The Market Ticker
Commentary on The Capital Markets

I've been writing this column for eight years; the first columns in the archives are from 4-1-2007.

For eight years I have chronicled the abuses in our nation's economic and political systems, tying most of them to economic concerns of one sort or another.  It began on Blogger and drove a fairly major software development effort on my part to put together the software currently in use here today -- a package that is capable of much more than it does at present.

I began this journey as a sort of private debt repayment, if you will, to people who I knew that got seriously harmed in the 2000 tech wreck.  I escaped as I saw it coming, but whether that was really all skill or there was a huge element of either luck or divine intervention I'll never know; there were certainly personal issues in my life that were partly responsible for my decision to divest MCSNet in 1998.

I've heard many people over those years tell me that I'm not only inflexible but I also never admit I'm wrong.  Those of you in that camp couldn't be more mistaken. Who remembers my rather long 2007 missives in which I expected very heavy inflation and dollar devaluation, accompanied with an energy cost spike that would literally destroy the economy?  I, like many others, wasn't looking at the whole picture; I had bought hook, line and sinker into some of the econometric models put forward by so-called professors and their claims, believing without demanding evidence and proof rooted in fundamental algebra that they were providing an honest and accurate assessment.

I was wrong, and those who have followed me know that when the evidence changed -- that is, when the predictions that those models made failed to yield the results that should have occurred I went back and look at what I had been sold and found the errors -- and corrected them.

This is what we all ought to be doing, but damn few actually do.  Essentially nobody in the media does so, and nobody in the general population calls them on it.

What came from this?  Leverage, for one.  One Dollar of Capital, for another.  And a whole series of both conversations and political activism, including real attempts to sway real policy during the 2011 Budget Showdown.

None of it went anywhere.  The Libertarian Party is a bad joke riddled with example after example of rank hypocrisy and outright bullcrap.  They won't even debate their own internal inconsistencies.

Not that this is exceptional behavior for a political party.  Republicans anyone?

When it comes down to it the ills of government can be boiled down to one thing: They insist on spending money they know you won't pay in taxes; this in turn requires them to run a literal theft racket from you and in doing so they license two entire industries -- the medical and banking business -- to do so as well.

So what's the point, really?  After eight years, I don't think there is one.

You won't stand up.

You insist on supporting "D"s or "R"s, and if challenged on that you tell people "well, the other guy is worse."

Is that true?  Is being screwed in butt by 5 inches or 6 any different?  Isn't the essential character of the act the same, and aren't you really arguing over whether you'd like to be killed by firing squad or being hung?

Here's the question, when all is said and done, that I've asked myself since I began writing this column:  Is there a point?

I'm forced to examine this question every day.  Literally.

I'm also forced to ask this question: Does math really matter? It appears not; despite what's clear and evident you keep buying, you keep producing, you keep paying taxes and running on the hamster wheel.  And I believe you'll keep doing it too, even when you literally die from the effort and lack of renumeration.

In the end today I've come to the conclusion that the answer to "is it worth it" is No.

So today, The Market Ticker goes dark.

Godspeed, America -- this nation was a great idea, but it's gone.

View this entry with comments (registration required to post)

From the you ought to be arrested file we have this:

When I was chairman, more than one legislator accused me and my colleagues on the Fed’s policy-setting Federal Open Market Committee of “throwing seniors under the bus” (to use the words of one senator) by keeping interest rates low. The legislators were concerned about retirees living off their savings and able to obtain only very low rates of return on those savings … But if the goal was for retirees to enjoy sustainably higher real returns, then the Fed’s raising interest rates prematurely would have been exactly the wrong thing to do. In the weak (but recovering) economy of the past few years, all indications are that the equilibrium real interest rate has been exceptionally low, probably negative. A premature increase in interest rates engineered by the Fed would therefore have likely led after a short time to an economic slowdown and, consequently, lower returns on capital investments. The slowing economy in turn would have forced the Fed to capitulate and reduce market interest rates again.

Uh huh.

Economics 101 -- when there is more of something (supply) compared against demand the price (interest) goes down.  When there is less the price goes up.

So what happens when the Federal Government emits a lot of "moneyness" (credit) into the economy by running deficits?  The equilibrium interest rate goes down.

And what happens when that same government and The Fed enable this behavior through the Primary Dealer system along with ignoring the fraudulent lending that is going on in the private sector?  The equilibrium interest rate goes down further!

This is, of course, ignored -- that is, the cause of the problem.  Bernanke refuses to discuss this (although he knows damn well that it's true) because to do so he must take responsibility for his willful and intentional refusal to deal with either of these factors in the run-up to 2008, and what's worse he then doubled down on that bad behavior by rescuing those who engaged in it during the crash!

The result has been a literal orgy of said bad behavior -- government credit alone has more than doubled in the interim and all of that "moneyness" has gone chasing "things" -- with much of it winding up in stock prices.

The problem is that the devaluation of the monetary system created in the halls of both Congress and Wall Street winds up doing severe damage to everyone other than those who own most of those financial assets -- that is, the common American.  Only the top 1% have seen a "net benefit"; everyone else has gotten screwed in the ass.

View this entry with comments (registration required to post)

How long will it before the mere utterance of the "n" word, or anything similar, is enough to get you thrown in prison?

It won't be long, given how many people are and will cheer this sort of abuse of power.

JACKSON, Miss. (AP) — A former University of Mississippi student has been indicted on federal charges connected to a noose being put on a statue of the student who integrated the school, the Justice Department said Friday.

The noose and a former Georgia flag that prominently featured the Confederate battle emblem were placed on the James Meredith statue on the Ole Miss campus in Oxford in February 2014. In 1962, anti-integration protests erupted into violence and Meredith had to be escorted by armed federal agents as he enrolled under court order as the first black student at the university.

That was a disgusting act.

But the test of whether you support free speech does not come when someone says a thing that you simply disagree with.  It comes when someone speaks in a way that is outrageously disgusting and repugnant.

Let the record show that the state refused to prosecute because their hate crime law requires an underlying criminal act, and no damage occurred (e.g. vandalism.)  That is, the statute in question was not harmed by the mere placement of a rope tied in a certain way and a flag accompanying it.

Further, there's no colorable argument to be made that such is a "threat" against anyone.  Without identification of some sort of actual target for an actual physical act the claim of a "threat" is nonsensical.

There is certainly an argument of incitement that can be raised under certain limited circumstances, where the initiation of violence on an imminent basis is part and parcel of the intent of the speaker.  But that's lacking here; the person in question placed the noose and flag in the dead of night, intentionally evading such a possible act.

That the suspect, assuming he's guilty, holds disgusting views and expressed them, is not really at issue.  What's at issue is whether expressing disgusting views is a crime.

It had better not be, folks, because it is only a matter of time before the views you hold are deemed "disgusting" by someone with power, and then it's your turn to be imprisoned for mere expression of what you believe.

We're supposed to be better than that as a nation.

View this entry with comments (registration required to post)

You really are stupid, you're really very dumb......

A European police chief says the sophisticated online communications are the biggest problem for security agencies tackling terrorism.

Hidden areas of the internet and encrypted communications make it harder to monitor terror suspects, warns Europol's Rob Wainwright.

Tech firms should consider the impact sophisticated encryption software has on law enforcement, he said.

Utter and complete crap.

Reality is that strong encryption benefits both the honest and dishonest; the law enforcement agency and the criminal; the state and the individual.  You cannot compromise said strength without the damage done by doing so accruing to everyone.

Since there are far fewer terrorists than legitimate businesses and government agencies the balance is never in favor of restricting the strength of encryption.

That this may, in some cases, make law enforcement's job tougher is just one of those facts of life that you can't get around.  Weakening everyone so you have an easier job is the last refuge of the evil, corrupt bastard entity that likens itself to a public servant.


View this entry with comments (registration required to post)

From the no kidding file we have this:

PANAMA CITY BEACH, Fla. –  A house party that dissolved into a hail of gunfire and left seven young people hurt has officials on the Florida Panhandle pondering what to do with a spring break season they say has gotten out of control.

The raucous parties in the spring break capital of Panama City Beach have had politicians, police and businesses tussling for years over how much to crack down on a key economic force.

Because, you know, getting drunk when you're a college kid on spring break has all sorts of things to do with shooting people for grins and giggles.

Oh wait....

Of course the Sheriff wasted no time trying to turn this into a political polemic:

"This is what we've been trying to warn people about," said Bay County Sheriff Frank McKeithen. "It was only a matter of time and it's only a matter of time until it happens again if we don't address it."

Sure it is.

Let me tell you what I see here, not far from Panama City.  The local Okaloosa County Sheriff set up a DUI roadblock / checkpoint a few days ago.  He didn't set it up anywhere near the two places that are right in the middle of Destin where a lot of spring breakers go -- no, he instead set it up on a back road rarely traveled except by locals trying to evade spring break traffic.

So let's see what we got here.  We have a bunch of drunk college kids and in response to this the local gendarme goes out and tries to bust locals who are driving under in the influence.

Oh, yeah, he also publishes statistics that say "most" of his DUIs are locals.  Well duh, when you intentionally ignore the tourist traffic that is generating huge numbers of drunk drivers by placing your "checkpoints" where damn few tourists will ever go because they don't even know that road exists!

Don't get me wrong -- DUI is bad news.  But this sort of political crap is nothing new, and it's disgusting.  The clown who decided to start shooting was almost-certainly not a college student here on Spring Break.  Oh, he might be; we'll probably eventually find out.  We do know he allegedly is from Mobile.... but I'll lay odds he's neither a college student nor was he here on "spring break."

Here's a hint to the Bay County Sheriff (and our Sheriff too): You want big budgets and spending increases but you also want to kill the tourism during this month-long period that drives a hell of a lot of tax revenue in these two counties -- and thus pays for those budgets.  Why don't you stage your checkpoints where the tourists congregate and bust those folks -- if they're the problem, that is.

They are the problem, right..... that is what you claim..... right?  And this isn't the same Bay County Sheriff's Office that had a drug case tossed after it was disclosed that they unlawfully tracked a suspect without a warrant and hid that evidence from the opposing counsel and judge, right?  Oh wait....

View this entry with comments (registration required to post)

Main Navigation
MUST-READ Selection:
The Search For Unicorns

Full-Text Search & Archives
Archive Access
Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.


The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be reproduced or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media or for commercial use.

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.