Quote of the week
“In a better world, the bankers would take their losses, admit their mistakes, and blow their brains out…or at least change careers. In fact, we have a suggestion: they should go into government; there they can make as many mistakes as they like and no one will notice.” – Bill Bonner
bu Matt Taibbi
“The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron – a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.” more…
by Jim Babka
Those upset about the AIG bonuses should focus on the fact that Congress authorized them. All the Congressional grand-standing about how bad the bonuses are is rank hypocrisy. One of two things is true . .
- Either those who voted for the scam-stimulus bill knew about the bonus provision, in which case they ought to be “falling on their own swords,” instead of castigating the government-appointed CEO of AIG, or . . .
- They didn’t know about the bonus provision, in which case they ought to introduce DownsizeDC.org’s “Read the Bills Act,” so they’ll know what they’re passing before they cast their votes.
by Joseph Keckeissen
“Interest is commonly considered something like a monetary faucet to be opened wide to pump the economy and to be shut off when prices get out of hand. But interest is not a monetary toy, as Mises has told us. It is not a price that can be adjusted at will. Rather, interest is meant to be a measure of the real savings accumulated at any one moment in the economy. Interest is high when the economy embarks on a spending spree and savings are reduced (as has been the case in recent years). Interest is low when consumption is reduced and savings are being generated to fuel new investment. The interest rate is like a semaphore, telling the investor whether to promote more current consumer goods as people are spending more and the interest rate is high, or, when the interest rate is low, to transfer resources to new investments that will develop more and better products for future, not present, consumption.” more…
by Bill Bonner
“So far, America’s efforts to borrow its way out of debt have not gone well. The scum gets dredged up from the bottom on Wall Street. But when it is dumped onto the ship, the whole thing just sinks lower. Henry Paulson began the digging with his TARP program in September of last year. Then came TALF. Not to mention various trillion-dollar salvage operations from the Fed. How much do all these rescue efforts cost? The last number we saw – in Barron’s – was $14 trillion.” more…
by Jacob G. Hornberger
“Like the Energizer Bunny, the drug war just keeps going on and on and on. Law-enforcement officers keep arresting people and confiscating assets. Grim-faced prosecutors continue prosecuting. Judges continue sentencing. And hardly any of them ever stops to think about the sheer idiocy of what they are doing.” more…
In the news…
- There are rumblings of dethroning the dollar as the world’s reserve currency. Understandably Bernanke and Geithner do not like the idea, but methinks if/when this comes about they probably won’t have much say or be negotiating from a position of strength. At least as long as they are talking to Congress they do not like the idea. Geithner has a slightly different story to tell when he’s away from Congress. The word “hack” comes to mind. I mean wasn’t he the head of the New York Fed when all of this stuff was going down 2-5 years ago?
- Obama’s job performance has fallen under 50%. For the record, I disapprove. He’s actually worse than Bush. Seriously, I didn’t believe it was possible…
- Here’s some stuff about the Food Safety Modernization Act, which has passed congress. Can anyone say that the government isn’t completely out of control? All of this because 700 people got sick on peanut butter? Out of a population of 300 million? Absurd I tell you. And where is the funding for this going to come from? Oh yeah, we’ll print more freaking money! A major problem with the legislation is that it does not define “farm”, so “farm” could, in some crazy world where government ministers are totally corrupt, be taken to be your garden. What happens if the bureaucrats come and tell you that your own garden isn’t safe? Should the government have this kind of power? Is this even constitutional? What about the 10th Amendment? For what it’s worth, there have been times and places in the history of the world where having your own garden was illegal – China in the 1960s is one case if you care.
- Here’s a radio interview Obama did in 2001, about how BEST to redistribute wealth in America. The notion that it was appropriate to do so is sort of a forgone conclusion to him.
- The latest episode of South Park explores the economy… Stan’s story is the best. Wait for the end…
And now the numbers…
DOW Jones Industrials – 7,776.18 (+497.80/6.84%)
Wilshire 5000 – 8,286.83 (+485.48/6.22%)
CSI 300 (China) – 2,498.93 (+119.09/5.00%)
BSE 500 (India) – 3,605.81 (+346.29/10.62%)
MICEX (Russia) – 815.27 (+23.22/2.93%)
BOVESPA (Brazil) – 41,907.29 (+1830.88/4.57%)
Gold/oz – 925.30 (-30.90/-3.23%)
Silver/oz – 13.32 (-0.52/-3.76%)
Copper/lb – 1.834 (+0.038/2.12%)
Oil/bbl (Brent) – 51.98 (+0.76/1.48%)
Wheat/bu (CBT) – 5.0725 (-0.43/-7.81%)
Corn/bu – 3.87 (-0.095/-2.40%)
Dollar/Euro – 1.3293 (-0.0287/-2.11%)
Yuan/Dollar – 6.827 (+0.0042/0.06%)
Yen/Dollar – 97.87 (+1.94/2.02%)
Dollar/Real – 0.4375 (-0.0037/-0.84%)
3 Month Treasury – 0.13 (-0.07/-35.00%)
2 Year Treasury – 0.91 (+0.04/4.60%)
10 Year Treasury – 2.76 (+0.13/4.94%)
30 Year Treasury – 3.61 (-0.05/-1.37%)
Fed Target Rate – 0.25 (UNCHG)
U.S. Public Debt – 11,046,247,657,049.50 (+6,561,526,151.40/0.06%)
Baltic Dry Index (BDIY:IND) – 1,678.00 (-104.00/-5.84%)
I’m going to keep it quick this week. I will simply note that the idiots are trying to use the chaos on the Mexican border as a reason to ban guns. The notion that drug prohibition might be the root cause of the violence is lost on the media and our “leaders”. No surprise there though. Anyway, this is situation is really no different than from when alcohol was prohibited in the United States. It’s the same story with different actors and slightly different circumstances. Sadly, the “drug war” has done much more damage to our Constitution than alcohol prohibition did.
Okay, enough of that. I said I would keep it quick and so I will. Have a fantastic weekend!