Talk about corruption:

The Illinois senator’s 2008 financial disclosure statement shows he sold mutual-fund shares worth $42,696 on Sept. 19, the day after then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged congressional leaders in a closed meeting to craft legislation to help financially troubled banks. The same day, he bought $43,562 worth of Berkshire Hathaway’s Class B stock, the disclosure shows.

Riiiight.

I have written before about the fact that Congressfolk can trade on pending legislation.  There is no apparent violation of the law, if I read it correctly, in doing so.

But there damn well should be, and Durbin should be in prison.

He received a confidential Treasury and Fed briefing, and the next day executed trades in his accounts.

If you or I did something like that we'd have an SEC probe inserted about three feet into somewhere very unpleasant.

Shoemaker said Durbin didn’t capitalize on anything Paulson and Bernanke told congressional leaders at the Sept. 18 meeting. Whatever information Paulson gave lawmakers wasn’t secret or classified and was disclosed publicly the next day, Shoemaker said.

Nice try.  The scaremongering was in fact rather explicit.  Remember this video?

In private conversations, eh?

The Internet never forgets, and neither do I.

Durbin must resign and insider-trading laws must be amended so as to include any and all information that becomes made known to people in Washington DC on pending or proposed legislation.

We have seen the largest looting operation in history perpetrated against The American People.

Over $5 trillion dollars in junk securities were marketed and sold.  They had a real value of about $2 trillion dollars; the other $3 trillion, roughly, was pure fiction.

The banks created and sold these throughout the world, with the full knowledge and support of Congress, The Fed, and the banks themselves.

It was pure fraud.

Granting someone a "mortgage" based only on whether they can fog a mirror is proof positive of malfeasance, unless you disclose this fact to the buyers of these securities - a fact that was not disclosed until after the securities blew up.

Lenders, builders and others pressured appraisers to "hit the numbers" to support these fraudulent deals.  Proof of that is found in the nearly-10-year-old Appraisers Petition bearing thousands of appraiser signatures. 

That ratings were a "mistake", either real or intentional, is a matter of now-known historical fact.

Americans have sat on their butts through all of this, allowed their 401ks and IRAs to be trashed, their supposed "home values" to be pumped and then destroyed, and their hopes, dreams, employment and house have all vanished into the ether of fraud.

When this came to light the banks went to Congress, and supported by The Fed's intentional draining of liquidity to create an immediate "crisis", they got a $700 billion bailout bill passed - one that you, your children and grandchildren, will have to pay for.

The government then passed another near-trillion-dollar "stimulus" bill claimed to hold unemployment to 8%.  It did not, because it was yet another "papering over" of the fraud, but that bill your children and grandchildren, along with you, will also pay.

Your savings accounts and CDs now yield an effective zero. 

Your credit card interest rates have gone from 11% to 29%, all so that the banks can keep granting ill-advised credit to people who can't pay.  Those who can pay - the rest of you - are being jacked for 30% a year in interest.

We have seen a few "tea parties" in which a few people showed up and which were immediately panned by "those in power" as "astroturf."

Contrast with this.

A few days ago, Iran held an election.  It is alleged that there was massive fraud.  The current President claimed victory under less-than-clear circumstances.

The people said "hell no!" in this sort of demonstration:

That's about 2 million people, out of 70 million population (roughly), or one in thirty-five Iranians in the entire nation who took to the streets to demand justice in a simple vote.

More strikingly, Tehran has a population of roughly 12 million; this means that one in six citizens of the city are standing in that crowd.

This, despite the fact that the government there has been shooting people, has arrested the opposition party and issued an order to burn the ballots so there can be no recount.

This, despite the fact that the Iranian population does not enjoy a Second Amendment, and thus is forced to fight a rogue government with makeshift molotov cocktails, rocks and clubs, should that rogue government choose to shoot.

And this was about an election.  A President.  One man.

In our nation we have literally had 1/3rd of our GDP - that is, 1/3rd of everything you worked for last year - stolen by a bunch of fraudsters with the explicit cooperation and assistance of the government.

We should be seeing 10 million Americans literally closing Washington DC with peaceful protest in the streets - making the entirety of the downtown inaccessible to vehicles and the normal conduct of business impossible, were Americans to display the same sort of anger over an insult vastly more serious than that served upon the Iranian people.

If one in six Americans had enough in America's big cities, there would be one million people in the Streets of Chicago - enough to fill Chicago's Loop from Lake Michigan to I-90/94 and from The Chicago River to beyond Soldier Field, rendering the city core impassable.  (Roughly double the crowd that shows up for the 4th of July Fireworks, to put it in perspective.  "Greater Chicagoland" has a population of ~7 million)

The same in NY City would result in a crowd of 3.3 million people.

Where are you America?

In America, if the government turns into a goon squad, you have the constitutionally-protected ability to shoot back.  In Iran you have no such ability as the Iranian government has never recognized the unalienable rights as set forth in our Declaration.

So in Iran the population risks mass death to protest.

In America the population risks loss of some income since you'd have to cut work.

The Iranians take to the streets; we take to our couches and have another beer.

Grow a pair of balls America.

The people of Iran are putting us to shame.

PS: Those threats appear not to have been idle either:

BREAKING NEWS: AP photographer sees pro-government militia fire at protesters, killing at least 1

I continue to be truly amazed at the stupidity displayed by our government - both state and federal.  First, on the Federal level:

At the center of the plan, which administration officials are referring to as a "white paper," is a move to remake powers of the Federal Reserve to oversee the biggest financial players, give the government the power to unwind and break up systemically important companies -- much like the Federal Deposit Insurance Corp. does with failed banks -- and create a new regulator for consumer-oriented financial products, according to people involved in the process.

Right.  And The Fed's record?  Right here, as I have repeated several times:

Chairman Bernanke before the Congressional Joint Economic Committee on March 28th 2007, just a few days later: "Although the turmoil in the subprime mortgage market has created severe financial problems for many individuals and families, the implications of these developments for the housing market as a whole are less clear. The ongoing tightening of lending standards, although an appropriate market response, will reduce somewhat the effective demand for housing, and foreclosed properties will add to the inventories of unsold homes. At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency."

Chairman Bernanke at the Federal Reserve Bank of Chicago’s 43rd Annual Conference on Bank Structure and Competition, May 17th, 2007: "We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system."

Chairman Ben S. Bernanke speech to the 2007 International Monetary Conference, Cape Town, South Africa, June 5th: "The troubles in the subprime sector seem unlikely to seriously spill over to the broader economy or the financial system."

Chairman Bernanke to Committee on Banking, Housing, and Urban Affairs, U.S. Senate, April 3rd, 2008: "Clearly, the U.S. economy is going through a very difficult period. But among the great strengths of our economy is its ability to adapt and to respond to diverse challenges. Much necessary economic and financial adjustment has already taken place, and monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year."

Less than six months after that last pronouncement, the stock and credit markets imploded.

Never mind the intentional manipulations of our markets that have made things much worse, not better, all undertaken in whole or part by The Fed, and all of which were claimed to be solutions to our problems:

• Administrative removal of Rule 23A restrictions from certain “favored” banks (Spring 2007)
• The (Selectively Leaked) Shock and Awe Discount Rate Cut on Options Expiration (August 2007)
• The Bank Super SIV (Failed, October 2007)
• The Fed Term Auction Facility (December 2007)
• Bear Stearns/JP Morgan bailout and subsidy (March 2008)
• 325 basis points of rate cuts in less than six months and unprecedented additions of liquidity to defend them (Fall 2007 – Spring 2008, ultimately going to zero)
• Primary Dealer Credit Facility (March 2008)
• Reverse MBS Swaps (April 2008)
• Fannie Mae/Freddie Mac nationalization (September 2008)
• Equity investment and collateral (September 2008)
• Administrative Repeal of 23A (September 2008)
• AIG nationalization (September 2008)
• Expansion of the Fed Balance Sheet through unprecedented Treasury refinance without appropriation by Congress (September 2008)
• Central bank dollar liquidity draws (September 2008)
• Ban on short-selling 799 financial stocks (September 2008)
• The Mother-of-all-Bailouts/Taxpayer-funded Super SIV Redux (October 2008)
• Quantitative Easing, said to hold mortgage rates at or near 4% - another failure - rates actually rose (March - Present, 2009)

This is an organization that should obtain more authority?

Absolutely none of the so-called "prescriptions" to moderate or fix the mess we are in have worked nor can they, as none of them address the root cause of the problem.

In the "real world" I would be at least fired and probably under criminal investigation to determine if I had intentionally harmed the organization that I worked for.

Next up we have Joe "I've got an IQ smaller than my shoe size" Biden who said:

WASHINGTON (AP) — Vice President Joe Biden said Sunday that "everyone guessed wrong" on the impact of the economic stimulus, but he defended the administration's spending designed to combat rising joblessness.

Everybody eh?  Hmmm....  Gee, you folks in the mainstream press don't read many Tickers, do you?  Or, for that matter, Mish Shedlock, who has pretty-well nailed this as well.  Both of us, along with a few others, have consistently been right since this entire load of garbage began.  You can look at the Tickers from January and February of this year, you can look at them from 2007, or from 2008.

A few examples?  Shall we set the wayback machine to February 10th?

You stood in front of the American Public and lied through your damn teeth.  You claim that America faces a "catastrophe" if we don't pass your bill - but its not YOUR BILL, its Pelosi's and Reid's bill - a bill full of PORK and BS.

Perhaps January 24th tickles your fancy:

You can't use credit to pay bills in a sustainable fashion.  That is, pulling forward demand is destructive to the economy and paying principal and interest ("Bills") with the issuance of yet more credit is suicidal.

Or perhaps you prefer January 5th:

“There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.” Ludwig von Mises

....

This is mathematics folks, not politics.  The mathematical facts do not care if you're Republican, Democrat or Martian.  Anywhere and everywhere there is a capitalist economic system where people have recognized the right to own, control and direct the use of private property with the intention of making a profit such a cycle is inevitable and interference with liquidation of "bad bets" always results in more severe economic damage to the system as a whole.

Maybe you'd prefer September 23rd, 2008?

Of course Bernanke said that if the bailout isn't passed the economy will contract.  What he didn't say, but should have, is that it is going to contract anyway (bailout or not), and in fact already is.  We are in a recession now and this is in fact unavoidable as the bad debt must be defaulted.

I could keep going, but you get the point I'm sure.  The entire record - all of it, every single post - is here for you to peruse.  Have at it, and judge me on my record, then compare against Bernanke, Obama, Pelosi, Reid, Paulson, Geithner, Bush, McCain or all of your "vaunted" economists who have led you down the primrose path. 

I'll put my record up against any of them.

Nor is the Federal Government alone.  California is being stupid again as well:

California is imposing a 90-day moratorium on housing foreclosures under a new law that takes effect Monday.

Yet another attempt to "kick the can" while explicitly ignoring the cause of the problem - excessive debt and unsupportable valuations caused by fraud.

The media doesn't help.   The WSJ has been reporting an entirely-fictional "P/E" ratio on the major indices for months, ignoring investment and credit losses (using what is called "operating earnings"), which is fundamentally dishonest.  What - a loss that is caused by writing crap loans didn't really happen?  Since when?

This has been somewhat corrected - I say "somewhat", because the numbers are still wrong.  The last check I made of the S&P 500 on "as reported" earnings (a month or so ago) pegged the P/E over 100.  But now the WSJ's "data page" is showing the Nasdaq at 34.7, the S&P at 36.4, and the Russell 2000 as "nil".

Two questions: What possible benefit to the readers of the paper does the WSJ bring by distorting market P/E ratios, and why the sudden change back to including credit losses?  None of this was announced anywhere; unless you watched the footnotes, you'd have never caught it.  And exactly who is Birinyi Associates (their "data provider" for this), and where is the disclosure of their methodology and math?  Since the WSJ is the nation's "business paper of record" would really be that hard for their business desk to do this work themselves?  Well, no, but then they'd be responsible for it.  "See duck duck!"  A most-honest report from S&P itself is found at this link; why doesn't the WSJ simply use the folks who publish the index?

Finally, how do you like owning stocks with a P/E of 36. 

Look folks I realize nobody likes hearing this, but I'm not going to quit saying it: asset prices that are pumped due to financial fraud, which then entice people to take on unsupportable and insoluble debt using them as collateral always leads to a huge economic bust. 

In fact, every single economic depression since the founding of our republic and before, back to Tulip Mania, in fact was caused by this very same thing.

There is no means to "stop" the corrective process, one can only make it worse.  The best, proper, and indeed only choice is to force all the bad debt into the open, force those who both lent and borrowed imprudently to go bankrupt, and allow asset prices to collapse back to sustainable levels.

Whether you want a different solution does not matter. 

The math does not permit any other outcome.

When, my friends, will Americans demand that the children who have been playing with firearms and have now (economically) shot anywhere from 9% to 18% of the economy's jobs (depending on whether you prefer U-3 or U-6) be disarmed and ejected from the public sphere, allowing adults into the room and for the inevitable unwinding of this speculative debt bubble to occur - an unwind that must be completed before we can return to a sound economy?

Americans refused to demand it in the summer of 2007.

They refused in the spring of 2008.

They decided to acquiesce when TARP was passed in the fall of 2008.

They believed in "hope and change" in the first months of 2009, and the "benefits" of the stimulus bill.

And now you're being sold down the river once again.

America has two choices: continue to suffer as a direct consequence of the charted course of this ship of fools and its infantile crew, or demand that they all be thrown into the brig and that the adults be allowed to read the charts, view the depthfinder, radar and compass, and chart a course that, while not easy and not without pain, will lead to success - and an economic recovery.

The choice is yours America.

How much more of this will you accept?