Archive for the Federal Reserve Category

Housing Collapsing Again.  And Then Again In 2029 (May 23, 2022)

Posted in Federal Reserve, Housing, Interest Rates on May 23, 2022 by e-commentary.org

.  .  .

K          “Not again.”

J          “Again.  And then again in 2029.”

.  .  .

K          “Today the interest rate drives about 86 percent of the decision to purchase a house; the Fed dictates interest rates.  The ‘Wealth Effect’ that arises when one’s paper worth rises substantially drives about 13 percent of the decision; the Fed has distorted and inflated the paper worth of assets to stratospheric and unsustainable levels.  The desire by a few astute characters to rebalance their net worth into real estate drives about 1 percent of the decision; the Fed has distorted the relative value of assets and confounded the balancing act.  Those three drivers are decelerating and will soon crash stupendously.”

J          “Carve out about 17 to 23 percent for those folks who were cooped up and want a bigger coop.  Buckets of ‘helicopter money’ were fluttering and floating around without a home in the hands of folks who want a bigger one.  At the Fed’s direction, interest rates are going up, one’s paper worth is going down, and housing may be too large a percentage of one’s net worth.  However, the value of one’s real estate holdings may remain proportionate because the value of one’s paper worth is also declining.  Someone who had a million dollars in assets and a million dollar home may end up with six hundred thousand dollars in assets and a six hundred thousand dollar home.  And be cured of the deceptive and deleterious ‘Wealth Effect’ that often drives one to be less wealthy in the intermediate run.”

.  .  .

K          “Again.”

J          “And again.”

.  .  .

[See the e-commentary at Housing:  Another Bubble Blown By Criminally Low Interest Rates (August 24, 2020) providing a treatise on housing, Housing Again (October 8, 2007) discussing the anatomy of a house, America the Bankrupt: Economics 210 in the Land of the Freeway and the Home of the Wave (January 17, 2005) discussing the “Hyperdive” decline in the economy that is percolating, When the Bubbles Burst (December 4, 2006) discussing the macroeconomic and microeconomic consequences of the housing market collapse when all tools and manipulations finally fail and The Dow Jones (the Murdoch ?) Hits 14 K In A Hollow Economy (July 23, 2007) discussing the decline in the stock market that has been successfully delayed for fifteen years but cannot be avoided forever.]

Bumper sticker of the week:

Again

The Great Checkmate And The Great Seesaw: Interesting Rates (April 11, 2022)

Posted in Federal Reserve, Great Checkmate, Inflation, Interest Rates, Recession, Stagflation on April 11, 2022 by e-commentary.org

. . .

K          “I doubt the Fed will be able to increase 150 basis points [1.5%] this year before the economic pain is so great that they will be forced to flood the market with free money for the wealthy and exacerbate the obscene wealth divide.”

J          “200 total basis points [2%].  I’ll go big.  I cannot see them raising rates to a total of 250 or even 225 basis points.  If they also start the ‘quantitative tightening’ at the same time, they will suffocate the markets.”

. . .

J          “Some say we will get ‘deflation’ and others say we will get ‘inflation’ without being specific.  We talked years ago about the deflation of bubble assets and the inflation of necessities that continues to get more distended and pronounced every day.”

K          “As I recall, last April we recognized that inflation was permanent and was not transitory.  The Fed did not shed the word ‘transitory’ until December.”

. . .

K          “The self-inflicted Great Checkmate is inescapable.  They say the bond market is about twice the value of the stock market.  They say the equity market is about fifty trillion dollars.  They say the gross domestic product of the United States is about twenty trillion dollars.  If the Fed raises the Federal Funds Rate to provide a reasonable return to bond holders and to attempt to throttle inflation, then the stock market will fall, the housing market will fold its tent, and the federal government will strain to pay the interest on the national debt.”

J          “The Great Checkmate is the Great Seesaw.  The economy is allowed to teeter and then the economy is allowed to totter.  The next year will be quite a roller coaster ride.  Let’s compare notes at the end of the year.”

. . .

[See the “The Coming Global Financial Revolution: Russia Is Following the American Playbook” in “The Web of Debt” dated April 5, 2022 by Ellen Brown, the recipient of the Third Annual Noble Prize In Eco-nomics (October 8, 2018); consider the discussion of some of the possible changes and consequences of World War E in “The commodity currency revolution” in “Goldmoney” dated April 7, 2022 by Alasdair Macleod.]

[See the e-commentary at Careening Toward A Global Totalitarian Authoritarian Behemoth?  And Then There Is The Fed’s Self-Inflicted Great Checkmate. (January 3, 2022), Third Annual Noble Prize In Eco-nomics (October 8, 2018), Economics And Finance:  Girls v. Boys (June 4, 2018) and Gas / Au / Ag / Cu: The Great Commodity / Currency Wars: What’s Up? What’s Down? What’s Really Up? What’s Going Down? (November 17, 2014).]

Bumper stickers of the week:

Dragon < Eagle > Bruin; Dragon + Bruin > Eagle; Eagle + Bruin > Dragon

Free Assange Journalism is not a crime

“The geopolitical war also distracts attention from the urgent agenda of climate change, especially in light of recent indicators of global warming causing climate experts to be further alarmed.  Other matter of global concern including migration, biodiversity, poverty and apartheid are being again relegated to the back burners of global policy challenge, while the sociopathic game of Armageddon Roulette is being played without taking species wellbeing and survival into account, continuing the lethal recklessness that began the day the bomb was dropped on Hiroshima more than 75 years ago.

In concluding, the question ‘why Ukraine?’ calls for answers.  The standard answer of reverse racism, moral hypocrisy, and Western narrative control is not wrong but significantly incomplete if it does not include the geopolitical war that, while not now directly responsible for Ukrainian suffering, is from other perspectives more dangerous and destructive than that awful traditional war.  This geopolitical war of ‘poor’ choice is now being waged mainly by means of hostile propaganda, but also weapons and supplies while not killing directly outside of Ukraine.

This second war, so rarely identified much less assessed, is irresponsibly menacing the wellbeing of tens of millions of civilians around the world while arms dealers, post-conflict construction companies, and civilian and uniformed militarists exult.  To be provocative, I would say that it is time for the peace movement to make sure that the US loses this geopolitical war!  To win it, even persisting with it, would constitute a grave ‘geopolitical crime.’”  Richard Falk

Careening Toward A Global Totalitarian Authoritarian Behemoth?  And Then There Is The Fed’s Self-Inflicted Great Checkmate (January 3, 2022)

Posted in Covid / Coronavirus, Federal Reserve, Vaccine on January 3, 2022 by e-commentary.org

. . .

K          “2021 was worse than 2020.  2022 will be worse than 2021.  2022 may be a year of consequence in the ‘Post-Consequence World’ that imposes no culpability on the culpable and no responsibility on the responsible.”

J          “Not this year.  The system will continue to trudge and trundle along.  No one will be held to account.  Everyone in power is making money fist over hand.”

. . .

K          “With inflation inflating, the Fed’s self-inflicted Great Checkmate cannot be deferred.  If the Fed were stalemated, they could sit tight, but they are in check at this time.  If the fools at the Fed had any sense of etiquette, they would resign before being publicly checkmated or at least be honest with the public.”

J          “The Fed is playing a simple-minded game of checkers in an economy that is not black and red.  They have the one overriding move that can be taken at any time and taken over and over and over again.  They are able to print unlimited dollars.”

. . .

K          “The transition from the Pandemic to the Endemic is a political and an economic challenge, not an epidemiological problem.  However, there is no money in the early treatment and prevention of the Big C-19, so it will not be treated and prevented.  That reality cannot change without much more public awareness and action.” 

J          “One word – Le Vaccine.  The Supremes will provide some guidance on Friday and in the coming week.”

. . .

[See the e-commentary at Twenty Sixteen (January 4, 2016)”.]

Bumper stickers of the week:

A pandemic of the vaccinated.

A pandemic of the unvaccinated.

Ailing, Failing, Wailing And Bailing (September 27, 2021)

Posted in Bail In, Bailout/Bribe, Cryptocurrency, Federal Reserve, Inflation on September 27, 2021 by e-commentary.org

. . .

K          “The financial and economic system is insolvent not just illiquid.  That will not endure.”

J          “They can and will continue to print their way down Primrose Lane and kick the debt can down the highway.  If any entity is ailing or failing, it can always start wailing and the Federal Reserve will start bailing.”

. . .

J          “We will know that Bitcoin has arrived when the government bails out the holders of Bitcoin.”

. . .    

K          “These things happen in October.”

J          “Not going to happen.  Perhaps next October.”

K          “You’re probably right.  Let’s compare notes.  On Halloween.  This year.”

. .  .

[See the e-commentary at “Is Inflation Inflating!?!? (April 26, 2021)”, “Covid-19 PanICdemic/Plague:  Basically, Back To Basics:  Finding Food; Printing Rutabagas.  Happy Earth Day! (April 20, 2020)”, “Covid-19: BAU v. BAU (February 24, 2020)”, “Twenty Sixteen (January 4, 2016)” and “They Can Print Money (November 2, 2015)”.]

Bumper sticker of the week:

A system that cannot go on forever will not go on forever

Is Inflation Inflating!?!? (April 26, 2021)

Posted in Deflation, Federal Reserve, Inflation, Interest Rates on April 26, 2021 by e-commentary.org

. . .

K          “‘Shadowstats’ by John Williams.”

J          “‘Chapwood Index’ by Ed Butowsky.”

. . .

K          “$8.99 two years ago, $13.99 one year ago and $22.77 one week ago.  If it is available.”

J          “$577 two years ago, $777 one year ago and $929 one week ago.  If it is available.”

. . .

K          “The inflation in what is generically referred to as ‘higher education’ must be analyzed over ten years.  Tuition is tied to increases in schooling loans. The federal government makes more money available at steep interest rates which triggers the universities to raise tuition and hire more superfluous administrators.”

J          “Housing prices are through the roof and only getting worse with the price of lumber and consumer durables rising.”

. . .    

K          “What happens when inflation undermines the real rates of return in the bond market and forces the Federal Reserve to consider raising interest rates?”

J          “Raising the interest rate increases the cost of paying off the national Debt.  Thus, the Fed must raise interest rates and must not raise interest rates.”

. . . 

[See the e-commentary on stealth inflation at “Back Door Inflation (July 16, 2007)”, the dubious numbers advanced by the government at “The Economic Numbers Game (May 5, 2008)”, the underpayment of public benefits based on false and distorted information at “Social (In)Security And The C.P.I. (May 29, 2017)”, the consequences of thwarted supply lines at Covid-19: BAU v. BAU (February 24, 2020) and a treatise on housing at “Housing:  Another Bubble Blown By Criminally Low Interest Rates (August 24, 2020)”.]

Bumper sticker of the week:

Whip Inflation When?  How?

Seeing 20/20 In 2021 (January 4, 2021)

Posted in Covid / Coronavirus, Federal Reserve, Vaccine, Wall Street on January 4, 2021 by e-commentary.org

. . .

K          “We did not see 20/20 in 2020.”

J          “We will see 2020 on steroids in 2021.”

. . .

J          “Despite some concerns, I am ready to take the plunge. They can plunge the needle into my body.”

K          “You know my concerns.  First they said there were no adequate, approved and available treatments which was not true because no available treatments were adequately tested let alone approved.  Second they said their concoctions diagnosed, prevented and treated the disease which is also unproven and unfounded speculation.  I am taking care of myself and thus taking care of the entire community.  I will obtain natural immunity without taking or taxing any public or private resources.  We are in this alone.  I am obliging and accommodating to the reality.”

. . .

K          “Over the last more than dozen years, the economic system has been illiquid with those in power responding by giving more free money / liquidity to the major connected players.  At this time, the system is close to insolvent which cannot be solved by giving away even more money to the major connected players.”

J          “We started the year with this conversation four years ago or so.  This year may be the year.  The problem is giving away money is all they know how to do.  They will continue to give away even more money and give away what is left of our future.  I still hope it is a happy new year.”

. . .

[See the e-commentary one year ago today at “Seeing 2020:  Federal Reserve Logic:  QE =/= QE.  Print, Lie, Print, Lie, Print, Lie.  The Great Financial Coup D’état Rages On. (January 6, 2020)” and four years ago at “Twenty Sixteen (January 4, 2016)” and a few mid-summer reflections and premonitions at “Venturing A Few Unfounded And Unwarranted Predictions (July 13, 2015)”.  “Back Door Inflation (July 16, 2007)” is back knocking at the door.  The coming and not at all paradoxical 1) deflation/drop in the price of “bubble baubles / faux assets” (i.e. ETFs and theme parks) and 2) inflation/rise in the price of “real assets” (i.e. grub and farm land) is discussed in “Stagflation?!?  Hands Down Or Hands Up? (January 14, 2019)”.  In response, “They Can Print Money (November 2, 2015)” and they do print money.]

Bumper stickers of the week:

2021 to 2020:  “Watch this.”

2022 to 2021:  “Hold my beer.”

Keep your stick on the ice

Seeing 2020:  Federal Reserve Logic:  QE =/= QE.  Print, Lie, Print, Lie, Print, Lie.  The Great Financial Coup D’état Rages On. (January 6, 2020)

Posted in Banks and Banking System, Federal Reserve, Interest Rates, Kleptocracy, Repurchase Agreement on January 6, 2020 by e-commentary.org

. . .

K          “A year ago, Federal Reserve Chairman Powell repudiated a noble but doomed experiment.  After he raised interest rates in an effort to reach a normal, rational and traditional level, he and many others realized that interest rates can never ever ever ever ever be raised again and must be reduced to zero or less than zero to avoid financial collapse.”

J          “On January 30, as I recall, Powell relented because the Federal Reserve realized that the economic and financial system was again on the edge of collapse.  On September 17, as I recall, when the Federal Reserve again recognized that collapse was immanent, it opened up the coffers via the overnight repurchase market and shoveled free money to the banks and hedge funds.  And the free money is still flowing freely.”

. . .

K          “The entire financial and the political system is built on a deep and abiding faith in and reliance upon distrust.  Everyone in the banking and hedge fund world possesses enough self-awareness to know that she and he are corrupt and dishonest to the core.  And everyone in the banking and hedge fund world knows that the others in the banking and hedge fund world are corrupt and dishonest to the core.  Perfect knowledge in a world of otherwise imperfect knowledge.  Profound and well-founded distrust undergirds all decisions.”

J          “Actions and behavior are predictable, if one seeks to predict actions and behavior.  No banker or hedge funder wants to lend to another banker or hedge funder because each if given half an opportunity will not pay the money back.  Thus, they simply steal the money that is given freely by the Federal Reserve.  And the free money is still flowing freely.”       

. . .

K          “Now going on a dozen years, the Great Financial Coup D’état rages on and on and on.”

J          “And on and on and on and on and on without public input or congressional approval or MSM comment.  And the free money is still flowing freely.”

. . .

J          “Print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print. print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, and then rinse and repeat.”

K          “And then lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie and then rinse and repeat.”

. . .

[See the incisive and insightful commentary in “Wall Street On Parade” researched and written by Pam Martens and Russ Martens; David B. Collum, the other Dave who provides a review of the events of the departing year, delivers his written “2019 Year in Review” in two parts and a podcast titled “Pandemonium” in his own inimitable way available at Peak Prosperity.]

[See the e-commentary at “Quantitative Easing = Money Printing (January 19, 2015)” published five years ago discussing the ongoing Quantitative Easing currently in overdrive and part of the Second Great Bank Bailout taking place without public input, congressional approval or MSM comment; “Coups d’état, Bail Outs And Bail Ins:  Clio’s Diary/Chronology.  Oh, And Happy Constitution Day! (September 17, 2018)” published on the ten year anniversary of the Great Financial Coup D’état; and “Twenty Sixteen (January 4, 2016)” published four years ago at the dawn of the year on the prospects for economic collapse in the near future.]

Bumper stickers of the week:

Print, baby, print

Lie, baby, lie

Not all debt is repaid, but all debt is paid

And the free money is still flowing freely

Does Any Institution In America Function? Oh, And Happy Friday The 13th! (December 9, 2019)

Posted in Academia, Banks and Banking System, Congress, Democrats, Federal Courts, Federal Reserve, Institutions, Jurisprudence Award, Kleptocracy, Law, Medicine, MIC, MICAC, Military, MSM, Noble Prize in Jurisprudence, Pushitzer, Pushitzer Prize In Commentary, Republicans, Supreme Court on December 9, 2019 by e-commentary.org

. . .

J          “I need one more day.”

. . .

K          “You don’t have to name three, just nominate one.”

J          “One institution after the other after the other after the other after the other after the other after the other has failed and continues to fail.  And that is even after lowering the standards to the point that the bar is on the floor.  One more day, I need.”

. . .

K          “The legal system at every level is a fraud and a racket.  We live in a country with many, many, many rules and many, many, many laws, but we do not live in a country that believes in or adheres to the rule of law.  There is no law, there is only ideology.”

J          “The medical and health care / sick careless system is a racket and a fraud.  I drive by the health insurance company skyscraper and reflect that not one person in the monolith has ever applied a band aid to a patient.  There is no care, there is only profitability.”

. . .

K          “The economic system is rigged at every step and turn to loot every last dollar from the people for the benefit of the Kleptocrats.  What is the end game for the expendable consumers who soon will have nothing left to bleed?”

J          “The MSM media is a wholly owned subsidiary of the Kleptocrats.  The message is tightly controlled by obedient droves of stenographers.  As a first step, everyone should skip ‘The Wall Street Journal’ and jump over to ‘Wall Street On Parade’ produced by Pam Martens and Russ Martens.”

K          “Academia is a substantially owned subsidiary of the Kleptocrats.  The message on the critical issues is also controlled and shaped by the corporate sponsors.  The campus buildings are all named for brigands; their kids and grandkids are admitted to skip the classes conducted in the namesake halls.  The hallowed halls are hollow holes.  The MIC is now expanded to include Congress and Academia in the MICAC.”

. . .

K          “Every agency from the Federal Aviation Administration (FAA) to the Federal Maritime Commission (FMC) – in the air and on the sea – is corrupt and incompetent.  Regulatory capture exists at just about every regulatory agency.”

J          “Furlough the ‘L’ out of the Bureau of Labor Statistics (B“L”S).  To determine the real rates of unemployment, a citizen must search in the shadows at “Shadow Government Statistics” prepared and analyzed by the dedicated and informed John Williams.”

K          “And then there is the Federal Reserve.  Probably no other institution, less one and perhaps two, has inflicted more grief and despair on the ordinary citizen with less publicity and notoriety than the Federal Reserve.”

J          “And related agencies such as the Securities And Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Federal Deposit Insurance Corporation (FDIC) are pernicious because they fool the citizen into believing that someone is watching out for him or her.”

K          “And the Department of Defense (DoD) exists primarily to spend money, drop bombs, and kill people but not to provide for the common defense.”

. . .

J          “The CIA and the FBI are a threat to every citizen at home and abroad and now may be affiliated with and advancing the interests of one political party.”

K          “The police in every burg and borough are paramilitary forces occupying the city and the county and the country.  Very few understand that the real Occupy movement in America grinds on.”

. . .

K          “Even many of the vaunted NGOs (Non-Governmental Organizations) surreptitiously serve the government’s interests.  The  Organisation for the Prohibition of Chemical Weapons (OPCW) is a front for the MICAC and shielded by the MSM that advances the propaganda.”

. . .

J          “Local EMTs and fire departments are generally contributing to the public good.”

. . .

J          “The National Credit Union Administration (NCUA) is a credit worthy institution administering its duties dutifully.”

K          “Despite unrelenting opposition from the White House, Republicans and industry, the Environmental Protection Agency (EPA) is doing what it can to reduce the plundering and the pummeling of the Planet.” 

. . .

K          “The ACLU is fighting the good fight.”

J          “Planned Parenthood is improving our plight.”

. . .

[See “Journalist:  Newsweek Suppressed OPCW Scandal And Threatened Me With Legal Action” and other articles in “caitlinjohnstone.com” by Caitlin Johnstone, the 2019 recipient of the Pushitzer Prize In Commentary, dated December 8, 2019 and the discussion of e-con-omics in “Against Economics” in “The New York Review of Books” by David Graeber dated December 5, 2019.]

[See the e-commentary at “Here Comes Da Judge; Dere Goes Da Justice (August 31, 2015)”, “The FBI File:  The American Imprimatur Of Success (January 18, 2016)”, “Suing Law Schools; Suing Gun Makers.  Oh, And Happy Law Day! (April 30, 2018)” and “Clinton, Inc., Trump, Inc., Bush, Inc., Kennedy, Inc., O’Bama, Inc. (October 24, 2016)”.]

Bumper stickers of the week:

“Every great cause begins as a movement, becomes a business, and eventually degenerates into a racket.”  Eric Hoffer

America is a racket not a republic.

“If the misery of the poor not be caused by the laws of nature, but by our institutions, great is our sin.”  Charles Darwin 

There is nothing you can do to make any material change of any kind in any way today.

“Start where you are.  Use what you have.  Do what you can.”  Arthur Ashe

Economics And Finance:  Girls v. Boys (June 4, 2018)

Posted in Banks and Banking System, Bernanke, Federal Reserve, Gender, Greenspan on June 4, 2018 by e-commentary.org

. . .

K          “What do Nomi Prins, Terry Gross, Yves Smith, Lynette Zang, Catherine Austin Fitts, Nicole Foss, Ellen Brown, Danielle DiMartino Booth, Brooksley Born, Sheila Bair, Janet Tavakoli, Gail Tverberg, Gretchen Morgenson, Michelle Singletary and Lionel Shriver have in common?”

J          “ . . .  How many guesses?”

K          “Who’s counting?  Take your time.  The face-off does not fall for an hour.”

J          “ . . .  They all have vowels in their names.”

K          “To a person.  Nothing gets by you.”

J          “Nothing.  Not.  a.  chance.”

. . .

J          “And consonants, too.  Two consonants, too.”

. . .

K         “No ‘Québec’ in any of the names.”

. . .

K          “What do Allan Greenspan, Philip Gramm, Larry Summers, Tim Geithner, Ben Bernanke, Hank Paulsen, and Robert Rubin have in common?”

J          “They too have vowels in their names, but they never should have been allowed to get near the bowels of the body politic.”

K          “They never should have been allowed to have any proximity to the bourse, the boardroom or the blackboard.”

. . .

[See the e-commentary at “The Kids (At The Fed) Are Not Alright (January 30, 2012)”.]

Bumper stickers of the week:

Girls are alright

From available sources, Ben Bernanke made the following statements and prognostications:

July 2005:  “We’ve never had a decline in house prices on a nationwide basis.”

November 2005:  “With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”

March 2007:  “All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”

October 2007:  “It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.”

January 2008:  “The U.S. economy has a strong labor force, excellent productivity and technology, and a deep and liquid financial market that is in the process of repairing itself.”

And last but definitely not least when it comes to misleading and dangerous drivel:

January 2008:  “The Federal Reserve is not currently forecasting a recession.”

Going Forward With The “Reverse Stock Split” (February 5, 2018)

Posted in Crime/Punishment, Dow Jones, Federal Reserve, Kleptocracy, Rackets, Rule of Law, Stock Market on February 5, 2018 by e-commentary.org

. . .

K          “The Federal Reserve has purposely pursued a policy to punish citizens, including millions of hard working and God fearing Americans in their retirement, who merely seek a predictable and reasonable rate of return on their money.  If citizens want any real return on their money, the Fed forced them into the stock market racket.”

J          “Which is a crime and really should be punished as a crime.”

K          “Except we subsist in a country without the rule of law.”

. . .

K          “The Dow was at about 26,000 last week before today’s collapse, yet the real value of the underlying stocks measured by realistic price/earnings ratios is only about 13,000 to perhaps 15,000.”

J          “But that type of thinking undermines the consensus that all Americans are financial geniuses.”

K          “The ‘Wealth Effect’ is surreptitiously impoverishing many of those financial geniuses.  Too many investors/speculators are spending more money or, even worse, incurring more debt without realizing that their faux wealth will soon vaporize.”

J          “The ‘Poverty Effect’ will be a bodacious and stupendous bummer.”

. . .

K          “Check this out.  In a typical stock split, one share at $100 per share is split into two shares at $50 per share.  That thinking is so outmoded and outdated.  Everything in the stock market is hocus pocus.  I propose a reverse stock split where one share at $100 per share is split into two shares at $100 per share.  We need to create wealth.”

J          “Count me in.  The Dow at 52,000.  Just like that.  Twice as rich.  But with the absurdity, the insanity, the depravity and the irrationality that defines our reality, why not a three for one split and thus a Dow of 76,000.  Thrice as rich.  Just like that.  We need to concoct wealth.”

K          “Pocus hocus.  Count me in.”

. . .

[See the e-commentary at “The Dow Is The Canary (April 26, 2010)”.]

Bumper stickers of the week:

The Dow at 104,000!!!!!!!!!!!

Or not.