Author Archives: Lila

UK Banks Now Owned By Government

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The public’s portfolio

What the taxpayer owns

Northern Rock – 100% state owned

Bradford & Bingley – mortgage book worth £50 billion

Royal Bank of Scotland – 75% of voting shares

Lloyds Banking Group (including HBOS)– up to 77% of voting shares

HSBC, Barclays, Abbey National and Nationwide are the main high street institutions still in private hands

How yesterday’s Lloyds deal hands us the keys to British business

Both Lloyds and HBOS have been very acquisitive in private equity investment over the past decade, entering into partnerships which mean they part-own – or rather, we do – a string of household names.

They include: House of Fraser, department stores McCarthy & Stone, housebuilder HSS Hire, tool hire chain Vue, cinema chain Crest Nicholson, housebuilder Alternative Hotel Group MacDonald Hotels David Lloyd Leisure, fitness clubs American Golf, sports goods St Tropez, beauty products Robinia, specialist care homes Leasedrive Velo, car fleet hire Kidsunlimited, day nurseries British Salt, salt products producer Snell & Wilcox, broadcasting technology GVA Grimley, property consultant

 Times Online

Leave the Police State While You Can…

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“Some time between 9/11 and now America became a police state. I cannot pinpoint the tipping point because the last several years are a blur of laws and policies that were passed so quickly and in such volume that no one could track them, let alone provide analysis. Even lawmakers didn’t read what they were passing. Moreover, I am not sure how to define “a police state” as opposedto a quasi one…so pinpointing is a term of accuracy that doesn’t apply. But, like pornography, I know a police state when I see it and I see everytime I glance State-side. And the collapse of the American dollar has not even occurred yet. When that happens — and it will be as swift as the mortgage collapse — the fear and panic generated could well allow/encourage the establishment of one of the worst totalitarian states the world has seen in a developed nation.

People who value their freedom and safety should leave…if possible. Having said this, I cannot fault those who stay to be near family and friends or a business that took a decade to establish. Nor can I blame anyone who says “Hell, no!” and draws a line against surrending their freedom on the soil of their birth. Hell, I have all those urges warring within me. But I don’t think it is wise to heed them. I think it is wise to GET OUT and fight for freedom from comparative safety. Get your assets out, get your family out, get your body out of the reach of the United States government. ….”

Wendy McElroy, “Leave the police state that is America” via Sunni Maravillosa

On the Brink: How Bad Is Bad?

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From Karl Denninger:

  • All pension funds, private and public, are done. If you are receiving one, you won’t be. If you think you will in the future, you won’t be. PBGC will fail as well. Pension funds will be forced to start eating their “seed corn” within the next 12 months and once that begins there is no way to recover.
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  • All annuities will be defaulted to the state insurance protection (if any) on them. The state insurance funds will be bankrupted and unable to be replenished. Essentially, all annuities are toast. Expect zero, be ecstatic if you do better. All insurance companies with material exposure to these obligations will go bankrupt, without exception. Some of these firms are dangerously close to this happening right here and now; the rest will die within the next 6-12 months. If you have other insured interests with these firms, be prepared to pay a LOT more with a new company that can’t earn anything off investments, and if you have a claim in process at the time it happens, it won’t get paid. The probability of you getting “boned” on any transaction with an insurance company is extremely high – I rate this risk in excess of 90%.
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  • The FDIC will be unable to cover bank failure obligations. They will attempt to do more of what they’re doing now (raising insurance rates and doing special assessments) but will fail; the current path has no chance of success. Congress will backstop them (because they must lest shotguns come out) with disastrous results. In short, FDIC backstops will take precedence even over Social Security and Medicare.
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  • Government debt costs will ramp. This warning has already been issued and is being ignored by President Obama. When (not if) it happens debt-based Federal Funding will disappear. This leads to…
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  • Tax receipts are cratering and will continue to. I expect total tax receipts to fall to under $1 trillion within the next 12 months. Combined with the impossibility of continued debt issue (rollover will only remain possible at the short duration Treasury has committed to over the last ten years if they cease new issue) a 66% cut in the Federal Budget will become necessary. This will require a complete repudiation of Social Security, Medicare and Medicaid, a 50% cut in the military budget and a 50% across-the-board cut in all other federal programs. That will likely get close.
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  • Tax-deferred accounts will be seized to fund rollovers of Treasury debt at essentially zero coupon (interest). If you have a 401k, or what’s left of it, or an IRA, consider it locked up in Treasuries; it’s not yours any more. Count on this happening – it is essentially a certainty.
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  • Any firm with debt outstanding is currently presumed dead as the street presumption is that they have lied in some way. Expect at least 20% of the S&P 500 to fail within 12 months as a consequence of the complete and total lockup of all credit markets which The Fed will be unable to unlock or backstop. This will in turn lead to…
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  • The unemployed will have 5-10 million in direct layoffs added within the next 12 months. Collateral damage (suppliers, customers, etc) will add at least another 5-10 million workers to that, perhaps double that many. U-3 (official unemployment rate) will go beyond 15%, U-6 (broad form) will reach 30%.
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  • Civil unrest will break out before the end of the year. The Military and Guard will be called up to try to stop it. They won’t be able to. Big cities are at risk of becoming a free-fire death zone. If you live in one, figure out how you can get out and live somewhere else if you detect signs that yours is starting to go “feral” – witness New Orleans after Katrina for how fast, and how bad, it can get.

Obama Backs Off From Holder’s Remarks

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“One post, by Stephan Tawney on the American Pundit blog, said that “our attorney general is black, both major parties are led by black men, the president is black.”

“And yet,” Tawney wrote, “we’re apparently a ‘nation of cowards’ on race.”

Obama was asked whether he agreed with Holder. He hesitated for five seconds before responding.

“I’m not somebody who believes that constantly talking about race somehow solves racial tensions,” Obama said. “I think what solves racial tensions is fixing the economy, putting people to work, making sure that people have health care, ensuring that every kid is learning out there. I think if we do that, then we’ll probably have more fruitful conversations.”

That’s from  the International Herald Tribune.

Comment:

Nice to hear that President Obama agrees with the Mind-Body Politic.

But then again, we have a strange and well-documented way of being a wee bit ahead on a few things (check out the tab ‘articles’). And on that note of unbecoming self-satisfaction, I will return to my labors tweaking this blog.

Libertarian Living: Facing the Starch Facts

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“People should be thought of as “starch-eaters;” just like cats are “meat-eaters.” Until recently, except for a small number of wealthy aristocrats, members of the human species have obtained the bulk of their calories from starch. After the mid 1800s with the creation of colossal wealth during the industrial revolution and the harnessing of fossil fuels, millions, and then billions, of people were able to eat from a table piled high with meat, fowl, and dairy, once available only to royalty. Look around you – the consequences are obvious – everyday people appear rotund like the kings and queens pictured in old paintings. Look a little further and you will discover the Starch Solution……

Tubers (potatoes, sweet potato, cassava), winter squashes (pumpkin, butternut, hubbard), legumes (beans, peas, lentils), and grains (barley, corn, rice, wheat) serve as organs for storing starch. Green and yellow vegetables, such as broccoli, cauliflower, and asparagus, accumulate relatively little starch, and fruits are made up of simple sugars, not complex ones. All animal foods, including beef, chicken, fish, shellfish, eggs, milk, and cheese, contain no starch at all.

While easily providing the abundance of calories needed for winning marathons, starches do not promote excess weight gain. That is because the human body efficiently regulates carbohydrates from starches, burning them off, rather than storing them, when consumed in excess. How effective is our body’s regulation? Obesity has been unknown among billions of Asians with a wide variety of activity levels who have followed traditional diets based on rice. However, these people’s immunity immediately disappears when they switch to meals based on meat and dairy foods, because the human body unsuccessfully balances for excess fat consumption – storing these calories in the abdomen, buttocks, and thighs. The fat you eat is the fat you wear…”

More by John McDougall

Remember that Old Coot Ron Paul Whom We Laughed At?

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“Paul was on Bloomberg TV on Wednesday, and he absolutely amazed the reporters by patiently explaining that we got into this national financial whirlpool by spending too much government money, and so the solution was probably not to spend even more government money. Ever heard anything so wacky?

You can listen for yourself on the video below. But in a nutshell, here’s the craziness Paul peddles: “We should be cutting spending. We should be trying to live within our means and not just try to spend our way out of a recession that was brought upon us by too much spending and too much borrowing and too much printing-press money…..”

That crazy loon….

More here.

Billionaire Bail-Out: The Goldman Touch at Work Again

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NEW YORK (Reuters) – Such firms as Goldman Sachs Group Inc and Morgan Stanley were among the financial institutions that received payouts from American International Group Inc since the Federal Reserve first began to aid AIG, according to the Wall Street Journal.

Citing a confidential document and people familiar with the matter, the Journal said AIG paid at least two dozen U.S. and foreign financial institutions about $50 billion.

Goldman received about $6 billion, as did Germany’s Deutsche Bank AG ….

From Reuters, March 6, 2009

Comment:

It’s commentators who drive the important stories now. That includes, yes, people like yours truly (no room for humility here).

Example:

Back in 2005 and 2006, when I was I reading through comments on trader forums, I realized they had a better sense of how things were manipulated than the big name financial press.  I read Lisa Endlich’s book about Goldman Sachs, which is a rather drab book as far as real insider information goes, but it does tell you the main plot. And that stinks.  GS’s been pulling strings and rigging things in its favor for decades.  They have a history of really dreadful corruption.  I wrote several pieces for the alternative press and one for a financial magazine on Goldman. But no one took up the theme…

Based on what I’d figured out about who the players were and what they were looking for (a power grab), I called a double-top of the market in March 2007 and I warned of  imminent trouble in a piece on Malcolm Gladwell in April 2007.  Gladwell’s article (see my piece, “Bunk: The Art of Writing without Thinking”) seemed like he was testing the wind for something big. The crash came soon after.  There was a small crack (Northern Rock) three months later,  and then a  full-scale avalanche  six months later….

Mobs, Messiahs, and Markets (Wiley, August 2007) came out exactly in time and correctly described the history and mechanism of the crash.

Not too shabby for an ex-school-teacher, sometime pianist, and amateur trader typing with three fingers (not to slight my esteemed co-author in any way; he was, obviously, the star of the production)…

Forgive my childish glee at being right about something so horrible.  (I lost money over it too and stand to lose even more).  I guess it’s like a pathologist who finds a particularly horrible type of bacillus. He ought to be upset. But if he’s any kind of pathologist, he probably feels a kind of triumph….almost an aesthetic joy…

It may be a hideous germ, but it’s his germ…he caught it.

He added a piece to the puzzle.

Whoever said human beings were completely rational creatures?

Madoff Ready to Plead Guilty; $1 billion recovered

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On the Madoff front:

“Madoff has already begun relinquishing his assets, something he might not do if he planned to fight the charges.

He already has surrendered rights to his business and any of the assets held by the business. A trustee overseeing his assets said he has identified nearly $1 billion in assets that are available to reimburse investors who have lost money over the last five decades.

Shortly after his arrest, Madoff offered to relinquish many of his and his wife’s assets, including properties in Palm Beach and France, as well as his boats and cars.

The lawyers, however, have indicated in court documents that Madoff’s $7 million Manhattan penthouse and an additional $62 million in assets should not be taken from the family because they are in his wife’s name and did not result from any alleged fraud.”

More at Associated Press.

GenV Entrepreneurs Light Up Indian Village

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“One of the biggest problems faced by Indian villages is scarce electricity to power light bulbs. Electricity is provided only for a very few hours and only during day time. Hence, children are unable to study at night and have to resort to using lanterns, which can contribute to pollution related ailments.

To provide a solution, we came up with an idea of using tractor batteries as an energy source to light 9-12W CFLs. At night, the tractors are not used and they can be used to light CFLs.

One-twelfth of the battery is consumed to use 1 CFL for 4 hours. The tractor’s battery then gets recharged during day time when it runs on the fields or is used for other agricultural purposes. Thus, the net is that we are not consuming any additional power to light up the CFLs on the days that the tractor is used.

We implemented this idea successfully in 17 homes in our village and this was of great help to the students. The whole setup cost was INR 135 (for wires, DC CFL and circuit board).

The advantages of this system are:

  1. Reduction of pollution by using CFLs instead of bulbs and lanterns: 240,000 liters of CO2 per month and 2,450,000 kJ of heat per month.
  2. Improvement in academic performance of students.
  3. Better health for users by reducing Asthma, ENT and Eye problems.
  4. Cost Savings for farmers and rural students, and for the Government.
  5. Increased lifespan of tractor battery.”

Shailesh Upadhyay and Ujala Shankar
More here at GenV Campaigns.