Tard-y

Greetings good citizen,

Sorry for the tardy post, dealing with a frustrating problem with my vehicle, spent some serious dollars and it’s still not fixed.

Must not be looking at the correct factors…and trying to get information out of a dealer is futile.

Not that it particularly matters. Won’t need a vehicle after the shit flies and neither will pretty much anyone else.

What shit is that good citizen?

How about trying on a cascading systemic collapse for size:

China Confronts Mounting Piles of Unsold Goods
By KEITH BRADSHER

The severity of the country’s inventory surplus has been masked by the blocking or adjusting of economic data by the government.

Graphic: Chinese Sales Lag
Manufacturing in China Slows

No surprise here good citizen, even the stock markets tanked mightily today in reaction to this economic hard landing.

No customers has a way of causing these ‘gridlock’ situations.

Piles of finished goods nobody can purchase because they lost their jobs to offshoring…

This is ‘why’ the government (used to) protect the rest of society from monopolies

I think it is a valid question to ask why it no longer does…

But look at what’s coming after November’s ‘theft’:

News Analysis
Mitt Romney campaigned on Thursday in Hobbs, N.M., discussing his energy plan at Watson Truck and Supply.
Giving Reins to the States Over Drilling
By ERIC LIPTON and CLIFFORD KRAUSS 9:10 PM ET

Mitt Romney is proposing to end a century of federal control over oil and gas drilling and coal mining on government lands to court western voters and supporters from the energy industry.

Energy is sold on the ‘world market’ meaning no matter where it is found, the price per barrel is set on the ‘open market’ and it ‘doesn’t matter’ if you pumped it yourself, the retailers are going to mark it up to the current price per gallon regardless.

Thus is Willard’s plans for ‘energy independence’ full of shit!

In case you’re wondering (or are just plain absolutely stupid) the reason why energy continues to climb steadily is because the numbers of end users keeps growing!

It also reflects the fact that modern life itself is very ‘energy centric’ you use a lot of energy living a ‘western lifestyle’.

So what’s the Mittster really up to? He’s going to make all of the GOP wannabes sell the oil rights (even if there’s no oil) in all fifty states.

And in many cases this will be a massive fraud…but that’s okay, the justice system is already FUBAR! So none of these politicians will be ‘prosecuted’ for selling what isn’t theirs.

And why does the Mittster want energy independence (that is completely unachievable under capitalism?)

The first 2013 Cadillac ATS left the line at G.M.’s Lansing Grand River assembly plant in Michigan on July 26.
G.M. Has High Hopes for New, Smaller Cadillac
By BILL VLASIC 9:14 PM ET

Three years after General Motors hobbled out of bankruptcy, it is betting that the new Cadillac ATS will become a global contender in luxury cars.

Rapidly vanishing from the global scene is the American Success story…probably why GM is headed back towards bankruptcy.

Apparently they can’t build a car that competes with the Japanese (for monopolistic reasons, they’ve already promised the Japanese our domestic business in exchange for being the ‘guinea pig’ for the bankrupting of western civilization.)

Mind you, ‘the deal’ is between their one percent and ours so everybody else is ‘scroomed’.

Until we start stringing up the one percent from the nearest lamp posts…

Bullshit says you…

You got a better explanation?

What you capitalist attack dogs don’t understand is you’re asking everybody else to commit suicide for your inability to comprehend the mechanics of rampant monopolism!

And naturally, you see nothing ‘wrong’ with this situation:

The company is trying to find ways to show lucrative ads to mobile users without cluttering up their hand-held screens and driving them away in frustration.

Bits Blog: Facebook Speeds Up iPhone and iPad Apps | Deal Will Allow One-Tap Purchases Through Facebook

Let me once again thank my lucky stars that I don’t have a facebook account!

How do such bright people keep coming up with such idiotic ideas?

Could it be because they aren’t particularly bright?

Facebook is proof of the dearth of investment opportunities.

And what we have here is the end result of the ‘death of creativity’:

Economix Blog
Big Income Losses for Those Near Retirement
By CATHERINE RAMPELL 7:25 PM ET

The typical American between the ages of 55 and 64 has a household income almost 10 percent less than it was when the recovery began three years ago.

And this is shocking, why?

Talk about a generation of people who have had the rug pulled out from underneath them and they think the conservatives are the best thing to come along since sliced bread…

Because those worthless assholes really know how to ‘stand up for themselves’.

Which is to say I find it deeply disturbing that reasonably nice people support an ideology that is destroying their way of life.

Leading us back to the old saying, “Stupid is permanent, ignorance can be fixed.”

Thanks for letting me inside your head,

Gegner

Useless

Greetings good citizen,

It appears to be one of those days when you find yourself wondering when, precisely, the world turned into a lunatic asylum?

We already know that the repeal of Glass-Steagal was a horrendous mistake made that much more horrific by the fact that it remains unrectified!

But that aside, do they seriously expect us to believe they can bend the financial system back into working condition again (even if they erase ALL of the rules?)

In a sidebar one of the ads on my homepage is for the over the counter medication Lunesta…which is for insomnia if you aren’t familiar with the floating green butterfly in the ads.

And I found myself wondering just how many financial professionals were buying this stuff wholesale in the industrial strength, 55 gallon drum?

Because the global banking system is one stiff breeze away from collapsing

I excerpted this particular portion of the otherwise meaningless article for a reason…

That reason should hit you right in the eye:

He was so well regarded by the administration that the White House chief of staff, Rahm Emanuel, was even tapped to appear at the bank’s board meeting back in 2009 before the appearance was scuttled. More recently, Mr. Dimon has visited Washington numerous times, seeing both allies and sparring partners like Representative Barney Frank.

Now, though, Mr. Dimon’s reputation and possibly his influence have been cut down to size.

The trading loss disclosed late Thursday is a rare misstep by a man who prides himself on having his fingers on the pulse of his 270,000-employee company, and it suggests his vaunted confidence edged toward hubris.

So, what hits YOU in the eye, good citizen?

Is it that really BIG number in an industry that doesn’t produce an actual product?

Despite the, er, ‘profits’ credited to the financial sector, they don’t ‘produce’ any, zero, zip, nada of what we like to call ‘wealth’.

Or, more practically, the problem rests with the inability of the ‘real economy’ to cover the (blank) checks the financial sector keeps writing…

So we find ourselves in a pretty much endless game of ‘extend and pretend’.

I say pretty much endless because it will have to end…someday.

And, ironically enough, we already know when that ‘someday’ will be. It will be the day they go to buy the fuel to send the tractors out into the field and learn that their accounts are over drawn.

Which will mark the beginning of a ‘cascading systemic collapse’.

The tractors don’t go out and plant the crops so there’s nothing to harvest and nothing to harvest means there’s nothing to eat…and then the real fun begins as the desperate start looking for something (preferably meaty) to stick in their hungry mouths.

And the Hollywood’s perverse fixation on flesh eating zombies starts to make sense…

For these aren’t the ‘undead’ they are the nearly dead, preying on the ‘better off dead’ while the (well-fed) criminals watch the drama play out.

Hell, these ghouls even have Blackwater on speed dial, ready to airlift them out of their compounds if things get ‘too hot’ locally.

But let’s return for a moment to the 270,000 JP Morgan Chase employees.

Now we aren’t talking 7-11 here where the bulk of the payroll is part time minimum wage. Nor are we looking at a major auto manufacturer, where the product itself is getting priced to a smaller and smaller audience.

Which is to point out that the ‘average person’ soon won’t be able to afford to drive.

Have you ever stopped for a moment and considered what the ‘economy’ would look like then (especially if we are still groaning under the yoke of ‘fuck you pay me,’ capitalism?)

Now there’s no excuse for it because yes, good citizen…there IS a ‘better way’!

There is NO LACK of things that NEED doing…so there will be no shortage of jobs, all which will pay ‘a living wage’.

In fact, we could set this plan in motion tomorrow!

But the current ‘wealthy at your expense’ crowd is opposed to it.

And yes, good citizen, now we are pointing a finger at the ‘>’ (less than) One Percent.
We could wipe them out of existence and never notice they were gone.

That is the sad part good citizen, like Jamie Dimon’s 270,000 ‘employees’, the > One percent are totally useless.

In fact, Mr. Dimons employees, like Mr. Dimon himself will have to find ‘real (productive) jobs!

But that’s okay, there’s no shortage of ‘things that need doing’!

Which is to point out that we not only have an (easily corrected) legal problem but we also have a (just as easily corrected) ‘management problem’.

Thanks for letting me inside your head,

Gegner

Austerity

Greetings good citizen,

I’d opine that we just got one step closer to the ‘final unraveling’ that will cause our financial system to collapse and throw the world’s ‘puppet governments’ into, er, ‘disarray’.

The inevitable ‘push-back’ against crippling ‘austerity’ leaves the bankers with no alternative…I said four years ago there is no way to use the system to repair the system, the tools don’t exist!

So what does that tell you good citizen?

That when this crap-storm finally exhausts itself, the only alternative left will be the ‘reset switch’.

The question is do YOU want the fuckers responsible for this disaster to be the ones pushing the reset button?

Your answer SHOULD BE a resounding NO…but how much ‘choice’ do you think you are going to have in this matter?

Try NONE.

Worse, they get to keep ALL of the shit they’ve stolen so far and YOUR circumstances will barely change!

Click, click-boom, Good citizen!

The likely ‘presto-chango’ they are going to pull will be the ‘depersonalization’ of the Real Estate markets.

You will be ‘relieved of your obligation’ to pay for the real estate you’ve purchased (but that obligation will be replaced with a ‘rental fee’ (for maintenance and upkeep, surly you understand…just like condo fees although you’ll still be expected to shovel the driveway and cut the grass.)

You see, good citizen, this will be a ‘win-win’ for our overlords. Labor will be free to move where it is needed now that housing is no longer part of the equation.

Hey, (in the beginning anyway) you’ll be automatically let out of your lease if you are moving out due to a job change…later this might prove troublesome but in the beginning they are more interested in showing you what nice guys they are! (And how lucky you are to have them running things!)

But wait a minute Slim…once again we have a myopic ‘Merikan warning us to beware of the decline of the US

Um, the old codger was 82…and it is not ‘uncommon’ for people that age to have a US centric worldview, but seriously good citizen, when this CF falls apart. More than just the US is gonna come ‘unglued’:

Now in principle, the Big Picture seems simple enough, though devilishly complex in the details. We live in the declining years of what is still the biggest economy in the world, where a looter elite has fastened itself upon the decaying carcass of the empire. It is intent on speedily and relentlessly extracting the maximum wealth from that carcass, impoverishing our former working middle class. But this maggot class does not invest its profits here. By law and by stock-market pressures, corporations must seek their highest possible profits, no matter the social or national consequences -- which means moving capital and resources abroad, wherever profit potential is larger. As Karl Marx darkly remarked, “Capital has no country,” and in the conditions of globalization his meaning has come clear.

The looter elite systematically exports jobs, skills, knowledge, technology, retaining at home chiefly financial manipulation expertise: highly profitable, but not of actual productive value. Through “productivity gains” and speedups, it extracts maximum profit from domestic employees; then, firing the surplus, it claims surprise that the great mass of people lack purchasing power to buy up what the economy can still produce (or import).

Here again Marx had a telling phrase: “Crisis of under-consumption.” When you maximize unemployment and depress wages, people have to cut back. When they cut back, businesses they formerly supported have to shrink or fail, adding their own employees to the ranks of the jobless, and depressing wages still further. End result: something like Mexico, where a small, filthy rich plutocracy rules over an impoverished mass of desperate, uneducated, and hopeless people.

Um, Marx made some insightful observations into the ‘fuck you, pay me’ system but ‘the commune’ was not the solution/alternative he made it out to be.

Being an Anarchist, I’m not too fond of Communists.

But this isn’t about me or dead ideologies.

It’s about YOU and the, er, collapse of life as you have come to know it.

For folks my age, the world we were raised in is gone, irretrievably.

Many of you were born not knowing anything different from what you see today. The Department of Homeland Security and the unilateral, extra-judicial execution of, er, ‘terrorists’ by killer drones were NOT the way things ‘always were’…

But in another generation they will be.

The road ahead is still yours to decide.

Will you choose unity and cooperation or will you choose phantom bogeymen and (mostly angry) spirits in the sky?

You’re the adult now, you choose.

Thanks for letting me inside your head,

Gegner

Choke

Greetings good citizen,

Around the world the ‘insufficiently connected’ are being forced into unacceptable situations while the people commonly responsible for these circumstances are routinely ‘bailed out’ at the taxpayer’s expense.

The price of food and fuel continue to spiral upwards as the financial sector loots the ‘real’ economy.

Understand, the financial sector isn’t eating all of the losses reckless lending by ‘imprudent’ bankers caused a certain degree of ‘cascading systemic failure’…

TREVISO, Italy — On New Year’s Eve, Antonio Tamiozzo, 53, hanged himself in the warehouse of his construction business near Vicenza, after several debtors did not pay what they owed him.

Three weeks earlier, Giovanni Schiavon, 59, a contractor, shot himself in the head at the headquarters of his debt-ridden construction company on the outskirts of Padua. As he faced the bleak prospect of ordering Christmas layoffs at his family firm of two generations, he wrote a last message: “Sorry, I cannot take it anymore.”

The economic downturn that has shaken Europe for the last three years has also swept away the foundations of once-sturdy lives, leading to an alarming spike in suicide rates. Especially in the most fragile nations like Greece, Ireland and Italy, small-business owners and entrepreneurs are increasingly taking their own lives in a phenomenon some European newspapers have started calling “suicide by economic crisis.”

There’s a weird saying in the business world that goes like this, You’ll get yours when I get mine. Most of the time our entire (screwed up) economic system operates ‘on credit’; everything is billed ‘net 30’ and actually paid between 90 and 120. Worse, you know ‘squeezing’ the people who owe you won’t expedite the process because they are in the same position you are; they don’t have it…(yet.)

This is why the feckless banks went, hat in hand, to their politicians and told them in no uncertain terms that they needed to be ‘bailed out’ or the financial sector around the world was going to ‘collapse’.

Well, the politicians (idiots that they are) took these bankers at their word, never realizing that the bankers WOULDN’T extend the same kind of consideration to their customers…

So the banker got a ‘pass’ courtesy of the taxpayer but the bank’s debtors got what they always get, ‘fuck you, pay me!’

Understand good citizen, NONE of these banks ‘skipped’ paying their staff ‘bonuses’ (They HAD TO or these ‘highly skilled’ technocrats would go ‘elsewhere’…)

Like the entire banking sector around the world DIDN’T (and believe me, it DID) ‘collapse’.

The, er, ‘government (taxpayer) bailouts have been the ONLY thing keeping the (crooked) banking system afloat for the past four years!

Worse, the banks have had TRILLIONS pumped into them and they’re STILL BROKE! (Because the ‘shadow banking system’ had created a quadrillion dollars worth of debt that the brick and mortar banking system is ‘trying’ to make good on…)

Instead of telling the fuckers that created this garbage to go piss up a bent rope!

But that’s okay, that quadrillion dollars will ‘vaporize’ when we institute the new monetary system A Simple Plan uses! (Partly because ALL DEBT will be illegal and mostly because placing someone in YOUR debt will be an EXILE OFFENSE!)

Um, under ‘fair use’ you are only permitted to use three paragraphs of someone else’s work. So if you don’t click the link and read the entire article you will remain ignorant of the fact that the article goes on to (briefly) examine the ongoing effects of this, er, ‘perpetrator free’ phenomenon.

Yeah, if not for my rant about the bankers getting ‘rescued’ but the people who owe bankers not making out so well, you’d be left to your own devices to try and determine who was responsible for this, er, ‘collateral damage’.

In the first three paragraphs of this article it is made out that the ‘fragile economies’ of the affected countries is to blame for this banker created carnage.

Well, good citizen, the bankers are at least ‘partly correct’ that they don’t deserve ALL of the blame, the fucking politician’s hands are dripping with blood as well.

While yesterday’s post examined what it takes to ferment revolution, we should take a moment to examine the miniscule amount of corruption it takes to implement widespread oppression!

The first key is money. Take over a nation’s money supply and you ‘control’ that nation. If you want to ‘simplify’ this process then you ‘manipulate’ the other bankers into agreeing that one currency will be the world’s ‘reserve currency’, making the manipulation process easier.

One you control the ‘printing presses’ you proceed to ‘buy’ control of the ‘business friendly’ political party in each nation.

After you have control of half of the total political ‘pie’, you ‘exterminate’ the other half, keeping it alive only as a ‘sock puppet’ so you will have the only ‘opposition’ in your pocket.

Now that you control the political process, it is a simple matter of co-opting the courts and you have true ‘free rein’.

There is no need to add the ‘rinse and repeat’, this ‘winning formula’ has been repeated throughout the entire (now) capitalist world.

Understand, good citizen, this wouldn’t be possible under any other system. It was only by turning communist China capitalist that they were able to ‘co-opt’ the formerly communist government.

The part we all should get a kick out of is that they did it all with ‘funny money’ (and the cooperation of some REALLY STUPID people.)

I’m gonna drop this one right here and you can try to work out whether or not I just called YOU stupid…

Thanks for letting me inside your head,

Gegner

Unreasonable?

Greetings good citizen,

Um, once again markets around the world are bleeding from the eye-sockets but apparently that doesn’t mean anything.

While I wrote the other day about the ‘game’ it has become, trying to decipher the headlines, I didn’t leave open the one factor that the corporate owned media can’t totally avoid.

Every once in a while the fuckers HAVE TO report the truth…

Which is to point out that how they ‘spin’ this truth doesn’t matter, on occasion they are forced to report what’s really going on.

Like yesterday’s repeal of the 4th amendment Se habla ‘unreasonable search and seizure’?

The Supreme Court on Monday ruled by a 5-to-4 vote that officials may strip-search people arrested for any offense, however minor, before admitting them to jails even if the officials have no reason to suspect the presence of contraband.

We have this from the ‘swing vote’ on this decidedly unconstitutional decision…

Justice Kennedy responded that “people detained for minor offenses can turn out to be the most devious and dangerous criminals.” He noted that Timothy McVeigh, later put to death for his role in the 1995 Oklahoma City bombing, was first arrested for driving without a license plate. “One of the terrorists involved in the Sept. 11 attacks was stopped and ticketed for speeding just two days before hijacking Flight 93,” Justice Kennedy added. [snip]

Besides being ‘unfit’ (and he’s not alone) he also demonstrates and almost obtuse unwillingness to comprehend the term ‘unreasonable’.

To Mr. K and the conservative majority, we are ALL criminals that are undeserving of constitutional protection! Just look at the terrorists and their criminal backgrounds!

Makes you wonder if the Justices all have ‘squeaky clean’ criminal records and if so, how did they get that way?

Or am I being too hard on the, what do they call them, ‘honorable gentleman’ (who is unfit to scrap the dog shit off of my shoes!)

Seems Mr. Kennedy has revealed himself to be ‘the weakest link’ when it comes to giving up that extra vote conservatives need when stripping away our ‘constitutional protections’.

Not for nothin’ good citizen but isn’t this beginning to look suspiciously like ‘bankers and bonuses?’

Unsurprisingly, this isn’t unexpected from our badly damaged Justice system that wouldn’t/couldn’t recognize criminal activity if it punched them in the nose!

Have any of these assholes even laid eyes on (much less read) the Constitution or, more importantly the Bill of Rights?

The ‘litany’ continues:

According to opinions in the lower courts, people may be strip-searched after arrests for violating a leash law, driving without a license and failing to pay child support. Citing examples from briefs submitted to the Supreme Court, Justice Breyer wrote that people have been subjected to “the humiliation of a visual strip-search” after being arrested for driving with a noisy muffler, failing to use a turn signal and riding a bicycle without an audible bell.

A nun was strip-searched, he wrote, after an arrest for trespassing during an antiwar demonstration.

Explain to me what ‘unreasonable’ means, like Bankers and bonuses, SOMEONE isn’t clear on the meaning of the term…

It also seems that some one is LIKELY a level 3 SEX OFFENDER WITH A BADGE!

When a ‘strip search’ is used to ‘humiliate/embarrass’ an otherwise law abiding citizen, it is done solely to assert authority. (Under the ‘laws of the jungle’ a ‘strip search’ is a killing offense!)

What’s the message this sort of heavy-handed behavior sends? We have a badge, we can do anything we want to you!

Once again we are faced with the gruesome task of having to decide what the difference is between a hired gun and a thug with a badge?

Somehow being raped ‘legally’ isn’t any more comforting than being raped illegally…

Naturally, the sticking point here is the definition of what is ‘reasonable’?

The, er, conservative point of view is that we will ‘hobble’ efforts to safely jail felons if we don’t insure that newly admitted inmates, however briefly, are not thoroughly searched before being admitted to the general population…

Although this has been extended to people who may be facing temporary confinement in a holding cell…because some IDIOT COP wants to show you who’s boss…

We revolted against monarchy precisely because of this variety of heavy-handed law enforcement tactics!

At this rate we will soon be forced to house the families of the local police department in secure bunkers to thwart attempts at ‘retribution’ for their humiliating their neighbors.

And somehow the clueless conservatives DON’T view bullshit like this as active ‘class war’, friggin’ incredible!

If you vote Republican you may as well slit your own throat…but if you’re too squeamish to do it yourself, your friendly local conservative will be more than happy to do it for you (because to him/her you are nothing more that a waste of space.)

Which brings us to an even more disturbing puzzle, conservatives think anyone they don’t like/disagree with is a ‘waste of space’ that would be better off dead.

Since conservatives don’t like anyone, who is a conservative?

I know it’s illogical but so is conservatism…

And apparently, according to ‘illogical conservatives’ none of us are worthy of the protections of the Constitution, thus are those protections being stripped from us one by one, while our fucking politicians sit there and twiddle their thumbs…doing nothing.

WTF, good citizen!

Thanks for letting me inside your head,

Gegner

>One Percent

Greetings good citizen,

You may recall that in yesterday’s post I noted the Dow’s ‘nosedive’ towards negative territory, but it must have been an, er, ‘aberration’ because the Dow closed up for the week!

Which brings us full circle to the topic du juor of yesterday’s piece, the lying lies of the corporate owned media.

Is there ANY REASON IN THE WORLD for stocks to add 144 points yesterday?

Let’s see what Mr. Williams has to say on the subject

No. 426: Economic Update: Mired in A Protracted Downturn
Subscription required March 30th, 2012

• GNP Growth at 1.8% versus 3.0% GDP
• Real Durable Goods Orders 10% Below Levels Seen in 2000
• Shenanigans in Industrial Production Benchmark Masked Small Downside Revisions to Recent Activity
• Recession Deeper than Previously Estimated

Not only do I find no, er, ‘positive’ news in Mr. Williams analysis, he too has difficulty reconciling the constantly revised data.

And make no mistake about it, the whole so-called recovery has been ‘revised away’ right after it is reported!

Happy numbers to show the folks at home followed a month or so later by the more, er, ‘disappointing’ data as the headline numbers are ‘very quietly’ revised.

Which is to opine, good citizen…and again I will re-iterate, it is just my OPINION that IF WE KNEW how bad things REALLY WERE, we’d be panicking right now!

Worse, good citizen, the reason things aren’t improving is because our so-called ‘elected officials’ aren’t doing their jobs.

At some point in the not too distant future, they really are going to be forced to ‘let the bodies hit the floor’, a shake out where we find out who has been ‘swimming naked’ all of this time.

The danger here is letting the bodies hit the floor WITHOUT, er, ‘repairing’ the ‘economic environment’ first.

Under the current ‘non-existent’ enforcement of business regulation, we could wake up facing a ‘monopolized’ world…one where they will tell us how much they want for their stuff and if you can’t afford it, tough!

There is (nor will there be) any alternative. You buy this (from me) or you don’t get the sumbitch!

The infamous ‘they’ will be dealing from a ‘position of strength’ (already having all of the money they will ever need) they don’t need to ‘talk price’, they don’t even ‘need’ your business.

It’s YOU that will be forced to lick their boots and choose between staying warm and staying nourished (if that is even possible with all the fillers and additives they use to ‘boost profitability’.)

If you’re not ‘afraid’ good citizen, you should be…and you shouldn’t need me to point this out to you.

Here’s the thing good citizen.

We are all aware that > One Percent controls more than fifty percent of ALL OF the wealth. The next 40% is controlled by the top 10%…the remaining 10% of the world’s wealth is divided among the bottom 90%.

What you NEED TO BE AWARE OF is civilization, like money, is a ‘legal construct’ we AGREE TO abide by…as long as it is TO OUR ADVANTAGE to do so.

Increasingly, it is being seen by more and more people as NOT being to their advantage to, er, ‘obey’ the civilization agreement.

This will prove out during this summer’s ‘energy riots’.

Where the price of energy will skyrocket, thanks to ‘political wrangling’ between Washington and the Middle East, such as today’s announcement that the president has determined that there is ‘enough oil’ to place sanctions on Iran.

Which is being done to ‘appease’ AIPAC…

But I digress…

WHEN the public starts to despair over the price of heating their home in a (still) broken economy and keeping food on the table. (Because a gallon of home heating fuel cost more than $6.) people, a vast majority of them, will be unable to afford to go to their part-time, minimum wage jobs, keep the lights and the furnace running AND put food on the table.

And the politicians of this country will just shrug and say, “there’s nothing I can do about it! Go ahead and elect somebody else, they won’t be able to fix it either because we ALL take our ‘orders’ from the > One Percent.”

And that’s the trouble we’re all facing good citizen, a ‘ruined economy’ thanks to the selfish few that we ‘failed’ the regulate effectively.

Thanks for letting me inside your head,

Gegner

Let's Pretend...

Greetings good citizen,

Global Markets bled from the eye sockets for the second straight day, opening sharply down this morning on the NYSE, that fabled home of ‘the greater fool’.

I was originally going to ignore this story because we long ago established that the stock markets no longer reflect the health of the economy in any meaningful way.

HOWEVER, in light of the very real danger of a systemic collapse of the global financial network. (It appears we will soon get to witness what happens when all of those ‘credit default swaps’ get actuated…which will be especially curious since most of them are ‘unfunded’.) I decided it was a good idea to shout ‘HEADS UP!’

Here’s the problem WE ALL KNOW the global banking system ‘sank’ four years ago, BUT, thanks to ‘extend and pretend’ none of the associated shoes have dropped…YET:

All three major stock indexes on Wall Street -- the Dow Jones industrial average, the Standard & Poor’s 500-stock index and the Nasdaq composite index -- were off more than 1 percent in early trading.

Heightened tensions over Greece come a day after China cut its growth forecast and data showed the European Union is unlikely to avoid a recession. The data was a worry for the market, which has rallied largely on hopes of a strengthening economy.
“What is driving the market now is the outlook for economic growth elsewhere and, pretty importantly, the U.S. and China,” said Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, N.H.

European shares fell more than 2 percent, and the euro declined, as riskier assets bore the brunt of fears that the global growth outlook is darkening. Wall Street fell hopes that this week’s unemployment report for February would show a significant rise in new jobs.

Quick note good citizen, when I see typos like the one in the last sentence I will USUALLY take a stab at correcting it…but in this instance I can’t even imagine what the writer was thinking when he (obviously) shifted mental gears mid-sentence.

Hopes fell is one thing but ‘fell hopes?’…baffling!

We could ‘reconstruct’ the entire sentence to say “Hopes fell on Wall Street that this week’s unemployment report for February would show a significant rise in new jobs.”

But maybe he’s not supposed to tell us that on Tuesday…I’m just surprised it got past an editor.

What should baffle us all is how the corporate owned media can talk about an eminent recession in Europe and not warn of one here?

Or do they think we are ‘uninterested’?

One thing obviously hasn’t changed, we (the US) sneezes, the rest of the world catches a cold!

Shop clerks in a wholesale market complained about the scarcity of customers. At a factory gate, workers said that few jobs were available except at the minimum wage. And at an employment office, the jobless fretted that even if they found work, they would have little hope of buying apartments typically priced beyond their means.

Su Weizhong and three other clerks late Monday morning stood at a desk with little to do at a plumbing supplies store in the wholesale market. “A year ago, there were people in every shop, looking and asking about the prices,” Mr. Su said. “Projects are finishing, but there are absolutely no new projects this year.”

With China having been the world’s main growth engine in recent years, a slowdown is hardly welcome news for the global economy. Neither is the prospect of a restive population — a continual worry for Beijing, if it cannot meet the aspirations of a rising middle class.

What’s odd is this time around nobody is predicting disaster because China’s economy ISN’T growing at a ‘double digit’ rate.

Left to our imagination is whether or not 7% growth is sufficient to keep China’s billions employed…

For their 1.2 billion people, their workforce is only a few hundred thousand larger than ours!

Which should tell you something very worrisome about their variety of ‘State Sponsored Capitalism’.

Worse, if you’re too old to work on the production line (30) then you’re a sustenance farmer, literally living off of the land.

Can you see your doom yet? (if you’re too old to keep up with the kids on the production line then you’ll be back on the farm, living hand to mouth…

Oh, and if you don’t have a farm…that’s not their problem it’s YOURS!

Well good citizen, I have decided to spread this warning because the consensus is growing that the Euro-zone WILL ‘crash an burn’ by the end of the month.

PLEASE don’t be deluded enough to think that this won’t effect the rest of us. You’re ‘beyond stupid’ if you let them fool you that easily.

And to my international readers, same deal.

There is no irony here, the global race to the bottom is OVER and they all crossed the ‘finish line’ at the same time…so there wasn’t a clear winner…but what is pretty clear is that we all lost.

The time to start suffering those losses is almost upon us.

Even extend and pretend couldn’t go on forever.

Thanks for letting me inside your head,

Gegner

Lottery System

Greetings good citizen,

Once again we are confronted with ‘if this is what a college degree does for you then who needs it’ conundrum. Interestingly enough, this particular article straddles the dubiousness of both economic AND journalism degrees!

First we look at what ‘Modern Economics’ endows its followers with then we can follow up with some ‘critical reading skills’ which is a skill journalism school supposedly endows its students with…

In their book “Freakonomics,” Stephen J. Dubner and Steven D. Levitt explain, among other things, the odd economic behavior that guides many drug dealers. In one gang they described, the typical street-corner guy made less than minimum wage but still worked extremely hard in hopes of some day becoming one of the few wildly rich kingpins. This behavior isn’t isolated to illegal activity. There are a number of professions in which workers are paid, in part, with a figurative lottery ticket. The worker accepts a lower-paying job in exchange for a slim but real chance of a large, future payday. [snip]

Okay, wait a minute slim…why is Bobo on the corner, breaking the law in the first place?

Did he take a ‘wrong turn’ on the career path of life? Did his ‘gang affiliation’ somehow preclude him from seeking honest work? I mean just look at all of the ‘entry level positions’going begging today…all NONE of em!

What fucktard ‘overlooks’ is ‘less than minimum wage’ is still better then ‘no wage’.

And the official figures repeatedly omit those who don’t (and never have) collected unemployment because they never had a ‘legitimate wage’ job…

You gotta pay in BEFORE you can collect!

Another thing fucktard overlooks is that the criminal world mirrors the corporate world, it’s not what you know but who…the guy on the corner has no ‘illusions’ about his future, he’s just doing what he can to ‘get by’.

If there’s no ‘legitimate work’ then you have to take work on the other side of the fence, it’s all about survival…not ‘illusions of grandeur’ (as numbnuts would have you believe!)

Hollywood is, in some ways, the model lottery industry. For most companies in the business, it doesn’t make economic sense to, as Google does, put promising young applicants through a series of tests and then hire only the small number who pass. Instead, it’s cheaper for talent agencies and studios to hire a lot of young workers and run them through a few years of low-paying drudgery. (Actors are another story altogether. Many never get steady jobs in the first place.) This occupational centrifuge allows workers to effectively sort themselves out based on skill and drive. Over time, some will lose their commitment; others will realize that they don’t have the right talent set; others will find that they’re better at something else. [snip]

Here we see the ‘it’s just a means to an end’, pitch in play. Those who ‘really want it’ will persevere in the end. Which isn’t the case at all! Again it is not ‘what you know but who…’

This puts the lie to that other old capitalist bromide ‘there’s always room at the top!’ the fuck there is! The top keeps getting smaller all the time as the foolish bastards continue to undermine the public’s faith in all varieties of currency, and by extension, organizations!

These idiotic journalists keep making the capitalist arguments that simply DON’T EXIST!

These people aren’t ‘striving to get ahead’, they’re taking what’s offered because it’s the ONLY game in town…and let me tell you, ‘DESPERATION is a TERRIBLE thing!’

Trying to mask it as ‘clever business strategy’ is something the fucking Libertarians would come up with!

Now, many economists fear that the comfortable Plan B jobs are disappearing. Technology and cheaper goods from overseas have replaced many of the not-especially-creative professions. A tax accountant loses clients to TurboTax; many graphic designers have been replaced by Photoshop; and the small shopkeeper by Home Depot, Walmart or Duane Reade. Though a lottery economy is valuable to various industries, the thought of an entire lottery-based economy, in which a few people win big while the rest are forced to toil in an uncertain and not terribly remunerative dead-end labor pool, is unfair and politically scary. If large numbers of people believe they have no shot at a better life in the future, they will work less hard and generate fewer new ideas and businesses. The economy, as a whole, will be poorer.

Ah me! What can you say in the face of such ‘profound stupidity?’ First they lay out the case against globalization and the global race to the bottom and then they propose we do absolutely nothing about it! Bemoaning the loss of ‘hardworking low wage strivers’ as a sort of self-inflicted wound!

Um, this article is titled something along the line of ‘Harvard Grads in the mailroom’ and the general thrust of the article runs along the idea that not EVERY Harvard Grad goes straight to Wall Street.

Well Bubba, what about the countless millions who DON”T FUCKING GO TO HARVARD?

What about them? (I’m going to guess people who can’t afford to pay $50,000 a semester tuition are NOT his concern…)

It’s not clear what today’s eager 23-year-old will do in 5 or 10 years when she decides that acting (or that accounting partnership) isn’t going to work out after all. The best advice may be to accept that economic success in America will come as much from the labor lottery as from hard work and tenacity. The Oscars make clear that there is only so much room at the top. In a lottery-based economy, you need some luck, too; now, perhaps, more than ever. People should be prepared to enter a few different lotteries, because the new Plan B is just going to be another long shot in a different field. The role model of our time should be an actress who was never nominated for an Oscar. Hedy Lamarr did well enough on the screen but, just in case, she spent her free time developing something called frequency-hopping spread-spectrum. It’s a wireless-communication technique still in use in Bluetooth and Wi-Fi. Not bad for a fallback.

I’d LIKE TO kick ‘fucktard’ in the nuts for providing us with only a single ‘success story’ but, in his defense, there probably aren’t a whole lot more.

So is it ‘the best advice’ that ‘economic success’ will come from what might be more straight-forwardly be labeled as ‘luck’ than hard work and tenacity?

Well, the ‘win some lose some’ philosophy only works during periods of social stability…and the current period is rapidly coming to an end on a global basis.

How sad is it good citizen that the Libertarians among us are willing to ‘roll the dice’ with the future of our species…

How frightening is it that the typical Libertarian also believe it is better to rule in Hell than serve in Heaven?

I once again ask you, quite candidly, is this the best our ‘education system’ can do?

Thanks for letting me inside your head,

Gegner

Walk Backwards...

Greetings good citizen,

It’s been a while since I wrote a ‘free-form’ opinion piece on a topic not in the headlines, er, per se.

I watched National Geographic’s ‘Doomsday Preppers’ last night and it was quite a trip.

They took each ‘clan’ as a group and even provided what they were supposedly ‘prepping’ for.

From a ‘casting’ point of view it was a bonanza! From a credibility point of view, not so much.

Although I think one of the, er, ‘statistics’ they flashed in the second episode provides us with a hint as to why the exec’s at Nat’l Geo green lighted such an unlikely project.

More then fifty percent of US citizens (and probably even more ‘Americans’) fear a ‘financial collapse’ in the next twenty-five years!

Which is weird because anybody who has been paying attention already KNOWS the global financial system is totally ‘insolvent’ and has been to the last three years!

The ONLY thing keeping the lights on and the doors open is ‘creative accounting’!

Without those ‘off-balance sheet’ entries, we’d be fucked! (And guess who CAN’T get away with, er, ‘hiding’ their losses? That’s right…got a mirror?)

Did I mention that YOU are being ‘cheated’?

Just something to keep in the back of your mind as you stumble along, trying to get by here in ‘Wonderland’…

Um, to their credit, Nat’l Geo didn’t play ‘favorites’, they ‘dissed’ every prepper’s claims of pending disaster, regardless of, er, ‘plausibility’.

It was also curious to see that of the 8 ‘vignettes’ I watched last night, 5 of them were ‘fiscal mismanagement’ related.

So by ‘simple majority’ MOST ‘preppers’ are worried about the same thing!

(I find that ‘comforting’ because it indicates more people are ‘paying attention’ than the corporate owned media would have you believe!)

Which is neither here nor there. While many of these survivor groups doubled as ‘networks’, survival/personal is pretty much an ‘all you’ proposition. Some of the ‘well prepared’ (people with years of food for dozens of people) have figured the encounter with the occasional stranger into their ‘survival budget’ but most ‘preppers’ were hard pressed to lay enough aside to meet their own needs, even for a little while.

Only one of last night’s ‘preppers’ followed the, er, ‘correct’ path of survival, ‘don’t have anything worth getting killed for’ (just don’t do it!)

It would literally be a ‘waste of good lead’ to shoot this guy for what he had, (and that’s the way to do it!) He is ALREADY ‘living off the land’, surviving on wild edibles!

He’ll be living even better once the bureaucracy that prevents you from picking up nature’s bounty for yourself (without a license) goes away!

If you don’t have a license to fish, hunt or dig clams, you are legally ‘poaching’ and can be locked up for it!

Not that disputes over ‘whose’ (fill in the variety of wildlife) will, er, ‘end’ once civil order collapses…they’ll just be ‘settled’ in a more immediate and absolute manner.

Which is to advocate the ‘buddy system’, never go fishing, hunting, digging alone (unless you’re the stealthiest son of a bitch in the valley!) Always bring a guard/lookout!

Always ‘assume’ someone else thinks what you’ve found is ‘theirs’ and will be willing to kill you to protect it.

This extends, unreasonably enough, to game ‘on the hoof’. Let word get out that you bagged a deer and don’t be surprised when a group of, er, ‘collectors’ show up on your doorstep, looking for a fee (the balance of the meat and, at the very least, the hyde!)

You’ll be able to tell because they will arrive, loudly pronouncing ‘We don’t want any trouble’ which is code for, We came to make trouble for YOU! (PLEASE wait until we have dismounted our loud, rumbling bikes that are intended to scare the shit out of YOU before you start shooting!)

While we’re here it is a good idea to advise your guards to FIRE WITHOUT HESITATION on anyone STUPID enough to try intimidating you with a fucking motorcycle!

You cannot ride a motorcycle and shoot at the same time!

Here’s another tidbit, for the most part, handguns are USELESS if you aren’t literally on top of your target (within twenty feet.) At 75 feet, your just as well off throwing the fucking thing!

And the only weapon you can fire while riding a motorcycle…is a handgun!

Even then you’re still ‘shooting from the hip’ (meaning you’re not taking the time to ‘aim’.) If you hit somebody it is sheer luck!

But enough ‘nonsense’! (although what would one of my posts be if I DIDN’T digress wildly?)

In a word, boring!

Before we got carried away with defensive strategy we were discussing the, er, ‘likelihood’ of financial collapse.

Since all money is funny and our civilization is extremely poorly managed, the ‘trigger’ of a financial collapse will NOT be financial, it will be resource related!

So is it ‘all good’ until we run our of gypsum? (I’m ragging on you here, you know I‘m referring to oil!)

More importantly, will we really be ‘out’ when the managers of our society claim we are, er, ‘short’?

The answer here is NO.

We only just recently passed the estimated ‘half-way’ mark…there is, for now, plenty of oil.

The problem is there soon won’t be. The number of end users is growing exponentially!

How do they ‘fix’ runaway demand on a finite, dwindling resource?

Er, ‘reduce the number of end users?’

Simply enough this would mean pricing oil prohibitively!

But how can you do that without freezing two-thirds of the world’s population to death?

Our entire ‘social model’ is based on ‘cheap abundant energy’ when energy is neither cheap nor abundant, it falls apart, literally collapses!

Very much like the song that tells how the parts of the body are linked by the skeleton, our economy is inseparably linked via energy!

Without energy the entire supply chain literally falls apart.

Knowing this, how wise is/was it to eliminate ‘redundancy’ throughout the supply chain and move to ‘on demand, just in time’ production protocols?

Looks batshit insane if you ask me but unlike our highly compensated MBA’s, I’m looking at the situation from a ‘practical’ point of view and not from a ‘quarterly profit’ perspective.

Did I mention that our civilization is badly mismanaged?

I’ve said this multiple times before and I’ll say it a thousand more times, NONE of this is an ‘accident’! If I were a prosecuting attorney, a ‘murder one conviction’ would be a lead pipe cinch!

There’s ‘pre-meditation’ everywhere you look, so it will be laughable to see the billions of people who are ‘blindsided’ by the coming collapse!

Remember ‘globalization’ was NOT done FOR you, it has been done TO YOU!

We’re in ‘overtime’ here so I’ll try to wrap this up.

Returning to our energy problem and the inability to use ‘price’ to stretch out the energy supply we have another budget problem connected to energy, the cost of producing and harvesting/transporting food.

Since energy is literally ‘dollars’, the higher the cost of energy translates directly into the cost of food! Hyper-inflation results when the cost of living outstrips worker’s purchasing power!

Followed closely by the collapse of civil order…something they are narrowly avoiding in Greece at the moment…

Oh, and if Israel attacks Iran. AND the Iranians close the straits of Hormuz…instant ‘shit soup!

How’s JIT looking for ya now?

Thanks for letting me inside your head,

Gegner

'Massaged' Reality

Greetings good citizen,

The Dow tacked on nearly 200 points yesterday on, er, ‘encouraging’ news from the retail sector.

Once again I’m uncertain which is worse, the lie itself or them believing (acting upon) their own lies?

Considering how upward moves in stock values only serve to make the rich, richer, this little ‘slight of hand’ should come as a shock to no one.

What SHOULD piss you off is the effect this underhandedness has on YOUR purchasing power!

These days you show up in the market place with a pop-gun while the thieves are toting a bazooka!

You have to bust your butt (never mind jump through hoops) to get your's but old smarmy there, his is a ‘gimme’! (As can easily be seen by the irrational rising of the stock market.)

Worse, like ‘milking a cow’ corporate insiders have been unloading their shares as fast as they can arrange to have them ‘bonus’d’ to themselves!

What really happened with the retail sector?

Fortunately for the rest of us, Mr Panzer knows where the bodies are buried:

Let's find our great increases!  Ok, motor vehicle sales were up, right?  Uh, no.

Electronics?  Nope.

Nobody expects building materials to be up (and they weren't) but food and beverages must have been, since we had an actual increase, right?  Nope.

Health?  Nope.

Gasoline!  I know, gasoline!  Uh, no.

Clothing!  Certainly kids needed new clothes going back to school!  That's where the increase was.  Oops.... that was down too.

Sporting goods?  Collapsed - down some 18% m/o/m.

General merchandise!  That's the ticket!  Well, no - it was down about 7%.

I know I know I got it!  The Internet saved us!

Actually, the Internet (non-store retailers) were down slightly too.

Oh, so we have one place left that must have been up - bars.  After all, with the economy sucking this badly we all went out and get drunk (and put it on our credit cards), right?

Actually, we didn't - September saw a ~2.5% decline there too.

The truth?  The entire gain was "seasonal adjustment." All of it.  In other words, in actual dollars there was not only no increase, there was a net decrease in sales of approximately five percent - not annualized either, month-over-month!

Put that in your economic pipe and smoke it.

Another possible reason for an ‘uptick’ in seasonal figures is that the Christmas time ordering season is upon us…but the (still) broke consumer has retailers reluctant to boost inventories as yet another gift giving season comes and goes with no ‘must have’ item to flog.

As I indicated a couple of posts ago, we are drifting dangerously towards a catastrophic systemic collapse. There will be massive shortages of things you need combined with an abundance of shit you don’t!

Which is to point out how marvelous your CORPSE will look all decked out with colored lights and tinsel!

You couldn’t buy food for love or money but they were practically GIVING Christmas Decorations away!

Mis-management that lead to mis-allocation which resulted in famine and culminated in massive riots, causing huge loss of life.

Not exactly the most ‘effective’ method of dealing with unemployment/overpopulation but the sick social Darwinist bastards wanted to see how it worked out…

And guess who gets to be the Guinea Pig?

That’s right…YOU!

Once the ‘pretense of order’ collapses you’re gonna be amazed at how many shoes start to drop, you’ll think it’s raining feet!

(Comedy, please…I’m exercising a little license here! I definitely don‘t mean literally!)

Left to our imaginations is the ‘trigger event’?

How are they going to push us over the edge now that they’ve gone through all of this trouble to drag us here?

Will it be a ‘surprise’ nuclear exchange, that GOP closet monster of a ‘dirty bomb’ successfully smuggled into a major US city making a large swath of downtown radioactive for an unknown period of time?

More intriguingly, will they spring this one on us during Obama’s watch?

He’s already proven he’s their boy. What better way to demolish the ‘weak on defense’ Democrats than to have a terrorist attack more deadly than 9/11 succeed during his presidency?

What better way to counter the ‘we are the 99%’ movement that threatens to destroy the carefully constructed media image of a neatly divided society?

These are ‘History’s actors’ good citizen. While you contemplate the meaning of what they have just done they are busy executing their next action, always one step ahead because it doesn’t have to make sense.

The goal is to keep you too confused to act.

Once you realize that you can begin to dismantle the disinformation system that makes it possible for them to pull this shit off!

Thanks for letting me inside your head,

Gegner

Economic Justice...

Greetings good citizen,

At the risk of being redundant, the destruction of our civilization proceeds a pace. Naturally, the stock markets continue to ‘defy gravity’ for no apparent reason.

While the media will use the sudden plummet in stock values to invoke panic among the public, the actual event, when it happens, will be as meaningless as the market highs.

And that should say something to you good citizen. Verily, it speaks volumes about the ‘falseness’ of paper wealth.

Not that this dissuades ignorant fools from pursuing it blindly

Finance Industry Elites Still Expecting Hefty Bonuses

If you want to point to one single thing that exemplifies the privileged, insular, infuriating attitude of the financial elites, this will do nicely: 

The onset of what has been described by the Bank of England governor Sir Mervyn King as "the most serious financial crisis" in history has failed to dent expectations for bonuses in the City. Nine out of 10 finance professionals expect to receive an annual handout again this year.

The downturn in banking that has forced Deutsche Bank to issue a profit warning and other banks to alter their business plans is expected to be underlined by US firms in the coming days, when JP Morgan and Goldman Sachs report results for the third quarter.

Bad enough our entire economy has been an exercise in ‘creative accounting’ for the past decade but the fact that there’s no way to fix the current mess is only eclipsed by the pretense that there’s nothing to fix!

Those who owe their fortunes to the current fantasy are not at all eager to see the situation rectified.

Worse good citizen, this variety of ‘grasping greed’ feeds on itself, making an already bad situation even worse…and it hastens the collapse in the process!

You see, we are already inside the vortex of shrinking supply due to too few customers.

While ‘deflationistas’ like to frighten you with the ‘bogeyman’ of falling prices and the ‘disappearance’ of money (oddly, if this were a genuine danger you’d think there would be some specific examples…like hyper-inflation in Zimbabwe.)

Wiemar Germany? Nope, hyper-inflation again!

The ‘drying up’ of money only happened under the gold standard, paper currencies don’t suffer from ‘hoarding’.

So why are the ‘reality based crowd’ so convinced the ‘drying up’ of credit is going to result in a physical ‘money shortage’?

The current ‘money shortage’ is indeed being caused by ‘unacknowledged’ inflation, prices are rising to provide the ‘illusion of economic recovery.’

As I have opined before, the ‘push’ for collapse is being driven by the palpable fear of prosecution.

Not that any of them will escape.

Short of the return of Monarchy that is.

I think I speak for the many when I opine that we have gotten used to NOT bowing and scraping and are VERY UNLIKELY to return to such practices willingly.

Which returns us to issue one, how far will you go for a crust of bread?

You better be prepared to find out because the new rulers will be the only ones with any (literal) ‘bread’ to hand out.

And they won’t ‘pass it around’ to anyone who hasn’t proven their loyalty…

The really sick part will be the answer to the first question that should pop into your mind.

Where will the ‘self-serving’ get their hands on bread?

The answer is obvious, it will come from the same place they get everything else, they’ll steal it!

Murder for it is likely closer to the mark…why should the ‘self-important’ change their modus operandi when there is a ‘kingdom’ to be had?

Yes, good citizen…the ‘rich’ really are different from you and I, they are far too ruthless to ever be included in civil society.

And that, in the end, will be their ultimate reward.

(Read about Exile in A Simple Plan if you are uncertain of what this means.)

Speaking of A Simple Plan, I’m somewhat overdue to post an abbreviated version so you can all look forward to that in the coming week.

Thanks for letting me inside your head,

Gegner

Systems Failure

Greetings good citizen,

Every once in a while one of the ‘symptoms’ of cascading systemic failure rears its ugly head, confirming the destruction of our civilization is proceeding ‘as planned’.

Now, with the concentration of the highest unemployment rates in the South and the West, some economists wonder if it is an anomaly of the uneven recovery or a harbinger of things to come.

“Because the recovery is so painfully slow, people may begin to think of the trends established during the recovery as normal,” said Howard Wial, a fellow at the Brookings Institution’s Metropolitan Policy Program who recently co-wrote an economic analysis of the nation’s 100 largest metropolitan areas. “Will people think of Florida, California, Nevada and Arizona as more or less permanently depressed? Think of the Great Lakes as being a renaissance region? I don’t know. It’s possible.”

The West has the highest unemployment in the nation. The collapse of the housing bubble left Nevada with the highest jobless rate, 13.4 percent, followed by California with 12.1 percent. Michigan has the third-highest rate, 11.2 percent, as a result of the longstanding woes of the American auto industry.

How bizarre is it that people, the vast bulk of them anyway, believe whatever they’re told to think by ‘authority’ (regardless of how sketchy that ‘authority’ may be…)

Heard it on the TV or read it online and never for a moment did they think to ‘question the source’.

Because when push come to shove, good citizen, the Corporate owned media has no more ‘credibility’ than I do…truth be told, considerably less.

Do you really give a flying fuck what a fellow from the (Libertarian sponsored) ‘Brookings Institute’ says?

Remember, the whacko Tea Partiers are Libertarians too!

It is perhaps more interesting to note that the Libbies also subscribe to the ‘Free Market Capitalism’ that is responsible for destroying the global economy!

So what do you think of this ‘renaissance region’ now, it’s still an ‘economic desert’, isn’t it?

This isn’t about Libertarianism, it’s about people who will accept lame excuses from ignorant people who SHOULD HAVE BEEN laughed out of power by the cold light of reason.

But no, SOMEBODY kept that light from shining on their ‘stupidity’…not that this prevented anything.

The survivors will write books about the enormity of the failures perpetrated by the self interested…some day.

If there are any…

Yes, good citizen, if we keep following our so-called leaders down the rabbit hole, we may lose what civilization we had.

They’re already ‘dumbing us down’ to the point where we may well not be able to recover…and some would opine that was a good thing…

And they’d be mistaken.

Which is not to say there isn’t a goodly number of things we need to ‘unlearn’.

The so-called ‘adults’ in the room were ‘bought off’, leaving the rest of us exposed to untold danger.

We now need to regain control of the situation before things get too far out of hand.

Thanks for letting me inside your head,

Gegner

Bankruptcy...global & universal

Greetings good citizen,

Once again our attention is drawn to the, er, ‘omissions’ made by the corporate owned media. (In a ‘for profit’ society there is no such thing as a ‘free press’.)

Since the only,‘independent reporting' comes from the Internets, it is none to surprising to see the ‘Big Picture’ being glossed over by the alleged ‘serious people’ who call themselves the ‘reality based community’.

Witness that we have this jaw-dropping development that the media seems to think the public would NOT be interested in knowing…

What is ‘out of place’ here, good citizen?

The July Mortgage Monitor report released by Lender Processing Services, Inc. shows that foreclosure timelines continue their steady upward trend, as a payment has not been made on the average loan in foreclosure in a record 599 days. Of the nearly 1.9 million loans that are 90 or more days delinquent but not yet in foreclosure, 42 percent have not made a payment in more than a year with an average delinquency of 397 days, also a new record. At the same time, first-time foreclosure starts in June were near three-year lows, and first-time delinquencies accounted for only 25 percent of new delinquent inventory.

Looking at this graph, one might expect the number of loans in the foreclosure process to be increasing sharply since there are so many more starts than sales.

And there are very few cures too - what is happening is a large number of loans each month have been moving from "in foreclosure" back to "90+ days delinquent" status - so the number of loans "in foreclosure" hasn't increased recently.

Years with absolutely ZERO payments being made and A THOUSAND TRILLION DOLLARS OF ‘DERIVATIVES’ outstanding on these very, albeit bad, loans…

What does this say about our, er, ’financial system’?

Wall Street continues to rise and our banking system continues to ’chug along’ as if nothing was wrong…why is that good citizen?

What would happen if YOU exhausted your bank account?

This all went down during the end of Bush’s second term, in a year and a month Obama stands for re-election and NOTHING has been done about this mess.

We’re talking 4 years and the name of the game is still ’extend and pretend’.

‘We aren’t bankrupt as long as nobody admits we can't pay!”

What does that make you?

Are you an idiot for still making your mortgage payments?

(yes)

Are you an idiot for paying anybody?

Well, once the majority takes it into their head that this is indeed the case, the whole damn supply chain will collapse.

IF YOU ran ‘out of money’ (like the banks obviously have) these assholes would be MERCILESS, they’d throw you out in the street in a heartbeat…

They aren’t doing that now due to the sheer number of people in the foreclosure process, it would cause a panic…as well as the secondary benefit of ‘protecting’ the property from vandalism and the expense of keeping it up/the utilities functioning along with the EXTREME DEARTH OF QUALIFIED BUYERS!

Yeah, that foreclosure judgment sort of kicks the shit out of your ability to obtain a new mortgage. Once bitten, twice shy sort of thing happening.

Now are you ready for a real shocker?

What’s happening here is taking place through-out the Western World.

25% of the WORLD’S housing market is in foreclosure AND THERE ISN’T A FUCKING THING THEY CAN DO ABOUT IT!

More disturbing good citizen is the fact that this is NOT an ‘accident’.

More intriguing is the notion that some people ‘leveraged’ themselves into these properties KNOWING they wouldn’t be evicted…begging the question ‘what did they know and when did they know it?’ (Well, obviously they knew when prices were being driven to ridiculous levels and we were all wondering just who could afford the mortgage on an $800,000 home?)

So, given the ‘pieces of the puzzle’ how long do you suppose we have before this train wreck jumps the rails?

How ironic is it that the ‘economy’ such as it is, is being kept ‘afloat’ by the people who have defaulted on their mortgages?

Makes you want to do the ‘patriotic’ thing and join them, doesn’t it?

Hell, if the banks are going to ‘skate’, why not join the party?

Seriously good citizen, if the justice system is this far gone, our civilization is as good as gone. The only question remaining is ‘what comes next?’

What do you do with a broken social model? If it’s anything like what you do to a drunken sailor, this isn’t going to be pretty.

Thanks for letting me inside your head,

Gegner

TILT!

Greetings good citizen!

Sometimes I get ahead of myself and today is one of those days. I finished and posted today's piece without writing an intro (so I'm doing it now!)

First up we have this curious story, could Rhode Island become our personal Greece?

The impoverished city, operating under a receiver for a year, has promised $80 million worth of retirement benefits to 214 police officers and firefighters, far more than it can afford. Those workers’ pension fund will probably run out of money in October, giving Central Falls the distinction of becoming the second municipality in the United States to exhaust its pension fund, after Prichard, Ala.

“Time is running out,” warns Robert G. Flanders, the state-appointed receiver, who recently closed the public library and a community center to save money. He has no power to cancel the city’s contracts with workers, so instead he has begun approaching retired police officers and firefighters with what he describes as “the Big Ask”: will they voluntarily accept smaller benefits in the name of saving Central Falls?

Some of the retirees are in their 90s, and Central Falls, like many American cities, has not placed its police and firefighters in Social Security. Many have no other benefits to fall back on.

I’m stretching things here…but only a little. While we have all heard that California is ‘on the brink’, could Rhode Island turn into America’s Greece?

You will note that this ‘crisis’ is (once again) centered on the benefits due public workers, the ‘other shoe’ nobody is talking about is how during ‘good times’, ‘excess’ contributions to the worker’s pension funds were ‘siphoned off’ for, er, ‘other uses’.

Worse than mismanagement, this is ‘malfeasance’, which is nothing more than a fancy term for ‘theft’.

It occurred to me that most of you don’t see where this is headed…you may have an idea but you are unsure as to how it will ‘play out’.

Currently we are witnessing a textbook example of ‘dominoes’, as the little fish default the bigger fish are getting taken down too.

Ilargi: After having maintained for the past few years that Greece neither could nor would be allowed to default, EU leaders have finally given in. Of course, the word now is that this can be a default that doesn't trigger a credit event, in which payments on credit default swaps come due. Good luck with that. The credibility of Europe in the financial markets is shot. Gone. Trillions more in taxpayer funds will be thrown at the issues, but it doesn't matter anymore.

Not coincidentally, the change in attitude on Greece comes at a time when Italy has come under intense pressure. It's time to cut losses. Getting Greece done will open up space and time to "save" Italy. Or so undoubtedly goes the reasoning. It's not going to work.

Italy is not the EU periphery; Italy is very much in the heart of Europe. The country's nominal GDP is over $2 trillion. And its debts are staggeringly high.

Germany is the ‘backbone of the EU’ just as Detroit ‘used to be’ the backbone of the US. No irony should be lost on the fact that both ‘backbones’ were centered on providing the exact same product to the exact same market!

(Japan’s prowess in electronics dwarfs its auto industry, which is why Japan WAS the number 2 economy, worldwide…by dint of its dominance of markets developed here in the USA.)

There’s a fairly sick ‘we can make ya and we can break ya’ story behind all of this but none of the fuckers responsible want to drop the flag long enough to take credit for it!

How sick is it when the ‘profits before people’ crowd wrapped themselves in the flag to hide their treachery?

How is it the media gets away with ‘under reporting’ a catastrophic (and growing worse all the time) unemployment crisis?

There is much of recent history that the ‘corporate puppets’ would like to disappear behind the controversy of gay marriage (like anybody actually gives a shit!)

It doesn’t cease to amaze me that media outlets around the planet aren’t constantly on fire!

The latest in a long parade of ‘happy talk’ has been the ‘predictions’ of a strong ‘back to school’ season this year

How much do you want to bet this will be because cash strapped school districts will be pawning off more of their expenses onto their students?

Reasons To Be Cheerful?!

In "It's That Time Again," I highlighted government statistics that refuted the "facts" one retail industry "analyst" was using to bolster his bullish outlook for the upcoming back-to-school selling season. But even if you ignore the broad-scale economic data he seemed to be relying on, other, more industry-specific trends provide little support for his (or any other analyst's) bullish take. In fact, the following reports suggest the retailing environment is anything but healthy.

Um, all bullshit aside, do you see any way for this to ‘work itself out’?

Is ‘austerity’ really the answer when we have tens of thousands of millionaires if not billionaires that will continue to live ‘the good life’ (at YOUR EXPENSE!)

Let me remind you what makes the wealthy, wealthy. It is pay raises YOU NEVER SEE coupled with LOWER PRICES YOU DON’T GET!

Naturally it is worse than that…if being the boss meant we could all be rich, we’d all work for ourselves! (And mindless capitalist MORONS ardently cling to this myth, that it is possible for us all to have our own little gig, selling shit to one another.)

And once again it takes a ‘killjoy’ like me to point out that there isn’t enough ‘market share’ to support anything even remotely resembling ‘capitalist utopia!’

But constant reader knows that as I have pointed this out many times. No irony should be lost on the fact that the first thing to go out the window in ‘capitalist utopia’ is the ‘employer/employee’ relationship!

A major kink because it is not your efforts that make you rich, you get rich off of your employees!

But I digress because we are rapidly coming up on the ‘unravelling’ of our civilization over ‘money woes’ that are really just ‘ledger entries’.

I think you all realize, deep down, that this all boils down to who takes it up the poop chute.

Considering the amount of criminal activity involved in getting us here in the first place, I think the criminals should…er, ‘get what’s coming to them’ (and I don’t mean paying them off, at least not in the traditional sense.)

The writing on the wall, the widespread adoption of ‘austerity measures’ that is code for the ‘privatization’ of just about everything SHOULD tell you something good citizen.

I’ll tell what I ‘see’.

Since the only thing cheaper than an employee is a slave AND the ‘employer/employee relationship is on the verge of breaking down… (Employers don’t see the ‘need’ to pay a living wage if they can feed their slaves at wholesale prices!)

And with the ‘abundance’ of surplus labor, I don’t see things looking too good for those who, er, ‘accept’ the slave option to its alternative…starvation.

Yes good citizen, you will soon be faced with the exact question…will you die on your feet or live on your knees?

I choose ‘feet’ (and I’m taking as many of the mofo’s with me as I can!)

Thanks for letting me inside your head,

Gegner

PS. TILT is an old fashioned term for 'fault' commonly associated with old time pinball machines. Because play could be extended by literally 'tilting the table' engineers installed a device to detect when the table was being 'tilted', causing the game to shut down.

So now you know!

The 'New Nomal'

Greetings good citizen,

Due to yesterday’s funeral (My wife’s godfather) I was in no condition to compose a post last night.

Um, switching from that topic back to matters economic sort of grinds the synchros on the mental gearbox a bit…sorry about that.

Better now?

Let’s press on with tonight’s offering where a respected investment analyst investigates the ‘New Normal’.

This Time its Different*
By John Mauldin - June 20th, 2009, 8:49AM

I have often written that the four most dangerous words in the investment world are “This Time It’s Different.” If memory serves me, I have written several e-letters disparaging various personages who have uttered those very words, and gone one to confirm later that it wasn’t different. It almost never is. And yet - and yet! - I am going to make the case over the next few weeks that it really is different this time, with only a lonely asterisk as a caveat. What prompts my probable foolishness to tempt the investing gods is the rather large amount of bad analysis based on unreasonable (dare I say lazy or surface?) readings of statistics that is coming from the mainstream investment media and investment types with their built-in bias for bullish analysis. Normally, gentle reader, your humble analyst is a paragon of moderate sensibilities, but I have been pushed over a mental edge and need to restore balance. I anticipate that this topic will take several weeks, as trying to cover it all in one sitting would exhaust us both. It should be fun. But first…

Peter Bernstein, R.I.P.

Sadly, Peter Bernstein passed away at 90 years young on June 5. One of the great honors and privileges of my life has been getting to know Peter and his lovely wife, Barbara. Introduced at a small dinner five years ago, I have been privileged to share many dinners and meetings with him in the years since, soaking up his wisdom. Only a month ago, he made a presentation (by satellite) to Rob Arnott’s annual conference and was at the top of his intellectual game. His writing of late has been some of his best. Peter cofounded the Journal of Portfolio Management and truly was the dean of investment analysts.

He wrote 10 books (five after the age of 75!). I am often asked what books I would recommend for insight into the economic world. At the very top of my list has always been Against the Gods: the Remarkable Story of Risk. If you have not read it, then get it and put it on top of your summer list. Capital Ideas is also brilliant. The Power of Gold is a must-read. You can get all three in a set at Amazon.

Jason Zweig wrote a very moving obituary in the Journal and reminded me of a few quotes I’ve heard from Peter. “‘What we like to consider as our wealth has a far more evanescent and transitory character than most of us are ready to admit.’ He urged investors to regard their gains as a kind of loan that the lender - the financial market - could yank back at any time without any notice.

“Asked in 2004 to name the most important lesson he had to unlearn, he said, ‘That I knew what the future held, that you can figure this thing out. I’ve become increasingly humble about it over time and comfortable with that. You have to understand that being wrong is part of the investment process.’”

Peter and I chatted several times during the last year, and he continued to tell me that those who thought we were in for a typical recovery were probably going to be wrong. In private conversations he was very worried about the world, and added much wisdom to those of us privileged to sit at his feet.

Isaac Newton once said, “If I have seen further it is only by standing on the shoulders of giants.” In the world of investment wisdom, there is no shoulder higher than that of Peter Bernstein. Rest in gentle peace, my friend. You will be greatly missed.

This Time It’s Different*

Ben Bernanke’s career will be analyzed and written about for many years. But the one thing that has caused me the most pain is his bringing of the term “green shoots” into the investment lexicon. These may be the two most overused and annoying words of my investment career. Every possible sign of a recovery is anointed with the phrase.

Of late, there has been a tendency for analysts to see numbers or statistics that are “less bad” and interpret them as signs that we are in recovery or at least almost there. They glance back at previous recoveries and say, “Doesn’t this look like the last time? When such and such happens it means that recovery is on the way. We should therefore buy stocks” (or whatever). [No irony should be lost on the fact that those desperately seeking ‘economic recovery’ just happen to be in the business of selling ‘financial products’.]

That we are condemned to read such musings is part of the investment landscape. But that does not mean we shouldn’t take the time to look at what the writer of those words is actually looking at. All too often of late, I find these people grasping at straws or failing to understand the data.

My premise for uttering the heresy “This Time It’s Different*” is that the fundamental nature of the economic landscape has so changed that comparisons with post-WWII recoveries is at best problematical and at worst misleading.

As we will see next week, we are on a track that looks far more like the Great Depression than the recessions of our lifetimes. To expect a normal recovery cycle, whether it is corporate profits or lending or consumer spending or capital investment or (pick a category) is just not reasonable. This is a period that is fundamentally, in so many ways, different. And the recovery (and there will be one!) will also be of a different warp and woof throughout the entire world economy.

Let me see if I can summarize my thinking before we get into the reasoning behind it.

First, we are at the end of a huge cycle of increasing private debt that ended in an overleveraged society. The process of reducing debt and unwinding leverage is going to take a rather long time. It will not be the typical one or two years and then things get back to an ever-higher normal. We are, using a phrase coined by my friend Mohammed El Erian at PIMCO, on our way to a new normal. We are hitting a massive reset button on our economic world, taking us to some new and lower level of consumer spending, leverage, etc. No one knows what the new level will be, although admittedly we are closer to it than we were a year ago.

At this new normal, we will not need as many malls or factories or stores or new-car plants or car dealerships or any number of other things to satisfy the new normal of consumer desires. As an example, and jumping ahead to a statistic for one minute, capacity utilization is now approaching 65%. Anything under 80% is anemic. Does anyone really think that businesses (in general) are going to invest more money in expanding capacity, in the face of the lowest level of production relative to potential since the 1930s?

Pardon the interruption but as I have frequently lamented, economists are not ‘sociologists’. This becomes painfully apparent whenever you see predictions based on ‘human behavior’.

While I wholeheartedly concur with Mr. Mauldin’s observations, left unaddressed is whether or not the ‘glue’ of social cohesion can withstand the widespread disparities inflicted by ‘The New Normal’?

My quibble here is that both the 1990 and the 2001 economic downturns both reflected what is being described here as the ‘New Normal’…a ‘one way’ economic contraction that reduces employment opportunities for a greater number of people.

Worse, almost all of what has been passed off as ‘economic expansion/GDP growth’ was in reality just inflation that they claimed didn’t exist. (Because you couldn’t have it both ways, either the economy was ‘growing’ or you were getting soaked by inflation; guess which ‘explanation’ the government chose…)

Twice in a dozen years we’ve ‘suffered’ jobless recoveries while the ‘not in the labor force’ numbers have nearly doubled since 1995.

Each and every one of us needs a way to support our families and ourselves. If our system of commerce is (as it has been proven to be) ‘incapable’ of providing a source of income/a means to participate for every member of society, then that system must be abandoned as unworkable and outlawed as unjust!

Back to the article…

The savings rate has shot up from zero to 6% in just a very short time. It used to be 12%. It would not be all that unusual historically for savings to go to 9% or more in a few years. That means that consumer spending will drop by 9%. Since consumer spending was 70% of GDP, that new lower level will become our new normal. And of course, due to population growth and hopefully increasing incomes, consumer spending will once again grow from whatever that new normal will be. But it is going to take some time for spending to reach the level of our productive capacity of a few years ago. [A few years we don’t have!] We are going to have to shutter a few factories and businesses. [Understand what he’s saying here! The ‘pie’ will ‘shrink’ and if fewer people get a share, tough! It’s all good so long as they get theirs…screw everybody else! Understand good citizen that society has no ‘reverse gear’, going ‘backwards’ is so much of a non-starter that it’s ‘unthinkable’, put in its proper perspective, proposing shrinking the economy is that same thing as declaring war upon the ‘defenseless’ members of society because it is they who will suffer.]

David Rosenberg, now with Gluskin Sheff, offers us this insight:

“What really struck us in the employment report of a few weeks ago was the fact that the only segment of the population that is gaining jobs is the 55+ age category. This group gained 224,000 net new jobs in May while the rest of the population lost 661,000. In fact, over the last year, those folks 55 and up garnered 630,000 jobs whereas the other age categories collectively lost over six million positions. This is epic.” [See chart below.]

“Moreover, the number of 55 year olds and up who have two jobs or more has risen 1.1% in the last year, the only age cohort to have managed to gain any multiple jobs at all. Remarkable. These folks have seen their wealth get destroyed by two bubble-busts less than seven years apart … the Nasdaq nest egg back in 2001 and the 5,000 square foot McMansion in 2007. Both bubbles ended in tears … and so close together.” [Don’t ‘mis-interpret’ these numbers, older people are capable of working for lower wages because their expenses are lower…which isn’t to say that ‘Granny & Gampy’ won’t be replaced by the millions of ‘bankrupts’ the housing crisis will leave behind.]

As we will see, the housing market is going to take at least two more years to truly recover. [This is ‘wildly optimistic’!] Looking at one month’s data that shows housing starts up a few thousand as a sign of recovery in the housing market is, well, silly. Housing starts are anemic and the inventory of unsold homes is still at all-time highs (a ten-month supply) with more and more homes coming onto the market through foreclosure.

The multiple causes of the recession are not subject to a quick fix. Offering to pay someone $4,500 to trade in an old car for a new one is a rather pathetic way to try and jump-start consumer spending and the auto industry. [Prices on ‘new’ cars haven’t fallen and $4,500 pretty much covers ‘sales tax and insurance’ on a ‘new’ car.] Is it not enough that we will “invest” $50 billion in GM, while shrinking the company to a size where it will be difficult for profits to ever pay back that investment? [Especially when the most ‘lucrative’ part of the automotive market is ‘financing’ the sale!] We have to add insult to injury and borrow more money to buy cars. Care to wager whether GM will need more money within five years? (And by the way, I love my GM (Cadillac) car, and will likely buy another one at some point, so I wish them well.) [Hey, I ‘wish’ I’d hit the lottery for a hundred million but wishing and reality are two different things. Once again we return to the central problem, it’s not making the cars but paying for them that has put us where we are today! (Banks and finance companies make most of the money if this doesn’t ‘turn around’, those so-called ‘loans’ will never be paid back!)]

The “stimulus plan” was ill-conceived and not very stimulative. But the combination of the Fed and Treasury and massive monetary infusions has pulled us back from the brink of Armageddon. [Temporarily] But we are not out of the woods yet. There is much heavy lifting to be done on the way to the land of the new normal. [From what we’ve seen so far, there isn’t a lot of ‘incentive’ to go there because the ‘new normal’ is more for them and less for us. There is nothing in the ‘New Normal’ that alters this…]

Welcome to the New Normal

Secondly, my premise is that the recovery is going to take longer and be much less robust than any recovery since WWII. With unemployment likely to go over 10%, and with our new normal world not needing as much production of so many things, unemployment is going to stay stubbornly higher for longer than in any previous recovery. We are going to look next week at a very sobering report from the San Francisco Fed that suggests we may be for a longer than usual jobless recovery. [What’s this ‘we’ shit, investor boy? You got a mouse in your pocket? Sorry but this is just another ‘semantic meme’ like the boost we all get when they call the working poor the ‘middle class’. Understand when these ignorant fucks refer to the middle class, they literally mean those people earning more than six-figures! They aren’t talking about the tens of millions of two earner households that are trying to keep it together on roughly $40k a year.]

Thirdly, all this is going to affect corporate profits, especially for companies that depend on consumer spending. Those investors who expect corporate profits to rebound in 2010 are likely to be disappointed. (For the record, if you go to the S&P web site, analysts are projecting anywhere from a 40% to a 60% rebound in earnings for 2010 for the S&P 500. I would willingly take the “under” on that bet if I could find any takers.) I think whatever profit recovery that is built into the market at today’s prices is generous. It is going to be tough to get much of a return from traditional buy-and-hold equity index investing for some time. [And make no mistake about it good citizen, ‘buy & hold’ is precisely the ‘strategy’ your 401k fund uses! It totally blows my mind that not a single ‘institutional investor’ has been fired, much less prosecuted for purchasing toxic assets with funds they pledged to protect. Worse, the Federal Pension guaranty fund bought toxic assets with their holding ‘after’ it was widely known the assets were worthless!]

Fourthly, this is a global problem and primarily one in the “developed” world. I think we will find that much of Europe will be in a worse state of affairs than the US. If there are bright spots in the developed world, I tend to think they will be Canada and Australia/New Zealand. The opportunities are more likely to be in emerging markets, after they adjust to the new normal. [Is there some ‘short-hand’ hidden in this last remark? Will the ‘developed nations’ become so ‘unstable’ that investment there wouldn’t be ‘prudent’? Flipping that rock over we have the ‘same old, same old’, why invest in labor pools that ‘cost too much’?]

What this all means is that we as investors, entrepreneurs, managers, employees, and consumers need to adjust our expectations. [or, preferably, come to our senses!] For those of us in the US, this is complicated significantly in that we really have no idea what new level of government spending and taxation we will be faced with in 2010 and beyond. For one of the few times in my life, what the government does is likely to have a huge impact on the economy, as there is the potential for a significant shift in the very fundamental nature of government involvement in the economy. It is difficult to see what the new normal will be. [Conversely, Ilargi and my humble self have a pretty good idea of what is coming…and it ain’t too sweet.]

In Continental Europe, your new normal is going to be further complicated by an eroding banking crisis that is likely to put a real crimp in any recovery. China and Asia must adjust to lower US consumer spending. They have built too many factories to supply what seemed like an inexhaustible US consumer. They have to find new internal markets or face their own new normal. [The forces at work here in trying to ‘internalize’ their own productive capacity in Asia will most likely tear their society apart. Their brand of ‘State Capitalism’ is as corrupt as our own and will produce epic amounts of civil unrest.]

All that being said, at some point, perhaps as early as the third quarter, we could see a positive number for GDP, although I think it will be later. Part of the reason that we will see some positive numbers is that year-over-year comparisons are going to get easier to make. Last summer, when inflation was close to 5% and I was writing that deflation was the real danger, oil was rising from $40 to $160 and food prices were going through the roof. Now oil is back to $70 and so we get lower year-over-year inflation numbers. Over the last two years the price of oil/energy is up, but we measure inflation on a yearly basis. [Which is to say that there is the prospect of generating numbers that point to a recovery but there will be no basis in reality for a ‘genuine’ recovery.]

Housing construction was once about 5% of GDP. Obviously, the collapse of housing construction has had a rather negative impact on recent GDP numbers. But housing is probably close to, if not at, a bottom. Even if it dropped by another 20%, it would have far less of an impact on GDP at the much-reduced level where it is now.

It is similar with inventories. They can only drop so much, and eventually they get to the new normal and stop being a drag on the statistical GDP. We are not in an unrelenting death spiral. [Or so he thinks…I’m much less sanguine.] There is a bottom. It is like a person jumping out of an airplane. They fall rather rapidly until the parachute opens, and as they get closer to the ground they manipulate the chute to further slow the descent. [This, naturally ‘assumes’ you had a parachute when you were pushed out.] But until they reach the ground, they are still falling. That is the case today. The economy is still falling, but the parachute has opened. [IF you had one!] We are going to reach the bottom at some point. We will find that new normal. We just need to adjust our activities and plans around that new destination. [I think it is folly in the extreme to assume that the ‘new normal’ will be ‘acceptable’ to a majority of people.]

I truly believe we get back to 3% GDP growth and 4% unemployment at some point in the future, but it is going to be more than a few years, especially if taxes are raised as much as is talked about in some circles. But just as in the late ’70s, when the outlook was not very bright, things will change for the better. When asked back then where the new jobs would come from, the correct answer was “I don’t know, but they will come.” [Do any of you actually remember the mid 80’s? I never saw more lawnmowers in the back of pick-up trucks as I did then.]

It is the same today. There are whole new technologies and industries that are going to be created in the next decade. Entrepreneurs will respond with new innovations and businesses. Jobs that are not now on the horizon will spring up. [Um, things today are pretty much like they like they were then, note that Bozo picked the ‘70’s as his example because Microsoft was still an infant…where do you suppose our ‘next’ Microsoft will come from? What ‘new’ jobs exist today (besides ‘homeland security) that didn’t exist a decade ago?]

As a society, we are having to work through the excesses of a lifestyle that was propped up by ever-increasing debt and an out-of-control consumerism. That will happen in the fullness of time. But it WILL take time, and we need to adjust our expectations to account for that. [What meathead fails to acknowledge, never mind nod in the general direction of, is the near total lack of new investment here in the US. The last ‘bubble’ was housing because the only other one, the only one remaining, will tear our civilization up by the roots and that’s commodities. Our society will not survive (another) commodity bubble.]

Over the next few weeks, I am going to drill down into the data to show why recovery will take longer and to help you withstand what will be an onslaught of out-of-control bullishness over data that is simply less bad. Let’s start with a few easy targets.

The Three Amigos

In 2001, I wrote about what I called the Three Amigos that I watched to give us an indication of the direction of the economy. They were capacity utilization, high-yield bonds, and the (now-renamed) ISM numbers. Watching the direction they go gives us a good idea where the economy is headed. I have not written about them for years (as a trio), so let’s revisit our old friends. We saw above that capacity utilization is still in a cliff dive. For there to be an actual recovery, we need to see capacity utilization start to climb back up. That is not currently a very positive indicator.

Credit Spreads - Bullish or Bearish?

A number of commentators have been effusive about how credit spreads have “come back in.” And indeed, junk-bond yields have fallen. That is a good thing. Look at the graph below (courtesy of Tony Boehk).

Note that yields have simply come down to levels associated with recessions, and not with actual recovery. What happened last year is that junk-bond yields priced in Armageddon. Now they simply price in a recession and slow recovery. Could they improve more? Certainly. But the easy lifting is done. The direction is right. Let’s see how they do the next few months. If those yields keep falling, that would be a very positive sign.

ISM - Is Less Bad That Good?

The Institute for Supply Management released their data for May, and again, commentators were enthusiastic about the increase in the manufacturing index. Green shoots and other signs and wonders were all over the media.

The ISM is a survey of manufacturers about how their businesses are doing. They are surveyed on ten criteria, like new orders, employment, inventories, backlog of orders, etc. (for the full report, you can go to

http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942).

From these responses the ISM creates an index. An index number above 50 means that the manufacturing sector is growing, and below 50 means it is shrinking. At the web site above, you can get quite a bit of detail. It is quite true that we have come back from what was the lowest overall index number in 30 years. But we are simply back to the level that was the low in the previous two recessions. The ISM number is “less bad” and that is a good thing, but it is still a bad number. Yes, it is headed in the right direction. Let’s look at the actual chart. [Again, totally neglected here is how off-shoring proceeds apace and there are no plans on the horizon to turn this fact around. So the ‘new normal’ will be derived from some greatly diminished production numbers.]

Of course, as businesses adjust to the new normal, whatever that level is, year-over-year comparisons will start to be positive. Simplistically, if a business makes 500 widgets a month and sales fall to 300, they will likely report falling production and rising inventories. Over time, inventories will finally settle out as management adjusts, and at some point inventories and production will (hopefully) start to rise. This gets reported as positive. The actual numbers may be down from the peak, but the direction of the company is once again on a positive slope. [Again I would like to draw your attention to a number that WON’T decrease in our much diminished ‘new normal’ and that will be the size of the labor force.

It is utter insanity to ignore this critical factor yet these ‘analysts’ do it all of the time!]

When you look at the actual numbers comprising the release, the manufacturing part of the US economy is still contracting. Is it less bad than a few quarters ago? Yes, but it is still bad. The recent number is only slightly higher than the average for the last 12 months. We need this number to be above 50 to talk about an actual recovery in the here and now, as opposed to the future.

Contain Your Enthusiasm

Shipping containers moving into US ports rose by 2% in April, from March. That was cause for celebration in some circles. Buried way down, if mentioned at all, was the fact that compared to a year ago shipping is down 22%. And year-over-year comparisons have been worse for 22 months in a row. At some point, you get to a bottom. We find the new normal. But if the new normal is down 20%, that is a different-looking economy. [The closer I read this piece, the more obvious it becomes that the ‘new normal’ will be unacceptable…but that doesn’t make Mr. Maudlin any less right.]

This quote came from good friend Dennis Gartman:

“‘Stuff’ moves by air when it is needed swiftly, but we can compare year-on-year data to get an idea of the relative weakness or strength of the economy. At the moment, the data is still very, very weak. According to the data reported out by the International Air Transport Association, after having touched just barely under $60 billion in ‘07 and ‘08, this year the IATA ‘guesstimates’ that only $40-$42 billion will move into the US.

“We are effectively back to the levels of ‘00-’04 and we are well below anything since ‘05. Having reached its worst year-on-year comparison back in December of last year when there was 23% air-transported cargo moving into the US from abroad, these yearly comparisons have remained about 20% lower since. Inventories of ‘goods’ on the nation’s shelves remain high, and so long as that is true then we are going to see horrid, recessionary year-on-year comparisons in this very timely data.”

Dennis also looked at rail shipments: “Since the start of this year this year, when the year-on year comparison was a relatively tepid -8%, the trend has been steadily
‘from the upper left to the lower right’ on the charts. By March, the year-on-year comparisons were averaging -15%. By April, -22%; by May -25%; and now, after a week or two of June, they are -26%. This is not a trend to be tampered with; this is a trend of some very real severity, and for now we fear that it is a trend rather firmly intact. Thankfully, it looks back, not forward; but if the past is prologue to the future, the future still looks rather bleak. [And mind you, this ‘time frame’ coincides with all of the proclamations of ‘green shoots’. If it isn’t being shipped, it’s not being made or puchased.]

“Finally, there is a glimmering of hope on the rail horizon, and that is that the June figures, as they are compiled, are showing some signs of life. According to the AAR, ‘freight traffic on US railroads during the week ended June 13 continued to show signs of gradual improvement … [as] rail car loadings and intermodal were up from the previous week with carloads ”at their highest level in 10 weeks.”

Welcome to the new normal. It is a quite distinctively different world than that of 2006. Global trade is off 10% and there is outright deflation in many places. We will have lots of data to look at over the next few weeks as we explore the new normal, but that is enough for today.

Oh, I almost forgot. The asterisk on “This Time It’s Different*”? Human nature hasn’t changed. We are still driven by fear and greed. [Something that won’t change until we abandon the practice of allowing financial speculation to determine the fate of our civilization.] The business cycle has not been repealed.[although it easily could be.] Free-market capitalism will get us back (with tooa few new rules of engagement). What’s different will be the nature of this recovery. All the other eternal truths will remain. [snip]

So here we have a financial pundit go on for eight pages, telling his ‘peers’ that the ‘new normal’ consists of a much smaller economy than we previously enjoyed…not that many of us were exactly ‘enjoying’ being squeezed out of our jobs and our homes.

Perhaps the most disturbing aspect of this missive is how the most useless members of our society are perfectly fine with the idea that the domestic economy will shrink to the size where it can be down in a rather shallow puddle. There are other places to invest…which is how we came to be where we are today.

Simply put, returns for investors have trumped providing a healthy economic environment for the rest of society.

The economic desert continues to grow and none of these ‘investors’ give a hoot. The gated communities they live in provide them with whatever they need. If any of them are feeling paranoid, Blackwater offers ‘rescue’ services that will wisk them out of the ‘danger zone’ by helicopter, quickly and efficiently.

How many have taken Blackwater and their competitors up on this offer is unknown as well as raising more disturbing doubts regarding how the investor classes feel about their ‘membership’ in society at large.

How disturbing is it to you good citizen that ‘for a price’ you would be allowed to have mercenaries fly in and machine gun down your fellow citizens?

Because if you don’t have the money, you’re stuck fighting off the marauders on your own!

Marauders that will enslave you and take your children hostage, have their way with your wife (likely killing her if she resists) and stealing for themselves anything of value you happen to have.

Why will these marauders exist? Because the investors didn’t like the idea of investing in the ‘expensive’ here! They’d rather create jobs in third world cesspools while ignoring the cesspool they’re building here in their own back yard!

The ‘peaceful’ version of the ‘new normal’ will exist in places like the Grand Caymans and other Island retreats where the military will protect you and other ‘tourists’ that are the backbone of their economy.

Meanwhile, back in the ‘land of scarcity’, the ‘new normal’ will be somewhat more harrowing as the simple task of leaving your home becomes a gamble few will risk.

It will be an exercise in futility to go to the store because every third delivery truck will be hijacked enroute. Naturally, some entrepreneurial marauders will offer some of their ‘take’ on the black market, soon to be the only markets available.

Cops, sick of being bushwhacked, will either stop showing up to residential calls for aid of they will arrive with guns drawn, ready to shoot anything that moves.

It also spells the end of the ‘two income’ family as you won’t dare leave your home unprotected. The spouse with the higher income will have to risk commuting while the other ‘guards’ the shanty.

This, ironically, will create a lot of job opportunities. Kids will find work ‘transporting’ minor necessities for their neighbors, while facing the prospects of being hijacked themselves, depending on the ‘density’ of the marauder population in a given area.

Worse, the marauders are if nothing else, all about ‘security’…some areas will be ‘taken over’ by the local marauders…pray your area isn’t one of them because these people live by their own rules. A bizarre cross between the ‘Wild, Wild West’ and ‘the law of the Jungle’ depending on an ever changing ‘threat level’.

Have I ‘unfairly’ pinned this horrendous outcome upon the ‘investor class’? I’m sure they’ll think so.

Civil order is a very fragile thing good citizen, the only thing keeping your neighbors from breaking into your residence in search of food and valuables that can be exchanged for food is a ‘viable’ economy. Where the prospects of employment outweigh the probability of being jailed, which provides them with a roof over their head and some food in their stomachs.

If your neighbors are hungry enough, your presence becomes an inconvenience rather than a deterrent.

While your best bet during the coming hard times will be something akin to a community militia, understand that the desperate will be ‘uniting’ as well.

There are all manners of scenarios that will play out, as what passed for our ‘economy’ dies a stunningly quick death thanks to investors that failed to see the ‘benefit’ of investing locally.

So good citizen, are you ready for the ‘new normal’?

Thanks for letting me inside your head,

Gegner