Posted by: graemebird | December 27, 2009

Giant Vampire Squid/Goldman Sachs And Other Parasites.

Joe Cambria is at it again. Trying to deflect criticism of his parasitical homeys with his own brand of idiocy and illogic. Here a commenter says the following:

“Matt Taibbi of Rolling Stone aptly and memorably described Goldman Sach and its equivalents as a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” – an accurate description of neoliberalism in action.

Which you defend.”

What would your response be? Well I might try and quibble with the original idea of neoliberalism. Which I see as a great idea. Unfortunately perverted by blood-sucker centrals loyal opposition. Our neoclassical economists who are weak on government parasitism, outright toady’s and betrayers of their field of study when it comes to fractional reservist profiteers, and never saw private debt that they didn’t like. So if the poster is calling that neoliberal, then one might be forced to agree. But I suppose I’d just try and put another term to it, just to try and save confusion. Because I’m a neoliberal. But I don’t want to be associated in any way with these money-debasers, and bailed out subsidised con-artists. Who make their money off high and unstable monetary growth.

How does Cambria handle this attack on the people he looks up to like some sort of house-nigger? He makes a series of flippant deflecting statements that make almost no sense at all. He makes these statements on behalf of people that have scuttled our most important ally, which has left us open to bullying and attack in a very harsh neighbourhood. And therefore he does so on behalf of a crowd who may have helped put an end to us as a civilisation. Isn’t he angry at Goldman Sachs and the others for exposing his children to a dangerous future in this way? No you see he himself is pumped up like a great fat blood-gorged tick. So he has to assume he’s got enough escape and bribe money, and its not he who will have to stick around, and fight or accept foreign overlordship.

But what got me most is his casual dismissal of the excellent and completely accurate work of a young journalist at Rolling Stone magazine. More than any writer in the financial press, young Matt Taibbi really put the Goldman Sachs story together. Matt is a bit of a lefty of course. But he’s a good journalist. And actually he’s one of the very few good journalists his age. If you know of even one other do let me in on the secret since they are incredibly thin on the ground these days.

One had been aware of individual rorts and political abuse from Goldman Sachs and others, but few could have been expected to have had the entire story in depth. So Matt really came through for us with the context of this crowd. And what incredible wealth destroyers Goldman and the other banksters are.

Incredibly Australian governments still deal with these thieves when we don’t need to. Our Feds are consulting with these utter criminals with regards to the national broadband network. As if they cannot decide whether this is to be a socialist or crony undertaking. No good can come with inviting organised crime into the national broadcast network undertaking. Debt ought not be part of this plan. But debt and Goldman Sachs is just asking for trouble. If the NBN is to be done it must be financed out of surplus budgets.

Not only that the Queensland government have involved Rothschilds and known failures Merrill Lynch in their ludicrous privatisation. And of course these charlatans and incompetents have advised the Premier to take a path that will ruin the prospects for an expanded rail network, surely the hope of many, for the rest of this century. The advisors being idiots and thieves. Thats the end of the dream of expanding the inherently economic rail network in that state.

The above youtube of Matt Taibbi is part of a four part interview. What we see is just how superbly Taibbi has mastered the facts and has them at his fingertips. But if you want a second opinion here is the bailed out and subsidised Cambria:

“LOL.

Personally…. I would have used octopus and the better description. Squid sounds so puny in these matters.”

Brilliant financial insight.

“El Cyd… Goldman Sachs political donations have favored the Demo(lition) party in the past 20 years.

http://www.opensecrets.org/orgs/summary.php?id=D000000085

You Troll Cydney.”

This to Cambria apparently makes Goldman Sachs less of a Vampire Squid. Their contributions to the Democratic party criminals and bloodsuckers. Go figure. Or it could be Cambria simply deflecting the issue. Perhaps he is focusing on the careless implied definition of “neoclassical.” Once people start mixing up their terminology it gives people like Cambria a chance to muddy the waters further.

Anyhow you can see the bailed out and subsidised welfare-queen-Cambria’s other brilliant insights at Catallaxy. But the main point here is that the fractional reservists are much more the enemy of liberty then your average honest lefty. Even more of an implacable enemy then the bloated public service. It is the bankers we have to go after first. Then we need to try and bring debts down, then we can have hard money. Only hard money can fight the bloated government bloodsucker under democracy. Only hard money leads to sound investment and resource allocation. But hard money without earlier debt reduction leads to years of crippling economic pain. Hence the bankers have to be the first dragon to slay. Then the debt. Then we have the hard money. Only then flow the superior economic and social benefits.

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Responses

  1. I’m amazed that there isn’t a backlash on the left with the labour party dealing with organised crime in this way. One wishes the left would drop most of their pointless causes and come through for us where it really matters. Its just like Cliff Barnes always dealing with JR Ewing. Why keep dealing with someone whom you know is always going to rip you off.

    So our labour party has taken on the role of Cliff Barnes. And Goldman Sachs are far more filthy criminals then JR Ewing ever was.

  2. Excellent analysis Mr Bird.

    America today more and more resembles a plutocracy.

    NY Times, December 26, 2009
    At Tiny Rates, Saving Money Costs Investors
    By STEPHANIE STROM

    Millions of Americans are paying a high price for a safe place to put their money: extremely low interest rates on savings accounts and
    certificates of deposit.

    The elderly and others on fixed incomes have been especially hard hit.
    Many have seen returns on savings, C.D.’s and government bonds drop to
    niggling amounts recently, often costing them money once inflation, fees
    and taxes are considered.

    “Open a Savings Plus Account today and get a great rate,” read an advertisement in the Dec. 16 Newsday for Citibank, which was then offering 1.2 percent for an account. (As low as it was, the offer was good only for accounts of $25,000 and up.)

    “They’re advertising it in the papers as if they’re actually proud of that,” said Steven Weisman, a title insurance consultant in New York. “It’s a joke.”

    The advertised rate for the Savings Plus account has expired, according to the bank’s Web site; as of Friday, the account paid an interest rate
    of 0.5 percent. The bank’s highest-yield savings account, the Ultimate, was paying 1.01 percent.

    The best deal Mr. Weisman has found is 2 percent on a one-year certificate of deposit offered by ING Direct, an online bank that has
    become a bit of a darling among the fixed-income crowd.

    Interest on one- and two-year Treasury notes was just 0.40 percent and .89 percent, as of Monday. Bank of America offers 0.35 percent on a
    standard money market account with $10,000 to $25,000, and Wells Fargo will pay 0.05 percent on a basic savings account.

    Indeed, after fees are subtracted, inflation is accounted for and taxes are paid, many investors in C.D.’s, government bonds and savings and
    money market accounts are losing money. In fact, Northern Trust waived some $8 million in fees on money market accounts because they would have wiped out all interest, and then some.

    “The unemployment situation and the general downturn in the economy had an impact, but what’s going to happen now as C.D.’s mature is that retirees and the elderly are going to take anywhere from a half to three-quarters of a percent cut in their incomes,” said Joe Parks, a
    retired accountant in Houston on the advisory board of Better Investing, an organization that works to help people become savvier investors.
    “It’s a real problem.”

    Experts say risk-averse investors are effectively financing a second bailout of financial institutions, many of which have also raised fees and interest rates on credit cards.

    “What the average citizen doesn’t explicitly understand is that a significant part of the government’s plan to repair the financial system
    and the economy is to pay savers nothing and allow damaged financial institutions to earn a nice, guaranteed spread,” said William H. Gross,
    co-chief investment officer of the Pacific Investment Management Company, or Pimco. “It’s capitalism, I guess, but it’s not to be applauded.”

    Mr. Gross said he read his monthly portfolio statement twice because he could not believe that the line “Yield on cash” was 0.01 percent. At
    that rate, he said, it would take him 6,932 years to double his money.

    Many think the Federal Reserve is fueling a stock market bubble by keeping rates so low that investors decide to bet on stocks instead. Mr.
    Parks of Better Investing moved more money into the stock market early this year, when C.D.’s he held began maturing and he could not nearly recover the income they had generated by rolling them over.

    He began investing some of the money in blue chip stocks with a dividend yield of at least 3 percent and even managed to find an oil-and-gas
    limited partnership that offered 8 percent.

    Mr. Parks said, however, that he would not pursue that strategy as more of his C.D.’s matured. “What worked in the first quarter of this year isn’t as relevant, because the market has come up so much,” he said.

    No one is advising a venture into higher-risk investments. Katie Nixon, chief investment officer for the northeast region at Northern Trust,
    said that, in general, “no one should be taking risks with their pillow money.”

    “What people are paying for is safety and security,” she said, “and that’s probably just right.”

    People who rely on income from such investments for support, however, are being forced to consider new options.

    Eileen Lurie, 75, is taking out a reverse mortgage to help offset the decline in returns on her investments tied to interest rates. Reverse
    mortgages have a checkered reputation, but Ms. Lurie said her bank was going out of its way to explain the product to her.

    “These banks don’t want to be held responsible for thousands of seniors standing in bread lines,” she said.

    Such mortgages allow people who are 62 and older to convert equity in their homes into cash tax-free and without any impact on Social Security or Medicare payments. The loans are repaid after death.

    “If your assets aren’t appreciating and aren’t producing any income, you’re getting eaten up in this interest rate environment,” said Peter
    Strauss, a lawyer who advises the elderly. “A reverse mortgage is one way of making a very large asset produce income.”

    Eve Wilmore, 93, has watched returns on her C.D.’s drop to between 1 percent and 2 percent from about 5 percent a year or so ago. Yet the
    Social Security Administration recently raised her Medicare Part B premium based on those higher rates she had been earning. “I’m being hit
    from both sides,” Mrs. Wilmore said. “There’s some way I can apply for a reconsideration, and I’m going to fight it. I have to.”

    She said she was reluctant to redeploy her money into higher-risk investments. “I don’t know what my medical bills will be from here on
    in, and so I want to keep the money where I can get to it easily if I need it,” she said.

    Peter Gomori, who taught a course on money and investing for Dorot, a nonprofit that offers services for the elderly, did not advise his
    students on investment strategies but said that if he had, he would probably have told them to sit tight.

    “I know interest rates are very low for Treasury securities and bank products, but that isn’t going to be forever,” he said.

    But investment professionals doubt rates will rise any time soon — or to any level close to those before the crash.

    “What the futures market is telling me,” Mr. Gross said, “is that in April 2011, these savers that are currently earning nothing will be
    earning 1.25 percent.”

  3. Its just disgusting Sal. And once we divorce bank subsidy from monetary policy, and resolve to take the power of new money creation from the banks we find that what we want to get out of a recession is a HIGH INTEREST RATE POLICY.

    There is no doubt about this. Since to have a sustained recovery you want people putting less money into consumption and more resources being available for business.

    So the idea is to cut the banks out entirely, and create enough new cash, via debt retirement to increase business spending to at least pre-crash levels. Without interest rate subsidy to the bank interest rates may increase a great deal at first. This is a good thing and how the market would have it.

    Supposing the Feds want to give you and me and the females of my choice zero interest loans. That would not be as harmful as giving them to the banks. They are hurting everyone and the whole economy. Of course if you’ve got a mortgage on variable interest rates like me you may see your short-term interests lying in this low interest rate policy. But its a disaster for the economy. Given that there are more beneficial ways socially and economically, to increase business spending, then to just shovel cheap money, gifts and credit at your bank cronies.

    Instead of rational economic policy that reduces overall debt, we have what amounts to this organized crime cartel effectively stealing from that 93 year old lady and hurting the economy at the same time.

  4. Sal if you ever get the chance it would be really good to check whether these organised criminals are indeed involved with the NBN and alert people over at Quiggins about it. This is a guaranteed curse to the whole project. If we don’t want massive cost overuns we want to keep these thieves out of this matter. Not involve any debt in the scheme, and resolve to do the whole thing out of surpluses. Even if this means building up to it from a slower pace. If Rudd attempts to use debt, spend 47 billion, and dig every street up at once, plus alert all our suppliers that we have to get it done in 8 years, well its obvious that the costs will spiral up to the stratosphere.

    But if this projects starts off slow and grows sustainabily. If the resources are taken out of spending cuts elsewhere in government, then a well-run, debt free and more patient plan can deliver the goods more cheaply.

  5. Here is the Rudd government selling out the nation by way of lying down with organized crime. There was the possibility for this national broadband network to be a good thing. But the way Rudd is going about it, will predictably make it the worst disaster of this kind, since the Bay Of Pigs Massacre

    http://www.theaustralian.com.au/business/goldman-sachs-wins-key-role-in-43bn-broadband-project/story-e6frg8zx-1225805520476

  6. “Of course the blame for actual recent and continuing deindustrialisation that has occurred in much of the world including within the great neo-liberal hothouse itself, the US, lies not as the post ridiculously suggests with greens, but their opponents, the neoliberal perpetrators of failed and discredited economic and financial policies implicitly defended.

    Amazing twisting of the historical record.”

    Interesting comment by Pegasus at Catallaxy. I’m glad he mentioned “Financial” because thats the key here.

    The balance of payments always balances. If we borrow more than we lend we will import more than we export.

    If we persistently borrow more than we lend we will have persistent balance of payment problems. Now lets find the key kernel of truth to what pegasus is saying. And maybe he is casting too wide a net here.

    If we persistently borrow more then we lend for purely wealth creation purposes the situation would eventually correct itself. But suppose we have allowed our banks not to have a reserve asset ratio.

    Now everything changes. Our banks are no longer wealth creators. They now make their money, as time goes on more and more, through money creation and debt addiction.

    Now they keep on sidling up to the international funds market for money for liquidity problems. Not for wealth creation at all. So we get into more and more debt, our industry gets persistently hollowed out. We lose more of our manufacturing all the time. And the situation will never balance itself.

    If we keep on going the way we are going our economy will be wrecked and all our sovereignty will be gone. And our neoclassical economists are cheering this on every step of the way with the private debt.

    Whereas our Keynesians are hurting us on the public debt side. This is a bipartisan level of incompetence in economics that is just terrible.

  7. “To recap. There are absolutely zero popularisers of neo-liberal economics extant in Australia today, whether academics, media commentators, generalists, public intellectuals. No one to counter Ellis, Manne, and Mungo MacCallum, for starters, or with anything even approaching their popular readership.

    None. Nada. Zilch.”

    If this is true its got nothing to do with anything inherenly wrong with liberty in economic life. Its the fractional reservists and the corporate-subsidising cronyists that killed it.

    Its our neoclassicals that have done us in.

  8. Hi Graeme

    Everyone knows that Italian mafia plays a big role in Italian banking, business and politics. And that offshore banking havens used by most multinational companies to reduce their tax bills are also used by organised crime to launder their income.

    To what extent do you think that American and Australian banks have also been penetrated by organised crime along with major industrial sectors and even government?

  9. Certainly one would expect that in the American case it would be a big part of it. I couldn’t say to what extent here. We have seen from John Perkins how the banks are bundled up with the darker and more damaging side of US foreign policy.

    But the the thing is that its a bit funny to talk about banks being penetrated by organised crime. They are organised crime. One imagines the effort an Italian mafioso woman might muster to try and bring her mafioso kids up to be ethical kids, within the terms of the sort of skewed ethics that Cosa Nostra outfit might aspire to. She puts in all these years of love and attention, only to have her kids corrupted by the banking racketeers.

    The sheer size of these ripoffs, scams and schemes would have middle age killers running to the psychiatrist in the dozens to deal with their guilt problems. Credit default swaps. Naked Short Selling. Bank cash pyramiding. Scams, schemes and ripoffs. Payoffs and bribes or alternatively “campaign contributions”.

    Italians can be patriots like anyone else. They can feel guilt and remorse for their distress-causing Republic-smashing behaviour. Mammas don’t let your babies grow up to be bankers.

  10. That’s quite a savage and chilling summation. You’re probably right.

    Was there always something intrinsically problematic about banks? Didn’t they originate historically from the needs of rulers for funding wars of plunder? In the end aren’t banks, financial advisers, brokers, traders and the like economic parasites and mercenaries living off the results of capital accumulation without actually creating anything real?

  11. Yeah there was always a problem from the moment they started fractional reserve. And debt addiction also. Debt is obligation. Putting someone under obligation, with money you yourself have created is corrupting for society. For many reasons, not the least of which is that the new money brings no new resources. So you have raised prices (disproportionately producer prices) and used your raising of prices to make someone, often Princes and Kings, beholden to you.

    You’ve raised the asset prices and gotten the aristocracy indebted to you. If you being to fail the first thing you will do is stop lending and the money supply will start falling. Hence the aristocracy’s asset prices will collapse. Now suddenly they want to do things that will assist you. In reality it is you that is in trouble. But the bigshots perceive that it is they that are near default.

    Under this process banking and government become part of the same entity. We saw this in Florence under the Medicis. Where the Medici banking family became the defacto rulers. Under the fractional reserve they practiced there were frequent bursts of unemployment that no-one could explained. No trade unions or minimum wage in sight.

    The whole of society becomes more hateful corrupt and violent since people will not allow their morals to be compromised just for a few extra dollars in profits. But they certainly will exercise all ruthlessness to prevent from being wiped out entirely. So the era’s of fractional reserve expansion become the era’s of more violence at home and abroad, of diminished cultural progress, and of stagnating or falling real wages.

    The converse of all of this is true in the era’s of growth-deflation.

  12. “The sheer size of these ripoffs, scams and schemes would have middle age killers running to the psychiatrist in the dozens to deal with their guilt problems.”

    Guilt has funny dynamics. Not a lot of evidence guilt motivates the guilty to fess up. But you’re probably right about the psychic repercussions which play out in all sorts of nasty ways. If you’re still benefiting then usually you’re still seduced. If you’re externally challenged the tendency is to switch to denial and return fire 10-fold.

    It takes an adult to even begin to sort out what is right on an individual level. But so many people are still children. Or act like them when it comes to ethical conduct.

    • “So you have raised prices (disproportionately producer prices) and used your raising of prices to make someone, often Princes and Kings, beholden to you.”

      I get the impression that many economists wouldn’t take in the idea of the raising of producer prices as much of a big deal. In the long run its going to be a much more serious deal than the raising of consumer prices would be. This is the cost of someone going into small business. And for most people, starting with a small business is how you can go on to make a greater success of yourself down the track. If people are handicapped even by a small amount, when it comes to running their own act, then extrapolate that twenty years forward? Now we have a much bigger pool in the proletarian class. The “cascading labour model” will then have low capital investment, and barriers to certain jobs leading to a cascading effect where the labour is dirt cheap at the bottom end.

  13. where’s the new content on this site birdy?

  14. I’ve got a lot of content over at Unleashed that I may cannibalise pretty shortly. I’ve just discovered that NOAA has monopolised on the CO2 readings. And that they have been retrospectively rigging the figures.

    They are actually trying to show that the natural world discriminates between CO2 released by human action and CO2 released by all other sources. It keeps equilibrium with one of these, and skillfully allows the other sort to accumulate. In this deranged view of how the world works. Of course there is no possibility that this could be correct. But NOAA is rigging the figures in order to show just this.

  15. http://www.guardian.co.uk/books/2007/sep/29/crime.fiction

  16. Wow. Will follow it up. Thanks sal. I’ve read the first few sentences and already I’m thinking some people are just natural journalist and historians. Unfortunately many people not so gifted actually hold the jobs down and get in the way.

  17. We’ve got to read this one Birdy.

    Check the whole series of interviews.

  18. Holy moly Graeme, you’ve been busy.

    Glad you’ve found a way and a place to discuss with people your intellectual equal on the bewdiful no-looking back ABC Unleashed site.

    You go boy. Hang on to your seatbelts it’s gonna be a rollicking ride at The Drum folks now that the wondrous Graeme M Bird’s in town.

    See ya round the traps there.

    http://www.abc.net.au/unleashed/stories/s2771811.htm

  19. Oh Birdy. Watch this priceless interchange. Erika, the latest girlfriend, interviewing Ellroy.

    I get the book tonight.

    http://zocalopublicsquare.org/full_video.php?event_id=336

  20. Thanks for these links. Unfortunately I didn’t get the chance to look at them today. I’ll look at them first thing tomorrow.

  21. Professor Quiggin has approved some more of my posts. I am pleasantly surprised. This gives me a chance to correct my spelling:

    “Alice – if the infastructure is productive then it can be funded using bonds with no implications either way as to whether we also have tax rate reductions.”

    Why Terje why?

    Why give the banks a cut? Lets pay for it out of the surplus. Then the voter feels the pinch up front and the tendency is to demand more economy in government. You never seem to want to fire anyone Terje.

    But we have dozens of government departments wherein if we closed their doors and gave everyone massive tax exemption vouchers no-one would die. Yes I suppose we might miss these departments. But this willingness to go into hock is what prevents serious financial triage.
    Reconsider. Our population pyramid is overturning. Our most important ally has been scuttled and bankrupted. We don’t need any moral or financial obligations to foreigners.

    We can wean off the social security by raising the age limit one day every two. We can have 200% deductions for the businesses who employ the older guys. We can have the infrastructure, the wharves, rail and canals, that would put the Singaporeans to shame. We are Australians and we can look after our mates. But we have to exercise ruthless financial discipline here. If not financial triage.

    And this means we can have no time for bringing the finance world in to peddle obligations to people wherein it is unwise to be in their debt.

    I would also question your supply-sider view from a technical point of view. In my world it is business spending that fuels things. Not tax cuts to high-flying executives making more than 200, 000 a year. I think we move forward on retained earnings. So I’m quite happy to get rid of any taxes on retained earnings and then bring the tax free threshold straight up from the ground. I think the supply-sider moment has passed.


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