Monday, August 27, 2012

When We Wake Up On November 7 . . . Nothing Will Have Changed

My new article published today in The Dollar Vigilante can be found here:

Best for the week,


Wednesday, August 22, 2012

A Short Summary Of Your Right To Free Speech

Short summary: You have no right to free speech, not anymore.

Free speech in today's America means speech of which your government approves. It is free speech in the spirit of the former Soviet Union.

In addition to the former Marine recently arrested and who remains locked up for expressing displeasure with the US government on his Facebook page, here is another in a long line of examples of rights being stripped wholesale:

In short, the TSA and Delta ganged up on a passenger and his wife who "looked foreign," and refused the naked body scanner and because they didn't like his t-shirt which, they said, "might make other passengers uncomfortable."

So, that is what they mean by "free speech." You can say whatever you want to say unless the government finds it politically unacceptable or finds it may make someone else uncomfortable.

So, their message to all of us is simple and straightforward:  "Shut up or tow the Party line.  Those are your choices.  That or arrest and detention."

I recommend the entire story at the link above as well as this story, one of my own involving inexcusable mistreatment by airline authorities in Houston recently:


Monday, August 20, 2012

"MF'ing Justice"

Original article with research links is found here:

MF'ing Justice

August 20, 2012
[Editor's Note: The following post is by Jim Karger, TDV Legal Correspondent] 

"I simply do not know where the money is, or why the accounts have not been reconciled to date. I do not know which accounts are unreconciled or whether the unreconciled accounts were or were not subject to the segregation rules." - John Corzine

Jon Corzine is a contemporary Richard Nixon: a low rent thief, liar, and American success story.

Corzine, you may recall, bet $6.3 billion on the wrong side of European sovereign debt, a wager his own risk department at MF Global told him was nuts, and a wager so big and so wrong that it wiped out the entire firm.

After the news hit the wire and blood hit the water MF's customers started jumping ship and that is when MF deliberately took customer money as its own to keep its head above water.  It was too little, too late.  The company filed for bankruptcy protection and Corzine resigned.

Over $1 billion in customer funds remain missing in action.

Depending on who you listen to, Corzine may have known the funds he ordered transferred were customer money. He certainly should have known and there is little  dispute he has a serious gambling problem and that he destroyed the savings and lives of hundreds of investors and businesses.

Now, after 10 months of a pretend investigation, one that has not involved so much as an interview by the FBI of Corzine himself, federal prosecutors have decided they are not going to charge him with anything.

Nothing. Nada. Vaya con dios, amigo.

Such is the nature of justice in America's fast lane.

Plausible Deniability Retested

Taking a cue from Nixon's "plausible deniability" gambit, Corzine has reminded us of a few important political truths that every American should remember as they struggle to find a safe place for themselves and whatever money they have left:

1.    Former CEOs of Goldman Sachs, like Goldman Sachs itself, are too big and too connected to fail, no matter how egregious their conduct.  And, to make sure we all know that, in addition to giving Corzine a pass, the government also announced last week that they are ending an investigation into whether Goldman Sachs misled investors in a $1.3 billion sale of residential mortgage-backed securities in 2006, shortly before the housing crash. You may recall that Goldman was packaging this rancid financial trash so that one client (John Paulson) could short them, while simultaneously selling the other side of the deal to their own clients, conveniently failing to disclose that these instruments were specifically designed to fail.

2.    Former US Senators won't be prosecuted for anything, ever, even if caught with underage boys on videotape.  They know where too many bodies are hidden, as evidenced by the softballs a fourth grader could have handled when Corzine testified in Congressional hearings on what happened to the money.

3.    Big-dollar supporters of any sitting President and his party are too important to lose to jail.  Corzine was one of Obama's biggest campaign "bundlers", a way for the rich to gain direct access to a candidate by leaning on people inside their organizations to contribute far more than ostensibly they would have without implicit threats to do so.

Proven Techniques of Truth Suppression

Not wanting to bet the farm solely on his political connections, but needing to make sure the fix was in, Corzine used several of the time-tested "Thirteen Techniques of Truth Suppression", favorites of politicians and their owners who don't want to go to jail, which I estimate to be all of them.

In Corzine's case, he selected from the liar's list as if were a menu of fine wines, first using technique number nine:

"Come half-clean. This is also known as 'confession and avoidance' or 'taking the limited hang-out route.'  This way, you create the impression of candor and honesty while you admit only to relatively harmless, less-than-criminal "mistakes.'  This stratagem often requires the embrace of a fall-back position quite different from the one originally taken."

Corzine played this gambit well, even professionally, first suggesting that he knew nothing, a proposition so absurd that it fell apart like a cheap suit, then subtly implying that he actually was a moron, a gambler with a problem, too stupid to be held liable for anything, though not in those exact words. His prepared testimony was, in a word, disturbing:  "I simply do not know where the money is, or why the accounts have not been reconciled to date. I do not know which accounts are unreconciled or whether the unreconciled accounts were or were not subject to the segregation rules. Moreover, there were an extraordinary number of transactions during MF Global's last few days, and I do not know, for example, whether there were operational errors at MF Global or elsewhere, or whether banks and counterparties have held onto funds that should rightfully have been returned to MF Global."

Yes, Corzine swore to all that with a straight face.

To make sure no stonewall was left unturned, Corzine borrowed from the crook's playbook once more, this time technique number ten: "Characterize the crimes as impossibly complex and the truth as ultimately unknowable."  This worked well when the big banks got behind Henry Paulson, another former Goldman Sachs CEO during the housing meltdown, as he explained not-so-patiently that we, the general public, were far too ignorant to ever understand what went wrong and so we should stop trying.

Matt Taibbi observed in his brilliant article in Rolling Stone:

"There's been an intense effort at trying to convince the public that no crime has been committed. Whoever is handling MF Global's P.R. . . . appears to have convinced the company's officers to emphasize the word 'chaos' in describing the last days of the firm - as though $1.2 billion wasn't intentionally stolen, per se, but simply lost in a kind of uncontrolled whirlwind of transactions that magically carried the money out of accounts off to worlds unknown."

No one with good sense professes to believe Corzine except those who matter, Congress, and federal prosecutors.

Finally, Corzine called on technique number twelve, "Require the skeptics to solve the crime completely," which was easy in this case since he was never interviewed by federal law enforcement, making their inability to prosecute true, albeit pathetic.  The fact that MF Global was a client of Attorney General Eric Holder's, and Assistant Attorney General Lanny Breuer's, former law firm Covington & Burling, didn't hurt Corzine's chances either, and the all clear signal was given when Holder (an accomplished criminal in his own right) refused to appoint a Special Prosecutor.

Like Nixon, Corzine is a one man epidemic of deceit, a thug with the conscience of a rabid hyena, and like Nixon, he is not going to jail.


Not only is Corzine avoiding prosecution, but under the heading of "in your face, MF'er," he is going into business again.  Doing what you ask?  Handling the money of others, of course. Max Keiser summarized the situation best: "Corzine is considering opening a new hedge fund, though the notion that anyone - even a slack-jawed muppet happy to buy whatever Goldman's prop traders want to sell - would seed Corzine money so he can trade or steal it away seems absurd - rather like putting a child molester in charge of a day-care." 

Absurd, yes, but true nonetheless and odds are he will raise millions, and if not become a high-priced political or financial consultant.

The Big Ugly Picture

Corzine is just another poster child for fraud and malfeasance at the highest levels, public and private. His photo is not alone on that wall of shame.

In the big picture, he is small potatoes. Other bigger players are being given passes for far more egregious crimes.  JP Morgan, infamous manipulator of silver, stepped closer to the edge by losing $6 billion in a single trading loss.  It's megalomaniacal CEO, Jamie Dimon, no stranger to truth suppression, expertly employed technique number four: "Knock down straw men. Deal only with the weakest aspect of the weakest charges. Even better, create your own straw men. Make up wild rumors and give them lead play when you appear to debunk all the charges, real and fanciful alike." Dimon took full responsibility (for a nanosecond) before blaming it all on a straw man, a rogue trader who turned out to have all the authority he exercised.  No one is going to jail.  To the contrary, almost as a gift, the US Commodity Futures Trading Commission (CFTC) dropped a four-year investigation (mainly held behind closed doors) into JP Morgan's obvious and rampant silver price manipulation just to show there were no hard feelings.

Still another shining example of "justice", as that term is now defined by the owners, is Barclay's Bank, believed to be a mastermind in the virtually incalculable LIBOR fraud.  Its execs have skated criminal prosecution and the bank has paid a relatively meager $350 million fine for everyone to forget it ever happened, except its former CEO, Bob Diamond, who used  technique number two:  "Wax indignant. This is also known as the 'how dare you?' gambit..." after British Parliament observed the obvious-that he is an unmitigated filthy liar like all the rest.

And, then there is Standard Chartered who will pay a $340 million to settle charges that it illegally funneled hundreds of billions of dollars to Iran in violation of innumerable US and international sanctions.  No criminal charges, mind you, just $340 million to take care of what amounted to a $250 billion conspiracy.  Some might characterize that as a good investment.

Finally, it would be unfair to leave out Morgan Stanley, lead underwriter of the now infamous Facebook offering, who took a play from Goldman Sachs and the great Paulson short.  They marketed Facebook stock to the unwitting while shorting it all the way down, making another $100 million.

It is not just about Corzine anymore.  The pathology of cronyism is endemic and spreading.

Immoral Of The Story

So, what is the moral of this hideous little tale?  What are the lessons for our children? 

Perhaps we should sit them down and wax philosophical:

"Kids, you know the old saying that 'crime doesn't pay?'  Well, that's bullshit.  Crime pays and pays big unless you are poor and without political connections in which case you will likely join the American gulag and soon.

"And that rule about always telling the truth? How can I put this gently? That's bullshit, too.  Liars, good ones, rise to the top of government and corporations. They are sociopaths by nature and have no empathy for anyone other than themselves. They are sick, but they are rich. You can make more money from five minutes knowing the right insider than you can from a lifetime of hard work.

"And, finally, about that Biblical 'suggestion' to 'do unto others as you would have them do unto you?'  Well, that will get you a job selling printer cartridges at Best Buy or teaching yoga to the woo-woos if you are limber.

"No, my children, If you want to make it big in this world, smile, lie, follow the money, suck the ass of those on the fast train, step on the little people and fuck anyone who gets in your way.

"Make Daddy proud."

By: Jim Karger

Wednesday, August 08, 2012

Lying When The Truth Would Work Better

My grandmother grew up in the backwoods of Arkansas. She got 4th grade education, worked in the fields, and when she was 12 years old threw down her cotton sack and took a train to Texas to live with an aunt she had never met. She lived a hard life, never had much of a chance, and yet she was one of the wisest people I have ever known.

She taught me many life lessons that have served me well, one of which went like this: "Jimmy," she would say as she waved her finger in my face, "most folks will lie even when the truth works better."

Not a particularly rosy view of humanity, but it was, and is, deadly accurate.

Nowhere is her admonition better seen than when man is collectivized and given authority. Whether government, corporate or union, the simple fact is that most people are liars, liars lie, good liars rise to the top, and when good liars are collectivized they lie more frequently and more effectively. When they have control of the numbers, it makes their deceit more difficult to discover. When they can make up the numbers, it can unwinding them a near impossibility.

Take the recent unemployment numbers that took the U.S. stock market to fresh 3-month highs. According to the U.S. Department of Labor, 163,000 new jobs were created in July, 2012.

Sounds good enough, but like most numbers, even if it is accurate, which it is not, it creates an intended deceit.

Looking at the Bureau of Labor Statistics own tables reveals the following startling fact: The U.S. actually lost 1,204,000 jobs in the month of July, 2012.

Don't believe it? Take a look at the actual unadjusted data from the Bureau of Labor Statistics.

During July, 2012, the private sector added a net 27,000 jobs which represented an added 76,000 goods producing jobs less 49,000 jobs lost in the service sector. The other million plus were lost in the public sector.

The 163,000 represents a number that has nothing to do with reality, but rather represents a model that supposedly takes into account the seasonality of certain jobs.

In short, the BLS report showing 163,000 added jobs is statistical wizardry by bureaucrats with calculators following the demands of liars who want the numbers spun.

If you give it some thought, it makes no sense that employment is expanding.

GDP is falling, in part because fewer people are working, which might also explain why tax receipts per employee are also falling.

A contracting, not expanding, workforce might also explain these numbers from the ISM’s July Manufacturing Purchasing Manager's Index (PMI) report:

The PMI registered 49.8 percent, which was a contraction in the manufacturing sector for the second consecutive month, following 34 consecutive months of expansion.

The New Orders Index registered 48 percent, indicating contraction in new orders for the second consecutive month.

A rising number of unemployed might also be consistent with:

ISM’s New Orders Index of 48 percent in July, representing a contraction in new orders for the second time since April, 2009.

The Inventories Index registered 49 percent in July, 5 percentage points higher than the 44 percent reported in June. 

ISM’s Employment Index registered 52 percent in July, 4.6 percentage points lower than the 56.6 percent reported in June. 

ISM’s New Export Orders Index registered 46.5 percent in July, 1 percentage point lower than the 47.5 percent reported in June, and represents the second month of contraction in the index since June, 2009.

ISM’s Imports Index registered 50.5 percent in July, 3 percentage points lower than the 53.5 percent reported in June.

The employment numbers are even belied by our garbage, not just government's garbage, but real garbage. A recent ZeroHedge blog ( interpreted recent Bloomberg numbers on the number of carloads of trash being hauled by U.S. railroads. "As Bloomberg explains: 'One closely watched economic indicator is the rail car loads of waste and scrap materials.' Logically: 'The more we demand, the more waste is generated by that production.' As the chart of the day, courtesy of Bloomberg Brief, demonstrates, if garbage is the benchmark, the US economy is now contracting faster than it has at any one point in the past 3 years and is on pace to recreate the economic collapse last seen after the Lehman bankruptcy. Perhaps another reason why central planners have latched on to stock markets and will just not let go."

The chart is here:

In the big picture, the numbers still don't add up. The “civilian labor force participation rate” is now at 63.7% of the total workforce. The total employment to population rate is 58.4%. See "The Employment Charade Or Ignore The Headlines," by Jeff Harding at The Daily Capitalist here: If participation keeps falling precipitously, does it make sense that net jobs are being added and filled?

From employment to GDP, government skews the numbers to the favor of, well, government. Obama does it, Bush did it, and the next up in America's so-called 'leaders,' will do it, too, and for the same reasons: to keep the Sheeple calm, or at least, non-violent.

And, while it appears government is lying to its advantage, in fact it is lying when the truth would work better. Why? The lies upon lies will soon become incredible. The Sheeple will look around and see that more, not less, of the people they know, their neighbors, and their friends, are unemployed, and one day the published numbers will mean nothing anymore and when numbers created from whole cloth are no longer believed, the civil disobedience will begin. No doubt the truth would be taken hard today, but the truth would provide a foundation for solutions that make sense. Relentless denial is rarely, if ever, the answer to any problem.

A good starting point for anyone interested in parsing government numbers is to assume that any number publicized by government is fiction. The first question to be asked is, "to whose advantage?" The second question, "Where is the raw data?" Then, combining common sense with a little research you may still not get to the real number, but you will get closer than the lies being fed to the willing by the liars who lie even when the truth would work better.