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Workers Of The World, Unite!... But First Consider This

Tyler Durden's picture




 

The conflict between labor and capital is a long and illustrious one, and one in which ideology and politics have played a far greater role than simple economics and math.

And while labor enjoyed a brief period of growth in the the past 100 years first due to the anti-trust and anti-monopoly, and pro-union laws and regulations taking place in the early 20th century US, and subsequently due to the era of "Great Moderation"-driven "trickling down" abnormal growth in the developed world, it is precisely the unwind of this latest period of prosperity, loosely known as "The New Normal", and in which economic growth will persist at well sub-optimal (<2%) rates for the foreseeable future, that is pushing the precarious balance between labor and capital costs - in their purest economic sense, and stripped of all ethics and ideology - to a point in which labor will likely find itself at a persistent disadvantage, leading to the same social upheaval that ushered in pure Marxist ideology in the late 19th century.

Only this time there will be a peculiar twist, because while in relative terms labor costs as a percentage of all operating expenses are declining around the world, when accounting for benefits, and entitlement funding, labor costs are rising in absolute terms if at uneven rates (a particularly touchy topic in the Eurozone where lack of labor competitiveness for the periphery is probably the single thorniest issue for the European Disunion) and are now at record highs.

Which sets the stage for what may probably be the biggest push-pull tension of the 21st century for the simple worker: declining relative wages, which however are increasing in absolute terms when factoring in the self-funded components paid into an insolvent welfare system.

But the rub comes when one considers the biggest disequilibrium creator of all: central bank predicated cost of capital "planning", whereby Fed policies may be the most insidious and stealth destroyer of all of labor's hard won gains over the past century. 

First, observe the declining labor costs as a percentage of total corporate operating expenses...

Which however is cold comfort to firms which report earnings on a nominal basis, and for which the absolute increase in blended all in labor compensation is now the highest in history...

... a variable cost "discontinuity" driven by a key fixed cost: social insurance expenditures and labor-related taxes. In other words workers are increasingly forced to prefund their own "entitlements"...

... Which finally means that increasingly the simplest solution will likely be the correct one: places in which the cost of labor is higher than that of capital will increasingly shed labor until there is once again an equilibrium between labor and capital. An approximate breakdown between these two primary drivers is shown in the chart below.

Before we present some of the startling conclusions from the above, here are some thoughts on the basis of labor costs as we enter the New Normal from Goldman Sachs:

The ability to cut these depends very much on the nature of the business (labour-intensive versus capital-intensive), the scale and balance sheet strength of the company, the flexibility to move operations, domicile regulations and political pressures, and the clarity of management foresight. One option CEOs have is to become more efficient through automation, i.e., substituting labour with capital. We expect to see a lot more of this type of restructuring in the developing economies, as real wages rise and the difference in the relative cost of capital versus developed economies shrinks.

 

The balance between labour and capital reflects a tension between maintaining flexibility and achieving efficiency. Remaining labour-intensive can allow companies to react in a more agile manner to structural shifts or prolonged cyclical softness,  giving them the option to increase or decrease headcount (albeit at a price) or re-train personnel in the case of obsolescence, which is particularly important in fast-moving industries. On the other hand, automation increases production efficiency, speed and quality, often at a lower operational cost, at the expense of having a larger chunk of capital tied to fixed assets.

 

Over the last decade, cheap labour was perhaps the primary motivation for location-based restructuring. But looking forward, greater EM competition, IP risks, regulation, energy cost disparity, supply chain complexity and the need to be closer to the  end consumer should also force companies to reconsider where they are based. But we shouldn’t forget that prescribing change is not the same as achieving it, especially for companies that employ a large number of people in domestic Europe. These companies are likely to encounter greater political pressure, while the fear of losing skills also make companies reluctant to cut their headcount. Capital intensity could also be an exit barrier; e.g., its difficult for physical retailers to exit real estate quickly. And finally, there is the zero sum game argument, or at best a fleeting competitive advantage, which can be observed in the very short periods of returns leadership in many industries.

And while superficially all of the above is correct, the one increasingly dominant factor is that of pure cost of capital, from a simple ROE basis, when corporate executives make a decision whether to invest in wages and workers or efficiency improvements, i.e., capital. It is here that one needs to appreciate that cost of capital is increasingly synonymous with simple cost of borrowing as shown on the last chart above.

What needs no explanation is that in "the New Normal", the cost of borrowing is declining progressively and in more and more parts of the world is approaching zero: a standard byproduct of ZIRP, or a paradigm in which virtually all credit risk (and soon - equity risk as well as the Japan Model is adopted by all) is borne by the money printers themselves, or in the case of the US: the Federal Reserve.

And with cost of debt and thus capital virtually non-existent, the decision of where to allocated increasingly scarcer cash flows will become a very simple one, and the outcome will be one which will infuriate more and more workers around the world.

What does all of the above mean practically? Two things:

  1. The ever more insolvent "welfare state" world is seeing increasingly more of the fixed cost contribution to pre-funding entitlements fall on the shoulders of the same workers whose wages are increasingly declining on a relative basis (best seen when looking at the year over year change in average hourly earnings, which just posted the smallest nominal rise on record.

    The problem with this is that laborer intuitively realize that the "welfare state" model no longer works, and is broken: there are simply too many unfunded liabilities that current and future generations of workers have to fund concurrently for there to be anything left over in the sinking fund to prepay their own pension, retirement and welfare benefits. As a result more and more workers will demand instant gratification in the form of upfront cash now, and will no longer accept the excuse that their employers are making up the difference in declining earnings by funding future welfare costs, as extracted in turn by ever more insolvent governments.
  2. The Fed, in its attempts to rekindle the credit bubble with its ZIRP policy, which will last at least through the end of 2015 (but likely, in perpetuity, or at least until hyperinflation force Bernanke to prove if his bluff that he can end any inflationary episode in 15 minutes or less), has stumbled upon yet another unintended consequence- it is making the balance between labor and capital progressively more distressing for current workers, as the Fed is effectively funding - thanks to no cost borrowings - corporate improvements in productivity and capital replacement, which in turn make layoffs and wage cuts the default decision by most corporate treasurers and CFOs.

These two bullet points will garner increasingly more attention in the coming months as more and more people are laid off, if for no reason of the underlying economy which may or may not be getting stronger (or certainly weaker), but simply as as the cost of corporate debt, especially for Investment Grade quality corporations, plummets to zero when used to fund capital improvements, and thus increased profitability when coupled with labor "efficiency."

Because what few appreciate is that Marxism in the New Normal will not be a carbon copy of that from 150 years ago: instead the primary driver paradoxically of the next labor movement will be in response to the destructive policies (at least for workers, if not for corporate profitability and shareholders) of the central planners. That, and the fact that the entire Welfare state ponzi, now pervasive to all developed world countries, is on its last breath: a conclusion which even the simple workers of the world can appreciate.

Or not: because as the recent example of the outright Hostess liquidation demonstrated, when negotiating labor equivalency outcomes from a Game Theoretical perspective in the New Normal, labor no longer has the upper hand, especially when the opportunity cost of wiping out future (fully or partially) prepaid entitlement benefits are to be considered - a lesson which the Twinkie baking union learned the very hard way.

It also means that as more instances of labor unions vs corporations come to the fore in bankruptcy court, and as labor losses mount, it will once again be the evil corporations that are scapegoated by virtually everyone involved.

Yet the truth is far more complicated, and as the above shows, while workers of the world may, indeed, soon be uniting once more, don't forget to reserve some of that righteous indignation not only for executive corner office dwellers, but for those in charge of government and of various central banks, whose actions over the past century (now that we are just 31 days away from the 100 year anniversary of the Fed) have led to a world in which there are hundreds of trillions in unfunded, insolvent entitlements, as well as a central planner policy response aimed squarely at obliterating any residual negotiating position labor may have had.

To summarize: as fury at corporate CEOs rises, don't forget to save some where it also most certainly belongs: the Federal Government and the Chairman.

 

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Sat, 12/01/2012 - 15:30 | 3026616 CH1
CH1's picture

It's the PRODUCERS of the world that matter, not mere "workers"...

And it's time for producers to pull out of a game that's rigged to abuse them.

Sat, 12/01/2012 - 15:50 | 3026646 James_Cole
James_Cole's picture

Workers & producers = same thing.

Sat, 12/01/2012 - 15:59 | 3026655 formadesika3
formadesika3's picture

No, they're not identical.

Sat, 12/01/2012 - 16:15 | 3026685 James_Cole
James_Cole's picture

They are the same thing.

If you want to separate out different types of workers, you could say a CEO is a lot different than someone on the assembly line. Yes, but only because most CEOs (particularly in western countries) have access to the best unions on Earth, only they don't call them unions - they call them "boards of directors."

These particuar boards (read: unions) also are deeply connected to the government ensuring top severence $ regardless of how badly a CEO screws up. 

Sat, 12/01/2012 - 16:22 | 3026691 formadesika3
formadesika3's picture

If you are calling a CEO a worker, I get your point.

But look further, there are CEOs adn then there are CEOs. Some are producers, some are leeches.

Sat, 12/01/2012 - 16:27 | 3026704 Schmuck Raker
Schmuck Raker's picture

I agree with James Cole.

Leeches are neither Workers nor Producers, which are the same.

Sat, 12/01/2012 - 16:30 | 3026713 formadesika3
formadesika3's picture

Okay, well it devolves into semantics. See Knukles post below.

Sat, 12/01/2012 - 17:26 | 3026808 negative rates
negative rates's picture

Four bucks says he make's it, the hard way.

Sat, 12/01/2012 - 17:53 | 3026864 formadesika3
formadesika3's picture

Four Bennie bucks? Hmmm, it won't be pretty.

Sat, 12/01/2012 - 16:41 | 3026734 LawsofPhysics
LawsofPhysics's picture

Keep it simple people.  Think of it this way; people, who's labor is of real value, are tired of being paid with paper fucking promises

 

Stupid fucking sheep.

Sat, 12/01/2012 - 22:41 | 3027376 Schmuck Raker
Schmuck Raker's picture

Mercy, Five Down for little ol' me. I'll stand by what I said, but to clarify....

A Worker that does not Produce is a Leech, and will not remain a Worker for long.

(I don't think it's merely a semantic argument, but on THAT point I admit I may be wrong.)

Sun, 12/02/2012 - 09:19 | 3027788 midtowng
midtowng's picture

There is nothing new in this article. What is talks about is basically the same tensions that the world has witnessed since the French Revolution.

The governments have always been against the workers, just like corporations. And labor unions have always been fighting long odds.

Sat, 12/01/2012 - 16:27 | 3026687 knukles
knukles's picture

Would be good to consider definitions of producer, worker and entitlement beneficiary in form of free rider and secondly form of necessary in safety net.  Also, producer differentiated as to real goods or financial machinations/engineering. 

Whole lots of permutations and combinations of undefined terms here to cloud the discussions!

To wit:  And not meaning to open another separate discussion at all, but merely as an example, in conversation with some of my more liberal friends a few weeks ago, they'd all agreed upon the importance of "social justice".  But when push came to shove, disagreed vehemently upon the definition of social justice, and in fact, became hearty disagreeable. 
For example.  With respect to income distribution, they all agreed that the rich (say, 1%) don't pay enough.  And something liek a 90% marginal rate above some threshold made sense.
With respect to globalization, economic, political and social policies should be considered and implemented on a global basis.

So I pointed out to them that on a global basis, the approximate cutoff of the upper 1% is a annual income of $25,000 US
At which point the consideration of "social Justice" fell apart as none wanted their income taxed at some 90% marginal rate (which they'd theretofore suitable) above the $25k threshold.

Needs defined terms!

Sat, 12/01/2012 - 16:50 | 3026748 AnonymousAnarchist
AnonymousAnarchist's picture

...labor enjoyed a brief period of growth in the the past 100 years first due to the anti-trust and anti-monopoly, and pro-union laws and regulations taking place in the early 20th century US...

What you refer to as "pro-union laws and regulations" were anything but. They were a concerted effort to capture and domesticate the labor movement. In exchange for recognition as a government-approved union, unions had to give up standard pre-Wagner practices like wildcat strikes, unannounced one-day walkouts, and secondary sympathy and boycott strikes. See The Market, Not Government, Is The Worker's Friend, The Regulatory State - Behind the Myth and the folow-up to a zerohedge.com post, Well of Course They Hate Capitalism.

Sat, 12/01/2012 - 20:16 | 3027129 Cathartes Aura
Cathartes Aura's picture

BRAVO!!!

Needs defined terms!

let's get into the habit of demanding just what these ubiquitous words are being used for, and against!

all of 'em, even the fave memes - definitions, please.

Sun, 12/02/2012 - 15:47 | 3028279 OneTinSoldier66
OneTinSoldier66's picture

Yep.

 

The other day on twitter some guy, claiming to be a 'conservative'(whatever that means. i would ask for a definition, but I know there isn't one singlular definition!), was trying to claim that corporations had nothing to do with government and the issue being discussed. I asked him to please give me his definition of corporatism. Never got a response from him.

Sat, 12/01/2012 - 17:43 | 3026847 CH1
CH1's picture

Workers & producers = same thing.

HELL NO!

If you've ever spent time working in a factory or on a construction site you should know what I mean.

There are plenty of professional leeches who have all their "worker" credentials.

And yes, just so I don't insult anyone's leftist sensitivities, there are executives who are leeches too.

Sun, 12/02/2012 - 08:50 | 3027762 Ayn NY
Ayn NY's picture

On the executive side; Steve Jobs = producer - Warren Buffett = leach.

There are many invaluable employees that add much value and creativity to a company, they are not easy to find nor are they easy to replace - they deserve ownership stake and full benefits. Then there are those who want to clock in and do repetitive grunt work - they are replacable as anyone can do their job with no real effort - but they expect their employers to value them as they would the previous example. And for no reason other than showing up they want their employers to take care of them for the rest of their lives. Those are leaches.

Sun, 12/02/2012 - 10:19 | 3027855 CH1
CH1's picture

+1 Ayn.

Sat, 12/01/2012 - 21:40 | 3027270 Offthebeach
Offthebeach's picture

I like to produce rules, that need lots of forms, and lawyers to argue back and forth and they need buildings and paper and roads to go home to, or to courts.. ..

( I'm very productive. That's why DC is so well off.)

Sat, 12/01/2012 - 16:10 | 3026674 sethstorm
sethstorm's picture

It will end when these "producers" decide against willful destruction of an economy.  They are not entitled to optimal conditions that come at the cost of everyone else.

 

 

Sat, 12/01/2012 - 17:47 | 3026855 CH1
CH1's picture

It will end when the producers decide that they are not morally inferior and that being a beast of burden to the immoral and ungrateful was stupid.

Mon, 12/03/2012 - 12:36 | 3027771 Ayn NY
Ayn NY's picture

What producers are willfully destroying the economy at the expense of everyone else? That doesn't even make sense on any rational level. It's in everyone's best interest that their fellow man does well - the only exceptionS to that are Government employees and crooks.

Sat, 12/01/2012 - 16:24 | 3026693 Silver Bug
Silver Bug's picture

This is a time old battle that will continue long past our times.

 

http://ericsprott.blogspot.ca/

Sat, 12/01/2012 - 23:55 | 3027466 PeteJE
PeteJE's picture

You couldn't be more wrong.  The producers of this world are the workers and without them there is no production or growth at all.  What does it matter if you produce what no one can afford to make use of? 

Sat, 12/01/2012 - 15:28 | 3026617 Long-John-Silver
Long-John-Silver's picture

We should start a new phrase calling every company put out of business by it's labour union. IE: That business was "Twinkied".

Sat, 12/01/2012 - 16:10 | 3026675 logicalman
logicalman's picture

If you actually look at the facts, not your own prejudices, you will find that the management had more to do with it. They even think they are entitled to bonuses while going through bankruptcy!!??

So I think Twinkied has a different definition to the one you put forward.

Please engage brain before putting mouth (or keyboard in this case) in gear.

Sat, 12/01/2012 - 18:03 | 3026884 Urban Redneck
Urban Redneck's picture

Your math is coming up short.

18,000 employees with about a billion in annual labor expense would require how many executives with million dollar comp packages to have more impact on the viability of the company a going concern (and I think the CEO's package was 2.5M which would imply that the rest of "management" averaged less).

Sat, 12/01/2012 - 19:51 | 3027080 itstippy
itstippy's picture

Inept Hostess management couldn't come up with a viable product line.  They stuck to their fat salaries and their tried-and-true product line of Twinkies and other tasty chemical concoctions.  As consumer tastes changed, Hostess management was unable to innovate and move new product to the consumers.

Imagine a meeting of the top Hostess management team.  They command dozens of bakeries and distribution points, fleets of delivery vehicles, an army of bakers and delivery men, etc.  They have a widely recognized and successful name brand.  Yet the big chart shows that Twinkie sales and market share keep going down and they're losing money.  They know they can either go balls-out innovation and start selling cranberry bran muffins with yogurt filling, or milk what's left of the corporation dry and move on.  They chose the latter.  The army of bakers & delivery workers lost their jobs.

It's not much different than General Motors' bloated and inept management building shitty cars for a couple decades until people just stopped buying the product. 

 

Sat, 12/01/2012 - 20:15 | 3027126 Urban Redneck
Urban Redneck's picture

I'm not implying that management wasn't inept or overpaid, but if you can't innovate to keep with changing demands in the market place and lose both market share and volume, then you have to cut costs to remain viable, which management also failed to do (although perhaps not as badly as the gaggle of clowns the current management replaced).  Plenty of companies survive without product innovation, but some of the labor practices that management agreed to were downright STUPID and wasteful, which is a long term recipe for disaster even if you own a printing press.  

Sat, 12/01/2012 - 21:27 | 3027248 itstippy
itstippy's picture

I agree.

When I was a tyke the kids would walk to school swinging their lunches. 

The lucky kids had trendy metal lunch boxes with the latest Disney or Marvel Comics characters on them.  Inside were delicious sandwiches of Wonder Bread, Oscar Meyer Bologna, and Kraft Cheese singles.  As a side they had a bag of Fritos Corn Chips and for dessert was a Twin-Pak of Hostess Twinkies.

My brothers and I had paper lunch bags that we had to bring back home for re-use.  Inside were sandwiches of day-old wheat bread, peanut butter, and cheap jam. As a side we got an apple.  No dessert. My how I coveted those lucky kids' lunches.

Some kids didn't have a lunch.

Good Lord I'm old.

Tue, 12/18/2012 - 05:42 | 3074114 MeelionDollerBogus
MeelionDollerBogus's picture

How can you cut costs to remain viable to sell a product people don't want or can't eat? Some prefer something that's not twinkies (that's me). Quite a few will die if they eat them (diabetes). Seems to have a pronounced effect on viability no matter what costs you cut.

Hostess wasn't willing to stamp their name on another better-selling product-type, even immitating what's out there which is entirely fine in their industry. Meh.

Sat, 12/01/2012 - 16:42 | 3026735 Ignatius
Ignatius's picture

The question is:  When does a unionism become a gangsterism?

I'm for unions and against gangsters, and there is most definately a difference.  I worked as a union electrician and the net present value of my pension is about $575,000 which pays the bills with a little cushion.  I read recently that some Chicago school administrators have pensions valued in excess of $25 million... Let's not confuse the theory with gangster practices.  God help the taxpayers of Chicago.

Tue, 12/18/2012 - 06:02 | 3074128 bunnyswanson
bunnyswanson's picture

You have a narrow mind.  I have never been a member of a union.  My father was a company man with union workers and he found the workers disagreeable and not motivated to do anything but take a break.

But there is a middle ground.  You don't wipe out a system because it is flawed.  Rather, reassessment and refining is what works.  Get money out of politics, on and under the table, conflicts of interests and the greedy rich bastards would leave politics and possibly the leaders with good intentions would not have their heart ripped from their chests when they step into the arena, and most of the problems would be solved in this country.  The apple rots from the core.  

Bank Failures in Brief

2012

The list of Bank Failures in Brief is updated through December 14, 2012. Please address questions on this subject to the Customer Service Hotline (Telephone: 1-888-206-4662).

December

Community Bank of the Ozarks, Sunrise Beach, MO with approximately $42.8 million in total assets and $41.9 million in total deposits was closed. Bank of Sullivan has agreed to assume all deposits.
(PR-146-2012)

November

Hometown Community Bank, Braselton, GA with approximately $124.6 million in total assets and $108.9 million in total deposits was closed. CertusBank, N.A. has agreed to assume all deposits.
(PR-134-2012)

Citizens First National Bank, Princeton, IL with approximately $924.0 million in total assets and $869.4 million in total deposits was closed. Heartland Bank and Trust Company has agreed to assume all deposits.
(PR-128-2012)

Heritage Bank of Florida, Lutz, FL with approximately $225.5 million in total assets and $223.3 million in total deposits was closed. Centennial Bank has agreed to assume all deposits.
(PR-127-2012)

October

Nova Bank, Berwyn, PA with approximately $483.0 million in total assets and $432.2 million in total deposits was closed. The FDIC has approved the payout of the insured deposits of Nova Bank.
(PR-123-2012)

Excel Bank, Sedalia, MO with approximately $200.6 million in total assets and $187.4 million in total deposits was closed. Simmons First National Bank has agreed to assume all deposits.
(PR-120-2012)

First East Side Savings Bank, Tamarac, FL with approximately $67.2 million in total assets and $65.9 million in total deposits was closed. Stearns Bank National Association (N.A.) has agreed to assume all deposits.
(PR-119-2012)

GulfSouth Private Bank, Destin, FL with approximately $159.1 million in total assets and $151.1 million in total deposits was closed. SmartBank has agreed to assume all deposits.
(PR-118-2012)

September

First United Bank, Crete, IL with approximately $328.4 million in total assets and $316.9 million in total deposits was closed. Old Plank Trail Community Bank, National Association has agreed to assume all deposits.
(PR-113-2012)

Truman Bank, Saint Louis, MO with approximately $282.3 million in total assets and $245.7 million in total deposits was closed. Simmons First National Bank has agreed to assume all deposits excluding certain brokered deposits.
(PR-106-2012)

First Commercial Bank, Bloomington, MN with approximately $215.9 million in total assets and $206.8 million in total deposits was closed. Republic Bank & Trust Company has agreed to assume all deposits.
(PR-104-2012)

August

Waukegan Savings Bank, Waukegan, IL with approximately $88.9 million in total assets and $77.5 million in total deposits was closed. First Midwest Bank has agreed to assume all deposits.
(PR-090-2012)

July

Jasper Banking Company, Jasper, GA with approximately $216.7 million in total assets and $213.1 million in total deposits was closed. Stearns Bank National Association (N.A.) has agreed to assume all deposits excluding certain brokered deposits.
(PR-089-2012)

Second Federal Savings and Loan Association of Chicago, Chicago, IL with approximately $199.1 million in total assets and $175.9 million in total deposits was closed. Hinsdale Bank & Trust Company has agreed to assume all deposits.
(PR-086-2012)

Heartland Bank, Leawood, KS with approximately $110.0 million in total assets and $102.6 million in total deposits was closed. Metcalf Bank has agreed to assume all deposits.
(PR-085-2012)

First Cherokee State Bank, Woodstock, GA with approximately $222.7 million in total assets and $193.3 million in total deposits was closed. Community & Southern Bank has agreed to assume all deposits.
(PR-084-2012)

Georgia Trust Bank, Buford, GA with approximately $119.8 million in total assets and $117.4 million in total deposits was closed. Community & Southern Bank has agreed to assume all deposits excluding certain brokered deposits.
(PR-083-2012)

The Royal Palm Bank of Florida, Naples, FL with approximately $87.0 million in total assets and $85.1 million in total deposits was closed. First National Bank of the Gulf Coast has agreed to assume all deposits.
(PR-082-2012)

Glasgow Savings Bank, Glasgow, MO with approximately $24.8 million in total assets and $24.2 million in total deposits was closed. Regional Missouri Bank has agreed to assume all deposits.
(PR-081-2012)

Montgomery Bank & Trust, Ailey, GA with approximately $173.6 million in total assets and $164.4 million in total deposits was closed. Ameris Bank has agreed to assume all deposits excluding certain brokered deposits.
(PR-080-2012)

June

The Farmers Bank of Lynchburg, Lynchburg, TN with approximately $163.9 million in total assets and $156.4 million in total deposits was closed. Clayton Bank and Trust has agreed to assume all deposits.
(PR-071-2012)

Security Exchange Bank, Marietta, GA with approximately $151.0 million in total assets and $147.9 million in total deposits was closed. Fidelity Bank has agreed to assume all deposits.
(PR-070-2012)

Putnam State Bank, Palatka, FL with approximately $169.5 million in total assets and $160.0 million in total deposits was closed. Harbor Community Bank has agreed to assume all deposits.
(PR-069-2012)

Waccamaw Bank, Whiteville, NC with approximately $533.1 million in total assets and $472.7million in total deposits was closed. First Community Bank has agreed to assume all deposits excluding certain brokered deposits.
(PR-067-2012)

Farmers' and Traders' State Bank, Shabbona, IL with approximately $43.1 million in total assets and $42.3 million in total deposits was closed. First State Bank has agreed to assume all deposits.
(PR-066-2012)

Carolina Federal Savings Bank, Charleston, SC with approximately $54.4 million in total assets and $53.1 million in total deposits was closed. Bank of North Carolina has agreed to assume all deposits.
(PR-065-2012)

First Capital Bank, Kingfisher, OK with approximately $46.1 million in total assets and $44.8 million in total deposits was closed. F & M Bank has agreed to assume all deposits.
(PR-064-2012)

May

Alabama Trust Bank, National Association (N.A.), Sylacauga, AL with approximately $51.6 million in total assets and $45.1 million in total deposits was closed. Southern States Bank has agreed to assume all deposits excluding certain brokered deposits.
(PR-057-2012)

Security Bank, National Association (N.A.), North Lauderdale, FL with approximately $101.0 million in total assets and $99.1 million in total deposits was closed. Banesco USA has agreed to assume all deposits.
(PR-052-2012)

April

Palm Desert National Bank, Palm Desert, CA with approximately $125.8 million in total assets and $122.8 million in total deposits was closed. Pacific Premier Bank has agreed to assume all deposits excluding certain brokered deposits.
(PR-050-2012)

Plantation Federal Bank, Pawleys Island, SC with approximately $486.4 million in total assets and $440.5 million in total deposits was closed. First Federal Bank has agreed to assume all deposits.
(PR-049-2012)

Inter Savings Bank, fsb D/B/A InterBank, fsb, Maple Grove, MN with approximately $481.6 million in total assets and $473.0 million in total deposits was closed. Great Southern Bank has agreed to assume all deposits.
(PR-048-2012)

HarVest Bank of Maryland, Gaithersburg, MD with approximately $164.3 million in total assets and $145.5 million in total deposits was closed. Sonabank has agreed to assume all deposits.
(PR-047-2012)

Bank of the Eastern Shore, Cambridge, MD with approximately $166.7 million in total assets and $154.5 million in total deposits was closed. To protect the insured depositors, the FDIC created the Deposit Insurance National Bank (DINB) of Eastern Shore, Cambridge, MD which will remain open until May 25, 2012.
(PR-046-2012)

Fort Lee Federal Savings Bank, FSB, Fort Lee, NJ with approximately $51.9 million in total assets and $50.7 million in total deposits was closed. Alma Bank has agreed to assume all deposits.
(PR-043-2012)

March

Fidelity Bank, Dearborn, MI with approximately $818.2 million in total assets and $747.6 million in total deposits was closed. The Huntington National Bank has agreed to assume all deposits.
(PR-038-2012)

Covenant Bank & Trust, Rock Spring, GA with approximately $95.7 million in total assets and $90.6 million in total deposits was closed. Stearns Bank, N.A. has agreed to assume all deposits.
(PR-032-2012)

New City Bank, Chicago, IL with approximately $71.2 million in total assets and $72.4 million in total deposits was closed. The FDIC has approved the payout of the insured deposits of New City Bank.
(PR-029-2012)

Global Commerce Bank, Doraville, GA with approximately $143.7 million in total assets and $116.8 million in total deposits was closed. Metro City Bank has agreed to assume all deposits.
(PR-025-2012)

February

Home Savings of America, Little Falls, MN with approximately $434.1 million in total assets and $432.2 million in total deposits was closed. The FDIC has approved the payout of the insured deposits of Home Savings of America.
(PR-022-2012)

Central Bank of Georgia, Ellaville, GA with approximately $278.9 million in total assets and $266.6 million in total deposits was closed. Ameris Bank has agreed to assume all deposits.
(PR-021-2012)

SCB Bank, Shelbyville, IN with approximately $182.6 million in total assets and $171.6 million in total deposits was closed. First Merchants Bank, National Association has agreed to assume all deposits excluding certain brokered deposits.
(PR-018-2012)

Charter National Bank and Trust, Hoffman Estates, IL with approximately $93.9 million in total assets and $89.5 million in total deposits was closed. Barrington Bank & Trust Company, National Association has agreed to assume all deposits.
(PR-017-2012)

January

BankEast, Knoxville, TN with approximately $272.6 million in total assets and $268.8 million in total deposits was closed. U.S. Bank National Association (N.A.) has agreed to assume all deposits.
(PR-013-2012)

Patriot Bank Minnesota, Forest Lake, MN with approximately $111.3 million in total assets and $108.3 million in total deposits was closed. First Resource Bank has agreed to assume all deposits.
(PR-012-2012)

Tennessee Commerce Bank, Franklin, TN with approximately $1.185 billion in total assets and $1.156 billion in total deposits was closed. Republic Bank & Trust Company has agreed to assume all deposits excluding certain brokered deposits.
(PR-011-2012)

First Guaranty Bank & Trust Company of Jacksonville, Jacksonville, FL with approximately $377.9 million in total assets and $349.5 million in total deposits was closed. CenterState Bank of Florida, National Association (N.A.) has agreed to assume all deposits excluding certain brokered deposits.
(PR-010-2012)

American Eagle Savings Bank, Boothwyn, PA with approximately $19.6 million in total assets and $17.7 million in total deposits was closed. Capital Bank, National Association (N.A.) has agreed to assume all deposits excluding certain brokered deposits.
(PR-007-2012)

The First State Bank, Stockbridge, GA with approximately $536.9 million in total assets and $527.5 million in total deposits was closed. Hamilton State Bank has agreed to assume all deposits excluding certain brokered deposits.
(PR-006-2012)

Central Florida State Bank, Belleview, FL with approximately $79.1 million in total assets and $77.7 million in total deposits was closed. CenterState Bank of Florida, National Association (N.A.) has agreed to assume all deposits excluding certain brokered deposits.
(PR-005-2012)

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

Sat, 12/01/2012 - 15:36 | 3026619 Marco
Marco's picture

The per capita value of labour compared is dropping, it will continue dropping and if the free market has it's way it will drop below subsistence soon enough ... that's the reality of automation.

For the longest time consumption increases could outpace productivity increases, but no more ... Luddism is like Malthusianism, correct in the end (at least in the absence of welfare or government planning of work).

Sat, 12/01/2012 - 16:06 | 3026660 tickhound
tickhound's picture

"Luddism is like Malthusianism, correct in the end (at least in the absence of welfare or government planning of work)."

...Yes... or in the absence of complete systemic change.

Union or not, Hostess didn't need 18,000 "BAKERS" with salaries, benefits/pensions to maintain machines and flick switches to inject cream-fluff in wrapped air-poof.

The article assumes a dependence on labor and fails to comprehend the state of technology today.

The system no longer "creates" jobs... It now "invents" them to perpetuate the needed human labor to satisfy the consumption end of system.  And it will last as long as the illusion of solvency exists to pay for the inevitably growing welfare state.

Sat, 12/01/2012 - 16:09 | 3026671 James_Cole
James_Cole's picture

"or in the absence of complete systemic change."

The way things are going massive change is inevitable. As technology becomes increasingly democratized individuals are more independent and less reliant on systems of manufacture (corporations etc.) or access to capital.

This is just the beginning though, if democratized manufacture / distributive energy really takes off it will quickly become a different world. Such a phenomenon terrifies capitalists and those afraid of change but it's a natural progression. 

Sun, 12/02/2012 - 16:02 | 3028307 OneTinSoldier66
OneTinSoldier66's picture

I'm a capitalist, an Anarchocapitalist. What I'm afraid of is the loss of the ability to freely and voluntarily exchange with one another. Something that there's been more and more of a loss of during my lifetime.

Tue, 12/18/2012 - 05:34 | 3074101 MeelionDollerBogus
MeelionDollerBogus's picture

such activity is the work OF capitalists.

Join the bloom box to the glut of natural gas & we've got it made.

Sat, 12/01/2012 - 16:07 | 3026669 DosZap
DosZap's picture

The per capita value of labour compared is dropping, it will continue dropping and if the free market has it's way it will drop below subsistence soon enough ... that's the reality of automation.

 

 

Don't forget Globalization.

Sat, 12/01/2012 - 17:38 | 3026833 BorisTheBlade
BorisTheBlade's picture

Yes, the labour market is global. One is competing against hundreds of millions of people in Asia even if one thinks otherwise and ... lot of jobs in the developed world are jus a sort of entitlement. Automation? Please, the most efficient way to cut costs is still to produce something in Asia and ship it across the world, that until the whole thing called the world economy breaks and goes into the gutter and protectionism rears its pretty head again.

Sat, 12/01/2012 - 18:01 | 3026880 Raymond K Hessel
Raymond K Hessel's picture

The Free Market didn't drop the value of labor.  Fascism did.

Tue, 12/18/2012 - 05:31 | 3074099 MeelionDollerBogus
MeelionDollerBogus's picture

In a free market workers choose different work or be self-sustaining, not just work for employers like slaves. In a free market employers offer wages generous enough to keep the talent they need. In a real market, free or otherwise, labor & other generic stand-ins are not the only part of the market. Someone will have specialized skills, someone will have specialized materials & processes, and those will have higher value.

Automation is merely leverage. Acting as if all jobs will be lost/reduced from automation is like saying all stocks will outperform gold, food & water and life itself just because they can be leveraged.

Now how foolish does that sound.

Sat, 12/01/2012 - 15:31 | 3026620 Uncle Remus
Uncle Remus's picture

Wall Street is just another tribal casino. Everything else is static.

Unions and corporations deserve each other, along with the government they suck off.

Sat, 12/01/2012 - 15:31 | 3026621 Atomizer
Atomizer's picture

Just one more data point for all ZH'ers to analyze.

 

3rd annual report of the Bank for International Settlements - 1933

Your PDF copy before it gets flushed down the Internet memory hole.

www.bis.org/publ/arpdf/archive/ar1933_en.pdf

 

Q: What is apparently distinctive from 1932 compared to 2012? Quiz Bitchez!

Going offline, enjoy the lovely weekend!

Sat, 12/01/2012 - 17:34 | 3026823 earleflorida
earleflorida's picture

great link!

bod: norman, schroeder, and schacht... et.el

Wow!!!

Sat, 12/01/2012 - 15:40 | 3026628 resurger
resurger's picture

When you give, you draw a smile and you feel good....

 

 

Sat, 12/01/2012 - 15:41 | 3026630 Seasmoke
Seasmoke's picture

Shoplifters of the world unite !

Sat, 12/01/2012 - 15:41 | 3026631 bank guy in Brussels
bank guy in Brussels's picture

GDP of the whole world is about 70 trillion (USD)

For 7 billion people that is about 10 thousand per human being on the planet

Can actually live in modest simple comfort on that amount, in much of the world, in non-bubble locales ... almost enough to live in Brussels even

There is enough to go around ... We need to re-structure what we do

---

'Workers of the World, Unite!'

Karl Marx finished writing the Communist Manifesto in 1848, in Brussels, Belgium, living in a house not far from me ...

Photo is in a collection of a friend I have come to know, political refugee from the USA here in Belgium ... All his websites blocked from Google after he published articles on US court corruption, including one that kept a corrupt US federal judge from being promoted to the US Supreme Court

Karl Marx's house in Brussels, where he lived 1846-48:

http://www.flickr.com/photos/22325431@N05/2152443825/in/set-721576035973...

Live Photo: Google Inc. Caught Censoring EU Search Results on US court corruption (for USA - CIA)
Google Internet Censorship - Censure d'Internet par Google - Internet censuur door Google

http://www.flickr.com/photos/22325431@N05/6100668211/in/photostream

Sat, 12/01/2012 - 16:31 | 3026715 Bear
Bear's picture

"There is enough to go around ... We need to re-structure what we do" ... unfortunately the ones who do the restructuring are also corrupt, greedy, and self-motivated; hence, your view of a global utopia will be by necessity corrupt, fascist, and impossible.

Without the rule of law, private ownership, checks and balances to power, and non-redistributive individual liberty either fascism or anarchy will result.

With 10,000 for everyone in the world ... everyone lives happily ever after, until Monday morning when no one wants to go to work to pay for his neighbor's 10,000. People work because they have to, not because they want to. In the US we now bestow $450 / week on non-working people for 99 weeks ... and very few actually go out and get employment until they near the 99th week. Why work when the State provides all food, housing, transportation, TVs and iPhones and if you do find work, it is at best only marginally greater than $450 /week.

The only way everyone works in a 10,000 World is at the point of a gun ... and that has been the history of man for a long, long time. Let's not go back there, please.  

Sat, 12/01/2012 - 20:32 | 3027153 Cathartes Aura
Cathartes Aura's picture

is unemployment not based on the income that was taxed to pay the "benefit"?  so that "$450 weekly" is not ubiquitous, but only based on the income stream previous?

"unemployment" is the individual receiving a percentage of what was taken from their wages in the event of becoming unemployed - so it varies with the wage earned, as do the means tested extras - I'm pretty sure people aren't getting a TV or iPhone from the .gov, though I'm prepared to admit I'm wrong if someone has proof ^^.

this is such a divide and rule game - believing that people are living large on gov't bennies.  maybe some are, after a fashion, but I'm guessing they pad their gains with off the books deals, etc.

rather like most folks in amrka. . . hanging out under the tables.

Sat, 12/01/2012 - 21:49 | 3027277 Bear
Bear's picture

In California the employer pays into a fund and the weekly 'payment' to the employee comes out of that fund (with participation) with the employer for 13 + 13 weeks and then the whole thing is picked up by the Federal Government ... it is not 'earned' income to be used on a rainy day, it is welfare plain and simple.

True about under table income ... my point is that as long as the Goberment keeps paying $450 / week there is little incentive to get legit employment ... and we (US taxpayers) end up paying for the unemployed or at least adding to the debt to picked up by our children and grandchildren.

Sun, 12/02/2012 - 17:10 | 3028407 Cathartes Aura
Cathartes Aura's picture

so the gov requires the employer to make payments into a fund, and also requires the employee to make payments into a fund.

and the gov hangs onto that money (yeah, pixels, bookkeeping) until a claim is made on it - by an ex-employee.

is this how it works?  (genuine question, as I remember it being this way, but who knows any more. . .)

I can understand how an employer might resent having to pay into a fund that only the GOVT or the employee has access to - but surely it's better to have the employee get the allocation earned, and contributed to, than the GOVT who just has hands in both your pockets?

and if "later" the FedGov creates more pixels to keep the problems under wraps until the end of a "fiscal" period, can we just acknowledge it's no One's "hard earned money" just imaginary balance sheet entries from corporate gov to corporate food supply to land-lords, to wherever. . .

resentment where resentment's due.

Sat, 12/01/2012 - 16:46 | 3026742 LawsofPhysics
LawsofPhysics's picture

"there is enough to go around"

----------------------------------

Really?  Is the energy available to that increasing world population also increasing?  You need energy to actually do anything.  Last time I looked, the global energy that had to be invested in order to deliver new energy was going up, leaving less net energy available.  Better check your math again.  No way the energy readily available to sheep is keeping up with the sheep's population. So sorry round eye.

Sat, 12/01/2012 - 15:45 | 3026636 holdbuysell
holdbuysell's picture

I'm having a hard time reconciling the foreseen trend described here that companies will use the cheap cost of capital to make capital improvements with other articles here that demonstrated how that capital (for public companies) is actually being used to prop up stock prices via stock buybacks and not investing in CapEx, resulting in an increasingly aged asset base.

Sat, 12/01/2012 - 15:52 | 3026645 formadesika3
formadesika3's picture

Good point. My guess is that the latter is a shorter-term trend than the former.

edit: but how long can low cost of capital in develped countries last vs developing countries?

 

Sat, 12/01/2012 - 16:13 | 3026680 Tyler Durden
Tyler Durden's picture

That is a great point and indeed, one that so far shows companies are more focused on short-term shareholder gratification. However at some point the ROA will be so low that extracting (or rather recycling debt into equity) any more value from corporations to shareholders will become self-destructive. At that point companies will have no choice but to replenish their asset base (with a far lower consolidated baseline revenue). It is then that the issues discussed in this post will become a major talking point.

Sat, 12/01/2012 - 17:00 | 3026769 holdbuysell
holdbuysell's picture

Makes sense. Thanks for clarifying.

Sat, 12/01/2012 - 15:45 | 3026638 Yen Cross
Yen Cross's picture

 New World Order, one size fits all, United Nations, IMF, ( indentured slaves)...  Unite for the last hurahhh...

Sat, 12/01/2012 - 16:03 | 3026663 Bob
Bob's picture

Here's your NWO . . . they'll keep the nominal sovereigns around for plausible deniability and management of the slaves (who must, of course, pay the costs of their own "management"):

http://www.nationofchange.org/why-so-secretive-trans-pacific-partnership-global-corporate-coup-1353687546

Sat, 12/01/2012 - 16:14 | 3026683 Yen Cross
Yen Cross's picture

Thanks for the link Bob.

Sat, 12/01/2012 - 16:24 | 3026694 knukles
knukles's picture

Talking about slaves, I wonder how everybody's feeling about how those Arab Springie Thingies are workin' out these days?

The new Egyptian constitution allows Women No Rights and Permits Slavery

http://hosted.ap.org/dynamic/stories/M/ML_EGYPT_CONSTITUTION_GLANCE?SITE...

Sat, 12/01/2012 - 16:43 | 3026737 Yen Cross
Yen Cross's picture

That was a good link knuckles/ Did you catch this one?  BBC News - Uproar over Saudi women's 'SMS tracking'

Sat, 12/01/2012 - 17:00 | 3026761 Aurora Ex Machina
Aurora Ex Machina's picture

We can hope.

Can't say The Establishment doesn't know the score.

Sadly, sometimes I fear Margaret Atwood was more correct.

Sat, 12/01/2012 - 17:53 | 3026859 Yen Cross
Yen Cross's picture

Thanks... lots to absorb/ working on it... Are those black helmuts bear skin ? Like the Royal Palace(guards) in London?

Sat, 12/01/2012 - 17:56 | 3026871 Aurora Ex Machina
Aurora Ex Machina's picture

Those are indeed bears at Buckingham palace, playing the entry of Lord Vader, know as the Imperial March.

The Establishment will do business, but I expect the day oil runs dry, diplomatic immunity in London will quickly be revoked (not to mention those deeds on all those buildings).

Sat, 12/01/2012 - 18:03 | 3026885 Yen Cross
Yen Cross's picture

 Thanks for the info. Much appreciated/ I have been told lighter colored pelts are for "higher ranks in "Her Majesty's service".

  Not Secret/ just ceremonial. I told you I would watch, and learn> Thanks again- good history...

Sat, 12/01/2012 - 21:11 | 3027218 Cathartes Aura
Cathartes Aura's picture

the real value in Margaret Atwood's excellent Tales is her pointing to how women will collude with their mind capture, and police themselves within the culture.

given her novel was released nearly 40 years ago, it's good to know the discourse continues, and culturally assigned gender roles continue to be scrutinised.

in knowing that, the worm turns.

Without me
Who would let you play God
And make-believe that all the blasphemy
Is coming only from me?

Sat, 12/01/2012 - 21:39 | 3027258 Aurora Ex Machina
Aurora Ex Machina's picture

If had more than +1, I'd give it.

 

Old, and hackneyed, but hey (and it's the meta comment on her rather than the lyrics - watch the eyes)

Sun, 12/02/2012 - 19:41 | 3028539 Cathartes Aura
Cathartes Aura's picture

the appreciation is in the shared awareness, always.  a few here do. . .

she may not be quite my flavour, but I'm always glad she's out there, inspiring grrrls to fk w/cultural limitations.

head to toe, a brilliant example of challenging stereotypes, stand alone.

 

edit:  I mistakenly gave Atwood an extra decade of publishing history, it's only been about a Saturn cycle, aka 29yrs +/-

Sat, 12/01/2012 - 18:25 | 3026927 Urban Redneck
Urban Redneck's picture

I don't think that's the message they took away from the “ASEAN: One Community, One Destiny” meeting...

http://english.peopledaily.com.cn/90777/8037572.html

or the more subtle and diplomatic version

http://www.scmp.com/comment/insight-opinion/article/1091355/chinas-forei...

I think there might be a more ZH reader friendly article floating around Asia Times that makes the same point that the Kenyan Keynesian isn't even a competent organ grinder for the NWO.

(but I repeat myself)

http://www.zerohedge.com/news/2012-11-28/guest-post-we-are-all-currency-...

 

Sat, 12/01/2012 - 19:53 | 3027084 tip e. canoe
tip e. canoe's picture

well there's this one by Spengler:

Washington might want to pivot towards Asia. At Phnom Penh, though, Asian leaders in effect invited Obama to pivot the full 360 degrees and go home. 

http://www.atimes.com/atimes/Global_Economy/NK27Dj02.html

then there's this from Pepe:

So in the end what was Obama exactly doing in his whirlwind Southeast Asia tour? To the horror of American exceptionalists of all strands, he was, essentially, offshoring US jobs.  Obama went on a charm offensive to expand to as many Asian nations as possible a North American Free Trade Agreement-style deal known as the Trans-Pacific Partnership (TPP). TPP is yet another fabulous tool for US corporations - as well as yet another nail in the coffin of US manufacturing. Obama administration officials were busy spinning TPP as a tool to facilitate Obama's pivoting, in terms of "containing" China. On the contrary; Hillary Clinton herself announced that she would love China to be part of TPP.  Pivoting? Don't believe the hype. It's just business.  

http://www.atimes.com/atimes/Middle_East/NK22Ak02.html

all in a week's work from our friendly fascist in "charge".

Sat, 12/01/2012 - 22:33 | 3027100 Urban Redneck
Urban Redneck's picture

Found it- Spengler's follow-up piece:

It is symptomatic of the national condition of the United States that the worst humiliation ever suffered by it as a nation, and by a US president personally, passed almost without comment last week. I refer to the November 20 announcement at a summit meeting in Phnom Penh that 15 Asian nations, comprising half the world's population, would form a Regional Comprehensive Economic Partnership excluding the United States.

President Barack Obama attended the summit to sell a US-based Trans-Pacific Partnership excluding China. He didn't. The American led-partnership became a party to which no-one came.

Instead, the Association of Southeast Asian Nations, plus China, India, Japan, South Korea, Australia and New Zealand, will form a club and leave out the United States.

http://www.atimes.com/atimes/Global_Economy/NK27Dj02.html

Sun, 12/02/2012 - 10:02 | 3027825 Bob
Bob's picture

+1 Many thanks, UR!

Sat, 12/01/2012 - 15:46 | 3026640 tooriskytoinvest
tooriskytoinvest's picture

Things Have Spiraled Out of Control: American Households Hit 43-Year Low In Net Worth, A Staggering Collapse In Small Business Optimism Since The Election, $268 Billion In New ObamaCare Taxes Beginning January 1, 2013, And A New Law To Tax Americans Heavily For Leaving The United States!!

http://investmentwatchblog.com/things-have-spiraled-out-of-control-american-households-hit-43-year-low-in-net-worth-a-staggering-collapse-in-small-business-optimism-since-the-election-268-billion-in-new-obamacare-taxes-beginnin/

Sat, 12/01/2012 - 15:52 | 3026650 PGR88
PGR88's picture

The Romans created the institution of serfdom, as it moved from a Republic to an increasingly centralized, corrupt, inflationary Empire.

We had our first lesson 2000 years ago of what statist central-planning does to workers.

Sat, 12/01/2012 - 19:13 | 3027015 CH1
CH1's picture

The Romans created the institution of serfdom, as it moved from a Republic to an increasingly centralized, corrupt, inflationary Empire.

Not quite. Serfdom grew out of the Roman tax laws of the 4th century. (The changeover to the Principate [early Empire] was centuries prior.) Workers would be moved from place to place to avoid the tax man, so new laws were passed, tying them to fixed pieces of land. That evolved into serfddom over time.

I wonder what the ruling monsters will do this time around.

Sat, 12/01/2012 - 16:01 | 3026659 imapopulistnow
imapopulistnow's picture

The cause of labors woes is clear.  Just look at the charts.  it is called CHINA.  A nation with 4 times the population of the USA, twice the population of the USA and Europe combined, with labor costs that are a mere fraction of those in the developed world.

Labor strife will not be cured until there is a greater equilibirum between the cost of labor in China and the developed world.  Currency manipulation by China cannot be tolerated.  We are the fools.  The Chinese clearly understand this, but we throw up smokescreens of ideological theories rather than recognizing the obvious.

Sat, 12/01/2012 - 17:53 | 3026866 earleflorida
earleflorida's picture

china seems to be the only one playing by true capitalist rules? 

the $ isn't worth more than $.20 as the chinese have given u.s.? the benefit of the doubt...

Sat, 12/01/2012 - 21:23 | 3027238 Vendetta
Vendetta's picture

"china seems to be the only one playing by true capitalist rules?"  China has capitalized on US government and financial market corruption, that's about it.  It is still communist with a plethora of state owned 'enterprises' with wanton corruption.  Their cheap labor and even cheaper price of corruption is quite the advantage.

Sun, 12/02/2012 - 20:04 | 3028581 earleflorida
earleflorida's picture

and what is s. korea, japan, and the eu monopolies... subsidizing airbus, et. el.

the us is the biggest currency manipulator in the ?free?! world.

us multinational's & corp's. pay zero in taxes and get free money via gov't. enterprise credits!

wake up

Ps. try speaking up in public, or in private [phone,internet, etc.] about ??? and see how fast the clubs come out!!!

Sat, 12/01/2012 - 16:02 | 3026662 Benign
Benign's picture

Do not confuse physical capital with investment capital.  The problem is concentrated ownership of investment capital.  Peter Drucker wrote a book called "Pension Fund Socialism" about 40 years ago celebrating how the ownership of much of corporate American by the workers' pension funds could lead to an equitable distribution of profits.... do you see any workers' reps on corporate boards in America?

Redistribution via the tax system in a mixed capitalist system works in Scandinavia, why shouldn't it work in America?  

Sat, 12/01/2012 - 18:41 | 3026936 Urban Redneck
Urban Redneck's picture

Perhaps because it isn't working now in the US. (something about insanity comes to mind...)

 

Sat, 12/01/2012 - 16:03 | 3026664 woggie
woggie's picture

the beast is on the gobble
and all that matters is we're all headed for it's belly
http://youtu.be/ntmthFyaYzY

Sat, 12/01/2012 - 16:07 | 3026668 BraveSirRobin
BraveSirRobin's picture

The graph indicates the higher the borrowing costs, the lower the average hourly wages. The straight line running from the lower left corner is misleading.

Sun, 12/02/2012 - 16:46 | 3026722 formadesika3
formadesika3's picture

Yes, very misleading. Fitting a line fron upper left to lower right through the data points would make it clear

edit: but I sound ungenerous. It's a great article over all. Thanks, TylerX.

Sun, 12/02/2012 - 00:14 | 3027480 TwoHoot
TwoHoot's picture

It looks like a regression line would go from about Sweden to Thialand with higher interest rates associated with lower labor costs.

The line shown is very misleading because the data just doesn't support it.

 

Sun, 12/02/2012 - 10:20 | 3027846 Bob
Bob's picture

WTF?

Sat, 12/01/2012 - 16:12 | 3026677 aymankkhlifat
aymankkhlifat's picture

You have to focus on the two things you can Control.Yourself and your risk $$

Sat, 12/01/2012 - 16:12 | 3026678 Bear
Bear's picture

And then the largest single component of GDP (24%) is government where all of the above does not apply since their hourly salary is a one way street ... up, up, and away. GS will spend oodles of time and money studying the 'private sector' and its labor costs, yet not a peep about government. Labor (or at least its leaders) are lockstep with government, as seen in the last election, so the manufactured outrage at 'The Corporation' is misplaced and until government is reduced (personnel, pay and benefits) wages will continue to decline.

Sat, 12/01/2012 - 17:56 | 3026869 Whoa Dammit
Whoa Dammit's picture

GS should study its own labor costs. I hear they are rather substantial.

Sat, 12/01/2012 - 21:53 | 3027297 Bear
Bear's picture

At GS 'labor cost' is a euphemism, no labor and we pay the cost

Sat, 12/01/2012 - 16:26 | 3026679 Yen Cross
Yen Cross's picture

 Things are going to get really perplexing when the Middle East can't be bought off with worthless (U.S.) fiat... That is the status quo right now.

   Dollars are becoming even more worthless by the month.  Water along with food staples is becoming more valuable... (commodities priced in usd)

 Dollars are becoming antiquated in a land of people that are importing their very sustenance/

Sat, 12/01/2012 - 16:57 | 3026759 surf0766
surf0766's picture

What is the tipping point for the dollar? There are small signs with the different country agreements but what would you look for?

Sat, 12/01/2012 - 17:03 | 3026772 Yen Cross
Yen Cross's picture

Long term bond flows. No one want's to excite the system before the "global greenback "reserve currency" gambit is broken<

  Central banks are all ready moving away from Treasuries. They will just graduate their risk down to shorter term notes.

  Big Ben will buy everything until he can't!

Sat, 12/01/2012 - 16:13 | 3026682 kurt
kurt's picture

Kiss the Balls that Bind You!

Sat, 12/01/2012 - 16:14 | 3026684 FreedomGuy
FreedomGuy's picture

Excellent article, Tyler. The bottom line as best I can understand it is frankly that labor has to become a free-flowing adjustable commodity. Real wages cannot rise unless the real demand for labor increases. What the "genius" central planners and the liars of collectivism do is load up labor with preordained costs to the point where labor simply cannot pay for itself along with the welfare state.

I look at a free economy (which exists nowhere in the world in pure form) as a rainforest. Everything finds it's place in the gaps between other competitors. It is adjusting itself every second of every day to whatever the conditions are at the moment, e.g., drier, wetter, darker, lighter, new competitors, etc. By definition it is perfect and durable because no one is managing it. Short of an asteroid strike it can weather and adjust to anything.

Central planners are like people who alternately drop fertilizers and weed killers from 5000 feet supposing they are doing good where needed and opposing bad where needed. They simply obliterate what was a perfectly balanced forest of immense complexity which they did not understand. There is a worse part, too. What is worse is that if they stop the alternate fertilizing and poisoning there will be more pain as the forest readjusts and rebalances itself back to equilibrium. This is where we are today, I think.

Good luck to all of us.

Sat, 12/01/2012 - 16:31 | 3026703 falak pema
falak pema's picture

why should the workers of the world unite if this is around the corner? 

GOLDMAN: The Economic Crisis Ends In 2013 - Business Insider

All our problems be over; so says the squid! 

And this ! : The US Energy Boom: Why People Are Starting To Talk About 'Saudi America' - Business Insider

And this ! : The Week Beginning December 3 Will Be Huge For The Global Economy - Business Insider

And this !  :How Surging Shale Production Could Bring Oil Prices Down To $50 Per Barrel - Business Insider

wow, doomers! the world is now truly fixed! 

Right???

Sat, 12/01/2012 - 16:27 | 3026706 michael_engineer
michael_engineer's picture

There's some interesting considerations on how the interplay between capital and labor may be affected by resource issues here:

http://www.zerohedge.com/news/observations-engineer

Sat, 12/01/2012 - 16:51 | 3026749 dolph9
dolph9's picture

So, is everyone here tired of the new normal?  Of the endless zombie state which we seem to be in?

Here's the two step process on how to kill it off, how to contribute to its demise so we might actually see the collapse within our lifetimes and certainly within our children's.  It's remarkably simple but perhaps easier for some.

1)  Stop working hard.  Just stop!  You must make it an existential choice to your very core that you won't work "hard" to support the current system.  You must reject 200 years of American, Protestant propaganda that "working hard" is a good thing.  You must get to the point where you actually ridicule, mock, and pity the poor fools who are working hard.  Then, and only then, will you be able to focus on working right, on working smart.

2)  Stop consuming stupid shit.  Don't buy stuff, and learn to say "no" to people when they ask you to participate in their own stupid shit.  The word "no" must become a part of your vocabulary.  You must be able to say it openly and forcefully to everybody...your family, your friends, yourself, and those strangers who are constantly asking you to contribute your time and your money to their agenda that you have absolutely nothing to do with.

Practice and preach these things.  If we get enough of a critical mass of people to follow this two step process, this system comes down and comes down in a hurry.

 

 

Sat, 12/01/2012 - 17:02 | 3026771 Seasmoke
Seasmoke's picture

how else could corporations compete against the government

Sat, 12/01/2012 - 17:09 | 3026779 Alternative
Alternative's picture

We should all keep thanking our troops. Hordes of illiterate morons who have no clue what else to do with their pitiful (arcade game honor seeking) lifes but to pridefully serve banksters. And get a big hug in drunken media.

If we are to evolve as humans, we first have to be able to label this poor shit, willing to kill and die for crap concepts sold by the media and banksters as what they (and their in media honored deeds and families) really are: human trash!

Sat, 12/01/2012 - 19:14 | 3026851 Aurora Ex Machina
Aurora Ex Machina's picture

So close!

 

Time for a European bed-time story.

 

For this one, we'll first take a foray into the world of financial scams, the infamous Nigerian 419 scam. There are a multitude of them out there, all seeking to part the gullible from their cash, with various hooks, tropes and wonderous rewards. They're all based on a single premise: you can't con an honest man (rumour is that GS applicants must gain at least $1 million through using them before even stepping through the doors, but this is mere tin-foiled nonsense). We all know about them, and we all roll our eyes at the dupes who fall for them, so why is this interesting?

Well, the interesting thing about Nigerian 419 scams is that they're deliberately badly written: yes, all the bad grammar, obvious lures and outlandish concepts are 100% by design. The why for this is two-fold; it's a quick heuristic trick to weed out anyone not stupid enough to fall for them, thus upping the efficiency of following leads (we shall, for the moment, ignore the huge trolling culture surrounding the LULZ of gaming them back), and for those who fail the first heuristic, the concept that your partner is stupider than you opens up all kinds of weaknesses in a mark.

Again, why is this relevent? Well, I'd like to introduce you to the wonderful world of politics: in particular, Fox News and the "far right" - for an example, let us pick out Anne Coulter, who is widely regarded as a troll. Bill O' Riley is also widely acknowledge as far more intelligent than he plays on air. Now, does Fox News believe everything it airs? Does Mr Murdoc believe anything he peddles? For Murdoch, there's a quadruple heuristic at play: making money as a business, and pandering to and keeping his viewers, while keeping his advertisers happy.[1] Now, let us think back to our Nigerian scammers: what is the best way (and trust me, Nigerian scammers perform the game in a more high pressure-to-deliver ecosystem than even boiler rooms) we've seen to gain the trust of our marks?

But, you cry, that's just liberal gloating and twaddle!

Why, I reply, of course it is. Because The Colbert Report and so forth work on exactly the same model. Sure, the heuristic is set slightly higher (grammatically and humorously) and slightly wider (mostly the switch is from fear / negative emotions to feel-good / positive emotions), but they're both playing the same game. Both are designed to make money and to keep hold on their customers, and inform and shape an opinion with the willing consent of the participant. After all, our Nigerian friends have no way of forcing someone to transfer their cash, the flesh and soul must be willing!

This goes all the way up, which is why watching the President's Roast [either Bush making jokes about "evidence of WMDs in Iraq" as non-existent or Obama "releasing his birth video" as the Lion King] at the White House Correspondent's dinner is so useful. This is where the culture of LULZ taking the piss out of the scammers comes into play; and who pray are the scammers in a voting Republic? Certainly not the people who bought the votes, but the voters themselves. If you need a lesson in power-politics, I suggest viewing the Obama WHC dinner media, but focusing on Michelle's expression. Tiger, Tiger, Burning bright does not even come close to it.

Then, we foray into those murky realms of spooks, propaganda and the shadow-behind-the-veil stuff. Here, again, the heuristic is changed, as the participants have even more meta-aware heuristics. But they're still there.

So, as a matter of advice, stay frosty my friends.

 

 

The trick to not falling for any of this is more complex. Be aware.

 

 

 

[1] Glad you noticed I missed one out: the fourth estate is power, but that's a whole different game. Not really, only kidding.

Sat, 12/01/2012 - 20:10 | 3027115 tip e. canoe
tip e. canoe's picture

don't forget the Internet'stm new celebrity superspook (A Legend In His Own Mind).

Sat, 12/01/2012 - 20:27 | 3027131 Aurora Ex Machina
Aurora Ex Machina's picture

The name is a 100% giveaway that it's FUD. The Eye loves an obvious bit of humour.

 

Didn't even need to check the site: but when I did, I won myself 5 bucaroo-bucks. Might spur me to looking into the Adamus Group though, so thanks.

 

Nose is twitching over that little caper.

Sat, 12/01/2012 - 21:05 | 3027206 tip e. canoe
tip e. canoe's picture

mine too...looking forward to what you pull out of the rabbit hole.

Sat, 12/01/2012 - 17:20 | 3026796 I am Jobe
I am Jobe's picture

More MCD's and WMT's needed in the USSA. There solved the problem.

 

Sat, 12/01/2012 - 17:39 | 3026832 Hannibal
Hannibal's picture

Anyone "working" for a wage is a slave!

So stop busting your balls and quit consuming.

Sat, 12/01/2012 - 17:43 | 3026845 wonderatitall
wonderatitall's picture

ebt cards unite...the only thing you have to fear is no getting other peoples money....oh shit  who cares,eh....throw the blue state bitch over the cliff and shoot that union goon hag

 

Sat, 12/01/2012 - 17:51 | 3026863 surfeitndearth
surfeitndearth's picture

I wonder when the media will report that while Hostess was trying to cut Bakers' pay by 8% and benefits by 32%, their CEO gave himself a 300% raise.
Nine Hostess executives received 60% to over 100% raises, while the company was filing for its second bankruptcy.
Meanwhile, Hostess stopped paying into the employees' pension, owing them over $160,000,000 (yes, that's million).

Sat, 12/01/2012 - 17:56 | 3026870 Yen Cross
Yen Cross's picture

Excellent comment/ BLS will blame the " BLS" numbers on Sandy<

Sat, 12/01/2012 - 21:26 | 3027249 Vendetta
Vendetta's picture

the truth will not be heard, it ruins the most common MSM line used

Sat, 12/01/2012 - 18:57 | 3026983 buzzsaw99
buzzsaw99's picture

It is capital which is becoming the joke. Labor will laugh at capital in the end.

Sat, 12/01/2012 - 18:59 | 3026990 WallowaMountainMan
WallowaMountainMan's picture

i just skimmed the responses, but i thought producers were the folks that grew vegetables.....

 

ok, maybe i shoulda worked in the zero mostel thing.

Sun, 12/02/2012 - 02:47 | 3027613 CheapBastard
CheapBastard's picture

"Thingamajigs for Free!"

 

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