Sober Realist

America: A Bona Fide Plutonomy

What nimrod gave you a negative on that remark? -- Obviously one of the Plutocracy which enjoys socialism for the rich subsidized off the backs of the middle class, i.e. Too-Big-To-Fail Bail-Outs.
Speaking of healthcare, here's a great trip down memory lane:
Hospital fees now 400 (to 800) times the cost in 1934
www.mountvernonnews.co...


On Sep 08 05:48 PM TraderMark wrote:

> That is a debatable subject. The general throwaway line is the middle
> class is better off or has the highest quality standard of living
> because of the most toys.
>
> One could make many arguments against it -
> is a situation where getting sick at the wrong time (no insurance)
> or with too little insurance, a good standard? i.e. your entire
> life savings can be wiped out by one stay in the hospital? is that
> a better situation than other countries?
>
> is a situation where to maintain the place in society as middle class,
> both parents have to work rather than the old standard where only
> the male had to (say 1950s, 1960s) "better"? Yes more toys now but
> what has it done for family and society?
>
> the previous example compared "today" to 50 years ago. What about
> versus 10 years ago? Do you honestly believe if you talk to the
> average Joe he feels he is better off than 10 years ago?
>
> Now let's be clear many average Joes got themselves in a serious
> pickle by spending far more than they have. But many others are
> just struggling to get by even by following the rules.
>
> I hang out in the middle class and maybe I'm on the wrong side of
> the tracks or live in the wrong state but many believe their kids
> won't have a chance to repeat the standard of living they did. And
> those are coming from people who are working 2-3 jobs to provide
> as much as their parents did with 1 job.
>
> Argument is not that the middle class deserve to be rich - the larger
> question that needs to be asked is what % of the population is going
> backwards or having to do 2-3x as much as in the past simply to stay
> in the same place. While a small sliver prosper no matter what.
>

America: A Bona Fide Plutonomy

Good comment Graham.
Emily Spencer makes the point more bluntly in her essay "The Widening Gap In America's Two Tiered Society"
08/25/09

"Americans, particularly ones from the middle class, need to realize that there are no core entitlements imparted by their government representatives, nor any other sources. They have none and should adjust their expectations accordingly.
If the U.S. populace somehow imagines that its members are viewed any differently than any other populations across the world that are used to produce maximal profits for the top economic class, there's a rude awakening in store ahead. Further, most legislators simply do not care whether middle and lower class interests are or aren't well served as long as they, themselves, can somehow make out well in the times ahead...."

A corporatocracy is the best label for our form of "governance."
A government which serves the desires and needs of corporations and special interest groups rather than those of its own citizens. A look inside the federal government right now, and especially during the last thirty years reveals a very cozy relationship between corporations and government. These relationships exist across all industries from defense and banking to medicine and agriculture.
www.chrismartenson.com...

“Make no mistake _ the status quo is corporate control and the government's agenda is not only to maintain corporate control but increase the grip of corporate special interests.”

On Sep 08 11:32 AM Graham and Dodd Investor wrote:

> In the attached instablog post, I pointed out that the American
> plutonomy was trying to make America's bottom 80% more like the world's
> bottom 80% by breaking down the barriers protecting them.
>
> seekingalpha.com/insta...
>
>
> The conclusion was that if an American percentile ranking became
> a GLOBAL percentile ranking, the bottom 80% wouldn't have much to
> cheer about.

Why Did We Bail Out the Banks?

Harry,
You question of why we bail out these criminal banks and preserve their failed model is a rhetorical one. There is no logical reason for why we would prop up a failed system. So the question whould be what is causing the government to do this. It is that they are captured by the financial industry and mainstreet America is the tragic victim. The only way out is to bring down the American financial oligarchs and change our government from the corporatocracy that it is. They're supposed to work for us, the U.S. citizen, not the big pigs of Wallstreet.

Surprise, Surprise, Surprise: Positive Economic News Everywhere

Shazam! Look at all them thar green shoots! Be careful not to step on 'em.

Wall Street Breakfast: Must-Know News

"Foreclosures reach new high.
"Despite everybody's best efforts to date we're not really making any headway against the problem," said Rick Sharga, senior vice president at RealtyTrac."

I'm still sticking to 2015 for a recovery as stated here:
seekingalpha.com/user/...

America: The Land of the Fleece Scam

Here's an interesting article explaining in detail 6 major ways the taxpayer is being taken to the cleaner:

1. By overpaying for its TARP investments, the Treasury Department provided bailout recipients with generous subsidies at the taxpayer's expense.

2. As the government has no real oversight over bailout funds, taxpayers remain in the dark about how their money has been used and if it has made any difference.

3. The bailout's newer programs heavily favor the private sector, giving investors an opportunity to earn lucrative profits and leaving taxpayers with most of the risk.

4. The government has no coherent plan for returning failing financial institutions to profitability and maximizing returns on taxpayers' investments.

5. The bailout's focus on Wall Street mega-banks ignores smaller banks serving millions of American taxpayers that face an equally uncertain future.

6. The bailout encourages the very behaviors that created the economic crisis in the first place instead of overhauling our broken financial system and helping the individuals most affected by the crisis.

www.alternet.org/modul...

Housing's Big Picture Isn't Pretty

"Look for a monster housing rally around the corner as the government announces a the Mandatory Second Home Purchase Program for Americans deemed to be carrying insufficient levels of debt." --- Dean M.

Simply put, when the price of a house far exceeds the average annual income of the mainstream buyer, then that price must drop to a wage-sustainable level.

Excellent point by LilBob:
"One thing I find interesting is that if you look at the writings of some early 20th century economists such as Pigou and Hobson, conditions that required urban workers to spend more than 20% of their disposable income on housing were considered significant contributors to poverty. Nowadays, someone who only spends 20% of their salary on housing is considered to be doing relatively well."

William Black on the Greatest Bank Boondoggle in History

Mark,
Your biting sarcasm and wit are unparalleled. Without your articles I might get brainwashed by the pervasive mainstream media/government propaganda. How long can this dysfunctional system go on? Clearly we are on an unsustainable path.

Global Markets in Review: Risky Assets Surge

Dondon,
The bulls are not seeing the forest for the trees:

"The list of U.S. companies able to report better-than-expected results for the most recent quarter because aggressive cost cuts offset falling sales is a long one.
It includes appliance maker Whirlpool Corp, advertising powerhouse Omnicom Group Inc, specialty glass maker Corning Inc, wireless telephone service provider Sprint Nextel Corp, drug maker Pfizer Inc tool maker Black & Decker Corp, and Kraft Foods Inc."
www.reuters.com/articl...

A Bull Market That Few Are Buying

This article is actually the best and most detailed I've read explaining the inexplicable V-shaped rise from the ashes of the stock market. Peter Schiff reflects these sentiments in a recent article (seekingalpha.com/artic...) , but suggests the stimulus-fed rally could last 2 years before the floor falls out.

Financial Elites and the Enronization of America (Part II)

Excellent essay!
I, along with millions of other American families, am among the heap of wreckage that the corrupt financial and political elite of this country have laid waste to.
The financial oligarchs have their tentacles deep into the political structure of this country. Extracting them from it and whittling our government down to a much smaller, managable size (working for the people and in fear of the people, not vise versa) is what is needed. At the current rate of corruption, the time is approaching fast.
Prior to 1930, the cost of our government compromised just 12% of the total econmy. To cover the 12% government spending share of the economy with enough tax revenue, the average person had to work 1.4 months per year. Today, the government extracts 45% of the economy by its spending, plus another 13% of the economy via its un-funded regulatory mandates - - leaving less than half of the economy to the free-market private sector. Today's government spending requires the average person to work 5.3 months to support government. That's a 4 fold increase in the size of the government in less than a century.
Slow, gradual government expansion over time is not recognized by the masses which gradually become dependent upon it. This leads to serfdom to the state. America is more a socialistic nation, and less a free-market economy, then ever before in its history, because our total economy has become significantly more government-dominated and dependent. Our founding fathers are rolling in their graves and weeping for the children of this once great land. We are being extin­guished and stupefied as a people, reduced to a flock of timid, subservient sheep of which the government, along with the financial oligarchs, is the shepherd. The despotism of dependency is destroying our country.

Stress Tests Were Never a Serious Exercise

The financial sector debt of our economy is currently $17.2 trillion and going vertical on the charts. That's 151% of national income. Back in 1957, the financial sector debt was only 5% of the economy's national income. It has now zoomed to 140% of today's economy - a debt ratio growth rate 28 times faster than general economic growth. The financial sector has clearly grown out of balance with the real economy and has become a blood-sucking leach upon it. Financial institutions dominated the S&P 500 by 2002, and peaked at 21% of the index in 2007. Even after the crash in the banking industry, the financial sector still constitutes most of the stocks in the index and 16% of the market value.
The financial sector depends on and feeds on a nation addicted to exponentially growing debt. This debt dependent economy of ours that has evolved over the last 3 decades has been organized and dictated by the omnipotent central planning monopoly called the Federal Reserve. Look at the following graph to see how the Fed's long-term declining federal fund interest rates was the impetus and catalyst for fueling ever-increasing consumption with ever-increasing debt. This was not an interest rate dictated by a free market but by the market-intervening, central planning Federal Reserve.
mwhodges.home.att.net/...
Since 1981 -- at the same time when the Fed started it decades-long lowering of the interest rate, America's Total Debt ratio (to national income) of all sectors started exploding upward and outstripped actual economic growth many times over.

We can attribute the current economic collapse directly to the Federal Reserve. The current crisis has us borrowing from the Federal Reserve so we can pay it to “bail out” their member banks and which we then get to pay back to them with interest! They created these artificial boom cycles by increasing credit and the money supply. A true free market would have dictated a much higher interest rate that would have prevented the catastrophic housing bubble. A basic tenet of the Austrian School of Economics is that any government interference with markets will lead to distortions and inefficiencies in an economy. They also believe that the price of current consumption versus future consumption, that is, the interest rate, also must be allowed to be determined in a market free of government influence. Our current system does not allow this to happen. In other words, we don't have a true interest rate which gives the market a clear and true picture of supply and demand. A capitalist market cannot function properly if there is no true interest rate to direct it.
We have a financial sector that controls our government. The securities and investment industry contributed $53 million to congressional and presidential candidates in 2008, according to the Center for Responsive Politics. Is it any wonder that even after the overwhelming public outcry against the first proposed bailout in Sept 2008 and initial defeat by the House, the bailout eventually was rammed down our throat. Those Congressmen who had initially voted for the first bailout had received 54% more money in campaign contributions from banks and securities firms than had those who voted against it.
Our government and the Fed have worked in unison to produce this centrally planned, debt-based, market-manipulated economy with abnormal boom/bust cycles which has allowed the U.S. government to grow ever bigger and more intrusive by raising taxes ever higher and funding all sorts of conceits like wars and wasteful public projects. The U.S. government is now the largest it's ever been in history. Now the U.S. government and the Federal Reserve are busy trying to reinflate this corrupt system.

So you see, we are hostage to this current system that serves the politicians and the financial elite, but not the people of this country. "The government that governs least governs best." - Thomas Jefferson







On Apr 29 07:49 AM Speedspirit wrote:

> The banks should not be nationalized but declared bankrupt along
> with the Fereral Reserve and put into recievership. Painful but who
> is liking the direction this is going. Rip the band aid off and disinfect
> the wound. Or we will die of blood poisoning.
> Our President isnt smart enough to handle this job. He has to go.
>

Number of U.S. Homes With Negative Equity Is Stunning

How do I go about getting my mortgage principle lowered?

It Did Happen! - Cramer's Mad Money (9/29/08)

Cramer is just one more tool available to us, but beware of his musings and take them with a grain of salt. Don't let him be the deciding factor for you when investing.