t hitting a responsive chord. In fact, he’s backtracked from it (along with much of the rest of what he’s said).

A profound change has come over America. Guts, gumption, and hard work don’t seem to pay off as they once did â€" or at least as they did in our national morality play. Instead, the game seems rigged in favor of people who are already rich and powerful â€" as well as their children.

Instead of lionizing the rich, we’re beginning to suspect they gained their wealth by ripping us off.

Mitt Romney is defensive about his vast wealth (reputed to total a quarter of a billion). He’s reverted to scolding his audiences on the campaign trail for “attacking people based on heir success.”

The old view was also that great wealth trickled downward â€" that the rich made investments in jobs and growth that benefitted all of us. So even if we doubted we’d be wealthy, we still gained from the fortunes made by a few.

But that view, too, has lost its sheen. Nothing has trickled down. The rich have become far richer over the last three decades but the rest of us haven’t. In fact, median incomes are dropping.

Wall Street moguls are doing better than ever â€" after having been bailed out by the rest of us. But the rest of us are doing worse. CEOs are hauling in more than 300 times the pay of average workers (up from 40 times the pay only three decades ago), as average workers lose jobs, wages, and benefits.

Instead of investing in jobs and growth, the super rich are putting their money into gold or Treasury bills, or investing it in Brazil or South Asia or anywhere else it can reap the highest return.

Meanwhile, it’s dawning on Americans that in the real economy (as opposed to the financial one) our spending is vital. And without enough jobs or wages, that spending is drying up.

The economy is in trouble because so much income and wealth have been going to the top that the rest us no longer have the purchasing power to buy the goods and services we would produce at or near full employment.

The jobs depression shows no sign of ending. Personal disposable income, adjusted for inflation, was down 1.7 percent in the third quarter of this year â€" the biggest drop since the third quarter of 2009. Housing prices have stalled, home sales are down.

The only reason consumer spending rose in September is because we drew from our meager savings â€" mostly in order to pay medical bills, health insurance, and utilities. That’s the third month of savings declines, according to the Commerce Department’s report last Friday.

This can’t and won’t continue. Savings are now down to 3.6 percent of personal disposable income, their lowest level since the recession began.

Americans know a rigged game when they see one. They understand how much money is flowing into politics from the super rich, big corporations, and Wall Street â€" in order to keep their taxes low and entrench their privileged position. 

The Occupy movement is gaining ground because it’s hitting a responsive chord. What happens from here on depends on whether other Americans begin to march to the music â€" and organize.

http://robertreich.org

[JeffreyS]

The point I was calling you on was your false claim that Wall Street has not done well when it has probably had it's best three years in almost a century. 

So the Dow was basically cut in half, then gains back only 85% of its high and that is your view of a Bull market?  You would fit right in on Wall Street.  LOL!

Fair enough.  I would  contend that 14161 number (2006 I believe) was a bubble.  Your 7 year number is up, your 10 year number is up.  The people keep or lose their job, make or don't make their bonuses based on what have you done for me lately and in that vein Wall Street people keeping their eye on the quarterly reports are doing happy dances over what has been going on here recently.  Now if your the guy who wanted to retire two years ago based on your investments you are stuck for a while longer.

When I say Wall Street has done well I mean the people working in the investment industry the manipulators not the main street investors.  The main street investors have had to sit and wait and will have to a while longer.

[buckethead]

Thoughts on a Modern Revolution

Part I.  Why it won’t come easy…

Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

â€"United States Declaration of Independence

There seems to be a division of thinking when it comes to the 1% vs everybody else.  Many people seem to think that their extreme advantage of resources, the power inherent in the existing structure, and the technology they have access to will ensure their continued dominance.  Others argue that because they are outnumbered 99 to 1 they can only maintain their control if the 99% remain compliant.  While I favor the latter view, questions remain: what percent need to resist in order for the existing power structure to be overthrown?   How does the average citizen overcome the massive advantages available to the existing authority?  Can this be accomplished with peaceful means, or will the conflict escalate into violence?  What does history teach us to expect in the resolution of this crisis?  If the existing structure is torn down, will it be replaced by something better or something worse?

In part 1 of this series, we will investigate the strength of the existing authority, and the inherent advantages that the authority holds over the average citizen who would consider resistance.  In part 2, we will look at the inherent strengths that the average citizen has in resisting the existing authority.  In part 3 we will look at some of the various methods and strategies that the resistance can pursue.  And in part 4 we will try to draw some conclusions about the path this crisis phase will take and what history teaches us to expect.

This is not authoritative commentary.  This is simply my observation and analysis of the challenges and opportunities that exist to the citizens that are contemplating resistance in an effort to restore the existing government to its constitutional origins or to another form entirely.  I welcome your commentary, perspective and wisdom in this study.

Let us look at the various ways in which the 1% are able to maintain their power.  First of all is momentum.  It is human nature to resist major changes.  Sure we like to change to the next new iPhone, but when it comes to major aspects of how we perceive our role in everyday life we ignore, deride, ridicule, or directly oppose both the change as well as those who are advocating it.  For that reason most of the major changes we have witnessed in our lifetimes are a result of tiny, seemingly insignificant changes that incrementally alter the way things are.  Freedom, taxation and legislation have all incrementally mutated from emancipated, transparent and accessible to incarcerated, opaque and ϋber statutory.
   
It takes a major shock to convince people that a change is worthy of the effort required to enact it.  Normalcy bias, fear, laziness, and ambivalence all fight to keep things the way they are.  Our overall wealth as a society and the extreme amount of “assistance” given over to what has become a large percentage of the populationâ€"the disabled, unemployed, and derelictâ€"have insulated us by and large from hardships that have driven other populations around the world to protest, resistance, and violence.  Our poor are not starving; they are obese.  Our unemployed are not desperate; they are better off with their benefits than with a job.  More people are added to the rolls of the disabled every day by the expansion of the definition of disabled, and by the fact that in many cases they can receive more income while doing nothing productive (SNAP, medical, and direct payments) than they could earn with hard work.





Because of the distortion created and enforced by the various entitlement programs at the federal, state, and local levels, we have witnessed dramatic increases in the numbers of participants in these programs.  In turn we have seen the tax revenues that support these programs that are paid through the work of productive citizens drop as more and more  people become net recipients of government funds and fewer and fewer people are net contributors.  This trend is clearly unsustainable; however, each new person added to the dole is another person that would have to vote for change that would negatively impact their immediate circumstances.  History suggests that very few people will be willing to support actions that would hurt their personal short term circumstances in favor of society’s long term prosperity.  The consequence of this dynamic is that there will be no slow, transitional wind down of these programs.  Instead these programs and the numbers of people involved will continue to grow until the programs fail catastrophically.  For that reason, it is my assessment that the growing pool of beneficiaries will not be a significant part of any anti-establishment movement, protest, or revolution.

A contributing factor to the momentum of the establishment and the slow response of the average citizen is the lack of hardship and suffering he faces.  Very few people in the United States go hungry.  Very few people are denied medical care.  Very few people lack clean water, sleep without shelter, lack adequate clothing, have no access to education, can afford no entertainment, or have no access to sanitation.  We are by global comparison a very rich country, and even the poorest in this country live beyond the means of billions worldwide.  In short we all have quite a bit to lose, and that changes the riskiness of choosing to resist.

In my personal situation I have a wife and two children, I own a business that employs 14 people, I have property and investments (not a lot), I have 5 sisters, my mom and pop are living, and I have many close ties in my community.  If I choose to resist the government I put all of those people, all of my property, and all of my ties at risk.  I also put my life and health at risk.  I put my freedom at risk (such as it is).  In essence I put everything that is near and dear to me at risk, and that does (and should) enter into my decision to resist or to comply.

With our poorest tamed by the entitlements they would lose if they resist, the burden of resistance then falls upon a group of people with plenty to lose.  Their incentive is the awakening to the reality that not resisting may cost them all of the same things; however, the risk equation remains “if I resist I will risk all of my treasured people and possessions” vs. “if I resist I may risk all of my treasured people and possessions.”

Another significant factor in favor of maintaining control by the existing authority is force.  The establishment powers, whether behind the scenes (the bankers) or in full view (the politicians) have near complete capture of all the federal (the military, DHS, CIA, FBI, et al), the state (National Guard, SBI, State Troopers, et al) and local (sheriff, city police, et al) agencies.  While there is some question floating around the blogosphere about whether or not the members of those agencies will be willing to fire upon civilians history and recent events make it clear that at least the majority will comply with the orders they receive.  For the same reason that the average citizen is overwhelmed when thinking of how and when to resist authority, the front line soldier or officer is similarly daunted by thoughts of bucking the chain of command.  When you combine that with the very real threat of armed resistance, the possibility of significant violence cannot be ignored.

While any violence on the part of the agents of authority will likely escalate the overall level of resistance in the general population, it is certainly going to discourage any people who are caught up in the festival aspect of the resistance from continuing.  The real and present threat of violence and death is a great deterrent; it is not a coincidence that tyrannical governments across the globe and throughout history have made effective use of violence in putting down discontent.  While it will cement the resolve of the committed and work to increase the number of people who have suffered significant enough indignity and hardship to risk their lives, a large number of people will be too fearful to support the resistance and will in fact look to establish their own safety by actively helping the establishment root out the resistance.

Along with direct force there are force multipliers like air support, heavy weapons, command and control capabilities, control over the infrastructure, night vision and infrared tracking, satellite surveillance, the network of in place surveillance and traffic cameras, body armor, on-line intercepts of emails, phone taps, the ability to shut down transportation systems, forensic analysis, and training.  How does a single citizen cope with the myriad ways in which the governing authority can deploy massive resources and multiply their effectiveness?  When he realizes that he must join with others to pool resources and capabilities, how does he find or recruit his team without leaving a trace that will be detected by the government or co-opted to its benefit?  It is, to say the least, a daunting challenge.


Non-defense government (federal, state, and local) consumption and gross investment as percentage of GDP, 1929-2008

Anyone who has ever gone on an extended hike in the wilderness has come face to face with the importance and the challenge of logistics.  Like a rocket that uses 90% of the fuel to lift the fuel that lifts the rocket into orbit, a hiker must carry more food to offset the extra energy expended by carrying a heavy load of food onto the trail.  Furthermore, any tools or materials he needs must be carried along if they cannot be fabricated or acquired along the way, so if the hiker has any desire to do much more than walk (eg. take pictures, drink, sleep, cook, or bandage a cut), he has to carry the means to do so along with him.

For that reason the modern day resistance movement will begin as a largely local phenomenon.  People cannot afford to deploy themselves to faraway places and risk their source of income and/or support the additional expense.  There will necessarily need to be help in the form of food, medicine, shelter, and materials above and beyond what the average resister will be able to provide, and that lifeline of support is easily constrained or severed by the power in authority.

Conversely the government in all of its forms and agencies has nearly unlimited resources (at least in the short to medium term) in the form of cash, supplies, transportation, and secure storage to support its activities.  It rules the air and roads and sea and rails, and it can deploy immense amounts of resources in a short period of time if needed.  Furthermore there is no opportunity for any single citizen to limit the reach and ability of the government to deploy those resources.  It is simply the case of only being able to stop one grain of sand in a landslide.

The powers that be also have complete authority and control over all of the major channels of communication.  They can manipulate, halt, or utilize all TV, radio (broadcast), newspaper, internet, radio (point to point), telephone, snail mail and satellite communications at will.  They can monitor, intercept, jam, encrypt or decrypt nearly any message that a modern day citizen can compose.  That leaves the resister the option of sending messages that are very difficult to hide and protect, or sending messages that travel at very slow speeds by off the grid methods.

Hand in hand with the ability to communicate is the ability to coordinate.  Existing agencies have command and control structures in place that allow orders from leadership to be executed quickly and reliably.  Those agencies have extensive practice and established methods for preserving their chain of command and those in the chain are well versed in the execution of the orders they receive.  The command structure is redundant and well insulated from the agents in the field of operations, and is virtually immune to any action on the part of the citizen that has chosen to resist.

That citizen in turn is working with other autonomous people and groups (if he is working with anyone at all) who’s participation is completely voluntary.  They may agree to carry out the requests he makes, but they may only agree to part of the action.  They may decide to change the time table.  They may decide to back out without notice.  Or they may become otherwise engaged and be limited in the sense of accountability they feel and/or be limited in their ability to communicate their change in direction.  It is very easy to take out the leadership since the leadership is also likely to be the operator in the field.  There is little or no redundancy, and there is little or no practice in cooperative action.  Furthermore the more cooperative and effective the group becomes, the more likely they are to become a target of strategic priority by the forces of the powers in place.



The last major category of strength this analysis will address is financial.  Despite the overwhelming debt, the deficits, and the lack of solvency in the government at the federal, state, and local levels the fact remains that the financial powers can (and will) continue to create money to fund their activities.  There are many questions about whether or not this course of action is sustainable or effective; however, there is little doubt that it will continue.  The wealth of the United States is tremendous, and even though it is being steadily diluted by the devaluation of the dollar, there remains an enormous amount of wealth yet to dilute.  Consider that the total notional wealth of the United States is around $56T.  Even maintaining budget deficits that are funded by printing new dollars, it would take around 30 years to consume the wealth through the expansion of the currency.

Now I know that it is a good bit more complicated than that; however, the fact remains that there is massive wealth left that can be consumed.  Furthermore it is likely that the existing debt will be defaulted and wiped out.  While there are numerous disruptions inherent is such a scenario the government will be free of its encumbrances and will be able to continue to print new money (even if it is called something else or initially backed by other assets).  What this means is that for all practical purposes the government will remain unconstrained in its spending while the average citizen will be anything but.  More importantly, as the government creates more and more money, the wealth of the citizen will continue to decline further limiting him from saving or deploying his assets towards effective resistance even as the devaluation creates more and more people desperate enough to consider action.

An average citizen faces an enormous, frightening and disheartening challenge if he chooses to resist; however, that has always been true throughout history when the brave and often tragic souls of the past have decided that enough was enough.  No government in world history has lasted very long; most have failed in a much shorter span than the United States has lasted.  Neither success nor failure is baked in the cake.  In the next part, we will look at the inherent strengths that the average citizen has in resisting the existing authority.

Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

http://www.theburningplatform.com/

Not authoritative but some pretty common sense ideas and unbiased analysis.

Pretty smart blogger. Just go to the site. This c&p doesn't do justice without the visuals.

[buckethead]

CORZINE & OBAMA: BEST BUDDIES5

Karl Denninger detailing the ongoing oligarchical rule of America. Corzine is actively involved in the Obama re-election campaign. His firm MF Global was made a primary dealer in 2010. That meant millions of new business for this connected douchebag. He should go to jail for what he has done. Will he? No fucking way. He’s a member of the 1%. They never go to jail.

http://market-ticker.org/akcs-www?post=196876

Can You Survive It Being Over?


And by “over”, I mean really, truthfully over.Look folks, there’s really nothing more-serious than grabbing client funds internally.  It’s black-letter wrong, and it appears to have happened in the case of MF Global:
The filing came as MF Global told regulators of potential “deficiencies” in some customer accounts, according to a statement by the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission. Regulators are investigating whether hundreds of millions of dollars are missing from client accounts, according to a person with knowledge of the matter.

The “mainstream media” outlets this morning are talking about this being a “risk management” issue.  Nonsense.  This is a trust issue and Corzine is a former Goldman guy and the former governor of New Jersey.

The political connections are deep as well:

President Obama is desperately putting his Wall Street stock in an unlikely old buddy.

The beleaguered president has recruited former Goldman Sachs head honcho Jon Corzine to shore up re-election funds from the banking industry, which is furious over Obama’s financial regulations.

Corzine, the former governor of New Jersey who was blasted out of office by Republican Chris Christie in 2009, has attended secret meetings with the president and has been working on Obama’s 2012 campaign for months, The Post has learned.

The Democrat, who now leads Manhattan-based brokerage MF Global, has been tasked with scraping up the very little banking-industry support Obama can still get.

Nice.  Oh, that’s from July, if anyone’s interested.

The obvious questions that this little “incident” raises are too many to count but at their core go straight to the credibility of our entire financial system.  None of them are pretty.  Our markets are responding pretty much as you’d expect and coupled with the European situation which is also a matter of confidence and lies we’ve lost 70 S&P points â€" or about 5% of the the market’s total value â€" in the last 36 hours.

How much more of this is out there?  There’s no way to know and that’s the root of the problem, just as it was in 2008.

But this much we do know: This is not an issue of a firm that allegedly broke every rule in the book when it comes to the sanctity of customer funds.  Rather it is a story of utterly failed regulation and oversight that continues four years after the collapse that initiated in 2007.

It is the story of willful and intentional blindness by our government and the instrumentalities within it that are supposed to prevent this sort of crap from happening.

Let us remember that MF Global was just added to the primary dealer list in 2010!

The bankruptcy does raise questions, however, about how the Fed picks the primary dealers â€" especially since MF Global was one of four firms added to the ranks after new, more stringent requirements were put in effect in 2010.

I have to ask: Was that a political addition and where in the hell were the examiners that are supposed to be paying attention to what these firms are doing?  If this is the result of “more-stringent” requirements can someone tell me why I should believe that any of the other Primary Dealers are in fact solvent and why I should not believe that they’re all doing the same thing?

Oh, there’s no reason to be “concerned”, right?  That’s why the banks were positively pounded yesterday and the carnage appears to be continuing today.  It’s why this isn’t limited to the United States but is also happening over in Europe.  It’s why this morning the DAX is down 4%, the CAC is down 4% and the FTSE is down 2.5%.  It’s why nobody trusts a balance sheet â€" because there is no reason to trust any of them in the financial sector as we continue today, four years on, to have these sorts of “surprises” where hidden risk “magically appears” at the most-inopportune time and then we continue to hear the utter lie that “nobody could have seen it coming.”

The reason “nobody sees it coming” is that The SEC and banking “regulators” are averting their eyes â€" on purpose!

This is the continuing story, as I lay out in Leverage, of “two worlds” where one has the rule of law (you and I) enforced, where robbing a bank gets you a nice long prison sentence and some cops looking for bank robbers to stop them while in the other, inhabited by politically-connected and powerful men and women you can pretty much do anything you damn well please and nothing happens to you â€" in fact, you get rewarded with calls from The President of the United States and pick the pockets of the public with essential impunity.

You cannot trust ANY balance sheet given to you today â€" in point of fact the government itself demanded that FASB allow lies as a business practice when it comes to the alleged value of securities.  It’s that simple.

This is not the mark of a representative republic, it is not the mark of a free and fair market, and it is not “crony capitalism.”

It is a mark of a feudal system where outright looting is not only permitted it is encouraged.

There are no checks and balances and the banksters wield their briefcases like John Dillinger wielded his tommy gun.  There has been no reform since 2008.  Dodd-Frank was a joke, Glass-Steagall was not put back in place, and there was no prosecution of those who did wrong.

SEVENTEEN PAGES IN GLASS-STEAGALL â€" 17 PAGES â€" KEPT THE BANKING SYSTEM SAFE FOR FIFTY YEARS.

And now we have another collapse that appears to show that there is no regulation, there is no oversight and nobody in the government gives a damn when one of the primary dealers that the government charges with making an orderly market in Treasuries appears to have co-mingled more than half a billion in customer funds with their own trading book.

People have taken cheap shots at me for supporting the goals of “Occupy Wall Street” â€" first and foremost among them being that the looting must be stopped.

If you’re one of the customers of MF Global who’s customer funds seem to have “disappeared” into the world of leverage abuse would you like to rethink your view that these folks are a bunch of anarchists that are just flat dead wrong this morning?

Perhaps it’s time for you to take the blinders off and have a whiff of the coffee that I’ve been offering up for the last four years.  The caffeine will make for a damn good start to the morning and, if you have a brain in your head, stoke righteous outrage and a long-overdue demand to STOP THE LOOTING AND START PROSECUTING.

And by the way, if we don’t start doing that right here and now?

This game is nearing its forced conclusion and you’re not going to like it.

[Shine]

I would  contend that 14161 number (2006 I believe) was a bubble. 

Actually, the daily numbers have more bubbles than a bath tub.  If you look at the general measure of stock value being the Price/earnings ratio â€" it is almost never at its mean but often at some place between 8 and 30 times earnings -- Radically under or radically overvalued.  Hence the cycle of fear and cycle of greed.

This is why it is better to look at the stock market trend as y=mx+b. 

[finehoe]

The reason “nobody sees it coming” is that The SEC and banking “regulators” are averting their eyes â€" on purpose!

The mantra of the Republican party since Reagan has been "de-regulation" so why should this surprise anyone?

[buckethead]

De-regulation is not a bad idea, any more than regulation is a bad idea. Smart, workable, appropriate regulations should exist, while anti-competitive regulations should be avoided where possible.

There is no perfect mix of either. It will always be a struggle to find equilibrium between chaos and tyranny.

Glass-Steagal should be re-regulated.... Yesterday.