Tag: Bloomberg

Bubbleberg News LP: Why We Are Plagued With Drivel Masquerading As Financial Reporting

Guest Post by David Stockman

One of the evils of massive over-financialization is that it enables Wall Street to scalp vast “rents” from the Main Street economy. These zero sum extractions not only bloat the paper wealth of the 1% but also fund a parasitic bubble finance infrastructure that would largely not exist in a world of free market finance and honest money.

The infrastructure of bubble finance can be likened to the illegal drug cartels. In that dystopic world, the immense revenue “surplus” from the 1000-fold elevation of drug prices owing to government enforced scarcity finances a giant but uneconomic apparatus of sourcing, transportation, wholesaling, distribution, corruption, coercion, murder and mayhem that would not even exist in a free market. The latter would only need LTL trucking lines and $900 vending machines.

In this context, the sprawling empire known as Bloomberg LP is the Juarez Cartel of bubble finance. Its lucrative 320,000 terminals and profit-rich $10 billion in revenue are not purely a testament to the extraordinary inventive genius of Michael Bloomberg The Younger. In fact, Bloomberg’s 1981 invention owed a huge debt of gratitude to Richard Nixon and Milton Friedman. It was they who destroyed the Bretton Woods regime of anchored money and global financial discipline that made “Bloombergs” necessary.

Let me explain. Under the fixed exchange rate regime of Bretton Woods—ironically, designed mostly by J.M. Keynes himself with help from Comrade Harry Dexter White—there was no $4 trillion daily currency futures and options market; no interest rate swap monster with $500 trillion outstanding and counting; no gamblers den called the SPX futures pit and all its variants, imitators, derivatives and mutations; no ETF casino for the plodders or multi-trillion market in “bespoke” (OTC) derivatives for the fast money insiders. Indeed, prior to Friedman’s victory for floating central bank money at Camp David in August 1971 there were not even any cash settled equity options at all.

The world of fixed exchange rates between national monies ultimately anchored by the solemn obligation of the US government to redeem dollars for gold at $35 per ounce was happily Bloomberg-free for reasons that are obvious—albeit long forgotten. Importers and exporters did not need currency hedges because the exchange rates never changed. Interest rate swaps did not exist because the Fed did not micro-manage the yield curve. Consequently, there were no central bank generated inefficiencies and anomalies for dealers to arbitrage. Stated differently, interest rate swaps are “sold” not bought, and no dealers were selling.

There were also natural two-way markets in equities and bonds because the (peacetime) Fed did not peg money market rates or interpose puts, props and bailouts under the price of capital securities. This means that returns to carry trades and high-churn speculation were vastly lower than under the current regime of monetary central planning. Financial gamblers could not buy cheap S&P puts to hedge long positions in mo-mo trades, for example, meaning that free market profits from speculative trading (i.e. hedge funds) would have been meager. Indeed, the profit from “trading the dips” is a gift of the Fed because the underlying chart pattern—mild periodic undulations rising from the lower left to the upper right–is an artifice of central bank bubble finance.

And, in fact, so are all the other distincitive features of the modern equity gambling halls—index baskets, cash-settled options, ETFs, OTCs, HFTs. None of these arose from the free market; they were enabled by central bank promotion of one-way markets—that is, the Greenspan/Bernanke/Yellen “put”. The latter, in turn, is a product of the hoary doctrine called “wealth effects” which would have been laughed out of court by officials like William McChesney Martin who operated in the old world of sound money.

In short, Wall Street’s triumphalist doctrine—claiming that massive financialization of the economy is a product of market innovation and technological advance—is dead wrong. We need “bloombergs” not owing to the good fortune of high speed computers and Blythe Master’s knack for financial engineering; we are stuck with them owing to the bad fortune that Nixon and then the rest of the world adopted Milton Friedman’s flawed recipe for monetary central planning.

fin profits chart

Needless to say, the parabolic rise in financial sector profits from about 1.25% of GDP prior to Camp David to 4.25% of GDP today—call it a round $500 billion per year—is only the tip of the ice-berg. What lies beneath, according to the Commerce Department numbers crunchers, is “value-added” of some $3.75 trillion in the FIRE sector (finance, insurance and real estate), which generates the aforementioned accounting profits and consists primarily of compensation.

Here the uplift is even more dramatic. The FIRE sector’s 800 basis point gain from 14% of GDP in 1970 to 22% at present rounds to about $1.4 trillion. That’s the bloat from financialization—which is to say, the infrastructure of bubble finance. Embedded in that bloat is everything from the running cost of fund-of-funds and family offices (i.e. private chefs, ”investor” conferences at tony resorts etc.) to the vast network of bankers, brokers, appraisers, title insurers, settlement lawyers and escrow agents that tend the home mortgage churning machine.

In the latter case, the untoward impact of financialization on the world of George Bailey’s Savings and Loan can not be gainsaid. Back then, people took out mortgages and paid them off a bit at a time over 30 years owing to the fact that there was no basis for today’s serial “mortgage refi”. On the free market, mortgages would either carry floating rates or have embedded call protection on fixed rates.

Moreover, the basis for today’s serial refi would not exist. Interest rates would have no directional trend in an environment where they represent the market clearing price, balancing the supply of savings and the demand for loanable funds.

By contrast, the artificial downward-sloping trend in mortgage rates in recent decades has been an intentional outcome of the Fed’s interest rate rigging policies designed to goose housing prices and spur homebuilding. During the 55 months that elapsed between Lehman’s failure and April 2013, for instance, the Freddie Mac reference rate for 30-year mortgages dropped almost linearly from 6.5% to 3.3%.

As it happened, this massive inducement to home-borrowing did not generate much lift in the home-building sector because the stock of residential homes is massively over-built from the first housing bubble. But it did generate a substantial “refi” wave owing to the sheer math of mortgage finance. Indeed, Bernanke-Yellen regime have made no bones about their alleged success in driving down the 10-year treasury benchmark rate and thereby reflating the housing market.

In truth, the monetary politburo induced nothing more than another round of mortgage churn among a small sub-set of existing homeowners. There are approximately 115 million households in the US—40 million of which are renters and 25 million own their homes free and clear. Yet even among the 50 million households with mortgages, upwards of 25 million are still under-water or do not have enough positive equity to cover transactions costs and meet today’s more stringent loan-to-value requirements.

So at the end of the day, the refi churn machine has arbitrarily conferred debt service relief on a randomly selected sub-set of perhaps 10-20% of households—many of which have engaged in serial refi for several decades now. This serves no evident principle of public policy based on need or merit. But that doesn’t matter to the monetary central planners. Their only goal is to stimulate GDP as measured by the government stat mills—even if what they are measuring is more bloat from financialization.

In fact, that’s about all the Fed’s housing stimulus is now generating. For nearly 40 years, household mortgage borrowing did stimulate measured GDP. During that span the ratio of debt/wage and salary income was ratched-up by periodic Fed reflations from a pre-1970 level of about 80 percent to a peak of 210% by 2007.

But now that ”peak” debt has been reached and the household leverage ratio has fallen back slightly to about 180%, what the Fed’s ministrations produce is only a tepid amount of GDP from financialization; that is, we get a dollop of GDP from the pointless churning of home mortgages—a financial engineering process that does not create new wealth, but simply siphons existing wealth into activity among loan brokers, appraisers and real estate attorneys that the BEA is pleased to call GDP.

.FIRE economy

Indeed, the elephant in the room lurking behind the rising FIRE line in the graph above is the nation’s current $59 trillion in credit market debt. At 3.5 turns of GDP it represents a vast aberration of bubble finance, and compares to a healthy ratio of 1.5 turns that prevailed for more than a century before 1971.

These two extra turns of combined household, business, finance and government debt are not simply statistical curiosities. It represents $30 trillion of incremental debt that not only weighs heavily on the stagnating incomes of borrowers, but also represents a vast inventory of loans, bonds, hypothecations, re-hypothecations, derivatives and securitizations. It goes without saying that this immense inventory must be constantly tended, serviced, repackaged, extended, pretended and re-sliced and re-diced. Juggling the debt and chasing the “assets” which it funds and hypothecates is what financialization does.

As is well-known, the “Bloombergs” at the center of the bubble finance casino are so immensely profitable that they generate the equivalent of a drug lord’s surplus— which, in turn, funds the extensive apparatus of financial information and news production that comprise the Bloomberg empire. But at the end of the day, Bloomberg News LP is only a vertically integrated representation of the entire infrastructure of bubble finance. Reuters, the Financial Times, CNBC, Dow-Jones/News Corp and Inside Mortgage Finance are all part of the food-chain by which the bloated financial sector maintains and services itself.

It is not surprising, therefore, that the scribes and pundits employed by the bubble infrastructure cannot see beyond it; that CNBC can find an endless supply of fund managers who are buying the dips and following the Fed’s promise to keep interest rates lower longer and stock prices rising higher forever; that a corrupt financial market in which all interest rates are pegged and rigged by the Fed is taken for granted as the natural order of economics; that government borrowing to stimulate and support the economy is viewed as essential regardless of its baleful future consequences; that arbitrary central banking targets like 2% inflation as an instrument of optimum GDP growth or the bogeyman of “deflation” are embraced uncritically as axiomatic; or that economic absurdities such as zero money market interest rates for seven years running are rarely even noted.

In short, the vast infrastructure of bubble finance bends, shapes and curates the daily narrative so thoroughly that the denizens on the stage set do not even notice its vast artificiality. Its just one day at a time, and one more fix by the monetary and fiscal authorities to keep the bubble inflating, or at least stable.

In that context comes the monetary insanity of Abenomics and the economic freak-show of Japan Inc. After 20 years of relentless borrowing and money printing, it teeters on the edge of an economic abyss, shackled with massive public debt, a shrinking/aging population, a rapidly depleting savings pool, comically low interest rates on its public debt and a truly horrid fiscal posture—namely, it will need to borrow 50% of every dime its spends in the year ahead, even with the long-overdue rise of consumption taxes beginning in April.

Into that miasma comes a Bloomberg scribe, Matthew Klein, offering to essay on the upcoming baby-step toward fiscal sanity in Japan. The headline says it all:

Japan Is Taxing Itself Into Trouble

And then there follows more of the mindless narrative:

On April 1, Japan’s national sales tax will rise to 8 percent from 5 percent. Unless wages rise by an equal amount, the effect will be a drop in consumer spending…. Even if this isn’t enough to push the economy into recession, raising the sales tax is a bad move that will undermine Prime Minister Shinzo Abe’s agenda for the world’s third-largest economy….If anything, the government should be cutting taxes now

Young Matthew also notes that the Japanese people have not been astute enough to recognize what Wall Street and London gunslingers intuitively understood. That is, with the BOJ expanding its balance sheet at three times the rate relative to GDP of the Fed’s mad money printing, stock prices would soar and wealth effects would be had by all:

For instance, Japanese have been large net sellers of Japanese stocks ever since the big rally that began in the fall of 2012. Foreign investors have more faith in Abenomics than the people with the most at stake.

Then there is the news that victory over ”deflation” is in sight. Never mind that there has never been any sustained consumer price deflation in Japan, and that the current index of about 99.0 stands almost at the very spot it occupied 21 years ago in March 1993—with only tiny undulations during the intervening years:

A more encouraging bit of news is the rise in consumer prices, excluding food and energy. This measure of inflation has accelerated to 0.7 percent annually — its fastest pace since 1998, although still slower than the official target of 2 percent…..

On the drivel meanders. Nowhere is it noted that Japan’s scheduled consumption tax rise is a bitter, chronically deferred, end-of-the line fiscal necessity; that sustained 2% inflation would destroy its monstrous $10 trillion government bond market; and that Abenomics has already manifestly failed.

By trashing the Yen, Abenomics has imported massive commodity inflation onto an island that has no hydrocarbons, industrial raw materials or even operational nuke plants. Consequently, real wages are falling at an even faster rates than before and the massive debt burdens created by decades of bubble finance push the world’s largest retirement community toward its final demise.

This bit of tommyrot was published under Bloomberg Views—perhaps suggesting that it represents opinion, not hard news. But that’s just the trouble. The vast infrastructure of bubble finance generates an overpowering consensus of opinion that is utterly blind to the very bubble in which it resides.

http://www.bloombergview.com/articles/2014-03-27/japan-is-taxing-itself-into-trouble

WHO ARE THE REAL TRAITORS?

“I’m neither traitor nor hero. I’m an American.” – Edward Snowden

“If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen.”  – Samuel Adams

 

There are weeks that change the course of human history. There are weeks when people must choose sides. There are weeks that expose the real American traitors. There is no middle ground in this debate. You are either on the side of freedom, liberty, truth, transparency and the U.S. Constitution or you are on the side of mindless obedience, oppression, deception, corruption and tyranny. A courageous young Millennial named Edward Snowden has risked his life and his future to expose the illegal, surreptitious surveillance programs being conducted by the United States government in clear violation of the 4th Amendment to the U.S. Constitution. The NSA, with the full knowledge of Barack Obama and Congress, has been covertly collecting phone and internet records on millions of Americans with the full cooperation of Verizon and other mega media/data corporations. Our owners have been using the U.S. Constitution to wipe their asses. The 4th Amendment to the U.S. Constitution is so unambiguous that any intelligent politician, bright journalist or fifth grader in Miss Sabatini’s history class could interpret its meaning and intention. Our founding fathers believed in truth, clarity and simplicity. The traitorous sociopaths in control of our government today believe in obfuscation, ambiguity and complexity.

File:Upstream slide of the PRISM presentation.jpg

Living Constitution?

Do you believe the mass collection of metadata information from millions of Americans with no probable cause is an unreasonable search as defined by the 4th Amendment? Do you believe the complete lockdown of one of the biggest metropolitan areas in the country and the door to door search by heavily armed government security thugs for one wounded teenager, without warrants or probable cause, was a violation of the 4th Amendment? Do you believe secretive governmental agencies have the right to partner with the biggest internet/communications/mass media corporations in the world to record your phone calls, read your emails, and monitor your internet communications under the bogus justification of the War on Terror (you are more likely to be struck by lightning twice than to be killed by a terrorist)?  Do you believe that government agencies tasked with revenue collection can be used to create an enemies list based upon whether you donated to the Ron Paul campaign, believe in liberty, or belong to a Tea Party organization? Do you believe allowing minimum wage government drones to molest little old ladies, paraplegics and three year old children, while conducting full body scans on all airline passengers really makes you safer from phantom terrorists? Do you believe having 30,000 high tech surveillance drones that can see you picking your nose in your driveway from 25,000 feet are not a violation of your privacy rights?

Fourth Amendment to the U.S. Constitution:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

If you answered in the affirmative to any or all of the questions above you are either a government apparatchik, someone dependent upon the surveillance state for your paycheck, a victim of decades of mind control through corporate mass media propaganda, or one of the willfully ignorant masses. Of course the ignorant masses will not be reading these questions as they are focused on the inbred royal family saga, Kim Kardashian’s bastard child pregnancy, and the upcoming episodes of Honey Boo Boo, Teen Mom, I Didn’t Know I Was Pregnant, Duck Dynasty, Real Housewives of Idiocracy or paying $200 on their plastic debt accumulator to watch multi-millionaire freaks of nature play children’s games. Those who argue the U.S. Constitution is a living document open to interpretation by the interchangeable corporate fascist parties that control the reins of power at Versailles on the Potomac are nothing but apologists for the corrupt status quo. The American people are provided the illusion of choice by their owners, but the major policies are kept intact – never ending war, never ending currency debasement, and never ending screwing of the middle class.

The revelations by Millennial martyr, Edward Snowden, about the PRISM program and the fact that the NSA harvests data directly from the servers of Microsoft, Google, Facebook, Apple, Yahoo and other corporate co-conspirators came just days after disclosure that our Orwellian trained keepers had been shredding the 1st Amendment. The Obama administration has continuously flaunted the Bill of Rights when they interfere with their mission to create a centrally planned welfare/warfare state. Republicans don’t resist Obama’s efforts on Constitutional grounds, as they have no love for its constraints either. The seizure of AP reporter phone records in an effort to uncover leaks and to intimidate the free press, monitoring of reporter James Rosen using false information to obtain a warrant, and the computer hacking of lead Benghazi CBS reporter Cheryl Attkisson are clearly violations of the 1st Amendment.

There has been faux outrage among those in the establishment. It’s nothing but a game to entertain their rabid disciples. There is virtually no difference between the pretend parties who alternately operate as figurehead leadership in Washington D.C. Both parties cooperated to crush the peaceable assembly of young people exercising their right to petition the government about the blatant criminality of Wall Street bankers. The supposed Soros inspired OWS movement was subdued by Democratic mayors using their local military police hooligans, supported by the Federal surveillance state, in cooperation with the very same criminal Wall Street banks who had destroyed the worldwide financial system in their ransacking of the nation’s wealth through a well planned and executed control fraud.

The cheerleading of this disgusting display of fascist tactics by Rupert Murdoch’s Fox News and the likes of CNN, MSNBC, and Bloomberg News told me everything I needed to know. Those within the status quo will circle the wagons whenever there is a threat to their wealth, power and control. If you make it onto the establishment’s enemies list, the Constitution will not protect you. The only true free speech is being exercised on the internet, for now. The plutocracy of wealthy corporate elite and their captured puppet politicians are attempting to crush dissent and free speech by restricting access to anti-establishment websites, introducing legislation to control the internet and as we now know hacking into sites considered enemies of the state. The guarantee of 1st Amendment protection has increasingly becoming a quaint old fashion notion in this fascist state.

First Amendment to the U.S. Constitution:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

The Constitution has been increasingly treated as an optional instructional manual by what passes for leadership in this country. An all-out assault has been waged on the 2nd Amendment by the control freaks who want to create a national gun registry so they know where to send their military assault teams when the time comes. Every assault on our liberties, rights and freedoms is done on behalf of the children. Sinclair Lewis once declared:

“When fascism comes to America, it will be wrapped in the flag and carrying a cross.”

He was wrong. Fascism has come to America, wrapped in fiat currency, carrying a child as a prop, in the name of the War on Terrorism. Presidents have been flaunting their disdain for Article One, Section Eight of the Constitution since World War II. The Imperial American Empire has been militarily enforcing its hegemony over the world since the 1950’s without Congress ever declaring war, as required by the Constitution. Iraq, Afghanistan, Libya, and now Syria are just the latest victims of our hypocritical interventionist state. Our predator drones roam the skies above foreign countries murdering suspected bad guys at the whim of PS3 trained gutless techno geeks sipping a decaf on their 9 to 5 shift.  The corrupt spineless swine in Congress expose themselves as nothing more than bought off acolytes of the military industrial complex warned about by Dwight D. Eisenhower in 1961:

“This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.”

The citizens of this country have failed to heed his warning. We have not been alert and to describe the narcissistic, delusional, math challenged, willfully ignorant sheep, bleating for their safety and security as knowledgeable is beyond laughable. Security and liberty have not prospered together. The arms dealers formed an unholy alliance with the Too Big To Trust Wall Street banks, their sugar daddy Federal Reserve, easily bought off feckless political class, and sociopathic government bureaucrats to create this corporate fascist welfare/warfare state that has subverted our liberty while obscenely enriching the .1% who have used their unwarranted influence in a traitorous manner. The disastrous consequences for the world continue to build like the dome of a volcano before it detonates and destroys everything in a fiery swath of lava.

New Boss Same As The Old Boss

“If people can’t trust not only the executive branch, but also don’t trust Congress and don’t trust federal judges to make sure that we’re abiding by the Constitution, due process and rule of law, then we’re going to have some problems here.” – Barack Obama

 

The nattering classes who dominate the boob tube spin the storylines of their corporate clients on a daily basis, but the uncovering of the deceitful activities of the ruling establishment by Edward Snowden have exposed the truth about who runs this country. Republicans, Democrats, neo-cons, ultra-liberals, Fox News, MSNBC, the New York Times, Bloomberg, the Wall Street Journal, military generals, and the government drones who monitor our phone calls, texts, emails and internet postings have all shown their true colors in the last week. They don’t care about truth, justice, or the American people. James Clapper lied during sworn testimony before Congress about spying on millions of Americans because he didn’t think he’d be caught. He was caught red handed. And no one is calling for his apprehension and imprisonment.

We are lied to, misled, misinformed, and inundated with falsehoods and propaganda on a daily basis by our leaders. The proof that we live in a plutocracy dominated by two corrupt political parties (with 250 millionaires in Congress), six Wall Street banks (JP Morgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley), six mass media companies (Comcast, Google, Walt Disney, News Corp., Time Warner, Viacom), seven arm dealers (Lockheed Martin, Boeing, Northrup Grumman, General Dynamics, Raytheon, L-3 Communications, United Technologies), a few politically connected mega-corporations (Exxon, General Electric, Verizon, Microsoft, Wal-Mart, General Motors, Apple, Berkshire Hathaway, IBM), and a few hundred shadowy billionaires is how they have unequivocally declared that Edward Snowden is a filthy high school dropout traitor. He has revealed secrets about how the lords of the manor keep the serfs and peasants under surveillance. Here is a smattering of the vitriol spewed about this American patriot:

“America is now a less safe place. The world is a less safe place because of what Mr. Snowden unilaterally did. He deserves to be prosecuted. I hope they find him in the hole that he’s hiding in in Hong Kong and bring him home and try him.” – Karl Rove

“I hope we follow Mr. Snowden to the ends of the earth to bring him to justice.” – Lindsey Graham

“For this, some, including my colleague John Cassidy, are hailing him as a hero and a whistle-blower. He is neither. He is, rather, a grandiose narcissist who deserves to be in prison.” – Jeffrey Toobin – The New Yorker

“What he did was an act of treason.” – Diane Feinstein

“He’s a traitor.” – John Boehner

“I think he should be prosecuted to the fullest extent of the law. I consider him right now to be a defector.” – Peter King

“There is an obligation both moral, but also legal, I believe, against a reporter disclosing something which would so severely compromise national security.” – Peter King

“I can assure you, this is not about spying on the American people.” – Al Franken

“For me it is literally, not figuratively, literally, gut-wrenching to see this happen, because of the huge, grave damage it does to our intelligence capabilities.” – James Clapper (Perjurer)

“We do not see a tradeoff between security and liberty.” – Keith Alexander – NSA Director

“The national security of the United States has been damaged as a result those leaks. The safety of the American people and the safety of people who reside in allied nations have been put at risk as a result of these leaks.” – Eric Holder

“I think he’s a traitor. I’m suspicious because he went to China. That’s not a place where you would ordinarily want to go if you are interested in freedom, liberty and so forth. It raises questions whether or not he had that kind of connection before he did this.” – Dick Cheney – The Dark Lord

“And I hope that he is prosecuted to the fullest extent of the law.” – Mitch McConnell

“Now you’ve got this 29-year-old high school dropout whistleblower making foreign policy for our country, our security policy. It’s sad, Brian. We’ve made treason cool. Betraying your country is kind of a fashion statement. He wants to be the national security Kim Kardashian. He cites Bradley Manning as a hero. I mean, we need to get very, very serious about treason. And oh by the way, for treason — as in the case of Bradley Manning or Edwards Snowden — you bring back the death penalty.” – Fox and Friends

“Can intelligence operate effectively if every starry-eyed analyst feels entitled to be a self-appointed whistle-blower?” – Gary Rosen – The Wall Street Journal

“Edward Snowden should go to jail, as quickly and for as long as possible.” – John Yoo – The National Review.

“I think on three scores—that is leaking the Patriot Act section 215, FISA 702, and the president’s classified cyber operations’ directive—on the strength of leaking that, yes, that would be a prosecutable offense. I think that he should be prosecuted.” – Nancy Pelosi

“Who is a journalist is a question we need to ask ourselves. Is any blogger out there saying anything – do they deserve First Amendment protection? These are the issues of our times.” – Lindsey Graham

“This lens makes you more likely to share the distinct strands of libertarianism that are blossoming in this fragmenting age: the deep suspicion of authority, the strong belief that hierarchies and organizations are suspect, the fervent devotion to transparency, the assumption that individual preference should be supreme. You’re more likely to donate to the Ron Paul for president campaign, as Snowden did. But Big Brother is not the only danger facing the country. Another is the rising tide of distrust, the corrosive spread of cynicism, the fraying of the social fabric and the rise of people who are so individualistic in their outlook that they have no real understanding of how to knit others together and look after the common good.” – David Brooks

It seems the ruling oligarchs, their mouthpieces in the mainstream media (both conservative & liberal), Machiavellian politicians on both sides of the aisle, unscrupulous military commanders and deceitful government bureaucrats have all rallied to shield their existing perverted surveillance state. These people actually believe that what is best for their own personal interests is best for the citizens of this country. There is only one Party – the Establishment Party. The smear campaign against Edward Snowden began immediately. The vitriolic accusations, venomous scorn, malicious ridicule and pathetic attempts to discredit Edward Snowden for sacrificing everything on behalf of the country he loves has revealed more truth about how the real world operates than the thousands of articles written by supposed “conspiracy theorists” over the last decade. Anyone with their eyes open and mind not controlled by the regime know the real criminals in this tragedy. Leon Trotsky, who also participated in a brutal fascist surveillance state, put it best:

“The real criminals hide under the cloak of the accusers.”

In a country where those in power encourage and participate in the plundering of people’s bank accounts by billionaires, the largest financial control fraud in world history by the biggest Wall Street banks, treating every citizen as a suspect until proven otherwise under the auspices of the ironically named Patriot Act, creating an Orwellian surveillance state of cameras, drones and snitches, torturing suspected enemies, conducting military exercises in the skies above our cities, seizing reporters’ personal records, using government agencies to harass political opponents, listening to our phone calls with warrantless wiretaps, reading our emails and texts, brutally crushing peaceful protests, attempting to disarm us, locking down an entire city and kicking doors down while searching for a hapless wounded teenager, appropriating our DNA, detaining us without charges, assassinating suspected dissidents, regulating what we can eat, drink or smoke, passing 2,500 page corporate lobbyist written bills that no one has read, using laws to enhance the wealth of the .1%, creating a tax code designed to minimize the burden on the .1%, the feeding of economic information by the Fed and Federal government to connected crony banks minutes before the public so they can pre-program their HFT computers to profit at the expense of the muppets, conducting cyber-attacks on sovereign countries and then feigning outrage when the favor is returned, and militarily intervening around the world under the false guise of strategic interests, we are supposed to trust the establishment? As we descend further into tyranny, I don’t know which is sadder – the pure evil of these men or the apathy and complacent acquiescence of the willfully ignorant masses to the methods employed by their owners. The numerous laws passed by those in power are just more proof of how corrupt our society has become.

 “The more corrupt the state, the more numerous the laws.” – Tacitus

The threat of tyranny was still raw in 1975, after the Watergate cover-up, when Senator Frank Church warned about the National Security Agency:

“I know the capacity that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision, so that we never cross over that abyss. That is the abyss from which there is no return.”

Again, we failed to heed his warning. We’ve crossed over the abyss and the vision of our future will be the boot of a DHS thug stomping on the face of an American citizen – forever.

True Ruling Power of Our Country

“When the people fear their government, there is tyranny; when the government fears the people, there is liberty.” – Thomas Jefferson

  

Whenever I would use the term oligarchs, ruling elite, powers that be, owners, .1%, or ruling class, it always sounded too conspiratorial. But after years of reading the writings of Edward Bernays, Aldous Huxley, George Orwell, Ron Paul, George Carlin and a number of other “crazy” bloggers, while witnessing with my own two eyes what is happening in this country, I’ve come to the conclusion that our country is run by an invisible government consisting of a small cadre of rich powerful men who manipulate, obfuscate, eliminate and fabricate in their insatiable greed for glory, riches, power and control. They thought they had perfected the art of propaganda:

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.” – Edward Bernays

The disclosure of the unholy alliance of corporations and the government to secretly spy on millions of Americans, while attempting to intimidate journalists and crush dissent from political opponents, is throwing the master plan of the ruling elite into disarray. The conspiracy of silence and denial is fraying at the edges as the truth continues to leak out:

“The contents of a phone call could be accessed simply based on an analyst deciding that. If the NSA wants to listen to the phone, an analyst’s decision is sufficient, without any other legal authorization required.” – Democratic Rep Jerrold Nadler

There have been a few lone voices in the wilderness warning about the rise of this corporate fascist surveillance one party state, but they have been scorned, ridiculed, marginalized and ignored. It seems the libertarian minded men and women of this country have been right all along.

“We’ve slipped away from a true republic. Now we’re slipping into a fascist system where it’s a combination of government, big business and authoritarian rule, and the suppression of the individual rights of each and every American citizen. When it comes to any significant differences on foreign policy, economic intervention, the Federal Reserve, a strong executive branch, a welfarism mixed with corporatism, both parties are very much alike.  The major arguments in hotly contested presidential races are mostly for public consumption to convince the people they actually have a choice.” – Ron Paul

True liberty minded Americans and those who value freedom and the Constitution have rallied to the defense of a true patriot. “We the People” must reclaim this country from the unelected .1% who has conducted a silent coup while we were pre-occupied with our techno-narcissism and consumed by the urge to consume. We have an omnipotent outlaw government with concentrated overwhelming power. The out of control bureaucracy devouring treasure, the blood of our young, civil rights, and the Constitution will not yield of its own volition. When the government tyrants classify all of us as enemies of the state, it is time to dismantle the state and water the tree of liberty with some blood, if that is what is required.

“Perfect safety is not the purpose of government. What we want from government is to enforce the law to protect our liberties. The government does not need to know more about what we are doing. We need to know more about what the government is doing. We need to turn the cameras on the police and on the government, not the other way around. We should be thankful for writers like Glenn Greenwald, who broke last week’s story, for taking risks to let us know what the government is doing. There are calls for the persecution of Greenwald and the other whistle-blowers and reporters. They should be defended, as their work defends our freedom.” – Ron Paul

The country is being run like a mafia crime family. The Don and his lieutenants operate in secrecy, eliminating their opponents, buying off the press, bribing the police for protection, running the rackets, and collecting their tribute from those that want to do business with them. They go to war against the other families whenever they want to expand their turf. The country has been captured by an organized crime syndicate and it will require an Elliot Ness type character with many strident Constitutionalists to rid the land of these evil, lawless, egocentric men. One of those evil men slithered out of his lair onto the neo-con network – Fox News – to declare Edward Snowden a traitor and spy. Mr. Snowden responded to chicken-hawk Dick “Deferment” Cheney during another freedom of the press in a foreign country event:

“Further, it’s important to bear in mind I’m being called a traitor by men like former Vice President Dick Cheney. This is a man who gave us the warrantless wiretapping scheme as a kind of atrocity warm-up on the way to deceitfully engineering a conflict that has killed over 4,400 and maimed nearly 32,000 Americans, as well as leaving over 100,000 Iraqis dead. Being called a traitor by Dick Cheney is the highest honor you can give an American, and the more panicked talk we hear from people like him, Feinstein, and King, the better off we all are. If they had taught a class on how to be the kind of citizen Dick Cheney worries about, I would have finished high school.“

Who has done more to shred the Constitution and strip us of rights, liberties and freedoms in the last thirteen years – Cheney or Snowden?

This brings us to the question of our times. Who are the patriots and who are the traitors? Those in power have been using the Bernaysian propaganda technique of conscious and intelligent manipulation of the public mind by using the corporate media to convince the distracted ignorant masses that Edward Snowden has committed treason against his country and should be punished for his crime. Interestingly enough, treason is addressed in Article III Section 3 of the U.S. Constitution:

Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort. No Person shall be convicted of Treason unless on the Testimony of two Witnesses to the same overt Act, or on Confession in open Court. 

At the same time it would make sense to define the term patriot:

A person who vigorously supports their country and is prepared to defend it against enemies or detractors.

Does Edward Snowden fit the definition of a traitor as described in the Constitution? The shallow vacuous pundits in the corporate mainstream media complex blather on about treason while focusing their in-depth journalism on pictures of Snowden’s girlfriend from her Facebook page. This is what passes for journalism in America today. A man uncovers the largest spying conspiracy in human history and highly paid mouthpieces for the establishment focus on pole dancing. The last time I checked, Congress hadn’t declared war on anyone, so Snowden isn’t a traitor under that clause. He must be providing aid and comfort to our enemies. Who are the enemies today? They seem to change on a daily basis. I guess since we are considered potential enemies of the state, his revelations were giving the citizens of the United States aid and comfort.

On the other hand, a patriot is someone who vigorously supports their country and is prepared to make the ultimate sacrifice on its behalf against those who would damage or hurt that country. The government of the United States (President, Congress, Judiciary), in conjunction with their corporate, banking and media co-conspirators have knowingly and willingly subverted the Constitution of the United States and have therefore committed treasonous acts that have endangered the rights, freedoms and liberties of the people. A corrupt regime will use their thousands of laws to ensnare anyone in some violation of those laws. But at the end of the day a critical thinking individual knows right from wrong without being told by a government bureaucrat. Edward Snowden is a patriot of the highest order. His act of heroism, knowing he would be despised, attacked and hunted down by the American Thugocracy, is on par with the actions of our Founding Fathers who knew they would be hung if their Revolution failed. A true patriot must be ready to defend his country against a tyrannical government. Edward Snowden just dumped the tea into the Boston Harbor.

Edward Snowden is standing up to the autocratic powers that have seized control of our Constitutional Republic. Other patriots (Thomas Drake, William Binney, J. Kirk Wiebe, Bradley Manning, Julian Assange, Aaron Swartz, Daniel Ellsberg) have sacrificed their careers and lives to reveal the truth about government corruption and malfeasance.  Ben Franklin pondered whether we could keep the Republic they had given us. He understood human nature and the likelihood that we as a people would become corrupted, vote for people who promised us the most, and would willingly sacrifice our independence, freedom, liberty and rights for the presumed safety and security of a despotic government:

“In these sentiments, sir, I agree to this Constitution with all its faults; if they are such; because I think a general government necessary for us, and there is no form of government but what may be a blessing to the people if well administered; and I believe, further, that this is likely to be well administered for a course of years, and can only end in despotism, as other forms have done before it, when the people shall become so corrupted as to need despotic government, being incapable of any other.”

Words of a Traitor?

“…I can’t in good conscience allow the US government to destroy privacy, internet freedom and basic liberties for people around the world with this massive surveillance machine they’re secretly building.” – Edward Snowden

The key terms are “good conscience” and “secretly”. Doing what is right does not mean doing what the authorities declare to be the law. Edward Snowden has a conscience. Barack Obama, Dick Cheney, James Clapper, John McCain, Diane Feinstein, Ben Bernanke, Jon Corzine, Jamie Dimon and the rest of the sociopathic criminal governing class have no conscience. Their souls are blackened with their crimes and misdeeds. In our Bizarro world, Nobel Peace Prize winners slaughter Muslim children indiscriminately with their squadrons of killer drones. Those in power are allowed to operate in the shadows, hiding anything that might incriminate them and secretly spying on millions of citizens without probable cause, while we the people have no right to privacy or freedom from surveillance in this plutocracy. We are all suspects in the eyes of the state and can be terminated at the whim of a government apparatchik:

“Because even if you’re not doing anything wrong you’re being watched and recorded. And the storage capability of these systems increases every year consistently by orders of magnitude … to where it’s getting to the point where you don’t have to have done anything wrong. You simply have to eventually fall under suspicion from somebody – even by a wrong call. And then they can use this system to go back in time and scrutinize every decision you’ve ever made, every friend you’ve ever discussed something with. And attack you on that basis to sort to derive suspicion from an innocent life and paint anyone in the context of a wrongdoer.” – Edward Snowden

Our greatest fear at this point in history is the continued apathy, ignorance, slothfulness, and delusional thinking of our narcissistic populace regarding the most important issue of our time – freedom or tyranny? Will enough people stand and fight the encroaching surveillance state and the evil men pulling the levers? Change will not happen through the ballots box, as the system is rigged and the democratic process has been subverted. It will require patriots taking to the streets and more people like Edward Snowden stepping forward to lead us back out of the abyss into which we have fallen. Time is growing short. Will we rise to the occasion or will we cower and wait until the satanic Eye of Sauron turns in our direction?

“The great fear that I have regarding the outcome for America of these disclosures is that nothing will change. [People] won’t be willing to take the risks necessary to stand up and fight to change things… And in the months ahead, the years ahead, it’s only going to get worse. [The NSA will] say that… because of the crisis, the dangers that we face in the world, some new and unpredicted threat, we need more authority, we need more power, and there will be nothing the people can do at that point to oppose it. And it will be turnkey tyranny.” – Edward Snowden

 

“I do not expect to see home again.” – Edward Snowden

Over the course of decades we have allowed ourselves to be corrupted by the love of material possessions, the lure of a debt based faux wealth, the money for nothing entitlement promises of dishonorable politicians, the evil of currency debasement, the effectiveness of mass media propaganda, and the belief that we could sacrifice freedom and liberty for promises of safety and security made by a cabal of powerful rich men. Power has been concentrated into the hands of the few, who operate in secrecy and despise the people. They don’t want transparency or open debate. Freedom of speech is nothing but a thorn in their side. They believe they are smarter than the serfs and have no morality when it comes to committing illegal acts and disregarding the Constitution. They are not acting in the public interest. Their abuse of power and looting of the national wealth have put us on a path towards a bloody revolution. This is not a time for conformity, obedience or submission. It’s time to stand up and expose the evil doers. It’s time to rally around those who care about this country. Who are the real traitors? You know the answer. What are you going to do about it?

“The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are being looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care? When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media? Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.” – Ron Paul

 

WARNING: The National Security Agency is likely recording and storing this communication as part of its unlawful spying programs on all Americans … and people worldwide. The people who created the NSA spying program say that this communication – and any responses – can and will be used against the American people at any time in the future should folks in government decide to go after us for political reasons. And private information in digital communications may be given to big companies by the government.

WHERE WILL THE NYC RATS GO?

I bet you thought I meant the rats on Wall Street and in the JP Morgan building. Nope. I mean the real rats that live in the NYC subway system. Bloomberg has no problem with rats living under NYC, but has a huge problem with 32 ounce sodas and young people protesting. He is the chief rat and we will now see how incompetent he really is as NYC flounders for weeks because they were unprepared for a storm. But they sure can do a great job luring 18 year old Muslims into fake terrorist plots. Maybe he should have spent the taxpayers’ money on storm preparation rather than his nanny state initiatives and fake terrorist PR campaign. What a fucked up city and fucked up mayor.

Try watching the video without laughing.

Now The Rats Are Sinking The Leaking Ship

 
Tyler Durden's picture

Submitted by Tyler Durden on 10/30/2012 11:00 -0400

While the massive population of New York City is awfully impacted by Sandy, there is a more populous and even more caustic population that is struggling with the aftermath: Rats! As Forbes notes, the NYC Subway is notorious for its rat population and with all five subway tubes now submerged, one can only imagine where these cute cuddly rabies-wielding devil rodents will make their new homes. “Rats are incredibly good swimmers and they can climb” is hardly the reassuring news lower Manhattan homeowners were looking for, and as the Daily Mail notes, this could bring infectious diseases such as leptospirosis, hantavirus, typhus, salmonella, and even the plague into human contact. On the bright side (well not really), rats don’t need to bite a human to transmit its gross payload; rodent feces and urine can spread conditions like hantavirus just as easily – get long hand sanitizer stocks!

  • Rats can climb brick walls, trees, and telephone poles, and walk across telephone lines.
  • Rats can fall from a height of 50 feet without getting hurt.
  • Rats can jump three feet in the air from a flat surface and leap more than four feet horizontally.
  • Rats can scamper through openings as small as a quarter. General rule: If a rat’s head fits into the hole then the body will follow.

 

IT ONLY TOOK A GLOBAL DEPRESSION TO REDUCE GAS PRICES BY 40 CENTS

You can’t watch the mainstream media propaganda channels for more than ten minutes without a talking head breathlessly announcing that gas prices have dropped for the 24th day in a row and are now back to $3.55 a gallon. Wall Street oil analysts, who are paid hundreds of thousands of dollars per year to tell us why prices rose or fell after the fact, are paraded on CNBC to proclaim the huge consumer windfall from the drop in price. This is just another episode of a never ending reality show, designed to keep the average American sedated so they’ll continue to spend money they don’t have buying crap they don’t need. The brainless twits that pass for journalists in the corporate mainstream media never give the viewer or reader any historical context to judge the true impact of the price increase or decrease. The government agencies promoting the storyline of those in power extrapolate the current trend and ignore the basic facts of supply, demand, price and peak oil. The EIA is now predicting further drops in prices. Two months ago they predicted steadily rising prices through the summer. What would we do without these government drones guiding us?

Inflation Adjusted Gasoline Prices (Monthly)

As you can see from the chart, gas prices tend to be volatile and unpredictable in the short term. You can also see that since 1998 the trend has been relentlessly higher. The average inflation adjusted price of gasoline in 1998 was $1.41 per gallon, versus $3.55 today, a 152% increase in fourteen years. Over this same time frame the BLS manipulated CPI was up only 44%. If we are swimming in oil, as the MSM pundits claim, why the tremendous surge in price? It must be those evil oil companies. It couldn’t possibly be the impact of peak oil. To acknowledge the fact that worldwide oil production has reached its peak would be to concede that our suburban sprawl, just in time world is drawing to an excruciating end. So the politicians spout their assigned storylines, supported by their paid off “experts” (aka Daniel Yergin), and unquestioningly reported as fact by their designated corporate media outlet. Those of a liberal bent assail oil companies and speculators; refuse to acknowledge the law of supply and demand, while touting green energy as the solution to all our energy needs. Those of a conservative bent believe in attacking foreign countries to secure “our” oil, refuse to acknowledge the law of supply and demand, and spout “drill, drill, drill” slogans because dealing with facts is inconvenient. The willfully ignorant public believes whichever storyline matches their preconceived beliefs. All is well – no one is required to think critically. Thinking is hard.

There are numerous factors that affect the price of oil on a daily basis, but at the end of the day supply and demand determine price. The chart below documents the key external events that have had a major impact on oil prices since 1970. The vital fact that you won’t hear on CNBC is that every recession since 1970 has been immediately preceded by an oil price spike. Anyone living in the real world (this excludes Cramer, Liesman, Bartiromo, & Kudlow) knows we have entered part two of the Greater Depression. The surge in oil prices in the last two years has precipitated this renewed downturn.

The MSM blathering baboons of bullshit dutifully report the price of gas on a given day. People who live in the real world fill up their gas tanks every week, so the average price over a period of time is what matters. The average price of a gallon of gasoline in 2008 was $3.39. The average price in 2011 was $3.48. The average price in 2012 has been $3.62 thus far. This data paints an entirely different picture than the one painted by the politicians, experts and the clueless captured media. Gas prices are higher than they were prior to the last economic implosion. Cause and effect is a concept beyond the intellectual capabilities of MSM journalists and the millions of government educated zombies they mesmerize with misinformation. The lack of intellectual curiosity and critical thinking skills plays directly into the hands of those with a storyline to sell or truth to obscure.

Swimming in Oil

The recent storyline proliferated by the MSM at the behest of Washington DC politicians and the corporate interests that control them, is that the U.S. is on the verge of energy independence, with hundreds of years of plentiful oil right under our feet. The chart below made the rounds last week on Bloomberg, defender and mouthpiece of billionaires everywhere. This chart surely proves that peak oil is bullshit. Right?

Besides the false representation of oil production and the misleading conclusion that we have more oil than we need, the chart and Bloomberg screed does not provide the true context of why worldwide demand is tumbling. The chart is NOT showing global crude oil production. It is showing global oil and other liquids supply, which includes crude and condensate, natural gas plant liquids, other liquids (mostly ethanol), and processing gains (increase in volume from refining heavy oil). The MSM would rather mislead the public than provide the true picture of the supposed oil production boom. The question is whether the MSM is misleading the public due to their own journalistic incompetence or are they carrying out their assigned mission on behalf of the corporate oligarchs running the kingdom.

The chart below reveals a truer picture of the worldwide energy situation. Conventional oil production hit its peak/plateau around 74 million barrels per day at the end of 2004, and has barely budged from that level over the last eight years. Despite all the rhetoric about the North American oil boom, conventional oil production is at virtually the same level today as it was in 2004. The U.S.(shale oil) and Canadian (tar sands) gains in production have been matched by the collapse in Mexican production. The Middle East countries produced 23.3 million barrels in September 2004. The average price of a barrel of oil in 2004 was $38. They are now only producing 23.9 million barrels when prices are 120% higher.

World Oil and Other Liquids Supply

Global oil demand in 2004 was around 84 million barrels per day. To increase liquid fuel supply to meet the 90 million barrels per day demand we had to turn to unconventional fuels like tar sands, tight oil, and biofuels, all of which have far higher production costs and far less energy content than sweet crude. As the easy to access, cheap to produce ($20 per barrel in Saudi Arabia), close to the surface sweet crude has been depleted, it has been replaced by heavy crude, tar sands, deep-water oil, and shale oil, with production costs in excess of $80 per barrel. Anyone anticipating a long-term decline in fuel prices must be smoking tar sands in their bong. The liquids that have “replaced” conventional crude have a few slight drawbacks. Natural gas liquids provide about 70% as much energy per barrel as crude oil, so a barrel of NGL is not equivalent to a barrel of crude. Have you filled up your SUV lately with some NGL? Ethanol provides only 60% as much energy per barrel as crude oil and its EROEI is pitifully low. The energy returned on energy invested for these non-conventional sources of energy approaches the minimum limits unless prices rise dramatically. The Obama green army does not want this chart making its way into the public discourse. Their fantasyland of renewable energy solutions is proven to be a fool’s errand.

Catch-22 Energy Edition

The price of a barrel of West Texas crude is currently $86 per barrel, down from $109 per barrel in February. Obama supporters will proclaim that his threat to crack down on speculators had the desired effect. He must have scared those nasty speculators with his gravitas. The price rise surely didn’t have anything to do with the U.S. led attack on Libya, the act of war economic sanctions on Iran, the beating of Israel/U.S. war drums, Japan demand due to the shutdown of their nuclear power industry, or the relentlessly higher demand from China and India. And now the MSM is trying to spin a yarn that prices have dropped by 21% because worldwide supply is surging. That is so much more palatable than telling the truth and admitting that we’ve entered the 2nd phase of the Greater Depression.

It took $140 a barrel in oil in 2008 to tip the world into recession. Worldwide economies were much stronger then. The U.S. National Debt has risen by $6.5 trillion, or 70% since 2008. Real GDP has risen by $200 billion since 2008, or a 1.5% increase. Debt to GDP has risen from 64% to 102%. Consumer debt at $2.55 trillion is exactly the same as the 2008 level even after Wall Street banks have written off over $1 trillion, subsidized by the American taxpayer. The consumer deleveraging storyline is completely false. In 2008 there were 234 million working age Americans and 145 million of them were employed. Today there are 243 million working age Americans and 142 million of them are employed. In 2008 there were 28 million Americans in the food stamp program. Today there are 46 million Americans collecting food stamps. The economic situation in Europe has deteriorated at a far greater rate. Therefore, it is not surprising that it only took $109 a barrel oil to push the world back into recession.

The main reason prices are dropping is the collapse in demand from Europe and the United States. The bumpy plateau of peak oil is in full force. Prices rise to the point where they push economies into recession, demand crashes due to the recession, and prices decline. The double whammy of oil prices reaching $111 a barrel in 2011 and $109 a barrel in 2012 have sapped the life out of the American consumer. This is reflected in the plunge in gasoline and petroleum usage since 2008, with a temporary leveling off in 2010, followed by a further nosedive since 2011. As this recession deepens over the next six months, prices will likely fall further. But this is where the Catch-22 kicks in.

Once prices drop below $80 a barrel it sets in motion a reduction in capital investment, as new production projects are not economically feasible below $80 per barrel. Oil analyst Chris Nedler explains the Catch-22 aspect of oil prices in a recent article:

Research by veteran petroleum economist Chris Skrebowski, along with analysts Steven Kopits and Robert Hirsch, details the new costs: $40 – $80 a barrel for a new barrel of production capacity in some OPEC countries; $70 – $90 a barrel for the Canadian tar sands and heavy oil from Venezuela’s Orinoco belt; and $70 – $80 a barrel for deep-water oil. Various sources suggest that a price of at least $80 is needed to sustain U.S. tight oil production.

Those are just the production costs, however. In order to pacify its population during the Arab Spring and pay for significant new infrastructure projects, Saudi Arabia has made enormous financial commitments in the past several years. The kingdom really needs $90 – $100 a barrel now to balance its budget. Other major exporters like Venezuela and Russia have similar budget-driven incentives to keep prices high.

Globally, Skrebowski estimates that it costs $80 – $110 to bring a new barrel of production capacity online. Research from IEA and others shows that the more marginal liquids like Arctic oil, gas-to-liquids, coal-to-liquids, and biofuels are toward the top end of that range.

My own research suggests that $85 is really the comfortable global minimum. That’s the price now needed to break even in the Canadian tar sands, and it also seems to be roughly the level at which banks and major exploration companies are willing to commit the billions of dollars it takes to develop new projects.

Oil prices may temporarily drop below $80, but prices below that level for a prolonged period will lead to supply being constricted, which will ultimately lead to higher prices. The storyline of hundreds of years of Bakken shale oil that will make the U.S. energy independent is the latest fiction to be peddled by the oligarchs as a way to sedate and confuse the masses.

What the Frack

U.S. oil production in 2007 averaged 8.5 million barrels per day. Today, the U.S. is producing 10.7 million barrels per day. We must have hit the jackpot. Not quite. Actual crude oil production has increased by 1 million barrels per day, a 20% increase. The other 1.2 million barrels have been from liquefied natural gas (up 34%) and government subsidized ethanol (up 100%).

The U.S. crude oil production is at the same level it was in 1998, but somehow we are on the verge of becoming energy independent. The recent increase is solely due to the horizontal drilling and hydraulic fracturing of shale deposits in Texas and North Dakota. You don’t hear much about Alaskan production declining for the ninth year in a row and California production declining to the lowest level in three decades. The paid shills predicting Bakken production of 3 million barrels per day are purposely lying or just plain delusional.

North Dakota oil production has reached 550,000 barrels per day versus 187,000 barrels per day in 2009. Simpletons in the MSM will just extrapolate this growth to 3 million barrels by 2020. No need to examine the facts. Oil market expert Tom Whipple reveals the dirty secrets behind the Bakken shale oil miracle:

It took the production from 6,617 wells to produce North Dakota’s 546,000 b/d in January. Divide the daily production by the number of wells and you get an astoundingly low 82 b/d from each well. I say “astounding” because a good new offshore well can do 50,000 b/d. BP’s Macondo well which exploded in the Gulf a couple of years ago was pumping out an estimated 53,000 b/d before it was capped.

Now a North Dakota shale oil well is not in the cost class of a deep-water offshore platform which can run into the billions, but they do cost about three times as much as a classic onshore oil well as they first must be drilled down 11,000 feet and then 10,000 horizontally through the oil bearing layer before the fracturing of the rock can take place. The “fracking” involves at least 15 massive pumps that inject water and other chemicals into the well. Take a Google Earth flight over northwestern North Dakota. The fracked wells are hard to miss as there are now about 9,000 of them and they are each the size of a football field.

There is still more — fracked wells don’t keep producing very long. Although a few newly fracked wells may start out producing in the vicinity of 1,000 barrels a day, this rate usually falls by 65 percent the first year; 35 percent the second; and another 15 percent the third. Within a few years most wells are producing in the vicinity of 100 b/d or less which is why the state average for January is only 82 b/d despite the addition of 1300 new wells in 2011.

The rapid depletion of these wells, enormous expense to drill new wells, oil prices barely above cost of production, low EROEI, swiftly falling Alaskan and shallow water production, and the snail’s pace of deep water production are not a recipe for energy independence. Shale oil production will never exceed 1 million barrels per day. And if you believe Saudi Arabia’s promises to fulfill any shortfalls, I’ve got some delightful beachfront property in Afghanistan to sell you. Saudi conventional crude oil production is at the same level it was in 2005.

Saudi Arabia Oil Production

The seven year Saudi plateau is just a precursor to what is going to happen over the next decade. Saudi Arabia began pumping oil in 1945. It will all be gone by 2045. You can’t extract an infinite amount of oil from a finite world. Pretending this isn’t true won’t make it so. Oil has been the lifeblood of our nation since the late 1800s. The depletion of this essential ingredient of the modern world will not lead to a sudden death for our way of life but a slow downward spiral of waning supply, escalating prices, and economic decay.

The sustained high and rising oil prices will be economically destructive as our debt saturated, suburban sprawl, mall centric, SUV crazed, cheap oil dependent society methodically and agonizingly implodes. Chris Skrebowski describes our future succinctly:

“Unless and until adaptive responses are large and fast enough to constrain the upward trend of oil prices, the primary adaptive response will be periodic economic crashes of a magnitude that depresses oil consumption and oil prices.”

We’ve entered one of these periodic economic crashes. They are coming faster and faster. So enjoy that 40 cent drop in gas prices as you drive down to sign up for food stamps. The Saudis have a saying that acknowledges their luck in being born on top of billions of barrels of oil and the inevitability of its depletion:

“My father rode a camel, I drive a car, my son flies a jet plane, his son will ride a camel.”   

Delusional Americans believe they have a right to cheap plentiful oil forever. They refuse to acknowledge that luck has played the major part in their rise to economic power. The American saying will be:

My great grandfather rode a horse, my grandfather drove a Model T, my father drove a Buick, I leased a Cadillac Escalade, my son died in the Middle East fighting for my oil, his son will never be born.  

order non hybrid seeds

IT’S A BIG CLUB & YOU AIN’T IN IT

 

Jamie Dimon JP Morgan Chase CEO Jamie Dimon (L) and Goldman Sachs CEO Lloyd Blankfein leave the White House after they and 13 other bank heads met with President Barack Obama March 27, 2009 in Washington, DC. Obama used the meeting to tell the bankers that they must look beyond short-term interests toward obligations each person has in order to make it through the current economic troubles. (Photo by Chip Somodevilla/Getty Images) *** Local Caption *** Jamie Dimon;Lloyd Blankfein

[ken+lay+i+els+bush]

Robert Rubin Chuck Prince (L), former chairman of the board and CEO at Citigroup Inc. and Robert Rubin, former chairman of the Executive Committee of the Board of Directors at Citigroup Inc., are sworn in before testifying before the Financial Crisis Inquiry Commission on Capitol Hill April 8, 2010 in Washington, DC. The inquiry commission is investigating the causes, including subprime lending, that lead to the global financial collapse that began in the fall of 2008.

 

There’s a reason that education sucks, and it’s the same reason it will never ever ever be fixed. It’s never going to get any better, don’t look for it. Be happy with what you’ve got. Because the owners of this country don’t want that. I’m talking about the real owners now, the big, wealthy, business interests that control all things and make the big decisions.

Forget the politicians, they’re irrelevant.

Politicians are put there to give you that idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations, and they’ve long since bought and paid for the Senate, the Congress, the State Houses, and the City Halls. They’ve got the judges in their back pockets. And they own all the big media companies so they control just about all the news and information you get to hear.

They’ve got you by the balls.

They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest. You know something, they don’t want people that are smart enough to sit around their kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago.

They don’t want that, you know what they want?

They want obedient workers, obedient workers. People who are just smart enough to run the machines and do the paperwork and just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it.

And now they’re coming for your social security money.

They want your fucking retirement money; they want it back so they can give it to their criminal friends on Wall Street. And you know something? They’ll get it. They’ll get it all from you sooner or later because they own this fucking place. It’s a big club and you ain’t in it! You and I are not in the Big Club. By the way, it’s the same big club they use to beat you in the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to believe, what to think and what to buy.

The table is tilted folks, the game is rigged.

Nobody seems to notice, nobody seems to care. Good honest hard working people, white collar, blue collar, it doesn’t matter what color shirt you have on. Good honest hard working people continue, these are people of modest means, continue to elect these rich cocksuckers who don’t give a fuck about them. They don’t give a fuck about you. They don’t give a fuck about…give a fuck about you! They don’t care about you at all, at all, at all.

And nobody seems to notice, nobody seems to care.

That’s what the owners count on, the fact that Americans are and will probably remain willfully ignorant of the big red, white, and blue dick that’s being jammed up their assholes everyday. Because the owners of this country know the truth, it’s called the American Dream, because you have to be asleep to believe it.

George Carlin



AIN’T NO REST FOR THE WICKED



 

OCCUPY PISSES OFF EVERYONE

The editorial below was in my paper yesterday. It really grabbed my attention. It was from Dale McFeatters of the Scripps News Service. They are a liberal leaning organization. Their editorials skew to the left. They are sick and tired of Occupy Wall Street. They say it is time to go home and work through the existing establishment rules, regulations and captured party system.

Mayor Bloomberg is an Independent. He is sick and tired of Occupy Wall Street. He destroyed their encampment site yesterday and is fed up with their tactics. He also happens to be a multi-billionaire whose wealth was created from selling his product to Wall Street.

The Mayor of Phila is an ultra-liberal who just won re-election in this bastion of Democratic politics with 75% of the vote. He went on TV this week and said he is fed up with Occupy Phila and their refusal to move when his City Hall construction project begins.

The Mayor of Oakland makes the Mayor of Phila look like a conservative. She ordered an all out attack on the Occupy Oakland encampment.

Fox News and the Wall Street Journal despise the Occupy Wall Street movement and spew lies and misinformation about the movement 24 hours per day. They are the mouthpiece of right wing neo-con Rupert Murdoch, a multi-billionaire. The NY Daily News has been highly critical of the movement and is owned by left leaning Mort Zuckerman.

The narrow minded people who are easily led by the MSM buy into the various storylines spun by a media that does not want this movement to gain traction. They are distracted by minutia when the big picture is so disgusting. They applaud as young people brave enough to fight the elements and make a stand against corruption are bludgeoned and imprisoned for exercising their right to free speech and public assembly, while remaining silent as Wall Street bankers committed the crime of the century – absconding with trillions of American middle class wealth.

Step back for a moment and think. Who is the enemy? Is it really the thousands of young people just starting their lives and lashing out against a system that is designed to benefit Wall Street bankers, Mega Corporations and politicians of both parties in Washington DC?

The enemy is clear to me. The entire financial/corporate/political establishment is corrupt, dysfunctional, and benefits only the ruling oligarchy of this country. The nation’s lifeblood has been sucked dry by these vampires. The entire system has been hijacked by the few. You can call it crony capitalism or corporate fascism, but the bottom line is that the average American is getting screwed and the people getting the most screwed are the Millenial generation that is being left with an un-payable debt burden, no jobs, and no hope for a better tomorrow. This is why they are enraged. This is why they are protesting.

The self righteous Boomer generation leaders who control the levers of power in Washington DC, Wall Street and the corporate boardrooms do not want the system to change. They like the system just fine. Therefore, they hate a movement that threatens their wealth, power, and status. Both parties are frightened by the Occupy movement. The left and the right have their talking points and the existing system works just fine as they both get enriched as the country plunges deeper into debt by $4 billion per day.

The non-thinking and willfully ignorant people of this country need to snap out of their daze and think for themselves. The endless propaganda spewed at them day after day has dulled their sense of right and wrong. The Occupiers have begun to open the eyes of some people. They have forced a discussion of issues the establishment wants to keep buried. Neither Bush or Obama has attempted to go after the criminals on Wall Street. That is the tell. Both parties are captured. The Dodd-Frank bill was a toothless 700 page waste of time written by bank lobbyists.

When I see people and pundits declare the Occupy Movement irrelevant, I laugh at their utter stupidity. Would hundreds of billions been transferred from the criminal Wall Street banks to credit unions without the Occupy Movement spurring this effort? Would the $5 per month debit card fee inflicted on Americans by the criminal Wall Street banks been withdrawn without the rage and anger of the Occupy Movement? The answer is NO. Wall Street hates having the Eye of Mordor focused on their criminal and immoral activities.

This movement will not die because police thugs kick them out of parks using their 100,000 rules, regulations, ordanances, laws, and curfews. A society that depends on so many laws to “protect” its citizens has descended into a moral cesspool. I don’t need laws to tell me right from wrong and moral from immoral. The heart of these protests is a system that is broken. There will be many different solutions offered by those that are angry, but the BIG PICTURE is that the system must be brought down. It will not fix itself. Tinkering on the edges will not fix it.

We are in the midst of a Fourth Turning. It is a chaotic and confusing time. Anger, misery and bloodshed are a given. The existing social order will be swept away. That is guaranteed. What replaces it will be up to us. I’ll support any movement that spits in the eye of the establishment. I’ll support people like Ron Paul that want to tear down the established order. Everyone will need to choose sides. There is no fence sitting during the Fourth Turning. I hope you are pissed off. I know I am. 

Editorial: Occupy protesters have made their point. Now go home

Submitted by SHNS on Mon, 11/14/2011 – 15:20

In 1981, a group of demonstrators set up camp outside a British air base to protest the government’s decision to allow U.S. nuclear-tipped cruise missiles to be based there.

The Greenham Common Women’s Peace Camp initially generated a great deal of publicity, inspired imitators in other countries, sporadically tried to block access to the air base, and perhaps reached its zenith in 1983 when as many as 70,000 people turned out for one of their demonstrations.

The women survived several attempts by police to evict them, and eventually the authorities left their tent cities alone, as long as the women, and they were almost all women, confined themselves to picketing, leafleting and chanting.

In 1991, thanks to a nuclear-arms treaty with the Soviet Union, the last of the cruise missiles were removed, taking with them, one would have thought, the reason for the camp. But the women stayed on for nine more years, expressing an increasingly vague and inchoate commitment to “peace.” Many of the Greenham women cited a sense of unity, sisterhood, shared purpose and, when pressed, little desire to return to the humdrum routine of their former lives.

One senses that, in accelerated fashion, the Occupy Wall Street movement has arrived at that point. On Wall Street and in cities across the country, the protesters have effectively made their point about income inequality — the 1 percent versus the 99 percent; lopsided tax breaks given to hedge-fund managers and the proclivity of Wall Streeters to lavishly reward themselves regardless of whether their performance merits it. And, yes, economically the great middle class has been stagnant for a decade or more.

As the Occupy movement drags on — the first encampment went up Sept. 17 — the issues that inspired it are receding in the public consciousness and the issue has increasingly become the encampments themselves.

There have been problems of noise, sanitation, isolated incidents of crime and violence and the inevitable run-ins with police, but generally the Occupy movement has been a benign one. But its time in the public square is over. Public space meant for the enjoyment of the many should not be arrogated to advance the interests of the few.

Go home. Find political candidates who share your views and go to work for them. Raise money. Man phone banks. Knock on doors. Help the poor and minorities and those with limited English get government IDs in states that have passed voter-suppression laws.

And don’t forget to vote yourself. It really works in this country. Always has.

(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)