While what little remains of America's middle class is happy and eager to put in its 9-to-5 each-and-every day, an increasing number of Americans - those record 91.5 million who are no longer part of the labor force - are perfectly happy to benefit from the ever more generous hand outs of the welfare state. Prepare yourself before listening to this... calling on her self-admitted Obamaphone, Texas welfare recipient Lucy, 32, explains why "taxpayers are the fools"...
"...To all you workers out there preaching morality about those of us who live on welfare... can you really blame us? I get to sit around all day, visit my friends, smoke weed.. and we are still gonna get paid, on time every month..."
She intends to stay on welfare her entire life, if possible, just like her parents (and expects her kids to do the same). As we vociferously concluded previously, the tragedy of America's welfare state is that work is punished.
You can’t overstate the baleful effects for Americans of living in the tortured landscapes and townscapes we created for ourselves in the past century. This fiasco of cartoon suburbia, overgrown metroplexes, trashed small cities and abandoned small towns, and the gruesome connective tissue of roadways, commercial smarm, and free parking is the toxic medium of everyday life in this country. Its corrosive omnipresence induces a general failure of conscious awareness that it works implacably at every moment to diminish our lives. It is both the expression of our collapsed values and a self-reinforcing malady collapsing our values further. The worse it gets, the worse we become. The citizens who do recognize their own discomfort in this geography of nowhere generally articulate it as a response to “ugliness.” This is only part of the story. The effects actually run much deeper.
Summer optimism on euro area recovery has faded to grey winter skies. Looking ahead we see continue weak growth in the region with a very gradual recovery only. For the 2007 to 2018, we expect GDP per capita to be essentially flat, marking a lost decade of growth for the region. We blame much of this weak performance on a slow policy response in tackling both the sovereign and banking crisis, and the still too slow pace of structural reform. The fear is now that the euro area is on the verge of deflation.
It would appear that the Horatio Alger myth - that hard work and pluck will lift a person from dire circumstances to enviable success - is not living up to expectations for Americans. As WSJ's Lauren Weber notes, 40% of Americans think it’s fairly common for someone to start off poor, work hard and eventually rise to the top of the economic heap but a new Pew study shows that in reality, only 4% of Americans travel the rags-to-riches path. Unfortunately, they discovered considerable “stickiness” at both ends of the income spectrum and that Americans attached to the rags-to-riches myth might be disappointed to know that other countries show greater mobility among have-nots - "this is what we call the 'parental penalty,' and it's really high in the U.S. - If you’re born in the bottom here, your likelihood of sticking in the bottom is much higher."
The documentary will air Novemeber 4th at Battle of The Quants in Shanghai and from there will hopefully make its way around the world
TedBits - Newsletter
Normally, we would report the change in total consumer debt (revolving and non-revolving) in this space, but today we will pass, for the simple reason that the number is the merely the latest entrant in a long series of absolutely made up garbage. It appears that in the "quiet period" of data releases, when the BLS realized its "non-critical", pre-update 8MHz 8086-based machines are unable to boot up the random number generator spreadsheets known as "economic data", Ben Bernanke decided to quietly slip a modest revision to the monthly consumer credit data. A modest revision, which amounts to a whopping $180 billion cumulative increase in non-revolving credit beginning in January 2006.
Fingers of Instability
The Labor Force Participation Rate - in English, the percent of the population that is either in a job or looking for a job - fell yesterday to fresh 35 year lows. This is not a new trend, in fact since the end of 1999 (the dot-com bust) it has trended lower from well over 67% to the current 63.2%; which means the current unemployment rate would be almost 11% if the labor force was constant from when Obama took office. There appear to be at least four reasons (excuses) put forth for this dismal 'structural' trend but chief among them - and propagandized by most in the mainstream (given its lack of 'blame') - is the so-called 'aging of America' or demographics. There is only one problem with that 'myth'; it's entirely inconsistent with other Western economies who are experiencing exactly the same demographic shift. The collapse in the US labor force is, in fact, due to excess credit having fueled artificial growth for 3 decades; and now a government throwing free money at the population in the form of disability insurance (which has surged) and student loans (which are exponentially exploded). So who (or what) is to blame for the US' collapsing workforce? Simple, the unintended consequences of government interference.
We are propagandized to assume the existing hyper-structures of our centralized state-cartel economies will deliver us jobs, happiness, wealth, health and financial security. They will not. The following insightful essay is not just a critique of our current centralized economies but an outline of a community-based alternative economy that offers freedom instead of dependence. Though the examples are drawn from the U.K., the dynamics are the same in America and other advanced state-cartel economies.
It appears the market may need to resurrect the implode-o-meter as surging mortgage rates and plunging mortgage applications are (unsurprisingly) taking their toll on the mis-allocated surge in mortgage lenders that 'market' signals encouraged. The latest, as Boston.com reports, is 1-800-East-West Mortgage which has largely suspended operations and laid off its workforce. "As rates rose, a number of people just went to the sidelines," the CEO said. The market, he added, "went into a drought." And yet, homebuilders (again unsurprisingly) remain as 'hopeful' as they have been since 2005 that all will be well.
Meet General Keith Alexander, "a man few even in Washington would likely recognize", which is troubling because Alexander is now quite possibly the most powerful person in the world, whom nobody talks about. Which is just the way he likes it. ... And also meet Bonesaw: "Bonesaw is the ability to map, basically every device connected to the Internet and what hardware and software it is."
The Federal Reserve's extreme monetary policy has done nothing but repress 'safe' assets to the point of making 'risky' assets relatively cheap. This is of course not the case were you to isolate each risky or safe asset and consider its value standalone. Choosing stocks over bonds because "well, what is the alternative?" is akin to the red-pill/blue-pill choice from The Matrix and the reflationary 'normal' that we are supposed to believe in is what 'apparently' justifies a 1.7x rise (12%!) in multiples since QE4EVA was announced. During that same period, consensus earnings expectations have plunged (merely pushed out one more year for the renaissance) and global trade and growth has collapsed. However, while we have shown many divergences from reality in the past, it is the manic/depressive difference between inflation expectations and stock valuations (implicitly supported by reflation) that is the clearest example of the short-term triumph of hope over reality.
The Matrix was a movie released on 33-11-999, or as more commonly formatted (in the USA), 3-31-1999. In the 14 years since it's debut it has become one of the most influential cultural icons of any generation, not only here in America but throughout much of the globe. Everyone, at least those ones in Western sphere societies, somehow, can readily identify with it. I wonder why?
Events in Cyprus stem from precisely the same source as the surge in US home prices, namely monetary expansion by the Fed.