This morning’s report is a bit longer than usual, but with good reason. Despite the distractions of small-fry stories of late (babies and trials and such) there are a number of very big stories like the NSA spying mess which deserve thoughtful consideration because they will steer the country’s future. So read this morning’s Coping section below.
Since our roots are economic, we start with the generalization that “You know your country is in trouble when a lousy 1.8% annual growth rate” spurs the Dow toward new all-time highs.
Have we lost our freaking minds?
Not only has the ring-around-the-nose crowd ignored historical precedents, but worse, seems damn few are able to comprehend that living on borrowed money eventually ends badly. Especially when the bookies we’ve been borrowing from (can you say China?) come knocking looking for dough.
While economic leadership both in Washington and NY should be checked into rehab, out comes this morning’s report on job cuts from Challenger, Gray, and Christmas:
“CHICAGO, August 1, 2013 – Job cuts declined slightly in July, as employers announced plans to reduce payrolls by 37,701 workers, down 4.2 percent from 39,372 planned layoffs in June, according to the latest report on monthly job cuts released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
Last month’s total was 2.3 percent higher than a year ago, when 36,855 planned job cuts were recorded. Employers have now announced 296,633 job cuts since January 1, which is 7.3 percent fewer than the 319,946 job cuts announced in the first seven months of 2012. At the current pace of downsizing, which is averaging 42,376 job cuts per month, 2013 will come in below the 2012 year-end total of 523,362, which was the lowest annual total since 1997 (434,350). “
Still, no one seems to care and this week’s revisions to how GDP is calculated seems intent on continuing the national delusion as long as possible by a sneaky upward revision in GDP based on “virtual goods.”
With the market set to open a hundred points higher this morning, the next upside level for the S&P seems to be the 1,740 range. In the meantime, tomorrow morning we’ll get new “offishul” unemployment data which will no doubt show the continuing decline in the number of ‘Mericans still working….
Yet despite the certainty of collapse when the dollar dies in a heap, anything less than disaster oughta goose the market up even more.
No point checking into rehab until we have to. At gunpoint.
Speaking of the Loan Makers
Loved the email from our resident war gamer this morning, since we’re on borrowing from China…
“George, I enjoy a nice container of Chinese now and then, but it seems my “live in fame or go down in flames” USAF plans a different way to “contain” some (or all) Chinese.
The rub with treating a rising superpower like one’s enemy is that they might actually BECOME one’s enemy.
&
But then, for all we know, they might have ALWAYS been the enemy. Someone must assume that mantle for the world to be right. So look for some strategic te ta te between the Dragon Empire of the Eastern Pacific and “the land of the free” in the days and years to come. As you frequently remind your faithful legions, “everything is a business model.” Cheers, “
Maybe Robert Ringer’s book is still making the rounds. Winning Through Intimidation.
Near as I can figure it, my friend, its an infinitesimally small move from “creditor” to “enemy…. Now, since we’re in the moneychanger mindset…
Creative Mortgage Solution?
Keep an eye on Richmond, California, where the city is trying to use eminent domain to take over a block of 624 private homes which the city could get for 25-cents on the dollar.
Am I the only one who notices that at the macro level, mob rule is arriving with government taking of private property likely to go crazy?
Just this morning there’s discussion in New Jersey of using eminent domain at the Jersey Shore.
There may be a silver lining in eminent domain, however:
Near as I can figure it, one way for Detroit to get out of bankruptcy would be to employ some creative finance: Use eminent domain to confiscate all property that’s unoccupied for six months for nearly nothing, then refi it, and lease it back for 99-years or offer it for sale dirt cheap. Take the spread and have fun. Detroit could own lowest cost of living of anywhere in ‘Merica.
So much so, in fact, that “Detroiting” could become a new national model….of course it screws the CMO holders, but mob rule doesn’t care, even if that would trash CMO holders which might include banks which in turn would….forget that, the only ripple that matters is this one in today’s muni finance world.
Continuing with my Structured Finance 503 lecture, selling the existing city to a New Detroit Public Corp, (a municipal corporation) then allows us to strip out the retirement obligations of old Detroit, which in corporate terms would be a leftover shell with only retirement obligations and those could be dumped on Obamacare and Social Security when our buyout of the Old Detroit ends a few billion short of what they need… sh*t like this is common on the private side, so wtf, why not in public finance?
New Detroit becomes a city-state unto itself and a little India of the Midwest…
Hell, I should run for office.
Mexico’s Slo-Mo Revolution
Of course the MSM isn’t calling it that, but the drug cartel whacked a Mexican Navy admiral this week and so now arrests are underway.
Between Mexico and Afghanistan, do we need to invent a new word like drugvolution?
More After This…
“Designed in California”?
While a certain computer company mentions where a lot of product engineering is done, we notice the report that they seem, according to this report, to be parking $82.7 billion offshore.
Of course, Apple is not alone: HP, Intel, and Google have many billions offshore, too. Clearly, designed in California must refer to tax planning=.
I figure if a product is sold in America, it oughta be taxed as though made here, since to do otherwise simply shoved jobs to India and China and no, that’s not protectionism so much as self-preservation.
Especially since Fearless Leader is planning to give yet more tax gifts to BigCorps and punish small business with still higher tax rates. You can tell who’s administration has thrown in with the corporate coup, huh?
Quake Watching, Doom Porning
There was a post on Godlike Productions last night which predicted a 10.0 -plus quake this morning in the Marianas Trench/Challenger Deep area and said everyone should seek shelter.
We’d sort of los interest in global coastal events, but the specificity of this one made it past our filters. If you’re reading this, it didn’t happen. If you are reading this after the fact, then whoever this poster is deserves immense respect and someone in government oughta talk to ’em about who their connection is and how that works.
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Meantime, as we sailed last “doom time” we note that disaster porn is as rampant as always. Just the other day I got flooded with emails about the much heralded “black hole in the sun” report that had people scrambling to get under the bed.
With about 30-seconds of clear-headed thinking the worries were dismissed around here: First because the photos of the sun were several weeks old and thus any “piece that broke off and was heading for earth” should have destroyed the planet weeks ago.
Then there’s the little matter of it only being an area of dim infrared which (not to be an I-told-you-so’er) is common because the Sun is having an epic fail solar peak which will leave the earth much, much cooler over coming years.
And if you do a simple search on “record lows” you’ll find that this past weekend in Illinois involved records to the downside. The cold drew down the Mississippi to St. Louis, too.
Since weather moves west to east, the cool in the northeast today and colder’n heck up in the Pacific Northwest.
On the other hand, the temps here in East Texas continue bumping along at relatively warm upper 90’s for the most part and we don’t have any significant outlook for rain.
All of which is continuing the Drought Bowl conditions and these, in turn, will likely push food prices up still more.
Still, the disaster porn types cheerleading for a global coastal wipeout may be able to beat the soaring price of protein: Having fish delivered by a mega tsunami is certainly a novel idea.
The Big Bulger Question
The defense in the Whitey Bulger case up in Boston is entering the popcorn phase today. In case you’ve forgotten, Whitey’s been accused of multiple murders as a mob boss over the years and if that’s where the story ended, fine, just another trial.
But, it’s not.
Bulger was a long-time informant for the FBI and there seemed to be a system of protections in place that extended all the way to Washington CD and FBI HQ and maybe the Justice Department, in this one.
The million dollar question, which could be asked of Bulger if he makes it to the stand is for the defense to ask one very simple question: “Did the FBI or other law enforcement officials every suggest someone you should kill?”
My old “news nose that knows news” wonders if before Washington could just fire drones, if they didn’t have other means to shut people up – for good?
More after this…
