Wednesday, September 30, 2009

Moral relativism...

Greetings good citizen,

I miss CG and his romping, stomping, in your face outrage over conservative ideology…

Nobody does it better, so I’m not going to try.

Because I don’t have to…sometimes the conservatives lay it all out there for you! I dunno who this Gene Marks guy is but I’m a little baffled why such a rabid capitalist hasn’t gone to court to modify his (phonetic anyway) ‘famous’ last name…

Onward to tonight’s offering

[Purloined from: The Economist’s view.]


Does America Need A ‘Moral Revival’?

Andrew Leonard's bad day:

The brighter side of high unemployment, Andrew Leonard: ...BusinessWeek contributor Gene Marks ... gloats about how high unemployment is good for his business. I guess any publicity is good publicity... But he didn't pick a good day. Having already been irritated enough by David Brooks, I can't say I was exactly in the mood for an explanation of why high unemployment is great for small businesses because now there are so many "good, bright, educated people" who are "willing -- no, let's admit -- grateful to work for less money and longer hours."

Even better, the bad economy provides cover for getting rid of that "dead weight" that you were feeling too guilty to throw overboard. ... And the capper:

Because let's face it: The upside to the high unemployment rate is that it has helped us control our payroll costs. No one's asking for raises. No one's demanding more benefits. ...It's now easier and more politically correct to hire part-timers, subcontractors, and other outsourced help to fill the gaps. That's because when people are out of work, they'll do whatever they've got to do to bring in cash.

I understand that Gene Marks is ... a small business owner (he sells customer relationship management tools), who is attempting to speak to other small business owners, all of whom, presumably, are also delighted that the potential hiring pool is so chock full of talent desperate to be exploited right now.

But one wonders who exactly is supposed to purchase all those products and services from the small businesses of the world, if unemployment creeps up to the 10 percent mark or higher? High unemployment means low consumer demand. Which usually means small businesses end up going out of business, or at the very least, laying off more employees, who push the unemployment rate even higher. And so on. Low employment might mean it would be harder to find qualified employees, but it also means more customers with money burning a hole in their pockets. Which scenario, do you think, is better for society in general?

I have no problem with contrarian arguments. But a look back at the oeuvre of Gene Marks suggests that in his efforts to be routinely contrarian, he ends up coming off as, well, how can I be polite? What's the opposite of insightful?

Here's what set him off:

The decline and fall of David Brooks, by Andrew Leonard: America needs "a moral revival," declares David Brooks... We are drowning in a sea of debt, and this is because we have lost our moorings; we have abandoned our tradition of Calvinist restraint, self-denial and frugal responsibility. If we don't start living right, we run the risk of cultural failure, that time-honored historical pattern in which "affluence and luxury lead to decadence, corruption and decline."

My my my. I've seen some high horses in my day, but David Brooks is perched on a saddle so far aloft in the clouds of self-delusion that he can't even see the earth, much less reality. Let's examine his thesis more closely.

Americans ran up a lot of debt in the last few decades. There's no question about that. But one of the most striking developments of the last year has been how Americans have responded to the financial crisis at an individual level. We made a collective decision to start saving and stop spending. Is this because we woke up one morning last fall and suddenly became born-again Calvinists? No, it seems clear that we were responding rationally to economic incentives. The economy crashed, unemployment surged, home prices plummeted, and presto: We all started pinching pennies. Morality, insofar as expressed via our spending habits, is merely a reflection of the economy.

To his credit, Brooks acknowledges this point. But then he immediately dismisses it:

Over the past few months, those debt levels have begun to come down. But that doesn't mean we've re-established standards of personal restraint. We've simply shifted from private debt to public debt.

This, Brooks suggests, proves that "there clearly has been an erosion in the country's financial values." Elsewhere he suggests that our cultural decline began sometime around 1980.

Brooks displays a bizarre historical amnesia throughout his column. For example, he never even mentions the transition from the Roaring Twenties to the Great Depression. Maybe it's because the shift from decadence to thrift at that point was also obviously a response to economic incentives. Even worse, a moral revival didn't restore economic growth after the Crash -- government action and ultimately the fiscal stimulus provided by World War II did the trick.

But a far more pertinent point of reference comes much earlier. Has Brooks somehow forgotten that just nine years ago the U.S. operated under a balanced budget and enjoyed a budget surplus? The explosion of public debt since that point has very little to do with the moral failings of Americans, and everything to do with objective fact. George W. Bush cut taxes, but did not match those cuts with spending cuts. Instead, he ramped up spending dramatically, on two wars, healthcare, and finally, a huge bailout of Wall Street.

Bruce Bartlett has calculated that even without Obama stimulus-related spending increases, the current deficit for fiscal year 2009 would be about $1.3 trillion instead of $1.6 trillion. If you are a believer in Keynesian economics, you can make a pretty good case that Obama's additional spending is designed to get the economy growing again, so as to avoid even worse deficits in the future. Do nothing, and a shrinking economy means lower tax revenues and higher social spending. Morality has very little to do it -- the appropriate, responsible fiscal choice at this point is for government to spend, while the people save.

Obama would be in much better position to do what's appropriate, of course, if he hadn't been saddled with a trillion-dollar deficit when he walked in the door. But the responsibility for that does not belong with some widespread betrayal of America's founding puritan values. It belongs explicitly to the party in control over the last eight years.

Update: Paul Krugman:

Moral decay? Or deregulation?, by Paul Krugman: Andrew Leonard is unhappy with my colleague David Brooks for suggesting that rising debt in America reflects moral decay. Surprisingly, however, Leonard doesn’t make what I thought was the most compelling critique.

David points out, correctly, that something changed around 1980 — that consumers started spending a larger share of national income and that debt began increasing. Although he doesn’t point this out, this was also when the federal government first began running substantial deficits even in good years.

David would have you believe that what happened then was a decline in Calvinist virtue. But, um, didn’t something else happen around 1980? Can’t quite remember .. someone whose name begins with the letter “R”?

Yes, Reagan did it.


The turn to budget deficits was a direct result of the new, Irving-Kristol inspired political strategy of pushing tax cuts without worrying about the “accounting deficiencies of government.”

Meanwhile, the surge in household debt can largely be attributed to financial deregulation.

So what happened? Did we lose our economic morality? No, we were the victims of politics.


Perhaps the most interesting part of this offering is the three conservative commentators who don’t even agree with one another and the only one that makes sense is the sole progressive …weird huh?

Thanks for letting me inside your head,

Gegner

Tuesday, September 29, 2009

South of the Border

Greetings good citizen,

Really haven’t heard much about the coup in Honduras recently, there were a few threats by the deposed, democratically elected president to return to Honduras to serve out his term of office

In case you’re curious, we’re about to see how that’s working out.

Just in case you’ve forgotten what happened and who was involved here’s a little refresher of ‘what’s gone before’…

Launch a Military Coup, Hire a High-Power PR Firm and Represent Democracy!

Posted by Joshua Holland, AlterNet at 12:39 PM on September 28, 2009.

I notice the major papers are now referring to the perpetrators of the military coup in Honduras as the "de facto" government. Quite a benign frame.

Contrary to the prevailing narrative, right-wing elements in Honduras and the United States -- including, according to reports swirling around Latin America, bloody veteran hands from Reagan's dirty wars, like Otto Reich -- had been laying the groundwork for deposing President Manuel Zelaya for several years.

Roberto Micheletti's coup government has done a fine job spinning away the fact that this was the kind of military coup that has been anything but par-for-the-course in recent years in an overwhelmingly democratic Latin America. They've done it with savvy lobbying and PR. Historian Greg Grandin wrote about debating former Clinton confidant Lanny Davis, now a lobbyist representing the coup government, among others:

The Honduras coup occurred on June 28, when soldiers working on behalf of a the small group of business and political elites who now control the country, kidnapped democratically elected President Manuel Zelaya and sent him into exile.

Since then, the military-backed regime of Roberto Micheletti has argued to the world that it was acting constitutionally, even though nearly every country in Latin America, along with the European Union, isn't buying it.

Only in the U.S. is there a debate as to whether the Micheletti government is legal -- largely thanks to the lobbying efforts of Davis.

Not only is there debate in the U.S., it is surreal; consider right-wing lunatic Dana Rohrbacher's recent post on The Hill's blog arguing that through a right-wing military coup a "crisis was averted and the constitutional democracy in Honduras was preserved." [CG picked up on this and used it in one of his radio shows after Limbaugh jumped on that bandwagon!]

Expect much more of the same kind of nonsense in the immediate future:

The de facto government of Honduras that ousted President Manuel Zelaya has hired a well-known public relations firm to bolster its image in Washington.

According to Justice Department documents, the Honduran government signed Chlopak, Leonard, Schechter & Associates to a four-month contract worth more than $290,000. Filed on Sept. 18 with Justice by the public relations firm, the documents say the company will “advance the level of communication, awareness and media/policy maker attention about the political situation in Honduras.” [I guess one never knows when diplomacy alone won’t do…naturally, it’s pretty damn difficult to field diplomats when nobody recognizes the legitimacy of your government…]

The contract comes as the crisis in the Central American country has flared up again. Zelaya, who was exiled to Costa Rica by the Honduran military, has slipped back into the country to try to reclaim his position as president. He has taken shelter with family members in the Brazilian embassy in Tegucigalpa, the Honduran capital, threatened with arrest if he leaves its grounds.

And how's that "democracy" working out? Well ...

The de facto government shut down two broadcasters on Monday and prevented a demonstration in support of the deposed president, Manuel Zelaya, as sweeping restrictions on civil liberties took effect.

Masked police agents were perched from the windows of a television station, and soldiers formed a barricade around the headquarters of a radio station here after the government shut them down indefinitely.

The police closed off both sides of the street where several hundred demonstrators gathered Monday morning, effectively preventing them from starting their march. The protesters drifted away as it became clear that the march would not take place.

The other government measures, announced late Sunday, prohibit unauthorized public meetings and allow the police to arrest anyone deemed to be a threat.


Geez good citizen, what gives? Did Alternet suddenly turn into a subsidiary of Red State? Why do you suppose Alternet felt compelled to reveal that a Clinton crony is up to his neck in the ‘conservative coup’ in Honduras?

Could it be because the cost of remaining mum would only make things worse? You can bet your bottom dollar the RWNM would have a real party pointing out the ‘Clinton connection’ as well as any attempts to ‘cover it up’.

But what does this ‘prove’? It doesn’t prove anything but it sure as hell is mighty damning evidence that the Democratic Party has been, er, ‘compromised’ by the conservatives. Why the hell do you suppose Rush was calling for a Hillary vs. McCain ‘face off’ almost two years before the 2008 election and roughly a year before Hillary announced her intention to run…

Why did Rush make such a pairing using a (then) ‘freshman’ senator from a district she only recently adopted?

Is there a 2 + 2 here connecting the Obama administration (which is loaded with Clinton administration ‘throwbacks’, many who are personally responsible for the current financial meltdown) resulting in the abysmal performance to date?

‘Coincidence’ perhaps?

I don’t think so…

Thanks for letting me inside your head,

Gegner

On the edge

Greetings good citizen,

Mr. Market had a bang-up day…what you’re not seeing here is that the market highs were considerably higher before today’s closing bell…I’m sure we won’t have to look too hard to find a pundit that will brush off the end of the day drop as ‘profit taking’…

So, does everybody have their ‘beenie copter’ ready to blast off when the market breaks back into ‘five digit’ territory? (You can bet some of the freaks on the trading desks are already counting their holiday bonuses…even though there’s still another three months of the year left to go…during which time the markets ‘could’ turn around and hand it all back.

I mean, doesn’t it seem strange that the stock market is going up for no apparent reason? Even though the ‘rally’ is five months old, the ‘transports’ don’t ‘confirm’ (verify) the market’s performance…in fact, what was so ‘wonderful’ about today that the Dow tacked on 150 points? (You can be sure most of it turned up in the financials…with the banks buying their own stocks!)

Like the plot of every good novel, we need only ask Who profits?

Creeping Up to 5 Digits Yet Again

By JACK HEALY
Published: September 28, 2009

It is only a number — the stock market equivalent of an appliance chain’s millionth customer, or the gazillionth hamburger served at McDonald’s.

The electronic board of the New York Stock Exchange on March 29, 1999, as the Dow passed 10,000 for the first time.

Still, the Dow, which closed up 124.17 points, at 9,789.36, on Monday, is within reach of 10,000. Who would have thought? [Perhaps more succinctly we should ask ‘who believes?’…and the answer, quite naturally is, who profits?]

At the depths of Wall Street’s crisis, when traders were despairing and shares of Citigroup were trading for just over a dollar, Dow 5,000 seemed a likelier prospect than this. [Don’t look now but the Dow dipping below 5,000 isn’t out of the question, not by a long shot!]

But now, one of the most-watched measures of the financial world is on the cusp of jumping back to five-digit territory. [Before the main indexes slid to 6,000…they first bounced off 14,000…think about it.]

That does not mean the economy’s problems are over, or that 401(k)’s are going to be made whole anytime soon. In fact, this milestone could even stall the rally if enough investors use it as an opportunity to cash in their gains, analysts say.

But a big round number is often seen as a way of assessing the market’s health, and whether it has enough juice to climb much higher. [Ironically, it is also a way to suck in a bunch of idiots who have no idea what they’re looking at, remember, the transports are not ‘confirming’ this rally.]

“Will 10,000 make a difference to some people?” said Stuart Freeman, senior equity strategist at Wells Fargo Advisors. “It’s psychological, but if enough people act on it, it’s meaningful. The higher a market goes, the more that those on the sideline sit there and are concerned they’re missing something. It takes a while for their fear to wear off.” Indeed, investors who pulled out of the market as Wall Street crumbled would have missed a Dow that has rebounded more than 3,000 points in seven months. The Nasdaq index is up 35 percent since the start of the year, and the Standard & Poor’s 500-stock index is up more than 17 percent.[How strange is it to point out that people who miss out on a ‘sucker’s rally’ will end up ahead of the game?]

Some of the recession’s biggest winners are again flying high, with stocks like Goldman Sachs closing at $182.50 a share. JPMorgan Chase reported nearly $3 billion in quarterly profits this summer. Shares of Apple are flirting with record highs. [Even though sales are off…high prices on ‘solid’ stocks only speaks of a dearth of ‘sound’ investments.]

Much of the run-up has been fueled by signs that some corners of Wall Street, helped by Washington’s taxpayer lifelines, have returned to functioning almost normally. Corporate mergers and public stock offerings appear to have rebounded in recent weeks, pulling the market higher. Short-term loans are flowing. Companies with better credit can again raise money without paying huge risk premiums. [More ‘mis-direction’ as we’re talking a hand-full of companies at best.]

Yet the Dow at 10,000 could also herald a pause in the white-knuckle rally. [Curious term, no?]

Analysts are divided about whether the stock market is overpriced or underpriced now, but stocks have gotten much more expensive since the main indexes hit their lowest points in a decade in early March. A share of Bank of America, which was selling for a little more than $3 in March, now costs $17. Shares of the American International Group, the corporate image of the financial crisis, have surged sixfold, although the price is still a small fraction of what it was before the government rescued the company. [Worse, most say AIG will never be able to pay back the government ‘loans’ once the choice parts of the company are sold off to competitors at ‘favorable prices’.]

And even if the recession is technically nearing an end, 15 million people are still unemployed, and stagnant incomes and higher rates of personal saving could reduce corporate revenue growth to a trickle for years to come. [So why is the Dow rallying?]

Then there are the potential new waves of mortgage foreclosures; fresh losses in commercial real estate; consumer defaults on credit cards; and the possibility of another bubble in oil prices, all of which could prevent markets from enjoying anything like exuberance for a while.

“The bottom line reality is, it’s still an economy that’s in the midst of a major change,” said Bill O’Grady, chief market strategist at Confluence Investment Management. “The real debate that underlies the Dow 10,000 story is the raging debate about what is going to be the form of the recovery.”

The enthusiasm over that round figure is now a decade-long phenomenon. Consider this: President Bill Clinton was in office when the Dow Jones industrial average first closed above 10,000 in March 1999. It retreated in the years after the dot-com bubble deflated, then retook 10,000 in late 2003 and peaked at 14,000 in October 2007. We all know the cataclysm that followed. [The market wasn’t ‘realistically’ priced then…nor is it ‘realistically priced’ now.]

So Dow 10,000 does not mean that the market is finally edging ahead; it is simply catching up to where it was a decade ago. “It’s been a bad 10 years, a really bad 10 years,” said David Bianco, chief United States equity strategist at Bank of America/Merrill Lynch. [Um Bobo, we’re only 2 year away from when the Dow hit 14,000, what ’10 years’ are you talking about? Or would it be more correct to ask if Earth is the planet you wake up on ‘every day’?]

The constant march of inflation also dilutes the meaning of 10,000. Prices rose an average of about 2.8 percent each year in the last decade, meaning the Dow would have to reach about 13,200 in today’s numbers to equal its value then. If this limbo seems dreary, imagine spending the next decade talking about Dow 10,000. [While ‘non-existent’ inflation keeps pushing the ‘true value’ higher…]

The Dow first closed above 100 points in 1906, when Theodore Roosevelt was president and American Car and Foundry and National Lead were members of the index. And it did not go much higher from there. It was still trading close to 100 as the 1920s began, then spiked at the end of the Roaring Twenties. But it crashed during the Depression, and was once again hovering around 100 as the United States entered World War II.

In 1966, the Dow came within 20 points of hitting 1,000, then fell off sharply. The stock index kept bumping its head against that threshold for more than 15 years as the American economy endured high inflation, oil embargoes, price controls and regular swings in the stock markets.

Not until 1982 did the Dow move decisively above 1,000. [And we can only wonder why…]

“You can spend years around a particular milestone,” said Tobias Levkovich, chief United States equity strategist at Citigroup. “I’m not talking about a year or two. I’m talking about way more than 10. They’re not short-term phenomena.”

The New York Times ran a front-page article about the Dow’s first trip across the 10,000 marker in 1999. This article is being written in September 2009. Investors should hope there will not be a similar article in 2019.


There are several disturbing aspects of the Dow hovering in ‘striking range’ of the 10,000 mark again, prime among them being the transports…the transports are not ‘confirming’ this alleged ‘spike’ in economic activity.

Letting these numbers climb unchallenged only enriches the shareowners…at the expense of the workers…add to that the extreme high likely hood that it is taxpayer ‘bailout funds’ behind the rally and we really have a beautiful case of privatized profits and socialized losses…

But like they say in the intro…it’s only a number…

Thanks for letting me inside your head,

Gegner

Monday, September 28, 2009

Slim picken's

Greetings good citizen,

There have been multiple reports that the labor markets are in the worst shape they’ve been in for a very long time. Some compare current conditions to those in the eighties and others compare them (statistically) to the Thirties.

Yet what we’re experiencing today has little in common with the events of eighty years ago. What we’re seeing today is the events of the mid-eighties, magnified considerably.

Sadly, some of you were born in the mid-eighties, so you only know what you’ve been told of those times, as a boomer, I lived those days…the so-called ‘Reagan Revolution’

They were dark days indeed, especially in manufacturing…

So we arrive at tonight’s offering where ‘new records’ are being set…


U.S. Job Seekers Exceed Openings by Record Ratio
By PETER S. GOODMAN
Published: September 26, 2009

Despite signs that the economy has resumed growing, unemployed Americans now confront a job market that is bleaker than ever in the current recession, and employment prospects are still getting worse.


Job seekers now outnumber openings six to one, the worst ratio since the government began tracking open positions in 2000. According to the Labor Department’s latest numbers, from July, only 2.4 million full-time permanent jobs were open, with 14.5 million people officially unemployed.

And even though the pace of layoffs is slowing, many companies remain anxious about growth prospects in the months ahead, making them reluctant to add to their payrolls.

“There’s too much uncertainty out there,” said Thomas A. Kochan, a labor economist at M.I.T.’s Sloan School of Management. “There’s not going to be an upsurge in job openings for quite a while, not until employers feel confident the economy is really growing.” [Bad news, good citizen; the same people leading the frenzy of ‘insider selling’ are the same people that are in charge of ‘adding capacity’…]

The dearth of jobs reflects the caution of many American businesses when no one knows what will emerge to propel the economy. With unemployment at 9.7 percent nationwide, the shortage of paychecks is both a cause and an effect of weak hiring.

In Milwaukee, Debbie Kransky has been without work since February, when she was laid off from a medical billing position — her second job loss in two years. She has exhausted her unemployment benefits, because her last job lasted for only a month.

Indeed, in a perverse quirk of the unemployment system, she would have qualified for continued benefits had she stayed jobless the whole two years, rather than taking a new position this year. But since her latest unemployment claim stemmed from a job that lasted mere weeks, she recently drew her final check of $340.

Ms. Kransky, 51, has run through her life savings of roughly $10,000. Her job search has garnered little besides anxiety.

“I’ve worked my entire life,” said Ms. Kransky, who lives alone in a one-bedroom apartment. “I’ve got October rent. After that, I don’t know. I’ve never lived month to month my entire life. I’m just so scared, I can’t even put it into words.”

Last week, Ms. Kransky was invited to an interview for a clerical job with a health insurance company. She drove her Jeep truck downtown and waited in the lobby of an office building for nearly an hour, but no one showed. Despondent, she drove home, down $10 in gasoline.

For years, the economy has been powered by consumers, who borrowed exuberantly against real estate and tapped burgeoning stock portfolios to spend in excess of their incomes. Those sources of easy money have mostly dried up. Consumption is now tempered by saving; optimism has been eclipsed by worry.

Meanwhile, some businesses are in a holding pattern as they await the financial consequences of the health care reforms being debated in Washington. [Nice! Always good to see the bogeyman held out (gratuitously) for all to see when business ‘unfriendly’ legislation is pending in congress…]

Even after companies regain an inclination to expand, they will probably not hire aggressively anytime soon. Experts say that so many businesses have pared back working hours for people on their payrolls, while eliminating temporary workers, that many can increase output simply by increasing the workload on existing employees. [A popular ploy that’s been around since…why by gum, since the darned mid-eighties! How about that?]

“They have tons of room to increase work without hiring a single person,” said Heidi Shierholz, an economist at the Economic Policy Institute Economist. “For people who are out of work, we do not see signs of light at the end of the tunnel.”

Even typically hard-charging companies are showing caution. [Er, like who? (outside the military)]

During the technology bubble of the late 1990s and again this decade, Cisco Systems — which makes Internet equipment — expanded rapidly. As the sense takes hold that the recession has passed, Cisco is again envisioning double-digit rates of sales growth, with plans to move aggressively into new markets, like the business of operating large scale computer data servers.

Yet even as Cisco pursues such designs, the company’s chief executive, John T. Chambers, said in an interview Friday that he anticipated “slow hiring,” given concerns about the vigor of growth ahead. “We’ll be doing it selectively,” he said. [Um, what does that statement tell you good citizen? It tells me some folks are already preparing for the ‘new normal’ and that shit ain’t gonna fly, not this time.]

Two recent surveys of newspaper help-wanted advertisements and of employers’ inclinations to add workers were at their lowest levels on record, noted Andrew Tilton, a Goldman Sachs economist.

Job placement companies say their customers are not yet willing to hire large numbers of temporary workers, usually a precursor to hiring full-timers.

“It’s going to take quite some time before we see robust job growth,” said Tig Gilliam, chief executive of Adecco North America, a major job placement and staffing company.

During the last recession, in 2001, the number of jobless people reached little more than double the number of full-time job openings, according to the Labor Department data. By the beginning of this year, job seekers outnumbered jobs four-to-one, with the ratio growing ever more lopsided in recent months. [At last report, the ratio of job seekers to open positions is more than 6 to 1…]

Though layoffs have been both severe and prominent, the greatest source of distress is a predilection against hiring by many American businesses. From the beginning of the recession in December 2007 through July of this year, job openings declined 45 percent in the West and the South, 36 percent in the Midwest and 23 percent in the Northeast. [In the meantime, off-shoring proceeds apace.]

Shrinking job opportunities have assailed virtually every industry this year. Since the end of 2008, job openings have diminished 47 percent in manufacturing, 37 percent in construction and 22 percent in retail. Even in education and health services — faster-growing areas in which many unemployed people have trained for new careers — job openings have dropped 21 percent this year. Despite the passage of a stimulus spending package aimed at shoring up state and local coffers, government job openings have diminished 17 percent this year.

In the suburbs of Chicago, Vicki Redican, 52, has been unemployed for almost two years, since she lost her $75,000-a-year job as a sales and marketing manager at a plastics company. College-educated, Ms. Redican first sought another management job. More recently, she has tried and failed to land a cashier’s position at a local grocery store, and a barista slot at a Starbucks coffee shop.

Substitute teaching assignments once helped her pay the bills. “Now, there are so many people substitute teaching that I can no longer get assignments,” she said.

“I’ve learned that I can’t look to tomorrow,” she said. “Every day, I try to do the best I can. I say to myself, ‘I don’t control this process.’ That’s the only way you can look at it. Otherwise, you’d have to go up on the roof and crack your head open.”


Hell of a time to be unemployed, I’ll find out tomorrow if I’ve got a job to return to…

I doubt it.

I’ve run a number of similar articles recently and a common thread is emerging…look at the age of the people trying to find work but can’t…they’re all in their late forties to early fifties.

Nobody wants ‘em, they’re too old to ‘keep up’ (although long years of vigorous beatings have taught us the values of ‘punctuality, good attendance and reliability’.)

Yes, I’m a member of the ‘Over the hill gang’ too, and if I’m not mistaken, this will make my 9th er, ‘job change’ since 9/11.

It was a while ago now that they reported the number of ‘help wanted’ ads listed in newspapers had hit an all time low…I haven’t heard anything on this topic since the last election, and I doubt that’s a coincidence…

Life sucks and then you die…

Thanks for letting me inside your head,

Gegner

Sunday, September 27, 2009

Sense & sensibility

Greetings good citizen,

What is the sound of one hand clapping? (Depending on how you do it, it is pretty much the same sound two hands make, only softer…)

If such questions are even intended to have ‘practical’ answers…

Which, naturally, depends on who is doing the asking…

I’m going ‘meta’ tonight partly due to my recent ‘close encounter’ and partly due to my renewed sense of skepticism that ‘recovery’ has anything to do with things returning to ‘normal’.

I could ‘concede’ the economy ‘recovering’ as long as the pundits made it abundantly clear that ‘recovery’ had nothing to do with things returning to ‘normal’.

And even that isn’t enough…because ‘not losing’ doesn’t count as ‘winning’ no matter how you slice it. You can’t shed ten million jobs and declare victory just because the ‘bleeding’ stopped! Those ten million workers didn’t just dry up and blow away, never to be seen or heard from again…that’s not how it works, in fact its never worked that way.

Perhaps even more perplexing is how the powerful can even delude themselves into thinking this planet can sustain the ‘western lifestyle’ on a planet-wide basis…because that’s what they’re trying to do!

The ‘middle classes’ of emerging nations are buying the ‘dream’ as sold to them by the world’s financial markets…the house, the cars and the private schools for the kiddies…don’t forget the vacations and that other ‘must have’, the vacation home!

It was pathetic enough when the Western world started following the ‘greed track’, financed by ever increasing lines of credit, but now we have spread the same disease to the developing world! (Because TV has given viewers the false impression that the people of the developed world are like the people they see in sitcoms, rather than the sad truth.) The people in the developed world are a lot more like the folks portrayed on cop shows than the ones you see in sitcoms.

Which leads us back to the issue of who are these madmen and what the hell are they thinking? On one hand we know they THINK they are going to follow their money to the newly created ‘enclaves’ of wealth within the emerging global economies.

But that’s not going to work out real well if an exploding global population is sucking up resources faster than they can be harvested…and as the numbers tell us, the emerging economies have major issues with keeping their populations in check…

It’s this sort of ‘short-sightedness’ that’s becoming a bit difficult to swallow no matter who dishes it out. Oh, and the ‘conservative’ morons are precisely the ones who are ignoring the sustainability issue. They firmly (albeit falsely) believe there’s plenty of everything to go around.

And they’re right! Just as long as only those who deserve to enjoy the benefits of civil society are the ONLY ones those benefits are bestowed upon…but even that number is becoming ‘too large’…but we have digressed to that ‘one hand clapping’ question we started with.

And you’ll only succeed in driving yourself crazy if you spend too much time pondering question that don’t have good answers…like the ones the pundits keep spewing!

Thanks for letting me inside your head,

Gegner

Friday, September 25, 2009

Swapping lies...

Greetings good citizen,

While yesterday’s topic touched upon the ‘surplus population’ (which is indeed the physical manifestation of too many workers and not enough customers, locked in place by a ‘rigidly defined’ workday/week.)

Yes good citizen, no one wants to admit it but our current crisis (as well as the one that is bubbling to the surface underneath the so-called ‘financial crisis) are directly related to ‘out-moded’ notions of a ‘fair day’s wages for a fair day’s work.’

Many of you have observed that the ‘cheaper there’ not only pays low wages but they also work long hours, with 60 hours being roughly the ‘median’ for most ‘third world hell-holes’. Oh, did I mention that if they pay overtime at all, it’s paid on the hours worked AFTER 60…and all things being even, those workers consider themselves ‘lucky’ to get that ‘premium pay’. Which isn’t necessarily ‘time and a half’ either, sometimes it’s only 10%…there aren’t any ‘laws’, the employers makes this sort of stuff up as they go along!

Which brings us to yet another important and quite pertinent point, if you don’t have the power to ‘resist’ unreasonable demands…then what constitutes ‘reasonable’ gets decided for you, usually by someone who is not themselves subject to the same ‘standards of reasonableness’.

Ironically, tonight’s offering is…to me, a manifestation of the above described predicament, leaking into the public arena…

I’ve read more than one article today that wondered aloud why the Dow was hovering on the edge of 10,000 point mark when there is no visible signs of corresponding economic activity to support that number.

Could the ‘answer’ to that open question be as disturbing ‘because they can?’


Stocks Drop on Tepid Economic News

By JACK HEALY
Published: September 25, 2009

Weaker readings on the housing market and manufacturing orders pulled Wall Street lower for another day on Friday, leaving stocks at a loss for the week.

Investors who previously cheered indicators of an economic rebound got a more measured view this week: sales of previously owned homes fell in August after four months of gains, and sales of new homes edged up less than expectations. In addition, new orders for aircraft, computers and other durable goods slipped, defying expectations for another month of gains. [Which begs the question as to whether or not these ‘offending’ sectors will be ‘punished’?]

Taken together, the figures suggested that Wall Street may have bet too heavily that a swift economic rebound would continue to lift stocks.

The Dow Jones industrial average fell 42.25 points, or 0.4 percent, to close at 9,665.19. The broader Standard & Poor’s 500-stock index lost 6.40 points, or 0.6 percent, to 1,044.38.

The Nasdaq composite index, which has climbed more than 30 percent since the start of the year, dropped 16.69 points, or 0.6 percent, to 2,090.92.

The Nasdaq was pulled down by selling in Research In Motion, the maker of the BlackBerry, and other technology companies. Shares of Research In Motion, which has faced stiff competition from Apple’s iPhone and the Palm Pre, fell 17 percent after its sales forecast missed expectations.

The Dow fell more than 150 points this week, as some investors speculated that stocks had raced too far ahead of an economic recovery that was still just beginning. [One could guess this accounts for the recovery’s current ‘transparency’] With unemployment nearing 10 percent and consumers still restrained, analysts have warned that corporate profits could show anemic growth in the quarters ahead. [Um, by this point in the game the ‘general public’ is already well aware that those ‘paid schills’ announcing the ‘end of the recession’ are actually ‘fuckin’ liars’ that nobody in their right mind pays any attention to.]

On Friday, investors were playing defensively, buying shares of companies that tend to be more insulated during recessions and walking away from those that rise and fall with economic cycles. Shares of health care providers, basic consumer products and utilities were slightly higher, while industrial producers, retailers and financial shares slipped into the red.

Investors continued to push the market for Treasury debt higher, choosing a conservative investment that would act as a safe harbor if the stock market took a turn or the economy continued to struggle. Yields on the benchmark 10-year note fell to 3.32 percent, from 3.38 percent on Thursday.


It’s not that difficult to pick the ‘inconsistencies’ out of the above article; which is why I’d like to ask you to join me as we shift mental gears, exchanging our economics ‘beanies’ for out ‘political’ ones…

All set? Good.

Like all good conversations, we need to start at the beginning.

Why do you suppose the media, er, ‘exaggerates’ so much? Could the answer be (again, disturbingly) that ‘everything is political’?

Every one of us is guilty of harboring the ‘there ought to be a law’ mindset, depending on the topic.

Let’s use ‘bankers’ as an example. How many people do you suppose would support the notion that the management team of every Wall Street firm should be fired, wholesale?

Understand that the idea of having these same people ‘drawn and quartered’ (a rather barbaric act) enjoys a disturbing degree of popularity…if only to scare the rest of the banking community straight…

Well, getting back to conversations we’re not having (because the media has its head in the sand,) what do you find more disturbing? The fact that nobody connected with collapsing the global financial network has faced prosecution…or are you more disturbed by the fact nobody is even under investigation for this crime?

One needs only divorce oneself from today’s ‘media circus’ for a few moments to have dozens of topics related to recent (actually, no longer very recent) scandals that have never been resolved, much less investigated.

This phenomenon points immediately to the most disturbing question of all…what the hell is wrong with the Justice Department? (Honestly, the whole damn legal system needs a good going over. Maybe give it a good douche while we’re at it…)

Then maybe we’ll be able to put a stop to the media acting like a ‘pimp’ for criminal corporations!

It may sound like ‘dreaming’ but if we don’t we face the very real probability of extinction by our own hand…

Thanks for letting me inside your head,

Gegner

Thursday, September 24, 2009

When the world doesn't need you anymore...

Greetings good citizen,

I confess to a perverse attraction to articles that support my main arguments, it doesn’t make me ‘right’ by any stretch of the imagination, it merely shows I’m not the only one making a given point.

Um, in a ‘perfect world’, one would never have to take exception to statements made in support of one’s arguments…but I think we all agree that this is a far from ‘perfect’ world. So it goes that I harbor certain quibbles with some of the viewpoints expressed here.

Onward to tonight’s offering


The Real Problem With The Economy Is That It Doesn't Need You Anymore

Roughly speaking the world's economy has always worked as a giant pass-along-game between the planet’s citizens. Person A needed stuff from person B and person B needed stuff from person C and person C needed stuff from person A. So everyone needed everybody. It has been a kind of giant circle of needs.

But as a smaller and smaller number of people are needed to make the basic things that people need for survival, from food to energy, to clothing and housing, the less likely it is that some people will be needed at all. [My quibble here is more of a grammar issue, it would suffice to point out that as technology advances, it takes fewer workers to achieve the same results, totally eliminating the ‘likeliness’ that some people won’t be needed at all…]

When you read in the press the oft-quoted concept that “those jobs aren’t coming back” this “reduction of need” is what underlies all of it. Technology has reduced the need for labor. And the labor that *is* needed can’t be done in more developed nations because there are people elsewhere who will happily provide that labor less expensively. [More grammar problems here as the term ‘can’t’ is almost like using ‘never’…there is nothing that prohibits any kind of work from being performed anywhere it is necessary to perform it; except for the relatively minor issue of ‘profitability’. Which in reality boils down to ‘currency manipulation’…which is criminal all by itself, but what they hey, it’s a system run by and for criminals, it doesn’t have to ‘make sense’ too!]

In the long term, technology is almost certainly the solution to the problem.[Not so fast, Paleface!] When we create devices that individuals will be able to own that will be able to produce everything that we need, the solution will be at hand. [Just try to wrap your head around how much one of these suckers would be worth…does anyone seriously harbor the foolish notion that such a piece of equipment would sell for the ‘cost to produce it’?] This is *not* science fiction. We are starting to see that happen with energy with things like rooftop solar panels and less expensive wind turbines. We are nowhere near where we need to be, but it is obvious that eventually everyone will be able to produce his or her own energy. [um, not if you don’t ‘own’ access to either daylight or wind…it’s a mighty foolish assumption to think anyone would let you ‘park’ your power generating equipment on ‘their’ property…isn’t it?]

The same will be true for clothing, where personal devices will be able to make our clothing in our homes on demand. Food will be commoditized in a similar way, making it possible to have the basic necessities of life with a few low cost source materials. [were it only so simple, and trust me, it not…nor will it ever be!]

The problem is that we are in this awful in-between phase of our planets productivity curve. Technology has vastly reduced the number of workers and resources that are required to make what the population planet needs. This means that a small number of people, the people in control of the creation of goods, get the benefit of the increased productivity. When we get to the end of this curve and everyone can, in essence, be their own manufacturer, things will be good again. But until we can ride this curve to its natural stopping point, there will be much suffering, as the jobs that technology kills are not replaced. [I guess it’s one thing to ‘hipshoot’ and ‘dream aloud’ about a hypothetical ‘better world’ but it never ceases to amaze me how many people ‘assume’ the glue that holds civilization together is somehow ‘divorced’ from the economy’s ability to provide the whole population with sustenance…never ceases to amaze…]

The political implications of this are staggering. Clearly, more and more jobs will move from more developed nations to countries like China, and it is difficult to see how, as this process continues, the United States retains its leadership position. In fact, it seems entirely possible that the U.S. will exchange places with less well-developed nations. Yes, there will certainly be fabulously wealthy people in the US, because many US companies will own these highly productive businesses. Unfortunately, that wealth will be held by a very small number of people. And their operations will need to employ very few people. [Isn’t native US ‘exceptionalism’ grand? There is absolutely no evidence (save our totally broken and corrupt legal system) that says the US or anyone from here will, by their exceptional abilities, bestowed upon them simply because they are US citizens, will own even a tiny fraction of the world’s future productive capacity.]

In short you will have a few very wealthy folks [living in a state of constant fear], and a much [Eh, more like ‘somewhat’] larger majority that will just not be needed for the most important things that the country needs to do. [In a world of diminishing resources, the urge to ‘right-size’ will be too powerful to resist…that said, it will take more than money to survive in a ‘rarified’ future.]

I don’t know what the short-term solution to this problem is. In fact, I fear there may not be one. But it is clear that what I am describing has already started and there is little we can do to stop it. GDP will increase as demand for labor **decreases**! How is that for the ultimate economist's oxymoron?

Hank Williams is a tech entrepreneur. He writes at Why Does Everything Suck?, where this post originally appeared.


Tonight’s offering was pilfered from ‘Some Assembly Required’…and this article, as it states here, was lifted from it’s original source (and the original thief didn’t provide a link to that source!) Which isn’t a particularly grievous loss ‘cuz our boy Hank is another misguided soul that refuses to give up on long dead capitalism.

This I guess is the part that baffles me to no end, the fact that nobody in their right mind today would ‘give away’ a piece of equipment that could convert ‘useless’ matter into valuable resources…so what makes these people think it’s going to happen in the future?

This is like expecting the people of the future to be ‘brilliant’ technically but to also become ‘economically retarded’ in the process…it’s kind of a ‘contradiction’, ya know?

Um, I also harbor serious misgivings about both the ‘safety’ as well as the ‘effectiveness’ of these new, er, ‘labor-saving’ devices. I sure as hell wouldn’t volunteer to ‘beta test’ these monstrosities. A little dust in the settings could prove disastrous…if not fatal.

So the ‘theme’ is correct anyway, what the hell do you do in a world that no longer requires your services?

Thanks for letting me inside your head,

Gegner

Wednesday, September 23, 2009

Lies

Greetings good citizen,

All’s well that end’s well, got her done and now I’m on the road to ‘recovery’ (fortunately for me, I will recover, unlike the ‘real economy’, which is, coincidentally, the topic of tonight’s offering

In what might best be described as, er, ‘odd’ the markets ‘took heart’ that the Fed is going to keep rates low, even though the economy is ‘likely in recovery’…

Which leaves us where, precisely? Is the economy ‘recovering’ or isn’t it?

While our man Ben Ber says it’s all over, once again his ‘actions’ belie his utterances.

Fed Sees Recovery but Holds Steady on Rates
By EDMUND L. ANDREWS
Published: September 23, 2009

WASHINGTON — The Federal Reserve acknowledged Wednesday that an economic recovery was under way, but signaled that it was still much too early to start raising interest rates.

The Federal Reserve decided to hold interest rates at close to zero percent, likely through 2009. The Fed's Open Market Committee made its decision at its headquarters in Washington, above. [Um, gee, what do you suppose is the real problem here? The only ‘bright spots’ (a.k.a. ‘green shoots’) have been the direct result of government stimulus money. Could cutting that money off cold really ‘crush’ the non-existent nascent recovery?]

In a statement following a two-day meeting by the Fed’s policy makers, the central bank repeated that it would keep its benchmark overnight interest rate at virtually zero for “an extended period.” That almost certainly means until at least some time in 2010. [Isn’t it a friggin’ shame you and I can’t take advantage of the Fed’s low interest rates (You need to be a criminal to do that!)]

Policy makers also announced that they would stretch out the Fed’s program to buy up almost $1.5 trillion worth of mortgage-related securities through the end of March. That program is aimed at keeping mortgage rates low and propping up the housing market. [Totally unsurprisingly, the government is the ONLY buyer of ‘securitized mortgages’. A huge profit center for the banksters, which is why it’s still going on.]

“Economic activity has picked up following its severe downturn,” the Fed said in its statement. It said that financial markets had “improved further,” that the housing market was rebounding and that household spending “seems to be stabilizing.” [Sadly, the Fed admits to being unable of pointing to a single genuine incident of this alleged ‘improvement’…]

But the Fed also gave itself ample room to keep interest rates low, saying that inflation would remain “subdued for some time.” [Just like their wild claims that the housing crisis was ‘contained’ and wouldn’t ‘bleed into’ the large economy…that sure worked out well!

The Fed’s chairman, Ben S. Bernanke, already said on Sept. 15 that the recession in the United States had ended and that a fragile recovery had begun. [Sadly, this was also a ‘wild butt’ assertion he has, stock market aside, absolutely zero proof of…]

But the Fed’s statement on Wednesday suggests that policy makers have become slightly more optimistic since their meeting in August. At the same time, policy makers continued to caution that the recovery would be slow and that unemployment would continue to rise and would only begin to edge down some time in 2010. [There is no such thing as a ‘jobless recovery’, it’s impossible!]

The unemployment rate was 9.7 percent in September, its highest level since the early 1980’s, and many analysts believe it will ultimately climb above 10 percent and remain well above its normal levels for several years. [The ‘genuine’ unemployment number is nearly 50% but that figure is ‘politically unacceptable’ so they lie about unemployment instead!]

Wall Street was encouraged by the Fed’s statement, and prices of stocks and bonds rose in its immediate wake on Wednesday afternoon.[ Again, one has to wonder what’s wrong with this picture? If the economy is ‘really’ recovering, aren’t investors afraid that the sudden burst of production is going to spur higher prices, which will in turn fuel demands for higher wages, which need to be kept in check with higher interest rates? How is this ‘good news’ again?]

Having helped pull the United States out of its worst economic crisis since the 1930s, Fed officials are now grappling with when and how to reverse the gigantic taxpayer funded financial rescue operations that it put in place over the last year.

The central bank, using its power to create money at will, has propped up credit markets and financial institutions with a maze of emergency lending programs and huge interventions in financial markets. On top of its program to buy more than $1 trillion worth of mortgage-backed securities, it has also completed the purchase of $300 billion in Treasury bonds.

As a result of those efforts, the central bank’s balance sheet has more than doubled in size, to about $2 trillion, since the fall of 2008.[And we all know who was president in the fall of 2008…don’t we?]

The Fed already announced that it would end its Treasury purchases in October. But policy makers have been debating how quickly to phase out the mortgage program. More hawkish members of the Federal Open Market Committee, the Fed’s policy-setting body, have worried that the program was displacing private investors in the mortgage market and feeding inflationary pressures. [When ‘private lenders’ return to the mortgage market, houses will remain ‘unaffordable’, not due to price but because of interest rates…only an idiot will buy a house once this is through.]

But Mr. Bernanke and many other policy makers have repeatedly warned that the economic recovery is fragile and that it would be a mistake to start tightening monetary policy quickly. On that issue, the Fed is roughly in sync with the European Central Bank, the Bank of England and other major central banks around the world.[Isn’t ‘collusion’ a wonderful thing? It sure is if you’re a bankster!]

The Fed’s policy makers were unanimous in Wednesday’s decision on monetary policy.

Fed officials say they are under no pressure to tighten monetary policy, because inflation remains extremely low. With unemployment approaching 10 percent, and underemployment pushing the true jobless rate above 16 percent, Fed officials expect wage pressures to remain very low for quite some time. [What these shitheads aren’t saying is the also expect defaults to remain ‘elevated’ for the foreseeable future as well…]

Largely because of the fall in oil prices earlier this year, the government’s Consumer Price Index has actually edged down over the last 12 months. The Fed’s preferred measure of inflation, which excludes the volatile prices of food and energy, has declined to an annual rate of 1.8 percent. Fed officials expect that rate to decline more over the next year, possibly below 1 percent. [Isn’t that fucking ‘amazing’ good citizen…CPI inflation ‘excludes’ both food and fuel when they are going up but ‘capture’ these items when they fall! It’s a fuckin’ miracle I tell ya!]

Ian Shepherdson, a forecaster at High Frequency Economics, said the private credit markets were still so weak that the Fed might cause problems if it stopped its bond-buying spree. [Weirdly, they can’t keep it up forever either…so something’s gotta give…]

Mr. Shepherdson noted that one key measure of the money supply, known as M-2, had actually been actually been edging down despite the Fed’s huge purchase programs. Because the Fed has been creating money to pay for its purchases, its efforts should cause the money supply to increase. The declines in M-2, he said, indicate that private credit is falling faster than the Fed’s lending has been increasing. [Show of hands now, how many of you fools think that’s a ‘good thing’?]

“If the Fed was to stop buying assets, M-2 would drop sharply because private credit has been falling,” Mr. Shepherdson said. “I just wonder whether they have the stomach for that kind of contraction.”


Bizarrely, it ain’t the rich that will find themselves crushed by the ‘credit contraction’, their money is ‘insulated’ from the ‘source’. The ‘source’ will take the hit and fold up like a wet cardboard box…millions more workers will hit the streets and ‘pandemonium’ will reign!

This certainly won’t make a ‘pretty picture’…but it is what it is.

They’re trying to do a ‘controlled burn’…it will be interesting to see if they can pull it off.

Naturally, the crucial ‘center’ continues to hold, the public suspects nothing, although little announcements like this one here threaten to pop that bubble.

Thanks for letting me inside your head,

Gegner

Monday, September 21, 2009

Naysayer...

Greetings good citizen,

Our language is full of ‘truisms’ and tomorrow we put ‘third time’s the charm’ to the test. In what might be considered a ‘bad omen’ we’ve already lost an hour from the original (quoted) start time.

Sadly good citizen, it’s not over until its over…and it isn’t ever going to be over if we can’t get to it to do it! Yes, I’m developing a powerful paranoia about these ‘end of the day’ appointments (especially when even the doctor agreed we stood a better chance with an AM appointment.)

Either this goes off tomorrow or I’m going to fire these bums and try my luck at Lahey!

I’m pretty sure my HMO will be sympathetic, the person handling my case was amazed when I told her this morning we encountered another delay…but what are you gonna do?

It’s a bit ironic that my personal tale is being reflected by the alleged ‘economic recovery’.

“Sure, sure, everything’s going to be fine, just be patient…”

[Hat tip: The Automatic Earth]


Nobel winner Joseph Stiglitz predicts recession's end: not now, but 2012
Sam Gustin
Sep 17th 2009

Did you hear? The recession is over! Or at least it will be in the foreseeable future! And several of our leading economic sages have said so, so that makes it true. Or does it? Not when there's a prominent naysayer like Joseph Stiglitz. The Nobel-winning economist, a former head of the World Bank and now a professor at Columbia University, has a blunt -- if characteristically bearish -- warning of more economic turbulence ahead.

Stiglitz's outlook is anything but rosy. Americans must prepare for the recession to continue until 2012 -- practically, if not technically -- he said this week in an interview with DailyFinance. Stiglitz blasts the use of complex derivatives, which he says go against "the social good," and he reserves special contempt for Goldman Sachs and the $13 billion injection it received from the U.S. as part of AIG's counter-party bailout last year. [Neither of which have anything to do directly with ‘economic recovery’, indirectly, both speak volumes about how far there is to go before economic recovery is even possible…]

Just after returning to New York from Japan, Britain, and economically devastated Iceland, Stiglitz paints a picture of a U.S. economy that has stanched the most serious bleeding but remains deeply wounded. [Here’s the ‘money quote’] "I think we would be lucky to be out of the recession by 2012," Stiglitz says. "2010 may be a year of positive growth, though far weaker than would be necessary to get unemployment down significantly." Central to the grim diagnosis, Stiglitz says, is the lack of new jobs -- an argument echoed by the Organization for Economic Cooperation and Development, which this week said high unemployment in the world's wealthiest countries could last years.

With President Obama's stimulus program ending in 2011, the U.S. faces continuing turmoil, says Stiglitz. "There is likely to be weakness again in the economy in 2011," Stiglitz says. "2012 is an optimistic view of when we could be over the travails. The technical term 'recession' is two quarters of negative growth, and we're likely to have positive growth this quarter and next quarter -- but that's not what most people mean by 'out of recession.' Most people mean, 'Are jobs plentiful? Is unemployment low? Are wages strong?' And in those core ways, we are far from being out of the recession."

Still, economic conditions have improved over a year ago, Stiglitz allows. "We're no longer at the precipice, but there are many bumps ahead," he says. "The couple million homes in foreclosure, commercial real estate, high unemployment, mean that some people are not going to be able to repay loans that are outstanding. The banking system is by no means out of the woods. There is reason to believe that there will be continue to be bankruptcies of the banks."

Stiglitz is particularly troubled by the continued failure of small to medium-sized banks that provide the lifeblood of capital to the country's small businesses. "That will impair the 'real' sector, and create more unemployment, and contribute to the vicious weakness and downward cycle of the economy."

Stiglitz also criticizes the government's bailout of the major Wall Street banks. "There certainly are questions about the AIG bailout," Stiglitz says. "$180 billion went to AIG. That's a lot of money. And when we finally got the disclosure of where the money was going from AIG, the original suggestion was that it was because of concern about systemic risk. The largest recipient was Goldman Sachs, which said they did not need that money.

"But questions could be raised about whether they were just saying that," he continues. "The main problem that Goldman raises is a question of size: 'too big to fail.' In some markets, they have a significant fraction of trades. Why is that important? They trade both on their proprietary desk and on behalf of customers. When you do that and you have a significant fraction of all trades, you have a lot of information."

Further, he says, "That raises the potential of conflicts of interest, problems of front-running, using that inside information for your proprietary desk. And that's why the Volcker report came out and said that we need to restrict the kinds of activity that these large institutions have. If you're going to trade on behalf of others, if you're going to be a commercial bank, you can't engage in certain kinds of risk-taking behavior."

On the issue of complicated financial products developed by Wall Street firms to manage risk, Stiglitz was blunt: "I cannot find a social good in complex derivatives. They were designed to manage risk, but they actually increased risk." Some countries, he notes, don't allow them.


Perhaps the most fundamental issue facing the prospect of economic recovery is the fact that there has been absolutely NOTHING done to ‘correct’ imbalances in both the economy and the banking sector.

Bankers are already gearing up to hand out mammoth bonuses to people that have done nothing to deserve them! The ONLY reason the banks aren’t bleeding money is the suspension of ‘Mark to Market’ accounting, which allowed banks to carry toxic assets on their balance sheets at values nobody in their right mind would pay for them…and for this they’re going to hand out bonuses?

Is this what capitalism has come to? Privatized profits and socialized losses? Socialism for the rich and capitalism for everyone else, is that the game here?

Of course it is…they just don’t want to admit to that in front of the ‘rabble’.

Thanks for letting me inside your head,

Gegner

Sunday, September 20, 2009

Another capitalist 'success story'...

Greetings good citizen,

In keeping with the theme of yesterday’s post, we are once again blessed to witness capitalism at its finest. It’s hard to tell what’s more disturbing here, how the advertising supported corporate media fawns over the ‘credentials’ of a former race car driver turned entrepreneur, or how this ‘hero’ plans to ‘off-shore’ the whole shebang once GM wraps up domestic production at the end of this model year…

What a ‘patriot’ huh?

Anyway, on to tonight’s offering

Detroit’s Mr. Fix-It Takes On Saturn

THEY call him The Captain at the racetrack, where his team has won the Indianapolis 500 a record 15 times. But at heart, Roger Penske has always been a consummate repairman, one who excelled at rebuilding used cars as a teenager and later deftly overhauled troubled businesses as an automotive entrepreneur.

Over the last 30 years, he’s also succeeded where corporate giants have failed. He turned around truck leasing for Hertz, revived General Motors’ diesel-engine operations, and gave new life to Daimler’s micro-car franchise, Smart. And when his struggling hometown, Detroit, had to make sure that Super Bowl XL went off without a hitch in 2006, the city turned to Mr. Penske to run it.

Now, at age 72, the silver-haired former race car driver is about to take on the ultimate problem child of the auto industry — G.M.’s Saturn division. [Saturn my not have been a ‘problem child’ before Penske got his hands on it but it sure has turned into one since the ‘hand-over’.]

Since its creation in 1985 as what G.M. anointed “a different kind of car company,” Saturn has been one of Detroit’s biggest disappointments. Instead of a shining example of G.M.’s foresight, it ended up epitomizing the slow, downward spiral of what was once the world’s dominant automaker. [Hmmn, high owner loyalty/satisfaction, er, are we talking about the same vehicle company here?]

Its early promise faded amid weak sales, years of bland cars and a marketing message that was lost in G.M.’s overstocked inventory of brands. G.M. threw money at Saturn, but never made a profit even during its best times. Analysts estimate that Saturn has lost as much as $20 billion over the last 24 years. [‘Analysts estimate’…wait a minute, aren’t these the same guys that keep telling us the economy is roaring back to life?]

“It may well be the biggest fiasco in automotive history since Ford brought out the Edsel,” said Jerome York, a former G.M. director and an aide to Kirk Kerkorian, the investor who has made and lost hefty sums investing in G.M., Chrysler and Ford. “Saturn has been a huge money loser for G.M. for a long, long time.” [Geez, GM sure did a great job of keeping that quiet (until now) didn’t they?]

In Mr. Penske’s view, however, Saturn is a potential jewel to be plucked from the scrap heap of G.M.’s bankruptcy. [Although he only saw fit to ‘pluck’ the name plate from the scrap pile while ‘rescuing’ none of the production facilities…he wasn’t getting ‘stuck’ with any UAW contracts!]

By early next month, his company, the Penske Automotive Group, is expected to complete its acquisition of Saturn from G.M. After that, it plans to try to reinvent the brand as an independent chain of dealerships. That experiment hinges on attracting a foreign car manufacturer that will supply Saturn with vehicles after G.M. stops producing its current line of Saturns in 2011.

The foray sets the stage for a classic business drama involving a self-made perfectionist who seldom tastes defeat and a tarnished brand that struggled to meet expectations under the heavy hand of a slow-moving and entrenched corporate behemoth. All of which has analysts, competitors and auto buffs placing bets on whether or not Mr. Penske met his match in Saturn.

[I suspect the public won’t be fooled by this ‘faux’ patriot and his planned ‘bait & switch’ scam.]

His efforts to restore Saturn’s credibility and improve its sales mirror, in a much smaller way, G.M.’s own uphill battle to come back — as a 60-percent-owned government entity backed by $50 billion in federal loans.

“My guess is that Penske has a shot at it,” says David E. Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. “But I’m not sure I could say that about anyone else except Roger.”

Mr. Penske, citing the pending deal with G.M., declined to comment on his plans for Saturn. People inside G.M. who have knowledge of the transaction — but who requested anonymity because the negotiations are confidential — say that the acquisition should close early next month and that G.M.’s new board of directors wants to move forward with the Saturn divestiture. Penske Automotive has already sent Saturn dealers two-year agreements to review and sign. [These contracts will be a bit tough to honor considering nobody will be making ‘real’ Saturns after the end of this year…]

A G.M. spokesman, Thomas J. Pyden, says the automaker is eager for the deal to close. “We certainly remain hopeful that the sale will proceed,” he says. “In terms of Penske, we don’t think you could find a better buyer for the brand.” [Hmmn, what else would a GM shill executive say?]

Indeed, G.M. has few other options for Saturn. The company has been forced to jettison huge chunks of its global organization to meet government conditions to become a smaller, more nimble competitor so it can ensure its longevity and earn enough money to repay the federal loans that have kept it afloat.

Members of G.M.’s sprawling corporate family like Saab, Hummer and Opel are slated to be sold to foreign buyers, and the venerable Pontiac division will shut down completely. Saturn too looked to become extinct until Mr. Penske surprised the auto industry by making his bid in early June, just two weeks after his race team took home the championship at the Indy 500.

Mr. Penske controls 40 percent of Penske Automotive’s stock, giving him a stake worth about $600 million. The company lost $403 million last year, on revenue of $11.6 billion, during a seismic downturn that slammed all sectors of the auto industry.

In earlier years, Penske Automotive was reliably profitable as it became one of the largest car dealers in the world, with 150 franchises in the United States and an additional 160 in international markets. Mr. Penske’s holdings also include several Toyota dealerships in California.


Um, this is not the ‘end’ of this particular piece, it goes on for, er, 3 more ‘pages’ such as that can be here online (this is just the first page and it comprises a 4 page ‘word’ document.)
Or would print out in 4 separate pages, were I to do so.

I cut it off here because I think we’ve seen enough. I actually ‘took heart’ when I heard Mr. Penske was buying the Saturn Division from GM. (Because I mistakenly believed he was buying the whole product line and not just the nameplate, as is now apparent.)

Now that we see he intends to ‘sell out’ the former employees, I’m no longer impressed with his ‘daring’ nor his ‘can do’ spirit.

The fact that the media is calling this a ‘challenge’ is an insult to our intelligence although one must admit, we can only wonder who will buy a Saturn once they aren’t made here in the US anymore?

Contrary to this article, most folks I know who own Saturns, love ‘em…but once the parts go away, there won’t be much point in trying to keep ‘em running.

Don’t you just love seeing a ‘successful capitalist’ at work?

Thanks for letting me inside your head,

Gegner

Jealous of what?

Greetings good citizen,

I’m just trying to wrap my head around the notion that ‘conservative leaning’ people tend to be hung up on the issue of whether or not the ‘objectors’ to capitalism are ‘successful’ or not…

Well, since there is no such thing as a ‘harmless’ form of capitalism, how the hell are these idiots defining ‘success’?

CG has been accused repeatedly of being a ‘jealous failure’ that couldn’t ‘make it’ in the ‘real world’. If he just had the sack to be an asshole to everyone he had contact with, he’d see just how ‘wonderful’ capitalism really is! Yes siree Bob, everybody ‘gets what they deserve’ under capitalism, that’s what makes it so ‘wonderful’!

Well good citizen, tonight’s offering is another sterling example of Capitalism at its finest, where the ignorance of the customer is exploited and the consequences of a broken eco-system becomes the problem of the community, not the profit chasing prick that created the hazard!

So, what are we supposedly ‘jealous’ of again?

[Hat tip: Cryptogon]


China’s ‘Cancer Villages’ Bear Witness to Economic Boom
September 19th, 2009

Becky runs a food-buying co-op. Both of the “organic” product wholesalers she deals with only sell products like beans, sunflower seeds and peanuts from China. The non-Chinese rice costs 3x to 4x more than the Chinese rice. Obviously, we consume no food from China, regardless of the fact that it’s certified organic.

Now, if this is what we’re dealing with, as batshit insane, lunatic fringe food extremists, what is the average person eating??? The New Zealand government’s lack of a country-of-origin requirement on products (especially food products) is a national disgrace. That the vast majority of people don’t care about this is a different matter. For the tiny fraction of kiwis who do, assume that “Packaged in Auckland” means “Product of China.”

Just be aware of the fact that A LOT of companies are using food products from China, including companies that purport to sell organic food. When buying food, we attempt to buy only whole, unprocessed foods and we don’t buy anything that doesn’t state the country of origin.

Via: Reuters:

One needs to look no further then the river that runs through Shangba to understand the extent of the heavy metals pollution that experts say has turned the hamlets in this region of southern China into cancer villages.

The river’s flow ranges from murky white to a bright shade of orange and the waters are so viscous that they barely ripple in the breeze. In Shangba, the river brings death, not sustenance.

“All the fish died, even chickens and ducks that drank from the river died. If you put your leg in the water, you’ll get rashes and a terrible itch,” said He Shuncai, a 34-year-old rice farmer who has lived in Shangba all his life.

“Last year alone, six people in our village died from cancer and they were in their 30s and 40s.”

Cancer casts a shadow over the villages in this region of China in southern Guangdong province, nestled among farmland contaminated by heavy metals used to make batteries, computer parts and other electronics devices.

Every year, an estimated 460,000 people die prematurely in China due to exposure to air and water pollution, according to a 2007 World Bank study.

Yun Yaoshun’s two granddaughters died at the ages of 12 and 18, succumbing to kidney and stomach cancer even though these types of cancers rarely affect children. The World Health Organization has suggested that the high rate of such digestive cancers are due to the ingestion of polluted water.

“It’s because of Daboshan and the dirty water,” said the 82-year-old grandmother. “The girls were always playing in the river, even our well water is contaminated,” Yun told Reuters during a visit to the village.

The river where the children played stretches from the bottom of the Daboshan mine, owned by state-owned Guangdong Dabaoshan Mining Co Ltd, past the ramshackle family home. Its waters are contaminated by cadmium, lead, indium and zinc and other metals. [Ah, notice how it is the ‘dirty commies’ that pollute the water at will, we can leave the issue of ‘chasing profits’ out of it (even though they are)]

The villagers use well water in Shangba for drinking but tests published by BioMed Central in July show that it contains excessive amounts of cadmium, a heavy metal that is a known carcinogen, as well as zinc which in large quantities can damage the liver and lead to cancer.

“China has many ‘cancer villages’ and it is very likely that these increased cases of cancer are due to water pollution,” said Edward Chan, an official with Greenpeace in southern China. [It’s not just ‘cheaper wages’ that drove US companies (and their peers) to Communist (Ha!) China.]

But it’s not just water, the carcinogenic heavy metals are also entering the food chain.

Mounds of tailings from mineral mining are discarded alongside paddy fields throughout the region.

“If you test this rice, it will be toxic but we eat it too, otherwise, we will starve,” said He, the farmer, as he shoveled freshly milled rice into a sack. “Yes, we sell this rice too.”


Now I want to ask my capitalist readers if this is just a case of Commies being Commies…why aren’t the capitalists being held responsible? Worse is the fact that you don’t need to travel to China to find such blatant violations of the health codes, you can find ‘em right here too!

Why can you find them here? For the EXACT SAME reason they occur there, it’s more ‘profitable’ than doing the ‘right thing/way’.

A pig is a pig and when it comes to profits the labels of communist and capitalist no longer apply. The only thing that matters is being high enough on the food chain to get away with such shameless stunts.

So, how are the idiot conservatives ‘measuring’ success? Naturally, their yardstick measures dollars and not the body bags that are connected to those dollars.

You know, there’s only one way to stop the rape/despoiling of the planet and that way is to remove the profit from it.

We literally have to stop paying dick head for wrecking the place but to do this we need to gain control over the money supply.

Regardless of what happens, we have to wrest the money supply away from the thieves, who are paying themselves for nothing because they can…

Anyway, thanks for letting me inside your head,

Gegner

Thursday, September 17, 2009

FDI plunges worldwide...

Greetings good citizen,

How many of you are genuinely ‘surprised’ to be reading a fresh post tonight? I was supposed to be in recovery from a cardiac procedure scheduled to be preformed this afternoon but, alas…here I am.

Yes good citizen, the mission was ‘scrubbed’ (for the second time) although this time it was a technical malfunction in the Cardio lab that caused the entire day’s production to be rescheduled for next week. (There had to be 50 people in the waiting room, although not all were ‘patients’. A third were ‘designated drivers’ and another third were folks brought along to keep the driver company as there is a seven hour ‘recovery period’ for each patient after the two hour (average) procedure. However, this is a huge improvement over the 3 weeks recovery period most patients required after having their chests ‘cracked open!’

Here’s to hoping that the ‘third time is the charm’ (as the damn pony sitting on my chest isn’t getting any lighter!) Anyway, we’re shooting for a Monday AM ‘re-do’. I’ll find out tomorrow.

What were we talking about? Oh yeah, today’s rather curious report about ‘F.D.I.’ a.k.a. ‘hot money’ and what it might mean to the global economy…


Overseas Investment Plunging

By LISA PHAM
Published: September 17, 2009

PARIS — Foreign direct investment will fall more than 29 percent this year from 2008 as a result of the global economic crisis, a United Nations body forecast Thursday, keeping a lid on global growth.

Global inflows of F.D.I. — purchases of controlling interests in productive assets overseas — will fall below $1.2 trillion, from $1.7 trillion last year, the United Nations Conference on Trade and Development predicts in its annual World Investment Report. [Once again we see the…effect of expressing things in terms of ‘large numbers’, except a fraction of a trillion dollars is still hundreds of billions. Five hundred billion in this case.]

The decrease continues the downward trend of investment inflows, which fell 14 percent in 2008 from a historic peak of $1.98 trillion the year before.

The global economic crisis has hurt the capacity of transnational corporations to invest, the report found, because tighter credit and lower profits have reduced their financial resources for financing overseas investment projects. [It sure doesn’t help that there aren’t enough customers to absorb the capacity we already have, making building more ‘an exercise in futility’]

The agency forecast a slow recovery in 2010, with the level of foreign direct investment reaching no more than $1.4 trillion, accelerating to nearly $1.8 trillion in 2011. Business investment is essential for economic recovery, so the weak performance suggests global growth will remain capped for some time.

The United States, which remains the preferred destination for foreign investors, experienced a 42 percent decrease in the first quarter of 2009, to $33.3 billion, compared with a year earlier. [Er, could this be interpreted as ‘sovereign wealth funds’ trying to trade their dollars for ‘hard assets’?]

Investment inflow to the European Union fell a similar 43 percent during the first quarter, to $109.5 billion. [Compare those two statements and tell me there isn’t a direct contradiction there.]

Britain was an exception. Investment inflows there rose 17.6 percent, to $63.2 billion, during the first three months of this year. [This is as ‘screwy’ as investors buying Fannie/Freddie and AIG shares!]

Among developing countries, inflows to India fell 56 percent in the first quarter, China’s fell 21 percent and Brazil’s declined 39 percent. In Africa, after a record $88 billion in 2008, inflows dropped by 67 percent in the first quarter.

About 85 percent of the 240 transnational companies surveyed for the report said the economic downturn influenced their investment cuts; 58 percent of large transnational corporations said they intended to reduce their foreign direct investment expenditures in 2009.

Cross-border merger and acquisitions activity, which had been a big driver of F.D.I. growth in recent years, fell from $673 billion in all of 2008 to $123 billion in the first half of 2009. It had fallen 35 percent in 2008 from a year earlier.

Investment in agriculture and the mining, oil and gas industries held up “relatively well,” the report said “compared with business-cycle-sensitive industries such as metal manufacturing. In addition, there is a better outlook for F.D.I. in such industries as agribusiness, many services and pharmaceuticals.

The agency found that government policies since the onset of the crisis “have so far been mostly favorable to F.D.I.” But it warned that “a more restrictive” approach had emerged in some countries with “growing evidence of ‘covert’ protectionism.”


Hmmn, it seems everywhere you look these days, the GD forces of ‘globalization’ are seeing ‘closet protectionism’ in all of their ‘trade partners’. Bizarrely, here in a nation nearly picked clean by ‘globalization’ we are constantly being accused of ‘protectionism’ (would that it were!)

One would be hard pressed to find another nation that has, er, ‘sacrificed’ more of it’s wealth producing potential than the US. Those jobs had to go to save the shareowners from high US wages and pension obligations…never mind providing all of those employees with ever more expensive health care!

Yes good citizen, the ‘more for me’ crowd has indeed made good on it’s threat to ‘abandon the US’ and leave all of us ‘worthless people’ to our own ‘devices’.

Naturally, they didn’t ‘announce’ their intentions, they just did it and nobody has held them accountable for their actions, which is the scary part good citizen. Just who the hell is looking out for the ‘welfare’ of this nation? Sure looks like nobody.

Which is another can of worms entirely but one problem at a time.

Sleep tight!

Thanks for letting me inside your head,

Gegner

Wednesday, September 16, 2009

The disease of private debt is not 'cured'

Greetings good citizen,

Well, here we are again and so far (we’re not there yet) everything is a ‘go’ for tomorrow, the only ‘casualty’ so far is breakfast (last week I could have it, this week I can’t…go figure?)

If only for the ‘symbolism’ tonight’s offering really hits the mark…

The disease of private debt is not cured

You have just come from your annual medical check-up where your doctor assures you that you are in robust health.

Walking jauntily down the street, you bump into a practitioner of alternative medicine. He takes one look at you and declares, “You have a serious tumour! It must be removed or you will die.”

You ignore him as you always have, and continue your merry way down the street. One day later, a stabbing pain suddenly cripples you, and you collapse to the pavement.

In agony, your call your doctor, who initially refuses to send an ambulance because he knows you are well.

When you lapse into a coma and stop talking mid-sentence, your doctor concludes that perhaps something is wrong, and sends an ambulance to take you to hospital.

Initially the doctor waits for you to revive spontaneously, because he still knows there's nothing really wrong with you. But as your pulse starts to weaken, he reluctantly calls a retired doctor who had experience of a similar inexplicable malady in the distant past.

She prescribes massive doses of tranquilisers, pain-killers, vitamins, and oxygen – all substances that had been removed from the medical panoply due to recent advances in medical theory. Reluctantly, your doctor follows his retired colleague's advice – and miraculously, you start to revive.

After a year of expensive medical treatment, you return to the same robust health you displayed before your inexplicable illness. Triumphant, if somewhat puzzled, your doctor declares you well once more, and releases you from intensive care.

As you stride confidently away from the hospital, you have the misfortune to once again bump into the practitioner of alternative medicine.

“But they haven't removed the tumour!”, he declares.

One shouldn't have to spell out the details of such an analogy, but in times of widespread denial, one has to:

– You are the economy;

– The tumour is a massive accumulation of private debt;

– Your doctor is Neoclassical Economics, and the retired colleague is a so-called "Keynesian" Economist (who doesn’t know it – since his medical textbooks were poorly written – but he’s actually following another economist called Paul Samuelson, not Keynes);

– The alternative medicine practitioner follows Hyman Minsky's "Financial Instability Hypothesis" (which is based on what Keynes actually did say – as well as the wisdom of Joseph Schumpeter and, in whispers, Karl Marx);

– The moment you hit the pavement is the beginning of the Subprime Crisis; The collapse of Lehman Brothers is the moment when you slip into a coma; and

– The day the doctor takes you off life support and declares all is well … is next month.

The final reason for me being a bear is that I am that practitioner of alternative medicine. Minsky’s “Financial Instability Hypothesis” has been ignored by conventional economists for reasons that are both ideological and delusional. A small band of “Post-Keynesian” economists, of whom I am one, have kept this theory alive.

According to Minsky’s theory:

– Capitalist economies can and do periodically experience financial crises (something that believers in the dominant “Neoclassical” approach to economics vehemently denied until reality – in the form of the Global Financial Crisis – slapped them in the face last year);

– These financial crises are caused by debt-financed speculation on asset prices, which leads to bubbles in asset prices;

– These bubbles must eventually burst, because they add nothing to the economy’s productive capacity while simultaneously increasing the debt-servicing burden the economy faces;

– When they burst, asset prices collapse but the debt remains;

– The attempts by both borrowers and lenders to reduce leverage reduces aggregate demand, causing a recession;

– If the economy survives such a crisis, it can go through the same process again, with another boom driving debt up even higher, followed by yet another crash; but

– Ultimately this process has to lead to a level of debt that is so great that another revival becomes impossible since no-one is willing to take on any more debt. Then a Depression ensues.

That is where we were … in 1987. The great tragedy of today is that na├»ve Neoclassical economists like Alan Greenspan and Ben Bernanke allowed this process to continue for another three or more cycles than would [not] have occurred without their rescues.

In 2008, they did it again – only with methods they would have disparaged a mere year earlier (“Rational Expectations Macroeconomics”, a modern neoclassical fad, preaches that government intervention can’t influence the level of economic activity at all – yet another belief that reality has recently crucified). This time, while the rescue has worked, the recovery they expect afterwards can’t happen – because there’s almost no-one left who will willingly take on any more debt.

This time, there’s no re-leveraging way out. The tumour of debt has to be removed.


Well done! Oddly appropriate, considering my personal circumstances…(and no, the only ‘tumor’ I have is a ‘Milwaukee tumor’!)

All kidding aside, Mr. Keen is a very astute economic observer. We will not put this economic crisis behind us until, er, we, they, urg, somebody knocks down the enormous amount of debt clogging the financial system.

One of the problems with debt is its someone else’s income…but what do you do when the situation screams for a ‘jubilee’? (Across the board forgiveness of debts.)

Because the ‘choices’, as poor as they are, is either wiping out debt or standing back and watching helplessly as civilization ‘crashes and burns’.

It’s what ‘needs to be done’ and they all know it, so you should be somewhat concerned that they are even considering the, er, ‘flame option’…

No amount of ‘debt’ is worth that.

Thanks for letting me inside your head,

Gegner

P.S. What do you suppose it means when even the ‘old timer’s’ don’t understand why the market is rallying?

Tuesday, September 15, 2009

Ping-Pong

Greetings good citizen,

There’s an old saying that goes “Opinions are like assholes, everybody’s got one.” I’m sure you have yours just as I have mine.

Unfortunately, we seem unable to escape the topic of economic recovery, I’m as sick of denying it as the pundits must be of declaring it, so much for a ‘difference of opinion’.

Let’s have a look at what ‘BenBer’ has to say…

Fed Chief Says Recession Is ‘Very Likely Over’

By STEPHEN LABATON
Published: September 15, 2009

WASHINGTON — The Federal Reserve chairman Ben S. Bernanke said Tuesday that it was “very likely” that the recession had ended although he cautioned that it would be many months before unemployment rates would drop significantly. [Honestly good citizen, we could be talking a hundred or more ‘months’, we’ve already lost one decade and it would be extremely easy to lose another one…worse, it wouldn’t be any skin off anyone in this administration’s nose. The Democrats, like the Republicans are both dead and buried.]

“From a technical perspective, the recession is very likely over at this point,” he said, adding that “it’s still going to feel like a very weak economy for some time, as many people will still find that their job security and their employment status is not what they wish it was.” [‘Scuse me, but does anyone even remember a time when the constant threat of lay-off DIDN’T loom large on their personal radar? People who entered the workforce after 1980 DO NOT remember a time when their job wasn’t in jeopardy.]

The wildly cautiously optimistic assessment came at the conclusion of a speech by Mr. Bernanke at the Brookings Institution marking the anniversary of the market crisis that was precipitated by the collapse of the investment bank Lehman Brothers. [The ‘collapse’ of Lehman Brothers didn’t ‘cause’ or ‘trigger’ anything that wasn’t already there! As much as they’d like you to believe otherwise…]

Mr. Bernanke said the consensus of forecasters was for moderate growth for the rest of this year and next, particularly as credit markets thaw, consumer confidence takes time to heal, and the federal government begins to unwind a series of federal spending and lending programs intended to mend the economy. [What sweet irony, they can’t unwind those ‘special programs’ without pulling the plug on the recovery. We’re stuck with them until they go bankrupt (which literally means they bankrupt us.)]

Business cycles are officially dated by a committee of economists at the National Bureau of Economic Research. The committee often spends many months sifting through economic trends before declaring the beginning and end dates of a recession. [Um, this ‘downturn’ had nothing to do with the ‘business cycle’, the financial markets crashed because the consumer ‘hit the wall’. Well guess what, absolutely NOTHING has been done to help the consumer, so there’s no way in hell ‘commerce is going to start ‘expanding’ again…which isn’t necessarily a ‘bad thing’.]

For policymakers in Washington the more significant question than the actual date of the end of the recession will be when to begin unwinding the myriad of lending programs that were hastily created in response to the crisis? Officials at the Federal Reserve have already begun to think about that question. Mr. Bernanke and other top officials, including the Treasury secretary, Timothy F. Geithner, have warned that winding down the programs too early could lead to another round of problems. Historians now generally agree that, during the Great Depression, the early withdrawal of government programs in the 1930s led to deeper economic problems throughout that decade. [Speaking of historians, Uncle Milty (Friedman) ‘explained’ how the ‘Great Depression’ (part I) was caused by the Federal Reserve not pumping massive amounts of money into the economy, so his ‘disciple’ BenBer, has pumped trillions of dollars into the economy and, surprise, surprise, we are still in trouble…because the money never got to where it could do the economy some good, they gave the money to people that already had too much…and they’re still ‘sitting’ on it while the real economy gets sucked down the tubes. Oh fucking well.]

On the other hand, waiting too long could fuel significant price increases and lead to a return of corrosive levels of inflation.

During his speech, Mr. Bernanke repeated his broad defense of the extraordinary rescue efforts by the central bank, the United States government and other foreign powers over the last year. [He’d look like an idiot (or a thief) if he didn’t.]

“Without these speedy and forceful actions we would have a lot more money to address ‘real problems’ with the economy , last October’s panic would likely have continued to intensify, or major financial firms would have failed, and the entire global financial system would have been at serious risk,” Mr. Bernanke said. “We cannot know for sure what the economic effects of these events would have been, but what we know about the effects of financial crises suggests that the resulting global downturn could have been extraordinarily deep and protracted.”


It’s crap like this that make you wonder what the hell Obama was thinking when he decided to re-appoint this fool. If you want to boil this thing down, the entire crisis is the result of regulatory capture where the law was either re-written or ignored to protect the guilty.

And the man who ran on the platform of change is making sure that nothing does, at least until the crooks can make a clean getaway…

Thanks for letting me inside your head,

Gegner