BRUCE E. W.

The Global Oil Scam: 50 Times Bigger than Madoff

You deserve a medal of true merit!

On the Relationship Between Worker Productivity and Layoffs

The study of nurse staffing to patient ratios demonstrate conclusively that not only will productivity be exploited progressively but that cost expenditures are minimized to the detriment of the quality of care itself. All this while profit margins become core concerns. The neverending pursuit of pure profit is inevitably matched to a relentless pursuit of cost reduction. While this sounds good on paper, in the market of the real world it means burnt out loyal workers strapped to a daily personal liquidity crisis and it just as often reults in cheaper products and watered down quality assurance. The "sweatshop" mentality of our market economy has been legitimated and justified by the "price" theory of market incentives. The problem is that no one at the top levels seem to realize that one persons' price is another persons' cost.

Outsourcing had taken this around the world and kept a consumer price index reasonably aligned with demand. Even then, however, American Labor was damaged and it became a political football (along with migrant worker scapegoating). Now the room is full and it has turned on a stratified society that can no longer indulge itself in denial. Even if the gross numbers of static economy can be twisted to appear to justify the "wealth" building financial stealth of our economy, the future dynamics of an American household "Standard of Living" will decline proportionately.

Politics of Economics

homepage.newschool.edu...

Everyone who follows the market is keenly aware that the drift of opinions are meant to sway sentiments towards a targeted position.
There are whole segments of the markets at variable postures at any given time. The confabulations of history and economics also follow along the same paths of consciousness, perceptions, interests, and manipulations of revisionary precepts and presuppositions. History can and does repeat itself due to the established interests of deceitful capture of popular opinions.

The current political arena is a mixed bag of such manipulation. It is interesting to look back at the "apologists" (link) of institutionalism in American socioeconomic history. The politics will follow the money. In my estimation, that's where President Obama is making his now critical error in judgement. Instead of tracking the paths, he's literally following the money down a primrose path of boom or bust ideology. An ideology that has its roots and foundation not only in real history, but in the confabulation of its position.

Popular sentiment is searching for feel good precepts and emotionally reactive presuppositions to rationalize legitimate and justified explanations of their own positions. Unfortunately, we as a consumer society, are too quick to take the prepackaged presentation designed to capture an effect. They all have a shelf life, but the moods they manipulate are primal and subject to herd conformity and the trip wires of survival. Truth doesn't matter when you hit the right nerve!

Global Bubbles: The Geithner-Brown Split

This week .............Month ago............ Year ago
WSJ Prime Rate 3.25.......... 3.25................ 4.00
Federal Discount Rate 0.50............ 0.50.............. 1.25
Fed Funds Rate (Current target rate 0-0.25) 0.25.......... 0.25..... ...(year ago)=1.00
11th District Cost of Funds 1.272... 1.412........ 2.769
The cost of money ranges over time but is a universal factor at any given period. Is it not possible to create a progressive/ regressive set of incentives and disincentives around a differential / preferential set of rates that actually target very specific designated area segments and sectors of the economy? Isnt it then possible for the Treasury to establish sophisticated "T" accounts and accountability to shift finance in preferable directions while slowing down other sectors of pure speculative opportunistic wealth mongering?
I am sure that the high priests of the golden calf would call this central planning, but it seems like a systemic articulation idea to me. Couldn't it be more feasible than the "tax" word?

Russ Roberts's 'The Price of Everything' Really Conveys How the Economy Works

A better reading, one you might consider yourself:
The WEB OF DEBT. 2008; by Ellen Hodgson Brown, J.D.
Third Millenium Press, Baton Rouge, Louisiana 800 891- 0390

webofdebt.com

Accounting for Losses at BofA and Fannie

B of A / GS and GSEs are quite similar these days. They're all gov. backed so why the slant against an underserved market that was actually designed to help people establish themselves? There isn't really any difference between the government backed financial service sector that failed and was bailed out; in principle. What hypocracy! In the long term analysis of comprehensive and empirical history, it has been private sector profit SCALPING and the cults of personality among CEO inbred circles that has led to a culture of default all around them. As a controlled study, comparisons between the two sectors only demonstrate conclusively that Friedman was totally wrong, and that PRICE THEORY IS A ONE DIMENSIONAL / SELF SERVING DISASTER
perpetuating itself through elitist stupidity and arrogant self praises amidst an abundance of evidentiary failures and delusions.

Weak Currencies, Stagnant Economies Weigh on U.S., U.K. Investors

PRICE THEORY is being proven wrong exponentially and a total, utter failure: all it is doing is causing a chronic ANEMIA and it is bleeding this systemic failure into total disequilibrium. Speculative profit scavenging has become a dependency addiction in the financial sector. The next turn on equities will be collapse and the price will still go higher. So much for supply side Friedmanism; it's turnning into Dr. Frankenstein's version of creationism.

Home Purchase Tax Credit Extended: Is This Wise?

The fallacy of dillemma once again. I didn't see the option to put $38 Billion into Housing "or" infrastructure construction, so to weigh the one against the other is simply not proper.
I had seen the earlier testimony of Simon Johnson in Congress who also spoke against the expenditure of more capital on this expiring tax credit, presumably a position against false bottoms in the industry simply draining the till. But in tracking the history of criticism on this tax credit the issues seem to be more about accountability and abuses which were marginal to its application.
Overall, the actual implementation could use some stricter guide lines and it is puzzeling why they appear to have been loosened instead, but this does not seem to be in question. With all the capitaliztion and "quantifying debt" being "eased" all over the banking and finance sectors, this seems to be a minimal application towards a middle class "pump" that should hold some infrastructural extremity in its walking stride.
I suppose this may well turn out to be one of those items that look bad to the people who are already in a well healed home setting, But it may well be a last helicopter leaving Saigon to those at the other end of the spectrum. It seems very little "demand side" incentives exist to be throwing out the baby with the bath.

Fannie's Tax Credit Sale to Goldman: No Deal

So who is right, GS or Treasury? Just this one time I am going with Goldman. They would not have made the statement to Bloomberg unless they had the numbers to back it up

This is a bit hair raising as an excuse for due dilligence of any flavor, but otherwise a good focus on a complex and subtle issue that would have otherwise gone unnoticed. Some excellent commentators also added to the information flow with convincing arguments that clearly showed the duplicity in the shades.

A Global Problem with No Solution

When the health of the US economy is equated through the central currency flow of either Wall Street or the Financials & Big Banks it tends to read the corrections as one dimensional equations reinforced by market logic.
If the complexity of a "unified field theory" for the sectioned; segmented; inverted; reverted; stratified; factioned and fractioned, and then still fragmented into reactionary and counter-reactionary activities in cross-sectional and interdependent "markets" were truly possible; it is doubtful that you could just throw money at it to solve its impingements, excesses or gridlocks with a simple flow chart writ large.
Isn't it quite possible that when a system of fiat currency has been so disjointed it can have dillution problems with liquidity crisis at one or several interacting levels, while it has counterproductive constriction and interdependent solvency problems interacting at other spectrums of essential economic segments?
Until we begin to assess a comprehensive and interactive vertical WITHOUT a DIRECTIONAL BIAS (up/down demand / supply) along with interactive factors from horizontal measures,... these "classic economic terms" for banking and finance do more to "razzle & dazzle" than actually provide handles on a healthy correction for a stable All American Economy (let alone a model for a Global base and reserve). Perhaps worse, they just keep pushing us from one end of "WRONG" to the other!

Perhaps the Fed should do something tailored to the contemporary issues instead of the 1920s and its politically loaded class factional history.
A selected variable set of interest rates directed at different segments of finance might be a consideration. Why should the rate of borrowing to refinance a bad debt be the same as the rate to build a new office building or add to a constructive infrastructure? If debt rates were differentially programed for the desired effect , everything from residential and commercial neccessities to a full gamut of "less vital" essentials (increasing debt...pure speculation) could be graded. Why can't the "cost" of money be ajusted to be a market itself!

This is the innovative fiat capital of the world. Why can't we have a differential "smart rated" differential interest rate for selected sectors? Obviously "universally cheap" money is not going where we want it, so why not mark the bills and follow the money as we would if it were authentic investment capital?

One of the reasons Mr. El-Erion has on his side is that his domain of bonds are more closely linked and secured as an asset class. The interests of PIMPCO should be taken with caution, but the suggestion of a "structural" solution speaks more to a substantive resolve and implies a "comprehensive" appraisal that is truly systemic. As long as a small group of Economic Theorists are trying to secure their perceived world and their political economic theories, we will continue to get more of the same. If we are to break this feeding chain we must start with a dissection of the economies that make up our markets and begin to appraise them one segment at a time...with appropriate remedial actions that can be reassesed and for real measurable results and continual positive guided adjustments for the optimum desirable outcome.

Dear Fed: The Problem is Solvency, Not Liquidity

Perhaps the Fed should do something tailored to the contemporary issues instead of the 1920s.
A selected variable set of interest rates directed at different segments of finance might be a consideration. Why should the rate of borrowing to refinance a bad debt be the same as the rate to build a new office building or add to a constructive infrastructure? If debt rates were differentially programed for the desired effect , everything from residential and commercial neccessities to a full gamut of "less vital" essentials (increasing debt...pure speculation) could be graded. Why can't the "cost" of money be ajusted to be a market itself!
This is the innovative fiat capital of the world. Why can't we have a differential "smart rated" differential interest rate for selected sectors? Obviously "universally cheap" money is not going where we want it, so why not mark the bills and follw the money?

Dear Fed: The Problem is Solvency, Not Liquidity

When the health of the US economy is equated through the central currency flow of either Wall Street or Big Banks it tends to read the corrections as one dimensional equations reinforced by market logic. If the complexity of a "unified field theory" for the sectioned; segmented; inverted; reverted; stratified; factioned and fractioned, and then still fragmented into reactionary and counter-reactionary activities in cross-sectional and interdependent "markets" were truly possible; it is doubtful that you could just throw money at it to solve its impingements, excesses or gridlocks with a simple flow chart writ large.
Isn't it quite possible that when a system of fiat currency has been so disjointed it can have dillution problems with liquidity crisis at one or several interacting levels, while it has counterproductive constriction and interdependent solvency problems interacting at other spectrums of essentail economic segments? Until we begin to assess a comprehensive and interactive vertical WITHOUT a DIRECTIONAL BIAS (up/down demand / supply) along with interactive factors from horizontal measures,... these "classic economic terms" for banking and finance do more to "razzle & dazzle" than actually provide handles on a healthy correction for a stable All American Economy (let alone a model for a Global base and reserve). Perhaps worse, they just keep pushing us from one end of "WRONG" to the other!

The Fed and Fannie Mae: Throwing Money Down a Black Hole

vanityfair.com/pol... Quote:

"Many believe the government-backed mortgage giants known as Fannie Mae and Freddie Mac were major culprits in the economic meltdown. But, for decades, Fannie Mae had been under siege from powerful enemies, who resented its privileged status, its hard-driving C.E.O.’s, and its huge profits. Surveying Fannie’s deeply dysfunctional relationships with Congress, the White House, and Wall Street, the author tells of the long, vicious war—involving most of Washington’s top players—that helped propel one of the world’s most successful companies off a cliff."
by Bethany McLean February 2009

Ultimately the CREDIBILITY of the US Government and its ability of its trustees to ASSURE THE WORLD that it will, under all circumstances, STAND BY ITS WORD to back these GSEs is the critical question that will stand the test of time in this charade of vested interests. While 80% of all the bailout capitalization (plus the actual currency being pumped into the economy) has been going to the Financial Service sectors, a disproportionate focus remains levied against the GSEs and their holdings. Who stands to gain? Certainly the taxpayer is going to end up paying no matter what!

The Vanity Fair article cited above suggests that the corruptions and distortions are more to do with the private sector's interests over the past decades than with the actual failure of the GSEs. Now the Vultures want it all and they scream about taxpayers money; but not about traxpayer's homes and mortgage security itself.

Unemployment Claims: Watch the Distortions

The bottom 80% is not only suffering the unemployment but savings are dwindling, debt is up, forclosures and individual bankcruptcies are accellerating while the big money gets to buyout all these asset losses in stride. Meanwhile the upper tiers of the economy (micro & macro) are floating price structures against speculations into another counterbalancing set of spirals (the race upward seems to be equal to the race to the bottom). While the finance at the top is expanding the lower half is contracting into an austerity trap.
Thanks for the truth in spending eye opener, it seems most of the "virtual reality of news" these days is meant to sway the market sentiments from feel good to fearful doom and back again like the wind to suit the market makers' bosses.

World Bank, IMF Speak Out Against Developing World Asset Bubbles

Price theory in real time serves only one sector at the cost of another. The stratfied macro-economy is being dissected and micro-segmented with float values at the top (hoarding and competing simultaneously) and all constriction at the other 80% with cost ratios at a loss and basic dimminishing returns as a rule against the real asset value. The distribution of finance and credit is all in one direction and the sellout and shorting is not going into the infrastructure as a whole. Pretty soon se will be eating the price and not much else.