Welfare

Greetings good citizen,

Oh what a tangled web we weave! It doesn’t cease to amaze me how much damage our civilization has suffered at the hands of the new (and constantly improving) ‘unitary executive’.

It’s been almost fifty years now that half of us have believed the other half was clinically insane or at the very least ‘stupid and gullible’. How ironic is it that it turns out both ‘halves’ were correct, not about the insanity but about the ‘stupid and gullible’…

It’s bullshit like this that clears up the mystery of why Hillary isn’t running this year…

Critics of the stringent system say stories like these vindicate warnings they made in 1996 when President Bill Clinton fulfilled his pledge to “end welfare as we know it”: the revamped law encourages states to withhold aid, especially when the economy turns bad.

The old program, Aid to Families with Dependent Children, dates from the New Deal; it gave states unlimited matching funds and offered poor families extensive rights, with few requirements and no time limits. The new program, Temporary Assistance for Needy Families, created time limits and work rules, capped federal spending and allowed states to turn poor families away.

“My take on it was the states would push people off and not let them back on, and that’s just what they did,” said Peter B. Edelman, a law professor at Georgetown University who resigned from the Clinton administration to protest the law. “It’s been even worse than I thought it would be.”

How ironic is it that all the jobs created during the Clinton years evaporated with the ‘dot gone’ bubble?

And that, good citizen is a rhetorical question, there’s nothing ‘ironic’ about it at all.

Worse, we need to ask ourselves which ‘well-spoken individual’ will be next to step forward and claim the democratic mantle, only to totally sell out democratic ideals?

Closet Libertarians are amazingly adept at this...just as Cyrk Unger pointed out the other day that for a 'constitutional lawyer' Obama acts like he's never seen the document he supposedly 'specialized' in...

WTF?

I mean look at Willy Jeff, he got a mansion in NYC and his wife landed a seat in the Senate! How ‘lucky’ does a guy get?

How much are you willing to bet that luck had nothing to do with it?

Did I mention that our government is a bought and paid for illusion, sponsored by the >One Percent?

Or that our civilization will crash and burn in the VERY near future?

The ‘assault’ has been underway for the past four years, ‘disguised’ as the economic downturn.

Our ‘transition’ to a full-blown Banana Republic is almost complete.

Um, the above tale of ‘financial hardship’ underlines the fact that a rich man CAN live as cheaply (and sometimes even cheaper because of the exemptions they grant themselves) than a poor one.

This, as we are learning, is the ‘cause’ of the current, er, ‘depression’. When all (most of) the money in a society is ‘captured’ at the top of a hierarchical chain, there is no mechanism except revolution capable of restoring balance to the economy.

Notice the indicators, there is (nor has there been) ANY ‘new investment’ because the existing capacity is capable of supplying what is becoming a dwindling number of customers…

Which is to slap you hard in the face good citizen, hopefully to wake you up to the fact that you are, right this very second, being strangled with your own rope!

Understand the trick is to keep you lulled until you are no longer an enormous giant, capable of smashing them to pieces as you struggle.

By the time we organize to fight back most of what we would have had to work with will have been exported.

And there’s no ‘accident’ in play there.

The part that devils them to no end is that they can’t take the ‘bread basket’ with them. (But I think the plan is to cripple that capacity so we can’t use it either…)

It’s shitty little deals like the one in this article that shout ‘class war’ plain as day yet you refuse to believe it…

There is an ALTERNATIVE TO CAPITALISM that is far more efficient and effective but the CRIMINALS AMONG US don’t want you to know that!

And who ARE the criminals, good citizen?

They are the very same people who claim to be the ‘job creators’!

Understand, NO HUMAN has EVER ‘created’ a single job, they ALL come to us directly from Mother Nature!

Without nature, ‘need’ doesn’t exist.

And don’t fall for the Libertarian crap of ‘need doesn’t exist’, they fucking NEED YOU to believe it (even if they don’t themselves!)

Once they convince you that your needs are ‘wants’, you are no longer entitled to them!

You ‘want’ to breathe? Tough! I don’t think you deserve to!

I’m willing to pay more than you will for that air so it’s rightfully mine!

What a fucked up argument to make considering ALL money is funny…but the fucking Libertarian whack jobs don’t realize that!

They’re still little kids, bidding ‘an infinity’ dollars and are then willing to go to the mat over who bid it first!

When an ‘infinity dollars is still fucking ZERO!

How stupid can you get?

Thanks for letting me inside your head,

Gegner

Bullshit!

Greetings good citizen,

The ‘litany of woe’ continues to grow as the pile of bullshit grows deeper. It’s difficult to decide which is more worrisome, the parade of imbeciles clubbing one another senseless for the Republican nomination or the FACT that we won’t do any better if the (pretend) Democratic incumbent wins re-election.

And I use the term ‘win’ in the loosest possible sense…

Like in how comrade Putin just, er, ‘won’ re-election for his third term as president of the Soviet confederacy.

How fucked up is it good citizen that the ‘president’ is whoever the (corporate owned) media tells you it is?

More ‘troublesome’ is how the cheerleaders in the media (what a shitty way to earn a paycheck, being a professional liar) keep shoveling it in!

The economy added 227,000 jobs in February, the Labor Department reported Friday, and though the unemployment rate held steady at 8.3 percent, that was largely because nearly half a million people had joined, or resumed, the search for work in hopes their prospects had improved.

“We’ve seen a lot less Eeyore,” said Sherry Leginski, operations director at CareerPlace, a job placement center in the Chicago suburb of Barrington. “Maybe they’re turning a little bit more Tigger instead of Eeyore. They’re feeling better.”

Looking over her recent cases, Ms. Leginski cited a new college graduate who found work helping the developmentally disabled, a 60-year-old manufacturing specialist whose contract job in Mexico had led to full-time work back home, and a financial services worker who had landed a management job in Charlotte, N.C.

Skipping the ‘happy talk’ about a handful of exceptions (capable of traveling to take on a new job.) what’s worrisome here is ‘the math’.

Let’s suppose we are ‘charitable’ and give the hiring rate a boost to 250,000 (for the sake of round numbers…

A quarter of a million a month for twelve months (again being VERY charitable!) makes 3 million jobs a year. (Let us not lose sight of the fact that over HALF of these jobs are ‘churned’ on an annual basis as employers look for a better ‘fit’ and employees seek management they are ‘more compatible’ with.)

So what are we saying here? That most jobs aren’t ‘new’ they’re just ‘recycled’. But that’s not how the ‘workforce’ operates, it’s step in as a teenager then it takes forty (plus) years until you can ‘legitimately’ step out (barring catastrophic injury.)

So when we were through with, say, the Clinton years, there were supposedly 21 million jobs ‘created’ (and again, most of ‘em were ‘churn’, the same jobs getting filled by different people, over an over again…)

While it might be the, er, ‘inclination’ of the corporate owned media to look back at the nineties as a ‘go-go’ era. I’m here to tell you, as somebody who lived through them, that this is a TOTAL FABRICATION! The 90’s sucked for 99% of us (and the payroll data proves it!)

And UNDERSTAND that the, er, ‘recession’ of 1989 to 1991 was the First ‘jobless recovery’ (the stock market ‘miraculously recovered but unemployment remained, er, ‘stubbornly elevated’.)

The Dot Gone bust (just after Bush Jr. took office) marks the second consecutive ‘jobless recovery’…the crash precipitated by Bush’s economic policies have resulted in the third/most recent ‘jobless recovery’.

No irony should be lost on the fact that most ‘doomers’ have lived through these ‘challenging times’, which has contributed to their, er, ‘pessimistic’ outlook.

Then we have this bullshit to contend with!

The decision by the International Swaps and Derivatives Association ends months of speculation that a Greek default might not set off the swaps, a result that could have undermined their role as insurance against debt defaults.

“We saw today that the credit-default swap market worked,” said the association’s chief executive, Robert Pickel. “Market participants expected it to work.”

Still, doubts about the instruments’ effectiveness may linger. European officials initially shaped the Greek debt restructuring to avoid activating them. The concern is that future restructurings could be arranged to stop swaps from paying out.

So, for some bizarre reason, the swaps were (finally) activated (this time) but (and it’s a mighty big one) the could, er, ‘restructure’ the debt so they wouldn’t be activated in the future…

Is this starting to look like MF Global writ large?

Throw in a broken justice system and we have all of the fixings for Alice in Wonderland!

A madhouse where if there were any rules at all they would be ‘do as I say and not as I do!’

So what’s going to happen tomorrow?

Perhaps more ‘incredible’ is how the Greeks managed to 85% of their creditors to ‘agree’ to a 50% plus ‘haircut’.

Worse, good citizen is they are ALREADY SAYING that Greece will be in trouble again in the very near future!

And it looks like they will be forced to ‘poison (what remains of) the well’ when they get there.

And that’s just a couple of the more obvious things that sticking in my crusty old craw this morning…

Hope the rest of the day gets better from here as I doubt it could be much worse…but then again.

Thanks for letting me inside your head,

Gegner

Head full of Nonsense

Greetings good citizen,

Is has been said that you can fill a man’s head quite full of nonsense and he is still capable of functioning adequately…

Such facts do not bode well for our current situation…

The markets continue to ‘circle the drain’ stubbornly refusing to sink below the ‘psychologically important’ 10,000 level.

Left to our imaginations is what is left in the US to support that kind of valuation? Is half of our 10,000 point Dow due to this being the home of both Mr. Gates and Mr. Buffett?

What does the Dow at 10,000 mean?

Ironically, there isn’t ANY explanation for that…none.

How do you like it now?

If a pig is a pig and a duck is a duck then a buck should be a buck no matter where you go.

Yet the Japanese buck is only worth a penny US.

Why? Because Dirtbag says so!

Is that ‘disturbing’ good citizen? You bet it is!

Because ‘Dirtbag’ (who pulls this shit out of his backside) has also decided to repossess your house and cut-off your unemployment because he doesn’t NEED your services anymore!

What you are witnessing here good citizen is the ‘rule of man’ writ large. It don’t have to be logical nor does it have to make sense…are you looking for ‘fair’ in this mess? Don’t make them laugh!

Fair has nothing to do with it, it is the polar opposite of fair. This is hooray for me and fuck everybody else!

And if we don’t like it…

You know what you can do about it…

Is it any mystery why most modern judges have bodyguards?

Retribution is a terrible (albeit necessary) thing.

What you need to understand is both the ‘cheaper there’ and ‘the global race to the bottom’ are totally ‘artificial’.


So what are you going to do about it good citizen?
Because it won’t stop until YOU stop it.

You know it. I know it and more importantly, they know it.

How many of them will we bag ‘right away’ (when things reach critical mass’?)

Maybe ten percent…out of three hundred thousand, ten percent will be a pretty good haul.

How many will we bag total?

This is where I personally think the cheaters have seriously underestimated the public’s thirst for vengeance…I think the total catch will be in the 120 to 140 percent range!

Which is to say a lot of ‘technically innocent’ people are going to pay the price for going along to get along.

How many will ‘get away’?

One or two percent…max.

Why so high a capture rate? They aren’t nearly as ‘smart’ as they think they are.

Ironically, the ones who do ‘escape’ will be savvy enough to ‘blend in’.

What should bum these psychopaths out is the new government agencies will be on high alert for their variety of ‘anti social’ behavior for a real long time.

They will literally ‘unlearn’ their greedy ways. If they fail they will be exiled.

The fiendish part of exile is not being sent to a desolate location naked and alone…because it is unlikely you’ll be alone for a quite a while…

The truly devilish part is being sent to such a place and having people 'just like you' to rely on.

Naturally, all of these ‘rugged individuals’ will know better than any of the rest just how to take care of things in a limited resource environment.

What do you suppose the first order of business will be (for every one of them…)

Yup, making sure that ‘they’ have enough.

Make no mistake about it, if they’re ‘big/bad’ enough, they’re going to take what they want and fuck everyone else!

Just the kind of ‘survival situation’ you always wanted to be in…

This ‘game’ will get more diabolical as it progresses with the bottom line being he who can go the longest without sleep will probably win the day…not that certain ‘alliances’ aren’t possible.

It will be like today’s (considerably less than) ‘reality’ shows, you’ll never be sure who is conspiring with whom and in the end the only one you can trust is yourself.

Who do you trust when the pit is full of snakes?

That question doesn't have a good answer.

So, how many 'wannabes' will get themselves exiled?

That’s a whole different equation and it should ‘consume’ another 20 percent of the population…although that could be high due to the ‘sheep effect’…people who parrot conservative values if only to appear to be on the side that was ‘winning’.

They don’t really care one way or the other…and it’s hard to decide if this isn’t worse than diehard conservatism because it is the pinnacle of stupidity.

Not that being stupid is a crime.

It’s the ‘moral ambivalence’ part of the puzzle that most of us would find reprehensible. This brand of ‘allegianceless neutrality’ is how we ended up in the shit in the first place!

Stupid may not be a crime but ‘I don’t care’ is definitely a ‘sin’…

Until recently, most of us were guilty of being ‘uncaring’. Funny how having the rug pulled out from under you can force you to re-examine your priorities…

People are starting to wonder what can be done about our badly broken political process and how to effect meaningful change.

If we don’t do something and do it quick, it may be too late.

It’s gonna be a real bitch when you can’t venture beyond your own doorstep without a white flag in your mitt.

Thanks for letting me inside your head,

Gegner

Free Lunch?

Greetings good citizen,

The markets are enjoying another ‘big’ up day, this time because month-over-month home sales have increased. Citing a combination of depressed prices, government incentives and loosely defined ‘first time buyers’, not only have sales picked up but so have housing ‘starts’.

Naturally, a single month of data does not a ‘recovery’ make, especially in light of the looming problems in the auto industry.

The housing markets are nowhere near the bottom (price wise) and building more homes when there is so much unsold inventory on the market is ‘speculative’ at best, nothing to get excited about.

Sadly, ‘good news’ is where you find it…even if you have to ‘spin’ it yourself.

With that said there is a rather ‘diverse’ set of offerings on tap tonight. We begin with commentary from someone we haven’t heard from in a while…

The greatest cost
Commentary and weekly watch by Doug Noland


An astute analyst posed the following question last week: "The current debate is centered on whether the US Federal Reserve can take back the liquidity in time in order to prevent inflation. Suppose it can. Suppose they execute this perfectly. But if the Fed is able to flood the system with the liquidity (thus reducing the severity of the downturn) and take it back before it causes inflation, it seems there is a free lunch. We get something for nothing. So, assuming a perfectly executed game plan by the Fed, is there a cost? Do they keep rates low for a time, only to raise them a lot a year down the road - is that the cost? Or is there another cost?"

I'm short on time today, so I'll attempt a brief response.

First of all, while it often appears otherwise, finance provides no free lunch. The mis-pricing of credit and misperceptions of risk in the marketplace have deleterious effects, although their true impact may remain unexposed for years. Indeed, the more immediate (and always seductive) consequences of loosened financial conditions tend to be reduced risk premiums, higher asset prices, and a boost to economic "output". Conventional analysis of monetary policymaking still focuses on "inflation" and "deflation" risks. I would strongly argue that our contemporary world has already validated the analysis that acute financial and economic fragility are major costs associated with market pricing distortions.

When the Federal Reserve collapsed interest rates following the bursting of the technology bubble, the results seemed constructive. Stock and real estate prices inflated; a robust economic recovery ensued. [But only or traders, the ‘real’ economy continued to languish.] There was at the time some recognition of the potential for real estate excesses. But this was seen as such a small price to pay in the fight against the scourge of deflation. It was not until 2007 that the nature of the true costs of a massive "reflation" began to come to light. [I would add that this was due to the failure to incite a ‘corresponding’ economic expansion in the ‘real’ economy.]

Many would today argue that it was simply a case of the Fed's failure to take the punchbowl away in time. Such analysis misses a key facet of bubble dynamics. Once the mortgage finance bubble gained a foothold, there was absolutely no way policymakers were going to be willing to risk bursting such a consequential bubble.

I see ample support for my view that bubble dynamics have taken root throughout government finance. This unprecedented inflation includes Federal Reserve Credit, Treasury borrowings, agency debt, mortgage-backed securities issued by government-sponsored enterprises (GSEs) such as home-loan guarantors Fannie Mae and Freddie Mac, Federal Housing Administration and Federal Deposit Insurance Corporation insurance, massive pension and healthcare obligations, the myriad new market support programs, and so forth. This government finance bubble is domestic as well as global. Amazingly, the scope of the unfolding bubble dwarfs even the mortgage finance bubble. And, importantly, it is reasonable to presume that the Federal Reserve will find itself in the familiar position of being trapped by the risk of bursting a historic bubble.

So I see the probabilities as very low that the Fed will reverse course and impose tightened liquidity conditions upon the marketplace. Actually, reflationary pressures may force the Fed to increase its Treasury holdings in an effort to maintain artificially low interest rates. At the same time, I don't see higher inflation as the greatest cost associated with this predicament. Much greater risk lies with the acute systemic fragility that I believe is inherent to major bubbles. [What he’s saying here is the global financial system will still be in danger of collapsing…and when it does, hyperinflation will be the least of our problems.]

Similar to mortgage finance 2002-2007, the marketplace is significantly mispricing the cost - and failing to recognize the risks - of a massive inflation of government finance. And while every bubble has its own dynamics and nuances, the unfolding government finance bubble has even more precarious Ponzi finance dynamics than the mortgage bubble.

The markets are on track to accommodate US$2 trillion or so of Treasury issuance this year. This incredible amount of debt creation is in the range I would expect necessary to temporarily stabilize the US ("services") bubble economy. Importantly, this amount of new finance both plugs financial holes and works to stabilize inflated income levels. From last week's income data, one can see that personal income was up 0.3% year on year to $12.04 trillion. And while 0.3% is very meager growth, without massive government fiscal and monetary expansion (inflation) the economy would have suffered a destabilizing income contraction. Keep in mind that personal income has inflated 65% since 1998 and 33% from 2003. [So, while overall income is ‘growing’ on paper, it is the failure of this income to be distributed where it is needed that will result in ‘systemic collapse’.]

I'll try to explain my belief that dangerous Ponzi finance dynamics are in play with the current course of policymaking. First, I view panicked policymakers as seeing no alternative than to try to sustain the current (deeply maladjusted) economic structure. A more natural course of economic adjustment - from finance and consumption-driven bubble economy to a more balanced system - was going to be much too painful to endure. So a massive government inflation was commenced in desperation - with the grandiose objective of revitalizing securities markets, housing prices, and the overall US economy. I just don't see how this reflation goes much beyond stoking a susceptible artificial recovery. [Which is shorthand for saying we will once again experience another ‘recovery’ that is ‘transparent’ to the ‘real’ economy.]

First and foremost, with government finance now completely dominating the credit system, I can't even begin to contemplate how this process might nurture an effective allocation of financial and real resources. [Read: jobs and wealth creation.] Indeed, I see today's manifestations of credit bubble dynamics as an extension of similar mispricing, misperceptions, and over-issuance that led to last autumn's near financial collapse.

Admittedly, the massive extension of government credit and obligations works wonders in stabilizing a devastatingly impaired system. Inflationism is always seductive; trillions of dollars worth is absurdly seductive. Yet this extra layer of debt does little to effect change to the underlying economic structure. Actually, a strong case can be made that it only delays and sidetracks the necessary adjustment process. And, importantly, this enormous additional layer of system debt exacerbates system vulnerability. [We’re talking ‘wringing moisture from dry towels’ here good citizen…and guess who gets to be the ‘towel’?]

At the end of the day, a system is made or lost on the soundness of its underlying economic structure. I posit that a sound economic structure is reliant upon only moderate credit growth and risk intermediation. Our system requires massive credit expansion and intensive risk intermediation. I would also posit that there are no benefits - only escalating costs - to throwing massive credit inflation upon an unhealthy economic structure. And, returning to Ponzi dynamics, one of the major costs to such inflationism is a massive expansion of non-productive credit – obligations that are created without a corresponding increase in real economic wealth producing capacity. The debt can only be serviced by the creation of more debt obligations.

The danger is that markets too easily and for too long accommodate massive credit expansion during the boom. Federal Reserve policies are fundamental to this dynamic. But at some point and out of the Fed's control, as Wall Street learned, greed inevitably turns to fear and a reversal of speculative flows marks the onset of the bust. And it's the massive inflation of non-productive credit that ensures the unavoidable crisis of confidence. Can the underlying economic structure service the mounting debt load or, instead, is it the massively inflating debt load that is sustaining a vulnerable economy? And it is in this vein that I fear the government finance bubble is on track to destroy the creditworthiness of the entire economy. And this Ponzi dynamic is the greatest cost to what I fear is a continuation of unsound policymaking.

In keeping with the theme of my past few posts, no nation ever succeeded in inflating its way to prosperity. If we keep waiting for the adults to finally show up and put their foot down, we’re going to be waiting a long time.

Someone has to step up to the plate, say ‘no’ and mean it! The debacle that is playing out on the global stage right now is due to the bad kids getting in one another’s face and screaming ‘fuck you, pay me!’

Instead of saying ‘no’ and giving these kids the spanking they richly deserve, the ‘government mommy’ has retired to the kitchen to try make enough brownies to keep these brats ‘happy’, while the little kids are stuck out in the backyard in the pouring rain…because nobody is watching out for them.

One need not be a genius to see that this won’t end well.

I’m not a ‘goldbug’, I’m more a Whiskey and gunpowder type, however here we have another disturbing development courtesy of The Mogambo guru

I also highly recommend that you take the time to consider the implications of this piece.

Logically, our collective fortunes are based on the overall prosperity of the society we belong to, simply put, there is no way for the individual to ‘escape’ times of financial reckoning .

If everyone does well, so will you. If only the connected prosper, everyone else suffers, something that will inevitably be visited upon the temporarily prosperous…

Thanks for letting me inside your head,

Gegner