A Drop of Rain

Reuters had this article today: Geithner plan will rob American taxpayers: Stiglitz

The U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday.

“The Geithner plan is very badly flawed,” Stiglitz told Reuters in an interview during a Credit Suisse Asian Investment Conference in Hong Kong.

That about says it all, but read the rest if you want the details. Say good bye to the USA you knew, it’s gone now and will never be back.

The only real question is when Obama admits this, and when he starts to take actions that accord with this reality. Using more debt to escape debt is fools game.

Also make sure to read this week’s Full Commanding Denial article by Kunstler.

Everything that we’re doing right now is engineered to avoid reality, to sustain the unsustainable, to recover the unrecoverable, when the mandate of reality compels us to face our losses in order to move on to the next chapter of a collective American life. The next chapter would be a society that runs on a much more local and modest scale, centered on essential activities like growing food, requiring harder physical work, and focused attention — in other words, the opposite of a society lost in abstractions, long-range daisy chains of off-loaded responsibility, and incessant pleasure-seeking.

Excellent in-depth interview with Matt Simmons (43 minutes, flash video). That is on the oil drum, the actual Reality Check page requires some viewer or other.

This is one of the most comprehensive overviews of the entire oil production and peaking process I have ever heard, and Matt Simmons speaks extremely clearly, without the aid of the somewhat annoying powerpoint presentations he tends to favor.

This is a one on one interview that covers his writings and analysis over the past 16 years. As he says: what has amazed him most is just how wrong the mainstream views have been, and continue to be.

This guy knows what he’s talking about, with one glaring exception: his belief that the global economy can function when it’s paying producers more than 100 or so a barrel.
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I’m not going to quote this article, it’s too in-depth to really paraphrase, just read it: The Rolling Stone – The Big Takeover. It’s nice to see the Rolling Stone return to some top quality journalism. Hopefully investigative journalism isn’t something only practiced after the fact now though..

The global economic crisis isn’t about money – it’s about power. How Wall Street insiders are using the bailout to stage a revolution

This is, in my opinion, almost certainly true. This is why you have high tax rates, by the way, it’s the only real way to stop these criminals from accumulating too much wealth, which then becomes power, which is then used to create new conditions to accumulate even more wealth, forming a cycle that can end only in full economic collapse, since greed knows no bounds, and will never restrain itself.

There’s a reason greed is one of the 7 cardinal sins.

And high tax rates do not mean 40%, they mean 90%. This is why, for example, Russia imposed very high oil tax rates on the oligarch’s oil companies as well, to stop the theft via overproduction of Russia’s finite resources. The sooner we begin to view these Wall Street parasites as oligarchs and non-productive, destructive, in fact, members of socieity, the sooner we will be able to restore some part of our failing system.

But one thing you can rest absolutely assured of: it will never be the same.

Also be sure to read The Asia Times recent article on AIG and the collapsing US economy and political system. I’m getting to like the Asia Times more and more, they have a distinctly cutting and non-corporate view that is absolutely refreshing nowadays.

Here’s one from www.worldenergy.tv, a 30+ minute talk by Matt Simmons, G’day America in Australia recently.

I think this one is worth watching in its entirety to get a sense of where we are, the economic situation, his view on the prices now, infrastructure, etc.

He’s probably missing a few things I suspect, especially with regards to the role of speculators and price, but his overall points don’t really depend on each specific being totally correct, so I don’t see that as much of a problem, the facts are there.

Pay special attention the US and European natural gas production information, that is something many people are not willing to even face up to, for obvious reasons, there are simply no replacements out there.

I’d embed the video, but I’m not sure about that site’s policies about embedding so just click the link above to see it.

Well, you may have heard the recent hubbub between Jon Stewart and CNBC analyst Cramer, Stewart rips into Cramer, after having ripped CNBC earlier re Santeli’s nonsense but March 12, Cramer actually came on to the Stewart show for an in-depth interview.

Any question about how good Stewart is should be removed immediately from your mind. These 3 are the entire interview:

Part 1:

The next two are under the fold, check them out, I have to say, I really have to respect Cramer here a little bit, although everything Stewart says is true, but Cramer comes out and calls a lot of big people ‘liars’. If only more core people would start coming out like this, even though it’s too little too late, but at least maybe we can start getting criminal fraud and racketeering convictions going against these self-entitled rich brats who have brought the global economy to its knees… which was going to happen anyway, but still…
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You have to watch this speech by Vladimir Putin at Davos recently, it was the introduction, and he totally rips into the assembled group for their grotesquely irresponsible financial mismanagement, pointing out such gems as: the losses from the biggest financial entities now total more than their profits for the last 25 years.

But watch it yourself, and ask yourself, ok, why don’t I hear our politicians talking like this? (Youtube page, or, read a WSJ transcript)

Also, make sure to watch the latest interview with Dmitri Orlov, who seems to be getting a bit more serious as things get… well, a bit more serious. That’s an unusually intelligent interviewer asking reasonable questions, not at all your typical talking head. Word is definitely getting out.

I think there is something seriously wrong in Oz just about now, and it’s not looking like it’s getting better, and it won’t get better until the banking lobbies are stripped of their powers. I mean, let’s get real, they have no power beyond the tax payer funded support and bailouts, so let’s stop pretending, the game is over, and there isn’t an extra chair for them to sit down at.

The age of entitlement needs to come to an end, it was fun, now it’s time to get to work again.

I liked parts of this recent blog posting by John Michael Greer, I think he really helps explain this situation as it’s unfolding, without the massive self-delusion that seems to fill most other people who are currently in power.

We are thus entering a period of prolonged economic contraction – not a recession, or even a depression, but a change in the fundamental dynamic of the economy. Over the centuries just past, a rising tide of economic growth was interrupted by occasional periods of contraction; over the centuries ahead, the long decline of the industrial economy will doubtless be interrupted by occasional periods of relative prosperity. Just as a rising tide lifts all boats, a falling tide lowers them all, and if the tide goes out far enough, a great many boats will end up high and dry.

The desperate attempt by full-time and part-time members of the rentier class to avoid dealing with this unwelcome reality has had the ironic result of making the situation much worse than it had to be. As actual investments in productive economic activities stopped yielding a noticeable profit, more and more investors sought to make money via a menagerie of exotic financial livestock notable for their complete disconnection from the economy of goods and services. The result was a series of classic speculative bubbles, culminating in the crash of 2008 and the crisis still unfolding around us. In the process, eager investors who might have lost their money slowly over a period of years have, instead, lost it all at once.

Continued under the fold
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This one is almost painful to post. These numbers are so utterly stark, so massively clear, and so utterly dismal, that it’s almost impossible to understand how the idiots running the US financial system, from top to bottom, could ever have led themselves to believe that things could end other than disastrously.

And this is why you don’t let zealots and extremists, aka: Free Market libertarian nutcases, neoconservatives, etc, into the halls of finance or power. They simply cannot even see reality, let alone understand it.

But first let’s take a look at what
Ambrose Evans-Pritchard at Telegraph.co.uk is saying today:

Stephen Lewis, from Monument Securities, says we have been lulled into a false sense of security by the lack of “soup kitchens”. The visual cues from Steinbeck’s America are missing. “The temptation for investors is to see this as just another recession, over by the end of the year. But this is not a normal cycle. It is a cataclysmic structural breakdown,” he said.
We need shock and awe policies to halt depression

No, even if you subtract a bit of exaggeration, this situation is looking downright frightening right about now.

But let’s take a look at what Doug Noland over at prudentbear.com is saying this week about our credit bubble (quote under the fold), you know, the one that ‘nobody could have predicted would deflate’. I mean, look, let’s be brutally honest. If you can’t predict a credit bubble must deflate, then you have no business working in finance, politics, or any other position of power or authority.
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