Chutzpah!

Greetings good citizen,

Time to spend one of my ten NY Times ‘freebies’ for the month, if only because the story itself makes my blood boil.

Um, let me digress for a moment as we take a quick look at the decidedly disturbing phenomenon I’ve pointed to several times before and that is the Opening bell at the NYSE and the ‘miraculous’ recovery of global stock markets…

Fucking criminals!

You’d have to be blind not to see it. Opening bell in New York and stock markets around the globe go straight up…and this is AFTER J.P. Morgan announces a $2 BILLION dollar trading ‘loss’.

WTF!

Remember good citizen, the only thing the stock markets tells us today is how rich the already wealthy have decided to make themselves AT OUR EXPENSE!

Higher stock prices for them mean higher prices for us! (Worse, the nearly wiped out ‘real economy’ can’t take much more of this!)

Let us proceed with that which should shame us all

The evidence is easy to spot. An American company, Element Electronics, for example, has made flat-screen televisions for years at a factory in China but is now expanding in America. It recently opened a factory near Detroit that is producing the first televisions made in the United States by any company in years.

At General Electric, local tax breaks and a concessionary union contract contributed to G.E.’s decision to manufacture its latest electric water heater in Louisville, Ky. — instead of in China. Similarly, the Otis Elevator Company is moving production to a new factory in Florence, S.C., from a plant in Nogales, Mexico, and Master Lock has switched the manufacture of combination locks back to Milwaukee from China.

At P.A.M.A. Furniture, in Jamestown, N.C., the owning Pennisi family has begun to manufacture upholstered chairs and sofas “from scratch,” according to Anthony Pennisi, a vice president.

Until recently, the Pennisis imported chair frames from Italy and Indonesia, and finished them at the family’s Jamestown factory. Manufacturing everything here is more expensive, Mr. Pennisi said, and he has asked for government help. “I think we are a prime example of a small manufacturer producing a Made-in-America product and trying to survive,” he said.

This nation has become a HUGE economic desert…but it wasn’t always so.

Worse, a whole generation has grown up thinking Japanese cars are the best and imported anything was superior to domestic everything…

NOW, the very same fuckers responsible for putting the United States productive capacity on a barge for points unknown are back, crying for MORE government subsidies!

And guess where our witless politicians will carve these ‘lifelines’ from?

From our fucking social security!

Burn them! Burn them to the fucking ground!

Our civilization cannot tolerate this ceaseless onslaught from those already so rich they CAN’T spend it productively anymore!

Burn their factories and HANG their politicians!

OR we could just slap their little wrists and tell them to cut the shit…but you know what they’ll do then, don’t you?

They’ll declare WAR on us (and hijack our own military to fight it for them!)

So we’re back to burn their factories and hang their politicians…and anyone else stupid enough to stick their heads above ground!

Enough is enough, good citizen!

These people need ‘subsidies’ like the rest of us need an extra hole in our heads…something THEIR bought and paid for politicians would gladly provide for us, free of charge!

Somehow ‘dead constituents’ are so much easier to answer to…

(And it’s not like the fuckers haven’t killed off a bunch of us without really trying!)

Look a little closer at ‘stop loss’ and the ‘left-handed draft’ created by the economic desert these fuckers are responsible for!

Now they have the chutzpah to return to the US and, er, ‘ask’ for ‘subsidies’?

You know what the definition of chutzpah is, don’t you?

It is when somebody murders their own parents them petitions the court for mercy because they are suddenly ‘orphaned’…

Same thing!

And, as I point out above, where do you suppose our ‘out of control’ politicians are going to fund these ‘subsidies’ from?

They will continue to ‘cannibalize’ what’s left of the social safety net…never once being asked to explain why a Chinese dollar will buy four times what an American dollar will yet one American dollar will still buy SIX Chinese dollars!

WTF!

In the meantime, good citizen, all (except the mom & pop furniture maker at the bottom of the list) are all fortune one hundred companies that pay virtually zero taxes!

Um, dunno about the electronic company but you can bet their ‘parent company’ is globally ranked.

Which is to point out (AGAIN) that the individuals who run these companies ALREADY HAVE more than they can rationally spend…so we’re subsidizing them, why?

Oh how sad is it good citizen that I find myself ‘bitching’ when our overlords (having read the handwriting on the ‘energy wall’) are trying to sneak back into a market they cruelly abandoned decades ago?

Yeah that’s me…a crank who is never satisfied!

Thanks for letting me inside your head,

Gegner

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

Doomsday, revisited.

Greetings good citizen,

Well, if yesterday was Yea, you know what today is. First the Fed sounds the ‘all clear’ and today, lo and behold, we find retail sales in the dumper! Isn’t this the ‘polar opposite’ of yesterday’s analysis of increased imports? (Which drove the markets up 120 points)

Anyway, here’s a link to today’s fiasco. The consumer is back all right, back where we last saw them, broken and bleeding under the wheels of the bus! What do you suppose accounts for the ‘uptick’ in imports? We’re four months away from what major holiday? Ho,ho,ho!

It’s time once gain to shift mental gears as we arrive at tonight’s offering for a ‘top down’ view of the still unfolding disaster.

[Hat tip: The Automatic Earth]

Doomsday -- pros and cons

Arnaud de Borchgrave

Two major entrepreneurial tycoons, in the multibillion-dollar league, with worldwide interests, speaking not for attribution, agree that the worst is yet to come. America and the rest of the world has to reinvent itself for the 21st century, but this won't happen before another big credit-rattling shock. Millions of jobs are not coming back, they said.

They were speaking about the current global financial and economic crisis. Another humongous credit crunch is on the way, they believe, and the current optimism is simply a pause before another major downward slide. Unemployment, they forecast, will climb from the low to the high teens. A pledge to limit tax increases to those making more than $250,000 a year is a pipe dream. Someone has to pay the health piper. Major social dislocations are on their horizon for 2010.

One of the interlocutors has shunned all manner of stocks in favor of discounted corporate bonds that yield 7 1/2 percent, and gold. The other has already moved all his financial holdings into a cocktail of Asian currencies based at a new entity he created in Singapore.

"We are roughly where Britain was in 1968," said one. That year Prime Minister Harold Wilson decided to abandon all of Great Britain's obligations east of Suez. That included the entire Persian Gulf, from Oman to Kuwait, the Strait of Hormuz, British special agents in all the emirates and sheikhdoms, local constabularies with British officers, the fabled Trucial Oman Scouts (TOS) -- all for the bargain basement cost of $40 million a year.

As the British and other colonial empires faded into history, America's global empire grew topsy-turvy and since the collapse of the Soviet empire in 1989, its power grew unchallenged. The two tycoons, who did not wish to be quoted, agreed with a rapidly growing segment of the U.S. population that says America can no longer afford the astronomic costs of empire.

With more than 2.5 million U.S. military personnel serving across the planet and 737 military bases spread across each continent, and 3,800 installations in the United States, a reassessment of roles and missions is long overdue. The estimated $1 trillion in overdue infrastructure repairs and modernization strikes many as an overdue priority.

The 2010 defense budget is a shade shy of $700 billion, more than two-thirds of a trillion dollars, which now tops the rest of the world -- including major players Britain, France, Germany, Japan, Russia, China, India -- put together. Add all the defense expenditures neatly tucked into the budgets for Energy, State, Treasury, Veterans Affairs, and 16 intelligence agencies, and the numbers top $1 trillion.

With only 5 percent of the world's population, it is still remarkable that the United States can maintain global military superiority on less than 5 percent of gross domestic product. But from the world's biggest creditor, the United States has become the world's largest debtor, coupled with a rapid decline of a manufacturing sector once hailed as the arsenal of democracy and an annual per capita trade deficit of $2,000 per citizen.

U.S. share of global output continues to decline from year to year. Like General Motors Corp. and Ford, the United States has yielded share of the global market from one-third at the turn of the new century to one-quarter today. Was the rise of the rest the decline of the West?

Have U.S. commitments and responsibilities outstripped resources? The two anonymous billionaire voices were among the many now saying so in public opinion polls. They feel a paradigm shift is inevitable. We are yet to wean ourselves from the old paradigm: the $3 billion we borrow each and every day -- principally from China -- to maintain the world's highest standard of living, based on conspicuous consumption, by a few at a time of growing world shortages. And when we are finally weaned, it will become glaringly obvious that these few we were living way beyond their our means and that major belt-tightening is long overdue.

In his projections through 2025, Thomas Fingar, the former chief analyst for the 100,000-strong U.S. intelligence network, which includes 16 agencies with a budget of $50 billion, predicted the international system would be transformed over the next 15 years as dramatically as it was after World War II. As China rises to global prominence, the United States would be declining. "In terms of size, speed and directional flow," wrote Mr. Fingar, "the transfer of global wealth and economic power now under way -- from West to East -- is without precedent in modern history." [which is to say that ‘globalization’ equals ‘treason’.]

Following Mr. Fingar's analysis, former deputy Treasury Secretary Robert Altman wrote in Foreign Affairs, the official organ of the Council on Foreign Relations, that the current financial crisis is "a major geopolitical setback for the U.S. and Europe" that could only accelerate trends that are moving the global center of gravity to China. And this is something that a staggering $1 trillion for defense (in a budget with a projected $2 trillion federal deficit) would be powerless to reverse.

The pessimistic outlook should, of course, be tempered by the fact that IBM spins off more technology patents in a typical year than all of China. Three-quarters of the world's top universities are in America. So any loss of influence is at this stage attributable to reckless profligacy at every level of American society, beginning with the federal government and the mind-numbing bonuses that Wall Street's "Masters of the Universe," as Tom Wolfe called them in his 1987 best-seller "Bonfire of the Vanities," have lavished on themselves Roman Empire-style. [While we ‘peons’ merely struggle to survive…]

Both global entrepreneurs mentioned at the beginning of this column believe Israel will resolve its existential crisis by bombing Iran's key nuclear facilities later this year. One thought Gulf Arabs would be secretly delighted and that Iran's much vaunted asymmetrical retaliatory capabilities would fizzle as the theocracy imploded. The other could see mayhem up and down the Gulf, the Strait of Hormuz closed, and oil at $300 per barrel.

As I commented in the beginning, here we have the ‘top down’ view of the current crisis. Isn’t it amazing that each ‘strata’ of society considers itself the penultimate ‘every-man’?

Yes, good citizen, the rich blame the peasants for driving up the price of real estate to irrational levels so we could keep drawing upon the ‘magical manna’ of ‘home equity’.

No, no, free money had nothing to do with it! Nor did the fact that most of us hadn’t received a raise that outpaced inflation in over two decades have any bearing on the matter either.

It’s all one big ‘misunderstanding’, isn’t it? If we’d all managed to behave ‘rationally’, none of this would have happened.

So it appears that our ‘tycoons’ have decided to ‘follow the sun’ (and ‘the empire’) as it drifts Eastward…the rest of us are ‘scroomed’.

Correct me if I’m wrong but wasn’t the original revolution intended to free us from these ‘foreign entanglements’? I think we need to ‘try again’.

Thanks for letting me inside your head,

Gegner