First- I wish Glenn would pick up on this and run with it.

Nice ticker, Thanks Karl...

KD, I just had a thought, (no jokes please), answer this what if the Fed starts monetizing the debt they already monetized?. You mentioned they bought 2009's so I thought, wait a minute, didn't they already do that. Trying to keep a lid on short rates would require 2 or 3 x available "buys" wouldn't it. OMG, this could blow the lid off this whole BB QE scheme.

I wonder if Mr. Ponzi ever realized he would be such an inspiration to others!

Quote:

This is MATHEMATICS, not Politics or "economic theory", a so-called profession that CONTINUALLY refuses to recognize basic, fundamental mathematical principles in its so-called "pronouncements" and "analysis."

Incomplete sentence? (Conclusion about the "profession" seems to be missing.)

Many people probably know this already, but another person giving early warning was Brooksley Born.

Born was appointed a member of the CFTC, on April 15, 1994, by President Bill Clinton. While on the commission and after becoming its chair two years later, Born sought comments on the need to regulate derivatives, specifically swaps that are traded at no central exchange, known as the dark market, and thus have no transparency except to the two counter-parties (no actual regulatory scheme was proposed at the time).... The request for comments was opposed by Federal Reserve chairman Alan Greenspan and Treasury Secretaries Robert Rubin and Lawrence Summers. Specifically, on May 7, 1998, former SEC Chairman Arthur Levitt joined the other members of the President’s Working Group – Treasury Secretary Rubin and Federal Reserve Board Chairman Greenspan – in objecting to the issuance of the CFTC’s concept release, in which Born attempted to shed light on the dark market, citing grave concerns about the possible consequences of the CFTC’s action.

* http://en.wikipedia.org/wiki/Brooksley_B....
* http://www.washingtonpost.com/wp-dyn/con....

Those Bloomberg graphs are pretty damning evidence. Whether you call the PPT or not, it is happening.

Damn this sucks. If they could keep it up for decades how hard can it be to keep it going a few more years. We are going to get bet out on the turn; what if the river card doesn't come out for years.

http://www.wegelin.ch/download/medien/pr....

The Wegelin paper makes a similar point,the whole thing is worth reading, here's a related excerpt:

The sensibilities of their own capital market: this
is what the smart guys in the IRS have very
probably failed to take into account. Their onesided
regulatory proposals, focused on maximizing
the tax take, are based on the entirely unproblematic
and undisputed attractiveness of the USA
as a place of investment for investors from all
over the world. We believe this assumption to be
utterly wrong. Why?
A glance at the USA’s debt situation suffices to
show that apart from oil, there is really only one
element of strategic importance that the USA will
need in the coming years: capital. The (declared)
public debt – national, state and community –
amounted to some 70 percent of GDP in 2008.
With the absorption of further debt in the wake of
the financial crisis, by 2014 the level of explicit
debt is likely to be significantly above 100 percent
of GDP. By then the interest will have doubled
from around 10 percent of total public revenue to
around 20 percent, on moderate assumptions.
This is generally well known. What is generally
less well known is that in the USA too, as in so
many ailing European states, this explicit perspective
reveals less than half the truth about what has
been implicitly promised by the state in the way
of future benefits. Correctly accounted – that is,
as probable future payment flows discounted to
present values – the picture would look a good
deal bleaker. There are studies, such as the one
by the Frankfurt Institute in November 2008, that
reckon with a total level of debt for the USA of
up to 600 percent (!) of GDP.

That is probably the best ticker you ever wrote, and you wrote some great ones!!! You need to bookmark it, so we can find it easily and give to people to read. For all of you who gave up because people are not listening, remember like many things, this is a snowball effect, and grows exponentially.

Ben is trying to turn all the bs inflationary cash created over the past 17 years into something that will spur real GDP in the hopes that this new economic activity will inflate the system and turn the debt into something more manageable. First it was tech, then housing and now what? I'm with KD and think he will fail but I don't think the reality has hit D.C. just yet.

You can actually see the bubbles being blown, from one chart to the next...

from chart 1 (to 1960) -2 (to 1970) the business and mortgage lines inflate.
from chart 2-3 (to 1980) the business, mortgage, and financial lines inflate.
from chart 3-4 (to 1990) the financial and federal lines inflates; business stalls out.
from chart 4-5 (to 2000) financial, business, and mortgage lines inflates; federal stalls out.
from chart 5-6 (to present) federal line inflates; business and mortgage and financial all stall out.

The only plan if their bottom line is to avoid a debt reset is to somehow make up for the three other top debt sectors using federal debt alone, and whatever can be squeezed out of consumers and state/local governments.

I wonder if anything would jump out if you used the consumer and state/local gov debt lines as a baseline?

Never
Ponzi will continue, that is the only way u.s economy will go forward.
Two ticker today looking for accountblity, in your dreams not here
BTW: like the charts es and dxy great corrolation and timing of it.

Did you hear your messiah today?
He was preaching doom and gloom little over 7 months ago, now he is all giddy
His mentor for coming out and pumping forgot to tell him some results are required along with pumping

Rising... "Damn this sucks. If they could keep it up for decades how hard can it be to keep it going a few more years. We are going to get bet out on the turn; what if the river card doesn't come out for years."

I'm guessing that's Ben's and TurboTax Timmy's (as well as Barack Ostumble's) hope - that they can kick the can down the road so it all comes unglued on the next guy.

Hey - worked for George W, no?

Don't think it can, but this market has, if nothing else, proven the "Markets can stay irrational longer than you can stay solvent" maxim to a "T".

Really good book, worth reading especially given Karl's ticker.

Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies (Hardcover)


http://www.amazon.com/Culture-Corruption-Cheats-Crooks-Cronies/dp/1596981091/ref=pd_ts_b_30?ie=UTF8&s=books

Quote:

Economists everywhere have lauded these "innovations" - almost to an individual. They have all bought into and drunk the Kool-Aid without one instant of reflection upon these curves....

Little surprise. My experience with Econ courses taught within institutions of 'higher learning' has been that the math prerequisites pretty much didn't get far beyond Calculus 101 for Dummies.

Econ PhD's were looked upon by real science hard-math types as little more than glorified philosophy majors. They conjectured these guys were relatively dumber than a box of rusty hammers.

....................

"Excuse me, Mr. Greenspan? Is the Fed guilty of irrational exuberance?"........

if the fed succesfully transfers the agency risk to the treasury then it will allow the fed to grow their balance sheet even more. whether it's the fed or treasury the risk is still there so isn't it just semantics at this point? will it not be similar to the fed transferring maiden lane to treasury?

they can continue to exponentially grow their balance sheet effectively running this market up for a few more years to come. or at least until Obama gets re-elected. i'm not disagreeing with you Gen but at the same time these games take a long time to play out.

the old saying, "Don't fight the Fed," sure has new meaning.

So the last bubble to be blown is the Fed bubble?

Why are the Masters doing this you ask? They know every bit as much as we do, perhaps more. Most of them are very good at math. The reason they are trying to reinflate popped balloons is that allowing the debt to default would severely harm both their wealthy friends, the source of their power, but it would also expose a lot things best left hidden, including their decisions that led to the debt bubble in the first place. Because allowing a full-on debt implosion would make the recession even worse, enraging the public because they said it wouldn't happen, we should expect them to do everything imaginable to prevent it. And yes, Marshall law is not outside the range of possibilities.

The pioneers of Ponzi finance? Fiat currency. Social Security. Medicare.

The problem with Ponzi schemes is that they are dependent on confidence, and confidence in the medium run is undermined by the very nature of Ponzi schemes.

Yes we can!

Steel,

Why do you believe we started down this road long ago? Wealth creation for elites and/or other reasons? What things should best be left hidden?

Would you elaborate.

Quote:

The pioneers of Ponzi finance? Fiat currency. Social Security. Medicare.

The problem with Ponzi schemes is that they are dependent on confidence, and confidence in the medium run is undermined by the very nature of Ponzi schemes.

Yes we can!

Confidence is being eroded away as we speak. This could explain all the blatant lying from Ben Bernanke, and the increased air time the president is speaking to try to instill confidence.

The dollar is an easy indicator of the confidence level (its not looking good). I would give in 1 to 2 years max until the system falls apart. The events that are unfolding will have to come to a conclusion soon (USD decline, government debt bubble, etc.).

Clearest presentation to date of what went wrong and when. Excellent. Thanks, Karl.

KD or anyone

Not that long ago the President spoke before Congress and promised a Regulatory overhaul. Now I haven't seen anything in the news about this in some time. I am worried because its being drafted by those who head large hedge funds and should only be observing this process.

Can anyone find an update on the status of this?