Probably most incredible is that the dollar has NOT collapsed. It has lost ground, and was trading at $1.43 per euro on Friday, but no one laughs at you when go to exchange dollars…or offer to pay in dollars rather than the local currency.

For the last 10 years, the money supply in the United States has expanded at roughly twice the rate of GDP growth. And the Fed doubled its balance sheet in just the last 18 months. This last bit of information is stunning. It took the central bank nearly 100 years to build a balance sheet of $1 trillion. Then, under the leadership of Ben Bernanke, it added another $1 trillion in just a few months.

What does that mean, exactly? It means they bought a lot of debt from US agencies and the financial sector. It means also that they “monetized” this debt…transforming it into cash by paying for it with money especially created for that purpose. It also means that the whole financial sector has a bigger financial base against which to lend. The Fed lends against its balance sheet to member banks. These banks then lend to other banks who lend to business and consumers. So the amount of potential credit – as well as the amount of actual cash – has gone up.

There is an iron law in economics. Quality and quantity vary inversely…which is another way of saying that when you add more of something…each unit is worth less than the unit that preceded it (assuming everything else remained unchanged.) Certainly, this is true of money. The more money in a financial system, the less each unit of it is worth. Add enough new money – as Zimbabwe proved recently – and each unit becomes worthless.

But so far, the dollar has not collapsed. It has fallen, but gently…

Meanwhile, the inflation rate has NOT gone up. Instead, it’s gone down. Go figure. You add that much monetary inflation and you’d expect to get a boost in the CPI. Nope. Not yet.

On the other hand, we’re already a year-and-a-half into a major recession/depression. You’d think you’d get deflation. That hasn’t happened either. Prices are down. But not as much as you’d expect, given the scale of the downturn.

Related to both the dollar and inflation is the bond market. Even more surprising is that the bond market has NOT fallen apart. Let’s see, a huge input of monetary inflation; that ought to kill the bond market. Then too, the biggest sales of Treasury bonds in history – needed to cover a $1.7 trillion deficit this year. That ought to kill the bond market too. And on top of it all is a projection from the White House telling us that the feds will add $9 trillion to US debt over the next 10 years. And that assumes a full recovery in the economy! Now, that ought to kill the bond market for sure.

Not at all! Bond yields have risen…but the 10-year T-note still only gives you 3.4%.

Of course, you say, it’s a depression. Bond yields always go down in a depression.

But if it’s a depression, how come commodities are up? And stocks are up? Above all, how come Chinese stocks are up? Everybody knows China earns its money selling products to Americans and other non-Chinese. If the rest of the world is in a depression, who is China going to sell to? How come China isn’t in a depression already? But there you are – there’s another thing that hasn’t happened. Chinese stocks haven’t collapsed.

And getting back to commodities, they’re all up. Commodity prices don’t go up in a depression; everybody knows that. They go down. But commodities are NOT in a bear market. Go figure.

And, of course, there’s gold. The metal gave up a dollar on Friday, but it’s still just $4 short of the $1,000 mark…and just a shadow below its all-time high. Gold is a commodity…but it’s also money in its purest, more reliable form. Commodities go down in a depression. Money goes up. But since gold is an alternative to paper money, it tends to go up only when paper money goes down. As explained above, the dollar has NOT collapsed. So why is gold going up? It should be going down, reflecting the effect of a recession…

There are two possible answers.

First, maybe the iron laws of economics have been repealed.

Or, second…maybe the iron laws just haven’t caught up to the market – yet.

Unemployment is at 9.7%. It will probably rise above 10% this month. The economy is supposed to be recovering. Now, The New York Times is talking about a “jobless recovery.”

You’ll remember the phrase. It came out in 2003. Then, the economy was allegedly recovering from a micro-recession. Economists were surprised that there were so few new jobs created.

What was really happening was that there was no genuine recovery. Consumers just decided to go deeper and deeper into debt – egged on by the feds. A regional governor of the Fed actually urged consumers to “go out and buy an SUV.” So Americans bought more products from the Chinese…on credit…and the Chinese enjoyed a boom.

And now the boom is over. Americans are paying down their debt. And unemployment is getting worse. This time the feds are pumping trillions into the system. This time, it’s not the consumer who is willing to go further into debt; it’s the government. And once again, few new jobs are being created.

Without jobs, the recovery is an impostor…a phony…a fraud. Without jobs, people have no extra spending power. So they can’t buy – except by going deeper into debt. They were willing to go further into debt in ’03-’07. But not this time. They’ve reached their limit on debt. Besides, with house prices falling, who would lend to them?

No new jobs = no new income. No new income = no new sales. No new sales = no new profits = no new jobs.

But what about the government? The feds are still willing to borrow. How come federal borrowing can’t create a new boom – even if it is a phony one – like the one in 2003-2007?

Federal borrowing, spending, bailouts and monetary inflation are not helping the real economy. But they are making a lot of money available for speculation. That’s why so many things are NOT happening. Investors are speculating on commodities, gold and Chinese stocks – for example. And US bonds.

But this is not a durable, reliable trend. And it’s not laying the foundation for a genuine recovery. Borrowing by the feds is different from borrowing by individuals. Private households can go broke. But they can’t take the dollar down with them. When the feds borrow, they pledge the full faith and credit of the United States – and its currency – as security. So, as they borrow more…the value of the US currency comes into doubt…then, into play…and then into jeopardy.

Investors eventually sell off dollars and US bonds…then, what should happen finally does.

Caution: what has to happen does eventually happen. But it doesn’t have to happen when you think it should. The big surprise might be how long it takes before these things happen. If we were Mr. Market, for example, we probably would not take gold much higher – not just yet. We’d let deflation take gold down for a while – long enough to separate the speculators from their money. Then, we’d let investors get used to falling prices – before bringing inflation back.

And, as promised on Friday, the answer to ‘What was the SEC doing?’

Harassing us!

Recall that last week, we reported the latest news on the SEC. Investigators wondered why the agency had let Madoff run billions in suspicious trades without ever checking them out. The SEC responded by saying it lacked sufficient resources. Then, New York Senator Schumer said he would propose a measure to increase the agency’s spending power by 75% – by allowing it to shake down the financial industry directly, rather than going to Congress for a budget allocation.

Which still leaves open the question of what the SEC was doing when it should have been making Madoff do the perp walk. We have the answer: the SEC was harassing us.

Yes, hard to believe that they would target your poor, innocent editor. And they didn’t, not directly anyway. Instead, they targeted one of our colleagues. This was a couple of years ago…when Bernie Madoff was at the top of his game.

We haven’t mentioned it in this space…on the advice of our lawyer. Judges don’t like it when you “try a case in public.” And the case still isn’t settled.

But we won’t discuss the merits of the case…only the circumstances around it.

This will help us understand what the SEC is really up to…and why the hope of regulating fraud out of existence is as vain and futile as trying to clear out a bar by using foul language.

Here’s what happened. One of our researchers discovered what he thought was a great investment opportunity. He called the target company and spoke to a VP in charge of public relations. What he heard convinced him that he was on to something, so he published a recommendation, sending a copy of it immediately to the company.

He got no response from the company. But a few months later, the SEC knocked on our door. What was their beef? That we had misled investors. How so? In our report, we told readers what the VP had told us. We carefully called it “insider” information…putting the word in quotes to let readers know it wasn’t the same as the forbidden ‘inside information.’ Anyone could have found out the same thing if he had just called the company, read the published reports, and put two and two together.

Our caution was lost on the SEC. They didn’t see the difference between “insider” information and inside information. What’s more, the fellow at the target company denied he had said what he had said. Curiously, he made no objection when the report was published; the objection came after the SEC started snooping around.

The SEC wanted blood. They thought they could get an easy win against a little guy in Baltimore. They wanted us to turn on our own associate…to stop defending him and cop a plea. Obviously, we couldn’t do that. We stood behind our man.

Then came a quirky turn of events. Both the researcher and your editor’s company were charged with what was effectively a new crime – a federal case, no less. The SEC, remember, is supposed to be protecting investors from stock fraud, manipulation, and ‘insider trading.’ But there was never any allegation of manipulating a stock or insider trading. Instead, the agency charged us with NOT having inside information. We never traded in the stock at all…or manipulated it in any way. So the feds alleged that we did not have any inside information to trade on…and that therefore our representation – of having “insider” information (in quotes!) – was a kind of fraud.

And the whole case turned on a telephone conversation between a stock market analyst and a public relations guy in a company. One said one thing; the other said another thing. Reporters make mistakes all the time; so do their sources. But this was the first time the government made a federal case out of it.

We believe our analyst. The SEC believed the other guy and spent millions trying to prove that our fellow lied. No one who bought the research report on the stock complained, let alone threatened a lawsuit. Prior to any SEC probe, refunds were issued to anyone who asked (most did not). Yet the SEC, protector of the public interest, spent years…and millions…on the case – while Bernie Madoff was stealing billions from his clients.

Case against your editor’s company: judges ruled that we were innocent.

Case against our colleague: still undecided at the appeals court.

Case against SEC: guilty of negligence, dereliction and humbug.

Until tomorrow,

Bill Bonner

Source: This Recovery is an Imposter

Source: Investment News Briefs Friday, July 10, 2009

Don’t get me wrong. Madoff himself is a despicable person. Over a twenty-year period, he created the world’s biggest Ponzi scheme worth an estimated $65 billion. Hundreds of individuals, retirees, and charities were hurt or destroyed by Madoff’s deception.

He deserved to get the maximum penalty (150 years).

Nevertheless, I look at all the positive side effects of the Madoff scandal. Here are the three most valuable lessons we can learn from the biggest crime on Wall Street in a hundred years.

Investigate before you invest

Millions have now learned a powerful investing lesson. Don’t blindly turn your hard-earned funds over to a money manager just because he promises great returns year in and year out. Be a skeptic about money managers who insist they can beat the market all the time. Make sure the manager has an independent and reliable auditor. Check the monthly statements to make sure there’s no funny business going on.

“Due diligence” finally means something again when it comes to investing.

A corollary is: Manage your own money as much as possible. Use a discount broker and select your own stocks to buy and sell. Get educated by reading books, attending seminars, subscribing to independent newsletters, and asking a lot of questions.

Take responsibility for your actions; don’t blame others for your mistakes.

If you are still uncomfortable managing your own funds, consider investing in publicly traded mutual funds with good track records that you can value daily in the newspaper or online.

Diversify, Diversify, Diversify

I really have little sympathy with individuals or charities that were wiped out by Madoff’s shenanigans. Only the greedy or stupid would invest their entire fortune or foundation’s whole endowment in a single investment.

It’s time to return to fundamentals, specifically, the “prudent man” rule that used to carry some weight on Wall Street and the New York media.

Always diversify so that no single investment can destroy your financial independence.

There is a great deal of virtue in the old proverb, “Don’t put all your eggs in one basket.” From time to time, you hear some guru suggest a modern alternative: ”Put all your eggs in one basket -and watch that basket!”

In most cases, it’s a recipe for disaster.

Sure, most entrepreneurs have made it big by concentrating in one particular business, and when they get rich, the wise ones always diversify their surplus wealth – stocks, bonds, real estate, gold, and collectibles. To invest all their wealth with one money manager or in one brokerage account, that is pure foolishness.

Don’t depend on the government to protect you

Another investing lesson that many seem to blindly ignore is that you’re on your own.

Government lawyers at the Securities and Exchange Commission (SEC) were hopelessly outwitted by Madoff’s firm. Private financial investigator Harry Markopolos warned the SEC three times about Madoff’s fraudulent activities, but Madoff got a clean bill of health from SEC investigators.

Why?

Because the SEC has a penchant to go after the little guys, such as brokers promoting penny stocks, who are usually willing to settle with a small fine, even when they are innocent. SEC agents are judged primarily by “quantitative metrics” – the number of actions it brings and cases it settles.

Last month The New York Times highlighted the incredible story of a small-time California stockbroker who was investigated by the SEC for promoting a small cap stock.

The broker refused to settle because he knew he had acted ethically within the rules, and didn’t want his good name destroyed with a “consent degree.” Even though he was repeatedly exonerated by the courts, he was left a bitter 72-year old man with $1 million in debt defending himself. “They chose me instead of Bernie Madoff,” he said, and it cost him dearly. (See the June 27, New York Times cover story, “Chasing Small Fry, SEC Let Madoff Get Away.”

On a broader more philosophical basis, the existence of the SEC creates a false sense of security, giving the illusion that somehow the public is protected by the government from frauds, deception and scandal. Now we know better.

Investors must live by the rule, “Caveat emptor.” Let the buyer beware.

Source: Three Investing Lessons from Bernie Madoff

• Declining manufacturing and construction sectors contributed tothe United Kingdom’s gross domestic product to fall by 2.4% in the first quarter, the most in more than 50 years, The New York Times reports. Citigroup Inc. (NYSE: C) economist Michael Saunders said the second quarter, which ended yesterday (Tuesday), would also probably show contraction but the recession should be nearing its end soon. Despite this, he said, “I don’t think the recovery will be strong in the U.K.”

• The hemorrhaging in the housing market is slowing as The Standard & Poor’s/Case-Shiller index of 20 major cities showed the smallest monthly decline in prices since June 2008. The index dropped by 18% in April from the year before, but for the third month in a row it was not a record decline. “It seems that some stabilization may be appearing in some of the regions,” S&P index committee Chairman David M. Blitzer told The Associated Press. A rising unemployment rate and foreclosures could halt any substantial turnaround as the number of homeowners at least two months behind or in foreclosure jumped in the first quarter from the previous quarter, the Treasury Department said yesterday (Tuesday).

• General Motors Corp. (OTC: GMGMQ) was in bankruptcy court seeking approval to sell its best assets to a new, smaller company supported by billions in government loans and unburdened by old debts. Judge Robert Gerber sorted through several motions pertaining to GM’s plan to emerge from bankruptcy as a leaner company, cutting off some arguments with “please do not duplicate any other objections,” according to an AFP report. Should the 850 objections by creditors be dismissed and GM emerges from bankruptcy, creditors can appeal.
• Fears of rising food costs were partially quelled as farmers planted an unexpectedly large crop of corn and soybeans this year, according to an Agriculture Department report. A record 77.5 million acres of soybeans were planted through June, while 87 million acres of corn were planted, up 1 million acres from last year and the second largest corn acreage in more than 60 years. The corn boost is giving new life to ethanol producers, who are slowly starting to ramp up production and look at reopening plants that were shut down last year when grain prices skyrocketed and oil prices fell, Advance Trading Inc. commodity research analyst Brian Basting told The Associated Press. “It appears to be a slow healing process” in the ethanol industry, Basting said. “We’re seeing the (profit) margins creep back into positive territory.”

• American International Group Inc. (NYSE: AIG) got a new board of government-approved directors at its annual meeting yesterday in New York, Reuters reports. The U.S. Treasury Department or the trustees overseeing the government’s stake in the company recommended the election of at least seven board members. Outgoing Chief Executive Officer Edward M. Liddy said he was confident the new board would name a new chairman and CEO. The U.S. government owns an almost 80% stake in AIG.

• Troubled Japanese chipmaker Elpida Memory Inc. has received a $1.7 billion bailout in public and private funds. The move is meant to salvage Japan’s only major maker of dynamic random access memory chips used in PCs, as well as 6,000 workers at Elpida, which suffered record losses last year when semiconductor demand went south. “It’s a fine balance,” Credit Suisse Group AG (NYSE ADR: CS) Chief Equity Strategist Shinichi Ichikawa toldThe New York Times. “Japan has decided it must save Elpida for the sake of Japanese industry,” but “going too far means keeping zombie companies alive.”

Source: Investment News Briefs Wednesday July 1, 2009

Nobody seemed particularly interested in the far greater scam being pulled off on a daily basis by the US government (a scam that, incidentally, pays for Judge Chin’s salary and Madoff’s stay in the “big house”).

But it’s clear to us here at Notes at least that the government’s $15 billion a day borrowing habit dwarfs Madoff’s $65 billion Ponzi scheme.

As of June 18 2009, total US federal debt was $11,342,734,351,973 –  or about $36,989 for every American. This represents 82.5% of one year’s worth of US economic output as measured by GDP. President Obama’s 2010 budget estimates that total debt relative to GDP will rise to 97% by 2010 and stabilize at approximately 100% thereafter.

In other words, this borrowed money cannot be paid back. It is mathematically impossible – even if income taxes rose to 100%, which itself is impossible. Just paying the $260 billion in interest owed on the national debt (just over half what the government spent on defense last year) requires further borrowing. And the more the government borrows, the more it needs to borrow to pay off the interest owed.

It’s a generational Ponzi scheme of truly epic proportions. And one as sure to end in tears as poor old Bernie Madoff’s.

We’d also love to hear from Team Obama what the difference  is between the Madoff fraud and Social Security is. The answer, of course, is coercion. This from Paul Kasriel of Northern Trust (Hat tip, The Business Insider):

Both depend, or in the case of Madoff, depended, on being able to get new contributors into the scheme in order to pay off the previous contributors. The Social Security Administration has the power of the law to force new contributors into its scheme. Madoff did not have the power of the law to force new contributors into his scheme, therefore, he has been accused of breaking the law. Just another example of how it’s good to be the king.

The mainstream media was also strangely silent yesterday on the role Wall Street insiders played in legitimizing Madoff’s scam.

Many big finance insiders knew all too well that Madoff was a crook. Madoff’s returns were simply too good to be true. That’s why they invested in him. Problem is they thought he was inside trading, not a Ponzi scheme. This from ClusterStock.com:

For years and years I’ve heard people say that [Bernie's] investment performance was too good to be true. The returns were too steady – like GE earnings under Welch – and too high given the supposed strategy.

One Madoff investor, himself a legend, told me that Madoff’s performance “just doesn’t make sense. The numbers can’t be straight.” Another sophisticated Madoff investor actually went through trade confirms in order to reverse-engineer the strategy and said, “It doesn’t add up.”

So why did these smart and skeptical investors keep investing? They, like many Madoff investors, assumed Madoff was somehow illegally trading on information from his market-making business for their benefit. They didn’t consider the possibility that he was clean on that score but running a good old-fashioned Ponzi scheme.

• A federal judge gave no leniency to convicted Ponzi schemer Bernie Madoff yesterday (Monday), sentencing him to 150 years in prison. U.S. District Judge Denny Chin described Madoff’s crime as “extraordinarily evil” and said that it was “not merely a bloodless crime that takes place on paper but one that takes a staggering human toll.” As a part of his sentence, the 71-year-old Madoff was ordered to forfeit a total of $170.8 billion which represents the total proceeds of and property involved in certain of his crimes.

• Pipeline operator Enterprise Products Partners L.P. (NYSE: EPD) will buy Teppco Partners L.P. (NYSE: TPP) for $3.3 billion, forming the biggest U.S. energy partnership, Bloomberg News reported. Teppco shareholders will get 1.24 units of Enterprise for each one they own, making the deal worth 15% more than when the initial offer was made in March. Enterprise will see the benefits of the takeover starting next year and will net a minimum of $20 million in cost savings, according to Enterprise Chief Executive Officer Michael Creel.

• Apple Inc. (Nasdaq: AAPL) Chief Executive Officer Steve Jobs returned to work as promised following a near six-month leave of absence in which he received a liver transplant. Initially, Jobs will spend a few days a week at Apple’s Cupertino, Calif. Headquarters and work the other days from home. Investors will be reassured that Jobs is back, Collins Steward Ashok Kumar told Reuters. “In many ways he’s irreplaceable,” Kumar said. “Having him back brings the halo back to the company.” Apple shares closed at $141.97 yesterday (Monday), down 0.33%.

• General Motors Corp. (OTC: GMGMQ) cut its ties to a northern California auto plant it operated with Toyota Motor Corp. (NYSE ADR: TM) since 1983, Reuters reported. The move puts into question the fate of more than 4,000 jobs at the plant that was once seen as a ground-breaking experiment in bringing production efficiencies pioneered in Japan to a U.S. workforce. “While we respect this decision by GM, the economic and business environment surrounding Toyota is also extremely severe, and so this decision by GM makes the situation even more difficult for Toyota,” Toyota said in a statement. The soon-to-be defunct Pontiac Vibe, Toyota Corolla and Matrix are manufactured at the facility.

• The U.S. Interior Department yesterday (Monday) designated roughly 670,000 acres of land as potential areas for solar energy production with the hope it will speed up the development of renewable energy resources on federal lands. “This environmentally sensitive plan will identify appropriate Interior-managed lands that have excellent solar energy potential and limited conflicts with wildlife, other natural resources or land users,” Interior Secretary Ken Salazar said in a statement. The 24 areas on the land could generate nearly 100,000 megawatts of solar electricity, the DOI said. President Barack Obama has allocated $150 billion to renewable energy investment over the next 10 years.

• Oil for August delivery rose to $2.33 to settle at $71.49 a barrel after China said it would increase oil reserves and Nigerian militants partly shut down an offshore oil platform that belongs toRoyal Dutch Shell plc (ADR NYSE: RDS.A, RDS.B), The Associated Press reports. China plans on increasing its strategic crude oil reserves by 60%, providing the market with some long-term support according to Alaron Trading Corp. analyst Phil Flynn.

• The Chinese government has stopped its metal stockpiling program, a top official told state-run Caijing Magazine. China has so far amassed 590,000 metric tons of aluminum, 159,000 tons of zinc and 235,000 tons of copper. The news could push down prices of metal in the near-term, though a stimulus-driven revival in demand could limit the fall, the report said.

Source: Investment News Briefs Tuesday, June 30, 2009

• In spite of tense geopolitical situations in the Middle East, light sweet crude for July delivery yesterday (Monday) fell $2.62, or 3.8%, to settle at $66.93 a barrel on the New York Mercantile Exchange (NYMEX). Large and violent protests in Iran over the outcome of its recent election would normally raise concerns about supply disruptions and drive up the price of oil. Instead, the market is looking past this tense backdrop in the world’s No. 4 oil producer because of a large supply worldwide, Alaron Trading energy analyst Phil Flynn told CNN Money.

• The Securities and Exchange Commission (SEC) charged a brokerage firm and several individuals with raising money from investors to feed Bernie Madoff’s Ponzi scheme. Cohmad Securities Corp., its chairman Maurice Cohn, Chief Operating Officer Marcia Cohn and representative Robert Jaffe have all been charged with securities fraud, CNN Money reports. The Cohns and Jaffe allegedly courted investors for Madoff’s grand scheme, which may get Madoff up to 150 years in prison and $170 billion in restitution.

• The chief executive officer and president of the world’s largest third-party video game publisher fired a shot over Sony Corp.’s (NYSE: SNE) bow, taking the electronics giant to task over the high price of its PlayStation 3 console and going as far to say his company may pull its support if a price drop doesn’t happen soon. Activision Blizzard Inc.’s (Nasdaq: ATVI) Bobby Kotick said his company paid Sony $500 million in royalties and other goods last year, according to the Times Online. “They have to cut the price, because if they don’t, the attach rates [the ratio of games purchased to a console] are likely to slow. If we are being realistic, we might have to stop supporting Sony,” Kotick said. “When we look at 2010 and 2011, we might want to consider if we support the console – and the [PlayStation Portable] too.” Activision is the company responsible for the some of the sector’s largest franchises including “Guitar Hero,” “Call of Duty” and the “Tony Hawk” series of skateboarding games. A loss of support from Activision would be a huge blow for Sony’s gaming arm, which lost $597 million last year. Sony’s PlayStation 3 is currently third in a three-horse video game race behind Nintendo Co. Ltd.’s (ADR OTC: NTDOY) Wii and Microsoft Corp.’s (Nasdaq: MSFT) Xbox 360.

• In a sign that may show investors have let their guard down, technology stocks have significantly outperformed the broader market, according to MarketWatch.com. Since its March low, the tech-heavy Nasdaq Composite Index is up more than 40% and nearly 13% for the year. “Technology tends to be a leader in the early stages of an economic turn.,” said Marc Pado, U.S. market strategist at Cantor Fitzgerald. “That’s what we look for as confirmation of a sustainable rally — money rotating into a sector that historically is seen as consumer- and business-sensitive, and requiring more leverage in terms of borrowed money, because it is more sensitive to the economy.” Still, Nasdaq’s notorious volatility was on display yesterday (Monday), as it fell 3.35%, more than both the Dow Jones Industrial Average and the Standard & Poor’s 500 Index.

• Restructuring costs and merchandise markdowns contributed toWalgreen Co.’s (NYSE: WAG) declining profit, which fell by 8.7% in the quarter ended May 31. The drugstore chain reported a net income of $522 million, or 53 cents per share on $16.2 billion in revenue. That compares to a net income of $572 million, or 58 cents per share on revenues of $15 billion in the same period last year. Wall Street was expecting Walgreens to earn 56 cents per share. The company’s shares closed at $29.64 yesterday (Monday), down 5.7%.

• Ford Motor Co. (NYSE: F) and General Motors’ (OTC: GMGMQ) Chevrolet division are close to eliminating a long-criticized quality gap with Toyota Motor Corp. (ADR NYSE: TM), according a closely watched J.D. Power and Associates survey. The top three spots in the survey went to luxury brands, while Chevrolet, Ford and Toyota were in what amounted to a statistical dead heat further down in the rankings, Reuters reported. “Have the leading domestic nameplates caught up with Toyota? The answer is almost,” Dave Sargent, vice president for auto research at J.D. Power said. Toyota’s Lexus brand took the top spot, while Porsche and GM’s Cadillac were Nos. 2 and 3 respectively.

Source: Investment News Briefs Tuesday, June 23, 2009

“Not exactly,” we explained. “Yes, we saw the problem coming. And we expected the government would do all the wrong things – which it has. But we never imagined that they’d do so many stupid things all at once.”

There are only two examples from modern history of depressions such as this – the ’30s in America and the ’90s in Japan. Both times, the governments did stupid things. But this time, the U.S. government has outdone them all. They’ve committed $13 trillion to programs that make no sense theoretically…and have never worked when they’ve been tried.

If you’ll recall, the dog that bit the world economy was rabid with debt. The feds are trying the old ‘hair of the dog’ technique. But they’ve rounded up every mangy cur and stray bitch in the country. And now they’re adding debt to the world economy at a much faster rate than ever in history.

Of course, as feral economists, we love it. We never thought we’d see such a thing. Gone are the mealy-mouthed reservations of cautious economists. Gone are the hesitant…hedged…halfway measures. They’re pulling out on the stops. It’s the pedal to the metal…it’s hell for leather…

What a bold experiment! What a brave undertaking! What a crackpot thing to do!

They must think the planet is under attack from aliens. It’s as if the survival of the human race were at stake. Nearly the entire output of the largest economy on the planet for an entire year – debt, not savings – is being spent to…to…to…well…to do what?

To try to stop the speculators from getting what they deserve!

But wait…it gets even madder. Of course, if you put food out in the alley, it’s bound to attract rats.

Not surprising then, that the government’s bailout cash is giving rise to an astonishing number of new fraud and money laundering accusations.

The complex nature of the bailout program makes it “inherently vulnerable to fraud, waste and abuse, including significant issues relating to conflicts of interest facing fund managers, collusion between participants, and vulnerabilities to money laundering,” says an internal government report.

“You don’t need an entirely corrupt institution to pull one of these schemes off,” said an expert. “You only need a few corrupt managers whose compensation may be tied to the performance of these assets in order to effectively pull off a collusion or a kickback scheme.”

But don’t worry. The feds are on the case. They’re said to be investigating. Just the way they did with Bernie Madoff. And who knows? Maybe the crooks will tell their families…and maybe the sons and daughters will turn them in, just like they did with Bernie.

There are always a few rotten apples in every barrel. But from here at The Daily Reckoning’s South American headquarters in Buenos Aires they all look brown to us. Even Business Week magazine opines that the whole bailout program is nothing more than a scheme to pick the pockets of the nation’s retirees in order to give the money to rich bankers.

“Monday afternoon, Goldman Sachs (NYSE:GS) reported much larger than expected first-quarter profits on the heels of the strong earnings Wells Fargo (NYSE:WFC) reported last week.

“No one should be surprised.

“The Fed has permitted the banks and financial houses to park vast sums of unmarketable paper on its books – securities made nearly worthless by the misjudgment and avarice of bankers. In return, the Fed has provided these paragons of finance with fresh, cheap funds to lend at healthy rates on credit cards, auto loans, and even mortgages.

“While the Fed cuts the banks slack, the bankers are busy turning the screws on their debtors by raising credit card rates and fees, and harassing distressed borrowers with all the zeal the Roman army displayed sacking Palestine.

“It takes good banking skills to borrow at 3%, lend at 5%, and make a profit.

It takes much less business acumen to borrow at 2%, lend at 5%, and make a profit – which is exactly what has happened. The extra fees are just gravy.

“This all comes at a cost to someone – America’s elderly.

“Many retirees depend on interest from certificates of deposit. Those rates are down dramatically and as CDs expire, retirees are compelled to reinvest their savings at lower rates and live on less income. They can take comfort that their sacrifices are helping pay off Wall Street’s losses from the lavish bonuses that were paid bankers – for example, the $70.3 million Goldman doled out to CEO Lloyd Blankfein in 2007.”

We don’t envy the feds. So many pockets to pick…so little time. Make sure you aren’t among those who find themselves bled dry by the government’s bailouts.

Now, we turn to Addison with a look at China’s recent gold accumulation:

“As we’ve been suspecting, the Chinese have been accumulating gold, slowly but surely.” Writes Addison in today’s 5 Minute Forecast. “They made the announcement this morning. Really, what would you do if you were sitting on $1.9 trillion in foreign reserves – more than half of it minted in U.S. dollars?

“The State Administration of Foreign Exchange says China’s reserves now total 1054 metric tons – up from 600 in 2003. If you’re keeping score at home, that’s a 76% increase in 5 years.

“These new numbers place China fifth among nations that disclose their gold holdings – just ahead of Switzerland.

“Given pronouncements made by premier Wen leading up to the G20 meeting last month, you can count on them to pick up a fair share of the $12 billion the International Monetary Fund (IMF) plans to sell this year.”

Each weekday, Addison brings readers The 5 Min Forecast, an executive series e-letter that provides a quick and dirty analysis of daily economic and financial developments – in five minutes or less.

And back to Bill for more memories of his Argentine adventure:

“Macho…” Jorge shouted. “Alto!”

“Macho” was not the right thing to be during the roundup season. It was like being long banks in September of 2008; you were going to get killed.

“If ever you are in the sluices,” we warned Elizabeth, “and they say ‘Alto!’ you should make a run for it.”

“Macho” means male. And on a cattle ranch, male animals are few. The ratio is one bull per 20 cows. The finest of the young males are spared…and destined to a life of procreation. The rest get sent “alto” – to the upper field…and then to the slaughterhouse (usually after being fattened up a bit before they get there).

We brought about 400 cattle over the pass from Compuel. As far as we know, only three died. One calf made it all the way to the corral down at the ranch and then fell down. We left it alone on the ground…hoping it would get back on its feet. It never did.

“There was something wrong with it before we left,” Jorge warned. The vaqueros would normally cut up a fallen calf and have it for dinner. This one, they didn’t dare eat.

The other two dead cows died of wounds inflected by the vaqueros themselves. One – a fat young black steer – was singled out of early retirement…it was the quest of honor at a barbecue at the ranch house. The other was cut up by the vaqueros and portioned out between them. We saw it when we headed back up the hill to the house at lunchtime. It was on its back and on the ground… Three vaqueros were working on it. Its hide had already been cut off. Even from the head. Otherwise, the animal was still intact. Pedro was beginning to cut the head off with a saw as we passed. Later in the day, the skinned head, with horns, sat on the wall like a devil’s head. The vaqueros made the sign of the crucifix when they walked in front of it.

Every once in a while, the bulls would begin pushing against each other. Once they got into such a squabble they broke through the main gate. Another time, a huge bull charged where we were working. All of us jumped the fence or climbed the sluice to get away. Then, we got back to work…

“Macho…alto!” “Hembra…bajo.” (Female…to the lower paddock.)

Jorge judged every animal.

As each animal got stuck in the jaws of the sepa, a whole team got to work. One of the vaqueros injected it against brucellosis. Another gave it an anti-parasite medicine.

Cosimir, a young man wearing a red trucker’s cap, put a pair of tongs in its nose and gave a tug…forcing open its mouth so we could look at the teeth.

We watched Cosimir’s face…intent on his work; each time he pulled on the tongs, his own mouth opened…his tongue went out to the side.

“Sin dientes…alto.” (No teeth…upper paddock.)

“Llena boca…bajo.” (All her teeth…lower paddock.)

Each cow was also treated to an ear tag and an earmark. Each yellow plastic tag has a number, so the animal can be identified and recorded. The tags are punctured through the ears like rings. Then, a v-shaped cut is made in the ear too – further identifying the cow as one of ours.

The cows kicked and bawled. But your editor had already closed the gate behind them. And Pedro had closed the sepa on their necks. They were stuck until we were finished with them.

Young macho calves were singled out for special torture. Once the injections had been made, ears cut and pierced, a rawhide rope was put around their necks. They were dragged into a small paddock next to the sepa. Then, they were held down by two vaqueros while the third cut off their testicles.

The first day, Edward, 15, wearing boots and a cowboy hat, learned to lasso the young calves. He was soon put to work helping Omar castrate the machos:

“I just held them down. Omar asked if I wanted to cut off their…well…you-know- what…but I didn’t want to do it. He was using a Swiss Army knife. I thought they used rubber bands. That’s what they use in France. But Omar says the rubber bands are not always successful. Sometimes they fall off. This way, there’s no doubt about it.”

Over the three days, Edward helped castrate dozens of young calves.

We finished with the cows from Compuel on the first day. By late afternoon, we were checking the horizon for signs of the second group. For while we were working on the thin cows from the high country, other vaqueros were on out the range rounding up hundreds more of them.

Towards the north, we saw a cloud of dust.

“There they are. They’ll be here in about an hour,” Jorge calculated.

It was already nearly 6:30 pm. The sun was going down. Soon, it would be dark.

“We’ll get them into the big paddock…and work on them tomorrow,” said Jorge.

The roundup lasted three long days. From sun-up to sunset, the dust rose up from the corral, along with the yells of the cowhands – including your editor’s. Without a break…the cowboys drove the cows into the sluices…the bright sun beat down…the injections…the frightened cows…the fighting bulls… By the time the sun set behind the mountain in the West, your editor was worn out. He could barely drag himself back up the hill to the ‘sala’ – the main ranch house.

But as he was going up the hill, he noticed, and not for the first time, what a beautiful place it was. It’s autumn in the Southern Hemisphere; the alamo trees have turned golden. Water is running in the streams. The grass is green. The sky is blue.

“I think what makes this place so stunning are the vivid colors,” said Elizabeth. “That…and the majesty of the setting.”

One on side, in the distance, is the snow-covered Nevada de Cachi. At the other, snow tops the Lomo de Negra too. Between them is a broad valley with cattle, vineyards, pimento, llama, barren desert, stones, cactus, and dry moonscape rock formations as well as dense, bottomland vegetation.

Source: Rabid with Debt

The former NASDAQ chairman’s December arrest – with collapsing U.S. and overseas stock markets as a backdrop – kicked up a firestorm that has forced investors to take a much-closer look at who was managing their investments. Scores of investors have lost their life savings, retirees found their nest eggs gone and countless charities discovered that they were essentially out of business; the cash that they once handed out to worthy causes had disappeared.

The scandal whipped up a flurry of investigations, and within three months, more than half a dozen others accused scammers found themselves in handcuffs, as guests of the state.

Through it all, the victims of Madoff and these other schemers have repeatedly come to one realization: This didn’t have to happen – not even to the scores of individual investors who were among the hardest-hit victims.

The best way to combat financial scams is to understand how the scammers think and to be aware of the schemes taking place.

So let’s take a look.

Scams Go Global

Scammers typically prey on the greedy, desperate and gullible. And right now, as job losses mount, retirement funds drain and the stock market falls to levels not seen in 12 years, many consumers truly are desperate right now, making them perfect targets for financial scams.

Claire Rosenzweig, president and CEO of the Better Business Bureau of Metropolitan New York told Money Morning that her NYC metro office received 60,000 complaints last year alone – many of them involving mail-order schemes or check-cashing scams.

Scams were already a worldwide problem, but have proliferated as the global financial crisis has spread, says Peter Kell, chairman of the Australasian Consumer Fraud Taskforce and deputy chairman of the Australian Competition and Consumer Commission (ACCC).  In fact, the first week of this month was named “National Consumer Fraud Week” in Australia.

“One in 20 Australians will fall victim to a scam this year, costing the community a total of more than a billion dollars,” Kell said. “Over 12 months, the ACCC has seen an alarming 60% increase in the number of complaints and inquires about scams, with a 67% increase in people reporting money lost.”

Globalization has caused the number of financial scams from overseas to multiply at a stunning rate, the U.S. State Department said in a 2007 report. And the financial gambits have literally run the gamut, ranging from Internet dating to “overpayments” for purchased products – and including such long-running standbys as inheritances from long-lost relatives, bogus fees for work permits and even money-laundering schemes.

Advances in technology – especially the Internet, and such developments as online auctions – have enabled new types of scams. Money lost in Internet crimes topped $240 million in 2007 – a $40 million increase over 2006, and a new high – the FBI and the National White Collar Crime Center reported, citing the most recent figures available.

The Most Prominent Scams Out There

By far, the No. 1 type of investor scam is the Ponzi scheme, Rosenzweig said. But scammers are running a plethora of scams out there right now. In fact, the Better Business Bureau has compiled a comprehensive list of common scams consumers need to watch out for, including:

• Ponzi or Pyramid Schemes: A promoter usually makes an unrealistic promise of future returns to get investors on board. Using their money, the promoter pays off earlier investors. The illusion continues so long as the promoter can keep bringing new investors on board. The lesson: If it sounds too good to be true, it probably is.

• Boiler Rooms: Scammers call from telephone banks (”boiler rooms”) to pitch worthless investments such as penny stocks, which are cheap to buy and that can be manipulated using the cash flows the boiler-room players are able to raise from their victims. The Lesson: Beware of cold callers.

• “Pump-and-Dump” Penny Stocks: The scammer buys up a mass of penny stocks, and then launches an all-out promoting campaign, pitching the stock to investors over the phone, Internet, and e-mail. As investors pour in and the stock price moves up, the scammer dumps his shares and collects his profit. Those sales deflate the share price, often leaving the victims with shares in a worthless shell company. (For more information, Money Morning recently published a guide to penny stock pitfalls and profits).  The Lesson: See Boiler Rooms.

• Promissory Notes: Promissory notes are investments that offer above-market, fixed returns. Some are legitimate, and some are fraudulent and worthless. The Lesson: Do your homework before you buy.

• Fraudulent Bank or Currency Investments: Investors are promised very high returns – typically well above the prevailing market returns – for investing in fraudulent bank or currency-related investments. The BBB notes that scammers used to call this a “prime bank” investment and often mentioned foreign banks that actually might not even exist. But recently, banks aren’t mentioned as often; scammers instead float the term “risk-free guaranteed high yield investment” or some variation. The Lesson: Don’t invest in something you don’t understand.

• Fake Promises of Initial Public Offerings (IPOs): With the economy sinking, IPOs are very rare. So if the chance to invest in one is offered, even the smallest bit of research will help verify if the company in question actually exists and, if it does, whether there are really plans for it to go public. The Lesson: A little “due diligence” goes a long way.

• “IRA-Approved or IRS-Approved” Investments: Bottom line, there is no such thing as IRA-approved or Internal Revenue Service (IRS)-approved investments, so avoid any and all. The Lesson: Make the phone call. If an investment is supposedly “IRS-Approved,” it would take but one phone call to the IRS (which has a “scams” section on its Web site) to discover that this is a product that doesn’t really exist.

• Investments in Fraudulent Businesses: The BBB notes these offers often involve work-at-home businesses, or the sale of vending machines, pay phones, or ATMs.

Protecting Yourself From Scams

The most at danger are new investors and seniors. Inexperienced investors are usually the most eager and open to taking risks, and scammers use that to their advantage. Many of their older counterparts have seen their life savings eviscerated and are desperately searching for an investment that will help recoup their losses.

While there are many different scams out there, nearly all can be avoided by following Rosenzweig’s advice: “If it seems too good to be true, it could be a scam.”

That’s the guiding principal of many of the following tips from the Securities and Exchange Commission (SEC), the Better Business Bureau (BBB) and the Internal Revenue Service (IRS) to avoid being the victim of an investment scam.

From the SEC and IRS:

• Use the SEC’s EDGAR Database: The SEC’s EDGAR Database is a free service where anyone can access and download audited financial statements from all U.S. companies with more than 500 investors and $10 million in net assets.

• Ask Questions: The SEC also compiled a list of 10 questions to ask both yourself and whoever is seeking your money under the guise of investment purposes. The IRS has posted an entire page of scam gambits, questions to ask, warning signals to watch for, ways to report scams, and even additional resources to check out. It’s definitely worth a look.

• Get Background on the Seller: The Financial Industry Regulatory Authority (FINRA) set up a Web site and hotline (1-800-289-9999) to check the disciplinary history of a broker or firm.

From Investment U:

Investment U, an investment newsletter that reaches hundreds of thousands of readers daily, offers “Six Simple Steps to Protect Yourself From Financial Fraud.” Consider them part of a “sniff test” to tell if something is legitimate.

• Sounds Familiar: Does it look like anything you’ve ever heard of or seen before? It’s amazing how many versions of pyramid schemes or Nigerian scams there are out there.

• Trusted Sources: Does this investment come from a trusted source? This is the hardest hurdle for most to get by. Bernie Madoff seemed to have an impeccable resume and background, and that’s why his fraud was able to remain undetected for so long (even after some folks warned that something wasn’t quite right). Do your own reference checks.

• The Pudding: As the old adage says, “the proof is in the pudding.” If you ask for performance results or documentation to back up claims, they should easily provide the information. Information should be available on a quarterly basis. Any protests or delays should serve as a red flag.

• Information Demands: If someone were to walk up to you and ask for your credit card number, you’d say no. But you’d be surprised to find out the number of people who give up sensitive information – like bank account numbers, Social Security numbers and all ors of other personal data – for an “opportunity” to collect untold millions. When someone requires something like this without a reasonable expectation, view it as a warning sign.

• Your Uncle: Imagine you had a skeptical uncle (some of us don’t have to imagine it). If you presented the opportunity to him, what would his response be? If your uncle doesn’t approve, then neither should you.

• Embarrassment: Would you have any qualms about sharing this investment with your friends and family? What about if it went badly and you suffered a major loss? Would you be embarrassed to tell others what you’d done? If that’s the case, that should tell you something.

From the Better Business Bureau:

• Buy only from licensed or credentialed financial professionals. Avoid buying investments from people who aren’t licensed to sell stocks, bonds and mutual funds.

• Review your account statements: Make sure the name of the company cashing your check matches the name on your statements. If something seems incorrect, ask questions immediately. If questions aren’t answered and complaints aren’t addressed, notify authorities.

• Make sure you are buying registered investment products: Most legitimate products have to be registered with the SEC and with the state in which they are sold. Check these both out before you buy.

• Ignore spam e-mail: E-mail filters are already sending many of these spurious “investment opportunities” to your junk/spam folder. But that doesn’t mean the ones that reach your inbox are legit. It’s best to just avoid all of these, as many link to fake Web sites and blogs set up specifically to provide false information – and to separate you from your hard-earned savings.

• Never make an investment payable to the salesperson: Always make your payment to the investment company.

Rosenzweig, the Metro New York BBB president, says “I don’t care what age you are, educate yourself about investments,” says the BBB’s Rosenzweig. “Don’t be afraid of it. I won’t say it’s easy, but there’s enough info out there that’s written for you and me – easy to digest and puts you in the position of control. Why not make good decisions?”

And if you’ve seen or been the victim of an investment scam, click here to learn how to report it to the SEC and local authorities.

Source: As Financial Scams Go Global, Here’s How to Avoid Being Stung

Editors Note: This is the sixth installment of a new series that is exploring ways for investors to recover from the U.S. financial crisis.

We’re going to take our “Crash Alert” flag down for a while. Finally, the Dow shows signs of life. We won’t know for a few days…but we’ll take a guess: the rally will continue.

Stocks in the United States have lost $11 trillion in value – more than cut in half – without a single major bounce. We expected one after Obama was elected. All we got was a 15% ricochet. Then, after he announced his major stimulus/bailout/boondoggle program…we thought, surely, stocks would rally then. Nope. Instead, globally, stocks are down 20% since Obama office.

But a rally in a bear market is one of the surest phenomena investors can count on. After so many years of rising prices – the bull market began in August 1982 – investors have learned to ‘buy the dips.’ Now, they’re looking at a Grand Canyon of a dip; many can’t help themselves. All they need is a little encouragement.

Yesterday, the encouragement came from Citigroup (NYSE:C) – which said it had made money in the first two months of ’09 – and from Ben Bernanke, who said we needed to regulate the financial sector better.

The rest of the news is terrible, awful…revolting.

Unemployment in the United States is up over 8%. A Bloomberg survey says it will go to 9.4% before the end of the year. Our own guess is that it will top 10%. By summer, one out of every ten people in the ‘workforce’ will be out of a job.

There are always some people living on the margins…hand to mouth…paycheck to paycheck. The trouble is that the margins are getting wider. “24 Million Go from Thriving to Struggling,” says a headline at USA Today. Not hard to see why. When you live from paycheck to paycheck, losing a job is a disaster. And in February alone, 651,000 jobs were lost.

Obama says he’s going to put millions to work with his spending proposals. He pointed to 60 new jobs in Maryland, on a highway-paving project:

“That’s how we’re going to get this country back on its feet,” he said.

When we lived in Maryland, the only people who worked on paving crews were immigrants from Latin America. No one else wanted the job. But maybe things have changed.

Meanwhile, Congress has gotten into the spirit of the Boondoggle Age. It sent a $410 billion spending bill to Obama for his signature. Included in the bill were 7,991 “earmarks,” or pet projects that didn’t make it into previous bailout, stimulus and boondoggles programs. Included in the spending bill, for example, is a program to pay for eyeglasses for people who are supposed to be blind…and to increase funding for Amtrak. The passenger train system has been losing money for as long as it has existed. According to classical economics (and plain good sense) Amtrak makes us all poorer. It takes valuable resources – labor, steel, electricity and so forth – and turns it into a service – transportation – which consumers judge to be worth less than the resources that went to provide it. Yet, that is the whole theory of the Obama stimulus program! Spend money on things that are unprofitable. (If they were profitable, they wouldn’t need public funding.) Somehow, wasting wealth is supposed to make us all better off.

As we think we reported yesterday, the bill for all these crisis-related boondoggles (including financial guarantees) is headed towards $12 trillion. And Paul Krugman, Nobel Prize-winning economist at the New York Times, believes even that is not enough!

“Many economists, myself included, actually argued that the plan was too small and too cautious. The latest data confirm those worries – and suggest that the Obama administration’s economic policies are already falling behind the curve.

“To see how bad the numbers are, consider this: The administration’s budget proposals, released less than two weeks ago, assumed an average unemployment rate of 8.1 percent for the whole of this year. In reality, unemployment hit that level in February – and it’s rising fast.

“Employment has already fallen more in this recession than in the 1981-82 slump, considered the worst since the Great Depression. As a result, Mr. Obama’s promise that his plan will create or save 3.5 million jobs by the end of 2010 looks underwhelming, to say the least. It’s a credible promise – his economists used solidly mainstream estimates of the impacts of tax and spending policies. But 3.5 million jobs almost two years from now isn’t enough in the face of an economy that has already lost 4.4 million jobs, and is losing 600,000 more each month.”

Yes, dear reader, looked at individually, each spending project may make us poorer – but we’ll make it up in volume!

But here at The Daily Reckoning, we always look on the bright side. Yes…you know what we think of bailouts, rescues, and stimulus packages – they’re all claptrap, eyewash and bamboozle. And they’ll delay the restructuring that the economy desperately needs. But looking at the part of the glass that is half full – at least they make it easy for us to carp and criticize.

*** Poor Bernie Madoff is going “up the river.” The expression “up the river” refers to Sing Sing Prison, 30 miles up the Hudson River from New York City.

How much time will Bernie do? “Life,” said one report. “For up to 150 years,” said another – perhaps over-optimistically.

Bernie has copped a plea. When his attorney is asked the question, he is expected to reply: “Guilty as charged.”

Meanwhile, poor Martin Armstrong rots away in a New Prison. We will tell Armstrong’s story when we have more time. It has all the ingredients for a great conspiracy story – the CIA…an omniscient computer program…money…power… you name it.

Martin Armstrong was once the highest paid economist in the United States, as head of the Princeton Economics. At least, that’s what the papers said. He developed an elaborate cycle theory, which was said to predict major market turns. Now, poor Martin is a convict…serving out a five-year sentence, after having spent eight years in jail for contempt of court, on charges related to an alleged Ponzi scheme. “Alleged” is an important word, because Armstrong was never tried or convicted on the original charges. But we’ll leave that for another time….

Even from his jail cell, Armstrong still keeps up with the economy. His 8.7-year cycle theory predicted a downturn would begin in the summer of ’07 – which it did. But now…get this…he says the recession will last for 23-26 years! Why so long? Because the feds won’t allow the economy to heal itself, he says.

We don’t know if he’ll be right or wrong. But it is a shame to keep people like Armstrong and Madoff in prison – at taxpayer expense. Both could make valuable contributions to society in order to compensate for their alleged crimes.

We have previous suggested that Madoff be tapped for Secretary of the Treasury. The United States is running the biggest Ponzi scheme of all time, paying off old loans by taking out new ones. Why not let a real pro run the program?

And surely some under-secretary post could be found for Armstrong. In the news over the weekend came word that Geithner was working ‘night and day’…and alone. He is supposed to have a full complement of hacks and functionaries to help him; but they haven’t been appointed or approved yet. So Geithner sits at his desk and talks to himself. What a pity! Destroying a major economy is not a job for a single man. Even Alan Greenspan had a crew of apparatchiks to help.

Free Madoff! Free Armstrong! Let the pros do the job!

Source: A Bear Market Rally?