Tuesday, December 23, 2014

It's only Common Sense

It's been widely reported that Wall Street bankers won a guarantee of bailouts from Obama's budget. It's true that they did get the 'Push Out Rule' eliminated from the Dodd - Frank Act so that they can continue to use depositors money to back risky financial instruments. It was junk like derivatives based on collateralized home loans that crashed the banks in 2008. But, this doesn't guarantee the banks themselves will be bailed out, only that the FDIC will pay out the insurance on deposit accounts up to the legal limit.

There were six other provisions attached to the House Bill that would have gutted Dodd - Frank but thanks to Senator Elizabeth Warren those were all killed. So if the Wall Street banks crash again the FDIC will be able to take a meat ax to them the way they do to smaller banks. That won't keep crooked bankers from sucking billions from them between now and then, but there is such a thing as 'Claw Back' to recover ill gotten gains when this happens. It just depends on who is in charge at the time, President Warren for example could be such a person.  

I've been saying for years that President Obama was deliberately stalling the Keystone Pipeline with the ultimate goal of killing it. With the falling price of oil it looks like that will happen as it's simply no longer feasible to make a profit from the convoluted process of obtaining oil from tar sands.  

The 3rd quarter GDP numbers have been revised upward to a 5% annualized growth rate. This is in line with higher job numbers and continued low weekly unemployment claims. The far right continues to claim that the government is simply faking the numbers month after month, year after year. I hate the expression 'common sense', mainly because Conservatives think it's a substitute for science, but in this case it's appropriate. As bad as things were six years ago can anyone seriously claim it's been getting worse all this time? Sure, the wealth of the Middle Class continues to erode, people will get used to being poor, but they don't get used to starving. Contrary to the Conservative Talking Point, Obama has not put millions on welfare instead of into jobs. The elderly and the working poor (who have jobs) get 85% of the food stamp benefits, this is from corporate low wage policy, not Obama's doing.

The Right also insists that the Government is hiding run-away inflation. If you point to the gas pump they'll say with a straight face that gas was cheaper when Obama took office. Sure, it went from $4.25 to under $2 for a couple of months as the we teetered on the edge of total economic collapse. Of course now they say Obama can't keep the price up anymore, with no explanation of how he's been doing that.

Will gas prices stay down? Considering that we have a new Congress coming in that will do everything they can sabotage the economy, probably not. The only difference now is we have Elizabeth Warren pointing out what's really in these Republican bills, and that takes away the cover of 'claiming ignorance' that Conservatives always use. It's not true that they don't know what's in these massive bills, they just hope the voters will believe that.

Twitter @BruceEnberg - this just in: the Sun is again climbing in the sky again. Burning yule logs and decorating Evergreen trees worked to save us from the eternal night once more, it's only common sense.

Friday, December 5, 2014

Party like it's 1999

You're one of the 321,000 people who got a new job that was created in November and you are really stoked, but some dude at work just won't leave you alone. He rants about the President being impeached and says how he's wrecking the economy by raising taxes. You really don't know what to think about that stuff because for you things are looking up. Now he's telling you that at the end of the month the world as we know it is going to end. What he's telling you about now sort of makes sense, so you make a mental note to buy extra batteries for your portable CD player on the way home. You know just in case the computers all crash because of Y2K and we're back in the stone age on New Year's Day.

1999 was the last time we had 321,000 new jobs in one month. Clinton had survived impeachment early in the year and the budget was running a $250 billion annual surplus. It was projected that by the end of Al Gore's second term that all the Federal debt except for the Social Security Trust Fund would be retired. Republicans were talking about a Lock Box for the Social Security money and Clinton tried to endorse the concept, but what the GOP really meant was passing a law that would reduce the debt ceiling for every dollar added to the Social Security Trust.

This was all turned on its head by Bush who would in a couple of years be telling everyone that those bonds were worthless and Social Security should be privatised. Bush of course was spending money on the credit card almost as fast as Reagan did. Not a penny of Reagan's debt was ever repaid and was  original paying as much as 20% interest. Clinton was able to refinance it with low interest bonds. Under Obama we're paying nearly zero interest, but you can guess what will happen if the GOP were to actually get control again. It is possible to drive interest rates up to Reagan levels and drown the Federal Government in interest payments, that being their goal all along.

Back to the Future, today we have a huge number of new jobs in November and the gains for September and October together were revised upward by 44,000 new jobs. Job gains have been broad based with substantial increases in manufacturing, transportation and construction jobs. Healthcare continues to add jobs defying Conservative claims that people are losing access due to Obamacare.

The Republicans won't give Obama credit for $2.00 gasoline even though it was his fault when it was pushing $4.00. The GOP is also floating the meme that low gas prices are destructive to the economy, and they say THAT is Obama's fault. With the Conservatives keeping score, he can't win. Rapidly falling fuel prices are deflationary and that can be bad. Average hourly wages are actually going up and that's inflationary, hopefully reaching a balance point that produces growth. As long as the Federal Reserve continues to ignore the Conservatives and keep interest rates low we could see a semblance of prosperity. That's assuming that Obama continues to out think the half witted Republicans and they can't throw a wrench into the works.

Things actually look pretty good for 2015, more jobs, higher wages, low gas price and declining deficit. Sure, most government economic policies still suck, but at least the computers aren't going to crash.

Twitter @BruceEnberg - let's all party like it's 1999 again.

Friday, November 7, 2014

Say it ain't so. Okay I will.

The Federal Reserve called off its QE3 asset buying program last week and with the sudden end to Obama's cash printing spree the the stock market went into immediate free fall. There are more stock brokers on the ledges than pigeons.... what? That didn't happen? Not to fear the Republicans have a talking point to cover this, you see they're in charge now so the markets are up and will continue to surge. Never mind that the Dow had nearly tripled while Obama was in charge, and really he's just as much in charge today as he was on Monday. The reality is that the dead weight in Congress really hasn't changed that much. The only difference is we'll have two years with no Senate confirmations much like Obama's first four years.

It should be noted that the markets are more than a little concerned about the prospect of the Tealiban shutting down government. They might do it just because they don't have the power to do anything else, and they feel the need to be in charge at all costs.

The implementation of ObamaCare is destroying jobs by the millions, we lost 800,000 jobs last month alone.... Oh wait that was the last year of the Bush Administration. We actually added another 220,000 jobs in October extending the record number of continuous months of job growth to 57. Add another 31,000 jobs from upward revisions to August and September numbers.

Nobody can get health care with Obama forcing burdensome regulations on doctors, but oddly enough the healthcare sector has added a million new employees anyway. And unemployment ticked down another tenth of a point, because the out of work people have simply died. Conservatives haven't used that one yet, but it would go great with Obama's IRS Death Panels giving all the Conservative Christian White People Benghazi Strain Ebola.

From the really bad investment advice file: Pat Robertson is telling his faithful to buy oil company stocks. It's something about Pat not wanting to support the manufacture of condoms by buying into non-oil companies which are often conglomerates that make god knows what sort of evil contraption. Oil is mentioned in the Bible so it's holy. He probably doesn't realize that providing chemicals to industry that make evil contraptions is where oil companies make their real money, you can see that Satan's hand is everywhere. Never mind that the price of oil is falling through floor and oil company stock is not going to be a winner. You have to wonder if Pat has been caught in a bad market position and is just trying to get a price bump before he unloads his stock, especially if God told him that the Teabillies in Congress will manage to crash the market.

And from the really crazy file: There is a public referendum in Switzerland this month that would force their central bank to buy 1500 tons of gold because... well you know... because. The Swiss government sold off 1000 tons back in 2000 when it was a quarter of its current price and a lot of people are peeved about this. What's really driving this of course is that the gold bugs have lost 32% in the past two years and the price is likely to collapse further.

The Swiss are already the seventh largest owner of gold in the world so there's no justification for a country that size to put still more useless metal into their vaults. The fear of doomsday or the idea that gold is some sort of hedge against inflation convinces people to buy the stuff. But if you compare inflation to the gold price there's actually no correlation. Gold goes up and gold goes down. It would need to be $2500/oz to equal the buying power at its peak price during the Reagan administration. If you bought gold back then, you have lost a lot of money let alone you're getting no return on the investment.

In all the popular doomsday scenarios you never see anybody scrounging for gold in that type of movies, they're always looking for canned goods and ammunition. Unless gold bullets work better to kill zombies it sounds like a bad investment to me. I've never seen the Left Behind movies, maybe there's actually going to be a huge market for golden calves.

Twitter @BruceEnberg - I'm going to have my Swiss Army knife with can opener attachment gold plated, just because....


Thursday, October 30, 2014

Everybody's getting Wifi these days

New claims for Unemployment Benefits have for some time been in the neighborhood of 285,000 each week. This hasn't been seen consistently since Clinton was President. It means either business is good and employers aren't laying off, or the outsourcing of jobs has tapered off dramatically so that people aren't permanently losing jobs. Since we've seen a record 56 continuous months of job growth it's likely the economy is in fact picking up speed.

The price for West Texas Intermediate crude oil is continuing to slide and is approaching $80 a barrel. Wall Street banks are predicting it will go to $70 a barrel. One prominent analyst has even predicted $10 oil with the end of oil's stranglehold on the energy market. He's since backed off on this prediction but stands by his claim the oil will continue to fall. Of course what we're really talking about here is the small amount of oil that trades on the open market. They used to call this the spot market, as in "we've got a spot too much oil coming in from the wells today, what will you give us for it?" Most oil is firmly in the hands of the few Big Oil Companies, and they're not going to sell it cheap.  

Gasoline on the other hand is subject to market forces. Gasoline makes up between 40 and 50% of a barrel of crude oil. But, the big money is in the much desired chemical fractions that make up only a couple of percent at most of each barrel. Gasoline and fuel oils (like diesel, kerosene and jet fuel) are basically waste products of refining to get the good stuff. If the tank farms are all full and the tankers moored offshore are full they have no choice but to cut the price to increase consumption. They used to just burn it, but since the Koch brothers haven't been able to kill the EPA that's not an option in the US.

So now you know why higher mileage standards are fought tooth and nail by the Republicans. Big oil could refine the extra fuel into other useful products but that's way more investment than simply buying elections. Most people have no idea how any of this works and you'll never hear about on the network news. The bulk of Americans polled think the country is headed in the wrong direction. The networks wanting to maintain the election horse race let people believe that this means everyone will vote Republican. In fact liberals are probably more upset than conservatives since they have better idea of what's happening.

New calculations of China's gross domestic economy show that based on actual buying power China has passed the US in realistic GDP. This isn't really surprising since China has more middle class than the US has people and they intend to move another 300 million from rural poverty into newly built cities over the next decade.

To put into perspective how China has been able to do this, they own over half the world's large construction cranes and consume over half the world's cement. China is building tens of thousands of miles of light rail and 250 mph bullet trains that run on thousands of miles of high speed track. At the same time they're eliminating passenger service from heavy rail lines allowing for more freight trains. The US of course has no bullet trains and runs its extremely limited passenger service on poorly maintained freight lines at speeds lower than Casey Jones operated his coal fired steam train on the Illinois Central in 1900.

The Republicans say we can't build any of the things that China builds in huge volume, but they promise to bring America back to the good old days. Casey Jones is rolling in his grave.

Twitter @BruceEnberg - I finally hit 666 followers today with the addition of Andrew Breitbart. Thanks to Satan for installing Wifi service in Andy's circle of Hell.

Friday, October 3, 2014

Have you gotten any postcards from the FEMA Camps?

Unemployment has fallen to 5.9% based on the Census Bureau's Household Survey showing 329,000 fewer people responding that they were unemployed. The employer survey shows 248,000 new jobs created in September. The 80,000 difference between these two numbers will mean that the employer hiring number will be adjusted upward as more employer data is processed. Both July and August numbers were adjusted upward by 31,000 and 38,000 respectively.

The Conservative take on the falling unemployment rate is that it's because Obama's IRS Death Panels have infected White Conservatives with the Benghazi Strain of Ebola, and UN troops have moved them to FEMA camps. Once they get to the Saul Alinsky FEMA camps, the White Conservatives only get ObamaCare and die. This is freeing up jobs for illegal immigrants who bring more disease. Conservatives are doomed unless they buy gold from Glenn Beck.

It's not that you can give Obama any direct credit for the recovery other than holding the GOP crazies at bay. If they had been able eliminate safety net spending, totally deregulate everything, eliminate the minimum wage and on and on, we'd be living in 1932, except back then half the population lived on farms and had food. The dystopia the Republicans would have created as the country began to spiral toward the drain is hard to imagine. Their goal of course was to create a Fascist State, but the problem is that these people aren't half as smart as they think they are. Who knows how that would have turned out.

It's not that they've given up on their goals but the opportunity has been lost for now. They are however still actively engaged in the slow decline of America. You've probably heard that former Federal Reserve Chairman Ben Bernanke was refused a re-fi on his home loan. Rumor is that he's standing on a street corner wearing a sign that says, "Will manage financial markets for food". A report from one of the big banks says that half the people with Student Loan debt don't qualify for a home loan.

In the olden days a college a degree or a union job was the basis for the American Dream. Anymore if you want the American Dream you need to be born in China. They have more middle class then the US has people and are planning to bring another 300 million up to that level in ten years. In ten years will there be any middle class in the US?

Twitter @BruceEnberg - where you can keep up on reports from the FEMA camps
                                         in case your Conservative relatives disappear.

Thursday, September 25, 2014

What's the daily bag limit on McDucks?

Dallas Federal Reserve President Richard Fisher said Friday in a Fox News interview that the US economy is threatened by higher wages. His solution is to head this calamity off by raising interest rates so that hiring is cut back. He fears that higher wages are inflationary. 

The Fed as a whole has been trying to create inflation in order to stop the rich from hoarding cash. The Fed has set a modest goal of 2% inflation instead of the 4 to 6% we really need to make such a policy work to jump start real investing (real as in creating jobs). Creating jobs is part of the Fed's legal mandate and the results have not been stellar to say the least. 

And guess what? A census of billionaires by Wealth-X and UBS (a census not a poll because a representative sample is all of them, so they just asked them) the census found that they're indeed hoarding cash. The billionaire's money bins have 1000% more cash in them than a year ago. Weaker billionaires have had to quit swimming in their money bins out of fear of drowning.

Wealth-X is a Singapore based intelligence service company that keeps track of the world's Ultra High Net Worth individuals (UHNW) and funnels profitable invests to them. UBS sponsored the study and is the same huge Swiss bank that paid off Senator Phil Gramm for repealing the Glass Steagall Act. It's repeal allowed Wall Street banks to engage in unlimited gambling with depositors money and was a major contributor to the 2008 banking collapse. 

The level of wage inflation that this Texas Fed banker fears could happen is 4% . He's at odds with Fed Chair Janet Yellen who sees wages as having pent-up deflation and believes that a jump in wages is healthy for the economy. After all it's people spending money that makes the economy work, not rich people swimming in it like Scrooge McDuck. 

If wages were to increase at 4% above price inflation for 18 years in a row, that would double wages. This would get workers back to roughly the position in the economy that they enjoyed on Jan 20, 1981, and never saw again. The Ultra High Net Worth pay the media big bucks to tell you how awful it is to increase wages, and in fact we'd all be better off if everyone's wages were cut. The UHNW don't collect any wages at all, so they're doing their part. Perhaps Wealth-X can do a census on what's the best swimming stroke to use in new currency as opposed a bin with a lot of older bills?   

Twitter @BruceEnberg - Where it's open season on McDucks every day.

Monday, September 15, 2014

Is that Jesus on your pancake? What if the media told you that it was?

The great commotion about Urban Outfitters selling blood stained sweatshirts from Kent State is a classic case of a huge tempest in a media teapot.

Some facts, UO only offered just one sweatshirt that was a supposed a classic, that's hype "for we got a bale of crap from Goodwill for a $10 a ton & we're going to sell them to suckers for $130 each".

UO made no claims of blood stains or bullet holes, although there are some brown stains that could be blood or motor oil. The 'bullet holes' are just snags in the fabric that appear to have been made with a seam ripper or some other tool. It's also possible the shirt was simply damaged by the machine that bales clothing for the rag trade. That is where most of your clothing donations end up.

The snags that in no way resemble bullet holes appear bright red because the inside of the sweatshirt is not faded as you can see on the inside of the collar. There are some hi-res pictures on Google if you want to look at it.

The real question is how did the media find out about the shirt. Did Urban Outfitters place a tip to get publicity? That would make them every bit as bad as you care to see them.

Did the person who purchased the shirt place the tip hoping to clean up on Ebay? The reporters are quoting them, but Ebay doesn't let you sell bloody clothing and such, so suggesting that it might be a real souvenir of the shooting was dumb. Ebay has taken the listing down. It's also possible that a reporter with an overactive imagination was surfing Urban Outfitters while eating his Jesus pancakes and freaked out.

Ebay will let you sell Jesus pancakes because that's not anything real, just like this sweatshirt. I personally just eat the pancakes without naming them. I learned that in 4-H as a kid, don't make a pet (real or imaginary) out of your dinner.

Twitter @BruceEnberg - Classic farm joke - The traveling salesman asks the farmer why he has a pig with a peg leg. Farmer says, "he was too good of a pig to eat all at once". Thankyou, Thankyou, I'm here on an extended engagement, remember to tip your server and try the veal special. (don't think of them as cute baby cows and they're quite tasty)

Thursday, September 11, 2014

Recycling the BS for fun and profit

The Gold Bugs are at it again, not that they ever really stopped. The latest nonsense is being sold by some quasi business reporter that claims to have a confidential informant inside the CIA. He claims that the agency is in a growing panic about China's looming attack on the USD using gold.

Supposedly the Bank of China has secretly acquired thousands of tons of gold bullion virtually eliminating the physical gold available on the open market. Stories of heavily armed convoys moving gold through the Hong Kong night are sparking the interest of people who 'invest' in gold. This is much the same as the way nearly naked bikini babes in TV commercials spark the interest of those who 'invest' in drinking beer. Either of these 'investors' are as in touch with reality as the other, well actually a beer drinker could get lucky, the gold investor will just get screwed.

The details of this clandestine gold hoarding by China vary wildly depending on whose particular sale pitch you listen to and what they're selling. Straight up gold salesmen simply predict a shortage of gold and/or the collapse of paper currency. Obama's fault of course.

Some are using it to push the idea that China is near collapse and desperately needs gold to stave this off. These salesmen are selling short positions on companies heavily invested in China since those stocks would plummet. Never mind that China's growth rate could be cut in half and still be double that of the US during the past 33 years. (since Reaganomics became the norm)

Other hucksters are selling bets against the USD by claiming a sudden huge rise in gold prices will drive the dollar through the floor. Since we haven't been trading the USD and other currencies by tying them to gold since Nixon was President, this claim seems a bit silly.

So what is really going on? It's not likely China is going to try anything flashy since they are already making money like they're the only 21st century nation on a third world planet. Are they buying gold? Sure, they buy everything that's for sale and they also mine ridiculous amounts of gold themselves.

We don't know exactly how much gold they have or want to have because we really don't have any hard numbers about anything in China that you can't see in a satellite photo. But while China has moved into the top ten of countries holding gold reserves, compared to the size of their economy they really don't have all that much.

The reality is that gold is just another commodity and while it has countless uses there is an awful lot of it. You could stop mining it now and not run out of it before the giant cockroaches have taken over the planet.

Twitter @BruceEnberg - where you'll learn things like, you can't actually see the Great Wall of China from space, it's really long, but really narrow.

Tuesday, September 9, 2014

The stock troll visited

I got some comments from the RWNJ Stock Broker Troll today. To summarize: he's gotten rich even though he's never made much money in salary. He eschews Treasury bonds (reality: people who were in bonds before the crash made a huge return).

He never keeps money in banks. When the stock market crashes, he says "Buy more!". Okay where does the cash come from to do that if he never puts money in banks or bonds? His Mattress?

He gave me every cliche that stock brokers use rope in the suckers. I won't post any of them, I'm sure he gets paid for each one. Something to bring in an extra buck besides greeting at Walmart.

I particularly liked his comment on the mongoose eating the Tea Party snake "Only the ignorant allow others to fuck them over. Get educated. You have a brain use it". He doesn't want you to get educated, he wants you to repeat his talking points and buy stocks from his boss.

Friday, August 22, 2014

Are you Pent-up?

Federal Reserve Chair Janet Yellen just introduced a new term into Fed Speak', "pent-up wage deflation". This seems to be an effort to explain away the problem of stagnant wages in the US economy that are not allowing the Fed to meet its 2% inflation goal by blaming it on the "inability or unwillingness of US firms to drastically cut wages" after the Bush collapse in 2008. This according to the Fed is making it possible for companies to now expand employment without raising wages. Ms Yellen did acknowledge that real wages had been declining for some time prior to the crash (real wages have been declining for 33 years, but who's counting).

Deflation is always the goal of an economic collapse as this further enriches the hoarders of cash since they can buy more assets for 10 cents on the dollar, and drastically increases the burden on anyone who is in debt since they now owe a much bigger percentage of their declining income on devalued property.

The conclusion that the Fed has jumped to is that wages could start to rise rapidly once this 'pent-up wage deflation' that's currently causing stagnation in wages is exhausted. Companies would suddenly be forced to start paying significantly more for labor. In that light they're planning to end their QE3 bond buying program in October. This happens to be just in time for the election. If this happens to trigger a huge decline in the Stock Market (as investors return to bonds), I wonder who the voters will blame for this even if the economy itself is in an accelerated recovery?

You can bet the corporate networks will be dutifully telling everyone about the billions that disappeared from their 401(k), never mentioning that their 401(k)s must inevitably lose money because looting them is where Wall Street is getting their billions from. Nobody in their right mind should put money into a 401(k), it ranks up there with planning your retirement around buying lottery tickets.

Twitter @BruceEnberg - where we are not 'pent-up'.

Thursday, August 14, 2014

Too Big to Fail is dragging its size trillion feet

New unemployment claims rose above 311,000 last week, but the 5 week moving average is still as low as it's been since early 2006. There were 209,000 new jobs in July increasing the record for the number of consecutive months of job growth to 53. The April and May new jobs numbers were both revised upward by 5,000 and 10,000 respectively to 229,000 and 298,000 new jobs.

Job openings in U.S. rose by 94,000 to 4.67 million in June indicating an economy on the rebound, this was further confirmed by a 4% growth in GDP during the second quarter. This included a substantial increase in imports which are subtracted from the GDP. We'd have a much more robust economy without our trillion dollar annual trade deficit thanks to 'free' trade.

Under the Dodd Frank Act the really large financial institutions, also known as the "too big to fail" banks, are required to submit plans that allow for their complete dissolution should they in anyway endanger the United States as they did under the Bush Administration. Those plans were submitted some time back and upon review they were summarily trashed by the Federal Reserve and the Federal Deposit Insurance Corp (FDIC). Their joint conclusion was that the bankruptcy plans submitted by all eleven big banks make "unrealistic or inadequately supported" assumptions and "fail to make, or even to identify, the kinds of changes needed to simplify their corporate structures".

The regulators then gave them a year to make "significant progress". Sounds like the banks are conspiring to drag this out hoping for a change in Administrations. The biggest banks are still making their livings off of Repurchase Agreements or derivatives. These worthless pieces of paper are what crashed the banks last time and regulators under the Bush Administration claimed they had no authority to seize the insolvent "too big to fail" banks as the FDIC did with thousands of smaller banks. If this provision of Dodd Frank were taken seriously, most or all of these "too big to fail" banks would be seized now for failing to comply with the law.

Under Dodd Frank the regulators do have the authority to act if anyone actually has the will to go forward against the richest of the rich. The requirement that the banks themselves create 'living wills' was supposed to make the task manageable, but these banks are really just undead blood suckers, so planning for their own deaths isn't in their nature. They should simply be turned to dust now instead of waiting for them to create another crisis endangering civilization itself.

Banks of this size serve no useful function but instead siphon off trillions of dollars from the economy in a combination of billions for themselves, and from the damage they do to the rest of us with the power they wield in politics, government agencies and the economy.

The largest banks should be run directly by the Treasury Dept, the individual states should have their own banks like North Dakota does, consumer and commercial banks should all be member owned cooperatives commonly know as Credit Unions. Having three types of banks would provide the necessary competition to provide a way to disclose any structural problems.

This would give us even better growth than we had before the New Deal was dismantled by Reagan and his friends as the moneyed elite would have no leverage to undo reforms. That's not to say we wouldn't need to be vigilant, co-ops can be captured by their management. The Soviet Union was run by its management class as was Fascist Italy, and we're very nearly to that point here now. Education is the only effective deterrent, that's why Conservatives are determined to control education at all levels and control the media as well.  

Twitter @BruceEnberg - unless you're too big to fail.


Friday, July 25, 2014

We're not Fair and Balanced, we tell the truth.

New unemployment claims dipped to 284,000 in the past week, and this is the lowest number since the week of February 18 2006. This was about the time that it became apparent that the Bush Depression was going to happen. History tells us that without significant gov't intervention it takes about ten years to recover from a Bank Panic, that's what they used to call these things prior to the New Deal that made bank crashes impossible to happen. Of course Reagan, Bush, Clinton & Bush undid all of those regulations and safeguards with the predictable result.

So now we're seeing the recovery start to pick up speed, but let's be clear, it's not because Obama has been able to do much to fix things. He just hasn't done any new damage and has more or less kept the Republicans in check. Corporate America is another matter, despite record stock prices, record profits, record CEO salaries and trillions in cash on hand they are refusing to invest at pre-crash levels. Just returning to those levels of investment would create 2 million new jobs, but they'll have none of it, and why should they? Things are going swimmingly for the very few at the top and it only stands to get better for them as the US drifts into its place as the largest third world economy.

The Federal Reserve has been trying to force their greedy corporate hands by creating inflation with only modest results. The Fed is basically too timid to take the kind of 'reckless' action that it would take to convince corporate America that they'd better try harder to make money, or watch their personal holdings evaporate to inflation. Or maybe they're really all in on it, or at least enough votes on the Fed Board are complicit to keep them from doing much more than keeping deflation from happening. That was the purpose of holding trillions in cash, we had been certain to a classic deflation spiral that would have allowed the cash hoarders to buy assets for 10 cents on the dollar. A 1000% profit is far better than working for a living.

Congress could easily intervene with tax policies to stimulate corporate activity, and by re-criminalizing the practice of paying CEOs with stock, basically undoing the Reagan Revolution. Requiring the DOJ to actually enforce the Sherman Antitrust Act from Progressive era of the 19th century as well as the New Deal laws that haven't been undone would do much to stimulate corporate activity. None of that is going to happen as long as there is a Conservative majority on Capitol Hill.

There is some movement among Democrats to start acting like Democrats. A number of liberals in Congress actually understand economics and Progressive policy are starting hold sway with their colleagues. It helps that the Reagan Democrats are facing extinction, the guys with lunch pails and 401(k)s are all retiring only to find that their college educated kids are raising the grand kids in the basement. Change is in the air, and it's got the pungent smell of dirty diapers. Some people are finding the saying, "hold your nose and vote Democratic" has a whole new meaning.

Twitter @BruceEnberg where we're not "Fair and Balanced", we tell the truth.


Thursday, July 3, 2014

Anti Corporation Day

The economy added 288,000 jobs in June according to reports from employers. The numbers for April and May were revised upward by 29,000 total, this indicates the five month positive trend is continuing to strengthen. The household survey conducted by the Census Bureau for the Department of labor showed a two tenths drop in the unemployment rate to 6.1%.

Over at Fox News they took this jobs report so hard that you would have thought Reagan's head had fallen from Mount Rushmore. Shhh... they think he's really up there with the Presidents that actually did something. Their business expert Charles Payne went on about how this would be really bad for the stock market, and he's also the same one that says things like, 'It Gets A Little Comfortable To Be In Poverty'. It seems his only qualification to be a business commentator is that he hates all things democratic, any sort of safety net for workers, and he firmly believes in the 'free market' fairy to solve all problems. 

The average hourly wage was up another six cents in June to $24.42, this is an increase of 2% over this time last year and staying ahead of core inflation. But, when you consider that the minimum wage should really about $22/hour you get to the real reason the American Dream is dead, it's because the average wage is only ten percent above what the floor should be.  For many people there isn't enough to live on, and the majority have little or no disposable income. 

Plus we have the people at the very bottom getting subsidized with government money. Each Walmart store sucks up between one and two million dollars in benefits to its employees because they are simply paid too little to live on. The total workers receive is actually equal to Walmart's annual profits. Walmart is not an incredibly efficient competitor in the retail market as it portrays itself, it's simply powerful and ruthless. 

Since it's the eve of July 4th, let's remember that the Revolutionary War was fought simply to break the monopoly of the British East India Company. It wasn't about the Colonists being mad because they had to pay taxes, they weren't tea baggers. It was because British East India Company had recently been exempted from any taxes & had all the taxes it had ever paid refunded. Talk about your Corporate Welfare. 

The Colonists were also fearful of the increasing harsh treatment that the Walmart of the day was encouraging the British government to engage in, all in the name of corporate profits of course. American ships were labeled as smugglers and the manufacture of goods that the Corporation choose to trade in was prohibited in the colonies. And since most of Parliament and the King were shareholders, they had no interest in hearing the grievances of middle class Americans. Sound familiar? They were all Conservatives after all.

Twitter @BruceEnberg - Happy Anti-Corporation Day!  


I had a right wing troll try to get me to publish a link to an anti-science global-warming-is-a-hoax website. He sent me a comment filled with much flattery and intimating that he too was fighting the good fight. He included a link to what at first blush looks like a green website. I guess it didn't occur to him that I'd actually read any of it since Conservatives aren't big on research. Why do these right wing pricks like Ed have to waste my time?

Friday, June 27, 2014

Who's gouging who, get your score card here

The Federal Reserve has announced that they'll 'taper' bond purchases under QE3 by another $10b to $35b/month. Conservatives actually whine about this driving up the stock market as if that were a bad thing. All the people who bought into Reagan's 401(k) instead of a pension BS probably appreciate the market being saved, even if they didn't really get all of their money back with Wall Street capturing a huge chunk for themselves. That is why we have the big swings, there is simply no way to pay off everybody that thinks that they doubled or tripled their money in the market. And these same Conservatives want you to invest your Social Security in the market too. The Fed is also buying mortgage backed bonds and this appears to be having a positive effect with Housing Starts way up over this time last year.

Fed Chair Janet Yellen has said they'll keep interest rates low for some time even after the economy starts to recover. It may be premature to be talking about any sort of recovery however after the latest revision to the First quarter GDP. It apparently declined 2.9% on an annual basis caused by sagging consumer spending and some really bad export numbers. Since the GDP of the 4th quarter showed a 2.6% growth this downturn is probably just the result of the bad weather, so it won't be a problem unless the numbers that come out in July for the 2nd quarter are also negative.

The SEC is finally showing some interest in prosecuting the ratings firms who were instrumental in creating the Bush Crash. They were allowing mortgage companies & banks to sell junk bonds with little or no value by giving them AAA ratings the same as Treasury bonds. There's lots of guessing going on as to why the Feds might prosecute now and didn't have any interest in doing it before. My idle speculation is that the senior Bush people imbedded in the various gov't agencies to gum up the works are retiring and being replaced with people who might actually do their jobs.

Just in case you hadn't noticed, a new study shows that the average wealth of Americans is still 43% less than in 2007, even with the stock market recovery. It's also down 36% from 2003, meaning those glorious Bush years were worse than just a bust.

Even up in the top 5% where net worth averages about $1.4 million, they've seen a 16% decline from 2007. Of course when you get up into really big money as you might guess this isn't necessarily so at all, and their share of the national wealth continues to grow. It doesn't matter to a billionaire how many billions he has, it only matters that he has it all and you pesky peasants don't have anything.

It was all over the news today about how gasoline is going to be $5/gal if the Iraq unpleasantness continues, there are huge shortages don't you know. The reality is quite different, analysts had predicted a 2 million barrel decline in US stockpiles but reports to the government showed stockpiles of oil actually rose by 1.7 million barrels last week. Gasoline supplies climbed by 700,000 barrels and distillates like diesel, jet fuel and such rose by an additional 1.2 million barrels.

Fuel exports are still a big part of the US economy at 1.1 million barrels per day, if gasoline goes up at the pump it will be from old fashioned price gouging. And the Obama Commence Dept just eased the ban on the export of crude oil put in place 40 years ago, this is something you probably won't hear Sarah Palin mention while she's telling you how Obama has halted all oil drilling everywhere, all time forever, also too.

Twitter @BruceEnberg - where we tell you who's gouging who.

Friday, June 13, 2014

It's time end the nonsense

Thursday, June 12, 2014

A spike in the price of garlic

New unemployment claims were up last week but are still close to seven year lows. The number of job opening increased about 9% from March to April and were up 17% compared to April 2013. At 4.5 million this is the largest number of jobs that employers reported that they were recruiting for since 2007. Job opening have held at over 4 million for 3 consecutive months suggesting a general upturn in business.

The number of workers voluntarily quitting their jobs was up 11% over last year and people willing to change jobs suggests that the internal mood at companies is more positive. Of course some of these people may be motivated by their ability to always get insurance under ObamaCare reforms and no longer feel locked in at their current employer.

Russia appears to be moving aggressively to do a good deal of its trading in the Chinese Renminbi and some lesser Asian currencies, basically anything but the USD or the euro. China has been actively positioning itself to have a major world currency by persuading Australia, Britain and others to hold large reserves of Yuan. This makes it unnecessary to use the USD as an intermediate currency for trade with any number of smaller countries.  

Euro zone banks have begun to charge interest on cash deposited by large account holders. US banks have been doing this to some degree on dollars for years but it's only recently that the European Central Bank felt the need to do something about cash hoarding. It's always been the hallmark of the boom and bust cycles of capitalism that the rich begin to hang onto money when they smell the blood in the water of a deflationary collapse. The austerity measures that have been imposed on the debtor countries of southern Europe require significant deflation and this brings potential pennies on the euro buying opportunities down the road.

Andrew Mellon who was Sec of Treasury for three Republican Presidents in the 1920s summarized a deflation collapse as "when assets return to their rightful owners". He meant himself of course, it's difficult to estimate Melon's actual wealth as he was dodging the financial disclosure requirements of his job as well as income taxes, but he was perhaps a trillionaire in today's dollars. The Koch family fortune was made by using the boat load of cash Daddy Koch got from Josef Stalin for strategic oil well technology to buy up assets for 10 cents on the dollar.    

The price of oil is up sharply because of the imminent collapse of the oil companies' puppet government in Baghdad. Oil still has a long way to go to get to the $140/barrel price that Bush achieved during his Presidency. Starting with oil at $18/barrel, a price that analysts thought would be unsustainable once Saddam Hussein was out from under sanctions, Bush did pretty well for his cronies. That "Mission Accomplished" banner Bush got into trouble for was simply displayed at the wrong event. It was switched with the one that went to the country club that said "Go Navy".

It's a Full moon tomorrow on Friday the 13th, this rare event won't happen again for 35 years. If you live near Dick Cheney or any other Neo-Cons you'll want to hang extra wreaths of garlic before sunset.

Twitter @BruceEnberg - it's going to be nothing but garlic bread all next week.

Friday, June 6, 2014

Economic news old and new

New unemployment claims were up slightly but are still near the seven year low last seen before the Bush crash really started to pick up speed.

Over 217,000 jobs were created in May maintaining the average that we've seen during this slow climb out of the hole that the GOP has been endeavouring to keep us in. With immigration near zero that is about 150,000 more jobs than the number of new people entering the workforce. The unemployment rate based on household surveys remained unchanged at 6.3%. This is surprisingly the same rate of unemployment seen at this point in the Reagan Presidency.

However Reagan spent upwards of $11 trillion (in today's dollars) on stimulus to jump start the economy. Most of the money was squandered on military spending of course. He doubled the size of the USN to counter an imaginary Soviet buildup. This included four combat groups built around WWII battleships that were obsolete when Reagan was serving in the Army film office in Hollywood. He also funded an entirely new ICBM system that was immediately scrapped thanks to Reagan's nuclear weapons treaty with the Soviets. Reagan reinvigorated fears of nuclear annihilation to push through spending $1t (or the equivalent of $3.5t) on SDI or Star Wars research that produced exactly nothing.

Reagan did fund some highway safety improvements like guardrails and sand barrels at bridge abutments. Not so many bridges though. He did pay for lots of airport runway improvements, these were mostly at small remote airports to make them long enough to handle corporate jets. This was supposed to bring jobs to rural america. Of course at the same time he was signing stacks of exemptions to tariffs that began the de-industrialization of America.  

Speaking of thing no longer made in this country, China has agreed to abide by a WTO ruling that China must end its tariffs on the export of Rare Earth metals. These metals are essential to just about everything that we would consider to be a 21st century product. This does nothing to address 97% monopoly that China has on production of these metals. Eventual monopolization of metals was a policy that China put in place when Reagan began normalizing trade with China. Geo W Bush allowed the sale of all existing US rare earth production equipment to China shortly after 9-11. Building a new rare earth industry in the US is a ten to twenty year project, and there is very little being done about it.

The SEC has announced that they are coming out with new regulations on high speed stock trading that basically takes advantage of stock market swings in the nano-seconds before this knowledge becomes available to the public. The SEC also says they will address the so-called Dark Pools where something like 60% of all stocks are traded with no transparency to the public. We'll see if this new regulation turns out to be anything meaningful.

Twitter @BruceEnberg - on a computer not made in the US, and that even if we tried to build in the US we would need parts that can only be made in China thanks to Reagan and friends. In his mind Reagan was one of the Greatest Generation, but he really should be remembered for what he actually did.

Thursday, May 29, 2014

Don't just sit there with Slime on your head

Now that more data is in, the Bureau of Economic Analysis say that the GDP shrank during the First Quarter by 1% adjusted to an annual rate. If this were to happen again in the second quarter we would officially be in a recession. But, since we had an official growth rate of 2.5% in the GDP in the fourth quarter, I would bet against that happening.

New unemployment claims were back down again for last week and this would bode well for a good job creation number next Friday. This follows a good number for last month and would indicate little chance of an official recession. That doesn't mean that things aren't still crap for the majority of Americans. Things are so bad that several major employers of low wage workers are hinting support for, if not endorsing outright a significant increase in the minimum wage.

Increasing pay for minimum wage slaves would help the economy but doesn't address the falling wages for the traditional 'good paying job' that is simply disappearing. Volkswagen's non-union plant in Tennessee will only pay $27/hour as opposed to GM, Chrysler, Ford, Toyota and Honda that pay $52/hour. German factories (in Germany) pay still higher wages and much better benefits.

But is VW really out of line with these low wages? In US factories it's been the practice for a couple of decades that so-called second tier union jobs pay less than $20/hour with no prospect of ever getting real union wages, and increasingly they are being stripped of all benefits. As older full union scale workers retire, their good paying union jobs that built the American middle class are retiring with them.

With the next economic slump there will be another push to eliminate the pension benefits that these Reagan Democrats have been taking for granted. Their great grandfathers fought for Union scale, but Reagan convinced them that they were really capitalists, and American exceptionalism meant they would face no real competition from Asia for their jobs if tariffs were ended. These newly impoverished retirees that ended union scale for everyone but themselves can expect no sympathy from the second tier wage slaves that replaced them.

The high-tech jobs that were supposed to replace these 'dirty' (but good paying) factory jobs are disappearing even faster. The high-tech jobs that were actually comparable in pay to traditional factory jobs have largely disappeared and even the ones that pay in the mid-teens are being sold to China. People like Mitt Romney loot the cash from a company including its pension plan before crating up the equipment and shipping it to Shanghai getting a premium price for it because it eliminates US competition at the same time. Some might call this treason.

Speaking of traitors, median CEO pay has now crossed the ten million dollar mark, or 257 times average worker pay. This is up from 181 times worker pay in 2009. In other industrial countries CEO pay barely gets into double digit multiples of worker pay. Prior to Ronald Reagan, US CEO pay was less than 30 times worker pay, so we're talking a 1000% increase in pay in 30 years. And the ghost of Reagan says, "Well, I told you Trickle Down Economics would work", "What do you mean voodoo? Well there you go again."

Twitter @BruceEnberg - where you can find out who to call when you're covered in the GOP's ectoplasmic slime.

Thursday, May 22, 2014

It takes a sharp wooden stake

The new unemployment claims reported on last week were at a seven year low, the report for this week is up again close to the moving average, but overall it's not bad news for the economy. We will probably see more people leaving the workforce now that they don't need to stay with the company that provides them health insurance, and this should be reflected in a falling unemployment rate. Worker mobility should improve from this 'portability' aspect of ObamaCare, and this could result in fewer people being laid off since workers are able leave a company for another job rather than hanging on until the ax falls.

In theory we should see an upturn in people creating their own business since they don't need to worry about finding health insurance. There is however the problem that if a person is a college graduate they are likely be carrying a large student debt load and this hampers entrepreneurship. Unless you simply take Mitt Romney's advice and borrow the money from your father to get started, it worked great for him.

The more than one trillion dollars in student debt is also overhanging the housing market. It used to be that you could count on college graduates in their twenties to buy houses, but even if you aren't working at Best Buy with your engineering degree you're still screwed. Banks are requiring a mountain of paper work, a large down payment and a cash reserve in the bank. The fact that your student loan would be enough to buy a modest house doesn't really work for you, or for the economy.

Home sales are down 7% compared to last year and are many are 'cash' sales, and these are still on the rise. Cash sales mostly go to Wall Street hedge funds that have already bought up close to 150,000 houses, getting them at fire sale prices from banks that had foreclosed. In theory these houses are to be managed as rental properties providing a tidy return to investors that buy securities based on portfolios made up of these houses.

If this has a familiar sound to it, like the creak of a floorboard in horror movie, it's because these very same houses were once securitized based on their mortgages. The investors then bought so-called 'insurance' or rather derivative contracts based on pure speculation on whether or not these investments were actually worth anything. It was not unusual to have four or five layers of derivatives on every loan with the derivatives repackaged in increasingly complicated formats. This was what caused the collapse, not the relatively few homes purchased by brown people that the Conservatives blamed for the collapse of the World banking system.

No matter how many times you kill the monster, Wall Street bankers just keep coming back. Elizabeth Warren keeps telling us about the danger, but what she really needs is a wooden stake, a few clever puns and some fast paced theme music. Then she could just dust the demon bankers once and for all.

Business lending is up, but it's still really hard for a small business to get a loan. Not to worry, a new type of demon has crawled up out of the Wall Street Hellmouth to fill that niche. Boiler room operations are running full steam calling contractors, truckers and florists to offer them loans regardless of their credit rating at the generous sub-prime rate of only 125%. Since these are business loans they are not covered by consumer protection regulations so they can pretty much do as they like.

This lending is no small potatoes, these demon spawn are doing twice the loan volume of the Small Business Administration and growing fast. A natural disaster such as hurricane will wash these slimy creatures up on the beach where they begin to prey on small businesses in a similar fashion as Pay Day Loan operators do. An initial line of credit will be offered with no collateral requirement but with an exorbitant interest rate and daily payments bled from the victims neck, I mean deducted from their bank account.

Of course any default on the daily payment will dig you in deeper and deeper with no hope of escape. The Sopranos did this to a Sporting Goods store in one episode. Tony could have worked on Wall Street, made more money and not needed to fear the Feds.

And Wall Street is now securitizing this debt as well, investments are being sold with loan tranches ranging from 29% to 134%. Usury laws are being avoided by partnering with banks in Utah were no such moral constraint exists. The scum can get away with this thanks to the Corporate Supreme Court of the United State that legalized the creation of such fictions to avoid local laws. So much for Conservatives belief in State's Rights. In this 'republic' only non-living things have rights.

Twitter @BruceEnberg where the concept of rights for humans is still discussed. Bankers and other Demons will be staked, or at least blocked from tweeting.

Saturday, May 17, 2014

Fox Newspeak or how to talk like it's 1984

Today's useful phrase from Fox Newspeak is Free Market. To use this expression properly you must subscribe to the notion that government is BAD, BAD, BAD and no BAD can exist in the absence of government. The True Believer that advocates for this actually thinks that he'll no longer be powerless individual once government is removed from the equation.

In the Free Market all transactions will be fair and competitive, and should a 'bad actor' appear he will be dealt with by the Free Market. If a corporation's product should kill a bunch of people the Free Market will correct this situation, since the dead people will no longer buy that product. The same people who advocate for Free Market also advocate for Tort Reform, that is you can't sue a corporation for damages, but they can sue you for libel if you tell anyone that they killed your family.

Some believers claim that in a Free Market the corporations would create some sort of third party business that would guarantee that the products being sold were safe. Of course their only possible revenue stream would be from the corporations, so guess who they would be working for. BBB has been caught repeatedly selling its stamp of approval to charlatans, and we don't even live in a Free Market.

There is no end to the mental machinations the True Believers will go through to create a scenario where this would be good thing for consumers. They choose to be totally unaware of the history of the gilded age that led to the government regulation of business.

Friday, May 2, 2014

We're number one! We're number one! What? We're number two, we're number two!

The unemployment rate fell to 6.3% in April, the lowest it's been since Sept 2008, which was still early in the Bush Crash. There were 288,000 new jobs created last month spread across all sectors of the economy. February and March job numbers were both revised upward by 36,000 combined.

First quarter GDP growth was only 0.1% as exports dropped off sharply mostly due to bad weather, as consumer demand actually increased during the quarter. It has also been noted that the economy would have actually shrank during the first quarter if not for the growth in healthcare industry, particularly from new jobs in doctors' offices attributed to the newly insured under ObamaCare.

The Dept of Justice, with much hoopla displayed in the NY Times, is finally starting to pursue criminal charges for the too big to jail banks with action pending against Credit Suisse and the largest French bank BNP Paribas. The DOJ however continues to express concern about taking any action that jeopardizes the economy, so don't expect much more than a light slap on the wrist. And don't expect the Wall Street banks to show any decline in their stock price based on concerns over prosecution.  

The latest numbers now show that China will overtake the US as world's largest economy by the end of the current year, and this is five years ahead of schedule. Despite constant bleating from the western Right over the last 30 years predicting China's inevitable collapse, China continues to push ahead with policies that we haven't seen in this country since the Eisenhower administration.

China engages in massive infrastructure projects, pro growth trade policies and the development of all types of industry. They are utilizing everything that the US has learned about economic development all the way back to the Hamilton plan of 1792. China learned from Lincoln's expansion of the railroads and land grant colleges, and from everything FDR did with the New Deal. Basically China is doing everything that America has done in the past but no longer does because billionaire Conservatives say that we can't afford it.  

Twitter @BruceEnberg - where we come to grips with what it means to be number two, at least until we fall to number three.

Tuesday, April 29, 2014

Better Living through Chemistry or how to avoid Mass Extinction

Cyclodextrins are sugar molecules that form into circles and will hold nearly their own weight of a targeted liquid. This is the secret to the powdered alcohol that got approved by the Treasury Dept for tax purposes only to have that approval revoked in less than a week. These sugars are useful in the food industry and pharmaceuticals. 

Over a 150 differently shaped molecules have been created so far and each will absorb a specific type of liquid, cholesterol for example can be trapped and removed from food with one. Drugs can be time released or delivered so that won't be absorbed until they reach the large intestine. There is one that soaks up certain offensive odors that's sold under the trade name Febreze. 

Some are available to consumers that can yield unique flavors in gourmet cooking.  There is a recipe online if you want to make your own powdered alcohol. Great for those of you who prefer 'freeze dried' stores instead of canned goods. 

The official report on the one kiloton blast that occurred in the unregulated Libertarian Paradise of West, Texas was a 'preventable' occurrence (well duh). Ammonium nitrate fertilizer is actually safe to handle, it won't explode, it's actually a very stable oxidizer. To use it as an explosive its saturated with fuel oil and detonated using nitroglycerin in a highly concentrated formula of dynamite. Ordinary dynamite won't set it off, but if you get a really hot fire going you can heat to the point that it will start oxidizing any available fuel. In West, Texas this came in the form of an old wooden feed warehouse being used a fertilizer plant. The use of this structure is something regulators wouldn't have allowed, had there been any. 

Once the oxidizing reaction starts, it produces a fireball that only takes a fraction of second until it uses all the ammonium nitrate or consumes everything organic within its reach. This includes the wood of surrounding buildings, some metals, fuel in tanks, tires on vehicles including fire trucks, hoses, firefighters and anything else it touches. This fire ball moves up and out in the classic mushroom cloud but also generates a shock wave the emanates out at ground level creating mass destruction at a considerable distance from the actual fire ball. But don't worry, the 'free market' will take care of this problem in the future.

Speaking of the 'free market', the increasing popularity of E-cigs has prompted lobbyists to push for them to be regulated by the FDA much as cigarettes are now. The official line is that you can't have just anybody mixing up nicotine in a bathtub, an apparent reference to Prohibition era alcohol that was sometimes deadly. The term 'bathtub gin' actually doesn't refer to the quality of the hooch but to the shape of square gin bottles that would allow them to slide under a bathtub that had legs. Round liquor bottles were just a little too big. 

Guess who is getting into the E-cig business? The big three cigarette companies of course, they don't mind the regulations since they will write them.

In case you haven't seen the screaming headlines in the corporate media, the Navy Research Lab has developed a proprietary process that has ended Big Oil. They are doing this by using a electrolytic process to remove dissolved and bound CO2 from seawater and simultaneously producing Hydrogen gas. The gases are then converted to liquid hydrocarbons by a metal catalyst in a reactor system. Researchers estimate the cost on a commercial scale to be about $3/gallon. At that price the Navy doesn't need to buy fuel and transport it. The US military is the world's single largest user of fossil fuel, (up until now).

According to the USN, all it takes is a lot of electricity, like you have on a nuclear aircraft carrier, or say from a wind farm built offshore. The process can actually work using nothing but air, but sea water has much more CO2 and seawater is something the Navy has plenty off. Other than the obvious big advantage that the process is completely carbon neutral, it also reduces the acidity of seawater. During the Permian Extinction, that killed almost the entire planet, the high acidity of the oceans caused them to become devoid of life bigger than some poisonous bacteria. This will be our fate if Global Warming exceeds a certain point. Will the Navy save us, or sell the process to Big Oil? Trade it for a handful of navy beans perhaps?

Twitter @BruceEnberg - where we stave off mass extinction one tweet at a time.

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.