- SmartKnowledgeU Podcast #6: Deciphering the Language of Lies
Very rarely, if ever, is there a failure of regulators, a failure of central bankers, a failure of commercial bankers, failures on the war on drugs, failures in military wars, etc. because all of these institutions and people deliberately plan, execute and achieve exactly what they intend to accomplish. This is the big secret they don’t want us to realize. One of the greatest scams our “leaders” have pulled off is creating a language of lies that ironically convinces us even further believe, adopt and internalize their lies, so much so, that even many activists embrace these lies in their activism against them. For example, during the fallout of the global market crashes of 2008, I witnessed a lot of anti-banker activists protest their dastardly deeds with chants of “End Capitalism” because they believed the banker lies that capitalism and a “lack of regulation” caused the economic devastation of 2008. One of the core tenets of capitalism is a free market. If we don’t have a free market, then capitalism cannot exist. In order to have a free market, the markets, not Central Bankers, must be setting interest rates based upon free market dynamics. Consequently, it is literally impossible for a Central Bank and a free market to co-exist in the same nation. Bankers wanted people to falsely blame capitalism, free markets, and a failure of regulation for the economic crashes of 2008 in order to divert blame away from the real culprits – them. And apparently, due to the clever narratives they built with their language of lies they even succeeded in convincing anti-banker activists to promote their rubbish lies.
The truth about this carefully woven web of deceit created by bankers, politicians, media hacks, and industrialists known as the language of lies is almost as mind-blowing as the conclusion in the film Interstellar (Warning: Spoiler Alert. Stop reading only the rest of this paragraph if you have not yet watched Interstellar). After watching Interstellar, you must conclude that NASA pilot Cooper must travel into space in order for his daughter Murphy to receive the message to tell his father not to leave her and not to travel into space. And that if Cooper never traveled to space, then Murphy would never have received the message she received from her father in which he was trying to warn himself not to go. If thinking about that didn’t make your brain hurt, then perhaps listing to our latest podcast will.
In fact with mainstream media so inundated and saturated with as little facts as possible and as much propaganda as possible at any point during my lifetime, all of which is constructed with the intent of convincing us to embrace false narratives that will keep us passive and in a perpetual state of inertia, I can think of no better time than right now for the subject of today’s SmartKnowledgeU Podcast #6: Deciphering the Language of Lies.
please click on the above image and click the link “Watch this video on YouTube” to play Podcast #6: Deciphering the Language of LiesAbout the podcast’s creator: JS Kim is the Managing Director of SmartKnowledgeU, a research, education and consulting firm with a mission of helping Main Street avoid the fraud of Wall Street.
For more information, please visit us at https://www.smartknowledgeu.com, and join the SmartKnowledgeU LinkedIn Gold & Silver Wealth Preservation Strategy Group.
- Euro Slides After Reports Troika Is Preparing Greek Plan B, C, & D Including Parallel Currency
Earlier we detailed reports that The IMF was preparing a contingency plan in the event of a Greek default, and furthermore that Andrea Merkel was under increasing pressure to “let Greece go,” and now, as Eurogroup ministers begin to gather for today’s crucial ‘deal-or-no-deal’ meeting, Die Welt reports The Troika has 4 scenarios for Greece – one positive and three increasingly negative ranging from the need for further bailouts to paying staff in IOUs and issuing a parallel currency.
While Austria’s Hans Jorg Schelling sticks to his statement that:
“There’s nothing to it The Plan B was not discussed..”
It appears, yet again, another European elite was lying (because it was important), as now, as Die Welt reports (via Google Translate), hope is fading fast for a deal…
Shortly before the meeting of euro zone finance ministers in Brussels an agreement of Greece’s creditors is obviously further out of reach,with the danger of national bankruptcy looming.
Although the new negotiator from Athens is more “human pleasant” than the former team including the Greek Finance Minister Yannis Varoufakis said one of the negotiators of the creditors, “in terms of content but does not go ahead.”
And as Bloomberg headlines suggest, all is not well…
- *TROIKA GREEK PLANS INCL 1 POSITIVE, 3 NEGATIVE SCENARIOS: WELT
- *ONE TROIKA SCENATIO INCLUDES GREECE PAYING STAFF IN IOUS: WELT
- *WELT NEWSPAPER CITES PARTICIPANT IN NEGOTIATIONS WITH GREECE
And here is Die Welt explaining the scenarios (via HuffPo)…
Only one of four scenarios expects a success of the talks
One of the negotiators said the “world”: “The Greeks have just passed a law called ‘democratization of the public service’, which decides on the reinstatement of 13,000 civil servants.” This is clearly against the spirit of reform agreements with the troika of the IMF, European Central Bank (ECB) and European Commission.
Given the difficult situation planning IMF, European Central Bank (ECB) and the European Commission with a positive and three negative scenarios, told the daily newspaper of negotiation circles.
Only the Positive provides that Greece complies with all its obligations, so that Athens receives money until the end of the second auxiliary program.
“Almost all of Greece would be poorer than they are today”
The three other scenarios currently being discussed are negative from the perspective of all negotiators in gradations.
Scenario 1 assumes that a reform-minded government actually presents substantial proposals today, but the Greeks have thereby overestimated their financial reserves. The most important prerequisite for possible assistance to the ECB: “The Greeks really show good faith at the negotiating table,” it says in Brussels.
Scenario 2 assumes that half-hearted proposals the Greeks will not be accepted. Sometime during the next few weeks, Greece will be the debt with the IMF and the ECB can no longer pay off. If the Greek Government then willingly shows the further course of the crisis, when it quickly closes reform agreements with the Europeans and then turns on its debt, the whole thing could not get a grip, so the scenario of the Troika experts.
In Scenario 3, the troika of a completely uncooperative Greek government estimates. She begins to pay its employees and retirees in government IOUs known as IOUs, the beginning of the introduction of a parallel currency.
…
Three, four very hard years could come to Greece, puts it in Brussels. And almost all in Greece would then poorer than they are today.
Also in the CDU is now open talk about the “Plan B”: Compared with “image” said the CDU chairman in the Bundestag Budget Committee, Norbert Brackmann: “Of course, we play the various alternatives for Greece by. For this purpose a part, Grexit ‘as well as a third aid package. “
“Plan B” assumes more and more shape.
* * *
As we noted previuously, The Greeks have already drawn up the “New Drachma” notes… just in case…
As News247 reported in 2013, the
6 banknotes (designed by Paul Vatikioti) of 50, 100, 200, 500, 1000 and
10,000 drachmas have pictures of Cornelius Castoriadis, Odysseus
Elytis, Yiannis Moralis, Georgios Papanikolaou, Melina Mercouri and
Maria Callas…
* * *
Good luck
* * *
The result, for now, is some weakness in EURUSD – which we assume will be bid away gently as Europe opens to ‘prove’ that Grexit is nothing to worry about…
- 'Resilience' Is The New Black
Via Raul Ilargi Meijer's The Automatic Earth blog,
This is another essay from our friend Dr. Nelson Lebo III in New Zealand. Nelson is a certified expert in everything to do with resilience, especially how to build a home and a community designed to withstand disasters, be they natural or man-made, an earthquake or Baltimore. Aware that he may rub quite a few people the wrong way, he explains here why he has shifted from seeing what he does in the context of sustainability, to that of resilience. There’s something profoundly dark in that shift, but it’s not all bad.
Nelson Lebo III: Sustainability is so 2007. Those were the heady days before the Global Financial Crisis, before $2-plus/litre petrol here in New Zealand, before the failed Copenhagen Climate Summit, before the Christchurch earthquakes, before the Trans Pacific Partnership Agreement (TPP)…the list continues.
Since 2008, informed conversations on the economy, the environment, and energy have shifted from ‘sustainability’ to ‘resilience’. There are undoubtedly many reasons for this shift, but I’ll focus on just two: undeniable trends and a loss of faith. Let me explain.
Since 2008, most of the pre-existing trends in income inequality, extreme weather events and energy price volatility have ramped up. Sustainability is about halting and reversing these trends, but there is essentially no evidence of that type of progress, and in fact the data shows the opposite.
Plenty of quantitative data exists for the last seven years to document these accelerated trends, the most obvious is the continually widening gap between rich and poor everyone else. The second wave of commentary on the Baltimore riots (after the superficiality of the mainstream media) has been about the lack of economic activity and opportunity in many of the largely African-American neighbourhoods.
Tensions have been simmering for years (decades) and overzealous police activity appears to have been just been the spark. This should come as no surprise to anyone who has read The Spirit Level, or any similar research on the correlation between wealth inequality and social problems.
You can only push people so far before they crack. For residents of Baltimore’s disadvantaged neighbourhoods the inequities are obvious. People are not dumb. We can see the writing on the wall, and know for the most part that government on every level has not taken significant steps to embrace sustainability be it economic, environmental or social . To me it seems we are running on the fumes of debt on all three: over-extended financially on nearly all levels; over-extended on carbon emissions (and post oil peak); and a powder keg of social unrest waiting for a tipping point.
Which brings me to my second point: a loss of faith.
For most of my adult life I have banged the drum for sustainability. I don’t anymore. Sustainability is about voluntarily balancing three factors: human needs, environmental health, and economic viability. My observation is that it has been a failed movement and that the conversation has naturally shifted to resilience.
These observations do not come casually. I have worked full-time in the environmental/sustainability/resilience field for twenty-five years and I have a PhD in science and sustainability education.
Dennis Meadows, a well-known scientist who has been documenting unsustainable trends for over 40 years, puts it this way:
The problem that faces our societies is that we have developed industries and policies that were appropriate at a certain moment, but now start to reduce human welfare, like for example the oil and car industry. Their political and financial power is so great and they can prevent change. It is my expectation that they will succeed. This means that we are going to evolve through crisis, not through proactive change.
This is the same quote that Ilargi recently highlighted here at The Automatic Earth. Clearly it resonated with me.
This is not to say we cannot and should not be proactive. It is more about where we direct our ‘proactions.’ Being proactive about resilience means protecting one’s self, one’s family, and one’s community from the trends that make us vulnerable economically, socially and environmentally, as well as to sudden shocks to the system.
The recent earthquake in Nepal is another reminder of the critical importance of resilience. Before that it was Christchurch and Fukushima. In the wake of earthquakes we often hear about a lack of food and water in the effected area, along with disruptions to energy supplies in the wider region. In Nepal these have lead to significant social unrest.
Whether it is Kathmandu over the last month or New Orleans after Katrina, we know that we cannot count on “the government” for significant assistance in the immediate aftermath of natural disasters. Along the same lines, we cannot count on governments to protect us from unnatural disasters such as the TPP and TTIP.
Whether it is a potential earthquake or the next mega-storm and flood, the more prepared (ie, resilient) we are the better we will get through. Even rising energy prices and the probable effects of the TPP will siphon off money from our city and exacerbate social problems in our communities.
In most cases, the same strategies that contribute to resilience also contribute to a more ‘sustainable’ lifestyle. But where for most people sustainability is largely abstract and cerebral, resilience is more tangible. Perhaps that’s why more and more people are gravitating toward it.
Resilience is the new black.
A resilient home is one that protects its occupants’ health and wealth. From this perspective, the home would have adequate insulation, proper curtaining, Energy Star appliances, energy-efficient light bulbs, and an efficient heater. By investing in these things we are protecting our family’s health as well as future-proofing our power bills. Come what may, we are likely to weather the storm.
Beyond the above steps, a resilient household also collects rainwater, grows some of its own food, and has back-up systems for cooking and heating. When we did up an abandoned villa in Castlecliff, Whanganui, we included a 1,000 litre rain water tank, three independent heat sources, seven different ways to cook (ok, I got a little carried away), and a property brimming with fresh fruit and vege. These came on top of a warm, dry, home and a power bill of $27 per month. (We did it all for about half the cost of an average home in the city.)
A loss of power and water for two or three days would hardly be noticeable. A doubling of electricity or fresh vege prices would be a blip on the radar. During the record cold week in 2011 our home was heated for free by sunshine.
Sustainability may be warm and fuzzy, but resilience gets down to the brass tacks.
Above all else, I am deeply practical and conservative. The questions I ask are: does it work?; is it affordable?; can I fix it myself?; and, importantly, is it replicable? Over the last decade I have developed highly resilient properties in North America and New Zealand. All of these properties have been shared as examples of holistic, regenerative permaculture design and management. We have shared our experience locally using open-homes, workshops and property tours, as well as globally through the internet.
When the proverbial sh*t hits the fan, which all the trends tell us will happen, I know that I have done my best to help my family and community weather any storm be it a typhoon, an earthquake, rising energy prices, or the TPP.
- Merkel Under Pressure To Let Greece Go As Default Risk Rises
In case you forgot, Greece is on the brink of insolvency and without an agreement with creditors in the very near future, will default on its obligations to either the IMF, the ECB, its own citizens, or all of the above. The most pressing concern is a €750 million payment due to the IMF on Tuesday, a payment Greek FinMin Yanis Varoufakis says Athens will make, although it doesn’t seem as though anyone has a clear idea about exactly where the money will come from.
The important headlines from last week included an apparent split between the IMF and the rest of the Troika on what constitutes an acceptable list of reforms, a report that Greek banks were being cut off from interbank trading, and news that Varoufakis had distributed a Greek recovery “blueprint” containing estimates and assumptions that bore little resemblance to figures presented by PM Tsipras and his reshuffled negotiating team.
Now, with less than 48 hours to go until three quarters of a billion euros comes due to the IMF, Greece faces marathon negotiations on Monday with eurozone FinMins including the incorrigible, hot-tempered Wolfgang Schaeuble who made a splash on Saturday when he suggested that Athens may default “by accident” if the government continues to vacillate.
Via FAZ (Google translated):
Federal Finance Minister Wolfgang Schäuble has warned of the possibility of surprising Greek default. “Experiences elsewhere in the world have shown that a country can suddenly slip into insolvency,” Schaeuble told the Frankfurter Allgemeine Sonntagszeitung (FAS). He wanted a date in his first newspaper interview since detailed months but not speculate.
When asked whether the government had made preparations for such an eventuality, he said: “There are issues that can not answer a sensible politician. Otherwise there will be misunderstandings. Jean Claude Juncker once said, one must not take it then sometimes the truth always as accurate. I see these things more complicated. Therefore I say to prefer nothing at all. “
And while Schaeuble indicated that if Greece left the euro it would not be “because of” Germany, Bloomberg is reporting that Chancellor Merkel’s own party bloc now supports a Greek exit. Here’s more:
Members of Merkel’s Christian Democratic bloc are openly challenging her stance of keeping Europe’s most-indebted country in the 19-nation currency region. Even some officials in the Finance Ministry are leaning toward the conclusion that the euro area would be better off without Greece, two people familiar with the matter said.
“The euro would be strengthened if Greece left,” Alexander Radwan, a Merkel-affiliated lawmaker who voted for granting Greece a temporary extension of its bailout in February, said in an interview. “The other countries could then move closer together and apply the rules more strictly.”
With European finance ministers due to resume talks on Greece on Monday, hardening sentiment in Germany risks sending mixed signals to investors as Prime Minister Alexis Tsipras’s government attempts to reach a deal with creditors.
Merkel has repeatedly voiced public support for keeping the country in the euro, partly for geopolitical reasons. Other officials in her government view Greece as a rule-breaker and a drag on the region’s economy, said the people, who asked not to be named discussing the deliberations.
Finance Minister Wolfgang Schaeuble, a prominent German advocate of European unity for decades, has given plenty of signs of exasperation with Greece since Tsipras and Finance Minister Yanis Varoufakis took office in January on an anti-austerity platform.
Clearly, any statement from the Eurogroup on Monday has the potential to move markets, but we would also note that the ECB last week reserved judgement on hiking haircuts on collateral pledged by Greek banks for ELA until after tomorrow’s meeting. So although there’s probably room to extend and pretend from a political perspective, any move by the ECB to tighten the screws on the Greek banking sector could cause the situation to deteriorate rapidly and indeed, if an ECB ELA decision that’s ostensibly designed to push negotiations forward inadvertently causes a bank run with negotiations still stalled, Schaeuble’s “accidental” insolvency may well become reality.
- When Hyperinflation Hits In Japan, Robot Suits Will Help You Move Your Yen
It’s no secret that Japan is in the midst of what is perhaps the greatest (or most terrible, depending on whether you have a penchant for Keynesian madness or not) monetary experiment the world has ever known. With the blessing of PM Shinzo Abe and under the heavy hand of Governor Haruhiko Kuroda, the BoJ is printing enough money to monetize not only the entirety of JGB gross issuance, but also the entire Japanese ETF market, with the latter effort serving to underwrite record highs on the Nikkei.
In sum, the printing presses are working around the clock in Japan and as WSJ reports, when the government finally gets what it wants and the country’s descent into the Keynesian Twilight Zone finally ends in the worst example of hyperinflation the world has ever seen, no one will be forced to use a wheelbarrow to cart their yen around because in the new paranormal, you use exoskeletons to move your worthless fiat currency:
Sumitomo Mitsui Banking Corp., the core banking unit of Sumitomo Mitsui Financial Group Inc., said Thursday it has rented eight robotic suits developed by Japanese robotic maker Cyberdyne Inc. to ease the burden on the employees delivering cash. The bank says that would be a first among Japanese financial institutions.
“There have been many cases when a physical burden was placed on senior employees carrying heavy parcels of bank notes and coins. By adopting Cyberdyne’s robotic suits, we can help reduce that burden,” said Tomoyuki Narita, a spokesman at SMBC, Japan’s second-largest bank by assets after Bank of Tokyo-Mitsubishi UFJ.
SMBC Delivery Service Co., which mainly collects and delivers cash between bank outlets, has approximately 1,600 workers and about 16% of them are over age 65. “We are currently placing the robotic suits at four outposts” of the delivery service, “but we’ll consider adding them in more places including the bank’s branches after assessing the effects,” Mr. Narita said.
He said the Hybrid Assistive Limb or HAL suit could reduce the burden of carrying a heavy object by about 40%, so that carrying a 10-kilogram container of bank notes and coins would feel like six kilograms…
The robotics company shares a name with the fictional defense firm behind Skynet, the artificial intelligence system that turned Earth into an apocalyptic wasteland in the Terminator series.
* * *
Welcome to the future…
- Who Won The War?
- Goldilocks Unemployment: A Disgusting Bowl Of Porridge
Submitted by Mark St. Cyr
Goldilocks Unemployment: A Disgusting Bowl Of Porridge
It’s no wonder we find ourselves in this collective business environment of malaise and atrophy when people who are supposed to be informed, or anything else relating to business, use terms to describe the most recent jobs report as a “Goldilocks” print: i.e., “Not too bad – Not too good.”
This term was the moniker de jure of Friday’s cadre of financial media economists, analysts, and next in rotation fund manager. Nothing more than cheerleaders to stagflation is what they’ve all proven themselves to be in my opinion than anything else.
The actual print was that the economy created 223K new jobs vs expectations of 228K. Where the overall jobless rate now stands at 5.4 vs 5.5. The kicker? Not in the labor force: 93,194,000 up from 93,175,000. Let that last number sink in a moment.
We currently have over 93 Million able-bodied people without jobs – and growing. This is why it’s near incomprehensible, as well as outright disgusting to me that such a dismal showing in both the headline number as well as the onerous implications of such a downward revision to the month prior, coupled with the outright fallacy of suggesting the rate of unemployment has moved closer still to statistical “full employment” came with near giddiness and if not outright back slapping. i.e., “This is a Goldilocks print. Not too hot – not too cold. With a report like this – The Federal Reserve won’t dare raise rates and might actually have to contemplate instituting another round of QE if not outright QE4ever!” And yes; that was the reaction paraphrased across the financial media outlets. Again, personally – I found it all repulsive.
We now have the lowest participation rate since 1977 when Jimmy Carter was president. Although I was young during that period, I was around and working. (and when I wasn’t working, I was out looking daily) I will tell you this: one of the words never bandied about during that period when it came to describe any jobs or employment report was “Goldilocks.”
As a matter of fact it was during that period of time the term “stagflation” came into prominence. The difference? It was used to describe an abysmal economy while hoping at some point the winds would change and we could regain our bearings to move out from under such stifling economic conditions. Today?
As these conditions have once again reared their ugly head the difference is today: these conditions are celebrated by the so-called “smart crowd” as reason to JBTFD! (just buy the dip) For this malaise sends the “right” signals to the Federal Reserve they should dare not raise interest rates off the zero bound anytime soon, and instead prolong this economic atrophy with the possible infusion of yet another round of QE. After all with economic malaise like this – NASDAQ™ 10K here we come!
The best term I’ve heard yet to describe the current economic malaise, as well as market conditions, was coined by Bruno de Landevoisin: Stealthflation. The term says it all. Under the radar there’s deflation or the now less offensive “dis-inflation” happening everywhere.
Currently under the guise of “economic omnipotence” resulting from the outright adulterations of the capital markets, along with its cancerous effects metastasized within our economy; they’re spoon-feeding bogus “analysis” to an uninformed as well as ill-informed populace by a bunch of next in rotation “financial experts” that now have more in common with school cafeteria workers plopping out this weeks version of mystery meat. All while smiling and reciting: “Trust us, it’s good for you.” (My apologies to “lunch ladies” everywhere)
Scenes resembling the above can be seen daily when the next in rotation economist, fund manager, or big bank chief investing guru comes on to tout “how all this bad is just terrific for the markets.”
If you question the validity of the data? You’re either shouted down, talked over, or insulted with charges of: “You’re mad because you’ve been on the wrong side of the trade for X number of points, or months, or _________.”(fill in the blank)
Unless you stand in line like these roving bands of porridge seekers with bowls out pleading in their best Oliver Twist voice at the altar of the FOMC “Please, may I have another round of QE?” you’re the one who’s scolded or branded as some “economic heretic.”
It wouldn’t surprise me if CNBC™ in some desperate attempt to regain viewers might contemplate a reality segment where they actually “Put to the stake Live and On Air!” any who dare question their cafeteria “smart crowd.” Who knows, it can’t do worse than they are already. But I digress.
Again the economic stealth of all this malaise is that it seems that there are “economic benefits” as a result. There are – if the economy was only about “The Markets.”
The markets are vital when they are allowed to function according to the rules inherent within free market capitalism: where markets are allowed to clear through the true price discovery model. But that’s not what’s going on today.
People today look at these markets, or hear the latest prints touted as “proof” we’re on the right path. i.e., “The markets were up today near 300 points!” Or, “Employment figures show we created over 200K once again, and the UE figure dropped to 5.4%. Hooray!” However that porridge being spoon fed down the throats of the populace has more in common with the repulsive process for making Foie gras than anything else. And just like the goose – it’s just as harmful when used to evaluate the health of one’s financial future.
What doesn’t get near any of the attention that it should buried within these reports are the other figures that are hidden in plain sight as they are “reported” in a stealth like fashion. i.e,, “Oh, and the prior month’s numbers that were horrible? They were revised downward to – horrific. Nothing to see here, carry on, hope you enjoy your lunch.”
Unaware by many; the prior month’s abysmal report of 126K was revised lower to a pathetic 85K. That’s a reduction or “miss” of over 30%!
If we use the same revision or “miss” used to calculate last month’s report it’s entirely plausible today’s Goldilocks’ print of 223K could actually be closer to 153K. If so, what happens to Goldilocks?
Keep in mind – these are the stats of the BLS, and as such is it unreasonable to contemplate they would try to throw the best possible outcome or “look” to these reports? And even they felt the need to revise down last months figures from lackluster to abysmal! So what faith should one put into today’s report? That alone should send a shiver down one’s spine. But it doesn’t end there.
This financial meddling causes even greater distortions and malfeasance throughout the entire economic landscape.
Companies that should go out of business or downsize to better address their true economic health – don’t. They’re able to saddle their companies with burdensome debt prolonging their sclerotic endeavours leaving no room for the upstarts or level competitors that can beat them handily in both practice and ingenuity; for many will be unable to secure the financing needed because the “big boys” or “favored lobbied status” are allowed to continually operate and compete at “cash burn” rates with buy backs and more that would make a Silicon Valley startup jealous.
And speaking of “The Valley” here too the stealth of malfeasance plays out its onerous part just under the surface. Here companies that shouldn’t even be listened too, let alone funded, are able to burn through cash and subsequent rounds of funding in direct proportion to the availability of cheap and fast money made possible via the QE mechanism.
With so much “free cash” still sloshing around looking for anything with a possible “One out of Million” shot of making a penny. The game is still on as: to throw as many darts as possible. Rather, than take the time required to effectively sift through and gauge reality with fantasy. Because it’s still an “odds bet” rather than an “objective financial analysis” concern.
And it’s precisely in this type of environment startups that have real potential – for real profits – get lost in the quagmire of unicorn and rainbow pitch funding.
Today’s latest reincarnation of Oliver Twist by those of the so-called “smart crowd” with their bowls out pleading for another round of QE, are also the first to espouse their reasoning for why you, or I don’t get why all this putrid porridge is good for us. All they’ll say is, “It’s different this time.” Well maybe they have a point.
Back during those roaring days of screaming sideways into nowhere land known as the “Carter years,” then president Jimmy Carter gave what has been labeled as “The Malaise speech.” Actually the real name designated was “A Crisis of Confidence.”
That speech was an attempt in theory as to help bolster confidence that the economic conditions of poor employment, poor GDP growth, and a list of other economic measures could in fact be overcome if we regained our composure, and had faith and confidence, we could do better. The issue today?
The economic “smart crowd” is now confident (if not to a fault) that the malaise along with the deterioration in GDP as well as nearly every (if not all!) recent macro data point – is just the right mix of “not too hot – and not too cold” we need to stay right smack dab in it, waiting for the next meeting of the FOMC to see if the cafeteria will reopen so they can beg “Please…can they have another round?”
- Paul Craig Roberts: Economic Disinformation Keeps Financial Markets Up
Submitted by Paul Craig Roberts,
Friday’s payroll jobs report is more of the same. The Bureau of Labor Statistics claims that 223,000 new jobs were created in April. Let’s accept the claim and see where the jobs are.
- Specialty trade contractors are credited with 41,000 jobs equally split between residential and nonresidential. I believe these are home and building repairs and remodeling.
- The rest of the jobs, 182,000, are in domestic services.
- Despite store closings and weak retail sales, 12,000 people were hired in retail trade.
- Despite negative first quarter GDP growth, 62,000 people were hired in professional and business services, 67% of which are in administrative and waste services.
- Health care and social assistance accounted for 55,600 jobs of which ambulatory health care services, hospitals, and social assistance accounted for 85% of the jobs.
- Waitresses and bartenders account for 26,000 jobs, and government employed 10,000 new workers.
- There are no jobs in manufacturing.
- Mining, timber, oil and gas extraction lost jobs.
- Temporary help services (16,100 jobs) offered 3.7 times more jobs than law, accounting architecture, and engineering combined (4,500 jobs).
As I have pointed out for a number of years, according to the payroll jobs reports, the complexion of the US labor force is that of a Third World country. Most of the jobs created are lowly paid domestic services.
The well paying high productivity, high value-added jobs have been offshored and given to foreigners who work for less. This fact, more than the reduction in marginal income tax rates, is the reason for the rising inequality in the distribution of income and wealth.
Offshoring middle class jobs raises corporate profits and, thereby, the incomes of corporate owners (shareholders) and executives. But it reduces the incomes of the majority of the population who are forced into either lowly paid and part time jobs or unemployment.
The extraordinary decline in the labor force participation rate indicates shrinking opportunities for the American labor force. No economist should ever have accepted the claim that the economy was in recovery while participation in the labor force was declining.
The officially documented decline in the labor force participation rate casts additional doubt on the claimed increases in payroll jobs. If jobs are growing, the labor force participation rate should not be declining.
Having looked at the actual details of the payroll jobs report, which are seldom if ever reported in the financial media, let’s look at what else goes unreported in the media.
The government’s economic statistical agencies are under pressure not to roil the financial markets. Consequently, initial reports, which are always the headline reports, are as close as possible to the “consensus forecast” prepared by economists in the financial sector, whose jobs are to maintain a good atmosphere for financial instruments.
This practice results in optimistic advanced estimates and first estimates. The real reporting comes later in revisions. For example, today the headline was 223,000 new jobs, recovery on track, stock market up. What was not reported by the media is that the prior month’s (March) payroll jobs growth was cut to 85,000 jobs, substantially below population growth.
The same thing happens with the reporting of GDP growth. The first quarter GDP advanced estimate was kept in positive territory with a 0.2%–two-tenths of one percent–growth. When the revisions arrive, which we already know will be negative GDP growth due to the trade figure, they will not receive the same attention.
There are many additional problems with the economic reporting. I have written about a number of them in past reports. Here I will provide one more example. According to the payroll jobs report oil and gas extraction lost 3,300 jobs in April. This low number is inconsistent with what we know about layoffs from fracking operations. According to Challenger Gray, a private firm that tracks job cuts announced by corporations, in April 20,675 jobs were lost as a result of falling oil prices. That is more than six times the loss reported by the payroll jobs report.
Challenger Gray reports that during the first four months of this year, corporations have announced 201,796 job cuts. Obviously, corporations are not creating new jobs. That is why the BLS looks to waitresses, bartenders, remodeling contractors, government, and social services for employment growth.
Jobs offshoring has shriveled the employment opportunities for Americans. These shriveled opportunities are largely responsible for stagnation and decline in real median family incomes, for the falling labor force participation rate, for the rising inequality in the income and wealth distribution, and for student loans that cannot be repaid from the lowly paid jobs available. Corporations and Wall Street in pursuit of short-term profits have given the economy away. Much of the former US economy now belongs to China and India. Corporate executives and shareholders got rich off of this give-away.
- IMF Preparing Greek Default Contingency Plan
The biggest slow motion trainwreck in history, one that everyone knows how it ends just not when (especially since the “when” is about 5 years overdue), that of the Greek sovereign default may just got a bit more exciting earlier today when the WSJ reported that the IMF can no longer lie – like Mario Draghi did to Zero Hedge in 2013 – that there are preparation for a Plan B. To wit: “the International Monetary Fund is working with national authorities in southeastern Europe on contingency plans for a Greek default, a senior fund official said—a rare public admission that regulators are preparing for the potential failure to agree on continued aid for Athens.”
According to the WSJ, the IMF is focusing on nations neighboring Greece, asking their national banking supervisors to “ensure that subsidiaries of Greek banks have enough assets that they can exchange for emergency financing at their own central banks—in case financing from their parent institutions is suddenly cut off—and that deposit-insurance funds are at sufficient levels, Mr. Decressin said.”
In other words, have a Greek default Plan B ready, preferably right now.
“We are in a dialogue with all of these countries,” said Jörg Decressin, deputy director of the IMF’s Europe department. “We are talking with them about the contingency plans they have, what measures they can take.”
Greek banks are big players in some of its neighbors’ financial systems. In Bulgaria, subsidiaries of National Bank of Greece SA, Alpha Bank SA, Piraeus Bank SA and Eurobank Ergasias SA own around 22% of banking assets, roughly the same as Greek banks own in Macedonia. Greek banks are also active in Romania, Albania and Serbia.
Should anyone be worried that a day before the critical Eurozone meeting which was supposed to conclude the Greek bailout negotiations, not only is there not a deal but Greece is once again on the edge of collapse?
“It would be foolish for anyone in the policy world not to be worried at this stage,” Mr. Decressin said.
Thanks for the warning.
And while we have covered the background story in detail, here it is again: “European officials expect no breakthroughs at a meeting of the currency union’s finance ministers on Monday. That means Greek lenders will remain under pressure, dependent on relatively expensive liquidity from the Greek central bank and at risk of bank runs in case doubts emerge over their ability to pay out deposits.”
As noted above it is not if, but when. Here’s why.
Going back to the WSJ story, while there is nothing that has actually changed in the narrative, it is almost as if the IMF, having failed to spur a wholesale bank run in Greece, one that would have toppled the government, is now trying to spur bank runs in Greek bank subsidiaries in neighboring nations.
One scenario that the IMF is concerned about is what could happen if panic over Greece’s finances pushes savers in the region to pull their money out of Greek-owned banks. “These banks…may be totally fine, but there could still be in the population a perception, these are Greek banks and they are not fine, and people would turn up and try to withdraw their deposits. That is something you cannot model,” Mr. Decressin said.
National safety nets have in the past been vulnerable to rumor-fueled bank runs. In June last year, the Bulgarian government had to take over Corporate Commercial Bank, after depositors pulled out their savings amid negative news reports about the lender’s main shareholder. It took the government six months to compensate the bank’s depositors, far longer than the 25 days mandated under European Union law.
Of course, if there is a Greek default and suddenly it becomes clear to everyone that the unbreakable monetary union is quite, well, breakable, the IMF will have to worry not about bank runs in Bulgaria et al, but the countries in Europe’s periphery, such as the one with the second largest amount of sovereign debt outstanding: Italy, as well as Spain, Portugal and so on. Because if the common people have learned one thing, it is that if a political party is elected that the ECB does not approve of, that country’s days of financial mirth are over, and insolvent reality is just around the corner.
And just to make sure that the IMF’s concerns are unwarraned, the NYT reports that “discussions in the Greek government have included assessing the pros and cons of not paying the central bank and the monetary fund, said two people who were briefed on the discussions but who spoke on the condition of anonymity. In such a case, which was described as a last-ditch option and not a plan for action, Greece would keep paying debts owed to private sector bondholders and other European governments.”
What is most shocking is that it has taken the Greeks five years to realize there are no more pros to perpetuating the massive con that is it failed zombie nation status, one that has resulted in the biggest national depression in history.
- China To Build Military Base In Africa Next To Critical Oil Transit Choke Point
One year ago, we reported that while the west was scrambling to assure the world that it wasn’t collapsing courtesy of record central bank debt monetization even as number of people not in the US labor force steadily approaches 100 million, while peripheral Europe is saddled with 25% unemployment and 50%+ youth unemployment (but… but.. the stock markets are at all time highs), China was busy colonizing a new continent not only infrastructurally…..
… but militarily, in this case in the southern African nation which recently had achieved the pinnacle of Keynesian economic dogma: hyperinflation through currency debasement. Recall what the Zimbabwean wrote in March of 2014:
China is planning to set up a modern high-tech military base in the diamond-rich Marange fields, says a German-based website, Telescope News.
The news of the agreement to set up the first Chinese military airbase in Africa comes amid increasing bilateral cooperation between Zimbabwe and China – notably in mining, agriculture and preferential trade. China is the only country exempted from the indigenisation laws which force all foreign investors to cede 51% of their shareholding to carefully selected indigenous Zimbabweans.
The Marange story quoted unnamed military officials and a diplomat admitting knowledge of the plan to set up the base. Efforts to get a comment from the Zimbabwe Defence Forces were fruitless, as spokesperson Lt Col Alphios Makotore was consistently unavailable and did not respond to emails by the time of going to press.
The website speculated that China could be positioning itself for future “gunboat diplomacy” where its military presence would give it bargaining power against superpowers like the US. It would also be safeguarding its significant economic interests in Zimbabwe and the rest of Africa.
And while this is not a story about Zimbabwe, we should remind readers that Zimbabwe’s despotic ruler, a person widely loathed by the west (after being an object of “democratic” admiration in the 1980s and 1990s), Robert Mugabe has recently become a pawn of none other than China:
Confidential Central Intelligence Organisation documents leaked last year suggested that China had played a central role in retaining President Robert Mugabe in the July 31 elections, indicating that high level military officers had worked closely with the local army in poll strategies while Beijing bankrolled Zanu (PF).
China is Zimbabwe’s biggest trading partner after South Africa and has strategic economic interests in many African countries to guarantee raw materials, job sources and markets for its huge population. The new Chinese Ambassador to Zimbabwe, Lin Lin, recently said trade between the two countries last year exceeded the $1 billion mark. Yet Zimbabwe is only 26th on the list of China’s 58 biggest African trading partners.
The Asian country has supplied Zimbabwe with military hardware, including MIG jet fighters, tanks, armoured vehicles and rifles, since Independence.
Bottom line: one year ago China was well on its way to marking its territory in southern Africa, with a core military presence near the all important for global trade Cape of Good Hope which is the transit point for about 10% of global seaborne-traded oil.
Fast forward to today when AFP reports that after securing Southen Africa, China is now in process of securing the second critical geopolitical area in Africa: the horn, which just happens to be right next to the infamous Bab el-Mandeb Strait located by the recently infamous country of Yemen, which in recent months has been overrun by US-armed Houthi Rebels.
According to AFP, China is negotiating a military base in the strategic port of Djibouti, the president said, raising the prospect of US and Chinese bases side-by-side in the tiny Horn of Africa nation. “Discussions are ongoing,” President Ismail Omar Guelleh told AFP in an interview in Djibouti, saying Beijing’s presence would be “welcome”.
Why Djibouti? So China can have a bird’s eye view of everything that happens at the Bab el-Mandeb Strait: one of the top 5 oil choke points in the world: “An estimated 3.8 million bbl/d of crude oil and refined petroleum products flowed through this waterway in 2013 toward Europe, the United States, and Asia, an increase from 2.9 million bbl/d in 2009. Oil shipped through the strait decreased by almost one-third in 2009 because of the global economic downturn and the decline in northbound oil shipments to Europe. Northbound oil shipments increased through Bab el-Mandeb Strait in 2013, and more than half of the traffic, about 2.1 million bbl/d, moved northbound to the Suez Canal and SUMED Pipeline.”
Ironically, Djibouti is already home to Camp Lemonnier, the US military headquarters on the continent, used for covert, anti-terror and other operations in Yemen, Somalia and elsewhere across Africa.
The US is not alone: France and Japan also have bases in the port, a former French colony that guards the entrance to the Red Sea and the Suez Canal, and which has been used by European and other international navies as a base in the fight against piracy from neighbouring Somalia.
And now here comes China.
China is already financing several major infrastructure projects estimated to total more than $9 billion, including improved ports, airports and railway lines to landlocked Ethiopia, for whom Djibouti is a lifeline port.
“France’s presence is old, and the Americans found that the position of Djibouti could help in the fight against terrorism in the region,” Guelleh said.
“The Japanese want to protect themselves from piracy — and now the Chinese also want to protect their interests, and they are welcome,” he said.
Djibouti overseas the narrow Bab al-Mandeb straits, the channel separating Africa from Arabia and one of the busiest shipping lanes in the world, leading into the Red Sea and northwards to the Mediterranean.
The US will be very angry, especially since Washington was already angry when Djibouti and Beijing signed a military agreement allowing the Chinese navy to use Djibouti port in February 2014. Surely the US top diplomat will not be happy to learn that now China aims to install a permanent military base in Obock, Djibouti’s northern port city.
Then again, John Kerry and the US State Department may have more than enough domestic scandals on their plate, now that everyone is demanding (or should be) to learn out why said Department will not investigate Hillary Clinton’s breach of protocol and abuse of her foundation for personal financial gain offset by US diplomatic “favors.”
Meanwhile, China’s colonization – both peaceful and military – of Africa will continue, as will its increasing presence in determining who decides which way the world’s oil flows.
- The 'Lumbering' US Economy
While Crude and Copper get all the glory, the fact is, as we have detailed previously, Lumber prices are the most correlated with economic activity (ISM and GDP) of all industrial commodities. That is quickly becoming a major problem for the "Q1 was weather and now we get the epic bounceback" narrative writers.
Now where have seen this before?
Or this…
And for good measure, builder remain oblivious to their key raw material's diminished demand (or mal-invested supply)…
It's just a matter of time, as we detailed previously.
But consensus sell-side economist dreams remain oblivious…
But perhaps it's time to start paying attention to Lumber and The Atlanta Fed model…
Charts: @Not_Jim_Cramer
- Which Countries Are The Most Paranoid?
They say it’s not paranoia if they are really out to get you.
Following first the 2013 revelations by Edward Snowden that the NSA was indeed out to get virtually every American, as well as last week’s Federal appeal’s court decision that the NSA’s mass spying and collection of virtually all American phone records was not authorized by the Patriot Act and was thus illegal, for Americans it was confirmed that wasn’t paranoia, but none other than the government was out to get them all.
As such, we find it somewhat odd that in the following chart showing global sentiment toward paranoia, measured by responses whether others are out to take advantage of you or, instead, others try to be fair, the US ranks almost smack in the middle, with respondents in countries such as Japan, Argentina, Turkey and even Germany ranking more “paranoid” than Americans (offset by such socialist utopias as Sweden and Norway, where altruism seems to reign supreme; the presence of China in this grouping is somewhat questionable).
Then again. considering the survey was originally conducted in 2011 by the World Values Survey organization, somehow we doubt the US would rank quite as netural now as it did 4 years ago.
Source: John Nelson
- Chart Of The Day: Record Stock Buybacks Hit Escape Velocity
As regular readers are no doubt aware, the persistent bid under the US equity market during Q1 came courtesy of price insensitive corporate managment teams who, in a rush to take advantage of rock-bottom borrowing costs just in case the Fed decides to go crazy and actually raise rates later this year, have issued a record amount of debt and plowed the proceeds back into their own shares, artificially inflating the bottom line and boosting their own equity-linked compensation in the process.
As we noted earlier today, repurchase authorizations hit a record $141 billion last month, providing investors (and the SNB) with an excellent opportunity to frontrun corporate buybacks and giving the centrally-planned, 6-year rally one more excuse to continue for a few more months.
With that said, we present the following chart from Deutsche Bank which explains just how it is that US stocks are near record levels even in the absence of a bid from households and institutions.
* * *
Bonus chart:
- The Most Imminent And Paramount Question For Americans Today!
Submitted by Thad Beversdorf via FirstRebuttal.com,
Quite rightfully, there appears to be an increasing amount of debate around the Trans-Pacific Partnership (TPP). Ah yes ‘free trade’. If I had a nickel for every time I got into a free trade debate I’d be a very rich man. This is one of those great topics for which both sides can make a very strong academic case and so everyone walks away from the discussion feeling they won. This is why it’s such a popular debate amongst academics. But this particular free trade discussion needs to address not so much the deal itself but the delivery process. Allow me to explain.
The thing about free trade is that it really has nothing to do with free trade. It’s a regulatory maneuver pure and simple. We know the champions of free trade are corporations because they are the profiteers of reallocating working capital out of heavy US regulatory environments and into much lighter emerging market regulatory environments. This is very much a distinction that needs to be made.
What supporters of free trade argue is that it allows a free flow of trade to regions with competitive advantages and thus putting capital to use in the most efficient ways (if they don’t, that is the argument they should be using). However, the stark reality is emerging markets rarely have competitive advantages in any realm over developed industrial nations. For instance, the Chinese workers are less productive than American workers and so the cost advantage from labour is not due to higher productivity in China but to much softer wage regulations.
The result is that Americans are losing out on critical manufacturing sector jobs, which is where the American middle class was built. The free trade champions will argue that because we no longer have a competitive advantage in that type of work we should retrain workers into areas we still have that advantage. But again, this has nothing to do with competitive advantage. It’s a convenient argument because it sounds logical if the facts are true. But the fact that we don’t have a competitive advantage in manufacturing is just not true. What we have are large dislocations in regulation. For better or worse, American regulation require corporations to provide a much higher level of overall compensation for domestic employees than regulation does for foreign employees. And the free trade deals very clearly provide a mechanism by which US corporations can swap heavy i.e. costly US regulation for very light foreign regulation.
Now that’s a fairly standard style free trade debate but the current debate over TPP is more about the legality of the executive branch request to fast track this free trade deal hidden behind a wall of secrecy, i.e. the details are classified. I’m really at a loss on this one. If you read my work regularly you are familiar with my angst on American apathy toward our Constitutional rights. Every week another slew of Constitutional rights are being creatively and quietly withdrawn. This has been ongoing for decades but at an extraordinary pace over the past 15 years.
The fact that Americans have been so willing to part with their guaranteed Constitutional rights has really emboldened our legislature and executive branches of government to go full bore against the Constitution. We allow them to spy on us, to imprison us without due process and now to remove us completely from the legislative process. So in effect we are no longer a self-governed democracy in any way, shape or form. Somebody somewhere explain to me why that proposition is untrue. And please do not go down the road of well we vote for a representative and that is how we impose our will on the legislative process. Save that for whatever dumbshit, drunkass moron it worked on last night at the bar because that doesn’t meet the required standard of debate here sir.
In short we have yet another example of blatant disrespect and disregard for the very process that defines our nation as a self-governed democracy. Each time we allow the President or legislature to circumvent the will of the people without prosecuting them we place another set of chains around our necks. This nation has imprisoned millions of men and women for smoking marijuana, an activity that will be legal in all 50 states at some point in the near future. At the same time, we have not prosecuted one president, policymaker or legislator for breaking Constitutional laws that have now resulted in the unjustified deaths of tens of thousands of American soldiers and innocent civilians and the immeasurable destruction of the very system promised us by those that created this once great nation.
That is heavy heavy stuff. Yet for some reason we apparently feel much more threatened by a guy smoking a joint in his house than we do by the most powerful men in the world tacitly rendering our Constitution a paper tiger.
Is it that we don’t care? Is it that we don’t see it? Is it that we are masochists? What is it about us that makes us so apathetic to the atrocities against our Constitutional rights? They are there for our protection and so, to we the people, they are assets that require maintenance but we are leaving them to be destroyed by the political elements. I am really at a loss on this one. It seems to go in the face of the basic instinct for self survival.
Now I get that inner cities are being supported by government hand outs and so they will be hesitant to rock the boat. Although that is becoming less and less the case isn’t it. But I mean even amongst well versed, well educated and very interested Americans there seems to be very little concern, judging by reaction, to the fact that our Constitutional rights are quite blatantly at this point, being taken away from us. Why is that not creating more of an agitated response??
This is the discussion, this is the debate that needs to happen over TPP. Corporations will always push for higher profits, that we know, but why does our government feel confident enough to blatantly negate our Constitutional rights so openly in America now? That is with certainty, the most imminent and paramount question we need to be working on as a free society today or soon we won’t have the right to discuss such things.
- "Bush vs Clinton" – If The Election Were Held Today, Who Would Win?
According to a new poll conducted by Bloomberg Politics/Purple Insights there is now even less of a clear frontrunner for GOP presidential candidate with than there was several months ago. The reason: Marco Rubio’s support among GOP primary voters has been rising while Jeb Bush’s has fallen off, depriving him of his leading spot in the polls.
The poll was conducted by Purple Insights, and found that while Rubio’s support has doubled from 5% to 11% since a similar poll conducted in February, Bush has dropped 5% to 11%, putting him into second place behind Rand Paul and Scott Walker tied for first.
Some of the key highlights from the Bloomberg poll:
- Scott Walker leads when first and second choices among likely GOP primary voters are combined — a positive sign for his prospects in N.H. He’s backed by 24% in that case, followed by 21% for Bush and Paul and 20% for Rubio.
- Paul leads the GOP field in support among independents, with 18% support. Bush is relatively weak among independents — while drawing support from 15% of Republicans, he has the backing of just 6% of independents.
- Trump was selected by 8% of likely GOP primary voters—up 5 percentage points from February.
- When asked to choose whether Clinton or Bush would be the next president, 33% of N.H. likely general-election voters said Clinton, 27% didn’t venture a guess, 22% said someone else and 18% said Bush.
And while there is much confusion in the GOP field, Democrats are far more clear who they will pick as their candidate. With 62% support among likely Democratic primary voters – her best showing in this poll since November, Hillary Clinton has an insurmountable lead, suggesting the relentless wave of negative stories about the Clinton Foundation and her use of a private e-mail server have not hurt her among the party’s base.
Clinton’s closest New Hampshire primary competitor, Sen. Bernie Sanders, has 18%.
But since the outcome of the primaries has already been largely pre-determined, and America will soon to be presented with the next dynastic iteration of the “Bush vs Clinton” false dilemma, here is how the key (non) question breaks down as of this moment: if the 2016 election were held today, for whom would you vote?
It is not only Bush who is “close” to Clinton. According to the pol. three GOP candidates are now within three points of Hillary. In addition to leading Bush by a small margin, she is also ahead of Paul (46-43%) and Rubio (44-42%).
Bloomberg suggest that these are “warning signs” for Clinton. Since the last poll in February, three of the top-polling Republican candidates—Bush, Paul, and Rubio—have moved into striking distance and are now within the poll’s margin of error of tying her in hypothetical match-ups.
Perhaps because nothing makes a competition more “credible” than giving the impression that there is an actual choice.
And while nothing shows more clearly that America has absolutely no real options if all it boils down once more is another case of “Bush vs Clinton”, some naive, delued invidiuals – elsewhere known as “independents” – still believe that the US democratic machine is not only functioning but well greased.
“Clinton’s strength in the primary remains historic,” said Purple Insights’ Doug Usher. “But she’s facing the laws of political gravity among independent voters more quickly than her campaign might have hoped.”
Clinton’s numbers with independent voters were destined to fall at some point, Usher said, as the campaign becomes more fully formed and intensely competitive.
Among independent general-election voters in New Hampshire, Clinton is tied or nearly tied with Bush, Paul and Rubio. She does better against Walker with this group, leading 42 percent to 36 percent.
Poll respondent Stephanie Korb, 57, a Republican dental assistant from Belmont, N.H., said she is leaning toward Rubio.
“He seems like a less offensive choice than the others,” she said. “I want to hear what the candidates want to do to turn this country around and you’re not hearing that.”
…
Part of Paul’s strength is his ability to attract independent voters, a key group especially in New Hampshire, where they can vote in partisan primaries. He’s supported by 18 percent of independents who said they were likely to vote in the Republican primary, easily the most of anyone in the field. That means he’s going to want to see the state’s Democratic primary remain a lopsided affair, prompting independents to stick with the action on the Republican side and continue to support him.
Bush is relatively weak among independents. While drawing support from 15 percent of Republicans, he has the backing of just 6 percent of independents. That’s a potential problem for Bush, especially if he runs poorly in the Iowa caucuses set for the week before New Hampshire’s primary. A Quinnipiac University poll released last week showed Bush in 7th place in Iowa, so he might need a top finish in New Hampshire to rebound.
One can read more about America’s so-called decisionmaking process over at the Bloomberg website.
- When Obama Talks About His "Massive Fight" With Wall Street, What Exactly Does He Refer To?
On one hand, none other than the company whose very future depends on the continuity of the financial status quo (that would be Bloomberg whose 200,000 Bloomberg terminals are the cashflow lifeblood of the company and for which another financial crash would mean a huge hit to the bottom line as millions of financial workers are again laid off) has a cover story, as well as a cover, depicting Elizabeth Warren as Wall Street’s bogeyman.
On the other hand, we now learn that Warren is also warning that Obama’s pet trade project, the 12-nation Trans-Pacific Partnership (TPP) which is supposed to counter the ascendence of China in global trade, has been warning about the potential damage of the trade deal and has been arguing that the deal would cost American jobs (for more on the topic, see “Free Trade Is Plutocratic Propaganda“).
And Obama is not happy: according to the NYT, Obama called Warren “absolutely wrong” in his criticism of the TPP.
“The truth of the matter is that Elizabeth is, you know, a politician like everybody else,” Mr. Obama told Matt Bai of Yahoo News in an interview conducted on Friday at Nike’s headquarters near Beaverton, Ore. “And, you know, she’s got a voice that she wants to get out there, and I understand that. And on most issues, she and I deeply agree. On this one, though, her arguments don’t stand the test of fact and scrutiny.”
Ms. Warren, a former Harvard law professor, has become an outspoken leader of those Democrats who argue that the agreement would cost American jobs.
But neither the fate of the TPP, nor what happens with global trade (spoiler alert: it continues to collapse in a world in which central banks micromanage everything and in which there is a global race to the currency bottom), nor the increasingly hostile relationship between the president and the potential Democratic presidential candidate (not to mention a big part of his liberal base) is what we would like to focus here, but the following quite amusing excerpt from the NYT piece:
[Obama] seemed most irritated at Ms. Warren’s suggestion that the trade pact could be used as a vehicle to undercut the financial overhaul that Mr. Obama signed in 2010 in response to the Wall Street excesses that led to the recession.
The punchline:
“She’s absolutely wrong,” Mr. Obama said in the interview. “Think about the logic of that, right? The notion that I had this massive fight with Wall Street to make sure that we don’t repeat what happened in 2007, 2008, and then I sign a provision that would unravel it?” He added, “I’d have to be pretty stupid.”
One simply does not know how to respond here, because when Obama talks of a “massive fight” with Wall Street, is he referring to:
- the tens of billions in handouts handed to each and every bank, unleashing the age of socialized losses and privatized profits?
- the condification of the Too Big To Fail concept?
- presiding over a Department of “Justice” that openly admitted it would not prosecute certain bankers over fears of systemic collapse consequences, thus mathin up TBTF with Too Big To Prosecute?
- the implementation of Barney Frank which was supposed to rein in banks and instead had Citigroup lawyers and lobbysists write the language write the language in the Derivatives Swaps Out provision of the Omnibus bill as a result of $70.3 trillion in total Citigroup derivatives, which the bank knows will one day require another taxpayer bailout?
Needless to say we are very confused just which “unraveling” of Obama’s “massive fight” with Wall Street the president is refering to.
As for Obama “having to be pretty stupid“, we’ll let readers decide that one.
- The Age Of Cryptocurrency
“Bitcoin represents a monumental paradigm shift that will transform the social, political and economic landscape,” according to Paul Vigna and Michael J. Casey in this presentation. Since its advent, Bitcoin has gained a reputation for instability and illicit business; naysayers fear its power to eliminate jobs and upend the concept of a nation-state. Vigna and Casey show that cryptocurrencies can also bring good. For one, they remove the middleman from the financial system, giving the power to the people and safeguarding from the devastation of a 2008-type crash. They also promote financial equality; Bitcoin has already given the world’s unbanked – those marginalized billions who’ve never had a bank account – unprecedented access to the global economy.
- If The Clintons Had Body Cameras
- Something Doesn't Add Up – Strong Jobs, Weak Spending, Sagging Sales
Submitted by Jeffrey Snider via Alhambra Investment Partners,
The problem with the employment report is not just about how it is calculated but more so that it is taken as the definitive measure of economic performance. The notion itself, conceptually at least, isn’t assaultive as the modern economy is entirely about the division of labor and specialization, so anything that deals in that subject matter is already in the right place. This particular brand of economic account, however, isn’t so definitive as to have earned such blind faith, especially during this “cycle.”
As it is, the Establishment Survey and unemployment rate are lagging indications, not forward-looking. The unemployment rate, at its best, may be able to say something about what just happened but is far less intuitive about what will happen. That point really gets lost in the shuffle, especially from the “establishment” that is clinging to anything that might suggest there will never be any economic refutation to monetary “magic.”
March’s bad jobs numbers plus a slew of other bad economic data — which combined for a pathetically slow GDP growth number for the first three months of the year — had some worried that the reasonably strong jobs and overall growth of 2014 had come to a halt. The good news is that March, and the first quarter, may have been a bit of a blip — today’s report also indicated that February’s numbers were even stronger than expected, adding 266,000 jobs.
That’s some sure selective reading about the economy, not the least of which is the internals of the payroll report itself. The economy has “come to a halt” in terms of both big and small; the big being in late 2007 as the level of actual and beneficial employment since then has shrunk in even absolute terms, and in relative terms it is something of a depression. In the “small”, there is the matter of the “dollar.”
Just as the economy, via the Establishment Survey, was taking off, the rest of it did the opposite. That much is clear from the spending figures all over the place, from PCE to retail sales, that show this sinking nature is much more the baseline and anything high and “great” the deviation.
It is not consistent with a booming economy, recovery or anything else that the count of employment should so rapidly increase but nothing else does in association. Not only is household spending declining at the retail level, wholesale sales continue to fall off too. And we have yet to see inventory turn lower with sales, meaning the twin (potential) disaster of overcapacity and overproduction simultaneously.
The latest estimates from the Commerce Department show that wholesale sales for March were down again by 1.3% year-over-year. In seasonally-adjusted terms, sales have declined now for eight consecutive months.
Balanced against those declines is inventory still rising. Y/Y in the unadjusted set, wholesale inventories were up again, this month by 4.9%. That has left inventories split from sales to a degree not seen since the worst days of the Great Recession. You can make the argument that conditions now are far better than those, and that businesses will hold on to high levels of inventory in anticipation of the turnaround everyone has been talking up incessantly, but businesses have been told that story before (notably just last year) to no avail and the particular conventions of business have not been repealed as monetary faithholders would have everyone believe. Inventory is inventory, and it must be dealt with when it gains these kinds of extremes.
While sales have tailed off, there is no sign of that in the inventory part. The common defensive instinct is to write that off as a matter purely of petroleum, but the fact is that non-petroleum inventories have gotten way out of hand in relation to non-petroleum sales; and they have done so in coincidence to all this great job creation.
In seasonally-adjusted terms, wholesale sales ex petroleum are down 3% since so far in 2015, showing no net growth since July of last year. Again, that is the same period as when the Establishment Survey shows the greatest gains since the late 1990’s. The incongruence is astounding, yet for all economic commentary it is the raw job count of the highly adjusted BLS figures that stands in for what might actually be happening; and then worse, those same, dubious “payroll” figures are used for forecasting where the economy is going next.
From that, you can begin to see why the recovery economists are so sure is right around the corner never is. What we can reasonably assume here is that the economy was bumped in a manner not seen since the Great Recession, and that we still don’t know how that will be resolved. The inventory problem is enormous and it at least suggests far more humility about assured rebounds that have never yet arrived and to which are based on arguable figures that at best are backward facing.
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fame, “Oncologists are some of the highest paid doctors, their average income is increasing faster than any other specialist in the medical field, and more than half their income comes from selling and administering chemotherapy.”
Saving...
