December 31, 2008

2008 was one of the worst years in the history of real estate and stock markets. Big shocker, eh?

See ya 2008.

You sucked.

But oh, wait until you see 2009.

May you live in interesting times.

So, what will it be?

A) We keep crashing

B) Things settle down

C) Off to the races with 0% and trillion dollar money bombs

In historic and predictable crash, Phoenix Arizona home prices tank 41%, worst housing market in the US. But they do have pro athletes.

I just got back from a week in Phoenix.


Where do I start.

The Phoenix metro area was built on housing and commercial real estate speculation, out-of-control big-box retail, massive illegal immigration, REIC conmen, stupid urban planning, and cheap-gas sprawl. The government was run by realtors and developers, the population got caught up in speculation, debt and over-consumption, and then the entire house of cards collapsed.

The good news? Home prices and rents are crashing, making it affordable like it used to be. The illegals are going home in droves. Another Best Buy won't be built for fifty years. What's left of the desert is beautiful. The realtors and mortgage brokers have been discredited and shamed. And above all, foreigners, the banks and US taxpayers are on the hook for Phoenix's losses, not the Phoenicians themselves.

After home prices fall 50%+ and the bubble is finally washed away, Phoenix may one day rise from the ashes. They'll need to bulldoze the crap wood-framed homes and empty big-box stores, they'll need to reinvent their economy with green jobs like First Solar, and they'll need to make sure the REIC is run out of town forever.

And yes, no matter what happens, the Cardinals will still suck.
You can count on that.

Home prices continued their downward march with Phoenix leading the nation, according to the S&P/Case Shiller Home Price Indices released Tuesday.

Fourteen of 20 major markets recorded the worst price drops ever for single family homes with double digit declines between October 2007 and October 2008. But Phoenix fared the worst by far, with a one-year depreciation of nearly 33 percent.

According to a Standard & Poor’s news release, “Phoenix remains the weakest market, reporting an annual decline of 32.7 percent, followed by Las Vegas, down 31.7 percent, and San Francisco down 31 percent.”

Other markets with housing price declines in excess of 25 percent were Miami, Los Angeles and San Diego.


Whew. That was a close one. Just when you thought it had all gone to heck, trillions more would be lost, millions more would lose their jobs...

Let's hear it for the diners at Natick Mall in Massachusetts for saving the world financial system. Who'd have thunk that Vietnamese Shrimp Summer Rolls and Buffalo Blasts could save the world and stop this historic crash?

Isn't it about time to take Bernie Madoff out to the public square and flog him?

A lifetime of jail just isn't enough punishment for people like Madoff.

I think it's time to bring back public humiliation.

It's especially galling to think of him in his luxury NYC apartment, eating bon bon's and watching satellite TV, instead of freezing in a cold dark cell where he should be.

Anyone want to bet he never sees a day in jail?

Gold is now at the point where it will blow through resistance, or head back south. Which will it be?

Will 0% interest rates and trillion dollar money bombs destroy the dollar, unleash inflation, and send gold to the moon?

Or will gold sell-off as jewelry demand plummets, the dollar holds its ground, and deflation continues to rage?

If it powers through resistance, take note. If it sells off, take note too.

And of course, get popcorn.

December 30, 2008

Historians will have a field day with 2008, and it ain't over yet.

December 28, 2008

Tick... Tick... Tick...

Inflation - deflation - inflation. Crash - recovery - bigger crash?

Many here are in the inflation - then deflation - then inflation camp.

I think many are now gelling around the crash - recovery - even bigger crash idea.

What will it be? And is buy-and-hold dead?

And what's this S&P 500 double-bubble stock chart trend called? The "Pam Anderson"?

Shares traders and investors have one more solid quarter, in our view to regain some stock market losses on the forthcoming Obama Trillion Dollar handouts. We think the rising share markets will help most all sectors gain some recovery and provide the illusion the bottoms are in and new bases found.

The stark reality hits home after shares peak in April or early May taking an unprecedented selling high dive scaring the wits out of Americans and the watching world.

Even with these events and rising unemployment and social problems, economic observers and analysts could continue to plead the worst is over, the bottoms are in and a fine, new, shiny world of trading and investing in our bright economy lies just ahead for the fall of 2009. Then, in later September and early October, the New York, London, Tokyo and Asian markets take a monster crash.

How low is low and how bad can it get? We think the Dow could end-up on November 1st, 2009 anywhere from 5,600 to a low of 3,000 or even 1,500. One guideline will be a falling overshoot of PE's on our largest, so-called international corporations posting lows of 4 to7. Today, many of them are near 18. What does this tell us about the severity of our projections?

Unemployment nationally in the USA is now touching 16%. The officially posted number is somewhere near half of that. By the fall of 2009, American REAL UNEMPLOYMENT WILL BE NEAR THE ALLTIME 1930'S DEPRESSION HIGH OF 25% UNEMPLOYED.

The reset button

Dinosaurs saw it once

Monkeys may live long enough to see it too

(if they don't hit the button themselves)

December 27, 2008

With oil prices having crashed 75% in six months, how f*cked is Iran?

And Venezuela.

And Russia.

And the UAE.

And Mexico.

And ....?

David Lereah finally admits that he was a paid liar, sent out by the evil National Association of realtors to deceive and ruin lives

The NAR should be banned, broken up under RICO and Robinson-Patman. They are evil, they are directly responsible for the ongoing worldwide financial collapse, they have been exposed, and they should be destroyed.

Former real estate bull admits, “I spun”

As chief economist for the National Association of Realtors, David Lereah was famously optimistic. Now a private consultant, he’s abandoned what he calls the “positive spin.”

Q: Were you wrong to be so bullish?

A: I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right inline with most forecasts. The difference was that I put a positive spin on it It was easy to do during boom times, harder when times weren’t good. I never thought the whole national real estate market would burst.

Q: The NAR’s latest forecast calls for a slight increase in home prices next year. Thoughts?

A: My views are quite different now. I’m pretty bearish and have been for the past year and a half. Home prices will continue to drop. I think we’ll see a very modest recovery in sales activity in 2009. But we’ve still got excess inventories, a bad economy and a credit crunch that will push prices down further, another 5% to 10% more. It’ll take a long time to get back to the peak prices we saw in many markets.

Q: Any regrets?

A: I would not have done anything different. But I was a public spokesman writing about housing having a good future. I was wrong. I have to take responsibility for that.

Don't forget, you're all just a bunch of monkeys too

Monkeys with credit cards, CDO's, guns, strange religious beliefs, beer and music.

Silly monkeys. Many who still refuse to acknowledge their monkeyness.

December 26, 2008

"None of the crops will grow. Most of the people will have died, and the rest of us will be cannibals"

"We'll have eight degrees -- we'll be eight degrees hotter in 10 -- not 10, but in 30 or 40 years. And basically none of the crops will grow. Most of the people will have died, and the rest of us will be cannibals.

"Civilization will have broken down. The few people left will be living in a failed state like Somalia or Sudan, and living conditions will be intolerable.

"The droughts will be so bad, there will be no more corn growing. It will -- not doing it is suicide. Just like dropping bombs on each other, nuclear weapons, is suicide. So, we've got to stop doing the two suicidal things, which are hanging on to our nuclear weapons, and then after that we've got to stabilize the population."

- Ted Turner on global warming, 2008

Devalue the dollar overnight, end the crisis - and unleash inflation

Most of us think we can get out of dollars gradually, when the time comes.

But that 'time' may come with no warning folks.

You could wake up one day to the news that your savings have been devalued, all so that housing gamblers can be made whole.

Desperate times call have usually called for desperate measures. Let's see how desperate we truly are.

Dollar Devaluation To Fix The Great Recession

Frank Beck, Forbes

A quick dollar devaluation would work wonders for submerged borrowers. Don't kid yourself: It could happen.

World currencies should be devalued overnight.

It can be done on a country-by-country basis, but a coordinated devaluation would work best. A devaluation of 30% would raise the dollar value of all assets by 43%. A $200,000 home with a $230,000 mortgage would become a $286,000 home with the same mortgage. Presto!

The homeowner who was $30,000 upside-down now has $56,000 equity and a good reason to make his payments. Both the homeowner and the bank are immediately better-off.

December 25, 2008

Soot and Ashes Quote of the Day

"If people look only to their own interests, our world will certainly fall apart."

- Pope Benedict XVI, draped in gold and surrounded by the trappings of extreme horded wealth, commenting on selfishness and greed, December 25, 2008

"I'll have a blue Christmas without you.. I'll be so blue just thinking about you"

Ill have a blue christmas without you
Ill be so blue just thinking about you
Decorations of red on a green christmas tree
Wont be the same dear, if youre not here with me

And when those blue snowflakes start falling
Thats when those blue memories start calling
Youll be doin all right, with your christmas of white
But Ill have a blue, blue blue blue christmas

Merry Christmas from two Dicks

December 23, 2008

Are the across-the-board salary cuts coming?

Here's the choice:

A) Keep your job, but 40% pay cut


B) Set of steak knives and the door

The prices you're seeing for commodities today will seem shocking a few years from now. Shocking.

And the US should be out buying up everything it can.

Especially oil.

Wars will soon be fought over commodities, even though they're being given away at fire-sale prices today.

And even though it doesn't look like it, THIS is when the serious money is being made.

Buy low, sell high, and may you live in interesting times.

All comin' together now for ya?

December 22, 2008

Isn't it time for America to be America again?

In America:

* We arrest our criminals
* We respect the rule of law
* We know our neighbors and lend them a hand
* We embrace and trust science, scientists and knowledge
* We want better lives for our children
* We grow our own food and have plenty more for others
* We innovate, create, invent and inspire
* We mock ignorance and call it by its name
* We are guardians of the environmental health of our planet
* We respect others' choice of religion or lifestyle
* We separate church and state
* We do not torture. Never. Ever.
* We don't live beyond our means, and we save for a rainy day
* We don't pick people off the streets and hide them in secret prisons
* We don't spy on our people without warrants
* We believe "life, liberty and the pursuit of happiness" trumps all
* We are respected, admired and trusted around the world
* We are that shining city on a hill

In addition:

* Our leaders in DC answer to the people
* Our banks are sound, well-capitalized, well-regulated and trusted
* Our markets are free, but they are sternly and competently looked after
* Our schools produce the best and brightest bar none
* Our borders are secure and impregnable
* Our country is open to those who would legally like to come
* Our infrastructure is the best in the world
* Our people are good, kind and gentle
* Our nation is proud but humble
* Our purpose is good

I am truly sickened of what became of America these past 20 years, after three failed presidencies and one truly corrupt and incompetent Federal Reserve. Not only have the United States' institutions and leaders failed America, but Americans have failed America as well.

2009 can be the first year of our long renewal. Or it can be just another year down the path of decay and destruction.

You yourself can be a force for change and good, in whatever way you choose. Or you can give up like so many others.

Our leaders and people put us on a path of ruin, but the concept of America is still a good one. I want to see America be America again. Because this new one sure sucked.

Now that there's no question we've hit the brink, let's see which way this goes.

I'd bet on America.

December 21, 2008


What does December 31, 2009 look like? What will have passed?

If you look back at HP's annual prediction threads, you'd be freaked out.

We're good.

So have at it - what's December 31, 2009 look like?

* Housing
* Stocks
* Dollar
* Arrests
* Gold
* Black swans

My belief?

2009 will be one of the most historic, shocking and eventful years in modern history.

May you live in interesting times.

"People should not be afraid of their governments. Governments should be afraid of their people."

At one point, around the world, country by country, people will have had enough.

The bankers and their corrupt and incompetent government stooges made away with the people's treasure, wrecked their industries and destroyed their currencies.

And so then, the people will rise up.

Peacefully at first.

And then in places where the ballot box is fixed or denied, not so peacefully.

Yes, the people, unemployed, increasingly broke, hungry, cold, desperate and pissed, will rise up.

It's already starting.

It hath been foretold.

What country is next?

Jim Rogers has a few ideas about 2009 and beyond

Anyone taking Chinese lessons?

Got commodities?

December 20, 2008

Can you believe we've come to this?

I mean, really, can you believe it all really happened?

Just as many of you predicted for years it would...

Kinda spooky, eh?

Here's the list. I probably forgot some. Have at it...

* Global housing crash
* Global financial meltdown
* Stock market crash
* Dollar destruction
* Massive government bailouts and stimuli
* Indymac, Countrywide, WaMu, Fannie, Freddie, Lehman, Goldman, GM, ...
* Obama victory / GOP destruction
* Gold
* realtors humiliated, NAR discredited, homebuilders destroyed
* Illegals out of work and going home
* MSM no longer trusted or respected
* Mortgage brokers unemployed, never to return
* Inflation/Deflation/Inflation
* OilPANIC. RicePANIC. IcelandPANIC.
* State and local government budget disasters
* Mass layoffs
* Change of collective consciousness on debt, savings, housing, consumption and trust
* Fraud
* Hedge fund blowups

What's still missing or to come?

* Arrests and trials
* Hyperinflation
* Riots and social disorder
* Crime
* Government failures and coups
* Resource wars
* Congressional investigations
* New regulations
* Breakup of the NAR/MLS
* Recovery?

Is it illegal to call for the assassination of a foreign leader?

Sure would be nice if the world had a United Nations.

Sure would be nice if Africa looked after their own.

Sure would be nice if the US didn't have to be the world's policeman and savior.

Sure would be nice if people would kill or imprison their own corrupt leaders.

Hyperinflation and dollar destruction - it hath been foretold

I would like to meet one of the fools lending money to the US for 30 years at 2.5%

I would like to meet one of the fools selling everything in order to accumulate US dollars.

I'm not sure what was a more stupid mania - the housing bubble, or this brief rush to US dollars and debt.

Bernanke told you what he was going to do, and now he's doing it. Inflation, then deflation, then hyperinflation.

It hath been foretold.

May you live in interesting times.

"This is an American-made crisis magnified by U.S. incompetence"

"The rest of the world has very good cause to be angry with the United States. This is an American-made crisis magnified by U.S. incompetence. Bush and Paulson will leave office in disgrace."

- Economist David Hale, December 2008

December 19, 2008

Uh, Gov, they got you on tape. Now get the f*ck out. And take that thing off your head - you're scaring the children.

Man, it's easy to hate American politicians these days.

And what's that animal sitting on this guy's head? I can't figure it out.

Doesn't it amaze you that in a country full of religious crazies, unapologetic racists, undereducated dolts and evolution-denying ignoramuses....

That THIS guy somehow won the presidency?

Man, that economic crash must have been REALLY bad.

Otherwise, there's NO WAY they give this dude the wheel.

32 more days...

Mortgage rates are at historic lows, home prices have crashed 30% to 50% in most areas, and it's STILL not time to buy?

Man, what will it take?

0% financing and 90% off sales?

A $10,000 tax credit from the government?

a free pizza?

Seriously, anyone getting tempted to go buy a home?

Mortgage Rate Hits 37-Year Low

The benchmark 30-year fixed-rate home mortgage in the U.S. fell to a national average of 5.17% this week, the lowest since Freddie Mac began its weekly rate survey in 1971.

With the Federal Reserve cutting its interest rates to near 0% and a continued decline in rates on the long-term Treasury notes that mortgages closely track, rates on other types of mortgages dropped again, though not as much as the 30-year.

Oil has crashed from $140 down to $40 a barrel. Oil companies with proven reserves are cheap. So shouldn't the US be buying it all up - FAST?

Remember just a few weeks ago when people were clamoring for the US to release oil from the strategic reserve?

Remember predictions of $200 a barrel by year-end?

Remember peak oil?



As the market goes crazy - to the downside - a smart country would take advantage. Because this won't last.

Here's some more thoughts on oil

1) The US should triple the size of the strategic reserve as fast as it can, and fill the sucker up with cheap oil

2) Any company involved in transportation should be out buying up cheap oil hedges for the next five years

3) Congress should send cake and pie and an apology to the US oil company CEOs they stupidly eviscerated just a few weeks ago for "gouging"

4) US oil companies should deploy their cash as fast as they can and buy up beaten-down energy companies around the world. Go buy stakes in Lukoil and Gazprom. Go buy Petrobrasil. Go buy solar companies and wind companies. Go buy everything you can.

5) The US should impose an immediate $1 a gallon gas tax to pay for new roads and bridges

6) Change the world. Add 1 MPG to the fuel efficiency standard every year for 20 years. Ban the sale of gasoline-powered cars by 2030.

I could go on. This is simply the last-in-your-lifetime opportunity when it comes to oil. It will never, ever be cheap again.


Wars will be fought over oil in the near future. Oil panics will set in. Suburbs will be razed. Lifestyles will change. Gas-powered cars will be banned. Industrial production will be jeopardized. And then one day, it is a mathematical certainty, the world will run out of oil.

It hath been foretold.

Schiff on the "phony economy", the upcoming California bailout, hedge fund liquidation, and what's ahead for the dollar, gold and commodities

There's been a temporary a and short-lived spike in the US dollar as people and funds around the world liquidated.

It won't last.

And there's been a collapse in US-dollar denominated metals and commodities. Even though gold (which is money) has held up nicely - and actually skyrocketed in foreign currencies.

Don't get fooled by short-term stuff. Think about where we've been, and where we're heading. And get ready, before everyone else figures it out.

December 18, 2008

Here's the list of countries and conmen that tried to buy President Hillary Clinton (if she would have won)

This, folks, is freaking sick.

Bill and Hillary Clinton should be in jail.

And America is a corrupt third-world country, sold to the highest bidder, now paying the price.

Donors who have contributed between $10 million–$25 million:

Kingdom of Saudi Arabia: The royal family wants to remain a loyal U.S. ally, and keep their image clean. The Saudis give to every former president’s library or foundation, so this is a regular part of doing business for them.

Donors who have contributed between $1 million–$5 million:

Sheikh Mohammed H. Al-Amoudi: An Ethiopian-born Saudi businessman whose businesses extend from oil and gas to gold. He made his first fortune in construction and real estate before branching out into buying oil refineries in Sweden and Morocco. Today he is reportedly one the largest foreign investors in both Sweden, where he was honoured with the Royal Swedish Order of the North Star by King Carl XVI — and his native Ethiopia, where he bankrolls the national soccer team.

Nasser Al-Rashid: A 69 year old Saudi businessman. Chairman of Rashid Engineering, he is described in a biography listed at University of Texas, his alma mater, as an engineering consultant to Saudi King Fahd and the Saudi royal court. He received a Ph.D. from UT in engineering, and has built the Dr. Nasser Al-Rashid Strength and Training Center there. According to the UT Web site, Rashid Engineering was grossing over $2 billion a year by 1980, and had become the kingdom’s largest engineering firm, designing more than 100 major projects. Rashid’s corporate Web site says that the firm designed the Riyadh-Dammam highway, the road that leads from the Saudi capital to the oil-rich region in the eastern half of the kingdom; the governorate and administrative offices in Saudi’s oil rich Eastern Province and the King Fahd Holy Koran Printing Complex, the major Saudi religious text book publisher.

Gilbert R. Chagoury: A Lebanese Christian businessman with an industrial fortune in Nigeria. The Chagoury Group has become one of the leading Africa based corporations in Nigeria, with manufacturing, construction, industrial, hotels and high technology companies

Dubai Foundation: Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai, set up this $10 billion foundation in May 2007 to improve the standard of education and research and to stimulate job creation in the Middle East. It is unclear how donations to the Clinton foundation help spur those objectives. But Sheikh Mohammed is also the majority owner of most of the major Dubai companies, like Dubai Ports World, the port manager that became embroiled in the congressional battle and ultimately was prevented from taking over management of various US ports in 2005. DP World’s parent company Dubai World owns significant stakes in gambling and hospitality industries as well as real estate projects in Los Vegas and Los Angeles. Clinton has business interests with Dubai together with Ron Burkle.

Mr. Issam M. Fares & The Wedge Foundation: He is the deputy prime minister of Lebanon and an international financier. Fares heads a broad collection of banks, factories, and companies in the Middle East, Europe and the United States through the Wedge Group, an investment firm based in the United States. This is all according to his personal Web site. Among his Wedge Group holdings: the Food Corporation International, an American exporter of staples such as rice; and Ballast-Nedam, the largest Dutch construction company.

Friends of Saudi Arabia: This is a U.S. based non-profit. The group is made up of former diplomats and U.S. businessmen with interests in Saudi Arabia. Officially, they say that they work to address cultural and educational links between Saudi Arabia and the U.S. Their major objective is to massage the image of the Kingdom and the portrayal of Muslims and Islam within the U.S. and its media outlets. Funding comes from the Saudi royal family.

State of Kuwait: The Kuwait royal family. Eternal gratitude for saving their country is a big enough reason to give to every former president. No outstanding foreign policy issues that butt up against U.S. interests or goals. The Kuwaiti sovereign wealth fund has massive U.S. investments, in the financial sector and elsewhere.

State of Qatar: The Qatari royal family. Qatar is host to two U.S. military bases, and the country is a very close Gulf ally.

The Sultanate of Oman: The Omani ruler is the big defense client of the U.S. It also has a free trade agreement with the U.S that was signed during the Bush administration. Oman is not a big player in regional or foreign policy issues, so unclear what direct issue they would be gunning for in exchange for the donation. In the Gulf, if one royal family gets wind that another is giving a gift, they have to match to save face. That’s one reason why we could have Kuwait, Qatar, Oman and the U.A.E all in the same monetary bracket.

The Zayed Family: This is the ruling family of Abu Dhabi and the U.A.E. Abu Dhabi is the real power of the country, the silent, deep-pocketed rulers to Dubai’s nouveau riche brashness. Dubai can form its own trade policies, but Abu Dhabi controls national policy. The U.A.E is currently negotiating to buy a reported $9 billion in U.S. missile defense technology. The Pentagon is on board, but it is possibly contentious from Israel’s point of view. Additionally, the U.A.E is looking to sign a nuclear cooperation agreement with the U.S., something that members of Congress are already looking to spoil due to concerns about the U.A.E’s close trade relationship– and lax banking and trade regulations–with Iran. Additionally, the Abu Dhabi sovereign wealth funds have major investment interests in the U.S., including in Citigroup and General Electric.

Dick Cheney admits he ordered the code red: Now facing criminal prosecution and arrest on foreign soil unless Bush pardons him (as expected)

So Dick Cheney put it out there for all to see - he has now admitted he ordered the torture of people he determined to be "enemy combatants".

Why the admission?

So that his co-conspirator Bush is forced to pardon him in a few days.

Which, of course, he will.

And yes, this is sick. Sick, sick, sick.

First we had Bush illegally order Scooter Libby to illegally leak the name of a CIA spy for political reasons - and then he set Libby free.

And then we had Cheney, likely at Bush's urging, illegally order torture. And illegal wiretaps too.

And then Bush, of course, will pardon Cheney.

So, what does that leave?

If Libby and Cheney (and all the other people Bush is about to pardon) cannot be prosecuted for their crimes, what are we to do to get some form of justice?

The United States must threaten to investigate and prosecute George W. Bush.

The one and only way to prevent Bush from pardoning everyone involved in the lawlessness of this administration would be for President-Elect Obama to tell Bush, right now, publicly, that if he dares pardon Cheney, Rumsfeld, Meyers, Gonzalez or any of his administration or fellow co-conspirators, then Obama will not pardon or impede the investigation of Bush.
Otherwise, Bush will do his dirty deed.

Within days.

Cheney Taunts Bush, Pardon Me or Else

With his ABC interview Vice President Dick Cheney put a smoking gun on the table. He admitted that he, along with other top administration officials, personally approved the CIA's waterboarding of prisoners. That he said it unapologetically is merely his low-keyed way of declaring open war.

Here's 13 points for the bull case for stocks. Go ahead, shoot this down... if you can

1) Massive drop in gas prices = hundreds of billions more available to spend (or invest)

2) Big drop in price for nearly all commodities and consumer goods

3) Massive and historic stimulus by the Fed

4) $1 trillion money bomb on the way from Obama

5) Bad if not horrific news now priced in

6) Massive layoffs = companies getting lean

7) Nearly everyone is a bear and thinks a Great Depression or worse is on the way

8) Mortgage rates at historic lows - refis lowering monthly payments with some likely taking cash out

9) Stocks going back up = new self-perpetuating wealth effect

10) Huge Obama approval rating, world peace breaking out, Iraq war ending

11) Hedge fund liquidations almost over

12) Bush, Paulson and Cox nearly gone

13) Huge piles of depreciating dollars sitting on the sidelines with no other place to go

OK, that's doing my best with my sunshine hat on.

So, have we hit bottom?

Soot and Ashes Quote of the Day

"It was almost like you were getting let into the club of investors, and everybody wanted to be in. He was like, `Oh, wow! You've got a Madoff account.'"

- Palm Beach Accountant Richard Rampell, on the biggest Ponzi Scheme at the Palm Beach Country Club, December 2008

December 17, 2008

We knew all of this three years ago. But here's 60 minutes, doing what the MSM does best - doing their job after it's too late

Too bad we didn't have investigative journalists in America these past few years. Because REAL reporters would have LOVED to uncover a mess like the one we're in now.

Soot and Ashes Serious Question of the Day

If you agree with me (and Ben Bernanke) that the United States is intentionally devaluing the US dollar, but you don't want to put your money into equities of potentially failing or corrupt companies or funds, what are some of the best things into which to move your devaluing dollars?

And then Chris Cox, the incompetent head of the SEC, threw the SEC under the bus (while taking no blame himself, being the piece of sh*t he is)

"I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them"

- SEC head Christopher Cox, one of the most destructive human beings of all time, speaking on his incompetent organization's almost surreal abdication of duty in investigating the $50 billion Madoff Ponzi Scheme, December 16, 2008

"The U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars"

I will keep printing this quote until it finally clicks with all of you.

I'm just trying to help.

"U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.

"By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services"

-Ben Bernanke, talking about the helicopters, November 2002

December 16, 2008










When Bernanke announces his news today, remember what he said on November 21, 2002. It hath been foretold.


FLASH: Fed Cuts Target for Key Rate to Record Low, Pledges to Use All Available Tools

Remarks by Governor Ben S. Bernanke
Before the National Economists Club, Washington, D.C.
November 21, 2002
Deflation: Making Sure "It" Doesn't Happen Here

Curing Deflation

Let me start with some general observations about monetary policy at the zero bound, sweeping under the rug for the moment some technical and operational issues.

As I have mentioned, some observers have concluded that when the central bank's policy rate falls to zero--its practical minimum--monetary policy loses its ability to further stimulate aggregate demand and the economy. At a broad conceptual level, and in my view in practice as well, this conclusion is clearly mistaken. Indeed, under a fiat (that is, paper) money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero.

The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning. A little parable may prove useful: Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

Celebrate, good times, come on?

Time to put on the gold lame and join the Bernanke asset bubble party?

Time to write songs about The Great Reflation and Dollar Destruction?

Time to get the party back on, with spiked punchbowls for everyone?

How are the restaurants doing by you?

In my local village, empty.

Indian places - empty
Thai places - empty
Italian places - empty
French places - empty
Lebanese places - empty

The only exception? Burger King. McDonald's. Pizza Hut. They're heaving.

People still gotta eat. They just trade down to crap.

Want to get in on the Muntadhar al-Zaidi "throw your shoes at Bush" action? Here's how...

Since you can't pelt him in person, if you're so inclined, fling some shoes at Bush here. Hopefully some good smelly old dirty ones:

George W. Bush Presidential Library
c/o SMU
6425 Boaz Lane
Dallas TX 75205

Maybe add a nice personal note.

It's the least you can do.

And a side note. I believe you witnessed the end of the Iraq war on Sunday, as the first shoe was in the air. This one moment finally united all Iraqis - Sunni, Shiite and Kurd.

Get out America. Time to go home. It's their country now.

December 15, 2008

Soot and Ashes Serious Question of the Day

Will anyone ever trust American bankers, politicians, ratings agencies, reporters, auditors or regulators again?

Will you?

Anyone seen my shoes?

Is all trust in the US Securities and Exchange Commission, and it's completely incompetent head Chris Cox, now gone?

It's one thing to be able to conduct a $50 billion Ponzi Scheme in America. I mean, that's pretty rich.

But it's another thing for the SEC to let it go on. And on. And on. And on.

After ENRON, you'd have thought the SEC would have learned. But instead, they just got worse.

America is run by monkeys, trust is now gone, and our reputation is worth sh*t. No investment should be trusted in this environment. Especially investments in America. When it comes to finance, we are now a third world country at best.

Thank you Chris Cox.


Someone throw some shoes at this guy, OK?

Madoff ‘Tragedy’ Said to Have Escaped Scrutiny by SEC

Dec. 15 (Bloomberg) -- U.S. regulators never inspected Bernard Madoff’s investment advisory business, alleged to be a Ponzi scheme that cost investors $50 billion, after he subjected it to oversight two years ago, people familiar with the case said.

The Securities and Exchange Commission hadn’t examined Madoff’s books since he registered the unit with the agency in September 2006, two people said, declining to be identified because the reviews aren’t public. The SEC tries to inspect advisers at least every five years and to scrutinize newly registered firms in their first year, former agency officials and securities lawyers said.

Madoff, 70, who had advised the SEC how to regulate markets and donated regularly to politicians, was arrested Dec. 11 and charged with operating what he told his sons was a long-running Ponzi scheme in the New York-based firm’s business advising rich people, hedge funds and institutions. His ability to avoid detection may fuel debate about the SEC’s effectiveness and the adequacy of its resources for policing money managers.

“Given what the SEC claims is the magnitude of the fraud, this is something you would hope an inspection would have uncovered,” said Mercer Bullard, a University of Mississippi law professor and former mutual-fund attorney at the SEC. “It’s hard to imagine a fraud of this alleged size not being accompanied by significant and pervasive compliance problems.”

December 14, 2008

"This is a goodbye kiss from the Iraqi people, dog. This is from the widows, the orphans and those who were killed in Iraq"

[UPDATE] - For the record, Muntazer al-Zaidi, the Iraqi shoe-thrower, is now on my list of personal heroes. His bravery and selflessness should be celebrated around the world, especially in the United States.

It took an Iraqi, through an act of defiant and peaceful protest, to show America how to stand up to a corrupt and incompetent leader.

I hope this is the first in a long and unending series of footwear aimed at George W. Bush. A Traitor To His Nation. The Worst President Ever.


Looks like someone's in for a little waterboarding tonight...

And for some background, for those of you unfamiliar with this gesture of utter contempt:

In the Arab world, shoe flinging is a gesture of extreme disrespect. A notable occurrence of this gesture happened in Baghdad, Iraq in 2003. When U.S. forces pulled down a giant statue of Saddam Hussein during the 2003 invasion of Iraq, many Iraqi detractors of Hussein threw their shoes at the fallen statue.

This may be an ancient gesture from the Middle East; Psalms 60:8, speaking of some of the traditional enemies of Judah, says that "Moab is my washpot; over Edom will I cast out my shoe...." (KJV)

The shoe represents the lowest part of the body (the foot) and displaying or throwing a shoe at someone or something in Arab cultures denotes that the person or thing is "beneath them." Showing the bottom of one's feet or shoes (for example, putting one's feet up on a table or desk) in Arab cultures is considered an extreme insult. Examples include Iraqi citizens smacking torn-down posters of Saddam Hussein with their shoes, and the depiction of President of the United States George H. W. Bush on a tile mosaic of the floor of the Al-Rashid Hotel's lobby, forcing all visitors entering the hotel to walk on Bush's face to enter the hotel.

During President George W. Bush's surprise visit to Iraq in December 2008, an Iraqi man threw shoes at him during a press conference with Iraqi Prime Minister Nouri Kamel al-Maliki.[1]

December 13, 2008

History will be brutal. No matter how much he tries to spin it as he slithers out of office.

Not only will history will be brutal, but I hope Bush is hounded until the day he dies for the destruction he brought to America and to the world.

He should be shouted down anytime he tries to speak. He should be vigorously protested whenever he comes out of his cave. He and Cheney both.

History will not be kind. And neither should the American people.

Paybacks are a bitch.

"I can tell you who is not a homeowner. It is not someone who paid zero down and ridiculously low payments for two years; that my friend, is a renter"

If that quote doesn't about sum it up, I don't know what does.




And people who put zero or little down are not losing 'their' homes. They're being asked to leave the bank's home. So that they can go rent something, like they should have been the whole time. You know, before they became housing gamblers.

In August 2006 I sent this letter to Senator Chris Dodd, who ended up being on the take from Angelo Mozilo, asking for a Senate REIC investigation...

And of course, he did nothing. Hell, I didn't even get a response.

And now, in part because of Chris Dodd, the world's financial system has imploded.

He could have listened.

He could have done something.

He could have stopped the fraud, the corruption and the gambling.

And he didn't.

Because he was on the take. He is corrupt, he is a pig, he should be investigated, and he should be arrested, along with Mozilo and the rest of his 'friends'.

But of course, that won't happen. Because your leaders are on the take, and the REIC is too powerful.

And now the world pays the price.

An open letter to Congress to call hearings on the corruption within the Real Estate Industrial Complex - please send to your Congressman

Dear Sir;

I am calling on you to initiate hearings in regards to the corruption prevalent within the Real Estate Industrial Complex. Many of these fraudulent and corrupt practices have led to the housing bubble, and now housing collapse. Initial points of investigation should include:

* Corrupt appraisers being paid off or promised future business in return for "making the numbers work"

* Mortgage brokers kicking back realtors when recommending their services

* Developers who gave money to bogus charities, who gave the money to new homebuyers to in order to purchase homes from those very developers

* Realtors steering clients to homes and developers where they were being paid bonus commissions or kickbacks, and not disclosing this to the buyer

* Rampant mortgage fraud, underwritten by firms who knew the applicant was unqualified, knowing that the loan was to be held by an unsuspecting third party or commoditized

* Deception practiced by the National Association of Realtors, promoting homeownership when they knew prices were declining and unsold inventory was skyrocketing

* Insider stock sale transactions by Bob Toll and others, dumping their shares at the peak while cheerleading their stock and prospects to the public, knowing the market was deteriorating, cancellations skyrocketing and their stock price and business model soon to decline

* Fannie Mae and Freddie Mac cooking the books and running out of control, imperiling the US financial system

* Congressmen taking outright bribes and campaign funding from the Real Estate Industrial Complex to "look the other way"

* The impact of misguided tax policy (cap gains tax exclusion for home sales) and policy ("ownership society" encouraging people who could not afford houses to buy at the peak) on the housing bubble

* The actions of the Fed and ultra-loose Fed policy in creating the bubble, including Greenspan's recommendation in front of Congress for people to get into ARM loans right before he began raising interest rates.

The population will be in full panic mode soon as the Housing Ponzi Scheme collapses. It is your duty to protect the American people from this ever happening again, by cleaning up the Real Estate Industrial Complex as you helped to with the corrupt Analyst / Investment Banking relationships, and corporate systemic fraud and deception during the dot-com bubble and bust.

Thank you

Do you understand yet that the United States will likely have a budget deficit of $2 trillion NEXT YEAR. And that the year after that might be more?

Let that sink in.

A couple hundred years, we did pretty OK.

And then....





At the same time a $1 trillion plus stimulus is being discussed, a gaping hole in government receipts is going to open up as businesses and individuals make less money and pay less taxes. Significantly less. Added to the $500 billion plus structural deficits we were running anyway.

Thank you George Bush. Thank you Ted Stevens. Thank you Harry Reid. Thank you Nancy Pelosi.

You fu*ked us all.

And anyone buying up US debt in this environment might be the biggest fool of all.

December 12, 2008

Soot and Ashes Quote of the Year Nominee

"Short, f*cking, everything!"

HP'er Tyrone, offering in three words what would become the best investment advice of the year, January 28, 2008

Well, even after everything falls apart, we'll still have the internet to keep us entertained. Right?

I mean, they can't turn off the internet, can they?

On December 31, 2007, I asked HP'ers for their 2008 predictions. Here were some gems...

Nimesh Patel said...

My prediction for 2008 is that the real estate market will recover and our stock market will go through another bull run after it hits a low of 12000. America is the wealthiest country in the whole world. Despite the recent subprime mortgage fallout, foreigners will continue to trust us.

born to lose said...

2008 - 2010 will be the toughest times since the seventies.

Three_Mile_Island said...

Fed rate 1%
Gold new highs
Oil new highs

decaffeinated said...

- At least one major US bank that is not Countrywide will teeter on the brink of insolvency, forcing a Congressional bailout. I'm thinking WaMu, but the rot at Citi seems pervasive as well.

- WaMu's stock price will flirt with $5/share.

- Gold will top out at $975/oz, silver at $18/oz.

- The Dems will take the presidency and retain both houses of Congress. Republicans will piss themselves.

TM said...

My prediction for 2008 is that house prices will continue their slide, home loan, auto loan and credit card defaults will continue to rise, and 401k funds will continue to be raided.

Most importantly, I think the credit crunch will worsen, and will prompt a full-scale bailout of banks by the government.

Andrew from Russia said...

A Black Swan Year, and perhaps the first glimpse of post-consumerist economy.

keith said...

If Bloomberg doesn't run, Obama is the next President

On housing, US median price falls 10% in 2008

On stocks, no idea on the averages, but watch for builders, banks, lenders and investment houses to fail and merge. CFC, IMB and WM are first up

Anonymous said...

I predict we have an economic collapse of gigantic proportions. Men, women and children will all be homeless and there will be no food. People will have riots over food. Gold will go up to $10,000,000 per ounce and keep going up. Keith and all of the other HP'ers will be happy hiding in their mama's basement eating crackers and canned foods while the rest of America suffers.

Thanks for playing. You're no longer needed. Goodbye.

December 11, 2008

United States Senator Jim DeMint: "We're going to have riots." Ruh-Roh.

“We’re going to have riots. There are already people rioting because they’re losing their jobs when everybody else is being bailed out. The fairness of it becomes more and more evident as we go along.

"The auto companies may be hurting, but there are very few companies that aren’t hurting and they’re going to hurt. We don’t have enough money to bail everyone out.

“If you look at where we’re going, we’re not on a sustainable course as a country”

- Sen. Jim DeMint, R-S.C., accidentally telling the truth, December 11, 2008


"The world is not going back to normal after the
magnitude of what they have done"

Greek-inspired demonstrations spread

MADRID, Spain (AP) — As Greece suffered through its sixth day of violence Thursday, there were troubling signs of unrest spreading across Europe.

Angry youths smashed shop windows, attacked banks and hurled bottles at police in small but violent protests in Spain and Denmark, while cars were set alight outside a consulate in France.

Authorities say the incidents have been isolated so far, but acknowledge concern that the Greek riots — which started over the police killing of a 15-year-old on Saturday — could be a trigger for anti-globalization groups and others outraged by economic turmoil and a lack of job opportunities.

Just in case things don't turn out so swell

1) Do you know how to garden and raise your own food?

2) Do you own a gun and know how to use it?

3) Can you live with no income or fiat money for two years?

4) Do you own physical gold?

5) Does your family support the fact that you're a (prepared) nut?

6) Do you consider yourself sane?

7) What are the odds we go off the charts? Or have we already hit bottom?

Soot and Ashes Quote of the Year Nominee

"No! No! No! Bear Stearns is fine!"

- Jim Cramer, CNBC, March 2008

"To many Americans, the Bush administration WAS a national disaster."

"An Obama job approval rating of 79 percent -- that's the sort of rating you see when the public rallies around a leader after a national disaster. To many Americans, the Bush administration WAS a national disaster."

- Bill Schneider, CNN's senior political analyst, December 2008

December 10, 2008

Soot and Ashes Quote of the Day

"All human beings are born free and equal in dignity and rights.They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood"

- The Universal Declaration of Human Rights, Adopted and proclaimed by General Assembly, 10 December 1948, and still sadly ignored by America as of December 2008

OJ Simpson jurors. Bush supporters. Evolution deniers. And American homedebtors. Why are some people so clueless?

Man, I just don't get it.

How can so many people be so incredibly clueless?

Still? After all we've been through?

Do they not read?

Do they not understand what's going on?

Is it groupthink?

Are they surrounded by realtors and housing porn?

I'm going to post this again so that Mike Norman, Tom Adkins, Ben Stein, Art Laffer and the rest are completely and forever destroyed

And add to that list Kendra Todd, Nicholas Retsinas, Greg Swann, Leslie Appleton-Young, Lawrence Yun, David Lereah, Connie De Groot, Neil Cavuto, Ben Bernanke, Charles Payne, Stuart Varney, Jim Cramer, Larry Kudlow... I could go on and on and on and on.

It took a lot of conmen and fools to inflate the Late Great Housing Bubble. Americans trusted these talking heads and commission-hungry thieves, and it needs to be drilled into their heads - DO NOT TRUST ANYONE ON COMMISSION. EVER. DO NOT TRUST ANYONE ON TV. EVER. DO NOT TRUST THE MEDIA, DO NOT TRUST BLOGS, DO NOT TRUST YOUR FRIENDS, DO NOT TRUST YOUR NEIGHBORS.

You're on your own. Do your own research. Run your own numbers. And then when you're right or wrong, you only have yourself to blame.

Citigroup: "The world is not going back to normal after the magnitude of what they have done. There is a risk of domestic unrest."

Flash forward a few days from that spot-on prediction, and you have this:

How much longer can they keep the lid on the pot in America? And England? And France? And Spain? And Dubai? And Ireland? And Iran? And everywhere where this epic and colossal bubble has spectacularly burst, leaving youth unemployed, desperate and pissed.

Fannie and Freddie CEO's - "We knowingly endangered the economic health of the United States of America and its citizens for our own personal gain"


1 : one who betrays another's trust or is false to an obligation or duty
2 : one who commits treason


1 : the betrayal of a trust : treachery
2 : the offense of attempting by overt acts to overthrow the government of the state to which the offender owes allegiance or to kill or personally injure the sovereign or the sovereign's family

Article III, US Constitution:

Treason against the United States, shall consist only in levying (economic - S&A addition) War against them, or in adhering to their Enemies (bankers - S&A addition), giving them Aid and Comfort.