"We cannot expect that all nations will adopt like systems — for conformity is the jailer of freedom, and the enemy of growth. But however close we sometimes seem to that dark and final abyss, let no man of peace and freedom despair. For he does not stand alone. If we all can persevere, if we look beyond our own shores and ambitions, then surely the age will dawn in which the strong are just and the weak secure and the peace preserved." John F Kennedy, Address to U.N., September 25, 1961
The GDP revision came in firmly negative as expected.
The partnership of business and government spun this heavily as an anomaly that was due to the weather.
I doubt we will get anything much deeper in the further revision. The point of this exercise was to take all the bad results now, and dismiss them as old news and a winter storm phenomenon.
This has the added benefit of providing an easy basis of comparison for the next quarter and possibly the one after that, just in time for the midterm elections.
Tomorrow we get Chicago PMI and sentiment.
The real economy is struggling, because of stagnant wages and slack demand. When they don't have money from wage income, and the illusion of wealth they can borrow against from a housing bubble, people tend to cut back. duh.
The danger for the pigmen is that their crowd is doing so well, and the equity market is providing them such a nice sinecure, that they will carry this out too long, and trigger some unfortunate blowback.
It is interesting to see some bellwether elites, mostly nervous high profile figureheads, warning about this now. I doubt they will be heeded. Greed has the ball, and is heading in for the big win. What could go wrong?
“Much like Herbert Hoover, Barack Obama is a man attempting to realize a stirring new vision of his society without cutting himself free from the dogmas of the past, without accepting the inevitable conflict. Like Hoover, his is bound to fail.”
Kevin Baker, Barack Hoover Obama: The Best and the Brightest Blow it Again, Harper's 2009
"Hoover quickly developed a reputation as uncaring. He cut unemployment figures that reached his desk, eliminating those he thought were only temporarily jobless and not seriously looking for work. In June 1930, a delegation came to see him to request a federal public works program. Hoover responded to them by saying, 'Gentlemen, you have come sixty days too late. The Depression is over.' He insisted that 'nobody is actually starving' and that 'the hoboes...are better fed than they have ever been.' He claimed that the vendors selling apples on street corners had 'left their jobs for the more profitable one of selling apples...'
Hoover was a stubborn man who found it difficult to respond to the problems posed by the Depression. 'There are some principles that cannot be compromised,' Hoover remarked in 1936. "Either we shall have a society based upon ordered liberty and the initiative of the individual, or we shall have a planned society that means dictation no matter what you call it.... There is no half-way ground.' He was convinced that the economy would fix itself."
The policy errors being committed by Barack Obama and his team are all similar to that which J. Kenneth Galbraith cited in the Hoover Administration. That is, the 'trickle down' approach, which is treating a broken system as if it were still a functioning ideal, an ideal of the efficient markets hypothesis that probably never really existed in the first place.
If there is any corrective pain to be dealt, it will be delivered from the bottom up, and attributed to the inexorable necessities of 'The System.' The powerful and favored few, however, will be fully cradled from its effects in a generous web of officially sanctioned protection.
I find it striking that Hoover chose to crush The Bonus Army in 1932, which involved sanctioned government violence against WW I veterans, and that Obama took the same draconian approach with the Occupy Movement which was a largely peaceful protest against Wall Street, for example.
His is a war against whistleblowers and dissent, with a generous free pass given to some of the most egregious misdeeds of those at the top of the financial pyramid in terms of both enforcement and indictment. If there is anything that binds the elites in America, it is their urge for getting paid, and spectacularly and shamelessly so.
The only crime in Obama's America is to be both powerless and non-compliant. And perhaps to speak of any of its secrets and sacred cows, of which there are many.
Why does this happen? Because most of those who are in a position to reform the system at this time are creatures of the system, who are beholden to the system, who are caught in its credibility trap, and who see that system from a particular perspective and with a very selective bias. And that is, from the top-down.
This is a government of the system, by the system, and for the system. And it is a system that is unsustainable except by increasing amounts of fraud and force.
What comes next depends on which type of leadership comes next. The range of examples from the 1930's provide some preview, from Roosevelt to Mussolini, from left to right, with a large assortment in between.
But for now it is hard to tell if there if there are any genuine differences amongst them, all these leaders we see nowadays, all these creatures of The System. One might suspect that this is all a stage show, with the various factions and fights well scripted like the faux spectacles of World Wrestling Entertainment. And once elected, they just take their orders from management, and collect their generous paychecks, often after their terms of 'public service.' But at all costs, the show must go on.
This discussion below is from 2009. It is interesting to see this early days discussion from our own perspective, five years later. But I think the die was cast when Obama disclosed his appointments, especially to his economic team.
Tomorrow the June gold and silver contracts take center stage.
Overall the markets will be watching the first revision of 1Q GDP tomorrow morning. Even if it is negative I am going to be surprised if it has a negative effect on stocks that carries for more than a day. I do think we are in for a major correction in equities this year, but most likely not yet barring some exogenous event. I am watching for any of the characteristic signature of a major market top. I'll let you know if one shows up. September is more likely because by then the hopes of a recovery will either be proven, or begin to fade.
Let's see how June goes. There was nothing on the delivery side, and the Comex warehouses are scrambling to put some gold on the books ahead of another delivery month.
Silver held 19$ like a champ. Gold is a sleeping giant.
Stocks held their ground today, as the big tickle will be the revision of the 1Q GDP numbers.
As you know when it first came out I suggested it was artificially high, and would be revised lower. I think we may see that tomorrow. Keep an eye on the deflator.
Even if it is negative, which is probably will ultimately be, it will be blamed on the weather, and the attention will be directed to 2Q GDP which is expected to be a high positive number. Or at least expected to be so by those who are touting stocks.
Let us pray for those whose hearts are hardened against His grace and loving kindness by greed, fear, and pride, and the seductive illusion and crushing isolation of evil.
We pray that we all may experience the three great gifts of our Lord's suffering and triumph: repentance, forgiveness, and thankfulness. And in so doing, may we obtain abundant life, and with it the peace that surpasses all understanding.
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