Editorial

If you remember my consistent position since this mess began in early 2007 has been that the banks have roughly $3-3.5 trillion in losses in residential real estate.

The IMF now says that half of those losses remain unrealized and intentionally hidden:

“It is our view we are still in the situation where a lot of losses haven’t been disclosed,” Strauss-Kahn said during questions at the Confederation of British Industry’s conference in London today. “How much is a difficult assessment, but let’s say something which is close to half of it.”

Now consider the fact that the Central Banks, including The Fed, and governments, including ours (Treasury) have printed, lied, cajoled and otherwise "cushioned" the first half of these defaults and losses.

But with interest rates at or near zero, gold skyrocketing and deficits running well north of $1 trillion annually in the US, the ability to pull that trick again has been extinguished.

So what happens, my friends, when the second half of those losses "come out from the dark" and are forced to be recognized?

Kudlow appears to have started to detoxify from the KoolAid to some extent, but he's pretty much it.  Kneale and the other "useful idiots" continue to spew the party line - "it's all getting better" - but none of them want to talk about what the IMF said over the weekend - and guess what - they're telling the truth.

Someone has figured it out.

“We cannot spin a positive story from the fact that a third-of-a-trillion dollars a week is trying to lock down Treasury bill yields of less that 0.05 percent,” Bianco said. “There is still tremendous demand for the front end of the curve despite the fact that people are saying things like there is no yield there and that cash is trash.”

$300 billion worth of "someones" - per week.

Let's cut the crap.  The IMF has (correctly) surmised that there will be no ability - politically or fiscally - to fund another bailout.

The IMF has also (correctly) surmised that only half of the losses necessary to take have been realized, with the rest being papered over by government malfeasance, accounting chicanery and outright fraud.

Now you might try to make a case that "the worst is over" and "it will all be good, we're recovering in the economy", but to do so you have to explain where the money is going to come from to absorb the other $1.5 trillion in residential real estate loan losses along with how we're going to prevent the MBS on The Fed's balance sheet from detonating - and we haven't talked about the commercial real estate lending market yet.

Have another glass of KoolAid folks - it's grape-flavored, mixed by someone named "Jones" and tastes great!

I am often accused of being a "Permabear" or "Doomer."

Nothing is further from the truth.

I simply call things as I see them.  I did so with Musings before The Market Ticker began publication, I did so back in the 1990s when I ran MCSNet, and I still do.

And let's not kid ourselves - the economic news is simply not good.  Nor is it likely to get better.

Take the leading economic indicators.  People point to the six-month improvement in the LEI as a sign of a "strong recovery."  But the internals of that number are more sobering - unlike every other recession since the LEIs began being reported, the "real economy" subset of the LEIs is showing less than half of the "improvement" found in "bubble" components such as "stock prices."

The problem is the willful blindness to the real problem in the economy - that is, excessive debt.

James Bullard of the St. Louis Fed, who came out this weekend in support of "more asset purchases", underlined the reality: The Fed has been buying literally 90% of all of the new issue in Treasuries and MBS this year.  While their "Treasury" program was "only" $300 billion, the MBS program has allowed various people to exit their MBS position and swap into Treasuries - thereby papering over the near-complete destruction of interest in Fannie and Freddie paper.

This morning I awoke to CNBC with Mr. Kroszner, former Fed Governor and University of Chicago Booth Business School nutball, "laud" the fact that an "independent" central bank had led to "better" inflation outcomes.  Really?

I suppose if you don't include in "inflation" the change in prices of things people actually need, you might be right.  You know, things like houses?  Food?  Gasoline?  Pharmaceuticals?

Never mind that Bullard's "speaking" over the weekend (and let's remember, he's a voting member starting next year!) had the clear effect of further torpedoing the dollar. A clear statement of intent to further debase the currency by purchasing MBS that under any reasonable read of Section 14 are unlawful for The Fed to buy, securities that are likely carrying huge unrealized losses yet will be purchased at intentionally-overinflated prices, is destructive to the currency.  This is what Fed secrecy has brought and continues to bring.

The fact is that Kroszner is forced to resort to flat-out lying to continue to defend the indefensible acts of his cronies (and indeed his own acts of the last few years at The Fed), which is what so-called "economists" and professors have been reduced to.  Government is complicit in these lies; indeed, they have every reason to do so, especially when it comes to so-called "inflation" numbers, as to do otherwise would be to make clear to everyone in the market exactly what sort of outrageous behavior (and the impact it has had on the economy) they have engaged in.  The CPI is insanely fraudulent by being laced through with "hedonic substitution" (when steak is too expensive they substitute hamburger, and call it "equivalent" since both are beef!) and willful refusal to include certain categories of expenditure at all (e.g. "owners equivalent rent" instead of actual house prices, when more than 60% of American families own a house!)

A more accurate way to look at "inflation" is to look at the debt load that has been served up by our "independent" central bank.  And here you find the following chart, courtesy of The Fed's own data:

Notice the change .vs. GDP, and the increase as a percentage.

As I have repeatedly pointed out, we are running between 8-9% growth in debt outstanding - on a compounded annual rate - since 1951.

If this is "better inflation outcomes" I'd like to ask "what would be a worse inflation outcome?"  And don't try to claim that the "anomaly" in the 1970s skews the data either - that would be a flat lie.  In fact, since 1990 to present the rate of change has been 7.90% and since 2000 8.49%.

Let's not kid ourselves.  The claim that "inflation has been low and controlled" is a flat lie.  GDP has consistently run 2-3% below debt levels since the 1950s and that "spread" has in fact been increasing in the last decade.

This is what our Federal Reserve has brought us in terms of "monetary policy" and it is why we are in this mess.

I know I have presented the above chart many times, but it will continue to be presented until people wake up and smell the damn coffee!  It is the policies of The Federal Reserve that have led to this mathematically-impossible circumstance.

Secrecy breeds complicity and fraud, and nowhere is that more evident than at The Fed.  The NY Fed, for example, did funnel a huge amount of taxpayer money through AIG to foreign and domestic banks after, in secret, making known that it and Treasury would not allow AIG to fail, thereby destroying their negotiating position.  It was through secrecy that this was able to happen without the public raising a well-justified amount of hell at the time and now we are stuck with the consequences.

The FDIC has taken a page out of The Fed's "bamboozle 'em by keeping 'em in the dark" playbook, refusing to act to close banks until they are 20, 30, 40, even 50% underwater on asset prices.  How does this happen?  How do "bank examiners" not know that these "assets" are worth far less (or just plain worthless) than their book value?  There are only two possible explanations - willful blindness or outright idiocy.

Neither is acceptable.

Then there's this - apparent FDIC refusal to disclose REO auction results!  It seems to me that a well-placed FOIA is in order, but is one really necessary?  The fact of the matter is that underlying asset prices are still collapsing in the real economy, as the ability to take on more debt to support the bubblelicious values of yesteryear simply does not exist.  The FDIC's refusal to disclose is a raw attempt to prevent the market from realizing the truth - these so-called "assets" are deeply impaired (at best) and there are literally hundreds of banks and other institutions (including most especially The Fed!) that have securities "backed by" these assets that are worth far less than their alleged "face" value. 

Recognition of this will set off another leg down in this crisis and the regulators and Washington DC folks know it.  They have spent over two years playing "extend and pretend" in the futile belief that valuations would recover by now - but they haven't.  It is in fact mathematically impossible for them to do so as the net debt carrying capacity of the private sector has been exceeded.

There are about $10 trillion worth of mortgages outstanding in this country (according to The Fed Z1); of that well over half is linked to Fannie and Freddie.  The actual underlying value of the homes linked to that debt was overinflated by roughly half during the years 2001-2007.

Deutche Bank has estimated that more than half of all homes with mortgages will be "underwater" by the end of next year.  Hiding the reality of this calamity has become the mantra of the government and its agencies at this point - there is literally more than $1 trillion, and perhaps as much as $2 trillion, in additional residential real estate losses that are being hidden in the system right here and now, and The Government, either directly or via The Fed, is on the hook for the majority of it.

The IMF warned this weekend that a second bailout would "threaten democracy":

Dominique Strauss-Kahn told the CBI annual conference of business leaders that another huge call on public finances by the financial services sector would not be tolerated by the “man in the street” and could even threaten democracy.

"Most advanced economies will not accept any more [bailouts]...The political reaction will be very strong, putting some democracies at risk," he told delegates.

I hope you're prepared for that, because our government has intentionally lied its way through this mess so far.  We have refused to force those who are holding paper at well above its actual value to recognize their losses (and indeed have made such a policy via accounting changes!), we have allowed The Fed to monetize $1.5 trillion dollars in bad paper (into which The Treasury immediately issued more debt in order to fund giveaways of various sorts, thereby instantly destroying any beneficial aspect that this program would have otherwise had), and we still have literal hundreds of trillions of "off exchange" derivatives with no accurate accounting of where the net exposure resides or in what amount it exists.

Yes, the Stock Market has had a big rally.  So what?  Is the stock market the economy?  No.  Were Tulip Bulbs reflecting the underlying demand for tulips in Holland during the mania?  No.  Were tech stocks reflecting the underlying demand and business prospects for Internet-based businesses in 1999?  No.  Were stock prices in October of 2007 reflecting a strong fundamental outlook for the economy?  No.  Were housing prices, as Bernanke repeatedly asserted to the public and Congress, reflecting a "strong underlying demand for homes" in 2006 and 2007?  No.

I continue to hear rumors of incipient disaster.  One of the latest, which has come at me from multiple sources, is that Moody's intends to downgrade multiple states, as many as 20, within days or weeks.  This has been floating around in whispers for the last month.  Is this reality?  It damn well should be - California, New York, Michigan, Arizona, Nevada and Florida are all in serious fiscal trouble.  All built up public salaries and pensions, protected by state law or worse their state constitutions from cutbacks, along with unions willing to literally go to war to prevent reductions in expense.  Yet their funding base has and is collapsing - property taxes are going unpaid by banks and the government holding REOs, property valuations (and thus the tax base) are collapsing, business is in the tank destroying sales tax receipts, and those states that charge a personal and corporate income tax have seen those taxes collapse as well.

California has what appears to be a $20 billion budget hole all on its own, and no prayer of being able to close it.  Between these states there are literal thousands of firefighters and police officers who have platinum-plated pension plans that are additionally double-dipping in some fashion, all of them "earning" six figures.  Universities that have gorged themselves on debt-fueled increases in tuition and fees running at a double-digit rate for more than a decade are now finding themselves trying to force students and their families to eat the outcome of their profligacy.  The local school district here in my town built a new addition on its elementary school - complete with tens of thousands of dollars in each classroom for "smart boards" and plasma televisions - the latter of which is used to display THE SCHOOL CLOCK for 90% of the instructional day.  Yes, you read that right - we have a school here that uses a $5,000 plasma television to replace a $10 clock.  We have so-called "health care reform" being pushed while the pharmaceutical companies have raised prices by nearly 10% in inflation-adjusted terms over the last 12 months and health insurance premiums have been rising at a double-digit rate annually for more than a decade.  The "support" for all of this has been one and only one thing - the ladling on of more debt throughout the system, and now that the private sector has reached its limit and is choking on it the government is trying to replace all of it with more borrowing of its own.

This is the sort of rank stupidity that everyone thinks will be "ok" and it is literally everywhere through government and the mainstream media.

This morning I woke up to see The Dollar trashed, down almost 1% overnight.  The expectation was that this would "pump" the stock market, and it did.  But does this matter if your dollars buy nothing?

CNBS is full of bubble-heads that smile and make it all sound good.  Is this good?

You have to love how destruction of a nation's currency is cheered, with CNBS trying like hell to lead everyone into the stock market.

The public is having none of it - retail simply is not "in" at this point, and the "boyz" are starting to recognize that they aren't going to be. 

Why should they?

The "boyz" and "media" have lied to the public twice in the last ten years.  First in the 2000 wreck everything was a "buy" all the way down.  People had their hopes, dreams and retirement destroyed - all led by a bubblicious media that was telling you that it was "time to buy" because "stocks were selling at a tremendous discount."  The orgasms on CNBC and elsewhere in 2001 and 2002, when there was still plenty of downside left, every time the market put in a good rally was clear, convincing - and outrageous.

The "bull market" callers all showed up again on CNBS this summer - right around S&P 900.  Where were they at SPX 666?

Indeed if you bought at 900 you've done well - for a while.  But who bought into the rally at 900?  Not retail.  This is all a trader's market; the people have had it.  They're tired of being lied to and no matter how far the pumpers push things by trading things back and forth the investors of the world have figured out the scam and are sitting on their hands.  Most of the "inflow" from Money Markets has gone not to stock but rather to bond funds. 

The lesson?  You can screw people only so many times before they tire of it and simply leave you to play in your rigged casino - with yourself.

Gold?  It hit $1172 this morning.  But bonds - especially the short end - are yielding zero.  That makes no sense, and one of them is wrong.  You don't buy bonds that yield zero on the back of a currency devaluation exceeding 15% unless you expect both the dollar to rocket higher and the stock market to collapse.

Gold, to a large degree, is being hyped based on Internet-circulated stories of "salted" bars filled with tungsten.  If true - if the so-called "Gold" at Ft. Knox and elsewhere turns out to be false then there is a nightmare about to unfold, and the dollar could easily collapse - especially if this subterfuge is traced to the US Government.

But if this is false, then you're witnessing one of the biggest scams and correlated frauds ever in the history of the markets - and the bond market will be proved correct.

Whichever the case may be someone is going to be proved critically wrong in the coming days, weeks and months.  There are times for tremendous caution, and when asset prices are supported by secrecy and outright fraud the public would be well-advised to stay well away from exposure to those parts of the market that would lead to a 50% or greater loss in a near-straight line.

Unfortunately, at present, this is essentially every asset class - except perhaps copper-coated lead.

America used to mistreat her land and water like this.

This sort of thing, by the way, is how you manage to produce things with a wage of $1 or $2/day and undercut first-world producers.

When we have "free trade" with China, this is what we are supporting.  This is what we're serving up on their people.  This is what our government and corporations all say is ok - so long as it is hidden from us, and happens "over there."

Make all the excuses you want America, this is what you're supporting every time you buy anything made in China or containing Chinese componets.

Go walk around your house and pick up 10 random items.  Look for the "made in" tag on the back or bottom.  What's it say?  Now consider this - it is virtually impossible today to buy a piece of consumer electronics, a toy, an automobile or even a toaster without some part of it coming from China.

YOU are why this is happening.

These are not old photos, or someone's Photoshop experiment.

They're real, they're current, and they are what our hedonism, demand for $20 DVD players and "cheaper and faster" from everyone has resulted in, all so our "corporations" can report "record profits."

Those "great earnings" the last two quarters were in fact generated by firing Americans and shifting yet more production over to China, where they poison their air, water and ground with wild abandon, all so we can have a "strong" stock market and our banksters can loot us some more.

This is just one example.... head to the original article to read and see the rest.

You lost your job so she can bathe in industrial waste, and you are not only consenting to all of it, you're actively supporting it.

Any questions?

Yesterday you undoubtedly saw my letter to The Chinese Premier.  Today, it's your turn.

You could have made quite a splash over there in China - and made a difference for all Americans.  But instead, you did nothing of the sort - you simply continued the sell-out that has been going on for the last two decades in the so-called "strong relationship" between China and America.

That "strength" has included selling China advanced radar technology allowing them to shortcut 20 years of development time off their ICBM targeting, making their nuclear weapons far more lethal to potential targets - including targets in the United States.  It has included turning a blind eye to the blatant and outrageous technology rip-offs that go on over in that nation every day.  You won't see them because your Presidential Motorcade will never be allowed in the street markets found all over the nation, but if you were, you'd see literal millions of unlawfully-made copies of US-created software and music sold openly while the cops stand by to protect the vendors instead of enforcing internationally-agreed to laws that the Chinese pay only lip service to.  And it has included granting virtually tariff-free "trading" status to a nation that forces poor farmers off their land and into sweatshop factories, away from their families where they are paid a buck a day in US equivalent wages, turning out products for sale in the US.

And let's not forget who these companies are.  They're the WalMarts, Apples and Nikes of the world - many of them huge American firms.  Oh not directly - that would bring these firms under US labor and regulatory stricture.  No, they're "independent companies" owned by Chinese slave-drivers who instruct their employees to lie when the "auditors" from WalMart and Apple show up, telling them to a single employee that they're "complying" with reasonable wage and hour laws under penalty of losing their job, being blacklisted forever and literally starving to death.  Since there are no whistleblower protections in China (it is, after all, a Communist government) the big US companies can claim to be "responsible" while in the background you hear the slave-driver's whip crack - and everyone smiles (except the Chinese worker who is being outrageously exploited.)

You ought to know something about this, given your heritage.  Kenya featured prominently in the global slave trade until the British put a stop to it.  There's nothing like a bit of history to screw up the revisionism that finds its way into American Politics, is there?

You ran on a populist platform and won on the basis of "hope and change."  But hope and change is not working at WalMart while offshoring the production of our various consumer goods to China where the replacement for our US workers are paid a buck a day.  Indeed, many of the 8 million American jobs lost since the top of the employment market in mid-2007 will never come back, simply because the small and mid-sized businesses that once dotted the landscape have been destroyed by this "offshoring" activity.  It is clearly not possible for a US supplier or vendor to compete with $1/day wages or anything approaching it, yet this is the "competitive supplier" environment over in China and elsewhere. 

The Truth is that America and China are locked in a deadly embrace.  They're not buying our Treasury Debt to be nice or "support" us.  They're buying because we have exported our inflation to them for more than two decades, and they're desperately trying to prevent it from destroying them.  See, when you make $1/day (or $2/day) inflation is the difference between eating and not eating, and hungry people have a habit of reaching for pitchforks.  Since there are about 1 billion of them (ordinary Chinese) and a much smaller number of military and leadership, well.... you do the math.

But that "buying" of our Treasury Debt has fueled your (and your Republican cronies) desire to spend beyond all reason.  This distortion has allowed the government to blow money it does not have for more than a decade without watching interest rates ratchet inexorably upward, as happened to Bill Clinton and those before him.

The problem is whatever can't continue forever won't, and if you've been induced to borrow "interest only" (as our government always has) and the interest rates start to rise you can be bankrupted even if you stop borrowing.  Your refusal to recognize that nobody can survive for long when you take in only half of what you spend, borrowing the rest, is an outrage and insult to anyone with an IQ larger than their shoe size.

Speaking of outrages, let's go down the list of current ones.  We can start with the SIGTARP report on AIG and their counterparties.  While AIG might have been free (under the law) to sell "insurance-like contracts" with no capital behind them, there is nothing that forced The NY Fed (and The Federal Reserve generally) to allow regulated bank-like entities to purchase those swaps and count them as "money good hedges."  Yet the very boob who apparently did that, along with intentionally overpaying counterparties, was appointed by you to head the Treasury.  I suppose none of us should be surprised at this revelation by Mr. Barofsky, given that one of Timmy's qualifications to head the Internal Revenue Service was that he didn't even bother paying his own taxes.  You do realize the example this set for other Americans, right?  Is that wise, given that the government is undoubtedly going to try to extract more and more tax money from the rest of us in the years to come?

Then there are people like Lloyd Blankfein, who yesterday "apologized" for "participating in things that were clearly wrong."  I know you created a "government-wide task force" as of yesterday to "fight financial fraud", but somehow I doubt we'll see the person who made a public admission yesterday of "participating in things that were clearly wrong" in the dock.  Indeed, yesterday we were treated to a revelation that Sacramento is suing a bunch of banks for bid-rigging and kickbacks - suspiciously similar to what apparently happened in Jefferson County Alabama, in which JP Morgan/Chase agreed to a fine and "foregone profits" of nearly three quarters of a billion dollars - while "not admitting guilt."  Pardon my cynicism, but I've yet to see anyone willingly hand over nearly 3/4 of a billion dollars unless they're concerned that they might lose a lawsuit or worse, be found guilty in a criminal trial.  It would seem to me that this "task force", if it really is intended to do something productive, would start at the top - with Racketeering prosecutions aimed at our largest financial firms.  But that's not going to happen, is it?

Speaking of "OCCE" (operating a continuing criminal enterprise), what about drug companies?  There's a bit of a problem there too, no?  Are not the drug companies one of the beneficiaries of your alleged "Health Care Reform"?  After all, you're not going to strip them of their re-importation protection, are you?  Why not? 

Far more important however is where a "gentlemen" (Kindler) wound up after not one but two criminal guilty pleas by Pfizer for the same crime.  He was elected to the board of the NY Fed.  Are you as proud of Pfizer's record as is Mr. Kindler is as their former CEO and General Counsel?  It appears so - not only does your "health care" proposal not bar deals with drug companies that have twice pled guilty to the same felony, not only is Pfizer still operating as a corporation (where any "natural person" who did the same sort of thing would be sitting in the hoosegow) but in addition you've sat back silently while their CEO is appointed to one of the chief banking regulatory positions in The United States!

Here's the problem at the end of the day Mr. President.

You were elected on a platform of "Hope and Change."  In point of fact the only change we got is the change at the bottom of our pockets - all the rest of our money has been siphoned off by the very same robber barons and banksters that have corrupted our nation for decades.  You've done exactly nothing to prosecute them for their previous actions or prevent them from doing the same things in the future.  Nearly a year after your election Citibank served upon the American people a 29.9% "rate jack" on their credit cards - an "atomic bird" served up by one of the largest financial firms in The United States, and one that the government now owns a large stake in.  This was a slap in the face of Americans by THE GOVERNMENT - that is, YOUR ADMINISTRATION.

You claim to be for the working class people in this country, yet you bow down to China paying people $1/day to assemble junk products, from capacitors that explode (found in literally millions of pieces of electronics) to melamine-laced "food products" to poisonous toothpaste to corrosive drywall that destroys wiring, plumbing, and, allegedly, the lungs of US Citizens.

We continue to hear that we "must reform health care" yet just recently Pfizer pled guilty to a criminal felony that it previously, years ago, pled guilty to before.  Nobody went to prison, and the fine levied was less than 1% of the firm's market capitalization.  A mere cost of doing business.  These are the "engines" of Americans' health you wish to protect with laws that force we the people to pay for the development of drugs and medical devices that are then used worldwide - without the rest of the world paying "their fair share" for the developments that save their lives.  We're a generous people but don't you think such charity should be by choice rather than extracted at gunpoint? 

You refuse to step in and force The Fed to be audited, even though you could get behind Representative Paul and demand it happen.  Why?  Is it because you're protecting the very people who ripped us all off?  There are those who believe the true purpose of your Chinese trip is to find a way to pry open the doors in China so our Banksters can loot them, since the blood all seems to be gone from Americans - the vampires simply drank too much and killed us all.  There's one small problem with that plan, if indeed it is your intention - in China they shoot people for the sorts of things that the banksters did over here.  Call it a "feature" of Communism if you'd like.

Let's face it: America may need some protectionism.  Americans can't be expected to compete with $1/day - or $2/day - in wages.  While this "looks good" for a little while as prices come down just as business profits look good when you fire people in the quarter you do it (witness the last two quarters of "earnings") those employees who lost their jobs can't buy anything in the future, as their income has evaporated!  They wind up on the dole, and this drives our budget deficit from 20% of our Federal Budget to roughly 50%.  The pegs and forced buying of Treasuries that have allowed this to happen won't last forever, and when (not if) they snap they will force a Federal Government default.  Thus, my statement in the open letter to China's Premier - we're not going to pay you. 

Some have claimed in comments I received that my views in that letter are some sort of jingoistic orgasm.  Nothing could be further from the truth; my views are simply an expression of mathematical fact.  Math is the only true science.

Speaking of the math, I'm sure you're aware that about half the nation loved you at the time of your election and the other half hated you.  That's a "feature" of American politics, of course.  But I would be concerned for your job security down the road if you don't change course.  After all, the SEUI and UAW both were strong supporters, as were the "ordinary people" who bought into your "hope and change" mantra.

The problem is that you haven't kept any of those promises.  Your "stimulus" didn't, your "Recovery Czar" has refused to certify the jobs "saved or gained" numbers (that's because they're flat lies, as is obvious from the employment situation report's household survey) and a huge stock market rally aside, there hasn't been any real turn in the economy.  Instead Wall Street is feasting on the destruction of the dollar, which is a direct consequence of your policies - spending more than one makes eventually destroys confidence in the strength of your balance sheet, and the puerile acts of a Fed Chairman who you claim to support for re-appointment in his futile attempt to keep the musical chairs game going isn't helping matters.  You could stop this tomorrow by demanding that Bernanke raise rates to a mere 2% immediately or you'll replace him with someone who will - after all, his reconfirmation has not yet occurred, and your nomination can be withdrawn.  You could fire Timmy and direct Mr. Holder to prosecute all of the crooks on Wall Street that stole the hopes and dreams of millions of Americans, then looted their retirement accounts on top of it.  While your admission of the obvious this morning - that "too much debt could lead to a double-dip" sounds good, the fact of the matter is that it is your administration that has piled on most of this debt - and continues to do so.  Are you admitting - in advance - to what's to come next year?

Best of luck to you Mr. President - from where this commentator sits, given the underlying realities of the economy and exploitation of our working class and your willful blindness to the mathematical realities of our fiscal and economic situation, you're going to need it.

Sorry Lloyd: NO SALE

“We participated in things that were clearly wrong and have reason to regret,” Blankfein, 55, said at a conference in New York hosted by the Directorship magazine. “We apologize.”

But then there's this...

Goldman Sachs, the most profitable securities firm in Wall Street history, had a record profit in the first nine months of this year and set aside $16.7 billion for compensation expenses.

No they didn't.  Their "profit" was entirely ill-gotten.

About $10 billion from the government via the AIG conduit, which they had a ZERO chance of collecting had AIG filed bankruptcy.

Another $21 billion financed at RADICALLY below-market rates due to government guarantees - that is, an explicit taxpayer subsidy.

That money is not Goldman's.  It is ours.

Furthermore, the standard for forgiveness among Christian faiths for sins requires certain things.  Specifically one must:

• Be sorry for one's sin.  Lloyd professes to be.  Ok.
  
  
• Forswear sin in the future.  To do so one must identify the specific sin(s) for which one is atoning.  So far, Lloyd hasn't done that.  Exactly what things did you do that were wrong Lloyd, and why are you trying to evade whatever lawful and reasonable punishment might come from making a full account of your activity?
  
  
• Make penance where possible.  In this case it is possible, since the sin involved money.  Yet Goldman and Lloyd have made no penance whatsoever, despite the myriad people who got hosed as a direct and proximate cause of activities he now admits were wrong for Goldman to engage in.

Goldman may be the "most profitable" Wall Street firm but I will simply observe that it is trivially simple to be "profitable" when one does wrong, since it is always easier to make money by doing wrong than by acting with honor and propriety.

No Lloyd, your apology is not accepted, as it is insincere.  You are simply trying to deflect attention from the well-deserved hit to your reputation - a reputation that, from my perspective, is somewhere south of Satan's.

Have a nice day Jackass and may you burn in Hell.