“Is not the State an idol? Is it not like any graven image into which men have read supernatural powers and superhuman capacities? The State can feed us when we are hungry, heal us when we are ill; it can raise wages and lower prices, even at the same time; it can educate our children without cost; it can provide us against the contingencies of old age and amuse us when we are bored; it can give us electricity by passing laws and improve the game of baseball by regulation. What cannot the State do for us if only we have faith in it? And we have faith. No creed in the history of the world ever captured the hearts and minds of men as has the modern creed of Statism.”

-Frank Chodorov

I spent a little time sharpening my rhetoric this weekend - as has become my habit for a few hours over the weekends of late - in a few of my favorite internet haunts where I’ve often found intellectual stimulation. The topic turned to religion. It is not the stated subject matter of these particular sites, and as is usual when the topic comes up in the wild, the reactions ran the gamut from sneering condescension to outright mockery.

It seems that most people who fancy themselves intellectual can’t be bothered with eternal questions (which is certainly their prerogative); unfortunately, it seems that close to a plurality - if this unscientific enumeration is to be trusted - are not satisfied with simply heaping scorn. They must silence any voice who would suggest that the religious have a right to our ‘foolishness’. They reject summarily that they have no interest or right to prevent us from passing on our beliefs to our children; They would support the right of every possible stripe of reprobate plying their own brand of debauchery, so long as they join in the mantra: “God is dead, and we have killed him”; but against the professing Christian, they will not cease to rage.

The foolishness of man perverteth his way: and his heart fretteth against the LORD.
Proverbs 19:3

Every man has faith; there is no escaping this conclusion. We place our faith in different constructs, but it is all faith. I have examined the rational arguments in favor of a divine creator, and coupled with my own faith, have settled in my mind that there is a God - even Jehovah, the God of the Bible.

My opponents of this weekend, despite their great protestations, are also long in the tooth on faith. They have faith where science has no answers. They simply choose to invest that faith in unprovable theories - in many cases theories they do not understand or even begin to fathom the implications of - they place their faith on the only construct they can in the face of a failure of their methodology, that being in man generally, and in their own intellect in particular.

They have blind faith in ’science’; and in government; and in the dogma that there is nothing after this. They demand adherence to ’science’ when it is not science; and obedience to a benevolent government who they’d have examine the beliefs of all citizens to size up whether their orthodoxy is acceptable; and will accept anything from either of the icons of the faith, without any litmus test, so long as they can avoid being bothered with knowing there are those who walk among us who don’t share their own secular brand of faith.

When things go against them, I am usually likened to a suicide bomber (and this weekend was no exception), for no other reason than that I refuse to cede any ground on my belief in a holy God who created everything and will judge us all. What they fail to see is that only one side of our point/counterpoint exercise is demanding that the other side abandon their perspective, demanding orthodoxy over reason, and threatening the heretics with sanction. What they are suggesting is a modern inquisition - it is not enough to deem believers foolish; we must be kept quiet.

I believe the day is coming when they’ll get their wish. Children will be universally owned by the state, as an extension of owning the parent; they will do away with the independent thinking cultivated in home schools and church-run enterprises; they will demand orthodoxy to the tenants of the faith by fiat; and it will be within their grasp to have the whole world join them: “God is dead, and we have killed him”.

I mean no offense to my atheist friends (of which I have many) and readers. I simply ask that you not demand that I accept your world view. If mine is foolishness, then be satisfied that untenable ideas always collapse under their own weight, and leave me to my foolishness - my faith. And I’ll promise to give you wide berth in the exercise of your own faith.

Monday was largely anti-climactic with the indexes finishing mixed. The internal makeup of today’s action wasn’t bullish, and I saw several CNBC commentators noting that today. Given my disdain for the general POV of CNBC in the generic, it has me wondering if I should reassess my bearish bias……



For now, I keep my bias. If CNBC gets on the bear wagon - I’m going long.

In the Financial Times this morning, Timothy Geithner, President of the New York Fed, calls for a global system of regulation for banks.

Geithner says:

“At present the Fed has broad responsibility for financial stability not matched by direct authority and the consequences of the actions we have taken in this crisis make it more important that we close that gap.”

This is a power grab of unprecedented scope, and would represent the first step in the codifying a global system of financial command and control.

If you’re in the ‘Government is good and benevolent’ camp, then you’re probably thinking - ‘about time they had the power to overcome the issues endemic to a system with disparate laws, regulations and capital requirements’.

I wouldn’t share that outlook.

Globalizing the banking system would give bankers and regulators more control over the global economy. That isn’t really disputed by anyone. The salient question is - why would we want to give bankers and bureaucrats more control over the world’s economy? Is it the excellent job they’ve done administrating things collectively over the national banking systems they oversee?

Allowing such an Orwellian construct to arise would effectively wrest monetary policy from the hands of individual nation states, and hand control over to internationalists and elitists with little loyalty to any nation state, and with no democratic checks. This cannot happen without a global system of government following in short order. You cannot have a supranational banking system without a corresponding political power to regulate the banks and a relatively homogenous framework of governments.

Centralization of power in fewer and fewer hands is not a positive development, but it won’t be too difficult to convince the ignorant populace that such a system is the way to recover from and avoid a future calamity such as the one we are on the cusp of. Most people will accept any broad evil if they are convinced that they themselves will benefit.

Anyone who doubts the dire nature of the outlook for the global economy should think about why Geithner would be out front-running this idea. Why now? Is he speaking off-the-cuff, or is this a trial balloon, vetted and approved at the highest levels of our financial system? I think you’d be safe to assume that Geithner doesn’t write an op-ed for the FT without vetting his commentary first. And this isn’t an action undertaken flippantly. At the very least, the seeds for an absolute catastrophe must be present. This isn’t a tweak - this is laying the groundwork for what lies ahead of us.

If you aren’t worried, I’d argue that you should be.

Geltner continues:

Since last summer, we have lived through a severe and complex financial crisis. Why was the financial system so fragile? What can be done to make the system more resilient in the future?

The world experienced a financial boom. The boom fed demand for risk. Products were created to meet that demand, including risky, complicated mortgages. Many assets were financed with significant leverage and liquidity risk and many of the world’s largest financial institutions got themselves too exposed to the risk of a global downturn. The amount of long-term illiquid assets financed with short-term liabilities made the system vulnerable to a classic type of run. As concern about risk increased, investors pulled back, triggering a self-reinforcing cycle of forced liquidation of assets, higher margin requirements, increased volatility.

What Geithner forgets, or rather hopes that we’ll forget, is that this ‘financial boom’ that ‘created… demand’ was a direct result of bad monetary policy. Effective interest rates were less than zero for about three years, and that creates a situation where commercial banks have a great incentive to push debt without a rigid regard for the real risks they undertook, and it encourages malinvestment by businesses and banks who have access to the free capital in the beginning stages of the inflating money supply.

Instituting a centralized global system only exacerbates the problem. We’d have all our eggs in the same basket, and the next time we played this same game, there would be no area of the globe immune from the problems that the US central banker’s loose monetary policy and the suckers who bought all of the dubious financial instruments “created to meet that demand” have brought us too.

The idea that the problems we face currently in the world’s economic system are a result of too little centralization would make me laugh if the consequences of Geithner’s proposal weren’t so dire. We would be entrusting control over our money and banking, and by direct extension, our freedoms - to a world full of despots, communists and robber barons.

The Fed has no power but to inflate, and inflation is the great destroyer of the wealth of the working people. The only restraining influence is that if other nations don’t coordinate these inflationary policies, the consequences are dire and obvious. Allowing a centralized authority to have the power to force coordination is a recipe for disaster for everyone except the interests who have long pressed for a fascist system that is global in it’s scope. Once they get their way, there is no longer a restraining influence on the power of the inflators to ply their trade.

The Federal Reserve in specific, and central banks in general have failed miserably throughout all of history, and every time they fail, we reward them with more power. One of these days, we’ll learn that the failure of centralized authority is not a reason to further centralize authority. Or at least I hope we will.



More on this topic later.

There’s a lot of speculation among the hardcore about what Monday brings. If anyone has a good handle on it, I’m open to hearing it.

I’m a bear, and an unrepentant one at that. I think the long term trend is substantially lower, but I’m not making big directional day trading bets. I do a little day trading around my core positions, which is 90% short at this point. I’m long COR (rallied nicely the last few weeks), GE, and hold calls on QQQQ that I picked up Friday. Everything else is short.

But with Friday’s action, I hear a lot of calls for doom on Monday. I’m not saying it couldn’t happen - but all of my indicators tell me that it isn’t locked up.

Here is a daily chart of the Q’s:



We closed right on top of trendline support from the March 17 lows.

Same story on the Dollar/Yen, a favored indicator of mine, along with the 10-year treasury:



Don’t confuse me with someone re-evaluating their bias - I am not. I’m just saying that on the most basic of technicals….. doom is not demanded on Monday.

But he may show up unannounced.