The deification of various hot-shot financial wizards is now coming to an end.  The very last ones, the Perot clan, Warren Buffett, the Donald Trumps of the high-flying super-rich are all going into the dustbin of history.  It was very easy to be fooled by these con men.  Buffett, for example, made a huge show of PRETENDING to be against the madcap derivatives market only to see his own ship begin to sink due to this exact same market.  And Perot, the guy with the charts and graphs who seemed to know what was going on, went piratical and ended up leveraging itself straight to the doors of bankruptcy.  And Trump is going bankrupt, yet again.

This is why we must take all these guys with an entire salt mine of salt when they tell us stuff. They are all born liars and huskers:


Berkshire’s 31% Decline Spurred by Derivatives Buffett Derided – Bloomberg.com


Berkshire Hathaway Inc. shareholders have a chance this year to do something that’s rare among the Sage of Omaha’s followers: count their losses.

Despite Berkshire’s reputation as a bear market bulwark, its stock has been walloped. The Class A shares are down 31 percent since September, to $90,000 as of yesterday, exceeding the 26 percent drop in the Standard & Poor’s 500 Index.

One reason: Chief Executive Officer Warren Buffett’s increasing use of derivatives — contracts whose value is based on the performance of stocks or bonds or the outcome of a specific event. That Buffett once called derivatives “time bombs” doesn’t calm investors.


Below is a story from the UK that has a young writer who still believes Buffett’s blather:


Wall Street crisis: Is this the death knell for derivatives? | Business | guardian.co.uk


Here is Buffett on General Re Securities, a derivatives dealer that Berkshire inherited with its purchase of insurer General Re. “At year-end (after ten months of winding down its operation) it had 14,384 contracts outstanding, involving 672 counterparties around the world. Each contract has a plus or minus value derived from one or more reference items, including some of mind-boggling complexity. Valuing a portfolio like that, expert auditors could easily and honestly have widely varying opinions.”

Instead of being horrified, alas, Buffett was a classic gnome: he saw opportunity knocking!  So while he whined about how horrible this new way of making lots of money appear out of thin air, he grasped at the tools and tried desperately to do it for himself!

Now consider Lehman Brothers balance sheet. On page 62 of last year’s accounts, under the heading “off balance sheet arrangements” you will find a staggering figure. Lehman had derivative contracts with a face value of $738bn.

Which is significantly less than JP Morgan or Citigroup’s exposure.

The notes, fairly, make the point that the fair value is smaller than the notional amount – Lehman believed the figure was $36.8bn. Even so, “mind-boggling complexity” perfectly describes Lehman’s business…

They all say this over and over again: the derivatives exposure we see in the OCC reports are not real!  No, no, no….the real exposure is less than 1% of these official figures.   Meanwhile, if any of these exposed idiots dare go under, the whole system erupts into chaos and destruction!

Complexity breeds other faults, as Buffett described. Derivatives, because they are so hard to value, make it easier for traders and chief executives to inflate earnings.  —HAHAHA—the #1 reason Buffett decided to play this scam!—They exacerbate problems if a company, for unrelated reasons, suffers a credit downgrade that requires it to post collateral with counterparties – “a spiral that can lead to a corporate meltdown,” he wrote. They create a “daisy chain” of risk as the troubles of one company infect another….

Where do we put, in hell, people like Buffett?  He is obviously a two-timing bitch and I hope his defrauded clients will recognize that this champion’s great returns in good and bad times are…identical to Madoff’s business?  I have a strong suspicion that Buffett will turn out to be another con game.

Buffett made a gloomy prediction half a decade ago. “The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear,” he said. “Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts.”


The OCC did monitor this business.  And was ignored.  If anyone read the OCC reports, they were most likely con artists like the people in this story today, looking for new ways to fleece people.   I know what goes through the brains of these gnomes: ‘I am making my shareholders much richer.  So what, if the business is fake?  They won’t know and it will never show up because the DERIVATIVES deals will protect all of us con artists from being exposed.’


Now, everyone is relentlessly being exposed.  So, Hathaway lost only 30% of its share value?  What if it goes Madoff, to 100% losses?  Impossible?  Hardly.


Treasury Announces New Plan to Aid Mortgage Holders (Update1) – Bloomberg.com


 The Obama administration unveiled a new program to help holders of second mortgages avoid foreclosure, offering cash to services, investors and borrowers who modify loan terms.

The goal is to help homeowners gain aid with second liens such as home-equity loans, the Treasury Department said in a statement today from Washington. The administration also announced a plan to revive the Hope for Homeowners program, a mortgage-modification effort that has attracted little interest from lenders and borrowers.


You can’t catch a falling knife with your tongue.  The government should know, at this point, there is no way to revive the value of shanties used for credit access to the tune of half a million dollars.  Many houses that were sold at $350 per square foot two years ago are now going for $35 a square foot or less. This was due to too much funny money pouring into banks who lent it at a much higher rate to fools bidding up the value of shanties and crummy, poorly built housing.


Interactive Map: U.S. Lags Behind Rest of World in Responding to the Growing Crisis


The US cannot spend its way out of this depression.  We have to face reality and figure out how to create capital and then use it for PRODUCTIVE value-added-labor systems.  We can send people to China to figure out how this works.  Maybe, have them memorize ‘Das Kapital’ by Karl Marx.  In that fascinating book, he talks about labor and modern factory production systems.  Lots of laughs.  Much more useful than reading Friedman’s books or listening to Bernanke.


Citigroup, Bank of America Decline on Capital Report (Update3) – Bloomberg.com


 Citigroup Inc. andBank of America Corp. fell in New York trading on concern the companies may be forced by regulators to raise additional capital.

Bank of America declined 6.6 percent to $8.33 and Citigroup dropped 6.2 percent to $2.88 at 9:43 a.m. after the Wall Street Journal said early results of the government’s stress tests show the banks may need more capital. Company executives are meeting with regulators to dispute the findings, the Journal said, citing unidentified people with knowledge of the matter.


HAHAHA.  The Stress Test seems more geared to creating stress.  And then, the government relieves this stress by flying Air Force 1 around the Goldman Sachs tower in Jersey City!  I bet everyone is now thoroughly stressed out.  Maybe we can take their blood pressure to see if this worked.  I know people in Jersey City and they are still stressed out, today.  Thank you, Air Force!


Pundits Spin Today’s Stress Test Leak

It’s not good news that Bank of America (BAC) and Citigroup (C) have been told to raise more capital following the completion of the Fed’s stress tests.


The thing is, the stress test isn’t even that stressful, so if they’re being told to raise more cash under this scenario, how much more would they need under realistic worse-case conditions?


Obviously, the US/UK attempt at running a vast banking empire with NO CAPITAL and NO SOVEREIGN WEALTH is a total barking failure!  It is dead.  The banks are bankrupt.  The Federal Reserve has no more reserves and is a federal flop.  And the Treasury lost all its gold long ago to debts.


I suggest we send a team of top officials like the idiot, Giethner, to China and have them sit down and beg Hu, the dictator of China, the Communist Dragon, to teach them all about profits, wealth and gold.  I give Hu permission to whack each of these officials with a bag of gold coins.  Maybe then, they will figure out what is going on.


Guarding Stress Test Results


Late last week, the Treasury Department and the Federal Reserve released the preliminary results of the “stress tests” to representatives of our nation’s 19 largest financial institutions—information of incredible value to investors that will not be made public for another week. In the interim, financial regulators must ensure that those familiar with the results—and their friends and family—do not profit off that information.

We encourage the Securities and Exchange Commission, the Treasury Department, and the inspector general for the Troubled Asset Relief Program to take heightened measures to monitor the securities markets over the next week to ensure the integrity of our capital markets. As described in a press release by the Fed, the stress test results represent the findings of over 150 examiners and other staff who conducted a rigorous analysis of bank capital levels and potential losses. The general public won’t find out the results of the stress tests until May 4, as these financial institutions have reportedly been issued a “harsh gag order” to prevent them from leaking any information about the test results to the press in the interim.


Gnomes can’t resist cheating, scheming, lying, swindles and other joys.  It is better than sex.   Indeed, it is all tangled up with sex.  So the ‘cops’ have to keep a sharp eye on this gang of pirates, robbers, cheats, pick pockets and criminal minds in order to force them to be semi-honest!  HAHAHA.  Right.  This is why arresting these creeps is more useful.  This is normally what we do when we see criminals at work, right?


Speaking of thieves and pick pockets, our own government overseeing these looters is….one of them, of course!


Ideal U.S. Interest Rate Is Minus 5%? — Seeking Alpha


The more you look at monetary policy both in the U.S. and around the world, the more you get the feeling that we’re having a “Tacoma Narrows Bridge moment” where strong winds have been blowing for decades and the fundamentally flawed underlying design of the system is causing ever more severe oscillations.

From the Financial Times comes this report on a new Fed study about interest rates.

The ideal interest rate for the US economy in current conditions would be minus 5 per cent, according to internal analysis prepared for the Federal Reserve’s last policy meeting.

The analysis was based on a so-called Taylor-rule approach that estimates an appropriate interest rate based on unemployment and inflation.

EMS News

Inflation confiscates savings, too. The ‘capitalist’ countries think that debt is wealth. Communist countries think gold and labor are wealth. Look at who is getting stronger and who is getting weaker!
The US system did away with the concept of ‘capital’. Instead, financiers from top to bottom all used ‘leverage’ which flowed directly out of the Bank of Japan via the ‘carry trade’. This business was extremely lucrative for the financiers who got obscenely wealthy moving debts from Japan into western markets.
The G7 tried to get rid of the gold standard and then they tried to get rid of the concept of ‘sovereign wealth’. The IMF’s leader, Rato, even went so far as to mock China for growing the world’s biggest FOREX holdings and one of the biggest sovereign wealth funds! The Chinese were not fooled. 
The ‘negative interest rates’ will simply turn a vast, black hole economic system into…a really vast, black hole economic system. Time to reinstate the gold standard for international trade resolution of contracts.


Sad, isn’t it?


G.M.’s Latest Plan Hinges on Debt Exchange – NYTimes.com


G.M. said it would eliminate another 21,000 factory jobs, close 13 plants, cut its vast network of 6,500 dealers almost in half and shutter its Pontiac division.

By the time it is finished, G.M. expects to have only 38,000 union workers and 34 factories left in the United States, compared with 395,000 workers in more than 150 plants at its peak employment in 1970.


Japan is scared to death.  Its own industry is in full collapse due to it focusing nearly entirely on invading and controlling the US markets.  They succeeded but they have to sell their stuff to someone and these someones will all be without any money, at this rate!  And the cars we can afford will have to be much, much cheaper than Japan can produce.  Eventually, the Chery and the other Chinese car companies will be better known than Toyota.  


The Chinese, at least, as they roamed the planet, trying to figure out modern capitalism, learned something.  Perhaps it is time for us to do the same.






P.O. BOX 483

BERLIN, NY 12022

Make checks out to ‘Elaine Supkis’




Filed under .money matters, Free Trade, gold


  1. bringmethefinestwines

    You’re clearly having too much fun with photoshop…that image gave me a headfreak!

  2. zip

    from http://www.occ.treas.gov/aboutocc.htm

    OCC Funding

    The OCC does not receive any appropriations from Congress. Instead, its operations are funded primarily by assessments on national banks. National banks pay for their examinations, and they pay for the OCC’s processing of their corporate applications. The OCC also receives revenue from its investment income, primarily from U.S. Treasury securities.

    Is it really independent?

    Best Regards

  3. sgl

    Ironically, Warren Buffett’s father, Howard Buffett, was a US Congressman for a few terms and was very pro-gold standard:

    Click to access buffet3.pdf

    Human Freedom Rests on Gold
    Redeemable Money
    U. S. Congressman from Nebraska
    Reprinted from The Commercial and
    Financial Chronicle 5/6/48

  4. Simon

    Buffet makes most of the money from selling options month to month, of course may also latch onto CDS when he saw them.
    Don’t forget his acquisition was at first newspaper then an insurance company, coupon clippers etc etc.
    All those involve an element of chance, which is open for abuse

  5. WB is a thug for the Roths, who are thugs for you know who. Is this so hard for everyone to understand?


    “Queen Elizabeth II the largest landowner on Earth.”

    Queen Elizabeth II, head of state of the United Kingdom and of 31 other states and territories, is the legal owner of about 6,600 million acres of land, one sixth of the earth’s non ocean surface.

    She is the only person on earth who owns whole countries, and who owns countries that are not her own domestic territory. This land ownership is separate from her role as head of state and is different from other monarchies where no such claim is made – Norway, Belgium, Denmark etc.

    The value of her land holding. £17,600,000,000,000 (approx).

    This makes her the richest individual on earth. However, there is no way easily to value her real estate. There is no current market in the land of entire countries. At a rough estimate of $5,000 an acre, and based on the sale of Alaska to the USA by the Tsar, and of Louisiana to the USA by France, the Queen’s land holding is worth a notional $33,000,000,000,000 (Thirty three trillion dollars or about £17,600,000,000,000). Her holding is based on the laws of the countries she owns and her land title is valid in all the countries she owns. Her main holdings are Canada, the 2nd largest country on earth, with 2,467 million acres, Australia, the 7th largest country on earth with 1,900 million acres, the Papua New Guinea with114 million acres, New Zealand with 66 million acres and the UK with 60 million acres.

    She is the world’s largest landowner by a significant margin. The next largest landowner is the Russian state, with an overall ownership of 4,219 million acres, and a direct ownership comparable with the Queen’s land holding of 2,447 million acres. The 3rd largest landowner is the Chinese state, which claims all of Chinese land, about 2,365 million acres. The 4th largest landowner on earth is the Federal Government of the United States, which owns about one third of the land of the USA, 760 million acres. The fifth largest landowner on earth is the King of Saudi Arabia with 553 million acres
    Largest five personal landowners on Earh Queen Elizabeth II 6,600 million acres
    King Abdullah of Saudi Arabia 553 million acres
    King Bhumibol of Thailand 126 million acres
    King Mohammed IV of Morocco 113 million acres
    Sultan Quaboos of Oman 76 million acres

  6. if

    Casino Capitalism and Financial Recklessness: Obama Has Missed His Moment

  7. openlyhidden

    IN THE NEWS : “Wall Street’s all the rage again — literally. And Oliver Stone and Michael Douglas have decided they have more to say about it.

    Stone has just closed a deal with Fox to direct the follow-up to “Wall Street,” now tentatively called “Wall Street 2,” with Douglas starring. This would provide an unusual amount of continuity since Stone directed and co-wrote, with Stanley Weiser, the original 1987 exploration of the inner workings of the finance sector and its complicated relationship with greed….”
    elaine i am serious. you gotta get to working on some screen plays about what is going on. i don’t agree with you about some, not many, things but you truly have an entertaining and unique way of seeing and expressing yourself. seriously. probably could have china premier the movie of course.

  8. openlyhidden

    in other words, i do agree with you on most things….i am always doing double negatives or whatever they are called. sorry.

  9. emsnews

    Oh no! Agreement means you self destruct! 🙂

  10. I disagree, again.
    You are one little toughie.

  11. nah

    ive noticed quite a bit with phil grahm, donald trump, warren buffet, and all the other king of the hill players… it seems our system just lacks 1 thing, more rich people who will sell us all on ‘faith based credit’… and id have no problem if it existed ‘im not 90 or nothin’ as i cant remember anything but fairly good times, but less blue collar opportunitys as the years go by… came up again at work today, we used to have an aluminum smelter and mill employed tens of thousands with good honest work… people had boats, wives, cars, houses… dudes in thair 30s and 40s…. now it seems only people with any real spending cash are secritariat or old folks… must be the mullets killed the economy

    eat your heart out white trash

  12. openlyhidden

    you’re always insulting my people. sniff.

  13. Pingback: Topics about Automobile-owners » Blog Archive » WARREN BUFFETT IS A LYING, CHEATING BUFFOON

  14. openlyhidden

    this seems strange. according to slate, it is very common for chinese people in china to give themselves english names???? wtf!
    But Duthie’s participants insisted that taking an English name isn’t kowtowing, nor is it simply utilitarian. Rather, it’s essential to being Chinese and achieving Chinese goals. Whereas in the past patriotism was expressed by self-sacrifice, it is now expressed through economic activity. So by working for, say, 3M, Chinese citizens are helping to build up China, and the English names they take on in the process are as patriotic as Cultural Revolution-era monikers like Ai Guo (Loves China) or Wei Dong (Mao’s Protector).

  15. openlyhidden

    Since 2001, all primary schools have been required to teach English beginning in the third grade (for big cities like Beijing and Shanghai, lessons start in first grade), and parents regularly choose English names for their children. China now churns out approximately 20 million English speakers each year, and the estimated number of English learners in China is in the hundreds of millions. In fact, there are probably as many Chinese who can read this sentence as Americans.
    who knew?

  16. emsnews

    My family has Chinese members in it and their parents speak English just fine. One thing about China: a billion people and most share only a very few names like Li, Yue, Tang, Zhang, Hu, etc. By putting in a foreign first name, they get to be a bit more individual.
    Also, we should be teaching our own children foreign languages in the earliest grades, too.

  17. me

    Buffett is totally unlike Perot or Madoff. He was right about complex derivatives as his prescient warning statement indicates. The “derivatives” he’s losing money on are so long-term and simple that they don’t compare to the CDS’s of the world.

  18. emsnews

    Um, we don’t know unless you are Buffett and can prove it.

  19. payAttention

    ‘They are all born liars and huskers:’

    I never thought Warren was an oracle of Omaha, but something that rhymes with shower in French, of Omaha.

    However, the @$%^ of Omaha is a husker, being from Nebraska, or a ‘cornhusker’. Trump is a huckster on the other hand. However if you want to call the uber shitbird a huckster, you understate your case. The turd came on clown tv and all the bimbettes and bully boys were besides themselves last March. The turd gave the market his imprimatur on their breakfast show. Off course the futures and the market went vertical. When the douche bag of Omaha speaks, all must listen. In those heady days, it was easy to slip in 50,000 spx contracts through the futures and option exchanges and whatever other black boxes the turd could access. Nothing like getting clown financial tv to move the market to your benefit. The SEC should have been blaring sirens and lights on their way to Times Square to pick up the thief before he left the building.

    On the other hand, I thought you would support Perot, who ran two Presidential campaigns against NAFTA and free trade. He neglected his business to do that and suffered the consequences.
    ELAINE: Pay Attention should pay attention to what I write. I mentioned how Perot used good charts and graphs to explain the obvious that the other candidates were covering up. But he then decided to become a rich, rich pirate. Fie on him and all his fellow yo-ho-ho leveraging ilk.

  20. payAttention

    ‘The US cannot spend its way out of this depression. We have to face reality and figure out how to create capital and then use it for PRODUCTIVE value-added-labor systems.’

    Perhaps you caught the article about the American shortage of doctors, gp’s as well as specialists, in the Times yesterday. That just illustrates a more widespread shortage of intellectual capital, does it not? Perhaps if I put it into the simplest terms, you will understand. It is much easier to study marketing and communications than it is to study integrated circuits and the calculus of Brownian motion. N’est pas? Worse, the finance industry, has bribed trained physicists and mathematicians to go and apply their beneficial knowledge to onanism. No problem, you can just steal more scientists and doctors from the Third World. However the opinion of the Phillipinos, Indians, Paks, Nigerian, Ghanaians, etc who lose their best and brightest to the money printers.. you might well want to consider.

  21. Paul S

    My idea for creating productive, value added systems is the COMPLETE elimination of ALL patent and copyright laws. This will unclog the court system so they can concentrate on labor issues. No more of those pesky patent infringement lawsuits. Time for US corporations to get out of the 19th century. Besides, according to Jack Welch, US corporations are world class innovators. The competitive envy of the world. US multis have nothing to fear. Think how wonderful it would be if Microsoft were stripped of its monopoly on OS for PC’s? Then everybody could produce MS Vista or MS Office. I bet the price would come down. And let’s not forget about Big Pharma. The day when US pharmaceuticals need patent protection are OVER. Let the free market rule I say. And we can save money by cutting the pharmaceutical companies off of government subsidies. Subsidies are SOCIALIST. And we know how much the right wingers like Rush Limbaugh don’t like socialism. I have more ideas, but this is a good start.

  22. Simon

    This is so true
    As I have posted before, if these economies develop in the future, the best and brightest will hesitate to come to US to work since they get better treatments in their home countries
    It is already happening with large nations like India and China. Sure they get paid less in nominal terms, but living is cheap, there is no glass ceiling and other ‘inconveniences’ they face in the States.

  23. Simon

    Back to Warren
    The pundits extolling his virtues by saying his funds management has the lowest overhead and staff costs.
    This just proves the fact that he does very little ‘work’ and the money must be siphoned off using connections, people networks and other intangibles.
    Of course in a world where work counted for something like Elaine is always going on about, this would be impossible

  24. JSmith

    “We have to face reality and figure out how to create capital and then use it for PRODUCTIVE value-added-labor systems. We can send people to China to figure out how this works.”
    Well… that would involve becoming the world’s low-cost manufacturer of choice, wouldn’t it? (And you seem to be against that…)

  25. JSmith

    The Chinese would also advise that “democracy” is a failed experiment in which the nincompoop with the greatest popular appeal gets to be in charge, and that in a properly organized (Confucian) society the individual members take their marching orders from those who know what’s best for society (which may or may not necessarily be good for the individual – but that doesn’t matter.)
    Still for it?

  26. Simon

    Well they also advise that we dispense with the two party system and just have one party with many factions going at each other wrestling for supreme power.
    Real power is won, not given, particularly if you look at how people are easily reduced to a slobbering heap, Obama’s auguration cough cough after hearing the magic words
    Change change change!

  27. Aby

    Nice Info mY Friend..(^_^)..he..3x

  28. Warrent buffett is a lying cheating buffoon

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