So, in review…

Entertaining reading:

So just to review today’s notes:

The IAEA finally grows a brain and figures out that yes, Iran is building a nuclear weapon and a reliable delivery system;

Berlusconi’s quitting; Italy/EeeUUUWW is about to implode, taking all major US banks down with it (and most every other part of the ‘conomy;

JoePa’s on his way out in a sex scandal, years after multiple event(s) were reported to him;

Herman Cain us under full frontal assault by a woman that hugged him a month ago, lives in David Axelrod’s building, has a history of financial and legal troubles, and has Gloria Allred on her team;

A Federal appeals court is upholding the clearly unconstitutional Oblahmacare as constitutional;

A.G. Holder has perfected lying under oath and should win an Academy Award for his performance as an unrepentant, unapologetic murderer;

And Obama openly insults Benjamin Netanyahu.

I need to open a fresh bottle of Laphroaig. And buy a shitload of .223.

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Collapse: Full Credit Lockup

Denninger sends once more.

Timmy wouldn’t have lied to everyone to prop the markets, would he?  Oh yes he would, and yes, it appears he did.

Of course we’re hearing truth from the IMF, which in an interview I cited earlier today pointed out that we may be days or hours away from a full-on credit seizure, and Mervyn King who said similar things yesterday.

Fueling the fire of my earlier post.

I actually buy a lot of this…

Tax loopholes as a business model and true believer culture on the future skids.

Apple:

Yes, I know that Apple has 10% of its enterprise value in cash.  I know the firm has no debt.  But I also know that the company spends like crazy on R&D and sell-through is everything to a firm that is playing in this space.  The problem with these sorts of firms is that when you’re running on afterburners it’s nearly impossible to pull back without losing control and crashing, simply because you’ve built a culture and corporate environment that is filled with “true believers” operating at a corporate level where everything has gone right — and thus you all believe it will continue to.

Amazon:

Amazon’s primary “lever” is the ability to play around the edge of the sales tax system.  This gives it an instant 6% (on average) price advantage over everyone else, more than enough to offset the shipping costs (which you pay in any event; whether shipped directly to you or to a retail store, you still pay for it in the product price somehow.)

But that sales tax loophole is going to close.  Over the next few years states will find a way, as the revenue shaft is getting out of hand for them.

Like Karl said, not a “crash coming tomorrow” kind of thing, but a future speculation. Tax loopholes such as the one that powers Amazon close. Unless there is some kind of majick lobby by Bezos, this is bound to happen as tax revenues further contract at the state level. The Apple thing is also simple. Markets dry up for stuff like this, though I do see the consumer public in many cases giving up on other necessities before their techno-baubles.

Total Collapse: Worth Your Time

Thanks Zerohedge…

See this post.

“This economic crisis is like a cancer, if you just wait and wait hoping it is going to go away, just like a cancer it is going to grow and it will be too late!”

Denninger also sends.

Keep your wits about you. Keep your vision clear and focused. Prepare yourself and your tribe when & where ever possible.

One More Hit Off the Crack Pipe

Just. One. More.

Denninger seems to write the same blog post about every three days. I commend him on this. It’s hard to write about the same topic over and over and remain relevant and interesting. Yet, despite that difficulty, he pulls it off.

See his latest here.

When debt grows faster than output on a compound basis the two curves inevitably run away from one another and must always result in a collapse.

This is not a political issue, it is not a left or right issue, it is a function of simple mathematics.  Those who were IPOing these businesses in the 1990s and who were building and selling houses into the ramp in the 2000s were simply believing that they would unload the bag on you before the leverage pyramid in that particular part of the economy fell over.

That’s all the last thirty years was folks, and now we’re desperately scrambling on a global basis to find just one more sucker.  To obtain just one more hit off the crack pipe.  To stave off death just one more day and draw one more breath.

The days of the indebted nation state as the central power are coming to a close. Simple as that. How do you adjust, adapt, and overcome to not only survive, but thrive in the new societal construct?