02 December 2012

Weekend Reading: Thomas Merton


Self-Love Stifles Our Being and Becoming


"The logic of worldly success rests on a fallacy: the strange error that our perfection depends on the thoughts and opinions and applause of other men...

The selfishness of an age that has devoted itself to the mere cult of pleasure has tainted the whole human race with an error that makes all our acts more or less lies against God...

The devil is no fool. He can get people feeling about heaven the way they ought to feel about hell. He can make them fear the means of grace the way they do not fear sin.

And he does so, not by light but by obscurity, not by realities but by shadows; not by clarity and substance, but by dreams and the creatures of psychosis. And men are so poor in intellect that a few cold chills down their spine will be enough to keep them from ever finding out the truth about anything...

Only the man who has had to face despair is really convinced that he needs mercy. Those who do not want mercy never seek it. It is better to find God on the threshold of despair than to risk our lives in a complacency that has never felt the need of forgiveness.

A life that is without problems may literally be more hopeless than one that always verges on despair...

Indeed, the truth that many people never understand, until it is too late, is that the more you try to avoid suffering, the more you suffer, because smaller and more insignificant things begin to torture you, in proportion to your fear of being hurt.

The one who does most to avoid suffering is, in the end, the one who suffers the most: and his suffering comes to him from things so little and so trivial that one can say that it is no longer objective at all. It is his own existence, his own being, that is at once the subject and the source of his pain, and his very existence and consciousness is his greatest torture...

Despair is the absolute extreme of self-love. It is reached when a person deliberately turns his back on all help from anyone else in order to taste the rotten luxury of knowing himself to be lost...

It is therefore of supreme importance that we consent to live not for ourselves but for others. When we so this we will be able first of all to face and accept our own limitations.

As long as we secretly adore ourselves, our own deficiencies will remain to torture us with an apparent defilement. But if we live for others, we will gradually discover that no expects us to be "as gods". We will see that we are human, like everyone else, that we all have weaknesses and deficiencies, and that these limitations of ours play a most important part in all our lives.

It is because of them that we need others and others need us. We are not all weak in the same spots, and so we supplement and complete one another, each one making up in himself for the lack in another...

To say that I am made in the image of God is to say that Love is the reason for my existence, for God is love. Love is my true identity. Selflessness is my true self. Love is my true character. Love is my name.”

Thomas Merton

A perfect love is not obtainable in this life. We are but sinners, attempting great things.

But love is our benchmark, our touchstone. It is how we are able to know if what we say or do or hold dear is founded in goodness and life, or in a destructive snare, a willfulness, the cult of the self, and death.

For love takes us out of ourselves and completes us. And the opposite of love is not hatred, but the selfishness of self-love, and the dark angel's first sin, pride.
“I think that the depth of Satan's pride is difficult for humans to understand, and therefore it is easy to fall into this error and partake of it, thinking, all the while, that we are instead doing something great and beautiful.”

Fyodor Dostoyevsky

01 December 2012

Ten Stocks Driving 88% of SP 500 Earnings Growth



Look at the concentration of financially related stocks in that top ten.

That speaks volumes about the nature of this Fed generated 'recovery.'

h/t The Big Picture

30 November 2012

Gold Daily and Silver Weekly Charts - Oppan Gangnam Style


"Vanity is the quicksand of reason."

George Sand

Another bit of a bear raid in the metals took gold back down to touch the 30% retracement on the handle intraday.

Otherwise it was an uneventful day, as the true money believers placed another appendage in the dike of their illusions, and hoped for the best.

The word for the day is 'fatuous.' It means frivolous, silly and pointless.

Much of the financial market action in times of general fraudulence is fatuous, with genuine significance.

There is a faith based culture among the nation's financiers, as typified by Modern Monetary Theory, naturally efficient market theory, job creationism, free trade, and so forth.  It serves to show that a lack of faith in God is easily compensated for by an equally fervent faith in something else, like yourself.  Everyone believes in something.

And where the facts of the real economy are in conflict with such esoteric theories, a profane faith intensifies and rises to meet and exceed all objections.  After all, it is bound by no exterior restraints, being by its very nature willfully self-referential and manipulative.

And nothing chafes vanity more than hard reality, some recent post election behaviour being a case in point.

Any person is entitled to their own opinion, but not to their own facts and outcomes. So one may believe as they will, but will be held accountable by the numbers for their beliefs. At the end of the day, life is a school of probability.

See you Sunday evening.





Gangnam is an area of Seoul south of the Han River. It is an icon of the rapid economic development of South Korea, having benefited from skyrocketing real estate prices and planned economic development. Gangnam is where the elite live, and the well-to-do young people go to party. In the song, the rapper Psy describes the kind of guy he is and the kind of girl he wants, painting caricatures of the ostentatious culture of the people in Gangnam.
This Korean rap video went 'viral' and is on its way to a billion views on Youtube. It is a 'catchy tune,' and would likely be easy to dance to in the manner of techno music which swept the Manhattan party scene during the era of the 'club kids.'

But it is also emblematic of the age and the culture: self-absorbed, frivilous, extravagant, unproductive, and vain.


SP 500 and NDX Futures Daily Charts


Quite a nothing of a day. The big excitement was another round of histrionics from Representative Boehner with regard to the 'fiscal cliff.'

And there was the big driver of volume today, the MSCI rebalancing, which occurred at the close, as index managers scurried about chasing that other bit of nothingness.

Have a pleasant weekend.




29 November 2012

Gold Daily and Silver Weekly Charts - Silver, the WidowMaker


Silver would not be denied.

It is coiling so hard, they are going to be carrying traders out of the pits on stretchers when it moves.

Shout and feel it.






The Lockheed P-38 Lightning was called der Gabelschwanz-Teufel, 'the fork tailed devil' by the Luftwaffe and 2飛行機、1パイロット Ni hikoki, ichi pairotto, 'two planes one pilot,' by the Japanese. It saw service throughout WWII, especially in the Pacific Theater.



SP 500 and NDX Futures Daily Charts - Free Money, Teen Spirit


Stocks had been largely higher on the day as GDP came in revised upwards from 2.0 to 2.7 percent growth. It was reassuring, especially if one did not look closely at the details.

Boehner came out later in the day, shaking the fiscal cliff shibboleth at the markets, causing them to dip quickly. One must presume that the Dems are playing hardball, as well they might.

In intraday commentary I speculate in passing that El Cliffo may be the wrapping paper for the next 'offer the people cannot refuse' from the Bankers and the mavens of privilege, in the manner of TARP.

I also, once again, outline the parameters for how hyperinflation might occur, and the latest in economic fairy tales being promulgated by the financiers and generation koolaid, money for nothing, and chicks for free.

The parade of pigmen between New York and Washington smells like teen spirit.  O brave new world, that has such people in it.

Have a pleasant evening.








Hyperinflation and the Pernicious Myth of Modern Monetary Theory: Dollar Vigilantes


"One might argue that when the government has to find a private sector buyer for its debt first, rather than selling the debt directly to the central bank, that imposes a certain degree of market discipline on fiscal policy. But it’s hard to see that there is all that much of a disciplinary bonus here.

When a central bank announces that it is prepared to buy government securities, the announcement automatically guarantees an eager private sector market for the securities – if there wasn’t one already. If dealers know that they can promptly re-sell newly purchased securities to the central bank, at some amount over the purchase price no matter how low, then they know they can make a profit from the purchase...

This is why we have no need to worry about those dreaded bond vigilantes in a country like the US that controls its own currency and monetary operations. To the extent that the Fed signals it is willing to buy US debt aggressively, the Treasury can set almost any price it wants for its debt. So it’s not just that there is no insolvency threat haunting US public debt. There is also not a bond vigilante attack threat – not unless the Fed allows that attack to occur."

New Economic Perspectives, Neoliberal Mythologies

The limit of the Fed’s ability to monetize sovereign debt is the value of the dollar and its acceptance, at value, for the exchange of goods in a non-compulsory environment.   And there is nothing neo-liberal about this. I don't like the neo-liberal approach, but this notion of pain-free monetization is nuts.

If one chooses to not worry so much about the ‘bond vigilantes,’ history suggest that they may well have a care for what I would call the ‘dollar vigilantes.’

The Fed may be hard pressed to buy dollars with — dollars.

The problem with such an approach is that one can ignore the risk for a time, trusting to probability and chance, but when the possible becomes more likely with repetition, it often results in a disaster. It is sort of like driving while texting, a tourist eating street food in Asia, or a small speculator being a non-insider customer at the Comex.

In a increasingly Machiavellian way, they could set up a reciprocity with another central bank or two, say, the BofE and BofJ, and perhaps even the ECB, and I think this has been done even if informally in the past.  

But the limitations are still there, even if hidden in a fog of financial engineering.   Such an arrangement, which I think exists somewhat informally today,  is merely kicking the can of currency failure down the road. 
"This is why we have no need to worry about those dreaded bond vigilantes in a country like the US that controls its own currency and monetary operations."
Overt monetization only works for a protracted period in a system in which one has political control over everyone who uses that currency. The logical outcome of a global dollar regime with unilateral monetization is an eventual bid for a one world government where a false vision of reality can be enforced with -- force. Force and fraud are the perennial instruments of economic tyranny. 

Hence we are in what is called 'the currency war' wherein the US dollar monetarists are attempting to increasingly impose their will on the rest of the world, and a portion of the rest of the world defers to accept that arrangement.

Blatant exposure is the most dreaded pitfall of any Ponzi scheme.  A fiat currency is based on faith and confidence, and the monetary magicians can hardly show their hand, directly monetizing debt without any independent restraint, for fear of provoking a panic, first at the fringes and then at the core of the nation, or empire.

That is the policy error that is also known as 'hyperinflation,' a break in confidence in a currency that is analogous to a 'run on the bank.'  It is the case for hyperinflation which I am watching, and still give a low probability.   I am fairly sure that even Zimbabwe Ben would not fall for such an obvious trap.  But the craven dissembling of Alan Greenspan was also hard to imagine, until it happened.

Instances of Hyperinflation from Diocletian to Bernanke

There are other ways to deal with unpayable debts than merely printing money.  A novel idea is to make the issuers and holders of the bonds bear the negative effects of their bad judgement, as in the case of Iceland.  But the Banks will always try to shift the burden, which they have created, to the financially illiterate and the weak.   

And the problem is not even so much the Fed's propensity to stimulation in the manner of Keynes.  The problem is that they are pouring the stimulus into an unreformed rathole of corruption, in the manner of sending aid to a country where it is intercepted by thieves and regional warlords, with little reaching the people.

The US does not have a spending problem so much as it has a 'corrupt financial system problem,' a 'wealth inequality problem with a stagnant wage base,' an 'unsustainable healthcare model problem,' and 'a free trade without adequate domestic policy based boundaries problem.'   It was not all that long ago that the US was holding a small annual surplus.  What changed was financial deregulation with the financialization of the economy, the easing of trade conditions, concentration of corporate power, tax cuts for the wealthiest, a corrupting political campaign bubble, and unfunded discretionary wars with their associated profiteering.

Forcing small business and workers to compete with state directed slave labor while maintaining a social system founded on private business and median worker wages is insane.  The capitalists are not yet selling them the rope, but they are certainly selling them the 97%, and with them the bulk of their customer demand over time.

Perhaps the biggest problem is, as Lord Acton observed, that when you have a concentration of power, men with the mentality of gangsters have taken control. And the US financial system and corporate structure are highly concentrated based on historical standards, resembling the worst of the gilded age of robber barons, or some third world oligarchy in which the people live in voiceless misery.

In summary, I call this 'just monetize the debt without restraint' alternative  the “pernicious myth of modern monetary theory.”   There are quite a few examples of how this sort of other worldly myth, like the efficient market hypothesis, the Black-Scholes risk model, and the benefits of unrestricted trade, have turned out in the past.  When you crush the reality out of a model with a few key assumptions that allow you to obtain a license to do what you will, you often open a Pandora's Box.

The real shame is that an economic tragedy is not outside the plans of some of the worst of the country's elite. Crisis provides opportunity if one is powerful enough, positioned for it, and egotistically twisted enough to think that they can control the madness once it is unleashed. I suggested that the Bankers would make the country another 'offer that they think it cannot refuse' as they did in the manner of TARP. The so called fiscal cliff may be the wrapping paper for it.

I am not suggesting that the current debt based currency system is optimal, not at all.  The continual theme here is that the financial system is broken, and that it is based on an unsustainable US dollar regime, and the excesses of money creation through credit expansion by private banks.  But to merely shift the corruption from the banks to their partners in the government Treasury is hardly a viable solution.

The answer, as I calculate it, is transparency and reform, and equal justice for all, with malice towards none, in the rule of law.   That is an ideal never fully achievable, but that is the benchmark, and one that is worth pursuing,  It is sustainable if held close, and continually renewed.   That is the spirit of the American experiment in equality and freedom, and is something worth fighting for.

“The man who is admired for the ingenuity of his larceny is almost always rediscovering some earlier form of fraud. The basic forms are all known, have all been practiced. The manners of capitalism improve. The morals may not.”

John Kenneth Galbraith, The Age of Uncertainty


"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin!

Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

Andrew Jackson,  Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels


"Do not forget that every people deserves the regime it is willing to endure!

Please make as many copies of this leaflet as you can and distribute them.

The White Rose, First Leaflet, Munich, 1942

28 November 2012

Chris Hedges: The Wall Street Cult of the Self and Ochberg: Coping With a Narcissist



As Ochberg implies, psychopaths don't have ethical considerations, and narcissists and asocial personalities don't care.

In layman's terms I think most of these fellows have a great hole in their being. They know that something is not right with them, but their egos will not allow them to acknowledge it.

Those who gravitate toward the corporate power structures can be quite successful in some organizations.   But despite outward success they are always restless, unfulfilled, and tend to project their dissatisfaction outward and ascribe it to others.   If they succeed it is all them, but if they fail, someone else is at fault.

They are incapable of trust, because everything they do is a facade, a lie.   Therefore they rarely have a real relationship with their families, and at best view them as a desirable addition to their collection.  They have utter contempt for other people, although they will use flattery and other means to create a dependency while they are using them.  And after that is done, they will be discarded without another thought.

They are like sharks, endlessly seeking to fill their terrible emptiness with possessions, be they things or other people. They are literally insatiable in their needs, and highly focused in their pursuit of them.

They are very clever in finding the weaknesses in people and organizations, and will exploit them ruthlessly. Ethics and conscience provide no brake or boundaries on their willingness to say and do anything that is required to achieve their ends.  If you attempt to thwart, be prepared for something a little different, and completely off the hook in response.

It is really something to see them at work. The destruction they can wreak, sometimes with remarkably superficial charm and high verbal acuity, is hard to describe until you see it in action.

They are always a challenge to the HR and compliance departments, and frequently end up badly, one way or the other. It becomes a personal challenge to see how far one can go without being stopped, far beyond any personal needs or requirements.  Flouting the rules becomes a game in itself.