Thursday, December 29, 2011

Pizza in 30 minutes at 5.5% yield

Okay pizza is really American, but if Italy was a pizza shop, the good news is they were able to refinance their debt at lower rates than they've been paying. The bad news is they weren't able to sell all of their pizzas (bonds). The ten year rate was still almost 7% while 3 year notes are down to 5.5%. These rates are still way too high.

The really bad news is the dough supplier (European banks) were given a big pile of dough by the European Central Bank to buy sovereign debt with, and they aren't really stepping up to the plate. The ECB could have simply bought the debt directly at a negligible rate (they simply printed the money anyway). But the ECB, like the Fed, is run by bankers, for bankers, forever and ever, amen. They get all the pizza, the rest of us can eat cake.

From the right wingers don't get it file: Foreign manufacturers are threatening to leave Alabama after a German car company executive was jailed by local police for not having his papers on him. He made the mistake of thinking the Stasi were gone with East Germany. Even the Red Chinese are thinking of leaving. Alabama legislators responsible for these unconstitutional laws aren't backing down. The stupid never admit they're wrong.

Wednesday, December 28, 2011

The price of the free market continues to surge

The stock market took a big dip today on reports that the European banks are hoarding the cash they were recently provided by the European Central Bank to keep them solvent. A failure to loan money will reinforce the austerity death spiral that Europe is already undertaking. If these reports are accurate then Wall Street took it rather calmly, it should be raining stock brokers. Oh wait, they only lose your money.

Threats from Iran to block the Strait of Hormuz cutting off 20% of the world’s oil supply came in response to new sanctions against anyone who trades with Iran. The oil market hasn’t reacted to the threat yet but the US corporate media is talking it up on one hand and dismissing it on the other, but they’re talking $5 gasoline by summer just the same. Under the new sanctions, it could in theory become difficult for any country to buy oil from Iran.

It was a year of records for gasoline in the US: record low demand; record high consumer expenditures for gas; and record high exports of gasoline and diesel out of the United States. That’s the so-called “free market” for you, it’s only free for billionaires who are free to take as much as they can gouge out of you.

For those of you too young to remember before the unchecked spree of the Bush Crime Family: gasoline was under a dollar; the ten year embargo on Iraq oil exports was about to end, potentially flooding an already glutted world market with really cheap oil; and Al Gore was elected President.

Under Bush we saw oil go from $18/barrel to $140/barrel. It did fall to half that when the Wall Street banks were temporarily forced from the market, but has since reclaimed the $100/barrel level, and could surge again with the Iran war. The Dodd-Frank Act specifically bans banks from this sort of trading but the Republicans dominate the Federal commissions that are effectively gutting the law. Obama is being blocked from making appointments by the Senate, and from making recess appointments by the House whose permission is required by the Senate to adjourn.

When will the 99% stop giving everything to the one percent on the “free” market, and then letting the one percent charge us for it?  www.prairie2.com

Tuesday, December 27, 2011

Are there no workhouses?

As solid as Sears? Well not so much. Sears announced today that it close one hundred Sears and Kmart stores after a dismal Christmas season. They still have 3500 stores and 3 billion available on their credit line so the dancing isn’t over just yet. Their real problem is that the middle class doesn’t have any money to spend. Even as the economy seems to be perking up the middle class continues to decline.

Sears used to be where the middle class went to pretend they were shopping at a big classy department store, they could feel like the carriage trade who shopped at the real high end stores. Now Sears looks kind of run down and can’t compete on price with the Big Box companies that dominate the China trade. Meanwhile the former middle class are shopping at dollar stores and those chains can’t expand fast enough.

The top 10% now account for nearly 40% of retail sales and the stores that cater to them are doing fantastic business. Increasingly the people doing the marketing don’t even consider anyone below the 80% line. Walmart does cater to the middle class, but their business plan doesn’t involve marketing so much as simply driving out the local competition. Even Walmart isn’t immune to declining sales however. As they spruce up their stores to attract former middle-class people who are on their way down to working poor status, Walmart‘s traditional base are going to the dollar stores to spend what little money they have.

What this economy needs is a 50% increase in the minimum wage, but the Republicans in Congress would burn the Capitol before allowing such a thing to happen. Before the colonists rebelled against the British East India Company (that’s how they spelled “Walmart” in olde English) the British had maximum wage laws, yes maximum wage laws.

Republicans aren’t shy about advocating for a zero minimum wage, they don’t need a maximum as they’ve learned how to keep wages from rising. By not enforcing the anti-trust laws for the last 30 years the Republicans have concentrated so much economic power that they already exceed the corporate brutality that the patriots shed their blood in order to drive it from America.

A lot of people will say that I’m over stating this corporate power and the danger is presents. Once the last social safety nets are done away with, making the poor really desperate, and the last regulations holding corporations back are voided you will see things that you only read about in Dickens or the dystopian writers of the 40’s. Once power is concentrated, those who did the concentrating never give it up willingly, and in fact are compelled to become ever more brutal to maintain the status quo. We have to “concentrate” the power with the 99% while we still can.  www.prairie2.com

Sunday, December 25, 2011

On the way to Oz, Iowa is not Kansas anymore

On Fox News Sunday, they trotted out Mike Huckabee as an expert on the Iowa Caucus, since he won four years ago, on the Republican side that is. Somebody else came from nowhere and won the big prize. Huckabee proceeded to detail the pitfalls of the caucus system where voters show up at a precinct location and proclaim their choice in front of their neighbors without the anonymity of the secret ballot, then must pick a second choice if their guy doesn't get enough votes to claim at least one delegate. A small problem with this razor sharp analysis is that he is completely wrong. The Republicans use a secret ballot and don't meet in precinct groups to caucus. Unlike the Democrats, Republicans vote at a central voting location on pre-printed ballots.

Further more, the Iowa Republicans' votes don't really count for anything. The actual delegates for the Republican national convention are elected at the Iowa state convention. The upcoming vote is just for show as it doesn't pick delegates at any level. This will become a factor if the candidate isn't selected until the convention. I suspect this isn't that unusual with the Republican primaries. Democracy is something only those socialist Democrats do.  

The following is a critique of Ron Paul and his Libertarian mindset. "I've got mine, you can eat sand"

http://news.yahoo.com/ron-paul-dangerous-tin-man-no-heart-053200808.html