From Paul Dirac (1902–1984), British theoretical physicist and a founder of the field of quantum physics, “The Early Years of Relativity” in Albert Einstein : Historical and Cultural Perspectives : The Centennial Symposium in Jerusalem (1979) edited by Gerald James Holton and Yehuda Elkana:

It seems clear that the present quantum mechanics is not in its final form. Some further changes will be needed, just about as drastic as the changes made in passing from Bohr’s orbit theory to quantum mechanics. Some day a new quantum mechanics, a relativistic one, will be discovered, in which we will not have these infinities occurring at all. It might very well be that the new quantum mechanics will have determinism in the way that Einstein wanted.

Italy’s Banking Crisis Gets Addressed: How to Conceal a Problem that Threatens to Engulf the Entire Eurozone, by Don Quijones

More can kicking fun and games from Italy, whose banking system has both feet in the grave and is only waiting for somebody to fill up the hole. From Don Quijones at

The Art of Making Bad Debt Disappear.

Markets can move in mysterious ways. Such was the case in Italy last week when the stock of the country’s third biggest and most beleaguered bank, Monte dei Paschi, surged 59%, from €0.17 a share to a totally whopping €0.27 a share, pairing its losses for this year to just 78%. But why?

After all, nothing of real import happened over the last week, apart from an announcement from MPS’s board that it intends to forge ahead with its original plan to bolster capital and sell soured loans. None of which qualifies as new news. Moreover, the announcement did absolutely nothing to dispel the huge doubts that continue to loom over the plan’s chances of success.

The board is expected to announce its latest intentions in a meeting on Monday. Its plan appears to already enjoy the full support of Italy’s government. “I am confident of the business plan that the bank’s management has presented,” Economy Minister Pier Carlo Padoan told Repubblica, adding (tongue presumably lodged firmly in cheek): “Of course with full autonomy.”

Making Bad Debt Disappear

Hatched by advisors from JP Morgan Chase and Italian investment bank Mediobanca, the current plan essentially envisages removing bad loans with a gross value of €27.7 billion from the bank’s balance sheets. This would be done by securitizing the “assets” (i.e. chopping them up and lumping them together into nicer smelling “marketable” asset-backed securities) and then offloading these ABS onto a separate entity at their estimated net value of €9.2 billion.

That entity would be funded by €6 billion-worth of investment-grade notes — i.e. freshly conjured debt — which would be eligible for a state guarantee. In other words, if things go to hell, taxpayers will pick up most of the bill to bail out the bondholders.

The rest of the money will come from a mezzanine tranche of €1.6 billion, to be taken up by Atlante, a bad-bank fund backed by Italian financial institutions, many of them state-owned as we reported last week; and €1.6 billion of junior bonds, to go to Monte dei Paschi’s shareholders. That, in simple terms (ha!), is how JP Morgan Chase and its co-underwriters hope to make €18.5 billion worth of toxic debt vanish into the ether.

Serious Creative Accounting

The other part of the plan to save MPS is, if anything, even more ambitious than the first: to raise €5 billion in fresh capital from shareholders that already lost €8 billion in two previous capital expansions, in 2014 and 2015. Unsurprisingly, most investors are not keen on the idea. So, an alternative plan hatched by Corrado Passera, a former government minister and (in the words of of The Economist) “ex-banker,” is now under serious consideration by the board.

In all likelihood, it was this revelation that drove Monte dei Paschi’s shares to surge nearly 60% last week. Put simply, investors are clinging to the hope that an even more creative, less costly solution can be found to forestall Monte dei Paschi’s collapse, or a full-blooded taxpayer-funded bailout.

To continue reading: Italy’s Banking Crisis Gets Addressed: How to Conceal a Problem that Threatens to Engulf the Entire Eurozone


Ungovernability, by Raúl Ilargi Meijer

A grim prognosis on the health of governments in Europe and the US. From Raúl Ilargi Meijer at

Over the summer I introduced a two-fold assertion: 1) global economic growth is over (and has been for years and won’t come back for many more years) and 2) the end of growth marks the end of all centralization, including globalization. You can read all about these themes in “Globalization Is Dead, But The Idea Is Not” and “Why There is Trump” There are also extensive quotes of the second essay in wicked former UK MI6 spymaster Alastair Crooke’s “‘End of Growth’ Sparks Wide Discontent”.

When I say ‘the end of growth’, I don’t mean that in a Limits to Growth kind of way, or peak oil or things like that. Not because I seek to invalidate such things, but because I mean economics, finance only. Our economies simply ceased growing, and quite a few years ago. The only reason that is not, and very widely, recognized is the $21 trillion and change that central banks have conjured up ostensibly to kickstart a recovery that always remains just around the corner.

That those $21 trillion will have massive negative effects on all of us is not my point either right now. Just that growth is gone. And that’s hard enough to swallow for a system that’s based uniquely on that growth. That is what this ‘essay’ is about: what consequences that will have.

All that said, I don’t have the idea that too many people are willing to accept the notion of the end of eternal economic growth (let alone right this minute), nor of globalization’s demise. Which may be partially understandable, but not more than that. Instead, quite a few people may honestly feel that the end of growth will make ‘leaders’ try for more, not less, centralization/globalization, but that, if it happens, is temporary. Unless, as I wrote earlier, we see dictators in the west.

Because, as I said in those articles, the overbearing principle is, and must be, that when centralized power ceases to deliver benefits to people, they will no longer accept that decisions about their – ever poorer- lives are taken by people hundreds or thousands of miles away from where they live. People allow that only when they reap sufficient benefits from it. With growth gone, there are no such benefits left. Look at Greece and Italy and Brexit, and look at why Trump is where he is.

Since it will apparently take a while for the above to sink in – which is not because I’m wrong-, I’m a little hesitant to introduce the next assertion, which is very closely related to the other two and takes it a step further. That assertion is that there are multiple countries in the western world -and perhaps beyond- today that run a serious risk of becoming de facto ungovernable. I’ll refrain from using the term anarchy.

I’ve been playing around in my head for a while with the thought that it is striking that the last two major global powers, which together have dominated world politics and economics for over 200 years, look well on their way towards becoming ungovernable. It is perhaps even more striking that nobody appears to understand or even contemplate this.

Both Britain and America are caught in an apparent trap in which various groups of their citizens blame each other for everything that’s going wrong with their lives -which admittedly is plenty-. But that’s where the end of growth and globalization comes in: societies are in urgent need of new ways of organizing themselves, of formulating new goals, priorities and policies.

To continue reading: Ungovernability



The Democrat Nightmare On Elm Street, by Karl Denninger

Premiums for Obamacare are set to skyrocket and it couldn’t happen at a better time—just before the election. From Karl Denninger on a guest post at

In just a few days we will begin open enrollment for everyone in Obamacare now.

Eight days before the election, that is.

This is what the nation is going to face:

Dr. Milton Wolf
Obama promised your premiums would drop by $2500. He lied.

Here’s the latest round of approved rate hikes. Not merely requests. Approved.

There is nothing the Democrats can do about it either — 22 states with massive double-digit premium hikes, 7 of them in excess of 50%.

Many are considered “safe” Democrat states — Colorado, Maryland, Illinois, Connecticut, Hawaii, Pennsylvania.

Then there’s Arizona, Florida, Maine and New Mexico.

How safe is PA? Illinois will have a million dead voters show up at the polls; they’re the land of 102% turnout and nobody has gone to jail in the modern era for doing it, so you can forget that.

Everyone thinks Pennsylvania is clean for Clinton, with “Real Clear” claiming a 6% advantage. How “real” and “clear” is that, and how fast will it evaporate like a fart in the wind with 50%+ Obamacare price hikes hitting the residents of the state in the face a week before the election?

I will say it again: Trump has a card he has not played, and it’s not “repeal and replace.”

It’s jail and indict, and he needs to stick that right now out under the electorate’s nose along with these price hikes — not proposed, not thought about, but approved and coming right up the electorate’s ass a week before election day.

Kremlin Slams Demands For Assad’s Ouster As ISIS Kills Hundreds Of “Human Shields” In Mosul, by Tyler Durden

Zero Hedge probably deserves a Pulitzer Prize for its reporting and analysis of the Syrian situation. (Disclosure: Zero Hedge has featured SLL articles.) It is certainly more deserving than any of the mainstream media organs. From Tyler Durden at

While the recently unveiled Iraqi assault on Mosul (with US support) continues, in what some have speculated is an election stunt meant to liberate Mosul just ahead of the November 8 vote and provide a boost for the Hillary campaign, while others see even more ulterior motives, namely to “grant” ISIS fighters free passage out of Iraq and into Syria to fight Assad, there may be some complications. According to press reports citing Iraqi intelligence sources, today the Islamic State rounded up and killed 284 men and boys as Iraqi-led coalition forces closed in on Mosul, the terror group’s last major stronghold in Iraq.

Those killed Thursday and Friday were used as human shields against attacks forcing ISIS out of southern parts of Mosul, the source said. ISIS dumped the corpses in a mass grave at the defunct College of Agriculture in northern Mosul, the intelligence source said. The victims, including children, were all shot, said the source, who asked for anonymity because he is not authorized to speak to the media. CNN could not independently confirm the killings.

Separately, according to Reuters, roughly 1,000 people had been treated for breathing problems linked to toxic gases from a sulphur plant which ISIS militants are suspected to have set on fire near the city of Mosul. No deaths were reported in connection with the incident, said the sources at the hospital in Qayyara, a town south of Mosul.

* * *

At the same time, in Russia’s latest public bid to preserve the Syrian status quo, Kremlin spokesman Dmitry Peskov said in televized remarks on Saturday that Assad needs to stay in power to prevent the country from falling into the hands of jihadis, and added that the entire territory of Syria must be “liberated,” dismissing demands for Syrian President Bashar Assad’s departure as “thoughtless.”

“There are just two options: Assad sitting in Damascus or the Nusra sitting in Damascus,” Peskov said in a reference to the Nusra Front, al-Qaida’s branch in Syria that renamed itself Fatah al-Sham Front earlier this year. “And Assad must sit in Damascus to ensure a political settlement.” The spokesman said the goal of the Russian campaign is to fight “terrorists,” saying that the fall of the Syrian government would cause new flows of refugees and more terror attacks in Europe.

Referring to the US, Peskov then said that “some countries are trying to play with the devil and use terrorists to get rid of Assad, and some just say thoughtlessly that Assad must leave,” Peskov said. “If Damascus falls and terrorists take hold there, there will be no political settlement then.” He said there is little hope that the Syrian conflict could end soon, adding that it will require a “long and hard work by the international community.”

“The territory of Syria must be liberated,” Peskov said. “It must be liberated and everything must be done to prevent the country’s breakup, which could have catastrophic consequences for the entire region.”

Peskov’s statement comes as the break in the fighting Russia has declared in the besieged city of Aleppo entered its third day. He said Russia’s decision to extend the break, which was initially declared for just one day Thursday, wasn’t a concession to Western pressure.

To continue reading: Kremlin Slams Demands For Assad’s Ouster As ISIS Kills Hundreds Of “Human Shields” In Mosul






Want to get under the skin of the powers that be? Make fun of them! Scathing satire has always been a potent weapon in the revolutionary’s arsenal. My new novel, Prime Deceit, takes aim at power, corruption, war, and other idiocies.

Researcher Ted Wirth and his team discover a human hormone that reverses the aging process in lab mice. Nothing good can come of it when the government hijacks their research and mice for its own sinister ends. Can the team stop a global cabal of the high and mighty from perpetuating their privileges and power in perpetuity?

Support the Resistance! Thumb your nose at the high and mighty! Prime Deceit will be available later this month or early next month as an Amazon paperback or a Kindle ebook. If you don’t want to wait, here’s a special offer for Straight Line Logic readers.


All I ask in return is that you post a review of Prime Deceit on Amazon within a week after publication of the paperback version. At the average reading speed of 250 wpm, you’ll finish the book in less than three hours. I’ll send you an email notice when the paperback is live on Amazon.

Your review can be one sentence, something like: “A literary masterpiece, its biting satire, compelling storyline, trenchant commentary, and inexhaustible irreverence will undermine the very foundations of today’s social, economic, and political order!” Or something else. It’s all on the honor system. You send me an email. I send you a PDF. You post a review.


He Said That? 10/22/16

From Matt Taibbi (born March 2, 1970), American author and journalist, The Great Derangement: A Terrifying True Story of War, Politics, and Religion at the Twilight of the American Empire (2009):

To be robbed and betrayed by a fiendish underground conspiracy, or by the earthly agents of Satan, is at least a romantic sort of plight – it suggests at least a grand Hollywood-ready confrontation between good and evil – but to be coldly ripped off over and over again by a bunch of bloodless, second-rate schmoes, schmoes you chose, you elected, is not something anyone will take much pleasure in bragging about.