Bend Finally Get's It's Perp Walk

I don't know about you, but I'm just about to pee myself with excitement over the Tami Sawyer perp walk!

I mean, how long have we been waiting for this? Years? For an honest-to-God, real Bend realtor to give us the walk of shame we've been waiting for? Seems like forever.

But, unless Sawyer gives up the ghost between now & Nov 6, she'll be going to do some time in the pokey for not telling Judge Stranglenuts where she put kindly old Doc Redwine's retirement money.

Of course, both Sawyer and hubby both think they are above the law, since they got bigger fish to fry with the FBI. Hmmm... that ain't right either. They ARE the bigger fish to fry, and they are going to get cooked by the FBI.

They think that gives them special rights, like telling Stranglenuts & Red-whine that they ain't gonna help them get their cash back.

And of course, Sawyer's lawyer probably convinced them they'd never serve a minute in the old Corn Chute Parade Of Assshole Wideners.

So wait for it folks... by next Sat. We might get our long-awaited Perp.

OK, moving on from Tami Sawyers inevitable ass-reaming in prison....

I keep trying to find people who are as worried about what is going on as I am.

It is clear to me that the US has taken the "No Pain" exit-strategy from our already fleeting Great Recession. This is that strategy in a nutshell:

Despite the fact that DEBT was the Root Cause of what is pretty much acknowledged as the worst economic meltdown in a generation, we have taken the following remedial actions:

1) Cash for Clunkers: A failed program, that cost far more on a per-vehicle basis than anyone is willing to admit, and did almost nothing except make it's participants more indebted than they were before.

2) $8,000 tax credit to home buyers. This program is the most insidious of all. It's plays on peoples ignorance in thinking that they are getting a good deal, when really they are just indebting themselves to buy a house that has had it's price artificially inflated by the credit they are receiving.

3) The vast billions spent on "job-creation". Wow. This one is just mind-boggling in it's scale. What is happening on this one is so incredible, it deserves a little expansion...

See... they are counting every single person who even receives a nickel from the Obamanator Largess, as a "new job".

Doesn't matter what they do or for how long, it's a "job".

And the shysters getting the money, are almost certainly being encouraged to "shade the truth" about everything having to do with dispensing this money.

So what is really happening, is plain to see: There's a terrible overcounting of the "benefits"of the Obama-Jeebus's turning water to wine going on.

We're spending trillions -- TRILLIONS -- on fake jobs that don't even exist.

Since the jobs are fake, you can bet your ass the "Recovery" is fake.

We are simply experiencing the effects of a "Bloody Mary" recovery; a quick jolt of that which ails ye. A shot-glass of trillions that we are borrowing from ourselves (well... our kids), so that we might put off our ills just one more day.

Here's a quick eye-opener from my best-est politico buddy, Ron Paul:

Be Prepared for the Worst

The large-scale government intervention in the economy is going to end badly.

Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession.

A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble.

Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan's excessively low interest rates: the housing bubble, the explosion of subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions. Rather than allow the market to correct itself and clear away the worst excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.

This is nothing less than the creation of another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble's collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been. Even with the massive interventions, unemployment is near 10% and likely to increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve's balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?

What is more likely happening is a repeat of the Great Depression. We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years. As the housing market fails to return to any sense of normalcy, commercial real estate begins to collapse and manufacturers produce goods that cannot be purchased by debt-strapped consumers, the economy will falter. That will go on until we come to our senses and end this wasteful government spending.

Government intervention cannot lead to economic growth. Where does the money come from for Tarp (Treasury's program to buy bad bank paper), the stimulus handouts and the cash for clunkers? It can come only from taxpayers, from sales of Treasury debt or through the printing of new money. Paying for these programs out of tax revenues is pure redistribution; it takes money out of one person's pocket and gives it to someone else without creating any new wealth. Besides, tax revenues have fallen drastically as unemployment has risen, yet government spending continues to increase. As for Treasury debt, the Chinese and other foreign investors are more and more reluctant to buy it, denominated as it is in depreciating dollars.

The only remaining option is to have the Fed create new money out of thin air. This is inflation. Higher prices lead to a devalued dollar and a lower standard of living for Americans. The Fed has already overseen a 95% loss in the dollar's purchasing power since 1913. If we do not stop this profligate spending soon, we risk hyperinflation and seeing a 95% devaluation every year.

First, you just gotta love this guy. No one in DC cuts through the bullshit like Ron Paul.

And you might be wondering what he means by this:

Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate.

What bubble? Hey, I don't see no bubble! There's no bubble. Right?

Oh yes, there is an enormous bubble right before our eyes. It's called this (fake) Recovery.

It's this Bloody Mary hangover cure.

And it cannot end well. There are two end-game scenarios, and both end badly.

In the first, you have to imagine that our economy is like a big bathtub. Usually, it's nice, full and soaky-warm, everyone just having a good old time.

Now sometimes, Mean Old Mr Recession comes along, and starts to drain the tub.

Well, that's when Supermen from the old Fed come along, and put a spigot right over the tub, and start to fill the tub at --hopefully-- the same rate that water is being drained.

And that is what Superman Bernanke-Span has been doing for lo these many years.

Except in the past the spigot was your garden-variety water hose. And our Supermen have been able to shut off the water just in time to keep the warm, happy tub from overflowing... cuz this means something actually worse than sitting cold in an empty tub: It means people start drowning of INFLATION! Oh no!

But in the past, due to a number of factors, not the least of which was Chinese-fueled deflation, the monster of inflation has been pretty easily avoided.

But this time is different: the drain that opened up wasn't the usual inch or two in diameter. No, it was like the entire bottom of the tub opened up. Water didn't really "drain" out; it fell out. One second it was there, and the next it was gone.

THIS is what all the talk was about our economy "collapsing" last Fall. It wasn't getting "uncomfy" in the tub... it looked like the tub itself was going away.

But our Supermen have rushed to action to do what they always have: Keep the tub full.

But what's different this time is the size of the spigot. It's not a garden hose. It's an enormous pipe.

Bernanke's Enormous Pipe

But the problem with trying to keep the tub full with such a giant pipe, is exactly what Ron Paul says it is Runaway inflation.

Not wimpy, 4-5% inflation. But real-economy-wrecking inflation.

Cuz all it's going to take is for the drain to close even a little, Bernanke to miss the signs, keep the pipe open just a hair too long, and the tub goes from empty to overflowing all over the place, and people drowning.

This is actually the worst case scenario. One that Ron Paul thinks is inevitable. I happen to mostly agree, and think it is highly likely.

The second "Good News" scenario, is that Bernanke Get's It Right.

He turns off the gigantic spigot just in time when the drain closes up.

But the problem is that All That Water comes at a price. And the price is that all future tubby-time is a little more empty. More succinctly, we are draining future growth, so that we do not have to suffer today.

The trillions we are spending today HAVE TO be repaid one way or another. We are "investing" them today in an attempt to have the payoff tomorrow be large enough to make the payments. If the jobs created today create enough of a tax-base tomorrow, we'll be OK.

But as I said earlier, and as the Bully as much as admitted yesterday, we're wildly over-counting the job creation. The costs per job are far higher than Obama-Jeebus or anyone else will admit.

Just like everything else in this "recovery". It's fake. The cost per job is far higher than anyone admits, the cost per car sold under Cash-for-Crushers is far higher than anyone is admitting.

And Yes, the prices being paid for homes in the $8,000 tax credit regime are higher than they should be.

And we have a good predicting omen for what will happen when all the fakery stops... just look at Cash-for-Crushers: demand 100% evaporated.

We were sold the idea that somehow C4C would somehow "ignite" a New Age of Automobile buying that would last forever. GM would be fine. Chrysler would be fine. You would be fine. I would be fine.

No.

No, all they did was spend a ridiculous amount to get a very few incremental sales TODAY... AND FUCK TOMORROW.

THAT is what happened.

And it wasn't long before people realized this:

Lithia Motors (LAD), 1 yr

I, for one, barely dodged a bullet on this one. Since I sold LAD at $16 and change, it has fallen off a cliff, for almost a cut in half.

THIS, though, is what we should expect post-stimulus: When and if they discontinue the $8,000 tax credit for home buyers, we should expect a post-stim hangover... DUH!

What if they don't stop it?

Then it just becomes a permanent built-in part of the price.

So... what is that called when prices just go up forever?

Right. Inflation.

And so that brings a third scenario: STAGFLATION.

Not only could we have prices that go through the roof, as Ron Paul postulates, we could have little to no growth for a generation.

WHAT does this sort of scenario look like?

Zimbabwe.

OK, to finish off this week, I guess I want to address the idea that I am a big stock-broker type... or other such bullshit.

OK, I'm not. I'm just a working dude. I do have a business degree that probably "went to far" for it's own good.

So I'm intersted in stocks, they always seem to be the Canary In The Coal Mine with respect to the larger economic picture.

Plus, I do have my pittance of a retirement fund in and out of stocks (and rarely, bonds) as I see fit.

And as I said over the past year, I went from long-on-the-sidelines, to all-in late last fall.

And people, I can tell you it was harrowing.

There was a stretch when I mentally walked away from ALL of my retirement money. It was THAT gone.

Mercifully, Obama-Jeebus & Bernanke-Span have swooped to the rescue of their Wall St brethren. Thank God. As a side-effect, I was also largely spared.

So I managed to escape this past years investment debacle pretty much unscathed.

BUT, like most things in my life, the Real Gain was the lessons learned.

One, I tried to Catch Falling Knives again. I well and truly got stabbed on most of these.

All the gains of Lithia... well, they went to cover the heinous losses of now-bankrupt Monaco Coach & Fleetwood.

And I fully understand that Lithia itself was the one instance where I did catch the knife... but just barely.

Lesson 2: This thing ain't like the others.

This time IS different. It really is. This is The Black Swan of our lives. This IS The Big One.

It's going to end badly. Again.

The ARM resets are coming. The bank failures are coming. The rising tide of unemployment is coming. The government debt crisis is coming. And the foreclosures will keep on coming. The Zimbabwe-esque End is coming.

I don't know if DJIA 3,000 is coming. But DJIA 5,000 is.

Lesson 3: Stocks may have started off missing it, but I still think they are the Canary in the Coal Mine.

I see this thing ending, on a mega-wave scale, with stocks bottoming FIRST, then RE.

Well, if you can call DJIA range trading between 3,500 and 6,000 a "bottom", and residential home prices NOT FALLING 20% a year a "bottom".

That said, I think that the former will happen first. Then the latter. For decades.

I talk about stocks a lot because it is Part I in my attempt to avoid the scourge of inflation I see coming. And it's an inflation I don't see housing participating in.

I will want to hold something that is not Cash In The Bank, when Bernanke's giant pipe-laying experiment goes bad.

I want "stuff". Gold, copper, timber, oil. Stuff. Specifically, I want companies that produce (or own) this stuff.

I still think the Play is to hold cash. For now. Until there is proof that the tub has closed up, and our economic cup will begin to runneth over.

At that point I want to own stuff.

I'm not sure how long that'll take to "play out". Probably years.

But my "real aim" is to buy back into RE... finally. Yup, to buy a house.

NOT as an investment. It won't "go up". But as a dwelling primarily (soley), but also as what I see as a decent post-speculative-busted Bubble asset that may just hold it's value over the remainder of my life.

But until that time, I wait. Cash is the place to be. Until there are "real" green shoots. Then own the "stuff" sellers. And when things have finally bottomed out, RE will have finally hit it's "L" bottom, and you can buy.

NOT "buy and make a killing!". No. Never again. But you can buy and not lose your ass.

hbm, you please Perp-walk me to bedroom?

How come no one like Whitey no more?

Buster, you type so much, my titties not sore anymore!