Gold and silver were a little weak to flat today for the end of month.
FOMC announcement tomorrow and possibly something from the ECB on Thursday.
Rough seas ahead.
"I was being called to surrender the very citadel of my self. I was completely in the dark. I did not really know what repentance was or what I was required to repent of. It was indeed the turning point of my life. God had brought me to my knees and made me acknowledge my own nothingness, and out of that knowledge I had been reborn. I was no longer the centre of my life, and therefore I could see God in everything." Bede Griffiths
"We had a gentlemen's agreement. My accomplices cheated me!"But it does illustrate the familiar axiom: There is no honor among thieves.
"This is not a victimless crime. I'm going to jail!"
“The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least to neglect, persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.”
Adam Smith
"The suspicions that the system is rigged in favor of the largest banks and their elites, so they play by their own set of rules to the disfavor of the taxpayers who funded their bailout, are true.
It really happened. These suspicions are valid.”
Neil Barofsky, TARP Inspector General
Baseline Scenario
Fed Governor Speaks Out For Stronger Rules
By Simon Johnson
July 28, 2012
A powerful new voice for financial reform emerged this week – Sarah Bloom Raskin, a governor of the Federal Reserve System. In a speech on Tuesday , she laid out a clear and compelling vision for why the financial system should focus on providing old-fashioned but essential intermediation between savers and borrowers in the nonfinancial sector.
Sadly , she also explained that she is a dissenting voice within the Board of Governors on an essential piece of financial reform, the Volcker Rule. Her colleagues, according to Ms. Raskin, supported a proposed rule that is weaker, i.e., more favorable to the banks; she voted against it in October. At least on this dimension, financial reform is not fully on track.
Two years after the passage of the landmark Dodd-Frank financial reform legislation, you might imagine that the crucial detailed regulations would already be in place.
But, not so, at least with regard to the Volcker Rule, which is intended to limit the ability of big banks to make large “proprietary ” bets. (Proprietary trading is jargon for speculation – betting on asset prices going up and down.)
The basic idea of this is simple and completely compelling. Paul A. Volcker, the former chairman of the Federal Reserve System, has stressed that this measure will help us move away from an arrangement in which the people who run big banks get the upside when they are lucky – and the rest of us are stuck with some enormous, awful bill when things go awry . Senators Jeff Merkley , Democrat of Oregon, and Carl Levin, Democrat of Michigan, fought long and hard to get meaningful provisions into the legislation. But these still need to be turned into regulations that must be followed.
The final Volcker Rule was due out last week but did not appear. The current expectation is that it will appear at some point in August. (The Fed is one of five regulators involved in setting the Volcker Rule; the others are the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Securities and Exchange Commission.)
As Ms. Raskin explained in her speech, “I view proprietary trading as an activity of low or no real economic value that should not be part of any banking model that has an implicit government backstop.”
Our largest financial institutions are bank holding companies, which include both banks and enormous trading operations. These activities are intermingled deliberately by bank management – and typically with the approval of regulators.
In a recent study released by the Federal Reserve Bank of New York, Dafna Avraham, Patricia Selvaggi and James Vickery found that legal and organizational complexity – for example, measured by total number of corporations within a single global financial institution (think Citigroup or JPMorgan Chase) – has increased greatly in recent years.
These structures are intended to benefit from association with federally guaranteed deposits as well as the broader but more nebulous protection that comes from being perceived – by officials and by markets – as too big to fail. A commercial bank gives trading operations huge financing advantages, in part because they have the implied backing of depositors and taxpayers; this is why so many banks have put their enormous derivatives trading operations in their insured banks.
Goldman Sachs this week announced that it will expand its regulated bank as a way to obtain lower-cost financing. The federal insurance on deposits is a great deal for a high-risk trading operation like Goldman’s, lowering its financing costs by perhaps 200 basis points (two percentage points, an enormous amount in today’s markets).
Without government guarantees, creditors to Goldman would want to be compensated for the risks they are taking. As things now stand, Goldman is receiving a large implicit government – and taxpayer – subsidy . The same is true at all the other large banks...
Read the rest here.
"Yo, Mario. Could you loosen up and say something suggestive of an easing today? I've got these positions on and they're killing me.
Consider it done my good man."
China has created brand-new form of capitalism: Bill GatesSat Jan 29, 2005 3:49 AM ETDAVOS, Switzerland, (AFP) - US software giant Bill Gates (news - web sites) has high praise for China, which he says has created a brand-new form of capitalism that benefits consumers more than anything has in the past."It is a brand-new form of capitalism, and as a consumer its the best thing that ever happened," Gates told an informal meeting late Friday at the World Economic Forum (news - web sites) in this ski resort.He characterised the Chinese model in terms of "willingness to work hard and not having quite the same medical overhead or legal overhead".Manufacturers have created "scale economies that are just phenomenal", in part owing to companies there and elsewhere on the planet designing good products, Gates said.Looking ahead, he added: "You know they haven't run out of labor yet, the portion that can come out of the agriculture sector" was still considerable."It's not like Korea, Korea got to a point where, boom, the wages went up a lot," he said, adding "that's good, you know, they got rich and now they have to add value at a different level."They're closer to the United States in that sense than they are to where China is right now."Gates continued by heaping praise on the current generation of Chinese leaders."They're smart," he said with emphasis."They have this mericratic way of picking people for these government posts where you rotate into the university and really think about state allocation of resources and the welfare of the country and then you rotate back into some bureaucratic position."That rotation continued, Gates explained, and leaders were constantly subjected to various kinds of ratings."This generation of leaders is so smart, so capable, from the top down, particularly from the top down," he concluded.
"Justice in these circumstances turns into a process of grinding human flesh, making mincemeat for prisons and camps. It is a process in which people can neither effectively defend themselves, or even realize what is happening to them. One can only think about when it will end."
Sergei Magnitsky
"On the night of 16 November 2009, Sergei’s condition became critical. Only then did they move him to a prison with an emergency room. However, when he arrived, he wasn’t treated, but was put into an isolation cell and chained to a bed.
Eight riot guards with rubber batons then entered the cell and beat him until he was dead. He was 37 years old."
Bill Browder, Turning the Tables on Russia's Elite: The Story Behind 'The Magnitsky Act'
"It is always the soul that dies first, even if it's departure goes unnoticed. And it always carries the body along with it...Man is nourished by the invisible, man is nourished by that which is beyond the personal. He dies from preferring the opposite."
Jacques Lusseyran, Poetry at Buchenwald
"We can answer these questions from experience as well as on principle. The experiences of camp life show that man does have a choice of action. There were enough examples, often of a heroic nature, which proved that apathy could be overcome, irritability suppressed. Man can preserve a vestige of spiritual freedom, of independence of mind, even in such terrible conditions of psychic and physical stress.
We who lived in concentration camps can remember the men who walked through the huts comforting others, giving away their last piece of bread. They may have been few in number, but they offer sufficient proof that everything can be taken from a man but one thing: the last of the human freedoms — to choose one's attitude in any given set of circumstances, to choose one's own way."
Victor Frankl, Man's Search for Meaning
“News was needed, surely, but courage even more so, and clarity. We were resolved to hide nothing. For here was the monster to be fought: defeatism, and with it that other monster, apathy. Everything possible must be done to keep the French from growing accustomed to Nazism, or from seeing it just as an enemy, like enemies of other times, an enemy of the nation, an adversary who was victorious just for the moment. From our past we knew that Nazism (Fascism) threatened the whole of humanity, that it was an absolute evil, and we were going to publish its evilness abroad..."Within a year the group numbered some 600 members who produced and distributed an illegal underground newspaper despite the risk of imprisonment, torture or death if they were caught. Lusseyran describes the mood of both surrender and joy he experienced in the resistance movement:
“I had not a single friend who had anything left to lose. They had given up literally everything except life. . . On my word of honor, the air was different where my friends were. There you could smell joy. Even when they were sad and talking about their own death, the smell of their talk was good and gave you a lift.”Lusseyran was eventually betrayed by a pro-Nazi student who infiltrated the resistance group, resulting in the arrest of Lusseyran and other leaders of the group.
“We had to live in the present; each moment had to be absorbed for all that was in it. When a ray of sunshine comes, open out, absorb it to the depths of your being. Never think that an hour earlier you were cold and that an hour later you will be cold again. Just enjoy.
The amazing thing is that no anguish held out against this treatment for very long. Take away from suffering its double drumbeat of resonance, memory and fear. Suffering may persist, but already it is relieved by half.”
“Life had taken possession of me. I had never lived so fully before. Life had become a substance within me. It broke into my cage, pushed by a force a thousand times stronger than I. It was certainly not made of flesh and blood, not even of ideas. It came toward me like a shimmering wave, like the caress of light. I could see it beyond my eyes and my forehead and above my head. It touched me and filled me to overflowing. I let myself float upon it… I drew my strength from the spring. I kept on drinking and drinking still more. I was not going to leave that celestial stream… Here was the life which sustained the life in me..."
“The Lord took pity on the poor mortal who was so helpless before him… But there was one thing left which I could do: not refuse God’s help, the breath he was blowing upon me. That was the one battle I had to fight, hard and wonderful all at one: not to let my body be taken by the fear. For fear kills, and joy maintains life..."
“I was nothing but skin and bones, but I had recovered. The fact was I was so happy, that now Buchenwald seemed to me a place which if not welcome, was at least possible. If they didn’t give me any bread to eat, I would feed on hope..."
"I was carried by a hand. I was covered by a wing. One doesn’t call such living emotions by their names. I hardly needed to look out for myself…I was free now to help the others; not always, not much, but in my own way I could help. I could try to show other people how to go about holding on to life. I could turn toward them the flow of light and joy which had grown so abundant in me..."
"From that time on they stopped stealing my bread or my soup. It never happened again. Often my comrades would wake me up in the night and take me to comfort someone…I became “the blind Frenchman.” For many, I was just, “the man who didn’t die.” Hundreds of people confided in me. The men were determined to talk to me. They spoke to me in French, in Russian, in German, in Polish. I did the best I could to understand them all. That is how I lived, how I survived. The rest I cannot describe...”
"That is what you had to do to live in the camp: be engaged, not live for yourself alone. The self-centered life has no place in the world of the deported. You must go beyond it, lay hold on something outside yourself.
Never mind how: by prayer if you know how to pray; through another man's warmth which communicates with yours, or through yours which you pass on to him; or simply by no longer being greedy. Those happy old men were like the hoboes. They asked nothing more for themselves, and that put everything within their reach.
Be engaged, no matter how, but be engaged. It was certainly hard, and most men didn't achieve it.
Of myself I can't say why I was never entirely bereft of joy. But it was a fact and my solid support. Joy I found even in strange byways, in the midst of fear itself. And fear departed from me, as infection leaves an abscess and bursts.
By the end of a year in Buchenwald I was convinced that life was not at all as I had been taught to believe it, neither life nor society."
"And he began to teach them, saying:
'Blessed are the poor in spirit,
for theirs is the kingdom of heaven.
Blessed are they who mourn,
for they shall be comforted.
Blessed are the meek,
for they will inherit the earth.
Blessed are those who hunger and thirst for righteousness,
for they will be satisfied.
Blessed are the merciful,
for they will be shown mercy.
Blessed are the pure in heart,
for they will see God.
Blessed are the peacemakers,
for they will be called children of God.
Blessed are those who are persecuted for righteousness sake,
for theirs is the kingdom of heaven.
And blessed are you when people insult you, persecute you, or falsely speak evil
about you, because you stand with me.'"
They look like the remnants of dried brown leaves, blowing along the gutters and alleyways of a hard and unyielding hell. No one remembers them, or even know what they are.
They still think and feel, but the sounds and cries that they make blend together into an indistinguishable rustling, a chorus of soft scratching from dried remnants on the pavement, made of unyielding alabaster paving blocks, as they cling to their lies and self-delusions.
And no one hears them, their dry scratching cries, and they are alone. It is hard to even think of it again, much less imagine falling into that state. And yet, that is not the worst that I saw.
“We run heedlessly into the abyss after putting something in front of us to stop us from seeing it.”
Blaise Pascal, Pensées
TruthDig
The Careerists
By Chris Hedges
Jul 23, 2012
The greatest crimes of human history are made possible by the most colorless human beings. They are the careerists. The bureaucrats. The cynics. They do the little chores that make vast, complicated systems of exploitation and death a reality. They collect and read the personal data gathered on tens of millions of us by the security and surveillance state. They keep the accounts of ExxonMobil, BP and Goldman Sachs. They build or pilot aerial drones. They work in corporate advertising and public relations. They issue the forms. They process the papers. They deny food stamps to some and unemployment benefits or medical coverage to others. They enforce the laws and the regulations. And they do not ask questions.
Good. Evil. These words do not mean anything to them. They are beyond morality. They are there to make corporate systems function. If insurance companies abandon tens of millions of sick to suffer and die, so be it. If banks and sheriff departments toss families out of their homes, so be it. If financial firms rob citizens of their savings, so be it. If the government shuts down schools and libraries, so be it. If the military murders children in Pakistan or Afghanistan, so be it. If commodity speculators drive up the cost of rice and corn and wheat so that they are unaffordable for hundreds of millions of poor across the planet, so be it. If Congress and the courts strip citizens of basic civil liberties, so be it. If the fossil fuel industry turns the earth into a broiler of greenhouse gases that doom us, so be it. They serve the system. The god of profit and exploitation. The most dangerous force in the industrialized world does not come from those who wield radical creeds, whether Islamic radicalism or Christian fundamentalism, but from legions of faceless bureaucrats who claw their way up layered corporate and governmental machines. They serve any system that meets their pathetic quota of needs.
These systems managers believe nothing. They have no loyalty. They are rootless. They do not think beyond their tiny, insignificant roles. They are blind and deaf. They are, at least regarding the great ideas and patterns of human civilization and history, utterly illiterate. And we churn them out of universities. Lawyers. Technocrats. Business majors. Financial managers. IT specialists. Consultants. Petroleum engineers. “Positive psychologists.” Communications majors. Cadets. Sales representatives. Computer programmers. Men and women who know no history, know no ideas. They live and think in an intellectual vacuum, a world of stultifying minutia. They are T.S. Eliot’s “the hollow men,” “the stuffed men.” “Shape without form, shade without colour,” the poet wrote. “Paralysed force, gesture without motion.”
It was the careerists who made possible the genocides, from the extermination of Native Americans to the Turkish slaughter of the Armenians to the Nazi Holocaust to Stalin’s liquidations. They were the ones who kept the trains running. They filled out the forms and presided over the property confiscations. They rationed the food while children starved. They manufactured the guns. They ran the prisons. They enforced travel bans, confiscated passports, seized bank accounts and carried out segregation. They enforced the law. They did their jobs.
Political and military careerists, backed by war profiteers, have led us into useless wars, including World War I, Vietnam, Iraq and Afghanistan. And millions followed them. Duty. Honor. Country. Carnivals of death. They sacrifice us all. In the futile battles of Verdun and the Somme in World War I, 1.8 million on both sides were killed, wounded or never found. In July of 1917 British Field Marshal Douglas Haig, despite the seas of dead, doomed even more in the mud of Passchendaele. By November, when it was clear his promised breakthrough at Passchendaele had failed, he jettisoned the initial goal—as we did in Iraq when it turned out there were no weapons of mass destruction and in Afghanistan when al-Qaida left the country—and opted for a simple war of attrition. Haig “won” if more Germans than allied troops died. Death as score card. Passchendaele took 600,000 more lives on both sides of the line before it ended. It is not a new story. Generals are almost always buffoons. Soldiers followed John the Blind, who had lost his eyesight a decade earlier, to resounding defeat at the Battle of Crécy in 1337 during the Hundred Years War. We discover that leaders are mediocrities only when it is too late.
David Lloyd George, who was the British prime minister during the Passchendaele campaign, wrote in his memoirs: “[Before the battle of Passchendaele] the Tanks Corps Staff prepared maps to show how a bombardment which obliterated the drainage would inevitably lead to a series of pools, and they located the exact spots where the waters would gather. The only reply was a peremptory order that they were to ‘Send no more of these ridiculous maps.’ Maps must conform to plans and not plans to maps. Facts that interfered with plans were impertinencies.”
Here you have the explanation of why our ruling elites do nothing about climate change, refuse to respond rationally to economic meltdown and are incapable of coping with the collapse of globalization and empire. These are circumstances that interfere with the very viability and sustainability of the system. And bureaucrats know only how to serve the system. They know only the managerial skills they ingested at West Point or Harvard Business School. They cannot think on their own. They cannot challenge assumptions or structures. They cannot intellectually or emotionally recognize that the system might implode. And so they do what Napoleon warned was the worst mistake a general could make—paint an imaginary picture of a situation and accept it as real. But we blithely ignore reality along with them. The mania for a happy ending blinds us. We do not want to believe what we see. It is too depressing. So we all retreat into collective self-delusion.
In Claude Lanzmann’s monumental documentary film “Shoah,” on the Holocaust, he interviews Filip Müller, a Czech Jew who survived the liquidations in Auschwitz as a member of the “special detail.” Müller relates this story:
“One day in 1943 when I was already in Crematorium 5, a train from Bialystok arrived. A prisoner on the ‘special detail’ saw a woman in the ‘undressing room’ who was the wife of a friend of his. He came right out and told her: ‘You are going to be exterminated. In three hours you’ll be ashes.’ The woman believed him because she knew him. She ran all over and warned to the other women. ‘We’re going to be killed. We’re going to be gassed.’ Mothers carrying their children on their shoulders didn’t want to hear that. They decided the woman was crazy. They chased her away. So she went to the men. To no avail. Not that they didn’t believe her. They’d heard rumors in the Bialystok ghetto, or in Grodno, and elsewhere. But who wanted to hear that? When she saw that no one would listen, she scratched her whole face. Out of despair. In shock. And she started to scream..."
Read the rest here.
"Know you not, that to whom you yield yourselves as servants to obey, his servants you are; whether of a corruption unto death, or of a righteousness unto life?"It is not surprising that people sell themselves so badly, but rather that they also do it so cheaply.
"Some men weave their sophistry until their own reason is entangled."
Samuel Johnson
08:12 Former Fed Vice Chairman Blinder says Fed should cut IOER -WSJ
Former Fed Vice Chairman Alan Blinder, in an opinion piece, said the Federal Reserve has many weapons left to provide a boost to the economy, but the most powerful tool would be lowering the interest rate on excess reserves (IOER) held by banks.
Blinder said Operation Twist, QE3, and forward guidance are weak weapons that won't be as effective as cutting the IOER to zero, and if nothing goes wrong, to -25bp.
He argues that doing such would provide a powerful incentive for banks to put some of their idle reserves to work, possibly lending it out or putting it in the capital markets.
Fed Chairman Ben Bernanke said last week that the Fed still has a number of tools available should it decide to implement additional stimulus, including its balance sheet, communications strategy, IOER and the discount window.