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SHADES OF 1929

For those not paying attention, we have entered a global deflationary depression. The nutjobs running the world’s central banks and the moronic politicians elected by the sheep have tried Keynesian fiscal pork, zero interest rates, fraudulent accounting, printing money at hyper-speed, propaganda, austerity for the peasants, bonuses for the criminal bankers and crony capitalism for the super rich. It is five years later and it hasn’t worked. The grand experiment has failed. Bernanke and Krugman’s theories have been discredited. The world is on the edge. Bad shit is happening. Behind the scenes, the oligarchs are panicked and scrambling to retain their wealth and power. They are criminally inept. Their solution will be to accelerate what has already failed. This is how deflationary depressions turn into hyper-inflationary collapses. The massive buying of physical gold and silver by individuals and Far East countries is rational and prudent. The oligarchs won the battle in the past week. They may win a few more battles, because they have many weapons, but they will lose the war. This Fourth Turning is about to get really interesting.

Fed and Bank of Japan caused gold crash

Commodity prices have been falling since September, culminating in a rout over the past two weeks. That is a classic warning for the global economy.

Traditionally shaped pure raw gold bars stacked in a secure bullion room safe

By Ambrose Evans-Pritchard

7:22PM BST 17 Apr 2013

It is becoming ever clearer that the roaring boom in global equities since last summer has priced in an economic recovery that does not in fact exist. The International Monetary Fund has had to nurse down its global growth forecasts yet again. We are still stuck in an old-fashioned trade depression, with pervasive over-capacity in manufacturing plant and a record global savings rate of 25pc of GDP.

German car sales fell 17pc in March. That should puncture the last illusions that Germany is about to pull Europe out of a self-inflicted slump.

As you can see from the chart below, the divergence between stock markets and the Deutsche Bank index of raw materials is astonishing to behold, so like the pattern in early 1929.

Steel has fallen 31pc this year. Brent crude is off 17pc since early February, and copper 15pc.

You have to be careful reading too much into commodities, distorted by China. The time-honoured cycle is a surge of investment that comes on stream at once with a lag. America’s shale drive has turned the gas market upside down, diverting liquefied natural gas to Europe and Asia. Copper output in Chile rose 7pc last year. The crash in the Baltic Dry Index for shipping rates is partly a tale of too many ships.

Yet excess supply does not explain the collapse in gold over the past week. Cyprus may have been an incidental trigger. If the EU-IMF Troika is determined to strong-arm the Cypriots into selling most of their pint-sized holding of 14 tonnes, it may do the same to Portugal when the time comes, and then you are talking about the world’s 14th biggest holding of 382 tonnes.

Bank of America says the gold crash since Friday has already discounted sales of the entire Cypriot, Portuguese and Greek gold reserves combined. “As we believe additional gold selling in the European periphery is highly unlikely, we find it hard to fully justify the sell-off,” it said.

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The central banks of China and the emerging powers bought 535 tonnes last year to escape dollars and euros, the biggest wave of state purchases since 1964. Their strategy is to buy the dips, and they are no fools. The head of China’s reserve manager “SAFE” used to run a US hedge fund.

They won’t try to catch a “falling knife”, prefering to wait until the dust settles. The upward trend of the great bull market has been broken. The technical damage is brutal. Bank of America expects a further drop to $1,200. Be patient.

My view is that the US Federal Reserve and the Bank of Japan “caused” the gold crash. The rest is noise. The Fed assault began in February when it published a paper warning that the longer quantitative easing continues, the harder it will be for the bank to extricate itself.

The report was co-written by former Fed governor Frederic Mishkin, often deemed Ben Bernanke’s “alter ego”. It said the Fed’s capital base could be wiped out “several times” once borrowing costs climb. The window will start shutting by 2014, with trouble then compounding at a “dramatic” pace.

This was a shock. It suggested that the Fed has lost its nerve, and will think long and hard before launching a fresh blitz of money if growth falters.

Then came last week’s Fed Minutes, with hints of tapering off QE earlier that expected. That was the next shock. What they seemed to be saying is that the US economy is groping it way back to normality, that the era of silly money is over, that the dollar will stand tall again.

If that were the case, gold should fall. But it is not the case. The US economy is growing below the Fed’s own “stall speed” indicator. Half a million people fell out of the workforce in March. Retail sales fell in March. So did manufacturing.

The US faces fiscal tightening of 2.5pc of GDP this year, the most since 1946. Ex-labour secretary Robert Reich said the effects have been disguised so far, but a “stealth sequester” is just starting: $51m of grant cuts to Brandeis university; $1m for schools in Syracuse; and so on, the reverse of the stealth stimulus before.

My guess is that the Fed will be forced to row back smartly from its exit talk, but first we must look deflation in the eyes.

As for the Bank of Japan, it had been assumed that the colossal monetary stimulus of Haruhiko Kuroda would revive the yen-carry trade, leaking $1 trillion into world asset markets. But the early evidence is the opposite. Japanese investors brought money home last week.

“Mrs Watanabe” is selling her Kiwi and Aussie bonds to bet on stocks and property at home. And she is selling gold like never before. That too is a shock.

Japan’s “Abenomics” may prove a net drag on the world over coming months. It is exporting deflation through trade effects. This already visible in Korea and China, where soaring wages have eroded competitiveness. “Investors may have forgotten that yen weakness was one of the immediate causes of the 1997 Asian currency crisis and Asia’s subsequent economic collapse,” said Albert Edwards from Societe Generale.

China’s growth rate fell to 7.7pc in the first quarter. It will fall further, though the catch-up boom in the hinterland cities of Chengdu, Chonquing, Changsa and Xi’an may have further to run.

Fitch Ratings says credit has surged from €9 trillion to €23 trillion over the past four years, a rise equal to the entire US banking system. Beijing pumped up loans yet again after its recession scare in the summer, but is gaining less traction. The GDP growth effect of credit has halved. It is the classic sign of an economy sated on debt. China too will have to deleverage.

The world is still in a contained depression. Sliding commodities tell us global money is if anything too tight. “There is a threat of deflation almost everywhere. A lot of central banks will have to follow the Bank of Japan, whatever they say now,” said Lars Christensen form Danske Bank

The era of money printing is young yet. Gold will have its day again.

DO YOU WANT FRIES WITH THAT COLLEGE DEGREE?

The number of 18 to 24 year olds rose from 27.3 million to 30.7 million between 2000 and 2010, a 12.5% increase. The percentage of 18 to 24 year olds enrolled in college rose from 9.7 million (35.5%) to 12.6 million (41.2%) over the same time frame. So even though the overall population of 18 to 24 year olds has grown by 12.5%, the percentage in college has risen by 30%. This is a fascinating development because test scores reveal that students have gotten dumber since 2000.

Over this time frame average SAT scores have fallen. In 2012 1.66 million students took the SAT exam and 43% met the minimum score necessary to achieve a B minus average in their first year of college. That means that 700,000 high school seniors were intelligent enough to attend college. Based on these scores, there are only between 2.8 million to 4.2 million 18 to 24 year olds that have the necessary ability to attend college. But, somehow there are 12.6 million attending college.

For the 2010–11 academic year, the average annual price for undergraduate tuition, fees, room, and board was $13,564 at public institutions (including $5,076 for in-state tuition) and $32,026 at private, not-for-profit and for-profit institutions. That’s a pretty penny to be paying when two thirds of the kids in college shouldn’t be there.

Of course we all know how these kids are able to attend college. The government has lured millions of young people into debt servitude by handing out hundreds of billions in cheap loans for college. Total student loan debt now exceeds $1 trillion and federal student loans outstanding exceed $600 billion, headed to over $1 trillion by the end of the decade.

Banks wrote off $3 billion of student loan debt in just the first two months of 2013, up more than 36% from the year-ago
period, as many graduates remain jobless, underemployed or cash-strapped in a slow U.S. economic recover. Delinquencies have spiked, with about 17% of the nearly 40 million student loan borrowers at least 90 days past due on their repayments, a February report from the New York Federal Reserve Bank showed. So, while students are defaulting at a record pace, the Federal government accelerates the issuance of new loans. They aren’t worried about getting paid back. They’ll just stick the American taxpayer with the losses. The purpose has been to artificially deflate the unemployment rate and hoping their Keynesian fantasies would eventually lead to an economic recovery. But it didn’t happen.

The Obama “Big Mac & Fries Jobs Recovery” has done wonders for our recent college graduates. McDonalds is now requiring fry cooks to have college degrees. College graduates are finding tremendous opportunities at Taco Bells, KFCs, Pizza Huts, Burger Kings, Wendy’s and McDonalds across the land. At least their jobs can’t be outsourced to India. I think this development offers the University of Phoenix a tremendous new opportunity – a degree in “Do You Want Fries with That?” They can offer a Masters Degree in Advanced Fry Cooking. Maybe even a Doctorate in “Hold the Pickles, Hold the Lettuce”.

Enslaving millions of young people in billions in un-payable debt to get degrees that obtain them jobs at fast food joints is going to backfire on the Feds when these young people get pissed off enough and when the taxpayers get a bill for hundreds of billions in bad debt that will be written off.

THE GREAT POSTAL FRAUD

“One of the things the government can’t do is run anything. The only things our government runs are the post office and the railroads, and both of them are bankrupt.” – Lee Iaccoca

You may have heard that the U.S. Post Office lost $16 BILLION last year. You may also have heard that Congress snuck a requirement into a bill that had nothing to do with the Post Office, mandating that they must deliver on Saturdays, even though eliminating Saturday delivery would save the Post Office $2 BILLION per year. Congress evidently can’t read a financial statement or interpret a chart. I’m sure the trends detailed on this chart will reverse themselves shortly.

While reading an editorial today supporting the Post Office in its efforts to save money by eliminating Saturday delivery I saw another MASSIVE LIE perpetuated by the MSM and the government.

Here is the Orwellian statement:

“The U.S. Postal Service is an independent governmental agency that doesn’t take taxpayer funds.”

This is complete and utter bullshit. This statement also described Fannie Mae and Freddie Mac until 2008. They were just little old independent government agencies helping out the housing market – until the shit hit the fan!!! Then they became albatrosses around the necks of the American taxpayer. You own them now. They have lost $200 billion of your tax dollars, and will lose billions more before all is said and done.

You can access the U.S. Post Office financial statements online. Here is their December 2012 report:

http://about.usps.com/who-we-are/financials/financial-conditions-results-reports/fy2013-q1.pdf

The honesty of the people writing this report is refreshing. They essentially admit they are BANKRUPT and unable to meet their financial obligations. In other words, a truly INDEPENDENT entity admitting they can no longer operate. How is this for honesty:

“The Postal Service continues to suffer from a severe lack of liquidity. The Postal Service held total cash of $2.9 billion and $2.3 billion as of December 31, and September 30, 2012, respectively, and had no remaining borrowing capacity on its $15 billion debt facility (See Note 3, Debt, for additional information). The increase in cash balances for the quarter is largely attributable to the seasonal impact of holiday mailings, along with additional revenue resulting from this year’s political campaign and elections. Cash balances generally decline during the remainder of the fiscal year, as revenue is not as strong in the remaining quarters. By the end of this fiscal year, the Postal Service projects it will have a liquidity balance that will be less than its average weekly expenses of $1.3 billion. This low level of available cash means that the Postal Service will be unable to make the $5.6 billion legally-mandated prefunding of retiree health benefits due by September 30, 2013. Further, this level of cash could be insufficient to support operations in the event of another significant downturn in the U.S. economy.

Through the three months ended December 31, 2012, the Postal Service has suffered 5 quarters of consecutive net losses and net losses in 14 of the last 16 quarters. The net loss of $1.3 billion for the first quarter of the year included $1.4 billion of expense accrued for the legally-mandated prefunding payment for retiree health benefits. The requirement of the Postal Accountability and Enhancement Act, Public Law 109-435 (P.L. 109-435) to prefund its retiree health benefit obligations, a requirement not shared by other federal agencies or private sector businesses, plus the precipitous drop in mail volume caused by changes in consumers’ uses of mail, have been the two major factors contributing to Postal Service losses since the recession ended in 2009. Without structural change to the Postal Service’s business model, it will continue to be negatively impacted by these factors and, absent legislative change, it anticipates continuing quarterly losses for the remainder of 2013.”

The politicians that are mismanaging this country use governmental accounting fraud to cover-up the fact that the obligations of this bloated pig of an operation are going to be paid by YOU, the taxpayers of the United States. Today, none of the past, current, or future liabilities of this INDEPENDENT GOVERNMENT AGENCY are reflected in the Federal budget projections or the National Debt calculation.

Do YOU want to know how much YOU really owe? Brace yourself.

In the past six years they have lost $41 BILLION and they have a cumulative deficit of $36 billion. How many INDEPENDENT organizations can run up deficits of $36 billion without going out of business? YOU are on the hook for these accumulated deficits, just like you were on the hook for all of the Fannie and Freddie backed toxic mortgages.
The Post Office will lose another $10 to $15 billion this fiscal year. You will be on the hook for that too.
They have $15 billion of debt on their balance sheet, with $9.5 billion payable in the next 9 months. How will this INDEPENDENT government agency that is losing $16 billion per year pay off $9.5 billion? They won’t. The government drones will pass a bill in the middle of the night extending the terms with no cash flow requirements or expectation of repayment. I wonder if I can get a loan like that?
The really interesting stuff is buried on page 42 of their report. I wonder why it is all the way back there? In addition to their $15 billion of debt, they have another $70.5 BILLION of unfunded future obligations. The two biggest are:
- $33.9 Billion of payments for pension and health benefits for retirees, all due within the next 5 years. It’s not cheap providing gold plated benefits to government workers.
- $25 billion for workers compensation and sick leave payments. Yikes!!! It must be all that stress, because the mail never stops. It keeps coming and coming. It’s almost enough to make someone go postal, or at least file a stress related workers comp claim.

This really sounds like a promising story. Mail volumes continue to plummet. Someone should tell Congress the internet age has arrived. The Post Office has thousands of money losing, unneeded outlets. It has 637,000 employees when it only needs 300,000. Over 70% of Americans favor ending Saturday delivery, so Congress passes a law making that impossible to implement, ensuring $2 billion more losses per year. That’s par for the course. Over 70% of Americans were against passing TARP too. And according to your leaders in Washington, and parroted by the MSM, you are not on the hook for their losses.

It’s beyond laughable, but so is most of what is going on in this tragedy of a country, disguised as a comedy. The truth is that you are on the hook for the $36 billion of accumulated deficits, the $85 billion of debt and contractual obligations, and the annual $16 billion losses they continue to pile up. But what’s $120 to $150 billion among friends? Bennie can print that out of thin air in a few days. Why run an operation efficiently at a surplus, when you can keep hundreds of thousands of union government drones employed (until they go on workers comp) by sticking it to the working American taxpayer. I sure hope I don’t get a visit from the Postmaster General because of this article.

http://youtu.be/6nKlzQo3Wqo

MAIN STREET VERSUS WALL STREET

Do small businesses, which account for 65% of all the new hiring in the country, become less optimistic during an economic recovery?

“After another false start, small business confidence has sputtered and stalled again. For the sector that produces half the private GDP and employs half the private sector workforce -— the fact that they are not growing, not hiring, not borrowing and not expanding like they should be, is evidence enough that uncertainty is slowing the economy. Virtually no owners think the current period is a good time to expand, because they simply don’t know what the future holds. So why invest? And with the lack of any sustainable fiscal policy or a federal budget, no one’s banking that Washington will be at forefront of any meaningful change. Overall, it appears that there will be little growth coming from the small business half of the economy; as the world economy slows, even big business may suffer.” — NFIB chief economist Bill Dunkelberg

Small Business Optimism Down in March

The March NFIB Index of Small Business Optimism ended its slow climb, declining 1.3 points and landing at 89.5. In the 44 months of economic expansion since the beginning of the recovery in July 2009, the Index has averaged 90.7, putting the March reading below the mean for this period. Of the ten Index components, two increased, two were unchanged and six declined. Among the greatest declines were labor market indicators, inventory investment plans and sales expectations.

Small business owners are on the ground near the real people. They aren’t sitting in ivory towers at Princeton playing with regression models. They aren’t programming their high frequency trading computers to buy the dip. They aren’t calculating their bonuses and stock option compensation. They are trying to make payroll. They are trying to sell products. They are trying to understand how badly Obamacare will screw them. They are trying to navigate through the hundreds of thousands of rules, regulations and laws that are passed by politicians. They are paying experts thousands of dollars to decipher and comply with the IRS tax code. Well guess what? They have no plans to hire anyone and they expect sales to go lower.

Ben Bernanke’s money printing is not benefitting them in any way. His policies are not generating jobs. His policies are impoverishing savers, who now have less money to spend at small businesses. Ben Bernanke’s policies are designed to benefit Wall Street banks and mega-corporations. His policies are designed to drive stock prices higher and enrich the connected crony capitalists that control the country. Meanwhile, small businesses and small people are dying on the vine. The real economy is withering away under the weight of massive debt, crushing taxation, and ponderous government regulations and red tape.

There has never been a greater disconnect between Main Street America and Wall Street in our history. It will not end well. Bill Dunkelberg seems to be an economist with common sense, as opposed to the Keynesian morons like Krugman and the other Wall Street shills paraded on CNBC.

COMMENTARY BY CHIEF ECONOMIST BILL DUNKELBERG

NFIB Chief Economist
William Dunkelberg

Small business produces half the private GDP and employs half the private sector workforce. But it is not growing, not hiring, not borrowing and not expanding enough. Small business owners have been depressed since 2007 and that has not changed. In the March survey of NFIB’s 350,000 member firms, 77% expect the economy to be no better or even worse 6 months from now that it is currently. Only 4% think the current period is a good time to expand substantially, compared to an average of 17% for the period 1973 to 2007. More owners plan to reduce employment in the coming months than plan to create new jobs. More owners plan to reduce their inventories than plan to order new stocks. The bulk of growth comes from the increase in our population of about 3 million people and the growing need to simply replace stuff that is wearing out, not enough to get the economy back to trend growth much less the strong growth needed to restore employment to 2007 levels.

The Federal Reserve continues to assert its intention to purchase a trillion dollars of Treasury securities and mortgages, adding a trillion dollars to its portfolio and stuffing a trillion dollars of new liquidity into the banking system, until the unemployment rate falls below 6.5% or inflation breaks out. Then it will “consider” changing policy. Unless something really bad happens, this is a winning strategy for the Fed because eventually the private sector will improve, the labor force will shrink (as boomers leave), the unemployment rate will fall and the Fed can claim its policies “worked”, even if their policies made no contribution to the improvement or even slowed it down by creating uncertainty and fear among investors and business owners.

This is a risky strategy. The evidence that “uncertainty” is slowing the economy is pretty clear now (research at the San Francisco Federal Reserve for example) and uncertainty probably increases with the size of the Fed’s portfolio (as has the price of gold). The real economy is hardly growing yet the stock market and corporate profits are at record high levels. How do we make a record amount of money without producing more output and employing more workers? Such contradictions breed uncertainty.

In the meantime, a record low percentage of small business owners claim that credit is their top business problem (3%) while taxes get the most votes (23%). Record numbers of owners have no interest in a loan (over 60%), because they have no use for the funds that have a high probability of successfully generating a return so the loan can be repaid. The Fed has made sure that there is plenty of money to lend, but in the process may have reduced the confidence that borrows need to take risks, borrow, spend and expand. And then there’s the impact of fiscal policy (or the lack of a policy). The President is flying around the country doing fund-raisers and stumping for gun control, but he still has presented no budget proposal. Enough said.

WHY SO PISSED?

Last Friday I was stuck on the Northeast Extension for an hour as an accident had blocked both lanes for two hours. I listen to the Preston & Steve Show on WMMR as I drive to work. Preston lives up near me and was also stuck in this traffic jam, making him late for his morning show. Yesterday he received a call on air from the guy who caused the accident to apologize for making him late. He was driving a tractor trailer at 5:00 am going South on the Extension. Traffic had come to a stop up ahead due to a minor fender bender further down the road. This guy said he was distracted and looked down. When he looked up again it was too late. He crushed an SUV that had stopped in front of him. Here is some advice for assholes across the land. Don’t get distracted when you are driving a lethal vehicle at 70 mph. Don’t look down. Don’t text. Don’t talk on the phone. Don’t be an asshole.

Besides seeing idiots all over the road being distracted by their gadgets, I’ve noticed something else in the last few weeks. Extremely aggressive, angry, ignorant drivers seem to be proliferating on all roads. I’ve been cut off by dickheads at least three times in the last week. I’ve seen pricks barreling up the shoulder of the highway with traffic stopped, as if cutting off drivers following the rules will get them to their destination sooner. I’ve seen dozens of idiots flying by in turning lanes and then stopping completely to cut into the non-turning lane. Then there are just the general jerk-offs who are zigging and zagging on the Schulykill, cutting off anyone that slows them down.

I don’t know if it’s just me, but most of the aggressive motherfuckers seem to be driving BMWs or other expensive cars. I don’t know if this proves anything, but I wonder if this is another example of the deteriorating mood in this country that goes along with the Fourth Turning. People are growing increasingly angry and lashing out, especially the people who have bought into the lies spun by those running the show. Most of those BMW driving assholes are probably leasing them and are in debt up to their eyeballs. They are terminally pissed off because their life built upon delusions and debt is crumbling. Buying shit on credit did not make them rich. Their techno-gadgets, leased luxury automobiles, and underwater McMansions are an anchor around their necks. They take out their frustrations on the world by driving like maniacs on a suicide mission. I expect to see further aggression when the economy really implodes over the next two years.

I’ve said this before and I’ll say it again, if one of these assholes ever has an accident with me and fails to kill me, I will get out of my car, grab a tire iron and beat them to death.

But meanwhile Philly went directly from Winter to Summer, with no Spring. It will be 82 degrees today. Have you ever been on a college campus when it is 82 degrees? It is hard to be in a bad mood.

IF AUTO SALES ARE BOOMING THEN WHY……..

GM and Ford reported “strong” sales for March, up 6.4% and 5.7% respectively. The current annual rate of auto sales has “surged” to 15.2 million. Last year sales rose to 14.5 million from only 12.7 million in 2011. This sure sounds like a tremendous recovery led by great new models from our “saved” GM and wonderful iconic Ford Motors. The MSM was crowing about the results today, except the details tell a different story. GM’s car sales FELL 3% in March. The surge in sales was due to fleet sales going up 12%. It couldn’t possibly be the Federal government buying vehicles, could it? Cadillac sales surged as subprime loans in West Philly to the FSA reached record levels. There were 1,478 Volts sold in the whole country – so there will be 15.2 million vehicles sold in the country and the Obama Volt will account for less than 20,000 of these sales or .0013 of all car sales. Ford car sales FELL 0.2%. Their increase was also driven by fleet sales and truck sales. How dense is the average American? Gasoline prices are above $4.00 per gallon in many cities and they continue to buy low gas mileage trucks and SUVs.

The auto market is completely dependent upon 7 year 0% financing for good credits and subprime lending for 45% of sales and this is all they can achieve?

If sales have been so awesome for the last two years, why are their stocks and their profits in decline? Inquiring minds want to know.

If auto sales were 12.7 million in 2011 and they are pacing at 15.2 million in 2013, why has GM stock dropped from $38 to $28, a 26% decline? I thought Obama saved GM and they were doing awesome. Vehicle sales are up 20% since 2011 and GM still managed to earn $3 billion less in 2012 than they earned in 2011. This doesn’t even take into account the massive channel stuffing that has artificially boosted their sales figures.

It seems that selling vehicles to your dealers and to deadbeats through Ally Financial doesn’t generate profits. But who needs profits when a storyline will do.

If Ford Motor is doing so well why is their stock at $13 today when it was at $19 in 2011? For the math challenged, that is a 32% drop when auto sales are up 20% since 2011. Is the MSM reporting that Ford sales dropped by $2 billion in 2012 and their net income from operations dropped by $1 billion? Are we really having a strong auto recovery if the two biggest US automakers are making significantly less profit?

The MSM is not in the truth business. They are in the propaganda business. The storyline of auto recovery is false. The reported sales increases are due to channel stuffing and easy money from Bennie. The 45% of sales from subprime loans will bite the taxpayer in the ass when Ally Financial reports billions in losses over the next few years. You own Ally Financial. So it goes.

SECTION 8 STILL DOING GREAT

With the kids on Spring Break, we took a three day weekend in Wildwood. Today was beautiful. It was nice enough to ride our bikes to the lighthouse and take a nice four mile hike on the boardwalk. Easter Sunday’s weather was dreary so we did some bowling at the Wildwood Bowl and almost won a trivia competition at Owens Pub in North Wildwood while watching the Flyers make a dramatic comeback to keep their playoff hopes alive. Our four year ordeal regarding our defectively built deck is over. The new deck is awesome. There was virtually no noticeable damage from Sandy in Wildwood. I hope the deck work and Sandy didn’t inconvenience my Section 8 next door neighbors. They seem to be in good spirits. For newbies, these previous articles will bring you up to speed.

http://www.theburningplatform.com/?p=32788

http://www.theburningplatform.com/?p=18085

I have nothing personal against these people. They are fairly quiet. They did move my deck chairs into my garage before Sandy hit. They are there all year and keep an eye on the place. I do have a big problem with the asshole owner of the unit -Fat Pete. I’ve given him the name Fat Pete because he is a 350 pound scumbag that isn’t capable of climbing the steps to his unit.

Pete bought 3 of the 7 units in our condo pre-construction in 2002. He flipped two (one of them to me) at a nice profit and kept one for friends and family to use. He fancied himself a real estate mogul because his daddy owned one of the biggest blueberry farms in NJ and provided plenty of opportunity for Fat Pete. One problem. Petey found himself with 8 properties in Wildwood when the housing market collapsed. He mistook a bubble for intelligence and real estate savvy. After a couple years without being able to sell any of his properties he somehow managed to get the condo next door to me approved for Section 8 housing. It boggles my mind that a condo in a resort town, located 50 yards from the beach, can qualify for Section 8 housing.

Not only did Fat Pete single-handidly bring down the value of every condo in the complex with his brilliant strategic move, but he then rented it to white trash drug dealers who harassed our tenants all summer. After a number of us threatened him with bodily harm, he gave these tenants the boot and replaced them with the family unit that currently occupy the unit. We have a perfectly able mid fifties man who is not legally employed. He drives a nice pickup truck and appears to do some landscaping work for cash payments under the table. We have his rotund loud mouthed wife who tips the scales at about 275, and drives a newer model SUV with a handicap sticker. We have an ancient artifact grandmother with a walker, who likes to chat with us, but we can’t understand one word she says. There is also a slow-witted teenager who hardly ever leaves the condo. Then there are various “relatives” or acquaintances that come and go.

And now for the best part. Fat Pete, even though he’s been getting a monthly check from the Federal government for the last three years, hasn’t made his condo fee payment for the last four years. He is $7,000 in arrears. The other six owners had to pony up $3,000 apiece to cover the difference in the insurance payment for our deck repairs and the amount owed to the contractor. Fat Pete is taking $2,500 out of our pockets by not paying his fair share. I’ve tried to embarass his fatass with a sarcastic email copied to all the owners. He makes excuses for why he hasn’t paid. I don’t care. If this asshole ever shows up at the condo, I’ll stick my foot up his enormous ass.

As I said previously, I don’t personally have anything against my Section 8 neighbors. What I do have are questions. Questions that aren’t allowed to be asked in polite politically correct company. So I’ll ask them here:

How can the Federal government subsidize Section 8 housing in resort communities?
How much do the Obamanistas pay to Fat Pete and how much do the tenants pay?
How many people in the condo are receiving SSDI payments?
Is the 1st of the month their favorite day?
When did being extremely fat qualify someone for handicap parking and SSDI?
Did everyone in the condo vote for Obama in 2012?
Would anyone in the condo ever seek a real wage paying job if it meant their welfare checks would stop?
How does a family that can’t afford to rent an apartment, with no one working, afford two vehicles, cable TV, internet service, and cell phones?
Do these people feel any shame and will they ever attempt to get off the dole?
Does the able bodied man pay taxes on the cash payments he receives for doing landscaping?
How long can this country subsidize such behavior on such a large scale?
What will happen when the millions of entitlement recipients have their cashflow cut off when the system collapses?

In the meantime, Section 8 continues to do great.

QUOTE OF THE DAY

There’s a reason that education sucks, and it’s the same reason it will never ever ever be fixed. It’s never going to get any better, don’t look for it. Be happy with what you’ve got. Because the owners of this country don’t want that. I’m talking about the real owners now, the big, wealthy, business interests that control all things and make the big decisions.

Forget the politicians, they’re irrelevant.

Politicians are put there to give you that idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations, and they’ve long since bought and paid for the Senate, the Congress, the State Houses, and the City Halls. They’ve got the judges in their back pockets. And they own all the big media companies so they control just about all the news and information you get to hear.

They’ve got you by the balls.

They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest. You know something, they don’t want people that are smart enough to sit around their kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago.

They don’t want that, you know what they want?

They want obedient workers, obedient workers. People who are just smart enough to run the machines and do the paperwork and just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it.

And now they’re coming for your social security money.

They want your fucking retirement money; they want it back so they can give it to their criminal friends on Wall Street. And you know something? They’ll get it. They’ll get it all from you sooner or later because they own this fucking place. It’s a big club and you ain’t in it! You and I are not in the Big Club. By the way, it’s the same big club they use to beat you in the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to believe, what to think and what to buy.

The table is tilted folks, the game is rigged.

Nobody seems to notice, nobody seems to care. Good honest hard working people, white collar, blue collar, it doesn’t matter what color shirt you have on. Good honest hard working people continue, these are people of modest means, continue to elect these rich cocksuckers who don’t give a fuck about them. They don’t give a fuck about you. They don’t give a fuck about…give a fuck about you! They don’t care about you at all, at all, at all.

And nobody seems to notice, nobody seems to care.

That’s what the owners count on, the fact that Americans are and will probably remain willfully ignorant of the big red, white, and blue dick that’s being jammed up their assholes everyday. Because the owners of this country know the truth, it’s called the American Dream, because you have to be asleep to believe it.

George Carlin

AVAILABLE

“Facts do not cease to exist because they are ignored.” – Aldous Huxley

Six months ago I wrote an article called Are You Seeing What I’m Seeing?, describing my observations while traveling along Ridge Pike in Montgomery County, PA and motoring to my local Lowes store on a Saturday. My observations were in conflict with the storyline portrayed by the mainstream media pundits, Ivy League PhD economists, Washington politicians, and Wall Street shills. It is clear now that I must have been wrong. No more proof is needed than the fact the Dow has gone up 1,500 points, or 11%, since I wrote the article. Everyone knows the stock market reflects the true health of the nation – multi-millionaire Jim Cramer and his millionaire CNBC talking head cohorts tell me so. Ignore the fact that the bottom 80% only own 5% of the financial assets in this country and are not benefitted by the stock market in any way.

The mainstream corporate media that is dominated by six mega-corporations (Time Warner, Disney, Murdoch’s News Corporation, Comcast, Viacom, and Bertelsmann), has one purpose as described by the master of propaganda – Edward Bernays:

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.

These media corporations’ task is to use propaganda and misinformation to protect the interests of the status quo. The ruling class has the power to manipulate public opinion, obscure the truth, alter government data, and outright lie, but they can’t control the facts and reality smacking the average person in the face every day. Based on the performance of the stock market and the storyline of economic recovery being peddled by the corporate media, the facts must surely support their contention. Here are a few facts about what has really happened in the last six months since I wrote my article:

The working age population has grown by 1.1 million, the number of employed Americans is up 500k, while the number of people who have left the labor force has gone up by 600k. The BLS reports the unemployment rate has fallen without blinking an eye or turning red with embarrassment.
The number of Americans entering the Food Stamp Program in the last six months totaled 1 million, bringing the total to 47.8 million, or 20% of all households (up 15 million since the Obama economic recovery began in December 2009).
Existing home sales have increased by a scintillating 2.9% on a seasonally adjusted annual basis and average prices have fallen by 6% in the last six months. It is surely a great sign that 32% of all home sales are to Wall Street investors and 25% are either foreclosure sales or short sales. A large percentage of the remaining sales are funded by 3% down FHA government backed loans.
There were 31,000 new homes sales in January versus 34,000 new home sales six months prior. Through the magic of seasonal adjustment, this translates into a 15% increase.
Single family housing starts were 41,600 in February versus 51,400 six months prior. Even using seasonal adjustments, the government drones can only report a pathetic 4.7% annualized increase and flat starts over the last three months, with mortgage rates at all-time lows.
The National Debt has gone up by $750 billion in the last six months, while Real GDP has gone up by less than $150 billion.
Real hourly earnings have not increased in the last six months.
Consumer debt has risen by $65 billion as the Federal Government has doled out student loans like candy and auto loans (through the 80% government owned Ally Financial – aka GMAC, aka Ditech, aka ResCap) like crack dealer in West Philly.
The Federal Reserve has increased their balance sheet by $385 billion in the last six months by buying toxic mortgages from Wall Street banks and the majority of Treasuries issued by the government to fund the $1 trillion annual deficits being produced by the Obama administration. It now totals $3.2 trillion, up from $900 billion in September 2008, and headed to $4 trillion before this year is out.
Retail sales have increased by less than 2% over the last six months and are barely 1% above last February. On an inflation adjusted basis, retail sales are falling. Other than internet sales and government financed auto sales, every other retail category is negative year over year. This is reflected in the poor sales and earnings reports from JC Penney, Sears, Best Buy, Wal-Mart, Target, Lowes, Kohl’s, Darden, McDonalds, and Yum Brands. I’m sure next quarter will be gangbusters, with the Obama payroll tax increase, Obamacare premium increases, 15% surge in gasoline prices, and continued inflation in food and energy.

Considering that 71% of GDP is dependent upon consumer spending (versus 62% in 1979 before the financialization of America), the dreadful results of retailers and restaurants even before the Obama tax increases confirms the country has been in recession since the second half of 2012. In 1979 the economy was still driven by domestic investment that accounted for 19% of GDP. Today, it wallows at all-time lows of 13%. In addition, our trade deficits, driven by debt fueled consumption, subtract 3.5% from GDP. These facts are reflected in the depressed outlook of small business owners who are the backbone of growth, hiring and entrepreneurship in this country. Small businesses of 500 employees or less employ half of all the private industry workers in the country and account for 65% of all new jobs created. There are approximately 27 million small businesses versus 18,000 large businesses. The chart below does not paint an improving picture. The small business optimism has dropped from an already low 92.8 in September 2012 to 90.8 in March 2013.

The head of the NFIB couldn’t make the situation any clearer:

“While the Fortune 500 is enjoying record high earnings, Main Street earnings remain depressed. Far more firms report sales down quarter over quarter than up. Washington is manufacturing one crisis after another—the debt ceiling, the fiscal cliff and the Sequester. Spreading fear and instability are certainly not a strategy to encourage investment and entrepreneurship. Three-quarters of small-business owners think that business conditions will be the same or worse in six months. Until owners’ forecast for the economy improves substantially, there will be little boost to hiring and spending from the small business half of the economy.” — NFIB chief economist Bill Dunkelberg

If consumers, who account for 71% of the economy, aren’t spending, and small business owners, who do 65% of all the hiring in the country, are petrified with insecurity, why is the stock market hitting all-time highs and the corporate media proclaiming happy days are here again? It can be explained by the distribution of wealth and income in this country. Every media pundit, politician, Wall Street shill, Ivy League PhD economist, and corporate titan you see on CNBC, Fox or any corporate media outlet is a 1%er or better. The chart below shows the bottom 99% saw their real incomes decline between 2009 and 2011, while the top 1% reaped the stock market gains and corporate bonuses for using “creative” accounting to generate record corporate profits. The trend in 2012 through today has only widened this gap, as real worker wages have continued to decline and the stock market has advanced another 20%.

The feudal financial industry lords are feasting on caviar and champagne in their mountaintop manors while the serfs and peasants scrounge in the gutters for scraps and morsels. This path has been chosen by the king (Obama) and enabled by his court jester (Bernanke). Money printing and inflation are their weapons of choice. We are living in a 21^st Century version of the Dark Ages.

On the Road Again

I’ve been baffled by a visible disconnect between deteriorating data and the storyline being sold to the ignorant masses by the financial elitists that run the show. The websites and truthful analysts that I respect and trust (Zero Hedge, Mish, Jesse, Karl Denninger, John Hussman, David Stockman, Financial Sense and a few others) provide analytical evidence on a daily basis that confirm my view that our economic situation is worsening. We are all looking at the same data, but the pliable faux journalists that toil for their corporate masters spin the data in a manner designed to mislead and manipulate in order to mold public opinion, as Edward Bernays taught the invisible ruling class. As you can see, numbers and statistical data can be spun, adjusted, and manipulated to tell whatever story you want to depict. I prefer to confirm or deny my assessment with my observations out in the real world. I spend 12 hours per week cruising the highways and byways of Montgomery County and Philadelphia as I commute to and from work and shuttle my kids to guitar lessons, friends’ houses, and local malls. I can’t help but have my antenna attuned to what I’m seeing with my own eyes.

As I detailed in my previous article, Montgomery County is relatively affluent area with the dangerous urban enclaves of Norristown and Pottstown as the only blighted low income, high crime areas in the 500 square mile county of 800,000 people. The median household income and median home prices are 50% above the national averages. Major industries include healthcare, pharmaceuticals, insurance and information technology. It is one of only 30 counties in the country with a AAA rating from Standard & Poors (as if that means anything). On paper, my county appears to be thriving and healthy, with white collar professionals living an idyllic suburban existence. One small problem – the visual evidence as you travel along Welsh Road towards Montgomeryville or Germantown Pike towards Plymouth Meeting reveals a decaying infrastructure, dying retail meccas, and miles of empty office complexes.

I don’t think my general observations as I drive around Montgomery County are colored by any predisposition towards negativity. I see a gray winter like pallor has settled upon the land. I see termite pocked wooden fences with broken and missing slats. I see sagging porches. I see leaky roofs with missing tiles. I see vacant dilapidated hovels. I see mold tainted deteriorating siding on occupied houses. I see weed infested overgrown yards. I see collapsing barns and crumbling farm silos. I see houses and office buildings that haven’t been painted in 20 years. I see clock towers in strip malls with the wrong time. I see shuttered gas stations. I see retail stores with lights out in their signs. I see trees which fell during Hurricane Sandy five months ago still sitting in yards untouched. I see potholes not being filled. I see disintegrating highway overpasses and bridges. I constantly see emergency repairs on burst water mains. I see malfunctioning stoplights. I see fading traffic signage. I see regional malls with rust stained walls beneath their massive unlit Macys, JC Penney and Sears logos. I see hundreds of Space Available, For Lease, For Rent, Vacancy, For Sale and Store Closing signs dotting the suburban landscape. These sights are in a relatively affluent suburban county. When I reach West Philly, it looks more like Dresden in 1945.

Dresden – 1945 Philadelphia – 2013

I moved to my community in 1995 when the economy was plodding along at a 2.5% growth rate. The housing market was still depressed from the early 90s recession. The retail strip centers and larger malls in my area were 100% occupied. Office parks were bustling with activity. Office vacancy rates were the lowest in twenty years during the late 1990s. National GDP has grown by 112% (only 50% after adjusting for inflation) since 1995, with personal consumption rising 122%. Domestic investment has only grown by 80%, but imports skyrocketed by 204%. If the economy has more than doubled in the last 18 years, how could retail strip centers in my affluent community have 40% to 70% vacancy rates and office parks sit vacant for years? The answer is that Real GDP has not even advanced by 50%. Using a true rate of inflation, not the bastardized, manipulated, tortured BLS version, shows the country has essentially been in contraction since the year 2000.

The official government sanctioned data does not match what I see on the ground, but the Shadowstats version of the data explains it perfectly.

My observations also don’t match up with the data reported by the likes of Reis, Trepp, Moody’s and the Federal Reserve. Reis reports a national vacancy rate of 17.1% for offices, barely below its peak of 17.6% in late 2010. Vacancy rates are 35% above 2007 levels and more than double the rates in the late 1990s. But what I realized after digging into the methodology of these reported figures is the true rates are significantly higher. First you must understand that Reis and Trepp are real estate companies who are in business to make money from commercial real estate transactions. It is in their self -interest to report data in the most positive manner possible – they’ve learned the lessons of Bernays. These mouthpieces for their industry slice and dice the numbers according to major markets, minor markets, suburban versus major cities, and most importantly they only measure Class A office space.

I didn’t realize the distinctions between classes when it comes to office space. The Building Owners and Managers Association describes the classes:

Class A office buildings have the “most prestigious buildings competing for premier office users with rents above average for the area.” Class A facilities have “high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.” Class B office buildings as those that compete “for a wide range of users with rents in the average range for the area.” Class B buildings have “adequate systems” and finishes that “are fair to good for the area,” but that the buildings do not compete with Class A buildings for the same prices. Class C buildings are aimed towards “tenants requiring functional space at rents below the average for the area.”

So we have landlords self-reporting Class A vacancy rates in big markets to a real estate company that reports them without verification. Is it in a landlord’s best interest to under-report their vacancy rate? You bet it is. If potential tenants knew the true vacancy rates, they would be able to negotiate much lower rents. There is a beautiful Class A 77,000 square foot building near my house that was built in 2004. Nine years later there is still a huge Space Available sign in front of the building and it appears at least 50% vacant.

I pass another Class A property on Welsh Road called the Gwynedd Corporate Center that consists of three 40,000 square foot buildings in a 13 acre office park. It was built in 1998 and is completely dark. The vacancy rate is 100%. As I traveled down Germantown Pike last week I noted dozens of Class A office complexes with Space Available signs in front. I’m absolutely certain that vacancy rates in Class A offices in Montgomery County exceed 25%. When you expand your horizon to Class B and Class C office space, vacancy rates exceed 50%. The only booming business in my suburban paradise is Space Available sign manufacturing. We probably import those from China too. Despite the spin put on the data by the real estate industry, Moody’s reported data supports my estimates:

The values of suburban offices in non-major markets are 43% below 2007 levels.
Industrial property values in non-major markets are 28% below 2007 levels.
Retail property values in non-major markets are 35% below 2007 levels.

The data being reported by Reis regarding vacancies in strip malls and regional malls is also highly questionable, based on my real world observations. The reported vacancy rates of 8.6% for regional malls and 10.7% for strip malls, barely below their 2011 peaks, are laughable. Again, there is no benefit for a landlord to report their true vacancy rate. The truth will depress rents further. This data is gathered by surveying developers and landlords. We all know how reputable and above board real estate professionals are – aka David Lereah, Larry Yun. A large strip mall near my house has a 70% vacancy rate, with another, one mile away, with a 50% vacancy rate. Anyone with two eyes and functioning brain that has visited a mall or driven past a strip mall knows that vacancy rates are at least 15%, the highest in U.S. history. These statistics don’t even capture the small pizza joints, craft shops, antique outlets, candy stores, book stores, gas stations and myriad of other family run small businesses that have been forced to close up shop in the last five years.

The disconnect between reality, the data reported by the mouthpieces of the status quo, and financial markets is as wide as the Grand Canyon. Even the purveyors of false data can’t get their stories straight. Trepp has been reporting steadily declining commercial delinquency rates since July 2012, when they had reached 10.34%, the highest level since the early 1990s. The decline is being driven solely by apartment complexes and hotels. Industrial and retail delinquencies continue to rise and office delinquencies are flat over the last three months. Again, the definition of delinquent is in the eye of the beholder.

The quarterly delinquency rates on commercial loans reported by the Federal Reserve is less than half the rate being reported by Trepp, at 4.13%. Bennie and his band of Ivy League MBA economists have reported 10 consecutive quarters of declining commercial loan delinquency rates. This is in direct contrast to the data reported by Trepp that showed delinquencies rising during 2012.

	Real estate loans
	All	Booked in domestic offices
	All	Residential ¹	Commercial ²	Farmland
2012:4	7.57	10.07	4.13	2.67
2011:4	8.48	10.34	6.11	3.26
2010:4	9.12	10.23	7.96	3.59
2009:4	9.59	10.54	8.73	3.42
2008:4	6.04	6.67	5.49	2.28
2007:4	2.91	3.08	2.75	1.51
2006:4	1.70	1.95	1.32	1.41

The data being reported doesn’t pass the smell test. Commercial vacancy rates are at or above the levels seen during the last Wall Street created real estate crisis in the early 1990’s. During 1991/1992 commercial loan delinquency rates ranged between 10% and 12%. Today, with the same or higher levels of vacancy, the Federal Reserve reports 4% delinquency rates. When the latest Wall Street created financial collapse struck in 2008 and commercial property values crashed while vacancy rates soared, there were dire predictions of huge loan losses between 2010 and 2012. Commercial real estate loans generally rollover every 5 to 7 years. The massive issuance of dodgy subprime commercial loans between 2005 and 2007 would come due between 2010 and 2012. But miraculously delinquency rates have supposedly plunged from 8.78% in mid-2010 to 4.13% today. The Federal Reserve decided in 2009 to look the other way when assessing whether a real estate loan would ever be repaid. A loan isn’t considered delinquent if the lender decides it isn’t delinquent. The can’t miss strategy of extend, pretend and pray was implemented across the country as mandated by the Federal Reserve. This pushed out the surge in loan maturities to 2014 – 2016.

In an economic system that rewarded good choices and punished those who took ridiculous undue risks and lost, real estate developers, mall owners, and office landlords would be going bankrupt in large numbers and loan losses for Wall Street Too Stupid to Succeed banks would be in the billions. Developers took out loans in the mid-2000’s which were due to be refinanced in 2012. The property is worth 35% less and the rental income with a 20% vacancy rate isn’t enough to cover the interest payments on the loan. The borrower would have no option but to come up with 35% more cash and accept a higher interest rate because the risk of default had risen, or default. Instead, the lenders have pretended the value of the property hasn’t declined and they’ve extended the term of the loan at a lower interest rate. This was done on the instructions of the Federal Reserve, their regulator. The plan is dependent on an improvement in the office and retail markets. It seems the best laid plans of corrupt sycophant central bankers are going to fail.

Eyes Wide Open

There are 1,300 regional malls in this country, with most anchored by a JC Penney, Sears, Barnes & Noble, or Best Buy. The combination of declining real household income, aging population, lackluster employment growth, rising energy, food and healthcare costs, mounting tax burdens, and escalating on-line purchasing will result in the creation of 200 or more ghost malls over the next five years. The closure of thousands of big box stores is baked in the cake. The American people have run out of money. They have no equity left in their houses to tap. The average worker has only $25,000 of retirement savings and they are taking loans against it to make the mortgage payment and put food on the table. They can’t afford to perform normal maintenance on their property and are one emergency away from bankruptcy. In a true cycle of doom, most of the jobs “created” since 2009 are low skill retail jobs with little or no benefits. As storefronts go dark and more “Available” signs are erected in front of these weed infested eyesores, more Americans will lose their jobs and be unable to do their 71% part in our economic Ponzi scheme.

The reason office buildings across the land sit vacant, with mold and mildew silently working its magic behind the walls and under the carpets, is because small businesses are closing up shop and only a crazy person would attempt to start a new business in this warped economic environment of debt dependent diminishing returns. The 27 million small businesses in the country are fighting a losing battle against overbearing government regulations, increasingly heavy tax burdens, operating cost inflation, Obamacare mandates, a low skill poorly educated workforce, and customers with diminishing resources and declining disposable income. Small business owners are not optimistic about the future because they don’t have a sugar daddy like Bernanke to provide them with free money and a promise to bail them out if their high risk investments go bad. With small businesses accounting for 65% of all new hiring in this country and looming healthcare taxes, mandates, regulations and penalties approaching like a freight train, there is absolutely zero probability that office buildings will be filling up with new employees in the next few years. With hundreds of billions in commercial real estate loans coming due over the next three years, over 60% of the loans in the office and retail category, vacancy rates at record levels, and property values still 30% to 40% below the original loan values, a rendezvous with reality awaits. How long can bankers pretend to be paid on loans by developers who pretend they are collecting rent from non-existent tenants who are selling goods to non-existent customers? The implosion in the commercial real estate market will also blow a gaping hole in the Federal Reserve balance sheet, which is leveraged 55 to 1.

I regularly drive along Schoolhouse Road in Souderton. It is a winding country road with dozens of small manufacturing, warehousing, IT, aerospace, auto repair, bus transportation, retail and landscaping businesses operating and trying to scratch out a small profit. Most of these businesses have been operating for decades. I would estimate that most have annual revenue of less than $2 million and less than 100 employees. It is visibly evident they have not been thriving, as their facilities are looking increasingly worn down and in disrepair. Their access to credit has been reduced since the 2008 crisis, as only the Wall Street banks and mega-corporations with Washington lobbyists received Bennie Bucks and Obama stimulus pork. These small businesses have been operating on razor thin margins and unable to invest in their existing facilities or expand their businesses. The tax increases just foisted upon small business owners and their employees, along with Obamacare mandates which will drive healthcare costs dramatically higher, and waning demand due to lack of income, will surely push some of these businesses over the edge. There will be some harsh lessons learned on Schoolhouse Road over the next few years. I expect to see more of these signs along Schoolhouse Road and thousands of other roads in the next few years.

The mainstream media pawns, posing as journalists, have not only gotten the facts wrong regarding the current situation, but their myopia extends into the near future. The perpetual optimists that always see a pot of gold at the end of the rainbow are either willfully ignorant or a product of our government run public education system and can’t perform basic mathematical computations. As pointed out previously, consumer spending drives 71% of our economy. As would be expected, the highest level of annual spending occurs between the ages of 35 to 54 years old when people are in their peak earnings years. Young people are already burdened with $1 trillion of government peddled student loan debt and are defaulting at a 20% rate because there are no decent jobs available. Millions of Boomers are saddled with underwater mortgages, prodigious levels of credit card and auto loan debt, with retirement savings of $25,000 or less. Anyone expecting the young or old to ramp up spending over the next decade must be a CNBC pundit, University of Phoenix MBA graduate or Ivy League trained economist.

There will be 10,000 Boomers per day turning 65 years old for the next 18 years. Consumers in the 65-74 age segment spend 28% less on average than during their peak years. It is estimated that between 2010 and 2020 there will be approximately 14.5 million more consumers aged 65 or older. The number of Americans in their peak spending years will crash over the next decade. This surely bodes well for our suburban sprawl, mall based, cheap energy dependent, debt fueled society. Do you think this will lead to a revival in retail and office commercial real estate?

We’ve got $1 trillion annual deficits locked in for the next decade. We’ve got total credit market debt at 350% of GDP. We’ve got true unemployment exceeding 20%. We’ve had declining real wages for thirty years and no change in that trend. We’ve got an aging, savings poor, debt rich, obese, materialistic, iGadget distracted, proudly ignorant, delusional populace that prefer lies to truth and fantasy to reality. We’ve got 20% of households on food stamps. We’ve got food pantries, thrift stores and payday loan companies doing a booming business. We’ve got millions of people occupying underwater McMansions in picturesque suburban paradises that can’t make their mortgage payments or pay their utility bills, awaiting their imminent eviction notice from one of the Wall Street banks that created this societal catastrophe.

We’ve got a government further enslaving the middle class in student loan debt with the false hope of new jobs that aren’t being created. We’ve got a shadowy unaccountable organization, owned and controlled by the biggest banks in the world, that has run a Ponzi scheme called a fractional reserve lending system for 100 years, and inflated away 96% of the purchasing power of the U.S. dollar. We’ve got a self-proclaimed Ivy League academic expert on the Great Depression (created by the Federal Reserve) who has tripled the Federal Reserve balance sheet on his way to quadrupling it by year end, who has promised QE to eternity with the sole purpose of enriching his benefactors while impoverishing senior citizens and the middle class. He will ultimately be credited in history books as the creator of the Greater Depression that destroyed the worldwide financial system and resulted in death, destruction, chaos, starvation, mayhem and ultimately war on a grand scale. But in the meantime, he serves the purposes of the financial ruling class as a useful idiot and will continue to spew gibberish and propaganda to obscure their true agenda.

It is time to open your eyes and arise from your stupor. Observe what is happening around you. Look closely. Does the storyline match what you see in your ever day reality? It is them versus us. Whether you call them the invisible government, ruling class, financial overlords, oligarchs, the powers that be, ruling elite, or owners; there are powerful wealthy men who call the shots in this global criminal enterprise. Their names are Dimon, Corzine, Blankfein, Murdoch, Buffett, Soros, Bernanke, Obama, Romney, Bloomberg, Fink, among others. They are using every means at their disposal to retain their control and power over the worldwide economic system and gorge themselves like hyenas upon the carcasses of a crippled and dying middle class. They have nothing but contempt and scorn for the peasants. They’re your owners and consider you as their slaves. They don’t care about you. They think the commoners are unworthy to be in their presence. Time is growing short for these psychopathic criminals. No amount of propaganda can cover up the physical, economic, social, and psychological descent afflicting our world. There’s a bad moon rising and trouble is on the way. The time for hard choices is coming. The words of Edward Bernays represent the view of the ruling class, while the words of George Carlin represent the view of the working class.

“There’s a reason that education sucks, and it’s the same reason it will never ever be fixed. It’s never going to get any better, don’t look for it. Be happy with what you’ve got. Because the owners of this country don’t want that. I’m talking about the real owners now, the big, wealthy, business interests that control all things and make the big decisions. Forget the politicians, they’re irrelevant.

My Life as a Caregiver and How it Affected my Future

Inspirational story sent in by a reader named Cameron. These are the stories that teach you what is really important in life. Family, friends and community are an unbeatable combination. We should all remember that.

At a time when my wife and I should have been hanging Christmas ornaments and preparing to spend the holidays with our three month old daughter Lily, our lives were torn apart by terrible news. My wife, Heather, had been feeling ill for a while after giving birth to Lily. When we started to think her tiredness was more than just new mother symptoms, we booked an appointment with our doctor and received the heartbreaking news – Heather had mesothelioma, a rare and extremely deadly form of cancer.
We were not familiar with this disease and our doctor carefully explained as much basic information as he could. Heather and I were completely stunned as we listened to him list the potential outcome of the disease and how imperative it was that we immediately get her to see a specialist. It did not take long for us to make plans to travel to Boston to get her in to see a reputable doctor who had long-term experience in helping patients fight mesothelioma.
As we were leaving the doctor’s office after getting the diagnosis, I could tell how worried and anxious Heather was. I was fighting my own fears and I realized I would have to become a caregiver for her. Heather’s face revealed all of her anxieties, and I tried desperately to hide the worries that were bubbling up inside of me as I made the decision to do everything I could do to take care of her and help her to get better.
Facing the possibility of your wife dying due to cancer is not something anyone should have to go through, but it happens to numerous people every single day. I can only say that it is important to let your determination take priority in helping your loved one to get better.
Becoming Heather’s chief caregiver expanded my already full list of things to do. Heather and I both had been working full-time while also taking care of Lily. Due to her illness, Heather had to leave her job and focus on getting better. I stopped working full-time and worked only part-time hours so I could pick up the slack in other areas. I did my best to be there for Heather every moment possible, and I still tried to spend as much time with Lily as I could. My responsibilities and my anxiety about what could happen overwhelmed me, and many days I felt like I simply couldn’t go on. Luckily, I found out that we did not have to fight this battle alone. Family, friends and even strangers came through with invaluable support when we needed it most.

Members of our community helped us financially, and they also provided immensely helpful care for Lily. It would have been difficult beyond belief to try to survive the whole ordeal without the help that was so generously given to us. If I had to give one piece of advice to others in the caregiver role today, it would be to accept every offer of help that comes your way. The support you receive from others can be a huge weight off your shoulders, and will remind you that you are not alone in the fight.
After months of difficult treatments for mesothelioma, Heather was able to defy the odds and beat this terrible cancer. While she was originally told she may have only 15 months to live, she has now been healthy and happy for over 6 years. Now, we wish to help spread hope to others in their own cancer battles by sharing our story of success over cancer.

WTF WASTE OF TAXPAYER DOLLARS OF THE DAY

I don’t know why stories like the one below bother me so much, but they make my blood boil. Lansdale is an aging borough with 16,000 residents. It had 18,500 residents in 1970. For the math challenged, this means the population is declining. Median household income is $46,000, below the national average. The population has 20% more senior citizens than the national average. There is no industry. The white population declined from 85% in 2000 to 75% in 2010. You know a town is in decline when politicians propose a mural program to beautify the vacant buildings. A few years ago, the politicians that run this town wasted $500,000 of taxpayer money trying to create a perfoming arts center. No one came. It closed. There is talk of doing it again.

The biggest business in the borough is the SEPTA train station. It is old and dirty. Lansdale has its fair share of People of Wal-Mart types. Its crime rate is fairly high. It is a microcosm of America. It is in terminal decline.

The politicians who run this place refuse to see the writing on the wall. They have thrown gobs of money at a delusional developer to build a massive complex of high end apartments, retail, parking garages, and now a skate park. This developer is going to build 250 high end apartments in a borough that hasn’t had population growth since the 1960s. He is going to build 20,000 square feet of retail when there is 100,000 square feet of vacant retail storefronts within 5 miles of this location. They are touting trails and skateparks that lead to nowhere. The developer promises millions of benefits to the borough. It’s all bullshit.

The part that cooks my goose, is the application for a grant of $700,000 from the State of PA for a skateboard park. The freaking State of PA is bankrupt due to the unfunded pension obligations to government workers. The state owes billions more than it has. But local and state government drone politicians act like the $700,000 is just sitting around to be spent on skateparks – built within yards of commuter train tracks. That’s fucking brilliant. The idiocy of these politicians and real estate developers is breathtaking to behold. This project will be an epic disaster. Taxpayer money will be pissed away. The developer will go bankrupt midway through the project and Lansdale will continue its downward spiral. So it goes.

Lansdale seeking grant funds for Madison Lot skatepark

By DAN SOKIL
[email protected]

Wednesday, March 20,2013

Rendering of the proposed Madison Parking Lot redevelopment project, as presented by Equus Capital Partners to Lansdale Parking Authority, March 13 2013. Courtesy of Lansdale borough.

LANSDALE — A week after the public got its first look at updated plans for redevelopment, including a skate park toward the rear of the Madison Parking Lot, the borough is seeking more grant money to help with that project.

On Wednesday night, council voted unanimously to apply for $700,000 in state grant funding that council vice president Mary Fuller said will come with no cost to the borough.

“There is a match portion — a 50 percent match — but I’m pleased to announce that the developer will pay the match so it’s a total win-win for us,” Fuller said.

Last week that developer, Equus Capital Partners (formerly known as BPG Properties) publicly displayed its latest plans to redevelop the borough’s Madison Parking Lot, with a skate park and pedestrian overpass added to the project’s initial intent of building a parking garage, apartments and retail space atop the current lot and vacant fields behind.

One of those fields, located below the water tower near Third Street and Richardson Avenue, would become the future site of a skate park for a community Fuller said was “ecstatic” to learn of the new plans.

“I’m getting well-verbalized, well-thought-out emails from people who understand what this means, are excited about it, and want to be involved in it. They can’t wait to help,” she said.

Those offers have ranged from volunteers to host skateboarding lessons to assisting with the development process, and Fuller said “these are people from all ages, from their 40s and 50s down into the 30s, 20s and teens.”

Borough officials hope all of those users stay involved as the project moves through the land development approval process, and Fuller said that buy-in will help create a desire for the skate community to take care of that park.

“If they’re invested in the process, if they’re users, then you can be damn sure they’re going to keep (the park) clean and neat, and be on the lookout for others who may want to damage or vandalize or graffiti,” she said.

The grant money would come from the state’s Department of Conservation and Natural Resources, as part of its Community Conservation Partnerships Program (C2P2) meant to encourage green park projects, trail connection and outdoor recreation — which the skate park and trails promote.

“You can walk there on the trail, you can skateboard to it on the trail, you can drive you can walk, you can take the train to it,” Fuller said.

That trail connection will help connect Hatfield and Upper Gwynedd connections with downtown Lansdale. Upon its completion, Fuller said, Lansdale will be the first municipality in the county to finish its stretch of the Liberty Bell Trail, which will run from Stony Creek Park at Hancock Street, along the railroad tracks past the Andale Green development, into downtown past the borough municipal complex and through the Madison lot to connect with Hatfield west of Third Street.

Fuller and borough Manager Timi Kirchner both emphasized that the grant funding would be used for public improvements on land that would be owned by Equus but used by the public, such as the trails and the skate park.

“There have been questions about whether or not the rants are going for the developer’s benefit, and that’s simply not the case,” Kirchner said..

“The grants are for a trail, for a skate park, and for improvements on Madison Street. These are all public areas, that will remain (public), once this project is up and running and spectacularly successful,” she said.

Several other council members thanked to the team of borough officials and consultants that helped prepare and present the plans last week. The officials included councilman Dan Dunigan, who chairs the borough Parking Authority, which agreed to sell the lot to Equus.

“I’ve looked at the numbers dozens and dozens of times and it’s still, frankly, staggering” to see the total benefit to the borough the project will bring, he said.

Borough fact sheets available at the council meeting show maps of the project and its relationship to other projects under active development in Lansdale, and a Parking Authority fact sheet details the projected $748,000 in annual revenue and $965,000 in one-time revenue the project should create.

The project has already been awarded $2.5 million in state grant money to assist with other public improvements and Equus and the Parking Authority submitted further grant applications last month seeking $800,000 more for remediation work on that property.

Long term benefits to the borough total over $20 million when the costs of the nearby SEPTA garage and pedestrian bridge are included, and Dunigan encouraged the public to attend a special Parking Authority meeting on March 27 when that entity could approve the latest plans.

“That will be the jumping-off point, where the folks from Equus can head for the subdivision and land planning phases and we can get this ball rolling,” he said.

LOBSTER IN A COAL MINE

I saw the headline this morning that Darden’s earnings declined, but THEY BEAT ESTIMATES!!!!

WOW!!! If they beat the estimates that have been dramatically decreased over the last three months than all must be well. What a fucking joke Wall Street and the MSM are.

Their earnings plunged by 18% over last year. Their comparable store sales are spiraling downward. These idiots took on $1 billion of debt in the last year as they have bought back $400 million of their own stock and have added 150 new restaurants.

Below is a chart from their earning release. Sales in February were rapidly deteriorating. The Obama tax increases, Obamacare health insurance premium increases, gasoline price increases, and “strong” jobs recovery are working their magic on the middle class.

Darden is the lobster in the coal mine. When the obese middle class are doing OK, they head out to Olive Garden for unlimited breadsticks or Red Lobster for unlimited crab legs. The middle class is not feeling OK. Ignore the MSM bullshit and look at the facts. The recession began last year and it’s getting worse. The proof is in the breadsticks.

http://finance.yahoo.com/news/darden-restaurants-reports-third-quarter-110000313.html

Fiscal 2013 December, January and February U.S. Same-Restaurant Sales Results

Darden reported U.S. same-restaurant sales for the fiscal months of December, January and February as follows:


Olive Garden	December	January	February
Same-Restaurant Sales	-2.5%	-0.6%	-9.1%
Same-Restaurant Traffic	-3.7%	-0.9%	-7.0%
Pricing	2.3%	2.1%	1.2%
Menu-mix	-1.2%	-1.7%	-3.4%

Red Lobster	December	January	February
Same-Restaurant Sales	-7.1%	-5.2%	-7.5%
Same-Restaurant Traffic	-5.5%	-1.7%	-6.0%
Pricing	1.2%	1.3%	1.2%
Menu-mix	-2.8%	-4.8%	-2.7%

LongHorn Steakhouse	December	January	February
Same-Restaurant Sales	-3.6%	2.5%	-3.0%
Same-Restaurant Traffic	-4.4%	0.1%	-2.9%
Pricing	2.0%	2.0%	2.0%
Menu-mix	-1.3%	0.4%	-2.2%

YOU ARE ALREADY BEING CYPRUSED, BECAUSE MATH IS HARD

The internet has been abuzz all week about the plan to steal money directly from bank depositors in Cyprus. The Eurocrats want to abscond with 3% to 15% of bank depositor cash as a bribe to keep from letting the Cyprus banks collapse under the weight of bad debt created by the policies of the Eurocrats. There is outrage among the critical thinking alternate media and yawns from the Larry Fink’s and Barry Ritholtz’ of the world who depend on muppets to keep investing with them. The MSM does their usual propaganda spiel about the FDIC backing up trillions in deposits with their $25 billion fund.

This could never happen in America. Right?

It has already happened and continues this very second. The ruling financial class are so supremely confident in your lack of math skills that they openly and blatantly steal money from your savings account every second of the day. They have been doing it since December 2008.

I take you back to the days of yesteryear – 2006 and 2007. In those pre-crisis days you could put your money in a Vanguard Money Market fund and earn a 5% return. Over this two year period, inflation averaged 3.2% according to our friends at the BLS. That means you were getting a REAL RETURN of 1.8%. Even if you don’t believe the BLS numbers, you weren’t losing by keeping money in a savings account.

Then the Wall Street/Federal Reserve created financial collapse occured in late 2008. In order to protect his owners on Wall Street, Helicopter Ben swooped in with free money for his boys in December 2008. He lowered the Federal Funds Rate to between 0% and .25% and has left the rate at this level to this day. You can see from the chart below that the last time the Fed dropped rates below 2% for a significant time period, they created the housing bubble. I wonder what 0% interest rates over 4.3 years will create?

Now we get to the math. By lowering the Fed Fund Rate to near zero, Ben has thrown savers and senior citizens under the bus. For the last 4.3 years savers have been able to get a .15% return on their money. Over this same time frame the CPI has risen 10.4%. Let’s put this into a real life example.

Suppose grandma has life savings of $100,000 that she needs to live off of to supplement her meager $13,000 of Social Security income. Back in 2007 she could earn $5,000 per year in interest to help her make ends meet. Since December 2008 she has been able to earn a total of $650 in interest at .15% rates. That means she would have $100,650 today.

But one problem. The 10.4% inflation has resulted in the $100,650 only having $90,200 of purchasing power today. This means that Ben Bernanke has already stolen 10% of your savings and handed it to his banker buddies. He is much more devious than the Eurocrats. They are being too transparent. Ben understands that our government run public school system matriculates functionally illiterate dullards into society and they will never figure out the beauty of inflationary stealing.

Of course it is much greater than the 10% calculated above. We know that true inflation is at least 2% greater than the BLS manipulated data. Therefore, the ruling class has actually stolen closer to 20% of your savings since December 2008.

And the good news is that Bennie has absolutely no intention of raising the Federal Funds Rate for a few more years. By 2016 he will have stolen another 20% of your savings and no one will be protesting or rioting in the streets, because math is hard.

You’ve been CYPRUSED and didn’t even know it.