[newsday] blazing condoms

While, in London:

A massive fire has broken out at London’s Olympic venue, covering the centre of the city in black smoke, and plunging the city into twilight,

In China there's a different problem:

Used condoms in southern China are being recycled into hair bands and they are selling well in local markets and beauty salons.

Meanwhile, another great use for a condom;

And finally, the connection between tall buildings and condoms.

[eu monster] disdain as an art form

BBC today:

The auditors for the EU have refused to sign off the bloc's financial accounts - for the 13th year in a row.

A report by the European Court of Auditors (ECA) criticises nearly every major area of the EU's expenditure.

However, it says there has been a big reduction in the overall level of error in the EU's Common Agricultural Policy.

The European Commission has blamed member states for audit failings, but the report criticises the commission itself, our correspondent says.

Two posts ago, I said:

Meanwhile, the banks have been quietly divesting themselves of gold and are increasingly relying on unbacked scribble in a ledger to balance the books [or not bothering, in the case of the EU – admittedly not a bank but still – see the auditor's report for 2004, for example].

So now we can see the auditors' report for 2007. So the EU is a dodgy organization which lies blatantly and will now close down as an entity, on the auditors' recommendation.

No?

[the state] obsession with information gathering

From Colin Campbell, who quotes Laurel Papworth, on Google as Big Brother.

The central witness in a California lawsuit against AT&T says the government is vacuuming up billions of e-mails and phone calls as they pass through an AT&T switching station in San Francisco.

Mark Klein, a retired AT&T technician, helped connect a device in 2003 that he says diverted and copied onto a government supercomputer every call, e-mail, and Internet site access on AT&T lines.

For the benefit of the Anonymii who have been patiently feeding my comments sections material and awaiting some result, this is most certainly in the process of collation - the theme of micro-control 6 is the slide to and obsession with control by the state.

Not that anything I write will be much chop - the groundwork has already been done by these boys.

The main contention will be that the State consists of merely the representatives of the sovereign people and the former are charged with doing the people's will and taking charge of the everyday details of services, armed forces et al.

This is not how the State sees it and articles on Post-Democracy which are starting to come out are hugely worrying. Here's a nice treatment of the subject in simple terms, quoting the delightful Richard Rorty.

In the end, the people who constructed the term Social-Construct, concerning that which they oppose, have now another fabricated construct - Post-Democracy and while adopted as a criticism of the New-Statism, is also being utilized by its proponents.

Absolute bollocks, the efficacy of Post-Democracy. I've watched these reptiles for seven years now and you have to hand it to them - they know how to play the people for suckers. Give me the suckers any day over the cold elitism of sociopathic "leaders beyond authority".

[economics 101] the reason why it must

Found myself in a position today where I had to explain my perspective to a financier whose English level was reasonable but not fabulous. His question was simple – why I thought the western economy was going to collapse.

Seems to me that there are two ways to come at this question – politically, in terms of what the ECB and Fed are up to and in terms of Economics 101, which is as much as I can lay claim to.

In 1989, a teacher's salary was J11 000 and a two bedroom semi-detached was J55 000 in the north. Seems to me today that in Britain, the salary is about J22K and the house about J120-180K. In Russia, the ratio has gone from 1:15 in 1999 to 1:26 today.

Income, in real terms, has gone down and continues to, to the point that the only way to have a house and one car is to go into deep hock. This is fundamentally wrong and has been fuelled by the availability of credit which is not even cheap.

An inevitable consequence of this is that the middle half of society moves from a position of relative equity to a position of debt and slowly drops into sub-prime status, which was most certainly not the situation in 1969.

It's further fuelled by unrealistic aspirations, the gratification of which has moved into the area of the unaffordable and whose spin-off is that people nurtured on the credit economy inevitably see credit as smart money instead of the debt it is.

The great terminological inexactitude the banks persist with is that most people can make ends meet and therefore will not exceed credit limits or seek further credit. The banks know very well that people's aspirations, fuelled by a “keeping up with the Joneses” mentality will lead them to seek “solutions” from their friendly cooperative or other provider.

Another cynical “given” is that a proportion of people will default, be it an overdraft or true default. Insurance will carry them for a while but not forever. That proportion is most certainly increasing in all western countries – I have U.S. and Australian stats on this.

Now the most unforgivable of all. In a sub-prime position, people go for finance to cover their lack of finance and are given it but at rates which are exorbitant. It should be the other way. Sound borrowers can carry higher rates but sub-primes can both ill afford to nor do they usually have the least clue how to handle money.

So the credit economy becomes the debt economy [$18, 700 per household in the U.S. In 2004, inc all debt] and as the luxuries are pared back to the bone, even basic mortgage and car repayments assume mammoth proportions.

Solution – refinancing and second mortgages.

The pressure on the housing market is enormous, the market stalls, rates go up partly due to the parallel sub-prime loan defaulting, when they should be doing the opposite, the banks themselves find themselves in an overextended position partly due to quite unsound speculative investment, the CB bails them out.

Prime borrowers are also finding themselves in trouble, as Henry Paulson recently noted:

"Yet, the problem today is not limited to subprime mortgages as the number of homeowners having trouble making payments on prime mortgages is also increasing."

Meanwhile, the banks have been quietly divesting themselves of gold and are increasingly relying on unbacked scribble in a ledger to balance the books [or not bothering, in the case of the EU – admittedly not a bank but still – see the auditor's report for 2004. for example].

While this is happening, the herd mentality has created "gold thinking" and elsewhere, Asian sovereign funds are looming mighty large, which is interesting, given today's warning [below] re the Nikkei.

This has followed on from clear warnings that U.S. financial markets reeled from a growing credit crunch, centered not in the subprime area, but in the leveraged corporate debt market. Private equity funds have become a dodo and hedge funds and derivatives have become two dirty words. Lack of transparency has also led to unease - just what is the overall strategy of the b-g--rs?

Take away property and that leaves commodities.

So, back to the mundane, the average punter is in big hock to the finance provider who, through unwise speculation on the strength of CB noises about soundness, is in hock to the CB, who in turn has been divesting itself of real money and the only ones with money are the Old Money who've been buying up for the inevitable rainy day.

Is this a healthy economy?

Now where the economists and I part company is that they say, just as they explain away the '29 crash, that 2007 is due to cloudy foresight or even incompetence. I maintain that it is due to selective blindness and that there is an agenda to destabilize, certainly from the Round Table and ECB, where my information is sounder.

The purpose? Here we get political again but a glance at the decades pre-1914 and pre-1939 show some parallels. Also, answer one question – can you afford gold anymore? You could have in 2005. So who can afford gold now? OK, it's coming down, so how much is available for the average punter to buy?

Back to the global economy and this little statement earlier today from the BBC, whose link I lost in my haste, I'm sorry:

"I'm afraid factors from overseas, such as sub-prime problems, are coming over to Japan," said Chief Cabinet Secretary Nobutaka Machimura. "We'll closely monitor the situation," he added.

"Its getting to the point where everything seems scary and that its hard to trust what financial institutions are saying."

Why would the U.S. housing crisis affect the Nikkei?

Economists will snort but I don't mean the nuts and bolts - Sackerson's report that Karl Denninger (Market Ticker, yesterday) explained it as a relativistic effect:

Our problems are bad. The problems that will be faced overseas are FAR WORSE. Overseas economies are dependant on us, not the other way around. When this sinks in the other currencies against which the DX is measured will collapse; this will appear to raise the dollar, but in fact it is the sinking of other currencies.

No, I mean, in very non-economist terms, why would the market operate in such a way anyway that this could happen in the first place? What sort of a market fails to be gear itself to prevent this? I'm not talking cause and effect here – I'm asking this question in the way Guthrum asks why we even need government at all. Fundamental structural principle.

I say there are only two explanations for the crisis in the U.S. which the FOMC was meant to prevent:

1. Incompetence – not foreseeing logical consequences – in which case it's very worrying that the world economy is at their beck and call;

2. Design – selective failure to act, allowing sub-prime lending to the point where the sheer volume creates crisis nd tweaking interest rates to exacerbate the situation - in which case it's very worrying that the world economy is at their beck and call.

For example, they were well aware of the likely housing outcome in October, 2006:

Residential construction activity remained weak. Single-family starts ticked up in September, but new permit issuance slid further to its lowest level in nearly five years.

Now, look at one further aspect. Ben Bernanke explained the Fed's recent actions by saying a central bank has to do things that will prevent sales of assets that "will drive the prices of those assets well below their longer-term fundamental values, raising the risk of widespread insolvency and intensifying the crisis."

And what if the fundamental value is far less than supposed? Then the Fed would be fuelling a bubble. And we all know what happened last time. Now is this incompetence or design? We could argue this one till the cows come home.

So where does that leave the average punter? It leaves him paying out, selling off and buying up commodities, which themselves are being selectively released onto the market, with the pittance he's left with.

[personal pet parade] enter your darling today

Pet velociraptor? Make sure you submit your entry by midnight today, Sunday. This is the final call, dear reader. Send your name as you'd like it diplayed, along with attached photo of your giant squid or tyrannosaurus or whatever to:

nourishingobscurity@gmail.com

The cunning plan is to present the parade tomorrow afternoon or evening. And yes – you may submit pics of your spouse or concubine.

Thanks for all the entries so far.

[breast pocket] essential gentlemen's apparel

Ladies, please go to sleep for the nonce – this is for the gentlemen. Manolo has pointed out a crisis in the dressing department:

The news that sales of shirts with breast pockets have collapsed - from 90 per cent of all shirts sold a decade ago to 25 per cent today - doesn’t surprise me. The clothes snobs have been fighting them for years, and tragically - for a breast pocket fan like me - they’ve won.

Izzy continues:

It is true that, for both men and women, the more functional the piece of clothing, the less formal it is. Think of how you cannot roll back the sleeves on a french-cuff shirt, or how the pockets on a (slimly cut) tuxedo jacket can barely fit anything beyond a money-clip. When it comes to breast pockets on shirts, the issue is to what extent you are willing to trade formality for functionality, a question that each gentleman must determine for himself.

Personally, I like the breast pocket [the box pleat flap is my favourite] - far from distorting the shirt, it helps retain its shape whilst remaining soft to the touch. Otherwise one would need starch. Of course it's not meant to have anything more than a notepaper in it.

I have a designer shirt with a zipped breast pocket which is sewn to the inside and it's wonderful. Also, I wear a thicker, softer shirt than the traditional and ubiquitous nasty business shirt.

My shirts are cotton or linen and my ties silk. And yours?