The 'Weekend At Bernie's' Economy

Amid last night's staggering 7.3% drop in Japan's market, the Nikkei in only one trading day and the fact it Should have pulled this market down with it, a small group of us were sitting around trying to analyze it.

One astute colleague summarized it so succinctly:

"We are living through a 'Weekend at Bernies' economy.

For those not familiar with the 1980s film, the basic plot involved two losers who make a serious financial error while working for Bernie.  He pretends to be thrilled and invites them over to his beach house for the weekend but in reality is going to have them killed.

What ends up happening is Bernie himself is killed due to a Mafia hit because he's having an affair with the mob boss' wife.

OK, now the plot itself is irrelevant to what we're referring to..  That was just provided to familiarize those who may not quite have remembered this comedy.

Here's the relevant part:  These two losers take this dead guy Bernie; this motionless corpse and keep him 'alive' for the weekend.

So Bernie is propped up, carted around..  Everyone who interacts with Bernie is so deeply stupid, they buy the premise and accept he's alive.  Some characters in the film even have lengthy one-sided conversations that go on and on while completely oblivious.

And that's our economy.

The two losers are played by a bearded soft-spoken loser named Ben Bernanke who has taken a dead stock market and given it a fake 'life' and all the genuinely stupid people-- the amateur investor, the common folk who judge the success of the economy by a Dow number, etc.. they have swallowed this up.

The professional Investor, banks, major corporations, hedge fund managers, derivatives traders, etc... They all know 'Bernie' is dead as a donkey.  But it serves their nefarious purposes to not only play along but encourage the ruse.

We make no secret of this-- we want the market to drop precipitously and for extended duration...  We want the stock market to once again accurately reflect the True state of the US economy.

And if/when our desires become reality, you will see the market drop from this artificial 15,300 or such to the 7,500 to 8,000 range.

That is where the market should be because That is where the US economy is.

We don't want the economy where it is now.. this Fiction.  We want to see these super-wealthy people lose Everything ideally and end once and for all, this confidence con-game of carrying around a flat-lined economy and dancing it around like there's a pulse.

And as long as Fed Chairs can manipulate the stock market to give the ruse of 'recovery' and it bumps up Presidential and Congressional polls, very little to nothing will ever be done legislatively to pass bills that create jobs or much of anything the bottom 99% can feel.

Remember the vast majority of Congresspeople of both parties are Filthy rich multi-millionaires.  Even President Obama has a net worth of over $6.5 million mainly due to the success of his books.

Where do these wealthy people keep all their money?  In banks??

No-- the stock market.  So they will do whatever is necessary i.e spend whatever is necessary... Spend billions or trillions or even quadrillions to protect their millions.  

And why not go all-in?  Its taxpayer money, not theirs.

And if it takes carrying around a dead 'Bernie' and flailing its arms all about to give the appearance of life, then that's what they're going to do until they're either stopped or its no longer in their interest...

When enough everyday American suckers prop up the market by investing their sacred nest-eggs and re-stimulate the economy via debt-based consumption, then the financial elite can put 'Bernie' back in the box

We want this stock market to Crash badly..  You really should to.

~ Isn't it funny: high markets, student loans and April jobs report

We will call today's posting 'Isn't it funny..' even though very little of what we will discuss is humorous or amusing, but it allows us to cover an array of different mini-topics...

~  Isn't it funny how proud we are as a nation are at Dow 15,000 as if its some patriotic act?   Certainly we know why the rats and roaches who Invest are pleased as punch, but the nation as a whole?

Are they that out of touch with reality?  Do they really attach national pride to wealthy people making More wealth??

Used to be a strong Dow meant a strong national economy.  Now its actually the opposite.  For instance in England, On May 5, 2008 their stock market, the FTSE closed at 6,204.

Five years later, their economy is an utter mess; so bad they, unlike in the US, actually Admit they're back in recession... Their unemployment rate is 7.9% and in a population of 63 million, 2.56 mil are out of work..

So how's their stock market doing today?

Closed at 6,521 -- the market is 317 pts Higher today with a dreadful economic situation than it was 5 years ago today when things were much rosier.

Why?  Because whoever runs their finances are big believers in QE as well.

Another example-- Japan.  They've been economic purgatory for the last couple decades but five years ago, on May 5th 2008 their market called NIKKEI 225 closed at 13,655.

In October 2008 it dropped to a low of 7659 and after a lot of up and down, it finished the week of November 7th, 2012 at 8757.

And now, in a mere six months... 180 days, their market has artificially climbed up to a close today at 13,694..   That's a jump of 4,937pts in less time does it take to conceive a child.

And pray tell, what was the secret of their 'success'?

Lots of QE and Heavy and we mean HEAVY devaluation of their currency, the Yen which makes it very attractive for foreign businesses and investors but kills the Japanese consumer, much like what the Fed does hurts Americans.

So what was once a barometer of the strength and economic vitality of a nation is now the opposite-- the stronger the market tallies, the more fucked up those nations are financially and the worse off for the bottom 99% of those populaces.

~  Isn't it funny how easy as pie it is to apply for and receive loans to attend college?

All one has to be is 18 years old an have a pulse.

You can major in anything you want- Philosophy, Religious Studies, Ancient Languages...  The loaner doesn't care-- its not even a prerequisite that you put down a major that may give you a fighting chance at a job one day.

Then again we suppose, why should it?

If its not a prerequisite that the applicant for financial aid have a job, have any property or collateral or even have any savings, then it would be silly for the government, who backs the loans to inquire how you will ever pay them back while taking on degrees in worthlessness...

And yet, try getting a loan for an automobile...  Try applying for a credit card..  'What is your annual salary?'  'Do you own or rent your home?'  'What is your credit score?'

Wonder why this is?

Certainly we all know that loans for homes, cars, credit cards and such can be removed in a bankruptcy while student loan debt is with you until you pay in full with interest or your last breath is extinguished, in which case, the government goes into your estate and takes what's needed to pay that debt before your kin get a penny...

But why is everyone steered to getting a college education?

Mainly because going to college delays filing for unemployment.  This is precisely why the GI Bill was enacted back in 1944.

Prior to WWII, in 1940 the unemployment rate in the US was 14.9%  1941 it was 9.9%.  By 1944, it dropped to 1.2%.   Eventually these servicemen were going to come home and needed jobs, which were not always easy to come by...

So by providing all this assistance, GIs were able to delay re-entry into the work force by 2-4 years, allowing the government time to adjust from a war to peacetime economy.

The situation with today's young adults are a little different in that unlike GIs who had the education provided for them, it is the student and that heavy debt load who are supposed to piggy-back the floundering economy

For the first time in history, US student loan debt surpassed one Trillion.  And that hasn't phased parents one bit from pressuring their kids to take on that debt.

And most young people are more than happy to have an additional 4-6 years to avoid being adults while spending four years drinking, drugging, partying and unsafely sexually experimenting...

They just assume magically a job will be there at the end and forget student loans are only the first of a lifetime of debts accrued.

~  Lastly, isn't it funny how people believe stats without taking any time to delve into them on their own?

Let's take last Friday's announcement by the Bureau of Labor Statistics that 165k new jobs were created in April-- Horray~  We'll put aside the fact that 250k new jobs must be created at minimum to keep up with population growth...

How do the jobs break down?  (All stats come from the BLS report)

* Professional and business services added 73,000 jobs.   Of that figure, temporary help services were (+31,000), professional and technical services  (+23,000), and management of companies (+7,000).

73k averages to 1,460 new jobs per state.  42% of those jobs are worthless Temps with no rights who can be fired at any time for any or no reason...  Less than 10% were managers i.e. those with higher education who expect higher salary.

* Within leisure and hospitality, employment in food services and drinking places rose by 38,000 over the month.

This averages to 760 new servers, etc per state...

These are where many college graduates and those still in school are turning to make ends meet.  Turnover rates are usually 50% so often these new 'hires' are those who may have quit other leisure or food services jobs a month or two prior.

Thus, its not 'new' labor.

Also, because servers and bartenders in particular are heavily dependent on tips, its no skin off owners' noses to hire them en masse.

* Retail trade employment increased by 29,000 in April.  Job growth occurred in general merchandise stores (+15,000) and in health and personal care stores (+5,000).

That averages to 580 jobs per state...  These 'professions' usually pay around $9-11/hr.  That's $18,720 to $22,880/yr Before taxes

* Health care added 19,000 jobs in April. Within the industry, employment rose in ambulatory health care services (+14,000).  Employment also continued its upward trend in social assistance.

That averages to 380 jobs per state.   So if you have actual licensed medical knowledge or training, its still a rough go.  But if you can drive an ambulance or assist the elderly i.e. wipe their bottoms and drive them to Dr appointments, there's work for you.

* Employment changed little over the month in construction, with small offsetting movements in the residential and nonresidential components.

Employment in other major industries, including mining and logging,   wholesale trade, transportation and warehousing, financial activities, and government, showed little change over the month.

In other words, stagnant to no job growth.

Wall Street cheered over this report...

If you cheered along with them, pardon us, but you're clueless.