So now the mujahedin want to hear your opinion upon why you suddenly do
all that financial stuff! Have you abandoned us?
no, but putting emphasizes on the financial stuff will bring down the
entire US military far more efficiently in the long run.
arty, the Americans have over 50 trillion or over 50,000 thousand
billion of debt on her own economy.
a reasonable interest level of just 5% they need 2500 billion a year
just to pay the interest. That is about 13 times as much as the yearly
costs of the wars in Iraq and Afghanistan.
Arty, at the moment of writing the entire American banking system has
only 200 million in reserves left. When I started this website again on
10 Nov they had over 40 billion of that reserve stuff...
trust me Arty with my repeated advice: Keep attacks on such a level that
the Americans are forced to drive around in convoys so in the future you
can be free.
in the long future: When the Americans and NATO forces have left, the
Afghanis and Iraqis can trust each other again. So they can settle their
differences via the way things work over there.
(looking happy): So we only have to wait...?
Yes, but never forget to pick up military might. But for the time being
the policy is bring more security for the civilians, build the military
might by using your brain and lots of practice and every now and then
some good attacks on the invaders.
(smiling): Ok ok, I have to go back to Afghanistan so bye bye
Item 1) The problem with Moody's and the Aaa
rating of US government debt.
Item 2) Bloomberg and the openness of information.
Item 1) The problem
with Moody's and the Aaa rating of US government debt.
The problem with rating companies like
Moody's, S&P or Fitch is they are all American companies.
There is no reliable international rating agency, there are only
profit driven rating companies.
The conduct of these companies in the present
crisis is also well known; in fact if you were a large enough
institution you could buy all the AAA ratings you needed on your
products. (An internal email once said "If they structure it
with cows, we can rate it".)
Far more worrisome is the fact the rating companies need computer
software to 'rate' the stuff involved, this means the rating
employees cannot give a rating using only paper, pencil and a hand
To put it simple: Just like bankers selling options or using the
'value at risk' models, these employees simply have no clue about
what they are doing.
Last week S&P put the United Kingdom on a
'negative watch list', that gave some turmoil in the markets.
Strangely enough people started wondering if what goes for the UK
will also go for the USA...
Ok ok, the UK runs a 12 to 13% deficit of
GDP, have no explanation why this borrowed money will 'do the
trick' (bring in more future taxes and give GDP growth that will
last a long time) and has no savings of any significance.
In short: With or without S&P any idiot
can see this cannot have the highest rating.
Same goes for the USA; 50% of all Federal spending is borrowed and
printed money and there are zero economists who can explain if all
the borrowed money will be paid back (or represent similar kinds
In the past short sighted idiots at Moody's
defended the USA as follows:
The USA has tremendous taxing
capabilities, if they raise taxes only 1% of GDP in just a decade
you look at over one trillion in extra taxes.
The Moody's defense is nonsense in many ways;
just try to raise taxes 1% of GDP and see what happens... Beside
this the rating companies only comment on 'public traded debt' and
neglect all internal debt in the US government; that is why the
rating companies are utterly irrelevant. Just as in the past when
they rubber stamped AAA on every product that came along, their
analysis of the US financial situation is a joke too.
Lets look at some nonsense Moody's came up
with today (from Bloomberg), source:
And one of those quotes that usually go
The U.S. rating is supported by “a diverse and resilient economy, strong government institutions, high per-capita income, and a central position in the global economy,” New York-based Moody’s said in a statement. At the same time, the firm warned that any “reassessment” of long-term growth prospects could put pressure on the rating.
Today’s announcement may help soothe concern among investors who sold U.S. assets in the aftermath of Standard & Poor’s cutting Britain’s rating outlook, spurring concern about a similar fate for the U.S. The Obama administration has committed to reining in the budget deficit once a recovery is under way.
Comment: This is just stupid talk, just
looking at what is always table number one in the Federal Reserve
Z1 release (debt growth by sector, source)
simply says: GDP, profit or tax growth is always a tiny part of
One thing is clear with today's statement from Moody's: Just like
the rest in the US financial sector they don't have a clue.
Item 2) Bloomberg and the openness
Many months ago Bloomberg started a judicial
case against the US Federal Reserve; they wanted more insight in
where all that tax payer money went in all those programs to
support the financials.
After some time the FED gave in and now we
have monthly updates like the last one:
Doesn't this mean the FED gives only 41 cents
for every dollar collateral pledged?
So the courthouse stuff from Bloomberg did
pay off; how could we ever know the FDE pays only 41 cents for
every pledged collateral dollar?
Now how about splitting up the statistics
along printed money yes or no?
There are persistent rumors that the FED buys
more and more US government debt directly at the auctions of that
debt. I think that is of interest because Central Banks buying
government debt directly when it's auctioned is one of the most
pure forms of printing money.
You have to read a bit between the lines, but
even in dumb headed Yahoo files there is nothing found to the
Here in Europe it is pretty simple: the
European Central Bank is not allowed to buy government debt so a
failed auction is a failed auction as the UK folks might have
observed. But those USA folks, you simply cannot trust them; you
don't know how much government debt goes to the FED. You just
(25 May 2009) Finally another green shoot, it's
a perfect one: a green shoot about the relation between
unemployment and rising foreclosures in the USA.
The article does not quantify it but as a
rule of thumb you can say about one third in unemployment numbers
'relates' to foreclosures, quote:
Over the period when BLS was reporting 500k plus job losses a month, from November’08 to February ‘09, the numbers of distressed properties “increased more than 473,000, exceeding 1.5 million.” Total loan value = more than $224 billion. (Sources: The Times, First American CoreLogic).
A case of shaky statistics was found
yesterday at Bloomberg, it is one of those slap happy stories
where dumb journo's that know nothing of statistics 'proof' the
situation get 'better'. Quote:
Combined sales of new and existing homes likely advanced to a 5.02 million annual rate from a 4.93 million pace in March, other figures may show.
Comment: This is stupid in many ways, in the
first place the US housing market has strong seasonal components
where prices & volumes usually climb until deep in the Summer.
In the second place, it is only 1% more and as such the reported
number falls within all confidence intervals around the five
North Korea tested today another nuke,
according to the Vienna-based Comprehensive Nuclear Test Ban Treaty Organisation
the Richter scale numbers were (source):
Russia, which called the test a threat to regional security, said the blast was about equal in power to the U.S. atom bomb dropped on the Japanese city of Nagasaki in World War Two, or about 20 times larger than the North's one kiloton test in 2006.
But the Vienna-based Comprehensive Nuclear Test Ban Treaty Organisation contested that, saying the magnitude of the latest test was "slightly higher than in 2006, measuring 4.52 on the Richter scale, while in 2006 it was 4.1."
Comment: If the Vienna based organization is
correct with the Richter numbers, in that case since 4.52 - 4.1 =
0.42 the second blast has 10^0.42 = 2.6 more shaking amplitude and
if this wikipedia
file is correct you need 2.6^1.5 = 4.3 more energy released in
the second nuke.
On the other hand the Russians are in the right if the next info
is correct (source):
"The magnitude of the quake, measured at 4.5 on the Richter Scale, was more powerful than the past one which was measured at 3.6," Yoo Yong-Gyu, a senior researcher at the Korea Meteorological Administration, told AFP.
Comment: This looks more like the Russian
version of the numbers and if I dig in my own memory I am not sure
but the number '3.6' rings a bell. So lets stick to the Russian
projection of reality for the time being.
I don't know what to think of this, may be
the words of a Chinese analyst came most close to the truth: May
be after all they want to become a nuclear power.
Last year we observed the destruction of a
cooling tower and now this.
The only conclusion can be that indeed North
Korea tries to become a nuclear power, there is no evidence found
for other explanations of their behavior.
So there will be some political ramifications
needed, going on as in the past is not reasonable any
(21 May 2009) Financial markets were just so
boring all of the last 7 days, I did not feel commenting on all
idiot things going round.
You know one of the things standing between a
real economical recovery and all that fake stuff from lately is
the fact there is still much too much money into the system. In
the USA alone rumors say about 4 trillion $ is sitting on the
sidelines and most of that is still borrowed money, these are not
savings looking for long term investments, it's mostly borrowed
stuff going for the fast buck.
All that money needs to get destroyed &
what is better then new fresh investment opportunities in US
banks? Just like Goldman Sucks did; stating they never needed the
10 billion in TARP bailout money but ha ha ha they offered 5
billion in new stock to pay it back... Of course the sucker
investors coughed up the five billion...
As long as there are sucker investors out who
are willing to invest in magic I think it is best to let run God's
water over God's acres.
By the way, not from God but from the FED,
today the expected came out (Yahoo AP source),
Under the Fed's new projections, the economy will shrink this year between 1.3 and 2 percent. The old forecast said the economy could contract between 0.5 and 1.3 percent.
The unemployment rate may rise as high as 9.6 percent, higher than the old forecast of 8.8 percent. The jobless rate bolted to 8.9 percent in April, the highest in a quarter-century.
Comment: On unemployment I still can't say
much because I still don't know if folks without government
unemployment aid still count in the official unemployment figures.
But GDP estimations are a joke, now about half of the Federal 3.6
trillion budget is borrowed printed money, most
prudent folks don't believe the US GDP statistics.
In another development Barry posted some very
stupid graphs about the US Federal deficits or surpluses. In the
graphs all borrowing from the US government to herself is missing;
all US Federal Funds, let it be the FDIC bank insurance fund or
the social security funds are so called 'pay as you go' funds.
Trillions in social security surplus taxes are spend
already, this is not found back in the graphs as Barry
posts it (it has to be remarked that Barry's post is around
comparing Democrats to Republicans, but even then it is a stupid
You can argue that housing starts are a
lagging statistic in the present economical environment, but ha ha
ha why were they a leading statistic in the past?
Lets leave it with that, till updates.
(14 May 2009) Five completely and utterly boring items:
Item 1) Willem on inflection points, turning
points, first & second derivates.
Item 2) US government jobs on the decline also.
Item 3) US Social Security underfunding fun.
Item 4) US foreclosures hit new high in April.
Item 5) The empty item with empty head Karl Rove.
Item 1) Willem on
inflection points, turning points, first & second derivates.
Yesterday Willem Buiter posted some basic
math on turning points and inflection points. (For the Dutch:
inflection points are buig punten, or bow points.)
On the one hand it is good such very basic
stuff gets repeated, on the other hand it is utter poverty that
lots of US CEO's from investment companies simply have no clue
about basic math like that. Those folks simply don't understand
the difference between first and second derivate behavior but they
control billions and billions in investment money...
The human universe is often a strange
universe, sometimes far more strange compared to the real
At News N Economics is a good graph comparing
job levels in the last 4 to 5 recessions, as you see on
inspection: In previous recessions government jobs did not decline
but, ha ha ha, as a green shoot now they do. Link:
The Social Security Board of Trustees report found that program costs will exceed tax revenues in 2016, a year sooner than predicted in last year's report.
Comment: Most people don't know that all tax surpluses
in the SS funds are not saved but spend as soon as these taxes are
in and the entire SS 'fund' is filled with US government bonds.
You might think it is a little bit strange that taxes collected on
behalf of the SS funds are used for other things, but for USA
folks this is 'very logical'.
The logic from the debt huggers must go a bit like this:
Debt and access to credit is good for economical growth, thus more
debt = more economical growth. Savings are the opposite of debt,
hence savings kill all economical growth.
From an old New York Times file from July
"The tax relief we delivered has helped unleash the entrepreneurial spirit of America and kept our economy the envy of the world," President Bush said in his weekly radio address on Saturday.
Comment: Unleashing entrepreneurial
spirits... Never found any proof for that in the last 3 years. In
fact obese people waggled from their house to their car (car =
paid with debt = good for the economy), drove to the stores,
waggled from their cars to the stores and bought lots of
consumables paid with debt like HELOC debt or credit card debt.
Waggled from the store to the car, drove back home, waggled to
their house and started eating.....
Welcome to the land of the entrepreneurs!
Item 4) US foreclosures hit
new high in April.
Zero Hedge has another green shoot for me; a
good graph on foreclosures.
Another record high and another 'green shoot' that validates my
theory that US house prices will bottom out at the end of 2011.
(The Zero Hedge author uses the pseudonym Tyler Durden),
Remember Karl Rove? This guy was the grand
strategist for the US Republican party.
Rather likely at present date Karl Rove still
does not know that I moved heaven & earth to get Dubya
reelected over 4 years ago. All details 'clicked', Dubya had his
second term and the USA could continue her path to financial and
These days Rush
Limbaugh is the grand strategist, so Karl what do you think? I
think this a is giant leap forward, Rush is better yes far better
than you Karl.
Anyway, Karl is accusing the US Democrat
Nancy Pelosi an accomplice to 'torture'.
I, Reinko Venema, accuse Karl an accomplice
to the one million+ dead Iraqis, a guy with the brains of Karl
should have known better. He should have hit the emergency brakes
by stating it might be unhandy to use Iraqis to kill Iraqis.
Well Karl, if you believe in a God; have fun with it. Link:
Item 1) OTC derivates? The
FED cannot account for 9 trillion in off balance items.
Of course at some point in time it had to pop
up: Derivatives and the fun they give!
Via the lady Yves & zero hedge there is a
must see video, so ok ok this old man will embed a YouTube video
for the second time in his dull life:
Nine trillion in off balance transactions?
Nine trillion US$ looks like a lot of money,
it is about 60 to 70% of the yearly US gross domestic product but
it is only 1.5% of derivative positions outstanding.
Given the market swings of lately you can
also argue that a ripple of 1.5% is only a modest ripple. My
estimated guess is that beside 'off balance items' there is also
an 'off balance money printing press' and as such the Federal
Reserve simply took in some derivatives as 'investment grade'
collateral in exchange for these trillions.
Now we know a bit more about the 'on and off'
balance items of the FED, what's the problem? The Chinese still
hang upon their AAA rated US government bonds, they won't sell, so
what is the problem in a potential 9 trillion US bucks of printed
money for only 1.5% in outstanding derivative positions?
Later to be updated.
Update (about 20 hours later) I could not find
nothing on Bloomberg validating the 9 trillion number in off
balance transactions. That does not proof it did not happen, after
all 'off balance' is 'off balance' but for the time being we have
to close the subject and simply wait for a 1 or 2% ripple in the
(12 May 2009) Five items:
Item 1) I draw a line in the sand: this math
is mine & I was the first.
Item 2) Taliban should stop attacking girls schools or meet my
Item 3) It looks confirmed: the USAF bombed 140+ civilians to
Item 4) US government borrows almost 50 cent for every dollar
Item 5) The empty item.
Item 1) I draw a line
in the sand: this math is mine & I was the first.
You know that when I was a student in math at
the local university and some professors used the results as I
found them very literally in their own publications, I did not
have a problem with that.
It only meant my math musings were good and
from the social point of view it is logical a professor cannot
refer to some student who did not publish one item.
Two days ago I came across the next method of
derivation on wikepedia, this time I draw a line in the sand. The
right hand side of this equation is from my mind and as far as I
know math history I was the first.
Skilled colleagues in math will understand it
is 'strange' to jump from the left hand side to the right hand
side and suddenly throw in 1/ln(k):
I claim the right hand side to be my
discovery, if memory serves I found it in 1987 or 1988. So I hope
some skilled colleagues in math agree with me it is a big jump to
go from 1/(k - 1) to 1/ln(k) without justification. (I remember
one of the professors asking very surprised 'Why the logarithm?')
After reading further I found a beautiful
limit dating back to 1901, the notation of the limit is a bit
strange compared to math in these years. Now, isn't this a cutie?
Taking the limit over the base number of the log, I think that's
But what do you think my dear reader? Cute or not cute?
Tip for bankers: Buy two kilo of headache
pain killers and try to solve the 1901 limit for the most simple
parabola f(x) = x^2.
Lets leave it with that.
Item 2) Taliban should stop
attacking girls schools or meet my anger.
In another development we take a look at the
Taliban fighters, without doubt a lot of Taliban simply are part
of the best fighters of the entire planet.
Back in 2001 I also observed the Afghanis are
very good and now in 2009 this is still confirmed. My
Yet the war is far from over and in the next
decades the war will continue and may be it is time to call once
more for the next:
The girls need school too!
My dear Taliban, I perfectly understand the
enemy is constantly drawing attention to attacking girls and there
is a lot of Media hype around this detail.
My advice is turning to al Qaida in general
and Osama bin Laden in particular; rather likely Osama too thinks
females need schools and we are not talking about baking
So Taliban it is up to you; if I read too
many of the next Media files I will grow angry and violent.
If stuff stays the same you will have my continuing support.
interviewed were the local Mullah of the
village and some surviving villagers.
All footage as shown by CNN was pretty
obvious; Taliban were miles away and the village people crowed in
one house because of the fighting and the bombing.
I simply believe the villagers and not the
shitty recount from the US military; for the last 8 years every
time such a thing happens the US military always comes with utter bizarre
stuff. This time it is no exception:
--There were no Taliban fighters around.
--US Sec Def robert Gates stating some villagers died from hand
grenades by the Taliban is utter crap, completely idiot and
totally unworthy for a US Sec Def.
-- The US military gave no proof whatsoever about Taliban firing
from roof tops while civilians were 'forced inside'. Only the
usual 'bla bla bla' stuff.
It makes me wonder every time again: The US
military considers herself a professional force; why always and
every time we get these weird weird pipe dreams of reality?
Item 4) US government
borrows almost 50 cent for every dollar spend.
When you ask the rating agencies as why the
USA still deserves her AAA rating on her Federal debt the answer
is always more or less like this:
The USA has a tremendous taxing power, if
taxes are raised only 1% of GDP in a decade you have over one
After that the (American) journalists never
dive a bit deeper, never ask questions like 'Can the USA raise
taxes with a few percent over a whole decade'.
Of course taxes can't be raised, already one
sixth of the population is without healthcare and a few % of GDP
going to taxes gives easily one fourth of the population without
It is a nice statistic; how much of present
day spending is borrowed & printed money. The whole fact that
the USA cannot deserve the AAA status is reflected by the fact
that the Federal Reserve is buying more and more Federal
Sometimes I wonder what US bond yields would
be without printing money; all of economical history tells us it
should go over 10%. And by printing money to make the yield artificially
low you only raise the likelihood of 15%+ yields in the future.
Till updates & to the rating agencies:
Why not create a special AAAAAAAAAA status for all USA debt, not
only government debt but also car debt and credit card debt?
Ask not what your country can do for you but what you can do for
(10 May 2009) Two items:
Item 1) The marginal productivity of debt.
Item 2) A few links.
Item 1) The marginal
productivity of debt.
The marginal productivity of debt is a
(macro) measurement of how much the gross domestic product rises
when the government takes on one more dollar of debt.
In theory this is an easy to understand
concept, but I have no clue about how to derive this number in
In practice debt needs to be paid off, so every dollar of stimulus
money should at least pay for itself via future tax income; you
must have some confidence that every borrowed dollar today will
generate enough tax income in the future.
Another practical problem with the concept of
the marginal productivity of debt is very simple: how long does it
last? If the government borrows one dollar or one € and via a
stimulus program the gross domestic product rises by 3 dollars or
3 €; does this rise in GDP last only one year, or 10 years, or
Of course a practical answer is found via:
Total GDP / Total
Suppose a government takes in 20% of the GDP
in taxes every year, in that case the extra debt pays for itself
in five years time.
The Google thing for marginal
productivity of debt gives 179 thousand answers (found in 0.17
seconds) and on position number one we find the next link:
The author (Antal E. Fekete) argues that in
2006 for the USA the marginal productivity has gone negative. (Yes
you read this right, it is not that it fell below 1 but turned
Since I know this concept of marginal
productivity for about 60 to 70 minutes, I cannot validate the
claim it has gone negative. But there are other statistics that
support this claim:
In both my home country and the USA it is
extremely expensive to get one unemployed into a job. As far as
memory serves, here it is about 400 thousand € and in the USA
under team Dubya with the Paulson clown similar numbers were
If it costs the government 400 thousand €
to land somebody in a 40 thousand € a year job, it is obvious it
will take a long long time before the 400 thousand € have paid
for themselves via taxes.
A 'food for thought' quote from the article:
The year 2006 was the watershed. Late in that year the marginal productivity of debt dropped to zero and went negative for the first time ever, switching on the red alert sign to warn of an imminent economic catastrophe. Indeed, in February, 2007, the risk of debt default as measured by the skyrocketing cost of CDS (credit default swaps) exploded and, as the saying goes, the rest is history.
Comment: It is well known and well documented
USA debt always grows faster year on year than profits do. And
what can the Federal Reserve do? Suddenly print 14 trillion fresh
dollars to take away some of the debt?
Item 2) A few
Zerohedge has some nice breakdown in the
latest USA employment figures, since most of the mainstream media
are into the 'road to recovery' it might be a good read against
all these dumbo's who want to recover, link:
Math as I created it in the first 3 years
when I was a math student at the local university. That must have
been the year 1986 through 1988 or so, I never published it
because 'students don't publish'.
But it is all here in the link below (I am especially
proud of the 'Bigeometric calculus', with that beauty baby you can
do much more fun; I named it 'true multiplicative derivation' but
'bigeometric' is also allowed although that is not from my pen).
Let the good & old times roll in the next link:
Lately the US Air Force succeeded once more
in killing large numbers of civilians in Afghanistan. As usual
they are highly efficient in putting the blame on the Taliban.
Even the present US Secretary of Defense threw in some coins:
'Some people died from hand grenades'.
So we are supposed to believe that after the
USAF bombs, the Taliban killed the rest...
Lets quote a bit:
Doctors at Farah hospital said they had treated 16 patients for flash burns and small lacerations. "Afghan doctors said injuries could have resulted from hand grenades or exploding propane tanks," the statement said.
"Local doctors also confirmed that the Taliban were fighting from the roof tops while forcing the locals to remain in their compounds. Locals receiving medical treatment repeated this information to the doctors several times."
Comment: I think the facts are clear; with or
without so called 'human shield' the USAF bombs anyway. Lets leave
it with that.
Item 1) Ok the results of the fake US bank
stress tests are out.
Item 2) ECB dives down to 1% today.
Item 1) Ok the results of
the fake US bank stress tests are out.
Ok the stuff is out, like said before it is
all a fake show because for example we miss stressing against
derivative positions. Furthermore it is only Alice in Wonderland
because the mark to market rule is replaced by mark to model, or
if you want the mark to Wonderland rule.
Also lacking in the stress test is the 17+
trillion of debt the US financial sector has upon herself and ha
ha ha, how did Lehman Brothers die?
Was that customers running away or was there some tiny tiny
problem on the debt side of that bank? No stressing against a
Lehman scenario observed...
To understand why this all is only fake
stuff, let me quote from the latest Bloomberg file where they
speak of only 6% in Tier one ratio's and a Tier one 'common
risk-based' ratio of just 4% at the end of 2010 (Bloomberg
The capital buffer for each bank “is sized to achieve a Tier 1 risk‐based ratio of at least 6 percent and a Tier 1 common risk‐based ratio of at least 4 percent at the end of 2010, under a more adverse macroeconomic scenario than is currently anticipated,” the regulators said.
Comment: No comment because whatever reserve
ratio we are talking about, when you talk of 6 or 4% you are only
discussing the quality of toilet paper. As we all know, a high
standard in toilet paper gives no protection against
Like said before: From now on only the money
printing press rules.
Item 2) ECB dives down to
Ok ok the European Central Bank lowered the
stuff with another 25 basis points to 1%. If I would be a
member of the ECB I would not vote for such things and as a free
citizen I would hope for a raise of 25 to 50 basis points.
On the other hand I bow for the principle of
democracy and if some nations like Spain (who are looking at a
15%+ rate of unemployment in the labor force) vote in favor of
such a cut, I bow.
That's it for today but one day I will have
my way and most pensions are derived from government debt because
this debt pays well decade in decade out.
In the meantime weird Spanish economists will worship the 'boom
and bust' theories from the USA, when these idiots are slaughtered
we could live free & happily.
(06 May 2009) Tomorrow results of the (fake) US bank stress
tests. It is fake in many ways; banks could deliver information
themselves & for example there is zero stressing against
derivative positions observed...
So today no financial news but only a bit of
Pornography? Yes pornography.
The Israeli leadership lately compared
pictures of killed and wounded civilians & children to
pornography. To refresh your mind: Lately the Israeli Defense
Forces bombed away about 350 kids, left unknown numbers crippled
and handicapped for life and just as easy published photo's were
equated to 'pornography'.
The picture below is from a surviving kid
from Afghanistan in the latest round of bombed civilians by
amateur Western armies like the USA army.
Lets make a small part of a movie script from
(Father and mother return to their USAF
bombed house and start collecting the diverse pieces of their
Father: Here I have Fatima's arm.
Mother: I found her other leg too, but where is her head?
(Father and mother looking around for the head of 3 year old
Fatima, suddenly father gestures)
Father: Look it is all over the wall! That is her hair everywhere!
Nice picture isn't it? May be you don't think
it is nice but I just cannot get enough of these. The more the
better; our political leaders constantly tell us that 'We are
there to help the Afghanis so they can have a better life'.
On the Israeli 'pornography equation' I can
In this Dutch country every year around 04
May you always have those pictures from the holocaust and the
concentration camps from world war II. Here in the Dutch landscape
it sometimes evolves around Anne Frank, at other times it is more
general but you always get the full load:
How the Jews were singled out, how they got
transported, the ovens, the zyclon B & all the rest. Also
included are survivor stories so the public can look with
'empathy' at the survivors.
You never hear the Israelis complain about
pornography when it comes to the holocaust, on the contrary: stuff
like that is always used to justify the sole existence of the
state of Israel.
Thus 350 killed Palestine children =
pornography (when you publish it) &
Holocaust dead corpses = the right to exists.
Why the European leaders still don't say to
Israel 'enough is enough' is unknown to me. Ok ok Germany can't do
that, but don't forget we the Dutch live quite some decades with
peace with our German neighbor while the Israelis only bomb
neighbors every few years...
The Israeli experiment has failed, if only
one concentration camp survivor agrees with me may be in a lost
moment I will shed a few tears too.
In the meantime I want more stuff of the true
face of war and not these slimy political statements from people
who do not understand war, so once more:
Mullen acknowledged that "every country in the world has got a right to develop their military as they see fit to provide for their own security."
But he said the build-up propelled by fast economic growth required the United States and allies or partners like South Korea, Japan, Australia and New Zealand to work together to "figure out a way to work with (China)" to avoid miscalculations.
Mullen's comments followed remarks by President Barack Obama's top adviser on Asia on Friday calling for high-level talks with the Chinese military to reduce mistrust.
Comment: Ahem, just a small slice of history:
When Russia invaded Afghanistan, weren't the Americans the first
to use the mujahedin in a proxy war against Russia? When there was
war between Iraq & Iran, did the USA support Saddam yes or no?
In both cases the USA flipflopped 180
If you add up all the death from before &
after the flipflop you arrive at multi million numbers of filled
coffins. In the meantime the Americans always take great pride
because they can 'take the fight to the enemy' and at home nobody
And now, from the military doctrine point of
view, the Americans want to reduce misplaced 'distrust' while
China accounts for something like 7% of global defense
Please admiral Mullen, can you take your head
out of your ass? Does the Mullen thing truly believe there is
'mistrust' on behalf of China? May be China perfectly understands
that foreign wars with huge damage always benefit the USA in the
long run. (As long as there is no damage to the home land, for the
USA anything goes.)
Item 2) Does Bernanke
understand the US economy?
Today the chairman of the US Federal Reserve
appeared before the US Congress, I seriously doubt if the guy
understands the US economy.
I will not comment on the source file but
give only an example as why I think Bernanke does not understands
how the US economy works.
Kirk said he was the first member of Congress to tour the Bureau of Public Debt, which trades bonds, and was alarmed at how much debt was being bought by the US Federal Reserve due to absence of foreign investors.
"There will come a time where the lack of Chinese participation may have a significant impact," Kirk said.
"We should track that, because up until last month they were the number one provider of currency to the United States and now they're gone."
Comment: No idea if the above is actually
true, but if the stupid Chinese stopped all that lending to the
USA that would be a good step forward. I sincerely hope the
Chinese Central Bank will make large losses on the USA investments
they hold; after talking to deaf ears so many years, why not wish
the stupid Chinese some bad luck?
They fully deserve it after five years of talking to deaf ears;
have a nice crisis China or try to get one!
Beside this, the US Quarterly offerings of
government bonds are so huge; with or without China it is clear
the printing press rules. Team Obama thinks that more debt will
save them from old debt, let stupidity rule...
Item 2) US bank stress test
& the GDP projections.
Later this weak team Obama will release the
results of the so called stress tests.
Because nobody else is doing this, I took a few minutes time to
calculate the future gross domestic product projections team Obama
I used the red graph from below and the usual
Very elementary calculations give the next
USA GDP growth in %
You see in Q3 this year the miracle happen: a
more or less flat reading on the US gross domestic product. The
miracle could even come true; US government deficit could rise to
two trillion for this year only and indeed you can prop up your
GDP with borrowed money.
Will it work?
It can only work if every borrowed dollar
generates at least one dollar in future taxes (this beside the
cost of borrowing and inflation).
You can answer that question for yourself:
Will the stimulus packages pay for themselves in the future?
I don't think so, simply look at the Debt
growth by sector file from the FED. You observe debt growth is
always a multiple of gross domestic product growth.
As such it will hit the wall; nothing can save an economy if
outstanding debt grows faster than the income derived from this
(The economy is 'debt obese' just like the average American is
'food obese': for every calorie of food, the output is always less
than one calorie.)
In a country like China stimuli could
actually work because they have savings, savings are 'potential
energy' in the economical sense. In the USA there are no savings
and as such more debt cannot repay itself. It simply lacks
the potential to do so...
(03 May 2009) Only two items and some links
Item 1) Car bombs the Dutch way: without
Item 2) US foreclosures will rise faster this year.
Item 1) Car bombs the Dutch
way: without explosives.
The car attack against the Dutch royal family
shook a lot of folks in this country, on the television they are
already making jokes of it so the 'healing has begun'.
Everything points to a lone wolf action; the
guy K. T. decided to go out with a bang and he was amazingly good
Giant breaches in security of the Dutch royal
family have been observed, with only a few kilo of RDX up to 3
generations of the royal family could have been wiped out...
How much RDX would be needed?
With 2.5 kilo K. T. could have come a long way, but 4.5 to 5 kilo
of RDX would ensure the wipe out of the Dutch royal family.
Why RDX and not some other high explosive?
RDX also stands for Royal Demolition Explosives, as such the RDX
simply would do what it name says...;)
The Dutch royalty watchers will have fodder
for years to come.
Item 2) US foreclosures
will rise faster this year.
More and more people are telling that indeed
one third of all US family houses have no mortgage on the house.
(Very likely those with no mortgage are mostly pre baby boom
people & a few baby boomers who understand personnel finance.)
Like said before: since all mortgage debt is
concentrated on two third of all US houses, this will give extra
upward pressure on the foreclosure rates. The high foreclosure
rates keep the unsold inventory high & hence prices will
The calculation is so simple, even Wall
Street traders could understand it with only two or three pain
The FED reports still 43% of home equity in the system so this
implies that there is only at most 15% of equity in the collection
of houses with a mortgage.
I have said it so often; the second leg of US
house price declines will be much more painful but all the dumb,
lazy, stupid and fat Wall Street traders do is run sucker rallies.
Why they do this I don't know, it has to do with a refusal to
accept a reality that is obvious for those who understand basic
As to the Fed’s claim that the equity of homeowners as a group stands at 43%, she points out that what the Fed neglects to tell you is that roughly a third of them have their houses free and clear. Lo and behold, some basic arithmetic reveals that 67% of homeowners with mortgages have equity of less than 15%. That, Stephanie comments drily, suggests the “destruction priced into the credit markets hardly seems out of whack with potential reality.”
Comment: Present house price decline speed is
in the order of 18% year on year, so in about one year most equity
in houses with a mortgage will be vaporized.
The biggest pain still has to come...
Oh oh the poor Americans; they even spin the ever climbing obesity
rates as good news while in fact it only proofs the entire
workforce gets more lazy year in year out.
Oh oh Americans and their social attitudes to
debt... What do you see in the picture below?
Is it US consumers grabbing out more debt or
Is it the US banks trying to grab more
Just a few links on the ECB & after that
it is goodbye:
What's your take on the US$ strength? Given
the fact that month in month out US imports decline much faster
compared to US exports it is logical to say the dollar is far to
strong. Here is what the Wall Street Journal makes of it: Dollar May See Rebound Next Week
At FXSolutions a very pro USA guy named Joseph Trevisani
writes an article with the title Credibility and the ECB.
It is very funny to read the pro American stuff; one of the
negatives of the European Central Banks is they did not understand
the fall out of the US sub prime, quote from this idiot named
How could the central bank not have known the extent of the asset-backed infection of the continental banking system? The only conclusion possible is that the national central banks who should have known did not tell them.
Comment: Hey fuckhead Joseph, why don't you
try to get your head out of your smelly asshole and for example
write some stuff with the title 'Credibility
and the FED'?
Who created all this shit in the first place Joseph? The FED or
(28 April 2009) One item only & only one item:
Item 1) Finally it is there: second derivate
in US house prices is flat.
Item 1) Finally it is
there: second derivate in US house prices is flat.
After waiting a few months longer then
expected; it looks like US family house prices are now halfway
Of course a lot of mental dwarfs instantly
see a 'bottoming in prices' but what do these Donald Ducks of
finance know about negative logistic price declines?
If the logistic model prevails, we will see
about 25 months of actual declines and about 31 months before the
Case Shiller housing index starts to rise again.
Click on the picture for the first source:
At the Ass Press there is a 'real estate
writer' named J.W. Elphinstone who thinks that the bottom is in
sight (the mental dwarf likely thinks a zero on the second
derivate is about the same as a zero on the first derivate, the
latter is estimated years into the future...) Quote (source):
NEW YORK (AP) -- In another sign the housing crisis could be reaching the bottom, home prices dropped sharply in February but for the first time in 25 months the decline was not a record.
The Standard & Poor's/Case-Shiller index released Tuesday showed home prices in 20 major cities tumbled by 18.6 percent from February 2008. That was slightly better than January's 19 percent and the first time since January 2007 the index didn't set a record.
But the good news was mixed. All 20 cities in the report showed monthly and annual price declines, but half recorded annual records. Prices fell by more than 10 percent in 15 cities, including Las Vegas, San Francisco and Phoenix. In fact, Phoenix home prices have lost more than half their value since peaking in July 2006.
Yet, nine of the metros -- including Dallas, Denver and Boston -- showed improvement in their yearly losses compared to the month before.
"We will certainly need a few more months of data before we can determine if home prices are finally turning around," said David M. Blitzer, chairman of the S&P index committee.
Comment: Do you understand what this nuthead
David M. Blitzer is talking about? It is trivial that we have to
wait 25 to 31 months before US house prices start to 'turn
around'. Does this chairman of the S&P index committee
understand elementary math? Very likely he has a degree from the
Princeton or Harvard university, otherwise I cannot explain such
On Barry's hangout you can find the usual
graphs on the CS index:
Barry says that US house prices are down
31.6% from their peak, if that is true my calculations say at the
end of 2011 they will be (just over) 25% lower compared to the
present price levels.
Please remark that wild
swings in inflation or deflation and/or sudden
ruptures in foreclosure numbers can destroy the 25% decline
estimation, but all in all another 25% is the best estimate I can
Remark 2: Only lately it came to my knowledge
that about 30% of all US houses have non or little mortgage on
them, I don't know if that is true but this roughly says all
mortgages outstanding are mainly on 70% of the other houses.
This could give upward pressure on the foreclosing numbers and
instead of 25% it could be about 28% price decline at the end of
We'll see how that one pans out...
Very likely you are bored by now, so lets
look at a beer chick that is drinking green beer:
Green beer? Green???
Give me a break, why not pink beer for dumb
(27 April 2009) Just a few links & no items.
Tomorrow the latest Case Shiller US house price index will be
out, I expected a flat reading on that baby months ago but every
time the news gets better and better. Present house price decline
implies a nice 3.5+ US$ trillion loss of home value on a year to
year basis (that is five years of Pentagon spending by the way
& what is lost cannot be taxed).
Obama was on the television today stating the
USA kids ranked 50 or so on a list of nations comparing math
skills; oh oh poor USA, is your education system just like your
health care system? Rather likely!
And they still want to lead the world...
The Obama thing also thinks he has a 'gift'
for making speeches, link:
Ok, swine flu. Since this is a very new flu
virus I was interested in how new viruses emerge anyway. On
wikipedia they have a summary article on the swine stuff, here is
the link (I think it's a temporary link):
And the answer is pretty simple: new viruses
are created when humans or animals have more then one viral
infections at the same time. After reading the pretty
straightforward 'superinfection' link I only wondered why I could
not add up one and one for myself, link:
By the way, did you know the mammoth species
suddenly died out a few thousands of years back & at present
day elephants are still afraid of mice?
If you add one and one it could be that mice killed the
(This particular Reinko theory could not be found back in the next
Peter Schiff thinks the USA future will be
inflation combined with GDP decline, a stark version of the
stagflation scenario so to speak.
It could be true but if the Federal Reserve inflates those parts
of the economy that have no influence on consumer prices, the
outcome could be different. For example: If the FED buys more and
more level 3 assets, consumer prices won't suffer very much.
Till updates, have a nice crisis or try to
(26 April 2009) Wow the brand new so called swine flu does
shake up an otherwise boring weekend: Is this the long expected
hammer on humanity that will kill in the billions? For the time
being it does not look like it, for the time being death rates are
far below 10% so although this is a very weird kind of flu (swine,
bird & human flu combined) I don't think this is the hammer of
One day it will come: a virus highly
contagious all the time but waiting 3 to 6 months before it kills
the carrier within a few days. One day it will come... But likely
it will be another day.
Luckily I have more good news:
--I found a perfect crack of my graphics
program and this one works on my new computer (it is in the French
language, but better French than Spanish or the Greek &
Italian ramblings that are 'official languages')
--The bank stress test is indeed not a stress test but a 'business
as usual' test.
The last is the only item for today:
Item 1) A look at the US bank stress test.
Item 1) A look at the
US bank stress test.
As expected the bank tests were about the US
gross domestic product, unemployment and US house prices. (So
nothing on the 17 trillion in debt the US financial sector has or vulnerability
Please remark that the latest known GDP
annualized figure for 2008 Q4 stands at minus 6.3%, there is zero
information out as why it should improve so fast.
Click on the picture to get the two
Lets discuss the 3 things (of course we can
only look at the 'more adverse' case since, ha ha ha, this is
supposed to be a stress test).
Real GDP: Look
at the graph below: you see 2008 Q4 GDP is standing at -0.8%
This is simple to understand (look at the top of the above
(0.9 + 2.8 - 0.5 - 6.3) / 4 = -0.8%
In the graph below you see USA GDP climb
again after the second Quarter of this year, this means the USA
government 'thinks' that in Q3 the annualized GDP growth will be
There is nothing that validates this, may be
the US government has some inside information but why would the US
economy make a swing from minus 6.3% to above plus 2.8% in such a
This looks like toilet paper, it is rubbish
To be honest I cannot comment on that because I don't know how the
unemployment statistics work in the USA. The 8.9% and 10.3% for
2009 and 2010 look & smell like the U3 measurement.
But even for the U3 statistic I don't know
that if unemployed people lost their rights to unemployment
benefits; do they still count for the unemployment numbers?
In a lot of nations they don't, there is no
reason why the USA should include homeless folks inside
unemployment statistics so, I just don't know.
USA house prices:
This part looks ok, we miss a few percent but I expect US home
prices to bottom out at the end of 2011 so these few percent could
be allocated in that year.
Weighing all in all: GDP forecasts look too
rosy, on USA unemployment I cannot comment very much while the
housing prices look realistic.
(Remark, by the way, the Federal Reserve uses
the 10 city Case Shiller housing index and not the Federal Housing
That's it, kill a few Americans if you feel
like it & otherwise study a bit of math.
(23 April 2009) Two boring items & that's it:
Item 1) A lovely idiot at Yahoo finance: Jack
Guttentag on desecurization.
Item 2) One more lovely picture from the economist dot com: rays
Item 1) A lovely idiot at
Yahoo finance: Jack Guttentag on desecurization.
I suppose most of my readers eat meat. If you
go out and buy a pound or a kilo of chopped meat and back at home
you look at it; can you trace back the original animals that went
into your chopped meat?
No you cannot, you simply have to trust the
meat won't poison you and it will take a tremendous afford to
pinpoint the meat down to the original animals or even the farms
it comes from.
The securization of mortgages & other
loans worked always the same: you cannot trace it back to it's
roots. You can only trust the AAA rated stamp on it.
At Yahoo finance they have a whole lot of
idiots like Ben Stein and Jack Guttentag that are paraded as
'experts'. Monsieur Guttentag is also known as the 'mortgage
professor' and it is high time we throw him into a meat grinder.
Jackass Guttentag thinks that you can 'desecure'
the securities and your profit will even be bigger compared to the
losses on the wonderful securizations...
He is a true Jackass, quote 1:
Desecuritization means reversing the securitization process. Securitization converts large numbers of individual loans into security issues. Descuritization converts the securities back into individual loans. The objective of both is the same: to enhance value. The first works during normal periods, the second can work during a crisis period such as the one we are in now.
Appealing to Many
Where investor demand for 30-year fixed-rate mortgages was limited, the diverse securities fashioned from a pool of such mortgages could appeal to a wide range of investors. With securitization, the whole was worth more than the sum of its parts.
And quote 3:
Desecuritization is a positive-sum game because the gains for successful investors will be substantially larger than any losses suffered by other investors.
Comment: This all is so stupid it is hard to
comment upon, securization can only work if there is some
fundamental trust in the AAA rated stuff you buy &
desecurization can only work if there is some fundamental trust in
the AAA rated stuff you buy.
Tiny problem: AAA rated stuff was
contaminated in the first place, so reversing the process is not
an option; there is no way this can work but for a small
Item 2) One more lovely
picture from the economist dot com: rays of light.
Since I now have a wonderful new computer
using the new 64-bit technology my old graphic program does not
work any longer. So temporary I cannot make the graphic stuff I
want, how to fill the void?
Well in the short term I can buy a Pentium 4
computer for lets say 100 € but 10 or 20 years down the line I
need a serious 32 bit simulator and that is completely new for me.
How to lay your hands on stuff like that within a small
In the meantime the economist dot com folks
still make perfect stuff so lets repost one of their works (it is
about 'rays of light' or 'glimmers of hope' or whatever economical
recovery fantasy is out there):
Ok ok, the graphic art is a bit over the top
because the DOW down from 14 to 7 thousand and flat after that
still is the prevailing scenario. But it's a nice picture from the
economist dot com.
And if we don't have had enough of pictures,
why not compare stupid European pension
funds to the US banking system?
You may judge for yourself who is who in the
next picture from the lady Yves:
The poor European pension funds, oh oh how
poor they are. neglecting my words from the Spring of 2004 has
been proven to be so costly...
But I have little sympathy for those that support the US military,
as far as I am concerned the European pension funds eat the shit
they deserve so much.
(22 April 2009) I am sorry but there was almost no financial
news of significance, therefore only a two and not as planned a
five item update.
Item 1) Brewer Heineken & who has the
worst economy contest?
Item 2) Rice wine also for the mujahedin?
Item 1) Brewer Heineken
& who has the worst economy contest?
Home based brewer Heineken came out with
profits today. Heineken beer is considered a luxury product
worldwide, except here in the Dutch landscape where Grolsch is
considered the luxury brand by consumers.
(Actually Heineken does not make beer but
lager pilsner, beside this both Heineken & Grolsch should use
at least 10 to 20% more hops to give a better drinkable
What are the facts?
Sold volumes worldwide declined 6% but
because the brand has so called 'pricing power' Heineken could
raise prices & total money turnover was only down
Since Heineken is considered a luxury product
all over the world, you can use Heineken as a proxy
statistic in comparing Europe and the USA.
In Europe sold volumes were down 10%, while
in the USA it was down 16%.
That would imply that on the consumer level,
the economic situation in the USA is worse compared to the one in
Europe. You can argue it is only beer but beer drinking is
widespread throughout the entire economies on all
household income levels.
So I thought it is a good proxy statistic
& also a good antidote against the IMF projections of GDP
growth and the likes.
The USA has won the contest;
Item 2) Rice wine also for
Over 15 years ago I tried to make rice wine
for the first time, as far as memory serves I threw it away after
a few weeks because the smell was just awful.
Just over a year ago when I started brewing
beer I decided to give it a second try, but again the smell from
the fermentation bottle was not what I wanted. I simply left it
standing not wanting to smell that again.
A few days ago I needed the fermentation
bottle, removed the waterlock and put all my bravery together,
hang my nose over it and tried to smell evil.
And again a deep smell, and another...
Some parts in my brain started fighting
other parts and the end result of that inner brain fight
was not to throw it away.
So I siphoned off the above 5 liter &
threw away the rice drab.
How does it taste? The taste is very neutral,
it is the smell that makes this stuff perfect stuff.
Here is how I made it:
1.5 kilo of peeled rice, boil
it in 10 liters for about one hour.
Throw in 1.5 kilo of sugar, best is to boil it all along.
Use Steinberg wine yeast! (Very likely Champagne yeast gives
similar results, try other yeasts for your own risk and don't
blame me please.)
After cooling down put it in a fermentation bottle, wait at least
one year before consumption.
Of course the next time I will siphon it over
after the main fermentation is done in order to avoid the 'dead
In case the mujahedin want to make some rice
drink; use less sugar (but less sugar gives less fermentation
products so may be it is better to add water to the end product so
you still have the smell and not the drunk behavior...)
(21 April 2009) Next Friday the US Federal Reserve will reveal
her 'stress test' for the US banks... (Source)
Lets wait what the sizzies will come up with, for the time being I
propose a very easy scenario as a partial test:
--US house prices bottoming out at the end
of 2011, median price down 50% from the mid 2006 top level.
--US GDP shrinking 5% a year for at least two years.
--US unemployment (as it is measured today) above 10% for also at
least two years.
The items for today:
Item 1) New IMF estimates for write downs;
USA only 2.7 trillion US$???
Item 2) Bizarre beers and perfect bread.
Item 1) New IMF estimates
for write downs; USA only 2.7 trillion US$???
On the one hand the 2.7 trillion in estimated
losses look like some kind of advanced joke given the fact that US
family house values will decline all in all in the order of 10
trillion in a five year span. (That's about 2 trillion a year in
cold family shower.)
On the other hand now the 'mark to market'
rule is replaced by 'mark to model' this gives the US banks a wind
in the back of a few trillion. This wind is highly artificial and
only forces the banks to hold every thing until 'maturity day',
but hey I am not against zombie US banks or so...;)
This is what the IMF had to say (source),
I did not feel the need to dive down into the raw data from the
IMF because I don't hold them in a very high esteem. Quote:
The financial stability report said the estimate of $2.7 trillion in losses in the U.S. included $1.07 trillion in loan losses and $1.6 trillion in losses on securities backed by mortgages, consumer and business debt. The losses for the 16 nations using the euro currency and Britain were estimated at $1.2 trillion. The losses in Japan were put at $149 billion.
Comment: Again this looks like a far to rosy
picture; only 1.6 trillion in losses for mortgage, consumer and
business debt combined? And these are losses in the asset side of
the balances of the banks, on the liability side there is still
17+ trillion of debt the banks have themselves...
And the 17+ trillion debt is still growing over 7% a year, of
course the IMF neglects stupid details like that. They only
respond to what is in the main stream news.
So there is nothing new: the IMF still
serving the USA and not humanity.
Item 2) Bizarre beers and
A female named Esther took the time to
collect a few hundreds of world wide receipts from world wide
food. If you live in the Dutch landscape or for some other reason
you can read our difficult language, here is her entire list:
In another development I found a kind of
bread at a local store that is known as 'Arabic bread'. These are
flat breads, like a pancake or a tortilla. This kind of bread is
very important to know because it solves the puzzle of how to bake
bread when you don't have yeast.
May be you think this is not much of a deal,
but for me a perfect kind of bread without the use of yeast is
like finding the number e in math. Do you think that's strange?
All bread with yeast still contain alcohol so beside being
practical this kind of bread is also a limit of religion.
I could not find a good receipt on the
Lets end this update, till updates.
(20 April 2009) Today only a link and one item.
Link 1) Barry has a 'must see' chart: S&P
earnings down 82.5%
Item 1) More on the UN conference on racism; only fools
Link 1) Barry has a 'must
see' chart: S&P earnings down 82.5%
I cannot validate the figures in the graph (I
do not have large databases with all that information) but the
graph says S&P earnings are down 82.5%.
Of course that does not mean they are down
82.5% exactly, it is only a 'point estimation' as it is known in
the land of the statistic loving people.
Please click on the picture to get a more readable version.
The Fortune 500 list seems to have a similar
reading (minus 85%).
If there is anyone out there who still thinks
we are not in a sucker rally, let these suckers buy & hold
more stocks please!
Item 1) More on the UN
conference on racism; only fools found.
Today a horrible load of United Nations
'value' went down the toilet pot.
Most guilty are the nations that boycotted
the conference; countries like the USA, Germany and my home base
the Dutch folks.
Why these boycott nations support the Israeli
apartheid regime is unknown to me. The boycotting nations are also
those who decade in decade out say they are against racism and
Ok ok , Germany is excused because after all
they did all the Jew killing...
But for my home country and the USA there
simply is no excuse; slime is what they are with their support of
the Israeli apartheid regime. You can argue that Christian
religion might have something to do with it but hey:
Aren't the boycotting nations not also those
who preach the separation of state &
church? Now aren't they?
According to the UN protocol the Iranian prez
was the first to speak; he too was a fool when relating the
killings of the Palestines to genocide.
This was dumb in many ways; the latest
Israeli military adventures left 1300 to 1400 Palestines dead
compared to 13 Israelis. This is no genocide my dear
Ok ok, back in the nineties of the previous
century the Israeli Defense Forces had a habit of kicking the shit
out of the oldest male in Palestine families. In front of the
family the Israelis kicked some fun, again; this is no
genocide because those folks were left alive without
Please check your files; that is no
The present UN chairman Ban Ki-moon also
proved to be a fool; he condemned the speech of the Iranian prez
yet the idiot forgets to mention that Israel is just another
Only losers here; Nobody simply observing
that the Israeli experiment simply has failed and as such should
be shut down. Stupid nations that boycott a UN conference on anti
racism & stupid walkouts by the nations that did attend.
Like I said so often in the past: Do you want
to understand international diplomacy? Take the mindset of a 3 or
4 year old in kindergarten & that is all you need to know:
Countries mostly interact on the level of 3 to 4 year olds.
There is a lot of emotion going round, see
for example the Vatican defending their choice to attend the UN
This all does not take away the Israeli
experiment has failed and as such
normal people with normal functioning brains should put an end to
that nation. For 5 or 6 USA governments we are looking at so
called 'two state solutions', after
so long we simply cannot wait for 5 or 6 future US governments
pumping up this nonsense.
My advice: Kill Israel.
(19 April 2009) Lazy as I am only two items:
Item 1) The USA & Nigger prez Obama not
on the UN conference on anti racism.
Item 2) Will the new Danish NATO leadership give terror attacks in
Item 1) The USA &
Nigger prez Obama not on the UN conference on anti racism.
It is very ironic and also very funny that
the USA will not attend the United Nations conference on anti
racism. Do you want to know why?
Well it is not all that obvious but the USA is afraid this will be
some 'anti Semitism' agenda stuff.
Why is this funny?
Compared to all other 'normal democracies'
Israel is only another apartheid
regime; the facts are well known: no Arab political parties
allowed, minimum wage difficulties do no apply to Arabs. When in
prison there is a large difference in medical care when it comes
to if you are a Jew or an Arab.
The list is endless, so why does the new
Nigger USA prez Obama not attend the United Nations conference?
While the Obama guy has all those wonderful speeches, why not
deliver one of those speeches at this United Nations conference?
Isn't the guy a nigger??? Does he not understand the problems of
the black skin or the 'Arab skin' inside Israel? Where are your
morals you piece of shit???
MARLENE NADLE argues that the United States should attend the upcoming UN conference even though it promises to be another hate-fest. Human rights paragons such as Libya, Cuba, and Algeria will issue statements criticizing the human rights records of Israel and America -
Comment: Didn't I say it was funny? A nigger
prez playing mea culpa on all those secret CIA prisons around the
world (because those CIA employees only did 'their job') and now
giving the green light to more apartheid inside Israel?
Boring boring boring, but like I say for so
many years it is better to kill Americans
and all that shit of 'dialogue' is for the teenagers.
Item 2) Will the new Danish
NATO leadership give terror attacks in Denmark?
Some time ago I advised the mujahedin in
Europe to strike at the Netherlands, Belgium and/or France.
Now political NATO leadership has gone to
Denmark, does this change the advice given?
Not very much, when it comes to 'non military
reasons' the Danish have their famous cartoons while here in the
Dutch landscape we have Geert Wilders.
From the military point of view it makes no
sense to place bombings inside Holland to the Danish landscape.
It was not for nothing I came up with the
list of Holland, Belgium and may be France.
The last five years of Dutch political NATO leadership were easy to understand: Only after 3+ years the NATO
decided to use smaller bombs inside Afghanistan in order to avoid
all that shit from Media files stating too much kids were killed.
That's just too much for me & I think a
nice Dutch blast will still ring home the message we need.
Of course Belgium climbs in the ranks as she
is the geographical host of NATO, if blasting in Belgium is there
it should be big (that means above the Spanish election fun.) A
reliable list of NATO leaders is found at:
That is what I had to say today:
Item 1 = Why support apartheid my dear USA &
Item 2 = No terror blasts in Denmark because.....
(17 April 2009) Two items, only two items.
Item 1) Fun with the USA consumer price
index; house prices are flat.
Item 2) The US music industry versus Susan Boyle
Item 1) Fun with the USA
consumer price index; house prices are flat.
At the United States department of labor they
have the Bureau of Labor Statistics!
The BLS always posts the latest consumer price index figures and
the Federal Reserve always acts on that by lowering the
By now I hope we all know that keeping actual
house prices and actual housing costs outside the official
inflation numbers is asking for a disaster.
So not at the BLS, may be it is time to
rename them to DDS (Donald Duck Statistics) and if you don't
believe me why not check it out yourselve?
Scroll down to you find
Table A. Percent changes in CPI for All Urban Consumers (CPI-U)
and under 'housing' you find flat stuff like
-0.1% or a lot of zero percent all month on month.
The BLS eggheads even find that annual
composition of the last three months gives only -0.5% for the
average consumer for an entire year...
So the average US consumer is 0.5% cheaper on
the home for the last 12 months...
That is very simple: they are constantly
looking for the new Britney Spears or the new Pussycat dolls. When
it comes to so called 'illegal downloads' the music industry
complains that 'You might have one Britney compared to 20
So the dolls the industry finds has to sing
the new hit over fifty times may be even over a 100 times. Song
composers select the best stuff and all kinds of computer stuff is
used to make the song sound better. Just like the movie industry
does with the visual outlook of for example Harry Potter movies.
As a consequence we are left with 'stars'
that cannot sing properly during live concerts, it
is all fake. Fake stuff is what you get.
By now a lot of my readers have seen the
Youtube of Susan:
(15 April 2009) Only a few links that I found of interest:
In a commentary on Bloomberg Robert Shiller
is arguing that the US economy needs much more stimulus to avoid a
depression. His reasoning does not convince me; the USA lived
above her means for many years, trying to pay that bill with printed
money will not help very much... After all there is still
the law of 'Conservation of misery' that says you can transform
misery but it will not fade away... Source:
We had USA inflation figures out today:
headline year on year was minus 0.40% while so called core
inflation (without food and energy) was 1.80%.
All talking heads on the television tell us the difference between
headline and core inflation, none of these eggheads observes that
now housing prices decline almost 20% year on year the reported
numbers are far too high. (In fact if people spend 25% on the
house, this should give a 5% downward pressure in the consumer CPI.)
Although China (and Russia & a few other
countries) lately came up with some plans to get rid of the US
dollar as a reserve currency, today China proved they have not
left the path of the weasels. Ok ok
they have swapped a lot of long term US government debt for short
term debt, all in all they are still a bunch of weasels in my
Still buying more US government debt...
It feels like I am talking to a heroin junkie talking about the
benefits of a non addictive life. Bloomberg source:
The Goldman Sucks boys did a marvelous job
once more: They did not need the 10 billion bailout money but they
have to raise money via selling new stock to pay it off...
Yesterday they managed to sell five billion in new stocks, my
compliments by the way, and that proofs in the USA there are still
plenty of sucker investors.
Now the serious part, quote: GS’ tangible leverage ratio was 22x at the end of Q1. (920 / 42 = 22)
That marks a slight deterioration from last quarter, when the ratio was 21x.
Via very easy to understand calculations I
have shown in the past how horribly expensive it is to bring
ratio's like this down from, lets say, 20 to 19. This also shows
it might be Goldman but it still sucks: If they truly had 925
billion in 'assets', why not sell a few percent of these in order
to pay for the government bailout money? (Bank 'assets' are always
gross assets; if you withdraw the borrowed money from it the
result is often pretty bleak or even negative.) Source:
If you need a good laugh you can read that
the latest US FED beige book sees 'faint signs of hope'. Man oh
man, I am almost fainting right now.
But serious; if you have never read a beige book or one of the
minutes from the FED, you truly must do that. They always zoom in
on details that are not that relevant very much (under Greenspan
this was even worse). Source:
On the so called 'stress test' for the US
banks (it has nothing to do with stress, the most bleak scenario's
tested against are only standard future scenario's, no stress only
day to day business), plans are to relieve the results out early
So in a week or four we get the results... In the meantime the FED
can print more shitty dollars to bring 'real strength' to the weak
The lady Yves has thundering fun on the
Goldman Sucks CFO Viniar: This idiot stated last year that they were seeing "25 sigma events, several days in a row."
The lady Yves observes the universe is not old enough for that.
It makes you wonder if at Goldman Sucks they understand the normal
distribution on a high school level or on an academic level...
(15 April 2009) Boring boring boring, that is the only way I
can describe the financial news of yesterday. Ok Willem had some good
stuff on derivates but all in all there is only one item for
Item 1) Wells Fargo stress test only 120
billion in potential losses? Pipe dream!
Item 1) Wells Fargo
stress test only 120 billion in potential losses? Pipe dream!
The honorable lady Yves from naked capitalism
once more proofs she is worth her weight in platinum.
Of course when you would ask a country to
'stress test' their banks, in the present circumstances it is very
likely all their banks can stand stress very good.
So what are the scenario's that drive this fake test?
Tests a baseline and an adverse case looking two years into the future.
Uses three metrics: GDP, Unemployment and Housing Prices.
-->Baseline case 2009: -2.0% GDP, 8.4% unemployment and a 14% decline in housing prices.
-->Adverse case 2009: -3.3% GDP, 8.9% unemployment and a 22% decline in housing prices.
-->Baseline case 2010: +2.1% GDP, 8.8% unemployment and a 4% decline in housing prices.
-->Adverse case 2010: +0.5% GDP, 10.3% unemployment and a 7% decline in housing prices.
Comment: You vuking don't believe this, but
this is the USA 'stress test'.
Remark there is a 'baseline case', an 'adverse case' but not a
After my humble opinion there is no reason why GDP should run this
high, unemployment would be this low & most of all: why this
silly decline in house prices?
House prices will likely bottom out at the end of 2011, on the
back of that GDP and employment will only shrink...
I think, now I know the 'public domain' stuff
of the stress test, I refrain from more comment. Better hit the
'publish website' button and do something else to relieve my
stress from this idiot stuff.
On the other hand it is a good thing the
Americans still refuse to understand the future, that will keep
military spending at the wrong pockets and that is good
(14 April 2009) My life is boring, so five boring items for
Item 1) Let it be official: PPIP ceiling at
best 40% of book value.
Item 2) More FED fun: US mortgages above one GDP & climbing
Item 3) Funny graph from Jesse on S&P price/earnings ratio's.
Item 4) If only more US soldiers got killed this way.
Item 5) The empty item.
Item 1) Let it be official:
PPIP ceiling at best 40% of book value.
Dear reader, the PPIP or the Public Private
Investment Program (better known as the 'pee pee i pee' program)
is designed to relieve the US banks from toxic assets.
It is NOT designed to relieve them from toxic
liabilities but from present toxic assets. That toxic liabilities
is some future fun (until now only AIG is delivering on that
Lets take a fresh look at the latest FED link
Item 4) If only more US
soldiers got killed this way.
If only we could killed more US
There are many ways to get extra killed US
soldiers, most ways I studied also give rise to large numbers of
But the next way was just so beautiful, it
exposes the true kernel of how Americans are (msnbc source),
FORT STEWART, Ga. - An Army sergeant charged with murder shouted "My career's over, just kill me," as soldiers pinned him to the ground after he shot and killed two fellow U.S. soldiers in Iraq, members of their unit told a military judge Monday.
Comment: It is not the first time and it is
not the last time I ask the rest of NATO this: Why do we have the
USA as the military leader in NATO?
Floss your brain, kick them out and if a decade later they have
come to their senses leave them in again.
The rest of NATO simply do not understand how the Americans are,
they have some weird 'killing desire' and their murder rates
inside society are always five fold compared to normal
My dear NATO members, do you want a five fold increase in civilian
murder rates in your home countries? Yes or no?
Please kick that shit out of NATO, we are
better off without them...
Item 5) The empty
Empty empty empty; please use your own
(10 April 2009, updated 11 April) Today it is the Christian
Good Friday but is it a good Friday?
Item 1) Iraqi good Friday: Five US military
Item 2) US currency backed by crap?
Item 1) Iraqi good Friday:
Five US military slime killed.
Nice stuff from Iraq: in Mosul five US slime
got killed (Reuters source),
MOSUL, Iraq (Reuters) - A suicide bomber detonated a truck packed with explosives outside an Iraqi base in the northern city of Mosul on Friday, killing five U.S. soldiers and two Iraqi policemen, the U.S. military said.
The attack was the deadliest for U.S. soldiers in Iraq for months. An insurgency led by al Qaeda and other militants has proven stubborn in Mosul, 390 km (240 miles) north of Baghdad, even as the violence set off by the U.S.-led invasion of 2003 has waned elsewhere in Iraq.
Comment: My compliments go to the Mosul
operatives! Great job!
I am very sorry I never write that much about Iraq, but every time
I do that visiting numbers to this website decline and now the
enemy is on a course of financial self destruction too low
visiting numbers are unhandy.
But the Iraqis will be in my mind forever;
when daily killed US slime was on her top on the entire war
(March, April and May 2007) the Iraqis honored me during the
Like a light switch daily killed averages was
maximized (the 'one' days) or minimized, how can I
Again I want to thank the local commanders
for following my advice on that very important detail (until now
the US military still does not have a clue, for me still a source
Lets poke some fun at the US military slime
& how they explained the killed averages:
---Begin 2007: killed slime numbers rising.
It is the surge!
---End 2007: killed slime numbers declining. It is the
When a professional army uses the same
argument to explain opposite results, it is clear they do not have
Proposal to the US military: I think I have
found your next commander that looks fit to lead you in future
wars. Here he is:
Item 2) US currency backed
For a long time I have been arguing that all
these Federal Reserve programs to 'provide liquidity' or 'restore
lending' can only be done if they accept garbage as collateral for
the 'help' involved.
At present date about 1.6 trillion of garbage
is sucked in.
On many occasions I have also argued that
there was no 'mark to market' rule when this garbage was on the
balances of the US Federal Reserve. (There is only a haircut in
the 'acceptance phase' after that only silence & no mark to
Lately the honorable Willem Buiter opened my
eyes about how this works: There are all kinds of so called
SPV's (special purpose vehicles) that take the risk and so the FED
is 'risk free'. Ok Ok there will be some printed money flowing to
the SPV's but it is not the task of CNN or CNBC to check stuff
The next link is about the FED balance sheet
(take your time to read the four comments made by other readers;
they contain lots of historical information!), link:
Valuations and Haircuts: The ABS must have been purchased by a third party and valued at a market price. Haircuts are designed to exceed four times the estimate of stressed losses.
Comment: With a 'third party' we are likely
looking at some SPV sucking in the risk. The quote comes from the
latest 'loan restoring' action from the FED, that is the TALF
program. You can store it in your long term memory by remembering
LF = Loan Facility.
As far as I see reality, the Federal Reserve
tries to prop up the value of the so called 'toxic assets' on the
balances of the US commercial & investment banks. But if these
toxic assets are used in the Loan Facility you only get (source),
TALF loan requests sink 64% to $1.7 bln, NY Fed says
SAN FRANCISCO (MarketWatch) -- Investors applied for $1.7 billion in loans to buy asset-backed securities under a new government program designed to jumpstart consumer lending, the New York Federal Reserve Bank said in an update to its Web site late Tuesday.
Comment: TALF is an utter failure and (mark
my words) the new PPIP program for lifting toxic assets from bank
balances will also not work.
Lets leave it with that so I can hit the
button 'publish website'.
TALF & PPIP are only SPV's to
destroy US military funding.
Till updates, have a nice War on Terror or
try to get one.
To put it simple: The depository institutions
got only 40.65 cents in lending for every dollar pledged...
Since until now pledged stuff was of the
'best quality' the commercial banks had, this means that prices in
the PPIP program will be lower.
End of this update.
(09 April 2009) Lazy lazy lazy, only two items for today:
Item 1) Musings on the US trade deficit.
Item 2) Is there a genetic component so that you cannot speak in
Item 1) Musings on the US
Markets soared today on positive banking
news: US based bank Wells Fargo had a 3 billion profit in the
first Quarter of this year! (Ok if we withdraw the government aid
the picture might be different, but why do negative?)
So lets look at more super positive news (source):
The US trade
deficit for Feb declined to minus 26 billion US$!
In the past this was often 2 billion a day or
60 billion a month. Do you think the decline is good news for the
US economy? Lets see, the deficit is defined as follows:
deficit := US exports minus US imports.
Both the size of exports and imports are
declining year on year, the decline in trade deficit is mostly
because imports fall much faster compared to exports.
If we use the size of US imports as a measure
of health for the US economy and the size of US exports as a
measure of health for 'the rest of the world', what do you
You can choose for yourself:
1) Negative view:
Holy shit, US imports decline so fast compared to exports that it
is inevitable that the US economy shrinks much faster compared to
the rest of the world.
2) Positive view:
Large trade deficits are bad, small deficits are good. Together
with the positive housing and banking news the DOW is ready to
boom to the 9000 and/or 10 thousand level.
I think you only need 3 or 4 brain cells to
observe this is in fact negative news, but the lack of brain cells
is just the main problem at the other side of the Atlantic ocean.
Most investors over there simply don't understand their own
economy and always loose themselves in irrelevant
(Update 10 April: Yesterday I did not mention
that US imports also decline because of lower oil prices, yet also
the month on month trend still is the same:
Imports declining further, exports a tiny bit up. So in the US the
economical situation simply is worse compared to the rest of the
WASHINGTON (AP) -- The U.S. trade deficit plunged unexpectedly in February as the recession pushed imports down for a seventh straight month while exports rebounded a bit. Analysts said the smaller trade gap is fresh evidence the economy's downward spiral may be easing.
Comment: Again an elementary lack of 3 or 4
brain cells observed.
End of the update.)
Item 2) Is there a genetic
component so that you cannot speak in public?
Genetics is a branch of science I know almost
nothing about, on a website under the name 'freewill' I came
across this weird info (source):
Social Anxiety and Selective Mutism
Social anxiety is not a free choice. It’s estimated that 7 in 1,000 children have "selective mutism" (SM), one type of social anxiety that renders children absolutely silent in public (e.g. they never speak up in class), even when they are normally talkative at home.
The website has lots of surprising info that
makes you think about yourself in strange ways. It's not a holy
grail but this website places some dots on the i & stuff like
The article includes a quote from Ted Sorensen, the former counselor to President John F. Kennedy: “You have to not only have a sense of confidence but a pretty big ego — you have to almost be a fanatic.” Other qualities mentioned include "ambition and drive" and "believing you have special gifts” and being attracted to the "elixir of adulation" and the "opportunity for immortality".
Comment: Former prez enemy combatant Dubya
was definitely preoccupied with the 'opportunity for immortality'
why on that detail I don't give a shit.
I want to implement policies and let others do the work, if the
other is the baker around the corner or the prez of 50% of world
military budget, again I don't give a shit.
Till updates, have a nice crisis or try to
(08 April 2009) Two items:
Item 1) More confirmation that US house
prices will drop 50% from their top.
Item 2) Ph D Jeremy Siegel trying to prop up markets with logic
Item 1) More confirmation that US house
prices will drop 50% from their top.
In the USA a female named Meredith Whitney
seems to be rather famous, some name her red hot & stuff like
that. Indeed she is much much better than a lot of male colleagues
who, as usual, are without balls.
Now how long am I saying that US house prices
will decline 50% from their mid 2006 top? That is since 12 Nov
2007 or about 15 months long.
Furthermore, contrary to Meredith, I never changed my estimation
on that detail.
Also since 12 Nov 2007, just a few weeks
after the latest DOW top of over 14 thousand, I informed you the
DOW would be cut in half. I admit it took a long time of about 14
months but did I ever need to adjust my prediction?
In the CNBC video below, look at about 5.30
minutes for Meredith new estimates on US house prices. (By the
way; this is the very first time I embed a video for myself, it is
very very difficult; you must cut & paste a few lines of html
Item 2) Ph D Jeremy Siegel
trying to prop up markets with logic again.
Jeremy Siegel is somehow a dangerous man
because most Americans are far dumber then he is, the dumb
Americans are easy persuaded to follow Jeremy's logic.
Jeremy is always looking for fresh insights
as why stock markets should be higher, I think the guy is a snake
in a rather pure form.
Lets look at the latest fruits from his
brain, the source file is:
Jeremy has created a brand new way of
estimating the earnings of the S&P 500.
In short it goes like this, quote:
A Challenge to Standard & Poor's
I proposed an alternative methodology for computing aggregate earnings: Weight the earnings of each company by its current market value, in a fashion identical to the way the return on the S&P 500 Index is computed. This alternative methodology leads to substantially higher earnings for the index than does the S&P methodology.
According to Standard & Poor's, total reported earnings on the S&P 500 index for calendar year 2008 was a mere $14.97, the lowest in many decades, primarily because of the huge losses of a few financial firms. S&P reports that, at the index's level on March 31 of 798, the S&P was selling at an extraordinarily expensive 53.3 times last year's earnings.
Comment: Of course simply adding up all
earnings without market cap remains the prevailing statistic. Lets
give a simple counter example as why the Jeremy method is pure
Take two companies A and B from the S&P
500 list, suppose that over the last decades their price to
earnings ratio's are very similar, lets say for simplicity P/E =
Market cap of A is 10 times the market cap of B, hence earnings
from A are 10 times that of B.
If you give the total earnings of A and extra weight of the
market cap, company A weighs 100 times as heavy as company B in
the Jeremy method.
The Jeremy method makes only sense when you
use market cap as a weight for the earnings per share, that could
give some kind of average earnings...
So is the market cheap? For that you have
estimate future earnings and given the present economical chaos
these future earnings are expected to be bleak bleak and bleak
(07 April 2009) Five items again:
Item 1) Barry on overstating the US gross
Item 2) Will Dutch house prices decline 40%?
Item 3) Soros on the US dollar strength.
Item 4) A finance lecture from Robert Shiller.
Item 5) The empty item.
Item 1) Barry on
overstating the US gross domestic product.
With head and shoulders standing above all
other items of today, this is the most important one because as I
have written more than once: Often the USA GDP growth is
Mark my words: I am not saying this is evil
fraud done by evil Americans. All I say the real GDP growth was
overstated (and as such should be down graded but that's another
The next quote is only about consumer
inflation but for the deflator that is needed to calculate the
real GDP there is similar stuff. Quote:
With home price increases out of the CPI and the price-to-rent ratio rapidly increasing, an important component of inflation remained outside the index. In 2004 alone, the price-rent ratio increased 12.3%. Inflation for that year was underestimated by 2.9 percentage points (since “owners’ equivalent rent” is about 23% of the CPI). If home-ownership costs were included in the CPI, inflation would have been 6.2% instead of 3.3%.
Comment: Seldom you see stuff like this, I
have no proof but if in the deflator we have similar stuff this
spells no good. Beside this, all that building of new homes was of
course nicely locked in the GDP growth. Yet at present day these
new homes are on average also of less worth.
Don't get fooled my dear reader: the present
day of real GDP level is still inflated from funny things done in
the past. Lets go to the next item.
Item 2) Will Dutch house
prices decline 40%?
Lets start with a nice anecdote:
Many months ago the OECD came out with a
report stating that home prices in my home country and another
small country could fall by 30%.
I retaliated against the OECD; why
attack small countries you bunch of vukheads?
If there is some country where home prices will fly against the
wall it will very likely be the United Kingdom.
After about two weeks the first media reports
of declining prices in the UK became main stream news... (For me
that was funny because it proved the OECD is indeed a collection
of vukheads neglecting the UK and only destroying small
End of the anecdote.
I don't know much of the local housing
market, for example I never followed the local 'income to house
prices' statistics. All I know is that the local housing market
has indeed high prices, but a decline of 40% as the next graph is
Who knows? Is the graphic correct? If it is
correct, why did nobody sound the alarm bell sooner? Who
There are a lot of strange theories out there
explaining the present US dollar strength. Lately on Bloomberg tv
I found a very nice one:
Most debt on the planet is written in US
dollars, a lot of that debt is defaulting leaving the remaining
That is a strange theory, if for example in
food there is an explosion in rotten eggs would the price of eggs
go up? Because the remaining non rotten eggs represent the same
value only with less eggs? I doubt this, a reasonable person
cannot trust eggs any longer and will not pay more for these AAA
George Soros has the next to say in the Tech
From Yale university I enjoyed a very
elementary course in financial math from Robert Shiller. And I too
learned a thing: now I know what the alpha and the beta like we
have in the names of websites like seekingalpha.com.
These are only the regression coefficients of the relative
performance of a company (or a sector) compared to the market
using the least square minimizing stuff.
All in all the lecture is good, it has a few
technical errors (and strangely the class does not correct the
prof) but all in all it is ok.
Empty empty empty; will the US dollar go down
the path she deserves or will China prop up the thing forever? Use
your own brain please!
(06 April 2009) Ha ha ha, the IMF came in funny today: All
those East European countries should fall inside the € zone as
soon as possible.
Here in the Dutch landscape a lot of commentators were against
stuff like that because this would weaken the €. I agree for the
full 100%: the € is supposed to be a strong currency and we have
plenty of weakness already; just look at the ECB rates:
Do they reflect the fundamentals of a strong currency? They don't.
On the other hand we simply cannot leave
these countries to their fate, the only reasonable help is making
their local currencies stronger & the ECB could do miracles in
that. If these future members of the Euro zone promise they won't
print money, then very may be the ECB could prop up their
currencies in case they are clearly undervalued.
In such a case these countries could still afford some imports at
Deal or no deal?
For the rest I only post a few links I found
interesting for some kind of reason:
But how good is his? Already, the federal government has committed $12.8 trillion to fight this financial fire (a figure that doesn't include FDIC's $6 trillion worth of insurance commitments). Then there's the trillions of unfunded liabilities for private and public pension schemes that Uncle Sam may be forced to absorb. Also there's Obama's budget deficits, which will commit us to borrowing trillions more over the next decade. Finally and most importantly, our unfunded liabilities for Medicare and Social Security surpass $50 trillion.
At the end of the day, after borrowing and money printing have been maxed out, the federal government's credit is limited by the taxes it can collect from the American people. No way no how can Americans pay for all of the above. It would cost every one of us hundreds of thousands of dollars today. Yet society still feeds the collective delusion that government liabilities are "risk-free" because it has a printing press. But printing is just default by another name: inflation. And the more we come to rely on government guarantees, the more unstable they become...
Comment: Indeed it would costs every US
citizen hundreds of thousands dollars for the present fairy tale
world to evolve into the future. It all gets hilarious when you
compare this to the 'assets' and the 'liabilities' of the entire
USA as reported by the US Federal Reserve... You just can't stop
laughing if you place them together.
Of course it's no secret I am only attacking
the US military budget via this website in the last years... Let
that be no secret: the Pentagon perfumed princes will feel my fist
and as usual pretend they don't know where the fun comes from.
In order to understand that the funding of
the US military is just as ineffective as the health care system
over there you have to check out this fun (it's from the Ass
Plans to buy a new fleet of White House helicopters also were among the programs terminated by Gates. With a price tag of $13 billion and a six-year delay, the helicopters were considered at risk to be cut in the 2010 budget.
Comment: The poor creatures; only 13 billion
and a six year delay for only some helicopters? Almost all of the
Pentagon future plans have stuff like that: horribly over priced
and many many years too late.
In order to understand how deeply rooted
corruption is inside the US society, check out the Tech Ticker
with the next video:
Man oh man, I am far to old to pick up new
ideas like quantum space.
Luckily I haven't lost my grasp of reality for a full 100%; George
Soros just like me thinks the US$ will be the reserve currency
for only a few more years...
Come on George, the dollar is at best one
Planck length of worth...
(05 April 2009) No items, just a few links posted for today.
Jesse has a highly interesting graphic about
the month to month development of the NFP numbers (so without
seasonal adjustment). It is the third graph you have to see: it
says there are two sharp bottoms in UN non farm employment every
Please remark I cannot stand for the correctness of the graph but
you must see the third graph in:Non-Farm Payrolls: Revisio ad Absurdum
Barry makes chopped meat of all those arguing
that we can neglect the non farm pay rolls since these are only a
lagging indictor. So he makes some afford as to separate the
lagging fun from the present direction of the US labor market: Temporary Help Services Employment Down 27%
These folks name themselves the 'Smartmoney
staff' but on page six in the fifth reason as why the DOW rallies
they write, quote (page six source):
Take roughly $14 trillion in cash sitting on the sidelines. Add in the reality that the market trades on perception as much as reality.
Comment: The dummies from smartmoney think
there is 14 trillion or a complete USA GDP sitting on the
sidelines while for many months there is only an estimated 4
trillion figure hanging out.
This reveals at smartmoney they don't have a solid mental
representation of what exactly one trillion is. Lets leave
dummyland behind & go to:
Item 1) The relaxing of the mark to market
rule (the 157 rule).
Item 2) The IMF comes back strong, now if only they...
Item 1) The relaxing of the
mark to market rule (the 157 rule).
The 157 rule was meant to create more
transparency in large institutions and has some of it's largest
roots in the Enron debacle.
At present times some folks think the mark to market value rule
(or the fair value rule) is the cause of the write downs at the
This is not correct, it is not the cause but the mechanism of
write downs, the stuff on the bank balances was crappy in the
first place and that is the cause of
the present down writings.
Once more we observe a very elementary fault in understanding the
Today the 157 rule seems to be a bit relaxed,
but the Financial Accounting Standards Board voted 3 in favor and
2 against the changes.
Today there is no serious information out,
more or less all I have is the next (source),
The changes, which apply to the second quarter that began this month, will allow the assets to be valued at what they would go for in an "orderly" sale, as opposed to a forced or distressed sale.
The new guidelines also will allow banks to avoid reporting some losses on securities by splitting them among factors like fluctuating interest rates that won't have to be counted toward net income or loss.
Comment: I have zero problems with marking
the stuff for 'orderly' sale prices, we all know that if you must
sell your house or your car within 24 hours you simply don't get
the best deal. The reason that there is no market for this garbage
is again: it was garbage from the beginning. And despite the
'ruthless' 157 rule banks don't trade the stuff because banks know
the price is far too high... It's as simple as it is; banks
themselves do not trade it because it is
With the second part I have serious problems,
if costs or profits from fluctuating interest rates are taken from
the market books to the banking books I don't think that is wise.
How to prevent all losses going to the banking books & all
interest profits staying on the market books?
Should the accountant decide what goes where and make or break the
bank he or she has to check? This drives the accountants in an
impossible situation and may be that explains why the vote was 2
Beside this, most interest rates are highly
predictable. If a bank goes belly up details like that they simply
Item 2) The IMF comes back
strong, now if only they...
Jesse from the café Americain was on some
kind of holiday leave for one week, so I was very eager to read
his first update after a week because stuff like that is often
And indeed it was very good, it was even so
good that may be Jesse should take one holiday week every
Before we quote & link, today at the G-20
summit in London there was news that the IMF reserves will be
pumped up to something like 750 billion US bucks. That is good
news but because it comes from the G-20 it might also take 125
years to get such an amount of money in the vaults of the IMF.
By the way; it was funny to observe Obama
giving an iPod with all his speeches as a gift to the UK queen.
This sheds a light on Obama: he thinks he can change the world
with speeches. After my humble opinion Hitler is still king in
"The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time."
The source file is a MUST
READ and is from a former IMF employee named Simon Johnson
while a guy named James Kwak also made some
Of course I have to do some cherry picking
too, from the 'How to become a banana republic' section quote:
In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending.
Comment: It is not only lending that stopped,
the usual trade of garbage also suddenly stopped once the banks
realized what they were trading every day...
Luckily the IMF has a giant vault of 250
billion US$ so at an instance they can save America...;)
Lately the IMF is coming out with all kinds
of weird statistics about US
economical recovery and strange estimates about USA future
It is well known institutions like the IMF
use highly advanced models to calculate the future. The models
might be right but if they use weird inputs
based on fairy tales the outcome is not that perfect.
Now if only the IMF could feed info into
their models that US housing bottoms out at the end of 2011...
If only that, if only that...
That's it, till updates.
(01 April 2009) Today the stock markets rallied on completely
unexpected good news:
Throughout the USA now it is Spring, trees
and bushes started to sprout new leaves!
Economists expected the depressed climate on the stock markets
could spill over to real nature but now we see new green leaves
this could mean the worst is over...
And if nature grows, soon the company earnings will follow and
stock markets are ready to boom, boom & boom.
My dear reader, would you not think it is
utterly strange to hear the above words from television business
& finance channels?
Today they did this; it were not green leaves but 'unexpected
rising of the pending home sales statistic', of course it was a
'month on month' statistic.
Once more: Housing has strong seasonal
components, families with children try to avoid disruption of the
school year and try to sell in the Summer holidays. Farmers with
crops try to sell in the Winter & so on & so on.
All those business & finance television
channels have zero learning curve
after my humble opinion...
Today I only have one serious item, I have
never ever published only one item and I hope this will hammer
down some wisdom at for example European pension funds who still
don't have a clue where we are heading.
Item 1) US financial sector debt 121% of GDP
and climbing fast...
Item 1) US financial sector
debt 121% of GDP and climbing fast...
Ok, here we go:
Total debt of the USA financial sector
(according to the Federal Reserve) is standing at:
of US$ (present day $ of course, source)
Present day (that is Q4 of 2008) USA GDP
billions of US$ (scroll down a bit in the next bea source)
So financial sector debt is 121% of the US
gross domestic product, it is well known the US government always
takes over bad debt from the financial sector.
It is also well known that GDP is shrinking
over 6% a year right now and financial sector debt is growing over
7% a year...
The Obama thingeling can think he can do a
nice 'surgical bankruptcy' of General Motors but how to pipe dream
away this ever expanding ratio of 121% of the GDP?
Since the USA runs a deficit there is no
taxpayer money to stabilize the ever expanding ratio, so only if
the Federal Reserve prints money in the order of 13% of GDP (6 + 7
= 13) this can be stabilized.
My dear European pension funds: do you
understand the dimensions of this game & will you finally take
some action or proceed with you dumb day to day activities?
Here in the Dutch landscape we have a very
large pension fund ABP, I call for the execution of the chairman
of the ABP. The chairman is Eelco Brinkman.
People should cut of his head
and his dick, put his head on a pole and place
the dick in his mouth.
As usual the European pension funds will not
act on that what is the obvious future & as usual we will have
many more months of 'surprising and unexpected good news' in the
USA housing market...
That is what I had to say today, till
(31 March 2009) The five items of today:
Item 1) Surprising Case Shiller house index
Item 2) USA financial rescue nears GDP as pledges climb to $12.8
Item 3) Today it was Afghanistan day in The Hague.
Item 4) Russia on a new standard for a better world currency.
Item 5) The empty item.
Item 1) Surprising Case
Shiller house index figures out.
Today the Case Shiller house index for Jan
was out, I expected a more or less flat reading compared to Dec
(of course you have to look at year to year comparisons) but
strangely enough it was as next:
10 city composite index down 19.4% Y on Y
20 city composite index down 19% Y on Y.
So the second derivate still isn't zero, this
seems counter intuitive compared to other information. Price
declines still accelerate. How come this?
The best explanation found until now is that
banks are unloading their unsold volumes of foreclosed houses, I
cannot validate this since I have no detailed access to sold
volumes of houses but this bank rumor could be true.
Lets cut & paste some bizarre quote from
the Reuters file:
While the S&P/Case-Shiller regional indexes show a 26 percent slide in prices since the peak in mid-2006 and the S&P national index shows a more than 18 percent in the 2008 fourth quarter from a year earlier, Miller said a more realistic estimated drop is in the 12 percent to 15 percent range for the typical homeowner.
"What we find is that on the way down, Case-Shiller overestimates the decline by about 10 percentage points or so, and on the way up will do the same thing," said Miller, who is a professor at the University of San Diego's Burnham-Moores Center for Real Estate as well as a co-founder of Collateral Intelligence.
The typical homeowner's price change probably is about 50 to 60 percent of the downturn shown by the index, he said.
Comment: These are very strange words, as far
as I know reality the only way Case Shiller could overshoot during
climbs and undershoot via declining prices is if they would be
based on actually sold homes. But I follow the CS index because it
is based on a sample of houses regardless if they are sold or not.
The whole problem with this article is that it simply does not
explain why the CS index would be wrong, all in all this article
is only an advertisement for that 'Collateral Intelligence'
business they run.
So the information that the CS index has structural
flaws can be neglected; however there is one detail that could
Until now I have never understood why, on the
top of the market, total housing value was 23+ trillion. Mortgages
plus heloc was only 14+ trillion, leaving a healthy 9+ trillion
US$ in home equity there sitting untapped...
I mean we are talking about debt hugging Americans and not about
Chinese who would hug a lower debt ratio on the house!
Weighing all in all; the 19% came in as a
positive surprise (in actual dollars this means the declining
speed is in the order of 3 trillion dollars a year or, as I often
measure it, over four times the US military budget).
The idea it could be banks unloading foreclosed houses could be
true but needs more investigation.
The idea that CS over-or-undershoots is thrown into the garbage
(In case you want some graphics, check it out at Barry's
Item 2) USA financial
rescue nears GDP as pledges climb to $12.8 trillion.
Bloomberg reports that the USA financial
rescue nears one gross domestic product and although it will be
very funny when it crosses one USA GDP we simply cannot add grapes
and oranges and conclude we have this kind of fruit in
March 31 (Bloomberg) -- The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.
New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.
Comment: My own Dutch government does similar
stuff and the whole problem simply is in the 'guaranteeing part'.
If my government guarantees some 20 billion in new sold bank
bonds, how the vuk can I estimate the cost to the local
The good thing is, when we withdraw all those
commitments from the 12.8 trillion it is obvious that the reminder
cannot be taxpayer money and voila the FED prints more and more
money. (Of course these days they don't print in a real sense but
open one more branch of the balance where the money is 'created'.)
Item 3) Today it was
Afghanistan day in The Hague.
Today dozens and dozens of representatives
converged in The Hague and my dear reader this has nothing to do
with serious help for Afghanistan but this is only some weird
'psychological process' the diplomats need and use for showing
they are the 'good ones' while Taliban are 'evil'.
Military facts are that in seven years there
is about zero point zero progress, the only good thing is that
until now there still is no aerial spreading of poison to kill the
poppy fields... And that's about the only good thing; poor Afghan
children still do not eat vegetables contaminated with anti heroin
Other military facts are also easy to
understand; applied Western forces are so low they can only
operate under the cover of large amounts of air power and long
distance artillery fun. That does not make much friends either.
I could write upon Afghanistan for hours but
I will not do that, I will only wish the Afghanis good luck and
quote a very stupid quote (source):
March 31 (Bloomberg) -- Secretary of State Hillary Clinton said Iran offered “promising” ideas at an international meeting today on helping Afghanistan.
“The questions of border security and in particular the transit of narcotics across the border from Iran to Afghanistan is a worry that the Iranians have that we share,” Clinton said.
Comment: I cannot validate via other sources
if power slut Hillary Clinton actually said this, but the Hillary
power slut is talking about a problem from over 10 years ago:
In those long lost years harvested puppy stuff went to Iran to
turn into heroin, sometimes this heroin got back into Afghanistan
and may be that caused some problems...
It is well known that at present day much of
the refinery takes place inside Afghanistan and if memory serves
it was me, Reinko Venema, that spelled out the rules for taxes and
distribution of the profits from the heroin trade...
My dear power slut Hillary, if in the present
year 2009 the Taliban are winning, it could be they have listened
to my words and you are only looking into the barrel of your own
USA created War on Drugs.
By the way my dear power slut Hillary, on the
Mexican drug trade I never enforced a moral code, how is that one
going my dear power slut???
Item 4) Russia on a new
standard for a better world currency.
Arkady Dvorkevich, the Kremlin's chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.
Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.
Comment: Of course it is obvious we need a
real backbone as reserve currency and not the US dollar. Again my
compliments go to the ones who baked in the special drawing rights
of the IMF.
How could the IMF resist to logic that helps a better
international reserve currency?
Lets leave this item with that.
Item 5) The empty item.
Wow wow wow, it has been a long time since we
had an empty item!
For readers who are new:
The empty item is empty so you can use your
It's in between your ears and behind your
eyes; good luck with using it...
(30 March 2009) And again, lazy as I am, only two small items.
Item 1) More on Bayes statistics & long
term stock volatility.
Item 2) Financial humor: The FED is stating it's independence is
Item 1) More on Bayes
statistics & long term stock volatility.
Today I updated the second item from
yesterday where Bayes calculating rules are a little bit abused.
(See 'The old envelope problem' below in item 2 of 29 March, if
you cannot crack the problem instantly please store it in your
memory and solve it in the future; it will be very rewarding and
give a better understanding of Bayes stats.)
Via the Tech Ticker I found a lovely quote on
long term behavior of stock markets, I link to the businessinsider
dot com article:
And from that source quote (actually the
quote is from the NYT):
It is one thing to acknowledge the existence of uncertainty, but quite another to measure its influence on long-term market volatility. To do that, Professors Pastor and Stambaugh rely on a statistical approach pioneered by the Rev. Thomas Bayes, an 18th-century English mathematician. Bayesian analysis is often used to assess the uncertainty of future outcomes, based on a formula for updating the probabilities of given events in light of new evidence. This approach is quite different from traditional statistical measurements of probabilities based on historical data.
Applying Bayesian techniques, the professors found that reversion to the mean isn’t powerful enough to overcome the growing uncertainty caused by other factors as the holding period grows. Specifically, they estimated that the volatility of stock market returns at the 30-year horizon is nearly one and a half times the volatility at the one-year horizon.
Comment: I did not read the article from
Pastor & Stambaugh so I can only say it looks plausible. If
the findings hold up for a longer period, lets say another 2
centuries, all present models for pricing options or bank risk
(the VAR model) are cake.
In this it also has to be remarked that price
to earnings ratio's in the USA were far to high for a too long
period, we can put the blame for this detail squarely on Alan
Greenspan; if pension funds cannot live on the returns of
government debt, this money will drive up the P/E ratio's leading
to nowhere but the desert.
Item 2) Financial humor:
The FED is stating it's independence is
The poor US Federal Reserve; lately she
unfolded plans to buy a few hundreds of billions in US Treasuries
(government bonds) via printing more money.
The theory is, as we are told, the FED is
fighting deflation. There really is 'no problem' because later
when inflation could be a problem, the FED simply sells these AAA
rated assets again (to mop up the excess in liquidity).
Nice theory, but when inflation strikes the
US government might need some perfectly printed money herself and
under such conditions the FED cannot sell another batch of
So now the FED has taken over the role of the
US taxpayer via buying government debt, she thinks she is
'independent'? That is funny for sure...;)
March 30 (Bloomberg) -- At 4:30 p.m. on March 23, on a day dominated by release of the Obama administration’s plan to save the banking system and the fourth-best day in postwar Wall Street history, the U.S. Treasury and Federal Reserve released a one-page joint statement on the division of economic responsibilities between the two agencies.
Amid the flurry of news, the statement passed with little public attention; neither the New York Times nor Wall Street Journal printed articles about it the next day. The release said that while the Fed collaborates with other agencies to preserve financial stability, it alone is in charge of keeping consumer prices stable, its independence “critical.”
Comment: Now with all the shit already inside
the balances of the FED, stuff like car loans and student loans,
we are supposed to believe the FED is 'independent'?
Beside CBS (car backed securities) there will also be more AAA
rated US government debt while in the past this kind of debt was
pumped to the primary dealers?
Please get real,
put the money press on and don't hide any longer...
(29 March 2009) Two items:
Item 1) A new world reserve currency?
Item 2) Fun with the new Public-Private Investment Program (PPIP).
Item 1) A new world reserve
Ok, regular readers of this website might
have noticed that lately I do not have the highest of esteem for
China because they keep on buying US debt.
Today I would like to give a compliment to Zhou Xiaochuan
(the governor of the people's Bank of China).
Before we zoom in on the details emerging
from China lets take a look at what I want for a number of years:
Given the observation
that the labor force of humanity is the true gold pot,
currencies should be backed by labor. So countries or
currencies (like the Euro) can enter a union as some kind
of insurance against eroding the local currency too much.
To some extreme you could introduce the 'standard unity
coin' and that is the value of one hour of unskilled
labor. Inside the unity this coin buys you the same amount
of bread or vital things to live upon, for example one
kilo of bread or grains.
So if someone in China mails the standard unity coin to
someone in my own country, the Chinese coin could be used
to buy the necessities of life.
For luxury items no such 'equality' in price is needed.
If a country faces economical havoc,
let it be natural disaster, civil war or nice bankers,
their currency value would have a rigid bottom.
If for example Zimbabwe would have
been a member of such a union, they would think twice
before doing all kinds of weird stuff because if you get
spit out of the union genocide and other forms of mass
killing will rule the day.
I have not looked at the present proposals in
much deep, but why Zhou Xiaochuan deserves a big compliment is
easy: He wants to include the Special Drawing Rights of the IMF...;)
Beside a lot of currencies in their present
form, also include the Drawing Rights...
Why did I not think on that? I am scratching
my head and the answer is that I consider the IMF folks as a bunch
of non performers living inside weird economical models that will
not stand the test of time.
The economist John Keynes also thought out
some international currency a long time ago (source),
The bancor was an international currency that was proposed by John Maynard Keynes, as leader of the British delegation and chairman of the World Bank commission, in the negotiations that established the Bretton Woods system, but was never implemented.
It was to be initially fixed in terms of 30 commodities, of which one would be gold. It would stabilise the average prices of commodities, and with them the international medium of exchange and a store of value.
Comment: This is also very charming and
inside my 'labor standard' this also plays a role: countries with
large amounts of commodities will have a higher value of the local
currency. And for example countries like Japan where they like to
labor 12 hours a day also fits in nicely: the lack of commodities
drives down the value of the local currency.
The last word isn't spoken on this, most
countries understand there is not much benefit in the USA 'boom
and bust' theories and long term stable prices bring much more
economical growth in the long run.
I only hope the next world 'reserve currency'
is not my local currency the €...
Item 2) Fun with the new Public-Private Investment Program
Both Barry and Willem have something to say
on the latest robbery of the US tax payer, the latest alphabet
soup is PPIP (pee pee I pee).
For me, since I want to destroy the funding
of the US military, this pee pee program is a 'high quality
program'. Now there are some who do not agree with me and these
can be found at:
1) Barry's hangout: On Barry's hangout a guy
named David Kotok says this new 1+ trillion plan is a bad idea.
I cannot comment very much on this kind of
content, we observe all kinds of 'expectation calculations' from
the scientific field of statistics.
In order to make sure 'future expectations'
always need to be looked upon carefully, I would like to bring
forward that old old envelope problem once more:
The old envelope problem:
You are into the final of a television quiz, millions
are watching while you are nervous and try to win the big
prize of the evening.
The end game is very simple:
You can choose between two envelopes, or boxes or
All you know is that the one box, or envelope, contains
twice or half the amount of the other.
Your game host invites you to choose one of the
envelopes, you select one and the host opens it and wow
wow wow there is a full 10 thousand of local currency in
In order to make it more exiting
for the local public, the game host asks you if you want
to take the other envelope instead of your 10 thousand in
Since you are not stupid, you know the rules of the
game, you observe that under the rules the other envelope
must contain 5 thousand or 20 thousand of the local
On average the other envelope will contain (5 + 20)/2 =
12.50 thousand of the local currency...
Since this is higher compared to the present offer of
10 thousand you decide to choose the other envelope...
After all it's expected payouts are 12.50
One week later, since you won the final in the previous
show, you are allowed to play in the show again.
This time you have done your homework and now you know
that if you make it to the finals and can choose from
those two envelopes again, it doesn't matter how much is
If the first envelope contains X the other must
have 0.5X or 2X so on average it will contain 1.25X.
miracle you make it to the finals again and you can choose
an envelope, this time you don't open it and when the
show master asks you if you want to change you change to
the other envelope.
You look in the second envelope, it
contains 800 Frutzbies (that's the local currency over
there). So you know the first envelope has to have 1000
Frutzbies (on average) and you decide to swap again...
It might have occurred to
you there is a little problem here:
No matter what you choose and no matter what is inside the
envelope, you will always change for the other.
When you change 10 times before opening the envelope, you
will also 'calculate' the other envelope will have more
What exactly is the flaw here?
So far the funny gambling with the 'pee pee I
pee' rescue fund, till updates.
(26 March 2009) Finally after about 12 trading days the DOW
clocked in about 20% of gain in the latest sucker rally.
I lacked the time for it but it would be
funny to collect a lot of quotes from so called 'chief analysts'
from investment houses explaining why this is not a sucker rally.
Can anyone explain to me why the correlation
between declining house values and S&P earnings suddenly has
broken? I have seen zero serious analysis of this & so the
down path as in the next picture is still the prevailing
scenario. This is regardless of what pipe dreams they have
at CNN or CNBC:
Barry reported lately that the speed in
housing decline prices has bottomed out, he said something like
'the second derivate is zero' and although I haven't checked the
details for myself we can argue we are now in the second leg of
house price decline.
US house prices started to decline in mid
2006, lets say the length of the first leg was 2.5 years. If my
logistic model prevails, the second leg will also be 2.5 years
implicating USA median house prices will bottom out at the end of
Very often I have stated the next (but for
some reason I still do not understand the Americans are to stupid
to understand it):
The second leg will bring far worse economical conditions compared
to the first leg of house price decline.
Why the Americans simply are too stupid to understand this is
unknown to me; all I perfectly understand is that the Americans
think they are 'too smart' to understand
And I lost the link but it seems the market
for toxic US bank assets is not entirely dead: Banks like Citibank
use the bailout money to buy toxic debt at above market prices. I
am sorry I lost the link, but I had great fun because stuff like
that falls within my 'logistic model' of falling house
Till updates, have a nice crisis or try to
(25 March 2009) Today the US stock markets rallied on the news
that new home sales were at the second worst level since my year
of birth 1963.
To be honest I felt a pity for these poor stock traders and I
wondered: How must it be to work in an environment you do not
understand at all?
It has to be remarked that a lot of main stream media contribute
to these nonsense rallies too; for example on CNN they have
something called 'The path to recovery' and even local business
channels like the Dutch RTL7 dream about bottoming out.
This all is one big pile of rubbish; I will
explain that in item number one:
Item 1) The black hole theory on debt from
Item 2) Can the FED fight deflation via buying government
Item 1) The black hole
theory on debt from Reinko Venema.
We start with the observation that in healthy
economies the price of money, or the interest rates, are often in
the 5% range. It is well known the USA economy has over 350% of
the local GDP of debt on herself.
Lets assume the average interest rate is 5%,
in that case there would be about 17.5% of GDP needed just for
interest obligations only (5% of 350 = 17.5%).
If a country routinely pays the interest with
only more (internal or external) debt, debt levels will rise until
the 'black hole limit' is passed. This limit is the maximum % of
GDP that can be used for paying the interest.
You really need only 3 or 4 brain cells to
observe the USA does not pay 17.5% of her GDP for debt related
costs only. That is not 'The American way' of the refi...
If the USA would be a healthy economy having
interest rates at 5% or so, in that case they would go bankrupt as
a nation on a relatively short notice.
Hence they find wisdom in lowering the rates
because otherwise the nation would go bankrupt. They will think it
is wise policy to print money because otherwise the nation would
In the meantime debt levels only rise and the
black hole increases in size.
Definition of a black hole: Total
debt + printed money levels.
The process simply continues until the nation
The stuff feeds on itself: If printed money is used to lower the
rates, debt to income ratio's will rise. If there is more debt
more printed money is needed to service the interest obligation if
there would be some return to a healthy economy again...
Finally after a lot of of years the debt
huggers will understand you must never hug your own economy to
death. It is all pretty simple: Can the USA pay 17.5% of her GDP
or will she do other things?
Item 2) Can the FED fight
deflation via buying government debt?
In the USA they are pretty crazy; on the one
hand they think that deflation is a bad thing but on the other
hand increase in labor productivity is a good thing.
After my humble opinion increases
in labor productivity = deflation in prices.
So not in the USA, over there they like 'boom
and bust' theories much more and now they have a little of 'bust'
they complain prices are declining.
Therefore the Federal Reserve comes to the
rescue and plans are that they will buy about 300 billion US$ of
long term government bonds via printing money.
This is something like just below 5% of
public outstanding debt; just 5% of public outstanding debt is now
replaced by printed money.
The FED does this to fight deflation and we
the public are constantly told that later when inflation gets a
problem, the FED simply sells these AAA rated assets
If the FED buys 300 billion in outstanding
taxpayer debt, there are some who will make a big profit from
If later the FED sells these wonderful
assets, the buyers will likely not match the sellers.
Can anyone explain to me why the later
selling will tame inflation? If in these future years no one wants
to buy that crap, how can you tame future inflation?
Ok ok, at the end of the update I simply have
to make a fool of that Nobel prize winner named Paul Krugman. He
has the mental stuff to understand the above black hole but he
will never say so in public... Here are Krugman's stupid words on
printed money, vid link (look at 08.38 for the Paul crap):
Item 1) What the vuk happened to & on the
Item 2) Some podcast links on evolutionary game theory & Bayes
Item 1) What the vuk
happened to & on the H3 release???
Somewhere last year I observed in the US
Federal Reserve H3 release that 'non borrowed reserves' were
climbing and stupid as I was I only thought that the money lending
program was going to an end.
The 'non borrowed reserves' are important
because they represent the real reserves in the total US banking
system and since they were negative by a few hundred billions you
could argue there might be a tiny bit of insolvency in the banking
In case you have never seen that file (look
in the non borrowed column for the real reserves):
At the end of 2008 there was about 900
billion US$ outstanding, of course this is not tax payer money but
'printed money' or 'created money' (source).
As you could see for yourself in the H3
release, there are very strange things going on. In the press
releases it was nowhere to be found what the vuk was going in
relation to the real reserves of the commercial banks.
Let me make a simple to understand table with
the non understandable stuff:
behavior of non borrowed reserves (FED source)
Total non borrowed
(In millions of US bucks.)
End of Oct 2008
End of Nov 2008
Jan 14 2009
March 11 2009
You see the real reserves of the combined US
commercial banks swing from over minus 300 billion to over plus
300 billion on Jan 14 2009. And now it stands at 49 billion again
(a number nicely in line with the reports of lets say the last
You can argue that this wild swing of almost
700 billion must be related to one of the other bank rescue
programs, but what program injects almost 700 billion US$ of
printed money into the non borrowed reserves?
Remark that when the government buys
preferred stock to improve the reserves or tier one ratio's, this
only affects the borrowed reserves!
I have to admit: I do not have a
And it is strange no press releases can be
found, may be I have to dig deeper on this detail but for the time
being I have no clue what kind of (accountancy) tricks were are
Also very interesting: The first column named
'total' stands at 678689 million, that is about 15 times compared
to non crisis times. And that is only an 'excess' of 621 billion
compared to the 57 billion that are 'required reserves'.
Total is now 678689 / 1535273 = 44% of the
monetary base where this used to be in the order of lets say 5%.
A last link in this item; a graph named BOGNONBR, Non-Borrowed Reserves of Depository Institutions.
Like I said before: Printed money is the best
kind of money, why do such weird stuff as collecting
taxes from a hard working population when you can simply
print it and only have the 'costs of printing' compared to the
damage taxes do?
Item 2) Some podcast links
on evolutionary game theory & Bayes rule.
The next link contains 23 video's of game
theory, I have only seen lecture 23 so I cannot judge if the other
22 lectures are important or interesting.
Game theory is of relative important because
the Pentagon uses basic game theory in her war games. Never
forget: The first step towards victory in war is understanding
your enemy. If you neglect this basic rule, you can never win a
Two of these entries are about Bayes theorem:
what happens if you have additional information? How does this
affect the probability that certain events have occurred?
Bayes theorem is very easy to understand,
Suppose behind a screen I throw one cube of
dice and I tell you: the outcome is an even number. In that case
you can eliminate the numbers 1, 3 and 5 since they are odd.
And with the new information you know that the event that a 4 has
popped up is now one third.
That's it for today, till updates & have
a nice crisis or try to get one & don't forget to kill,
wound, damage or hinder that American slime!!!
(23 March 2009) A lazy two items today.
Item 1) That weird Tim Geithner plan will
Item 2) More on biological traits versus successful traders.
Item 1) That weird Tim
Geithner plan will never work.
Today the DOW is rallying about 5% on good
news like the new US Treasury plan to buy toxic assets from the
bank and some idiot 'good housing news'.
Today's market reaction proofs that a lot of
Wall Street investors have the wrong job; they should apply for a
job at the AIG derivatives desk...
The poor bastards think that only 500 to at most 1000 billion US$
will bring any kind of significant change in the balances of the
commercial banks. After my humble opinion they need at least such
an amount every year just to stabilize the toxic debt levels.
In case you need a good laugh, the idiots
from CNBC strike again:
All in all it is very easy to understand why
this will not work:
In the USA you have plenty of hedge funds
(and also desks at banks) that specialize in so called distressed
debt. If these folks don't buy the toxic assets this only means
the prizes for toxic assets are still far too high.
The banks also don't buy it from each other, another clear
indication it is still valued far too high.
We also had 'positive housing news', as usual
it was some month-to-month climb, let it be prices or sold
volumes; that is all indifferent. (You must monthly numbers always
compare to those of one year ago because housing has large
As Barry writes, (source)
Home prices dropped 15% from the same period one year ago; Despite the price drop, sales fell 4.6%. How anyone can try to spin this as a positive is beyond my mathematical comprehension.
Comment: I have nothing to add to that.
A last link: The idiots from CNBC have some
interview with the Geithner idiot, please look at the video and
observe the CNBC slime ask zero serious questions like:
But Mr. Secretary, every one
can see one trillion is by far not enough. Can you explain why
this would be enough?
Of course at CNBC they almost never ask
serious questions, here is the
Item 2) More on biological
traits versus successful traders.
At the UK university Cambridge they have a
In the middle part you hear Dr. John Coates
on some nice research on hormone levels in stock traders.
In short it goes like this:
When stocks rise over longer periods of time,
testosterone levels in stock traders climb and climb. When stocks
decline cortisone levels start to rise.
Remark: This seems to be for the average
trader, since we last observed that my ring finger is longer
compared to the index finger the Media files say I belong to some
kind of class that makes better decision faster.
Of course it is nice to know I belong to the
new Herrenvolk, but there is a small yet significant contradiction
in the findings until now:
1) People with a relatively long ring finger
are more sensitive to testosterone.
2) High levels of testosterone leads to reckless behavior.
3) People with a relatively long ring finger are on average better
So how can you be a better trader (or platoon
commander or a general) if you are more sensitive to stuff that
invites reckless behavior?
Dr. John Coates did not mention it, but we
are 'pre baked' in testosterone...
The findings of Dr. John Coates make a lot of
sense; just two examples from my own boring life:
Example 1) Every time I have a true near
death experience, let it be a bullet just a few centimeters from
your head or a near dead traffic situation, the rest of that day I
am so relaxed and so tranquil I can finally master that extra
difficult math theorem.
Example 2) In the years 2001 - 2003 I
executed the dream project (on skeelers over the highways
surrounding Groningen). My family members were mad at me when I
told them so I had to hide it.
Here is the old dreamweb
to validate my words.
You know: Most people get scared to hell when they need to skeeler
in 70 km/h traffic, I like it, to be true: I like it still a lot but
my left knee is now too weak for this.
Lets end this update with a funny note:
Research proposal for Dr. John Coates:
Beside looking at ring/index finger ratio's,
you can also look at the testicle size.
Without photographic proof; mine are almost six centimeters
(Oops: Aren't male balls the main production
center of testosterone??? Yeah yeah my dear Pentagon perfumed
princes: Only a man with real balls can understand your defeat in
the zero-one project. You cannot understand so hence: the entire
Pentagon is without any real balls. That's a fact of life my dear
(21 March 2009) Risk taking behavior versus biological
You can easily write ten books on that
detail; why do animal species like or avoid risk and within some
animal species; why do some individuals take much more risk
compared to others?
Why do lots of human risk seekers end at best
in the footnotes of history while others taking up far bigger
amounts of risk simply thrive and look forward to another day of
According to a Barry 'food for thought'
it is something from before your birth. It
seems that when before you were born and you were exposed to
relatively high levels of the hormone known as testosterone, your
appetite upon risk is different... Lets quote a bit from the above
“Traders are succeeding not so much because they are rational, but because they have certain biological traits, including confidence, an appetite for risk, search persistence, and speed of reactions,” all of which are derived from prenatal exposure to testosterone.”
-John Coates, University of Cambridge neuroscientist and former trader.
Comment: Testosterone is the 'fighting
hormone' in many ways and may be it is true that you can produce
better fighters if you expose embryo's to a higher level of this
stuff. The embryo 'needs to fight' but cannot leave the womb so
later in life higher risk is also bound to feelings of safety.
Now what has this all to do with the length
of your ring finger?
In the picture below I made a photo of my
right hand, as you see on inspection my ring finger is about one
nail longer compared to my index finger:
“Coates examined the digit ratio of 44 male “high frequency” traders in London who buy and sell securities, sometimes in amounts greater than $1 billion, but hold their positions for minutes, sometimes only seconds. He found that traders with a longer ring finger than index finger made more money.
“We were on the trading floor taking samples for another experiment, and I read an article about digit ratio and sports,” says Coates. “I didn’t put too much stock in the measure, but we thought, ‘Why not look at fingers?’ We were shocked by the results.”
Comment: Of course in sports you will find
similar results; guys like me we use risk as food. Where all you
folks bounce back we, masters of the universe, take a bite &
we love the taste.
Let me give you only two examples:
Example 1) I started the
NightmareOnWallStreet for a second activation on 12 Nov
2007. Just a few weeks after the DOW hit her top I told this
chick she would be cut in half to 7000. After my humble
opinion we have gone below the 7000 mark just lately & where
is the risk to my personal safety?
There was zero risk to me...
I told you: we like risk, we use this as food!
Example 2) The zero-one project ensured the
record killing of US soldiers inside Iraq for over one 100 days.
The zero-one project is very easy to understand: On the 'one' days
Iraqis were expected to kill above average in US military slime
while on the 'zero days' it was supposed to be less than average.
If you add it all up and use for example a 'two way independent
T-test' you arrive in the end at significance thresholds of 1:400,
far exceeding the 1:20 or alpha = 5% as is used in common day
Was there any risk to my personal safety?
No, most US military men have a short ring finger and they just
'do not understand'.
Lets look into another source file (source),
“At first blush, these findings seem fanciful,” Romeo says. “The stronger point, however, is that digit ratio predicts an individual’s hormonal history and hormonal changes as they get older. Hormones can indeed affect behavior, and sometimes quite substantially.”
Comment: No comment, but if you can help me
with my hobby of destroying the military might of the USA; you are
a very welcome reader...
I cannot break all the US military metal with my own bare hands;
but together we can kill the beast. Are you in or are you
(19 March 2009) We had a lot of interesting news
today, what to comment upon?
Since I asked so called 'international
terrorism' only two day ago to blast five car bombs inside this
country that carries NATO political leadership in case I was
arrested once more, and given the fact we had a new Osama bin
Laden message out, do I need to comment upon that?
It is very tempting, but I know nothing about Somalia so I won't
Today the €/$ pair shot up something in the
order of 7 cents in just about 30 hours. That is history in the
writing because finally international investors understand that
all the USA has left is the money printing press. (It is also a
good good lesson for the fucking Chinese that never ever bought
cheap credit default swaps while they were cheap, oh oh you
fucking Chinese you will get a nice lesson in the future & you
fuckheads deserve this lesson very much!)
Very tempting, but not for today...
Today is about a show
trial in a very pure form.
What is the case?
Today the so called 'monster of Anstetten'
had his final in Austria, the guy locked up his daughter for a few
decades in a cellar, raped her about 3000 times, fathered seven
children with her and so on and so on.
The courthouse trial was done in only 3 days
and only two witnesses were heard. Some observes say this is a
'very fast' trial because when you bind down 24 years of rape to
only 3 days of trial you are 'very fast'.
To my surprise: The guy
had a lawyer!
(Needless to say; the details of the Fritzl
are easy to understand and there is only little need to spin this
out over a multiple of years.)
My dear reader; Was the Fritzl courthouse
trial a show trial yes or no?
Make up your own mind.
My dear reader, a few years back I found
wisdom in smashing some windows at the local courthouse. Costs
were about 10 thousand € in smashed windows (bulletproof or not,
all windows were equal under my smashing law).
For the police idiots there was not much
honor because I walked to them and simply stated 'I did this and
my axe in in my right pocket'.
I was arrested and for a day or five I was
able to observe how these idiots treat arrested folks like
Anyway to make a long story short: I also got
a 'lawyer', I obliged to all the stuff he needed but I never heard
from that idiot again.
After that 'showtime came' and I had my day
in court when it came to smashing in 10 thousand of € inside
that same courthouse.
I remember very sharp the minutes before; I
met an acquaintance about 10 minutes before the start of the
trial. I looked around and did see my own appointed but fucking
lawyer standing about ten to twelve meters away looking at me.
(Very likely he cashed in the money for his
Trial started, but I had no
fucking lawyer to help me.
Trial ended at most 10 to 15 minutes later,
of course the judge did not ask 'Where is your lawyer'. So in fact
this was only a show trial in the
deepest of it's meanings...
Lets leave it with that, I only hope that in
a future arrest by these idiots we will see some car bombs loaded
with high explosives explode.
My dear reader you can choose for yourself:
Fritzl had a show trial but strangely had
a lawyer, compared to
Reinko had a show trial without
In the meantime I understand you think it is
strange to compare yourself to this Fritzl rapist; but why does he
get a lawyer while my lawyer draws back???
No no no, Lets hope in a future arrest we
will have more fireworks or at least five car bombs.
End of the update, till
(18 March 2009) Not very often both the Wall
Street traders and me agree:
It is good news when the US Federal Reserve
will buy 300 billion in US Treasuries (government bonds).
The FED will buy more crap beside US Treasuries
and at the end it will total in 1.25 trillion US$ in accumulated
Why Wall Street thinks this is a good idea is unknown to me, but
the Wall Street ways of thinking are only known to the Almighty
and may be a few people with the DOWn syndrome.
I think it is lovely news because the FED buying government bonds
is one of the most pure forms of printing money; do you really
think the 1.25 trillion of collected garbage is paid by taxpayer
Please get real; the 300 billion is already debt that has to be
paid by (future) taxpayers and now this debt is bought with
Again; why Wall Street considers this good news beats me...
Fed purchases should boost Treasury prices and drive down their rates. That would ripple through and lower rates on other kinds of debt. The last time the Fed set out to influence long-term interest rates was during the 1960s.
The Fed also said it will buy more mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac to help that battered market. The central bank will buy an additional $750 billion, bringing its total purchases of these securities to $1.25 trillion. It also will boost its purchase of Fannie and Freddie debt to $200 billion.
"This is not only going to keep mortgage rates low for a long period of time," said Greg McBride, a senior financial analyst at Bankrate.com. "The mere announcement may produce a honeymoon effect and bring mortgage rates down to even lower levels in the coming days."
In addition, the Fed said a $1 trillion program to jump-start consumer and small business lending could be expanded to include other financial assets.
Comment: Aren't the quoted words lovely
words? Any idiot with only high school in economics knows that
printing money will not work. And on a more advanced level we
observe printed money at almost 10% of the total US economical
output, almost 10% of that fake GDP...
Just like with the first TARP round of only 750 billion US$ (the
same day the news came out I declared: The first TARP is the
cheapest), now I can say:
buying round of US Treasuries with printed money is the cheapest.
The fucking Chinese should use this as a
method of getting rid of their US government bonds but as usual
China will play the financial whore she is...
By the way China; how is your trade surplus doing?
The fucking Chinese will get what they
We are nearing the end of this update, a few
That's it for today; if you can kill a few
more Americans and you think that's important please do not
hesitate! After all they are a big pest on humanity...:(
Till updates, have a nice life or try to get
(15 March 2009) Yesterday the last components of
the new computer were bought and screwed in the casing.
Today it was time to plug the power in and
see how she reacts on 220 volts of alternating potential currency
It was bad, it seemed that the front panel
USB sucks up so much power that the machine cannot boot. So for
the time being: bye bye front panel USB.
Another problem was far harder to solve: An
old hard disk could not be installed, it is so bad that the
machine won't boot up when it is attached. When I use a similar
hard disk there is no problem.
This hard disk problem is a 'fucking weird'
problem because, as memory serves correctly, this is exactly what
I wanted in case that particular hard disk was stolen or so. Tiny
problem: I don't know of any kind of software that binds old hard
disks to the original configuration, let alone I used that kind of
This problem is a big blind spot until now; I have to test this
hard disk in other computers before I can say: Two years of family
photo's are gone, just like about 1200 music and a large array of
computer programs that I did not back up elsewhere...
As usual the Windows XP crack did it's
perfect job and beside the problems there are also huge benefits
from a new and faster computer: within one second radio music can
pop up (ok that is with the media player from Microsoft, it is
always advised to use non Microsoft related alternatives if they
are there because that always gives less hinder from viruses &
the likes like spying programs...)
Enough of the computer stuff: I found two
links related to math that drove me crazy.
For most of my scientific life I simply hang on to the
proposition: If the math isn't there, just create it yourself!
I did not do much calculations and I only ponder the next
Why the fuck
did I not find this myself?????
You know there are days this 45 year old just
feels so stupid...
Why the fuck did I never find this math on my own?
Look at the end of both files to understand
why I am mad at myself:
I might have some problems with the basics of
string theory and be mad at myself when I found out the spherical
cap was not discovered by moi, me, myself & I. But this Cheney
idiot pretending he has a comprehensive worldview turns my stomach
Yet the Americans vote for guys like that so
kill kill kill the Americans until as a nation they have grown
older and wiser.
Kill kill kill, that is the only dialogue
folks like Cheney understand.
At last a stock market prediction:
Since in the last week (that was the best
week since Nov last year) the US stock markets decided to rally
about 8%, it is logical anther 10% more will follow this week.
After all a sucker rally only attracts sucker
investors, so 10% at least my dear suckers!
(12 March 2009, temporary update) Oh oh these
poor billionaires; the number of billionaires shrank about 30%
last year. Combined wealth shrunk from 4.4 trillion to 2.4
Contrary to the 1000 richest people on the planet, there are
almost no statistics on the 1000 most poor people on the planet
but all in all:
It looks like wealth distribution gets less
skewed & that's a good thing in many ways.
A wrong kind of wealth distribution inside an
economy will always be a destructive force to that economy; if the
wealth distribution gets too skewed (in favor of the elite) you
will only end in some kind of dictatorship with a few rich folks
calling all the shots to stabilize that particular kind of
economy. As usual the US economists skipped that detail and that
is only more proof of the level of corruption inside the
By the way (source)
the USA New York major Bloomberg did see his net value rise in the
last year from 11.5 to 16 billion US$. Again (as often observed in
the past) this Bloomberg guy is somebody to be reckoned with, I
remember I was very pleased when it came out he would not run for
US Presidency (that was a wise decision, Bloomberg is too ugly
looking to make it as a US Prez in this television
It is high time we go to the two items of
Item 1) Inflation or deflation, I let Gary
Shilling do the talking.
Item 2) US economist Menzie Chinn was faster than me...:(
Item 1) Inflation or
deflation, I let Gary Shilling do the talking.
Ok many months ago I constantly lambasted the
European Central Bank for not raising interest rates fast enough.
In those long lost months just a few hedge fund could join forces
and for example choke a market like the global wheat market.
In those long lost months it was easy for all
that fake capital to hijack important parts of the real economy, a
lot of global metal markets were only some average Nasdaq listing.
After a long wait finally the ECB raised with
25 basis points; at present day you still have these guys at CNBC
stating this was the proof that the ECB was 'behind the
My advice to those guys they parade on CNBC:
Please eat your used toilet paper every day after you did your
shitting in your family home or wherever you do your daily
The ECB coughed up the concept of
'disinflation' and indeed it is a charming concept: when far too
high oil prices dive we have lower consumer prices for all oil
related products but this is no proof of deflation. I agree.
Yet with all this new techno around like
computing power, advances in gen techno and so on I still hope for
a few decades of moderate deflation.
Let me give you (very non scientific) an
example of today in my own shopping list:
Today I bought a 320 Giga hard disk for 50
€, about 2 or 3 years back I bought a 120 Giga thing for 65 or
70 €. The public considers this to be 'rather normal' and nobody
thinks this is a big threat to the economy.
I think Central Bankers need to give up the
theory that 'moderate inflation' is the thing that rules and state
more often that 'moderate deflation' is simply the way economies
worked for a long long time.
After having preached so much, let Gary do
Item 2) US economist Menzie
Chinn was faster than me...:(
This item is hard for me; at some point in
time I discovered that US family house prices would decline about
50% from their top. This day I found out Menzie was at least 3 to
5 weeks faster and from the standard 'male competition feelings' I
think I do not like this very much...:(
Ok Menzie; I admit defeat.
We can talk long and short of this; we can
observe Menzie is a professional economist and as such has access
to sources I can only dream about.
Lets keep this short: Menzie was before
me in discovering US house prices will decline about 50%
(that is something in the order of 10 trillion US$ wiped out
housing value). So I have to give my congratulations for his
Update: Yes, it actually works (on my browser
And the funny thing is: Bandwidth goes to yahoo...;)
I hope you can see the video too; have you ever seen a bigger
This guy is so stupid, why does FOX news invite idiots? That is
because they can see eye to eye with idiots like that!
(10 March 2009) Only one item today:
Item 1) The 5.80% DOW rally
today bringing DOW to 6926 index points.
I have to admit the Americans come back in a
strong way; a staggering 5.80% increase and before you know it DOW
will be above 7000 again.
So why did the US stock markets rally so much
Everybody says it is that Vikram Pandit’s memo (from Citigroup)
so why not take a look at it?
On the Financial Times they have the entire
memo text (I usually never link to the FT because after just a few
days everything disappears behind the big subscription wall).
In addition to our strong capital position, I am most encouraged with the strength of our business so far in 2009. In fact, we are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007. In January and February alone, our revenues
excluding externally disclosed marks were $19 billion. Our client businesses are strong: our deposits are relatively stable, our client-driven Securities and Banking businesses have been performing well, including our recent #1 rank in M&A, and we continue to provide credit to consumer and corporate customers. You have all done a very impressive job driving revenues and reducing our cost structure, and it is gratifying to see the results first hand.
Comment: It was the 19 billion US$ revenue
remark over Jan & Feb that got the whole thing started but
nobody explains what exactly 'externally disclosed marks' are.
I don't have a clue either, it sounds a bit like 'non observable
inputs' that are used to value the Level 3 assets...
Lets wait until the 2009 Q1 profits come out.
In the meantime Citi shares jumped over 30% to 1.42 US$ but that
is still below their ATM cash withdrawal costs of 1.50 US$ /
So if you charge 1.50 dollar for every transaction, it is not very
hard to arrive at 19 billion in profits without evil externally
Intermezzo: Funny! Lets compare European and
USA banking costs for clients!
I have an account at state bank ABN Amro, it
costs 3.75 € a Quarter or 15 € a year.
What do I get for that?
1) A worldwide bank pass.
2) At most 3 ATM withdrawals a day.
3) An unlimited number of pays in shops.
4) Only 1 time a month an oversight via the post.
5) A free internet account for payments comes with my bank
If you compare this to the USA ATM fees you
observe banking in the USA is just like
their health care system; far to expensive and zero bang
for your buck...
End of the intermezzo.
Barry thinks we have another sucker rally
coming up; Tech Ticker video:
It is of importance to notice the video was
posted on Mar 10, 2009 08:35am EDT so that was before the stupid
5.80% DOW climb of today.
Barry also said combined S&P 500 profits
were negative in the last Quarter and I, Reinko, can inform you
that you "ain't seen anything yet" now we are only in
the beginning of the second leg in house decline...
So if there is a fresh new sucker rally
bringing the DOW above 7000 yes or no, I do not care. Future DOW
and S&P values will be dictated by the earnings the companies
show, if some suckers want to rally let them do it.
Yes, why not? It will bring only more value
to my 12 Nov 2007 prediction the DOW would go to 7000. So suckers:
Show what you have got!
(Ok, there is a small update in the new
computer stuff, link: The
Rendering Equation, simple stuff is often the good stuff...)
Till updates, have a nice crisis or try to get one.
(09 March 2009) Lazy as I am, only two new items..:
Item 1) Progression of the new computer.
Item 2) A few links related to yesterdays post.
Item 1) Progression of the
Today I screwed most of it together and
suddenly I had a big fucking problem: How to connect the DVD
players & writers with the motherboard?
It turns out all my DVD players & writers
are from the wrong type, to make matters worse the video card is
Not all of this damage is for real; new RAM
memory was simply unavoidable and a video card not coming from pre
history times was promised to the kids so for the time being my
'stupidity range' on this detail is about at most 70 €.
In the meantime I just cannot wait to put the
DVD with chipset support into the thing and the motherboard
booklet promises me things like flushing the BIOS...
Now who does not want to flush a
Item 2) A few links related
to yesterdays post.
Ok, yesterday at the end of item 2) I linked
to a video that said there was about 11 trillion US$ lost in stock
Barry was as friendly to cough up the next
This is based on the Dow Jones Wilshire 5000 index, which includes nearly every U.S.-listed stock. Losses since the start of 2009 are $2.6 trillion. Nearly half of all stocks in the index are now trading at less than $5, and 37% are under $3.
Comment: Don't forget this is only stock
damage, large parts of Western economies are not listed on a stock
bourse so we can easily add a few trillions to the reported
11trillion US$ damage...
Before we proceed I have to repost the lovely
graphic from yesterday once more:
This graphic is such a beauty; all these last
decades we had those debt hugging economists telling us crap upon
debt levels. Savings were not needed because 'the economy is still
expanding these years' and shit like that.
In nature things that survive in the long
run, these things have spare parts like two lungs or two kidneys.
In the US financial system where the debt huggers rule, when you
take their theories to the limit, one cent paid too late for just
one second could (in theory) destroy the entire
For me it is amazing to observe the new US
government actually believing more debt will save them from
destruction, this axiom is weird.
New debt only helps when you can
proof it will bring more profits
in the future, no such proof has been observed in the last 16
Lets close this update with the next link (it
is a guest writer on naked capitalism):
Lets leave it with that, DOW closed at 6547
today and may be DOW values today are only a way of learning
elementary economics to fatbag Americans...
Have a nice life or try to get one!
(08 March 2009) Lazy lazy lazy, only two items:
Item 1) Progression of the new main computer.
Item 2) Future evolution of the US stock markets.
Item 1) Progression of the
new main computer.
My old computer lasted for an amazing 8 years
and I have to admit it was often difficult in the last year to
keep the thing alive.
Let me spare you all the details but in the
end when you needed to use her you switched the power on. After
that you waited at least 15 minutes until the flickering of the
After that you put it out, wait for 15 seconds.
You put it on again and after about one minute you push
After that very often (but not always) you
arrived at the BIOS (the binary input output system), you set the
BIOS in a workable thing and voila: it worked just another day.
Who needs password protection with a computer
For the new computer I have a casing, a new
motherboard and a new processor.
I found out I also need new RAM (random
access memory) and even a new power system (something known as ATX,
that is an unexpected drawback of 25 € but you won't hear me
complain: If we the public demand Moore's law to be fulfilled,
that means double speed on anything every few years, in that case
I cannot complain when basic stuff like power supply changes).
I also found out I need some lubrication to
transfer the heat from the processor to the heat fan, that detail
is very important in order to have
the new computer still alive in 8 years or lets say
So far this boring item.
Item 2) Future evolution of
the US stock markets.
Lets first summarize the past:
US stock markets peaked in Oct 2007 and since
I was fully aware of a 50% withdrawal from that peak, I started
the Nightmare files on 12 Nov 2007. Link:
And from that very moment I informed you
folks of a future 7000 mark on the DOW.
For me it was a hard thing to do: If DOW
would not go to 7000 then forever local authorities would be
unwilling to investigate a bit more deeper in the 9/11 stuff from
2001. Or the Madrid bombings in the Spanish election and what
about the London bombings?
Always, with a big smile on their faces, I
tell rubbish that cannot be understood by 'normal persons'.
Luckily these years most of those 'normal
persons' also have a pension deficit...;)
Let the past be the past and enjoy the next
graphic from the present (it compares a broad stock value measure
like the S&P from now with the depression one).
My dear reader, in the 1930's depression
stocks dropped an amazing 85% from the top. Is it possible to get
even more value wiped out?
Yes, this is very much possible; for a large
part it depends on two pillars:
Pillar 1) The earnings of the 500 companies
listed in the S&P 500.
Pillar 2) The silly belief in the USA you can
borrow more to stay out of trouble.
If one of those two pillars fails, S&P
could bounce back before the 85% decline.
On pillar 2 it can be reported that US consumers have started
saving, wow wow wow the idiots save about 5% of disposable income.
Yet a serious saving of 5% of the entire gross domestic product is
needed to prevent a serious depression; the USA debt huggers will
not do that...
Lets end this update with a tech ticker video
where they say about 11 trillion US$ has been wiped away from the
(05 March 2009) Of course this is a week of celebration; the DOW
fell below the 7000 target as desired in the last 16 months. Yet
there are also cracks in the fun:
It is about one 100% sure that nothing will
be done for the Palestines in the next four years, so the Obama
honeymoon days are over and as usual there is the need for killing
Contrary to other anti American observers I
waited to see if there is some likelihood of change we can
On the television I observed the new US
Secretary of foreign stuff and she demanded the Hamas recognizing
Israel. She did not spell out the details but with 'recognition'
power slut Hillary likely thinks that all stolen land belongs to
Israel and when apartheid nation Israel does her routine bombings
the Palestinians have to say "Thank you for your wise
It is obvious: With her support of the apartheid
regime named Israel there is a strong need for killing more
USA fatbags and from the field of international diplomacy it would
be wise if normal democracies isolate the USA more and more from
Ok, the ramblings of power slut Hillary
Clinton were a negative for this week. That does not take away
there is fun on the stock markets.
Here is today's behavior of the
At the end of this update, let me hang out
the 'international diplomat' too (just like power slut Hillary
Now we, the international
community, have observed the USA is totally not committed to
bringing peace to the Middle East we have to reject the notion of
'change we can believe in'.
Before I, as an international
diplomat, can withdraw my advice of killing more Americans, the
Americans have to prove that the Iraqi war was only a 'non
commodity driven war' and was only for the official purposes of
bringing freedom to Iraq.
So in order to give some
value to that, the US government has to declare they will refrain
from Iraqi oil just like they refrain from Iranian oil.
It's as simple as it is my dear power slut
Hillary... It is as simple as it is.
Just like the USA will never refrain from Iraqi oil officially,
your stupid 'recognize Israel' words will only bring more filled
coffins at the scene.
If these are the wishes of the honorable
power slut Hillary Clinton, let it be.
Let it be.
(04 March 2009, temporary update) Testerdetest test test (I am
updating from a mobile device since my dear old old computer broke
down last Saturday; therefore you miss the updates since 26 Jan,
lets first test if this can upload...)
Yes, it works; I had to publish the entire
freaking website so thanks for the waiting!
Last Monday we had VICTORY
because within 16 months we had the DOW below 7000! That is over
50% decline, yeah yeah: VICTORY!!!
We have come a long way since I asked the
Iraqis back in Nov 2007 to stop fighting because this was not
needed anymore. The Iraqis did so, therefore:
In the meantime all the Americans were
capable of was explaining the lack of violence via their surge...
Oh oh, these poor creatures; they will always think they are the
center of the universe...
In other meantimes I am now building a
reserve computer and if all goes well this weekend I will build a
new main computer. So I will hang low in updates!
Have a nice crisis or try to get one!
(26 Jan 2009) Ok ok, lets place five items once more:
Item 1) My new shoes...
Item 2) Dutch bank ING thinks they are a winner.
Item 3) US house sales unexpected up?????
Item 4) US financial expert Ben Stein on air pollution.
Item 5) The empty item.
Item 1) My new shoes...
At the end of last Summer I bought my new
shoes for the next year, two pairs is enough: a pair of Winter
sandals and a pair of Summer sandals.
A few days ago after I tested the Winter
sandals with a two hour walk, they were perfect... No pain and you
can easily walk 40 or 50 kilometer on these perfect
So after the walk I hang behind the
television drinking a cup of coffee, the teenage daughter comes
walking in with her usual air of being a master of the universe
and she looks and looks:
"Daddy, what are
I explain to her that these are perfect
shoes, that beside the elderly females also the ladies and even
the sexy chicks look at me.
The daughter observes:
"Dad, it are not only
the sexy chicks that stare..."
Item 2) Dutch bank ING
thinks they are a winner.
The impending CEO at Dutch bank ING was for
the television today and stated "ING belongs to the
This weekend the Dutch ministry of finance
guaranteed up to 27 billion € in US mortgage backed securities
that ING has on her balances. It is that alt-A stuff: mortgages
that hang between the sub-prime and the prime mortgages.
The Dutch ministry of finance said the stuff
was 92% of face value, as an analyst from SNS securities observed:
that kind of stuff trades between 20 and 80% of face value.
It is important to know that these are
'mortgage backed securities' so it is unknown how the underlying
mortgages perform whatsoever. My first estimation is that in the
long run the Dutch taxpayers will loose at least 10 billion € on
this deal or about 625 € per capita Dutch citizen.
Needless to say: This was a very stupid
decision made by the Dutch minister of finance Wouter Bos.
In the face of such an avalanche of stupidity
at the Dutch ministry of finance, here is an old picture of US
finance once more:
Scroll down to 19 Dec for more of this, the
Dutch ministry of finance has to study how banks are related to
this triangle. Of course they will not do that, it might be a
ministry of finance but they too don't understand their own stuff.
Right now the television says that Wouter Bos
thinks that there is a 30% likelihood that Dutch taxpayers will
make a profit on Wouter 92% of face value deal...
It took some time but we now have solid proof Wouter does not
understand what is going on...
Item 3) US house sales
Every now and then there is 'positive news'
from the US housing front, these are always 'month to month' of
'unexpected positive news'.
But month to month prices and volumes of new
or second hand homes should always be compared to the same month a
This is needed because volumes and prices
sold have large seasonal components; month to month figures make
only sense when you compare them to month to month from a year
Item 4) US financial expert
Ben Stein on air pollution.
With head and shoulders above his peers Ben
Stein is one of the most dumb experts on economics and finance.
Today the new nigger US prez Obama signed some new laws upon air
pollution from cars.
This is what Ben Stein makes of it (source),
Let me be clear: I hate air pollution.
When I am in a traffic jam on the 10 Freeway in Los Angeles, with thousands of cars and trucks belching out carbon dioxide and carbon monoxide, I feel as if I'm being gassed by my fellow motorists -- and they probably feel the same way about me.
I am not entirely convinced that the burning of gasoline causes climate change, and there are smart people with good points on both sides of this issue. But I do assume that filling the atmosphere with CO and too much CO2 is not good for children and most other living things (although C02 is good for plants).
Comment: With the statement that too much CO2
is bad for children, just by accident, Ben Stein has placed a wise
Lets leave the idiot Ben Stein with that.
Item 5) The empty
Empty empty empty:
Use your own brain please!
In case it is not empty enough:
Even organizations like Amnesty International
pick up the call for the investigation of war crimes done by
Israel in the Gaza strip.
So I would like to repost the next picture
(only lately I observed on the television how these new shells
work on the ground):
Please remark that the whiners of Israel
never sighed the treaties that would make this a war crime. Life
is simple to understand; the Israelis are in the right when they
say this does not violate international law.
By the way; the German concentration camps
also were not a violation of international law. That is also a
fact of life...
(22 Jan 2009) Again I am lazy & only 2 items:
Item 1) Are gold prices fixed daily? (From
Item 2) The same statistical analysis can be applied to the
Item 1) Are gold prices
fixed daily? (From Jesse)
In the first place I want to remark that
there are major discrepancies observed:
Jesse places a simple gold buy & sell
strategy that gives 1% profit every five days, but Jesse draws
from an article from moneyweek dot com that says 1% every 20
In the second place, both Jesse's post and
the moneyweek dot com article do cite some academic sources but
all in all there is zero proof for
the claimed profits.
So this might all be a big bag of nonsense
when it comes to gold but the statistical methods needed are of tremendous
high value if you have access to them, that is the main
reason for this update.
Lets first quote the gold buy & sell
The astonishing pattern in London gold fixing
The strategy is really quite simple. You buy gold at the London PM fix (3PM), as the American markets have just opened for trading, and you sell your gold the following morning at the London AM fix (10:30AM), as the Asian markets are closing.
Comment: For this multi year strategy to work
on average after the London fix, gold prices must rise hence the
London fix is 'too low' in general.
Again this could all be a storm in a glass of
water, but here are the two graphics from both articles:
The first chart is from Jesse where the green
line is supposed to be your 5 day return.
And from moneyweek we have the second chart
where the green line is your 20 day return (also 1%):
Both Jesse and Dominic Frisby fail to tell us
what the blue spikes exactly are; day to day changes? Or week to
week? And if day to day are these opening/close London gold market
prices or changes in the so called 'London fix'?
Furthermore; why is there only a dull green
line giving your supposed 1% return every 5 or 20 days? If this
stuff is for real, why not include the 'running 5 day' or the
'running 20' returns?
From Jesse I know he has his economical
reasoning on order, he is not a dumb debt hugger or so, but he
should have been a little more critical towards the moneyweek
stuff. And the main problem is and stays:
When you use the same dataset and the same
buy & sell strategy, you cannot report the same returns on a 5
day scale compared to a 20 day scale.
Lets leave this item with that.
Item 2) The same
statistical analysis can be applied to the DOW.
Although the above statistics are a bit
shaky, in the hands of a good statiscian you can proof if there is
'market manipulation' in the Wall Street DOW.
For many years I suspect the DOW manipulated
to the upside. I don't care where the manipulation comes from: let
it be mutual funds, hedge funds, pension funds or even the US
government or a combination of those. I really do not care.
But if there is indeed multi year long manipulation
in the DOW futures this is easy to measure:
Simulate on your modern fancy computer the
next strategy (I don't have access to the data you need, but it is
all pretty simple):
Buy DOW stuff at the
end of the trading day and sell it just after the opening
For the time being the working hypothesis is
that in the futures it is 'cheaper' to pump the DOW up compared to
the real heavy lifting during trading hours. (This hypothesis
might be of less value in the last years as derivative products
were used more and more, but most derivatives are related to DOW,
gold and US$ values so likely derivative markets do not stand in
the way of this kind of analysis.)
I hope some university picks it up (because I
cannot pay for the data needed) because from the statistical point
of view it is not that hard to detect stock market manipulation.
Lets leave it with that, our own Dutch
columnist Jos Colignon was found back on Barry's hangout. Click on
the next screenshot to see the entire series of Jos about Obama:
(21 Jan 2009) Only two items today:
Item 1) Finally a few more in the USA that
can do elementary math.
Item 2) A new beer: Bailout Bitter.
Item 1) Finally a few more
in the USA that can do elementary math.
For about 14 months I have been arguing that
US house prices will decline about 50% from their mid 2006 top and
that all in all about 10 trillion US$ in family house equity will
be wiped out.
Only very seldom you observe similar reasoning's,
as far as memory serves this is only the third time in 14 months.
You might think that given the ten trillion size of damage there
is a large body of thinking inside the USA on that important
There is next to nothing; on main stream media outlets they only
show a large array of guys that for one reason or the other
declare that in the next Quarter the stock markets will boom
This all is very strange; why do the
Americans show this weird behavior?
Lets first place some links to some sources
(these sources are not bad but also constantly neglect the fact
that in total 10 trillion US$ in home value will be wiped out):
Let me quote from the lady from naked
capitalism since she is a sharp knife in the toolbox:
David Crowe of the National Association of Home Builders said he was quite negative in his housing and economic outlook last year, but not negative enough....
The S&P/Case-Shiller Home Price Index fell 25.3 percent from March 2006 to October 2008.
Crowe said he expects prices to fall another 29 percent this year and new home sales to decline 14 percent.
The article does not make clear whether it interpolated Case Shiller, or whether Crowe was using that as his reference point (OFHEO's Home Price Index shows a less dramatic decline).
But putting it together...... .747 (100% -25.3%) x .71 (10%- 29%) = .530. That means housing price will fall to 53% of their peak level, so the decline through this year will be 47%.
And we skipped over the last two months of 2008 in this estimate.
Comment: I don't think it is realistic to say
US house prices will decline another 29% this year only. Although
I would love that, I know of no mechanism that supports such
The total estimate looks rather good, but it will simply take a
longer time to get there.
The lady Yves calculates a cumulative price decline of 47% (the
average Wall Street trader is not capable of such by the way) and
there is important news on that:
There are some reports out there that say
companies ask their employees to agree to a pay cut instead of a
too large work force decline. I don't know how widespread this is
but it will bring down the median salary.
If my dreams come out, median income will
decline and before the historical house affordability is restored
again we will be beyond 50% of wiped out house value.
For the time being it is still a dream but
this particular scenario gets more realistic day in day out.
Weighing all in all: It is very strange and
very weird the Americans do not understand their own economy that
much. When it comes to debt levels or house prices you more often
than not only get some advertisement talk...
Item 2) A new beer: Bailout
Since I brew for myself I have some interest
in commercial beers since I have left them behind. The best thing
in brewing for yourself is is you control the alcohol content and
you can leave behind all these drunk making beers.
The perfect mujahedin beer is very simple:
less grains, more hops & at times some herbs or tea leaves. I
am serious my dear & beloved mujahedin; even bread contains
alcohol but you never get drunk from bread...
Below you see a beer I did not make myself,
but it is a good joke. Cheers!
(20 Jan 2009) Only two items today:
Item 1) Man oh man how boring: the
inauguration of B. Hussein Obama.
Item 2) Nice article: US and UK on brink of debt disaster.
Item 1) Man oh man how
boring: the inauguration of B. Hussein Obama.
It was on most television channels; the
inauguration of US prez Obama. A short time later Obama gave a
speech, it was the usual stuff like 'uniting people' and
'restoring leadership' and so on and so on.
Ok ok, the speech was not bad.
Later it emerged that a 27 year old speech writer has worked 3
months on that speech!
Do you believe that? I mean that is absurd:
how can the USA fulfill a leadership role if a speech already
takes 3 months to write?
Given the fact that the USA was still an
apartheids nation only five decades back, on the one hand it is
good they have a nigger prez right now but it is strange they
support other apartheid regimes like Israel.
I understand the religious component, but
apartheid is apartheid.
Item 2) Nice article: US and UK on brink of debt disaster.
Via the lady from naked capitalism I found a
nice article with the title:
It was published on the Economical Times
(from the India Times), of course you won't find such an article
in the UK or the USA. That's obvious; debt huggers never expose
their shit and their schizophrenic logic.
Lets quote a bit:
The only real change was in the composition. Private debts increased (7.8 times) more rapidly than public ones (1.5 times). As a result, there was a marked shift in the debt stock from public debt (just 37 percent of GDP in 1975) toward private sector obligations (117 percent). But this was not unusual. It should be seen as a return to more normal patterns of debt issuance after the wartime period in which the government commandeered resources for the war effort and rationed borrowing by the private sector.
From the 1970s onward, however, the economy has undergone two profound structural shifts. First, the economy as a whole has become much more indebted. Output rose eight times between 1975 and 2007. But the total volume of debt rose a staggering 20 times, more than twice as fast. The total debt-to-GDP ratio surged from 155 percent to 355 percent.
Comment: Suppose average interest rates are
at 5%, if the total debt to GDP ratio is 3.55 you need 17.75% of
the GDP just to fulfill the interest payments...
You can argue that loans and debt need to be paid but in the USA
there is widespread use of the refi (the refinancing), in other
nations there are always fines and extra payments with a refi but
not in the USA.
So interest obligations are mostly paid with fresh debt; do you
really believe the Americans use 15 to 20% of their gross domestic
product for stupid interest only?
For the most part, policymakers have been comfortable with rising private debt levels. Officials have cited a wide range of reasons why the economy can safely operate with much higher levels of debt than before, including improvements in macroeconomic management that have muted the business cycle and led to lower inflation and interest rates. But there is a suspicion that tolerance for private rather than public sector debt simply reflected an ideological preference.
Comment: These policy makers are plain dumb
idiots that do not understand elementary math...
Quoting on, the article discusses bankruptcy
The solution must be some combination of policies to reduce the level of debt or raise nominal GDP. The simplest way to reduce debt is through bankruptcy, in which some or all of debts are deemed unrecoverable and are simply extinguished, ceasing to exist.
Bankruptcy would ensure the cost of resolving the debt crisis falls where it belongs. Investor portfolios and pension funds would take a severe but one-time hit. Healthy businesses would survive, minus the encumbrance of debt.
Comment: This is wrong because there are no
savings in the USA, bankruptcies only lead to a long long chain of
more bankruptcies. That is why we have all this bailout fun; even
a few small bank failures can lead to a system meltdown.
The final option is to raise nominal GDP so it becomes easier to finance debt payments from augmented cashflow. But counter-cyclical policies to sustain GDP will not be enough. Governments in both the United States and the United Kingdom need to raise nominal GDP and debt-service capacity, not simply sustain it.
There is not much government can do to accelerate the real rate of growth. The remaining option is to tolerate, even encourage, a faster rate of inflation to improve debt-service capacity. Even more than debt nationalization, inflation is the ultimate way to spread the costs of debt workout across the widest possible section of the population.
Comment: In the economy everything is related
to everything, in the blink of just a few months cause and effect
can interchange. What once was a workable theory is crap a few
months or years later, anyway that is the case in the 'present
To bring down debt to GDP ratio's from 1:3.5 to lets say 1:2 you
need over 75% in 'excess inflation' and I don't think the US
Federal Reserve is ready for that...
Right now it is 22.00 local time and that is
closing time for the DOW; here is the closing number of the DOW
while we had Obama inaugurated:
(19 Jan 2009) Five items:
Item 1) Gaza strip; cease fire, death
ratio's, Dubya pee, UN & shaped explosives.
Item 2) Poking fun at the Royal Bank of Schotland.
Item 3) The bailout game.
Item 4) Jesse on money supply.
Item 5) The empty item.
Item 1) Gaza strip; cease
fire, death ratio's, Dubya pee, UN & shaped explosives.
Ok ok, there is at least a rudimentary form
of a cease fire in the Gaza strip. The Israelis had their orgy of
violence and even reports are observed that say they can get out
of Gaza before Obama is the next US prez...
Death ratio's are very interesting; over 1300
dead from the Palestines, 10 Israeli soldiers and 3 Israeli
citizens. That gives a gross death ratio of 1:100 (who says Israel
is only a nation striving for peace?).
If we withdraw the friendly fire killed Israeli soldiers the death
ratio climbs firmly above the 1:100 and since in the meantime
still dead bodies are collected it will climb even higher.
It looks confirmed: We have a new Übermensch
nation around, every few years they need a nation to kill until
humanity spits them out.
It was funny to observe the United nations
calling for an investigation about possible war crimes, rather
likely we will not hear from that again because behind the smoke
screens there will be a lot of pressure on Ban Ki-moon to stop
nonsense like that.
On the use of white phosphorous or WP (read
Dubya pee) wikipedia has a nice file, link:
Very often wikipedia files are 'massaged' by
the US military but this one says, quote:
By oral ingestion
The accepted lethal dose when white phosphorus is ingested orally is 1 mg per kg of body weight, although the ingestion of as little as 15 mg has resulted in death.
Comment: So oral ingestion is lethal on a
1:1000000 ratio to body weight while as smoke far lesser ratio's
are accepted? And the article also shines a bright light on the
statements from the Israelis that Dubya pee was always
used inside international law: Israel never signed the
treaties so in fact it is true: Israel worked inside
My dear reader: Make up your own mind; is
Dubya pee a chemical weapon yes or no?
On shaped explosives it is very simple: For
many years in the Iraq equation the US military complained that
shaped explosives were imported from Iran and used again their
brave heroes. In the Gaza equation we observed zero shaped
explosives so does this shed a light on the US military
Item 2) Poking fun at the
Royal Bank of Schotland.
The Bank of Scotland posted the largest loss
of a UK company in history whatsoever.
It is about 37 billion US$ but nobody knows for sure.
Funny detail: The bank I use as a consumer
was partly sold to RBS for 27 billion € but strangely enough
they had to write down 22 billion € on that beloved acquisition.
This raises questions about the rest of RBS banking but to make
this more funny:
The parts of ABN-Amro that were taken under
our government wings report a profit for the year 2008... (Talking
about a 'Dutch threat' for the UK debt huggers.)
Item 3) The bailout game.
Via the lady of naked capitalism I found the
next funny game, it takes a long time to download but you can play
the US Treasury (and her slaves like the US Federal Reserve)
bailout game for yourself.
Money supply, yes money supply inside a fiat
money system is hard to understand. The USA has M1 M2 and M3
monies and also MZM money (MZM = money with zero maturity). The UK
also has M4 money but I never studied the fine details of that
For myself I use often the next:
M3 money: This money goes from the Central
Banks to the commercial banks.
M2 money: This money flows in between the commercial banks &
M1 money: That is what you have in your wallet or can get in a
Very different but after a few minutes of
thinking you can also view it as next, link:
The link is also a good way of explaining how
the different measures of money work.
I myself did think of this detail a lot
because I understand the US dollar is a relatively fake currency
when it comes to the long howl.
People often prefer to jump into discussions and turn them into debates (arguments) with hair-splitting definitions (what is 'control' of the money supply) and red herrings (why does a dollar cross the road?) before defining any terms or facts and setting some boundaries for the analysis, because their goal too often is not understanding, but to promote some theory or point of view. 'Winning the argument' is their objective, not a search for the truth.
Comment: No comment beside: Money supply
should always be bounded by gross domestic growth and not by price
inflation as the debt huggers would like us to believe.
Item 5) The empty
In the empty item you can view one of the
precision bombs as used by the Israelis.
(14 & 15 Jan 2009) Only five items:
Item 1) Is Mr. Moszkowicz a Dutch
Jewish whiner? It looks confirmed.
Item 2) A message from Osama bin Laden.
Item 3) Finally Deutsche Banks posts a loss; still waiting for
Item 4) Bernanke an Expert on the Great Depression?
Item 5) The empty item: Dubya pee and Financial fun on Obama.
Here in the Netherlands since the beginning of the previous decade
there is a soccer song (or slogan) that goes as next:
Alle Joden aan het gas!
Translated this would be:
All Jews go on the gas!
During soccer matches this is often heard;
the phrase 'Jews' refers to the soccer supporters of the Amsterdam
based soccer club Ajax.
When you hear it for the first time it sounds
a bit too far but when you know the Ajax supporters are mentioned
it is so over the hill it even gets funny.
So far for the background.
A Dutch lawyer named Abraham Moszkowicz is
suing a few Dutch parliament folks because they walked in a
demonstration against the Israeli bombardments. According to
Jewish whiner Abraham Moszkowicz the Dutch parliament folks did
not distance themselves from the traditional soccer song that was
heard in the background...
What makes this case so sad is the fact that
Jewish whiner Abraham Moszkowicz is one of those who is addicted
to Media attention, with making a legal case against Dutch
parliament folks Abraham once more has the headlines.
Well the little gay prick has his attention once more...
So it looks confirmed: Abraham Moszkowicz is
just another Jewish whiner!
Item 2) A message from
Osama bin Laden.
Yesterday a new Osama audio tape was posted,
I only did read small fragments of it but there is a small part I
would like to comment on (source),
Al Qaeda boss Osama bin Laden says the decline of America's dominance on the world stage was one of the main factors which prompted Israel to launch its offensive in Gaza.
"The great and swift decline in America's influence is one of the most important motivations for Israelis to wage such a barbaric attack on Gaza, in a bid to try and make use of the last days of (President) Bush's mandate and the neo-conservatives," he says.
Comment: Of course a lot can be lost in
translation but it is important to understand that for years the
Israelis did dream of a large scale attack on Iran. Lately it
surfaced that the Israelis have asked Dubya for permission to use
the Iraqi air space.
Needless to say Dubya could not give his permission because doing
so could damage future US access to the Iraqi oil.
Another important element is the size of the attack on the GAZA
strip; this is induction from the large size dream of attacking
Iran. It has nothing to do with a real threat to the existence of
Israel, the lost dream induces the rough violence we observe.
At last: Of course there is a power vacuum with the new Obama not
sworn in, but to understand the 'need for military action' we must
also take into account the impending Israeli elections.
It will not be the first time a sitting democratic government wins
elections on the wings of a freshly started war against a
Item 3) Finally Deutsche
Banks posts a loss; still waiting for ING...
Two days ago Deutsche Bank finally posted her
first loss when the Q4 2008 figures came out. It was just under 5
billion € and cited were the 'extreme conditions' of the fourth
Quarter last year.
I have not a sniplet of evidence let alone
rigid proof but for now I only say 'finally the first loss is
there'. I estimate Deutsche Bank one of the weak giants.
In the meantime we are waiting for a Dutch
banking giant: ING.
From that bank it is known that they have about 47 billion €
related to the US housing market and until now they have done 0
€ in downwritings.
Needless to say this compares to burning water streaming
So lets wait upon the impending ING
Item 4) Bernanke an Expert on the Great
The lady from naked capitalism dot com (see homepage)
strikes again in this lovely article:
The lady understands math, she understands
what math dynamical models are and even comes up with: Most prices
are outside the perfect equilibrium most of the time.
That brings a soft smile on my face; the lady knows how to get to
By the way, now we are talking about
'equilibrium', or the Minsky Financial Instability Hypothesis,
we must not forget there is also a branch of math known as
'Catastrophe theory'. It is just a tip for the US economists but
when you have 17 trillion of debt on your financial sector only it
is not the most dumb detail to study.
There can be posted many quotes from Yves her
article, but this one I like:
And so to this day, the pinnacle of neoclassical economic reasoning always involves “equilibrium”. Leading neoclassicals develop DSGE (”Dynamic Stochastic General Equilibrium”) models of the economy. I have no problem–far from it!–with models that are “Dynamic”, “Stochastic”, and “General”. Where I draw the line is “Equilibrium”. If their models were to be truly Dynamic, they should be “Disequilibrium” models–or models in which whether the system is in or out of equilibrium at any point in time is no hindrance to the modelling process.
Comment: For me too it is strange to observe
there is no ceiling to (for example) allowed debt in the
economical models of the Federal Reserve. But that simply is the
case for a few decades. They never heard of 'catastrophe theory'
so the FED is without any significant weaponry; you won't hear me
So from the math & economical sciences
point of view the US Federal Reserve lives in the past. Therefore
two pictures of the FED trying to connect to the past.
You yourself can make up your mind:
Who is the Federal Reserve and who is the
Item 5) The empty item:
Dubya pee and Financial fun on Obama.
Yesterday already I wanted to write upon the
use of white phosphorus in the Gaza strip but due to a small
slurry of social obligations I left down that detail.
Today the main facility of the United Nations
was shelled by the amateur Israeli defense forces and on the
television big burnings of stock supplies were observed.
The United Nations have to understand that in
theory white phosphorus bombs are forbidden except when it comes
to the next cases:
Case 1) For the use of illumination &
Case 2) For use as a smoke shield for the own
In US military slang white phosphorus is
known as wp (speak out: Dubya pee).
The UN has to understand that if Israel
declares that during broad daylight they need illumination, the
use is not illegal according to international law.
The UN has to understand that in the middle of the night and even
when there is a big fog, if Israel states they need a smoke
screen, again this is not illegal under international law.
From the military point of view it all does
not make much sense: What military commander
sends his platoons through clouds of Dubya pee?
And for illumination there are also plenty of alternatives, but
military international law is military international law...
The truly good thing is: In case Dubya pee is
used against the main facility it can be measured by so called
And that my dear United Nations is a true
good thing: Or not?
After the Dubya pee I only link to the dumb
economical stimulus package from Obama, right now Obama is
constantly portrayed as 'very smart' but the same social thing was
observed when Dubya won 8 years ago.
Here is the fun from a guy that rather likely
will not be smart enough:
(13 Jan 2009) Ok, today I would like to concentrate on
financial humor but before that I would like to remind the reader
that when it comes to aggression and war the killing ratio's are
simply most important.
During the second intifada the killing ratio
was about 1:2 or at most 1:3.
That means that for every killed Israeli 2,
at most 3 Palestines died.
Please remark that the Geneva rules for war do not apply on this
conflict but the 'intifada status' was as close as you can come to
The intifada ended, but the killing ratio's
climbed to a strange 1:13 (right now, as a scientist, I regret I
never stored the reliable information on this detail).
Please observe the historical context: The
intifada was ended but the Israelis found wisdom to kill 13
Palestines for every Israeli killed.
That kind of behavior was 'peace time behavior' for the Israelis,
in the meantime the Israeli whiners complained about Palestine
rockets that only killed Israelis on a 'traffic accident scale' in
You really do not need much brains to see who
is the real aggressor and who is not.
I mean, it was peacetime so why did the ratio climb to 1:13?
The financial fun items:
Item 1) The fairy tale of the king and the
Item 2) Standard & Poors on the AAA status of the USA.
Item 1) The fairy tale of
the king and the golden coins.
A long time ago in a country far far away
there was a king named Benya. His country was very prosperous for
a lot of generations and compared to the other countries the
golden coins were much bigger.
The king observed over the decades that in
the neighboring countries smaller coins were used to buy the same
kind of stuff on the local markets. These countries were not as
prosperous, but anyway they also had good armies.
One night when the king was asleep, the
concept of 'financial innovation' entered his mind and dream and
he woke up and wrote down his dream in words: 'Cut the coins in
In the months after all citizens were
'invited' to the Royal palaces and had to give their golden coins
up. In return they got coins of only half the weight.
By royal decree it was forbidden to use the
old coins in trade, only new coins were allowed.
Strangely enough, king Benya only observed
the once thriving economy tumble...
Item 2) Standard &
Poors on the AAA status of the USA.
On seeking alpha dot com they have a rather
dumb editor named Eli Hoffmann (yes he is a fucking Jew and also
rather dumb). Eli does not understand much of the world, but lets
not zoom in on Eli but on his latest contribution to the financial
Remark that Eli only 'cuts and paste' the
Standard & Poors insights of why the USA should have an AAA
credit rating. Just a funny quote from S&P:
The ratings on the U.S. primarily reflect our opinion of the sovereign's high-income, highly diversified, and exceptionally flexible economy. The ratings also reflect our view of its strong track record in terms of growth-enhancing policies, as well as the unique advantages coming from the U.S. dollar's role as the key international currency. In our opinion, these strengths continue to outweigh the U.S.'s weakening current-year fiscal performance, growing risks in its financial sector, longer term challenges associated with its entitlement programs, and the nation's weak external position.
Comment: Of course the S&P raters neglect
the 17 trillion in debt the US financial sector has upon herself.
The S&P folks also think the US economy is 'highly
diversified' and that is true: from large prison populations, lots
of homeless people to very much millionaires and billionaires it
is 'highly diversified', it also lacks a real industrial base but
that is not a problem for the S&P folks.
Standard & Poors hangs out the perfect
comedian with stating that US net government debt is 'only 42%' of
the gross domestic product, not often you see such good comedians,
Our own stress tests lead us to believe that, in a reasonable worst-case scenario, net general government debt could rise from its 2008 level of 42% of GDP to as much as 75% by 2011, combining the costs of bailouts and stimulus with the fall-off in revenue. Indebtedness of this magnitude, while a noticeable deterioration, would still be consistent with ratios of closely comparable peers such as the U.K., France, and Germany (all rated AAA/Stable/A-1+), and in itself would not jeopardize the rating on the U.S. so long as the sovereign's other credit fundamentals remain in place.
Comment: My 'stress tests' say that it is
highly unlikely that we can say it is 'consistent' with nations
like Germany or my home base the Netherlands. The US government
debt is a rather artificial construct, who cannot laugh when the
S&P says it is 42% of the GDP?
In the article, he stated that foreign investors would gladly buy up any amount, no matter how large, of Treasuries the US would sell. Why? Because they “have” to do it to sustain their economies. I wonder if he has ever left the cozy confines of Manhattan?
Here is a direct quote: “They (meaning foreigners) have nothing, they build nothing, they sell nothing without OUR demand”. So he is basically saying that foreigners are nothing without the United States. The whole purpose in life of everyone else on the globe is to merely serve the needs of Americans and to make their Wall Street masters filthy rich.
Comment: Even US government folks try to put
the blame on countries like China because 'they save too much'.
Yes yes yes, the problems started with countries saving too
More funny as this I cannot make it.
(12 Jan 2009) Three items:
Item 1) More comparisons on the Warsaw ghetto
compared to the Gaza strip.
Item 2) Perfect and superb propaganda from the Jerusalem Post.
Item 3) For the second time: The S&P on a decade long
Item 1) More comparisons on
the Warsaw ghetto compared to the Gaza strip.
After the Germans invaded Poland at the start
of World War II they separated the Jews from the normal folks and
placed them into the Warsaw ghetto. Not that the 'normal folks'
were spared a lot but the Jews got what they deserved according to
the nazi insights of those years.
Smuggling began at the very moment that the Jewish area of residence was established; its inhabitants were forced to live on 180 grams [6½ oz.] of bread a day, 220 grams of sugar a month, 1 kg. [2.2 lbs.] jam and ½ kg. of honey, etc. It was calculated that the officially supplied rations did not cover even 10 percent of normal requirements. If one had wanted really to restrict oneself to the official rations then the entire population of the ghetto would have had to die of hunger in a very short time....
Comment: There are more sources that more or
less validate food supplies were below 10% of official statistics
to what the Germans consumed. I hope the Israelis understand it
was the goal of the Germans to get all Jews killed.
Present day statistics are amazingly similar
In 2007 an average of 500 trucks a day entered Gaza with food and supplies. In comparison, yesterday, just 36 humanitarian trucks were allowed access to Gaza. With almost the entire population of 1.5 million Gazans dependent on humanitarian assistance, it is obvious that the incoming aid is not even remotely adequate.
Comment: 36 trucks is well below 10% of 500
trucks for about 1.5 million Palestine folks in the year 2007. If
we take into account how many trucks of food are there for 1.5
Israelis in the year 2007 we have found just another statistic
that simply says the Israelis are the best fascists we have right
History never repeats itself, we still miss the plans for present
day concentration camps, but my humble guess is that inside right
wing Israeli politics plans like that are a wet dream... We will
see if that insight is correct in the future.
Item 2) Perfect and superb
propaganda from the Jerusalem Post.
With war we always have rhetoric &
propaganda. Perfect propaganda was found at the Jerusalem Post,
the JP is not the official IDF outlet but the next file is such
perfect propaganda that universities around the world should save
it and explain how propaganda works.
The title is very strange to begin with, as
if Iran would dictate the Hamas.
But indeed that is what the intellectuals of the JP make it,
"The Iranians threatened to stop weapons supplies and funding to the Palestinian factions if they agreed to a cease-fire with Israel. The Iranians want to fight Israel and the US indirectly. They are doing this through Hamas in Palestine and Hizbullah in Lebanon".
Comment: The Iranians threatening to stop
supply weapons and funding in case the Hamas goes into a cease
fire with Israel?
My dear reader do you understand the propaganda element of this
Two paragraphs further down the line we
"The Iranians never fired one bullet at Israel," he said. "But now they are trying to appear as if they are participating in the war against Israel. The leaders of Teheran don't care about the innocent civilians who are being killed in the Gaza Strip".
The Egyptian official accused Iran of "encouraging" Hamas to continue firing rockets at Israel with the hope that this would trigger a war that would divert attention from Iran's nuclear plans.
Comment: This is so stupid, the Jerusalem
Post wants us to believe that Egyptian officials warn us of
'diverting attention' from nuclear plans on behalf of the
Again: Universities around the world should lock this file in a
propaganda case that needs to be studied; how can such dumb stuff
even gets published?
One more paragraph of this remarkably good
Egyptian political analyst Magdi Khalil said he shared the view of the Palestinian Authority and Egypt that Hamas was responsible for the war in the Gaza Strip. "Ever since Hamas seized control over the Gaza Strip in 2007, they turned the area into hell," he said. "They imposed restrictions on the people there and even prevented them from performing the pilgrimage to Mecca".
Comment: As if the Israelis would allow for
pilgrimage to Mecca...
Now that I am 45 years of age I finally understand why we had all
these pogroms against the Jews for so much centuries: The Jews
simply asked for this, just like the JP is doing with publishing
stuff like this...
In the meantime this is reality for Gaza
Item 3) For the second
time: The S&P on a decade long scale.
In the picture below you one of the broadest
measures of USA stock value; it is the S&P 500. It was a long
time ago when I told you that for the first time in history the
S&P was down on a decade long scale.
That was many months ago, so why bring up
this wisdom once more?
Well in the graph below you see the S&P
bottoming at 800 to bounce back.
This happened in Sept 2002 and recently in the week of Nov 17 in
The funny thing is that the Wall Street stock
traders do not understand the power of inflation: stock indices
are mostly not corrected for inflation.
The idiots forgot to take inflation into
account when they defended the 800 S&P level, with six years
of inflation about 20% of wealth is destroyed. So 800 on the
S&P in 2008 is not 800 on the S&P in 2002. Yet the idiots
acted as if it were the same border...
I hope that when you click on the picture you
get a bigger version.
Oh oh, when will these dumbo's understand we
need to see 7000 on the DOW before economical repair can set in?
When will that be?
(11 Jan 2009, later updated as found at the end) Today I would like to post two more items about
Israel and the Gaza equation, but before that a nice file was
found at the NY Times that validates that all these past five
years my insights on the Iranian nuclear equation were more or
less 100% correct more or less 100% of the time.
For me this is strange; why do I never have
big blunders when it comes to entire nations? Anyway, here is the
NY Times link:
Last year, Prime Minister Ehud Olmert of Israel asked President Bush for bunker-busting bombs and permission to fly over Iraq to attack the plant.
Comment: No comment, it only proofs the
Israelis have a severe 'superiority complex' inside their society
but that is already known...
Lets go to the main items of today:
Item 1) Similarities between Israel and the
former apartheid regime of SA.
Item 2) Similarities between the Gaza strip and the former Warsaw
Item 1) Similarities
between Israel and the former apartheid regime of SA.
A very important characteristic of the former
South African apartheid regimes was separation of the black and
white communities and a large wage differential. For the same kind
of job, blacks always got a fraction compared to their white
Beside this the whites had health insurance, holiday money, sick
leave money & so on & so on.
In Israel it is the same for a lot of decades
(far more decades then in SA by the way).
This day I observed one of the Israeli
propaganda tellers on the television saying:
The West Bank has a relative far better economical
outlook and standard of living, it took only five minutes of the
Google thing to arrive at the next source:
Palestinian workers employed in West Bank settlements and factories earn less than half the minimum wage stipulated by law, a Knesset study revealed Tuesday.
Comment: This is a Knesset study so it is
just a reliable as a study from the former SA government. In
practice things are likely far more worse.
In general there are far more labor issues in
Israel that validates it is only one more apartheid regime. It is
not only Palestines who get paid less, when you are black and come
from Africa you get a low wage & when you are white and come
from Europe or the USA you get the normal wage.
If the international community did not accept
practices like that in South Africa, why are they allowed many
decades longer in Israel?
There is much more to be said on this
subject, for example medical treatment of imprisoned Palestines
compared to imprisoned Israelis is the same game but lets proceed
with the next item...
Item 2) Similarities
between the Gaza strip and the former Warsaw
It must have been over two decades ago when I
studied the Warsaw ghetto for the last time, today with the help
of our beloved internet the statistics point to only one thing:
Compared to the nazis, the
Israelis have far better killing ratio's.
My compliments go to the Israelis; in
absolute numbers they are not very good but they have beaten the
Germans when it comes to the Warsaw ghetto.
For example there was hardly any food in the
Warsaw ghetto so rather likely there were some tunnels to prevent
the Jews from starvation too much. This is correct, see footnote
91 from this
The tunnel from the ZZW headquarters in the Toebbens-Schultz shop area, which connected to the Warsaw sewer system, is mentioned in a number of sources as well. Fella Finkelstein-Shapchik and Simha Korngold relate in their testimonies how they and other
ZZW fighters from the Toebbens- Schultz shop area left the ghetto through that tunnel on April 28, 1943. Stephen (Shalom-Stifan) Grayek (Sheloshah yeme kerav [Tel Aviv: Maarakhot, 1972], p. 163.)
The Warsaw ghetto did also some uprising
against the occupiers, I don't know how reliable the next
statistics are but here it is (source),
Approximately 13,000 Jews were killed during the Uprising, with another 50,000 rounded up and deported to death camps. A few escapees continued to fight in the forests, whilst some who were arrested were later freed by the Polish underground forces and joined the Warsaw Uprising. An estimated 300 German troops died in the struggle.
Comment: About 300 German troops compared to
13 thousand Jews gives a ratio of 13000/300 = 43.
Present Gaza strip statistics say 800 killed Palestines (about one
third of them children by the way) and about 10 killed Israelis.
Giving rise to a ratio of 80, firmly above the nazi ratio of 43
from the Warsaw ghetto.
Weighing all in all: Not only make the
Israelis a better apartheid regime for many decades, they also
have far better kill ratio's when it comes to the nazis. So with
about one century of military history in my mind my
congratulations goes to Israel:
You are the best fascists on this
From the last link we have a nice comparison
about how the Jews in the Warsaw ghetto got the extra food (and
also German machine guns although the file does not say that
The smuggling took place – a) through the walls, b) through the gates, c) through underground tunnels, d) through sewers, and e) through houses on the borders....
Comment: So the Jews once digged underground
tunnels themselves do not allow the same for the Palestines who
did see their land stolen.
Again: My congratulations; Hitler likely would have considered
this a 'funny thing' in the Spring of 1941 or so.
End of the update; till updates!
(09 Jan 2009) And again, boring boring, only two items:
Item 1) More on the Gaza equation, Jimmy
Carter & Joseph Goebbels.
Item 2) Easy loans 'financed' dividends & thoughts on future
Item 1) More on the Gaza
equation, Jimmy Carter & Joseph Goebbels.
You can say a lot about the former peanut
farmer and US president Jimmy Carter but the more years he is on
my radar screen the higher he climbs in esteem, that cannot be
said from Dubya who is only more full of shit year in year out.
But let emotion out, there is too much
emotion in the air anyway so lets stay cool.
Jimmy wrote an article in the Washinton Post,
here is the link:
After visiting Sderot last April and seeing the serious psychological damage caused by the rockets that had fallen in that area, my wife, Rosalynn, and I declared their launching from Gaza to be inexcusable and an act of terrorism. Although casualties were rare (three deaths in seven years), the town was traumatized by the unpredictable explosions. About 3,000 residents had moved to other communities, and the streets, playgrounds and shopping centers were almost empty.
Comment: It is utterly weird that only three
deaths in seven years give rise to a traumatized population, after
all this is only in the traffic accident range of deaths.
Therefore it is important to understand why Sderot & the rest
of Southern Israel gets traumatized so easily by only a few fire
I advise to you to do your own thinking on this (because we have
all this emotion in the air) but my first guess is that the
Israelis are well aware they live on stolen land.
Only such a deep fundamental fear (living on stolen land) could
give rise to such easy traumatics with only a few fire crackers.
On another visit to Syria in mid-December, I made an effort for the impending six-month deadline to be extended. It was clear that the preeminent issue was opening the crossings into Gaza. Representatives from the Carter Center visited Jerusalem, met with Israeli officials and asked if this was possible in exchange for a cessation of rocket fire. The Israeli government informally proposed that 15 percent of normal supplies might be possible if Hamas first stopped all rocket fire for 48 hours. This was unacceptable to Hamas, and hostilities erupted.
Comment: There is only one source (Jimmy
Carter) and it is only 'informally proposed' from the Israeli
government, but if the 15 percent of normal supplies is really
true we are in a situation that a third intifada is just the only
way forward for the Palestine people. That might be regrettable
but 15 % can only be classified as a 'fascist proposal' and
After Jimmy Carter that leaves us with other
examples from war history and air attacks. There is a wide body of
military history from the previous century how nations react on
air attacks, for example in World War II the London folks were
never broken because of the V2 rocket attacks.
The UK pm Churchill was a driving force on bombings on German
cities, it never broke the German spirit.
What is the difference between the UK,
Germany and the present Israel?
That is the concept of living on stolen land,
both the UK and Germany did not live on stolen land. The Israelis,
From the Joseph Goebbels files I have
selected a speech from 14 June 1942, as far as memory serves
allied attacks on German civilians were only peanuts at that time.
But peanut farmer Churchill guided his folks the best he could.
It would do the Jewish press in New York and London too much honor to give any attention to their bloodthirsty commentaries on the air war and the war of nerves. They will have to pay for it with the extermination of their race in Europe, and perhaps far beyond. They are not to be taken seriously, for they represent their own interests, not those of England or America. We are waging war against enemies who threaten our very existence. We are fighting for everything dear to us. The war's victims will one day stand in worthy comparison to the size of the victory we will achieve. That can no longer be altered. Our enemies are in a position to postpone our victory for a period of time. But that will make the end even more inevitable.
Here, too, the old proverb is true: That which does not destroy us makes us stronger.
Comment: Please remark one more coincidence
with World War II: the Israelis constantly make a big deal of
'threatening our existence'. If it is Iran, the Hezbollah or the
Hamas, everybody has to bow bow bow for the superior Israelis.
That which does not destroy us makes us stronger & a few fire
crackers in Sderot brings us down...
Good luck with these dumb insights Israel;
you have found just one enemy more & the name is Reinko. Good
luck with it!
Via the lady from naked capitalism I came
across that lovely article that once more assures the USA will
loose it as the major military force. I already understood that
the US financial sector used fresh debt for higher profits, but as
a scientist I was also diplomatic by stating 'profits are derived
via more debt'.
It was not only public companies that were able to pay dividends with cash that might have come from lenders rather than profits. Private equity firms were able to bolster their returns by having companies they owned borrow more money and use the cash to pay dividends. Now some of those same companies are struggling to find cash to finance operations.
Comment: Yes my dear Pentagon, even the days
of private equity are over. No longer they can borrow 10 billion
US$, buy some companies with that and later park the 10 billion of
debt in these companies...
So who is going to pay for your military stuff now?
Only the Ben Bernanke money printing press can buy you new
Also good luck with it!
At last: US non farm pay roll numbers
declined another half million. That leaves 2008 as the worst year
since World War II but it were mostly the last five months that
shed the 2.6 million jobs lost.
If the pace continues we have about 6 million
more lost jobs in 2009, but if you take into account the housing
fun it will be more.
I mean, why are the accountants of the USA so
dumb as to let flow debt directly to dividends? Why is that? I
know but you don't!
(08 Jan 2009) Again only two items:
Item 1) The Gaza strip equation.
Item 2) Jesse on Ben & COMEX.
Item 1) The Gaza strip
This morning started with the nice news a few
rockets were launched from Lebanon, it wasn't much of a big deal
but it had everybody on edge and that's a good thing.
Of course everyone in Lebanon was denying
they fired the rockets, a lot of observers stated it was highly
unlikely the Hezbollah has done it while in the meantime so called
'Palestine factions' got the blame.
Other observers noted those factions simply do not have rockets...
In another development I can give my full hearted
congratulations to the IDF once more (no link, it was on the
The Red Cross reported
they went into a home in the Gaza strip to find 15 dead bodies.
Nasty detail: The surviving children were simple left and
abandoned by the IDF.
More and more it looks like the IDF is only a
bunch of amateurs that learned next to nothing from the 2006
By the way: Have you seen those propaganda
movies from CNN where the IDF has imitated a complete environment
like they were supposed to meet in the Palestine territories? Thus
suggesting the IDF was a fully professional army ready for
I wonder what leaving children together with
15 dead corpses has to do with a 'professional army'; these IDF
people are only amateurs...
A bishop from the Vatican even equated the
Gaza attacks to a concentration camp but that is historically not
correct. It is more like the Warsaw ghetto, in the past 18 months
when the brave Israelis sealed the Gaza strip from the outside I
often compared it to 'Warsaw ghetto light'. Now we are in real
Warsaw ghetto conditions.
More from the television: Israelis running
for cover when the air alarm sounds, we see all kinds of Israelis
seeking shelter but in the meantime statistics still say that from
traffic accidents more people die.
Conclusion: Israel is indeed only a nation of whiners.
On the USA media outlet time dot com I
observed water burning! From an article with the title:
Comment: It is a long call to make the
shelling of a UN school the dominant thing, this ain't over by far
and leaving children with 15 dead corpses in a house is also a
'dominant thing' don't you think?
All in all the time article still is very 'pro Israel', no emphasizes
on actual war crimes but a blanket of love on a misguided loved
In the meantime the United Nations is
skipping humanitarian aid because too many drivers get shot during
cease fire times (only one more clue the IDF is only a bunch of
amateurs) and my own Dutch government sees no reason to get tough
Item 2) Jesse on Ben
The financial news is also important because
only breaking down the funding base of the idiots at the Pentagon
can solve Mideast problems also.
I have selected only a few:
Lets start with the words from the impending
US prez Obama: he stated there will be trillion large Federal
deficits for years to come. This is a very humble statement and I
have done only very sketchy calculations but it could easily be
So there is a brand new economical axiom:
From now on the money
printing press will rule, no more nonsense talk of tax payer money
on the hook or 'passing the bill to future generations'. From now
on the money printers will rule the scene.
Don't believe me? Come back in a year or five
and explain to me why you were utterly dumb in 2008!
Jesse has a nice picture that shows you the
deepest of insights at the US Federal Reserve, above you see the
honorable FED chairman Ben Bernanke but who his Toga Toga Toga
adviser is I don't have a clue (likely one of the Princeton
Item 1) Why all peace initiatives in the
Palestine equation will fail.
Item 2) Joseph Goebbels on the year 2000; the iron curtain &
stuff like that.
Item 1) Why all peace
initiatives in the Palestine equation will fail.
There is all kinds of talk that there should
be an end to the fighting in the Gaza strip and that always
includes the evil Hamas should stop it's devastating (rockets)
attacks against the peace lovers from Israel.
If you ask our political leaders what causes
terrorism they often talk about hateful ideologies, fanatics,
brain washing and lots of other 'evil attributions' projected on
From the social sciences it is well known
what creates most terror attacks, these are very simple to
1) Military imbalance between determined
2) Political change.
In Iraq both factors added their full weight
and we have all seen the results of that, in the Palestine
equation it is mostly the military imbalance that causes the
decade long problems.
Our political leaders are a large part of the
problems because they also represent the military power, so from
that side of the equation we often get that 'poverty' is a driving
force of terrorism.
Our political leaders are a large part of the
problem because they want to make the military imbalance even
stronger. The facial cream smearer Tony Blair (a fake guy by the
way) wants tunnels to the Gaza strip to be destroyed because
'otherwise we cannot achieve peace'.
The crap that comes out of the political
scene is sheer unbelievable; enslaving the Palestines via even
lesser military means is so stupid, only guys like Dubya or Tony
can dream that up.
The only way forward is putting up much more
pressure on Israel, economical sanctions could be handy to bring
the military imbalance down. Remember the South African apartheid
regime; it took a long run but in the end economical sanctions
For the time being it is a good thing there
are three hour long cease fires to get food and water in.
For the time being I advised a third intifada
only to be there until the 1000 threshold is taken, of course the
Palestine people have to decide for
Item 2) Joseph Goebbels on
the year 2000; the iron curtain & stuff like that.
For a few decades it is one of my hobby's to
study war, of course like most of my generation I started with
World War II. Until the present years I never studied Joseph
Goebbels but lately I try to read at least one file from that
relatively smart guy.
What I miss is in how far Joseph was aware of
the actual situation in the concentration camps and how rough the
stuff was on the Russian population like we had in the Stalingrad
and Leningrad sieges.
Again, here is the index
and this is the (source)
quote from Joseph Goebbels on the year 2000:
No one can predict the distant future, but there are some facts and possibilities that are clear over the coming fifty years. For example, none of the three enemy statesmen who developed this brilliant plan will still be alive, England will have at most 20 million inhabitants, our children's children will have had children, and that the events of this war will have sunk into myth. One can also predict with a high degree of certainty that Europe will be a united continent in the year 2000. One will fly from Berlin to Paris for breakfast in fifteen minutes, and our most modern weapons will be seen as antiques, and much more. Germany, however, will still be under military occupation according to the plans of the Yalta Conference, and the English and Americans will be training its people in democracy. How empty the brains of these three charlatans must be — at least in the case of two of them!
The third, Stalin, follows much more far-reaching goals than his two comrades. He certainly does not plan to announce them publicly, but he and his 200 million slaves will fight bitterly and toughly for them. He sees the world differently than do those plutocratic brains. He sees a future in which the entire world is subjected to the dictatorship of the Moscow Internationale, which means the Kremlin. His dream may seem fantastic and absurd, but if we Germans do not stop him, it will undoubtedly become reality. That will happen as follows: If the German people lay down their weapons, the Soviets, according to the agreement between Roosevelt, Churchill and Stalin, would occupy all of East and Southeast Europe along with the greater part of the Reich. An iron curtain would fall over this enormous territory controlled by the Soviet Union, behind which nations would be slaughtered.
Comment: Not bad, we see Joseph is not the
dumbest from the previous century.
For myself speaking I do not have a clue whatsoever as what will
happen in the years 2060 to 2070.
From the military, political or economical point of view I simply
If my knowledge is correct, climate change will be far more large
because the oceans will transform far more then we know; if the
climate truly starts heating the oceans will release the carbon
dioxide stored within giving rise to a 'doom and gloom'
(06 Jan 2009) And, boring boring, another five items:
Item 1) Congratulations Israel: Only 3 UN
Item 2) Video: Shilling says US housing another 20% to fall.
Item 3) Estimate earnings for the S&P 500 (real funny).
Item 4) The US Federal Reserve minutes; again only blah blah
Item 5) The empty item.
Item 1) Congratulations
Israel: Only 3 UN schools shelled.
Congratulations: 3 UN schools shelled, that
is a remarkable achievement!
For me it is strange to observe how much
similarities there are with World War II, only the Israelis are
this time in the role of the fascists.
A very important detail in this is the
Israeli 'superiority complex' as reflected in the death ratio's.
Another important detail is the official propaganda from the
Israeli government, for example when asked on the
'proportionality' of the attacks the Israeli pm answered (as on
CNN television, so I have no source file):
What is proportionality? When
the Hamas attacks a school, should we respond by attacking one
school? That is proportionality, we don't do that.
Comment: Indeed the Israelis don't do that,
they shell 3 schools instead...
From the military point of view it is also
weird; it might very well be true that the Hamas lobbed a few
mortar grenades, but why aim your tank fire at UN schools?
At best this is utter amateur behavior from
the IDF, at worst these are plain war crimes. As usual there will
be 'investigations' and just as usual we will never hear from it
Comment: The whole problem is that the
Israelis simply have lost all credibility, only when there is
solid proof of Hamas mortars we could believe it is only amateur
behavior from the IDF. For the time being the working hypothesis
is that war crimes are committed, I don't say the Israeli
government orders for stuff like that but it smells like war
There are much more similarities with World
War II, but lets leave it with that.
Item 2) Video: Shilling
says US housing another 20% to fall.
Now gheesh gheesh gheesh; for over one year
(about 14 months) I am constantly telling that US family house
prices will fall about 50% from the mid 2006 high.
Price tag: Only about ten trillion US$
On tech ticker there was a guy named Shilling
who stated that from the present levels US house prices will fall
another 20%. If we add a few years of inflation Shilling is
standing at about 46% decline from the mid 2006 top.
Shilling thinks the house inventory is the
main culprit, he forgets that in the science of economics
everything is related and cause and effect often change
At the end of the video Shilling says that at
the end of the house price decline about 50% of US home owners
will be under water in relation to the height of their mortgages,
this is in line with my own estimations.
Item 3) Estimate earnings
for the S&P 500 (real funny).
We all know that the Americans think they
have the greatest economy in the world, in fact it is a house of
cards with almost no industrial base any more. They live on
borrowed time, on borrowed money and they borrow from the world
reserve status of the US dollar.
On Barry's hangout I found a nice file with
S&P 500 earnings estimations, let me give you a nice (source)
On a trailing one-year basis, that puts the Price to Earnings Ratio (P/E) at over 19 as of today. This does not make the market cheap.
The current projections are for $42.26 for 2009. That makes the forward P/E 22. That doesn’t look like value at all, when the historical average is closer to 15.
In 2001, as-reported earnings were $24.67. Operating earnings in 2002 were $27.57. Does anyone think the current recession will be milder than the last one? Or shorter?
Comment: There are more estimations out there
but all Price to Earnings ratio's hang above long term P/E ratio.
That makes clear US stocks are still far too expensive and it is
also very beautiful: It proofs the US belief in having a 'superior
economy' is still there.
In fact they only have a flexible labor force because of the lack
of social security so large parts of the labor force are working
under their real level...
In the picture below these are the earnings
per 'average share' on the S&P 500.
Item 4) The US Federal
Reserve minutes; again only blah blah stuff.
So often I have argued that the absolute
amounts of debt in the USA are the real problem relative to the US
gross domestic product.
For example the total amount of debt that the
total US financial sector has is far above the US GDP and the
problem is as next:
---Routinely this debt grows a large multiple
compared to GDP growth.
---The debt has to be paid via the profits of the financial
---For a long time the total interest obligations are far above
the total profits of the US financial sector.
Again, for the 384 time or so, just look in
the one before last column in the next link (if European pension
fund managers do not withdraw investments from the USA they are
too dumb to have their job):
It's 17 trillion of debt for a shrinking
sector & what do the dumb European pension fund managers do?
They talk about 'economy stimulus packages' and what that has to
do with their 'investment strategy'. That is dumb as dumb can
Not only the European pension fund managers
are dumb, the Central Bankers from the Federal Reserve are dumb
too. Here are their latest minutes and once more they avoid the
subject of absolute debt levels compared to absolute profit
levels, just read it and you see only people loosing themselves in
details that are important but they avoid the real stuff.
Why this is I don't know, it only validates
you cannot trust Central Bankers.
Once more I would like to congratulate the
Israelis with shelling 3 UN schools!
Keep up the great works! Once more:
What is the difference?
(05 Jan 2009) Today's package of five items:
Item 1) And the (only) goal is....: Stopping
Item 2) International law and the right of self defense.
Item 3) Is it true that Palestine civilians are spared as much as
Item 4) More on the Value at Risk model.
Item 5) The empty item.
Item 1) And the (only) goal
is....: Stopping Hamas rockets.
For two days on a row it is constantly
reported that the only goal is stopping rockets coming from the
So no more wiping out the entire Hamas, but
only stopping rockets...
Lets do a little experiment of thought; how
could the Israelis achieve this via military means? After my
humble opinion this can only be done via carpet bombing; one time
from the North to the South and a second round from the South to
Since there are also rockets stored underground; the carpet
bombing has to reach about 10 feet deep in order to achieve this
goal of 'stopping the rockets'.
Anything less will not stop rockets from the
Gaza strip to land claimed by the Israelis but that ownership is a
little bit in dispute since it was taken after the six day war
& the likes.
Item 2) International law
and the right of self defense.
From pro Israeli folks like the US White
House we constantly hear that the Israelis have a right to self
defense. But under international law, is that true?
The land was stolen, there are all kinds of
Israeli settlements (read lebensraum) and I do not have a clue to
be honest. Is it really true that the Israelis have a right to
For the time being I still doubt this; the
international law folks have never showed some kind of rigid proof
to this. We only have US White House rhetoric on this, but the
White House is a 'neglectable quantity' by now.
Item 3) Is it true that
Palestine civilians are spared as much as possible?
Like said before: With war always comes
rhetoric, propaganda and the projection of 'evil attributions' on
the perceived enemy.
What I forgot to remark, there is always also
projection of 'good attributions' on the own leaders and the own
And so there is a large stream of statements
that 'civilian casualties' are always avoided 'at all costs'.
For example they tell us that the Israeli
army even takes a lot of time to decide to shoot what window in a
building in order to avoid civilians killed below.
For example they tell us that the peace
loving Israeli military makes a lot of phone calls to the people
inside a particular Palestine building before it comes under
Stuff like that is needed to keep the pro
Israelis on the pro Israeli side; this has nothing to do with
vague 'conspiracy theories', it is simply a by product of the
human brain during times of war. (The 'we are good & they are
evil' kind of stuff.)
To put an end to all this crap, just look at
the pictures below. When you see this kind of artillery shell in
action on the television it is even more impressive...
I have never seen a shell like this before;
it is not a cluster bomb but it is definitely an area weapon. And
hence; all that talk of sparing civilians is only utter crap.
Just look on CNN; every now and then these
'civilian sparing' shells come along!
I am sorry for the 'getty images' stuff, but
it was too time consuming to collect logo free pictures when getty
images had it all.
Don't forget: This is an indiscriminate area
weapon & can the Israelis please stop all that crap of 'we try
to spare civilians'? Just please?
Item 4) More on the Value
at Risk model.
Sometimes a war has many fronts while at
other times one front is used for many wars.
For me poking fun at the Value at Risk model
(the VaR model) as used by the financial companies is just one of
the many fronts in the war against the present military axioms.
Facts are facts and in the 'over the counter'
markets there are about 600 trillion US$ in so called 'nominal
value' derivative contracts. The people that buy and sell stuff
like that cannot calculate the value of such contracts with only a
pencil and paper, they need computer programs and simply do what
the program tells them to do...
In general they cannot solve stochastic
differential equations; they do not understand the math to crack
Doesn't it clearly say the banks only post
collateral against the net positions of these multi trillion
Doesn't that clearly proof the banks still
don't understand how to handle risk? With every contract they
should put up collateral and not on the net position of a large
number of trades?
The lady from naked capitalism lately put it
so nice in words:
conditions like this everything gets correlated.
That is a wise insight, others argue that the
VaR model is like and air bag in a car that works perfectly every
day except when you have a car accident.
That is also true, the VaR model uses some
matrix of covariances but inside the matrix is only knowledge of
the 'accident free' ride until now.
Conclusion: Until now banks still do not
understand their own business!
Item 5) The empty
This item is empty; just as empty as the
Israeli propaganda upon 'avoiding killed civilians' is.
In case that is not empty enough for you, you
can read the next wise words from a master of propaganda named
Joseph Goebbles (source),
As the Jews first appeared several weeks ago on the streets of Berlin graced with their Jewish star, the initial reaction of the citizens of the Reich capital was surprise. Only a few knew that there were still so many Jews in Berlin. Everyone suddenly found someone in the neighborhood who seemed like a harmless fellow citizen, who perhaps complained or criticized a bit more than normal, and whom no one had thought to be a Jew. He had concealed himself, mimicked his surroundings, adopting the color of the background, adjusted to the environment, in order to wait for the proper moment. Who among us had any idea that the enemy was beside him, that a silent or clever auditor was attending to conversations on the street, in the subway, or in the lines outside cigarette shops? There are Jews one cannot recognize by external signs. These are the most dangerous. It always happens that when we take some measure against the Jews, English or American newspapers report it the next day. Even today the Jews still have secret connections to our enemies abroad and use these not only in their own cause, but in all military matters of the Reich as well. The enemy is in our midst. What makes more sense than to at least make this plainly visible to our citizens?
Comment: It is a bit naughty from me to post
the above stuff, but propaganda has to be fought with
propaganda... By the way; is there a dress code today inside
Israel to separate the 'true Zionists' from the 'lesser
(04 Jan 2009) Today I was just so tired, so tired of all that
weird reasoning from pro Israel political folks. It is really no
secret my vote goes to the Palestine people (because they are the
ones who's land is stolen) and so I am very willing to listen to
arguments from pro Israeli folks.
All I hear is rubbish, all I hear is crap.
War is in the air: All folks who otherwise
only use logic now only craft logic from their emotions. I get so
tired from the New York major Bloomberg stating that Hamas is like
a 'madman knocking on the door', I get tired of that Israeli pm
stating that 'all cross boards are open, now even more than in the
I am sorry: From the pro Israeli side not one
valid argument was observed, these folks seem to be lost in a
strange forest of landgrabs for free.
The Palestine folks contributed a nice
About 3000 dead or wounded on a population of
1.5 million compares to:
About 600 thousand dead or wounded if the population would be 300
Of course the pro Israeli Bloomberg idiot
will never be capable of making such an extrapolation; the guy
that founded bloomberg dot com cannot add one and one when it
comes to Israel.
Since the present military powers have no
interest in other formats for war & the international
regulation of war, it cheered me up that Barry had a nice file on
future pentagon finance.
The 5 years of combat we have had has aged equipment 16-20 years and acquisition programs cannot keep pace and they are unfunded at even that level. For example HUMVEES were programmed for 8000 miles per year. The current inventory in the past 5 years has surpassed the 20 year life of the vehicle (i.e. the average is in excess of 150,000 miles). The vehicles replacement is due in 2014, but is expected to slip to 2018.
Conclusion: What the next administration does with regard to force structure and force missions will have a significant impact well beyond the 4 or 8 years that they will serve. DOD needs to be an active player in that discussion and each Service needs to make significant adjustment immediately.
Comment: Nice to observe even the HUMVEES
On Barry's file another source file was
And from slide number 32 we have the next
Comment: It is very seldom and extremely rare
to observe 'pro Democrat' and 'pro nigger' comments from the US
military. But if you understand the funding of the US military a
little bit it even makes sense.
There is only a little problem unsolved: Every body thinks Obama
is such a smart guy but Obama thinks one trillion more debt in the
form of a 'stimulus package' will repair the US economy.
It remains to be seen if that is correct (in fact it is nonsense;
economical stimuli only work from savings but the USA has no
savings beside belly fat).
Lets leave it with that;
(03 Jan 2009) Like expected the ground war against the Gaza
strip has started, so all I can do is wish the Palestines good
Think well, fight well &
hopefully live well afterwards.
It is interesting to see what the actual
objectives (the goals) are, it looks like the Israeli political
leadership is a bit confused on that. Depending on who says it, it
varies from wiping out the entire Hamas to only stopping the
When the objectives of the Lebanon invasion
were simply not met, the Israelis still declared 'victory' after
that adventure. The Israeli political leadership only made big
fools of themselves declaring victory; just remember those
investigations about what went wrong & stuff like that: Olmert
micro managing the war from his 'war room' and laughable stuff
From the White House we have a tremendous
good insight from US prez Dubya about ever lasting peace to come (source),
President George Bush said in his weekly radio address that Hamas must take the initiative to end the fighting by halting its rocket fire into Israel.
Comment: As so often with Dubya, it is just
to plain stupid to make even one comment on it. But it is
interesting to observe that after 8 years of taking zero
initiative by the White House, it is the Hamas that is supposed to
take the initiative.
On the television I observed the Hezbollah
leader calling for a third intifada; that is good news but I stay
with my advice to wait until Palestine death toll stands above one
thousand. Of course a third intifada has to be effective and I
truly hope the Hezbollah and also Iran throw in some big coins
Iran must not forget they were the main
target all these years...
Beside this the Fatah is stating they want to
fight together with the Hamas (source),
In a Saturday interview with Press TV, the faction's spokesman, Abdullah Abdullah said that the group would support Hamas fighters in case Israel launched a ground incursion into the coastal sliver.
"We are standing solidly behind all our resistance movements from various factions in Gaza. We are taking part and we are a sizeable presence in Gaza. This ground invasion must be destroyed," he said.
"We are calling on all our members in Gaza to get back their weapons that was confiscated from them so they would be able to join publicly and openly not only relying on whatever pieces of weapon that we have which is not that effective," he added.
Comment: Of course the Hamas has to decide
for themselves, but it is not the strangest of ideas to hand back
That's it for the time being, think well
& fight well me dear Palestine people...
(30 Dec 2008) Five items:
Item 1) Israel: A nation of whiners?
Item 2) Case Shiller housing fun: Another 5+ trillion to go...
Item 3) WP on AIG: The beautiful machine.
Item 4) Wall Street gains as GMAC gets financing.
Item 5) The empty item.
Item 1) Israel: A nation of
At a first glimpse it looks a bit strange;
the Jews as a cultural and religious group are supposed to have
lost up to six million people in World War II. So you might expect
the survivors having some backbone and most of all: some better
insight in social and political processes.
But today with every interview I did see on
the television, there was only confirmation that they are only a
nation of whiners. All we miss is that living near the Gaza strip
is 'just as bad' as Buchenwald or the likes.
A point completely missed by these whiners is
the fact that they live on the land stolen in the landgrab from
after the six day war, with that come some costs you might think.
So not the Israelis, they want the Palestines to rubber stamp the
theft of land.
Generally speaking with war come always at
least the next things:
Rhetoric, propaganda and lots of 'evil projections'.
Evil projections is the process of contributing criminal and evil
behavior to the perceived enemy.
Let me give you an example of 'evil
projection' I observed today:
The Hamas are double criminal because not
only did they build their 'power structure' (police stations and
stuff like that) inside the population, they also hide amongst the
This is so fucking stupid; as if the Israeli
police stations are always far out of towns and villages and as if
Israeli military folks were never to be found inside civil area's.
You see: This is a clear case of dumb whining.
Another example that the Israeli whiners
constantly pop up:
The Hamas fires rockets at civilian populations with the intend
of killing them.
This is so utterly dumb; would the Israelis
allow the Hamas having the latest GPS rocket technology so they
can pinpoint on military installations?
I am very sorry; but the entire Israel is
only a whiner nation at best.
Item 2) Case Shiller
housing fun: Another 5+ trillion to go...
Today the Oct 2008 Case Shiller house value
index came out; it proofs that we are still not halfway the
decline in US family house prices because the speed of the price
decline is still accelerating.
As far as I know reality, the graph below is
not adjusted for inflation (click on the picture for a larger
The most stupid statement I observed today on
the business channels was as next:
"At the moment
house prices bottom out in decline the stock markets will boom,
there is a whole lot of money sitting on the sidelines waiting for
this to happen."
I will not deny there is still plenty of fake
money backed by nothing sitting on the sidelines, but the second
leg of the house price decline will bring much more havoc to the
economy. Let me name only one:
Compared to the first half, in the second
half much much more mortgages will go under water driving up
foreclosures and thus the unsold house inventory.
When about one year ago I calculated (or
estimated) that overall US house prices will decline from the top
in mid 2006 by something like 50%, I was thinking a lot of
Americans could do the simple to understand calculations too...
Until now this is a bridge to far for the
average US analyst, but on a website named clusterstock we have at
least this (source)
House prices plunged again in October, with the rate of year-over-year decline accelerating to a new record high of 19%. The peak-to-trough decline in the Case Shiller 10-city index is now 25%; the 20-city index is down 23%. (Full release below).
We still occasionally hear folks predicting that the overall house-price decline might be on the order of 20% or so--or maybe 25%, tops. Might be time to adjust those forecasts. Given the current rate of decline and the fact that house prices still have yet to reach their long-term historical average relative to incomes and rents, we remain comfortable with our prediction of a 35%-40% total decline. Unless the rate of price decline moderates soon, this could even prove conservative.
Comment: My estimation of a 50% decline was
also a conservative estimate based only on the Case Shiller index
and the development of median income in the period 1996 - 2006. We
will see in the future who is the better analyst my dear
All in all: there is still over 5 trillion
US$ to go before reality will set in on the average US home
Item 3) WP on AIG: The
The next two links are both a long read, the
more you know on haute finance the more fun you will have when
reading it. Never hand out nukes in kindergarten to play with my
dear fellow scientists!
The Washington Post has done a good job in
this! (Yes, it is not all crap that is coming from the USA...)
Today the DOW Jones was up over 2%, you can
think of a wide array of reasons as why this should be, but on
Yahoo finance it was so cute in it's dumbness...
They think you can 'short cut' the recession (source)
NEW YORK (AP) -- Wall Street staged a big advance in the next to last session of 2008 Tuesday after Washington's latest lifeline to the auto industry bolstered hopes that the government will do whatever is necessary to cut short the recession.
Comment: This is so stupid I just cannot
comment on it.
Item 5) The empty
Empty empty empty: Is Israel truly a nation
of whiners? Are they truly smart at Yahoo finance? When will US
house prices bottom out? How much US dollars are coming from the
printing machine & how much comes from rock solid US
I hope this item is empty enough for
(29 Dec 2008) Just two items:
Item 1) Palestine equation: 2 Israelis dead
and guess what?
Item 2) The most stupid predictions for 2008.
Item 1) Palestine equation:
2 Israelis dead and guess what?
For a relatively long time it is more or less
constantly in the news: In Southern Israel they live in constant
fear because of the rockets coming from the Gaza strip.
Yes you read that right: They live in
In traffic large multiples of death and wounded are there but the
Israelis do not fear traffic but the occasional rocket from the
Gaza strip is the deepest of horrors for those tar souls...
A far more down to earth explanation for the
military actions is the fact the Israelis cannot attack Iran in
the end days of the US Dubya regime, so with the impending Israeli
elections it looks logical that the present Israeli government is
appeasing the right wing 'blut und boden' part of the Israeli
Lets prop 60 years of history into a
--After World War II and with the wisdom of
hindsight, the international community made a big fault by
allowing an Israeli state. They thought it would do just to the
Jews and for the rest they did not think that much.
--We had the 'six day war', the Israelis won rather good and
conquered lots of new land.
--Since that time the Israelis try to force the Palestines to
recognize the landgrab as being the 'new borders'. That policy has
not worked for over 40 years but the Jews do not bother about a
few decades more or less.
So far for 'history in a nutshell'.
Lets put the present days in a nutshell too:
--Some Hamas leaders have spoken about a
--The Lebanon Hezbollah spoke words like 'We are ready'.
-- Does Iran understand they were number one on the Israeli
What can I say?
I think a multi year third intifada could be
wise, but better wait for the death toll standing above one
thousand. When there are over one thousand Palestines killed
compared to just a hand full of Israelis, it is clear who are the fascists
and who are not.
Like said before: I hope that there are more
nations willing to help and in case the Hezbollah can lob a few
rockets I only hope the rest of the Lebanese will not act as
'girlie men' on that small detail.
Iran could lob a few things too, if the Iraqi
political leaders refuse help to the USA & Israel there could
hardly be any problem. After all, the Israelis tried for years to
get some military action against Iran so this is only 'protecting
So far for the military stuff for this
Item 2) The most stupid
predictions for 2008.
Beside military stuff there is also financial
Financial stuff is lovely stuff because it
rams away the financial footing of 50% of the entire world defense
Let me recall it once more:
After my humble calculations as drawn from
the US Federal Reserve files in Nov 2007, the US financial sector
needed about 2.5 trillion or 2500 billion US$ in order to do
'business as usual'.
Of course such an amount of new debt would
not be available and so it was rather logical that there would be
a tidal wave of bankruptcies. That was what I understood and that
was what I made of the files of the US Federal Reserve.
How did the Federal Reserve sail on this
Let me quote from a 28 Feb 2008 file where
the wisdom of US Federal Reserve chairman Ben Bernanke is exposed
"I expect there will be some failures," Bernanke told the Senate Banking Committee, referring to smaller regional banks who became heavily invested in real estate.
"Among the largest banks, the capital ratios remain good and I don't anticipate any serious problems of that sort among the large, internationally active banks that make up a very substantial part of our banking system," he said in response to a question during semi-annual congressional testimony.
Bernanke's remarks hit U.S stocks, pushing losses on the Dow Jones Industrial Average .DJI to around 1 percent.
Big U.S. banks have already raised billions of dollars of fresh capital to make good on losses on subprime mortgages, often by tapping foreign investors. Bernanke said that he hoped this trend would continue in order to bolster lending.
"They have already sought something of the order of $75 billion of capital in the last quarter. I would like to see them get more," Bernanke said.
Comment: In Nov 2007 I understood it would be
different, until now I have not observed only one quote from Ben
that shows he understands the real troubles. That is amazing but
it is also a fact. Just like Alan Greenspan this is just another
idiot, by the way: What US administration appointed this
(28 Dec 2008) Since we now had the most bloody days in the 60
year Palestine equation and since the most mighty political and
military forces try to shine a light on their insights in this
all; why not look at rhetoric & propaganda?
After that we look at 'how to measure' reality via chaotic media
Lets start with:
What is rhetoric?
The dictionary says it is 'hollow bombast'
but what does that mean?
An important example of rhetoric is found in
all those years where US political leaders declared that the
'economic fundamentals are strong'. They never explained,
journalists routinely never asked and indeed it was nation wide
Another fine example is Ben Bernanke stating
in 2005 or 2006 that the high US house prices 'are merely a
reflection of a strong economy'. Hollow bombast means more or less
hollow & dumb (merely reflecting real insight is
What is propaganda?
It is the same as rhetoric in the sense it is
hollow, but it is crafted by smart people. Another important
characteristic is that the propaganda writer is capable of playing
with the emotion of the public.
In some corners of this planet it is well
known a German guy named Joseph (what's in a name) Goebbels was
very good in writing that stuff.
In case you have never read it, here
is a nice collection of that stuff.
From one of the files of that collection (I
have chosen a part of 'unser Hitler' from the year 1945) let me (source)
Is there a single German who disagrees? After six years of battle, could our people debase itself so low as to forget honor and duty, surrendering in the turmoil of the moment its holy and inalienable right to its great coming life for a pot of soup? Who would dare suggest that? Who holds us in such contempt that he believes that now, just as we stand before the final and decisive round of the war, we would be untrue to all our sworn ideals, that we would throw all our hopes for the future of our Reich overboard, giving up in the midst of the confusion of misfortune that has overcome us on ourselves, our land and people and the lives of our children and children's children?
Comment: Will you give up your Holy land for
a pot of soup?
Playing with emotion is an integral part of good propaganda.
You can overplay or underplay the emotional thing; for example the
Israelis explain that they are forced to kill up to 300 Palestines
in just two days because 'they give us no other choice'. (With 'no
other choice' they mean there are a few Israelis with a broken
finger nail or so.)
How to measure reality?
Of course anyone can do the Google thing and
so can I.
"Long, long lists of drugs and other medical supplies which in the U.S. would be considered standard in any hospital -- they're just not available in Gaza," he said. "When people have been turning up for treatment following this massive attack, they are simply being turned away. If you've got things like shattered limbs, broken arms, broken legs, feet blown off, that kind of thing, you're simply not being seen. If you've got very light injuries and you need bandages or aspirins, you'll get seen."
The United Nations Security Council held a four-hour emergency meeting early Sunday on the situation, ending with a call for an immediate halt to violence. The council also called for a reopening of border crossings to allow humanitarian supplies to reach those in Gaza.
Comment: This is nicely in line with the
hospital pictures as shown, for example, on CNN. Where is all the
Beside this, I almost know nothing of international law, but for
so long withholding elementary medical supplies to the Gaza strip,
does that not fall under some 'crime chapter' or so?
It is well known: for a long long time the Israelis are choking
the Palestines with the silent support of the Dubya regime.
And international law? It stays silent and the cowards whisper
'God thank we have Obama'.
(27 Dec 2008, temporary update) Only yesterday I published the
next paradigm shift: When I am through with the Pentagon, I will
go after the Israeli IDF & I hope a few nations will help me
Only today the IDF started doing her thing,
latest reports are about 190 killed Palestines, as usual the
killed children are 'regrettable' because they were not 'the
This update is for the IDF only and I would
like to keep emotion out; lets look at some easy to understand
statistics to understand who is the aggressor and who is
During the second intifada in the long run
there were only about two or three killed Palestines for every
The second intifada ended and overall
killed numbers declined, but as far as memory serves, in
the last year the ratio of Palestines killed to Israelis stood at
a strange 13:1.
So during 'peace time' 13 Palestines died for every Israeli...
(I don't have the source files after so long, sorry.)
So beside all that rhetoric from the
political folks, the IDF is allowed to ponder the question who are
the peace doves and who are the true aggressors?
The numbers don't lie my dear IDF: From a
ratio of 2:1 to 13:1 it is not in your benefit.
Lets leave the IDF with that and enjoy some
perfect Joseph Goebbles propaganda (source):
* Israeli Foreign Minister Tzipi Livni, who hopes to defeat right-wing hawks to become prime minister in an election in February, has said the rule of Hamas in Gaza must be ended because the Islamists will never make peace with Israel.
Comment: Please my dear political leaders,
please leave all emotion out only to observe Joseph Goebbles would
be proud with propaganda like that. Reasoning like that is
nonsense reasoning, as if the problems started with the Hamas...
No, this kind of logic is only 'Joseph Goebbles' logic; the
Israeli political leaders are invited to cough up some better
Again: leave that stupid emotion out please.
(26 Dec 2008) So the Christmas days are over, yesterday during
some family visits I was even forced to watch a movie named 'Lord
of the Rings'. Now wow that was some revelation; there was an old
guy with white hair and a white beard riding on a white horse and
every time you needed a new army the guy simply pops it up!
His name was Gandalph or so, I think we
should ask him to become the next Dutch minister of defense. We
might have NATO membership but because we are such a small nation
it is not unwise to prop up some other armies when this is needed!
Yet serious, lets look at a few items:
Item 1) Macro Man on US household wealth
Item 2) The fairy tale of deleveraging.
Item 3) Madoff scandal counter: 36 billion & counting.
Item 4) Jesse on more Ponzi schemes.
Item 5) The empty item.
Item 1) Macro Man on US
household wealth decline.
Via Macro Man the next nice graph was found,
since it comes from the Macro Man I simply trust it without any
The timescale of the graph is 55 years and
depicted is year on year US household wealth growth (or as lately
wealth decline), it is obvious you have to subtract inflation from
At the right of the graph you see that year
on year wealth decline is over minus 10%, that amounts to six
trillion US$ a year and it will only get worse.
Click on the pic for a larger
It will only get worse, I can promise you
Item 2) The fairy tale of
Even folks that normally have their stuff on
order sometimes fall in the trap:
US and European banks are supposed to be in a
process of down leveraging.
For example the girl from naked capitalism
lately said between nose and lips: Former investment bank XYZ has
deleveraged from 30 to 11 just like a normal commercial bank.
Lets poke a bit of fun:
There are many ways to measure leverage, one
of my favorites is total assets divided by total market cap.
Suppose a bank stands at 30 with this kind of leverage & all
other banks are 'deleveraging' too. So they can only sell at, lets
say 70 cents on the dollar.
Suppose one of those investment banks goes
from 30 to 29 in a particular Quarter, so they sell one entire
market cap in assets at 70 cents on the dollar.
The brave folks report (lets say stock stands at 10 US$) a 3
dollar loss for every stock...
And this for a leverage of going down from 30
Of course in the USA, often on channels like
CNBC, they parade these guys that state that banks 'are in the
process of deleverage'. It's a fairy tale, just like most of the
other fairy tales coming from CNBC & the likes.
You must not forget that the goal of getting
rid of this leverage is to bring down the debt these banks have,
so lets look at a nice screenshot from the US St. Louis Federal
You see: there is no credit crisis for the US
commercial banks, they can get plenty of credit...
There is absolutely no decline in leverage;
welcome in the leveraged fairy tale world of CNBC (where they
never show you difficult to understand graphs of course).
The good thing about the Madoff pyramid game
is the fist in the face of a lot of rich folks. It gets really
funny when you scroll down the table to observe that the Madoff
Family Foundation has also lost 19 million US$...
It makes you wonder: Are there even bigger
non government Ponzi schemes out there?
Item 4) Jesse on more Ponzi
The last updates from Jesse (from the
CaféRoadCrossingStuff) suggest he is after bigger Ponzi schemes
like the US government bonds (how to pay that back) or the stuff
in the commodity markets (I have written about that before, but
strangely the commodities do their thing in protection for the
Comment: As usual the European pension funds
will not act on stuff like this, the idiots still don't understand
US government bonds are not the most wise investment, let alone
all that other weird US finance stuff.
For example the index of future payouts of
the Dutch pension funds stood a long time above 110, now it stands
at 85 or so.
Since after all these years I am still
unemployed, suppose what would happen if I would send a letter for
'do you have a job for me' to one of those local pension funds?
Very simple: 'We do not need your qualifications'.
For me this is fun, let the mental dwarfs do
Item 5) The empty
To the Israelis: I am not satisfied about the
way you behaved towards the democratically chosen Hamas government
of the Palestines.
From the democratic viewpoint you simply made 'eternal sin' so
after I am through with the Pentagon,
after waiting so long to write it down:
You are next on my shortlist.
(Lets hope I will get some serious support
from the neighboring nations, I don't count on it but I hope for
Item 1) Bad news: The VIX panic indicator is
Item 2) Good news: Toyota reporting trouble for the first time in
Item 3) Tech ticker: Madoff puts the noose on Fund of Funds.
Item 4) More on Benford's law.
Item 5) The empty item: scorpions in your mouth.
Item 1) Bad news: The VIX
panic indicator is declining.
Indeed as every one might have noticed, the volatility
in the stock markets is going down. No matter how much bad
economical news is there, the markets hardly react to the news.
Of course there is a wide array of
explanations about why this is, some say that investors are beaten
so heavily they just don't react to the news like a boxer that is
going down. Others say this is a clear proof of a bottom in the
markets so after this everything will be normal again &
predict gigantic booms.
VIX is now down to about 40, what a pity.
Shall I throw in another bombshell or wait for next year? Of
course I wait for next year, a 'good start' of the year is always
Prior to the credit crisis this year, a VIX above 30 suggested a high level of volatility, and 40 was indicative of a sharp recession.
But with the collapse of the credit markets and the ubiquity of options trading, the VIX soared past 80 at one point in the crisis, suggesting to some that the gauge is not as reliable as it once was--or at least that a paradigm shift has occurred and 80 may be the new 40.
Comment: No comment.
Item 2) Good news: Toyota
reporting trouble for the first time in 71 years.
Just last Friday the White House gave the
green light to the first rescue loans for the US automobile
industry. And just a few days later the supposedly best car maker
in the world, Toyota, gave it's second profit warning in just a
No link, no quote given.
I only want to remind the dumb debt huggers
from the White house to the situation just a few years ago:
On a massive scale the US car makers started
offering loans to US consumers, so beside cars the car manufacturers
sold loans for these cars...
Industry observers often stated that with this the entire US auto
industry had revitalized itself and other industries should take
an example of that.
As usual the debt huggers from the White
house did not understand what was happening... Year in year out
they reported 'fantastic fundamentals' of the US economy while of
course forgetting to mention what these fundamentals actually
Item 3) Tech ticker: Madoff
puts the noose on Fund of Funds.
Another fundamentally fantastic industry in
the USA is the hedge fund industry, these are so called 'smart
investors' and compared to other economies the Americans seem to
be much smarter.
Beside normal hedge funds there are also
'fund of funds' around, of course these are even more smart
because they have much more diversified portfolio's.
On tech ticker they poke a little fun on
those mental dwarfs in relation to the 50 billion US$ ponzi scheme
from monsieur Madoff:
In the previous update from two days ago I
suggested four uniform distributions in the exponent and if you
generalize that a bit it is reasonable you can solve most 'Benford
like' questions inside finance or physics.
But I felt challenged into identifying the
characteristics of all distributions that give rise to Benford's
Please remark that when you draw a number
from a Benford distribution the probability that the number starts
with the digits abcd is log(1 + 1/abcd).
There is a 'fundamental solution' that covers
the entire real line:
Let Xn have a uniform distribution
on the interval [-n, n]
If we use the 10 base decimal system of
writing down numbers, Y := 10X for every n follows
exactly Benford's law and all other base systems follow in the
Little problem: When we take the limit of n
going to infinity, the standard deviation follows suit. So for the
time being there is no 'fundamental solution' for the entire real
It is only two days ago when I observed the
possible scale of the problem, colleagues in math know it often
takes 3 to 6 months to crack only the start of the solution, but I
think that an important boundary condition is the next:
Theorem (no proof given, I have no proof):
Let Y have a Benford distribution, so in all
base number systems with base m we have the starter digits abcd
logm(1 + 1/abcd)
And we form the new variable X := logY (base
Then the derivate of X is zero almost
Item 5) The empty item:
scorpions in your mouth.
According to the BBC:
And in a shopping mall in Thailand, Nong Na sets a new world record by holding a scorpion in her mouth for over two minutes.
Comment: Her mouth is empty, but why are her
teeth that yellow?
(20 Dec 2008) At first today I wanted to write a good rant
against all those idiots that declare for the television that the
deleveraging at the US banks is well underway & also a rant at
all those media outlets that put it in their programs.
It is rather easy to proof this is not the
case at all; may be 25 cents here and 50 cents there go from the
balances, but that's it.
No, I decided to dig a bit deeper into the
Benford's law because in a previous decade I have done my own
calculations and never ever checked what the fellow colleagues
have written on that detail.
In the wikipedia article you can find a few
good remarks that exponential growth will always give the simple
Benford's law (the fact that in numbers from nature the leading
digit d of a number will always have probability of log(1 +
For the math less skilled but interested in
how you can use Benford's law to detect financial fraud, a good
starter might be this file from 1999:
A few days back I already remarked that the
likelihood of a number from nature starting with 911 is log(1 +
1/911) and my American colleague in math Theodore P. Hill
published in 1995 an article with the title:
We get what the title promises: A statistical
derivation and not a analytical proof, so we have to eat a lot of
complicated Borel sets and measures.
For me that was hard because I did not recall exactly what Borel
sets were, but all in all this was not a bad article.
`Here is a nice starter result:
Speaking for myself: I felt challenged to
think about the criteria that give rise to Benford's law; what
probability distributions do and what doesn't?
Identifying those who do is simple, just a
Let the stochast X have a uniform
distribution on the next real intervals:
In each instance form the new stochast
Y = 10X
In all cases there is perfect
fit with the Benford law...
Do you already see what you can do to the
exponent distribution in order to preserve the Benford law?
I hope, my fellow colleagues in math, you
(19 Dec 2008) Flip man, today I failed in finding one of those
US economists to thrash.
About an hour ago I thought 'Lets nail down
one more US economist to the thrash bin' and so I went to the Cato
dot org, in the past I have read very stupid publications from
Cato and even some of the Central Bankers from the USA visit that
Dumb as I was, only the second article looked
like it could be from a thrashable economist.
Little problem: The article was rather good,
the insights offered were not of superior quality but it is a far
cry from thrash.
Sometimes a picture paints a thousand words
and sometimes one words paints a thousand pictures, lets look at
the picture of the US credit triangle:
Of course as a scientist I am always very skeptical,
but if shadow stands at 14 trillion in assets with almost no
reserves to cover damage to that vibrant 14 trillion, life could
Until now I only knew total shadow balances
of the commercial banks more or less equaled their non shadow
balances, if you add the investment banks the 14 trillion could be
Completely new for me, quote:
Banks and other financial institutions outside the US accept US dollar deposits, issue dollar-denominated debt and make dollar- denominated loans and investments. This segment does not hold reserves at the Fed and is more leveraged than its onshore counterparts.
At $39 trillion, it is large and important. Indeed, it plays a critical role in supplying credit (letters of credit) to those who engage in international trade.
Comment: If this quote is true, this explains
the troubles in international trade with the letters of credit.
The letters of credit are century old bank practices and all
reports until now only say these are cumbersome practices with a
lot of work that bring almost no profits to commercial banks.
Again: if the quote is true I am beginning to understand why the
letters of credit have become a hinder in international
One before last: The US gross domestic
product is also like 14.5 trillion, just as the gross value in the
upper layer of derivatives fun. The 'gross' value is what it costs
to buy all these contracts, the nominal value is what it costs to
pay for all of these if they were all 'in the money'.
Needless to say: 14.5 trillion is just 2.4%
of 596 trillion, so a small ripple of just a few percent in the
596 trillion fantasy world wipes out an entire USA gross domestic
Welcome to the world of Alan Greenspan and
Jean Claude Trichet; folks like that are responsible for stuff
At last: So I cannot trash Steve H. Hanke (a professor
of applied economics) at the Hopkins university.
The Hopkins university? Wasn't that
university one of the roots of this
file (about Iraqi so called excess death toll)?
Not much of a miracle Steve is not trashable...
Not much of a miracle...
(18 Dec 2008) Today I would like to look at an 'accountancy
thing', so we have only one item & I can assure: You will find
it a very boring item.
Sometimes companies who get into trouble find
wisdom in placing future earnings on today's balances. These
companies often argue that since the 'future earnings' are almost
'100% sure', what's the problem of taking a small part of that on
the present balance?
Not amazingly, accountants who have to sign
for the health of the present balances sometimes have a little
problem with that.
As a dual to placing future earnings on
today's balances you can also place (more) present debt on the
balances of the past.
The 'accountancy' benefits are huge:
When you borrow today another billion US$ at,
lets say 5% interest, you need to cough up 50 million a year to
pay for the interest.
If you manage to place this loan not in this
boring year 2008 but in 2003 you can show a 250 million US$ in
profits to your accountant as long as that idiot is not aware of
the fact you transported the present debt to the past.
I mean this form of time travel is very
solid: The loan was made today so it is impossible that weasels in
the past eat away only one buck from your 250 million in 'already
paid' interest obligations. You place the 250 million in some
other stuff, the accountant grabs the calculator and concludes: The
figures add up.
If you understand the above, you can also
understand why the US Federal Reserve is 'transporting debt to the
past'. Enjoy the two updates to the last entry to the Nightmare
Item 1) The answer to the comma question.
Item 2) The US Federal Reserve reaching to the whore rate of 0%.
Item 3) Dynamite fun in Paris.
Item 4) The Hamas turns 21 years of age; congratulations!
Item 5) The empty item.
Item 1) The answer to the
In the previous update I asked you to think
upon a very simple math question:
Take the number 10, grab the comma or decimal
point at the end of this 10 and place it exactly halfway inside
What value does it have?
The answer is very simple: If placing the
comma one position to the left is the same as dividing by ten,
moving the comma a half position gives the square root of 10 as
the answer. (In the 10 based digit model of writing down numbers a
replacement of a half correspondents to multiplying/dividing by
the square root of ten because if you do this two times you
replace by 1 position.)
Item 2) The US Federal
Reserve reaching to the whore rate of 0%.
In capitalism, when a Central Bank declares a
0% rate policy this is nothing but a whore policy contradicting
money as being a store of value.
About 14 centuries ago in a country far far
away a guy named Mohammed slashed interest rates to zero forever,
until this day his followers hang on to a zero interest
For al Qaida & the likes it must be great
fun to observe US FED chairman Bernanke bowing for the wisdom of
Not only did Bernanke bow, his entire team of
12 Federal Reserve chairmen did bow because the rate decision was
Item 3) Dynamite fun in
Funny news from Paris: In a famous department
store five packages of dynamite were found without detonators.
Previous some press agency (likely the AFP =
Agency France Press) received at letter with details like 25 bombs
and (of course) it was related to military affairs because France
is pumping up her presence in Afghanistan.
Needless to say the number 'five' is somehow
a basis of the fun & needless to say the local authorities
will deny that. Local authorities constantly stick their heads in
each others asses only to declare 'wow what a great smell around
here, lets turn it into perfume'.
Lately we also had some Belgium message and
again that message was purely related to military affairs & of
course our responsible leaders neglected that.
On the contrary; our Dutch main anti terror
leader stated that the Netherlands were high on the terror ranks
because of the political slime named Geert Wilders...
You just don't believe it: It is not that the
Netherlands has political leadership inside
the NATO but it has to be mental dwarf Geert Wilders.
Item 4) The Hamas turns 21
years of age; congratulations!
The democratically elected government of the
Palestines celebrated a few days ago they were formed 21 years
Lets post some history insights:
From history we know that powerful yet
corrupt countries have a tendency to work together. Example from
World War II: Germany, Italy & Japan were the 'axis nations'.
Once you understand how that works (because
there are similar levels of corruption in those countries,
individuals from these nations 'speak the same language') it is
refreshing to look at present unfolding of history:
The fundamentally corrupt USA supports the
Israelis because they 'speak the same language'. Christianity has
a lot to do with it because they think the Israeli regime
represents the 'Holy Land'. The USA is so corrupted, they even
corrupted religion, but this is their problem and not mine.
A small small size of USA corruption was
exposed via the multi billion Madoff scandal: Lots of Jewish
organizations in the USA got an extra hit.
Let that be my birthday gift for the Hamas:
Corruption cannot win it from you!
Item 5) The empty
Empty empty empty; as usual use your own
(14 Dec 2008) Only two items today:
Item 1) Finally the Google prank makes it to
Item 2) Accountancy, fraud & the Benford law.
Item 1) Finally the Google
prank makes it to the media.
I don't recall when I reported it for the
first time, it must be over one year at most two years, but Google
is cooking the search results.
For years we were supposed to believe that it
was the superior search algorithm that gave Google it's sway over
the competition (and in the beginning this was true) but at the
moment Google had done her IPO, a lot of that was in fact human
I know this because my own brother has worked
for Google (not directly but via via of course), he worked from
his home and got long lists of search items.
For every search item he looked at the websites as they popped up
and rated the websites with something like five rates from 'very
good fit' to 'not rateable'.
Most investors who bought Google at lets say
600 US$ a piece of stock never knew it was in fact human labor and
not superior math...
Well it's finally out, via the Drudge report
I found the next (source),
Google this week admitted that its staff will pick and choose what appears in its search results. It's a historic statement - and nobody has yet grasped its significance.
Not so very long ago, Google disclaimed responsibility for its search results by explaining that these were chosen by a computer algorithm. The disclaimer lives on at Google News, where we are assured that:
The selection and placement of stories on this page were determined automatically by a computer program.
Comment: Very interesting to observe it takes
such a long long time for stuff like this to pop up. This also
explains why the Google results for this website are so utterly
When via USA channels I search for 'Reinko
Venema', this website pops up nicely at number one.
Via local channels a Google thing gives that
even Reinko Venema's who are dead over 100 years easily win it
In short: Google search has become a fraud in
many instances. All we need is that you can pay Google for popping
up higher (I offer 25 cents to win it from 100 year dead Reinko's,
this without any disrespect for my forefathers of
Item 2) Accountancy, fraud
& the Benford law.
Last week we had that nice Ponzi scheme in
the USA, until now reported damage is in the range of 17 to over
50 billion US$. Beside the size also the time it lasted is
extremely long; only because there are all these hedge fund
redemptions this Ponzi scheme came out.
Of course there are a lot of people shouting
'why was this not discovered much sooner? These people simply do
not understand how deeply rooted corruption is inside the American
society; once a critical corruption threshold has been taken all
regulators are turned into lame ducks. Let me spare you a long
long list of elementary examples.
Inside the art of accountancy there are some
methods to detect fraud, a lot of them only revolve around the
detection of spikes. So if you are in a position of fraud, don't
make 15 payments of exactly 4000 dollar but vary the payments in
size, don't round off but also pay cents (like 3837.27 dollar).
If in your company payment size 3750 comes in frequently you can
try to use that one if you use the codes that come along with
Anyway, avoid spikes!
Besides the number 1 consistently appearing about 1/3 of the time, number 2 appears with a frequency of 17.6%, number 3 at 12.5%, on down to number 9 at 4.6%. In mathematical terms, this logarithmic law is written as F(d) = log[1 + (1/d)], where F is the frequency and d is the digit in question.
If this sounds kind of strange, scientists Jesús Torres, Sonsoles Fernández, Antonio Gamero, and Antonio Sola from the Universidad de Cordoba also call the feature surprising. The scientists published a letter in the European Journal of Physics called “How do numbers begin? (The first digit law),” which gives a short historical review of the law. Their paper also includes useful applications and explains that no one has been able to provide an underlying reason for the consistent frequencies.
“The Benford law has been an intriguing question for me for years, ever since I read about it,” Torres, who specializes in plasma physics, told PhysOrg.com. “I have used it as a surprising example at statistical physics classes to arouse the curiosity of my pupils.”
Comment: At first this looks a bit strange,
for example when rolling dice you expect the numbers 1 through 6
to pop up in similar numbers. And since our numbers always start
with one of the nine digits 1 through 9, why do they behave
In a previous decade I solved that puzzle
myself and within a few minutes I was able to calculate the
likelihood of, for example, a number from nature starting with
The likelihood is log(1 + 1/911). (The fixation in Benford's law
on only the first digit is a rather dumb one).
My conclusions were:
1) When you have no clue about the size of a
number whatsoever, this gives rise to a uniform distribution in
2) When you take it to the limit, this
distribution in the exponent is the inverse of a delta function.
(As far as I know there is no uniform distribution on the real
line, I know of no math that uses the inverse of the delta
function. Let me spare you the technical details...)
3) Our way of writing down numbers compares
to a primitive form of taking the logarithm (when a number is ten
times as large you need only one more digit). Without being able
to proof it: there are no better ways to represent numbers then
what we have right now. In that sense Benford's law is a
consequence of how we write down numbers...
For my colleagues in math: Today I came
across the next file that is chapter 34 from a thick book. It
isn't the sharpest analysis on Benford's law but the guy Steve
Smith takes Fourier transforms (of course some convolution
products) and he comes remarkably far with that!
Let me quote from page 17 of that 22 page pdf
This last result
is very surprising; the mystery of Benford’s law turns out to be
nothing more than distribution width.
(12 Dec 2008) Bored bored bored, I don't know why but I feel so
Luckily at the end of this boring day I found
two video's that cheered me up a little bit.
On Charlie Rose dot com is a 1.14 min video
with Nassim Taleb.
In case you don't know it; Nassim advices something like the Black
Swan Fund, this fund looks for rare events that fall outside the
risk modeling of standard banks / brokers / the likes (you know;
those fat folks that are bad in math and even proud to be bad in
Right now the Credit Default Swaps of US
government bonds stand at 64 pips, these are expensive contracts
because you need 64 thousand US$ to buy one.
If the US government defaults on her debt, you get 10 million US$
Remark 1: The sellers of these kind of
contracts do not post enough collateral to pump up the volume to
10 million so better buy such a contract outside the USA if you
Remark 2: Only 64 pips means 0.64% likelihood
a year on US default so that is a once in 156 years event (anyway
that is what the CDS sellers think...).
In another development a 50 billion US$ Ponzi
scheme came to light (for the locals: a Ponzi scheme is a pyramid
game in local speak). The reported profits are only the last laid
For me it was very amusing to observe the
Tech Ticker folks making fun of all those who lost big money, even
described how a Ponzi scheme works, while at the same time still
not understanding their own financial system is just one of those.
All the time decade in decade out the US
financial sector picked up debt at a 13% annual speed while
profits were always far below that. The Tech Ticker dummies think
50 billion is the biggest Ponzi scheme around & they don't see
the 17 trillion of debt on the US financial sector...
I just guess: The smarter people are the more
stupid they can be...
(11 Dec 2008) This is the 'sorry for being stupid' update &
has only two items:
Item 1) The ING rumor is withdrawn (for the
Item 2) US financial sector total debt: Only 17-
Item 1) The ING rumor is
withdrawn (for the time being).
Some time ago I posted a rumor that came from
monsieur Rienk Kamer via the local financial news broadcast RTL7.
The rumor was that ING had practically
stopped all lending.
Today it was reported that ING transacted
more credit in 2008 compared to 2007, so the rumor was
I think I owe an apology to ING for taking
part in a baseless rumor; it is not my habit to stand on the wrong
side of reality my dear ING!
On the other hand, total assets of ING are
about three times the entire local gross domestic product & I
hope that at ING head quarters they will understand it is better
to shoot first and ask questions later...
Lets leave it with that.
Item 2) US financial sector
total debt: Only 17- trillion.
Today the long awaited US Federal Reserve Z1
release came out, one year ago I estimated from this Z1 release
that the US financial sector needed about 2500 billion US$ more
debt to do 'business as usual'.
Of course there was no 2.5 trillion more debt
available, hence we would see a tidal wave of bankruptcies in the
US financial sector.
For the record it has to be remarked once
more: My insights panned out to be true, all investment banks are
gone. The largest insurer in the world AIG is gone.
A lot of banks that would have disappeared also are saved because
the accountancy rule 157, the Mark to Market rule, is upgraded to
the Mark to Make Believe rule.
Level 3 assets who's values are based on
'unobservable inputs' are still on the rise topping 600 billion
US$ at the moment of writing.
The US financial sector used the Mark to
Market rule to write down on her own debt obligations to the tune
of over 200 billion US$.
And last but not least, the balance sheets of
the US Federal Reserve blowed up in the last months from 800
billion to a nice 2 trillion US$.
With the above info in your head, lets look
at a picture of total debt outstanding for the US financial sector
& did my 2500 billion 'more debt needed' come out yes or no?
I have chosen 2006 Q3 as the starting point
because at that point in time the top of the US housing market was
there. (US Federal Reserve source)
Upon inspection you see that 16903.4 -
15760.4 = 1143 billion US$ more debt, a far cry from the
estimation of 2500 billion don't you think?
Ok ok, the FED has expanded 1.2 trillion or
about 1200 billion and lots of that is 'investment grade'
collateral for loans that somehow are not reflected in the source
Ok ok, we had some bankruptcies like the
Lehman Brothers fun...
If you add it all up:
1143 billion +
1.2 trillion +
Level 3 asset growth +
Mark to Make Believe,
You get over 2.5 trillion.
So I think I owe an apology to the
accountants of the US financial sector; I am so sorry that I was
not capable of transferring the 2.5 trillion into the source
Sorry for being stupid...
(10 Dec 2008) This morning I did read it for the very first
time: According to the Wall Street Journal the US Federal Reserve
is weighing options to sell debt herself...
If true, this is a big watershed. Lets take a
look at the original WJS file (source),
The Federal Reserve is considering issuing its own debt for the first time, a move that would give the central bank additional flexibility as it tries to stabilize rocky financial markets.
Comment: Ok. what's the problem? It gives
more muscle to the FED so we do not have any longer this
perception of the FED as being a 'money printing machine only'.
Lets quote on (remark we have no solid proof of such scheme's
whatsoever, we only have some WSJ stuff):
At the core of the deliberations is the Fed's balance sheet, which has grown from less than $900 billion to more than $2 trillion since August as it backstops new markets like commercial paper, money-market funds, mortgage-backed securities and ailing companies such as American International Group Inc.
Comment: Again we see that the USA is a
nation of whiners, didn't Bernake say he only sucked up the
'investment grade' stuff? Ok ok it was also to 'provide liquidity'
but it was still 'investment grade' and they never made a loss in
the entire history.
So if you refuse to buy FED debt, one thing is clear: You hate
My dear reader, do you not understand the
concept of 'financial innovation'?
It has been going on for a few decades, if
the WSJ report is for real, this is only the next step. Quoting
The Fed also has turned to the Treasury Department for cash. Treasury has issued debt, leaving the proceeds on deposit with the Fed for the central bank to use as it chose. But the Treasury said in November it was scaling back that effort. The Treasury is undertaking its own massive borrowing program and faces legal limits on how much it can borrow.
Comment: Nice to observe the 'money printing
machine' has turned to the Treasury Department for cash...
Lets leave it with that.
(09 Dec 2008) Only two items today:
Item 1) The USA needs a 'car Czar' but not a
Item 2) More on Credit Default Swaps.
Item 1) The USA needs a
'car Czar' but not a 'bank Czar'.
With amazement I looked at CNN: the US
political 'leaders' were grilling the Detroit Auto Executives.
Don't forget: It is just 15 to 34 billion US$ they need so this is
Yet the US lawmakers were asking all kinds of
candid questions over peanut stuff that I truly thought why not
putting a DVD like 'Alice in wonderland' into the television.
With the financial stuff the US lawmakers
have committed themselves to countless trillions, when it comes to
car makers even a lousy 15 billion seems to be a problem.
Oh, the US political 'leaders' know how cars
are crafted & understand the costs and the profits.
When it comes to financial institutions the
simple minds do not have a clue & lets leave it that
Have you ever heard of a 'bank Czar' and is
the US Federal Reserve chairman supposed to be a 'Czar'? Come on,
these are only 'printing money' folks because no one
Item 2) More on Credit
On naked capitalism we have much more fun
compared to the dumb US law makers, don't forget Credit Default
Swaps are only about 10% of the entire 'Over The Counter' market
in derivatives. They are declining a little bit but as far as I
know reality it is still a 600 trillion US$ joke...
Talking about leverage; that is about 1:12 to
1:15 of the entire World Domestic Product.
Yet, since the US$ has so called 'reserve
status' there is no problem at all.
After feeding so much wisdom in your brain,
lets link the link:
Don't forget: CDS is only about 10% of total
OTC market that think they can put the financial outcome where it
is supposed to be...
(08 Dec 2008) The stuff for today:
Item 1) Neelie Kroes thundering: If and only
if the money is leant out.
Item 2) How much longer for dollar strength?
Item 3) Nice new blog found: Option Armageddon.
Item 4) Barry on the US Non Farm Payrolls (even better than
Item 5) As usual: The empty item.
Item 1) Neelie Kroes
thundering: If and only if the money is leant out.
Neelie Kroes leads the European agency
against cartel forming, illegal state support of local companies
& the likes. She is famous for giving large fines at dinosaur
companies like Microsoft & the likes.
Today she was on the local television,
stating more or less the next:
With these new rules for bank
support, the supporting money from the governments should be used
for use in the real economy.
Needless to say: This is a nice tactical atom
bomb going off, but will the soup he as hot eaten as it is served?
Since the policy until now was propping up the banks reserves,
stating that government supporting should be used for the 'real
economy' is a big thing.
Note: At this European agency they
differentiate between the 'real economy' and banks (the 'imaginary
I thought a few hours on this, since these
rules are extremely important in the long run. More banks will go
bankrupt of course, for the real economy this is a good thing:
there is far too much banking capacity anyway.
Of course some political 'leaders' will start doing difficult
about 'systematic failure' but all in all I give a green light to
these kind of proposals.
As we all know the US dollar has a tremendous
strength lately, all kind of folks offer all kinds of insights
about this strength. Let me name a few:
--This is only unwinding of the carry trade,
that explains Japan's Yen strength.
--In times of financial havoc it is logical people turn to the
world reserve currency.
--The US dollar strength is merely a reflection of a vital US
economy with good fundamentals.
And more of that 'bla bla with two fingers in
the nose' kind of stuff.
I too had my thoughts, what explains the low
volatility when it comes for example to the €/$ pair? I think
you have to study the decline in commodities, the low real rates
on government bonds and currencies as a whole.
If you do that, only the biggest players come in mind; what is in
their playbook and how long will it last?
Yes, how long will it last? Because on
creditwritedowns dot com I found a lovely file that looks
reliable; it says that US exports are declining much faster then
This in relation to US$ strength of course.
With Detroit already on the verge of collapse, the decline of the Korean won from 900 to 1400 massively improves Korea’s competitiveness in the US auto market. If dollar strength persists, then
bailout or no bailout, GM, Ford and Chrysler are toast.
Comment: No comment, the internal logic of
the quote should do it's own work.
Item 3) Nice new blog
found: Option Armageddon.
Looks like a charming blog, it looks like it
is not that much visited (because simply how much people can
calculate the value of an option?). But it has charming
Comment: You do not have to understand the
option pricing mechanism to read this blog, I thought it was funny
to relate the credit default swaps to a global poker tour.
Item 4) Barry on the US Non
Farm Payrolls (even better than reported).
For me the latest unemployment figures from
the USA were very good: 533 thousand jobs shredded & it will
only get better.
Barry is USA based so for him the figures are
'worse' for him when they are 'better' for me, it is just a
Before I place the link with the fun, Barry
always says you have to study the Non Farm Payrolls into the light
of the 'Birth Death statistics'.
When I observed that for the first time I
just shrugged my shoulders; why should new baby born or old granny
dead have something to do with the non farm pay rolls?
But the 'Birth Death statistics' do not refer
to babies & grannies but to birth and dead of small companies.
The logic is very simple: A lot of people who loose their job try
to start a small company for themselves, that is logical. And as
such they do not enter the official NFP numbers as a 'leave'.
Once you know this, you can enjoy the numbers
of unemployed stuff:
For years it has been my proposal to give the
Pentagon a NASDAQ listing so they were able to pay for the Iraqi
thing with Iraqi oil and leave all that weird 'political stuff''
out, but the way Barry does it is also very good.
Item 5) As usual: The empty
Here is only emptiness found; in the vacuum
of interstellar space more density is always found...
The next link contains information why
'investors rallied' on the Obama stimulus thing, don't forget to
visit interstellar space before thinking these 'investors' have it
Bloomberg's Bob Willis and Rich Miller report
NFP jobs down 533 K in Nov, this file doesn't say it but the Oct
figures were downgraded from minus 240 to minus 340 K.
If a similar downgrade for Nov will be there, we could look at
over 600 K in non farm payroll jobs lost...
Bloomberg's Dakin Campbell and Cordell Eddings
report that US Treasuries are up for the fifth week, I am glad all
that money goes into the Treasuries bubble and no longer does it's
damage in food, energy and commodities:
Video: Roubini sees much more losses at the
banks (who doesn't), he is mentioning a 3 trillion figure and to
me that looks a reasonable estimation (although it could go even
higher due to derivative jokes):
The day before yesterday I posted this link
also but via the television I got some additional information: The
Bernanke fool wants to offer 4.5% 30 year mortgages (to replace a
lot of the existing ones)...
Ok I understands why he has to propose weird stuff like that,
Bernanke is an expert of the great depression and as such tries to
avoid another one.
But please folks, get for real: is
refinancing via government sponsored 4.5% mortgages taking away
the damage? Of course not, it is only an accountancy gimmick,
At Greycourt dot com there is a good white
paper (I found it via the BP café), it is about the 'moral
behavior' of the diverse players when it comes to the financial
The white paper does not say it, but the lack of ethics is simply
caused by the corruption inside the official US politics. Just an
example: The original TARP plan was 700 billion US$, total cost in
so called 'earmark spending' is 850 billion: What more proof do
you need to observe deep corruption is there?
The US political 'leaders' do not concentrate on the real problems
but only on 'what is my earmark'. Link:
Suddenly in the USA there is all kinds of
panic because the 'velocity of money' is coming down. Basically
the velocity of money is how often it changes hands and as such is
one of the measures of economical activity.
Of course declining money velocity is only a
symptom of recession; it is an effect, not a cause of recession.
Of course in the USA there are plenty of economists crying wolf
and say that the US FED needs to pump in more money to compensate
for the decline in money speed (otherwise the gross domestic
product will decline as we are told).
There are even some who think you can do
'rigid analysis' if you relate the stuff as next:
Y = gross domestic product,
M = some money supply base &
V = the velocity of that money supply base.
The dumb debt huggers observe: If V comes
down we must prop up M.
Of course they forget M was too big in the past and that was the
root cause of this crisis to begin with... (But debt huggers are
very good in interchanging cause and effect.) Link:
More on the 'One in ten mortgages are in
Jesse is observing that the best way to
attack these kind of problems is propping up the median income. Of
course, wise as I am, I never ever pointed to so called 'median
income problems' since the Spring of 2004.
All I want is to destroy the US military so why concentrate on
Of course this administration should have focused
on minimum wages, median wages and not on
cheap mortgages, that was obvious from the beginning.
Dumb as Dubya is, every night he says his
prayers & proceeded his stuff.
Item 1) Flip, my chocolate is ruined!
Item 2) A look at US house affordability.
Item 3) Interest rates going down; it won't help.
Item 4) A short Mumbai update.
Item 5) The empty item.
Item 1) Flip, my chocolate
Tomorrow here in the Netherlands we have
Santa Claus evening and so, dumb as I was I promised some nice
chocolate. I had five bars of butterscotch & five bars of
white chocolate, melted it and it gave a horrible result.
The problem is: butterscotch does not melt
very good, it stays too thick. And so my very complicated design
never emerged. Compared to what I had in mind, the chocolate below
looks more like the US housing market.
Luckily it will taste good so that won't be much of a problem.
Traditionally here people give each other
chocolate characters, I always get an R because my name is Reinko.
But statistically speaking, most sold are the M and the W because
people think there is more chocolate in them...
Item 2) A look at US house affordability.
This item is an update from 25 Nov when the
latest house prices came out and I posted the picture below:
In reality I expect house prices to be more
or less half way and don't forget: the latest Case Shiller index
was from September so we have to wait a few months to see if
indeed the price decline acceleration has stopped.
On the blog Calculated Risk there was a very
good graphic based on Case Shiller stuff that suggests we are
already two third down the line when it comes to house affordability.
The graph is supposed to be an index and for
me it is a delight to observe finally an index centered around
1(the economists have trouble understanding math so they always
multiply the 1 by a factor 100).
(Calculated Risk source)
Click on the picture for a larger version:
Remark 1) If my 'S shaped' model is coming
out, house prices will decline for anther 2.5 years. If the above
graph carries more truth, house price declines will be over in
about 1 at most 1.5 years.
Remark 2) There are a lot of reasons why it
will take 2.5 years, for example if median income is hollowed out
by inflation, recession, unemployment or even depression and a
rough batch of deflation, it will be 2.5 years before we are at
the bottom of house price declines.
Item 3) Interest rates
going down; it won't help.
A flurry of Central Banks
lowered all kinds of key interest rates today, a record rate cut
was observed in Sweden where the Swedish Riksbank rammed it down
175 basis points to just 2%.
Remark Sweden stayed out of the
Euro and can now enjoy the benefits of having a small currency
backed by only one nation.
The same goes for the United
Kingdom that rammed 100 basis points down to 2% (reporters say
that is the lowest since the BoE existed, I don't know if that is
true but it fuels the rumors that say that the UK has over 5 times
her GDP in total debt outstanding on herself).
It all won't help, to much
credit created the fun from too high house prices to giant
derivative markets and more cheap debt won't help.
It only helps the banks who now
can borrow more cheap so their reported future losses will be a
little bit smaller. For me it is very funny to observe all those
political 'leaders' constantly complaining that now the commercial
banks have gotten so much help, they should turn to their basics
The poor political leaders don't
understand how banks function: It is nonsense that banks can
borrow cheap at the Central Bank and make their profits from
asking a higher interest from the real economy. In the past banks
worked that way because banks were a part of
the real economy.
For example in the USA the
financial sector grew above 20% of gross domestic product, just
compare them to water companies: when water companies would be
above 20% of the entire economy wouldn't you scratch your head?
And if water companies would trade in WDS (water default swaps) or
CWO (collaterized water obligations) would you consider this
No of course not, water
companies would be told to deliver water and not a bunch of
It all is very simple: When the
financial sector grows too large without any reason at all, their
level of debt is the best predictor as to what Central Banks will
Of course the Central Banks will
do their stinking good best at telling 'bla bla' stuff about
consumer inflation, but in the end that is only lip service and
the Central Banks will do that was is best in the interest of the
Item 4) A short
After a full week a fifth bomb was found on a
train station in Bombay, India. So it looks confirmed: the attacks
on India were mostly centered on the number five.
To be honest: Although in a previous update I
stated that India simply deserved these attacks, even I feel pity
for a population with such a corruption riddled police force.
I might not like their religion and their
abortion practices but somehow the Indians don't deserve such a
police force. But it is their owns society so they do it all to
When we compare India to the USA, in India
corruption is more rooted at the consumer level while in the USA
corruption is rooted in politics.
Item 5) The empty item & only an
invitation to use your own brain.
In case you cannot cough up anything, this Bernanke
file as found on Bloomberg is another example of an empty
headed guy. It is funny reading!
(03 Dec 2008) Propaganda, what is propaganda and when it is
reported how to react?
Via Barry's hangout in this
page of Barry's hangout) I found the next beautiful
propaganda. It is about the present 'costs' of the financial
crisis restricted to the banking sector, this in terms of the
gross domestic product of the diverse nations:
file from this propaganda comes from portfolio dot com and
placed by a rather dumb fucking Jew named Zubin Jelveh.
It has to be remarked that this file dates back to 23 Oct 2008 so
at that point in time it was not known that the US FED indeed is going
to print money (to buy up 'troubled assets').
So the fucking Jew thinks that my nation the
Netherlands pumps up 39% of the gross domestic product and that
vital the USA economy needs only 5.1%?
Seldom you observe such
The latest reported US gross domestic product
from 2008 the third Quarter was 14,420.5 billion (source
file), if we take 5.1% of the official statistic we see that the
USA only needs 735 billion US$ to fight the entire crisis.
Not only is the fucking Jew named Zubin
Jelvin wrong on small countries like my own, he also does not
understand where the US ticker will end...
But it is beautiful propaganda written by our
beloved fucking Jew Zubin Jelvin; his head is just as deep in his
perfumed ass as the Israeli political leadership has...
I will not write down a long list of why we
do not have a 39% of GDP problem right now (I only worry on the
bank ING because the totals of their balances are triple of our
GDP so that could give some problems if ING does not do
accountancy tricks like 'local losses are local losses').
No, propaganda is like porno: it is hard
to define but when you see it you recognize it & the
Zubin stuff is just so beautiful in it's propaganda take: Very
likely he leans upon the ideas of Joseph Goebbles...
Lets leave it with that, till updates.
(02 Dec 2008) Torture, what is torture and when it is reported
is it for real?
This day no financial news but we take a look
at the evil terrorists that tortured Jewish peace lovers (Indian
The reports say many of the bodies showed signs of torture. The doctor, who conducted autopsy on the bodies of Israeli victims in the Jewish house, said they bore torture marks.
“They were killed on the 26th itself. It was obvious that they were tied up and tortured before they were killed. It was so bad that I do not want to go over the details even in my head again," the doctor told media.
Comment: Please observe we have not one
quantum of 'torture proof' in here, so we are supposed to believe
that already on the first day of attacks in India the evil
terrorists took hours and hours to torture folks to death... Don't
forget we are talking about only 5 to 8 killed Jews & there is
no reliable report on actual torture at all.
Next funny thing (I heard it via the
television so I cannot link):
In India there is not much interest to enter
the 'anti terrorist' parts of the police forces, this is because
when you have a normal job as a police guy you can get lots of
bribes to boost your income...
You fucking don't believe it but it looks reliable; India is
nothing but a rotten law enforcement country & the rich can
pay for 'justice' and the poor cannot pay the police force in case
criminal investigations should be there.
Given the size of that country India, this
deeply rooted corruption takes a manifold in unsolved crime.
Conclusion: India deserved these attacks.
By the way; Is a corrupt police force a
torture on the population yes or no?
Another detail that does not enter our
beloved Media files as torture (VOA news source),
The Israeli navy has ordered a Libyan ship carrying humanitarian aid to the Gaza Strip to turn back.
Officials say the ship, the Al Marwa, was carrying some 3,000 tons of aid when it was stopped by the Israeli navy.
Israel says there was no physical confrontation when it ordered the ship to turn around.
Palestinian officials say the ship is now sailing to the Egyptian port of El-Arish.
Gaza's borders have been largely sealed by Israel and Egypt following a violent takeover by the militant Hamas last year.
The blockade has been stepped up in recent weeks due to a surge in border clashes between the Israeli military and Palestinian militants.
Comment: I do not understand why it is
forbidden to deliver humanitarian aid to the Gaza Strip. As far as
I know reality, it was me (Reinko Venema) that explaining to the
Hamas the benefits of democracy, they won the elections over the
corruption riddled opponent.
As usual the USA did not help after the Hamas election victory,
but that is logical: the USA is only one big incest crowd of weird
For me after all these years I still do not understand why the
Israelis behave like they are the USA; their university math
departments have good math & when you have good math you also
have good brains.
I simply do not understand this Israeli behavior of withholding 3
million of kilo's of humanitarian aid; I simply do not
Is it torture to withhold just one ship in
According to the Media files it is not.
That's it; till updates!
(01 Dec 2008) Today only one item, or may be better, two items.
At first the 'insignificant item' and after
that the 'significant item'.
Item 1) The insignificant item: US recession
is now official.
Item 2) The significant item: The march of the junk bond status.
Item 1) The insignificant
item: US recession now official.
After a long wait the USA based National Bureau of Economic Research
finally declared that the USA was in a recession since Dec 2007...
It took them a long long time to arrive at that conclusion, but
you won't hear me complain because this 'official declaration'
will put a cap on all those wild swings to the upside in the DOW
Let me quote the fun (Yahoo/Reuters source),
WASHINGTON (Reuters) - The economy slipped into recession in December 2007, the nation's business cycle arbiter declared on Monday, and the downturn could be the worst since World War Two.
The National Bureau of Economic Research said its business cycle dating committee members met by conference call on Friday and concluded that the economic expansion that started in November 2001 had ended. The previous period of economic expansion, which ended in 2001, lasted 10 years.
The current recession, which many economists expect to persist through the middle of next year, is already the third-longest since the Great Depression, behind only the 16-month slumps of the mid-1970s and early 1980s.
Comment: This is good news of course, but I
would like to help the Americans to avoid more recessions and
somewhere I did read that up to one thousand US economists
contribute to the US based NBER. Beside using official US
statistics that avoid all that inflation stuff it could be handy
if there would be some kind of census in declaring economical
recessions. Wouldn't it be far better if the conclusion was 'unambiguous'
(meaning that all 1000 economists have to agree there is a
recession and if only one member disagrees,
you still can avoid recession).
It is just a tip for the US incest crowd of
Item 2) The significant
item: The march of the junk bond status.
Far better to bring the DOW down to 7000 is
the good stuff as found on immobilien blasen, it were only two
graphics but their sources looked reliable.
In the picture below on the top to the left
you see a decade long development of the median bond rating in the
non-financial sector of the USA.
In the top and on the right you observe a painful spread for bonds
issued by companies with a 'junk bond status' (most small US
companies have junk bond rating and this is not for
On Naked Capitalism I found the picture of
the lions in the snow, it was just a funny picture so it is
included for no reason at all.
Why is this the 'significant item'? Please
use your own brain!
Item 1) Trashed US economist of today: N.
Item 2) A new update in the NightmareOnWallStreet file.
Item 3) Jesse on money supply, Paul Krugman & other things.
Item 4) Barry's update that had no echo on other financial blogs.
Item 5) The empty item.
Item 1) Trashed US
economist of today: N. Gregory Mankiw.
Gregory aroused my attention only a few days
ago and yesterday I posted a link to his blog in item 4 '280
thousand US$ for every job created'.
I never heard of the guy before but I was
curious about why he took the axe on the Obama team while the
Republicans created the real mess in the last eight years. Isn't
the guy supposed to be a 'scientist' since he works at Harvard?
Today the monkey came out of the sleeve;
Gregory was an economical adviser at the Mitt Romney Republican
team... That explains his non scientific bla bla on his financial
Gregory could publish on the New York Times
& was allowed to publish the next article:
According to Keynes, the root cause of economic downturns is insufficient aggregate demand.
After that our mental dwarf observes:
The economy’s output of goods and services is traditionally divided into four components: consumption, investment, net exports and government purchases. Any expansion in demand has to come from one of these four.
Comment: And after that wisdom our mental
dwarf starts looking in detail at these four components to see
where 'hope for the economy' will come from.
Of course our mental dwarf Gregory has no clue about the debt on
the US financial sector only; he is one of the incest products of
the US economists...
Gregory cannot do elementary math; he is a
Item 2) A new update in the
This is only a repost from 19 Nov, but only
recently I studied the debt growth into the US financial sector on
a decade long scale. And I arrived at the conclusion this is a far
better hammer than the US housing market decline.
The US housing value decline could be as high
as 10 to 11 trillion US$ (in 2006 US$) to the US house owners,
that's good stuff of course but will it break the backbone of
financing the US military?
Temporary and for a few years it will, but
the long term debt growth will do a far better job when you look
at the decades to come.
For the first time I can write (remark this
is a seven year old website):
All they can do is
Yes yes, where dozens of folks have
complained about 'monetizing stuff', for the first time I can say:
They cannot borrow any longer, they have to print... And the 800
billion US$ is only a starter, more will follow.
Item 3) Jesse on money
supply, Paul Krugman & other things.
Although Jesse is very good, he too does not
understand it when it comes to exponential growth. That is strange
because when the interest on your debt is 5% a year and your
income is, lets say, 100.000 a year you might run into trouble if
you borrowed above two million & you have no savings to save
you. (Hence where is the word 'savings' come from?)
From Jesse we can derive folks like Paul
Krugman are 'loosing it' (source),
We like Paul Krugman and enjoy reading his columns. But every so often he writes a column that is so off his normal standards that it makes us wonder if he is on vacation and the task of producing the column has been delegated to a graduate assistant.
Comment: The graphs are beautiful, for the
rest no comment.
Item 4) Barry's update that
had no echo on other financial blogs.
Don't get me wrong: The graphic in the link
is one of those 'leading indicators' and with US 'leading
indicators' you better think twice before you act.
For example: On a particular day US stocks
rise because in the main stream media it says 'leading indicators
came out very positive today'. But a large part of that indicator
were S&P values that were far to high.
So S&P climbs on the news they were far to high in the past
due to 'leading indicators'.
Yet the source file from Barry looks very
reliable & therefore I post the next link:
In the empty department only a bit of a
German guy who made it alive after the Mumbai attacks, he stated
more or less the next:
"We had police guards
before the hotel but it really made no difference if there was
police or not. This was rather interesting because whatever kind
of protection there would be there outside German hotels, it would
always be much more professional."
I hope this is empty enough.
(29 Nov 2008) For today:
Item 1) A few India Mumbai attack details
that seem relevant.
Item 2) Toys R US shooting fun & the US constitution.
Item 3) 30 reasons why the US will enter a depression.
Item 4) Obama economical news: 280.000 US$ for every new job.
Item 5) The empty item.
Item 1) A few India Mumbai
attack details that seem relevant.
Even to my surprise the were only 10
mujahedin staging the Mumbai attakcs, nine are dead and one is
alive. For the time being modus operandi was splitting up in pairs
so for me it looks confirmed for the time being:
The number five was indeed used in the basic
But there is more, authorities tell us that
from interrogation of the one alive this was supposed to be
India's 911 call. And in this we simply miss five or seven car or
truck bombs exploding simultaneously, but the Washington Post is
reporting (look on page 2, source),
"Their plan was to kill 5,000 people, we recovered two big bombs, other than guns," said R. R. Patil, Maharashtra's deputy chief minister. "They were using mobile phones, GPS and satellite phones. We have many clues from these."
Comment: This is a strange detail, how to
kill 5000 people when the number of people in the hotels are only
measured into the hundreds?
If the report of these two big bombs is true, it if far more
likely that only the two hotels would be blasted away.
And what about the 'foreign links'? The one
captured alive says he is from Pakistan and thus for the Indians a
red flag is raised, even stronger; when Indian police capture a
shop lifter stealing only one kilo of bread, the first thing they
do is checking if the Pakistan secret service ordered for
If there are so called 'foreign links' it is
far more logical that Indian Muslims have to protect their
families in general and their religious sect in particular.
Item 2) Toys R US shooting
fun & the US constitution.
Ages ago the American founding fathers wrote
a thing called 'the constitution'. In that constitution the
Americans have the right to carry arms, rather likely this was
supposed to be an antidote against big government doing weird
Centuries ago this made some sense, but in
present day statistics the US murder rates are always five fold
compared to normal democracies. For the most these are gun deaths,
but even when you filter that out Americans are very good in
killing each other. (Here in Europe in the 20th century we are
also very good in killing each other but that was always done via
the governments in World War I & II.)
Only from the USA you can get quotes like
PALM DESERT, Calif. (AP) — Two men pulled guns and shot each other to death in a crowded toy store Friday after the women with them erupted into a bloody brawl, witnesses said. Scared shoppers fled but no one else was hurt.
The violence erupted on Black Friday, the traditional post-Thanksgiving start of the holiday shopping surge, but authorities indicated the shooting wasn't related to a shopping frenzy.
Comment: I could not find the original fun to
link to, but two females got angry with each other and both were
accomplished by a male. One of the males lifted his shirt showing
his handgun, the other guy also had a gun and they engaged each
Result: Inside a crowded Toys R US children toy shop we had two
dead gunners & for the rest there were no wounded or so.
Sometimes it makes we wonder; if the founding
fathers had a crystal ball and could look into the future, would
they have written the US constitution as it is today?
(That is because I never observed media
reports stating that carrying a fully loaded weapon inside child
stores prevented more murder.)
Item 3) 30 reasons
why the US will enter a depression.
On Marketwatch dot com we have a guy named PAUL B. FARRELL
having 30 reasons as why the USA will enter a second depression.
For me there is nothing new, all stuff like
foreseen in the Spring of 2004 is coming out. But if you were not
that sharp in the Spring of 2004, here is a link:
Item 4) Obama
economical news: 280.000 US$ for every new job.
A guy named Greg Mankiw is simply dividing
the 700 billion US$ Obama stimulus package by the 2.5 million new
jobs as promised by the new nigger prez of the USA.
(Please remark: I am not a racist, far from
that, I only like to name him a nigger in the White House
The Greg Mankiw forgets to mention the
horrors of the Dubya regime: At least 400 thousand for every new
job and in my own country the latest figures are above 500
thousand Euro's for every new job...
I think it is unwise to try and get every
idiot attached to the real economy, for myself speaking I am
unemployed for many years and I reject numbers like this.
Better handout half a million to me in person
& let me write a contract that I will never ever make use of
government money again...
The old economical models, they simply do not
apply to the present situation.
Item 5) The empty
Empty, empty, empty...
(28 Nov 2008) The Mumbai (or Bombay) attacks in the financial
sector are now in their third day. The news reports are still very
chaotic, of course I try to measure in how far the numbers five
and seven are used in the attacks.
But given all the chaos in the data this is still hard to
validate; for example how many boats were used? Reports vary from
three to seven.
How many mujahedin did participate? Some say two dozen, others 25
The start of the attacks was 10 o'clock in the evening, but there
will be battalions of critiques who on emotional grounds will say
it is 'logical' to view that as 22 hundred hours... By now I fully
understand the way most people think; the enemy is evil by
definition and as such there is no logic whatsoever to be found.
The fact that only 25 attackers can hole up a
professional army for days clearly contradicts the 'evil theory'
so that part of the logic is usually skipped. After the original
911 attacks from 2001 in the USA there were zero Western observers
who simply stated that America deserved this. All these Western
observers did not let logic do it's elementary flow but emotion or
a 'set of beliefs' hindered the logical process for a long long
From a social science viewpoint this even makes sense; when a
country constantly doubts her basic set of beliefs, such a country
or society gets paralyzed.
And then they start doing weird stuff like selling mortgages for
clearly overprized houses on a massive scale and only worry if
there is no default within 90 days (after 90 days the mortgage was
sucuritized and sold to 'investors').
But lets end this update, since there is
still ample proof that the Bombay operation (as usual) leaned on
the numbers five and seven, I collected a few CNN headline
graphics and combined it into the next picture.
So although the news is still rather vague,
all pixels below are exactly on the place where they are supposed
to be. Click on the pic for a larger version:
Of course my compliments go the the planners
and the mujahedin that staged the attacks in the financial sector
of Bombay. Congratulations!
Of course there are many ways to take a view
of the effects of such an attack; for example if there would be
five or seven car or truck bombs and for the rest 'nothing' in
that case the Indian stock market would have fallen deep today.
That did not happen, so that is important knowledge. (That is not
an advertisement to use crude bombs only my beloved mujahedin!
Keep on building the entire military arsenal: From crude truck
bombs to sniper stuff!)
Of course this website is not 'Muslim only',
when you have a healthy brain and work for example in the
financial industry and you think it is not the craziest idea in
the world to bring down the US military power: You can
Lets leave it with that, till updates.
(27 Nov 2008) Only a short update about the Mumbai (Bombay)
attacks in India:
Before we start I would like to say that when I did hit the
button 'publish website' yesterday, it was about 22.15 local time
so the Indian attacks were well under way. But I was not aware of
it since I only scanned a bit of financial news.
But it was lovely to see all that police and
military folks running around all day long!
Yet the news is so chaotic, for the time
being most news has to be taken with a grain of salt and after a
few days a clearer picture will emerge.
In the first place:
My dear reader might think it is not lovely news because until now
the death count stands at 125 or more and most of them are so
As an antidote I can remark that on this day, or any day, a large
multiple of female babies are aborted by Hindu doctors simple
because they are female.
Muslims do not have a habit of cutting up female embryo's...
In the second place:
There is more proof that democracy brings idiots forward that are
supposed to be our leaders. Let me quote from a CNN media file, we
are now over 24 hours into the attacks and we can safely conclude
that Indian Prime Minister Manmohan Singh is a full blown idiot
only comparable to Dubya (CNN source),
Indian Prime Minister Manmohan Singh suggested the group behind the terrorist attacks, which killed 125 people, was based outside the country.
Singh said: "It is evident that the group which carried out these attacks, based outside the country, had come with single-minded determination to create havoc in the financial capital of the country," he said.
Comment: Of course I have no proof that the
attackers are solely based inside India, yet the concept of
foreigners hating India so much is not a very realistic concept.
In the third place:
The ritual comments of so called political 'leaders' from around
the world. Every time only a little bunch of people die from that
what is perceived 'terror attacks' the international community
acts if like they were space invaders that will root out humanity.
Let me give you only three examples (CNN source),
Indian Prime Minister Manmohan Singh deplored the attacks, saying they were well coordinated and apparently launched by people from outside the country.
Russian President Dmitry Medvedev said: "The monstrous crimes of terrorists in Mumbai arouse our wrath, indignation and unconditional condemnation.
"President Bush offers his condolences to the Indian people and the families of the innocent civilians killed and injured in the attacks in Mumbai, India. The United States condemns this terrorist attack and we will continue to stand with the people of India in this time of tragedy."
Comment: Dubya still has some explaining to
do with the so called 'excess death toll' related to 'Operation
Iraqi Freedom' (about one million) and the USA as a whole still
has to answer upon that other million of dead Iraqis when it came
to the economical sanctions against Iraq.
The Russian guy Medvedev can explain to me why the Russian army
behaved the way they did inside Chechnya, it is only 125 dead in
India so can you tell me what the 'monstrous crimes' are in
Please Medvedev, don't talk shit to me...
In the fourth place:
Among the so called 'terror experts' there is a wide range of
views as if this was 'al Qaida related' or not.
For example on the pro USA Times Online you will find only experts
that say it is clearly related to al Qaida because of 'this or
On news outlets that are not so pro USA you observe 'we miss the
hallmarks of al Qaida, like suicide bombers and remote controlled
Comment: Funny to read all that knowledge,
please read again as I posted it on 10 Nov 2007 you bunch of imbeciles:
Yes, but never forget to pick up military might.
In the fifth place:
Use your own brain to clean your own brain please!
(26 Nov 2008, temporary status lifted 28 Nov) Since the financial news of the
last days can only be classified as boring (I really do not want
to waste my time at DOW levels climbing to over 8000, I only say
this is good for pumping up the volatility) I can make a small
update on some 'terror DVD's' that were distributed to some
Belgium and Dutch media outlets.
There are a few very intriguing details into
this 'terror' DVD, let me name a few:
1) It is very short, only about four minutes
and that's it.
2) It has truly beautiful music with it, is
it the music from the heavens?
3) It relates military air power behavior of
Belgium to attacks. (Belgium is sending more air power to
Afghanistan & Belgium is the head quarters location of NATO.)
4) Beside Belgium news outlets, Dutch news
outlets got also a copy of this DVD. As far as I know reality, no
other nation got the announcement.
Before we proceed lets take a look at
In the past I have explained to the mujahedin
how terror attacks work on the general population, but I lacked
some insight: What would happen if such an attack occurred just
before the elections?
A few months later we had the Madrid bombing
& from the Madrid bombing we derived a very important
statistic: Up to 11% in voter change.
After that month in month out I explained
that when staging attacks make sure the numbers 'five' and 'seven'
So we had the London bombings, on the sevenths
day in the sevenths month of the year 2005 stuff blasted in
Of course local officials have a good habit
of sticking their heads into their asses, so I had no so called
'judicial problems' at all.
So far history, is the DVD for real?
Well my dear reader, this is to be made up
for your own brains. International terrorism relates the sending
of more air power to Afghanistan to more attacks & if you do
not want to see the sheer simplicity of elementary logic, this is
your problem and not mine.
In short: I wish the DVD folks good luck, the
music choice was perfect...
(25 Nov 2008) The five items of today:
Item 1) New Case Shiller housing index; the
Item 2) Only 800 billion US$: The FED going TARP.
Item 3) Only 700 billion US$: A stupid economy stimulus package
Item 4) Again that fake FDIC fund.
Item 5) Wall Street advertising agency reporting: Is Tim Geithner
really our guy?
Item 1) New Case Shiller
housing index; the fun continues.
Indeed the fun continues: The 10 city index
was down 18.6% year on year in September and the 20 city index
down 17.4%. (USA Today source.)
It is good to observe the speed in the price
declines is still increasing and as long as we have positive
acceleration in the price declines we still are not halfway these
A long time ago I wrote that I am expecting more or less an 'S
shaped' model in price declines, but I fully understand the mental
dwarfs from Wall Street do not understand what an 'S shaped' model
So let me explain:
You take a S, flip it left to
right and rotate it 90 degrees.
After that you remove the parts of the S that are not relevant,
you put it in a picture add an arrow and write some annoying text
Then you get the next picture:
Although the text is very funny (since the
second half of the price declines will bring far better economical
havoc), it looks slightly better if you add some circles and small
rectangles in it:
Then you could stop, or proceed:
I think I like the middle pic the most, the
third pic is slightly overdone.
Item 2) Only 800 billion
US$: The FED going TARP.
Well this comes as a surprise but didn't I
write it very clear when the first 700 billion US$ so called
'Troubled Asset Relief Program' was unveiled by the US Treasury:
The first TARP is the cheapest.
The original 700 billion program is used for
other things like buying preferred stocks from banks in order to
keep them afloat and now the Federal Reserve is buying up to 800
billion US$ in garbage. (And they have already so much garbage on
their widely expended balance sheets).
500 billion in mortgage backed securities,
200 billion in consumer loan backed securities &
100 billion garbage from Frannie.
Mark my words: In the previous item we
observed we are not even in the second half of the house price
decline, the second leg will bring much more economical turmoil
because more and more mortgages will come under water.
So this 800 billion US$ program is only the beginning!
Item 3) Only 700 billion
US$: A stupid economy stimulus package from Obama.
We have more proof that the US economists
form indeed an incestuous clique because no one will tell that
this new program will also not work.
There is only one thing that will work: Cut back spending, pay the
debt and start saving. After a few years things will turn around.
But no, we get one more of these dumb
'economic stimulus' packages.
Just like an obese person will not loose weight under a new
'stimulus diet' of 25 hamburgers a day and no exercise, so will
the US economy not get back on her feet with more
Lucky me: The incest clique will always
refuse to see the obvious & hang on to their weird and
outlandish version of economical theory...
is a Washington Post file with a few details.
Item 4) Again that fake
It is very annoying but the US government
keeps on coming with this fake and non existent bank insurance
fund. It is a short media report so let me quote the entire
article (Yahoo/Reuters source):
U.S. problem banks rise to 171 at end of third quarter: FDIC
Tuesday November 25, 10:37 am ET
WASHINGTON (Reuters) - The number of problem U.S. banks and thrifts jumped in the third quarter to 171, from 117 at the end of the prior quarter, marking the highest level since the end of 1995 and adding to expectations that more banks will fail, regulators said on Tuesday.
The Federal Deposit Insurance Corp said the industry-funded reserve to back deposits was $34.6 bln as of September 30, a 23.5 percent decrease from the previous quarter.
The FDIC also reported that bank industry income fell 94 percent from the previous year to $1.7 billion in the third quarter.
Comment: Again there is no such fund, this is
only an accountancy vehicle that keeps track of what money banks
have paid and what money goes out. The 34.6 billion US$ mentioned
are only Treasuries, even the coupon is paid in Treasuries.
The money the banks have laid in is long gone, that keeps the
official deficit artificially low (just like with all
other Federal funds; they are only vehicles to keep
the official deficit artificially low).
Every bank that needs a rescue, is rescued with tax payer money
or, since there is a growing deficit, with borrowed money.
There is nothing left in the USA, only the
capability of borrowing money is left.
Item 5) Wall Street
advertising agency reporting: Is Tim Geithner really our
Only very seldom you see the Wall Street
Journal (the official propaganda outlet for main stream Wall
Street trader news) being so critical upon the US government...
What is the case?
They doubt the qualities of Tim
Geithner as the next US Treasury king only to neglect the perfect
wisdom of the present Paulson clown...
Mr. Geithner was also on the Fed's Open Market Committee when it made its fateful decisions to keep real interest rates negative for so long, fueling the credit mania that has since turned to panic.
Comment: Since when is the Wall Street
propaganda machine allowed to express elementary facts that
contradict elementary economical reason?
Why not put the blame on Dubya or the Paulson clown?
That is since a nigger has been appointed to be the next US prez...
(24 Nov 2008) This update is only one item and before I start I
have to say I will make small and even large faults because this
is about the one and only detail in this entire credit crisis that
I just don't understand.
Lucky me, Yves from Naked
Capitalism doesn't understand it either and Jesse from Jesse's
Café American tracks the stuff for years but never offered
any insight why it should be logical that up to 5 trillion US$ in
Treasuries transactions can fail in one week.
It is important to remark that 5 trillion US$
in failed US Treasury (= government bonds) transactions is about
50% of the official US Federal debt or about one third of US
GDP... (And that in one week...).
But insight is growing, a lot of these
'failed transactions' emerge from the fact that US Treasuries are
put up as collateral for loans. Let me quote from a quote (Naked
Now, an industry group is trying to fix the mess, which New York Fed Executive Vice President William Dudley said could cause the U.S. borrowing rates to rise if not rectified. The Treasury Market Practices Group wants to impose a “penalty” on failed trades, a move that may result in borrowers who put their Treasuries up as collateral for loans effectively receiving 2 percent interest.
Comment: Since these failed transactions
reach up to 50% of the entire official US Federal debt, this could
be some of the 'grave concern' bla bla stuff of the New York
The Bloomberg source where the above quote
comes from started as next (Bloomberg source),
Owners of Treasuries may soon get paid to borrow as the U.S. tries to break a logjam in the $7 trillion-a-day repurchase market.
Treasuries are in such high demand that investors are lending cash for next to nothing to obtain the securities as collateral through so-called repos, which dealers use to finance their holdings. The problem is many parties involved in repos aren’t delivering the bonds because there is no penalty for not doing so, causing “fails” to exceed $5 trillion, according to the Federal Reserve Bank of New York.
Comment: As far as I know reality, the 5
trillion are weekly numbers (the Bloomberg reporter Liz Capo McCormick
doesn't say so) and from the 7 trillion-a-day repurchase market it
is not told if this is US Treasuries only or all repurchased
So Bloomberg is a bit misty & lets leave them alone.
When at first I came across the weird large
numbers of failed transactions in US government bonds, the only
weird explanation I could make was:
When inside a large financial institution a
sell of a few million US bonds is reported, this instantly goes as
'cash' to the balances of that institution.
Now we know there is no penalty in setting up phony Treasury
transactions, my original insight is gaining more weight.
For me this looks a bit like the next:
Before the US investment banks started
collapsing, according to the Princeton economical & finance
folks, up to 25% of their entire balances were financed with one
day borrowed money. (That is why the one day intraday bank rates
jumped after the Lehman collapse.) So the investment banks needed
day in day out to finance up to 25% of their total balance sheets.
As a comparison: These failed transaction
data in American government bonds topped at 50% of total US
Federal debt in one week.
It looks like there are strong
At last I want to close with an update from
US Treasury Default Swaps Soar to Records
NEW YORK, Nov 24 - The spread or risk premium on 10-year U.S. Treasury credit default swaps hit record wide levels on Monday, prompted by worries about how the cost of rescuing banks and carmakers would affect U.S. creditworthiness, CMA DataVision said.
As the global financial crisis worsened in recent weeks, traders increased their bets on the bigger toll of the U.S. government's array of programs to help these ailing industries.
Ten-year U.S. Treasury CDS edged out to 49.8 basis points from 49.3 basis points at Friday's close, according to the credit data company.
Five-year Treasury CDS grew to 43.5 basis points versus 43.0 basis points late Friday, it said.
Comment: Fifty basis points only means that
the sellers of these Credit Default Swaps think that the US
government only goes bankrupt once every 200 years.
In case you are interested in the math behind such '200 year
calculations' it is very simple: 50 basis points = 0.50% and as a
number this is 0.005.
Since 1/0.005 = 200 we observe the sellers of US Federal CDS still
have a 2 century wisdom inside their
Ok I only wanted to talk about the
transaction failures of US government bonds, but Christopher Whalen
is recycling some funny CDS stuff in the next link:
Ok ok, let me quote the fun but after that I
am really hitting the button 'publish website' and I am going to
listen to some music:
1) Start with the $50 trillion or so in extant CDS.
2) Assume that as default rates for all types of collateral rise over next 24-36 months, 40% of the $50 trillion in CDS goes into the money. That is $20 trillion gross notional of CDS which must be funded.
3) Now assume a 25% recovery rate against that portion of all CDS that goes into the money.
4) That leaves you with a $15 trillion net amount that must be paid by providers of protection in CDS. And remember, a 40% in the money assumption for CDS is VERY conservative. The rise in loss rates for all type of collateral over the next 24 months could easily make the portion of CDS in the money grow to more like 60-70%. That is $40 plus trillion in notional payments vs. a recovery rate in single digits.
Comment: Convincing the owners of this Black
Swan song giving up their rights is the only problem Christopher
does not answer...
(23 Nov 2008) As usual five very boring items...
Item 1) Links.
Item 2) A strange wasteland.
Item 3) Math: Strange attractors.
Item 4) Most stupid Republican article read today: David Limbaugh
Item 5) The empty item.
Item 1) Links.
Calculated risk: Two graphics un US bank
failures; one graphic in number of banks and one in total assets
Big Picture Café: Prieur du Plessis wrote an
article with the Baltic dry Index in it (scroll down). This index
validates that the DOW Jones price/earnings ratio's are still far
too high (but it is well known the only task of the Wall street
traders is 'staging rallies'):
In the last link above (banks not happy...)
there was a nice picture from a dead tree in a strange wasteland.
As an antidote I made the next of it:
Item 3) Math: Strange
Why always concentrate on financial stuff or
war? This item is a very beautiful concept from mathematics and
you really do not have to understand math at the academic level in
order not to learn a bit from it.
Inside the math field of dynamical systems,
let me spare you all kind of difficult looking formulas. Basically
all dynamical systems are like:
Tomorrow = Function (Today
) + some noise.
The 'tomorrow' can mean anything you like,
--The stock price of manufacturer Philips,
--The money in your bank account,
--The position of the earth,
--The flow of the continents & so on.
Pictured below is a very famous strange
attractor, you see more or less two 'wings' and some curves going
from the one wing to the other. It is important to understand you
see only a small part of the Lorentz attractor, only a few
trajectories are made visible.
When you are in one of the wings you are always in one of the
trajectories, but a very small push (or noise) will drive you into
another trajectory that will drive you to the other wing tomorrow.
It is just like reality: small things can
have big consequences... (Wikipedia source)
There is plenty of more in strange
attractors, at US Standford they have a few collections that, I
hope, serve as an advertisement for the study of mathematics.
This file is from 1995 (ignore the
backgrounds please, it is advertising):
At last (for this item): You my dear readers
are dynamical systems on their own, but we from the math
department are not capable of building a good model for emotion.
That's the only reason you still have some freedom left; at the
moment we understand how to model emotion, economical recessions
and depressions will be a thing of the past.
Finally we could turn humanity into a machine
that only needs some maintenance every now and then...
Luckily there is no math model for freedom;
freedom of humans is 'not observable' as they say in quantum
mechanics (but that is another branch of sport).
Item 4) Most stupid
Republican article read today: David Limbaugh on Obama.
It is well known that David Limbaugh, just
like Ann Coulter, represent the finest of US conservative
thinking. David and Ann are not street fighters, they are the
intellectuals of the US conservative party. Let that be clear!
We all know that the US conservatives
= Stealing jobs.
We all know that US conservatives hate the
democrats because they tax people for no reason at all. The US
conservatives think and think and they ponder the question why the
democrats hate America so much, after all these years they still
have not found the answer...
Let me quote from the Limbaugh intellectual
this eternal wisdom (source):
Already some 38 percent of Americans do not pay income taxes, and Barack Obama wants to increase that percentage dramatically.
Comment: This looks like a wet
dream for the US conservatives, may be that is why they
lost the elections...
Item 5) The empty
Empty empty empty; please use the own brain
to fill this!
(21 Nov 2008, Item 5 updated on 22 Nov) Doink! Yesterday finally the man with the hammer
hit me when I read the S&P 500 had breached dot com bubble
Somehow I felt just as tired as satisfied and rather tranquil when
the giant size of this all was felt, so huge and therefore so
pleasant... Today's items:
Item 1) Barry reports: Record breaking data
Item 2) US car makers versus US financial institutions.
Item 3) Institutional Risk Analyst: Math and the crisis.
Item 4) Collateral damage: European industrial production falling
from a cliff.
Item 5) The empty item.
Item 1) Barry reports:
Record breaking data everywhere!
Barry collected a bunch of tremendous
beautiful data, le me quote a few (source):
From the October 2007 highs of 1,565, to yesterday’s close of 806.58, the S&P 500 market capitalization lost $6.69 trillion.
Comment: Love is in the air. Quoting on:
The dividend yield on the S&P 500 is now greater than the yield on the 10-year Treasury. That hasn’t happened since 1958.
Comment: This is a very important detail:
Since stocks carry a higher risk anyway, by elementary logic they
should have a higher yield compared to bonds.
I never studied in deep detail why the golden standard collapsed,
rather likely it is the same as what destroys today's financial
system: Too much money supply backed up by nothing (only fancy
theories from dandy economists).
Don't get me wrong: I do not want to go back to the golden
standard, fiat money is fine by me. But if the folks running the
fiat money system do not understand the basics, we are in for a
whole lot of problems...
Item 2) US car makers
versus US financial institutions.
The US car makers only want a lousy 25
billion US$ (teaser) loan, the US financial sector gets 700
billion US$ and the ticker is counting.
The US car makers get a cold shoulder and
only when they cough up a good business plan they get approval.
The financial sector was never asked to cough up a good business
What's the difference?
The difference is that the US law makers
understand the way the small pocket money will get burned away by
the car makers. When Freddie Mac and Fanny Mae report losses of
over 50 billion in the last Quarter, the US law makers do not
Why is that? They do not understand the way financial companies
work; all reported profits from the last decades were in fact
profits derived from more credit.
Year on year debt grew by about 13% since the
mid seventies while profit growth was always below
In short: US car makers get a cold shoulder
because all Americans understand how they operate, when it comes
to finance the Americans still worship the rich and worship the
They don't worship the golden calf but the
Item 3) Institutional Risk
Analyst: Math and the crisis.
The folks of the IRA are amazingly smart,
their articles are sometimes hard to swallow (even for me). As no
other website they are capable of shaking the foundations of my
thinking. I always like it when my foundations are shook a little;
a new delta function can enter my system...
The article from IRA is very long (that also
explains why I did not update yesterday) and if it was up to me I
would quote the entire article but I understand most readers do
not find joy in reading stuff like that.
The core of this grand project was to reconstruct financial economics as a branch of physics. If we could treat the agents, the atoms of the markets, people buying and selling, as if they were molecules, we could apply the same differential equations to finance that describe the behavior of molecules. What that entails is to take as the raw material, time series data, prices and returns, and look at them as the observables generated by processes which are stationary. By this I mean that the distribution of observables, the distribution of prices, is stable over time.
Comment: In theory this is true; in the long
run run prices are stable. But after a good day of work I hope you
get some sleep in the night.
The problem with models like these is very simple: molecules don't
have a memory let alone emotions. Science will always be incapable
of finding the differential equations for emotion. That is also
why all proceedings toward artificial intelligence have failed
decade in decade out.
Item 4) Collateral damage:
European industrial production falling from a cliff.
Raw stuff: For example the large BASF company
is locking down entire factories for a full month. Local steel
producer Corus has only one real order left; other orders for
steel have been drawn back (even when this comes to a high cost
for the ordering company).
For me this is only collateral damage.
The entire US military has run on cheap
credit for far too long and in case I want an end to that please
don't come complain at my house address...
Furthermore, I am unemployed for many years
and in case of some dumbo guys who's job hang on to the access of
easy credit: This is your problem and not mine.
Item 5) The empty
This item is empty because yesterday the DOW
visited the 7500 regions, this day it jumped up to above 8000...
Here is the empty picture:
I hope this item is empty enough for
The DOW came from 8000, it magically returns
Updated 22 Nov 2008:
There are persistent rumors that a guy named Tim Geithner
will be the next US Secretary of the Treasury department. On my
radar screen he never popped up before but he seems to be the New
York Federal Reserve President so in a normal world he would be
one of the most mighty of our beloved fiat money system.
Let me make, rather easily, make chopped meat
of this debt hugger, (NY FED source)
These concerns have been heightened in some quarters by the problems currently being experienced in the subprime mortgage sector. It will take some time before the full implications are understood and the full impact can be assessed. As of now, though, there are few signs that the disruptions in this one sector of the credit markets will have a lasting impact on credit markets as a whole.
Indeed, economic theory and recent practical experience offer some reassurance against both these specific concerns and more general worries about the implications of credit market innovations for the performance of the financial system.
Comment: The date this quote came from is
very important, it sheds light on 'how far they are' and the above
quote comes from March 23 of the year 2007.
In the Summer of 2007 two major hedge funds cracked and in the
main stream media this is the 'starting point' of the credit
For me life is simple: Tim Geithner does not have the stuff you
need to preserve a fiat money system. So if the rumors are true, I
only welcome another idiot into the Obama team & if the rumors
are not true I wish the NY FED idiot all the luck he needs.
My dear reader, our governments constantly
buy billions of so called 'preferred stocks' in order to 'provide
liquidity' or 'prevent a meltdown' or whatever shitty reason they
have to blow away your pension rights.
Most banks are 'recapitalised' via preferred
stocks, so what are they? What exactly are preferred stocks?
On a rather lousy
website known as dowtheoryletters.com they have managed all
outside linking impossible because you never make it outside
No permalink, no this no that, only
But if you scroll down to 'popular articles'
and click on the 'Fixed income and interest rates' you understand
how your pension fund will screw you up.
Rather likely the 'Fixed income and interest
rates' is withdrawn within a day or two & the mental dwarfs
over there think protecting links = protecting America...
(19 Nov 2008) Let this be the 'Obama update' and lets explore
some future expected developments given the present situation.
Since I wanted to write Item 1) once more and
since today we also had an al Qaida statement around Barack Obama,
why not combine this?
Two items today:
Item 1) US financial sector: Projections of
future debt growth.
Item 2) The al Qaida statement as released today + comments from
Item 1) US financial
sector: Projections of future debt growth.
Before we calculate the future projections I
would like to go back in time to the day when in this credit
crisis that broke out in the Summer of 2007, the first Quarterly
debt figures of the total US financial sector came out in the
The same day the debt figures came out, I
understood the US financial sector needed about 2500 billion in
new debt in order to do 'business as usual'. Of course, since this
was supposed to be a credit crisis, the new debt would not be
there and hence there would be a tidal wave of bankruptcies...
You can find these in the D3 sub-release of
the Z1 release of the US Federal Reserve, let me 'cut and paste'
it in a table:
Outstanding USA Domestic Financial Sectors (source)
* Based on
For me, as a scientist, it will be exiting to
observe on 11 Dec (when the new Z1 release will be out) how good
or bad my 2500 billion estimation of new debt was.
So far the past, lets explore some future
developments of this mountain of debt.
Since this is the 'Obama update' we calculate 4 years into the
In that we use 16507.5 billion US$ at the
starting point and calculate three scenario's:
Scenario 1) The historical debt growth (since 1975, about 13%),
Scenario 2) The 9.3% YoY growth since the FED gives Quarterly Z1
Scenario 3) Use only data since the credit crisis started (that's
Here we go:
fun scenario's for his presidency, inflation included*,
all in billions of US$**
* At this
point in time it is unknown if deflation will set in,
it is likely but there is no proof whatsoever.
** All in 31 July 2008 dollars or course...
One thing is clear: The credit crisis only
lives in the real economy, in the imaginary economy (the financial
world) it is the opposite.
So Barack Obama, this
is my gift for you: I have done the calculations that your
so called 'economical experts' will never give you. Bad luck for
you; you will never read it, your
'economical experts' will prevent that...
At the end of Item 1), in case if you are
interested if the US Federal Reserve is interested in the
development of the total debt of the USA financial sector?
Today the latest minutes came out, you only observe a bunch of
people loose themselves in small details and nicely ignoring the
big stuff, link:
Item 2) The al Qaida
statement as released today + comments from my side.
There are many media reports on this but lets
make only two quotes from a mainstream US media outlet named msnbc
Speaking in Arabic, al-Zawahri used the phrase "abeed al-beit," which literally translates as "house slaves." But in the video message, posted on Islamic militant Web sites Wednesday, al-Qaida supplied English subtitles of the speech that translated the phrase as "house Negroes."
In Washington, White House press secretary Dana Perino said the tape is a reminder that al-Qaida is irrational.
Comment: For many years we hear from the
White House that the economical fundamentals are strong; were
these rational or irrational statements?
Of course the new prez will work on the so called 'American
interests', that is what the guy got elected anyway...
Proceed the stuff:
The video graphics underlined the contrast al-Zawahri aimed to show: On one side of the screen was a photo of Obama wearing a Jewish skullcap and meeting Jewish leaders. On the other side was a photo of Malcolm X praying in a mosque. Interspersed was footage of Malcolm X talking of a "worldwide revolution" against the "Western power structure."
Al-Zawahri addressed "all the world's weak and oppressed," and warned them: "America has put on a new face, but its heart full of hate, mind drowning in greed and spirit which spreads evil, murder, repression and despotism continue to be the same as always."
Comment: For the time being I take a somewhat
softer approach and point to the middle name Hussein in Barack
Hussein Obama; until proven guilty he is innocent.
The proof of the pudding is not the promised 16 months withdrawal
from Iraq; that was an election promise so this has to be carried
No, the proof of this nigger pudding is in
the Palestine equation.
Mark my words:
The Israelis have
exactly 12 months from now to do their stinking best to solve
their problems with the Palestines in general and the Hamas in
Monsieur Hussein could be helpful to make all those unconditional
billions of 'help' to the Israelis conditional on getting a real
Palestine state & stop telling all that propaganda nonsense!
Mark my words: Obama is innocent until proven
guilty on this detail.
Lets leave it with that and hit the button
(18 Nov 2008) Only one item today because the financial news
evolves rather good but the main point as why this all will
collapse is still missing.
A week ago I published the latest update in
the Nightmare files:
Please take your time to think about it; over
the entire span debt figures of the total US financial sector are
reported, the debt grew about 13% year on year.
Total debt on that sector is now 16.507
billion US$ (source,
see the one before last column and scroll down) and I have to wait
for the next release on 11 Dec 2008 to see if my just calculated
estimate of 12% year on year grow will come out...
When I started the Nightmare files over one
year ago, it was mostly based on my estimation that the entire US
financial sector needed about 2500 billion US$ in new debt in
order to function properly. Right now this 2500 billion estimate
is indeed doing her majestic path, it seems to come out rather
Yet non of the financial media outlets and
none of those financial blogs (there are dozens of them) mention
this high school math of simple to understand exponential growth.
I am still amazed on that detail; Nobody
wants to see this easy to understand debt trap on the US financial
sector. From the political leaders to these so called 'critical'
financial bloggers; they don't want to see it.
Why move small stones around when there is an
avalanche of big rocks coming from the mountains? This massive
denial looks like some 'psychology thing'.
Don't forget: Now the US government is
constantly helping her financial sector, all that debt growth will
end as government debt in the end. It is rather dumb to expect
that one or two trillion in tax payer money (in fact it is
borrowed money) will make any kind of significant difference.
(Again: Read the post linked above and use your brain!)
This massive denial makes otherwise smart
people look standing outside reality, let me give you an example:
On the Prudent Bear gives Martin Hutchinson
some good thinking if we are now into a deflationary or
inflationary period (to be honest: I haven't figured that one out
either, for the time being consumer inflation seems to be caged).
But on the size of the impending contraction of the US economy,
Martin thinks a nice restore of the savings ratio of the US
economy is all we need. He neglects that this saving ratio was
absent for far too long and now we can proceed as if nothing has
The recent spate of truly terrible economic numbers, such as the 2.8% retail sales decline in October (4.5% down on the previous year) and the 32% decline in automobile sales, suggests that wherever the bottom of the recession is located, we will get there quickly. The US savings rate and the balance of payments both need to be improved by about 5% of Gross Domestic Product, so a top-to-bottom decline in GDP of at least 5% is likely,. However there is little reason for GDP to decline more than 5% top-to-bottom, or maybe 7% to allow for a little overshoot. Once GDP gets to its new equilibrium level powerful factors stabilize it and produce renewed growth – after all, at that new level of GDP the United States is once again internationally competitive, selling goods and services to customers worldwide in a way that has been impossible for a decade.
Comment: Just look at the USA car makers, for
18 years complaining but in fact doing nothing and now they could
face bankruptcy... And 'internationally competitive' with what?
Ok, computer, aviation and space techno is still investment grade.
But what country wants a health care system the USA has? Only
Lets leave it with that, but I want to
mention only one link:
Have you ever heard of the Federal Reserve ABCPMMMFLF
rescue program for commercial paper? It is a bit like 'Asset
Backed Commercial Paper bla bla Liquidity Fund' and it avoids 'mid
air collisions' between on and off balance items:
dear reader, now the band of brothers known as the US
Lehman Brothers investment bank is going for the Chapter
11 thing we can conclude that the band of brothers are
is good news and there are some ripples on the 62,000
billion US$ so called 'credit default swaps' market. CDS
is an instrument to pump risk through the entire system,
it maximizes system failure.
I don't want to talk about small markets like a 62
trillion market. I have a habit of going after the real
stuff and you can find the real stuff at the Swiss Basel
based Bank for International Settlements. (Source)
bank has real stuff to tell, for example in Dec 2007 we
only have 596,004 billion US$ of total derivative
contracts. This is no problem; the USA gross domestic
product is 14 trillion US$ a year and when this 600
trillion joke of the USA banks goes wrong they can
always borrow more money from China, India or
is the link to the Basel stuff & I hope you have
enough to think about this 600 trillion joke.
case you want to know what OTC derivates are, OTC means
'Over The Counter' and thus there is no registration and
no regulation. It is just 600 trillion in free market
stuff, please trust the US banks and go to sleep
16 Sept 2008
for thought 2:
And it makes me wonder, it makes me wonder so much...
at the end of the second quarter of this year, the total
US financial sector that is about 20% of the US economy,
has 16507.5 billion of debt on herself;
does nobody sound the alarm?
the last decade this debt has always expanded
exponentially by 9% a year.
As a comparison, the US gross domestic product has grown
just over 3% in the last decades after we left the
golden standard and hugged fiat money.
forget 16.5 trillion is far above the US GDP that is
around 14 trillion US$ a year.
is elementary math: you can explain it to 16 year old
high school pupils that the US financial sector is
if 16 year olds could understand this, why did the US
government not understand this? And most of all; why did
the Federal Reserve not understand this?
makes me wonder; why full throttle drive towards the big
And here is nice pdf
file for my fellow scientists stating we had
hundreds of thousands so called 'excess death toll'
inside Iraq compared to a non invasion
model. (The so called Lancet file that says that on
average we likely have 650 thousand excess civil death
This is funny: on one of those
lefty antiwar US websites I found a very small Java
Script and from now on I can check my own website upon
the number of dead US slime inside Iraq. Here's the
math I wrote about 13 years ago, it is very simple
to understand: you can differentiate and integrate all
geometrical objects. And when you triangulate a
landscape or a movie scene properly you can later in a
computer change the position of the camera. Of course
you need a new file format because the goody good mpg
format won't work.
This might be of future interest for police or stuff
like that (you can change the camera viewpoint to that
of the victims or that of the criminals. Of course this
is not a miracle; missing information can only be
repaired at a certain level but anyway... The math is
there and it is waiting to be used!
(Ok you also need geometrical integration but that's a
cakewalk, some geometric projection theory, lots of self
repairing codes and very very difficult: a good camera
device. But if these conditions are met you can later
change the camera viewpoint...)
(17 Oct 2008) This morning I finished a very simple and non
technical article about statistical testing of poisons in food. It
is so horrible non technical that even political leaders can
understand it's content; only seldom I have sunken so low...
A very old (25 years
old) booklet transformed to the pdf format about home
made shaped explosives. I don't think it is of very much
use to the Iraqis but it is fun reading. They even used
a Martini glass to penetrate 3 inches of steel! And all
home made... Have fun reading it (it has lousy
I found a very nice
booklet named 'Explosives
from common materials', it is field study from the
Americans. It covers a lot:
How to make improvised detonators, high explosives,
primary and secondary explosives. It is very good only
the procedure for making alcohol is not handy in Iraq;
if the Iraqis need pure alcohol they should use the wine
method for making pre distillation alcohol and use sugar,
some kilo's fruit (about 10% of total batch produced),
yeast and a lot of water.
Sayings from famous
and unknown people that shed light on their insights and
their emotional daily running system:
Phrase nr one (from
Dubya or the present lame duck president of the USA):
"The reason we start a war is to fight a war, win a war, thereby causing no more war!"
--The first Presidential debate
nr two, also from Dubya but I have to pump it up from my
memory so there might be some little faults in it (it
was some weeks after the 911 attacks on the USA):
enemy is so evil that most people in the USA do not know
what they do why they do!
nr three from the former USA secretary of defense Donald
Rumsfeld (if my memory is correct he spoke these words
in the week from 16 to 21 October 2001, at that point in
time we were on the height of the anthrax scares):
it makes you wonder; How does he do it? And we would
like to ask this person to come on over to our side and
together fight the war on terror.
nr four is from me myself & I:
understand your own 'logical thinking' you must know
that logical thinking is only the first derivate of
emotion. That is why all attempts towards artificial
intelligence have failed: computers do not have emotion
build in but we humans, like all other animals,
The above mentioned three phrases of my enemies only
expose their emotional system, lets destroy that
Phrase nr five
is from US celebrity Donald Trump. A few weeks before
this the famous Lancet
report was published calculating Iraqi civil death
toll at 650 thousand (this with a relatively large but
acceptable standard deviation):
myself I use 400 thousand killed.
Phrase nr six is from
CNN's Larry King (CNN is received in 200 countries so
therefore the CNN management thinks it's wise that Larry
King can parade every day one or more American
celebrities). When King was asked why he did not use the
internet he responded:
are a billion things on the internet.
Phrase nr seven is one
more from the former US secretary of defense. After a
few years in the war on terror he was asked what it all
boiled down to. He said:
kill the terrorists in a faster rate than the
massandra's spit them out?
Phrase nr eight is
from Osama bin Laden. The phrase is very worthwhile
mentioning because the US CIA folks were in the past
very satisfied with 'Just a few weapon deliveries and we
lured the Russians into Afghanistan'.
America needed us to fight their proxy war against
Russia they supported us. The moment the Russians left
Afghanistan we were irrelevant.
Phrase nr nine is from
US four star general Peter Pace, he made it during a
memorial speech on 11 Sept 2006 (exactly five years
after the 9/11 attacks from 2001).
At that point in time total US military death toll
already stood above the number of civilians killed on
now the total amount of killed US military members is
approaching the civil death toll from nine September
Phrase nr 10 is again
from me myself & I. It is around the rebuilding of
the organization after the military campaign in
sure to imitate the way the German army was organized
after world war one; That is make sure that every member
can function properly until up three hierarchical layers
higher. If you do that you can grow with an enormous
speed in the future when this is needed.
Phrase nr eleven is
also from me myself & I. It is to proof that I can
be stupid too. I do not know when I wrote it but it was
a long time ago.
I asked the Iraqis the next:
you hold on one more year? After that things will get
better, I promise.
You just don't imagine
how much I have regretted those words, after that the US
military came with bonuses of up to 70 thousand dollars
for enlisting / reenlisting and how could I have been so
stupid as to not have foreseen this?
I mean the Americans run their country on the greenback
& why was I outside reality? Why?
Phrase number twelve
is from a peace loving female neighbor of mine, her name
people we can speak, so we should not fight war but
speak with each other until our differences are solved.
Of course I had to
remark: Because we have speech we are much better in
making war compared to other animal species.
Phrase nr thirteen is
from the present al Qaida leader in Iraq. I mention it
because I think it was a very important detail, it was
made in his first statement after he took over from
need help from scientists, let it be in the field of
communications, chemistry, medics, biologicals or
whatever what. You can live your dream and kill the
Americans on a large scale inside their bases. You can
fulfill your scientific dreams.
Phrase nr fourteen is
from CNN's war whore Christiana Armanpour. Why do I call
a whore where in fact she is a respected senior
That is because she understands the difference between a
'commodity driven war' and one that is not driven by
In the entire Iraqi war no CNN reporter has emphasized
that Iraq is very much 'commodity driven' (read stealing
the oil) but when Tony Blair resigns she says:
wanted military assistance in Bosnia although there are
no commodities over there.
(Or words of similar
phrasing, I do not recall her exact words but they
boiled down to the above.)
Not all my hobbies evolve around
war, death and destruction, or financial markets. No, I
also like to cook food and stuff. There will not be many
recipes but here is the index
to some food I made, it is just a small fraction of
what I cook. A very small fraction but the goal is to
come to a feast meal for the Iraqis and Afghanis. So
it likely will take a few more years...