EU YOUTH UNEMPLOYMENT - Signs of Social Unrest Ahead

Racing To The Revolution: Spain Vs Greek Youth Unemployment 01-24-13 Zero Hedge

Spanish and Greek youth unemployment surged to yet another new record as joblessness among the under-25 cohort is now above 55% for both of these troubled nations. "We haven't seen the bottom yet," one analyst notes as the BBC notes that the youth unemployment in these nations is more than double the euro-area average. As we have noted many times, this ludicrous state of affairs (in nations that proclaim the worst is past) is by far the most-concerning for European stability. Even Frau Merkel opined this morning in Davos that:

• *MERKEL SAYS EU YOUTH UNEMPLOYMENT BIGGEST BURDEN, NEEDS TACKLED

Yet, there is nothing being done. Across the 27-nation bloc, there are 5.8 million people aged under-25 that remain long-term unemployed. This has always and forever led to extreme events and social unrest, as we warned here (must read). As the year warms up, which nation will 'spring' first?

CONFIDENCE - Gallup Poll Lowest In 30 Years

Gallup Poll: Americans Most Negative On the Nation And Economy In 30 Years 01-24-13 Michael Krieger of Liberty Blitzkrieg blog via ZH

I guess Americans just haven’t heard of a little something called the stock market.  Isn’t that right Bernanke?  Wasn’t the stock market rally you engineered supposed to make everyone feel all nice and confident?  Well the great middle class squeeze continues, as the stock market is for the 1% what food stamps are for the poor.  They are just strategies to keep these groups apathetic and obedient.  The middle class isn’t buying it though, as is evidenced by this recent Gallup Poll conducted January 7-10, 2013.

From Gallup:

PRINCETON, NJ — U.S. President Barack Obama begins his second term at a time when Americans are as negative about the state of the country and its prospects going forward as they have been in more than three decades. Fewer than four in 10 Americans (39%) rate the current status of the U.S. at the positive end of a zero to 10 scale. This is about the same as in 2010, but it is fewer than have said so at any point since 1979. As they usually are, Americans are more upbeat in their predictions of where the U.S. will be in five years (48% positive), but this is also lower than at any time since 1979.

The 39% of Americans who give a six to 10 rating when asked to evaluate the nation’s current status is similar to the 37% who said the same three years ago. Prior to that, however, assessments were generally more positive, including a 73% six to 10 rating in January 2001 — the highest on record. The three previous points in time when ratings were as low as or lower than the 2013 rating were in August 1979 (34%), April 1974 (33%), and January 1971 (39%). The 1979 measure came at a time when the economy was in bad shape and inflation was rampant, while the 1974 measure came in the midst of the Watergate scandal. When Gallup first asked the question in August 1959, 68% of Americans rated the state of the nation in the six to 10 range.

What about the future?

The 48% who give a six to 10 ranking when asked to project the status of the U.S. five years from now is tied with the 1979 measure as the lowest in Gallup’s history of asking the question. Additionally, the 40% who give a negative rating (zero to four) when asked to look ahead is lower than at any point in history. These negative ratings include 10% who say the situation of the country in five years will be zero, the worst they can imagine.

Not so much.  Don’t worry Bernanke, I’m sure another 50 S&P handles will make everything better.

Full Gallup article here.

ANALYTICS - Market Following Cnetral Bank Driven Seasonal Cycle

We have noted the odd cyclicality in macro data (and its leading effect on the market) and it seems Goldman Sachs has also noticed that something is different this time. For 15 years, the seasonal patterns in Goldman's macro index have been mild to totally negligible; but since 2009, something changed. As the chart below indicates, it really is different this time as the macro cycle has become extremely short and consistent (drop in H1, rise in H2) - and is evident not just top-down but bottom-up in payrolls and ISM for instance. Goldman expounds pages of statistical jiggery-pokery to show what we suspected - that this is not weather or seasonality effects, and is not just US (UK and Europe see same pattern of six month cycles); but appears driven by central-bank policy actions (which have been more concentrated in Q4/Q1). 2013 is playing out exactly as the last three years has - with a downdraft that is set to continue for the next few months - though they note that stability in oil prices this time (and recent expansion of easing efforts - Fed and BoJ) may shift the pattern. For now, it appears the macro cycle is becoming shorter and warrants concern as they are unable to find anything but 'reality' as a driver of this odd cyclical pattern as the real economy fades rapidly after each and every infusion of promises from the Central Banks.

US Macro data is following the same downward path as we have seen for the last three years...

each year Q4/Q1 is dominated by fiscal or monetary policy actions to recover from the exposed reality of the underlying economy...

Will this time be any different? Well, we noted the lead-lag relationship here before, and as stocks test new highs with macro data plumbing new depths, we can only imagine which better reflects reality for now.

As Goldman concludes:

Given that we are now in the part of the year that has typically presaged macro weakness, we will be paying close attention to developments in fundamental factors: policy, financial conditions, oil prices, and shocks from the rest of the world and the Euro area.

Put simply, each year central banks lift their foot modestly to see just what is going on in the real world, and each year the reality is not good - which then pushes them back into action; the question is (with BoJ not going open-ended until 2014, OMT off the table for Spain for now, and Fed QE4EVA 90% priced in) when will the central banks come back and with what...

Charts: Goldman Sachs

FED BALANCE SHEET - Tops $3 Trillion - $4 Trillion In 11 Months

Fed's Balance Sheet Tops $3 Trillion, But... 01-24-13 Zero Hedge

... that's not true. The Fed's balance sheet, from a transaction basis, topped $3 trillion some 5-6 weeks ago. The only reason the Fed reported a $3 trillion number in today's H.4.1, or $3.013,333 trillion to be precise, is because all those MBS purchased in September and October following the September 13 reactivation of QE4EVA finally settled. In reality, the Fed's balance sheet is now some $3.12 trillion as there is about a $80-$120 billion lag between what the Fed has actually purchased, and what has settled. Luckily, at least Treasury purchases take far less to settle.

None of the above should come as a surprise to anyone: the Fed's balance sheet has been, even purely nominally, at $2.8/2.9 trillion for months. Wake us up when the Fed's balance sheet is $4 trillion, in precisely 11 months.

CIVIC RESPONSIBILITY - Decay Accelerates

EXCERPTED FROM: Apparitions in the Fog 01-23-13Washington's Blog - Jim Quinn

Civic Decay Accelerates

“History offers no guarantees. If America plunges into an era of depression or violence which by then has not lifted, we will likely look back on the 1990s as the decade when we valued all the wrong things and made all the wrong choices.” – Strauss & Howe - The Fourth Turning

The liberal minded Op-Ed writers that decry the incivility of dialogue today once again show their ignorance for or contempt for American history. They call for compromise and coming together. They should see Spielberg’s Lincoln to understand the uncompromising nature of Fourth Turnings and how conflicts are resolved. They should watch documentary film of Dresden, Hiroshima, and Guadalcanal during World War II. Compromise and civility do not compute during a Fourth Turning. It is compromise that has brought us to this point. Avoiding tough decisions and delaying action occur during the Unraveling. We’ve known the entitlement issues confronting our nation for over a decade and chose to do nothing. The time for delay and inaction is long gone. The pressing issues of the day will be resolved through collapse, confrontation and bloodshed. It’s the way it has always been done and the way it shall be. The current conflict over banning guns is just a symptom of a bigger disease. Government, at the behest of the owners, has been steadily assuming more power and control over the everyday lives of citizens who just want to be left to live their lives. Government has used propaganda, fear and misinformation to convince large swaths of the populace to voluntarily sacrifice their freedom and liberty for the promise of safety and security. Warrantless surveillance, imprisonment without charges, molestation by TSA agents, military exercises in cities, drones in our skies, cameras watching our every move, overseas torture, undeclared wars, cyber-attacks on sovereign countries, and now the threat of disarmament of the people have all contributed to the darkening skies above. A harsh winter lies ahead.

Civic decay is being driven by two main thrusts.

• Lack of jobs and
• destruction of middle class wealth

.. by the oligarchs is resulting in the anger and dismay overwhelming the country. The chart below reveals the truth about our economy and the fraudulent nature of BLS reported data, skewed to paint a false picture. The 25 to 54 year old age bracket captures Americans in their peak earnings years. In 2007 this age bracket had 83% of its members in the labor force and 100.5 million of them employed. Today, according to the BLS, only 81.4% are in the labor force and there are 6.3 million less employed. The BLS has the gall to report that since 2009, even though the number of employed people in this age bracket has declined by 1 million, the number of unemployed people has dropped by 1.5 million people. To report this drivel is beyond laughable. The horrific labor market situation is confirmed by the fact that despite a 3.6 million person increase in this age demographic since 2000, there are 7.8 million more people not employed.

The reduced earnings and savings of the people in this demographic is having profound and long-lasting impact on our society. Household formation, retirement savings, tax revenues, and self-worth are all negatively impacted. The mood of desperation and anger is materializing in this age bracket. The resentment of these people when they see the well-heeled Wall Street set reaping stock market gains and bonuses while they make do on food stamps, extended unemployment and the charity of friends and family is palpable. More than 100% of the employment gains since 2010 have gone to those over the age of 55, further embittering the 25 to 54 workers.

There is boiling anger beneath the thin veneer of civility between Millenials, GenXers, and Boomers.

The chasm between the ultra-rich and the masses widens by the day and is leading to a seething animosity. The country has lost 2.4 million construction jobs and 2 million manufacturing jobs since 2007, but we’ve added 250,000 fry cook jobs and 440,000 University of Phoenix jobs stimulated by $500 billion in student loans. The complete transformation of a producing society to a consumption society has been accomplished.

When the average person sees Wall Street bankers not only walk away unscathed from the crisis they aided, abetted and created through their fraudulent inducements and documentation, but be further enriched at taxpayer expense, their hatred and disgust with high financers like Corzine, Dimon and Blankfein burns white hot. The mainstream media propaganda machine tries to convince the average Joe that stock market highs and record corporate profits are beneficial to him, even though the gains and profits have been spurred by zero interest rates, fraudulent accounting and outsourcing their jobs to third world slave labor factories.

• A critical thinking human being (this rules out 95% of the adult population) might question how corporate profits could surpass pre-collapse levels when the economy has remained stagnant.

Shockingly, the entire profit surge was driven by Wall Street. Accounting entries relieving billions of loan loss reserves, earning hundreds of millions in risk free interest courtesy of Bernanke, and falsely valuing your loan portfolio can do wonders for profits.

• We’ve added 6.9 million finance jobs in the last 20 years as this industry has sucked the lifeblood out of our nation.
• A country that allows bankers to syphon off 35% of all the profits in the country without producing any benefits to society is destined to fail, with the dire consequences that follow.

My civic decay expectations for 2013 are as follows:

• Progressive’s attempt to distract the masses from our worsening economic situation with their assault on the 2nd Amendment will fail. Congress will pass no new restrictions on gun ownership and 2013 will see the highest level of gun sales in history.
• The deepening recession, higher taxes on small businesses and middle class, along with Obamacare mandates will lead to rising unemployment and rising anger with the failed economic policies of the last four years. Protests and rallies will begin to burgeon.
• The number of people on food stamps will reach 50 million and the number of people on SSDI will reach 11 million. Jamie Dimon, Lloyd Blankfein, and Jeff Immelt will compensate themselves to the tune of $100 million. CNBC will proclaim an economic recovery based on these facts.
• The drought will continue in 2013 resulting in higher food prices, ethanol prices, and shipping costs, as transporting goods on the Mississippi River will become further restricted. The misery index for the average American family will reach new highs.
• There will be assassination attempts on political and business leaders as retribution for their actions during and after the financial crisis.
• The revelation of more fraud in the financial sector will result in an outcry from the public for justice. Prosecutions will be pursued by State’s attorney generals, as Holder has been captured by Wall Street.
• The deepening pension crisis in the states will lead to more state worker layoffs and more confrontation between governors attempting to balance budgets and government worker unions. There will be more municipal bankruptcies.
• The gun issue will further enflame talk of state secession. The red state/blue state divide will grow ever wider. The MSM will aggravate the divisions with vitriolic propaganda.
• The government will accelerate their surveillance efforts and renew their attempt to monitor, control, and censor the internet. This will result in increased cyber-attacks on government and corporate computer networks in retaliation.

“The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place we are entering a period of consequences…” – Winston Churchill

RATING AGENCY MUZZLING - Egan-Jones- The Only One that You Could Count On

SEC Bars Egan-Jones From Rating The US And Other Governments For 18 Months 01-22-13 SEC via ZH

From the SEC: "EJR and Egan made a settlement offer that the Commission determined to accept. Under the settlement, EJR and Egan agreed to be barred for at least 18 months from rating asset-backed and government securities issuers as an NRSRO. EJR and Egan also agreed to correct the deficiencies found by SEC examiners in 2012, and submit a report – signed by Egan under penalty of perjury — detailing steps the firm has taken." Hopefully the world is no longer insolvent in July of 2014 when this ban runs out.

From the SEC:

Egan-Jones and Founder Sean Egan Agree to 18-Month Bars from Rating Asset-Backed and Government Securities Issuers as NRSRO

The Securities and Exchange Commission today announced that Egan-Jones Ratings Company (EJR) and its president Sean Egan have agreed to settle charges that they made willful and material misstatements and omissions when registering with the SEC to become a Nationally Recognized Statistical Rating Organization (NRSRO) for asset-backed securities and government securities.

EJR and Egan consented to an SEC order that found EJR falsely stated in its registration application that the firm had been rating issuers of asset-backed and government securities since 1995 — when in truth the firm had not issued such ratings prior to filing its application. The SEC’s order also found that EJR violated conflict-of-interest provisions, and that Egan caused EJR's violations.

EJR and Egan made a settlement offer that the Commission determined to accept. Under the settlement, EJR and Egan agreed to be barred for at least 18 months from rating asset-backed and government securities issuers as an NRSRO. EJR and Egan also agreed to correct the deficiencies found by SEC examiners in 2012, and submit a report – signed by Egan under penalty of perjury — detailing steps the firm has taken.

“Accuracy and transparency in the registration process are essential to the Commission’s oversight of credit rating agencies,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “EJR and Egan’s misrepresentation of the firm’s actual experience rating issuers of asset-backed and government securities is a serious violation that undercuts the integrity of the SEC’s NRSRO registration process.”

Antonia Chion, Associate Director of the SEC’s Division of Enforcement, added, “Provisions requiring NRSROs to retain certain records and address conflicts of interest are central to the SEC’s oversight of credit rating agencies. EJR’s violations of these provisions were significant and recurring.”

Egan and his firm were charged last year for falsely stating on EJR’s July 2008 application to the SEC that it had 150 outstanding asset-backed securities (ABS) issuer ratings and 50 outstanding government issuer ratings, and had been issuing credit ratings in these categories on a continuous basis since 1995. Egan signed and certified the application as accurate. According to the SEC’s order, EJR had not issued any ABS or government issuer ratings that were made available through the Internet or any other readily accessible means. Therefore, EJR did not meet the requirements for registration as a NRSRO in these classes. The Commission found that EJR continued to make material misrepresentations about its experience in subsequent annual certifications. EJR also made other misstatements in submissions to the SEC, and violated recordkeeping and conflict-of-interest provisions governing NRSROs — which are intended to safeguard the integrity of credit ratings.

EJR and Egan agreed to certain undertakings in the SEC’s order, including that they must conduct a comprehensive self-review and implement policies, procedures, practices, and internal controls that correct issues identified in the SEC’s order and in the 2012 examination of EJR conducted by the SEC’s Office of Credit Ratings. EJR and Egan consented to the entry of the order without admitting or denying the findings. The order requires them to cease and desist from committing or causing future violations.

The SEC’s investigation was conducted by Stacy Bogert, Pamela Nolan, Alec Koch, and Yuri Zelinsky. The SEC’s litigation was led by James Kidney with assistance from Alfred Day and Ms. Nolan. The related examinations of EJR were conducted by staff from the SEC’s Office of Credit Ratings, Office of Compliance Inspections and Examinations, and Division of Trading and Markets. Examiners included Michele Wilham, Jon Hertzke, Mark Donohue, Kristin Costello, Scott Davey, Alan Dunetz, Nicole Billick, David Nicolardi, Natasha Kaden, and Abe Losice.

And to think of all the actions the SEC took against S&P, Moodys and Fitch for rating AAA-rated suprime junk weeks before the market imploded. Oh wait, the SEC did nothing there, because, you see, they filed their NRSRO applications without any glitches.

So be careful S&P: you are on thin ice here with your 2011 downgrade of the US, and likely next in the SEC's sights: better go through all those registration applications and make sure every comma is in place.

Now we look forward to news that Moodys and Fitch are about to get the Congressional medal of honor.

CHINA - China's Restoration

In case it was not clear where all the jobs went (if not swallowed up by productivity enhancing robots) - the following chart should make things clear (over 200 years of manufacturing shifts around the world)...

JAPAN - Full Out War on Deflation

Revolutionary Japan is suddenly the centre of world affairs 01-20-13 Telegraph Ambrose Evans-Pritchard

....

JAPAN - First Test of the new found “dominance” of the Central Banks

The Monetary Authorities Have Complete Control Of The Markets 01-15-13 Bruce Krasting, My Take On Financial Events

CHRONIC UNEMPLOYMENT - 67 Million Jobs Gab

Global Unemployment Expected To Surpass 200 Million 01-22-13

"macro imbalances have been passed on to the labor market to a significant degree"

28 Million Jobs Lost

39 Million "Discouraged" Drop Outs

= 67 Million Jobs Gap

After dropping for the past two years, global unemployment is on the rise again according to the International Labor Organization, a UN jobs watchdog. 2013 is expected to top 200 million unemployed for the first time with the epicenter in the advanced economies as 28 million jobs have been lost since the onset of the crisis. Critically, for the globalists, they unsurprisingly note that macro imbalances have been passed on to the labor market to a significant degree.

Weakened by faltering aggregate demand, the labor market has been further hit by fiscal austerity programs in a number of countries, which often involved direct cutbacks in employment and wages, directly impacting labor markets. Far from the anti-cyclical response to the initial crisis in 2009 and 2010, the policy reaction has been pro-cyclical in many cases in 2011 and 2012.

Moreover, some 39 million 'discouraged' people have dropped out of the labor market as job prospects proved unattainable, opening a 67 million global jobs gap since 2007. However, regions that have managed to prevent a further increase in unemployment have experienced a worsening in job quality, as vulnerable employment and the number of workers living below or very near the poverty line increased. "These are people who,... have given up hope, ...and therefore they are not counted as unemployed but more as discouraged."

Global unemployment is on the rise once again - after two years of falling... and is expected to rise for the next two years at least...

UNCERTAINTY

One of the main drivers appears to be 'uncertainty'...

Many developed economies have seen a sharp rise in the unemployment rate mainly as a result of lengthening unemployment duration and rising long-term unemployment

But between 2007 and 2012, the biggest overall contributor to the decline in global employed-to-population ratio was a decline in labor force participation rates...

A modest silver lining perhaps is that there are signs of an emerging consumer working class in developing countries, potentially substituting for some of the consumption slowdown in advanced economies. With the crisis, however, progress in poverty reduction has slowed and could adversely affect growth of the emerging middle class. This will impact negatively on the capacity for developing economies to play a stronger role in supporting global economic activity and offer alternative engines of growth.

But of course, it is the youth unemployment that is most worrisome. So far, only Austria, Germany and Switzerland have managed to keep youth unemployment low. Some young people have started to return to or prolong education, to acquire new skills in order to improve their future labor market chances; others have dropped out completely or are increasingly frustrated in their job search without, nevertheless, returning to the education system.

This group of young people that is neither in employment, education nor training (NEET) has grown since the crisis, in particular among European crisis countries, and is expected to increase further as recessionary conditions continue to prevail in the Euro area.

Full report below: World Jobs Report by

CURRENCY WARS - "Rebalancing Needed to Avoid Currency Wars"

When it was announced in late November that Goldman's Mark Carney would become head of the BOE (a "shocking" move only Zero Hedge predicted), we said that one has to be insane to be buying the GBP at those levels. Sure enough, it took just two short months before the implications of yet another Goldmanite's pro-inflationary policies would become apparent. To wit:

• KING SAYS BOE IS READY TO PROVIDE MORE STIMULUS IF NEEDED
• KING SAYS QE WAS CRUCIAL IN AVOIDING U.K. DEPRESSION
• KING SAYS U.K. BANKS SOME WAY FROM CONVINCING MARKETS ON SAFETY
• KING SAYS POUND DROP WAS NEEDED FOR U.K. REBALANCING
• KING: U.K. 4Q GDP ALMOST CERTAINLY CONSIDERABLY WEAKER THAN 3Q

And the punchline:

• KING SAYS REBALANCING NEEDED TO AVOID CURRENCY WARS

In other words, please welcome the UK to the global currency wars.

Germany Vs Japan Currency War Heats Up 01-22-13 ZH

GLOBAL GDP - Growth Trending Down by Region and Cummulatively

Declining Global Growth 01-20-13 John Aziz of Azizonomics blog via ZH

In an increasingly globalised economy, we need more global data measurement.

The Economist presents a new attempt to measure global GDP. The sub-bars are showing each region’s contribution to global GDP growth, rather than their internal growth rate:

Globally, there was a big and swift return to strong GDP growth, built on the backs of emerging countries and particularly the BRICs. Since early 2010, rather than getting stronger and stronger, global growth has actually become weaker and weaker.

This is quite a departure from certain narratives popular today that suggest that growth has gotten stronger and stronger since the end of the recession, that we are almost out of the woods, and that we are on the cusp of a new era of spectacular growth.

And in a world of globalised trade, globalised lending, and global supply chains the notion that any nation can really be shielded from the ongoing effects of declining global growth seems extremely over-optimistic.

Yet another reason to be highly cautious of the increasingly popular idea that now is the time to turn bullish on American equities. 

MERCANTILISM - China the Clear Winner Globally, Germany Regionally

Winning The Global Export Race 01-18-13 WHO via ZH

It is no secret to anyone that as we said some 3 years ago, the world is now engaged in all out currency warfare whose sole goal is destroying one's own currency faster and more brutally than "the other guy" can. Because while devaluing one's currency is imperative in order to return to a viable debt load, about $40 trillion less than where it is now (as per BCG) by pushing monetary inflation upon one's people and inflating said debt away, just as important is to stimulate one's economy and exports which, all else equal, can only be done by making them cheaper to one's trading partners. It is, after all, a zero sum world.

This is precisely the tug of war that the developed world is caught in currently, where every attempt is made to talk down one's currency, and when that fails, to dilute it by printing more of it (the Fed), to backstop it with collateral of every lower quality (the ECB, although in Europe's case it is more of an involuntary phenomenon), or just to talk, and talk, ant talk (Japan).

Yet while every country with a self-respecting central bank (i.e., currency printer) hopes that they will be the ultimate winner of the currency debasement export race, what has become obvious over the past 30 years, is that when it comes to specializing in exports, there is just one true winner: a winner which is self-evident from the chart below.

So the question becomes: while everyone is scrambling for the peanuts and breadcrumbs of marginal exports while injecting trillions, then quadrillions, then quintillions and so on, to make their exports "attractive", is China merely sitting on the sidelines and smiling, knowing well that when it comes to Ricardian dynamics, there is nobody who can ever catch up or slow down its momentum, benefiting from a (still) cheap labor force that is second to none, and an unprecedented work ethic (the lack of a social safety net does miracles for motivation), even if every country destroys their economy in the process of trying to catch up?

Of course, when every other country's economy implodes, that means the traditional Chinese export partners will no longer exist, and the country will finally have no choice but ending its mercantilist ways, and actually focusing on internal growth. But China, like the US in so many other things, will only cross that particular bridge when it has no other choice.

DEBT CEILING - The Visible and Hidden Strategies at Work

House Votes to Temporarily Suspend U.S. Debt Ceiling 01-23-13 Bloomberg

The measurewould allow the nation’s borrowing authority to automatically rise May 19 to accommodate the amount the U.S. Treasury borrowed during the three months that the limit is suspended.

The U.S. House voted to temporarily suspend the nation’s borrowing limit, removing the debtceiling for now as a tool for seeking deeper spending cuts.

The measure, passed 285-144, lifts the government’s $16.4 trillion borrowing limit until May 19. It goes to the Senate, where Majority Leader Harry Reid said lawmakers will pass the bill unchanged and send it to President Barack Obama.

“The premise here is pretty simple; it says that there should be no long-term increase in the debt limit until there’s a long-term plan to deal with the fiscal crisis that faces our country,” House Speaker John Boehner, an Ohio Republican, said during floor debate. “This is the first step in an effort to bring real fiscal responsibility to Washington.”

The revised strategy eliminates the risk that House Republicans would be blamed for a default in the short term. Republicans plan to focus on other fiscal deadlines and say they aren’t giving up their fight for cuts to federal programs.

Stocks rose, with the Standard & Poor’s 500 Index (SPX)surging to its highest level since 2007. The S&P 500 gained 0.15 percent to 1,494.81 at 4:35 p.m. in New York. It rose 4.8 percent in January through today for the best start to a year since 1997. The Dow Jones Industrial Average (INDU) rose 67.12 points, or 0.49 percent, to 13,779.33.

Two Deadlines

Republicans plan to use two other approaching deadlines -- the March 1 start of automatic spending cuts and the need to pass a bill by the end of March to fund the government -- to extract spending reductions from Obama and congressional Democrats.

The measure passed today, H.R. 325, would allow the nation’s borrowing authority to automatically rise May 19 to accommodate the amount the U.S. Treasury borrowed during the three months that the limit is suspended.

“The president believes that we need to, as a country, do the responsible thing and without drama or delay pay our bills,” White House press secretary Jay Carney said after the debt bill passed the House. “Ideally we would extend or raise the debt ceiling for a long period of time.”

Carney said the vote “represents a fundamental change” in the House Republicans’ strategy.

Reid said the Senate will act soon. “To spare the middle class another knock-down, drag-out fight, the Senate will proceed to and seek to pass the House bill,” he said in a statement. Second-ranking Democrat Richard Durbin of Illinois said the Senate probably won’t vote before next week.

House members voting for the bill included 199 Republicans and 86 Democrats, while 33 Republicans and 111 Democrats voted against it.

The House debt-ceiling plan is accompanied by a prod to lawmakers on the budget. It says the House and the Senate each must adopt a budget resolution for the next fiscal year by April 15. If not, the pay for members of the chamber that doesn’t act will be withheld and placed in an escrow account until they adopt one -- or, at the latest, until the end of the 113th Congress.

Reid said the Senate plans to pass a budget this year.

Boehner told reporters that if each chamber passes a budget, “now you’ve got competing visions” for federal spending.

“Out of those competing visions we’re going to find some common ground, I’m hopeful, that puts us on a path to balance the budget over the next 10 years,” Boehner said.

Representative Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, said in an interview that to achieve that goal House Republicans will “try and balance the budget on the backs of seniors and kids” with cuts in Medicare benefits and aid to education.

The debt limit has been raised periodically since its creation in 1917, with Congress increasing or revising it 79 times, including 49 times under Republican presidents, since 1960.

Enactment of the legislation could allow the Treasury to continue borrowing for several months and delay the need for a longer-term increase in the debt ceiling until late summer.

Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey, told Bloomberg BNA in an e-mail that “our very tentative estimates suggest” that the Treasury might not need another increase until August. Analysts at New York- based RBC Capital Markets LLC concurred, telling clients in a daily research note that “under this deal the drop-dead date might slide until August.”

The Treasury Department had said it expected to run out of emergency measures to prevent a breach of the current debt limit between mid-February and early March.

Investors in U.S. Treasury bonds, who most directly bear the risk of a government default, haven’t shown alarm. The 10- year yield fell two basis points, or 0.02 percentage point, to 1.83 percent at 4:59 p.m. in New York today, according to Bloomberg Bond Trader prices.

A debt-limit suspension would clear the way for House Republicans to focus on the debate to replace about $1.2 trillion in automatic spending cuts, half of which would come from defense. Congress delayed the start date of the automatic cuts to March 1.

Republicans are prepared to let the automatic cuts go forward even if Democrats don’t agree to restructure them to fall less heavily on defense, Representative Tom Cole, an Oklahoma Republican, said in an interview yesterday.

After dealing with the automatic cuts, the House plans to take up its budget resolution and then turn to a bill to fund the government through Sept. 30, according to Representative John Fleming, a Louisiana Republican. The government is being funded through a stopgap measure that expires March 27.

House Budget Committee Chairman Paul Ryan of Wisconsin said earlier today that Republicans want to force “a big down payment on the debt crisis” during the debate on spending cuts and extending the government’s borrowing authority.

“We have to set our expectations accordingly” and advocate Republicans’ goals “in a realistic way,” Ryan, the Republican vice presidential nominee last year, said at a breakfast sponsored by the Wall Street Journal.

$7.66 Trillion Of Stimulus In America From 2008 To 2012, Itemized 01-21-13 BI

STATISM - How You Orchestrate the Remove of the Second Ammendment

Every night I watch drug ad after drug ad on TV. I don't ever recall seeing a gun ad on TV? Are they banned?

So, who do the media have allegiance to and therefore how will the news be spun? To simply report the following facts would cause the networks significant negative pressures from their paying customers. You don't bite the hand that feeds you.

The network lawyers would likely strongly advise this not to be reported becuase they would likely be sued by the drug companies for various legal reasons. So even if the networks wanted to reprot this they would drop it. This is why so many journalists quit.

THE POLITICAL SOLUTION TO THE ABOVE IS TO BAN GUNS?

• SEEN TO BE DOING SOMETHING
• MAJOR PHARMACEUTICAL CAMPAIGN CONTRIBUTIONS ARE NOT IMPACTED
• MEDIA SUPPORT IS NOT JEPORDIZED
• PUBLIC SUPPORT IS ON YOUR SIDE ('BAND WAGON APPEAL)
• ALLOWS THE ADVANCEMENT OF A POLICE STATE FOR PUBLIC SECURITY

Further Reading: Prominent rifle manufacturer killed in mysterious car crash days after posting psych drug link to school shooters

SPENDING CUTS - The Political Shell Game

Fiscal Farce, Failure, Fantasy & Fornication – 01-18-13 The Burning Platform

As they have done for decades, Congress and the President agreed to address spending cuts at a future date. Of course, a government spending cut isn’t actually a cut. It’s a lower increase than their previous projection. Nothing is ever cut in Washington DC. The austerity storyline is a lie. Not a dime has been cut from the Federal budget. Intellectually dishonest ideologues try to peddle the wind down of the Obama $800 billion porkulus program as a cut in Federal spending. They sold this Keynesian “shovel ready” crap to a gullible public as stimulus to jumpstart the economy. Federal spending was $3.0 trillion before the Obama stimulus. After the two year stimulus was pissed away without helping the economy one iota, the baseline should have been back in the $3.2 trillion range. Instead, FY13 Federal spending will be $3.8 trillion. This hasn’t kept liberal ideologues like Krugman and his minions in the mainstream media from blaming crazy Tea Party Republicans for inflicting horrendous austerity measures on the poor and disadvantaged.

The chart above reveals a few truths:

• The country has been blessed with two of the worst presidents in U.S. history over the last twelve years.
• When Federal spending as a percentage of GDP is beyond two standard deviations over the normal range during the last sixty years, your problem is not lack of tax revenue.
• Obama and the current Congress are spending at a level of 24% of GDP versus the 18% of GDP when Clinton left office. This amounts to a nose bleed altitude $950 billion higher than the level Clinton was spending in his final year in office.

The Op-eds in liberal rags across the land decry the lack of civility in Washington DC and plead for politicians on both sides of the aisle to come together and compromise for the good of the country. This line of bullshit would be laughable if it wasn’t so wretched in its falsity. Compromise is what has left this country with a $16.4 trillion national debt, $200 trillion of unfunded liabilities, and $1 trillion deficits as far as the eye can see. Democrats have compromised and let the Republicans create a warfare state. Republicans have compromised and let Democrats create a welfare state. The two headed monster living in the swamps of Washington DC just voted to increase taxes on all Americans. They voted to hand criminal Wall Street banks $700 billion. They voted to pass the Patriot Act. They voted to pass the NDAA. They’ve allowed the President to wage undeclared wars in Iraq, Afghanistan, Libya, and now Iran. They voted for a $663 billion Defense bill that includes tens of billions the Secretary of Defense doesn’t even want. They will vote to raise the debt ceiling in the next two months. The last thing this country needs is more compromise. We can’t afford any more compromise. The chart above proves what can happen when gridlock ensues, spending restrictions are enforced, and confrontation displaces compromise. After the 1994 Republican takeover of Congress, gridlock ensued for the next six years. PAYGO restrictions in the Omnibus Budget Reconciliation Act of 1990 didn’t allow unfettered spending increases. The result was Federal spending falling from 22% of GDP to 18% of GDP and a budget surplus. The Pay-Go restrictions expired in 2002 and Democrats and Republicans have compromised to the tune of a $10.2 trillion increase in the national debt in ten years. The hypocrisy of pandering deceitful politicians is boundless and shows utter contempt for the intelligence of the American populace.

“Raising the debt ceiling does not authorize more spending. It simply allows the country to pay for spending that Congress has already committed to. If congressional Republicans refuse to pay America’s bills on time, Social Security checks, and veterans benefits will be delayed. We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialist who track down loose nuclear materials wouldn’t get their paychecks. Investors around the world will ask if the United States of America is in fact a safe bet. Markets could go haywire, interest rates would spike for anybody who borrows money – Every homeowner with a mortgage, every student with a college loan, every small business owner who wants to grow and hire. We are not a deadbeat nation.

It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession. And ironically it would probably increase our deficit. So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd. Republicans in Congress have two choices here. They can act responsibly, and pay America’s bills, or they can act irresponsibly and put America through another economic crisis. But they will not collect a ransom in exchange for not crashing the American economy.” – President Barack Obama – January 14, 2022

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. The Senate continues to reject a return to the common sense Pay-go rules that used to apply. Previously, Pay-go rules applied both to increases in mandatory spending and to tax cuts.

The Senate had to abide by the common sense budgeting principle of balancing expenses and revenues. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours. Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘‘the buck stops here.’’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.” – Senator Barack Obama – March 16, 2021

I could have shown quotes from George W. Bush during the 2000 Presidential campaign talking about a non-interventionist foreign policy and no need for the U.S. to get involved in nation building and then proceeding to pre-emptively attack sovereign countries while wasting trillions and impoverishing unborn generations trying to create “democracy” in the Middle East at the point of a gun as a cover to protect “our” oil. The point is that we are being given the illusion of choice. Everyone knows the debt ceiling will be raised after another episode of Washington DC Kabuki Theater, presented by the corporate mainstream media in breathtaking detail, because the politicians are beholden to their owners and those owners want more of our money. That is why spending will never be willingly cut by the spineless puppet congressmen, as their strings are pulled by the corporate puppet masters and they dance to the tune of the banking oligarchs that own this country.

After witnessing the fighting of undeclared never ending wars, passage of freedom destroying legislation like the Patriot Act & NDAA, approval of pork barrel spending to the tune of hundreds of billions, rule by Executive Order, using ZIRP to extract hundreds of billions from senior citizen savers and give it to criminal Wall Street banks, forcing the American people at gunpoint to replenish the Wall Street banks with $700 billion after they had committed the greatest financial fraud in history, and a continuing trampling of the U.S. Constitution, the American people continue to remain willfully ignorant of the truth. The American Dream is dead. We’ve allowed a rich, privileged, elite few to achieve hegemony over our economic and political system with their control of the media and manipulation of our financial markets. They will collapse the country because they will never be satisfied with the amount of wealth and power they’ve accumulated. Their voracious greed will be their downfall.

STATISM - The Institutionalization of Tyranny

The Institutionalization of Tyranny 01-18-13 Paul Craig Roberts Institute for Political Economy

Republicans and conservative Americans are still fighting Big Government in its welfare state form. Apparently, they have never heard of the militarized police state form of Big Government, or, if they have, they are comfortable with it and have no objection.

• Big Government in its welfare state form,
• Big Government in its militarized police state form

Republicans, including those in the House and Senate, are content for Big Government to:

• Initiate wars without a declaration of war or even Congress’ assent, and
• To murder with drones citizens of countries with which Washington is not at war.
• That federal “security” agencies spy on American citizens without warrants and record every email, Internet site visited, Facebook posting, cell phone call, and credit card purchase. Republicans in Congress even voted to fund the massive structure in Utah in which this information is stored.

.....

The institutionalization of tyranny is the achievement of the Bush/Obama regimes of the 21st century.

This, and not the Great Society, is the decisive break from the American tradition. The Bush Republicans demolished almost all of the constitutional protections of liberty erected by the Founding Fathers.

The Obama Democrats codified Bush’s dismantling of the Constitution and removed the protection afforded to citizens from being murdered by the government without due process.

One decade was time enough for two presidents to make Americans the least free people of any developed country, indeed, perhaps of any country. In what other country or countries does the chief executive officer have the right to murder citizens without due process?

It turns one’s stomach to listen to conservatives bemoan the destruction of liberty by compassion while they institutionalize

• Torture,
• Indefinite detention in violation of habeas corpus,
• Murder of citizens on suspicion and unproven accusation alone,
• Complete and total violation of privacy,
• Interference with the right to travel by unaccountable “no-fly” lists and highway check points,
• The brutalization of citizens and those exercising their right to protest by police, frame-ups of critics, and narrow the bounds of free speech.

In AMERIKA today only the executive branch of the federal government has any privacy. The privacy is institutional, not personal – witness the fate of CIA director Petraeus. While the executive branch destroys the privacy of every one else, it insists on its own privilege of privacy. National security is invoked to shield the executive branch from its criminal actions. Federal prosecutors actually conduct trials in which the evidence against defendants is classified and withheld from defendants’ attorneys. Attorneys such as Lynne Stewart have been imprisoned for not following orders from federal prosecutors to violate the attorney-client privilege.

Conservatives accept the monstrous police state that has been erected, because they think it makes them safe from “Muslim terrorism.” They haven’t the wits to see that they are now open to terrorism by the government.

BRADLEY MANNING

Consider, for example, the case of Bradley Manning. He is accused of leaking confidential information that reveals US government war crimes despite the fact that it is the responsibility of every soldier to reveal war crimes. Virtually every one of Manning’s constitutional rights has been violated by the US government. He has been tortured. In an effort to coerce Manning into admitting trumped-up charges and implicating WikiLeaks’ Julian Assange, Manning had his right to a speedy trial violated by nearly three years of pre-trial custody and repeated trial delays by government prosecutors. And now the judge, Col. Denise Lind, who comes across as a member of the prosecution rather than an impartial judge, has ruled that Manning cannot use as evidence the government’s own reports that the leaked information did not harm national security. Lind has also thrown out the legal principle of mens rea by ruling that Manning’s motive for leaking information about US war crimes cannot be presented as evidence in his trial.

MENS REA

Mens rea says that a crime requires criminal intent. By discarding this legal principle, Lind has prevented Manning from showing that his motive was to do his duty under the military code and reveal evidence of war crimes. This allows prosecutors to turn a dutiful act into the crime of aiding the enemy by revealing classified information.

Of course, nothing that Manning allegedly revealed helped the enemy in any way as the enemy, having suffered the war crimes, was already aware of them.

Obama Democrats are no more disturbed than conservative Republicans that a dutiful American soldier is being prosecuted because he has a moral conscience. In Manning’s trial, the government’s definition of victory has nothing whatsoever to do with justice prevailing. For Washington, victory means

stamping out moral conscience and protecting a corrupt government from public exposure of its war crimes.

STATISM - A 98-minute Documentary Film of 23 Leading Economic Voices

FILM: The Four Horsement

A new 98-minute documentary of 23 leading economic voices explaining how:

banking/financial elite transfer trillions of dollars to themselves through privilege of creating what we use for money as debt that they make out of nothing, and then using this debt-money to earn interest and gamble.

Four Horsemen is the debut feature from director Ross Ashcroft which reveals the fundamental flaws in the economic system which have brought our civilization to the brink of disaster. 23 leading thinkers –frustrated at the failure of their respective disciplines – break their silence to explain how the world really works. The film pulls no punches in describing the consequences of continued inaction – but its message is one of hope. If more people can equip themselves with a better understanding of how the world really works, then the systems and structures that condemn billions to poverty or chronic insecurity can at last be overturned. Solutions to the multiple crises facing humanity have never been more urgent, but equally, the conditions for change have never been more favourable.

 

“That rare kind of film which is capable of changing one’s perspective on the entire world.”
- Lucy Purdy, Sublime Magazine

“Director Ross Ashcroft uncovers the systemic, legalised corruption of governments and the banking system enabling the rich to get richer while the majority of the world lives in abject poverty – waiting for the magic of ‘trickle down’ economics to take effect.”
- Rachel Surgeoner, Little White Lies

“Four Horsemen is a breathtakingly composed jeremiad against the folly of Neo-classical economics and the threats it represents to all we should hold dear.”
- Harold Crooks,  The Corporation (Co-Director) and Surviving Progress (Co-Director/Co-Writer)

“Ashcroft does not try to shock us into his view by an over-reliance on footage of terrorist attacks or starving African children … [he] shows great intention in this documentary, which is one of the clearest and most demystifying attempts at guiding us through the alien landscape of economics. Four Horsemen answers the fundamental questions, and raises some complex ones, inspiring us to go out and further understand this crazy system we’re stuck in.”
- Robert Zak,  Best For Film

“Four Horsemen could be part of a new global manifesto for a desperately needed new world. Watch it and make up your own mind if you want to be part of it”
- Caspar Walsh – Positive News

“Using some of the brightest thinkers of our age, [Four Horsemen] considers where we are today and how we got there. It considers the failings of the economic system and how this has turned our democracies into plutocracies. It does not hark back to some mythical golden age, but considers how FD Roosevelt acted when faced with a similar crisis, and laments the fact our politicians today do not have the same vision to do the same.” 
- Dan Carrier, Camden New Journal  

“It’s Inside Job with bells on, and a frequently compelling thesis thanks to Ashcroft’s crack team of talking heads – economists, whistleblowers and Noam Chomsky, all talking with candour and clarity.”
- Total Film

“Four Horsemen is an important film because it presents a sober picture of what is wrong in a non-hysterical way and will ignite a debate about what can be done to create a fairer, less dysfunctional world.”
- Marcus Chown, New Scientist 

“The refreshing thing about this film is that Ross Ashcroft also takes the viewer on a broader journey, linking in terrorism, global warming and poverty along with world finances to present a troubling picture of the world today.”
- Mark Adams, Chief Film Critic Screen International

“The independent production collates 23 key figures from finance, journalism, activisism and politics – plus Noam Chomsky – to examine how we got into this financial state, while blasting modern economic theories. Trust us, it’s not as dry as it looks on paper – think Senna-like riveting.”
- Becky Reed, DIY 

“Ashcroft keenly rejects amorality and apathy alike, and he may be the first documentarist working in this field to elicit viable solutions from his interviewees, rather than baleful shrugs: you can’t fail to emerge better informed, and better prepared to make the kinds of changes and perception shifts we need to make if we are to move forward from here. Despite the doom laden title, this is a hugely encouraging watch.”
- Mike McCahill, Cinesthesiac  

HUMOR - It can only be FUNNY IF there is some degree of broadly recognizable TRUTH in it

“Politicians are put there to give you that idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations, and they’ve long since bought and paid for the Senate, the Congress, the State Houses, and the City Halls. They’ve got the judges in their back pockets. And they own all the big media companies so they control just about all the news and information you get to hear. They’ve got you by the balls.

They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest. You know something, they don’t want people that are smart enough to sit around their kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago.

It’s a big club and you ain’t in it! You and I are not in the Big Club. By the way, it’s the same big club they use to beat you in the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to think and what to buy. The table is tilted folks, the game is rigged. And nobody seems to notice, nobody seems to care. That’s what the owners count on, the fact that Americans are and will probably remain willfully ignorant of the big red, white, and blue dick that’s being jammed up their assholes every day. Because the owners of this country know the truth, it’s called the American Dream, because you have to be asleep to believe it.” – George Carlin

YOU MAY FIND THIS VIDEO OFFENSIVE.
PAY PARTICULAR ATTENTION TO HOW THE AUDIENCE REACTS - They sense the TRUTH

FINANCIAL REPRESSION - Morgan Stanley: 'the situation is hopeless'

National Balance Sheets 01-16-13 Economist - Buttonwood's Notebook

DAVOS - The Velvet Rope

What Really Matters In Davos 01-23-13 Bloomberg via ZH

hink you've made it? Consider yourself the BSD in the room? Well, in Davos, only one thing matters and its about color; the color of your badge. From the holographic awesomeness of the elite badge that enable secret elevators (and handshakes) to the less-than-awesome base colors associated with the press that are both follower and enabler of this event; Bloomberg TV's Erik Schatzker, with his tongue somewhat buried in its cheek, exposes what really matters in Davos among the elite of the elite...

Click to Play Video