Interesting phrasing. Should I be putting my loonies in a sock?

‘The only function of economic forecasting is to make astrology look respectable’

Or…

‘There is something wonderful in seeing a wrong-headed majority assailed by truth’ JKB

For a set of proposals that governments can take to fight both of these battles, see http://baselinescenario.com/baseline-scenario-10608-proposals/.

We’re all in the process of waking up now.

It’s ironic but Larry Fink was one of the midwives of the tranche securtization. That flaws in that securitization methodology have been apparent for 25 years (witness the fact that the users of that technique no longer exist or no longer independent: First Boston, Salomon Brothers, Kidder Peabody, Donaldson Lufkin Jenrette).

Now, he will help himself to a portion of $700 billion of taxpayer money.

Mind meld! Exactly what was I gonna type. But it’s already there.

After the eye of the financial hurricane passes over, the question for researchers (don’t say “economists;” except for Roubini and a handful of others, they obviously didn’t have a frickin’ clue) will be: to what extent did the death throes of Bretton Woods II propagate the ‘bank-wasting disease’ worldwide?

I say, you don’t need no PhD Econ to figure this out. As the “reserve currency country,” the US spewed dollars across the globe for decades … and spewed them even faster during wars (Iraq, Afghanistan, etc.). Foreigners had to recycle them at a massive rate. Many went into Treasurys and agencies, keeping US interest rates artificially lower — and the dollar’s external purchasing power artificially higher — than it would otherwise have been. Thus, US trade and current account deficits had a self-reinforcing aspect.

But some foreigners, especially the private sector such as European banks which had to meet earnings targets, took the sucker bait of securitized mortgages with “triple A” ratings from … well, from a bunch of 20-something MBA trainees — LOL! In parallel, all the non-sterilized dollar monetization overseas produced local currency real estate Bubbles across Europe and elsewhere.

Bottom line: Mad Al bubbled the whole frickin’ world; Weimar Ben is pumping furiously to eclipse his record and garner the coveted title, Sir John Law III.

$700 billion, $700 trillion — it’s only paper money. I hear Weimar had some sublime parties, svelte flappers and sweet narcotics during its heady final days of hyperinflationary insanity. Rock on, Benny — party till the purple dawn; till the rosy glow of cities on flame smudges the horizon.

– Juan Falcone (from Bellevue psych ward)