Archive for August 31st, 2009

Larry Summers’ dubious connections

Monday, August 31st, 2009

Full scoop here. As if Larry’s Jabba the Hut-type of charm weren’t enough, this article brings out but one of his seedy connections.

“By Mark Ames

summers-sleeping

The best way to understand Larry Summers, the man who’s shaping America’s economy from his director’s chair at the National Economic Council, is to meet the people he hangs out with. Once you get to know Larry Summers’ crowd, nothing he does–no matter how twisted (like Larry’s suggestion to move all First World toxic waste to Africa) or deranged (Larry’s theory that women can’t do math)– will surprise you. Whereas the famous “Six Degrees Of Separation” gives the false impression that it’s a small world and we all pretty much know each other, this “One Degree of Separation” will prove how totally alien Larry Summers and his crowd really are from the rest of us. (more…)

Henry Paulson interview in Vanity Fair

Monday, August 31st, 2009

Full story here from Vanity Fair. Personally, I felt it was too much of a softball piece, but here is data straight from the horse’s mouth, so to speak. The lengthy text is sectioned with these headers in bold:

Reluctant Nominee
“If I Could Have Had a do-over…”
“Foam on the Runway”
A “Bazooka in My Pocket”
“I Think There Will Be Big Changes”

“Paulson knew that the Obama administration was bound to face continuing criticism as it dispensed the second $350 billion in funds from the tarp program. He said he thought it was all too possible that the system would need more than that. This was in January, and Paulson knew his words would not become public for many months. “I’d never say it publicly right now,” he told me. “In my judgment, $350 billion is not enough.”

I asked Paulson what sort of new paradigm might emerge in the financial system. “There’s always a tendency to over-react—or to take what’s happening at any one point in time and then look at a trend and get an extreme result that doesn’t happen. I can think of times over the last 10 years when it was all the mega-banks that were going to inherit the world. Then it was, you know, private equity and hedge funds. So I think there will be big changes, but I think the changes we’re going to see are going to have to do much more with the shape of the regulatory system, the regulatory powers that are acquired, the financial architecture globally and domestically.”

Henry Paulson arrived in Washington hoping to find the sliver of daylight that might help his party redeem itself, and to help a president who he hoped might yet do good things. He came to believe that in the face of turmoil the biggest mistake that economic policymakers could make was to do too little. Some of his furious fellow Republicans came to believe he did too much—as do some furious critics on the left, though for different reasons. Paulson himself is relieved just to have gotten us through the night.”

Are we facing a banking crisis?

Monday, August 31st, 2009

Full story here from Market Oracle. If you want my short-version answer, that’d be “Yes”.

Summary

The markets appear to be anticipating a banking crisis.

If confidence is lost in the commercial banking system, the following is a reasonable outcome:

  • There will be a rush to invest “cash” money (previously held in banks) into treasury bonds backed by the government as opposed to the FDIC
  • The gold price will explode upwards
  • The US Dollar will not move inversely to the gold price. More likely, it will also rise, albeit less violently as the “safest” and “most liquid” treasury markets are denominated in US$.

When read together, the long term charts of all three investment categories are in fact pointing to the increasing probability that confidence in the integrity of the commercial banking system has been eroding. (more…)

Fed is accelerating the monetization of debt

Monday, August 31st, 2009

Full story here from Bob Chapman. This beats the dull old mental mush being dished out at the mainstream news outlets.

“Bob Chapman writes: The public option for Obama insurance coverage has been described as just a sliver of the overall proposal. Universal coverage directly by government was not an essential element says Health & Human Services. Of course it was. The program is in retreat and the only way the Democrats can get passage of any kind is to re-craft a toothless passage and ram it through in a party line vote.

The public is enraged at what the liberals and socialists have tried to foist on them. Worse yet, the administration has submitted to Wall Street and the insurance giants, which they intended to do from before the beginning. Just look at the line up of campaign contributors. The same goes for the euthanasia section. This could well have been a loss leader to get the rest of this monstrosity passed. The exercise will cost the President and Congress dearly as their approval ratings sink to 41% and 12% respectively. November of 2010 will be the time of reckoning.

We remind you that presidents do not make presidential policies. They are made by the bureaucratic types, who receive their marching orders from the Illuminists above them. This is why you had the seamless transition from the neocon administration to the current one now in power. Team A replaced Team B from the Council on Foreign Relations, Trilateralists and Bilderbergers. Nothing really changed. (more…)