My Kingdom for a Capitalist!

Will somebody please tell me where all the capitalists have gone? But don’t be so quick to answer. You probably want to say something like: “Just turn on CNBC and you can see Larry Kudlow shouting about capitalism every day.” But I believe that Kudlow and his ilk are something entirely different.

Consider this quote from Harvard historian Niall Ferguson’s book “Civilization: The West and the Rest” (Kindle Location 4269):

“Capitalists understood what Marx missed: that workers were also consumers. It therefore made no sense to try to grind their wages down to subsistence levels. On the contrary, as the case of the United States was making increasingly clear, there was no bigger potential market for most capitalist enterprises than their own employees.”

In 1914, Henry Ford doubled the wages of his workers. That’s the kind of capitalism that defeated Marxism.

But today? All I see are “capitalists” doing the exact opposite: replacing $23 per hour American workers with $2 per hour Asian or Mexican workers by offshoring factories and offices, and importing millions of immigrants.

I submit to you that those are not capitalists at all. People like Larry Kudlow are really globalists and plutocrats. And we are witnessing the historical transformation of the USA from a capitalist nation into a South American-style plutocracy.

Perhaps you think that I am exaggerating? Well, consider this quote from geopolitical expert George Friedman’s book “The Next 100 Years” (page 120):

“In the 1920s, the world was in the midst of an accelerating population explosion. … The United States, facing an onslaught of potential immigrants, decided to limit their entry in order to keep the price of labor – wages – from plunging.”

Back then, both our business leaders and political leaders made sure that workers were well-paid. The result was the rise of the mighty American middle class. And those middle-class workers did indeed spend their wages, creating in the process a vast consumer market that became the economic engine of the world.

And today, not only do our business leaders seek to “grind down wages”, but our political leaders make it easy via record immigration and free-trade treaties with low-wage nations.

Whether or not the USA has a middle class at all is a political decision. And currently the decision is: no. It has been decided that the middle class will be feed through a wood-chipper that spits out vast profits for multinational corporations via global labor arbitrage and mass immigration.

Capitalist America, R.I.P.

Top Investing Websites

Below is a screenshot from my new Rank-O-Matic app showing the top investing websites by Alexa Rank (click to enlarge):

As you can see, Bloomberg is at the top of the list, which isn’t too surprising. But I was surprised to see Business Insider out-ranking CNBC.

If you look in the “Change” column of the top five websites, you will see all zeros. That’s because ranks change less frequently as you move up the hierarchy. And the big moves for sites lower down on the list aren’t terribly significant.

I don’t claim these standings are comprehensive. In fact, as I looked for investing websites, I just kept finding more and more. For all I know this isn’t even half of them. If you know of any that I missed, please post a comment and I will include them in the next update.

If you are eager for daily updates, download Rank-O-Matic, and run it each day. The app can be used to track any number of websites, which you can group into categories. If you are new to Alexa, read my page: “Alexa Rank“.

And if you want to boost your rank and traffic, is the best in the business.

Civil War Rages Across Internet Over SOPA

SOPA is a bill in Congress designed to stop online piracy. However, its opponents consider it to be written far too broadly, and companies that support SOPA have been slapped with boycotts. The highest-profile casualty so far is Go Daddy. The registrar initially supported SOPA, but then got hit with a wave of websites (including Wikipedia) transferring their domains to other registrars. Go Daddy caved-in and now opposes SOPA.

Some critics think that the bill will overturn the “safe harbor” clause of the Digital Millennium Copyright Act of 1998. And that by itself could wreck the internet as we know it. Joel Spolsky of Stack Overflow discussed this in a recent podcast (starting at 27:55). As an example, he used a case where somebody posted a programming question on Stack Overflow. It turned out that the question was from a commercial product – a test that employers use to interview programmers, and was protected by copyright.

Under current law, Stack Overflow could not be held liable for that copyright violation, as long as they took the question down after being notified by the copyright owner. That’s the “safe harbor”. Under SOPA, they might be liable, and even have their website blocked – without due process.

Will websites that feature “user generated content” (including blogs that allow comments) be able to operate under SOPA? Maybe not. So, SOPA is also considered a threat to free speech, which explains the ferocity of the civil war that erupted last week.

Public companies that support SOPA might be of interest to short sellers since boycotts might result in negative earnings surprises. I’m thinking that companies frequented by techies might be hardest hit.

Read up on SOPA at Wikipedia.

Michelle Cuckoo-Cabeza

A few years ago, while watching CNBC, I almost fell out of my chair when one of the anchors said something like:

“Yes, Hugo Chavez is a dictator, but there is a serious income-inequality problem in Venezuela.”

A CNBC anchor criticizing plutocracy! Bizarre, right? Well, that was Michelle Caruso-Cabrera.

However, in 2011, “MCC” was sent to Europe to report on the financial panic. From Rome, she reported on the scourge of overpaid Roman cab drivers. In another report, she carried on about how the only solution for countries like Italy was to smash unions and beat down wages.

Quite a change of philosophy, right? I then went to Amazon and did “search inside” on her book for “Venezuela”. Not a word about income inequality.

So, what happened to MCC? I like to think that she got a memo from her boss, the “Jobs Czar” saying something like this:

“One more criticism of plutocracy and you will be reporting from Mongolia! Even if it is in an enemy country like Venezuela, plutocracy is plutocracy, damn it! And your job is to pimp plutocracy! Now hop to it!”

Of course, you can’t blame MCC for joining Team Plutocracy. After all, according to Wikipedia, income-inequality is even worse in the USA than it is in Venezuela. And one simply cannot expect to have a career in corporate America while being an advocate for the small people.

And what about those Roman cab drivers? Did they really bankrupt Italy? I don’t know, but last time I checked, labor unions have been around since the beginning of the industrial revolution, and Italy has done just fine for most of its history. If the unions were choking Italy, how come Italy has a $2 trillion economy? The 8th largest in the world?

But yes, unions can be a problem. Imagine a Midwestern town in the USA that had all of its factories sent to Mexico and China, and its service centers to India. It has double-digit unemployment, tax revenues are down, and the city can no longer afford to pay “exorbitant” wages to its union workers.

That is indeed a problem. But maybe it’s more a problem of globalism, no?

And why may I ask is the solution to any economic problem to beat down wages? Why isn’t the solution to raise the wages of German and Chinese workers instead?

Speaking of which, in CNBC’s coverage of Italy’s problems, I didn’t hear one word about how cheap imports from China have ravaged Italy’s industrial economy. Now that I think about it, I don’t recall hearing that mentioned at all in our corporate-owned media. We have to go to the British media to learn the term “wage dumping”. Here is the great AEP on the subject:

“Oskar Lafontaine, a leader of Germany’s Linke (Left) party, said the euro was hurtling towards destruction on current policies. He blamed Germany’s system of screwing down wages to undercut other EMU countries – or “wage dumping” – for causing the imbalances behind the eurozone crisis. “A shared currency cannot work without coordination of wage policy. Once wages have diverged as far as they have in recent years, devaluation and revaluation is the only way out.”

And Italy’s problems are not so much different than our own. After all, the difference between Germany’s and Italy’s wages are miniscule compared to those of the USA ($23 per hour) and Mexico, India, and China ($2 per hour). And thanks to the Beijing-imposed yuan-dollar currency peg, we also have a “shared currency” with China, just as Italy does with Germany.

Of course, such “labor arbitrage” is the very Engine of Plutocracy. So, don’t hold your breath waiting for it to be discussed on CNBC. And if the USA is ever graced with a populist dictator like Hugo Chavez, the Plutocracy will have only itself to blame.

Note to Plutocracy: Seriously; ease up a bit. You are riding for a fall. Check yourself before you wreck yourself.

Note: Here is a post I wrote about MCC’s assertion that “factory jobs are dumb.”

Civilization Ends in Alabama

If you are intending to retire on Social Security, make sure that you are mentally prepared to live without running water and indoor plumbing.

Because that’s what’s happening right now in Jefferson County, Alabama.

Now, if you are Larry Kudlow, you are probably shouting:

“Aha! If Social Security had been privatized those poor people could have put their funds in a program run by reputable, private-sector firms like JP Morgan and making a much higher return right now!”

But according to the BBC story, JP Morgan helped to cause the problem:

“Investment bank JP Morgan Securities and two of its former directors have been fined for offering bribes to Jefferson County workers and politicians to win business financing the sewer upgrade.”

Water-and-sewer bills can be as high as $300 a month in Jefferson County, and some people have resorted to outhouses and bottled water. If your social-security check is only $600 a month, then you don’t really have much of a choice.

Maybe you think that I’m exaggerating about civilization ending. But consider this quote from Niall Ferguson’s book Civilization:

“My idea of civilization is as much about sewage pipes as flying buttresses, if not more so, because without efficient public plumbing cities are death-traps, turning rivers and wells into havens for the bacterium Vibrio cholerae.”

Half the population of Birmingham fled a cholera outbreak in 1873. Will we degrade to that level? Maye not, but having people install port-a-potties in their back yards is clearly a step in the wrong direction.

S&P 500 Fractal End-of-Range Signal

The stock market has been range-bound for quite a while. Below is the weekly SPY chart from my Fractal Stock Grapher software. See the black arrow pointing to the “end of range” signal (click chart to enlarge):

The brown arrow points to the previous end-of-range signal, which was generated at the end of July – just one week before the market plunged in August.

However, an end-of-range signal from the Fractal Dimension Index only tells us that a new trend is likely to begin soon. It does not tell us the direction.

The market has been range-bound for this long because half of investors are thinking: “the economy is improving, so I should be buying stocks”, and the other half are thinking: “the wheels are coming off of Europe, so I should be selling stocks.”

Those two groups are balanced right now. At some point, an event will occur that convinces one side to give up. And when they liquidate their positions, the market will break out of the range and embark upon a new trend.

The moral of the story is that the FDI doesn’t tell us who will blink first, but it does say that the duel is likely to be resolved within the next few weeks.

Also, on October 26, I reported an FDI end-of-trend signal on Apple’s monthly chart. And the mighty AAPL juggernaut did indeed stall out. It was $400 on that day, and has been below that level almost every day since.

Is the Gold Bull Dead?

If so, you read it here first. Below is the weekly GLD chart from my Fractal Stock Grapher software that I posted on August 7, 2011. See the black arrow pointing to the “end of trend” signal (click chart to enlarge):

Here is what the chart looks like now:

Notice that while the red FDI line was flashing its end-of-trend signal, the green GLD line was building its top. Nice, huh?

What’s next for gold? I won’t pretend to know. However, the fractal dimension index is in a neutral position (on the weekly chart), and that means that gold’s downtrend has room to extend before another end-of-trend signal is generated. But that doesn’t mean that the current downtrend will continue. The FDI only describes what has happened during the last 30 data points. And its signals are only generated when prices have been oddly flat, or oddly stretched.

From a fractal-dimension-index perspective, the S&P’s chart is much more interesting at the moment, as we will see in the next post.

The Grich that Stole American Prosperity

Newt GinGRICH is parading around acting like he is some sort of economic genius. He says he will be the “Paychecks President” as opposed to Obama the “Food Stamps President”, and claims that he created the economy that allowed Mitt Romney to get rich.

But nothing could be further from the truth. As a matter of fact, Gingrich is one of the Founding Fathers of modern American poverty. Not only did Gingrich vote for NAFTA, but he worked with Bill Clinton to ram GATT through Congress, thus surrendering the USA’s economic sovereignty to the World Trade Organization.

That was in November 1994. Now, allow Mexico, China, and India a few years to ramp-up their infrastructure, building sea ports, air ports, power grids, water systems, sweatshops, worker barracks, railroads, highways, etc. By 2000, they were ready to accept the mass exodus of American factories and offices as ordained by Gingrich.

And so they did. And our stock market crashed. And when the “jobless recovery” baffled the Fed, Greenspan kept his foot on the gas, no doubt chanting “free trade will create jobs” over and over, praying to his libertarian gods. But the economy couldn’t respond like it had in the past, because Gingrich had relocated it to foreign lands. And all the cash that Greenspan injected to stimulate our newly hollowed-out economy blew up a giant housing bubble, destroyed our banks, and crashed our stock market again.

Today, our once powerful economy bumbles along, eeking out meager job growth while the Fed holds interest rates at 0% – lower than Greenspan dared.

Nice work, Newt.

Mitt Romney says he will put an end to the dollar-yuan currency peg imposed on America by Beijing. But, he says that he will do so by petitioning Gingrich’s WTO. This approach is, shall we say, effete. I can see Romney now, petitioning the WTO on bended knee:

“Please! Throw us a scrap of economic sovereignty! We’re dying here!”


Ron Paul is just as clueless. As a Fed-stalking, libertarian ideologue, he is in complete denial about the colossal failure of his precious free-trade ideology. He makes fellow libertarian Alan Greenspan the villain, but Greenspan was only responding to the consequences of wide-open trade with low-wage nations that H. Ross Perot so presciently warned us about.

And Gingrich knew exactly what he was doing in 1994. He publicly stated that the USA was giving up its economic sovereignty:

“…twenty years from now we will look back on this as a very important defining moment.”

Well, I’m looking back right now.

Note to Newt. You were right; the moment you ended American prosperity was indeed a defining moment. The 13 million people unemployed, and the 46 million on food-stamps are more your responsibility than almost anyone else.

Note: Here is what Gingrich told the House Ways and Means committee in June 1994

“I am just saying that we need to be honest about the fact that we are transferring from the United States at a practical level significant authority to a new organization. This is a transformational moment. I would feel better if the people who favor this would just be honest about the scale of change.

“I agree … this is very close to Maastrict [the European Union treaty by which the EU member nations have surrendered considerable sovereignty], and twenty years from now we will look back on this as a very important defining moment. This is not just another trade agreement. This is adopting something which twice, once in the 1940s and once in the 1950s, the U.S. Congress rejected. I am not even saying we should reject it; I, in fact, lean toward it. But I think we have to be very careful, because it is a very big transfer of power.”

At the beginning of ABC’s presidential debate last night, Diane Sawyer asked the candidates how they would “bring jobs back from overseas.” None of the six Republican candidates answered the question. Maybe Sawyer herself should be president. At least she knows what the right question is.

Isaacson Omits China Issue from Steve Jobs Biography

A lot has been said about Walter Isaacson’s biography of Steve Jobs, but I haven’t seen anybody mention the lack of discussion on China. If you have the e-book, and you search on China, you will find almost nothing.

Of course, this is typical of Big Media’s approach to offshoring: pretend it doesn’t exist. Propaganda by omission.

Perhaps Isaacson didn’t think it was an important topic. After all, it was a biography of Steve Jobs, and not a history of Apple Computer. But I don’t think that was the case because the book covers the factories that Jobs used to build in Silicon Valley. Isaacson discusses the high-tech plant that Jobs built while at NeXT right down to the $20,000 chairs that Jobs furnished it with.

But there was no discussion at all about the factories in China, or what Jobs thought about them. And it’s not for a lack of an interesting topic. I mean workers were leaping to their deaths in those sweatshops, right? How is that not a story?

And I am not exaggerating about this being propaganda. Big Media is so assiduous about hiding the scale of offshoring that it brainwashes the members of the Council on Foreign Relations itself! When the iPad was introduced, CFR member Erin Burnett thought that it would be a fabulous addition to the USA’s exports. She had no clue that Apple had 700,000 workers in China. See the Burnett video here.

On a related topic, we read stories blaming unemployment on automation. The robots are taking our jobs, right? It’s got nothing to do with offshoring. But consider this quote from the book about the NeXT factory:

“Empty circuit boards were fed in at one end and twenty minutes later, untouched by humans, came out the other end as completed boards.”

That’s right; Steve Jobs had an automated assembly line in Fremont, California 25 years ago! So is it really automation that explains the loss of manufacturing jobs? Or is it cheap sweatshop workers (who undercut expensive robots) and an artificially weak yuan? The truth is that the “Automation Explanation” is just another propaganda campaign to keep the American middle class quiescent as it is being eviscerated.

Note: Nerds have complained about the lack of technology coverage in Isaacson’s book, but the vast majority of people will enjoy it. I liked it, and recommend it.

Larry Kudlow is Pure Evil – Part 2

In the video below, you will see a rare glimpse into the thinking of the ruling elite. CNBC host Larry Kudlow is interviewing a Tea Party guy who complains that General Electric has been moving plants out of the USA. Kudlow responds with:

“What’s wrong with that? That’s called capitalism.”

A shocking display of pure evil, right? Would it be “capitalism” if all factories were offshored? Yes, according to Kudlow. The quote comes at the 1:52 mark:

While there is no official definition of capitalism, and one could certainly argue about what it really is, the idea that national borders should be erased clearly goes beyond the scope of the concept.

Kudlow’s depiction of capitalism is, in fact, globalism, which demands that nation-states relinquish sovereignty on trade policy. And how well has that been working out for us?

However, the big take-away from Kudlow’s ill-advised admission is that our rulers do not care that the USA is being stripped of its industrial might. And as long as it increases corporate profits, it will continue with shills like Kudlow trying to dress it up as patriotic capitalism.

We Americans believe in capitalism, but the globalists are undermining that belief. Would OWS have ever materialized without Kudlow’s open-border policies? Probably not.

When I wrote part one of this series last year, there were 41 million Americans on food stamps. Now there are over 45 million.

Nice work Kudlow. How many more homeless children like these is your black heart willing to produce in the name of “creating global jobs”?:

That yellow truck is where they live. See the 60 Minutes episode. Those kids will probably be OK now that they are famous. Good people will help them. But what about all the others?

After all, charity doesn’t really work when everyone is a pauper.

Note: The video is from the October 11, 2011 episode of “The Kudlow Report.”