SP 500 and NDX Futures Daily Charts - Fraud Will Continue Until Confidence Returns

I would be very careful about getting in front of this market while volumes remain low and the Fed keeps puffing up the banks with easy money.

The fairy tale being told is that the recovery has the market giddy, so it is exiting safe havens (like gold of course) and seeking risk plays for more upside.

Volumes remain thin and there is the tell. There is also a divergence between the SP futures and Tech 100.

Next week there are more Treasuries coming to market so we *might* see a pause, but this will not be safe to short except as a hedge on longs until there is a clear trend break. No need to be greedy. Wait for things to develop.

Alan Blinder: The Fed Should Pay the Banks Negative Interest Rates on Reserves

As I said to the reader who forwarded this, 'you have no idea how much this admission by Blinder means to me.'

This is not the first time he said this, he is now repeating it again more publicly and for the record. That means he sees what is happening and is worried about it. And it is something that is probably not being discussed in Davos, except behind closed doors, and especially not with the financial media's Wall Street spokesmodels.

This is a particular moment to be savored, because at the time that the Fed started paying interest on bank reserves it held, there was quite a bit of hoopla and browbeating by 'professional economists' and some NY Fed people, and their media mouthpieces, about my own interpretation of what it meant, and how those reserves would function, and what they would and would not do. And as I recall a few brave politicians were also rasing the same concerns, only to be beaten down by 'experts.'

The Fed has been pussyfooting around the credibility trap of their own policy failures for quite some time.  This is hard for an academic to do, because so much of their personal currency is based on 'reputation' and the back-scratchers club.

So now the hacks can argue with Alan Blinder, former Vice Chair of the Fed. They may disagree with his policy judgements, but they might find it harder to dismiss his argument with the usual 'he doesn't understand the banking system' approach which they tend to use when they wish to silence dissent.  I took quite a bit of flack for this on the economic blogs comment sections and was fairly disgusted by what looked like a disinformation campaign.

I am no great fan of Blinder, and his own rationalisation of the Fed's actions and the bailout are disturbing. But I will use what I can get and he explodes at least one of the monetary myths that a number of people had questioned, only to be shoved aside.  The actions of the Fed have been all about bailing out the Banks, and in their fear and greed the politicians have gone along with them, both in the US and in Europe.

Paying no interest, or even negative rates on reserves, makes some sense, in motivating the banks to not to sit on their cash and gamble with it in the markets, and prop up mismarked assets, but to find some productive uses for it.

My only concern is that in this currently corrupt system the failure to pay interest or to even charge a fee for it would drive even more 'hot money' into financial asset bubbles in the US and overseas rather than productive loans and real investments in support of growth and recovery and real wages.  This is one of the great drawbacks of the repeal of Glass-Steagall. 

On the bright side, negative interest rates, including negative real rates, are a stimulus for gold which is money in its own right and on its own standing, as my friend Hugo Salinas-Price is often wont to remind us.  And this admission by Blinder gives me the ability to feel even more confident in the rest of my forecasts, provided the government does not do something stupidly draconian out of panic.  Gold is going to go significantly higher in price.  The big players are already positioning for it.

And if these negative rates were applied to what is paid to individual savers and depositors, then that would be even more of a travesty that what is occurring today as prudence and honesty are penalized by policy originating from the monied interests and their public servants. This is a real concern given the lack of serious reform of the system.

It would be like strafing the lifeboats, which is something some financial engineers would do if given the opportunity and the motivation in support of their increasingly convoluted and self-serving policy errors.  

CNNMoney
Making the Case for Negative Interest Rates
By Allan Dodds Frank
25 January 2013

Former Fed official Alan Blinder talks about how to fix the economy, where the next crisis will come from, and how scared investors should be.

FORTUNE -- The nation's biggest banks have been nursed by the Federal Reserve way too long, former Federal Reserve Vice Chairman Alan S. Blinder said Thursday as he kicked off the tour for his new book, After The Music Stopped: The Financial Crisis, The Response and the Work Ahead.

The Federal Reserve, says Blinder, should stop paying interest to banks for their overnight deposits and should move to charge them for parking money. He says if the Fed set negative interest rates for overnight deposits – in effect charging a fee – banks would have to figure out better ways to make money and one obvious alternative would be to lend more to customers.

The book, the 20th by the liberal Democrat economist who is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University, defends the U.S. government bailout prompted by the financial crash in the fall of 2008 as a job well done, while critiquing it as a misunderstood rescue that could have been done more cleanly. Blinder tries to adopt the perspective of middle class Americans who remain angry that the big banks stayed afloat with public money while doing little to help their retail customers during the bail-out...

Sparing no sitting ducks, Blinder blasts former President George W. Bush, former Treasury Secretary (and Goldman Sachs (GS) co-CEO) Henry "Hank" Paulson and their successors – President Barack Obama and Treasury Secretary Timothy Geithner - as communications failures whose collective silence about what was really going on amounted to public disservice. (And where wasMr. Blinder when all this was happening, from Greenspan to Bernanke? - Jesse)

While citizens fail to understand the positive role the Federal Reserve played [sic - literally], Blinder also says people have a right to be angry about the ongoing practice that encourages banks to keep their deposits out of general circulation.  (The Fed's failure as bank and market regulator is epic - Jesse)

"I have been advocating – and have not yet quite convinced (Federal Reserve Chairman) Ben Bernanke, although I am still working on it - that the Fed should lower, first to zero and then probably to negative, the interest rate it pays banks for holding reserves at the Fed," Blinder said Thursday. "When I want to be polemical about it, I say things like: 'My bank pays me one basis point on my checking account. Why are you paying my bank 25 basis points on their checking account?...'"

The Payoff: Why Wall Street Always Wins - Capture, Careerism, and Corruption

The reason why no major Wall Street executives are being investigated and indicted, and why the manipulation of markets continues on, is part credibility trap and the rest capture, careerism, and corruption.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.




Jeff Connaughton was Senator Ted Kaufman's chief of staff in January 2009.  After Ted's Senate term ended on November 14, 2010, he retired from politics, and now lives and writes in Savannah, GA, and speaks out about the failures to address the financial crisis.

In 2000 he had co-founded a lobbying firm specializing in university research for The Science Foundation, Quinn Gillespie & Associates LLC.  This helped to broaden his understanding of the political process as it had been evolving.

Prior to that he served in the White House as Special Assistant to the Counsel to the President in 1994-95, where he worked on a variety of legislative, regulatory and constitutional issues.

He previously served from 1988 to 1991 on the staff of then Chairman Joseph R. Biden, Jr., of the Senate Judiciary Committee.

Gold Daily and Silver Weekly Charts - Upping the Chances for Inflation

Intraday commentary on money and the metals and Bernanke's Hammer here.

And now the Swiss are asking, "Wo Ist Das Gold?"

"Muss die Schweiz ihr Gold aus dem Ausland heimholen? Der SVP-Initiative, die das fordert, fehlen nur noch 10'000 Unterschriften. Die SNB könnte in Teufels Küche kommen."

SP 500 and NDX Futures Daily Charts - Divergence Compliments of Apple

There was a big divergence today between Tech and the SP compliments of Apple.

After the bell AT&T missed earnings, and Microsoft missed revenues. Starbucks was in line.

Intraday commentary in which I discuss the policy errors of the Fed in relation to consciously funneling monetary stimulus through financial firms and assets, bubble-wise.

I think the market is greatly overbought and would see a correction, but VIX remains extraordinarily low, so it would be shallow or at most a 'wash and rinse.'

It will take a macro event to break this ramping, and it might not take all that much given the thin volumes.

The Moral Hazard of the Fed's Current Policy: The Resurgence of Fraudulent Paper

"As a dog returns to its vomit, so a fool returns to his folly."

Proverbs 26:11

A reader who works in commercial real estate finance shared a warning, informed by his own private industry perspective today. This was in response to my post this morning on the Fed's policy error of indiscriminately pumping money into an unreformed banking system, without adding safeguards and provisions for its employment in productive investment rather than wealth transfer control frauds.

It is almost tragically funny to see the economic principles learned from the Great Depression applied so blindly and haphazardly as advocated by some economists and policy makers. 

It is hard to explain the realities of things to people who see the rough world of the markets through the abstractions of their theory and models.

Yes, the approach used by the government in the Great Depression favoured the stimulus of government work and investment programs for a depression and liquidity trap, and a certain amount of financial security to ease the pain.  But it would have never been so wilfully complacent about the underlying fraud that caused it in the first place as the government is today.

And austerity without reform is a form of economic suicide.  FDR came right at Wall Street and the Banks with serious reform that saved capitalism from itself, and worked for a generation to hold back its darker impulses.  This is a lesson that we have apparently forgotten.

If the Fed attempts their old fix once again, they may do what I thought was almost inconceivable, and go a step beyond mere stagflation which is bad enough, and cause an actual break in confidence, and the bond of their word, the currency. The people of the world will not be fooled forever.

As Hyman Minsky once said, and the moderns seem to have forgotten, "Anyone can create money; the problem is in getting it accepted." He should have added, except by force.

Reform goes hand in hand with recovery.

From a reader:

CDO Resurgence Could Meet Resistance From RE Investors
Law360

A recent bump in demand for collateralized debt obligations has some experts predicting an onslaught of new deals in the coming months, but real estate attorneys caution that even with a more conservative structure, CDOs could be a hard sell with those still reeling from their role in the 2008 crash.

Also, Commercial Mortgage Alerts reflected commercial mortgage backed securities issuance of $48 billion last year (2012) - up from about $33 billion (2011). Remember the Fed is buying up to $45 billion in mortgage backed bonds per month!

"I believe the Fed has succeeded in provide the banks the incentive to begin issuing fraudulent paper again, the infamous CDO's. That's the only way the banks can meet the demand for higher yielding paper given their reluctance to engage in productive investments.

They know the game now, despite the real estate lawyers who are either wrong or just propagandizing. Open-ended QE.

The banks will issue large amounts of the CMBS paper and CDO paper and probably come up with other bond schemes and even LBO's that are fraudulent and probably worthless.

They'll sell them to whomever, because if the fraud is ever revealed, it will get charged to the Fed who will buy the paper from the investors or off the banks' books for near 100 cents on the dollar.

The great fraud machine is stirring. The debt bubble is reflating.

There is no underlying strength in the economy, so the loans being securitized will not be repaid in real terms and the banks and the investors will ultimately offer them to the Fed, who will buy them at non-market prices.

What's to stop this? There's nothing stopping it.

There is no threat of prosecution for fraud. There is no shame or sense of morality.

There is only a ton of money to be earned by the banks/hedge funds/private equity with no threat of punishment for engaging in massive fraud."

This later from another reader.  To be fair, CDO's are not in and of themselves bad assets, but they do tend to operate nicely in lending themselves as a vehicle for misstating risks because of their complexity and sometimes convoluted terms.  Therefore in that spirit, Deutschebank Selling CDO's to Meet Its Capital Goals.  And Private Equity Getting Deeper into Debt as Multiples Rise as well as Hampton's Average Home Price Hits Record.  

If this is productive debt with risks well-priced then no worries.  But I wonder if we will see a return to the LBO's, bond abuses, and dodgy IPO's of the past given the current climate of loose regulation and increased pressure to make easy money.

Bernanke's Hammer: When You Have a Printing Press, Everything Looks Like a Monetary Transaction

"I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail."

Abraham Maslow, The Psychology of Science, 1966

Apparently while Maslow made this saying famous with a more elegant formulation, the original source of the image is from a Mr. Kaplan who wrote his 'law of the instrument' in 1964.

"I call it the law of the instrument, and it may be formulated as follows: 'Give a small boy a hammer, and he will find that everything he encounters needs pounding.'"

Speaking of boys and their toys, the word that has made its way across the trading desks is that the Fed's put is back on, or more colloquially phrased, while Bernanke keeps printing, certain favored classes of assets can keep going higher, without regard to fundamentals, except for significant event-driven incidents, that will be quickly papered over.

Otherwise, the dips will be shallow and the trend will be maintained.  For how long I do not know, but as the VIX shows, perceived risk is back down to low levels that we have not seen since the growing credit bubble of 2004-2007.

As an aside, before snarky propeller heads with little better arguments to make point out that the Fed does not literally 'print money,' we all know that. It is a degenerate profession that mixes a pretension to lofty equations and high science with the taunts and arguments of the schoolyard, when they act as the politicians' bullyboys.

The pity is that 'the printing press' is not the only instrument at the Fed's disposal.  After all, they are a significant regulator of the banks, and have gained even more power and influence since the financial crisis.  But as might be obvious to most, they are a terribly conflicted regulator, and given to remarkable lapses in judgement.

Monetary inflation without reform is the 'solution' that most favors the monied interests and the financial class given the extractive nature of the system as it is.

The second most favorable policy is 'austerity,' again without serious reform.  One can increase the value of their own pile of ill gotten gains relative to others through either policy.  It is no choice when you can pick the choices you give to the people, all of which are favorable to you.

Unfettered capitalism is remarkably inventive in its ability to transfer wealth and destroy value.  It commoditizes everything, and subordinates all to a place on its hellish balance sheet.

The meme on the financial markets is that there may be shallow pullbacks, or even a greater correction in response to a specific event, such as the 'fiscal cliff,' but the Fed's policy is to target asset inflation once again, through the Too Big To Fail Banks and hedge funds, and their buying of paper at non-market prices.

There is also a belief, whether it is right or wrong, that the regulators will turn a blind eye to the capping of certain commodities like gold and silver, in the name of managing them as rival currencies.  Even a folk hero like Paul Volcker has previously endorsed this as a policy.

This turning of things upside down is what has been called Rubinomics, the principle that by supporting the buying of certain select instruments such as SP futures ahead of a crisis, one can more efficiently avert a financial problem than by allowing the markets to reflect the fundamentals, and then to clean up the mess afterwards.   It's cheaper and easier he observed.

It is the belief that rather than an instrument of price discovery within the real economy, the financial markets ARE the economy, and will lead rather than follow.  And it has become a form of financial totalitarianism through the manipulation of policy and money.

Robert Rubin articulated this policy perspective while he was the Secretary of the Treasury, and he somehow persuaded Greenspan, then the Chairman of the Fed, to go along with it, shortly after the Maestro had made his famous 'irrational exuberance' speech.  Although it should be noted that Greenspan had already found that tool, and used it.  He merely took it to another level, not as a response to be used to a crisis as in the case of the Crash of 1987, but as a proactive tool of financial engineering.

And this was the genesis of the principles of new Modern Monetary Theory, which in fact is a concept as old as the hills, appearing over again with different names, and the source of much recent misfortune through several Presidencies.

"Notwithstanding anything said or done by the Congress this year, operating through trained surrogates such as Geithner, Summers and others, Robert Rubin is still pulling the economic and financial strings in Washington. The fact that there is a Democrat in the White House almost does not seem to matter. President Obama arguably has a subordinate position to Rubin because of considerations of money."

Chris Whalen, The World According to Robert Rubin

And this is the problem I have with this Modern Monetary Theory that would save the system by placing the ability to simply create money in the hands of the Treasury, to be wielded such titans of sound judgement as Robert Rubin, Hank Paulson, and Tim Geithner, with oversight perhaps by those incorruptibles and paragons in the Congress.

I do not like the banking system as it is, as you know if you frequent this Cafe.  The corruption of insider dealings, opaque deals, and unequal justice has displaced the discipline of well run markets.

The system as it is has all the problems, inefficiences, and injustice of a corrupt and self-serving oligarchy. This is not to say that is a grand conspiracy, but rather a series of unfortunate events and human tendencies, aiding the actions of a relative few.

The solution seems obvious, which is to reform the system, to provide for transparency and the rule of law, and a return to regulations and reforms that worked for decades.  And it is not to replace it with some gimmicky solution that has the same faults or worse, that will be used by same rotten, self-serving gang of idiots and careerists.

And this is why I do not even favor something more rigorous like a return to a gold or mixed metal standard now, because with the system as it is, it would surely be used as an instrument of control and repression.  A corrupt system can corrupt all.  Ask the Greeks how an external standard like the euro is working for them.  It has become an instrument of official plunder. 

The thought of the central government having the power to set official gold prices and control inventory, which they most surely would do, makes one shudder. At least in a nominally free market they can provide some refuge against financial engineering, given a wide enough timeframe.

So what about the markets, and such similar financial engineering notions as 'Nominal GDP Targeting."  Well, we can wonder how the Fed might want to actually achieve such a thing, short of going out and buying iPhones and foodstuffs.  Would it be to continually stuff money into the banks and their associated companies and camp followers, and wait for the trickle down effect?

We have seen the result of such an approach in the past.  The 'hot money' seeks beta, and that means financial paper, and frauds like collateralized debt obligations, tied to whatever hapless aspect of the real economy that is convenient, such as housing for example.

And the self same snarky economists will say, 'Where is the inflation?' and point to the very instruments of measurement of inflation that have been distorted and disabled so as not to show it, 'Chained CPI' being the most recent aberration.  And they know full well that in a situation in which the money supply is being expanded selectively and distributed through a relatively narrow source like the biggest banks, the inflation will show up selectively for quite some time, in inflated assets, bonuses and even industries like the tech sector if one can remember back to the 1990's.

I know how tempting it is for 'a little boy with a hammer' to go about pounding everything in sight.  But at some point, the adults have to come and take away that hammer, and restore the instrument to its proper usage in the service of real work and creative, productive activity.

Be careful in this market.  In markets where stocks trade like commodities, the technicals tend to be dominant because the market is a cynical game of supply and demand, squeezes in both directions, divorced from the underlying economic fundamentals. And it has been made worse by the light volumes, as few bystanders want to put their money down on the three card monte table, such as it is.

The pity is that it is strangling the flow of money to the real economy.

Max Keiser interviews Jesse Eisinger of ProPublica about his recent piece in Atlantic magazine, "What's Inside America's Banks?"

I would like to see Mr. Eisinger interviewed on the Bill Moyers show on PBS.

I doubt he could obtain a fair hearing on any mainstream media channel which prefers to stage manage their discussions in the manner of red versus blue.

Eurodollars Update From the Dec 2012 BIS Report

This is from the Dec 2012 BIS Report, which includes data up to June 2012.

As you may recall, the Fed's M3 Money Supply figures had included Eurodollars as a component.

The second chart represents the liabilities versus assets of foreign banks in their dollar holdings. I have related this to the eurodollar short squeeze in the past.

Gold Daily and Silver Weekly Charts - Cap, Cap, Cap

Zzzzz...

SP 500 and NDX Futures Daily Charts - Complacency with a Side of Bravado

Someone reminded me that VIX stayed very low throughout the equity bubble from 2004 through 2007.

So, we'll see if Ben and the financiers are blowing another equity bubble, or not.

I tend to think not, but I have found it dangerous to underestimate the brazen venality of the pampered princes.

After hours NFLX is soaring, but the big kahuna AAPL is getting trounced.

PBS Frontline: The Untouchables

I can hardly wait for the specials about the silver market when that time comes.

The corruption will continue until the people of the Western world hold their politicians accountable, and are not so easily distracted by The Big Show, and emotional bread and circuses.

Watch The Untouchables on PBS. See more from FRONTLINE.

Gold Daily and Silver Weekly Charts - Silver Outperforming YTD - The System Is Fine, People Are the Problem

As you know, the old Wall St. saying is that 'so goes January, there goes the rest of the year' or words to that effect.

The last chart shows that assets are having a very nice start. Silver is leading they way with stocks not far behind. Gold is still recovering from its end of year smash, which lasted into the first week in January. I suspect that if things hold together it will do well.

VIX is very low and complacency about the economic picture is the word for the day.

The nation would be doing great, with corporations earnings good and financial assets doing fine, if it were not for all these people with their problems like underemployment, unemployment, outrageous healthcare costs,  unpayable student loans,  lax enforcement against usury and fraud, inconvenient disabilities, limited opportunities, neglected veterans, natural disasters, and stagnant median incomes in the face of steadily rising costs and record inequality.

Benny and the financial engineers at the Fed must find this human element very annoying.  After all, their specialists tell them that everything is fine. There must be something wrong with the people.

It reminds me of when I was a boy programmer, and the systems engineers would complain that they had finally gotten a big IBM mainframe operating at peak efficiency, with all the I/O and subsystems working fine. But if only they could keep the users off the system.  They can be very disruptive and annoying.

Surely Ben and the Treasury, not to mention the Congress, must realize that the people are their customers,  and the most important stakeholders without whom the system would look rather silly, and not Wall Street and the banks, and the upper crust of the financialized economy, right?

As Phil Gramm said in 2008, there are no real problems and no recession.  Rather, the US is just 'a nation of whiners.'     Well, maybe not everybody, just Mitt's infamous 47%. 

SP 500 and NDX Futures Daily Charts - Wanna Take You Higher

The equity market continued to power higher on record low VIX to the point of complacency as earnings reports came in well after the bell.

Existing housing sales were a bit sluggish this morning.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Interesting that Sprott Silver has a lower premium than Sprott Gold.

I am struggling to relate this to any market fundamentals.

Perhaps it is the underwriters still digesting their take from the latest large shelf offering.

Inaugural Address: Some Quick Reflections, and What Obama Did Not Say

Like many others I listened to President Obama's second Inaugural Address today.

There were of some higher moments, broader themes, and an emphasis on the positive.  I struggled to find 'the memorable phrase' that would be repeated and quoted in the particular.   I have one or two candidates.

Perhaps time will sift one out of this speech, but over all this struck me as an address from a manager like a CEO, and not a political leader.  But that does sound a bit petty.  Not every Presidential inaugural address is memorable.

"We, the people, still believe that every citizen deserves a basic measure of security and dignity.  We must make the hard choices to reduce the cost of health care and the size of our deficit.  But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future.  For we remember the lessons of our past, when twilight years were spent in poverty, and parents of a child with a disability had nowhere to turn. 

We do not believe that in this country, freedom is reserved for the lucky, or happiness for the few.  We recognize that no matter how responsibly we live our lives, any one of us, at any time, may face a job loss, or a sudden illness, or a home swept away in a terrible storm. The commitments we make to each other - through Medicare, and Medicaid, and Social Security - these things do not sap our initiative; they strengthen us.  They do not make us a nation of takers; they free us to take the risks that make this country great.

We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity.  We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.  Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms.

The path towards sustainable energy sources will be long and sometimes difficult.  But America cannot resist this transition; we must lead it.  We cannot cede to other nations the technology that will power new jobs and new industries - we must claim its promise.  That is how we will maintain our economic vitality and our national treasure - our forests and waterways; our croplands and snowcapped peaks.  That is how we will preserve our planet, commanded to our care by God.  That's what will lend meaning to the creed our fathers once declared."

There can be no denying that this speech was a strong defense of the progressive social agenda.

I thought that it was remarkable for some of the things it did not say.

The word 'reform' was mentioned only once, in reference to the need to 'reform our schools.'

The words 'banks, regulation, finance, financial, property, money, and fraud' were never mentioned.

The word 'crisis' was mentioned only once, in the phrase 'extend our capacity to manage crisis abroad.' Although there was a broader reference to 'crises' and an assertion of 'an economic recovery.'

"This generation of Americans has been tested by crises that steeled our resolve and proved our resilience. A decade of war is now ending. An economic recovery has begun. America's possibilities are limitless, for we possess all the qualities that this world without boundaries demands: youth and drive; diversity and openness; an endless capacity for risk and a gift for reinvention. My fellow Americans, we are made for this moment, and we will seize it - so long as we seize it together."

Perhaps that last sentence will be 'the memorable phrase.' But it is a bit thin.

President Obama laid out an aggressive social agenda.  It is the 'hard choices that we must make' that will determine history's view of his Presidency.  He outlines some higher principles in this speech, but the proof will be in action, and will put substance into the words.

Martin Luther King: I Have Been to the Moutaintop

Martin Luther King gave this speech on 3 April 1968 at the Church of God in Christ, in Memphis, Tennessee. The last part of this speech in particular seems eerily prophetic.

He was assassinated the next day on 4 April 1968.

Robert F. Kennedy On the Death of Martin Luther King, And His Own Last Words

This talk was given at the City Club of Cleveland, Ohio on April 5, 1968, the day after the murder of Dr. Martin Luther King.

Two months later Robert F. Kennedy himself was assassinated on June 6, 1968.

Martin Luther King: Unfulfilled Dreams

Martin Luther King was murdered, 45 year ago, on April 4, 1968, one month after giving this sermon Unfulfilled Dreams in his church in Atlanta, Georgia.

His assassination was one year to the day after he had given his famous speech, A Time To Break the Silence against the war in Vietnam at Riverside Church, New York City, on April 4, 1967.

"...So many of us in life start out building temples: temples of character, temples of justice, temples of peace. And so often we don’t finish them. Because life is like Schubert’s "Unfinished Symphony." At so many points we start, we try, we set out to build our various temples. And I guess one of the great agonies of life is that we are constantly trying to finish that which is unfinishable. We are commanded to do that. And so we, like David, find ourselves in so many instances having to face the fact that our dreams are not fulfilled.

Now let us notice first that life is a continual story of shattered dreams. Mahatma Gandhi labored for years and years for the independence of his people. And through a powerful nonviolent revolution he was able to win that independence. For years the Indian people had been dominated politically, exploited economically, segregated and humiliated by foreign powers, and Gandhi struggled against it. He struggled to unite his own people, and nothing was greater in his mind than to have India’s one great, united country moving toward a higher destiny. This was his dream.

But Gandhi had to face the fact that he was assassinated and died with a broken heart, because that nation that he wanted to unite ended up being divided between India and Pakistan as a result of the conflict between the Hindus and the Moslems. Life is a long, continual story of setting out to build a great temple and not being able to finish it.

Woodrow Wilson dreamed a dream of a League of Nations, but he died before the promise was delivered.

The Apostle Paul talked one day about wanting to go to Spain. It was Paul’s greatest dream to go to Spain, to carry the gospel there. Paul never got to Spain. He ended up in a prison cell in Rome. This is the story of life.

So many of our forebearers used to sing about freedom. And they dreamed of the day that they would be able to get out of the bosom of slavery, the long night of injustice. And they used to sing little songs: "Nobody knows de trouble I seen, nobody knows but Jesus." They thought about a better day as they dreamed their dream. And they would say, "I’m so glad the trouble don’t last always. By and by, by and by I’m going to lay down my heavy load." And they used to sing it because of a powerful dream. But so many died without having the dream fulfilled.

And each of you this morning in some way is building some kind of temple. The struggle is always there. It gets discouraging sometimes. It gets very disenchanting sometimes. Some of us are trying to build a temple of peace. We speak out against war, we protest, but it seems that your head is going against a concrete wall. It seems to mean nothing. And so often as you set out to build the temple of peace you are left lonesome; you are left discouraged; you are left bewildered.

Well, that is the story of life. And the thing that makes me happy is that I can hear a voice crying through the vista of time, saying: "It may not come today or it may not come tomorrow, but it is well that it is within thine heart. It’s well that you are trying." You may not see it. The dream may not be fulfilled, but it’s just good that you have a desire to bring it into reality. It’s well that it’s in thine heart.

Thank God this morning that we do have hearts to put something meaningful in. Life is a continual story of shattered dreams.

Now let me bring out another point. Whenever you set out to build a creative temple, whatever it may be, you must face the fact that there is a tension at the heart of the universe between good and evil. It’s there: a tension at the heart of the universe between good and evil. Hinduism refers to this as a struggle between illusion and reality. Platonic philosophy used to refer to it as a tension between body and soul. Zoroastrianism, a religion of old, used to refer to it as a tension between the god of light and the god of darkness. Traditional Judaism and Christianity refer to it as a tension between God and Satan. Whatever you call it, there is a struggle in the universe between good and evil.

Now not only is that struggle structured out somewhere in the external forces of the universe, it’s structured in our own lives. Psychologists have tried to grapple with it in their way, and so they say various things. Sigmund Freud used to say that this tension is a tension between what he called the id and the superego.

But you know, some of us feel that it’s a tension between God and man. And in every one of us this morning, there’s a war going on. It’s a civil war. I don’t care who you are, I don’t care where you live, there is a civil war going on in your life. And every time you set out to be good, there’s something pulling on you, telling you to be evil. It’s going on in your life. Every time you set out to love, something keeps pulling on you, trying to get you to hate. Every time you set out to be kind and say nice things about people, something is pulling on you to be jealous and envious and to spread evil gossip about them.

There’s a civil war going on. There is a schizophrenia, as the psychologists or the psychiatrists would call it, going on within all of us. And there are times that all of us know somehow that there is a Mr. Hyde and a Dr. Jekyll in us. And we end up having to cry out with Ovid, the Latin poet, "I see and approve the better things of life, but the evil things I do." We end up having to agree with Plato that the human personality is like a charioteer with two headstrong horses, each wanting to go in different directions. Or sometimes we even have to end up crying out with Saint Augustine as he said in his Confessions, "Lord, make me pure, but not yet." We end up crying out with the Apostle Paul, "The good that I would I do not: And the evil that I would not, that I do." Or we end up having to say with Goethe that "there’s enough stuff in me to make both a gentleman and a rogue."

There’s a tension at the heart of human nature. And whenever we set out to dream our dreams and to build our temples, we must be honest enough to recognize it.

And this brings me to the basic point of the text. In the final analysis, God does not judge us by the separate incidents or the separate mistakes that we make, but by the total bent of our lives. In the final analysis, God knows that his children are weak and they are frail. In the final analysis, what God requires is that your heart is right. Salvation isn’t reaching the destination of absolute morality, but it’s being in the process and on the right road.

There’s a highway called Highway 80. I’ve marched on that highway from Selma, Alabama, to Montgomery. But I never will forget my first experience with Highway 80 was driving with Coretta and Ralph and Juanita Abernathy to California. We drove from Montgomery all the way to Los Angeles on Highway 80—it goes all the way out to Los Angeles. And you know, being a good man, being a good woman, does not mean that you’ve arrived in Los Angeles. It simply means that you’re on Highway 80. Maybe you haven’t gotten as far as Selma, or maybe you haven’t gotten as far as Meridian, Mississippi, or Monroe, Louisiana—that isn’t the question. The question is whether you are on the right road. Salvation is being on the right road, not having reached a destination.

Oh, we have to finally face the point that there is none good but the father. But, if you’re on the right road, God has the power and he has something called Grace. And he puts you where you ought to be.

Now the terrible thing in life is to be trying to get to Los Angeles on Highway 78. That’s when you are lost. That sheep was lost, not merely because he was doing something wrong in that parable, but he was on the wrong road. And he didn’t even know where he was going; he became so involved in what he was doing, nibbling sweet grass, that he got on the wrong road. Salvation is being sure that you’re on the right road. It is well—that’s what I like about it—that it was within thine heart.

Some weeks ago somebody was saying something to me about a person that I have great, magnificent respect for. And they were trying to say something that didn’t sound too good about his character, something he was doing. And I said, "Number one, I don’t believe it. But number two, even if he is, he’s a good man because his heart is right." And in the final analysis, God isn’t going to judge him by that little separate mistake that he’s making, because the bent of his life is right.

And the question I want to raise this morning with you: is your heart right? If your heart isn’t right, fix it up today; get God to fix it up. Get somebody to be able to say about you, "He may not have reached the highest height, he may not have realized all of his dreams, but he tried." Isn’t that a wonderful thing for somebody to say about you? "He tried to be a good man. He tried to be a just man. He tried to be an honest man. His heart was in the right place." And I can hear a voice saying, crying out through the eternities, "I accept you. You are a recipient of my grace because it was in your heart. And it is so well that it was within thine heart."

I don’t know this morning about you, but I can make a testimony. You don’t need to go out this morning saying that Martin Luther King is a saint. Oh, no. I want you to know this morning that I’m a sinner like all of God’s children. But I want to be a good man. And I want to hear a voice saying to me one day, "I take you in and I bless you, because you try. It is well that it was within thine heart." What’s in your heart this morning? If you get your heart right . . . [gap in tape]

...On this morning, if I can leave anything with you, let me urge you to be sure that you have a strong boat of faith. The winds are going to blow. The storms of disappointment are coming. The agonies and the anguishes of life are coming. And be sure that your boat is strong, and also be very sure that you have an anchor. In times like these, you need an anchor. And be very sure that your anchor holds.

It will be dark sometimes, and it will be dismal and trying, and tribulations will come. But if you have faith in the God that I’m talking about this morning, it doesn’t matter. For you can stand up amid the storms. And I say it to you out of experience this morning, yes, I’ve seen the lightning flash. I’ve heard the thunder roll. I’ve felt sin-breakers dashing, trying to conquer my soul. But I heard the voice of Jesus, saying still to fight on. He promised never to leave me, never to leave me alone. No, never alone. No, never alone. He promised never to leave me. Never to leave me alone.

And when you get this faith, you can walk with your feet solid to the ground and your head to the air, and you fear no man. And you fear nothing that comes before you. Because you know that God is even in Crete. If you ascend to the heavens, God is there. If you descend to hell, God is even there. If you take the wings of the morning and fly out to the uttermost parts of the sea, even God is there. Everywhere we turn we find him. We can never escape him."

Martin Luther King, Ebenezer Baptist Church, Atlanta, Georgia, 3 March 1968

Martin Luther King: The Drum Major Instinct

So many, like the apostles in this sermon, wish to take what they want from the message of faith, and to leave the rest, have nothing to do with it. As Martin Luther King so wisely points out, this is a problem for all of us.

People wish to have the power to otherwise do what they will. They wish to use God as a sort of vending machine, a compliant God, if one knows the right words to compel Him to give them what they want.  And they think that they have no sin, when they choose to give what they wish to Him, grudgingly, as they serve themselves.   And this pride, and refusal to serve, is the sin of the Fallen.

"This is how we know who are the children of God and who are the children of the Satan: anyone who does not do what is good is not God’s child, nor is anyone who does not love their neighbor." 1 John 3:10

"And he answered, ‘Love the Lord your God with all your heart and with all your soul and with all your strength and with all your mind’ and, ‘Love your neighbor as yourself.’

'You have answered rightly,' Jesus replied. 'Do this and you will live.'

But he wanted to justify himself, so he asked Jesus, 'And who is my neighbor?' Luke 10:27-29”

And Martin Luther King corrects this tendency to be self-serving, rather than serving, in a most remarkable way in this famous sermon, an excerpt of which was played at his funeral observance.

From India: Corrupting Power Of Wealth In Politics Is Making the People Angry

This could be a headline in any number of countries.

Sonia Gandhi (born Edvige Antonia Albina Maino, 9 December 1946) is an Italian-born Indian politician and the President of the Indian National Congress, one of the major political parties of India. She is the widow of former Prime Minister of India, Rajiv Gandhi and belongs to the Nehru–Gandhi family.

Times of India
Corruption in politics riling people, Sonia Gandhi warns party
By Subodh Ghildiyal & Palak Nandi
Jan 19, 2013

JAIPUR: Taking serious note of middle class protesters taking to the streets over corruption, Congress president Sonia Gandhi said the lifestyles of leaders is giving rise to questions about the source of their wealth.

Speaking at Congress's chintan shivir (brainstorming session) here, Sonia said, "Celebrating weddings, festivals and happy events is one thing, what of lavish and ostentatious displays of wealth, pomp and status? Does this not beg the question, where is this wealth coming from?"

Her direct remarks caused a hush to descend on the meeting. "Our citizens are rightly fed up with the levels of corruption that they see in public life at high levels, but equally with the corruption they have to deal with in their daily lives,'' she said.

Sonia urged the party not to lose touch with the middle classes that backed the Congress in the 2004 and 2009 general elections. The party cannot afford "our growing educated and middle classes to be disillusioned and alienated with the political process".

The candid references to the middle class drift away from Congress, the need to keep alliances intact, a commitment to make women feel safer, and an admission that the party's base has eroded in traditional strongholds were key aspects of her speech as she set out the political tasks for her party.

Some of her comments were also seen to reflect her concern over the government's response to the outpouring of public anger over the Nirbhaya gang rape and criticism of police action against young protestors. "We have to recognize the new changing India, peopled by a younger, more aspirational, more impatient and more demanding generation. Our people are expecting much more from their political parties. Today's India is better informed and better equipped to communicate. This is a phenomenon, a churning that we must understand and continue to respond to."

Taking cognizance of the growing concern about women's safety, she said, "Atrocities on women, both in urban and rural India, are a blot on our collective conscience and a matter of great shame."

Sonia's carefully crafted speech referred to the principal political challenges before the party and the government at a time when UPA 2's credibility is seen to have taken a beating due to corruption scandals, an anemic economy and demoralizing electoral losses. "Is it not the case that we have squandered many opportunities that people are willing to give us simply because we have been unable to function as a disciplined and united team," she said...