Archive for the 'Uncategorized' Category

America still supports Israel … for some reason

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.

Up and down, volatility in the markets is spooky

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.

What recovery?

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!

States going to court over healthcare

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.)

UK Elections results show need for reform

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…

Let the lawsuits roll..

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…

Anarchists at a Tea Party

I’ve mentioned that its getting hard to even talk about politics without stirring up a controversy and making someone angry, but a recent post at Infoshop is really making the rounds and sparking a verbal conflict across the web.  Its even a fairly muted post with some constructive suggestions, but its being treated by some on the right as an act of war.

Beyond reinforcing some of the typical left-right stereotypes, the idea of the post is that political anarchists should show up to the big tea party rally on April 15th and counter-protest or engage individuals in discussion & possibly draw them into other political activity that hasn’t necessarily been hijacked by undertones of racism and neo-conservative economic policy (Feed the poor… to the rich!)

Tea party bloggers jumped on the post immediately and interpreted this plan as some kind of organization for a violent confrontation.  Much misunderstanding and some vague threats later, and it looks like this rally on the 15th is going to end up being prepared around the paranoia of “infiltration.”  Everyone thinks everyone else is a government plant or agent provocateur, and we can be sure that any violence or vandalism that occurs at the event will be widely blamed on “the other team.”

Of course, the “teams” aren’t even that accurately defined, and some people sympathetic to philosophical anarchism are also upset about the post:

Not trying to totally derail this discussion, but what’s wrong with being a “gun freak?” Plenty of us left-leaning @ types have guns. Lots of democrats, for crying out loud, have guns.

And another:

I hear on the grapevine that real liberty activists are being attacked and driven out by the corporatist shills as they transform it into a conservative populist platform. Tea Party is probably lost now to the fascist/corporatist horde, but at one point it had a strong showing of an-caps, agorists, constitutionalists, minarchists and libertarians

You can’t please all of the people all of the time – and in times like these, we just can’t seem to please any one at all.

Economy hits the tax haul

Tax revenue collections have dropped by nearly 14% in California this year, despite massive increases on tax rates and fee amounts:

The state collected just over $101 billion in 2009, down $16.4 billion, even though the legislature and governor approved the largest tax increase in state history including hikes in sales, motor vehicle and income taxes.

Fears of a deflationary spiral may not be unfounded or hyperbolic after all.

Federal policy makers have been walking a fine line between allowing the nominal value of assets to deflate while trying to keep the entire economy running on borrowed cash and easy money policies.  If all of these interventions are unable to kick-start “business as usual,” the next temptation for the Federal Reserve may simply be to literally print up the money needed to pay down debts and create new jobs.  Unfortunately, the down side effects of that could include unintended levels of inflation, a drop in international confidence regarding the U.S. economy, and even the potential of widespread civil unrest as wages are unable to keep up with the price of food and other basic necessities.

Conservative violence undermines legit healthcare criticisms

I’m not a particular fan of this health insurance reform legislation. Don’t get me wrong, I think we need serious health care reform in America, but I’m not particularly excited about guaranteeing millions of new customers for a broken system. I’m not looking forward to supporting this system when the mandates kick in – even if my own out of pocket contribution is just a small fraction of what the government pays on my behalf, I’ll feel ripped off.

But any legitimate concerns about the legislation will be drowned out in a growing chorus of violence and threatening rhetoric. Already, politicians and their families have faced death threats and attempts at sabotage, and the discussion on right-wing echo chambers is increasingly radicalized.

There are legitimate reasons to dislike this bill, but the rational arguments are more likely to be considered “further left” in relation to the American political debate. Real reform will have to go far beyond private insurance and toward a goal of basic universal coverage in a low-overhead non-profit environment.

Money is an Illusion, so why Pretend?

Bernanke is practically fessing up to the biggest fraud of all time: the fraud of modern money. These colorful pieces of paper aren’t backed by any specific goods or services, and their daily value fluctuates as the financial gatekeepers arbitrarily decide to inflate and contract the available supplies of cash. There really is no limit to the amount of money we can create in a virtually instant period of time, so why keep pretending that there could ever possibly be a shortage in the banking system?

So, this is the tortured logic that leads us to Bernanke’s conclusion: eliminate banking reserves outright.

The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system.

Since the banks can head straight to the Federal Reserve for cheap money any time they need it, and since the system is blatantly rigged to provide them profits in the long run, there really is no need for a financial panic! We can just print more money! Heck, even if we ran out of paper and ink we could still transfer digital credits into the bank’s account and that would be just as valuable as those greenbacks you worked so hard for.

So the next time you’re sitting at work and staring at the clock, as yourself why any of us should have to keep bank reserves to pay off our bills and debts – its all just imaginary money, right?

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