Sunday, May 31, 2009

State Capitalism

Greetings good citizen,

Tomorrow is supposedly ‘D-day’ for GM although it appears a majority of GM bondholders have reversed their earlier stance and accepted a ‘sweetened’ offer to exchange their bonds for equity.

This occurred in the infamous ‘11th hour’ and the bondholders didn’t have a lot of options considering the courts were ‘disinclined’ to honor their claims against GM.

The bankruptcy was ‘moving forward’ regardless of who was owed what.

While I personally don’t care about the fate of the bondholders vs. the millions of jobs hanging in the balance, I find this second definitive incident, this disturbing ‘breakdown’ of longstanding laws very troubling.

First, the banks are being ‘bailed out’ by the government with taxpayer funds, now bondholders are being denied their legal rights.

While few will shed a tear for the bondholder, what we’re witnessing is an extremely disturbing breakdown in the rule of law here.

Rather than beat around the bush any further, I’ll come right out with it. It sure as shit looks like we are in the beginning stages of ‘state capitalism’.

It appears as though the government is ‘positioning’ itself to preserve the status quo by whatever means necessary.

Perhaps more ominously, they will do this despite how desperate circumstances become for the growing number of the unemployed/underemployed.

Understand, good citizen, that Nazi Germany had ‘state capitalism’ and so does today’s China.

While it is my belief that there is no such thing as a benign form of capitalism, state capitalism is the absolute worst of a very bad system.

All forms of capitalism are simply a bastardization of the function of money, a self-serving monopoly if you will, state capitalism adds the absolute rule of the Oligarchs to this sorry situation...think 'undercover kings' somewhat akin to the dystopian world of 'Rollerball' .

Worse, we are already further along this diabolical path than most of us realize.

The government has already refused to prosecute criminal acts committed by elected officials or their appointees. It has already used public funds to ‘off-set’ the losses incurred by their 'true patrons'.

And perhaps the biggest ‘failing’ of all is the government hasn’t lifted a single finger to correct the hollowed out economy that threatens to condemn our nation to perpetual poverty.

Where is our CCC and WPA?

There is no shortage of things that need doing, we once again find ourselves doing without because the Oligarchs have no interest in providing us with paychecks, now or in the future.

They can get what they want from the impoverished third world cesspools where our jobs were sent to…if you can’t get it too, it’s not their problem, it’s yours!

If you don’t already know, let me be the first to tell you that is doesn’t matter ‘who’ you vote for, things won’t change!

Our elected officials have become ‘window dressing’ to support the lie that we are still ‘self-governed’.

After eight years of Republican majority rule, the past two years of Democratic rule looks amazingly similar.

Worse, a large percentage of our ‘new’ administration consists of ‘holdovers’ from the past administration(s).

There’s some ‘change you can believe in’…not!

As we peer into the murky future, we see our standard of living and our prospects for the future are already well beyond our reach. They are already blaming you for your ‘failure to achieve’…when ‘opportunity’ only exists for one out of every ten thousand!

Worse, this, like globalization, is no ‘accident’.

They firmly believe it’s not their fault that you have been made redundant.

The sin here will be lying down and accepting that judgement.

Nobody wants to fight but sometimes it can’t be avoided.

The important thing to keep in mind good citizen is that the cavalry preparing to charge over that hill is bent on killing, not saving you!

Thanks for letting me inside your head,


Commie Plot

Greetings good citizen,

Every once in a while the weekend offers up a little gem for our mutual consideration.

Tonight’s offering is such a fine tidbit I’m amazed it got past the editor.

A tip of the hat goes to Some Assembly Required where Mr. Michaelson introduces the piece like so:

Mortgage Insurance: Perhaps things could be better if the government worked for the people and not for the Usual Suspects. Like in Marinaleda, Spain.

[Emphasis, naturally, mine] Spain’s housing crisis is said to be worse than ours (due to a concentration on the building of vacation properties for rich foreigners rather than their own domestic market.)

Well, it seems a teeny-tiny town has escaped the carnage and is keeping it’s people employed despite the downturn. Do you wonder what their ‘secret’ is?

A Job and No Mortgage for All in a Spanish Town

Published: May 25, 2009

MARINALEDA, Spain — The people of this small Andalusian town have never been shy about their political convictions. Since they occupied the estate of a local aristocrat in the 1980s, they and their fiery mayor, Juan Manuel Sánchez Gordillo, have been synonymous in Spain with a dogged struggle for the rural poor.

Now that Spain’s real estate bust is fueling rampant unemployment, this Communist enclave, surrounded by sloping olive groves, is thumbing its nose at its countrymen’s capitalist folly. Attracted by its municipal housing program and bustling farming cooperative, people from neighboring villages and beyond have come here seeking jobs or homes, villagers and officials say.

Mr. Sánchez, a bearded 53-year-old who this month celebrated three decades as mayor of the town of 2,700, says the economic crisis proves the wisdom of his socialist vision.

“They all thought that the market was God, who made everything work with his invisible hand,” Mr. Sánchez said on a recent morning, seated in his office below a portrait of Che Guevara. “Before, it was a mortal sin to talk about the government having a role in the economy. Now, we see we have to put the economy at the service of man.”

While the rest of Spain gorged on cheap credit to buy overpriced houses, the people of Marinaleda were building their own, mortgage-free, under a municipal program, he said. If a resident loses his job, the cooperative hires him, he said, so nobody wants for worka bold claim in a region with 21 percent unemployment.

Vanessa Romero, who moved here with her family from Barcelona in January after she and her husband lost their jobs, said she was drawn by the prospect of work and facilities like the nursery school, which costs about $17 a month. The couple make about $1,500 a month each working for the cooperative. [Good money when you don’t have a mortgage nut to crack!]

“If a town like this, with half the resources of other towns, or less, can provide work for people, why can’t other places do the same?” said Ms. Romero, whose parents were born in the town.

Critics say Mr. Sánchez’s claims are exaggerated and that he has succeeded in dividing up misery rather than creating wealth. By promoting low-productivity farm jobs, he has kept voters dependent on him for work and handouts, they say.

“This village has stagnated,” said Hipólito Aires, a Socialist town council member and gas station attendant. [Don’t forget ‘millionaire wannabe’] He said the political atmosphere in Marinaleda was stifling and that the mayor ostracized his opponents — a sentiment echoed by several residents who would speak only anonymously.

“Sánchez Gordillo criticized the local lords, but now he acts like them,” Mr. Aires said. “The biggest landowner in Marinaleda today is the mayor.” He was alluding to the mayor’s presumed power over the town and its 3,000-acre farm, though Mr. Sánchez, who does not own a car, says he owns no property other than his home. [Mr. Aires sounds suspiciously like a ‘conservative’ that probably lost his bid to become mayor sometime in the distant past. Makes you wonder how hard the reporter had to dig to find a ‘malcontent’? We certainly can’t have ‘commie success stories’ after communism has been so solidly ‘discredited’.]

Marinaleda became a center of leftist activism after Mr. Sánchez first won the mayoral election in April 1979 as a representative of the United Workers’ Collective, a Communist farm workers’ organization that promotes government through popular assemblies and believes that Andalusia should be independent from Spain. Over the years, the residents have occupied farms, picketed government offices and held hunger strikes to demand work and land.

Their most prominent campaign culminated in 1991 with the regional government expropriating the 3,000-acre estate from the Duke of Infantado and leasing it to the town. The resulting cooperative, about seven miles north of Marinaleda, grows labor-intensive crops like artichokes, hot peppers, broccoli and broad beans, as well as wheat.

These days, Mr. Sánchez’s populism permeates life in this self-anointed “utopia for peace,” which has no municipal police (a savings of $350,000 a year, officials say).

Political murals and revolutionary slogans adorn the town’s whitewashed walls and streets are named after Latin American leftists. Every few weeks, the town hall declares a Red Sunday over a bullhorn and volunteers clean the streets or do odd jobs.
[The ‘horror’, a town using ‘volunteer’ labor!]

For one hour on television each Saturday, the mayor holds forth on politics or recites his own poetry, his trademark Palestinian scarf draped round his neck. He has rallied the residents around a plethora of causes, from resisting genetically modified crops to supporting the Sahrawi people’s struggle for self-determination in Western Sahara.

Comparing himself with another, though far more famous, bearded Communist, Mr. Sánchez said that he had been jailed seven times and that he had survived two assassination attempts, one from a fascist agitator and the other from an enraged police officer.

“His problem is, he is a permanent revolutionary,” said Mr. Aires, adding that “half the people at his rallies don’t even know where Palestine is.”[How much do you want to bet Mr. Aires is another such ‘ignorant’ person?]

Many, though, admire his zeal.

“I wish our mayor would do something like this for us,” said Francisco Pradas from the nearby town of Écija, who was picking beans at the cooperative farm on a recent morning. The farm manager, José Martin, said demand for jobs from other villages had increased since the crisis.

Back in town is the other jewel in Marinaleda’s Communist crown: a colony of neat, three-bedroom houses, built on municipal land with materials from the regional government. Prospective owners donate about 450 days of their work to the construction. The rub: to prevent people from profiting, residents cannot sell their houses.

Even so, demand from residents of nearby towns rose so much over the past few years that the town had to limit the program to long-term residents. About 350 houses have been built so far and the town plans to add 250 in the next two years.

Analysts and political opponents dismiss Mr. Sánchez’ populist bluster, noting that while he portrays Marinaleda as a Communist oasis, it depends heavily on money from the regional and central governments it decries. The materials for each house, for example, cost the regional government about $25,000. [Wouldn’t our capitalist friend ‘Flipper’ have a field day at those prices?]

Salvador Becera, an expert in anthropology at the Center for Andalusian Studies in Seville, said Mr. Sánchez had brought social equity to an uneducated, economically oppressed community. But his vision was anachronistic, he said, and the future of Andalusia lay not in the fields, but in industry and services. [Does anyone else think Mr. Becera is an idiot? Got food, Bubba?]

“Right now, they can puff out their chests because the economy is in crisis,” Mr. Becera said. “But what if they had the chance to get rich? [Geez, it hasn’t happened in 10,000 years so why does bean blower think its going to happen tomorrow?] Then who would stay in this little paradise that Sánchez Gordillo has created?”

Mr. Sánchez, though, is unshaken.

“We have an election every four years,” he said simply. “If people elect me with an absolute majority each time, I must be doing something right.”

Did I tell you this was a fantastic article or did I?

This piece has it all, frustrated millionaire wannabes and clueless intellectual morons who both utterly fail to appreciate what Mr. Sanchez has done.

Why is it these stupid bastards fail to realize we can’t all be ‘rich’? (Which is to point out that when we’re all rich, then no one will be…but it’s not like we’re in any real danger of THAT ever happening.)

Take a communist success story and dismiss it by dangling the false lure of ‘universal wealth’.

Ask yourself good citizen, is the capitalist system really that ‘warped’ that the only measure of ‘success’ is making more money than you need at the expense of those around you?

Sadly, the answer is yes…it is that warped.

Strangely, you are not to blame for your misguided values, you’ve been taught your whole life that it is your ‘right’ to be rich and that we all can be rich…somehow.

No irony should be lost on the fact that most of us owe more than we can ever expect to earn in our lifetime thanks to the banksters and the investors/employers.

There is another way and Mr. Sanchez proves it!

Thanks for letting me inside your head,


Saturday, May 30, 2009

No inflation, Ha!

Greetings good citizen,

As you ought to know by now, I am troubled good citizen. The dollar has once again started its downhill run, which should surprise no one.

What troubles me good citizen is how some very respectable names in the field of economics are in denial that printing money causes inflation…whether it circulates or not!

Why? Because printing new money ‘dilutes’ the value of existing money. The same thing occurs when a company issues ‘more’ stock, it dilutes the value of the stock already issued/sold.

So when you print up money that has no ‘corresponding new wealth’ backing it up, all money of that kind in existence becomes um, less valuable.

This reduces purchasing power meaning it take more money to purchase the same quantity of goods…whether the ‘newly printed money’ sits in a bank vault or if it is circulating through the economy

This is why a dollar in 1913 is only worth 3 cents today…because there is more money in circulation today without a corresponding increase in the wealth necessary to support its value.

Strangely, both dollar bills will (still) get you a hundred pennies, the difference lies in what those hundred pennies will buy you.

In 1913 those hundred pennies would get you a hundred gumballs, today it will get you four.

So what do you think 18 trillion ‘new’ dollars are going to do to your ‘purchasing power’?

Notice the ‘price at the pump’ lately? Miles driven have fallen for 16 straight months yet the price of gasoline is rising…what do YOU suppose is causing that?

How about the cost of a box of pasta? It’s not so long ago that pasta was four boxes for a dollar, now it’s a buck a box! What was that again about ‘deflation’?

You are, sadly, dealing with a pack of lying, cheating scum…and there ain’t a fucking thing you can do about it!

Because, bizarrely, the good for nothing government won’t prosecute these thieves…because the government is ‘in cahoots’ with these thieves!

Prices go up, you’re handed a line of BS about some kind of shortage and the next thing you know, you are working for less! Which is to say you are getting paid the same but it buys less…and there isn’t anything you can do about that either!

Well, actually, there is something you can do but you can’t do it alone.

Not that you are alone in having your pocket picked.

Better, we are a ‘species’ of ‘joiners’…even if that trait has been surpressed lately. In times of trouble ‘joining’ an organization intended to combat the problem becomes very attractive…but the organization MUST be effective!

The organizations of the past faded away when they became, um, useless wastes of time and effort.

Looking at our present situation, there could hardly be a better time to form a network of ‘committees of correspondence’…just like they did during the original revolution.

It all starts with organization, communicating ideas across the entire nation to create a network of resistance to the criminal acts being forced upon us without our consent.

Together we can fix this mess.

Thanks for letting me inside your head,



If starting a committee of correspondence is appealing to you, hit the ‘follow’ button on this blog.

Thursday, May 28, 2009

Off the Reseration (again)

Greetings good citizen,

Continuing with the theme that if you look hard enough you an find someone who agrees with you, allow me to introduce someone who practically channels me

I know I posted first today so the similarities in our points of view are more than a little eerie.

Um, the similarities of which I speak are in the ‘conclusion’ of this piece, just as mine are in yesterday’s offering.

No, I didn’t write about housing.

But we both beat up on the so-called ‘pros’ in the financial markets…

We both expressed our doubts about ‘economic recovery’…

And while I wasn’t as ‘articulate’ as Ilagi, we both expressed the view that the crisis is more than just a financial downturn, it is a crisis of confidence caused by what will come to be known as the ‘crime of the century’.

Ilargi: Although it's under threat of being swamped by tons and tons of rotting shoots, the most interesting number today, for me, probably comes from Dean Baker, who has this statement about US real estate:

Housing equity continues to be destroyed at the rate of $400 billion a month ....

What intrigues me about this, of course, is how it rhymes with Nouriel Roubini, Paul Kasriel, Henry Blodget plus a whole slew of anonymous economists hired by a spin bureau with great media access, who all came out today proclaiming recovery is here, or at least it'll be here before the end of the year. If US homeowners, who also double as consumers, and as such bear responsibility for over 70% of US GDP, lose $1333 per capita every month, or $15.996 per year, or $63.984 per nuclear family, where for all the mothers of all the prophets in history, or so I wonder, will that recovery originate?

Now, I know that man cannot live by home (or home-made bread) alone, that there is more to the economy than real estate and mortgages, but if on average a family needs to earn over $60.000 just in order to not fall even deeper into the debt trap, while at the same time every single month over 600.000 jobs are lost that are crucially needed to pay for just that play-even scenario, I’m starting to have some serious questions about that recovery. Come to think of it and while we’re at it, I also get serious doubts as to the reasons why these folks say these things to begin with. It makes no sense to me, that much is clear.

As far as I can see, the best thing that they can possibly envision, and that would still be greenshootingly delusional, is for houses to lose 10% per year instead of 15%, and for the US to shed 500.000 jobs instead of 600.000. It’s of course challenging at times to state the obvious in the face of all the oh-so-pretty predictions, but that’s fine, I just play the numbers in my head and hope to be wrong. After all, if I’m right, my own world will steeply degrade with everyone else's. But I'm not wrong, and all these voices are not right. I know, that means calling a lot of respected economists out as dulled drillbits, but so be it. The numbers don't lie. The government, the banks and the economists do.

Why are we still listening to these people? All they do is just erase from the field all considerations concerning anything serious. Economics is politics, and economists merely function to justify whatever political model they happen to serve in their respective nations and regimes.

We are in the middle of a crisis. Which has to do with money. And so we're all thrown into the hands of a bunch of people how pose as scientists, even though their field demonstrably fails in even the most basic requirements to be recognized as such. Economists cannot solve this crisis. First, they have no proven models, they only have theories that could fail as easily as they could succeed, and that's already handing them leeway. Second, and I return to what I've said many times before, this is not a financial or economical crisis, and neither should nor can therefore be solved by economists.

We are being eaten up alive by an all-out all-encompassing societal crisis. It's not about money. It's about you, and your families and friends, and ultimately about survival. Forget about recovery. You'll never get back to what you once had. And knowing that, accepting that, it's time to celebrate life as it will be, to make the best of what is, not of what was or could have been.

Smoking green shoots doesn’t seem to me to be the best way to do that. What we are in is not something we would ever have chosen, but here we are. And for once it's accurate to say that nothing will ever be the same. There's no way back, no recovery. And we're going to have the work the land real long and real hard before it rewards us with anything green.

Okay, maybe I’m just a tad more optimistic than this guy but that’s because I have an answer to our problems and he doesn’t.

I have to admire Ilargi because he comes out and says something I’ve only hinted at…because I fear most of you won’t believe it.

This crisis isn’t about money, it’s about ‘control’.
They could very easily pay us more and the ‘crisis’ would (at least temporarily) disappear.

I say temporarily because there is no such thing as a sustainable debt driven social model.

That which has gone before is indeed gone since we live in the perpetual ‘now’.

The root of the crisis exists in ‘overpaying’ for that which is our birthright. We have ‘allowed’ some humans to charge us for what they have no right to claim as their own.

Well good citizen, the time has come to put those greedy individuals in their place…those who do not value the benefits of civil society shall have those benefits withdrawn from them!

The greedy that charge us for every little thing do not bring us the world as we know it, the workers do! Without the workers there is nothing!

It is time for the worker to regain their rightful place in our society. It is time to enforce the rule that only labor earns one a place at the table and not some frivolous claim of ownership but the act of creation the provides one with ‘membership’.

We do what we do because it needs doing and money is only useful as it makes it possible to focus on what we do well so we aren’t forced to do everything ourselves!

Money is a tool, not an objective in itself!

Those who have ‘pirated’ society for their own benefit have ‘bastardized’ money so they don’t have to contribute to the common good!

Money is no longer a ‘means of exchange’ but the means of control.

Investors are a parasite to be purged and not the ‘champions of freedom’ they make their lazy asses out to be!

The audacity of defining themselves as ‘indispensable’ while the only thing they contribute to society is a paycheck that they steal from you in the first place!

This is criminal! And criminals have no place within civil society.

The sun will continue to rise, the crops will continue to grow and the factories will continue to produce whether someone ‘owns’ them or not.

I find it astounding that with so many willing, clever hands that we have failed to banish want from our society…but we have allowed greed to rule us and the greedy care not for the welfare of those that do society’s heavy lifting! (While doing none themselves.)
Hand in hand with this misguided belief (and they do believe it) is the notion that we’re too ‘stupid’ to take care of business ourselves. What reinforces this ‘belief’ is the fact they are allowed to get away with their criminal behavior!

No irony should be lost on the fact that this is due to their control of society’s legal apparatus.

We have been indoctrinated to do as we’re told and nothing more or nothing less if we don’t want trouble. This applies double for the legal community.

This ‘blind obedience’ to the ‘boss’ has murdered any semblance of personal sovereignty we may have had outside the workplace.

Worse, our inability to question (never mind fire) the boss puts us in the often untenable situation of ‘do and like it or you’re fired!’

It is this brand of unswerving loyalty that has turned us all into the slaves of the monied class.

Since they cut our paychecks, we have to do as they say…or we’re out of a job.

This is no way to run a society…especially when the end result is a hollowed out economy, which forms the basis for a class war.

Does ‘someone’ need to be in charge? Definitely…but that someone (those someones) have to be constrained by the same rules as everyone else is, something that clearly isn’t happening now.

So the question facing us is an ancient one, the rule of law or the rule of man?

Once again this issue will be decided by the willingness to fight for freedom.

If the will does not exist then neither will freedom exist.

Thanks for letting me inside your head,


Wednesday, May 27, 2009

Hints and allegations

Greetings good citizen,

“You do the Hokey Pokey and you turn yourself around, that’s what it’s all about!”

Apparently I am not alone in being puzzled by the disturbing contortions being performed by the financial markets.

Perhaps more ‘damning’ is the fact that if you don’t like one commentator’s ‘opinion’ just keep browsing, you’re sure to find someone that agrees with you!

It would be one thing if the ‘confusion’ were limited to um, ‘civilian commentators’, reading bloggers like my humble self only provides you with a filter to assess what the ‘average Joe’ makes of things.

No irony should be lost on the fact that we ‘average Joe’s’ are more united in our opinions than the so-called pro’s.

I will provide my ‘assessment’ of the current perplexing situation after we examine this ‘I foretold you so’ article…

After Quiet Morning, U.S. Markets Begin to Slip

Published: May 27, 2009

After a big gain on Tuesday, Wall Street turned lower Wednesday afternoon as General Motors took another step toward bankruptcy court. [Um, does this ‘surprise’ anyone? Couldn’t see this coming yesterday?]

Stocks slipped after spending much of the morning trading within a narrow range. General Motors said not enough bondholders agreed to swap their debt for company stock, meaning the automaker is almost definitely headed for bankruptcy protection.

G.M. has until Monday to either finish restructuring outside of court or face a Chapter 11 filing. The announcement dampened the mood of investors who had grown more optimistic about the economy after Tuesday’s positive reading on consumer confidence.

“While consumer confidence looking forward is improving, the reality is the economy is still very weak,” said Alan Gayle, senior investment strategist at RidgeWorth Capital Management. [No kidding Sherlock, when did you come to this conclusion?]

Many investors have been expecting G.M. to enter Chapter 11 for some time, but the reality of it happening could still deal Wall Street a psychological blow. Any remaining value in the shares, which are currently trading just above $1, would be wiped out.

Some analysts say the market should be able to withstand an eventual bankruptcy filing. Mark Coffelt, portfolio manager at Empiric Funds, thinks Wall Street’s recovery since hitting 12-year lows in early March leaves stocks better suited to shrug off G.M.’s troubles. [Fat lot of good that will do the ‘real economy’!]

“The market has come a long way in a short period. I would expect it to settle out a little bit,” he said, predicting more back-and-forth days rather than a speedy recovery.

In early afternoon trading, the Dow Jones industrial average was down 108 points or 1.2 percent. The broader Standard & Poor’s 500-stock index was about 1 percent lower and the technology-laden Nasdaq was off 0.4 percent. [I’m writing this before the market close and it’s the S&P and the Nasdaq that are taking a pounding, the Dow is off…well, more than 108…let’s just say its poised to give back all of yesterday’s gains.]

On Tuesday, after an initial dip on worries about North Korea’s nuclear testing in Asia, stocks soared on the Conference Board’s surprisingly high [So ‘surprising’ that it borders on ‘unbelievable’] reading of consumer confidence. The May index was the highest since September. Consumer sentiment does not always correspond to consumer spending, but the data nevertheless fueled investors’ hopes for an economic rebound later this year. [So we brush upon the topic that is the ‘source’ of so much ‘confusion’.]

The Dow is 29.4 percent above the lows it reached in early March, but still 40.2 percent below the record high it hit in October 2007. [Depending on how you look at it, the Dow is still 6,000 points too high as far as being a measure of the ‘real economy’.]

Investors did not find relief in a bigger-than-expected increase in home sales because a rise in inventories fanned worries that homes languishing on the market would continue to crimp the economy by hurting consumers and banks that hold mortgages. [Chalk up one for ‘sanity’…it’s hard to go wild over an uptick in foreclosure auction sales when foreclosures are outpacing sales!]

The National Association of Realtors said sales of previously occupied homes rose from March to April as buyers hunted for bargains. Sales rose 2.9 percent to an annual rate of 4.68 million last month. But the trade group also said the number of unsold homes on the market at the end of April rose almost 9 percent to nearly 4 million. That’s a 10-month supply at the current sales pace.

Some analysts worry that rising prices could prompt some homeowners who had been holding off to put their homes on the market. The increase in available homes could short-circuit a recovery in prices and trip up the economy’s recovery. [There’s little chance of this happening as most homeowners are ‘underwater’ and ‘retirees’ are leery of selling a paid for property under the current economic conditions.]

Overseas, Japan’s Nikkei stock average rebounded 1.4 percent. In afternoon trading, Britain’s FTSE 100 rose 0.1 percent, Germany’s DAX index rose 0.3 percent, and France’s CAC-40 rose 0.5 percent.

Bonds were narrowly mixed ahead of an auction of $35 billion in five-year notes, part of the $101 billion in debt the government is issuing this week. The yield on the benchmark 10-year Treasury note fell, pushing its yield up to 3.56 percent from 3.55 percent late Tuesday.

The dollar rose against other major currencies. Gold prices rose.

Oil and gasoline prices continued their push higher Wednesday. Benchmark crude for July delivery rose $1.06 to $63.51 a barrel in New York trading.

Gasoline prices, which are up 19 percent in the past month, rose 0.9 cents overnight to $2.434 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Prices are now 10 cents higher than a week ago and 38.4 cents a gallon higher than a month ago.

In the credit market, the cost of three-month dollar loans edged up from record lows Wednesday after falling consistently for the last month amid rising hopes that the worst of the global recession has passed.

The British Bankers’ Association said the rate on three-month loans in dollars — known as the London Interbank Offered Rate, or Libor — rose 0.01 of a percentage point to 0.67 percent.

Back to the narrative:

As we saw during the last (actually, pretty much every economic downturn, although I’m referring to the last huge downturn that lasted nine years) Investors are wired to think in terms of cycles.

They ignore fundamentals in favor of examining the past for clues as to when the markets ‘usually’ rebound.

Thus we have debacles like yesterday.

It’s been nearly 16 months since the ‘official’ beginning of this economic ‘downturn’. Investor logic dictates that the markets ‘should be’ bottoming out. Strangely, this is the identical ‘logic’ that was used to ‘predict’ recovery in the second half of this year.

Worse, every branch of the US government is pumping ‘funny money’ into the economy, providing investors with sufficient ‘ammo’ to keep the markets from crashing and these same investors from being wiped out.

From a ‘fundamental’ point of view, this is a serious problem. The stock market is so loaded with ‘imaginary’ wealth that it is diluting real wealth at a rate that will cause the real economy to ‘seize up’.

Taxpayers are being bled to keep the ‘fantasy’ wealthy alive. This has sparked a renewed debate on the subject of hyper-inflation.

Bizarrely, unlike Zimbabwe, the ‘average citizen’ will NOT be provided with wheelbarrows full of cash to chase basic necessities. Prices will rise and if you can’t afford it, ‘tough.’

Our trillion dollar bills are already sitting in someone’s investment account. There aren’t any to pass around.

Investors will continue to ‘play games’ with the economic numbers (using taxpayer money) while the real economy crashes and burns.

How diabolical is it when those who make decisions in our name don’t live like we live nor suffer as we suffer?

Not suffering now? It’s not over.

Thanks for letting me inside your head,


Tuesday, May 26, 2009


Greetings good citizen,

Um, ‘chasing’ short-term market moves is a ‘fool’s errand’. As of 2:00 PM the Dow has tacked on over 200 points based on, if you can believe it, rising consumer confidence!

This is nearly as silly as the last 200 point bounced based on the ‘rising confidence’ of homebuilders…which was proven unfounded less than 24 hours later!

Once again we can only shake our heads in disbelief and wonder who they are asking?

This is akin to polls that indicated President Bush enjoyed a 60% popularity rating back when everything was turning to shit…who did they poll, the members of the Republican national committee?

Which is to ask what ‘zip codes’ were polled to dredge up this rise in consumer confidence? Or is this a ‘con’ too?

Perhaps the proof is in the pudding, as you know the stock market is the biggest ‘con’ of all!

What I found striking about this article (which has since been amended) is how the NY Times is cited as the ‘source’ of the article! (In fairness, the ‘source article’ retains its Reuters header…)

Markets Rise on Consumer Optimism
[snip: let’s cut to the chase!]

The more buoyant mood among consumers echoed recent surveys of home builders, manufacturers and service-sector businesses, which have reflected a retreat from historic levels of pessimism.

“Anything that measures sentiment has improved,” an economist at Deutsche Bank, Joseph LaVorgna, said. “We’re not seeing it in the hard data, but seeing it in the sentiment. But you can’t spend confidence.”

So I ask you good citizen, is consumer confidence ‘really’ up or are the results reported today ‘positive’ because the ‘researchers’ only polled the residents of the mental institutions that care for people who have lost touch with reality?

Mind you, there isn’t a shred of evidence to support this claim yet the idiot investors added more than 200 points to the Dow today!

So we are left once again to ponder the ‘significance’ as well as the ‘wisdom’ of paying any attention at all to the stock markets (much less actually commit money to them!)
If you still have a 401k, get the fuck out now!

Shifting gears here, I encountered a (for this particular writer) ‘brief’ article from the inestimable Henry C.K. Liu.

Once again, Henry sheds more light on the increasingly murky financial morass…

Liquidity drowns meaning of 'inflation'
By Henry C K Liu

The conventional terms of inflation and deflation are no longer adequate for describing the overall monetary effect of excess liquidity recently released by the US Federal Reserve, the nation's central bank, to deal with the year-long credit crunch.

This is because the approach adopted by the Treasury and the Fed to deal with a financial crisis of unsustainable debt created by excess liquidity is to inject more liquidity in the form of both new public debt and newly created money into the economy and to channel it to debt-laden institutions to reflate a burst debt-driven asset price bubble.

The Treasury does not have any power to create new money. It has to borrow from the credit market, thus shifting private debt into public debt. The Fed has the authority to create new money. Unfortunately, the Fed's new money has not been going to consumers in the form of full employment with rising wages to restore fallen demand, but instead is going only to debt-infested distressed institutions to allow them to deleverage from toxic debt. Thus deflation in the equity market (falling share prices) has been cushioned by newly issued money, while aggregate wage income continues to fall to further reduce aggregate demand.

Falling demand deflates commodity prices, but not enough to restore demand because aggregate wages are falling faster. When financial institutions deleverage with free money from the central bank, the creditors receive the money while the Fed assumes the toxic liability by expanding its balance sheet. Deleverage reduces financial costs while increasing cash flow to allow zombie financial institutions to return to nominal profitability with unearned income and while laying off workers to cut operational cost. Thus we have financial profit inflation with price deflation in a shrinking economy.

What we will have going forward is not Weimar Republic-type price hyperinflation, but a financial profit inflation in which zombie financial institutions turn nominally profitable in a collapsing economy. The danger is that this unearned nominal financial profit is mistaken as a sign of economic recovery, inducing the public to invest what remaining wealth they still hold, only to lose more of it at the next market meltdown, which will come when the profit bubble bursts.

Hyperinflation is fatal because hedging against it causes market failures to destroy wealth. Normally, when markets are functioning, unhedged inflation favors debtors by reducing the value of liabilities they owe to creditors. Instead of destroying wealth, unhedged inflation merely transfers wealth from creditors to debtors. But with government intervention in the financial market, both debtors and creditors are the taxpayers. In such circumstances, even moderate inflation destroys wealth because there are no winning parties.

Debt denominated in fiat currency is borrowed wealth to be repaid later with wealth stored in money protected by monetary policy. Bank deleveraging with Fed new money cancels private debt at full face value with money that has not been earned by anyone, that is with no stored wealth. That kind of money is toxic in that the more valuable it is (with increased purchasing power to buy more as prices deflate), the more it degrades wealth because no wealth has been put into the money to be stored, thus negating the fundamental prerequisite of money as a storer of value.

This is not demand destruction because decline in demand is temporarily slowed by the new money. Rather, it is money destruction as a restorer of value while it produces a misleading and confusing effect on aggregate demand.

Thinking about the value of any real asset (gold, oil, and so forth) in money (dollar) terms is misleading. The correct way is to think about the value of the money (dollars) in asset (gold, oil) terms, because assets (gold, oil, and so on) are wealth. The Fed can create money, but it cannot create wealth.

Central bankers are savvy enough to know that while they can create money, they cannot create wealth. To bind money to wealth, central bankers must fight inflation as if it were a financial plague. But the first law of growth economics states that to create wealth through growth, some inflation needs to be tolerated.

The solution then is to make the working poor pay for the pain of inflation by giving the rich a bigger share of the monetized wealth created via inflation, so that the loss of purchasing power from inflation is mostly borne by the low-wage working poor and not by the owners of capital, the monetary value of which is protected from inflation through low wages. Thus the working poor loses in both boom times and bust times.

Inflation is deemed benign by monetarism as long as wages rise at a slower pace than asset prices. The monetarist iron law of wages worked in the industrial age, with the resultant excess capacity absorbed by conspicuous consumption of the moneyed class, although it eventually heralded in the age of revolutions. But the iron law of wages no longer works in the post-industrial age in which growth can only come from mass demand management because overcapacity has grown beyond the ability of conspicuous consumption of a few to absorb in an economic democracy.

That has been the basic problem of the global economy for the past three decades. Low wages even in boom times have landed the world in its current sorry state of overcapacity masked by unsustainable demand created by a debt bubble that finally imploded in July 2007. The whole world is now producing goods and services made by low-wage workers who cannot afford to buy what they make except by taking on debt on which they eventually will default because their low income cannot service it.

All the stimulus spending by all governments perpetuates this dysfunctionality. There will be no recovery from this dysfunctional financial system. Only reform toward full employment with rising wages will save this severely impaired economy.

How can that be done? Simple. Make the cost of wage increases deductible from corporate income tax and make the savings from layoffs taxable as corporate income.

Um, it is indeed a ‘simple’ as well as elegant solution…likely to be as popular with our exploiter class as A Simple Plan is…not.

Left to our imagination here is what constitutes a ‘wage increase’ and what constitutes ‘lay-off’ (savings given how screwy our methods of accounting have become.)

Will employers be permitted to keep ‘lay-off savings’ off their balance sheets? Enabling them to keep inflation where it belongs, on the backs of the working poor? Would employers demand to be allowed to deduct ‘all’ wages (something they already do, as wages are a ‘business expense’?)

Sorry, it’s a little too simple for my feeble mind. Without altering basic human psychology there is too much opportunity to ‘game the system’, which is how we got where we are in the first place.

If we are to reform our system of commerce, we need to fundamentally alter the ‘incentives’ to do what we do.

Key to my proposal [A Simple Plan] is the ‘Human Anti-exploitation Law’ which forbids anyone from making money from the sweat of another’s brow.

This outlaws the ‘Master’ (business owner/paymaster) from the ‘Slave’ (those forced to labor for a wage, whether they can live on it or not.) relationship.

You will finally be able to work for yourself with all of the attendant benefits accruing to you and not some ingrate that holds your financial future by the short hairs!

Here’s something that probably gives most folks a headache, it works without collecting a single cent in taxes!

Remember that taxes were originally called ‘tribute’ and existed to fund the lifestyles of our overlords.

Now they (taxes) are used as an ‘excuse’ to fund necessary but unprofitable ventures…

Ironically, anything that is necessary is profitable all by itself.

I’ll drop it here because if I don’t this will continue for another 70 plus pages.

Thanks for letting me inside your head,


Same old, same old...

Greetings good citizen,

By the third day of a three-day weekend anything resembling a ‘consensus’ is lost.

Even yesterday’s North Korean nuke test failed to attract much attention. Once again Mr. Obama trotted out the same tired, threadbare posture that has passed for the US main line on nuclear proliferation for years…

He didn’t say HE was upset about nuclear testing, he said THE WORLD condemned North Korea’s ‘flouting’ of global regulations. Where does this fit in with a nation that attacked another sovereign nation, without provocation and continues to ‘occupy’ that nation?

Since North Korea can’t deliver its nuclear warheads to rain down destruction upon its ‘enemies’, the only people ‘worried’ about a Korean nuke are its closest neighbors. (No irony should be lost on the fact that the nation most in danger of being on the receiving end of a North Korean nuke, is also the only nation that ever had nuclear weapons deployed against it during wartime in recorded history.)

But hey, no big deal.

So the next ‘hot topic’ of the day appears to be the commercial Real Estate markets. As businesses rush to shrink their ‘footprint’ in efforts to cope with diminishing consumer demand, the business of ‘renting to business’ is collapsing under its own weight.

But again, no biggie…the now colossal ‘For Lease’ Corporation is making an enormous amount of progress in the current business environment.

While other businesses contract, the For Lease Corporation is growing in leaps and bounds! (A huge tip of the hat goes out to off-shoring and globalization!)

While we’re here I would be remiss in not taking a few well-deserved swipes at my favorite punching bag.

A hearty FU to all of the treasonous bastards in the US government that placed the interests of their campaign contributors ahead of the welfare of the workers of this nation!

And another FU to the campaign contributors responsible for throwing tens of millions of US workers out on the streets, cutting their benefits and suppressing their wages during decades of record breaking quarterly earnings.

By the way, selling out the welfare of your nation for personal gain is the very definition of Treason…and we all know what the ‘penalty’ for treason is.

The law [lack of enforcement to be specific] protects you today but it won’t protect you forever!

Moving on, I stumbled onto this article by none other than the illustrious Paul Krugman that can be read a dozen different ways…

World economy stabilizing says Krugman

ABU DHABI, May 25 (Reuters) - The world economy has avoided "utter catastrophe" and industrialized countries could register growth this year, Nobel Prize-winning economist Paul Krugman said on Monday. [Note the ‘qualifiers’, a lot of things ‘could’ happen, it’s just that some things are more ‘probable’ than others.]

"I will not be surprised to see world trade stabilize, world industrial production stabilize and start to grow two months from now," Krugman told a seminar.

"I would not be surprised to see flat to positive GDP growth in the United States, and maybe even in Europe, in the second half of the year." [Two ‘I would not be surprised’s’ in a row! Is he merely providing a hat tip to the ‘spin doctors’ or is this a simple admission of the fact that ‘anything is possible’?]

The Princeton professor and New York Times columnist has said he fears a decade-long slump like that experienced by Japan in the 1990s.

He has criticized the U.S. administration's bailout plan to persuade investors to help rid banks of up to $1 trillion in toxic assets as amounting to subsidized purchases of bad assets.

Speaking in UAE, the world's third-largest oil exporter, Krugman said Japan's solution of export-led growth would not work because the downturn has been global.

"In some sense we may be past the worst but there is a big difference between stabilizing and actually making up the lost ground," he said.

"We have averted utter catastrophe,[for now] but how do we get real recovery? [I strongly suspect ‘real recovery’ is not and never was a part of the plan.]

"We can't all export our way to recovery. There's no other planet to trade with. So the road Japan took is not available to us all," Krugman said.

Global recovery could come about through more investment by major corporations, the emergence of a major technological innovation to match the IT revolution of the 1990s or government moves on climate change. [Um, bizarrely, both of these ‘initiatives’ rely upon a ‘solvent’ customer base, something we do not currently enjoy… ]

"Legislation that will establish a capping grade system for greenhouse gases' emissions is moving forward," he said, referring to the U.S. Congress.

"When the Europeans probably follow suit, and the Japanese, and negotiations begin with developing countries to work them into the system, that will provide enormous incentive for businesses to start investing and prepare for the new regime on emissions... But that's a hope, that's not a certainty."

What do you find ‘interesting’ about this particular article?

Did you see it, right there at the end?

Did you see the enormous rock we’ve been beating our heads on for the past thirty years?

Worse good citizen, do you see the ‘insanity’ of repeatedly trying to break that rock?

What rock am I babbling about?

It’s the next ‘big’ thing. The technological break through that will create millions of new jobs, lifting the population of the planet out of poverty…temporarily.

Instead of working on creating a ‘sustainable’ social model, these idiots are seeking another ‘bubble’ that will lead us to the next bubble!

Don’t look now good citizen but Mr. Krugman points directly to the ‘next big thing’…the ‘problem’ is there isn’t (currently) a ‘profitable’ way to do it.

In case I’m being ‘opaque’ here good citizen, it is Mr. K’s reference to ‘another planet to trade with’.

If we were ever to crack the ‘speed of light’ problem, all of those twinkling lights up in the sky would instantly become ‘real estate’…and the governments of the world wouldn’t hesitate to sell it to you!

Flipping that rock over, developing this technology would nullify the government’s monopoly on ‘death from above’. That aside, it is hard enough to enforce laws on even a local basis, how well do you suppose a ‘galactic tax law’ would hold up?

No, when viewed on a broader scale there is little incentive for the ‘powers that be’ to fund initiatives intended to ‘reap the stars’.

Worse, those same powers are incapable of conceiving of a social model that doesn’t involve slavery.

So for them the only solution is to leap from bubble to bubble, even if it involves ever-greater degrees of civil unrest (due to increasing marginalization of the working classes.)

What do you suppose could be developed quickly, with a minimal draw on resources, that would generate tens of millions of jobs?

Can’t think of anything? You’re not alone. The ‘Masters of the Universe’ can’t come up with anything either…that’s why they are spending heavily on methods to monitor and suppress the ‘rabble’.

Until there is something truly ‘new’ under the sun, the probability of economic recovery will remain ‘remote’.

Thanks for letting me inside your head,


Monday, May 25, 2009


Greetings good citizen,

Traffic is down all around as Memorial Day celebrations have fanned out across all three days of the long weekend.

The ‘hot tidbit’ of the moment is on the wire services reporting how a fresh North Korean nuclear weapons test has rattled the Asian markets.

It is somewhat bizarre that the one political culture that frets endlessly over who should or should not have a nuclear weapon is the same culture which is alone in actually using this technology.

It is also the same political culture that is quick to threaten non-nuclear nations with nuclear annihilation. (Although the last nation reported to be threatened with nuclear annihilation was nuclear-armed Pakistan. While a nuke is a nuke, the ‘delivery systems’ are akin to comparing catapults with a continuously updated GPS based targeting system that is accurate to a few feet even if the weapon was launched from the other side of the planet…

The difference between the two is the difference between ‘hope’ and ‘certainty’. No irony should be lost on the fact that the huge build up of our nuclear arsenal over the years (as well as a steady stream of ‘improvements’ in both accuracy and delivery systems for this ‘arsenal]) has formed the ‘foundation’ of our current, monstrous government debt.

It is perhaps more ironic that other nations have not followed us down the path towards ‘nuclear supremacy’, other nations have concentrated on providing for their people instead of squandering their future on an ‘unwinable’ race.

Let the US pay for the R&D, they’ll sell us whatever they develop anyway.

This is perhaps the most ‘attractive’ feature of gaining membership to the ‘nuclear club’. President Bush has committed to sell all kinds of ‘state of the art’ nuclear technology to India…because we ‘like’ India…even if they aren’t signatories of the nuclear non-proliferation treaty.

This is yet another example of the longstanding public/private ‘partnership’ where the public foots the tab for the research, which is handed over for free to private sector corporations who sell the developments for the profit of their shareowners.

Which is to point out that we will never live in a world that is free of nuclear weapons until the motive to profit from this technology is eliminated.

In fact the only way to save the planet itself from being recklessly over-exploited is to remove the ability of the individual to profit from the pursuit of such activity.

The practice of selling votes for campaign contributions is a heinous abrogation of the responsibility of those elected to ‘represent’ us.

Naturally, there isn’t a single sitting politician that will admit to selling out their constituency for personal gain. Yet our representatives consistently fail to protect our interests.

The most recent failure is the passage of the Credit Card bill that fails to enact standards to prevent usury.

Is this merely an oversight or an extension of the belief that ‘markets are self-regulating’?

Simply put good citizen, a system that places profits for the individual ahead of the safety and well-being of society at large is not only foolish but dangerous in the extreme.

It is our collective duty to preserve the legacy of liberty this nation was founded upon so it does not 'perish’ from this earth…

There is at last a blueprint to save our nation from the fate of so many empires before us.

The drumbeat that the US is turning into a ‘banana republic’ grows louder good citizen.

The only one capable of saving us from this fate is ‘the man in the mirror’.

Thanks for letting me inside your head,


Sunday, May 24, 2009

We're Broke!

Greetings good citizen,

Do you have a clue what or who to believe anymore? I think few will disagree with me when I posit that what passes for ‘information’ in the world is, to a large degree, very carefully, um, ‘couched’.

You’re only told part of the story, even when the report is on issues that don’t cast either the media (or our corporate overlords) in a particularly favorable light.

Which is to point out that even bad news is reported with a ‘positive spin’ or at the very least, wrapped in a degree of ‘deniability’.

It’s time for a little ‘thought experiment’…what do you think would happen if the President of the US came right out and admitted the US was ‘broke’?

Let us look into precisely this phenomenon before we venture once again into ‘money is meaningless’ land.

The source of tonight’s offering is the highly respected market analyst Jesse over at Jesse’s crossroads café.

Jesse's Café Américain

"What is crooked cannot be made straight, and what is lacking cannot be counted." Ecclesiastes

23 May 2009
Ladies and Gentlemen: the US Is Insolvent

"We are out of money." Barack Obama May 23, 2009

Obama openly says what anyone with common sense has known for quite some time: the US is broke, and will not be able to honor its financial and fiduciary obligations.

The question remains how the US restructures that debt and how big a haircut the debt holders will take.

20%? 30%? More like upwards of 50% at least in real terms.

And who are these debt holders?

Anyone who hold Treasury debt obligations and financial assets, from the Long Bond to the US Dollar, and assets guaranteed by the Federal Reserve and the Treasury.

Technically, the debt will be serviced and the interest paid according to the terms of the agreements, with devalued US dollars. [Understand these, are the same ‘US dollars’ you will be forced to make ends meet with…so the devaluation train doesn’t ‘stop’ with investors in US government debt…it extends to anyone who is paid US dollars!]

The process will continue until the debt is restructured and the dollar is replaced with a new dollar. This may take some years.

But we are now in the endgame. [Below are links to related commentary on the original document.]

The Incontrovertible Truth About Debt, Deleveraging, Devaluation and Recovery

Why the US Has Gone Broke: Chalmers Johnson

Marc Faber Sees Bankruptcy for the US

In 2009 the US Will Be Forced to Selectively Default and Devalue Its Debt

A Credit Bubble of Historic Proportion

Shhhhhh.... Here is a Secret Worth Remembering

Didn't you just know they would spill it over a long holiday weekend?

Don't be too concerned, there will be more spin and denials after this trial balloon has been floated, and life will go on.

"Oh, that's not what Obama meant. He means we have a problem but there are the means and the time to address and repair it before it becomes too great."

People have an enormous capacity for delusion bordering on selective amnesia. Go back and read the posts on this blog starting in September 2008. Then reflect on what has been said recently on Wall Street and you will see what we mean.

We are now in the endgame of an historic credit bubble that will result in a currency crisis of epic proportions.

[Jesse usually prints the ‘source’ article below his own commentary…so I am ‘assuming’ his ‘source’ was someone at ‘Drudge’.]


Sat May 23 2009 10:32:18 ET

In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: "We are out of money."

C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.

SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.

So we've got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it's putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.

So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don't reduce long-term health care inflation substantially, we can't get control of the deficit.

So, one option is just to do nothing. We say, well, it's too expensive for us to make some short-term investments in health care. We can't afford it. We've got this big deficit. Let's just keep the health care system that we've got now.

Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything"...

It’s hard to tell without examining the source article if it actually stops so abruptly…but what you see is what there was.

Without launching into another screed about the meaninglessness of money, this news sure kicks the ‘deflationista’s’ solidly in the crotch!

Deflation only exists when the value of currency drops slower than the value of assets.

In a case of peculiar timing, the dollar has recently resumed its long downward trend.

Worse, we must now ask ourselves if the ‘explanation’ for rising oil prices (in light of a global oil glut) isn’t physical evidence of our falling purchasing power?

Ironically, this will spark some serious repercussions for the ‘green shoots’ crowd. Calls for these people’s ‘heads on a platter’ will be deafening.

How can there be any ‘credible’ discussion of an economic recovery when our currency is falling off a cliff, ‘Zimbabwe style’?

Bizarrely (at least in the beginning) things will chug along as they always have. It will be the coming tsunami of rapidly rising commodity prices that will cause our now global supply lines to collapse.

Understand that our ‘creditors’ have a vested interest in ‘re-capturing’ as much value as they can from their rapidly declining dollar holdings.

They’ll still ship to us on credit…but at greatly inflated prices. Wide categories of consumer goods are no longer produced here; they will use this ‘leverage’ to recoup what they can.

Some of you may wonder why I keep insisting that ‘money is meaningless’ yet I decline to say money is worthless.

Money is an abject failure when it comes to ‘simplifying’ barter, a phenomenon we have witnessed repeated with the creation of the ‘cheaper there’…which is merely the product of currency manipulation and nothing more.

If a duck is a duck and a pig is a pig then a dollar must be a dollar! (Equal in value no matter where it is minted or what it is called!)

But today we have a Chinese yuan that can be had six for a dollar, while a single yuan buys four times what a dollar will! (Which is why the average Chinese worker doesn’t starve to death.)

Well good citizen, that shit is about to do a mad about face! No irony should be lost on the fact that US workers will ‘suddenly’ become competitive again and it will happen almost virtually overnight!

Not that this will do any of us any good.

The stooges that put us in this position will bleed money at an incredible rate as their overseas operations suddenly become ‘uncompetitive’.

And we will all learn an important lesson about the ‘value’ of money and the danger of letting the privileged few manipulate it to their own advantage.

Tens of millions of people lost their livelihoods and whole sector lost their productive capacity so a few could wax rich…

I’ll leave it to your imagination what should be done to the people responsible for such selfishness, selfishness that devastated the entire global economy.

Did I give the Obama administration 30 weeks? Yes I did…he had a chance to pull us back from the precipice…but he was beholden to a different agenda when he took the helm.

Well good citizen, there are only a couple of weeks remaining and things are going to get ‘mighty interesting’ soon.

If I’m not mistaken, week 30 falls either at the end of July or the beginning of August.

I predict things will be in ‘full swing’ by then.

Thanks for letting me inside your head,


Saturday, May 23, 2009

Jobs? What jobs?

Greetings good citizen,

As is typical of the day before a long holiday weekend, the markets traded sideways for much of the day before dipping into negative territory at the close.

Not much in the news today either (on the economic front, anyway.) Just the usual psychobabble about imaginary consumer sentiment picking up and more yapping about ‘green shoots’ being in evidence all around.

There was a rather curious article that posited once again that the true cause of the ‘downturn’ was psychological. So apparently that charlatan thinks being broke is all in our heads!

Although such a mental incompetent would probably mock me for being foolish enough as to opine that anyone who wasn’t rich matters…only the attitude of the wealthy counts!

Which brings us to a bizarre question…why aren’t the rich ‘happy’?

I can come up with several reasons that have nothing to do with money and are indeed, um, ‘psychological problems’.

Which is to belabor the obvious, that anyone who thinks the ‘recession’ is purely psychological has some issues of their own that need attention.

But we knew that…so we arrive at tonight’s offering where we once again close the noose around the ‘green shoots’ crowd’s neck when we inquire, where are all of these jobs coming from?

California Led U.S. in Job Losses in April

Published: May 22, 2009

WASHINGTON (AP) — Forty-four states lost jobs in April, led by California where employers slashed 63,700 positions, as the recession took a further toll on workers. [Understand good citizen that the US isn’t the only nation hemorrhaging jobs, we are actually behind most other ‘advanced’ nations in the job loss as percentage of workforce category…and no, this isn’t another ‘green shoot’!]

Trailing California in over-the-month job losses were Texas, where 39,500 jobs vanished; Michigan, which lost 38,400 jobs; and Ohio, where payrolls fell 25,200, according to a Labor Department report issued Friday.

California’s unemployment rate was 11 percent last month, fifth-highest in the country. Michigan’s jobless rate was the highest at 12.9 percent, followed by Oregon at 12 percent, South Carolina at 11.5 percent and Rhode Island at 11.1 percent.

As the recession eats into sales and profits, companies have laid off workers and turned to other cost-cutting measures, like holding down hours and freezing or trimming pay.

Since the recession began in December 2007, the United States has lost a net total of 5.7 million jobs. The nationwide unemployment rate now stands at 8.9 percent, a quarter-century high. [We will eventually have to ask the question nobody else is asking…where are the jobs to replace these (in many cases permanently) lost jobs going to come from?]

The Federal Reserve chairman, Ben S. Bernanke, and some economists hope the pace of layoffs will moderate as the recession eases its grip and probably ends later this year.

But even if employers reduce firings, the nationwide unemployment rate is expected to hit double digits by year-end. Employers will not be in any mood to ramp up hiring until they feel confident that any recovery has staying power, economists say.

In Friday’s state report, Arkansas and Montana tied for the biggest over-the-month payroll gains at 1,500 each. They were followed by Florida, where jobs increased by 1,300 —a dose of good news for a state that has been especially hard-hit by fallout from the housing collapse.

On the hiring front, North Dakota [The ‘defacto’ home of most credit card companies] again registered the nation’s lowest unemployment rate — 4 percent. It was followed by Nebraska with a 4.4 percent jobless rate, Wyoming at 4.5 percent and South Dakota with 4.8 percent. [Is there any irony in the fact that Wyoming and South Dakota are two of the least populous states in the nation? These four aren’t called ‘fly-over’ states for nothing…]

Layoffs in manufacturing, construction and retail are common threads running through the states with the highest unemployment rates. Other states, including South Carolina, Michigan and Rhode Island, are having difficulty luring new types of companies to help cushion the loss of manufacturing jobs and retraining laid-off factory workers for other kinds of employment.

Nearly 6.7 million people nationwide are drawing state unemployment insurance, the highest on records dating to 1967, the federal government reported Thursday. The crush has exhausted unemployment funds in California, New York and elsewhere, forcing them to tap the federal government for money to keep paying benefits.

While were on this rather ‘sensitive’ topic, let’s dispel a few ‘myths’ while we’re here.

After we’ve all gotten our advanced college degrees, we’re all going to work in the alternative energy sector, saving our economy while saving the planet in the process!

Currently Germany and China are the ‘leaders’ in solar and wind technology. Both of these ‘export oriented’ nations already have the necessary ‘infrastructure’ to press that advantage.

Worse, the WTO will ‘spank’ us if we attempt to close our borders to any imported technology. Still worse, our weak minded politicians aren’t of a mind to go there, even if they did (somehow) grow a pair.

So assuming we’d have to ‘compete’ for business in our own domestic energy market, this doesn’t inspire much confidence that these new ‘green collar’ jobs will pay anything approaching a ‘living wage’.

Worse, once the process is ‘perfected’, there are zero guarantees that the facilities/jobs will stay here.

Gotta be ‘competitive’ ya know!

Naturally, this stuff is expensive…if the jobs making this green technology don’t pay well, who the hell is going to buy it?

It’s the central problem facing employers across the nation (as well as around the world)…show me the customers!

It only makes sense that in a lower wage/lower price world there will be fewer customers for pretty much everything.

So where are the jobs that will replace the 6.7 million jobs that have been destroyed to date?

Worse, a majority of these jobs (and the equipment to do the job) has been ‘off-shored’, never to return.

The important thing here is to keep this issue in ‘perspective’, if you don’t have a job it’s not their problem, it’s yours!

Thanks for letting me inside your head,


Friday, May 22, 2009

Contrast & Compare

Greetings good citizen,

How was your day off? What’s that, you didn’t know you had yesterday off? I guess it surprised us all then. Actually I took a ‘mental health day’ last night. I felt like I was coming down with something so I turned in…and today I’m right as rain! (Figuratively speaking.)

So what was the ‘meme’ of the day? Oh yeah, it looks like the UK is in ‘danger’ of losing its AAA credit rating. (I find it odd that the BBC was mute on the subject tonight…perhaps it’s already ‘old news’ over there…)

Some of you might recall how oil prices sank into the basement just before the elections last year. Some of you might also remember hearing about a practice called ‘Contango’…where traders buy cheap oil and store it until the price goes up.

Which brings us to tonight’s first offering sans any mention of the fact they have run out of places to store oil. Despite the BBC running a story last night about the thousands of tanker’s full sitting in ports around the world. Each tanker holds roughly one to two million gallons of ($30 a barrel) oil.

Gas Is Up; Drivers May Not Cut Back

As oil futures closed above $60 a barrel on Wednesday, gas prices have risen as well - about 25 cents in the last three weeks.

Published: May 20, 2009

Thanks to lower fuel costs and a proliferation of travel bargains, Americans are expected to hit the roads this Memorial Day weekend in bigger numbers than last year.

Last summer’s energy shock drove gasoline prices well above $4 a gallon and forced people to cut back on driving. Then oil prices plunged, and the stratospheric cost of a gallon of gas became a dim memory. But gasoline has been rising rapidly in recent weeks.

Gasoline is selling for an average of $2.33 a gallon, up from $2.06 just last month, according to AAA, the automobile club, and a steep rise from the recent low of $1.67 a gallon in December. A cutback in refining production and the expected rebound in driving this weekend are helping to push up prices at the pump. [What part of ‘price manipulation’ don’t you get good citizen…let’s not forget that the dollar is dropping like a rock again, another important factor in the rise of commodity prices!]

Some analysts expect to see gas rise above $2.50 a gallon this summer. [There’s those ‘anal-ists’ again!]

The number of people traveling by car this weekend is projected to rise by 2.7 percent compared with 2008, to 27 million people, according to projections from AAA. Last year, road travel fell by 9.6 percent when prices surged, according to the automobile group. [Didn’t they recently announce that ‘miles traveled’ are down from this time last year? Weird how five million people losing their jobs during that time has that effect…yet, as you can see, gas prices are rising!]

“The bargains and the cheaper gas, combined with the stressed-out consumer who is ready for a break, will trump other concerns,” Robert L. Darbelnet, AAA’s chief executive, told reporters last week. “It is a slight uptick. In this economy, any uptick over last year is a positive sign.” [Since there is no way of knowing if vehicle use actually does pick up, which is to say there’s no way for YOU to independently verify it. What we really have here is ‘happy talk’.]

The jump in demand that accompanies summer travel is just one of many factors that are driving up energy prices.

Oil prices rose above $60 a barrel on Wednesday in New York, settling at $62.04, the highest level since November, after a weekly report from the Energy Department showed a drop in commercial inventories and gasoline production was curbed by fires at two refineries, in Texas and Pennsylvania.

Some analysts also say they believe that the worst of the economic slowdown may be over, even if a recovery could take a long time, infusing some optimism into the oil market. The Energy Department said recently that oil prices had risen after suggestions the economy “may have reached a turning point in the current recession.” [Understand good citizen, it is far more likely we’re seeing price manipulation and ‘speculators’ driving up the prices…again!]

“Oil prices have improved markedly in recent weeks, largely on ostensible signs that the global economy has begun its long-awaited recovery,” according to a report by PFC Energy, a consultancy. “But while evidence is mounting that the worst of the contraction is behind us, a broad economic recovery is still some time away.” [Although it ‘could’ be speculators ripping us off like they did the last time, considering there is currently a record setting ‘glut’ of oil on today’s markets…and what a ‘coincidence’, most of it was purchased at $30 a barrel!]

Oil markets are also weighing the effect on global supplies of a fresh round of violence in the Niger Delta, Nigeria’s oil-rich region. Last week, the Nigerian government started its biggest military offensive in the delta in years, mounting helicopter raids and naval attacks on militant camps. [Does this look a little ‘too convenient’ to anyone else? These same ‘militants’ are likely responsible for half of the increase per barrel we experienced last time…

The largest rebel group in the region, the Movement for the Emancipation of the Niger Delta, responded with calls for “an all-out war” and said it blew up two pipelines over the weekend. [Since it’s now Friday, they must they talking last weekend! for this to be in a Thursday news report. Meanwhile, protests over the government ‘action’ was part of tonight’s BBC broadcast…]

The fighting is threatening to further disrupt supplies from Nigeria, Africa’s top oil and gas exporter. Security forces clashed with militants on Tuesday near a flow station operated by Chevron in the western part of the Niger Delta, according to a report from Reuters. On Wednesday, Eni, the Italian oil company, said it was invoking emergency contract provisions that allow it to suspend export obligations at its Brass River terminal in the delta.

Nigeria’s state oil company, NNPC, said there had been no significant impact on oil production so far. “The success of the military campaign means that production can go on,” Levi Ajuonuma, a spokesman for the company, told Reuters. [Understand good citizen, besides the glut of oil sitting in tankers around the world, most of our oil comes from Canada, Mexico and Venezuela.]

Higher prices will be the main topic on the agenda of the Organization of the Petroleum Exporting Countries, whose members meet next week in Vienna to consider new production targets for the next few months. More than anything else, it was action by the members of the OPEC cartel that has helped push prices up since the beginning of the year. [Excuse me, does anyone want to explain how all of those tankers got filled with ‘cheap’ crude that have so fortuitously doubled in value over the past couple of weeks?]

After peaking at a record close of $145.29 a barrel last summer, oil prices slumped to a closing low of $33.87 a barrel by December as global credit markets froze and the global economy went into a tailspin.

In response, OPEC members agreed to cut their output by 4.2 million barrels during several rounds of feverish meetings over the last eight months, helping set a floor on the market. [Remember good citizen that all oil-exporting economies were hammered by drop in prices, and many ‘discounted’ their oil to keep the cash coming in…]

Despite the recent market rally and fragile optimism about the state of the economy, oil consumption in the United States, and across much of the world, still remains weak. In its latest monthly report, the International Energy Agency estimated that daily average oil consumption in 2009 would drop to 83.2 million barrels, a drop of 2.6 million barrels, or 3 percent, from last year. [So tell me again why prices are climbing since this obviously has nothing to do with ‘supply & demand’?]

“The pace of contraction is close to early 1980s levels, with a growing consensus that economic and oil demand recovery will be deferred to 2010,” the energy agency said. “A quick recovery remains so far elusive.” [We’re 2 years into this thing come August…isn’t it a bit late to be looking for a ‘quick’ anything!]

In the United States, oil demand has dropped without interruption for 15 months. According to the energy agency, oil demand fell by 5.9 percent in March, compared with the same time last year. [Okay, so they printed the other side of the coin…but they have left out the ‘contango’ part of the puzzle as well as the glut of oil stored off-shore by ‘speculators’. Where the F…is our government that these Wall Street vermin are ripping off the consumer like this while they’re taking trillions of taxpayer dollars?]

But the Memorial Day weekend could reverse that trend, if only temporarily, analysts said. [Yeah, aren’t these the same assholes that are ‘surprised’ by everything that happens on Wall Street?]

“You give the American consumers a reduction in price and consuming confidence is getting slightly better, I think people go back and take their vacations,” said Lawrence Goldstein, an energy analyst. “They don’t go on a spending binge, but they ease up a little bit.”

What about the 5 million that have found themselves on ‘permanent vacation’?

Honestly good citizen, the last two times proved to be a ‘scam’ and the SOB’s are at it again…and just like both prior occasions our government isn’t lifting a finger to stop them! (Remember the price at the pump was hovering around $3 a gallon before the 2006 mid-terms and it came back down to just under a buck in time for the elections…)

The last two times this ‘rip-off’ was chalked up to having a pair of ‘oilmen’ in the White House…what do we chalk it up to this time?

I chose tonight’s second offering as a contrast piece to our first offering.

Economic Reality Check Sends Markets Lower

Published: May 21, 2009

The increased likelihood of a downgrade of Britain’s credit rating and less positive economic signals from the United States dented investor hopes Thursday that the world’s largest economies will show much vigor in the near term.

Shares in Europe finished sharply lower and the major indexes on Wall Street were all down more than 2 percent in afternoon trading. [Although there was a strong ‘end of the day rally’.]

A collection of factors helped to drag stock indexes lower on both sides of the Atlantic.

The first came Wednesday when the Federal Reserve, in its minutes of the April meeting, revised its outlook and said that the economy was likely to contract by 1.3 to 2 percent compared with the earlier estimates of 0.5 and 1.3 percent. Fed policymakers also said the unemployment rate might approach 10 percent. [What they’re not saying is it will be over 10% by the end of the summer!]

A second came Thursday when the ratings agency Standard & Poor’s cut its outlook on Britain’s sovereign debt rating to negative from stable, while re-affirming the ‘AAA’ rating. Then, data from the American government showed that the number of people continuing to claim unemployment insurance rose to a new high.

The Dow Jones industrial average was down 189 points, or 2.2 percent in afternoon trading. The broader Standard & Poor’s 500-stock index declined 2.4 percent, while the technology heavy Nasdaq fell 2.7 percent. [As you already know the markets ‘closed’ down 129 points today.]

In Europe, the German DAX closed down 2.7 percent, while the CAC-40 in Paris fell 2.6 percent and the British FTSE-100 shed 2.8 percent. The European Dow Jones Stoxx 600 Index, a broad regional benchmark, slid 2 percent. It had climbed 26 percent since the start of March.

In Asia, the Nikkei-255 closed down almost 1 percent and the Hang Seng index in Hong Kong lost 1.6 percent.

The declines represented a reality check for investors, some of whom had become convinced that the recovery in stock prices seen since early March would continue seamlessly. [As far as ‘declines’ go, they ain’t seen nothin’ yet!]

In Europe, the main theme was the move by S&P. ‘AAA’ ratings are important for foreign exchange reserve managers and pension fund managers. Some funds have requirements that only ‘AAA’ assets can be held for core investments. A lower rating would also mean the government would pay higher interest rates to borrow on bond markets. [Meanwhile, rumblings continue about how long the US will be able to retain its AAA rating…]

“It’s dragged down a lot of sectors, with implications for all U.K. assets,” said James Hughes, a market analyst at CMC Markets in London. [I repeat, the BBC was mute on this topic tonight…not a single word.]

Many analysts had initially assumed that the outlook for the British economy was bleaker than that of Continental Europe. Recently, however, that view had changed amid the release of weak growth data from Germany and other European economies. So a downgrade might also have implications for Europe, Mr. Hughes said.

Driving the S&P decision was a re-assessment of the cost of the British financial sector bailout and concern about a sharp deterioration in the government debt-to-G.D.P. ratio, estimated at 100 percent in 2013 from around 49 percent this year.

The chancellor of the Exchequer Alistair Darling “is going to have pull a rabbit out of the hat at November’s pre-budget report or suffer a sovereign downgrade,” said Chris Turner, head of foreign exchange strategy at ING.

The pound lost over 2 cents to $1.55 after the news, but recovered some ground to trade above $1.57. It was slightly lower against the euro.

The price of the two-year benchmark gilt, or British government bond, recovered from a sharp sell off after the government successfully sold all 5 billion-pounds, or $1.6 billion, at an auction after the ratings announcement.

In the United States, the Labor Department said that initial claims for jobless benefits fell to a seasonally adjusted 631,000, down from a revised figure of 643,000 the previous week. Economists expect factory shutdowns by Chrysler and General Motors to inflate the initial claims numbers through June.

The number of people continuing to claim unemployment insurance rose to nearly 6.7 million from about 6.6 million, the department said. That was the highest total on records dating to 1967 and the 16th straight record. [Oh yeah, this ‘recession’ is so over…NOT!]

Meanwhile, comments from the former chairman of the Federal Reserve, Alan Greenspan, after the close of trading Wednesday also weighed on sentiment. He suggested he sees a bigger capital shortfall in the banking system than reflected in regulators’ stress tests.

Investors were already unease before Mr. Greenspan’s comments after the Fed warned Wednesday that the United States economy was likely to contract 1.3 to 2 percent this year compared with the earlier estimates of 0.5 and 1.3 percent.

The Fed warning also weighed on oil prices. Light, sweet crude for July delivery dropped $1.48, or 2.4 percent, to $60.56 a barrel in New York trading.

There were, however, some positive signals for the European economy Thursday. [Is it beginning to look like somebody ‘outlawed’ bad economic reports?]

A monthly purchasing managers’ survey for the euro-area manufacturing and services sectors improved in May to levels last seen before the collapse of the investment bank Lehman Brothers in September. In addition, British retail sales rose much more than expected in April, suggesting that British consumer spending is holding up despite the recession.

There, like here, we can only wonder who is spending money they don’t have?

Then we have the ‘fudge factor’ to contend with as so many government statistics are heavily ‘massaged’ these days.

With so much bald faced lying going on, the future of the Republic looks mighty grim good citizen.

You may be of the opinion that these, um, ‘mis-statements’ don’t effect you and yours, not right now and not today…would that this were true.

If they are so willing to lie and obfuscate the truth now, how will you know when they are telling the truth?

Short answer, you won’t.

Ironically, this crisis is insoluble until ‘faith’ can be restored in our main institutions. As long as the media shirks its responsibility to the public to report the unvarnished truth, we cannot recover.

Until entrenched wealth and private interests are uprooted and cast out of our society we have no hope of ever enjoying freedom again.

There is no ‘I’ in team good citizen…and if you weren’t born rich, you’re not on ‘their team’.

Thanks for letting me inside your head,


Wednesday, May 20, 2009

Welcome to the show!

Greetings good citizen,

The ‘stupidity markets' got a good slap upside the head today when yesterday’s optimism was proven unfounded. ‘Homebuilder confidence’ was ‘mistranslated’ by analysts who failed to realize the homebuilders were ‘confident’ that things are getting worse, not better…

And the media had the chutzpah to regurgitate its new favorite phrase, surprised. Why would anyone be ‘surprised’ that housing starts are at their lowest level since 1959 when people are being foreclosed upon wholesale?

What’s so ‘surprising’ about that?

Is it any wonder news organizations are teetering on the verge of bankruptcy?

Is it surprising that the government has reached new lows in credibility?

What do you think about the government’s new emission and mileage standards for cars that will never be mass-produced because too few people can afford them?

Worse, our newly restructured auto industry will emerge from bankruptcy as a tiny shadow of what it formerly was.

It is no small ‘aside’ to contemplate what those millions of workers will do now that they’ve been made redundant through the treasonous acts of a government that failed to protect the nation’s workers…at the behest of an investor class that cares only about itself.

It should be very plain to see good citizen that commerce must serve the needs of the nation that founds it ahead of the self-interest of the scoundrels that own it.

Globalization provides no benefit to society, all benefit is reaped by the owner, at society’s expense.

Not only have these selfish bastards stolen your job but now they’re preparing to tax you for not spending enough!

Yes, good citizen, you will be forced to repay the money they are stealing from the government in your name…unless you smarten up.

On the backside tonight I listened to the BBC as is my custom. They announced that Japan’s economy has shrunk faster than it ever has since they started keeping track of such things in the 1950’s.

The ‘headline’ is repeated along with the rest and finally, we get an ‘on the scene’ reporter for the ‘whole story’. The actual number is indeed the ‘worst ever’ BUT, the reporter starts ‘waffling’ left and right…spewing nonsense like this ‘might be’ as bad as it gets, then proceeds to claim there are ‘green shoots’ in Japan as well.

We’ve heard this before with the subprime crisis, first we heard it was ‘contained’ then we were assured the ‘worst was over’ and recovery (in housing) would occur in the next quarter…and that was over two years ago! Just as the same blathering idiots are still shouting we will see a ‘turnaround’ by the second quarter in the global economy…I ask you to recall that this mess wasn’t supposed to get ‘this bad’…or so the same people told us then.

So far good citizen, the ‘Nattering Naybobs of Negativity’ have been kicking the Pervasive Pollyanna’s of Prosperity’s asses around the block!

The question lurking in the back of your mind should be ‘why aren’t things getting better?’

Well, good citizen, why aren’t things getting better? Is it because we haven’t given the banking system enough time to heal or is it because a ‘solvent’ banking system is useless when most consumers are themselves insolvent?

This brings us back to the issue of jobs that pay a living wage…did you happen to notice that all of the sectors that offer ‘above average’ wages are shrinking down to nothing?

Where do you suppose this piece of the puzzle fits into economist’s predictions that once the economy recovers (read as ‘stops shrinking’) it will be a long time before anything even remotely resembling ‘prosperity’ returns…

Well good citizen, how long do you think ‘a long time’ is? Japan is entering its third decade of poor economic performance and it’s not over yet, not by a long shot.

Is this what you want for your children good citizen?

Understand that the States are in such dire straits that we may see a repeat of what happened in the first Great Depression…the schools will shut down because the states can no longer afford to fund them.

Take a good look at what’s happening in California right now…

It’s only a matter of weeks (more than 4, less than 40) before the ‘Golden State’ collapses into chaos and troops are sent in to restore order…temporarily.

Things aren’t getting any better good citizen and you know why, it’s because they aren’t doing the right things to get the economy in ‘proper’ working order.

Each and every one of you is being treated like an expendable widget. You are being forced to sacrifice your (and your family’s) well-being for the privilege of being abused by an employer that has only their own best interests at heart.

Society or life as we have come to know it is starting to unravel. Once the pace reaches a certain velocity, the unraveling will become unstoppable.

Sadly, too few of you are willing to risk your creature comforts to put a stop to the unraveling…and that may be for the best…although the resulting war may threaten the very survival of our species.

While I wish it were otherwise, it seems there is no other way.

My advice good citizen is ‘don’t panic’. Keep your head and you may make it through to the other side.

She’s gonna blow good citizen…likely sooner than later. When she does, sit back and watch the show.

Thanks for letting me inside your head,


Tuesday, May 19, 2009

Half off sale!

Greetings good citizen,

Investors drove the market higher today and it finally occurred to me why these idiots are buying instead of running for the hills.

Our ‘best and brightest’ see something that you and I don’t see…mainly that the market is ‘half off’. While you and I see this as continued deterioration of our economic conditions, these ‘geniuses’ stupidly think the markets will return to their former totally bogus levels.

Understand good citizen, if the markets DO return to their former levels, you will need a million dollar bill in your pocket to run down to the ‘nearest’ (it won’t be local by any stretch of the imagination) store to buy a gallon of milk and a loaf of bread.

The fly in this ointment is you won’t be earning a million dollars an hour although you might make more than this a week…but not much more. So if you don’t personally know the guy with a cow (and have something he wants to trade you for some milk) and you don’t have the ingredients to make your own bread, you ain’t getting’ the sumbitch!

Okay, one of the comments I keep seeing is how the markets keep running up on ‘light volume’. This is one of the deceptive features of the stupidity ‘stock markets’, there’s no law against overpaying for a small number of stocks.

Since much of the investor classes wealth is derived from the price of their stock holdings, you can understand their interest in driving up the price of the stocks they hold.

Apparently the p/e ratio is a lagging indicator as it is only reported quarterly. Understand that last quarter many companies ‘beat’ earnings expectations…not by selling more but by reducing ‘overhead’.

How many quarters do you suppose they can keep pulling that rabbit out of the hat? Can they do it until we’re all unemployed?

Because that’s where this is headed.

Hopefully it is apparent to you what folly it is to keep pumping ‘funny money’ into the banking system…it’s directly related to the ‘slight of hand’ that keeps stock prices artificially high.

If you knew how much of the (recorded) US economy isn’t produced in the US, you’d revolt.

So we arrive at tonight’s offering
where we once again can only shake our heads in disbelief.

Wall Street Higher on a Buying Spree
Article Tools Sponsored By
Published: May 18, 2009

Wall Street’s recent buying spree, interrupted last week, revved up again on Monday.

Traders seized on last week’s stock declines as a chance to get back in at cheaper prices, and they pushed shares of financial firms sharply higher, bettering [betting?] that the markets would keep climbing. Rising oil prices lifted energy producers, and a better than-expected profit at the home-improvement chain Lowe’s helped to bolster consumer stocks. [There it is again! Why does anyone believe people (market analysts) that are so consistently wrong? Does anyone else smell a scam?]

Shortly before 1 p.m., the Dow Jones industrial average was up 185 points or 2.2 percent. The broader Standard & Poor’s 500-stock index was also 2.2 percent higher. The Dow fell 3 percent and the S.&P. 500 skidded 5 percent last week.

Shares of Bank of America were up 11.8 percent after analysts at Goldman Sachs named the company a “conviction buy,” and Citigroup rose 5.7 percent. [Um, neither of these stocks should be Dow components…and if Goldman Sachs is saying ‘buy’, I’m thinking ‘sell quick’!]

The financial services provider State Street Corporation rose 6 percent after announcing that it would raise more than $1 billion in stock and debt not backed up by the government’s liquidity-guarantee program as it seeks to pay back its bailout funds.

Bailout recipients like Wells Fargo to Morgan Stanley have been raising new unsecured capital in recent weeks, aiming to get out of the government’s Troubled Asset Relief Program.

Weaker retail sales helped to stifle some of the momentum of Wall Street’s recent rally last week, raising concerns that talk of glimmers of economic hope and “green shoots” of recovery could be overblown. But on Monday, many investors used the market dip as an excuse to buy. [Because these boneheads think the market is ‘half off’ rather than halfway to its new high…]

“The pullback last week created a little bit of breathing room, and buyers might be more apt to step in at these levels,” said Todd Salamone, senior vice president of research at Schaeffer’s Investment Research.

Shares of Lowe’s rose 6.2 percent after the home-improvement chain reported lower earnings that nevertheless beat analysts’ expectations. Shares of rival Home Depot were up nearly 5 percent, and other retailers also gained ground on hopes that wary consumers would come out of hibernation this spring.

Last week, the government threw some ice over hopes for a quick rebound in consumer spending when it reported that retail sales in April fell by a greater-than-expected 0.4 percent. Sales at restaurants, clothing stores, gasoline stations and electronics retailers were all lower for the month, the Commerce Department reported.

Although stock markets have surged more than 30 percent from their 12-year lows set in early March, some analysts warn that investors seem to be betting on a quick economic recovery, one that may not materialize.

“That’s going to be quite difficult,” said John Brady at MF Global. “Unemployment is going to move higher, and consumers are going to continue to increase savings.”

In Europe, the major exchanges were all more than 2.2 percent higher, and a closely watched gauge of bank willingness to lend showed more signs of improving. The three-month London interbank offered rate, a measure of how much banks charge each other to borrow money, fell to 0.79 percent, its lowest levels in years.

Britain’s economy is one of the few that is in worse shape than ours…thanks to US ‘financial innovation’. AIG fell into the now 180 billion-dollar hole its in due to the activities of its London office.

The current situation is NOT anything like the (first) Great Depression where ‘Keynesian stimulus’ worked because the money you put into people’s pockets was used to purchase goods that were domestically produced.

We’re in this pickle today because people spent money they didn’t have buying ‘imported’ goods. Is this an ‘oversimplification’? I don’t think so.

Until we restore the balance between what we produce and what we buy, what passes for ‘our’ economy will not improve.

As has too frequently been the case today’s ‘rally’ was led by the ‘financials’, the same troubled banks that have already swallowed nearly 12 trillion-dollars of taxpayer money.

What do you suppose it is that makes these deeply troubled institutions so attractive to investors? Are we dealing with a phenomenon akin to the one described in the title of this piece? Do investors look at the former prices these socks commanded (during the fraudulent bubble) and find their current pricing ‘irresistible?

Let’s make sure we all understand the banking ‘business model’. Besides late fees and overdraft charges, the banks charge a nominal fee to ‘handle’ your money…but this isn’t the ‘meat and potato’s’ of banking. Banks exist to loan money.

Bankers make their money by charging you interest to borrow ‘other people’s money’.
If there aren’t enough people willing to pay hefty interest charges then banks quite simply don’t make money.

This is where we are today and this is where we will be tomorrow and for a long time coming. There are too few people that have the wherewithal to borrow even small sums of money.

Worse, people that are already carrying more debt than they can comfortably handle are losing their jobs. This causes those people to default on debt they already had, income banks are counting on to continue operating. (If we removed the taxpayer spigot from the equation.)

Our man Timmy has pledged that he won’t let a ‘systemically important’ financial institution fail…and coincidentally, the stock of those same institutions are the ones that keep leading the run up of the Dow…

The housing, insurance and now the automotive sectors are on the ropes, two have already shed hundreds of thousands of workers…where oh where will those worker find employment that will even come close to replacing the wages they have lost?

Short answer, they won’t.

So how good does investing in financials look now?

Understand good citizen that the government isn’t a bottomless pit of money, if things keep on as they are, the government will place us on the hook for all of what currently passes for our economy.

While nothing is being done to restore balance to the economy, nothing.

Eek, eek, shriek, shriek…were all doomed! But that’s NOT what I’m saying.

What I’m saying is read ‘em and weep…this is the truth good citizen and I think you can handle it.

Thanks for letting me inside your head,