Consumer Revolt

From Market-Ticker. Count me in!

Perhaps its time.

There have been a number of people on the forum talking about this, with one of the most recent converts being “iflyjetzzz”.

Look, we can rant and rave about market manipulation and government-sponsored games. We can petition the SEC, the FBI and Congress. We can demand that they stop it all we want.

But they haven’t and likely won’t until and unless America gets pissed off enough to force them to act.

So how do we make that happen, yet remain within the law?

Its not that hard, and in the intermediate and longer-term it would be incredibly positive for our economy and nation.

We go on a consumption strike until and unless our demands are met.

What are our demands? Here’s the list:
All the financial fraudsters are investigated, indicted, and prosecuted. This includes the con artists in CONgress who got “special deals” from Mozilo and his “Friends of Angelo” program (and who are blocking a subpoena to BofA as it would implicate them), it includes those past and current members of Government Sachs, and it includes all those other financial “professionals” who deceived Americans and others with their sale of toxic exploding mortgage products along with the securities supposedly backed by them.
Glass-Steagall is restored, in full, and all the firms that can’t exist under it are broken up. Period.
The insider-trading that has become blatant and outrageous is prosecuted where illegal and where not, is made illegal and then prosecuted, with the focus being on the size of the scam. This includes obvious circumstances such as August 2007 (Bernanke’s phone logs were FOIA’d) where trading patterns made clear that “certain someones” had foreknowledge of the discount rate cut along with Congresspeople who were briefed on the TARP and within hours or days made significant stock trades. Today if you’re Martha Stewart you’re prosecuted where if you make millions in an hour by exploiting government information “leaks” the SEC and FBI look the other way.
The Government withdraws all of its backstopping of financial firms who created this mess. All of it. If you’re a bank or other firm and did something imprudent, you fail. Period. This is true whether you’re a small regional bank (as is happening now; 5 in the last week) or a big behemoth like Citibank or Bank Of America. No “special deals”, no “special guarantees”, nothing of the kind. If the government wishes to avoid “systemic risk” then the government regulators can do their damn job.
The Fed disgorges all of its improperly-acquired MBS and other related securities. If it doesn’t have a full-faith-and-credit guarantee and was bought, it is disgorged – period.
The Fed agrees to full annual audits without exception.
Those people inside government who conspired with certain bankers to cook the books, along with those in the banks who did so, go to jail. Our own Office of The Inspector General in the government has confirmed that there was an active conspiracy to break the law within the OTS, but not one indictment has been issued.
Those who committed fraud in the creation of this economic mess, whether they be mortgage lenders, those who packaged up securities while intentionally omitting credit information, those in the real estate industry to pressed for appraisal fraud and others are investigated, prosecuted and if convicted jailed. All of them.
Losses are born by those who made bad decisions, not the taxpayer generally. Those who made good decisions get to reap the benefits, while those who made bad decisions eat the losses. No exceptions.
Government cuts the annual budget deficit to zero. If government wants to blow the money it has to have the money. If they can’t raise the money they don’t spend it. It is time to live within our means and hold government to account for its profligate spending along with promises of “benefits” they know they cannot actually deliver down the road such as Medicare Part D.

Until then the position of those who wish to join is simple: No non-essential purchases of anything are made. Period.

What’s an essential purchase? Here’s the list:
Enough food to eat at home. No more eating out.
Rent and utilities.
Essential medical services.
Enough fuel to get to and from work.

In addition any “excess withholding” is stopped; if you are getting a big fat refund from the IRS every year you are loaning the government your money at zero interest until April. Stop that; its stupid. Change your W4 so you get exactly nothing back or owe a tiny amount; if you pay estimates pay only that which you must and not one dime more.

Note that it is unlawful to use your W4 to intentionally under-withhold, but you are in fact not obligated to pay one more dime in tax than you actually owe. There is nothing wrong with adjusting withholding to match (as close as you reasonably can) your actual tax obligation.

Put the money you save (it will be a lot!) into a non-TARP Credit Union if you have one available to you, or a non-TARP local bank if you do not. Spend none of it.

If we pledge to do this and not resume normal spending habits on wants as opposed to needs until and unless the budget is balanced, the bailouts are rolled back and those who committed fraud go to prison the government will be forced to act as they will simply run out of money.

They cannot force you to buy that new iPOD or flatscreen TV, or to take an expensive vacation.

Consumer spending is 70% of the economy.

This is a consumer weapon that is more powerful than any other means of peaceful protest. Strangling the government and private business’ ability to steal from us all by cutting off their revenue will force reform, and has the additional benefit of being exactly what this nation needs to provide a strong capital formation base when that reform is complete.

If businesses want my money they can join in the chorus of voices demanding that government stop the looting and start prosecuting.

Will any of us be perfect in this endeavor? No. There will be the occasional indulgence I’m sure no matter who we are. But I’m willing to bet we can shrink consumption – each and every one of us – by at least 10% without any real personal pain at all, and if we do so it will send an indelible message to those in government and business: cut that crap out!

July 4th is Independence Day.

Let’s make it a day of freedom from the banksters and government financial marauders.

Who’s with me?


Citizens of The Corporate State

Check out the board members of UBS, Barry. You’ll get your answer there. It seems that there is a group of people who are recycled all over the place. So Phil Gramm is just one of these corporate insiders, or a member of the corporate state, if you want.

We have on this board, among others:

  • Helmut Panke, Microsoft
    formerly BMW
  • Michel Demare, ABB
    formerly Baxter Europe
  • William G. Parrett (Blackstone Group, Eastman Kodak)
  • Sally Bott (BP)
    formerly Citi, Barcleys, Marsh & McLennan
  • David H. Sidwell (Fannie Mae)
    formerly JP Morgan, Morgan Stanley

So, once a member of that state, always a member of that state. They take care of their own.
But you know that Barry, do you.

    Odd Things Happen or Almighty Algorithms

    One might swear that this is the same graph with different labels. This is either a data error, or a very odd coincidence indeed.

    Chances are that what we see here are the algorithms at work. So, any question about whether or not these things can be programmed to deliver any result one wishes have just been answered.
    Note to self: Tin foil alert, must adjust hat.

    DJIA as of June 29, 2009

    DJIA as of June 29, 2009

    S&P 500 as of June 29, 2009

    S&P 500 as of June 29, 2009

    Colorado Firm Expands Recall of Beef Products

    The U.S. Food Saftety and Inspection Services releases this information on June 24, but reissued it today (June 28, 2009)  because the company concerned expanded the recall to include more products. See FSIS news release here.

    Recall Release CLASS I RECALL

    Congressional and Public Affairs
    (202) 720-9113
    Bryn Burkard

    Editors Note: This recall release is being reissued to expand the June 24 recall to include approximately 380,000 pounds of assorted beef primal products.

    WASHINGTON, June 28, 2009 – JBS Swift Beef Company, a Greeley, Colo., establishment is voluntarily expanding its June 24 recall to include approximately 380,000 pounds of assorted beef primal products that may be contaminated with E. coli O157:H7, the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS) announced today.

    Together with traceback information and laboratory data, the recall is being expanded as a result of FSIS’ cooperation with the Centers for Disease Control and Prevention (CDC) in an ongoing investigation into 24 illnesses in multiple states, of which at least 18 appear to be associated. This investigation prompted the company to re-examine the effectiveness of their food safety system for the April 21 production of beef primals, and they are conducting this recall out of an abundance of caution as the safety of the products produced on a portion of that day could not be assured.

    The beef products were produced on April 21, 2009 and were distributed both nationally and internationally. A list of the products subject to the expanded recall attached.[PDF Only]

    Each box bears the establishment number “EST. 969” inside the USDA mark of inspection as well as the identifying package date of “042109” and a time stamp ranging from “0618” to “1130.” However, these products were sent to establishments and retail stores nationwide for further processing and will likely not bear the establishment number “EST. 969” on products available for direct consumer purchase. Customers with concerns should contact their point of purchase.

    The recalled products include intact cuts of beef, such as primals, sub-primals, or boxed beef typically used for steaks and roasts rather than ground beef. FSIS is aware that some of these products may have been further processed into ground products by other companies. The highest risk products for consumers are raw ground product, trim or other non-intact product made from the products subject to the recall.

    E. coli O157:H7 H7 is a potentially deadly bacterium that can cause bloody diarrhea, dehydration, and in the most severe cases, kidney failure. The very young, seniors and persons with weak immune systems are the most susceptible to foodborne illness. Individuals concerned about an illness should contact a physician.

    Media and consumer questions regarding the recall should be directed to the company’s Consumer Hotline at (800) 685-6328.

    Consumers with food safety questions can “Ask Karen,” the FSIS virtual representative available 24 hours a day at The toll-free USDA Meat and Poultry Hotline 1-888-MPHotline (1-888-674-6854) is available in English and Spanish and can be reached from l0 a.m. to 4 p.m. (Eastern Time) Monday through Friday. Recorded food safety messages are available 24 hours a day.

    World Bank Generously Finances China

    Wonders never cease. The World Bank has approved loans for a railway project in China and a water quality improvement project in Shanghai. Both loans have a worth of $300 mln and $200 mln, respectively.

    The NanGuang Railway Project thus benefits from $300 mln loan, with maturity 25, and a grace period of 5 years. Here is the World Banks description of the project.

    The NanGuang Railway Project aims to provide additional transport capacity and reduce transport time between China’s less developed southwest region and the relatively more developed Pearl River Delta region by connecting the existing railway networks in these two regions. Specifically the loan will finance the construction of about 400 km of double track electrified railway from Litang West Station (about 95 km northeast of Nanning) to New Zhaoqing Station in Guangdong province; and partially finance 62 km of four-track railway being constructed between New Zhaoqing Station and Sanyanqiao Station (near Guangzhou). The World Bank will provide international experience and advice in the process. This important project is part of the China’s economic stimulus program in response to the global economic crisis. “The NanGuang Railway project will not only support further regional economic development by connecting the prosperous coastal region to the interior,” said John Scales, Transport Coordinator from the World Bank Office, Beijing. “But it also provides a platform for the continued high-level engagement that began 25 years ago between the Bank and the Chinese Government on railway development, while simultaneously supporting operational development of the Chinese railway network.”

    In addition, the Worldbank also finances $200 for the Shanghai Urban Environment Project:

    The Shanghai Urban Environment Project, the third phase of the Bank’s Adaptable Program Loan (APL) started in 2003, will focus on increasing the secure provision of good quality water, reducing pollution load discharged without treatment into water sources, and facilitating sustainable investments in environmental infrastructure in suburban areas of Shanghai Municipality. Through the first two phases, the Bank supported several key infrastructure investments and institutional and policy reforms in the water, wastewater, and solid waste sectors. The new US$200 million loan will finance the construction of infrastructure projects such as Nanhui Raw Water Conveyor and Puxi Trunk Sewer, further contributing to Shanghai’s goal of building a resource-efficient and environmentally sustainable city and hosting a successful “World Expo 2010: Better City – Better Life”.

    How generous. The Chinese sit on dollar reserves of some $ 2 trillion, get criticized by the same World Bank for their protectionism, but they still get a credit from the World Bank.

    As the Neue Zürcher Zeitung writes:

    In fiscal year 2008 the Organization [WorldBank], which purports to fight poverty, gave loans worth $1.5 bln to the Middle Kingdom, which equaled around 6% of total loans given.  According to the World Bank, the goal of these loans is to further Chinas Integration into the world economy. Questionable, however, is that with the scarcity of resources they are giving money to a government, which can at any time afford to spend tens of billions on infrastructure projects to stimulate internal demand.

    I agree.  Zoellick is an ex-Goldman Sachsie. Goldman Sachs is very fond of China. China is a command economy that can force projects throught without regard to people’s wishes, which corporations in general, and banks in particular, adore very much.

    So if you want to prove that the Chinese economic and societal model is superior to everything else, what do you do?
    Well, you make them succeed at any cost, and see to it that all others fail. Oops, sorry I think I have to adjust my tin-foil hat, it’s not working properly today.

    Nestlé Refused FDA Records Requests

    About a week ago, I posted a FDA warning where the agency warned about Nestlé cookie dough.
    The company then claimed that (emphasis added):

    Nestlé immediately initiated a voluntary recall of refrigerated and frozen Nestlé Toll House cookie dough products as a precautionary measure.

    These products are sold predominantly in the US, although small quantities are also exported to Puerto Rico, Bermuda, Bahrain and Singapore.

    While the ongoing CDC epidemiological analysis links these illnesses to the consumption of raw cookie dough, the E. coli strain implicated in the investigation has not been detected in any Nestlé product. Nestlé is cooperating fully with the FDA and CDC to resolve the issue and, as soon as the situation has been clarified, Nestlé USA will put this much-loved product back on the market.

    Nestlé, being a respected company, one might be inclined to believe them. However, an article in the Washington Post calls this claim into doubt: Continue reading

    The Strange Story of the Smuggled Bonds

    It is indeed strange. After the initial press releases the story fell completly silent. Neither the Fed, the Treasury nor the Italian Guardia di Finanza, who busted the two Japanese at the Swiss-Italian border, had much to say since then.
    The Italian authorities are completly silent, while the US Treasury by way of a short statement by a Stephen Meyerhardt,  claimed that the securities were “clearly fakes” yet while admiting that “they only saw the pictures of them on Internet.”

    So what’s going on here?

    Of course, you’ll find mostly rumors. However, a promising source,, gives a run-down of a the few facts we know and some mild specualation, however, without substantiating it.

    So, let us start with what we know and what is confirmed. We know that the two were busted on June 4, 2009. According to

    According to them [GDF], the two Asian men stopped at Ponte Chiasso (Italy) on their way to Chiasso (Switzerland) were indeed Japanese nationals, one from Kanagawa Prefecture (central Japan) and the other from Fukuoka Prefecture (western Japan).
    The only other certainty is that both men were released after their identity was established.
    If police had enough elements to conclude that the securities were fakes (and this is true even for lower denominations or net worth), it had to arrest the two men. Failure to do so would have meant charges for the police officers involved.
    If this was not the case, then the two men were released because police authorities were convinced that the securities were real. In fact under Italian law, the authorities could not arrest the two Japanese nationals but could only impose a fine worth 40 per cent of the value of anything above 10,000 €. then goes on to draw conclusions:

    All that AsiaNews can conclude is as follow:

    The first report by an international news agency is dated 12 June and is by Bloomberg. It includes something odd. Some of the seized securities were issued in 1934; a detail not found in the statement issued by Italy’s financial police.


    Conversely, we do know that the US treasury did issue one billion dollar Kennedy Bonds less than ten years ago, like those mentioned in the police’s official statement of 4 June, but whether the latter are real or not is something that has not yet been officially determined.


    Two weeks after the story initially broke Bloomberg quoted a US Treasury official, Stephen Meyerhardt, who could claimed that the securities were “clearly fakes”. Yet in another interview Meyerhardt said that he had not seen the securities in person but had relied on a photo on the internet to reach his opinion.

    Also, two weeks into the affair, after Italian and US authorities were informed about the seizure, no one from the US Treasury has yet to come to Italy to check out their authenticity; indeed such a simple operation if we are to believe Mr Meyerhardt since he could reach that conclusion just by looking at an internet photo and this against the backdrop of the Italian financial police which claims that if the securities were indeed counterfeit they were so well done that they were indistinguishable from real ones.

    What this means is that either the Italian policemen are totally incompetent (which is not very likely) or that Meyerhardt’s statement should be taken with a pinch of salt.

    Since no official statement has been forthcoming from the authorities, all we have to rely on is an interview by the commander of the Guardia di Finanza detachment in Como to a news agency in which he expressed his own opinion, not that of his force, which is thus not formally bound by what he said. Even then, as far as the authenticity of the securities is concerned all Colonel Mecarelli would say is that Italy’s financial police “is waiting for our US colleagues to determine whether the bonds are real or forgeries.”

    Confidential sources, whose reliability AsiaNews could not confirm, claim that one of the two Japanese stopped and then released in Ponte Chiasso was Tuneo Yamauchi, brother-in-la[w] of Toshiro Muto, who was until recently Deputy Governor of the Bank of Japan, which of course does not automatically mean that the securities are real.However, other sources are saying that for Italian authorities they are real and that Rome is unwilling to play along with the US Federal Reserve, which described them as fakes without taking a peak at them, except via the internet.What seems clear is that the Federal Reserve has a vested interest in helping the Bank of Japan get the Securities back to avoid paying the Italian fine. The Fed in fact is having a hard time trying to sell its bills on various markets and the Japanese are its main buyers.

    Are their sources credible? I don’t know, but is the US Treasury credible? Certainly not.

    [Source:, Italy]