US economy wades deeper into the swamp
Jephraim Gundzik writes for Asia Times on financial matters; and he is one of a handful of investment advisers who seems to maintain some connection with Planet Earth. This is not an optimistic assessment; and some have been saying for some time that the magic carpet of the housing market had faulty aerodynamics. The crisis of accumulation that has swallowed billions for decades is turning toward the metropolitan middle class now to “externalize” the costs of all that fictional value.
Investing in a fool’s paradise
By Jephraim P Gundzik
The rapid slowing of America’s economy has been shrugged off by stock markets worldwide, which continue to vault higher on the increasingly misplaced notion that corporate profits will grow perpetually.
In sharp contrast, currency markets have grasped the idea that the US economy is falling into recession, punishing the dollar. As economic weakness intensifies in the months ahead, expect FULL ARTICLE
Legume Sam:
My guess is that, if the stock markets are doing well, this is because investors are disinvesting away from the United States…
1 May 2007, 9:05 amCharles:
“The Chicken Littles have been in a panic about the US attacking Iran. I have consistently said is nonsense. One of the reasons offered as a motive for taking an action that would result in the summary defeat of US forces in Iraq was the Iranian oil bourse. There is a notion that Iranians denominating their oil market in Euros will somehow undermine the dollar as global base currency. This might be the case if Euroland had enough oil and priced oil in Euros itself, but Euroland has hardly any… oil. Iranians pricing oil in Euros still will not enable Euroland to run printing presses like the US does, which pays for its drunkenly lavish military adventures by loaning money to other countries that it has not the least intention of every paying back.”
^^^^^^
loaning money to other countries or borrowing money from other countries ?
STAN: Yikes!!! Holy misspoken! Thanks Charles. Sorta changes the meaning, eh?
1 May 2007, 1:52 pmCharles:
At least you know I’m not sleeping through reading your article ( smile )
2 May 2007, 9:34 ampaul whalen:
The run-up in the stock market and the drop in rnon-residential investment,which has dropped so far for so long that its a mystery why a severe recession has not yet happened,are both part and parcel of triumphant capital’s win in the class war.Virtually all of the productivity gains over the past 20 years have gone to capital in the form of profits.Instead of being invested in the US in the form of more machines,plants,etc. it has gone to China or to buy back the shares of US multinationals thus levitating the price and value of senior executives stock options.
2 May 2007, 3:13 pmCharles:
This pretending by China and the rest that the dollar-emperor is fully clothed is a fiction to protect the value in central bank reserves; and it allows the US to finance its wars by running a printing press. (This is something the US left largely fails to grasp - at its own peril - when it fetishizes currency with the purely polemical claim that money spent on the war is being diverted from social services. This is blatantly not the case, and when the proverbial chickens come home to roost, the left that employed this convenient fallacy will be as hard put to explain itself as the right… with more disastrous consequences, because the left will be most needed at exactly the time its own earlier opportunism on this matter undermines its credibility.)
^^^^^^^
On this, how about a left position something like “if you can use printing presses to print money for war, use printing presses to print money for the poor “.
The federal government can use the same funny money cash they borrow from China and Japan to finance a War on Poverty instead of a War on Iraq.
The whole logic of how all wealth is created on Mt. Finance Olympus is suspect. Are the activities of investment bankers really producing the equivalent in wealth what they are paid ? Do they really “earn” it ? No. The working class demand of Wallstreet is “Just give us the money; we don’t care how it’s financially rationalized.”
Charles
3 May 2007, 10:56 amBarb:
Actually they’re just theives. A good article to this point, vis a vis the private equity boom:
http://www.prudentbear.com/randomwalk.asp
Money is being loaned into existance, and then the debt is broken up and sold on several times (with attendent fees, and with the interest rates increasing) until what started as an almost 0% loan from Japan/China to buy say Burger King ends up as thousands of loans at 30% from subprime lenders to buy houses. The neighbourhood loan shark is now backed by Goldman Sachs. Or your pension fund…
The Economist recently reported that subprime lending rates, and attendant reposessions, have constituted the largest transfer of wealth out of the hands of Black people since slavery. Somehow this information got buried under storm over what some corporate-backed idiot DJ said on the radio about Black women basketball players. Or maybe it wasn’t an accident?
4 May 2007, 7:23 pmBarb:
whoops, sorry I didn’t think it worked the first time -
4 May 2007, 7:24 pmBarb:
The case in point:
http://www.sun-sentinel.com/news/local/southflorida/sfl-chomexxmay04,0,2485146.story?coll=sfla-news-front
ml-implode.com/
So the loan is never meant to be paid back while making us all debt-slaves.
And what it looks like from above:
http://www.cross-currents.net/charts.htm
There are some capitalists out there worried that money is being created without being based on any value, or should I say ripping-off, of labour and the environment.
4 May 2007, 8:03 pmCharles:
There are some capitalists out there worried that money is being created without being based on any value, or should I say ripping-off, of labour and the environment.
^^^^
8 May 2007, 2:12 pmWhat are they worried about ?
Charles:
A way in which war spending cuts domestic spending.
CB
^^^^
Reuters, Mon May 7, 2007 7:17PM EDT
Iraq war hampers tornado recovery
By Carey Gillam
OVERLAND PARK, Kansas (Reuters) - A shortage of trucks, helicopters
and other equipment — all sent to the war in Iraq — has hampered
recovery in a U.S. town obliterated by a tornado, Kansas Gov.
Kathleen Sebelius said on Monday.
“There is no doubt at all that this will slow down and hamper the
recovery,” Sebelius, a Democrat, told Reuters in Kansas where
officials said the statewide death toll had risen to 12 on Monday.
“Not having this equipment in place all over the state is a huge
handicap,” Sebelius said.
The tornado that devastated Greensburg, 110 miles west of Wichita,
started a weekend of violent weather in Kansas, a state in the heart
of the central United States region known as “Tornado Alley.”
Ten died in Greensburg, a town of 1,600 people. An 11th died in
nearby Pratt County and a 12th in a separate tornado in Ottawa County.
The twisters were accompanied by widespread flooding on Sunday and
Monday that required more than 200 water rescues and closed many
roads and shuttered several schools in another part of the state.
“We’re getting pounded in Kansas. We have the need for National Guard
in two different parts of our state now. This is really going to be a
problem,” Sebelius said.
Sebelius and other Democratic governors earlier this year assailed
the Republican Bush administration for the strains they said the war
had placed on their states’ National Guardsmen, frequently mobilized
for state emergencies.
On Monday, anti-war groups, including the National Security Network
and Americans Against Escalation in Iraq cited the shortage of
equipment to deal with the Kansas disaster as the latest example of
what they see as the war’s detrimental impact on domestic security.
OTHER STATES
A Pentagon spokesman in Washington said other states were supposed to
help provide resources in an emergency. White House spokesman Tony
Snow said the administration was doing what it could and equipment
would arrive if it was needed.
Kansas Emergency Management spokeswoman Sharon Watson said because of
the shortage of National Guard equipment, the state was rushing to
hire contractors to help clear debris.
Nearly 70 Kansas National Guard troops were arriving in Greensburg on
Monday to supplement about 40 troops already on the ground, and some
guard Humvees were available to start clearing wreckage, Watson said.
Sebelius said the failure by Washington to replace or return state
National Guard equipment deployed to Iraq was “not a very satisfying effort.”
The governor said Kansas lacked about half the large equipment it
could use for recovery efforts and debris removal, including dump
trucks and front loaders. More than 20 percent of its Humvees and 15
of 19 helicopters were sent to Iraq, the governor said.
The National Weather Service said the twister that hit Greensburg on
Friday about 9:45 p.m. was an F5, the highest on the scale. With
winds of 205 mph (330 kph), it stayed on the ground about an hour,
traveling 22 miles and wreaking a path of destruction nearly 2 miles wide.
“It’s been one of the most destructive tornadoes in the last 10
years,” said National Weather Service meteorologist Matt Gerard.
–
9 May 2007, 11:51 amRequired:
What’s a “chicken little”?
11 May 2007, 3:24 amDeAnander:
Chicken Little is a character in a children’s story, whose main contribution to the plot as I recollect is to run about squawking “The Sky Is Falling! The Sky Is Falling!”
Wikipedia is your friend…
Hence any person who panics easily, or who foresees Doom right around the corner and is wrong. Used loosely as “a scaredy cat”.
11 May 2007, 4:32 pm