So, How’s That Whole Economy Thing Working Out?

I think we’ve all wondered just how long an economy built on fake money and debt can keep going – we may be about to find out.

Forget about the stock market slide for a bit – at any rate, it might shoot up 500 points tomorrow on a rumor that the Chinese central bank is going to print up 67 trillion-zillion Yuan. But there are some things which make you wonder about how things are going:

Walmart is going to close 269 stores. Of course, they also plan to open some stores – but it will be a net reduction in Walmart locations in 2016.

Conveniently after the market closed, the Fed estimated 4th quarter 2015 growth at a mere 0.6%.

Empire State manufacturing drops to a low not seen since 2009.

GM/Ford credit risk is pretty high.

Corporate earnings are not exactly what you’d like them to be.

Sports Authority decided they’d rather not pay their debts right now. The energy isn’t right, I guess…

And, a house which has sat empty in San Francisco since 2000 and has holes in the roof and fire damage is listed for $600,000.00.

If all of this – and there is plenty more out there – doesn’t give you a whiff of 2008, then I don’t know what will.

To be sure, I’m ready for some magical trick of debt and fake money to pull us through at least until the day after Election Day. The Powers That Be have managed to keep this ball in the air for seven years and I’m not at all certain they don’t have more in their bag of trickery (though getting unemployment down to 5% by magically removing people from the labor force appears to have gone as far as it can…to get it to 4.5% would take some really interesting “calculations”). But the fundamental problems remain:

1. We have far more debt – personal and government – than we can repay at the moment. This is because

2. We don’t make, mine and grow nearly enough to pay for our debts and current operating expenses and

3. Far too many people are out of the productive economy for the productive economy to support.

Eventually, it all goes smash. Whether it happens this year or next or in 2019 or what have you is immaterial – it will go smash unless and until we radically alter how we do business. We need to balance the budget (it could be done in under five years from any day we say, “go” on); we need to remove the taxes and regulations which prevent full exploitation of America’s vast resources; we need to make welfare far more inconvenient than working (and thus force people back into the productive economy if they are in any way capable of participating). All of these things are currently impossible – because the political class in power doesn’t want to do it. And they don’t want to do it because doing it would remove the need for, precisely, the political class in power (ie, politicians who “solve” problems and “do the business of the American people”). Will 2016 usher in a different sort of political class? Probably not – even electing someone like Ted Cruz would only be a step in the right direction…but unless someone is really willing to go to the mat (like Scott Walker did in Wisconsin) to take on the deep, structural reforms, all we’ll be doing is, at best, delaying the day of reckoning.

Ok, So Maybe the Markets are Getting Pretty Bad

Haven’t paid much attention to the global crash in stocks over the past couple weeks because I’ve been figuring, after all these years, that the central banks would be able to make them go higher before things got bad. I know full well that an economy based upon fake money and debt cannot go on forever, but after watching it keep going for 7 years, I figured they’d be able to keep the ball in the air for a few more years. But, maybe not – from Zero Hedge:

FACTS: By midday break, nearly 2000 stocks down 10% daily limit in Chinese market — only 13 stocks up; Shanghai benchmark index down 8.45%

And:

…It is unclear just what is going on, or whether some prop desk or hedge fund just got tapped out, and/or how the Fed will react but the last time we had action like this, the Fed confused a liquidating SocGen trader for an economic collapse, and cut rates by 75 bps in January of 2008. This time it does not have that luxury.

Indeed – back in 2008, the Federal Reserve – and pretty much every other central bank – got into money-printing and zero percent interest to support the collapsed market: what do they do, now? I don’t know – but we’ll see. I was fully expecting the DOW to sky rocket on Monday morning after Friday’s sell off…and that still might happen. We’ll see.

Another Monday Comes

We just can’t avoid them, now can we?

Seems that whole economy things still isn’t working out as well as promised.

ObamaCare – the disaster that keeps on disasting:

State-run health insurance markets that offer coverage under President Barack Obama’s health law are struggling with high costs and disappointing enrollment…

…”The viability of state health insurance exchanges has been a challenge across the country, particularly in small states, due to insufficient numbers of uninsured residents,” said a statement from the office of Hawaii Democratic Gov. David Ige, announcing last month that his state’s sign-ups were being turned over to the federal government. (emphasis added)

Insufficient numbers of uninsured residents? But, wait – weren’t we told of tens of millions of uninsured who were all going to die horrible, painful deaths unless we passed ObamaCare? Could it be that – and I’m just spit balling here – they exaggerated the numbers of uninsured in order to create a crisis which they would not let go to waste?

Remain Calm: All is Well!

Just had to put this up from Zero Hedge:

China Bans Use Of Terms “Equity Disaster” And “Rescue The Market”

…And so, with every attempt to manipulate the (Chinese) market higher falling flat in the face of selling pressure from the hairdresser/ farmer/ banana vendor day trading crowd (which has now thrown in the towel on the whole “it’s easier than farm work” theory and now just wants to break even and head for the hills) the only thing left for China to do is “fix” the narrative.

In other words, when banning selling doesn’t work, the logical next step is to ban talking about selling

…So apparently, Beijing will now prevent journalists from accidentally jawboning the market lower so that Party mouthpiece media outlets are free to jawbone the market higher.

Needless to say, we doubt if this hail Mary attempt to rescue the market will do anything at all to save China from its homemade equity disaster.

Indeed. I haven’t paid too much attention to the market slide in China because I just figured the Chinese government would order stocks to go higher – telling the money bags in China that they’d better buy or else, ya dig? But if China’s market has got a huge number of small traders who are now getting burned…well, you can shoot a dozen bankers who don’t cooperate: its a much more difficult prospect to shoot 100,000 small investors who are bailing out.

There is one thing I do know about markets – when average folks start borrowing money to invest in it because it will always go higher, then it is crash time.  We’ll see how this plays out – but China has already lost $3 trillion in stock value since June…ain’t looking too pretty.

Attacking Big Corporation as a GOP Campaign Issue

See? It’s not just me any more – Glenn Reynolds (Instapundit) weighs in on how the GOP can leverage a bit of anti-corporatism for electoral victory:

…the fact is that many big businesses are unpopular with the public, aligned with the Democrats, and wide open for attack. And after eight years of the Obama administration’s naked cronyism and support of Wall Street even as the middle class has suffered, the opportunities are there.

One of the most appealing targets would be the tech industry’s wage-suppressing hiring habits. Not only have tech giants like Apple and Google engaged in what a federal court called an “overarching conspiracy” to prevent wage competition, but Silicon Valley firms also abuse H-1B visas to bring in immigrant competition at lower wages, a practice that’s now spreading to other industries. (In Los Angeles, Southern California Edison is firing workers and replacing them with immigrants now)…

Reynolds goes on to note how big corporations – especially big tech – are abusing the H1-B visa program to get rid of well-paid American workers and bring in low-paid foreigners, thus abusing both Americans and foreigners in the name of increased corporate profits. That is just one in a very long line of issues where Big Corporation is working against the United States. We on the GOP side have got to wrap our minds around the fact that big anything is bad. Once a concentration of power and wealth exceeds a certain size, it becomes baleful…and must be controlled carefully, lest is wreck everything. We understand this regarding things like the Department of Education, but we’ve failed to understand that General Motors is just like the Department of Education…an bureaucratic behemoth most interested in using raw, political power to preserve itself.

It is the free market we must defend – not those who are on top of the market and who are abusing their position. That the leaders of these corporations also largely support Democrats (or are at least de-facto liberals), just makes attacking them doubly advantageous for us. It becomes best of all when we realize that a lot of people who vote liberal (but who are not particularly liberal, themselves) can be moved to vote for us when we do this. Defending the worker against ruthless exploitation by Big Tech is just a splendid way to move the needle in our favor…let Democrats defend the H1-B visa program, we’ll defend the workers.

We have a grand opportunity to take the abysmal failure of the Obama years and use it to destroy liberalism as a political force forever. All we have to do is dare to take it.

Global Warming Hoax Update

Just more of that good, old global warming climate change climate disruption heading towards the midwest:

Following several weeks of economic data that has been, despite erroneous expectations of a Fed rate hike, one major disappointment after another including regional Fed reports, housing data, manufacturing surveys, construction spending, and durable goods data, the US economy is about to get the slowdown scapegoat it so desperately needs: according to Weather.com, following a brief overnight respite from cold temperatures, entering the first full week of January, both the Midwest and the East will see a plunge to the coldest temperatures of the season. This blast of cold temperatures will be different than the Arctic chill that ended 2014, which was mainly confined to the northern tier. This time the frigid air will push farther south and east.

Only thing I can figure is that Al Gore must be making a speaking tour through the area – but, as Zero Hedge notes, this is going to cause sighs of relief through our Economist and Banker classes…that it is cold in January will be used to explain away the poor 1st quarter GDP data we’re going to get in April (and, as usual, this exceptionally cold spell will be used to “prove” global warming…because if we weren’t warming, you see, we wouldn’t get weather that is unusually cold). The thing about our modern system is that it is so hopelessly corrupt that both global warming and fake-money economies can be kept going for quite a while…

America Next

Governor Bobby Jindal & Congressman Bill Flores have teamed up to deliver what I have waited for for a long time now. A responsible, common sense, aggressive economic strategy to lift Americans up, lessen our countries dependence on foreign oil, and solidify our economic prominence, which in turn strengthens our overall standing and influence in the world. Not too mention, this strategy could very well stave us off from bankruptcy and/or loss of our reserve currency status which would be devastating to all of us in this country and our way of life. Just as manufacturing was the economic platform that made America strong in the 1940’s and 1950’s, and much like the technological boom made the 1980’s and 1990’s thrive, energy is the next economic platform that will drive jobs and salaries and we have vast amounts for energy to tap into. The current economies malaise and standstill we find ourselves in is a direct result of Obama’s left wing ideology and pandering to the minority of environmental lobbyists. Obama has even forsaken one of the Democrats golden geese, the Unions, in his refusal to allow Americans to build the next energy economic platform and in turn he has suppressed job growth, wage growth, increased dependence on government hand outs, and has generally made life economically miserable for millions of American families. We can do so much better.

Access to affordable energy impacts every aspect of our nation and our families – it is the lifeblood of our economic security, and ultimately our national security. America’s energy resources are the envy of the world. Our nation’s combined resources of oil, natural gas, and coal exceed those of every other nation on Earth.  And these energy resources, if fully maximized, could help create millions of high-quality American jobs. Nevertheless, over many years, Congresses, and administrations,  have enacted a shortsighted patchwork of reactive laws, regulations, and executive orders only dealing with immediate energy issues. We can and must do better.

This strategy must be at the core of the GOP platform for 2016, and any candidate that does not fully embrace this strategy will not earn my vote. We can and must use our vast energy resources to strengthen our economic and national security while at the same time protecting our environment. North Dakota has led the way on this and you will only need to look at that state to see what the possibilities are — 3% unemployment and high wages even in the service industry. If we expand that opportunity out across large areas across this country, we can deliver prosperity to millions of Americans currently mired in the Obamaville of no hope and little change.

This strategy is a “no brainer” in my opinion. Please read the entire document and offer your opinion, and go to the website here for more information.