May the source be with you, but remember the KISS principle ;-)
Neoliberalism -- a new, more dangerous form of Corporatism
The ideology that dare not speak it's name is actually a New, More Dangerous, Form of Corporatism. In essence neoliberalims is
an "internal colonialism" -- the colonialism applied to the host nation population, in which government becomes predatory and
policies are completely and intentionally
based on lies, on deception. In reality this "religion of freedom" (redefinition of the meaning of the word "freedom" and sophisticated
speculation on it is at the center of neoliberal religion) is a coercive cult enforced by corrupt, deceitful financial oligarchy with
the explicit goal of milking the common people (aka "deplorables"). "Free market" under neoliberalism actually means
"state enforced freedom of financial oligarchy to loot". They have money to hire intellectual prostitutes (aka professors
of economics) to do the dirty job of creating elaborate mathness and neoclassic economy based smoke screen over the lies
Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class
warfare. “There’s class warfare, all right, "Mr. Buffett said, “but it’s my class, the rich class, that’s making war,
and we’re winning."
Keynes gave the capitalist ruling class tools to extend its existence, the neo-liberals, contemptuously
dismissed them as cowardly compromises -- "Real Men bust Unions" is the neo-liberal motto. Now the reckoning is coming and
Keynes is suddenly looking very clever. And modern.
Listen to this article 6 minutes 00:00 / 06:06 1x Earnings, valuation and rampant speculation have all played a role in the extraordinary bull market that began a year ago this week. The latest combination of the three has a troubling reliance on the speculative element. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. Earnings, valuation and rampant speculation have all played a role in the extraordinary bull market that began a year ago this week. The latest combination of the three has a troubling reliance on the speculative element. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. U.S. 10-year Treasury yield Source: Tullett Prebon As of March 24 % Pre-pandemic peak of S&P 500 2020 '21 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 S&P 500 forward price/earnings ratio Source: Refinitiv Note: Weekly data S&P 500 peak 2020 '21 12 14 16 18 20 22 24 The parallel in the stock market is stocks going up when earnings -- or rather the expectation of earnings, since the market looks ahead -- go up. There is a risk of course, just as there is with debt: The earnings might not appear, and the stock goes back down. But earnings offer the least risky form of gains, and one that we should welcome as obviously justified. From the low in the summer, 2020 earnings forecasts jumped more than 10%, and expectations for this year rose more than 8%. Stocks responded. In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The parallel in the stock market is stocks going up when earnings -- or rather the expectation of earnings, since the market looks ahead -- go up. There is a risk of course, just as there is with debt: The earnings might not appear, and the stock goes back down. But earnings offer the least risky form of gains, and one that we should welcome as obviously justified. From the low in the summer, 2020 earnings forecasts jumped more than 10%, and expectations for this year rose more than 8%. Stocks responded. In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The parallel in the stock market is the The parallel in the stock market is the hunt for the greater fool . Sure, GameStop < shares bear no relation to the reality < of the company, but I can make money from buying an overpriced stock if I can find someone willing to pay even more because they "like the stock." Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks drove up the price of many tiny stocks, penny shares and those popular on Reddit discussion boards. Speculative bets such as the solar and ARK ETFs rallied up until mid-February, long after growth stocks peaked in August Price performance Source: FactSet *Russell 1000 indexes As of March 25, 7:02 p.m. ET % Invesco Solar Value* ARK Innovation Growth* Sept. 2020 '21 -25 0 25 50 75 100 125 The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. me title= A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. NEWSLETTER SIGN-UP ( Mar 26, 2021 , www.wsj.com )
The Financial Instability Hypothesis (FIH) has both empirical and theoretical aspects that
challenge the classic precepts of Smith and Walras, who implied that the economy can be best
understood by assuming that it is constantly an equilibrium-seeking and sustaining system. The
theoretical argument of the FIH emerges from the characterization of the economy as a
capitalist economy with extensive capital assets and a sophisticated financial system.
In spite of the complexity of financial relations, the key determinant of system behavior
remains the level of profits: the FIH incorporates a view in which aggregate demand determines
profits. Hence, aggregate profits equal aggregate investment plus the government deficit. The
FIH, therefore, considers the impact of debt on system behavior and also includes the manner in
which debt is validated.
Minsky identifies hedge, speculative, and Ponzi finance as distinct income-debt relations
for economic units. He asserts that if hedge financing dominates, then the economy may well be
an equilibrium-seeking and containing system: conversely, the greater the weight of speculative
and Ponzi finance, the greater the likelihood that the economy is a "deviation-amplifying"
system. Thus, the FIH suggests that over periods of prolonged prosperity, capitalist economies
tend to move from a financial structure dominated by hedge finance (stable) to a structure that
increasingly emphasizes speculative and Ponzi finance (unstable). The FIH is a model of a
capitalist economy that does not rely on exogenous shocks to generate business cycles of
varying severity: business cycles of history are compounded out of (i) the internal dynamics of
capitalist economies, and (ii) the system of interventions and regulations that are designed to
keep the economy operating within reasonable bounds.
"... much like the dot-com period, there is a broad subset of stocks (mostly in technology) that have become completely untethered, particularly since the summer of 2020, from business fundamentals like earnings and even sales -- driven higher only by euphoric market participants extrapolating from a past extraordinary trajectory of prices. ..."
"... A lot of today's US stock market has become what I call a "pure price-chasing bubble." Examination of the history of comparable pure price-chasing bubbles shows there has been a set of key causal factors that contributed to these rare (I have found nine in total) market events; the presence of most of these factors has usually been necessary for markets to reach the requisite escape velocity. ..."
"... To fuel the bubble further, there was a rapid expansion of bank money beginning three years before the market peak -- but the expansion of credit was even greater, owing to an explosion of margin credit (with implied annuaized interest rates sometimes reaching 100 percent) through an informal system utilizing postdated checks ..."
"... The US market certainly exhibits an exceptional record of price appreciation, with the S&P 500 having risen by almost 500 percent over more than a decade. In contrast to most other bubbles, however, it is notable that US economic growth over this period has been relatively anemic. ..."
"... Due to a sustained high rate of corporate equity purchases financed with debt, this overarching expansion of credit has also made its way into the last decade's bull market and steepened its price trajectory. ..."
"... The role of message boards and chat rooms -- with their millions of participants, all in instant real-time contact -- has created crowd dynamics in speculative stock market favorites at a pace without parallel in other pure price-chasing bubbles. ..."
"... a peak will be reached, a decline will follow, and the psychological dynamics in play on the way up will go into reverse and will accelerate the fall. ..."
"... Moreover, in the context of a grossly underestimated mass of corporate debt, history tells us the consequences of the bursting of the US stock market bubble should be another financial crisis and another recession ..."
According to Frank Veneroso, a broad subset of today's US stock market has become what he
calls a "pure price-chasing bubble." Examination of the history of comparable pure
price-chasing bubbles shows there has been a set of key causal factors that contributed to
these rare market events.
The most extreme such case was an over-the-counter market in Kuwait called the "Souk
al-Manakh." This exemplar of a pure price-chasing phenomenon may shed light -- albeit
unflattering -- on the current US equity market, Veneroso contends.
We should stop seeing capitalism as this unmovable, eternal and indestructible
system ...
Yes, in fact USA has adjusted capitalism as needed/wanted with socialism (the "welfare
state") and neoliberalism (crony-capitalism).
= ... capitalism and the USA are historically specific phenomena, and they will - 100%
certainty - collapse and disappear eventually.
Still, a collapse can take many forms and affect the world's people in different ways. We
can't just expect that capitalism will die of natural causes and the world will inevitably be
a better place for it. We are right to be wary of the worst outcomes.
= ... you just need to last longer than your political enemy. The fact that USA outlived
the USSR gave it almost 17 years of incontestable supremacy ...
You make "outlasting" seem like a random thing. USSR didn't just lose the roll of the
dice.
= No one takes neoliberalism seriously anymore, even among the high echelons of the
economics priesthood.
Examples?
= It is in this world that the Ukraine chose to align with the American Empire. To put it
simply, it chose the wrong side at the wrong time: it chose the West in an era that's
shifting to the East.
But their "choice" wasn't a free and knowledgeable one, was it? The West was pushing for
that change for 10 years and Nuland bragged of spending $5 billion to achieve it.
And the "choice" was for the entirety of Ukraine to move into the West. Ukraine
suffers greatly from not having Crimea and Donbas. For example, the West had planned gas
fracking in eastern Ukraine (by Burisma). That, of course, never happened.
= The euphoria of the fall of socialism masked the degeneration of capitalism that was
started at the same time and it particularly impacted the Warsaw Pact (Comecon) and the
Western ex-USSR nations.
Ukraine was already an oligarchic nightmare when Maidan happened.
= Nazism is not a system, it is just crazy liberalism, and I hope the white supremacists
and traditionalists in the West take note of that - if they don't want to be
crushed.
Nazism lives on in the form of the combination of: neoliberalism, neoconservativism, and
neocolonialism (aka Zionism). And those who adhere to these ideologies don't seem to have any
concern about being crushed. AFAICT the beatings will continue until morale improves
.
It's hard to track neoliberalism because the neoliberals don't consider themselves
"neoliberal": they're just "normal" or simply "liberal". They are the Hadean ideology par
excellence, the ideology that disguise itself as a-ideological, the invisible ideology.
But we can infer the death of neoliberalism as codified in the Washington Consensus list
from 2008 onward by the set of policies enforced in the USA, the UK, Japan and other
developed European countries (where neoliberalism are expected to be hegemonic), and here I'm
specifically asking you to focus on the so-called "austerity" (which is a more regressive
form of neoliberalism, but is not technically neoliberalism) and the rise of MMT through
money printing or, in the case of Japan, more T-bond issuance, in a complete disregard to
national (sovereign) debt after the pandemic (and, in the USA's case, even before that). Also
pay attention to the list of Economy "Nobel" (Riksbank) Prize winners post-2008 - none of
them being neoliberals in the academic sense of the word, nor having a neoliberal past
(apparently).
The only place left where neoliberalism is still alive and well, albeit weakened, is in
Latin America and the so-called "emerging economies" (Turkey, South Africa and Russia). But
those are not the dominant part of the world in the capitalist sense, it would be akin to the
Roman Empire surviving only as a remnant in pieces of Hispania or Gallia.
I wrote a post on the above-mentioned subject but I deleted it. I will not discuss the
demonisation of White heterosexual Males in all its forms for fear of cancellation. I will
instead leave you with my conclusions – which are consistent with The Walrus Law;
Governments achieve the reverse of their stated objectives.
Conclusion 1. No white male corporate manager is going to risk their career by engaging in
any of the following actions:
– Mentoring female subordinates.
– Taking one on one meetings with any female.
– Participating in any but the most innocuous social functions with female subordinates
and certainly not where alcohol is present.
– In fact avoiding any one on one situation with a female.
– It also stands to reason that women will not be employed or promoted if sufficient
excuse can be found. There wasn't a glass ceiling. There is now.
Why? Because a female subordinate can now permanently end a males career in a microsecond by
the act of alleging any impropriety thanks to #metoo. No proof is required.
Conclusion 2. The British/ European/ American class system is coming back with a vengeance.
Young men and their parents will confine their search for partners and social interactions, to
females of the same social strata, values, financial resources and background as their own.
This is not a guarantee of marital harmony, It does however decrease the likelihood of a male
being accused of relationship and career destroying improprieties twenty years after the
alleged event. You can forget marrying 'for love' outside your social class.
Conclusion 3. Male behaviour in the upper and middle classes is indeed going to change. We
will witness the return of the Chaperone for males. We will witness the end of many mixed sex
parties and entertainments because of the ever present threat of denouncement. Expect single
sex private schools to flourish. Co -education is an invitation for a young males career to be
finished before it even starts – all it takes these days is an allegation made perhaps
years and years after the alleged "event". The first a young male will know about it is when he
is arrested and handcuffed.
Conclusion 4. The nature of families is going to change. We are going to see the return of
stereotyped roles. Case in point? As a Grandfather I have decided I will have nothing more to
do with the informal upbringing of grand daughters – there is too much risk that if they
go off the rails in puberty or get involved in drugs, mental illness, etc. they will
conveniently blame sexual abuse by a relative as the cause. That means I will never allow
myself to be alone with them or be responsible for them ever and the rest of the family know
it. Period. The personal risk is just too great
I have examples to back up each conclusion but I will not share them with you.
I have not addressed the American race and firearm based issues but I would expect that
changes to firearm laws and characterisation of various behaviors as "extremist' will also have
the same opposite effect from what Government intended.
Indeed. I suspect that if I were of dating age (and single) today I would go on to die
celibate. A minority of women have made engaging with the entire gender entirely too
dangerous.
Reply
We are an adaptive bunch; witness how successful Prohibition was, or the alleged 'War on
Drugs'. Look at how Trumps border wall was rapidly shot to hell with a few acetylene
torches and some hinges – making really nice gates for the coyotes to run people
through.
It's interesting that there is no actual, physical way that the number of guns out here
'in the wild' is even known, much less can be seized. Guns can be seized by the
ATF/FBI/etc. making a huge raid on a single family and killing them all as examples –
but once that card is played, the ante will be upped and things will not be as easy for
them. The gun grabbers are literally about 200 years too late, as the gun cow is long out
of the barn.
The Covidian Cult is waning finally – in spite of the push by the globalist CDC,
WHO, Big Pharma, MSM and many others. It's hard to push fear of dying when there is nothing
to base it on any longer.
So now we are back to Ukraine, where Biden is both well known and well connected. Russia
will swat anything approaching her borders, and may swat hard. I would not be surprised to
see our puny couple of ships in their sea crippled electronically, again. But Russia
doesn't want what NATO and Biden are serving for dinner.
It's the same old SSDD of world ending disasters to keep everyone afraid of everyone
else while the big wheels in government are sending contracts out to their family members
and their various foundations using money leveraged against our grandkids.
57 genders; women cannot be approached without opening yourself to legal actions and yet
they are all in the military and government positions in far larger percentages than people
realize. Our local school principal was recently accused of "inappropriate conduct" with a
female teacher who is so obese she requires an electric scooter to move her bulk about.
Having actually seen this female, it was obvious to me, as a man with normal appetites,
that approaching her would have resulted in disgorgement of the previous meal and not
engorgement of anything.
It's human nature that when you forbid something unilaterally, it becomes more
attractive to many, just for the sake of flouting convention. Perhaps that is what the
morbidly obese teacher is striving for?
We are entering the Land of Unintended Consequences, and there is no way but
through.
Yves here. Tom Engelhardt tries to get his arms around US weapons sales and use. The figures
are depressing, particularly in comparison to those of our nominal peers. And the intensity of
our fixation with killing has only grown only over time. Just look at TV. In its early, tamer
days, frontier shows like The Rifleman and Gunsmoke gave weapons top billing. Now in our
post-Vietnam, post Archie Bunker of greater realism, police shows have gory gunplay as their
prime offering, with big side portions of blowing things up and car chases/crashes. We even
have a prime time show, The Blacklist, where the lead is assured to shoot at least one person
every episode. Better to look at the fictionalized version, where we know no actors were hurt,
than clips of the real thing from the Middle East, which are oddly absent from news shows.
By the time you read this piece, it will already be out of date. The reason's simple enough.
No matter what mayhem I describe, with so much all-American weaponry in this world of ours,
there's no way to keep up. Often, despite the headlines that go with mass killings here,
there's almost no way even to know.
On this planet of ours, America is the emperor of weaponry, even if in ways we normally tend
not to put together. There's really no question about it. The all-American powers-that-be and
the arms makers that go with them dream up, produce, and sell weaponry, domestically and
internationally, in an unmatched fashion. You'll undoubtedly be shocked, shocked to learn that
the
top five arms makers on the planet -- Lockheed Martin, Boeing, Northrop Grumman, Raytheon,
and General Dynamics -- are
all located in the United States.
Put another way, we're a killer nation, a mass-murder machine, slaughter central. And as
we've known since the U.S. dropped atomic bombs on Hiroshima and Nagasaki in August 1945, there
could be far worse to come. After all, in the overheated dreams of both those weapons makers
and Pentagon planners, slaughter-to-be has long been imagined on a planetary scale, right down
to the latest intercontinental ballistic missile (ICBM) being created by Northrop Grumman at
the cost of at least $100 billion. Each of those future arms of ultimate destruction is slated
to be " the
length of a bowling lane " and the nuclear charge that it carries will be at least 20 times
more powerful than the atomic bomb dropped on Hiroshima. That missile will someday be capable
of traveling 6,000 miles and killing hundreds of thousands of people each. (And the Air Force
is planning to order 600 of them.)
By the end of this decade, that new ICBM is slated to join an unequaled American nuclear
arsenal of -- at this moment -- 3,800 warheads . And
with that in mind, let's back up a moment.
Have Gun -- Will Travel
Before we head abroad or think more about weaponry fit to destroy the planet (or at least
human life on it), let's just start right here at home. After all, we live in a country whose
citizens are armed to their all-too-labile fingertips with more guns of every advanced sort
than might once have been imaginable. The figures are stunning. Even before the pandemic hit
and gun purchases soared to record
levels -- about
23 million of them (a 64% increase over 2019 sales) -- American civilians were reported to
possess
almost 400 million firearms. That adds up to about 40% of all such weaponry in the hands of
civilians globally, or more than the
next 25 countries combined.
And if that doesn't stagger you, note that the versions of those weapons in public hands are
becoming ever more militarized and powerful, ever more AR-15 semi-automatic rifles, not .22s.
And keep in mind as well that, over the years, the death toll from those weapons in this
country has grown staggeringly large. As New York Times columnist Nicholas Kristof
wrote
recently , "More Americans have died from guns just since 1975, including suicides, murders
and accidents (more than 1.5 million), than in all the wars in United States history, dating
back to the Revolutionary War (about 1.4 million)."
In my childhood, one of my favorite TV programs was called Have Gun -- Will Travel
. Its central character was a highly romanticized armed mercenary in the Old West and its
theme song -- still
lodged in my head (where so much else is unlodging these days) -- began:
"Have gun will travel is the card of a man.
A knight without armor in a savage land.
His fast gun for hire heeds the calling wind.
A soldier of fortune is the man called Paladin."
Staggering numbers of Americans are now ever grimmer versions of Paladin. Thanks to a
largely unregulated gun industry , they're armed like no other citizenry on the planet, not
even -- in a distant second place
-- the civilians of Yemen, a country torn by endless war. That TV show's title could now be
slapped on our whole culture, whether we're talking about our modern-day Paladins traveling to
a set of Atlanta spas ; a
chain grocery store
in Boulder, Colorado; a real-estate office
in Orange, California; a convenience
store near Baltimore; or a home
in Rock Hill, South Carolina.
Remember how the National Rifle Association has always defended
the right of Americans to own weapons at least in part by citing this country's hunting
tradition? Well, these days, startling numbers of Americans, armed to the teeth, have joined
that hunting crew. Their game of choice isn't deer or even wolves and
grizzly bears , but that ultimate prey, other human beings -- and all too often themselves.
(In 2020, not only did a record
nearly 20,000 Americans die from gun violence, but another 24,000 used guns to commit
suicide.)
As the rate of Covid-19 vaccination began to rise to remarkable levels in this country and
ever more public places reopened, the first mass public killings (defined as four or more
deaths in a public place) of the pandemic period -- in Atlanta and Boulder -- hit the news
big-time. The thought, however, that the American urge to use weapons in a murderous fashion
had in any way lessened or been laid to rest, even briefly, thanks to Covid-19, proved a
fantasy of the first order.
At a time when so many public places like schools were closed or their use limited indeed,
if you took as your measuring point not mass public killings but mass shootings (defined as
four or more people wounded or killed), the pandemic year of 2020 proved to be a record 12
months of armed chaos. In fact, such mass shootings actually surged by 47%. As USA
Today
recounted , "In 2020, the United States reported 611 mass shooting events that resulted in
513 deaths and 2,543 injuries. In 2019, there were 417 mass shootings with 465 deaths and 1,707
injured." In addition, in that same year, according
to projections based on FBI data, there were 4,000 to 5,000 more gun murders than usual,
mainly in inner-city communities of color.
In the first 73 days of
Joe Biden's presidency, there were five mass shootings and more than 10,000 gun-violence
deaths. In the Covid-19 era, this has been the model the world's "most exceptional" nation (as
American politicians of both parties used to love to call this country) has set for the rest of
the planet. Put another way, so far in 2020 and 2021, there have been two pandemics in America,
Covid-19 and guns.
And though the weaponization of our citizenry and the carnage that's gone with it certainly
gets attention -- President Biden only recently called it "an
international embarrassment" -- here's the strange thing: when reporting on such a binge of
killings and the weapons industry that stokes it, few here think to include the deaths and
other injuries for which the American military has been responsible via its "forever wars" of
this century outside our own borders. Nor do they consider the massive U.S. weapons deliveries
and sales to other countries that often enough lead to the same. In other words, a full picture
of all-American carnage has -- to use an apt phrase -- remained missing in action.
Cornering the Arms Market
In fact, internationally, things are hardly less mind-boggling when it comes to this country
and weaponry. As with its armed citizenry, when it comes to arming other countries, Washington
is without peer. It's the weapons dealer of choice across much of the world. Yes, the U.S. gun
industry that makes all those rifles for this country also sells plenty of them abroad and, in
the Trump years, such sales were only made easier to complete (as was the selling of U.S.
unmanned aerial drones to "less stable governments"). When it comes to semi-automatic weapons
like the AR-15 or even grenades and flamethrowers, this country's arms makers no longer
even need State Department licenses, just far easier-to-get Commerce Department ones, to
complete such sales, even to particularly abusive nations. As a
result , to take one example, semi-automatic pistol exports abroad rose 148% in 2020.
But what I'm particularly thinking about here are the big-ticket items that those five
leading weapons makers of the military-industrial complex eternally produce. On the subject of
the sale of jet fighters like the F-16
and
F-35 , tanks and other armored vehicles, submarines (as well as anti-submarine weaponry),
and devastating bombs and
missiles , among other things, we leave our "near-peer" competitors as well as our
weapons-making allies in the dust. Washington is the
largest supplier to 20 of the 40 major arms importers on the planet.
When it comes to delivering the weapons of war, the U.S. leads all its competitors in a
historic fashion, especially in the war-torn and devastated Middle East. There, between 2015
and 2019, it gobbled up
nearly half of the arms market. Unsurprisingly, Saudi Arabia was its largest customer,
which, of course, only further stoked the brutal civil war in Yemen, where U.S. weapons are
responsible for the deaths of thousands of
civilians
. As Pentagon expert William Hartung wrote
of those years, U.S. arms deliveries to the region added up to "nearly three times the arms
Russia supplied to MENA [the Middle East and North Africa], five times what France contributed,
10 times what the United Kingdom exported, and 16 times China's contribution." (And often
enough, as
in Iraq and Yemen , some of
those weapons end up falling into the hands of those the U.S. opposes.)
In fact, in 2020, this country's arms sales abroad
rose a further 2.8% to $178 billion. The U.S. now supplies no fewer than 96 countries with weaponry and controls
37% of the global arms market (with, for example, Lockheed Martin alone
taking in $47.2 billion in such sales in 2018, followed by the four other giant U.S.
weapons makers and, in sixth place, the British defense firm BAE).
This remains the definition of mayhem-to-come, the international version of that spike in
domestic arms sales and the killings that went with it. After all, in these years, deaths due
to American arms in countries like Afghanistan and Yemen have grown strikingly. And to take
just one more example, arms, ammunition, and equipment sold to or given to
the brutal regime of Rodrigo Duterte for the Philippine military and constabulary have
typically led to deaths (especially in its "war on drugs") that no one's counting up.
And yet, even combined with the dead here at home, all of this weapons-based slaughter
hardly adds up to a full record when it comes to the U.S. as a global mass-killing machine.
Far, Far from Home
After all, this country has a historic 800 or so military bases around the
world and
nearly 200,000 military personnel stationed abroad (
about 60,000 in the Middle East alone). It has a drone-assassination program that extends
from Afghanistan across the Greater Middle East to Africa, a series of "forever wars" and
associated conflicts fought over that same expanse, and a Navy with major aircraft carrier task
forces patrolling the high seas. In other words, in this century, it's been responsible for
largely uncounted but remarkable numbers of dead and wounded human beings. Or put another way,
it's been a mass-shooting machine abroad.
Unlike in the United States, however, there's little way to offer figures on those dead. To
take one example, Brown University's invaluable Costs of War Project has estimated that, from
the beginning of the invasion of Afghanistan in 2001 to late 2019, 801,000
people , perhaps 40% of them civilians, were killed in Washington's war on terror in
Afghanistan, Iraq, Pakistan, Yemen, and elsewhere. Of course, not all of those by any means
were killed by the U.S. military. In fact, some were even American soldiers and contractors.
Still, the figures are obviously sizeable. (To take but one very focused example, from December
2001 to December 2013 at TomDispatch , I was counting up
civilian wedding parties taken down by U.S. air power in Afghanistan, Iraq, and Yemen. I came
up with eight well-documented ones with a death toll of nearly 300, including brides, grooms,
musicians, and revelers.)
Similarly, last December, Neta Crawford of the Costs of War Project
released a report on the rising number of Afghan civilians who had died from U.S. air
strikes in the Trump years. She found that in 2019, for instance, "airstrikes killed 700
civilians -- more civilians than in any other year since the beginning of the war." Overall,
the documented civilian dead from American air strikes in the war years is in the many
thousands, the wounded higher yet. (And, of course, those figures don't include the dead from
Afghan air strikes with U.S.-supplied aircraft.) And mind you, that's just civilians mistaken
for Taliban or other enemy forces.
Similarly, thousands
more civilians were killed by American air strikes across the rest of the Greater Middle
East and northern Africa. The Bureau of Investigative Journalism, which followed U.S. drone
strikes for years, estimated that, in Afghanistan, Pakistan, Somalia, and Yemen, by 2019 such
attacks had
killed "between 8,500 and 12,000 people, including as many as 1,700 civilians -- 400 of
whom were children."
And that, of course, is just to begin to count the dead in America's conflicts of this era.
Or thought of another way, in this century, the U.S. military has been a kind of global
Paladin. Its motto could obviously be "have gun, will travel" and its forces and those allied
to it (and often supplied with American arms) have certainly killed staggering numbers of
people in conflicts that have devastated communities across a significant part of the planet,
while displacing an estimated 37 million people .
Now, return to those Americans gunned down in this country and think of all of this as a
single weaponized, well-woven fabric, a single American gun culture that spans the globe, as
well as a three-part killing machine of the first order. Much as mass shootings and public
killings can sometimes dominate the news here, a full sense of the damage done by the
weaponization of our culture seldom comes into focus. When it does, the United States looks
like slaughter central.
Or as that song from Have Gun -- Will Travel ended:
Paladin, Paladin,
Where do you roam?
Paladin, Paladin,
Far, far from home.
Far, far from home -- and close, close to home -- indeed.
The US is a failed experiment. It was always based in nihilism. What we are seeing is like
the rise in human sacrifices of the Mayans as their world was being eclipsed by the Spanish.
Ironically, "thoughts and prayers" are offered up at these sacrifices too. Did the Mayans
realize it was futile?
As more and more Americans realize that it is over and that the American dream is bunkum,
expect to see more carnage.
That figure of 400 Million guns in the USA is undoubtedly low, The late Kevin RC O'Brien
looked at production reports for various manufacturers and came up with the figure of 300
Million sold in the USA this century alone.
Sales of rifles aren't broken out by rifle type or model, but the best guess is that there
are somewhere between 10-15 Million AR 15 style rifles owned by us Citizens if you take into
account home made versions such as those made from 80% recievers or laminated wood.
The last reporting period was 2019 and a total of a little less than 400 murders were
committed by people using rifles of any kind, you ere 4 x as likely to be beaten to death
with fists and feet than killed by someone using any kind of rifle.
Want to reduce violent crime?
Reduce poverty, inequality and lack of opportunity, when the majority of the populace has a
stake in society they act like it, when they don't you get what we have.
TBH the article is a mess, and reading it is rather like being accosted by a stranger in a
bar with a strong personal agenda (" and another thing.")
But (as a non-Murkin) I just wanted to make the point that we're into American Exceptionalism
again, in this case of the negative rather than the positive kind. You get the feeling that
the author's knowledge of the outside world is pretty much limited to what's on CNN, and that
perhaps he doesn't actually know that the US isn't the only nuclear power in the world. And
so on.
How do you put an article like this into context?
Well, for a start, you wouldn't make comparisons with Yemen unless you had been to Yemen,
would you? There are lots of guns in Yemen (virtually the entire adult male population is
armed) but these are in addition to the massive holdings of the military. And we're talking
serious stuff here: AK47s are 7.62mm automatic weapons, and there are millions of them. It
was not uncommon for males you passed in the street to be carrying these weapons, and once
outside the cities (as in Afghanistan) they were everywhere. Shooting incidents were common,
the more so since, after midday, a lot of the male population was blasted out of its skull on
Khat, which is an amphetamine-like substance derived from chewing a local plant. There were
occasional clashes when security forces from different tribes opened fire on each other. Oh,
and many tribesmen in the city carry long bladed knives, and fatal stabbings in the street
are very common. All that's in peacetime, of course.
Second, as in the Yemeni example above, the vast majority of all the deaths in wars since
1989 have been from the use of Soviet, Russian and Chinese weaponry, often dating back to the
1970s. The wars in the DRC from about 1996-2000, involving seven nations and known as
"Africa's World War" killed anything between two and five million people, depending on how
you calculate the figures, and were almost exclusively fought with Soviet and Chinese
supplied weaponry. During the Cold War, the Soviets and Chinese flooded Africa with millions
of AK47s, Makarov automatic pistols, landmines, and 12.7 and 14.5mm heavy machine-guns. As
any African specialist will tell you, these were the real weapons of mass destruction,
because, unlike the F35, they actually work. Together with Soviet-era tanks and APCs, they
were also the principal weapons used in the fighting in Syria and Libya, and in Yemen before
(and mostly since) the Saudi-led intervention. Oh, and those photos you've seen of the
Myanmar military firing on the people? They use mostly weapons supplied by China.
This is not whataboutism. Two wrongs don't make a right. But I wish that, just
occasionally, writers from the US would take the trouble to do a bit of research about the
rest of the world. Perhaps it's true that there is a link between the sale of F35s to Japan
and gun violence among black youths in the inner cities, but that has to be argued, not just
assumed. I don't know how you measure these things, but I seriously doubt that the US is
somehow a uniquely psychopathically violent country. The author needs to get out more.
I assume the authors point is that there is an inherent violence to US culture, and it is
exporting it. There may well be some truth in this, but you can well look at plenty of other
places in the world where there is a cultural worship of violence (or there was at times
past) and it infected other nations. Japan and Germany as obvious examples. But on the
optimistic side of things, both those countries at least partially cured their addition to
worshiping militarism, although to be fair, the USAF had a major say in that.
The one thing that is often missing from this sort of analysis, is they way other
countries use the US's (and others) addition to militarism as a means of exerting control. An
obvious example is the Middle East, where the vast military expenditures are as much a means
of purchasing influence in Washington (and London and Paris and Moscow) as it is a way of
building up their respective militaries.
I think that may well be his point, or the point he's trying to make. I think it's true,
at least to some extent, but it's hardly a unique case, and there are plenty of other
societies in the world where you feel (correctly) much more threatened by violence than I
ever have in the US.
@David
Mr. Engelhardt is a US writer who understandably focuses on current US issues. He lays out
his point at the start: the U.S is "a mass-murder machine". He illustrates it by pointing out
how the US supplies weapons around the world, promoting, funding, and facilitating violence,
and itself slaughters people, directly and through proxies, by the millions. He also outlines
the remarkable violence prevalent in the U.S. These facts are undeniable.
With respect to context, of course the U.S. is not now, nor has it been in the past, the
source of ALL evil in the world. However It has been the source of a very large part of it in
the past century. From a practical point of view, what would be the point of Mr. Engelhardt
focusing on Russian and Chinese actions in, say, the 1980s, when his own country is engaging
in "mass murder" right now? It leads nowhere except to distract from current slaughter that
he may be able to help slow down.
The US as "a uniquely psychopathically violent country": the author does not actually say
that. Nonetheless the US is certainly a very violent country compared to other developed
countries and for that matter past imperialist countries. Collectively Britain, France,
Belgium, etc., etc., massacred millions, even tens of millions, of people in their empires
but to my knowledge were not especially violent at home. Germany was an exception to this.
The fact it slaughtered white people at home is what made its actions unacceptable to the
majority of the elites of most European countries.
The link between US violence abroad and at home: Chris Hedges has written about this. I
suggest you read what he has to say.
It is absurd to pretend that Russia or China is anything like as great a danger to peace
as the United States is. Forty four years ago Martin Luther King observed, ""As I have walked
among the desperate, rejected, and angry young men, I have told them that Molotov cocktails
and rifles would not solve their problems But they asked, and rightly so, 'what about
Vietnam?' They asked if our own nation wasn't using massive doses of violence to solve its
problems, to bring about the changes it wanted. Their questions hit home, and I knew that I
could never again raise my voice against the violence of the oppressed in the ghettos without
having first spoken clearly to the greatest purveyor of violence in the world today: my own
government."
The US was the greatest purveyor of violence in the world then; it is an even greater
purveyor of violence today.
The only criticism I would make of the article is the disparagement of Palladin. Though
his business card read, 'Have Gun, Will Travel', in almost every episode the protagonist was
able to resolve the situation without killing anyone. The episodes are very entertaining, as
was his sidekick, Kim Chan (Kam Tong), who went by the extremely un-woke nickname of Hey
Boy.
I am always amazed at the hypocrisy of US politicians complaining of violence in the US
while ignoring or even approving of violence committed by the US outside the US borders.
I also support censoring violence in entertainment media.
Censoring anything, including displays of violence, would require state force, which is
based on the use of guns and other weapons -- another 'war to end war', I suppose.
According to the Violence Policy Center (about which I know nothing but will provisionally
trust), motor vehicle deaths still outnumber gun deaths, although guns are closing the gap.
[1] As I have been hit by private cars far more often than I have been shot at -- I ride
around on a bicycle as basic transportation, so the ratio is about 10:0 -- I'd like to
suggest that the proper metaphor for mortal violence in the US is the automobile, rather than
the gun. However, urban liberals like to focus on their political rivals, and gun fans tend
to be suburban or rural, so guns rather than vehicles are the choice of symbol. Yet again,
tribalism permeates every discussion, indeed, it seems, almost every thought.
I have just finished reading a couple of weighty tomes with similar themes: Dark Money by Jane
Mayer is about how some nominally right-wing libertarian sociopaths, (i.e. the Kochs and their
coterie) seek to control American politics through various 'charitable' think tanks and stealth
infiltration of top ranked universities; and
The Age of Surveillance Capitalism by Shoshana Zuboff, which is about how some nominally
left-wing(ish) libertarian whiz kid sociopaths seek to control the whole world through social
media.
My main take away is that libertarian ideology is just shorthand for narcissistic
entitlement and psychopathic greed.
The Jewish Anti-defamation league is after Tucker Carlson. That's as bad as it gets. They
have more money than God.
Anti-Defamation League chief Jonathan Greenblatt "Tucker must go"...."white supremacist
tenet that the white race is in danger by a rising tide of non-whites" that is "anti-Semitic,
racist and toxic."
My simple solution is to turn the vacant malls into giant marijuana growing operations,and
huge meth labs,and use the revenue from the meth and weed sales to balance the Federal
budget..As an additional plus,you put the Mexican drug cartels out of business,which can't be
a bad thing,either
FurnitureFireSale 26 minutes ago
The smile on the side of the Prime trucks looks like a big wang (Bezos's?) saying "F-U,
take THIS!" to all the small businesses. Once you see it, you cannot unsee it.
Puppyteethofdeath 14 minutes ago
Turn them into homeless shelters.
744,000 Americans filed for 1st time unemployment last week.
Every week the numbers are the same.
no cents at all 5 minutes ago
Yet mall property owners and their ilk have equity prices in the stratosphere. Same with
cruise lines. A mystery. (Although doesn't take scooby doo to understand why)
Judge James C. Ho is absolutely correct to imply it is profoundly offensive to be offered
opportunity based on race rather than merit ("
Notable & Quotable: Judges ," March 27).
When I was approaching graduation and beginning my job search, a friend of the family, who
was Jewish himself, approached me with an opportunity. His accounting firm, one of the "Big
Eight" firms, had inquired if he knew any young Jewish accountants it could hire because it
didn't have any Jews working in the firm. The family friend told me this was a wonderful
opportunity and that I would be made partner and become prosperous. He was shocked when I
responded no, and asked why. I told him if I accepted this offer, I would never know if I was
successful because I was Jewish or because I was talented and skilled.
That makes Jamie brilliant. play_arrow 5 play_arrow 1
zorrosgato 10 hours ago
"flush with savings"
HA!
Yen Cross 10 hours ago
Jack, ****, Dimon? Which one was it Z/H Google moderator?
I donate at Christmas.
Basil 20 minutes ago
whats gone wrong is the cancer of progressiveism. wokeism, social justice nonsense.
Gadbous 29 minutes ago
Don't you want to just slap these people?
MuleRider 18 minutes ago
You misspelled decapitate.
GrandTheftOtto 2 hours ago
"It was a year in which each of usfaced difficult personal challenges"
boundless hypocrisy...
Mr. Rude Dog 2 hours ago remove link
" Americans know that something has gone terribly wrong, and they blame this country's
leadership: the elite, the powerful, the decision makers - in government, in business and in
civic society," he wrote.
"This is completely appropriate, for who else should take the blame?"
Lets see if he projects the problem back on the citizens...Let's see what happens.
"But populism is not policy, and we cannot let it drive another round of poor planning
and bad leadership that will simply make our country's situation worse."
I knew the so called elites could not take the blame... You know populism always makes bad
decisions with the economy, our monetary system, our infrastructure and just managing our tax
money in general...Yes I knew Jamie could not take the blame..LOL.!!!!
QE4MeASAP 2 hours ago
So Dimon is giving the state of the union instead of Biden?
Budnacho 2 hours ago
Jamie Dimon....Friend of the Little Guy....
Tomsawyer2112 PREMIUM 11 hours ago
He doesn't believe a word of what he just said. But he knows that if he wants his bank to
continue to be an extension of the government and curry favor then he needs to tow the line.
I am sure he also has his eye on a future role as Fed Lead or US Treasurer but might be tough
since he's not a diversity candidate.
oknow 2 hours ago
Someone turn off his mike, dont need your sorry *** confession
Just confiscate his wealth and make him do 9 to 5 jobs for the rest of his life.
ChromeRobot 9 hours ago remove link
This guy is a rarity in the banking industry. He's a billionaire. Running a bank I was
often told in my early years in finance was foolproof. Everybody needs money and they have
it. Hard to fk up. Somehow this "titan" has gamed it to do really well doing something
incredibly easy. Positioning yourself to be a SIFI helps too! Too big to fail has it's
perks.
a drink before the war 10 hours ago
What Jamie is really saying without saying it is " I get paid in stock options however
since the pandemic JPM and other banks haven't been allowed to do stock buy back but come
June we get back to the NORMAL and with the FED printing money and giving it to us we going
to talk this stock WAY up no matter what because I got almost two years of stock options I
gotta get paid for!"
lay_arrow 2
archipusz 10 hours ago
If you want to get to the top, you must speak the party line narrative.
The truth is something different altogether.
Eddie Haskell 10 hours ago
If you want to be a state-approved oligarch you've gotta suck the right dickie. Good
job.
Detective Miller 38 minutes ago
"Jaimie Tells Bagholders To 'Buy Buy Buy!!!'"
Onthebeach6 38 minutes ago
The US is addicted to helicoptor money.
The world looks fine to an addict until the supply is cut off.
sbin 41 minutes ago
Off shore industry
Steal pension funds
Laundering drug money
Regulatory capture.
Jimmy going to lock himself in jail and forfeit his assets?
34k of jerkoff.
Nuk Soo Kow 2 hours ago
How magnanimous of Jamie to blame elitists and civic "leaders" for the structural problems
in America. It was the banksters that pushed NAFTA and helped China engineer it's currency
against the dollar, which led to massive outflows of productive capital. It was the banksters
via the use of financial legerdemain who engineered the collapse in 2008 (not to mention
every other banking panic and collapse prior to). It's high time to throw out this den of
vipers once and for all.
Nature_Boy_Wooooo 2 hours ago
He lost me at.....
We need more cheap immigrant labor...... housing is unaffordable for many.
No **** moron!......you suppressed our wages and increased demand for housing.
PT 10 hours ago remove link
I always consult the fox when I want to know about the state of the hen house.
QuiteShocking 10 hours ago
Economic boom?? Is really just trying to get back to where we were previously before the
pandemic hit with things opening back up etc... More people have been working from home so
different spending patterns are developing.. but could change... Supply chain chaos makes it
seem like shortages and inflation etc... It may only last through 2023?? but with Dems in
charge this is not a given with their anti business slant??
same2u 11 hours ago
UBI for the rich= stock market...
Hope Copy 3 hours ago (Edited)
Jamie knows that the core of Crypto is at the CIA and that the pseudo Republic has far to
much Fascist politics at the core .. There has been a competitive failure at most all levels
of the government in recent times with a 'winner take all' at the cost of keeping competitive
practices alive (not to mention kickbacks).. Of course China is laughing even though they
have a history of cutting corners (and outright fraud) in every economic sector.
Mario Landavoz 20 minutes ago
Banker. That's all ya need to know.
Just a Little Froth in the Market 40 minutes ago
But the CEO was very candid about China...
"China's leaders believe America is in decline... The Chinese see an America that is
losing ground in technology, infrastructure and education – a nation torn and
crippled . . . and a country unable to coordinate government policies (fiscal, monetary,
industrial, regulatory) in any coherent way to accomplish national goals
This is correct.
Joe A 55 minutes ago
He is just mocking and taking a piss at everybody. That America is such a mess is because
of people like him with his scorched earth robber baron rogue capitalism. But there is a way
to redeem yourselves. Just make all your assets available to the American people. And oh,
blow your own brain out.
Abi Normal 3 hours ago remove link
What else is he supposed to say? As long as things don't go bad for Jamie it's cool.
OrazioGentile 3 hours ago
The Banksters, after years of mismanagement, borderline fraud, and endless bailouts now
see that investments in unicorn startups, selling mindless BS to each other, and the quick
buck lead to a burned out husk called America?!? Now?!? Let all of them live in the great
paradise called the Cayman Islands that they helped build and see how far they get selling
"capital instruments" to each other. The last 20 years have taught most Americans that hard
work is meaningless to get ahead IMHO.
Over the months there have been letters to the editor regarding academia,
"Academic Freedom Long Ago Withered Away" (Letters, March 5) being a case in point. I find
it interesting that for the most part they are written by professors emeriti or retired
academics, not active ones with a job to lose. This is very telling in and of itself.
If we are to believe authorities the USA. added 916K jobs in March, and the official
unemployment rate is at 6% (note the word official; the current official U6 unemployment rate as
of March 2021 is 10.70%; so the real number is probably much higher than 10%)
Fudging data became as prominent as it was in the USSR. The neoliberal empire can't afford objective stats.
Notable quotes:
"... monthly data is collected over a brief timeframe - just a few days - and that the calculations are seasonally adjusted. ..."
"... Yes, at least half the sheep population think they are real. It's insane how dumb people are today. ..."
I spent the last 2 weeks digging into the numbers - especially timing of the surveys and
data collection. I get the fact that weekly claims don't reflect new hires. I also realize
that monthly data is collected over a brief timeframe - just a few days - and that the
calculations are seasonally adjusted.
But let's be reasonable - how is it possible to have 700K - 800K initial jobless claims
every week and create nearly a million new jobs? Does anyone really believe any of these numbers?
Globalistsaretrash
Yes, at least half the sheep population think they are real. It's insane how dumb people
are today.
Apparently it was "You pissed on my rug!". I guess if they update that book and article,
they'll include Trump characterizing Justin as "weak and dishonest" - which I would say,
based on his 7 years as PM, is blunt but accurate.
I think you're right that any US concessions are just a reprieve. That
non-agreement-capable thing. Freeland and Justin don't care, they're looking forward to
getting rich after leaving office, like the Clintons, Obama, etc. as a reward for their
service to plutocracy.
William Gruff @19, Hoarsewhisperer @16, agreed. That, it seems to me is the root of the
problem. Our politicians are for sale to the highest bidders. It's no longer democracy, but
full-fledged plutocracy with a veneer of "democracy" that's visibly cracked and flaking off
to anyone but the willfully blind.
solo @38, good point. Saudi Arabia also sided with China on Xinjiang:
Importantly, the Crown Prince said Saudi Arabia 'firmly supports China's legitimate
position on the issues related to Xinjiang and Hong Kong, opposes interfering in China's
internal affairs under any pretext, and rejects the attempt by certain parties to sow
dissension between China and the Islamic world.'
Plainly put, Saudi Arabia has undercut the current US campaign against China regarding
Xinjiang. It is a snub to the Biden administration.
"What Washington and its allies are doing is trampling over international law and kicking
it to the curb. Their conduct is that of rogue states who perceive themselves to be above the
law, entitled to act in whatever way they please with no accountability.
"Ironically, and sickeningly, the Americans, Europeans, Canadians, Australians and other
partners, talk loftily about respecting "values' and 'rules-based international order'. They
are the ones who are trashing any semblance of order. It is these NATO powers that have
launched numerous criminal wars of aggression without any mandate from the UN Security
Council. They have carried out covert regime-change operations which have unleashed mayhem
and terrorism. They impose unilateral sanctions on nations suffering from NATO's intrigues,
such as Syria and Venezuela. They run assassination programs and torture-renditions to black
sites around the world. Their troops kill Afghan civilians in cold blood after kicking down
their doors in the middle of the night. The United States rips up nuclear arms control
treaties with Russia, while sailing warships into Chinese territory."
So, under the tenets of International Law, both Russia and China have the right to
counter-attack and have. But the initial law breaking by the Outlaws must be stopped, and it
appears they must be forced to do so. And since two of the Outlaws sit on the UNSC, using
that organizations Article 7 powers won't do the job as the Veto will be invoked. IMO, the
only alternative is to turn to the UNGA and ask it to override the deadlocked UNSC and
warrant the arrest of the Outlaws by all UN member states wherever they may be.
I hope barflies take the time to read the editorial as it ends with an excellent news item
that's more than apt for our times.
Meanwhile Biden's son Hunter, the "smartest guy" his father knows, has his feet firmly in
his mouth in excerpts from an interview this Sunday about his 💻 that was full of
underage porn & business dealings involving his father when VPOTUS.
Today's
Martyanov Blog is really good and incorporates some of Hudson's views, this being most
prescient:
"But behind all of that is a systemic and irresolvable crisis of financial predatory
capitalism, which goes under different monikers, but remains the same, as Michael Hudson
astutely put it--the parasite finally ate the host. In this case, the neocon insanity in the
US is merely a private symptom of a larger ailment."
The earlier longer excerpt he includes is also worth experiencing--it was from the latest
discussion with Escobar. I suggest reading it.
'The world will never be the same:' Coursera CEO on learning post pandemic
Reggie Wade
·
Writer
Fri, April 2, 2021, 12:43 PM
More content below
More content below
^IXIC
+1.76%
COUR
+1.73%
The online learning platform
Coursera
(
COUR
)
saw a big pop following its Nasdaq (
^IXIC
)
debut this week. Coursera revenue was up 60% last year, and CEO Jeff Maggioncalda predicts online learning is here to stay even
after the pandemic eventually winds down.
"The world needs more access to high-quality learning. ... There will be a new normal that emerges. We don't know what that will
look like either in terms of how we work remotely versus in an office and how we will learn online and also on campus. But it's
pretty clear that the world will never be the same again and that online learning will be a big part of it," he told Yahoo
Finance Live.
"So we really think about the long term, all the structural reasons why people will need to learn continuously through their
lives to learn new skills as the world goes more digital," he said.
Dec 27, 2019 Mountain View / CA / USA - Coursera headquarters in Silicon Valley; Coursera is an American online learning
platform that offers massive open online courses, specializations, and degrees
One area that Coursera is looking to expand is its degree and certification programs. Maggioncalda tells Yahoo Finance that the
company can use technology to shake up traditional degree offerings.
"What we've seen for centuries is that college degrees are the most meaningful, recognized learning credential that there is, and
the credential type hasn't really innovated that much over the last period of history. We think with technology, the ability to
create not only degrees but other types of credentials," he said.
"It will be a portfolio of credentials. We believe that will serve lifelong learning needs in a world where people need to keep
learning, even as they're working," he added.
The rules at issue in the case, initially adopted between 1964 and 1975, had been meant "to
promote competition, localism and viewpoint diversity by ensuring that a small number of
entities do not dominate a particular media market," Justice Brett M. Kavanaugh wrote for the
court. But the rules, he added, were a relic of a different era -- "an early-cable and
pre-internet age when media sources were more limited." "By the 1990s, however, the market for
news and entertainment had changed dramatically," Justice Kavanaugh wrote. "Technological
advances led to a massive increase in alternative media options, such as cable television and
the internet. Those technological advances challenged the traditional dominance of daily print
newspapers, local radio stations and local television stations."
The case, Federal Communications Commission v. Prometheus Radio Project, No. 19-1231,
concerned three rules. One barred a single entity from owning a radio or television station and
a daily print newspaper in the same market, the second limited the number of radio and
television stations an entity can own in a single market, and the third restricted the number
of local television stations an entity could own in the same market.
In 2017, the commission concluded that the three rules no longer served their original
purposes of promoting competition and the like. The vote was 3 to 2 along party lines, with the
commission's Republican members in the majority.
They were not deciding if media consolidation was OK. They were deciding if the FCC had the
regulatory authority to make such a change. The court decided, unanimously, that they did.
If they had decided otherwise, it would open up any such regulatory changes to lawsuits
against the change. This includes further tightening media ownership rules, or changing rules
on pollution, or regulations on corporate governance.
Is they have should have gone for the throat and said FCC, SEC, FTC, FEC, etc. rule-making
is unconstitutional per se because all legislative and pseudo-legislative activity must be
enacted explicitly by only the Congress.
It would have utterly horrified and enraged progressives and big corporation-loving
republicans, but it would have been considered a judicial Gettysburg for the forces of populism
on both sides because it would have gutted the power of the administrative state to render the
people's assembly a vestigial organ.
...history shows that one messy unwind can easily spread. The U.S. Office of Financial
Research finds that the ten largest hedge funds were leveraged
far more heavily than the next 40 largest funds, as of June. And many family offices may
not be counted in these statistics at all, which mostly rely on disclosure forms they are able
to avoid.
There are some obvious responses for regulators, such as mandating disclosure of the
total return swaps that allowed Archegos to build big positions out of the public eye. But
there are no easy answers to the wider challenge of overseeing leverage within the broadest
financial complex when debt is almost free.
The system has held up under the latest strain, but this isn't a victory. Archegos means one
who leads the way. Regulators must do what they can to ensure as few as possible follow.
Swiss rival Credit Suisse expects a hit in the billions of dollars from Archegos, people
with knowledge of the matter have said, while Nomura Holdings Inc. has signaled it may lose as
much as $2 billion. Analysts at JPMorgan Chase & Co. estimate the Archegos blowup may cause
as much as $10 billion of combined losses for banks.
David Herro, chief investment officer of Harris Associates -- one of Credit Suisse's biggest
shareholders -- said on Bloomberg Television on Wednesday that the Archegos incident was a
"wake-up call" for Credit Suisse and should lead to sweeping changes to its culture and
oversight practices.
Shares of Credit Suisse tumbled 21% this week on concern over the size of its potential
Archegos hit. Deutsche Bank is down 2.9%.
Casino capitalism is the fertile ground for the most sleazy types of speculators. The stock
market has become a giant slot machine financed by 401K lemmings. The marks here are 401K
investors.
Excessive leverage is a immanent feature of the pre-collapse stage of Minsky cycle. So those
who argue that we are close to another crash get some additional confirmation due to this event.
The Masters of the Universe rediscovered the hidden areas of huge risk, and like in 2008 are
afraid but can't and do not want to anything.
TBTF such as Goldman and Morgan aid the most sleazy types as they bring outsized profits for
them. So this a catch 22 as Goldman and other TBFT controls SEC not the other way around.
It would be prudent to view banksters as a special type of mafia and treat accordingly and
prohibit for them serving in government. But this is impossible under neoliberal as financial
oligarchy has all political power.
The question is: Is there another fund that's larger, that's more leveraged with the same
characteristics that could prove to be a more systemic event? That's the major concern right
now." Wall Street's hottest trades such as pure-tech plays and high-flying tech/media like the
ones bet on by Hwang -- could be unwound. The Hwang blowup wakes up investors to the realization
that many parts of the market are overvalued and it's time to sell -- and quickly as yields are
going up. For the the FAANGS, the Tesla's out there -- the fundamentals don't support the stock.
So it would be logical to a large correction.
Notable quotes:
"... The idea that one firm can quietly amass outsized positions through the use of derivatives could set off another wave of criticism directed against loosely regulated firms that have the power to destabilize markets. ..."
Much of the leverage used by Hwang's Archegos Capital Management was provided by banks
including Nomura Holdings Inc. and Credit Suisse Group AG through swaps and so-called
contracts-for-difference, according to people with direct knowledge of the deals. It means
Archegos may never actually have owned most of the underlying securities -- if any at all.
While investors who own a stake of more than 5% in a U.S.-listed company usually have to
disclose their holdings and subsequent transactions, that's not the case with positions built
through the type of derivatives apparently used by Archegos. The products, which are transacted
off exchanges, allow managers like Hwang to amass exposure to publicly-traded companies without
having to declare it.
The swift unwinding of Archegos has reverberated across the globe, after banks such as
Goldman Sachs Group Inc. and Morgan Stanley forced Hwang's firm to sell billions of dollars in
investments accumulated through highly leveraged bets. The selloff roiled stocks from Baidu
Inc. to ViacomCBS Inc., and prompted Nomura and Credit Suisse to disclose that they face
potentially significant losses on their exposure.
One reason for the widening fallout is the borrowed funds that investors use to magnify
their bets: a margin call occurs when the market goes against a large, leveraged position,
forcing the hedge fund to deposit more cash or securities with its broker to cover any losses.
Archegos was probably required to deposit only a small percentage of the total value of
trades.
The chain of events set off by this massive unwinding is yet another reminder of the role
that hedge funds play in the global capital markets. A hedge fund short squeeze during a
Reddit-fueled frenzy for Gamestop Corp. and other shares earlier this year spurred a $6 billion
loss for Gabe Plotkin's Melvin Capital and sparked scrutiny from U.S. regulators and
politicians.
The idea that one firm can quietly amass outsized positions through the use of
derivatives could set off another wave of criticism directed against loosely regulated firms
that have the power to destabilize markets.
Bob 2 days ago This is another major reminder that the stock market is not as rational as we
want to believe. A small group of very large, leveraged funds can have far more impact on the
market than dozens or hundreds of well thought out and researched programs. Sigh. Take your
lumps and move on. Hasso 2 days ago 2008 - Hwang's Tiger Asia suffered losses from the
Volkswagen short, 2012 - Hwang's Tiger Asia paid $44M to settle insider trading charges, banned
2014- Hong Kong fined him $5.3M & banned him for four years. 2021 - And here we are
again.
Tyrone 2 days ago Gee, Credit Suisse involved in sleezy investments. Again. I'm shocked, just
shocked!
Manohar 2 days ago Banks haven't learnt anything yet...you know why? Because its other people's
money and the no one gets prosecuted when they are caught with hand in the cookie jar.
killer klown 2 days ago it's a sign that the market and it's regulators have learned
nothing.........to even pretend that a penny difference in assumed earnings versus actual
earnings using the GAAP accounting (which itself says it's not exact but generally accepted
accounting principles)moves a stock is in itself a joke, this situation of a BIG BLACK BOX
calls for the complete dismantle of the derivatives market which was created to lay off risk.
Bill Hawng should be FLAT Broke his possesions seized, The board of Credit Suisse and Nomura et
all should be unemployed as of 8:31 this morning. But they won't and it's only going to happen
again and again.
Amvet 2 days ago Market manipulators have a free rein in the USA. Are politicians also
involved? Reply 16 3 George 2 days ago Just amazing how some of the world's most sleazy
characters have access to cosmic sums of money and remain under the radar and legal(???). Then
nothing seems to happen except that loads of other folk get burned while they move on to the
next bright idea. Reply 13 1 Rick 2 days ago So clearly limiting those who can purchase these
to exclude amateur players has not been successful. Recklessness is not limited to amateurs.
Mr. H. 2 days ago In 2008 high finance was playing very high risk games with clients money at
the undefined edge between legal and illegal. A bunch of firms went away along with many
billions of dollars because a bunch of players were playing CYA. They came up with the term
"too big to fail" when they were picking winners and losers. "too big to fail" is is fetid
bovine excrement. The SEC, that is the administrative government, was not doing its job! There
were many questions about government employee competence to do those jobs. The government
should have let the market place pick the winners and losers, then the government should have
prosecuted everyone who failed to perform their fiduciary duty and set a major precedent about
high risk play with other people's money; keep it legal or go to jail and lose your shirt. That
is what should happen this time too! Noone 2 days ago Almost like something that is so
dangerous and risky to both the market AND the "investor" that retail traders ARE BANNED from
doing it should.. idk.. BE ILLEGAL FOR EVERYONE? Useless SEC. Do your job right.
Philip 2 days ago Ironic that Hedge Funds are the most unhedged game going.... Dan 1 day ago
The managers of these HFs lack morality, they steal from other companies because they believe
in their twisted little minds if they set up a system whereby they can trade in dark pools with
illegal naked shorting, counterfeit shares and stock manipulation under the radar -- it makes
the crime okay. All of this criminality is been done with the aid of supplementary leverage
ratio (SLR) If they can manage to bankrupt the company they short with Government SLR they end
up paying no tax and pocket the money GME/AMC and more for example.. Bingo the most audacious
robbery attempt in the history of the state. Oh boys did they fail, wow what a spectacular
failure. Now they have to deleverage destabilizing the entire market. Do these HF managers rank
their values differently to the moral code we all live by? Obviously they do! There's no doubt
they'll get lots of time to think about their behaviour when they're in the slammer. Each case
will have to be evaluated on its own merit at some stage of course. On the face of it, all
indications points to a tradeoff that benefits themselves at the disadvantaging of other. Sad
for them! I rest my case!
Jodes 1 day ago The spikes in shares like ROKU, BIDU, SHOP and many more have huge parabolic
spikes at the top accounting for the disfunctional market as we were seeing it at the top. They
had huge buy orders to artificially spike the prices keep them up and then experts come in
after and raise price targets and put a BUY rating on the stock. Then get retail to buy in and
then drop them like a rock. Greedy and dispicibale. All probably done for a huge bonus. While
retail suffers for their greed.
Vince 2 days ago More than 100 Trillion (with a T) are moving around the world in Derivatives
each and every day., some say closer to 200 Trillion! You figure it our when THAT bubble
bursts! Reply 2 1 SniffMopWho 2 days ago Interesting how these guys make millions and billions,
just by pressing keys on a keyboard.
... 2 days ago More sleaze trying to bring down the market by making risky bets with swaps and
derivatives, yet the regulators are caught asleep again. Just more proof of incompetence by
Biden and his hired idiots at the SEC.
TL;DR- Citadel and friends have shorted the treasury bond market to oblivion using the
repo market. Citadel owns a company called Palafox Trading and uses them to EXCLUSIVELY short
& trade treasury securities. Palafox manages one fund for Citadel - the Citadel Global
Fixed Income Master Fund LTD. Total assets over $123 BILLION and 80% are owned by offshore
investors in the Cayman Islands. Their reverse repo agreements are ENTIRELY rehypothecated
and they CANNOT pay off their own repo agreements until someone pays them, first. The ENTIRE
global financial economy is modeled after a fractional reserve system that is beginning to
experience THE MOTHER OF ALL MARGIN CALLS.
THIS is why the DTC and FICC are requiring an increase in SLR deposits. The madness has
officially come full circle.
tnorth 4 hours ago
another month of completely rigged 'markets'
mtl4 4 hours ago remove link
Music is still playing, make sure you have a chair when it stops
this_circus_is_no_fun 1 hour ago remove link
Consider these two points:
Treasuries are claimed to be backed by the "full faith and credit of the United
States".
In Q1, Treasuries suffer their biggest loss in 40 years.
y_arrow
Kreditanstalt 1 hour ago (Edited)
I've always wondered why seemingly contradictory and uncorrelated assets and asset classes
alternately "soar" and "plunge" on different days, usually in random conjunction with
others...
It seems so counterintuitively...MECHANICAL...or theory-driven, rather than rational
"investing".
A little known hedge fund that blew up last week has sent shockwaves through the world of investment banking.
Shares in Credit Suisse (
CSGN.SW
)
and Nomura (
8604.T
)
sunk over 10% on Monday after both warned they faced potentially billions in losses linked to hedge fund Archegos Capital.
Banks that worked with Archegos and lent it money to buy shares were scrambling to offload Archegos' investments after a handful
of risky bets made by the hedge fund went bad. The rush to exit these positions hit public shares prices, leaving banks with huge
losses.
Hedge funds typically borrow money from banks to invest, a process known as margin trading. This allows funds to leverage up the
cash they hold and increase their positions -- potentially earning far greater returns if their bets come good. However, it also
means hedge funds can theoretically lose more money than they hold in client funds.
If trades made on margin turn sour, banks will ask a client to put up more money as collateral to limit potential losses. This
process is known as a margin call.
Archegos faced margin calls on its positions last week but failed to provide extra cash. As a result, banks began selling off
stocks held on the hedge fund's behalf -- a fire sale known in the City as liquidating positions. The business press reported on
Friday that Goldman Sachs (
GS
)
and Morgan Stanley (
MS
)
were selling huge chunks of shares in businesses including ViacomCBS (
VIAC
),
Discovery (
DISCA
)
and Chinese stocks Baidu (
BIDU
)
and Tencent Music (
TME
).
The block sales are estimated to be worth around $20bn (Ł14.5bn),
according
to the Financial Times
.
Shares in Credit Suisse sunk after it warned of 'significant losses' linked to the blow up at Archegos Capital. Photo:
Fabrice Coffrini/AFP via Getty Images
A little known hedge fund that blew up last week has sent shockwaves through the world of investment banking.
Shares in Credit Suisse (
CSGN.SW
)
and Nomura (
8604.T
)
sunk over 10% on Monday after both warned they faced potentially billions in losses linked to hedge fund Archegos Capital.
Banks that worked with Archegos and lent it money to buy shares were scrambling to offload Archegos' investments after a
handful of risky bets made by the hedge fund went bad. The rush to exit these positions hit public shares prices, leaving
banks with huge losses.
Hedge funds typically borrow money from banks to invest, a process known as margin trading. This allows funds to leverage up
the cash they hold and increase their positions -- potentially earning far greater returns if their bets come good. However, it
also means hedge funds can theoretically lose more money than they hold in client funds.
If trades made on margin turn sour, banks will ask a client to put up more money as collateral to limit potential losses. This
process is known as a margin call.
Archegos faced margin calls on its positions last week but failed to provide extra cash. As a result, banks began selling off
stocks held on the hedge fund's behalf -- a fire sale known in the City as liquidating positions. The business press reported
on Friday that Goldman Sachs (
GS
)
and Morgan Stanley (
MS
)
were selling huge chunks of shares in businesses including ViacomCBS (
VIAC
),
Discovery (
DISCA
)
and Chinese stocks Baidu (
BIDU
)
and Tencent Music (
TME
).
The block sales are estimated to be worth around $20bn (Ł14.5bn),
according
to the Financial Times
.
"Things started going wrong for Archegos when shares of companies such as Viacom started to slide mid-last week," said Michael
Brown, a senior market analyst at Caxton Business. "It was at that point that margins were called, and couldn't be provided,
hence the block sales seen Friday."
A fire sale can have a negative impact on stock prices and shares in both ViacomCBS and Discovery sunk 27% on Friday. Banks
therefore risked making less back from the sales than they lent to clients to fund the investments.
Credit Suisse on Monday warned it was facing "highly significant" losses linked to Archegos that could be "material to our
first quarter results".
The Swiss lender didn't name Archegos but said: "A significant US-based hedge fund defaulted on margin calls made last week by
Credit Suisse and certain other banks."
Credit Suisse said it was "in the process" of selling shares held by Archegos. The bank said it was "premature" to estimate
how much it would likely lose from the crisis.
"We intend to provide an update on this matter in due course," Credit Suisse said.
Shares sunk 13.4% in Zurich.
"One would assume that, judging by the size of positions sold, the 'game is up' for Archegos," Brown said.
He said it was "unlikely" that Archegos would pose a systemic risk to the financial system. Neil Wilson, chief market analyst at
Markets.com, said the hedge fund "appears to have been too concentrated in a number of risky stocks."
A hedge fund blow up is relatively unusual and Archegos' undoing has raised concerns that other funds could find themselves in
similar positions.
"Block equity-trades stemming from margin-calls on Archegos will have sent the market's spidey senses a tingle," said Bill Blain,
a senior strategist at Shard Capital. "Who is next?"
Alex Harvey, a portfolio manager at Momentum, said: "We tend to find out after the event that other funds get caught up as
sometimes hedge funds may be crowded into similar trades."
"When we look at this and think about the GameStop saga and the decline in Tesla as two examples -- what we're seeing are more and
more pockets of very unusual trading activity in some stocks," he said. "You worry that this sort of frothy trading activity in
turn creates pockets of distress among investors and banks that leads to larger unwinds and losses for financials."
What are the facts that indicate that "China wants to dominate the entire world"? There is
little or no evidence of that. Just repeating this pabulum on and on doesn't make it true. It
just makes hoi polloi think it is true.
There is no specific speech or document that clearly states that China wants to dominate
the entire world. It is an inference from many things pieced together, some of which are:
1. China's behavior after it was admitted to WTO. When it happened in 1999, the
expectation was that they would open up their market to global firms. Instead, what happened
was rampant technology theft and currency manipulation. They manipulated their industrial
policy to deny foreign firms a level playing field that Chinese companies were given in other
countries.
2. The Belt and Road projects. These are basically debt traps for poorer countries in
Asia, Africa and Europe in the name of infrastructure development. They give soft loans to
these countries for economically unviable infra projects, and when they fail, the Chinese
take ownership. Kinda like loan sharks loaning money to gamblers.
3. They have started grabbing territory from all neighbours using salami tactics, showing
some old "maps" that was never agreed and claiming they own the area. (Google "Nine-dash
line").
Add to this the planting of spies using Confucius institutes, secretly paying many
academic researchers to steal technology (Example: Charles Lieber from Harvard), paying
newspapers to carry China Daily propaganda supplements (WaPo, NYT, LA Ttimes, The Boston
Globe, WSJ just for starters), the Houston embassy spying, They have done this stuff not just
to USA but most major countries in the world.
Now of course we can ask, "But where did they say they want to rule the world?". Well,
Hitler didn't either. In 1938, he solemnly swore to Neville Chamberlain, the British PM that
he had no intention of conquering another country. We all know what happened after that.
Naivete is dangerous in these situations. If a country acquires enough power, it will start
having imperial ambitions. It's human nature. Germany under Bismarck in 1880s tried to stay
away from conquering other countries as long as possible, but they couldn't resist the
temptation. Now none of this means China will try to dominate the world at any cost. If
others resist strongly enough, they will back off. But that's something we have to do, and
get others to do.
1. So China copied the way in which the US industrialized in the eighteenth and nineteenth
century. Following the Washington Consensus script has a history of leading to dependency
– Ha-Joon Chang has written some very good papers and books on the basic hypocrisy of
the West in this area. In the eighteenth century Britain protected its infant textile
industry against the Indian one with very high tariffs. They also stole woollen technology
from the Dutch.
2. This is Western propaganda, perhaps reflecting the IMF/World Bank efforts of yore upon
China. The "debt trap" BRI myth has been pretty much debunked among academic researchers, but
that doesn't fit the Western anti-China discourse.
3. Grabbing territory from all their neighbours? What territory? Compare the nine-dash line
mirrors to the declared hegemony of the US over the Caribbean and Central American nations
– backed up by repeated invasions and destabilizations (Haiti, Panama, Nicaragua,
Guatemala, Cuba etc.). Take a look at the US history of grabbing lands (the Philippines,
Puerto Rico, half of Mexico, Hawaii), China is exceedingly tame compared to US history, as
well as the US recent aggressions such as the illegal invasion of Iraq and destabilization of
Syria.
The MSM that you quote are the purveyors of fake news with no actual backing apart from
intelligence community briefings, the "stenographers of the intelligence community" as one
commentator put it. This is the classic propaganda designed to rile up the population to
support action against a new "enemy", very 1984.
1. Oh I know they are China is copying USA's policy in 18th and 19th century. That is what
is concerning. That is a successful playbook to gain a lot of economic power very quickly. Of
course the USA pointing fingers is hypocrisy. But that does not make this any less of a
threat.
2. Debunked by "academic researchers"? Care to share some sources? Multiple countries like
Malaysia, Kenya, Myanmar, Sierra Leone and Bangladesh have either cancelled projects or
trying to renegotiate them. The reason is because the projects are nothing but jobs and
demand creation programs for Chinese workers and companies. Contracts are awarded at inflated
rates to Chinese contractors without competitive bidding. Then they bring in workers and
equipment wholesale from mainland china. Some projects are economically viable, others are
just white elephants, like the highway in montenegro or a port/airport in Sri Lanka in the
middle of the jungle.
3. I am not denying what USA has done to other countries. China is just starting, so what
they do looks tame. Give them a little time.
I fully agree that the MSM are purveyors of fake news. I was referring to how they all
have taken Chinese money to print stuff favourable to them, and even articles entirely
written by Chinese foreign ministry. Now of course, they might change tack and start beating
the war drums if TPTB wants them to. That confirms my opinion that most MSM are just
mouthpieces for hire with no moral principles.
https://www.theguardian.com/news/2018/dec/07/china-plan-for-global-media-dominance-propaganda-xi-jinping
Please note, I am not defending all the terrible things America has done. Pointing out
that China is a threat need not come attached with any moral judgement on America.
Also, the proper response to China IMO should be more in economic policy than military
saber-rattling. Tariffs are just a start. Why are we not building more manufacturing in USA?
Sure, wages are high and prices will shoot up. But do we really need to import 15bn worth of
sneakers (that's about 200 mn pairs a year)? Let us make shoes in America that may cost twice
as mush, but three times more durable. Same with cellphones. Decrapifying products will go a
long way in making american manufacturing viable. But that requires great sacrifice by the
consumers. Shopping or goodies has been turned into a dopamine-drip. Investing class and
business are just as addicted to high profit margins & ROIs. Cut the dependence on China,
and watch them scramble to fix their internal issues like falling wages and unemployment. The
pity is we have lost the will as a nation to make such sacrifices.
I am not sure the will does not exist. I think the will might be suppressed and
thwarted.
We would need a Protectionist Party to explain everything you have touched on and run
candidates on that basis and on that program to see whether the diffuse and muffled will
might be uncovered and re-aggregated and recovered and weaponised for domestic political
re-conquest of government and hence of political economic policy.
I envision a delicious scenario-vision in which the Protectionist Party finally wins all
three branches and the Protectionist Party President makes a speech and at the end of that
speech, AND IN MANDARIN to to make sure the prime perpetrator of export aggression hears the
message and gets the point, the following phrase . . . . in MANDARIN, remember . . .
Hmmnm "If a country acquires enough power it will start having imperial ambitions?" I
agree completely with your statement. The rest seem pretty much what I have been reading in
the Washington Post and New York Times lately. I am not sure about their objectivity. One
thing is certain and that is that war talk very easily can slip into war. Having served in
the military for over 30 years and deployed many times the best advice I ever got was from
that political analyst Mike Tyson, "Everybody has a plan until they get punched in the face."
War talk with China and Russia and Iran and trying to cripple economies with sanctions never
has and never will work but we can always try to educate a new young generation of
politicians like Joe.
Nah. But I know we need a military to defend ourselves, especially if something that
happens on the other end of the world would make the supermarket shelves go empty in a jiffy.
I think we need to reduce external economic dependence and then cut the military to a
fraction of it's current size, just enough to patrol the borders and coasts.
The bulk of the "rampant technology theft" was their insistence on building the
requirement for specified technology transfers into the agreements that let companies set up
shop there. They had watched neocolonialist behavior long enough not to want to be locked
permanently into a subservient position. This part was of course not theft at all. For the
rest of it, yeah, industrial espionage is a thing. But one notes that the firms generally
stayed there.
Currency manipulation is only bad when the other guys do it. We have periodically
deliberately weakened the dollar to try to address balance of trade issues, and in the
aftermath of the '08 recession everybody was doing competitive devaluation, trying to
accomplish by that means what they would have tried tariffs for in an earlier era.
I haven't seen a decent scholarly piece that concurs with the propaganda about belt and
road loans as sinister debt traps.
Territorial disputes aside, most of those neighbors have China as a major trading partner,
and none of the disputes have gone hot. The neighbors are also not entirely lacking in power.
Russia and India are nuclear powers, and if Japan chose to field a more formidable military
it could easily do so.
One of the hardest and most disturbing lessons we've learned from the Nixon China gambit
was that capitalism doesn't necessarily lead to democracy. Nor is a democratic society a
prerequisite for capitalism to flourish.
That came much after the Nixon thaw with China, after the fall of Soviet Union. Francis
Fukuyama solemnly proclaiming "End of History" and all that. The turning point was China
being let into WTO in 1999. Clinton, Bush II and Obama swallowed that "capitalism leads to
democracy" idea hook, line and sinker.
Technology theft, spun any way, is still technology theft. Sure, Industrial espionage is
"a thing" that everyone does. So is currency manipulation. Since we feel guilty that USA
gained global power by doing all these, we should let others do it too, just to even the
scales? Foreign policy mixed with moral feelings is a recipe for disaster.
The one good thing about bringing back neoclassical economics.
We know what led to Wall Street Crash in 1929. The same mistakes have been repeated
globally.
At 25.30 mins you can see the super imposed private debt-to-GDP ratios.
The financial crisis appears to come out of a clear blue sky when you use an economics
that doesn't consider debt, like neoclassical economics, as it did in 1929.
1929 – US
1991 – Japan
2008 – US, UK and Euro-zone
The PBoC saw the Chinese Minsky Moment coming and you can too by looking at the chart
above. The Chinese were lucky; it was very late in the day. Everyone has made the same
mistake; only the Chinese worked out what the problem was.
The Chinese don't seem too worried about the competition.
Putin and Xi are jealous of Wall Street.
No matter how hard they try, they have never been able to inflict the same level of damage to
the West, Wall Street managed in 2008.
The Chinese know what to look out for to spot a financial crisis coming. They look for the
problems brewing in private debt and inflated asset prices.
This nice Chinese chap tried to warn the Americans the US stock markets was at 1929 levels at
Davos 2018. https://www.youtube.com/watch?v=1WOs6S0VrlA
We know what a correction from 1929 levels looks like.
We have seen it before.
"They've done it again, I can't believe my luck. US stock markets are at 1929 levels,
this isn't going to end well" president Xi
Xi has probably rung Putin up to tell him the good news.
I bet they had a right old laugh.
Luckily for the Chinese, the Americans have no idea what they are doing.
The Chinese have been making all the classic mistakes of neoclassical economics, but have
been learning from them to ensure they don't make the same mistakes again.
We haven't been doing this in the West.
At the end of the 1920s, the US was a ponzi scheme of inflated asset prices.
The use of neoclassical economics, and the belief in free markets, made them think that
inflated asset prices represented real wealth.
1929 – Wakey, wakey time
The use of neoclassical economics, and the belief in free markets, made them think that
inflated asset prices represented real wealth, but it didn't.
It didn't then, and it doesn't now.
What was the ponzi scheme of inflated asset prices that collapsed in 2008? "It's nearly $14 trillion pyramid of super leveraged toxic assets was built on the back of
$1.4 trillion of US sub-prime loans, and dispersed throughout the world" All the
Presidents Bankers, Nomi Prins.
It wasn't real wealth, just a ponzi scheme of inflated asset prices.
Real estate – the wealth is there and then it's gone.
1990s – UK, US (S&L), Canada (Toronto), Scandinavia, Japan, Philippines,
Thailand
2000s – Iceland, Dubai, US (2008), Vietnam
2010s – Ireland, Spain, Greece, India
It wasn't real wealth, just a ponzi scheme of inflated asset prices.
It's been the same since Tulip Mania.
You can inflate asset prices, keeping them inflated is the hard bit.
Oh yeah, we had a system like that where all the wealth stayed at the top. We called it
Feudalism. The Americans are progressing in the reverse direction.
Perhaps certain counter-Feudalist towns, cities, communities, etc. should study up on how
certain Free Towns and Free Republics survived in Europe during the Feudalist Period. And try
to set themselves up as the Free Towns, Free Cities, Free Republics in the midst of a future
Feudalist America.
Thank you, RMO, you summarized US-Russian relations from 1991 to the start of the Putin
era much better than me. We really missed an opportunity to integrate the Russians into the
US-EU alliance (such as it was), especially with regard to NATO.
Bush Jr. compounded this failure by mistaking Putin for an ally in the war against terror,
thinking that our concerns in the middle east paralleled Putin's affairs in Chechen. They
could have, but didn't. Putin was a more strategic thinker.
My sense is that Putin played a waiting game for much of the first two decades of this
century...
"... How convinced should anyone be when dismissing the message of metrics like these? To be sure, both the market and economy are in uncharted waters. It's possible -- perhaps likely -- that old standards don't apply when something as random as a virus is behind the stress. At the same time, many a portfolio has been squandered through complacency. Market veterans always warn of fortunes lost by investors who became seduced by talk of new rules and paradigms. ..."
"... At 35, the CAPE is at its highest since the early 2000s. ..."
"... Another indicator raising eyebrows is called Tobin's Q. The ratio -- which was developed in 1969 by Nobel Prize-winning economist James Tobin -- compares market value to the adjusted net worth of companies. It's showing a reading just shy of a peak reached in 2000. T ..."
"... the signal sent by the "Buffett Indicator," a ratio of the total market capitalization of U.S. stocks divided by gross domestic product. ..."
"... Still, it's hard to ignore the risks to underlying assumptions. While rock-bottom rates underpin many of the arguments, this year has shown that the Fed still is willing to let longer-term interest rates run higher. And betting on huge upside earnings surprises is risky too -- it's rare to see a 16% beat historically. Before last year, earnings had exceeded estimates by an average 3% a quarter since 2015. ..."
"... "This happens in every bubble," said Bill Callahan, an investment strategist at Schroders. "It's: 'Don't think about the traditional value metrics, we have a new one.' It's: 'Imagine if everyone did XYZ, how big this company could be.'" ..."
"... To Scott Knapp, chief market strategist of CUNA Mutual Group, abandoning standard valuation measures because the environment has changed places investors in "pretty sketchy territory." Talk of watershed moments rendering traditional metric irrelevant as a signal, he says. "That's usually an indication we're trying to justify something," he said. ..."
Shiller P/E. Tobin's Q. Buffett Indicator. Ignore them all?
It's 'usually an indication we're trying to justify something'
Everywhere you look, there's a valuation lens that makes stocks look frothy. Also everywhere you look is someone
saying don't worry about it.
The so-called
Buffett
Indicator
. Tobin's Q. The S&P 500's forward P/E. These and others show the market at stretched levels, sometimes
extremely so. Yet many market-watchers argue they can be ignored, because this time really is different. The
rationale? Everything from Federal Reserve largesse to vaccines promising a quick recovery.
How convinced should anyone be when dismissing the message of metrics like these? To be sure, both the market and
economy are in uncharted waters. It's possible -- perhaps likely -- that old standards don't apply when something as
random as a virus is behind the stress. At the same time, many a portfolio has been squandered through complacency.
Market veterans always warn of fortunes lost by investors who became seduced by talk of new rules and paradigms.
"Every time markets hit new highs, every time markets get frothy, there are always some talking heads that argue:
'It's different,'" said Don Calcagni, chief investment officer of Mercer
Advisors
.
"We just know from centuries of market history that that can't happen in perpetuity. It's just the delusion of
crowds, people get excited. We want to believe."
Source: Robert Shiller's website
Robert Shiller is no apologist. The Yale University professor is famous in investing circles for unpopular valuation
warnings that came true during the dot-com and housing bubbles. One tool on which he based the calls is his
cyclically adjusted price-earnings ratio that includes the last 10 years of earnings.
While it's flashing warnings again, not even Shiller is sure he buys it. At 35, the CAPE is at its highest since the
early 2000s. If that period of exuberance is excluded, it clocks in at its highest-ever reading. Yet in a recent
post
,
Shiller wrote that "with interest rates low and likely to stay there, equities will continue to look attractive,
particularly when compared to bonds."
Another indicator raising eyebrows is called Tobin's Q. The ratio -- which was
developed
in
1969 by Nobel Prize-winning economist James Tobin -- compares market value to the adjusted net worth of companies.
It's showing a reading just shy of a peak reached in 2000. To Ned Davis, it's a valuation chart worth being wary
about. Still, while the indicator is roughly 40% above its long-term trend, "there may be an upward bias on the ratio
from technological change in the economy," wrote the Wall Street veteran who founded his namesake firm.
Persuasive arguments also exist for discounting the signal sent by the "Buffett Indicator," a ratio of the total
market capitalization of U.S. stocks divided by gross domestic product. While it recently reached its highest-ever
reading above its long-term trend, the methodology fails to take into consideration that companies are more
profitable than they've ever been, according to Jeff Schulze, investment strategist at ClearBridge Investments.
"It's looked extended really for the past decade, yet you've had one of the best bull markets in U.S. history," he
said. "That's going to continue to be a metric that does not adequately capture the market's potential."
At Goldman Sachs Group Inc., strategists argue that however high P/Es are, the absence of significant leverage
outside the private sector or a late-cycle economic boom points to low risk of an imminent bubble burst. While people
are shoveling money into stocks at rates that have signaled exuberance in the past, risk appetite is rebounding after
a prolonged period of aversion, according to the strategists, who also cite low interest rates.
"Today is a very different situation -- I don't think we've got a broad bubble," Peter Oppenheimer, chief global
equity strategist at the firm, said in a recent interview on Bloomberg Television. "Given the level of real rates,
where they are, it's still likely to be broadly supportive for equities versus bonds."
Another rationale employed to dismiss certain valuation metrics is the earnings cycle. Corporate America is just
emerging from a recession, with profits forecast to stage a strong comeback. The strong outlook for profits is why
many investors are giving similarly stretched valuations the benefit of the doubt. Trading at 32 times reported
earnings, the S&P 500 looks quite expensive, but with income forecast to jump 24% to $173 a share this year, the
multiple drops to about 23.
The valuation case becomes more favorable should business leaders continue to blow past expectations. For instance,
if this year's earnings come in at 16% above analyst estimates, as they did for the previous quarter, that'd imply a
price-earnings ratio of less than 20. While that exceeds the five-year average of 18, Ed Yardeni is not troubled by
what he calls "the New Abnormal."
"Valuation multiples are likely to remain elevated around current elevated levels because fiscal and monetary
policies continue to flood the financial markets with so much free money," said the founder of Yardeni Research Inc.
He predicts the S&P 500 will finish the year at 4,300, about an 8% gain from current levels.
Still, it's hard to ignore the risks to underlying assumptions. While rock-bottom rates underpin many of the arguments, this year
has shown that the Fed still is willing to let longer-term interest rates run higher. And betting on huge upside earnings
surprises is risky too -- it's rare to see a 16% beat historically. Before last year, earnings had exceeded estimates by an
average 3% a quarter since 2015.
"This happens in every bubble," said Bill Callahan, an investment strategist at Schroders. "It's: 'Don't think about the
traditional value metrics, we have a new one.' It's: 'Imagine if everyone did XYZ, how big this company could be.'"
Returns of 2%
Valuations are never useful market-timing tools because expensive stocks can get more expensive, as was the case during the
Internet bubble. Yet viewed through a long-term lens, valuations do matter. That is, the more over-valued the market is, the
lower the future returns. According to a study by Bank of America strategists led by Savita Subramanian, things like
price-earnings ratios could explain 80% of the S&P 500's returns during the subsequent 10 years. The current valuation framework
implies an increase of just 2% a year over the next decade, their model shows.
To Scott Knapp, chief market strategist of CUNA Mutual Group, abandoning standard valuation measures because the environment has
changed places investors in "pretty sketchy territory." Talk of watershed moments rendering traditional metric irrelevant as a
signal, he says.
"That's usually an indication we're trying to justify something," he said.
"In a community where the primary concern is making money, one of the necessary rules is to
live and let live. To speak out against madness may be to ruin those who have succumbed to it.
So the wise in Wall Street are nearly always silent. The foolish thus have the field to
themselves."
John Kenneth Galbraith, The Great Crash of 1929
"Foolishness is a more dangerous enemy of the good than malice. One may protest against
evil; it can be exposed and, if need be, prevented by use of force. Evil always carries within
itself the germ of its own subversion in that it leaves behind in human beings at least a sense
of unease.
In conversation with them, one virtually feels that one is dealing not at all with a person,
but with slogans, catchwords and the like that have taken possession of them. They are under a
spell, blinded, misused, and abused in their very being."
Dietrich Bonhoeffer, Prisoner for God: Letters and Papers from Prison
"The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated
communist, but people for whom the distinction between fact and fiction, true and false, no
longer exists."
Hannah Arendt, The Origins of Totalitarianism
"When we trade the effort of doubt and debate for the ease of blind faith, we become
gullible and exposed, passive and irresponsible observers of our own lives. Worse still, we
leave ourselves wide open to those who profit by influencing our behavior, our thinking, and
our choices. At that moment, our agency in our own lives is in jeopardy."
Margaret Heffernan
Today was a general wash and rinse in the markets.
Wax on, wax off.
If you look at the charts you will see the deep plunges in the early trading hours in stocks
and the metals, especially silver.
Simply put, it is called running the stops.
This is not 'the government' doing this.
These are the monstrous financial entities that we have allowed lax regulation and years of
propagandizing to create, in the biggest Banks and hedge funds.
Most will run back to the familiar sources of their ideological addiction, the so-called
'news sites' that thrive on the internet and alternative radio funded by the oligarchs.
If you are one of those who cannot wait to run back to your familiar ideological watering
hole to relieve the tension of thought, you might just be one of the willfully blind and
lost.
Truth is more palatable to the sick at heart when it has been twisted out of shape.
The good news perhaps is that a cleaning out like this often proceeds a resumption of a move
higher.
First they kick off the riff raff. Oh, certainly that does not include you, but those
others, right?
Or not. It is not easy to think like a criminal when you are not privy to the same jealously
guarded information and perverse perspective on life.
On the lighter side I have experienced no side effects from the first dose of the
Coronavirus vaccine which I had the other day.
Let's see if the second shot has the same results.
The whole experience reminded me of 'Sabin Oral Sunday' back in 1960. I don't recall any
anti-vaxxer or ideologically driven whack-a-doodlism back then, but I was too young to
care. And polio shots were no fun. But it beat doing time in an iron lung.
How many people are really out of work? The answer is surprisingly difficult to ascertain.
For reasons that are likely ideological at least in part, official unemployment figures greatly
under-report the true number of people lacking necessary full-time work.
That the "reserve army of labor" is quite large goes a long way toward explaining the
persistence of stagnant wages in an era of increasing productivity.
How large? Across North America, Europe and Australia, the real unemployment rate is
approximately double the "official" unemployment rate.
The "official" unemployment rate in the United States, for example, was 5.5 percent for
February 2015. That is the figure that is widely reported. But the U.S. Bureau of Labor
Statistics keeps track of various other unemployment rates, the most pertinent being its "U-6"
figure. The U-6 unemployment rate includes all who are counted as unemployed in the "official"
rate, plus discouraged workers, the total of those employed part time but not able to secure
full-time work and all persons marginally attached to the labor force (those who wish to work
but have given up). The actual U.S. unemployment rate for February 2015, therefore, is 11 percent .
Canada makes it much more difficult to know its
real unemployment rate. The official Canadian
unemployment rate for February was 6.8 percent, a slight increase from January that
Statistics Canada attributes to "more people search[ing] for work." The official measurement in
Canada, as in the U.S., European Union and Australia, mirrors the official standard for
measuring employment defined by the International Labour Organization -- those not working at
all and who are "actively looking for work." (The ILO is an agency of the United Nations.)
Statistics Canada's closest measure toward counting full unemployment is its R8 statistic,
but the R8 counts people in part-time work, including those wanting full-time work, as
"full-time equivalents," thus underestimating the number of under-employed by hundreds of
thousands,
according to an analysis by The Globe and Mail . There are further hundreds of
thousands not counted because they do not meet the criteria for "looking for work." Thus
The Globe and Mail analysis estimates Canada's real unemployment rate for 2012 was
14.2 percent rather than the official 7.2 percent. Thus Canada's true current unemployment rate
today is likely about 14 percent.
Everywhere you look, more are out of work
The gap is nearly as large in Europe as in North America. The official European Union
unemployment rate was 9.8
percent in January 2015 . The European Union's Eurostat service requires some digging to
find out the actual unemployment rate, requiring adding up different parameters. Under-employed
workers and discouraged workers comprise four percent of the E.U. workforce each, and if we add
the one percent of those seeking work but not immediately available, that pushes the
actual unemployment rate to about 19 percent.
The same pattern holds for Australia. The Australia Bureau of Statistics revealed that its
measure of "extended labour force under-utilisation" -- this includes "discouraged" jobseekers,
the "underemployed" and those who want to start work within a month, but cannot begin
immediately -- was
13.1 percent in August 2012 (the latest for which I can find), in contrast to the
"official," and far more widely reported, unemployment rate of five percent at the time.
Concomitant with these sobering statistics is the length of time people are out of work. In
the European Union, for example, the long-term unemployment rate -- defined as the number of
people out of work for at least 12 months --
doubled from 2008 to 2013 . The number of U.S. workers unemployed for six months or longer
more than tripled from
2007 to 2013.
Thanks to the specter of chronic high unemployment, and capitalists' ability to transfer
jobs overseas as "free trade" rules become more draconian, it comes as little surprise that the
share of gross domestic income going to wages has declined steadily. In the U.S., the share has
declined from 51.5 percent in 1970 to about 42 percent. But even that decline likely
understates the amount of compensation going to working people because almost all gains in
recent decades has gone to the top one percent.
The increased ability of capital to move at will around the world has done much to
exacerbate these trends. The desire of capitalists to depress wages to buoy profitability is a
driving force behind their push for governments to adopt "free trade" deals that accelerate the
movement of production to low-wage, regulation-free countries. On a global basis, those with
steady employment are actually a minority of the world's workers.
Using International Labour Organization figures as a starting point, professors John Bellamy
Foster and Robert McChesney calculate that the "global reserve army of labor" -- workers who
are underemployed, unemployed or "vulnerably employed" (including informal workers) -- totals
2.4 billion. In contrast, the world's wage workers total 1.4 billion -- far less! Writing in
their book The Endless
Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to
China , they write:
"It is the existence of a reserve army that in its maximum extent is more than 70 percent
larger than the active labor army that serves to restrain wages globally, and particularly in
poorer countries. Indeed, most of this reserve army is located in the underdeveloped
countries of the world, though its growth can be seen today in the rich countries as well."
[page 145]
The earliest countries that adopted capitalism could "export" their "excess" population
though mass emigration. From 1820 to 1915, Professors Foster and McChesney write, more than 50
million people left Europe for the "new world." But there are no longer such places for
developing countries to send the people for whom capitalism at home can not supply employment.
Not even a seven percent growth rate for 50 years across the entire global South could absorb
more than a third of the peasantry leaving the countryside for cities, they write. Such a
sustained growth rate is extremely unlikely.
As with the growing environmental crisis, these mounting economic problems are functions of
the need for ceaseless growth. Once again, infinite growth is not possible on a finite planet,
especially one that is approaching its limits. Worse, to keep the system functioning at all,
the planned
obsolescence of consumer products necessary to continually stimulate household spending
accelerates the exploitation of natural resources at unsustainable rates and all this
unnecessary consumption produces pollution increasingly stressing the environment.
Humanity is currently consuming the equivalent of one and a
half earths , according to the non-profit group Global Footprint Network. A separate report
by WWF–World Wide Fund For Nature in collaboration with the Zoological Society of London
and Global Footprint Network, calculates that the Middle East/Central Asia, Asia-Pacific, North
America and European Union regions are each consuming about double their
regional biocapacity.
We have only one Earth. And that one Earth is in the grips of a system that takes at a pace
that, unless reversed, will leave it a wrecked hulk while throwing ever more people into
poverty and immiseration. That this can go on indefinitely is the biggest fantasy.
"Underfunded" is a euphemism for "have students with low test scores." E.g., "Washington
D.C.'s underfunded schools."
D.C. spent around $30,115 per pupil in 2016-17, while in 2017-18, nearby Arlington County
was expected to spend $19,340, the City of Falls Church to spend $18,219; the City of
Alexandria, $17,099; Montgomery County, $16,030; Fairfax County, $14,767; Prince George's
County, $13,816; Loudoun County, $13,688; City of Manassas, $12,846; City of Manassas Park,
$11,242; and Prince William County, $11,222.
In 2015, you wrote extensively about your concerns over neoliberalism in academia, calling
it the worst threat to education. You wrote: "In order to offset the lack of public funding,
administrators have raised tuition with students becoming the primary consumers and
debt-holders. Institutions have entered into research partnerships with industry shifting the
pursuit of truth to the pursuit of profits." To accelerate this "molting," they have "
hired a larger and larger number of short-term, part-time adjuncts ."
This has created large armies of transient and disposable workers who "are in no position to
challenge the university's practices or agitate for "democratic rather than monetary
goals."
Yes, neoliberalism is hegemonic. It affects all minority communities...
"Underfunded" is a euphemism for "have students with low test scores." E.g., "Washington
D.C.'s underfunded schools." Presumably, it means "underfunded relative to some theoretical
amount of money, such as a gajillion dollars, that would be sufficient to raise these
students' test scores to average."
My dad was a school administrator in one of the top county public school systems in the
country. A politically deep-blue part of the country. He retired in the early '80's. I
remember him telling me once after he retired that his school(s) would get constant demands
from the school board to raise black (not many Hispanics then) test scores. He said the
school(s) focused all kinds of resources on black students which yielded no appreciable
results. He then said, "You know how we raised black test scores to the level demanded? We
fudged the numbers."
Justin Anderson
Sat, March 27, 2021, 8:15 AM
Study: The typical investment adviser can't beat the S&P 500
If you work with an investment adviser, you've probably had a moment or two when you've lamented how much you're paying in
fees.
And it's normal and healthy to regularly ask yourself -- and your adviser -- what you're supposed to be getting in return for
those fees.
If your adviser answers that they're paid to "beat the market," it may be time to seriously re-evaluate the relationship.
Because you might do better just using
one
of today's popular investing apps
and putting your money into an S&P 500 index fund.
The fact is, most people who are paid to deliver higher returns than the stock market as a whole can't do it. Data from the
S&P Dow Jones Indices shows 60% of large-cap equity fund managers underperformed the S&P 500 in 2020.
It was the 11th straight year the majority of fund managers lost to the market.
There are plenty of good reasons to pay an adviser or certified financial planner to
help
handle your investments
, but beating the S&P 500 isn't one of them. The data says it probably won't happen.
What financial pros are up against
Andrey_Popov / Shutterstock
The S&P 500 has delivered inflation-adjusted returns of about 7% per year, on average, for the past 40 years.
So to beat the market, a financial adviser would need to design a portfolio that gets better returns than that.
Is it possible in a given year? Sure it is -- plenty of investors and mutual fund managers do it.
But is it possible to predict who will do it? And does the possibility justify the fees charged by the most prestigious fund
managers, many of which operate on a "two and 20" model (2% of the portfolio's value plus 20% of profits)?
Buffett's famous bet
Laurent Gillieron/EPA/Shutterstock
Warren Buffett, who's justifiably famous for his
sage
money advice
, has frequently argued that, for most people, a simple market-pegged portfolio is a smarter investment
strategy than trying to pick winning stocks.
In January 2008, Buffett put this belief to the test: He bet a prominent hedge fund manager a million dollars that an S&P
index fund would deliver better returns over 10 years than a fancy and expensive hedge fund portfolio consisting of actively
selected stocks.
Buffett made this bet
before
the stock market collapsed during the financial crisis of that same year. But it didn't
matter -- by 2015, the hedge fund manager had waved the white flag and admitted he'd lost.
Buffett's index fund had made 7.1% per year; the hedge fund had made 2.2%. It wasn't even close.
Absurd NFT PRices Expose a Global Financial House of Cards
BY SKWEALTHACADEMY
FRIDAY, MAR 26, 2021 - 5:59
The
insanity of absurd NFT prices reveals the fraud of the global currency system. The pricing for assets worldwide has gone
insane at a time when the vast majority of the world's population became poorer, not wealthier, over the past 12 months due
to the global economic lockdowns. As an example, there was an article in the Philadelphia Inquirer the other day of
a
cassette tape of hip hop icon Nas's Illmatic album selling for $13,999
. Not a CD, but a cassette tape. A rectangular
piece of cardboard, known as an NBA trading card, for star
Luka
Doncic's rookie trading card, recently auctioned for $4.6M.
Luka Doncic is not a star that played in 1925, and for this
reason, his rookie card is worth so much. Luka Doncic entered the NBA in the 2018-19 season, less than three years ago.
Nostalgic or collector items are simply selling for insane price because, in my opinion, wealthy people have captured so
much of the world's wealth through a global currency system designed and engineered to produce this end result, that they
have no better use for their money than to pay $14,000 for a music item that the vast majority of people do not even have
the necessary hardware to actually play and to pay more than $4.5M for a piece of cardboard. Anyone that truly understands
the difference between a sound and an unsound monetary system realizes that the likelihood, under a sound monetary system,
of people paying exorbitant prices for the types of assets and NFTs described above would be a fraction of the probability
at which they are occurring today.
Banksy, a
UK-based street artist infamous for mocking the very wealthy people that pay millions for his artwork, even titling a piece
"Morons" which depicted an art auction with a framed picture of the words "I can't believe you morons actually buy this
shit". Instead of being offended by the artist's mockery, someone paid nearly 44,000 pounds for it and it recently sold
for nearly 10 times the original purchase price when the piece was destroyed and the act of destruction was turned into an
NFT. By the way Banksy also sold a very simple drawing of a girl with a red balloon that was mounted inside a frame in
which he had hidden a shredder. After it sold for $1.4M, Banksy remotely activated the hidden shredder and shredded his
artwork into thin strips as perhaps "revenge" against the idiocy of narcissistic, wealthy art collectors that can't find
any better use of their money than purchasing stencil created art for which no rational person would ever pay $1.4M. To
demonstrate the idiocy of the art world, Sotheby's immediately coined the shredding of the art piece as "the first work in
history ever created during a live auction", which art collectors worldwide seemed to accept, and thereby increased the
value of the destroyed piece of art to perhaps as high as double the original auction price at the current time and
avoiding a more rational valuation for the art piece to near zero.
I once read
a book called the $12M Stuffed Shark, in which the author revealed that US hedge fund manager Steve Cohen paid $12M to an
artist to kill a shark and put it in a vat of plexiglass sealed formaldehyde that he could display in the foyer of his
house and basically concluded, after a careful introspection into the art world, that pieces of art like pyramids built
from tiny Godiva chocolates and stainless-steel colored balloon animals
($58M
or more)
would be priced at whatever price dealers could convince the dumbest rich person it was worth. Certainly this
conclusion seemed to be supported when someone purchased an
"art
installation" of a banana taped to the wall with duct tape at a Miami Beach art gallery for $120,000 at the end of 2019
.
When people conclude that the best use for $5M or $58M is to buy a piece of cardboard or a steel balloon animal during a
period in which Rome is burning (i.e. exploding homelessness numbers in Los Angeles nearing 70,000 as evidenced
here
and
here
),
either this is a sign of the fraud of the monetary system, the decline of civilization, or both. If you have ever lived in
Los Angeles, as I have, and watch the video referenced in the second link, you will find it astonishing that massive
homeless encampments have sprung up throughout Los Angeles in areas that prior to recent years, had no homelessness.
(depending on the social media platform you may be watching this on, the soaring prices for which art that I consider to be
the lowest form of art that many do not even consider as art is selling for such absurd prices, including NFTs that I will
soon discuss, is certainly reflective of the rapid decline of civilization.
This rapid
decline of civilization is also reflected in the fact that giant titans of the tech world and social media platforms
continue to promote and push the most morally reprehensible content to the top positions of success on their platforms.
When popular YouTube Logan Paul visited the "suicide forest" in Japan and found a dead body hanging from the tree, he
filmed it and mocked the dead person and YouTube quickly promoted his video as one of their top trending videos on their
entire platform for 24 hours, until Logan Paul, not YouTube executives, deleted the video due to the outrage it provoked.
Another popular YouTuber, David Dobrik, has had many of his reprehensible videos monetize bullying and belittling of
others, often promoted on YouTube among the top trending videos. Recently Dobrik came under fire for allegedly monetizing a
video of an actual rape on his channel, and he was roundly mocked when his initial apology consisted of trying to blame the
rape victim, who was allegedly underage and too drunk to consent to sex. In his "apology", Dobrik stated he always gains
consent for his videos, but sometimes people he victimizes consent at first but then change their minds later, and that is
why it appears in many of his videos that he is monetizing morally reprehensible behavior. In any event, YouTube executives
allegedly allowed such morally and cowardly behavior to be monetized to massive sums of income for such YouTubers and seem
to be more focused on demonetizing anyone that challenges a narrative, true or false, forwarded by the oligarchs.
And as
ludicrous as are the prices paid for some of the assets I've mentioned above, the level of insanity paid for NFTs, in my
opinion, are at an even exponentially higher level. For those of you that may not know what are NFTs, Non-Fungible Tokens
are unique blockchain-based digital assets that represent an increasing number of commodities, from art and real estate to
collectibles like sports trading cards. One platform, Original Protocol, recently auctioned off the world's first NFT music
album by American DJ 3LAU. Collectively, the artist's fanbase
paid
out more than $11 million
for 33 NFTs contained on 3LAU's album Ultraviolet. In this case, since musicians are
routinely ripped off by giant record labels and often have such suffocating, unfair contracts that make it near impossible
to earn any significant income from album releases, the digitization of music in the form of NFTs that allow musicians to
control their income is a wonderful aspect of the new digital economy of NFTs.
The
Non-Fungibility of NFTs and Most Cryptocurrencies Disqualify Them for Use in Financial Derivative Currency Swaps
NFTs sell
digital representations of items, including some that used to be represented in the physical world, like trading cards and
pieces of art. As is the case in the fine art world, an NFT's price is the highest price you can convince someone to pay
for it, a pool of clients that often overlaps with the over indulgent, narcissistic people that comprise the bidders for
modern art pieces that sell for millions of dollars. Perhaps the most amazing quality of NFTs is that they actually have a
more meaningful value than any cryptocurrency not backed by any type of hard asset. For example, bitcoin is a digital
asset, but one would be hard pressed to describe its intrinsic value. One cannot say its fungibility is its price because
its price is denominated in fiat currencies with intrinsic values of near zero. Furthermore, for those that constantly and
very wrongly argue that non hard-asset backed cryptocurrencies are sound money, if bankers truly believed that bitcoin even
remotely qualified as sound money, they would have zero problem offering currency swap derivative contracts between any
fiat currency and bitcoin.
Yet, there
is not a single corporation in the entire world that has a currency swap that hedges their corporate cash treasury holdings
with bitcoin. You can never have any type of financial contract without unlimited risk if it is denominated in bitcoin in
which both parties realistically have no idea of the price range of that currency for the maturity of that contract. No
rational party will lock themselves into a contract in which a currency presents unlimited risk to them. The simple
understanding of why there are no derivative currency swaps or hedging contracts denominated in bitcoin should easily
explain to any rational person the very reason why BTC is not considered as sound money by a single banker in the entire
world. On the contrary, even as volatile in price as gold and silver may be, gold and silver mining companies routinely
hedge their inventory risk and their revenue risk of yet-to-be-mined gold and silver ounces by establishing open positions
of gold and silver futures contracts years into the future.
You can't
argue that BTC's intrinsic value is the block of the blockchain that records the transaction, because whether that block is
used to record an NFT, BTC, or ownership of real estate, a photo or song, the price represented by that block could
possibly vary from just a few dollars to several million dollars. So the blockchain has no intrinsic value either. However,
with NFTs, its value, is more uniquely determinable than the block upon which a bitcoin transaction is stored that records
the price of bitcoin, because that value is simply the highest price willing to be paid by all available bidders at any
given time. If there are no available bidders willing to bid on a particular NFT for weeks or perhaps months on end, then
one can assume the price of that NFT, even if the last paid price was $100,000, is likely zero. But even if there is one
available bidder for that NFT at a price of $1,000,000 then the market price of that NFT is $1M. Though one may state that
the bidding mechanism is much more controlled in BTC markets and that BTC could never be priced at zero or $1M per BTC in
such a cavalier manner that mimics the pricing of NFTs, the similarities between the pricing mechanisms based upon lack of
fungibility should not be ignored when considering the inherent risk imbedded in the price of BTC in its near $60,000 per
coin current price. You will either understand this risk and behave accordingly, or ignore this risk and likely expose
yourself to strong downside risk in the future at some point that should be expected but will remain unexpected to those
that cannot, or will not, accept this existing risk.
The five
biggest whales that own BTC in order from top to bottom,
are
believed to be as follows:
(1) The collective of institutions/people called Satoshi Nakamoto; (2) The FBI; (3) The
Winklevoss Twins; (4) Micree Zhan; and (5) Jihan Wu. Other notable owners among the top 10 BTC whales are Huobi, Tim Draper
and the North Korean State. In 2017, Bloomberg reported that only 1,000 people owned 40% of all BTC in the entire world.
Given that in the past two years, it has been reported that the top whales had been cornering the BTC market and increasing
their market share, it would not be surprising if they had increased their market share to 50% or perhaps even higher by
2021. In any event, this translates into 0.00012658% of the world's population likely controlling majority ownership of
BTC. I don't know of any world in which such a statistic does not translate into enormous risk.
Unanswered
Questions
But
fungibility is what reveals why cryptocurrencies like BTC and NFTs cannot ever qualify as sound money. For those that don't
understand why sound money needs to be a fungible asset, take gold for example. Fungibility essentially means that money
should never vary in its qualitative properties but only its quantitative properties. All gold has electroconductivity
properties no matter its form. Electroconductivity is an intrinsic quality of gold. Because all purified four nine gold has
the same density, the same volume will always be measured by the exact same weight in grams, again another fungible quality
of gold. However, depending on how paper gold futures markets are being manipulated and the date, that same gram of gold
will vary wildly in fiat currency price. Fiat currency price, thus can never be the quantitative property used to value
gold. Weight is the constant that should be used for gold's value when it is to be used as sound money, because this
quantitative property is always unwavering, always constant no matter if one is using gold as money in Moscow, Capetown,
Montevideo, Santiago, Montreal, Phoenix, Miami, Mogadishu, Kiev, Paris, Heidelberg, Reykjavik, Chiangmai, or Seoul.
What
quantitative property of bitcoin that is consistent and always the same across all uses? This is a question without an
answer. For this same reason, NFTs could never serve as sound money either. No matter the latest fiat currency price paid
for a Banksy "Morons" drawing set on fire, how can one determine the exchange rate for this NFT and an NFT representing a
Mark Cuban tweet. Should the Banksy NFT be priced 10 million times higher than a Mark Cuban tweet NFT? Is an NBA TopShot
NFT worth 1/1000 the price of a Banksy burning piece of art NFT? And even though NFTs have more uniqueness than say, a
satoshi of BTC, because price assigned to that uniqueness is entirely subjective, the uniqueness leaves it no more fit to
use as sound money than a cryptocurrency that has no backing of a hard asset. Miami-based art collector Pablo Rodriguez-Fraile
proved the absurd pricing mechanism for NFT when he recently sold an NFT that he acquired for $66,666 in October,
a
10-second computer-generated video clip of a slogan-covered giant Donald Trump created by digital artist Beeple
, for
mor than 100 times his original cost at $6.6M.
The last
point of irony in the BTC is the solution to the unsound global fiat currency system narrative is that many HODLers of BTC
are well aware of the oligarch's use of their power consolidation strategy of (1) Create a crisis; (2) Present the solution
to the artificially created crisis; and (3) Implement the solution to consolidate power, yet will never give any type of
consideration to the possibility of how perfectly the creation of BTC, in response to the 2008 global financial crisis,
fits this exact historical narrative that oligarchs have repeatedly implemented, instead choosing to believe that BTC is
the special unique exception to this oft-deployed strategy.
This
despite, three US employees of the Central Bank, Galina Hale, Marianna Kudlyak, and Patrick Shultz, and one US university
professor, Arvind Krishnamurthy, admitting that the premise I presented to my social media followers in December of 2017,
when BTC hit $20,000, that the introduction of the US bitcoin futures market was going to be used to slash the BTC price
drastically, essentially writing the premise for the referenced US Central Banker paper five months before it was written.
In that paper, titled "How Futures Changed Bitcoin Prices", the four authors basically echoed my premise, and stated,
"We suggest
that the rapid rise of the price of bitcoin and its decline following issuance of futures on the CME is consistent with
pricing dynamics suggested elsewhere in financial theory and with previously observed trading behavior. Namely, optimists
bid up the price before financial instruments are available to short the market (Fostel and Geanakoplos 2012). Once
derivatives markets become sufficiently deep, short-selling pressure from pessimists leads to a sharp decline in value.
While we understand some of the factors that play a role in determining the long-run price of bitcoin, our understanding of
the transactional benefits of bitcoin is too imprecise to quantify this long-run price. But as speculative dynamics
disappear from the bitcoin market, the transactional benefits are likely to be the factor that will drive valuation."
While they
did not name the players in the BTC futures markets that drove BTC prices downward from $20,000 to $3,000 in 2018, the
implication is that Central Bankers were involved in this downward spiral. And if Central Bankers were involved in this
downward spiral, the downward price spiral would of course, been far easier to execute, if Central Bankers were also among
the members of the collective that constitutes the largest BTC whale, Satoshi Nakamoto. Even though these dots, though
purely speculative, are clearly possible, most every BTC HODLer that is confident in the achievement of end-year $300,000
BTC prices or higher, will never consider this possibility, even for a nanosecond, despite heavy suggestions of three US
Central Bank employees that Central Bankers were involved in the 2018 BTC price crash. But if one did, as is the rational
and logical thing to do, then one would have far greater difficulties distinguishing the mechanisms that set the price for
NFTs and BTC. And as the introduction of the first BTC ETFs seem to be on the near horizon now, one would be smart to heed
the lessons learned after trading of BTC futures was introduced at the end of 2017. Subscribe to my
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Listen to this article 6 minutes 00:00 / 06:06 1x Earnings, valuation and rampant speculation have all played a role in the extraordinary bull market that began a year ago this week. The latest combination of the three has a troubling reliance on the speculative element. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. Earnings, valuation and rampant speculation have all played a role in the extraordinary bull market that began a year ago this week. The latest combination of the three has a troubling reliance on the speculative element. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. U.S. 10-year Treasury yield Source: Tullett Prebon As of March 24 % Pre-pandemic peak of S&P 500 2020 '21 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 S&P 500 forward price/earnings ratio Source: Refinitiv Note: Weekly data S&P 500 peak 2020 '21 12 14 16 18 20 22 24 The parallel in the stock market is stocks going up when earnings -- or rather the expectation of earnings, since the market looks ahead -- go up. There is a risk of course, just as there is with debt: The earnings might not appear, and the stock goes back down. But earnings offer the least risky form of gains, and one that we should welcome as obviously justified. From the low in the summer, 2020 earnings forecasts jumped more than 10%, and expectations for this year rose more than 8%. Stocks responded. In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The parallel in the stock market is stocks going up when earnings -- or rather the expectation of earnings, since the market looks ahead -- go up. There is a risk of course, just as there is with debt: The earnings might not appear, and the stock goes back down. But earnings offer the least risky form of gains, and one that we should welcome as obviously justified. From the low in the summer, 2020 earnings forecasts jumped more than 10%, and expectations for this year rose more than 8%. Stocks responded. In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The parallel in the stock market is the The parallel in the stock market is the hunt for the greater fool . Sure, GameStop < shares bear no relation to the reality < of the company, but I can make money from buying an overpriced stock if I can find someone willing to pay even more because they "like the stock." Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks drove up the price of many tiny stocks, penny shares and those popular on Reddit discussion boards. Speculative bets such as the solar and ARK ETFs rallied up until mid-February, long after growth stocks peaked in August Price performance Source: FactSet *Russell 1000 indexes As of March 25, 7:02 p.m. ET % Invesco Solar Value* ARK Innovation Growth* Sept. 2020 '21 -25 0 25 50 75 100 125 The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. me title= A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. NEWSLETTER SIGN-UP
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Since June the story has reversed. Earnings forecasts have soared, and this year's earnings predictions are now
back up to match where 2020 earnings were expected to be before the recession. The bond yield has leapt almost
a full percentage point, and is higher than it was last February.
Yet, since June, the market's overall valuation is slightly up, and growth stocks are up 23%. Sure, cheap value
stocks responded as expected, rising almost a third and beating growth stocks. But if a lower bond yield
justified the rise in valuations, a higher bond yield ought to mean lower valuations, and probably outright
lower prices for growth stocks.
This is concerning but, directionally at least, is explained by the oddity of August, when bond yields rose
alongside valuation multiples and
the
biggest technology stocks leapt in price
. Measure it from the end of August, instead of the end of June,
and valuations have dropped a bit as bond yields have risen.
But the fall isn't enough to provide much comfort, and worse is that the highly speculative stocks popular with
many individual traders bucked the trend. Notable themes including electric cars, hydrogen, SPACs and wind and
solar power went into ludicrous mode until the middle of February this year, when the rise in bond yields
accelerated and the speculative stocks fell back some.
Share prices propelled more by earnings expectations than bond yields is healthy, while speculation is -- by its
nature -- fickle, and so a poor basis for holding on to a stock for long. My hope is that the contribution of pure
gambling to the overall level of the market is relatively small. But it is hard to explain why stocks should be
so much higher than before the pandemic panic when the earnings outlook is worse and bond yields are back to
where they were.
P Paul Avila SUBSCRIBER 8 hours ago U.S. stocks edged higher Wednesday as investors
awaited more testimony from Federal Reserve Chairman Jerome Powell.
Good grief. Is there any way his subordinates could prevent that? Perhaps lock him in a
supply closet until the market closes? Every time he opens his pie hole, I lose money.
W Will Bee SUBSCRIBER 8 hours ago Actually I suspect we are waiting for all the FED and
Treasury "people" to stop jawboning us so Markets can assimilate their irrelevance
Sellers got more than they listed for in 36% of deals in February, according to
Redfin
... the median home price of U.S. residences rose 14.4% last month, to $336,200, compared to
the same time the previous year, the data showed. That marks the biggest jump since July
2013.
Mar.24 -- Senator Elizabeth Warren (D-MA) asks Treasury Secretary Janet Yellen if she would
direct the Financial Stability Oversight Council (FSOC) to consider designating BlackRock as a
firm whose failure could threaten the financial system.
(Reuters) - Treasury Secretary Janet Yellen said on Wednesday it is important to "look
carefully" at systemic risks posed by asset managers, including BlackRock Inc, but said
designating them as systematically important financial institutions may not be the right
approach.
Yellen's remarks came in response to questions from Senator Elizabeth Warren, a longtime
Wall Street critic, who demanded to know why BlackRock and other large asset managers had not
been added to the list of designated institutions.
"I believe it is important to look very carefully at the risks posed by the asset management
industry, including BlackRock and other firms," Yellen, who as Treasury secretary, chairs the
Financial Stability Oversight Council (FSOC), which is charged with making such
designations.
"FSOC began to do that, I believe, in 2016 and 2017, but the risks it focused on were ones
having to do with open-end mutual funds that can experience massive withdrawals and be forced
to sell off assets that could create fire sales. That is actually a risk we saw materialize
last spring in March," she said.
In 2014, BlackRock and other asset managers won a battle in their fight against tighter
regulation when a panel of top financial regulators agreed to revamp their review of
asset-management firms to focus on potentially risky products and activities rather than
individual firms.
"I think that with respect to asset management, rather than focus on designation of
companies, I think it is important to focus on an activity like that and consider what the
appropriate restrictions are," Yellen said.
"The past two administrations in the US, and numerous global regulators, have studied our
industry for a decade and concluded that asset managers should be regulated differently from
banks, with the primary focus being on the industry's products and services," BlackRock said in
a statement.
The collapse of Greensill involved a predicable cast of unwise enablers, but it should
serve as a warning to the growing number of Alternative Asset buyers on the dangers of complex deals which promise much but
deliver less. Due diligence is critical in the highly illiquid alternatives sector.
You really can't make it up when it comes to the collapse of supply chain charlatan Greensill. I suspect it will make a great
film It should also send a judder down our spines, reminding us things are seldom what they seem in complex structured finance:
I'm wondering how many fund managers are quietly nervous about what's really in their alternative asset/direct lending
investment buckets this morning?
If I was a holder of complex European securitisation/receivables deals that promise much, but actually provide very little
information on the performance of underlying assets, then I might suddenly find an anxious desire to check just how they are
REALLY doing.
At least former UK premier David Cameron will be happy. A majority comprising Tory MPs on the UK's Treasury Select Committee
blocked
an inquiry
into Greensill yesterday on the basis it may be politically influenced. The fact
Call-Me-Dave
was
texting chancellor Rishi Sunak pleading for GFC to be a special case for Covid Bailout loans says it all about the dangers of
lobbying. The SNP will be equally delighted at the lack of scrutiny of dodgy dealings up in the Highlands.
The Greensill collapse is unlikely to be the last time financial chicanery is exposed as
sham. And that is why holders of European Alternatives and Asset backed transactions should be nervous. The lessons of the
Greensill deals are multiple:
Don't assume the deals you are sold are what you are told they are,
There is no substitute for deep due diligence.
Companies that look impossible to finance do not suddenly become AAA credits after a sprinkling of magic secured funding dust.
Anything promising of low-risk/high-returns from complex structuring and technical innovation is suspect.
Let's review the unfolding Greensill mess:
There over 1000 holders of the $10 bln plus of defaulted Greensill investment structures packaged and issued by Credit Suisse –
which marketed them as ultra-safe secured investments. Under the law, what the holders recover on these deals will rather depend
on how much the administrator and the courts can jemmy out of Sanjay Gupta's
dead-firm walking
;
steel and commodities business GFC Alliance. (I have no hesitation in saying GFC will go to the wall – there can't be a single
sane financial firm on the planet willing to finance them as the story of its' Greensill relationship emerges and its connected
in-house banking arrangements become clearer – although, apparently, a state rescue is under consideration to save jobs.)
Investors will be lucky to see much more than the 30% recovery already in the pot from non-Gupta related investments in the
Greensill funds – but Credit Suisse may decide to make its investors good. The reputational damage of seeing their private and
investment banking clients clobbered for their stupidity, which would negate their private banking brand, may mean it's worth
taking the hit. No wonder CS staff are very grumpy about their bonuses.
Successful financial scams require willing participants. All the usual fools are there in
the mix.
Yet again the German regulator missed what was going on in Greensill's German bank and its exposures to Gupta. The team at Credit
Suisse who agreed to warehouse Greensill originated "future receivables" and sell them as pristine secured assets have a limited
shelf life. The insurance broker who managed to convince an insurance fund the underlyings were AAA quality looks vulnerable. Or
what about the sales teams in Morgan Stanley who actually marketed the deals. Yet again Softbank is in the frame after it
invested in excess of $1.5 bln at a $4-7 bln valuation, hailing Greensill as a leading Finech, when the actual truth is that its
high-tech driven lending algos were nothing more than basic Excel spread sheets.
Greensill's financial magic was little more than sheer chutzpah – being able to persuade investors that the dull old low margin
conservative business of factoring – short-term secured lending against invoices and accounts receivable, was something
incredibly clever, undervalued and able to generate huge returns based on unique proprietary tech.
Greensill deals went further. Rather than just factoring Gupta's bills to suppliers and its invoices, the firm conjured up
"future receivables" – pledging the company's expected future earnings for lending now. That's not necessarily a bad thing – its
basic credit – but it only works if these earnings were completely predictable like obligated mortgage payments. What Greensill
was doing was lending on future earnings on very volatile commodities. Remember – oil prices went negative in 2020.
In return for funding challenging names we know Greensill took divots out these clients. It made over Ł36 mm financing Gupta's
deals in Scotland, and an amazing $108mm in fees from the $850mm Bluestone coal deals in the US – for which it is now being taken
to court. All these fees gave Lex Greensill the wherewithal for his private Air Greensill fleet – but didn't make the financings
any safer.
Any smart investors would probably have asked questions – but what's not to like about a deal that's secured on receivables,
offers a high coupon, is wrapped with an insurance package from reputable insurer and involves major investment firms like Credit
Suisse banking them, and Morgan Stanley marketing them?
One question is how did Greensill get away with it so long?
It was clear as early as 2017 there were major issues with some of the supply chain financing deals Greensill was putting
together. The following year a major Swiss investment group, GAM, blew up when deals a leading fund manager had bet the shop on
were questioned internally. A review by external investigators discovered a lack of information and documentation on a whole
series of Greensill deals. They questioned how due diligence was done on the deals. The fund manager was suspended and later
dismissed – triggering a redemption run on the fund. The whistle-blower was also shown the door on the back of massive client
exits.
GAM invested in the funds because it's very hard to turn down the promise of a low risk / high return deal that promised so much
more than the tiny yields available in conventional credit markets.
Despite the events at GAM, Credit Suisse went on to package $10 bln plus of Greensill deals. It was all done with an insurance
wrap from a single name put them in its safe bucket. I know other insurance firms refused the deals. The trigger for the collapse
of the Greensill scam was the withdrawl of that critical insurance – causing Credit Suisse to stop. Greensill has known for a
year Tokyo Marine (which sacked the underwriter involved) would not renew and had been unable to find alternative cover.
Perhaps Credit Suisse bought the story and Softbank link that Greensill was a remarkable new Fintech with the Midas touch of
changing dull, conservative factoring into a money machine? All that glitters is not gold.
One of the major developing themes in markets has been a shift from financial assets – which are seriously mispriced due to
monetary distortion and financial asset inflation – into real assets, the so-called alternatives market. Alternative because they
are not stocks or bonds, but cash flows and real assets. The collapse of Greensill will heighten awareness of due diligence risks
in these non-standard, off-market, asset backed alternatives. Alternative asset holders will be looking at holdings for what else
might be wobbly.
For instance, I might urge them not to be hypnotised by the assumptions underlying a well-known fund investing in music
royalties, the basis of which is also being questioned by analysts. (I certainly won't mention the fund by name as the manager is
a well-known litigant.) I have no reason to believe or disbelieve what analysts, the FT and a US investment bank have said about
it overpaying for assets or questioning the valuation hikes it puts on future revenues when it acquires catalogues. Personally I
like music assets, know their value, and, given certain circumstances the fund in question might come good. Equally.. it might
not.
To understand how these deals works its critical to understand exactly what's occurring within the structures – how real are the
assets, how the cash flows, how its accounted, and where it goes. That's why having top notch accountants and lawyers is such an
important requirement for any deal. However, if they are working in the interests of the issuers and bankers – then investors are
the likely patsies. There is a real difference between the way US and European Asset Backed deals are structured – basically US
deals are transparent. European deals tend to be opaque.
Alternative deals based on real assets and tangible cash flows are often, but not always, decorrelated from distorted financial
assets, allowing low risk deals to yield better long- term returns. They tick can the box in terms of risk vs return and provide
significant diversification away from conventional markets. The major negative is there is little pretence they will be liquid
assets. If you want to sell – even in good markets it will not be easy.
The only way you should participate in Alternative type deals is by knowing exactly what's going on. And – yes, my day job is
Head of Alternative Assets. Happy to discuss in depth any time.
Contrary to the previous immigrants - who were economic immigrants (not religious
immigrants, as the official history of the USA states) - the post-war immigrants to the USA
are all political immigrants. They're the remnants of South Vietnam, Kuomintang, South Korea,
Mensheviks, Refuseniks, Zionism, Batista's Cuba, Latin American comprador elites. I remember
that once Hugo Chávez or the then president of Ecuador claimed that in Florida alone
were more than 2,000 wanted people (most of them compradores and generals) enjoying political
refugee status.
The only exception to the rule are the Mexican immigrants and some Central American
immigrants (El Salvador, Guatemala in some cases), which had their economies dollarized or
devastated by the advent of NAFTA, and were by chance close to the USA's territory.
In the Spectator article linked -- thank you b and all -- Kimball quotes a canny friend
who said "I'd rather be ruled by the Chinese than the Yale faculty". Yes, I thought, that is
how the west is now.
I am a teacher in Australia's oldest university whose new vice-chancellor (CEO) is a pure
technocrat without academic background or a PhD.
This is the strange norm now: grey neoliberal managers are rushed into areas that require
specialists in order to 'streamline' or 'set up structures of accountability' or simply
hollow out the joint. This guy sees 'tech' as the answer, so will accelerate the pedagogical
catastrophe taking place across the world (Zoom-'teaching') whose implications are dystopian,
psychologically alienating and frankly depressing.
He is the Yale faculty at the local level; Blinken is the Yale faculty on the diplomatic
stage: a recognisable and familiar type of manager from no particular background whose career
is made leap-frogging from bureaucratisation process to bureaucratisation process.
He berates the Chinese thinking that they are the old faculty resisting the newspeak of
neoliberal managerialism, an empty meaningless feedback loop of tickboxing. The 'rules-based
order' is some imaginary thing produced in the mind of grey men to obscure their
self-aggrandisement in a vacuum; zero time has been invested in any thought about it. The
'Biden-Doctrine' is a vacuum of intellectual reflection. In short, Blinken simply doesn't
care about his job, he just cares about ticking a box on his CV as he sets himself up for the
promotion/next job. Where once we had career specialists dedicated to the actual job (like
Chas Freeman) now the whole world is run by these empty people. The consequences are very
depressing.
University administrators need not have doctoral or other academic achievements. What is
needed, in any enterprise, is the commitment to the health and to prosperity of that
enterprise.
In America, they promoted men who promised lower taxes and easier money. Men with dubious
loyalty to the long term health and well being of that country or her population. The results
is there for the world to see. Same in Italy; Mr. Berlusconi would promise to cut taxes, and
would omit to also mention that he would also cut state services. And foolish plebians would
vote for him.
When the late Mr. Khomeini came to power in Iran, one of his observations was that he
could not find enough men with integrity to put them in executive positions.
I would like to respectfully suggest to try to preserve what you can but do not try to be
a lean department or program. Maintain the "fat" so that you van save as much of the
scholarly muscle as you can when the cutting times come.
Also, reach out to the public and the alumni and ask for whatever help you can obtain. Use
Kung-Fu approaches, never attack directly. Keep trying to find alternative careers for your
older or newer faculties. Take any and all positive action and try to preserve Learning and
Scholarship for the future generations.
The late Joseph Stalin observed: "Cadres decide everything."
May be you cannot stop this, but you can delay and dlelay and derail, thus buying time for
people to adjust to their new circumstances.
That would be Mark Scott as Vice Chancellor of the University of Sydney? What a decline
from when Enoch Powell was Professor of Greek at Sydney. I greatly admire Powell's scholarly
work on Herodotus and his edition of Thucydides (one of my set texts when I was at Oxford).
How much of that work did he do at Sydney?
"....Yang responded sharply to the US officials and criticized Washington for both
domestic and foreign policy issues. "The United States uses its military force and financial
hegemony to carry out long arm jurisdiction and suppress other countries," he said. "It
abuses so-called notions of national security to obstruct normal trade exchanges, and incite
some countries to attack China."
"....The US took several steps ahead of the talks that made it clear the meeting would be
contentious. Blinken visited Japan and South Korea with Secretary of Defense Lloyd Austin
earlier this week. While meeting with his Japanese and Korean counterparts, Blinken slammed
Beijing, accusing China of using "coercion and aggression" in the region. On Wednesday, the
US slapped sanctions on 24 Chinese and Hong Kong officials...."
using coercion and aggression - two very definitive qualities of American Imperialism post
WWII
Now they are pushing the "China genociding Uyghurs" lies to frame the minds of Americans
and people in the West and around the global to prepare a hot war against China.
Now they are pushing the "China genociding Uyghurs" lies to frame the minds of Americans
and people in the West and around the global to prepare a hot war against China.
There is no "Hot War" in preparation against China, this is simply procedural posturing in
the absence of any other means of relating to the Chinese civilisation.
The Zio-American empire is well aware this would mean a nuclear annihilation or at the
least a re-shuffling of the global order against their interests.
The US has developed no means of relating to civilizational challenges other than
violence, so it is merely cycling through the motions it knows of but with an understanding
that it cannot take them to their logical conclusion.
Thanks for your perspective, xot! Interesting insights.
trump changed that, suddenly the ugly side of the empire became visible
I've heard this about Trump a lot, but I've always wondered why Trump was the ultimate
catalyst for this epiphany. You would think that the Iraq War should have been that watershed
moment, or even Libya (and perhaps they were for many, like me). I suppose from the
perspective of inter-imperialist relations in the first world, a lack of decorum of the level
of Trump's is more anomalous and egregious than the imposition of death and destruction of
people in the global south.
I think that the presidency of Mr. Trump revealed the ugly side of the United States;
suddenly the gilded papier marche of America, carefully created by the best propaganda
techniques over 70 years, was shredded and USA was revealed to be a country just like so many
others.
It is up to American people, Judeo-Christians as well as others, to address the deep deep
social problems of the United States.
Despite a roomful of hot air amerikans will always be considered War Criminals by the
rest of us
I have to admit having become totally bored with the words which any gang of elites from
any nation whose population is far too large to have the types at the top comprehend much
less represent citizens' points of view, spout.
I get that there are fans of particular nations here, who believe some of these nation
states have more humane policies than other nation states, but all of them however humane are
essentially spouting toop down driven attitudes.
We know that amerika with its narrow & prescriptive "you can vote for anyone as long as
it is someone from one of these two virtually identical political organisations" system pays
little attention to their citizens' views. Unfortunately humans being humans, once a person
gains a little power their priorities focus on retaining & increasing power, so that
after time, no matter how egalitarian things may have been at the start, a shift to imbalance
between the governors and the governed is inevitable.
It is impossible to imagine that President Xi Jinping would do as Mao Zedong did and hand
power to the people, especially the nation's young people to trigger the 1966 Cultural
Revolution.
One thing is for sure though, that is however many may have died during the cultural
revolution, the casualties were confined to China's citizens and the casualties &
atrocities were infinitesimal compared to the murders, rapes and savagery committed by
amerika's war upon the people of Indochina.
IOW 50+ years ago China moved to resolve generational differences with an internal, domestic
debate, whilst amerika tried to resolve that issue by indoctrinating its young people into a
thoroughly racist anti-asian POV, then sent their youth to "kick out the jams" on the heads
of the people of Vietnam, Laos & Cambodia.
The results were horrific and since courtesy of TV, they were far better documented than the
horror inflicted upon the citizens of Korea less than a decade before have stuck in all
non-amerikans minds ever since.
I have sounded off here at MoA quite a few times that most amerikans view the Indochina
conflict negatively because it was such a waste of 'young amerikan' lives, rather than the
way the rest of us see it, that amerika butchered and raped their way through Indochina
without the slightest remorse.
Last week I stumbled across an old documentary released back in 1972 "Winter Soldier". The
film documents the
1971 Winter Soldier hearing held by Vietnam Vets Against War.
VVAW had tried to stop the Indochina slaughter by the standard means - protests, marches,
contacting politicians, all to no avail. So then they came up with the 'Winter Soldier'
hearing which had veterans of the war against the people of Indochina, telling their stories
of the atrocities they had committed.
The witnesses came from across the range of amerika's military; from grunts - surprisingly
most were volunteers rather than draftees, to a Marine captain who served as a helicopter
pilot.
These guys who returned to amerika lauded as heroes while deep down feeling nothing but
Guilt & shame,
make it clear that My Lai was no outlier, it was SOP.
It is also clear from what they tell us of their boot camp experience that racist
anti-asian indoctrination featured big time in their training which led them to regard all
Vietnamese as the enemy.
The behaviour got worse and worse, particularly rapes and the mutilation of children, once
the troops realised no one was would restrict their cruel antics against those they all
considered to be less than human. Senior officers either joined in or 'looked the other
way'.
Most of this documentary is in the form of testimony as cameras were generally kept away from
the 'fun' but even so I found just hearing the stories too much to bear.
Anyway although copies of 'Winter Soldier' do become available on You Tube from time to
time, they can be hard to find and are frequently taken down, so if anyone does want to know
what is commonplace for the brave amerikan military, they can download a copy of Winter
Soldier from here .
The hearings likely did the job eventually, in that the thugs in control of amerika got
the message that if the war continued, more and more truth about the scale & horror of
awful amerikan atrocities would become public and that would be counter to satiating these
elite thugs' greed inside and outside amerika. A peace agreement was signed and VVAW went
back to emphasising the damage done to amerikan soldiers rather than the horrors inflicted
upon a much, much larger Indochinese civilian population.
This is why BidenCorp are confidently denying their crimes while asserting all these other
nations are killers, simply because amerikans have never been required to comprehend the true
scale of the crimes amerika has committed upon their (mostly unjustly selected, amerikan
created) enemies.
All the words spouted by elites only ever reinforce prevailing attitudes. Change in the
way amerika views itself will only be effected when amerikans are forced to honestly consider
all the crimes which have been committed in their name.
I'm not holding my breath, neither do I see much point in any analysis of who said what to
whom as words are worthless in the face of fell deeds.
"China and the US are two major world powers. No matter how many disputes they have, the
two countries should not impulsively break their relations. Coexistence and cooperation are
the only options for China and the US. Whether we like it or not, the two countries should
learn to patiently explore mutual compromises and pursue strategic win-win cooperation ."
[My Emphasis]
The big question: Does the Outlaw US Empire possess enough wisdom to act in that
manner.
I don't understand why so many otherwise intelligent people are seemingly unable to bring
themselves to question the fundamental 'model' that supposedly describes what is going on in
the 'West'. If political 'models' were subjected to the same sort of analysis that scientific
ones were, then the model used by b and most of the people who comment here would undoubtedly
be rejected. There are simply too many elephants in the room.
Why are European countries going along with all the stupidity? Such as America's rampage
through the middle east, originating and perpetuated with proven lies, flooding Europe with
migrants as a result.
Why are European countries apparently happy to go along with the Russophobia and the
Sinophobia. Are their leaders really so lame-brained that they took the ludicrous Skripal
poisoning story and the even more ridiculous Navalny yarn at face value?
Why are European countries going along with the stupid and unfair sanctions? sanctions
that cost Europe far more than they do America.
Why is Europe going along with the increased militarisation of the of the border with the
Russian federation and the open war-mongering? Surely European leaders realise that they are
wantonly courting WW3 and risking a nuclear conflagration? Could they really be so stupid as
to imagine that lining the border they share with the Russians with ABM's was actually
'defensive' in nature?
Last but certainly not least, why is Israel so important? How come a tiny country in the
middle east gets to thumb its nose at international law on a daily basis? Why is it OK for
them to have nukes? Why is it OK when they shoot literally thousands of unarmed protesters?
killing hundreds. How come they can build walls and that is OK, How come they can run an
openly apartheid state but somehow be immune to criticism?
The answer to all these questions is actually quite simple, the US and Europe are pretty
much controlled by the same set of oligarchs and the most powerful of the oligarchs are the
bankers. Once you realise that it is the bankers driving most of this garbage all of the
elephants are explained.
MarkU @ 39 -- HossKara struck gold with his suggestion @34, to which I responded @35.
It's all about the Benjamins, particularly the Petrodollar controlled by what
Psychohistorian euphemistically calls "Private Finance" and is the world's reserve currency.
Any attempt to circumvent the Petrodollar in trade, especially energy resources, brings
violent aggression to punish the wayward country and its leaders.
"Private Finance" in this context really means the thug standing behind you with a
baseball bat. "You don't know who you're dealing with, punk." Iran trades with other
countries in other currencies, so does Venezuela, so does China, so does Russia. Get the
picture?
Saddam Hussein announced that he was going to accept other currencies than the dollar for
Iraq's oil -- look what happened to him. Same with Gaddafi. They and their countries were
made examples of what happens when you deny Uncle Ratschild his pound of flesh.
This is about neoliberlization of education. Early over-specialization essentially is
detrimental to professional development. this is clearlly a neoliberal approach -- to get ready
cogs into the machinery that does not reuare any additional trianing to be productive and save on
training.
Like Knuth said on a different potic "Premature optimization is the root of al evil"
Why has it taken so long for professional-services firms in the U.S. to adopt a bespoke
graduate-degree approach (
"Employers Customize Business Degrees," Business News, March 5)?
The former president of the University of Limerick, Edward Walsh, was way ahead of the game
in this regard. Dr. Walsh arguably created a new norm in Irish third-level education back in
the early 1970s, from the university's modest beginnings in the "White House" as the building
was and is still known, to a now very impressive campus with a proud record of innovation in
education and excellence in research and scholarship. Dr. Walsh customized our degrees to match
the requirements of Irish companies and industry.
My bespoke electronics-production degree was customized because the electronics industry in
Ireland at the time found that many electronic-engineering grads applying for
production-oriented positions weren't suitably qualified. As a graduate in engineering, I
believe it made my finding a job much easier than some of my counterparts in other
universities, both in Ireland and abroad. Our degrees opened many doors for my class in a lot
of different industries, and I believe they still hold us in good stead today when changing our
careers or setting up indigenous businesses.
Since inception in 2011, the Commercial Banking Program in the Mays Business School of Texas
A&M University has joined with the banking industry in implementing and teaching a required
commercial-banking curriculum that is designed to position our graduates for successful careers
in commercial banking. The banking industry provides us with valuable input on essential
training and skills they require of our students to be considered for employment. In addition,
selected parts of the program curriculum are taught by senior banking executives from our
advisory board of directors. Students receive current, relevant banking-industry training
taught by banking executives positioning them for successful careers in commercial banking.
Banks find our graduates are trained according to industry requirements and are productive
sooner than their peers, and the Commercial Banking Program is helping alleviate the shortage
of trained talent within the banking industry.
Disposable people are indispensable. Who else would fight the wars? Who would preach? Who
would short derivatives? Who would go to court and argue both sides? Who would legislate? Who
would sell red hots at the old ball game?
For too long disposable people have been misrepresented as destitute, homeless, unemployed,
or at best precariously employed. True, the destitute, the homeless, the unemployed and the
precarious are indeed treated as disposable but most disposable people pursue respectable
professions, wear fashionable clothes, reside in nice houses, and keep up with the Jones.
Disposable people are defined by what they do not produce. They do not grow food. They do
not build shelters. They do not make clothes. They also do not make the tractors used to grow
food, the tools to build shelters or the equipment to make clothes.
Although disposable people do not produce necessities what they do is not unnecessary. It is
simply that the services they provide are not spontaneously demanded as soon as one acquires a
bit of additional income. One is unlikely, however, to engage the services or purchase the
goods produced by disposable people unless one is in possession of disposable income.
Disposable income is the basis of disposable people. Conversely, disposable people are the
foundation of disposable income.
Why is it so expensive to get anything done in the US?
Neoclassical economics and the missing equation.
Disposable income = wages – (taxes + the cost of living)
The US's high cost of living pushes up wages making it expensive to get anything done in
the US.
See where neoclassical economists go wrong?
Employees get their money from wages, and the employers pay the cost of living through wages,
reducing profit.
It is the US's employers who pay the high cost of living, via wages, reducing profit.
Do you really want to pay the US's high cost of living in wages?
No way.
You will have to off-shore to maximise profit.
The early neoclassical economists hid the problems of rentier activity in the economy by
removing the difference between "earned" and "unearned" income and they conflated "land" with
"capital".
They took the focus off the cost of living that had been so important to the Classical
Economists as this is where rentier activity in the economy shows up.
It's so well hidden no one even knows it's there.
The neoliberals picked up this pseudo economics and thought it was the real deal.
Things were never going to go well.
Imagine the Chamber of Commerce actively lobbying for state-supported child care, massive
increases in funding for public transportation, public education, public health, and
housing.
Perhaps we should take a look at China to learn how we too can become better capitalists,
and so help USA businesses focus on the business of business.
Western companies couldn't wait to off-shore to low cost China, where they could make
higher profits.
China had coal fired power stations to provide cheap energy.
China had lax regulations reducing environmental and health and safety costs.
China had a low cost of living so employers could pay low wages.
China had low taxes and a minimal welfare state.
China had all the advantages in an open globalised world.
What was Keynes really doing?
Creating a low cost, internationally competitive economy.
Keynes's ideas were a solution to the problems of the Great Depression, but we forgot why
he did, what he did.
They tried running an economy on debt in the 1920s.
The 1920s roared with debt based consumption and speculation until it all tipped over into
the debt deflation of the Great Depression. No one realised the problems that were building
up in the economy as they used an economics that doesn't look at private debt, neoclassical
economics.
Keynes looked at the problems of the debt based economy and came up with redistribution
through taxation to keep the system running in a sustainable way and he dealt with the
inherent inequality capitalism produced.
The cost of living = housing costs + healthcare costs + student loan costs + food + other
costs of living
Disposable income = wages – (taxes + the cost of living)
Strong progressive taxation funded a low cost economy with subsidised housing, healthcare,
education and other services to give more disposable income on lower wages.
Employers and employees both win with a low cost of living.
Keynesian ideas went wrong in the 1970s and everyone had forgotten the problems of
neoclassical economics that he originally solved.
"Keynesian ideas went wrong in the 1970s" and from the 80s on because the (primarily)
Republicans had forgotten that Keynes originally stipulated that the government debt incurred
during "bad times" be liquidated during "good times". Since Reagan, Republicans have
increased debt to stimulate the economy, but failed to pay it down once that part of Keynes's
took effect. Republicans are the biggest half-Keynesians of all time.
Behind all this is the neo-liberal renunciation of any 'national' policies. Define a
'nation' as you will, it still is a valid category. It has definite 'needs' and requirements
to function well and continue as a viable entity. The 'national' government has functioned in
the past as the representative and facilitator for the 'nation.' "Drown that in a bathtub"
and you eventually eliminate the 'nation's' ability to function. The end stage of that
process is the collapse and extinction of the 'nation.'
The above process should be familiar to anyone who has studied the past few decades of
American history. What the proponents of the neo-liberal dispensation have not advertised, if
indeed they even know, is what replaces the 'nation?' An International Syndicate of
Oligarchs? If so, such an endeavour is doomed to failure. History has shown, time and again,
that the concept and practice of commercial business is not an adequate organizing principle
for large scale human society. It simply does not make allowances for human variability.
The best example of the point above that I can think of is the present dominance of short
term thinking and planning in the business sphere. Restricting the inputs of the decision
making process to short term issues, such as quarterly earnings and stock prices in the
bourse, leads to the dysfunctions bemoaned in the piece above. Offshoring a factory makes
sense from a short term business point of view, but ignores the long term 'national'
implications. Here is a direct conflict between the two methods of social organization. At
present the short term methodology is ascendant. Alas, it looks as if America is going to
have to learn this lesson of setting proper 'national' priorities the hard way; such as by
losing a war decisively.
I look on the bright side here. A small thermonuclear exchange between America and some
peer adversary will not only 'thin out' the population, but also bring on a nuclear winter
and retard the progression of global warming for a while. It might be the breathing space the
Terran human race needs to survive beyond the upcoming evolutionary bottleneck.
"... By Guy Standing, Professorial Research Associate, SOAS University of London, Fellow of the UK Academy of Social Sciences, and co-founder and honorary co-president of the Basic Income Earth Network (BIEN). Subjects of recent books include basic income, rentier capitalism and the growing precariat. He is a council member of the Progressive Economy Forum. Originally published at Open Democracy . ..."
"... the precariat was evolving as a class-in-the-making. ..."
"... we should interpret what Karl Polanyi was to call the Great Transformation as beginning with a period of dis-embeddedness, when the old social formation with its specific systems of regulation, social protection and redistribution was being dismantled mainly by the interests of financial capital, guided by an ideology of laissez-faire liberalism ..."
"... "For the proletariat, the norm was and is to be in a stable job. There is nothing labourists love more than to have as many people as possible in jobs. They romanticise being in a job, promising Full Employment, and quietly resorting to workfare. They conveniently forget that being in a job is being in a position of subordination and fail to recall Marx's depiction of labour in jobs as 'active alienation'." ..."
"... Though for most of the 1848-1945 period, its not really true. The proletariat of Capital and Condition of the Working Class in England had an existence as precarious as today's precariat. Indeed, this was one of the things driving the growing militance. There was little in the way of a consumer goods industry selling to proletarians because until quite late in the 19th century the entire wages of all but the skilled and fortunate went for subsistence. ..."
"... A side note: my understanding is that classical Marxism's worry about the lumpenproletariat, aka a "reactionary mass," was based on the observation that their services could be bought to form King and Country mobs to attack working class organizations, along with serving as pogrom foot soldiers. Part of that function was superseded by the formation of regular armies of domestic occupation, aka the police. ..."
"... By complicating basic class analysis with an elaborate class structure, with the revolution to be led by a minority of young, educated 'progressive' precariats, he may be setting the stage for fragmentation of the Left, and further massive losses for workers. ..."
"... being drawn into platform capitalism, as 'concierge' or cloud taskers, controlled and manipulated by apps and other labour brokers. Above all, they are being gradually habituated to precariatisation, told to put up with a norm of unstable task-driven bits-and-pieces existence. ..."
"... That passage called to mind the increasing use by universities of adjunct faculty positions, which are the very definition of precarious. In recent days the was a report of the dismissal of tenured faculty by a college in New York State, whose name escapes me. ..."
"... I could see the 'Go Fund Me' phenomena for Medical (or just groceries, etc) costs in this thought:(my bold) ..."
"... Those characteristics are bad enough. But it is the distinctive relations to the state that most define the precariat. The precariat are denizens rather than citizens, meaning that they are losing or not gaining the rights and entitlements of citizens . Above all, they are reduced to being supplicants, dependent on the discretionary benevolence of landlords, employers, parents, charities and strangers, showing them pity. ..."
"... The writer of this article seems to be very optimistic, celebratory even when it comes to the insecurity of the precariat. It isn't difficult to romanticize the power and the potential of people suffering extreme insecurity when your employment and your social status are linked to the privileges of the (Left or Right) political elite ..."
"... Open Democracy is a Soros organ. Which immediately brings to mind the aspect of our precarious position that the author does not address or even allude to: the nexus of financial, media and paramilitary power that is the "Deep State" or the Spook Apparat if you will. ..."
"... Much of what Standing refers to as the Precariat is basically just the Proletariat yet again. ..."
"... Now that I know it's an Open Democracy piece, I suppose that it's meant to soften the blow of prolonged, steep unemployment and to desensitize people to the pain of "doing more with less" (as the tippytopp rakes it in) by calling it an Arts & Leisure Society. ..."
"... I must agree with DJG, Reality Czar's and others similar take. The writer of this article seems to be very optimistic, celebratory even when it comes to the insecurity of the precariat. It isn't difficult to romanticize the power and the potential of people suffering extreme insecurity when your employment and your social status are linked to the privileges of the (Left or Right) political elite, and when you are a (most likely well paid) participant in the current political system, by working closely with the leadership of one of the bigger old political parties while holding positions that come with stable income if not fungible prestige ["Professorial Research Associate, SOAS University of London, Fellow of the UK Academy of Social Sciences, and co-founder and honorary co-president of the Basic Income Earth Network (BIEN)]. ..."
"... "a giant suction pump had by 1929 to 1930 drawn into a few hands an increasing proportion of currently produced wealth. This served then as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied themselves the kind of effective demand for their products which would justify reinvestment of the capital accumulation in new plants. In consequence as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When the credit ran out, the game stopped" ..."
"... "The other fellows could stay in the game only by borrowing." ..."
"... "When the credit ran out, the game stopped" ..."
"... Revolt of the Public ..."
"... Can't Get You Outta My Head ..."
"... Charter for the Precariat ..."
"... "The labour and time of the poor is in civilised countries sacrificed to the maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury by the labour of his tenants. The moneyed man is supported by his extractions from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money. But every savage has the full fruits of his own labours; there are no landlords, no usurers and no tax gatherers." ..."
"... "All for ourselves, and nothing for other people seems, in every age of the world, to have been the vile maxim of the masters of mankind." ..."
"... "The interest of the landlords is always opposed to the interest of every other class in the community" ..."
"... The labourers had before 25 The landlords 25 And the capitalists 50 .. 100 ..."
"... Framing Corbyn's election defeat as a failure to understand the needs of the "Labour" electorate, and hence supporting Standing's premise, whilst totally ignoring the fact that Corbyn was hammered by the powers of the right, BBC, MSM, Israel etc etc is totally disingenuous and seems to me to be a case of very sour grapes. ..."
Lambert here: A dense treatment of a subject of burning concern.
By Guy Standing, Professorial Research Associate, SOAS University of London, Fellow of the UK Academy of Social Sciences,
and co-founder and honorary co-president of the Basic Income Earth Network (BIEN). Subjects of recent books include basic income,
rentier capitalism and the growing precariat. He is a council member of the Progressive Economy Forum.
Originally published at Open Democracy .
Transformations tend to go through several preliminary phases. In Britain, the 'dis-embedded' phase in the development of industrial
capitalism involved the Speenhamland system launched in 1795, the mass enclosures that created a proto-proletariat, and disruption
by a technological revolution. All this prompted a period of primitive rebels – those who know what they are against, but not agreed
on what they are for – in which protests were mainly against the breakdown of the previous social compact.
Those included the days-of-rage phase that culminated in the mass protest in Peterloo in 1819, brutally suppressed by the state,
and the Luddites, misrepresented ever since as being workers intent on smashing machines to halt 'progress', when in fact what they
were doing was protesting at the destruction of a way of living and working being done without a quid pro quo.
In my A Precariat Charter
written in 2014, sketching a precariat manifesto for today's Global Transformation, I concluded by citing the stanza from Shelley's
The Masque of Anarchy
, written in reaction to the Peterloo massacre. Jeremy Corbyn was later to cite it in his campaign speech of 2017, which James Schneider
recalls in his contribution
to this debate . Shelley expressed it in class, not populist terms, as I did, in my case signifying that the precariat was
evolving as a class-in-the-making. Corbyn seems to have expressed it in support of a left populism.
Until his drowning at an early age, Shelley along with Byron and other artists of that era, including Mozart, were railing against
the bourgeoisie, which is why Mozart and Byron were both drawn to the Don Juan/Don Giovanni theme. The Romantics failed to arrest
the march of industrial capitalism but their art put out a marker for the future counter movement.
The UK and 'Decent Labour'
The trouble was that at the time the emerging mass 'working class', the proletariat, had not yet taken shape as a class-for-itself,
and was not ready to do so until late in the century. Three other primitive rebel events should be read into the narrative – the
pink revolutions of 1848, often called the Springtime of the Peoples, wrongly seen by some at the time as presaging the proletarian
revolution, the brave prolonged activities of the Chartists in the 1830s and 1840s, which advanced the cause of political democracy
despite defeat, and the upheavals in the 1890s that the left have tended to underplay.
The latter marked an enormous historical error by 'the left'. It is why the term 'dangerous class' was in the sub-title of my
The Precariat: The New Dangerous Class
, published in early 2011. Although some Marxists have used it to describe the 'lumpen proletariat', the term 'dangerous class' was
used in the nineteenth century to describe those who were in neither the bourgeoisie nor the emerging proletariat. They were the
craftsmen, artisans, street traders and artists, from whose ranks came the leading figures articulating a version of socialism as
rejection of labourism – freedom from labour, freedom to work and to leisure (reviving ideas of ancient Greece, embracing schole
).
In the 1890s, against William Morris and colleagues, including some anarchists, who championed that emancipatory vision, were
the labourists, state socialists, Fabians and others who wanted to generalise decent labour. By the turn of the twentieth century,
the latter had triumphed and marched forward in labour unions, social democratic parties and Leninism, even though most of the first
batch of Labour MPs in 1906, when asked by an enterprising journalist what book had most influenced them, mentioned John Ruskin's
Unto This Last , not anything by Karl Marx.
So, we should interpret what Karl Polanyi was to call the Great Transformation as beginning with a period of dis-embeddedness,
when the old social formation with its specific systems of regulation, social protection and redistribution was being dismantled
mainly by the interests of financial capital, guided by an ideology of laissez-faire liberalism .
This produced growing structural insecurities, inequalities, stress, precarity, technological disruption, debt and ecological
destruction, culminating in an era of war, pandemics – most relevantly, the Spanish flu of 1918-1920, which may have killed 50 million
people – and the Great Depression.
... ... ...
...Donald Trump epitomised the rentiers; he used anti-establishment rhetoric but jealously preserved and advanced the interests
of the rent-seeking plutocracy. He never followed a neo-liberal economic agenda. He stood for mercantilism in foreign economic strategy
and for rentiers eager to plunder the commons domestically, while pursuing a pluto-populist fiscal policy. It is better to see his
era in Gramscian terms, a malignancy of a class-based system in deepening if not terminal crisis.
"For the proletariat, the norm was and is to be in a stable job. There is nothing labourists love more than to have as many
people as possible in jobs. They romanticise being in a job, promising Full Employment, and quietly resorting to workfare. They
conveniently forget that being in a job is being in a position of subordination and fail to recall Marx's depiction of labour
in jobs as 'active alienation'."
Yep, large scale wage-slavery is not something to be embraced but something to be abolished.
Indeed, per the Bible, wage-slavery was the EXCEPTION, not the rule, for Hebrews in ancient Israel with roughly equal ownership
of the means of production being the rule. Yet this was NOT communism since the means of production were individually owned, and
not by the State, which didn't even exist for 400 years or so.
So accepting wage-slavery as some kind of norm is to concede way too much, Biblically speaking.
An "eved" in the Hebrew bible is not really the same thing as a wage slave. The first time slavery is discussed in the Book
of the Covenant following the Ten Commandments in Exodus, the only limitation is 7 years. There was no requirement to pay the
slave anything. This is modified in the "Second Law" in Deuteronomy where the master is required to pay the slave some compensation
upon the end of the 7 years, but not before. And these "eveds" were only the Hebrew slaves. Foreigners (goys) were slaves for
life, but since neither Israel nor Judah won many wars, there were probably never that many foreign slaves anyway.
I'm using "wage-slavery" in the more general sense that if one does not own assets (impossible for a Hebrew in Israel/Judah
for more than 49 years (cf. Leviticus 25)) then one was de facto either a beggar or forced to live as a scavenger in the wilderness
OR forced to work for wages.
As for foreign "permanent slaves", this is in conflict with no Hebrew OR CONVERT(?) could be held for more than 6 years as
a well-treated indentured servant to be released, well provisioned, in the 7th year. So "permanent slavery" of foreigners was
plausibly, imo, a conversion strategy (see Deuteronomy 23:3-7).
Not that the Old Testament is authoritative for Christians since the New Testament but can't we do at least as well wrt economic
justice?
Though for most of the 1848-1945 period, its not really true. The proletariat of Capital and Condition of the Working Class
in England had an existence as precarious as today's precariat. Indeed, this was one of the things driving the growing militance.
There was little in the way of a consumer goods industry selling to proletarians because until quite late in the 19th century
the entire wages of all but the skilled and fortunate went for subsistence.
And until after the changes beginning with the New
Deal and consolidated in the war and postwar years, the end of a job meant the end of income, period.
One take would be that he underplays the interrelationship of class identity, class aspirations, and class struggle. This comes
out most clearly when he makes it seem as though mid-20th c social democracy lost a vision of the future through negligence, rather
than running up against resistance from capital that was gradually getting its ideological act together after the fascist period.
Strong class identity was contingent on a number of things, but one was maintaining labor militancy, MacAlevey's "strike muscle,"
and that became increasingly difficult, and not just because labor movement leadership went for business unionism.
The same applies to the present. The author seems hesitant to define what a Labor Vision should be now, and oscillates between
UBI and other ideas without directly discussing the intensity of resistance from capital that different programs would set off.
He might at least roll in Kalecki, as we so often do here, and with good reason. UBI will bring a very different response compared
to demands that threaten to supplant capital's control of investment decisions, the sphere of "management prerogative." And so
the author seems to be advocating fresh thinking without directly addressing what stands in its way, both the real threat of intensified
class conflict and how that has been "internalized" in various ways over the last 50 or so years.
A side note: my understanding is that classical Marxism's worry about the lumpenproletariat, aka a "reactionary mass," was
based on the observation that their services could be bought to form King and Country mobs to attack working class organizations,
along with serving as pogrom foot soldiers. Part of that function was superseded by the formation of regular armies of domestic
occupation, aka the police.
There is much substance here but it seems that Standing ignores the elephant in the room -- the role that the age of limits (resource,
environmental/climate change, economic/financial ) plays in the emergence of an era of rentier capitalism.
He says: "Reinventing the future, in class terms, has always been the primary task of 'the left'." But he is quick to condemn
"phoney dualism of crude populism of 'the people' versus 'the elite'".
By complicating basic class analysis with an elaborate
class structure, with the revolution to be led by a minority of young, educated 'progressive' precariats, he may be setting the
stage for fragmentation of the Left, and further massive losses for workers.
being drawn into platform capitalism, as 'concierge' or cloud taskers, controlled and manipulated by apps and other labour
brokers. Above all, they are being gradually habituated to precariatisation, told to put up with a norm of unstable task-driven
bits-and-pieces existence.
This is a great framing of the hoped for (by the technologists)labor contract
That passage called to mind the increasing use by universities of adjunct faculty positions, which are the very definition
of precarious. In recent days the was a report of the dismissal of tenured faculty by a college in New York State, whose name
escapes me.
Proposition 22(?) in California epitomizes precarity.
Quit a lot to think on here, and presented pretty clearly.
De-stranding is a part of understanding (and understanding being part of good progress)
I could see the 'Go Fund Me' phenomena for Medical (or just groceries, etc) costs in this thought:(my bold)
Those characteristics are bad enough. But it is the distinctive relations to the state that most define the precariat. The
precariat are denizens rather than citizens, meaning that they are losing or not gaining the rights and entitlements of citizens
. Above all, they are reduced to being supplicants, dependent on the discretionary benevolence of landlords, employers, parents,
charities and strangers, showing them pity.
Much of this essay seems like a good diagnosis, although, after a certain point, I began to mistrust the foundations of the
analysis. And there is this: "So when it came to framing a Precariat Charter, it seemed appropriate to take as a guiding principle
the adage of Aristotle that only the insecure man is free. That means we must not be stuck in the old sense of security, even
though it is a human need to enjoy basic security."
The author is fudging. Aristotle was writing about a stratified society in which there were many slaves (and, yes, Mediterranean
slavery was different from the Anglo-American version). The ideal was the life of leisure (scholē), which was a kind of contemplation
of how to act (but untroubled by having to work, which is a distraction). The "insecure" man was either Diogenes (who was unique)
or a prosperous citizen with property.
We simply don't live in that kind of society. Yet the author keeps making the mistake of describing "labourists" and their
supposedly antiquated ideas about unions and the organization of the workplace as all wet.
Current labor unrest in the U S of A indicates otherwise. Further, I happened to listened to some deeper analysis of the recent
events at Smith College, and the NYTimes writer, Powell, pointed out how much unions shape attitudes (including eliminating racism),
offer real protections, and teach the value of concerted action.
People like Standing, because of his position in society, can be blithe about being precarious. It is indeed a "philosophical"
issue for them. Yet the current Draghi government in Italy has several members who want to remove labor protections and make more
Italians precarious. Everyone will live the glory of being a U.S. style at-will employee. Hmmm. I wonder why this project still
goes on among the powerful.
The writer of this article seems to be very optimistic, celebratory even when it comes to the insecurity of the precariat.
It isn't difficult to romanticize the power and the potential of people suffering extreme insecurity when your employment and
your social status are linked to the privileges of the (Left or Right) political elite, and when you are a (most likely well paid)
participant in the current political system, by working closely with the leadership of one of the largest old political parties,
while holding positions that come with stable income if not fungible prestige ["Professorial Research Associate, SOAS University
of London, Fellow of the UK Academy of Social Sciences, and co-founder and honorary co-president of the Basic Income Earth Network
(BIEN)].
The author acknowledges that a simplistic, not multidimensional understanding of class is pseudo-Marxist; why not then
go back to the original texts and review the writings of Marx, Engels, Gramsci et al in order to update the concept of class,
perhaps broadening what being "working class" means today?
Why not trying to organize the workers, those who are precariat and
those who aren't, around the goal of "reinventing the future in class terms", as he puts it?
How will the precariat advance its
own sociopolitical goals now (as "a class-in-the-making") and later (as "a class-for-itself)"? Will it be capable of exerting
any pressure and of promote real transformations without unions and without political parties?
The default arrangement for human intercourse is some sort of feudalism. Regardless of best intended efforts to midwife a kinder
gentler world, some sort of feudal hierarchic death-wish inheres in all social efforts. It seems woven into our humanity.
Aboriginal hunter gatherers have managed to maintain a continuous non-feudal culture, even now, for approximately 50,000 years.
Perhaps the precariat are heading that way?
Agreeing with Heelbiter, feudal hierarchies only emerge when there's a surplus that can be stolen, which tempts people with
power (strongmen + sycophants) to keep it for themselves. Remove either the surplus or the agreement to steal, it's not at all
universal.
Surplus also creates lasting valuable institutions which create huge social good (like Universities, Court systems, School
systems, Regulatory oversight of the private sector, etc.).
Naked Capitalism commentators don't have a concept of hierarchical nature of talents which humans have. Meaning, there are
super producer humans in any field of human endeavor: sports, music, arts, mathematics, sciences, film stars, singers, painters,
etc.
Why would you not expect super producer humans in economic realm (business world)?
The talent spectrum is very wide and desire and ability to take risks for a possible "first mover advantage in business" that
some humans go after.
Even luck (right place at the right time) requires the ability, desire and eye to recognize talents in other humans to create
a high powered team which creates truly outsized results.
Talents of some humans is thousands of times the talents of more average humans.
Our job (democracy's job) is to get the most out of them. And I don't mean tax them a lot. I mean channel their energies in
such a way through appropriate rules (laws) so they contribute outsized social good.
And yet in actual, existing polities for as long as records have been kept, there's a tendency for those with "thousand times
the talents" to make off with all the surplus. Leading to, "The default arrangement for human intercourse is some sort of feudalism.
Regardless of best intended efforts to midwife a kinder gentler world, some sort of feudal hierarchic death-wish inheres in all
social efforts. It seems woven into our humanity."
It appears to be the structural force of "surplus" that engages our social heuristics into self defeating and brutal heirarchies.
I'm with HH & FS that the track record of egalitarianism is a great deal longer than that of material heirarchy and hasn't anywhere
threatened the ecosystems on which all life depends.
Not saying we can get out of our exploitative and self destructive rut, but that this condition is no more essential to our
nature than egalitarianism.
Your super producers "talent" is making money, not producing things or goods, and right behind all of your "there are super
producer humans in any field of human endeavor: sports, music, arts, mathematics, sciences, film stars, singers, painters, etc."
all are the face of a machine in the background with some unknowable tech tracking selling data collecting those are your actual
producers but that isn't good pr, we're great at tracking people, we produce surveillance and sell people things they don't need
and support disintegrating institutions in order to undermine your quote here
"Surplus also creates lasting valuable institutions which create huge social good (like Universities, Court systems, School systems,
Regulatory oversight of the private sector, etc.)."
All of these things are being disintegrated for the benefit of your "super producer" BS as we speak. Maybe it's not the NC
commentariat that has an understanding problem.
I think as far as the religious " concept of hierarchical nature of talents " I think the essential workers proved who they
are over the pandemic, they're the ones who had to face risk, grocery workers, garbage collectors etc I doubt these people are
very high up in your hierarchy.
"If human capital theory someday becomes the fly on the power-theory-of-income elephant, it would signal not only a scientific
revolution, but also a social one. I doubt I'll live to see it happen. And if I do, I have no idea what type of society would
emerge from the other side."
Open Democracy is a Soros organ. Which immediately brings to mind the aspect of our precarious position that the author
does not address or even allude to: the nexus of financial, media and paramilitary power that is the "Deep State" or the Spook
Apparat if you will.
Having a token whack at 'atavist' populism is just 'Basket of Deplorables' put another way. The author is deeply tied to the
technocratic set and the slant is clear enough. The constant manipulation through fear-based stochastic 'war' efforts: War on
Terror, War on COVID. Always some empty and obviously fake rallying point. UBI sounds like a sensible solution if we lived in
the Jetsons future the Great Reset promises. But Klaus Schwab is no Bucky Fuller. Gates, Soros and Schwab are just investors.
Investors with the power to manipulate the markets. Heads they win. Tails you lose.
To them, a guy like Trump is just the last echo of the Industrial age and the installation of a senile grifter the triumph
of the technocracy, shielded by the CIA and MI5/6. These spy organizations were always private companies.
CIA was built by Wall Street and British Intelligence is an arm of the British monarchy and has never been accountable to the
public. A realignment is definitely taking place. Behind the curtain. Challenging the old guard is the nexus of more openly private
intelligence organizations like that of Erik Prince and computer oligarchs like Thiel and Mercer. This is exactly who put Trump
over.
Good summary of the evolution and status quo of liberalism. Liberalism being capitalism. And capitalism being profit. So there's
a conundrum: The "strange death of populism" does not equate with some strange death of survival. Survival is always with us.
There were atavists seeking out remote caves even during the agricultural revolution. Maybe even George Soros' ancient ancestors;
the stone age bond vigilantes.
The underlying argument here by Standing seems to be for a Basic Income. Which is OK, but maybe ahead of its time. A jobs guarantee
is a better option because there is so much work to be done that can be done best by humans it's just that none of them are profit
making. That's the problem with all this political (aka economic) analysis. Because, for one thing, who is gonna clean the latrines?
Yes, of course robots are. So then who is gonna arbitrage the robots? Who is monitoring the protection of the environment for
fraud and graft? All of that will be necessary to ensure nobody is profiteering and polluting in a non-capitalist world. Labor
was actually the best defense against rampant profiteering, because it was labor that was always exploited, so what will replace
it? We should stick with a jobs guarantee for now. A better analysis at this point in time is not how do we live with the ruins
of neoliberalism, but how do we live, equitably, without profit? It will take a while to figure that out. Clearly we'll live by
fiat, but it will have to be controlled as well. I'd just say that if the Precariat is condescendingly guaranteed a "basic income"
so should the rest of society be. That controls everyone. And protects the environment, and stays focused on all the things that
are now imperative.
Good investment and growth are definable as whatever investment and growth would remain if all artificial stimulants by the
government and economists were removed. The ordinary liberal is usually several steps removed from real life. That is how he can
be so foolish.
He is almost always either wealthy, or academic, or artistic, or political, or in some other way has escaped from the need
to do productive work for a living.
It's just really weird seeing a 'left' site conflate 'populism' with 'rightism'. As in, "representing the economically hurting
bottom of 50-90% of voters is bad (because the poor, the struggling working class, and the precarious middle class peoples are
obviously morally suspect – or so saith the economic elites. / heh)." No. That's the elite's take on populism. It isn't the populists'
history and political stance. It's almost like reading the elite's dictating what the bottom 50% economic polity must agree to.
(As if the top 50% (or 1%) don't have an economic interest in guiding the bottom 50%'s away from their own economic interest.
/heh )
I didn't get that, maybe I'll re-read when I have a minute.
What I got was dissaggregating the struggling class into groups with common experience and history resulting in what the author
called "reactionary" and I think you are calling 'rightism'.
The basic message I got was the left can no more restore that past than can the right and when it tries it ends up bolstering
the right by accident.
Much of what Standing refers to as the Precariat is basically just the Proletariat yet again. But coming to the fore
in a period resembling the Victorian era in terms of security more than it resembles the short-lived triumphal period of postwar
welfare state, Keynesian, social democratic capitalism.
I think he wants to expand the definitions of work and "productivity," maybe challenging the labor theory of value, etc. This
piece reminded me of David Graeber in that respect.
Now that I know it's an Open Democracy piece, I suppose that it's meant to soften the blow of prolonged, steep unemployment
and to desensitize people to the pain of "doing more with less" (as the tippytopp rakes it in) by calling it an Arts & Leisure
Society. UBI is a lubricant for privatization, although I did notice and appreciate Standing's mention of the commons.
I must agree with DJG, Reality Czar's and others similar take. The writer of this article seems to be very optimistic,
celebratory even when it comes to the insecurity of the precariat. It isn't difficult to romanticize the power and the potential
of people suffering extreme insecurity when your employment and your social status are linked to the privileges of the (Left or
Right) political elite, and when you are a (most likely well paid) participant in the current political system, by working closely
with the leadership of one of the bigger old political parties while holding positions that come with stable income if not fungible
prestige ["Professorial Research Associate, SOAS University of London, Fellow of the UK Academy of Social Sciences, and co-founder
and honorary co-president of the Basic Income Earth Network (BIEN)].
The author acknowledges that a simplistic, not multidimensional understanding of class is pseudo-Marxist; why not then go back
to the original texts and review the writings of Marx, Engels, Gramsci et al in order to update the concept of class, perhaps
broadening what being "working class" means today? Why not trying to organize the workers, those who are precariat and those who
aren't, around the goal of "reinventing the future in class terms", as he puts it? Will the precariat succeed in advancing its
sociopolitical goals as a class ("a class-in-the-making" or "a class-for-itself") outside of organized structures like unions
and political parties (not necessarily the existing, often compromised ones)?
What has happened to inequality? Pretty much what you would expect really.
Mariner Eccles, FED chair 1934 – 48, observed what the capital accumulation of neoclassical economics did to the US economy
in the 1920s. "a giant suction pump had by 1929 to 1930 drawn into a few hands an increasing proportion of currently produced wealth. This
served then as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied themselves
the kind of effective demand for their products which would justify reinvestment of the capital accumulation in new plants. In
consequence as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the
game only by borrowing. When the credit ran out, the game stopped"
With the capital accumulation of neoclassical economics wealth concentrates at the top. A few people have all the money and
everyone else gets by on debt. Wealth concentrates until the system collapses.
What could they do? Keynes added some redistribution to stop all the wealth concentrating at the top, and developed nations
formed a strong healthy middle class.
The neoliberals removed the redistribution. With the capital accumulation of neoclassical economics wealth concentrates at
the top. A few people have all the money and everyone else gets by on debt. Wealth concentrates until the system collapses.
"The other fellows could stay in the game only by borrowing." Mariner Eccles, FED chair 1934 – 48
Your wages aren't high enough, have a Payday loan.
You need a house, have a sub-prime mortgage.
You need a car, have a sub-prime auto loan.
You need a good education, have a student loan.
Still not getting by? Load up on credit cards. "When the credit ran out, the game stopped" Mariner Eccles, FED chair 1934 – 48
Oh yes, I remember now, it was Keynesian capitalism that won the battle against Russian communism. The Americans could clearly
demonstrate the average American was much better off than their Russian counterparts.
Today's opioid addicted specimens might have struggled.
The arc of progress isn't supposed to look like a U-turn. You are supposed to keep moving forwards. After the Keynesian era
we went back to what had preceded it.
After a few decades of Keynesian, demand side economics, the system became supply side constrained. Too much demand and not
enough supply causes inflation. Neoclassical, supply side economics should be just the ticket to get things moving again. It does,
but it's got the same problems it's always had.
I found this article massively interesting and relevant, especially at the same time that I'm trying to process Martin Gurri's
Revolt of the Public and Adam Curtis' new documentary Can't Get You Outta My Head . My take is that all of them
are professing a sort of political realism that is opposed to what they identify as magical thinking on the left, and that's how
I take Standing's critique of left populism.
But more importantly, I want to share a few other related resources that I found as I was digging into this more. First, Standing
has a few TED talks, and this one from 2016 helped me to understand
this article better.
Also, Standing's Charter for the Precariat (linked differently in the article) is currently available on Bloomsbury
open access, so you can actually
download chapter
pdfs of it for free with no login.
Mankind first started to produce a surplus with early agriculture. It wasn't long before the elites learnt how to read the
skies, the sun and the stars, to predict the coming seasons to the amazed masses and collect tribute.
They soon made the most of the opportunity and removed themselves from any hard work to concentrate on "spiritual matters",
i.e. any hocus-pocus they could come up with to elevate them from the masses, e.g. rituals, fertility rights, offering to the
gods . etc and to turn the initially small tributes, into extracting all the surplus created by the hard work of the rest.
The elites became the representatives of the gods and they were responsible for the bounty of the earth and the harvests. As
long as all the surplus was handed over, all would be well.
The class structure emerges.
Upper class – Do as little as they can get away with and get most of the rewards
Middle class – Administrative/managerial class who have enough to live a comfortable life
Working class – Do the work, and live a basic subsistence existence where they get enough to stay alive and breed
Their techniques have got more sophisticated over time, but this is the underlying idea. They have achieved an inversion, and
got most of the rewards going to those that don't really do anything.
Everything had worked well for 5,000 years as no one knew what was really going on. The last thing they needed was "The Enlightenment"
as people would work out what was really going on. They did work out what was going on and this had to be hidden again.
The Classical Economists had a quick look around and noticed the aristocracy were maintained in luxury and leisure by the hard
work of everyone else. They haven't done anything economically productive for centuries, they couldn't miss it. The Classical
economist, Adam Smith:
"The labour and time of the poor is in civilised countries sacrificed to the maintaining of the rich in ease and luxury.
The Landlord is maintained in idleness and luxury by the labour of his tenants. The moneyed man is supported by his extractions
from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money. But
every savage has the full fruits of his own labours; there are no landlords, no usurers and no tax gatherers."
There was no benefits system in those days, and if those at the bottom didn't work they died. They had to earn money to live.
The classical economists could never imagine those at the bottom rising out of a bare subsistence existence as that was the way
it had always been.
The classical economists identified the constructive "earned" income and the parasitic "unearned" income. Most of the people
at the top lived off the parasitic "unearned" income and they now had a big problem. (Upper class – Do as little as they can get
away with and get most of the rewards)
This problem was solved with neoclassical economics, which hides this distinction. It confuses making money and creating wealth
so all rich people look good. If you know what real wealth creation is, you will realise many at the top don't create any wealth.
Can you believe Adam Smith said this?
"All for ourselves, and nothing for other people seems, in every age of the world, to have been the vile maxim of the
masters of mankind."
The classical economists, Adam Smith and Ricardo, are not what you might expect.
We got some stuff from Ricardo, like the law of comparative advantage. What's gone missing? Ricardo was part of the new
capitalist class, and the old landowning class were a huge problem with their rents that had to be paid both directly and through
wages.
"The interest of the landlords is always opposed to the interest of every other class in the community" Ricardo
1815 / Classical Economist
What does our man on free trade, Ricardo, mean?
Disposable income = wages – (taxes + the cost of living)
Employees get their money from wages and the employers pay the cost of living through wages, reducing profit.
Employees get less disposable income after the landlords rent has gone.
Employers have to cover the landlord's rents in wages reducing profit.
Ricardo is just talking about housing costs, employees all rented in those days.
Low housing costs work best for employers and employees.
In Ricardo's world there were three classes. He was in the capitalist class. The more he paid in labour costs (wages) the lower
his profits would be. He was paying the cost of living for his workers through wages, and the higher that was, the higher labour
costs would be. There was no benefits system in those days and those at the bottom needed to earn money to cover the cost of living
otherwise they would die. They had to earn their money through wages. The more he paid in rents to the old landowning class, the
less there would be for him to keep for himself.
From Ricardo: The labourers had before 25
The landlords 25
And the capitalists 50
.. 100
He looked at how the pie got divided between the three groups.
There were three groups in the capitalist system in Ricardo's world (and there still are).
Workers / Employees
Capitalists / Employers
Rentiers / Landowners / Landlords / other skimmers, who are just skimming out of the system, not contributing to its success
The unproductive group exists at the top of society, not the bottom. Later on we did bolt on a benefit system to help others
that were struggling lower down the scale. Classical economics, it's not what you think.
William White (BIS, OECD) talks about how economics really changed over one hundred years ago as classical economics was replaced
by neoclassical economics.
He thinks we have been on the wrong path for one hundred years. Small state, unregulated capitalism was where it all started
and it's rather different to today's expectations.
Framing Corbyn's election defeat as a failure to understand the needs of the "Labour" electorate, and hence supporting
Standing's premise, whilst totally ignoring the fact that Corbyn was hammered by the powers of the right, BBC, MSM, Israel etc
etc is totally disingenuous and seems to me to be a case of very sour grapes.
The fact that the basic income was not implemented doesn't mean much given that there are many on all sides of the debate who
do not agree with the idea. I think Standing is just pissed off because no one listened to him.
What the proponents of the neo-liberal dispensation have not advertised, if indeed they
even know, is what replaces the 'nation?'
What replaces a nation is often referred to as a "colony", where most of the inhabitants are
no longer "citizens" but "natives" who can be exploited at will.
American unions pathetic, absolutely pathetic! We have been hearing this very same winging
from them for 50 years. Then they, universally, go out and support the glad handing
politicians who do a few rounds of golf with the their bosses and a few more jobs are lost.
Mention to them that maybe they would have a bit more job security if owned their factories
and work places, and watch the smoke start to rise from their collective heads. A hundred
years ago you could have sat in a bar, discussed workers owning the means of production and
the beers would have kept magically appearing in front of you. We are a long, long way from
Flint.
The limited successes of the old trade unions in the US have been their undoing. If only
because they always had, and continue to have, limited vision. They all think that they have
scored major victories if they squeeze another dime out of the bosses. According to this
union VP "We're at the mercy of whoever is supplying us." The guy is an idiot. He and
his cohort are at the mercy of their bosses, and they will always be at the mercy of their
bosses until they become their own bosses. Pathetic!
I thought Mr. Conway's connection of domestic manufacturing with war and imperialism,
a.k.a. 'national security', was pretty obvious. 'War is the health of the state.' However, I
suppose one might say that the American state now includes Japan. God, yes, we need more and
more 'airplanes, munitions, satellites, civilian jetliners' and so on, and more reasons to
keep armies in Japan, Korea, Taiwan, and also so on, till the end of the world.
Well yes, but the opposite also applies. If you have a self sufficient economy you don't
have to get involved in wars on the other side of the planet because that's where "your"
energy, raw materials, finance, food, key manufactured goods etc come from. The US did not
have to get involved in either WW1 or WW2 for economic reasons, it was nearly self sufficient
at that time. That is not the case today, hence the fore-ever wars in the middle east, and
military bases scattered as confetti around the globe. Did America have to globalise its
economy? No, but the wind fall profits (initially) that could be reaped from doing so could
not be resisted by America's elites. The problem now is that America's economy has now been
so gutted that it cannot function without globalisation, which will bankrupt it further.
However look on the bright side, America's elites have never been so despised and hate in
their history. And nobody expects them to change, because they have not changed for 50 years.
People are now figuring out that they have to change things themselves. Expect fireworks.
Michael Hudson (of course!) has the first and last word on this. The general principle at
work here is that U.S. industry and jobs must be off-shored so Wall Street and Washington
politicians can create more debt – IOW keep Super (monetary) Imperialism going.
The US is the world's leader in manufacturing DEBT not the wealth that really matters in
today's world.
Yes. Regrettably, the article above is whistling past the graveyard, and I too thought of
Hudson's analysis and shook my head as I read it.
If money is created as credit -- and it is -- and every notional dollar of credit has an
obverse side of debt -- and it does -- then for the U.S. to be the Richest Country In The
World™ and have an elite with so many multibillionaires, there must be debt on the the
other side of all those notional dollars the elite have created for themselves.
You might familiarize yourself with how the national government funds its spending. It
creates new dollars every time it pays a bill. No debt required. So why do we have all this
public debt if it was unnecessary to begin with? It lines the pockets of the One Percent who
buy the safest bonds in the world to insure their immense fortunes. It's a subsidy. The rich
have the best socialism in the world. Right here in the USA.
This issue has very little if any relationship to "how the national government funds its
spending" or any of the other nominally 'conservative' debt bugbears. Those "safest bonds in
the world" would not insure squat if US debt wasn't backed by the US military and threats to
bomb any country that refuses to accept more of it back into the stone age. As Minsky wrote
"Any (economic) unit can create money. The problem is getting it accepted."
The world is being destroyed environmentally as well as militarily because the world's one
percent can think of no better alternative than allowing the US to continue creating debt,
destruction and death so they can – as Trump put it – "keep score" with each
other in the game to see who can accumulate the most unpayable debt.
To paraphrase Woody Allen (or somebody) the US is allowed to continue creating debt
because the world's One Percent needs the money to continue playing their game.
the majority of stocks are weakening and not making new highs, it's not a good sign
when only 30 stocks are leading the way.
Institutional investors pile into stocks
We have different (hopefully better) ways of measuring divergence these days --
specifically, cumulative breadth indicators, new highs vs. new lows, etc., so we don't
have to "stretch" to draw a conclusion about the Dow today.
"... The psychologies of speculation and gambling are almost indistinguishable: both are dangerously gambler places a bet on a horse he is creating a risk, while the speculator who buys a share is simply involved in the transfer of an existing risk. ..."
"... To repeat Keynes's warning from the 1930s: "when the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done." Momentum trading, trend-following currency speculators, overleveraged hedge funds, and corporate managements obsessed with daily fluctuations in share quotations are unlikely to produce the optimal distribution of scarce resources in the global economy. We have reached Keynes's "third degree." ..."
"... ...options, developed by Scholes and Merton, which lies at the heart of the modem derivatives world, is dependent on the similar assump- tion diat past volatility is a reliable guide to future volatility. This assumption may be likened to driving a motorcar by looking in the rearview mirror -- line as long as the road continues straight but disastrous when you reach the first comer. ..."
For Smith, the speculator is defined by his readiness to pursue short-term opportunities for profit: his investments are fluid whereas those
of the conventional businessman are more or less fixed. This distinction was retained by John Maynard Keynes, who described "enter-
prise" as "the activity of forecasting the prospective yield of assets
over their whole life,1' in contrast to speculation, which he called "die
activity of forecasting the psychology of the market.'1
Specidation is conventionally defined as an attempt to profit from
changes in market price. Thus, forgoing current income for a
prospective capital gain is deemed speculative. Speculation is active
while investment is generally passive. According to the Austrian
economist J. A. Schumpeter, "the difference between a speculator
and an investor can be defined by the presence or absence of the
intention to 'trade,1 i.e. realize profits from fluctuations in security
prices.112 The line separating speculation from investment is so thin
that it has been said both that speculation is the name given to a
failed investment and that investment is the name given to a suc-
cessful speculation. Fred Schwed. a Wall Street wit, declared that
clarifying the difference between investment and speculation was
"like explaining to the troubled adolescent that Love and Passion
are two different things. He perceives that they are different, but
they don't seem quite different enough to clear up his problem."
Schwed concluded the two could be separated on the grounds that
the first aim of investment was the preservation of capital while the
primary aim of speculation was the enhancement of fortune.
As he put it: "Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money becoming a little."'
Similar problems of definition are encountered in distinguishing
speculation from gambling. While a bad investment may be a spec-
ulation, a poorly executed speculation is often described as a gamble. The American financier Bernard Baruch was once dismissed
from the presence of Pierpont Morgan for uttering the word "gamble" in relation to a business proposition.4 Later, Baruch recalled
that "there is no investment which doesn't involve some risk and
is not something of a gamble."
The psychologies of speculation and gambling are almost indistinguishable: both are dangerously gambler places a bet on a
horse he is creating a risk, while the speculator who buys a share is simply involved in the transfer of an
existing risk.
Speculation is generally considered riskier them
investment. The securities analyst Benjamin Graham declared that
investment requires a "margin of safety" so that the value of the
principal is maintained even in unforeseen adverse conditions.
An
uninformed or spontaneous investment is more speculative than
one in which the investor has taken the time to investigate and
assess its potential returns. Graham added that buying shares with
borrowed money was always speculative. The capitalist is confronted with a broad spectrum of risk with prudent investment at
one end and reckless gambling at the other. Speculation lies somewhere between the two.
... ... ...
It is often said that speculation never changes because human
nature remains the same. "Avarice, or desire of gain, is a universal
passion which operates at all times, in all places, and upon all per-
sons," wrote David Hume in the eighteenth century. To this we
might add that the fear of loss, emulation of one's neighbour, the
credulity of the crowd, and the psychology of gambling are equally
universal. The early stock markets were moved by hopes and fears
as much as their later counterparts. These emotions are unleashed
during moments of speculative euphoria. They follow die path of
least resistance, moulding each mania, regardless of its historical
context, into a common form. This explains why all great specula-
tive events seem to repeat themselves and why the experience of the
1690s seems so familiar.
The theory of the "rational bubble" appears to be nothing more
than an elaborate restatement of the "greater fool" investment
strategy, whereby the speculator knowingly buys shares above their
intrinsic value hoping that a "greater fool" will pay more for them
later. The exponents of the "rational bubble" appear to overlook
the fact that the success of this strategy is dependent on liquidity
(i.e., the constant presence of both buyers and sellers in the mar-
ket) and that in a panic buyers vanish at the very moment when
"rational bubble" speculators are seeking to unload their shares.
The "greater fool" method of investment has enjoyed great popu-
larity' in the 1990s American bull market where it has been
renamed "momentum investing." Speculators look to buy shares
that are rising faster than the market and sell quickly when the rise
begins to peter out.* The fate of the London banker John Martin in
1720 illustrates the dangers of this frivolous approach to invest-
ment. Early in the summer, he had gleefully argued that "when the
rest of the world is mad, we must imitate them in some measure,"
but he failed to sell out before the crash, lost a fortune, and ended
up complaining pathetically of being "blinded by other people's
advice."19
... ... ...
During the upturn of the cycle, Bagehot argued, people become
convinced the prosperity will last forever and mercantile houses
engage in excessive speculations. At the same time, an increasing
number of frauds are perpetrated on investors, which only come to
light after a crisis: "All people are most credulous when they are
most happy."
... ... ...
...According to John Stuart Mill, the seeds of each boom
are sown during the preceding crisis, when the liquidation of credit
causes asset prices to decline so severely that they become genuine
bargains. Their subsequent sharp rise from a low level leads to a
revival of speculation.55 After each crisis, the financial markets
invariably shrug off past follies and losses to confront the future
with bright optimism and fresh credulity. Capital becomes "blind,"
to use Bagehots term. Unable to remember the past, investors are
condemned to repeat it.
... ... ...
The most striking similarity between the 1920s and 1990s bull
markets is the notion that traditional measures of stock valuation
had become obsolete. Once again it was argued that an investment
in the stock market helped retain purchasing power during infla-
tionary periods and that management wras becoming more respon-
sive to shareholders' interests. Abby Joseph Cohen of Coldman
Sachs claimed that a longer business cycle and lower inflation justi-
fied an upward valuation in stock prices. In their Securities Analy-
sis, Benjamin Craham and David Dodds wrote that "instead of
judging the market price by established standards of value, the new'
era [of the 1920s] based its standards of value upon the market
price." In similar fashion, consultants in the 1990s invented a con-
cept named "market value added," which simply measured the difference between the market value of the firm and the amount of
capital tied up in it. The higher the "market value added," the
greater the firm is deemed to be worth.
The net asset value of a company -- the value of its factories,
machinery, and suchlike -- became the most despised of traditional
valuation tools. Dividend yields, which slipped to a historic low of
less than 1 Vi percent, were also dismissed as irrelevant. At times
even the price-eamings ratio, a measure favourable to speculative
values, has looked too conservative. Discounting future cash flow's
was used to justify any price for fast-growing technology companies. In late October 1996, a headline in the Investors Business
Daily, a stock market daily which published relative strength fig-
ures, asked and answered a question that vexed many minds:
"Overvalued? Not If the Stock Keeps on Rising."90
The new paradigm, or new' economics, of the 1990s provided the
intellectual underpinning for the greatest bull market in American
history. When stock prices fell sharply in October 1997, Abby
Joseph Cohen of Goldman Sachs saved the day by advising her
clients to increase their holding of shares. James Grant has sug-
gested that the reappearance of the new era ideology was a sign
that "markets make opinions not the other way round."
... ... ...
Keynes defined speculation as the attempt to forecast changes in
the psychology of the market. He compared it to various parlour
games -- snap, old maid, and musical chairs. Switching his
metaphor, Keynes likened speculation to a newspaper competition
in which the competitors have to pick out the six prettiest faces
from hundreds of photographs,
so that each competitor has to pick, not those faces which he
Itimself finds prettiest, but those which he thinks likeliest to
catch the fancy of the other competitors, all of whom are looking
at the problem from the same point of view ... We have reached
the third degree w here we devote our intelligences to anticipating what average opinion expects the average opinion to be.'8
Speculation which is a beneficial, indeed vital, component of the
capitalist process has come to dominate the system to an unhealthy
degree.
To repeat Keynes's warning from the 1930s: "when the
capital development of a country becomes a by-product of the
activities of a casino, the job is likely to be ill-done." Momentum
trading, trend-following currency speculators, overleveraged hedge
funds, and corporate managements obsessed with daily fluctuations in share quotations are unlikely to produce the optimal distribution of scarce resources in the global economy. We have reached
Keynes's "third degree."
... ... ...
...options, developed by Scholes and Merton, which lies at the heart of
the modem derivatives world, is dependent on the similar assump-
tion diat past volatility is a reliable guide to future volatility. This
assumption may be likened to driving a motorcar by looking in the
rearview mirror -- line as long as the road continues straight but
disastrous when you reach the first comer.
In common with all the
practical ideas generated by the Efficient Market Hypothesis, it is
based on the belief that when financial theories are turned into practice there is no change to the underlying reality. This was the error of
portfolio insurance in the 1980s and remained die error of the
derivatives markets a decade later. If markets are not efficient but
are subject to chaotic feedback loops, then the entire financial
superstructure created around derivatives in the 1990s, with its $50
trillion worth of exposure, is based on shaky premises.
Even outside the field of options pricing, the teaching of the Efficient Market Hypothesis has insinuated itself into the practices of
modem finance: the fads for "shareholder value" and corporate
stock-option schemes, the Capital Asset Pricing Model (which "scientifically" calculates companies' cost of capital), and popular
investment in stock index funds are all predicated, to a greater or
lesser extent, on the assumption that shares are efficiently priced by
the market. But if the hypothesis is false -- e.g., because speculative...
>
5.0 out of 5 stars
The
No. 1 history of financial speculation
Reviewed in the United States on July 3, 2018
Verified Purchase
Absolutely the single best history of financial speculation. Chancellor seems to
have assimilated just about everything one could on all the major speculative episodes, from ancient origins through the
1990s.
There's not much else to say. If you're an investor, this is a must-read history of how things can go horribly wrong in
financial markets.
In fact, with U.S. equities bumping against all-time high valuations (in mid-2018), this is the perfect moment to take
your time and read through this book. It'll show you all the ways you might be getting swept up in speculative excess,
of which you might not be aware, even if you're invested in the greatest businesses that have ever existed.
>
Shashank V. Nerurkar
4.0 out of 5 stars
Historical
Perspective of Financial Speculation
Reviewed in India on September 9, 2019
Verified Purchase
Devil Take The Hindmost is very informative book which covers the history of
financial speculation from the third century. The author has narrated relevant details from various sources which
reflects the scholarly research undertaken by him. The major speculative bubbles such as tulip mania, south sea bubble,
railway network in Britain and US, automobile revolution in US, the crash of 1929, junk bonds mania, the Japanese bubble
of 1980 and havoc created by derivatives and hedge funds after 1990 are covered in great details. One realizes that not
much has changed as far as factors that lead to financial speculation over the history. The reader will be better
equipped to compare the conditions in financial markets with historical perspective. The author could have avoided bias
against the Republicans in US and Conservatives in Britain as their opposition has not done any better in managing the
financial speculation. The book is a bit dated and as such do not cover the dot-com bubble and 2008 financial crisis.
The book is great read for all participants in financial markets.
An award-winning journalist investigates Amazon's impact on the wealth and poverty of
towns and cities across the United States.
In 1937, the famed writer and activist Upton Sinclair published a novel bearing the subtitle
A Story of Ford-America . He blasted the callousness of a company worth "a billion
dollars" that underpaid its workers while forcing them to engage in repetitive and sometimes
dangerous assembly line labor. Eighty-three years later, the market capitalization of
Amazon.com has exceeded one trillion dollars, while the value of the Ford Motor Company
hovers around thirty billion. We have, it seems, entered the age of one-click America―and
as the coronavirus makes Americans more dependent on online shopping, its sway will only
intensify.
Alec MacGillis's Fulfillment is not another inside account or exposé of our
most conspicuously dominant company. Rather, it is a literary investigation of the America that
falls within that company's growing shadow. As MacGillis shows, Amazon's sprawling network of
delivery hubs, data centers, and corporate campuses epitomizes a land where winner and loser
cities and regions are drifting steadily apart, the civic fabric is unraveling, and work has
become increasingly rudimentary and isolated.
Ranging across the country, MacGillis tells the stories of those who've thrived and
struggled to thrive in this rapidly changing environment. In Seattle, high-paid workers in new
office towers displace a historic black neighborhood. In suburban Virginia, homeowners try to
protect their neighborhood from the environmental impact of a new data center. Meanwhile, in El
Paso, small office supply firms seek to weather Amazon's takeover of government procurement,
and in Baltimore a warehouse supplants a fabled steel plant. Fulfillment also shows how
Amazon has become a force in Washington, D.C., ushering readers through a revolving door for
lobbyists and government contractors and into CEO Jeff Bezos's lavish Kalorama mansion.
With empathy and breadth, MacGillis demonstrates the hidden human costs of the other
inequality―not the growing gap between rich and poor, but the gap between the country's
winning and losing regions. The result is an intimate account of contemporary capitalism: its
drive to innovate, its dark, pitiless magic, its remaking of America with every click.
" Fulfillment vividly details the devastating costs of Amazon's dominance and brutal
business practices, showcasing an economy that has concentrated in private hands staggering
wealth and power while impoverishing workers, crushing independent business, and supplanting
public governance with private might. A critical read." ―Lina Khan, associate
professor at Columbia Law School and author of Amazon's Antitrust Paradox
"Anyone who orders from Amazon needs to read these moving and enraging stories of how one
person's life savings, one life's work, one multigenerational tradition, one small business,
one town after another, are demolished by one company's seemingly unstoppable machine. They are
all the more enraging because Alec MacGillis shows so clearly how things could have been
different." ―Larissa MacFarquhar, staff writer at The New Yorker and author of
Strangers Drowning: Grappling with Impossible Idealism, Drastic Choices, and the
Overpowering Urge to Help
"Alec MacGillis practices journalism with ambition, tenacity, and empathy that will command
your awe. Like one of the great nineteenth-century novels, Fulfillment studies a social
ill with compelling intimacy and panoramic thoroughness. In the process, Jeff Bezos's dominance
and its costs are made real―and it becomes impossible to one-click again the same."
―Franklin Foer, staff writer at The Atlantic and author of World Without
Mind
"For a generation, inequality has been rising relentlessly in the United States―not
just inequality of income and wealth, but also inequality of power and geography. In
Fulfillment , Alec MacGillis brings this crisis vividly alive by creating a broad
tableau of the way one giant company, Amazon, affects the lives of people and places across the
country. This book should be read as a call to action against the new economy's continuing
assault on working people, small businesses, and left-behind places." ―Nicholas
Lemann, author of Transaction Man
" Fulfillment addresses the human impact of current technologies and economic
inequality with rare power. People in tech don't often think about the ramifications of their
work; Alec MacGillis reminds us that it has consequences, and that even if there are no clear
solutions, we have a moral imperative to consider its effects." ―Craig Newmark,
founder of craigslist
Alec MacGillis is a senior reporter for ProPublica and the recipient of the
George Polk Award, the Robin Toner prize, and other honors. He worked previously at The
Washington Post , Baltimore Sun , and The New Republic , and his journalism
has appeared in The New York Times Magazine , The New Yorker , The
Atlantic , and other publications. His ProPublica reporting on Dayton, Ohio was the
basis of a PBS Frontline documentary about the city. He is the author of The Cynic , a
2014 biography of Mitch McConnell. He lives in Baltimore.
All of these "advancements" are around removing face-to-face interaction with other people.
Whether work-from-home, automated rental & purchase, retail goods delivered, etc. Curious
what long term impact this seemingly exponential shift toward human interaction as personal
irritant is doing to our social cohesion.
Is standing in a line always a burden or is it sometimes a benefit? Sure, sometimes I just
want to do my business and go but have also met fascinating people while in lines. I'm assuming
many of the people working at that ski resort are "ski bums" who used the job as a way to
fulfill their skiing lifestyle. They are a part of the skiing culture that has been removed
from the experience now. So many local jobs are being removed and replaced by tech jobs. We
barely have local community left and it's being replaced with, what? Social media? I'm a big
fan of our online communities here at NC so it's not all bad of course.
Yes, change is inevitable and much of this is convenient but just curious what it's doing to
us as a society. Maybe it's allowing us more time to focus on closer social bonds we've already
developed? Less time in lines or stores means more time with friends and family?
Our prior ways weren't exactly healthy so honestly I don't know if this will lead to better
ways or push us further apart. Any insights or ideas are appreciated. Just been pondering it
and curious what other think.
"In a system that generates masses, individualism is the only way out. But then what happens
to community -- to society?" – Jeanette Winterson
Maybe it's allowing us more time to focus on closer social bonds we've already developed?
Less time in lines or stores means more time with friends and family?
The social bond with your doctor is pretty important I would say. As it is with your local
bookseller or grocery store. They are all people too, and being face to face with them you
build more trust and compassion. This helps us both in times of hardship
I'll take the most dire view here (someone has to!):
Every step this society takes away from face-to-face interaction, and therefore community
and fellowship, is going to proportionally increase the death rate when the rolling disasters
of our era arrive properly at our shore.
I wish I could reach out and shake everyone who is like "I interact with people too much
already, this enforced isolation is GREAT!" don't they realize this philosophy might
kill them? In the upcoming chaos, if they're an unknown unknown to the people around
them, don't they realize they'll be all too easy to leave behind or even sacrifice??
This seems to be the path our society is absolutely determined to take – so be it.
Even NC is posting articles that are more or less cheering it. But as for me, I will rage, rage
against the dying of the light.
Found myself in a rather long line (no complaints) last Sat. for 2nd Covid vaccine. Realized
later that between the long line waiting and the after waiting to leave it was probably the
most people interaction I've had for over a year! We are social creatures. Our system preaches
"individualism" because that is the only way the "instant profit" system can operate. There are
other ways; our ruling classes opt out of those and the general population becomes muddled
instead.
"Modernity" and "AI" technology is great but if u have no human interaction eventually those
traits leave and you have what???? A dead society.
And with every step forward there is a step backward. Going digital across the board is not
always good as it takes away privacy and I have an example here. There is a linked article in
Links today called "Are punitive rules forcing doctors to hide their mental health problems?"
In it, a young doctor is under enormous mental stress and turns to older doctors for advice.
They 'advised her to drive out of town, pay cash and use a pseudonym if she needed to talk
to someone.' If most transaction were done digitally, how would this doctor and others like
her go for help without endangering their jobs? What options would they have?
In cases like this, the only 'options' allowed will be "official" options. As my
misguided attempt at "therapy" years ago taught me, often times, the analyst can be toxic.
Also, in a mental health setting, I encountered the "official" preference for medication
over 'therapy.' Both are situations that put the 'authority's' preferences above the
patients. One big way I eventually 'twigged' to the dystopian dynamic was in observing the
attitudes and body language of the "health care professionals" I was dealing with.
Electronica and devices have no agency, and no "body language." The entire process is
removing useful tools for the patient to navigate the shoals and reefs where the sharks
hang out in any bureaucracy.
The other, knock on effect of telemedicine we encountered was that the charges for
electronic "office visits" have not dropped. This is analogous to when a grocery store
keeps the cost of an individual item stable and reduces the package size.
Others have said it better than I, but it bears repeating; 'modern' methods are reducing
people to the status of 'things.' Just as in the process of reducing a person or group of
people to the status of "other," the next step is 'removal.'
Cash is agency. The spying may be efficient, but its main purpose is to take away
agency. Just like "software as a service" or "in the cloud", when you could just as easily
have the same functionality on your device which you own. The vendors don't want that. They
want to control you.
The only alternative is to support and keep alive businesses that accept customers with
cash and agency. And boycott the rest. Even if it is inconvenient!
Yay, less human interaction, more isolation, fewer seasonal jobs for high school or college
students. More magical technological solutions that the on-site staff has no idea how to fix
when they stop working. You're too busy and important to stand in line! That's socialism! Let's
tell everyone that they're risking imminent death by being around other people and then sell
them ways to avoid it!
The U.S. exported its production of goods and became a "service" economy or a "knowledge"
economy. Thanks to Corona much of the service employment has become virtual. Knowledge workers
can now work from home. How many knowledge workers possess knowledge unique to the U.S. and how
many could be replaced by remote workers from somewhere else?
This post describes changes, some of which may prove temporary and others may prove
permanent. I believe most of the changes and their longer term implications require time to
fully unfold. I am not fond of virtual service. I order online from the independent vendors
still around as Amazon, E-Bay, Etsy, and other platforms grind them down, but how long will
they remain independent? The U.S. Postal Service is under attack and when it falls to
privatization what kind of e-commerce will come after that? Cashless means exposed to me --
exposed to tracking and monitoring and exposed to theft from the shadows.
I don't understand the rush to eliminating cash. Cash is the last way to opt out of
commercial control. People seem to positively embrace it, and I don't get it.
(Exception: I understand why legal cash-business owners like the idea.)
I hear crime prevention and money laundering prevention as reasons. The first is code
for "control of poor people", the second is true as far as it goes, but that's not very
far. You're targeting mainly drug money while completely ignoring corporate and
high-net-worth individuals.
My question (to no one) is how was the automation financed? Did the ski company issue
new shares in equity with first refusal to the employees? Or did the company instead mosey
on down to a local branch of the government-privileged private credit cartel to have
themselves a heaping helping of the PUBLIC'S (including the employees') CREDIT but for the
company owners' PRIVATE GAIN?
As a partridge that hatches eggs which it has not laid,
So is a person who makes a fortune, but unjustly;
In the middle of his days it will abandon him,
And in the end he will be a fool. Jeremiah 17:11
The human population didn't grow to 8 billion through physical distancing, touchless
interaction, and living in isolation. ecommerce is a thing now, but it may not have a long
shelf life. There is an inherent need for human interaction if the specie is to prosper. The
pandemic is transitory and will eventually pass; human needs, wants, and desires will endure. I
look forward to the day when I can speak with a store clerk, browse shelves and racks, and pay
for things with currency. I don't believe that there is no going back. In fact, we must go
back. At least most of the way back.
Tesla down 31%? Not a problem I will use the dividends to offset my losses. Oh wait!
BigJJ 13 minutes ago
I've never understood how Tesla could possibly make money given all the infrastructure
they had to install just to sell shoddily thrown together rusty cars that are useless when
the grid crashes.
Sound of the Suburbs 41 minutes ago (Edited)
...What was the ponzi scheme of inflated asset prices that collapsed in 2008?
El Hosel 1 hour ago (Edited)
Clearly "It's different this time", now that everybody knows "stocks only go up"...
Apple
( AAPL ) is
near an all-time high. So are tech giants Adobe ( ADBE ) and
PayPal ( PYPL ) .
Recent initial public offerings Zoom ( ZM ) ,
Cloudflare ( NET ) and
Peloton ( PTON ) are
at record levels as well. The Nasdaq is a hair's breadth from busting through 10,000
again . Call it irrational exuberance, Part Deux. Former Federal Reserve chairman Alan
Greenspan used that term in a speech nearly a
quarter-century ago to describe the 1996 boom in the stock market -- particularly the rise
of big tech stocks and the wave of unprofitable internet IPOs. This year's tech rally is indeed
eerily reminiscent of that late 1990s and early 2000s period, when the Nasdaq surged past the
3,000, 4,000 and 5,000 levels in a matter of months before finally peaking -- and then crashing
in April of 2000.
This week, Head of Investments Nicky Eggers talks to Will Hobbs, Chief Investment Officer,
about concerns that we are watching another technology bubble inflate. They discuss if such
dominance of a handful of companies is unusual and what is driving it. Also, does it make these
still surging stock markets more vulnerable? And what has the Black Death got to do with any of
it?
"There is a clear consensus that we are witnessing our second tech bubble in 15 years," said
Mr. Einhorn of Greenlight Capital Inc. "What is uncertain is how much further the bubble can
expand, and what might pop it."
He described the current bubble as "an echo of the previous tech bubble, but with fewer
large capitalization stocks and much less public enthusiasm."
There are three reasons he cited in an investor letter that back his thesis: the rejection
of "conventional valuation methods," short sellers being forced to cover positions and big
first-day pops for newly minted public companies that "have done little more than use the right
buzzwords and attract the right venture capital."
He didn't specify which companies he felt met that criteria.
Some of the market's biggest
momentum plays , such as biotech, Internet and social-media stocks, have been hit hard
since early March amid concerns that they have gotten too pricey. Many of those names have
recovered some of those losses over the past week and a half.
Without disclosing specific names, Mr. Einhorn said he has shorted a basket of so-called
momentum stocks. He highlighted the risk of such a move: "We have repeatedly noted that it is
dangerous to short stocks that have disconnected from traditional valuation methods," Mr.
Einhorn said. "After all, twice a silly price is not twice as silly; it's still just
silly. "
But now that there is "a clear consensus" that tech stocks are in a bubble, he said he is
more comfortable shorting a basket of these high-flying stocks.
"A basket approach makes sense because it allows each position to be very small, thereby
reducing the risk of any particular high-flier becoming too costly...When the prices reconnect
to traditional valuation methods, the de-rating can be substantial," he said. "There is a huge
gap between the bubble price and the point where disciplined growth investors (let alone value
investors) become interest buyers."
The last time the Internet bubble burst in the early 2000s, Cisco Systems dropped 89% and
Amazon.com Inc. fell 93%, he said. "While we aren't predicting a complete repeat of the
collapse, history illustrates that there is enough potential downside in these [momentum] names
to justify the risk of shorting them," Mr. Einhorn said.
Greenlight Capital lost 1.5% in the first quarter, the New York hedge fund said Tuesday. The
firm said it lost money on its bets against Keurig Green Mountain Inc. and Chipotle Mexican Grill Inc.,
among other wagers, while making money on Micron Technology Inc.
Even Société Générale – which rightfully wrote that
"markets will eventually turn but picking bottoms in this type of market is risky business"
– in a note on Friday discussed the "dead cat bounce." That's the little boost in the
market that comes when speculators cover their positions the day after big damage. The French
bank advised they should be "sold into until there are clear catalysts for a turn."
But the truth is that no one knows whether a "dead cat bounce" is a dead count bounce or
something else, even if you have all the short-covering information. Everything is temporary.
Everything is subject to change.
That makes this whole market a casino. Beating a casino requires you to get the odds in your
favor -- but you'll never get them more than just a little in your favor. In the stock market,
they are in your favor if you play it long. In the short term? No one knows.
The next 10
years
Here's Warren Buffett
recently : "I also don't think that I can make money by predicting what's gonna go on next
week or next month. I do think I can make money by predicting what's gonna happen in 10
years."
A lot of Wall Street research has internalized those principles, but the job of people
predicting the market is to predict -- and beat -- the market. Buffett would tell you that just
owning the broad market is fine. You can join it without much thought -- and for cheap --
instead of trying to beat it, which you probably can't do.
A very sensible research note from Bank of America Securities put it succinctly: "avoid
panic selling." It also offered a new perspective on what happens when you miss the 10 best
days of the stock market -- which you can't predict because they can happen when the market is
awful or when the highs are all-time.
"Since the 1930s, if an investor sat out the 10 best return days per decade, his/her returns
would be just 91% compared to 14,962% returns since then," the note said.
In other words, it is incredibly risky to try to time something that is really hard to time.
And in today's extremely volatile market, the stakes are much, much higher.
We have repeatedly noted that
it is dangerous to short stocks that have disconnected from traditional valuation methods.
After all, twice a silly price is not twice as silly; it's still just silly. This understanding
limited our enthusiasm for shorting the handful of momentum stocks that dominated the headlines
last year. Now there is a
clear consensus that we are witnessing our second tech bubble in 15 years. What is
uncertain is how much further the bubble can expand, and
what might pop it .
Given the enormous stock price volatility, we decided to short a basket of bubble stocks. A
basket approach makes sense because it allows each position to be very small, thereby reducing
the risk of any particular high-flier becoming too costly. The corollary to "twice a silly
stock price is not twice as silly" is that when the prices reconnect to traditional valuation
methods, the de-rating can be substantial. There is a huge gap between the bubble price and the
point where disciplined growth investors (let alone value investors) become interested buyers.
When the last internet bubble popped , Cisco (the best of the best bubble stocks) fell 89%,
Amazon fell 93%, and the lower quality stocks fell even more.
In the post-bubble period, people stopped talking about valuing companies based on eyeballs
(average monthly users), total addressable market (TAM), or price-to-sales.
When the re-rating occurred, the profitable former high-fliers again traded based on P/E
ratios, and the unprofitable ones traded as a multiple of cash on the balance sheet. Our
criteria for selecting stocks for the bubble basket is that we estimate there to be at least
90% downside for each stock if and when the market reapplies traditional valuation to these
stocks. While we aren't predicting a complete repeat of the collapse, history illustrates that
there is enough potential downside in these names to justify the risk of shorting them.
At this point, three stocks -- Apple, Amazon and Microsoft -- comprise about 16% of the
S&P 500 and a third of the Nasdaq 100. Their combined value of $5 trillion is bigger than
Germany's entire economy. And the last time the "Big 3" were this expensive relative to free
cash flow was during Tech Bubble Version 1.0.
There is a consensus that there is tech bubble. But it is completely unclear when it will
burst. David Einhorn made the same point in 2014: 'We Are Witnessing Our Second Tech Bubble in 15
Years' David Einhorn's make his name by shorting Lehman Brothers before it dry heaved out of
existence
Today, the S&P 500 and TSX Index are both down 4% and 10%, respectively, from their
pre-pandemic heights. Meanwhile, the tech-heavy NASDAQ Composite is at a fresh all-time high,
up a whopping 9% above those February 19 heights, as tech stocks have led the upward
charge.
Many folks have been bringing into question the divergence between the stock market and the
economy lately. But what about the divergence in performance between the tech-heavy NASDAQ and
other indices?
There's no question that the recent rally in tech stocks rhymes with the lead-up to the tech
bubble that burst in 2000, but is the tech sector really in a bubble? Or are the lofty
valuations warranted given the stock market is pointing to a nice economic recovery that could
be in the cards in 2021?
Is there a tech bubble that could burst in 2020?
Probably not.
While the recent tech-driven rally may be of concern to those who invested through the
dot-com bust, tech stock valuations, in aggregate, aren't at the absurd levels they were in
1999. So, no tech stocks aren't partying like it's 1999. At least, not yet.
However, I do see pockets of severe overvaluation within the tech sector that are quite
pronounced. For instance, the cloud stocks that have been riding high on pandemic tailwinds are
looking dangerously frothy at this juncture.
Some of the biggest tech winners over the past quarter now see themselves up well over 100%
over the last few months. Others have more than tripled. And their valuations are now above and
beyond that of their historical averages. While pandemic tailwinds are undoubtedly worth a
premium, I'm in the belief that many momentum chasers looking to the hottest tech stocks today
are in danger of paying up for many years worth of growth right off the bat.
Growth
investors: Valuation always matters
I don't care if you're looking at the best business in the world with the strongest
tailwinds at any given instance. If the price paid is too high, you could stand to lose a
considerable amount of your hard-earned investment dollars.
That's why I'd encourage investors to always consider the valuation of a stock they're
looking to purchase, rather than letting emotions like the fear of missing out force you to buy
at a stock at whatever price Mr. Market asks.
One has to draw a line somewhere, and with some of the hottest stocks out there like Shopify
(TSX:SHOP)
(NYSE:SHOP) , I think there's a chance that the line has been crossed and that investors
looking to buy after the stock's unprecedented bounce could put themselves at risk of feeling
the full force of a correction sparked by a broader correction in tech stocks.
Sure, tech-driven growth is one of the few places that have been
working amid the pandemic. And while I've been pounding the table on shares of Shopify over
the past few months, I'm growing reluctant to recommend the name at these heights.
Shopify has had its fair share of plunges en route to $1,400, not because the company
fundamentals have decayed, but because the stock needed a chance to take a breather.
The tech stocks riding high on pandemic tailwinds are overdue for a mild correction in the
event of a broader growth-to-value rotation. So, if you doubled up on shares of Shopify over
the last few months, can it hurt to take your principal off the table, as you look to play with
the house's money? I'd say it's only prudent, as tech valuations continue swelling at a quicker
rate than most other stocks.
Foolish takeaway
Don't get me wrong. Shopify is a wonderful business -- an e-commerce kingpin that's a force
to be reckoned with. The company is firing on all cylinders under its unstoppable founder
Tobias Lütke, but the valuation has become stretched.
Although I don't see a tech bubble, I do think the hottest tech flyers are at a high risk of
correcting in favour of neglected value stocks.
Fool contributor Joey Frenette has no position in
any of the stocks mentioned. Tom Gardner owns shares of
Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify.
"... Many of these new companies made outrageous, and often fraudulent, claims about their business ventures for the purpose of raising capital and boosting share prices. ..."
"... However, in the midst of the "mania," things like valuation, revenue, or even viable business models didn't matter. It was the "Fear Of Missing Out," which sucked investors into the fray without regard for the underlying risk. ..."
"... Sir Issac Newton, the brilliant mathematician, was an early investor in South Sea Corporation. Newton quickly made a lot of money and recognized the early stages of a speculative mania. Knowing that it would eventually end badly, he liquidated his stake at a large profit. ..."
"... However, after he exited, South Sea stock experienced one of the most legendary rises in history. As the bubble kept inflating, Newton allowed his emotions to overtake his previous logic and he jumped back into the shares. Unfortunately, it was near the peak. ..."
"... The story of Newton's losses in the South Sea Bubble has become one of the most famous in popular finance literature. While surveying his losses, Newton allegedly said that he could "calculate the motions of the heavenly bodies, but not the madness of people." ..."
"... Yes, this time is different. "Like all bubbles, it ends when the money runs out." – Andy Kessler ..."
I have previously discussed the importance of understanding how "physics" plays a crucial role in the stock market. As Sir Issac
Newton once discovered, "what goes up, must come down."
Andy Kessler, via the Wall Street
Journa l, recently discussed a similar point with respect to the momentum in stock prices. To wit:
"Does this sound familiar: Smart guy owns stock in March at $200, sells it in June at around $600, but then buys it back in
July and August for between $900 and $1,000. By September it's back at $200. Ouch. Tesla this year? Yahoo in 2000? Nope. That
was Sir Isaac Newton getting pulled into the great momentum trade of the South Sea Co., which cratered 300 years ago this month.
He lost the equivalent of more than $3 million today. Newton, whose second law of motion is about the momentum of a body equaling
the force acting on it, didn't know that works for stocks too."
To understand what happened to the South Sea Corporation, you need a bit of history.
The South Sea History
In 1720, in return for a loan of Ł7 million to finance the war against France, the House of Lords passed the South Sea Bill, which
allowed the South Sea Company a monopoly in trade with South America.
England was already a financial disaster and was struggling to finance its war with France. As debts mounted, England needed a
solution to stay afloat. The scheme was that in exchange for exclusive trading rights, the South Sea Company would underwrite the
English National Debt. At that time, the debt stood at Ł30 million and carried a 5% interest coupon from the Government. The South
Sea company converted the Government debt into its own shares.
They would collect the interest from the Government and then pass it on to their shareholders.
Interesting Absurdities
At the time, England was in the midst of rampant market speculation. As soon as the South Sea Company concluded its deal with
Parliament, the shares surged to more than 10 times their value. As South Sea Company shares bubbled up to incredible new heights,
numerous other joint-stock companies IPO'd to take advantage of the booming investor demand for speculative investments.
Many of these new companies made outrageous, and often fraudulent, claims about their business ventures for the purpose of
raising capital and boosting share prices. Here are some examples of these companies' business proposals (History House, 1997):
Supplying the town of Deal with fresh water.
Trading in hair.
Assuring of seamen's wages.
Importing pitch and tar, and other naval stores, from North Britain and America.
Insuring of horses.
Improving the art of making soap.
Improving gardens.
The insuring and increasing children's fortunes.
A wheel for perpetual motion.
Importing walnut-trees from Virginia.
The making of rape-oil.
Paying pensions to widows and others, at a small discount.
Making iron with pit coal.
Transmutation of quicksilver into a malleable fine metal.
For carrying on an undertaking of great advantage; but nobody to know what it is.
A Speculative Mania
However, in the midst of the "mania," things like valuation, revenue, or even viable business models didn't matter. It was
the "Fear Of Missing Out," which sucked investors into the fray without regard for the underlying risk.
Though South Sea Company shares were skyrocketing, the company's profitability was mediocre at best, despite abundant promises
of future growth by company directors.
The eventual selloff in Company shares was exacerbated by a previous plan of lending investors money to buy its shares. This "margin
loan," meant that many shareholders had to sell their shares to cover the plan's first installment of payments.
As South Sea Company and other "bubble " company share prices imploded, speculators who had purchased shares on credit went bankrupt.
The popping of the South Sea Bubble then resulted in a contagion that spread across Europe.
Newton's Folly
Sir Issac Newton, the brilliant mathematician, was an early investor in South Sea Corporation. Newton quickly made a lot of
money and recognized the early stages of a speculative mania. Knowing that it would eventually end badly, he liquidated his stake
at a large profit.
However, after he exited, South Sea stock experienced one of the most legendary rises in history. As the bubble kept inflating,
Newton allowed his emotions to overtake his previous logic and he jumped back into the shares. Unfortunately, it was near the peak.
It is noteworthy that once Newton decided to go back into South Sea stock, he moved essentially all his financial assets into
it. In general, Newton was intimately familiar with commodities and finance. As Master of the Mint, his post required him to make
many decisions that depended on market prices and conditions. The story of Newton's losses in the South Sea Bubble has become
one of the most famous in popular finance literature. While surveying his losses, Newton allegedly said that he could "calculate
the motions of the heavenly bodies, but not the madness of people."
Throughout financial history, markets have evolved from one speculative "bubble," to bust, to the next with each one being believed
"it was different this time." The slides below are from a presentation I made to a large mutual fund company. What we some common
denominators between all previous bubbles and now.
The table below shows a listing of assets classes that have experienced bubbles throughout history, with the ones related to the
current environment highlighted in yellow. It is not hard to see the similarities between today and the previous market bubbles in
history. Investors are currently chasing "new technology" stocks from Zoom to Tesla, piling into speculative call options, and piling
into leverage. What could possibly go wrong?
Oh, by the way, the slides above are from a 2008 presentation just one month before the Lehman crisis. The point here is that
speculative cycles are always the same.
The Speculative Cycle
Charles Kindleberger suggested that speculative manias typically commence with a "displacement" which excites speculative interest.
The displacement may come from either an entirely new object of investment (IPO) or from increased profitability of established investments.
The speculation is then reinforced by a "positive feedback" loop from rising prices. which ultimately induces "inexperienced investors"
to enter the market. As the positive feedback loop continues, and the "euphoria" increases, retail investors then begin to "leverage"
their risk in the market as "rationality" weakens.
The full cycle is shown below.
During the course of the mania, speculation becomes more diffused and spreads to different asset classes. New companies are floated
to take advantage of the euphoria, and investors leverage their gains using derivatives, stock loans, and leveraged instruments.
As the mania leads to complacency, fraud and manipulation enter the market place. Eventually, the market crashes and speculators
are wiped out. The Government and Regulators react by passing new laws and legislations to ensure the previous events never happen
again.
The Latest Mania
Let's go back to Andy for a moment:
"When bull markets get going, investors come out of the woodwork to pile in. These momentum investors -- I call them momos
-- figure if a stock is going up, it will keep going up. But usually, there is some source of hot air inflating stocks: either
a structural anomaly that fools investors into thinking ever-rising stock prices are real or a source of capital that buys, buys,
buys -- proverbial 'dumb money.' Think of it as a giant fireplace bellows, an accordion-like contraption that pumps in fresh oxygen
to keep flames growing." – Andy Kessler
We have seen these manias repeated throughout history.
In 1929 you could buy stocks with as little as a 5% down payment
The 1960s and '70s had the Nifty Fifty bubble.
In 1987 it was a rising dollar, portfolio insurance, and major investments by the Japanese into U.S. real estate.
In 2000, it was the new paradigm of the internet and the influx of new online trading firms like E*Trade creating liquidity
issues in Nasdaq stocks. Additionally, record numbers of companies were being brought public by Wall Street to fill investor demand.
In 2008, subprime mortgages, low interest rates, and lax lending policies, combined with a litany of derivative products inflated
massive bubbles in debt instruments.
In 2020?
What about today? Look back at the chart of the South Sea Company above. Now, the one below. See any similarities. Yes, that's
Tesla. However, you can't solely blame the Federal Reserve as noted by Andy:
"Most simply blame the Federal Reserve -- especially today, with its zero-interest-rate policy -- for pumping the hot air that
gets the momos going. Fair enough, but that's only part of the story. Long market runs have always allured investors who figure
they're smart to jump in, even if it's late.
Everyone forgets the adage, 'Don't mistake brains for a bull market.'"
As stated, while no two financial manias are ever alike, the end results are always the same. Are there any similarities in today's
market? You decide.
"From SPACs, or special purpose acquisition companies, which are modern-day blind pools that often don't end well. Today's
momos also chase stock splits, which mean nothing for a company's actual value. Same for a new listing in indexes like the S&P
500. Isaac Newton could explain the math." – Andy Kessler
You get the idea. But one of the tell-tale indications is the speculative chase of "zombie" companies which are only still alive
primarily due to the Federal Reserve's interventions.
Fixing The Cause Of The Crash
Historically, all market crashes have been the result of things unrelated to valuation levels. Issues such as liquidity, government
actions, monetary policy mistakes, recessions, or inflationary spikes are the culprits that trigger the "reversion in sentiment."
Importantly, the "bubbles" and "busts" are never the same. I previously quoted Bob Bronson on this point:
"It can be most reasonably assumed that markets are efficient enough that every bubble is significantly different than the
previous one. A new bubble will always be different from the previous one(s). Such is since investors will only bid prices to
extreme overvaluation levels if they are sure it is not repeating what led to the previous bubbles. Comparing the current extreme
overvaluation to the dotcom is intellectually silly.
I would argue that when comparisons to previous bubbles become most popular, it's a reliable timing marker of the top in a
current bubble. As an analogy, no matter how thoroughly a fatal car crash is studied, there will still be other fatal car crashes.
Such is true even if we avoid all previous accident-causing mistakes."
Comparing the current market to any previous period in the market is rather pointless. The current market is not like 1995, 1999,
or 2007? Valuations, economics, drivers, etc. are all different from cycle to the next.
Most importantly, however, the financial markets always adapt to the cause of the previous "fatal crash." Unfortunately, that
adaptation won't prevent the next one.
Yes, this time is different. "Like all bubbles, it ends when the money runs out." – Andy Kessler
My eyes were caught by a headline in a business paper yesterday. It said, "Steady rise in
shady deals, price rigging"...
But is greed really good?
I still remember a time in late 2008 when a lot of retail investors I met, including some from
within my family, suggested me that the stock market was a casino only reserved for the lucky
and wealthy few.
Ironically, these very people were playing this casino till a few months ago (around January
2008) when the markets were acting like a drug addict on a high.
The only different was that instead of slot machines, these people were betting on rising
stock prices.
Since the game was there to be won, or so these people thought, they played and played this
casino till the cops came, and the house came crashing down.
History is proof that such people, who play the casino called stock markets, ultimately lose
it all. Because history is also proof that in the casino business, it's the house (the casino)
that always wins and not the gamblers.
The case with gamblers is that while they win for some days, one fine day they lose it all
to the house.
This is exactly what happens to people who treat the stock market as a casino and gamble
with the mindless hope of winning it all.
Let me remind them some lessons from the history of stock markets.
Once upon a time
You see, the original design of the stock market was purely capitalist in intention.
The stock market was created to provide a means for business people – entrepreneurs,
inventors, developers – to obtain needed investment capital, to start or to expand their
businesses.
So stocks were issued, bankers and other investors bought the stock, and the businesses made
use of the invested money. But once a business started flourishing and was producing a profit,
it returned the money back to the stock holders so that it could be used by other
enterprises.
Over the years however, this last part of the process was completely forgotten.
As years passed, the brokers quickly realized that they could make lots of easy money in
trading shares back and forth. They became middlemen, in charge of the flow of capital, earning
their commission on each and every transaction.
As we see now, the game is no longer about capital and businesses, and has become one where
everything is centered on the flow of money from one investor to another, instead of one
business to another.
And in this flow, while investors get doomed time and again, brokers always make money!
This is exactly like it happens in a casino. One gambler gets rich at the expense of others,
but ultimately loses it all.
But whatever happens, the broker (the casino) always wins.
Stock market = Casino?
"So there's no difference between the stock market and casino?" you may start to wonder.
Well, not much!
One difference is that slot machines are replaced by coloured and confusing graphs, and the
loud ring of the jackpot alarm bells is replaced by scary headlines in business channels and
newspapers.
But stock brokers earn their commissions from the flow of traffic, just as in the
casinos.
Also, like in a casino, gamblers bring in lots of money and leave a portion of it behind
(most often everything they came with), thinking that they had a really good time.
So, the money goes into the stock market casino, but one question never seems to get asked
or answered: Where does all that money go?
Of course these are paper losses, but a significant part of these are real gains for the
brokers, who continue to make their bucks while everyone and his mother is selling stocks like
crazy.
Coming back to the question whether the stock market resembles a casino, I've realized over
the years that the question is deeper than it appears.
When I was asked this question a few years back, I used to reply, "No! Casinos are for
gamblers and the stock market is for investors."
However, what I've realized over these years is that there indeed are some similarities as
well as differences (as we just discussed above) between the two.
The closest similarity between the two lies in the mindset of the players/gamblers.
Gamblers go to the casino hoping for the big win. We all hear about the person who went in
poor and left the casino with millions. This seems an easy way to get rich.
What we fail to understand is the enormous odds against such a huge win. But we remain
hopeful and optimistic, and so casinos thrive.
"I would be the next millionaire!" is what all gamblers think till the time they come out of
the casino.
Unfortunately, the stock market has become like a casino for too many people, as the data
from SEBI also suggests.
"Haven't you heard about the guy who bought an unknown stock on a tip from his brother's
friend's colleague and watched it turn into the next Infosys ," asked a
friend. "I wish I was that guy!"
With such a thought, which most people in the stock market have, they buy a stock. Then they
check the ticker every 10 minutes for the next month, just like the gambler watching the wheels
turn on a slot machine, waiting for that "Yes, I'm the millionaire!" moment.
If it doesn't pay off, they speculate on another stock, just like a gambler goes to another
slot machine to try his luck.
However, the market does not operate exactly like a casino. It's the gamblers who think it
does.
In a casino, the longer you play, the more you will lose (remember, the house always
wins!).
However, in the stock market, the longer you play, the more likely you are to win.
Of course you will hear stories of people who made a quick killing in the stock market, just
as there have been people who left the casino with millions, but always remember this for a
fact – these are exceptions, not the rule.
The rule is that you can create wealth from the stock market only by buying quality
businesses and holding them over the long run.
So my answer to the question – Is stock market a casino? – isn't "No! Casinos
are for gamblers and the stock market is for investors."
The answer is – "You must know the difference and not try to treat stock market like a
casino."
If you treat the stock market like a casino, you will be a loser in the long run.
Though you might not know it from the enthusiasm of the gamblers, the current Buffett
indicator
reveals an overwhelmingly inflated stock market . Today's market cap sits at a staggering
185.4% over GDP. Even if total assets of Federal Reserve banks are included, the indicator is
still 137% over GDP. Based on these metrics, the stock market is estimated to return
-2.5% per year (on average) for the next eight years . That number doesn't even
include inflation.
Take a long, hard look at your retirement savings. Check your allocations to high-risk,
overvalued assets.
The first Fed stimulus was issued in March 2020 to prop up the economy in the midst of the pandemic. A second stimulus was issued
in January 2021.
Both seem to have set the stage to turn the markets into an overvalued "casino,"
and
here's why
What exactly did the stimulus stimulate?
The first pair of Fed "free money" stimulus packages seemed to, at least partially, do their job from a consumer standpoint.
Consumers spent money in record amounts on both
durable
and
nondurable
goods
according to official sources.
Durable goods spending spiked by about 18% to an adjusted rate of
$1.86 trillion
annually,
as you can see on the chart below:
Nondurable goods spending (things like energy and food) also increased by roughly 6% to an adjusted rate of
$3.21
trillion
annually.
So why all the concern about the high-risk market "casino" if the stimulus checks went toward buying stuff?
Strap in, because this is about to take a weird turn in the
wrong
direction
Less "pent up" consumer spending
According to
Wolf
Richter
, it seems like one reason that consumers spent like they did for the last year
is
they
deferred their mortgages:
Millions of homeowners didn't have to make their mortgage payments because they'd entered their mortgages into forbearance
programs.
But "2.6 million mortgages are still in forbearance,"
according to the
article
.
Eviction bans and student loans
automatically
going into forbearance are only
some
of
the reasons consumers went on the spending spree we saw above.
The problem is, either these mortgages, rent agreements, and loans eventually have to be repaid by the consumer, or the lenders
might have to seek other remedies.
To complicate matters even more, Wolf
thinks
any
demand for consumers to spend more could evaporate completely:
What will come when this crisis settles down, and when this free money fades, is a scenario where consumers have bought all
the goods they wanted to buy. That's the opposite of pent-up demand.
If the potential implications of this weren't bad enough, it still gets more interesting.
Even
more
stimulus?
At this moment, Congress is
thinking
about
raining even more "free cash" down on Americans.
If Wolf's prediction is right, and pent up consumer demand is gone, where will the money go?
I call it, or something like it,
the
"
boredom
markets
hypothesis
":
People got bored in their coronavirus-related lockdowns, and they couldn't bet on sports because sports were canceled, so they
turned to
betting on stocks as a form of entertainment
, not investment
or financial analysis.
The stock market is a casino that happens to still be open
.
[emphasis added]
"Robinhood's (RBNHD) trading in equities and options spiked to a level
more than double
its
previous peaks,"
thanks
to
these gamblers.
You may think calling the stock market "casino-like" is an exaggeration. Massachusetts financial regulators disagree. When they
filed a complaint against Robinhood last year, they accused the app of
encouraging
frequent trading
, rewarding users with carefree animations like confetti (whether the trade is profitable or not).
I have to say, I sometimes play computer games on my phone, and my impression is that the thing that distinguishes Robinhood
from other smartphone games is not so much the in-app animations as it is the
money
.
Like, on Robinhood, you play a game on your phone, and sometimes you win money! Other times you lose money!
Whether or not it's because of the confetti, we do know that Robinhood's $0-per-trade business model forced other brokerages
including Fidelity, E*trade, TD Ameritrade, even Charles Schwab to match their free-trading model.
This competition put even more money on the table.
Retail investors going "all in" on their casino bets?
In addition to Robinhood's spiking trade volume, "Fidelity's retail accounts totaled 26M in 2020, up 17% from a year earlier,
while daily trading volume doubled,"
according
to
an article on Seeking Alpha. "Brokerages were also bolstered as more people stayed at home due to COVID-19."
We've been wondering why currently-astronomical stock prices keep rising, inflating the
already
historic "everything bubble"
even more. It seems like the Fed isn't
just
supporting
stock prices through "quantitative easing," but
also
by handing out chips for the
world's biggest casino.
We can expect more stock market chaos. Maybe from "short squeezes" like the WallStreetBets fiasco in the last week of January. Or
we might see even sillier things like gambling on a stock because
it
has a cool name
The individual investors that powered GameStop Corp.'s meteoric rise have a new target: Rocket Cos., the parent company of
Quicken Loans. Trading of Rocket shares was halted several times this week because of its volatility. Individual investors on
WallStreetBets, the Reddit community that gave birth to GameStop's rise, have been encouraging each other to buy the stock in
recent days and sharing evidence of their own massive gains. They have relished in the company's name -- Rocket -- an apt one for
their goal of higher prices. "The $RKT is fueled and ready for liftoff," one user wrote early this week.
Matt Levine's analysis
: "An important feature of modern stock markets, unfortunately, is that companies sometimes go up not
for any fundamental reason but because their names or tickers sound like something good. It makes as much sense as everything
else, which is to say none at all."
The financially savvy know that, in the typical Vegas casino, it's a well-known fact that the odds are stacked in favor of the
house. Some say, "The house always wins."
Don't gamble your retirement savings
Though you might not know it from the enthusiasm of the gamblers, the current Buffett
indicator
reveals
an
overwhelmingly inflated stock market
. Today's market cap sits at a staggering
185.4% over GDP. Even if total assets of Federal Reserve banks are included, the indicator is
still
137%
over GDP. Based on these metrics,
the
stock market is estimated to return -2.5% per year
(on average) for the
next
eight years
. That number doesn't even include inflation.
And of course an average number like that smooths out the huge losses and the marginal wins. An average number like that is how
the house looks at their earnings at sunrise, when all the gamblers have gone back to their hotels. A lucky few walk with a
little spring in their steps, a little extra cash in their pockets. An unlucky few wait outside pawn shops on the Strip, wallets
and bank accounts empty, hoping to sell anything for a few more rolls of the dice. Everyone else, they walk away a little bit
poorer, but still hopeful. Still looking forward to tomorrow's chance at a big win
Fortunately, there are other choices available to you.
Take a long, hard look at your retirement savings. Check your allocations to high-risk, overvalued assets...
"... In the Risk Alert below, the itemization of various forms of abuses, such as the many ways private equity firms parcel out interests in the businesses they buy among various funds and insiders to their, as opposed to investors' benefit, alone should give pause. And the lengthy discussion of these conflicts does suggest the SEC has learned something over the years. Experts who dealt with the agency in its early years of examining private equity firms found the examiners allergic to considering, much the less pursuing, complex abuses. ..."
"... Undermining legislative intent of new supervisory authority the SEC never embraced its new responsibilities to ride herd on private equity and hedge funds. ..."
"... The agency is operating in such a cozy manner with private equity firms that as one investor described it: It's like FBI sitting down with the Mafia to tell them each year, "Don't cross these lines because that's what we are focusing on." ..."
"... Advisers charged private fund clients for expenses that were not permitted by the relevant fund operating agreements, such as adviser-related expenses like salaries of adviser personnel, compliance, regulatory filings, and office expenses, thereby causing investors to overpay expenses ..."
"... Current SEC chairman Jay Clayton came from Sullivan & Cromwell, bringing with him Steven Peikin as co-head of enforcement. And the Clayton SEC looks to have accomplished the impressive task of being even weaker on enforcement than Mary Jo White. ..."
"... On the same side though, fraud is a criminal offence, and it's SEC's duty to prosecute. And I believe that a lot of what PE engage in would happily fall under fraud, if SEC really wanted. ..."
"... Crimogenic: Producing or tending to produce crime or criminality. An additional factor is that, in the main, the criminals do not take their money and leave the gaming tables but pour it back in and the crime metastasizes. AKA, Kleptocracy. ..."
"... You might add that the threat of consequences for these crimes makes the criminals extremely motivated to elect officials who will not prosecute them (e.g. Obama). They're not running for office, they're avoiding incarceration. ..."
"... Andrew Levitt, for instance, complained bitterly that Joe Lieberman would regularly threaten to cut the SEC's budget for allegedly being too aggressive about enforcement. Lieberman was the Senator from Hedgistan. ..."
"... More banana republic level grift. What happens when investors figure out they can't believe anything they are told? ..."
"... Can we come up with a better descriptor for "private equity"? I suggest "billionaire looters". ..."
"... Where is the SEC when Bain Capital (Romney) wipes out Toys-R-Us and Dianne Feinstein's husband Richard Blum wipes out Payless Shoes. They gain control of the companies, pile on massive debt and take the proceeds of the loan, and they know the company cannot service the loan and a BK is around the corner. ..."
"... Thousands lose their jobs. And this is legal? And we also lost Glass-Steagal and legalized stock buy-backs. The Elite are screwing the people. It's Socialism for the Rich, the Politicians and Govt Employees and Feudalism for the rest of us. ..."
We've embedded an SEC Risk Alert on private equity abuses at the end of this post. 1 What is remarkable about this
document is that it contains a far longer and more detailed list of private abuses than the SEC flagged in its initial round of examinations
of private equity firms in 2014 and 2015. Those examinations occurred in parallel with groundbreaking exposes by Gretchen Morgenson
at the New York Times and Mark Maremont in the Wall Street Journal.
At least some of the SEC enforcement actions in that era look
to have been triggered by the press effectively getting ahead of the SEC. And the SEC even admitted the misconduct was more common
at the most prominent firms.
Yet despite front-page articles on private equity abuses, the SEC engaged in wet noodle lashings. Its pattern was to file only
one major enforcement action over a particular abuse. Even then, the SEC went to some lengths to spread the filings out among the
biggest firms. That meant it was pointedly engaging in selective enforcement, punishing only "poster child" examples and letting
other firms who'd engaged in precisely the same abuses get off scot free.
The very fact of this Risk Alert is an admission of failure by the SEC. It indicates that the misconduct it highlighted five years
ago continues and if anything is even more pervasive than in the 2014-2015 era. It also confirms that its oft-stated premise then,
that the abuses it found then had somehow been made by firms with integrity that would of course clean up their acts, and that now-better-informed
investors would also be more vigilant and would crack down on misconduct, was laughably false.
In particular, the second section of the Risk Alert, on Fees and Expenses (starting on page 4) describes how fund managers are
charging inflated or unwarranted fees and expenses. In any other line of work, this would be called theft. Yet all the SEC is willing
to do is publish a Risk Alert, rather than impose fines as well as require disgorgements?
The SEC's Abject Failure
In the Risk Alert below, the itemization of various forms of abuses, such as the many ways private equity firms parcel out interests
in the businesses they buy among various funds and insiders to their, as opposed to investors' benefit, alone should give pause.
And the lengthy discussion of these conflicts does suggest the SEC has learned something over the years. Experts who dealt with the
agency in its early years of examining private equity firms found the examiners allergic to considering, much the less pursuing,
complex abuses.
Undermining legislative intent of new supervisory authority the SEC never embraced its new responsibilities to ride herd on
private equity and hedge funds.
The SEC has long maintained a division between the retail investors and so-called "accredited investors" who by virtue of having
higher net worths and investment portfolios, are treated by the agency as able to afford to lose more money. The justification is
that richer means more sophisticated. But as anyone who is a manager for a top sports professional or entertainer, that is often
not the case. And as we've seen, that goes double for public pension funds.
Starting with the era of Clinton appointee Arthur Levitt, the agency has taken the view that it is in the business of defending
presumed-to-be-hapless retail investors and has left "accredited investor" and most of all, institutional investors, on their own.
This was a policy decision by the agency when deregulation was venerated; there was no statutory basis for this change in priorities.
Congress tasked the SEC with supervising the fund management activities of private equity funds with over $150 million in assets
under management. All of their investors are accredited investors. In other words, Congress mandated the SEC to make sure these firms
complied with relevant laws as well as making adequate disclosures of what they were going to do with the money entrusted to them.
Saying one thing in the investor contracts and doing another is a vastly worse breach than misrepresentations in marketing materials,
yet the SEC acted as if slap-on-the-wrist-level enforcement was adequate.
We made fun when thirteen prominent public pension fund trustees wrote the SEC asking for them to force greater transparency of
private equity fees and costs. The agency's position effectively was "You are grownups. No one is holding a gun to your head to make
these investments. If you don't like the terms, walk away." They might have done better if they could have positioned their demand
as consistent with the new Dodd Frank oversight requirements.
Actively covering up for bad conduct . In 2014, the SEC started working at giving malfeasance a free pass. Specifically, the SEC
told private equity firms that they could continue their abuses if they 'fessed up in their annual disclosure filings, the so-called
Form ADV. The term of art is "enhanced disclosure". Since when are contracts like confession, that if you admit to a breach, all
is forgiven? Only in the topsy-turvy world of SEC enforcement.
The agency is operating in such a cozy manner with private equity firms that as one investor described it: It's like FBI sitting down with the Mafia to tell them each year, "Don't cross these lines because that's what we are focusing
on."
Specifically, as we indicated, the SEC was giving advanced warning of the issues it would focus on in its upcoming exams, in order
to give investment managers the time to get their stories together and purge files. And rather than view its periodic exams as being
designed to make sure private equity firms comply with the law and their representations, the agency views them as "cooperative"
exercises! Misconduct is assumed to be the result of misunderstanding and error, and not design.
It's pretty hard to see conduct like this, from the SEC's Risk Alert, as being an accident:
Advisers charged private fund clients for expenses that were not permitted by the relevant fund operating agreements, such
as adviser-related expenses like salaries of adviser personnel, compliance, regulatory filings, and office expenses, thereby causing
investors to overpay expenses
The staff observed private fund advisers that did not value client assets in accordance with their valuation processes or in
accordance with disclosures to clients (such as that the assets would be valued in accordance with GAAP). In some cases, the staff
observed that this failure to value a private fund's holdings in accordance with the disclosed valuation process led to overcharging
management fees and carried interest because such fees were based on inappropriately overvalued holdings .
Advisers failed to apply or calculate management fee offsets in accordance with disclosures and therefore caused investors
to overpay management fees.
We're highlighting this skimming simply because it is easier for laypeople to understand than some of the other types of cheating
the SEC described. Even so, industry insiders and investors complained that the description of the misconduct in this Risk Alert
was too general to give them enough of a roadmap to look for it at particular funds.
Ignoring how investors continue to be fleeced . The SEC's list includes every abuse it sanctioned or mentioned in the 2014 to
2015 period, including undisclosed termination of monitoring fees, failure to disclose that investors were paying for "senior advisers/operating
partners," fraudulent charges, overcharging for services provided by affiliated companies, plus lots of types of bad-faith conduct
on fund restructurings and allocations of fees and expenses on transactions allocated across funds.
The SEC assumed institutional investors would insist on better conduct once they were informed that they'd been had. In reality,
not only did private equity investors fail to demand better, they accepted new fund agreements that described the sort of objectionable
behavior they'd been engaging in. Remember, the big requirement in SEC land is disclosure. So if a fund manager says he might do
Bad Things and then proceeds accordingly, the investor can't complain about not having been warned.
Moreover, the SEC's very long list of bad acts says the industry is continuing to misbehave even after it has defined deviancy
down via more permissive limited partnership agreements!
Why This Risk Alert Now?
Keep in mind what a Risk Alert is and isn't. The best way to conceptualize it is as a press release from the SEC's Office of Compliance
Inspections and Examinations. It does not have any legal or regulatory force. Risk Alerts are not even considered to be SEC official
views. They are strictly the product of OCIE staff.
On the first page of this Risk Alert, the OCIE blandly states that:
This Risk Alert is intended to assist private fund advisers in reviewing and enhancing their compliance programs, and also
to provide investors with information concerning private fund adviser deficiencies.
Cutely, footnotes point out that not everyone examined got a deficiency letter (!!!), that the SEC has taken enforcement actions
on "many" of the abuses described in the Risk Alert, yet "OCIE continues to observe some of these practices during examinations."
Several of our contacts who met in person with the SEC to discuss private equity grifting back in 2014-2015 pressed the agency
to issue a Risk Alert as a way of underscoring the seriousness of the issues it was unearthing. The staffers demurred then.
In fairness, the SEC may have regarded a Risk Alert as having the potential to undermine its not-completed enforcement actions.
But why not publish one afterwards, particularly since the intent then had clearly been to single out prominent examples of particular
types of misconduct, rather than tackle it systematically? 2
So why is the OCIE stepping out a bit now? The most likely reason is as an effort to compensate for the lack of enforcement actions.
Recall that all the OCIE can do is refer a case to the Enforcement Division; it's their call as to whether or not to take it up.
The SEC looks to have institutionalized the practice of borrowing lawyers from prominent firms. Mary Jo White of Debevoise brought
Andrew Ceresney with her from Debeviose to be her head of enforcement. Both returned to Debevoise.
Current SEC chairman Jay Clayton came from Sullivan & Cromwell, bringing with him Steven Peikin as co-head of enforcement. And
the Clayton SEC looks to have accomplished the impressive task of being even weaker on enforcement than Mary Jo White. Clayton made
clear his focus was on "mom and pop" investors, meaning he chose to overlook much more consequential abuses by private equity firms
and hedgies. The New York Times determined that the average amount of SEC fines against corporate perps fell markedly in 2018 compared
to the final 20 months of the Obama Administration. The SEC since then levied $1 billion fine against the Woodbridge Group of Companies
and its one-time owner for running a Ponzi scheme that fleeced over 8,400, so that would bring the average penalty up a bit. But
it still confirms that Clayton is concerned about small fry, and not deeper but just as pickable pockets.
David Sirota argues that the OCIE
was out to embarrass Clayton and sabotage what Sirota depicted as an SEC initiative to let retail investors invest in private equity.
Sirota appears to have missed that that horse has left the barn and is in the next county, and the SEC had squat to do with it.
The overwhelming majority of retail funds is not in discretionary accounts but in retirement accounts, overwhelmingly 401(k)s.
And it is the Department of Labor, which regulates ERISA plans, and not the SEC, that decides what those go and no go zones are.
The DoL has already green-lighted allowing large swathes of 401(k) funds to include private equity holdings.
From a post earlier this month :
Until now, regulations have kept private equity out of the retail market by prohibiting managers from accepting capital from
individuals who lack significant net worth.
Moreover, even though Sirota pointed out that Clayton had spoken out in favor of allowing retail investors more access to private
equity investments, the proposed regulation on the definition of accredited investors in fact not only does not lower income or net
worth requirements (save for allowing spouses to combine their holdings) it in fact solicited comments on the idea of raising the
limits.
From a K&L Gates write up :
Previously, the Concept Release requested comment on whether the SEC should revise the current individual income ($200,000)
and net worth ($1,000,000) thresholds. In the Proposing Release, the SEC further considered these thresholds, noting that the
figures have not been adjusted since 1982. The SEC concluded that it does not believe modifications to the thresholds are necessary
at this time, but it has requested comments on whether the final should instead make a one-time increase to the thresholds in
the account for inflation, or whether the final rule should reflect a figure that is indexed to inflation on a going-forward basis.
It is not clear how many people would be picked up by the proposed change, which was being fleshed out, that of letting some presumed
sophisticated but not rich individuals, like junior hedge fund professionals and holders of securities licenses, be treated as accredited
investors. In other words, despite Clayton's talk about wanting ordinary investors to have more access to private equity funds, the
agency's proposed rule change falls short of that.
Moreover, if the OCIE staff had wanted to undermine even the limited liberalization of the definition of accredited investor so
as to stymie more private equity investment, the time to do so would have been immediately before or while the comments period was
open. It ended March 16 .
So again, why now? One possibility is that the timing is purely a coincidence. For instance, the SEC staffers might have been
waiting until Covid-19 news overload died down a bit so their work might get a hearing (and Covid-19 remote work complications may
also have delayed its release).
The second possibility is that OCIE is indeed very frustrated with the enforcement chief Peikin's inaction on private equity.
The fact that Peikin's boss and protector Clayton has made himself a lame duck meant a salvo against Peikin was now a much lower
risk. If any readers have better insight into the internal workings of the SEC these days, please pipe up.
______
1 Formally, as you can see, this Risk Alert addresses both private equity and hedge fund misconduct, but on reading
the details, the citing of both types of funds reflects the degree to which hedge funds have been engaging in the buying and selling
of stakes in private companies. For instance, Chatham Asset Management, which has become notorious through its ownership of American
Media, which in turn owns the National Enquirer, calls itself a hedge fund. Moreover, when the SEC started examining both private
equity and hedge funds under new authority granted by Dodd Frank, it described the sort of misconduct described in this Risk Alert
as coming out of exams of private equity firms, and its limited round of enforcement actions then were against brand name private
equity firms like KKR, Blackstone, Apollo, and TPG. Thus for convenience as well as historical reasons, we refer only to private
equity firms as perps.
2 Media stories at the time, including some of our posts, provided substantial evidence that particular abuses, such
as undisclosed termination of monitoring fees and failure to disclose that "senior advisers" presented as general partner "team members"
were in fact consultants being separately billed to fund investments, were common practices. Yet the SEC chose to lodge only marquee
enforcement actions against one prominent firm for each abuse, as if token enforcement would serve as an adequate deterrent. The
message was the reverse, that the overwhelming majority of the abuses were able to keep their ill-gotten gains and not even face
public embarrassment.
TBH, in the view of Calpers ignoring its advisors, I do have a little understanding of the SEC's point "you're grown ups" (the
worse problem is that the advisors who leach themselves to the various accredited investors are often not worth the money.
On the same side though, fraud is a criminal offence, and it's SEC's duty to prosecute. And I believe that a lot of what PE
engage in would happily fall under fraud, if SEC really wanted.
Yes, the SEC conveniently claims a conflicted authority – 1. to regulate compliance but without an "enforcement authority",
and 2. report egregious behavior to their "enforcement authority". So the SEC is less than a permissive nanny. Sort of like "access"
to enforcement authority. Sounds like health care to me.
No, this is false. The SEC has an examination division and an enforcement division. The SEC can and does take enforcement actions
that result in fines and disgorgements, see the $1 billion fine mentioned in the post. So the exam division can recommend enforcement
to the enforcement division. That does not mean it will get done. Some enforcement actions originate from within the enforcement
division, like insider trading cases, and the SEC long has had a tendency to prioritize insider trading cases.
The SEC cannot prosecute. It has to refer cases that it thinks are criminal to the DoJ and try to get them to saddle up.
Crimogenic: Producing or tending to produce crime or criminality. An additional factor is that, in the main, the criminals
do not take their money and leave the gaming tables but pour it back in and the crime metastasizes.
AKA, Kleptocracy.
Thus in 2008 and thereafter the criminal damage required 2-3 trillion, now 7-10 trillion.
Any economic expert who does not recognize crime as the number one problem in the criminogenic US economy I disregard. Why
read all that analysis when, at the end of the run, it all just boils down to bailing out the criminals and trying to reset the
criminogenic system?
You might add that the threat of consequences for these crimes makes the criminals extremely motivated to elect officials who
will not prosecute them (e.g. Obama). They're not running for office, they're avoiding incarceration.
The SEC has been captured for years now. It was not that long ago that SEC Examination chief Andrew Bowden made a grovelling
speech to these players and even asked them to give his son a job which was so wrong-
But there is no point in reforming the SEC as it was the politicians, at the beck and call of these players, that de-fanged
the SEC – and it was a bipartisan effort! So it becomes a chicken-or-the-egg problem in the matter of reform. Who do you reform
first?
Can't leave this comment without mentioning something about a private equity company. One of the two major internal airlines
in Oz went broke due to the virus and a private equity buyer has been found to buy it. A union rep said that they will be good
for jobs and that they are a good company. Their name? Bain Capital!
We broke the story about Andrew Bowden! Give credit where credit is due!!!! Even though Taibbi points to us in his first line,
linking to Rolling Stone says to those who don't bother clicking through that it was their story.
Of course I remember that story. I was going to mention it but thought to let people see it in virtually the opening line of
that story where he gives you credit. More of a jolt of recognition seeing it rather than being told about it first.
Of the three branches of government which ones are not captured by big business? If two out of three were to captured then
does it matter what the third does?
Is the executive working for the common good or for the interests of big business?
Is the legislature working for the common good or for the interests of big business?
Is the judiciary working for the common good or for the interests of big business?
In my opinion too much power has been centralised, too much of the productivity gains of the past 40 years have been monetised
and therefore made possible to hoard and centralise. SEC should (in my opinion) try to enforce more but without more support then I do not believe (it is my opinion, nothing more
and nothing less) that they can accomplish much.
The SEC is a mysterious agency which (?) must fall under the jurisdiction of the Treasury because it is a monetary regulatory
agency in the business of regulating securities and exchanges. But it has no authority to do much of anything. The Treasury itself
falls under the executive administration but as we have recently seen, Mnuchin himself managed to get a nice skim for his banking
pals from the money Congress legislated.
That's because Congress doesn't know how to effectuate a damn thing – they legislate
stuff that morphs before our very eyes and goes to the grifters without a hitch. So why don't we demand that consumer protection
be made into hard law with no wiggle room; that since investing is complex in this world of embedded funds and glossy prospectuses,
we the consumer should not have to wade through all the nonsense to make decisions – that everything be on the table. And if PE
can't manage to do that and still steal its billions then PE should be declared to be flat-out illegal.
Please stop spreading disinformation. This is the second time on this post. The SEC has nada to do with the Treasury. It is an independent regulatory agency. It however is the only financial regulator that does not keep what it kills (its own fees and fines) but is instead subject
to Congressional appropriations.
Andrew Levitt, for instance, complained bitterly that Joe Lieberman would regularly threaten
to cut the SEC's budget for allegedly being too aggressive about enforcement. Lieberman was the Senator from Hedgistan.
It should be noted that out here in the countryside of northern Michigan that embezzlement (a winter sport here while the men
are out ice fishing), theft and fraud are still considered punishable felonies. Perhaps that is simply a quaint holdover from
a bygone time. Dudley set the tone for the C of C with his Green Book on bank deregulation. One of the subsequent heads of C of
C was reported as seeing his position as "being the spiritual resource for banks". If bank regulation is treated in a farcical
fashion why should be the SEC be any different?
I was shocked to just now learn that ERISA/the Dept of Labor is in regulatory control of allowing pension funds to buy PE fund
of funds and "balanced PE funds". What VERBIAGE. Are "PE Fund of Balanced Funds" an actual category? And what distinguishes them
from good old straightforward Index Funds? And also too – what is happening before our very glazed-over eyes is that PE is high
grading not just the stock market but the US Treasury itself. Ordinary investors should be buying US Treasuries directly and retirement
funds should too. It will be a big bite but if it knocks PE out of business it would be worth it. PE is in the business of cooking
its books, ravaging struggling corporations, and boldly privatizing the goddamned Treasury. WTF?
What about the wanton destruction of the purchased companies? If this solely about the harm done to the poor investors?
If so, that is seriously wrong.
If, you know, the neoliberal "because markets" is the ruling paradigm then of course there is no harm done. The questions then
become: is "because markets" a sensible paradigm? What is it a sensible paradigm of? Is "because markets" even sensible for the
long term?
an aside: farewell, Olympus camera. A sad day. Farewell, OM-1 and OM-2. Film photography is really not replicated by digital
photography but the larger market has gone to digital. Speed and cost vs quality. Because markets. Now the vulture swoop.
Where is the SEC when Bain Capital (Romney) wipes out Toys-R-Us and Dianne Feinstein's husband Richard Blum wipes out Payless
Shoes. They gain control of the companies, pile on massive debt and take the proceeds of the loan, and they know the company cannot
service the loan and a BK is around the corner.
Thousands lose their jobs. And this is legal? And we also lost Glass-Steagal and
legalized stock buy-backs. The Elite are screwing the people. It's Socialism for the Rich, the Politicians and Govt Employees and
Feudalism for the rest of us.
"... Kane, who coined the term "zombie bank" and who famously raised early alarms about American savings and loans, analyzed European banks and how regulators, including the U.S. Federal Reserve, backstop them. ..."
"... We are only interested observers of the arm wrestling between the various EU countries over the costs of bank rescues, state expenditures, and such. But we do think there is a clear lesson from the long history of how governments have dealt with bank failures . [If] the European Union needs to step in to save banks, there is no reason why they have to do it for free best practice in banking rescues is to save banks, but not bankers. That is, prevent the system from melting down with all the many years of broad economic losses that would bring, but force out those responsible and make sure the public gets paid back for rescuing the financial system. ..."
"... In 2019, another question, alas, is also piercing. In country after country, Social Democratic center-left parties have shrunk, in many instances almost to nothingness. In Germany the SPD gives every sign of following the French Socialist Party into oblivion. Would a government coalition in which the SPD holds the Finance Ministry even consider anything but guaranteeing the public a huge piece of any upside if they rescue two failing institutions? ..."
Running in the background, though, was a new, darker theme: That the post-2008 reforms had gone too far in restricting policymakers'
discretion in crises. The trio most responsible for making the post-Lehman bailout revolution -- Ben Bernanke, Timothy Geithner,
and Henry Paulson --
expressed their
misgivings in a joint op-ed :
But in its post-crisis reforms, Congress also took away some of the most powerful tools used by the FDIC, the Fed and the Treasury
the FDIC can no longer issue blanket guarantees of bank debt as it did in the crisis, the Fed's emergency lending powers have
been constrained, and the Treasury would not be able to repeat its guarantee of the money market funds.
These powers were critical in stopping the 2008 panic The paradox of any financial crisis is that the policies necessary to
stop it are always politically unpopular. But if that unpopularity delays or prevents a strong response, the costs to the economy
become greater.
We need to make sure that future generations of financial firefighters have the emergency powers they need to prevent the next
fire from becoming a conflagration.
Sotto voce fears of this sort go back to the earliest reform discussions. But the question surfaced dramatically in Timothy Geithner's
2016 Per Jacobsson Lecture, " Are We Safer? The Case for Strengthening
the Bagehot Arsenal ." More recently, the Group of Thirty
has advanced similar suggestions -- not too surprisingly, since Geithner was co-project manager of the report, along with Guillermo
Ortiz, the former Governor of the Mexican Central Bank, who introduced the former Treasury Secretary at the Per Jacobson lecture.
Aside from the financial collapse itself, probably nothing has so shaken public confidence in democratic institutions as the wave
of bailouts in the aftermath of the collapse. The redistribution of wealth and opportunity that the bailouts wrought surely helped
fuel the populist surges that have swept over Europe and the United States in the last decade. The spectacle of policymakers rubber
stamping literally unlimited sums for financial institutions while preaching the importance of austerity for everyone else has been
unbearable to millions of people.
Especially in money-driven political systems, affording policymakers unlimited discretion also plainly courts serious risks. Put
simply, too big to fail banks enjoy a uniquely splendid situation of "heads I win, tails you lose" when they take risks. Scholars
whose research INET has supported, notably
Edward Kane , have shown how the certainty of government bailouts advantages large financial institutions, directly affecting
prices of their bonds and stocks.
For these reasons INET convened a panel at a G20 preparatory meeting in Berlin on "
Moral Hazard Issues in Extended Financial Safety Nets ."
The Power Point presentations of the three panelists are presented in the order in which they gave them, since the latter ones sometimes
comment on Edward Kane
's analysis of the European banks. Kane, who coined the term "zombie bank" and who famously raised early alarms about American
savings and loans, analyzed European banks and how regulators, including the U.S. Federal Reserve, backstop them.
Peter Bofinger
, Professor of International and Monetary Economics at the University of Würzburg and an outgoing member of the German Economic Council,
followed with a discussion of how the system has changed since 2008.
Helene Schuberth
, Head of the Foreign Research Division of the Austrian National Bank, analyzed changes in the global financial governance system
since the collapse.
The panel took place as public discussion of a proposed merger between two giant German banks, the Deutsche Bank and Commerzbank,
reached fever pitch. The panelists explored issues directly relevant to such fusions, without necessarily agreeing among themselves
or with anyone at INET.
But the point Robert Johnson, INET's President, and I
made some years back , amid an earlier wave of talk about using public money to bail out European banks, remains on target:
We are only interested observers of the arm wrestling between the various EU countries over the costs of bank rescues,
state expenditures, and such. But we do think there is a clear lesson from the long history of how governments have dealt with
bank failures . [If] the European Union needs to step in to save banks, there is no reason why they have to do it for free best
practice in banking rescues is to save banks, but not bankers. That is, prevent the system from melting down with all the many
years of broad economic losses that would bring, but force out those responsible and make sure the public gets paid back for rescuing
the financial system.
The simplest way to do that is to have the state take equity in the banks it rescues and write down the equity of bank shareholders
in proportion. This can be done in several ways -- direct equity as a condition for bailout, requiring warrants that can be exercised
later, etc. The key points are for the state to take over the banks, get the bad loans rapidly out of those and into a "bad bank,"
and hold the junk for a decent interval so the rest of the market does not crater. When the banks come back to profitability,
you can cash in the warrants and sell the stock if you don't like state ownership. That way the public gets its money back .at
times states have even made a profit.
In 2019, another question, alas, is also piercing. In country after country, Social Democratic center-left parties have shrunk,
in many instances almost to nothingness. In Germany the SPD gives every sign of following the French Socialist Party into oblivion.
Would a government coalition in which the SPD holds the Finance Ministry even consider anything but guaranteeing the public a huge
piece of any upside if they rescue two failing institutions?
There needs to be an asset tax on/break up of the megas. End the hyper-agglomeration of deposits at the tail end. Not holding
my breath though. (see NY state congressional delegation)
To be generous, tax starts at $300 billion. Even then it affects only a dozen or so US banks. But would be enough to clamp
down on the hyper-scale of the largest US/world banks. The world would be better off with lot more mid-sized regional players.
Anyone who mentions Timmy Geithner without spitting did not pay attention during the Obama reign of terror. He and Obama crowed
about the Making Home Affordable Act, implying that it would save all homeowners in mortgage trouble, but conveniently neglected
to mention that less than 100 banks had signed up. The thousands of non-signatories simply continued to foreclose.
Not to mention Eric Holder's intentional non-prosecution of banksters. For these and many other reasons, especially his "Islamic
State is only the JV team" crack, Obama was one of our worst presidents.
Fergusons graph on DBK's default probabilities coincides with the ECB's ending its asset purchase programme and entering the
"reinvestment phase of the asset purchase programme". https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html
The worst of the euro zombie banks appear to be getting tense and nervous. https://www.youtube.com/watch?v=dKpzCCuHDVY
Maybe that is why Jerome Powell did his volte-face last month on gradually raising interest rates. Note that the Fed also reduced
its automatic asset roll-off. I'm curious if the other euro-zombies in the "peers" return on equity chart are are experiencing
volatility also.
Apparently the worst fate you can suffer as long as you don't go Madoff is Fuld. According to Wikipedia his company manages
a hundred million which must be humiliating. It's not as humiliating as locking the guy up in prison would be by a very long stretch.
Greenspan famously lamented that there isn't anything the regulators can really do except make empty threats. This is dishonest.
The regulations are not carved in stone like the ten commandments. In China they execute incorrigible financiers all the time.
Greenspan was never willing to counter any problem that might irritate powerful financial constituencies. For example, during
the internet stock bubble of the late 1990's, Greenspan decried the "irrational exuberance" of the stock market. The Greenspan
Fed could have raised the margin requirement for stocks to buttress this view, but did not. As I remembered reading, Greenspan
was in poor financial shape when he got his Fed job.
His subsequent performance at the Fed apparently left him a wealthy man. Real regulation by Greenspan may have adversely affected
his wealth. It may explain why Alan Greenspan would much rather let a financial bubble grow until it pops and then "fix it".
Everybody forgets (or at least does not mention) that Greenspan was a member of the Class of '43, the (mostly Canadian) earliest
members of the Objectivist Cult with guru Ayn Rand. Expecting him to act rationally is foolish. It may happen accidentally (we
do not know why he chose to let the economy expand unhindered in 1999), but you cannot count on it. In a world with information
asymmetry expecting markets to be concerned about reputation is ridiculous. To expect them to police themselves for long term
benefit is even more ridiculous.
I think Finance is currently about 13% of the S&P 500, down from the peak of about 18% or so in 2007. I think we will have
a healthy economy and improved political climate when Finance is about 8-10% of the S&P 500 which is about where I think finance
plays a healthy, but not overwhelming rentier role in the economy.
"... She soldiered through her painful stomach ailments and secretly tape-recorded 46 hours of conversations between New York Fed officials and Goldman Sachs. After being fired for refusing to soften her examination opinion on Goldman Sachs, Segarra released the tapes to ProPublica and the radio program This American Life and the story went viral from there... ..."
"... In a nutshell, the whoring works like this. There are huge financial incentives to go along, get along, and keep your mouth shut about fraud. The financial incentives encompass both the salary, pension and benefits at the New York Fed as well as the high-paying job waiting for you at a Wall Street bank or Wall Street law firm if you show you are a team player . ..."
"But the impotence one feels today -- an impotence we should never consider permanent -- does not excuse one from remaining true
to oneself, nor does it excuse capitulation to the enemy, what ever mask he may wear. Not the one facing us across the frontier or
the battle lines, which is not so much our enemy as our brothers' enemy, but the one that calls itself our protector and makes us
its slaves. The worst betrayal will always be to subordinate ourselves to this Apparatus, and to trample underfoot, in its
service, all human values in ourselves and in others."
Simone Weil
"And in some ways, it creates this false illusion that there are people out there looking out for the interest of taxpayers, the
checks and balances that are built into the system are operational, when in fact they're not. And what you're going to see and what
we are seeing is it'll be a breakdown of those governmental institutions. And you'll see governments that continue to have policies
that feed the interests of -- and I don't want to get clichéd, but the one percent or the .1 percent -- to the detriment of everyone
else...
If TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the
same winding mountain road, but this time in a faster car... I think it's inevitable. I mean, I don't think how you can look at all
the incentives that were in place going up to 2008 and see that in many ways they've only gotten worse and come to any other conclusion."
Neil Barofsky
"Written by Carmen Segarra, the petite lawyer turned bank examiner turned whistleblower turned one-woman swat team, the 340-page
tome takes the reader along on her gut-wrenching workdays for an entire seven months inside one of the most powerful and corrupted
watchdogs of the powerful and corrupted players on Wall Street – the Federal Reserve Bank of New York.
The days were literally gut-wrenching. Segarra reports that after months of being alternately gas-lighted and bullied at
the New York Fed to whip her into the ranks of the corrupted, she had to go to a gastroenterologist and learned her stomach lining
was gone.
She soldiered through her painful stomach ailments and secretly tape-recorded 46 hours of conversations between New York Fed officials
and Goldman Sachs. After being fired for refusing to soften her examination opinion on Goldman Sachs,
Segarra released the tapes to ProPublica and
the radio program This American Life and the story went viral from there...
In a nutshell, the whoring works like this. There are huge financial incentives to go along, get along, and keep your mouth shut
about fraud. The financial incentives encompass both the salary, pension and benefits at the New York Fed as well as the high-paying
job waiting for you at a Wall Street bank or Wall Street law firm if you show you are a team player .
If the Democratic leadership of the House Financial Services Committee is smart, it will reopen the Senate's aborted inquiry into
the New York Fed's labyrinthine conflicts of interest in supervising Wall Street and make removing that supervisory role a core component
of the Democrat's 2020 platform. Senator Bernie Sanders' platform can certainly be expected to continue the accurate battle cry that
'the business model of Wall Street is fraud.'"
Both major parties work according the the scheme of a pyramidal control. To control a
company A, you need to get majority of voting shares. Which belong to company B that owns,
say, 60%. In turn, 60% or shares of B belongs to C which controls A while having 60% x 60% =
36% of capital. After adding D, E etc., you can get away with the following: you start with
actual majority of shares, and the company prospers. Time to realize gains. But that would
deprive you of control. Thus you organize company B and sell 40% of its shares. Control
preserved. Wash and repeat.
In a similar spirit, a narrow circle can control a major party. Of course, the rules are
different and more hidden. On the bottom level, the equivalent of B controlling A, it was
observed that rational arguments are boring, and the wide masses have hard time following
them and following what (itself controlled) B advocates. So you invent easy to remember
[expletive deleted] like "Obama birth's certificate", "Russian collusion" etc. An energetic
group with group solidarity needs its tribal spirit and shibboleths.
The Democratic Party civil war between the 'progressive anti-war socialist' and 'neocon
Wall Street beltway' wings. It will go on for at least two years
TBT or not TBT 1 hour ago
Oh hogwash. The minute Obama took over from Bush Cindy Sheehan and the rest disappeared
from the news. There was no real push back within the Dem electorate against the foreign wars
because they all support the Democrat War on America above all. They only pretend to give a
rip about some backward misogynist theocratic craphole people when Republicans are in
office.
King of Kalifornia 1 hour ago
It's been going on for years. The socialists keep falling for it, and the neoliberals (in
the mold of their heroes, Reagan and Thatcher) have forced their compliance.
Michael Mackenzie and James Fontanella-Khan in New York Fri, March 5, 2021, 7:00 PM
The veteran value investor John Rogers predicted the US is headed for a repeat of the
"roaring twenties" a century ago that will finally encourage investors to dump tech stocks in
favour of companies more sensitive to the economy. The founder of Ariel Investments told the
Financial Times in an interview that value investing "dinosaurs" like him stood to win as
higher economic growth and rising interest rates took the air out of some of the hottest stocks
of recent years. The US central bank is "overly optimistic that they can keep inflation under
control", he said, and higher bond market interest rates would reduce the value of future
earnings for highly popular growth stocks such as tech companies and for the kinds of
speculative companies coming to market in initial public offerings or via deals with Spacs.
I ordered this book when Paul Craig Roberts mentioned, and quoted from it, on February 14,
2021. I especially liked PCRs quote halfway through the essay:
The United States isn't a nation any longer . It is a collection of peoples
without a country. A nation requires a unifying spirit of the people, and the United States
has no such unifying spirit. Martyanov observes that there is nothing in common between
a white WASP farm worker from Iowa, a Jewish lawyer from Manhattan, and a black rapper from
the Bronx. They view the world, America and their place in it differently, and those
visions are irreconcilable.
This has been obvious to some of us for decades. Worse yet, there is no mechanism or
movement anyone can imagine that will keep the disintegration process in check. If anything,
the elites are finding new and exciting ways to divide Americans further, and nobody is
happier about it than the social media addicts who enjoy bigger and better rotten egg memes
they can toss at the enemy de jour.
This is interesting too:
Not only is America's crisis systemic, but its elites are uncultured , badly educated
and mesmerized by decades of their own propaganda, which in the end, they accept as a
reality
I do hope the author means "uncultured" in the pejorative, insulting, Russian sense of the
word. They are the "elites" who are revolting, and they are too dumb to know they are kicking
the floorboards out from under their feet.
"People of the United States, your ruling elites are lying to you just like the chamber
orchestra on the Titanic that was playing music while the supposedly "unsinkable" Titanic
was sinking!".
The difference is, the actual American ship was just fine and hadn't hit an iceberg.
Rather, we were being deliberately sunk by a bunch of loons who were punching holes in the
hull of the ship!
But don't go thinking the whole shebang is about to go under. This has been the dream of
preppers on the right, and various anti-American groups on the other side, for generations.
The Big Collapse, in which the whole North American continent, with all its power and wealth,
just vanishes, is a pipe dream.
The most immediate causes of US collapse are, in my opinion, the rise of the predator,
parasite, class to a position of total dominance while the proles have sunk into the shite,
and the rise of China...
Here is a graph to look at. It depicts the share of the US national wealth owned by 0.1% of
families, that is 160 thousand families with more than $20 million per head. They had it
wonderfully good in the years leading to the Great Depression; or rather, their wonderful life
brought on the Great Depression. As their share dropped, ordinary Americans got a chance to
fulfill the American dream. Life was good for ordinary guys until the late Seventies; then
Thatcher and Reagan succeeded in turning the tide, and since then the fat cats' share has
increased and your share has dropped, until we have arrived at the present miserable state.
This graph is taken from this work by two young Berkeley
economists, Emmanuel Saez and
Gabriel Zucman , who updated it
here last year. True Left (I aspire to this lot) aren't politically correct diversity
lovers, but people who think that the wealthy should be reined in. The very rich hog resources;
they distort democracy by their lobbying and their NGOs; and now they want to save mankind,
while mankind should be saved from them. Naturally the rich guys do not relish the idea of
being taxed, let alone expropriated Lenin style; that's why they invented the faux-Left of
radical feminists and race equality activists. A good Christian would approve of bridling the
rich: it would be better for their souls. What is a man profited, if he gain the whole world,
and lose his own soul, asked Christ. But this graph proves that keeping their share down isn't
only good for their souls, but is good for our wellbeing, too. The crazy idea of trickle-down
wealth may be safely discarded as not working.
As journalist Emily Atkin explained Tuesday, the jet stream
"bringing frigid and dangerous Artic weather to millions of Americans" is, like other forms of
extreme weather, related to global warming. That's because, as Kevin Trenberth, a climate
scientist at the National Center for Atmospheric Research, told Atkin several years ago, "all
weather events are affected by climate change because the environment in which they occur is
warmer and moister than it used to be."
What's made Winter
Storm Uri especially fatal in Texas is not only the arrival of an unprecedented cold spell,
but the way the weather event is occurring in the context of preexisting social injustices like
homelessness as well as how it is interacting with the state's underdeveloped infrastructure,
inadequate planning and regulation, and lack of emergency preparedness.
Writing for Discourse Blog Tuesday, Samantha Grasso argued that
"occasionally, something will happen in Texas to remind the people who live here that we live
in a failed state."
Grasso explained how freezing temperatures cascaded into power outages causing millions to
go without heat and water in the midst of a winter storm and pandemic:
"While people began losing power Thursday, statewide outages spiked early Monday morning,
after the Electric Reliability Council of Texas (ERCOT), the entity that controls the power
grid for almost the entire state, announced a 'rolling blackout,' estimating outages around
40 minutes long in order to keep the grid from being overwhelmed. (The ERCOT, for what it's
worth, was borne out of Texas' brainless reflex to
buck federal regulation .) But by that time, it was likely too late, for a variety of
reasons . Forty minutes turned into hours, and then days, with
no real sign of when things will get better. After the power went out, so did the water,
with several cities issuing
boil water notices , or asking residents
not to drip their faucets despite their pipes freezing, or even shutting
off the water."
As Grasso noted, "It would be an understatement to say that
ERCOT was unprepared for a cold weather crisis of this scale."
The rest of the lower 48 states use two electric grids: the Eastern Interconnect and the
Western Interconnect. By contrast, in Texas, 90 percent of the state's residents rely on ERCOT.
As Kate Galbraith
reported Monday in the Texas Tribune , the Lone Star state sought independence from
the national grids to avoid federal regulations.
While Republican lawmakers and right-wing media figures have used the crisis in Texas as an
opportunity to attack renewable energy for its
alleged unreliability, The Daily Posterreported Tuesday that
ERCOT
attributed the blackouts to "a shortage of natural gas due to a drop in pressure and frozen
instruments at fossil fuel and nuclear facilities."
"The fact that Texas
deregulated its power grid in the 1990s could also be part of the problem," The Daily
Poster added. "Electricity market incentives are currently structured in such a way that
Texas' power companies receive
more money if they don't weatherize all their plants and shut down some of them during cold
weather."
Notably, the parts of Texas that are connected to the two national grids have not been
devastated by power outages. In El Paso, for instance, "about 3,000 customers had power outages
lasting five minutes or less when the winter storm moved in on Sunday," a local ABC
affiliate
reported . "As of Monday afternoon, only 12 customers were impacted."
Occurring as they did in the midst of a pandemic, the widespread power outages in Texas
threatened to squander thousands of doses of the Moderna vaccine, which must be kept between
-13°F and 5°F. As the Houston Chronicle
reported Monday night, public health officials in Harris County "hustled to distribute
thousands of doses" after the storage facility lost power and "its backup generator
failed."
NBC News
reported Tuesday that "of the 8,430 vaccines, county health officials distributed 5,410
doses to five locations, including 3,000 to the Harris County Jail, 1,000 to Houston Methodist
Hospital, 810 to Rice University, and 600 to Lyndon B. Johnson Hospital and Ben Taub
Hospital."
"The remaining doses were salvaged," the news outlet added, "after Moderna advised county
officials that the rest could be refrigerated and used for patients later that same day."
Meanwhile, mutual aid and political action groups were scrambling to provide resources and
shelter to people "who were facing below-freezing temperatures without robust city assistance,"
Grasso wrote. "Though cities opened warming centers and shelters, facilities quickly reached
capacity and weren't safe to travel to in the harsh weather conditions."
Reflecting on Covid-19, Grasso said that "Texas, just like the rest of the country, killed
so many people because our leaders thought it more important to prioritize short-term gains
than invest in people for a long-term gain."
"And through this mismanaged crisis," she added, "it will kill others, too."
By Tuesday night, at least 23 people had died nationwide, the majority in Texas, as a result
of Winter Storm Uri, according to the
The New York Times .
It is impossible to define neoliberalism purely theoretically, for several reasons. First,
methodologically, although neoliberal experiences share important commonalities (explained in
what follows), neoliberalism is not a mode of production. Consequently, these experiences do
not necessarily include a clearly defined set of invariant features, as may be expected in
studies of 'feudalism" or 'capitalism", for example. Neoliberalism straddles a wide range of
social, political and economic phenomena at different levels of complexity. Some of these are
highly abstract, for example the growing power of finance or the debasement of democracy, while
others are relatively concrete, such as privatisation or the relationship between foreign
states and local non-governmental organisations (NGOs). Nevertheless, it is not difficult to
recognise the beast when it trespasses into new territories, tramples upon the poor, undermines
rights and entitlements, and defeats resistance, through a combination of domestic political,
economic, legal, ideological and media pressures, backed up by international blackmail and
military force if necessary.
Second, as is argued in Chapters 7 and 9., neoliberalism is inseparable from imperialism and
globalisation. In the conventional (or mainstream) discourse, imperialism is either absent or,
more recently, proudly presented as the 'American Burden': to civilise the world and bring to
all the benediction of the Holy Trinity, the green-faced Lord Dollar and its deputies and
occasional rivals, Holy Euro and Saint Yen. New' converts win a refurbished international
airport, one brand-new branch of McDonald's, two luxury hotels, 3,000 NGOs and one US military
base. This offer cannot be refused - or else.- In turn, globalisation is generally presented as
an inescapable, inexorable and benevolent process leading to greater competition, welfare
improvements and the spread of democracy around the world. In reality, however, the so-called
process of globalisation - to the extent that it actually exists (see Saad-Filho 2003) - is
merely the international face of neoliberalism: a worldwide strategy of accumulation and social
discipline that doubles up as an imperialist project, spearheaded by the alliance between the
US ruling class and locally dominant capitalist coalitions. This ambitious power project
centred on neoliberalism at home and imperial globalism abroad is implemented by diverse social
and economic political alliances in each country, but the interests of local finance and the US
ruling class, itself dominated by finance, are normally hegemonic.
Third, historical analysis of neoliberalism requires a multi-level approach. The roots of
neoliberalism are long and varied, and its emergence cannot be dated precisely. As Chapters
я to 6 show, neoliberalism amalgamates insights from a range of sources, including Adam
Smith, neoclassical economics, the Austrian critique of Keynesianism and Soviet-style
socialism, monetarism and its new classical and 'supply-side' offspring. Their influence
increased by leaps and bounds with the breakdown of the postwar order: the end of the 'golden
age' of rapid worldwide growth in the late 1960s, the collapse of the Bretton Woods system in
the early 1970s, the erosion of the so-called 'Keynesian compromise' in the rich countries in
the mid 1970s, the meltdown of the Soviet bloc in the 1980s and the implosion of developmental
alternatives in the poor countries, especially after balance of payments crises in the 1980s
and 1990s. Chapters 1 and 2 show that the collapse of the alternatives provided space for the
synthesis between conservative view's and the interests of the US elite and their minions. The
cauldron was provided by the aggressive populist conservatism of Ronald Reagan and Margaret
Thatcher, and the broth was tendered by finance - that had become hegemonic worldwide after the
'coup- led by the chairman of the US Federal Reserve System, Paul Volcker, in 1979.3 By
persuasion and by force, neoliberalism spread everywhere.
It is, however, important to avoid excessively linear accounts of the rise of neoliberalism.
For example, in the United Kingdom, key elements of Thatcher's monetarist economic platform had
been imposed by the previous Labour government; she only expanded them and gave them a
compelling rationale. There was also an irresolvable tension between the puritanical claims
made by milk-snatching Thatcher, Reagan's ventriloquists, and the intellectual harlots peddling
their wares around the US Imperial Court, and the political practice of these neoliberal
administrations. For example, Reagan's 'voodoo economics' (in the words of his deputy, George
Bush pere) would have been unacceptable to the guardians of the scriptures. History shows that
it is easier to impose pristine economic and political models in the dominions, because at home
the strength of conflicting interests and the messy realities of limited power do not allow
history to start anew on demand. This is best illustrated in Chapter 14's discussion of the
asymmetric application of agrarian liberalism. It is relatively easy to parachute well-paid
advisers into distant and unimportant countries, where Lord Dollar can easily bend the natives'
will. This purifying ritual will make them almost civilised. However, should the ignorant
masses and their brutal leaders reject dollar diplomacy and be reluctant to play by the (new)
rules, weapons of mass destruction are available and they can be deployed increasingly
effectively from great distances.
Although every country is different, and historical analysis can reveal remarkably rich
details, the overall picture is clear. Tire most basic feature of neoliberalism is the
systematic use of state power to impose (financial) market imperatives, in a domestic process
that is replicated internationally by 'globalisation'. As Chapters 22. 23 and 30 argue in the
cases of the United States, the United Kingdom and east and south-east Asia respectively,
neoliberalism is a particular organisation of capitalism, which has evolved to protect
capital(ism) and to reduce the power of labour. This is achieved by means of social, economic
and political transformations imposed by internal forces as well as external pressure. The
internal forces include the coalition between financial interests, leading industrialists,
traders and exporters, media barons, big landowners, local political chieftains, the top
echelons of the civil service and the military, and their intellectual and political proxies.
These groups are closely connected with 'global' ideologies emanating from the centre, and they
tend to adapt swiftly to the demands beamed from the metropolis.
Their efforts have led to a significant worldwide shift in power relations away from the
majority. Corporate power has increased, wiiile finance has acquired unrivalled influence, and
the political spectrum has shifted towards the right. Left parties and mass organisations have
imploded, while trade unions have been muzzled or disabled by unemployment. Forms of external
pressure have included the diffusion of Western culture and ideology, foreign support for state
and civil society institutions peddling neoliberal values, the shameless use of foreign aid,
debt relief and balance of payments support to promote the neoliberal programme, and diplomatic
pressure, political unrest and military intervention when necessary. For example, Chapter 24
shows how' the ruling economic and political forces in the European Union have instrumentalised
the process of integration to ensure the hegemony of neoliberalism. This account is
complemented by Chapter 2n's analysis of the segmentation of Eastern Europe into countries that
are being drawn into a Western European-stvle neoliberalism and others that are following
Russia's business oligarchy model. In sum, neoliberalism is everywhere both the outcome and the
arena of social conflicts. It sets the political and economic agenda, limits the possible
outcomes, biases expectations, and imposes urgent tasks on those challenging its assumptions,
methods and consequences.
In the meantime, neoliberal theory has not remained static. In order to deal with the most
powerful criticisms levelled against neoliberalism, that it has increased poverty and social
dislocation around the world, neoliberal theory has attempted to present the ogre in a more
favourable light. I11 spite of the substantial resources invested in this ideologically
inspired make-over, these amendments have remained unconvincing, not least because the heart of
the neoliberal project has remained unchanged. This is discussed in Chapter 15 for poverty and
distribution, while Chapter 21 unpicks the agenda of the 'Third Way', viewed by many as
'neoliberalism with a human face'.
A MULTI-PRONGED POWER PROJECT
Neoliberalism offered a finance-friendly solution to the problems of capital accumulation at
the end of a relatively long cycle of prosperity. Chapters 1. 22 and 30 show that neoliberalism
imposed discipline upon a restless working class through contractionary fiscal and monetary
policies and wide-ranging initiatives to curtail social rights, under the guise of
anti-inflation and productivity-enhancing measures. Neoliberalism also rationalised the
transfer of state capacity to allocate resources inter-temporally (the balance between
investment and consumption) and inter-sectorally (the distribution of investment, employment
and output) towards an increasingly internationally integrated (and US-led) financial sector.
In doing so, neoliberalism facilitated a gigantic transfer of resources to the local rich and
the United States, as is shown by Chanters 11 and 15. Neoliberal globalism is not at all a
model of 'economic deregulation', and it does not promote 'private initiative' in general.
Under the ideological veil of non-intervention, neoliberalism involves extensive and invasive
interventions in every area of social life. It imposes a specific form of social and economic
regulation based on the prominence of finance, international elite integration, subordination
of the poor in every country and universal compliance with US interests. Finally, neoliberalism
does not foster rapid accumulation. Although it enhances the power and the living standards of
the global elite and its appendages, it is destructive for the vast majority. Domestically, the
expansion of 'market relations' tramples upon rights of access to food, water, education, work,
land, housing, medical care, transportation and public amenities as well as 011 gender
relations, as is shown by Chanters 16 to 18. Lawrs are changed to discipline the majority,
restrict their rights of association and make it difficult to protest against the consequences
of neoliberalism and to develop alternatives. The police, the courts and the armed forces are
available to quash protests in the 'new democracies' such as Bolivia, Ecuador, Nigeria, South
Africa, South Korea and Zambia, as well as in 'old democracies' such as France, India, Italy,
Sweden, the United Kingdom and the United States. Chanter 20 shows that democracy is everywhere
limited by the rights of global capital to seize the land and exploit its people, while Chanter
8 reviews the systematic seizure of assets which has gone hand in hand with neoliberalism in
many countries. Finally, an increasing share of global profits is being pumped into the rich
countries, especially the United States. These transfers increase the pressure 011 the
periphery, where rates of exploitation must increase sharply in order to support extraordinary
levels of elite consumption domestically as well as in the United States. In other words,
neoliberalism is a hegemonic system of enhanced exploitation of the majority. Chanter 12 shows
that the neoliberal promise of rising living standards for poor countries has not been
fulfilled, and Chanter ip, discusses the manner in which foreign aid has served this process of
exploitation. These and other chapters in this volume argue that neoliberalism prevents the
implementation of those very policies that would most likely contribute to economic growth and
poverty reduction: as Chapter 28 argues for South Asia, neoliberalism has fatally narrowed the
policy discourse. This exploitative agenda is primarily but not exclusively the outcome of a
shift in the power relations within (and between) countries. It is also the outcome of
technological changes, especially cheaper international transportation, communications and
computing power, the internet, the emergence of 'flexible' production, greater international
integration between production chains and in the financial markets, and so 011. These material
changes responded to existing social changes at least as much as they induced them.
TRANSCENDING NEOLIBERALISM
In spite of its power, the transformations that it has wrought 011 the world economy, and
the achievement of ever rising living standards for the minority, neoliberalism does not offer
an efficient platform for capital accumulation. Under neoliberalism, economic growth rates have
declined, unemployment and underemployment have become widespread, inequalities within and
between countries have become sharper, the living and working conditions of the majority have
deteriorated almost everywhere, and the periphery has suffered greatly from economic
instability. In other words, neoliberalism is a global system of minority power, plunder of
nations and despoilment of the environment. This system breeds economic, political and social
changes, creating the material basis for its own perpetuation and crushing the resistances
against its reproduction. Chanters 26 to 30 discuss the continuing crisis in Latin America,
sub- Saharan Africa, South Asia, Japan and East and South-East Asia. They argue that neoliberal
policies have enhanced instability everywhere, while Chanter 10 shows that the theoretical and
empirical evidence cannot support neoliberalism's central hypothesis that trade openness is
good for growth.
However, neoliberalism also destroys its own conditions of existence. Its persistent failure
to deliver sustained economic growth and rising living standards exhausts the tolerance of the
majority and lays bare the web of spin in which neoliberalism clouds the debate and legitimates
its destructive outcomes. Tire endless mantra of 'reforms' which systematically fail to deliver
their promised 'efficiency gains' delegitimises the neoliberal states, their discourse and
their mouthpieces. The explosion of consumer credit that has supported the improvement of
living standards in the centre, given the growing fiscal constrains upon the state, limits the
scope for interest-rate manipulation - the most important neoliberal economic policy tool. Most
importantly, popular movements have emerged and successfully challenged the neoliberal
hegemony. Whatever their limitations, as Chapter ?? argues, the recent social explosions in
Argentina, Bolivia, Ecuador, as well as more limited social movements elsewhere, show that
neoliberalism is not invulnerable. This book details and substantiates these claims, and points
toward an agenda of reflection, critique and struggle.
Canadian Cents@9 The book Capitalism on a Ventilator is a collection of essays or articles
produced by the Workers World Party, one of the Communist Parties in the US.
Amazon lists the book as currently unavailable (and asks if you want an email if it
becomes more available.)
It is indeed possible this is a surreptitious way of censoring the book, especially if the
unavailability means WWP (which operates the International Action Center) simply hasn't
complied with technical requirements imposed by Amazon.
Such as guaranteeing delivery within a limited number of days. Amazon has, apparently,
tightened up a lot to make it difficult for independents to sell on Amazon.
But it is also possible that the limited budgets and other resources led to limited
numbers of copies which are now sold out. When the new press run is complete, the book
becomes available again.
Unless you've been living under a rock for the last few weeks, you've most likely been
inundated with all kinds of new stories and finger-pointing social media diatribes about
Texas' shocking grid failure as temperatures dropped below freezing across the Lone Star
State earlier this month. And, adding insult to injury, after coping with rolling blackouts
and a plague of burst pipes during the harsh winter storm, some residents were hit with
power
bills big enough to bankrupt them--in some cases over $15,000.
As these disastrous (and in some cases
deadly ) developments unfolded, there was no shortage of accusations and blame games to
go around, with different factions (
mistakenly ) pointing to frozen wind turbines while others blamed the state's uniquely
deregulated power grid. Now, as Texas lawmakers launch an investigation into the source of
the energy system failures, state regulators have also come under fire amidst a general
atmosphere of "finger pointing and blame shifting" at the unfolding legislative
hearings .
While the outages came as a shock to Texans, as well as to the rest of the world watching
the news unfold on their various screens, the elements that came together in a perfect storm
(so to speak) to cause the systemwide failures have been in place for years, and in some
cases, decades. Texas' unique utilities market has been blazing its own trail for a long time
now, having begun its course towards energy independence in 1999, but it's only when
something goes wrong that these kinds of innovations (or "the nation's most extensive
experiment in electrical deregulation" according to the New York Times) come under
scrutiny.
Texas is in a unique position to run its own grid however it sees fit, as 90 percent of the state's energy is produced
on its very own grid. And the state has seen fit to run that grid with very, very little
regulation, "handing control of the state's entire electricity delivery system to a
market-based patchwork of private generators, transmission companies and energy retailers" as
the New York Times reported last week.
This decision was not a sinister and sneaky back-room deal; it was widely publicized and
supported in equal measure by constituents and industry leaders alike. "Competition in the
electric industry will benefit Texans by reducing monthly rates and offering consumers more
choices about the power they use," then- Texas-governor George W. Bush was quoted when he
became a signatory on the 1999 deregulation legislation.
But while Texans were promised cheap electricity in exchange for rallying around grid
deregulation, that simply never came to fruition. Since long, long before the $15,000
one-month utility bills, Texans have been paying a premium for the very same energy they were
promised to receive at a discounted rate. A deregulated power grid is particularly vulnerable
to the ebbs and flows of the market, and nearly 60% of Texans now buy their electricity from
a retail power company at a market-based rate instead of a local utility. A recent
Wall Street Journal analysis based on nationwide data from the U.S. Energy Information
Administration revealed that not only have Texans not received the lower power bills they
were expecting, on the whole they've paid more than other U.S. consumers--a lot more.
"Customers of that deregulated energy market have paid a total of $28 billon more for their
power since 2004 than they would have paid if they'd been covered by the state's traditional
utilities,"
Earther reported this week.
While the slow trickle of money of of Texans' pockets over the last 17 years is
newsworthy, considering that deregulation was sold to the public to do the exact opposite,
it's entirely likely that the system would have charged on unchanged without the massive and
scandalous grid failures cause by this months storms--although with changing weather patterns
this kind of catastrophic climate event was coming sooner or later. But in the wake of the
devastating outages, the U.S. and Texas energy industries are already changing in response as
power companies bail on deregulated
grids . "Investors prefer steady dividends from regulated utilities over erratic profits
in the freewheeling American power production industry," the Financial Times reported this
week.
While there are certainly still plenty of benefits to deregulation--incentivizing
innovation and pricing out coal plants are just two examples--this months events show that
those benefits no longer outweigh the risks for many Texan power producers and consumers.
Regarding the Renegade Inc. link @Karlof has provided and the interview with
Richard A. Werner, the research paper he talks about in the midsection can be read here:
Can banks create money out of nothing? .
Strangeley enough, it's probably the first empirical reasarch attempt on how a bank "loan" is
indicated on a bank balance sheet. He does it by taking a fictitious loan from one of these
small local community banks he talks about in the interview.
The paper is easily accessible and also contains a brief history of the perception on how
money is created and how banks operate.
And since the documentary The Spider's Web has been mentioned, there are two
complementary films to banking and finance which are worth watching: 97% Owned and Princes of Yen , the latter based on
Richard Werner's same-titled book. The book tells the story about a slow coup d'etat that
happened in Japan during the 70's and late 80's and how Japan was transformed from a
centralized command economy where credit creation was "window-dressed" by the powerful
Finance Ministry by means of an artificially created housing bubble into one that is
dominated by a neoliberalized Central Bank with all the monetary, financial and social
ramifications we can see today, not just in Japan but around the globe.
Patricia McDonald layered on sweaters, socks and mittens and huddled under blankets for 15
hours as the temperature in her Duncanville, Texas, home plunged to 42 degrees in the wake of
Winter Storm Uri.
Well after the water in her kitchen froze, McDonald decided she'd had enough and braved a
hair-raising ride over snow-covered, ice-slicked roads to get to her daughter's house several
miles away.
The Dallas County probation officer was safe and warm there. However, McDonald couldn't
establish the computer connection she needed to check in with colleagues, and she worried about
clients who had had fewer resources than she did for surviving the state's massive power
failure.
This isn't merely a Texas problem. Failing infrastructure -- from pothole-scarred roads and
run-down bridges to aging utility lines and dilapidated water systems -- poses just as big a threat to the rest
of the country.
Without a bold rebuilding campaign, Americans will continue to risk their well-being and
livelihoods as the nation collapses around them.
McDonald, financial secretary for United Steelworkers (USW) Local 9487, which represents
hundreds of city and county workers in Dallas, grew increasingly angry knowing that it took
just several inches of snow and frigid temperatures to knock out the Texas power
grid and paralyze the state.
Some Texans, confronted with days-long power outages,
slept in idling motor coaches that officials turned into makeshift warming centers or drove
around seeking hotel rooms that still had light and heat.
But even as McDonald and other Texans waited for power to be restored, police and
firefighters in Philadelphia used rafts to
rescue at least 11 people trapped by a torrent of water after a 48-inch main ruptured in
the city's Nicetown neighborhood.
America cannot move forward if it continues falling apart. That's why the USW and other
labor unions are championing a
historic infrastructure program that will modernize the country, improve the nation's
competitiveness and create millions of jobs while simultaneously enhancing public safety.
"There needs to be change," said McDonald, one of the millions affected by the blackouts
that utilities hurriedly imposed because surging demand and equipment failures put the whole
power grid "
seconds and minutes away " from a catastrophic failure that could have left the state
without electricity for months.
A major infrastructure investment, such as the one President Joe Biden envisioned in his
Build Back Better plan, will
create jobs not only for the workers who build roads and bridges but also for the Americans who
manufacture aluminum, cement, fiberglass, steel and other items essential for construction
projects.
Stronger, more resilient infrastructure will help America weather the ever
more frequent, increasingly severe storms associated with climate change. That means not
only upgrading power grids but also encasing utility poles in concrete or relocating power
lines underground. It also requires strengthening coastal barriers to guard
against the growing hurricane damage that Texas and other states face.
Expanding broadband and rebuilding schools will ensure that children across the country have
equitable access to educational opportunities. Investments in manufacturing facilities will
enable the nation to rebuild
production capacity decimated by decades of offshoring.
And an infrastructure campaign will ensure local officials have the resources they need to
manage growth, such as the
huge expansion underway at the Electric Boat submarine shipyard in Groton, Connecticut.
Kevin Ziolkovski welcomes the business that the shipyard brings to his community. But
Ziolkovski, who represents dozens of Groton Utilities workers as unit president of USW Local
9411-00, said it makes no sense for the federal government to continue awarding bigger
contracts to Electric Boat without providing sufficient funds for related infrastructure.
Ziolkovski says Groton Utilities needs $3.5 million more just to construct a new water tank
for the shipyard, one of its biggest customers. He also knows that Groton and other towns need
funds to upgrade roads, sewerage systems, public transit and recreational amenities to
accommodate the expected influx of workers and their families.
"If you want to see these multibillion-dollar nuclear submarines get built for the defense
of the entire nation, you should support everything that goes into that, too," said Ziolkovski,
who sees a national infrastructure program as one solution and developed a briefing book on
local infrastructure needs for Connecticut's congressional delegation.
McDonald, who returned to her home after three days to find the power back on but her
neighborhood under a boil-water advisory, knows that other communities will suffer unless the
nation embraces a rebuilding program.
It pains her to know that America fell into such disrepair that it cannot provide basic
services, like power and safe roads, at the very time people need them most.
We need infrastructure upgrade. How to fund? It seems a fair number of the examples here
were originally funded by local taxes. As local property taxes have been cut/ held down, the
local money to repair and maintain has disappeared. Now the same local tax cutters want
Federal money for their projects. What happened to local borrowing and funding? Is it
different from the past?
I am all for Federal funding of national projects such as roads, but local stuff might be
best funded at local level with some Federal guarantees.
all we really need is a policy to upgrade infrastructure rather than a policy of handing
money to connected insiders. Local borrowing and funding won't be a drop in the bucket and
that lack will be used to say " sorry, you can't have that! unless you guarantee profits to
the funding banksters". The system as it stands now makes this article seem fantastic, in the
disney sense
The Fed can easily fund an entire $10 trillion infrastructure package over a decade. If
not completely corrupted, this adds productive capacity at good to high rates of return
lowering total factor costs.
Also, savings could be had from the healthcare rackets that siphon off an unreal 8% to 10%
(up to $2 trillion/year) of GDP in skims. The US needs to increase investment by 5% of GDP
($1 trillion) / year to get back on track.
The funds are in "our" insanely huge "defense" budgets where because they routinely break
the 1996 law requiring an annual accounting,over $21 Trillion dollars have been unaccounted
for,n this by outside investigaters. Imagine the real amount if investigated by insiders.
When we defund the military from the size of the next 10 largest military budgets globally
down to merely the largest, we will be able to rebuild our country,pay off student debt and
pay for Medicare 4 All with change left over. This will also decrease our military's huge
pollution footprint as they are 1 of the largest sources.
The U.S. is run by predatory plutocrats. Biden and the coin-operated Congress are there
just to maintain a dignified facade on the looting operation. As long as the majority of
voters are willing to lower their standard of living in return for receiving infusions of
hatred from their favorite demagogues, the nation will continue to decline.
Even if Biden launches a large scale infrastructure and infrastructure repair program I am
not sure how much infrastructure and infrastructure repair the money would buy without major
changes in the ownership of construction Cartels and some of the ownership of existing
infrastructure -- like the Grid, Internet, and telecommunications. But look on the bright
side of life there are probably still shovel-ready projects waiting from the Obama years. I
trust that Biden has replaced the government appointees who oversaw where the CARES Act
trillions went so that we will at least have some idea where all the infrastructure and
infrastructure repair money went.
Neoliberals know next to nothing about the monetary system.
All their mistakes during globalisation have allowed heterodox economists to make enormous
progress in this area.
Even amongst the mainstream there are one or two that do have some idea.
Paul Ryan was a typically confused neoliberal and Alan Greenspan had to put him
straight.
Paul Ryan was worried about how the Government would pay for pensions.
Alan Greenspan told Paul Ryan the Government can create all the money it wants, there is no
need to save for pensions. https://www.youtube.com/watch?v=DNCZHAQnfGU
What matters is whether the goods and services are there for them to buy with that money.
That's where the real wealth in the economy lies.
Neoliberals have got very confused about where the real wealth in the economy lies and
money, which comes out of nothing.
They don't know what real wealth creation is, and think it comes from things like making
money, trade and inflating asset prices.
It's a recipe for disaster.
They always think there is no money, when money comes out of nothing and Governments can
create as much as they want.
They don't know what real wealth creation is and how to grow an economy in a sustainable
way.
They usually adopt the economic growth model of the US in the 1920s.
Bank credit is used for unproductive purposes and it is the money creation of bank credit
that drives the economy.
Debt rises faster than GDP, as you head towards a financial crisis.
No one realises the problems that are building up in the economy as they use an economics
that doesn't look at debt, neoclassical economics; apart from the Chinese.
1929 – US
1991 – Japan
2008 – US, UK and Euro-zone
The PBoC saw the Chinese Minsky Moment coming and you can too by looking at the chart
above.
The Chinese were lucky; it was very late in the day.
Mankind first started to produce a surplus with early agriculture.
It wasn't long before the elites learnt how to read the skies, the sun and the stars, to
predict the coming seasons to the amazed masses and collect tribute.
They soon made the most of the opportunity and removed themselves from any hard work to
concentrate on "spiritual matters", i.e. any hocus-pocus they could come up with to elevate
them from the masses, e.g. rituals, fertility rights, offering to the gods . etc and to turn
the initially small tributes, into extracting all the surplus created by the hard work of the
rest.
The elites became the representatives of the gods and they were responsible for the bounty of
the earth and the harvests.
As long as all the surplus was handed over, all would be well.
The class structure emerges.
Upper class – Do as little as they can get away with and get most of the rewards
Middle class – Administrative/managerial class who have enough to live a comfortable
life
Working class – Do the work, and live a basic subsistence existence where they get
enough to stay alive and breed
Their techniques have got more sophisticated over time, but this is the underlying
idea.
They have achieved a total inversion, and got most of the rewards going to those that don't
really do anything.
Everything had worked well for 5,000 years as no one knew what was really going on.
The last thing they needed was "The Enlightenment" as people would work out what was really
going on.
They did work out what was going on and this had to be hidden again.
The classical economists identified the constructive "earned" income and the parasitic
"unearned" income.
Most of the people at the top lived off the parasitic "unearned" income and they now had a
big problem. (Upper class – Do as little as they can get away with and get most of the
rewards)
This problem was solved with neoclassical economics, which hides this distinction.
It's a pseudo economics that was designed to hide the way the economy actually works.
It confuses making money and creating wealth so all rich people look good.
Great minds think alike.
William White (BIS, OECD) talks about how economics really changed over one hundred years ago
as classical economics was replaced by neoclassical economics. https://www.youtube.com/watch?v=g6iXBQ33pBo&t=2485s
He thinks we have been on the wrong path for one hundred years.
Small state, unregulated capitalism was where it all started and it's rather different to
today's expectations.
Engdahl takes a look at the energy crisis in Texas.
The Green Energy Fallacy
In addition US oil production, centered in Texas, has plunged by a third, and more than
20 Gulf Coast oil refineries are blocked as are grain barge shipments along the Mississippi
River. Several analysts of the deregulated Texas grid model point out that had the state
maintained a "reliable emergency backup" such as is possible with nuclear or coal power,
the blackout could have been averted. Recently Texas has forced six coal power plants to
close since 2018, owing to state rules that force power companies to take the subsidized
wind and solar power, undercutting the cost of their own coal generation. It simply forced
them to shut down functioning coal plants that generated 3.9 GW. Had those still been on
line, sources say the blackouts could easily have been averted. Unlike current wind
technology or solar, coal and nuclear plants can store up to a month or more capacity on
site for power emergencies.
While in northern states like Minnesota where severe winters are common and prepared
for, Texas has no such requirements for reserve capacity. For example, the Minnesota Public
Utilities Commission requires plants to have enough reserve capacity online to ensure the
power stays on during extreme circumstances. Instead, Texas operates an "energy-only"
market, where wholesale power prices are seen as an adequate incentive to bring more power
plants online. The aim of the energy only model was to make intermittent wind and solar
more profitable to increase their market share over conventional alternatives like coal or
nuclear.
The state grid model forced Texas coal and nuclear plants to sell electricity at a loss
on the market because they are unable to reduce their electricity output when high wind and
solar output force prices into the red. Ultimately, it forced the unnecessary closing of
the six coal plants, just what the green energy advocates wanted. The flaws in the model
are glaring, as is the growing dependence on unreliable wind and solar options to get a
dubious zero carbon footprint.
It should be obvious to all that "price signals" do not convey public interest all the
time, and definitely not in the times of crisis.
To prevent or alleviate a crisis, investments are needed that may be "wasted" or not. I
did not notice a public debate like that: "do you want to pay 1c/kWh more so the power supply
will be adequate even during to relatively short events that happen every 10 years or so?" It
is cheaper to build pipes and other equipment if they do not have to work in cold weather,
and to close usually unneeded thermal power stations rather then keeping them capable of
producing electricity during occasional weeks of peak demand.
Funnily enough, the "novel pricing mechanisms" reward the companies that did not
prevent the crisis, even few kWh's sold at a price 1000 times larger than the usual
contributes very well to the balance sheets. IMF is busy convincing borrowing countries to
engage in "reforms" of that kind (and worse, persistent jacking up of prices).
A Texas electric company has been hit with a $1 billion class action lawsuit from a woman
who claims her bill skyrocketed to more than $9,000.
Houston resident Lisa Khoury says her monthly Griddy electric bill spiked to $9,340 from
$200, and that the company pulled $1,200 from her bank account until she blocked further
payments,
according to KTRK-TV .
"It went through my mind how are we going to pay this, what are we going to do, this is
life-changing," Khoury
told KXAS-TV .
The suit accuses Griddy of price gouging and failing to protect its customers from
astronomical energy costs.
The electric company, which serves nearly 30,000 Texans, sent an email out to their
customers on Feb. 13 before the winter storm, warning them of the high costs and even
encouraged them to switch providers.
"Prices are looking to stay at record rates over the next couple of days due to the polar
vortex. Your well-being is more important than our bottom-line. Unless you are a Griddy
energy-saving expert, we recommend you immediately switch to another provider due to these
price surges," a screenshot of the email posted to Twitter reads.
A Griddy spokesman
told The Dallas Morning News that "the lawsuit is meritless and we plan to vigorously
defend it."
"Liberal" appeared in Europe in a socio-economic context in the late 1600s to describe an
system where business would be free, unhindered by royal/government control. For the most
part, to start up a business, one needed a royal license or patent. The liberals wanted
unregulated business, and their motto was "laissez faire" (let it be done/happen).
Laissez-faire capitalism is generally considered the first (entrepreneurial) phase of
capitalism, starting in the early 1700s.
Outside the English-speaking world, the word still relates to free trade and unregulated
business practices.
"Neoliberal" is more recent, coming into common usage since the arrival of the
Thatcher/Reagan regime of globalization. Neoliberals go one further than the original
liberals. While the latter just wanted governments to let businesses do their thing, the
neoliberals believe that it is government's duty to promote and support business, in other
words to play a major role in making it possible for corporations to make money. Hence,
Boeing and the other corporations and the big banks must NEVER be allowed to fail, for that
would represent a failure of government as it is understood in neoliberal ideology.
The liberalism which is referred to here is the economic liberalism which was adopted in
the United Kingdom in the 1840s after the "reform" of the Corn Laws, which permitted free
trade in grain and therefore brought down both the price of wheat and the small farming
community in the UK, as it was intended to do. Later these liberal policies (largely modelled
on the "comparative advantage" economic theory, which had already been refuted by the time it
was developed by David Ricardo) were used to justify the Irish genocide of 1847-9.
This policy was eventually abandoned later in the nineteenth century, except for places
like India, of course. It was restored in the West in the 1970s, under the name of "free
trade", and therefore is called neoliberalism, or new liberalism in the economic sense.
The term is not a compliment.
I suspect that the term "liberal-fascist" derives partly from the term Islamofascist,
meaning a Muslim who does not bow to Washington six times a day, and partly from the term
"social-fascist", a Stalinist term for a socialist who did not bow to Moscow six times a
day.
Liberalism is the ideology of capitalism. According to Losurdo, the term "liberal" (as an
adjective) is first found in 16th Century Spain, and essentially was a defense of slave labor
to serf labor.
The first theoretician of Liberalism that I can think of is John Locke. If he wasn't the
first, he certainly was the most influential, as he was the philosopher of the Founding
Fathers of the USA.
Liberalism was never an organized "school" or ideology. The term itself as we know today
(an ism) was only consolidated sometime around the French Revolution (1789), hence why many
people today (mainly Western First Worlders) still associate the term is progressivism and
even leftism. In reality, they are confounding the term with radicalism, which was the
faction of the abolitionist liberals who extrapolated liberalism to all human beings.
Neoliberalism is literally the New Liberalism. The neoliberals believe that everything
that happened between the Russian Revolution (1917) and the post-war welfare state
social-democracy was an abortion of History that should've never have happened. They then
propose the return to the classical liberal era (until 1914) with updates to the new
technological realities of their time, as if the period of 1917-1975 never existed. They then
seek to "link up" 1980-present to 1500-1914.
@vk "The neoliberals believe that everything that happened between the Russian Revolution
(1917) and the post-war welfare state social-democracy was an abortion of History that
should've never have happened."
Personally, I tend to define 'neoliberalism' as global financial capitalism. 'Global'
being the key. Something similar to what's described here: https://en.wikipedia.org/wiki/Ultra-imperialism
. Technological advances in global communications and transportation (containerization) being
its most important precursors.
But I agree that the collapse of the Soviet Union, a competing alternative model, has to
be an important component also.
@ Posted by: Mao Cheng Ji | Feb 25 2021 12:28 utc | 87
You're thinking about Monetarism - the economics school founded by Milton Friedman that
served as the economic theory of neoliberalism after the 1980s.
Neoliberalism was founded in 1947 (Mont Pelerin Society). One interesting thing about the
original neoliberals was that they didn't distinguish between European social-democracy and
communism: in their view, the welfare state was the realization of the Communist Manifesto's
program (it really does propose for what we nowadays call the welfare state in some of its
pages as some kind of transition program).
@ Posted by: Mao Cheng Ji | Feb 25 2021 12:49 utc | 89
Monetarism is the economic theory. Neoliberalism is the political-ideological doctrine.
Neoliberalism found in Monetarism the missing piece for them to govern the Western world,
sometime in the mid-1970s.
It is common for a political-ideological doctrine to absorb theories outside of its
"field" in order to strengthen itself and gain power. Change of clothes (i.e. change of the
theories it adopts) is also common.
The impression Westerners have nowadays that one political-ideological doctrine must
always have exactly one economic theory or even that they are the same thing comes from the
fact that we live in the Era of Marxism, i.e. a historical period where Marxism is dominant.
But Marxism is the exception to the rule, based on the scientific theory of the greatest
philosopher of all time.
In practice, the bourgeois ideologues will have to make do with much inferior
theoreticians (John Locke, Adam Smith, David Ricardo, Paul Samuelson, Mises, Hayek,
Böhm-Bawerk, Walras, Keynes, Friedman etc. etc. etc.) and so it is expected for them to
change their thinkers from time to time.
@vk "Neoliberalism found in Monetarism the missing piece..."
The way I see it, economics is the base. Like I said, technological advances in global
communications and transportation shifted the paradigm. What we have now is international
division of labor, controlled by west-owned global finance. Global financial capital is
rising above national boundaries; the role of national governments is to provide resources,
infrastructure, and disciplined low-cost labor, thus attracting a portion of global capital,
competing for it.
That's what I call 'neoliberalism', but I don't insist on it. What's in the name?
'Hyperimperialism', 'super-imperialism', 'inter-imperialism' or even 'state cartel' would
do.
It's just that 'neoliberalism' is a popular word these days, that seems to be used to
describe the current form of "relations of production". And why not.
Now, about ideologies. My feeling is, there are always hundreds of various ideologies
flying around. The establishment will pick a suitable one, shine it up in think-tanks, and go
with it. It'll become the dominant ideology. Until it doesn't suffice anymore, and then
they'll replace it with another. But that's all bullshit. Pwogwessivism, liberalism, social
democracy, the third way, whatever. No need to pay attention.
@ Posted by: Mao Cheng Ji | Feb 25 2021 14:18 utc | 97
Now, about ideologies. My feeling is, there are always hundreds of various ideologies
flying around. The establishment will pick a suitable one, shine it up in think-tanks, and
go with it. It'll become the dominant ideology. Until it doesn't suffice anymore, and then
they'll replace it with another. But that's all bullshit. Pwogwessivism, liberalism, social
democracy, the third way, whatever. No need to pay attention.
That's the definition of democracy in the post-war, as defined by the likes of Arthur M.
Schlesinger, Jr. and Hannah Arendt.
Schlesinger defined democracy or Western democracy as the system with a "vital center". A
vital center is a political system dominated by a political spectrum (left-right). The
ideologies within this political spectrum freely compete against each other in the public
arena for political power (getting into the White House; forming a majority within a
Parliament). Schlesinger is the father of what we nowadays call "pluralism". In opposition, a
totalitarian system is one of a single party, in which he put Nazi Germany and the USSR -
they don't have a "vital center".
Hannah Arendt defined totalitarianism as any system that vertebrates itself on one single
meta-narrative (History). She put as the totalitarian holotypes both Nazi Germany and the
USSR - the first built itself over the narrative of the master race; the second over class
struggle. By exclusion, she defines a democratic system as those without a single narrative
or any meta-narrative. By a different route, she comes to a similar endgame as Schlesinger,
with the exception that, in her model, democracies don't necessarily need to be multi-party
or even plural. You could be a single-party system and not plural - as long as the party
doesn't adopt any "meta-narrative", it suffices as free and democratic. Needless to say,
Arendt is one of the precursors to Postmodernism (absolute relativity).
That's why the West, until the present days, still consider itself as fully democratic and
China and Russia fully totalitarian: as long as the West doesn't adopt a meta-narrative and
keeps more than one party, they are democratic by post-war standards. It's not and never was
about eradicating poverty, turning the world a better place, fomenting progress for the
people etc. etc.
Lots of stabs being made at a definition for Neoliberalism. The following is from Hudson's
J is for Junk Economics , pgs 167-8:
" Neoliberalism: An ideology to absolve banks, landlords and monopolists from
accusations of predatory behavior. Just as European fascism in teh 1930s reflected the
failure of socialist parties to put forth a viable alternative, today's U.S.-centered
neoliberalism reflects the failure of industrial capitalism or socialism to free society from
rentier interests that are a legacy of feudalism.
"Turning the tables on classical political economy, rentier interests act as
plaintiffs against public regulation and taxation of their economic rents in contrast
to Adam Smith and other classical liberals, today's neoliberals want to deregulate
monopoly income and free markets for rent seeking, as well as replacing progressive income
taxation and taxes on land and banking with a value-added tax (VAT) on consumers.
"Endorsing an oligarchic role of government to protect property and financial fortunes
(see Chicago School and Moral Hazard ), neoliberalism loads the economy with an
exponential growth of debt while depicting it in a way that avoids recognizing the rising
rentier overhead (rent, interest and insurance) paid to the FIRE sector. (See Junk
Economics and Social Market .) Neoliberals want to privatize public
infrastructure. They defend this grabitization by depicting public ownership and regulation
as less efficient than congtrol by financial managers, despite their notorious short-termism.
The pretense is that private operators will provide goods and services at lower cost even
while extracting monopoly rent, building interest, dividends and high management salaries
into prices. (See Pentagon Capitalism .)"
A related definition follows:
" Neoliberal Disease: A term coined by Jan Hellevig to describe the free hand that
leaders of the demoralized post-Soviet bureaucracies gave neoliberals to redesign and
de-industrialize their economies by creating client kleptocracies . 'They freed the
markets, but only for the criminals. They totally neglected investments to modernize the
industry, and let the assets and cash streams be openly or covertly stolen by insiders and
the mob. The result was total chaos and the breakup of the Soviet Union.'" (Jon Hellevig,
"Russian Economy--The disease is not Dutch but Liberal," Awara March 2 2016, reprinted in Johnson's Russia
List , March 3, 2016, #12.)" [All Emphasis Original]
It should be noted the strategy Hellevig describes is the same as that used by those
termed "Corporate Raiders" that first prominently surfaced during Reagan/Bush and were
responsible for the so-called Savings & Loan Crisis.
If you don't have Hudson's book, I highly suggest getting it as it's filled with excellent
information and beats taking both micro- and macroeconomics. It's the companion book to
Killing the Host , which is essential for understanding Neoliberalism. The only part
of the Saga missing is a definitive history telling how the Neoliberal doctrine arose in the
UK and was exported to the USA @1880. Hudson has provided key portions but the overall story
still remains to be told.
the worst mistake jimmy carter ever made was to hire brzezinski, father of the
mujahideen and grandfather of al-qaeda. we used to brag about arming terrorists with weapons
to shoot down russian helicopters, hell they even made a "comedy" about it called charlie
wilsons war. now we accuse the russians of placing bounties on americans in afganistan and
demand more sanctions be placed on russia.
utter hypocrisy.
as for the maidan cookie monster and her neocon half wit husband, further proof of
failing upward, nothing succeeds like failure in washington. /div
Most Americans consider Kissinger a war criminal too, and informed Americans know that
Zbignue Brzenski has lost all credibility. He was a cold war era Anti-Russian. He has said
little if anything relevant since the collapse of the USSR.
Informed Americans would prefer a doplomatic relationship with their neighbors south of
the border. It would be much more economically and environmentally sustainable to have a
cooperative agreement with Venezuela, rather than the KXL advocates north of the border, that
Biden thankfully banned. It may be the only thing tbat he ends up doing correctly. I hope
not. I did not vote for him, Trump, or anyone else. Biden, Blinken, and Austin speak about
wanting to go back to the JCPOA and START, but whether they are willing to give up their
policy errors of force through sanctions, and falsely blaming Iran for the attack on the
Irbil Iraq airport will probably determine whether they can do this successfully or not.
Everyone is sick of the bullshit from the American government, including American citizens!
The government does what they Globzi investors demand from them. They really do not give a
damn about anyone else. Everyone is just a means to an end to them, and unkess someone is
exceptionally wealthy, they are an irrelevant pain in the ass to the government, unless they
are willing to sell out their own interest in order to elevate the corrupt government.
That's true. As a barometer of establishment thinking, Foreign Affairs is indeed
useful. I would just make a distinction of using it to understand establishment thinking
versus using it as a source for good policy, which is evidently questionable if its editors
still think Robert Kagan has anything useful to propose.
The tendency of liberalism to deny the consequences of society stems from its myth of the
'individual'. Liberalism imagines a world of rational subjects each making decisions in a
sovereign way (Thatcher's 'there is no such thing as society'). This allows capitalism to
erect a moral framework that represents the consequences of an economy as the consequences of
personal decisions. In this way, success (wealth) is 'reward' and failure (poverty) is
punishment. It's what Max Weber called 'secular Protestantism'. The working classes
participate in this evaluative ideology (Gramsci); it is the source of their self-loathing
and the reason they always vote against their own best interests. They all believe their lack
of means is a consequence of their lack of intelligence, work ethic, failure of
entrepreneurial spirit, etc etc. Here is Marx's own critique of the way liberalism washes its
hands of the effects of capitalism:
"The... theory... which is also expressed as a law of nature, that population grows faster
than the means of subsistence, is the more welcome to the bourgeois as it silences his
conscience, makes hard-heartedness into a moral duty and the consequences of society into
the consequences of nature, and finally gives him the opportunity to watch the destruction
of the proletariat by starvation as calmly as any other natural event without bestirring
himself, and, on the other hand, to regard the misery of the proletariat as its own fault
and to punish it. To be sure, the proletarian can restrain his natural instinct by reason,
and so, by moral supervision, halt the law of nature in its injurious course of
development." - Karl Marx, Wages, December 1847
While it may be superficially true that our poor Texan could have cunningly evaded copping
the wholesale price the fact remains that he is -- as all Texans are -- a victim of a system
structurally designed to extract exorbitant rents from his need for power. A socialist system
would not see him as a battery hen to be skimmed or as an atomized individual who should
'sink or swim' (in the words of that local mayor) but would seek to prevent power, food,
water, air, housing, education, health, etc etc from being hijacked and sequestered by vested
interests accessible only by outrageous fees. Socialism would outlaw rent-seeking, which is
the theft of meaningful life by carpetbaggers and their corrupt partners in government.
As we saw with Lavrov's latest interview, the gloves are coming off as China and Russia
escalate the diplomatic war in response to the "US-centered, racist, and mafia-styled
community" attacking them. The quote is from the Global Times Editor and deserves to be put
in full:
"Canada, the UK and Australia, three members of the Five Eyes alliance, have recently
taken action to put pressure on China. They have formed a US-centered, racist, and
mafia-styled community, willfully and arrogantly provoking China and trying to consolidate
their hegemony as all gangsters do. They are becoming a racist axis aimed at stifling the
development rights of 1.4 billion Chinese."
Despite the proven fact that there's only one race of humans--the Human Race--the 5-Eyes
nations continue to employ racism as a key tool of their so-called diplomacy. Again, the GT
Editor:
"Five Eyes alliance members are all English-speaking countries. The formation of four
states, except the UK, is the result of British colonization. Those countries share the
Anglo-Saxon civilization. The Five Eyes countries have been brought together by the US to
become the 'center of the West.' They have a strong sense of civilization superiority
. The bloc, which was initially aimed at intelligence sharing, has now become an organization
targeting China and Russia. The evil idea of racism has been fermenting consciously or
unconsciously in their clashes with the two countries."
And this "idea" is nothing new and has existed for centuries. My research led me to a 100+
year-old work, The Day of The Saxon , and to the work that suggested it, The Empire
of "The City" , both of which are freely available at The Archive. What is suggested by
them and the recent work ( Tomorrow, the World: The Birth of U.S. Global Supremacy ),
reviewed by Pepe about the planning that resulted in the post-war Outlaw US Empire is that
Empire is merely the continuance of the global Saxon Empire that still exists, and that what
we're experiencing are the ongoing "political adjustments" that confer superiority to the
Saxons since that's what they seek. In updated parlance, that would be Full Spectrum
Dominance. As we know, the Chinese have already felt Saxon love and want no more of it and
have finally made the connection between past and present. The Editor again:
"With a common language, a common historical background, and a coordinated attack target,
such an axis is destined to erode international relations and allow hooliganism to rise to
the diplomatic stage in the 21st century." [My Emphasis]
Hooliganism, an apt term given its roots in British football. Do read the entire editorial
for there is much more commendable content. Those in the EU need to understand that they're
doing the Saxon's bidding even through the UK is no longer a member as NATO still remains and
is dominated by Saxons.
"... Not only was Lloyd's still self-regulating, it was empowered to determine itself what was meant by the notion of self-regulation, unilaterally making rules governing its operations, without answering to any outside authority, even Parliament. Lloyd's secrets were still safe. ..."
I've been following Scottish independence closely now for about six months, and so have
formed a view of the protagonists. Nicola Sturgeon puts me in mind of Lady Mary Archer,
someone I knew for about four years. She is oh so sweet and polished on the outside - indeed
a High Court judge famously said of her "is she not sweet? Is she not fragrant?". But on the
inside....phew!
I believe it comes from a sense of impunity, a sense they can do anything they like,
however disgusting and depraved, and there is nobody that can touch them because they are
best female friends with Queen Elizabeth II. And the result is, well, abomination.
Let me give you some insights.
The source of wealth for Lord Archer is Lloyds of London, specifically the asbestosis
fraud. The quotes I am about to relate come from David McClintick's "The Decline and Fall of
Lloyds of London", Time Magazine Europe, February 21 2000 vol 155 no 7
Caressed by a soft breeze, Ralph Rokeby-Johnson and Roger Bradley surveyed the forbidding
fourth hole of the vintage Walton Heath golf course south of London. It was a bright
Thursday in early October, 1973. "Orator, you're not orating," Rokeby-Johnson
said. "Have I upset you?" Rokeby-Johnson had been needling the normally loquacious Bradley
for inside information since they'd teed off in the autumn golf outing of Lloyd's of
London, the world's pre-eminent insurance market. Bradley and Rokeby-Johnson were leading
executives at competing firms in the market and Lloyd's men maintained a spirited rivalry
in golf as well as business. But as they shop-talked their way along
the first three holes, "Orator" Bradley had fallen silent, because he sensed that
Rokeby-Johnson was himself harboring information that could prove explosive: the threat to
Lloyd's posed by asbestos, the ubiquitous, benign-looking insulation material that was
slowly but surely infecting workers in the asbestos industry with deadly lung
diseases--asbestosis and cancer--prompting lawsuits and insurance claims in America.
"What can you tell me?" Bradley finally asked as they idled on the fourth
tee, waiting for the players ahead to clear the green. "What I can tell you,"
Rokeby-Johnson replied in a stage whisper, "is that asbestosis is going to change the
wealth of nations. It will bankrupt Lloyd's of London and there is nothing we can do to
stop it."
It was Jefrey Archer who devised a means to turn an impending disaster into the Midas
touch.
Fast forward to February 2000. Over a quarter of a century has passed since Ralph
Rokeby-Johnson shared his apocalyptic vision with Orator Bradley. Legendary Lloyd's of
London, pioneer of the insurance industry and synonymous with it, has escaped bankruptcy.
But the organization that was once part of the very bedrock of Britannia has been
devastated by losses including massive compensation claims from American workers afflicted
by asbestosis and lung cancer. The wealth of nations may not have changed dramatically, but
Lloyd's fundamental character has changed, and thousands of Lloyd's investors--the
so-called Names who pledge all their personal wealth to underwrite insurance policies
issued by Lloyd's syndicates--have been ruined. The decline and fall of
Lloyd's, like all engrossing tragedies, has been building to a spectacular d?nouement. The
final act is now upon us and waiting in the wings are a group of Names who could yet prove
to be Lloyd's nemesis. These are the dissident investors, including members of the
so-called United Names Organization, who have refused to settle their asbestos-related
debts with Lloyd's because, they claim, they are the victims of a massive and calculated
swindle. Back in the 1980s, they argue, Lloyd's duped them into becoming Names by
fraudulently misrepresenting its profitability and concealing the ruinous asbestosis losses
that were in the pipeline. Do they have a case? The truth, they say, will
soon out. Later this month, in what could prove to be the trial of the new century, the
Lloyd's dissidents will claim in England's High Court that they have been the victims, not
just of negligent underwriting, but of one of the greatest fraudulent conspiracies of all
time. They will argue that they were recruited to Lloyd's at a time when the 300-year-old
institution knew it was facing massive asbestosis claims and needed extra capital to absorb
its forecast losses. The dissident Names will further charge that this massive fraud was
not the work of a few posh-mannered, money-grubbing Lloyd's underwriters, but was condoned
and indeed orchestrated by the Lloyd's hierarchy itself.
How much was involved?
Admonished by their partners to stop the shop-talk, Bradley and Rokeby-Johnson dropped the
subject until after the game when they settled with drinks in a corner of the tweedy bar of
the clubhouse. "Were you serious about asbestosis destroying Lloyd's?"
Bradley asked. "Of course," Rokeby-Johnson replied. On the back of his
scorecard, he then proceeded to calculate that Lloyd's could be swamped by claims far in
excess of the market's ability to pay--perhaps as much as $120 billion by the year 2000.
"Do you mean 'million' or 'billion'?" the incredulous Bradley asked.
"Billion," Rokeby-Johnson stressed. "It's the time bombs that worry me."
"What are the time bombs?" "The time bombs are the young
victims [of asbestosis] who will gradually develop lung disease. When they die, the lawyers
are going to have a field day. Pick a figure, but it won't be far off what I've told you.
See whether I am right. I shall be gone long before you."
The day after the golf match, Bradley recounted the conversation to a senior Lloyd's
colleague who warned him against repeating it to anyone else. It seemed to Bradley then
that at least a few Lloyd's insiders were aware of the looming asbestos problem even as
they recruited new Names to bolster the market's capital base. And recruit
they did. The number of names soared beyond 7,000 in the early '70s to 14,000 in 1978 and
reached over 34,000 by the late '80s. After nearly three centuries of genteel, discreet
one-by-one recruitment in Britain, Lloyd's salesmen fanned out across the world, especially
North America, touting Lloyd's as an exclusive club offering secure investments to only a
select few who qualified for membership. According to many of these new recruits, the
Lloyd's sales pitch promised not only risk-free profits, but the opportunity to join an
elite and prestigious "society" which had existed for 300 years and whose membership
included titled British aristocrats. New investors signed up in droves. As one Name
recalled later, "You don't need to drop the names of many English earls to attract a bunch
of North American dentists."
Evans says the clinching argument for joining came again from Coleridge, who boasted to
recruits that Lloyd's was backed by its own act of Parliament. "He said, 'Parliament would
never have passed the act had Lloyd's accounts and regulation not been impeccable.' I
thought to myself, if Parliament has given its seal of approval to Lloyd's, what more do I
need?"
None the wiser, Parliament on July 23, 1982, gave Lloyd's its exemption from lawsuits. It
could be held liable for damages only if a plaintiff could prove "bad faith," which is
difficult to establish under English law where the "buyer-beware" principle is more firmly
established than in the U.S. (an obstacle the Jaffray suit will have to surmount). Not
only was Lloyd's still self-regulating, it was empowered to determine itself what was meant
by the notion of self-regulation, unilaterally making rules governing its operations,
without answering to any outside authority, even Parliament. Lloyd's secrets were still
safe.
And Jeffrey Archer, what was his big idea?
In 1986, Lloyd's quietly added a clause to its contract with investors. Any legal dispute
over the investment would have to be resolved in England under English law. Investors were
not told that Parliament four years earlier had effectively inoculated Lloyd's from
lawsuits in England.....Most lawsuits by private investors against Lloyd's in the U.S. were
stymied, too. The fraud allegations for the most part never got a hearing because Lloyd's
invoked the clause it had slipped into its contracts with investors beginning in 1986
calling for any legal disputes to be litigated in England. Even though the investors
argued that they had been tricked into signing that clause --and Americans' rights
under U. S. securities laws generally cannot be waived by such contracts--U.S. appellate
courts ruled that the contracts were valid and that Names had to sue Lloyd's in England.
Archer has a plot in one of his books where a contract is central. One protagonist asks
another "Did he sign"? And the other replies "Yes, he didn't see that, nor any of the other
three clauses I had slipped in."
If you understand what happened you will understand why Lord and Lady Archer are such
favourites of the British royal family.
But my point is about Mary Archer, and the blackness within. It was not enough for this
person to reduce others to absolute penury, oh no. She had herself appointed as Chair of the
Lloyds Hardship Committee.
If you tell Lloyds you cannot pay your bill you can claim hardship. But you will have to
justify yourself before this committee. Can you imagine Mary's joy and pleasure at making
others beg for mercy? Her ecstasy as she noses through the most personal matters of other
women she has just cut down to size. She probably became quite moist at the excitement of it
all.
No, this is not my imagination. When "Lady" Archer got rid of her secretary for
"disloyalty" she didn't just fire her. She sued her, took away her house and bankrupted the
poor woman. Remember, she's best friends with the Queen.
These people are monsters. And Nicola Sturgeon is one of them.
Note to b. I do not have a link to the Time Magazine piece, but i'd be happy to post the
entire text if your readers are interested.
Don't you know that whining about race, from the racist or the anti-racist side, doesn't
matter, is more important than billionaires fucking us over. It's more important than
anything. It doesn't matter if we die of freezer burn sleeping on cardboard after we've been
laid-off, evicted, and starved. It doesn't matter if we die in a nuclear war that the
billionaires started because they think it would be a good idea.
Nope. All that matters is whining about race. That's the most important thing. All else is
trivial.
Didn't American people suffer from the disease? Yes, the US government is "grotesquely
and manifestly incompetent" and they were likely to expect "a massive coronavirus outbreak
in China would never spread back to America".
The crucial factor here is that the US is not a nation per the most basic definition of
the word, "a group of people born of a common ancestry". Consequently, as illustrated by
job-killing "trade deals" and in countless other ways, there are plenty of "Americans" who
don't care a whit about the fate of Americans. That makes it entirely plausible that the Deep
State and/or one or more billionaires would release a virus in China in the full expectation
that it would hit the US and that once here it would disrupt, impoverish, and kill millions
of Americans. This was a win-win for them. The Deep State and the billionaires don't like
China, which is a non-liberal country and curtails their power by restricting the use of US
tech products. So if somehow the virus were contained in China it would be okay with them, as
it just would be a smaller win. However, what they really wanted was for the virus circle
back to the US. They knew that once here the disruption it would cause would further enrich
and empower them while giving them a pretext to dump it all on Donald Trump, whom they would
accuse of being incompetent and uncaring.
While full of good insights, the problem with this article as far as COVID is concerned is
that it misleads on the main point. COVID is not biowarfare, it is not a pandemic, it's just
the flu. The US recorded the same death rate in 2020 as in previous years and, as Dr. Colleen
Huber has documented, medical oxygen and supply sales were no different from previous
years.
All those COVID-19 deaths were simply deaths of a different name. Of course, we knew from
last March's Diamond Princess cruise–still by far the best controlled COVID
"experiment"–that the case-fatality rate of COVID-19 for the general public is in the
flu range.
But, it never was about COVID-19, which is just a glorified coronavirus of the type seen
even before the dawn of humans. Long before the virus even hit the streets, the media and
governments and medical establishments had secretly planned to to create a "panic-demic" to
scare people into a whole lot of strange and dangerous behaviors–like giving up their
liberties and economic futures. COVID-19 is just a medical nothing-burger that convinced a
lot of otherwise sane people to scare themselves into oblivion. Or did it? If the
post-election analyses are correct, Trump won in a major landslide and even those who voted
against him were already suffering from Trump derangement syndrome. So, maybe the people
weren't fooled by COVID so much as electorally raped by the vast elite cabal.
Whatever we say is a fact-based result of diligent research; whatever you say is a
conspiracy theory – both the US and China representatives subscribe to this
mantra.
Maye both Washington and Beijing are guilty -- of a perpetrating a hoax.
Putin surprised me. He flatly refused the offer of Schwab and his ilk. He condemned the
manner of recent pre-Covid growth, for all the growth went into a few deep pockets.
Moreover, he noted that digital tycoons are dangerous for the world.
The next strong man we elect must be an actual STRONG man. I salute Trump for his genius
in identifying the real majority in this country and for forcing the techno-oligarchs into
overdoing their election steal. Now we need someone who is willing to establish real
authority on behalf of the un-queer.
'Freedom' under neo-liberal capitalism is all of the negative type. You are free to be as
greedy and arrogant as you like, as rich, ie as big a thief, as you like, and as poor as you
like. You are to ignore the liberal injunction that your freedom must not interfere with that
of others, and screw as many patsies as you desire. You are 'free' to vote for two or so near
identical parties, then have no 'freedom' but that which your money buys you. 'Freedom' is
the biggest lie of all Big Lies.
Don't be spooked by those words. Do you know where the words sustainable and inclusive
come from? Tycoons didn't think them up. They're just parroting them to try and twist their
meaning. Those words are from the Addis Ababa consensus. Tycoons give lip service to those
words because if they don't, no one will give them the time of day.
AA is the consensus of the ECOSOC bloc, treaty parties of the ICESCR, 171 of them, the
overwhelming majority of the world. ECOSOC reports to the UNGA, the most participative and
least controllable UN organ. US UN delegates don't even dare mention the AA outcome –
they fixate on the Monterrey Consensus, two documents ago.
Inclusive means, don't let usurers like the IMF get you on the debt hook and immiserize
your people. Sustainable means no pillage of national wealth or resources and no imposition
of externalities (like Chevron did to Ecuador, for instance.) You will see that the outcome
document subordinates everthing the tycoons or the US want to human rights and rule of law.
Economic rights too. The outcome curbs US "Western" corporatist development by pulling WTO
and IMF under the authority of G-192 organizations like UNCTAD and ILO.
It's hard for people in US satellites to interpret this stuff because the underlying
intitiatives of the G-192 (that is, the world) are hidden from you and buried in US
propaganda. Xi is quoting his Five Principles, four of which are straight out of the UN
Charter. China has ratified the ICESCR. So China is not communist. China is not capitalist.
China is a member of the ECOSOC bloc. People in the US or its satellites have no idea what
that is, but it's vastly bigger than the Third International was. It's development based on
human rights. Tycoons and the US hate that shit but they can't stop it.
A couple of things that would go a long way to correct the goddamn stupidity running
rampant in this country are.
Correcting the following horrendous actions: The SCOTUS has passed down egregious
decisions that abridge the First Amendment and show contempt for the concept of
representative democracy. Buckley v. Valeo, 424 U.S. 1976 and exacerbated by continuing
stupid SCOTUS decisions First National Bank of Boston v. Bellotti, Citizens United v. Federal
Election Commission and McCutcheon v. Federal Election Commission.
These decisions have codified that money is free speech thereby giving entities of wealth and
power total influence in elections.
And-
Making it absolutely impossible for anyone to amass more than 100 million dollars extreme
wealth concentrates too much power.
"Tim Boyd, the mayor of Colorado City, Texas, said in a post to the public that ' No
one owes you or your family anything; nor is it the local government's responsibility to
support you during trying times like this! Sink or swim it's your choice! The City and
County, along with power providers or any other service owes you nothing! '
"He also wrote that, 'Only the strong will survive and the weak will perish,' and he even
said that 'this is sadly a product of a socialist government where they feed people to
believe that the few will work and others will become dependent for handouts.' Boyd later
resigned as his remarks had provoked public anger, but it seems that he really believes in
what he posted, and so do many American politicians.
"From the perspective of an outsider, the logic of the tragedy of nearly 500,000 deaths
due to the COVID-19 epidemic in the US so far and more than 20 people being killed in the
winter storm in Texas are the same. The logic is that the attention of the capital and the
government has not been directed toward the protection of human rights . The capitalist
system in the US has derived a set of national morals that deviated from the public interest
and has gradually become flashy but useless." [My Emphasis]
I hope thomas @140 reads this. The Global Times editor's words bear repeating:
" The capitalist system in the US has derived a set of national morals that deviated
from the public interest and has gradually become flashy but useless ." [My Emphasis]
Essentially, the clock's been turned-back over 100 years as the editor notes:
"The US' concept of 'freedom' actually conceals the cold-blooded proposition of the
'freedom of being eliminated.'
The US' notion of 'democracy, human rights and freedom' is actually a combination of
'elections, political rights and social Darwinism.' As such, it comes as no surprise that
various human tragedies often occur in such a wealthy country as the US. To live in the
US, you must have the strength and capability to save yourself in the event of a disaster, or
you should be able to pay a considerable amount of money for the help you seek. Otherwise,
you deserve the miserable situation you are in, and it's more worthy for you to pin your
hopes on charitable organizations and God, instead of the government ." [My Emphasis]
That's what the state of things was prior to the Great Depression when the national
government was finally provoked into providing the most miniscule of safety nets, termed
"Automatic-Stabilizers" to satisfy the Predatory Financial Class with the promise that the
business cycles of boom and bust wouldn't be as harsh as previously. That a particular
segment of the Political Class has sought the elimination of that safety net since its
inception verifies the editor's thesis as he continues:
"Boyd portrayed the government's assisting the victims as 'sadly a product of a socialist
government.' This reflects how much he and many other American politicians like him feel
contempt for government's efforts on people's livelihood. Whether they will survive or die in
the face of natural disasters is the public's own business and it's not worthy for US
governments and officials to protect people's lives - Boyd's words are really shocking
.
"Such a US should stop preaching to China on human rights. The US and China have different
political focuses. What China seeks is the health, safety and happiness of its people
, while the US wants to see political rights orderly distributed among social elites in a
capitalist manner. The human rights outlooks held by China and the US are based on different
groups of people. Different rights are positioned in different places in the two countries.
As a result, China's human rights construction has brought tangible benefits to all
Chinese people, while the US human rights view is more suitable to be used to brag about and
as an ideological tool to launch attacks against others ." [My Emphasis]
Ex-mayor Boyd reminds me of the fictional character Frank played by Henry Fonda in Once
Upon a Time in the West , for whom any means can be used to gain the outcome. Such
characters were once very visible in movies made about the USA--the sociopathic killer always
aiming for A Fistful of A Few Dollars More where even the good guy was ugly. I couldn't agree
more with the editor's closing comment:
"Washington, please take care of your own people in the freeze and put an end to the
deaths caused by COVID-19 first thing first. We may not link these issues to human rights,
but this should be what 'America First' is all about."
The personification of Boyd passed away yesterday and is much to blame for the woefulness
of the USA's moral condition. Unfortunately, there are too many creatures like him, many of
which are in governments throughout the land.
"Why does the US use the winter storm as the excuse every time?" Shu Bin, director of the
State Grid Beijing Economics Research Institute, told the Global Times on Thursday, noting
that the power grid system is very vulnerable and requires constant maintenance and
upgrade.
A report from the US Department of Energy (DOE) in 2015 said that 70 percent of power
transformers in the country were 25 years or older, 60 percent of circuit breakers were 30
years or older, and 70 percent of transmission lines are 25 years or older. And the age of
these components "degrades their ability to withstand physical stresses and can result in
higher failure rates," the report noted.
[...]
"The US has no nationwide power grid network allocation plan like China. When it
encounters extreme weather, a state won't help another state like some Chinese provinces
and regions do with flexible allocation plans," Lin Boqiang, director of the China Center
for Energy Economics Research at Xiamen University, told the Global Times on Thursday.
[...]
"China uses 50Hz across the country, like the country has the same heartbeat," he said,
adding that China has never experienced such a scale of blackouts as the US.
[...]
China has mastered the top technologies such as "UHV transmission" and "flexible DC
transmission" and started the strategic "west-east electricity transmission" and
"north-south electricity transmission" projects, which in turn offer an opportunity for the
development of the country's western region.
Not as apocalyptic as it may seem. I wrote a comment on the situation in the earlier
thread
here .
Temps are starting to move up and tomorrow (Thursday) should begin the thaw. Friday is
sunny and 47 deg F for a high, then sunny weekend and following. So we're over the worst of
it. The lowest it ever got was around 0 deg F.
The infrastructure failed - the people paid to manage this failed - everybody is angry, 10
people died so far last I heard.
Rolling blackouts, some people very much suffering, townships opening warming shelters -
probably not millions of pipes bursting. Not totally iced in, just nowhere to go. People
stayed home. Businesses stayed closed. Not totally without food, people stocked up staples in
2020.
Not that dire. Absolutely fucking disgusting, and a hardship that touched everyone - some
people got really screwed and I don't know why the treatment was uneven like that - not
demographics, something with the grid. Dire, yes, and life-threatening to some or perhaps
many (numbers not clear to me yet), but not so dire as your picture suggests. Nothing like
Katrina, except the same ineptness.
But heads will roll. The governor has mandated an investigation into the regulator, ERCOT.
What follows next is of great interest. Facts will appear. I'll post anything useful.
I heard a rumor it was getting better. Could be less blackouts. Will post now in case
power goes off ;)
This Texas debacle may light a heated debate in the USA for the next weeks, for two
reasons:
1) Texas is the big alt-right/Trumpist Festung for the foreseeable future. Their
nation-building process involve catapulting Texas as the anti-California ,
the conservative version of the Shining City on the Hill, around which the USA will be
rebuilt;
2) What is happening in Texas right now goes directly to the heart of neoliberalism, which
is the political doctrine that vertebrates the alt-right. That's why conservative ideologues
such as Tucker Carlson et al are desperately scrambling on TV and social media to blame the
outage on the so-called Green New Deal.
What is happening right now in Texas, therefore, may be another episode on the battle for
the soul of the American Empire.
Chris Hedges, Just talkin' 'bout revolution [against the Borg? Chris can't quite bring
himself to name just who "they" are] on Jimmy Dore yesterday:
"These people...you know, quite literally, will kill us...not just us...I'm talking about
snuffing out the possibility of the next generation...my kids...and they have to be
stopped"
Astonishing lack of understanding of history, basic humanity and common sense.
It seems no one among the current group of "victors" has heard the phrase "win the battle but
lose the war."
With all the witch hunting and hate mongering going on, it also seems no one in authority has
heard "treat others as you would have them treat you."
Also applies to WEF Great Reset Masters of the Universe.
A huge amount of karma heading their way.
Fox News ' Tucker Carlson said on the
Thursday night episode of his program that his show has been targeted for cancellation.
Carlson said
that "in the last several weeks, and particularly in the last 24 hours, the call to take
this show off the air by groups funded -- for real -- by the Ford Foundation, or by George
Soros, by Michael Bloomberg, by Jeff Bezos, has become deafening, going after our advertisers,
going after the companies that carry our signal into your home."
What's more, he added, there has been a "cowardice and complicity" on behalf of the "entire
media class in all of this," suggesting that eventually, reporters at legacy news outlets will
be targeted as well.
Writing for Fox News' website, Carlson added that it may be part of a larger campaign to
silence Fox News and other media, noting that some legacy news outlets have dedicated resources
calling for the channel to be taken down. One columnist for The New York Times, he added, "has
written three separate columns demanding that someone yank this news channel off the air
immediately" and on Wednesday, "suggested that 'Tucker Carlson Tonight' was somehow guilty of
terrorism and violence, something that we've opposed consistently for four years."
"Fox is the last big organization in the American news media that differs in even the
smallest ways from the other big news organizations. At this point, everyone else in the media
is standing in crisp formation, in their starched matching uniforms and their little caps,
patiently awaiting orders from the billionaire class. And then there's Fox News off by itself,
occasionally saying things that are slightly different from everyone else," Carlson wrote
.
He added: "These are craven servants of the Democratic Party. They are feline, not canine.
All of their aggression is passive aggression."
Most to these so-called "jews" are NOT ACTUAL JEWS although they claim to be. Rather, they
superficially converted to Judaism about 1200 years ago, for political and financial
advantages. Think of them more like a criminal organization (Rothschild Khazarian Mafia)
which uses the terms "jew" and "anti-semitism" as Liability Shields: designed to
Deflect-Accountability and Evoke False-Trust and Sympathy with which to deceive the victims
of their Banking-Financial-$cams, War-Profiteering, Cultural-$ubversion, and other Massive
Cons.
This is why it's Important not to fall for their Primary Trap THEY RELY ON BEING
PERSECUTED so they can continue using their main go-to (anti-semitism) get out of jail free
card.
Wall Street killed the truth squad and protected the profits from job and investment
offshoring. This is what happens to elected officials when they attempt to represent the
general interest rather than the special interests that finance political campaigns. The
public interest is blocked off by a brick wall posted with a sign that says get compliant
with the Establishment or get out of politics.
As for the "direct collision course" re the EU and Russia, the collision course has been
imposed by the Master-oligarchy of U. S. on the hapless vassal EU.
Slobodan's "The Globalists" is a great look at Von Mises and Hayek peddling
NeoLiberalism to the last hereditary aristocracy standing in Europe in the interwar
years.
It's Slobodian, Quinn.
To my mind, this set up a deracinated pseudo-nazism
So you're on to something.
Hayek is the Grandfather of neoliberalism and the primary influence on Hayek's thought was
the Vienna of his youth: the go-go years after Franz Josef surrendered to the Hungarians,
created the dual monarchy, and there was the great cultural efflorescence of Vienna that
preceded the Austro-Hungarian empire's collapse.
Two ideologies emerged after WWI from Austria in reaction to the traumatic experience of
that collapse -- ideologies formulated by Austrians that then deeply damaged the rest of the
world.
Neoliberalism was one, of course. The other? Well, someone once asked Ernst Hanfstaengl
aka Putzi, Hitler's confidant, what caused Hitler's antiSemitism.
Hanfstaengl replied: 'Anyone who did not know Vienna before 1914 cannot understand.'
Hanfstaengl then explained that before WWI Vienna was full of beautiful people, the soldiers
in their uniforms, the Hapsburg Empire's citizens in their local traditional clothes etc and
'then these strange people came from the East all dressed in black and speaking a strange
kind of German'. These were the Orthodox Jews who came from Silesia, a part of the
Austro-Hungarian Empire. Kaiser Franz Josef had done much to emancipate and help the Jews, so
many crossed over to Vienna to start a new life.
Now, to further put Hitler and Nazism's policies in their historical context, it's
necessary to understand the situation in Germany prior to their appearance.
In 1871, Bismarck had nationalized healthcare, making it available to all Germans, then
provided old-age pensions as public social security. Child labor was abolished and public
schools were provided for all children. The Kaiser implemented worker protection laws in
1890. After WW I, the Social Democrats' influence had remained strong. Germany had an active
union membership. An official "Decree on Collective Agreements, Worker and Employees
Committees and the Settlement of Labor disputes" enabled collective bargaining, legal
enforcement of labor contracts as well as social security for disabled veterans, widows, and
dependents. In 1918, unemployment benefits were given to all German workers.
In the 1932 elections, the Nazi Party didn't have an outright majority. According to the
Nuremberg Trial transcripts, on January 4, 1933, German bankers and industrialists had a
secret backroom deal with then-Chancellor Von Papen to make Hitler the Chancellor of Germany
in a coalition.
"In February 1933, as Chancellor, Hitler met with the leading German industrialists at the
home of Hermann Goring. There were representatives from IG Farben, AG Siemens, BMW, coal
mining magnates, Theissen Corp, AG Krupp, and others bankers, investors, and other Germans
belonging to the top 1%. In this meeting, Hitler said, "Private enterprise cannot be
maintained in the age of democracy.'"
In 1934 the Nazis outlined their plan to revitalize the German economy with the
reprivatization of significant industries: railways, public works project, construction,
steel, and banking. Hitler guaranteed profits for the private sector; many American
industrialists and bankers flocked to Germany to invest.
The Nazis had a thorough plan for deregulation. The Nazi's chief economist stated," The
first thing German business needs is peace and quiet. It must have a feeling of absolute
legal security and must know that work and its return are guaranteed." Likewise, businesses
weren't to be hampered by too much "regulation." On May 2, 1933, Hitler sent his Brown Shirts
to all union headquarters. Union leaders were beaten, and sent to prison or concentration
camps. The Nazi party expropriated union funds -- money workers paid for union membership --
for itself.
On January 20, 1934, the Nazis passed the Law Regulating National Labor, abrogating the
power of the government to set minimum wages and working conditions. Employers lowered wages
and benefits. Workers were banned from striking or engaging in other collective bargaining
rights, and worked longer hours for lower wages. Their conditions so deteriorated that when
the head of the AFL visited Nazi Germany in 1938, he compared an average worker's life to
that of a slave. .
The Nazis also privatized medicine. One of Hitler's economists was the head of a private
insurance company. These private for-profit health insurance companies immediately started to
profit from Anti-Semitism. In 1934, they eliminated reimbursements for Jewish physicians,
which allowed them to profit further.
And so on.
Philip K. Dick once wrote a novel whose particular ontological riff was that the Roman
empire never really ended and in the 20th century people lived in an imposed illusion under
the same elite, or their heirs, that had headed the Roman empire.
That sort of science-fictional novel could be written based on our own reality, riffing on
the theme: The Nazis won.
I am curious as to why Prof. Hudson does not describe the holding of mortgages by
financial entities as de facto landlordism, even if it is decentralized and theoretically
time-limited (tho' not so with infinite re-fi and heloc).If the mortgage lenders are granted
the monopoly of literally creating a debt on a ledger, rather than it being a public utility,
and the benefits (read as: interest payments) accrue solely to those private entities, how is
that substantially different than hereditary land title and rent? I concede that at the end
of the lengthy mortgage term, the aristos cede the deed, but the parasitism is considerable,
often over the entire working life of a person or couple.
My whole point, which I hope I've stated repeatedly clearly enough, is that "Rent is for
paying interest." The financial class today has replaced the 19th-century's post-feudal
landlord class.
Loans are also taken out against financial assets such as stocks/bonds. Is that another
reason for propping up the stock market to the bizarre levels now seen?
Great stuff. While some of us are resistant to using money and debt to explain
everything , who can deny that this country has always been about money above all with
a not altogether insincere love of freedom on the side. Perhaps that latter is the source of
the "you're not the boss of me" approach to the rest of the world that Hudson talks
about.
Although I'm more text than video oriented, this time I watched the latter first instead
of reading the transcript. It was like sitting in a master class about the ongoing pernicious
influence of the American financial sector on our country's foreign policy since early in the
20th century. Even if you've already read the transcript you should watch the video as
well.
The IMF system was designed to impoverish debtors. The purpose of the IMF was to make other
countries so poor and dependent on the United States so they could never be militarily
independent. In the discussion of the British loan for instance, in the 1930s the discussion in
the London Economic Conference was, "Yes, we're bankrupting Europe, but if we give Europe
enough money to avoid austerity, they're just going to spend the money on the military." That
was said by the Americans in the State Department and the White House again and again,
especially by Raymond Moley who was basically in charge of President Roosevelt's foreign policy
towards Europe.
The question is: how do you create an international financial system designed to promote
prosperity, not austerity? The Bretton Woods is for austerity for everybody except the United
States, which will have a free ride forever. The question that I'm involved with in the work
I'm doing in China and with other countries is how to create a system based on prosperity
instead of austerity, with mutual support between creditors and debtors, without the kind of
financial antagonism that has been built in to the international financial system ever since
World War I. Financial reform involves tax reform as well: how do we end up taxing economic
rent instead of letting the rentiers take over society. That is what classical economics
is all about: how do we revive it?
Oscar Brisset
Final question: these austerity and anti-labor policies which the IMF imposes on countries
of the global South seem to be well known practices from before the IMF was created, from what
you've discussed. Did the IMF invent anything new? In addition, in the 19th century, was
predatory lending something common, or was direct invasion always the go-to method for
subjugating a territory?
Prof Hudson
The 19th century was really the golden age of industrial capitalism. Countries wanted to
invest to make a profit. They didn't want to invest in dismantling an existing industry,
because there wasn't much industry to dismantle. They wanted to make profit by creating
industry. There was a lot of investment in infrastructure, and it almost always lost money. For
instance, there was recently a criticism of China saying, "Doesn't China know that the Panama
Canal went bankrupt again and again, and that all the investments in canals and the railroads
all went broke again and again?" Of course China knows that. The idea is that you make
investment not to make a profit on basic large infrastructure. The 19th century was basically
inter-state lending, inter-governmental lending, public sector lending. That's where the money
was made. The late 20th century was one of financialization, dismantling the industry that was
already in place, not lending to create industry to make a profit. It's asset-stripping, not
profit-seeking
The United States of America is now a classic oligarchy. The clarity that it has brought to
our situation by recognizing this fact is its only virtue...
"Either the Constitution matters and must be followed . . . or it is simply a piece of
parchment on display at the National Archives."
- Texas v. Pennsylvania et al.
T exas v. Pennsylvania et al. did not deny setting rules for the 2020 election contrary to
the Constitution. On December 10, 2020, the Supreme Court
discounted that . By refusing to interfere as America's ruling oligarchy serves itself, the
court archived what remained of the American republic's system of equal justice. That much is
clear.
In 2021, the laws, customs, and habits of the heart that had defined the American republic
since the 18th century are things of the past. Americans' movements and interactions are under
strictures for which no one ever voted. Government disarticulated society by penalizing
ordinary social intercourse and precluding the rise of spontaneous opinion therefrom. Together
with corporate America, it smothers minds through the mass and social media with relentless,
pervasive, identical, and ever-evolving directives. In that way, these oligarchs have
proclaimed themselves the arbiters of truth, entitled and obliged to censor whoever disagrees
with them as systemically racist, adepts of conspiracy theories.
Corporations, and the government itself, require employees to attend meetings personally to
acknowledge their guilt. They solicit mutual accusations. While violent felons are released
from prison, anyone may be fired or otherwise have his life wrecked for questioning
government/corporate sentiment. Today's rulers don't try to convince. They demand obedience,
and they punish.
Russians and East Germans under Communists Leonid Brezhnev and Erich Honecker in the 1970s
lived under less ruling class pressure than do today's Americans. And their rulers were smart
enough not to insult them, their country, or their race.
In 2015, Americans could still believe they lived in a republic, in which life's rules flow
from the people through their representatives.
In 2021, a class of rulers draws their right to rule from self-declared experts' claims of
infallibility that dwarf baroque kings' pretensions. In that self-referential sense, the United
States of America is now a classic oligarchy.
The following explains how this change happened. The clarity that it has brought to our
predicament is its only virtue.
Oligarchy had long been growing within America's republican forms. The 2016 election posed
the choice of whether its rise should consolidate, or not. Consolidation was very much "in the
cards." But how that election and its aftermath led to the fast, thorough, revolution of
American life depended on how Donald Trump acted as the catalyst who clarified, energized, and
empowered our burgeoning oligarchy's peculiarities. These, along with the manner in which the
oligarchy seized power between November 2016 and November 2020, ensure that its reign will be
ruinous and likely short. The prospect that the republic's way of life may thrive among those
who wish it to depends on the manner in which they manage the civil conflict that is now
inevitable.
From Ruling Class to Oligarchy
By the 21st century's first decade, little but formality was left of the American republic.
In 1942, Joseph Schumpeter's Capitalism,
Socialism, and Democracy described the logic by which government and big business tend to
coalesce into socialism in theory, oligarchy in practice. But by then, that logic had already
imposed itself on the Western world. Italy's 1926 Law of Corporations -- fascism's charter --
inaugurated not so much the regulation of business by government as the coalescence of the
twain. Over the ensuing decade, it was more or less copied throughout the West.
In America, the 1890 Sherman Antitrust Act's authors had erected barriers against private
oligopolies and monopolies. By maintaining competition between big business, they hoped to
preserve private freedoms and limit government's role. But the Great Depression's pressures and
temptations led to the New Deal's rules that differed little from Italy's. No matter that, as
the Supreme Court pointed out in Schechter Poultry v. U.S . , public-private
amalgamation does not fit in the Constitution. It grew nevertheless alongside the notion that
good government proceeds from the experts' judgment rather than from the voters' choices. The
miracles of production that America brought forth in World War II seemed to validate the
point.
President Dwight D. Eisenhower, who had come to understand large organizations that feed on
government power and dispense vast private benefits, was not shy in warning about the danger
they pose to the republic. His warning about the " military-industrial
complex " that he knew so well is often misunderstood as a mere caution against militarism.
But Ike was making a broader point: Amalgams of public and private power tend to prioritize
their corporate interests over the country's.
That is why Eisenhower cautioned against the power of government-funded expertise. "The
prospect of domination of the nation's scholars by federal employment, project allocations, and
the power of money is ever-present and is gravely to be regarded," he said, because "public
policy could itself become the captive of a scientific-technological elite." Government money
can accredit a self-regarding elite. Because "a government contract becomes virtually a
substitute for intellectual curiosity," government experts can end up substituting their power
for truth.
The expansion of government power throughout the 1960s and '70s in pursuit of improving
education, eradicating poverty, and uplifting blacks created complexes of public-private power
throughout America that surpassed the military-industrial complex in size, and above all in
influence.
Consider education. Post-secondary education increased fourfold, from 9 percent of Americans
holding four-year degrees in 1965 to 36 percent in 2015. College towns became islands of wealth
and political power. From them came endless "studies" that purported to be arbiters of truth
and wisdom, as well as a growing class of graduates increasingly less educated but ever so much
more socio-politically uniform.
In the lower grades, per-pupil expenditure (in constant dollars) went from $3,200 in 1960 to
$13,400 in 2015. That money fueled an even more vast and powerful complex -- one that includes
book publishers, administrators, and labor unions and that has monopolized the minds of at
least two generations. As it grew, the education establishment also detached itself from the
voters' control: In the 1950s, there were some 83,000 public school districts in America. By
2015, only around 13,000 remained for a population twice as large. Today's parents have many
times less influence over their children's education than did their grandparents.
Analogous things happened in every field of life. Medicine came to be dominated by the
government's relationship with drug companies and hospital associations. When Americans went to
buy cars, or even light bulbs and shower nozzles, they found their choices limited by deals
between government, industry, and insurance companies. These entities regarded each other as
"stakeholders" in an oligarchic system. But they had ever less need to take account of mere
citizens in what was becoming a republic in name only. As the 20eth century was drawing to a
close, wherever citizens looked, they saw a government and government-empowered entities over
which they had ever less say, which ruled ever more unaccountably, and whose attitude toward
them was ever less friendly.
The formalities were the last to go. Ever since the signing of the Magna Carta in 1215 A.D.,
the rulers' dependence on popular assent to expenditures has been the essence of limited
government. Article I, section 9 of the U.S. Constitution enshrines that principle.
Congressional practice embodied it. Details of bills and expenditures were subject to public
hearings and votes in subcommittees, committees, and the floors of both Houses. But beginning
in the early 1980s and culminating in 2007, the U.S government abandoned the appropriations
process.
Until 1981, Congress had used "continuing resolutions" to continue funding government
operations unchanged until regular appropriations could be made. Thereafter, as congressional
leaders learned how easy it is to use this vehicle to avoid exposing what they are doing to
public scrutiny, they legislated and appropriated ever less in public, and increasingly put
Congress' output into continuing resolutions or omnibus bills, amounting to trillions of
dollars and thousands of pages, impossible for representatives and senators to read, and
presented to them as the only alternative to "shutting down the government." This -- now the
U.S government standard operating procedure -- enables the oligarchy's "stakeholders" to
negotiate their internal arrangements free from responsibility to citizens. It is the practical
abolition of Article I section 9 -- and of the Magna Carta itself.
In the 21st century, the American people's trust in government plummeted as they -- on the
political Left as well as on the Right -- realized that those in power care little for them. As
they watched corporate and non-profit officials trade places with public officials and
politicians while getting much richer, they felt impoverished and disempowered. Since the
ruling class embraced Republicans and Democrats, elections seemed irrelevant. The presidential
elections of 2008 and 2012 underlined that whoever won, the same people would be in charge and
that the parceling out of wealth and power among stakeholders would continue.
Americans on the Right were especially aggrieved because the oligarchy had become culturally
united in disdain for Western civilization in general and for themselves in particular. The
cultural warfare it waged on the rest of America inflamed opposition. But it also diluted its
own focus on solidifying profitable arrangements.
By 2016, America was already well into the classic cycles of revolution. The atrophy of
institutions, the waning of republican habits, and the increasing, reciprocal disrespect
between classes that have less in common culturally, dislike each other more, and embody ways
of life more different from one another, than did the 19th century's Northerners and
Southerners precluded returning to traditional republican life. The election would determine
whether the oligarchy could consolidate itself. More important, it would affect the speed by
which the revolutionary vortex would carry the country, and the amount of violence this would
involve.
The Trump Catalyst
By 2015, the right side of America's challenge to the budding oligarchy was inevitable.
Trump was not inevitable. Senator Ted Cruz (R-Texas) had begun posing a thorough challenge to
the "stakeholders" most Americans disrespected. Candidate Trump was the more gripping showman.
His popularity came from his willingness to disrespect them, loudly. Because the other 16
Republican candidates ran on different bases, none ever had a chance. Inevitably, victory in a
field so crowded depended on when which minor candidate did or did not withdraw. There never
was a head-to-head choice between Trump and Cruz.
Trump's candidacy drew the ferocious opposition it did primarily because the entire ruling
class recognized that, unlike McCain in 2008 and Romney in 2012, he really was mobilizing
millions of Americans against the arrangements by which the ruling class live, move, and have
their being. Since Cruz's candidacy represented the same threat, it almost certainly would have
drawn no less intense self-righteous anger. Nasty narratives could have been made up about him
out of whole cloth as easily as about Trump.
But Trump's actual peculiarities made it possible for the oligarchy to give the impression
that its campaign was about his person, his public flouting of conventional norms, rather than
about the preservation of their own power and wealth. The principal consequence of the ruling
class' opposition to candidate Trump was to convince itself, and then its followers, that
defeating him was so important that it legitimized, indeed dictated, setting aside all laws,
and truth itself.
Particular individuals had never been the oligarchy's worry. In 2008, as Barack Obama was
running against Hillary Clinton and John McCain -- far cries from Trump -- he pointed to those
Americans who "cling to God and guns" as the problem's root. Clinton's 2016 remark that Trump's
supporters were "a basket of deplorables," -- racists, sexists, homophobes, etc. -- merely
voiced what had long been the oligarchy's consensus judgment of most Americans. For them,
pushing these Americans as far away as possible from the levers of power, treating them as less
than citizens, had already come to define justice and right.
Donald Trump -- his bombastic, hyperbolic style, his tendency to play fast and loose with
truth, even to lie as he insulted his targets -- fit perfectly the oligarchy's image of his
supporters, and lent a color of legitimacy to the utterly illegitimate collusion between the
oligarchy's members in government and those in the Democratic Party running against Trump.
Thus did the FBI and CIA, in league with the major media and the Democratic Party, spy on
candidate Trump, concocting and spreading all manner of synthetic dirt about him. Nevertheless,
to universal surprise, he won, or rather the oligarchy lost, the 2016 election.
The oligarchy's disparate members had already set aside laws, truth, etc. in opposition to
Trump. The realization that the presidency's awesome powers now rested in his hands fostered a
full-court-press #Resistance. Trump's peculiarities helped make it far more successful than
anyone could have imagined.
"Dogs That Bark Do Not Bite"
Applying this observation to candidate Trump's hyperbole suggested that President Trump
might suffer from what Theodore Roosevelt called the most self-destructive of habits, combining
"the unbridled tongue with the unready hand." And, in fact, President Trump neither fired and
referred for prosecution James Comey or the other intelligence officials who had run the
surveillance of his campaign. He praised them, and let himself be persuaded to fire General
Michael Flynn, his national security advisor, who stood in the way of the intelligence
agencies' plans against him. Nor did he declassify and make public all the documents associated
with their illegalities.
Four years later, he left office with those documents still under seal. He criticized
officials over whom he had absolute power, notably CIA's Gina Haspel who likely committed a
crime spying on his candidacy, but left them in office. Days after his own inauguration, he
suffered the CIA's removal of clearances from one of his appointees because he was a critic of
the Agency. Any president worthy of his office would have fired the entire chain of officials
who had made that decision. Instead, he appointed to these agencies people loyal to them and
hostile to himself.
He acted similarly with other agencies. His first secretary of state, secretary of defense,
and national security advisor mocked him publicly. At their behest, in August 2017, he gave a
nationally televised speech in which he effectively thanked them for showing him that he had
been wrong in opposing ongoing war in the Middle East. He railed against Wall Street but left
untouched the tax code's "carried interest" provision that is the source of much unearned
wealth. He railed against the legal loophole that lets Google, Facebook, and Twitter censor
content without retribution, but did nothing to close it. Already by the end of January 2017,
it was clear that no one in Washington needed to fear Trump. By the time he left office,
Washington was laughing at him.
Nor did Trump protect his supporters. For example, he shared their resentment of being
ordered to attend workplace sessions about their "racism." But not until his last months in
office did he ban the practice within the federal government. Never did he ban contracts with
companies that require such sessions.
Thus, as the oligarchy set about negating the 2016 electorate's attempt to stop its
consolidation of power, Trump had assured them that they would neither be impeded as they did
so nor pay a price. Donald Trump is not responsible for the oligarchy's power. But he was
indispensable to it.
#TheResistance rallied every part of the ruling class to mutually supporting efforts.
Nothing encourages, amplifies, or seemingly justifies extreme sentiments as does being part of
a unanimous chorus, a crowd, a mob -- especially when all can be sure they are acting safely,
gratuitously. Success supercharges them. #TheResistance fostered the sense in the ruling class'
members that they are more right, more superior, and more entitled than they had ever imagined.
It made millions of people feel bigger and better about themselves than they ever
had.
Logic and Dysfunction
Disdain for the "deplorables" united and energized parts of American society that, apart
from their profitable material connections to government, have nothing in common and often have
diverging interests. That hate, that determination to feel superior to the "deplorables" by
treading upon them, is the "intersectionality," the glue that binds, say, Wall Street
coupon-clippers, folks in the media, officials of public service unions, gender studies
professors, all manner of administrators, radical feminists, race and ethnic activists, and so
on. #TheResistance grew by awakening these groups to the powers and privileges to which they
imagine their superior worth entitles them, to their hate for anyone who does not submit
preemptively.
Ruling-class judges sustained every bureaucratic act of opposition to the Trump
Administration. Thousands of identical voices in major media echoed every charge, every
insinuation, non-stop and unquestioned. #TheResistance made it ruling-class policy that Trump's
and his voters' racism and a host of other wrongdoing made them, personally, illegitimate. In
any confrontation, the ruling class deemed these presumed white supremacists in the wrong,
systemically. By 2018, the ruling class had effectively placed the "deplorables" outside the
protection of the laws. By 2020, they could be fired for a trifle, set upon in the streets,
prosecuted on suspicion of bad attitudes, and even for defending themselves.
Because each and every part of the ruling coalition's sense of what may assuage its
grievances evolves without natural limit, this logic is as insatiable as it is powerful. It is
also inherently destructive of oligarchy.
Enjoyment of power's material perquisites is classic oligarchy's defining purpose. Having
conquered power over the people, successful oligarchies foster environments in which they can
live in peace, productively. Oligarchy, like all regimes, cannot survive if it works at
cross-purposes. But the oligarchy that seized power in America between 2016 and 2020 is engaged
in a never-ending seizure of ever more power and the infliction of ever more punishment -- in a
war against the people without imaginable end. Clearly, that is contrary to what the Wall
Street magnates or the corps of bureaucrats or the university administrators or senior
professors want. But that is what the people want who wield the "intersectional" passions that
put the oligarchy in power.
As the oligarchy's every part, every organ, raged against everything Trump, it made itself
less attractive to the public even as Trump's various encouragements of economic activity were
contributing to palpable increases in prosperity.
Hence, by 2019's end, Trump was likely to win reelection. Then came COVID-19.
The
COVID Fortuna
The COVID-19 virus is no plague. Though quite contagious, its infection/fatality rate (IFR),
about 0.01 percent, is that of the average flu, and its effects are generally so mild that most
whom it infects never know it.
Like all infections, it is deadly to those weakened severely by other causes. It did not
transform American life by killing people, but by the fears about it that our oligarchy
packaged and purveyed. Fortuna , as Machiavelli reminds us, is inherently submissive to whoever
bends her to his wishes. The fears and the strictures they enabled were not about health -- if
only because those who purveyed and imposed them did not apply them to themselves. They were
about power over others.
COVID's politicization began in February 2020 with the adoption by the World Health
Organization -- which is headed by an Ethiopian bureaucrat beholden to China -- and upon
recommendation of non-scientist Bill Gates, of a non-peer-reviewed test for the infection. The
test's chief characteristic is that its rate of positives to negatives depends on the number of
cycles through which the sample is run. More cycles, more positives. Hence, every test result
is a "soft" number. Second, the WHO and associated national organizations like the U.S. Centers
for Disease Control reported COVID's spread by another "soft" number: "confirmed cases." That
is, sick persons who tested positive for the virus.
When this number is related to that of such persons who then die, the ratio -- somewhat
north of 5 percent -- suggests that COVID kills one out of 20 people it touches. But that is an
even softer number since these deaths include those who die with COVID rather than of it, as
well as those who may have had COVID. Pyramiding such soft numbers, mathematical modelers
projected millions of deaths. Scary for the unwary, but pure fantasy.
For example, the U.S. Institute for Health Metrics and Evaluation (IHME), which modeled the
authoritative predictions on which the U.S. lockdowns were based, also predicted COVID-19
deaths for Sweden, which did not lock down. On May 3, the IHME predicted that Sweden would
suffer 2,800 COVID deaths a day within the next two weeks. The actual number was 38. Reporting
on COVID has never ceased to consist of numbers as scary as they are soft.
Literate persons know that, once an infectious disease enters a population, nothing can
prevent it from infecting all of it, until a majority has developed antibodies after
contracting it -- so-called community immunity or herd immunity. But fear leads people to
empower those who promise safety, regardless of how empty the promises. The media pressed
governments to do something . The Wall Street Journal's Peggy Noonan screamed: "don't panic is
terrible advice." The pharmaceutical industry and its Wall Street backers salivated at the
prospect of billions of government money for new drugs and vaccines. Never mind the little
sense it makes for millions of people to accept a vaccine's non-trivial risk to protect against
a virus with trivial consequences for themselves. All manner of officials yearned to wield
unaccountable power.
Because the power to crush the general population's resistance to itself is the oligarchy's
single-minded focus, it was able to bend fears of COVID to that purpose. Thus, it gathered more
power with more consequences than the oligarchs could have imagined.
But only President Trump's complaisance made this possible. His message to the American
people had been not to panic, be mindful of the scientific facts -- you can't stop it, and it's
not that bad -- while mitigating its effects on vulnerable populations. But on March 15, Trump
bent, and agreed to counsel people to suspend normal life for two weeks to "slow the spread,"
so that hospitals would not be overwhelmed. Two weeks later, the New York Times crowed that
Trump, having been told "hundreds of thousands of Americans could face death if the country
reopened too soon," had been stampeded into "abandoning his goal of reopening the country by
Easter." He agreed to support the "experts'" definition of what "soon" might mean. By
accrediting the complex of government, industry, and media's good faith and expertise, Trump
validated their plans to use COVID as a vehicle for enhancing their power.
Having seized powers, the oligarchs used them as weapons to disrupt and disaggregate the
parts of American society they could not control.
The economic effects of lockdowns and social distancing caused obvious pain. Tens of
millions of small businesses were forced to close or radically to reduce activity. More than 40
million Americans filed claims for unemployment assistance. Uncountable millions of farmers and
professionals had their products and activities devalued. Millions of careers, dreams that had
been realized by lifetimes of work, were wrecked. Big business and government took over their
functions. Within nine months, COVID-19 had produced 28 new billionaires .
Surplus and scarcity of food resulted simultaneously because the lockdowns closed most
restaurants and hotels. As demand shifted in ways that made it impossible for distribution
networks and processing plants to adjust seamlessly, millions of gallons of milk were poured
down drains, millions of chickens, billions of eggs, and tens of thousands of hogs and cattle
were destroyed, acres of vegetables and tons of fruit were plowed under. Prices in the markets
rose. Persons deprived of work with less money with which to pay higher prices struggled to
feed their families. This reduced countless self-supporting citizens to supplicants. By
intentionally reducing the supply of food available to the population, the U.S. government
joined the rare ranks of such as Stalin's Soviet Union and Castro's Cuba.
But none of these had ever shut down a whole nation's entire medical care except for one
disease. Hospitals stood nearly empty, having cleared the decks for the (ignorantly) expected
COVID flood. Emergency rooms were closed to the poor people who get routine care there. Forget
about dentistry. Most Americans were left essentially without medical care for most of a year.
Human bodies' troubles not having taken a corresponding holiday, it is impossible to estimate
how much suffering and death this lack of medical care has caused and will cause yet.
The oligarchy's division of all activity into "essential" -- meaning permitted -- and
"nonessential" -- to be throttled at will -- had less obvious but more destructive effects.
Private clubs, as well as any and all gatherings of more than five or 10 people, were banned.
Churches were forbidden to have worship services or to continue social activities. The "social
distancing" and mask mandates enforced in public buildings and stores, and often on the
streets, made it well-nigh impossible for people to communicate casually. Thus, was that part
of American society that the oligarchy did not control directly disarticulated, and its members
left alone to face unaccountable powers on which they had to depend.
Meanwhile, the media became the oligarchy's public relations department. Very much including
ordinary commercial advertising, it hammered home the oligarchy's line that COVID restrictions
are good, even cool. These restrictions reduced the ideas available to the American people to
what the mass media purveyed and the social media allowed. Already by April 2020, these used
what had become near-monopoly power over interpersonal communications to censor such
communications as they disapproved. Political enforcers took it upon themselves even to cancel
statements by eminent physicians about COVID that they judged to be "misleading." Of course,
this betrayed the tech giants' initial promise of universal access. It is also
unconstitutional. (In Marsh v. Alabama , decided in 1946, the
Supreme Court barred private parties from acting as de facto governments). Since these
companies did it in unison, they also violated the 1890 Sherman Antitrust Act. But the ruling
class that had become an oligarchy applauded their disabling whatever might be conducive to
conservatives' interests and inconvenient to their own candidates.
Private entities wielding public powers in coordination with each other without having to
observe any of government's constitutional constraints is as good a definition of oligarchy as
there is. Oligarchy had increasingly taken power in the buildup to the 2020 election. In its
aftermath, it would try to suffocate America.
Sovereignty of the Vote Counters
The oligarchy's proximate objective, preventing the 2020 presidential election from
validating the previous one's results, overrode all others. The powers it had seized under
COVID's cover, added to the plethora that it had exercised since the 2016 campaign's beginning,
had surely cowered some opposition. But as November 2020 loomed, no one could be sure how much
it also had energized.
Few people were happy to be locked down. It was a safe bet that not a few were unhappy at
being called systemically racist. The oligarchy, its powers notwithstanding, could not be sure
how people would vote. That is why it acted to take the presidential election's outcome out of
the hands of those who would cast the votes and to place it as much as possible in the hands of
its members who would count the votes.
Intentionally, traditional procedures for voting leave no discretion to those who count the
votes. Individuals obtain and cast ballots into a physical or electronic box only after showing
identification that matches their registration. Ballot boxes are opened and their contents
counted by persons representing the election's opposing parties. Persons registered to vote
might qualify to vote-by-mail by requesting a ballot, the issuance and receipt of which is
checked against their registration. Their ballots are counted in the same bipartisan
manner.
The Democratic Party had long pressed to substitute universal voting by mail -- meaning that
ballots would be sent to all registered voters, in some states to anyone with a driver's
license whether they asked for them or not and regardless of whether these persons still lived
at the address on the rolls or were even alive. The ballots eventually would arrive at the
counting centers, either through the mail, from drop boxes, or through "harvesters" who would
pick them up from the voters who fill them out, and who may even help them to fill them out.
Security, if any, would consist of machine-matching signatures on the ballot and on the
envelope in which it had come. The machine's software can be dialed to greater or lesser
sensitivity.
But doing away with scrutiny of ballots counted by representatives of the election's
contenders removes the last possibility of ensuring the ballot had come from a real person
whose will it is supposed to represent. Once the link between the ballot and the qualified
person is broken, nothing prevents those in charge of the electoral process from excluding and
including masses of ballots as they choose. The counters become the arbiters.
Attorney General William Barr pointed out the obvious: Anyone, in America or abroad, can
print up any number of ballots, mark them, and deliver them for counting to whoever is willing
to accept them and run them through their machines. Since the counters usually dispose of the
envelopes in which ballots arrive -- thus obviating any possibility of tracing the ballot's
connection to a voter -- they may even dispense of the fiction that there had ever been any
signed envelopes. That is especially true of late-found ballots. Who knows where they came
from? Who cares to find out?
Only in a few one-party Democratic states was universal vote-by-mail established by law.
Elsewhere, especially in the states sure to be battlegrounds in the presidential election,
mail-in voting was introduced by various kinds of executive or judicial actions. Questions of
right and wrong aside, the Constitution's Article II section 1's words -- "Each State shall
appoint, in such Manner as the Legislature thereof may direct " -- makes such actions
unconstitutional on their face. Moreover, in these states -- Georgia, Pennsylvania, Michigan,
and Wisconsin -- the counting of votes in the most populous counties is firmly in the hands of
Democratic Party bosses with a well-documented history of fraud.
To no one's surprise, the 2020 presidential election was decided by super-majorities for the
Democratic candidate precisely from these counties in these states. Yes, Trump's percentage of
the vote fell in certain suburbs. But Trump received some 11 million more votes in 2020 than
four years earlier, and nearly doubled the share of votes he received from blacks. The
Democrats' gain of some 15 million votes came exclusively from mail-in ballots, and their
victory in the Electoral College came exclusively from the supermajorities piled up in these
corrupt counties -- the only places where Trump's share of the black vote was cut by
three-quarters. Did people there really think so differently?
This is not the place to recount the list of affidavits sworn under penalty of perjury by
persons who observed ballot stuffing, nor the statistical anomaly of successive batches of
votes that favored Biden over Trump by precisely the same amounts, of un-creased (i.e., never
mailed) ballots fed into counting machines, nor the Georgia video of suitcases of ballots being
taken from under tables and inserted into counting machines after Republican observers had been
ousted. Suffice it to note that references to these events have been scrubbed from the
Internet. It is more important to keep in mind that, in America prior to 2020, sworn affidavits
that crimes have been committed had invariably been probable cause for judicial, prosecutorial,
or legislative investigations. But for the first time in America, the ruling class dismissed
them with: "You have no proof!" A judge (the sister of Georgia's Stacey Abrams) ruled that even
when someone tells the U.S. Postal Service they have moved, their old address is still a lawful
basis for them to cast a ballot. Certainly, proof of crime is impossible with such judges and
without testimony under oath, or powers of subpoena.
Just as important, Republicans in general and the Trump White House in particular bear heavy
responsibility for failing to challenge the patent illegality of the executive actions and
consent decrees that enabled inherently insecure mail-in procedures in real-time, as they were
being perpetrated in key states. No facts were at issue. Only law. The constitutional
violations were undeniable.
Pennsylvania et. al. answered Texas's late lawsuit by arguing it demanded the invalidation
of votes that had been cast in good faith. True. But Texas argued that letting stand the
results of an election carried out contrary to the Constitution devalued the votes cast in
states such as Texas that had held the election in a constitutional manner. Also true. Without
comment, the Supreme Court chose to privilege the set of voters on the oligarchy's side over
those of their opponents. Had the lawsuit come well before the election, no such choice would
have existed. Typically, the Trump Administration substituted bluster for action.
The
Oligarchy Rides its Tigers
Winning the 2020 election had been the objective behind which the oligarchy had coalesced
during the previous five years. In 2021, waging socio-political war on the rest of America is
what the oligarchy is all about.
The logic of hate and disdain of ordinary Americans is not only what binds the oligarchy
together. It is the only substitute it has for any moral-ethical-intellectual point of
reference. Donald Trump's impotent, inglorious reaction to his defeat offered irresistible
temptations to the oligarchy's several sectors to celebrate victory by vying to hurt whoever
had supported the president. But permanent war against some 74 million fellow citizens is a
foredoomed approach to governing.
The Democratic Party had promised a return to some kind of "normalcy." Instead, its victory
enabled the oligarchy's several parts to redefine the people who do not show them due deference
as "white supremacists," "insurrectionists," and Nazis -- in short, as some kind of criminals
-- to exclude them from common platforms of communication, from the banking system, and perhaps
even from air travel; and to set law enforcement to surveil them in order to find bases for
prosecuting them. Neither Congress nor any state's legislature legislated any of this. Rather,
the several parts of America's economic, cultural, and political establishment are waging this
war, uncoordinated but well-nigh unanimously.
Perhaps most important, they do so without thought of how a war against at least some 74
million fellow citizens might end. The people in the oligarchy's corporate components seem to
want only to adorn unchallenged power with a reputation for "wokeness." For them, causing pain
to their opponents is a pleasure incidental to enjoying power's perquisites. The Biden family's
self-enrichment by renting access to influence is this oligarchy's standard.
But the people who dispense that reputation -- not just the professional revolutionaries of
Antifa and Black Lives Matter, but "mainstream" racial and gender activists and self-appointed
virtue-crats, have appetites as variable as they are insatiable. For them, rubbing conservative
America's faces in excrement is what it's all about. A Twitter video viewed by 2.6 million
people urges them to form "an army of citizen detectives" to ferret out conservatives from
among teachers, doctors, police officers, and "report them to the authorities." No doubt,
encouraged by President Biden's characterization of opponents as "domestic terrorists," any
number of "authorities" as well as private persons will find opportunities to lord it over
persons not to their taste. This guarantees endless clashes, and spiraling violence.
Joseph Biden, Kamala Harris, and the people they appoint to positions of official
responsibility are apparatchiks, habituated to currying favor and pulling rank. They have
neither the inclination nor the capacity to persuade the oligarchy's several parts to agree to
a common good or at least to a modus vivendi among themselves, never mind with conservative
America. This guarantees that they will ride tigers that they won't even try to dismount.
At this moment, the oligarchy wields an awesome complex of official and unofficial powers to
exclude whomever it chooses from society's mainstream. Necessarily, however, exclusions cut
both ways. Invariably, to banish another is to banish one's self as well. Google, Facebook, and
Twitter let it be known that they would exclude anything with which they disagree from what had
become the near-universal means of communication. They bolstered that by colluding to destroy
their competitor, Parler. Did they imagine that 74 million Americans could find no means of
communicating otherwise? Simon and Schuster canceled a book by Senator Josh Hawley (R-Mo.)
critical of communications monopolies. Did its officials imagine that they would thereby do
other than increase the book's eventual sales, and transfer some of their customers to Hawley's
new publisher ? The media effectively suppressed inconvenient news. Did they imagine that
this would prevent photos of Black Lives Matter professionals in the forefront of the January 6
assault on the U.S. Capitol from reaching the public?
In sum, intending to relegate conservative America to society's servile sidelines, the
oligarchy's members drew a clear, sharp line between themselves and that America. By telling
conservative Americans "these institutions and corporations, are ours, not yours," they freed
conservative America of moral obligations toward them and themselves. By abandoning
conservative America, they oblige conservative America to abandon them and seek its own
way.
Clarity, Leadership, and Separation
To think of conservative America's predicament as an opportunity is as hyperbolic as it was
for Machiavelli to begin the conclusion of The Prince by observing that "in order to know
Moses' virtue it was necessary that the people of Israel be slaves in Egypt, and to know the
greatness of Cyrus's spirit that the Persians be oppressed by the Medes, and to know the
excellence of Theseus, that the Athenian people be dispersed, so at the present, in order to
know the virtue of an Italian spirit it was necessary that Italy reduce herself to the
conditions in which she is at present . . ."
Machiavelli's lesson is that the clarity of situations such as he mentions, and such as is
conservative America's following the 2020 election, is itself valuable. Clarity makes illusions
of compromise untenable and points to self-reliant action as the only reasonable path. The
people might or might not be, as he wrote, "all ready and disposed to follow the flag if only
someone were to pick it up." But surely, someone picking up the flag is the only alternative to
servitude.
What, in conservative America's current predicament, might it mean to "pick up the flag?"
Electoral politics remains open to talented, courageous, ambitious leadership. In Florida and
South Dakota, Governors Ron DeSantis and Kristi Noem have used their powers to make room for
ways of life different from and more attractive than that in places wholly dominated by the
oligarchy. Texas and Idaho as well attract refugees from such as California and New York by
virtue of such differences with life there as their elected officials have been able to
maintain. Governmental and corporate pressures on such states to conform to the oligarchy's
standards, sure to increase, are opportunities for their officials to lead their people's
refusal to conform by explaining why doing this is good, and by personally standing in the way.
They may be sure that President Kamala Harris would not order federal troops to shoot at state
officials for closing abortion clinics or for excluding men from women's bathrooms.
For more than a generation, a majority of Americans have expressed growing distrust of, and
alienation from, the establishment. The establishment, not Donald Trump, made this happen. That
disparate majority, in many ways at cross purposes with itself, demands leadership. Pollster
Patrick Caddell's in-depth study of the American electorate, which he titled "We Need Smith," showed how the themes that
made it possible for the hero of the 1939 movie "Mr. Smith Goes to Washington" to prevail
against the establishment then are even more gripping now and appeal to a bigger majority.
Trump was a bad copy of Mr. Smith.
More than ever, an audience beyond the 74 million Americans who voted for Trump hungers for
leadership. The oligarchy came together by ever more vigorously denigrating and suppressing
these deplorables. Already before the 20th century's turn, the FBI and some elements in the
Army and the Justice Department had concluded that they are somehow criminal, and that
preparations should be made to treat them as such. The official position of the administration
taking power after the 2020 election is that domestic terrorism from legions of "white
supremacists" is the primary threat facing America. No wonder those so designated for outlawry
demand protection.
The path to electoral leadership is straightforward. Whoever would lead the deplorables-plus
must explain their cause to friend and foe, make it his own, and grow it by leading successful
acts of resistance.
Increasingly, conservative Americans live as if under occupation by a hostile power. Whoever
would lead them should emulate Charles de Gaulle's 1941 basic rule for la résistance :
refrain from individual or spontaneous acts or expressions that produce only martyrs. But join
with thousands in what amount to battles to defeat the enemy's initiatives, weaken his grip on
power, and prepare his defeat. Thus, an aspirant to the presidency in 2024, in the course of
debunking the narrative by which the oligarchy seized so much power over America, might lead
millions to violate restrictions placed on those who refuse to wear masks. Or, as he pursues
legislative and judicial measures to abolish the compulsory racial and gender sensitivity
training sessions to which public and private employees are subjected, he might organize
employees in a given sector unanimously to stay away from them in protest. They can't all be
fired or held back.
Such a persuasive prospective president, or president, could finish the process that,
beginning circa 2010, initiated the process of reshaping the Republican Party into something
like Caddell's Mr. Smith would have personified.
Electoral politics, however, is the easy part. Major corporations, private and semi-private
institutions such as schools, publishing houses, and media, are the oligarchy's deepest
foundations. These having become hostile, conservative Americans have no choice but to populate
their own. This is far from impossible.
Sorting ourselves out into congenial groups has been part of America's DNA since 1630, when
Roger Williams led his followers out of Massachusetts to found Providence Plantations. In the
19th century, the Mormons left unfriendly environments to establish their own settlements.
Since 1973, Americans who believe in unborn children's humanity have largely ceased to
intermarry with those who do not. Nobody decided this should happen. It is in the logic of
diverging cultures.
As American primary and secondary education's dysfunction became painfully apparent, parents
of all races have fled the public schools as fast as they could. Businesses have been fleeing
the Rust Belt for the Sun Belt for generations. When Democratic governors and mayors used COVID
to make life difficult in their jurisdictions, people moved out of them. When Twitter's
censorship of conservatives became undeniable, Parler added customers by the hundreds of
thousands each day. Facebook and Twitter's stock lost $50 billion in a week. Much more
separation follows from the American people's diverging cultures.
As conservative America sorts itself out from oligarchy's social bases, it may be able to
restore something like what had existed under the republic. Effectively, two regimes would have
to learn to coexist within our present boundaries. But that may be the best, freest,
arrangement possible now for the United States.
The thing to really wonder about is how society is changing and what that means for
financial markets. After all, it's the madness of crowds, sentiment and human behaviours that
drive market prices. Modern communications via immediate 24/7 news, social media, the ease and
gamification of trading, and the influences of inputs such as Reddit and Fake News are changing
the way markets function. It was revealing how quickly a loose internet shock-flock of aligned
retail investors swiped the market this week.
Their anger at the financial machine was palpable. They demonstrate a fundamental change at
the heart of market capitalism.
The basis of " shareholder capitalism " was best summed up by Gordon Gecko: "Greed is Good"
. It was utterly corrupting. Anything to improve returns to the owners, the shareholders, was
apparently justified. It was justified by the belief free markets would achieve an equilibrium
where shareholders would make optimal profits by providing maximum utility to their
customers.
Just like communism, it didn't quite work out the way the economists and sociologists
predicted. Everyone talks a good talk about fair shares of the cake, but try a simple
experiment and ask you kids to divide it. Everyone wants a bigger slice. (My father's solution
was simple: whoever cuts the cake chooses last.)
In reality nothing is really fair. Inequality is a driver of the human condition. Companies
cut corners to improve their share of the cake - often the management sneak in and take the
rewards, cutting out shareholders and customers. To make profits big corporates will compromise
what they can: safety, the environment, law and justice – everything from poisoning the
planet, unsafe aircraft, or bursting dams. Costs were seen as externalities addressed through
insurance, or hiring the best lawyers.
Its no wonder we now have kickback against it, and a new mantra of "stakeholder" capitalism
trying to ensure we all get that fairer slice of the pie.
Every single big investor now swears by their strict adoption of the principals and
importance of Corporate Social Responsibility (CSR), Environment, Social and Governance (ESG)
investment, and Sustainability. (I have serious concerns these valid and laudable goals have
been diminished into mere tickbox investing by corporate bureaucracy.)
Yet for all the noise and stakeholders sharing the pie, we are still seeing the steepest
ever transfer of wealth from the poor to the rich. Income inequality is rising. Across the
Occidental Western economies the poor have become desperately poor. Witness the growth in
Foodbanks in Europe and the US and the success of Marcus Rashford in addressing the appalling
reality of kids arriving in school unfed, penalising their life chances from the get-go.
And it's not just the poorest in society. The middle classes have also been hollowed out by
the difficulties of stretching static incomes to cover every rising living costs, and
TAXES.
Oh yes these two great certainties in life; death and taxes. Except . If you are rich enough
..
As we've seen the concept of Shareholder capitalism stopped delivering anything much to any
but the wealthiest. Since 2008, and particularly since the outbreak of the Covid Pandemic,
we've seen the bulk of QE money creation and government stimulus work its way into financial
assets, with the effect of driving up the price of stocks. As I wrote a few weeks ago a rough
number is that $3 trillion out of $5 trillion subsidy money in the US has gone into the pockets
of the richest in society through the inflation of their financial assets.
Try and explain how that has worked – will immediately get you branded a communist.
But it's really simple. Stocks go up because bond yields are so low – and bond yields are
so low because its policy. How to correct it?
This is why Taxes are really interesting.
If you look at the new generation of the uber-wealthy Tech barons, and the last US
President, they all share a common theme – the belief that minimising tax payments is a
signal of entrepreneurial genius. However, the reality, at the end of the day, is tax
optimisation through complex tax structures is pretty much the same as tax evasion.
Ask any right of centre American what raising taxes would do to the economy – and they
will immediately counter it's the success of tax cuts that's driven growth and markets. Tax
cuts/handouts to the rich are credited as the singular success of the last White House
administration – creating thousands of low-paid jobs across the states. If you were to
tax the rich they wouldn't invest their money in job creation, and there would be no trickle
down to the poor. Even questioning the efficacy of tax burdens on the rich could apparently
shake the edifice of US shareholder capitalism to the ground.
The thing is.. we might not actually need taxes at all. If central banks can create
limitless money with zero consequences, then why does anyone have to pay taxes? Let the rich
keep it all and we can print more money to keep the poor happy.
But Taxes have an important role in society. They are a fee members of society pay to be
part of it – you work in order to pay the taxes that allow you membership of society. The
more you pay, the greater your contribution – the more society should value you. You want
the benefits of society, then be willing to pay for it.
In an ideal world we would laud billionaires for their hard work, effort, and paying the
bulk of their earnings in taxes to raise the up rest of us. Instead, they impress their equals
by avoiding taxes, while the rest of us increasingly resent their conspicuous wealth –
earned off our backs which is very much how anyone under 30 working hard to save a deposit for
a rabbit-hutch flat they can never afford increasingly feels about the world.
We are only now beginning to questioning tax equality and tax evasion. The papers will make
some righteous noise about the dislikeable high-street retailer who has emptied the company
pension fund to finance his yachts in a tax-haven, or it might expose a singer who has not paid
a penny in tax. We almost feel sympathy for the entertainer whose stellar career ends up on the
skids because they can't meet a tax-demand.
We regard the Inland Revenue as the ultimate baddie for harassing us to pay our modest
amounts of tax – it's easy for them to go after little people. If they try to catch the
big tax-avoiders they face a battery of lawyers and accountants and deliberately complex webs
to be unravelled.
In short, the rich get away with not paying Tax while poor get harassed and get poorer.
Inequality rises.
And this where we return to Norges Bank and why their decision to act on bad tax players is
so critical.
NBIM own 1.5% of the global stock market, with stakes in over 9ooo companies. They've not
named the seven stocks they dumped – there is no blacklist, it says – but clearly
it should set every CFO thinking about their tax transparency – including paying tax
where value creation takes place. That's a clear shot across the bows for any of the big tech
firms currently selling stuff over the internet, delivering it your front door and booking all
the revenues somewhere low tax, and repatriating profits via somewhere that's agreed a
zero-taxes deal in exchange for opening a HQ office.
Some of the most valuable firms on the planet have the least transparent tax policies. Just
saying but there is a fascinating article in the Garuniad y'day: "Inside
the mind of Jeff Bezos". It reports Jeff (till recently the richest guy on the planet)
saying: " the only way I can see to deploy this much financial resource is by converting my
Amazon winnings into space travel ."
Personally, I would love to mine asteroids, but Bezos could probably ensure every child on
the planet has access to clean water, or cure cancer and have statues to himself erected across
the planet proclaiming what a wonderful philanthropic champion.
Or he and every single other billionaire could just pay taxes, thankful for the
opportunities they had to realise their dreams building their companies, while making society
better. I'm not saying take every penny – but let's be realistic who can spend a couple
of billion dollars? Even the first Mrs Blain would have struggled with that one (although I
suspect young Ms Blain could make a significant dent )
I know exactly what posts will be made on this website and Zerohedge on this article. I will
be screamed at for being a socialist. Some libertarian idiot will call himself "John Galt" and
declare a belief that helping others is weakness. Not interested. The only way we make the
world better as politicians keep reminding us – is to remember we are in this together,
on a very small planet. [ZH: 'fair and balanced' - everyone deserves to speak their mind and be
heard.]
High taxation economies – like the Scandinavians – tend to be fairly happy
places. Entrepreneurs live well and are held in high regard. Their taxes fund social provision,
health and education that are the envy of the rest of us.
In low tax countries the wealth creators live in bunker complexes protected by guards while
the masses eke out their miserable crusts .
On Thursday afternoon President Biden gave a much anticipated and wide-ranging speech laying
out his foreign policy agenda during a visit to the State Department. As expected much of it
was a repudiation of Trump's "America First" vision - though without mentioning Donald Trump by
name. His address to State Department diplomats and staff was centered around the theme of his
words: "America is back. Diplomacy is back at the center of our foreign policy."
Alarming for anyone who has called for an end to the vision which sees Washington as
essentially acting the like to 'global police force' - which unfortunately became a
(disastrous) reality starting in the Bush years and under the neocons, Biden vowed that as
commander-in-chief he would "defend democracy globally" .
He urged for the US to rebuild "the muscles of democratic alliances that have atrophied from
four years of neglect and abuse." He emphasized that "We can't do it alone."
Of course, the big question is what will that look like, with many expecting a return to the
kind of 'humanitarian interventionism' abroad and liberal internationalism that defined the
Obama years . This often took the form of covert wars (with the foremost example being Syria)
and military interventions under the guise international coalitions (such as NATO's war on
Libya) aimed at regime change.
"We must meet this new moment of accelerating global challenges – from a pandemic to
the climate crisis to nuclear proliferation – that will only be solved by nations working
together in common cause," Biden said in the afternoon address. "That must start with
diplomacy, rooted in America's most cherished democratic values: defending freedom, championing
opportunity, upholding universal rights, respecting the rule of law, treating every person with
dignity."
Here are some of the highlights and significant foreign policy changes in US posture...
Russia
Biden said that "we will not hesitate to raise the costs on Russia." At a moment Russian
opposition leaders are lobbying Washington for the targeted use of Magnitsky sanctions on
Putin's inner circle, Biden actually mentioned the imprisoned opposition activist Alexey
Navalny by name.
He called on the Kremlin to release Navalny "immediately and without condition" while
expressing that authorities had targeted him for "exposing corruption" of Putin and top Kremlin
leadership. And
further :
He said that he "made it clear to President Putin, in a manner very different from my
predecessor, that the days the United States rolling over in the face of Russia's aggressive
action" – pointing to cyber attacks from the SolarWinds breach and the poisoning of
opposition figure Alexei Navalny – "are over."
It is a general rule that corrupt economies tend to operate on faith and not on
fundamentals. And to be clear, it's not so much about naive faith that the system is stable or
functional. No, it's more about the masses having faith that the corruption and instability
will never be derailed. Most people are not as stupid as the establishment and central bankers
think they are – Almost everyone knows the system is broken, they just refuse to consider
the possibility that the fraud will be disrupted, or that it will be allowed to fail.
The old mantra "too big to fail" is a lie. NOTHING is too big to fail, and that includes the
US economy, the dollar and the elaborate Kabuki theater that keeps them both afloat. All it
takes is a single moment, an epiphany that the Ponzi scheme is unsustainable rather than
unstoppable.
I'm reminded specifically of the inflationary crisis of Argentina in 2001 – 2002.
Argentina's economy was highly dependent on foreign capital inflows, and its currency peg to
the US dollar, not to mention they were precariously reliant on support from the IMF. The IMF
openly validated the government of Argentina and their currency peg model, but foreign capital
began to decline and the peg became unsustainable. Without tangible growth in manufacturing and
a strong middle class, an economy cannot survive for long. A top down system based on illusory
"financial products" and creative accounting is doomed to crash eventually.
All it took was for the IMF to criticize the policies they initially endorsed and announced
that they were removing financial aid, and all hell broke loose in Argentina.
Almost overnight the Argentina peso plunged in value, interest rates spiked and inflation
struck hard. People poured into the streets and civil unrest erupted. The IMF would later
admit it made "errors" in its handling of the Argentina situation, but this was simply spin
control designed to protect them from further scrutiny. The IMF avoided most of the blame and
has been growing into a monstrous global centralization machine ever since.
I think we are witnessing the beginning of a similar end of mass faith in fraud in the US.
The recent Robinhood short squeeze event as well as the current decoupling of physical silver
prices from the paper ETF market have accelerated the timetable. Not surprisingly, these moves
have forced the establishment to intervene to some extent to essentially stop renegade traders
from freely investing. Accusations are flying and deplatforming has ensued. The idea that the
system is a functional fraud is gone; The world now knows it is a dysfunctional fraud, and
collapse cannot be very far behind.
Furthermore the collusion between banks, hedge funds and Big Tech is blatantly revealed.
These relationships are supposed to remain hidden in the ether. They are obvious to anyone with
any financial knowledge and sense, but they aren't supposed to be wielded in the open.
Conspirators aren't supposed to admit to the conspiracy? Right?
Some people might say the establishment has been forced to unmask by activists. Maybe. But,
as I have been warning for many years, when criminals start openly admitting to their crimes it
is probably because they think that it's too late for anyone to do anything about it.
The point is, bankers and globalists have ways of avoiding responsibility for the disasters
they engineer. When the con-game breaks, they always have patsies to take the fall.
This sets up a bizarre dynamic in which the money elites that constructed the economy like a
time-bomb are treated like victims (or heroes) and the people telling the truth about the fraud
are treated like villains and criminals. Are activist stock market traders and silver market
guerrillas to blame for any crisis that erupts in the near future? No, of course not, but they
will be blamed anyway.
That said, propaganda narratives and scapegoats may not be enough to save the bankers this
time. They will never allow a major fiscal crash to develop in a vacuum. They need more cover,
and they need to have the means to lock down the public to prevent civil unrest or rebellion
from spilling over into their backyards. I have long suspected that the covid pandemic is a
useful tool in this regard. As I noted in my article
'How Viral Pandemic Benefits The Globalist Agenda' , published in January of 2020:
" Even if a pandemic does not kill a large number of people, it still disrupts
international travel, it disrupts exports and imports, it disrupts consumer behavior and
retail sales, and it disrupts domestic trade. If it does kill a large number of people, and
if the Chinese government's response is any indication, it could result in global martial
law. With many economies including the US economy already in a precarious balancing act of
historic debt vs. crashing demand and useless central bank repo market intervention, there is
little chance that the system can withstand such a tsunami "
As we all know, medical martial law in the name of "public health" is being established in
most countries regardless of the actual death rate. The insane globalist
rantings of the World Economic Forum and Klaus Schwab have been very revealing; Schwab and
other elites have even called the pandemic a "perfect opportunity" to execute there agenda for
the "Great Reset".
However, the globalists are highly fallible, and mistakes in judgment have been made. During
the Event 201 pandemic
wargame on a coronavirus outbreak (conveniently held two months before the real thing
happened), the elites forecast at least 65 million initial deaths globally from such a virus.
We are a year into the pandemic and nowhere near that kind of death rate. In fact, the
death rate is so minuscule (0.26%) , that the public is beginning to realize the lockdown
mandates are pointless.
In the US, conservative states are moving on and keeping their economies wide open. Half the
population is refusing to take the vaccines, and many members of law enforcement are refusing
to implement lockdown policies. I don't think this is what the globalists expected at all. They
needed mass fear and they are getting mass defiance.
They're going to need a bigger threat, or a bigger virus.
This is why I have been repeatedly warning that the talk of reopenings by Biden and other
democrats is going to be very short lived. I have predicted that Biden will attempt a federal
lockdown similar to the Level 4 lockdowns used in Europe and Australia after a couple of months
of relative calm. I based this
Softpanorama
Oilman2 says: April 10, 2021 at 11:14 am
Ms No PREMIUM 2 hours ago
odb 2 hours ago
Canada makes it much more difficult to know its real unemployment rate. The official Canadian unemployment rate for February was 6.8 percent, a slight increase from January that Statistics Canada attributes to "more people search[ing] for work." The official measurement in Canada, as in the U.S., European Union and Australia, mirrors the official standard for measuring employment defined by the International Labour Organization -- those not working at all and who are "actively looking for work." (The ILO is an agency of the United Nations.)
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