Did Janet Miss the Rate Window?

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Yes:  The market will drop 200 points today.

Yes, it is due to trade with China collapsing:  “Commodities rout deepens as Chinese trade data signal weaker demand.”

And yes, the Baltic Dry Index is at 551 and dangerously low, as we have been telling you for months.

We begin this morning by wondering whether the Federal Reserve will really go ahead with its announced intentions to raise rates a week from tomorrow.

The reason is that events are starting to pile up against a rate hike.

Let’s consider the problem broadly:  America has roughly $18-trillion in public debt and it all needs to be financed.

The Fed, which is looking to raise rates a quarter, would increase the cost of paying interest on that debt $450 –billion.  That expense has to be born by someone (check the mirror for the answer).

In long wave economic theory, there is a good case to raise rates when times are bad and when deflation is running amuck.

The reason is the most of the One Percenters have their dough tied up in interest-rate related investments.  Obviously, if rates are low, say 2%, a million dollar nest egg is only going to generate $20,000 of interest income per year.  But, when the Fed is watering down the purchasing power of the fiat Federal Reserve “Notes” by 5.9% per year, 2% returns are losing on a purchasing power basis.

When the interest rate is higher, say 5%, then the interest income on a million buc ks pencils out to $50-thousand a year.

As interest rates have fallen, it is this very dynamic that has forced the One Percent to concentrate larger and larger pools in fixed income products.  Why take chances, right?

So in order to have a workable $500-thousand a year income with a 2% interest rate, you need $25-million to play with.

As the money piles up around the edges, the rates keep coming down and sooner, or later, you get a deflationary depression as prices collapse.

The magic is to increase the interest rates.  And the way to do that is increase the cost of money…and the latest Fed Money supply figures show there has been no growth in M1 – ion fact it was dropping 9-10th’s of one percent per year if you look at the 3-month average.

All of which is foreplay to rates going up..

But the problem to behold this morning is whether Yellen has played this game of “chicken” too long?

We are seeing some impressive arguments against the rate hike in a quick scan of business data this morning.

First, and foremost, the National Federation of Independent Business is our with their just-release take on how the business climate looked for small business in November.  Here’s a telling quote under their headline “Small Business Optimism Collapses in November after Three Stagnant Months”:

Uncertainty in DC, federal agencies playing politics and a President that is willing to punish the current economy for inconsequential environmental benefits in the future indicates that business conditions will not be revived anytime soon. Even though there is talk that the Fed will be raising rates this month, it will hardly signal that they are feeling more optimistic about the economy.

Overall, the outlook remains the same with a slow 2 percent-ish growth and there is still not much pressure on prices from Main Street. All we can do at this point is hope for a more business friendly New Year.Bill Dunkelberg, NFIB Chief Economist

Meanwhile, there is evidence that problems in the oil patch are becoming profound.  MarketWatch is reporting this morning that “The case for $20 oil is getting stronger by the day.”

Frequent contributor OilMan2 is heading for a job interview today down in the oil patch.  And he’s run into the damnedest thing I have ever seen in a company mission statement.  We’ve changed the company name to shelter the identity but check this out:

“Mission: The Spirit of Company is the core of Company… The Spirit is rooted in current reality, but it also represents what Company aspires to be thus making it future active. The Spirit is an indivisible synthesis of all three statements. It means manifesting Intensity to Win, acting with sensitivity and being unyielding on integrity all the time.”

WTF does that mean?

OM2 isn’t sure he can get along too well with that kind of a company.  We’ve both been around companies that go off on mumbo-jumbo like “current reality” which us practical “old-hands” wave-off along with the rest of the corporate nonsense instilled by reading one-too-many press releases about their own firms. 

At one point in our conversation, OM2 summed it up this way (and forgive me if I don’t get this just precisely so…)

“George, you know and I know that most software is just “bullshit in a box.”  [BS-IAB] I’ve seen this many times before.   Programmers will go off into wonderland and then there’s a whole separate department that translates the BS-IAB to what’s real and sells…here in THIS REALITY…”

Practical ass-kickers tend to be suspicious of word-weasels who incorporate maintaining any kind of “reality” as one of their missions.  I’m not overly religious, but I leave Reality to God…leave the customers to me.

But so it goes in America, where everything (including corporate bullshit) is monetized.  Google “Mission Statement Consultant” sometime if you don’t believe it.  5.9-million hits. 

‘Scuse me…but are we monetizing the wrong stuff?  Is this what Rome was monetizing in its final years?

More and more companies are evolving these internal bifurcations:  One branch of the company knows (clear as day) what the customer Reality is.  Yet the BS-IAB department is its own alternate reality where algo-speak and run-away “use-cases” rule the day.

(Ures truly was a use-case writing algo-planner and sales guru in federal financial aid management s/w and I saw it all the time.  The software people were on one wing of the building and the sales and admin and overhead lived on another side.  Only a few of us had key-cards that worked the doors both ways…so OM2 is dead frigging right about this “Split Reality” deal in most companies..

If American companies are really “current reality” manifestations of the human brain with the purpose of generating cash flow, then the the sheath that divides the human brain has its analog in key-carded doors between departments.

This is not a new phenomena in business.  It used to be Sales and the Factory Floor.  But now, since software designers are really code librarians, as much as anything, they have evolved the art of bullshit-speak to astounding levels.

If America put into products and inventions what we put into “split reality” crap, we could actually be competitive, again.

And the Current Reality is Unreal

Since my Bro-In-Law is home-shopping, I get to see it every time I look at his real estate choices.

He goes shopping on Trulia and checks out Killeen, Texas.

Finds there are 950 homes for sale there in the under $300,000 range.

Then he wonders “Why are they still building new homes there?”  Since I’m something of an economist and he knows I’m supposed to know the answer to this, he pops the question on me.

The best I could come up with is it’s the result of the National Kool-Aid party.  Is there a secret order to the major banks to loan money are zero percent so all the spec home builders can keep going?

Or, is it the spec home guys are building because they know they can lock-in free money? 

Whatever the reason, it gets us circled around to the Janet in the Window problem.

Question is:  Has she missed it?  Or does that matter. 

I mean in the current “Customer Reality” and in the “spirit of or core.”

Did Sad Bernardino Stop Something Bigger?

So here is something that may have escaped your consideration, but it’s time to roll it out.

As you know, the Sad Bernardino Muslim terrorists who killed the 14-people out there were planning this for some number of weeks.

The MSM is downplaying this, but the story about the timing of a suspect banking transaction to buy arms…several weeks before the shooting…blows the agitprop nonsense about this being a spontaneous event.

The theory I have is that the couple may have actually been tasked with pulling off an even larger massacre, and they might be just one of multiple teams.  But that possible larger attack plan fell apart when testosterone kicked in with the “I’ve got a gun and there are co-workers I hate” came into play on the fateful day.

It leaves this Columbo kind of question hanging:  Were there others getting arms and others getting money when these two crazies started shooting?  In doing so, did they protect us from something worse like a shopping center attack, or something on that order?

We will likely never know, but the question is there to be asked.

And since we know with virtual certainty that the weapons acquisition was seriously pre-planned, what was the rest of the mission and is it still out there waiting to pop?

Trump Stating Obvious

Meantime, a fire-storm of rhetoric has started to rain down on Donald Trump who is saying in no uncertain terms, that until the FedGov can figure out a way to screen all the Muslims who are out of the country where at least some are being radicalized, we should close all the doors and get back to some basics.

This whips up the middle to liberal segment such that stories like this one are coming out.

I do disagree with Trump but only slightly:  If a Muslim (or anyone else) goes overseas, they should be subject to financial surveillance.  We figure they should already be on the watch list up at “the castle” in Provo…

The government has already granted itself power to inspect all your media devices and impound your laptop at the border on return, so it’s not like financial surveillance would be much different.

Besides, all Americans are already under financial surveillance – it’s just we don’t know how tight the screws are what with IRS getting your income and being able to cross-ref to your tax forms.

I mean, that’s what the income tax is all about…self-incrimination.

In the meantime,. Trump should have couched it as “Close the borders or count the dead…”: which will (sadly)most probably  be along too soon.

Comments

Did Janet Miss the Rate Window? — 18 Comments

  1. The female shooter was a soldier hand picked to be the spouse in the online dating scenario . She knew to use Nokia phones for remote explosions a typical trick used in the Middle East terrorism. She was a skilled and trained fighter who came in on the fiance visa . The bad guys daw an opportunity to send her here and used it . I don’t think I am wrong .

  2. Deju vu. I was speaking with my wife as well. Just last night we were discussing the fact that we think these two were going to do something much, much, bigger.., but something happened that caused them to act. I’m really wondering what was REALLY supposed to happen!

  3. “America has roughly $18-trillion in public debt and it all needs to be financed.”

    Do what??

    How much blood, sweat and tears did it take the banksters to produce that loan money?

    Answer : Zilch.

    Next question:

    How much blood, sweat and tears will it take for we the (shafted) people to pay back that loan money (+ interest)?

  4. George, I thought you were an “awake” individual.
    Muslims are the present scapegoat sheeple people buy into.

    Researchers have provided plenty of info to prove San Bernardino shooting’ was a false flag from the get go…

    …witnesses say three white men – that would be CRAFT International –
    remember them from the Boston shooting (the 2 boys were not guilty with so called pressure cooker bombs) – and both had drills going on. DOH. Tis their MO

    http://www.infowars.com/san-bernardino-false-flag-multiple-witnesses-reported-three-white-men-shooting/

    ‘Craft Intl mercenaries carried out San Bernardino shooting’
    http://www.presstv.ir/Detail/2015/12/08/440834/Craft-International-mercenaries-San-Bernardino-shooting

  5. The 1st amendment says freedom of religion, freedom of speech. We cannot stand by Trump saying no Muslims in our country,(or Mexicans). Who’s next? Buddhists? Jews? Pacifists? You have to understand how dangerous this hate speech is. I cannot believe the Republican Party is letting their front runner for President get away with this. This will be the end of the Republican Party. They don’t even say anything, they don’t reign him in. And now, same with you George. You should be ashamed. You should be shouting about how wrong he is. Of course we don’t want terrorists here, but we have to be brave, and know that not all Muslims are terrorists. When they start testing our religion, it will be the end of America as we know it.

    • Don’t be ridiculous! The Constitution applies to whom? AMERICANS. Not people who want to come here, replace constitutional laws with sharia and so on. The first Amendment is for who? (hint: Not the whole world) Not foreigners who don’t want to jump in the marvelous melting pot.
      I also don’t like the UN because it is a foreign power claiming providence over the U.S.
      As you an American first, or a New Worlder?

  6. Spot on about Yellen writing 450 Billion dollar checks for us to cash. So a 1% increase is almost 2 Trillion a year?

    Funny how politicians keep saying we are spending money our children will have to repay. You know, I’ve talked to my kids, they have no intention of paying it back. “Little Johnny, will you spend your money making years giving it all to the Feds to pay my bill?” Uh, no is the answer to that question. Wait till the lenders figure that out.

  7. George, I think Ure spot on with Sad Bernadino being something larger. That’s been my take on it, too. As a matter of fact, I was explaining this very thing to my wife last night.
    If the reports of stock piles of pipe bombs and other accoutrements of mass destruction are to be believed, these two were either planning (or part of a plan) of something much larger, but blew it by being wound too tight AND/OR they were acting as a depot/distribution point for other active cells. Either one is plausible and worrisome. Now, we have news of sizeable bank deposits….

    MAJ-13

    • Majestic, Kim saw this, but she didnt know she saw it until now. It was in her language. In not so many words, “Break the bank, pay up.” Juxtaposed to san Bernardino. Which i find super funny.

      Good job to the light guy.Hmmmm

      I suppose no more comments from me are necessary. You are all well on your way.

      Look deeper into the way of things and you will amaze yourself.

      I noticed the other day adventure has Georges name in it. Lol

      :)

  8. Sorry George, but you got sucked in again. Eyewitnesses to the San Bernardino shooting are reporting that the shooters were three tall white men. And the SUV. Check the pics, you will see that ALL THE WINDOWS on the SUV were up and then shot out. The police reported receiving fire from the SUV, which is impossible because that first round in a closed vehicle will burst eardrums. And then there is the issue of the bodies in the SUV. Laying on the ground in HANDCUFFS. The police do not handcuff dead people. Earlier reports by police indicated they captured a runner from the SUV. That report will disappear quickly.

    Parroting mainstream reports will get you nowhere as either a blogger or a journalist these days.

    I consider ANY information in which the government is involved to be no more real than a tv or movie script.

    Ten years ago I began observing and sharing that the news reports were looking like the tv shows and movies of years prior and that the gap was closing. It looks like that gap is closed now. It is really difficult to find a script that does not have a logical flaw. The same is true of news reports.

    The younger generations are being taught how to interact socially by the popular tv programs. Something our generations learned by hanging out with the adults. Watch a couple of the most popular comedy shows. It will scare the hell out of you. Even the criminals are acting out tv scripts.

    The two most popular concepts being pushed is the word “promise” and the concept of blame/fault being assumed by or assigned to the wrong party.

    And in the interrogation room, law enforcement ALWAYS LIES, but if the interviewee is not forthcoming or lies it is a threat of, or a charge of impeding an investigation. Pretty hard to win in that scenario. Especially in real life.

    • I wish I could afford to go to Ecuador. And that George would let you write his column. You are so correct and so far ahead of everything that he says that I think yours would make much better reading. Send me the fare to get there and I will volunteer to work for you for free. Thanks for being on this earth. I cannot write as well as you guys only being a civil engineer but check out my whole web site — then see if you can find one flaw or mistake in it. If people knew the truth — it would change the world.

  9. Traditionally more government control and scrutiny is a ‘progressive’ idea, George – sure you aren’t pandering to something you claim to reject?

    Sounds like you want to avow ‘gun control’ for certain groups based on religion. Review the comments of Pastor Bonhoffer, who died under the Nazi regime regarding himself not being the target – until he was – and there was no one left to protest . . . Either freedom of expression (and right to form collective groups i.e. religion) for lawful persons or freedom for none – no middle ground!

    • I had a similar discussion with a young man on Twitter. You can read my own response(s) to that …hypothesis: https://twitter.com/GrumpierRedNeck/with_replies

      It was a lengthy discussion (for twitter), so scroll down a bit and begin from the beginning.

      Hint: Just because someone says something you don’t understand (or don’t agree with) doesn’t mean that he’s a fascist.

  10. William Bennett put out an article on why the Republicans and Democrats will not allow Trump to be president even if he has to be assassinated. He will not only be after the Muslims, but will also be after the crony capitalism that is going on in Washington. It is a great read, whether liberal or conservative, and really gets to the point why no one ever goes to jail when the Dept. of Justice should be hot on the case or why no one has the nerve to take down the President. I will try to add the article.

    DONALD TRUMP: WHAT THE OLD BOYS FEAR MOST! by William Bennett

    [George Note to Readers:
    This comment was edited because a) it was too long b) the length of comment would have exceeded our guidelines for quote under Fair Use and c) the claims repeat something that is demonstrably NOT true.
    An Interesting Take on Trump

    Conservative commentator William J. Bennett did not pen an essay hypothesizing that Donald Trump would be killed before he could be elected President.?
    http://www.snopes.com/bill-bennett-donald-trump-quote/

  11. With regard to San Bernardino,they had been doing drills, which is typical of a false flag. “From the LA Times:

    At the Inland Regional Center, where she’s a nurse, the staff works with clients and parents of clients who are sometimes angry. They have active-shooter drills every month or so.

    “Drill started,” she texted her husband, Mark, around 11 a.m.

    She walked to a window nearby and filmed a video as law enforcement sprinted toward the building.”

    I mean, what are the odds???

    “What are the mathematical odds that a building where law enforcement has been “active shooter” drilling month after month would be randomly hit by active shooters? Nearly zero, of course. Similarly, of all the buildings in Los Angeles, how many are used by police as training grounds for monthly shooting drills? Virtually zero.”

    Learn more: http://www.naturalnews.com/052196_active_shooter_drills_San_Bernardino_shooting_Inland_Regional_Center.html#ixzz3tjxtXhwH

    If San Bernardino stopped something bigger, that doesn’t change who is behind it. Just sayin’. I always pay attention to first on the scene reports. During 9/11 the first reports were that the building “imploded.” After that, you never heard that word used again. The weeks spent spinning the story after it happenes are mostly manipulation and distraction.

  12. After reading a Steve Quayle alert about a gun show incident in Spokane on December 7….you may be on to something. Scuttlebutt on one of the alternative sites a few weeks back reported on a future “day of rage” type of thing; like a Tet Offensive upon us. Maybe this was it.