February 28, 2009

Warren Buffett: Cash is king, and then it won't be. And the US treasury bond bubble of 2008 may one day be seen as "extraordinary"

I couldn't agree more. The safety of cash and t-bills feels great. Shelter in the storm. Safe. And as the markets melt down, anyone is cash, especially US dollars and t-bills, is feeling like a super-genius.

Pretty amazing, eh?

And then.... when you least expect it... KA-POW. And that lovely safe cash ain't gonna be worth the paper it's printed on. That 3% yield will be a rounding error.

This may take months. It may take years. And as you know, timing is indeed everything.

Here's a bit from Buffett's annual letter / mea-culpa. Like Schiff, he got 2008 wrong. But he won't be getting 2009 - 2020 wrong. I'd bet on that.

The investment world has gone from underpricing risk to overpricing it. This change has not been minor; the pendulum has covered an extraordinary arc. A few years ago, it would have seemed unthinkable that yields like today’s could have been obtained on good-grade municipal or corporate bonds even while risk-free governments offered near-zero returns on short-term bonds and no better than a pittance on long-terms.

When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s. But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary.

Clinging to cash equivalents or long-term government bonds at present yields is almost certainly a terrible policy if continued for long. Holders of these instruments, of course, have felt increasingly comfortable –in fact, almost smug – in following this policy as financial turmoil has mounted. They regard their judgment confirmed when they hear commentators proclaim “cash is king,” even though that wonderful cash is earning close to nothing and will surely find its purchasing power eroded over time.

Approval, though, is not the goal of investing. In fact, approval is often counter-productive because it sedates the brain and makes it less receptive to new facts or a re-examination of conclusions formed earlier.

Beware the investment activity that produces applause; the great moves are usually greeted by yawns.

At this point, it appears that Barack Obama, Tim Geithner, Eric Holder and Mary Schapiro are intentionally crashing the stock market.

It's been a month, yet still no change from the failed policies of Bush/Paulson/Gonzalez/Cox. On financial matters, it's old monkeys out, new monkeys in.

I submit:

1) No arrest of Angelo Mozilo, Michael Perry or for that matter ANYONE associated with blowing up the world financial system for personal gain

2) No restoration of the uptick rule or relaxation of new mark-to-market regulations

3) No program to encourage investment, such as a $100,000 2009/2010 IRA max, or a suspension of forced IRA withdrawals

4) No independent special prosecutor named to investigate the REIC, hedge funds, investment banks and Congressional corruption

5) No bank or automaker reorganization or solution

6) No temporary reduction in cap gains, business investment depreciation schedule or corporate income tax rates

7) No business tax credit to hire unemployed workers

8) No massive surge of SEC, IRS and FBI investigators to go after the crooks, realtors, mortgage brokers, mortgage fraudsters and bankers who knowingly committed mortgage fraud

9) No emergency international financial summit

10) No leadership, no vision, no plan, no change.

Grade: E. Fail. Total and complete failure.

This new crew just doesn't get it. It's as if they're INTENTIONALLY letting the markets burn. Out of spite? Out of incompetence? Or is it some sort of plan to impoverish the entire country and ruin all businesses?

Unless we see a sense of urgency, and immediate movement on the points above, you are on your own. This team didn't cause The Great Unwinding. But their inactivity and incompetence is turning a bad situation into a catastrophic one. And soon, it will be too late.

Will you miss newspapers? And can we blame realtors and homebuilders for killing them?

I blame bad reporters, like Rolodex-of-Realtors Catherine Reagor at the Arizona Republic, who caused America to lose trust in its media.

I blame realtors and homebuilders for seducing the papers with billions in fraud-fueled ad dollars.

I blame the corporate media for allowing itself to be corrupted by the REIC.

I blame newspapermen for being stupid businesspeople, not understanding that the best newsstand price for their product is FREE, and for not understanding the internet, craigslist or blogs.

I blame newspaper editors for focusing on car crashes, fires and silly little local celebs, while ignoring the corruption in their own back yards.

I blame our increasingly dumbed down society, who refuse to read newspapers but love their reality tv.

In the end, I won't miss local newspapers. They sucked anyway. And you can get your local goings-on from the blogs and other websites.

I would miss the nationals, in a big, big, big way. The IHT, the WSJ, the NYT, the WashPost and especially the FT - the greatest newspaper in the world. And hell, I'd even miss the mind-candy USA Today. Always had a sweet spot for that rag.

But the Arizona Republic? The Rocky Mountain News? The Seattle PI?


Good luck to the (good) reporters out there. If you get a chance to report again, remember that when your country needed you, you failed, and you left your job up to a ragtag group of unpaid bloggers.

Try to do better next time.

February 27, 2009

The S&P is at 12-year lows. Will we see headlines soon for 20-year lows? 30-year lows? 100-year lows?

Why not?

What's to stop all stocks from falling to zero?

Maybe the whole thing was one big mirage? And the biggest Ponzi Scheme in the history of man?

Serious question.

Stocks fell and the S&P 500 closed at a 12-year low on Friday, after the government said it will take a large stake in Citigroup's common shares, fanning fears it will increase its role in other major banks.

What lessons have you learned?

If you'd like to have the once-in-a-lifetime experience of seeing the world collapse, then make your travel plans to Eastern Europe this Summer

It's all gonna blow now. There's no way for it not to. The over-leveraged (in foreign currency) countries of Eastern Europe are now going to fail. Their governments will fall. And their people will experience untold suffering. Again. One by one. All of 'em.

Latvia, Estonia, Lithuania, Poland, Ukraine, Bulgaria, Romania, Croatia, the entire lot of 'em.


Because they drank the REIC kool-aid and had one hell of a housing bubble. Because their people took out loans that had to be paid back in foreign currencies, and then their local currencies collapsed at the same time the underlying assets collapsed. Because their governments were incompetent and corrupt. Because a wave of British dentists gamed their property markets. And because the Western banks f*cked them, which of course has now f*cked the Western banks.

So come on down. Come to Eastern Europe this summer. Experience what happens when the world melts down. When the rage hits the streets.

I know most of you could care less about this region, and think their failure won't impact you.

And you are wrong.

Read up, understand, come on down, and get ready.

You ain't seen nothin' yet.

Eastern Europe has borrowed an estimated $1.7 trillion, primarily from Western European banks. And much of Eastern Europe is already in a deep recession bordering on depression. A great deal of that $1.7 trillion is at risk, especially the portion that is in Swiss francs. It is a story that could easily be as big as the US subprime problem.

Whether it takes months, or just weeks, the world is going to discover that Europe's financial system is sunk, and that there is no EU Federal Reserve yet ready to act as a lender of last resort or to flood the markets with emergency stimulus.

OK, now we know that Eric Holder (and his boss) are just more of the same. Cowards. So let's all give them a call, and let them know what you think.

Here's Eric Holder's number: 202-353-1555

I'd suggest something like "Yes, message for Eric Holder. ARREST ANGELO MOZILO YOU F*CKING COWARD. Thank you."

Or something like that.

Report back.

And be careful. Unregistered phones, or Skype. They'll tap your phone and waterboard you otherwise. Just more of the same.

Here's the NASDAQ. Now tell your kids why they should invest in the stock market when they grow up.

Trust is gone.

Never to return in your lifetime.

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

Soot and Ashes Mike Norman Quotes of the Day (WARNING - HIDE THE CHILDREN)

"Go [redacted] yourself. Then again, you're probably taking it up the [redacted] from your buddy Schiff. You [redacted] [redacted]."


"Why don't you read the Wall Street Journal article (and many others) on your boy Schiff and how he lost all his clients' money!! I may have gotten the housing forecast wrong a bit, but I made money for my clients, [redacted]hole!"

- Mike Norman, after losing his job and blaming cockroaches and Peter Schiff for it instead of himself, in two separate emails to S&A'ers, February 26, 2009. If you'd like to play along, contrarianmedia@hotmail.com. But be careful. He appears to be in a fragile and dangerous state. Be nice, civil and courteous. Unlike Norman.

February 26, 2009

What's surprised you most about this crash? Here's my "Top 10 I Didn't See it Coming" list

1) That the US dollar hasn't collapsed

2) That HGTV is still on the air

3) That more banks haven't failed by now

4) That Angelo Mozilo and Michael Perry haven't been arrested (yet)

5) That we're 3 1/2 years into this and I still feel compelled to blog every day

6) That there haven't been violent government overthrows around the world (yet)

7) That Lawrence Yun still has a job and that the MSM still quotes him as if he were a reliable source of information and not total discredited propaganda

8) That oil plummeted even faster than houses

9) That they haven't restored the uptick rule or eliminated mark-to-market accounting

And number ten...

10) That Swanndive is still trying to make a living in real estate

Just a few years ago, there was no internet. We had rotary phones. There were no ATM's.

Watch this video.

Funny stuff.

So, with all this cool stuff we have now, are people any happier than they were back then?

Do you even remember life before the internet?

And why are stocks the same price as before we invented all this cool new productive stuff?

I think we all need to go find a Republican (good luck with that) and just give 'em a hug. Because after wrecking America, they're kinda in the dumps

It must suck to be one of the remaining Republicans.

Probably like it was to be a Nazi after the war.

Your ideas have been discredited. Your leaders have been pushed out, while some will soon be investigated and jailed. Your followers are demoralized. And your party is blamed for an epic and historic worldwide destruction.

There will be no recovery. The GOP is dead. And its members are now seen worldwide as thieves and scoundrels.

Like the Whigs, Know-Nothings, Federalists and Anti-Nebraskans before them, they'll eventually just go away. Or slither away as the case may be.

Some of their former and yet enlightened members like Ron Paul and Arnold Schwarzenegger will go on, but under a new banner, with new ideas, and new leaders. Maybe even Peter Schiff.

But the Fox News, George Bush, Dick Cheney, Lee Atwater, Phil Graham, Bobby Jindal, Sarah Palin, Mitch McConnell, Richard Shelby, John McCain, Bob Dole, Newt Gingrich, Pat Robertson, Eric Cantor, Sean Hannity, Rush Limbaugh, Bill O'Reilly, Ann Coulter anti-science, anti-regulation, anti-women, anti-constitution, anti-environment, anti-minority, anti-everything except rich white men GOP - that party is dead.

And history will not be kind.

It hath been foretold.

Mike Norman, a now-totally-discredited hack, goes off on Peter Schiff, and calls people who agree with him cockroaches

I feel sorry for Mike Norman.

To be laid out as a fool for the whole world to see, while still trying to charge idiots for your bad advice, man, it's gotta be tough. Go work at Pizza Hut. Go sell cars. Go do anything for a living besides economic advice.

Feel free to contact Norman here. He loves the feedback evidently. Was it Tyrone who had a note back from him basically saying F off?

And of course, here's Norman's classic from 2007. You wonder if Mike Norman doesn't know that youtube exists? But hey, as he said:

"I think they're (home prices) are gonna be up to around 10%. What artificial lending standard are you talking about! Mortgages have been issued, we have a tiny default rate... the economy is strong... GDP is growing.. The demographics!..."

Make sure you watch this video to the end to see Norman's cocky and arrogant laughing as Schiff schooled him that home price appreciation would be simply washed away. It's not being wrong that bothers me, that's fine. It's arrogance.

Mike Norman, time for you to go away. You are a completely discredited hack. And you deserve all the scorn and criticism that comes your way.


Den som vill vara med om vinsten får också kännas vid förlusten

Don't worry anyone - the subprime meltdown won't cause any problems. Well, at least that's what Jim Cramer said in 2007. Boo-yeah?

February 25, 2009

Soot and Ashes Serious Questions of the Day - Riot Edition

If a riot breaks out in your city protesting government incompetence and corruption in creating this economic disaster, and their failure to arrest the bankers, mortgage brokers, mortgage fraudsters and realtors who caused it, will you join in?

Are you willing to be arrested to make your voice heard?

How bad will it have to get until you take to the streets?

How bad will it have to get until your neighbors take to the streets?

Soot and Ashes would like to congratulate the Republican party for destroying itself.

The Democrats suck.

But the Republicans, well, they're just stunning. A total and complete dysfunctional disaster. And even the Republicans, the few smart ones in the room, know it.

And America burns.

Want to live in your house rent-free, maybe for years? Just say "Produce the Note"

F*ck the banks. Bring down the world financial system. Cause millions to lose their jobs. Put taxpayers on the hook for trillions.

Who cares! You get to live rent free, maybe for a year or even more!

America, 2009.

Here's a game. Get a beer, and every time they cut away from Obama to show a member of Congress, yell "F*CK YOU" at the screen and take a swig

I hate our Congress.

I hate Chris Dodd.

I hate Nancy Pelosi.

I hate Harry Reid.

I hate John Boehner.

I hate Richard Shelby.

I hate Barney Frank.

I hate Maxine Waters.

I hate Lindsey Graham.

I hate John McCain.

And I hate the ones who are no longer in the room - Phil Graham, Dennis Hastert, Ted Stevens, Elizabeth Dole...

These people, enabled by the MSM and empowered by brain-dead voters, got us into this mess. They are directly to blame for the economic disaster at hand.

The REIC bought them, and they delivered. They let the hedge funds, investment banks and mortgage brokers run wild. They artificially propped up home prices with a stupid tax-free windfall law. They let the ponzi scheme of Social Security grow even more unsustainable. They got us into a $60 trillion hole. They crashed the stock market. They destroyed millions of jobs. They ruined America's reputation around the world. And they screwed your children, and your children's children.

They are enemies of America. Not representatives of America. And they need to go. Every one of them.

So enjoy the speech - it was a great one. The first one by a President that I've ever heard that addressed the economic problems we've talked about here for years head-on, that called a spade a spade, that said 'no more'. I guess that's the kind of speech you have to give when you are broke. When you've woken up in a puddle of your own vomit.

But he gave that speech to a room full of corrupt traitors, who have proven time and time again that they'd gladly f*ck the American people to reward their lobbyists and win the next election.

And pay particular attention to the disturbing antics of freak show Nancy Pelosi.

Oh, there's Debbie Stabenow.

Drink up.

LatviaPANIC: A special message to the people of Latvia: You are now "junk"

So, how does that make you feel?

Your countrymen took out loans for homes they knew they couldn't afford, hoping to make a quick lat, and to make matters even worse they took them out at the advice of those nice bankers in dollars, euros and francs. And now they don't have a chance in the world of ever paying them back.

Your corrupt government empowered the REIC to come in and Ponzi Scheme up your nice little nation.

Your over-leveraged businesspeople and developers built speculative homes for housing-porn-addicted British dentists to flip, the Brits walked away, and now you hold the bag.

And now, your entire nation is junk.

But hey, so are your neighbors too. Lithuania, Estonia, Ukraine, Poland and more.

Welcome to capitalism. And junk.

Latvia’s Rating Cut to Junk by S&P as Outlook Worsens

Latvia’s credit rating was cut to junk by Standard & Poor’s, the second European Union nation to receive such a grade, because of a “worsening external outlook” triggered by the global financial crisis.

Latvia’s economic boom, sparked by entry into the EU in 2004 and fueled by soaring wages and cheap credit, has turned to bust. The economy contracted 10.5 percent in the fourth quarter, the worst performance in the 27-nation bloc, and the government, which collapsed this week, was forced to take a 7.5 billion-euro ($9.6 billion) bailout from a group led by the International Monetary Fund.

February 24, 2009

Ben Bernanke is either a liar, or a fool.

"We believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited"

- Ben Bernanke, May 2007

"There is a reasonable prospect that the current recession will end in 2009"

- Ben Bernanke, February 2009

To think someone could get this upset with a missed flight. Just think how upset she'll be when her husband tells her all the money is gone.

Society became infested with get-it-now spoiled brat materialistic pigs.

And now the herd is being culled, and taught a lesson that will last for generations.

(side note - in your worst nightmare, could you imagine being married to THAT?)

Can you even imagine the day that the Fed raises rates again?


I mean, it's so unlikely it's tough to even visualize.

Yet one day, they will. Maybe in a panic to defend a plummeting dollar. Maybe after gas hits $5 a gallon.

And then ZIRP will be as if we were living in a dream.

But today, living through the greatest deflation and depression in generations, a day of 2% or 5% or 10% interest rates seems like a million years away.

Here's President Obama, failing again to announce the arrest of Angelo Mozilo. Oh, and some remarks on reducing the defict

Nice to hear him talk about confronting the deficit.

Talk is cheap.

Raising the retirement age to 72 and pulling our troops from every nation on earth, now that would get my attention.

Now that the entire world has crashed, what major things are you putting off in life?

A major purchase?

A wedding or a divorce?

A vacation?

Having kids?

Going to college?

Buying a house?

Quitting your job?

Giving up drinking?

Here's Ben Bernanke, broadcasting from the end of the world

I'd sure love to get this guy drunk on cheap vodka and have him tell me what he really knows.

I think it'd be something like this:

"We're f*cked.. we're f*cked.. it wasn't my fault, no, it was them. they killed us.. we created them, we let them do it, but they killed us.. all of us.. I want my mommy"

Anyone seen Tim Geithner? Anyone? Anyone?

He pops out a week ago to deliver a debacle for the ages, and crash the markets.

Then he goes to some undisclosed cave evidently.

What the f*ck is going on?

Confidence isn't just eroding. It's being permanently destroyed.

The Titanic is going down, and the capain can't be found.

I kid around about us being led by monkeys. But this isn't funny anymore.

Unless this new team pulls their head out of their ass real soon - as in hours - it's all going down. REALLY going down.

I don't know why I expected better. Geithner, when he was at the New York Fed, was instrumental in getting us into this mess. And I expected him to get us out of it?

He should never have been confirmed.

And I feel hoodwinked.

And oh, while you're looking for Geithner, anyone seen Eric Holder?



February 23, 2009

The World is

Not Going Back to Normal

After the Magnitude

of What They Have Done

A once-in-100-years stock market crash? Dow 5,000 or below? And why would any sane person ever own a stock again?

We said trillions would be lost. Trillions and trillions.

And now $40 trillion has indeed gone away. With the taxpayer on the hook for trillions and trillions more.

Ugliest crash since the Great Depression.

The only question now is - will it be even worse?

Can anything make it end?

This chart looks like all hope, and all support, is now gone.

And this post is either a good sign of a bottom, or the beginning of the last and final cataclysmic chapter, and the end of the financial world.

Forget popcorn. This keeps up, get bullets.

The Soot and Ashes ten point plan to stop the New Great Depression and begin the American recovery

1) 4% 40-year fixed rate mortgages (that Jim Cramer is now promoting) for any homedebtor or homebuyer, one house per person, payment of up to 30% of income, minimum 5% down, direct lending from Fannie/Freddie with no mortgage broker commission allowed. Plus Jim Cramer's idea of refi's for any home in America down to current appraisal, with the short amount picked up government insured certificate with any sale proceeds in the future to be applied against the coupon

2) Pull US troops out of every nation on earth and close down every foreign military base by 2015

3) Eliminate market to market accounting and restore the uptick rule

4) Ban SKF and all ultra-short stock ETFs

5) Nationalization of Citibank and Bank of America, which will then be used for direct lending by the government to solvent and credit-worthy businesses and individuals

6) Forced merger and pre-packaged bankruptcy of Ford, Chrysler and GM into one single private, non-union and debt-free national car company

7) $100,000 maximum IRA contribution ceiling for 2009 and 2010, with suspension of forced IRA withdrawals for 2009, 2010 and 2011

8) 0% cap gains tax 2009 and 2010 and accelerated 100% depreciation on all business asset purchases for 2009 and 2010, plus corporate income tax reduced to 10% going forward

9) $1 trillion five year green energy, infrastructure and transportation Manhattan project stimulus

10) Raise Social Security retirement age to 72 effective 2015, index to life expectancy data after that. Eliminate prescription drug benefit.

Oh, one more thing. Arrest Angelo Mozilo.

The United Ponzi States of America.

Where were the regulators?

Where were the auditors?

Where was the media?

What was Congress doing?

Where was the SEC?

Where are Sarbanes and Oxley?

Where is the Justice department?


Here's the story of a F*CKING SCHOOL BUS DRIVER who is about to lose her $800,000 home, and wants me and you and Obama to bail her out.

I'd love to live in an $800,000 home.

Yup, that'd be swell.

I'd love to drive a Maserati. I'd love to take an around-the-world cruise. I'd love to shop at high-end designer stores.

And I'd love it if all of you would pay for me to live beyond my means and bail me out when I commit crimes or make bad bets.

And this, like so much else these past ten years, is sick.
Sick, sick, sick, sick, sick.

Note to school bus drivers - you may be fine people, but you live in $80,000 homes at best, not $800,000 homes. You f*cking rent. You do NOT LIVE IN $800,000 HOMES. Got it?

No matter what's on MTV Cribs. No matter what's on HGTV. No matter what that nice mortgage broker tells you. No matter what that realtor on commission can swing for you, YOU DO NOT LIVE IN $800,000 HOMES! And oh, side note, mortgage fraud is indeed a crime. Even if George Bush and Eric Holder don't think so.

Here's the video
. Sorry, embed on CNN ain't working.

What took someone with a public profile so long to express some F*CKING RAGE?


Seriously, Santelli should be on the way to DC tonight. And he should stand outside the White House gates until they let him in.


February 22, 2009

FLASH: Cramer says a crash in the Dow to 3,000 and social insurrection is on the table, and that the stock market could "simply evaporate". Boo-yeah?

If you believe Cramer, w
e are staring into an abyss worse than 1,000 9/11's. Worst than 100 Pearl Harbors. We're on the verge of something that could take down America, and the world, and change your life forever. All wealth gone. People fighting in the streets. Governments overthrown. Money worthless. You know, just another day.

When a perma-bull like Cramer is talking about the end of the stock market and anarchy, I take note. Because it truly could be the end, or it could be the bottom.

Speaking on the upcoming bank nationalizations:

"If you wipe out the preferreds and the bonds, though, you know I believe the stock market will simply evaporate. That's how critical it is. I think that we could be down several thousand points on the wrong move"

And check out this depressing video

The NAR wants illegals to buy homes, so here's their stock commercial. Let me translate.

In America, you don't need money or a job to buy a home, and mortgage fraud isn't a crime, so you can lie on your application, put no money down, and live in that home scott-free with no payment, for at least a year until anyone gets wise.

In America, it's illegal to buy a home without a REALTOR. REALTORS are the smartest people in America, so always do everything they say.

REALTORS can show you how to get rich by flipping houses. You'll never have to work again if you let a REALTOR help you. REALTORS are your best friends, and are honest and ethical and should always be trusted. You should reward your REALTOR with cash tips after you get your new home.

Soot and Ashes Unintentionally Hilarious Quote of the Day

"The United States has a well-deserved financial reputation"

- Hillary Clinton, begging China to buy our bonds, February 20, 2009

Eric Holder - A FAILURE AND A COWARD (so far)

Let me be one of the first to pronounce Attorney General Eric Holder a total and complete failure. So far.

- Failure to arrest Angelo Mozilo
- Failure to arrest Michael Perry
- Failure to open any investigation of the Bush Administration's crimes
- Failure to name an independent special prosecutor to investigate the REIC and Congress
- Failure to announce any crackdown or investigation of the mortgage fraud orgy of the past decade

Eric Holder, we expect more. We expect a SENSE OF URGENCY. We expect the laws of the United States to be upheld.

And so far, you're just more of the same.

You are a FAILURE. You are the COWARD.

Now get on it, now, or resign.

(Want to be heard? Call Holder at
202-353-1555 and shout at the top of your lungs "ARREST ANGELO MOZILO! Click.)

February 21, 2009

And now, a special message from President Obama

Here you go.

Yup, that about sums it up.

A Special Soot and Ashes Appeal to the Fashion Designers of the World: GIVE US SHORT SKIRTS DAMMIT!!!

I'm talking micro skirts.

I'm talking hem lines to the cheek.

I'm talking extremely inappropriate, oh-dear-god-can-you-believe-she's-wearing-THAT hemlines.

I'm talking Amanda on Melrose.

I'm talking Twiggy.

I'm talking about sending the women of the world out onto the streets nearly naked, looking like prostitutes short.

I'm talking about the Muslims, Mormons and Baptists having heart attacks short.



(and I'm hoping my female readers take one for the team and lead the charge! And if you find this post insulting or offending, that's your problem)

Hemline/Skirt Length Indicator

This theory suggests that the direction of the economy can be predicted based upon the average length of hems in that year’s new fashion lines. If skirts are short, markets are on the rise. Conversely, if skirts are long, markets are heading down.

The rationale is that longer skirts are worn when general consumer confidence is low, demonstrating fear and lacked spending. When skirts are short, consumer optimism and confidence is high, indicating a bullish market.

Have Americans, with their housing and stock wealth destroyed, their future incomes in doubt, accepted the fact that it will never be the same again?

Prosperity built on debt felt good at the time, but it was not sustainable.

The carefree trips to Best Buy on the HELOC or Capital One credit card are over.

Comfortable and secure retirements will not be possible.

Jobs will never be secure.

Everything has changed.

And it will not be going back to normal, because of the magnitude of what they have done.

So what stage are you in?

And in what stage are your countrymen?

Soot and Ashes Quote of the Day

"This is the end of many stocks and many companies"

Jim Cramer, announcing the end of boo-yeah, February 20, 2009

You wonder if Obama understands what really happened out there. That nearly EVERYONE was a housing gambler. That nearly EVERYONE speculated.

Are they planning to conduct a lie detector test before getting government cheese?

They say they're not going to help speculators that were betting on a risky market, or anyone who was in a house they couldn't afford.

Uh, OK. I'll take them at their word. But aren't we talking about five or six people then?

Go to Phoenix. Talk to upside down homedebtors.

They listened to realtors on commission, they read the cheerleading builder-ad-supported Arizona Republic, they watched all the housing porn shows, they got hyperventilated by their neighbors and co-workers who were making a killing, and they decided to jump.

They bought houses they couldn't afford, they committed mortgage fraud in most cases to do it, and THEY THOUGHT THEY WERE GONNA GET RICH RICH RICH. And tax-free to boot.

And it didn't work out.

And now Obama wants to bail them out. With your kids' money.

Ron Paul on Bill Maher. Liquidate the banks. Pull the troops. Legalize pot.

Too bad Ron Paul didn't have the courage to mount a third-party presidential bid.

Too bad he doesn't do something DRAMATIC.

Too bad he won't start a REAL revolution.

Looks like Cramer is reading S&A, as he calls for 4%, 40-year mortgages for everyone

How about a hat-tip next time Jimbo.

So what to do? Cramer, of course, has a plan: The government should offer 40-year, 4% fixed-rate mortgages or refinancings to everyone – not just those overextended homeowners.

February 20, 2009

Now that we're at where we're at, what's your worst nightmare? What's your greatest hope?

In your lifetime, have you ever felt sentiment THIS bad?

The sign of a market bottom will be when total panic and despondency is in the air.

When everyone you know is scared.

When gold is all anyone can talk about.

When NOBODY in their right mind would ever buy a stock again, and rushes to sell everything they have, at any price.

When it looks like capitalism will not survive.

But who knows, maybe this time there will be no bottom. Maybe this time is different. Maybe this time, it will all fall apart. Maybe this time, all wealth will be lost, all stocks will go to zero, all currencies will fail, all jobs will be lost, millions will die, and neighbors will fight neighbors for food.

The fact that you'd even consider that should either scare you sh*tless, or make you hopeful that we're seeing the bottom right about..... now.

It's time to stop f*cking around. The banks of the USA are insolvent. The people running them are criminals. It's time to nationalize them.

We said for years that the banks would fail.

And now they have.

They are insolvent. Many trillions over. It's not even close.

It's time for an intervention.

It's time to admit what we all know, do the nastiest of nasty deeds, and nationalize the banks of the United States of America.

And after we nationalize them, we need to prosecute the criminals, we need to claw-back the ill-gotten gains, we need to fire the boards and the managers, and we need to start over.

After we re-capitalize them, install new and competent leadership, clean up their books, and issue clear and forceful regulations, then we let them go public again.

This will cost us trillions. Many times over. But the alternative would cost us many, many trillions more.

We are f*cked. The banks are dead. Admit it, face the problem head on, clean it up, and move on.

It hath been foretold.

How will we explain this to the children?

Work hard. Save your money. Invest in your 401k and stocks. Play by the rules. Buy a house and be a part of the American dream. Homes and stocks are the best investments you can ever make. Trust your government and business leaders. Capitalism and the free market work best. Go ahead and take out student debt, there will always be great jobs for you in America.

So, time for the final cataclysmic stock market crash? Or does that look like an epic double-bottom to you?

Got M2?

"Flooding" would be an appropriate word.

Soaking it up might be the tough part.


February 19, 2009

Rick Santelli, mad as hell and not gonna take it anymore, goes off and threatens on live TV to organize an anti-government riot in Chicago in July

"'The government is promoting bad behavior. Do we really want to subsidize the losers' mortgages. This is America! How many of you people want to pay for your neighbor's mortgage? President Obama are you listening? How about we all stop paying our mortgage! It's a moral hazard!!!"


And now of course, here's the original...

What. The. F*ck. Are. You. Waiting. For.

Eric Holder, arrest this man.


Frog march the orange man.

Never has a person been so guilty.

They called them "Liar's Loans", as they bribed our government and cashed in their stock options and bonuses.

What the f*ck are you waiting for?

F*ck it. It was just money. Let's all go live down by the river. Grow our own food. Never see the inside of a Best Buy again.

Is this economic crash making you blue?

Where you able to seek shelter from the storm?

Kermit sounds like he listened to a realtor.

When Bank of America is (finally) nationalized, should Ken Lewis be arrested?

Something has to give.

Either Ken Lewis is telling the truth, the BofA balance sheet that he signs off on isn't as bad as we all think it is, and he's in strict compliance with Sarbanes-Oxley.

Or he is not.

I'm thinking "not".

Ken Lewis and Bank of America have financial AIDS, thanks to sleeping with Angelo Mozilo and John Thain. We tried to warn him. He did not listen. He got drunk. He should have used protection. But no, he wanted to party.

So here's financial-AIDS-ridden Lewis, who has single-handedly destroyed a great American institution and the lives of thousands, either telling the truth, or lying his ass off and daring Eric Holder to arrest him when it all blows up:

Bank of America Corp. chief executive Ken Lewis fired back Friday against speculation that his company could be nationalized by the government, dismissing such talk as “a bunch of malicious rumors.”

“It's just absurd,” Lewis said in an interview on CNBC. In all his talks with government officials, he said, “I've never had anybody even hint at it.”

Lewis also said the Charlotte bank will not need more government money. “Categorically, I can say no,” he said.

Best government money could buy

Independent prosecutor.


But that won't happen. The fox is in the henhouse.

The Stanford Financial Group, through its political action committee and employees, has contributed $2.4 million to political candidates, parties and committees in the U.S. since 1989, with nearly two-thirds going to Democrats, according to the Center for Responsive Politics, a group that tracks campaign spending.

Most of that cash flowed during the 2002 election cycle, when Congress was debating a financial services antifraud bill that would have linked the databases of state and federal banking, securities and insurance regulators. The bill ultimately died in the Senate, where the biggest recipients have been Sen. Bill Nelson, D-Fla. ($45,900); Sen. John McCain, R-Ariz. ($28,150); Sen. Chris Dodd, D-Conn. ($27,500); and Sen. John Cornyn, R-Texas ($19,700). Rep. Pete Sessions, R-Texas, also received $41,375.

Stanford and his wife, Susan, also donated $931,100 of their own money, with 78 percent going to Democrats, including $4,600 to President Barack Obama's presidential campaign last May 31. Records show $2,300 of that was returned on the same day.

February 18, 2009

What kind of music will be popular in a post-crash world 2009 - 2015?

Stupid robot-sounding vapid pop will be toast.

Bi*ches and Ho's corporate rap will disgust you.

Ad-and-MSM-supported country and "rock" will be laughed at.

Geriatric reunions with $200 concert tickets will be empty.

My predictions?

* Indy rage anti-establishment anti-corporation metal
* Prison Blues and Depression Soul
* Down-on-Your-Luck Country

OK, you guys are starting to convince me that we're only in "Fear" stage. Wow. If that indeed is the case, can you even picture what is to come?

Or, for your consideration, is it possible to interrupt the cycle, and skip from "Fear" to "Hope" by spending $10 trillion plus to push off the problem to another day.

You know, like Bush and Greenspan did after 9/11?

Years from now, we'll look back at these posts and laugh.

Those of us who survived.

Obama wades into Greg Swann's housing gambler and mortgage fraudster mess Phoenix Arizona and promises everyone some government cheese

I truly feel sorry for regular folks who lived within their means, put some money down and bought a house for their family that they could afford, and then because of life circumstances could no longer afford the monthly payment. You know, the 10% of homedebtors that this describes.

I do NOT feel sorry for failed housing gamblers, guilty mortgage fraudsters, greedy speculators, cash-out HELOC whores and housing porn addicts who tried to game the system for their personal gain. You know, the 90% of homedebtors that this describes.

Obama says this program will not help "speculators who took risky bets on a rising market who bought homes not to live in but to sell". Yeah, right. Because that describes almost ALL of Phoenix Arizona (and the US).

We'd be better off nationalizing the banks, RTC'ing the foreclosures, moving the homedebtors to renters, and starting over. But that'd be the right thing to do.

BTW, I wonder if Greg Swann was at his speech today, wondering about those 21 Reasons and the Brownshirts who'd never admit they were very publicly very foolish.

Will oil fall to zero?

Will this evidently useless worthless black stuff one day soon be free?

Will peak oil be proven to be just a hoot?

Will all oil producing countries go up in flames?

Will GM reintroduce the Hummer? Maybe even bigger ones?

Will all solar and wind companies go away?

Will a bottle of water be more expensive than a gallon of gas?

Because at this rate, oil indeed is heading to zero. Soon, OPEC will have to pay folks to take oil off their hands.

I said in June 2008 that the oil bubble would blow, and the crash would be 'spectacular'. But man, even I didn't see this level of destruction. This is, frankly, simply shocking.

Maybe we are indeed heading back to our caves. At least that's what oil is telling us.

February 17, 2009

"Point of Maximum Financial Opportunity"? Or are we still heading down the slope?

We could stay in Despondency and Depression for a long, long time, based on the magnitude of what they have done. But I think all of you would agree by now that we're past Fear, Desperation and Panic.

The past week, starting with Geithner's disastrous amateur hour, feels like the start of Capitulation. Throw-in-the-towel, I'll never invest again, I trust nobody or nothing, houses are completely worthless, capitalism is dead, the Dow is going to 1,000 and will never recover Capitulation.

If that's the case, then Despondency (and worldwide riots, famine and awfulness) is around the corner.

Whatever it is, it's been amazing to follow this chart. It's told us everything. EVERYTHING. After this is all said and done, and you go back and look at this chart, it will all become clear.

It hath been foretold.

Ron Paul: "What If"

Anyone getting the feeling that we're f*cked beyond repair?

That maybe, because of the magnitude of what they have done, that this time it truly IS different?

Or is this end-of-the-world feeling, the absolute collapse of the housing market, the destruction of the banks, the crash of the stock market, and the trillions and trillions and trillions and trillions of losses a good sign we're near bottom?

What's the worst city in the United States?

February 16, 2009

Chris Warren, the new poster child for mortgage fraud.

Like Casey Serin before him, here's a kid admitting to his crimes.

In this case a 26-year-old mortgage broker con-man who enabled over $1 billion in fraud loans.
Let's see if anyone will notice. Let's see if mortgage fraud will one day again be a crime in America.

Hat-tip to housingdoom for the video..

[UPDATE - Right after posting I saw that he was just caught at the Canada/US border, with $70k in cash, $1m in gold certs and for the hell of it some platinum. And he just got back from an around the world trip hiding his loot, including gold in Lebanon. Not bad for a 26-year old kid.

How did this happen? Where was the oversight? Where were the auditors and appraisers and risk analysts? The Bush Years - aka The United States of Financial Anarchy.]

February 14, 2009

America was a great country. America did great things.

And if the people put down the Big Macs and remote, embraced science, demanded a government that answered to them, and imprisoned the bankers, it could be great, and do great things, once again.

The United States, because of a financial collapse caused by its corrupt Congress, will now spend $3,333 per citizen on a "stimulus"

So, would you have just rather have had them send you and your family the cash?

A) Send me $3,333 please. Small, unmarked bills.

B) Nah, go blow it on pork.

February 13, 2009

When the real story is told, one of the most important chapters will be how Ayn Rand, via Alan Greenspan, took over the American financial system

And then brought about its collapse.

I give you in its entirety an important and amazingly prescient Op-Ed from 2000 by Ralph Nader on Alan Greenspan, his association with Ayn Rand, and the destruction of the American financial regulatory apparatus.

Which as we know now destroyed the American financial system, and led to one of the biggest financial collapses in world history.

Greenspan Shrugged: The Reserve Chair's Philosophy Differs Little From His Ayn Rand Days

by Ralph Nader
Published on Tuesday, April 18, 2000 in the San Francisco Bay Guardian

Last year Congress made Federal Reserve Board chair Alan Greenspan a virtual regulatory czar over financial services corporations. Considering the waves of adulation that have been sweeping over Greenspan, the anointment was not a surprise.

It would be reasonable to assume that before placing this important regulatory power under the Federal Reserve, Congress undertook a careful review of Greenspan's regulatory philosophy and record. You can toss that assumption in the nearest trash can.

Congress knows little and cares less about how Greenspan views the government's role in protecting the public interest and the public purse. The same is true for the three presidents -- Ronald Reagan, George Bush, and William Clinton -- who have appointed and reappointed Greenspan to four terms as chair of the Federal Reserve.

A causal observer of Senate confirmation hearings would be led to believe that financial regulation has nothing to do with the job of Federal Reserve chair. The issue never comes up. It is the rarest of occurrences when a congressional oversight hearing places a Federal Reserve official in the dock over financial regulatory shortcomings.

Yet Congress, with only half-hearted opposition from the Clinton administration's Treasury Department, handed Greenspan and the Federal Reserve the regulatory plums when it authorized the merger of banks, securities firms, and insurance companies under common ownership in giant conglomerates. The safety and soundness of the nation's financial system will rest heavily on how vigorously the Federal Reserve carries out its responsibility.

For longtime watchers of Greenspan the move was incongruous, if not outright risky. As a disciple of Ayn Rand, later as an economic guru for the Republican Party, and still later as a lobbyist for financial corporations, Greenspan has disagreed with regulation as a tool to protect consumers and the well-being of a free enterprise economy. Greenspan has argued that the self-interest of the corporations – the desire of corporations to protect their reputation – was all that was necessary for consumer protection.

In an article published in 1963 as part of Ayn Rand's book Capitalism: The Unknown Ideal, Greenspan declared that protection of the consumer against "dishonest and unscrupulous business was the cardinal ingredient of welfare statism."

"Regulation which is based on force and fear undermines the moral base of business dealings," he wrote. "Protection of the consumer by regulation ... is illusory."

Some may well argue that these diatribes against regulation were part of a passing phase in Greenspan's career. Perhaps, but this philosophy was alive and well when Greenspan, as a consultant-lobbyist, badgered federal regulators. In one case, Greenspan intervened directly with the principal regulator of Charles Keating's Lincoln Savings in an attempt to gain special exemptions from regulations for the institution. Risky investments ultimately brought Lincoln Savings down, sent Keating to jail, and cost the taxpayers $2.5 billion. Greenspan became chair of the Federal Reserve.

Greenspan's antiregulation philosophy continues to crop up at the Federal Reserve. Not only has the General Accounting Office raised questions about the efficacy of the Federal Reserve's regulation of bank holding companies, but Greenspan has erected roadblocks to the collection of data important to consumer protection and fair lending as well.

In 1996 Greenspan was urged to help in the enforcement of fair lending laws by collecting data on the race and gender of applicants for small business and consumer loans. Despite pleas from the Office of the Comptroller of the Currency and the Civil Rights Division of the Justice Department, Greenspan and his fellow governors blocked the proposal.

This year Greenspan decided to end the collection of nationwide data on bank fees. The survey, which was authorized as part of the financial reforms adopted in 1989, has proven an excellent tool that consumer groups have used to highlight and battle the excessive fees that banks impose on consumers.

Similarly, the Federal Reserve is dropping its "Functional Cost Analysis" study, which has provided important data on how much it costs banks to provide services. This has been a great tool for measuring the validity of bank charges. Credit unions, particularly, have made good use of this data to dramatize fee and interest rate gouging by banks.

But if we believe the words of Greenspan during his Ayn Rand period, he probably doesn't see any need for such data, much less regulation.

And if anyone complains about the loss of such consumer and fair-lending information, Greenspan could send them this excerpt from his writings with Ayn Rand: "Government regulation is not an alternative means of protecting the consumer. It does not build quality into goods, or accuracy into information. Its sole contribution is to substitute force and fear for incentive as the 'protector' of the consumer. The euphemisms of government press releases to the contrary notwithstanding, the basis of regulation is armed force. At the bottom of the endless pile of paper work which characterizes all regulation lies a gun."

And this is the Alan Greenspan who Congress believes should protect the public interest in the regulation of the new financial conglomerates?

February 12, 2009

Republicans, after wrecking America, were dismissed. They are a fringe party, wandering in the political wilderness. But will they return?

America needs checks and balances. It needs a Coke to a Pepsi. It needs at least two viable political parties. Check that. It needs at least two viable political parties that AREN'T the corrupt Democrats or the Republicans. But that's what we're stuck with, since the system is fixed.

That said, now we're down to one viable party. The GOP has been destroyed. And believe it or not, that's bad news for America. Because Nancy Pelosi and Harry Reid running around DC unchecked is a scary, scary thought.

But, like Jason or Chucky, the Republicans can eventually awaken from the dead. They'll likely wander in the political wilderness now, maybe for a generation. But eventually, they'll likely come back.


A) The Democrats f*ck it up so bad that the GOP becomes the "Not Them" choice in the voting booth

B) The GOP drops the hateful right wing religious crazy anti-science Sarah Palin Karl Rove crap, and re-emerges as a pro-science, pro-business, pro-separation-of-church-and-state, pro-limited-government, anti-war, pro-environment, anti-tax party of sane adults

The GOP will be out of power for quite some time. The damage they caused the nation and the world these past eight years is so great, they're truly the Nazi party of America. They might need to change their name, the brand is so damaged. And you know what, eventually I think they will.

The New GOP. The Grand New Party. The New Republicans. Something like that.


Because the old one sucked.

And for sh*ts and giggles, check out the future of the New Republican Party here.