Europe Makes Obama Look Good, But That's Not The Whole Story


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    If it hadn't been in the pocket yet, Sandy cast Obama’s victory in stone (unless he really screws up Staten Island, perhaps, or Diebold goes
    [See the full post at: Europe Makes Obama Look Good, But That's Not The Whole Story]


    Europe decided against the only possible workable arrangement when it decided against a fiscal union. Then again I suppose the member countries decided against said union because it could never be workable in the first place, such as it is in the United States. At any rate it’s only a matter of time before the EU disintegrates. The only question is when? Any guesses?


    “Maybe it’s because his campaign team feel that not enough Americans could find Europe on a map even at gunpoint.”

    I have to acknowledge this comment; it made me laugh out loud and this is what I needed as I started to read another hugely appreciated Ilargi reality-blog.


    Too many things to agree with in the article to comment on. So I’ll just add some stuff of my own to it.

    According to fivethirtyeight (which has an impressive set of charts and a computerized model behind them, always something to gladden my heart) Obama has an 83% chance of winning. That first debate caused troubles, but he’s recovered since then. The guy behind the blog (Nate Silver) apparently made his bones successfully predicting outcomes in 2008.

    His deal is looking at state-by-state polls alongside overall state tendencies and folding them together with electoral college math.

    The US looks good because we’re still able to borrow & spend 1.3 trillion annually. Looking at the Fed Z1 its easy to see – even though the rate of total credit growth has slowed, we’ve still added a cool 5 trillion of net credit money since 2008, if you exclude the domestic financial sector deleveraging. My opinion: this is not a sustainable practice, but bond yields are under control at the moment. It all works until it doesn’t, as they say.

    I can’t find similar data for Spain, but just based on their government debt growth, they’re likely deflating. I’d bet their private debt growth numbers are terrible. I just wish I had the data to chart.

    My eurozone bond market stress indicator has started to nose upwards again. I’m not willing to call a trend change yet back towards crisis, but its getting there – in tandem with some recent short term US dollar strength, its possible the recent two month euro honeymoon may be coming to an end.

    Such interesting timing to have this happy euro quiet period immediately prior to the US election. It will be interesting to see what cuts loose after Nov 6.

    John Day

    I would like to say something with gravitas, but I’m drawin’ a blank. Here’s a humorous 2 minute mock political ad for Romney, that’s pretty funny. “Equal time, ya’know?


    Some more Humour


    “In almost every nook and cranny and at every step of the way, in Europe, political chaos looms just around the corner.”

    I would be suspicious anymore, if I DIDN’T hear that.


    professor –

    The whole “break everything in sight and then repair it” plan requires a whole lot of surplus energy – a fair amount for the breakage, and then a whole lot more for the repair. Given where we are in the net energy/debt situation, we might well get the breakage and then find ourselves in the unfortunate situation of being unable to afford the repair.


    Dave, as I said in an earlier comment that vaporized on hitting the submit button, you have a good point there. So, briefly, again…

    But, as Giant begins absorbing the worlds oil supply again, putting Europe on a diet, and throwing a bucket of water on China, along with steam rolling Libya to demonstrate to the remainder of the Middle east the virtues of more US Arms purchases, (Go Boeing!) for oil, of course, the geopolitics are in trend transition as well.

    Canada and Mexico must also join the oil for dollars frenzy too. Canada, especially, as it’s non energy resource markets dry up. (Wood? Mining?) And it is also on the edge of something sinister in property markets, in my op.

    I look also for a confrontation with Putin, Mr. Gasman, somewhere along an east west border. The fight over Europe’s carcass, as they slash each other up, has begun. Who will end up with the prize of having to defend that mess again for 50 years is anyone’s guess in the end. But Giant has a lot of terrorist tactics in it’s arsenal still.


    stoneleigh, for you…

    For when every resource on earth is firmly locked down in the REAL core, there in the basement of the Eccles Building on Constitution Ave.

    steve from virginia

    … and in Europe … every single day … in the month of November in the year 2012 … as in all the other months and years … 14 million barrels of crude oil are imported … from Saudi Arabia, Libya, Iraq, Russia and elsewhere … and paid for with borrowed money … These barrels are burned up for absolutely nothing … to keep the auto factories in business and the ‘entrepreneurs’ counting their money.

    In November, 2012, the Continent is hundreds of trillions of euros in debt and has nothing to show for either the debt or the wasted petroleum other than some used cars and smog. There is no means to repay or even service the debt, there is no ‘collateral’ to reclaim. Europe has made itself into a desert … for ‘fun’ and ‘convenience’ and to ‘keep up with the Yankees’.

    On one hand, the real good is obtained at highest possible cost … on the other hand, there is nothing gained from the destruction of the good except for some pointless and temporary ‘jobs’. Certainly the establishment did not expect the auto factories, dependent as they are on petroleum, to run forever, did they?

    Keynes had the better idea, pay people to dig holes, pay others to fill them up. At the end of the day there is still the dirt.

    A good pair of articles, this one and Stoneleigh’s: hers decries the failure of at-scale enterprises, this one decries the failure of (industrial) expedients.

    If the human race had a 300-year plan in … 1945 … and collective good sense, there never would have been automobiles in the first place, no auto factories, no auto jobs, none of it. The world would have the greatest bulk of its petroleum and other fossil fuels and the West would be rich rather than bankrupt.

    Over the course of 300 years someone smart enough would have figured out something to do with petroleum other than burn it. Now … nobody will get the chance.


    steve from virginia post=6012 wrote:
    Over the course of 300 years someone smart enough would have figured out something to do with petroleum other than burn it.

    Something like … plastic?: plastic? It surely seems to lasts long enough … well … err… at least until something adapts to use it as food. 😉


    Humm, maybe we could also find a better use for food, other than burn it, in caloric form? I mean, fuel is fuel, no? Sure would save a lot of oil. Oh, I forgot, we have the largest oil burning entity on earth, the Department of Defense taking care of these population issues.

    Boy’s and Girls, if I were in Europe right now, I wouldn’t be, in a New York Minute!

    I wrote half a tome on that this morning. If ya’ll want it, I’ll put it here, if not, it’s sitting in my files awaiting discovery by Janet N. up at DHS.


    Beside the well stated strong possibility of a deep recession or depression in the US (yes I feel bad for the Europeans too) is the stark fact that nearly 50% of Americans will gladly go back the the same party that so badly managed the economy under Bush. He now looks like a saint compared to the lunatics guiding the con machine. Add to that the goals of shoving their religious moral authority down our collective throats while pumping more money into the military. If Obama get re-elected the floor might crumble, if Romney get elected there will be a gaping sink hole.

    Nicole Foss

    Whomever is elected, they will likely come to regret it mightily. This has to be one of the biggest poisoned chalices there ever was. As Ilargi said, unless Diebold fraud is a significant factor, Obama should win handily. The odds of him finishing a second term politically (or perhaps physically) unscathed are not that high though. It won’t really matter who ends up in that chair. The policies are likely to be much the same and the chair-holder will be blamed for their failure. Politics is nothing more than prole-feed and misinfotainment. We only have the illusion of democracy, and it has been this way for a long time.


    Also note mentioning is that power never relinquishes power voluntarily. There are no “reverse pharaohs”, as some would like to believe, because they would not be in power anymore following an attempt to decentralize, and another will take charge of all the available reins once they become loose. It’s the way the world works, at least for the last 10,000 years or so.

    Simply as a matter of personal taste, I’d rather be ruled by a corrupt pharaoh than an idealistic one, but, as a green-slime slave, I certainly have no saying in this matter.


    stoneleigh post=6034 wrote: Politics is nothing more than prole-feed and misinfotainment. We only have the illusion of democracy, and it has been this way for a long time.

    Because we use money. (Of course, I’m open to other opinions.)

    Adam Goodwin

    Oh, good! Finally a topic I can chime in on without feeling dumb. I usually shut up when it comes to analyzing the high economy stuff–especially the deflation vs inflation debate. But having listened to Nicole’s interview on Keiser the other day, I have to say that I’m beginning to understand (and accept) the deflation argument. Thanks for the speaking quite plainly about it, Nicole!

    As for the question of politics, I agree with Ilargi’s conclusion that the presidency is not going to be a very hospitable position to hold over the next couple years. However, I think the reason that what we know as ‘politics’ now will soon devolve into something much more primitive is because it has always relied on our complacency (read consent) to function ‘correctly’. The undeniable principle that power requires consent has been used successfully by countless activists, from people you’ve heard of (Gandhi, MLK) to people you may not have heard of (Eugene Debs, Thomas, Brian Haw). I say successfully, because their disobedience of authority did not necessarily accomplish what their explicit goals were, but it inspired others to continue the tradition of disobedience.

    But just because there hasn’t been more disobedience in the past (or, at least we perceive that there hasn’t) does not mean that the principle that power requires consent does not apply. It applies all the time and in every place, it’s just a matter of whether you have the will to expose it for others to see. But if this is the case, why should we consider power to exist at all? If this consent principle is universal then it doesn’t actually exist and we have been convinced, through what Nicole aptly called infotainment, that it does. That’s the big lie.

    Further, Stephen B’s addendum that it’s because we use money is right on the mark. Money is the linchpin in centralizing human social tendencies towards the rich core, and an awesome artifice to leech energy (energy is more of an encompassing term than ‘capital’) away from society. It’s impossible for me to imagine what kind of psychopathy would be necessary to engineer an economic system like this one.

    As Nicole says when the credit system begins to unwind so will the legitimacy of centralized governance. Confidence fails systemically. But this is just a formalized way of saying that people change their minds about how to interact with each other. This changing mentality changes the way we have relationships with each other. That’s all the ‘state’ and ‘market’ are, though–human relationships formed through specific mentalities. This isn’t a difficult concept to grasp if you have control over the ideas in your mind. As the old anarchist saying goes: theory is when you have ideas, ideology is when ideas have you.


    Ah, a new President, or a renewed one;

    On the exposure of power by truth, Anthony Wiley terms it “The Internet Reformation.” (See his The Daily Bell) Consent, indeed, is the necessary ingredient to successful government control. Slowly, and one by one, folks are questioning authority. Gonna be some hard toothpaste to put back in the tube, now that it’s out.

    California’s Governor Moonbeam Brown publicly stated, all politicians are liars, that’s how they get elected. Got to thank him for that. And, really, what does a president do, especially out here in the streets? Never had one roll up his sleeves next to me, grab a shovel and help dig a foundation footing, or help pour 40 yards of concrete.

    In Lord Actons terms, power corrupts, absolute power corrupts, absolutely. We could spill things off our keyboards blaming some pol for our shortcomings, or we can, like a trail of ants when a foot is put down in their path, simply go around. Having fought a cadre of authoritarians and their labyrinthine network of regulations, rules and prohibitions most of my small business life, I learned from the ants.

    And hopefully, the day will come when big brother becomes entangled in his own web.

    Adaptability is key. And innovation. Along with dealing direct, sometimes, leaving the non producing authority middle man out of the loop.

    Consent will ultimately make one poor and leashed. Sometimes, we just have to do things that don’t conform, to get the job done. I think some self preserving local governments understand that, and know they must look the other way at times, so the producer can get the project completed, and get his tax remittance in the mail. Don’t ask me why I paid taxes, other than I felt sorry for them, always in fear of losing their jobs, knowing they would never find one in a would where they would have to produce.

    But, empire building is their nature, so why encourage them with too much consent?

    Something tells me here, when this top heavy behemoth finally inverts, we’re going to be on our own for a spell. Who knows, we might even go back to the days when the government had no money. It all belonged to the people. Back when money was real, and honest, and scarce, it was that way. And it was actually the people who employed the government, not the other way around.

    Also, anyone but me see a whole lot of Strauss and Howe Fourth Turning going on here, compounding the bad effects of world public’s and their government’s insatiable quests for the free lunch? Granted, a few of us old codgers knew better, but here we are, in the middle of it. Demographics is going to amplify this rout, I believe.

    So, I agree with stoneleigh, in that there will be hell to pay going forward. I just don’t go along with the predictability of it’s course, given knowledge of the most insane gyrations power goes into when threatened with extinction. For sure, with a military might like the present one, government which has escaped it’s reins is a booger bear of a wild card. Maybe I fear less the economic effects of three wire bales of hundred dollar bills falling from the sky, than I do having one land on me…dunno?

    John Day

    What can Obama do instead of bring on the zombie apocalypse, that we’d get with Romney?
    I guess it’ll be more reasonable incremental cutting of the social safety nets until there’s a panic of some sort and capital gains taxes have to be cut to make more 20 hr/wk jobs.
    Maybe we can have a war-against-climate-change. That would be a nice image.
    Maybe there will be a cyber attack on US banking, and all the amounts in all the accounts will be hacked, leaving the banks with all the money and no records of who it used to belong to.



    My question isn’t only what Obama can do. It’s also what Bernanke and friends now have carte blanche to do, no holds barred.

    As Hugh Hendry said, $1 trillion didn’t do it. $4.5 trillion didn’t do it. Some trillion certainly will eventually do it. Hedge accordingly. He is.

    Nicole Foss

    We seem to be seeing a buy-the-rumour-sell-the-news scenario unfolding. The markets mean business and are signalling a new round of contraction dead ahead. Obama is in the hot seat for the next four years, and there’ll be no honeymoon period this time. Sadly for him I think his whole second term will be a disaster from start to finish. I don’t blame him for it, because that would be pointless. Anyone elected in his place would have done the same and would now be facing the same fate.



    One day does not a market make. Let’s see what this looks like in a couple weeks. Stocks can be fair inflation hedges, especially in a zero interest rate world. Don’t misunderstand, I’m not invested in equities, as I don’t feed HFT robots or Goldman Sachs. I’m just looking at the confidence factor in headline indices numbers.

    The new boss here, same as the old, had every opportunity these last four years to use the Bully Pulpit to explain to the nation, and world, that we cannot go on living beyond our means, let alone by orders of magnitude. Instead, he maintained, nay, increased government spending and debt, as a solution to excessive debt spending.

    Selling junk car loans and even more sub prime loans for his banking owners. Putting half the nation on an unsustainable dole, or even into more unserviceable debt is not a panacea, it’s can kicking, as in bread and circuses.This has been no way to run a railroad.

    The man, like those several ones before him, as well as his opponent, is an empty suit. His first term was a disaster, his second will be a washout. This is all much bigger than an arrogant community organizer or an egoistical hostile takeover operator. Statesmanship is required here, and we are fresh out of that.

    First question is, do we default now, preserving some semblance of confidence in the only currency we have, or do we go all in, piling debt to the moon, until gravity brings it back to terra firma, taking the Funny Buck with it. We now have the answer. Leading to the next query, is this bigger than electronic data entry capability, before the end is reached?

    Hugh also said in that Buttonwood gathering, para ‘God is dead, we are really on our own.’ My take, “God” as metaphor for the Nanny State.


    Re.: Nanny STATE

    Lets be clear on who is getting the most and benefiting the most with the 46% overspending.

    As Karl been constantly repeating, the free shit army won again.

    (bankers, insurance, ponzi players)


    Yup, the free shit army. That’s everyone lined up at the public redistribution trough, from free iPhone takers to Goldman Sachs.

    Seems now, there are more takers than givers, so the reckoning can’t be too far off. The books will ultimately balance, if these psychopaths in power don’t open up the final nuclear frontier to distract attention from their insanity.

    Certainly, the spectacle we just witnessed in this election cycle should stir the survival instinct. We really are on our own now.

    John Day

    I think people misunderestimate Obama. I see a lot of long faces because the Fed will spend-spend-spend, as it has been doing.
    That was then. This is now.
    Obama came in promising to change everything. He betrayed his constituents, and will do so again, and this one will come fast, with the “Grand Compromise”.
    The fiscal cliff was a bipartisan creation in Summer 2011, and neither party will take credit/blame for the resultant effects. It is like a lumbering zombie. They will do whatever they have to do, but if they run away, deep austerity cuts will come to the social safety net, and everybody’s taxes will go up.
    That’s about right, isn’t it?
    The gridlock default scenario is about right, from a rational fiscal perspective, but it involves robing people of their retirements, though not right away, and it involves taxes on the rich and middle class going up to what they were under Clinton, which is less than under GHW Bush, and less than under Reagan, and so on.
    Republicrats are painted into their respective corners, and there is just one person to call “bullshit” on this.
    She just got voted into Teddy Kennedy’s seat.
    Elizabeth Warren, this is your next moment of greatness.
    Don’t fly in small planes like Paul Wellstone and John Kennedy Jr did, OK?


    Not to worry, U of M sentiment index is at a 5 year high, oil green, stocks green, 10 year T green, gold green, dollar green. Everything affected by plentiful money creation is green. Even the cash, which can’t know scarcity, green. Soon the Fed is expected to release their millions of square feet of warehoused new $100 bills, though I presume they are awaiting a “Bank Run Lite” to announce the event through a bazooka. Most likely a new $500 bill will be next project up, along with elimination of metallic junk like zinc clad coins, since they cost more to make than a C-Note.

    ‘Round town here, new cars everywhere, restaurants full, traffic heavier than ever, even at $4.20 a gallon. Per capita incomes rising (this place is 60% government). As in tri county core.

    The Savior is anointed, we are spared! Soon, the long awaited redistribution of what wealth remains will be completed, and all in the Union/Corporate/Government/Financial Quartet will be compensated for their campaign generosity, and hopefully, as per plan, may begin to “Trickle Down” a few crumbs to the rest of us.

    O Care taxes will soon rid those pesky small operators of their working capital, as a so called pinched middle class is stressed into joining the ranks of those on the dole, to profit from the largess of low income assistance measures put in place to expedite the elimination of everything “not connected,” so the Long March to progress may proceed.

    We are spared. Get out there and buy those chevy volts, and hot up the grid! Good for the Public Utility Monopolies! Got Schnieder stock? They make circuit breakers.

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