The Huge Show, Huge

Romney made a huge show of going to Sin City to kiss the ring of The Donald (again) despite George Will making a huge show of calling Trump a 'bloviating ignoramus'. Notice I'm repeating 'huge show', it's because that's all they've got left. The irony of George Will calling anybody a 'bloviating ignoramus' is the very definition of the pot calling the kettle black. 

The thing is that Mittens is falling so fast in the polls that the election could be rendered moot. Now only polling 35% nationwide, including averaging in states that never accepted the surrender of Lee as the final word on their secession from the Union. It's not so much that Obama is winning over the flat earth crowd, but rather they aren't going to vote in big numbers. The new Millennial Generation is going to vote however. They are the biggest generation in sheer numbers ever (outstripping the baby boomers). They represent 2 million new voters a year and are motivated like no generation since the Progressives of a hundred years ago. This means that just between now and the election nearly one million newly minted 18 year old Americans will join Obama's Forward movement. In short Obama is gaining voters faster than Mitt Romney can commit verbal gaffes. 

The media is wallowing in Super Pac money so they aren't going to admit that it's all but over. And, that's a good thing. If they weren't doing it just for the money you could call them Patriotic, even call them the Liberal Media (as if there could be such a thing). If they keep the "race close" despite all evidence to the contrary, they will produce a huge turnout of Democrats. This really could be a huge show.

The Vikings were too tough for them, are we?

Initial unemployment claims were down again last week maintaining the improving trend. The big headline trumpeted on the news this morning was that capital goods orders (that’s business equipment), orders were down again in April, (SURELY PROVING THAT OBAMA IS KILLING THE ECONOMY). They don’t mention that this has been the trend since the special tax break that Obama and the Democrats gave to small business on such purchases expired at the end of the past year. The Republicans who are such so-called “friends to small business” have refused to renew the tax break. Tax cuts are only for the really, really rich, don’t you know?

Durable goods orders were up however (cars, appliances and such) suggesting that business is in fact recovering. North American auto makers are operating at near capacity and will curtail the normal summer plant shut downs in order to meet demand. You don’t hear the Republicans chanting their favorite question so much any more, “are you better off than you were four years ago?”, because too often the answer is “yes”.

Not that we’re doing all that great. We could re-instate the Alexander Hamilton plan that built America, the plan that Reagan and his successors killed. If you’re old enough, you can remember the bright shiny George Jetson future we were promised for the 21st century, you know, like the Chinese are doing. They really like our founding fathers in China, and learn from them.

Gasoline prices continue to decline at the time of year when you would expect them to go up. Families are planning to drive a lot more for Memorial weekend, although air travel is expected to be down. Airlines are still hurting from getting burned on jet fuel futures, and they are taking it out on ticket buyers. Wall Street bankers drove the expected fuel price way up, so airlines have been contracted into paying higher than the current market price for fuel.

When you’re on a plane and riding back in steerage, where you pay extra for oxygen, just remember the fat banker up in first class paid for his ticket with the money he made off of your ticket. The same goes for filling up at the gas pump, the price maybe down compared to last year, but you’re still paying a lot extra. Republicans won’t allow the Dodd-Frank Act to be enforced against bankers controlling the price of gasoline, that‘s how Ann Romney can drive several Cadillacs, and you‘ve got your eye on a used Toyota.

The predatory Wall Street banks are moving against Spain’s banks using their lap dog credit rating agencies to downgrade Spain to junk bond status. Spain was a really bright spot in the world’s economy but unregulated predatory trans-national capitalism is destroying them. If the so-called periphery countries of Europe were smart, they would flip off the bankers like Iceland did. The bankers made a grab for the whole island and lost, the Vikings were too tough for them. The consolation prize for the bankers seems to be southern Europe. Don’t worry, they will get around to us eventually. www.prairie2.com

Mob arsonists are people my friend

Jamie Diamon, the smartest guy in the room when the masters of the universe get together, has lost $5 billion so far, and they’re not done counting. Considering that JP Morgan Chase could get into that much trouble, what is going on at the other zombie banks that we don’t know about? Mitt Romney isn’t concerned, “somebody else made money [my friend]”. This dumb ass claims he knows how the economy works. If we had an economy based on pirate ships and mob arsonists, he might know something.

Fat cats (typically those with $500,000 or more in a trading account) who loaded up on Facebook’s IPO because they had the inside deal are “un-freinding” their brokers. They were planning to double their money selling to us peasants, the stock lost 11% on Monday and another 9% today. Rumor has it that Wall Street banks who sponsored the IPO were buying stock on Friday just to keep it from going to the floor.

With the three biggest banks involved,  JP Morgan, Goldman Sachs and lead conspirator Morgan Stanley, you had to figure something untoward was going on. It seems they warned off the really big investors that the stock was over priced. The smaller fat cats who thought they were in on something big turned out to be the suckers this time. Facebook does have the potential to make money at some level, doubtless the big money will be happy to buy the stock at some price.

Gold bugs aren’t doing so hot, with it currently trading 20% off its high last fall. I got a lot of heat from Glen Beck fans last year for saying gold wasn’t a good investment, I don’t hear from them so much anymore. Some people are saying it could go to $700/oz and they make a good argument for it, that would be inline with historical prices. This would be opposed to the “hysterical” price of $7000/oz the right was predicting a year ago. Retail bullion and coin sellers report sales are off between a third and half what they had been a few weeks ago.

Austerity proponents are fading fast with Obama lecturing the G-8 summit at Camp David over the weekend, on the benefits of job creation and growth. Some people are catching on that you can’t simply force the middle class to pay off loans without allowing them to have any income. The Europeans still have democracy, and aren’t shy about showing incompetent leaders the door.

Greece however is experiencing a slow motion “bank run” with depositors withdrawing their money and the European Central bank covering the Greek banks with loans. Loans they will default on to a large degree when Greece converts to its own currency. The bankers are making overt threats about isolating and starving Greece if they do this.

The bankers don’t seem take into account that there is a potential White Knight in the BRICS countries (Brazil, Russia, India, China and South Africa). Turkey is already flirting with them. Spain, Italy and Portugal could follow suit making for a rather awkward situation. China is the dominant member in this movement and they have that saying about “… [living] in interesting times”, indeed we do.   www.prairie2.com

We could be just like Greece

Initial jobless claims were unchanged for the week suggesting that jobs continue to be produced albeit at a slow pace. We have recovered more jobs than were lost in private sector from the Bush crash, even in “slow“ months Obama can take credit for half again what was Bush‘s average month before the crash. If you include the jobs Bush lost at the end (including the early months of Obama‘s term), Bush’s average month was zero new jobs created.

The problem is that Red States have laid off 700,000 teachers, social workers, cops, firefighters and bridge inspectors. This probably killed another two million more private sector jobs that would have produced supplies used by these government workers, or would have benefited from the workers’ spending. Trickle down from the top doesn’t work, but you can drain the economy from the bottom.

Amid much bluff and bluster, House Speaker Boner announced his plan to sink the economy by refusing to authorize any new government borrowing in September without a trillion in new cuts, and with no new taxes of course. If this were actually done it would kill a minimum of 1.8 million jobs just in time for the election.  Fortunately it’s just noise, the Treasury Dept. having seen this nonsense before, has laid plans to keep the government operating until the new Congress is sworn in 2013. Even if Boner hangs onto his seat, he will likely be watching Speaker Pelosi swing the gavel.

Obama’s Commerce Dept has announced a 31% tariff on Chinese solar panels based on a product dumping complaint. Obama put two major tariffs in place on tires and steel pipe three years ago. The American tire industry has built new plants and hired more workers as a result. There are potentially thousands of such tariff complaints to act on, but Obama had been halted in this activity by a right wing court ruling tying his hands.

With the election year underway, the Dems in Congress were able to shame enough Republicans into voting through a bill freeing up Obama to act on tariffs, and he is. The Bush Adm did not bring even one tariff action in eight years, no matter how egregious were the Chinese trade practices. The resulting tariff on tires under Obama was 99%, Republicans did nothing.

For those keeping score, Jamie Diamon’s gambling losses at JP Morgan Chase have gone past three billion USDs and counting. The Facebook IPO seems to have fizzled, with stock barely trading over the issue price. It was supposed to be a multi-billion dollar boondoggle for the fat cats that were allowed to buy 90% of the new stock at the issue price. Only 10% of the stock was actually offered to the common peasant during the IPO with the expectation that everybody would run out and buy when actual trading began, and pay double the price. So far people have been smarter than that.  

Conservatives are still screaming about the looming threat of inflation from government debt. The fact is that we still need to be worried about deflation. They always point to the Weimar Republic’s runaway inflation after WWI as the historical precedent, and how that allowed Hitler to come to power. The small problem with that version of “history”, is that Germany’s inflation came and went while Hitler was still practicing his speeches in a beer hall. It was the massive deflation of the early 30s that brought Hitler to power.

The fact is that our government can borrow money for 10 years at 2%, and Ten Year Inflation Indexed Bonds are selling at what amounts to a negative interest rate. They still scream that with all this debt we are becoming like Greece. The problem for Greece is that the IMF and the bankers are forcing deflation onto the Greek public (they call it austerity). Austerity is what the Republicans want to force the middle class here to swallow, then we would be just like Greece.    www.prairie2.com

Weren't you paying attention?

If I gave you the impression last week that the Republicans were losing the battle for oligarchy, I apologize, they are far from defeated. That is if we let them get away with it. Their efforts to undermine the economy and destroy civilization continue full ahead. Over the weekend a quarter million people that were formerly receiving long term unemployment benefits were cast into poverty with little hope. The corporate media is reporting this as resulting from the declining unemployment rate in certain states, but really this comes from the Republicans in Congress insisting on the number of weeks of eligibility being reduced sharply while they complain about the lack of jobs under Obama.

Nearly half of these unfortunate souls live in California, a state that faces a ballooning crisis brought on by a right-wing scam that has allowed rich Californians to avoid paying taxes for the past 30 years. Only a super majority in the state legislature can fix the problem and so far Republicans have been able to hang onto a third of the seats to keep the fiscal treason going.

In the US Senate the routine renewal of the Import - Export Bank authorization bill has been held up by Republicans who are intent on crippling economy before the election. So egregious is this move to block a bill that even passed the Republican controlled House of Representatives, that Senate Majority Leader Harry Reid is reported to be “visibly agitated”, he is normally be so passive as to be mistaken for one of marble statues that line the Senate hallways.

If this bill doesn’t pass, at least 300,000 manufacturing jobs will disappear overnight with the end of the export/import bank loan guarantees at the end of May. The Import - Export Bank is a kind of subsidy for the big companies like Boeing and the major defense contractors, so it normally receives a rubber stamp. Republicans call it a waste of tax payer money, even though it is actually self funded by fees and no tax money is required.

Greece seems unable to form a new government following parliamentary elections because of the refusal to co-operate by socialists on the left and Nazis on the right. I didn’t mean figuratively “Nazis“, they call themselves Nazis. (what’s old is new again) This will force new elections and the likely emergence of a government that will leave the Euro behind. This is a dangerous road, but the only one that makes any sense.
Even in Germany, where they haven’t really suffered from the austerity insanity, the locals are starting to rebel with Chancellor Angela Merkel’s minority government losing a large number seats in local elections. They join the French people who realize that their nations are under threat from the bankers. Americans are much slower to catch on.

The big new talking point on the Sunday talking head shows is that Obama is mischaracterizing Republicans because they are really completely in favor of regulation and always have been. This comes in the wake of a multi-billion dollar loss in trading activity by JP Morgan Chase, the largest bank in the US. They were by the way risking depositors’ money while doing this, and this activity would be banned under the Dodd-Frank Act, if Republicans would allow it to go into effect.

The right-wing talking heads weren’t quite ready for this complete reversal of their stand on regulation. Up until Friday they didn’t want regulation of any kind, and they couldn’t keep straight that they shouldn‘t backup their new pro-regulation talking points by saying how bad regulation of any kind really is. If the banks don’t collapse this week, then by Sunday they’ll be back to the same crap. If the banks do collapse it will be Obama’s fault for not regulating them. Weren’t you paying attention?  www.prairie2.com