Archive for the ‘Investing’ Category

Monetary Policy has no Effect on Wages in a Slave Society

Saturday, May 9th, 2015

Imagine that you are Fed chairman in 1830, and at an FOMC meeting you ask the committee: “how can we adjust our policy levers here at the central bank to get a wage boost for the slaves down south?” What would happen? Your fellow fed-heads would probably look at you like you were insane. Then they would offer suggestions, trying not to giggle in the process.

In the future, a big milestone in the march toward a fascist slave-state will go into the history books when Congress formally relieves the Fed of its mandate to strive for full employment. Perhaps this will be done in the aftermath of a global financial catastrophe caused by the Fed pumping absurd amounts of liquidity into the global financial system.

This is inevitable because with the ever-expanding policies of free-trade and mass-immigration, what is left of the USA’s economic boarders are rapidly melting away. And that’s why the wage data is still punk after trillions of stimulus from the Fed: wages in the formerly-sovereign USA cannot rise until after wages rise in the “Mexico” and “China” and “India” regions of the neoliberal global empire.

It’s pretty obvious that the Fed, and the ECB, have succeeded only in creating massive distortions in global financial markets (such as negative rates on German bunds). Perhaps this is why Janet Yellen is so hesitant to make even a teensy quarter-point rate hike: she knows that she will have to engineer the mother of all soft-landings. The path of least resistance for her would be to keep rates at zero until a rise in inflation forces her hand. Once the CYA is in place, she can blow up the world.

If David Rockefeller and his neoliberal oligarchy were competent, they would have removed the Fed’s full-employment mandate long before they reached their goal of commoditizing global labor at a wage-rate of $2 per hour. But they are anything but competent, and the 2008 financial crisis was only a small taste of the havoc they will wreak upon this nation.

Godspeed Janet Yellen, Godspeed.

Oh My God, The Wages!

Saturday, January 10th, 2015

There was consternation on CNBC yesterday after the Employment Situation report showed a drop in wages. I find this hilarious because CNBC is the media flagship of neoliberalism, America’s national ideology, and the beating heart of neoliberalism is low wages.

The primary goal of our economic policy is to beat down wages via the mass off-shoring of jobs, and the mass immigration of cheap labor. Not to mention flat-out criminal corporate wage-theft (keep reading). Yes, this is an evil policy, but it is a successful one. Very successful, as evidenced by the massive increase in corporate profits. Devouring the middle class might be the most-profitable economic policy ever.

The talking heads on CNBC should have been celebrating. Instead, they are baffled that their ideology isn’t producing a land of rainbows, lollipops, and puppy dogs. What a bunch of brainwashed buffoons.

To illustrate, imagine a planter growing cotton on a thousand acres. Then he bribes the government to run-off the Native Americans living next door, buys the land, and doubles the size of his plantation. Now he needs more workers, so he goes to the market and purchases a hundred more slaves. That night, he drinks a toast to himself: “I am a great jobs creator!” But wages have not improved; they were $0.00 per hour before, and are still $0.00 now.

What is happening in the USA isn’t too much different. Recently, one of our fabulous jobs-creators in Silicon Valley did something similar. They flew in eight workers from India, made them work 120 hours per week, and paid them only $1.21 per hour. Now, let me point out something that might not have occurred to you: $1.21 per hour is lot closer to $0.00 per hour (slavery) than it is to the California minimum wage of $9 per hour.

That is a microcosm of what is happening in the USA. America’s once mighty middle-class workforce has, to a great extent, been either eliminated by off-shoring, or replaced by a massive foreign scab workforce tens-of-millions strong.

And what can Janet Yellen do about that? Absolutely nothing. The best she can do is keep rates low, and pray, but low rates cannot even put a dent in neoliberalism. Ultimately, it’s not her job, and she has no power to stop the forces driving wages lower.

If you are a neoliberal baffled by the lack of wage growth, may I suggest a psychiatrist skilled in cult deprogramming?

Further reading: Here is the story that I mentioned above: “Bay Area Tech Company Caught Paying Imported Workers $1.21 per Hour.” Management’s excuse was they thought that they could pay India’s minimum wage; that somehow U.S. and California laws do not apply to immigrant workers. Do they also think that they could go to Sudan and purchase slaves, and keep them slaves in California? Maybe they do. Maybe management’s homes should be searched. Interesting fact: back in the 1990’s, I worked for a software company in Silicon Valley that had offices in the same building as the company in the story, Electronics for Imaging. What if Janet Yellen parachuted into EFI’s offices? What could she do? Not a damn thing.

Funny: Mohamed El-Erian calls it the “wage puzzle.” Story here.

Surprised by the Strong Jobs Report?

Sunday, October 5th, 2014

Friday’s jobs report caught investors by surprise, and sparked a buying panic in the stock market. With 248,000 jobs created over the expected 215,000 the Dow rallied 208 points.

But my subscribers at DailyJobsUpdate.com were not surprised at all. Three days prior I sent them this chart showing an acceleration in withholding-tax collections (click to enlarge):

Trailing-Quarter

The chart plots the quarterly growth-rate of federal withholding-tax collections over the trailing quarter. So, each bar is the growth-rate of the past 90 days over the corresponding period from last year.

The data is noisy, so a 21-day moving average (red line) is used to highlight the trend. The green arrow points to where the moving average was last month at this time – about 5.25%. The black arrow points to where it is now – about 5.75%. So, that’s solid acceleration during September.

Not bad, huh?

If the Fed stops cycling interest rates, does the business cycle go away? Maybe it does; maybe that explains the freakishly steady, if lackluster, creation of jobs. In any case, the moral of the story is that you should go to the Daily Jobs Update and subscribe right now.

Family Dumpster

Saturday, July 12th, 2014

On Thursday, Family Dollar Stores, Inc. (FDO) reported a sharp drop in profits, and said they would close 370 stores. When people can’t afford to shop at Sears anymore, they go to Walmart. When they can’t afford Walmart, the go to Family Dollar. But what is the next step down? Family Dumpster.

Now that the multinationals have off-shored the American middle class, the big question is: can they devise a way to monetize dumpster diving. Perhaps they can. I notice that dumpsters are no longer left unattended out back. Now they are enclosed in brick buildings. Maybe during the small hours of the morning, a sales rep from Family Dumpster could open the buildings and charge homeless people a fee to spelunk the dumpsters. I can hear the greeters now: “Welcome to Family Dumpster!”

But seriously, people who have been expelled from the capitalist economy against their will have another option: sharing. For example, if you have no job, but own a house, you can now generate income with the help of Airbnb.com. There are now such companies for sharing every conceivable thing from baby clothes to cars. And they are growing. Fast. And taking market share from capitalist incumbents.

An Airbnb IPO would probably see the company with a market-cap larger than Hyatt Hotels (H). And it would be poetic justice. As I reported in my book, companies like Hyatt are notorious for breaking unions, firing American workers, and replacing them with desperate immigrants at minimum wage – and then working those immigrants like Alaskan sled dogs. Now, former hotel workers are striking back and taking market share via Airbnb.

Ladies and Gentlemen. What we are seeing is nothing less than the suicide of capitalism. And let the record show that the American people did not turn their back on capitalism. It was international capitalists who turned their back on the American people. Turns out, allowing a fat, drunken, incompetent (David Rockefeller) to design the global economic system wasn’t such a good idea after all. Who knew?

Note: Here are some more sharing companies: Couchsurfing, RelayRides, Getaround, Liquid, Lending Club, Fon, SideCar, Poshmark, Neighborgoods.

Down Goes Kudlow!

Thursday, March 20th, 2014

Larry Kudlow’s CNBC show is no more. The official story is that he is retiring, however that sounds like BS to me. On Monday (or was it Tuesday?) Kudlow said: “But I still have a pen” which is an expression of defiance, and puts the lie to the retirement story.

I reckon that the demand for Koch Brothers talking-points, neoliberalism, and non-stop warmongering isn’t what it used to be.

Nobody, other than myself, watched Kudlow’s show, but it is not a small thing that this beacon of globalism has been extinguished. First, the people struck down the attempted war on Syria. Then they struck down Larry Summers as Fed Chairman. And now they have given Kudlow the cold shoulder, voting with their eyeballs against neoliberalism.

We will have to see what CNBC puts in Kudlow’s slot, but this looks like another stinging defeat for the Oligarchy.

To see Kudlow at his most-evil, see my post: “Larry Kudlow is Pure Evil – Part 2.”

Here my other posts about Kudlow (from newest to oldest):

CNBC Rebellion
Larry Kudlow Lies About Immigration
Larry Kudlow, Gas Bag
Bizarro Kudlow Cheers Workers
Larry Kudlow is a Declinist
Where Are Those Jobs Mr. Kudlow?
Larry Kudlow, Patriotic Globican
Kudlow Goes Berserk
Larry Kudlow, Chinese Patriot
Larry Kudlow is Pure Evil
Larry “Global Job Creation” Kudlow
Kudlow, Idiot – IBM, Evil
Larry Kudlow is an Idiot #2
Larry Kudlow is an Idiot
Kudlow Congratulates Citi After Catastrophe
Kudlow: “Hurrah for Recession!”