Some Terrible Things

Some Terrible Things

By Phil of Phil's Stock World 

I have to tell you some terrible things.  

I didn't want to do it - I almost didn't bother with this post as it's soooooo depressing and who wants to hear that crap but there's also a lot of stuff going on and it's my job to inform you of it so I'm HOPING (because I am a hopeful guy) that, if we get it out of the way now, we can start the new week in a better mood. So, I've decided to post up some of the news stories I've been reading but intersperse then with encouraging pictures to take the edge off a little:

First, a couple of items about jobs. It seems that the aggregate hours worked in U.S. economy from all workers moves back to February 1999 levels. 25 million Americans out of work or looking for full-time work as middle class continues to shrink.  RortyBomb points out: "This is part of what people mean when they say there’s unused capacity, and that’s a tremendous waste of people’s talents and lives."  An unemployed person detracts from the wealth of the nation and anyone in Congress who doesn't believe that does not value the American workers and should not BE valued by them in November!  Equally awful:  At this point, only 45 percent of Americans now have health insurance through their employers. Equally startling is the 16.6 percent (52M) that have no insurance at all. The employment figures are one facet of the larger storyline of a shrinking middle class.

Meanwhile, as our Congresspeople tell us we can't afford $1Bn for this and that program that benefits the American people, Brown University's Eisenhower Research Project just released a study that shows 225,000 people killed in the Iraq-Afghanistan wars, 137,000 of whom were civilians with 7.8M people turned into refugees - about the entire population of Connecticut and Kentucky combined forced to flee their homes and about 20% of population of the countries we invaded.  They US has spent about $4,000,000,000,000 on the war (so far), which was enough money to give 8M people $500,000 each rather than blowing up their homes.  That's OK though, there are 110M taxpayers in America so we only borrowed $36,363.63 each to pay for it (so far).  

According to the Institute:  "The human and economic costs of these wars will continue for decades, some costs not peaking until mid-century. Many of the wars’ costs are invisible to Americans, buried in a variety of budgets, and so have not been counted or assessed. For example, while most people think the Pentagon war appropriations are equivalent to the wars’ budgetary costs, the true numbers are twice that, and the full economic cost of the wars much larger yet...  There are many costs of these wars that we have not yet been able to quantify and assess. With our limited resources, we focused on U.S. spending, U.S. and allied deaths, and the human toll in the major war zones, Afghanistan, Iraq and Pakistan. There is still much more to know and understand about how all those affected by the wars have had their health, economies, and communities altered by the decade of war, and what solutions exist for the problems they face as a result of the wars’ destruction."

Don't worry about the money - WE'LL PRINT MORE!  In all of last week's excitement, no one noticed the Fed's balance sheet clocking in at $2.84Tn - up $600Bn in 6 months in 2011.  Now $100Bn a month may not seem like a lot to us rich Americans but it's a pretty shocking number to someone in Greece, who is being told the THEY are irresponsible for running a $50Bn ANNUAL deficit.  Keep in mind that $100Bn a month is only covering 2/3 of our monthly deficit.  The Fed's generosity has led to $1.6Tn of EXCESS reserves piling up among their Member Banks - money that was supposed to be loaned out to provide liquidity to the economy but instead is being pooled in order to collect interest rate spreads that generate ever-increasing bonuses for the Banksters.  

Speaking of Banksters - they are actually very poorly paid compared to other top 10 earners, earning "just" 333 times what the average American family earns in a year, which is nothing compared to the top 10 non-financial CEOs, who earned an average of 946 times what the average family earns in a year.  Perhaps that's because there aren't 10 IBanks anymore (that's an ROFL if you are an insider - it's funny 'cause we bankrupted the other guys, wiped out their investors and took all their money)! Anyway, Forbes came out with it's "Top 10 Income List" and Les Leopold summed it all up:  

The Highest Income Celebrities, CEO and Hedge Fund Managers (2010)
The Top Ten	Average Yearly Income	Number of years if would take for the average American family to earn as much.
Hedge Fund managers	$1,753,000,000	35,217 years
Movie directors/producers	$126,000,000	2,531
Top celebrities from all fields	$119,800,000	2,407
Pop musicians	$87,200,000	1,752
Non-financial CEOs	$47,100,000	946
Athletes	$44,600,000	896
Movie stars	$42,600,000	856
Authors	$26,900,000	402
Lawyers	$20,000,000	402
Bank/Insurance CEOs	$16,600,000	333
Median Family Income (2009)	$49,777	1 year

Yep, Hedge Funds are definitely the place to be with the top 10 of my fellow Hedge Fund Managers earning an average of 35,217 TIMES the median family income of $49,777 - you can see why I'm motivated! Oprah left a big job opening as she clocked in with $290M of income in 2010 and U2 made $190M touring (but they will lose it on Spider Man).  Leo DiCaprio got $77M and I have no idea what movie he was in last year and Tiger Woods may have gone soft but he's still good for for $75M.  Another tip if you want to be very, very rich is make sure you don't forget your penis - as only 6 of the top 100 highest income Americans were women!  

CNBC's Rick Santelli, who is the proud owner of a penis, says the problem is Government Spending, not the fact that there are single people who make as much money as 35,000 middle-class families - as if the money made by one person isn't taken from others.  Buffett is wrong, Santelli says - taxing the above 100 people who make as much as 500,000 middle class Americans won't solve the problem but cutting government support for those 500,000 middle class Americans will.  And, of course, we won't even discuss the $600Bn that Corporate America is failing to pay (and that's only counting on what they declare as profits), that's enough for 12M other families to get $50,000.  

Bill Buckler presents an amusing compendium of facts, which Zero Hedge calls "inconvenient truths," in the latest edition of his newsletter, some of which would make for entertaining anecdotes if presented at the Biden "deficit cutting" talks, which also, and very paradoxically, aim to cut US debt by increasing it.

• Not one penny of US debt has been repaid for 51 years: the last time US government funded debt actually decreased on a year-over-year basis was 1960
• 97% of today's funded debt has been accumulated since August 1971 - the end of the Bretton Woods era by Nixon, and the terminal delinking of all fiat currencies from any and all hard assets, ushered in the era of modern-day hyper-debt insolvency
• Obama projects 2.5% Fed Funds rate in budget calculations through 2020. Average Fed Funds rate since 1980: 5.7%; Since 2008: 0.00%, If average 5.7% rate was used, projected US deficit would increase by another $4.9 trillion by 2020 
  
• Obama projects 4.2% growth rate over next 3 years. If a normal growth rate of 2.5% is used, deficits would increase by another $4 trillion by 2020
• The US government borrows 40-50 cents for every dollar it spends. A balanced budget would mean cutting government spending in half.
• Implementing a balanced budget would not reduce current debt outstanding. It would merely stop it from growing.
• Over the past three fiscal years US debt grew by over $1.5 trillion per year: this is more than three times the record annual debt increase in any previous year in US history
• Last night deficit reduction targets were cut from $4 trillion to $2 trillion over the next decade, in exchange for a $2.4 trillion debt ceiling hike, which will last the Treasury until the next presidential election. Said otherwise, the Treasury needs to fund a $2.4 trillion hold over the next 15 months. Over a decade this come to $20 trillion: ten times more than the proposed deficit reduction.

Meanwhile, Eric Fry points out that: “Bankruptcy” may look like πτ?χευση in Greek and bancarrota in Portuguese. But the Greeks and the Portuguese both understand that sovereign bankruptcy in Europe means great, big handouts from their neighbors. It means “promise a bunch of stuff, but do almost nothing until the money runs out.  After that, bankruptcy will mean what it always means: the borrowers will stiff the lenders and life will move on." The Greeks and the Portuguese will emerge from their dungeon, free from the shackles of debt and austerity, with pocketfuls of drachma and escudos.

How do we know that the story will play out this way? Well, we don’t, but it always does. And one reason we think the bankrupt nations will continue begging money until they ultimately declare bankruptcy is that the Greeks are already at it again.  “Barely a day after a multibillion-dollar bailout from the IMF,” Investors’ Business Daily reports, “Greece’s prime minister has his hand out again for yet another loan, this one from Europe. Has his mendicant state become the Oliver Twist of nations?” Yes, is the obvious answer. (Pic credit: David Dees)

Why not beg when the begging is so easy? Papandreou is asking the European Union to lend Greece another $173 billion, on top of the $156 billion bailout the EU and IMF have already approved, and partially dispensed.  “Successive rescues, guarantees and bailouts have put the grand total spent so far at $394 billion,” Investors’ Business Daily relates. But Europe seems oblivious to reality as it scrambles to find more money…

The London Telegraph points out that the second bailout sought by Greece is likely to last only until 2014 and will leave an even bigger debt after that. Someone will have to pay.  Papandreou’s call for more money after the IMF bailout is a clear signal of a flawed economic model.”  “I think this will ultimately be a case in which the doctors kill the patient,” predicts Johns Hopkins University economist, Steve Hanke.

Unfortunately for Dr. EU - we have a highly contagious patient!  It doesn't stop with Greece and Portugal and Italy is already teetering on the brink with their bond rates creeping up to that 7% line, which is generally considered unpayable for countries with Debt to GDP ratios above 2/3 - which is pretty much everyone these days...

 

You can see how Portugal can break Spain and Spain and Ireland owe Britain $232Bn in addition to the $39Bn from Portugal and Greece the UK has probably already written off but Spain and Italy owe France $731Bn, which would be added to the $180Bn they are unlikely to see again from Portugal, Ireland and Greece so that's a cool $1Tn of default against France's total GDP of $2.65Tn so that's 38% of their GDP that, POSSIBLY, may get flushed down the drain but, of course, it's far worse than that because the banks that count those loans to Sovereign nations as cash have leveraged those "assets" 10 to 1 and we all know how that movie ends once things start to collapse.  Fortunately - the US and Japan are "too big to fail" (more famous last words will never be spoken!) because the economies of the UK and France are pillars of stability compared to us!  

Jimmy Galbraith (JK's son) says: "Europe is in a dire situation. If it doesn't address the underlying causes of the Greek crisis quickly, Europe's political project will face the same fate as communism and the US Confederacy."

Europe's structure is also suspended between two stable formations: the federated nation state and the international alliance. This in-between structure is called aconfederacy, and it is something that was tried and which failed in North America on two occasions, most recently in 1865.

The South lost the US Civil War, in part, because it left too much power in state hands, and so could not in the end raise the funds or the men required to keep its armies in the field.

And following defeat, it took almost 70 years - until Roosevelt's New Deal in 1933 - before sufficient measures were taken to begin to overcome the dire poverty and economic stagnation of that region. This history too has been walled off in modern (Congressional) minds. 

This is how yields have soared on PIIG debts, while they fell simultaneously on US, German, French and British bonds. There was no sudden discovery that Greece was ill-managed or that Ireland had had an unsustainable construction boom. Those facts were known. The new event was the meltdown, the flight to safety, and the waves of predatory speculation that have followed. Therefore what happened was a solvency crisis of the banks, as always happens in debt crises.

It was true in the 1980s, when the Reagan administration, no less, felt obliged to prepare a secret plan to nationalize all the major New York banks should a single major Latin American debtor declare default. It was true in 2008-09, when preventing the imminent collapse of Bank of America, Citigroup and others trumped all other US policy concerns. It is obvious that the entire recent thrust of European policy has been to find ways to paper over the problems of Europe's banks: with phony stress tests, with new loans, with loud talk, with denunciations of profligacy in Greece or anywhere else - with anything except an honest examination of what lies at the heart of the problem.

PIIG loans that are immediately recycled to the European banks, Galbraith says, will add nothing to Greece's prospects except more debt. This will not lower interest rates, restore growth, or bring success to ongoing internal reforms. It is an intolerable situation and it will not continue for long. Along one road there lies a future of defaults, panic, dissolution of the eurozone, and hyperinflation in the exiting countries, with a collapse of the export markets for those that remain. The final consequence will be large population movements - as happened from the American South. For if Europe insists on reducing its periphery to poverty, it cannot expect those affected to sit still and accept their fate.  The same could easily be said of US States that believe they will be able to solve their problems by taxing the poor and cutting services.  

In Barron’s, Alan Abelson discusses a Reinhart & Rogoff paper: "The Aftermath of Financial Crises," which says:

Broadly speaking, financial crises are protracted affairs. More often than not, the aftermath of severe financial crises share three characteristics.

First, asset market collapses are deep and prolonged. Real housing price declines average 35 percent stretched out over six years, while equity price collapses average 55 percent over a downturn of about three and a half years.

Second, the aftermath of banking crises is associated with profound declines in output and employment. The unemployment rate rises an average of 7 percentage points over the down phase of the cycle, which lasts on average over four years. Output falls (from peak to trough) an average of over 9 percent, although the duration of the downturn, averaging roughly two years, is considerably shorter than for unemployment.

Third, the real value of government debt tends to explode, rising an average of 86 percent in the major post–World War II episodes. Interestingly, the main cause of debt explosions is not the widely cited costs of bailing out and recapitalizing the banking system. Admittedly, bailout costs are difficult to measure, and there is considerable divergence among estimates from competing studies. But even upper-bound estimates pale next to actual measured rises in public debt. In fact, the big drivers of debt increases are the inevitable collapse in tax revenues that governments suffer in the wake of deep and prolonged output contractions, as well as often ambitious countercyclical fiscal policies aimed at mitigating the downturn. 

In "Decline of the Empire," David Cohen points out:  

I've got some news for people like John Mauldin, Barry Ritholtz, Carmen Reinhart and Ken Rogoff—this time is different, but not in the sense you intend. To understand what is happening in the United States, it is necessary to go far beyond an historical survey of financial crises. You must consider the specific historical circumstances that led to the current crisis. Such a review would include but not be limited to the following observations—

• The United States has been hemorrhaging manufacturing jobs for 30 years.
• Almost all of the income gains made during that time went to the top 10% of wage-earners, with most of them going to the top 1%. Wealth inequality grew accordingly.
• Health care costs have been soaring all that time.
• College tuition costs skyrocketed at a pace far beyond the rate of inflation.
• Households took on more and more debt to replace lost income.
• We had not one, but two, substantial economic bubbles during the last 15 years. Without those bubbles, how much would the U.S. economy have grown?
• The private debt to GDP ratio grew and grew, clearly indicating that more and more debt was required to add an additional point of GDP.
• The Federal Government more and more became the tool of monied special interests.

And so forth. When people endorse Reinhart and Rogoff, we are supposed to understand that the Tough Times we're experiencing now have a well-defined beginning—the financial crisis after the fall of Lehman—and will have a well-defined end—however many years it takes to work through the credit problems. This is utter nonsense. The "historical obversations" I listed above are in fact the root causes of our current predicament.

And in each case, the historical trend has not changed, or has gotten worse. Households now have only slightly less debt than they did before the crisis, but trillions of dollars of housing wealth has disappeared. Health care costs continue to soar, as do college tuitions. Income gains still go to the wealthiest Americans. In short, nothing has changed.

That leaves those who want to believe that All Will Be Well with the same unsolvable dilemma we started out with: how do you tell a credible story that everything will turn out OK? I'm sorry, but no amount of convenient, hopeful rationalization is going to change the American disaster while the roots of the crisis remain in place. The financial meltdown was the proximate, not the ultimate, cause of America's economic woes. 

I hope the cute baby picture was helpful because this is some really depressing stuff! I almost didn't want to write this post as it has not been a happy weekend of reading for me but we do need to be realistic when assessing the economic dangers we face and, when people ask me why I think a quick rally on no volume looks like Bot-driven BS to me - it's because I have to assume that human traders can read and might be aware of at least a couple of these issues and thus, would not be buying CMG, an upscale version of Taco Bell (YUM has a p/e of 23), for a p/e of 55 - the bond traders certainly are aware of these issues and are trading accordingly!  

Graham Summers of Phoenix capital makes the case that the Fed is approaching the end game, which sums up the situation very nicely, saying: "If we step back and look at this plainly, we will see that reality does not in any way match the view that the Fed’s liquidity will solve the financial world’s problems. In fact, we see that each Fed move is having a smaller and smaller impact on the financial markets. Extend this idea out a bit further and you find that we will reach a point at which the Fed will no longer have any control over the financial markets.  I believe that we are rapidly approaching that point. Indeed, the Fed has already hit a wall in the sense that the negative impact of its policies (inflation/ prices soaring) far outweigh any positive impact (stocks rallying)."

Simon Johnson asks "Will the United States Default?"  He says that the people on Capitol Hill have three distinct views:  "The first is, hopefully yes, and this August offers a good opportunity. The second is, possibly yes, but this would be bad, so we need some form of fiscal austerity. The third is, under no circumstances, and any talk of a need for austerity is a hoax. The first view is mistaken. The second view hides a dangerous contradiction. And the third view borders on complacency. So how can we find our way to fiscal responsibility? We need tax reform." Yes, such a simple solution but you look at our "leadership" and you know it's not going to happens so, perhaps, we are truly doomed.

We'll see how all this news is digested next week and, of course, we'll see how earnings look in our first week but we are still very bearish with a few bullish covers and watching those 2.5% lines very closely as we sure won't be needing those upside hedges if we fail to hold those support levels.  

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Comments

[ebworthen]

What did your Parents tell you?

Lying and cheating gets you a ticket to Hell.

Sooner or later.

[overthehill]

While Ilene’s article stimulates a lot of diverse thinking with respect to the many problems faced by all of us today. It missed a really sickening aspect of the American mentality that underscores most of what is wrong with us as a people. In a single word it’s patriotism. Most people I know, and judging from the Internet spread of patriotic visions of all the war making expertise we deploy 24/7 in the various places we do military operations, probably a good percentage of the American population are just a bunch of flag waving fools. What’s the point of this? Americans keep sending their sons and daughters off to war generation after generation as if it’s really a noble thing to do. To this I say wake up America, can’t you see where this idiocy has taken all of us. If you really want to be patriotic, demand that the wars stop, all foreign American military bases be dismantled, and every last American be brought home where they belong.
Please don’t fall for the clap trap that the military is an answer to unemployment. It’s really the other way around. Unemployment feeds the military. It isn’t rocket science to see that connection.
Further, while we’re on the ‘what really makes me sick kick’, it’s one thing for a society such as ours to create a wealthy class, but it’s quite another for those that benefit from the process to use their good fortunes to dismantle the industrial base that produced their wealth in the first place. That’s just another manifestation of ‘Greed is Good’. At the end of the day that’s just the way human nature works and has since ancient times. That’s why society requires a proper government. One that’s completely missing from the American scene as we all ponder the vagaries of Ilene’s attempt to put today’s mess in some sort of intelligent perspective.

[ebworthen]

Well said.

Blind patriotism is patriotic blindness.

A blind stumbling warrior kills kinsman and enemy alike.

[Bananamerican]

+

[blindman]

etch-a-sketch monetary policy is unstable by
design

[Buck Johnson]

When this game implodes, it will take out the western banking system pure and simple.

[TruthHunter]

Don't tax the rich, I want to be one someday!!

How do you join the predator class without getting eaten first?

[delacroix]

saddam hussein, murdered his mentor, to get in.

[FlyPaper]

Can the author provide the data source for the table of salaries?

TAXES: if everyone who paid ANY tax last year (income, ss, employer contributions, medicare, etc), paid 10% more taxes than their total tax from 2010, it'd raise about $230b.  Add another 10% to 'der riche' (total 20% more) it would raise about $60b more - so a total of somewhere around $300b per year.  These would be considered massive tax hikes by virtually any standard.

Now compare the $300b of new revenue to this year's whopper $1,650 billion deficit.  It would take a DECADE of this level of higher taxation just to pay off THIS Year's deficit.  And when the marginal tax rates go back to their historical norms, that majority of those tax increases will be required to pay the interest on the debt.

So my view is Santelli IS CORRECT.  Even if you jacked up the hell out of income tax rates on the rich, the spending is so gigantically out of control the revenue received is a pittance.  

Remember that Obama wants to tax the middle-class and small business too (per Geithner's recent comments).  So this isn't just about the 'rich' - its hitting the very people who will provide the jobs needed to dig us out of this disaster.

But a bigger question is: why would you want to give this entirely irresponsible government more money at this stage?  Like giving more heroin to an addict so he doesn't have to go to rehab.

Put the spending cuts into place, then we discuss tax increases (hate to say it but it will take both and you can kiss your standard of living a sweet g'bye).

And let's not forget to thank our banker friends for putting the American taxpayer on the hook for an estimated $5 trillion due to their fraud.  Just think how far that $5T would go to keeping social benefits and a safety net for the average American~

[Everybodys All ...]

CNBC's Rick Santelli, who is the proud owner of a penis ... maybe the president can borrow it along with the set of balls and do what is right. Can we get anything close to what he promised? Unlikely. Instead we get the same old tired socialist agenda that dooms all.

[nmewn]

"CNBC's Rick Santelli, who is the proud owner of a penis, says the problem is Government Spending, not the fact that there are single people who make as much money as 35,000 middle-class families - >>>as if the money made by one person isn't taken from others.<<<"

Ahem...WTF!!!...are you insane?!?

If I make a better widget and 35,000 families want it because its better than any other widget on the market and they pay me a $100 for it, you're saying I took it from them by force or something?

[moneymutt]

You are white, right?

you've ruined it for all the other white guys, I can't give you or any other white guys comments here any consideration because of the arse-holey way you behaved firing that Morrocon woman. You ruined it for your whole race. All the white guy comments are stupid and should be junked because you are stupid. All you do is beatch about people of color, you have ruined my opinion of white people, they all must be racist because you are racist.

[moneymutt]

oops I am a white dog, maybe some white things are redeemable...oh but you behaved badly so I should never respect or treat fairly any other white person ever, they must all be exactly like you, white dogs are different of course

[Charles Wilson]

Ilene, please read this carefully.

You need help. Seriously.

Phil, of "Phil's Stock World": You need help. Seriously.

Singing the "Internationale" isn't going to help. It didn't help the millions who died last century under "War Communism" and it's not going to help now.

"Roosevelt"?!?? Honestly. Roosevelt in 1933?

YOU HAVE SERIOUS PROBLEMS!!!

GET HELP.  NOW!!

CW

[Joebloinvestor]

sorry for the DP

[Joebloinvestor]

That list should be used for job career day.

[Vorpal1]

The "rich" require stability to preserve their wealth. Their estates should pay for such stabilty. Penalizing income while preserving estates proves that the gov't is owned by the rich. Even the opiate of voting will not change that.

[CustomersMan]

      The War On Terror Is A COMPLETE AND UTTER FARCE OF Monumental  Proportions

      See this breakdown:

***************************

by Prof. James Petras

      The US government (White House and Congress) spends $10 billion dollars a month, or $120 billion a year, to fight an estimated “50 -75 ‘Al Qaeda types’ in Afghanistan”, according to the CIA and quoted in the Financial Times of London (6/25 -26/11, p. 5). 

      During the past 30 months of the Obama presidency, Washington has spent $300 billion dollars in Afghanistan, which adds up to $4 billion dollars for each alleged ‘Al Queda type’. 

      If we multiply this by the two dozen or so sites and countries where the White House claims ‘Al Qaeda’ terrorists have been spotted, we begin to understand why the US budget deficit has grown astronomically to over $1.6 trillion for the current fiscal year.

During Obama’s Presidency, Social Security’s cost-of-living adjustment has been frozen, resulting in a net decrease of over 8 percent, which is exactly the amount spent chasing just 5 dozen ‘Al Qaeda terrorists’ in the mountains bordering Pakistan.

**************************

But Not 5 Fucking Cents for You, in fact they want YOU, who question it,  dead.

[Vashta Nerada]

For the record, the combined cost of war in Afghanistan and Iraq from 2001 through yesterday was less than the one stimulus bill pushed through in 2009. 

[delacroix]

BULLSHIT

[karzai_luver]

Detail your figures please, I would be interested in your proof.

[Upswaller]

CNBC's Rick Santelli, who is the proud owner of a penis, says the problem is Government Spending, not the fact that there are single people who make as much money as 35,000 middle-class families - as if the money made by one person isn't taken from others.

So if I, a single person, make as much as a small family, I should have some confiscated?

That's idiocy, sorry.  Lost me right there.

[HungrySeagull]

Some people actually wake up and thrive from being very alive when things get really tough.

[dalkrin]

Let's hope that applies to plenty of people here.  I know for my part I am anticipating the upcoming party with a twinkle in my eye and glee in my trigger finger.

The Lord, or nature as you see it, does not keep the status quo repeating ad infinitum.

In such eras as we may witness, leaps are made into progress of an evolutionary, revolutionary significance.

[Bastiat]

"Another tip if you want to be very, very rich is make sure you don't forget your penis"

Yeah? Lotta good it did DSK, Swarzenegger, and Clinton.  Seems the penis is an potent pathway in the redistribution of wealth.

[karzai_luver]

and yet we don't see any of them begging in the streets do we.

[SilverFocker]

If the dollar becomes worthless, does it really matter how many you have?

[the grateful un...]

according to one hedge fund manager, if China cracks, they will take Australia and Canada with them. In case you were thinking of shifting to the low risk end of the chart

[Janice]

...when China cracks?

[the grateful un...]

http://www.businessinsider.com/bill-smead-china-crash-2011-7

[the grateful un...]

http://www.businessinsider.com/bill-smead-china-crash-2011-7

[the grateful un...]

http://www.businessinsider.com/bill-smead-china-crash-2011-7

[rsnoble]

I guess it's time for 3 scoops of Jack3d.  That shit will make your hair grow, literally.

[rsnoble]

Thanks to the author of this article, I was planning on lifting weights shortly but now I feel like a huge sake of soggy shit flowing over the sides of my chair and barely have enough strength to type this.

[jeffgroove102]

I like the list of soon to be "confetti" millionaires

[steve from virginia]

More relatively useless analysis that leaves out energy. What's the point?

The world's economies run on oil, coal, gas and nuclear. The last three are dependent on the first. Oil extraction has been unable to keep up w/ (credit amplified) demand since 1999. Actual gross petro output hasn't increases since 2005. Meanwhile, consumption capacity has increased 1.5% per year: thanks, China and India.

The world needs a 10% increase in oil extraction now, with a 2% annual increase after. We need those four Saudi Arabias the oil wags talk about and we need them now.

Instead we get four more Chinas, in Egypt, Tunisia, the rest of Africa, the far East, Saudi Arabia itself.

The debts the world has incurred -- to buy and build more and more carz and airplanez -- is not going to be repaid. The carz and jetz cannot earn enough to allow debt service much less retirement. This is the crisis we are all immersed in, children!

Would help if analysts would get on the energy page, the other will somehow take care of themselves. We need to get on the energy page or we are all going to find ourselves short of things to eat. A hell of a note: our food distribution is entirely dependent on petroleum fuel, every human on planet earth lives 'harvest to harvest'.

As bad as things are in the glittery $$ world of finance, things can easily become a hell of a lot worse. 7 billion here on the dirtball and everyone wakes up in the morning hungry ...

[r101958]

Steve- Excellent post. Far too many 'analysts' completely miss this very important aspect (energy).

[newbee]

Doom, despair and agony on me ... Deep dark depression, excessive misery ... if it wern't for bad luck I'd have no luck at all ... Doom despair and agony on me .... whooooaaaahhh!

[Vashta Nerada]

CNBC's Rick Santelli, who is the proud owner of a penis, says the problem is Government Spending, not the fact that there are single people who make as much money as 35,000 middle-class families - as if the money made by one person isn't taken from others.

I have a question for you:  are you on dope?  Because you sure sound like it.  That is the stupidest thing I have seen posted in a long time on a non-socialist website.

[Widowmaker]

This is all a product of bailouts and mark-to-fuck accounting which is pinstripe speak for lies and fraud dripping with systemic risk smothered in moral hazzard wrapped in a pepperoni pizza.

Record bonuses were the first clue.  Politicians getting rich off the revolving door of incorporated circumvention of the rule of law was the second.  TSA crotchgropes for children, and DHS nationwide wiretapping (ALL THE TIME) sure is keeping me safe.

No one sees it coming, no one.

END THE FED, END GOVERNMENT FOR PROFIT, INCORPORATED.

[goldnguns]

1. Banking is just warfare by other means.

2. Every shill has an agenda - including Phil - and somewhere is his intent to make mo' money.  Even fiat is better than no fiat.

3. Target numba 1 - the fed.  Target numba 2 - the bankers.  target numba 3 - anyone who has what you need/want/crave. 

Welcome to the Brave new World.

[Lmo Mutton]

Easy there peasants.  Take a bowl of soup and move along.  Move along now.  Back to work.

[Debt-Penitent]

...and it's not a plan.  It's not a conspiracy.  You're just looking for an easy explanation.  You're trying to derail what's good for America.  Be quite, eat your porridge and get back to work!
Oh and, pay your taxes and don't ask where they go, ...to work...now!  
Ohhh, now-now, I'm sorry.  Don't get mad, and stop crying.  We won't do it again.  Here's a shiny toy.

[bill40]

Who the hell has junked this article? All the kick the can down the alley policies have failed. We are at the end of cheap oil and at the peak of debt saturation.

I am f++ked if I'm bearing austerity whilst those at the top get way with the loot.

[Vic Vinegar]

Not to be snarky or disrepectful, but we all have got to eat our peas.

[Janice]

The trick is to grow your own peas and not eat the government issue.

[frostfan]

When people complain about what the top 10 in ten categories make compared to everyone else and implying there's currently 8 million refugees in Iraq when perhaps over the whole war, people fleed at some time to be safe, well, it's just hard to take the whole article seriously.  Are we blaming the top 100 for making what they make?  Also, 45% of people getting benefits from employers is a distorted fact since isn't labor participation in the low 60 per cents?  And 45% wouldn't include retired people.

[Sierra Hotel]

Americans will blame Obama, but the fact is that Americans are to blame for their own fate. They are a willfully ignorant, brutal an ugly people. As a culture they are like a rich kid who was beaten badly as a child. 

[Prometheus418]

Yes, yes, we love you too.

How do you folks manage to justify tarring hundreds of millions of people with the same brush?

[karzai_luver]

it seems natural as we do it for all nations and people's.

no example should need be pointed out for you.