Well the Commission’s ‘tough talking’ to the Bond holders didn’t last long did it? Yesterday they were trying to sound like Clint Eastwood, “Do you feel lucky punk? Well do ya?” Today all that was corrected by Olli Rehn, Commissioner for Economic and Monetary Affairs, or I prefer to call him, Commissioner for Treason and Grovelling, who got right back to the more normal and scripted, whining like a whipped cur.
“Oh, did someone say the bond holder’s might have to pay? What we meant to say was that we would increase the European Bank Bail-Out Fund (The EFSF – European Financial Stability Fund) and increase the sorts of soiled paper it buys. So those bonds we mentioned yesterday, well, don’t worry about them, the EFSF will buy them all from you long before they lose any money.
And as if by magic the stock prices of all the European banks which collapsed up yesterday, all rallied by 4% and more today.
It fills me with the urge to defecate.
Hi Golem. I got your book and am reading it at great speed. I am going to buy a copy for my right wing friend who thinks all is now fine and dandy.
I have a question for you. How long do you think this can go on for?
I mean do you think that nations will keep on shafting their populations indefinitely. It seems to me like we are in a big game of dare – nations talk a bit tough then fall right in line with what the bankers want. Do you think this can go on for years?
An ever deepening depression for ordinary people and faux growth and market ''recovery'' for the few that could last and last? Or do you think that sooner or later some country will default? And then I suppose it will be round two for the banks?
THAT is teh Trillion dollar question.
Personally I think it can go on for another year or so but every month that passes the chances of someone or somthing falling over increases. Sooner or later some nation is going to blow a fuse, people are going to have had enough and kaboom.
I have never thought the hide and pretend, endless bail out could ever be a proper solution. I have always thought it was half 'Let's just play for time in the hope a miracle happens' and half "let's just bloat ourselves like th leaches swe are for as long as the we can and then leave for pastures greener."
It's what I wrote about in the peice on the toxic debt wasteland.
I'm gutted I didn't post my epic on my proposal to flying to the moon in the summer now. That was a croc of it too.
Anybody read about DarkLord Jones? You can HERE. Apparently because we didn't 'praise' the bankers enough they have gone into a sulk and said they'll take massive bonuses, which I'm sure will be in ca$h.
Don't get me wrong I still loath 1984book. Nicely explained HERE. But lets be honest, I'm sure there's a folder on a server with the name Golem XIV and sub folders…
But like Mr Z said, maybe we should whole heartedly embrace the face:)book, it makes me queasy saying that but a global conversation that really is just a click away from people who just haven't thought of it because their busy looking at the shiney shiney could be useful.
Do you guys/gals/royalty think similar? It is cosy here mind, like the safehouse in the game Resident Evil, all calm (mostly) away from the zombies outside. You still know they are there but you have time to pause and reflect. "Should I take the pitchfork or the rope?". Both are good selections.
The poster formally named dope had a good poke with the stick about future reality without leverage. It would make my day if some of you lurkers or posters would share your imaginings for G/us about a change of living. Seeing as 2011 just maybe the year of the default and all that. And if we're really lucky, Reset.
…When I say imaginings I mean from anybody. Upies, downies, lefties, righties, even benankies. The stick 'Post a Comment' is there for poking.
Just for fun like.
Hi 24K
Goldman Sachs is creating a new bubble out of Facebook after investing about $500 million in it. They are doing exactly the same as happened with the dot-com bubble, applying ludicrously high valuations on a company that has uncertain revenue streams. There's plenty of vitriol about it HERE.
In all my years of judging
I have never heard before
Of someone more deserving
Of the full penalty of law.
Crikey Golem – that Toxic Debt Wasteland piece will keep me awake tonight! Brilliant stuff but very scary,
The other possibility is that there are no pastures new. That capitalism is in such a deep crisis that before anywhere can become the new go to place for the elites with their swag, the whole thing collapses. I read a while ago now an IMF report that said that global youth unemployment was an emergency.
Look at the riots in Algiers and Tunisia (long thought a safe place to invest and a provider of cheap labour) – a lot of analysis says that it is the economic situation and lack of work for young men that has been the real catalyst.
What really frightened me about that post was when you said you weren't sure they need us now. The other day a woman said the exact same thing to me – her response though was to take the cuts and everything else they throw at us because we should be grateful for them, as we are not needed anymore.
I also think that you are right and we will see, sooner or later some country say no. Then of course we will see what the response is and what happens to the banking system then. It kind of stresses me out. It's a bit like being tied down on the train tracks and knowing a train is coming sooner or later – you can't get out of the way and you have no clue as to when it might arrive. But I agree that sooner or later something has got to give.
The wonderful thing about the Facebook/Goldman Ponzi is that the way it's structured, so that individuals don't actually buy the FB stock themselves, allows them to bypass laws meant to regulate this kind of swindle. And rather than point out that this kind of stuff is problematic at best, the financial pages sing the praises of Goldman's creativity. Oh to be a narcissistic sociopath!
Anyone see this crybaby in the Telegraph recently?
Poor dears weren't given a cookie & patted on the back for wearing a hairshirt last year, so they're taking their ball, er, huge piles of unearned cash, with them & going home. This Lord Jones reminds me of that Exxon chairman from a few years ago, the very personification of Jabba the Hutt.
24K — my wish for the future I'm afraid is not a kind one for the Fortune 500, and reveals my politics to be at the extreme left end of the dial. If I were in charge these 500 would be rounded up at dawn, their assets stripped & handed to those who actually need them, and then they'd rot in prison for life. Even if they haven't technically committed a crime. Being obscenely wealthy is its own crime, in my world.
In the meantime, I'll have to settle for cheering on the Greeks, hoping their levels of civil unrest rise to frightening proportions (frightening only for those at the top, mind.)
And then there's this.
I imagine many of you have seen this already. If not, it's a good, if nauseating, read.
For me the important lesson to be drawn from this Atlantic story is how completely & utterly impotent national governments are in attempting to deal (if they even are in any constructive way) with the crisis & our economic future. When a few large corporations brag about subtracting one American from the middle class in exchange for lifting 3 Asians into it, it becomes apparent how little governments can actually do about this. And that's a frightening realization indeed.
Hi dah_sab
When it comes to complaining about the antics of the super-wealthy it is extremely difficult to get one's message across without looking mean-spirited. Just like the 'race' card stifles intelligent debates about immigration, so too does the 'jealousy' card shut down meaningful arguments about the top percentile.
I have great respect for many hard-working, self-made millionaires (Carnegie, Chrysler, Randolph Hurst, etc) who make significant contributions to society. They are to be applauded, set a good example for others to emulate and, perhaps, define the original concept of the 'American Dream'.
Then there are the vampire squids, who suck the life out of everything they touch. We might fear them, but we certainly don't respect them. Defence against the harm they cause can only grow stronger – it always does against tyrants. All tyrants end up living in fear of their safety, and the more they own the more they are responsible for, making true happiness very elusive and stress levels persistently high.
Michael Gates Gill points the way to true happiness HERE.
Golem wrote on Dec. 16th:
As I have written before, Unicredit owns Bank Austria which has the largest western banking presence in Eastern Europe. I wondered in Dominoes falling from the East if UniCredit might not be about to receive a train load of debts from Bank Austria, as well as from its US investment companies – Pioneer Global Asset Management, Pioneer Alternative Investment and Vanderbilt Capital Advisers.
http://golemxiv-credo.blogspot.com/2010/12/unicredit-another-lehman-brothers.html
Bloomberg posted this headline last night:
Austria Pays Premium to France on 4 Billion-Euro Bond
By Ben Martin and Boris Groendahl – Jan 12, 2011 9:28 PM GMT+0100
…The extra yield investors demand for holding Austrian instead of German bonds is still the highest among the five top- rated non-German issuers in the euro zone. That spread started to widen two years ago amid lingering concern that Austrian banks’ investments in eastern Europe may go bad and require massive state bank bailouts.
Erste Group Bank AG, [B]UniCredit Bank Austria AG[/B] and Raiffeisen Bank International AG expanded for two decades in the Austro-Hungarian empire’s former hinterland, buying local banks in nations including Ukraine, Romania and Croatia. They have the most outstanding loans in eastern Europe as a percentage of national output among all of Europe.
http://www.bloomberg.com/news/2011-01-12/austria-faces-highest-borrowing-cost-of-top-ranked-euro-nations.html
All eyes are now fixed on Italy's debt sale. Lets see what happens next…
Regards,
http://whistleblowerirl.blogspot.com/
Otherwise known as UniCredit Ireland's EX Risk Manager
For the latest on UniCredit Ireland, please see:
http://www.thepost.ie/themarket/new-probe-into-liquidity-breaches-53862.html
http://www.villagemagazine.ie/index.php/2010/12/still-waiting-for-the-truth-from-the-regulator/
Germany & France are not happy with the latest proposals by Olli Rehn, the Commissioner for Treason and Grovelling – as Golem aptly calls him. The picture says it all:
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8255991/France-and-Germany-veto-increase-in-EU-rescue-fund.html
Talking of riots, Bangladeshians weren't happy when their stock markets plunged nearly 10%. If only you could get RT on the telly.
I suppose the CIA have folders on everybody now and don't care if :)book fades away. Would be nice if the same info was everywhere though.
dah_sab I agree with the stripping but not the jail time. I would prefer to give them a hug and get them doing community service to really see the other side. You don't want them coming out of jail with more criminal knowledge unlike Eric Illsley who can rot as he should have known better.
When the exponential forces rip it apart what then? More of the same? Precious metals? Mad Max? All of the above? I'd love to see an Artisan world. Rebecca would have thousands of great christmas present opportunities then 😉
@dah_sab, that was a really interesting link to TheAtlantic piece. Thanks also to Golem for penning this blog (and I hope all is well on the home front). It is truly frightening what seems to be happening in reality (and all the facts are there to see) but the utter lack of MSM debate (surprisingly the Telegraph has some good 'out of the box thinking on the economy).
Look forward to much more commentary.
richGB
reggie midlleton has also been taking apart the face book goldman deal, i get the impression that he thinks it's a very nasty con
Whistleblower IRL — keep up the good work!
RichGB — Building up a great & profitable enterprise is laudable, but at some point the entrepreneur must recognize that the continuing flow of cash coming his way is created mostly by his workers.
Being the entrepreneur should not give him dictatorial rights over his workers in perpetuity, even if speaking against that is often considered heresy.
Exec pay should be limited to some smallish multiple of the lowest paid worker, or else the company just becomes another tool of the aristocracy. A meritocratic society is what we should be working toward, not a self-perpetuating oligarchy. That's why we should have heavy inheritance taxes & heavy FIRE taxes. Those types of "income" are also simply tools used to perpetuate the aristocracy.
24K — I meant jail time for all time. No hugs for those who have ruined the lives of countless millions, and indirectly killed many others. I'm a bit of a hard lefty, and so naturally unforgiving of obscene concentrations of wealth, no matter their origin. A lopsided society quickly devolves into tyranny.
I no longer know why I've gone on so long so tangentially.
HAHA, sweet! A zoo is also a possibility.
Please Do Not Feed The Greedy.
Hi Richard in Norway
That is an excellent analysis by Reggie Middleton. Thanks for that.
HERE is a convenient link for everybody.
Hi 24k,
I guess you know I would like to see any global 'reset' result in more smaller local producers, more artisan businesses, more co-operatives and a globally agreed base level of workers rights, where people working on shop/factory floors could earn a living wage in a timeframe that stills allows them to parent their own children/have a life outside of work/move on in their education. I don't actually understand how imposing this would subvert capitalism, or lead to any kind of 'inefficiencies'. But while I could go on a about this subject indefinitely I really wanted to use this space to ask about 'positive money'. It comes up alot in discussions about possible resets. I understand the concept but I'm not sure I understand how it would actually work at the macro/state level.
Also wouldn't a switch to that kind of money really result in a sort of solidification (I'm sure there is a better word but anyway) of the present wealth distribution. Would it make it ten times harder for small businesses to get loans at reasonable rates.
You see on the one hand I think the idea is popular because of Zeitgiest but while I enjoyed that programme as a sort of provocative conversation starter, I definitely know the research in religious part was sketchy at best, so I am wary of taking the financial history part at face value also.
Then there is the fact that positive money is championed by people like Ron Paul, who in all other respects fits my idea of a loon. (a qualified doctor who doesn't beleive in evolution)
Anyway does anyone know of any good sites where positive money is explained in a readable way? All I have found so far are very academic papers written on it and then sites promoting the idea while failing to give any real detail on what it would mean to implement it.
Also. are we going to have a reset at all? I read somewhere that China is prepared to put its full weight behind the Euro. (what the hell did Eurocrats promise them? Although personally I'd rather they made promises to China than the Arabs)
So could that mean that the Euro is going to be saved at all costs, even if that means in effect selling off their grandchildrens future?
In trying to better understand money I have found Richard Douthwaite's, The Ecology of money to be an invaluable and readable primer
http://www.feasta.org/documents/moneyecology/contents.htm
Explains different scenarios commercially produced money, private & government created money and discusses the intriguing idea of multiple currencies working in parallel within an economy, e.g.: local; regional; national; and a separate international currency with drawing rights based on resources, emissions and population base.
Related to the monetary reform topic: In Germany (and I believe other countries), there is a growing movement for a universal citizen unconditional basic income http://www.grundeinkommen.info/ in the UK http://www.citizensincome.org/index.html
Any thoughts?
ahimsa,
I think there is a lot to be said for the universal citizen income. It has been advocated by the Green Party here for a long while.
It cuts right across amost all of the way we currently run things so people have a hard time with it. But I think it is the core of a good idea.
Hi Rebecca,
On the subject of "Positive money", I get the impression not all monetary reformed money is made equal.
For one readable explanation of a UK proposal, I think http://www.positivemoney.org.uk does a good job. Sure they are promoting it, at least they get into some detail, especially with their submission to the Independent Comission on Banking – http://www.positivemoney.org.uk/wp-content/uploads/2010/11/NEF-Southampton-Positive-Money-ICB-Submission.pdf
Another readable explanation, from stateside, is by the American Monetary Institute:
http://www.monetary.org/32pageexplanation.pdf
http://www.monetary.org/houseoflordstalk.pdf
I particularly like their historical narrative crediting Aristotle with recognising that “Money exists not by nature but by law.”, demonstrating the success of government issued fiat currencies in the past and arguing persuasively that advanced money systems are an abstract social power based in law and counter to the claims of Ron Paul, Max Keiser, et al in the goldbug element, money need NOT be gold based.
How the above organisations' proposals play out in a larger international scene monetary scene and whether it somehow consolidates the prevailing status quo of inequitable distribution of wealth I am still unclear.
And as a reader of this blog I immediately wonder how exactly the above proposals prevent the bankers from continuing to leverage and create their own currency a la securitization (http://golemxiv-credo.blogspot.com/2010/08/securitization-ruptured-heart-of-shadow.html)
Hi David,
The above post didn't go through with the others.
I was trying to connect the idea of the universal citizen income with monetary reform.
I know we normally we balk at the thought of governments printing their own money. Voices start screaming, are they nuts? Here comes currency devaluation, inflation & increased national debt. However, as I understand it, with real monetary reform, if the money is debt free(national debt does not increase) and they print moderate amounts(no more inflation than normal – to date banks contributed to inflation through debt based fractional reserve money and other leveraging practices), and if directed on public service initatives(not bailing out banks), then much of the money returns to the exchequer via taxation while communal wealth is accrued instead of short term speculative investments.
Have I been hopelessly hoodwinked by the monetary reform mob?
The only oversight I feel they make is that ultimately international currencies must be based on energy & other resources, a la Richard Douthwaite's proposal.
Thanks for those links Ahimsa, the positive money system paper was very interesting especially as they went into how money supply would be controlled etc. Its funny because I 'd say there's a fair few people out there who think the state/monetary system does work in that common sense way NOW. Little do they know.
I am so glad these conversations are at least taking place in England because you still have a greater degree of control over your finances than any other 'citizen' of Europe.
Also the basic universal income was very interesting too. Now if we could just get China and India to join in with that notion there might be some hope for the future. (On the basis that Africa and SA would follow suit). I am also presuming that there would be some mechanism of linking the income to some sort of reformed Consumer Price Index.