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America Is Losing Faith In The "Recovery"
Despite the promises of all the central planners that wage growth is coming (any day, week, month, quarter now with the recovery promised originally in first half of 2012 now delayed to the 9th half ), it appears that Americans are starting to give up hope in that one most important economic component: income growth.
Source: Bloomberg
And so the long wait for higher incomes is coming to an end as Americans give up and sink back to the un-double seasonally adjusted wreckovery, of only for 99% of the population.
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Your first line is an example of the issue. As soon as there is wage growth, TPTB try to stomp out wage growth becaues it is "inflationary".
What the Central Planners do not get is that rising and falling prices are the mechanism by which supply and demand of all items, including labor, get their clues as to what is needed in our economy.
Ya'll can keep the change
https://www.youtube.com/watch?v=b1kqiPdNnxs&index=7&list=PLa87PXxmPaspov...
TPTB *do* get it that rising and falling prices are the mechanism by which supply and demand of all items, including labor, get their clues as to what is needed in our economy. That's why they manipulate the price of money (interest rates) - the better to fleece the 99.99%.
... not to mention manipulating money itself.
I think the nature of increasing/decreasing the supply of M1 has to deal with alleviating funding concerns, but I could be in a minority on this one. How integrated tier 1/2 banks set their PD & retail network loan rates depends on how internal economics project profitable book value returns on retail risk. Nobody actually wakes up in the morning and runs a excel spreadsheet on muppet fleecing.
Yes, as I said a few weeks ago the perception of recovery and success is very much a core component of the wealth effect. Some guys should go reread Douglass North a few times or just buy the first 4 volumes of JEH. At this stage we're not seeing the whites of inflations eyes and its going to be near impossible to convince the world inflation will return to 3% in the next 25 years.
In 2 years at this glide path, I could make a strong argument fed stimulus will need to be in the magnitude of 10T a slug to alter investor horizons in the magnitude of QE1/TALF. Lets hope we are not at the point of unsterlized monetary policy. With animal spirits dead & gone, the Fed will need to deploy ever more exotic methods of monetary dispursement to keep the wealth mechanism going. Since the only true exo variables in this globalized model are leverage (stimulus) and technical innovation, the innovation will need higher ROAC or ROE (not buybacks) to get going, which ironically are keyed off the risk adjusted return of ZIRP (100%).
ps: Janet, eat a power bar next time.
"Investors" ? Honey, watcha smokin ? 99% of people, who are NOT "investors", will be out on the street and hungry after another injection of 10T. This train has almost run out of track.
Infinite immigration means no US worker wage growth. is simply economics. greater supply of labor means less of a price for that labor
I call bullshit. The labor that immigrants take is low end, and the wages are low. Wage growth is being murdered at the other end of the scale as the US outsources high paying labor. Also, those who choose to rejoin the labor force after layoffs are forced into crappier paying positions due to the lack of manufacturing in the US.
why don't you ask the manufacturers how things are going right now? Shit's pretty bad all around the globe.
trillions of trillions of world wide debt may have something to do with that. congratulations bankers, you've successfully reached peak debt. the entire world is now your slave.
reality is, there are too many people and not enough jobs for them all. and, those jobs are dwindling every year. manufacturing is almost entirely done by robotics. And just wait. All other occupations will eventually fall to robotics / computers as well. we're all being made obsolete.
Not all immigration is "low end"…or are you not familiar with the H1B Visa program? I invite you to Northern Virginia, Disney, Silicon Valley, etc. Lots of good paying middle and high-middle class jobs now going to Indians, Pakistanis, Chinese, etc.
In addition, those "low end" jobs used to be filled by high schoolers, those who couldn't afford or didn't want to go to college after high school, those getting back on their feet, etc.
Also, many of those "low wage" jobs were the way one got their "foot in the door" so they could advance to higher skilled and higher paying jobs.
The United States has spent the last 60/70 years gutting the middle class by importing cheap labour, exporting high-paying jobs, and de-incentivizing labour for the native population...and this wasn't all at the low end.
No worries. Bernie Sanders will fix this problem. He's the new and improved Hope and change. We just need a few moar immigrants.....
His popularity is truly amazing. After nearly 7 years of Obama-rule you'd think people would wake up to the fact that socialism/fascism isn't working.
But NOOO! they want to quadruple down on THAT guy.
Full Bore Socialist, or Massively Corrupt with Socialist pretentions, there actually is a difference, although I'd prefer not to have to pick between the two...
Exactly!
His supporters are mindless fucks bent on keeping the dream alive by continuing to dig the debt hole.
bernie sanders was fucked up 10+ years ago, it is a testement to the fucked up mindset of some in this country that he is now being exhalted.
I just laugh (politely) at people who preach the Bern. When asked my opinion of him, I'll then tell them that he is the only candidate whose intentions I trust, but then I point out how the road to Hell is paved with them, as it is impossible to control everyone for their own good.
Next, I add that even if it were possible, TPTB would collapse the entire system by removing their fake props, and blame the whole disaster on him (same as with Ron Paul in '12).
When people are wholly dependent upon the scam du jour, there's no escape path that does not include unimaginable levels of human suffering.
TPTB are seeking to balance infinite US money printing (inflationary) with infinite US immigation (deflationary to US worker wages)....TBTP views higher wages as an inflationary....
I know that people in "some" spots said things were going fairly good for a while.. (like Houston)
Here in Michigan.. Everytime i hear the MSM talking about that RECOVERY Horse Shit i Get Pissed off.
WE ARE IN A DEPRESSION.
Not all of Michigan, Oakland County is booming!!!
Ottawa County, Michigan is kicking ass as well. In fact, west Michigan is one of the fastest growing areas in the country (cleanest dirty shirt?).
Of course, those spots were mostly due to the financialization of the energy sector, which as Mises so eloquently pointed out, is the final stage of a crack-up boom as unsustainable hot-money flows from consumer goods into the capital goods industries, as they respond to the false signal of a true increase in demand.
So, once commodities and energy blow up, it's fucking game over.
And we (not they ^) have just started on our decent to join the global working class. Being equally poor is considered reaching social equality. Not "being" is the next step in post equality. They ^ reach their objective.
Propganda only works so long. DIE BANKERS DIE!
recoveries don't have 60 million americans living in poverty with the lowest labor force participation rate in 35+ years
Income no longer comes from working a job.
It either comes from the government or from investments.
In some cases, like real estate, one invests to get payments from the government by renting to people who derive their income from the government.
WHAT A WONDERFUL PARADISE WE HAVE CREATED.
or a digital printing press.
Once the marginal utility of debt went negative, rent seeking is all that is left.
I don’t live in the US but I visited my relatives who live there earlier this year and what shocked me was the complete disappearance of normality.
1) When a new subdivision area goes to sales, all the units get snapped up immediately by buy to let landlords, who have pushed the prices so high that homeownership is now beyond reach for the vast majority of wage earners.
2) For those who can afford to rent a place in a decent neighbour, most of them are gov. employees or healthcare professionals, i.e. people whose jobs are not self-sustaining but are sustained by other people’s taxes. It’s almost impossible to find someone who runs a small business or works in a factory and being prosperous.
3) Many malls have so few customers (evening during weekends) that if it had always been like this then they would never have been built, the scale of decline was obvious to me even as a visitor and it was saddening to see so few shoppers wandering among so many aisles
Can't have broad-spectrum income growth without large-scale, upward mobility-providing industry to underpin said growth. And that would mean broad-spectrum manufacturing of real goods for consumption & export. And since there is no sign of that coming back anytime soon, poverty, crime, eventual famine and wide-scale die-off from highly abnormal forward-pulling consumption and the resultant population boom that it has spawned worldwide over the past ~30-odd years, seems to be what's in store.
America lost faith long ago. All that remains perception and illusion.
My immediate thought is, "who the hell were they talking to in 2014 that thought shit was getting better?"
Why, desperate Hopium addicts, of course.
And so the long wait for higher incomes is coming to an end as Americans give up and sink back to the un-double seasonally adjusted wreckovery, of only for 99% of the population."
And yet, they do not rise and demand an end to the warping games...
Folks, it'll get better when WE damand better, and not a minute sooner.
The Congress should've been completely turned over at least once, and the president, for all he's done, should've been forced to resign.
Serious consequences should've already been visited upon those (western corporations, Wall Street sharks, and most certainly, Fed heads back to Greenspan), who either caused this disaster, or who profitability manipulated it.
Each day, this becomes more a problem of our OWN inaction, and less one of waiting on those who wrecked us to now fix us...
...if they coulda, they woulda.
Start raising hell about it.
m
At this rate people will soon be rioting on the street ... unless if another 911 style attack conveniently happens and gets the public distracted, but then again I am sure IS won't turn on the US just like al qaeda did and no steel reinforced buidling can collpase on fire.
What do you mean if?
The only question is when.
We are witnessing the results of circa 3 decades of US economic policy- Tax cuts of the wealthy (Reagan); Job-outsourcing (NAFTA), financial deregulation (repeal of Glass-Steagall, Commodity Futures act of 2000) (Clinton, Sen John McCain of Keating 5 fame, also a big supporter); More tax cuts for the wealthy, followed by taxpayer funded $ multi-trillion wars in the ME (US/NATO war theater extends from the Levant, to Caspian Basin, Persian Gulf, China Sea, Indian Ocean, Horn of Africa (war on Yemen), the Maghreb, to Eastern Europe and Russian border) and taxpayer funded $ multi trillion bank bailouts (aka QE; Bush II, continued under Obama).
Where has this QE money gone? Rather than being used by businesses to invest in new plants and equipment and create new jobs, this money has inflated asset prices, creating bubbles in: 1) stock markets- large corporations have used ultra-cheap QE funds for stock buy-backs, which reduces the number of outstanding shares temporarily increasing share prices; now unfortunately, these very companies have saddled themselves with more debt and stock which is falling in value; and 2) “trendy” real estate in SF, NYC, Boston. As recently reported in ZH, the new CFO of Google recently bought a house in Palo Alto for $30 million. This money has also gone into (and then exited) emerging market economies, resulting in economic disruptions in Latin America (Brazil) and Asia. Exhibit A of global economic distress is crashing commodity prices, due to slack demand (working people do not have sufficient purchasing power because unemployment is high and wages are stagnant/falling). Indeed, this is the reason why Caterpillar is having severe financial problems.
The economic problems facing the entire world are structural in nature and a result of skewed wealth distribution- the top 1% control increasing amounts of wealth, while the remaining 99% are seeing their jobs disappear and wages decline. We cannot have economic growth unless working people have more disposable income/ purchasing power.
Are you implying this is a bad game plan? Maybe if we repeal all the income and "death" taxes on the 1%
we can spur economic growth. Additionally, if we just give the 99%'s tax revenue directly to the 1% to
do with as they please, (cutting out Congress and the Pentagon) we can catalyze an "Murkan renaissance.
The social contract is broken. The existing system does not benefit the masses. It's time for the masses to burn the system down. If there's no benefit then tear it down. The people must revolt. Start with hanging all traitors.
de Rothschild Bank owes me $30 trillion USD @ 28 per cent per annum. My income growth seems to be doing quite well IMHO.
Keep the faith! EVERYTHING is not all BAD.
http://www.theonion.com/article/study-home-rotisseries-only-american-tec...
The American citizenry needs to realize that we've had immense income growth during this "recovery".
If they would only be patient and allow it to wend its way through the system, soon all boats will be lifted.
The economy doesn't turn on a dime, because the dime is in an offshore account, and we've got to wait
for it to be spent in the US to spur money velocity. If the, appropriately labled (by Phil Graham) whiners
would just pawn grand pappy's pocket watch, or dip into their 401K, shut the fuck up, and bide their time,
happy days will be here again. Brought to you by Shmuley's Pawn Shop, we're here for you!