Monday, September 26, 2011

BBC Speechless As Trader Tells Truth

Jolie Rouge left a link to a doomsday video that echoes what the Baron has been saying. The subtitle is: "The Collapse Is Coming...And Goldman Rules The World"

Of course the little anchorette who was "speechless" will no doubt still have her government job.


Hey, if this guy isn't sleeping well, maybe we shouldn't be, either? It won't make us any less poor, but it provides a delusional sense of control if one lies awake and worries. Works for me. Kind of.


A comment from the Youtube page:

Run to dollars and treasuries?

I consider this guys motivations to be suspect.

Look! A guy who criticizes Goldman Sachs, who knows we're heading for a collapse, and who pals around with some "smart investors!" He's buying Dollars and Treasuries -I better go out and get some of those right away so I can protect myself and make money just like him!

What's his name? Shill Plant?

He sounds mighty like some of our astute readers, no?

So I'll amend my original statement: the Baron never did say he thought Goldman Sachs ran the world.

28 comments:

Robert Marchenoir said...

What strikes me is how many people seem to relish the supposed coming crash. This guy certainly does. He said : I don't care ; this is an opportuniy for me to make money.

Other people, supposedly "against the system", also express lots of schadenfreude over the prospect. It's almost as if they wished for it. I'm afraid those people have never experienced real, prolonged misery.

The trader said : prepare, but he didn't say how. Differents serious economists (or even investors) say they don't know what to do. Philippe Simonnot from France is one. The head economist from Swiss Wegelin Private Bank is (basically) another.

Buy (American) treasuries ? and the dollar ? Oh yeah ? While Obama prints dollar bills as there is no tomorrow ?

This guy pretends he knows. My feeling is he is trying to feed the panic. Somehow, this does not feel right.

Zenster said...

This is what happens when the ultra-rich no longer obtain their wealth through basic innovation or resource development. At least the robber barons actually created jobs by launching new technologies (the Bessemer process, automobile assembly, railroads, etc.).

The vast majority of today's financial elite have either simply inherited their wealth or amassed it by acting as middlemen or gatekeepers in various transactions. They are mere palms waiting to be greased, nothing more than leeches on the body economic.

Remember, there are only three ways of actually creating wealth; Mining, Manufacturing and Agriculture. That's it. Everything else is a service industry.

As one wag economist put it:

"A healthy nation's economy cannot be sustained by giving each other haircuts."

None of this even begins to address the issue of corruption or that ultimate perversion of free market economics, crony capitalism.

I hope to be publishing an essay dealing with this topic in the next several weeks. As of right now, Solyndra beckons.

rightplacewrongtime said...

At no point did he say what the cancer was. It is debt. And when it is not paid it is removed from the asset side of your balance sheet and then wipes out your net worth. Greece cannot pay off its debt. The large European banks and govts holding it will take a very large haircut indeed. Margaret Thatcher was correct and the unlimited generousity by the welfare states is about to end and end ugly.

filthykafir said...

"...it provides a delusional sense of control if one lies awake and worries. Works for me."

LOL. Beautiful line, Dymphna. Works for me, too. That is, it sounds real familiar, close to my own experience. I can be King of the World, fixer of global, universal, problems -- all the while lying flat on my back. Nice work if you can get it.

Cyrus said...

I'm with Robert Marchenoir on this one. After watching the video there appear to be many suspicious pauses and sidelong glances, indicating to me a fabrication. If he really thought these things would he have to deliberate over them?

Dymphna said...

we have not a speck o' debt. Somehow I don't think that's going to help.

B Stew said...

Grain of salt. And it's not just because the grave predictions it's because it is just another "expert" on the economy and their opinion. One thing I have leant through these last couple of years is no one knows anything, especially the experts.

Henrik Ræder said...

Silver fell off a cliff last week.

In other words: Buying opportunity!

Feli said...

Spain
Police in Spain arrest 5 suspected of financing terrorists

Civil Guards arrested five Algerian men early Tuesday in northern Spain on suspicion of providing logistical and financial support for Islamic terrorist activities, Spain's interior ministry said.

http://edition.cnn.com/2011/09/27/world/europe/spain-terror-arrests/

Robert Marchenoir said...

I'm not saying the trader interview is a fabrication. Just that we shouldn't consider him as the man who knows best, and whose advice should be followed to a t.

I do not agree either that service industries do not create wealth. Trade creates wealth, Internet search engines create wealth, software developers create wealth, doctors create wealth, universities create wealth. All those are service industries.

If it were not for a service industry named Blogger (and a few other ones), we would not be arguing here over what constitutes wealth.

Wealth, as an economic concept, is not only "stuff" you can hold in your hands or stash in a cupboard.

One last thought about the callous trader. It is bewildering how those types lack simple forethought. This guy spreads his name and face on the BBC, and proceeds to say, basically : I'm working towards your demise and misery, this will make me filthy rich, and don't you think I care one second about the rest of you.

If he's right about the bleakness of the future, how come he's not afraid for his life ?

I mean, the Internet forgets nothing. It's not difficult to find where he works. If we're really headed towards something dreadful, as he boasts we are, the logical outcome is riots.

Already, we've seen that some Greeks think nothing of setting fire to a bank, burning alive some hapless clerks inside, and putting the blame on the bosses who did not close shop on a day of strike.

And this guy thinks that his Bloomberg monitors, Ferraris and media connections will protect him if the worst comes to the worst ?

He's very stupid, and should be very afraid.

I'm not sure it's a good idea to follow the advice of such an airhead.

Sagunto said...

I already moved out of silver, gold, palladium and iridium some time ago and invested the lot in US treasuries. This man is only reaching out, as an independent analist, to us, financially challenged poor souls..

Kind regs from Amsterdam,
Sag.

Vortac said...

This trader looks and talks like he is after public attention only. Most likely, he is a member of the "Yes Men" organization, specializing in hoaxes and scandals.

Is Alessio Rastani a Yes Man?
http://blogs.reuters.com/felix-salmon/2011/09/27/is-alessio-rastani-a-yes-man/

Vortac said...

And of course, Robert Marchenoir is right. When the real collapse comes, traders and such will run for their lives and if the MSM manage to bring one before the cameras, you can expect to hear the old, tired "it's not our fault" speech. However, I think we still have one (last) financial and economic upsurge ahead of us before welfare-capitalism finally starts to tumble.

Dymphna said...

@Robert Marchenoir

do not agree either that service industries do not create wealth. Trade creates wealth, Internet search engines create wealth, software developers create wealth, doctors create wealth, universities create wealth. All those are service industries.

If it were not for a service industry named Blogger (and a few other ones), we would not be arguing here over what constitutes wealth.


Amen. Services do indeed create wealth. Ask my hairdresser, who makes a fine living and used the proceeds for two weeks of elk hunting. Long enough to make to make her customers restive. And she passed along part of her profits to the guy out west who runs the dude ranch where she went hunting. Or my doctor, who fares even better and uses his fees to send his children to private schools, who in turn pay their employees to teach real sujects. Or my car mechanic, without whose services I would have to learn to fly.

Universities in their present corrupt guild status? I'm not so sure. The scientific research carried on in those places could as well be done elsewhere and probably more cheaply.

Google built a better mousetrap, that's for sure. Sometimes when we're out and I can't think of something, I realize with a start that I can't just google it up right then and there.

Personally, I am pushing for some entrepreneur/scientist/doctor to come up with a way to implant a Google search engine in my forehead. They can make it look like a zebiba (yes, I just now googled for the name of the Muslim prayer bump) and then I can 'pass' as a non-infidel.

----
Vortac-

We\re all so lazy around here. I made a link out of your Rooters:

'Yes Men' organization

Of course, being on dial-up because my satelliite internet service isn't working, I can't actually open your link. I hope it worked.

Jolie Rouge said...

But yet I pray thee, be nat wroth for game;
A man may seye ful sooth in game and pley.


Whatever the real persona of Alessio Rastani, the sketch was a mainstream media 'ice-breaker'.

Paardestaart said...

What nonsense to say that traders like this man are working towards our demise and how they don't give a damn: what and how much he gives in his own time is his business, and whether he lies awake worrying for the little folks who do not know how to gild a crisis, or whether he sleeps like a baby, dreaming about the riches our stupidity will bring him - it does not change our fate one bit. He did not create the economical system in which you can turn losses into profit - governments do.
It is governments who circumvent and de-activate reality; who actually force traders and banks to plunder us. They wouldn't be doing their jobs if they didn't, because their business it is to make money. It is us who choose that system every time we vote, because we are greedy and want a free lunch. It is us who can't resist the opportunity to take other people's money, we who sell our votes in exchange for some of the spoils. We have fallen for the temptation of the wellfare state, and that it would result in our slavery we could have known.

And Marchenoir: this guy does not need the protection of his big shot cronies - all he needs is his skill and his understanding of the market.If he does not have those skills and that knowledge he will go down with the rest of us
And unless he has found a way to personally benefit from creating a panic I can think of no reason for him to expose himself to the financial world - he just tries to warn us all, by saying what many financial sages have been saying for years now.

It is very strange that so many people feel the need to say that the trader is heartless, callous or immoral: for even if he were - what's it to you?
We do not eat bread because the baker lies awake at night worrying about our hunger - we eat because he needs the money we trade him for his crusty product. This man did not create the system we live in, and neither can he change it. He can only warn us, and that's what he did.
If he worried because he knows how helpless and ignorant we are he would lose sleep - and how would that help us?

Zenster said...

Robert Marchenoir: I do not agree either that service industries do not create wealth. Trade creates wealth, Internet search engines create wealth, software developers create wealth, doctors create wealth, universities create wealth. All those are service industries.

You neglect to note that "Internet search engines" and "software developers" do manufacture something in the form of code that runs on the machines which execute it.

To quote Jim Pinto:

There are only three sources of wealth - natural resources, labor and knowledge. Natural resources (oil, minerals and the like) are tied to geography. The largest transfer of wealth in human history occurred within the past half-century - from countries that had generated wealth through productive knowledge, innovation and enterprise, to areas that had little else than their oil. Service industries and government jobs do not increase wealth - they just circulate money. Manufacturing creates wealth by taking goods of lower value, adding knowledge and labor, and creating higher value. Mining and farming create wealth for the same reasons. [emphasis added]

Again, try to imagine a nation that does not manufacture anything. Where will all the money come from that is supposed to circulate through those various service industries and pay the doctor bills?

Zenster said...

For a well-written explanation, please refer to "Creating Wealth", by Franklin Voorhes.

Wealth is principally generated in manufacturing. In Primary economies, we utilize wealth from Mother Nature. In Secondary economies, we manufacture wealth. In Tertiary economies, we move wealth around. In Quaternary economies, we prepare the manufacturing section to make more wealth. Wealth is principally generated in manufacturing.

If you are going to create wealth (which should not be confused with making someone wealthy) you must manufacture.
The more value added steps in the manufacturing, the more wealth you create.

Let’s look at the common microfinance business models. They sound good, setting up a businesswoman selling firewood, bringing soap to market, selling water filters, selling efficient light bulbs, etc. They have a fatal flaw.

Firewood is certainly needed, but a firewood business doesn’t generate wealth. Mother Nature did most of the work. The added value was chopping and distribution. That’s a fairly minor manufacturing step that adds little value. While the wood chopper got paid for his labor, the community is no wealthier and doesn’t have anything they didn’t have they day before. What’s more, if the business doesn’t integrate the agro-forestry section, the business fails completely when there are no more trees.

Retail sales are similarly flawed. Someone can buy soap wholesale from the manufacturer at Village A and retail it in Village B. Village A now has cash from the wholesale sale, and has generated wealth. Village B, however, is unchanged. The transactions were Tertiary, or retail distribution. Wealth moved around and money left the consumer in exchange for soap, but there was no net change in the community. The soap seller has a few more coins in her pocket, much of which will wind up back at Village A. Little is different in Village B.

Robert Marchenoir said...

Zenster, I suppose it depends on how you define manufacturing. Usually, the word means making material things, not lists of instructions.

If you define software writing as manufacturing code, then a management consultancy company is not a service company, since it manufactures supposedly innovative management processes which can be (and are) materialised in the form of lists of instructions contained in audit reports, manuals, how-to books, Powerpoint slides, speeches given by management gurus, etc.

Nobody is arguing that services can replace manufacturing. Only that services are as necessary as "stuff", and maybe more.

Why do people pay so much for medical care in the US, if they think it has no value and represent no added wealth ? Doctors do not manufacture diagnoses or prescriptions. They sell their applied knowledge.

"Service industries and government jobs do not increase wealth - they just circulate money."

Sorry, this is wrong. I don't konw who Jim Pinto is, but he's clearly wrong, at least for private service industries.

If I'm an accountant, my input is the disorderly economic activity of your firm as materialized by your bills and wage slips. I add to that my knowledge of book-keeping, and my output is an orderly set of figures which you need to make sense of where your money is going, develop your activity, and prevent you from going bust.

This is definitely adding some wealth to your company. In fact, your company couldn't exist without it. That's why I'm able to command some fees in exchange for my work (and not only for legal reasons).

If an accountant is not in the field of services, who is ? If a software developer is into manufacturing, then nobody is in services.

Robert Marchenoir said...

There's an irony in this. I did not take the example of the management consultancy on purpose. But I just looked up Jim Pinto's site, and by his own admission, he is...

..."An international consultant in strategic business planning, marketing, sales channel development, technology planning and acquisition strategy."

So, he fits exactly my management consultancy example.

Would Jim Pinto say that he is into manufacturing, not services ?

Or would he say that his own activity is a service industry, and that therefore, by his own definition, he is "only circulating money", not creating wealth, and that he is basically some sort of snake-oil salesman (which seems to be the implied conclusion of his demeaning view on service industries) ?

Robert Marchenoir said...

"Little is different in Village B." (In the example of the soap-buying village)

Wrong. The people in Village B are now clean, whereas they used to stink beforehand for lack of soap.

And die young for want of hygiene.

This author's argument is especially wrong since it is presented in the context of microfinance business models, which means he's writing about Third World problems.

Those are sometimes caused, or aggravated, by the lack of properly functioning service industries (and even government services).

For instance, a proven reason for some African countries' poverty is the lack of adequate transportation facilities. They are able to grow foodstuffs, but there's no freight company able to deliver them within a reasonable timeframe at the harbour, where they could reach the global market.

Also, bad government services mean that property rights are not enforced, the flow of goods is slowed to a halt by red tape and corrupt police, roads are awful, etc.

Graham Dawson (Archonix) said...

There needs to be a distinction between service industries that are created as a response to market conditions, and "service" industries that grow to facilitate government intrusions.

The former, which would include things like transportation, banking services, software development, supermarkets, workforce administration companies, temp agencies etc etc, increase productivity by offloading time-intensive but necessary activities on to third parties. This allows a hypothetical businessman to focus on his primary business.

The latter are essentially parasitic. They wouldn't exist without government intrusion (the WEEE directive in the EU is a good example - the requirement for certified recycling facilities, certified recycling companies, particular methods of recycling and so forth) require both service industries that offload that new burden, and at the same time require new "compliance facilitators", who will monitor and provide "assistance" to companies in complying with new regulations, for a hefty fee of course, with the effect that they drain a large amount of money out of the economy, and allow the government to tax a large portion of the same wealth twice. Once in the business the "service industry" that their regulations have created. And given that these regulation-dependent service industries also often have to comply with other regulations, and rely on other regulatino-depending service industries for that, and so on down the line, it becomes clear that these service industries represent a massive net drain on the economy and a massive income for the government.

urah2222 said...

His Basic Point IS Correct - do Not bet against the USA in the Long Term.
Many have gone broke doing that. Hopefully the next loser on this bet will be George Soros.

Dr. Shalit

Sagunto said...

(postscript)

Of course, the give away here is the fact that this man advises to check out govt. treasuries. That's when you know this guy isn't the real deal.

Here's someone who claims to have worked with this self-styled "trader", saying that Mr Rastani is just a salesperson from a Seminar Company.

Cheers,
Sag.

Sagunto said...

To divert some attention away from the clown featured above, here's some sensible commentary on the economic meltdown.

Sag.

Jolie Rouge said...

@Sagunto

The sensible commentary on the economic meltdown in essence sounds no different from the clowns commentary.

The neoliberal era of agent capitalism and control fraud is over, lame to demand that the real producers pay for the sins of the self appointed Masters of the Universe, talk about flogging a dead horse!

They forgat the LORD their God, woe betide them.

Sagunto said...

JR -

Sorry to see that in this instance "essence" is but a word to you, since you've missed it completely.

Take care,
Sag.

Jolie Rouge said...

@Sagunto,

The agent capitalists equivalent of the falsehood that the ancients thought the world was flat, is that nobody thought the markets would fail. This is absolute nonsense and a lie - the bad practises and possible economic collapse was recognized in the Nineteen Eighties - what do you think financed all the U.K. 120% mortgages and endless credit lines for white van man and pie in the sky businesses.

Broker-dealers have robbed out the markets and treasuries they now seek (proxy) political power to directly rob out the pockets of the man on the street.

Both Alessio Rastani and Peter Schiff advocate recession in their videos, suppose they could trade stone axes between themselves.