The warmer weather has calmed nerves pertaining to the coronavirus, however it appears that the early fatality estimates of 100,000 will be correct. The other disturbing aspect will be the 1.5 million cases in the US and probably, 5 million worldwide. The real sad aspect of this virus will be the severe hit to our economy and to the global economy. In our small world as individuals, we only are aware of how the virus effects us. If you lost your job, this is not a recession, but a depression. If your job was not effected like a police officer and your health is fine, you might think all this is an overreaction? It isn't.
Work behind the scenes
There are many groups and firms out there that seek data like Cambridge Analytica, who sold our privacy data to Facebook. There are many others like Salesforce, Cloudera and Teradata. Sometimes we catch a break and are privy to this info. I have two which will shed some light on the darkness of this disease.
According to James Beard Foundation as many as 80% of restaurants that are currently closed, may never reopen. Dear Reader, there are 16 million people who are employed in this field.
A poll conducted by Weiss, an investment firm asked small business owners if they expect to fold before the end of the year. 52% said, "YES!" This represents another 16 million companies to which many more thousands of jobs will be lost along with their production and lost of revenue for local government. In addition, whomever supplied them with items that were necessary to produce a product will see this shrinkage in demand. This is how all things are connected.
Related aspect...
Black Knight reports that 3.8 million homeowners are one month or more behind in paying their mortgage. We will get a government report on this come Monday. This could confirm, reject or get worse. Sorry. The data is a lagged stat. There isn't a revealed figure for 2020. Nevertheless...
The other financial problem is the 40 million of us who rent. The call for rent strikes is being heard and small landlords fear their little empire could be crushed as they receive from Peter (renters) to pay Paul (banks). US households are holding record debt of 14.3 trillion and many are adding to this by borrowing from their credit cards to pay rent, utilities and purchase food. There are millions of people out there who are entitled to unemployment and as of yet, they have not received one check. It gets worse when you read the garbage put out by the Labor Bureau concerning the unemployment numbers. They say unemployment is 14.7%. It is ten points higher!
This does not mean that they put out lies. It is like the old expression, "Garbage in, garbage out."
For example, Florida has a population of 21.67 million. It is the 3rd largest state by population. Now, follow this thinking. Florida put out its unemployment figure last week. It says that it has only 416,000 unemployed. This is pure BS! Why, you ask? Because if the labor department is correct with 33 million citizens being unemployed, this comes to a one in five ratio. Now, go back to Florida's report. Let's say one-half of Florida's population was working. Using the same ratio, we arrive at 2 million plus unemployed. That should be the minimum figure. It is probably way, way more. Florida is a service state with its jobs. It relies on tourism. Orlando is the tourist capitol. It has Disney, Universal and Sea World. They are all closed! The reason for the phony report of 416K is because no one can get through to the unemployment office to file a claim. The other side of the picture is the staff at Florida's office is understaffed. You get the same stories all across the nation and most notably, from Red States. The one report that the labor department had right concerned truckers. These over-the-road haulers move 70% of merchandise. The report says 88,300 truckers were laid off. People, it gets worse as the disease has already claimed the following firms. Going out of business signs are being posted on a daily occurrence. Keep in mind that every company employs thousands and yet, the stock market keeps climbing. They are wrong and coming, very soon will be a record down day in the market as they take their blinders off.
Bankruptcy Call (so far for 2020):
Diamond Offshore Drilling Eco-Stim Energy Solution
BlackRidge Technology International Whitney Petroleum
Real Good Solar Foresight Energy
Valeritas Holdings United Cannabis
J. Crew LSC Communication
Pier I Imports McClatchy
McDermott International Stealth Technologies
Globe Photos Pioneer Energy Services
Frontier Communications Omagine
Yuma Energy Generation Zone
Carbo Ceramics Broad Vision
Quorum Health Neiman Marcus
Helios and Matheson Analytics Souplantation
many, many more to come...
Litigation Nation
Ambulance chasers are out in full force. When the danger of the virus passes, the new danger of lawyers will be even more disastrous. There will be suits against hospitals, governors, the president, manufacturers and any business that remained open with sick people on site. The list and reasons will be as long as the number of cases which are well over a million. There are already cases where pastors versus their state. Nurses and retail workers for not providing a safe workplace. College students seeking reimbursement of tuition for cancelled classes. Insurance firms that sought ways out of paying claims. Airlines for not refunding ticket costs due to canceled flights. Sport vendors due to cancelled games. The CARES Act because it declares that their loans are forgivable and yet, banks seek payment. How about this one? Illegals are suing for stimulus checks for their children who were born in the US which makes them citizens. They want a check!
The stock market has yet to realize this aspect. Just like the government, they cannot see farther than their nose. The only good news that I have to offer is this: the night is followed by dawn...Peace.
Wednesday, May 13, 2020
Wednesday, May 6, 2020
OIL: Where is it going?
Long before the pandemic of the virus hit the world, it was drowning in a pool of excess oil. The oil index ($XOI) declined 500 points in 2018 from 1600 level to a low in December of that year. Then, it was range bound from the lows of 1100 to a high around 1300 until February of this year.
60% decline
Yes, in one month the index fell below 500 from the 1300 level. The flu arrived and it showed its effects. Since that dangerous level, it has staged a rally, if you want to call reaching the 800 point level a rally. It is like a baseball game (since this would be that season) where you are losing 12 to nothing. Then, your team scores six runs to make the final look competitive. It wasn't. It was a rout.
Asset value
At its present price, oil is trading below its asset worth. What does this mean, you ask? Could it go lower? These are good questions. It means that to find and produce a barrel of oil, a certain level of investment is required. Remember, we all need energy every day and oil with its by-products are in many, many consumer items. In a way, it is almost like water at least to our way of life. We have to have it. The present price of crude on Friday was $19.78 for US sweet and $26.44 for Brent sour. No oil firm can survive with those prices.
If you believe that market price tests its high as well as its lows, then we have tested the 1969 lows just prior to the first Arab Oil Embargo. You can do the math, but keep in mind the value of the dollar has declined due to inflationary forces and debt. Also, state and federal taxes have been increased. Charting is a necessary tool.
So, what price should it be?
Basically, oil has too much invested in it by too many influential firms, people and nations to disappear. It is the world's most important commodity for the present deviation to radically change its need and importance. When all is said and done, oil should trade from $42 to $64. However, many price changes will occur before that stability is reached. Then, one must consider the rise of electric cars into the equation. At the moment, every oil firm and producer is cutting back production to minimize the losses because oil is selling for less than it costs to produce.
In related industries, both the trucking and airlines lockdown has deepened the hurt for oil firms. The need for trucking has declined considerably. Flightrader 24 reports the number global flights for April was 33,500. The normal number is around 100,000 flights per month. Together, this lack of demand has added to the glut. This will take time to change, especially with public demand.
A closer look...
Exxon reported its first losing quarter since 1997. As a result they are cutting spending by 30%. They are not alone. The other American giant, Chevron also announced it is cutting spending. However, both firms declared that their dividend is safe. This will add some stability for its share price. The two big boys were joined by another conglomerate, Conoco-Phillips. Together, the three will trim production by 600K barrels a day this month. Exxon and Chevron will cut production another 800K barrels a day in June. This is a serious decline in energy. When you add the agreement between Russia and OPEC to cut production, the present oil glut will be razor cut, little-by-little. Global usage was about 100 million barrels a day before the virus. It dropped 30 million barrels in April.
These production cuts take time for their effect. If the world economy begins to racket up by December along with the US and Chinese economies, I foresee another oil spike come next early in 2021. Why? Because the demand will exceed the supply. You should know this from the recent financial crisis of 2008. The playbook of production cuts work, but it comes with a heavy price.
In the meantime, as stated, there will be many obstacles to climb Mt. Normalcy before stability returns. For instance, Royal Dutch Schell announced a dividend cut from 47 cents down to 16 cents. Sweden's giant, Equinor eliminated its first quarter dividend. Many, many other smaller firms have cut their dividend completely. This will continue to wreck oil share prices. Even with all producers seeking to trim production, Mt. Normalcy has other roadblocks like bankruptcies (WLL-Whiting), job cuts and possible consolidation. I think the last point is a positive. Acquisition is cheaper than exploration. Estimates of capital expenditures is around a whopping $100 billion for 2020.
World suppliers in seeking to cut production will find it harder than US firms. They have sharing agreements (UK and Sweden), government partners (socialist nations) and unions. Yes! At least they respect workers rights, especially skilled workers in this field. However, this respect has a costs.
Deep Water Rigs
Any driller of offshore wells faces a serious dilemma. By shutting down these wells, it means a total loss of investment. Even though the driller knows there is oil, the process needs to begin all over again to capture that oil.
The rigs on land do not have this problem. They are closer to a light switch. They can be shuttered and reopened with little investment costs. There are also many firms who hedged their production like my favorite, Encana now called Ovintiv (hate that name). They should survive. If you speculate, the big boys will have no trouble surviving this downturn and they come with a dividend. I would wait until a better perspective is known about the virus and its possible second wave. Don't let that stimulus check burn a hole in your pocket - save it or pay off personal debts. Peace.
60% decline
Yes, in one month the index fell below 500 from the 1300 level. The flu arrived and it showed its effects. Since that dangerous level, it has staged a rally, if you want to call reaching the 800 point level a rally. It is like a baseball game (since this would be that season) where you are losing 12 to nothing. Then, your team scores six runs to make the final look competitive. It wasn't. It was a rout.
Asset value
At its present price, oil is trading below its asset worth. What does this mean, you ask? Could it go lower? These are good questions. It means that to find and produce a barrel of oil, a certain level of investment is required. Remember, we all need energy every day and oil with its by-products are in many, many consumer items. In a way, it is almost like water at least to our way of life. We have to have it. The present price of crude on Friday was $19.78 for US sweet and $26.44 for Brent sour. No oil firm can survive with those prices.
If you believe that market price tests its high as well as its lows, then we have tested the 1969 lows just prior to the first Arab Oil Embargo. You can do the math, but keep in mind the value of the dollar has declined due to inflationary forces and debt. Also, state and federal taxes have been increased. Charting is a necessary tool.
So, what price should it be?
Basically, oil has too much invested in it by too many influential firms, people and nations to disappear. It is the world's most important commodity for the present deviation to radically change its need and importance. When all is said and done, oil should trade from $42 to $64. However, many price changes will occur before that stability is reached. Then, one must consider the rise of electric cars into the equation. At the moment, every oil firm and producer is cutting back production to minimize the losses because oil is selling for less than it costs to produce.
In related industries, both the trucking and airlines lockdown has deepened the hurt for oil firms. The need for trucking has declined considerably. Flightrader 24 reports the number global flights for April was 33,500. The normal number is around 100,000 flights per month. Together, this lack of demand has added to the glut. This will take time to change, especially with public demand.
A closer look...
Exxon reported its first losing quarter since 1997. As a result they are cutting spending by 30%. They are not alone. The other American giant, Chevron also announced it is cutting spending. However, both firms declared that their dividend is safe. This will add some stability for its share price. The two big boys were joined by another conglomerate, Conoco-Phillips. Together, the three will trim production by 600K barrels a day this month. Exxon and Chevron will cut production another 800K barrels a day in June. This is a serious decline in energy. When you add the agreement between Russia and OPEC to cut production, the present oil glut will be razor cut, little-by-little. Global usage was about 100 million barrels a day before the virus. It dropped 30 million barrels in April.
These production cuts take time for their effect. If the world economy begins to racket up by December along with the US and Chinese economies, I foresee another oil spike come next early in 2021. Why? Because the demand will exceed the supply. You should know this from the recent financial crisis of 2008. The playbook of production cuts work, but it comes with a heavy price.
In the meantime, as stated, there will be many obstacles to climb Mt. Normalcy before stability returns. For instance, Royal Dutch Schell announced a dividend cut from 47 cents down to 16 cents. Sweden's giant, Equinor eliminated its first quarter dividend. Many, many other smaller firms have cut their dividend completely. This will continue to wreck oil share prices. Even with all producers seeking to trim production, Mt. Normalcy has other roadblocks like bankruptcies (WLL-Whiting), job cuts and possible consolidation. I think the last point is a positive. Acquisition is cheaper than exploration. Estimates of capital expenditures is around a whopping $100 billion for 2020.
World suppliers in seeking to cut production will find it harder than US firms. They have sharing agreements (UK and Sweden), government partners (socialist nations) and unions. Yes! At least they respect workers rights, especially skilled workers in this field. However, this respect has a costs.
Deep Water Rigs
Any driller of offshore wells faces a serious dilemma. By shutting down these wells, it means a total loss of investment. Even though the driller knows there is oil, the process needs to begin all over again to capture that oil.
The rigs on land do not have this problem. They are closer to a light switch. They can be shuttered and reopened with little investment costs. There are also many firms who hedged their production like my favorite, Encana now called Ovintiv (hate that name). They should survive. If you speculate, the big boys will have no trouble surviving this downturn and they come with a dividend. I would wait until a better perspective is known about the virus and its possible second wave. Don't let that stimulus check burn a hole in your pocket - save it or pay off personal debts. Peace.
Wednesday, April 29, 2020
Odds and Ends: April 2020
"To error is human, to forgive, divine."
- Alexander Pope
As the warm weather approaches, fortunately for all of us, the flu season will pass. What will linger is the wrangling for power within the government, Monday Morning Quarterbacking. In hindsight, we all should win the Super Bowl, but our two political parties are capable of ruining a wet dream.
We will hear that President Trump waited too long to enact a policy of prevention. He will counter that China hid the damage of contagion. He will lash out at experts, pundits and Democrats like a real estate agent taking any and all listings. If he puts enough on the wall, one may sell. This is the presidents position. The Democrats will basically do the same process. The only difference will be the names. They will fault the president and the Republican senate. They will cry about the allocation of the stimulus. They will produce new "experts" who will suggest that the administration took the wrong approach. This is why our government sucks! No one seeks what is best for the nation. No one enacts like Profiles in Courage.
Dear Reader, there was no playbook for this situation. My earlier comments and feeling was that the government overreacted. Now, I'm thinking, "It is always better to be safe than sorry." Let us all thank God that the virus was not as bad as everyone feared. It is time to move on.
The problem is what remains of our economy and life situation. My position was and still is the same. We need to protect workers. Globalization is another word for taking from America and giving our wealth to the world. Well, world, we have nothing left to give. Did you not see the lines of our citizens at food banks? Our jobs only produce enough to last until the next paycheck. It is true that we live above our means, but these last two crisis's have opened our minds. We will cut video streaming. We will live a more simple life and we will put something away for a rainy day. With that said, we should also demand that things be produced once again in America. We have nothing! We produce nothing! The supply chains revealed this aspect. We need to be self-sustaining once again. We need to return to our manufacturing roots that provide a livable wage. This will stop the climb of poverty and homelessness along with the new fear of food insecurity.
Where we are now...
With that said, let us look at conditions as the S&P ratings service does. From their viewpoint we are in trouble. Sebastian reminds us that mortgage debt fueled the crisis of 2008. The S&P worries that corporate debt could fuel a new crisis. They say that corporations have been borrowing up at a 75% clip. US firms now owe a record $10 trillion. Their credit quality is at an all-time low. They have downgraded more companies in the first quarter than ever before. In the financial crisis of 2008 the S&P downgraded a total of 1500 companies. In the first three months of 2020, they have already downgraded 1270 firms.
This cannot all be laid at the foot of the virus. Last year and looking ahead into this year, S&P ratings predicted a higher level of defaults. It put the percentage at 3.3%. Now, it is revised up to 10%.
It gets worse...
By the end of this year, S&P sees the rate of defaults climbing over 13%. If this happens, defaults will break a 40-year record to the negative side. Not good.
Quick Oil Lesson
The contract to purchase oil did something no one would ever predict: it went negative in value.
How can this be, you ask? People, there are two contracts for oil. The US contract and the European contract. There is a big difference between them. When the American contract expires, the holder of the contract agrees to take possession of the quantity of oil. No one has the ability at this moment to store oil, especially with declining prices and outlook. This is why speculators were dumping contracts.
Think about this? If you had a storage facility, you could have taken possession of oil for free and received payment to do so. I think of these things, but I lack the money to enact the ideas.
The Brent oil contract is ended in a cash solution. The pluses and minuses are calculated. It is no different than buying and selling a stock, just much, mucho bigger numbers.
However, there are other problems with oil. The basics of supply and demand. The demand side is so bad that the most important commodity in the world is trading below its asset value. Could it go lower, you ask? Possibly, but in reality, too much money is invested into this sector for the deviation to radically change its importance and value. The first signs of a return to normalcy will have a huge request that will give oil a trading range until the global economy sets its footprint level.
Does 2% Interest You?
Switzerland, the one time home for gold and now, the land of negative interest rates, just tried an experiment. In an effort to retain its high income, "special" clients who were taking money out of the nation, the Swizz bank piloted a program that offered a 2% interest rate. Guess what? It got oversubscribed. This is the sorry state of the world for savers and one to which central banks machinations has put us.
Speaking of central banks or the devil, the IMF sees the worst world recession since the Great Depression. These are the same people who four months ago said global growth would be 3.3%. They are seeking aid from wealthy nations of $8 trillion to help poor countries in South America, Asia, Africa and the Middle East. Question? If they are a bank, how come they don't give their money to these needy nations? Better yet, ask China to cover the bill, after all, they made the most money from all of their manipulations. Let them show a nicer face to the world. Don't count on that...
SBA
The agency is providing loans to small businesses in America. How about the "poor" NBA? They have cancelled all their games due to the virus. So, they gave a loan of over $4 million to the LA Lakers. Another example how not in touch with reality our government leaders are.
Real Unemployment
The media was making noise about the huge record jump in unemployment numbers (26 million).
They should have looked deeper into the reports from state agencies to the Bureau of Labor Statistics. JFL enlightened us to the reality that states are doing a terrible job with unemployment claims. States have cut back on insurance for workers as well as the agencies that address the claims. It is almost impossible to file a claim on the internet and even worse by phone. Then, there are millions of migrants who were working full-time, but of course, they will not be able to file a claim. JFL figures that there are another13 plus million laid off workers to which makes the total unemployment figure rise to 40 million. Yowzah!
NFL Draft...
was a success before and after. When ABC offered advertising for the event, companies bid more than ABC had slots. They could have raised their fees. The actual event garnered the highest ratings ever for this type of broadcast. We love our football.
- Alexander Pope
As the warm weather approaches, fortunately for all of us, the flu season will pass. What will linger is the wrangling for power within the government, Monday Morning Quarterbacking. In hindsight, we all should win the Super Bowl, but our two political parties are capable of ruining a wet dream.
We will hear that President Trump waited too long to enact a policy of prevention. He will counter that China hid the damage of contagion. He will lash out at experts, pundits and Democrats like a real estate agent taking any and all listings. If he puts enough on the wall, one may sell. This is the presidents position. The Democrats will basically do the same process. The only difference will be the names. They will fault the president and the Republican senate. They will cry about the allocation of the stimulus. They will produce new "experts" who will suggest that the administration took the wrong approach. This is why our government sucks! No one seeks what is best for the nation. No one enacts like Profiles in Courage.
Dear Reader, there was no playbook for this situation. My earlier comments and feeling was that the government overreacted. Now, I'm thinking, "It is always better to be safe than sorry." Let us all thank God that the virus was not as bad as everyone feared. It is time to move on.
The problem is what remains of our economy and life situation. My position was and still is the same. We need to protect workers. Globalization is another word for taking from America and giving our wealth to the world. Well, world, we have nothing left to give. Did you not see the lines of our citizens at food banks? Our jobs only produce enough to last until the next paycheck. It is true that we live above our means, but these last two crisis's have opened our minds. We will cut video streaming. We will live a more simple life and we will put something away for a rainy day. With that said, we should also demand that things be produced once again in America. We have nothing! We produce nothing! The supply chains revealed this aspect. We need to be self-sustaining once again. We need to return to our manufacturing roots that provide a livable wage. This will stop the climb of poverty and homelessness along with the new fear of food insecurity.
Where we are now...
With that said, let us look at conditions as the S&P ratings service does. From their viewpoint we are in trouble. Sebastian reminds us that mortgage debt fueled the crisis of 2008. The S&P worries that corporate debt could fuel a new crisis. They say that corporations have been borrowing up at a 75% clip. US firms now owe a record $10 trillion. Their credit quality is at an all-time low. They have downgraded more companies in the first quarter than ever before. In the financial crisis of 2008 the S&P downgraded a total of 1500 companies. In the first three months of 2020, they have already downgraded 1270 firms.
This cannot all be laid at the foot of the virus. Last year and looking ahead into this year, S&P ratings predicted a higher level of defaults. It put the percentage at 3.3%. Now, it is revised up to 10%.
It gets worse...
By the end of this year, S&P sees the rate of defaults climbing over 13%. If this happens, defaults will break a 40-year record to the negative side. Not good.
Quick Oil Lesson
The contract to purchase oil did something no one would ever predict: it went negative in value.
How can this be, you ask? People, there are two contracts for oil. The US contract and the European contract. There is a big difference between them. When the American contract expires, the holder of the contract agrees to take possession of the quantity of oil. No one has the ability at this moment to store oil, especially with declining prices and outlook. This is why speculators were dumping contracts.
Think about this? If you had a storage facility, you could have taken possession of oil for free and received payment to do so. I think of these things, but I lack the money to enact the ideas.
The Brent oil contract is ended in a cash solution. The pluses and minuses are calculated. It is no different than buying and selling a stock, just much, mucho bigger numbers.
However, there are other problems with oil. The basics of supply and demand. The demand side is so bad that the most important commodity in the world is trading below its asset value. Could it go lower, you ask? Possibly, but in reality, too much money is invested into this sector for the deviation to radically change its importance and value. The first signs of a return to normalcy will have a huge request that will give oil a trading range until the global economy sets its footprint level.
Does 2% Interest You?
Switzerland, the one time home for gold and now, the land of negative interest rates, just tried an experiment. In an effort to retain its high income, "special" clients who were taking money out of the nation, the Swizz bank piloted a program that offered a 2% interest rate. Guess what? It got oversubscribed. This is the sorry state of the world for savers and one to which central banks machinations has put us.
Speaking of central banks or the devil, the IMF sees the worst world recession since the Great Depression. These are the same people who four months ago said global growth would be 3.3%. They are seeking aid from wealthy nations of $8 trillion to help poor countries in South America, Asia, Africa and the Middle East. Question? If they are a bank, how come they don't give their money to these needy nations? Better yet, ask China to cover the bill, after all, they made the most money from all of their manipulations. Let them show a nicer face to the world. Don't count on that...
SBA
The agency is providing loans to small businesses in America. How about the "poor" NBA? They have cancelled all their games due to the virus. So, they gave a loan of over $4 million to the LA Lakers. Another example how not in touch with reality our government leaders are.
Real Unemployment
The media was making noise about the huge record jump in unemployment numbers (26 million).
They should have looked deeper into the reports from state agencies to the Bureau of Labor Statistics. JFL enlightened us to the reality that states are doing a terrible job with unemployment claims. States have cut back on insurance for workers as well as the agencies that address the claims. It is almost impossible to file a claim on the internet and even worse by phone. Then, there are millions of migrants who were working full-time, but of course, they will not be able to file a claim. JFL figures that there are another13 plus million laid off workers to which makes the total unemployment figure rise to 40 million. Yowzah!
NFL Draft...
was a success before and after. When ABC offered advertising for the event, companies bid more than ABC had slots. They could have raised their fees. The actual event garnered the highest ratings ever for this type of broadcast. We love our football.
Wednesday, April 22, 2020
If We Don't Adjust Now, It's Over
There are car lines and people lines all over the nation. Why are they in line? Food insecurity. Inability to put food on the table. Food banks are getting National Guard assistance to hand out food. I could add to that sentence, "For people in need." This is unsustainable. There also appears to be some fraud. When you wait in a car line in a newer model and expensive vehicle, do you really need help? Why, do you say that? Because those people like many Americans live above their means. The decision to purchase a new or newer model car takes away from income that could be used for other needs and responsibilities like rent or a mortgage. One of those needs is saving for a rainy day. It is pouring today. This is not cut and dry as the sentence or verdict implies. People in real estate need a newer, bigger vehicle for their job. It all comes down to conscience. In America today, people are losing their belief system due to the leadership in our nation. These so-called leaders have no conscience - just ego and greed.
The CORVID-19 will have one positive benefit. It revealed the weakness of our nation. We are no longer self-sufficient. The dangers to our future is terrifying. Need proof? Here is a capsulation.
Medical Supplies
When the virus hit hot spots like cruise boats, tourist locations and cities with high density like New York, the number of infected people overwhelmed the health system. Hospitals realized that they did not have enough of the right equipment to address this disease. They quickly realized that medical supplies like most of our medicine comes from...Can you guess? China.
Doctors, nurses and medical assistants have to hand over their protective gowns to the next shift because they have none in supply. This is one reason why so many become infected. Sadly, many have died. The head of hospitals did not plan for a rainy day. When they ordered new supplies, they have to wait until a Chinese firm can fill their request.
When patients need a ventilator, they will die because the next shipment from China has not arrived at port. Even if it did, there are no workers to unload the shipment. There are less truck drivers to deliver this life saving medical equipment. The contagion of all items that were mostly invented in the US, but outsourced elsewhere, reveals how phony our economy and our boasts are founded upon.
It gets worse! There are no swabs, no testing equipment, no masks, no PPE (personal protective equipment), no nothing. Why? It all comes from China!
People, we are testing 150,000 every day, it will take more than three years to test the nation. It is better to just test a worker to allow that person to work. The other tests should be allocated for people in need or questions about their health. The flu does not effect everyone. There is too much misappropriation of resources. In addition, when a local leader tries to initiate a response by seeking to purchase when that person sees as a local medical need, it ends up being a rip-off case. You see, real leadership seeks an answer. In the coronavirus situation, this means bidding on limited supplies. A .70-cents mask jumps to $7-bucks, as real leaders get caught by the system of the highest offer wins the bid. Because orders for medical supplies overwhelmed the few suppliers, the purchase becomes an auction. Only in America!
Last thought. If one of our great research labs in the US or Europe discovered a vaccine today, it will still end up in China. They produce much of the world's supply of medicine due to outsourcing of labor. Neither political party protects the American worker. This is a mortal sin that is revealed by the virus.
Core of the danger...
Critics pushed the president to enact the Defense Production Act. This measure forces manufacturers to produce whatever the government feels is necessary for the nation. It is mainly used in a time of war to which was declared by Congress.
Dear Reader, we have no manufacturers! We outsourced all our needs elsewhere. We are producers in name only. Apple phones are made in China. Nike sneakers are made somewhere outside of the US. Our cars come from Mexico. Our economy produces nothing! You can pass all the measures you want, but there are no factories to fill the request. Real economies like China, Germany and S. Korea are doing well because they can supply all their medical requests, especially testing. They have manufacturing!
Here is another sad point: too much of our food is imported. We don't need to do this. On the other hand, small farmers have to see their hard work in growing items like tomatoes, lettuce, fruits and vegetables lie rotting in fields because there are no workers to harvest this good produce. Even if the farmer gathers some of the crop with his family and friends, there are no truckers to deliver to the market. Food is going to escalate in price later this year and next. Globalization increases wealth elsewhere as our standard of living decreases. Our national debt which is the worst in the world, reveals this aspect.
A Lesson from History...
When time moved into the twentieth century, I'm talking 1901, Great Britain was recognized as the superpower in the world. They had the best navy, best army and the best standard of living. They contributed to more than their share of new inventions and ideas to better society. Then, the world went to war. The English army was not so great. The navy was suspect to a German idea, the submarine. The US saved the day because we had strong manufacturing to turn the tide of the war. England was found to be a "Paper Tiger." They still are.
If one looks back at the US history in war-time, this common thread is revealed.
The one big plus that gave the North over the South was the manufacturing in the North. The times change, but the story remains the same. The US won WWII because our manufacturing which produced our middle class, provided the edge to win the campaign. Manufacturing has a history of exploiting workers, but given the spirit of equality in our nation, unions evened out the playing field. Our standard of living rose to be the highest level ever in the world.
Until...
The rich and powerful bought off the political parties in our government. In one victory after another beginning with the Taft-Hartley Act, big money has destroyed unions and the middle class in our nation. The evidence is not just the food lines, but homeless people sleeping on streets in public. The poverty rate. Children without supervision, direction or a future. Our education results are one of the poorest in our history. Even "factory" models of education provided better results. Our economy rests on service jobs that do not provide enough to live. One works 40-plus hours and barely can pay rent. We are the
Paper Tiger of today.
Only hope
is to attack both political parties. We must force them to place high tariffs on all imported products. President Trump did a good thing in reducing corporate tax rates. He hoped to see a shift in production back into the US. Didn't happen. Companies found ways to circumvent the tariffs he imposed. Now, hard measures must be used. No exceptions! Tax every nation that exports into the US. Tax every American company who outsourced their product and then, import it back to the US. Place the tax so high that it forces companies to relocate back into the US. In addition, tax the wealthy. The income tax bracket should be raised to 50% with no loopholes for the wealthy. When Amazon pays no tax, it is time to end this corruption in politics. We need to attack politicians. We need to force their hand to address these ills of the nation. The best hope is to form a new political party that protects workers and ends all foreign wars by the military unless war is declared by Congress. We need this
yesterday!
The CORVID-19 will have one positive benefit. It revealed the weakness of our nation. We are no longer self-sufficient. The dangers to our future is terrifying. Need proof? Here is a capsulation.
Medical Supplies
When the virus hit hot spots like cruise boats, tourist locations and cities with high density like New York, the number of infected people overwhelmed the health system. Hospitals realized that they did not have enough of the right equipment to address this disease. They quickly realized that medical supplies like most of our medicine comes from...Can you guess? China.
Doctors, nurses and medical assistants have to hand over their protective gowns to the next shift because they have none in supply. This is one reason why so many become infected. Sadly, many have died. The head of hospitals did not plan for a rainy day. When they ordered new supplies, they have to wait until a Chinese firm can fill their request.
When patients need a ventilator, they will die because the next shipment from China has not arrived at port. Even if it did, there are no workers to unload the shipment. There are less truck drivers to deliver this life saving medical equipment. The contagion of all items that were mostly invented in the US, but outsourced elsewhere, reveals how phony our economy and our boasts are founded upon.
It gets worse! There are no swabs, no testing equipment, no masks, no PPE (personal protective equipment), no nothing. Why? It all comes from China!
People, we are testing 150,000 every day, it will take more than three years to test the nation. It is better to just test a worker to allow that person to work. The other tests should be allocated for people in need or questions about their health. The flu does not effect everyone. There is too much misappropriation of resources. In addition, when a local leader tries to initiate a response by seeking to purchase when that person sees as a local medical need, it ends up being a rip-off case. You see, real leadership seeks an answer. In the coronavirus situation, this means bidding on limited supplies. A .70-cents mask jumps to $7-bucks, as real leaders get caught by the system of the highest offer wins the bid. Because orders for medical supplies overwhelmed the few suppliers, the purchase becomes an auction. Only in America!
Last thought. If one of our great research labs in the US or Europe discovered a vaccine today, it will still end up in China. They produce much of the world's supply of medicine due to outsourcing of labor. Neither political party protects the American worker. This is a mortal sin that is revealed by the virus.
Core of the danger...
Critics pushed the president to enact the Defense Production Act. This measure forces manufacturers to produce whatever the government feels is necessary for the nation. It is mainly used in a time of war to which was declared by Congress.
Dear Reader, we have no manufacturers! We outsourced all our needs elsewhere. We are producers in name only. Apple phones are made in China. Nike sneakers are made somewhere outside of the US. Our cars come from Mexico. Our economy produces nothing! You can pass all the measures you want, but there are no factories to fill the request. Real economies like China, Germany and S. Korea are doing well because they can supply all their medical requests, especially testing. They have manufacturing!
Here is another sad point: too much of our food is imported. We don't need to do this. On the other hand, small farmers have to see their hard work in growing items like tomatoes, lettuce, fruits and vegetables lie rotting in fields because there are no workers to harvest this good produce. Even if the farmer gathers some of the crop with his family and friends, there are no truckers to deliver to the market. Food is going to escalate in price later this year and next. Globalization increases wealth elsewhere as our standard of living decreases. Our national debt which is the worst in the world, reveals this aspect.
A Lesson from History...
When time moved into the twentieth century, I'm talking 1901, Great Britain was recognized as the superpower in the world. They had the best navy, best army and the best standard of living. They contributed to more than their share of new inventions and ideas to better society. Then, the world went to war. The English army was not so great. The navy was suspect to a German idea, the submarine. The US saved the day because we had strong manufacturing to turn the tide of the war. England was found to be a "Paper Tiger." They still are.
If one looks back at the US history in war-time, this common thread is revealed.
The one big plus that gave the North over the South was the manufacturing in the North. The times change, but the story remains the same. The US won WWII because our manufacturing which produced our middle class, provided the edge to win the campaign. Manufacturing has a history of exploiting workers, but given the spirit of equality in our nation, unions evened out the playing field. Our standard of living rose to be the highest level ever in the world.
Until...
The rich and powerful bought off the political parties in our government. In one victory after another beginning with the Taft-Hartley Act, big money has destroyed unions and the middle class in our nation. The evidence is not just the food lines, but homeless people sleeping on streets in public. The poverty rate. Children without supervision, direction or a future. Our education results are one of the poorest in our history. Even "factory" models of education provided better results. Our economy rests on service jobs that do not provide enough to live. One works 40-plus hours and barely can pay rent. We are the
Paper Tiger of today.
Only hope
is to attack both political parties. We must force them to place high tariffs on all imported products. President Trump did a good thing in reducing corporate tax rates. He hoped to see a shift in production back into the US. Didn't happen. Companies found ways to circumvent the tariffs he imposed. Now, hard measures must be used. No exceptions! Tax every nation that exports into the US. Tax every American company who outsourced their product and then, import it back to the US. Place the tax so high that it forces companies to relocate back into the US. In addition, tax the wealthy. The income tax bracket should be raised to 50% with no loopholes for the wealthy. When Amazon pays no tax, it is time to end this corruption in politics. We need to attack politicians. We need to force their hand to address these ills of the nation. The best hope is to form a new political party that protects workers and ends all foreign wars by the military unless war is declared by Congress. We need this
yesterday!
Wednesday, April 15, 2020
Fed's, Other Unseen Sins
When you realize that inflation is an unseen tax, you will also begin to realize all the harm that the Federal Reserve inflicts onto our economy, especially to our standard of living. You may or may not know, there is an index that measures the quality of life in nations. We are not even in the top twenty!😕
If you are like the sad and confused emoji above, you need to read on. I also have some info for the rest of you.
Gasoline Prices
Have you noticed, at least everyone outside of California that petrol sells for around $2-bucks a gallon? Dear Reader, I remember working at a gas station and the price per gallon was .31-cents a gallon. The value of our dollars has declined that much. On the flip-side gasoline rose to over $4-bucks a gallon at one point. Sadly, with all of the Federal Reserve money printing, our dollar's purchasing power will cause a return to individual budget crushing of $4-bucks, again.
People and the media will blame the Arabs. It is our central banks fault. The Arabs get paid in US dollars. If the dollar buy less, they need a higher price. Everyone thinks this is inflation, it is the Fed who destroys our currency. This is the root belief in a gold backed currency. It stops the Fed from printing. This protects our purchasing power. It also keeps government out of our economy and that is a good thing.
Stimulus Package
This started out with the Democrats to help citizens, especially in an election year. The Republicans realized the dangers to industries like the airlines, hospitality and manufacturing, especially in an election year. This is how politicians think. Later, both political parties woke up to the vastness of danger to the entire economy.
They came up with a $2-trillion plus package. We soon learned that the shifty GOP could expand this stimulus to $6 trillion. Now, both parties are looking ahead to the election. While the iron is hot, they are seeking another stimulus package. The biggest hurdle is oversight. The other word for this is profiteering. President Trump is guilty. His ego sees a history book that refers to him as the FDR to the virus and economy. He has blocked out all Democrats. This aspect makes him a weak, small minded man.
Anyway, most of the money will go to big business. The talk about small business loans from the SBA is that, just talk. In a normal year, the SBA receives about 6,000 requests. Last week, they received 500,000 applications. They have $361 billion to lend. They already gave out $151 billion. A lot of that money will be lost to fraud. Doesn't matter to this bureaucracy because the Federal Reserve will buy all those loans, the good, the bad and the ugly. This takes us full circle as to other unseen sins of the Fed.
Let me ask you a question?
If banks knew that every loan that they made would make them richer, would they not approve every loan? Of course, they would. However, life being what it is, businesses fail. This is why banks only lend to people who don't need to borrow. Enter the Federal Reserve in this virus induced crisis. They have announced that they will buy everything and anything from corporate bonds to high yield notes to junk bonds. Common sense tells you that many of these issues will fail. They will end up worthless like a stock certificate from Radio Shack. Someone did a report in the last crisis in 2008 on our central bank. It showed that the Federal Reserve was leveraged to 77-1. In layman's terms, it was bankrupt! It is worse today and the next tidbit puts the leverage off the charts!
Foreign Institutions
There are dollar-denominated debt instruments being offered and traded in many countries in the world. The Bank of Settlements (BIS) estimates this dollar-denominated debt to be over $12 trillion. There are many reasons for these accounts. The central one is commodities. Nations need US dollars to enact a purchase of oil and other commodities. Now, this is the unspoken, unseen danger to the US. The Federal Reserve must comply liquidity to these institutions. In other words if these dealers fail, it will effect the dollar and its value. The Fed lends these firms not just billions, but trillions. This is a license to steal! People, this is not just big powers like the UK or Germany, but everyone out there. We are subsidizing the world. If derivatives are connected to these transactions and they are, the whole system could crash overnight. The Fed also does currency swaps with other central banks. There are other machinations that no one knows about, but in the end, the US taxpayer will be on the hook. By next year there will be rumblings in the global community to end the power of the dollar as the reserve currency of the world. When our dollar is surrendered to a basket of currencies, we all will feel inflation. Our dollar will buy less and then, you will remember this meme, End the Fed!
If you are like the sad and confused emoji above, you need to read on. I also have some info for the rest of you.
Gasoline Prices
Have you noticed, at least everyone outside of California that petrol sells for around $2-bucks a gallon? Dear Reader, I remember working at a gas station and the price per gallon was .31-cents a gallon. The value of our dollars has declined that much. On the flip-side gasoline rose to over $4-bucks a gallon at one point. Sadly, with all of the Federal Reserve money printing, our dollar's purchasing power will cause a return to individual budget crushing of $4-bucks, again.
People and the media will blame the Arabs. It is our central banks fault. The Arabs get paid in US dollars. If the dollar buy less, they need a higher price. Everyone thinks this is inflation, it is the Fed who destroys our currency. This is the root belief in a gold backed currency. It stops the Fed from printing. This protects our purchasing power. It also keeps government out of our economy and that is a good thing.
Stimulus Package
This started out with the Democrats to help citizens, especially in an election year. The Republicans realized the dangers to industries like the airlines, hospitality and manufacturing, especially in an election year. This is how politicians think. Later, both political parties woke up to the vastness of danger to the entire economy.
They came up with a $2-trillion plus package. We soon learned that the shifty GOP could expand this stimulus to $6 trillion. Now, both parties are looking ahead to the election. While the iron is hot, they are seeking another stimulus package. The biggest hurdle is oversight. The other word for this is profiteering. President Trump is guilty. His ego sees a history book that refers to him as the FDR to the virus and economy. He has blocked out all Democrats. This aspect makes him a weak, small minded man.
Anyway, most of the money will go to big business. The talk about small business loans from the SBA is that, just talk. In a normal year, the SBA receives about 6,000 requests. Last week, they received 500,000 applications. They have $361 billion to lend. They already gave out $151 billion. A lot of that money will be lost to fraud. Doesn't matter to this bureaucracy because the Federal Reserve will buy all those loans, the good, the bad and the ugly. This takes us full circle as to other unseen sins of the Fed.
Let me ask you a question?
If banks knew that every loan that they made would make them richer, would they not approve every loan? Of course, they would. However, life being what it is, businesses fail. This is why banks only lend to people who don't need to borrow. Enter the Federal Reserve in this virus induced crisis. They have announced that they will buy everything and anything from corporate bonds to high yield notes to junk bonds. Common sense tells you that many of these issues will fail. They will end up worthless like a stock certificate from Radio Shack. Someone did a report in the last crisis in 2008 on our central bank. It showed that the Federal Reserve was leveraged to 77-1. In layman's terms, it was bankrupt! It is worse today and the next tidbit puts the leverage off the charts!
Foreign Institutions
There are dollar-denominated debt instruments being offered and traded in many countries in the world. The Bank of Settlements (BIS) estimates this dollar-denominated debt to be over $12 trillion. There are many reasons for these accounts. The central one is commodities. Nations need US dollars to enact a purchase of oil and other commodities. Now, this is the unspoken, unseen danger to the US. The Federal Reserve must comply liquidity to these institutions. In other words if these dealers fail, it will effect the dollar and its value. The Fed lends these firms not just billions, but trillions. This is a license to steal! People, this is not just big powers like the UK or Germany, but everyone out there. We are subsidizing the world. If derivatives are connected to these transactions and they are, the whole system could crash overnight. The Fed also does currency swaps with other central banks. There are other machinations that no one knows about, but in the end, the US taxpayer will be on the hook. By next year there will be rumblings in the global community to end the power of the dollar as the reserve currency of the world. When our dollar is surrendered to a basket of currencies, we all will feel inflation. Our dollar will buy less and then, you will remember this meme, End the Fed!
Wednesday, April 8, 2020
10 on Death Watch...and counting
The loss of human life is tragic. When out of the ordinary, its pain seems more acute. The coronavirus is causing more than loss of life. It will be the nail in the coffin for many aspects in our society. Not only did it change March Madness into the "Silent Spring," but the effects of the disease has effected all our sport leagues and activities. It has disrupted houses of worship. It puts all interactions under a new glass of stress and worry. It could get worse. What if mail is stopped? What if hospitals close due to dangers of their air quality and safety? What if truckers stop delivering which forces grocery stores to close? The possible ramifications are endless and terrifying. Enough said.
4.4%
is the figure that the labor department says where our unemployment jumped too. This is totally wrong. It is totally short of the truth. We know and I know from past experience. Back in 2008 I got laid off from work. I didn't even know where the unemployment office was located in Florida. I found out that claims can be done by phone. Problem was you never got through to file your claim. Eventually, I filed a claim through the internet. I lost three weeks of payments, and by the way, even when the claim is complete, there is a waiting period.
Today, it is worse because most states have cut back on services like the unemployment office. Many, like in Florida, have also cut back on the length of receiving payments. This was done by the anti-union, anti-worker, Governor Scott. Sadly, this poor excuse for a human is now their state senator.
In addition, all unemployment claims are only done now-a-days through the internet. Millions of Americans use their public library for internet connections. Even if some of these people get through to begin their claim, time allotments cut short their application procedure. These poor souls are in limbo. These people as well as many others have no way to register their claim in a timely manner. There are countless jobs that are described as self-employment. They are not being counted. What about poor waitresses? They only make $2.13 per hour. What kind of unemployment check will that amount too? Un-documented immigrants will not be able to get a tax relief check. How will they exist? The real percentage of the unemployed is triple what the government reports. The questions are endless, the ramifications are terrifying. Enough said.
Where this is going...
We all should know by now that retail in America has been suffering since the emergence of the PC. Our national government has allowed commerce on the internet to be free of a sales tax. This is the heart of the problem for brick and mortar locations. E-commerce has a built-in sales advantage from 6% or more over shopping centers and malls. This is why retail is dying a slow razor blade death...until now. The CORVID-19 is the death poison. The end is close for the ten businesses that are in this piece. The sad truth is almost all retail will be forced to close stores and consolidate to limit debt. The ones that I have assembled are on their last breath. Sadly, I must inform you in conjunction with our unemployment picture that retail accounts for 52 million jobs. The virus has caused anchor mall giants, Macy's, Nordstrom, Apple and Nike to close all their stores. This will kill more malls. Simon Properties, the biggest mall landlord is closing 200 of its shopping centers. Every week new news is more bad news and more of the same. You could pray that on Sunday, we not only remember His rising from the dead, but with Him, all is possible. Maybe He will eradicate the virus from our air. Thank you, Father.
10 on Death Watch
1) J. C. Penny: too much debt, closing stores which means less revenue for debt service.
2) Ascenta: parent of Ann Taylor. Already closed Dressbarn before virus, predict more losses &-Rev.
3) Stage: was looking good with acquisition of Gordmans, now too much debt and no revenues.
4) Express:based in malls, stores closed due to virus. No revenues, was already losing to e-commerce.
5) Francesca's: closed all locations, no revenues and out of cash.
6) Stein Mart: was already selling assets before virus. Now, it is offering itself and no takers!
7) Container Store: $14 million in cash. $64 million in assets. $300 million in debt. Do the math!
8) GNC: already lost in battle with-commerce. $859 million in debt which it cannot service.
9) J. Jill: women's apparel - closed all stores. No revenues, but still owes rent, utilities and debt.
10)Tailored Brands: A.K.A. Men's Wearhouse. Closed stores, but it is still willing to pay employees.
Beautiful gesture, but it will not last as liabilities is in excess of credits.
The above is part of the on-going crisis which is retail in America. I remind you that no expert correctly predicted the unemployment rate, not even Sabastian. However, Sebastian was correct in calling out Amazon for their phony hiring ad. It was learned last week that Amazon fired employees who sought to unionize the warehouse jobs or anyone who complained about health safety aspects. The collapse of retail in America has many ramifications with endless and terrifying possibilities. Enough said!
4.4%
is the figure that the labor department says where our unemployment jumped too. This is totally wrong. It is totally short of the truth. We know and I know from past experience. Back in 2008 I got laid off from work. I didn't even know where the unemployment office was located in Florida. I found out that claims can be done by phone. Problem was you never got through to file your claim. Eventually, I filed a claim through the internet. I lost three weeks of payments, and by the way, even when the claim is complete, there is a waiting period.
Today, it is worse because most states have cut back on services like the unemployment office. Many, like in Florida, have also cut back on the length of receiving payments. This was done by the anti-union, anti-worker, Governor Scott. Sadly, this poor excuse for a human is now their state senator.
In addition, all unemployment claims are only done now-a-days through the internet. Millions of Americans use their public library for internet connections. Even if some of these people get through to begin their claim, time allotments cut short their application procedure. These poor souls are in limbo. These people as well as many others have no way to register their claim in a timely manner. There are countless jobs that are described as self-employment. They are not being counted. What about poor waitresses? They only make $2.13 per hour. What kind of unemployment check will that amount too? Un-documented immigrants will not be able to get a tax relief check. How will they exist? The real percentage of the unemployed is triple what the government reports. The questions are endless, the ramifications are terrifying. Enough said.
Where this is going...
We all should know by now that retail in America has been suffering since the emergence of the PC. Our national government has allowed commerce on the internet to be free of a sales tax. This is the heart of the problem for brick and mortar locations. E-commerce has a built-in sales advantage from 6% or more over shopping centers and malls. This is why retail is dying a slow razor blade death...until now. The CORVID-19 is the death poison. The end is close for the ten businesses that are in this piece. The sad truth is almost all retail will be forced to close stores and consolidate to limit debt. The ones that I have assembled are on their last breath. Sadly, I must inform you in conjunction with our unemployment picture that retail accounts for 52 million jobs. The virus has caused anchor mall giants, Macy's, Nordstrom, Apple and Nike to close all their stores. This will kill more malls. Simon Properties, the biggest mall landlord is closing 200 of its shopping centers. Every week new news is more bad news and more of the same. You could pray that on Sunday, we not only remember His rising from the dead, but with Him, all is possible. Maybe He will eradicate the virus from our air. Thank you, Father.
10 on Death Watch
1) J. C. Penny: too much debt, closing stores which means less revenue for debt service.
2) Ascenta: parent of Ann Taylor. Already closed Dressbarn before virus, predict more losses &-Rev.
3) Stage: was looking good with acquisition of Gordmans, now too much debt and no revenues.
4) Express:based in malls, stores closed due to virus. No revenues, was already losing to e-commerce.
5) Francesca's: closed all locations, no revenues and out of cash.
6) Stein Mart: was already selling assets before virus. Now, it is offering itself and no takers!
7) Container Store: $14 million in cash. $64 million in assets. $300 million in debt. Do the math!
8) GNC: already lost in battle with-commerce. $859 million in debt which it cannot service.
9) J. Jill: women's apparel - closed all stores. No revenues, but still owes rent, utilities and debt.
10)Tailored Brands: A.K.A. Men's Wearhouse. Closed stores, but it is still willing to pay employees.
Beautiful gesture, but it will not last as liabilities is in excess of credits.
The above is part of the on-going crisis which is retail in America. I remind you that no expert correctly predicted the unemployment rate, not even Sabastian. However, Sebastian was correct in calling out Amazon for their phony hiring ad. It was learned last week that Amazon fired employees who sought to unionize the warehouse jobs or anyone who complained about health safety aspects. The collapse of retail in America has many ramifications with endless and terrifying possibilities. Enough said!
Wednesday, April 1, 2020
The End of Capitalism
April Fools...
if there is one, it is on us for believing that we have free and open markets.
The famous economist / immigrant from Germany by way of Austria to America, Joseph Schumpeter
stated, "Capitalism will use 'creative destruction' to move its economy forward. His insights were on the money. Governments should not fear a downturn due to this interruption because a new and better way is in the works. This is how a modern economy operates. The problem now government is run by egos who cannot fathom losing their position for any reason, most of all, an economic one. They have turned to socialist ideas as opposed to allowing the national forces of capitalism to function.
What it means...
It means that new technology, new ideas will destroy a segment of the economy as the new replaces the old. One year vinyl records were the thing. The following saw the addition of the 8-track. Then, this was destroyed by the cassette. This is how a free open market operates. It is harsh. No one says life is easy. Weak government leaders facing unemployment choose diversions. LBJ chose Vietnam. Today, government protects big corporations. This is socialism by any other name.
Enter the Socialist
When socialist come to power in different nations, they used their ideology to the economy. If any company is an important producer that offered jobs, it had to be protected. This protection covered any and all aspects from taxes and tariffs to regulations, permitting and subsidies, if necessary. This is how most of the world operates. It is why American corporations are at a disadvantage when it comes to selling, especially exports. State sponsored companies have their nation behind them to back them up. In the US the only segment of our society that could say that is banking. Banking has the Federal Reserve watching its back. This is the first germ of socialism in America. The rest of us are on our own.
Enter lobbyists
They convinced enough heads to protect agriculture. Then, the collapse of the auto industry got enough votes to lend Chrysler money to survive. This saved jobs and fortunately, Lee Iacocca was running that firm. He fathered our greatest auto, the Mustang and he saved the company while he was in control. Our problem is that we don't promote people like him to positions of power. Anyway, the use of socialist ideas are used so many times, our real free, open market is in name only. The losing streak of our capitalist system can be viewed through any segment of our economy.
It is most visible in the slow decay of our manufacturing. This segment is losing is in the competition with state sponsored entities. These are well paying jobs and the loss is reflected in our shrinking middle class. When you add the creative destructiveness of the internet, which is destroying our retail along with the stupidity of our Congress and government, another 15 million jobs are at risk. Things are adding up in the wrong column. Then, the onslaught of immigrants who seek any type of employment(read low-level wages). They are in competition with unemployed US citizens which makes things worse. We can see the effects in the wealth gap, homelessness and poverty. All these negatives are on the rise. Oh yeah, real wages have remained stagnant since 1973. Tax cuts only help the rich and endanger the nation with the hidden burden of debt. This is the present US economy.
Enter CORVID-19
The virus and ways to limit its effect has created a nightmare for our economy. This is not a creative destruction. but an invisible weapon of mass destruction(WMD) to the economy. The government was forced to do something. The problem for America is republicans only seek to help big corporations which is in their ten commandments. The democrats at one time was the working class choice. Today, they only seek power for their egos with no real ideas to help workers or citizens. If they protect workers, they fear criticism of protectionism. If they halt immigrants, they lose Hispanic votes. It is all about votes. They have no real values or ideas. Both political parties rely on excess fiscal spending as their political norm. The stimulus package will come and go just like the virus, but the debt will remain. It could get worse as new stimulus packages are on the table. This is the real disease. It spreads like the interest it generates. It is becoming unrepayable. The Federal Reserve is a bankrupt mechanism. The only reason that it cannot default is due to the fact that it can print more to any previous printing. Someday, the world will look at it like the Weimar Republic or Zimbabwe with its trillion dollar note. It will end ugly.
if there is one, it is on us for believing that we have free and open markets.
The famous economist / immigrant from Germany by way of Austria to America, Joseph Schumpeter
stated, "Capitalism will use 'creative destruction' to move its economy forward. His insights were on the money. Governments should not fear a downturn due to this interruption because a new and better way is in the works. This is how a modern economy operates. The problem now government is run by egos who cannot fathom losing their position for any reason, most of all, an economic one. They have turned to socialist ideas as opposed to allowing the national forces of capitalism to function.
What it means...
It means that new technology, new ideas will destroy a segment of the economy as the new replaces the old. One year vinyl records were the thing. The following saw the addition of the 8-track. Then, this was destroyed by the cassette. This is how a free open market operates. It is harsh. No one says life is easy. Weak government leaders facing unemployment choose diversions. LBJ chose Vietnam. Today, government protects big corporations. This is socialism by any other name.
Enter the Socialist
When socialist come to power in different nations, they used their ideology to the economy. If any company is an important producer that offered jobs, it had to be protected. This protection covered any and all aspects from taxes and tariffs to regulations, permitting and subsidies, if necessary. This is how most of the world operates. It is why American corporations are at a disadvantage when it comes to selling, especially exports. State sponsored companies have their nation behind them to back them up. In the US the only segment of our society that could say that is banking. Banking has the Federal Reserve watching its back. This is the first germ of socialism in America. The rest of us are on our own.
Enter lobbyists
They convinced enough heads to protect agriculture. Then, the collapse of the auto industry got enough votes to lend Chrysler money to survive. This saved jobs and fortunately, Lee Iacocca was running that firm. He fathered our greatest auto, the Mustang and he saved the company while he was in control. Our problem is that we don't promote people like him to positions of power. Anyway, the use of socialist ideas are used so many times, our real free, open market is in name only. The losing streak of our capitalist system can be viewed through any segment of our economy.
It is most visible in the slow decay of our manufacturing. This segment is losing is in the competition with state sponsored entities. These are well paying jobs and the loss is reflected in our shrinking middle class. When you add the creative destructiveness of the internet, which is destroying our retail along with the stupidity of our Congress and government, another 15 million jobs are at risk. Things are adding up in the wrong column. Then, the onslaught of immigrants who seek any type of employment(read low-level wages). They are in competition with unemployed US citizens which makes things worse. We can see the effects in the wealth gap, homelessness and poverty. All these negatives are on the rise. Oh yeah, real wages have remained stagnant since 1973. Tax cuts only help the rich and endanger the nation with the hidden burden of debt. This is the present US economy.
Enter CORVID-19
The virus and ways to limit its effect has created a nightmare for our economy. This is not a creative destruction. but an invisible weapon of mass destruction(WMD) to the economy. The government was forced to do something. The problem for America is republicans only seek to help big corporations which is in their ten commandments. The democrats at one time was the working class choice. Today, they only seek power for their egos with no real ideas to help workers or citizens. If they protect workers, they fear criticism of protectionism. If they halt immigrants, they lose Hispanic votes. It is all about votes. They have no real values or ideas. Both political parties rely on excess fiscal spending as their political norm. The stimulus package will come and go just like the virus, but the debt will remain. It could get worse as new stimulus packages are on the table. This is the real disease. It spreads like the interest it generates. It is becoming unrepayable. The Federal Reserve is a bankrupt mechanism. The only reason that it cannot default is due to the fact that it can print more to any previous printing. Someday, the world will look at it like the Weimar Republic or Zimbabwe with its trillion dollar note. It will end ugly.
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