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Small Business Owners Understand the Economy Better Than Our Fed Chairman

Phoenix Capital Research's picture




 

 

Since the Great Crisis began in 2007 the Fed/ Feds have done the following:

 

  • Cutting interest rates from 5.25-0.25% (Sept ’07-today).
  • The Bear Stearns deal/ taking on $30 billion in junk mortgages (Mar ’08).
  • Opening various lending windows to investment banks (Mar ’08).
  • Hank Paulson spends $400 billion on Fannie/ Freddie (Sept ’08).
  • The Fed takes over insurance company AIG for $85 billion (Sept ’08).
  • The Fed doles out $25 billion for the automakers (Sept ’08)
  • The Feds kick off the $700 billion TARP program (Oct ’08)
  • The Fed buys commercial paper from non-financial firms (Oct ’08)
  • The Fed offers $540 billion to backstop money market funds (Oct ’08)
  • The Fed agrees to back up to $280 billion of Citigroup’s liabilities (Oct ’08).
  • $40 billion more to AIG (Nov ’08)
  • The Fed backstops $140 billion of Bank of America’s liabilities (Jan ’09)
  • Obama’s $787 Billion Stimulus (Jan ’09)
  • QE 1 buys $1.25 trillion in Treasuries and mortgage debt (March ’09)
  • QE lite buys $200-300 billion of Treasuries and mortgage debt (Aug ’10)
  • QE 2 buys $600 billion in Treasuries (Nov ’10)
  • Operation Twist 2 (Nov ’11)
  • QE 3 buys $40 billion in Mortgage Backed Securities every month from now on (Sept. ’12)

 

That’s one heck of a list. And the worst part is I know I’ve left something out somewhere.

 

However, despite this incredible intervention, the economy remains in the toilet. Indeed, adding to the more evidence that the alleged “recovery” is in fact a load of BS category… we have the latest survey of small business owners. Small businesses (50 employees or more) account for 75% of job creation in the US.

 

  • 67 percent say there is too much uncertainty in the market today to expand, grow or hire new workers.
  • 69 percent of small business owners and manufacturers say President Obama’s Executive Branch and regulatory policies have hurt American small businesses and manufacturers.
  • 55 percent say they would not start a business today given what they know now and in the current environment.
  • 54 percent say other countries like China and India are more supportive of their small businesses and manufacturers than the United States.

 

“Instead of smoothing the way, our government continues to erect more barriers to growth through burdensome regulations that increase costs for small businesses and all Americans,” NFIB president Dan Danner said.

 

http://washingtonexaminer.com/55-percent-of-small-business-owners-would-not-start-company-today-blame-obama/article/2509069#.UGMqSo6_u_t

 

This comes on top of the following:

 

  1. Median income today is lower than it was during at the end of 2009 (when the recession supposedly ended)
  2. The percentage of Americans on food stamps has increased from 11% to nearly 15%
  3. The average unemployment duration has increased from 30 weeks to nearly 40 weeks
  4. The civilian employment to population ratio hasn’t budged
  5. Industrial production has yet to exceed its former peak (a first in post WW-II “recoveries”)

And the Fed’s answer to this issue? Print more money!

 

Indeed, it is now clear, via QE 3, that the Fed has gone “all in” in its commitment to money printing. QE 2 put food prices to record highs… what do you think QE 3 (which is unlimited) will do to the cost of living?

 

The time to start preparing is now. The printers are running. The Great Currency Debasement has begun. Some folks will walk out of this mess winners. Most will walk out as losers.

 

At Phoenix Capital Research, we’re taking steps to insure our clients are among the winners. We have a host of FREE Special Reports devoted to helping readers prepare for the coming Debt Implosions in both the US and Europe.

We also feature a special report devoted to inflation as well as which investments will perform best during periods of high inflation (periods like the one we’re entering).

 

All of this is available 100% FREE at www.gainspainscapital.com

Best Regards,

 

Phoenix Capital Research

 

 

 

 

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Thu, 09/27/2012 - 07:37 | 2834783 paintman
paintman's picture

For those who create it, there is no cost

For those who destroy it, nothing is lost

Ever increasing effort, to earn, is required

Steadily less material, when spent, is acquired

Wed, 09/26/2012 - 23:29 | 2834463 Westcoastliberal
Westcoastliberal's picture

Any survey of small biz owners will reflect negativity toward regulations, regardless of who is in charge, and it's well-founded.  There ARE too many obstacles that are just stupid bullshit things that could be fixed in a snap if the parties wanted to do so.  They don't because the politicians service the big multinational, huge donating companies, or the local "barons" who churn up the graft & corruption quid pro quo for contracts.  We all know it goes on and for most of us it's a party we're not invited to.

The big thing right now is demand.  Running a small biz at 10% of the volume it did before TSHTF back in late 2007 is NOT fun and waiting for some kinda intelligence in DC is getting tedious.

Instead of continuing to reward the bastard banksters who royally fucked us, the gov needs to back the money truck up to we small biz guys.  Do that and you'll see the economy improve.  Einstead defined insanity as doing the same thing over & over and expected a different result, and THAT'S what the Fed is doing.

These are the words of Westcoastliberal.  Ugh.

Wed, 09/26/2012 - 22:54 | 2834401 Mentaliusanything
Mentaliusanything's picture

$5 Trillion and still no Christmas card for the 135,000,000 American taxpayers. I haven't got a caculator that can do the sums but if Ben dropped 10% of that in "green" over the American heartland he would see a full recovery and then some. But I forget myself he doesn't give a flying fuck about putting the cart/ horse right way around.

Ben... The Horse goes in front of the cart .... you fucktard!

"the definition of insanity is doing the same thing over and over again and expecting different results" - Einstein

 

Thu, 09/27/2012 - 04:52 | 2834693 Ar-Pharazôn
Ar-Pharazôn's picture

with "green" do you mean solar panels, hydroplants and eolic?

Wed, 09/26/2012 - 16:18 | 2833393 max2205
max2205's picture

Dude, we have Chareles Smith, and he can pull better stories out his ass... no need for you...BURRRRRP!!

Wed, 09/26/2012 - 22:17 | 2834354 Slightly Insane
Slightly Insane's picture

There are at least 100 folks that post comments on ZH that could run the Fed better then the ivory tower idiot, and that's not including Tyler.  WTF?  Why do they have to be such a-holes?  Of course, the a-holes would all have new jobs wearing striped suits (horizontal stripes), and they would all be geological experts "breaking big rocks into little ones".

 

But then again, to have survived the brainwashing, and the propaganda .... maybe there's at least 99 ZH readers that could do 10 times the job then the Bernacke joke.   Can you tell, I'm holding back.  I've only let 2% out of the bag, and I'm repothicating, as they'll be sending me back for "more training".  I am prohibited from writing just how P.O.'d I am.  (Even the swear words can't describe how pissed I am).

Thu, 09/27/2012 - 10:55 | 2835407 Dan Conway
Dan Conway's picture

I think you are being modest, I bet at least 1,000 readers could do a better job.  If I became the grand wizard of the fed, I would make it the "Bad Loan Bank" and then liquidate everything.  I don't think I would ever be hired. 

Thu, 09/27/2012 - 02:36 | 2834618 Bro of the Sorr...
Bro of the Sorrowful Figure's picture

when did using "folks" become mainstream? are you saying it because you hope we go back to the gold standard, when people talked like that? every time i hear romney or obama say it i cringe. i think they should say "proles" instead.

 

they can go get their own fucking folks. 

Wed, 09/26/2012 - 22:24 | 2834353 Slightly Insane
Slightly Insane's picture

Ok, go light on the electrodes,

Wed, 09/26/2012 - 22:32 | 2834348 Slightly Insane
Slightly Insane's picture

please keep it under 90 volts.  At 95 I soil my pants.

Wed, 09/26/2012 - 16:17 | 2833388 NEOSERF
NEOSERF's picture

I can see Bernanke in the Treasury building in cargo pants with MC Hammer and dancing around in money singing "You can't touch this"

Thu, 09/27/2012 - 04:58 | 2834694 Ar-Pharazôn
Ar-Pharazôn's picture

hahahhahahahahahahahh

 

dont know why but you remind me of tom cruise in tropic thunder when he dances like an idiot

Thu, 09/27/2012 - 04:59 | 2834695 Ar-Pharazôn
Ar-Pharazôn's picture

in fact tom cruise in that movie looks like a bit to our most loved friend Benny "Helicopter" Bernanke

Wed, 09/26/2012 - 15:45 | 2833217 GreatUncle
GreatUncle's picture

In the context of the list of monies being spent and then some if you applied this to the national debt then the national debt would be largely wiped out. So here it is! The national debt is the persistance of the status quo to pursue the way they think it should be and the reality is the economy through globalisation has radically changed.

So summing the above the national debt is? And owed by who?

Wed, 09/26/2012 - 15:34 | 2833142 steve from virginia
steve from virginia's picture

 

YOWZAH!

 

All or nothing from Phoenix Capital Research: from 'No More QE' to 'Full-Blown Money Printing' in a matter of weeks.

 

Economy cannot be stimulated ... however, the central bank can meet redemptions and keep the finance markets from crashing overnight. How long can they do this? It's been five years now.

 

The CBs are fine as long as the they don't offer leveraged loans or lend to the bottom of the economic food chain. They can also meet redemptions if these are not excessive. If everyone wants cash all at once the central banks are simply overwhelmed.

 

They also can meet marketplace demand for redemption as long as they can avoid becoming the entire market. The Fed offers credit, only minuscule amounts of circulating currency (which comes from the economy as a whole). The Fed idea is to support marketplace activities and asset/collateral prices until activities become 'self sustained'.

 

Of course they never are, they weren't before the crisis. The problems exist in the first place because the credit infrastructure is oversubscribed. There is zero remaining productivity to added loans, more lending is counterproductive. At the same time, the physical, nuts-and-bolts economy is starved of credit and is unraveling. Nothing the Fed can do about it. See, "not lend to the bottom of the economic food chain" above ...

 

Much more nuanced than this article lets on ...

Wed, 09/26/2012 - 21:55 | 2834316 ECE
ECE's picture

So i suppose you agree with a vague and not all encompassing point that Phoenix makes?

of course there is more to it all but the Macro is fairly accurate.   

Credit is still a central issue, nothing has been resolved.  i dont think Summers would disagree!

 

 

Wed, 09/26/2012 - 15:08 | 2833076 tradewithdave
tradewithdave's picture

Small business owners, for the most part, are bacon eaters. Ergo... They understand bacon price signals intuitively.

www.tradewithdave.com

Wed, 09/26/2012 - 14:53 | 2833030 divide_by_zero
divide_by_zero's picture

Obama’s $787 Billion Stimulus (Jan ’09)

This was more like $837B according to the hindsight estimate from CBO, and up to $862B on some of their estimates. This number also got baked into the baseline budgest, so our yearly budget deficits won't go down as long as Reid will not allow a budget to come to the Senate floor.

Wed, 09/26/2012 - 14:52 | 2833026 MrBoompi
MrBoompi's picture

As a small business owner it pisses me off to see major corporations pay little to nothing on their taxes and even their executives get away with paying half as much as I do.  We don't get to funnel our money through tax havens, or afford to pay hundreds of thousands to bribe legislators.

We get screwed coming and going, yet we are relied upon to drive the job growth.  The Fed doesn't give a flying fuck about small business and frankly neither does the government.

Thu, 09/27/2012 - 06:20 | 2834727 hootowl
hootowl's picture

STARVE THE BEAST....or be enslaved forever!

Wed, 09/26/2012 - 21:57 | 2834320 ECE
ECE's picture

the do something about the tax code.

how about a flat tax with no loopholes for guys that can afford them chase!!!!

 

Thu, 09/27/2012 - 10:47 | 2835381 Dan Conway
Dan Conway's picture

If you raised the tax rates to 110% on everyone it still wouldn't solve the problem.  So then what?  Without spending cuts and bankrupting fedzilla this is all just a fun little argument.  This country has been getting a reaming for a long while but now the victim is dead.  We are in the weekend at Bernie's zone!

Thu, 09/27/2012 - 11:36 | 2835540 MachoMan
MachoMan's picture

Regardless of whether it fixes budget deficits, the tax code should be simplified.  It creates too many inefficiencies, leading american businesses to be at a competitive disadvantage.

Wed, 09/26/2012 - 16:25 | 2833425 Cynthia11640
Cynthia11640's picture

Small business owners aren't sitting on the sidelines because of regulations or the "great unknown." The fact is, no one has any money to spend, to buy those goods or services. As a small business owner, you can't spend or reinvest your profits if no one is buying! Duh

Thu, 09/27/2012 - 11:34 | 2835534 MachoMan
MachoMan's picture

I don't think this is necessarily true.  I'll posit that many of the available avenues for small businesses have been shut off (e.g. retail) by technological advances/warehousing.  What hasn't been removed through natural competition has been entrenched by legislation.  What avenues are left for small businesses to create?  Not much.  This is part of the larger business cycle...  the pie is shrinking, which tends to tremendously favor existing businesses, especially those that are in shape (which CAN be made up for through political meandering, but not necessarily).  In short, even if people had money, I'm not sure that the clock hasn't ticked for the possibility of running a successful business....  for a significant percentage of prospective business owners.

Wed, 09/26/2012 - 15:22 | 2833118 Meesohaawnee
Meesohaawnee's picture

dead on. thats the problem most americans dont understand. They live in the past, if ever thinking their government is working for them. They dont give a fuck. You need to get rid of the "what should be done" in this country mentality

Thu, 09/27/2012 - 07:25 | 2834771 northerngirl
northerngirl's picture

That's the problem with American...Americans.

Thu, 09/27/2012 - 02:38 | 2834621 CrockettAlmanac.com
CrockettAlmanac.com's picture

The government never worked for us. It just used to have far less power to work against us.

Thu, 09/27/2012 - 11:27 | 2835516 MachoMan
MachoMan's picture

knocked it out of the park and hit an unwitting pedestrian

Wed, 09/26/2012 - 14:05 | 2832870 Overdrawn
Overdrawn's picture

Call me slow but I've just seen this:

The Fed’s US Land-Grab Hidden Within Purchase of Mortgage-Backed Securities

As of August 9th of this year, the banks are legally allowed to co-mingle customer segregated funds with their own if the financial institution is insolvent, under duress or in bankruptcy. In other words, the technocrats have made the theft that Jon Corzine committed a non-criminal offense.

The latest scheme of the banking cartels has been introduced as QE3, which is nothing more than amassive land-grab in the domestic US by the technocrats under the guise of purchasing the mortgage-backed securities through the Federal Reserve to alleviate the pressure the banks are feeling from the bait-and-switch they caused.

 

http://occupycorporatism.com/the-feds-us-land-grab-hidden-within-purchase-of-mortgage-backed-securities/

Wed, 09/26/2012 - 20:13 | 2834125 New_Meat
New_Meat's picture

Overdrawn: OK, I'll aceed to your demand--"you sir are slow".  There, whew!.

And probably your insight is correct, and it is essentially not possible for any mortgage-owner to know wtf is going on.  Of course, here I am in the Commonwealth (go figure, they do) and the Boston Globe has nothing on this that is discernable.  So the pattern is becoming clear.

Dang,

- Ned

Wed, 09/26/2012 - 22:40 | 2834383 Slightly Insane
Slightly Insane's picture

I just soiled myself. 

Wed, 09/26/2012 - 14:23 | 2832932 misnomer
misnomer's picture

That just proves that when the team can't score, they just move the goalposts. No surprise there, unfortunately.

Maybe they need to give the theft of our money a new Politically Correct title like "No banker left behind""  

Wed, 09/26/2012 - 14:36 | 2832978 Chris88
Chris88's picture

They already have a politically correct name for theft.  They call it "taxation".

Wed, 09/26/2012 - 13:25 | 2832723 Jack Sheet
Jack Sheet's picture

Malware.

Wed, 09/26/2012 - 13:13 | 2832683 brokesville
brokesville's picture

is this trolltown?

Wed, 09/26/2012 - 12:46 | 2832559 Precious
Precious's picture

You didn't print that.

Thu, 09/27/2012 - 05:04 | 2834697 Ar-Pharazôn
Ar-Pharazôn's picture

quoting Obomber

 

someone else did it for you

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