Monday, February 25, 2013
Zero Dark Thirty's Paltry Takehome
Glenn Greenwald rejoices that Zero Dark Thirty won just one Oscar, for Sound Editing, which it had to share with Skyfall. Here.
Kunstler: "Not So Smart"
I'd be interested in what he has to say about the Oscars or the shootout in Las Vegas.
http://kunstler.com/blog/2013/02/not-so-smart.html
http://kunstler.com/blog/2013/02/not-so-smart.html
Sunday, February 24, 2013
The Oscars
As seen through the two-part Jem episode "Hollywood Jem." Jem is nominated for the Best Actress Oscar along with "Sigourney Reever", "Meryl Saint", and "Geraldine Pathos." (Where the customary fifth nominee is, I don't know.) The four nominees appear on a talk show, (about a minute into the first video) where Pathos takes offense at Jem's admission of never having studied acting formally:
Can you imagine Emmanuelle Riva launching into Quvenzhané Wallis like that?
"Hollywood Jem, Part 1: For Your Consideration"
"Hollywood Jem, Part 2: And the Winner Is..."
(to Jem): You never studied?! Yet you presume to compete with actresses who have spent years, decades at their craft.
(Standing up, arms akimbo): That's it! I refuse to share an interview with someone who became an actress for frivolous reasons.
Can you imagine Emmanuelle Riva launching into Quvenzhané Wallis like that?
"Hollywood Jem, Part 1: For Your Consideration"
"Hollywood Jem, Part 2: And the Winner Is..."
Thursday, February 21, 2013
Tuesday, February 19, 2013
Monday, February 18, 2013
Kunstler: Scale Implosion (and My Own View of Local vs. Mainland-Owned Businesses)
Today's Kunstler column is on a topic--mass retail--I can understand better than the machinations of high finance. Hilo has a Wal-Mart (open since 1996), a Target (opened in summer 2011), and a few other semi-big box stores (Ross, OfficeMax, etc.) Hawaii, this island in particular, has never supported big box stores and chain retail in the same way the mainland (or Oahu) does. In some ways, our retail environment, especially restaurants, has actually become more localized. This deserves a more thorough treatment, but for now, let me say:
Target and Wal-Mart are lucrative in Hilo, but many local businesses are holding their own against them. I haven't been gone to Wal-Mart in years.
We have a larger (appx. 61,000 sq. ft.), fancier Safeway. But KTA has a nearly 100-year presence and strong customer loyalty. Longtime Hiloans remember Sure Save and Food Fair.
Borders is sorely missed, but there are still Book Gallery and Basically Books, as well as CD Wizard, Hilo Bay Books, Big Island BookBuyers, and Still Life Books.
We have McDonald's and Burger King but not many of the casual dining restaurants that Hattie does not like. We have innumerable small places, including two Indian restaurants. (Akmal's, which has existed in one form or another since its beginnings in Frankfurt in 1974, opened in Hilo in 2005 at the strip mall on Lanikaula Street. It was the first Indian restaurant not only in Hilo but on the island.)
http://hawaii2050.org/images/uploads/futures_scenarios.pdf
Scale Implosion
By James Howard Kunstler
on February 18, 2013 9:06 AM
Back in the day when big box retail started to explode upon the American landscape like a raging economic scrofula, I attended many a town planning board meeting where the pro and con factions faced off over the permitting hurdle. The meetings were often raucous and wrathful and almost all the time the pro forces won -- for the excellent reason that they were funded and organized by the chain stores themselves (in an early demonstration of the new axioms that money-is-speech and corporations are people, too!).
The chain stores won not only because they flung money around -- sometimes directly into the wallets of public officials -- but because a sizeable chunk of every local population longed for the dazzling new mode of commerce. "We Want Bargain Shopping" was their rallying cry. The unintended consequence of their victories through the 1970s and beyond was the total destruction of local economic networks, that is, Main Streets and downtowns, in effect destroying many of their own livelihoods. Wasn't that a bargain, though?
Despite the obvious damage now visible in the entropic desolation of every American home town, WalMart managed to install itself in the pantheon of American Dream icons, along with apple pie, motherhood, and Coca Cola. In most of the country there is no other place to buy goods (and no other place to get a paycheck, scant and demeaning as it may be). America made itself hostage to bargain shopping and then committed suicide. Here we find another axiom of human affairs at work: people get what they deserve, not what they expect. Life is tragic.
The older generations responsible for all that may be done for, but the momentum has now turned in the opposite direction. Though the public hasn't groked it yet, WalMart and its kindred malignant organisms have entered their own yeast-overgrowth death spiral. In a now permanently contracting economy the big box model fails spectacularly. Every element of economic reality is now poised to squash them. Diesel fuel prices are heading well north of $4 again. If they push toward $5 this year you can say goodbye to the "warehouse on wheels" distribution method. (The truckers, who are mostly independent contractors, can say hello to the re-po men come to take possession of their mortgaged rigs.) Global currency wars (competitive devaluations) are about to destroy trade relationships. Say goodbye to the 12,000 mile supply chain from Guangzhou to Hackensack. Say goodbye to the growth financing model in which it becomes necessary to open dozens of new stores every year to keep the credit revolving.
Then there is the matter of the American customers themselves. The WalMart shoppers are exactly the demographic that is getting squashed in the contraction of this phony-baloney corporate buccaneer parasite revolving credit crony capital economy. Unlike the Federal Reserve, WalMart shoppers can't print their own money, and they can't bundle their MasterCard and Visa debts into CDOs to be fobbed off on Scandinavian pension funds for quick profits. They have only one real choice: buy less stuff, especially the stuff of leisure, comfort, and convenience.
The potential for all sorts of economic hardship is obvious in this burgeoning dynamic. But the coming implosion of big box retail implies tremendous opportunities for young people to make a livelihood in the imperative rebuilding of local economies. At this stage it is probably discouraging for them, because all their life programming has conditioned them to be hostages of giant corporations and so to feel helpless. In a town like the old factory village I live in (population 2500) few of the few remaining young adults might venture to open a retail operation in one of the dozen-odd vacant storefronts on Main Street. The presence of K-Mart, Tractor Supply, and Radio Shack a quarter mile west in the strip mall would seem to mock their dim inklings that something is in the wind. But K-Mart will close over 200 boxes this year, and Radio Shack is committed to shutter around 500 stores. They could be gone in this town well before Santa Claus starts checking his lists. If they go down, opportunities will blossom. There will be no new chain store brands to replace the dying ones. That phase of our history is over.
What we're on the brink of is scale implosion. Everything gigantic in American life is about to get smaller or die. Everything that we do to support economic activities at gigantic scale is going to hamper our journey into the new reality. The campaign to sustain the unsustainable, which is the official policy of US leadership, will only produce deeper whirls of entropy. I hope young people recognize this and can marshal their enthusiasm to get to work. It's already happening in the local farming scene; now it needs to happen in a commercial economy that will support local agriculture.
The additional tragedy of the big box saga is that it scuttled social roles and social relations in every American community. On top of the insult of destroying the geographic places we call home, the chain stores also destroyed people's place in the order of daily life, including the duties, responsibilities, obligations, and ceremonies that prompt citizens to care for each other. We can get that all back, but it won't be a bargain.
Target and Wal-Mart are lucrative in Hilo, but many local businesses are holding their own against them. I haven't been gone to Wal-Mart in years.
We have a larger (appx. 61,000 sq. ft.), fancier Safeway. But KTA has a nearly 100-year presence and strong customer loyalty. Longtime Hiloans remember Sure Save and Food Fair.
Borders is sorely missed, but there are still Book Gallery and Basically Books, as well as CD Wizard, Hilo Bay Books, Big Island BookBuyers, and Still Life Books.
We have McDonald's and Burger King but not many of the casual dining restaurants that Hattie does not like. We have innumerable small places, including two Indian restaurants. (Akmal's, which has existed in one form or another since its beginnings in Frankfurt in 1974, opened in Hilo in 2005 at the strip mall on Lanikaula Street. It was the first Indian restaurant not only in Hilo but on the island.)
http://hawaii2050.org/images/uploads/futures_scenarios.pdf
Scale Implosion
By James Howard Kunstler
on February 18, 2013 9:06 AM
Back in the day when big box retail started to explode upon the American landscape like a raging economic scrofula, I attended many a town planning board meeting where the pro and con factions faced off over the permitting hurdle. The meetings were often raucous and wrathful and almost all the time the pro forces won -- for the excellent reason that they were funded and organized by the chain stores themselves (in an early demonstration of the new axioms that money-is-speech and corporations are people, too!).
The chain stores won not only because they flung money around -- sometimes directly into the wallets of public officials -- but because a sizeable chunk of every local population longed for the dazzling new mode of commerce. "We Want Bargain Shopping" was their rallying cry. The unintended consequence of their victories through the 1970s and beyond was the total destruction of local economic networks, that is, Main Streets and downtowns, in effect destroying many of their own livelihoods. Wasn't that a bargain, though?
Despite the obvious damage now visible in the entropic desolation of every American home town, WalMart managed to install itself in the pantheon of American Dream icons, along with apple pie, motherhood, and Coca Cola. In most of the country there is no other place to buy goods (and no other place to get a paycheck, scant and demeaning as it may be). America made itself hostage to bargain shopping and then committed suicide. Here we find another axiom of human affairs at work: people get what they deserve, not what they expect. Life is tragic.
The older generations responsible for all that may be done for, but the momentum has now turned in the opposite direction. Though the public hasn't groked it yet, WalMart and its kindred malignant organisms have entered their own yeast-overgrowth death spiral. In a now permanently contracting economy the big box model fails spectacularly. Every element of economic reality is now poised to squash them. Diesel fuel prices are heading well north of $4 again. If they push toward $5 this year you can say goodbye to the "warehouse on wheels" distribution method. (The truckers, who are mostly independent contractors, can say hello to the re-po men come to take possession of their mortgaged rigs.) Global currency wars (competitive devaluations) are about to destroy trade relationships. Say goodbye to the 12,000 mile supply chain from Guangzhou to Hackensack. Say goodbye to the growth financing model in which it becomes necessary to open dozens of new stores every year to keep the credit revolving.
Then there is the matter of the American customers themselves. The WalMart shoppers are exactly the demographic that is getting squashed in the contraction of this phony-baloney corporate buccaneer parasite revolving credit crony capital economy. Unlike the Federal Reserve, WalMart shoppers can't print their own money, and they can't bundle their MasterCard and Visa debts into CDOs to be fobbed off on Scandinavian pension funds for quick profits. They have only one real choice: buy less stuff, especially the stuff of leisure, comfort, and convenience.
The potential for all sorts of economic hardship is obvious in this burgeoning dynamic. But the coming implosion of big box retail implies tremendous opportunities for young people to make a livelihood in the imperative rebuilding of local economies. At this stage it is probably discouraging for them, because all their life programming has conditioned them to be hostages of giant corporations and so to feel helpless. In a town like the old factory village I live in (population 2500) few of the few remaining young adults might venture to open a retail operation in one of the dozen-odd vacant storefronts on Main Street. The presence of K-Mart, Tractor Supply, and Radio Shack a quarter mile west in the strip mall would seem to mock their dim inklings that something is in the wind. But K-Mart will close over 200 boxes this year, and Radio Shack is committed to shutter around 500 stores. They could be gone in this town well before Santa Claus starts checking his lists. If they go down, opportunities will blossom. There will be no new chain store brands to replace the dying ones. That phase of our history is over.
What we're on the brink of is scale implosion. Everything gigantic in American life is about to get smaller or die. Everything that we do to support economic activities at gigantic scale is going to hamper our journey into the new reality. The campaign to sustain the unsustainable, which is the official policy of US leadership, will only produce deeper whirls of entropy. I hope young people recognize this and can marshal their enthusiasm to get to work. It's already happening in the local farming scene; now it needs to happen in a commercial economy that will support local agriculture.
The additional tragedy of the big box saga is that it scuttled social roles and social relations in every American community. On top of the insult of destroying the geographic places we call home, the chain stores also destroyed people's place in the order of daily life, including the duties, responsibilities, obligations, and ceremonies that prompt citizens to care for each other. We can get that all back, but it won't be a bargain.
Sunday, February 17, 2013
Saturday, February 16, 2013
Friday, February 15, 2013
Tuesday, February 12, 2013
@aleithead See all my tweets here: storify.com/MaxBlumenthal/… Was using an iPhone app called 5-0 Radio.
— Max Blumenthal (@MaxBlumenthal) February 13, 2013
I managed to pick up police scanner of Dorner chase thru an iPhone app. There is chatter of "cabin identified." "Where are u on the cabin?"
— Max Blumenthal (@MaxBlumenthal) February 12, 2013
On the Pope's Resignation
I will post here links as I find them.
http://www.chroniclesmagazine.org/2013/02/12/a-godly-man-in-an-ungodly-age/
http://www.telospress.com/on-pope-benedict-xvis-enduring-legacy/
http://www.religionnews.com/2013/02/18/analysis-conservatives-vent-disappointment-over-benedicts-papacy/
http://www.chroniclesmagazine.org/2013/02/12/a-godly-man-in-an-ungodly-age/
http://www.telospress.com/on-pope-benedict-xvis-enduring-legacy/
http://www.religionnews.com/2013/02/18/analysis-conservatives-vent-disappointment-over-benedicts-papacy/
Monday, February 11, 2013
Kunstler's State of the Union Address
State of the Union
By James Howard Kunstler
on February 11, 2013 9:09 AM
The fog of chatter about Federal Reserve money-printing shenanigans, currency wars, fiscal intransigence, exchange rates, and alphabetized rescue operations conceals the central reality of the historical moment: that all industrial economies now face epic contraction, even rip-roaring China in its absurd and spectacular bid to become the latest drive-in utopia. The so-called advanced nations of the world are all sliding toward something less than they wish to be, and the so-called developing nations will backslide further into poverty and anarchy where development will never happen.
The implacable contraction underway is the simple result of growing scarcity of cheap oil, the master resource. Thus, in a world where fantasy has replaced analysis, the propaganda channels brim with false news of America's coming "energy independence" and the rebirth of domestic manufacturing, the coming electric car fleet, and space tourism. There is also chatter among the paranoid that an imagined elite has deliberately engineered American collapse for fun and profit, with sideshows about the Department of Homeland Security promoting social upheaval in order to make a show of putting it down. This is all bullshit concealing the futile machinations of people so unfortunate as to hold political office in an unraveling they can't control. Where control is no longer possible, paranoid fantasies fill the vacuum of wishing for control.
One thing you can be sure of: the current sociopolitical weather will change. A front will blow through and sweep the fog away. So many circles of hazard are spinning around events that some fast-turning object will come off its axis and start smashing all the fantasies. When that happens, it will be every community for itself, and where there are no real communities -- for instance, the vast matrix of suburban noplaces that America emergently composed itself out of in a tragic quest to become its own televised fantasy -- we'll discover the dark side of the "liberty" that so-called conservatives endlessly invoke, in all its screaming eagle iconography.
Not since the Civil War (1861 - 65) has anything bad of this scale happened within the United States itself and the public is unprepared despite our total immersion in the on-screen ersatz heroics of avatars such as Dwayne Johnson. The terrible convulsion of the 1860s was preceded by a political time much like ours is now, with figures (calling them leaders is inaccurate) of no conviction backpedaling furiously toward strife.
Remember these things if you tune in to watch President Obama move his lips on Tuesday amid the incessant applause in the House chamber. He'll speak the words "climate change" and the hall will rock with thunderous handclapping -- but it won't mean anything because both the president and the people have no intention of changing the way we live. Mr. Obama will cheerlead for economic growth and he will be talking out of his ass. It's the nature of this contraction that economic growth is absent. You can have plenty of economic activity -- especially if you re-form (literally) the systems we depend on, such as farming, commerce, medicine, and transportation -- but it won't be expressed favorably in the GDP stats or the balance sheets of CitiGroup and Morgan Stanley.
At the core of this contraction is the disappearing act of real capital -- that is, accumulated wealth -- for the excellent reason that we are squandering what remains of it in the futile effort to keep living the way we do. But it will be vanishing fast, contrary to the view of such fantasists as David Leonhardt, Washington bureau chief of The New York Times -- catch him on the current Slate Political Gabfest -- who thinks that the Growth Fairy is about to land on the south lawn of the White House.
The State of the Union Address is happening in a peculiar quiet moment when all the financial brushfires of the time have been reduced temporarily to a smolder that conceals the full involvement of the roots under the surface. Our economic system is burning down. Nobody wants to talk about the system that will have to replace it, which I call a world made by hand.
The fortunate few will be those who have already established themselves in an authentic community of helping hands, who have some tools -- and I don't mean Adobe Photoshop or the latest iPhone app -- and laid in some bits of silver and gold.
By James Howard Kunstler
on February 11, 2013 9:09 AM
The fog of chatter about Federal Reserve money-printing shenanigans, currency wars, fiscal intransigence, exchange rates, and alphabetized rescue operations conceals the central reality of the historical moment: that all industrial economies now face epic contraction, even rip-roaring China in its absurd and spectacular bid to become the latest drive-in utopia. The so-called advanced nations of the world are all sliding toward something less than they wish to be, and the so-called developing nations will backslide further into poverty and anarchy where development will never happen.
The implacable contraction underway is the simple result of growing scarcity of cheap oil, the master resource. Thus, in a world where fantasy has replaced analysis, the propaganda channels brim with false news of America's coming "energy independence" and the rebirth of domestic manufacturing, the coming electric car fleet, and space tourism. There is also chatter among the paranoid that an imagined elite has deliberately engineered American collapse for fun and profit, with sideshows about the Department of Homeland Security promoting social upheaval in order to make a show of putting it down. This is all bullshit concealing the futile machinations of people so unfortunate as to hold political office in an unraveling they can't control. Where control is no longer possible, paranoid fantasies fill the vacuum of wishing for control.
One thing you can be sure of: the current sociopolitical weather will change. A front will blow through and sweep the fog away. So many circles of hazard are spinning around events that some fast-turning object will come off its axis and start smashing all the fantasies. When that happens, it will be every community for itself, and where there are no real communities -- for instance, the vast matrix of suburban noplaces that America emergently composed itself out of in a tragic quest to become its own televised fantasy -- we'll discover the dark side of the "liberty" that so-called conservatives endlessly invoke, in all its screaming eagle iconography.
Not since the Civil War (1861 - 65) has anything bad of this scale happened within the United States itself and the public is unprepared despite our total immersion in the on-screen ersatz heroics of avatars such as Dwayne Johnson. The terrible convulsion of the 1860s was preceded by a political time much like ours is now, with figures (calling them leaders is inaccurate) of no conviction backpedaling furiously toward strife.
Remember these things if you tune in to watch President Obama move his lips on Tuesday amid the incessant applause in the House chamber. He'll speak the words "climate change" and the hall will rock with thunderous handclapping -- but it won't mean anything because both the president and the people have no intention of changing the way we live. Mr. Obama will cheerlead for economic growth and he will be talking out of his ass. It's the nature of this contraction that economic growth is absent. You can have plenty of economic activity -- especially if you re-form (literally) the systems we depend on, such as farming, commerce, medicine, and transportation -- but it won't be expressed favorably in the GDP stats or the balance sheets of CitiGroup and Morgan Stanley.
At the core of this contraction is the disappearing act of real capital -- that is, accumulated wealth -- for the excellent reason that we are squandering what remains of it in the futile effort to keep living the way we do. But it will be vanishing fast, contrary to the view of such fantasists as David Leonhardt, Washington bureau chief of The New York Times -- catch him on the current Slate Political Gabfest -- who thinks that the Growth Fairy is about to land on the south lawn of the White House.
The State of the Union Address is happening in a peculiar quiet moment when all the financial brushfires of the time have been reduced temporarily to a smolder that conceals the full involvement of the roots under the surface. Our economic system is burning down. Nobody wants to talk about the system that will have to replace it, which I call a world made by hand.
The fortunate few will be those who have already established themselves in an authentic community of helping hands, who have some tools -- and I don't mean Adobe Photoshop or the latest iPhone app -- and laid in some bits of silver and gold.
Sunday, February 10, 2013
Tuesday, February 05, 2013
A Review of Kunstler's Too Much Magic
http://www.energybulletin.net/stories/2012-09-12/review-too-much-magic-james-kunstler
Monday, February 04, 2013
Kunstler: Cattle Drive
Kunstler details more financial misbehavior which is over my head. And he sneers at the Super Bowl.
Cattle Drive
By James Howard Kunstler
on February 4, 2013 8:09 AM
How hilarious is the Federal Reserve's cattle drive of cash money (i.e. "liquidity") into the stock markets? I'll tell you: if that cash is outflow from bonds that pay ZIRP interest rates, then this attempt to stampede investment into the stock market is only going to succeed in ravaging the bond market and by extension the credibility of the dollar, the US banking cartel, and then the world financial system as a whole.
If bond-dumpers rush into stocks, then who are the next bond buyers at ZIRP? The USA can't keep going without continuous bond selling. Somebody has to buy the darn things. The Federal Reserve is now buying around 70 percent of US issue -- a lot of it via secondary market pass-thru shenanigans involving "Primary dealers" (a.k.a. Too Big To Fail banks, who get to cream off a premium when they flip bonds to the Fed -- tidy little racket). If the other 30 percent of issue can't find willing buyers at ZIRP then interest rates will have to go up. If interest rates go up, then interest paid out on bonds (that is "debt service") by the US government will go up catastrophically, because the aggregate debt is so colossal and most of the debt is short term, meaning that in a post-ZIRP world the interest rate ratchets up automatically every 13 weeks as bonds roll over. The US will then only be able to pretend that it can service the debt at higher interest rates. Everybody in the world will recognize this -- surely only increasing the velocity of the stampede away from bonds. The question is: how long can pretending to service debt go on before it is just called by it's real name: default? Or, if countered with additional furious computer "money" creation: hyperinflation? Either way, of course, you end up broke.
This cattle drive into stocks is strictly a political gambit. The cattle are being driven to the slaughterhouse. It's discretionary strategic national financial suicide. They're driving up the stock markets for cosmetic purposes, to make it appear that an economic recovery is going on, and with the aim of setting in motion a self-reinforcing financial feeding frenzy in this rush to "equities." By the way, in case my manner seems didactic today I am attempting to define my terms as I go along because most other financial bloggers seem to assume that ordinary people understand all their jargon, which I am quite sure they do not.
Returning to my point... the Fed and their auditors on Wall Street and in government, are jacking up the stock markets in the hopes of stirring up "animal spirits," as the financial psychologists say, to put over the story that it equals a vibrant economy -- which is nonsense, of course, to anyone who shoots a casual glance at the economic wreckage all around them. Anyway, since the stock market action these days is dominated by high frequency trading robots running on algorithms, where exactly would animal spirits even factor in? If anything the absence of real animal spirits in this action also implies the absence of its counterpart, animal survival instinct, of which human intelligence is an order. What can come of stirring up animal spirits among robots? A train wreck is exactly what.
Now, I ask you: at a moment in history when vast interlinked global financial markets have never been so unstable, so primed for unintended consequences courtesy of the diminishing returns of technology, so ripe for a massive, cascading "accident," is it a prudent thing to fuck around with such crude PsyOps?
One other factor outside pure financials assures that US economic performance will remain impaired (that is, the kind of economic activity we regard as "normal" (suburban sprawl building, credit card "consumer" spending): the price of oil, which is inching up to the $100-a-barrel hashmark. Apparently that shale oil bonanza we hear so much about has not left the USA swimming in cheap oil. As a general principle, it's probably safe to say that an oil price above $80 crushes the US economy. It drives up the cost structure of just about everything we make, do, or sell here, but of course the primary things that go up in price are food and motor fuel.
Hence, it's tragically ironic that -- getting back to official financial PsyOps -- that one of the primary motives for the Fed keeping interest rates super-low in the first place (apart from enabling wild fiscal irresponsibility in government) has been to promote the housing sector -- because in the reality of our time "housing" translates into building more suburban sprawl. How smart is it to promote more suburban sprawl at a moment in history when there's no more cheap oil?
It is this kind of stupendous foolishness that is putting the USA on the path of an epochal systemic collapse.
Superbowl addendum:
Did anyone notice how violent and psychotic the Superbowl advertising was this year? An Oreo commercial that depicted a mob of nerds destroying a library -- huh? The Doritos spot where "Daddy" and his male buddies transform themselves into an insane clown posse of cross-dressers. The Fast and Furious 6 trailer featuring the destruction of every vehicle known to man and a few office buildings, too. The third-quarter power failure was a neat harbinger of things-to-come in the Most Exceptional United States of America. Party on, peeps!
The Kunstlercast podcast is back online all y'all! This week: interview with Nicole Foss of The Automatic Earth.com
===
There were some charming ads too. More later.--P.Z.
Cattle Drive
By James Howard Kunstler
on February 4, 2013 8:09 AM
How hilarious is the Federal Reserve's cattle drive of cash money (i.e. "liquidity") into the stock markets? I'll tell you: if that cash is outflow from bonds that pay ZIRP interest rates, then this attempt to stampede investment into the stock market is only going to succeed in ravaging the bond market and by extension the credibility of the dollar, the US banking cartel, and then the world financial system as a whole.
If bond-dumpers rush into stocks, then who are the next bond buyers at ZIRP? The USA can't keep going without continuous bond selling. Somebody has to buy the darn things. The Federal Reserve is now buying around 70 percent of US issue -- a lot of it via secondary market pass-thru shenanigans involving "Primary dealers" (a.k.a. Too Big To Fail banks, who get to cream off a premium when they flip bonds to the Fed -- tidy little racket). If the other 30 percent of issue can't find willing buyers at ZIRP then interest rates will have to go up. If interest rates go up, then interest paid out on bonds (that is "debt service") by the US government will go up catastrophically, because the aggregate debt is so colossal and most of the debt is short term, meaning that in a post-ZIRP world the interest rate ratchets up automatically every 13 weeks as bonds roll over. The US will then only be able to pretend that it can service the debt at higher interest rates. Everybody in the world will recognize this -- surely only increasing the velocity of the stampede away from bonds. The question is: how long can pretending to service debt go on before it is just called by it's real name: default? Or, if countered with additional furious computer "money" creation: hyperinflation? Either way, of course, you end up broke.
This cattle drive into stocks is strictly a political gambit. The cattle are being driven to the slaughterhouse. It's discretionary strategic national financial suicide. They're driving up the stock markets for cosmetic purposes, to make it appear that an economic recovery is going on, and with the aim of setting in motion a self-reinforcing financial feeding frenzy in this rush to "equities." By the way, in case my manner seems didactic today I am attempting to define my terms as I go along because most other financial bloggers seem to assume that ordinary people understand all their jargon, which I am quite sure they do not.
Returning to my point... the Fed and their auditors on Wall Street and in government, are jacking up the stock markets in the hopes of stirring up "animal spirits," as the financial psychologists say, to put over the story that it equals a vibrant economy -- which is nonsense, of course, to anyone who shoots a casual glance at the economic wreckage all around them. Anyway, since the stock market action these days is dominated by high frequency trading robots running on algorithms, where exactly would animal spirits even factor in? If anything the absence of real animal spirits in this action also implies the absence of its counterpart, animal survival instinct, of which human intelligence is an order. What can come of stirring up animal spirits among robots? A train wreck is exactly what.
Now, I ask you: at a moment in history when vast interlinked global financial markets have never been so unstable, so primed for unintended consequences courtesy of the diminishing returns of technology, so ripe for a massive, cascading "accident," is it a prudent thing to fuck around with such crude PsyOps?
One other factor outside pure financials assures that US economic performance will remain impaired (that is, the kind of economic activity we regard as "normal" (suburban sprawl building, credit card "consumer" spending): the price of oil, which is inching up to the $100-a-barrel hashmark. Apparently that shale oil bonanza we hear so much about has not left the USA swimming in cheap oil. As a general principle, it's probably safe to say that an oil price above $80 crushes the US economy. It drives up the cost structure of just about everything we make, do, or sell here, but of course the primary things that go up in price are food and motor fuel.
Hence, it's tragically ironic that -- getting back to official financial PsyOps -- that one of the primary motives for the Fed keeping interest rates super-low in the first place (apart from enabling wild fiscal irresponsibility in government) has been to promote the housing sector -- because in the reality of our time "housing" translates into building more suburban sprawl. How smart is it to promote more suburban sprawl at a moment in history when there's no more cheap oil?
It is this kind of stupendous foolishness that is putting the USA on the path of an epochal systemic collapse.
Superbowl addendum:
Did anyone notice how violent and psychotic the Superbowl advertising was this year? An Oreo commercial that depicted a mob of nerds destroying a library -- huh? The Doritos spot where "Daddy" and his male buddies transform themselves into an insane clown posse of cross-dressers. The Fast and Furious 6 trailer featuring the destruction of every vehicle known to man and a few office buildings, too. The third-quarter power failure was a neat harbinger of things-to-come in the Most Exceptional United States of America. Party on, peeps!
The Kunstlercast podcast is back online all y'all! This week: interview with Nicole Foss of The Automatic Earth.com
===
There were some charming ads too. More later.--P.Z.
Sunday, February 03, 2013
Subscribe to:
Posts (Atom)
