Saturday, February 28, 2015
The more I study our current situation the more it's looking like the 1920s just before the market crashed. See if this doesn't sound familiar. Bucket shops which are equivalent of our modern day derivatives sold side bets to the stock market. Trade deficits nearly equal to what we have now. Foreign debt - Germany was made to try and pay for WWI which they couldn't. Inflation for Germany was so bad that it took bundles of marks to buy a loaf of bread. In today's example that would be Greece but they don't have the power to print their own money so they're stuck with the euro that can only be manipulated by big European banks.
Japan is facing an energy crisis as they can't restart their nuclear plant at Fukushima. That "clean up" is surely sucking monies out of the economy. Not to mention the loss of farmland from the contamination zone. No way to stop ground water from becoming contaminated and seeping into the ocean.
Back to Greece which is looking a lot like Germany did back in the 20s. Germany wrestled with the war debt problem until Hitler took power and invoked the Liberty Plan which criminalized anyone in government who tried to make reparations for WWI debt as agreed to in the Young Plan. It was probably the reason he made it to power in the first place. To it's credit the Young Plan canceled much of the debt and stretched payments out to 59 years. Greece as was mentioned before can not restructure its' currency or seem to come up with a viable plan for ending its' economic woes. The European Central bank seems to be unwilling to let Greece sell bonds to help pay its' debt which was the plan for Germany back in the day. Germany by the way finally paid off the last of its' war debt in 2010.
And this week we have one bank fail in Puerto Rico.
Monday, February 23, 2015
We're getting too efficient for our own good. The old method was to cut a worker or two, divide their work load amongst the remaining staff and pocket the difference. And if you were lucky enough to survive the budget cut you might get a penny or two with your newly defined role. And let's not forget a flashy title like foreman, vice president, supervisor, or associate. Which basically meant you were one step above the janitor.
Then there's the "shaving of the hours". Starts out at X hours for a particular job calculated by an estimator. He submits the bid to the home office knowing that he's padded time in case some unforeseen circumstance should arise. Home office knows this and shaves 10% from the hours before turning the paperwork over to the superintendent. The superintendent shaves another 5% just to make him look good before passing it on to the supervisor. The supervisor cuts the hours further figuring it will make him look good. The foreman looks at the paperwork and laughs knowing that it's humanly impossible to complete the job in such a short time. When the job runs over everybody gets scolded for not bringing the job in on time and told the company is losing money. Meanwhile the owners and higher ups are off fishing in Bermuda together.
We are at the beginning of becoming obsolete as humans. We have robot cars and aircraft, robots in factories. Computers do in a few seconds what once took minutes or hours by staffs of typists. And once a robot can repair another robot then we may find ourselves on the extinct list. I have seen an acceleration of this process in just the last 20 years. So this is just the beginning. Economically speaking this doesn't put the masses in a very good position. And what happens when China catches the robotics trend? Will they replace all those low wage workers with machines? That might be cause for political upheaval. Very little is left when it comes to manufacturing jobs that haven't been shipped over seas. Do a little research into your favorite "American" company and I think you'll find it's now owned by a foreign partnership.
They say jobs are coming back to America, they're not. We've lost 62,000 manufacturers in the last 15 years. That's manufacturers not jobs. The jobs that remain are high tech or service related. The problem there is that by the time you've received high tech training the technology has changed. And most service jobs don't pay enough to support one person let alone a family. What's left? Basically it boils down to selling debt or information. Information is cheap and the world is swimming in debt.
Haven't checked bank fails lately...
One fail in Ga. on Friday Feb 13, lucky them.
Saturday, February 7, 2015
Oil, Texas tea, bubblin crude. We're swimming in it. It's all around us even if you don't drive. Think not? Your keyboard mouse and monitor frame are made from oil. Bet there isn't much in the room around you that did come from oil and even if it didn't a trucker had to ship it to a store using oil. You bought it and drove it home using oil. Heck even the roads we drive on are made from oil (asphalt).
So what's all the fuss about? It's an oil war on top of a couple of real wars. Russian and U.S. oil companies were all set to do a 1/2 trillion dollar deal to drill in the Black sea. That's when the tug of war over the Ukraine started. Actually it started when the U.S. backed a pro west Orange party in the Ukraine. Ukraine being $15 billion in debt had the choice of accepting help from the EU or Russia. It was all set to take the EU deal when the president backed out against the wishes of parliament. That's when he was ousted from power and fled to Russia. Ukrainians have a love hate relationship with Russia. They have no love for the old soviet system (true there are still some communists in parliament) but the bulk of the Ukrainian economy relies on trade with Russia.
The Saudis are satisfied with market share. They know that it will hurt their enemies to keep prices low. It will also drive out the smaller competition in the west. All of which seems unusual as they're also funding extremists. So it's a safe bet that the country is a bit polarized, at least amongst the royal family who runs things. Deny all they want but they held fund raisers to bolster Al Qaeda which was proven in the days after 911. Whether they actually funded 911 we may never know unless the redacted pages of the CIA report are revealed. Don't hold your breath for that one.
What's happening to oil right now? The short term price is around $50 a barrel while the future 2016 price is just over $60. So while the short term price is low companies are racing to store oil then sell it later at a higher price. That in itself raised prices a bit. High cost low producing production rigs are being shut down. So the real price will depend on storage costs estimated at around .45 cents a barrel at present. So we may see an uptick in prices in the spring. Whether we see $100 a barrel again is open to debate. The Saudis have said no to that. We use 20 million barrels a day but that figure is going down due to better fuel milages. The tug of war of supply and demand goes on and at the moment it looks like supply is winning.
No bank fails this week
Monday, February 2, 2015
Just like to do some anecdotal research into what's happening to the economy. Had to go to the mall to pick up a part I could not get anywhere else, at least not without a long range drive. Three years ago the mall was about 1/3 empty of shops with only a few strolling the walkways. Today all but a few storefronts were full but sans customers. Oh there were customers but the ones I saw were only questioning the few sales staff present and not buying anything. Sales signs said 50 to 60% off clothing at Sears. Went to an electronics store for a particular part and was immediately pounced on by two twenty something sales personnel. One kid went back to dismantling a display case that once held cell phones. One thing that struck me as odd in looking around the inside of the mall and the parking lot was the absence of teenagers. This was after all the peak time for their appearance, just after school.
Took a fast walk around the inside, wanting to take note of what shops were still in business, I saw many stores with just one cashier trying to look busy or on the phone. So I can only conclude by this outing that the days of "recreational shopping" are all but dead. No longer can junior afford to blow $50 on a video game and video stores are long gone with internet and cable. There was one kiosk that sold nothing but cell phone cases but had no takers. The gal behind the counter looked bored to death.
Don't see any cars with new car stickers driving about the neighborhood. With all the recalls think people might be a bit leery. Nothing more frustrating then to have to return a product that wasn't made right in the first place. Don't forget to fill out the return paperwork along with a DNA sample. And watch out for the restocking fees which translates into them throwing the product on a pallet with other rejects, shrink wrapping it and selling it to some other sucker wholesale.
Need a newer big screen TV for free? Well at least an older newer model. Check Craigslist. The only drawback is you might need a burly friend to help you move it. Some of those suckers weight a couple hundred pounds. An especially good move right around super bowl time of year. Good thing is some of the older models are better made.
And what do we do with all this electronic waste once it's doomed to the junkyard? We recycle it of course. You'd be amazed at the tonnage we rid ourselves in any given day. Where does it go once it's out of sight out of mind? Some of it gets striped and reprocessed right here in the U.S. while some companies don't bother and dump the whole thing on the Chinese. Nothing like letting their kids sweat over a boiling pot of hot toxic solder.
One thing is certain. They just don't make them like they used to. Everything now seems to come complete with a computer or LCD read out. Try buying a range or washer that doesn't have an electronic display. Yeah just something else to break down and it'll only cost 2/3 the price of a new one to get it fixed. Sheesh what a racket.
None this past week but with oil down it's a safe bet more are coming.
Tuesday, January 27, 2015
(What you mean I sign up for 5 tours in Iraq? Thought we done with that.)
Kick the can down the road and hope nobody notices. Big follower of world news here and it's a safe bet the money boys are gaming the system yet again. Oil is the name of the game at the moment and just like the gold rush of long ago anybody with a drilling rig is out there pumping. But the price is down you say so how can that be? Simple. Those rigs and leases don't come cheap and once you've started it's hard to stop. While the Saudis have long since paid for their oil infrastructure the new kids on the block, that would be shale and tar sands, maybe not. Frackers frack for oil and gas. It's a safe bet they run on credit like most businesses. Bet the payments are hell seeing as how they got into the game when the price was over $100 a barrel. A nice tidy profit when you're pumping a million barrels a day.
So where does that leave the world? If you're an oil producing nation and that's where you rely on the bulk of your income then you're screwed. Saudi Arabia doesn't care they just want market share that way it'll drive the smaller fish out. Unfortunately it's going to hurt Canada with its' tar sands oil. Harper has already spent that money before it hit the pages of the budget because if everything is so wonderful then why would the budget be held until April? Maybe he thinks we're all fools. Sadly the pain gets trickled down to the bottom feeders like Venezuela Nigeria and then to those who must import oil like Cuba. Sorry Raul Hugo is dead and they have their own economy to think about now. Maybe the U.S. could dangle some barrels of oil over his head because you know we're just swimming in it.
And with all the chaos and diversions going on (translate that to read: the military industrial complex is sucking the life blood out of the world) it's a safe bet (there I go again) life will get yet more chaotic. After all must keep the rubes confused during the robbery otherwise they might catch on to the game. Lower the interest rates yet again and "infuse" more money into the banking system cause you know a $43 million bonus just doesn't go as far as it used to.
Did we have any bank fails last week let me see?
We have one small fish ..er.. mean bank in Chicago now swallowed up.
Friday, January 16, 2015
The ongoing news is enough to make a manic depressed. From today's ongoing breaking news:
Anti terror raids in Belgium
Gunmen attack French magazine Charlie Hebdo
Hostage situation in Colombes, Paris
Police raids in Berlin
Islamic state threat in Iraq
Ukraine, Russia political crisis
AirAsia flight 8501
If that weren't bad enough there's the 25 million displace folks living outside around the globe, economic hardships in Greece, Spain and Italy just to name a few. All the while the boys on Wall Street suck the last dime out of the suckers before the Grim Reaper shows up. Let's see them try and bribe their way out of that one...Ha!
Ah but lest we forget the terrorists under your bed because then the boys on Capitol Hill will have to protect you by looking through all of your emails just in case. You have nothing to hide right? Meta data collection will save us they say. Yeah right. Ever do a Google search and not find what you're looking for even though you knew the item you were searching for existed? And just how many Bob Jones are there in this country or any country for that matter. Just hope your name isn't the same as the Bob they are looking for.
What country can survive without a Boogieman? It's those foreigners I tell ya. Everything was okay until they showed up. Wait a minute didn't your ancestors come from someplace else? An often overlooked fact in the grand scheme of things. But we always have to blame somebody, somebody has to be the fall guy, the scape goat. Over the last 200+ years we've done such a wonderful job of demonizing Indians (American that is) African Americans, Chinese, Irish, Germans, Japanese, Mexicans, Jews, Mormons, Catholics and now Arabs and Muslims.
Heard one of the most absurd statements by the Pope last night. He said if somebody insulted his mother he'd punch them in the face. Nice one Pope who would Jesus punch?
Gad this world has gone crazy.
Bank fails later,,,
One bank failed on Friday in Florida. The total number of fails last year was 14. Lost count of the grand total but it's over 450.
Saturday, January 3, 2015
Shot stabbed shot punched kicked tazed. Is there anything we won't do to each other? Almost forgot raped, abused and neglected. I'd take the last one there. Leave me the hell alone then we can skip the others. Just can't think of any good innuendos this week. Have any to spare? And let's face facts nothing is sacred anymore. Santa Claus didn't come to town and your bills are going to go up shortly.
No global warming they say. Really? Then how's come west Texas is about out of water and California needs a trillion gallons just to break even? Frack you say? If oil drops farther you won't need to worry about that and forget that pipeline. Alberta will look like a ghost town by the time it's all over. And nobody has the balls to raise taxes that just might keep the party going. And why should they? The ones at the top are still ripping off the foreign countries with their fancy hedge funds and derivatives. Bet they don't even know what they have in their bank accounts. When the talking heads tell you 2015 is going to be a great year grab you BS meter and hang on. Why you might ask? Because even after the last melt down they're still selling worthless paper and the rules are pretty much the same. They can even use us as the rube. No more bailouts? Ha! That was neatly sneaked into the budget bill just before they split town for Xmas break.
Who's in the toilet swirling around the bowl? We have: Greece, Italy, Portugal, Spain and just added to the list a few days ago was France and Belgium. Scotland and Ireland aren't looking to healthy either financially speaking. Left out Cyprus and Syria and Japan. Sheesh this list is getting long. Brazil, Argentina, Equator, Chile, Venezuela, Russia, and most of the Baltic countries, oh and of course Ukraine which is looking to borrow another $15 billion. All it's going to take is one default and the house of cards comes tumbling down.
And on that note bank fails later...