Weekend Economists Greater Depression Redux October 29, 2010

It is of course the anniversary of Black Tuesday, that infamous trading day in 1929 when the DOW lost 12%.

"The crash began a 12-year economic slump that affected all the Western industrialized countries and that did not end in the United States until the onset of WWII at the end of 1941.

“Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even.”"

—Richard M. Salsman

On "Black Tuesday", October 29, 1929, about 16 million shares were traded. The volume on stocks traded on October 29, 1929 was "...a record that was not broken for nearly 40 years, in 1968".

Author Richard M. Salsman wrote that "on October 29—amid rumors that U.S. President Herbert Hoover would not veto the pending Hawley-Smoot Tariff bill—stock prices crashed even further". William C. Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks in order to demonstrate to the public their confidence in the market, but their efforts failed to stop the slide. The DJIA lost another 12% that day. The ticker did not stop running until about 7:45 that evening. The market lost $14 billion in value that day, bringing the loss for the week to $30 billion.

http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

Well, hold on to your hat. This isn't your grandfather's--great-grandfather's Depression. We ain't seen nothing, yet...

Maybe Sheila has a Halloween Party this weekend?

Now that is spooky!

Good evening Demeter.

Happy Depression Anniversary!

I've thinkin' about you lately. Everything goin' okay up your way?

We've had lots of puppy pix lately. . . ..




TG, NTY

http://www.zerohedge.com/article/thank-gdp-its-friday-finally-some-facts

...we are not alone in the World and the things we do, or try to do in our economy, affect the economies of other nations. Perhaps when the US was 40% of Global GDP, we could have gotten away with it but now we are 20% and falling fast yet we still attempt to run our foreign and economic policies as if we are large and in charge.

This is not the way the rest of the World sees us anymore. To the rest of the World we are unrealistic children with dangerous spending habits who happen to owe them A LOT of money. We borrowed $15Tn and our "plan" is to pay them back with hyperinflated dollars that are already discounted 33% from where we began cranking up the borrowing in 2002 (to pay for wars and tax cuts).

Already, other nations are refusing to lend us more money so we have begun to engage in what Bill Gross, the world's biggest bond buyer, calls "a brazen Ponzi scheme" in which the Federal Reserve of the United States "buys" whatever notes the Treasury Department of the United States chooses to print to pay for their continual borrowing (currently $100Bn per month) and the joke of it is that the Federal Reserve doesn't actually have ANY money. In fact, they themselves are $2.5Bn in debt as every check they write is technically just another IOU, backed by whatever assets they purchase AFTER they write the check.

While this exercise may seem painless and fun at the expense of our creditors, sadly only about $4Tn of our debt is owed to China, Japan and our other foreign creditors. While we may be stealing $1Tn from them, at least they get to sell us stuff. The rest of the debt, $11Tn, is owed to ourselves - to all the widows and orphans and pension funds that bought US bonds as "safe" investments as well as the poor suckers who worked their whole lives socking away 12.5% of their wages into a Social Security program whose "lock box" was raided by simply forcing retirees to lend their money to the government at unreasonably low rates and will now be paid back in dollars that are worth less than 25% of what they were worth when the retirees began working...

Why do we allow the Fed to take $8Tn through devaluation rather than let the Government raise the $4Tn it needs legitimately? Because the legitimate way to do it is through representative taxation and even the top 1% can't run away from that obligation in total but they sure can hedge against inflation that wipes out the lower classes! Also, something I've pointed out this week already so I won't get back into it but it's easy for the top 1% (and yes, that's us too) to hedge against inflation by buying commodities and leveraging stocks and buying real estate (the stuff that is being confiscated from the poor people is nice and cheap for those of us who have lines of credit at the bank). ...MORE

http://www.zerohedge.com/article/founding-fathers-vision-prosperity-has-been-destroyed

The Founding Fathers not only fought for liberty and justice, they also fought for a sound economy and freedom from the tyranny of big banks:

" the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and . . . the Revolutionary War."
- Benjamin Franklin

"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt."
- John Adams

“If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied”.
— Thomas Jefferson

"I believe that banking institutions are more dangerous to our liberties than standing armies...The issuing power should be taken from the banks and restored to the Government, to whom it properly belongs."
- Thomas Jefferson

“The Founding Fathers of this great land had no difficulty whatsoever understanding the agenda of bankers, and they frequently referred to them and their kind as, quote, ‘friends of paper money. They hated the Bank of England, in particular, and felt that even were we successful in winning our independence from England and King George, we could never truly be a nation of freemen, unless we had an honest money system. ”
-Peter Kershaw, author of the 1994 booklet “Economic Solutions”

As I noted last year:

Everyone knows that the American colonists revolted largely because of taxation without representation and related forms of oppression by the British. See this and this.



But - according to Benjamin Franklin and others in the thick of the action - a little-known factor was actually the main reason for the revolution.



To give some background on the issue, when Benjamin Franklin went to London in 1764, this is what he observed:

When he arrived, he was surprised to find rampant unemployment and poverty among the British working classes… Franklin was then asked how the American colonies managed to collect enough money to support their poor houses. He reportedly replied:



“We have no poor houses in the Colonies; and if we had some, there would be nobody to put in them, since there is, in the Colonies, not a single unemployed person, neither beggars nor tramps.”



In 1764, the Bank of England used its influence on Parliament to get a Currency Act passed that made it illegal for any of the colonies to print their own money. The colonists were forced to pay all future taxes to Britain in silver or gold. Anyone lacking in those precious metals had to borrow them at interest from the banks.



Only a year later, Franklin said, the streets of the colonies were filled with unemployed beggars, just as they were in England. The money supply had suddenly been reduced by half, leaving insufficient funds to pay for the goods and services these workers could have provided. He maintained that it was "the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and . . . the Revolutionary War." This, he said, was the real reason for the Revolution: "the colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction."

QUOTATIONS CONTINUE AT LINK

http://www.marketwatch.com/story/report-from-a-parallel-universe-liberal-tea-party-2010-10-28?dist=afterbell

Here’s a liberal’s version of a parallel universe:

President Barack Obama’s surprise announcement that he would address the nation from the Oval Office on Wednesday instead of appearing on a comedy show came as a welcome surprise to those of us disappointed in the president.

The president closeted himself with his newly appointed chief speechwriter, Robert Kuttner, to prepare for it.

Progressive economist Kuttner had over the weekend posted two speeches he thought Obama should give — one a categorical declaration that Social Security would be defended at all costs and another calling the banks to account after recent disclosures about fraudulent mortgage practices.

The scales had fallen from Obama’s eyes in a moment of visionary enlightenment, I was told. But nothing could prepare us for the amazing change when Obama spoke Wednesday.

The president began by apologizing to the millions of enthusiastic voters who had swept him into office on promises of bold change.

“I see now that I have been far too timid, too ready to listen to advisers who are clinging to the old ways of doing things,” Obama said. “I’ve been saying on the campaign trail that I’d rather do what is right than what is politically expedient, but I see now that too often I’ve succumbed to expediency. I apologize from the bottom of my heart to you, the voters, and especially to my faithful critics on what has been wrongly labeled the ‘professional left.’ ”

IF ONLY...BEAM ME UP, SCOTTY

http://us1.irabankratings.com/pub/IRAMain.asp

"JOHN BULL can stand many things but he cannot stand two per cent." That aphorism, quoted by Walter Bagehot, a 19th-century editor of The Economist, expressed savers' traditional distaste for very low interest rates. For the first three centuries of the Bank of England's existence, 2% was indeed as low as the central bank was willing to let interest rates fall. Not even the Depression, nor the long Victorian period of stable prices, induced the bank to go any further. Some minimum return on capital was deemed to be required.

Buttonwood
The Economist
September 16, 2010

THE REST OF THIS COLUMN IS VERY IMPORTANT, AND TOO PAINFUL FOR ME TO EXERPT...GO READ IT!

http://blogs.alternet.org/speakeasy/2010/10/29/are-treasury%E2%80%99s-knives-coming-out-against-elizabeth-warren/

After several weeks of officially pleasant interactions, signs are emerging that the Treasury Department’s knives may be coming out against Elizabeth Warren. In recent weeks, Treasury officials have leaked details about Warren to Politico as part of what appears to be an effort to paint her as some kind of prima donna. These relatively silly stories raise troubling questions, however, about what Treasury officials may be leaking with fewer fingerprints and greater ramifications.

The Politico pieces have been petty, but there’s no doubt they both came from Treasury. On Oct. 12, Politico ran a piece featuring this anonymous nugget (among others):

Some at Treasury grumble that Warren, in her early memos, spent much time detailing what press she was going to do . . . rather than the nuts and bolts of setting up an agency.

Then yesterday, in Politico’s Morning Money column:

NEW PAINT JOB – We also hear that while Warren is out west, her Treasury office is getting a makeover (Warren will have digs both at Treasury and the CFPB’s L Street headquarters). That’s something of a rarity for Treasury officials, who usually leave their offices as-is. There is much internal debate as to exactly what color it is that is going up on Warren’s walls. One person called it “Arizona sunset,” another “terra cotta.”

Both of these represent the kind of meaningless, issue-free pseudo-news that serves as Politico’s bread-and-butter. The actual complaints themselves, of course, are preposterous. Warren is painting her office and making media appearances—exactly the sort of things you’d expect the head of a new federal agency to be doing during her first weeks on the job. But look at the frame Treasury is putting on the stories. In both, Warren is portrayed as an ego-centric fluff-monger, not a serious policymaker. Look at fancy Elizabeth Warren painting her office! Our humble boss Timothy Geithner would never do such a thing!

The article states "Look at fancy Elizabeth Warren painting her office! Our humble boss Timothy Geithner would never do such a thing!"

I wonder how many Wall Street investment offices, and second homes, and third homes, were re-done following Geithner's infusion of taxpayer money so they could continue with their multi-million dollar bonuses?

It's playing to stereotype. They don't want to talk about her hiring, policies, etc. Not a word about that--- yet.

so on the side of trickle-down I am not sure this will be anything but frustrating...

I listed to her talk about 2 sheet credit card agreements, in type big enough and in words simple enough to understand how a person is having their money taken away. Then I thought about the hidden programs and a government which has loaned out $23 trillion, while continuing to insist that because much of a previous $700 billion package has come back there is little loss...while not talking about the billions the banks have vacuumed up by getting interest on their t-bills.

I hope she gets some room to make changes, but when both people in the government and in the business world are going to lobby against her, it is going to make that job hard and frustrating.

http://www.ingrimayne.com/econ/EconomicCatastrophe/GreatDepression.html

The decade of the 1930s saw the Great Depression in the United States and many other countries. During this decade large numbers of people lived in poverty, desperately in need of more food, clothing, and shelter. Yet the resources that could produce that food, clothing, and shelter were sitting idle, producing nothing.

At the worst point of the Great Depression, in 1933, one in four Americans who wanted to work was unable to find a job. Further, it was not until 1941, when World War II was underway, that the official unemployment rate finally fell below 10%. This massive wave of unemployment hit before a food stamp program and unemployment insurance existed. There were few government programs designed to help the poor or those in temporary difficulty. Further, most wives did not work, so if the husband lost his job, all income for that household stopped. An equivalent rate of unemployment today would cause less economic hardship because of the variety of programs (often inspired by the Great Depression) that cushion unemployment and poverty.

PLEASE NOTE THAT WE ARE ALREADY AT THIS POINT IN 3010, AND THE DEPRESSION HASN'T EVEN BEGUN....

Many people date the beginning of the Depression at October 24, 1929, Black Thursday, the day the stock market crashed. This was indeed a traumatic day for those who owned stock as sales volume broke all records. But the decline in overall stock prices was only about 2.5%, from 261.97 to 255.39 as measured by the New York Times index of 50 stocks. Most of the decline still laid in the future; the market hit bottom on July 7 of 1932 when the Times index was only 33.98, a decline of over 89% from its high of 311.90 of September 19, 1929.

However, economists date the Depression somewhat differently. First, they usually make a distinction between recession and depression, and they use the concept of recession much more than they use the concept of depression. A recession is a period in which economic activity is receding or falling, while a depression is a period in which it is depressed below some level. In the picture below, which shows a path of economic activity through time, the period from a to b is the period of recession. At time a the economic activity is peaking, and there is a trough at time b. After b the economy is in a recovery or expansion stage. Which period is best called a depression is less clear since one must first decide which level provides the measure of normalcy. One could consider the period from a to c the depression because after c the economy is above its previous high point, but there are other options that make as much sense.
Recessions mean economic activity is falling

The period that is called the Great Depression contained two periods of recession. The first began in August of 1929 (two months before the stock market crash) and ended in March of 1933. (These dates have been chosen by the National Bureau of Economic Research, a nonprofit organization that sponsors a great deal of economic research. They are based on the analysis of a large number of economic time series, and do contain some subjective elements.) In the first recession the value of goods and services that the economy produced fell by about 42% (but only by 36% once the effects of price changes are eliminated). The recovery in the four years that followed was slow and not completed by the time the second recession began. In this recession lasting 13 months from May 1937 until June 1938, output fell by 9% (but only 6% when the effects of changes of prices are eliminated).1
US GNP, 1928-1940...

Robert Shiller - one of the top housing experts in the United States - says that the mortgage fraud is a lot like the fraud which occurred during the Great Depression.
snip
The former chief accountant of the S.E.C., Lynn Turner, told the New York Times that fraud helped cause the Great Depression:
snip
The 1930s’ Pecora Commission, which investigated the fraud that led to the Great Depression ....

this is an excellent read
http://www.washingtonsblog.com/2010/10/fraud-caused-great-depression-and-this.html

Rec was saved for late night kick.

http://www.alternet.org/story/148562/food_in_uncertain_times%3A_how_to_grow_and_store_the_5_crops_you_need_to_survive?page=entire

Having food resiliency is as much about learning how to store and use food properly as it is about growing it. The key is learning interdependence not independence.

In an age of erratic weather and instability, it's increasingly important to develop a greater self-reliance when it comes to food. And because of this, more than ever before, farmers are developing new gardening techniques that help achieve a greater resilience. Longtime gardener and scientist Carol Deppe, in her new book The Resilient Gardener: Food Production and Self-Reliance in Uncertain Times, offers a wealth of unique and expansive information for serious home gardeners and farmers who are seeking optimistic advice. Do you want to know more about the five crops you need to survive through the next thousand years? What about tips for drying summer squash, for your winter soups? Ever thought of keeping ducks on your land? Read on.

Makenna Goodman: Many gardeners (both beginners and more serious growers) come across obstacles they might not have planned for. In your new book, The Resilient Gardener: Food Production and Self-Reliance in Uncertain Times, you talk about the need for real gardening techniques for both good times and bad. What is the first step toward achieving this kind of resilience?

Carol Deppe: The basic issues are getting more control over our food, getting lots higher quality and more delicious food, and enhancing the resilience of our food supply. There are three ways to do that. The first is through local buying patterns and trade. A second is through knowing how to store or process food that is available locally, whether we grow it ourselves or not. The third is gardening. In The Resilient Gardener, I talk as much about storing and using food as growing it. I love gardening, but not everyone is in a position to garden every year of their lives.

However the person who has learned to make spectacular applesauce or cider or apple butter or pies can often trade some of the processed products for all the apples needed. Buying local food supports local food resilience. A couple hundred pounds of gourmet-quality potatoes tucked away in the garage -- potatoes that you have learned to store optimally -- represent serious food security, whether you grew them or bought them from a local farmer right after the harvest. Our buying and trading patterns and our skill at storing and using food as well as gardening are all part of our food resilience. All can serve as the starting point to begin taking greater control over our food...MORE

one of my most treasured books is a Mormon Pioneer cook book. From it I learned: how to store eggs, root crops, apples, dehydration, making tack, and storing ice. I also have a country living encyclopedia that shows how to DIY with little or no resources. I am lucky him that I can grow food AND know how to preserve it. Years of helping mom grow her kitchen garden and preserving the food sunk in.

I also have a cookbooks of Depression and war time era meals. I can cook cakes without eggs, meatless meals etc. These are valuable skill to retain and pass on.

http://www.rollingstone.com/politics/news/17390/222206

Matt Taibbi's unsparing and authoritative reporting on the financial crisis has produced a series of memorable Rolling Stone features. He showed us how Goldman Sachs, that "great vampire squid", played a central role in creating not only the housing bubble but four other big speculative booms that filled its coffers while wrecking the American economy. He explained how Wall Street banks cooked up schemes that helped decimate municipal budgets and cost countless jobs, and how Wall Street lobbying led to a financial reform bill that won't prevent another meltdown. Taibbi builds on that eye-opening work in his new book, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That is Breaking America, due out from Spiegel & Grau on November 2. In this exclusive excerpt, he describes how our cash-strapped country is auctioning off its highways, ports and even parking meters at fire sale prices — and finding eager buyers in the unregulated sovereign wealth funds of oil-rich Middle Eastern countries.

In the summer of 2009 I got a call from an acquaintance who worked in the Middle East. He was a young American who worked for something called a sovereign wealth fund, a giant state-owned pile of money that swims around the world in search of things to buy.

Sovereign wealth funds, or SWFs, are huge in the Middle East. Most of the bigger oil-producing states have massive SWFs that act as cash repositories (with holdings often kept in dollars) for the revenues generated by, for instance, state-owned oil companies. Unlike the central banks of most Western countries, whose main function is to accumulate reserves in an attempt to stabilize the domestic currency, most SWFs have a mission to invest aggressively and generate huge long-term returns. Imagine the biggest and most aggressive hedge fund on Wall Street, then imagine that that same fund is fifty or sixty times bigger and outside the reach of the SEC or any other major regulatory authority, and you've got a pretty good idea of what an SWF is.

My buddy was a young guy who'd come up working on the derivatives desk of one of the more dastardly American investment banks. After a few years of that he decided to take a step up morally and flee to the Middle East to go to work advising a bunch of sheiks on how to spend their oil billions.

Aside from the hot weather, it wasn't such a bad gig. But on one of his trips home, we met in a restaurant and he mentioned that the work had gotten a little, well, weird.

"I was in a meeting where a bunch of American investment bankers were trying to sell us the Pennsylvania Turnpike," he said. "They even had a slide show. They were showing these Arabs what a nice highway we had for sale, what the toll booths looked like . . ."

I dropped my fork. "The Pennsylvania Turnpike is for sale?"

He nodded. "Yeah," he said. "We didn't do the deal, though. But, you know, there are some other deals that have gotten done. Or didn't you know about this?"

As it turns out, the Pennsylvania Turnpike deal almost went through, only to be killed by the state legislature, but there were others just like it that did go through, most notably the sale of all the parking meters in Chicago to a consortium that included the Abu Dhabi Investment Authority, from the United Arab Emirates....

CHICAGO,AGAIN.IT'S ALWAYS CHICAGO, OBAMALAND, RAHMLAND, ARGUABLY THE MOST CORRUPT CITY IN THE COUNTRY, OUTSIDE OF DC....

I think Indiana actually did sell it's turnpike. And they've been talking about doing the same thing in Florida.

It is sickening.

Is your dad all right? Mine isn't.

My sister and I are beside ourselves. He refuses to lift a finger to maintain, never mind improve, his physical condition. I guess his biggest problem is actually mental. Good luck with that!

The only solution I see is calling protective services and dragging him off to a nursing home...which he doesn't want, but waiting on him hand and foot in a foreign state is not within the realm of reasonable, either.

Delusion--it's what's eating your lunch. And dinner.

They were just in the back yard, and I guess their pool too.

My dad moved back to SC a month ago. He missed all of his friends, and the record hot summer we had was brutal. Now he thinks I'm going to drive up there every month. Wrong! At least he can get around on his own. His new cardiologist went over all of his medications, and is taking him off most of them. Which is a good thing. He thought that morphine and and driving were a good mix.

He almost got taken to the cleaners as soon as he moved. He rented a furnished house from a guy he used to work with at a car dealership. The guy represented himself as one of the dealerships owners. The guy wanted him to loan him $50k, and he could have the note on the house for collateral. I screamed NO! NO! NO! He was going to go through with it, but at the last moment he had his attorney look over the agreement the guy gave him. He told him not to give this guy a dime. The agreement was unenforceable, there was no title search, and the lawyer said he did a lot of legal work for that dealership, and this guy was not one of the owners. He told the lawyer that he told him the exact same thing I'd told him the day before. The lawyer said, "Good. Listen to your son."

So, I may end up staging an intervention myself.

I think that's why they invented vodka.

My sister is praying for a massive stroke to resolve the situation. She didn't specify for whom. I think she means herself, which would leave me holding the bag.

My father should be confined to bed in a nursing home, or maybe a psych ward. Being a stubborn Polak has its limitations, when one is defying Reality. Of course, it could be a shadow autism. It's not that these tendencies are new-he's been like this all my life, at least--only that people don't improve as they age--whatever mindset flaws existed at 20 just overwhelm the good points.

I just hope I have some lingering ability to deal with reality when I am 20 years older.

http://market-ticker.org/akcs-www?post=169848

This from a new "behind the scenes" macro economic source, who has apparently been producing these for a while.... and is a former oil company employee.

Note that Exxon has maintained that any negative growth rates imply impending (or actual) recession.

So if we truly exited the recession, can someone explain these annualized numbers...

http://market-ticker.org/akcs-www?get_gallery=474

And more importantly in the instant case, what do you think we're going to see with these monthly change numbers in the next month's economic reports?

http://market-ticker.org/akcs-www?get_gallerynr=475

Right after the election..... and right into the Holidays.

Economic growth eh? I have previously presented freight tonnage and OTR trucking anecdotes, but this is not anecdotal - it is hard data, and economic growth always requires growth in energy use. While there are improvements over time due to efficiency gains they sure don't come at these sorts of rates.

The claims of "economic recovery" are nonsense - or, if you prefer, intentional lies.

"Electricity usage isn't going up either. This past year we had both record high and low temperatures in the summer and winter, which should have led to record peaks for the electric companies we work for. That didn't happen, things topped out around where the system peaks were a few years back."

I TEND TO THINK THE LOSS OF BUSINESS USE OF ENERGY IS THE BIG LOSS--WITH SO MANY BUSINESSES GONE OR REDUCED, POWER DEMAND IS ALSO REDUCED. NO NEED TO HEAT, COOL OR LIGHT EMPTY OFFICE BUILDINGS AND PLANTS...

ALTHOUGH SOME FORWARD-LOOKING BUSINESSES HAVE STARTED TO GET OFF THE GRID...

Efficient. I am sure that is impacting the utilities as well.

Our household went from having $ 225 a month bills during the summer, even though only sporadically using the AC. (In our neck of the woods, the heat is unbearable - 106 degrees often. I don't mind being cold in the winter, but once the thermometer says it is above 95, day after day, hour after hour, I start to need cooling.)

And now with the new unit - the highest bill we have had is $ 115 a month. Even though the AC was on 24/7 one month.

http://www.english.illinois.edu/maps/depression/about.htm

World wide summary with graphic porn...

and now I have to go to work. They'll have to destroy the country without my commentary...oh, well!

10/27/10 Barack Obama: The oligarchs' president by Charles Ferguson
The director of "Inside Job" writes about Obama's depressingly rational decision to give in to Wall Street

When I first decided to make a documentary about the financial crisis, in late 2008, my biggest question was how to handle Barack Obama. Alas, the answer rapidly became all too clear, as my film "Inside Job" shows in painful detail.

When Barack Obama was elected, he had an unprecedented opportunity to shape American history by bringing the country's new financial oligarchy under control. Elected on a platform of change and renewal by a nation in crisis and with strong majorities in both houses of Congress, his election celebrated throughout the world, Obama could have done great things. Instead, he gave us more of the same. America will be paying for his decision for a very long time.

The first troubling sign was his personnel appointments: Larry Summers, the man behind nearly every disastrous policy that created the crisis, fresh from making $20 million from hedge funds and investment banks while at Harvard, to become the director of the National Economic Council; Tim Geithner, plucked from the New York Federal Reserve Bank and put in charge at Treasury; as Geithner's chief of staff, Mark Patterson, a former Goldman Sachs lobbyist; to succeed Geithner at the New York Fed, William C. Dudley, who was chief economist of Goldman Sachs during the housing bubble years; Michael Froman, straight from Citigroup Alternative Investments, which lost billions while its executives became rich, to coordinate economic policy for the National Security Council; Jacob Lew, who was the CFO of Citigroup Alternative Investments, as deputy secretary of state (and now, Obama's nominee to run the Office of Management and Budget); Gary Gensler, a former Goldman executive who helped ban the regulation of over-the-counter derivatives, to lead the Commodity Futures Trading Commission, which regulates derivatives; Mary Shapiro, former head of the Financial Industry Regulatory Agency, the investment banking industry’s self-policing body, to run the Securities and Exchange Commission; reappointing Ben Bernanke. And on and on.

lots more...
http://www.salon.com/news/politics/war_room/2010/10/27/barack_obama_wall_street


Edit to add link to several movie clips, these clips play automatically
http://movies.nytimes.com/movie/462064/Inside-Job/trailers


and this link shows when the documentary will play in theaters
http://www.sonyclassics.com/insidejob/dates.html

yup

http://www.truth-out.org/china-starts-talking-tough-but-offers-empty-warnings64600

Chinese officials are making increasingly frantic and bizarre statements in response to growing criticism of China’s currency policy.

At a speech in Brussels on Oct. 6, Prime Minister Wen Jiabao warned that too quick a rise in the value of the renminbi would eventually lead to unrest: “Many of our exporting companies would have to close down, migrant workers would have to return to their villages,” he said. “If China saw social and economic turbulence, then it would be a disaster for the world.”

But other emerging markets have experienced currency appreciation, so how is it that if China moved modestly in the same direction, it would be “a disaster for the world”?

Judging by the increasing intensity of China’s protests, there seems to be a consensus that more international pressure must be placed on China. But how?

CLICK ON LINK TO FIND OUT!

AND MUSIC FOR THE ABOVE:http://www.youtube.com/watch?v=EjMNNpIksaI

http://www.truth-out.org/foreclosuregate-explained-big-banks-brink64621

Scandal is spreading across Wall St. like a very bad case of poison ivy. A rash of fraudulent home foreclosures has exposed some of the nation's biggest banks to an even worse condition ... bankruptcy.

Until late 2007, the money boys on Wall St. made a bundle in the housing market. After the bubble burst, they were just itching to cash in on the down side, calling in all those bad loans they made and selling off millions of repossessed homes. According to RealtyTrac, Inc., which compiles such data, lenders foreclosed on 3.2 million properties in the last three years, 288,000 in the last quarter, the highest number on record.

But evidence came to light, first in New York, then Florida, Maine, Ohio, and other states that lenders were taking shortcuts to speed up foreclosures. Law firms hired so-called "robo-signers," some of whom have admitted in depositions that they routinely signed off on thousands of foreclosure papers they had never read and sometimes forged signatures of notary publics who were not present.

"Why don't we have Mickey Mouse sign the thing, instead of having a human being sign it? I mean it becomes meaningless," New York Supreme Court Judge Arthur Schack told PBS "Newshour."

SO,WHO DID SIGN? CLICK TO FIND OUT!

"The bottom line is not that those properties won't be repossessed. They simply won't be repossessed as quickly," said Rick Sharge, vice president of RealtyTrac. But others predict that if GMAC and Bank of America stick to their guns, they just might go down in smoke.

"This is not simply a glitch in paperwork," wrote Iowa Attorney General Tom Miller, who is heading up the states' joint investigation into the mortgage paper fraud mess.

"This was an industry wide scheme designed to defraud homeowners," Florida attorney Peter Ticktin told The Associated Press.

"Banks are in a big pickle. If they can prove they own the title to properties they want to foreclose on, they are liable to the IRS for unpaid taxes and penalties. If they don't, the are liable to be sued by bond holders for lack of due diligence in the bundled mortgages they sold to investors."

http://dailyreckoning.com/all-eyes-on-the-fed-awaiting-bernankes-decision/

“Gold vs. the Fed: the Record is Clear,” reads a headline from The Wall Street Journal this week. The article goes on to highlight a few of the dollar’s lowlights during its ongoing battle with the Midas Metal.

“From 1947 through 1967, the year before the US began to weasel out of its commitment to dollar-gold convertibility,” the story begins, “unemployment averaged only 4.7% and never rose above 7%. Real growth averaged 4% a year. Low unemployment and high growth coincided with low inflation. During the 21 years ending in 1967, consumer-price inflation averaged just 1.9% a year. Interest rates, too, were low and stable – the yield on triple-A corporate bonds averaged less than 4% and never rose above 6%.

“What’s happened since 1971,” the article wonders aloud, “when President Nixon formally broke the link between the dollar and gold? Higher average unemployment, slower growth, greater instability and a decline in the economy’s resilience.”

And that’s not all.

“For the period 1971 through 2009, unemployment averaged 6.2%, a full 1.5 percentage points above the 1947-67 average, and real growth rates averaged less than 3%. We have since experienced the three worst recessions since the end of World War II, with the unemployment rate averaging 8.5% in 1975, 9.7% in 1982, and above 9.5% for the past 14 months. During these 39 years in which the Fed was free to manipulate the value of the dollar, the consumer-price index rose, on average, 4.4% a year. That means that a dollar today buys only about one-sixth of the consumer goods it purchased in 1971.”

And to think the Journal is referring only to official statistics! The real story, when adjusting for the number torture going on in the government’s chamber of statistics – what Orwell might call the Ministry for Truth – is far, far worse. But readers get the point. The evidence is in. The facts have been observed. The arguments made. The case against a fiat money system would seem as open and shut as they come.

So why continue down the path leading to the very same cliff every other fiat money leapt from? Ahh... As every liar worth his salt well knows, a mistruth must beget a fraud, which, in turn, must give rise to another lie.

The world is brimming with stories of people who blindly cling to crackpot ideas in the face of any and all rational argument to the contrary. In fact, research shows that, far from inspiring a level-headed change of opinion, a well constructed argument dismantling this or that hocus pocus theory often has the opposite effect, emboldening the purveyors of such falsehoods. Leon Festinger introduced the theory, known as “cognitive dissonance” in his well-known book When Prophecy Fails, co-written with Henry Riecken, and Stanley Schachter...

http://dailyreckoning.com/gold-never-has-been-and-never-will-be-in-a-bubble/


Most serious gold investors follow a basic principle: that gold is stable in value. Changes in the “gold price” represent changes in the currency being compared to gold, while gold itself is essentially inert.

This is why gold was used as a monetary foundation for literally thousands of years. You want money to be stable in value. The simplest way to accomplish this was to link it to gold. Today, we summarize this quality by saying that “gold is money.”

From this we can see immediately, that if gold doesn’t change in value – at least not very much – then it can never be in a “bubble.” There may be a time when many people are desperate to trade their paper money for gold, but that is because their paper money is collapsing in value. It has nothing to do with gold.

Let’s take a look at some of the great gold bull markets of the last hundred years:

* From 1920 to 1923, the price of gold in German marks rose from 160/oz. to 48 trillion/oz.

* From 1945 to 1950, the price of gold in Japanese yen rose from 140/oz. to 12,600/oz.

* From 1948 to 1967, the price of gold in Brazilian cruzeiros went from 648/oz. to 94,500/oz.

* From 1970 to 1980, the price of gold in US dollars went from 35/oz. to 850/oz.

* From 1982 to 1990, the price of gold in Mexican pesos went from 8,000/oz. to 1,025,000/oz.

* From 1989 to 2000, the price of gold in Russian rubles went from 1,600/oz. to 8,120,000/oz.

Each of these situations was an episode of paper currency depreciation. Today is no different. The rising dollar/euro/yen gold price is simply a reflection of the Keynesian “easy money” policies popular around the world today.

http://www.bloomberg.com/news/2010-10-30/obama-weighs-temporary-extension-of-tax-breaks-for-wealthy-post-reports.html

The Obama administration is considering a plan that would preserve tax breaks for both the wealthy and the middle class as it faces likely Democratic losses in the Nov. 2 midterm elections, the Washington Post reported.

Administration officials are discussing “decoupling” the Bush-era tax cuts to allow permanent extension for families making less than $250,000 a year and temporary extension of cuts for those making more, the newspaper said, citing people familiar with talks at the White House and among senior congressional Democrats. The Republicans would then be under pressure to defend extending the cuts for the wealthy as they expired in a year or two.

Debate over the tax cuts will resume when lawmakers return to Washington in mid-November after elections. Forecast gains for Republicans in the House and Senate would further erode Democratic support for halting the Bush-era taxes on the wealthy while continuing the extensions for the middle class, the newspaper said.

President Barack Obama and most Democrats say they want tax cuts extended for middle-income earners and to end for the wealthiest Americans. Republicans want tax cuts extended for everyone, arguing that an increase makes little sense as the economy recovers from the worst recession since the 1930s.

http://www.alternet.org/story/148663/coalition_calls_for_constitutional_amendment_to_overturn_decision_allowing_unlimited_election_spending

...as long as they don't call for a convention....

http://dailyreckoning.com/money-printing-how-counterfeiters-saved-the-world/

If you could really make a society prosperous just by inflating the currency, Zimbabwe would be richer than Switzerland…and the Argentines would all be driving Mercedes. They’ve got 25% inflation right now. But they’re not getting rich. They’re not driving Mercedes. They’re just looking for ways not to get robbed, by buying apartments and opening offshore bank accounts.

And yet, everyone seems ready to believe that monetary inflation will make things better. Even the most illustrious thinkers in the financial world.

Here is George Soros, in The Financial Times:

“What America needs is stimulus…”

“Without a bailout,” he says, re-treading some familiar ground, “the financial system would have remained paralyzed.”

Really? What makes him think so? It looks to us as if the bailouts themselves are the source of the paralysis. Rather than let the chips fall where they may, the bailouts left the chips more or less where they were. Failed bankers still run failed banks. Failed auto executives still run failed automakers. Failed regulators and policymakers regulate even more…and as for making policy…well, we now have QE!

Printing up extra money – with no backing – used to be the sort of thing only counterfeiters did. Now it is done by the central bankers and Treasury Secretaries themselves. They don’t apologize for it. They don’t hang their heads and contemplate blowing their brains out. Instead, they’re proud of it…announcing that they “saved civilization,” or some such claptrap...

Oct. 28 (Bloomberg) -- Ohio Attorney General Richard Cordray talks about the probe by attorneys general in all 50 states into mortgage foreclosure practices and the disclosure by Wells Fargo & Co. that it found flaws in court documents. Wells Fargo, the biggest U.S. home lender, said it will file supplemental foreclosure affidavits to courts in about 55,000 proceedings after finding some statements "did not strictly adhere to the required procedures." Cordray speaks with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg)

http://www.youtube.com/watch?v=bNDn6SYTa7M&feature=player_embedded

will only make the cancer of the economy spread. The Tea Party nuts that win election will be swallowed by the establishment Republicans who care only about tax cuts, privatization and more deregulation. The small boost from the stimulus will be over and stagnancy will replace it.

The pharmaceuticals will make out like bandits with their antidepressants...

Demeter does a great job finding us interesting articles to read throughout the weekend with other posters assisting her. Check back for the daily thread Monday - Friday for the Stock Market Watch thread posted by ozymandius in the Latest Breaking News forum.

Edit: Not many of us are active stock traders, so it's evolved into a thread with the latest business articles of the day.

Here are the postings from Friday's thread 10/28/10 to give you a quick view...
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4591371


:hi:

10/29/10 Road to Corporate Serfdom by Ralph Nader

It was Bill Clinton’s campaign strategist, James Carville, who in 1992 created the election slogan: “It’s the Economy, Stupid.” For the 2010 Congressional campaigns, the slogan should have been: “It’s Corporate Crime and Control, Stupid.”

But notwithstanding the latest corporate crime wave, the devastating fallout on workers, investors and taxpayers from the greed and corruption of Wall Street, and the abandonment of American workers by U.S. corporations in favor of repressive regimes abroad, the Democrats have failed to focus voter anger on the corporate supremacists.

The giant corporate control of our country is so vast that people who call themselves anything politically—liberal, conservative, progressive, libertarian, independents or anarchist—should be banding together against the reckless Big Business steamroller.

Conservatives need to remember the sharply critical cautions against misbehaving or over-reaching businesses and commercialism by Adam Smith, Frederic Bastiat, Friedrich Hayek and other famous conservative intellectuals. All knew that the commercial instinct and drive know few boundaries to the relentless stomping or destruction of the basic civic values for any civilized society.

When eighty percent of the Americans polled believe ‘America is in decline,’ they are reflecting in part the decline of real household income and the shattered bargaining power of American workers up against global companies.

The U.S. won World War II. Germany lost and was devastated. Yet note this remarkable headline in the October 27th Washington Post: “A Bargain for BMW means jobs for 1,000 in S. Carolina: Workers line up for $15 an hour—half of what German counterparts make.”

The German plant is backed by South Carolina taxpayer subsidies and is not unionized. Newly hired workers at General Motors and Chrysler, recently bailed out by taxpayers, are paid $14 an hour before deductions. The auto companies used to be in the upper tier of high paying manufacturing jobs. Now the U.S. is a low-wage country compared to some countries in Western Europe and the trend here is continuing downward.

Workers in their fifties at the BMW plant, subsidizing their lower wages with their tax dollars, aren’t openly complaining, according to the Post. Not surprising, since the alternative in a falling economy is unemployment or a fast food job at $8 per hour.

It is not as if we weren’t forewarned by our illustrious political forebears Fasten your seat belts; here are some examples:

Thomas Jefferson—“I hope that we shall crush in its birth the aristocracy of our monied corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”

Abraham Lincoln in 1864—“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. …corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.” (1864)

Theodore Roosevelt—“The citizens of the United States must control the mighty commercial forces which they themselves call into being.”

Woodrow Wilson—“Big business is not dangerous because it is big, but because its bigness is an unwholesome inflation created by privileges and exemptions which it ought not to enjoy.”

Franklin D. Roosevelt—“The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is Fascism—ownership of Government by an individual, by a group, or by any other controlling private power.”

Dwight Eisenhower, farewell address—“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.”

And, lastly, a literary insight:

Theodore Dreiser—“The government has ceased to function, the corporations are the government.”

Are you, dear reader, the same now as you were when you began reading this column?

http://www.nader.org/index.php?/archives/2218-Road-to-Corporate-Serfdom.html%22

Sorry I haven't been around much - hope to be post-election. Posting the below because I found it interesting. I cannot agree with Goodwyn's assessment of Obama, nor embrace his calm optimism. Were it not that we are in the midst of an ecological collapse, I might be able to summon up that patience, but I don't think there's time left. Nonetheless, he's an interesting thinker, though the article, despite it's length, seems truncated at the end ... leaving us dangling, as it were.

I voted. :)

Two of the world’s biggest oil companies reported sharply higher third-quarter results, fuelled by stronger crude prices and better refining margins

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The top US consumer protection agency has dropped an inquiry into data collection breaches by Google, even as regulators in Europe and Canada have stepped up their scrutiny of the internet giant’s privacy policies

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American International Group, blindsided this week by news that its chief executive, Robert Benmosche, has cancer, said chairman Steve Miller would step in as the insurer’s interim chief if needed

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http://link.ft.com/r/KC2844/FXHPL6/A5Q0X/M9CZNB/WLAKL8/XL/t?a1=2010&a2=10&a3=28