Ah, we expect the Dow to fall a hundred, or more, before the smoke clears today. The reason, simply enough is the Federal Reserve decision to stay the course of cheap money:
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress–both realized and expected–toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored. However, if incoming information indicates faster progress toward the Committee’s employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.
When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.
The problem we have is pretty simple: The government is doing everything it can to hold up markets going into next week’s election.
But the bigger issue is the Dual Mandate of the Federal Reserve. You see, maintaining the quality of the US dollar is not something the Fed is really interested in. Their “dual mandate” is maximum employment and, at the same time, a target inflation rate of 2%.
No mention of a solid buck. And it’s a fine example of how national policy runs about 5-10-years behind the REAL economic problems facing America.
Oh, the fact that we will have structural employment in the 30-40% unemployed range by 2025 because of robotics.
The arrival of robots to be bellmen in hotels, the self-driving veh8icvles that can wipe out truck drivers…oh the list is going every day. Even the fast food jobs are going away as Momentum Machines replaces the whole back-end of fast food with smart automation. They call it the “next industrial revolution” – which is far more transparency than we are seeing from government on point.
Yet even as Google has announced that it will have a machine capable of programming itself (which will make computer programmers OBO’s, too) we see the Fed is focused on a problem that doesn’t have a solution; at least with the current economic paradigm.
Sound money is not an option. And you know why?
Because sound thinking is not an option in today’s politically appointed world.
The good news is that we get to vote next Tuesday. The bad news is we get to vote from on a slate of political hacks who don’t have a clue, save a few first-timers in local politics. But get up the food chain a ways?
No one sees what’s coming and so we stumble into the future blind.
While the idiocracy of the democraps and republicons keeps America divided, the real vote Tuesday isn’t even on the ballot. The vote is a choice between two corrupt parties that can’t articulate a future except the one bought by campaign contributions from corporate interests that swamp the meaningful concerns and input of the general public.
Election Influencing Plans
Speaking of which, we have to point out the problem of the Council of La Raza. They are promoting the Washington Post’s recent guide to where to vote where you won’t need voter ID.
By breaking un-American activities up into “legal” bites, the forces tearing apart America will no doubt escape being called out, let alone indicted.
It’s the modern pattern of corruption, you see: A move here, another move there, yet the aggregate result would in an earlier period of history be labeled treason.
Just like cash may not change hands from lobbyists, but “grassroots” rallies get organized on cue, and so forth. “Workers” and “nursing home residents.” I’ve seen it first-hand.
I, for one, think that the same care should go into voting that goes into riding on a commercial airline flight: Ticket (voter registration) and a government issued photo ID.
Yet while the Libs don’t have a problem with airport security, they do, it seems, with something just as central to our national security. Either I missed something or (perish the thought) they did.
More after this…
New GDP Figures
Just out from the Bureau of Economic Analysis:
Real gross domestic product — the value of the production of goods and services in the United States, adjusted for price changes — increased at an annual rate of 3.5 percent in the third quarter of 2014, according to the “advance” estimate released by the Bureau of Economic Analysis.
In the second quarter, real GDP increased 4.6 percent.
The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and “Comparisons of Revisions to GDP” on page 5).
The “second” estimate for the third quarter, based on more complete data, will be released on November 25, 2014. The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by a negative contribution from private inventory investment.
Imports, which are a subtraction in the calculation of GDP, decreased. The deceleration in the percent change in real GDP reflected a downturn in private inventory investment and decelerations in PCE, in nonresidential fixed investment, in exports, in state and local government spending, and in residential fixed investment that were partly offset by a downturn in imports and an upturn in federal government spending.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.3 percent in the third quarter, compared with an increase of 2.0 percent in the second. Excluding food and energy prices, the price index for gross domestic purchases increased 1.5 percent, compared with an increase of 1.7 percent.
The two highlighted areas tell the story: The economy is cooling – again. Down more than one percent on an annual run rate basis.
But of course, no one will think this through before Tuesday…but there’s the data for you to consider.
Dow futures were down about 50 after the release.
Ebola: National Schizophrenia
As soon as we get past elections, look for the pols within FedGov to come clean on the risks attendant to Ebola and a lot of other problems.
We already see the candor increasing with works from CDC on the dangers of sneezing out this morning.
Meantime, the rattle-trap of public policy continues unwinding: The US is still going with open borders, while Australia is not. Regular civilians can return unhindered and minor tested from West Africa, but US dot-mils are going to a 21-day chill in Italy.
That sets off alarm bells as “asymmetric policy.”
Meantime one of those “stories from the Beltway” comes along from our ex-war gamer pal warhammer:
I was having lunch with several folks from the DC beltway area yesterday, and the ‘E’ word came up.
One guy made the analogy to World War Z, the book and Brad Pitt movie regarding how various nations are handling the reported outbreak, except the “S2 – speed of spread” was entirely too slow. Another gentleman calmly sipped from his beer – yes, a very beery lunch J – until he was asked what his thoughts were.
He replied with two words: “False flag.”
Oh, he didn’t deny that there was a spread of the contagion, or that lives were in danger. He simply, logically stated that the number of outbreaks, means and speed of transmission did not require the local, state, federal and international response currently underway.
My response? “Why do you think it’s a false flag?”
His answer: “Control.” Injecting federal and military personnel into the Ebola equation gives those in control ‘more’ control. “Control of the media. Control of the players [medical and military].”
His response, while unexpected, was entirely plausible and fairly logical. He admitted later in the conversation that the theory was not his – he heard it on a television talk show between some panelists discussing WW-E and, he said, “it made sense.”
He certainly got me thinking, particularly about all those ‘to be’ quarantined military members sent to front lines of WW-E. They’ll literally be off the map for 21 days. If the false flag theory is correct, that’s three weeks for somewhere between 1,000 to 4,000 troops to disappear without a peep because they are officially “quarantined.” According to new releases, most of these WW-E front-liners belong to the 501st Aviation Regiment, part of the Combat Aviation Brigade which is attached to the 1st Armored Division. Simply put, they are a ‘combat’ unit with a standard medical support contingent, not a specialized medical or humanitarian assistance unit. They are trained to fight and kill the enemy, not Ebola or any other pathogen.
1-4,000 highly trained warriors sealed away, unreachable and untouchable for three entire weeks. Put that in your pipe and slowly toke on it while imagining all the various Tom Clancy type scenarios that could ensue! Not saying that’s how it is or how it will be. I’m just sayin’!
If any of the events surrounding Ebola make more sense than this, please raise your hand. Or, better, write it up and send it along. Ebola is not contagious via email.
Once the demos win “unexpectedly” Tuesday and the market collapse begins…well, let’s wait on events, shall we?
Short column this morning due to my practicing up for daylight savings time (in coping section, following). If you care that the Giants won and that tomorrow is Halloween, you’re still living in the media bubble. Good luck getting over it…recovery is possible, but it will leave you cynical and somewhat depressed.
Think of it like waking up every morning and realizing that you live on a feedlot…