Our first mental image is of a huge playground where bankster-types have assembled a who bunch of paper abstractions which are now all failing. If this was a playground at a city park, we’d see an unusual number going “down the slide.
In Asia overnight, China dropped a hair more than 2 percent while Japan was down more than 1.7%. Not all grim (this is a playground, after all) since France was in mid technical bounce (can they touch the bottom of 3,000 on the CAC40? Germany, though, is trying its best to bust under the 6,000 handle on the DAX.
The US market is looking flat, or was earlier. May depend (in part) on what happens with factory order at 10 Eastern. But, the real number of the week will be the one out Thursday from the Fed: Consumer Credit (which really means debt). But we already know pretty much what to expect there, since the hand was tripped in a press release last week from the NY Fed, which is important enough to bear repeating:
NEW YORK – In its latest Quarterly Report on Household Debt and Credit, the Federal Reserve Bank of New York today announced that student loan debt reported on consumer credit reports reached $904 billion in the first quarter of 2012, a $30 billion increase from the previous quarter. In addition, consumer deleveraging continued to advance as overall indebtedness declined to $11.44 trillion, about $100 billion (0.9 percent) less than in the fourth quarter of 2011. Since the peak in household debt in the third quarter of 2008, student loan debt has increased by $293 billion, while other forms of debt fell a combined $1.53 trillion.
Why is that highlighted? It means simply that money ain’t going into buying goods and services. Instead is going into school tuition and such – which is why we focus on the flaws of higher ed in this morning’s Coping section below.
Gold was still about flat after that spectacular rise Friday, which we take to mean someone is in trouble – and maybe that will come out this week. Up and down a bit today as markets mark time waiting for news to come…
Censorship in China
June 4, 1989 was when Tiananmen Square went down in China and looks today like the drop in the Shanghai Composite was somewhat ill-timed and is causing ripple – like not getting reported because it violates happy-talk only internet rules there.
I wonder which is a cheaper method to keep the sheep dumbed down: internet censorship or pills? Wait! I have it! Let’s do both!
Meantime there’s trouble brewing for US Defense contractors who are on the bitter end of a report that defective Chinese parts are being delivered for US defense products…
Euro Clock Ticking
Say, you don’t thinking Europe really has three months to survive – a number George Soros floated over the weekend - do you?
Poison Pill Plan?
We mentioned a couple of months back the Germans were seen selling Dolphin class submarines. Well, this morning we’re looking at reports that suggest they went to Israel and that the Israelis are loading them up with Dimona products (their secret atomic works) on cruise missiles, so what does it mean? Attack plans or poison-pill defense? A little this, a little that….
Syrian opposition forces have been blowing up (Russian made) Syrian hardware near the Golan border.
Danish Terrorists Sentenced
Seems like up to 16-years each for the four men accused of planning a Muslim terrorist attack on a Danish newspaper office which was foiled hours before it would have gone off back a few years. You’ll notice I don’t do cartoons here…
5.9 in Java, and off Panama, three hours apart, both a 6.2 shaker and then a 6.4. Not sure about your feelings on this, but am I the only one to notice the lack of quakes from north Vancouver Island down to Mexico and is that something that should cause people to be stocking up?
Is this one of those things where the preplanning costs are low compared to the cost of inaction?
What’s after Zombies?
Gosh, we’ve just been through that B-movie mania, how about a follow-up feature like “March of the Killer Spiders?” Trouble is it is for real and worrying people in Asia.
Our consulting spider expert offers this:
Well, first of all, these things are not tarantulas because: (A) there are no pink tarantulas and (B) tarantulas generally have to be provoked to attack people, which these spiders did not require before attacking the populace en masse. More likely, they are some variety of funnel web or wishbone spider, a couple of poisonous and aggressive species that inhabit Australia (one of the best reasons not to go there). In any case, they are no sure what these lovelies are, but one thing is sure, that they attack in swarms and quite aggressively. Nice, huh?
Oh…uh…I’m going to unpack now. No point leaving the outback of Texas now.
More inner workings of the Vatican being aired out…and not pretty, since “the butler did it” is just too pat an answer.
Meeting in Chantilly, Virginia. Not sure how it happened, but the elite or the elite someone must have misplaced our invite. I even had the plane fueled up and ready to go…damn…
A Deadly-Serious Longwave Economics Note
I have been telling you for how long (since 1999…) that one of the reasons for the economy blowing up worldwide is that people are living longer and that as ages increase, the burden on government goes up and that means more deficits and yada, yada….
OK, so check this out: The head of AIG (remember them, you bailed them out, right?) is now saying that the retirement age will have to go up to 70 or 80 to pay for the global financial mess.
Couple of points: I don’t believe in “too big to fail” since that’s a lie. Money has a kind of Newtonian laws that most people don’t get. You know how under Newton, for every force there is an equal and opposite reaction? It works that way in finance too: For every colossal f/u there is a financial rape victim. What the monied class does is looks for the victim which will be most quiet! This looks like a distracted group (workers, 30-50) so let’s nail them!
In free market capitalism, businesses fail. It is patently two-faced of the “free traders” to want their cake (free trade) and eat it too (except when they need a bailout for their own screw-ups).
But this most important part of this story is in what’s not being said: This is YOU being put on notice by the bankster-class that because of their bailouts YOU (if you’re under 50 or so) are gong to have the finishing line of life moved out several years from age 66. Is it going into YOUR pocket? No. Social Security was raided long ago…this is the equal and opposite to the bailouts – put it to people who won’t notice what we did…
What is NOT BEING TOLD (truth really pisses people off) is that this will mean higher structural unemployment since we don’t have enough jobs to go around as is. Another example of equal and opposite in finance. And even fewer in the future due to what? Automation and computers added to the new art of metal printing! That’s what the free-traders want, you see?
Which is why a war or some other nasty series of events to cause massive destruction (and the increased economic activity from resultant recovery efforts that would follow) is so vitally necessary now to the PTB.
Or, if not that, a global devaluation of 50-80% to “reset” the economy. Once again, however the equal and opposite is that would constitute the largest financial crime in world history….which has to make that so damn appealing.
I suggest you read this as a grab the Vaseline and do an ankle check for the next generation. If you didn’t get that, you’re not paying attention.
The next part of the crooked sales pitch to look for? Oh, since you’re going to live longer, you will be able to pay off those student loans after all! And still have a shelf life of 40-years as a “free consumer” of useless products since you won’t be put out to pasture at age 80 or beyond.
Fun stuff, huh? Beat ‘em some more so it will feel even better when we quit, kinda thinking.
To put it in more polite demographic terms: the issue for the bankster class is “Which cohort can we screw next?” 30-50s? You’re it!
[I will sell you one of my "No Incumbents! No Bailouts!” stickers, though if it will make you feel better, but since corporate interests own Washington, don’t be holding your breath looking for substantive change…just more of Ure’s law of financial motion. Repeat after me: “Everything is a business model” and “For every bailout there will be a screwee…”
One more Ure axiom of financial motion laws? Sure: “Body’s at rest remain broke.”
More after this…