Trader on BBC Sounds Alarm About Market Crash

This segment on BBC may not go viral, but it seems to be getting traction, based on the e-mails (hat tip readers Paul S and Marcus) and alerts in the comments section.

This is not an entertaining Rick Santelli-style rant, it’s a cool assessment of how the Euromarket crisis is likely to end, which he thinks is very badly. The flummoxed reaction of the BBC host suggests that the trader, Alessio Rastani, was a booking mistake.

But consider his second message: that Goldman and people rule the world and like him don’t care about what happens to the real economy. A depression is just a great investment opportunity if you see it coming and position yourself accordingly. Rastani is the bland, reasonable face of predatory capitalism.

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200 comments

  1. Jane Doe

    He thinks that the market can do well in a depression? What about a world wide one? I mean- I have to ask this: Even if he’s a predatory capitalist, does that mean he’s not also delusional? Because I think he is delusional.

    1. congressive

      No, he doesn’t think the markets will do well. He thinks HE can do well in a gigantic downturn if he’s got liquidity to buy up horribly depressed equities and properties in a depression market.

      1. chad

        That’s exactly right, if you can see if coming you can profit from anything. People who saw 2008 coming made out like bandits, see the story about Magnetaur(sp?).

      2. Angry Panda

        Between January 2009, which was the absolute bottom for the financial markets (if memory serves), and December 2010, you had a spectacular rally in just about every asset class. That’s how you profit in a Depression – you buy things up near the bottom, you wait, and eventually things roll your way.

        This is far more evident in credit than in equities, by the way. Stocks are all sentiment, little to no reason. Bonds and loans – at the end of the day, on such and such a date you’re entitled to X amount of interest and Y amount of principal. Either the borrower can pay, or he can’t. And in January of 2009, you had first lien loans of decently performing (even through the downturn) companies trading at 50 cents on the dollar (the entire loan market was at 69 cents on average, I think). Even over 3-4 years that’s a tremendous return, and in reality the bounce-back took all of six months…

        So yeah. Experienced Wall Street guys know that the best time to profit is when the world is blowing up. Not so good for the rest of the world, however. [Another example – after the Asian blow-up in 1997, anyone with dollars who came in and bought up physical assets in places like Thailand made out like a bandit within a few years. Can’t say the countries benefited, but that’s not what the game is about…]

        1. Jane Doe

          I didn’t know there was a depression in 2009. Nor did I know that this is the sort of thing you can have happen over a long period versus say a short depression, and continue to be okay, including in non-financial ways such as not having to barricade yourself in when the general population gets tired of you. But, hey, there’s nothing we can learn from the past outside of 2009 to tell us why a depression may not be a great for the rich.

    2. Crazy Horse

      Jane, you don’t understand the effects of leverage. Traders are not rubbing their hands in glee at the prospect of buying depressed assets that in some future prosperous world will be worth more. They are looking for ways to multiply their wealth tenfold in the next few months.

      You–yes I mean you– can purchase one futures contract on the SP 500 for a margin requirement of $500. If you short the index when it is at $1250 (which it may well see this week), and the market falls to $1000, you’ve just made $25,000. And in the highly unlikely event that it sees $1350 again soon, you’ve only lost $10,000.

      Little pipsqueak traders like the one being interviewed may control a hundred such contracts, perhaps with hedged positions to protect themselves if the market continues up for a while. Goldman has hundreds of thousands of such positions. Do the math. JPM likely made a billion dollars profit from their silver short positions last week alone. And this is just the transparent open market, not the dark pool derivative market that is many times larger.

      Does a Goldman trader (or CEO) care if real unemployment is at 20%, people living under freeway overpasses roasting stray dogs for dinner, and angry Greeks rioting in the streets? Why should he? There are no rioters surrounding his villa in the Virgin Islands and there is plenty of fuel in the Gulfstream.

  2. gs_runsthiscountry

    Rare is the appearance of truth speakers on MSM outlets. Booking mistake indeed, this guy makes Kyle Bass sound bullish.

    And, I stand corrected, gs_rulestheworld, my mistake.

    1. Karen

      It’s hard to tell for sure based on his appearance, but it does seem to fit their style, doesn’t it?

      Would not speak well of BBC for them to have been fooled twice by the same guys…

    2. Praedor

      That is not the same guy (not the “Yes Man” depicted. Close, certainly, but different racial makeup, different age (this guy is younger than the Yes Man depicted in the link).

      He may be another yes man, sure, but he isn’t the guy you wonder about.

  3. Franz

    I strongly suspect that this video will indeed go viral. It really grabs you on a visceral level because we all know that the mess we’re in is going to go down in the ultra new and improved annals of disaster capitalism.

    1. Montanamaven

      This was on Zero Hedge yesterday. I think it will go viral. And it would be cool if it was the “Yes Men”, but just looks like a mistake on BBC’s part to book this guy. As someone said over at ZERO HEDGE, “He would never get on CNBC.”

  4. ambrit

    Friends;
    This reinforces my agreement with C.S.Lewis, (The Screwtape Letters,) that evil is blandly and diligently bureaucratic. If Golden Sacks does indeed rule this world, then we’re already suffering in the Underworld.
    I particularly liked the line, “I want to help people.” The man looks sincere, that’s why he and others of his ilk are supremely dangerous. They were expected to “self regulate” themselves? As the lady above suggests, someone here is indeed delusional.

    1. Fraud Guy

      Another good source of the bland as consummate evil is Terry Pratchett and Neil Gaiman “Good Omens”. One devil increases the level of evil by doing such things as causing delays on the M5, timing phone solicitations to coincide with meal times, and sends a software licensing contract to his bosses below with the note: “Learn”.

    2. slothrop

      ” he and others of his ilk are supremely dangerous”

      Comments on this thread are drafty and obtuse. This guy is trying to survive in a career that will probably be over in 18 mos. He’s done his homework and will benefit from the greed and stupidity of others. Shorting is responsible for more market discipline than all regulations that have ever been.

      Anyone who does not follow his advice and protect themselves as best they know how is a complete idiot.

      1. ambrit

        Dear slothrop;
        I’ll ‘buy’ drafty and obtuse. The point here is not when to time the market, but to minimize the damage done to society as a whole by the actions of people like the gentleman above. Are you suggesting that the traders career is like that of a professional athlete? Short relative to eternity, but rich in reward? As for the putative intelligence of those of us here who don’t heed the advice of this ‘prophet crying out in the wilderness; how many people in the aggregate have enough funds to play the market in the first place? Are the rest of us to be treated as second class citizens? Our suffering from the depression to come from this unbridled greed doesn’t carry weight because we aren’t the ‘right sort?’] (I may have misread you, but the comment as a whole suggests such an interpretation.)
        Cheers.

        1. Fraud Guy

          And remember, in a poll of professional athletes, they were given the choice of playing as they are (training, natural gifts) with whatever career that would bring them, or being given a drug which would let them play at the top of their profession for 7 years (reaping the fame, money, etc. that comes with it), at the end of which time they would die.

          A majority chose the latter.

          Now imagine if you are in a profession where you can not only beat out your competition, but earn compensation that dwarfs that of the vast majority of professional athletes, and instead of dying at the end of your productive period, you instead get to retire while society dies around you.

          1. ambrit

            Dear Fraud Guy;
            You have described what a gentler age, (from misty hindsight I’ll agree,) called ‘glamour.’ These A type persuits are almost obsessive in their demands. They thus attract obsessive types. (Not all, I’ll posit the bell curve rules even here.) As the question shows, such high stakes professions do indeed involve a “Deal with the Devil.” And we all know who always gets the best of that transaction. What I’m objecting to is the fall out from this latest financial Deal with the Devil: the destruction of modern Western civil society. We were taught in school, in the long ago, that society was going to improve and progress. That ordinary people were going to have better and better lives. This has almost consciously been abandoned by the ‘elites.’ These people obviously haven’t read one of the premier philosophical documents of the Enlightenment; The American Constitution. What part of We the People don’t they understand? Or are they, as other commentators have explicated, completely out of touch with reality? Well, look out there, reality has a way of reaching out and touching us back from time to time.

          2. Dan B

            Except that if “the society around you dies” so do you. M. Thatcher’s “society does not exist” is the archetypical expression of the self-sufficient (and his family, according to Thatcher) individual delusion.

  5. Shankara

    Translation: Life is a swirling sucking eddy of despair filled with brief moments of false hope in an ever darkening universe. And I aim to profit off of it.

    1. Francois T

      Could it be because the BBC, contrary to the US establishment media, has this habit of inviting people different from total political hacks and bubble-head pundito-fuckologists?

    2. joe

      Finally, someone said it. Who the hell is this guy and why do we care what he has to say. Bears will agree with him because he is selling their book. Everyone else should ask themselves, who are you and I can tell from his website that he has no clue what goes on at Goldman Sachs.

  6. Mark

    A trader goes on TV and talks his book. This is news?

    Also, other than his admonition to protect ones assets and his dreams of imminent wealth for himself I don’t see how it’s really any different from what Paul Krugman has been saying lately in his blog. Anyone telling us that we are headed for deflation is basically saying the same thing but not making the implications clear to the average viewer/reader.

  7. rps

    He speaks a truth about GS and the large hedge funds living in the alternate reality bubble of get rich on the downfall of civilization. The disconnect is so fundamental to the point of absurdity. GS tribal drones truly believe that Wall St. and Main St. worlds will never intersect due to different planes of existence. It’s the matter and antimatter logic living in separate spheres. The shock and awe of a world depression and the chaotic domino effect will drown these guys like a tsunami.

    1. Jane

      Yes – I wonder if he will enjoy living in a failed society filled with desperate souls. Way too full of himself. I took a look at his website – very amateur. Just a self-promoter with little to offer.

      1. ambrit

        Dear Jane;
        Stock jobbers and similar were called ‘Promoters’ back in the good old Robber Baron days. Why is style such a big deal here? Content is the important thing. Yes, he does seem to be reinforcing some deeply held beliefs from around ‘here.’ That doesn’t make him wrong, just naif. “Out of the mouths of babes…” and all that.

        1. Fraud Guy

          And in medieval times, those who sold retirement benefits…in this case, salvation…were the Pardoners. You, too, can get into Heaven (or at least out of Purgatory/Social Security), or your beloved departed, with just this low investment in the Church.

          1. ambrit

            Dear Fraud Guy;
            Very subtle that. Pardoners indeed, but who is going to be the modern Luther? We already have a plethora of Tetzels, and a nascent Counter Reformation is waiting.

          2. Bob Visser

            Your modern Luther might well be a Lady: Elisabeth Warren. BTW at 75 I get up frequently during the night (SA time), when Auntie BBC is a faithful companion, and has been for many years. When I first heard this story last night, it was presented by a man, not a lady. It was repeated throughout the night with different presenters, until early this morning, again SA time. I therefore doubt that it was a booking mistake. I rather consider the BBC business-report on radio as one of the weakest sections of their news-bulletins and this may be (I hope) an endeavour to get “with it” rgds BV

  8. mmckinl

    Rastani is not far off. The plan to save Greece won’t. They will default. They’ll take a 50% hair cut when it should be 80% and the crisis begins all over again.

    We are in a deflationary spiral with peak resources and climate change while trying to save the wealth of the banks and the bond holders.

    Just look at the governance in Japan, the US and the EU. No help there. Japan has had 6 PMs in as many years. The US can’t agree on anything and the EU is like herding cats.

    We’re toast …

    1. ambrit

      Dear mmckinl;
      Why does it have to be the general ‘we’ who has to be incendiated? Say what you will about the Occupy Wall Stret crowd, and there is a lot of demonization going on aimed at them, they are trying to do something about the crisis and its’ causes. There is a crisis atmosphere slowly building in this country. The ‘elites’ should thank their lucky stars that non-violent protest has such a cachet in America. We could yet end up like Greece.

      1. mmckinl

        I am 100% behind the “Occupy Wall Street Crowd”. Unfortunately it is the banksters behind the wheel … there is little we can do to keep the wheels from falling off …

        The banksters and bond “boys” are holding sovereigns hostage over their assets otherwise known as debt. They will squeeze everyone as long as they can …

        1. ambrit

          Dear mmckinl;
          Sorry if I sounded censorious there. It’s just that the video was so visceral and scary. I hope this one does ‘go viral.’ A wakeup call to the Gens X and Y folks. Keep the faith.

  9. Darren Kenworthy

    Is it correct to say that the sort of actions he is advocating will tend to bring about the result he is clearly rooting for?

  10. Francois T

    After recently finishing re-reading Trend Following and the latest edition of Market Wizards, I realized this trader makes perfect sense.

    How often do you hear someone like him speak the naked, plain hard truth on teevee?

  11. rps

    The Nero’s of Wall St. really believe their invisible hazmat suits will insulate them from the implosion of world civilizations. The playing of violins have been updated to strumming the keyboard’s electronic one’s and zero’s as the world burns.

  12. /L

    “As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth … to provide men with buying power. … Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. … The other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

    Marriner Stoddard Eccles – Beckoning Frontiers, Chairman of the US Federal Reserve during FDR

    1. ambrit

      Dear sir;
      Spot on! The rest of ‘The Devils Dictionary’ is just as much fun. It should be a resource linked to this site.

      1. Tyler

        From memory:

        “Corporation:

        An entity with all the privileges
        of a citizen with none of the responsibilities”

  13. g kaiser

    He is seeing this as just another job. There is no linking what is going on with emotion. That is fine with me, but to think we have idiots of that ilk in charge, worries me profoundly. All things are interconnected, yet these guys are able to see themselves in strictly confined conditions, “I am just doing my job”.
    This is the attitude that will lead us to hell in a hand basket, and, may I add, on this forum so devoted to animals, this is the exact attitude to other living things that I fear will be our everlasting legacy. The wholesale slaughter of life in all its forms except human.
    I, for one, would like to be on the right side, when the time comes.

  14. Brett

    It seems to me that Goldman is getting kicked in the nuts by the volatility in the markets.

    http://dealbook.nytimes.com/2011/09/26/goldman-sachs-draws-up-deeper-cuts/

    Also, how do you make a lot of money betting on treasury bonds? It seems you’d protect your money, perhaps make some, but how much lower can yields go? The great treasury run has already passed us.

    If you are going to make money, you have to short banking stocks you think are going to go to zero. And you should have been doing this a long time ago. Barclays would have been a great one to go start shorting a couple months ago. But again, hard to predict where they will go given that these governments still are looking to bail out and recapitalize failing banks.

    1. Yves Smith Post author

      Traders are exiting positions to avoid talking losses.

      He’s not touting an investment strategy, and since he is licking his chops at the prospect of collapse, he’s on the short side.

      1. AndyC

        In the chaotic crash this guy anticipates why does he think he will get paid off on his positions

        He’s not Goldman Sachs

  15. Three Wickets

    Meh. Unfortunately the guy sounds like a goof. Would have been better if he were someone who projected more credibility. He just sounds like any other hack trader spouting predictable platitudes about the markets.

  16. k.b.

    but how are we supposed to “protect ourselves”? for example, a 50-year-old with just a 401k? what can you do but sit and watch, praying for a better day?

    1. Yves Smith Post author

      The first rule of investing is preserve capital. The second rule is never forget rule #1.

      It sounds as if you have not gotten over the memory of the markets of the 1990s and 2000s before the crash. Those are never coming back.

      The place to be in deflation is in cash and high quality bonds.

      1. Fraud Guy

        The problem is that, if you were wiped out due to extended successive job losses and medical bills, and are still climbing out of the debt pile, how do you invest in these wonderful instruments that you speak of in quantities that matter?

        1. ambrit

          Dear Fraud Guy;
          You dont; what you do do is find out who does profit from the bad times and go and rob them. Short and sweet, the definition of ‘societal clawback.’ The only ‘winners’ here would seem to be the ‘private armies’ springing up everywhere. If they aren’t careful, the ‘elites’ might find society going back way beyond their late eighteen hundreds target date, perhaps back to the Italian City State stage of the Renniasance. Old Tyme Values anyone?

          1. Fraud Guy

            Let’s see:

            Can’t move/sell home due to market collapse. Check.

            Can’t/afraid to change jobs due to high unemployment. Check.

            Treated to numerous small taxes that consume most of our income. Check.

            Subject to full weight of law while those above us routinely flout it with little or no effect. Check.

            We’re already back in medieval times, with the 98% cast as the serfs.

          2. ambrit

            Dear Fraud Guy;
            I can’t argue with that. The main thing missing from your list is Peasant Revolts. Perhaps Greece is leading the Western World yet again, the bellwether for the ‘flock.’

      2. Wendy

        Thank you! Finally, some specific advice for us non-finance types (learning, though, I hope). I have converted most assets to cash but bonds, that’s a bit scary, the high returns suggest high risk to my untrained eye.

        1. Franz

          I sleep better at night because I am only in cash and NOT in bonds, even the shortest-term ones. I really firmly believe that we will have a global economic collapse, and I am now using the cash accordingly.

      3. Praedor

        Yeah. The DoD is now looking at revamping military retirement to stick military members with a 401k instead of a pension. Yipee.

        My mind boggles. Do NONE of these asshats who make such suggestions (like those GOPer asshats that suggest “privatize social security” meaning “invest in the stock market”) not remember just 3 years ago? Or a decade prior? Etc, etc?

        This is all just more looting from the people that actually make civilization possible (the workers, the military grunts that do the dirty work of forcefully upholding the generally preferred civilization) and handing it all over to people who parasitize the actual labor of others and pretend that they “earned it” (the rich).

        1. Maju

          They are like a sect: they have been told that and they will parrot it at every occasion. They make me feel quite less confident on humankind, honestly but some people do not seem to change ever: they learned their script and can’t change the tune, ever, no matter what.

        2. Heron

          Of course they remember; their intent is to take the retirement of working class or middle management people, and transfer it to the rich. That’s why the 401k was invented, and that’s what they are trying to accomplish by doing a switch over. Remember, this is being floated as a cost reduction plan to reduce their liabilities; it seems too obvious to have to say, but a cost reduction plan is designed to reduce costs, and when applied to retirement plans that means it is meant to reduce the value of said retirement plans.

      4. chris

        Yves,

        The third rule of investing is never be so smug in your meme (deflation) that you do not see the forest for the trees.

      5. Heron

        I get bonds, but from my admittedly light reading regarding trading “cash” seems to be a loose term. Do you mean currencies? Treasuries? Commercial paper? I seem to have a hard time wrapping my head around what all “cash” entails in the technical sense, and what of that the private, non-institutional investor both has investment access to, and the appropriate scale to profit in.

  17. Paul Tioxon

    It is clear, having read NC, the comments and all of the rest of the comments of society for decades, that the business community thinks it rules the world. While the overwhelming influence of key organizations and networks of power are undeniable, the grade school mentality of business men and women, the banking types, the legalistic trading got to make a buck world of traders is so pathetic, that it is no wonder that Wharton and other business schools are regularly regarded as vocational training way stations for careers to be named later.

    The power of the mobile capital, crashing against the structure of the European Social order, not just a finance crisis, a simple liquidity crisis, but now, with 4 full years of observation by the political caste of Europeans, a full blown political crisis and imminent danger to the social order that must be met with commensurate power to stop a life threatening man made disaster will be more than a money making opportunity.

    I think as candid as this young man is, he is still a millionaire in waiting, he still sees himself as special. He sees destiny awaiting over the horizon, a Walt Disney ending and entitlement as sure as Rothschild, or Rockefeller or Gates and Jobs, who knows, but he has some fantasy, that he can crack the code of wealth and make out well. Maybe, maybe not.

    But as far as I can tell, the political establishment of Europe has had quite some time to deliberate and observe and see what they are up against. It is certainly, more time than the US had to figure out a response. More time to see the gravity of the situation, and the scale of the response. But unfortunately, it is too easy to err on not going over board, with major structural changes to the political establishment, just because people are losing money. Europe was reduced to ruble by war, and rebuilt itself. They measure disasters by something a lot worse than losing wages, vacations and prestige.

    If they see a threat as the economic equivalent of war, there will be a response, that will shock the world. Because, while new money can be issued, new businesses can be set up, new political orders are a magnitude of difficulty greater than the world of making a buck, and the world that produces the profound ignorance that GS rules the world. If it is the major disruption of the social order that is coming down the road, the alliance of the state with capital can be dispensed with by the state, more easily than people can accept. The MMT is the engine of political change and possible political shield of a democratically order society. The issuance of the Euro shows that money is not establish by Nature or some god, just as the USA showed that a nation state can be established not out the shadowy mists of legend, but simply by cooperating together with one another via rational deliberations.

    Strong arm dictators are falling all over the Middle East, and I expect strong arm economic extortionist to fall in the coming yeas and decades as well. Does anyone really expect that nations with armies will allow themselves to be torn apart over scraps of paper and accounting records of financial contracts held by sociopaths that are too much a problem to have to put be up with anymore?

    1. ambrit

      Mr Tioxon;
      The problem with your last arguement, from my perspective, is that History shows too many cases where the armies, or societal equivalents, have become the government. Like Alixander with the Gordian Knot, Occams Razor is sharply, and double edgedly, bought to bear on the problem at hand. As implied, double edged solutions tend to inflict maximum pain on all sides of the dispute. “No one gets out of here alive.”

      1. Maju

        That’s not viable in the society we live in anymore. Tioxon is right: the era of military juntas is over.

        There can still be authoritarian governments under a democratic pretext but outright military rule can’t hold but for a few months. Look at Honduras: the coup is a total failure that has reinforced the revolutionary movement and is unable to commit a single act of repression without the whole World knowing in a matter of hours, days at worst. Do you think that Hitler or even Pinochet could get away in this hyper-informed context? Secrecy is not an option anymore and there’s no dictatorship without secrecy and lies.

        The whole propaganda machinery needs at the least a radical revision: the very figure of single unilateral emitter, like a priest on the pulpit (propaganda is after all a Catholic-coined word), is over. The emitters are now many and largely indistinct from the receivers and such conditions are the natural pillars for advanced democracy. More advanced than the formal, deaf, “democracies” we suffer now.

        1. ambrit

          Dear Maju;
          OK, I’ll bite. Haven’t you been viewing the creeping sanitization of the web with alarm yet? The earlier piece about the progressive types promoting an independant web should warn you about how dire the environment for freedom of expression and association is becoming. No les a neo-liberal shill as Bill Clinton has proposed that the Internet be policed by ‘appropriate authorities’ to guarantee, whatever. Modern communication is a classic case of complexity being the weak point of a system. Taking down modern private communication is rediculously easy. I liken it to the youngsters running the check out line who can’t do simple maths in their head when the computer gors down. They just go along with the interruption. The failure of a relatively simple machine immobilizes them. Imagine the chaos when the communications web goes poof! And, as we all know, chaos is the autocrats favourite condition. The Army can’t take over and rule? Just trying to would be bad enough. Thank G– Army officers swear an oath to defend the Constitution, and not the Government. Those Founding Fathers weren’t stupid.

          1. Maju

            They try but they can’t control it: it’s basic thermodynamics: total control is plainly impossible, entropy always wins. They can plug a hole or two with censorship and repression but for each one they plug a dozen new are opened. They can’t win: the time of autocracy is over.

            To tell you in advanced Marxist conceptualizations: Capitalism has been so successful in organizing the collective power of the Working Class that it has dug its own tomb. At this point the central contradiction is not more just exploitation but control: the control of the Bourgeoisie on the economy (and by extension society and politics) is each day more obviously a failure and this can only end with their replacement (inefficient leaderships do not last).

            “… as we all know, chaos is the autocrats favourite condition”.

            Not at all: if communications fail, the system collapses. People do not eat communications, the system does.

            People just uses communications, just like they use roads. Would the system be better off if all roads are closed. A tactical road blockade may make some sense but closing them all is just throwing stones on their own glass roof.

            Example: Mubarak. The people left the computers and went to Tahrir. Mubarak could not win and he should have quit earlier: there’s no win in losing everything.

          2. ambrit

            Dear Maju;
            May I suggest that you may be ascribing too much foresight to the looting classes? The competent parasite never kills its’ host. How about all those incompetent parasites? You know, the ones who went extinct?
            As for the arguement for self sustaining communications networks and all; remember the Dark Ages? They were called that because they followed a period of high culture that collapsed. Don’t think it can’t happen again. I’ve read that one Neutron Warhead Airburst high above the plains of Nebraska can cripple Americas communications networks. Anyone have info on that? Still, don’t forget, true fanatics of any type will accept the complete degradation of ‘Modern Culture’ just so long as their ‘side’ comes out on top of whatever is left.

          3. Paul Tioxon

            Historically, armies have and do now control some nations. The US military is dispersed all over the world. 700 military installations worldwide, even the US Navy’s fleet facilities are so far away, that home port to them is Guam, Pearl Harbor, not exactly next door. I am not sure what kind of military role would be developed. There are 5 million members of the NRA, they out number the standing military 3-1. And then, there are the criminals, 2 million incarcerated, millions more roaming around. The potential for armed chaos in this country and a complete lack of responses in proportion to the threat does not look like the government takes domestic insurrection seriously. They take airport groping of passengers more seriously, and call it security.

            My point is, that the merchants used to handle the finances of kings and popes, because they were doing other things. In America especially, and certainly these days Europe, the need for finance help is not needed at all. In America, all we do is business, even war is business to us, most combat fighters are a small percent of the armed forces, the rest is support. A good logistics and supply general is worth is weight in gold in the private sector. Private capital does not have any exclusive hold on knowledge, innovation, expertise, that the state does not possess. I see private capital and its political operation as capitalism as being more irrelevant and redundant, hence costly to maintain. As bankers know, countries do not go out of business, they are perpetual social order machines. Business can go belly up, merge, slowly fade by not growing etc.

            If a large enough offer is tendered for the price of the shares of stock, the board has to take it, sell the company, and it goes out of existence. Countries do not preside over their own liquidation. They have the monopoly of violence to assure that. Business just take the money and move on.

          4. Maju

            @ Armbrit:

            I do not ascribe foresight (though sometimes I wish they had some) to the Bourgeoisie, all I say is that certain strategies are failures since day 1, extremely unstable, totally losing strategies.

            I know that they do not like to be called ‘losers’ however, much less to be exposed as such. All their existential anxiety is about being ‘winners’, yet they lack adequate strategies.

            … “remember the Dark Ages? They were called that because they followed a period of high culture that collapsed”.

            I do not think that you can extrapolate Iron Age concepts to the (post-) Industrial Era. They are fundamentally different things. It’s like talking of the importance of bison (fundamental to foragers) to cattle herders: totally pointless (or almost so).

            If you read Deleuze and Guattari, you realize that, while the feudalist concepts dominating in the Iron Age are central to reactionary paranoia, reaction is powerless: just a temporary reflux in a (Capitalist) decodifying tide that cannot be stopped.

            The Capitalist/Industrial era is a whole new phase for humankind. We can not be sure about where it brings us but for sure it does not bring us to the Neolithic past of Rome and the Goths.

            “… can cripple Americas communications networks”.

            Maybe and it’d be interesting to watch/live through such an event. But this stuff is built by human knowledge and skill and can be reconstructed in a matter of months (at the worst). Paraphrasing Durruti, we are the ones who have laid the cable and radio and even the satellite networks… we can rebuild after destruction. And only we, the workers, can do it.

            @Tioxon:

            “Historically, armies have and do now control some nations”.

            They are collapsing as we speak: look at Tunisia, look at Egypt, look at Syria… Yes, look at Syria: they are literally bombing half the country and they can’t stop the popular revolt. Assad is finished no matter how strong and merciless his army is. It’s a matter of days or months…

            When all the Arab tyrannies fall, it’ll come the time of China, which, as we know is on the tight rope. As soon as growth begins to decline, the fascism-under-red-banner of Beijing will collapse. Actually fascisms are even more sensitive to public opinion than “democracies”, which can play the game of sock-puppet replacement and are in general quite more flexible and adaptive.

          5. citalopram

            Egypt is not a success story, not yet. Egypt’s military is now in the driver’s seat ruling the country, much to the dismay of it’s populace.

          6. Maju

            The Egyptian army is where it is because it disobeyed Mubarak and even deposed him, earning at least some respect from the People. But the Army is anyhow dependent of what the People says and there are elections scheduled for this fall in any case, as well as a widespread state of revolt that is even imposing a foreign policy according to the will of the people (expulsion of Zionist diplomats, systematic sabotage of pipeline to Israel…)

            As Kropotkin once said: you cannot reign in a revolution, which is like a tsunami, at the best you can stay on top of the wave and survive to pick up the pieces once all settles down. He said that of the Bolsheviks in the Russian Revolution of 1917, so go figure!

        2. JasonRines

          Profoundly insightful. Mankind has been using 3d tools for ten thousand years but only began practicing 4d models for several centuries. The Information Age presents a giant mirror with all our beauty and ugliness in front of us. Confronting the ugly truth in the past with lies from politicians is how we could live in denial. Now we can’t and that is healthy but quite a painful societal adjustment short-term.

          And the information tools that should have been used to buffer this transition were used to loot. Such seems always the way of how new technologies are applied – for military purpose. We’ll erect a digital leverage barometer after the dust (literally) settles from this unfolding disaster to perhaps give future generations a bit more time before being bamboozled to sign on dotted line. Enough pontification for the day ;)

      2. Praedor

        As far as I’m concerned, if I’m going down due to your predations (not YOU specifically, the collective ‘you’ of GS, etc) then I am taking you down with me in blood. You don’t get to enjoy any profits on dissolution, you get to feel actual physical pain, feel real existential fear, and observe as your carefully gated community is burned to the ground and your neighbors are burned at the stake.

        Thus I am PARTIALLY welcoming of the ugly part you decry. It too will pass but at least those who pushed it all upon us for personal profit can be forced to suffer. That’s enough for me.

        1. citalopram

          Amen. Violence is still relevant, especially with tens of thousands of people who have been robbed of their livelihoods.

    2. Tyler

      You saw what happened to the last government in
      Europe that repudiated finance capitalism and created its own currency based on production.

      1. ambrit

        Dear Tyler;
        Yes, but they totally missed Marxs’ intermediate stage and went from Feudalism to “Communism.” They then fell back into their traditional system of Eastern Despotism.

        1. Maju

          Actually not, Ambrit, they never reached Communism (which implies the dismantling of the state). Krushev proclaimed that the USSR had achieved “communism” (neither Lenin nor Stalin were so arrogant) but it was such an obvious, albeit Orwellian, mockery of truth that it could only be laughed at (unless you were a party member).

          The issue of the “unexpected” Soviet system has been discussed a lot by Marxists: Trotskyists specially consider it a degenerate worker state (a Bonapartist degeneration, much like Napoleon’s France was a degeneration of the First Republic).

          They may be right to some extent but I think that we are visualizing here an evolution of bourgeois revolutions themselves. After all it was always the workers, the sans-culottes, who manned the bourgeois revolutions and created the so-called “bourgeois democracies”. It was not the bourgeoisie except as de facto leadership and burden of the unorganized workers. With time bourgeois revolutions took more and more worker colors, ideology and organization. And this materialized specially in the early 20th century revolutions from Russia to Cuba, going through China and Vietnam. All them are, with different shades, bourgeois revolutions under advanced ideologies, which emphasize in theory the role of the working class and de-emphasize that of the bourgeoisie, which is largely replaced by a bureaucracy.

          But, well, it’s a long discussion. Suffice to say that I think with Marx that the Communist revolution (or something similar) can and will only happen in regions with advanced Capitalism and therefore fully developed Working Classes. For example, North America or Europe.

  18. Joel

    Come on the guy is a class A douche, what is he saying that this blog and lots of other commentators have not been saying for a long time? The interviewer is awesome though, pure comic relief.

    1. Yves Smith Post author

      I thought it was amusing that he was not saying anything that you don’t see in the FT (Munchau) or the Telegraph (Ambrose Evans-Pritchard), yet the BBC woman nearly had a heart attack.

      1. carol

        Amusing??

        This ‘independent trader’ did NOT sound the alarm of a market crash. On the contrary, he is hoping and dreaming of a market crash. He may even be working — either as a lone wolf or with other financial terrorists — trying to get to some tipping point for the market to crash.

        The BBC lady (and studio audience) was not shocked by his prediction of a crash. That she may have heard from others indeed.

        She was shocked by his dream and wishes to have millions of people lose their savings, jobs, and societies losing their social fabric.

        1. Yves Smith Post author

          Listen again. He dismissed a Euro rescue happening, said traders generally don’t buy it, and he expects a crash in 12 to 18 months. He said he EXPECTS millions to lose their savings. This was a call. He thinks it is close to inevitable but is not clear as to timing.

      2. mr ugly

        I don’t think the BBC lady’s draw dropped because of an inability to cope with the idea of European markets crashing — rather it was because of the Gecko-like candour with with which he confided that he dreamt of their crashing, explicitly expressing indifference to the consequences for the wider society.

        It’s hard to see that your own amusement is much to your credit.

        1. doom

          I don’t understand the censorious attitude toward this guy. For years now, the Fed has suppressed yields to drive me into riskier assets so that the banks that own the state can recoup their losses by ruining me. So I say no, I’m not gonna play along. I’m going to get beta negative (also beta neutral but not dollar neutral) and make money on misery because that’s where the money is. It’s not turpitude or sociopathy. It’s self-preservation. If you live in Equatorial Guinea, you don’t live by reciprocity and moral obligations, you live by perfidy, crime, and corruption. This country is also a degenerate basket case and people need to adjust.

          1. Wendy

            “the Fed has suppressed yields to drive me into riskier assets”

            YES.

            Not to mention tax-subsidized the same thing via 401Ks, which force many into the casino.

          2. Blissex

            I like your story, but it is not quite right. The Fed has been doing what they are doing primarily because fiscal policy is impossible because conservatives see it always as a transfer of income from deserving rich to parasitical poor.

            The Fed has a *dual* strategy, and you being driven into riskier assets (the AAA bubble) is only a side effect, even if of course they love it:

            * The first and biggest aspect of the strategy is enormous credit expansion. The target there is the *quantity* of credit more than the price. The more the merrier. Because credit booms drive asset price booms, and create vast capital gain which are low-tax or tax-free. This is Greenspan’s policy of solving every problem by “rebuilding balance sheets”, that is giving capital gains to the rich. If you expect to get your returns from interest or dividends on your capital, and not appreciation, you are playing against the grain, and too bad for you.

            * The strategy also is about low nominal interest rates and in particular negative real interest rates, as you say, but that is not to drive you and others into riskier assets, that’s an insignificant concern. It is to make the burden of that ever increasing debt and leverage \as small as possible. Including to the federal government, a very big debtor, which can then cut taxes because the costs of financing expenditure with debt are so low, and also the interest costs are so low.

            To a very large extent, if the actions of the controlling elites of the USA make sense, they have decided to liquidate their USA investments as the USA is a low growth, strong currency, high labor cost prospect, and they want to invest into high growth, cheap currency, low labor cost economies, especially those with large markets or large endowments of commodities, and thus are supporting whatever engenders a series of pump-and-dump asset price bubbles in the USA.

            Another interesting aspect of the whole situation is that the USA is a nation running a war economy, even if nobody wants to say it, and a war economy that is for the first time in the history of humanity “financed” by tax cuts rather than tax increases. That’s amazing.

        2. PL

          It was the way he said it–admitting to yearning for financial catastrophe and asserting that government is subordinate to Goldman. Chilling, sociopathic, predatory statements calmly uttered from the mouth of an unassuming looking fellow. Cognitive dissonance.

        3. doom

          Of course the government is subordinate to Goldman Sachs. And of course every prudent citizen needs to position for catastrophe, simply to compensate for four years of screwing savers to bail out banks. Catastrophe, with all its attendant suffering, is in fact our best shot at signficant reform of the predatory kleptocracy that has captured the US. We should all hope ardently for catastrophe, and do what we can to precipitate it: default on debts, withdraw money from criminal banks and vulnerable money market funds, limit and defer consumption, undermine, sabotage, wreck.

          1. doom

            Threw in the adjective because the distinctive feature today is the way this government feeds citizens to corporations: to health insurers, having isolated them and stripped them of the protection of groups or co-ops; or to banks, by harassing the unbanked and negating property rights; or to telecom companies for surveillance as a profit center. Old-time African kleptocrats would steal from foreign donors – skim, really. Subsistence farmers hardly noticed. By contrast today’s kleptocrats help corporations extort more and more of consumers’ future earnings. It’s more than theft, it’s coercion and often violence.

          2. citalopram

            Americans don’t have to put up with it, but they do. For them most part, Americans are still waiting for The Leader to come and make everything better again.

            I’m betting on massive revolt or bust. Either Americans are going to be serfs, or they are going to rise up and demand to be knighted. They have to make the decision en masse.

      1. Brett

        I can’t understand why a trader would want to be on twitter. It makes it so easy to follow his timeline in reverse and see all the bad calls he’s made.

          1. Yves Smith Post author

            You can delete and edit tweets, didn’t you know? And they aren’t archived for all that long.

    2. Jesse

      It’s the whole (paraphrasing) “I dream about the market imploding so I make a massive fortune” while also acknowledging that (paraphrasing) “many people will lose everything” that is unique to this video.

  19. Adrian Haiwei

    I’ve heard enough about what the smart money is doing. I want to know what the dumb money is doing. From my experience on Wall Street, there’s a lot more of the latter (just look at any asshole infested corporation with a massive stock-buy-back program, or the acquirer in most of the major M&A deals over the last 10 years).

    Funny thing is that “at the end of the day” most of the dumb money gamblers walk away with nice paychecks and bonuses. Its only the people without any money who end up really fucked – most of whom then roll out of bed and go demand more sodomy at the ballot box by voting Republican (either the real ones or the phony ones who go by “Democrat”).

    1. Heron

      That is truly an annoying aspect of all this. The traders who lose your money walk away with golden parachutes, while you get soaked. In the case of Goldman and Citi, we even know that many of them were intentionally soaking their investors while profiting, both institutionally and personally, by betting against the poor investments they were intentionally making.

  20. Maximilien

    Even if he’s short the market and cold-heartedly talking his book, he has at least declared his position.

    A trader on CNBC would have advised people to invest in the market (“Stocks are on sale!”) while he and his firm were shorting it.

  21. Turkle

    I think that many commenters have totally missed the point of the video. The surprise is not his prediction of global financial catastrophe which, as many have pointed out, is likely just him ‘talking his book.’ The surprise is also not his assertion that Goldman runs the world, or even that he appears to be a world-class creep.

    The point is his casual, unblinking assertion that he, and many like him, are praying for another recession because they stand to immensely profit from it. This is not something Lloyd Blankfein likes to come out and say on the television. This trader looks forward to that with full knowledge that, as he describes it, millions will watch their savings vanish into thin air.

    What this casual admission so clearly illustrates is that finance capital has been allowed to again become utterly predatory, and that the people working in said sector are unapologetic to the point of sociopathy. When one can pray for an event certain to cause massive human misery, one has crossed a rather obvious moral line.

    The society that is capable of producing and rewarding such sociopathy is quite broken, I’d say.

    1. Typing Monkey

      What this casual admission so clearly illustrates is that finance capital has been allowed to again become utterly predatory, and that the people working in said sector are unapologetic to the point of sociopathy.

      I don’t think he has a salaried job in this sector–I think he’s just a small-time trader who for whatever reason managed to get a BBC interview. He’s being deliberately blunt to collect a following (ie, monetize his BBC interview) and so that he can claim to “have called the 2011 (or 2012) crash”.

      When one can pray for an event certain to cause massive human misery, one has crossed a rather obvious moral line.

      All he’s really said is that he’s long volatility. Big deal…He just did it in a deliberately provocative manner because he only had three minutes to grab people’s attention.

      As for his “GS runs the world” comment–that’s simply equivalent to Carville’s desire to be reincarnated as the bond market. I think people may be reading too much into this.

      1. JTFaraday

        That’s not what he said. Don’t you remember the last meltdown?

        What he said was that Goldman Sachs and “the big funds” are going to pro-actively short Europe into oblivion in the next 12-18 months. None of them cares what that means for European society or anyone else.

        The governments and Goldman Sachs are one, so the fix is in.
        He’s along for the ride, and he’s advising you not to bet against the house.

        Now, if he (and the big funds and whoever else was so inclined) weren’t sheep they would just short Goldman Sachs into oblivion and to heck with the social consequences, because at the end of the day, society would be much better off without the 800 ton sociopath throwing its weight around. (And, certainly, Goldman Sachs knows how to eliminate the competition).

        But, he’s obviously a sheep.

        1. Blissex

          «What he said was that Goldman Sachs and “the big funds” are going to pro-actively short Europe into oblivion in the next 12-18 months. None of them cares what that means for European society or anyone else.»

          And I support the notion that the primary duty of a for profit company is to make money, not be do-gooders. This because I think that it takes all sorts to have a healthy political and economical setup (and do gooders are dangerous too).

          «The governments and Goldman Sachs are one, so the fix is in. He’s along for the ride, and he’s advising you not to bet against the house.»

          Ahhh but this is the real bad deal. One thing is advocates of screwing you fighting it out with you fairly, another is the house siding with them. I don’t mind the other team being bastards and trying to win, it is their job; I don’t ask them to be nice adversaries and be real good to my team and pull their punches as long as the rules allow them. But when they buy the referee or bribe my players, that’s the worrying bit.

    2. Valissa

      Predators are a natural part of any ecosystem. There are predators in the animal, plant and insect kingdoms. Some predators pounce directly and others are more devious (as in venus fly traps). The natural world is a dangerous place. I have alsways found it a fascianting contradiction that so many liberals are pro-environment and want more ecological economics, but have a hard time dealing with predation as a natural function of life. Instead they want everyone to place nice and be fair. Go tell that to a lion or tiger who will pick off the weakest of the prey group. This trader is performing a necessary and natural function in the money world.

      1. F. Beard

        Go tell that to a lion or tiger who will pick off the weakest of the prey group. Valissa

        OTOH:

        “And the wolf will dwell with the lamb, and the leopard will lie down with the young goat, And the calf and the young lion and the fatling together; And a little boy will lead them.” Isaiah 11:6

        If you watch enough YouTube animal videos you’ll realize that natural enemies can be friends under the right circumstances. Predation is NOT inevitable (unless you believe as MyLessThanPrimeBeef does that eating plants is murder).

      2. ReaderOfTeaLeaves

        I fit the Eco, and the liberal (for the most part).
        Sure, predators are * part of* nature, but in the natural world they don’t control the systems. At fairly low boundaries, they destroy their own food supply and then they starve.

        In other words, their conduct ends up being self-defeating.

      3. Maju

        Most predators do not prey on their own kind. Intra-species competition is for real but it’s almost never predatory.

        Also we are a very special species: not just highly social (no other species, not even ants, are so extremely social) but also highly intelligent (I doubt that even the smartest of dolphins are smarter than we are on average).

        Finally the social-darwinism you spouse, is unreal: cooperation within and between species is fundamental. Most species cooperate or ignore each other most of the time. A bird’s cry alerts the antelopes, the mucosity of this bacteria serves as basis for that one… most of the bacteria in our bodies are beneficial (though may become harmful if the conditions deteriorate maybe).

        What do predators do? Just keep numbers relatively controlled (though most of that control is done by famine, illnesses, etc).

        Well, we can achieve that with condoms, sincerely. We do not need “predators” among us: we can self-regulate, provided that “birther” religious brainwashing is kept at bay and contraceptive methods are widely available for all and for free.

        Anyhow, I think this guy is naive: his solutions are not such: he believes that somehow the USA is sounder than EU, what IMO is not the case at all.

  22. psychohistorian

    Interesting social comment put in humanity’s face by the MSM…..why?

    I find it interesting that this Shock Doctrine event that we (the world?) are in, which was more than less caused by greedy and unethical US financial types, is now trying to be forced further on the evolving EU as breaking point of existing debt structures.

    I see the goal being to break the progressive social contracts of the EU states individually or collectively. They still have social safety nets and working educational systems (relatively speaking) and this model MUST be deprecated at all cost. The gutting of the American system is all but a fait accompli at this point and if the EU safety net is slashed then emerging countries populations that do not have a adequate resource base will be less likely to reduce the competitiveness of their labor force with safety net “frills”.

    Ain’t global fascism fun?

    Laugh the global inherited rich out of control of our society and into “rooms’ at the Hague.

  23. appointmetotheboard

    I said it on Max Keiser, and I’ll say it here. Rastani – what a wanker. In fact, he’s going on the next, “the i’d charge you a tenner to piss on you if i saw you on fire award” shortlist.

  24. trader123

    agree 100%, & we should thank him for being honest. as a trader, we dont care if the market goes up or down, we make money from both.

  25. Hugh

    This is what I have been saying for some time. Kleptocrats do not think like you and I. They do not have the same priorities. They will loot until they crash the system. Then they will loot the crash.

    As we saw in 2008, they socialized their losses by pushing them off on to the public in the form of bailouts. The TBTF became even bigger and even more TBTF. Their hold over government and politicians increased. And their slice of the world economy and its assets increased as well. Crashes are bad only for us rubes. For the PTB, a crash is just a Shock Doctrine moment they use to expand their looting.

  26. joe

    Honestly though, there is always an element in society saying this kind of thing– a classic pop-culture example is the rap music of Tupac etc. The whole Machiavellian thing: life is all about “guns, money and hoes” ( Hoes? ) etc. Rap musicians were historically a group of ( mainly black American ) people, who were disenfranchised from society– singing for other disenfranchised people, who felt that they could never partake in the wealth of society, etc. So, in this context main stream society is objectified as something which can be “played” and generally treated as an enemy.

    We can generalise this to other groups, particularly in the US, and a common theory about what causes this kind of negative anti-social behaviour is to do with the amount of inequality in a society. It’s quite a complicated argument but as a quick comment, this is a fairly excepted position, I believe.

    So my question is: Why is this guy saying what he’s saying?

    I mean, it is an obviously inflammatory message for the majority of people. And he doesn’t seem to belong to a cultural minority that would “naturally” see mainstream society as the enemy. So the important thing for me, is to try and understand, is main stream Western culture falling apart? Is this guy representative of beliefs that we find today at the core of our society. Or is this more local and specific to financial professionals, and in particular traders? In other words, does he seriously believe that he deserves a lot of money for just being a trader.

    I mean lets be honest, while we may in fact be in a lot of trouble, if the too-big-to-fail banks fail, it wouldn’t matter to society, if most of the professional financial class suddenly disappeared from the face of the planet. They don’t actually produce anything. They are not generating real “wealth.” Which isn’t to say that the financial industry isn’t important, or in fact crucial for modern society, it’s just that it really does seem to be out of control. That such a crucial mechanism in our way of life is so obviously broken and that there seems to be no response has to start concerning people.

    But take Europe, for example, even if people are concerned, there is no political representation which is offering another alternative. I think it’s the same in the US. The only show in town is to save the banks at all costs. This is not democracy, this is tyranny.

  27. DE

    He’s an a$$hole, but at least Rastani is honest. What he said is indeed a very accurate depiction of how the financial markets and world work. If only more people would pay attention to what Rastani said than to the daily garbage that comes out of some politician’s mouth.

  28. wunsacon

    In the movie “The Corporation”, one trader admits that his first reaction on 911 upon hearing that planes flew into the WTC was: “That’s good for gold.”

  29. Philip Pilkington

    Well that was candid.

    I’m not 100% on how people will lose savings though. Bank run? Eurozone banks melting down? Inflation? He wasn’t very specific…

    1. Wendy

      I too am curious what he is suggesting. Does he mean 401Ks evaporate, or cash/bank deposits do (hard to imagine in the US, with FDIC protection), or is there something else?

      1. Philip Pilkington

        Probably the fact that Europe doesn’t have any equivalent to FDIC. Most countries only insure deposits up to the tune of €100,000. So, if there was a meltdown and no backstop was put in place people could well lose their savings.

        Also consider people tying their savings up in the stock markets. If the markets crashed this would wipe out those savings.

        I don’t get the impression that this guy is an idiot hyperinflation hyper-ventilator, so I’d say these are the lines along which he’s thinking. I hope he’s wrong, of course, but he could well be right.

        1. Wendy

          But how can that be what and who he is alluding to? He says “millions will lose everything.” There are not millions who have cash in the bank of more than 100,000 Euros. Of those few percent who do, they for one, have diversified that risk by allocating funds between multiple banks. And for those who have far too much cash for diversifying to be an answer – well, for one, there aren’t millions of those people, and second, people with that kind of cash would, I assume, have other assets, so they won’t lose everything.
          So who and what does he really mean?

          1. Philip Pilkington

            Well, maybe the banks is the wrong line to take.

            But as for the markets, I think there are certainly millions of people with a few tens of thousands — perhaps more — tied up in the markets. Maybe its a part of their pension or maybe the funds are being stored up for a rainy day. But any serious shocks to the markets — both stock and commodities markets — could well flush these savings down the toilet.

            The stock markets are presently over-valued — hence why it’s no surprise they’re falling right now — and commodities are in a major bubble. People with their spare assets tied up in this — and there are many — could lose significantly. Maybe pension funds tied into the markets too.

    2. Blissex

      «I’m not 100% on how people will lose savings though. Bank run? Eurozone banks melting down? Inflation? He wasn’t very specific…»

      That’s the whole core of the current story! And the second core reason for TARP etc.

      The bailouts are not so much of the banks, but the pension and insurance funds who have bought lots of repackaged liar loans from those banks, and are heavily invested in bank shares, because financials are such a large part of indexes and have been for 1-2 decades the fastest growing stocks.

      If Greece etc. don’t pay, this hits the pension and insurance funds twice because:

      * Those funds were told by regulators to buy a lot of sovereign bonds as it as “safe” (zero reserves), and of course the funds could boost their declared returns by buying the highest interest sovereign bonds.

      * Some of those bonds are still held by the banks, and european banks are phenomenally leveraged, so even relatively small losses on those bonds can wipe out their capital and reserves and thus bankrupt them. And if they go bankrupt their shares become worthless and this blows another huge hole into pension and insurance funds.

      No european government and least of all the German one wants to tell their voters that their pensions are invested in liar loans and the shares very risky banks.

      Also because if it all blows up the banks and pension and insurance funds have a pretty good defense: they acted under instruction and pressure of their governments, who were desperate to make liar loans to Greece etc. to boost exports (also by keeping the euro low).

      The financial system in the USA, Japan, Europe, China, is in effect only partially private; their status is a bit between that of GSEs and oil companies, in that they are both transmission belts of industrial policy, and instruments of foreign policy. Of course they push back and bribe their controllers, but be sure that ultimately the guys who are in control are the Cheneys, the political elite, even if they move between private and public investment. Not many will know that before being Treasury and before being Goldman Sachs Hank Paulson started his career as assistant to Erlichmann as a Republican appointee. His loyalty is not as many think to Goldman Sachs before Treasury; GS themselves to people like Paulson are just a tool; his primary loyalty is to his faction.

      There are similar arrangements in Europe, where France’s ENArques move between banks and ministries, or British Tory politicians move also between brokers and ministries.

      The overall big deal is that some of Europe’s government have been desperate to create asset bubbles based on debt, and some other of Europe’s government have been desperate to create export bubbles based on loans, in order to mask an overall stagnation of first-world economies, as I have the impression that the 1980s recession never ended in the real economy of first-world states.

  30. pj

    This guy is a nobody trying to move the market all by his lonesome – or he’s a big, fat joker with an agenda.

    Goldman Sacks may make and hold a crapload of money, but don’t forget who has the absolute right to TAKE your money if they so decree it – and who controls the armed enforcers. It ain’t bankers on Wall Street – although government does protect the bankers until they get too uppity.

  31. Maju

    I find the guy quite naive: he suggests all the time unimaginative strategies like buying US treasuries and US dollars.

    I would favor that strategy from the viewpoint of a real economy (i.e. not to make money but to help solve EU’s imbalances, weaknesses) because that would weaken the euro and that is very good news for Europe, at least for the Eurozone.

    But overall I think that the guy does not know what he’s talking about because the USA is not safer than the Eurozone: that is a total mirage he has an which does not seem to have any foundation.

    He’s gonna lose money.

    1. Philip Pilkington

      Actually, he’s pretty much right. Everyone is buying t-bills. They’re a 100% investment because the US government backs them — and the US government prints dollars. There is no equivalent in the EU.

      If you want to undertake ‘imaginative’ investment in this environment, go ahead… your funeral.

      I still am not sure why he thinks saving will evaporate. He was very unspecific but I can imagine a few ways they could…

      1. Susan the other

        Maybe this too-guileless trader is a Timmy tool. He gets on the BBC? How? and then he makes comments that confound a lot of people. He drops a threat that we are all going to lose everything in 12 to 18 months. Probably just enough time to foment enough hysteria to create a brand new world bank. But the stubborn Europeans are being difficult. This guy is destroying them by suggesting that everyone should run for the hills; buy US treasuries and stuff cash in their mattresses. I bet he is just another DSK moment.

        1. Philip Pilkington

          Seems to me that there’s every chance he’s right on the stock market and probably the commodities markets too.

          Probably not right on the European banks (if this is what he’s thinking of). But that ALL depends on how Europoliticians act. So we cannot be sure about this.

  32. Fiver

    Wonder what the readers of NC think of this effort by the Fed to “listen in” and take a read on “sentiment” of key financial analysis bloggers’ sites and the sorts of comments provided. Saw this on Zerohedge:

    http://www.zerohedge.com/contributed/federal-reserve-plans-identify-%E2%80%9Ckey-bloggers%E2%80%9D-and-monitor-billions-conversations-about-f

    I do not believe there’s anything good that can come out of this. I rather suspect they’re trying to gauge how much real, informed, anger there is extant and what sort of organized campaign they will need to cripple any nascent resistance.

  33. robert in london

    One thing that struck me about this interview was it occurred on a day when the markets absolutely soared, especially after the release of the interview. It would not surprise me that a bunch of trader neophytes, lacking the requisite sociopathic strain of DNA and looking for an excuse to enter the ‘thrilling’ world of the short side, jumped on the bandwagon after listening to this guy, only to have their knees cut off. Not that I disagree with most of what he says but timing is everything and unless you are highly self disciplined and marching to your own little drummer (ie doing your own diligence, eschewing leverage and the siren song of the msm and remaining circumspect in the deployment of ‘risk’ capital) you are likely to get your buttocks seriously mauled in this casino. Human nature being what it is I would venture that most people would be better served having their money (living expenses) in a tin can or mattress for the next few years. Unfortunately they will refuse to consider the merits of such a simple strategy until traders like our briefly famous friend have ‘disappeared’ all their savings. Come on. The man is practically giving us a map of what he and his cohorts are planning to do to our ‘investments’ given half a chance. If we are not smart enough to adapt or get out of the way then we have no excuses for the consequences.

  34. kevin

    This guy did not offer any reasonable argumentation or informed insight for his views. Because he doesn’t have any. He’s a nobody. To use a sports analogy he’s the know it all second guessing the pros from the cheap seats. His 15 minutes are up.

  35. Philip Pilkington

    People are now saying that this is a fake. What a load of BS. He did an interview here and clearly knows the markets very well:

    http://www.forbes.com/sites/emilylambert/2011/09/27/trader-or-prankster-we-called-alessio-rastani-and-asked/

    He also made the following comment which I thought quite apt:

    FORBES: What do you think of the attention you’ve received since going on TV?

    AR: I think it’s overblown. I have no idea why I’m getting this attention. I don’t think it was news. For someone to say what I said, I thought everybody already knew this kind of stuff. The big players of funds rule the world, I don’t think that was news. And what I said about making money from a crash, obviously not everybody knows about that, you can make money from a downward market. A lot of people just got the wrong end of the foot, misunderstood what I was saying. They thought I was joyful or licking my lips about the idea of making money from people’s miseries. That’s probably the way it looked on the video. But if they watch the whole video, what I was really trying to say is people need to educate themselves about how to do that… what I was trying to say was, look, everyone should basically prepare. I was trying to be the good guy. If this market’s going to crash, then you’ve got to prepare yourself. You’ve got to basically learn how to make money from this. Otherwise you’ll be like I did 10 years ago … I made some huge mistakes 10 years ago, during the dotcom crash. I realized it was a falling knife. I was trying to say look guys, it’s not just for traders, it’s for everyone. They should ask me how to do it, I will help you.

    1. Franz

      Fake or not, truer words were never spoken. The casinos march to the drum of insiders. It is pure manipulation and fraud that drives them. World governments are subservient to finance banks. We are all mere serfs. Sorry, but the news is all bad for the peasants.

    2. kevin

      Some of his trader friends are millionaires! Wow. I’m impressed.

      Seriously, the guy does not know a lot about markets although he think does. Nothing in the Forbes interview offers any real insight into why markets are going to develop as he suggests. All he offers is what ‘big money’ is doing. I guarantee you that from his perch, at home in south London, trading Dow futures, he has no idea what big money is thinking. He is guessing from what he reads….

      He’s a nobody.

      1. Philip Pilkington

        He did go into specifics about trading. He talked about how he prefers to follow trends and uses hedging stratagies — he says that he got burned in the DotCom boom and that changed the way he played.

        He also goes into specifics: he says to by dollars and t-bills. Why? Because they’re safe investments. There really isn’t anything else to it beyond that simple fact. They’re safe assets and highly liquid. No more analysis necessary.

        I think he knows exactly what he’s talking about and what he’s doing. He might be a bit tactless, but that’s all. So many in the markets are going to ride this crash out. It’s a tragedy. And when people hear the truth they run and hide — saying that he’s a Yes Man plant or some sort of ignoramus.

          1. Philip Pilkington

            Okay, barring: US treasuries are backed by the US government and they print dollars what do you want?

            Do you have any analysis of your own or are you just posturing?

          2. kevin

            Look, the question is not about whether dollars and T-bills are safe. The issue is this guy got public with some aggressive views on where the market is going and he offered no evidence to support those views other than ‘big money’ wants it to go down. For such an aggressive view as his, and in so public a forum as the BBC, he should been much more analytical than this ridiculous interview. And as I said before – he really has no idea what ‘big money’ thinks.

            I don’t think he’s a Yes Man, or a fraud. I believe he is just a very small time trader who sits at home and tries his best to make money. He should never have been given such a high profile interview.

            BTW, I wouldn’t let him teach anyone I know about the markets.

          3. Philip Pilkington

            Okay, Kevin. What he’s saying isn’t backed by ‘success’ or ‘market cred’ so it must be rubbish. You follow your heroes. Like a lemming off a cliff. We’ll see where it goes.

            Some portfolio choices for you — high risk, so high yield… and in your panglossian optimism we know these will fly:

            (1) Student loans
            (2) Low-rate mortgages
            (3) Stock markets
            (4) Gold
            (5) Gold
            (6) Stock markets
            (7) European government bonds
            (8) Stock markets
            (9) Gold

            Don’t forget to put your ALL your money in. In fact, sell ALL your assets and put that in too. After all, it’s what all the cool kids are doing. Have fun.

  36. Heron

    Goldman-Sachs rules the world? Tell that to the guys with the guns, Mr. Trader.

    I’m no advocate for seizing wealth by force, but sometimes the arrogance of these gnomes can be quite tempting.

  37. Rich

    Booking mistake is right. They don’t often happen on the BBC which is normally brilliant at picking and choosing people to present their extreme left wing big government more Europe message. They don’t even bother at making a pretense of trying to be even handed anymore. Occasionally they will let somebody ‘off message’ on, for ‘balance’, and they tip you off in advance he/she is there for comic effect, by introducing them as ‘right-wing’. They’ll then be cut and edited to make them look like a swivel eyed loony. BBC is a joke and only the supine British who never really got out of the serf mentality of the middle ages, could convince themselves that 150 pounds a year TV tax to fund it is fair.

  38. bsmi021

    This should be a wakeup call for many people, and he is correct there are people who make out like bandits when the markets crash, and also he is correct the not just golden but Wall Street run things

  39. Joe J.

    Am I seeing something that isn’t there? Seems like the markets have been slowly gaining ground until the Dow gets to around 11,600 and then someone says”GREECE” and the market collapses. The market drops about 800 points and the cycle starts over.

    Seems like it has been too predictable of late.

  40. JohnB

    In a true economic transaction between a buyer and seller, is where both come out ahead (a win/win transaction).
    A win/lose transaction, i.e. where one party can only gain at the expense of the other is out right looting, flat out wrong and not sustainable.

  41. Praedor

    ambrit:
    I’ve read that one Neutron Warhead Airburst high above the plains of Nebraska can cripple Americas communications networks. Anyone have info on that?

    Not a neutron bomb. That is more complex than is necessary. All it takes is a plain ole atomic bomb of the Hiroshima/Nagasaki variety. Hydrogen bombs don’t do it anywhere near as well as a plain, simple atomic bomb.

    It wouldn’t even take a very big one at that. A couple kiloton detonated at an altitude of 80 miles (50 to 100 miles optimal). Poof! Every computer, every microelectronic device (including any running, unsheltered vehicle in the air or on the roads with computers and microelectronics on them) go kaput. Immediately.

    Not a single person would die on the surface (immediately) and you wouldn’t even necessarily know a nuke went off (bright light/second sun for a few seconds high in the sky would be something of a giveaway but you may not notice it). Well, I take that back. Anyone on an operating table at the moment of detonation has a high likelihood of croaking. Anyone on life support equipment would go immediately. Other than that, no fallout, no heatflash, no fires, no shockwave. Just flash, poof! No more TV, cellphones, laptops, PCs, tablets, no more electrical grid, etc.

    Just a plain ole atomic bomb that anyone can build these days (technically speaking – if you have the plutonium or enriched uranium). Easy-peasy. Some crude old scud missile or similar, don’t aim at anything in particular – just 50-100 miles into the sky somewhere over Kansas, Nebraska, Ohio is good enough.

    1. chris

      Fortunately, military spending can concentrate on duplicating that effect with out the fission-fusion of uranium/plutonium. High energy electro-magnetic disturbances to mimic solar flares would be even less noticed than a standard WTF airburst.

      1. Barbyrah

        Thanks for being courageouos enough to note. The good news: Even mild-mannered Wikipedia now has a page devoted to acknowledging some of these devices, as well as HERF (High Energy Radio Frequency) or HPRF (High Power Radio Freqency) weapons, instruments that can completely “take out” electronics systems while going virtually undetected via the use of high-intensity radio waves.

        (Which kind of makes you think about some of our small plane “accidents” carrying prominent people – which found front electronic control panels completely burned out. FFI: the Wellstone plane, thought it appears more likely it was an electromagnetic, not a radio wave, frequency weapon that may have brought it down – EMP device. Reason? Numbers of unusual electromagnetic happenings with cell phones and garage doors in the area, and loss of all communications abilities at same time loss of control of the plane. And sticking-out-like-a-sore-thumb stuff: There was intense fire involved, so much so that the bodies were charred beyond recognition. Yet the wings of the plane, where fuselage was stored, had separated and went pretty much unscathed. So what caused such intense fire if it wasn’t the fuel? (Interesting to note, one of the NTSB board members, Richard Healing, admitted the final report conclusions were “…quite speculative.” “Pilot error” which they couldn’t verify, explain, logically justify in any way. But heck, if the NTSB says it, then it must be true, right?!)

  42. Barbyrah

    “Rastani is the bland, reasonable face of predatory capitalism.”

    Predatory capitalism.

    (Uhh..is there any other kind?!)

    Most important point distilled into this one simple sentence. Only thing I’d change…put reasonable in quotation marks:

    Rastani is the bland, “reasonable” face of predatory capitalism.

  43. Steve Roberts

    I don’t think he’s talking about the end of society, he’s talking about returning to market norms. If your portfolio is invested in stocks that don’t make quality profits and buy back shares instead of paying dividends, you are going to be in for a rude awakening. Pure and simple.

    Invest the bulk of your assets in HIGH QUALITY muni bonds, high quality dividend paying stocks and eliminate your debt ASAP. This was the norm for investors for decades upon decades but since the 1980’s it’s been the underperformer that invested this way.

  44. Hugh

    The Dow is up 500 points in two days. You might think this invalidates Rastani’s comments. But ask yourself why did markets nosedive last week. Why are they shooting up this week? Do stable markets react this way?

    We have been treated to the umpteenth promise of a European “plan”. At some point, markets are going to realize that A) this plan isn’t happening now, B) that unless these CDOs are sold to the ECB this is a swap, not new money creation, C) none of the underlying problems: the euro, banks, trade, and debt are resolved. Then we will see another reversal.

  45. Diogenes

    The Washington Post is running this story about the Rastani interview here:

    http://www.washingtonpost.com/blogs/blogpost/post/alessio-rastani-trader–or-prankster–tells-bbc-market-is-toast-video/2011/09/27/gIQAAber1K_blog.html

    What I found most fascinating was the breaking revelation that Dow Jones was apparently responsible for the 1984 Bhopal disaster:

    “Still others questioned if the whole thing was a masterful prank. Forbes contacted Rastani, who stood by his claim of being an independent trader, but writer Emily Lambert pointed to another BBC interview in 2007 in which a so-called representative from Dow Jones admitted to the Bhopal disaster in India. The representative, who went by the name Jude Finisterra, turned out to be a member of the Yes Men, a group of pranksters that target corporations. Finisterra bears a strong resemblance to Rastani.

    “The Yes Men denied Rastani had any connection to their group, putting out a statement that he was, in fact, a trader. “He’s a real trader who is, for one reason or another, being more honest than usual,” a Yes Men leader who goes by the name of Andy Bichlbaum writes. “Who in big banking doesn’t bet against the interests of the poor and find themselves massively recompensed—if not by the market, then by humongous taxpayer bailouts?” The statement also encouraged people to come to the protests taking place on Wall Street.

    “Andy Bichlbaum is most likely the man who portrayed the Dow Jones representative and appears in photographs older than Rastani, though they do bear a resemblance.”

    1. craazyman

      ha ha.

      there’s something about that dude that didn’t seem quite right to me. It was too loose and confessional.

      I’ll bet 25 cents it was a prank and he really is a trader — a day trader, every once in a while — between pranks.

      If I lose, I’ll put an extra 25 cent in the tip jar where I get my morning oatmeal. If I win, I’ll put an extra 25 cents into GLD. LOL.

      anywaze, other than the comment about “dreaming about” the collapse for years, what he said wasn’t any different than what you see here at NC. I kind of liked the guy, but I don’t dream about the collapse of the euro zone. Usually I can’t even describe them, to myself even.

      1. Diogenes

        Craazyman– You should check out Rastani’s website here before you make your wager:

        http://www.leadingtrader.com/

        I finally got it to load after about a half an hour of trying. If this guy’s interview was a fake, it’s one heckuva an elaborate ruse.

        1. craazyman

          I knew there was a chance I might lose, so I figured the tip jar is a good cause and 25 cents won’t hurt too much. :)

          This is the kind of luck I’m having lately day trading, but at least I go in with very shallow stop losses.

        2. craazyman

          Not so fast Diogenes, looks like the pendulum is swinging my way. But forgive me if don’t put 25 cents into GLD, just nibbled today and got stopped out with a loss that was several thousand times that. Oh well.

          you have to start channeling these things and it all becomes clear. If you fool yourself trying to reason through it, you just go in coykulls.

          I had the same feeling when the Big Zero was running in 2008. I was thinking to myself, this guy is slicker than a sheet of ice on a steep street. Whatever. Who cares what I think. ha ha.

    2. Maju

      They are NOT the same person. Not just Bichlbaum/Finisterra is quite older, he also has different cranial structure above the eyes and an overall broader face, something I believe that no cosmetic surgery can alter.

      However he could be an apprentice. I could confirm that the surname Rastani is real (in Italy: at Siracuse and Rome). He looks reasonably Italian-looking to me in fact (reminds me quite a bit of a Castile-rooted cousin and his father but Italian fits well with his looks as well).

      1. Diogenes

        Maju… I certainly agree that Rastani and Finisterra are not the same person. According to part of the text from the New York Times Lede:

        http://thelede.blogs.nytimes.com/2011/09/27/a-traders-truth-or-a-prank/#more-132397

        he is of Italian and Iranian heritage:

        It appears that Mr. Rastani considers himself a trader, whether or not that description is technically accurate. A June 2010 segment on France 24 described Mr. Rastani as “a London stock market trader of Italo-Iranian origin.”

        Googling the name Rastani provides pretty good evidence that is an Iranian surname.

  46. bobh

    I’m a big Yes Men fan and this is not the same guy who did the earlier BBC/Union Carbide spoof. If this is a Yes Men-type action–and I suspect it isn’t– it is amazingly well done. He is a little shy, a little nervous, a little cynical and a little idealistic. He isn’t working from a script. If he is faking it, He is an amaazing performer. He starts out holding back, until the BBC lady interrupts and asks him what he would say to make people “happy” about the economic problems he has alluded to it. He seems a little flustered by this bizarre question and starts blurting out his thoughts, saying pretty much “No,No..I’m saying it’s really bad. Insiders are betting on a crash, medium term, and you have to know how to play this to make money.” He seems like he is over his head, nervous about being on tv, someone who just hasn’t thought much about creating an acceptable persona to get invited back for more talking head appearances. The Goldman Sachs line just sort of bubbles out of him as an afterthought, trying to explain how things work. If this is a performance, it is brilliant.

    1. bobh

      And let me add that it is just like the Yes Men to use access to media because of a misunderstanding about something they didn’t do to plug the Wall Street protests.

  47. RA

    His appearing on BBC gives everyone the impression that he is someone of legitimacy. From look at his blog, it is clear he is nothing more than your average Zero Hedge commenter. He knows a lot about the markets but has no valuable insight. He is no Hugh Hendry or Kyle Bass. He’s just an average Joe day trading.

    Once you realize that, all of his comments make perfect sense.

    The question is how the heck did he get on BBC?

    1. Philip Pilkington

      Doubt he’s ZeroHedge. He tells people to buy dollars and t-bills. ZeroHedge folks are generally hyperinflationists.

      It must be reemphasised again and again: this guy’s investment strategies are sound. He may be tactless but he’s NOT a crank. A great many people in the markets think exactly what he thinks. They just wouldn’t say it on TV.

      1. RA

        He has a little bit of a different strategy perhaps. I’ve got sound investment strategies. But I shouldn’t be interviewed on BBC. That should be someone that at least has something to hang their hat on.

        People think this guy has some insights into the financial world. He’s just a guy.

        1. Philip Pilkington

          So? They interview Jim Rodgers on Reuters and he’s borderline senile. Now, that’s farcical.

          http://www.youtube.com/watch?v=MT1wCZVDSy8

          Plenty of people in the markets are idiots; having a position of authority doesn’t change that. Trusting in brands is for sheep who can’t think for themselves about the weight of the argument and need recognised brands to believe anything.. If you want to follow the herd that’s your prerogative, but it will get you in trouble eventually.

          1. RA

            Jim Rogers has at least made a several fortunes in his life and worked for George Soros. He has made accurate calls that can be verified.

            This guy literally had an Andy Warhol moment. He is a nobody that has been portrayed as a somebody.

          2. kevin

            Hey RA – amen to that! The guy offers no argument for his views other than that ‘big money’ wants the market to go down. That’s it. There is no way a small time trader like this guy, sitting at home in south London, has any idea what big money thinks. The number of people commenting here who give this guy any credibility is mind boggling.

          3. Philip Pilkington

            I just want to highlight this for anyone who made the mistake of thinking that market practitioners are in any way competent:

            “Jim Rogers has at least made a several fortunes in his life and worked for George Soros.”

            Just think about that for a moment. There’s NO analysis of Rodger’s trades. There’s no thought behind why he got it right (because he copied Soros?). There’s no thought here. Just herd mentality pure and simple. Like someone buying a brand name and thinking that makes them instantly cool.

            THIS is how the markets operate. These are the cabbage-heads who operate in the markets. It’s like herding sheep. A few key players — the sheep-dog — choose the direction and the rest follow blindly. If the sheep-dogs are wrong — which they often are — they all end up falling off a cliff.

            Remember this when you read about rational markets or efficient markets or anything else. These people are generally clones. Keynes recognised it. But few remember. But they ARE clones. Be very careful…

          4. Maju

            That’s so true, Philip!

            When I grow up I also want to be like George Soros and dive into a pool of solid gold like Scrooge McDuck! XD

          5. RA

            Actually, it’s pure nonsense. The CBS Evening News should not be interviewing the first guy that walks out of a Charles Schwab office as an “independent trader” giving the world the impression that they know what they are talking about whether they do or not.

            I don’t think even Yves Smith or Reggie Middleton could get interviewed on BBC and give their points of view. For this guy to get on is amazing.

            I’m all for Wall Street being exposed. But if a “Wall Street trader” is going to expose the world to its views, it shouldn’t be a Main Street trader doing it. This guy couldn’t get on Max Keiser.

            Strangely enough, you seem to be buffaloed by the fact that he appeared on BBC and are giving him legitimacy as a result. I guess that shows the power of suggestion. Welcome to the idiot masses.

  48. Rik Knox

    no one ever said life is fair
    all good traders live to make money. It is a serious ‘game’ the requires guts & intelligence. Smart traders always live to trade. Unskilled & overly greedy speculators get creamed. For the little guy – there are ways to profit in days of gloom. One can short stocks – risky / on can buy index puts – your risk is limited to the cost of the puts. A BIG crash will come – I’m absolutely SURE – but – I don’t know when – My best guess is sometime within the next 2 years at the latest. There are way too many insolvent banks / there is a HUGE book of derivatives out there / huge unpayable govt & private debt as well – GUESS where all this is going ” “Nuff said”

  49. Eric

    Why get upset about this guy’s attitude? He is going to have no impact at all on the resolution – good or terrible – of the debt problems in Europe. He just believes it is going to be terrible and sees it as an opportunity to make trading profits. And it likely will be.

  50. Schofield

    Alessio Rastani ever the optimistic predator may have encountered more than he bargained for in the dim-wit Neo-Liberal Austerity Hawks hell bent on hurling their national economies into a Deflationary Death Spiral. Here’s Fred Decker on the effects of deflation where declining wages still mean your loans have to be paid in the number of dollars the loan was for not the actual current deflated, or real, value of the dollars:-

    http://www.modernmt.net/2011/09/14/deficit-and-deceit/

  51. markincorsicana

    This guy,if he is not a hack paid to assist in taking the market down, would be a flaming tree hugging liberal in texas. The evilgelical überassholes with whom I work would never warn the hoi polloi to take cover from the coming crash, admit that the upper 1% will make money either way, or suggest ways that the common folk might also profit from the fire sale (although to think that Joe Sixpack can gamble his retirement money on shorting stocks profitably is naive). A true Master of the Universe feels appointed by G-D to rule and so has no need to consider those whom G-D did not consider worthy to grace with money and power.
    Éirígí

  52. mr ugly

    The guy’s got real journos on his case now:

    http://www.telegraph.co.uk/finance/economics/8792829/BBC-financial-expert-Alessio-Rastani-Im-an-attention-seeker-not-a-trader.html

    He lives in a modest house, owned by his other half, in an unfashionable outer London suburb. By his own confession, he’s an attention seeker, more of a talker than a trader. I took Yves to task earlier for her amusement at the interviewer, but it seems she’s probably correct in diagnosing a minor glitch in the BBC’s interviewee booking dept.

  53. Ray Elliott

    The accident of picking Alessio Rastani for a “trader’s viewpoint”, was in some ways a miracle. Normally we would be listening to the “stay the course”, or bail out now line. With Alessio, we are hearing the narrow viewpoint of someone that is on the trading floor, persuing what he has been lead to believe, is happening.

    He is right that the system is collapsing. He is wrong in that he is suggesting that some alternative paper (bonds) are a haven from the destruction that he is predicting. Why should bonds survive when the U.S. dollar will not survive? Alessio is focused on the near term objective, make money and then cash out. He doesn’t speak of how a cashout occurs. When the dollar is (in his words) toast, bonds will also be toast.

    A calamity is coming. Food, shelter and clothing will be of more importance than in our grandparent’s time. Your 401K will be toast. Your social security will be toast. Your savings will be toast. Your gold and silver will be your survival.

    My advice, is to get out of any high population area. Move to a rural setting. Learn to plant vegetables. Keep weapons close for protection.

    Alessio and his friends will be coming to your place, hoping that you will help him to survive.

    You may have to shoot him.

    1. Maju

      Hopefully you are a bit hyper-apocalyptic (i.e. rationing and central planning can replace money, there’s not enough wildland for even a small fraction of all people and it’s needed to fence off the ecological disaster, etc.) but in the general outline I think you are right: why would the dollar or US treasuries survive if the euro collapses (or why would the fall of the euro be bad news: I’ve been advocating for a devaluation for some time) or does GS expect to rule the World without the USA or EU? He’s not seeing the whole picture; he’s trapped in his ideas that a speculator can survive in the midst of total chaos, even when property titles and money collapses, even when the Empire itself collapses.

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