Tuesday, May 11, 2010

On and on it goes...

Greetings good citizen,

Seeing old friends can be like chicken soup for the soul! There will be a minimum of commentary today as I have less time than usual due to the aforementioned ‘visit’.

We start off this evening’s first offering with the question, “What’s wrong with this picture?”

Food stamp tally nears 40 million, sets record

Fri May 7, 1:28 pm ET

WASHINGTON (Reuters) – Nearly 40 million Americans received food stamps -- the latest in an ever-higher string of record enrollment that dates from December 2008 and the U.S. recession, according to a government update.

Food stamps are the primary federal anti-hunger program, helping poor people buy food. Enrollment is highest during times of economic distress. The jobless rate was 9.9 percent, the government said on Friday.

The Agriculture Department said 39.68 million people, or 1 in 8 Americans, were enrolled for food stamps during February, an increase of 260,000 from January. USDA updated its figures on Wednesday.

"This is the highest share of the U.S. population on SNAP/food stamps," said the anti-hunger group Food Research and Action Center, using the new name for food stamps, Supplemental Nutrition Assistance Program (SNAP). "Research suggests that one in three eligible people are not receiving ... benefits."

Enrollment has set a record each month since reaching 31.78 million in December 2008. USDA estimates enrollment will average 40.5 million people this fiscal year, which ends Sept 30, at a cost of up to $59 billion. For fiscal 2011, average enrollment is forecast for 43.3 million people.

What’s the ‘bad news’ here good citizen? 40 Million US families currently on some kind of food assistance program is certainly bad enough but it is estimated that 60 Million are eligible for benefits! A goodly majority of the absent 20 million would rather eat canned pet food than accept any kind of ‘government assistance’. This leaves us to wonder if this isn’t more a ‘stupidity issue’ than one of the brazen unfairness of our system of commerce?

Until people stand up to the greedy mo’fo’s who intentionally underpay them (because the difference goes directly into their own pocket) This ‘bullshit’ rape of the working class (who comprise a goodly percentage of that 60 million) will continue unabated.

Here’s yet another example of how screwed up and predatory things have become!

Same Job, Less Pay: Employees Learn to Swallow Their Demotions

Three years ago [more like thirty!], employees were being rewarded for their years of loyalty to a particular company with raises, promotions and increasing amounts of paid leave. Today, those workers who are lucky enough to avoid being laid off are rewarded for their years of service with big pay cuts and spikes in the cost of their health care. [YOU WIN< you get to come back again tomorrow and work harder for less pay…and if you don’t like it, tough! There’s a line out the door of idiots just begging for the chance to be boned by us! Hope you like your next job better!]

"My company didn't eliminate my job, they just eliminated my salary," wrote marketing creative director Mike Cheaure in an email to HuffPost. "I was back at work as a freelancer the next day working at 1/4 the pay and no benefits."

Cheaure, 45, said that after losing his health benefits, he had to borrow $32,000 out of his 401K and drain his savings to pay for his autistic son's therapy.

"For us, the American dream is gone," he said. "Now it’s just getting by. College? Retirement? House equity? Security? Gone."

Michael Giannini, 52, is in a similar boat. He says he has been working for a regional transit company for almost 23 years and was promoted to transportation supervisor in 2003, a management position with a 4-day, 10-hour-a-day schedule that allowed him to help his wife with her real estate business part-time. But this year, he said, his paid leave was taken away, his salary was frozen for another four years, his health insurance plan became more expensive and he was required to take at least 15 unpaid furlough days this year, which amounts to a $7,500 salary cut.

Adding insult to injury, when the housing market turned, his wife Roseann says she went from making about $35,000 a year as a real estate agent to bringing in only $16,000 in 2009. After nurturing their careers for over 20 years and and purchasing a home together in Rocklin, California, the Gianninis found themselves filing for bankruptcy in a last-ditch attempt to save their house.

"Money was getting tighter and tighter, and I was paying everything on my own and it was getting almost suffocating. We decided to put our pride in our pocket and file bankruptcy." Giannini said. "I know that a lot of people have it much worse, so I shouldn't complain. But I never expected to file bankruptcy in my lifetime. We had good credit, I've been super responsible, I've never been late on a bill payment. It just makes me ashamed and embarrassed to have to go through that."

Geez, good citizen…if you can’t live on less, it’s not their problem, it’s yours! If you don’t like it, quit! They double-dog dare ya! (Because they know nobody else is hiring…and if you’re over 40, you’re really not going anywhere, no one else wants ya!)

Just because they don’t pay us in yuan doesn’t mean that they haven’t adopted their ‘management practices!’ Practices that were developed right here in the US of A!

Yes, it sort of redefines the term ‘capitalist prick’…

May 10 2010: The real systemic risk

Ilargi: I think I’ve managed to tie together the Euro "rebirth", UK PM Gordon Brown's resignation and the Gulf oil wank. And it goes beyond stating that they’re all ugly.

Both Brown's decision to quit and the EU's decision to move to quantitative easing come way too late. Moreover, both are, were, always would be and always will be, the worst possible options available.

The EU should at the every least have done their trillion dollar deal at the same time the US did it, not some 12-18 months later. What are they thinking? But by the same token, the US deal has been a miserable failure, and so will the EU one, only, inevitably, because of the time delay involved, a worse one. While the US $trillions bought the world about a year of hologrammic hallucinations of green pastures in better times to come, the EU plan will be lucky if its "positive" effect lasts a month. Or even a week. Talk about bang for your buck.

Since everyone and their pet parrot was shorting everything they could lay their hands on with their eyes closed last week, on Monday European stocks went up 5-6 even 10%, and Wall Street a still jubilant 4%. Nothing rose more than European financials, of course, because the $1 trillion plan proudly announced by a bunch of "leaders" who neither speak each other's languages nor can stand the sight of one another unless there’s political gain to be had was and is about those financial institutions all the way.

So what about tomorrow?

Under the pretense of saving the world itself, and perhaps because at least some of them actually think it's one and the same thing, it's all about propping money into European banks. And not just the Eurozone banks either, as can be seen in the numbers: the biggest gains on Wall Street today were for UK banks: Barclays up 16.18%, Lloyd’s: 13.95%, and RBS: 15.15%. [That is perhaps the most disturbing factor about this whole ‘economic recovery’, it has been principally confined to the financial sector (and is mostly due to creative accounting!)]

The much heralded (if only for a day) European plan serves not to save countries and solve their deficits, it serves instead to save the banks that are exposed to these countries' debt. Every European citizen -and, through the IMF, Americans and Canadians (and all the other IMF "constituents")-, pay to 'save' Deutsche Bank, Société Générale, Crédit Agricole, and all the rest of them from having to fess up and pay up their gambling losses. We heard that tale before.

And if there were only a reasonably chance of such a scheme succeeding, I would understand to a certain -albeit low- degree why Europe's democratically elected dimmer switches are creating this tragedy, which is much bigger than they could ever dream to be. But there's no such chance, none.

European "leaders", like their US counterparts, are -or pretend to be- under the illusion that to save their economy they have to fork over truckloads of taxpayer money in order to preserve the very institutions that played instrumental parts in causing that very crisis. The argument used to defend this kind of policy measure is encapsulated in the term "systemic risk".

But, if you take a second or two to think about it, that is a fake argument.

The real, the main, the major systemic risk is not in the banking or even the economic system. It’s in the political system. And neither of them can or will eventually be saved.

The real systemic risk lies in the fact that politicians the world around operate on the premise that if they don't rock the cradle of the banking herd too hard, they'll survive to receive another round of hand outs and serve another term. And another. That and most of them are absolutely clueless when it comes to the field they’re supposed to oversee and regulate. And the only people who can tell them how and what are the lobbyists who work for the very parties they’re there to regulate.

That is real systemic risk. The kind that would affect you yourself. The political system versus the economic system. And they have become hard to tell apart, because they serve the same purpose.

The link to the oil disaster? Halliburton poured cement into "the hole" based on depth information they received from BP. Turned out, the problem was way deeper, and the pressure, therefore, was way stronger. And then it all blew.

What better metaphor for all of you to understand what’s going on in the marketplace today? The EU pours $1 trillion down the hole, but the hole is far deeper than anyone seems to realize. Perfect metaphor.

The markets in the days to come? Volatility rules. While all the stock exchanges had their lofty gains, the euro was at $1.2752 Friday afternoon, and it’s at $1.2757 right now. Does this require any further explanation? We're counting down the days, weeks, maybe months.

Volatility, chaos, what’s next? Mayhem?!

What they’re trying to tell you without coming out and saying it is we have reached the end of he ‘charade’, the pretending that the banking system has been ‘saved’ is over...and now there will be hell to pay!

If you have ever wondered what a ‘cascading systemic collapse’ would look like, pay attention because it will be very, er, ‘instructive’.

It really is ‘simple’ when you think about it. All commerce relies on ‘cash-flow and forbearance’. They need their customers to pay them promptly and their creditors to be patient…

The ‘tragedy’ unfolding in Europe is a ‘tip of the iceberg’ event that has the potential to ‘chain react’ around the world…especially a world that operates on the principle of “you’ll get yours once I get mine!”

If we add in the ‘penalties’ most vendors charge for late payments…and some of these payments are already quite late, the ‘profit’ in some of these transactions completely disappears! The deal was bid on the premise that payment from the end user would be prompt…when that doesn’t happen, many enterprises don’t have deep enough pockets to float for very long…and the ‘sharks’ (read lawyers) start circling, then the ‘fees’ really start to pile up!

Suddenly the legal bill is larger than what you originally owed…but not to worry, lawyers only pursue this kind of claim if the assets are there. If there is no possibility of collecting, they drop it pretty quick. That’s why bankruptcy can be such a useful tool. You’re there one minute and you’re gone the next!

Imagine what would happen if this ‘chain’ of payments ‘seized up’. It takes months, if not years to get a lawsuit in front of a judge and that carries no guarantee you’ll ever be paid!

So what do you do?

The only thing you can do, you wait…hoping those that owe you have enough left over to pay you, so you can pay those you owe…

Well, the housing market (with its NINE YEARS WORTH OF OVERHANG) tells us the story.

How many of you honestly believe there is going to be enough good paying jobs created in the domestic economy…hell, actually anywhere on the planet, for anyone to ever sell a property for more than they owe on it?

No buyers means no sales. Even if you did find a ‘sucker’ willing to pay you more than you owe on a property, you’d be hard pressed to find a bank willing to take the risk.

In fact, if it weren’t for the GSE’s, the entire real estate market would be ‘frozen solid’.

Um, at the end of the day good citizen, it’s all connected!

Thanks for letting me inside your head,


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