Tuesday, April 27, 2010


Greetings good citizen,

After yesterday's post on the value of 'truth' we encounter more MSM reporting that has nothing to do with 'facts'.

What this spells for our society is decidedly grim. It is not a good environment to raise children in.

It can't be just me. I can't be the only one flabbergasted by the blatant, er, 'distortions' the MSM regularly passes off as 'fact'.

Um, this case is fairly well documented here, I will let the following speak for itself:

From the Mall to the Docks, Signs of Rebound

Published: April 25, 2010

PORTLAND, Ore. — The docks are humming again at this sprawling Pacific port, with clouds of golden dust billowing off the piles of grain spilling into the bellies of giant tankers.

In Portland, Ore., Kevin Weldon prepared soda ash for export. Exports rose in the first two months of the year by nearly 15 percent compared with a year earlier.
[Avast there all ye skeptics and behold what now passes for US ‘economic might!’ Note the ‘similarity’ these ‘raw materials’ hold with the exports of other ‘Banana Republics’…]

“Things are looking up,” said Dan Broadie, a longshoreman. No longer killing time at the union hall while waiting for work, instead he is guiding a mechanized spout pouring 44,000 tons of wheat into the Arion SB, bound for the Philippines.

At malls from New Jersey to California, shoppers are snapping up electronics and furniture, as fears of joblessness yield to exuberance over rising stock prices. Tractor trailers and railroad cars haul swelling quantities of goods through transportation corridors, generating paychecks for truckers and repair crews. [Um, given that only a teeny-tiny percentage of the population actually ‘owns’ stocks, it is ‘irrational’ in the extreme to point to rising stock prices as an expression of ‘consumer confidence’…(but what the hell else are they going to point to? There’s nothing there.)]

On the factory floor, production is expanding, a point underscored by government data released Friday showing a hefty increase in March for orders of long-lasting manufactured items. In apartment towers and on cul-de-sacs, sales of new homes surged in March, climbing by 27 percent, amplifying hopes that a wrenching real estate disaster may finally be releasing its grip on the national economy. [Yesterday’s article, which is from the WSJ, by the way, about the 9 year ‘overhang’ in the housing market tells a different story! Is Mr. Goodman an idiot or does he just think you are?]

After the worst downturn since the Great Depression, signs of recovery are mounting — albeit tinged with ambiguity. Despite worries that American consumers might hunker down for years — spooked by debt, lost savings and unemployment — thriftiness has given way to the outlines of a new shopping spree: households are replacing cars, upgrading home furnishings and amassing gadgets. [Understand that despite all of this ‘happy talk’, State sales tax revenues continue to hit new lows, so who the fuck are they shitting?]

Many economists estimate that consumer spending — which makes up some 70 percent of American economic activity — swelled by 4 percent during the first three months of the year, more than the double the pace once anticipated. Some have nudged upward their estimates for economic growth to more than 3 percent this year. [Um, who ‘anticipated’ what and more frustrating, what the fuck is it supposed to mean? Isn’t this the same as saying ‘water is wet’?]

“Consumers are showing extraordinary resilience,” said Bernard Baumohl, chief global economist at the Economic Outlook Group. “There’s a lot of pent-up demand out there that is now being unleashed. The whole supply chain system is now being revitalized.” [Talk about your ‘baseless assertions’, what evidence does he have of that wild-ass claim?]

While few dispute signs of recovery across much of the economy, significant debate remains on how robust and sustained it will be. The lingering effects of the financial crisis have some economists envisioning a long stretch of sluggish growth. [Sadly, what passes for our economy has shrunk so much that the few examples provided here probably do cover the bulk of it. This in itself is a terrifying admission, yet it is not what the MSM is saying, is it? Where are the real reporters when we need them?]

But recent months have delivered a stream of news bolstering the notion of a more vigorous recovery. Technology companies have racked up substantial sales. After a decade of painful decline, manufacturing is tentatively adding jobs. Retail sales increased by 9.1 percent in March at established stores compared with a year earlier, according to Thomson Reuters, marking the seventh consecutive month of growth. Exports swelled in the first two months of the year by nearly 15 percent compared with a year earlier, according to the Commerce Department. [Sadly good citizen, it is not…unusual for the media to, ‘misstate’ economic data…these percentages likely represent more than meets the eye, like the ravages of ‘deflation’ which looks remarkably like inflation in an economy that no longer produces what it consumes.]

Still, much of the improvement appears the result of the nearly $800 billion government stimulus program. As that package is largely exhausted late this year, further expansion may hinge on whether consumers keep spending. That probably depends on the job market, which remains weak.

“The recovery is under way, and it’s better than expected, but it hasn’t become self-sustaining because the job market hasn’t developed yet,” said Mark Zandi, chief economist at Moody’s Economy.com. “I don’t think we’re there yet.” [So what is it good citizen, is this a ‘recovery’ or isn’t it? It seems, despite the ‘irrational exuberance’, the jury is still out…]

In a sign of the anxieties still gnawing at households, the University of Michigan Consumer Sentiment Index this month plunged to a preliminary level of 69.5 compared with 73.6 in March. [Honestly good citizen it is difficult to imagine ‘consumer sentiment’ being very high out there in the middle of the ‘economic desert’…sometimes it seems like they pull these polls out of thin air, ‘shaping them to fit’ the job of manipulating public perception…]

Still, even that number represented a substantial gain over the record low of 55.3 reached in November 2008. And many economists dismiss such surveys as indicative of what people think, as opposed to what they do.

What they are doing increasingly is shopping. [Again, that’s not what the sales tax data tells us! Talk about ‘thin’, later on this article takes us to a Porche dealership, like we all have a couple collecting dust in our driveways…as ‘evidence’ of the ‘economic recovery’…]

“I’m certainly interested in spending now that the stock market seems so relaxed,” said Dan Schrenk, an information technology consultant, as he stood outside a Best Buy store in the Portland suburb of Beaverton. [Real intellectual giant, that Dan is!]

Last year, Mr. Schrenk’s income declined as local companies put off servicing computer systems. He and his wife cut back on dinners out and purchases. [While hundreds of Dan’s neighbors gave up living indoors and eating regularly altogether after their jobs were outsourced!]

But in recent weeks, Mr. Schrenk’s stock portfolio has expanded. He has picked up five new clients. [What ‘A’ has to do with ‘B’ is and likely will remain, a mystery…]

“I’m feeling very optimistic,” he said. “People are just far more interested in spending money.” [Isn’t that the whole ‘point’ of money, Dan? But you are the clever one, aren’t you?]

So, there he was, shopping for an iPad.

On the other side of the country, at the Garden State Plaza mall in Paramus, N.J., Marie Bauer, who sells clothing for a living, was feeling similarly emboldened. [This is Classic…this is the entire economic recovery in a fucking nutshell!]

“I’m working more now,” she said. “I bought myself a watch.” [Anyone want to bet its NOT a fucking Rolex?]

As John D. Morris, a retail analyst with BMO Capital Markets, wandered past stores like Gap and J. Crew on his weekly “mall check,” he spotted large numbers of women 25 to 45 years of age — prime earning years. [It would be far more interesting if John shared ‘why’ the women were there…perhaps more interesting is why he chooses to spend his free time ‘cruising the malls’…is he trying to pick up 12 year olds?

“The mainstay of the mall is back,” he said. “That’s your signal that we’re in a more meaningful recovery with staying power.” [Um, what is missing here is a number…does more than a single customer constitute an economic recovery…or were there ‘too many to count’? In which case mall security has a little problem on its hands…doesn’t it? People are still broke and John has pointed to nothing that proves these females weren’t simply window shopping on a nice spring day…it’s the sales tax data that is calling John a LIAR…or a moron, take your pick.]

A year ago, Columbia Sportswear, the Portland-based apparel brand, was turning away some retail customers whose finances seemed worrisome. Now, Columbia has one of its largest order backlogs.

“People saw that the world didn’t come to an end,” said Timothy P. Boyle, Columbia’s president and chief executive. “Maybe they just said, ‘Hey, I can at least spend a little bit of money.’ ” [Because ‘a little bit’ of money is all they have…and their underwear looks like Swiss cheese…but what the heck, nobody sees your underwear.]

Spending power has been enhanced by a monumental reduction in household debt, which has shrunk by about $600 billion since the fall of 2008, according to Equifax credit data analyzed by Economy.com. That amounts to about $6,300 a household. [Um, first, WTF! Second, it is far more likely evidence of a change in ‘household income allocation’, which is what happens when YOU STOP PAYING YOUR MORTGAGE!]

“Household deleveraging [This is a ‘different’ way of looking at it!] is clearing the decks for better consumer spending going forward,” said Mr. Zandi. Still, some economists note that many consumers are reaching into savings to finance spending, suggesting consumption could run out of fuel. [This is ‘double-speak’ for people will eventually be forced to pay for lodging once more, drying up this source of, er, ‘extra income’. Oh, another big, er, mis-statement…paying down your credit cards is NOT the same as ‘savings’, even if these nitwit economists are unable to distinguish between the two…]

“Look at employment and income,” said Brian Bethune, chief United States financial economist at the economic analysis firm, IHS Global Insight. “It’s glacial. If we don’t get strong growth in employment and income, we’re really just building this up as a house of cards.” [Um, we’re well beyond the ‘house of cards’ stage, this entire article falls neatly into the ‘Shoveling shit against the wall, hoping some of it sticks’ phase of the game.]

The American savings rate climbed during the recession but has recently fallen. Among households in the top fifth of American incomes — those earning $98,000 a year and up — the savings rate dropped to 2 percent of income in the first half of 2007 and then spiked above 14 percent by the middle of 2008, according to an analysis of Federal Reserve data by Economy.com. By the end of last year, the savings rate of this group had slipped back to 3.5 percent. [Um, Bubba…you can’t judge the whole economy on just the top 20%, the other 80% are drowning here…but that’s the ‘new normal’ for ya…]

Since the end of World War II, the first year after a recession tends to feature growth at roughly twice the pace of the decline during the downturn, implying a current pace exceeding 7 percent. Yet even optimistic economists assume the economy is growing at perhaps half that rate. [Why these idiots persist in comparing the current, er, ‘disaster’ with past financial crises escapes me, this time is NOTHING like any of the past events so it is beyond dumb to even try to draw parallels between them!]

“I keep calling it a half-speed recovery, not the full-speed-ahead recovery that we typically get after deep, prolonged recessions,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. [Um, Stewy, it doesn’t matter what you call it…it’s still a fucking train wreck!]

But at a Porsche dealership in downtown Los Angeles, the sales manager, Victor Ghassemi, has seen sales rise by about 5 percent in recent weeks, a trend he attributes to rising stock portfolios. [Did I tell you…what a friggin’ hoot! Um, left to our imagination is what constitutes a ‘5% rise’ in sales…are they running a special on oil changes?]

“People get tired of holding on to their money, or just sitting at home and not doing anything,” he said. “People love to shop. And you take that privilege away from somebody, it lasts about a year. Eventually, people want to come back. They want to buy new merchandise, a new product, to make them feel really good about themselves.” [Um, has the nation gone ‘insane’ or did Mr. Goodman make these comments up? Perhaps he just has a knack for picking very, er, ‘optimistic’ people to interview…’wildly’ may not be an overstatement here…]

The key question is whether this burst of consumption will prompt businesses to hire, adding paychecks needed to amplify economic growth and replace the eight million net jobs lost in the course of the recession. [Um, it’s hard to say what kind of jobs are gong to replace the lost jobs of mortgage brokers, Real Estate sales people or autoworkers…all who earned rather substantial incomes BEFORE things went to hell…maybe they can get jobs performing oil changes at their local Porche dealership?]

Optimists suggest this is already unfolding, pointing to the addition of 162,000 net jobs in March, the biggest surge of hiring in over two years. In this view, job growth amounts to a corrective after excessive layoffs during the worst of the crisis. [Um, ‘excessive’? If, as asserted here, employers laid-off too many workers, they would have been ‘recalled’ as soon as it became evident production was falling behind…]

“You didn’t fire people because you had a judicious plan about how to run your company,” said Robert Barbera, chief economist at the research and trading firm ITG. “You fired pell-mell, because you were afraid you were going to lose access to credit.” [Um, surprisingly, firms in stock market related businesses have laid-off fewer workers than one would expect. Bob’s comment is indicative of what drove lay-offs in that industry, which is heavily reliant on the availability of credit.]

Now, he argues, companies are guided by a new anxiety that demands hiring: fear of missing out on the profits of fresh growth. [This is (again) a phenomenon ‘unique’ to the stock markets that doesn’t often act the same way the ‘real economy’ does.]

Still to come, he added, is a wave of spending from American businesses.

“They are awash in cash,” Mr. Barbera said. “They’re in a position to step up spending across the board.” [Except consumer demand just isn’t there…people don’t have the money (and the ones who do already have what they want!) so there is little reason to build up inventories.]

Technology companies are already benefiting from strong consumer growth. Sales of PCs rose more than 5 percent last year, trumping analysts’ predictions of double-digit declines. [Um, this is more likely related to computers being ‘dirt cheap’…and once people have upgraded, there goes the market for another three years!]

This month, Intel, the world’s largest chip maker, reported its highest first-quarter revenue in history. Google added about 800 jobs over the first three months of this year, and Amazon has added 1,800. Intel plans to hire 1,000 to 2,000 employees this year. [Again we have ‘mis-direction’ in play…what we don’t know is ‘where’ Google or Intel is planning on adding to their workforce…and if it ain’t here, it does the US economy zero good!]

Silicon Valley is already cashing in on the return of Wall Street, as trading houses fold profits into new high-speed computer systems aimed at securing a competitive edge. [Yet another example of a net ‘bad thing’ being touted as a ‘plus’!]

Global trade holds promise. At the Port of Portland — a major shipping point for commodities harvested as far east as the Great Plains — the tonnage of goods swelled by 42 percent during the first three months of the year compared with a year earlier. Minerals like soda ash — an important industrial ingredient to make glass and detergent — increased by 93 percent. [Honest to fuck good citizen, ‘once upon a time’, before the Republican’s hijacked the government and off-shored our economy, the word ‘industrials’ in the Dow Jones actually meant something! Today the Dow is mostly financials…which doesn’t bode well for our future economic viability.]

Activity here and at ports along the Pacific coast is generating business through related industries. Rail freight traffic was up nearly 8 percent in March from a year earlier, according to the Association of American Railroads. That has bolstered revenue for Greenbrier, a Portland-based maker of rail cars that was hard hit during the recession. [Again, our railroads are a mere shadow of what they formerly were, we’re talking ‘picking fly shit out of pepper’ here.]

At Diversified Services Inc., a truck repair business in Mira Loma, Calif., general manager Dave Pilarcik is contemplating hiring, as customers put their fleets back on the road.

“For the first time in a long time,” he said, “I’ve seen a little bit more movement.” [Um, define ‘a little bit’, Dave. Are we talking the same thing as two houses last year vs. three this year, constituting a 50% improvement?]

Stephanie Rosenbloom contributed reporting from Paramus, N.J., Ashlee Vance from San Francisco, and Michael Parrish from Los Angeles.

I returned to work at the beginning of the month, got my old job back…but two guys left and I’m the only one who got ‘recalled.’

So what was once a nine-man crew is now a five-man crew…and I still have plenty of time to read.

Um, it’s hard to determine what is more disturbing, the ‘flimsiness’ of the evidence or the willingness of the MSM to mis-represent the situation for the public in exchange for a stinking paycheck?

But I’m not alone in criticizing the bought and paid for ‘corporate press’…

Here’s what Mr. Panzer has to say on yesterday’s ‘bogus’ earnings report from Caterpillar.

The Unrecovery?

According to the world's largest maker of construction equipment, the global economy is humming on all cylinders:

Caterpillar raised its prediction for world economic growth in 2010 to 3.5 percent, from 3 percent in its previous forecast. The U.S. may expand 3.5 percent while developing countries may grow more than 6 percent, the company said.

“Economic conditions are definitely improving, particularly in the world’s developing economies,” Chief Executive Officer James Owens said in the statement. “Industry activity and orders are significantly higher than last year and are at record levels in some areas.”

But is it? If you drill down into today's "better-than-expected" first-quarter results, the revenue data seems to tell a different story. Consider the following posts from two of my daily must-read blogs:

"How Could This Be A Recovery With Caterpillar Sales Like These?" (Business Insider's The Money Game)

Earlier we noted that Caterpillar's (CAT) quarterly earnings could basically be boiled down to: Asia good, America bad.

An 8-K filed later on emphasizes this point, and looking at the chart we're really perplexed as to how one might consider the US economy -- at least when it comes to the kind of earth-moving equipment that Caterpillar says -- in recovery.

Retail Sales of Machines by region for the 3-month rolling period compared with the same months of the prior year are:


Down 21% from the first three months of 2009? What's going on here?

Shorthand good citizen, Wall Street and the MSM chose to, er, ‘emphasize’ Cat’s Asian performance and ignore the bloodshed both domestically and around the globe as well.

So, how does yesterday’s ‘Happy Talk’ from the NY Times look now?

But wait, we aren’t done…here are ‘words of warning’ from our favorite trader, Jesse of Crossroads CafĂ© fame:

SP Futures Daily Chart

The Federal Reserve and the Administration seem intent on creating another bubble, or rather reflating an old one in US dollar heavy financial assets, in order to prolong the mother of all bubbles, the credit in US dollars bubble.

They are doing it selectively, with the banks carefully apportioning the excess liquidity into financial assets held by a relatively fewer amount of Americans who own stocks, while savers are heavily penalized.

When the credit bubble begins to totter things will become quite chaotic, and the panic this next time around may be terrific, dwarfing that so-easily forgotten repentance and regret of 2007-8. More than panic: hysteria.

I think it is now too late for a real reform. The Democrats have squandered their mandate from the people, and the Republicans are crony capitalists marching in lock step with the Banks, who seem to be in control once again. But I could be mistaken, and would be glad if I am.

When the US dollar and economy roll over it will make quite a wave that will swamp many boats. But these things take time. Once they start to happen, it moves slowly at first, but then gains a momentum and becomes almost unstoppable.

I am not quite sure how much water the USS Leviathan has already taken on, and how big the hole might be. But I firmly believe that the iceberg has been struck, the damage done, and the process has begun. The lifeboats are being quietly provisioned and reservations taken for the officers and crew, and the upper decks.

Again, these things take time, and there is always hope until the end. But there is less and less that can be done as the process continues to unfold, with no serious repairs, and only distractions for the passengers, and encouragingly false announcements, from the bridge.

Don't feed the sharks. Wait for this to break support and trend.

Methinks we will witness a massive ‘sell in May then go away’ this year…and what a ‘sell off’ it will be! What’s going to puzzle the media is who the fuck is buying all of this overvalued dreck…and the answer will be, basically, nobody…because you, the taxpayer, are (finally) tapped out.

Jesse uses the term ‘hysteria’…let me put that into context for you. Imagine walking into a store and nothing on the shelf has a price on it. You look at the entrance and notice a sign that explains this ‘new’ phenomenon. Everything is priced at the moment of sale…the merchant has been advised that ‘replacement costs’ are rising by the minute as supply lines collapse everywhere.

Nobody knows where they can get their hands on replacement merchandise or how much the replacements will cost…so they have no idea what to sell their ‘on hand’ inventory for…

Um, to make it more interesting…you have an ‘urgent’ need for some diapers and aren’t in the mood to be dicked around, (especially since people are starting to freak out over the pricing thing.) Gasoline is selling for $20 a gallon (because nobody knows where the next load is coming from.)

You don’t want to hang around in the open any longer than necessary…the pricing thing has caused people to become desperate and gunmen are grabbing people off the street and forcing them to empty their bank accounts at the nearest ATM.

The guy at the cash register has a gun…are you ready to die for a package of disposable diapers?

Not for the last time do you wonder where all of the cops are? You’d think they’d be ‘busy’ but you’d be mistaken…the cops are ‘hiding’. Engaging in gunfights with crazy people isn’t part of their job description, especially when the crazy people outnumber them.

Sort of redefines the term ‘Yo-Yo’, doesn’t it?

Understand good citizen, that is just a ‘taste’ of things to come…it gets a lot ‘crazier’ depending on who is holding the gun.

Thanks for letting me inside your head,


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