Cannibal Capitalism
By Barry Ritholtz - November 9th, 2009, 5:00PM
Forget “Crony Capitalsim,” there is a new game in town:
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Macro Notes
Volume running below Friday’s anemic levelPeter Boockvar
Following Friday's expiration volume that was the 3rd lowest of the year (consolidated NYSE), today is on track to be slightly below even Friday. Today will also be the 3rd Monday in a row where the week started out with a bang based on the 'easy for longer, short $, buy stocks trade.' Two weeks ago we followed the G20 meeting with a Monday 2%+ rise in the S&P 500 with no further gains the rest of that week. One week ago we rallied 1.5% after the APEC in Asia said their stimulus plans won't end anytime soon but by...
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November 9th, 2009 at 5:12 pm
After a couple of drinks, the tag line looks like it reads “Bringing you Bigger and Better Criminals.
Just saying…….
November 9th, 2009 at 5:15 pm
Lloyd the magnificent:
“I’ve got news for you,” he shoots back, eyes narrowing. “If the financial system goes down, our business is going down and, trust me, yours and everyone else’s is going down, too.”
With friends like this……..
November 9th, 2009 at 5:17 pm
I’m crying laughing at this Onion video:
http://www.theonion.com/content/video/ford_unveils_new_car_for_cash
November 9th, 2009 at 5:48 pm
Barry,
You need to tell your boy to just shut up and buy some gold or Australian dollars.
http://www.bloomberg.com/apps/news?pid=20601103&sid=as0drZ9lcOhY
U.S. Joblessness May Reach 13 Percent, Rosenberg Says
…I do not expect him on CNBC anytime soon….
B in T
November 9th, 2009 at 5:51 pm
U6….27%…..???
November 9th, 2009 at 6:02 pm
so . . .uh . . .where’s the problem?
TZ-
i thought the super bowl ad was pretty impressive-
makes me want one
November 9th, 2009 at 6:38 pm
@ahab: the Superbowl ad made me lose it.
November 9th, 2009 at 6:57 pm
There can be … only one.
November 9th, 2009 at 7:22 pm
Transor,
along the lines of that ONN vid- if one can deal with the colorful prose, and simmering invective, makes for interesting reading..
“…The future, dumbed-down serfs of the future “masters of the universe” (so-called), now watch completely meaningless sports games and trash-TV instead of getting informed and taking action to save their country from the group of satanic trillionaires who have created the Goldilocks Matrix which they now occupy. We ask our fellow citizens in the matrix: Do you want the blue pill, or do you want the red pill? So far, most Americans have unfortunately opted for the blue pill. As always, those who have opted for the red pill are going to have to save the blue pill idiots from the consequences of their own pitiful ignorance. People who take the red pill are subscribing to the IF to get the truth and are buying gold and silver like there is no tomorrow so they can live to fight another day when the worldwide financial system collapses, as planned, to pave the way for a one world police state. The bold people who took the red pills are going to be all over the Illuminati like flies on rice when that happens, and you can take that to the bank, if there is still a single bank left standing after the Quadrillion Dollar Derivative Death Star goes supernova.
After watching most of our manufacturing industries shipped overseas, we have been reduced to tapping on keyboards, greeting people at department stores, flipping burgers, providing menial healthcare services for pitiful wages and shoving stacks of paper to and fro, while producing little that has any lasting value. Our financial industry, which by and large is run by Illuminist crooks, are using insider trading information from the PPT, led by Goldman Sachs and their government-gifted, front-running trade algorithm, to gun for the fast and easy buck, thereby transforming our capital markets from places where we can invest in our future into gambling casinos complete with craps tables and roulette wheels. When they profit..”
http://theinternationalforecaster.com/International_Forecaster_Weekly/A_New_System_For_The_Privleged_Is_Not_A_Remedy_For_The_Economy
November 9th, 2009 at 7:30 pm
@Bruce
OK, I’ll bite … where’s the 27% coming from?
In Rosenberg’s interview (you can catch it as a free iTunes podcast), he justifies his 13% U3 number as a reversion to the mean of the historical difference between the U3 and U6 metrics, with the U3 number rising while the U6 metric stays flat, with employers preferring to bring on part-time people as the economy slooowly gathers momentum, as they have a lower cost that full-timers, what with lesser bennies and all.
Nowhere did he indicate a 27% U6 number, at least so far as I can recall.
At least that’s my recollection of the interview — being merely human, I may have atrociously mis-remembered it.
Detail nazis are encouraged to listen to the interview and rub my nose in any silly foibles of human memory.
November 9th, 2009 at 7:34 pm
Then: “We’re on the side of angels.”
Now: “Doing God’s work.”
Evolution, not Irony must be at work.
November 9th, 2009 at 7:48 pm
constant:
That is merely speculation…that is what the question marks mean..however, if you’ve been paying attention to CR’s graph of the joblessness since peak unemployment, you already knew that this would be the “mother of all jobless recoveries” as Rosenberg opines….
…You can sit down in the morning with a cup of coffee and figure these things out, or you can not…
Yoda once said,” There is do, and there is do not. There is no try.” Same goes with figuring out how to stay afloat during these times…if you do, you should do ok…
http://2.bp.blogspot.com/_pMscxxELHEg/SvQmqFmXogI/AAAAAAAAGvE/YQrQHOu9KBU/s1600-h/EmploymentRecessionsOct.jpg
…Pay attention…there is a test at the end.
November 9th, 2009 at 7:49 pm
KISS OF DEATH: Greenspan Says Stock Market Rally “Re-liquifiyng” US Economy.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCyPFlcZdck8&pos=1
Bruce, Buying Aussie Dollars is one thing i thought about earlier this year that i’m kicking myself for not doing. . . same as shorting Circuit City to BK last year. At least i still have shares of BHP and PCU.
November 9th, 2009 at 7:59 pm
Hi Barry,
This reference to cannibals (not to mention “Zombie Banks”) jogged my memory to a Jonathan Coulton song you turned me on to a few years back… (just notice the Bigger Picture reference in the song!)
Re: Your Brains
http://www.youtube.com/watch?v=cOlznuyPOeM
November 9th, 2009 at 8:34 pm
The future, dumbed-down serfs of the future “masters of the universe” (so-called), now watch completely meaningless sports games and trash-TV instead of getting informed and taking action to save their country from the group of satanic trillionaires…
MEH, I think Roger Waters had this covered 30 years ago:
“I’ve got 13 channels of shit on the TV to choose from… choose from… choose from…” (Pink Floyd, “Nobody Home”)
When they overrun the defences/A minor invasion put down to expenses/
Will you go down to the airport lounge/Will you accept your second class status/
A nation of waitresses and waiters/Will you mix their martinis/Will you stand still for it/
Or will you take to the hills?
When the cowboys and Arabs draw down/On each other at noon/
In the cool dusty air of the city boardroom/
Will you stand by a passive spectator/Of the market dictators
Will you discreetly withdraw/With your ear pressed to the boardroom door
Will you hear when the lion within you roars/Will you take to the hills?
-Roger Waters, “Home” from Radio KAOS
November 9th, 2009 at 8:37 pm
@Bruce 7:48 pm
At the risk of incurring heresy here, I wouldn’t put a whole lot of credence in that particular chart — as it measures the employment drop-off from the prior employment peak, and not from a nominal value. This leaves the chart vulnerable to exaggeration due to the prior peak being a result of ginormous stimulus/pumping — and if the peak at 2007 wasn’t a bit of an overshoot …
Of course ALL (or certainly most) employment peaks will represent overshoots of varying degrees. And it’s the varying degrees part that makes that particular chart unreliable.
But faced with the difficulty of coming up with a metric for “nominal” employment, the easier course for chart-makers to follow is to anchor changes to previous inflection points. But easy don’t make it right.
I agree that things are gonna be rougher than anything since the GD, and possibly longer. But they won;t be as bad as the GD depression was. And the misery will be pretty much constrained to the US of Bananamerica, the UK, and a smattering of other small countries. The rest of the world will be just fine, and is actually beginning to emerge from the misery.
An easy solution might be to move to Oz.
November 9th, 2009 at 8:39 pm
Is it any wonder why small businesses are closing up? One million small business accounts cut off.
I am more convinced than ever that the CPS data is at the present moment the more accurate data on job losses because it captures the small business closures that would not be in the establishment data. (The establishment data continues to “birth” new jobs – 83,000 in October. The CPS has been trending up for the last 4 months while the CES is trending down. We may already be headed towards the second V of a W-shaped recession.
Advanta Files for Protection, Bank May Face Takeover
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGn6SxlHfgwE&pos=7
November 9th, 2009 at 8:43 pm
I want to give you all some advice for after the collapse. When the society breaks down and cannibalism becomes just another lifestyle choice liking golfing or voting Republican, DO NOT, I repeat, DO NOT GO for the easy calories to be found among the Jimmy Dean Americans. I know, it’s counterintuitive, you might be saying ‘But, Melvin*, jes look at ‘em, so round and succulent and slow-moving, looking like some BBQ- flavored, spandex-wearing pach-I-derms! Mmmmm! Them’s good aytin’!”
NO! Bad, Rufus! Do not eat those ones! Go for the lean meat, the runners, the steppers, the jazzercizers.
Trust me, you’ll thank me.
November 9th, 2009 at 8:56 pm
@MRegan 8:43 pm
How ’bout the little ‘uns — the veal — are they OK?
November 9th, 2009 at 9:00 pm
CN-
Seems like you want to throw in other options…let me guess, you’re a jazercizer, aintcha?
November 9th, 2009 at 9:07 pm
@MRegan
I’m f(l)attered.
November 9th, 2009 at 9:21 pm
Re: the Cartoon
When I see that I see the last gasp of a dying breed.
Historians will say: “They were victims of their own success… but the great tragedy is that through their success they destroyed the very system that enabled their own existence.” (The I was a history major, so knows these things.)
I am looking forward to trading their demise. Its only a matter of time really. The hunted will become the hunters.
Eagerly awaiting the end of the charade,
-I-Man
November 9th, 2009 at 9:33 pm
@I-Man
I agree, but for (maybe) different reasons. When a small group is at the top of their game, has subverted the entirety of the system to their own ends, there’s nowhere to go but down.
Without serious competition, they will get sloppy, and getting sloppy with hundreds of billions that are leveraged to the moon … sooner or later there will be the inevitable comedy of errors that leads to a cataclysmic implosion — like LTCM on steroids.
We on the outside will prolly not get to witness the inner build-up, and will have to read about it from Michael Lewis or some chronicler of his stature. But I’m sure it will make for a glorious show, and will prolly also take down this charade of a goobermint as well.
One can hope.
November 9th, 2009 at 9:40 pm
Well…it’s sort of a “Tweedledee/Tweedledum…MULTIPLIED! .but it goes beyond that….
Who Woulda’ THUNK….BANKSTERS…TWINS/QUINTS/GUADS…on and on…….LOCK STEP? or CLUELESS…
Ugh!
November 9th, 2009 at 9:49 pm
There’s no end in sight to any of this madness when people like this are still given any credibility.
http://www.calculatedriskblog.com/2009/11/mishkin-not-all-bubbles-same.html
November 9th, 2009 at 9:58 pm
It is over for the average person in this country.
Even if a leader appears, he will be analyzed and criticized to death before he can get out of the gate.
Ross Perot, Pat Buchanan, Ron Paul.
None of them were perfect but they were the only hope for any change.
Remeber the “vast sucking sound” if NAFTA passes?
Waiting for Mr. Perfect to lead them instead of working with the main chance.
How many chances for change did they think were going to sail by?
That was one, two, three strikes, you’re out for Joe and Jane six pack.
A future of $7 to $10 an hour part time jobs with no benefits.
Living in Mr. Field’s boarding house like Abbott and Costello, always behind in their rent!
November 9th, 2009 at 10:17 pm
@mw 9:49 pm
I find a ray of hope in that — the part that says “former” Fed Governor.
Things could be worse. The senile old fool could still be actively shaping policy, rather than attempting to shape public opinion, which matters not at all.
November 9th, 2009 at 10:19 pm
didn’t nixon say if they are to big too fail, tell them to get smaller.
November 9th, 2009 at 10:22 pm
MRegan Says:
November 9th, 2009 at 8:43 pm
I want to give you all some advice for after the collapse. When the society breaks down and cannibalism becomes just another lifestyle choice liking golfing or voting Republican, DO NOT, I repeat, DO NOT GO for the easy calories to be found among the Jimmy Dean Americans. I know, it’s counterintuitive, you might be saying ‘But, Melvin*, jes look at ‘em, so round and succulent and slow-moving, looking like some BBQ- flavored, spandex-wearing pach-I-derms! Mmmmm! Them’s good aytin’!”
——————–
Gruesome Irony? (I have to say…I can understand where you come from in what you say) LOL’s!…
November 9th, 2009 at 10:22 pm
Green shoots!
U.S. Lawyer job cuts worst in 30 years
Now we know things are improving!
BTW: Anecdotal evidence from here in Oklahoma: I went to the mall this weekend and it was packed! I had to park in the overflow parking. What’s more, people were actually buying stuff. I don’t know how to explain it; but there it was. Movie theater was also packed, but that is not unexpected during a recession.
November 9th, 2009 at 10:34 pm
I-Man Says:
November 9th, 2009 at 9:21 pm
Re: the Cartoon
When I see that I see the last gasp of a dying breed.
Historians will say: “They were victims of their own success… but the great tragedy is that through their success they destroyed the very system that enabled their own existence.” (The I was a history major, so knows these things.)
—————
The worry is…that they will outlast us…EXACTLYbecause…They were VICTIMS of their OWN SUCCESS” …but with the BAIL OUTS they actually OUTLIVED “the very system that enabled their own existence.”
TARP and the ZIRP and whatever the hell Acronyms Geithner/Summers and the reast name this…they will OUTLIVE the FINANCIAL DEMISE…to COME BACK another day..
History does tell…and trading only goes so far for the moment.
Yep…I hear you…but think you understimate them.. Great “Staying Power” those folks. Seem to have always been profiting for as long as anyone and history can remember. The always crop up …(Cyclical in Human History?)
November 9th, 2009 at 11:36 pm
Speaking of getting swallowed up….shouldnt somebody call out Doug Kass, he of the one correct prediction (Dow at its low in March) and completely missing on the other (the highs for the year on the Dow are in). Ooops. I think the luster is fading off of him.
November 10th, 2009 at 7:27 am
http://www.rgemonitor.com/roubini-monitor/257912/mother_of_all_carry_trades_faces_an_inevitable_bust
Mother of all Carry Trades Faces an Inevitable Bust
Nouriel Roubini | Nov 1, 2009
But one day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate – as was seen in previous reversals, such as the yen-funded carry trade – the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments.
…Well, who knows. But it does mean that all who are investing here are market timers on steroids, and none could honestly think they were by any stripe value investors. Just pay attention…Barry has to be in the market, but the individual certainly need not.
November 10th, 2009 at 8:41 am
Financial innovation is Wall Street’s new ’soul sickness’
Commentary: New mutant American capitalism has no moral compass
Paul B. Farrell
http://www.marketwatch.com/story/wall-streets-shell-game-will-ruin-us-2009-11-10
I predict that by next November, the general population will share these beliefs and Wall Street will be the issue for the mid-term elections.
November 10th, 2009 at 8:42 am
on this concept the FED is doing a perfect reflate at the moment .. and the tricky part is the turn on a dime time and pulling the juice .. and the hyper-drive that will ensue .. and dollar bonds going to be the hot trade .. I was wondering what the deficit $ loan interest payments are at various levels of interest is .. and I guess the payback period * .. are there super-computers working on that
*and who/what pays that interest rate back
___
and on “where’s the 27% coming from” .. (thats an unemploment ball) .. I heard something similar .. and it was presented as “not the average” (average including connected WASPs)(old) who had fallen thru the cracks in the sidewalk .. but more on the line on quintiles of age and ethinic groups .. I’d add in national regions – face it the brain is getting all the juice lately as any body does instinctively (NY DC)
…
and be careful of the birds ya fly and nest with .. pushing books and films and ideologies for their book (markets) …. oh to get my bliss back …. those were the days my friend .. we thought they’d never end
November 10th, 2009 at 9:31 am
bouncing between my 2 favorite reality tv channels .. thanks DavidFaber – good report .. I saw that Oracle item last night researchg
.. and on this thread directly .. can GoldmanSacks “side of angels – Doing Gs work” .. are they in a position to play the FED for USA taxpayers .. or again is it visaversa
___
I just can’t bring myself to post on Ft Hood radical concepts from the other channel .. there is only so much anti-bliss a guy can stand .. I just hope CID is doing their job for us all .. oh that what moves cabals
November 10th, 2009 at 9:36 am
crony socialism (the first comment disappeared into the void)
November 10th, 2009 at 2:24 pm
Robert Reich
Former Secretary of Labor, Professor at Berkeley
Posted: October 26, 2009 09:49 PM
“Needless to say, Wall Street favors the Administration’s approach — which is why the Administration chose it to begin with. If I were less charitable I’d say Geithner and Summers continue to bend over bankwards to make Wall Street happy, and in doing so continue to risk the credibility of the president, as well as the long-term financial stability of the system.”
http://www.huffingtonpost.com/robert-reich/breaking-up-the-big-banks_b_334814.html
November 10th, 2009 at 2:26 pm
Charles Gasparino
Author, Selling Out
Posted: November 9, 2009 02:32 PM
“Goldman, in case you haven’t heard, has been classified as a commercial bank, meaning it can borrow cheaply to finance its risk taking, and can borrow from the Federal Reserve in a pinch. That’s why it’s amassing such massive profits. And yet not a penny of its massive bonus pool will be lent out to funding-starved small businesses. Think about that: The Federal Government run by the most Liberal Administration in years, is subsidizing big business at the expense to small business.”
http://www.huffingtonpost.com/charles-gasparino/post_439_b_351116.html
November 10th, 2009 at 2:31 pm
Dylan Ratigan
MSNBC Morning Meeting M-F @ 9AM ET and WABC Radio The Dylan Ratigan Show, Sun @ 7PM ET
Posted: November 4, 2009 05:38 PM
“Break up the Too Big To Fail banking institutions. Start with Goldman Sachs and J.P. Morgan. Right Now.
How do you expect any other business to compete with the chosen few who are guaranteed profits? The more risk they take, the more they make. Why do you think they invented a fake $600 Trillion secret derivative market in the first place? Bigger bonuses baby. All upside. No downside. Thank you Uncle Sam. Thank you Secretary Geithner. ”
http://www.huffingtonpost.com/dylan-ratigan/4-step-bank-fix_b_346140.html
November 11th, 2009 at 12:00 am
…with Citi nowhere to be found.