Oh, the joy of walking again makes me feel like singing...Oh, what a lovely world...
500K protested in Hong Kong about the influence of power by China on their lives
the demonstration on the news that same evening by the Chinese media only
mentioned that 100K voiced their displeasure because they cannot understand all the benefits
from the mainland.
And The Beat Goes On...
The US stock market breaks new records every week
experts praise the recovery, talking heads agree
I ask why GDP was negative 2.9% in the 1st quarter?
and the second has already been down-graded too.
And The Beat Goes On...
The EU will not allow its member nations to suffer
a negative cycle. They will unlock new job growth with
the oldest profession and drug usage will grow GDP
under health care to a "high" of 3%.
And The Beat Goes On...
Be near your friends, but keep your enemy closer
says an ancient China master which explains why a
German official sold secrets to US intelligence. I only
wonder who is the friend and who is the enemy?
And The Beat Goes On...
Last blog before I was hit by a GMC, SUV stated
GM recalled 3m cars and today, it is up to 28 million.
Hey, the SUV only had skid marks and it felt strong
my ankle not so good under wear & tear.
And The Beat Goes On...
BMW, Honda, Toyota and Chrysler too, all joined the recall
even Facebook crashed the party to generate revenue
Twitter, Google will not be left behind
media revenues is up, causes are down.
And The Beat Goes On...
Been three years since Fukushima, but radiated water
still spills into the Pacific. A "genius" has the answer,
build an ice wall ring to contain the leaks. Nothing like
frozen water to dam the flow of running water.
And The Beat Goes On...
Economic pundits confirm the Fed, inflation is dead.
I see different signs: eggs up 15%, coffee up 10%,
diary up 37% even with subsidized manipulation.
gas up 12%, grains up 10%, pork up 40% and beef
is off the charts, so says the writing on the subway walls.
And The Beat Goes On...
Planes down in Ukraine, tanks roll in Gaza
girls gone in Nigeria and candidates
disappear in Egypt. Boats play roller derby
in the China Sea and drive-by shootings in the USA
And The Beat Goes On...
Obama used amnesty for the Hispanic vote,
didn't see the consequences on the border today,
tomorrow or the next. No one acts like send them
on a bus to Mexico, at least they speak the same
And The Beat Goes On...
We know who won the All-Star game, World Cup
as Johnny Football waits in the wings, but no one
understands the Fed as Yellen yells, low rates are good
for the economy and manana will yell, high rates are
good for the economy.
And The Beat Goes On...
Harry Dent and I criticize the Fed, as Yellen quotes Greenspan,
"...no way to identify a bubble until it bursts. It's better to clean
up the damage, then try to deflate the bubble in advance."
That B.S. almost causes a skip, but fear not she's got the needle.
And The Beat Goes On...
Who ya gonna call when ya hungry and no food to eat?
Climate, prices up, dollar value down.
Does anyone ask explains the Fed?
And The Beat Goes On...
For people who live where the wind comes sweeping down the
plains, say they never heard of local earthquakes until
fracking came to town. The rigs are ahead of the quakes
which hit 200 with the last count.
And The Beat Goes On...
Great news for democracy as elections proceeded
in Afghanistan except one-quarter of the nation
was deemed unsafe for voting. We think we have a
winner, but first let's check the absentees as someone
saw Miami, Florida in the lower right hand corner.
And The Beat Goes On...
Need a job? Don't fret. Politicians are at work.
Only two states had gambling in 1988 and today,
we got 39 with a lot of upside. Check your local
chamber after the mid-term graft.
And The Beat Goes On...
"Mara, Marijuana" sang the chorus in 1969 at
Woodstock. Finally made it to number one in
Colorado and Washington too. Politicians are
at work. 90% upside. Check your chamber
after the mid-term graft.
And The Beat Goes On...
Quiet secret of outsourcing by Boeing who
never said this before the union vote, the
fuselage is made in Japan. At least they have a
conscious. Worry if Brazil or China wins the
contract. This is so good it gets another stanza.
We have fallen buildings and crumbling roads
due to cheap cement. We have split bridges, due to
lack of repairs. Will parachutes be the
new airline fee if Japan loses its fuselage fee?
And The Beat Goes On...
Sadly, Malaysia Air suffers another blow,
but the Netherlands face a deadly role.
Will 134 of its own invoke sanctions worth
$134b? Hope for the best, prepare for the worst.
And The Beat Goes On...
Turn the record over to the flip-side. I can't
take it anymore as Snowden ponders a tune with
his stay expiring in thirty days. Will this be the deal
behind all the tragedy?
And The Beat Goes On...
Can Dream Catcher answer NASA's call?
Or will a trampoline bounce us to the
space station? Never enough dough, says the
military which could end the peaceful venture.
Why don't they play Lennon's mantra?
GIVE PEACE A CHANCE
Because they want to hear
And The Beat Goes On...
Wednesday, July 23, 2014
Saturday, April 5, 2014
Another Hole in the Dyke...O-J-T
If you missed 60 Minutes last Sunday, you missed some very important information. The writer, Michael Lewis was interviewed about his new book, Flash Boys. This is a journalistic piece on our contemporary stock market. It is very bad news. I hope that you are sitting down. The stock market is a great place to grow your money. Some say you can make a million, if you start out with millions.
There have been numerous scandals concerning the market from "pools," front-running, bait and switch, pump & dump to the recent financial crisis where bets where made against the CDS of the housing assets in tranches, while at the same time agents of the same company were telling investors to buy these monetized debts.
It seems that the new rip-off is the best one yet. You want to buy Apple. You type your order on your computer or maybe you call your broker. The order is placed at the price you see on your screen. A few minutes later, you get a transaction report. Lo and behold! You do not get the price that you saw on your screen. You paid a few cents higher. You may call your online broker or your live broker for an explanation. You will find out that your only protection was to place the order at the set price and further, be willing to accept only a partial fill. Why? Because the stock pushed higher...end of story?
Millie-Second
is all it takes to rip you off! Believe it or not, there are computer programs that read trades, understand volume and execute a trade before your transaction, which pushes a stock price higher, thus making you pay more for your trade.
How? High Frequency Traders(HFT)have their servers in the exchanges and in coordination with Wall Street Banks are always first in line for any trade that HFT wish to make. People, these computer codes can decipher yours and every body's orders. They know your position. How strong or how much you plan to buy. It is like this: the horse race is over! The winning horse is getting its roses in the winners circle and now, your bet is placed. You are being skimmed, cheated, ripped-off everyday.
We can thank Brad Katsuyama. He led the trading floor for the Royal Bank of Canada when he felt something was wrong because this happened to almost all his trades. He found out how HFTs use fiber optic cables within the exchange that only need one-thousand of a second to know your order and decide if it wants to beat you to the price, forcing you to pay a higher price. Do this everyday, and you will make a lot of money off of any trader, especially those who purchase large transactions. Even the wealthy are being taken.
Cannibalization of paper money!
There is going to be news every week in the near term concerning HFT. The Attorney-General of New York is after these people, saying that basically, they are trading on inside information. Whose? Yours! In the cavalry charge is the FBI, DOJ and the CFC. Charles Schwab said,"this is a cancer that needs to be eradicated, HFTs are gaming the system."
Anyway, Brad Katsuyama left RBC to form his own fair trading exchange called the I.E.X. They do not allow HFTs, however as Joesph Schumpeter stated, " capitalism is a creative destruction," meaning something new will be developed. In trading the new approach is using micro-tech wave towers which are even faster than fiber optics.
Bottom line: we all have a new middle-man to pay before our trade is complete. We got commissions, taxes and now, HFTs to pay with the hope that whatever we buy or sell is going the way we thought. Another nail in the coffin of free enterprise. Maybe Nine Inch Nails will sing a song about it?
O-J-T: you don't hear of on-the-job-training anymore. Why train workers to improve your product when you outsourced your whole company. In a turn for the better, some companies are going back to the basics. It is in that light that I want to give a "Shout-Out" to National Oil Well, Varco(NOV). They are training workers for high paying jobs and even got the local community colleges into the act. Finally, an appreciation for the laborer and a wage that makes you smile to go to work. Congrats to NOV!
There have been numerous scandals concerning the market from "pools," front-running, bait and switch, pump & dump to the recent financial crisis where bets where made against the CDS of the housing assets in tranches, while at the same time agents of the same company were telling investors to buy these monetized debts.
It seems that the new rip-off is the best one yet. You want to buy Apple. You type your order on your computer or maybe you call your broker. The order is placed at the price you see on your screen. A few minutes later, you get a transaction report. Lo and behold! You do not get the price that you saw on your screen. You paid a few cents higher. You may call your online broker or your live broker for an explanation. You will find out that your only protection was to place the order at the set price and further, be willing to accept only a partial fill. Why? Because the stock pushed higher...end of story?
Millie-Second
is all it takes to rip you off! Believe it or not, there are computer programs that read trades, understand volume and execute a trade before your transaction, which pushes a stock price higher, thus making you pay more for your trade.
How? High Frequency Traders(HFT)have their servers in the exchanges and in coordination with Wall Street Banks are always first in line for any trade that HFT wish to make. People, these computer codes can decipher yours and every body's orders. They know your position. How strong or how much you plan to buy. It is like this: the horse race is over! The winning horse is getting its roses in the winners circle and now, your bet is placed. You are being skimmed, cheated, ripped-off everyday.
We can thank Brad Katsuyama. He led the trading floor for the Royal Bank of Canada when he felt something was wrong because this happened to almost all his trades. He found out how HFTs use fiber optic cables within the exchange that only need one-thousand of a second to know your order and decide if it wants to beat you to the price, forcing you to pay a higher price. Do this everyday, and you will make a lot of money off of any trader, especially those who purchase large transactions. Even the wealthy are being taken.
Cannibalization of paper money!
There is going to be news every week in the near term concerning HFT. The Attorney-General of New York is after these people, saying that basically, they are trading on inside information. Whose? Yours! In the cavalry charge is the FBI, DOJ and the CFC. Charles Schwab said,"this is a cancer that needs to be eradicated, HFTs are gaming the system."
Anyway, Brad Katsuyama left RBC to form his own fair trading exchange called the I.E.X. They do not allow HFTs, however as Joesph Schumpeter stated, " capitalism is a creative destruction," meaning something new will be developed. In trading the new approach is using micro-tech wave towers which are even faster than fiber optics.
Bottom line: we all have a new middle-man to pay before our trade is complete. We got commissions, taxes and now, HFTs to pay with the hope that whatever we buy or sell is going the way we thought. Another nail in the coffin of free enterprise. Maybe Nine Inch Nails will sing a song about it?
O-J-T: you don't hear of on-the-job-training anymore. Why train workers to improve your product when you outsourced your whole company. In a turn for the better, some companies are going back to the basics. It is in that light that I want to give a "Shout-Out" to National Oil Well, Varco(NOV). They are training workers for high paying jobs and even got the local community colleges into the act. Finally, an appreciation for the laborer and a wage that makes you smile to go to work. Congrats to NOV!
Wednesday, March 26, 2014
1st Crimea, Now ICANN, Next?...Accountability
The takeover of Crimea may have come about by a disputed vote, however it was achieved by a slow rot. I don't want to get off the topic or direction of the theme, but it is ironic that the Ukraine crisis led to a change in government by a disputed democratic vote. This vote was recognised. Yet, when a democratic vote was used in Crimea, it is not recognised. When Russia turned over Crimea in 1954, they retained the rights to the port. This control gave Russia the ability to direct the local economy with jobs and the occasional epistemological corruption. Russia also moved many people there to place in key positions. Being a warmer climate compared to the Russian homeland, many more Russians relocated there. This is why the population is mostly Russian. The vote was symbolic. The takeover was a fait accompli. The real danger is this the new technique for the 21st. Century?
ICANN
is a mouthful of letters that stands for Internet Corporation for Assigned Names & Numbers. This organization began in 1998 in response by the global community for a stake hold in the surging use of the Internet. Since the Internet is another contribution to the world by the US, it had been a US entity. With that being said, the US did allow world governments the ability to control content, however now, these same governments want that all important 51%.
The question to ask is why? Could it be the Arab Spring? Could it be the unrest in China? In Turkey?
China did ban Goggle for a period of time. The dispute still has not been officially cleared up. Turkey has a ban on Twitter at the moment. It seems that everyone will go along with the present format, but governments may decide to build their own, although I think that they will play the political game. This game got a huge lift from the disclosure of the NSA spying. Another feather in our military's hat, especially those idiots at NSA. It appears that the Dot.Com's and Dot.Govs will get some type of changeover because the US seems to be leaning on the side of transferring key stewardship to the Global Community. I don't like this decision. At best, it should be temporary with a sunset time limit. After this period, it could be renewed if all goes well.
What I See
is government censorship. Another slow rot like in Crimea. There really is no reason for the change except this aspect. At present the US allows government controls, but when implemented, everyone knows. This is why governments want that 51%. To hide the truth! The Internet is one of the last places to get second opinions, and that is what the statist want to eliminate. It is about the control of information which is the currency of the 21st.Century. It is about freedom of man. It is about freedom of speech. This is the ideology behind a mask of anti-US control. Again, we can thank our military for the situation that they have placed us in.
Taiwan
the population is 100% Chinese. The economy has been very slow the past two years with GDP being under 2%. The government just approved a trade agreement with their biggest trading partner. That's right, China. The deal opens in China 80 sections of the economy, but for a much smaller island nation, 60 sections are open to competition with China. Who do you think will control the Taiwan economy in a few years? I'll give you the first letter:C. This field is not even. The population of Taiwan is 23m and China has 1.3b. China's GDP is $8.3t and Taiwan's is $473b. This is another example where government does not protect its citizens. Global trade is a lie. A capitalist economy cannot compete with a socialist economy. This is why the US is in decline, because the world uses socialism to compete. It is like the Federal Reserve versus your local bank or in this case 17 plus to 1. This is going to be another case of a slow rot. What do we do when Taiwan wants to vote to rejoin China? This is going to be the most dangerous place in the world in a few years.
Accountability: California has and is trying to save its salmon industry. They actually have to collect the fish, truck them to a location where the salmon can get to the Pacific Ocean, grow and then, return to spawn. Why? Because dam projects by the army engineers failed to account for the fish in their designs. I think that the federal government should pay California a rebate for this worthy attempt to save the industry.
ICANN
is a mouthful of letters that stands for Internet Corporation for Assigned Names & Numbers. This organization began in 1998 in response by the global community for a stake hold in the surging use of the Internet. Since the Internet is another contribution to the world by the US, it had been a US entity. With that being said, the US did allow world governments the ability to control content, however now, these same governments want that all important 51%.
The question to ask is why? Could it be the Arab Spring? Could it be the unrest in China? In Turkey?
China did ban Goggle for a period of time. The dispute still has not been officially cleared up. Turkey has a ban on Twitter at the moment. It seems that everyone will go along with the present format, but governments may decide to build their own, although I think that they will play the political game. This game got a huge lift from the disclosure of the NSA spying. Another feather in our military's hat, especially those idiots at NSA. It appears that the Dot.Com's and Dot.Govs will get some type of changeover because the US seems to be leaning on the side of transferring key stewardship to the Global Community. I don't like this decision. At best, it should be temporary with a sunset time limit. After this period, it could be renewed if all goes well.
What I See
is government censorship. Another slow rot like in Crimea. There really is no reason for the change except this aspect. At present the US allows government controls, but when implemented, everyone knows. This is why governments want that 51%. To hide the truth! The Internet is one of the last places to get second opinions, and that is what the statist want to eliminate. It is about the control of information which is the currency of the 21st.Century. It is about freedom of man. It is about freedom of speech. This is the ideology behind a mask of anti-US control. Again, we can thank our military for the situation that they have placed us in.
Taiwan
the population is 100% Chinese. The economy has been very slow the past two years with GDP being under 2%. The government just approved a trade agreement with their biggest trading partner. That's right, China. The deal opens in China 80 sections of the economy, but for a much smaller island nation, 60 sections are open to competition with China. Who do you think will control the Taiwan economy in a few years? I'll give you the first letter:C. This field is not even. The population of Taiwan is 23m and China has 1.3b. China's GDP is $8.3t and Taiwan's is $473b. This is another example where government does not protect its citizens. Global trade is a lie. A capitalist economy cannot compete with a socialist economy. This is why the US is in decline, because the world uses socialism to compete. It is like the Federal Reserve versus your local bank or in this case 17 plus to 1. This is going to be another case of a slow rot. What do we do when Taiwan wants to vote to rejoin China? This is going to be the most dangerous place in the world in a few years.
Accountability: California has and is trying to save its salmon industry. They actually have to collect the fish, truck them to a location where the salmon can get to the Pacific Ocean, grow and then, return to spawn. Why? Because dam projects by the army engineers failed to account for the fish in their designs. I think that the federal government should pay California a rebate for this worthy attempt to save the industry.
Thursday, March 20, 2014
Safety: Too Expensive Until It Isn't...L&C
Like an onion there are many layers in every aspect of an economy, especially where safety is an issue. I love the theory that the government should leave business alone, but I can't get past the fact that man is greedy. This greed will cause him to do anything for the spoils of his effort. Put it this way, if man will kill, stealing and cheating are so much easier and with less punishment. In addition, he can use the system to get government to pass the laws that one needs for success. So much for theory.
Example
Consider a coal plant. It was probably built before technological improvements like "scrubbers" were developed. They filter the harmful dust from the air to prevent pollution. However, when the company filed for its license, the rubber stamp agency approved without looking into the future to place a contingency on the company that it should upgrade in regards to air pollution. They just stated that the company met the minimum standards. Sadly, our society gets mediocre results.
Over time almost all if not all coal plants exceeded those safety levels, and at the same time, these same companies cry that filters are too expensive, jobs would be lost if forced to comply and of course, rates will rise due to those same costs.
It is time to say that this is your business. These are costs associated with it. You take the loss for the repairs or your license will be revoked. We will let the market act "freely." If you can't supply electricity at a fair price, someone else can and will. Sadly, again we will never read those words with our two parties. Another reason why we need a new party for the people.
What We Will Get
acts like in France where pollution is so bad that the government enacted a new law that only allows you to use your vehicle only every other day.
Why this rant? Look at the news! Three years after Fukushima and the Japanese still do not have any idea where to bury their contaminated residue. At the same time they want to activate their other nuclear reactors. Did I mention the many leaks of polluted water into the ocean?
Question
In an island nation that suffers from monsoons, tsunami's and earthquakes, why didn't the electric company have an alternative energy source? Why wasn't there a better water buffer for the plant? Oh, it cost too much...until it doesn't.
Today, in the US, Edwin Lyman offers some of the same questions and criticisms. This is a rare scientist who speaks out against the nuclear establishment. Why are they allowed to build on fault lines? Why aren't filters installed in case of an emergency to prevent contamination into the air and ground water? At this moment there have been complaints about contaminated water leaked from Fukushima reaching our West Coast. These are put down by the shills of the Nuclear Regulatory Commission(NRC). This is the same class of people who lied about NSA spying and weapons of mass destruction in Iraq and on and on.
Our nuclear field started with civilian volunteers during WW ll. After the war the study was put under military control. Anyone want to debate whether the military lies? People, this is the bottom line: if rods are contaminated and wherever you bury them will be poisoned forever, it is time to seek other forms of energy that is safe. When the label says poison, you do not drink it. Forget the too expensive crowd. Safety is too expensive to avoid.
If you need more examples consider GM. They are under investigation for lack of safety in their cars to which they probably knew, but decided it was too expensive to comply. In addition two more calls for recalls are in the works, bringing the total to 3.1m vehicles not to mention the lawsuits that are now being typed. Safety: too expensive until it isn't.
Think it is only American cars? No, dear reader. Toyota, Honda and Audi are all recent recalls. I should add that Hyundai will be on the list in the future. Ever drive one? I think that they need a lot of work, but safety is too expensive until it isn't.
There are many other examples, but I can't go over everything in this space. I think that you will get the point, but I do need to add this last one, BP. They chose to use the cheap oil regulator instead of Stat Oil's more expensive but safer version. We all know the outcome of that choice.
Safety is part of every business and it is never too expensive unless you avoid doing it. Today, is the first day of Spring. Time for the spring cleaning to make the house safe with health in mind. We need to transcend the thought to our economy with keeping regulation only with safety as its priority because it is too expensive not too.
Liars and Crooks: goes to the S. Korean company, Hynix. One of their workers was caught stealing trade secrets belonging to Toshiba and San Disk. He use to work at San Disk. He left for Hynix with info for a nice paying job. I guess if you can't compete legally, cheat&steal your way. This isn't the first time for Hynix either. They tried the same thing with Toshiba back in 2004. Funny, I thought that cheating and stealing were only legal in wrestling. Foolish me.
Example
Consider a coal plant. It was probably built before technological improvements like "scrubbers" were developed. They filter the harmful dust from the air to prevent pollution. However, when the company filed for its license, the rubber stamp agency approved without looking into the future to place a contingency on the company that it should upgrade in regards to air pollution. They just stated that the company met the minimum standards. Sadly, our society gets mediocre results.
Over time almost all if not all coal plants exceeded those safety levels, and at the same time, these same companies cry that filters are too expensive, jobs would be lost if forced to comply and of course, rates will rise due to those same costs.
It is time to say that this is your business. These are costs associated with it. You take the loss for the repairs or your license will be revoked. We will let the market act "freely." If you can't supply electricity at a fair price, someone else can and will. Sadly, again we will never read those words with our two parties. Another reason why we need a new party for the people.
What We Will Get
acts like in France where pollution is so bad that the government enacted a new law that only allows you to use your vehicle only every other day.
Why this rant? Look at the news! Three years after Fukushima and the Japanese still do not have any idea where to bury their contaminated residue. At the same time they want to activate their other nuclear reactors. Did I mention the many leaks of polluted water into the ocean?
Question
In an island nation that suffers from monsoons, tsunami's and earthquakes, why didn't the electric company have an alternative energy source? Why wasn't there a better water buffer for the plant? Oh, it cost too much...until it doesn't.
Today, in the US, Edwin Lyman offers some of the same questions and criticisms. This is a rare scientist who speaks out against the nuclear establishment. Why are they allowed to build on fault lines? Why aren't filters installed in case of an emergency to prevent contamination into the air and ground water? At this moment there have been complaints about contaminated water leaked from Fukushima reaching our West Coast. These are put down by the shills of the Nuclear Regulatory Commission(NRC). This is the same class of people who lied about NSA spying and weapons of mass destruction in Iraq and on and on.
Our nuclear field started with civilian volunteers during WW ll. After the war the study was put under military control. Anyone want to debate whether the military lies? People, this is the bottom line: if rods are contaminated and wherever you bury them will be poisoned forever, it is time to seek other forms of energy that is safe. When the label says poison, you do not drink it. Forget the too expensive crowd. Safety is too expensive to avoid.
If you need more examples consider GM. They are under investigation for lack of safety in their cars to which they probably knew, but decided it was too expensive to comply. In addition two more calls for recalls are in the works, bringing the total to 3.1m vehicles not to mention the lawsuits that are now being typed. Safety: too expensive until it isn't.
Think it is only American cars? No, dear reader. Toyota, Honda and Audi are all recent recalls. I should add that Hyundai will be on the list in the future. Ever drive one? I think that they need a lot of work, but safety is too expensive until it isn't.
There are many other examples, but I can't go over everything in this space. I think that you will get the point, but I do need to add this last one, BP. They chose to use the cheap oil regulator instead of Stat Oil's more expensive but safer version. We all know the outcome of that choice.
Safety is part of every business and it is never too expensive unless you avoid doing it. Today, is the first day of Spring. Time for the spring cleaning to make the house safe with health in mind. We need to transcend the thought to our economy with keeping regulation only with safety as its priority because it is too expensive not too.
Liars and Crooks: goes to the S. Korean company, Hynix. One of their workers was caught stealing trade secrets belonging to Toshiba and San Disk. He use to work at San Disk. He left for Hynix with info for a nice paying job. I guess if you can't compete legally, cheat&steal your way. This isn't the first time for Hynix either. They tried the same thing with Toshiba back in 2004. Funny, I thought that cheating and stealing were only legal in wrestling. Foolish me.
Tuesday, March 11, 2014
Triple Witching and Market Direction...L&C
After the first two months of the new trading year, no one has a clue as to what will unfold for the remainder. The January Barometer sings the song, "so goes January, so goes the S&P." It sang a deep blues. Down January's are harbingers of trouble ahead, notably reflected in one or more sections.
Exogenous events to the economic, political or military arenas have usually happened after a negative first month. It is especially forceful when the January low falls below the previous December low. This too happened.
Nevertheless, the market rebounded in February, so everything is back to zero. If you listened to the media and their pundits, all is well. They are saying the same things that they always say,"...stocks are going higher..." It is their mantra.
Deja Vu
It was the same meme after the Santa Claus Rally. However, when that failed, it was excuse after excuse. The weather being the most favorite theme. They then, go into their spiel that the Dow is up, along with consumer confidence, inflation is low and unemployment is falling. They never relate this message or criteria to past performance like in 2007. In that year we had full employment, inflation was low, consumer confidence was off the charts and the Dow kept breaking records with new highs on a daily basis. I'd like to add that our national deficit was half of what it is today.
Guess what? In 2008 we had the worst crash since 1929. By the way 1929 was a year where the Dow was breaking records on a daily basis.
These people are selling not educating. The host never argues or offers a rebuttal comment. The Internet seems to be the last form of media that offers a different insight.
Decision Time
If you are considering to enter this market, I would read what I am about to write. Before you put your cash on the line, know the trend of the market.
The market is either bullish, bearish or sideways. You can drop the last direction as the length is generally short as the market decides on a course, either up or down.
If the market has been down for an extended period, steadies and then begins to climb, this could signal a new bull market. The first test will be to rise above previous lows from the down ladder, forming a rising ladder like the time back in 1982. The bull lasted until 2000. This is an example of a secular bull market. This does not mean that stocks go straight up. There could be a cyclical bear within it.
Secular and Cyclical
Secular trends are long-term, usually lasting 8 to 20 years. Cyclical trends are shorter-term, lasting from a few months to several years.
Dear reader, we entered a secular bear market in 2000. We still have a few more years to go. At the moment we are in a cyclical bull move just like 2007. With that said, I call your attention to Triple Witching in March. This occurs on the third Friday of the month. It is the expiration of options and futures contracts. One important aspect of it is increased volume in the market. This is directed by institutions and hedge funds. Volume moves the market. It is a tell as to where the money is leaning.
Just as the moon affects the tide, the expiration of options and futures pulls the stock market into a cycle of volatility. Money is either flowing into or out of the market. Look at it this way: if people are waiting outside of your restaurant maybe you can raise your prices. If no one enters maybe you should look to get into another business.
One other aspect about the importance of March's Triple Witching is the point that it is so close to the end of the month which happens to be the end of the first quarter. I believe whatever the direction the market takes because of the results on Friday, it will be a "tell" of the market. By the way the Monday of that week should give trader's a heads up as volume is generally higher in this week on Monday.
If you are keeping score, January was down and February was up. This is the "rubber game"in the series. The verdict of Triple Witching, I believe will be the market's direction for the remainder of 2014.
Liars and Crooks: Goes to President Obama who called his critics of his Affordable Care Act, unfounded. He said, "you can keep your policy, if you like your coverage." Well, lo and behold! You cannot keep your old policy and now, the president has given anyone who had an old policy, a two year extension. When the dust settles by the sign-up date of 31 March 2014, everyone will be accounted for even if the category is under exemption.
Exogenous events to the economic, political or military arenas have usually happened after a negative first month. It is especially forceful when the January low falls below the previous December low. This too happened.
Nevertheless, the market rebounded in February, so everything is back to zero. If you listened to the media and their pundits, all is well. They are saying the same things that they always say,"...stocks are going higher..." It is their mantra.
Deja Vu
It was the same meme after the Santa Claus Rally. However, when that failed, it was excuse after excuse. The weather being the most favorite theme. They then, go into their spiel that the Dow is up, along with consumer confidence, inflation is low and unemployment is falling. They never relate this message or criteria to past performance like in 2007. In that year we had full employment, inflation was low, consumer confidence was off the charts and the Dow kept breaking records with new highs on a daily basis. I'd like to add that our national deficit was half of what it is today.
Guess what? In 2008 we had the worst crash since 1929. By the way 1929 was a year where the Dow was breaking records on a daily basis.
These people are selling not educating. The host never argues or offers a rebuttal comment. The Internet seems to be the last form of media that offers a different insight.
Decision Time
If you are considering to enter this market, I would read what I am about to write. Before you put your cash on the line, know the trend of the market.
The market is either bullish, bearish or sideways. You can drop the last direction as the length is generally short as the market decides on a course, either up or down.
If the market has been down for an extended period, steadies and then begins to climb, this could signal a new bull market. The first test will be to rise above previous lows from the down ladder, forming a rising ladder like the time back in 1982. The bull lasted until 2000. This is an example of a secular bull market. This does not mean that stocks go straight up. There could be a cyclical bear within it.
Secular and Cyclical
Secular trends are long-term, usually lasting 8 to 20 years. Cyclical trends are shorter-term, lasting from a few months to several years.
Dear reader, we entered a secular bear market in 2000. We still have a few more years to go. At the moment we are in a cyclical bull move just like 2007. With that said, I call your attention to Triple Witching in March. This occurs on the third Friday of the month. It is the expiration of options and futures contracts. One important aspect of it is increased volume in the market. This is directed by institutions and hedge funds. Volume moves the market. It is a tell as to where the money is leaning.
Just as the moon affects the tide, the expiration of options and futures pulls the stock market into a cycle of volatility. Money is either flowing into or out of the market. Look at it this way: if people are waiting outside of your restaurant maybe you can raise your prices. If no one enters maybe you should look to get into another business.
One other aspect about the importance of March's Triple Witching is the point that it is so close to the end of the month which happens to be the end of the first quarter. I believe whatever the direction the market takes because of the results on Friday, it will be a "tell" of the market. By the way the Monday of that week should give trader's a heads up as volume is generally higher in this week on Monday.
If you are keeping score, January was down and February was up. This is the "rubber game"in the series. The verdict of Triple Witching, I believe will be the market's direction for the remainder of 2014.
Liars and Crooks: Goes to President Obama who called his critics of his Affordable Care Act, unfounded. He said, "you can keep your policy, if you like your coverage." Well, lo and behold! You cannot keep your old policy and now, the president has given anyone who had an old policy, a two year extension. When the dust settles by the sign-up date of 31 March 2014, everyone will be accounted for even if the category is under exemption.
Tuesday, March 4, 2014
Real Estate and the Three Little Pigs...Comentary
Do you remember the fable story of the three little pigs? They had a fear of the wolf and each sought a safe shelter. The problem is you need enough resources to afford a mortgage, the purchase price must be within your means and since your wages determine your means, you need a safe, reliable income to cover the mortgage and home price.
The first pig had none of the above. He knew how to build, but all he could gather was hay. After he built his house, the wolf came to his door. Laughing, the wolf blew down the house. The pig fled to his friend who had built a house out of sticks. The wolf followed the first pig to the second house. Again, he huffed and puffed and blew down the home. Now, the two pigs ran to their friend who had enough resources to build a safe house made of bricks. No matter how hard the wolf tried, he could not get into the third house. The moral of this story is two-fold. One, real estate's principal rule is location, location, location. The other rule is have enough resources to cover the three aspects in home purchasing.
This dear reader, this takes us to the present state in home real estate in the US market. There are many ways to enter the discussion, but keep in mind that shelter is the most expensive purchase one can make in our consumer economy. If it is true that 70% of our economy is consumer related, then housing is crucial to its foundation. When one buys a home, that person effects many aspects to our economy. That house needed a roofer who needed supplies. It needed a plumber who needed supplies. It needed an electrician who needed supplies and so-on and so-on. Even if the home is a resale, repairs will be needed maybe furniture, maybe appliances. Insurance will be needed. Taxes will flow into the local government. Maybe the buyer has kids. Schools will be important. Maybe public transportation or good roads to get to work. See how things are related? By the way no one questions the makeover from our industrial manufacturing society into a service orientated one. How could they? Manufacturing only represents 12% of the economy and it only provides jobs for 7% of the population. Together, this leads to our present market.
Prices Up!
Home prices have been growing since March of 2009 with a big 12% rise in 2013. New home sales surged 9.6% in the latest monthly report. This is the highest since 2008 and the supply of homes on the market is down to 4.7 months supply. What is never discussed is the fact that buyers drop their plans to buy. They cancel their contact for various reasons with the number one being affordability which is usually due to rising interest rates. Cancellation of contracts for builders was 24% in 2013. The stock market rises on news of home sales, but investors forget that almost one-quarter of sales fail. Another aspect that investors overlook is the fact that the same people who were in real estate prior to the crisis are the same people today. For example, how about David Lereah of the National Association of Realtors. In a report by Bookrate .com back in 2006 he said,"these historically high home-price gains are the simple result of more buyers than sellers in the market. The good news is the supply of homes on the market has been up and we are entering a period of more normal balance in supply and demand."
The next question is how many homes was built in that year? The average was 1.5 million prior to the crash in 2008. Today, builders only start around 478,000 homes. I'd say that is one big drop from the previous average.
How about Thomas Stevens, president of the NAR. He said this in 2007 at the dawn of the crisis,"the softening of the housing market doesn't mean home values will plummet. Housing values will keep at a high plateau because of consumer demand for housing." He later added this,"children of the baby boom generation, often called echo boomers are the second largest generation in US history. They, along with a strong immigrant impact, and the boomers themselves who remain in peak earning years, means housing will stay strong over the next decade and long-term prices will continue to rise." Talk about putting a foot in your mouth, but then again, these are the shills that influence everyone. I'm here to remind you that housing does not always rise and if you look at all the ways the market has been manipulated, I would wait for this new housing bubble to pop before you seek your dream home.
Stacked Deck
The government instituted rules for mortgage modification, so the market was not inundated with foreclosures. They helped sellers by waving the IRS rules of passive income on all short sales. They passed programs like HARP(Home Affordable Refinance Plan). This plan will possibly expire on December 31, 2015. It will allow a home owner to refinance his home at below market interest rates even his his home-to-value is 125%. It can save the owner on average $250 a month. More money for him to spend in the economy.
Of course, the Fed had the backs of big banking. Their QE programs bought toxic mortgages from the banks, not to mention the TALF program which refinanced the banks at the present .25% and then, the banks buy treasuries which gives them easy money. The government added help by suspending the FASB(Financial Accounting Standards Board)rules so the banks balance sheets would pass the phony stress tests to give confidence to the consumer. These rules affect market-to-market prices, so the banks do not have to show the decline in value of the homes in their loan portfolio. They had their shills in the media to sway opinion about the safe haven of gold. Don't buy gold! Our banking system is solid! Together, they have done everything that they could think of to re inflate the housing market. Got to give them credit. They have succeeded, but they never admit that they are wrong. They will always throw money at a problem like the $3.9t budget that Obama introduced today. The budget offers no solutions for our economy. It is a political party rallying agenda in this an election year. If it had any merit the HMI, home-builders index would rise. Keep an eye on it as any number below 50 indicates serious problems. The president says his budget will get the GDP to 3% this year. He got a second motion from Bernanke who was in some conference somewhere. This will be the third straight year that these two phonies make that prediction. In reality GDP has never reached 3% and it has declined for the past three years in a row.
As I stated many times, our leaders never see a crisis forming until it hits them in the face which is especially true of home builders who have increased spending this year to the tune of 9.3%.
Here are some reasons to worry. Interest rates are rising. Big negative! Builders make houses which adds to a local population. This makes more demand for water, roads, schools,etc., however builders don't help with those demands. They take their money and leave. Growing problem!
Affordability is shrinking. There are many locations that ordinary people cannot afford to purchase like San Fran, LA, New York, Seattle, Portland, Denver and anything along water like our entire coast. Cities are in trouble for many reasons. Everyone knows about Detroit, but did you realize that Philadelphia has 28% of its population in poverty. Anyone in that location just lost a big chuck of buyers. Oh yea, over 46 million or 14% of the population on food stamps!
Wages are flat and if you count inflation, there goes almost all the initial buyers in the pyramid of housing from lower cost to higher cost. People, if no buyers are entering your sellers living room, there will be no movement in the garage.
Bottom line: There will be another housing crisis. If you plan to buy, I would wait for the dust to settle and go for the brick house in a good location. I may wear glasses for driving, but I won't need hindsight to see that before the year 2020, the US national deficit will hit $20trillion. Obama is building a house made of paper.
Cometary:I recall the words of wisdom from the movie, The Good, The Bad, And The Ugly. I use this part of the culture since we just had Oscar week. The good says to the ugly, "there are two kinds of people in the world. Those with loaded guns and those who dig" This past week the Ukrainian people found out that they are diggers and Russia has the loaded gun. The US has a loaded gun that we forced Iran and Afghanistan to dig. There is also a corollary in that within these same countries their population end up as diggers for a corrupt government. End the Fed!
The first pig had none of the above. He knew how to build, but all he could gather was hay. After he built his house, the wolf came to his door. Laughing, the wolf blew down the house. The pig fled to his friend who had built a house out of sticks. The wolf followed the first pig to the second house. Again, he huffed and puffed and blew down the home. Now, the two pigs ran to their friend who had enough resources to build a safe house made of bricks. No matter how hard the wolf tried, he could not get into the third house. The moral of this story is two-fold. One, real estate's principal rule is location, location, location. The other rule is have enough resources to cover the three aspects in home purchasing.
This dear reader, this takes us to the present state in home real estate in the US market. There are many ways to enter the discussion, but keep in mind that shelter is the most expensive purchase one can make in our consumer economy. If it is true that 70% of our economy is consumer related, then housing is crucial to its foundation. When one buys a home, that person effects many aspects to our economy. That house needed a roofer who needed supplies. It needed a plumber who needed supplies. It needed an electrician who needed supplies and so-on and so-on. Even if the home is a resale, repairs will be needed maybe furniture, maybe appliances. Insurance will be needed. Taxes will flow into the local government. Maybe the buyer has kids. Schools will be important. Maybe public transportation or good roads to get to work. See how things are related? By the way no one questions the makeover from our industrial manufacturing society into a service orientated one. How could they? Manufacturing only represents 12% of the economy and it only provides jobs for 7% of the population. Together, this leads to our present market.
Prices Up!
Home prices have been growing since March of 2009 with a big 12% rise in 2013. New home sales surged 9.6% in the latest monthly report. This is the highest since 2008 and the supply of homes on the market is down to 4.7 months supply. What is never discussed is the fact that buyers drop their plans to buy. They cancel their contact for various reasons with the number one being affordability which is usually due to rising interest rates. Cancellation of contracts for builders was 24% in 2013. The stock market rises on news of home sales, but investors forget that almost one-quarter of sales fail. Another aspect that investors overlook is the fact that the same people who were in real estate prior to the crisis are the same people today. For example, how about David Lereah of the National Association of Realtors. In a report by Bookrate .com back in 2006 he said,"these historically high home-price gains are the simple result of more buyers than sellers in the market. The good news is the supply of homes on the market has been up and we are entering a period of more normal balance in supply and demand."
The next question is how many homes was built in that year? The average was 1.5 million prior to the crash in 2008. Today, builders only start around 478,000 homes. I'd say that is one big drop from the previous average.
How about Thomas Stevens, president of the NAR. He said this in 2007 at the dawn of the crisis,"the softening of the housing market doesn't mean home values will plummet. Housing values will keep at a high plateau because of consumer demand for housing." He later added this,"children of the baby boom generation, often called echo boomers are the second largest generation in US history. They, along with a strong immigrant impact, and the boomers themselves who remain in peak earning years, means housing will stay strong over the next decade and long-term prices will continue to rise." Talk about putting a foot in your mouth, but then again, these are the shills that influence everyone. I'm here to remind you that housing does not always rise and if you look at all the ways the market has been manipulated, I would wait for this new housing bubble to pop before you seek your dream home.
Stacked Deck
The government instituted rules for mortgage modification, so the market was not inundated with foreclosures. They helped sellers by waving the IRS rules of passive income on all short sales. They passed programs like HARP(Home Affordable Refinance Plan). This plan will possibly expire on December 31, 2015. It will allow a home owner to refinance his home at below market interest rates even his his home-to-value is 125%. It can save the owner on average $250 a month. More money for him to spend in the economy.
Of course, the Fed had the backs of big banking. Their QE programs bought toxic mortgages from the banks, not to mention the TALF program which refinanced the banks at the present .25% and then, the banks buy treasuries which gives them easy money. The government added help by suspending the FASB(Financial Accounting Standards Board)rules so the banks balance sheets would pass the phony stress tests to give confidence to the consumer. These rules affect market-to-market prices, so the banks do not have to show the decline in value of the homes in their loan portfolio. They had their shills in the media to sway opinion about the safe haven of gold. Don't buy gold! Our banking system is solid! Together, they have done everything that they could think of to re inflate the housing market. Got to give them credit. They have succeeded, but they never admit that they are wrong. They will always throw money at a problem like the $3.9t budget that Obama introduced today. The budget offers no solutions for our economy. It is a political party rallying agenda in this an election year. If it had any merit the HMI, home-builders index would rise. Keep an eye on it as any number below 50 indicates serious problems. The president says his budget will get the GDP to 3% this year. He got a second motion from Bernanke who was in some conference somewhere. This will be the third straight year that these two phonies make that prediction. In reality GDP has never reached 3% and it has declined for the past three years in a row.
As I stated many times, our leaders never see a crisis forming until it hits them in the face which is especially true of home builders who have increased spending this year to the tune of 9.3%.
Here are some reasons to worry. Interest rates are rising. Big negative! Builders make houses which adds to a local population. This makes more demand for water, roads, schools,etc., however builders don't help with those demands. They take their money and leave. Growing problem!
Affordability is shrinking. There are many locations that ordinary people cannot afford to purchase like San Fran, LA, New York, Seattle, Portland, Denver and anything along water like our entire coast. Cities are in trouble for many reasons. Everyone knows about Detroit, but did you realize that Philadelphia has 28% of its population in poverty. Anyone in that location just lost a big chuck of buyers. Oh yea, over 46 million or 14% of the population on food stamps!
Wages are flat and if you count inflation, there goes almost all the initial buyers in the pyramid of housing from lower cost to higher cost. People, if no buyers are entering your sellers living room, there will be no movement in the garage.
Bottom line: There will be another housing crisis. If you plan to buy, I would wait for the dust to settle and go for the brick house in a good location. I may wear glasses for driving, but I won't need hindsight to see that before the year 2020, the US national deficit will hit $20trillion. Obama is building a house made of paper.
Cometary:I recall the words of wisdom from the movie, The Good, The Bad, And The Ugly. I use this part of the culture since we just had Oscar week. The good says to the ugly, "there are two kinds of people in the world. Those with loaded guns and those who dig" This past week the Ukrainian people found out that they are diggers and Russia has the loaded gun. The US has a loaded gun that we forced Iran and Afghanistan to dig. There is also a corollary in that within these same countries their population end up as diggers for a corrupt government. End the Fed!
Wednesday, February 26, 2014
GDP: More Manipulation Than Production...L&C
Gross Domestic Product(GDP)is an output number reflecting the health of a economy. The problem is not only the present state of the measures to which it contains, but the additions of fluff that is used to add to the distorted picture. There is very little concrete in this building, no steel and built on muck. Jean-Baptiste Say, the famous French economist had GDP covered with his "Say Law," when he stated, "supply(production) creates its own demand." You produce something. You have wealth and your options multiply with it.
The final determination of GDP is tied to an adjustment for inflation. This final figure is based on the equally manipulated Consumer Price Index(CPI)whose core does not include food and energy, the only two components that society needs on a daily basis. This so-called "core" is also adjusted every few years to add or subtract elements that are trending up or down. Guess which trend they use? Can you say, chain-index?
GDP started out as Gross National Product(GNP)during WWII, when it measured wartime production capacity. It was never intended to be used as a measure of the countries' economic well-being. It takes center-fold today because its purpose is to bestow confidence in the public that your government knows what it is doing. If things are not going well, we will fix it. This innuendo confers that the government is aware. This adds comfort to all who buy bonds which is the real purpose of GDP manipulation. The increases in GDP demonstrate that the government policies work and your invested money in bonds is safe.
Rule Writing
definitions of GDP is the sum total of the monetary value of all final goods and services bought and sold within US borders in a given year. One important distinction between GDP & GNP is this: present rules include foreign ownership of factories like a Honda plant in Ohio or a BMW plant in North Carolina as part of the US GDP, while GNP would not include foreign companies, but only US firms whether here or aboard. If we keep out-sourcing, I can see the day where GNP could be higher than GDP and then, bye-bye GDP and hello, GNP.
One of the ugly parts of the present make-up of GDP is that it makes no effort to distinguish between transactions that benefit the nation's health and those that subtract from it like NAFTA. Ross Perot was right, that "sucking sound" is jobs leaving the country. Under this trade pack for example, the main parts of a refrigerator are made in Mexico, while only assembled in the US. We lose the factories. We eat crumbs! Don't believe that? We lost 40,000 factories since NAFTA began. Like I stated in my unpublished book, "...we got the SHAFTA!" By the way Obama wants a new trade pack called, TPP which includes Vietnam who has wages at .28 cents an hour and he says he is for jobs, but not where they will be located!
Gets Worse
Another negative aspect is every transaction that takes place anywhere is classified as progress. Hurricane Sandy added to GDP despite the tragic losses because rebuilding, repair of infrastructure, medical costs, et.al., were needed. No one argues that these unexpected expenses subtract from GDP or does anyone consider that those expenses could have been used for other necessary projects like bridge repair, water safety or any other public need to which have been delayed unless the bridge collapses.
The monetary aspect gets worse because it ignores everything that doesn't take place under the confines of monetary trade. A housewife performs duties of caring for the home, maybe children, maybe relatives, but no value gets assigned. However, if someone is hired to do this work, then it counts.
GDP never reflects income gaps. It only counts totals even if one person controlled everything!
Toxic spills like in the Gulf not only adds to GDP, it does it in many ways. They count the depletion of resources, the accident and then, the cleanup.
The US includes money borrowed, but does not put aside the liability of this debt to be repaid later.
Many of the features of GDP are arbitrary like a free checking account because it adds value. They then use this concept of value to manipulate like Upton Sinclair once stated about these bureaucrats," It is difficult to get a man to understand something when his salary depends upon his not understanding it."
Don't believe that? Try this! The government says the total of all computer sales for the year was $100b , however these new computers are 10x the speed of existing computers, so that means the value added is $1 trillion.(10 times 100) Last year GDP included all entertainment costs even though these companies may try five new TV pilots with only one making it to broadcast and it could be a flop!
This is so fake, so deceptive, it is criminal! Get Real!
Real wealth-producing components of GDP(manufacturing, mining, et.al.)have been shrinking in their percentages for fifty years. Our economy is like a Blues Brothers "Wish Sandwich," you have two pieces of bread and you wish you had something to put in it.
For those of you that say this is wrong because GDP grew 265% from 1980 to 2000, reflecting a higher standard of living. Well, my friend, this rise in living is in the stock market only which has also grown over 1000% during the same span. Consider this: would you value something that is 4x expensive than what everything is worth? Before you answer, the market is even higher today. GDP only grew with all the government stimulus I might add, 2.8% in 2012 and 1.9% in 2013 with both being over projected but not achieved and the market shot up 28% in 2013. Are you still buying? Can you spell, bubble?
Liars and Crooks:goes to the Texas Railroad Commission who regulate the oil and gas industry within the state. There were 300 complaints. The commission found 164 violations, and get this, only 2 fines levied. Get out of town!
The final determination of GDP is tied to an adjustment for inflation. This final figure is based on the equally manipulated Consumer Price Index(CPI)whose core does not include food and energy, the only two components that society needs on a daily basis. This so-called "core" is also adjusted every few years to add or subtract elements that are trending up or down. Guess which trend they use? Can you say, chain-index?
GDP started out as Gross National Product(GNP)during WWII, when it measured wartime production capacity. It was never intended to be used as a measure of the countries' economic well-being. It takes center-fold today because its purpose is to bestow confidence in the public that your government knows what it is doing. If things are not going well, we will fix it. This innuendo confers that the government is aware. This adds comfort to all who buy bonds which is the real purpose of GDP manipulation. The increases in GDP demonstrate that the government policies work and your invested money in bonds is safe.
Rule Writing
definitions of GDP is the sum total of the monetary value of all final goods and services bought and sold within US borders in a given year. One important distinction between GDP & GNP is this: present rules include foreign ownership of factories like a Honda plant in Ohio or a BMW plant in North Carolina as part of the US GDP, while GNP would not include foreign companies, but only US firms whether here or aboard. If we keep out-sourcing, I can see the day where GNP could be higher than GDP and then, bye-bye GDP and hello, GNP.
One of the ugly parts of the present make-up of GDP is that it makes no effort to distinguish between transactions that benefit the nation's health and those that subtract from it like NAFTA. Ross Perot was right, that "sucking sound" is jobs leaving the country. Under this trade pack for example, the main parts of a refrigerator are made in Mexico, while only assembled in the US. We lose the factories. We eat crumbs! Don't believe that? We lost 40,000 factories since NAFTA began. Like I stated in my unpublished book, "...we got the SHAFTA!" By the way Obama wants a new trade pack called, TPP which includes Vietnam who has wages at .28 cents an hour and he says he is for jobs, but not where they will be located!
Gets Worse
Another negative aspect is every transaction that takes place anywhere is classified as progress. Hurricane Sandy added to GDP despite the tragic losses because rebuilding, repair of infrastructure, medical costs, et.al., were needed. No one argues that these unexpected expenses subtract from GDP or does anyone consider that those expenses could have been used for other necessary projects like bridge repair, water safety or any other public need to which have been delayed unless the bridge collapses.
The monetary aspect gets worse because it ignores everything that doesn't take place under the confines of monetary trade. A housewife performs duties of caring for the home, maybe children, maybe relatives, but no value gets assigned. However, if someone is hired to do this work, then it counts.
GDP never reflects income gaps. It only counts totals even if one person controlled everything!
Toxic spills like in the Gulf not only adds to GDP, it does it in many ways. They count the depletion of resources, the accident and then, the cleanup.
The US includes money borrowed, but does not put aside the liability of this debt to be repaid later.
Many of the features of GDP are arbitrary like a free checking account because it adds value. They then use this concept of value to manipulate like Upton Sinclair once stated about these bureaucrats," It is difficult to get a man to understand something when his salary depends upon his not understanding it."
Don't believe that? Try this! The government says the total of all computer sales for the year was $100b , however these new computers are 10x the speed of existing computers, so that means the value added is $1 trillion.(10 times 100) Last year GDP included all entertainment costs even though these companies may try five new TV pilots with only one making it to broadcast and it could be a flop!
This is so fake, so deceptive, it is criminal! Get Real!
Real wealth-producing components of GDP(manufacturing, mining, et.al.)have been shrinking in their percentages for fifty years. Our economy is like a Blues Brothers "Wish Sandwich," you have two pieces of bread and you wish you had something to put in it.
For those of you that say this is wrong because GDP grew 265% from 1980 to 2000, reflecting a higher standard of living. Well, my friend, this rise in living is in the stock market only which has also grown over 1000% during the same span. Consider this: would you value something that is 4x expensive than what everything is worth? Before you answer, the market is even higher today. GDP only grew with all the government stimulus I might add, 2.8% in 2012 and 1.9% in 2013 with both being over projected but not achieved and the market shot up 28% in 2013. Are you still buying? Can you spell, bubble?
Liars and Crooks:goes to the Texas Railroad Commission who regulate the oil and gas industry within the state. There were 300 complaints. The commission found 164 violations, and get this, only 2 fines levied. Get out of town!
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