Archive - Jul 15, 2013

PROPAGANDA IN THE USA!

Extrapolating the current decade's growth rate, Global GDP shoould be around USD 130tn by the end of 2020. However, based on the seemingly obvious cycles that have appeared through this series, we may be at a lowly USD80tn - over 35% lower than serial extrapolators believe potential to be... Is it any wonder so many of the current GDP forecasts have the mother of all hockey-sticks built in - despite current estmates being slashed non-stop for the last two years...

Ben Bernanke blames fiscal policies out of Washington.  However, it is starting to look more and more like Fed policy is equally to blame for the lackluster U.S. GDP growth.

Ten-year old cystic fibrosis patient Sarah Murnaghan captured the nation’s attention when federal bureaucrats imposed a de facto death sentence on her by refusing to modify the rules governing organ transplants. The rules in question forbid children under 12 from receiving transplants of adult organs. Even though Sarah’s own physician said she was an excellent candidate to receive an adult organ transplant, government officials refused to even consider modifying their rules. Supporters of the current system claim that organ donation is too important to be left to the marketplace. But this is nonsensical: if we trust the market to deliver food, shelter, and all other necessities, why should we not trust it to deliver healthcare—including organs?

Call it what you will, a handshake or a parachute; the result is all the same. The rest of us just get elbow out of the way as we get pushed through the back door. The top executives leave by the front door and to boot they hop into a chauffeur-driven car (paid by the company, of course) as they drive off into the sunset. To parachute someone: send them elsewhere, relocate them, bundle them off, pack them off or dispatch.

"Thx 4 all ur help, but ur fired." That was the text message that a group of 12 Florida restaurant employees received on July 4th. As the Daily News reports, Jodi Jackson, who spent two years working at Barducci's Italian Bistro in Winter Park, exclaimed, "I think it's immoral, I think it's cowardice." The staff have yet to receive their final paychecks, "I think we all deserve our compensation for money he's already made from us," one employee noted, "I don't know what to do now." So, it seems, despite the all-time highs in stocks, yet another group of employed people is feeling the pinch of a nation of corporations increasingly forced to margin-expansion at any cost. It is self-evident surely that at some point the cost-cutting margin-expanding feeds back into economic reality or is it simply moar of the same as the private sector employed are forced to become public-sector sucklers en masse. Everyone has heard about the proverbial text-message break up not. But getting a pink SMSlip is certainly one of the more novel developments of the New Abnormal, where employers are increasingly acting like teenagers.

As everyone knows, the only reason to become a banker, and be subject to constant derision, abuse, scorn and hatred by the "99%", and potentially to a fate comparable to that of the aristocracy in France circa 1789, is a simple one: money. Specifically, get as much of in as short a time period as possible, be rewarded with a taxpayer bailout or two when massive bets go epically wrong, then convert all your cash into "hard assets" and escape to a non-extradition country before the latest credit bubble pops. In other words, a simple opportunity cost analysis. Which then begs the question: why are there bankers in the following European countries: Slovenia, Romania, Malta, Lithuania, Estonia, Czech Republic and Bulgaria. The one thing in common these countries have is that according to a just released European Banking Authority study, in the year ended 2011 not a single domiciled banker made over €1 million! In other words: bankers working for feudal peasant salaries. What a scam.

Prompted by their FrAAAnce downgrade to AA+, French-owned Fitch has downgraded Europe's last best promise/hope - the EFSF - from AAA to AA+... but the crisis is still behind us - we are assure by such truth-sayers as Juncker, Barroso, and Merkel (pre-elections). The key sentence is "Following the downgrade of France's IDR, the EFSF's long-term debt issues are not fully covered by 'AAA' guarantees and over-guarantees and, for debt issued before October 2011, by the cash reserve." So that's good then... Don't worry though since "Fitch assumes there will be progress in deepening fiscal and financial integration at the eurozone level in line with commitments by euro area policy makers"

The perception of natural gas as a mainstream fuel for vehicles runs the gamut, dependent upon where you live: from the improbable... to the viable... to the everyday reality. So here are ten points to stir up the melding pot of the great natural gas vehicle debate.

As the mainstream American press goes after NSA whistleblower Edward Snowden and Guardian journalist Glenn Greenwald, Germany's Spiegel note that the leakers' revelations appear to becoming an afterthought. As the Guardian's American chief noted, their competition has a "lack of skepticism on a whole" when it comes to national security. Critical scrutiny, she said, has been considered "unpatriotic" since 9/11.

The pain that banks have experienced can best be seen in the following chart showing the latest update in "Net unrealized gains (losses) on available-for-sale securities" from the Fed's weekly H.8. Two things come to mind: i) For the first time since April 2011, unrealized gains in AFS portfolios among the entire US banking sector became losses, and  ii) The two month rate of loss creation in MTM exempt AFS portfolio soared to the highest in series history.

A society of the increasingly overworked and involuntarily idle is not a stable or happy one. Yes, there are pockets of state fiefdoms and private sectors where workers are well-compensated for low-stress work, but these are exceptions, not the norm. No wonder those who can do so are quitting and filing for Social Security or tapping their 401K retirement plans to get by, or otherwise opting out of the labor force. Pressure is building along multiple fault lines beneath the supposedly expanding American economy. What's really expanding are stress, ill health, chronic depression, financial insecurity and the frustrations of the powerless.

... everything else (give or take) is.

Last week it was JPM just somewhat contradicting Jamie Dimon's "kid gloves" CNBC infomercial, when it slashed its Q1 GDP forecast from 2% to 1% (and about to be revised to sub-stall speed). Today, following the latest retail sales unadjusted disaster, it is Goldman's turn to slash its Q2 GDP tracking estimate from 1.3% to 1.0%. Stall speed has arrived despite everyone's forecasts for the this time it's different glorious US economic renaissance (so far "deferred" each year since 2010).

"Her neck had an obvious electronic injury," was the local Public Security Bureau's findings following the death of Ma Ailun, a 23-year old Chinese woman whose family alleges she was electrocuted by her iPhone. In its statement, Apple said: "We are deeply saddened to learn of this tragic incident and offer our condolences to the Ma family. We will fully investigate and cooperate with authorities in this matter." The case remains under investigation, with Chinese officials yet to provide details on whether her smartphone, the charger, or something else killed the woman; but, as the WSJ reports, The China Consumers’ Association in May warned about the dangers of a "flood" of uncertified power chargers on the market (in Chinese). In the release the association warned the chargers could turn a smartphone into a “pocket grenade” and cause explosions, electric shock, or fires in a variety of electronic devices. Reuters notes that Ma's sister tweeted on Sina's microblog saying that Ma collapsed and died after using her charging iPhone 5 and urged users to be careful and the message has gone viral - "(I) hope that Apple Inc. can give us an explanation. I also hope that all of you will refrain from using your mobile devices while charging."