Polychrysos - The Illusory Game Of Exchange

The Illusory Game of Exchange, the Giant Poker Table where our Realities are determined...

In the previous post in our seasonal triptych, by focusing on the gathering Depression from the perspective of hedge-funds, Dark Pools, Behaviouralism, Darwinism and climate change, we outlined some of the reasons why a Deep Depression is our future.

Only time and space prevented us from venturing further into this systemic murkiness, and in the week since the post, there have been numerous further disturbing pieces of news that, under normal circumstances, would be headline-grabbing.
For example, the Bank of England reducing interest rates (and thereby eliminating its monetary options) to 1.5% - the lowest rate since the central bank was established 315 years ago. This is a statement of extreme historical weakness.
Or, the US economy losing more jobs (2.6 million) in 2008 than in any year since the 2nd World War.
Or the relentless conveyor belt of major job losses and fraud exposures on a daily basis (Alcoa, Satyam etc).

To begin this article, we intend looking at some of the other areas of non-sustainability that will guarantee the Deep Depression.

The Hyperreality (continued)

* Price-earnings (p/e) ratios - Bottom feeders are claiming that longer term investors are able to find value in the current market climate by taking advantage of the low p/e ratios in the marketplace. As stock prices have plummeted, earnings have, until recently, not fallen so far, as companies employ various accounting shenanigans to hide the true carnage from the balance sheets.
But earnings are about to go through the floorboards as the feedback loops and economic contagion poison the entire global economy.
Prices will follow.
The whole efficacy of p/e ratios as a potential measure of value in the marketplace is based on historical analyses and data.
Economists always look to the past for solutions, yet no economic hyperreality is replicable, which renders such research as quite pointless.
In a Depression, p/e ratios become an outmoded yardstick - systemic and super-systemic risk sees to that.
For this reason, there is not one global asset that might be thought of as offering sustainable value - any rebound is nothing more than an example of a dead cat bouncing...

Spokesperson for the Bank of England: "The world economy appears to be undergoing an unusually sharp and synchronised downturn."

* Ratings Agencies - All investors rely on the ratings bodies for a measurement of the level of risk within an organisation or a sector. These ratings are always inflated as any journey through the companies who either went into liquidation or were saved by governmental handouts in 2008 would demonstrate.
This is a systemic enigma built into the fake structure.
As the Economist states: "Although ratings are relied on by investors and regulators as impartial measures, the Rating Agencies are paid by those they rate for their judgments."
Think advertising - no newspaper contains negative editorial against its advertisers.
Think ratings - no Ratings Agency will downgrade an entity that is, in effect, paying the wages.
Some of the AAA/Aaa nonsenses standing proud at Standard and Poors and Moody's today, will seem just a trifle optimistic in less than twelve months time.

Jean Baudrillard: "... all current strategies boil down to this: passing around the debt, the credit, the unreal, the unnameable thing that you cannot get rid of."

* Private Equity - All the focus has been on the plight of the banks and the insurance companies, on the credit crunch and on the toxic assets, on targeting hedge-funds and on the state of the currency markets.
As attention has shifted to the 'real' economy (NB: it is our assessment that the ONLY Real economy is the informal one), the fake finance of private equity operations will come under increased scrutiny.
All firms under the yoke of private equity have been stripped of their assets and saddled with debt. With the current very real concerns about deflation this is very very bad news indeed.
When the Bank of England produced their Inflation Report on November 12th, the future spread of likely inflation rates projected negative values for the first time ever ie deflation.
Under a climate of deflation, indebted businesses (and households) will be more anxious to pay off loans and debts as soon as feasible.
How they are going to be able to achieve this is another problem entirely.

Jean Baudrillard: "The illusion of the economic sphere lies in its having aspired to ground the principle of reality and rationality on the forgetting of this ultimate reality of impossible exchange."

* Deflation - With the indebted desperately trying to pay off their financial millstones, a deflationary world is trouble as there will not be enough cash-rich entities to offset the activities of the indebted. This produces a deadly mix of falling prices and high leverage, leading to a debt deflation of the type first postulated by Irving Fisher in the 1930s.
And don't even get us started on the fine balance between deflation/stagflation tipping over into hyperinflation...

Jean Baudrillard: "Here and now, the whole edifice of value is exchangeable for Nothing."

* Moral Hazard - Moral hazard got us into this mess, and moral hazard is the template of choice to cement the Depression.
Excessive leverage, fake mathematics and accounting, all neatly wrapped in a regulatory-lite environment with no downside to the taking positions of excessive risk. Plus ça change...
Last week in the Financial Times, the war criminal called Blair admits to mistakes in his stewardship of the economy, but pleads for any reactive regulation to be as feeble as possible so that the innovation might be allowed to continue.
What innovation?
Credit default swaps? Derivatives generally? Ponzi schemes at hedge-funds? All very fucking innovative but of absolutely no value to anybody other than the psychos with their fingers in the till.
If such innovation had been put into Real research in medicine, science, rather than the myopic minutiae of available knowledges that are allowed to be marketed in this shareholder capitalist poker game, we would not be in this situation.
Still, its great to hear that the war criminal called Blair has earned £12 million from after-dinner speeches since he gave up his full-time post in applied genocide.

Friedrich Nietzsche: "One must push what is already collapsing."

* Emerging Economies - The new paradigmists, a particularly stupid breed of capitalist, reckoned that the emerging economies would rescue the US, the EU and Japan once the Recession began to bite. Yet all economies are declining in lock-step.
Furthermore, the shareholder capitalist model that has been foisted onto numerous gullible territories has been shown to be invalid.
So, for example, China needs to undertake some financial restructuring and recapitalisation. As the Economist states: "It would once have been easy to argue that a market-driven system served up by big western banks could do a better job of this than government. When virtually every such institution has been given state support to stay in business, that case is much harder to make."

George Soros: "If you need systemic change, you might as well go for something that is vastly superior."

* Credit Crisis - Although the record amounts of public money that has simply been handed over to the greed architects of this Depression has succeeded in freeing up some of lack of confidence in the financial system, the Real solidity so created is mainly an illusion. The Real economy will continue to suffer (British retailers experienced their worst xmas ever in 2008 and banks are refusing to pass on the interest rate cuts to businesses and customers) and banks will create a cycle of contagion whereby the businesses that they do support will be undermined by the complete collapse of the rest of the economy, with associated bad debts and further risk of toxicity. we should expect more hedge-funds and banks to go under this year.

Mark Twain: "Don’t part with your illusions. When they are gone, you may still exist, but you have ceased to live."

* Governmental, Regulatory and Central Bank Errors - It is now generally accepted that allowing Lehman Brothers to go bust was a mistake.
It is now generally accepted that the ban on the short-selling of financial stocks was a short-sighted mistake.
It is now generally accepted that solely targeting the toxicity in the financial system was a mistake.
It is now generally accepted that the excessive financial support provided to insurance giant AIG was a mistake.
It is now generally accepted that the highly leveraged private equity model was a mistake.
It is now generally accepted that the lack of regulation in the free market was a mistake.
It is now generally accepted that the targeting of hedge-funds was a mistake.
It is now generally accepted that giving the Bank of England control over the setting of interest rates was a mistake.
It is not yet regarded as a mistake that interest rates have been slashed to historical lows.
It is not yet regarded as a mistake that the financial industry is rushing to create secretive Dark Pools.
There are more mistakes to come from a financial elite (sic) who see the financial world solely through the prism of their own self-interest.

Satyajit Das: "Markets placed great faith in the volume of money available to support asset prices and assist in alleviating shortages of liquidity. The perceived abundance of liquidity was, in reality, merely an illusion created by high levels of debt and leverage as well as the structure of global capital flows. As the financial system deleverages, it is becoming clear, unsurprisingly, that available capital is more limited than previously estimated."

Trust, Psychology, Psychopathy, Freemasonry and Freebie Bets

* Trust is one key component in the current crisis - nobody trusts the banks any longer no matter what their government-sponsored advertising campaigns may claim.
All analysts must judge the security of their investments, savings and cash, and correctly apportion their monies accordingly.
Taking sports brokerage as an example, we set a limit on the degree of trust that we place in our routes to market. Once a threshold has been set, we maintain our cash levels with the said institution below these levels AND we build into our financial projections the probabilities of brokers reneging on our agreements.
We are now at the point where we place banks at the same level of risk as our second tier brokers ie below the level of trust that we have in our primary level Asian brokers.
This breakdown in trust will not be easily repaired.
We don't know them and we don't trust them.
And we don't trust their system either.
As the Depression begins to bite in earnest, many more individuals are going to be reaching this same conclusion.

As Sigmund Freud once observed: "Illusions commend themselves to us because they save us pain and allow us to enjoy pleasure instead. We must therefore accept it without complaint when they sometimes collide with a bit of reality against which they are dashed to pieces."

* The Trickledown Effect - One of the great fallacies of shareholder capitalism is the trickledown effect, an illusory piece of fake mathematics that is solely dependent on the imaginary hyperreality of purchasing power parity (PPP). There is no trickledown other than in misery and psychopathy.
In a Depression, this Real trickledown effect is a downward spiral in the fake pyramid selling scheme that is our system.
The greed, the psychopathy and the mistakes were made at the top.
Our representatives bailed them out with huge handouts.
Moral hazard determines that the same greed, the same psychopathy and the same mistakes will be made at the top.
Psychopaths are unemotional and irrational - these two factors must go together as research by Antonio Damasio, professor of neuroscience at the University of Southern California, has shown.
There is a sufficiency of psychopathy among financial folk.

Yevgeny Yevtushenko: "When the truth is replaced by silence, the silence is a lie."

* Freemasonry, the World Economic Forum, our Freebie Bets - We are in the middle of a Secular Bear Market which began in 1997 and which will last until around 2017, even ignoring the super-systemic risk of climate change. There are scenarios where the secular Bear Market becomes a Permanent Depression and, in that the same mistakes are repeatedly made until they cannot be made anymore, this scenario has a significant probability of coming to fruition.
Despite this Reality, we are about to experience another hyperreal inflating of asset bubbles. It should be remembered that two of the biggest bubbles of last century occurred in the years immediately following the 1929 slump.
At Davos this year, we should be expecting to hear numerous public statements as to the seeds of recovery and other such nonsenses. Jim O'Neill of Goldman Sachs has already started the ball rolling. The pyramid scheme is being talked up.
Furthermore, the few disaffected freemasons with whom I collaborate are informing me that there is an agenda for the deep state to buy back into the financial markets in the summer months, after the worst early year bankruptcies have been accommodated into the already illusory market prices.

In yesterday's post, we briefly discussed the lack of meritocracy in nepotism and cronyism, but this is nothing when compared to systemic control through secret societies.
Let's examine (again briefly) three of the inefficiencies brought to the financial system by the activities of the lodges. It is the remainder of society that pays for these inefficiencies.

For Freemasonry is a hyperreal heist.

Example 1 - When the Meadowhall Mall was being constructed in Sheffield, the tiling/ceramics contract was not a competitive tender. The contract was simply given to a masonic company in Rotherham. This is not meritocratic and it is not an example of a free market.
Example 2 - The biggest sixth form college in England required a new headmaster. A shortlist was drawn up. The chairman of governors objected that a catenian (catholic mason) who had applied was not on the shortlist and, even though he accepted that professionally this was the correct decision, he was duty bound to interview the man. The other candidate withdrew and the catenian was appointed. Two years later 90% of the board of governors at the school were composed of catenians from the same Knutsford lodge as that attended by the headmaster. The chair of governors retired and the new chair is the wife of a leading regional freemason. This is also not meritocratic.
Example 3 - Masons are given prior warning of changes in government regulation. So, when the government announced a change in the way that nursing homes could be operated in the Thatcherite free marketplace in the 80s, freemasons received the tip off of the market opportunity fully six months before the matter had even been discussed in parliament. Ah, democracy... This is neither meritocratic nor proof of the existence of free markets. It is more like Russia...

So, by the summer, the concerted efforts of the Davos brigade and the deep state apparatus will be driving market prices higher AGAINST the Real dynamic of the market which should, at best, be stagnant. Remember - markets are priced for a Recession, not a Depression, and most certainly not a Permanent Depression.
Selective buying into the markets is our Freebie bet for this year. For now, we restrict ourselves to suggesting a purchase of the systemic indices, but nearer the time we'll be more specific both with regard to the markets and the timing.
This is truly a contrarian Cynical Realist market position.

There is a risk in this position and the primary skill will be knowing when to close out - it is only in a fake hyperreality that one might make money out of opposing the true Reality. For, although an attempt will be made to drive a new collection of illusory bubbles, the state of the planet and the financial and economic systems may well determine that the bubbles will not be able to be inflated to any great extent.

Buttonwood in the Economist: "... low government-bond yields could lose their appeal and equities could rebound. Income-seeking investors seem unlikely to get much of a return from cash this year. An equity rally could occur even if the global economy is in for a prolonged period of weakness."

The other part of our Freebie Bet is for Dietrological Professional clients only and is ##################### to win the Premiership title.

* Conclusion - As the fallacious system runs on in its empty sameness, the illusion must be replaced by truth, otherwise there will not be eco-system in which to continue to peddle the propaganda and lies.

Satyajit Das: "In this current financial crisis, the quantum of available capital, the munificent resources of central banks and sovereign wealth funds, and the globalization of capital flows may be some of the accepted "facts" that are revealed to be grand illusions."

Michel Foucault: "There is a battle 'for truth'... It is necessary to think of the political problems of intellectuals not in terms of 'science' and 'ideology', but in terms of 'truth' and 'power'... 'Truth' is linked in a circular relation with systems of power which produce and sustain it, and to effects of power which it induces and which extend it. A 'regime' of truth... The problem is not changing people's consciousnesses - or what's in their heads - but the political, economic, institutional regime of the production of truth."

© Football Is Fixed/Dietrological

Propaganda And The Peripheral Press

Busy lives result in many of us having to depend on a variety of externalised sources for our societal information. The previous post suggested that such a dependency is inappropriate and that we are not able to rely on the media to act as an independent channel to the truth. One of the prime ways that media achieves this sleight of hand is via the reframing of an argument, reality or news story. A spectrum of tactics is utilised to divert our attention from where we should be looking to an altogether safer environment where the global elite and the media barons wish for us to look. The media undertakes a critical role in the filtering of information and in the subject matter that is allowed to pass editorial control. As an example, lets look at how media in the west has dealt with the continuing crisis in the Middle East both with respect to the war of terror and the Palestinian crisis.
Firstly, a little background...
The coalition of the willing is active throughout the Middle East with the publicised aim of bringing democracy to the region. The initial spin around the illegal occupation of Iraq was that the west was out to win the hearts and minds of the Iraqi people while unearthing Saddam's weapons of mass destruction and bringing the former rulers to summary justice. All of these publicised factors were a veil behind which the reality of the west's agenda lurked - this alleged process of democratisation never mentioned oil or the west's long-term strategic geopolitical agenda in the region.
The USA have not utilised the winning of hearts and minds as a military backcloth since Vietnam. The shock and awe tactics developed against the Vietcong have been the strategy of choice in the intervening years and Iraq is no different. Instead of trying to win popular support, the US has instead approached conflict on a behavioural level whereby tactics are developed that bludgeon the population into an acceptance of western democracy - think Fallujah, for example. Baudrillard famously claimed, quite correctly, that the first Iraq war never actually took place as the armed forces of the protagonists never actually fought each other face to face - as good an example of the triumph of shock and awe over hearts and minds as one is likely to find! The shock and awe mentality has spread through to the gross violations of the Geneva Convention that are represented by Abu Ghraib and Guantánamo. The torture techniques that were successfully utilised against the US in Vietnam have formed the bedrock of America's own tactics in extracting (flawed) information from prisoners in the current phase of the American's imperial agenda. Many of the forms of torture are highly behavioural in style and, yet, are very successful in breaking the wills of the alleged enemy combatants - 24/7 heavy metal music, waterboarding, the use of wild dogs and sexual humiliation have the same collated impact as more physical forms of abuse.
Since the 2nd World War, the US has intervened repeatedly across the planet under the flag of freedom. Initially, it was freedom from communism that allowed the butchery and starvation of many Greek people, for example, to be justified on the grounds that a few starving children were of no relevance when compared with the good fight against the commies. At this time, the CIA was globally active destabilising democratically elected regimes in furtherance of America's imperial aims. As an example, compare how CIA agent Larry Devlin was sent to the Congo to poison the government leader Patrice Lumumba with the huge fuss over the poisoning of some minor Russian recently in London. Lumumba was eventually kidnapped, tortured and murdered in 1961 with the acquiescence of the Belgians and Americans. The number of column inches relating to these two news items is revealing.
Bringing the argument up to date, I intend to focus on the attitude of the powers that be to the democratic election of Hamas to rule Palestine. The coalition of the willing are big on democracy (apart from the US 2000 election, that is) and one might have thought that a non-rigged election might be applauded. Don't be soft. Global sanctions were the first tactic to be introduced, followed by the imprisoning of over half the Hamas MPs in Israeli jails. When this failed and a peace deal was reached between Hamas and Fatah that promised the hope of a better future for all Palestinians, the coalition got serious. In February, Condoleeza Rice held meetings with Fatah, Israel and pliant Arab leaders. A strategy was established to provide arms and training to Fatah with the prime purpose of overthrowing a democratically elected government through the tried and tested tactic of divide and rule. Israel loosened their vice-like grip just enough to allow the weapons into the territories with the inevitable result of yet more bloodshed. The Americans also backed the attempted coup against Venezuelan hardman Hugo Chávez in 2003 in an attempt to undermine the man's Bolívarian revolution and we could itemise numerous other recent examples where the coalition of the willing have clearly demonstrated an aversion to democracy when such democracy does not serve their strategic agenda.
So how does our free press deal with this sixty year old global agenda? Quite simply, it doesn't. All coverage of the militaristic agendas of the world's sole superpower is conspicuous by it's absence. For example, look at assassination. The deaths of Litvinenko (the unfortunate Russian) and Rafik Hariri are an omnipresent factor in all news coverage of Russia and our glorious war. But, where is the press coverage for the murders of Yasser Arafat or Savimbi? Or look at the warping of the arguments. The coalition line goes that there can be no accommodation of Hamas until the group recognises Israel's right to exist. Where is the press coverage regarding Likud's lack of recognition of the right of a Palestinian state to exist? The press also wishes for us to perceive these wars in isolation rather than combining them as an ongoing campaign to achieve prescribed military aims.
The conflicts in the Middle East only make full sense when one views the agendas that have been implemented over the last half century in an holistic manner. Look at a map of the region with oil deposits highlighted and all the incremental wars and invasions start to make sense. Oil pipelines, control of the region from Europe through Turkey, Iraq, Syria, Lebanon, Iran and Afghanistan are the key factors. Democracy, weapons of mass destruction and alleged assassinations were simply so much spin. The US allows Israel illegally held nuclear weapons but threatens more armageddon if Iran go down the same route. The whole agenda is kneejerkingly simplistic and reactive. By targeting Islam as a whole, America has missed out on a more creative tactic of setting the Shias against the Sunnis at America's bidding and vice versa. Any moral high ground that may have acted as a persuasion to the myopic masses has been totally undermined by illegal war, torture, terror and rabidly non-democratic processes.
Arthur Schlesinger established that the global agenda moves in a series of fits and starts. Every 40 years or so, there is a new climax of psychopathic behaviour that reaches such a crescendo that the elite have to take notice of the masses and, consequently, decelerate. This law is based on the valid premise that most people just wish for an easy life but that when societal, business, governmental and military psychopathy reaches a zenith, the cry goes up that enough is enough and we are all rewarded with a window of pseudo-social living until the next generation can be bought off through their lack of political memory. The last two zeniths were represented by the Depression and the aftermath of Vietnam. Our current cycle began with the nadir of the imposition of shareholder capitalism in the early eighties and the increase in enlightened cynicism is suggestive of an imminent new zenith.
It is by no means certain that the planet will be able to survive the next wave of psychopathy unless considerable restructuring is undertaken in the near future.
And what may we expect from our free press? It is to all of our disadvantages that our present media does not inform us about geopolitical realities and corruptions but chooses to focus instead on propaganda and the periphery. Even in France, 75% of the media is in the possession of just two military defence companies. We cannot expect such organisations to take a neutral line.
In the words of Bertrand Russell: "the authorities no longer have sufficient belief in the justice of their cause to think that it can survive the ordeal of free discussion." Expect more of the same ad nauseum...

© Football Is Fixed/Dietrological