Markets: Bad News is Good News! (But it’s really BAD)

The markets are on crack.  A special kind of crack called “Easy Money.”  We’ve gone from Helicopter Ben to Jump-shot Janet. Let’s  run through a nickel-bag’s worth of data:

    So what does the stock market do when the Fed hints in its meeting minutes that there might be a  delay in interest rates going up?  The market rallies!

    The lone (but very reasonable) dissent noted in the Fed Minutes came from Board member Narayana Kocherlakota:

    “Mr. Kocherlakota dissented because, in his view, the new forward guidance in the fifth paragraph of the statement would weaken the credibility of the Committee’s commitment to its inflation goal by failing to communicate purposeful steps to more rapidly increase inflation to the 2 percent target and by suggesting that the Committee views inflation persistently below 2 percent as an acceptable outcome. Moreover, he judged that the new guidance would act as a drag on economic activity because it provided little information about the desired rate of progress toward maximum employment and no quantitative measure of what constitutes maximum employment, and thus would generate uncertainty about the extent to which the Committee is willing to use monetary stimulus to foster faster growth.”

    Now, let me explain the mechanics of this, in case you’re not clear on it:  The reason the Fed is not already raising rates is that the the economic recovery has been buried.  Hiring more police and bureaucrats is just barely able to keep up with core jobs going down the tube.  The unemployment rate is stuck at 6.7 and institutionalized  unemployment has become a sad fact of life.

    Let me put it this way, if the coffee hasn’t hit yet:  Recovery is sick and on life support.

    What the Fed minutes mean is what?  They are admitting that things are bad!

    So what rally?

    Well, we get back to interest rates.  The longer rates are held low, the longer the hedge funds can get (essentially free) money from the Fed though puppet bankermediaries, and this gets spun up and poured into even more stocks.  The higher they go, eventually the further they’ll….what?

    And since there’s not enough IPO action of late, the existing stock prices are bid up anyway even if sales are flat and the profits go offshore.

    So that’s why the market screamed ahead yesterday:  the bad news (that the Fed might not have the pricing power to raise rates as soon as their own press hype held) means that the upper class will continue to get free lunches like they’re going out of style.

    If there was anything to the notion that trickledown worked, we would see a 20% across the board increase in money for Social Security recipients.  Oh, and the money’s there if anyone in Washington would fix their low-T issues.  For instance:

    There are wire service reports that there are $2.1 trillion in untaxed US corporate profits laying around offshore.  Got that?  UNTAXED.

    Let’s run some numbers, shall we?

    OK, let’s assume that $2.1 trillion didn’t all pile up in the last year.  Let’s say it’s only $1-trillion worth.  And let’s then figure that could all result in a 20% corporate tax revenue increase.  $200-billion.

    Now, it says over on this Social Security site that we have 63.4 million people on social security.

    That means that IF the government would get off its ass and go collect the tax-evading money due, we would be able to send out a $3,000 bonus check to everyone on Social Security this year.  ($3,154 and change to be more precise.)

    And that would jump-start the bejesus out of the US economy.  Some seniors would buy a new car, eat out now and then, and in the even, since we grays are always handing money out to the kids, this would really “trickle down” to the family level and would allow employers to raise wages and all kinds of other happy outcomes.  Force multiplier.

    Solutions like this should be obvious as hell to anyone with a lick of common sense.  Oh, wait.  I may be at the root of the problem here… How else can government officialdumb keep ignoring the chance to snag a fat gift for We the People that keeps on giving? 

    THE ANSWER is simple, but ugly:  Payoffs to the people in office.  Via unlimited campaign dough.  K-Street Mafia.  Interstate election buyer co-ops…you know the drill.  You’re the one being drilled here…

    Who needs a Don Corleone when there are special interest groups with unlimited dough?  Political crime is the new organized crime and it’s been legitimized by the courts.

    Between taxing corporate profits and selectively hitting back at K-Street America could be won back.  But the fix is in because good people – people who went to Washington with integrity – have failed to keep their on on the real problems of this great land.

    While attorney general Eric Holder, argues “vast discretion” over the enforcement of laws (selective enforcement/tolerance policies), I’d venture the American public is sick of the ruling  financial class which just got a green light from the Supreme Corporate Court to keep out-bidding the regular people who live in America. 

    Ain;’t gonna happen, but it would be nice.   If Holder can’t answer a  subpoena in more than a year, it’s hoping too much that he’ll be able to tax offshore money in the short time before his boss if out.

    Corporate feudalism is the future.  The Obamanista “change” was just another marketing slogan repeated ad nausea to the simpleton voters.  And sure, it suck to be us…because the Fed minutes belie the truth:  that recovery is more smoke and mirrors than walking-around money in you pocket.

    And that’s why the market rallied: Out of your pocket, safely into theirs.  America’s just been bent over again.

    More after this.  And after my blood pressure comes down enough to continue looking through the crap rolling off the wires this morning…

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    Nevada: Research on “The Jackboot Cycle”

    My consigliere counseled me Wednesday:  “What the government is guilty of in Nevada is gross stupidity…”

    It was hardly a breakthrough thought, since I’d just read that story about the town of 7,.000 in Ohio getting a tank… but still, fair point.

    The long story made short is a Nevada rancher who disputed land grazing bills from the Bureau of Land Management is now surrounded by 200 federal agents who are picking up his cattle to pay the bill. And it is not like this hasn’t been going on for a while.  The court order against Cliven Bundy in the case has been on the books since July 9th of last year:

    IV. CONCLUSION
    IT IS HEREBY ORDERED that the United States’ Motion for Summary Judgment (#18)
    is GRANTED.
    IT IS FURTHER ORDERED that defendant Cliven Bundy’s Motion to Dismiss (#28) is
    DENIED as moot.
    IT IS FURTHER ORDERED that Bundy is permanently enjoined from trespassing on
    the New Trespass Lands.
    IT IS FURTHER ORDERED that the United States is entitled to protect the New
    Trespass Lands against this trespass, and all future trespasses by Bundy.
    IT IS FURTHER ORDERED that Bundy shall remove his livestock from the New
    Trespass Lands within 45 days of the date hereof, and that the United States is entitled to
    seize and remove to impound any of Bundy’s cattle that remain in trespass after 45 days of
    the date hereof.
    IT IS FURTHER ORDERED that the United States is entitled to seize and remove to
    impound any of Bundy’s cattle for any future trespasses, provided the United States has
    provided notice to Bundy under the governing regulations of the United States Department
    of the Interior.

    So in comes the government to collect its due.

    Except that they came in with helicopters, road blocks, and more.  Which has many people in Nevada upset including one reader who advises us:

    I’m deeply involved in the ongoing effort to transfer the Federally managed public lands to Nevada as promised when Nevada joined the Union.

    Nevada BLM was found by a judge in  the Hage case to have committed fraud and to have been in violation of Rico.  Nevada BLM is a criminal organization.  Use of snipers on Nevada’s public lands is outrageous, and the Clark County Sheriff is negligent and in violation of oath in not enforcing state law.

    All of which brings up a critical question every state legislature in America ought to be asking at the end of all this:  Should the federal cessions of land be rethought?

    The state cessions are those areas of the United States that the separate states ceded to the federal government in the late 18th and early 19th century. The cession of these lands, which for the most part lay between the Appalachian Mountains and the Mississippi River, was key to establishing a harmonious union among the former British colonies.

    The areas ceded comprise 236,825,600 acres (958,399 km²), or 10.4 percent of current United States territory, and make up all or part of 10 states.[1] This does not include the areas later ceded by Texas to the federal government, which make up parts of five more states.

    The further west you go, and the later in history, the murkier things become.  Don’t forget that the Texas Independence Movement figures the federal government still owes the state (in 2003-2004 dollars) about $7-trillion for the lands it got. 

    Present legislatures and (effectively) eBayed politicians are not likely to make an issue of such facts as cession of land to the central government.  But the Nevada case puts this whole issue back on the table. And it’s one that won’t be gong away any time soon, as the central government continues to kick the public of public lands.

    Oh, and those endangered desert tortoises so honored by the environmental groups?  Guess whose government is going to euthanize hundreds of those?

    Cliven Bundy may have a back bill owing, but the government has clearly lost its way in a Waco/Ruby Ridge kind of way.  All that remains is for Eric Holder to fly up to Nevada for a perfectly disgusting replay of Janet Reno’s act at Waco.

    There’s about a 7,711 day cycle here and we expect it will be wrapped up not later than May 30th.  It’s yet another news cycle to pop into our www.nostracodeus.com project:  A 21.13603 year jackboot cycle. 

    Don’t laugh:  From Hitler’s Beer Hall Putsch in 1923, 7,711 days gets us to December 18, 1944.  And things were winding toward the end for them older jackboot types back then. And 50-days after that, FDR, Churchill, and Stalin were meeting at Yalta.

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