Friday, September 18, 2009

Davos on the Edge / Market Thread 9.19.2009

  • Now, Where's the Market Headed? (Chart)
  • Fantastic Melrtdown Slide Show, (H/T Dogs)
  • Wells Fargo Executives, Nothing but the Best (H/T Cat, Possible Repost, Video)
  • So Much For High Frequency Trading
  • Where are the Sailboats?
  • I Pledge Allegiance to the Debt (Seen on The Coming Depression blog)
  • Iowa Attorney General: "Option ARMs are about to explode"
  • Congressman Grayson: Fed Secretly "Stuffed" $500 Billion into "Foreign Private Pockets" and Gave $230 Billion to Citi "As a Secret Bailout" (H/T Jeff Borsuk)
  • Enron Accounting and not by Arthur Anderson
  • Garbage In & the Good Get Out
  • There is a God: More Cable Bandwidth for Bloggers


Now, Where's the Market Headed? (Chart)

Fantastic Melrtdown Slide Show, (H/T Dogs)

"[The impact of] problems in the subprime market seems likely to be contained." ~ Bernanke

Wells Fargo Executives, Nothing but the Best (H/T Cat, Possible Repost, Video)

So Much For High Frequency Trading

The Securities and Exchange Commission has proposed halting high frequency and flash trading.

In response, Nasdaq (and others) are now prohibiting flash orders. Supposedly, the NYSE is also considering banning the practice.

This was a given. The real question that remains unanswered and demands a thorough investigation is this: WHAT EXCHANGE OFFICIALS APPROVED THIS? WHO BELIEVED THAT ALLOWING FAVORED FIRMS TO FRONT RUN OTHER INVESTORS WAS OK?

Quite bluntly, the clueless dolts who allowed this to occur need to be publicly excoriated, fired from their job as exchange officials, and driven out of town on a rail. Oh, and, all the gains from this organized theft should be clawed back from all the front-running firms that stole this money — THAT’S RIGHT, ITS THEFT — one quarter cent at a time. Put the recovered ill-gotten gains into the SIPIC fund that compensates investors who have been defrauded by their stock brokers.

Stop for a moment to consider what sort of massive disregard for the investing public is required to permit this kind of trading. The sheer hubris that finds no problem in this exchange permitted encouraged theft is hard to fathom.

One of the problems with the most recent crisis is that there have been no shaming of the responsible parties, no disgorgement of ill gotten gains, no perp walks. We need to change that pronto.

Where are the Sailboats?

omething more modest, perhaps? How about:

Length: 22′-29′

Year: 2002-2006

Price: USD $0-50,000

That gets you 29 choices.

As I have noted many times in the past, I am a big believe in being a counter-cyclical spender. I try not to buy stuff when the economy is on fire and everything is overpriced. I don’t believe in using excess credit (Like these folks that ended up having their boats repo-ed)

This year, I have been selectively shopping for , and occasionally buying, whatever I thought was priced right — especially distressed merchandise.

27 crownline

I Pledge Allegiance to the Debt (Seen on The Coming Depression blog)

Iowa Attorney General: "Option ARMs are about to explode"

In Arizona, 128,000 of those mortgages will reset over the the next year and many have started to adjust this month, the state's attorney general, Terry Goddard, told Reuters after the meeting.

"It's the other shoe," he said. "I can't say it's waiting to drop. It's dropping now."

This was a meeting of state AGs discussing mortgage scams with the Obama Administration, and based on the comments, there was an emphasis on Option ARMs.

I guess that deserves a Hoocoodanode?

Congressman Grayson: Fed Secretly "Stuffed" $500 Billion into "Foreign Private Pockets" and Gave $230 Billion to Citi "As a Secret Bailout" (H/T Jeff Borsuk)

Just a few weeks ago, while Chairman Bernanke was testifying to Congress, we examined the Fed balance sheet and P&L statement only to find what looked like the Fed handing over half a trillion dollars to foreigners. This was very surprising! When I asked Chairman Bernanke if this was true, he said, “Yes.” When I asked him who got the money, he said, “Fourteen foreign Central Banks.” And when I asked to who did they give the money, he said, “I don’t know.” “I don’t know” is not good enough when you’re talking about $500 billion. That’s $1700 for every man, woman, and child in this country...

Enron Accounting and not by Arthur Anderson

It got sold all right - right at the "120 day" late point where Wells counts a loan as "defaulted."

But look at who it got sold to..... (click for a larger copy)

Yes, Wells bought the loan from.... itself?


Garbage In & the Good Get Out

Annual Decline In CNBC Viewership Accelerates: Down 37% In Overall Viewers Category

There is a God: More Cable Bandwidth for Bloggers

The change is effective immediately. So Mr. Kneale will not get a chance to say goodbye to his 8 p.m. audience. Nor will he get to take one final shot at anonymous bloggers.

Thursday, September 17, 2009

Davos on the Edge / Market Thread 9.18.2009

  • Dollar "May" Fall Further After Reaching Lowest in Almost a Year
  • How to Lose a War: Pentagon Hires Investment Bankers, Preps for Economic Warfare (Seen on the Coming Depression Blogspot)
  • David Tice Part 1-4 (H/T iDoctor)
  • Your ETF-silver is For Sale
  • Top Goldman Lobbyist Barred From Communicating With House's Financial Services Committee
  • Report: Fed Reviews Banks CRE Exposure
  • Dem Senator Warns of 'Big, Big Tax' on Middle Class in Baucus Bill
  • Flow of Funds Analysis - Big Declines in Credit Market Debt (except for Government)


Dollar "May" Fall Further After Reaching Lowest in Almost a Year

“The dollar is on its back heels,” said Brian Dolan, chief currency strategist at, a unit of the online currency trading firm Gain Capital in Bedminster, New Jersey.

How to Lose a War: Pentagon Hires the Type Who Got us Into This, Preps for Economic Warfare (Seen on the Coming Depression Blogspot)

But instead of military brass plotting America’s defense, it was hedge-fund managers, professors and executives from at least one investment bank, UBS – all invited by the Pentagon to play out global scenarios that could shift the balance of power between the world’s leading economies.

Their efforts were carefully observed and recorded by uniformed military officers and members of the U.S. intelligence community.

In the end, there was sobering news for the United States – the savviest economic warrior proved to be China, a growing economic power that strengthened its position the most over the course of the war-game.

The United States remained the world’s largest economy but significantly degraded its standing in a series of financial skirmishes with Russia, participants said.

The war game demonstrated that in post-Sept. 11 world, the Pentagon is thinking about a wide range of threats to America’s position in the world, including some that could come far from the battlefield.

And it’s hardly science fiction. China recently shook the value of the dollar in global currency markets merely by questioning whether the recession put China’s $1 trillion in U.S. government bond holdings at risk – forcing President Barack Obama to issue a hasty defense of the dollar.

“This was an example of the changing nature of conflict,” said Paul Bracken, a professor and expert in private equity at the Yale School of Management who attended the sessions. “The purpose of the game is not really to predict the future, but to discover the issues you need to be thinking about.”

David Tice Part 1-4 (H/T iDoctor)





Your ETF-silver is For Sale

If you want to own silver, then buy real silver. Thanks to the manipulations of the bullion banks (including their massive scam with the bullion-ETF's), we can all still buy real silver at a ridiculously low price – for a very limited amount of time.

If you're buying a bullion-ETF, or holding a bullion-ETF, then very likely all you are holding is paper.

Top Goldman Lobbyist Barred From Communicating With House's Financial Services Committee

for a period of 12 months.

Report: Fed Reviews Banks CRE Exposure

People familiar with the examinations say the fed is "getting granular" looking, for example, at the differences in banks' concentration of construction loans vs. multifamily vs. motels and retail.

Dem Senator Warns of 'Big, Big Tax' on Middle Class in Baucus Bill

Given how much money this kind of tax can raise, Rockefeller says he understands why it is "tempting."

Flow of Funds Analysis - Big Declines in Credit Market Debt (except for Government)

Martin Artmstrong, Japan & It's Future After the LDP! The Last Throes of a 26 Year Economic Depression 2016

Just got the latest Martin Armstrong papers, I haven't had a moment to even skim them, once I do I will post some notes....unless the real maestro beats me to it.

Japan and Its Future After the LDP

Martin Armstrong, Soaking the Poor for the Benefit of the Rich, What Marx Got Right

Just got the latest Martin Armstrong papers, I haven't had a moment to even skim them, once I do I will post some notes....unless the real maestro beats me to it.

Wednesday, September 16, 2009

Davos on the Edge / Market Thread 9.17.2009

  • Rogers: Expect it. (Video)
  • Ron Paul: Second Great Depression (Video)
  • Bernanke: "Recession Is Over" (Depression Has Just Begun)
  • Trilateral Plan to Corner World Gold Market? (H/T DrKrbyLuv)
  • Next stop for Uncle Buck? (Chart)
  • Some more September (1930) news:
  • Ghost Fleet of the Recession = Biggest Maritime Gathering Ever
  • Inflation USA Video
  • Military weapons turned on civilaians at town hall meetings
  • EXCLUSIVE: W.H. collects Web users' data without notice
  • The I word: Gold Rises to Record Settlement Price on Inflation Concern


Rogers: Expect it. (Video)

Ron Paul: Second Great Depression (Video)

Bernanke: "Recession Is Over" (Depression Has Just Begun)

Bernanke's gambit has failed - we must recognize the mathematical facts, force the bad debt out and clear the system.

Trilateral Plan to Corner World Gold Market? (H/T DrKrbyLuv)


If Fekete is correct, and he has seldom been wrong, then the trap is snapping shut on who will own the gold in 2009. Free-market supplies of gold are drying up, but the price is being kept low as global institutions sop up whatever crumbs are left.

Several very serious implications can be drawn:

The massive amounts of gold leased to bullion banks will ultimately be seized by these same banks as collateral against worthless paper loans made to the Central Banks.

Central Banks (including the Federal Reserve) could well be left to disintegrate in order to give way to a single global central bank controlled and fueled by the bullion banks who have monopoly control over the world's gold.

These superbanks are all closely tied to the goals and membership of the Trilateral Commission, whose members have methodically carried out a monetary policy designed to bring about this eventuality.

For all practical intent, individuals will be frozen out of the gold market at any price.

Indeed, a global totalitarian state may be closer than we think; as the globalist's golden rule states, "He who has the gold, makes the rules."

Next stop for Uncle Buck? (Chart)

Some more September (1930) news:

Some more September (1930) news:

Brokers, businessmen, and even the general public more optimistic; over 75% of brokerage houses now advise buying stocks.

Offering of $334.2M in 2 3/8% one-year Treasury certificates is oversubscribed by almost 4:1.

B. Anderson, Chase Natl. Bank economist, says Fed policy of easy money will not be sustainable when business revives; suggests moderate tightening now to avoid shock of a sudden severe tightening later.

Florida Bondholder's Adjustment Committee calls on owners of defaulted local bonds to accept arbitration with principle that local govt. should “pay to the full extent of its ability to pay” when fairly determined, and no more. Says full payment in many cases impossible due to string of problems in past few years including collapse of real estate boom, bank failures, storms, and Med. fly scare; local feeling is that many bonds were voted in due to high-pressure tactics by outsiders.

Roger W. Babson (economist, made perfectly timed bearish call in fall 1929) optimistic on immediate future, sees possible “stampede of orders” due to underproduction; says it's as evident now that business is bound to improve as it was clear a year ago that it must deteriorate.

The great debate: Bears argue that past month's rally has already discounted the mild improvement in business, and that decline in steel production in past week indicates weakness. Bulls counter that steel decline was due to Labor Day, that August steel and car loading figures show more than seasonal improvement, and that recent retail figures and company outlooks have been improved. On the technical side, bulls believe the recent rally has “definitely broken” the downtrend since last Sept., indicating future support should come in well above the June bottom of 212.

“While the recovery in business will undoubtedly be gradual, and characterized by confusing uncertainties, the fact remains that all indices that have pointed to revival in the past are now existent. As the stock market is usually some months ahead of trade, observers ... think there is a good chance that Wall Street will be the outstanding bright spot of the country during the winter months.”

Chariman Ben sure is a good Great Depression historian

Ghost Fleet of the Recession = Biggest Maritime Gathering Ever

Inflation USA Video

Military weapons turned on civilaians at town hall meetings

On Monday, members of the American Civil Liberties Union spoke with 10News, and they expressed outrage that local law enforcement had the device and that they had brought it to recent town hall meetings in case things got out of hand.

Kevin Keenan, of the ACLU, said, "We think that local law enforcement shouldn't be using military style weaponry like that."

EXCLUSIVE: W.H. collects Web users' data without notice

The White House is collecting and storing comments and videos placed on its social-networking sites such as Facebook, Twitter and YouTube without notifying or asking the consent of the site users, a failure that appears to run counter to President Obama's promise of a transparent government and his pledge to protect privacy on the Internet.

The I word: Gold Rises to Record Settlement Price on Inflation Concern

The worst U.S. recession since the 1930s has probably ended, Federal Reserve Chairman Ben S. Bernanke said yesterday. The dollar slid to its lowest level in almost a year against a basket of six major currencies as the economic outlook reduced demand for the greenback as a haven. Gold futures were 1.3 percent below a record $1,033.90 an ounce set in March 2008.

Day 3, Los Lunas, NM. To Marfa, TX – El Paso an Economic Boom Town?

Finally, a short day! Only 440 miles from Los Lunas to Marfa, the route took me through El Paso where I had an invite to meet Tim F. for lunch to discuss the seeming disconnect from the robust economic activity he sees there versus the hell-in-a-handbasket he reads from bloggers like me!

First off, note that Google maps doesn't even list El Paso until you zoom way in, LOL, it prominently displays Juarez though:

View Larger Map

I traveled roughly 2,000 miles in 2.5 days. The bike’s computer says that I am averaging 73.4 miles per hour when the bike is running, that’s really a good pace, one that I expect will be cut about in half from here on out, but we’ll see.

I got up a little later than the morning prior and headed out south across the desert:

It was a beautiful morning, the type of morning that I love to be outdoors. The smell of the fresh cool air combined with the soft morning light to accentuate exactly why riding a motorcycle, and a good one, is the way to see the world.

I rode the entire 3.5 hours to El Paso non-stop, passing through the very pretty Truth or Consequences, NM area, past Las Cruces and began hitting the suburbs of El Paso fully 10 miles prior to the bustling downtown area.

Nearly 2,000 miles of riding and never a traffic jam until I near downtown El Paso. An accident blocked the freeway and I spent the best part of a half hour in stop-and-go traffic in the 95 degree heat. The not-so-pleasant part of seeing the world via motorcycle!

It's NOT the El Paso I remember from over 20 years ago, that's for sure. It looked much more like Seattle with overcrowded streets and crisscrossing highways in the sky!

I still arrived a few minutes early to meet up with Tim. I found his suggested taco restaurant no problem:

The CHIH’UA was clean and almost empty at 11 AM, Tim arrived about 5 minutes after me, the timing was excellent considering the length of time I traveled to get there.

Tim arrived and introduced his friend and co-worker, Ray - that's Tim on the right, Ray on the left.

They work right around the corner for a contracting company that is building small storage units on Ft. Bliss under GOVERNMENT contract. Tim was succinct in explaining that the economy around the area seemed robust and was disconnected from what he was learning about economics from the non-mainstream media sources, all of which he rattled off I would recommend as being right on the money. I think a lot of people see busy streets, a stock market that is currently zooming from its lows and they KNOW that something is not right in their gut.

This “disconnect” produces anxiety, particularly in forward thinking people who are aware of the debt and who see and feel that the cost of living the “American dream” is getting out of reach considering an average persons’ wages. As Ray said, “It seems out of whack that a decent car should cost $20,000!” A great observation, and just look at how many cars are on the road that cost $30,000 or even $40,000 or more! What do those people do to afford those?

Well, what they do is finance them for longer and longer periods of time with more and more gimmicks to “get the credit flowing.” A banker’s credit, of course, is your debt!

We discussed the average price of housing and how it’s still high compared to wages. As I pointed out, both are good examples of bubbles. Yes, the price of autos was and still is a bubble, one that is being fostered by our own government - cash for clunkers being the latest distortion, the bail out of Chrysler and GM being a huge, menacing misallocation. It was, and is, nothing but a central banker money laundering scheme that bypassed the bankruptcy laws and funneled money to the central bank debt holders BEFORE the other creditors could be paid as is dictated by the rule of law that currently exists. America is going to pay dearly for these moral hazard blunders in the future, you will NOT see capital (money) form to start up truly innovating companies that actually manufacture something in the United States as long as the rule of law is being subverted by corporate interests. Their money is buying them political favors, plain and simple. This is why I suggest that corporations and their money should be separated from State in the same manner that religion is separate.

But I digress… Tim went on to talk about how the Base Realignment and Closure (BRAC) commission consolidated military bases and that the local Ft. Bliss was a huge recipient of funds, on the order of several billion dollars. The base has been building up for the return of troops from Europe and the Middle East. Tim speculated that that money was fueling a boom that trickled into the local economy.

I’m certain that some of the activity in the area is a buildup towards Juarez/ El Paso sharing in a portion of the NAFTA Superhighway. Below is a YouTube link explaining the superhighway (YouTube videos are not embedding correctly for some reason):

LINK: CNN Story, NAFTA Superhighway…

Yes, the infrastructure is good around El Paso. Miles and miles of good fresh concrete highways with fast speed limits.

While I love the high speeds, I don’t love the fact that the REAL JOBS of American productivity are outsourced overseas. What you’re seeing is money (capital) that is being put to work elsewhere and NOT in the United States. That’s what happens when the rule of law is not followed and the central bankers press to build a world full of cheap labor, indebted nations, and indebted individuals all being pitted against one another while the central bank skims interest off all “credit” transactions and builds a ruinous shadow banking system that rewards them while selling off toxic securitized debt “assets” to your retirement funds!

Get it? If not, make sure that you spend some time reading up at my economic blog,

So there sits Tim and Ray wondering what’s happening and what they should do for the future. Tim is aware, a kind of watchdog for his family. I noted that society is full of watchdogs, but they are more rare and that most are basically sheeple. He’s buying some gold, and most importantly he’s staying out of debt, THE KEY TO BEING FREE.

Our conversation is pleasantly interrupted by our meal, sliced pork taco plates

Mmmm, delicious! We all enthusiastically downed every last bite. Ray picked up the reasonably priced tab by the way, thank you Ray!

Tim and Ray went on to explain that they have been building storage units on Ft. Bliss for nearly 3 years, most remain empty and they are still building them. Tim has a little angst about the future, and I didn’t help to ease his angst when I compared building those units to digging one hole, then digging another while filling up the first!

I explained that government spending IS NOT REAL ECONOMIC ACTIVITY. In fact, government spending is NEGATIVE ECONOMIC ACTIVITY because every dollar that is spent must come from the PRIVATE REAL ECONOMY.

Our spending on our military industrial complex is simply out-of-control. We spend more on national defense than the rest of the world combined. That is the height of economic mass psychosis to believe that that is sustainable, it’s simply not. This type of corporate pandering has built debt levels that are so large THEY CANNOT MATHMATICALLY EVER BE REPAID! History shows that countries who get into that position do not fare well – “other events” tend to follow. We will not be an exception when the history books of the future are written.

I explained to Tim that at some point an event or an ADULT leader will force the government to reign in the spending. When that happens, how secure is Tim’s job building unused storage units?

Sorry, but those units are another example of a misallocation in resources, a huge problem for our economy. I would say that El Paso’s boom is a bubble, just like housing, just like autos. All bubbles burst, and it is painful when they do.

Ray was and still is a skeptic. But the stock market crash and “recession” got his attention that all is not what it seems on the mainstream media façade. He’s ready to roll with punches, though, has a positive outlook and I’m sure will be successful in whatever future economic activity exists. And while my economic outlook is long term negative for America, it doesn’t get me down and shouldn’t get you down either. Life is exciting and worth living fully. We live in fantastic, in fact revolutionary times. Change is hard, but change is coming for America, yes, Tim is right, you need to be prepared, the angst and the disconnects are speaking to you – you would be wise to listen.

It was a pleasant hour of conversation, I think we all learned something from it and that makes it a big positive. Tim and Ray had to return to work and I had to hit the road…

See, I didn’t leave them in tears! Nice guys, hard workers I’m sure.

I hit the road and it was basically 3 hours of hot desert, fast highways, and trucks – a lot of trucks. Below is a typical scene looking across oncoming traffic…

As I pulled into Marfa, I notice that the population sign said 2,121, (SAAALUUTE, for you former Hee Haw fans)! The one and only fast food place was a Dairy Queen, and after 7 hours in the 95 degree sun, I stopped and indulged in a chocolate dipped ice cream cone! Bless America, she may be “a little overweight” but she’s still great!

And Marfa is a town that's easy to like! It’s a throwback to an older, slower America. Very quaint and very quiet, Marfa was a railroad stop and had a boom around the 1930 timeframe (sound familiar? What was happening around then?) when they thought they had discovered oil here. Turns out they didn’t! But Marfa got some terrific and beautiful buildings as a result.

Since Arno was broken down and I had plenty of time, I took a slow tour around the town. Nice homes, clean and quiet. I did notice that there seemed to be a house for sale on just about every block or so, the number of homes for sale looked very high.

I couldn't help but be charmed by the buildings and the churches:

I did notice several art galleries as I rode around. Later I found out that Marfa has become somewhat of an “artsy” little town, and I could see why.

Right in the heart of the town is a big beautiful hotel called the Hotel Paisano. Of course I was looking for a place to stay and it looked interesting, old and distinguished, much different than the other 1950ish roadside hotel I saw. Right in front of the hotel I saw a guy on a BMW R1200RT! I pulled over and met George…

Super nice guy, we spent probably 45 minutes or so talking. He’s on his way to Big Bend to go camping which sounds like fun. I was tempted to tag alone, but needed to be in communication to meet up with Arno. Turns out that George is from Bellingham, Washington, not too far from where I grew up in Anacortes.

It was humorous because as we talked about what each is up to, George brought up the economy, and I was surprise to hear him zoom in on the central bankers and how corporate America was buying off America and her politicians! BRAVO, George gets it! George is now partaking in a little freedom, touring the country on his bike. He gets the concept of expensive houses and autos being debt anchors to life and thus was expressing the importance of FREEDOM. This is a huge concept, one that I give a ton of thought and attention to and have been thinking more about on the ride down. Thus, I’m going to do yet another article to articulate the relationship of FREEDOM AND SECURITY and how that relationship exists in every facet of your life. I’ll get to that later… Great to meet George, I wish we could have spent an evening talking over a few beers, but he headed south and I went into the Paisano to check it out:

What a gorgeous place! I could see someone like Hemmingway just hanging out in a place like this.

After casing the place, I approached the desk and met Stephanie, a cute, young, and articulate life long local. I asked about rooms and prices, I got the starter price range of $99 to $249 per night. I said that was a little rich for my blood and said that I think I’ll mosey on down the road, to which she responded, “wait… we want you to stay here.”

LOL, now we’re talking business! The place was charming as all get out, and that made it worth paying a little extra, but not bubble hotel prices, that’s for sure. We settled on $80 for a night, more than I’m planning for most of my overnights, but I was tired, the place is interesting, I now had an extended layover, and I could use the time to write with some good high speed wireless access. I asked where is the best place for my bike and Stephanie responded, “right out front.” That’s where I put it…

I viewed the plaque next to the entrance and it explained a lot about Marfa and the hotel:

I carried my bags inside and stopped to talk some more with the nice clerk, and to get some information about Marfa and the local economy from her. She said that, indeed, there were way more houses on the market than usual, but that prices were still near their peak due to the art crowd coming into town. She thought they were way expensive (for a normal wage earner - there's that angst). She said she thought the average little house went for about $250,000 and lamented that a vacant and dilapidated "shack" on a tiny lot was asking $60,000 and that it hadn't sold in years of trying.

"What economic activity is there in Marfa," I asked.

"Well, you have the art crowd and the Marfa lights, that's basically it."

"Oh, I read about the lights. Are they real?" I teased.

"Oh yeah, I’ve seen them."

I played along, "Well, what do you think causes them?"

To which her reply was very grounded, "it's probably static electricity or something..."

Here's a link to the phenomena: Marfa Lights...

She was pleasant and knew how to do business, I liked that and took my keys upstairs. The room is very small and mostly in original 1930 condition, or a replica of it at any rate. Not great by modern standards, the biggest negative was the tiny bathroom with fixtures that badly needed updating. Not something I would consider paying $250 a night for, that’s for sure! Leaky old faucets and clear out under the shower when someone flushes a toilet!

That is the nice part of the room, overall the room is a 4 or 5 on a ten point scale. The lobby, courtyard and restaurant are a solid 8 to 9, but the rooms are not acceptable for the money.

The lobby and hotel are built around a courtyard and it is grand and in very nice condition with original wood and tile work. After getting settled in, I went down to the courtyard for dinner. There were a few guests there, but only a few. The group at the table next to me were speaking German. The courtyard is very pleasant:

Having had those delicious tacos for lunch and having spent more than I planned on the room, I opted for an Angus burger. It was good, I’d give it a 7 or an 8 on the Nate burger scale! The fries were fresh cut and had just a little parmesan cheese sprinkled on them – those were a 9. The burger would have been a 9, except the bun to burger ratio was a little too much on the bread side…

Ten bucks, not as bad as some hotels, but still bubble burger pricing. Of course the Nate standard to which all burgers measure up against is my own “10,” my special bagel burger. That’s right, that’s the gold standard right there!

After a decent night’s sleep, I started typing out this report and then went down to the lobby to negotiate a room with two beds since Arno is finally underway. I met the hotel manager who was not nearly as easy to negotiate with as Stephanie. I tried my best to talk her into a good rate, she quoted me $135 for the night, went down to about $115 but that was it – simply too much for rooms like that and in effect I would be paying $55 more for just a second bed. I packed up and said adios.

I then drove down the road a few blocks to the only other hotel in town, the Thunderbird. Yes, it reminded me of the wine. Cheap and in poor taste. But inexpensive it was not as the desk clerk began at $149 for one night and I could talk her no lower than $135 plus tax (which is 13.4% - and I was reading in the paper how Marfa is running a deficit and is voting this week to increase property taxes by 7.9%!!! I said goodbye to Marfa as it had suddenly lost its charm.

This brings up a point about hotels in general. Their occupancy is way down (both hotels less than half full and turning away my best offers), but their costs are not going down, they are being milked by a bloated government.

I jumped on my bike and rode for 50 minutes to the American border town of Presidio, Texas. A lot closer to Mexico in every way. Mostly dirt and gravel streets, only the main streets are paved. The buildings are not nearly as nice, but the town itself is twice as populated as Marfa.

I found a room at “The Three Palms,” because, well… they have 3 palms in a group. Painted bright white and blue, it’s pretty hard to miss. The rooms are pretty standard, but much larger and with a much better and functioning bathroom. Cost is $59 per night. Marfa, in my opinion is a little too uppity price-wise for what they have to offer. There’s a bubble there too, and I just don’t believe in contributing when I see one. Just call me, Nate, the bubble buster!

Hopefully Arno will make it to Presidio today and we’ll finally get hooked up. I just talked to him and he’s about half way here from Houston. Below is a link of tomorrow’s route, it’s on Bing maps. I wish I could embed Google maps for you because that’s a very cool feature, but unfortunately, it doesn’t route over international borders. Bing maps have some very, very neat features too, like routing across borders, but you can’t embed – ah well, never perfection! If you want a very, very cool experience however, take the time to load the Bing 3D map function while you’re there. You can fly the entire route from any perspective. It’s a little tricky to use until you get used to it and you’ll need a pretty fast machine, but WOW! Did I mention that it’s cool?

LINK: Bing Maps

Note that the distance to Creel, Mexico is only 308 miles, but it’s over 8 hours! Yes, it’s going to take awhile, looking forward to it and to seeing the Copper Canyon region, our goal for the next few days.

Al Stewart – On the Border:

Tuesday, September 15, 2009

Davos on the Edge / Market Thread 9.16.2009

  • Ron Paul on CNN: Fed IS the source of the problem
  • D.C.: "The commercial version of the subprime situation"
  • Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman
  • Minsky, “bubbles”, and gold
  • Blogs vs Mainstream Media
  • Debt
  • Ghost Towns in Ireland
  • US credit shrinks at Great Depression rate prompting fears of double-dip recession


Ron Paul on CNN: Fed IS the source of the problem


D.C.: "The commercial version of the subprime situation"

... property managers for the 1.4 million-square-foot [Constitution Center in Southwest Washington], which is scheduled to be completed in November, have yet to land any tenants ... Constitution Center is just one of several dozen existing, newly constructed or soon-to-be-completed office buildings in the Washington region that had vacancy rates in the 80 to 100 percent range as of midyear.

... In June ... the amount of vacant space in the region soared nearly 24 percent, to 47 million square feet from 38 million during the same month a year earlier.

Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman

Sept. 13 (Bloomberg) -- Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.

“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview today in Paris. “The problems are worse than they were in 2007 before the crisis.”

Minsky, “bubbles”, and gold

As I have pointed out in numerous, previous commentaries (most recently with my “Gold Wars” series), this is why gold and silver are seen by the banksters, themselves, as the bane of Wall Street. This is why this cabal of bankers has (for decades) invested vast amounts of time, effort, money, and much of their own hoards of bullion into an effort to suppress the prices of precious metals, and to use their propaganda-machine to attempt to discredit gold and silver as “financial assets” to the greatest extent possible.

Blogs vs Mainstream Media

63% say that news stories are often inaccurate.


Ghost Towns in Ireland

The government is taking over most of the non-residential property loans in Ireland. It is amazing that these loans total about half of Ireland's GDP (not including residential).

US credit shrinks at Great Depression rate prompting fears of double-dip recession

Both bank credit and the M3 money supply in the United States have been contracting at rates comparable to the onset of the Great Depression since early summer, raising fears of a double-dip recession in 2010 and a slide into debt-deflation.

Monday, September 14, 2009

Davos on the Edge / Market Thread 9.15.2009

  • Nobel Prize-winner: Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman
  • Lehman is a footnote in the great East-West globalisation crisis (H/T Minestein)
  • Lehman collapse: President Barack Obama to push banking overhaul
  • Go HOME! CNN: DC Crowd (Video on page)
  • Wells Fargo (Bailout Recipient), Repos Madoff Collateral for Weekend Retreat, Buyer get snubbed. (H/T Cat)
  • WISH YOU WERE HERE (Jim Quinn)
  • Dow 9 years ago (Chart)



Sept. 14 (Bloomberg) -- China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation.

Chinese industries have complained that they’re being hurt by “unfair trade practices,” the nation’s Ministry of Commerce said on its Web site yesterday. The Beijing-based ministry is also looking into subsidies for the products, it said. It didn’t specify the imports’ value.

Nobel Prize-winner: Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman

Global Economy

Stiglitz, former chief economist at the World Bank and member of the White House Council of Economic Advisers, said the world economy is “far from being out of the woods” even if it has pulled back from the precipice it teetered on after the collapse of Lehman.

“We’re going into an extended period of weak economy, of economic malaise,” Stiglitz said. The U.S. will “grow but not enough to offset the increase in the population,” he said, adding that “if workers do not have income, it’s very hard to see how the U.S. will generate the demand that the world economy needs.”

The Federal Reserve faces a “quandary” in ending its monetary stimulus programs because doing so may drive up the cost of borrowing for the U.S. government, he said.

“The question then is who is going to finance the U.S. government,” Stiglitz said.

Lehman is a footnote in the great East-West globalisation crisis (H/T Minestein)

You can see why markets and governments both like to blame Lehman Brothers for the "Great Contraction". Such wishful thinking shields investors from the nasty reality that deeper forces are at work: it absolves officialdom from its own destructive role in fixing the price of credit too low for 20 years, luring us into debt.

Lehman collapse: President Barack Obama to push banking overhaul

On the eve of the one-year anniversary of Lehman's liquidation filing , the US President will on Monday warn that there remains much to be done to ensure the problems of the last 12 months do not happen again.

Speaking just 10 days before the start of the G20 summit in Pittsburgh – at which world leaders are set to discuss curtailing bankers' bonuses among a raft of potentially restrictive reforms – he will also put the amount of capital banks hold on their balance sheets back at the top of the agenda, acknowledging that the demise of Lehman and Bear Stearns were a by-product of inadequate capital requirements.

In a wide-reaching speech on the need for regulatory reform in order to avert another financial crisis he will call on the US Senate banking committee to kick-start work on these reforms as soon as possible.

Speaking from Federal Hall on Wall Street, just steps from the New York Stock Exchange, President Obama will stress that regulators and legislators not only in the US, but around the world, need to take the next steps to tighten financial regulation.

His comments will be closely watched by the banking fraternity on both sides of the Atlantic, eager to ensure that regulations do not become overly

Go HOME! CNN: DC Crowd "Tell the truth" (Video on page)

Wells Fargo (Bailout Recipient), Repos Madoff Collateral for Weekend Retreat, Buyer get snubbed. (H/T Cat)


As I watched some of the Sunday talk shows this weekend, I had to laugh at the fools who pass for journalists today. The outrage over Joe Wilson calling the President a liar because he was lying shows how trite and shallow these nattering nabobs have become. Four U.S. Presidents have been murdered in office for their views. Let’s have some perspective people. As I watched Sam (worst toupee in history) Donaldson, Cokie Roberts, and David Brooks heap scorn and ridicule on the thousands of concerned middle class Americans marching on the Mall in Washington, while applauding Ben Bernanke, Hank Paulson and Timmy Geithner for saving the world by printing money, I realized that the existing political and financial system will have to be brought down before we have any chance to regain our liberty in this country. The power of the Washington/Wall Street/Media elite is immense. We will not get the truth from these people. We must turn to the past for our wisdom and truth:

“I am sorry to think that you do not get a man's most effective criticism until you provoke him. Severe truth is expressed with some bitterness.” – Henry David Thoreau

Dow 9 years ago (Chart)

Sunday, September 13, 2009

Davos on the Edge / Market Thread 9.14.2009

  • Weekend Stupidity Roundup: Debt On Parade
  • Federal Reserve Oversight and the Failure of Riverside Bank of the Gulf Coast
  • Failed Banks, Julian Week #37 Banks #90-93
  • Max Keiser: GP Morgan Goldman Sachs Gold Silver Wall Street
  • FSN, Peter Schiff, Inflation or Deflation?
  • Adviser: High unemployment for years
  • Mike's take on DC protest of too much spending
  • FSN: Same as it ever was, 1930s Depression and now


Weekend Stupidity Roundup: Debt On Parade

Max Keiser: GP Morgan Goldman Sachs Gold Silver Wall Street

Federal Reserve Oversight and the Failure of Riverside Bank of the Gulf Coast

"Emerging problems" in 2007? I strongly believe that action should have been taken much sooner - at least by 2005 - because of 1) concerns about the housing market, and 2) the concentration of loans in residential real estate. From the report:

Historically, Riverside-Gulf Coast focused on growth through real estate lending in its local service area, a business strategy that created concentrations in both the type of loans and the geographic location. In general, local real estate concentrations increase a financial institution’s vulnerability to cyclical changes in the local market place and may elevate a bank’s safety and soundness risk. Examiners noted that Riverside-Gulf Coast experienced rapid growth during its first six years when the bank’s total assets grew approximately 40 percent annually, to $275 million as of December 31, 2003.


Riverside-Gulf Coast’s concentration in real estate loans ranged between 92 and 98 percent of total loans during 2003 to 2008. The bank’s real estate portfolio included traditional one-to-four family mortgages and home equity lines of credit. In addition, a substantial number of Riverside-Gulf Coast’s real estate loans, such as those for residential construction, were categorized as CRE because repayment was dependent on the rental income, sale, or refinancing of the underlying collateral.

emphasis added

The signs of excessive risk were apparent in 2003 to 2005. The Fed is aware of the risks, especially of a high growth strategy with a high loan type concentration. If the regulator was unable to step in sooner and evaluate the risk, then the regulatory process is flawed - and the regulator has already failed. It was too late by 2007.

The inability of the Federal Reserve and the Inspector General to recognize the need for tighter supervision in 2005 or earlier is a serious oversight failure.

Failed Banks, Julian Week #37 Banks #90-93

Corus Bank, N.A.
Chicago IL 13693 September 11, 2009 September 11, 2009
Venture Bank
Lacey WA 22868 September 11, 2009 September 11, 2009
Brickwell Community Bank
Woodbury MN 57736 September 11, 2009 September 11, 2009

FSN, Peter Schiff, Inflation or Deflation?


Windows Media

Real Player

  • 1:00 sand foundation
  • 2:00 cooked data
  • 3:50 loan default deflationary?
  • 6:00 govt. fools
  • 8:50 prices going up today
  • 10:32 can't read notes
  • 12:00 Schiff's investing wins and loses
  • 17:10 Fed's balance sheet
  • 18:20 Velocity or lack there of?
  • 19:20 Nail on the head
  • 21:20 Japan vs. US
  • 23:00 Output Gap
  • Rest good didn't take notes

Adviser: High unemployment for years

The president’s chief economic adviser warned Friday that the nation’s unemployment rate could stay “unacceptably high” for years to come — a situation that would seriously complicate Barack Obama’s ability to convince Americans that he’s beating back the recession.

“The level of unemployment is unacceptably high,” National Economic Council Director Larry Summers said Friday. “And will, by all forecasts, remain unacceptably high for a number of years.”

Summers’ comments came in a briefing with reporters ahead of Obama’s speech in New York City on Monday, marking the one-year anniversary of the collapse of Lehman Brothers, an event widely regarded as having created a panic that caused the global economic meltdown.

Mike's take on DC protest of too much spending

I was at the rally yesterday in D.C., working to educate others that were open minded to listening. 50,000 is such a low estimate it is laughable. I have no experience estimating crowd size, but the march down Pennsylvania Avenue was about a mile long and absolutely filled it. There were many others on the periphery as well. 1 million sounds like a very reasonable lower range to me.

Most that showed up there were simply "anti-Obama," "anti-socialism," but there were a significant number that seemed to have an understanding of the Federal Reserve system and were very responsive when an individual started a chant around the Fed. There also seemed to be a growing awareness of the corrupt revolving door politics with the banks that have a vice grip on our political system.

Anyone that characterizes this rally as simply a "health care thing" is grossly mistaken. Further, there were clearly people there that had no interest in politics for many many years, but have recently become energized. Most interesting of all, were the multiple WWII veterans that appeared in wheelchairs to protest our foreign policy.


-formerly StudentOfJefferson, reporting live from the Washington D.C. Metro Area

FSN: Same as it ever was, 1930s Depression and now


Windows Media

Real Player

  • 2:56 History then vs. history now, economic contraction
  • 4:17 Inept monetary policies
  • Taxes 63%, 79%, 94% and attempted 100% for high income earners
  • 10:50 assault on 4 horsemen
  • 12:57 George W. Kaynes and Franklin Delonor Obama
  • 20:36 David Walker 4 deficits
  • 29:00 UN Currency in the making
  • 34:44 Why a dollar collapse would be disadvantageous to all
  • 38:45 Summers and Romer bring the dollar down in orderly fasion
  • 1:04:40Justice for All (Just tax system)

Once in a lifetime...Same as it ever was, same as it ever was