Independent News and Politics

It looks like Keith Olbermann is gone from MSNBC.  Without much warning, he abruptly announced that tonight’s show would be the final one.

NBC spokes persons were quick to deny that the recent merger with Comcast have anything to do with this development, but a lot of outside analysts are having a hard time with that story.  Why even go out of their way to make such a claim?  Well obviously, because Comcast has a lot of financial interest in promoting certain types of editorials over others.

• 10% unemployment.
• Dead civilians at a political rally.
• Bombs on Martin Luther King Day parade routes.

Don’t let anyone tell you the recovery is here.  If we start believing that, we’ll have accepted what we have as the new normal.  There are certainly those among us who are doing just fine with the way things are, but as a society we have to commit to the belief that things could and should be better.

The Federal Reserve has gone on another grand monetary experiment in hopes of jump starting the recovery and creating jobs.  Unfortunately, one of the consequences of this second round of quantitative easing (QE2), might hit your pockets at the grocery store and gas station.

When the Federal Reserve uses new money to buy bonds from the government, they’re pretty close to just printing up money from nowhere.  The intended effect is to spark economic activity and new investment in the kind of productive activity that pays the bills, but until and unless that money is then taken back out of the economy there is a risk of prices going up in relation to the growth of the money supply.

Workers in America will be hard hit since there are no raises in sight and most people are just glad to have a job, but the biggest critics of QE2 have been from the international scene.  Developing nations from Brazil to China have protested the effects of this, calling it exported inflation and an unfair trade advantage.  As we live in a world of fiat currencies, there is really nothing to stop these other nations from entering a new “race to the bottom” with undervalued currencies.  If two or more nations got in to such a game of monetary chicken, the ultimate effect might be both of them falling off the cliff together while the onlookers enjoy clearance-sale prices on the land and labor of the devalued nations.

For the last few years, we’ve been in the initial stage of a prolonged financial crisis, but its just now that many popular pundits are starting to recognize the fact that we’ve entered a new depression.  In particular, even Krugman is now saying that the depression has pretty much arrived despite the massive deficits and government spending (or perhaps because there wasn’t enough spending).

In the meantime, job growth isn’t exactly keeping up with demand and real estate shows no signs of recovery.  Financial and health-care reform bills in Congress don’t seem to really address the fundamental dysfunctions of our institutions, but there doesn’t seem to be much in the way of a legislative alternative…  At least not one that is politically viable.

Well, the politicians do anyway.  While popular support for Israel is really only overwhelming in the evangelical Christian population, the administration and most successful politicians have nothing but nice things to say – regardless of how many people Israel starves, displaces, or detains for peaceful demonstration.

To confirm, the U.S. is now blocking a UN investigation of Israel’s boarding of an aid flotilla in international waters.  While Turkey fumes, Nicaragua cuts ties with Israel, and Ireland demands the immediate and safe return of all nationals on board – any American attempts to ostracize Israel might actually be illegal.

Freedom indeed – just so long as you boycott the countries you’re supposed to boycott and defend the religious fundamentalists you’re supposed to defend.

Over the last few weeks, the relative calm in the markets has all but evaporated.  While yesterday’s Dow average shot up nearly 3%, this was only after a week of steady declines after sudden moves in both directions.

What is consistent here is that volume is up – way up.  The VIX volatility index is at one of its highest points since the big panic hit in 2008, so whether the direction of the markets is up or down the swings have each been both wild and significant.

With European debt concerns rising and the U.S. mortgage market still stuck in its own dangerous spiral, there’s little to be bullish about in the medium term.

Fears of a Greek default have set off an unfortunate chain reaction in financial markets around the world – and the massive Euro-zone bailout of the debts of troubled states seems to be doing little but ensuring that the bankrupt states are allowed to continue borrowing even more money at low interest rates.  Unfortunately, access to more debt isn’t going to solve the crisis brought on by over-consumption and excessive debt payment obligations – it is only going to delay the reckoning and ensure that the broke states are able to get even deeper in over their head & ability to someday pay back what is owed.

The current phase is starting to look like pure asset deflation coupled with still-high commodity prices.  So long as the quantitative easing policies of central banks promote liquidity, most of the new easy money is going to be tied up on the commercial bank’s asset sheets in one speculative form or another.  The primary strategy appears to be investing in raw materials – driving up the cost of living but strengthening the banks’ books to make them appear a bit more solvent.  The only commodities that have followed the broader deflation trend are wheat, soy, and corn.

Cheap bread, austerity, and a grand circus of reality & contest shows for distraction.  Welcome to the new global order!

The new health care reform bill achieves much of its savings by passing off unfunded mandates to the states – and those state budgets aren’t exactly in a position to absorb large new spending plans.

Meanwhile, some employers are weighing the cost of fines against the cost of rapidly rising insurance premiums, and starting to wonder if it might just be much cheaper to drop employee coverage outright. At most, they’d be required to pay a fine equal to 8% of the worker’s wages – medical costs are closer to 18% of GDP and that means a worker’s insurance costs are likely to be more like 20-25% of their salary since their children and spouses are also covered.

In response, there is a growing movement for legal relief in the federal courts.  Currently, 20 states have signed on to the suit seeking to prevent the healthcare legislation from moving forward.

Complaints about the health reform package will take on many forms:  from questions about the legal role of the federal government and their constitutional legitimacy, to concerns that small businesses and independent contractors will be left out in the cold (once again.)

The recent election in the United Kingdom has left the nation without a clear majority party in Parliament, but the bigger issue to many voters is the need for electoral reform that more accurately represents the results of the voting.

Despite winning about 23% of the popular vote, the Liberal Democrat party will only receive 57 seats – or less than 10%.  In contrast, labor secured 29% of the vote and receives 258 representatives.

Its plain to see that the voting system strongly favors incumbents, even beyond the typical media and word of mouth support that they can usually count on.

Increasingly around the “Democratic” English-speaking world, it is becoming clear that this democracy we claim to value is little but a public relations exercise for the established parties.

Your rulers aren’t going anywhere, and there is no voting scenario that will really change this fact.  Welcome to the new international empire…

By now, you’ve probably heard that the SEC has filed official charges of fraud against Goldman Sachs, but the little detail that might have escaped scrutiny is that the original SEC complaint is being followed up with a virtual flood of investigations, lawsuits, and even some criminal charges.

Not only are regulators across Europe looking for ways to get back at Goldman for its role in selling off toxic mortgages as AAA bonds (of course, the ratings agencies had to play along as well) because the German, French, and British banks that took the hit are now scrambling for enough funds to stay solvent in the face of debt crises in Spain, Greece, and Portugal.

Of course, mortgages aren’t the only part of the market that were manipulated in order to exaggerate sharp rises and falls in value – it has long been suspected that JP Morgan, Goldman, et al have been engaged in the aggressive ‘market-making’ speculation that has brought commodities, and especially precious metals, on a roller coaster over the last few years.  If this report is true, someone at the DoJ is getting ready to go after JPM for fraud in the silver markets.  When and if that happens, expect some immediate price instability – and possibly even investigations into the physical gold that is supposedly backing up all of the paper certificates sold in the last decade.

Keep an eye out for new lawsuits and complaints going public over the next few weeks.  Its going to be an interesting time…