A few days ago, to the surprise of many, the European Parliament voted through substantial curbs on banker pay, limiting bonuses to twice the annual salary (we have yet to see the list of pre-existing loopholes, which we are confident will be wide enough for Arnold's hummer to pass through). Today, in a less surprising, although perhaps more notable development, more than two-thirds of the Swiss people voted through a proposal to curb "fat cat-ism" in Switzerland, and impose strict controls on executive pay, including compensation vetos and payout bans. The development is notable, because unlike other insolvent nations, Switzerland is actually one of the most affluent sovereigns in the world, and class warfare is hardly as much an issue as it is in the US. The fact that Swiss society is as polarized as it was confirmed to be this morning, shows just how deep the rich vs, well, non-rich tensions truly lie, even in the most wealthy of societies. One can then imagine how close to snapping they are in other less well-off places, read most countries, in the world.
"Punxatawdry Ben is the annual bellweather of false profits; he prints predictably and then the ink disappears."--WilliamBanzai7
The questions of who are the 1% and what level of income demarcates the fat cats from the rest of Americans are likely to become more and more polarizing in the coming weeks. What is perhaps the most intriguing is the apparent dichotomy between the demographics (youth - who face considerably worse employment trends) and state-wealth who voted for Obama. As ConvergEx's Nick Colas notes, of all the U.S. states with an above-average incidence of their citizens earning over $200,000 (14 in total), all but one (Alaska) went for President Obama in last week’s election. At the other end of the income spectrum, only 2 states in the bottom 10 for +$200K earners (Maine and Iowa) had a majority of voters who sided with the President. The central irony of this straightforward math is that any increase in income taxes on the “Wealthy” will be disproportionately borne by the states which secured the President’s reelection. Perhaps, just an intriguing is the fact that - if you look at the GINI Index – a measure of income inequality – Republican leaning states enjoy more equality on these terms than the citizens of traditionally Democratic areas of the country.
Farce #1: “Market value” and “free markets” have become a joke.
Farce #2: Private, self-assigned, fake value is being traded for public money at 100 cents on the dollar.
Farce #3: Printed money is backed by nothing.
Farce #4: We have a “free” enterprise system dominated by monopolies that force people to buy inferior goods and services at exorbitant rates.
Farce #5: High-level financial crimes, no matter how egregious or widespread, are not being prosecuted.
Farce #6: Risk is gone. Now there is only liability borne by citizens.
Farce #7: Productivity has been supplanted by parasitism.
Trish Regan and Adam Johnson do their best to hold themselves together in this sublime rant by 'Gloom, Boom & Doom's Marc Faber on Bloomberg TV as he sees Obama's re-election as "very negative for the economy". From his view that the market should be down at least 20% - and maybe 50%, to the implied ignorance of both of the candidates, he believes fervently that the "standards of living of people in the western hemisphere will continue to decline." Faber views Obama's re-election as one of many unintended consequences of market manipulation (since Democrat attacks on the wealthy were 'enabled' by their profiteering from Bernanke's money printing) and sees the need to protect one's assets "with a gun, a machine gun... or perhaps a tank." He concludes with a stunner as he exclaims his view doubting Obama will make it through the whole four-year term because "there will be so many scandals" since "there is so much smoke, there must be some fire!"
The health of the economy is driven by after tax income. We need a big tax increase that does not reduce current income. My plan.
It would make them "feel" better....
Art Cashin goes through the history of Friday the 13th on Wall Street, and tells us it has a slight upward bias, being "up 55% to 60% of the time." Just don't tell that to Europe today, and especially Spain and Italian banks, both of which are getting monkeyhammered at this moment.
Some 68% of all Americans are overweight, and obesity has almost doubled in the last couple of decades worldwide.
The ground hog is like most other prophets; it delivers it's prediction and then disappears.--Bill Vaughn
[Punxatawdry Ben is the bellwether of false profits; he prints predictably and then the ink disappears.--WilliamBanzai7]
SOTU Post Mortem:
The best news possible: "Nothing will get done this year, or next year, or maybe even the year after that." Barack Hussein Obama
The worst news: Everything else.
Here is the text of President Barack Obama’s State of the Union Address as prepared for delivery at 9 p.m. ET. "Jobs" 33 vs. "Fat Cats" 0, Rich 3 vs Poor 1, Hope 2 vs Unicorns 0, Change 9 vs Tooth-Fairy 0, Mortgages 5 vs Apple 0, Main Street 1 vs Wall Street 3, China 4 vs Europe 1; DEBT CEILING 0
Humans are a flawed species. Our minds are easily manipulated. We don’t like pain. We prefer instant gratification. We are susceptible to mass delusion. We will often choose hope over critical thought. Those with higher IQs will regularly attempt to take advantage of those with lower IQs. Fear and greed are the two motivations used by the minority in power to control and manipulate the majority. The American people have been led astray by a small group of powerful men. We were herded through a door in the wall of perception that promised an American dream of material goods, entitlements and pleasure with no obligations or responsibility to future generations. There is only one choice that can save this country from ruin. Each individual must make a choice to either to continue supporting the manipulative, corrupt status quo or coming back through the Door in the Wall.
“The man who comes back through the Door in the Wall will never be quite the same as the man who went out. He will be wiser but less sure, happier but less self-satisfied, humbler in acknowledging his ignorance yet better equipped to understand the relationship of words to things, of systematic reasoning to the unfathomable mystery which it tries, forever vainly, to comprehend” – Aldous Huxley
While it is already known that the first Friday the 13th of 2012 will be very memorable, at least for France, a bigger, and more philosophical question is, whether Friday the 13th is in general unlucky for stocks. UBS' Art Cashin provides the veteran perspective, as well as unravel some false myths about the term Triskaidekaphobia.
"You can't help that. We're all mad here." Cheshire Cat