Podcast: Finally Waking Up to Reality

In my latest weekly Panzner Insights podcast, "Finally Waking Up to Reality," I discuss a number of unfolding financial, economic, and geopolitical developments that were previously (and exclusively) highlighted at my members-only site. A commercial interruption? Perhaps, but the truth, nonetheless.

As a special treat, this 30-minute program is also available to non-members. To listen now or download, please click here.

Comments

[roger]

Reality- this ever changing thing,is a mystery to most people.
"you can't step into the same river twice"

[Doable Finance]

Some folks in the world in general and the U.S. in particular just don't want to hear reality of the day so to speak.

[roger]

Reality's coup de grace.
Money no longer represents the solid value of Labor productivity, but has become a source of speculation in itself, money creates more money add infitum, so stock markets
keep going up and up and up regardless of all the bad ,terrible, economic news. A gigantic bubble in the making, much worse than the credit/real estate explosion.
Without a trusted medium of exchange, all commerce comes to a dead end.

[The cruel reality]

Goldman, Banking, Washington, and Business Ethics: Cultural Observations from Two Smiths

Corruption, facilitated by the credibility trap, is the biggest problem facing us today. That is the real entitlement. It is the belief of the elite that the power of their office is an achievement that gives them the right to lie, cheat and steal both for themselves and their friends.

Although it is important to understand that they would be shocked and insulted if you used those words to describe what they are doing.

Through a long indoctrination that starts sometimes in their families, but is most often affirmed in their schools and with their circle of friends, they learn to rationalize this sort of selective moral behaviour not as immoral but as 'the entitlement of success.' There are one set of rules for themselves and their friends, and another set of rules for the rest.

The problem which the modern world has not yet grappled is how to react to the rise of a global elite, which considers itself the children of a power above national restraints, and a law unto themselves.

Their success has been propelled by the dominance of Anglo-American financialization, and the rise of oligarchies in Russia, China, Latin America, and India. Countervailing power has been co-opted and subsumed.

They are all supported by their fiat currencies and the ability to define and allocate value at will. They have a penchant towards globalization and deregulation, to the extreme detriment of local rule, and individual choice and freedom.

http://jessescrossroadscafe.blogspot.com/2013/02/greg-smith-speaking-at-stanford-goldman.html

[A true operation]

Billionaires for Austerity: With Cuts Looming, Wall Street Roots of "Fix the Debt" Campaign Exposed

With $85 billion across-the-board spending cuts, known as "the sequestration," set to take effect this Friday, a new investigation reveals how billionaire investors, such as Peter Peterson, have helped reshape the national debate on the economy, the debt and social spending. Between 2007 and 2011, Peterson personally contributed nearly $500 million to his Peter G. Peterson Foundation to push Congress to cut Social Security, Medicare and Medicaid — while providing tax breaks for corporations and the wealthy. Peterson’s main platform has been the Campaign to Fix the Debt. While the campaign is portrayed as a citizen-led effort, critics say the campaign is a front for business groups. The campaign has direct ties to GE, JPMorgan Chase, Morgan Stanley and Goldman Sachs. Peterson is the former chair and CEO of Lehman Brothers and co-founder of the private equity firm, The Blackstone Group. For more, we speak to John Nichols of The Nation and Lisa Graves of the Center for Media and Democracy. [includes rush transcript]

http://www.democracynow.org/2013/2/26/billionaires_for_austerity_with_cuts_looming

[Reality sucks]

Can You See It Coming? “Fund’Em”

A long-time colleague sent me an article about a former Countrywide Mortgage employee turned whistle-blower. The whistle-blower was completely amazed that Angelo Mozilo, Countrywide’s CEO and the country’s pioneer in the massively fraudulent mortgage bubble, was never put on trial. Not only that, but the whistle-blower’s $3+ million court case award for wrongful termination from Countrywide/Bank of America was recently overturned by California’s Appellate Court. You can read about just how corrupt Countrywide was and other sordid details here: LINK

My response to the above article was this:

Don’t hold your breath on the Judiciary Committee hearing of Holder. Holder will be well rehearsed and we already know what the questions will be. Don’t forget, Holder is the guy who wrote the Marc Rich pardon letter that Clinton signed as he was walking out of the Oval Office for the last time.

This country is completely corrupted from State legislatures to the Supreme Court. Look at that verdict overturn in the article. Corrupted court system. The apparatus has been put in place, for those in a position to do so, to steal everything before the country collapses. IRA/401-k’s are next.

The bottom line is that the citizens of this country are ultimately to blame. Guys like us sit around and dig up the evidence, yet we do nothing. 95% of the middle class could give a shit. They’re robotic drones who basically go through the day lapping up what’s fed to them and losing themselves in prime time garbage tv.

Anyone who thinks our system can be saved is hopelessly naive or tragically ignorant.

http://truthingold.blogspot.com/2013/03/can-you-see-it-coming-fundem.html

The Hollowing Out of Private-Sector Employment (March 5, 2013)

The vast majority of the bottom 90% don’t know because they spend their waking hours trying to survive and can’t do anything about it were they to know. Those who do know tend to be well-positioned economists, politicians, and similar types who have no financial or professional incentives to share the information because no one in the top 1-10% cares to know or do anything about it.

How do you maintain a mass-consumer, debt-based economy with only half of the labor force with full-time private employment outside of health care, accelerating automation of labor and loss of incomes and purchasing power, 40% of the youth with little or no purchasing power, and 90% of the population relying in old age on transfer payments from the wages of younger wage earners and their struggling employers? You can’t.

So the mass-consumer economy and welfare-state for the bottom 90%, elderly, underemployed, disabled, young, and poor is not sustainable. Now what?

http://www.oftwominds.com/blogmar13/employment3-13.html

[More Reality]

The Government Has It Bass-Ackwards: Failing To Prosecute Criminal Fraud by the Big Banks Is Killing – NOT Saving – the Economy

U.S. Attorney General Eric Holder said today:

I am concerned that the size of some of these institutions [banks] becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy

As we’ve repeatedly noted, this is wholly untrue.

If the big banks were important to the economy, would so many prominent economists, financial experts and bankers be calling for them to be broken up?

If the big banks generated prosperity for the economy, would they have to be virtually 100% subsidized to keep them afloat?

If the big banks were helpful for an economic recovery, would they be prolonging our economic instability?

In fact, failing to prosecute criminal fraud has been destabilizing the economy since at least 2007 … and will cause huge crashes in the future.

After all, the main driver of economic growth is a strong rule of law.

The government that permits this to happen is complicit in a vast crime.

Galbraith also says:

There will have to be full-scale investigation and cleaning up of the residue of that, before you can have, I think, a return of confidence in the financial sector. And that’s a process which needs to get underway.

Galbraith recently said that “at the root of the crisis we find the largest financial swindle in world history”, where “counterfeit” mortgages were “laundered” by the banks.

As he has repeatedly noted, the economy will not recover until the perpetrators of the frauds which caused our current economic crisis are held accountable, so that trust can be restored. See this, this and this.

No wonder Galbraith has said economists should move into the background, and “criminologists to the forefront.”

The bottom line is that the government has it exactly backwards. By failing to prosecute criminal fraud, the government is destabilizing the economy … and ensuring future crashes.

http://www.washingtonsblog.com/2013/03/the-government-has-it-bass-ackwards-failing-to-prosecute-criminal-fraud-by-the-big-banks-is-killing-the-economy.html

[Smell the coffee]

Elizabeth Warren: What Level of Criminality Will It Take to Shut Down a Bank, (Mr. President)?

But since Eric Holder is Obama's personal representative, almost certainly acting in consultation on financial matters with the Treasury Secretary, the offensive corruption in the financial sector is the result of the President's policies. And at this point he has no one else to blame.

And so Senator Warren might as well ask: "Mr. President, to what level of criminality must a Bank, and its management, rise before you would be willing to indict and prosecute it? And why are you so zealous in prosecuting whistleblowers and reformers, but so tolerant of even extreme examples of white collar financial crime?"

http://jessescrossroadscafe.blogspot.com/2013/03/elizabeth-warren-what-level-of.html

[roger]

Waking up to reality? Dow 14,397.07 !
As I have said before, humanity makes it's own destiny but is incapable of controlling it. Society blinded by the efficiency of Capitalism the most productive system ever and
the most destructive. Corruption is not the problem it's a symptom of a major structural deficiency.

[Hell to Pay]

Bankers Above the Law. . .There Will be Hell to Pay

4) A key point of my recent book, Lawless Capitalism, is that "investment and financial markets can only be built upon trust." How can any investor trust a financial system dominated by megabanks that are above the law? Capitalism requires trust and trust can only be inspired by a rational rule of law applicable to all. Exemptions for the most economically powerful are likely to be the most economically damaging as they control the most concentrated resources. In other words, giving legal indulgences to those with trillions under their control means that trillions will be deployed with no care towards illegality. Only profit, no matter how cravenly grabbed, will matter. The American people are already rapidly losing trust in the system. In a recent Northwestern/Univ. of Chicago survey, only 22% of Americans trust the financial system. Holder's bold power-grab on behalf of the banks is sure to accelerate this unraveling of trust. That means severe economic pain.

5) Another key point of Lawless Capitalism (as well as Daron Acemoglu and James Robinson's instant classic Why Nations Fail) is that laws and regulations must tether elite interests to macroeconomic growth and under conditions of high inequality that challenge intensifies. Holder's statement is simply further proof that elites will eschew the law and seek to operate outside legal constraints once too much economic wealth is concentrated in too few hands. We learned that in the run up to the subprime collapse and Holder seems intent on repeating that painful lesson. This can be termed the injustice of inequality.

http://corporatejusticeblog.blogspot.com/2013/03/bankers-above-law-there-will-be-hell-to.html

[profit trumps loyalty to country]

If Corporations Don’t Pay Taxes, Why Should You?

Go offshore young man and avoid paying taxes. Plunder at will in those foreign lands, and if you get in trouble, Uncle Sam will come rushing to your assistance, diplomatically, financially and militarily, even if you have managed to avoid paying for those government services. Just pretend you’re a multinational corporation.
That’s the honest instruction for business success provided by 60 of the largest U.S. corporations that, according to a Wall Street Journal analysis, “parked a total of $166 billion offshore last year” shielding more than 40 percent of their profits from U.S. taxes. They all do it, including Microsoft, GE and pharmaceutical giant Abbott Laboratories. Many, like GE, are so good at it that they have avoided taxes altogether in some recent years.

They want a huge U.S. government to finance scientific breakthroughs, educate the future workforce, sustain the infrastructure and provide for law and order on the home front, but they just don’t feel they should have to pay for a system of governance, even though it primarily serves their corporate interests. The U.S. government exists primarily to make the world safe for multinational corporations, but those firms feel no obligation to pay for that protection in return.
Think of that perfectly legal and widespread racket when you go to pay your taxes in the next weeks, and consider that you have to make up the gap left by the big boys’ antics. Also, when you contemplate the painful cuts coming because of the sequester that undoubtedly will further destabilize the economy, remember that, as the Wall Street Journal estimated, the tax savings of just 19 of those companies would more than cover the $85 billion in spending reductions triggered by the congressional budget impasse. The most skilled at this con game are the health care and technology companies, which, as a Senate investigation last year revealed, have become quite expert at shifting marketing rights and patents offshore to low-tax countries.

http://www.truthdig.com/report/item/its_good_to_be_the_multinational_corporations_20130312/

[Alternate reality]

Universities Pile on Faculty Perks as Student Costs Grow

The University of Chicago paid James Madara $2.5 million in severance when he stepped down in 2009 as medical dean and hospital chief. Madara, who remained on the faculty, later joined the American Medical Association.

Congress is taking a look at such payments following disclosures that Jacob Lew, the new U.S. Treasury secretary, received a $685,000 bonus when he left New York University and had $1.5 million in housing loans from the school.

Harvard and Stanford universities also offer real-estate loans with sweet terms, records show. While the amounts are small relative to university budgets, the perks insulate faculty and administrators from the costs upsetting many middle-class families, said Jonathan Robe, a research fellow at the Center for College Affordability and Productivity in Washington.

“It certainly gives the public a clear example of how out of touch some universities are,” Robe said. “Parents will think, ‘Here I am scraping by, raiding my retirement plan to pay for college. Why are they making me do this just to enrich these executives?’"

http://www.businessweek.com/news/2013-03-12/universities-pile-on-faculty-perks-as-student-costs-grow

[sienna]

I agree with the guy from http://sentiment-trader.blogspot.com who is consistently right with the market. He calls for people to wake up and go against most traders, and analysts. He says if goldman say sell, its is most likely they are buying and visa versa. I think when you look at the evil world around money, its gunna get worse and anyone predicting a financial crisis 2.0 is spot on the mark. Not too far till we see that one play out.

[Talk about evil money]

A Tale of Two Londons

Who really lives at One Hyde Park, called the world’s most expensive residential building? Its mostly absentee owners, hiding behind offshore corporations based in tax havens, provide a portrait of the new global super-wealthy.

To answer her question and to understand why so much of the world’s money goes to London in the first place, you need to go back hundreds of years, to the emergence of what must be the most peculiar, the oldest, the least understood, and perhaps one of the most important institutions in the menagerie of global finance: the City of London Corporation. It is the local authority for “the Square Mile,” the pocket of prime financial real estate centered on the Bank of England and located about three miles to the east of Knightsbridge, along the Thames River. But the corporation is also much more, its identity embedded in—and slightly apart from—the British nation-state. The corporation has its own constitution, “rooted in the ancient rights and privileges enjoyed by citizens before the Norman Conquest, in 1066,” and its own lord mayor of London—not to be confused with the mayor of London, who runs the Greater London metropolis, with its eight million inhabitants. One sign of the City of London’s distinct identity is the fact that the Queen, on official visits there, will stop at the boundary of the Square Mile, where she is met by the lord mayor, who engages her in a short, colorful ritual, before she may proceed. Most Brits see this merely as a relic from a bygone age, a show for the tourists. They are wrong.

The lord mayor’s principal official role, his Web site says, is to be “ambassador for all UK-based financial and professional services.” He lobbies far afield, with offices in Brussels, China, and India, among other places, the better to “expound the values of liberalization” far and wide. The City Corporation and closely linked think tanks issue streams of publications explaining why finance should be less tethered by taxes and regulation. The corporation also has its own official lobbyist, with the delightfully medieval-sounding name of The Remembrancer (currently one Paul Double), lodged permanently in Britain’s Parliament. Local elections in the City are unlike any other in Britain: multi-national corporations vote alongside and vastly outnumber the tiny borough’s 7,400 human residents.

Over the centuries the City has thrived, thanks to a simple advantage: it has had money to lend when governments or monarchs needed it. So the City has been granted special privileges, allowing it to remain a political fortress withstanding the tides of history that have transformed the rest of the British nation-state. It has nurtured a British tradition of welcoming foreign money, with few questions asked, and so has for centuries attracted the world’s wealthiest citizens. “There the Jew, the Mahometan, and the Christian transact together,” Voltaire wrote in 1733, “as though they all professed the same religion, and give the name of infidel to none but bankrupts.”
http://www.vanityfair.com/society/2013/04/mysterious-residents-one-hyde-park-london

[ponzi capitalism]

Banksters Smoke Bellybutton Lint (E418)

In the second half of the show, Max Keiser talks to Steve Keen, author of Debunking Economics, about central bankers smoking their own belly button lint with Ben Bernanke behaving like an Easter Islander trying to rescue the past. Professor Keen says we need to get back to a capitalism where we borrow to build a factory not to build a derivative to rip someone off.

http://youtu.be/rXI4BlAfHrY?t=13s

[Wants people to wake up]

Dr. Paul Craig Roberts

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2013/3/16_Dr._Paul_Craig_Roberts.html

[Smell the coffee]

Chelsea Clinton Buying $10 Million NYC Apartment

File under: It's a wonderful world for children of elitists and crooked politicians,

Chelsea Clinton is buying a $10.5 million spread right across the street from Madison Square Park, reports NyPo. The apartment is 5,000 square feet and is located in the Whitman.

http://www.economicpolicyjournal.com/2013/03/chelsea-clinton-buying-10-million-nyc.html