Tuesday, December 22, 2009

What's a girl to do?

Greetings good citizen,

I still haven’t read a single ‘corroborating’ story in the MSM regarding yesterday’s rather sensational story about the alleged Supreme Court decision.

Naturally, it is hard to tell what this means, we won’t know anything for sure until there is an incident…and I’m pretty sure nobody wants to be THAT ‘test case’.

Along the same general lines we have this story ripped from the pages of ‘The Automatic earth’ where a commentor advises this story is from a ‘back issue’ of ‘Life Insurance Today’ which originally appeared on March 5th of this year…

So why run with it?

Setting aside the ‘breathless’ tone of the piece, the position it takes isn’t necessarily ‘irrelevant’.

If The US Economic System Collapses as Some Economists Are Predicting, How Will Women Cope?

What’s Dead (Short Answer: All Of it.)

Just so you have a short list of what’s at stake if Washington DC doesn’t change policy here and now (which means before the collapse in equities comes, which could start as soon as today, if the indicators I watch have any validity at all. For what its worth, those indicators are painting a picture of the Apocalypse that I simply can’t believe, and they’re showing it as an imminent event – like perhaps today imminent.) [This particular statement makes more sense if it were made when the markets ‘bottomed’ earlier this year]

* All pension funds, private and public, are done. If you are receiving one, you won’t be. If you think you will in the future, you won’t be. PBGC will fail as well. Pension funds will be forced to start eating their "seed corn" within the next 12 months and once that begins there is no way to recover. [As far as I know this has not come to pass BUT the general public is largely ignorant of precisely who received ‘bailout funds’, how much and why…so this statement is not, at this point in the game, ‘provably false’.]

* All annuities will be defaulted to the state insurance protection (if any) on them. The state insurance funds will be bankrupted and unable to be replenished. Essentially, all annuities are toast. Expect zero, be ecstatic if you do better. All insurance companies with material exposure to these obligations will go bankrupt, without exception. Some of these firms are dangerously close to this happening right here and now; the rest will die within the next 6-12 months. If you have other insured interests with these firms, be prepared to pay a LOT more with a new company that can’t earn anything off investments, and if you have a claim in process at the time it happens, it won’t get paid. The probability of you getting "boned" on any transaction with an insurance company is extremely high – I rate this risk in excess of 90%. [None of this has come to pass BUT we are faced with one of the really big ‘Ifs’ that there isn’t a good answer to, if the insurance industry were, um, ‘underwater’ and billions if not trillions in obligations were, uh, ‘unprotected’…would they tell us? (Understand that telling means everybody would stop paying their premiums tomorrow and the entire insurance industry would ‘slip under the waves’ never to be seen again the following day.) So the ‘short answer’ to the question of ‘would they tell us’ is quite obvious…No. They wouldn’t and the public’s ‘right to know’ be damned in the process!]

* The FDIC will be unable to cover bank failure obligations. They will attempt to do more of what they’re doing now (raising insurance rates and doing special assessments) but will fail; the current path has no chance of success. Congress will backstop them (because they must lest shotguns come out) with disastrous results. In short, FDIC backstops will take precedence even over Social Security and Medicare. [Um, it’s statements like this that make me wonder if the commentator is correct because early in the year they had only closed a handful of banks. It is only recently that they have been closing as many as six banks (not branches) a week and the ‘losses’ are starting to ‘pile up’ with the FDIC finding itself ‘on the hook’ for an ever-larger share of the losses.]

* Government debt costs will ramp. This warning has already been issued and is being ignored by President Obama. When (not if) it happens debt-based Federal Funding will disappear. This leads to….[Here we see more evidence that this article is ‘fresher’ than it seems, it wasn’t until this past summer that we had any idea how much the government had spent in bailout funds. At the beginning of the year there was TARP and the ‘Stimulus’ which totaled a ‘mere’ 1.5 trillion, it wasn’t until later that we learned the government had given away more than 23 trillion.]

* Tax receipts are cratering and will continue to. I expect total tax receipts to fall to under $1 trillion within the next 12 months. Combined with the impossibility of continued debt issue (rollover will only remain possible at the short duration Treasury has committed to over the last ten years if they cease new issue) a 66% cut in the Federal Budget will become necessary. This will require a complete repudiation of Social Security, Medicare and Medicaid, a 50% cut in the military budget and a 50% across-the-board cut in all other federal programs. That will likely get close. [Okay, this is a bit radical but the central point holds, tax receipts are WAY down and it’s only going to get worse…um, ironically, tax receipts weren’t ‘big news’ back in the first quarter…and the link the commentor provided didn’t work…so maybe they’re ‘full of it’.]

* Tax-deferred accounts will be seized to fund rollovers of Treasury debt at essentially zero coupon (interest). If you have a 401k, or what’s left of it, or an IRA, consider it locked up in Treasuries; it’s not yours any more. Count on this happening – it is essentially a certainty. [I can see ‘hardcore’ capitalists denying this kind of assertion vigorously, you’d think God personally countersigned every contract ever written…but the same rabid capitalists would use the same argument to deny the Supreme Court’s ‘negation’ of the Constitution we read about yesterday as well. As ‘dire’ as this article reads, it ‘could’ happen.]

* Any firm with debt outstanding is currently presumed dead as the street presumption is that they have lied in some way. Expect at least 20% of the S&P 500 to fail within 12 months as a consequence of the complete and total lockup of all credit markets which The Fed will be unable to unlock or backstop. This will in turn lead to…[Um, okay, this was a problem back in March but it’s become an even bigger problem today…while ‘personal’ bankruptcy is off the charts, the S&P 500 is still largely ‘intact’…although that might not be true 12 months from now.]

* The unemployed will have 5-10 million in direct layoffs added within the next 12 months. Collateral damage (suppliers, customers, etc) will add at least another 5-10 million workers to that, perhaps double that many. U-3 (official unemployment rate) will go beyond 15%, U-6 (broad form) will reach 30%. [This statement is a bit ‘whacko’ because it doesn’t take into consideration that people ‘eventually’ exhaust their unemployment claims and are no longer ‘counted’ as unemployed. In this respect we are already well beyond the 30% mark (of working aged citizens’) although I wouldn’t be quick to kick somebody in the shins for their failure to figure in how the ‘shell game’ works. Unemployment could well get worse BUT it is doubtful it will ever ‘officially’ get much higher than the current 10% level.]

* Civil unrest will break out before the end of the year. The Military and Guard will be called up to try to stop it. They won’t be able to. Big cities are at risk of becoming a free-fire death zone. If you live in one, figure out how you can get out and live somewhere else if you detect signs that yours is starting to go "feral"; witness New Orleans after Katrina for how fast, and how bad, it can get. [Um, there isn’t much left of this year, that aside, it’s not too hard to imagine that conditions will be plenty dire by this time next year…just saying, ya know?]

The good news is that this process will clear The Bezzle out of the system. The bad news is that you won’t have a job, pension, annuity, Social Security, Medicare, Medicaid and, quite possibly, your life. [Um, I wouldn’t completely agree that the ‘thieving’ has stopped but if we consider that absolutely NOTHING has been done to counter our ‘economic imbalances’, it’s only a matter of time until our ‘social contract’ is worthless.]

It really is that bleak folks, and it all goes back to Washington DC being unwilling to lock up the crooks, putting the market in the role it has always played – that of truth-finder, no matter how destructive that process is. [Um, that’s just plain wrong but the writer is likely a capitalist who still holds out hope for a ‘miraculous’ recovery.]

Only immediate action from Washington DC, taking the market’s place, can stop this, and as I get ready to hit "send" I see the market rolling over again, now down more than 3% and flashing "crash imminent" warnings. You may be reading this too late for it to matter.

Ah, the ‘contradictions’ facing today’s markets make this piece read like it was posted this morning…not that he’d find a lot of takers on the notion that the markets are about to ‘crash and burn’ tomorrow.

Yes, the ‘timing’ thing has vexed market observers for as long as there have been markets. If I could predict ‘with certainty’ that the markets would crash and burn tomorrow, I’d finish the day a very wealthy man (if I could collect on my ‘bets’.)

Sadly, I do not possess that variety of ‘foresight’. Fortunately, I don’t lose any sleep over that bit of ‘personal inadequacy’.

Speaking of ‘inadequacy; we now arrive at tonight’s second offering where guys who earn their paycheck ‘predicting’ what the markets will do find themselves proven wrong yet again!

Third Quarter Growth Weaker Than First Thought

Published: December 22, 2009

Economic growth was weaker than expected in the third quarter, the government said Tuesday, held back by soft business construction and dwindling inventories. [Is it just me or does it look like they picked those two market factors out of a hat?]

While the results tempered some of the expectations about the pace of a recovery, analysts still foresee steady, and stronger, growth in the fourth quarter. [This is not true, but analysts say this in hopes that you’ll invest in the stock market so they won’t lose their jobs…it’s a ‘self-preservation’ thing.]

A separate report released Tuesday showed an unexpected surge in existing home sales, which climbed 7.4 percent in November as Americans took advantage of a tax credit for first-time home buyers. [Um, is anyone else amazed at how often these analysts are wrong/surprised by the markets and they still get to keep their jobs, it’s friggin remarkable!]

Gross domestic product in the third quarter — the total value of goods and services in the economy — was 2.2 percent from July through September, revised down from 2.8 percent last month and 3.5 percent in October. [Understand it was the third quarter results that drove the Dow over the 10,000 point barrier…and now they think they were 1.3% too ‘optimistic’? As I comment above, if you or I were that ‘wrong’ in a real job we’d be fired, no questions. Real businesses can’t function with that much ‘error’!]

“We did get off to a slightly slower start than we had thought,” said Nigel Gault, chief United States economist for IHS Global Insight. “That would be very worrying if we hadn’t had the evidence that we had done well in the fourth quarter.” [Um, at least we know who ‘Nigel’ is and ‘Global Insight’ is located in Cambridge so I’ve heard of them (and Nigel) before but is anybody buying this weasel-worded, waffling that we all know is an outright lie? They picked the number out of their ass, knowing they’d need to ‘backpedal’ later…but ‘later’ is too late for the suckers who plunked their cash down, isn’t it?]

The United States is grappling with high levels of unemployment and businesses and consumers alike remain reluctant to spend. Still, analysts expect exports and consumer spending to rebound in the fourth quarter, helping the economy reach an annual pace of growth of about 5 percent. [Didn’t we just point out how ‘wrong’ these ‘analysts’ are? Why would anybody believe these lying assholes now after they have been so wrong for so long and absolutely NOTHING has been done to elevate ‘purchasing power’?]

Even though growth in the third quarter was slower than previously thought, it still marked the first period of growth in a year, suggesting the longest economic contraction since World War II had ended. Government stimulus efforts, such as the popular “cash-for-clunkers” program, helped drive up spending. [Um, the operative word here is ‘suggesting’ which isn’t particularly encouraging, given the ‘analysts’ track record to-date.]

The Commerce Department’s revisions were based on smaller-than-expected business inventories, which fell by $139.2 billion. Spending by businesses on items like software and equipment was also weaker than expected, rising by 5 percent rather than the 8.4 percent originally predicted.

Paul Dales, chief economist for Toronto-based Capital Economics, said the overall drop was “nothing to worry about,” but he expressed concern about the decrease in investment.

“It may suggest that a lot of the demand pent up during the recession has already been released,” Mr. Dales wrote in a research note on Tuesday. “High uncertainty and lots of spare capacity are limiting capital spending.”

Construction of business space like malls and office buildings fell more than previously thought, by 18.4 percent rather than 15.1 percent. Economists attribute that drop to a frail commercial real estate market, which is facing high vacancy rates and banks that are reluctant to finance business expansions. [Do you see the ‘misdirection’ here? Why isn’t Bozo pointing to the huge ‘surplus’ of commercial real estate available…why build more when there is so much space readily available? Why ‘pretend’ banks are ‘reluctant’ to fund business expansions when so few enterprises have expansion included in their business plan?]

Spending by state and local governments was also weaker than expected, falling 0.6 percent, compared with the 0.1 percent originally forecast. Consumer spending was revised slightly, growing 2.8 percent in the quarter rather than 2.9 percent. [Tax receipts are way down, what’s supposed to be the ‘mystery’ here?]

As the New Year approaches, investors are optimistic that the economy will outperform its earlier gains rather than fall into another downturn. Retail sales were higher than expected in November, and the trade deficit unexpectedly narrowed in October. In addition, a weak dollar is making American products overseas cheaper, contributing to hope that exports will rise.

Hard to say good citizen what part of this pack of lies needs to be addressed first. The ‘uptick’ in November sales has already been attributed to rising energy prices, so it was basically ‘inflation’. The narrowing of the trade deficit in October has been shown to be a temporary uptick in exports driven by dollar weakness, which isn’t necessarily a ‘good thing’ either.

I don’t know about you good citizen but I don’t like being jerked around, articles like this coming out of the ‘paper of record’ for the US are just plain embarrasing. It’s bullshit like this from the MSM that make articles like our first offering look that much more credible!

Thanks for letting me inside your head,


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