06/12/09 thoughts

Here is a email and a response I enjoyed

Email:

Nico,

thanks for this post. It is, as you say, very touching. I know you've had comments about socialism, but, when you have time to read this long reply, this is what I have to say...

The second line about the guy’s job being shipped off to China touched a nerve. Yet while I agree with what is said here my experience is that some (maybe just a few) in the world today look to this and see “China” as the enemy, and indeed, the Chinese too. I say this because I had a nasty experience a while ago – I was in a line-up to pay for groceries and a woman asked me if Rebecca was mine or somebody else’s. I proudly – naturally – said she was mine; that Bridget and I adopted her from Jiangxi province in early 2006. I must admit I did not expect the response I got; that “The [Canadian] government is allowing our jobs to be shipped there; now you’re bringing them [the Chinese] here to take what few of our jobs remain.”

My initial reaction was to tell her go forth and multiply – although not quite in those words – but I held back and said nothing. After I simmered down I tried to look at it from her side. What she said was uncalled for, yes, but she must have lost her job to be so bitter to make a comment like that… which, in turn, got me thinking about the state of the world and why we are losing our jobs to developing nations.

The conclusion I came to was it was our fault - we have an overwhelming desire for more for less, even when we don’t need it. We want to eat our cake and still have it after we have eaten it. Not all of us, I hasten to add, but many of us to varying extents. Most things are made in China: China has low cost of living, lots of human rights infringements and blatant abuses, terrible working conditions, poor pay, and, as a result, can produce things cheaply. We buy them. We pay ten times (or more) the price it cost the supplier to buy them and, for us, it is still a bargain. And it is not just products: services too. Call centres are being shipped to India and the Philippines because labour costs are lower. Why? Because in today’s world, a company has to be hugely profitable to survive. Shareholders want big profits. And we are the shareholders.

Wal-Mart is a case in point. It is hugely successful. We shop there. Why? Because it is cheap. Because most of its products are from China. And who shops there? We do. We are the people who are contributing to our own downfall because we want more for less. But will I (me personally) stop shopping at Wal Mart? No. I want the things I buy. I may not need them, but I want them. Do I really need that movie? No. Do I need that rod, reel, Camping equipment that I bought the other day? No. But I wanted them, so I bought them.

To get philosophical, the world is in equilibrium, something that the Chinese worked out long ago with their philosophy of Yin and Yang. There is balance. When we make money, we take it from somewhere else: be it a person or enterprise. It is the same with jobs. When we gain a job from somewhere, usually it is because it has been lost elsewhere. So how do we stop it? Governments could introduce protectionist policies and stop the so-called free trade. Which means the developing nations will suffer, and developed nations will continue in isolation until inflation takes them over.

So what’s the solution? I don’t know. Human nature is to look after ourselves, not others. What if we turned it on its head? Not that it will ever happen, but what if everybody in this world had an instant and permanent mind-shift: instead human nature became looking after others to our own expense? As I said, not that it is likely to ever happen, but think about it. We, very quickly, would become equal. Instead of me looking after myself, I would have 6.7 billion people (less one – me) to look after. But instead of just having me looking after me, I would have 6.7 billion (less one) people looking after me. Is that socialism? I suppose it is. And socialism is fine if only everybody is equal and everybody wants it to the same degree.

And now for the bombshell - socialism is like a Twin Commander - its heaven if every part of the aircraft works in perfect harmony, but hell if one part breaks down.

God bless,

Andrew

Response:

That last line bothered me. Just a resonse.

Socialism is not like a Twin Commander of any variety. And even if it worked “perfectly”, Its evil.

Whatever the intentions of the people who take over a functioning society and socialize it, the whole thing is based on the idea that people don’t produce, they receive it form someone else. In other words, they take as given that there is some supply of wealth, a big pot of gold, that is being sat on by the “rich”, which can be “shared” by the government , and “that’s fair”.

The natural state of man is poverty. We only get anything because some collective “we” produce stuff. That “we” is ultimately the individual, because there isn’t anyone else who’s going to do it. Everything we get is because of the wealth that each individual produces. There is no pot of gold. Instead, people produce and sell a good or service to someone else, who pays them approximately what its worth.

As a software engineer for some years, I can attest that most of the time (almost always) people get back (on average) pretty much what they put in. Most of the time apparent “unfairness” comes from a failure to understand what the value is that one is produce. Case in point: when the German Democratic Republic fell, the CIA (and the DDR ministry of Industry) valued their economy at about 70% of the value of the German Federal Republic’s, on a per capita basis. They all based this on the ministry of industry figures which were in turn based on (pretty much accurate) reports of production at the factory level. By these estimates Trabant was creating more value than Volkswagen.

It wasn’t until the DDR fell that it became clear what the fallacy is: A Trabant is *not* a Volkswagen. In fact, the value of a Trabant when people had the choice whether or not to buy them was less than the scrap value of the metal. Every day Trabant workers would come to work, take perfectly good steel and reduce its value by producing a Trabant. They *thought* they were producing, but in fact they were detracting from the national wealth. The solution ultimately was to shut down Trabant. VW hired and retrained the workers and now they actually produce something when they go to work. In a capitalist system, a company (like GM) that produces inferior goods, or the wrong goods, will eventually go bankrupt. The stockholders will pay for their folly, and the workers will get rehired doing something more valuable. In a socialist system, the State pours more and more resources down a rat hole.

Socialism removes these signals from the system. Worse than that, it makes the political system rather than individuals choices the decision maker in the allocation of resources. This both makes poor decisions in allocation, but it also corrupts the political system.

Beyond that, it makes each individual a burden, rather than an asset. Ever wondered why every socialist state since the French revolution has murdered a major portion of their population? Simple. Since the State has to support everyone, and since in such a system output falls consistently, there comes the time when rationing is necessary. Since the State doesn’t know how to create wealth (modern socialist states have lived by imitating the inventions of the capitalists) it must shed burden. So, eventually, it is necessary to choose who will live and who won’t. Just consider the Obama administrations plans for “reducing costs in the medical system because we are spending too much”. The “savings” are to decide which treatments are “cost effective”, at least partially on the basis of age. The result is that a 70 year old who could live decades of productive life will be denied medical care because he isn’t cost effective, even if it kill him. The Canadian cancer mortality rate is another good example. Of course, a lot of socialist governments have been rather more aggressive in “rationing”, like the 20 million Russians starved to death during the 30s, the people sent to the gas in Poland and Germany, the mass starvation and mass executions in China, Vietnam, Cambodia, and so many other “paradises”.

Finally, since the government becomes the fount from which all resources come, serving and manipulating the government becomes, by necessity, the primary activity of everyone. So government the fair arbiter becomes government the aggressive advocate for whomever has grabbed the power this week. Elections become corrupt because its *worth* a billion dollars to control the presidency or congress, etc. Of course, when you put a billion dollars in, you want at least that much out. So the job of government becomes collecting taxes, essentially at gun point to subsidize those who put the current government in power, with little consideration for a benefit back to those people.

In short, you have a ghastly mess. And it happens every time.

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An interesting thought. If you were Fujio Cho (Toyota's Chairman), and your company has just beaten 2 competitors into bankruptcy. Then those competitors receive $80 billion dollars of aid from the government to keep competing. How would you feel? What would you do? What if it was your own privately held practice/company?

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Urban Survival...

Celling Taxes

What's this? IRS is reported considering a bill which would put a tax on use of a work cell phone in proportion to how many personal versus business calls are made on it. think of it as a presently untaxed 'fringe benefit'.

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Why can't we just go to a simple flat rate consumption tax? Why next thing you know, employers who put toilet paper in restrooms won't be able to write off that expense unless they serve food and water on the premises...I mean where does this extensible to absurdity end?

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And you saw where Iran and North Korea have formed an alliance to work on delivery systems?

06/10/09 thoughts

Below is the article I read which prompted my Facebook status. The only thing I have changed is deleted who it is from, and "bolded" the points I think are important. Please note, though Obama's administration is continuing this damning course, the Bush administration started it. I am in no way saying one party is better or worse than the other. I am saying they have both made incredibly poor decisions to make themselves look good in the short term, so in the long term they can point the finger at someone else. Ultimately they will "spin" the whole problem so it isn't their fault (or so history goes). Well guess what, it is. It is their fault, and when the average American wakes up and realizes this there will be hell to pay.

Also, a side note. Inflation is bullshit. It is a fancy word for the Fed increasing money supply; therefore, eroding the marginal purchasing power of each dollar you have earned. In other words, if I earn a dollar and bury it in my back yard, why is it worth less if I dig it up 5 years later? Since 1913 our US dollar has lost over 95% of its value compared to gold (historically an international method of value for...oh, I don't know...5,000 years?). So if you had one US dollar from 1913 you could only purchase 5% of what you could have back then...that is within some of our grandparents lifetimes! This is awful. Truly unforgivable in my eyes.

What Russia thinks: http://english.pravda.ru/opinion/columnists/107459-0/
What China thinks: http://www.washingtonpost.com/wp-dyn/content/article/2009/06/04/AR2009060403910.html

Thank goodness our competitors know we are in a position of strength...

---------- Forwarded message ----------
From:
Date: Wed, Jun 10, 2009 at 11:05 AM
Subject: FW: WSJ:Get Ready for Inflation and Higher Interest Rates
To:

Obama's long promised change is coming...........like a Peterbilt headed headed for your Prius.

When you combine ignorance and leverage, you get some pretty interesting results. -Warren Buffet

Get Ready for Inflation and Higher Interest Rates

The unprecedented expansion of the money supply will make the '70s look benign.

By ARTHUR B. LAFFER

Rahm Emanuel was only giving voice to widespread political wisdom when he said that a crisis should never be "wasted." Crises enable vastly accelerated political agendas and initiatives scarcely conceivable under calmer circumstances. So it goes now.

Here we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That's more than twice the size of the next largest deficit since World War II. And this projected deficit is the culmination of a year when the federal government, at taxpayers' expense, acquired enormous stakes in the banking, auto, mortgage, health-care and insurance industries.

With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs -- such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid -- are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.

But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.

About eight months ago, starting in early September 2008, the Bernanke Fed did an abrupt about-face and radically increased the monetary base -- which is comprised of currency in circulation, member bank reserves held at the Fed, and vault cash -- by a little less than $1 trillion. The Fed controls the monetary base 100% and does so by purchasing and selling assets in the open market. By such a radical move, the Fed signaled a 180-degree shift in its focus from an anti-inflation position to an anti-deflation position.

The percentage increase in the monetary base is the largest increase in the past 50 years by a factor of 10 (see chart nearby). It is so far outside the realm of our prior experiential base that historical comparisons are rendered difficult if not meaningless. The currency-in-circulation component of the monetary base -- which prior to the expansion had comprised 95% of the monetary base -- has risen by a little less than 10%, while bank reserves have increased almost 20-fold. Now the currency-in-circulation component of the monetary base is a smidgen less than 50% of the monetary base. Yikes!

Bank reserves are crucially important because they are the foundation upon which banks are able to expand their liabilities and thereby increase the quantity of money.

Banks are required to hold a certain fraction of their liabilities -- demand deposits and other checkable deposits -- in reserves held at the Fed or in vault cash. Prior to the huge increase in bank reserves, banks had been constrained from expanding loans by their reserve positions. They weren't able to inject liquidity into the economy, which had been so desperately needed in response to the liquidity crisis that began in 2007 and continued into 2008. But since last September, all of that has changed. Banks now have huge amounts of excess reserves, enabling them to make lots of net new loans.

The way a bank or the banking system makes new loans is conceptually pretty simple. Banks find an entity that they believe to be credit-worthy that also wants a loan, and in exchange for the new company's IOU (i.e., loan) the bank opens up a checking account for the customer. For the bank's sake, the hope is that the interest paid by the borrower more than makes up for the cost and risk of the loan. The recently ballyhooed "stress tests" on banks are nothing more than checking how well a bank can weather differing levels of default risk.

What's important for the overall economy, however, is how fast these loans are made and how rapidly the quantity of money increases. For our purposes, money is the sum total of all currency in circulation, bank demand deposits, other checkable deposits, and travelers checks (economists call this M1). When reserve constraints on banks are removed, it does take the banks time to make new loans. But given sufficient time, they will make enough new loans until they are once again reserve constrained. The expansion of money, given an increase in the monetary base, is inevitable, and will ultimately result in higher inflation and interest rates. In shorter time frames, the expansion of money can also result in higher stock prices, a weaker currency, and increases in commodity prices such as oil and gold.

At present, banks are doing just what we would expect them to do. They are making new loans and increasing overall bank liabilities (i.e., money). The 12-month growth rate of M1 is now in the 15% range, and close to its highest level in the past half century.

With an increased trust in the overall banking system, the panic demand for money has begun to and should continue to recede. The dramatic drop in output and employment in the U.S. economy will also reduce the demand for money. Reduced demand for money combined with rapid growth in money is a surefire recipe for inflation and higher interest rates. The higher interest rates themselves will also further reduce the demand for money, thereby exacerbating inflationary pressures. It's a catch-22.

It's difficult to estimate the magnitude of the inflationary and interest-rate consequences of the Fed's actions because, frankly, we haven't ever seen anything like this in the U.S. To date what's happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges. It wasn't a pretty picture.

Now the Fed can, and I believe should, do what it must to mitigate the inevitable consequences of its unwarranted increase in the monetary base. It should contract the monetary base back to where it otherwise would have been, plus a slight increase geared toward economic expansion. Absent this major contraction in the monetary base, the Fed should increase reserve requirements on member banks to absorb the excess reserves. Given that banks are now paid interest on their reserves and short-term rates are very low, raising reserve requirements should not exact too much of a penalty on the banking system, and the long-term gains of the lessened inflation would many times over warrant whatever short-term costs there might be.

Alas, I doubt very much that the Fed will do what is necessary to guard against future inflation and higher interest rates. If the Fed were to reduce the monetary base by $1 trillion, it would need to sell a net $1 trillion in bonds. This would put the Fed in direct competition with Treasury's planned issuance of about $2 trillion worth of bonds over the coming 12 months. Failed auctions would become the norm and bond prices would tumble, reflecting a massive oversupply of government bonds.

In addition, a rapid contraction of the monetary base as I propose would cause a contraction in bank lending, or at best limited expansion. This is exactly what happened in 2000 and 2001 when the Fed contracted the monetary base the last time. The economy quickly dipped into recession. While the short-term pain of a deepened recession is quite sharp, the long-term consequences of double-digit inflation are devastating. For Fed Chairman Ben Bernanke it's a Hobson's choice. For me the issue is how to protect assets for my grandchildren.

Printed in The Wall Street Journal, page A15 June 10, 2009

Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved

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Urban Survival...

Quiet Summer Wednesday - Too Quiet

Yup, life is sure 'normal'...but maybe too normal. Not that I'm the only one with a strange sort of feeling. Here's an email from a reader who catches it too:

"It is too quiet George . I just have a hunch ... here it is - Obama and Geithner toured the world looking for buyers of t-bills for auction this week - result- they scared buyers off more than anything .... auction will be a disaster tomorrow .... markets will see writing on the wall and commence dive .... or just before dive or during, war or some huge other disaster occurs providing cover for auction failure- just a hunch -it is just way too quiet , surreal today "

To be sure, the recent round of flag-raising in other countries doesn't seem to have created much in the way of good will. I mean when Chinese students laugh at an American Treasury Secretary, you know something is up. But what? The candidates might include:

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The Canadian gold scandal. Right now, it's been reported that the amount of gold missing from the Canada Mint facility is in the 10's of millions of dollars. But, what if the Mounties coming into it reveals that it's a much larger amount? That might shake things up a bit.

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Won't be triple witching week - that's not till the third Friday of the month which is a week plus two days from now.

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The Obama administration is seeking the 'fiscal responsibility mantel' which seems a little implausible, but as long as he's the MSM's darling, who knows what rebranding/repackaging will be attempted. Still, not something big in terms of the markets.

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Now, one thing that may move markets would be a leak that Middle Eastern sources are doing to demand gold for their oil - which has passed $70 a barrel now as the US revised predictions of a $16-barrel gain in the second half of this year. That's a potential upper limit on market action, and if the gold rumor turns out were confirmed, that would pop metals skyward. But would that account for that 'something's not right' feeling? Don't think so.

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No, I think that what is bothering me - and should be bothering the markets - is that according to the DTCC, there was "$27.8 Trillion of Credit derivatives outstanding as of June 5th" says tyhe Wall Street Journal.

Because the predictive linguistics project has another round of derivatives meltdown coming in the mid July to Mid August timeframe, I think it's important to put some things into perspective on the derivatives front.

The first thing I'd note is that the $27.8 trillion is the notional value of the underlying credit default swaps. The word "notional" means that that the full value (notion) could only become a real debt payable in full at the most extreme of economic conditions. At anything less, they can trade at a discount to notional...sort of analogous to how bonds trade at a discount to face value, is how I understand it.

That this popped up overnight, or even in the past two years, is not a correct assumption. My friend Cliff has many high-powered math friends who have been working lucrative computer programming gigs for the past 4-5 years at some of the biggest outfits in New York, because the pricing models to set CDS values have been stretched so far out of whack, that the modeled prices & values have stopped working.

06/09/09 thoughts

Good article describing the difference between Republican and Democratic tax policy. I believe the Republican way is more correct. Jobs created by Keynesian economic theory are government jobs, and hopefully we all know what a waste of space most government employees are. Even my roommate who works with the government bitches about what lazy sacks his fellow employees are. I know that lazy sacks in the real world get canned.

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Urban Survival...

06/08/09

What separates the concept of 'recession' from 'depression.' In a recession, as lagging sectors of the economy start to feel real pain, the leading sectors of the economy are already pulling out and the turn is in.

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Tension Building Behind Markets

A good report in the NY Times this morning about how tense things are among president Obama's economic advisors is worth study. One gets the idea that the happy-talk about the recovery may be a bit over-done and that despite the change-out in the Dow this morning we still have a lot of structural issues to face yet, including the possibility of a commercial real estate collapse and so forth as we move along into summer.

For one thing, the unemployment rate is running ahead of expectations of most (except us, eh? Wink, wink, nudge, nudge...) and the much-touted 'things are looking better mantra' that became apparent in the www.halfpasthuman.com linguistics about 9-months back is here. The rhyme off "Good Times are Just ahead."

You can see it in a chart that I did for Peoplenomics subscribers this weekend, too. The current circumstance is looking more and more like 1929's Great Depression, when compared with the market breaks in 1919, 1987, 2000 and now. Not exactly confidence inspiring.

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Tomorrow, wholesale inventories are expected to be down about 1%, anything more in the way of inventory building would be a negative for the market.. Wednesday brings the balance of trade figures, but since the latest figures for the Port of LA are down 15% year-on-year, while outbound is only down 4.23%, anyone with 31-cents worth of brains would expect the trade gap to narrow.

If you like reading light fiction, you might tune in for the Treasury Budget on Wednesday afternoon.

Retail sales and business inventories come out Thursday, which is not exactly a nail-biter. If you want one of those, wait for the University of Michigan's consumer sentiment report on Friday. Best guess is that it will be about 70.5 from it's previous 68.7, but a downside surprise can't be ruled out. Just depends on how many gunpoint-vacation auto workers showed up in their polling.

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Seems to me like the rally may continue into next week - which is options week - and perhaps a bit of selling by late in the month as portfolio managers try to book some profits before repositioning into early July. If you want to play the last of the rally up to the 9,600-9,700 range, that might be a decent game plan to ponder.

Not that this is financial advice. Although I've suggested before that since everyone except us seems to have gotten all of this spectacularly wrong, your investment advice money might be better spent on I-Ching sticks, a set of rune stones, or an ayahuasca vacation.

At least then, you'll know what kind of trip you're on. Wall Street is doing a fine cross between Prozac withdrawal and Alzheimer's, best I can...er...where were we? Oh yeah...just...

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06/09/09

Looking Ahead: The "Counterfeit Gold" Problem

We arrive now at a curious little eddy in the flow of time where according to the linguistics out of www.halfpasthuman.com, we should be seeing lots of action/headlines and awareness about the 'counterfeit gold' meme.

This is potentially and important one because there are several ways the linguistics can 'fill', but the main concept is fake gold. And there's plenty of that popping. A story in the Toronto Star now reveals that the 'missing gold' in Canada's Mint could be in the tens of millions of dollars worth.

Also missing is silver, platinum, and palladium. So we will find out when the audit is released in two weeks or so. However, I'm not sure that timeline will hold since when there's this kind of discrepancy who knows what kind of you-know-what-covering will be going on.

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Meantime, the trading price of gold has failed to continue its upside breakout that many people were expecting. One report says a move down to $933.50 may be in the works, but for most people who are adding a bit of metal to their portfolios, it may or may not matter, since gold has been a long-term hedge against inflation/excess money printing and as such is more a buy & hold rather than trading adventure.

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Around June 21, the new $10/slice weekly predictive linguistics reports will become available from HalfPastHuman, so it ought to be interesting to see how the 'fit' on the counterfeit gold is coming along. However, just as a 'head's up' independently, both Cliff and I purchased not one but two of those inexpensive digital scales off eBay to double-check the weight and then measure the size of a gold coin should either of us come to own one. We both already have calipers... After all, no point in knowing the future if it can't be turned into something actionable, right?

Sound Money Concerns

As we move into the balance of the summer, where linguistically we have the derivative meltdown second dance beginning, I'm expecting a boat load of stories that will seem to confuse the issue of 'what is money' and 'what holds value'.

For example, we read today how "China as fears on US Debt, dollar: Lawmaker" where we read how China would like to diversify somewhere out of dollars.

Consider the following hypothetical situation which could arise shortly and ask yourself "How would I allocate assets in this kind of environment?

• China begins to back away from dollars in a serious way. As does Europe and other regions. This forces...

• The Fed to buy more Treasuries which in turn...

• Spurs an increase in interest rates because of more paper chasing the same economy.

• Gold (and silver) however, come under a cloud as reports about 'counterfeit' or just plain outright 'missing' reserves start to appear, which would kick the knees out from under the role of the metals as a sort of 'last resort' or benchmark monetary unit, at least insofar as the small investors who buy coins and small bars are concerned.

• The ripple here could be that gold coin prices could be attacked - trapping people into paper denominated assets. Safety in stocks? Not hardly...

• Simultaneously, the stock market would be under pressure, too, since the arrival of the second leg down (commercial real estate) ought to be heading down around then.

That's the kind of problem that keeps me up at night. I remember the 'good old days' when the investment problem used to be picking the asset class with the greatest upside potential.

That seems to have changed, however, to where the largest problem for most investors is better stated as "Pick the asset class which has fewest booby traps and which has the greatest intrinsic value."

Intrinsic value of things like gold coins, only works as long as there is full faith in gold coins being of a certain quality. Same goes for silver.

Oh sure, the acquisition of something like producing ag land (trees and goats in our case) may be one way to hedge, but the problem is that it doesn't meet two of the key qualities that make something 'money'. It's not easily transportable nor is it easily divisible.

Prepared people have been grappling with this one for years. The metals being easily transportable, divisible, and having a great historical track record, would seem to be an obvious target of the PTB in trying to lock people into playing the paper assets game. At the same time, slowly increasing regulation of independent food producers, through agendas like the National Animal Identification Act and de facto support of chemical farming, again all serve to reduce people's options and force them to play the game.

One upon a time, America was a place where individual freedoms and Liberties stood as a beacon of hope for peaceful hard working people who wanted to get ahead through their own efforts. Seeing this, a group which I simply label the PowersThatBe have installed themselves as a kind of protection racket. You can have your freedoms, but not all of it...there's tribute required.

And the amount of tribute seems to grow over time. Whether it's through the obvious debasement of the currency - which has lots over 95% of its purchasing power since 1913, or whether it's the promise of higher taxes to come as government's here to 'help' by nationalizing auto companies, and insurance company, or many of the nation's banks.

I notice reporting only - not so much criticism - as Hugo "Chavez moves to nationalize Venezuela chemical plants." Know why this is not a drum-beating event? The PTB and their lackeys in the MSM know darned good and well that too much criticism of Chavez might get him out on a speaking tour where he'd explain how his seizure of chemical companies would be a trifling compared to an AIG bailout - something that it seems to me the power structure would not be too fond of having people figure out.

Not that it doesn't leak out around the edges anyway as former republicorp veep runner Sarah Plain is saying to voters "Told you so!" It's just that she's still nominally in the fold, and besides, a bit of criticism is tolerated, just to keep up appearances that we're not living in a controlled society.

Well, fine. We'll just keep spreading our bets here and there, hoping to figure out how the House has rigged the tables in this Casino in their favor and play along with that while eyeing the calendar looking for the next primary election to come along, which is where the paradigm has to shift, because it's in the primaries where the ruling paradigm maintains its grasp by suppressing third parties.

Good Fiction

Well, what's this? The Wall Street Journal's got a good op-ed piece this morning about how "The media fall for phony 'jobs' claims".

Why, that sounds remarkably familiar. Wonder where we've heard that mantra before?

Repackaged

And there's an AP story out headline "Obama repackages stimulus plans with old promises."

'Year Without Summer'

Not only are some parts of the US talking about a 'year without summer', but there's an AccuWeather story you have to read about the "Recent Upswing in Lightning." Does this mean the weather situation is 'static'? (Don't worry, this horribly lame attempt at a high tech pun will make sense to some...just keep the coffee hot and keep on reading - the puns get worse from here..)

Doesn't Ad Up

Oh sure, we've seen those stories about how ad sales are down big-time in various newspapers. But, as USA Today reports "Reality bites Internet as 1Q ad sales fall 5%". Not unexpected though because we have what?

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Boston Globe workers have rejected proposed wage/benefit cuts.

Debt-Powered Economy

I forgot to mention last week's Consumer Debt report - mislabeled by the Fed as the Consumer Credit report so it won't be so apparent that it's the how far you're in hock report. Consumer debt total is declining at an annual rate of 7.4% as people slow their spending on junk products and save for necessities only - like food and a roof. But the real key here is revolving debt (things like credit cards) where the annual rate is down 11% - a mere 0.2% uptick from the previous month.

Want a simple way to see if the economy is recovering? Look for an improvement in consumer debt. But be careful as you look, since if the consumer debt is going up only as a function of inflation, that's illusory.

No California Welfare?

Could this be a Diaspora driver? "California contemplates ultimate reform - no welfare." If they do, here's a simple prediction: They will need more crime fighting money...

You Know You're In Trouble When...

"World Bank boss sees China spurring global recovery."

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http://globalresearch.ca/index.php?context=va&aid=13872