Cell Coverage in Bullpen of Saint Louis

Some background, on the communication problem between Tony La Russa with his bullpen. Twelve months ago, the St. Louis Cardinals fired bullpen coach Marty Mason, the longtime right-hand man of pitching coach Dave Duncan. John Mozeliak’s move was one indication why there had been hesitation on the part of Tony LaRussa to announce his return to manage this year. On only a one year contract.

In the eighth inning of pivotal game five of the World Series, Tony La Russa explained that twice the bullpen “didn’t hear Jason Motte’s name– did not get Motte” up to warm up. “I don’t know if it was noisy…probably real noisy. They just didn’t hear the second time.”

Twelve months ago, Marty Mason had been replaced as bullpen coach by Derek Lilliquist, who since 2002 was in the organization, previously working as pitching coordinator at the team’s Jupiter, Florida spring training headquarters as part of injury rehabilitation. Lilliquist had moved into the dugout during the entire run in September 20111 which earned a wildcard spot, as pitching coach Dave Duncan took a leave of absence due to his wife’s health. Lilliquist’s job duties had never involved talking on the bullpen phone until this season.

There has been tension within the Cardinal organization ever since Walt Jocketty’s firing as general manager. Tony LaRussa still was having to address the different philosophy of owner Bill DeWitt and the other members of the organization to the press, it was said in 2010, on questions about the relationship between the Cardinals’ minor-league development and the club’s major-league coaching staff. And it was getting more and more personal.

Twelve months ago general manager John Mozeliak demoted longtime La Russa confidante Barry Weinberg –Cardinals head trainer since 1998– to assistant trainer, reversing roles with Greg Hauck who was promoted to head athletic trainer. Weinberg had also worked during La Russa’s 10-year term in Oakland as part of his overall sixteen seasons as Oakland A’s head athletic trainer for 16 seasons.

So last night, when asked the sort of procedure when you call down to the bullpen, as to who gets the word, and how do the convey it, Tony said: “The bullpen coach hears it, and like he heard Lynn.”

LaRussa said he wanted right-hander Jason Motte in a matchup with Texas’ right-hand-hitting Napoli, so he called down to the bullpen, but coach Derek Lilliquist misunderstood his instructions. According to the Saint Louis Post-Dispatch:
Question: ‘He heard Lynn?”
Answer: “Yeah. That’s why Lynn got up…and I went out there. I thought it was Motte …and they were yelling at me as I went out. I didn’t hear them. It wasn’t Motte. So I saw Lynn, I went, ‘Oh, what are you doing here?’”

When LaRussa signed his one year contract for the 2011 season, it was the makeup of his coaching staff which was believed to be the final detail in his decision whether he would return. Was it with his eyeglasses on or off that LaRussa had said twelve months ago that 15 years is a long time for one manager in “one place,” that the organization might benefit from “freshness”?

The Cardinals were an organization which had fired Jocketty, fired Marty Mason –Mason had worked under La Russa for the 12 seasons after working as a Triple-A pitching coach from 1997-1999 — demoted Weisberg, and had a manager whose contract was up in two week.

Bobby Valentine attributed a major mistake to the move by Tony LaRussa, though the ongoing power struggle within the organization — unchanged since that departure of Walt Jocketty — showed up in the call to the bullpen last night, and might have determined the champion of the World Series. Tony LaRussa never really let those kind of mistake happens. Though he has said he would never manage another team after the Cardinals, the timing might be right for White Sox Chairman Jerry Reinsdorf to pull the plug on his general manager and hire a new White Sox general manager. According to two team sources, meetings at the conclusion of the World Series will involve Jerry Reinsdorf, a few front office executives, new manager Robin Ventura and his coaching staff, and only a few selected scouts. The timing seems right for Reinsdorf to bring back his one-time manager to Chicago. To take some of the Theo spotlight back to the southside.

Ten Years of Central Bank Policy

Quantitative Easing as one grand conspiracy with the ongoing central bank policy?

We were living in the information age—or too much the disinformation age? There was a difference between legitimate economic growth and debt-induced demand. The failed leadership of not just a Republican president and a Democrat president, but a Congress that over ten years passed the bailout, passed the Patriot’s Act, and has funded without a rise in taxes the ongoing wars in Iraq and Afghanistan.

And with the monetary policy which has funded these wars, on the backs of all economies which used the hegemony of the US dollar, was it intervention or manipulation with monetary policy, to get a party re-elected? Someone left the cake out in the rain, and it took so long to make it, it took so long to bake it, and we’ll never have that recipe again.

The dishonesty of it all. All of this liquidity created by going into debt, at below two percent interest, in the aftermath of September 11, during the invasion of Iraq and into the election, as this Fed took historic fiscal and monetary strides on the back of the bubble, with this cheap money policy. TrimTabs tracks liquidity flows in the market, and the source of approximately $600 billion net new cash which had lifted the market capitalization overall by $6 trillion in 2009 could not be identified from traditional players by TrimTabs. The money, Charles Biderman said in a statement, had not come from retail investors, foreign investors, hedge funds or pension funds. It was more than eighteen months ago when Charles Biderman, chief executive of TrimTabs Investment Research, said, “We cannot identify the source of the new money that pushed stock prices up so far so fast.” So market manipulations by governments? Charles Biderman did admit he held no evidence of market manipulation, though he had his suspicions. Who was manipulating the market? When such manipulation by the Federal Reserve and the Treasury Department clearly was illegal.

Home equity loans. All the speculators and the scalpers on e-bay. Clearly there was manipulation of one market– the real estate market — which all began with the Fed’s monetary policy. So how many other markets were manipulated?

The Federal Reserve chief knows that the stock market is the world’s largest thermometer. What happens to journalists who center their perspective on serving the interests of power and gaining proximity to it, aligning their beliefs and priorities with those of the state. People who speak not to those in power but report on the truth? Did you trust themselves strategic partners who sponsored the broadcasts? On cable networks? Did you know that the paradigm set up had arranged for Fox Sports Networks to get $48 million per year direct from your cable company? The cable system approved by local governments. The governments like in the city of Minneapolis which had a mayor promoting — after the horse was out of the barn — another new stadium.

The dishonesty of it all. What happens to governments which spent so much on security? But quit regulating with the power vested in commissions? The television media, its sponsors, and all of the many spin doctors living close by with an ability to provide and package information, filter unwanted noise and offer dynamic real-time insight – all in the context of total transparency–as a precursor to the next generation. The lobbyists. American media always want to fit events in the region into an American narrative.

The only difference, writes Todd Harrison, “between intervention and manipulation is one of advanced communication. When the Bank of Japan telegraphs their actions and buys yen, it’s intervention. If they don’t communicate their actions, then it’s manipulation. It’s a subtle yet important distinction that is the difference when discussing central bank policy.” He wrote in 2005, “In particular, I’m concerned that one of two things must happen in the years ahead. Either the US dollar must further devalue, as it has to the tune of 25% since 2002, or asset classes will deflate in synch. I’m unsure if these are mutually exclusive events but we’ll likely jockey between the two as we figure it out. I will also offer that the greenback will serve as a proxy of isolationism as America delicately dances through a difficult war and sets protectionist policies in place.” That dollar is now down forty percent.

Instead of building a counter narrative with any kind of vision of different perspective, journalists too often perpetuate the dominant ideology. In my locale, the NBC affiliate is leading the news each night with stories about building a new billion dollar stadium for the Minnesota Vikings – with government money. As the elites of the world, the top one percent, owns almost 40% of all wealth in the United States, as compared to 13 percent twenty-five years ago.

What happens to government and systems of governments which spent so much time disseminating illusion? It had been the media which had produced too much of the present day “values” as opposed to those who could critically resolve problems.

Newly Engineered European Bailouts

“We are in the middle of a crisis. It is not over. It is to be taken seriously, but it is centrally an American crisis.” – German Finance Ministry spokesman Torsten Albig on September 15, 2008.

Economic physics. Can you spell C R A S H? The Great Depression was all about a crash. Credit markets dried up after The Crash on Wall Street. Secular declines, market trends which head in the opposite direction, follow crashes in long time frames anywhere from five to twenty-five years. With all the earmarks of deflation now setting in, in Europe.

WHILE EUROPE SLEPT

“At this stage, we’re quite confident.” – A spokesman for the French Finance Ministry, who said that French banks and French government debt agency, Agence France-Tresor, are not in danger from the market turmoil in the U.S. on September 15, 2008

The system. European banks have become pretend banks, with no money. Across Europe, according to Autonomous Research, loans to banks exceed their deposits by 6 percent. Among French banks, loans exceed deposits by 19 percent. In Greece, they swamp deposits by 32 percent.

THREE YEARS AFTER

On Saturday, Finance ministers and central bankers from the Group of 20 called on European leaders to deliver a comprehensive plan to address the European continent’s deepening sovereign-debt crisis. On Wednesday, representatives of the European Union had told European banks that they need to raise more capital to protect themselves against losses on sovereign debt, or politicians will do it. The G20 meeting included non-European countries who have pushed Europe to speed up the plan taking shape among euro-zone countries to address the euro crisis, with the scramble to save the euro and prevent Greece’s debt woes from spreading. Ah, I think they have not been reading the papers about the monetary wars.

About the market dynamics which serve as the regulator out of control world of currency. The Post Traumatic Stress Syndrome on currency which came to all currency out of monetary wars. The current euro crisis was such an after-effect. After the dollar has eroded forty percent over the past decade, the recent rise of the dollar over the past sixty days has itself been a cause of worry in the United States? To whom? Do you need further proof that a weak currency is inflationary than a trip to the grocery store?

If you believed the experts – and I do not – the cause of the bubble which began hissing in 2008 was sub-prime loans, as the political spin doctors in Washington were able to point fingers at bankers rather than at this monetary policy set by the Federl Reserve Bank and the Treasury Department.

It was a world where governments levy taxes not to finance its operations, but to give value to its fiat money as sovereign credit instruments. French Finance Minister Christine Lagarde in June 2010 had said that budget consolidation is “priority No. 1” for most G-20 members, as Timothy Geithner at the conclusion of the June 2010 G20 meeting expressed concern over the confidence in the system.

The current [euros?] crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. We are now in a period of wealth destruction. The system is broken.” — George Soros

Can you spell C R A S H? That is what wealth destruction is all about. Less concerned about the loss of buying power for their own citizens, a lot of nations pursue a policy of a weak currencies, hoping that will help their exporters. Especially in monetary wars which have funded the American wars in Iraq and Afghanistan, with no rise in taxes leveled on an American public over the past ten years.

As the European debt crisis threatens to halt an anemic global economic recovery, and efforts to deliver a plan to address the crisis dominated discussion at the G20 Paris talks. here is recent discussion over direct exposure of the U.S. financial system to the countries under the most pressure in Europe, with little regard to the indirect exposure. Last week, officials at Morgan Stanley worked overtime trying to calm investors about the bank’s $39 billion in exposure to French banks at the end of last year, not counting hedges and collateral. The total amount of insurance written do not reflect other offsetting trades that bring down these banks’ actual exposure significantly. For investors, the challenges in trying to assess the true exposures are real. At the end of the week, Morgan Stanley appeared to have relieved some investor fears over its exposure to Europe. (Some analysts argue that the amount today is far lower than $39 billion.) Therefore investors have to trust that the institutions are being appropriately rigorous .

“Many of the risks in these institutions are maddeningly hard to plumb, and open to a range of interpretations as banks reduce their exposure to a possible loss by the amount of collateral they have collected from a trading partner. Is the collateral that has been supplied to secure derivatives contracts solid? Is the bank valuing it properly? Can it be located quickly?” asks Gretchen Morgenson. How about in a deflating European economy, when there is no money being loaned?

Monetary war. After the Bank of England announced, in a desperate effort to stave off a new credit crisis and a UK recession, it would pump more money into the economy, the cost of borrowing sterling for three months in the London interbank market fell Friday, its first drop since June 8. Meanwhile, the cost of borrowing dollars and euros for three months in the London interbank market rose last Monday. Ten days ago the Bank of England had announced a fresh round of quantitative easing to stimulate economic growth, meaning it will print an extra GBP75 billion of cash to buy bonds. Data from the British Bankers' Association showed the three-month sterling LIBOR (London Interbank Offered Rate) falling to 0.95875% from 0.96000%. The spread between the three-month dollar LIBOR and the three-month overnight index swap rate–a barometer of banks' willingness to lend–widened to 30.4 basis points from 30.2 basis points Thursday. The euro rate rose to 1.50375% from 1.49563% Thursday, while the three-month dollar rate rose to 0.39111% from 0.38778%.

European banks now have become pretend banks, with no money. Across Europe, according to Autonomous Research, loans to banks exceed their deposits by 6 percent. Among French banks, loans exceed deposits by 19 percent. In Greece, they swamp deposits by 32 percent, writes Gretchen Morgenson.

This is why, writes Gretchen Morgenson, it is becoming such a problem for European banks that so many short-term lenders are declining to renew when loans come due. Money market funds, traditionally big investors in short-term paper issued by European banks, have been reducing exposures. A recent Fitch Ratings report shows that for the two months ended July 31, the 10 largest United States prime money market funds pared their holdings in European banks by 20.4 percent, in dollar terms. In the same period, the funds cut their exposure to Italian and Spanish banks by 97 percent.

But these money funds, with total assets of $658 billion, held $309 billion in debt obligations issued by European banks. That’s equivalent to 47 percent of these funds’ total assets. “We’re seeing a lot of the same things in the markets that we saw in the Lehman era,” Carl B. Weinberg, chief economist at High Frequency Economics in Valhalla, N.Y., told Gretchen Morgenson.

“The economic performance of euro zone countries is diverging at a fast clip,” writes Fred Norris of the New York Times, “when financing became hard to get for many exporters, and customers slashed orders.” The divergence is caused by the battle of deflation with inflation, in the long recognized monetary wars. The trend in countries like Germany is continuing for countries whose economies are in decent shape, though the recovery in trade in other European nations appears to be over. “The issue now is a simple one – the buyers cannot afford what they used to buy, writes Fred Norris. “Imports have returned to pre-crisis levels in Italy and France, as well as much more dramatically in Ireland, Portugal and Spain”— the largest nations forced to seek bailouts.

Pretend banks in a pretend world of union. These European nations have no more unity, never had union, like so many couples living together in sin. And when the going gets tough, a lot more people getting going or just tossed out.

Carl B. Weinberg outlined to Gretchen Morgenson of the New York Times what he sees as the major risks which fall into two categories. “Outside the U.S., we never really resumed credit growth since 2009,” he said. “Another hit now would bring credit down and impose a huge squeeze on small businesses throughout Europe and over here also.” Of the two areas of major risk, explained to Gretchen Morgenson, one is the potential for losses incurred by financial institutions that wrote credit insurance on European government debt and the European banks which own so much of that paper. The other major concern is the likely economic hit as banks in the euro zone curb lending significantly. A crucial mechanism linking financial players in the United States to the problems in Europe involves credit derivatives contracts. Carl B. Weinberg expects credit around the world to become even scarcer.

Accounting rule makers even disagree about the right way to approach the manner in which an institution offsets its winning and losing derivatives trades to come up with a so-called net exposure. Standard setters in the United States allow an institution to survey all the contracts it has with a trading partner and compute exposure as the difference between winning trades and losing ones. The Bank for International Settlement, Gretchen Morgenson point out, has a different standard for European banks.

“Stock investors have a bad habit of dismissing problems in the credit markets until it is too late. Make no mistake: the troubles of Europe and its debt-weakened banks will imperil the United States.” For many, it is no longer a question of whether but WHEN Greece will default on its government debt. “Back in the summer of 2007, the stock market was roaring, despite obvious problems in the mortgage market,” writes Gretchen Morgenson.

When credit is the air that business breathes. All over the world. In China, Cheng Siwei, head of Beijing's International Finance Forum and a former deputy speaker of the People's Congress, said interest rate rises and credit curbs to cool overheating were inflicting real pain on thousands of companies used by local party bosses to fund the construction boom. "The tightening policy is creating a lot of difficulties for local governments trying to repay debt, and is causing defaults," he told a meeting at the World Economic Forum in Dalian. "Our version of subprime in the US is lending to local authorities and the government is taking this very seriously."

If he had been correct about the United States in 2008, when Willem H. Buiter then of the European Institute, Professor of European Political Economy, London School of Economics and Political Science said that there “was little doubt, in my view, that the Federal authorities will choose the inflation and currency depreciation route over the default route,” his theory would seem to apply to the Eurpean Union. “Together will the foreseeable increase in actual government liabilities because of vastly increased future Federal deficits, this implies the need for a future private to public sector resource transfer that is most unlikely to be politically feasible without recourse to inflation. The only alternative is default on the debt.” He now works for Citibank.

And about those credit derivative that got AIG into the bailout. Still they are sold, unregulated, without requirements for companies to post reserves like the state regulated insurance industry. And speculators can really play games in such markets, with so little supervision. When the next bubble pops, the credit derivative folks with their Ponzi scheme will be the only people left with money.

Of course those European regulators did not address their own problems. In the words of Gretchen Morgenson, ""ONE troubling aspect of the euro zone crisis is just how large the European banks’ sovereign debt holdings are. "At many institutions, the positions dwarf what American institutions held in mortgage-related securities, for example, when compared to book values. Why? Regulators encouraged European banks to hold huge amounts of European government debt by letting them account for these investments as if they posed zero risk. — and that meant the banks didn’t need to set aside a single euro in capital against those holdings. Now, according to an analysis by Autonomous Research, 43 large European banks hold debt in troubled sovereigns that is equal to 63 percent of those institutions’ book values. Adding to the peril is that these banks are funded primarily by short-term investors, like buyers of commercial paper, rather than by depositors, as is more often the case with American banks. This was the same problem faced by Bear Stearns and Lehman Brothers, which collapsed after short-term lenders fled in panic."

Economic union was not true union. And in the age of the divorce, in the sign of the times, the custody battle was foreseeable in this failed relationship issue, involving credit cards.

“The average life span of the world’s greatest civilizations has been two hundred years … and once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent … overspends … with costly wars. Wealth inequity and social tensions increase. And society enters a secular decline.” –Marc Faber

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Gradual Appreciation

Monetary wars: On Tuesday the U.S. Senate considered a vote on al bill which threatens China, unless it revalues its currency, with broad-ranging sanctions, while ignoring a whole host of other factors in the Chinese economy which distort price signals, beyond currency. Some here, like Senator Charles Schumer, apparently think that the US still has the broad power which the national economy provided following World War II. Proposed by New York Senator Chuck Schumer, the motivation in this legislation has more to do with an upcoming national elecction of the ongoing recession, and less to do with Chinese inaction. Over the past twelve months, China actually has allowed the renimbi to gradually appreciate by 5.2% which means Chinese goods are at least 10% more expensive than one year ago. The intent of the Senate bill was directed at persistent high unemployment in the States. The Senate bill would likely damage U.S. relations with Beijing, said China’s Vice Foreign Minister Cui Tiankai.

The yuan appreciated to 6.3486 per dollar, the strongest level since China unified the official and market exchange rates at the end of 1993. With mounting concerns about China’s growth, fears of yuan depreciation could spark outflows of speculative funds. Setting the official yuan-dollar exchange rate at a record high signals a commitment to letting the currency rise, forestalling destabilizing capital flight. Amidst speculation policy makers will tolerate gains after the United States accuses China of undervaluing its currency, at moments like this Beijing often will attempt to guide the yuan higher to take the ire out of complaints from trade partners – in a little exchange-rate diplomacy. When you sat on billions in reserves, you had a few monetry moves to make from your quiver.

The strategy in Beijing was one of gradual appreciation. Tom Orlik of the Wall Street Journal writes, don’t bet on a change in China’s exchange-rate strategy. Since the the end of June, the Hang Seng China Enterprises Index has fallen 35 percent. “Yes, China heads into the possibility of a second global downturn with more problems than it did the first,” writes Orlik, “but markets have gotten ahead of themselves.” China’s main weaknesses are its dependency on exports and a real-estate bubble.

A weaker dollar does continue to boost investment demand in commodities. The yuan’s rebound came after data earlier this month showed a continued expansion in manufacturing activity in China. The strength in the yuan comes despite the Chinese central bank’s efforts to guide its currency slightly weaker after a week-long public holiday, with mounting Chinese domestic inflation. The larger-than-expected increase in Sep U.S. payrolls reduced recession concerns. After a week-long holiday, with resumption of trading, the Shanghai Stock Index fell to its lowest level in sixteen months on speculation the government will maintain tighter monetary policy. The euro rose to a one-week high against the dollar after German Chancellor Merkel said European leaders will do “everything necessary” to ensure that banks have enough capital, and after the European Commission said it will make proposals in the coming days on possible coordination of bank recapitalization in the EU. One day after German Chancellor Merkel and French President Sarkozy said they will deliver a plan to recapitalize European banks and find a “durable” solution for Greece’s debt load by the November 3rd Group of 20 summit, no details have been provided. Promises, promises, by those new Romantic European leaders who were supposed to be expanding the bailout fund for those in the euro zone, who use the euro. That had been the content of the July 2011 agreement by leaders who now were in largely inconclusive talks. The July agreement did require unanimous approval from member state parliaments, though Slovakia, along with Malta, had yet to approve it. With a vote on the matter due in the Slovakian parliament Tuesday, on Monday the Slovakia governing coalition failed to reach a compromise on an endorsement.

Relationship issues. In the age of divorce, the G20 nations, seeing but not knowing what the commitment issues involved. Other Asian stock markets advanced on optimism that European leaders will resolve the region’s debt crisis and boost the earnings outlook for Asian exporters, despite Fitch Ratings downgraded of Italy’s and Spain’s credit ratings at the close of the Friday’s market.