Voices from the Wilderness

As a follow up to yesterday's post, I thought I would share some brief quotes from a few of the blogs I read each morning, the voices crying from the wilderness out there in a gallant effort to present a real picture of what is happening. Here are minds that "get it" and say it well. Consider as you read this commentary how different it is from anything you will hear tonight on TV news...

Looking at how we got here, Jeff Nielson of Seeking Alpha comments:

"To be sure, there are many other contributing factors. Excessively low U.S. interest rates, the abolition of lending standards, and the abolition of regulation were also horrible mistakes. However, since all three of those previous mistakes were undertaken through orders from Wall Street, the real cause of the current, U.S. housing catastrophe was Wall Street's scheme to fleece the world out of trillions of dollars through marketing “toxic” mortgage products, and Ponzi-scheme derivatives – based upon the U.S. housing bubble."

My Budget 360 noted the strange disconnect between Wall Street and Main Street realities:

"It is a site to behold that the stock market is rallying since the March 2009 low even though we have officially lost an additional 2,700,000+ jobs since that time. That is right, the system is so upside down right now that somehow nearly 3 million jobs lost is worthy of a nearly 70 percent rally in the S&P 500. I sit back and can only watch amazed as the stock market is converted into a full-fledge casino for the corporatocracy while the real economy is still hemorrhaging from multiple financial wounds. We have lost over 7.2 million jobs officially (8 million once the February revision is put in) and yet the market keeps moving up. Why? Because the banking system is using every ill gotten penny to gamble in futures, derivatives, and every other financially toxic product while the average American continues to bailout their gambling ways."

Michael Panzner of Financial Armageddon weighed in on the debate about the efficacy of the so called "Recovery."

"For months now, there's been considerable debate about whether the U.S. economy is on the road to recovery. Bulls point to the massive monetary and fiscal stimulus that's been pumped into the economy, the sharp rebound in share prices, and the relative improvement in certain indicators as a reason for optimism. Bears -- like me -- note the persistent negative sentiment on Main Street and in many corporate boardrooms, the steady increase in foreclosures, personal bankruptcies, and the ranks of the long-term unemployed, and the numerous imbalances -- including still-very-high levels of public and private debt -- that remain unresolved. So who's right? ...One way to get a sense of where things stand is to look at how things are playing out relative to the past. On that basis, the notion that the economy is back on track leaves a lot to be desired."

To illustrate his point he published 7 excellent charts showing that current employment, retail sales, housing starts, industrial production, durable good orders, consumer credit outstanding, and the relative value of the S&P 500 are all tracking well below every other recession since WWII. To view the charts click here.

Speculating on the future direction of oil and energy prices, The Business Insider suggested big money traders were getting ready for a spike:

"The total net long positions by large speculators showed record bets on energy prices. Crude prices have risen 17% over the last month and over 100% in the last year as big money has poured into oil as the dollar has weakened and the global economy has strengthened. Unlike small speculators, who lack the firepower to move prices and have generally been on the wrong side of trades the large speculators tend to be the market movers. This latest data shows a continued allocation into energy by large hedge funds and institutional traders." Link here

Jim Quinn's take on the market rally in his Daily Dose of Reality:

""I truly believe that back in March 2009 at the market lows, the Federal Reserve, the Treasury, and the criminal mega banks met and decided they were going to create a recovery by manipulating the stock market. The government gave these banks $700 billion of TARP funds and the Federal Reserve loaned them money at 0% and told them to have their traders buy the market. The mega-banks did so with gusto. All of the profits generated from these banks have come strictly from trading stocks. They will now take home hundreds of millions in bonuses for doing the bidding of the Federal Reserve with no risk of losing. They are losing money out the yazoo from mortgage lending, credit cards, and commercial lending. They have been able to generate a stock market rally of 60% using free money. The banks then issued hundreds of billions in new stock in order to improve their insolvent balance sheets. Who were the buyers of this new stock? It was the financial institutions who were told to buy it by the Federal Reserve using free money. Do you get it? This is a gigantic ponzi scheme fraud."

Chris Martenson commented on the absurdity of the Fed announcing its "earnings" of $45 billion last year:

"First of all, the word 'earnings' implies that value was created and/or something was at risk. Neither applies to the Fed. Let's review the process by which they 'earned' money in 2009. We'll simplify this by examining just one of their activities, the purchase of Treasury debt.

Step 1: Using keystrokes, create $300 billion out of thin air.
Step 2: Buy Treasury notes and bonds with the $300 billion.
Step 3: Collect interest from the US government on those notes and bonds.
Step 4: Report record 'earnings.'
Step 5: Wash, rinse, repeat.

What is the meaning of 'earnings' in that series of steps? What value was created? Where was the risk? In this context the word 'earnings' has no meaning or any relevance at all. It's the exact same thing as if the Fed had printed $49 billion dollars put them on the income statement and called them 'earnings.'"

And MISH Shedlock had these questions about the supposed Fed profits:

"Does that count the $185 billion the NY Fed crammed down taxpayers throats over AIG?
Does that count the real cost of any of its other inane off-balance-sheet recommendations approved by Congress at taxpayer expense? Does that include a marked-to-market accounting of Mortgage Backed Securities on its balance sheet?"

Karl Denninger noted that in spite of the cheery news about recovery, only 9% of Americans now think the economy is improving:

"Consumer confidence this week sustained one of its steepest one-week drops in the last quarter century, (-47) following last week's troubling jobs report with an all-hands retreat from what had been a tentative positive trend in consumer attitudes. There's no good news embedded in here. Personal finances and the buying climate dropped by amounts matching their largest one-week change ever, possibly spurred by people getting their credit-card statements from Christmas (or simply reflecting on what they spent - and determining it was too much. Only nine percent rate the economy positively."

See how the mysterious world of high finance goes merrily on with its $23.7 trillion dollar heist while a handful of bloggers consistently expose the fallacy of everything they do and say?

You want to know what's really going on? Read the blogs.