The question many of us had going into today was whether the no follow-through allowed rule would be implemented yet again by The Gold Cartel for the zillionth time in a row.
So much for the US trade renaissance. After posting a better than expected October trade deficit of ($42.1) billion, November saw the net importer that is the US revert to its old ways, with a massive deficit of some $48.7 billion - the worst number since April, far more than the $41.3 billion in expectations, which makes it the biggest miss to expectations since June 2010, driven by a $1.8 billion increase in exports to $182.6 billion, and a surge in imports which rose from $222.9 billion to $231.3 billion. Specifically "The October to November increase in imports of goods reflected increases in consumer goods ($4.6 billion); automotive vehicles, parts, and engines ($1.5 billion); industrial supplies and materials ($1.3 billion); foods, feeds, and beverages ($0.6 billion); capital goods ($0.4 billion); and other goods ($0.1 billion)." And with this stark reminder that the US has to import the bulk of its products, something which a weak USD does nothing to help, expect a bevy of lower Q4 GDP revisions, as this number may push Q4 GDP in the sub-1% category.
Every nation-state has a body of laws woven into the fabric of society. As Peruvian economist Hernando de Soto has commented on extensively, the stronger the rule of law, the stronger the economy. And by "stronger" laws, I mean laws that are impervious to tampering for personal or political gains. The connection between a sound judiciary and economic health is readily comprehensible, except maybe to a politician... businesses and individuals are far more likely to invest capital in a country with understandable laws that are impartially and universally enforced than if the opposite condition exists. That's because the lack of a consistent body of law breeds uncertainty and adds a huge element of risk for entrepreneurs. Which brings us back to the matter at hand – American justice on a slippery slope.
Update: those (few) worried if America's overactive Attorney General, best known for soon to be confiscating guns and perhaps shipping them off to Mexico, and doing nothing else in the past 4 years, will stick around for Obama's second term.
And no, before the questions pile in, she was not fired, as poetic as that would be (nor was she replaced by a 65 year old, part-time worker as is the case with the vast majority of the US labor force). She quit, saying "decided to begin a new future, and return to the people and places I love" and that as the product of "a large Mexican-American family I never imagined that I would...serve in a president’s Cabinet." From WaPo: "Labor Secretary Hilda Solis said in a letter to colleagues Wednesday she was stepping down from her post." Of course, using the BLS' own policies and "logic", this means the unemployment rate just ticked even lower. We look forward to Hilda's book due out in 6-12 months bashing, who else, Tim Geithner.
In the wake of the Sandy Hook Elementary School shooting, the usual cadre of politicians, pundits and commentators are hitting the airwaves and condemning believers of the “guns don’t kill” rationale. This exercise in demonization is being followed with pleas to strip Americans of their guns and place a ban on vaguely-defined “assault” weapons. What’s been lacking in the flurry of proposals that inevitably followed a catastrophe like Sandy Hook has been a deeper look at the kind of environment impressionable minds are coming of age in. Far too often, politically-minded observers fall back on reactionary emotion for the solution to problems without actually engaging in critical thinking as to the root of what they are trying to solve. What must be considered is why some individuals are so drawn to violence, what effect has the increased prescription rate of antidepressants had, and why casualties in war have become so dehumanized. There is an uncomfortable but common denominator in all these factors. I would hope anti-gun zealots notice it before they ramp up their War on Firearms.
If you ever wondered how just a few thousand bankers could impose their Ponzi global banking scheme upon 7 billion people, here is "The 9 Step Process Bankers Use to Force Global Slavery Upon Humanity."
The main events of this week, monetary policy meetings at the BoE and the ECB on Thursday, are not expected to bring any meaningful changes. In both cases, banks are expected to keep rates on hold and to hold off on further unconventional policy measures. While significant economic slack still exists in the Euro area, and although the inflation picture has remained relatively benign, targeted non-standard policy measures are more likely than an interest rate cut. As financial conditions are already quite easy in the core countries, where the monetary transmission mechanism remains effective, the ECB’s first objective is to reverse the segmentation of the Euro area’s financial markets to ensure the pass-through of lower rates to the countries with the most need for further stimulus.
Something is going on that reeks of the dreaded phrase, “this time, it’s different”: secret discussions in Germany.
- Just like last year: A Postholiday Letdown for Retailers (WSJ)
- Obama Fights Republicans on Debt as Investors Seek Growth (BBG)
- Housing a Sweet Spot for U.S. Economy as Recovery Expands (BBG)
- House chooses Boehner as speaker again despite dissent (Reuters)
- Backlash pushes Republicans to seek cuts (FT)
- Jobs Lost Hit 5 Million With Rigged Currencies (BBG)
- Chavez still has "severe" respiratory problem (Reuters)
- Paris promises flurry of economic reforms (FT)
- Investors Sour on Pro Stock Pickers (WSJ)
- Abe moves to ease South Korea tensions (FT)
- Wildfires Hit Australia Amid Worst Heatwave in Decade (BBG)
- Monti attacks ‘extremist’ rivals (FT)
A broken safety net is no safety net at all.
The beginning of the year has traditionally been a time of optimism when we all look forward to the exciting things that are going to happen over the next 12 months. Unfortunately, there are a whole bunch of things about 2013 that we already know are going to stink. Taxes are going to go up, good paying jobs will continue to leave the country, small businesses will continue to be destroyed, the number of Americans living in poverty will continue to soar, our infrastructure will continue to decay, global food supplies will likely continue to dwindle and the U.S. national debt will continue to explode. Our politicians continue to pursue the same policies that got us into this mess, and yet they continue to expect things to magically turn around. But that is not the way that things work in the real world. Bad decisions lead to bad outcomes. Sticking our heads in the sand and pretending that everything will be “okay” somehow is not going to help anyone.
To put this in the most basic terms: registration and restriction equals revolution. Count on it. It is not a matter of what we "want", it is a matter of what is necessary. Without a citizenry armed with weapons of military application, we lose our last deterrent to tyranny, and thus, we lose everything. When backed into a corner, a victim has two options: he can lie down and die, or, he can fight regardless of the odds. Sadly, this is where we are in America; fear, servitude, subservience, or civil war.
Leaving the highly sensitive topic of "gun-control" aside for the time being, one can't help but wonder if it isn't time that the US government, seemingly hell-bent on regulating virtually everything in its quest to prove (to itself?) that America's population can no longer be trusted with making any responsible decisions on it own (and in the process becoming even bigger), shouldn't be more focused on "fat-control" instead. Why? Because while guns may or may not kill people, the bottom line is that of the 32K or so death attributed to firearms, roughly 20K, or two thirds were suicides, meaning firearm-based homicides were 11,015 in 2010. Putting this number in perspective, every year some 935,000 Americans suffer a heart attack, and 600,000 people die from some form heart disease: 1 in every 4 deaths. Net result to society: the cost of coronary heart disease borne by everyone is $108.9 billion each year. And of all proximal factors contributing to heart disease, obesity and overweight is the main one. But of course one can't make a media spectacle out of 600,000 hospital wards where people quietly pass away, in many cases due to a lifetime of ill decisions relating primarily to food consumption. In fact, some estimate that obesity now accounts for one fifth of the total US health-care bill (the part of the budget which no amount of tax increase can offset). Which is why if the topic of gun-control has managed to promptly tear the country into two (or three, or more), just wait until fat-control (far more than the recent tepid overtures into this field such as Bloomberg's NYC sugary soda ban) rears its ugly head and sends the already polarized (and weaponized) US society into a state of agitated hyperflux.
What a year 2012 has been! The mainstream media continues to tell us what a “great job” the Obama administration and the Federal Reserve are doing of managing the economy, but meanwhile things just continue to get even worse for the poor and the middle class. Right now we are living in a bubble of debt-fueled false prosperity that allows us to continue to consume far more wealth than we produce, but when that bubble bursts we are going to experience the most painful economic “adjustment” that America has ever gone through. We need to be able to explain to our fellow Americans what is coming, why it is coming and what needs to be done. Hopefully the crazy economic numbers that we have included in this article will be shocking enough to wake some people up.
- This is signal, the rest is noise: Russia's Putin set for stand-off with EU on Syria, energy (Reuters)
- Boehner's Budget 'Plan B' Collapses (WSJ)
- Boehner has few options in "fiscal cliff" mess (Reuters)
- Maya "end of days" fever reaches climax in Mexico (Reuters)
- Monti Praised by Merkel Favored Less by Taxed Italians (BusinessWeek)
- China probes Yum Brands' KFC over safety of chicken productsa (Reuters)
- Looting in Aregentina: 400 Border Guard officials deployed to Bariloche over looting (BAH)
- Regulatory 'Whale' Hunt Advances - Comptroller Expected to Take Formal Action Regarding JPM's Trading Fiasco (WSJ) - but no punishment
- U.K. Banks Seen Sacrificing Lending to Meet BOE Demand (Bloomberg)
- US banks face rise in bad loans cover (FT)
- Daily Gun Slaughter in U.S. Obscured by Newtown Rampage (BBG)
- China Restricts Bond Sales by Risker Companies (BBG)