Thermometer Held Out in the Storm

Friday, October 31, 2008
A good baromater of the economic crisis is the amount banks borrow from the Fed every week. That number continues to go up. It's at 110 billion, up from last week by about 5%.

I'll point out for the second time in two weeks: the Fed is leveraging itself massively. If and when one of the major banks fail (think: Citi), these untold billions in credit lines will chain-react and the Fed will go into default.

For the Record

Thursday, October 30, 2008
I'm 19 years old. In October 2007, I read 'The Great Crash: 1929.' In January, I posted this on my Facebook blog:

Another Great Depression, Maybe?

The stock market has lost a lot of value since the New Year. In only three other years since 1926 has it had such a decline. Meanwhile, the income of the top fraction of Americans is rising faster than in any other year, except in 1927 and 1928. Hedge funds, which sit on $20 trillion dollars of invested money, are wobbling because of their use of leverage - a financial strategy made famous by the "investment trusts" before the Great Crash. Downticks in manufacturing preceded the wholesale panic in late 1929; results from the Federal Reserve in Philadelphia, published yesterday, show manufacturing in decline. The housing market is bleeding the banks; for the first time since the Great Depression, America's major banks are losing money.

Iceland Great Depression Poetry

I'm relaying you another dispatch from Iceland.

Earlier in the month, I criticized an Icelandic writer, one Jonas, for his gaseous optimism about Iceland's economy. Weeks later, his optimism is gone.

His latest column is a botanist's overview of the bits of bleak popular poetry sprouting up as the Depression comes down on Iceland. Jonas does mention that Icelanders are holding town hall meetings, lively ones where citizens are invited to speak. This is a wildly encouraging sign. Iceland, the world's oldest democracy, is going back to its roots (in the permafrost.) Good on 'em.

This is my favorite poem. It works as well in Iceland as anywhere.

The people of Iceland need never fear
The terrible hunger that threatens come near.
Our army of corporations, our righteous salvation,
Will make sure we get our daily bread ration.
Oh ho! Or so says the morning paper.

Anyway, the column is well worth a read.

Iceland Review - How to Shout in Icelandic

News from the Socialists

Thursday, October 23, 2008
This is an incredibly well-reasoned article on the state of the U.S. economy. Yes, it's from the World Socialist Website. Socialists are dirty people, according to practically all Americans.

Anyway, read this.

An old friend in Seattle, Jordan Fox, told me in March that he expected America to go into a Great Depression because of his readings on Socialist websites. He and the socialists were remarkably forward-thinking.

A Comment on Blade Runner

Wednesday, October 22, 2008
I think there's a strong case to be made that Ridley Scott combined New York City and Los Angeles in Blade Runner - though it was set in L.A.

The Difference Between '29 and '08

When the financial apocalypse befalls the world in a few months, be sure to thank Milton Friedman, the libertarian economist.

In the 60s, he revised our notions of what caused the Great Depression. It wasn't speculation on the stock market, which would've fizzled down harmlessly. Instead, he said, it was the catastrophic government intervention afterward.

The Federal Reserve tightened the money supply after the stock market crash. Milton Friedman made it orthodoxy to believe that the Fed's tightening put the economy in a depression. Don't blame speculative capitalism, blame government.

Using Milton Friedman's model, the Federal government is doing the absolute opposite of what it did in the 20s: it's printing trillions of dollars, borrowing trillions of dollars, lending trillions of dollars to the banks and speculators. It's leveraging itself. Just as the corporations and banks and whatnot leveraged themselves prior to this crash.

In the short run, this will avert a worse stock market panic and a plague of defaults. In the long-run, it will bankrupt the Federal Government.

The Feds get a bad rap for their actions after 29. But maybe they were sparing us an Apocalypse at the cost of a Depression. (And now the Feds are sparing us a Depression at the cost of an Apocalypse.)

SIDE NOTE: For a real view on the Depression, read Galbraith's 'The Great Crash: 1929.' It was the basis for my January, Facebook-blog prediction that we're headed into a Depression.

America's Contempt for Europe

Tuesday, October 21, 2008
A generation ago...
Only island-bound Britain
withstood Nazism;
the French surrendered Paris
without a shot, to
preserve their art and bourgeois
amusement park.
the Italians?
They became fascists, so did
the Spanish.
Europe slaughtered its kykes,
cripples, fags, gypos
for eugenics.
America rolled tanks out of
its factories, we plucked the
legs off Hitler's metal spider,
as a bonus, we kept off
Stalin's robots.
Communism was romantic,
to you Euros, was it?
Romantic, until the central
committee draws up the
liquidation quotas.
Your philosophies, religions,
ideologies are gone like
sand castles -
high tide came decades ago
Ha! Your imperialism was a global
bad odor.
We washed your masses on Ellis,
and we find you in contempt.
You find us crass and uncultured:
admittedly, we are and we have no
culture - but what is more crass
than consenting to a Holocaust?


Friday, October 17, 2008
Time to smash the mirror
and squash the teenage twitching -
I'll expose the Pentagon,
haul in the thousands,
buy a cane and point it prophetically at skies,
I'll play the stock market,
build secret rail-roads to Montana,
gather together painters, poets,
suicidal visionaries,
atheist logicians,
renegade scientists,
anybody with purple eyes,
at a perverted mountain retreat:
I'll fly on a Virgin flight to the moon.

Desert Seduction

pout of lips
warm brown skin
empty eyes,


I saw a man wielding a camera at a cafe
passed him in the car
he was frozen in the sunshine
like a photo, he had his own
still timezone.


the mixing of the races
in public
should lead more often
to orgy


there won't be equality between the sexes
till men carry change in their wallets


The Emperor Has No Pulse

Tuesday, October 14, 2008
In August, Dear Leader Kim Jong-il disappeared from the public eye in North Korea. He didn't attend two parades, even missing the country's 60th anniversary. South Korean and American intelligence indicated he had suffered a stroke.

On Oct 4th, North Korea announced that Kim Jong-Il had attended a soccer game. (Kim Il-Sung University was reported to have beaten Pyongyang University of Railways 4-1.)

Then, on the 11th, North Korea came out with photos of Kim on a vigorous stroll, looking alive and spanking hot as usual

Now, there are doubts arising about those photos. They were supposedly taken in autumn. Does this look like autumn to you?

North Korea's official website, Naenara, has an entire column dedicated to 'Kim's Activities'. His latest jaunt was to a women's artillery unit.

Behind the smoke-screen, is Kim Jong-Il a corpse? The consequences of his death are incalculable. A power vacuum could be opening in North Korea at the same time that Pakistan nears collapse and the global economy flirts with a Depression.

Kim: Come out, come out, wherever you are.

UPDATE: DEJA VU: In August, North Korea released photos of Kim Jong-il visiting a women's artillery unit. Compare the August and October photos.

Congratulations to the Dow

The world's stock markets shot up like a heroin addict. America's Dow Jones gained 11 pc. It was the biggest one-day rally since 1933. (Yes, since 1933.)

The stock markets are celebrating Europe's bailout plan. In Germany, for instance, the government set aside US$600 billion for the banking system. That's, um, more than a fifth of the country's annual GDP.

In America, we're going to channel some $250 billion directly into the banks, so as to nationalize them. The government is behaving like a blackout drunk who's forgotten that the bar tab isn't a function of infinity.

I shudder to think of the corruption involved in this. Of course, there will be no final accounting for these trillions of dollars, despite the vows of 'transparency and oversight.' It would take trillions of pages of reports to account for trillions of dollars. Our wealth - like our democracies and our ice caps - is disappearing before our eyes.

Bankers and bureaucrats will pocket millions as the money 'trickles down' through the system. They'll throw extravagant, end-of-the-world parties and shopping sprees. They'll buy Rolls-Royces, 7 year-old catamites, little girls and gold toilets. The West is more corrupt than it was in those famously debauched years before WWI, when politics became theater and 'les nuages de la guerre' gathered in the skies. Income inequality is at ballooning 1928 proportions.

But will the plan work? No, it won't.

News from the North

Monday, October 13, 2008
As the apocalypse settles over Iceland, I bring you a dispatch from its leading magazine. The author lives on the island and he's optimistic about its future. In fact, his optimism abounds. But it looks to me like he's farting into a hurricane in the hope of steering it away from the island.

The fact is, Iceland's currency, the Krona, no longer has a discernible value. The country has none of the foreign currency it needs to import food, and it has only a two weeks' of food left. There's not enough cod in the Atlantic to feed over 300,000 people on short notice.

Iceland's only hope is an IMF loan. Maybe it'll get it, maybe it won't. Maybe the loan will be enough, maybe it'll be insufficient.

Anyway, it's a fascinating, hopeless read.

Icelandic Review - Miracle Whipped

UPDATE: This article from the same magazine portrays a nation in deepening denial. Read it.

A Mirror to America

Sunday, October 12, 2008
Look, America:
your freedoms, brown leaves,
waiting for a strong wind
your leaders, all corrupt,
clawing in a tar pit
but your land and sky,
beautiful and fruitful as ever.
American people,
what are you ready for?
Will you judge yourselves
and surmount this test,
or will you capitulate
like the Romans?

A Call to What Action

Men, boys: for a moment,
turn your back from women,
the Earth is one of them
but she is carried by Atlas, a man:
look to the horizon, look to the future.
See the fires coming?
The prophets, children and dogs smelt
the smoke long ago.
So comrades: what are you going to do?

My Quibble with Europe

I have a problem with the Europeans. After inciting two world wars, surrendering consummately to Nazism, destroying a third of their Jewish population in concentration camps, and brutalizing the world under their imperialism, after the failure of their religions, philosophies and ideologies, they still do not consider themselves a disgrace.

Requiem for an Administration

Thursday, October 09, 2008
Two elections stolen:
Cheney slobbers on his newest
baby boy
Bush stares blankly
into space
Paulson pockets a billion
from the bailout
Politicians dance like lice
in the Congress
The people suffer

Deleveraging, or: Why the Disaster is Deepening

Wednesday, October 08, 2008
10 months ago, I asked on my little Facebook blog: is there going to be another Great Depression? The thing troubling me most was the amount of leverage in the financial system.

Excessive leverage caused the crash in 1929. The best example of leverage is margin buying. In the 20s, it was a fad to borrow money from a bank, turn around, and invest the loan in the stock market. This is dangerous: it encourages risky stock buying (people tend to take bigger risks with borrowed money).

Margin buying triggered the recent crashes on the Russian stock exchange and elsewhere, according to the reports I've read.

It's only one type of leverage. The more convoluted type works like this: an investment firm will take out, say, a $1 million loan, and then it'll put that loan toward collateral on another loan, and then that loan will be put toward collateral on another loan, and so on. This is called 'gearing up.' In the 20s, investment trusts geared up hundreds of times over.

Hedge funds are leveraged like this. Hedge funds are secretive firms, which employ computer models and supposedly brilliant investment gurus to manage stock portfolios. Hedge funds are not regulated in any way; but they hold trillions of dollars and they can control the stock market with sheer force. For years they've been bringing their customers 30 percent returns. Now, it's rumored most hedge funds are floundering or going bankrupt.

The present-day financial system is leveraged to an extent unseen since the 20s. The leverage goes back to the booms in the 1990s. Of late, we're seeing the unwinding of that leverage. The term 'deleveraging' is becoming a common phrase on the financial news wires. Just this week, the president of Credit Suisse said he expects deleveraging to continue into the rest of the year.

Deleveraging is the process of loans being called in. Here's what it looks like. Let's say an investment firm has borrowed 20 billion dollars to invest in the stock market. Suddenly, the bank that loaned it the money gets uneasy and sends out a margin call: it wants its loan back, or it wants another down payment on the loan. So, the investment firm, to pay off the loan, has to sell off its stock. This is how sell offs get started. This is why the international stock market is tanking.

(Lehman Bros., the bankrupt investment firm, was leveraged 30-1. It had borrowed 30 dollars for every one dollar it owned. And its situation was not unique. They all did it, and it's all coming down.)

Now, for my prediction: the markets are going to get much, much worse. Here's why.

For the past few months, the Fed has been loaning hundreds of billions of dollars to banks and other institutions. Just this week, it airdropped 600 billion dollars into the systems. And I'm not talking about the bailout bill. This 600 billion dollar dollop was a separate thing. It was auctioned off to banks at extremely low interest rates.

I can't tell you how catastrophic this will be - for the Fed is simply adding leverage to the system. The banks are being loaned money; they're not being given it. As the crisis spirals, I presume they'll be unable pay back the money they owe to the Federal Government.

At which point the U.S. fill face the prospect of defaulting on its debt.

The effects will not be abstract. and they'll be immediate. The only reason Americans can charge to their credit cards like they have is because America has the most trusted government in the world, with a AAA credit rating. When the Saudis and Chinese turn off the credit spigots, credit cards won't work. It's that simple.

People in the know say this scenario is almost unthinkable. China and Saudi Arabia are too dependent on the U.S. economy to let it crumble, they say. Right. But it's already happening. This week, the Chinese government discretely ordered its banks to stop lending to U.S. banks.

Welcome to the Great Crash of the Zeroes. As I've said before: There Will Be Blood. In fact, that was the whole point of the movie. Did you notice the last scene took place in 1927?

It ended with an oilman killing a preacher.

Austria Builds 'Camp' in Mountains

Tuesday, October 07, 2008
VIENNA, Austria - Far-right Gov. Joerg Haider has set up a facility in the remote mountains of southern Austria to handle asylum seekers suspected as criminals, saying they need to be isolated to protect the people in the area.


"The whole thing sounds strongly like banishment," said Heinz Patzelt, head of Austria's chapter of Amnesty International. "There's no place for that in a modern system with a rule of law."

Haider's spokesman Stefan Petzner said no one's rights were being violated.

"It's a perfectly normal establishment far away from civilization in a secluded area so they can't get up to anything," said Petzner. "You shouldn't think of this as a prison surrounded by barbed wire."

He said that the asylum seekers were allowed to move about freely on the premises but were being monitored.

The holding center in a former children's home is only for asylum seekers suspected as criminals. But Petzner said conviction was not a "mandatory prerequisite" for being sent there.


Have I mentioned my visceral distrust of Austrians? Potential fascists, the lot of them.

Let's Get Martial

I've been quietly wondering for months whether Bush will declare martial law. Here are two informative links:




In last night's dream
I travelled through many fine membranes
of the world's past and future
and discovered in subterranean places
the Western world's hatred of many sorts
welling up from a screen.

Deja Vu in Capitalism

Monday, October 06, 2008
Stalinism insulated Russia from the 1929 crash and the Great Depression. Now it's a capitalist country. Yesterday its stock market plunged 20 percent, which is far worse than even the steepest declines in 1929. Funnily enough, one of the main causes of the 1929 crash is asserting itself on the 13 year-old Russian exchanges. Note the words in bold:

"In September, growing financial turmoil in the United States and a wave of margin calls sent the Russian stock markets into their biggest downward spiral since 1998."


It's as if Russia is reliving capitalism's biggest crisis, the Great Crash, on a 70-year time delay.

("Vlad, it's for you!")

The Pimp

Today, the Pope, who is known to wear Gucci sunglasses, had words of divine wisdom for the world. In light of this economic crisis, he declared, it is clear that 'money and ambition are futile.'

Agreed. So he should immediately liquidate the Catholic Church's futile, but considerable, real estate assets and financial investments, which total well over 1 trillion U.S. dollars. Perhaps he'd like to endow them on the world's meek?

He added, 'The world financial system is built on sand.' If that is so, the Catholic Church is the world's largest sand castle. It owns more real estate than any organization on Earth.

God only knows how much gold and how many catamites are detained in the Vatican.

Bombs Away!

National City will be the next bank to go.

Random Prophesy?

Last night I had a dream that there was some terrible violence in Ceylon and I had to take refuge in a hotel room with Winston Churchill. Today, this.

Lead Head

Friday, October 03, 2008
The more time I spend on Earth, the less I like human beings. I wouldn't call myself a misanthrope; nobody has the capacity to hate 7 billion human beings, not even the most advanced supercomputer. But I would like to disown my human origins. I'm not from Earth. I'm made up of the elements, which were forged in the stars, which popped out of the Nothing. My human form is an accident. Dogs are dogs by accident. Humans are humans by accident. I suspect there's an alien planet out there where I'd feel more at home. I will walk among you as an extraterrestrial.

People look askance at me for obsessing over the apocalypse. They think I'm a womanly hysteric. But even according to the scientists, some sort of apocalypse is inevitable. Isn't the sun going to burn out and explode in 4 and a half billion years? And what, you think humans are going to escape this solar system? Or even this century?

People look askance at me for obsessing over the apocalypse. Have you seen any signs lately that human beings are concertedly switching off of oil? Electric cars don't count. Electricity is produced with fossil fuel. Nuclear power plants don't count. One of these days, they're going to melt down and send plumes of radiation across the Earth, like shit streaks in your underwear. Show me the truly global, multi-trillion dollar effort to end dependence on oil and then I'll flash you my optimism.

People look askance at me for obsessing over the apocalypse. Do you realize how burdened we are as moderns? Do you realize that we might have a lot less time than we think? Can you imagine the stresses which will bear down on us when we run out of oil? Or when a piece of Russia's nuclear arsenal floats out of the silos? Or when zinc and wheat become scarce? Or when ebola finally strolls out of Africa into our cities? Do you realize the burden? Everybody has become so conditioned to utopia that the apocalypse is a taboo subject. I'm reminded of the woman in American Beauty listening to 'Don't Rain on My Parade' a few days before she buys a gun to commit suicide.

Look at this beautiful Earth, this perfect amalgamation of matter, this fabulous ecosystem. Every bit of it is programmed to self-destruct. The human epoch is a barnacle on billion year old rocks. I tend to believe that ancient tribe whose Creation story goes like this: God fell in love with and married his own shit and thus the world was born.

In other news, politics is dead and getting deader and a big war is coming probably. I think it will start at the Empire State Building.