Posts Tagged ‘karl denninger’

About that state sovereignty thing… (Karl Denninger)

June 3, 2011

Karl Denninger is one of the more astute observers in the blogosphere and recently he was musing on the European situation decrying the fact that Trichet implied he would like individual states in Europe to cede sovereignty to the ECB

http://market-ticker.org/akcs-www?post=187344

I can’t post on Mr. Denninger’s forum because the procedure is much too complicated for someone that would only post very occasionally so I decided to make a post of my own.

The reality is that through the Lisbon Treaty, a whole chunk of sovereignty has already been ceded to an unelected EU executive body. For the ECB and the rest of the governing elite to now complete the legislative and juridical take over of Euroland,  is only a formality.

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A good catch by Karl Denninger… (Timo Soini and the Wall Street Journal)

May 11, 2011
In the eternal ebb and flow of the battle between the natural absolutist inclination of government and the rights of the people, the internet is clearly affording the people an edge that was recently lost as the press and the media in general have almost entirely been absorbed by those entities that enjoy the favors of the state and therefore gravitate around it.
WSJ Caught BLATANTLY Scrubbing…..

http://www.market-ticker.org/akcs-www?post=185817

… the words of Timo Soini after the fact and after they printed it unedited online yesterday.

Here is what was originally published at this link, with the omitted parts that they scrubbed bolded:

Why I Won’t Support More Bailouts

When I had the honor of leading the True Finn Party to electoral victory in April, we made a solemn promise to oppose the so-called bailouts of euro-zone member states. These bailouts are patently bad for Europe, bad for Finland and bad for the countries that have been forced to accept them.  Europe is suffering from the economic gangrene of insolvency—both public and private. And unless we amputate that which cannot be saved, we risk poisoning the whole body.

The official wisdom is that Greece, Ireland and Portugal have been hit by a liquidity crisis, so they needed a momentary infusion of capital, after which everything would return to normal. But this official version is a lie, one that takes the ordinary people of Europe for idiots. They deserve better from politics and their leaders.

To understand the real nature and purpose of the bailouts, we first have to understand who really benefits from them. Let’s follow the money.

At the risk of being accused of populism, we’ll begin with the obvious: It is not the little guy that benefits. He is being milked and lied to in order to keep the insolvent system running. He is paid less and taxed more to provide the money needed to keep this Ponzi scheme going. Meanwhile, a kind of deadly symbiosis has developed between politicians and banks: Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever-more money back to our governments, keeping the scheme afloat.

In a true market economy, bad choices get penalized. Not here. When the inevitable failure of overindebted euro-zone countries came to light, a secret pact was made. Instead of accepting losses on unsound investments—which would have led to the probable collapse and national bailout of some banks—it was decided to transfer the losses to taxpayers via loans, guarantees and opaque constructs such as the European Financial Stability Fund, Ireland’s NAMA and a lineup of special-purpose vehicles that make Enron look simple. Some politicians understood this; others just panicked and did as they were told.

The money did not go to help indebted economies. It flowed through the European Central Bank and recipient states to the coffers of big banks and investment funds.

Further contrary to the official wisdom, the recipient states did not want such “help,” not this way. The natural option for them was to admit insolvency and let failed private lenders, wherever they were based, eat their losses.

That was not to be. As former Finance Minister Brian Lenihan recently revealed, Ireland was forced to take the money. The same happened to Portug-al-uese Prime Minister José Sócrates, although he may be less forthcoming than Mr. Lenihan about admitting it.

Why did the Brussels-Frankfurt extortion racket force these countries to accept the money along with “recovery” plans that would inevitably fail? Because they needed to please the tax-guzzling banks, which might otherwise refuse to turn up at the next Spanish, Belgian, Italian, or even French bond-auction.

Unfortunately for this financial and political cartel, their plan isn’t working. Already under this scheme, Greece, Ireland and Portugal are ruined. They will never be able to save and grow fast enough to pay back the debts with which Brussels has saddled them in the name of saving them.

And so, unpurged, the gangrene spreads. The Spanish property sector is much bigger and more uncharted than that of Ireland. It is not just the cajas that are in trouble. There are major Spanish banks where what lies beneath the surface of the balance sheet may be a zombie, just as happened in Ireland for a while. The clock is ticking, and the problem is not going away.

Setting up the European Stability Mechanism is no solution. It would institutionalize the system of wealth transfers from private citizens to compromised politicians and otherwise failed bankers, creating a huge moral hazard and destroying what remains of Europe’s competitive banking landscape.

Some defend the ESM, saying its use would always require unanimity. But the current mess with Portugal shows that the elite in Brussels will seek to enforce unanimity through pressure when it cannot be obtained by persuasion. Abolishing unanimity is only a matter of time. After that we have a full-fledged fiscal transfer union that is obviously in hock to Brussels’ anti-growth corporatism.

Fortunately, it is not too late to stop the rot. For the banks, we need honest, serious stress tests. Stop the current politically inspired farce. Instead, have parallel assessments done by regulators and independent groups including stakeholders and academics. Trust, but verify.

Insolvent banks and financial institutions must be shut down, purging insolvency from the system. We must restore the market principle of freedom to fail.

If some banks are recapitalized with taxpayer money, taxpayers should get ownership stakes in return, and the entire board should be kicked out. But before any such taxpayer participation can be contemplated, it is essential to first apply big haircuts to bondholders.

For sovereign debt, the freedom to fail is again key. Significant restructuring is needed for genuine recovery. Yes, markets will punish defaulting states, but they are also quick to forgive. Current plans are destroying the real economies of Europe through elevated taxes and transfers of wealth from ordinary families to the coffers of insolvent states and banks. A restructuring that left a country’s debt burden at a manageable level and encouraged a return to growth-oriented policies could lead to a swift return to international debt markets.

This is not just about economics. People feel betrayed. In Ireland, the incoming parties to the new government promised to hold senior bondholders responsible, but under pressure, they succumbed, leaving their voters with a sense of democratic disenfranchisement. The elites in Brussels have said that Finland must honor its commitments to its European partners, but Brussels is silent on whether national politicians should honor their commitments to their own voters.In a democracy, where we govern under the consent of the people, power is on loan. We do what we promise, even if it costs a dinner in Brussels, a “negative” media profile, or a seat in the cabinet.

When in Europe’s long night of 1939-45, war came to Finland with the winter blizzards, my mother was one of eight siblings being raised on a small farm in central Finland where my grandparents eked out a frugal living.

My two young uncles rushed to the front and were both wounded in action during Finland’s chapter of Europe’s most terrible bloodshed. I was raised to know that genocidal war must never again be visited on our continent and I came to understand the values and principles that originally motivated the establishment of what became the European Union.

This Europe, this vision, was one that offered the people of Finland and all of Europe the gift of peace founded on democracy, freedom, justice and subsidiarity. This is a Europe worth having, so it is with great distress that I see this project being put in jeopardy by a political elite who would sacrifice the interests of Europe’s ordinary people in order to protect certain corporate interests.

Europe may still recover from this potentially terminal disease and decline. Insolvency must be purged from the system and it must be done openly and honestly. That path is not easy, but it is always the right path—for Finland, and for Europe.

Mr. Soini is the chairman of the True Finns Party in Finland.

That reads a bit differently, doesn’t it?

Among other things there is a clear statement that Ireland was intentionally screwed.  This also falls into what I reported earlier – that it was Tim Geithner who “forced” the Irish to not haircut bondholders.  Never mind that the same problem exists right here in America – pretending that our problems were “liquidity.”  They weren’t there and they’re not here. Period.

You don’t think that chain of responsibility being documented by the head of a political party might have resulted in a few phone calls from Treasury back to The Journal “asking nicely” to have all reference to this blatantly improper arm-twisting removed, do you?

By the way, wouldn’t such an act by a foreign government be considered an act of economic war?

I read – and reported on – this editorial as originally penned.  When I was directed back to the article by astute readers I discovered the changes.  Unfortunately for The Journal and others who would intentionally distort the record, the original was picked up and reprinted in its entirety in enough places on The Internet to be able to find what had been done, and reproduce it so you, the reader, can see exactly what sort of “sanitizing” of the truth our corporate media engages in.

You can find one of many copies of the original here, on a site hosted in Finland.  I have reprinted the original article for the express purpose of outlining the sort of outrageous revisionism that our corporate-owned media expects us to put up with and the rampant dishonesty that is found in those so-called “Newsrooms.”

PS: Yeah, I have it as originally presented on the web page as an image file.  Nice try jackals.  Now how about admitting who yanked your chain and “convinced” you to strip the rest out – especially if that pressure came from Treasury, as I suspect it did.

A succinct and cogent summary…

February 24, 2011

Funny, but factual… and sad… hat tip to Karl Denninger

http://www.market-ticker.org/akcs-www?post=180591

Karl Denninger on Caroline Baum

April 7, 2010

Denninger reports on Caroline Baum’s latest “evisceration” of Greenspan.

http://www.market-ticker.org/archives/2163-Greenspans-Delusions-Deepen.html

… and comments:

One place I do take issue with Caroline is that she asserts that monetary policy was the essence of the bubble. I disagree. The essence of the bubble was and is fraud, along with various deceptions that do not rise to the legal definition of fraudulent activity.  It always has been and this time was – and is – not different.

I will freely admit that the extent of my knowledge in economics and finance doesn’t even begin to approximate a fraction of that of Denninger’s but in my opinion the problem is the monetary system.

If you understand the dynamic and the logic of fiat money, then you must perforce conclude that an unchecked fiat monetary system must necessarily result in government becoming the largest actor in the economy. That’s because fiat money is predicated on inflation but inflation is an exponential dynamic thus its effect diminish over time. As the effects of inflation on GDP progression wane, government must initially tolerate practices that are border-line legal until, as the inflationary dynamic progresses to its logical conclusion, government must necessarily encourage and finally collude in practices that are against the letter of the law.

So the fraud Denninger talks about is a necessary outcome of the monetary system. In other words, the choice of monetary system is upstream of everything else… and the choice of monetary system is not ratified by society by the way… and, for that matter, the people don’t have a say in the management of that other tool that would enable us to maintain a fiat monetary system run at optimum for longer albeit at lower rates of economic expansion; interest rates.

… and talking about expansion… how come nobody has ever made the connection between unbridled inflation which brings about overconsumption and the devastation of our resources hence climate change… ?

Guido (rambling)

Is this a threat or an admission? (Fed Reserve Gen Counsel Scott Alvarez)

September 27, 2009

Fed Alvarez says audits could lead to higher rates

http://www.bloomberg.com/apps/news?pid=20601087&sid=adDANopNzewM

No kidding!

What remains to be seen is whether Mr. Alvarez is admitting to unorthodox shenanigans that, if uncovered, would immediately dent the trust that should be implicit in the fiduciary duty of the Fed hence sending interest rates through the roof or whether he is threatening to take down the economy if the Fed’s immunity should be breached and their criminal behavior exposed thus sending interest rates through the roof.

As a practical example of what this is all about, check out Karl Denningers’s latest regarding Fannie Mae:

http://market-ticker.org/archives/1468-Post-HR1207-Hearing-Out-The-Fed!.html

For my part, I can’t say. What I do know is that the Fed has already blackmailed Congress at least once under Paulson when he threatened martial law if the rescue package wasn’t approved and if the Fed weren’t given power to act as they saw fit with it.

Must read – Karl Denninger

August 20, 2009

And here is proof of government complicity in illegal and criminal deception.

http://market-ticker.org/archives/1352-We-Need-RTC-II-NOW.html

Stop the looting now (Karl Denninger)

August 11, 2009

And this, ladies and gentlemen, is the how and why we are hurtling towards a world war. The kitty is empty and no Western politician worth his salt will ever admit it or do what is required. And now that high unemployment is guaranteed and that large swathes of society will become destitute and could, very likely, revolt, we’ll just conjure up some nasty character somewhere and we’ll tell the great unwashed that something evil is being plotted against Western society and “freedom”.

http://market-ticker.org/archives/1317-DAMNIT,-STOP-THE-LOOTING-NOW!.html

Denninger on AIG

April 1, 2009

Other than in offering tags that are intimately related to the subject matter, I couldn’t possibly improve on this post by Karl Denninger

http://market-ticker.denninger.net/archives/916-Yoo-Hoo!-Yes,-Mr.-Cop-Over-THERE!-AIG.html