Comrade Moonshine! Russia Raises Vodka Price 36%!

Great post on ZH today :  http://www.zerohedge.com/news/2012-11-19/inverse-deflation-alert-russia-hikes-minimum-vodka-price-36

Dimitri Cirrohski here, and many of his fellow patriots, are racing to ramp up black market vodka production to save Russia from agony and despair.

An instantaneous 36% government-dictated price increase on the national staple is going to make some waves.  Vodka is sacred in Russia.  More important than... well, just about anything really.

A tax hike this big is sure to be almost as effective as a Prohibition for stimulating unregulated entrepreneurial inclinations.  A glorious new chapter in Russian history is about to unfold!  Just think, modern day RPG-tottin Al Capones reinvigorating the collective adrenal gland.   And the news media can rub their hands in anticipation for attempted political assassinations.

Exciting Times!   Za vas!

Scapegoat Betrayus

OK maybe I'm getting more cynical, but the scandal-slapping of General Petraeus really activated my BS-detection antennae.  How convenient that a central actor in the Benghazi mystery gets taken down for indiscretion, with all the licensed media following the diversion like a pack of pheromone-sniffing hounds.

The story is limp if sad to begin with.  Who doesn't want to feel like they're interesting and desirable?  Petraeus is 'mature', but this kind of limbic phenomenon is not affected by age.  Sad for him and his wife, but not exactly the stuff of high crimes, notwithstanding his function and title.

No, what now-General Betrayus has become is just another in the historic stream of scapegoats.  Scapegoats exist to take the light and heat off of someone else.  And you know what, that someone else is by definition always higher up.  Given Petraeus was head of CIA, that doesn't leave too many characters higher up now, does it?   So regardless of what misdeeds have occurred or what well-intentioned schemes backfired in Benghazi, we get a pretty good idea who the actors are.

This story will be mangled develop for a long time, and the truth will take even longer to come out.  The theorists are already having a heyday - Benghazi, training center for Al Qaida.  Al Qaida, hired hand (still, to this day) of US efforts to destablize Syria.  Etc.  Why were diplomatic staff unprotected and then erased?  Have fun speculating.  I doubt it will prove to have much to do with Scapegoat Betrayus.  

All hail the scapegoat!

Why the "Global Debt Cloud 1.0" App Will Crash

I've been involved with software businesses for most of my career.  Software is a great illustration of the aphorism about History not repeating, rather rhyming.

Many legendary software applications have covered the same covers album:

1) Feels Like The First Time
inspired concept with singularity of purpose brought to market by a small, passionate team
2) I'm So Glad
adoring adoption by a growing community of users; team grows to give them love
3) Getting Better
expansion of the mission in response to clamoring of the adoring users, further expansion of team and probable move to beautiful new headquarters
4) We Are the Champions
forecasts of rule-the-universe possibly concurrent with IPO win
5) Hotel California
difficulty getting the next release nailed down, and decelerating innovation as layered complexity begins to snarl every move
6) Clubbed to Death
Proliferating competitors/enemies, and they're winning; everything seems crazy.
7) My Heart Will Go On
spectacular epic FAIL new version/upgrade release and earnings disaster/s
8) Is That All There Is?
dispirited company acquired by a grasping conglomerate that preys on the less imaginative remaining users
9) The End
another footnote in history

The Global Financial System is a lot like a big software application, in fact resting on countless interconnected software systems.  The unprecedented expansion of private and public debt and chaotic blow-ups and near misses squarely locates us at step 6 on our software timeline.  First just Japan, then the USA was ZIRPing and QEing, now everyone's in the act.  Rogue actors regularly hijack the geopolitical scene.

It's not hard to anticipate Step #7, the Epic Fail of the Global Financial System aka Global Debt Cloud 1.0.  It could come from anywhere.  Implosions in the near-$quadrillion notional pile of derivatives worldwide.  A misstep in any of the world financial citadels.  A melt-down in the world of High-Frequency-Trading - the bastard child of Moore's Law and the always-seductive GIGO. Or just an awakening and realization by the little people.

Time to be thinking about Step 1.

The Too Sad Trick or Treat Sequel - FAIL Tech IPO Class of 2011/12

Second update to my June 1 'Commencement Post" for the Tech IPO classes of 2011 and 2012.  After two months, the career prospects for these recent 'grads' was still pretty dim overall... so I thought I'd see how they survived Trick or Treat, Dia de los Muertos and the Electile Dysfunction of 2012.... not pretty... do we need viagra for stocks or get started preparing some coffins?   I'll let you be the judge.... "fair and balanced"  LOL!

Presented in the same order, with updated charts....

1. Zynga, When are they going to do Stockville, featuring the E*Trade baby?

6/1:  Opened at 11, a real Christmas gift!  Woops, touching 6 now... don't bother bottom fishing until around 4.  Isn't StockVille such a neat game to play?!

7/31: Bottom fishers, you now have a yellow caution light to proceed depending on your level of self-loathing.

4 was a good reference point,  ZNGA gapped right past it to the 2s by 7/31.  Dead since then. Self loathers got another reason to loathe themselves if they bit this summer.  A bitter taste in the mouth indeed.  Don't be looking for a big win here... either in their games OR the stock.

2. Get Your Daily Deal - Rotten StockFish!

7/31: Back on 6/1 GRPN was trading a bit under 10. I said wait for 5.  We are getting there....

11/13: Yee-howdy, now THERE'S a discount. But compared to bankruptcy?  Do you like remorse with your pain?  This one could go all. the. way.

3. HELP! I've been YELP'd!

7/31: Back on 6/1 YELP was looking at 16 after opening at 22.  Nice levitation since then, but too early to get giddy about upside.  Needs more time wallowing at lower levels.  

11/13: I am the Wallow-Rus!  Koo Koo Katchoo!  Here's a 5-star Round Trip! Let's meet up at '14' again, k?  We can pretend to be Elite...

4. FaceJuke!  The Mother of all Bogus IPOs!  Long Live the Zuck!

7/31: FB touched $45 on opening day. On 6/1 I said way to early to even seriously watch it.  Mr. Market seems to agree.  Let's see if the fall offrom disgrace can stop at $16.  

11/13: So far the Maginot line at 16 has held... but I'm not holding my breath.  The crystal ball keeps seeing numbers between 10 and 15...

And finally, the winner.... the CHAMPION!!!!

5. LNKD -  like my 81 year old pops-in-law says, "I'm on the "LINKIN" (no it doesn't do anything for him).  Hotrod Lincoln?  Or a Ford with a fake badge?

7/31: On 6/1 I said watch out because LNKD could be "the first commercially viable social network, OMG!!!"  It was actually UP over it's opening day.  I said it was "in the pool of indecision" and it's still there, hovering around its opening price.  I still think it needs to spend some time underwater but LNKD remains the champ in this IPO group... it has legitimate earnings prospects. 

11/13: LNKD was at around 102 on 7/31, and still close to 100.  The LNKD "Pool of Indecision" is bigger than Olympic-sized!  At least with LNKD, you have not already lost most of your investment.  You may even have a gain.  With next year's tax picture, you might want to pocket that and go buy yourself a double latte.  If it drops much more here, it could roundtrip to 60.  Oh, that's not very winner-like.  My condolences to this graduating class.

Summary for the Graduates of 2011/12

7/31: The next few months could be pretty unkind to this whole group.  The low-volume manipulated rising market is very very tired and everyone seems to be focused on Central Bank moves rather than profits and prospects for more.  Main Street is tired too.  The economy is just not in great shape, it's getting harder to fake with government statistics.   This IPO class has its work cut out for it.  At least they have big cash cushions to weather economic storms and headwinds.   I think they're going to need it.

11/13: Yes, a cruel summer for the recent Grads.  And a cold winter, too.  Ned Stark was an optimist.  Winter Has Come.  And not just for these puny hype-rockets coming down with a thud.  Everyone's invited.

Your Faithful Curmudgeon

Aptitude Test for Politicians (Spoilers)

In case you are considering a career (oh how it hurts to use that word in this context) in politics, I have a Friday gift for you - spoiler answers to two of the hardest (for politicians) questions to answer correctly on the PAT (Politician's Aptitude Test) .

1. What are the best reasons to become a politician?
The correct answers:

- get your own graft channel

- harass your competitors and enemies

- protect yourself from prosecution

- build your entourage of lickspittles and groupies

2. What are the worst reasons to become a politician?

...and the correct answers:

- work for your constituents

- follow your conscience

- uphold the Constitution

"There is simply not enough salt in all the world to take with politicians' statements."

- Curmudgery

The Twin Headwinds of Debt and Unemployment

A business friend says he's hopeful he's seeing some signs of economic improvement... I tell him I wish I could agree.  There are definitely up and down spots as you travel around.  Some areas look like they're on their last legs, others are relatively thriving.  In Northern California the contrasts can come within 20 miles or so - the Social Media Center that is eastern San Francisco vs. the bankrupt Vallejo.

In business, too, there are up and down spots.  Traditional businesses are suffering.  Niches in software, biotech, health informatics (ok, lots of federal subsidy action going on there to distort things) are making it.  Businesses that can make it by tuning their operating costs and efficiencies are doing alright.  But this in itself is one of the structural headwinds ripping at the economy.

Of the Two Terrible Headwinds, Headwind #1 is Debt.  Crushing, suffocating, likely to never be repaid.  But staying and staying hidden (securitized, rehypothecated, derivitivized...) on the books from individual households to the too-big-too-fail financial behemoths, in almost every corner of the world economy.  The Federal Reserve is busy sopping up government debt like some bizarre zen-inspired carbon-sequestration program.... "if we buy up and bury the debt, and pay zero interest on it, is it really there?"  The debt-driven growth of the last 30 years has choked itself off.  Like Scotty said, "the engines just can't take it anymore!"   No sustainable economic growth will occur as long as the enormous overhang of bad debt remains.  The only question is who gets to be the fall guy?  Our crony capitalist government would like to be sure that taxpayers and especially savers foot the bill.  As one of those saving taxpayers, I want to see banks take their fair share of the pain.  This is our generational political battle royale.   Suffice it to say, you would have to have a double-rose tint on your glasses to think that the debt serfs once known as consumers will pull the world economy out of its dumps, and so doing, recreate all those lost jobs.  Forget it.  The tide has turned and perhaps in a silver lining way, people are realizing they just don't need so much junk in their lives.

Well then, won't business reinvest, say, when it feels the political climate is more "pro-business", perhaps with a change of occupancy at the White House?  Won't all the business reinvestment drive a glorious new age of prosperity?  Stop and think like a business.  Topline growth except in disruptive niches is hard to come by.  The way to increase shareholder value is to reduce operating costs.  And if that comes from increasing capital investment, where is the payback?  Um, lower labor costs?  So how is this efficiency-driven survival directive going to increase employment and household spending?
Short answer - it can't.

The last option is so ludicrous I hate to even rhetorically pose it... yes, the government will hire that growing tidal basin full of people "no longer in the workforce" (note, not "unemployed", because that is a bad statistic. As the number of employed stagnates and drops, our government statisticians must do their job and do what they can to reduce unemployment - hey, we'll just drop more people out of the labor force.  Suggestion - pay attention to the Labor Participation rate.)

Just what kind of jobs will the government create to save the economy?  The recent past may offer a hint.  The last big labor absorption initiative was creating and staffing up the Department of Homeland Security.   I know that I personally feel ever so much more secure with all the TSA folks standing around at the airports I visit, and I get a palpable sense of well-being that they are the solution to our economic malaise.   Yes, it's the miracle cure.  Just have everyone work for government. It's worked so well everywhere else... what are we waiting for?   More regulation, the engine of economic growth.  The only 'good' thing about this non-option is that it will be funded by.... more government debt, which the Federal Reserve will sop up and bury... end of problem, right?

Lies, Damn Lies and Statistics: Deceit Knows No Bounds in the Service of Politics

And now for another baffling government statistics data point - strangely, employment in the 20-24 age group just shot up in September:  "Cutting to the chase: the September surge in Seasonally Adjusted jobs give to 20-24 year old is the biggest in decades. This is on top of the only positive NSA increase in 20-24 year old jobs in history."  http://www.zerohedge.com/news/2012-10-05/strangest-number-todays-jobs-number

The 2010 census was used to manipulate employment stats - census dept *hired* boatloads of workers (for like 1 or 2 weeks - I was one and there were plenty others in my zipcode - we went to some classes and then were let go.)  Anything that can be used to make fudge will be.

If we dig enough we'll probably find a trigger like the infamous birth/death model stipulating that college students with financial aid have an employment requirement ergo they must be employed... what month do all the student loans re-up?

But all the government data fudging won't change the plainly visible facts of our so-called recovery - the shuttered shops, offices, factories and company hq; empty homes being kept from foreclosure sale, zombie homeless everywhere, huge turnouts to hiring cattle-calls for any job with some benefits, rapidly rising prices for basic commodities.

Freedom will only be restored when financial criminals are punished, bad banks are allowed to fail, and market pricing is allowed to function again.  All the incentives today favor crony capitalism, dishonesty and turpitude. The values that anchored this country's successes have been put in a perverse lockbox.  Is there a viable peaceful solution?

Common Sense is Dead, Denali Bear Killed

I mourn the Denali Grizzly that was shot this past week for.... being a bear.   A photographer with beans for brains was within 50 yards of a browsing bear.  The bear was going about its business.  The season is going to change soon... time for bears to load up on food.  The last thing a feeding bear wants is any competition in its feeding space.   50 yards is pretty up close and personal.  Oh, yeah, let's not forget that grizzly bears can thrash the best human sprinter without trying.  So this idiot photographer gets himself killed.  Sad, but not the bear's fault!

Common sense says we humans should give bears a respectful distance and learn from the mistakes of deluded naturalists.  Instead, our fearless government agents moved in and killed the bear.  This is so stupid it makes me want to cry.  Are we really so locked in to a nanny state mentality that the govvie boys think they HAVE TO DO SOMETHING when a bear kills a person, because the quaking civvies DEMAND that GOVERNMENT DO SOMETHING?   Truly sad.  The government could have easily just reminded the public to stay 1/4 of a mile from a grizzly per established and published guidelines, and this is what happens when you don't.  Now go home.

A sad day for the Grizzlies of Denali, and an even sadder day for homo sapiens that still believe in personal responsibility and common sense.

FAIL! Revisited - IPO Class of 2011-12 mini reunion

Way, way back on June 1 of this year I took a look at some of the high profile tech IPOs of 2011 and 2012 and I offered up a pretty dour view of the immediate future for these hype great investments.   So, two months later, I'm going to have a quick Class Reunion and see how all the IPO graduates have faired....

Presented in the same order, with updated stock charts....

1. Zynga, My Favorite Game!

Look out below!

Here's what I said 6/1:  Opened at 11, a real Christmas gift!  Woops, touching 6 now... don't bother bottom fishing until around 4.  Isn't StockVille such a neat game to play?!

Bottom fishers, you now have a yellow caution light to proceed depending on your level of self-loathing.


2. Get Your Daily Deal - Rotten Fish on GroupOff!

Back on 6/1 GRPN was trading a bit under 10. I said wait for 5.  We are getting there....

3. HELP! I've been YELP'd!

Back on 6/1 YELP was looking at 16 after opening at 22.  Nice levitation since then, but too early to get giddy about upside.  Needs more time wallowing at lower levels.  

4. FaceJuke!  The Mother of all Bogus IPOs!  Long Live the Zuck!

FB touched $45 on opening day. On 6/1 I said way to early to even seriously watch it.  Mr. Market seems to agree.  Let's see if the fall offrom disgrace can stop at $16.  

And finally, the winner.... the CHAMPION!!!!

5. LNKD -  like my 81 year old pops-in-law says, "I'm on the "LINKIN" (no it doesn't do anything for him).  Hotrod Lincoln?  Or a Ford with a fake badge?

On 6/1 I said watch out because LNKD could be "the first commercially viable social network, OMG!!!"  It was actually UP over it's opening day.  I said it was "in the pool of indecision" and it's still there, hovering around its opening price.  I still think it needs to spend some time underwater but LNKD remains the champ in this IPO group... it has legitimate earnings prospects. 

The next few months could be pretty unkind to this whole group.  The low-volume manipulated rising market is very very tired and everyone seems to be focused on Central Bank moves rather than profits and prospects for more.  Main Street is tired too.  The economy is just not in great shape, it's getting harder to fake with government statistics.   This IPO class has its work cut out for it.  At least they have big cash cushions to weather economic storms and headwinds.   I think they're going to need it.

Your Faithful Curmudgeon

The New Criminal Elite

When we think of crime, be honest, we flash on a random act of malice or violence that deprives an innocent victim of something... like a mugging, a smash-and-grab, or passing a bad check.  I think we are totally off-base thinking like that.  While surely crimes, the wrongful acts perpetrated by desperate societal bottom-enders, outcasts and thugs mostly pale in comparison to the crimes of their biggers and betters.

Crime pays and pays big if you are a big enough fish to begin with.  So there is motive enough.  And there is infrastructure aplenty.  Career politicianhood and powerful large business and union interests have a game table that is beautifully set for all manners of turpitude.  Government grafts and in return harasses, maims or kills those who would be obstacles to unlimited enrichment of their commercial cronies.

At the highest levels, we are treated to extortive ultimatums from the Hank Paulsons and Jerry Browns of the world - GIVE ME (MORE OF) YOUR MONEY NOW OR ELSE!!!  Or else what?  The corrupt power structure might suffer a setback or even, perish the thought, a humpty-dumpty fall?  I for one am tired of our so-called leaders and exemplars sticking us up and shaking us down.    More taxes?  Clean up your own house first and then maybe we'll talk.  Bankster bailouts - why do they deserve many-zero bonuses for taking guaranteed debt arbitrage trades from the Fed and Treasury?

I have had serious reservations about gun ownership for most of my life.  My opinion is changing.  I no longer vest much trust in institutions.  In cities like San Francisco, there is annoying and sometimes life threatening crime all around; it will never go on the endangered species list.  Police response is muted at best.  Why not?  None of the swelling ranks of six-figure plus pensionistas answer calls.  Government economics wizards have been robbing savers of their savings via ZIRP and a depreciating dollar for years now with no end in sight.  And now we are treated to Armed Forces "training exercises" on city streets... Got Guns?

FAIL! Tech IPO Class of 2011-2012. Who Farted?

FailBook, or FacePlant, or whatever you want to call it, is NOT the biggest loser in the awful crop of Tech IPOs 2011-2012.

Let's face it, the investment bankers saw the approaching implosion of financial markets as we know them, and put as much perfume on these pigs as has ever been done to arrange a marriage with retail investors, er, ignorant punters.

Let us just look at a few stock charts, shall we?  We'll save the WINNER for last because it's good to finish on an up-note, right?

1. Zynga, My Favorite Game!

Opened at 11, a real Christmas gift!  Woops, touching 6 now... don't bother bottom fishing until around 4.  Isn't StockVille such a neat game to play?!


2. Get Your Daily Deal - Rotten Fish on GroupOff!

GRPN, the ULTIMATE BUSINESS MODEL!  Take an old concept, coupons, with no barrier to entry, and PISS OFF your RETAIL accounts while JADING your end-users!  It's a sure-fire success!  Oh, forgot to note the funny business in accounting... go Chicago!  That tactic is always a great secret sauce for a BIG IPO!  Opened at 28, now under 10.  Makes Facebook look like such a Champ!!  I know that special on Falling Knives is calling your name, but wait for the next 50% off deal on GRPN,  it might go nearly to 5.   If the company survives, it might actually make you some money, then!

3. HELP! I've been YELP'd!

I LIKE Yelp.  It's actually a fun, worthwhile and potentially valuable community.  I participate gladly.  But, I didn't go near the IPO.  Yelp still has to figure out how to make large $$ off of its assets.  Sadly they do not seem to want grey-haired tech exec advice, they would rather whoop it up with a virtual pool party, taking a dive on NASDAQ.  Guys and Gals - I'm still available :-) ... and I'll keep you laughing!

Opened at 22 (gee, their underwriters must have had an unusual fit of modesty!) now probing 16 with a lot of room to range down.  If it can't hold 15-16, maybe 10?  This is not such a bad IPO story.  MOST tech IPOs are underwater six months after opening.  Yelp may make it.  I hope they do.  But the stock just gets a 1-star review right now, I won't buy any until it's quite a bit lower, and then maybe it'll rate up to 3-stars. 

4. FaceJuke!  The Mother of all Bogus IPOs!  Long Live the Zuck!

Oh those bad, bad underwriters.  Hell, they just got caught doing what every tech IPO underwriter has done for decades.  Stop your whining, dice-throwers!  FaceBook is the most talked about boring thing in my lifetime.  Yes, it can be useful and I suppose sometimes even heartwarming.  And advertisers will be sure to pay exorbitant rates to get at really meaty micro-targeted behavior- and location-based goodness.  

Never mind FB is a tool of the state police.  If Google can do it, why not the Book?  But I digress.  Opened at a much ballyhooed $28 so that the mezzanine private equity investors of a year ago could get their guaranteed double, and F to YouGuys who buy the stock retail!   Mwah hah hah!!!    This pig has a long way to go to the find bottom of the PigSty.  Too early to even seriously watch it, unless you like being zucked from behind.

And finally, the winner.... the CHAMPION!!!!

5. LNKD -  like my 81 year old pops-in-law says, "I'm on the "LINKIN" (no it doesn't do anything for him).  Hotrod Lincoln?  Or a Ford with a fake badge?

Look carefully at this... yes, it's true, LNKD is actually UP over it's opening price!  Maybe because its community is LOYAL and a good % actually PAY to use it?  Plus advertising?  Watch out, this could be a real business model.  It might be the first commercially viable social network, OMG!!!

Don't get too excited just yet.  The market can't make up its mind how much LNKD is worth.  It will go down, maybe a bunch, before it goes up again.  But at least it's in the pool of indecision instead of the drowning pool with its IPO classmates!

Moral to the story: Do not FOLLOW the smart money. If you can't ride with them, wait til they kill the innocent in their wake...  if you are patient, you might be able to get some GRPN-sized opportunities.  Happy crumb-hunting!

Your Faithful Curmudgeon

Global Financial Dam Cracks Widen - Get a Life Preserver

You don't get to appreciate the (for now) slow-motion trainwreck that is the global banking system unless you spend time off the mainstream media path.  Those happy spinsters would have us believe that everything is fine and our recovery, while laborious, is progressing to a happy conclusion.

Bullshit.

The global debt-based economy is disintegrating, and due soon for a long miserable reset.  In Game of Thrones, the Starks' motto is "Winter is Coming."  Well said, sers.  Mr. George R. R. Martin may be a gifted prophet as well as a stellar story teller.

Europe as it is currently ill-conceived is finished.  Britain and Japan are past their eyeballs in government debt.  China sits on a huge stack of rapidly depreciating dollar-based assets, cities packed with empty office skyscrapers and four-star hotels, on top of an empire full of factories spewing out grot for.... whom?  Guess what, Uncle Sam and his cronies and especially us pissants will not be immune to the coming wave of sovereign defaults and the consequent destruction of HUNDREDS of TRILLION$ in DERIVATIVES.

It ain't pretty my friends.  Rather than go on in full rant, I suggest you take a look at a presentation by one of the world's elite financial minds and practitioners, Mr. Raoul Pal.  His life success is based on cold, objective evaluation of trends in the context of well-studied history.  He is not a gloom-and-doomer; he's not trying to sell salvation. He would like to survive and prosper.  And he has a message for us: get prepared NOW for some serious shit.  Without further ado, Mr. Pal's "Stark" presentation:

Global Financial End Game 2012-2013 - Raoul Pal

Cherry Blossoms in San Francisco

I needed a break from lamenting the quotidian affairs of monkeys, er, humans.  The Cherry Blossoms in San Francisco have been especially beautiful this year.  Their time is one of those magic passages.  This little soundbyte came to me thinking about them.  Close your eyes and hope you enjoy the blossoms.

Voting in 2012 is Like Licking a Toilet Clean

Both candidates are owned by the global crime syndicate otherwise known as central and money center banks. These guaranteed nominations of the Grublicans and the Dumbocrats have the banksters high-fiving with assured victory in their conquest of the nation that was formerly known as the constitutional republic of the United States of America.  Uncle Sam, it was nice knowin' ya.

It doesn't matter which of these heinous puppets wins... so at least let's have an exciting third-party or independent candidacy to remind us there can be alternatives to debt slavery and a global race to the bottom.

Protestors Beat Up on 99%; Police Can't Even Help Themselves

Today's SF Chronicle features a sad story of a crumbling civil society - http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/01/BAQF1OBH55.DTL&tsp=1.

Last night, masked shitheads marched down Valencia Street, one of San Francisco's hard-working local biz spots, breaking windows and throwing paint on stores and parked vehicles.  They even broke windows on the Mission Police Station.  One, count 'em,  ONE... individual was arrested... and released.

WTF SFPD?   Now I don't expect the paper tiger that is SFPD (what do you expect a bunch of pensioners to do anyway, the biggest cost in SFPD's budget?) will suddenly become some knight in shining armor.  But come on, can't protect your own building?

As to the protestors, these bumfucks might want to consider watching themselves; forget the Police.  Polite  citizens are becoming more impolite with each attack on decency and the hardworking.  The anarchist numbnutzes aren't making any impact on the 1% we hear so much about.  This sorry episode, like the Occupy Farce preceding it, disrupts the lives and livelihoods of working folk.  Between gangs, the shiftless, the unmannered drunk/high, the City already has too much scum on its plate.  The situation is becoming ripe for a vigilante backlash.  The script has already been written in other countries with torn social fabric.   Sad to see it coming, but when people get fed up...

Does (Federal Reserve) History Repeat?

Despite a 20% real inflation rate, the Federal Reserve is holding short and long interest rates at near-zero levels.   Just another dreary floater in the sewer of current American monetary and fiscal policies?   Not quite.  In fact, it's likely you weren't even a ward of the nanny state yet - this was 1951.  Harry Truman had basically fired two venerable Federal Reserve Chairmen, including the one whose name graces the Fed's NY building - Marriner Eccles.   This article from ZeroHedge is a must-read.  Bear with it.  See here:  http://www.zerohedge.com/news/who-lying-federal-reserve-or-federal-reserve-and-why-stalin-lost

In an earlier post here you may have noticed that US Government Debt was stratospheric after WWII... possibly as high relative to GDP as now (although I don't think government stats were so thoroughly and slickly manipulated then... my bet is that today's sad financial state is hyperspun-to-the-good and in actuality is far worse than the financial house of America after the biggest money-draining war of all time, to date.)

Well the point of this isn't just that history repeats, it's 1) the stark observation by the writer that the Fed is a very big liar, and 2) the Fed has not always been and does not have to be beholden to the New York Banksters (hope?).

As usual, the baddest of the bad actors reside in the drained swamp known as DC.   I keep saying, we need to put an end to politics as a career if we want to uphold and honor our Constitution.

RIP Automobiles, Hold the Dinosaur Juice

An interesting article appeared in FT.com -- "Young Americans Turn Away from Driving" that supports something I've been thinking for a long time - cars as we've known them are done.  I would not be a buyer of automotive stocks.  In fact, they might make an interesting long-term short.   This position is immediately relevant to the western world, and although developing countries like China, Brazil, India may well have pretty strong auto markets for some time, they are just echoes of the automotive industrial boom.

Here's why cars as we've known them are doomed.

Demographics.  Baby Boomers becoming Aging Droolers reduce and eventually stop driving... plus everyone knows that older folks just don't buy new cars after a point... the old jalopy is just fine.  Even more importantly, the trends in X'ers and Millennials to live in cities, take public transportation, ride bikes, walk and actually SHARE THINGS like cars are killing auto demand.

There is an intriguing psychographic aspect to the falling demand for cars by younger people.  Cars don't have universal cachet the way they used to.  Kids that grew up on the internet, video games and smart phones have a different life focus and orientation than older people who grew up with land lines and the daily admonition from Mom to "go play outside".  Your station in life is no longer signaled by the wheels you have.  In fact it's kind of going in reverse... who hasn't had a chuckle at the some of the auto customizations originating in public housing?  No, having the latest iToy is far more important and relevant.  Cars are a pain in the butt.  They are expensive, costly to drive, costly to insure, they break down and lose value as they age, they are hard and/or costly to park, they get you courtesy notices and fines from your friendly local government, and they tend to embed dumb old technology.  If I need one, I'll borrow it.

If you are an auto maker, the outlook is dismal.  I don't care how big ZipCar gets, it won't replace demand generated by the suburban two-cars-in-every-garage paradigm.

Energy costs.  If you believe energy costs will rise long-term, it's obvious driving will be impacted. Will LNG come to the rescue?  Maybe.  But until something we see a viable substitute for the incredible portability and efficiency of fossil fuels, energy prices aren't likely to help increase demand for cars.

I guess this is the point where we might indulge in nostalgia for the passing of an era.  Go ahead, sit in your shiny baby, smell the leather.  Crank it and gun it... ahh the sound.  Turn on that AM radio and hear those fine tunes... fondly remember everywhere you've gone and everything you've done in your cars (or not)...   OK, time to go.

Clusterville - another trip to the abyss

I wrote the tune underneath the wordcloud in May 2008 ... it seemed we were on the edge of an economic abyss (we were).

Now in 2012 it feels like we're back at the edge of the abyss, only it's much bigger than last time.

All the same themes, just bigger, and worse--

State control over ever-increasing span of business and private life, making it harder and harder to get new economic growth underway.  Biggest growth industry in USA?  Department of Homeland Security!!!  LETTING GOVERNMENT DISMANTLE FREEDOM IS A HORRIBLE IDEA!

Kleptocracy and Crony Capitalism comprising banksters, politicians and their unelected apparatchiks.  If you are a saver, you have been and are continuing to be robbed by those in charge.  POLITICS SHOULD NOT BE A PAID CAREER!

Ever expending Central Bank balance sheets based on exactly what collateral? Cal it what it is - MONEY PRINTING!  GIVING MONOPOLY POWER OVER MONEY TO CENTRAL BANKS IS INSANE!

Now entering Clusterville... buckle up.

The Federal Debt vs. The Debtors in Chief

Michael Jackson's Black or White?  How about Red or Blue?  Now say, who really knew/knows how to run up that national credit card?  Of course, we are going to pay it all back...

It is staggering to think that this country had enough productive force to diminish its debt despite the Viet Nam war and Johnson's Great Society.   Now an extra $ of government debt doesn't even buy a $ of GDP.

Baby Boomers can fairly be pointed out as responsible for most of the great upswing... does anyone care anymore?  Are we all aiming to be wards of the nanny State?  Shame on us.

Spring Cleaning

Spring is definitely here.  Nature is doing its part to remind us that it's a great gift to be alive and experiencing what is.  Our consciences can take it from there - what we ought to do to honor life.  


And so, to that end, a good ritual, getting the crud out.  De-hibernating, sweeping the den.  Pretty straightforward to do in our little private lives.  Vexingly difficult at the level of the human hive.  Where to begin?


Almost everyone I talk with is sick of spin-world, scams and corrupt crony capitalism.   Let me humbly suggest a spring cleaning to refresh our reeling society.


1) Put an end to career politics.  No career politics = no escalating networks of corruption.  Everyone should serve in public office - ONCE.  And then, no more.  Whatever you did, you did it.  For a year, or maybe two. Then get out.  Next.  It's service, remember?  Not institutionalized theft by criminal dynasties.


2) Rein in and shrink unelected government bureaucracy.  When elected political careers go away, unelected Mandarins can hold sway.  But not if we get serious about sunsetting and privatizing government.  There is no reason to unthinkingly spawn and grow government agencies that have proven they have no fiduciary duty to their taxpayer funders.  How about that TSA?


3) Move from a secrecy-driven and manipulated fiat money system to hard money.  This is virtually impossible to even consider until we do #1 and #2.  No pun intended.  100 years of the Federal Reserve controlling the supply of US money has diminished the value of the Dollar by 95%.  Good thing no one lives long enough to see ALL their savings decimated.  Just most of them.  Government can spend and spend and increase debt for a long time, counting on the fact that the debt will be greatly devalued.  The only losers are savers and fixed-incomers... are there any savers left or am I the only idiot?


We all have our own closets, basements and attics to clean in the Spring.  Collectively, we've just put it off for way too long.  We owe it to our kids, grandkids and beyond.  

Oh those Happy Europeans

Is Wolfgang Schaeuble about to be smacked by Mme. LaGarde?  Don't you just love that French determination?


The guy in the chair in the background is obviously enjoying it.  Hey, it's big theater.  The Greek Tragedy continues to unfold while the Eurozone keeps rearranging the deck chairs on their sinking fiscal and monetary union ship.  Don't worry, China will save us all.


Adele's breakup anthem "Because of You" really is the perfect song for the times.


Not that things are really so much better here in Norte Mexico.  The unrelenting move to convert the country into a two-class bipolar kleptocracy continues apace with the Fed eating everything in the world financial without regard for future indigestion, the executive branch quietly sweeping the whole FraudClosureGate Robosigning fiasco under the rug (made with pure 1% wool), and the sickcare system pauperizing the middle class while comping those below the line.  Oh, and how about the rushed bipartisan show of public servitude by our federal elected officials to eschew trading on stocks based on information acquired in the course of their official duties?   Loophole sandwiches, anyone?


Now carry on.

Lies, Damn Lies, and Worse - GOVERNMENT Statistics

Today's tasty treat courtesy of the BUreau of LLabor SHITandards.


Amazing! Rocket Science!  More jobs and a lower labor participation rate magically drops the stated unemployment rate to 8.2%.  We're SAVED!


Woops - Charles Biederman, who runs TrimTabs, who bases their observations on withholding data, and, says: "actual jobs, not seasonally adjusted, are down 2.9 million over the past two months. It is only after seasonal adjustments – made at the sole discretion of the Bureau of Labor Statistics economists – that 2.9 million fewer jobs gets translated into 446,000 new seasonally adjusted jobs." A 3.3 million "adjustment" solely at the discretion of the BLS? "


I think I just saw something floating in the punchbowl.  

The Day the Tulips Wilted

Tulips are beautiful.  So beautiful they became objects of greed and envy.  Nowhere moreso than in 17th century Holland.  Tulip bulbs became a frenzied market, and eventually the most expensive commodity in the world.  Until February 3, 1637.  


This little chart shows how the tulip market wilted, rather quickly.  Fortunes that had been made vanished.  Happy 375th anniversary of the end of Tulipomania.