no third solution

Blogging about liberty, anarchy, economics and politics

The Recession is Officially Over

September 21st, 2010

Yesterday when I got home from work I flipped on the TV and heard one of the talking heads say that the recession is officially over.  And not only is it over, it’s been over, for over a year.  They said that the official end of the recession was June, 2009. Lolwut?

A catastrophic implosion of a magnitude never-before-seen, is over and nobody noticed it except the bow-ties at NBER after they had a year and a half to study, clean, analyze and massage the data?  Yeah, right (and monkeys might fly out my butt).

But look, it’s right there on the graph!

NBER-recession-overPretty sure I dropped an f-bomb or two.

What happened was that the fraudulent system persuaded or blackmailed the government in to bailing them out on the backs of the working class by theft and extortion writ large.  And guess what? The working class is still working, they’re still poor, they’re still living paycheck to paycheck, and most of them are struggling to regain whatever sense of security they might’ve held before the economy went belly-up.

If you want to pick nits and say, “Well the NBER defines a recession’s end as the low point”, I’m not going to get in to a semantic pissing match with you. The fact of the matter is that for most people, this hardly registers as an end to the recession because for most people things haven’t gotten better, they aren’t about to get better any time soon, and it will take years to get back to wherever they were prior to the implosion.

Many forecasters estimate that output needs to grow over the long run by about 2.5 percent to keep the unemployment rate, now at 9.6 percent, constant…

…The broadest measure of unemployment, including people who are reluctantly working part time when they wish to be working full time and those who have given up looking for work altogether, also was at its highest level since World War II. [NYT]

I don’t know how you interpret that, but 10-percent unemployment rate (one that is considerably higher if you account for underemployment) hardly strikes me as an end to a recession. As long as 1 in 10 people looking for work to pay their bills are unable to find work, something is terribly wrong. Until the economy has in-fact “recovered” it’s still a goddamned recession in my book.

To put this all in proper context, we need to juxtapose the fact that 1 in 10 people are unemployed and probably 1 in 5 people are underemployed, with the slave-like systematic dependence on Wall Street, NBER and their respective oracles (who throughout the years have done absolutely nothing but engineer the sort of monetary collapse we recently lived through).

This is the paradox of modern capitalism: masses of people are out of work, fighting to keep their homes if they haven’t already lost them, starving, dropping much-needed expenses like insurance policies, or prescription medications, etc., in order to stay financially afloat…

All of these people still need food, shelter, warmth, leisure, whatever. Everyone still wants goods and services; everyone still wants stuff, and those needs can only be satisfied by production, which requires people [doing work and getting paid for that work]. [link]

It is this way because they want it this way.They want it this way because this is how they maintain control: convince the masses that they can’t take care of their own, convince them that they can’t survive, convince them that they need the government or the multinational corporations of the world to “provide” them with “jobs” and paychecks, convince them that there are powers at work which are infinitely beyond their comprehension.  And every once in a while you stir up some shit, or fail to take the appropriate preventative measures, or maybe go a little (or a lot) overboard.  For a few years everything goes sideways and upside-down.

But it’s enough to remind those working idiots that they aren’t in control, there are things they don’t understand or can’t comprehend, and reinforces the illusion that they do need the parasites.

They don’t.  But until they — we — can wake up and shake the cobwebs out of our collective brains, and systematically withdraw support for such an abomination, it’s going to continue.

This concludes today’s lesson in futility.

401(k) – Holding the Bag

October 10th, 2008

The stock market decline continues today. This is a ridiculous sell-off. AIG is rapidly drawing down their “loan”, General Motors’ market-cap is less than what it was in 1929.

I would like to purchase physical gold and/or silver. Ideally, I would like to swap my 401(k) holdings for gold and/or silver. Unfortunately, I can’t touch the 401(k) until I retire, unless a hurricane hits my house or I lose a limb and become permanently disabled.

So, for the time being, I can either put money in to my 401(k) , and watch it fucking evaporate overnight, (I have lost 41% of FY2008’s contributions) or I can forgo the 401(k) contributions and watch the money fucking evaporate on a bi-weekly basis through taxes. My Net is approximately the same, regardless of whether I contribute to the 401(k).

Many people are probably watching substantially more paper money evaporate in their retirement accounts. I’m young enough that, according to conventional wisdom, I should be alright. But if I were 45, and had lost 20% or 30% of my retirement savings in a few short months, I’m not sure what I’d be doing. Most people are, to some extent, captive in this sort of situation. Almost everyone with a salaried job, and many people with an hourly job, have been convinced over the last few decades, that channeling money from their paycheck, into the stock markets, is a great idea.

Without passing judgment on that advice, it certainly doesn’t appear to be a great idea right now.

‘Smart People Are Realizing the Banking System is Broken’

October 9th, 2008

DJIA down something like 700 points, that’s the lowest it’s been in over 5 years. Looking at the chart, it’s a veritable cliff at about 3:30pm. General Motors trading at levels not seen since the 1950s. Their dividend yield is 13% and nobody is buying. This kind of gives you the impression that nobody believes there will be a dividend!

So much for that surprise 50bp rate cut yesterday…


I hope the FED plans on buying a lot of commercial paper, hell, let’s just nationalize the entire goddamned economy, while we’re at it.

The Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, the White House said on Thursday.

NYT also reports that this is happening even though it is at odds with President Bush’s “free-market” philosophy.

There is no free market philosophy in the current administration, nor is there a free market philosophy in any administration which seeks to impose systematic, top-down controls on the entire economy. A free market abhors the idea of nationalizing industry, of bailing out lenders, too big to fail. The free market did not cause the current economic Vesuvius, because the U.S. economy is not a free market.

There is no shortage of ideas, ranging from the partial nationalization proposal to a guarantee by the Fed of all lending between banks.

Translation: there is no shortage of ideas, ranging from bad, to worse.

Like, further inflationinjecting more liquidity into a broken economic system, or nationalizing more banks. Oh well, as the saying goes, when the only tool you have at your disposal is a hammer, sooner or later, everything starts to look like a nail.

But neither the individual corporate bailouts nor the Fed’s enormous emergency lending programs — including up to $900 billion through its Term Auction Facility for banks — have succeeded in jump-starting the credit markets.

‘The core problem is that the smart people are realizing that the banking system is broken,’ said Carl B. Weinberg, chief economist at High Frequency Economics. ‘Nobody knows who is holding the tainted assets, how much they have and how it affects their balance sheets. So nobody is willing to believe that anybody else isn’t insolvent, until it’s proven otherwise.’

That’s right. A TRILLION DOLLARS has not been enough to assuage people’s fears. Nobody wants to be holding toxic assets, at any price.

The more money the Government prints into the economy, the more distorted become the price signals, and the more impossible it becomes for people to accurately assay the values of anything. This isn’t quite Econ 101, but it’s not Ph.D. Thesis material, either.

Meanwhile, the price of gold is soaring – not because it’s becoming more valuable, but rather, because the currencies against which it trades are becoming all the more apparently less valuable. The chart of gold essentially is the inverse of the DJIA chart, at top…


no third solution

Blogging about liberty, anarchy, economics and politics