Saturday, May 22, 2010

Meat is meat

First time unemployment claims jumped up unexpectedly reversing a gradual decline over the past five weeks. Major corporations continue to replace middle class jobs with temps and lower wage replacements. Local governments and schools are continuing to layoff or cut hours with shrinking budgets as tax revenues decline from (you guessed it) so many people being unemployed and they are reinforcing the problem by cutting still more jobs. The good news is that all the states who had the backbone to put tax increases on the ballot saw them pass which will slow the hemorrhaging in those states.

The Euro has stabilized with pressure from Germany to end naked short selling which the German government characterized as a wolf pack threatening the world economy. Unfortunately there is nothing surviving in the financial reform bill to end naked shorts selling and you can expect the wolves to begin howling again when Congress ends the debate. The big Wall Street banks still have access to the Fed Window to borrow money at zero interest and use it to pump up the derivative market and drive down anybody’s economy they choose to prey upon. Germany’s protests will probably have little effect in the long term as the derivative trade is centered in New York and London and beyond their reach.

The US and the UK were on the verge of having their currencies become worthless until the wolves began tearing at the underbelly of Europe. Unfortunately for the Brits they are very close to the top of the list to come under attack from the same predatory trading against their debt and the Pound Sterling itself. It’s only a matter of time before the USD and US Treasuries come under attack as well. These predators may call Wall Street home but care not about the fate of the United States (to a wolf, all bloody carcases smell the same).

US equity markets were Friday after a steep decline but the rest of the world saw their markets continue down. Gold priced in USD is going up again after falling back earlier in the week. Oil continues to hover around $70 a barrel as concerns about the Euro collapse combine with an over supply of oil to depress prices. There is getting to be so much oil that you can go down to the beach anywhere and just help yourself. www.prairie2.com

1 comments:

Anonymous said...

Prairie No. 2, you are the Man/Woman!! I learned about you from Mike Malloy and whenever I hear your part of the show, Mike gets my complete undivided attention. These times we are living in truly SUCK!!! Everything, both good and bad centers around the 'almighty dollar'. Fair it ain't! Keep up the good work P2.

Merle from Michigan