Vomitous*

That adjective perfectly fits the Davos World Economic Forum. I'm listening to interviews of some of its participants on Blabberg this morning. Such blather ! These certified members of the ruling classes [aka the rich & powerful] don't know anything about fields beyond their own expertise or nor anything about the lives and difficulties of the common man, yet pontificate about how the world should be run and how the lives of the common man should be ruled. By who ? Them.

They blab about bubbles. What is the one bubble rarely mentioned ? The huge flow of money from the rich to hedge funds that play trading games and disturb real economic funds flows. Do they discuss how to burst that bubble ? Nope. Why ? Because most of the participants invest in hedge funds. Or run hedge funds. Or their pals runs hedge funds.

What is the single biggest risk in the world financial markets ? Credit default swaps. ["CDS"] Those "weapons of mass destruction" permit hedge funds to speculate cheaply in the credit of many, many corporations and nations. Those also create dangerous interconnections among financial institutions that can drag the entire system down if a single large institution messes up. Who is talking about banning those ? Few. There's moi [me] and David Einhorn, the fellow who correctly analysed and anticipated the Lehman debacle. Maybe Warrren Buffet. Why ? The ruling classes like the turmoil and their hedge fund investments make money for them. AIG was a credit default swap blow-up. That should be enough to make one realize those instruments should be banned. (I'd settle for requiring 100% cash collateral for anyone writing a CDS).

Turmoil gives the ruling classes power. That's how many aristocracies were created in medieval times. The common man was forced to become a serf to buy "protection" from armed, wealthy tribal chiefs because of fear of raids and assaults. Over time, those aristocracies then gained more and more powerful from the central government and eventually destroyed the nations.

Today the lobbyists of the ruling classes are working hard in DC and the capitals of Europe to get more power over our lives and perpetuate their positions. Davos is one place they coordinate ideas and tactics. That place should be seeing huge demonstrations from the angry public. Instead, the press fawns over their access to the bosses. It's sickening and I annually, publicly rant about how I despise that forum.

Davos is strictly for the vomitorium.

Lending

Blabberg says banks aren't lending. True. But those airheads don't think why. Banks prefer to speculate or own in securities. That's where the money is going. Why ? Because their trading desks can make money AND because the regulatory rules favor securities. If a bank had to put up more Tier 1 capital to own securities - which would help underwrite the huge market value risks in them - they would shift assets towards loans they can manage better.

Of course, governments like banks to buy their debt .. as securities. Sheesh, soooo much of public comment is sheer propaganda, it's infuriating at times.

Bernanke

I support his confirmation. Battleship Ben was one crucial force in preventing a global depression. True, he was a bit slow, as readers of this blog know. But like big, slow battleships, once his salvos got going, he crushed the forces of darkness.

Besides, since he's been doing what I write for about 2.5 years, how can I complain ? He's obviously a loyal reader now ;-)

Markets

Back to my old, seven language state:
Je ne fais rien.
Ich machte nichts.
Nic nie robię.
Estoy haciendo nada.
Non faccio nulla.
Nihil facio.
I am doing nothing.

Word of the Day

"Vomitous" - adjective [$100]
Vomitous means 1. of, pertaining to, or causing vomiting; 2. (informal) repugnant, disgusting, nauseating [e. g. vomitous business methods].
Sentence: Annually viewers of the financial media are subjected to vomitous reports from Davos, as the fawning press propagates the propaganda of the ruling classes as they seek more power over the common man.