The Coming Consequences of Banking Fraud

The Double Dip Recession, or the “W” shaped recovery that a minority of economists, such as Joseph Stiglitz, is now stating as a strong possible outcome of this current rally, should not be discussed in the realm of economics but rather in the more apropos realm of financial fraud. The fact that the upleg of the “W” shaped recovery that is occurring now will inevitably crumble in spectacular fashion will not be a result of any free market principle, but rather the direct consequence of a fraudulent scheme executed by an elite global financial oligarchy, otherwise known as Central Banks. If the mission of this current manufactured leg-up in Western stock markets was to fool the world into believing that global economies are recovering, then clearly, up until this point, the mission has been a resounding success. For those unfamiliar with the term “blowback”, it's a CIA term that was first used in March 1954 to describe the unintended consequences of US government international activities kept secret from the American people.

Though this term has primarily been used to describe the consequences of covert military operations, “blowback” is an appropriate term to use to describe the coming consequences of banking fraud because the US government, US Federal Reserve, Wall Street, the US Treasury, and the Exchange Stabilization Fund have all engaged in domestic and international financial and monetary transactions that have been kept secret from the world, and that will have severe and negative consequences in the not so distant future. In fact, I predict that the blowback of these activities will not only exceed, but far exceed, the fallout the world experienced in 2008 at the prior apex of this current crisis. Most people today can not even fathom how bad the situation will become primarily because of all the secrecy that the banksters have engaged in – in US Treasury markets, the gold markets, the US dollar markets, agriculture commodities, stock markets, and financial markets – in hiding reality from the people.

In an article I wrote three months ago, on June 10, 2009, titled, “Can Rising Stock Markets Serve as a Confirmation of a Crashing Economy?”, I stated, “Whether I am right or wrong about US markets tanking by summer’s end/fall’s beginning, if [we] position [our] investment assets based upon an understanding of the fraudulent monetary system, [we] can still continue to create wealth.” While true, I was a bit early in raising the proposition of a stock market correction the month before; I amended my prediction in June upon realizing the breadth of the manipulation schemes occurring in Western stock markets. In today’s markets, only a complete investment novice would try to predict market behavior without accounting for the massive government intervention schemes and forays into stock markets as well as the computerized manipulation of daily trading volume. One of the main reasons, but not the only one, that I amended my target for the end of this rally this past June to the fall season is the fact that fall normally marks the return of much higher daily trading volume from the traditional summer lulls. Thus, it is a much more difficult proposition for Central Banks and computerized trading programs to manipulate a continued rise in stock markets in the face of higher daily trading volumes.

However, should daily trading volume remain surprisingly low or muted this fall, as is also a possibility, I have no doubt that this market rise can persist for an extended period longer before these false gains are eventually flushed away (but, of course, not before all US financial executives have had ample time to exit their positions quietly). In fact, the development of this false rally was the main topic of my article. The other scenario, one that includes a significant rise in daily trading volumes that trigger the start of a second massive decline in Western stock markets, would not surprise me either. It’s just a matter of observing the signs that forecast the waning efficacy of the fraudulent stimulus of Western markets (or for this matter, the fraudulent stimulus of Chinese stock markets too).

Remember that it is only the timing of this decline that I am uncertain of, but I am very certain that a significant decline of a shocking nature is coming. The last time I issued an adamant warning of a similar nature was on April 23, 2008, when again, the only issue about a market crash was timing, though the US S&P 500 index peaked just 18 business days after I wrote that article and proceeded to fall by more than 50%.

To truly gain more clarity regarding this recent Western stock market rally, consider a hypothetical scenario in which a person was kept ignorant of any action in the US stock markets for the entire previous six months. Instead, imagine that he or she was given the task of predicting US market behavior over the past six month period solely based upon cold, hard US financial and economic data stripped bare of any of the media-slanted headlines that perpetually spin bad economic data as positive or “less bad” than it truly is. Based upon the economic data produced from the last six months, what do you think this person would conclude? That stock markets have soared during this time or that they had crashed?

Of course, factor in the plethora of evidence about numerous PPT interventions to “save” markets during this time, and the strong US stock market rally no longer seems so illogical. But strip away any evidence of free-market manipulation and interference and in the face of true, undistorted economic data, our current market rally would be enormously puzzling. And this point alone should be sufficient to tell you how this rally will end. The inevitable conclusion of this rally isn’t just about the unsustainability of the massive bailout programs implemented by global Central Banks that have engineered this current market rally out of thin air, but its manifestation should trigger an investigation into the outright fraud committed by Wall Street, banking institutions, and Central Banks that has been aided and abetted by financial journalists.

For example, consider the following stories:

Demographers recently reported that Florida, the state known as the “mecca” for wealthy retirees in America, suffered its first population decline last year in more than 60 years, an event that delineates the collapse in wealth of American retirees and an event that is likely to repeat this year.

At the end of this past July, one of the largest ports in America, Long Beach, reported that the 20% year-over-year cargo business decline is among the sharpest since the Great Depression. This is not a trend specific to Long Beach. “It’s phenomenal how much things fell away even since December,” said Paul Bingham, managing director of global trade and transportation for IHS Global Insight, the business research firm that monitors North America’s biggest ports for the National Retail Federation.

As of September 4, 2009, shadowstats.com reported that unemployment in the US is now near 21% and is showing no signs of improving any time soon (when factoring in discouraged workers, part-time workers that can’t find full-time work, unemployed workers that have fallen off the unemployment roll, etc.). In fact, yesterday, Manpower’s Employment Outlook Survey reported that US employers’ hiring plans for the upcoming fourth quarter dropped to the lowest level in the history of its survey which dates back to 1962.

On August 15th, when BB&T (BBT) purchased failed US bank Colonial Bank, it wrote down Colonial Bank’s loans and real estate collateral by 37% and Colonial Bank’s construction loans by 67%. Yes, 67%! The severe markdowns of Colonial Bank’s assets should have set off warnings akin to a five-alarm fire among the financial media, but it did not, for the media increasingly caters to the interests of the elite bankers of this world at the cost of truth and freedom. If there are several things we can deduce from Colonial Bank’s failure, it is the following.

Though the Federal Deposit Insurance Corporation (FDIC) refuses to disclose the names of the banks on its “watch list”, it can be safe to assume that a bank just does not go bankrupt overnight and that the process of going bankrupt can be predicted many months in advance by personnel with access to a bank's financial statements and knowledge of its true financial condition. In fact, various newspaper articles reported that Colonial Bank was in negotiations with the FDIC as early as March, 2009, yet not one time, did the FDIC force Colonial Bank to come clean regarding its true financial health before it finally shuttered the bank five months later.

The fact that the FDIC is spotting massive trouble in the American banking system and covering it up should be massively worrisome to Americans. Because revelations regarding the truth about a US bank’s health only seem to occur after it fails, the favored handling of American banks with kid gloves by the FDIC should immediately beg the question, “How many more US banks are legitimately bankrupt today and just operating on fumes?”

Personally, I would not be surprised if sometime within the next six months, a considerably larger US bank failure causes a massive ripple effect of much greater consequence. Banks that are currently struggling with unreported and covered-up deepening problems of loan delinquencies such as Wells Fargo (WFC), may be among the large banks that are candidates for future bankruptcy despite the public categorization of such institutions in the “too-big-to-fail” category. Unfortunately, Wells Fargo, from a political standpoint, does not have the “most favored bank” status of a Citigroup (C) or JP Morgan (JPM), two institutions deserving of bankruptcy but clearly favored by the US Federal Reserve and the US government.

When one considers the fact that all government or state produced economic statistics have been massively distorted towards the side of optimism and away from reality throughout this global financial crisis, one should be even more worried when the occasional sparse negative statistic is reported, for it is likely that these statistics too are misrepresenting the truth. Thus, in the face of all negative news that points to zero foundation and zero economic structural improvements, how has a multi-month stock market rally been able to spread across Asia, Europe and the US? Again, the answer is fraud, and thus should be analyzed through the prism of fraud and not the false prism of “economics”. There is no “economics” behind this latest global stock market rally, only fraud.

For many weeks in August, just four stocks accounted for as much as 40% of composite volume on the NYSE: Citigroup, Bank of America (BAC), Freddie Mac (FRE) and Fannie Mae (FNM). In early 2007, Citigroup, Fannie Mae and Freddie Mac accounted for roughly 1% -3% of NYSE volume, a far cry from its recent 35%+ collective weight of the composite NYSE volume. Remember that this huge volume anomaly persisted not just for one day but for weeks on end during August. If Citigroup, Bank of America, Fannie Mae and Freddie Mac were a pharmaceutical collective that just discovered a cure for cancer and AIDS, then such volume anomalies would make sense. However, such massive trading volumes, as a percent of composite volume for the entire NYSE index, makes zero sense for companies, that for all intents and purposes, are on government bailout lifelines. It makes no sense, that is, unless massive free-market intervention is occurring in an attempt to save these firms.

Again, when viewed through the “fraud prism”, such activity makes complete sense. It is obvious that the “Rise of the Machines” has created markets that are now dominated by computerized high frequency trading programs that can execute trades as quickly as 0.5 milliseconds and have as their sole purpose the creation of short-term market distortions driven by statistical arbitrage that can be used to game the system and cheat their clients. Though this link describes how this scheme works in commodity markets for those that have been following the New York Stock Exchange, the use of high frequency trading programs to game the system at the expense of the retail investor has been glaringly obvious especially in the trading behavior exhibited this past summer.

The ironic part of this huge scam that has merely just re-inflated another massive stock market bubble is that the segment of the public that is so easily angered by government bailouts, billion dollar bonus plans for Wall Street executives and the chicanery of JP Morgan and Goldman Sachs (GS) (and justifiably so), are the very same people that so passively accept the mountain of lies that passes for financial reporting today (inexplicably so). It is ironic that this same collective of people, instead of rejecting this mountain of lies, continues to listen to their financial advisers at global commercial investment firms, even though these advisers are the same group of people that miserably failed to see the crash that started in the spring of 2008, when the factors behind the pullback back then was just as clear as the factors behind the future pullback that will occur in the near future. It is ironic that this same group of people continues to support, participate and fund a system that cares only about using their clients' money to lie, cheat and steal from them when a simple withdrawal of funds from the system is the antidote to ignorance-induced paralysis that will once again create massive crisis-induced losses in the future. Pulling one’s money from one’s current firm and switching to another firm that participates in this web of lies and deceit is not a solution either.

It is ironic that it is the same group of people that so readily accepts the Western media’s correct analysis of China’s stock market as a huge bubble through the lens of Austrian economic principles that simultaneously rejects any similar notion as applicable to US or UK stock markets, and instead, readily embraces heavily flawed and unsound Keynesian economic principles when evaluating Western stock markets. It is ironic that the same group of people that foolishly equates being “American” with blind support of the US stock market (i.e. “being bearish on the US market is un-American!”) is also completely ignorant of both the massive fraud that is perpetrated in US stock markets as well as the tenets of the US Constitution that sound great objections and warnings to the ruinous and foolish monetary policies that are implemented by bankers as their “solution” to our current economic crisis. And finally, the greatest irony of all is that the anger that brews inside those that have been tragically hurt by this crisis can coexist with the failure to recognize that it matters not in America if the President has the last name Clinton, Bush or Obama – that monetary and fiscal agenda inside the US for the last 17 years has not wavered nor changed one iota during this period of time because it was not these men that have been in charge of the economy but the men that manufactured these men’s rise to power and that control the US Federal Reserve and the world’s Central Banks, and thus the global monetary policy.

If one can not see the connection between Presidents, Prime Ministers and the banking families that rule Central Banks, one merely needs to open up a newspaper and follow their lives after they leave government office. It is not just a coincidence that ex-British Prime Minister Tony Blair, after leaving office, took a part-time consulting job with JP Morgan’s Jamie Dimon that reportedly pays him $5 million per year as well as another well-paid consulting position with Zurich Financial Services. In office, Mr. Blair was a consultant to the banking oligarchs in secret; out of office, he is free to be a consultant publicly. And one can be certain that current UK Prime Minister Gordon Brown and US President Barack Obama will be offered very considerable salaries and fees by the world’s top financial oligarchs as thanks for their current and past service to them once they leave office as well (especially Gordon Brown, for selling out his countrymen and selling more than half of England’s bank reserves to ensure that the financial oligarchs could maintain the US dollar as the de-facto international currency for 10 additional more years than it deserved to hold this status).

In the end, what is the most frustrating facet of these huge con games executed by the financial oligarchs is that the group of people that this article is most intended to help is often the group of people that will take most offense to this article and most steadfastly refuse to see the truth. Instead, they will only realize the truth when the economic future unfolds to the blueprint of those of us the media labels as “gloom and doomers” because we base our predictions on reality instead of fantasy and lies. Instead of labeling us as “gloom and doomers”, if the media at large ever conducted an unbiased analysis of the predictions of the “gloom and doomers” for the past 3 years, they would discover that the “gloom and doomers” have been spectacularly accurate in the majority of their calls while the financial demagogues they continually fawn over (that only serve the interests of the bankers) have been spectacularly wrong in the vast majority of their predictions. Yet, those that serve the international banking cartel with glowing and rosy predictions of economic recovery never suffer the negative consequences of being wrong all the time as the mass media all too happily continues to provide the largest public platform and the loudest voices to these people. Perhaps, if it is accurate to label “gloom and doomers” as realists, then one should label the optimists that make their calls based upon perpetrated fraud as banking shills and cogs in the investing machine, for their societal contribution of greatest significance is an opiate cocktail for the masses that is a mixture of deceit and lies mixed with unbridled optimism.

As they often say that life imitates art, I close my article today with a speech from the film “V for Vendetta” that is frighteningly relevant if you listen to this speech with a critical ear and replace the references to the war on terror in this speech with the current war the bankster fraudsters are committing against the people. A sound money backed by precious metals, can be the people’s liberation from this war. Anything that falls short of such a solution will be just another scam in an already long line of scams, of a solution sold to the masses, that in reality, is no solution at all.

Comments

[Roger Knights:]

"transactions that have been kept secret from the world, and that will have severe and negative consequences"

The Portrait of Dorian Grey--hidden in the attic.

Sep 09 10:42 AM

[Roger Knights:]

"transactions that have been kept secret from the world, and that will have severe and negative consequences"

The Portrait of Dorian Grey--hidden in the attic.

Sep 09 10:42 AM

[Leftfield:]

Fraud as far as the eye can see, but, as the stock market has been propped up since March, can low interest rates be maintained for awhile during a decline in the dollar and rising commodities to force people to risk, and thus, rising stock markets with volume for awhile? I imagine this would be the "jobless recovery" that would not be a recovery for Main St. at all, but carry through the next election, facilitating the election/reelection of frauds-as-usual and even worse problems for the future.

Sep 09 10:45 AM

[CautiousInv...:]

If we look back at recent economic history and look for bubbles that have imploded, we quickly come upon the S&L crisis, the commercial property bubble (Japan), the emerging market bubble (we helped fuel it), the dot.com bubble and most recently the housing crisis.

In each case, successive bubbles were fostered through irresponsibly loose monetary policy that distorts normal market signals, encouraging speculation and consumption. And in each case the bubbles collapsed through tightening of credit to address imbalances and speculative excesses but well after the fact.

The Japanese experience is eerily similar to our recent crisis as that it was brought on by a high rate of domestic savings (we had China) easy money, loose oversight, an influential cartel and lax underwrting standards. Their response was to raise interest rates and then lower them when the scope of damage became apparent; the stock market cratered as did commercial and residential real estate prices.

The Japanese economy stagnated for the next decade and for a variety of reasons, including demographics and aging population, it is only a shadow of its former self. Most of this is a result of a farrago of poor policy responses to the crisis and a stubborn unwillingness to force the zombie banks to writedown indisputably bad assets.

Despite our unwillingness to force the banks to writedown bad assets, the unprecedented scale and scope (global) of current monetary and fiscal policy clearly has the potential to create the next bubble and I believe it will. Understanding that the effects of our monetary policy is not restricted to our shores, the massive injections of liquidity do not have to remain within the US and will trickle towards the next puddle of speculative excess.

If I am correct in where I think it will be.....and its just speculation on my part though alarm bells have already been heard.....it will be a big one. But that's part of the process; each bubble gets bigger, each inflicts ever more damage and each new bubble requires ever greater amounts of liquidity.

Sep 09 11:10 AM

[Warm_Paw:]

This is a good article. It's obvious there are no shortage of negatives in the face of this bull run.
The cause of the crisis is the sub prime mess.
No one discusses the sub prime mess anymore.
Just like it went away over night.
Is it reality that markets are being promoted to unwind those toxic assets on the unsuspecting public.
To recoup share price on zombie banks to some acceptable level and leave the public holding the bag when that level is reached?
I believe sub prime mortgages come due mid november and that option ARMS then peak in coming due right into 2010.
The options ARMS are in larger volumes than what we've experienced with the sub prime mortgages.
With low employment, the world economy in a holding pattern, oil amassing to the point there is little storage remaining,taxpayers going bankrupt and now a deficit (not spiraling) but instantly out of control, I'm not very bullish either.
The media use percentages to claim certain stocks have gained fifty percent over the last three months after the given stock has collapsed 1000%. A $1 stock gaining .50 is fifty percent. Percentages are deceiving.
As the economic indicators continue their downward trend the stats are being discussed as not as bad as what investors expected.
Who decided what investors expected?
Downward is downward, no amount of lipstick will help the pig.
Greed seems to keep the high rollers coming back. Or is it stimulus dollars being used to prop up an otherwise barren landscape.
As for sideline money - you don't lose trillions of dollars of wealth and still have sideline money. There is no cavalry. Come up with a new source of eternal springing hope.
Sideline money is a dead horse.
Mid september the pain begins.
Of course AIG will be worth $100 a share while having an intrinsic value of -$38 billion dollars. Such is the ability to manipulate these days. Either way, my moneys to precious to have it pulled out from under me like a rug.

Sep 09 11:33 AM

[Mrudula Shah:]

The author vents his frustrations as if he is a pro-China anti-Western individual, going as far as chraging the likes of Tony Blair and Gordon Brown as pupets of banking ologarchs - an exageration of the opposite kind!!

Sep 09 11:40 AM

[Michael Clark:]

Great article, J.S. The phoney stock market rally can fool some of the people all the time -- but not all of the people all of the time.

The Fed is propping up the bond market, to keep interest rates low. The banks are propping up the stock market -- I'm certain that they had some agreement with the Fed to cease short-selling after receiving their bailout payoff. They are all working to try to get consumers to throw their money back into the market, to create another bubble. The role of the Fed is to manage money flow to avoid bubbles -- but Greenspan decided the role of the Fed was to create perpetual summer, perpetual fruiting of the economic plant.

Sep 09 11:43 AM

[Michael Clark:]

Just because he has a Korean name doesn't mean he's pro-China. I see the world very much the same way Mr. Kim does and I'm neither anti-American nor pro-Chinese. Blair and Brown are NOT in bed with the bankers? Are you saying that Blair did not take a job with JP Morgan?

I'd venture to conjecture that Mister Kim is a loyal Korean American who is disgusted with the corrupt oligarchy that is running the world and running it off a cliff. Like many of the rest of us. We know the rich take care of each other. We know that the powerful arein bed with each other.

When corruption stinks it is foolish to pretend it does not.


On Sep 09 11:40 AM Mrudula Shah wrote:

> The author vents his frustrations as if he is a pro-China anti-Western
> individual, going as far as chraging the likes of Tony Blair and
> Gordon Brown as pupets of banking ologarchs - an exageration of the
> opposite kind!!

Sep 09 11:51 AM

[Mrudula Shah:]

It's equally stupid to think that the western democratic system and the political leaders and all major bank executives are out to get the ordinary citizens and drag the economy down!! Tell me how these oligarchs and political leaders benefit if the economy collapses!! No body, including each one of them, benefits!! I Do not think these guys are that stupid and are taking some stupid steps!! Stupid are those who believe those who say the world is about to collapse!! Also, I am not saying Mr. Kim is a Chinese - I am just saying he expresses Pro-China anti-Western thoughts!! It's clear to me that with Americans cutting down heavily on their consumption habits and moving towards more savings (because theyt may be concerned with their social security and medicare syastems health), the Chinese, Japanese and Korean economiies are hurting!!


On Sep 09 11:51 AM Michael Clark wrote:

> Just because he has a Korean name doesn't mean he's pro-China. I
> see the world very much the same way Mr. Kim does and I'm neither
> anti-American nor pro-Chinese. Blair and Brown are NOT in bed with
> the bankers? Are you saying that Blair did not take a job with JP
> Morgan?
>
> I'd venture to conjecture that Mister Kim is a loyal Korean American
> who is disgusted with the corrupt oligarchy that is running the world
> and running it off a cliff. Like many of the rest of us. We know
> the rich take care of each other. We know that the powerful arein
> bed with each other.
>
> When corruption stinks it is foolish to pretend it does not.

Sep 09 12:28 PM

[secmaven:]

The beat goes on! Enjoy the Bull Rally whilst it continues. Look for
garbage stocks that have not yet enjoyed their day in the sun. Try PMI.

Sep 09 12:40 PM

[Michael Clark:]

Don't get me wrong: our business leaders would love to be back in year 2000 when everything seemed to be going fine. They'd engineered an almost flawless system where inflation (wage pressure) was under control and production and labor costs were down and they were making absurd profits. They didn't want it all to end. They thought it would go on like that for ever. And when the bubble popped they didn't know what had hit. And they didn't know what to do.

They had two choices: deflation now or deflation later. Deflation now would bankrupt many companies, many banks, many indebted individuals. And it would throw most of the current politicians out of office. And it might lead to revolution in many western nations.

Deflation later gave them time to try to trick the world. Of course, deflation later is also making the problem worse. Debt is the problem. Debt as a problem has to be faced, head-on. Instead, the Fed and the banks are fueling a fake stock rally, they are singing praises of worthless companies to try to get Americans to join the party on Wall Street, believing that 'positive thinking' might cure the problem. It's the only thing they see that they can do, delay the onslaught with subterfuge and misrepresentation. It's their system -- the system that makes them rich and powerful -- and if it goes down, they go down with it.

Politicians and bank executives aren't out to get ordinary citizens. They are out to line their own pockets, without regard for anything else. And now, as it is all coming apart at the seams, they are stalling for time, praying for some miracle, because they don't really know what else to do.

We have two paths: one is to face the truth now, and the consequences -- massive deflation and economic depression; or, to lie, deceive, and play for time. And try to extend the time before we have to face massive deflation and economic depression.

The current problem of American leaders is that they are afraid to face the truth. Why are they afraid to face the truth -- because the truth is that they are in danger and they destroyed the goose that laid the golden egg because they could not control their greed.


On Sep 09 12:28 PM Mrudula Shah wrote:

> It's equally stupid to think that the western democratic system and
> the political leaders and all major bank executives are out to get
> the ordinary citizens and drag the economy down!! Tell me how these
> oligarchs and political leaders benefit if the economy collapses!!
> No body, including each one of them, benefits!! I Do not think these
> guys are that stupid and are taking some stupid steps!! Stupid are
> those who believe those who say the world is about to collapse!!
> Also, I am not saying Mr. Kim is a Chinese - I am just saying he
> expresses Pro-China anti-Western thoughts!! It's clear to me that
> with Americans cutting down heavily on their consumption habits and
> moving towards more savings (because theyt may be concerned with
> their social security and medicare syastems health), the Chinese,
> Japanese and Korean economiies are hurting!!

Sep 09 12:57 PM

[ussmls7:]

Great article,it would be something if a group of people join together to go after these crooks,the known & unknown. I read a article by R.D.Bradshaw,"The Goldsmiths-Part XCVIII", posted Sep 4,2009. If you read his article & like what you read,he ask you to contact him at analysis-news.com.

Sep 09 01:18 PM

[Avooch:]

Mr. Kim,

A most provocative article. I've also concluded that the US stocks I follow are massively overpriced.

I have GE a buy at $6 vs. its currently $14. And even at $6 that is a 18x EBITDA a very very healthy premimum.


For some specific fundamental analysis of GE, ABB, ALS, EMR, RBC, AMSC and other stocks check out my weblog - linked above.


-----------------
Don't Get Massacred !

Gudovac1941

Sep 09 01:28 PM

[nova:]

CautiousInvestor wrote:
"The Japanese experience is eerily similar to our recent crisis"

This is a incorrect statement. Japan's crisis took place in a very "stable" geopolitical environment. Japan was continued its domestic & international policies. Until now, Japan just "lost" 15 years of its development. However, Japan's demographics and skyrocketing of China industrial & financial might are changing "the game".

As for the USA, the present economic & political crisis, as well as the US active participation it three major global wars (Iraq, Afghanistan, Pakistan), have led to a major, adversed to US national interests geopolitical shift.

Conclusion: the USA does not have "a luxury" of Japan lost decade.

Sep 09 01:53 PM

[epeon:]

Man, talk about gloom and doom. Anyways, I think it is far exaggerated. We have always had fraud and we have always had exaggeration. But, a couple of points.

Blowback is not a term coined for the cia. It occurrs many places, primarily in the blowback principal of firearms. Many of the low caliber weapons have a simple blowback mechanism that rechambers the weapon for the next round. However, as the round becomes more powerful, the blowback effect has many unintended consequences. These include ejecting the old shellcase with such force that the shell case will travel 20 meters. If the round is large enough, you can actually see a flame from the ejection port. Large rounds make a simple blowback weapon non-workable as the force will break things. Thus, Blowback referred to the unintended consequences of ejecting a shell from a weapon. As the shell became larger, the unintended consequences become larger and larger. This was an analogy for the consequences of CIA actions and, as the actions became larger, the blowback was larger.

As far as the huge writeoffs, yes , we have had them and, no doubt, will have more. Many bonds were selling for 50% discounts against their face value a few months ago. That has changed because we now have a modified "mark to market" rule. The old rule caused a lot of these problems because it exaggerated the losses of banks. If you could not market a security it was assumed to have a value of zero. That is clearly not right, but it caused a lot of panic.

That politicians are on the "take" is no suprize. Sure, it is legal, but do you think Reagan taking large speaking fees was anything different then what we are doing today (at least Reagan was interesting, but both Ford and Carter were getting similar fees - ugh!).

In short, there is nothing new in your article. Just same old, same old.

Sep 09 03:32 PM

[Mrudula Shah:]

I agree with you it has been a traders' slot game. How many on this comments board are not really such traders? Why just blame only politicians and bankers who are really part of this gambling society? Yes there is a corrupted world out there but to call Tony Blair and Harold Brown such in an article is way out of line. Anyone who states that is certainly exagerrating and looses the perfect credibility.

On Sep 09 12:35 PM Reggie Middleton wrote:

> I 2nd Michael Clark in support of Mr. Kim (Kim is a popular Korean
> name, btw).
>
> My support backs Mr. Kim's opinions and assertions 100%, and I am
> quite unbiased. All I do is research and invest, with no axe to grind
> or special interests. Read on...
>
> Corporate execs making material misrepresenations that I called them
> out on clearly, but the media ignored until year later: boombustblog.com/Reggi...
>
>
> Banks that are obviously insolvent, even according to their own optmistically
> slanted reporting, yet still trading near or above book value, and
> still operating as an ongoing concern: boombustblog.com/Reggi...
>
>
> Why Doesn't the Media Take a Truly Independent, Unbiased Look at
> the Big Banks in the US?: boombustblog.com/Reggi...
>
>
> Worthless companies now rallying several hundred percent in price
> - What a market for stock pickers: boombustblog.com/Reggi...
>
>
> The Fed Believes Secrecy is in Our Best Interests. Here are Some
> of the Secrets: boombustblog.com/Reggi...
>
>
> Trust me, I can go on for a long time, but hopefully you all have
> got the message. The market is being propped up on a parade of fumes
> and propaganda powered by program trading and media misinformation
> leading the ignorant, those in cahoots and the uncaring.
>
> I hate to be so blunt, but in attempting to invest in a market where
> fundamentals now mean so little, it has become obvious this is more
> of trader's slot game than a forum for fundamental analysis.

Sep 09 03:50 PM

[market ace:]

Anyone that does not see the truth in this article has their head way up a place it does not belong. This describes modern "markets" to a tee. Anyone that wants to play in this game better have deep pockets and love losing money in the end.

Interestingly after blasting my brokerage firm about the sham of the current US stock markets and my unwillingness to play except for stragic buys with close stops, they actually responded stating that they had advisors I could contact to help with planning to "unwind" from the US markets. This seems like very valuable advice.

Sep 09 04:02 PM

[Jason Tillberg:]

"A sound money backed by precious metals, can be the people’s liberation from this war."

The earliest Americans already spilled their blood for that. :(

Sep 09 05:28 PM

[thelibertyj...:]

Why do the bankers blame government for lax regulations, the regulators blame excessive risk-taking on bankers, while the media fraudulently ignores all of the corruption and portrays both of them as saviors? Because they all are one in the same.

Nice article. It was as if I were reading my own thoughts on this entire scam.

Sep 09 06:05 PM

[Alan Young:]

W-shaped "recovery", sure--because it's in the nature of the market to overshoot and correct. Not necessarily because of "fraud."

Politicians would like things to return to "normal" (or preferably better) ASAP, and it's not a crime to express optimism about the possibility, however remote. You need not agree, but who do you think is running this alleged conspiracy? People often agree about things that turn out not to be true; that's not necessarily fraud, either.

The last line is the most telling. Mr. Kim believes we have been suffering from this fraud, apparently, since 1970, when the dollar ceased to be backed by gold. You've had over 30 years to report this crime. A little late, now.

And of course, one can never be certain of what the market will actually do next. If the $SPX fails to fall back below 700 (or even 780), who will be the fraudulent one then?

Sep 09 06:59 PM

[rosey99:]

This is provocative, if IMO a bit paranoid. I doubt very much that the required level of coordination is possible for long, or that the parties involved have the brains or discipline to pull off such a grand scheme. I do agree that something has got to give, I just don't think the capitulation will be planned in any sense.

It's looking more and more like a game of musical chairs, and I doubt the players have any real idea about when the music will stop. They just think they do.

I do agree that when they are discredited, there will be some really interesting "interpretations" of what was done. And of course, who benefited the most. Nice post, there is a lot of material here.

Sep 09 07:38 PM

[TinyTim:]

"the US government, US Federal Reserve, Wall Street, the US Treasury, and the Exchange Stabilization Fund have all engaged in domestic and international financial and monetary transactions that have been kept secret from the world, and that will have severe and negative consequences in the not so distant future." that has been aided and abetted by financial journalists."

"The inevitable conclusion of this rally isn’t just about the unsustainability of the massive bailout programs implemented by global Central Banks that have engineered this current market rally out of thin air,"

Actually I think this rally is exclusively about the massive bailout programs and the transactions necessary to keep the balls in the air. Why else is everyone in govt so worried about a Fed audit?
Also, to quote a famous politician " It's not fraud if I do it"

Sep 09 09:02 PM

[The Economi...:]

BRAVO... freaking bravo.

Sep 09 09:58 PM

[lynnybee:]

My Grandma Josephine was born in 1915. She lived through the GREAT DEPRESSION . Years ago she told me two things that still ring in my ears: Never go into the stock market and do not trust the government. I have no trust left & am afraid. I'm just an average "older person" who feels as though she's been sold down the river by our government. I hear that the elderly in JAPAN shoplift their food, they are so desperate. Sincerely .............

Sep 09 11:38 PM

[debtacid:]

It's said that the children pay for the sins of their fathers. Well, I don't mind paying for my own father's little sins. It's paying for the sins of JP Morgan, Woodrow Wilson, FDR etc. that I have a big problem with.

Sep 10 01:09 AM

[derryl:]

Great article Mr. Kim, telling it like it is.

Re: 'conspiracy': somebody explained in a SA article or comment that explicit collusion is not required in order for a conspiracy to emerge. All it really takes is a bunch of people sharing a common world view and working to maximize their self-interest according to their common view. That worldview can be called "finance capitalism" and it is certainly the case that Rothschild banking interests are deeply entangled with global central banking. Whether these are just people who share the same agenda or whether there are masterminds lurking behind the scenes is an open question and the answer is moot because the effects are the same either way.

Mrudula Shah asks what bankster interest could possibly be served by taking down the global economy. The question assumes that wealth is the only value at play. But for centuries already the banksters have learned how to create money out of thin air. Wealth is simply taken for granted by these people. Now they want power, global power (always by proxy through frontmen, never in person). Some people want to own the world, others want to rule the world. These are the two faces of megalomania.

So if a reduced global economy is the price to gain power, so be it. In the V for Vendetta clip the lever to gain power was fear of a variety of bad things like terror and disease. Fear of bankruptcy and poverty is another good lever, so taking down the global economy would set the stage for a 'savior' to emerge. All we have to do is give him total power and he will stop the fear and pain. That's the sales pitch. We all know what totalitarians really do--mass murder and stifling of all kinds of dissent. Nobody is allowed to "talk about" the s___hole poverty economy so, "Problem solved".

Tyrants almost always believe that their rule is better than self-rule by what they consider 'the idiot serfs'. That's because megalomaniacs only see value in wealth or in power. They scoff at ideas like 'freedom', which they believe does not exist, so they cannot see that self rule serves values other than maximizing wealth and power. I would go so far as to call those other values "spiritual", as opposed to material. The whole "service to Mammon or service to Spirit" issue. We all need to make money to live but we don't have to eagerly sell our soul to do it. You can be a decent person and still make a decent living.

So in the context of an obviously manipulated monetary and financial environment is NOW the time for the powers to play the endgame? I don't think so. The mechanisms are in place for finance capitalism to destabilize our economies by pumping up debts of all kinds. These have been working in the US since the formal adoption of the fractional reserve banking/central banking system where all 'money' is created as debt. Exponential debt growth is very good for the people who have the money but very bad for people who have the debt. "Indentured servitude."

Gold was a problem until 1971 because it was an alternative form of money that banksters couldn't print to order. After Nixon nixed convertibility fiat debt-money went viral. Controlling money is key to ruling the world. So watch for any move towards a single global currency. Controlling oil, the physical lifeblood of modern economies, is also key to ruling the world, so watch out for carbon control legislation that gives governments an effective mechanism to control our energy use. The pieces aren't in place yet for the final thrust to a global currency, and there are still a lot of credible anti global warmists raining on Al Gore's ambitions, so I think we have a decade or maybe considerably longer before the final push. Meanwhile our life in bubbleville will go on. I don't think the powers will permit a deflationary depression so we could see some novel QE reflation initiatives.

Really, I'm not paranoid. I'm convinced. I'm convinced there are a lot of people out there who want to control me for my own good, and I am convinced they are diligently working towards gaining the power to do so. They are not huddling in secret places. They are explaining their agendas in detail during election campaigns, all the good things the government is going to do for us. They are convening at all kinds of "global governance" meetings, widely publicized and hailed by the bought and paid for media as wonderful advances for humanity. Sheeple love it and can hardly wait to abdicate whatever personal responsibility they are still compelled to accept. Humans, like me for e.g., are not so keen on the whole project.

Sep 10 03:45 AM

[Did U Think...:]

GREAT analogy. If the bankers are ever forced to look at it they die...


On Sep 09 10:42 AM Roger Knights wrote:

> "transactions that have been kept secret from the world, and that
> will have severe and negative consequences"
>
> The Portrait of Dorian Grey--hidden in the attic.

Sep 10 06:20 AM

[Roger Knights:]

"the US government, US Federal Reserve, Wall Street, the US Treasury, and the Exchange Stabilization Fund have all engaged in domestic and international financial and monetary transactions that have been kept secret from the world, and that will have severe and negative consequences in the not so distant future."

It sounds as though the author has got wind of a Big Secret that he can't spell out because he can't back it up by outing his source. It's just occurred to me what this might be. (I first read it in a comment here on Seeking Alpha about three weeks ago, and I've posted it myself a couple of times here as a possibility.) Namely, that Asian central banks have secretly been offered the chance to buy Treasuries at a discount. This would explain what's otherwise inexplicable to me: why there is still strong demand for them.

It's already been revealed that the Fed is engaged in a shell game with Agency bonds held by foreigners, buying them from them on the QT in exchange for their buying Treasuries. But this is mostly a PR gesture, and not something substantive that would shake the foundations if it came out. Without low interest rates in the US, real estate would collapse, followed by the banking system, followed by trade, followed by the government.

Of course, I have no evidence that this trickery is occurring. But maybe a financial reporter would start asking his sources if they think such a thing might be happening. Given that necessity knows no law, it's a possibility.

Sep 10 07:42 AM

[H. T. Love:]

And yesterday GE was upgraded with an $18 price target. The usual bounce followed. Several months back, I valued it liberally at $8-$10 at the most. If I were to do that again, with current information, I would be at your price, I'm sure.

The pumping continues.

HardToLove


On Sep 09 01:28 PM Avooch wrote:

> Mr. Kim,
>
> A most provocative article. I've also concluded that the US stocks
> I follow are massively overpriced.
>
> I have GE a buy at $6 vs. its currently $14. And even at $6 that
> is a 18x EBITDA a very very healthy premimum.
>
>
> For some specific fundamental analysis of GE, ABB, ALS, EMR, RBC,
> AMSC and other stocks check out my weblog - linked above.
>
>
> -----------------
> Don't Get Massacred !
>
> Gudovac1941

Sep 10 08:49 AM

[Hmm?!:]

Mrudula,

The question that begs to be answered is............how are these politicians suddenly worth millions per year as consultants? Consultants are generally industry experts, not government generalists.


On Sep 09 11:40 AM Mrudula Shah wrote:

> The author vents his frustrations as if he is a pro-China anti-Western
> individual, going as far as chraging the likes of Tony Blair and
> Gordon Brown as pupets of banking ologarchs - an exageration of the
> opposite kind!!

Sep 10 09:26 AM

[Living4Divi...:]

" It is obvious that the “Rise of the Machines” has created markets that are now dominated by computerized high frequency trading programs that can execute trades as quickly as 0.5 milliseconds and have as their sole purpose the creation of short-term market distortions driven by statistical arbitrage that can be used to game the system and cheat their clients. "

This is half true and half untrue.
The untrue part: HFT does not "drive the markets" in that the market is not artificially driven up or down by HFT
The true part: HFT is merely a way to game the system and clip pennies off of each trade. HFT cheats the smaller players out of billions each year. It should be outlawed, but it does not determine the overall price direction of the market.

Sep 10 09:39 AM

[Ed Zimmer:]

Mr. Kim makes an important point on the trading volumes, which are available for anyone with a pulse to look at (and have been the subject of more than one SA post). Four to Six companies with massive volume that started in July-August, none of which should have hardly any value at all. 4-6 companies out of some 13-14 hundred that trade on a daily average, responsible for 30-40% of the volume. And it's the same 4-6 companies, day in, day out. HFT's are making it a sucker's bet for the small investor.

As far as moving your investments out of stocks, if it's in a retirement account, you can't just take it out and put it under the mattress (at least not without a massive "tax" penalty) and the alternative investments take more effort than most people are willing to put forth as they try to keep their job and cut their expenses. We have yet to see the major pullback in consumer spending as people retrench, but once people start patching their clothes, patching their homes and simplifying, you will likely see the consumer part of the GDP at less than 50% instead of 70%

Sep 10 10:21 AM

[Lilguy:]

While there may be a grain (or two) of truth in this article, it is so full of opinion and color that it loses just about all credibility. So many words, so little substance.

I'm a lot less conspiratorial, a little more analytical (& balanced), and maybe a little more optimistic (tho not by much) than Mr. Kim.

Sep 10 10:22 AM

[yodoc:]

I agree, it seems that for the last 80 years the natural order of economic cycles has been interfered with by govts. While some of this may be due to good intentions and some due to re-election pressures, it has resulted in ever growing amounts of debt. We must be getting close to the limit because there is now way that a stimulus or whatever you want to call it can be of the order of 50 to 100 trillion and higher. Not until currencies have lost 90%+ of their purchasing power.
I think that the stock market may be up because the belief is that they will do anything to avoid deflation. I suspect that they are making deals with God that if they manage to avoid a total meltdown that they will fix things for the future. (Like Kubler-Ross Death and Dying). They will keep interest rates low as long as they can and I think they will only raise them if inflation gets out of control. China is being given enough time to morph it's US$ holdings into commodities and resource companies and ventures. So when all of Europe and the US devalue their currencies at the same time, then commodities will go up, viable companies will see their stock go up because the measuring stick whether it be euros or dollars or whatever will be worth less in purchasing power. THat to me is why they talk about square roots as the shape of the market indices for the future. Some stocks will go up a lot and some heavyweight zombies will be a drag on the indices. When interest rates go up (if they do, Japan's rates have been low for a long time) it could affect the market and housing prices, but I just don't see them raising rates until there is inflation that is substantial, by which time they will have monetized away a chunk of debt. Cash may not be trash yet, but it's going to happen at some point. Get a 30 yr fixed mortgage and 10 years from now the payments could be very easy, provided of course that deflation and implosion are averted.


On Sep 09 11:10 AM CautiousInvestor wrote:

> If we look back at recent economic history and look for bubbles that
> have imploded, we quickly come upon the S&L crisis, the commercial
> property bubble (Japan), the emerging market bubble (we helped fuel
> it), the dot.com bubble and most recently the housing crisis.
>
> In each case, successive bubbles were fostered through irresponsibly
> loose monetary policy that distorts normal market signals, encouraging
> speculation and consumption. And in each case the bubbles collapsed
> through tightening of credit to address imbalances and speculative
> excesses but well after the fact.
>
> The Japanese experience is eerily similar to our recent crisis as
> that it was brought on by a high rate of domestic savings (we had
> China) easy money, loose oversight, an influential cartel and lax
> underwrting standards. Their response was to raise interest rates
> and then lower them when the scope of damage became apparent; the
> stock market cratered as did commercial and residential real estate
> prices.
>
> The Japanese economy stagnated for the next decade and for a variety
> of reasons, including demographics and aging population, it is only
> a shadow of its former self. Most of this is a result of a farrago
> of poor policy responses to the crisis and a stubborn unwillingness
> to force the zombie banks to writedown indisputably bad assets.<br/>
>
> Despite our unwillingness to force the banks to writedown bad assets,
> the unprecedented scale and scope (global) of current monetary and
> fiscal policy clearly has the potential to create the next bubble
> and I believe it will. Understanding that the effects of our monetary
> policy is not restricted to our shores, the massive injections of
> liquidity do not have to remain within the US and will trickle towards
> the next puddle of speculative excess.
>
> If I am correct in where I think it will be.....and its just speculation
> on my part though alarm bells have already been heard.....it will
> be a big one. But that's part of the process; each bubble gets bigger,
> each inflicts ever more damage and each new bubble requires ever
> greater amounts of liquidity.

Sep 10 10:54 AM

[Michael Clark:]

Yodoc:

You have us in the deal-making stage. I still have us in the denial stage. Next comes anger. I thought this anger would be the bulls blaming the bears for short-circuiting the new bull market.

Deals with God if he won't lower the hammer are the third-stage. Are we there already?


On Sep 10 10:54 AM yodoc wrote:

> I agree, it seems that for the last 80 years the natural order of
> economic cycles has been interfered with by govts. While some of
> this may be due to good intentions and some due to re-election pressures,
> it has resulted in ever growing amounts of debt. We must be getting
> close to the limit because there is now way that a stimulus or whatever
> you want to call it can be of the order of 50 to 100 trillion and
> higher. Not until currencies have lost 90%+ of their purchasing power.
>
> I think that the stock market may be up because the belief is that
> they will do anything to avoid deflation. I suspect that they are
> making deals with God that if they manage to avoid a total meltdown
> that they will fix things for the future. (Like Kubler-Ross Death
> and Dying). They will keep interest rates low as long as they can
> and I think they will only raise them if inflation gets out of control.
> China is being given enough time to morph it's US$ holdings into
> commodities and resource companies and ventures. So when all of Europe
> and the US devalue their currencies at the same time, then commodities
> will go up, viable companies will see their stock go up because the
> measuring stick whether it be euros or dollars or whatever will be
> worth less in purchasing power. THat to me is why they talk about
> square roots as the shape of the market indices for the future. Some
> stocks will go up a lot and some heavyweight zombies will be a drag
> on the indices. When interest rates go up (if they do, Japan's rates
> have been low for a long time) it could affect the market and housing
> prices, but I just don't see them raising rates until there is inflation
> that is substantial, by which time they will have monetized away
> a chunk of debt. Cash may not be trash yet, but it's going to happen
> at some point. Get a 30 yr fixed mortgage and 10 years from now the
> payments could be very easy, provided of course that deflation and
> implosion are averted.

Sep 10 12:01 PM

[1mania4u:]

It's a system. It isn't fair, it isn't perfect, but seriously, if one has time to write articles and comments on Seeking Alpha, then one is probably not lacking for food, water or shelter, and most likely enjoys a quality of life far greater than many inhabitants of this planet. In addition, enjoying the freedom to say whatever one wants and having rights protected by that system is an amazing thing in and of itself. I share some of Mr Kim's concerns. Collusion, power and greed are endemic to any human system. Certainly the central banks of the world have worked in unison to attempt to place what amounts to price supports under global asset prices, which were deflating so quickly in the 4Q 2008 that the viability of the entire global capitalist system was being threatened. The reality is that this is a SYSTEM, and we are ALL interconnected in it, and the failure of that system was unlikely to improve the life of ANYONE, (minus a select few who rule by fear and pure force). Go out into the Alaskan wilderness without food or shelter for a week on your own and see how long you survive, (or even take food and a four season tent and see how hard survival is).

The truth is that if one is consumed with power and greed, one will reap what they have sown, which is emptiness. Some of the most unhappy people I have ever known are very wealthy. The happiest people I have ever met have invested in friendships and sought a life of helping others. There are certainly people in the halls of our government and banking industry pursuing both paths, so it is not fair to indict ever member of the "system". The truth is that you get what you give.

All this said, I will acknowledge a concern that we witnessed the implosion of an unsustainable overlevered global financial system in the 4Q 2008. This imbalance has clearly required a transfer of much of that leverage onto central bank balance sheets in order to maintain the system and slow the process of correction, which is still in motion. Will this support mechanism be able to be unwound and the financial system be able to be returned to a more "free" market mechanism? This is the $64,000 question, which probably will not be answered until either a bigger imbalance surfaces and creates another crisis, OR the process is slowly unwound successfully. This is very, very difficult to assess.

In the meantime, invest in the lower end of the economic spectrum, that may be our greatest hope.

kiva.org

Sep 10 12:31 PM

[Peter Bolden:]

It scares me when I read an article like this. TWhen he speaks about financial oligarchs that are controlling everything including who is in power in the US and UK is like anti-Jewish conspiratorial documents such as the "Edlers of Zion". Is he saying that Jews are controlling everything without saying it?

Sep 10 12:50 PM

[ex- bond tr...:]

No, many people of all race, religions, and cultures are involved in this elite club. Last time I checked, Obama wasn't praying at a synagogue, or anywhere.

Sep 10 12:55 PM

[jiriad:]

Wow, Derryl. Creepy.... one currency? Hello, weakening dollar. Control our energy use? Can anyone say "smart grid"? May be closer than you think...


On Sep 10 03:45 AM derryl wrote:

> Great article Mr. Kim, telling it like it is.
>
> Re: 'conspiracy': somebody explained in a SA article or comment that
> explicit collusion is not required in order for a conspiracy to emerge.
> All it really takes is a bunch of people sharing a common world view
> and working to maximize their self-interest according to their common
> view. That worldview can be called "finance capitalism" and it is
> certainly the case that Rothschild banking interests are deeply entangled
> with global central banking. Whether these are just people who share
> the same agenda or whether there are masterminds lurking behind the
> scenes is an open question and the answer is moot because the effects
> are the same either way.
>
> Mrudula Shah asks what bankster interest could possibly be served
> by taking down the global economy. The question assumes that wealth
> is the only value at play. But for centuries already the banksters
> have learned how to create money out of thin air. Wealth is simply
> taken for granted by these people. Now they want power, global power
> (always by proxy through frontmen, never in person). Some people
> want to own the world, others want to rule the world. These are the
> two faces of megalomania.
>
> So if a reduced global economy is the price to gain power, so be
> it. In the V for Vendetta clip the lever to gain power was fear of
> a variety of bad things like terror and disease. Fear of bankruptcy
> and poverty is another good lever, so taking down the global economy
> would set the stage for a 'savior' to emerge. All we have to do is
> give him total power and he will stop the fear and pain. That's the
> sales pitch. We all know what totalitarians really do--mass murder
> and stifling of all kinds of dissent. Nobody is allowed to "talk
> about" the s___hole poverty economy so, "Problem solved".
>
> Tyrants almost always believe that their rule is better than self-rule
> by what they consider 'the idiot serfs'. That's because megalomaniacs
> only see value in wealth or in power. They scoff at ideas like 'freedom',
> which they believe does not exist, so they cannot see that self rule
> serves values other than maximizing wealth and power. I would go
> so far as to call those other values "spiritual", as opposed to material.
> The whole "service to Mammon or service to Spirit" issue. We all
> need to make money to live but we don't have to eagerly sell our
> soul to do it. You can be a decent person and still make a decent
> living.
>
> So in the context of an obviously manipulated monetary and financial
> environment is NOW the time for the powers to play the endgame? I
> don't think so. The mechanisms are in place for finance capitalism
> to destabilize our economies by pumping up debts of all kinds. These
> have been working in the US since the formal adoption of the fractional
> reserve banking/central banking system where all 'money' is created
> as debt. Exponential debt growth is very good for the people who
> have the money but very bad for people who have the debt. "Indentured
> servitude."
>
> Gold was a problem until 1971 because it was an alternative form
> of money that banksters couldn't print to order. After Nixon nixed
> convertibility fiat debt-money went viral. Controlling money is key
> to ruling the world. So watch for any move towards a single global
> currency. Controlling oil, the physical lifeblood of modern economies,
> is also key to ruling the world, so watch out for carbon control
> legislation that gives governments an effective mechanism to control
> our energy use. The pieces aren't in place yet for the final thrust
> to a global currency, and there are still a lot of credible anti
> global warmists raining on Al Gore's ambitions, so I think we have
> a decade or maybe considerably longer before the final push. Meanwhile
> our life in bubbleville will go on. I don't think the powers will
> permit a deflationary depression so we could see some novel QE reflation
> initiatives.
>
> Really, I'm not paranoid. I'm convinced. I'm convinced there are
> a lot of people out there who want to control me for my own good,
> and I am convinced they are diligently working towards gaining the
> power to do so. They are not huddling in secret places. They are
> explaining their agendas in detail during election campaigns, all
> the good things the government is going to do for us. They are convening
> at all kinds of "global governance" meetings, widely publicized and
> hailed by the bought and paid for media as wonderful advances for
> humanity. Sheeple love it and can hardly wait to abdicate whatever
> personal responsibility they are still compelled to accept. Humans,
> like me for e.g., are not so keen on the whole project.

Sep 10 12:58 PM

[The Geoffster:]

"The real rulers in Washington are invisible and exercise power from behind the scenes."
-- Supreme Court Justice Felix Frankfurter

Sep 10 01:17 PM

[bindlepete:]

Good thinking good analysis not the happy portrait of our times that we are being told is reality. Hard assets are better than paper assets as there is a desperate effort to tell us "all is well, nothing to see behind the curtain, move along" .

As a septuagenerian it is interesting to watch but painful to contemplate.

Sep 10 02:20 PM

[danepol:]

The thunderous sound that I wish you could hear Mr Kim is my sustained and loud clapping. Thank you, thank you!

Sep 10 03:22 PM

[koot:]

Mr. Kim, Looks like many others see same thing. There are just too many coincidences for the fraudsters to hide it.

Strange how those of us who have worn the tin foil hat for some many years don't seem to mind it any more, in fact we are getting right comfortable.

But now we are seeing the many others wearing Styrofoam hats which they are constantly replacing because they are always out of focus.

Mr. Kim, your right on as I have known and realized same thing for long time in its progression for simple fact is, the US government is broke and all that matters now is how it becomes obvious to all.

Sep 10 06:50 PM

[SW Richmond:]

Excellent, Mr. Kim, I have nothing to add. Thank you so much for putting this together.

Sep 10 07:40 PM

[dcb:]

I can tell you that I have reaached the same conclusions as this man quite a while ago. I am also a trained scientist, an MD, and have finished 3/4 of an MBA (I left when I could clearly see the collapse, but my professors couldn't). When you run a blind box analysis, by that meaning plug in the data, and ignore the statements, it is the only real conclusion that fits the evidence. Otherwise you really have to strain.

The political leaders and oligarchs are shielded from harm if things collapse. So while the collase concersn them the only ral threat they face is civil unrest. Just look at how the heads of the banking insdustry made out. very few if any in jail, unlimited money via the fed to reflate assets, no effort to curb crazy bonus schemes. The folks in office that hold any position of standing know they will be given a cushy job by indistry when finished office, so they are shielded. Come on. just think about the role the fed and treasury played in ensuring AIG and Merrill got their bonuses. and goldman getting 100 cents on the dollar from AIG instead of having to take a haircut. If thise three things don't at least make you say something strange is going on here I don't know what will. Geiter, head of the NY FED before the crash, who didn't have banks do anything (raise capital, etc). How can this guy be treasury secretary. From what he did, and the outcome that happened it defies common sense. Hence he got the job because he gives the indistry what it wants and doesn't get in their way. Summers made it so derivates didn't need to have capital held against them (swaps, not insurance). So he played a huge role in this mess. How the hell did he get the job. he did have a 5mil/year hedge fund job for one day a week of work amd made millions inspeaking fees to wall street. He's safe and has been bought a paid for already. He also knows what rewards him if he plays ball. the list goes on and on and on. Just too many things don't add up any other way. What is Greensapn making now as a consultatant from the industry?

I have studies this crisis for over two years now. Mr. Kims conclusions were not the ones I first had. I startedto think about a cabal when i saw economic policies that made no sense to me, and when the very people who had a huge hand in the crisis we appointed to positions of power by Obama. The you have to start to add in the revolving door between the fed, treasury, and wall street. How about the "greatest" student of the great depression that doesn't understand the role of overleveraging in causing the crisis. how about the fact that we have hed 6 credit crisis since the 60's. but never lean from our mistakes. Then you have to start deciding who makes out from the leverage. thise that make money via leverage who have seen their incomes skyrocket, and the working man whose income depends on nominal GDP. His income has fallen.

I'm afraid the facts add up to exaclty what Mr. KIm says. You can believe it or not and that is your choice. I have a group of about 20 well educated readers who I think all now believe as myself and Mr. Kim do. I convinced them via shoving such an overhwelming amount of evidence at them there was no other choice. I can happily send you easily 200 legit articles that would lead to the same conclusion.

I am an American and jewish and in no way shape or form do I take Mr. Kims comments to be either anti american or jewish.

May I add that contrary to popular belief many folks saw this down the pipleine. those in power choose to ignore it. Why? because those in the oligarchy benefit to keep it running, and those with the power to keep in running are richly rewarded for doing so.




On Sep 09 12:28 PM Mrudula Shah wrote:

> It's equally stupid to think that the western democratic system and
> the political leaders and all major bank executives are out to get
> the ordinary citizens and drag the economy down!! Tell me how these
> oligarchs and political leaders benefit if the economy collapses!!
> No body, including each one of them, benefits!! I Do not think these
> guys are that stupid and are taking some stupid steps!! Stupid are
> those who believe those who say the world is about to collapse!!
> Also, I am not saying Mr. Kim is a Chinese - I am just saying he
> expresses Pro-China anti-Western thoughts!! It's clear to me that
> with Americans cutting down heavily on their consumption habits and
> moving towards more savings (because theyt may be concerned with
> their social security and medicare syastems health), the Chinese,
> Japanese and Korean economiies are hurting!!

Sep 10 07:50 PM

[dcb:]

zero hedge has a bit of data on this


On Sep 10 07:42 AM Roger Knights wrote:

> "the US government, US Federal Reserve, Wall Street, the US Treasury,
> and the Exchange Stabilization Fund have all engaged in domestic
> and international financial and monetary transactions that have been
> kept secret from the world, and that will have severe and negative
> consequences in the not so distant future."
>
> It sounds as though the author has got wind of a Big Secret that
> he can't spell out because he can't back it up by outing his source.
> It's just occurred to me what this might be. (I first read it in
> a comment here on Seeking Alpha about three weeks ago, and I've posted
> it myself a couple of times here as a possibility.) Namely, that
> Asian central banks have secretly been offered the chance to buy
> Treasuries at a discount. This would explain what's otherwise inexplicable
> to me: why there is still strong demand for them.
>
> It's already been revealed that the Fed is engaged in a shell game
> with Agency bonds held by foreigners, buying them from them on the
> QT in exchange for their buying Treasuries. But this is mostly a
> PR gesture, and not something substantive that would shake the foundations
> if it came out. Without low interest rates in the US, real estate
> would collapse, followed by the banking system, followed by trade,
> followed by the government.
>
> Of course, I have no evidence that this trickery is occurring. But
> maybe a financial reporter would start asking his sources if they
> think such a thing might be happening. Given that necessity knows
> no law, it's a possibility.

Sep 10 07:57 PM

[jstratt:]

I am humbly able to see parts of the manipulation of markets that Kim sees. I thought it was interesting that GS had their code stolen and immediately announced how dangerous it could be in the wrong hands.

However Kim could make alot more money if he tried to be another Oliver Stone.

The truth is markets are manipulated to create a better world economy. It serves the world to allow the US to recover faster, or to help Europe or to help the 3rd world to grow at this point for the greater good of all.

In short the world economy is managed. Now go make money!

Sep 10 08:03 PM

[dcb:]

May I ask what your level of education is? I dont think you understand what a real patriot is in this country. the founding fathers attempted to set up a system that prevented your way of thinking. A real American says, why are we wasting the resources of our country and the few, why are we causing harm to the economy, why are we in endless foreign wars that drain the capacity of our country. The real patriots understand from the founding fathers how impt it is in democracy to question you leaders. In fact they tried to set up a system so there would be no oligarchy. But the money has corrupted the system. The true patriot speaks out against the collapse of the empire. the true patriot sees beyond jingoism and the simple slogans of those who are attempting to loot the empire while it collapses. Unfortunately too many people in this country think like you and are brainwashed. That's why the criminals get way with their crimes. all the while wrapping themselves in an american flag. Unfortunately you havent realized the banksters don't think in terms of nation states. they can live anywhere. It's a shame the american people are so easily manipulated, over and over again!!

On Sep 09 11:40 AM Mrudula Shah wrote:

> The author vents his frustrations as if he is a pro-China anti-Western
> individual, going as far as chraging the likes of Tony Blair and
> Gordon Brown as pupets of banking ologarchs - an exageration of the
> opposite kind!!

Sep 10 08:12 PM

[billyboy54:]

Great article Mr. Kim, it's why I "follow" you, keen and knowledgeable -- and fearless -- analysis, and truth telling.

Just what we need at this time, and get much too little of.

Have you thought about becoming a contributor at ZeroHedge.com ?

I think that community would welcome your contributions.

Sep 10 09:07 PM

[billyboy54:]

I just noticed that Jim Sinclair has picked up this article and referenced it on his website JSMINESET.COM.

He's an old time gold trader and guru.

Sep 10 09:46 PM

[realist len:]

This is a very well written and thought out article. Its a shame that our leaders like Obama and the Bushes who have sold out the American people for their own selfish New World Order agenda that treat the American people like a bunch of mindless sheep. The sad thing is we have let things get to this point because we as a people have forgotten how to stand up and fight for our rights that were given by our founding fathers. I myself a VET see the lies by our privatly owed media yea, CNBC comes to mind who work for MOVIE PRODUCERS not real EDITORS who fill up the day with endless false cheerleading about how we're coming out of this recession when we are far from it. The next shoe is going to drop as soon as GS decides it needs to, so they can make another pile of cash in the process. I'm sorry if those of you who laught at a NWO agenda but if you watch they don't even try and hide it anymore its out in the open. We have a persident with the lightest resume in the history of the U.S. Presidency, who is purely manufactured for the masses who are now starting to get buyers remorse. Obama just took up a ton of air time to push for health care when he needs to be working on getting people back to work, that should be the priority not health care. They are still trying to use smoke and mirrors to try and pay for it and they know we can't afford it. If you need to see why this public plan won't work go ask Tennesse and they can tell you 1st hand It doesn't work. The banks are insolvent real estate residential and commercial is still collapsing and even accelerating its decline. We keep getting pumped up with complete lies about the current rate of unemployment that is probabily north of 16% or worse. The powers that be they pull the puppet strings of the Bushes and Obamas of the world will not rest until they control every dollar and every person on the planet.

Sep 10 10:56 PM

[John Lounsbury:]

Mr. Kim - - -

I find your article articulate. It is quite aligned with my own analysis. The more this market keeps going up on low volume, the harder the fall when it turns out that the chickens coming home to roost are carrion fowl. In a recent article I referred to the coming crisis as a banking crisis of historic proportions. And in another article, I showed why it already is the biggest as far back as I have analyzed (to 1929). And the conclusion is: the worst is likely yet to come.

Well written.

Sep 11 12:28 AM

[Up Yours SP500:]

Mr. Kim, to straighten your points, I would also add the impending collapse of the commercial real estate market, the fact that China is looking to make the U.S. its bitch without firing a single rocket or bullet (and rather through commodity purchases, gold, and buying up U.S. assets including U.S. real estate), and the fact that President Obama has thoroughly missed the opportunity to seriously overhaul the financial system when it was in the gutter in March. His focus now is health care reform, but notice, there is not mention of any financial reforms right now in government aside from the SEC saying they will NOW implement policies to prevent another Madoff scam. So sad. The bankers walk away with their money, we walk away with empty pockets.

Sep 11 12:47 AM

[blondino:]

i say, the money piled up has to flow back, so get on board and make money in the years to come...

Sep 11 08:23 AM

[Bluefin:]

Look at the balance sheets of the Federal Reserve and major banks. Banks are dumping their non-Treasury, non-agency debt on the Fed, and buying Treasury bonds and notes with the proceeds. They can also borrow from the Fed at zero interest and buy Treasury bonds and Notes and earn 2.5% - 4.5%. Free money. And willing buyers for Treasuries without relying on foreign buying.

It's a shell game between the Fed (providing banks with liquidity), the Treasury (needs banks to buy it's paper), and banks (free profits to shore up their balance sheets, without having to lend to businesses and consumer and take on credit risk).

Why do you think the Fed does not want to disclose details of its holdings and who borrowed money against that collateral?


On Sep 10 07:42 AM Roger Knights wrote:

> "It's just occurred to me what this might be. (I first read it in
> a comment here on Seeking Alpha about three weeks ago, and I've posted
> it myself a couple of times here as a possibility.) Namely, that
> Asian central banks have secretly been offered the chance to buy
> Treasuries at a discount. This would explain what's otherwise inexplicable
> to me: why there is still strong demand for them.
>
> It's already been revealed that the Fed is engaged in a shell game
> with Agency bonds held by foreigners, buying them from them on the
> QT in exchange for their buying Treasuries."

Sep 11 08:56 AM

[Andy B.:]

"Again, when viewed through the “fraud prism”, such activity makes complete sense. It is obvious that the “Rise of the Machines” has created markets that are now dominated by computerized high frequency trading programs that can execute trades as quickly as 0.5 milliseconds and have as their sole purpose the creation of short-term market distortions driven by statistical arbitrage that can be used to game the system and cheat their clients. Though this link describes how this scheme works in commodity markets for those that have been following the New York Stock Exchange, the use of high frequency trading programs to game the system at the expense of the retail investor has been glaringly obvious especially in the trading behavior exhibited this past summer."

I have 7,000 shares of FNM and was wondering how "someone" has been managing to keep the stock price close to $1.68 all this time. Now I know. Thanks for the eye opener. You deserve a Pulitzer.

Sep 11 09:45 AM

[user369285:]

So Armageddon is coming-where are the bears putting their investments-in a cave?

Sep 11 10:27 AM

[MudEngineer:]

If you know what is going to happen in advance and you then get all of your already huge holdings in cash, gold or silver, you can buy up ten times more wealth after you either cause the crash or just let it happen. Now, do you still think the rich would have nothing to gain from a crash. It would give them much more power and incredibly more wealth! Now do you still think we are stupid?


On Sep 09 12:28 PM Mrudula Shah wrote:

> It's equally stupid to think that the western democratic system and
> the political leaders and all major bank executives are out to get
> the ordinary citizens and drag the economy down!! Tell me how these
> oligarchs and political leaders benefit if the economy collapses!!
> No body, including each one of them, benefits!! I Do not think these
> guys are that stupid and are taking some stupid steps!! Stupid are
> those who believe those who say the world is about to collapse!!
> Also, I am not saying Mr. Kim is a Chinese - I am just saying he
> expresses Pro-China anti-Western thoughts!! It's clear to me that
> with Americans cutting down heavily on their consumption habits and
> moving towards more savings (because theyt may be concerned with
> their social security and medicare syastems health), the Chinese,
> Japanese and Korean economiies are hurting!!

Sep 11 11:05 AM

[bimbam:]

A collegue of mine just asked me if it would be cheaper to have all banks fail instead of propping up the markets by the FED bailout plan. I think it would be... eventually bank after bank is expected to fail whatever the FED thinks up. However, at that time the executives will have taken their profits....

Sep 11 11:11 AM

[seeweed:]

The entire culture of corruption and fraud consists of many individuals tweaking a component of the "system" for their own benefit believing that this will not upset the "system" too drastically; unfortunately this culture has spread exponentially with the speed of a rogue virus to which there is no immunity - the "system" is irreparably damaged. We are experiencing a financial "black plague" caused by accumulative greed.

Sep 11 11:13 AM

[bottoms-up:]

I think the U.S. Government will pull out all stops to shill all the markets with taxpayer $$$ to make sure there is no major decline in equity markets September-October (as would be historically expected). BO can then say, "Look! Don't worry! Be Happy!"

Still, you can make a lot of $$$ day trading financials and anything else the U.S. Government has their big fat fingers in... They are possibly being used to launder money to Asia, but in any case, GS can pump them up, then they are sold out overseas. That said, I wouldn't hold any of them overnight.

Sep 11 11:33 AM

[bottoms-up:]

The author, in my opinion, calls it what it is. I've been following financials for some time and I'm happy that this massive fraud has been pointed out. I see this article as anti-fraud, not pro/anti West or East.

The one thing that is missing: If you can stay on top of things you can make $$$$ day trading the fraud, but just remember to limit your exposure to maybe 20 percent and don't hold anything overnight (USA time). If Ben and buddies need to pay up to leaders who got ripped off in 2008 by laundering money, drink from the well, within reason.


On Sep 09 11:40 AM Mrudula Shah wrote:

> The author vents his frustrations as if he is a pro-China anti-Western
> individual, going as far as chraging the likes of Tony Blair and
> Gordon Brown as pupets of banking ologarchs - an exageration of the
> opposite kind!!

Sep 11 12:10 PM

[cboefan:]

Thank you so much for writing the objective truth! You are not alone. There are many of us in this silent minority.

Sep 11 02:44 PM

[bschawla:]

I have just one thing to say - Short Term Stock Trading is Legalized Gambling. If you are a REAL Investor - then fund an organization and participate in its growth - Your funds, cannot grow overnight.

All this reasoning to create a real-time market for stocks is ridiculous - one day this will all die down. Only long-term trading should remain - an Investor has to be invested for atleast 3 years before the shares can be traded. Less than that - funds are only provided as loan from financial institutions - public or private.

The stock market bubble will burst only when there are no more ways to prop the market up - that is the government will go bankrupt. The future can be seen very easily.

Same thing for other kinds of markets - e.g. commodities - you need to own the commodity or provide a REAL value add to have trading in it. No need of these Investors (or Gamblers) flipping them!

Sep 11 03:30 PM

[bmeinhoff:]

Thanks for an excellent, superbly written article topped off with an excerpt from one of my favourite movies.

Sep 11 03:42 PM

[Gary A:]

The author fails to understand 1. that the US used to be a great country and that it is difficult to see the nation as a fraud in its economy and 2. that mainstream media lies about everything important in the past 15 years. We went into Afghanistan to build a pipeline. How many people even know that the Taliban went to Texas in 1997? How many people know that both the Afghan and Iraq wars are about oil, with the Afghan being about daddy Bush and Haliburton investments in the Caspian Sea?

Americans have to be the most ignorant people on the face of the earth, and it is quite disturbing.

Sep 11 04:40 PM

[Gary A:]

The author fails to understand 1. that the US used to be a great country and that it is difficult to see the nation as a fraud in its economy and 2. that mainstream media lies about everything important in the past 15 years. We went into Afghanistan to build a pipeline. How many people even know that the Taliban went to Texas in 1997? How many people know that both the Afghan and Iraq wars are about oil, with the Afghan being about daddy Bush and Haliburton investments in the Caspian Sea?

Americans have to be the most ignorant people on the face of the earth, and it is quite disturbing.

Sep 11 04:40 PM

[ThatGuyInTh...:]

No. Conspiracy by a group of individuals planning something is a 19th century intellectual fallacy. Think about it more like a hive of bees or a collection of bacteria, engaging in collective action for the benefit of the hive/group, but where the behavior of each individual is governed by simple rules. The behaviors are emergent, and not conscious at all, even though it can look like that.


On Sep 10 12:50 PM Peter Bolden wrote:

> It scares me when I read an article like this. TWhen he speaks about
> financial oligarchs that are controlling everything including who
> is in power in the US and UK is like anti-Jewish conspiratorial documents
> such as the "Edlers of Zion". Is he saying that Jews are controlling
> everything without saying it?

Sep 11 05:00 PM

[jaydawg:]

It's good to hear the truth it times of outright lying from our media spin heads. It will come down and it will be one spectacular show to watch. Those lucky enough to have a gift for timing will reap fortunes!

Sep 11 05:45 PM

[lynnybee:]

Sir: I love this article. I devoured EVERY WORD ! IN FACT, I READ THE ENTIRE ARTICLE THREE TIMES & every comment, too. Please be proud of yourself for this article. It is to be applauded. Sincerely ......

Sep 11 06:44 PM

[recession g...:]

while the enormous conspiracy theories suggested by your article are a bit tin-hat, i would agree that there are likely some pretty serious troubles under the surface in the banking sector, although the extent will only be visible after the fact.

those familiar with the government's handling of the s&l crisis will recognize the danger of many of the policies adopted thus far. providing cheap money and an explicit guarantee to lenders that are insolvent or approaching insolvency creates some seriously skewed incentives. thrifts in this position chose to bet the farm on commercial real estate loans, hy debt from lbo's, and engage in other wholly inappropriate transactions while using their legislative muscle to get the FHLBB to relax reporting requirements. those unable to continue were merged into other banks to avoid bankruptcy.

all of these policies greatly magnified costs and delayed ultimate resolution by years (some would suggest up to 60% of the final fiscal cost, although estimates are understandably difficult)- the problem was visible in 1982, wasnt taken seriously until 84-86, and wasn't fully wrapped up until 92-93. sound vaguely familiar to anyone?

our government is extremely poorly set up to accommodate systemic banking episodes- there is no monitoring capability, no explicit responsibility, and no guidelines for a major credit event and the result is that policy gets tossed around between various agencies seeking to avoid responsibility and shift the costs on to others. the structure of the resolution trust corporation is a good example of the bureaucratic monstrosities such an institutional structure creates.

i sold all my banks in early august after giving some thought to how little transparency is available into balance sheet quality and to the past failures of government resolution of failed banks. this is a much bigger problem that the s&l crisis, the 87 crash, or the tech bubble, and i think people tend to lose sight of that.

i don't think that elaborate conspiracy theories are justifiable or even necessary to explain the rally- everyone in markets has learned to buy the dips in the past couple decades and has no memory for serious extended economic drawdowns. its not surprising they're failing to comprehend the scale of the shift occuring, and politicians with a tie to status quo policy will always tell the citizenry everything is just fine, no matter how dire the reality.

Sep 11 08:29 PM

[ilovesum:]

If it walks like a duck and quacks like a duck then its probably ??
What has gotten better ? Unemployment , no . Housing , no .
So why has the market pretended it has ?
This market doesn't make sense and the best thing to do is get away.
When housing was on its tear it didn't make sense either.
No doubt there has been manipulation to make the rich richer by spontaneously curing the economy and to sucker the little guy again.
They don't want exposure and a revolt , instead they manipulate the market higher to take the pressure off any change . If you controlled the game , why would you want the rules changed?
The article below shows markets are controlled not free
www.correntewire.com/l...

Sep 12 12:25 AM

[MarvinMBA:]

Uncle is doing everything he can to revive the maket place for stocks and real estate and jump start the economy. Not to do so could have worst consequences and if it works to get everybody on board a economic bandwagon, we will pay the piper later. Like it or not thats the name of the game right now...forget economics 101 this is a economic emergency that requires intervention of every type legit or non legit to save everyones azz...MarvinMBA

Sep 12 01:50 AM

[Gary A:]

Under the watch of the BIS off balance sheet banking was allowed. Why would the BIS allow banks to throw sound underwriting to the wind and allow the banks to hide their accounting? It was not black swann. It was no accident. It was a conspiracy. And then they come in and want to have FASB raise capital requirements like they are the good guy. Sorry, the BIS isn't the good guy, but rather is through the central banks the enemy of the best interests of the citizens of the United States. Tin foil has nothing to do with it. Observable actions expose liars.

Sep 12 03:01 AM

[User 357705:]

The ongoing problem with Duhmerican'ts is that they are afraid to face the truth! All the rah rah rah flag waving crap they've been force fed since birth has addled their brains.

"The men the American people admire most extravagantly are the most daring liars, the men they detest most violently are those who try to tell them the truth." H.L. Mencken


On Sep 09 12:57 PM Michael Clark wrote:


>
> The current problem of American leaders is that they are afraid to
> face the truth. Why are they afraid to face the truth -- because
> the truth is that they are in danger and they destroyed the goose
> that laid the golden egg because they could not control their greed.
>

Sep 12 09:37 AM

[Teutonic Kn...:]

Mr. Kim's article is a rare gem and one of the best I have come across in my experience with SA. He is able to articulate the subject matter eloquently owing of course to his intellect, but more importantly to his independence.

The ranks of our bureaucrats by nature inherently attract folks who are risk-adverse, and our two mainstream parties are now fully entrenched.

Hope for America will have to come from good corporate citizenship - the late Mr. Batten who founded the Landmark Communications (The Weather Channel) exemplified such good corporate citizenship. A Third Political Party would have rise up most likely through independents who voters will elect en mass in the next round of elections.

TK

Sep 12 10:18 AM

[Boxed Merlot:]

On Sep 12 09:37 AM User 357705 wrote:

> The ongoing problem with Duhmerican'ts is that they are afraid to
> face the truth! All the rah rah rah flag waving crap they've been
> force fed since birth has addled their brains.
>
> "The men the American people admire most extravagantly are the most
> daring liars, the men they detest most violently are those who try
> to tell them the truth." H.L. Mencken


Unfortunately, this is a theme that’s evidently inherent not only in the US, but is common to the human species. (By the way, Canadians and Mexicans consider their countries to be in America too, and for that matter Central and South take umbrage at a US citizen’s assertion at being “American” only.)

In AD 33 this characteristic was addressed by describing the existing powers’ hypocrisy for honoring past historically good individuals by constructing monuments in their honor, and that by doing so they simultaneously acknowledged it was their own fathers and ancestors that murdered them in the first place.

Addled, great word.

>

Sep 12 11:48 AM

[Asbytec:]

Warm Paw, I'd argue the housing crisis was the trigger, not necessarily the root cause or the problem, setting our over extended financial system into a tail spin. Being over extended, making too much money than can be supported by our economy or consumer debt, is the problem.

Too much synthetic liquidity floating around the globe fueling unsustainable growth, especially in China. Now that the liquidity bubble has burst, we are in real trouble. The central banks simply cannot reinflate to keep up with the deflation.

I am not really a conspiracy theorist, but there does seem to be some collusion between the powerful people in the world to save the banking system. It is a source of great wealth for the oligarchs, as long as folks are employed and pay off their debt. Now that the worker can't pay off debt because of high interest rates or unemployment, the money well dries up fast, doesn't it? That's because the wealth effect is nothing like real wealth. With real wealth, the consumer doesn't need to borrow from those who really are wealthy.

Right on, Jason...I am proud of our constitution and declaration of independence. The Federal reserve act is unconstitutional, in my view. So is a fiat dollar.

Sep 12 12:35 PM

[Gary A:]

Greatwhite, that wasn't a very popular comment. Life isn't a big game and it spawns wars, murders, trade wars, economic instability, the inability of parents to care for their children, and on and on. You sir, must be carved out of wood.

Sep 13 03:02 AM

[Gary A:]

Greatwhite, that wasn't a very popular comment. Life isn't a big game and it spawns wars, murders, trade wars, economic instability, the inability of parents to care for their children, and on and on. You sir, must be carved out of wood.

Sep 13 03:02 AM

[Mpyre...:]

Superb!

Sep 13 09:23 AM

[Jeff Nielson:]

You took the word out of my mouth.


On Sep 13 09:23 AM Mpyre... wrote:

> Superb!

Sep 13 12:23 PM

[oligarch_lies:]

Excellent!

FED==money printing machine and the KING of all central banks.
The "machine"==pawn shop, through worlwide periodic ponzi schemes( new and exotic financial products) and monetary policies control the timing of "financial BOOM".
THEY make their trillions, and the rest are struggling to survive. what about inflation, after deflation .

The "Machine" controlls politics and its actors( They become well paid consultants with zero experience and FAT checks). Everythingelse is low quality THEATER.

NYC's economy is symbiotic with Wall. St finacial DREAMs
selling machine like Los Angeles is with Video Dream selling machine, isn't it? what else are they producing? People wearing $50k suites(!!) , youngsters well connected that make millions , not even having a degree, less in mathematics and risk management,excesses drowning every average American's comprehension.

People

Sep 13 12:53 PM

[Big Bubbette:]

Support HR 1207.

Sep 13 04:34 PM

[Mark Bern:]

Great article!

"Personally, I would not be surprised if sometime within the next six months, a considerably larger US bank failure causes a massive ripple effect of much greater consequence. Banks that are currently struggling with unreported and covered-up deepening problems of loan delinquencies such as Wells Fargo (WFC), may be among the large banks that are candidates for future bankruptcy despite the public categorization of such institutions in the “too-big-to-fail” category."

The author has chosen well, IMHO. It is my understanding that WFC has about $1.8 Trillion in off-balance sheet assets, placed off balance sheet to reduce capital reserve requirements. When FASB begins to require (in January, 2010) that all assets be reported on bank balance sheets, WFC could be required to raise more than $70 billion in new capital. It will be near impossible for the bank to do so without either selling off good assets that will reduce its earnings power or without diluting its current shareholders or both. The stock has begun to crumble, but IMO has much further to go as Wall Street wakes up to reality.

Sep 13 05:19 PM

[Mark Bern:]

"It is ironic that it is the same group of people that so readily accepts the Western media’s correct analysis of China’s stock market as a huge bubble through the lens of Austrian economic principles that simultaneously rejects any similar notion as applicable to US or UK stock markets, and instead, readily embraces heavily flawed and unsound Keynesian economic principles when evaluating Western stock markets."

Excellent Point by the author! How can one accept the fact that the Chinese stock market was (and still is) a bubble, while denying that the U.S. stock market is in the same pickle? The only two major differences were 1) the existence of higher volume in the Chinese market and 2) actual GDP growth (or at least reported growth) in China which would only make its rise more plausible than what has occurred in the U.S. market. To consider the U.S. market rise sustainable is pure "HOPE" based upon hype.

Sep 13 05:28 PM

[Mark Bern:]

"In the end, what is the most frustrating facet of these huge con games executed by the financial oligarchs is that the group of people that this article is most intended to help is often the group of people that will take most offense to this article and most steadfastly refuse to see the truth."

Acceptance of the truth will not occur to most of those to whom you write until they themselves face the hopelessness of the impending abyss that is coming. It may even require more than one more huge market drop if the manipulators can propel stocks higher again on an imaginary rebound. I don't expect the recovery to be a simple "W". Instead, I expect (because of the manipulation and massive amounts of profits being made by those pulling the strings) that we will experience an elongated "W" that looks more like this: WWW. On each subsequent drop, a few more may wake up to reality, but each upturn will continue to embolden those who remain steadfast in their beliefs that the recession is over. And many will hold onto that hope until they are directly impacted. I suspect it will require several shocks before the majority will finally say "We have had enough." Unfortunately, we may not hear that needed response until after the 2010 elections.

Sep 13 05:38 PM

[Mark Bern:]

John - You are spot on! It is not a matter of if, but when. I am not a gloom and doomer by nature. I still believe in the U.S. Constitution and the resilience of our economic system over the long term. We will see better times again, but there is still a need to allow the system to heal itself. That will take time and may require the undoing of some wrongs that have been, or are about to be, perpetrated upon the American people. I know that you agree with me when i say that, in the end, we will persevere as a nation and continue to prosper. But the adjustment period facing us in the near term is likely to be very painful for many.


On Sep 11 12:28 AM John Lounsbury wrote:

> Mr. Kim - - -
>
> I find your article articulate. It is quite aligned with my own analysis.
> The more this market keeps going up on low volume, the harder the
> fall when it turns out that the chickens coming home to roost are
> carrion fowl. In a recent article I referred to the coming crisis
> as a banking crisis of historic proportions. And in another article,
> I showed why it already is the biggest as far back as I have analyzed
> (to 1929). And the conclusion is: the worst is likely yet to come.
>
>
> Well written.

Sep 13 05:45 PM

[Mark Bern:]

Emphatically NO! The author is trying to tell people about something that our President and many other leaders around the world have been mentioning in public speeches: New World Order.

I don't know if I buy into the argument or not, but as I understand it the groups that are supposed to be controlling things behind the scenes are made up of a relatively diverse cross-section of national origins. The primary thing that they have in common is that they are super rich. Yes, there are some of Jewish decent, but they are not the majority. The exclusivity of the groups requires Billions in net worth and/or significant political power positions.


On Sep 10 12:50 PM Peter Bolden wrote:

> It scares me when I read an article like this. TWhen he speaks about
> financial oligarchs that are controlling everything including who
> is in power in the US and UK is like anti-Jewish conspiratorial documents
> such as the "Edlers of Zion". Is he saying that Jews are controlling
> everything without saying it?

Sep 13 05:52 PM

[Mark Bern:]

Excellent point about our President being focused on his agenda rather than the immediate problems that face our nation! Of all the comments above, I really appreciate this insight.

I suspect BO considers the economy to be well in hand and is trying to portray to the American people that there must be nothing to worry about if the President is getting ready to spend another $600 Billion. I have heard that he is intelligent. But if he really believes that the U.S. economy is out of the woods, he has absolutely no common sense! It would seem that he is trying to undermine the US$ by spending us into oblivion. Is that his strategy? Does he really want to encourage a weaker dollar so that imported Oil has to rise in dollar terms creating inflation so that we can pay back all this debt in cheaper dollars? Or did he cheat on his IQ test, too?


On Sep 11 12:47 AM Up Yours SP500 wrote:

> Mr. Kim, to straighten your points, I would also add the impending
> collapse of the commercial real estate market, the fact that China
> is looking to make the U.S. its bitch without firing a single rocket
> or bullet (and rather through commodity purchases, gold, and buying
> up U.S. assets including U.S. real estate), and the fact that President
> Obama has thoroughly missed the opportunity to seriously overhaul
> the financial system when it was in the gutter in March. His focus
> now is health care reform, but notice, there is not mention of any
> financial reforms right now in government aside from the SEC saying
> they will NOW implement policies to prevent another Madoff scam.
> So sad. The bankers walk away with their money, we walk away with
> empty pockets.

Sep 13 06:00 PM

[tdillian:]

to the author:

an excellent well written and convincing article. I was one of those people who drank the kool-aid glass and pitcher full. I no longer trust the MSM to tell me the truth when my own eyes tell me different. I have 2 friends who have had a small business for over 15+ yrs, they are desperately trying to preserve their employee's jobs.. they have trimmed the pay, the hours and cut health insurance for themselves so that their employees could continue to have it at its full benefits. Well, they are finally at the point that they are convinced the christmas sales are going to be down much much more than anyone in the MSM is telling.. but they see their foot traffic.. they see the shops ard them are closing or shrinking. Unfortunatley, they will have to lay some people off, and cannot hire any seasonal people for christmas.

I think people know in their gut the fraud that is being perpetrated on them by the govt and the treasury.. they have taken $ from the taxpayers to make fiancial companies that screwed up big time whole again.. and the people like my friends who actually make something.. they produce something were/are screwed! they talk to everyone.. people know this instinctively...and this banking fraud will come crash this house of cards very very soon.

thanks again for the great article! will be forwarding it to many people.

Sep 13 06:29 PM

[SeekingTruth:]

As comprehensive as one should expect on this site of free flowing thought, ie. great work!
Right or wrong, we are of like mind.

Sep 13 06:37 PM

[reveigel@ms...:]

The title should read; THE COMING CONSEQUENCES OF GOVERNMENT FRAUD. Our government is obsessed with power and control. Our government is arrogant. Our government is greedy. Our government saps out the life of it's citizens through taxes. Our government's huge debt has placed our Nation in a bankrupt status. Out government lies, steals and cheats it's citizens on a regular basis. Let's count the ways. It lies about the programs it proposes. It steals more of our freedom with the passing of each new law, rule and regulation. It cheats us of our earnings and savings through the insidious inflation tax. Unless, and until our government is reigned in, becomes much smaller, spends, not like a drunken self serving politician, but like a prudent individual, family or business, we will continue down the road to disaster and eventual destruction.

Sep 13 06:43 PM

[Buckoux:]

Don't look for a conspiracy when incompetence will explain the situation.

Sep 13 07:49 PM

[Jan Paul:]

Karl Denninger has added two more postings this weekend and both are worth your review due to the statistics he has dug out.

quote:
How long can it continue?

Only until the Asian nations recognize that the consumer can't "come back" to former levels of consumption, as they're tapped out....

We have been given a gift - a six month (up to now) to couple-of-year (maybe) time frame....

market-ticker.denninge...

He then adds a video presentation on debt and GDP and the impossible situation we are placing our selves in. Look at the charts he supplies very closely (also has them in his comment below video).

market-ticker.denninge...

Sep 13 08:13 PM

[Nik Kondrat...:]

JSK, I'm sorry to say you've nailed it on the head.

With massive fissures opening up in the American polity because of pernicious racism, when the curtain is pulled back and the financial fraud exposed, it's going to get very ugly in the U.S.

Sep 13 10:18 PM

[Nettligent:]

Bank of America & Citigroup are dangerous. I would rather stay with a conservative banks and financial institutions. Management and cronies must be replaced along with Board of Directors. Crisis represents opportunities of a lifetime to overhaul our broken systems, everywhere we turn.
Rating Agencies and FICO scores are scam.
America needs to enforce, not add anymore regulations and laws. Prevent the Next Crisis: hold regulators accountable.
Until then we are still long way from recover.

Sep 14 04:16 AM

[skilibre:]

I lost the majority of my interest in this article once I saw the author putting Citibank and JP Morgan in the same category -- I'd suggest he read Gillian Tett's excellent book "Fool's Gold" to get a better understanding of why I would agree with him that Citibank is indeed "deserving of bankruptcy" but to say the same the same of JP Morgan makes me question his depth of understanding of the financial crisis and Wall Street institutions.

I also think that while the human mind is programmed to "like a good story" and his account does make one (and hence like all conspiracy theories finds a willing audience), the reality of the roots of this financial crisis is in all likelyhood far simpler and less malign though much more widespread; I think there is plenty of evidence that human beings are fundamentally governed by fear and greed when making decisions. Given a long enough period of prosperity, fear is forgotten and greed dominates our thinking, until the next crisis strikes and reminds us all why we need to keep our greed in check. The blame is thus collective, from the bank manager eager to make a quick buck on CDOs without worrying about what to do with the super-senior risk, to the financial engineer dreaming up the next CDO cubed product, to the homeowner eager to flip their oversized and unaffordable (but purchased anyway on a teaser rate) house (and the list goes on).

Thus I would argue that trying to find one set of people to 'blame' for the crisis is an exercise in futility and that the responsibility is shared across all of our society as we have collectively forgotten the lessons of the last Great Crisis (aka Depression). What I think is important is that the pain following this crisis be harsh enough that the lessons of the pitfalls due to excess greed are not forgotten for a lifetime (is it conincidence that it took ~70 years for the safeguards errected after the Great Depression to be torn down?). Ideally we would not forget the lessons ever but I suspect that is unrealistic (and would likely have unexpected downsides as such a traumatic lesson in the dangers of excess could destroy the creative and entreprenerial spirit that is an American strength and that brings genuine progress).

Stephan

Sep 14 11:23 AM

[bobbybutte:]

Many have talked about all the banking problems ahead.The late Bill seidman who helped the rtc bailout in 1988 said every bank would have gone under then if mark to market accounting was in effect. The fact is NO one knows how bad things will get. Banks are not gonna fail that much has been proven.Those who shorted WFC at 9 and AXP at 8 and C at 1 have lost their butts and even the classic shorts liek soros fleckenstein chanos and kass Paulson are NOT short these institutions.taht tells you all you need to know

Sep 14 01:23 PM

[Ransome:]

I will take a contrary opinion. I don't think they know what they are doing. It is simply crisis management. My views have changed since reading the recent articles at Bloomberg about the Lehman collapse.

In other words, if you call GS and ask for a crisis solution, they will give a GS solution. They are not geared towards saving the economy, they are geared toward succeeding at financial capitalism. If Paulson called a distressed homeowner, he would have been given different advice. The main thrust of the crisis solution was focused on the middlemen. The middlemen have little effect on the economy. The faulty or toxic products they created had an enormous effect on the national and global economy but that was not the focus, it was propping up, writing down securities, moving securities, a bookkeeping exercise with respect to the real economy. All the "secret" movement of money and securities are bookkeeping exercises to manage the colossal leverage and interconnectedness that would burn down the house if rules were followed and activities transparent.

It's the millions of people being displaced or losing jobs that is wrecking the economy. It is the investors and borrowers that got creamed and ignored. The fact that GS can now make money algo trading has not helped the economy one bit.

This is simply crisis management with attendant information control. Folks are nervous that a AAA plan will go bankrupt tomorrow mostly because the "problem" has spread in so many directions and into so many sectors that can not be controlled as simply as giving a bunch of money to AIG. The complexity and interconnectedness has been stunning. Every player has been fined tuned in the art of financial capitalism and not remotely geared to undo or fix problems. In financial capitalism you never look back, you look for new opportunities, whereas forest firemen are always looking back. These crises are not planned, it is the result of recklessness and a gross lack of foresight while living in the moment. Once you and the herd are swept up and can hear the roaring of the falls around the bend, it is too late.

Besides, gold gave us a lot of problems during the Long Depression. Stability comes from a Real Bills Doctrine but folks at SA don't want stability. Financial capitalism withers away and Industrial capitalism requires folks to make money the hard way, where value is exchanged for value and those adding the most value are rewarded. Financial capitalism appears to be adding value but moving money from pocket to pocket for a fee is not.

What I really think is going on is the monetarists, and there are plenty, are trying to salvage their relevancy while in crisis management mode. It turns out that if folks have the freedom to make the best choice, it is often results in following the herd over the falls.

Sep 14 03:23 PM

[Barney Smith:]

excellent article and interesting comments. Anyone care to share your thoughts on what this might mean to future real estate prices? Will inflation due to currency devaluation cause prices to rise eventually? Or will some other force somehow keep prices flat or cause them to decline?

Sep 14 07:13 PM

[lynnybee:]

UGLY ! It's going to be a heck of a lot worse than UGLY !!! I've already got my potato crop planted !


On Sep 13 10:18 PM Nik Kondratieff wrote:

> JSK, I'm sorry to say you've nailed it on the head.
>
> With massive fissures opening up in the American polity because of
> pernicious racism, when the curtain is pulled back and the financial
> fraud exposed, it's going to get very ugly in the U.S.

Sep 14 11:27 PM

[crocodileman:]

Anyone who cant see what is happening and what is coming simply chooses not. Unfortunatly, the end result will be the same for all of us, wether we ignored the fraud, or spoke out about it. our country, is in more danger then ever, and unfortunaly the ones harming us are the same ones claiming to protect us. im not sure that there is a single thing anyone can do about it either. We must let this playout now. I know, know matter how much I pray, i will never think that it was all worth it, but I do hope and pray that the solution is on us fast and hard, and despite all the pain a greiff it will bring, i know in the end , I will be able to say that that was worth it. Lets restore America to the country she used to be, regardless of the pain it will cause in the beginning. God bless us all. God bless the United States of America.
crocodileman

Sep 15 12:54 AM

[davveb:]

> Mr Kim's use of the term blowback is correct. It was not coined for the CIA, and of course many words have more than one interpretation, but his use and reference is entirely appropriate.


>
> Blowback is not a term coined for the cia. It occurrs many places,
> primarily in the blowback principal of firearms. lorechambers
> the weapon for the next round. However, as the round becomes more
> powerful, the blowback effect has many unintended consequences.
> These include ejecting the old shellcase with such force that the
> shell case will travel 20 meters. If the round is large enough,
> you can actually see a flame from the ejection port. Large rounds
> make a simple blowback weapon non-workable as the force will break
> things. Thus, Blowback referred to the unintended consequences of
> ejecting a shell from a weapon. As the shell became larger,
>
>

Sep 15 03:01 AM

[JMBishop:]

Up until the "A sound money backed by precious metals, can be the people’s liberation from this war.": I was enthralled by your blog. The gold standard or precious metal standard does not address the issue of lying manipulation and fraud. How about a fiat currency based on honesty and work with the goal of sustainability and a future for everyone? Is it too much to ask that the talented and capable of the financial industry give equal consideration to our common good as well as their individual reward?

Sep 15 07:37 AM

[Avooch:]

Hard to Love,


Sell Side is the Siren Call of Investors, plug your ears with wax and tie yourself to the mast........


On Sep 10 08:49 AM H. T. Love wrote:

> And yesterday GE was upgraded with an $18 price target. The usual
> bounce followed. Several months back, I valued it liberally at $8-$10
> at the most. If I were to do that again, with current information,
> I would be at your price, I'm sure.
>
> The pumping continues.
>
> HardToLove

Sep 15 08:12 AM

[MikeD71:]

Mr. Kim,

Drinks are on me, sir!

Sep 15 09:11 AM

[TeresaE:]

Food, water, toiletries and bullets.

At least us bears that see what this country can look like at 40% unemployment and no money in WDC to feed the masses.


On Sep 11 10:27 AM user369285 wrote:

> So Armageddon is coming-where are the bears putting their investments-in
> a cave?

Sep 15 09:51 AM

[TeresaE:]

Head of GE was (oh so quietly) given a seat on both Obama's Economic Advisory Team and the Federal Reserve's Board.

GE will do fine, at least on Wall Street, practically a guarantee considering where Mr. Immelt socializes.


On Sep 15 08:12 AM Avooch wrote:

> Hard to Love,
>
>
> Sell Side is the Siren Call of Investors, plug your ears with wax
> and tie yourself to the mast........

Sep 15 09:53 AM

[vaultvix:]

Nice rant, but what is your point? It was interesting at first, but then you lost me when some of the things were factually incorrect. We are back in a bubble, but I don't think you actually understand why. By the way, Colonial was pretty obvious if you looked at their June FDIC call report.

Sep 15 10:29 AM

[Mark Bern:]

reveigel - I couldn't have said it better. I don't think either major political party has America's best interests at heart anymore. I have given up on both. They are simply in a tug of war match for power, each individual elected official trying his or her best to stay in office.

Our country desperately needs TERM LIMITS! We need to rid ourselves of career politicians whose singular focus is on getting re-elected. We need representatives in Congress who are there to serve temporarily and go home and back to their businesses, just like our nation's founding fathers did.


On Sep 13 06:43 PM [e-mail] wrote:

> The title should read; THE COMING CONSEQUENCES OF GOVERNMENT FRAUD.
> Our government is obsessed with power and control. Our government
> is arrogant. Our government is greedy. Our government saps out the
> life of it's citizens through taxes. Our government's huge debt has
> placed our Nation in a bankrupt status. Out government lies, steals
> and cheats it's citizens on a regular basis. Let's count the ways.
> It lies about the programs it proposes. It steals more of our freedom
> with the passing of each new law, rule and regulation. It cheats
> us of our earnings and savings through the insidious inflation tax.
> Unless, and until our government is reigned in, becomes much smaller,
> spends, not like a drunken self serving politician, but like a prudent
> individual, family or business, we will continue down the road to
> disaster and eventual destruction.

Sep 15 10:56 AM

[Mark Bern:]

Going forward in this economic environment, I would expect residential real estate prices to be a function of wages. If wages rise with inflation, home prices will be bid up, but (at least for a while) will probably lag. But, keep in mind that wages are not likely to rise significantly enough to positively affect housing until we see employment rising significantly. As long as there is an excess of labor, the prices employers have to pay for that resource will probably s remain relatively flat.

On the other hand, if inflation is severe enough, corporate profits may stagnate in real terms which could require much more stringent cost controls by businesses. That could equate to a very slow recovery in employment, in which case wages would lag inflation significantly. That could dampen demand for housing and keep home prices from rising as fast as inflation.

I own about 100 investment properties, so there is no profit incentive for me to speak badly about housing. It is the picture I see as our future. And I don't like it any more than anyone else.


On Sep 14 07:13 PM Barney Smith wrote:

> excellent article and interesting comments. Anyone care to share
> your thoughts on what this might mean to future real estate prices?
> Will inflation due to currency devaluation cause prices to rise eventually?
> Or will some other force somehow keep prices flat or cause them to
> decline?

Sep 15 11:09 AM

[Reggie Midd...:]

Petition to congress to break up the banks: www.sendmyvote.com/pet...

Sep 15 01:58 PM

[Joe Duggins:]

The Bernard Madoff and the Allen Stanford scams have shown that seemingly reputable financial institutions can have darker sides. Fraud costs trillions of pounds each year to the world's economies. The Financial Services Authority in the UK puts prime importance on the tackling of the issue and along with other financial institutions has set up a number of initiatives to attempt to tackle the problem.

Fraud affects every sector of society and is continually evolving as fraudsters look to come up with new ways to steal from individuals, companies and the government while evading the authorities. Banking fraud in particular is huge and growing despite many initiatives to attempt to tackle it.

The introduction of chip and pin has helped to reduce card fraud in retail stores and where other physical transactions take place. As a result fraudsters are moving over to the internet as it provides a greater number of opportunities with less risk.

Phishing scams are the most common form of online fraud. Millions of emails are sent daily from fraudsters pretending to be from banks and financial institutions. Once the user clicks on the link they will be taken to a mock up of the banks internet login page. If the user is fooled and attempts to login the fraudsters will capture the online banking details. There are many variations of this scam and other internet schemes designed to fool users into providing fraudsters with their banking details.

For those concerned about how fraud can affect their organisation then they can attend one of the many fraud related conferences that are held across the world. Different conferences will obviously be discussing different subject matters so choose one which covers the specific area of interest.

A well planned conference will have leading industry experts discussing current fraud practices affecting the financial services industry and businesses as well as the how to deal with these concerns.
-----------------------

Money without intelligence is like a car without a road.
www.intelligentinvesti...

Sep 15 02:58 PM

[Cramer #1:]

Market anticipating a "V" shape recovery....with less than 10% unemployement....now FED said "U"....may be "W"....who knows now???
But market won't like that at all.....WITH PROFIT TAKING...and a 10-15% CORRECTION....SOON OR LATER....

The market won't like that because market was anticipating a "V"
shape
recovery!!!

"Yellen said she is forecasting a recovery that is far less robust
than those following past recessions, and expects it to look more
like
the letter U than a V. "


S.F. Fed's Yellen says recovery still at risk of shocks
She's worried more about threat of falling prices


SAN FRANCISCO (MarketWatch) -- San Francisco Federal Reserve Bank
President Janet Yellen said Monday she expects the economic recovery
in the U.S. to be "tepid" and slow, suggesting that a debilitating
and
sustained drop in prices poses a greater threat than runaway
inflation.


In a speech to a group of financial analysts here, Yellen said that
this summer probably marked the end of the U.S. recession, and that
the economy is on track to expand in the second half of this year.


Bernanke's challenges in Term 2President Obama chose the safer path
when he reappointed Ben Bernanke as the head of the Federal Reserve.
But David Wessel says Bernanke has two big challenges ahead: proving
his independence and deciding when to tighten up monetary policy.
But the expansion that's already started to gather steam "will remain
vulnerable to shocks," and the unemployment rate will remain
"elevated
for a few more years," she said in a speech, delivered 10 minutes
before the close of stock-market trading.


Yellen said she is forecasting a recovery that is far less robust
than
those following past recessions, and expects it to look more like the
letter U than a V.


Even a growth rate of 3% to 4% in the gross domestic product would be
considered "tepid," she told reporters after the speech.


An expansion at those levels "will leave us with an unemployment rate
that's way too high for far too long," she said.

Sep 15 03:00 PM

[RiskAverseA...:]

I'd rather be un-American than stupid, and that is why I am extraordinarily bearish like Mr. Kim. However, to call the bounce off March '09 bottom "fraud" seems a bit arbitrary to me. Why not suppose the fraud began when the [collapsed] Ponzi scheme called "structured finance" went into suicide mode with its securitized sub-prime mortgages? Or, how about when Alan Greenspan became Fed chairman and turned over central bank policy making to leveraged speculators? Then again, there was Richard Nixon's destruction of FDR's Bretton Woods global trade arrangement. Has this not proven the mother of all frauds perpetrated on the American middle class? Sure, I can buy my doodahs cheaper at Wal Mart ... now if only I could find a job...

Sep 15 10:31 PM

[NUNAY the KING:]

Cry Babies!

I have never read so much blustering from a bunch of people comfortable enough to be sitting down in front of a computer, probably eating a big fat sandwich smearing mustard, topped off with their favorite ice cream treat, telling me how their world has been destroyed by all of these nasty, secretive rich people who had it in for...gulp! ME!!
By golly I sure am enlightened now. Yes the sky is falling, Henny Penny has just told me! Why don't all of you fools simply box up your money and send it to the government, as it is obvious that there is no way you can stop the oligarchy , listen to the man!
J.S. Kim, who obviously has talent to fool most of the people all of the time, can get away with a statement like, " Remember that it is only the timing of this decline that I am uncertain of, but I am very certain that a significant decline of a shocking nature is coming ".
WOW! As if that has never happened before.
My God, without even thinking about it, and you can quote me on this, let me say that "after numerous up and downs in the market in the coming years, there is really going to be a breakout cycle!"
Yes quote me. I am not even going to bother telling you that it is the oligarchy just throwing us some crumbs to get us back into the game, but it is already planned and that they are just waiting for a new generation to come in, after you and I have moved on to a better place.
Do conspiracies happen? I am sure of it. I just find it amazing that the one J.S. Kim suggests, must have had fifty thousand people working like a fine tuned BMW to have pulled it off. And to think I didn't catch wind of it...what was I thinking and doing at the time? Those damn secretive Republicans! What I am sure of, right here right now, is that ALL of YOU who believe this J.S. Kim's letter must be smart enough to buy Smith & Wesson stock eh? Did ya make some money in it?
Nuff said

Sep 16 01:12 AM

[Shaftsinker:]

Frankly it's a shame this article has tarnished the pages of seeking alpha. It is of course beautifully written as any fear-mongering propaganda should be, and if the author is correct about his W analysis it will be for reasons that lie in his financial brain and not his revolutionary heart.

To so bluntly and confidently state that a coming crash will be the result some deliberate scheme being perpetrated by a convert group of shadowy, wicked banksters is absolutely asinine. It is on the same level of conspiracy delusion as those who claim 9/11 was the work of government agents rigging the WTC with explosives under the watchful eye of the Bush Administration.
Where the end result evidently lies in gross incompetence and predictable human arrogance there will always be those, such as Mr Kim, who see imaginary puppet masters pulling the strings and orchestrating impossibly complex and malevolent schemes.

I must understand much less about the world and human nature than I thought I did if it is in fact a place where the President of the United States deliberately seeks to destroy his economy and his currency in order to secure a future career as an investment banking consultant.

And I must certainly re-evaluate my understanding of macro economics if the world’s most powerful financial hands and organizations dream of a world riddled with recession, high inflation, high unemployment, low consumer spending, and a scarcity of credit.

Sep 16 08:32 AM

[Troy Jensen:]

Good lord, such exaggeration! Agree with the comment before mine, excellent prose, well-written with the dramatic climax of the Vendetta video clip, as all ridiculous propaganda always is. Give me a break...very surprised Seeking Alpha would indeed let this garbage even be posted on its pages.

Sep 16 06:18 PM

[Troy Jensen:]

Well done!! Clear-headed comment, insightful...and in my view, correct. ;)


On Sep 14 03:23 PM Ransome wrote:

> I will take a contrary opinion. I don't think they know what they
> are doing. It is simply crisis management. My views have changed
> since reading the recent articles at Bloomberg about the Lehman collapse.
>
>
> In other words, if you call GS and ask for a crisis solution, they
> will give a GS solution. They are not geared towards saving the
> economy, they are geared toward succeeding at financial capitalism.
> If Paulson called a distressed homeowner, he would have been given
> different advice. The main thrust of the crisis solution was focused
> on the middlemen. The middlemen have little effect on the economy.
> The faulty or toxic products they created had an enormous effect
> on the national and global economy but that was not the focus, it
> was propping up, writing down securities, moving securities, a bookkeeping
> exercise with respect to the real economy. All the "secret" movement
> of money and securities are bookkeeping exercises to manage the colossal
> leverage and interconnectedness that would burn down the house if
> rules were followed and activities transparent.
>
> It's the millions of people being displaced or losing jobs that is
> wrecking the economy. It is the investors and borrowers that got
> creamed and ignored. The fact that GS can now make money algo trading
> has not helped the economy one bit.
>
> This is simply crisis management with attendant information control.
> Folks are nervous that a AAA plan will go bankrupt tomorrow mostly
> because the "problem" has spread in so many directions and into so
> many sectors that can not be controlled as simply as giving a bunch
> of money to AIG. The complexity and interconnectedness has been
> stunning. Every player has been fined tuned in the art of financial
> capitalism and not remotely geared to undo or fix problems. In financial
> capitalism you never look back, you look for new opportunities, whereas
> forest firemen are always looking back. These crises are not planned,
> it is the result of recklessness and a gross lack of foresight while
> living in the moment. Once you and the herd are swept up and can
> hear the roaring of the falls around the bend, it is too late.<br/>
>
> Besides, gold gave us a lot of problems during the Long Depression.
> Stability comes from a Real Bills Doctrine but folks at SA don't
> want stability. Financial capitalism withers away and Industrial
> capitalism requires folks to make money the hard way, where value
> is exchanged for value and those adding the most value are rewarded.
> Financial capitalism appears to be adding value but moving money
> from pocket to pocket for a fee is not.
>
> What I really think is going on is the monetarists, and there are
> plenty, are trying to salvage their relevancy while in crisis management
> mode. It turns out that if folks have the freedom to make the best
> choice, it is often results in following the herd over the falls.

Sep 16 06:27 PM

[Bill S. Friend:]

I agree wholeheartedly. This article poses questions I am still digesting, as well as putting into words some of the very same concerns I havent found the words to impart. Thank you for your clarity and please keep writing.

Sep 16 08:46 PM

[scottfairplace:]

I think this is a good read. I am wondering if anyone is thinking that all the publicity for "Cash 4 Gold" and other similiar programs is an organized and planned effort to remove gold from the people as our currency continues to decline?

Sep 16 09:26 PM

[CoffeeRampage:]

The housing crisis in the United States is providing a ready market of victims for foreclosure scam artists and criminals preying on unsuspecting Americans who find themselves in a difficult situation. The unprecedented number of foreclosures in this nation is making the mouths water for up and coming white-collar scam artists. New foreclosure assistance companies and loan modification companies are springing up faster than they can be counted. Former mortgage brokers have now switched and suddenly become experts in loan modifications and foreclosure assistance. Everyone seems to be an expert in the foreclosure assistance market. Who will be the next victim-it could be you. Foreclosure scam artists commit several felonies in perpetrating their crimes including mail fraud, wire fraud, bank fraud, and providing false statements to federally insured lenders. Americans with a foreclosure problem are receiving five to ten phone calls every day and mailings too numerous to count. Yet this is only half the problem. Bankers, scam-artists, and straw buyers are all complicit in these crimes but government law enforcement officials and even the F.D.I.C. are standing back allowing it to happen.
----------------------...
Money is like muck, not good except it be spread.
www.topinvestingtips.com

Sep 17 04:58 PM

[spald_fr:]

On Sep 16 08:32 AM Shaftsinker wrote:
> Frankly it's a shame this article has tarnished the pages of seeking alpha.

Well since it's your first post, I'd sure like to know what shaft you're sinking. Arghhgh. Welcome aboard, Matie.

Sep 17 06:29 PM

[spald_fr:]

On Sep 16 08:32 AM Shaftsinker wrote:
> Frankly it's a shame this article has tarnished the pages of seeking alpha.

Well since it's your first post, I'd sure like to know what shaft you're sinking.

Sep 17 06:29 PM

[manu:]

nail hammer head great comment

On Sep 11 08:29 PM recession graduate wrote:

> while the enormous conspiracy theories suggested by your article
> are a bit tin-hat, i would agree that there are likely some pretty
> serious troubles under the surface in the banking sector, although
> the extent will only be visible after the fact.
>
> those familiar with the government's handling of the s&amp;l crisis
> will recognize the danger of many of the policies adopted thus far.
> providing cheap money and an explicit guarantee to lenders that are
> insolvent or approaching insolvency creates some seriously skewed
> incentives. thrifts in this position chose to bet the farm on commercial
> real estate loans, hy debt from lbo's, and engage in other wholly
> inappropriate transactions while using their legislative muscle to
> get the FHLBB to relax reporting requirements. those unable to continue
> were merged into other banks to avoid bankruptcy.
>
> all of these policies greatly magnified costs and delayed ultimate
> resolution by years (some would suggest up to 60% of the final fiscal
> cost, although estimates are understandably difficult)- the problem
> was visible in 1982, wasnt taken seriously until 84-86, and wasn't
> fully wrapped up until 92-93. sound vaguely familiar to anyone?
>
>
> our government is extremely poorly set up to accommodate systemic
> banking episodes- there is no monitoring capability, no explicit
> responsibility, and no guidelines for a major credit event and the
> result is that policy gets tossed around between various agencies
> seeking to avoid responsibility and shift the costs on to others.
> the structure of the resolution trust corporation is a good example
> of the bureaucratic monstrosities such an institutional structure
> creates.
>
> i sold all my banks in early august after giving some thought to
> how little transparency is available into balance sheet quality and
> to the past failures of government resolution of failed banks. this
> is a much bigger problem that the s&amp;l crisis, the 87 crash, or
> the tech bubble, and i think people tend to lose sight of that.
>
>
> i don't think that elaborate conspiracy theories are justifiable
> or even necessary to explain the rally- everyone in markets has learned
> to buy the dips in the past couple decades and has no memory for
> serious extended economic drawdowns. its not surprising they're
> failing to comprehend the scale of the shift occuring, and politicians
> with a tie to status quo policy will always tell the citizenry everything
> is just fine, no matter how dire the reality.

Sep 18 03:22 AM