Tuesday, April 22, 2014

Obama sends troops into former East Bloc countries

a few hundred troops on the ground can do a number things given enough time. They can assess the condition of bridges, landing strips, and such, as well as gauge the local support/security for rapid deployment forces, tank columns, that sort of thing. 

The Russians of course know that is exactly what the US Army is doing. The Soviets, I mean the Russian Republic forces already have this reconnaissance information, although it's decades out of date. 

It's just moving pawns at this point.

"Børk, Børk, Børk"

You know how the right has been constantly complaining about Obama's ballooning deficit? They have of course been wrong about that since the day Obama inherited Bush's $1.5t annual deficit and immediately slashed it by getting rid of private crony contractors. There has been a steady decline in budget shortfall ever since, and the latest numbers have set new records. The deficit for the first half of this fiscal year starting last October 1st was $413b, and this was a decline of $187 billion compared to the same time last year. These numbers were provided by the Treasury Department, so the Right will claim the numbers are fixed. They can't prove that, because math is just voodoo as far as the Right is concerned.
Further more, the deficit for March was only $37 billion, down from $107 billion in March of last year. This particular number was the smallest deficit for the month of March since 2000, (when another Democrat was POTUS). 

The deficit is expected to be slightly more than more than 4% of GDP this fiscal year, a drop from a high of almost 10% of the GDP in 2009 at the end of the Bush Adm. This trend shows the deficit falling faster than in any year since the end of World War II, dropping from $1.1 trillion in 2012 to $680 billion. Conservatives had predicted a runaway deficit by this time with interest alone exceeding all possible tax revenue, and of course had Obama been forced to follow Bush's policies this would have come to pass.

The latest numbers on the ACA or ObamaCare show that its being implemented at about the same rate as its close cousin RomneyCare was in Massachusetts where it's providing nearly 100% universal coverage. Total sign up for the ACA has greatly exceeded expectation, the number of young people signing up is in the proper proportion, and most people who signed up have actually paid their premiums. That would be the opposite result from three more predictions that he has right made. It turns out that Obama didn't sail the ship of state off the edge of the world after all.  
We on the left like to point to the success of Socialism in Sweden. Unfortunately Sweden also has a quite high number of millionaires and billionaires, and they've been successful portraying themselves as the only experts on economics and banking. Despite Sweden coming through the Bush crash unscathed, the very rich have managed to impose a high level of austerity on the country. They've now proven the age old axiom, 'don't cut government spending in a slow economy'. Even the Pharaohs understood this, they put people to work building pyramids if there wasn't anything better to do. The Egyptian Empire spanned thousands of years, we're not likely to make it to 2076 if we don't learn Bronze Age economics soon. 

Because the Swedes have embraced the slogans of rich people instead of learning from history, they now find themselves in a full blown deflation trap. They're looking at there own Great Depression, and at this point they are just plain screwed. If the Swedes don't catch on what's happening to them and embrace some serious Keynesian/FDR style economics they're going to find themselves in a Fascist dictatorship faster than the Muppets' Swedish chef can exclaim "Børk, Børk, Børk". We may soon get to see played out exactly where the US will be going if the Republicans manage to win the next election.

In our next episode we'll explore the wonders of powdered alcohol, and no, it's not a substitute for canned goods. Why DID the Treasury Dept. reverse its approval of alcohol powder and other fun facts from chemistry.
Twitter @BruceEnberg where you're welcome to consume vast quantities of the traditional liquid alcohol. We're truly conservative like that, which means we're liberal. That is, we conserve the good things in life like single malt whiskey.

Thursday, April 17, 2014

Oblivion aka the Conservative economic model

New Unemployment Claims continue to hover just above 300,000 indicating continued job growth at the pace we have become accustomed to over the past five years.

Federal Reserve Chairman Janet Yellen recently stated that the central bank will likely maintain its near zero interest rate policy even if the economy starts to pick up as inflation remains stubbornly at about one percent. The Fed's goal is to maintain two percent inflation in order encourage the 'job creators' to actually do something with their money. They prefer instead to simply sit on it waiting for deflation to increase the value of their cash by a thousand percent. Some economists say that a 2% goal is still too low and that 3% or even 4% inflation would serve the purpose much better. 

The problem the Fed has is that their normal method of controlling the economy is to run interest rates up to cool an overheated economy and rates down to turn the heat up. With interest effectively at zero the economy simply stagnates, you can't charge less than zero. The Fed buying up bonds (QE3) has taken away that option as a place to park the surplus trillions of the rich. If they put cash into a bank account, the bank actually charges large depositors for storing their money.

The dirty little secret that nobody talks about is that zero interest rates should allow small business to boom while big business sits on its hands. The reason this doesn't happen is that there is one activity that big business does put its money to work on, destroying small business. Everything from bogus patent lawsuits to simply selling competing products at a loss to drive under the entrepreneur. The carrot and stick approach long favored by a really big software company whose founder pretends that he's liberal is the common approach. They go to the small developer and say, 'Sell your idea to us or we'll reverse engineer it and give it away'. Suing them will take ten years and they can spend more on lawyers every day then you hoped to make in your lifetime. 

Big business finds it useful make an example of anybody that attempts to sue them for any reason. It's not uncommon for corporations to spend double what the small plaintive was hopping to recover on lawyers just to keep from paying out to anybody. The SCOTUS has effectively made consumer class action suits impossible allowing companies to force you to give up that right when you check mark one of those 'terms of service' agreements. In fact you don't even need to agree to this other than by doing business with them and accepting a piece of paper with undecipherable fine print. 

Working for Big Software is also problematic, there is currently an employee class action lawsuit underway that has exposed the widespread practice of not competing for talent. Work for one of the big companies and nobody else will ever hire you. Sort of like being indentured. The potential liability from these anti-competitive practices that go back decades could run into many billions as triple damages are the typical result. That is assuming the SCOTUS doesn't simply make suing them illegal. 

From the constant swirl of rumors about China's imminent economic collapse, (it has been imminent for 30 years) China has a real estate bubble. China has more Middle Class than the US has people and there's no problem finding a job in The People's Republic. The thing all the Conservative pundits in the US don't grasp is that the Communist Party takes its job seriously, crashing the economy isn't an acceptable aspiration for Party officials or businessmen. Unlike here, behave in China like an American Conservative and you'll find yourself donating your organs for transplant. 

The facts on China's real estate bubble aren't what you would expect from the US bank model, the down payment to buy a property typically runs 50% or more. China could have a 50% drop in property values and the banks still wouldn't be at risk, and mortgages are on average only 20% of a bank's outstanding loans. Then of course the government would simply buy up the surplus anyway, Communists don't believe in riding the 'Free Market' into oblivion as Conservatives would have us do here.  

Twitter @BruceEnberg - where we don't believe Free Markets are actually free  

Wednesday, April 9, 2014

This bug makes your Heart Bleed

If you watched the Morning 'News' and immediately changed all your passwords because the totally trustworthy news reader told you to, you completely wasted your time. It's like Iraqi WMDs, they are just reading a made up script for $10m a year, they aren't journalists.

The problem known as the Heart Bleed Bug isn't on your end of the supposedly secure connection. The one denoted by that very reassuring padlock at the beginning of the browser address you're connected to. It's at the website and until they fix their software, changing your password won't help.

It's entirely possible that this is really a 'back door' that the NSA created to snoop in computers remotely, because in order to exploit it you'd need to be able to intercept the communications, and that's something they do big time. They can use it to send a false signal to your computer and capture everything that's in your computer's buffer in a couple of nano-seconds. All your best porn is now available to every NSA contractor, along with all your passwords, address contracts, anything and everything. But now that the software is readily available on the internet to do this exploitation in an entrepreneurial way, the internet is abuzz with the need to fix it.

Unless a 'secure' website that you use has told you to change your password, you're just wasting your time, the NSA (or hacker next door) will just capture the new one. If you already changed yours, you'll need to do it again in a couple of days. Tip: you should use unique passwords for stuff that really matters, but you can use one password for all the so-so stuff. Using your kids names is generally frowned upon, but adding some unique characters and numbers embedded inside them will make them just as un-crackable as any random sequence and you don't need to write them down.

Friday, April 4, 2014

The House always wins (if Conservatives run the game)

New unemployment claims were up for past week, but not enough to advance the 4 week moving average, which has been at an acceptable level for our current Depressed economy. This was reflected by 192,000 new jobs reported by business in March. We don't know yet how the reforms of the ACA or ObamaCare are affecting the job statistics. Since the Act makes it far easier for people to change jobs, as they are no longer slaves to the 'pre-existing condition' trap corporations have been using on them for decades. In this case the House no longer wins.

It's also likely the more people are starting their business with the availability of insurance now guaranteed and this won't show up in the employment statistics right away. Initially it will probably hurt the numbers rather than help with a surge of older workers now able to retire prior to the Medicare age of 65. In the long run this will actually benefit the Medicare system as fewer workers will come into it not having been worked nearly to death by the need to keep corporate coverage. The odds of you not cashing in your chips before actually enjoying your golden years will increase substantially. Like playing single deck Black Jack. It also opens up jobs for younger workers, win - win.

Government employment remained largely unchanged in March as the 9000 fewer Federal jobs were mostly offset by 8000 new local government jobs, excluding education. There are 85,000 fewer Federal workers than one year ago which puts the lie to the right wing talking point claiming that Obama is exploding the size of government. This fact gets no coverage by the 'normal' corporate media & Fox and it's ilk continue to tell the outright lie. They're not even likely to be corrected on the Sunday talk shows when they tell this lie unless Paul Krugman is on the panel, but he isn't on that much. A truly competent person is rarely the one Liberal guest that they put on opposite three rabid Conservatives. This is not surprising considering Conservatives control all the media, so 3 to 1 odds against should be expected to be in the House's favor. The House always wins.

The new jobs were spread over several sectors excluding manufacturing which continues to push jobs overseas. In theory, the few patriotic American manufacturers can get relief from unfair trade practices attacking US companies that would otherwise be competitive with imports. They can do this by filing a complaint that eventually ends up on the President's desk for action. Obama to his credit doesn't simply ignore them like Bush did. Still, this has become a pointless exercise because you can only bring a complaint once you can show real damage with the loss of jobs and plant closings. The multinational companies then simply switch production from that country to another country once a complaint has been decided in the US companies favor. So the rigged game is that you can't complain until your business is gone, and the 'comp'ted breakfast' you receive, I mean the 'tariff relief' that you are awarded won't protect you from the very same company operating in another country doing the same thing to you again. The House always wins.

From the 'how to really screw people while pretending to be socially responsible' file. In most casinos you cannot buy chips with your credit card, something anti-gambling advocates favor. This ban is however a really just a contractual arrangement between Casinos and credit card companies. ATMs are always readily available to their customers and will dispense cash from those very same credit cards. The advantage to the casino is that they don't pay the customary transaction percentage to the credit card companies, instead the 'casino sucker', I mean the 'responsible gambler', pays an ATM fee. The casino likely gets a significant cut from which ever major credit card bank that they allow to place the ATM machines in their lobby. The House always wins.

Twitter @BruceEnberg - where the House is actually on your side.





Thursday, March 27, 2014

Lock the door and also hammer those nails in a little further

New unemployment claims were only 311,000 last week which is the lowest they've been before the Republicans shut down of the United States Government. Claims are not as low as they should be, but with the economy still stumbling along in the middle of the Bush Great Depression they are at least in the positive range if only indicating a lukewarm job market.

The only stimulus to the economy is coming from the Federal Reserve continuing to buy bonds and German companies using the US as a low cost manufacturing floor. Good American job 'creators' continue to move as many jobs out of the country as they can. The Fed stimulus has been tapered from $85b a month down to $55b comprised of buying $30b in Treasury bonds from the after market (not from the Treasury) and $25b in mortgage backed securities.

The main purpose of the QE3 money printing scheme is to produce a real inflation rate of 2% with the idea that companies and banks will be inclined to do something with the trillions in cash that they have sitting on rather than watch it evaporate. The super rich are hoarding cash like they do during any Depression. With inflation near zero and the economy sluggish they hope to take advantage of deflation. Should asset prices start to fall they would likely drop by the typical 90%, and allow some billionaires to become trillionaires in today's dollars.

You might point out that the fortunes of the rich would also decline by 90%, but it's not the actual dollar amount that matters to the rich, but the amount of 'real wealth' that they hold. Running the value of money up and down to capture wealth from the middle class is a long standing practice. It happened many times in the US up until the New Deal. This was also what the temple money changers would do to the common people in Biblical times, and that was what prompted a certain socialist to drive them out. Conservatives don't seem to care how much wealth is stolen from the common people, and in fact applaud the practice as righteous. Apparently they've got a lock on the temple door, and their only 'socialist' remains firmly nailed to the cross.

Twitter @Bruce Enberg - where we do what we can to drive out the money changers.

Friday, March 7, 2014

The Good Old Days, or what's a little panic among friends

Employers reported adding 175,000 jobs in February compared to 189,000 average over the past 12 months. December and January numbers were revised upward by 10,000 and 15,000 respectively. Considering the really awful winter weather over much of country these numbers are actually pretty good, and this could mean that forecasts of 4% growth in GDP this year may have some validity.

The fly in the economic growth ointment continues be stagnant wages and the continued outsourcing of good paying manufacturing jobs. The good news is that Janet Yellen who is the new Federal Reserve Chairman is not being swayed by calls to raise interest rates. The inflation hawks have been thoroughly discredited but that doesn't keep those with a conservative agenda from screaming that the currency is "BEING DE-BASED!"

The USD is just fine, but people who don't actually know anything about economics will tell you it you're going to be hauling your bread money in a wheelbarrow any day. And it's all Obama's fault because gasoline was only a $1.85 when Obama took office. Gas had risen steadily over the previous 8 years to $4.25/gallon, but that was during that non-existent period between the Clinton Adm when gas was a dollar, and his immediate successor Obama. The price fell sharply when Wall Street banks were forced to stop trading in commodities and it went up again once they were bailed out, and resumed stealing, I mean trading. Good capitalists, one and all.

Conservatives always cite the same two examples of hyper-inflation, post WWI Germany and Zimbabwe ten years ago, because there simply haven't been any other such extreme occurrences in modern times. Spain had the runaway inflation when they brought ship loads of gold back from the New World, largely destroying their economy. Contrary to what Libertarians claim, using gold won't protect you from economic disaster.

It's true that many third world countries have had problems with relatively high inflation though, but this is simply because the rich and powerful print money to buy up the foreign currency that comes into their country. They then deposit that in Swiss banks making their own money worthless in the process.

In a normal economy inflation is the signal that the economy is actually doing well, bank regulation and progressive tax rates work just fine to keep inflation at a manageable level. In the 'good old days' inflation was dealt with by having a 'bank panic', today we call that a depression. This typically resulted in a 90% drop in prices (deflation), and the rich would snatch up more property during each cycle. On the average prices remained the same, so these were the 'good old days' that Libertarians want us to return to. Great if you're super rich, not so great if you're everybody else.

Herbert Hoover's Sec of Treasury Andrew Melon described deflation as the period when "the wealth returns to its rightful owners". Melon was likely a Trillionaire in today's dollars owning hundreds of companies that he acquired by 'questionable means'. FDR tried to prosecute him for his direct participation in causing the Great Depression, but the evil old man died before he reached the dock.

Twitter @BruceEnberg - where we don't debase the currency or the truth.








Thursday, March 6, 2014

The underlying cause of oligarchy

Clinton had no hand in NAFTA, it was the creature of Bush the Elder and the Congress that authorized him to negotiate terms. Nor could Clinton stop it, his signature was not required, and he could not veto it. However, he did cheerlead the vote in Congress for it, he pretended to sign it even though it wasn't required that he do so. But, he wanted to score his $200m payoff for playing alone with the fascists that have captured Amerika. You can be a peasant under a feudal lord, or a plantation slave under the Neo-Confederacy, but you have already gave up your choice for that fate. You can, maybe, maybe still fight, while you still have breath.... Fight, fight, you have right on your side.... no, no, no... maybe....