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The Stock Bubble

March 6, 2013 by  

The Stock Bubble

The Dow Jones industrial average topped its all-time high yesterday, zipping past the previous high of 14,198.10 it hit on Oct. 9, 2007.

On the backs of money debasement, $7 trillion in additional debt and mainstream media propaganda, helicopter Ben Bernanke has created the illusion of a prosperous economy. It’s a bubble that will soon burst. When it does, it will be ugly.

Even Bernanke knows this. Although he seems committed to the Fed’s bond-buying stimulus right now (aka QE3), the Fed has begun formulating PR strategy for the end of the $85 billion in monthly money printing and the concomitant crash.

Despite Wall Street’s irrational exuberance, 59 percent of Americans say the United States is in a recession, and “Americans across the board think the economic outlook is grim,” said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence and partner of Investor’s Business Daily. The IBD/TIPP Economic Optimism Index plunged 5.1 points in March to 42.2, its lowest point since December 2011. The Federal economic policies confidence gauge fell to a 15-month low. January personal income tumbled 3.6 percent, the worst monthly drop in 20 years. Retailers are about to close thousands of stores. And, adjusted for inflation, the stock market is nowhere near historic highs.

Leave it to Zero Hedge to put it all in perspective. The last time the DJIA was here:

  • Dow Jones Industrial Average: Then 14,164.5; Now 14,164.5
  • Regular Gas Price: Then $2.75; Now $3.73
  • GDP Growth: Then +2.5 percent; Now +1.6 percent
  • Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
  • Americans On Food Stamps: Then 26.9 million; Now 47.69 million
  • Size of Fed’s Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
  • U.S. Debt as a Percentage of GDP: Then ~38 percent; Now 74.2 percent
  • U.S. Deficit (LTM): Then $97 billion; Now $975.6 billion
  • Total U.S. Debt Outstanding: Then $9.008 trillion; Now $16.43 trillion
  • US Household Debt: Then $13.5 trillion; Now 12.87 trillion
  • Labor Force Participation Rate: Then 65.8 percent; Now 63.6 percent
  • Consumer Confidence: Then 99.5; Now 69.6
  • S&P Rating of the US: Then AAA; Now AA+
  • VIX: Then 17.5 percent; Now 14 percent
  • 10 Year Treasury Yield: Then 4.64 percent; Now 1.89 percent
  • EURUSD: Then 1.4145; Now 1.3050
  • Gold: Then $748; Now $1583
  • NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares

Helicopter Ben can keep this charade up a while longer, but there will be a reckoning.

Bob Livingston

is an ultra-conservative American and author of The Bob Livingston Letter™, founded in 1969. Bob has devoted much of his life to research and the quest for truth on a variety of subjects. Bob specializes in health issues such as nutritional supplements and alternatives to drugs, as well as issues of privacy (both personal and financial), asset protection and the preservation of freedom.

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  • Warrior

    It would also be interesting to see how many mortgages Fannie/Freddie have acquired since 2007.

    • Flashy you mean purchased for investment purposes? FNMA and Freddie do not “give” mortgages, they guarantee/insure them. And at least from 2009 onward, the UWing requirements have become strict and the paper of a MBS is now a nice investment.

      • tony newbill

        Oh and let me guess … we have Obama to thank right Flashy ?????

      • tony newbill

        And Flashy you didn’t even say that the Fed buying 40 plus Billion a Month of the Mortgage backed securities away from the 2 big 2 fail banks is feeding your Crony capitalism habit so that makes you a sucker sucking off the system of cronyism doesn’t it if you are making a buck off the MBS ???? Oh that makes you just like Romney when the UAW said he was Profiteering off the Bailouts of the POOR and Underprivileged , where is that Social and Economic Justice when a person needs it these days of Obama economics ?

      • Flashy

        Tony…actually, the move FNMA and Freddie did in tightening UWing was against the stated preferences of the administration.

        The UWing and guarantees of FNMA/Freddie was not the problem associated with either almost going under. What the problem was that they climbed on the MBS bandwagon in 2007 and bought into the MBS market for investment..and took it on the chin when the collapse occurred.

        Around 2007, Fannie and Freddie sought, and received, Congressional blessing to expand into MBSs. yes, barney frank was amongst the supporters as well as several GOPers. in the industry, no one saw it as a good move as it created a dangerous ‘incestuous” relationship with Guarantors of Mortgages and the securities created by those mortgages. Some banks and mortgagors were for it, most were in opposition.

        When the market crashed, FNMA and Freddie panicked…along with the rest of the financial housing community, and stopped the flow of money for mortgages. One day the spigot was fully open, the next…quite was shut off. Right at the height of the crisis, for a period of about 9 months, he only ones guaranteeing any mortgages were FHA, USDA, VA. that’s it..banks sure in the heck weren’t lending and FNMA/Freddie were too busy screwing down the lid.

        it has been my estimate that almost 50% of the drop in housing values can be directly attributed to this time frame. Foreclosures glutted the market and a resulting HUGE “shadow inventory” of houses waiting to be foreclosed on but delayed until the market improved.

        i blame both administrations for that period. BushII should have tied any TARP monies to maintaining at least a half open spigot. The demand was there, the values were not because the money was shut off. Obama’s administration didn’t know what they stepped into and had no clue what to do as the changeover in administrations occurred. As they tried to get a handle on what was happening, and why…not yet even to a point of ‘how to fix it”, they did nothing.

        Yes, i wonder why no one went to jail. I’m loving Elizabeth Warren grilling the SEC guys … she’s making some much needed waves and asking the right questions.

        In essence though, FNMA and Freddie were prime players in causing the closing off of monies. Now that the admin has it back on track as far as a solid housing mortgage policy, we’re beginning to see the housing pick back up. Which is has a very high job multiplier effect. I truly shudder thinking what could have happened if the admin didn’t green light FHA, VA and USDA during that period. Interestingly, their default ratio isn’t much higher than normal.

        • tony newbill

          Give me a break with how you cover up for Obamas handling of the MBS issue , and to say with a sort of confidence in his economic leadership that he has it all on track when all he has done is print the cash to reconstruct and resurrect the vehicles like hes a mastermind is going to far Flashy .

          Anyone could have done what Obama has done with just printing the cash to pay , buy and allocate financial systems back to where it looks OK . But whats Missing is the True Supply growth and Obamas roots of support will not allow him the benefit of true value supply-side growth and you know this Flashy so stop painting Obama as if hes now recovered the supply-side economy and its all systems go for supply-side growth .

          And another thing that is evidence that even if Obama was a supply-sider how would he be able to enjoy supply-side growth when last time before 2008 crash incomes were so low that credit was the only source of revenue to consume things like housing with , and the credit is gone now and the incomes in decline so this consumer driven market is not going to expand any better this time , and Obama is standing on the tools we need to expand this Income growth we need with his Trade policies that he will not retool and that be what he promised those Blue Collar workers he would do , he is Lying and this should have been told to those Unions what is in that Video I showed you !!!!!

      • Flashy

        Tony…I believe “supply side”, aka voodoo economics, has been thoroughly discredited as a basis for economic policy. Bush I and Clinton’s reversal of Reagan’s gift to the wealthy and Big Corporate America proved this.

        I’m not whitewashing this administration on anything. I had the “pleasure” of being in the mix of the industry during those days. It wasn’t fun and it was indeed frustrating day after day as a new nightmare policy and guideline came out of DC. As I said, 2009 was a year nothing was done except band aids by people who didn’t know the industry throwing ineffective policy after ineffective policy against the wall hoping something would stick. In 2010 we began to see a cohesive and targeted approach to the housing issues, took 2011 and the first half of 2012 for everyone to adjust to the new ways (actually going back to the old “old” ways). My guess is we’ll see a nice rebound in housing this year.

        But to say FNMA and Freddie was involved in the MBS market other than buying the paper as investment…that’s totally wrong. as totally wrong as anyone saying the CRA [Community Reinvestment Act] “forced” banks to loan to bad credit worthy people. No one “forced’ the banks to do anything.

        • tony newbill

          Clinton regime allowed the 2001Tech stock bubble to form and it was all bogus book cooked up stock values .
          And you can’t even blame BUSH for that because if you do then that Blows holes in your claim that Obama didn’t know what he was walking into in 2009 .

          The Fed has Been buying the MBS from the banks over the past 4 years and US Government / Fanny and Freddy have become that guarantee all with what you say is Voodoo Monetary Policy rather than allowing a supply-side economic structure of production of supply in key areas of needed growth that should be determined with inflation being that driver of investment with Reagan did .

  • tony newbill

    The fundamentals are not there . Whats different this time over Bushes time when the Hawks started calling the Stock Valuations Book Cooking is Obamas Federal Reserve QE is pouring that Cash into the portfolios of these stocks through the Corps and this Covers up the book cooking which is Now been fundamentally transferred over the Federal Reserve who is not subject to the same SEC regulations as the Corps as that Under the Bush era were and called out for Book Cooking with Private Debt accumulations , right ?????

    Dow Jones Industrial Average: Then 14164.5; Now 14164.5

    Regular Gas Price: Then $2.75; Now $3.73

    GDP Growth: Then +2.5%; Now +1.6%

    Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million

    Americans On Food Stamps: Then 26.9 million; Now 47.69 million

    Size of Fed’s Balance Sheet: Then $0.89 trillion; Now $3.01 trillion

    US Debt as a Percentage of GDP: Then ~38%; Now 74.2%

    US Deficit (LTM): Then $97 billion; Now $975.6 billion

    Total US Debt Outstanding: Then $9.008 trillion; Now $16.43 trillion

    US Household Debt: Then $13.5 trillion; Now 12.87 trillion

    Labor Force Participation Rate: Then 65.8%; Now 63.6%

    Consumer Confidence: Then 99.5; Now 69. 6

    S&P; Rating of the US: Then AAA; Now AA+

    VIX: Then 17.5%; Now 14%

    10 Year Treasury Yield: Then 4.64%; Now 1.89%

    EURUSD: Then 1.4145; Now 1.3050

    Gold: Then $748; Now $1583

    NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares

    So there has to be another reason why this Market rally is being staged …..Lets analyze some reasons why the printing of dollar debt leveraged against US Citizens and generations to come by the Federal Reserve like never seen before is happening .
    Heres the evidence of how the Corps are extracting funding from the 2 big to fail that access funds from the Federal Reserve Discount Window then invest this funding into the stock market ,
    $253.5B—Obama Borrowed Nearly 6x as Much in February as Sequester Cuts All Year
    Here is past evidence from 4 years ago on how the funding gets lost throw the Cracks and is leveraged against the Next Generation ,
    The Fed Audit
    9 TRILLION Dollars Missing from Federal Reserve,Fed Inspector General Can’t
    Senator Sanders asks Bernanke WHERE IS THE MONEY!!!
    Bernie Sanders and Timothy Geithner
    Chart Of The Day: China’s $3.3 Trillion FX Reserves Could Buy All World’s Gold Twice
    Obama & Co. is entering into a dangerous time of trying to stay relevant now and into the future !!!! The events that are taking place that forcing the fed to FLOOD the currency markets and equities with Cash to try and force with GREED world markets to continue to accept the dollar is going to create such a radical event to happen it will just be a wreck of destabilization . This should be reported more but the fear of this being exposed and causing a breakdown is too great for the power of the press so they stay quiet and we continue to watch this slow moving train wreck evolve !!!
    I think after 2006 when the Democrats took control of both houses of congress they Forced Bush because of their threat to defund the Iraq war to look, act and spend like they wanted and to not implement or publicly expose any sort of Regulatory actions that would have warned the Investment communities of the economic corruption that set the stage for the “ Takedown “ in 2008-9 or they would have cut funding for Iraq . Iraq was a failed strategy just like Opening up the Oil region to the takeover of the region by the Muslim Brotherhood will be .but now this strategy that the west thought would be an alliance in the Geo Political and Dollar financial Western nations to aline resources and political forces together has taken a different path and I bet the Russian, China and soon alliance with South American nations will forge a alliance with the Brotherhood fracturing the alliance the west was hoping for and the dollar continuing to be the trade currency and dominating the world societies in the sense of creating a Global Zero Growth economic structure to save the Eco system of Earth .

    Here is some evidence of this fracture of the alliance…..

    China is helping Iran get around the sanctions ,
    Argentina is hating the dollar and I bet this leads to their willingness to start setting their trade with Asia in Yuan’s , I bet most of South America will go with the Asian suppliers currency soon . The Federal Reserve is going to cause Obama to do something soon we are in dangerous times .
    European firms are starting to trade with the Yuan as their settlement currency . The report concluded that Asian and European firms are increasingly open to using Yuan payments, most frequently from Singapore and London.
    The Continued Fed QE strategy seemed to suggest they were losing the Faith in the investment community public to force the Fundamental Transformation away from the capital system over the Global Collective system they want in the 2010 turnover of Congress , so they restarted the capital system with the Fed QE policies along with keeping the interest at zero to get past the election . Now with the public drooling again over a economic sign of wealth recovery I bet if we see a Geo Political ( Federal Reserve losing the Trade Currency Status and willing to force war with Iran ) even that would require a action of national security support would be able to be generated for whatever kind of effort to secure the economic welfare of the nation and the public’s recovered Financial means . But its all coming apart just like it says in the Bible about Iron and Clay never sticking together ….and so History repeats itself .
    we might be getting ready to see such an event soon ……

  • Bob666

    We have gone from an investors market to a speculators market.

    • Gary

      I had a friend who had a saying, “At best Las Vegas is penny ante stuff, for real gambling have to go to the stock market”!

      • Bob666

        Yo Gary,
        I would agree with your friend-sounds like a smart guy.

      • jopa

        Gary I don’t live very far from Atlantic City and I don’t know one person that ever got rich there other than casino owners.However I do know people that have done quite well on the stock market.I think some of them are lying also but not all like the Vegas and AC crews.

    • eddie47d

      I like that you got right to the point Bob666. Its the Speculators that drive economies and can cause the rise and fall of whole sectors. I don’t trust Wall Street for too often they represent the evil side of Capitalism. I want to see businesses do good on their own not by reckless and wide eyes Speculators. They are greedy and careless as those Conservatives who insisted that everyone should throw their pensions into the Stock Market. If the markets will burst then why would anyone want to put all their eggs in one basket.

    • Right Brain Thinker

      Devil#Bob says “we have gone from an investor’s market into a speculator’s market”. Beg to differ, Bob. It has not been an “investor’s” market in the old sense for quite some time. What we have now is the 1% pumping up a bubble, convincing the ignorant to come in and “invest” (as we now see happening—the “small investor” is coming back in droves and driving this DJI increase), and then the 1% taking their profit and leaving the little guy holding the bag. The net result is always the same—-the transfer of of wealth from the 99% to the 1% and the decline of the living standard of the middle class. And it’s not really “speculation”, it’s the suckers who have swallowed the koolaid who are buying the overinflated stocks—-they truly believe that the “American Dream” still exists.

      Some numbers of interest (from the Who Rules America website)

      Wealth ownership in the USA

      The top 1% own 35% of all stocks, 64% of all financial securities, 33% of all trusts, and 61% of all business equity.

      The next 19% own 57% of all stocks and the bottom 80% own just 8% of all stocks.

      The top 1% have a mean net worth of $16 million, the top 20% (which includes the 1%) have a mean net worth of $2 million, and the group from 60 -80% have a mean net worth of $100,000 (1/10 of a million—–that’s 1/20th of the top 20% and 1/160th of the top 1% figures)

      The bottom 40% have a NEGATIVE mean net worth of ~$10,000, meaning that what they owe exceeds their assets by that much.

      PS In actuality, the top 10% of the top 1% owns most of the top 1%’s share. Something like 400 families own more than the bottom 90%, and they don’t “create jobs” with it or “invest it”—-they play financial paper games with it and just make more wealth for themselves with very little of it trickling down. The 1% have bought stocks only to run up their prices—-they will “hjde” that money somewhere else as they ride the bursting bubble—-they make money on the way up, on the way down, and when it is “flat”—-all the lawyers and accountants and lobbyists they employ and the congressmen they own make it work that way for them.

      • Bob666

        While there is some truth in what you have stated, the real problem is we as a society want Wal-Mart prices and GE wages. We want double digit growth in our 401k and IRA’s with dividends to boot.

        Twenty-plus years ago, CEO’s stayed in place for 8-12 years and ran their companies for the long haul. Today, a CEO might last two years and lives from quarter to quarter and gets his/her incentives based on stock price as well as earnings. Worse, when they fail (mostly in leadership) we give them Hugh parachutes to go away and that money comes out of the shareholder’s pocket.

        Wall street has figured out how to accommodate us-at least on paper

      • Right Brain Thinker

        Yo Bob666

        The real problem is that no one can figure out what it is that “we as a society want”, never mind how to satisfy that “want”. We are fractured and fragmented and divided. Those on the right have completely sold out—-they are no longer “conservatives” but are merely running dogs for the greedy rich. Those on the left are largely wimps and [expletive deleted] that are constitutionally incapable of fighting the extremists on the right. The media is owned by the corporations and can’t be relied on. Politics is “sold to the highest bidder”. The whole game is so rigged that we True Patriots and Real Americans may never take the country back (and I don’t mean the deluded fakers who call themselves by those names).

        I see much gloom and doom in our future.

  • Flashy

    Bob….just out of curiosity, how long have you been forecasting the End of the World as We know it? from my recollection, at least since this administration first took office. There’s also the disturbing aspect of the use of a paid subscription newsletter which, unless one commits to spending money, is difficult to verify in accuracy and substance. And, instrumental in analyzing the articles, as with Smith’s article the other day, there is no spread of sources. one is selected, and then applied across the board as gospel representing a broad sweep of opinion when, in fact, it likely is not (example, I could list several paid subscription newsletters which would be opposite of TIPP).

    This is one of the significant problems we face today. there is a problem. On one hand you have the level headed rationalists who dissect the issue and debate the differing approaches to maintain a steady ship, minimal disruption, and best policy. On the other side, there are the “Doomsdayers’ who predict time after time the End of the World, cite statistics which have little meaning, ignore the historical application of the suggested solutions (if there are any suggested…a rarity) and use as a money and/or power machine the fear, the anger, the ignorance of the many.

    For instance, your cite as to the Dollar versus Euro comparison. the date9s0 used are those of the widest swings. Fact is, the Dollar/Euro rate is almost exactly the same today as it was in April 2009. And is trending up now. I know…such is a minor ‘descrepancy’. Unintentional so to speak.

    you speak about the QE3 Fed policy. Yet, you haven’t compared that to the policies of Europe and japan as they went the other direction. Fact is…i don’t recall that ever being cited in a PLD article.

    I am not saying PLD should be a more “liberal’ site. but is it too much to ask for rational solutions and a full discussion what the effects would be economically (short and long term) when you begin to cast about numbers and dire warnings of Doomsday? The sequestration is not a “minor budget adjustment” as i believe you cited in the not to distant past. it will affect agencies harder than others, and it will have an economic disruption of anywhere from 0.5 to 1.0 % on GDP. Without the voters being informed…your job which you undertook, the Congress is deadlocked as the Doomsdayers force bad political decisions upon the Representatives and the rational world seeing what is coming down the pike unless there is a fix.

    Remember, at the time the sequestration was formulated and agreed upon by all … it was hyped as a very very bad path, which is why it was passed. It was a mechanism to force a solution because it was such a bad path to follow.

    I’m not stating PLD should change the ideological framework, but i do suggest a little less rabble rousing and adding to the problems we face, and a tad bit more positive input to solving the issues this nation faces.

    • tony newbill

      Flashy If you want a economy valued off a true supply of inflation fighting goods rather than just a Bunch of paper Money that Obama is ordering from the Federal Reserve that Last Month was Over 200 Billion Bucks fed into the economic system around the world I suggest you email President OBama and tell him to Hear My Senator on this Trade Policy issue please !!!!!!
      This next Video will tell you how the trade Policy is Controlled by the Same Elite group of Corps that Wall Street and the 2 big 2 fail banking and Federal Reserve print and feed leveraged funding into the international economic system .
      Pay attention to this story on trade with Russia , Obama said he could be more flexible after the election with Russia remember ????

    • Bob Livingston

      Dear Flashy,

      You write: “Yet, you haven’t compared that to the policies of Europe and japan as they went the other direction.” Perhaps you’d be willing to enlighten us.

      Best wishes,

  • Jim B

    What’s government got to do with it? Our government, both parties, for decades has done everything in their power to tip the markets through socialist policies and social engineering. The markets, despite this all out war on capitalism will continue to backfire on the governments house of cards. Even government austerity, Socialism’s bitter fruit, has not stopped even the PIGGS market resurgence while their politicians, and union thugs flounder over whose fault it it. Yes there is volatility, people are scared by governments, as well they should be. All governments, even ours, takes from its citizens by force, i.e. taxes, spends without business restraints i.e. budgets, and participates in crony capitalism i.e. ethanol, failed solar companies, subsidize subsidize subsidize…. Government stupidity has no bounds (poli- meaning many, tics-meaning bloodsucking creatures), but markets and true capitalism has always prevail, even if it has to go underground for short duration i.e. 2008-2010, 11. Governments all over the world are still a complete socialist mess, nothing is actually fixed, just bandaged, lipstick on a pig will not change this, but the markets don’t care anymore, that’s what the new high is telling us… government be damned.

    • tony newbill

      Jim B you are wrong about the Market saying its investing government be damned .. Its more like Please Obama Government Keep ordering the Federal Reserve to Print that Cash and send it out the Discount Window to the 2 big 2 fail so they can then turn it into a investment in the stock market to drive the hedge-funds rally is what you mean !!!!!

      • Right Brain Thinker

        Jim goes off into the “socialism did it” corner and mills around and Tony follows him and doubles down with the “O’Bama’s fault” mantra.

        Both fail to recognize that it is capitalism and free markets run amok to the point that we are now facing corporate fascism that is the real cause of our dilemma. We have let the plutocracy and corporate oligarchy buy the government and need to focus on how we can get it back.

        • tony newbill

          Obama is allowing this fascism to happen RBT with his lack of willingness to hear my Senators Plea for a hearing into the flaws in our Trade Policies that are allowing this to happen , but it fits right into Obama scheme to create the division that he needs to rally the individuals away from supporting the idea of free markets that you are right have become dominated by the plutocracy that is the only think I agree with you on !!! BUT Obama can stop it and he won’t , Listen to these guys they are as Liberal as you can get , so if you don’t agree then that makes you …. Marxist ???

        • tony newbill

          See the Idea that the USA was founded on in Capitalism was that the Federal Trade Commission was to make sure that our Resources and Industrial capability was not to be merged or consolidated more than 40 % so that free market redistribution of the wealth would serve the greater society better with innovation advancing with the desire to prosper . This has been allowed to consolidate with Trade Policy and monetary policies and a regulatory lack of enforcement of the US Constitutional provisions all treasonous acts against the will of the people . This was done under the guise of the NSSM200 memorandum .

          So today we have evolved into a Plutocracy Fascist economy that is opening up the doors of Socialism and will lead to Communism , you are right RBT . But it was all because these Elite think this is the only way to control population growth in the world and stop the deterioration of Earths Eco system . Its in their writings and Speeches !!!!

      • TML

        RBT says, “Both fail to recognize that it is capitalism and free markets run amok to the point that we are now facing corporate fascism that is the real cause of our dilemma. We have let the plutocracy and corporate oligarchy buy the government and need to focus on how we can get it back.”

        “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” – Thomas Jefferson

        Abolishing the Federal Reserve seems like a good place to start. We need a separation of Corporation/Bank and State, the same as we have the separation of Church and State.

      • Right Brain Thinker

        TML quotes something a dead white guy said 200 years ago. Not to say that TJ didn’t speak truth there, but in the here and now we need to focus on the real problem—-the private banks and the greedy rich and the twisting of the concept of capitalism and free markets into what it has become—-a way for the plutocracy and the corporate oligarchy to take over the country and bleed the 99% as they do so..

        REFORMING the Federal Reserve seems like a better place to start. “We need a separation of Corporation/Bank and State, the same as we have the separation of Church and State” is something I can pretty much agree with—it IS kind of an apples and oranges thing though, and the modern world is a lot more complicated than TJ’s, but the idea of a “wall” moves in the right direction Add to that “break up the too big to fail banks” and “impose strict regulation and oversight on all financial and commodity markets and firms”, and we’ll be on our way. Add to that, “take big money and corporations out of elections” and we’re gaining speed. Then add “limit lobbying and close the revolving doors” for another boost. TJ would approve of all of that, I’m sure.

      • TML

        RBT says, “Not to say that TJ didn’t speak truth there, but in the here and now we need to focus on the real problem—-the private banks and the greedy rich and the twisting of the concept of capitalism and free markets into what it has become…”

        Gee… that is exactly the point of posting the quotation – the real problem is the private banks. Reform of the Federal Reserve is the path to stripping (abolishing) its authority to print money without backing.

        That dead white guy’s words were rather prophetic in truth wouldn’t you agree? He is talking specifically of the distribution of wealth from the “99%” to the “1%”. It’s not a matter of today’s world being more complex (if that’s even a valid statement having not lived in that time yourself), it’s a matter of principles, and fact.

        Here’s another great quote… “In matters of style, swim like the current. In matters of principle, stand like a rock.”

        You can argue the complexity of today’s world all you like, but until you remove the power of legalized counterfeiting from the Federal Reserve (whom answers not to the people), then the corporations will continue to usurp the government because the government is indebted to those bankers and corporations. The government borrows and pays interest on what it could otherwise avoid if they (The People/Congress) didn’t hand their constitutional power over to them (the bankers and greedy rich) in 1913.

        RBT says, “TJ would approve of all of that, I’m sure.”

        I’m sure I would as well, as stated.

        P.S. Why do you insist on responding to me in the 3rd person? ;)

      • Right Brain Thinker

        TML says,
        “P.S. Why do you insist on responding to me in the 3rd person? ;)”
        I don’t really know—-sometimes I use third person, sometimes I don’t—-thinking about it, it seems to vary from person to person that I reply to, and it may be triggered by something that person says or how they say it. I don’t agonize over these comments—just whip them out, usually—-and concern myself more with content and making the points I want to make. I do just one quick proof and “send”.

        I think we generally agree on all this, with the big exception seeming to be that you want to abolish the federal reserve (period) and I want to bring it under control, i.e., put it to work for the greater good rather than the benefit of the crony capitalists.

  • STEVE E.

    When the stock market does crash in the future, I hope we don’t have to bail those fools out again. It would be like bailing someone out who has lost all his money in Vegas.

    • Right Brain Thinker

      Unfortunately, Steve, we WILL have to bail “those fools” out again, except that “those fools” are NOT fools—-they have figured out even more ways to steal our money. Goldman Sachs has just announced that they have found a clever new way to get around Dodd-Frank and continue on with the same types of bad deals they used in the past to take your money. It is not a properly termed “bail out” though, it’s really “redistribution of wealth” from the 99% to the 1% or “socialization of risk, privatization of gain”.

      • speedle

        You need to stop using the reference to the 99% vs. 1% mantra because it really obscures reality and is more or less a simple placard for simpletons (and collectivists). Your characterization of “socialization of risk and privatization of gain” is an accurate description of “crony capitalism”, and that is the almost exclusive purvey of your pals in the Obama administration. And I don’t think even you will deny that fact.

      • bxarmybraat

        The 2000 page plus Dodd/Frank bill could have been better replaced with a 1 page return to Glass Steagall.

      • Right Brain Thinker

        bxarmybraat speaks much truth with “The 2000 page plus Dodd/Frank bill could have been better replaced with a 1 page return to Glass Steagall”

        I’m not sure that we wouldn’t need some of Dodd-Frank, though—-there are lots of “new tricks” that the whiz kids on Wall Street have cooked up since Glass-Steagal that need to be specifically addressed as well. Of course, that means we’d really want to enforce D-F, which is still a question. At least G-S was pretty straight forward and not subject to much “interpretation”—-that’s why “they” wanted it repealed.

    • Right Brain Thinker

      speedle, when I use the reference to the 99% vs.1%, it is NOT a mantra. It is a simple statement of reality, at least for those who are not blinded by the endlessly repeated and long discredited talking points that come from the right. Those talking points are what are the “simple placards for simpletons”, and the mention of “collectivists” is more of the same motivated reasoning—at least you didn’t go so far as to get into the “socialist-communist” thng. You are being used as a foot soldier by the 1%, plain and simple, unless you ARE one of the 1%, in which case you may continue to spout the horsepucky because you are acting in your self interest, and that’s to be expected from a member of the greedy rich—-they are ruled by self-interest.

      My characterization of “socialization of risk and privatization of gain” is a very accurate description of one part of “crony capitalism”, the part where the “greedy rich” do in fact steal from the majority. Why can’t you address the reality of that? Why do you defend those who should not be defended?

      You say “….and that is the almost exclusive purvey of your pals in the Obama administration. And I don’t think even you will deny that fact”. First, I have no “pals” in the O’Bama administration—-I voted for O’Bama because I hope to see the country move Forward, and his program showed more chance of bringing that about than that of “the greedy rich guy who stood for nothing but the greedy rich” and wanted to take the country BACKWARDS to the days of the Robber Barons. I will tell you in a few years whether O’Bama has gotten it done or not. I have been greatly disturbed since 2008 by all the evidences of “crony capitalism” I have seen in the O’Bama administration, starting with all the Goldman Sachs “graduates” (who should be in jail), and moving on through the failures to push for stronger regulation of the financial industry and prosecute those who nearly sank the economy. The large sums taken as contribution from the “bad guys” is worrisome too, but he really had no choice—-the system is rigged that way, unfortunately—-the only question is how much “bought and paid for” resulted—-we shall see.

      And saying “exclusive purview” with regard to Democrats is laughable—-”crony capitalism” was INVENTED by Republicans, perfected by Republicans, and almost destroyed the economy under BUSH THE REPUBLICAN. The Democrats who embrace it are just playing “follow the leader”.

      • speedle

        Well RBT, I will give you credit for one thing. In a backhanded way you have admitted that BO’s administration is filled with crooks, graft and crony capitalists. While it’s true that this went on in previous administrations Obama’s people have not only made it an art form, but they don’t even make an attempt to apologize for it.

        Unfortunately you still don’t get what a misnomer the idea of the 1%ers is. Why don’t you understand that in any society there are always “haves” and “have nots”. The difference is that in an Obama utopia the “haves” are a permanent “static” class and are part of the “ruling elite”. In a capitalist society the “haves” are a dynamic class. People can be poor then rich or rich then poor all in the span of their lifetime. While these people may control much of the wealth through their business gains, they must always answer the challenge competition as well as regulatory oversight for anti competitive actions. In Obama’s utopia none of this is true. The government picks winners and losers not the free market. Follow the bouncing ball here RBT, and you will understand the foolishness of worrying about the so called 1%.

        This is exactly the reason that the USSR had to fold its cards in 1989. It simply could not compete with free market capitalism.

  • Nomad

    The government now owns most of the mortgages out there through bailing out the banks. purchasing bad loans and insuring them with their newly aquired insurance vehicle FNMA and Freddie. There was a reason they kept FNMA and Freddie alive. Not because it would have hurt the economy but it was a tool already in play. Just as with the banks. Keep them alive till the shell game is over. Buy their debt and bad choices without penalty on the tax payers back at the same time have the tax payer pay the 4 percent interest on the loans being bought and insured by the new bank, the government. That is a massive risk in itself considering the markets condition. And a danger to anybody holding a loan. Total government control. They purchase these mortgages with high interest rates with tax payer money and give you nothing in the banks.

    The new bubble is Obamas manipulation of FHA/Va loans which make them as easy to get as pre-crash conventional loans. That didn’t work before!!. Roll everything up and get in at zero down. These days You get 96.5 LTV and the new top FHA loan is 739,000!!! when i processed FHA loans the limit was 243,000!!! I guess when you print money out of thin air these days why constrain what people can afford. Let the government be the hero. Credit score below 600 no problem, only 10 percent down, which as before can be rolled up as a second. Sound familiar!!

    The stock market. Devalued dollar influence makes stock cheap. The volume does not justify the bull. Who’s in this game?? hmmm?

    The only reason the dollar is APPEARING to get stronger to the Euro is our ability to print money without obstacles. The EU is different. The US has suckered the rest of the world (Japan. China, EU, and UK) into a currency war but now the others are lossing faster than us so our dollar appears stronger. This type of strengthening is a danger sign in itself taking in all other economic factors which don’t support it.

    Trying to stop a roller coaster without breaks isn’t easy. It usually flies off the tracks and its a race to the bottom.

  • ibcamn

    Like i said in other comments,this day of reckoning you speak of,will be when the feds stop printing money….and Obama will swoop in to(as he thinks)save the day.but declaring a state of emergancy is not the way(but he will think it is),we need to stop him before.

    Boy,it’s a good thing he’s not like preparing for any civil unrest or anything!

    • tony newbill

      How Long will the stock market rally continue ?? I say until President Obama regains the House of Representatives .

      Remember that this market is being fueled by a Central Bank thats appointee is in favor for the policy maker in the white house and he wants the House of Representatives back next year so the Markets juicing the Central bank is doing will run that long I bet .

      They all Believe in the NSSM200 and are here to bring it to fruition .

  • Uknowho

    The stock market is nothing more than legalized gambling. Wall Street cares nothing for America or the long term health of any company. They only care about today, next week, next month and the current quarter.

    A stock can go up or down based on rumor. The price of oil goes up just because of what the idiot in Iran says…

    Its a sad joke that we have these schemes called 401K’s that we rely on for our retirment.

    The stock market is no indicator of how well the country is doing. Imports/exports, avg household income, Education level and quality of life are proper meters of how well this country is doing.

    • tony newbill

      I agree Uknowho , Global Valuations that are driving a Unregulated International market that Wall Street is Keying its Values off of could be Book Cooked to bring Unsuspecting Investors into the Market and then these same Book Cookers that exist Internationally that are also engaged in the US / Wall Street market can at any moment pull out their primary investments and cause a collapse in the US market , and it can be debated that this was what happened in 2007-8 that crashed everything !!!!!!

      I mean Really who is the one to trust in this Global market Scheme ? Who would you trust ???

      • Uknowho

        Absolutely correct Tony. Someone else hit it on the head… Wall Street is the Vegas of the wealthy and they are always trying to take the house… It just so happens their taking the “house” means in many cases you losing yours.

  • Tommy cunningham

    The way to fix everything is “individual liberty and responsability” limit the goverment to the Constitution, if a person or corporation make a bad decision then the burden is theirs to bare alone, no bail outs from the poorest to the richest.

    • tony newbill

      Tommy Right On !!!!

      And here is the way to serve your Country NOW !!!!!

      Sen. Paul is filibustering the Obama Administration’s appointment of John Brennan as Defense Secretary because the administration won’t disavow drone killing American citizens on US soil without due process. In fact, the attorney general Eric Holder three-times refused to answer the question whether it is constitutional for the United States to use a drone to kill an American citizen on U.S. soil, even if said citizen does not pose an “imminent [national security] threat”.
      This is unconstitutional and Sen. Paul said he’s had a enough of unconstitutional actions by this regime and will talk until he can’t do it any more.
      Will any of his colleagues step in when Paul has to quit? Flood your senators’ phone lines with that question.
      This is democracy in action, folks!
      Read more in the Washington Times. ht tp://
      Watch Senator Paul live on CSPAN here. ,

  • Peter

    This is so very true, but few are willing to recognize the naked emperor that is the western financial system.

  • Terry Bateman

    The U.S. Dollar is doing quite well despite the large increase in money supply.
    The Euro, The British Pound, and The Swiss Franc are the only currencies i know
    of that are higher than the Dollar. The Euro is headed south towards parity with the
    Dollar IF it survives. The British Pound and the Swiss Franc will fall to parity with
    the Dollar when the United States starts exporting natural gas to Britain, Europe,
    the Middle East, and Asia. The large increase in money supply went straight to
    bank’s safety reserves and cannot be loaned out. That is why the largest increase
    in money supply in history has not and never will cause significant inflation.

    The United States stock market is up because corporate earnings and cash are
    up. There will naturally be 20% corrections which should be bought like department
    store sales. Gold stocks have bottomed out now and should be bought as they will
    trade up with the stock market as it heads to 20,000 and more with the chemical,
    industrial, manufacturing, and oil and gas production globe changing expansions in
    the United States.

    The federal government’s spending problems are the only real problem since they
    will never consider eliminating uneccessary programs like Pell grants and loans
    for college and universities, food stamps, and welfare. The defense budget could
    be cut significantly with the total withdrawal from Afghanistan and Iraq and winding
    down the war on terror and it probably will be if a democrat wins the next presidential


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