anything goes. I think you are spot on.

A few days ago, I linked to this article in which a well known Wall Street personality and highly regarded trader and money manager spoke of his suspicions that somebody big is messing with the market. Todd Harrison finally came out with his thoughts that he has wondered and talked about over the years with his peers. I quote again:

Something has changed with regard to the DNA of the tape. I’ve felt it for a few years but naturally assumed that I - not the tape - had shifted course. The notion that there was an unnatural tone to the market - an underlying tenor, if you will - felt like forced validation or post-rationalization. But still, it persisted. Internally at first and then in select circles.

We used to huddle in hushed tones and talk about “the invisible hand” or the “plunge protection team.” We did so for fear of being called conspiracy theorists or, worse, unpatriotic. The thought that there was a hidden force seemed bizarre. I was taught that nobody was bigger than the market. Most certainly, if there were games being played, it would eventually come out.

Still, some of the my most trusted and widely respected sources confided in me that they saw it as well. They did so in confidence as Wall Street is a small place where credibility is the gateway of continuity. I, too, held my tongue for fear of retribution or consequence. Even still, to this day, there are folks that will view this column as financial sacrilege.

So what now gives this topic license for discussion? Treasury Secretary Hank Paulson, who recently said, matter-of-factly, that there is indeed a Working Group on Financial Markets in force and at play. Further to that, he has openly held discussions with Wall Street firms and hedge fund managers in an attempt to gain leverage in the financial equation.

The market is the world’s largest thermometer and the single biggest proxy of our collective financial health. That fact isn’t lost on those that dictate our policies and they’ve been both strategic and stealth in how they’ve accomplished their directive. They’ve also been very effective.

The greatest trick the devil ever pulled was convincing the world he didn’t exist. What we must now ask ourselves is how we would live our lives - or make our financial choices - if we knew the devil of the details. Therein lies the crux of the moral hazard debate that is sweeping the Street and gaining momentum

I guess I am putting this out again to add emphasis to your argument that anything goes:

There is no escape from this: the ultimate problem we face is not peak oil, global warming, terrorism or the aging of the developed world, but an elite in politics, economics and intellectual position that is willing to impose any cost, on the future, impose any burden, on the future, fight any war, with the future's blood and money, oppose any friend, support any foe, in order to keep their addiction to the sprawlconomy going.

If Harrison is correct, these guys are willing and are in some way able to paint the tape in ways never before conceived to keep all the balls in the air. And it is working magnificently...so far.

Count up how much liquidity central banks dumped into the global markets. Realize that almost all of that went to bail out banks, and most of that is flowing into stocks and oil futures.

It's not a conspiracy if they put it on the front page of the Financial TImes.

Over at FireDogLake, Naomi Wolf is advocating monthly general strikes beginning November 6th. She has an entire checklist for how to do it. I believe we should be trumpeting this from the rooftops and participating every single month.

http://www.firedoglake.com/2007/10/25/taking-it-to-the-streets/

This is an essay I wrote on what is happening. Its conclusion may seem farfetched in the current situation, but they can only push the pendulum so far before losing control of it, and the further they've pushed it, the harder it swings back.

Revolution Happens
by John Merryman

Humanity is rapidly approaching a crossroads, where we will begin cooperating on a scale that we never have before, or we will descend into a state of warring tribes like we have never seen before. Appeals to the conscience only work on those willing to listen, while it is the less altruistic who need to pay the most attention. If there is one thing that does get people's attention, it's the money.

In 1996, Bob Dole had a campaign slogan, "We want you to keep more of your money in your pocket." The first thought to cross my mind was, 'Thank God it's not my money, or it would be worthless.' The logic of this is that the actual currency doesn't belong to the holder, only its value. The monetary system is a function of government, which in a democracy is the people. Therefore money is actually a form of public commons, similar to a public road system. Instead of transportation, it's a system of economic exchange. While you are in total possession of the section of road you're driving on, its value is due to it being connected to those everyone else is on. So is the value of the money in your pocket due to its broad interchangeability. It is not an issue of socializing wealth, but of understanding what money is to begin with. Your home, business, car, etc. are private property, but the roads linking them are not. Money is more like the public road system, than private property. It provides a broad economic connectivity, without which the economy could not function.

Money has always been a form of public utility (Render unto Caesar...), but because it evolved out of barter and for much of history was minted out of precious metals to gave it inherent value, the issue of function has been confused with the issue of possession. Now all monetary value is a matter of public trust in government accountability and this is being abused to the breaking point. It was only a generation ago that the wealth of governments were still symbolized, if not based on the gold in the treasury. For many countries, it's now how much US dollars and debt they are holding. This is not a stable situation. When the liquidity bubble does burst, faith in the concept of printed money will be shaken to its core. In order to restore faith in an invaluable economic tool, it would be useful to emphasize this public function. There is no longer a gold standard and it is the taxpayer who bears ultimate responsibility for government obligations.

Here is a little history to consider in understanding why we are where we are.

The money supply has to grow along with the economy. Inflation is caused by the supply of money growing too fast, so the law of supply and demand makes it worth less. Interest rates are raised to slow the growth of the money supply, when the economy is reaching peak potential, since the amount of money might expand faster then the economy is able to grow. During the late sixties and seventies, the money supply was allowed to grow faster then the economy in order to pay for Great Society programs, the Vietnam War and the oil crises. By the end of the seventies, inflation was spiraling out of control and Paul Volcker was given the job of taming it by raising interest rates as much as it would take to do the job. This led to a serious recession, but by 1982 inflation had peaked and he could take the pressure off.

There is a minor logical hitch to this scenario, though. By raising interest rates to the point of causing actual economic harm, he was reducing the growth of the economy and therefore the need for money. How do you reduce an oversupply, if you also reduce demand?

The Federal Reserve fine tunes the size of the money supply by buying and selling government debt. To put money into circulation, they buy government debt with fresh money and to take money out, they sell debt they are holding.

In 1980, Ronald Reagan was elected on a platform of what his primary opponent, George Bush, referred to as "Voodoo Economics," i.e. increased spending and tax cuts. The result was a serious increase in deficit spending. Now ask yourself, if the Federal Reserve sells debt to reduce the money supply, wouldn't the Treasury issuing fresh debt have the same effect? By 1982, the deficit was getting close to 200 billion and that was real money in those days. The dramatic growth in deficit spending by the US government was a significant factor in bringing inflation under control.

The borrower/producer/spender is the engine of the economy, with the saver/lender as the fuel tank. While it seems inflation is propelled by those who want to be paid more, both producers and labor, taking it out on borrowers doesn't bring supply in line with demand. Inflation is caused by the government putting too much money into circulation and the reservoir of surplus money in the economy is what is held by the saver. Earnings are taxed more then savings, so tax cuts put money into production, rather than savings. Government borrowing draws money out of savings and spends it in ways that increase and support private sector investment, through increases in services, infrastructure, security, etc. This compounds the demand for money.

At the time, economists were concerned government borrowing would crowd out the private sector, but the government issues whatever people are willing to borrow at the short term rate it sets, by buying back government debt. The problem is long term rates are set by the market and with inflation, people are more inclined to buy assets, than lend money, so the supply of money to borrow is limited and the cost , interest rates, goes up. If there is a lot of money around, but inflation isn't a concern, people lend it for whatever the market pays and long term rates go down. So the secret of our unstoppable prosperity is to have lots of money running through the system, to keep rates down and production up, but not have any start to clog the arteries and cause inflation to rise. The question is finding ever more places to invest and spend it, but the long term productivity of all this growth tends to decline. The result is fewer small business cycles in exchange for a large one.

Normally only as much money can be saved, as can be effectively invested, otherwise it causes inflation of asset prices. So where would all the money the government borrows be going, if the government didn't borrow it? The stock market? Real estate? Inflate the derivatives balloon a little more? The economy is flooded with about as much money as it can hold. If the government wasn't borrowing lots of money and recycling it through the public sector, there would be a lot less money needed all the way around and this would be inflationary. Government debt serves to support the value of the money, as well as the economy.

What will be the long term effect of this borrowing and how will it get paid down? Recently some mid-western states have sold public highways to private investors and they have been turned into toll roads. How soon until Yellowstone goes on the block? Private armies buying surplus warships? It would make sense to tax more savings from those most able to afford it, but this usually causes such people to find other ways of storing wealth. If we were to understand money as a public utility, it might better define how to manage wealth to help the larger community and environment.

In the seventies, the national economy was mostly based in the US, and inflation percolated through it, with prices and wages increasing together. Today the global economy keeps prices and wages in check, so consumer inflation is moderate, but low interest rates are creating an enormous speculative bubble among investors. Eventually it will pop and send a tidal wave of surplus money back into the regular economy, driving up prices far more then wages. Until then the gap between the rich and everyone else will continue to expand at ever increasing increasing rates, as inflated asset prices turn investment capital ever more rapidly into play money and more is needed.

In some third world countries, the politicians skim off enormous wealth, and we can see it is economically unproductive and socially destructive, yet those running our financial and industrial institutions to do the same and claim it is simply a cost of doing business. Only as much total money can be saved as can be effectively invested, otherwise it is inflationary. So these oceans of private money reduce the ability of the average person to save and invest. Endless wealth accruing to those in positions of power will eventually come to be understood as economically barbaric, and we will climb one more step up the evolutionary ladder.

Everyone needs some amount of wealth in order to both be secure and to have a commitment to the larger system. Some need more then others, like a truck needs more road then a car. Those with none have less consideration for society and are governed more by fear than respect. Those at the top need to remember that a stable society is as important to them as to everyone else. If money were thought of as a public utility, it would have definite psychological effects. People might be less inclined to define their personal ego in terms of the size of their bank account and start leaving natural wealth undisturbed, while investing more effort in their communities and environment. A healthy economy, a healthy society and a healthy environment do not have to be mutually exclusive.

Growth is bottom up, not top down, so capitalism is at its most vibrant when wealth is most evenly distributed. The problem with treating the economy like a game of Monopoly is that when one person controls everything, the game is over and you start again. In real life this stage is called revolution.

Money is a public utility, not private property. Pass it on.

http://www.exterminatingangel.com/index.php?option=com_content&task=view&id=203&Itemid=118

there will be the market choice between doing nothing and doing something political. There is, remember, a market of markets.

* By Nathan Hansen
* Columnist

NDSU

David Horowitz is campaigning for college republicans around the nation to host an event he calls “Islamo-Fascist Awareness Week.” He claims that we are forgetting the message and impact of 9/11 and that this week will give college students a better understanding of terrorism and what is at stake in the 21st century.

Actually, what he proposes sounds more like racism once you start to investigate. It seems David just couldn’t stand the fact that Americans aren’t terrified of the vague, exaggerated threat of Islam anymore and are actually starting to realize just what freedoms we have given up over the last six years.

David here would rather we focused on the evil Muslim than worry about children’s health-care or the fact that AT&T rolled over and illegally gave Bush all your phone records for the last six years.

Most awareness weeks focus on the plight of something or someone. Domestic Violence awareness week focuses on the plight of the men and women that are affected by spousal/partner abuse. Breast cancer awareness focuses on educating people on those who have suffered from breast cancer and helps people diagnose and get treatment if they get cancer someday. All of these awareness weeks focus on helping those who have suffered.

IFAW instead focuses on Muslims and the evils of Islam and tries to frighten people about the so-called “truths of Islam.” One of the points of IFAW is educating students about the “lie of peaceful Islam.” According to the briefing pamphlet, college republican groups are to debunk the myth and lie that Islam is peaceful by quoting choice excerpts of the Koran.

This of course is irrefutable proof of the evil of Islam, since if you quoted the Bible with choice excerpts you could also show how Christianity is not a religion of peace and worship of Jesus Christ. This is just a shallow and poorly hidden attempt to paint every Muslim as a terrorist and make America afraid again.

IFAW also has a list of selected documentaries that David Horowitz believes are educationally valid and factually correct. Unfortunately the networks that were going to run the documentaries pulled all of them because they were so extreme and error-ridden that if they had ran the program the network would have lost all journalistic credibility.

Instead, Horowitz wants colleges to air them and get by that whole fact versus opinion thing. “It’s always easier to make your point when you don’t have to check whether or not what you are saying is actually true,” must be a Republican motto.

Finally, IFAW adds more fuel to the fire by throwing down the gauntlet to Muslim Student Organizations. The information pamphlet on the website gives an open invitation to all Muslim Student Associations to prove that they are truly for peace with non-Muslims by condemning Islam and Islam terrorists for the violent criminals they are.

I think its just sick and disgusting that a student of Islamic faith comes to the United States for a college education and then has to somehow prove that he is not a terrorist by condemning his home country. Maybe we should make all Catholics take an oath testifying to the fact that they will not listen to the teachings of the Vatican because the Vatican is not the government of America.

Thankfully, NDSU is fair and open enough to not be celebrating this weeklong satire of open debate and awareness. The sad thing is that there are more than 200 colleges in the country that are not.

Nathan is a junior studying mathematics.

author of
WORLD WAR IV: The Long Struggle Against Islamofascism

http://en.wikipedia.org/wiki/Norman_Podhoretz

from the Asia Times

....
So, the Fed and the Treasury have all decided that they are going to set up a huge special fund, with untold billions of pretend dollars, drawing in more investors to which the banks will sell short-term paper to finance the bailout, so that the banks can trade derivatives around amongst themselves, thus establishing their "market price"! Hahaha!

Suddenly, I realize that I may be too hasty in dismissing this scheme! This remarkable idea has given me a terrific business idea! You are going to love this! You and I will go into business, see, and each of us will (believe it or not) sell dog turds back and forth to each other, priced at the same per-ounce price as gold! Hour after hour, we will busily sell them back and forth between us, you buying mine and me buying yours, thus proving that there really IS a market for dog turds, and they are provably worth their weight in gold! We, like these banks, will both make a fortune! Whee! Hahahaha!

....