[1039] The Truth about . . . $134.5 billion in bonds

Posted on June 13, 2009 by stacyherbert| 21 Comments

Stacy Summary: Reporting from outside our local Paris cafe, our London Truth About Markets.

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21 Responses to [1039] The Truth about . . . $134.5 billion in bonds

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Photoception | June 14, 2009 at 5:23 pm |

@ solomio

Money is credit ->the credit bubble popped-> there is no liquidity->real estate prices are falling-> and in the end…

if credit doesn’t continually expand forever, we have deflation because there isn’t enough money(credit) entering the system to pay the interest on all previous debts. So if we all can’t get a new credit card, the governments have to step in to increase the debt levels.
Chris | June 14, 2009 at 4:07 pm |

Max,

Loved your comparison of the Shadow banking system with dark matter and dark energy. For those not familiar, Max is correct on this: only 10% of the matter in the universe is visible, 90% of the matter in the universe is “dark” or rather invisible.

http://en.wikipedia.org/wiki/Dark_matter

And, according to recent Supernova observations, if we consider the total amount of matter PLUS energy ( Energy = Mass x speed of light squared), then there appears to be a huge source of energy pushing the universe apart which dwarfs all known mass and energy in the universe. This DARK ENERGY is larger than all mass, including all dark matter.
Mr Supergeek | June 14, 2009 at 10:45 am |

Yeah….The cafe recordings are cool and interesting…I imagine recording indoors is a lot more relaxing but ….If you’ve got an edirol you might as well get some use out of it….I think I have edirol envy.
MC | June 14, 2009 at 10:21 am |

Another very interesting conversation at the cafe…thanks guys!

Mark
George McGriff | June 14, 2009 at 9:43 am |

Max-

Re: the reference to ‘slippage’

Back when I worked in retail, the term used for employee theft was ‘shrinkage’
harry_w | June 14, 2009 at 8:28 am |

I think Le Monde Diplomatique offers worthwhile views. e.g. on the key role of think tanks and foundations in the intellectual battle when neo-liberals seized conservative banner to oppose the social democratic/Keynesian consensus that was then dominant.

LMD, January 2002
HOW NEO-LIBERALISM TOOK OVER THE WORLD
There is an alternative
Radical conservatism was proclaimed dead in the early 1960s. It wasn’t even sleeping. It was planning, successfully, to become the orthodoxy of the next 40 years. Now we have to nerve ourselves to challenge it.
by Serge Halimi

…Without the painstaking work of “extremists” such as Goldwater and the thinktanks run by Friedman and Friedrich von Hayek, no one could have predicted that the stagflation of the 1970s would be interpreted as it was. Moments of crisis challenge the status quo.
Thinking the unthinkable

Conservative groups such as the Heritage Foundation, the Cato Institute, and the Société du Mont Pèlerin (founded by Hayek) dared to think the unthinkable. In the end, the party in power would be irrelevant if political parties were forced to fashion business-friendly policies; …

…With each day our world edges closer to the dreams of Goldwater, Reagan, Thatcher, Hayek and Friedman. Such figures had weapons that opponents of neo-liberal globalisation could never hope to muster; business interests are not about to finance the research activities of those who seek to overthrow them. The press, now safely in the hands of the multinationals, will do everything it can to discredit anti-establishment protesters. But the protestors do have one advantage: they know that viewing the world solely in terms of commerce is folly. For the foolish ideas of the dominant class to be replaced by the voice of reason — and the interests of most people on earth — it may take the same determination and patience shown by the free marketeers when they first dared to think the unthinkable.
————
In many ways it’s that determination which has been lacking in opponents. I think that’s why Max often laments the poverty of the intellectual opposition as neo-liberals have turned in crisis towards financial corporatism; and why Stacy often remarks on how people have remained utterly inert in the face of the greatest robbery of the common people in modern history – the privatisation of the commonwealth. They simply have no-where to go and only find hucksters like Alex Jones expressing an incoherent outrage.
Matt | June 14, 2009 at 7:13 am |

Max
The British retreat you refer to is known generally as Dunkirk (WWII). It marked the end of the Battle of France, and the beginning of the Battle of Britain
Kjr | June 14, 2009 at 3:43 am |

“The idea is of taxing a speculative activity is ridiculous. If the activity is inherantly damaging and non productive then taxing it is accepting it,”

Tobin tax does not mean accepting speculation. If you tax short term gains enough, this tax is able to finish currency speculation completely.
There is nothing wrong with floating currencies, if they change according to real economy. The problem is the speculation that can actually destroy the actual real economy from “outside”.
Mini US | June 14, 2009 at 1:09 am |

I think someone posted this comment on this site recently.
- There will be deflation of what we own and inflation of what we buy -
I assume that mostly means house prices down and everything else up.
So there, you get a little of both!

Excellent rant Max. I love it when you get on a roll like that and leave the details to Stacey. Great info and insight into whats behind the news.
Seems like a very big system to fight against, keep it up guys.
jterror | June 14, 2009 at 12:10 am |

great show guys, also appreciating stacy’s dapper new photo on OTE
ItalicBold | June 13, 2009 at 11:04 pm |

Great show. Loved hearing Paris in the background, you guys should do that again!
solomio | June 13, 2009 at 11:01 pm |

Okay, great show (max got out his zig-zag-depression)
so we are going from hyper-inflation to deflation?
Could anybody explain what deflation means?
I do understand why e.g. fractional reserve lending and
the fact that the US FED is simply printing more money
leads to hyper-inflation….
but now deflation….. I do not get this one?
Youri Carma | June 13, 2009 at 5:55 pm |

Wilhelmus Simon Petrus (Pim) Fortuyn could have been the first progressive homosexual president of The Netherlands. May I be witness God almighty!
Youri Carma | June 13, 2009 at 5:42 pm |

I Think you’re right max the cheap dutchies have become a bad example. But our very beloved homosexual darkroom lover was killed I am afraid like Kennedy. If this homosexual beloved (Also by other) had become President of the Dutchies it surely would have been a brake throughh!
Scott from Oregon | June 13, 2009 at 4:50 pm |

http://www.reuters.com/article/usDollarRpt/idUSN1151467420090611
Carpathia | June 13, 2009 at 4:45 pm |

People, please read the book YEN! From that book you can figure out exactly what is about to happen.

Japan has $4T to collect starting NOW until about 2012-2013. That $134.5b would have caused the US to default or partially default.
Youri Carma | June 13, 2009 at 3:22 pm |

The best Ponzi is those romans Printing double number, So twice whit exactly the same number printing press. Gotto honor those Italianz having the History of Ponzi!
Mike/Liverpool | June 13, 2009 at 2:16 pm |

Thanks Max/stacy……….i found that useful.
Mike
Rian Orr | June 13, 2009 at 1:58 pm |

I first heard of the Tobin tax following the EMS crisis where speculators were making money betting on currency movements. (Soros among them). The idea is of taxing a speculative activity is ridiculous. If the activity is inherantly damaging and non productive then taxing it is accepting it, you might as well tax paedophillae. With the tax we collect from the abusers we could open a hospital for damaged children. This is the kind of muddled logic that inevitablity comes from liberal/social democratic reformers.No surprise then the Tobin tax was promoted in ‘Le monde diplomatique’.
Mike/Liverpool | June 13, 2009 at 1:17 pm |

Eveing Stacy
I see its kicking off good style in Iran…………was it something Max said?
Mike