Saturday, February 13, 2010

More than I can say...

Greetings good citizen,

For all of the red ink spilled this week, markets around the globe finished the week in positive territory!

As you know, this isn’t particularly remarkable news…although it should be. We all know they haven’t done a single thing to put more money in the pocket of the consumer yet share prices are still rising, despite the massive shrinkage of the overall payroll.

Perhaps more alarming is the ‘value’ of money is falling so rapidly that stock prices are rising not because of increased economic activity but because the dollar value of equities is rising because the value of dollars is falling!

This is a bizarre FU that the owners of stocks perpetrate on the non-owners…the value of money falls but share prices remain constant (or appreciate) because assets become ‘more valuable’ when the value of money is diluted.

So the rich get richer for doing nothing while you are paid the same number of less valuable dollars for working just as hard as you always do.

Talk about ‘stick ‘em up! What we have here is another reason our education system is woefully lacking in what they teach you about money! If you knew you were going to get screwed like this you’d never agree to work for anybody longer than a single day!

You simply couldn’t afford to wait for an ‘annual’ pay raise while chiseler beats you to death ten months out of twelve! (And then withholds your raise saying ‘times are tough, be happy you’ve still got a job!’ Until you end up running up your credit cards so you can keep your job that doesn’t pay you enough…what a fuck job!)

In the meantime, do you really think the ‘smarter than you’ crowd doesn’t know the score?

[Purloined from: Financial Armageddon ]

Corporate America Is More Pessimistic Than You Know

Looking for an explanation for the deep freeze in merger & acquisition activity and the jittery stock market? Just ask the boards overseeing U.S. companies.

A whopping 66% of 1,200 corporate board members surveyed recently said U.S. companies wouldn’t return to “business as usual” until at least 2013, [That’s three years from now for the counting challenged among you…] and will operate till then in an environment of sluggish sales and growth. Roughly 45% said the economy wouldn’t return to pre-crisis levels in terms of investment, employment and productivity before 2013, according to the survey, conducted by KPMG LLP, while 22% said it would come beyond 2014. [Honestly good citizen, the economy will NEVER return to the level of activity that existed until late 2007, never.]

“Not withstanding what economists are saying about the recovery, we are hearing from board members that they just don’t see it,’’ says Mary Pat McCarthy, a KPMG vice chairwoman who oversaw the survey of directors at publicly traded companies of varying sizes across the U.S. [Not particularly surprising now, is it? The devaluation of our currency is not ‘economic activity’ any more than shuffling funds from one account to another creates any wealth…never did, never will.]

McCarthy spoke to Deal Journal this morning from Miami where KPMG was hosting a conference of primarily audit committee members of corporate boards. “We are hearing a steady drumbeat down here that a recovery is a way’s off,” she said.

Another concern among board members: That the cost-cutting and layoffs that have helped boost corporate profits are going to hurt companies in the long term. The survey found that 67% of the respondents said were most concerned that cost-cutting would drain a company’s employee talent. [Funny that the people who cost the most and would be missed the least are the only ones not in danger of losing their job!]

Other concerns: 36% said they worried cost-cutting would weaken internal controls, 25% said it could raise the risk of fraud and 22% said they thought the integrity of financial reporting could suffer in the hands of leaner staffs. [‘Creative accounting’ is already the principle reason why 90 % of US businesses haven’t filed Chapter 7, the banks aren’t the only ones being allowed to ‘cook the books’.]

Bankers, perpetual optimists by nature, have been saying recently that companies seem willing to contemplate deals and they expect M&A to bounce back this year. In light of the bleak portrait contained in the KPMG survey, the question is, just who are these bankers talking to?

Um, what do you suppose is driving the ‘wishful thinking’ coming from the banking sector? Understand that we already have a financial sector that is far too large for the amount of business that needs to be serviced. Flipping that rock over, the financial sector is too small to ‘shrug-off’ the losses that are still waiting for recognition (never mind resolution) off of their balance sheets.

Um, I’ve said it before and I’ll say it again (because what else do I do if not repeat the same thing, over an over again…right?) There is no way out. They will be forced to hit the reset button…something the chiselers will do so only they see relief…their debts will be forgiven while the average citizen sees their obligations eased only slightly.

Understand it is completely logical as well as practical to simply wipe out all of the outstanding debt…but that might provide a few smart guys with more freedom than the chiselers are comfortable with…

Better to stick all of us than to let some of us off the hook. It’s all about ‘appearances’.

But I digress…

There is a second offering for your reading pleasure AND, if you click through, you will get your funny bone tickled too!

The Approaching US Dollar Reserve Currency Crisis

"US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941."

No matter how they wrap it, spin it, try to hide it, we have seen an epic expansion in the US monetary base not seen since 1932.

This monetary expansion has not yet reached into the broader money supply figures because it is not reaching the public, despite the chant from the "Yes We Can" Kid. Bernanke has most of that liquidity bottled up in a few big banks collecting an easy riskless spread, with some of it chasing beta in the speculative markets.

Ben can talk a tough game, and jawbone rates with his plans to someday return to normalcy. But at the end of the day, the US is playing out a well-worn script that is highly predictable.

There are three choices the Sith Lords at the Fed and their western central bank apprentices have at this point: inflation, inflation, and inflation.

The only question is how and when it will become obvious even to the most stubborn believers in the Dollar Über Alles. Ben will seek to control it, to unleash it from its cage very slowly, spread the pain to the US trading partners overseas.

The US dollar reserve currency status is faltering, but not yet under a serious assault. The monied elite will try to eliminate any serious competition, such as the euro or precious metals, by any and all means possible.

Greece is roughly 2.6% of the Eurozone GDP. California is 13% of the US. [Naturally, you can see the problem, can’t you good citizen?]

How long they can continue this is anyone's guess. These things tend to play out slowly, over years. I do not expect the US dollar to fail precipitously in the manner of the Zimbabwe dollar or with Weimar Reichsmark, but rather to be devalued in a step-staggered manner, over time, until it stabilizes and the debts are liquidated. [Worse, the longer this takes, the more we will suffer.]

When the US starts closing the greater portion of its 700+ overseas military bases, we will know that it has become serious about financial reform and balancing its books. Until then, all is posturing, self-interest, demagoguery, and deception.

Either Jesse is a pretty deft hand at photoshop or he knows somebody who is!

Er, back to the subject at hand…

The ‘non-recovery’ and the inevitable slow motion destruction of both our economy and our currency.

Many are of the opinion that there won’t be any, er, unmanageable ‘blowback’ from the persistent suffocation of our lower classes, the ‘surplus’ population.

Um, would I be wrong to point out that we have yet to ‘eradicate’ the Vietnamese, the Sunni Arabs or the Palestinians…

Okay, humans aren’t as ‘resilient’ as insects--or plants for that matter, and the list of species we’ve driven to extinction is pretty impressive, even if it is sans weeds and insects.

We have, given sufficient time, successfully ‘assimilated’ many once hostile cultures, but since the goal is to reduce the number of end-users of our increasingly precious resources, assimilation isn’t going to produce the desired results.

Which is to point out that it is highly doubtful the ‘target population’ here in the US will peacefully accept being murdered for the continued well-being of the well-off.

Would I be urging said target population to get up off of its dead ass?

Oh yeah!

Thanks for letting me inside your head,


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