2014 Year in Review: Part 2


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Wealth Disparity

“Printing money out of thin air does not increase wealth, it only increases claims on existing wealth.”

~Charles Hugh Smith

In the olden days, claims that the rich were getting richer and the poor were getting poorer were a thinly veiled rallying cry for class warfare. Thomas Sowell reminds us that a growing economy lifts all boats, and those at the bottom strata percolate up generationally from garment worker to bookkeeper to doctors and lawyers (well, maybe just doctors). It feels different now, and the angst over wealth disparity resonates with growing numbers of adherents. It is no longer just the dregs of society but the increasingly struggling middle class, or what I prefer to call “the median class.”

“Only the wealthy can afford a middle-class lifestyle.”

~Zero Hedge

The contrasts are stunning. While 53% of adults earn less than $30,000 per year,ref 197 the rentier class—big-gun money managers—are muffin topping out at $3 billion.ref 198,199 David Tepper earned almost $500K per hour. Stevie Cohen ranked second in earnings as a full-time defendant for insider trading. The median retirement savings of a working-age adult is $2,000, yet we’ve got folks with the cash to pay for brain surgery on goldfish,ref 200 $60 million Steve Martin–like balloon art,ref 201 $500K watches,ref 202 and $2,000 glamburgers (“gluttonburgers”).ref 203 A full 47% of millennials are using >50% of their paychecks to pay down debt.ref 204 Twenty percent of US families have no employed family members.ref 205 This is a problem demanding solutions for which none are obvious. The elite billionaire society, Beta Kappa Phi,ref 206 is dominated by the rentiers rather than wealth-creating capitalists. This is not about Bill Gates or Michael Dell. Wealth inequality is about the inordinately high pay for those who don’t actually create wealth and the inordinately low pay for those whose toils do. We have reached the apex of another gilded age.

“It's not just enough to fly in first class; I have to know my friends are flying in coach.”

~Jeremy Frommer, Carlin’s chief executive

Seven Habits of Highly Successful People: skiing, yachting, snorkeling, golf, polo, dinner parties, and shopping.

We will be tempted to redistribute. But ramping up the minimum wage by fiat quickly ushers in the 360-burger-per-hour robot.ref 207 “Our device isn’t meant to make employees more efficient,” said Momentum co-founder Alexandros Vardakostas. “It’s meant to completely obviate them.” (Note the careful use of “obviate” rather than “replace.”) Debates about whether we should throw money to the rich or money to the poor, however, beg the key question: why are we throwing money at all?

“A smoothly operating financial system promotes efficient allocation of saving and investment.”

~Janet Yellen

Killin’ it Janet! But then she went on to make some unfortunate comments suggesting that the poor need to own more assets. Oh well. It is ironic that some (including me) attribute the wild disparity squarely on the Fed.

The economy has been financialized to dysfunction, a hallmark of a failing empire according to Kevin Phillips in American Theocracy. By flooding the market with capital, central bankers have made it difficult for workers to compete with capital-intensive technology. (I hasten to add that I’m unsure where I stand on this point given that creative destruction is central to growth.) The excess capital, however, also renders our hard-earned savings—our capital—worthless. I know where I stand on this point. Why pay savers for use of their capital when the Fed hands it out for free? By driving down rates to zero, the Fed is impoverishing savers unwilling to step out on the risk curve. Those of the median class who spent time out on that risk curve have been generationally wounded and, more important, are broke. They lack the capital to close the gap. Despite claims of impending deflation, the spending power of paychecks for the staples—food, energy, health care, and education—has tanked. Alliance Bernstein does a remarkable job of laying out the almost unattainable goal of a stable retirement.ref 208

“I would say [Fed policy] has been in some sense reverse Robin Hood.”

~Kevin Warsh, Stanford University and former Federal Reserve governor

“Maybe the Fed is delusional about the effects of its policy . . . in widening the gulf between rich and poor in this country.”

~William Cohan

“Part of the impact of these very, very low interest rates is that we've created this disparity. The wealthy are benefiting from government policy and the non-wealthy aren't. We have a president who says we've got to fight this disparity, and we have a Fed who's encouraging it everyday.”

~Sam Zell, former real estate mogul

History shows that ugly things happen when classes start battling for their share of the pie. A McShitstorm hit the McDonalds annual meeting from clashes of cops and protestors.ref 209 Ferguson (see below) is not just about a dead black guy. Models show a high correlation of global riots with global food prices.ref 210 We are there again. Nick Hanauer, a guy who is quite familiar with wealth creation, suggests that the billionaires of the world should be nervous:ref 211

“What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us.”

~Nick Hanauer, to his fellow billionaires

Nick sees pitchforks in the future. The Hanauer editorial posted in Politico generated upward of 10,000 comments from 10,000 pitchfork wielders. This plotline—a possible Fourth Turning—is just coming into focus.

Banks and Bankers

“The Bank never ‘goes broke.’ If the Bank runs out of money, the Banker may issue as much more as needed by writing on any ordinary paper.”

~Monopoly board game rule book

Simon Johnson noted that six years after the crisis, the big banks are still only 5% capitalized (20:1 leveraged).ref 212 Twenty-five European banks failed the stress test, which will force them to recapitalize.ref 213 The largest banks were mandated by the Dodd–Frank Bill to “put their affairs together” with formal plans to ensure stability: the Federal Reserve and FDIC rejected all of them—a 100% failure rate.ref 214 JPM has total assets of $2 trillion and a total derivative exposure of $71 trillion.ref 215 Beware of flappy-winged butterflies. If the Fed taps the brakes, those guys are headed right through the windshield. If we hit a bump in the road, it’s out through the moonroof.

“The tragedy is not that things are broken. The tragedy is that they are not mended again.”

~Alan Paton, Cry, the Beloved Country

Let’s ignore the awkward question of why you recapitalize insolvent banks—you’re not supposed to according to Bagehot.ref 216 How do you recapitalize them? Best I can tell, banks clean up their risk (a) through a grinding, multiyear balance sheet rehabilitation (a good ground game), (b) by getting their friends at central banks to engineer highly profitable carry trades, or (c) by simply selling their garbage to taxpayers way above market value. The Fed chose the latter two for US banks. They set up “good” banks and “bad” banks. The good banks hold good assets—heads they win—and the bad banks are like state-run Ebola clinics (tails we lose). The banks are also using more traditional methods; they are stepping away from the mortgage market, leaving it to the shadow banking industry. Get ready for good shadow banks and bad shadow banks.

The banks amassed almost $200 billion in fines,ref 217 paradoxically without any convictions of major bankers. (Actually, Iceland just hurled a banker in jail.ref 218 Go Vikings!) There are several nice summaries of JPM’s and BofA’s illegal activities.ref 219 The tenacious Matt Taibbi describes how the system was corrupted by backdoor dealings to avoid any jail time in The Divide (see Books). Taibbi tells us the no-jail policy was indeed a written policy by Eric Holder and the Obama DOJ. It is said that as you age you tend toward one of two paths: altruism or narcissism. Holder chose the latter. Barry Ritholtz claims that the fines are cleaning up the corporate culture despite the lack of satisfaction.ref 220 I like Barry but wholly disagree: the bill for this legal and moral lapse has yet to arrive.

“The behaviour of the financial sector has not changed fundamentally in a number of dimensions since the crisis . . . some prominent firms have even been mired in scandals that violate the most basic ethical norms.”

~Christine Lagarde, managing director of the IMF

Nothing gets through those beer goggles, Columbo. The details of this year’s shenanigans warrant some comment. Credit Suisse admitted to helping wealthy US folks evade taxes but claimed that management was unaware they were running a crime syndicate.ref 221 The Gnomes of Zurich chronically aided and abetted tax evaders. Deutsche Bank and Barclays were in on the scam too.ref 222 (Don’t take me too seriously; I understand arguments for the evasion.) We found that JPM was complicit in the Madoff case, and the DOJ knew it.ref 223 (One should assume the same for Worldcom and Enron.) JPM’s Asian CEO was brought up on corruption charges because traders cooked the books to conceal losing trades.ref 224 Of course, the whistleblower was denied whistleblower status by the regulators because of the DOJ’s zero-tolerance whistleblower policy.ref 225 JPM also helped BNP launder money to sanctioned countries.ref 226 Preet Bharara, Prosecutor of the Stars and head of his own Rainbow Coalition, went after BNP shareholders for almost $10 billion because you never help sanctioned countries. The actual criminals within BNP were left unscathed. JPM paid only $88.3 million to settle similar unlawful dealings with Cuba, Iran, and Sudan.ref 227 Apparently, you get a two-decimal discount if you are domiciled in the United States. Even Bharara has his tolerance limits; he got majorly pissed at Jamie Dimon for giving himself a 74% raise.ref 228 I’m guessing it will make Jamie’s huge campaign donation to help Preet crowd source his political career harder to explain. I have a suggestion, Preet: Stop fining shareholders and start jailing criminals. Convict somebody—anybody. Blythe Masters, after narrowly escaping a prison sentenceref 229 (not even close), left JPM and accepted a job as Regulator for a Day at the CFTC.ref 230 That’s how quickly her detractors processed the absurdity and stopped it.ref 231 Blythe will be played by Julianne Moore in the sequel to Catch Me If You Can.

HSBC overstated its assets by what some might call a rounding error ($92 billion),ref 232 which forced it to restrict withdrawals by demanding proof that you need cash (bank run).ref 233 Do grocery receipts count? It also recruited the former head of MI5 (British CIA clone) to join its board, which seems oddly consistent with suggestions that HSBC was laundering money to Hezbollah.ref 234 This also squares nicely with my previous assertionref 2 that HSBC is a retread of the profoundly corrupt and now defunct BCCI. After the next bailout—there will be another—Goldman will underwrite the IPO of HSBCCI.

RBS losses since '08 were shown to top £40 billion since '08,ref 235 an amount oddly comparable to that dumped into it by the taxpayers of one or more countries.ref 236 Fortunately, RBS managed to scrape together executive bonuses totaling 200% of base pay.ref 237 CEO Ross McEwan apologized. All was forgiven. . . . at least forgotten.

Citigroup got hit with a $10 billion tax from the DOJ for its role in the crime spree.ref 238 On a more humorous note, it inadvertently paid out $400 million in fake invoices sent by Banamex (Mexican princes).ref 239 Trolling for payments using fake invoices to huge corporations is a provocative business model.

“Regulators are starting to ask: Is there something rotten in bank culture?”

~New York Times news flash

The punitive qualities of all these fines are often muted by their tax deductibility. And, by the way, where does this $200 billion garnered by the Big Shakedown go? State and federal governments have found a number of worthy causes that are also politically expedientref 240—”a wealth redistribution scheme disguised as a lawsuit.”ref 241 Andrew Cuomo threatened to withdraw BNP’s license to operate on Wall Street if they didn’t up his vig by $1 billion.ref 242 I can taste vomit in my mouth.

The relief was palpable when MF Global officers and directors were allowed to use insurance money to defend officers and directors rather than give it to creditors.ref 243 A judge ruled that Goldman’s shell game, in which they moved aluminum from warehouse to warehouse, was unintentional.ref 244 It was just the tip, your honor! It was just the tip! The actor who played McGruff the crime dog got 20 years for pot and weapons charges,ref 245 the former being legal in some states and the latter a constitutionally protected right. A spoof article describing Holder’s departure to JPM was outlandish but so believable that I had to confirm with the source that it was actually satire.ref 246

“When you won, you divided the profits amongst you, and when you lost, you charged it to the [central] bank.”

~Andrew Jackson, former president of the United States

There are a few lawsuits weaving through the courts, and nothing terrifies bankers more than the discovery phase of a trial. Thirteen global banks were sued by Alaska Fund for ISDA fix rigging.ref 247 I’m not sure how you rig a fix or fix a rig or whatever. The nonprofit Better Markets has alleged that the DOJ violated the Constitution (shocking) by acting as the investigator, prosecutor, judge, jury, sentencer, and collector, without any check on its authority or actions.ref 248 A Freedom of Information Act suit showed that the SEC colluded with banks to ensure that they were prosecuted for only a single credit default obligation (CDO) charge and that the rest were covertly included in the settlement.ref 249 Barclays’ court battles over Libor rigging could produce some interesting discovery about “fantasy rates.”ref 250 The AIG trial seemed sufficiently consequential as a window into this huge heist that it gets its own section.

The charter of the Export-Import Bank (Ex-Im Bank) is up for congressional renewal.ref 251 Ex-Im bank is, according to Wikipedia, “the official export credit agency of the United States federal government . . . for the purposes of financing and insuring foreign purchases of United States goods for customers unable or unwilling to accept credit risk.”ref 252 It lends money to foreign debtors who cannot get credit through normal channels (credit being so tight and all).ref 253 Who might they be? Well, sovereigns who buy lots of Boeing jets presumably to bomb other countries who also buy lots of Boeing jets.ref 254 Lobbying—quite possibly illegal foreign lobbying—will ensure that the bill is passed. Why not let private banks fund these guys? They’ve been instigating and then funding foreign wars since antiquity. Congressional opponents risk an airstrike on their next campaign.

Is there any hope that the system will correct itself? In Vietnam, they execute bankers who egregiously screw up by “binding perpetrators to a wooden post, stuffing their mouths with lemons, and calling in a firing squad.” That’s making lemonade out of lemons. I suspect that the next crisis may see some punishment meted out extralegally in the US. There appears to be some already.

Zero Hedge was the first to pick up on a rash of dead bankers that stopped short of inspiring a Whack-O-Meter based on the bank Implode-O-Meter from 2009.ref 255 I lost count at about 20 and was shocked to find it is now 36.ref 256 Unfortunately, the guys most likely to make everybody’s short lists are not the ones heading off to the ultimate gated community. It’s possible that bankers suffer from the Werther effect—the tendency of suicides to come in waves.ref 257 It may simply be the Baader–Meinhof phenomenon,ref 258 or what I’ve always called the “green van effect”—buy a green van and then notice how many are already on the road. Nassim Taleb would likely tell us we are being fooled by randomness: 36 suicides in the large sample size may be normal . . . but I doubt it. Some of the subplots were curious. One was accidentally shot by two guys on a motorcycle. Another, according to the Denver Post, offed himself with eight shots from a pneumatic nail gun.ref 259 It read like satire given that this Final Exit was likely assisted by the Kevorkian brothers. We know there was at least one twisted bastard in the room. One banker went to the light with his whole family, which strikes me as over the top even for a banker. Although JPM’s payroll contained several who met untimely deaths, JPM had taken out $680 billion worth of life insurance policies (curtains default swaps) on their employeesref 260 presumably as a precaution against unfortunate accidents. A Chinese banker both died and fell from a fourth-story window, although the translation is unclear about the order in which the two occurred.ref 261 Even the head of a Bitcoin exchange cashed out.ref 262

“Perhaps sometimes it is easiest if the weakest links, those whose knowledge can implicate the people all the way at the top, quietly commit suicide in the middle of the night.”



Hank Greenberg's lawsuit against the Fed proved the Rosetta Stone of the bailouts. The world was aghast when the Fed bailed out the insurance behemoth to the tune of $187 billion, ostensibly to save AIG but really to save its counterparties (read: Goldman Sachs). The world subsequently blew a collective snot bubble when gazillionaire and former head of AIG, Hank Greenberg, sued the Fed for the bailout.ref 263 Greenberg's suit asserted that the Fed had no right to confiscate 92% of the company without formal proceedings of any kind. Hmmm. It does sound a little sketchy when put that way.ref 264 Well, the lawsuit reached the discovery phase this summer, and the media were all over it:
“The government never sought to couch AIG’s lifeline as a way to push money into the hands of Goldman Sachs, Deutsche Bank, Société Générale and the dozens of other banks around the world. . . . The problem is that so many people don’t like the answers.”

~Andrew Ross Sorkin, Wall Street darling and putative journalist

Not so fast, Andy. Last year I alluded to David Stockman’s assertion that the dominant insurance component of AIG was cordoned off by state insurance statutes—legal tourniquets—from the rotten part of the corpse: the risk of collapse was nil.ref 2 New York’s superintendent of insurance (Dinallo) testified as such in the trial.ref 265 Tim Geithner, Hank Paulson, Ben Bernanke, and anyone else intimately involved seemed to have truth issues along with very bad memories. Matt Stoller wrote some great pieces on the AIG case.ref 266,267

“I would be guessing, but I guess I would guess sometime in '08—but I'm not sure.”

~Timothy Geithner under oath, recalling squat about AIG

That is some seriously evasive mumbling. Bernanke was said to have two moods while on the witness stand with David Boies bearing down on him: “annoyed and really annoyed.” Records show he used the pseudonym “Edward Quince” in emails (to Linda Green?) during the crisis,ref 268 presumably to be secret to all except those with a Jekyll Island decoder ring. Key witness and Fed lawyer Scott Alvarez was clear that Paulson had done some serious fibbing to Congress while pushing the TARP (i.e., AIG bailout) through Congress under false pretenses. Alvarez’s use of “I don’t know” 36 times and “I don’t recall” 17 times in one day made for riveting testimony.

Boies: Would you agree as a general proposition that the market generally considers investment-grade debt securities safer than non-investment-grade debt securities?

Alvarez: I don’t know.

Judge Wheeler was smart and easily irritated at Alvarez’s bad memory. And unlike Congressional hearings, Boies had all . . . day . . . long.

We heard about the numerous potential suitors wanting to buy up the company as a distressed asset and how Geithner and the gang wanted nothing to do with that: none would pay Goldman back 100 cents on the dollar.

“...Geithner and company shot AIG in the head, and then let other banks feast on its rotting carcass.”

~Matt Stoller, journalist, channeling Matt Taibbi

Will anything come of this? I don’t know. Many prominent journalists wrote scathing indictments of those bringing the suit. Some called it laughable, frivolous, ludicrous, absurd. I, however, am rooting for Kappa Beta Phi alum Hank Greenberg. The Fed should not have commandeered AIG the way it did. It should have let the counterparties eat their mistakes rather than carrion. AIG wasn’t the only organization that left the reservation. MF Global is suing Price Waterhouse for the bad accounting that led to its demise.ref 269 Maybe somebody will yank Corzine from the Hamptons long enough to take the stand. Watch out for guys on motorcycles, Jon.

The Federal Reserve

“I found myself doing extraordinary things that aren’t in the textbooks. Then the IMF asked the U.S. to please print money. The whole world is now practicing what they have been saying I should not. I decided that God had been on my side and had come to vindicate me.”

~Gideon Gono, governor of the Reserve Bank of Zimbabwe

“We have [made] a colossal muddle. . . having blundered in the control of a delicate machine we do not understand.”

~John Maynard Keynes

The Fed’s dual mandate as both arsonist and firefighter puts it in the untenable situation of relentlessly fighting blazes it lights. It spent most of 2014 trying to convert one zero-interest-rate policy (ZIRP; Figure 13) via the so-called taper to another (ZIRP-lite), the whole time babbling incoherently to maximize its flexibility to use data of its choosing at times of its choosing. Phrases like “macroprudential” and “central tendency outcomes” are all designed to conceal the real purpose behind their sado-monetary policy.

Figure 13. Graphical view of financial repression.

ZIRP is praised by some as a means of providing cheap funding for public and private debt, allowing equity withdrawal from appreciating assets—kind of like an ATM. Hmmm . . . how'd that work for homeowners? The cost of the Fed's No Banker Left Behind financial repression program is estimated by Bloomberg at more than $1 trillion to the savers (errata: money hoarders). I know I've been repressed. It takes a balance of $480,000 in my checking account for the interest to pay my $4 monthly account fee.
“Savers are figuratively on their hands and knees and rooting around in bushes and between sofa seats for loose change on which to sustain themselves.”

~James Grant, editor of Grant’s Interest Rate Observer

The Fed’s primary justification for the risk and high cost of their latrogenic ZIRP, however, is to jack up asset markets to all-time highs. Yellen noted that “the channels by which monetary policy works is asset prices . . . I think it is fair to say that our monetary policy has had an effect of boosting asset prices.” Richard Fisher concurred: “We juiced the trading and risk markets so extensively that they became somewhat addicted to our accommodation.”

“We make ‪money the old-fashioned way. We print it.”

~Art Rolnick, chief economist for the Minneapolis Fed

Life According to ZIRP seemed pretty good, but $4 trillion is a lotta scratch. A less aggressive approach would have been to monetize it more gradually at, say, $5 million of debt per day, but that would have required starting at the birth of Christ to hit the $4 trillion target. In the midst of the '09 crisis, the Fed needed it fast—Damn the Torpedoes . . . Shock and Awe . . . Surge! Unfortunately, the notion that you cannot print your way to prosperity is gaining traction.

There was a lot of chatter about the Fed scarfing up all the high-quality collateral, causing stress in the repo market.ref 270 Anyone professing to understand the repo market is smarter or more dishonest than I. What I do know is that if the Fed buys up the good stuff—relatively speaking, of course—that leaves only the riskier crap for the rest of the fixed-income buyers, which seems

This is a companion discussion topic for the original entry at https://peakprosperity.com/2014-year-in-review-part-2/

5.0 out of 5 stars Essential reading on the deep, dark history of crony capitalism in America, March 29, 2014
This review is from: All the Presidents' Bankers: The Hidden Alliances that Drive American Power (Hardcover)
Nomi Prins has done it again. With All the Presidents' Bankers, she shows in exhaustive detail how Wall Street has captured the US political and regulatory process: Left, Right, Up, Down, Sideways. Indeed, as she demonstrates convincingly in the book, the entire left-right paradigm of modern US politics is completely irrelevant to a proper understanding of what really goes on in the long, dark tunnels of power linking Wall Street in New York with K Street in Washington, and their deleterious impact on what some still purport to call 'democracy'. In this regard her book is written in the hard-hitting, anti-establishment traditions of such monumental works as 'Wall Street and American Foreign Policy' by Murray Rothbard and the more recent 'The Great Deformation' by David Stockman. One particularly revealing aspect of Prins' forensic financial and political power investigation is the 'family tree' of the alliances she uncovers and exposes, many branches of which are cemented by marriage. While similar nefarious associations are no doubt as old as organized corporations and government generally, there has been a dramatic increase in their power and scope since the early progressive era in US history, where Prins sources many of the historical threads she weaves into a vast tapestry of questionable influences on powerful politicians, compelling circumstantial evidence of corruption and, in some cases, blatantly overt attempts to extend insider influence into areas it once feared to tread. As one proceeds through chapter after thoroughly documented chapter, there arises a sense of helplessness regarding what, if anything, is to be done. But education and the enlightenment that follows are the essential first steps to an empowerment that might, just might, make a material difference. With All the Presidents' Bankers, Nomi Prins just might have written the text that catalyzes education and enlightenment into effective action, and for this she has done not only her readers, but all concerned Americans, a great service.
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71 of 72 people found the following review helpful
5.0 out of 5 stars A compelling historical anatomy of money, global power, and American character, April 8, 2014
This review is from: All the Presidents' Bankers: The Hidden Alliances that Drive American Power (Hardcover)
Wow. What a book. This "wow" refers not only to the breadth and depth and tautness of Nomi Prins' writing, but to the amazing sweep of interconnected relationships she reveals at the heart of American and global economic development in the 20th and 21st century. Too often we get disconnected "front-end" understandings of such monumental political events as the Federal Reserve Act, Glass-Steagall Act, the Bretton Woods agreement, the Marshall Plan, and so forth. As an aware citizen who studies history and economy, Prins surprised me consistently with her in-depth research exposing the interconnected "back-door" origins and maneuverings of the powerful (and largely invisible) engineers of U.S. financial dominance. She does so in a clear, compelling, story-telling style that comes off equal parts forensic analysis and investigative journalism (with 69 pages of endnotes to back it up). Nomi Prins trusts the power of the story to convey the outrageous twists of the American financial saga. She is not a polemicist, but a true writer, inhabiting the story, and letting the story inhabit her. When one reads the main title, "All the Presidents' Bankers," one might think hers is an op-ed driven book, but Prins' style and focus is better captured in the subtitle: "The Hidden Alliances that Drive American Power." I had a notion going in that I would be reading about quasi-legal power brokers and the people they manipulated. There IS some of that, but I received something deeper-- a social dissection of collaborators who glory in the power to control others and to control resources by controlling the tool (money) in which material welfare is measured. I learned how "new" terms like "too big to fail" are really old trends scaled up in sophistication and scope. In addition, "All the Presidents' Bankers" speaks to human nature and the persistent patterns it takes when attached to opportunism and fear. I gleaned within this book not only the seeds of the material "American Dream" but of "disaster capitalism," the use of ostensible emergency to ramp up profiteering and ram through anti-democratic consolidations of power. I consider this book required reading for anyone serious about a deep, nuanced understanding of the precarious historical and economic edge we find ourselves currently occupying. Our predicament did not develop overnight. "All the Presidents' Bankers" provides an aware foundation for the democratic exchange, production, and creativity we will need to develop to outgrow the immaturity and unsustainability of our current global financial system. If we want to effectively move forward, we must learn how we got here. Prins' deft prose and fine mind offer the best kind of teaching and inspiration. Our experiment with materialism and power need not be wasted if its studied failure turns us toward collaboration, character, compassion, and courage.

So-almond eyed aliens have been replaced by monsters who would tase an 8 year old girl-child.
I think that I will put that Harley trip through the USA on hold. Perhaps a trip to my old country Zimbabwe would be safer.

Strange times indeed.

This read has consumed my entire Saturday but was worth it.

has laft me milch coos in udder arms. gotta go milk. 
Arthur, stop by if you do the usa Harley trip. robie

Wow.  Twelve months of gut punches condensed into one 4 hour reading.  Laughing just to keep from crying…Thanks David for at least having the pity/courtesy of not covering the Environment in too much detail.  I found the last part the most distressing.  Is it possible to just live one's life and be left alone?  Not likely, I guess.  Perhaps time to regroup and focus on the 4th E- the Existential…Aloha, Steve. 

One can exist without truly experiencing.  However, experience frequently changes one's existence, but not always. Look at the experiences of the masses over the years.  Yet they still vote in their controllers??

The 4th "E," what is it?  Experience, Experimental, Existence, Existential, Essence, Essential??

My take: meaningful insightful/emotional EXPERIENCE–the aha experience, a full body/mind/spirit integration on a new level.  Maybe Quantum Creativity, a la Goswami?? (Quantum physics-based??)

Gestalt always says: "Lose you mind and come to your senses."  Griffin's The Creature gave me such an experience.

Keep a paper copy for posterity, Herodotus of our time.

to Griffin's works? Or, am I missing something?  By the way, In The Dark Places of Wisdom, by Peter Kingsley is all about the pre-Socratic SACRED poets–very enjoyable.  All about "incubation."  Methinks, we all need more of that methodology.

One Thesis, 14 books, thousands of clay Sumerian tablets, innumerable interpretations, passionate debates.  What fun!

Main Question:  How did GOLD become so important in our planet's history???
And, why is it STILL so important.
Preservation of wealth
Contributor of superpower status
Reset for global financial stability
Generator of personal wealth/power
Well, here's another possibility.
Having read all 14 books by Sitchin, especially The 12th Planet (FOUNDATIONAL) and Tellinger's two books, Slave Species of the Gods: The Secret History of the Anunnaki and Their Mission on Earth; and, African Temples of the Anunnaki: The Lost technologies of the Gold Mines of Enki, (LAST CHAPTER summary) and THEN having watched the latest video by Tellinger (over 2 hours)--great if you have no time to read all these materials--I have come to some tentative conclusions.
1. The BASIC ASSUMPTION HERE: Sitchin has presented the "truth" of prehistory
regarding the Nefilim, Anunnaki and their quest for gold, all expounded on the clay TABLETS written in the cuniform language. Way, way before the Greeks.
Everything that follows is based on THIS ASSUMPTION: Sitchin is CORRECT
2. They came here for gold, for their planet's needs.
See The Earth Chronicles: Time Chart, pages 345-350 in The Wars of Gods and Men, by Zecharia Sitchin (Sumerian scholar): Beginning 450,000 years ago when:
"On Nibiru, a distant member of our solar system, life faces slow extinction as the planet's atmosphere erodes.  Deposed by Anu, the ruler Alalu escapes in a spaceship and finds refuge on Earth.  He DISCOVERS that Earth has GOLD that can be used to protect nibiru's atmosphere."
416,000 Gold mining in South Africa begins
300,000 Enki and Ninharsag create Primitive Workers through genetic
manipulation of Apewoman and homo sapiens takes over the mining of GOLD
Lots of HISTORY here--try reviewing the pages mentioned above.
3. They left Earth about 13,000 years ago (OUR TIME), shortly after the Deluge/Flood.
4. REMEMBER: 3,600 years our time=1 year their time--important!
Times they passed by here: 3,600 orbit around the sun
11,000 BC agriculture
  7,500  BC neolithic culture
  3,800 BC sudden civilization
     200 BC last time they passed through here
ONLY 3 years THEIR TIME!!  (approx 13,000 years OUR TIME)
Next passage:
  3400 AD (due to arrive in about 900 -1,386 years) -- 3400 minus 2014=1,386
5. They once came for gold and IF THEY still need gold, then MAYBE this passage might be the one to replenish their supply??
6. Let's ASSUME # 5 is correct, then what?  Right now many Central Banks are buying gold?  Why?  According to Rickards, for the FINANCIAL RESET of the world's
reserve currency, along with the SDRs (Special Drawing Rights) of the IMF. (Currency Wars; and, The Death of Money, by Rickards).
7. AND for superpower status, maybe even the "lone supremacy" superpower.
(Russia, China, EU, USA)
8. IF the Nefilim/Anunnaki return, those with GOLD will have bargaining rights and special favors from the "gods," no? But are they real? and when return????????
9. Am I nuts, insane, crazy, loco??  Is this really WHY GOLD IS SO IMPORTANT:
For LIFE, not just power, influence or control, but EXISTENCE????
So, thousands of clay tablets tell the story: Myth or Pre-History--you decide AFTER reading the 14 books. Does this make sense to you?    
Enjoy, Zen

The statement Ebola was mathematically very serious. Is only correct in undevelopped countries, where it still is dangerous and you would hardly call that  mathematically very serious as it is very serious, no math needed.
As for developed countries, all the CDC's in the world are very certain that the R0 (reproduction numbere of a virus witin a population) is less than 1. So it will not spread in the first world.

So mathematically not serious,

Have to pull up the author on this,MI5 was around a long time before the CIA.It would be much more accurate to say that CIA is a clone of MI6,as members of MI6 helped to create CIA after WWII.Most things didn't start in The US you know and to suggest they did is outrageous cultural chauvanism at best and idiocy at worst.

All this truth is very, umm, impressive without data.
But 5000 years ago, seems to be more likely when the ‘great deluge’ was: 8’ of river mud that dates to 5000 ya in the Persion Gulf region, the (admittedly disputed) Burkle crater, the sudden worldwide attempts at pyrimid construction by cultures near the ocean; the Epic of Gilgamesh; the Biblical Noah story, tree ring dating… all seem to point to an asteroid strike in the Indian Ocean.
13 kya seems to more point to the flooding of the Black Sea, a minor if very impressive event.
12 kya, there was some event in the Americas that caused the Clovis Culture extinction and the extinction of American horses and other species: possibly an asteroid strike in Alaska; but who knows?
But if a story can’t get its recent history right, what are the chances it would get its modern history right?
I’m inclined to think the gold theory is better explained in other ways. Conspiracy theories would seem a more rational choice.

Did you research anything he stated before commenting?  I thought not.  Don't form an opinion till you take the time to research.i've read some of what is explained, and don't have enough info to make a full position.  But, so many things that 25 years ago I would have told you "you're nuts" are true (from personal experience) so, I wont "pop off" like you just did (on info you've taken zero time to research).
Wake up people…"Reality" that's been shoved down our throats for the past 200 years (longer if you believe Kens version), isn't "true" reality!  The truth is in writings, and from their own mouths, but has been hidden from us.

. …
You ask, did I research anything he wrote about?
I did, if by research, you mean going back and reading the sumerian tablets.
On the one hand, I found it very informative and enlightening about the origins of the artistic style that resulted in the Biblical ‘Lamentations’; on the other hand, the Sumerian tablets did not seem to indicate anything he said at the time (about a poison radioactive cloud).
Moreover, his statement about the Chernobyl cloud did not match what I had seen from my three years in Silute Lithuania, right on the center of the fallout path.
Moreover, on the subject of questionable prehistory, I have already researched that, and come to my own conclusions – which I mentioned – and nothing he has said gives me cause to believe that his dating has any validity.
Now my question for you: Did you wait for me to answer the question on whether I had researched what he wrote, before you attempted to dismiss anything I said with a wave of the hand?

I didn't wait.  I apologize for that.
But saying that you looked into it a couple weeks ago, means you spent very little time doing your research.  But that's just my opinion as, I've researched it over the past 5 years, read a couple of Sitchen's books/works, and even had discussions with a British historian (Peter James) on the subject.  And I still can't come to conclusively say "BS".

People are obviously different.  I trust nothing that tptb have fronted as "the official story" and that includes ancient history.  As the old saying goes:  History is written by the Victors…

and it's sure not MAYBE … baby
so the ONLY question for us in the herd, is, once the realization of the value of gold ownership surfaces, to what extent will the tptb's attempt to squelch that desire.

Okay, I forgive you your hastiness, especially when I was also a bit hasty, and your statement – as you explained it – is not entirely untrue.
And I’m sorry if my statements are overly harsh. I didn’t think they were; I felt they were just true.
I just heavily believe that the theory of aliens is not even close to true. But then again, five years ago, I had a coworker who was heavily into the alien history, and I did look at it then, too.
And no, I did not research it heavily. There is a limit to how much research I put into things. I am a heavily overused laborer with a high job title; it loads me heavily; I have to prioritize my efforts, and they will go more where my interests are, after they go where my duties are.
Now that said, we are closer than one might otherwise imagine, Like you, I too, seldom fully believe official stories. I, too, think that conspiracies are within the range of ‘normal’, though not terribly so. And actually, I am more inclined to believe the price-fixing conspiracies, simply because they are possible; and when losses are covered by taxes, profitable.
More than that, these Sumerian theories smell more like religion, with less to back it than even religions I disagree with. They also seem to be a twist on Scientology and it’s claims, and I heartily cry BS on scientology, especially with the damage it has done to people, and the evil strongarm tactics its leadership has used. Maybe it’s an extension of my hatred of bullying, I don’t know.

Dear Ken,
in one of your recent postings you wrote that you are 81 year old. I am sincerely full of respect for your energy and vitality (no ass licking from my part   :wink: ).
Concerning your methodology and the explanations you offer I cannot at all agree.
Here are some books I learned al lot from:
David Hackett Fischer:
Historians' Fallacies : Toward a Logic of Historical Thought
Perfect Paperback: 338 pages
Publisher: Harper & Row, Publishers; 1st edition (December 30, 1970)
ISBN-10: 0060904984
ISBN-13: 978-0060904982
He is still alive:
An interview from November 2004:
Historian David Hackett Fischer participated in a three-hour discussion of his life and work.
A general introduction lo basic logic:
John Nolt / Dennis Rohatyn / Achille Varzi:
Schaum's Outline of Logic, Second Edition
Series: Schaum's Outline Series
Paperback: 336 pages
Publisher: McGraw-Hill; 2 edition (February 17, 2011)
ISBN-10: 0071755462
ISBN-13: 978-0071755467
The books has a short chapter dedicated to so widespread fallacies
Stanford Encyclopedia of Philosophy (SEP) is free and has very good articles
There is one about pseudo-science:
“There is widespread agreement for instance that creationism, astrology, homeopathy, Kirlian photography, dowsing, ufology, ancient astronaut theory, Holocaust denialism, Velikovskian catastrophism, and climate change denialism are pseudosciences.”
Ronald Giere
Understanding Scientific Reasoning
Publisher: Cengage Learning; 5 edition (July 13, 2005)
ISBN-10: 015506326X
ISBN-13: 978-0155063266
At least my old 4th edition (1996): ISBN-13: 978-0155016255
has a chapter on what Giere calls marginal science (page 97 – 118). Page 104 -105 he debates extraterrestrial visitation. On page 35 - 37 he offers a simple program in six steps to evaluate theoretical hypotheses.
David Hackett Fischer:
Historians' Fallacies : Toward a Logic of Historical Thought
Perfect Paperback: 338 pages
Publisher: Harper & Row, Publishers; 1st edition (December 30, 1970)
ISBN-10: 0060904984
ISBN-13: 978-0060904982
He is still alive:

“Some historians have argued that there is an element of psychological projection in conspiracism. This projection, according to the argument, is manifested in the form of attribution of undesirable characteristics of the self to the conspirators. Historian Richard Hofstadter stated that:
…it is hard to resist the conclusion that this enemy is on many counts the projection of the self; both the ideal and the unacceptable aspects of the self are attributed to him. The enemy may be the cosmopolitan intellectual, but the paranoid will outdo him in the apparatus of scholarship… the Ku Klux Klan imitated Catholicism to the point of donning priestly vestments, developing an elaborate ritual and an equally elaborate hierarchy. The John Birch Society emulates Communist cells and quasi-secret operation through "front" groups, and preaches a ruthless prosecution of the ideological war along lines very similar to those it finds in the Communist enemy. Spokesmen of the various fundamentalist anti-Communist "crusades" openly express their admiration for the dedication and discipline the Communist cause calls forth.]
Best regards
from a dry old fart from Europe   :wink:

Another amazing read from Professor Collum.
The one criticism I have is with the way he calculates his performance.  He should separate his investment returns from his salary savings.  Only then can he make a meaningful comparison to the performance of the S&P or Berkshire.

Mixing in savings from his salary inflates each year's performance by an amount that only he knows.  Comparisons to any benchmarks after that are nonsensical and misleading.