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There's No Way Out Now: "That Choice Was Yours"

Tyler Durden's picture




 

Submitted by Thad Beversdorf via FirstRebuttal.com,

This is a screen shot from my iPhone about a week ago.  And really this says it all.

 

IMG_0061

 

Breaking news is highlighting the all time highs again while the underlying economic news is negative across the board.  No other time in history could the economy be in such dire straits and have the market completely apathetic to it.  Whether it’s total debt, Consumer debt, retail sales, housing, productivity, inventories, full time jobs, GDP, wages, just about any indicator it is negative.

And if we put it in the context of having such extreme monetary policies with the sole intent toward all of these moving in a highly positive direction the above indications aren’t just terrible they are frightening.  It’s kind of like when you’re in a fight and you’ve just hit the other guy with your best punch and he doesn’t flinch.  You start to think this ain’t going to end very well.  I expect the Fed folks are suffering from a case of the ‘oh shit that was the best I got’ syndrome.

Our nation’s ‘best and brightest’ economists and financial ‘experts’ have created policies that are their best ideas to generate economic growth and these policies have failed completely.  The only thing preventing this nation from a full on collapse is an all time high stock market.  And that is the only reason the market is at all time highs.   Volume is sparse, institutional money is on the sidelines and every damn metric you can think of is falling apart yet markets are at all time highs, thanks to the Fed.

Remember we had a 10% sell off over the course of about 8 trading days in October.  The Fed stepped in and stated that QE4 was cocked and ready.  That reminded investors the market is risk free and with that it once again moved on to new highs.  Now understand, this is in the face of 12% unemployment, a dead housing market, declining real retail sales, negative real GDP when adjusted for debt and a middle class that is now completely reliant on consumer debt for basic survival.

You can look to things like real wages and real median income to see if the American consumer, always the bulk of GDP and really the only measure of GDP that should be of concern, is healthy or not.  And the data shows us the American consumer has slightly more real income than they did in 1985 (7% more).  They have lost 10% of their income since 2000.  They have also taken on 150% more debt to compensate for the loss of income during that period.  The obvious implication is that the typical American’s real free cash flow has diminished significantly.  Yet somehow the market expects future corporate free cash flows to grow forever without the existence of the American consumer driving them?  I just don’t get it.  Where does the money come from??

For the past three years corporate earnings have been growing by way of contraction.  Revs – Costs = Earnings.  Reduce costs and earnings will grow.  However the obvious conundrum is that costs are limited and thus cost cutting is not a sustainable growth strategy.  We do it when we have nothing left to show growth.  Share buy backs and cuts to production have been the only reason earnings have been positive.  This was true in 2006 and 2007, and by 2008 the cash-flow from cost cutting ran out.  I dare say we are entering that phase now and should expect to see a significant slow down in earnings growth despite the fanciest of fancy accounting.

If you have even a slice of common sense you understand that debt being used for consumption is not the sign of economic or financial strength, money pulled away from capex isn’t income and earnings growth by way of cost cutting is not sustainable.  So be careful when listening to the bank analysts so willing to get on television to tout American economic prowess and divert attention away from things that portray the real story.  They get paid to cheerlead.  Seriously it is in the job description.  Ok maybe not the short skirt and pom pons but the cheer is in there!

In fact, in an onslaught of research Brian Belski of BMO sent me, produced by his team of analysts, not once did they discuss revenues in their medium and long term market forecasts.  Revenue is the one item that every business in the world cannot exist without.  It is actually the only item that all businesses would fail without.  Yet in all of the research provided by Belski not once did his team discuss revenues.  The reason is simple.  It would contradict the story he is paid to sell.

Any reasonable and impartial analyst forecasting the future performance of the market will certainly discuss sales or something that relates to the existence and position of a consumer.  In fact, Morningstar’s key measure is wherewithal of future cash flows, meaning they put a significant amount of focus on stability of future sales.  But not BMO, they suggest a capex resurgence, that has nothing to do with growth in sales, will be the great saviour.  Odd given demand growth as measured via sales is the only reason a firm will expand capacity.

The reality is that America’s economy and thus America’s bottom 80% has been at best flat for 6 years and is now actually sliding backwards despite the vast amount of money being injected.  Even according to the Fed’s own reports, we have yet to see 3% annual growth in GDP since 2007.  And that figure includes all of the growth in consumer credit.  Take out the consumer credit, which we know cannot count as growth as it has a negative net effect, and the reality of negative GDP sets in.  That is udder failure!  Don’t tell me next year again.   You folks at the Fed have absolutely failed!  Who gets 6 or 7 or 8 years of burning through trillions of dollars with no results???  Who gets that??  Come on give me a f#cking break already!!  YOU HAVE FAILED! PERIOD!  YOU’RE FIRED!  GET OUT!

Those are the words that every American in the bottom 80% would receive if their performance was as poor in their respective jobs, should they be lucky enough to have one.  It absolutely boggles my mind that these arrogant fools who have so clearly made every wrong choice available to them still walk around and talk as though we are to believe they know anything about anything.  Who are these clowns and what world do they live in??  Is there absolutely zero accountability anywhere in our nation’s leadership??

What could possibly change next year that hasn’t changed after 6 years?  What input has a 6 year lag?  These are the common sense questions that nobody seems to be asking.  If these clowns are seriously just going to say next year then give me an explanation of why it hasn’t happened despite their calls each year that next year will be the year.  And why this year’s call of next year is different?  What is the lag effect that hasn’t yet come to fruition that we are now expecting to hit?  Housing??

People are beginning to realize housing is not going to be the saviour.  In fact, we almost don’t hear about housing anymore.  But for years after the great credit crash, housing was touted as being the thing that will pull us out of recession.  I have been very clear that the housing effect is dead.  So not only is the expansion of jobs in the construction sector improbable but the wealth effect of home ownership too is dead.  Subsequent to 2008, the typical home owner simply doesn’t see home equity as stable enough to live against because surprise surprise house prices do decline.

Screen Shot 2015-02-19 at 9.55.37 PM

The above chart tells us that housing, now higher than its been in 6 years has only made it back to the historic lows.  And with home loans more difficult than ever to obtain this is not going to change anytime in the near future.  So we can write off housing as the catalyst for true economic growth.

So then what is it that will pull us out of the economic doldrums in which we’ve experienced for so many years now?  Well as discussed above, BMO Capital Markets believes a resurgence in capex will be the answer.  Driven by weakening emerging markets and a behavioral change in the American consumer to a move away from cheap products into more expensive products that are produced closer to home, BMO is predicting capex will surge and with it will lift America.

And while I agree with the premise that capex is a very important part of turning the economy around I fail to see a catalyst for a resurgence in capex.  You see capex correlates highly to revenues, not earnings.  The reason is that revenues correlate significantly to demand.  When revenues are growing it is a signal that demand is growing requiring more capacity.  More capacity means capital expenditures.  There is nothing outside of strong demand that drives capex on a large scale.  Tax incentives can push capex forward but not often and not on a large scale.  The continuing decline in capital expenditures is proof that demand is not strong for the two states do not coexist.  In fact, capacity utilization is the lowest it’s been in decades despite declining capacity which all else equal should increase capacity utilization, which tells us that everything is not equal.  Utilization has declined faster than capacity!

Screen Shot 2015-02-20 at 12.51.38 AM

The chart depicts degrading efficiency in capital assets over time.  While companies have streamlined the workforce they are still in process of streamlining capital assets.  This should continue as the average capacity utilization before 2000 was around 85% and currently we are just inching back to around 80%.  The interesting thing about this that absolutely nobody on television dares to mention is that capex is the basis for a trickle down recovery.  That is, make borrowing costs relatively very cheap and corporations will use that low cost period to increase capex because it lowers the break-even for a given project and thus increases return on capital.  And ROC growth equates to big bonuses for C-suite executives.

But why didn’t C- suite executives take advantage of low cost capex?  Well you can thank both fiscal and monetary policies for destroying corporate capital expenditures.  As a CEO you must allocate your cash to maximize shareholder value.  And when the US has implemented a fiscal policy with the highest G20 corporate tax rate it means the break-even is higher than every other developed nation.  And so when demand is weak there is no reason to invest in capex unless costs are relatively very low, which the tax has ensured is not the case.

From a monetary perspective, borrowing costs are extremely low and corporations are borrowing to take advantage of the cheap cash.  However, the Fed has guaranteed an upward moving stock market.  And so the CEO is required to maximize shareholder value and thus must take the lower risk, higher return investment, which is most certainly the stock market over a high cost, high risk consumer market.  Essentially between fiscal and monetary policy there is no way the CEO can in good conscience build out capacity.

So housing and capex are off the list as a growth function for the economy.  How about jobs?  Well according to the mainstream media, the Fed and the government, unemployment is down to 5.7%, which is historically pretty good.  But then why the lack of economic or wage growth?  This too is pretty basic stuff.  If we look to the U6 unemployment figure we see unemployment and underemployment remains well into the double digits at 12%.  This is certainly improved from the 2009 17% print but it is still higher than at any point between 2000 and 2008.

So despite all the calls of a radiant job market the reality is much more grim.  Again, the proof is in the pudding.  If the job market was so very strong, wages and median incomes would see material increases.  That is just the law of supply and demand for labour.  Because we actually see weakening wages and incomes it tells us there is increasing slack in the job market.

And so housing, capex and jobs then are off the list as potential growth drivers.   Essentially we’ve just determined that we won’t have a wealth effect, a supply side or a demand side recovery.  Outside of that I’m not sure what type of recovery exists.  I suppose a central banking recovery or at least that’s what the Fed is telling us.  But 6 years on and we are still waiting for all that wealth, created by the Fed’s trickle down policies, to actually trickle down.

Instead the cheap money has been used to compliment the corporate layoffs with share buybacks.  Money saved from layoffs and from 0% loans go to share buybacks, which actually take money outside of the economy and into secondary markets that have no positive impact on the economy.  But it has created immense unearned wealth to .1% of the population.  Just so happens that the same folks holding onto these policies are part of that .1%.  All starting to make a bit of sense now??

Now none of this is earth shattering.  I’m certain most, when really focused on such things, understand that jobs, capacity expansion and housing are all in pretty bad shape.  Yet we allow these central bankers to simply continue the same policies.  It is imperative for the typical American consumer to understand that the Fed will carry on with these policies until it all collapses.  It’s exactly what they did in the lead up to the 2008 debacle.  They deny there are any existing problems that are not being overcome by their intellectual wizardry.

 

And the pundits laughed anytime cooler heads attempted to speak the truth about the coming collapse.

My point to all of this is while the overwhelming message continues to be everything is strong and the future is absolutely as bright as ever, as measured by the all time high markets, the facts and the data clearly tell a different story.  What the videos remind us is that the pundits will always tout the ‘everything is great’ story until it is too late.  They laugh and ostracize anyone who attempts to rock the boat with a message of reality.  And they do it to deter others from delivering such a message.

That message is that there exists no catalyst mechanism to pull us out of this economic slumber.  If you listen carefully to the pundits they never actually state a way out.  They state the fundamentals are very strong but they never point to any specific fundamentals because there aren’t any strong fundamentals.  And so here we go again with analysts touting strong fundamentals, pundits vehemently calling for economic growth and yet we haven’t seen any of it.  Year after year after year we accept their story and the whole time the typical American gets poorer (median net worth is down 40% since 2007) while the top .1% is getting richer and richer.

Inevitably this all time high market overvaluation will blow up the same as last time despite the pundits laughing at such predictions.  There is no escaping it and the real shit of it is that more retail cash is in the market than in 2007.  Because net worth is down 40% that means a much higher total percentage of total household wealth is going to be lost in this next crash.  The devastation will be more than most folks can sustain and the government will again look to reimburse the banks rather than the citizens.  So you can listen to and laugh along with the ‘all knowing’ pundits or you can take heed of history and protect yourself now.  But do remember the choice was yours.  You will have nobody to blame but yourself when and if it all comes tumbling down and you were too busy laughing.

 

 

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Sat, 02/21/2015 - 14:37 | 5812412 Nid
Nid's picture

"udder" failure?

Sat, 02/21/2015 - 14:44 | 5812432 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

I caught the line with udders. There is no point in insulting a fine cow by confusing her with the Fed. Cows are very useful, the Fed is worthless!

Sat, 02/21/2015 - 14:58 | 5812495 freewolf7
freewolf7's picture

I found out sheep don't speak my language, so all I can do is prep.

Sat, 02/21/2015 - 15:25 | 5812570 NoDebt
NoDebt's picture

"udder failure" is when they leave the milking machine on the middle class too long.

Sat, 02/21/2015 - 15:39 | 5812615 zeropain
zeropain's picture

yah the milk machine is moved up the chain.  they had the milk machine going full blast on the poor americans in the industrialization.  they got so dry they revolted and the labor unions gain power.  then they milked chinese cows.  when they ran out they had to do subversive milking at night via 401k. they will start milking the upper middle class cows which are fat but not many of them, these will be milked quite quickly as they dont have much hay saved up as they hedged with paper instead.

Sat, 02/21/2015 - 15:42 | 5812624 new game
new game's picture

baaahaaamaaa, baaaamoaaaaaarfraaaaashaaaatttt

Sat, 02/21/2015 - 15:30 | 5812586 zeropain
zeropain's picture

herd mentality pervades,  moo moo moo  they did not see the tech bubble, housing bubble, nor the shale bubble.  all of these are severe misallocation of resource, they will never fix misallocation of money by creating easy credit, it just creates more cheaters as if the system is cheating why would anyone in it not cheat.  we cheat and convince ourself that we are still good people.

Sat, 02/21/2015 - 17:31 | 5813042 August
August's picture

Tinkerbell is dying.

Sat, 02/21/2015 - 15:51 | 5812666 lakecity55
lakecity55's picture

"Mr Yelling, we now own all of the stock market. Should we sell?"

Sat, 02/21/2015 - 15:09 | 5812531 Al Tinfoil
Al Tinfoil's picture

"udder failure" as in "tits up"?

Sat, 02/21/2015 - 15:38 | 5812611 Eeyores Enigma
Eeyores Enigma's picture

"The future looks so bright I got'ta wear welders goggles."

Sat, 02/21/2015 - 15:56 | 5812690 silverer
silverer's picture

Maybe think of it as taxpayers to the government.  That's coming, and it has nothing to do with disappointed babies.

Sat, 02/21/2015 - 16:05 | 5812726 dimwitted economist
dimwitted economist's picture

i keep running into people asking how our restaurant is doing... (we ARE in Michigan so there's that) Like shit.. i say. this economy Fucking SUCKS! the truth is UGLY!!!!!

Sat, 02/21/2015 - 16:30 | 5812801 scrappy
scrappy's picture

There is only one way out.

Ancient Egypt is the source of our problems today. The truth is that the cult of Aton (NATO) has been playing us for much longer than you can imagine.

http://www.irishoriginsofcivilization.com/chapter-ten.html

http://www.irishoriginsofcivilization.com/chapter-forty-one.html

http://www.irishoriginsofcivilization.com/appendices-1.html

Seek, and you will find that what we need is the foundation of truth. We must take that step to end this long cycle of evil - created chaos.

A society based on lies will always destroy itself.

What's the opposite of (evil)?

Learn to (live).

The truth will set you free.

Sun, 02/22/2015 - 11:10 | 5814931 LooseLee
LooseLee's picture

I beg to differ. 'Good' is not the 'opposite' of evil (it is as a 'concept' only). 'Good' is the ABSENCE of evil.....

Sun, 02/22/2015 - 11:57 | 5815031 the edge of chaos
the edge of chaos's picture

well now you are going to burn in hell....

 

Sat, 02/21/2015 - 17:20 | 5812997 petroglyph
petroglyph's picture

Cow humor

Sat, 02/21/2015 - 17:57 | 5813157 williambanzai7
williambanzai7's picture

He meant rudder failure, which is usually a terminal event sailing in a storm.

Sat, 02/21/2015 - 14:45 | 5812437 TeamDepends
TeamDepends's picture

Agreed, so don't send them a check April 15th, it will only encourage them.

Sat, 02/21/2015 - 18:59 | 5813344 Arnold
Arnold's picture

nice

Sat, 02/21/2015 - 14:47 | 5812450 Baby Eating Dingo22
Baby Eating Dingo22's picture

What matters to stock mark-it has NO relation whatsover to what matters to economy

Outside of political capital, they've been permanently divorced by Fed and Whoa!! Street

Three things matter to mark-it

ZIRP

QEternity

Non-GAAP

If you can bank on these three things, you can bank on higher mark-its

Sat, 02/21/2015 - 14:59 | 5812497 847328_3527
847328_3527's picture
Robert Shiller: Buying a home isn't necessarily a good investment

 

"We're currently in the worst housing slump America has ever recorded ...'The government has taken over the risk management through Freddie Mac and Fannie Mae—it’s not even much of a private market,' says Shiller.

 

http://finance.yahoo.com/news/we-re-in-the-most-dramatic-housing-slump--...

 

Wait until the real RE correction hits. It's going to be a Doozy!

Sat, 02/21/2015 - 15:45 | 5812637 new game
new game's picture

deflating real assests.

the great down draft.

vooosh to the vortex of the black hole of fiat revaluing to zero, and on a long enuf time......

Sun, 02/22/2015 - 11:11 | 5814934 LooseLee
LooseLee's picture

Sure. I'll trade my PM's for RE. Let the carnage begin!

Sat, 02/21/2015 - 15:53 | 5812676 duo
duo's picture

If inflation was measured the way it was when Clinton took office, our economy would have shown a 30% contraction since 2007.

Sat, 02/21/2015 - 14:50 | 5812453 Dungholio
Dungholio's picture

Unfortunately we may be reading these same stories 20 years from now.  Look at how long Japan has been pulling the wool over the eyes of their population... and their "markets" are also at all time highs.  Now the FED likely feels the need for the DOW # to overtake the nikkei #...afterall the usa has to be #1...lol.  This insanity should not be able to but could continue for a long long time.  Maybe 75% of the population on ebt will awaken the bear???  Who am I kidding, they killed the bear long ago....

Sat, 02/21/2015 - 14:52 | 5812472 CoonT
CoonT's picture

Jinx, bitchezz!

Sat, 02/21/2015 - 14:59 | 5812496 Consuelo
Consuelo's picture

No worries there mate...   Circumstances outside of the Fed's control - and outside our borders will take care of the lag-time.   Not to mention, irrational and psychopathic decision making in U.S. foreign policy...    You won't have long to wait.

Sat, 02/21/2015 - 15:47 | 5812643 new game
new game's picture

vancd preppg bitchez

Sat, 02/21/2015 - 20:36 | 5813567 bid the soldier...
bid the soldiers shoot's picture

but

 Look at how long Japan has been pulling the wool over the eyes of their population

 

I'm going to bet there was no wool-pulling before Japan opened its markets to foreign ( read Wall Street) trading firms in 1982.

God Bless Them, Everyone

Every ugly trick of trading was brought to foreign lands by the Chums of Wall Street.

Sat, 02/21/2015 - 14:50 | 5812462 CoonT
CoonT's picture

More "Hurry up and wait"  Just look at how long Japan's been at it, eh?

Sat, 02/21/2015 - 14:51 | 5812465 roadhazard
roadhazard's picture

End the FED... OK, now what. That's all the power I have.

Sat, 02/21/2015 - 14:54 | 5812469 Squid Viscous
Squid Viscous's picture

I'm on the Highway to Hell...don't stop me!

- Ronald Belford (Bon) Scott

Sat, 02/21/2015 - 14:56 | 5812486 Consuelo
Consuelo's picture

"...No stop lights, speed limits, nobody gonna slow me down"

 

Bow my head, Bon Scott was AC/DC and there ain't no substitute. 

Sat, 02/21/2015 - 14:52 | 5812470 bid the soldier...
bid the soldiers shoot's picture

I must have missed that

you can listen to and laugh along with the ‘all knowing’ pundits or you can take heed of history and protect yourself now. 

 

"Protect yourself now"

I've heard about 'economic body armor' but never thought I'd be able to buy it at zerohedge.  Where do I send the certified check?

Sat, 02/21/2015 - 14:54 | 5812476 Consuelo
Consuelo's picture

"You can look to things like real wages and real median income to see if the American consumer, always the bulk of GDP and really the only measure of GDP that should be of concern, is healthy or not.  And the data shows us the American consumer has slightly more real income than they did in 1985 (7% more).  They have lost 10% of their income since 2000."

 

How about an equally, if not more appropriate comparison: $Purchasing Power.    I wonder how that metric fits into the equation and the 7% and 10%, 1985 and year 2000 dates & calculations, respectively...?

Sat, 02/21/2015 - 15:50 | 5812659 new game
new game's picture

factor in actual growth of consumers as an offset. moar idiots, ha...

Sat, 02/21/2015 - 14:55 | 5812481 Skateboarder
Skateboarder's picture

Great picture - fully encapsulates the situation. Crony bull 'market' is not an indicator of general well-being, but it's their excuse.

These are not the asset bubbles you seek.

Sat, 02/21/2015 - 15:42 | 5812622 Winston Churchill
Winston Churchill's picture

The only thing holding away the pitchforks and nooses is the market, and they know it.

The 401ks are the only carrot left for the American tax donkeys.

Sat, 02/21/2015 - 17:29 | 5813032 Sages wife
Sages wife's picture

Do donkeys have udders? I'm pretty sure sheep do.

Sat, 02/21/2015 - 19:04 | 5813359 Arnold
Arnold's picture

Now that Shale play has been beaten back, they are looking for the next Project Mayhem

The proud nail attracts the hammer.

Sat, 02/21/2015 - 16:03 | 5812704 BuddyEffed
BuddyEffed's picture

BDI and CAT paint the big picture consistent with this good analysis.  Also, you might count the number of strip mall and other mall vacancies and papered over store fronts in your area and compare that to 8 years ago.

Even the JCPenney in the Seattle Area Bellevue Square mall closed it's doors : http://www.seattletimes.com/business/jc-penney-store-at-bellevue-square-...

 

Sat, 02/21/2015 - 14:57 | 5812490 Baby Eating Dingo22
Baby Eating Dingo22's picture

This video of Alan Grayson grilling Bernanke is THE SHIT

He was at the top of his game

Lawyering at its best. Ready to attaack and ready to counter and never missing a beat

https://www.youtube.com/watch?v=1ZcehlgwwB8

Sat, 02/21/2015 - 15:04 | 5812515 A Lunatic
A Lunatic's picture

Theatrics, as demonstrated by the lack of any discernible real world change........

Sat, 02/21/2015 - 15:06 | 5812524 Al Tinfoil
Al Tinfoil's picture

The Eu says Extend and Pretend.  

The MSM say Take the blue pill and Drink you Kool-Aid.

Hugo Chavez said to divert all the nation's wealth into welfare programs.

The Sccandinavian countries say to tax heavily and provide cradle-to-grave social programs and allow massive immigration.

Germany says stay in the Euro and buy our exports.

Obarmy says Everything is Awesome.

The MIC says we need Moar War.

North Korea says F**k Everybody.

 NATO says Expand.

Russia says Nyet!

Saudi Arabia says Flood the World with oil.

China says Manufacture and Export.  And buy up foreign resources.

The US Federal Government invents thousands of ways to say You Can't Do That, It's a Felony.

FEMA builds prison camps and buys bullets.

Keynesians everywhere say Print.

PM bugs say Stack.

Preppers say Bug Out.

Wall Street says BTFD.

I say WTF!

 

 

 

Sat, 02/21/2015 - 15:16 | 5812549 i_call_you_my_base
i_call_you_my_base's picture

Obama's 8 year term is starting to look a lot like Bush's. I'm starting to think the presidential cycle has something to do with it. Early in your first term you think you can make things better, and you try a little, but then figure out that all there is to do is to blow a big fat bubble. So you do it somewhere early in your first term, and then spend the rest of your time trying to hold it all together. But there is a point at which it stops working. It could be because your political capital starts to wear off, you don't have as much clout or more to offer, etc, or maybe there is just a natural time limit on such things. Or I guess it's possible you just time it right so that its breaking point is exactly when you are about to leave.

Sat, 02/21/2015 - 15:50 | 5812664 Lynn Trainor
Lynn Trainor's picture

Obama came in bailing out the banks so was off to a bad start from the get-go.  Unwise decision after unwise decision.  Foolish, socialist president!  He has run out of other people's money.  We are left holding the bag.

Sat, 02/21/2015 - 20:23 | 5813535 calltoaccount
calltoaccount's picture

not "socialist"-- crony capitalist pres. he works for the same sociopath banksters reagan, bush, clinton, bush worked for.  the permanent oligarchy.  all the rest is bs.

Sun, 02/22/2015 - 13:34 | 5815260 Not My Real Name
Not My Real Name's picture

No ... he's a socialist. If you want to quibble, I'll bend a bit and call him a "crony socialist."  

Sat, 02/21/2015 - 16:01 | 5812718 silverer
silverer's picture

Obama only lasted a couple of months.  Remember, the Democrats had a supermajority, so what they did, in the beginning of the worst crash in memory, they spent like money was growing on trees.  Hundreds of millions of dollars on programs to nowhere.  The wish list could hardly be contained on paper.  That was the beginning.  He had the chance to be an awesome president, to send it back to his party and ask for a trim, to say that now was not the time to burn billions, but burn he did. He signed it just the way it landed on his desk.  Can't blame the Repubicans for that (but you can blame them for lots of other things.)  Only Scott Brown's election stopped the insanity, but not by much.

Sat, 02/21/2015 - 15:30 | 5812589 Magooo
Magooo's picture

I've taken action --- a remote farming community in New Zealand is my new home

Sat, 02/21/2015 - 15:53 | 5812678 Lynn Trainor
Lynn Trainor's picture

The truth is, there will be no safety anywhere, unless it is well with one's soul.

Sat, 02/21/2015 - 20:12 | 5813515 bid the soldier...
bid the soldiers shoot's picture

There will be no safety anywhere, even if it is well with one's soul.

fixed it 4 u

Sat, 02/21/2015 - 15:39 | 5812619 DipshitMiddleCl...
DipshitMiddleClassWhiteKid's picture

get long on $ESLT

Sat, 02/21/2015 - 15:48 | 5812649 lakecity55
lakecity55's picture

"Of  course you know, this means war."

Sat, 02/21/2015 - 16:42 | 5812845 wmbz
wmbz's picture

The DOW will see 30,000 before it sees 10,000. The whole system is completly corrupted, the un-fed has free range, they will support the whole fucking thing when it comes down to that.

So bet how you will but this "thing" has a long way to go, it will not crash overnight. The magic hand will see to that. Or the black hand if you prefer.

Sat, 02/21/2015 - 17:53 | 5813135 August
August's picture

The UN-Fed....

I like the term, and IMHO it's worthy of repetition.

Sun, 02/22/2015 - 11:49 | 5815020 the edge of chaos
the edge of chaos's picture

I agree WM...there is EVERY reason for the "system" to collapse....but the Money Changers wont let that happen....especially when every country on the globe can/will print fiat forever...this shit can go on for many, many years...but we COULD have a epic black swan event(think detonation of a low grade nuclear device in a major city)...in that case the whole thing could come apart in a matter of 2-3 days!

Sat, 02/21/2015 - 17:09 | 5812949 MEFOBILLS
MEFOBILLS's picture

Two interesting quotes from the article:

The interesting thing about this that absolutely nobody on television dares to mention is that capex is the basis for a trickle down recovery.  That is, make borrowing costs relatively very cheap and corporations will use that low cost period to increase capex because it lowers the break-even for a given project and thus increases return on capital.  And ROC growth equates to big bonuses for C-suite executives.

And

“Instead the cheap money has been used to compliment the corporate layoffs with share buybacks.  Money saved from layoffs and from 0% loans go to share buybacks, which actually take money outside of the economy and into secondary markets that have no positive impact on the economy.”

Share buybacks use cheap credit to buy up stocks, effectively leading to plutocracy; hence a high-trust low-friction ownership society is thwarted.

Also, it is not cheap money, it is cheap credit.  Credit comes into being from nothing.  Let’s call it what it is. Money as credit issues forth from finance, and chases after financial vehicles (debt instruments or maybe something real) in order to make gains; rental gains are ok to finance, especially as oligarchy can still buy main-street goods for cheap. Goods origination country means nothing to the international as long as they remain in pyramid control.

  Both the brain and reproductive centers of the U.S. are parasitized by the International.  International Credit, which poses as U.S. dollars, are in turn banker Federal Reserve notes.

Money has these main attributes: Type, Volume, and Path.  Today’s economists seldom mention path, or what used to be called channeling by their better ancestors.

Obviously, the path of this banker CREDIT is not into the commons, or into labor, or into things that create wealth/health/well-being.   Also, there is both FISCAL policy and monetary policy with regards to any economy.  Our private banks, which control monetary policy, have overtaken government Fiscal policy.  Washington and other Western Governments are now subordinated to privatized money.  This is profoundly un-democratic.

Effectively, those who can issue credit are our new Feudal lords.  Serfs are now debtors constantly in debt to their financial creditors.  This new form of Feudalism doesn’t use land for control, but instead uses private credit means.

Because unelected finance has parasitized the West’s political brain centers with money power, the U.S. acts as a world hegemon – against the political will of its people.  Easily maneuvered sheeple are propagandized through a prostitute press to further the goals of the international.

The root problem is the money system.  Private credit creation against debt instruments/financial vehicles is at its terminus.

 The question is, will we terminate our mal-formed money system with war, or will we simply change the law, and reform it?

 

www.sovereignmoney.eu

Sat, 02/21/2015 - 18:45 | 5813289 Escrava Isaura
Escrava Isaura's picture

 

 

MEFOBILLS

About 98% of Americans (100% between my friends and colleagues) have not yet realized that their pension plans have been, for the most part, looted. That the US economy no longer has any surpluses to pay for these pensions, either.

 

Second, the US economy is not based in production since the 70”s (you can clearly see it by the labor participation rate in the link below) but, US economy and jobs are based in consumption and extracting revenues from financial instruments….. Not that you don’t know any of these.

 

Anyway, do you really believe that anyone could grasp that dollar is not US money, but private credit issued by the private sector? While having the “Exorbitant Privilege of” Global reserve currency?

 

Good luck telling these to anyone in America. It is a lost cause.

 

My advice?

 

Prepare for war to start in East Europe. A stock market crash. Civil war “Coup’s d’état” in South America. Chaos and civil war in the Middle East and most Africa. Especially West Africa.

 

Watch out when the war crosses into Russia and China boarders. As well as when the shortages, especially of oil and energy comes to America.

  

 

 http://1.bp.blogspot.com/-HfeMWqjq1w0/Ui191elw_VI/AAAAAAAAXME/pnWbmsjtY4c/s1600/Participation+Rate1.png

 

 

“United States is becoming a failed state, and thus a danger to its own people and the world.” – Noam Chomsky, 2006

 

 

Sat, 02/21/2015 - 17:56 | 5813070 mendolover
mendolover's picture

Those charts show the last recession was five years ago?

"Is there absolutely zero accountability anywhere in our nation’s leadership??"  Yeah, pretty much.

Sat, 02/21/2015 - 17:59 | 5813163 williambanzai7
williambanzai7's picture

Exhibit A: Greece

We have been told constantly that Greece has turned the Euro crisis corner.

And black is white.

Sat, 02/21/2015 - 18:07 | 5813188 lexluthor19
lexluthor19's picture

So.... buy the dip? Got it

Sat, 02/21/2015 - 19:10 | 5813370 smacker
smacker's picture

It all becomes clearer when one realises that MSM operates inside The Matrix.

Their role is to faithfully and accurately report the official propaganda spewed out by TPTB to keep the show on the road. They are permitted to question or query the official propaganda but only on points of understanding and clarification. Nothing more. Dissent from it is not permitted and will not be tolerated.

Their payback for obediency is getting access to important people inside The Matrix for exclusive interviews etc.

Sun, 02/22/2015 - 11:20 | 5814951 LooseLee
LooseLee's picture

Ha, ha. Their 'payback' will be lifelessly dangling from a rope....

Sun, 02/22/2015 - 11:42 | 5815003 the edge of chaos
the edge of chaos's picture

no...they will be "gone"....YOU and your loved ones will be the ones fighting the rope.....

Sun, 02/22/2015 - 11:39 | 5814998 the edge of chaos
the edge of chaos's picture

well when the charde ends we will ALL be in varing levels of hell.....best case senario is a long slow decline....worst a sudden and complete collapse!!

but know that the money changers will not go without a fight...they will contnue to grab every last dollar they can....and when they finally realize the game is over they will be tucked away safely in their bunker before the 1st drop of blood hits the pavement...and THATS when shit gets fun!

 

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