There is an excellent business/economics blog that has a “big-picture” outlook. It’s called “Jesse’s Café Américain.” (JCA) The author has numerous interests and he is a professional trader in stocks, bonds, gold, and silver. However he is not beholden to the corrupt status quo of global capitalism. He posts at least daily and he writes in a very objective, knowledgeable, succinct and clear manner. I strongly recommend that TMV readers save JCA’s address: http://jessescrossroadscafe.blogspot.com/
JCA features many excellent graphs produced by the author or taken from outside reliable sources with respect to trends in stocks and commodities. On a daily basis JCA provides links to many excellent blogs elsewhere on the Internet. Its links are very similar to the excellent blog “Naked Capitalism” that should also be regular reading for TMV followers.
The following are some recent thoughts from JCA posted earlier this month:
8/8/11: People do not need a ratings agency to tell them what to think about the US sovereign debt status. The Treasury market is broad and deep, and the facts about the US financial situation are reasonably available, although sometimes hard to retrieve through the fog of rhetoric and deception.
Agencies like S&P are needed to rate more obscure financial instruments and entities without a wide following or deep and liquid markets. And the US ratings agencies have shown themselves perfectly willing to produce ‘ratings on demand for pay’ over the last ten years for their large financial customers. And nothing appears to have changed.
…Treasuries rall[ied] sharply even on the longer end of the curve where the downgrade occurred. How about that! But it was perfectly understandable.
Why? Because the message was not about the quality of the Treasuries, which the market already knows much better than the bureaucratic paper pushers at S&P. Rather, the implications were about the outlook for the US economy, and not the Wall Street carny game. And that outlook for the real economy is becoming increasingly dire.
The reasons for this should be obvious by now, and it is not because of the long term debt situation. Here is a review of some of the changes in the past twelve years that have taken the US from surplus to disaster.
We saw a remarkable flight to gold, but much less in silver and a serious sell off in the commodities. That was the clear sign that this was a comment on the slack demand, the dire condition of the average American, and the dysfunctional nature of the economy. And for the first time, a feeling that the US government has lost its bearings and ability to respond, dramatically.
Obama came on television to speak. And after he said his piece, the losses in the equity markets doubled. Why is this?
Because the President may be many good things, and have many good qualities, but he is most surely not a leader, and does not possess an overweening moral principle or vision. What does he stand for, and who or what does he support? The best way to be thrown under the bus is to be one of his constituents.
He is a profile of the modern corporate manager, heavily laced with the amoral timidity of a professional bureaucrat. He could not carry Franklin Roosevelt’s leg braces. I would not hold him to this higher standard if he had not chosen to pursue the leadership of the Presidency in times of crisis. But he did.
The President’s response is familiar, to have the Congress choose yet another bipartisan commission, similar to the ones that failed to reach practical consensus so far, and delegate the problem to them, hoping for the best.
And what makes this situation even worse is that as bad as the President may be, his opposition are largely created from the same mold, cravenly unprincipled servants to power, and beholden to creeps, crooks, and sociopaths who pay them and reward them with power, to the detriment of the American republic.
There are wide expectations that the Fed will ‘do something’ tomorrow. I doubt they will do anything, but they may say something. If they do not, and the markets begin to move downward with some momentum, look for yet another crisis action to come out of the leadership of the country later in the week.
The downgrade was a vote of no confidence in the leadership of the US, across the board, Democrats and Republicans, the Banks and Wall Street, the Regulators and the Fed. In a parliamentary government, the leadership of the US would have fallen this week. This is what the market is saying.
There is a word for the act of sabotaging your own republic for the sake of personal political and financial advantage, and it is not to be used lightly. And if dishonorable opportunists push this to the limit of their madness, then let the Devil take them for it, and all who would wish to enjoy the misery of the others, the innocents, and view it as a cathartic, ‘justice done.’
The pity will be if the Fed does announce QE3, and the market rallies, and it is quickly forgotten, business as usual. For then it is just a reckoning delayed.
8/7/11: It’s all about the Unfunded Wars and the Financial Fraud, and the Unwillingness to Reform. Yes, the US has some very real long term issues with Social Security and Medicare.
Social Security is being strangled by the refusal to raise the income limit on the Social Security withholding tax in response to the gradual creep of inflation. If this limit was raised periodically the Social Security ‘problem’ would be resolved.
Medicare and in particular the drug portions of the program added by the Bush II administration are driving costs much higher. And this is more of a problem because of the structural cost problems in US healthcare system. Big Pharma in the US is a powerful lobbying force, and Americans pay MUCH higher costs per benefit for their health care services. This is inhibiting the steps that are needed to restructure the US healthcare system.
But Social Security and Medicare, without the drug program, have not substantially changed since the 1990’s, when the US was running a budget surplus, and then Fed Chairman Greenspan was reassuring the public that the Fed had a plan to deal with the lack of debt.
The repeal of Glass-Steagall and the growth of unregulated financial products, the co-opting of the regulatory agencies, the growth of corporate influence in Washington, and two unfunded and very costly wars of long duration, founded largely on lies and distortions following a despicable terror attack by a small group of people, coupled with tax cuts for the wealthy.
There is relatively little discussion, much less investigation, indictments and convictions, from one of the largest financial frauds in history.
And within twelve months of the crisis breaking, Wall Street bonuses were back to record levels, even as the rest of the country began its long downward spiral into debt, downgrade, and despair.
That is the long and short of it. And it bodes ill that these issues are so infrequently mentioned in the political and economic discussions circling Washington and New York today.
Rational discussion and factual analysis has been overwhelmed by a well-funded program of propaganda and sloganeering, and bought and paid for politicians and media which serve to direct the discussions according to the program of the monied interests.
And this is why the outlook for the US is so negative. Governance has failed, the system has been thoroughly corrupted or co-opted, and the planning and discussions cannot gain traction. Some have recently referred to Obama’s clarity gap because it is so unclear what he stands for, what principles he is willing to fight for.
The politicians of both parties, the media, and the business leadership are caught in a credibility trap in which the root causes cannot even be discussed, must less addressed, because they have all been involved in or benefited from a massive injustice in the financial frauds. They are complicit, and cannot act openly and honestly for fear of losing control of the debate, and of subsequent discovery.
And who do we see on American television this morning, providing economic advice and promoting the Wall Street prescription for a cure through a return to more bank deregulation? The angel of economic death, Alan Greenspan, a man without shame or honor as one of the great authors of the misrepresentations and mismanagement that led US into the financial crisis which rewarded the few at the expense of the many.
The real issue at the end of the day is reform. The US has been led down a dark alley and strangled in what history may recognize as a financial coup d’état, and a campaign of economic war against the common people.
The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery.
JCA also introduced me to several other good blogs, one of which is “Practical Dad” written by Don Harrold. This blog can be found here: (http://www.practicaldad.com/). Mr. Harrold is another thoughtful blogger I’ll feature with his permission in another upcoming TMV post.
Reprinted and highly recommended by Marc Pascal from Phoenix, AZ. TMV readers can reach me directly at [email protected].