Zero Hedge 
July 31, 2012
Just over three short years ago , as equity markets were re-surging on a wave of taxpayer-funded bailout euphoria, we wrote “There is nothing that can be done at this point to prevent the administration from leeching every last dollar out of its taxpayers to benefit the terminally addicted and zombied bank system”. We, in the imagined words of Ryan Lochte on Saturday, “Nailed It” as we see a market now so bereft of any human-based reaction to reality and merely a product of a drug-peddling central bank that appears to have become self-aware in its omnipotence. To wit, the present day; as we are teased and tickled day after day with the promise of more CB crack if we are just good boys and BTFD, the sad nay terrible fact is that even the most ‘say hello to my little friend’ of drug-dealers – those of the Brazilian Favelas  – have decided to refuse to sell their ‘crack’ to their own people since it “also brought destruction in [the] community”. Maybe, just maybe, the Fed will up its level of conscience this week to that of Brazilian drug-dealers.
Spot the Fed analogies:
Rio de Janeiro, Brazil – Under a footbridge, when night falls and it’s pitch black, the only light that emanates is from flames given off from a few cigarette lighters and a couple candles. On the dirt floor trash is scattered about, including condoms and plastic water cups with holes punched in the bottom to be used as rudimentary pipes; the pungent stench of urine hangs in the air.
It’s filthy, but nobody seems to notice. The couple dozen people here on the ground are all too fixated on taking their next hit of crack cocaine.
This scene plays out inside the Antares slum – or favela as it is known in Brazil – in the industrial outskirts of Rio de Janeiro. There are men, women, and even children, all using.
Paulo, a middle-aged man and father of three young children, is hunched over and inhaling a hit.
“I use crack every day, almost every hour,” he said without hesitation. “This is a drug you fall in love with the first time you use it.”
The Antares favela is under the command of dozens of machine gun wielding young men from a faction of the Comando Vermelho drug gang. It’s generally considered a no-go area for police. A night-time visit inside the drug den in the slum reveals a troubling scene but points to a larger picture of how crack has become a security and public health epidemic in Brazil, spreading to all corners of the country and infiltrating all economic classes.
But since a rock of crack can be purchased for only R$5 (less than $3 USD), the most desperate and downtrodden users tend to congregate by the hundreds in and around Rio’s favelas, where it can be easily purchased.
That is partially why, in an unprecedented move, some drug traffickers have unilaterally decided to stop selling crack in the favelas they control. In both Mandela and Jacarezinho favelas – combined home to more than 100,000 residents – crack can no longer be purchased. Two drug bosses, who control each favela, gave the orders to halt sales.
A dirt road bordering Mandela favela that previously was known to be one of Rio’s largest concentrations of users (known as “cracolanidias” in Brazil) is where hundreds of users and sellers would congregate day and night.
The road is now clear of any signs of users or sellers.
“I am not going to lie to you, there is a lot of profit to be made on crack,” said Rodrigo, a top trafficker in Mandela who used to manage all the crack operations, told Al Jazeera. He asked that his real name not be used. “But crack also brought destruction in our community as well, so we’re not selling it anymore. Addicts were robbing homes, killing each other for nothing inside the community. We wanted to avoid all that, so we stopped selling it.”
The traffickers in Mandela, like Rodrigo, readily admit they still sell marijuana and powder cocaine and were happy to show it to Al Jazeera. Business was good for those drugs; bags of money sat out on tables at sales points in the slum. But those other drugs, they said, don’t seem to cause the same social problems in the favelas they control.
Crack sales have been halted in just two of Rio’s favelas, but Flavia Pinheiro Froes, a lawyer who represents many drug traffickers, said she expects more drug bosses to join in soon.
“Our campaign is not only done in the communities directly with the traffickers that are selling, but also with some of the drug gang leaders that are in jail,” Pinheiro Froes said.“I think convincing the seller could be one of the most efficient ways to combat crack because if there is no supply we will be able to solve the problem of the consumer.”
Pinheiro Froes, whose current and past clients make up a “most wanted” list of Rio’s most notorious drug traffickers, said many traffickers witness the destruction crack wreaks on lives first hand as they have family and friends who are addicted.
She said she is hoping for even commitments for the gangs to stop buying from the big suppliers, some of whom are in neighbouring countries.
Future of crack sales
Back at Antares favela, crack addicts are everywhere, scurrying through the darkness to find a corner to smoke, while crack sales continue unabated.
One trafficker, “Joao”, said they are prepared to stop sales if told to. “If our boss tells us to stop selling crack, we will,” Joao said.
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Of course, that the Fed will never show the same “integrity” as Brazilian slum dealers was something we predicted back in March 2009, quite simply because the US system was beyond savings back inMarch 2009 , most certainly is beyond saving now, and the Fed knows it very well:
There is nothing that can be done at this point to prevent the administration from leeching every last dollar out of its taxpayers to benefit the terminally addicted and zombied bank system. Using pretexts, subterfuge and lies, the administration’s charade triage will only end once there are no more gullible taxpayers to provide their cash, no more demagogue senators and congressmen who will bend reality to make it seem that their actions benefiting a select few are for the benefit of all, and no more naive investors who buy into the promises that U.S. debt is the “safest investment.” However, for the scope of this post, I can only hope that Perella Weinberg quickly realizes the futility of the TLGP fee increase, and that the goals of that particular action will be magnified when Dodd’s hilariously titled DPA 2009 bill passes, as the negative consequences are likely to substantially surpass any positive ones.
In the grand scheme of things, at this point it doesn’t really matter: at best, any FDIC action buys the U.S. financial system a year or so to delay the inevitable moment when the heroin addict decides it is time to seek the help of a methadone clinic before it is too late, only to realize that in its quest to feed the addiction, the administration forgot to provision for any precious methadone… but then again its availability would imply someone actually believes U.S. banks will, at some point, get to a point where detox is even a remote possibility which is obviously not the case (at least for now).
And if the unimaginable does happen, and the administration does comprehend that the wisest and correct thing is to use the cold turkey approach on U.S. financials, Zero Hedge provides some more sage advice from the protagonist of Trainspotting, who succeeded where so many U.S. banks have and will fail:
Relinquishing junk. Stage one, preparation. For this you will need one room which you will not leave. Soothing music. Tomato soup, ten tins of. Mushroom soup, eight tins of, for consumption cold. Ice cream, vanilla, one large tub of. Magnesia, milk of, one bottle. Paracetamol, mouthwash, vitamins. Mineral water, Lucozade, pornography. One mattress. One bucket for urine, one for feces and one for vomitus. One television and one bottle of Valium, which I’ve already procured from my mother, who is, in her own domestic and socially acceptable way also a drug addict. And now I’m ready. All I need is one final hit to soothe the pain while the Valium takes effect.