To John Borowski:

I am glad you know at least one word of economics - - “fungible”.

Otherwise you are as incoherent as ever, never managing to string together a logical argument based on knowledge.

You are one disputatious American bozo who represents many who still believe the Earth is flat and Saddam Hussein was responsible for 911.  I particularly do not care what you believe in fervently.  True believers, whether in “progressive” or “wing nut” garb are better off at Wacko then on blogs misleading others into panic actions that will harm them and their families’ economic security.

Shame on you.

#100135 by cyrena on 9/13 at 1:30 am.  Thanks.  It feels good that my knowledge is of service to progressives. They are the best hope for this part of the 21st Century.

My dear John Borowski, I am not excluding you from the progressive camp.  In fact, I read your post #100040 by John Borowski on 9/12 at 11:31 am, and some of your other posts on other threads.  I do not disagree with your characterisation of the current state of mass brutality by the neocons as serving the wishes of the “Cabal” of Wall Street Warlords.  Precisely for that reason I posted this must see movie:

From the movie ZEITGEIST at
http://www.zeitgeistmovie.com

In the two months or so since it has been released, its been a sensation on the progressive blogosphere with nearly 3 million downloads.

Now I do not belittle what your mother, dad,and grandpappy may have passed on to you as age old wisdom. Such is found in Charles Dicken’s quintessential gentrified accountant Mr Micawber who uttered the famous words:

“A penny saved is a penny earned.”

Millions of people in the Anglo-American world have lived by this mantra; entire budgets, especially of right wing governments have been based on it.  You should know how much misery this “wisdom” has caused the poor and the weak whose life supports have been yanked from under their feet and over their heads by wing nut politicians and an ignorant public brought up on proverbs.  But there is also a contending Anglo proverb (probably by Dickens also):

“ Penny wise pound foolish”

When proverbs clash, the wise seek refuge in logic and knowledge and not remain “bambozzled”.

Please do not bring up that churlish “You got me, I am educated only till Grade 9” whine. LOL, I thought with your literary skills you could do better than that.

Look, you are an old hand at this site and I am new.  We are here discussing with logic and knowledge.  On issues of finance and economics, much as I would like to admire your mother’s and other proverbial “wisdoms”, you are out of your depth.

I have sold out to the “Cabal”.  But it is always wise to know what techniques the Devil uses and use them ourselves without harming others.

I do not want to push my knowledge down your throat. It seems you have come to believe in what you patently do not know without knowing you do not know.

I have no cure for closed minds, nor am I interested in providing one. Please, you and other literary, non-economic progressives CAREFULLY read my post:

#100030 by sharerisk on 9/12 at 10:57 am

and NOT knee-jerk react with closed minds.

I agree that the Federal Reserve is is the bank of the Cabal as you rightly point out.  However, it can print only FIAT money - - it can’t print REAL money.  The latter is reality; the former is only paper.

To understand, consider one million barrels of oil in Alberta, whether or not one barrel is priced at $50 or $50,000 of US Federal Reserve currency, the number of barrels of oil, which is the real wealth, will remain the same - - one milion barrels! Reality does NOT become 1000 times more even if the paper money price is now $50,000 from $50!

All “Robber Barrons” and “Money Cabalists” know this foundation of all wealth.  Only progressive lefties who read only literature, but are otherwise innumerate, don’t.  Hence progs. like you panic and become “chicken littles” crying the “sky is falling”.  You folks self- paralyse from taking bold action.

Simply put, it is NOT in the interest of the Cabal to ruin the US and world economies by bankrupting the SSF.  Then their own wealth becomes valueless as there is no other buyer than the printing presses of the Federal Reserve; and 300 million people are in revolution hunting for their scalps.

They will not kill the goose that lays the golden eggs.

sharerisk 100030,

....They and I know that the day if and when SSF does go factually, not op-ed kaput, America will already be in the middle of a massive revolution and civil war, and the rich and their neocon allies will be running for their lives as the masses descend on them.

Get it?...”

I don’t know about him sharerisk, but I definitely got it, and I am extremely grateful for the free education. Matter of fact, having just gone into another big chunk of debt for next term’s ever increasing tuition, I feel like I’ve won a lottery with your posts. I don’t know, kind of like getting 6 units for the price of 4. And, no exams.

Thanks for the volunteer work. Makes sense about the SSF too. I got it.

From the movie ZEITGEIST at
http://www.zeitgeistmovie.com:

“They have difficulty, those who have taken Authority as Truth than Truth as Authority” (Gerald Massey).

Borowski, that applies to you.

I am my own expert - - I have Ph.D’s in applied mathemematics and finance/econ/accounting.  I have taught all these at top universities for nearly 30 years, and have trained other Ph.D’s.  I have made fundamental contributions to our understanding on how the entire shebang works.

I am an anti- monopoly capital progressive and I am sharing my knowledge here free.

But because it is free and not written up in an “authoritative” article or Op-ed in some establishment media outlet such as the NYT, or in the neocon rag, WSJ, then what I am saying to you is “untrue”.  Therefore you fit perfectly with with Massey’s description.

Here is an authority you may refer to.  His technical writings you may not understand, but whose general opinion in the public domain is easily readble - - Joseph Stiglitz, Nobel Prize Winner in financial economics and the economics of information; progressive economist; former chief economist with the World Bank and fired by Wolfowitz for his progressive views.

Another is Paul Krugman.

Google these names

Have any of these people said Social Security Fund is near bankruptcy?

No. Why?

They and I know that the day if and when SSF does go factually, not op-ed kaput, America will already be in the middle of a massive revolution and civil war, and the rich and their neocon allies will be running for their lives as the masses descend on them.

Get it?

truthdig used to have comments made by quasi intelligent chimpanzees’. now all the comments are made by pajama wearing losers living in their mothers basements.this site has no more credence than rush limbaugh. did any of you fools ever get past the fifth grade?

My dear Borowski:

I like your name--"Borowski";it is perfect for the subject at hand.

The obvious undertone of sarcasm does not serve your well comment which lacks coherence and focus. More importantly, it is all assumption and no economic substance. Normally I do not respond to such remarks in expert settings, but on this blog I am trying to help a large number of non-expert decent people free of charge.

The neocons are running a shrewd game.  Progressives who are politically knowledgeable and humane, but economically quite raw, cannot counter their financial doom spin that paralyses the working class.  This is the major failing of the American left and why it has failed to mobilise the working class and the middle class to end the Iraq disaster.

OK. Let’s analyse your comment. Along the way I will explain further my previous position on Social Security not collapsing.

The so-called “leaders of this country” crying wolf in your comment are just that; except that they are NOT leaders in financial economics but leaders in crying wolf without the foggiest about the difference between REAL wealth and PAPER money.

REAL means something that exists in REALITY such as buildings, machinery, forests, land, technology.  It is not simply financial pieces of paper of FIAT paper) money.

The Social Security Fund (SSF) is something that most INTELLIGENT business people and working people would NOT like to see collapse. Why?  Because if all that money from SSF every year does not flow back into the economic system,then hundreds of billions of the consumption by retirees will disappear every year.  This is the DIRECT REAL effect on the national economy. 

Do you know how much REAL economic activity that will remove from the economy?  Goods, banking, insurance, medical and other service industry that already exists for the tens of millions or so retired persons and in anticipation of a steady stream of millions more every year will collapse. These are all REAL WEALTH effects, not paper losses.  A tsunami of multiplier effects will follow that will destroy many non-retiree parts of the economy.

Second, there will a disastrous REPUTATION effect on all the bonds and debt obligations of the US that will cause international liquidity to the US to dry up. This second effect will be an even more enormous, disastrous and widespread than the first direct effect.  WHY?

Because the SSF is an INTER-GENERATIONAL long term, debt obligation to the people of the US made by the US as a country, not by the curent crazy Bush administration nor the current spineless Congress.  SSF is backed up by the REAL ASSETS of the Country.  FIAT money suc as $$currency, treasury bonds, and other debt issued by the US is COLLATERALISED by real assets.

Of all US debt, SSF debt is the most senior.  It has to be paid off first by sale of US State land such forests, land, buildings, roads, airports, airwaves, stocks of oil and other reserves, technology and so forth. If SSF cannot be paid, all other debt to China, Japan, Germany, Norway and on and on becomes VALUELESS in the international money markets by the collapse of the US CREDIT REPUTATION.

Then no other country will sell anything REAL such as OIL to the US based on the US$$.  Do I need to continue further?  Because this movie ends in a world wide economic collapse, taking BOTH the robbers and robbed into a hell-hole.
Do you understand Borowski?

So, SFF will NOT collapse; nor will it be allowed to collapse by both the current robbers and international creditors of the US.

cyrena:  don’t worry about social security funds, dear.  I am not giving you and others who blog on this site fatuous advice.  This worry about evaporating SSF is the most paralysing among folks. But it is not rational.  It is caused by reading journalists who themsleves don’t know how to count, projecting their own fears on gullible people.

So here is a worry-stopper explanation.  Please spread this among friends and other general decent working families and folk.  If you need further explanation, just blog here.  I’ll try and explain as simply as possible and as early as I can.  Take care of all your folk, especially kids and elderly for the next several months with the planning I have shown in my other post below.  Things are moving fast.  Hard working, decent folk should be prepared with these simple measures. 

Now listen carefully dear.  The SSF will NOT go bankrupt nor can it be looted.

Why?

Because if and when that happens, the entire country and probably the rest of the world will be in total chaos and so you and your folk will not be alone.  Second, SSF is not stored as currency to the tune of $60 trillion in some vault in DC.  It is simply a commitment by the US as whole, not just some government in power, to pay back what people have contributed as insurance from their wages.

US Social Security is BIGGEST HEDGE FUND of all IN THE WORLD.  But there is a difference between the speclative hedge funds going belly up and SSF.  SSF is based in US Treasuries and so is safest because it is backed up by all the REAL WEALTH (not the paper currency) in the country - - forests, land, roads, cities, EVERYTHING publicly owned. Can you imagine what price the US as country would fetch if it were put up for sale?

Third, countries like China, Japan, Germany etc. who have leant the US about $4-6 trillion have everything to lose if the REAL wealth of the US becomes valueless.

I hope this is enough.  Yes there are big time crooks at work; but if they want REAL WEALTH, they are going to make damn sure that the people who are the backbone of this wealth do not make that wealth disappear. So dear, stop worrying about SSF going poof as that has as much chance of occuring as the Moon crashing on Earth.  Simply take care of the immediate period with the “village” hedge fund strategy I have explained in my other post.

Organise now locally, 10-20 families at a time.  Then network across villages.  I’ll explain that when the time comes.

God Bless

Breaking ...
Capital police are reporting the most massive traffic jam in DC history!

“It’s terrible!” Reports Captain Jock E. Short, commander of the nations capital police. “I’ve never seen anything like it! Cars piled up everywhere, and they just keep coming! It’s like nobody driving knows where the breaks are,” he exclaimed as he jumped out of the way of a limo being catapulted towards him.

Capital press people converging on the scene, are having difficulty sorting out what’s going on, because they have to keep running for cover!

Ms. Landa Goshen, secretary to Captain Short has managed to reach the private phone of one of the nation’s leading hedge-fund managers, Rollo Hawg. According to Ms. Dah, he said his nanny and housecleaner and driver have all gone on strike. “I was afraid this might happen he said,” speculating the strike may be bigger than he realized. “I cant remember how to drive, so in spite of my alarm about my fortune, I decided not to join the billion dollar protest today.”

When asked why the housekeepers, nannies and drivers to the filthy rich had gone on strike, he responded,
“Lord if I know, I cant understand Spanish!”

Meanwhile, back at the capital, lawmakers are hiding under their desks, following the rapid fire rumor al-Qaida had commandeered the Wall Street Fleet!

• #99569 by ocjim on 9/10 at 5:44 am
(87 comments total)
Are there no members of the Bush family involved in the subprime hedge fund debacle? I thought it was a Bush tradition for involvement in all the get-rich schemes.
OCJIM :

The answer to your question is YES! There are surely bushies involved in this, as they have been for decades. At least in Texas, they started this long ago, at least 15 or so years, maybe longer. My own home there was literally stolen from right under my feet, and over my head 6 years ago, and at the time, it could ONLY have happened there, the way that it happened, with is still pretty unexplainable to anyone other than a corporate crook. Even I can’t begin to explain it, without fear that somebody will come and lock me up in a facility of some sort, just on GIP. (General Insanity Principle).

And, that’s because….even though the criminal family is involved, there’s never a way to actually trace anything back to them, especially not for a common citizen. (I tried my own version of the Erin Brocavich accomplishment, but no luck) And those who might be able to help, are rendered equally impotent, via various measures. But, because it sounds like something out of a bad mystery or espionage novel, (or the very old racist and sexist south) nobody much wants to sign on to sorting it all out. Of course back then, when these things were happening very selectively, and to unimportant folk with no political power, it’s been able to continue, and get to this point, where it has effected the entire economy, since far more folks have been victimized now, and of course now it’s affecting even the wealthy. (which we knew would happen eventually). So, it couldn’t be kept under wraps any longer.

I see the subprime debacle as similar to the Enron collapse, and the criminal family never feels any responsibility for any of this, which is why Skilling is now whining about needing a new trial.

The dirty bastards!!!

Sharerisk#99610

Thanks for this intro/primer on setting up a hedgefund/OTC arrangement. I’ve known that I need to do this for my own family and extended family, since it includes elders, middles, and kids, with me as the chief-boomer in charge, and NOT because I ever wanted to be, but just because it’s the way things have worked out. And, I’m frankly worried that so much of our income has to come from the government, in the form of Social Security Retirement income. What if they just decide to stop paying the millions of us who are not so much “entitled” to it, as it is OUR MONEY. My parents don’t have that fear, because they just assume that social security will continue to pay them until they die, because that’s how the system has been set up, since it was established after the New Deal.
But, who KNOWS what these guys in DC might do next?

So, I’ve gotta budget in for passports now too, which is a bit ironic, since there’s not much place to run, and we sure can’t eat those passports, or even use them for toilet paper.

Most folks are scared out of their wits more by the prospect of doing basic arithmetic on their own finances and how the money system works than they are about protesting the war.  The current paraysis among the 65% of us whose conscience is seared with outrage against this unjust war, its death and destruction and its wanton destruction of both our wealth and the Iraqis wealth, is inability to secure oneself against risk of economic depression that people fear will result from closure of the MIC.

What progressives with facility with econ, finance, accounting and even basic arithmetic of compound interest should do is to write on websites like this with simple techniques—“hedge funds” for the people as it were - - to insure against risk locally and start feeling empowered.

I’ll start with a easily implementable local hedge fund - - sharing and hedging away food and shelter risk among very small groups of just ten or so families.  Trust is required for this to succeed because this can’t be backed up by legal contracts. Then you will be dependent on The Powers TB for enforcement and you are back on square one.  The whole idea is to separate out from a financial system that imprisons us and thereby makes us complicit in the war and empowers the warlords on WS.

Start a contingency fund among the group to take care of the kids and the elderly when somebody whose income supports them loses it.  It will require sacrifice of some present consumption among the group for the next year or so for putting up an emergency fund to take care of matters for a few weeks for the family that has lost income.  Diversify families in the group to ensure not all families are affected simultaneously.  So the group should not all belong to the same workplace.  This will require coordination across immediate localities.  A trustworthy coordinator such as a progressive, prog. teacher, a progresive pastor and so forth is needed.

Plan also for the contingency that the affected family will remain in economic need longer than say 2-3 weeks. Again, top of all social security, unemployment insurance etc. by taking in kids and elderly dependents or just taking care of their food and living needs.

Just having this plan in place is a “hedge fund”. It will relieve many of the paralysing fear gripping ordinary folks and free them to face down the warlords of WS.

Enemy of State, yes that’s true. But a large part of the billion dollar hedging gambles are carried out in the the so called “Over the Counter Market” (OTC).  There is no SEC oversight there.

Its daily volume is about four times larger than all the VISIBLE stock and options exchanges (NYSE,NASDAQ etc) combined.

My point is that ordinary folk can never get into these deals individaully.  But they can create their own local “OTC”, as it were, as I mentioned above.  This is just a start. 

cyrenna, how true.  Yet it is precisely this mentality of “what affects you is not my concern” (your recession-depression metaphor is apt) prevents a local hedge fund and “share risks”.

Are there no members of the Bush family involved in the subprime hedge fund debacle? I thought it was a Bush tradition for involvement in all the get-rich schemes.

CEOs protest embezzlement law changes

The SEC Mulls CEO Comp Accounting Change
.
America’s Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) chiefs are close to deciding that salary and perks exceeding five million dollars annually can not rationally be deemed pay for work expended. Payouts of five million to hundreds of millions would quite boggle the minds of both Adam Smith and Karl Marx, said one insider, “off, off, off the record.”
Going forward, the recommendation will be that executive remuneration exceeding five mil annually will be construed as a disbursement of corporate capital. Henceforth these deductions from a company’s capital account must be subject to a public vote and agreed to per amounts by boards, directors, trustees and not so trust-ees as the case may be.
The new accounting Pronouncement will reflect that mega salaries in excess of the maximum five mil will be considered as an allocation of corporate capital which will no longer qualify for accounting treatment as a corporate expense.
A number of CEO’s have formed a study committee particularly in response to the IRS position of “You can call it capital or you can call it Swiss cheese, we’re still taxing exec’ pay at the highest personal rate possible.”
“There’s a fundamental lack of fairness here,” whinged the corporate CEO’s.
They, the potentially afflicted CEOs, vociferously pointed out that, “This change is counterintuitive, even embezzlement is treated as a deductible expense.”
Shareholders, mostly wearing Abu Ghraib style hooding to protect their identities, were cautiously pessimistic.
craig johnson cognitorex blogspot

#99509 by sharerisk

...."If hedge fund owners, managers and promoters are now losing their shirts on the subprime fiasco, then they should take it on the chin in proper capitalist fashion as they incessantly and zealously advocate the rest the great unwashed to do."…

Sharerisk,
I agree with you a thousand percent, and then some!!!

And, it looks like they did in fact post your comment. There appears to be a delay sometimes, and other times, they don’t post the stuff at all.

Still, I’m glad you made this point. It reminds me of a comment by a colleague back at the beginning of the decline, when some could see this coming. He quoted the American mentality that determined the health of the “economy” as in, “When you’re neighbor loses their job, it’s a “recession”. When you lose your job too, it’s a “depression”.

All was well in the fantasy until these guys got down to their own last billion. Now we’re all supposed to panic, and make sure we do whatever the unwashed are required to do, to make sure they get some help.

Problem is, there really aren’t many left to steal from. It’s like, if they’re down to their last billion, what do they think the rest of us have?

I guess they’ll just get their friends to print some more money. I just don’t know how long that’s gonna hold up either.

Thanks God China has shown a bit of restraint, eh?

They could pretty much demolish any plans for even trickle down crumbs.

sharerisk: All so very true. But of course the old statement
“If you owe the bank a million the bank owns you. But if you owe the bank a billion you own the bank” applies. Translation if the big hedge funds crash too severely, the rest of us will suffer from the economic dislocation.

Actually the hedge-fund managers are mostly in good shape, they created a stategy which would pay off handsomly in say 9 out of ten years, but crash horribly in the unlucky year. They were able to collect their outrageous fees during the good years, it is their clients (mostly rich people, but increasingly “institutions”, such as university endowments, and even retirement funds) whi will suffer the big loses.

So if the hedge-fund managers didn’t invest most of their own questionably gotten wealth in their own funds, they probably have enough cash left to keep their trophy wives from seeking greener pastures.

As an academic expert in finance for the last 30 years, the meaning of the terms “hedge”, “hedging” and “hedge funds” is “design a portfolio of csah investments in financial instruments [ aka ‘securities’, ‘options’, ‘exotic options’ etc]” to withstand “risks” (or contingencies). Since all people need not have identical subjective beliefs about the risks, there is demand for a variety of “hedge funds”.

If hedge fund owners, managers and promoters are now losing their shirts on the subprime fiasco, then they should take it on the chin in proper capitalist fashion as they incessantly and zealously advocate the rest the great unwashed to do.

But these hypocritical, neocon true believers now want the Federal Reserve, the monetary arm of the Federal Government, to act as an insurer of last resort and bail them out.  Whatever happened to their capitalist credo - - “Government should stay out of the Markets”?

Today millions of the working classes are losing their homes for mistakenly betting on teaser “subprime” mortgages that have become “above prime” in a bad economic climate in which their incomes have not gone up.

The merciless barons of Wall Street Wealth say: this bad economic climate is risk the working poor are supposed to have seen and hedged against according to the capitalist credo.  The Gov’t, should not bail them out as that would vitiate “market discipline”.

Then why shouldn’t markets also discipline the hedge fund millionaires and billionaires?

They should immediately go to e-Bay and put up trophy wives and their trinkets, the hunfred foot yacht up for sale.

If the Fed bails them out we shall have another demonstration as to who owns the money supply and why the super rich win no matter what stupid risks they take.