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TheNewPonzi

Listed below are comments made by TheNewPonzi between Wednesday, 2nd September 2009 and Friday, 27th November 2009.

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Dubai: Just a sideshow? 2:12pm on 27 Nov 2009 Update - the size of Dubai's default and the exposure of western banks is likely to be significantly higher than the published figure, due to substantial and undisclosed 'off-balance-sheet' positions held by Dubai finance (Bloomberg).
Dubai: Just a sideshow? 1:51pm on 27 Nov 2009 An optimistic interpretation Stephanie. In reality Dubai World is the tip of a very substantial and nasty iceberg in the waters ahead of the good ship SS Recovery (aka Titanic). The basic premise underlying 'the recovery' was that developed western economies would be rescued by the seemingly infinite growth capacities of emergent markets. But what the Dubai model demonstrates is that these markets are in fact very fragile; many are on the edge crisis themselves. The banking bailouts last year, and the continuing bank bail-outs through QE (that is in pratice what QE is all about), have not solved the problem. The same institutions (and others) will be back for more. The question will then be how will western voters and taxpayers react to being squeezed for more and more cash with no decernible improvement to their own situations?
Three-way on the MPC 3:27pm on 20 Nov 2009 Don't worry, our glorious leader is to make a law to cut the budget deficit in half! Pheeww, saved! Imprisonment will be the penalty for breaking this new iron law of UK ecomomics. Hey! you lot at the back of the class . . . STOP LAUGHING.
An Afghan Exit Strategy 2:19pm on 20 Nov 2009 The end-game for this whole affair should be clear by now - we declare success and withdraw as soon as practical. This must now be clear to the dullest and most slavish believer in US & UK public relations spin. The comparisons with Vietnam become more apposite by the day:

Afghanization = Vietnamization (same result inevitable)

War On Terror Domino Theory = South-East Asia Domino Theory

The extention of the bombing campaign into Cambodia is mirrored by the extention of the Afghan bombing campaign into Pakistan, and probably will have similar consequences for Pakistan as for Cambodia. Does anyone REALLY believe 'the west' has a realistic strategy in Afghanistan?

Remember the famous scenes of panic as US helicopters were pushed into the ocean from carriers as soon as they arrived from Saigon. What will be the Afghan equivalent? Probably the much talked-about new helicopters breaking-down and being abandoned in the desert to rust with the Soviet ironmongery already there - a 'glorious' end to the British Empire's 4th Afghan War!
Bank reform: The radical way 2:13pm on 21 Oct 2009 WOTW is correct, like it or not.

The banks have triumphed in their one-sided and brief tussle with the politicians/regulators. They have stared-down the opposition and now know for sure they can get away with just about ANYTHING.

A gambler will NEVER stop gambling until all sources of money available have been exhausted. The western banks and finanial institutions have run-out of their own money to gamble with, and now have taxpayers money to squander on spread bets and swaps etc. They will never voluntarily accept the seperation of retail and investment banking, as that would limit their bets and bonuses. An addict will tell any lie and lobby anyone in order to obtain relief and continue a 'lifestyle'.

Ordinary folk will have to hunker down and prepare as best they can for the coming storm. Also, never accept what the apologists say about us having to make 'sacrifices' through tax rises and cuts etc., on the say so and for the benefit of ponzi-bankers and the criminally irresponsibe gamblers who brought down this situation upon us in the first place.
A sombre warning 12:27pm on 21 Oct 2009 The situation for the US, UK & to some extent other western economies:

". . . a major contributing factor to Japan’s 10-year “Heisei Malaise” was the prevalence of “zombie finance”, where Japanese banks continued to provide support for highly inefficient, debt-ridden companies, commonly referred as zombie companies, and the government effectively allowed the banks to simply ignore their festering bad loans with lax accounting practices, including the absence of mark-to-market. Zombie financing in turn prevented the creative destruction necessary to clear the dead wood from various industries and prevented more productive companies from gaining market share."

Banks like RBS, Lloyds, Citi & BofA are replicating the Japanese experience. Real western economies will suffer the same fate as did Japan's in the 90s. These banking zombies MUST be broken-up before they bust the whole system.
Lloyds: compensating taxpayers 2:42pm on 14 Oct 2009 Lloyds & RBS are the UK's top zombie banks. Now Lloyds tries to bring itself back to life, back from the dead, but it can't. $1.6 trillion in undeclared losses remain concealed off-balance-sheet by western banks. These institutions (including zombie companies like Vauxhall), live on by consuming taxpayers money. Once fiscal stimuli and QE wind-down they will be back were they started - INSOLVENT.
No Depression = no 30s-style revolution in ideas. Discuss. 11:44am on 18 Sep 2009 # 27 - yes, it certainly is a huge tranfer of wealth from the 'poor' to the rich. Lending to businesses and the real economy has not risen since the bank bail-outs. The real purpose of QE becomes increasingly clear as time passes: its another bank bail-out in disguise. Taxpayers money and guarantees, accounting changes to bolster toxic loans and off balance sheet poison, and all the rest of it has only led to colossal public sector debt in 'the west'.

Casino banks have blackmailed certain western governments into giving them access to taxpayers cash. The lending that was meant to be the quid pro quo for this has not materialized, but with banks now effectively running the UK and US they are unlikely to be brought to account.

The French and Germans have quite rightly determined to exit this self delusory phase as soon as practicable. They should pay no attention whatsoever to Brown's empty bluster and bluff. He'll be out on his ear soon enough anyway.

The Anglo-Americans are in a real mess. Their public finances are shot and yet refuse to acknowledge that their days of world interference and warmongering are numbered. The Chinese now have an opportunity to disarm them in a way that the USSR never managed. All they need to do is ration their buying of US & UK debt and force cuts in defence budgets; we can already see this in the UK, with the future of the Trident replacement doubtful.

The response of the Anglo-Americans seems to be desperate denial that anything is amiss with their busted free-market ideology:

UK response to new world order: Buy Our Debt (please) - pathetic.
US response to new world order: Buy Our Debt (or else) - dangerous.
The Return of the Master 1:17pm on 02 Sep 2009 The current fashion for Keynes will only last as long as required by the spivs in order to theoretically justify the taxpayer bail-out of their jobs and bonuses. As soon as 'business as usual' returns he'll be thrown overboard in preparation for another securitized debt-binge.
Exceptional times 1:04pm on 02 Sep 2009 #28 - "A house is a home, not an investment vehicle" - not any more it aint. Securitization depends on house price inflation and Bernanke wants to restart that particular 'investment vehicle'.

"The UK will realise this when the BOE stops QE" - they cant stop it, the banks now depend on it for their very existance (and bonuses).

". . . and if we haven't decided to live within our means, then we'll start the whole thing again" - that IS the policy now being implemented and actively promoted by the cuerrent US and UK governments.

"It's like the whole western world is on crack or something..." drug addiction is actually a very good analogy for the current situation. QE is funny-money, politically supplied substitute crack to replace the wholesale crack no longer available.

New thinking is what is required not restarting the same old cycle of asset inflation and collapse - BOOM AND BUST - certain things have changer irrevocably however. The shift in economic power eastwards is only just beginning to be felt politically. The days over western hyper-consumption and hyper-debt are over, though the shape of things to come is not yet clear.

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