Mike Krieger: Where Food Stamps Go to Die

Tyler Durden's picture

From Mike Krieger of Libertyblitzkrieg.com

Where Food Stamps Go to Die

Anyone who has the power to make you believe absurdities has the power to make you commit injustices.

No snowflake in an avalanche ever feels responsible.

Common sense is not so common.

I have never made but one prayer to God, a very short one: “O Lord make my enemies ridiculous.” And God granted it.

In general, the art of government consists of taking as much money as possible from one class of citizens to give to another.

The sovereign is called a tyrant who knows no laws but his caprice.

All murderers are punished unless they kill in large numbers and to the sound of trumpets. 


                  - All Quotes by Voltaire


Where Food Stamps Go to Die

We all know the economy sucks.  We all know we are headed in the wrong direction.  We all know our leaders are corrupt, immoral, greedy and violent.  You don’t need me to tell you that.  One thing that I have noticed recently while watching the financial markets is that despite the fact most stocks charts I pull up look awful, the major indices continue to hang in or grind higher.  While it is not new news that a few large cap stocks are holding the major averages up, I want to focus on one in particular.  Wal-Mart.  Yes we all know Wal-Mart.  Everyone has an opinion; whether you love it or hate it.  In this instance, I’m not so much interested in the company itself, the stores or disturbing images of some of the people seen shopping there.  No, in this case I want to take a look at the stock and ponder what it tells us about the state of affairs in both the U.S. and the global economy as a whole.

Wal-Mart’s stock is up 14% YTD, which is triple the return of the S&P 500.  The stock also packs a dividend yield of 2.3%, so the total return is even better.  In the last month or so the stock has become a real powerhouse as you can see in the chart below.  Crushing any and all shorts under the weight of its rapid appreciation.


Wal-Mart Three Year Chart


I think the above chart, in particular the move in the past month or so, speaks volumes to what is happening on a macro level.  First, from a purely flow of capital perspective, the U.S. economy was the last one to hit recession (most money managers still have no idea).  With Europe in a situation where monetary and political chaos appears likely here and now (and inevitable ultimately) and the BRICs in total free-fall, we have seen a rush into perceived safe havens.  We all know about treasuries and bunds, but at some point people don’t want to continue to funnel money to instruments yielding negative real returns.  So what has apparently happened is global money managers have been allocating more dollars to very large cap U.S. shares as an alternative to treasuries and bunds.

There’s more to it of course.  Nothing exemplifies the ghetto status of the U.S. economy more than the success of Wal-Mart in the face of the ongoing destruction of what was once a vibrant and strong middle class.  In case you missed it, Marion Nestle, Professor in the Department of Nutrition, Food Studies, and Public Health at NYU, came out with some interesting tidbits regarding the food stamp program.  One of them is extraordinarily disturbing.  She shows that Wal-Mart’s gets as much as 25% to 40% of revenue at some stores from food stamp dollars.  This says it all folks.  Food stamps are or course the perfect business for Wal-Mart and JP Morgan, which as I pointed out previously makes a lot of money running the program and keeping the populace in perpetual serfdom.  Meanwhile, guess what another of the best performing stocks this year is?  Corrections Corp of America, ticker CXW, up 41% YTD!  Guess what they do?  Yep, you guessed it.  They lock up the serfs that get out of line.  This is the Bloomberg description of CXW.

Corrections Corporation of America provides detention and corrections services to governmental agencies.  The Company owns correctional and detention facilities in the United States and the United Kingdom. Services include design, construction, ownership, renovation, and management of new or existing jails  and prisons, as well as long distance inmate transportation services.

There you have it folks.  What sectors are leading the American economy in the “recovery”: Food stamps and Prisons.  They are actually perfectly complimentary.  If the food stamps don’t work the prisons will.

Meanwhile, in the real economy we have the latest earnings blowup.  Ryder System, a company involved in the leasing, rental and logistical business of trucking lowered its forecast and the shares were smashed.  Too bad you can’t lease a truck with an EBT card, although who knows, that might be in the next stimulus package.

Ryder Three Year Chart.  Thanks for Playing!

The global economy is currently staring into a cyclical recession in the midst of the biggest structural debt and derivatives ponzi scheme that mankind has ever witnessed.  The desperation to keep things looking decent into the election continues at a frantic pace and now there are only four more months left.  As I have said before, if they do not allow pressure to be released until after the elections the comeuppance is going to be way more awful than I care to think about.  Prepare accordingly.

Peace and wisdom,


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Bill D. Cat's picture

Welcome the next contestant of Running Man , Tyler Durden , .... anyone got a pen ..... use my back to sign .

BKbroiler's picture

If the food stamps don’t work the prisons will.


Pladizow's picture

You forgot: "Everything is fine today, that is our illusion" - Voltaire

BKbroiler's picture

“The illusion of freedom will continue as long as it's profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.” 
 Frank Zappa

Marginal Call's picture

Private prisons are Arizona and Brewer's cash cow.  Those laws they keep coming up with there...yeah, they are for profit.

veyron's picture

I'm waiting for "Food Stamps for Gold" ...

vast-dom's picture

It's actually quite the opposite as the gov will never allow foodstamps to compete with their very own gold grab hedge. you'll be waiting a long ass time.

AldousHuxley's picture

that's why I said give the poor government cheese and bread. let rednecks know that they are on the government dole, so they don't go protesting at tea parties.


otherwise welfare is just subsidy to corporations who end up being subsidized.



healthcare is just subsidy to hospitals and pharma and doctors. if government wanted poor to have healthcare, they would lower the cost of care and insurance by introducing competition.

mjcOH1's picture

I think you'll see legal food stamps for pot long before food stamps for gold....except possibly for goldschlager.

A Lunatic's picture

Linkin Park - 


Skip ahead to the two minute mark for a concise description of my thoughts on today's news in general.

Buck Johnson's picture

I know, that was good.  You either take the foodstamps and shutup or go to prison and work for prison industries for 2 cents an hour.

vast-dom's picture





azzhatter's picture

There are options. I am looking at Panama, Ecuador and Malaysia. None of these are better now but they are struggling for more freedom while amerika is willfully giving theirs away

CH1's picture

There are real advantage to being a foreigner. You are exempted from many of the local thefts and requirements.

?Me? I'm just passing through - someone else owns me."

john39's picture

no place to run, this is going global.  dig in and fight.

CH1's picture

You miss my point: There is a big difference for being a registered surf inside his owner's pen, or a foreigner just passing through.

The traveling serf is generally hurt far less than the serf at home.

Cthonic's picture

Dhimmi, apostates, and kuffar (together 99.2% of Americans) might want to do some extra research on Malaysia.

Joseph Mother's picture

Drama Momma.  Just tell everyone you meet that you are German and you'll be fine. 

potlatch's picture

ya know something?  a lot of time all caps is just such a tedious and sure sign of stupif stupid stupid.  but for some reason that seemed so well said.

JohnKozac's picture

I don't go to Walmart anymore. To dangerous at night and too much Fatness during the day.


Ace Ventura's picture

You aren't kidding. I still go there occasionally, but I have to really steel myself to deal with the absolute hordes of sub-humans that crawl/slobber/bobulate within. By no means do I imply that everyone that goes to Walmart is of that ilk, but the growing majority are. You can occasionally spot another semi-likeminded individual while there, as they too have the look of someone who is just trying to make it through the zombie hive and still retain a shred of their sanity.

If it's not the hulking gelatinous blobs of crushed-flip-flop sporting anglo-trash, it's the ghetto-fab wilderbeasts or the growing tribal squads of vato families.....all pushing cartloads of stuff that I know would add up to an entire week's salary for me. How do these creatures pay for the rest of their living expenses, or are they all upper middle class denizens in disguise?

Not trying to offend anyone, but you guys get my drift.

Ayn NY's picture

The upper middle class do their bargain shopping at Target. What you're seeing is the real deal. Walmart at night is even more frightening.

OneTinSoldier66's picture

Fear is the mind killer. -Dune

cherry picker's picture

Consider that new hires at Wal Mart were given pamphlets how to apply for food stamps, or so I read a year or two ago, it is a perfect circle, government subsidized employees serving government subsidized shoppers.

Cathartes Aura's picture

WalMart does indeed take advantage of gov't bennies, aka "taxes collected from citizens" - in more ways than you can imagine - plenty of links, here's one to get the curious started,


cbxer55's picture

Our daughter started working at Wally World a few months ago. Yup, got the food stamp pamphlet. What kind of place is it that they pay so low they encourage their employees to go on food stamps? Horrible.

cherry picker's picture

When you think how much top management is bringing in, wouldn't it make more sense to level the playing field a little, pay the guys a few million less, the people on the bottom a few dollars more and there would be no need for food stamps.

narnia's picture

If Walmart does not survive the global bankruptcy, many millions of people will starve to death.

Food stamps don't bother me at all (it's the other $6.4 trillion being wasted). The current roster of recipients may quadruple at or near the reckoning.

Ayn NY's picture

Food stamps are the modern day soup lines and a sneaky way to hide the depression.

Diogenes's picture

You don't get to be as big as Walmart by giving  away money. You have to have an eagle eye for a profit, a way to save money, a way to get things cheaper, a way to make your operation more efficient. Even when he was a billionair Walton delighted in finding a way to do things a few pennies cheaper or a few seconds faster.

neidermeyer's picture

What makes it doubly funny is that WMT takes out "key employee" insurance on everyone ... right down to janitors as a tax dodge... while they are encouraging them to take food stamps...

ProtectiveFather's picture

Can you provide a link for that claim? That makes no sense, unless maybe they own the insurance company. Even then it doesn't really make sense.

NumberNone's picture

WTF??  I thought you were crazy but a study in Ohio show that taxpayers are subsidizing Walmarts low prices by providing government support of their employees.  I've never been a fan of Walmart but this just pushes me over the top.  I want to kick their smiley face in the nuts.


rbg81's picture

This article does not surprise me.  On the handful of times I've been to Walmart over the last few years, I couldn't help but notice the legions of dysfunctional, human driftwood using their EBT cards.  If it were not for the Government teat, I doubt that many of these people could survive through legitimate means.  The worst part is watching the poor cashiers take absuse from these people.  Of course, maybe the cashiers get food stamps too.  Reminds me of the scene in "The Stand" where Randall Flagg welcomes his new followers just before Trashcan Man shows up.

Marginal Call's picture

They end up in the shitter.  Oil -> Plastic -> EBT Card -> Food -> Intestines -> Sewer treatment plant.


Pay for it going in, pay for it going out.

daveeemc2's picture

Almost .... You missed some steps: Sewage treatment plant produces sludge, which is trucked to a local farm field where it is applied to the soil. Then, cows graize the grass grown there, or, soybeans, corn or vegatetables are grown on the "honey" enriched soil. Google sewage sludge. Ya, like it or not, food stampys are shitting all over you in more ways than one.

cynicalskeptic's picture

NEWSFLASH - That huge growth in Food Stamp recipients has come from former MIDDLE CLASS, now unemployed (and usually WHITE) Americans.  

As long as we keep shipping jobs overseas (and bringing in cheap labor) in an endless pursiuit of the cheapest possible labor costs (welcome to the new indentured servitude!) government will strain to keep the unenployed from getting desperate enough to take to the streets.  

REAL unemployment has exceeded the 1932 level of 23% - long term unemployment and food stamps are the only things keeping the apple sellers off the street and Okies off the road.  With thousands squatting in underwater mortgage houses for months (years), living on foodstamps and unemployment we hgave our own version of Potemkin VIllages all over the US.  

world_debt_slave's picture

I have a step-brother that works for Wal-mart, quite some time now, but he is quitting. Wal-mart is automating alot of the jobs there.

Uber Vandal's picture

I doubt that the people who use "self service" check outs realize that they are providing FREE LABOR to the stores.

Much like credit card companies speak of deadbeat customers, yet never mention how the retailer needs to pay to have the machines, and pays a percentage off of every transaction, and of course, all of the various fees that the credit card company can dream up or make up as they please.

Once everything is outsourced and/or automated, and we have ZIRP and/or NIRP 4EVR, the future is going to be very interesting indeed.

CaptainObvious's picture

This is why I don't use those fucking things.  In any store.  My thinking is that if I wanted to scan and bag groceries for a living, I wouldn't have done so for four years to pay for college so I wouldn't ever have to do it again.

BeerBrewer09's picture

I always find money that people leave behind in those things. Plus it's easier to scam them with coupons. pwned.

yochananmichael's picture

I dont have time to wait behind some lazy ebt parasite who wont bag their own groceries. 

 we need to bring back corvee for these parasites.

world_debt_slave's picture

yeah, In my soon to be non-business, I deal with point of sale systems and also a credit card dealer. I used to offer credit card services with my systems. It is cut-throat between credit card proccessors to offer lower merchant rates. But yeah, a bar customer long ago was mostly cash business but over the past few years or so, most  all are credit and debit card transactions. They pay approx. $1000 or more a month in merchant fees.

It was nice though gettig a commission from the credit card processor every month on the merchants sales. I saw a trend when I started getting my commission from two cilents, made astounding commissions up until late 2008 until present. I had to take a 50% cut on my commission to keep their business. But until recently someone has gotten their business.

yeah, I used to be a bag boy in my teens before joining the US Navy. One time had a woman come through with a see through shirt on and no bra. Guess who took her groceris out to her car? = )


Max Fischer's picture



I think it's a huge stretch to look at two stocks, then claim that their performance is a mirror to society as a whole.  

I could also show you the impressive charts of both Apple and PetsMart and then claim that Americans are now eating bird food and getting their haircut by dog groomers so they can afford iPads.

You can take any two stocks you want and weave any tale you wish.



BKbroiler's picture

that's true, but coupling a 41% rise in the largest prison complex and the simultaneous rise in food stamps is fair game.  It's like whatshisname said, we have two americas and two economies.  One is prison and foodstamps and the other is Imacs and ETF's.  

Sancho Ponzi's picture

Max: 'I could also show you the impressive charts of both Apple and PetsMart '

It's PetSmart, not PetsMart, not to be confused with WalMart.