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COMMENTARY for all articles by Gordon T Long

 

PRESERVE & PROTECT: The Jaws of Death

 

The United States is facing both a structural and demand problem - it is not the cyclical recessionary business cycle or the fallout of a credit supply crisis which the Washington spin would have you believe.

 

It is my opinion that the Washington political machine is being forced to take this position, because it simply does not know what to do about the real dilemma associated with the implications of the massive structural debt and deficits facing the US.  This is a politically dangerous predicament because the reality is we are on the cusp of an imminent and significant collapse in the standard of living for most Americans.

 

The politicos’ proven tool of stimulus spending, which has been the silver bullet solution for decades to everything that has even hinted of being a problem, is clearly no longer working. Monetary and Fiscal policy are presently no match for the collapse of the Shadow Banking System. A $2.1 Trillion YTD drop in Shadow Banking Liabilities has become an insurmountable problem for the Federal Reserve without a further and dramatic increase in Quantitative Easing. The fallout from this action will be an intractable problem which we will face for the next five to eight years, resulting in the “Jaws of Death” for the American public.  READ MORE

 

 

   

 

PRESERVE & PROTECT: Mapping the Tipping Points

The economic news has turned decidedly negative globally and a sense of ‘quiet before the storm’ permeates the financial headlines. Arcane subjects such as a Hindenburg Omen now make mainline news. The retail investor continues to flee the equity markets and in concert with the institutional players relentlessly pile into the perceived safety of yield instruments, though they are outrageously expensive by any proven measure. Like trying to buy a pump during a storm flood, people are apparently willing to pay any price.  As a sailor it feels like the ominous period where the crew is fastening down the hatches and preparing for the squall that is clearly on the horizon. Few crew mates are talking as everyone is checking preparations for any eventuality. Are you prepared?

 

What if this is not a squall but a tropical storm, or even a hurricane? Unlike sailors the financial markets do not have the forecasting technology to protect it from such a possibility. Good sailors before today’s technology advancements avoided this possibility through the use of almanacs, shrewd observation of the climate and common sense. It appears to this old salt that all three are missing in today’s financial community.

 

Looking through the misty haze though, I can see the following clearly looming on the horizon.

Since President Nixon took the US off the Gold standard in 1971 the increase in global fiat currency has been nothing short of breath taking. It has grown unchecked and inevitably became unhinged from world industrial production and the historical creators of real tangible wealth.  READ MORE


READER ROADMAP -  2010 TIPPING POINTS aid to positioning COMMENTARY

 

 

 

POSTS:  THURSDAY 09-23-10

Last Update: 09/24/2010 05:15 AM

SCHEDULE: 1st Pass: 5:30AM EST, 2nd Pass: 8:00 AM, 3rd Pass 10:30 AM. Last Pass 5:30 PM

ARTICLE SOURCE 1 2 3 4 5 6 7 8 9 10
                       
UN powers ready for new talks with Iran FT                    
U.S. Opens Window for Iran Talks WSJ                    
                       
Norway’s puzzling purchases of Greek bonds G&M X                  
French Unions Protest Pension Overhaul, Disrupting Transport Bloomberg X                  
USA                      
Jobless Claims in U.S. Increased 12,000 to 465,000 Last Week Bloomberg X                  
Sales of U.S. Existing Homes Rose in August From Record Low Bloomberg X                  
Existing Home Sales at 4.1 million SAAR, 11.6 months of supply Calculated Risk X                  
Calculated Risk: Existing Home Inventory increases 1.5% Year-over-Year Calculated Risk X                  
Leading Indicators increased 0.3 percent in August Conference Board X                  
Remain Short Inflation Protection BCAR X                  
A Thousand Cuts American Progress X                  
BoJ Governor's Presentation - Warns The US Is Just Like Japan BI                    
Wal-Mart's CEO Provides The Starkest Visual Of The Modern Bread Line Yet ZH                    
                       
Banks Likely to Escape Breakup by U.K. Commission, Analysts Say Bloomberg   X                
"Is the Bond Bull Dead?" Mish     X              
WOW- Microsoft Just Issued 3-Year Debt At Less Than 1% Yield BI     X              
Answer to Debt Woes Eludes Cities, States WSJ       X            
Banks Pressed on Sour Home Loans WSJ           X        
Swaps trading rules to mirror equities FT           X        
 Hotel Occupancy Rate Calculated Risk               X    
U.S. house prices lowest in nearly six years MW                 X  
Mortgage demand idles despite low loan rates Reuters                 X  
Housing isn’t even close to stabilizing MW                 X  
The Rich Benefit MASSIVELY From Housing Tax Subsidies BI                 X  
                       
ARTICLE SOURCE 11 12 13 14 15 16 17 18 19 20
                       
An oversight on oversight: The Federal Home Loan Bank VOX     X              
Default Risk in U.S. Drops to Lowest in 2 Years, Moody's Says Bloomberg       X            
Shanghai port's container throughput tops the world China Daily             X      
Republicans unveil ‘Pledge to America’ FT                 X  
The Goverment's "Year End Cliff" Gamble On 2% Of GDP And 10% Of Disposable Income ZH                 X  
Summers’ departure opens door for new ideas FT                 X  
Towards a new era of currency intervention FT                 X  
Exodus Could Shift White House Tone WSJ                 X  
                       
                       
BP OIL                      
                       
CENTRAL BANKING & MONETARY POLICY                      
$30 Trillion for Quantitative Easing (QE) 2? It's Time to Get Radical! Before Its News                    
QE2 in round trillions Comments Feed Telegraph                    
Central Banks Struggle for Exit as Recovery Weakens Bloomberg                    
Deflation or Inflation: Will Helicopter Bernanke Come Flying to the Rescue? EW                    
Fed promises more inflation Barr                    
The Lone Dissenter: Kansas City’s Hoenig Enters New Territory WSJ                    
GENERAL INTEREST                      
Obama’s fiscal stimulus no substitute for cheap oil Rubin                    
Are Resentment, Frustration And Anger The Defining Feature Of The New American BI                    
The Limits to Complexity Simple Planet                    
MARKET WARNINGS                      
                       
VIDEO TO WATCH                      
JFK ASSASSINATION: E. Howard Hunt's Confession Before Its News                    
                       

Complete Legend to the Right, Top Items below.
Articles with highlights, graphics and any pertinent analysis found below.

1

         

1-SOVEREIGN DEBT

2-EU BANKING CRISIS
3-BOND BUBBLE

4-STATE & LOCAL GOVERNMENT

5-CENTRAL & EASTERN EUROPE
6-BANKING CRISIS II
7-RISK REVERSAL

8-COMMERCIAL REAL ESTATE

9-RESIDENTIAL REAL ESTATE - PHASE II
10-EXPIRATION FINANCIAL CRISIS PROGRAM
11-PENSION CRISIS

12-CHRONIC UNEMPLOYMENT

13-GOVERNMENT BACKSTOP INSUR.
14-CORPORATE BANKRUPTCY

TODAY'S TIPPING POINTS UPDATE

RED ALERT

AMBER ALERT

ACTIVITY

MONITOR

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09-23-10

 

GEO-POLITICAL TENSIONS - ISRAEL / KOREA / IRAN

 

IRAN

UN powers ready for new talks with Iran FT

Move follows conciliatory overtures from Tehran

 

U.S. Opens Window for Iran Talks  WSJ

 

1- SOVEREIGN DEBT & CREDIT CRISIS

 

SOVEREIGNS

 

 

GREECE

Norway’s puzzling purchases of Greek bonds G&M

 
The risk factors (and yields) keep rising for the country’s securities, but a noted savvy investor keeps buying. What gives?

 

FRANCE

French Unions Protest Pension Overhaul, Disrupting Transport  BL

 

 

USA

 

Thursday, SEPT.. 23
8:30 am Jobless claims 9/18 465,000 455,000 453,000
10 am Existing home sales Aug. 4.13 mln 4.10 mln 3.84 mln
10 am Leading indicators Aug. 0.3% 0.2% 0.1%


Jobless Claims in U.S. Increased 12,000 to 465,000 Last Week BL

 

Sales of U.S. Existing Homes Rose in August From Record Low   BL NAR

 

Existing Home Sales at 4.1 million SAAR, 11.6 months of supply  Calculated Risk

 

Months of supply decreased to 11.6 months in August from 12.5 months in July. This is extremely high and suggests prices, as measured by the repeat sales indexes like Case-Shiller and CoreLogic, will continue to decline. Ignore the median price! Double digit supply and the low sales rate are the key stories.

 

 

 

 

Calculated Risk: Existing Home Inventory increases 1.5% Year-over-Year  Calculated Risk 
The first graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Inventory is not seasonally adjusted, so it really helps to look at the YoY change.


Although inventory decreased slightly from July 2010 to August 2010, inventory increased 1.5% YoY in August.

Note: Usually July is the peak month for inventory.

The year-over-year increase in inventory is especially bad news because the reported inventory is already historically very high (around 4 million), and the 11.6 months of supply in August is far above normal.

Based on the MBA mortgage purchase applications index, it appears there will be little increase in sales over the next couple of months (sales will probably remain in the low-to-mid 4 million SAAR range). That means we will see double digit months-of-supply for some time - and that suggests house prices will continue to fall.
the second graph shows existing home sales Not Seasonally Adjusted (NSA).

The red columns are for 2010. Sales for the last two months are significantly below the previous years, and sales will probably be well below the previous years for the remainder of 2010.

The bottom line: Sales were very weak in August - almost exactly at the levels I expected - and will continue to be weak for some time. Inventory is very high, and that will put downward pressure on house prices.



Leading Indicators increased 0.3 percent in August CB
Says Ken Goldstein, economist at The Conference Board: “While the recession officially ended in June 2009, the recent pace of growth has been disappointingly slow, fueling concern that the economic recovery could fade and the U.S. could slide back into recession. However, latest data from the U.S. LEI suggest little change in economic conditions over the next few months. Expect more of the same – a weak economy with little forward momentum through 2010 and early 2011.”



Remain Short Inflation Protection BCA Research

 

The U.S. annual core inflation rate has been stuck at 0.9% since April, but should soon break down.

The U.S. headline CPI index rose 0.3% in August on the back of higher energy prices, but the core measure was flat from July. Core goods inflation has been sticky in this cycle, due to tobacco taxes and the bull market in used cars and trucks. Nonetheless, the trend in core inflation will be driven by the service sector, particularly shelter. Inflation in the non-energy shelter component (32% of total CPI) remains in negative territory because of the excess supply of housing. Given that the housing market remains a mess, there is a high chance of a temporary bout of outright deflation in the core CPI measure in 2011. The economy is likely to struggle to attain its potential rate of growth in the near term, which means that the output gap will remain wide. U.S. dollar weakness may mitigate the deflationary pressures, but not by much. Retailers have not been able to pass along higher import prices to consumers for years. Bottom line: The downward trend in core inflation, high unemployment and weak money growth give the Fed plenty of reasons to expand its balance sheet further. For investors, the recent backup in long-term CPI swap rates provides a good opportunity to position for lower inflation expectations.

A Thousand Cuts American Progress
What Reducing the Federal Budget Deficit Through Large Spending Cuts Could Really Look Like

 

BoJ Governor's Presentation - Warns The US Is Just Like Japan  BI
The Governor of the Bank of Japan, Masaaki Shirakawa, spoke before the Second International Journal of Central Banking last week on one subject:

Is the U.S. turning Japanese?
(via Pragmatic Capitalist)

In his presentation, Shirakawa compares the two economies, noting the correlations between Japan's lost decade and the current U.S., comparing metrics like core inflation, bank loans, and central bank balance sheets.

The du jour comparison of the U.S. and Japanese economies has come under a lot of criticism for its exclusion of cultural and demographic issues, but from a purely economic standpoint, there is a lot for that comparison to stand on.

What might be most alarming in this presentation is what powered Japan's rebound: exports.

Who would consume those U.S. exports, remains to be seen, as Europe is experiencing similar problems and the emerging markets of China, India, and Brazil may not yet be ready for prime time.

 

 Wal-Mart's CEO Provides The Starkest Visual Of The Modern Bread Line Yet  ZH
"About 11 p.m. customers start to come in and shop, fill their grocery basket with basic items – baby formula, milk, bread, eggs – and continue to shop and mill about the store until midnight when government electronic benefits cards get activated, and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher." Wal-Mart CEO

 

 

2- EU BANKING CRISIS

   

Banks Likely to Escape Breakup by U.K. Commission, Analysts Say  BL

 

3- BOND BUBBLE

 

"Is the Bond Bull Dead?" Mish

 

WOW- Microsoft Just Issued 3-Year Debt At Less Than 1% Yield  BI
Microsoft just issued 3-year debt at less than one percent, according to Joe Saluzzi. The issuance came in at a minuscule 0.875%. Money is free!

 

4- STATE & LOCAL GOVERNMENT

 

Answer to Debt Woes Eludes Cities, States  WSJ

 
State and local governments have borrowed $2.4 trillion as of mid-2010, according to Federal Reserve data. That's up 35% from five years ago.  State and local governments—which employ more workers (19.5 million) than manufacturing and construction combined—have promised over $3 trillion in retirement benefits, more by some estimates. Their pension assets are at least $1 trillion shy of that, according to the Pew Center on the States. "It doesn't seem like the current path is sustainable without a dramatic jump in economic growth," says Randal Picker, a University of Chicago bankruptcy-law scholar. And the odds of that are slim. Property and sales-tax revenues aren't likely to grow rapidly enough to solve the problem.

Reneging on debts remains a rarity among U.S. state and municipal governments. Fewer than 250 of the nation's 89,000 local governmental units have filed for bankruptcy since 1980. Recent close calls in Harrisburg, Pa., and Central Falls, R.I., spark predictions that the next phase of the financial crisis will be a tsunami of municipal bankruptcies and defaults. Muni-bond experts at rating agencies and bankruptcy lawyers assure us that isn't likely. We've learned in the past few years to be skeptical of such assurances, but the experts probably are right on this one. Not because state and local finances are in good shape—they aren't—but because Chapter 9 of the bankruptcy code, the one that applies to local governments, is so unwieldy.

 

 


5- CENTRAL & EASTERN EUROPE

 


6-BANKING CRISIS II


Banks Pressed on Sour Home Loans  WSJ
Big U.S. banks are facing legal pressure to make up for losses tied to pools of soured low-end mortgage loans. In the latest effort, a group of investors in 2,300 mortgage securities worth roughly $500 billion is seeking to force several banks that originated or are now servicing faulty subprime-mortgage loans to repurchase or modify them. The move follows other similar efforts. Bond and mortgage insurers, hard hit in the housing crisis, have filed lawsuits accusing lenders and banks of sticking them with flawed loans marred by poor underwriting and faulty appraisals. Federal Home Loan Banks in Pittsburgh, Seattle and San Francisco have sued Wall Street banks, seeking to force them to buy back mortgage-backed bonds. In July, the Federal Housing Finance Agency issued 64 subpoenas to obtain information about loans underpinning securities sold to mortgage



Swaps trading rules to mirror equities  FT

7- RISK REVERSAL

 

 

8- COMMERCIAL REAL ESTATE

 

 Hotel Occupancy Rate  Calculated Risk

 
The occupancy rate has fallen below the levels of 2008 again - and 2008 was a tough year for the hotel industry!

Even though the occupancy rate is close to 2008 levels, 2010 is a much more difficult year. The average daily rate (ADR) is off more than 10% from 2008 levels - so even with the similar occupancy rates, hotel room revenue is off sharply compared to two years ago.

 

 

9-RESIDENTIAL REAL ESTATE - PHASE II

 

U.S. house prices lowest in nearly six years MW FHFA


Mortgage demand idles despite low loan rates Reuters

Housing isn’t even close to stabilizing MW

The Rich Benefit MASSIVELY From Housing Tax Subsidies BI

Here's a great chart from the Corporation For Enterprise Development (.pdf) via CNBC. Various tax subsidies that go to asset building MASSIVELY benefit the rich.

 

10- EXPIRATION FINANCIAL CRISIS PROGRAM

 

 

11- PENSION & ENTITLEMENTS CRISIS



12- CHRONIC UNEMPLOYMENT



13- GOVERNMENT BACKSTOP INSURANCE

 

An oversight on oversight: The Federal Home Loan Bank VOX

 

14- CORPORATE BANKRUPTCIES

 

Default Risk in U.S. Drops to Lowest in 2 Years, Moody's Says BL

 

Companies rated at or below B3 with a negative outlook declined to 195 as of Sept. 1 from a high of 288 in June 2009, Moody’s said in a report. The B3 rating is six steps below investment grade. Clear Channel Communications Inc. and Energy Future Holdings Corp., formerly named TXU Corp., were among the biggest companies on the list.

“What’s interesting is the snap back,” David Keisman, senior vice president at Moody’s in New York, said in a telephone interview. Increased liquidity is helping to improve credit quality and lessen default risk, he said.

 

17- CHINA BUBBLE


Shanghai port's container throughput tops the world China Daily

19- PUBLIC POLICY MISCUES

 

Republicans unveil ‘Pledge to America’  FT

Promise of tax cuts and government cutbacks

 

The Goverment's "Year End Cliff" Gamble On 2% Of GDP And 10% Of Disposable Income  ZH
With mid-term elections a month and a half away, and the expiration of the Bush tax cuts approaching at a rapid pace, the stakes for Obama's dwindling administration on the tax cut extension issue loom. And as Goldman's Alec Phillips demonstrates, the costs of either decision are huge: on one hand, should Obama go ahead and relent to extending all the tax cuts, he will almost guaranteed not be around for a second term due to the avalanche of disappointment in his electorate as he relents on this key promise. On the other hand, should he and the republicans be unable to find a compromise and all tax cuts expire, the impact to the economy could be so vast that America's breezy depression will become a full blown hurricane, possibly worse than anything the nation has ever seen. Phillips' succinct summary of the downside case is as follows: "Letting all of these provisions expire would subtract nearly 10 percentage points from annualized disposable income growth in Q1 2011, which could translate into a nearly 2 percentage point decline in final demand and nearly that large a drag on GDP in the first half of 2011." And it is not just the Bush cuts that are at steak: the year end "cliff" also sees the expiration of the “Making Work Pay” (MWP) payroll tax credit enacted in ARRA, and the relief from the alternative minimum tax (AMT). Yet with such key tax "experts" in the administration as Romer, Orszag and now Summers all gone, Obama will be very much clueless to evaluate the dramatic impact of all these "cliff" developments until it is likely too late. One thing is certain: if a stalemate prevails, GDP for H1 of 2011 will be wildly negative. The summary of the case by case impact can be seen on the chart below.

 

 

Summers’ departure opens door for new ideas FT

Exit offers Obama opportunity for intellectual liberation

 

Towards a new era of currency intervention  FT

 

Exodus Could Shift White House Tone  WSJ
Chief of Staff Rahm Emanuel is likely to resign soon, hastening a remake of the Obama White House that could lead to a lower-key approach after midterm elections.



 


OTHER TIPPING POINT CATEGORIES NOT LISTED ABOVE

 

19-US PUBLIC POLICY MISCUES

 

 

24-RETAIL SALES

 

 

26-GLOBAL OUTPUT GAP

 

 

31-FOOD PRICE PRESSURES

 

 

32-US STOCK MARKET VALUATIONS

 




BP - British Petroleum

SULTANS OF SWAP: BP Potentially More Devastating then Lehman!

------------

 






   

CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES

------------

 

$30 Trillion for Quantitative Easing (QE) 2? It's Time to Get Radical! Before Its News

Yes, it's time to get radical on the economy and no, I'm not talking about going full Karl Marx -- the politicians in Washington appear well down THAT road..  The next set of bailouts could run $30 trillion (as I'll explain in a bit) and that's probably not the end of it because all the future government entitlements are well over $100 trillion.  This is not only unaffordable, any attempt to make good on even a small portion of this is a fool's errand.  In addition to attempting an impossible task that is doomed to fail, we're bailing out the wrong people!   Hopefully, this article will get you thinking -- feel free to leave a comment and help our discussion.

I'm talking about taking a serious detour from the way things have been done and proposing a radical restructuring of the way government and money work, as well as, a massive clean up of the mess we've gotten into.  What I am proposing will completely eliminate the Federal debt, change the way government does business and end the banking cartel that destroys countries, finances war and and causes excessive consumer spending.  It will completely change the role of the Federal government and restore liberty.  It could be replicated wherever fiat money systems are in force in almost any country.

The problem is one of debt and who gets debt relief.

 

 

QE2 in round trillions Comments Feed  Prichard

 

Here is a back-of-an-envelope guess by David Greenlaw at Morgan Stanley on what the Fed can expect from a second blitz of bond purchases, or `Shock & Awe’ as he calls it.

If Ben Bernanke does a further $2 trillion (on top of the $1.7 trillion already in the bag) the yield on 10-year US Treasuries will drop 50 basis points to around 2.2pc.

GDP growth will be 0.3pc higher than otherwise in 2011 and 0.4pc higher in 2012.

The unemployment rate will be 0.3pc lower in 2011 and 0.5pc lower in 2012 — (in other words drop from 9.6pc to 9.1pc, ceteris paribus).

That looks like trivial returns for a collosal adventure into the unknown, with risks of dollar flight and mounting Chinese suspicions that the US intends to default on its external debts by debasement.

I had dinner recently with a former Goldman Sachs hedge fund guru, and while I can’t remember the exact details through a fog of Mersault Premier Cru, I am pretty sure he said it would take $30 trillion to do the job – given the scale of wealth destruction from the US property crash and ferocity of debt deleveraging still to come.

 

Central Banks Struggle for Exit as Recovery Weakens  BL

The world’s major central banks are having a tough time exiting crisis mode, prolonging aid or raising the prospect of reviving unconventional stimulus tools as the global recovery loses momentum.

 

 
Deflation or Inflation: Will Helicopter Bernanke Come Flying to the Rescue? EW

Fed promises more inflation Barr

The Lone Dissenter: Kansas City’s Hoenig Enters New Territory
WSJ

 

 GENERAL INTEREST

 

 Obama’s fiscal stimulus no substitute for cheap oil Rubin

 

Are Resentment, Frustration And Anger The Defining Feature Of The New American BI

 

Resentment, frustration and anger are now ubiquitous features of U.S. culture. This is the consequence of several factors, none of them positive.

"Horn broken, watch for finger." This bumper sticker perfectly captures the zeitgeist of the nation: the horn is broken, and everyone is giving everyone else the finger.

Why are simmering resentment, frustration and anger now ubiquitous features of U.S. culture? I would posit the following factors:

1. A culture of entitlement: the U.S. is now a culture of takers obsessed with getting their "fair share" of the swag/borrowed money. "We were promised!" (public employees); "I earned it!" (Social Security recipient, though only the first 3-4 years of benefits are drawn from his/her contributions, and everything after that is welfare drawn from the hides of current workers); "healthcare/income security/housing is a right!" (everybody's got rights, but nobody seems to have any duties or obligations); "it's for the children/elderly!" (that is, my expense account, million-dollar pension, etc. are nominally protected by the banner of "education" and/or "healthcare"), and so on.

Those with access to "private welfare" such as CEOs are a privileged class; most of us have to elbow our way to the crowded public trough. The truly select feed at the Wall Street trough, which combines private welfare skimmed from shareholders and investors, and Central State welfare issued in unlimited billions via bailouts, Fed purchases of toxic debt, backstops, loan guarantees, etc.

But like the story about the attractive young lady who blushingly agrees to share her favors for $10,000, but balks when the suitor downgrades his offer to a paltry $100 (with the punchline being, "We've already established what you're willing to sell, now we're just haggling over the price"), the recipient has sacrificed autonomy in accepting the entitlement, regardless of the source or size. This is how complicity to a host of embezzlements, corruptions and exploitations is purchased. 

2. A culture of victimhood: Victimhood is rewarded, shouldering ones' own load and thrift are punished. Like rats in a maze, Americans respond to incentives and disincentives: as a result, everyone is shouting out their claim to victimhood. The cacophony is reminiscent of a classroom of spoiled children all claiming excuses for their odious behavior and poor performance.

3. Unrealistic expectations: nobody wants to do demanding physical labor, so skilled-craft jobs go begging and companies have to train workers. Favored careers include sports heroes, Web entrepreneurs (as long as the work isn't too arduous and the cashout comes quickly), entertainers, film makers, etc.--all highly desirable and all scarce in the real world.

Offers which don't meet Americans' lofty expectations of their market value are rejected with a sniff (and good old American optimism: "something better will come along soon").

Numerous financial websites offer up fare such as "how many millions do you need to retire comfortably," as if saving hundreds of thousands of dollars is even an option for the vast majority of wage-earners.

4. Hype, hypocrisy and propaganda dominate the nation's politics and mainstream media: soaring rhetoric about growth, recovery, the American can-do spirit, the benefits of bailing out the Financial Power Elite, etc. have raised expectations that have repeatedly been dashed by reality.

All these relentlessly glad tidings and admonishments flow from the rentier-cartel Power Elites of the State/Plutocracy partnership, which owns the MSM (mainstream media) and most of the nation's productive wealth.

Thus we get billionaire Charlie Munger (one of a pair of outstanding hypocrites at his firm) suggesting that "the little people" need to "suck it in and cope," leaving him and Warren to the task of reaping billions more from ongoing taxpayer bail-outs of firms they bought into with State collusion.

The announcement that the Great Recession is over is simply the latest in an unending line of increasingly meaningless pronouncements transparently designed to persuade the public that everything's really, really getting much, much better, and their sour mood in the face of this outpouring of "good news" is irrational and, well, downright annoying. Get with the program, people! Everything's going great! (at least for billionaires who were offered Goldman Sachs shares at the bottom.)

5. It's somebody else's fault: you can fill in the perps, but leave the American public/consumer/voter as hapless, helpless victims of nefarious forces.

6. The frustration of addicted debt-serfs: We hate the nation's political class and the "up yours" service provided by Corporate America, but we are seemingly powerless to rid ourselves of these Overlords and leeches. Voters rail against dysfunctional insiders, yet they re-elect the craven parasite in their own district. They complain about cable TV providers but don't cancel their service lest their addiction to the smack/coke cocktail of TV be curtailed.

7. The 30-year erosion of the middle class: this chart says it all:

Image: oftwominds.com

The middle class filled the growing gap between stagnant earnings and steep increases in living costs, healthcare (a.k.a. sickcare), education, and housing with a second income (Mom, aunty, sister and Grandma all entered the workforce en masse) during the 1970s, and then they filled the still-widening gap in the 80s, 90s and 2000s with ever-expanding debt.

The dot-com bubble provided the illusion that permanently rising equities would painlessly fill the gap (pension plans were happy to join in the mass delusion). When that fantasy imploded, it was quickly replaced with the exact same fantasy, only this time based on housing.

Now that the "housing never goes down" fantasy has imploded, the dwindling remains of the once-great middle class are slouching dejectedly through the ruins of the political center (which cannot hold because there is no center, only a State/Plutocracy Elite and a rabble of State dependents defending their fiefdoms), filled with bitter resentments at this undeserved plight--for isn't this the Greatest Empire the World Has Ever Known?--beset by anxieties about the rough beasts (let us call them austerity, restraint, humility, responsibility, patience, sacrifice and thrift) whose hour has come round at last.

 

The Limits to Complexity Simple Planet

 
Our current leaders, mainstream academics, media pundits and others have a fundamentally flawed perspective when discussing our economic predicament and propsing solutions for returning to credit-based "economic growth". There is no more time left to rely on them, so we must build resilience at a personal and community level.

There are five general areas of resilience that every individual and family should understand and take incremental steps towards. These include food security, water security, energy security, health security, and financial security. There are many tremendous writers out there that have written and spoken volumes on these issues and have generously shared their knowledge with anyone willing to read or listen. One of these people is Chris Martenson, who has taken the time to write an entire series on the general steps anyone can take towards becoming more resilient and, as a result, more peaceful in mind. Here are the links to seven of the articles he has written to this date:

Getting Started

Water Security

Food Security (storing food)

Food Security (growing/preserving food)

Health Security

Energy Security (heat/power/communications)

Financial Security

     The quicker we individually quit acting like deer caught in the headlights, and take actions towards resilience, the better off we will be as a collective species on a planetary system that has generously supported us, and continues to do so. The upcoming years will truly be a unique, eventful chapter in the history of human evolution. Perhaps in whatever records of history that may survive this rapid transformation, we will be known as the “peak generations” who sacrificed their extraordinary wealth, lifestyles, and comforts for a more simple form of social organization, where we re-organized to create a sustainable, just society. More likely, we will end up being the “peak generations” that fought desperately to defy reality and ended up in a heap of our own rubble. Either way, we should not focus on what society thinks about us now or how we will be remembered in the future. We should only be focused on doing what needs to be done, and then we should do it with no regrets.

 

FLASH CRASH - HFT - DARK POOLS

 

 

MARKET WARNINGS

 

 

MARKET & GOLD MANIPULATION

 

 

AUDIO / VIDEO

 

Hunt's Deathbed Confession Reveals JFK Killers  Rense

 

JFK ASSASSINATION: E. Howard Hunt's Confession  Before Its News

 

 

 

 

 

QUOTE OF THE WEEK

 

“The great enemy of the truth,” John F. Kennedy declared in a 1962 commencement address at Yale University, “is very often not the lie – deliberate, contrived and dishonest – but the myth – persistent, persuasive and unrealistic.”



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Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.ont>

 

© Copyright 2010 Gordon T Long. The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

 

         

TODAY'S NEWS

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09-23-10

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ACCEPTING PRE-ORDERS

 

 

 




 

         

TIPPING POINTS

1-SOVEREIGN DEBT & CREDIT CRISIS

2-EU BANKING CRISIS
3-BOND BUBBLE

4-STATE & LOCAL GOVERNMENT

5-CENTRAL & EASTERN EUROPE
6-BANKING CRISIS II
7-RISK REVERSAL

8-COMMERCIAL REAL ESTATE

9-RESIDENTIAL REAL ESTATE - PHASE II
10-EXPIRATION FINANCIAL CRISIS PROGRAM
11-PENSION CRISIS

12-CHRONIC UNEMPLOYMENT

13-GOVERNMENT BACKSTOP INSUR.
14-CORPORATE BANKRUPTCY
 

15-CREDIT CONTRACTION II

16-US FISCAL IMBALANCES
17-CHINA BUBBLE
18-INTEREST PAYMENTS
19-US PUBLIC POLICY MISCUES
20-JAPAN DEBT DEFLATION SPIRAL
21-US RESERVE CURRENCY.
22-SHRINKING REVENUE GROWTH RATE
23-FINANCE & INSURANCE WRITE-DOWNS
24-RETAIL SALES
25-US DOLLAR WEAKNESS
26-GLOBAL OUTPUT GAP
27-CONFIDENCE - SOCIAL UNREST
28-ENTITLEMENT CRISIS
29-IRAN NUCLEAR THREAT
30-OIL PRICE PRESSURES
31-FOOD PRICE PRESSURES
32-US STOCK MARKET VALUATIONS
33-PANDEMIC
34-S$ RESERVE CURRENCY
35-TERRORIST EVENT
36-NATURAL DISASTER

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book Review- Five Thumbs Up for Steve Greenhut's Plunder!  Mish

 

 

   

 

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Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, we recommend that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

Copyright and Disclaimer

© Copyright 2010, Gordon T Long. The information herein was obtained from sources which the Gordon T Long. believes reliable, but we do not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that the Gordon T Long. or its principals may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Gordon T Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from us.