The propagandistic exhortation that we all need to need to learn to love or at least accept the crappy economy known as “the new normal” is starting to wear a bit thin. One of the things that has allowed the punditocracy to pretend that “the new normal” really isn’t all that bad are various myths that they get investors and sometimes the broader public to believe in succession or better yet simultaneously:
1. We are in a recovery. The more candid in the economist classes will admit this is a “statistical” recovery, weak enough on enough dimensions so as to strain the definition
2. Everything is cyclical, this too shall pass. Not much comfort, say, in Rome in 476 AD. A subset is “Housing will bottom in 2012, and things will get much better then.”
3. Corporate earnings are strong, the Fed has your back, so as long as the stock market is OK, the economy really can’t be that bad
I don’t want to overdo what I call “mother in law research” which is basing your opinions on observations in your immediate environment, but the flip side is storied investor Peter Lynch was a great fan of precisely that sort of not-very-public intelligence. I’ve had two sightings in the last week that suggest the economy is trending downward more strongly than most experts believe.
Airlines are canaries in the coal mine. They are chronically so close to bankruptcy that they have to do what they can to preserve profits. And their price structure promotes forward bookings.
I don’t fly all that much. I do go pretty frequently to Birmingham, Alabama, on a nonstop on Delta. It used to run three times a day. They eliminated it briefly during the worst of the crisis, then restored it ex Saturday. It had the old schedules as of Columbus Day weekend.
I went looking for flights around Thanksgiving, and they’ve virtually eliminated the nonstops. It doesn’t run at all most days and when they offer it, it is only once or twice a day.
Similarly, on October 2, I booked a flight to Austin on American for early November. There was a nonstop once a day each way, and the time worked for me on the outbound. I learned yesterday that they’ve eliminated those flights and rerouted me via Dallas Fort Worth.
One incident like that might be route specific, but two on two different airlines suggests a meaningful cutback in travel is underway.
My admittedly idiosyncratic datapoints align with other stories today. I’ve been skeptical of the view that consumer credit stress was on the mend, given how high unemployment is and how many firms have announced cutbacks (and that’s before you get to state and local budget, and therefore job, cuts). As we’ve indicated, many consumers are so close to the edge that any glitch in their household income or unexpected expense will put them in a crisis. As we indicated in a recent post, 35% of American would miss their next month mortgage or rent payment if they lost their job. And the people who indicated they had no emergency reserves weren’t lower income; they were spread across all income cohorts.
So I was not surprised by the Financial Times lead story today, “Fear Over US Mortgage Delinquencies.” Not only does it describe an increase in missed mortgage payments, but it also says some banks are seeing deterioration in payments on other types of consumer credit:
The banks’ third-quarter results were hit by expected declines in investment banking, reflecting turbulence in global markets. But the reports also revealed weakness in the consumer side of their businesses – with mortgage delinquency numbers suggesting that record low mortgage rates and government loan modification programmes are failing to help a large swathe of homeowners.
Anyone who thought “government loan modification programs” were doing much has not been paying attention. The mods are too few and too shallow to have much impact. But if you listen only to Administration PR, you might be fooled for a short while. Back to the article:
Wells said delinquencies of more than 90 days in its main portfolio of consumer loans – including mortgages and credit cards – rose 4 per cent to $1.5bn, the first increase since 2009. Early stage delinquencies in its retail business remained flat at 6.13 per cent after falling for three quarters. The bank increased its provision for consumer-banking losses for the first time in two years…
Citi said the percentage of mortgages that were 90 days delinquent rose for the first time in almost two years – from 3.87 per cent in the second quarter to 3.88 per cent in the third.
John Gerspach, chief financial officer, said the bank was seeing “re-defaults” on mortgages that had been modified to make them more affordable. “We could begin to see increased delinquencies and net credit losses,” he said.
Citi cut bad loan reserves, but said that was due to improvement on credit cards rather than mortgages. “We haven’t been releasing reserves against the US residential mortgage portfolio,” said Mr Gerspach. “I would look at that as still being the most significant risk that any US bank currently faces.”
JPMorgan last week increased its provision for losses on consumer loans to $2.3bn from $1.9bn in the previous quarter. JPMorgan said delinquencies on goverment-insured mortgages hit $9.5bn, up from $9.1bn in the second quarter and $9.2bn a year ago.
“The residential mortgage problems are unprecedented,” said Gerard Cassidy, analyst at RBC Capital…He said the problems were no longer in “subprime” but “prime” mortgages.
Capital One, among the top six US card issuers, reported rising 30-day delinquencies in June and July. “Defaults on credit card debt are certain to rise from here,” said James Friedman at Susquehanna Capital Group.
Note that Capital One is generally seen as a particularly shrewd manager of credit risk.
China posted worse than expected growth results overnight, which led to declines in all Asian indexes, with the Hang Seng off 4.2%. Again, if you’ve been paying attention, even though September US retail sales were good, retailers have been battening down the hatches and ordering modestly for Christmas. Shipping volumes are down, which has to affect the Chinese economy, as has its interest rate tightening. Alert readers will recall we’ve cross posted some sightings from MacroBusiness on how the usually busy Golden Week real estate sales season was a bust in many markets.
And the mood in Asian markets was not helped by visible signs of disagreement between France and Germany. Eurozone leaders have promise Yet Another Big Plan to Fix The Eurozone Mess Once and For All as of the next G20 meeting in early November. The deadline for unveiling the plan was first November 2, then October 31, and has for a bit been October 23. Per Bloomberg:
Europe’s options for overcoming the debt crisis narrowed as Germany doused expectations of a breakthrough at this weekend’s summit and central bankers balked at extended bond purchases.
European stocks fell for a second day after German Chancellor Angela Merkel’s office knocked down what it called “dreams” that the Oct. 23 summit will be the last word in taming the crisis. Christian Noyer, head of France’s central bank, ruled out a ramping up of the European Central Bank’s bond-buying program as part of a multi-pronged strategy to shield countries like Italy.
This is not pretty. It isn’t just that the Germans were nixing the this weekend deadline; they are managing down expectations when Mr. Market wants more, not less. And German leaders are not even on the same page, which is even more disconcerting. Schauble is touting bold action while Merkel is decidedly cautious. And pouring cold water on the one way to finesse the political obstacles, of having the ECB monetize the debt (which is what the endgame is almost certain to be unless the officialdom refuses to stop the train wreck in motion) raises the ugly question of what if anything they propose to do instead.
And in the background, we have the Thanksgiving time debt ceiling drama scheduled to come to a head, since the two parties seem hopelessly far apart.
As I often say, it would be better if I were proven wrong, but I recommend against betting on it.
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How can anyone with little or no income pay for anything? It’s so heartening, sarcasm alert, that the president thinks job loss is a good thing. Technology and all that.
Real Americans borrow big! Fake it ’till you make it!
*yanks shirt over head ala Cornholio*
“It’s gonna be big…BUT YOU GOTTA BUY NOW!”
No, it’ll be okay. We’ll all run *tiny classified ads* in thousands of newspapers across the country, and we can make as much as *fifty thousand dollars a week*.
Then we can pay our mortgages.
I got a chain letter yesterday – the poor schmuck paid first class postage to send it to me.
LOL- the cornholio mental image got me..
Where have you been? The Prez is ERNEST on fixing the jobs problem. Pass this jobs bill, pass the bill, pass this bill now. Those *bastards* won’t pass my bill. It’s not my fault it’s their fault.
Jeez, what do you want from the poor guy. Sure, some might say it is far too little, far too late, but he’s trying so hard now it makes me want to puke.
He is trying, isn’t he.
Rex what do I want? WHAT DO I WANT!
Well here it comes you like it or not. We can blame past administrations and we can blame who ever we like. This administrations plan will not solve the employment problem. This plan if you read the darn thing is another state bailout and more infrastructure jobs that will not happen. Why do you think that even the president’s own party would not vote for it? Well this was nothing more then a semantics game for more of the same ole crap on the taxpayers back.Nothing more.
There comes a time when everyone including the states have to deal with thier spending problems and as long as this guy lies to the people and nothing changes the problems become larger.
Spending on the government side of the economy is the problem and it needs to end so we can actually have a recovery. Until we get our dose of real medicine nothing is going to change. You see you cannot spend your way out of debt nor can the Fed create jobs. Thus the root of the problem. Until some people realize this we are headed for some dangerous times. The tax base is shrinking and the country is running out of other peoples money. Nothing new here historically governments fail because they promise more then they can deliver.
Spending on the government side (federal, including a bailout of the states) is the only solution that will work. We need a lot more of it, now. Only targeted at ordinary Americans who need jobs and debt relief, not people who already have huge amounts of money.
Sounds like a great plan.
Now, let’s see. Who OWNS the government? Oh yeah, the people with all the money now. Who gets to decide where the money will be spent? Oh yeah, the people that own the government. Looks like the smart people with all the money bought the government so they could get even more.
Gotta hand it to them people with all the money, they sure know where to find more of it.
OK, let’s test the proposition that government spending, and ONLY government spending, is the thing that will save the economy. As the first hypothesis in our test, lets use Krugman’s analysis that all previous government spending efforts, in the US and Japan, were NOT ENOUGH.
The testing method is simple: Issue T-bonds in the amount of US $10,000,000,000,000. Ten Trillion Dollars. Issued over the period of a year, with commitments to put the cash in the hands of state and local governments within 2 years. For private industry, no wimpy loan guarantees, but direct grants.
This would be the penultimate test of Keynesian thought. I leave the consequences to the reader to determine.
Not Keynesian, MMT. And the consequences might well be economic recovery.
[L]et’s test the proposition that government spending, and ONLY government spending, is the thing that will save the economy.
Already been done, dear chap. WW2. Worked like a charm.
Issue T-bonds in the amount of US $10,000,000,000,000.
No need to issue debt at all, just increment bits at the Fed. But is it possible $5 trillion per annum would be a trifle too much for the economy to absorb? You wouldn’t want your little pie-in-the-sky exercise to lack credibility. Ahem.
OK, let’s test the proposition that government spending, and ONLY government spending, is the thing that will save the economy.
——————————————————–
This is my question, Isn’t this how we got into this situation? By spending more and more on government over the last 30 years. I mean I can remember when Nixon proposed a budget with $10 billion deficit and people just about had a cow. Now we have $1.8 trillion or something like that.
Don’t we some time have to say — it isn’t workingggggg!
I’m not sure we can get THIS government to target the spending to the right places, given the present level of corruption, but spending the last 2-3 decades sure hasn’t been invested well. Yes, we’ve spent trillions of dollars but it hasn’t been creating jobs for American workers, or creating an environment that encourages economic prosperity. Instead we’ve spent the money overseas on foreign wars and maintaining military bases across the globe enriching other economies, subsidizing multinational corporate interests who have invested their capital and created jobs on foreign shores, created tax, trade, and domestic policy that enriched the few at the expense of the rest, allowed our infrastructure to deteriorate, the training and education of our workers to deteriorate, and cut investment in research and development.
Ten years ago, the US had the overwhelming majority of the global green energy market and the Chinese had only a small market share. Today those shares have reversed. Whether one agrees on the eventual utility/efficiency of green energy for the US or not, the reality is that green energy is a hot market at the global level and we ceded the market to China, at a time when we desperately need a manufacturing base. If one looks at military technology over the last ten years, one area where we have continued to invest, the progress has been mind-blowing. We have both terrestrial and airborne unmanned drones that allow us to enter hostile areas and complete missions without risking American lives. Within 2 years we are expected to have “exoskeletons” that soldiers can wear that turn them into the ‘six million dollar man’ with super human strengths and abilities. After WWII, the government brought us an interstate highway system and later the development of the internet that revolutionized how we communicate and do business. Many of our medical breakthroughs, eradication of diseases, annual flu vaccinations that save thousands of lives, new drugs, cancer treatments, have come only because of government research funding. When the funds are spent appropriately, the government can do great things. We have a tradition of being the leaders of innovation and I believe we still have the best minds and talent in the world. When it comes to creativity and complex problem-solving, we can run circles around Asians (who were technically proficient but seemed to have difficulty thinking ‘outside-of-the-box, perhaps a cultural thing, in my observations of the programming world where I lived that was 50% Asian).
Granted, our government has wasted a lot of money. But to say that means government can’t use money to create jobs is akin to saying that because our banks got overleveraged and deep in risky debt that blew up the last few years that they can’t be used for responsible lending.
Money as currently issued is private (created by the privately owned Federal Reserve Bank) and it is fiat (valued only at its current exchange value).
It’s just paper we value for what it can buy today. A wheelbarrow full of C-notes would ransom a King this week. Six months from now, it might get you a loaf of bread. It’s just private bank paper.
And this privately issued fiat money is debt. The Treasury pays interest on it, and so do we all. The interest accrues relentlessly to the top few percent of society and both Government and private debts eventually — inevitably — reach a point where they cannot be repaid. Ever. The universe won’t last that long.
Which is where we are now. Keynesian debt issuance hasn’t the impact it had in FDR’s day. It barely makes a splash, and what’s the point since it all just trickles up to the wealthy few percentile who already physically own most of the country and its assets. Issuing more private bank money just tightens the debt vise.
We need to phase out the Federal Reserve, and issue money as a utilitarian means of exchange straight from the Treasury. Government paper, Greenbacks, backed by the full faith and credit of the United States — not by Bernanke and Geithner.
Then government spending will do some lasting good.
Lincoln did it. We can do it.
But it will take absolutely overwhelming public pressure on the Congress, most of whom are members in good standing of the top 1% wealth holders. It will take a lot of pressure.
Come to think of it, it may take a very big stick, indeed.
Two Quotes from the above replies that are significant:
1. “Granted, our government has wasted a lot of money. But to say that means government can’t use money to create jobs is akin to saying that because our banks got overleveraged and deep in risky debt that blew up the last few years that they can’t be used for responsible lending.”
2. “We need to phase out the Federal Reserve, and issue money as a utilitarian means of exchange straight from the Treasury. Government paper, Greenbacks, backed by the full faith and credit of the United States — not by Bernanke and Geithner.
Then government spending will do some lasting good.”
1. I would disagree with you. TBTF banks exist for the benefit of their shareholders; mostly the 1% and elites, not “responsible” lending. Without that pre-fail in place, what would be considered “responsible?” Is there anywhere in the history of lending that it did not result in economic devastation, war, and magnification of power for the elites?
2. Paper is Paper. Any currency will last as a medium of exchange as long as it benefits the elite. When it no longer is a benefit, it will be jettisoned in favor of another that serves the elite. The 99% will get shafted, because the currency transitions are merely another vehicle of wealth transfer. Multiple competitive currencies are the individual citizen’s only hope; any monolithic currency system is doomed to capture and harvest by the elite.
Until we get our dose of real medicine nothing is going to change.
Real medicine like they have in Greece, where spending cuts made the debt ratio worse because the economy shrank and riots broke out in the streets?
Such medicine doesn’t lead to recovery, it leads to regime collapse and war.
Jeez Louise. Poor little Presi-DEBT OWE-bama, can’t get his stinking pretend jobs bill through Congress. Every time this President in Training needs some of our hard earned blood sweat and paychecks, he pleads with us poor American private workers, to help the TEACHERS, the FIREMEN, the POLICEMEN.. It seems like in every stimulous bill or is it now stimuli(INFINITY) bills, we are throwing money at TEACHERS, FIREMEN AND COPS. Hell, we might as well carry them to work on diamond and ruby encrusted thrones, and pay them every month with bricks of solid gold. We have been paying their bloated pensions,, sending their kids to college, and giving them ridiculous health care, while we worry about making out next house payment. We are definitely the step and fetch it crowd for this Carter-clone president. Come on guys, this oval office occupier wouldn’t know a job if he sat on one. Truth be told, I bet he was a pretty piss poor community organizer too. Obey The Pug.
I guess this was supposed to be a joke?
I’m really hoping I’m not the canary this time…going through HAMP was 8 months of hell followed by (now) 14 months of purgatory with two job changes in the middle.
‘Mother-in-law reserch’ is a great new term. I would like to borrow it, if I may (attrib credit).
The airline schedules in Europe don’t seem to have buckled yet, but train fares in the UK have risen above inflation. Of course, they are the most expensive in Europe, for various reasons (no subsidy for one, too little maintenance over the years for another).
A black canary in the coalmine?
Over the past few years I’ve noticed a steep decline in the number of black people flying, as a proportion of all fliers.
Maybe this is because, as a group, blacks are the first affected by a downturn in the economy?
“Mother-in-law reserch’ is a great new term. I would like to borrow it, if I may (attrib credit).”
Helene Meisler @ thestreet.com has a “mom asking about the stock market” indicator—when her mom calls and makes an unsolicited comment/question about the stock market it tends to mark an intermediate term bottom or a top.
Yves, are you sure American flew direct from NYC to Austin? I have been making that trip a few times a year for about 20 years now, and the only direct carriers I knew about were Continental and Jet Blue. Delta for awhile also flew direct. American always went through Dallas. If they did fly direct, I wouldn’t be surprised that they dropped the flight. Conti and Jet Blue together have 5-6 flights per day.
I hope you enjoy your trip, and please bring them some of NY’s rain!
Totally agree with your post by the way.
Ok, so they do fly direct. Or maybe did, post October.
Ok, from their website it appears to have been “seasonal” non-stop for this year from some date through 11/16/11, but yes they no longer have it if you try to reserve for early November.
Bruce,
You are missing the point.
On Oct. 2, I booked on a nonstop. American was then offering that flight for early November.
Within two weeks, they scrubbed it.
Demand clearly was less than they had anticipated as of October 2.
mid to late 80s aa flew dc-10 one stop,no change, aus-dfw-lga. they also flew 767s between aus and dfw. seems like a world away, today.
american is having problems recalling furloughed (some since 2003) pilots. only 20% are returning.
between the cuts, and the employment roller coaster ride, many of them are just finding something else to do.
Wow, that used to be a prestigious job.
to hear pilots talk, they are one step below god. in all seriousness, you’d be hard pressed to find a more dedicated and skilled bunch. it really says something so many would be throwing in the towel.
american is the only legacy with its defined benefit pension in tact. which is highly admirable, but it may kill them, considering all the other carriers either did away with defined benefit (traded that for 401k, or how about some airline stock?…you’ll be an ‘owner’ of the co!). Others just flat out jettisoned them in bankruptcy and taxpayers are now on the hook for them.
i imagine a lot of people are feeling the indignity and abuse that was heaped on the airline employees 10 years ago.
the top dogs’ pay, naturally, increased orders of magnitude during all this turbulence.
interesting fact (from the book Hard Landing); as a whole, and to date, the airline industry has never made more money than it has lost.
I’ve chatted with a lot of pilots, both young and more senior. My brother-in-law is a long term captain with one of the major carriers, flies one of the big Airbuses to the Carribean. The senior pilots still make good money and can work extra hours, up to a point, for extra pay. They can exceed $200K, depending on airline (been told Delta pays best). The junior pilots, the ones they’ve hired since the restructurings, not so much. They brought them in for a song and a dance. Some of the puddle-hopper pilots told me, like ComAir, IIRC, they were only being started around $40K, and were happy to find jobs. Pretty sad when you consider the extensive training required, basically all ex-military, as doing it privately is cost prohibitive. Though the commercial jets today will fly themselves, they even do landings on auto-pilot now. The military training is akin to special ops before you even enter flight school. I’d have quit before long. As my brother-in-law says, they want to make sure a pilot will hold up (to being interrogated as a POW, for example) before investing a couple million/couple years in flight training.
In support of the airline canary story, I offer the following experience. In early 1992, I was at the central control of the FAA in the Washington area. The guy escorting me looked at the screen with all the current planes in the air over the US and said: “I believe we have a recovery.” He basically notices an increase in the number of flights over the previous period of time.
The mood in Asian markets was not helped by visible signs of disagreement between France and Germany. And German leaders are not even on the same page, which is even more disconcerting.
A tantalizing ‘what if’ speculation is, what if New York Fed governor Benjamin Strong hadn’t died in office in late 1928 at age 55, a year before the crisis broke out? In his Monetary History, Milton Friedman conjectured that with stronger leadership, the Fed might have acted more decisively to inject liquidity and stem the catastrophic bank runs.
In the midst of crisis, overt disagreement among policy makers can be a recipe for panic. At the end of this month the ECB faces a leadership transition, as Trichet is replaced by Draghi. Meanwhile, last weekend, the G20 practically hammered the table demanding that Europe cobble together a leveraged EFSF by Oct. 23rd — OR ELSE!
‘Dreams,’ sneered Angela Merkel. ‘You people must be high.’ [Okay, I made up that last quote.]
Think like a criminal — how did US banksters cram their 2008 bailout down the throats of the KongressKlowns? Why, in their usual soft-pedaled, understated fashion, they pointed a snub-nosed revolver at a cute Golden Retriever and snarled, ‘HAND OVER THE LOOT, OR THIS PUPPY DIES!’
Why not try this in Europe? To bulldoze the ECB into wholesale printing requires a market selloff that will curl your hair. Hard to believe these wreckers would actually resort to such desperate measures, but I wouldn’t put it past them. For now, I am bug-eyed, foam-at-the-mouth, psychotic bearish. Let it bleed!
Problem is that Friedman’s analysis of the depression was hopeless. As we’ve seen today, increased liquidity does not lead to recovery as it cannot stymie the effects of debt deflation.
The very fact that the bank runs happened in the 30s might have given impetus to FDR et all to crucify the banking sector.
Exactly. Debt bubble requires transformational fiscal policy. Monetary policy is much less relevant, as it’s almost impossible to get that increased liquidity into the hands of the households with high marginal propensities to consume.
Well, #3 is basically true for the investor class. For the rest of us? Not so much.
B of A said that it’s mortgage interest income fell by 15%. There is very little new business in home sales to replace the contracts that are being paid off. The new business will be to finance homes at cheaper interest and at 30% discounts to 2006 prices. It’s going to be hard to find anyone with good credit ratings that can buy into the housing market these days. With the banks sitting on all those foreclosed homes they will be the new slum lords of the housing rental markets.
JPM
Copper is getting whackoed today.
http://futures.quote.com/quotes/quote.aspx?qmdirect=1&symbol=%2fHG%3aCMX
If the red metal falls below the $3.10-ish level it set in early October (as I expect it will), it’ll be another confirmation of an emerging global slump.
Yves, why are you going to Austin? Public event?
Speaking at a conference hosted by AmeriCatalyst, it’s supposed to be a really good conference if you are interested in the mortgage biz.
http://americatalyst.com/
one of my clients Yves, is a small business mens clothing store. completely dead this month. it started about the 3rd week of september. right now we are running 25% down from a year ago.
I don’t think anything will be done this year. The wise sages will let the great hand of the free market wave over xmas and then when everyone is completely devastated from a terrible xmas (sometime about may, actual talk will begin in february. they never do anything because they expect tax refunds to pump prime things as well.), some sort of pathetic attempt to discuss doing something to privatize more gov’t services and cut taxes will get tossed around. this will be sufficient enough to boost spending about .0001%, which they will consider good enough to do nothing. remember the faith and power of the confidence fairy.
PrimeX is showing signs of stress as higher value mortgage holders have stopped making payments, this is particularly acute in Calif which has large number of million dollar mortgage loans.
This topic morphs into the current protest movement which is narrowly focused upon economic issues while the government continues its military adventures without pause. The OWS movement implies that this is a lifestyle protest rather then a broad base indictment of our government and how it has conducted itself here and around the world very unlike what occurred in the 60’s.
red metal — speculators don’t know much about the Chinese inventory;;; they just con each other all the time, having successfully predicted 9 of the last 2 recessions so successfully, including the 2008 recession, when Copper was around $4/lb.
Who said anything about ‘predicting’? Commodity prices typically peak early in a recession, then drop precipitously. They are at best coincident, if not lagging, economic indicators.
The previous recession (Dec 2007 – June 2009, according to the NBER) presents a textbook example. LME copper fell about 23% during this recessionary period, although the peak-to-trough drop in 2008 was an eye-popping 68%.
http://www.lme.com/copper_graphs.asp
The red metal don’t lie, son.
What is so amazing is that the con has gone on as long as it has. For most Americans, the recovery never happened, the recession never went away.
We use all these numbers, stock and bond market prices, GDP, jobs numbers as stand ins both for how the economy and ordinary Americans are doing, but they are at best limited indicators and often they are deceptive. Stock markets have become untethered from the Main Street economic activity they are supposed to represent. The unemployment rate at 9% isn’t good but the real un- and under employment situation is twice as bad. It’s not a problem affecting 14 million but one of more than 30 million. You can see how far off the policy response has been when you consider that most policymakers would consider an unemployment rate in the 7%-7 1/2% range as good enough. That is they see this as mostly a 2-3 million jobs deficit, not that they are really doing anything serious to cover it, but even that is only a tenth or less of the real problem.
Then add in that Europe is falling apart, and China is looking at both the effects of the bubbles it’s been blowing domestically and the likelihood of an international downturn for its exports.
Finally, add in the reality of kleptocracy, that looting elites are running the world’s economic and political systems, that they have no interest in fixing any of these problems, that they will push things to a crash and then attempt to use their power and influence to loot the crash. I think that if people, the 99% everywhere, really began to understand the enormity of what is happening, the lies that have been told to them, the crimes that have been committed against them, protests like OWS would not be measured in hundreds or a few thousands but in the millions and tens of millions in our country alone.
Luckily for the top 1% – and the top 10% supporting the top 1% – the bottom 90% never figures things out.
They usually turn on each other when things get bad, and the top 10% is a nice buffer for the top 1% too.
Let us pray, “Forgive our debts, as we forgive our debtors”. Bankers need a little old time religion.
“Bankers need a little old time religion.”
In the old times, religion had their Inquisitors. They were fortunately replaced by AGs. Trouble is, Brotha Obysmal has ordered his AG to stay put whenever a bank could be involved in a sinful affair.
So a depression is coming. Period. Damn.
The end of the world is coming too. What matters is when.
It only a recession until the top 10% feel it.
Herman Cain is on CNN this afternoon, explaining how his 9-9-9 tax plan will benefit even the working poor. It’s that third 9, you see. The 9% national sales tax. That’s where an American family can win or lose.
Herman says your future prosperity all depends on whether you buy new or used. Buy used stuff and you pay no tax. Insist on buying everything new, and you pay sales tax. You won’t feel the benefit of his plan that way.
So be smart, and buy used stuff only.
There is an empty big box store in my town. I’m going to rent it, and sell smart Americans used gasoline, used heating oil, used propane, used electricity, used bath water, used food, used toilet paper, used medicine, used diapers — the list is just about endless.
If Herman’s right, I’ll prosper right along with my smart American customers!
YS: “Airlines are canaries in the coal mine.”
There use to be a thread on the old LATOC Forum devoted to jet fuel pricing, and members of the commentariate would refer to the airlines simply as, “the canaries.”
Too funny.
Seems to me Peak Oilers had “The Puzzle” — almost — filled in many years ago, whereas everybody else, still to this day, is in the puzzle preparation phase, still flipping their pieces over, and shit.
Note: The Dead Canaries; a good name for an up-and-coming Seattle-based grunge band, don’t you think?
A good rule of thumb for flying somewhere in Texas is that if you’re not going to Dallas or Houston, you’ll connect through one of those cities.
Also, you’ll be LUCKY to get a connecting flight that’s not a regional jet.
Southwest still has directs from BWI to San Antonio and Austin. Have gotten pricey of late. It costs me less to fly to London than to Houston or San Antonio from D.C. I like London better….
Anybody with brains understands that not only are we entering another downturn, but that we never really got out of the first to begin with.
We are rapidly consuming the earth’s fossil fuels and other resources in order to make a few people fabulously wealthy in digital fiat money terms.
A more absurd situation I cannot imagine.
a regular flyer, i have stopped all trips by air due to being subjected to the “enhanced” patdown. if i did to a stranger on the street what that TSA agent did to me, i would be arrested for assault. never again.
i’d wager another factor driving the reduction in flights is other similarly “enhanced” flyers saying never again.
I fly for Family Funerals only nowadays ever since the day I flew home from Iraq and was threatened by a TSA Guard with “no flight for you” back home because she didn’t like my “attitude”. This “attitude” (a frown with loud and very clear answers to her questions) occurred while she had my pants literally unbuttoned and pulled down 3 or 4 inches with a metal-detecting wand under my crotch while in line with other passengers. That was 6 years ago.
Up until 10 years ago I was flying 40 weeks a year for 12 years and it wasn’t bad. Now I dread every flight, including all 5 that I have taken in the last 6 years.
The canary comparison is obvious on many, many levels for me.
For what it’s worth, if you have the time, trains are the only civilized way to travel anymore. Who knows how much longer that will last.
All I can say right now is:
Buy US treasuries and hunker down cause the future is only going to get worse, much worse than the current one before the economy and country stumbles on a set of leaders who can find their way across the page on astute economic analysis.
http://finance.yahoo.com/q?s=whosx&d=t
Yes, flying is now so degrading that driving 1500 miles on routes I75-10-95 are a pleasure in comparison. I will only fly in cases of medical emergencies.
but the stock market is partying on. and it’s a leading indicator too.
The stock market is as much of a leading indicator that I am the Vatican Chief Accountant.
I among the very affluent ;however i depend on income from investments to derive my income,so i am doing doing just what Mr Bernacke wants.I am cutting out All discretionary spending.
I just can’t fathom printing more money into a completely lawless global financial predatory zoo inhabited by ever-fatter winners being anything other than a bad idea.
What we have is an IMMENSE money, as in income and savings, distribution problem that got that way over nearly 2 generation’s worth of bad excuses for reasons. We do not have a shortage of money, just of Hot Money to feed the Boys. We have a fundamental demand distribution, therefore economy-wide skewing problem that makes a hash of solutions that really amount to no more than a ratchet of “robustness” of Fed and Fed policy response. The Management places no value at all on what half the population can contribute here in wonderful Techno World and even less on what they think might be good for themselves.
So long as the answer is “yes” to everything Mr Market demands, we are headed over the falls.