Friday, June 12, 2015

Bring your own Unicorn

House Democrats lead by Nancy Pelosi have nixed a key provision of Obama's free trade Bill effectively killing it for the time being. In reality it was the failure of Republicans to pass it as they control the House, so it's probably just their way of embarrassing Obama before doing their Corporate Masters bidding next week. Republicans seem to keep forgetting that Obama isn't running for a third term, and this will give Democrats a stick to beat job exporting Republicans with before next year's election.

Job creation was a robust 280,000 for May and the March number was revised upward by 32,000 to 116,000. Hourly wages rose by 8 cents to 24.96 and over the past year wages rose 2.3 percent. Considering that the minimum wage should be $22/hour these positive numbers are rather lackluster and simply reflect the 'success' of Reagan's war on the Middle Class.

Greece appears to be getting close to an actual showdown with its creditors because the sticking point being their refusal eliminate old age pensions. Bankers really don't like keeping people alive who can no longer work.

There's still time for the European Central Bank and the IMF to come to an agreement with Greece. That is unless they are really set on making an example them. Spain is only months from going with a similar populist political party set to sweep into power before year's end. So far there have been no real negotiations, simply a slander campaign in the media with the hopes that the bankers could destabilize the populist Syriza Party government.

The wildcard in all of this are the Chinese who have made moves suggesting they might be inclined to help Greece if they drop out of the euro. These days yuans spend as good as anything and China would just love becoming a major player in the Reserve Currency business by pushing the euro into 3rd place. Once Greece drops out of the euro there would be incentive for a line of debt ridden countries to bail out if China provides a soft landing.

Twitter @BruceEnberg - where we are always holding out hope for a Fascism Free world. Bring your own Unicorn.

Tuesday, May 26, 2015

With Stetson in hand

Weekly unemployment claims continue to hover at levels that predate the Bush Administration, this despite the supposed boom that Bush created by cutting taxes for the rich & after Obama raising them back up again supposedly hurt investment from the Job Creators.

Job creation numbers for April have moved back up to normal levels again now that the West Coast port strike is over and the truck driver labor actions to recover stolen wages have been successful. Trucking companies will no longer be able to pretend their drivers aren't employes and will pay huge amounts in back pay and penalties.

Greece is coming to its monthly crisis about paying its creditors or not. The IMF and private bankers are still demanding grueling austerity and the privatization of public assets. Greece's new government continues to simply say no. At some point the euro bankers are going to give in or Greece will start printing its own money.

The indignados (the outraged) Party has swept local elections across Spain to the chagrin of the ruling party. With General Elections required before the end of the year this anti-austerity party seems poised to take control of Spain less than a year after Syriza took control of Greece running on the same platform. This has to give the euro bankers pause or maybe they just don't care. It's not like their attempts conquer Europe will be met with War Crimes trials this time. There's always the potential for them to acquire more wealth and power next year.

The Texans have momentarily halted their threats of Secession to instead call on the Yankee Carpetbaggers to send them still more disaster relief. How can the Red States complain with a straight face about Federal Government spending when everyone of them get considerably more money back than they pay in? The Texas economy narrowly avoided free fall when the plunge in oil prices gave way to a partial recovery, it seems it wasn't Conservative pro-business policies causing the Texas Boom but simply the high price of oil.  

Twitter @BruceEnberg - where you can learn how Obama is using the cover of Jade Helm to invade Mexico and force them at gunpoint to take Texas back.

Friday, May 1, 2015

I'll bet you a Yuan to a Baklava

First Quarter US GDP came in at 0.2%, which is down from 2.2% in the Fourth Quarter. This isn't really a huge drop in US economic growth as you might think at first blush. When GDP is calculated exports are added and imports are subtracted. The strong USD is making imports 'cheaper' and throttling exports to euro using countries that must pay much higher prices for US goods. 

China of course is right there to sell the exact same things as the US at a more favorable exchange rate as more countries are simply trading in the yuan instead of converting them to USD first. Not that the US is a big exporter anyway, but Europe does use the US as a 'cheap labor' factory floor. Overall the top US exports are gasoline, fuel oil and petrochemicals. Our chief 'manufactured' export to China remains recycled cardboard.

Greece and Germany continue a tit for tat game of threats, insults and kabuki theater. Greece has made clear that they are tired of being taken advantage of while Germany pretends that they're the real victim of a lazy childish bully. Germany wasn't amused that some in Greek government pointed out that Germany still owes reparations for the occupation and looting of Greece during WWII. Today Germany does the looting with bankers and Current Account surpluses instead of Panzers and Messerschmidts.

So far the only ground the Greeks have given to the bankers is that Prime Minister Tsipras has rotated (but not removed) Finance Minister Varoufakis from his position as lead negotiator. The Germans and other European pirates (I mean bankers) really don't like him as he easily cuts through their BS of austerity

Varoufakis is an economics professor from an affluent family with dual Greek/Australian citizenship.  He is handsome, flamboyant & outspoken on issues of social justice worldwide having traveled extensively along the world's major dividing lines in Palestine, Ethiopia-Eritrea, Kosovo, Belfast, Cyprus, Kashmir and the US-Mexico border.  He's basically a combination of Paul Krugman, Alan Grayson and Bono. I'm guessing that the Greeks got some major concessions just for moving him out of the spotlight.     

A German newspaper is reporting that Germany intends to keep Greece in the euro even after default which everyone keeps saying is inevitable, even though each deadline passes with no actual crisis. As I predicted China has shown an interest in helping Greece and Greece is said to be preparing to issue its own parallel currency. This is likely why the European Central Bank has continued to make loans to Greek banks despite early threats to cut them off, they really don't want China getting a foothold among the southern European countries that they've been looting. 

It appears that Greece's creditors have just been running a Fox News style campaign hoping to undermine the Greek government to no avail. They've even gotten US Treasury Sec Jacob Lew to issue dire warnings about the suffering Greek citizens will endure if their government defaults to its creditors and drops out of the euro. But Greek citizens are suffering so much already and the demands of the bankers for even more draconian measures has those 'warnings' falling on deaf ears. 

Even though the media has labeled the ruling party as leftist and extremists, in reality they're competent, no nonsense centrists along the lines of FDR and the New Deal. Too bad we don't have that here. 
Twitter @BruceEnberg - I'll bet you a yuan to a baklava that Greece is going to win this game.

Friday, March 27, 2015

Things are up and that has Conservatives saying that they're down

A lot of contradictory statements are appearing in the business news about the debt crisis in Greece. The usual suspects blame the Greek people for being lazy tax evading leeches living off the welfare state. In fact per capita economic output is higher in Greece than in several US Red States, at least it was before austerity. Greece does have a problem with tax evasion, basically the rich feel entitled to not pay them, just like in the US. The new so called 'far left' government vows to do something about tax collection and since they aren't in the pockets of the rich they probably will. In the US the rich don't so much evade taxes illegally, they just have tax evasion decriminalized so that they accomplish the same goal.

The Greek government has made it clear that they have no intention of paying their creditors without a deal that reduces their debt payment burden to a manageable level. To some this seems outrageous but Greece didn't have a debt problem until they were set upon by Wall Street banks that drove up the interest rates that they had to pay. The subsequent austerity demands from German banks wrecked their economy making debt management impossible. The so called bailout requires that the entire country of Greece be privatized from ports, railroads, and other infrasture to all public lands including Greek antiquities. During the Bush administration there was a concerted effort to do that in the US and that scam has never really gone away, it's just concentrated in the Red States.

With Germany's outrageous trade surplus the euro is really the deutschmark. The Germans are stuck between two factions. Those that want to make an example of Greece and throw them out of the euro and those who see the rest of Europe following the Greeks out the door making the euro worthless. So far the Germans have been giving ground despite claims in the Conservative media suggesting that Greece is on the ropes.

In more news that contradicts the Conservative media: 'strategists' (what ever that means) that work for the Bank of America Merrill Lynch are saying that this October the International Monetary Fund will add the Chinese yuan to the basket of currencies that make up the "Special Drawing Rights" fund that the IMF uses for its transactions.

Currently there are only four currencies used for this purpose, the USD, euro, British pound and the Japanese yen. This would make the yuan officially one of the world's major currencies. In fact the yuan is already held as a reserve currency by many foreign countries. A reserve currency is used to settle international trade transactions. Most countries used to exchange yuans for USD on each side of the trade, but not so much anymore. The US doesn't have much to sell anymore, so it simply makes sense to do the trade in the currency of the world's dominate economic power.

The ascendency of renminbi (the People's currency) to world domination contradicts the constant drone from the right that China is on the verge of collapse any day now, they've been saying that for 35 years. The other name for China's currency is actually slang, yuan translates as 'round' like coins. The Right likes to say China has moved from Communism to capitalism. The Right used to say that would make China democratic, they don't say that anymore because they don't even pretend to want democracy here, just capitalism.

At least the USD is currently pretty strong and since the typical American consumes a lot of imports that's a good thing. A strong dollar is bad for exports, but we don't make anything anymore, so it's not really a problem. So when a Conservative tells you that Obama is debasing the currency you could point this out. It's not going to make a dent in the Conservatives though, they think the dollar has been debased because an ounce of gold won't buy as many dollars as it did at the height of the Bush Crash. This is of course the opposite of the USD being debased, but Obama is still Black and that's what they really care about.

Twitter @BruceEnberg - where up is still up, and down is still down, no matter what Conservatives say.

Tuesday, March 10, 2015

50 years since Selma

To be Conservative is to oppose change. That definition is too kind, to be Conservative is to embrace evil.

Friday, March 6, 2015

Things Sweet and Sour but otherwise mundane

Another month and Obama sets another record of continuous months of job growth, now at 59 months, and this was a good one. According to employers they hired 295,000 new workers in February and the household survey of workers dropped the unemployment rate to 5.5%. This is half the rate that Obama inherited, but the Republicans insist this simply doesn't count because of the 'low' Workforce Participation Rate. The official Conservative Talking Points don't mention Participation so much anymore since the rate actually started to edge up five months ago even though Baby Boomers continue to retire.

Oil has been trending up in price lately as well as gasoline, but the people who keep track of the big storage tanks in the US are saying that most of them are full, and by mid-April there will be no place to put oil. This suggests that we're likely to see a market crash taking the price back to pre-Operation Iraqi Liberation (OIL) levels. The main reason that there is an oversupply is that there are two basic types of oil 'light sweet crude' and 'heavy sour crude'. The difference between sweet and sour is the sulfur content of the oil, and because in the old days refinery men would actually taste the oil in order to tell what was in a railroad tank car.

Most oil imported into the US is sour but much of the domestic production is sweet and most refineries only handle one or the other. This gives you competing supply sources that both wish to keep refining instead of shutting down. Venezuela produces sour crude and they own their own US refineries which they've been unable to sell recently so they need to keep those running.

Gasoline prices aren't directly connected to oil prices but could plunge if domestic oil production remains high as light sweet crude contains more gasoline. The veto of Keystone XL by President Obama maintains the supply of oil as the pipeline was to be a loophole in 1970s law prohibiting the export of US oil. The Koch Brothers would have done this by terminating pipeline in a Free Trade Zone in Texas created under NAFTA to process Mexican produced oil. Tar Sands oil is too thick to pump through a pipeline by itself and they are allowed to thin it with domestic oil.

From the 'kinder, gentler machine gun hand' file: the Pentagon has announced that the US and coalition forces engaged in Iraq and Syria will not be using Depleted Uranium ammunition. This applies mostly to 30mm anti-armor munitions fired by aircraft like the A-10 Warthog that is being used heavily in the conflict. The Bush Administration was a big fan of the Uranium ammunition and used it for everything from vehicle mounted weapons to helicopters and aircraft of all types. Technically DU isn't radioactive, but since it vaporizes on impact in order to burn through armor it produces a persistent heavy metal dust that is a gene scrambling poison. In such a dry climate DU's effect of creating Iraqi birth defects will probably never end completely.  

In other news, it's possible that a historical miscarriage of justice could be corrected. The National Transportation Safety Board announced in late February that they will formally consider re-opening the investigation into the plane crash that killed Buddy Holly. This determination came shortly after the 56th anniversary of his death in an Iowa plane crash. Popularly known as the Day the Music Died, Buddy Holly, the Big Bopper Richardson and Ritchie Valens were killed along with their pilot when their plane plowed into a snowy corn field at full speed some six miles from take off.

The crash of the new Beechcraft Bonanza Vee-Tail aircraft was officially blamed on pilot Roger Peterson's lack of experience. Persistent rumors circulated that a gun known to be carried by the Big Bopper and found two months later had discharged causing the crash. An autopsy was done in 2007 to lay to rest rumors that Richardson had initially survived the crash.

The likely conconclusion of a new investigation will lay blame on the aircraft as a number of similar crashes occurred with the same model until a retrofit was done by the manufacturer. It appears that control cables to the plane's tail surfaces would bind causing altitude loss or a stall. The company never accepted responsibility for any of the 'unsolved' accidents.

Twitter @BruceEnberg - It can be the most mundane things that profoundly alter history.  

Thursday, February 26, 2015

Liberal content streaming directly to you on the ObamaNet

If you are streaming this online you are receiving it without paying extra nor are you trying to get around an outright block of its liberal content. That's because you are using the ObamaNet. A bit of history: the Right Wing crazies made fun of Al Gore for 'inventing the Internet', a claim he never made by the way. Gore did push through the language that made the government funded construction of the  internet entirely available to anyone without prejudice, or as it's commonly known, Net Neutrality, and the right wing corporations hated him for it.

Bush appointees to the FCC found a loophole in the law and simply declared that that Net Neutrality ended when it reached your ISP or Internet Service Provider. That could be a phone company or increasingly a monopoly cable company that provides the last mile of wire between you and the World Wide Web (www). So if you want to stream a movie you don't just pay for high-speed internet, you pay extra to the original source because they will be artificially restricted from providing you with content at a usable speed without paying extra, even though you are already paying for high speed access.

Robbing you at the toll booth is the Conservative Economic Model, any number of tollways, toll bridges, utilities... Enron, all models for taking your money for no reason other than they can. The difference here is that they can simply refuse to stream content that they don't approve of. It's like turning back cars at the toll booth because they don't like the liberal bumper stickers on your car. Actually Bush did eject people from his Town Meetings on that basis alone.

Once Harry Reid nuked the Right Wing hold on Presidential Nominees, Obama appointees confirmed by the Senate to the FCC have reversed this regulation. It had originally led to a Supreme Court ruling in favor of corporate censorship. Simply put Obama appointees have decided that the last mile of internet cable serves the "Public Good" and is not just a corporate profit center nor an excuse for censorship of content.

The Right Wing response is that Obama's FCC ruling allows the Federal Government to micromanage the internet. They are good at that kind of lie aren't they? It's just the opposite of that of course, any corporation or individual can continue stream content to Al Gore's World Wide Web regardless of content, political leaning or what ever standard you care to apply.

Twitter @BruceEnberg - The Founders would have seen the Internet not as magic as you might assume but as the result of the science and learning that they almost all endorsed. They would be pleased that the First Amendment was applied as they wrote it to cover this Free Expression of Ideas.

Friday, February 6, 2015

Did you buy that suit off the rack?

There were 257,000 new jobs in January, and that's pretty good. But the more significant news is that November's number has been revised upward again to 423,000 new jobs. December was revised upward to 329,000. This is 147,000 previously unreported new jobs. You can expect January to be similarly revised when complete data becomes available from employers. That's a cool million new jobs in three months.

The Household Survey showed a 0.1% increase in the unemployment rate because another million people have rejoined the workforce. The news speak expression is "people have more confidence in the economy" or in English, 'people are hearing from those working that the boss is looking for new hires'. The Workforce Participation Rate that Conservatives always cite to 'prove' that Obama isn't creating any actual new jobs ticked down slightly even though Baby Boomers are continuing to retire.

Greece has proposed a perfectly reasonable compromise to lower their debt obligations to foreign bondholders. Germany continues to make not so vague threats that Greece had better not default. The European Central Bank that prints the euros has cut individual Greek Banks off from loans, but not Greece's Central Bank. This is more a message to Germany than Greece. The Greeks know that they'll need to start printing their own money if cut off from euro borrowing. It's up to Germany if they want to risk a flight from the euro by the nations owing Germany's trade surplus as debt.

Remember Collateralized Debt Obligations (CDO) that collapsed the entire banking system, halved real estate prices, crashed the stock market and caused uncertainty about the day to day continuation of civilization? They're backkkk, but are now called 'bespoke tranche opportunities'. In case you're not up on obsolete english words, 'bespoke' is having your suits custom made instead of buying off the rack. Of course there's nothing custom about the new CDOs, dealers just have a rack of them with pretentious names on the labels.

Goldman Sachs is again cranking out these moth eaten rag suits big time. They don't expect to sell all the tranches (a slice of debt rated at a certain risk level) from any particular bundle of debt, the big money is in hedging against them. In other words they're selling bets and bets on bets and on and on. Last time around the stockpile of derivatives or bets reached a thousand trillion dollars before the banks couldn't handle the volume of defaults.  You wouldn't think anybody would be stupid enough to buy them, but people managing other people's money like the returns this nonsense creates on paper. So we'll see how long it takes to collapse this time around.

Twitter @BruceEnberg - all my tweets are bespoke.