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Monday Morosity - "Hard Times Ahead" says Rajoy
Monday Morosity - "Hard Times Ahead" says Rajoy
Mariano Rajoy won the biggest majority in a Spanish election in almost 30 years, and told Spaniards to brace for hard times as the nation fights to avoid being overwhelmed by the debt crisis. Bonds continued to drop. Rajoy’s People’s Party swept the ruling Socialists from power after eight years, winning 186 of the 350 seats in Parliament, compared with 110 for the Socialists’ candidate Alfredo Perez Rubalcaba.
“Hard times lie ahead,” Rajoy, 56, told supporters outside the PP’s headquarters in Madrid, giving no new details of his plans. “We are going to govern in the most delicate situation Spain has faced in 30 years.”
Spanish borrowing costs continued rising toward euro-era records (6.6% this morning) even as the PP won a mandate to slash the budget deficit, overhaul the stagnant economy and reduce the 23 percent jobless rate. Rajoy, who hasn’t given details of his proposals, won’t take over for a month, prompting him to say on Nov 18th he hoped Spain wouldn’t need a bailout before he’s sworn in. Miguel Arias Canete, head of the PP’s electoral committee and a former minister, said today markets need to give the party time, as ministers won’t be appointed until Dec. 21 and Spanish law doesn’t allow Parliament to resume any sooner than Dec. 13.
So NO QUICK FIX IN SPAIN IS POSSIBLE - let's face that fact now so we're not endlessly surprised by it as the rumor-mongers can now have a field day attacking the lame-duck outgoing Government ahead of the transition. Meanwhile, our own do-nothing Congress looks to be heading towards certain disaster as we have what appears to be a TOTAL FAILURE of the US Deficit Reduction Committee to do anything to actually reduce our deficit.
Now I don't want to point fingers (cough, Republicans, cough, cough) ahead of our National Holiday that celebrates unity and goodwill and crap like that. Let's just say "they" couldn't agree, so now it's going to be Hard Times for America as we, in theory, will kick in $1.2Tn of automatic cuts including (gasp!) over 5% of our nation's Trillion-Dollar annual Defense budget. Oh, not until 2013, of course because our Government doesn't really have the balls to cut anything under any circumstances.
EXCEPT, of course, aid to the poor. THAT they can cut and cut and cut and cut. Payroll tax cuts - terminated. Unemployment extensions - terminated. US AAA rating - terminated...
And that's SMART because those poor people are EVERYWHERE these days and, the poorer they get, the more they need - it's ridiculous! The general Republican strategy is to see if we can make those nasty poor people so poor they stop bothering us completely. They can either leave, like all those immigrants we kicked out - or just get out of our way and leave us alone - just like it says in another Dickensian novel:
``I wish to be left alone,'' said Scrooge. "Since you ask me what I wish, gentlemen, that is my answer. I don't make merry myself at Christmas and I can't afford to make idle people merry. I help to support the establishments I have mentioned (prisons and workhouses): they cost enough: and those who are badly off must go there.''
``Many can't go there; and many would rather die.''
``If they would rather die,'' said Scrooge, "they had better do it, and decrease the surplus population."
"It's not my business,'' Scrooge returned. "It's enough for a man to understand his own business, and not to interfere with other people's. Mine occupies me constantly. Good afternoon, gentlemen!''
Ah Ebeneezer, a true Libertarian! God bless us, every (top) one (percent)! A new census report finds that one out of 3 Americans are now living in an expanded Census Bureau category of "poor or near poor" - families with incomes less than 50% over the poverty line for a family of 4 of about $24,000. I know a lot of my Republican friends will argue that an extra $12,000 for a family of 4 over the course of a year has them living high on the hog, with toasters, refrigerators and color TVs, but those of us who do have a sympathetic bone in our bodies find these numbers quite shocking.
The Colbert Report
The middle and upper classes (the wanna-be rich, who are screwed by the top 1% while fighting for their rights not to be taxed or regulated) fared EVEN WORSE than the poor this past decade. Families with incomes four times the poverty threshold or more — $97,372 for a family of four — shrank to just 17 percent of the population, compared with 36 percent under the official measure. That's 50% of our middle and upper middle class wiped out in order to funnel more money to the top 1% - SUCKERS!
While we cry a river for the losers in the tri-corner hats who think it's the Government that's screwing them, let's not forget we're talking about 100M Americans who are either IN POVERTY or in the desperate zone just above it and perhaps one small economic downturn from POVERTY. 51M Americans are already there, making less than $6,000 per family member to live on for their year (and that's better than minimum wage, which is only $14,500 for a full year's work by Dad). As noted in the NYTimes:
They drive cars, but seldom new ones. They earn paychecks, but not big ones. Many own homes. Most pay taxes. Half are married, and nearly half live in the suburbs. None are poor, but many describe themselves as barely scraping by. Down but not quite out, these Americans form a diverse group sometimes called “near poor” and sometimes simply overlooked — and a new count suggests they are far more numerous than previously understood.
Meanwhile, in order to insure no governments head back down that dangerous path towards Socialism (even the word makes Americans cringe due to media conditioning), our friends at Goldman Sachs are, according to The Independent, putting the finishing touches on their plan to take over Europe.
This is The Goldman Sachs Project. Put simply, it is to hug governments close. Every business wants to advance its interests with the regulators that can stymie them and the politicians who can give them a tax break, but this is no mere lobbying effort. Goldman is there to provide advice for governments and to provide financing, to send its people into public service and to dangle lucrative jobs in front of people coming out of government. The Project is to create such a deep exchange of people and ideas and money that it is impossible to tell the difference between the public interest and the Goldman Sachs interest.
Really, I kid you not - this is not a Robert Ludlum novel - this is what is actually happening in our World today! “While ordinary people fret about austerity and jobs, the eurozone’s corridors of power have been undergoing a remarkable transformation,” the independent points out - much like the takeover of the US Government by GS alumni (see "Government Sachs"). In fact, we were having a discussion this weekend among fund managers and nothing could have done more damage to Goldman Sach's competition than the loss of trust in smaller houses caused by the failure of MF Global under the stewardship of ex-Goldman CEO Jon Corzine. Money is flying out of the smaller IBanks and into the Gang of 12 who are deemed "too big to fail" thanks to - yep, you guessed it - Government Sachs policies and statements.
You've got to know the secret handshake to get a fair shake in America - that fact is made clear by the inclusion of Masonic Symbols on our own currency! That's what the Occupy Wall Street movement is really all about - as we push 1/3 of our citizens towards abject poverty, the fairy tale of "equal opportunity" begins to wear thin and even some of those ex-middle and upper middle class dwellers begin to wake up to the fact that half of their ex-friends (because we don't follow people who drop out of our gated neighborhoods) can no longer afford club memberships or, even worse, whatever crap the remaining Middle Class is trying to sell at their own stores.
Despite the myth, the "job creators" aren't making up the difference by parking the limo on Main Street and shopping up a storm. As I pointed out this weekend as we perused the "House Porn" section of the Wall Street Journal, even with all the excess, the rich hit a certain level of consumption and that's it. While a person in the top 1% may have 1,000 times more money than the 100 people they smacked out of the Middle Class to accumulate it - they don't buy 100 times more toilet seats or 100 times more candles and they don't go to the Dentist 200 times a year or pay 100 times the school taxes in their community.
No, the money the top 1% take from the rest of you is taken out of circulation and that increases the cost of money for you and that let's them leave it in the banks or bonds and collect interest - sucking even more money out of circulation from the people who need to borrow just to scrape by. The less you tax them, the more they accumulate and the worse the income disparity becomes. Already we have a situation in the US that is now worse than it was DURING the Great Depression - we are at the breaking point and our Congress is doing NOTHING and soon it will snap and we'll have a real disaster on our hands - be warned!
Bring it on I say. We have been bearish since last week and went into the weekend bearish after cashing out our short-term portfolios so this morning's sell-off is PERFECT for us to get a look at how the next set of levels hold up on our Big Chart. We did take the sell-off in the futures this morning as an opportunity to speculate long. As I said to Members at 6:01:
80%/Flips – Wow, I don’t know about 80% (chance of success) but I do like buying the RUT (/TF) on the 700 line and playing for a bounce or the Dow (/YM) off 11,600 or the S&P (/ES) at 1,190 or even gold (/YG) at $1,700 but VERY tight stops because, if those lines fail – we’re on that Highway To Hell I warned about on Friday.
As usual, we're happy when our futures trading pays for our breakfast and we're well past that already with a nice bounce shaping up into our open (quick profits are always taken on silly, pre-market runs). We remain skeptical, of course, until we make some real progress back at our Must Hold lines and we already planned on staying mainly on the sidelines this week but we couldn't resist a nice opportunity to jump in with some bullish bets ahead of the open - as we've seen this movie before and we're pretty sure we know what happens in the next scene (dollar dumped into US open to spark an equity/commodity rally).
Also, despite all of the problems and the deteriorating condition of the American Middle class and massive expansion of the ranks of the American poor - I'm still bullish on corporations because they could give less of a crap about the American people. As you can see from the above chart of the Koch Brothers' net worth - impoverishing our fellow Americans has never been more profitable so we may protest against the top 1% but, until they change the rules - we'll still put our money on them as well!
I had occasion this week to go back to my July 10th post, when I last warned that the economy was about to go over a cliff. I hit that pretty much on the nose timing-wise as the Dow fell from 12,750 the next day to 10,605 on August 11th - down 17% in 30 days. Since then, we climbed all the way back to 12,284 in October but again we went bearish as the markets were unable to break into the top of our range (back to July highs) and since then we've sort of drifted along between 12,200 and 11,600 - which is almost dead center of the July/August drop.
I am not bearish because I think that 11,600 is about the "right" price for the Dow, given the exact same global situation we observed back in July. I thought 12,750 was too high and, when we fell all the way to 10,605, I thought that was too low and we initiated our September's Dozen Buy List on August 27th with 13 (baker's dozen) very aggressive, bullish trade ideas that, of course, had spectacular outcomes for our Members as we mostly cashed out on October 27th - another great top call!
Now we're back to cash and we'd LOVE to see another panic sell-off to give us another good round of buying opportunities but I'm not sure we'll get it because there is really nothing going on today that wasn't already obvious to us in July - including the US being unable to fund its own deficit spending - all of this has now been long discussed and no longer has the power to shock the markets like it did in the summer.
So cashy and cautious is how we're playing the space under our Must Hold lines - especially ahead of the long Holiday Weekend. We'll take another look at things next Monday but this is a week to kick back and relax although, as noted in this video - that's hard to do if you are a New York football fan...
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I agree. The US political system is just like Italy's, the crappy and unrepresentative 'leadership' gets replaced by another crappy and unrepresentative 'leadership' all beholden to the same corporatist/banking establishment that controls all of it.
I'm still bullish on corporations because they could give less of a crap about the American people. As you can see from the above chart of the Koch Brothers' net worth - impoverishing our fellow Americans has never been more profitable
************
In the short run-this is likely true-
In the long haul-the poor will set the prices-
The market wants to find the true clearing prices-it is a friend to the poor-it always wants to bring us lower prices and it wont fail-
The poor or lower income people via market dynamics are unknowingly setting the trap that will one day slash the false underpinnings that are holding prices up-
Every commodity must at some point be consumed-or it becomes nothing and affordability cannot be altered-of course the elite could care less about us-they didn't care back in 08 when the market unleashed its fury and sent the elite suck-holing and begging to taxpayers-
No easy road getting there-but that is where we will go--
+1.
I hadn't thought of it in quite those terms, but you're quite right. The poor will eventually set the prices. This is what those pushing "austerity" and an ebbing tide for all boats can't see. Sure, go ahead; cut the wages and benefits of people whose wealth is all derived from work at employment. Fine. Consumer demand plunges, unless prices plunge. It's not rocket surgery.
Just like those apologists for the elite who claim we aren't really in a Depression because there aren't any bread lines and soup kitchens. These would be the same morons who decry Unemployment benefits as a disincentive to work. They're so dumb they don't understand that Unemployment compensation is the modern bread line/soup kitchen. Eliminate that and you've got torches and pitchforks in the streets. Which is, by the way, the reason Roosevelt introduced the New Deal; not out of some sort of utopian Marxism, but to prevent violent revolution. In that much, he succeeded. Too bad so many dumb smug self-righteous sadistic S.O.B.'s have such tainted memories, we're going to get to re-learn that lesson.
You are so right. Roosevelt saved the monopolists and banksters from themselves while they bitched and whined about giving jobs to able-bodied men.
Today, there are so many on the teat- monopolists, banksters, government employees- that the old girl has run dry.
You have to feed the cow, if you want to drink the milk.
Bring Jon Corzine to justice!
Please ask John Walsh to help by featuring Mister Bigshot on America's Most Wanted.
http://www.amw.com/contact/
Aristocracies lead to bloody revolutions.
Republicrats, Demicans, it doesn't matter.
Politics is the distraction.
Conservatives come in and talk austerity while no one is in jail or hung from lamposts.
Liberals come in and talk of equality and compassion while rewarding sloth and indolence.
Both sides turn a blind eye to justice and the sacrifices of honest responsible citizens while foisting crony capitalism, parasitic socialism, and equivocation and moral relativism.
+1
Too bad most people including the many of the clueless folks on this site will ever understand.
Our political system is captured by the oligarchy. There are no sides. That is an illusion to create the notion that the average person can have some say.
I am convinced the entire electoral system is a sham meant to funnel tithes from the upper middle class to the very wealthy. Period. Just a reflection of our ancestral feudalism.
To see "their" (not our) system as open and fair is like trying to see sun spots by looking directly at the sun. Too bad you will go blind first.
Very true, very simple, tragic and true. There is really No downside at all for them, the worst that can happen is one person is voted out but the Party will march on. Both are as full of shit as ever, both claiming that its all the other guys fault. We are the laughing stock of the world.......the country with the greatest chance to lead in all categories due to the default world currency and entrepreneurial bias, what do we really do well as a nation, what do we put more time at and do better than Anyone.........................................Watch fucking commercials on TV.
Rajoy did a modern classic: he did an Obama. He won the election by not being the other guy. He has promised one thing, in fact it´s about the only thing he has said at all. He will insure that retirees retain their purchasing power. In those exact words... Considering how the twist the CPI numbers one wonders what that statement will actually mean when it comes to implementing it...
He will "ensure" not "insure".
He certainly won't, as I have yet to see a politician sacrifice their own interests for their constituents.
They will talk austerity while raising taxes and reducing already taxed entitlements.
Meanwhile; their banking friends will make certain to line their pockets with contributions and dinners, all the while doing the same for the socialists so that when they "come to power" the citizenry will have been led astray by yet another red herring election while being screwed all over again.
"He will "ensure" not "insure"."
That same word was also used incorrectly in the article above. See:
"Meanwhile, in order to insure no governments head back down that dangerous path towards Socialism (even the word makes Americans cringe due to media conditioning), o"
Anyway, some writers guides suggest that they can be used interchangeably, but I tend to disagree along the same lines you do. BTW, reading further down suggests The Swedish Chef gets a pass on this one.
My bad. Actually I knew that but a lot of the time I get so riled up here on ZH. My second excuse is not being an anglophone from birth...
I understand the riled up part, and not being a native speaker gives you numerous hall passes. Thanks for your thoughts.
Sourcing the "Center for American Progress."
A Soros front group. This article is propaganda; nothing more.
This mess with the super-committee and everything else related to our fiscal disaster, has been 40+ years in the making and driven by all sides of the political spectrum.
Anyone trying to seriously blame only one party is revealed to be either clueless, a hack or both.
Fail.
Wow...just WOW!!!
There is so much wrong with this article, I don't have the energy to elaborate much.
Typical myopic "analysis" that plays the Hegelian two-party blame game!
Many here understand that government has NEVER had any intention of "caring for" people. Getting their vote, yes...caring for, no. And THAT IS NOT THE RESPONSIBILITY OF GOVERNMENT ANYWAY!!!
I've got a simple solution: Kick out the fascist American machine (FED, etc.), severely cut the tentacles of the federal government, and return the power of governance to the people, as close to the local level as possible. Remind America that it once used to be a place of responsibility, resourcefulness, and caring for those in one's own community.
This article makes the dangerous assumption that it is the federal government's job to provide for the security of the people. And that is the most dangerous lie of the century!
The poor and helpless will NEVER be cared for properly by the behemoth called federal programs...that is the job of the COMMUNITY, in any manner that particular community finds appropriate!
The war machine must stop, I will agree, as should the crony capitalism. But to define someone as "barely scraping by" (who has a cell phone, car, and home in the suburb) as "poor" is seriously flawed in light of the true poverty that exists elsewhere on this big globe.
this is where he lost me...
" impoverishing our fellow Americans has never been more profitable so we may protest against the top 1% but, until they change the rules - we'll still put our money on them as well!"
fuck
that
Go here http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/h... Federal outlays have more than doubled from 2001 to 2011 from 1.86 TRILLION dollars to 3.81 TRILLION dollars. In ten years. Now Repubnicants are morons for not accepting that if they got 10 to 1 cuts in outlays to tax increases would they go for it. But "cough, Republicans"? Demunists will never cut what needs to be cut, so really why bother? If the spendthrift assholes whom you apparently support would come in with even 5 to 1 ratio with real cuts the nation would back it. Wake the fuck up. Aint going to happen though until Treasuries shit the bed. Ron Paul might cut what needs to be cut.
Yea - let's not blame those Cash-crazy 'Crats for the failure to hammer out a deal.
That was silly of you to place blame to one side of the spectrum when Barack has been spending cash out of his arse and has basically nothing to show for it other than Solyndra and a bunch of other party favors issued to unions/Hollywood.
If you're dumb enough to believe the GOP was mainly at fault for this standoff, then it is a wonder why ZH bothered to give you rights to post your articles here unless you are paying them.
Wow, nothing but bile from the ZH trolls, mostly newbs too. News Flash - Most of you are poor, thus hurt by your inane support of the wrong side of what has correctly been called a class war. You can't squeeze blood from a stone. Go ahead and call me a commie, libtard, or any other cute name you come up with, but I have my gold, guns, and grub just like you do, I just recognize that the real cause of this mess was not grandma's pension or your poor neighbor's food stamps but banker greed, pure and simple.
The only thing dumber than solving a debt problem with more debt is solving a problem caused by deregulation with more deregulation.
Trolls and newbies? We need trillions less in spending and I am a troll. You've got 2 weeks on me, at least under your current alias. I live in Illinois. It is not Grandmas pension that is dragging us down. It is the Democratic Machine. I have been to parties thrown by public workers who are taking money for disability while they are working other jobs or starting their own businesses. Legislature just approved speed cameras for the city. Do you think they and that evil bastard Rahm will get kickbacks from the company that supplies the system? The state will have an additional Billion dollar hole next year just due to pension payments. They are taking money from the schools to pay for it. The size of the pension obligations dwarfs reasonability as well as the value of services provided by multiples. The crushing level of pension obligations is a direct quid pro quo for the votes that kept the kleptocrats in power all these years. And how about the union guys who substitute taught for a day, a single day, so they could augment their 401k with teachers pensions at a rate above what teachers get because their union salaries were higher. And the shit that goes down here in Illinois pales in comparison to the fraud, cronyism and absurdity that goes on at the federal level. As for the debt crisis, there is plenty of blame to go around, including bankers who were like the enablers to the drug addicts, and even cheered them on once they found a wickedly profitable solution to the problem. But one thing is certain, it cannot be put down merely to banker greed pure and simple. And while you are absolutely right that you can not solve a debt problem with more debt, you can solve a problem of sclerosis with deregulation, if done intelligently. Oxymoron I know. So not much hope there.
really well said, live in illinois too. Reading the papers its always about how hard the politicians are trying to work this or that out.....work work work. Its like the financial problems fell from the sky, nothing anyone can do about it, year after year, work work work to try and fix it. What a complete buch of pathectic bullshit. The Unions are actually the smartest ones of the bunch....they realize their membership was declining so they latch onto the political class and their guaranteed paychecks from the Giant Pretend Account that is the Govt. Auto pay meant auto-dues collect, brilliant idea and we're all paying for it.
It's all ajoke BK. On big, bad joke. We have a $15 Trillion national debt. This commission is arguing over whether in ten years we have a $23 Trillion debt or a $24.2 Trillion debt, and they're being taken not just seriously but exhalted as the last great hope for the nation.
Speaking for myself, I'll accept t no more than a $10 Trillion debt in ten years; $5 Trillion LESS than where we stand today. So I'm looking for $14.2 Trillion in combined cuts and added taxation for a genuine improvement, which is $1.4 Trillion EACH of the next ten years.
And no, it's not just banker greed. They make money off selling us the financial means to borrow above our paygrade AND by dipping into the credit stream a few cents of every dollar that flows through their hands, a stream we refuse to dam up. WE got the homes we wanted. WE got the student loans. WE got the platinum credit cards. WE decided to live beyond our means, and make our enablers on Wall Street rich in the process. Not even OWS wants to give up personal access to credit in order to starve the beast - they only want the same sweet deals and bailouts afforded to the 1%, which we simply can't afford.
"WE got the platinum credit cards. WE decided to live beyond our means,"
Maybe YOU did, but I didn't. I'm sick and tired of this bullshit. Ron Paul said we could get the $1.2T in ten years just by freezing govt. spending at 2010 levels. So that just proves they will still be giving themselves fucking raises every year until we finally go down the shitter. Red, blue, there all the fucking same. Today was just the opening salvo, this fucker is going down. Think people, gold is going way down but you know what, central banks are buying it. Take this opportunity to load up before it snaps back and good luck to you all. It's good to have such a wealth of knowledge in one place to draw upon.
Blah, blah blah. Fuck the paper pushing fucknuts and crash the system already. At least then we can find out precisely what the value of everyone's labor is. Fucking BRING IT!
First graphic source "Center for American Progress" a Soros front group tells you all you need to know.
Yeap , no need to read any further.
Thats where the retching started. Soros never gets questioned by these fools that think its all a one sided argument and Soros is the good guy. Gotta go empty the bucket.
For those of you who invest in an IRA or for long term goals, theres a better approach than buy,hold,hope. Stocks follow the economy so analyzing the economy, specifically the factors that are "leading indicators" and having exposure to equities only when the economy is headed in the right direction and avoiding equities in favor of safe haven baskets is a much more logical approach. And missing the major drawdowns is the only way to help ensure meeting your goals. If you are interested in investing in a portfolio that tactically invests in equity and safe haven baskets via ETF's automatically, please email me at:
eclark@breakaway-partners.com
and I'll add you to the weekly market commentary & portfolio update distribution list. Its free to add you and you can follow along our model and our views. We have been RISK-OFF since 6/30 so have missed all this wicked volatility. Currently invested in short duration treasury baskets as flight to safety drives interest in our debt.
Careful Phil, this here's red country...
Thanks for pointing out the obvious. I'm no big Obama fan, but these people are selfish animals. Good thing they can go to church on Sunday and clear their conscience.
Clueless column--apparently ilene has joined the spendaholic/hyperinflation party.
I knew it. It's those damned Republicans again; they won't "agree". If they'd just AGREE with the Dhimmicrats ALL THE TIME, then things would be hunky-dory and we'd finally have the one-party system enshrined in the Constitution According To Ilene.
Um....why couldn't the Democrats agree with the Repubs just this once? And who was it that stormed out of the Stupor Committee meetings?
Hint: Neither side ever had any desire or intention of "agreeing".
Yawn. Time to change Phil's diaper again.
Step off.
Come on Ilene, well I swear, (what I mean)
At this moment, Phil's just blathering ...
Yeah, well... With all due respect: Fuck Phil.
...At the end, he was.