Slave Nation – Nature or Nurture?

by Zero Hedge - August 31st, 2011 2:20 pm

Courtesy of ZeroHedge. View original post here.

Submitted by Cognitive Dissonance.

Slave Nation – Nature or Nurture?

By

Cognitive Dissonance

Considering that each Zero Hedge article has a shelf life measured in hours, there is the distinct possibility you might have missed some of my recent work. Along with the more visible aspects of Zero Hedge’s recent user interface update, now there is a place for the reader to view all of a contributing editor’s work in one location. Please visit my ZH ‘blog’ (here) and see what you may have missed.

It’s remarkable the extent to which we all engage in our daily ritualistic behavior and even more so how it is carefully hidden in plain sight and perfectly blended into all we call normal. Our rituals bring us great comfort and a false sense of security while also trapping us into narrow thinking and confirmation bias seeking. And best of all, at least for those who wish to control us, our rituals feed our normalcy bias and for the most part keep us sated and fulfilled. Sated, that is, until the flimsy façade and cheap material becomes thread bare and worn out and denial finally collapses as we stand chest deep in sea water.

But that doesn’t stop the great Manufacturing Consent machine. Nope, they just floor the throttle and peg the tachometer in the red, all in the pursuit of glorious green and an increasingly productive slave nation. Remember boys and girls, consumers are created for one purpose only and that purpose is to consume. So go ahead and eat your little hearts out, then harass mom and dad for the latest transformer or anorexic doll.

You’ve got to admire it for it is brilliantly simple. If they can control the advertising message that tells us what our rituals should be, then all that is left is to supply us with the material and the means. Voila, as if by magic we now have one consumer driven slave nation idling at the curb. Now…

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Lockhart Hints At More QE: “No Policy Option Can Be Ruled Out At The Moment” And “Slow Growth Bigger Problem Than Inflation”

by Zero Hedge - August 31st, 2011 2:06 pm

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Yesterday it was Evans saying explicitly it was QE3 or bust. Today it is Lockhart’s turn to stop just short of reiterating what is now getting prices in every single day: “As you know, the FOMC stated after its last meeting the intention to keep the policy rate at near zero for two more years. Also, the current policy is to maintain the Fed’s balance sheet scale for the foreseeable future. I support this position. Given the weak data we’ve seen recently and considering the rising concern about chronic slow growth or worse, I don’t think any policy option can be ruled out at the moment. However, it is important that monetary policy not be seen as a panacea. The kinds of structural adjustments I’ve been discussing today take time, and I am acutely aware that pushing beyond what monetary policy can plausibly deliver runs the risk of creating new distortions and imbalances.” He is aware, yet he will gladly vote for it when the time comes. And the time will come very soon because as he just said during his speech Q&A, “slow growth is now a bigger problem than inflation”… which as we showed yesterday is 4%, and “that we have a jobs crisis.” Net net: one more dove doing what he does best – beg for more inkjet cartridges.

From the Atlanta Fed chairman

Deleveraging in Today’s U.S. Economy

Dennis P. Lockhart
President and Chief Executive Officer
Federal Reserve Bank of Atlanta

Greater Lafayette Chamber of Commerce
Lafayette, La.
August 31, 2011
Key Points

While acknowledging that downside risks to the recovery have increased, Lockhart expects a modest cyclical recovery to proceed. In his view, a number of necessary structural adjustments are holding back economic growth in this recovery. One of the major adjustments is deleveraging.
In Lockhart’s opinion, it is necessary that the process of deleveraging plays itself out, which may take several more years. While the private sector has made progress in lowering its debt burden over the past two and a half years, government debt has surged. So for the economy as a whole, debt relative to GDP has barely changed over the period.
Lockhart believes that policy must continue to help the economy achieve a healthy enough cyclical recovery, while at the same time recognizing the long-term

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Greek Bailout #3 Coming? Barroso Working On “New Greek Program”

by Zero Hedge - August 31st, 2011 1:52 pm

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Well the second Greek bailout lasted all of… 5 weeks. Time for Bailout #3?

EC PRESIDENT BARROSO SAYS WORKING ON NEW GREEK PROGRAM
BARROSO SAYS EC REVIEWING WITH ECB AND IMF GREEK FIN. ASSIST

From the EU website:

Transcript of President Barroso’s video message on the priorities for the autumn

“Good afternoon. It has been a busy summer. And the autumn that lies ahead will require further intense work.

The Commission has just held an extended session, to take stock of the economic and political challenges facing Europe – our citizens, our businesses – and define our policy responses accordingly.

The recent turbulence on the financial markets has inevitably had implications for the real economy. Though there is no magic bullet that can bring this crisis to an immediate close, I believe we have taken far-reaching measures which will have a major impact. We now need rapid and effective implementation of those measures. Implementation is key.

First, the economic governance package, which the Commission proposed almost one year ago, must be now concluded urgently. Let me once again call on the European Parliament and the Council to finalise an agreement which is – and let me stress this – within grasp.

Second, we must enact the agreement reached on 21 July at the euro area summit, particularly the reform of the European Financial Stability Facility, which increases its flexibility and its response capacity. That means that the necessary legislative procedures must be completed by the euro area Member States as soon as possible. We are also working on – and must continue to develop – ideas for further strengthening the governance of the euro area.

Third, we are working hard to have a new programme for Greece adopted on time including on the foreseen involvement of the private sector. In this context, we are currently reviewing, together with the ECB and the IMF, the implementation of the country’s financial assistance programme. It is of the utmost importance that Greece implements the reforms that have been agreed. The task force I created in July is now fully focused on finding ways to boost investment in Greece through a

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Basic Materials hitting a key resistance hurdle?

by Chart School - August 31st, 2011 1:49 pm

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

Basic Materials ETF (IYM) has recouped 50% of its recent swift decline and is hitting a few resistance lines at (1), as well as creating a rather bearish upside wick pattern, so far today.

When IYM broke key support back in 2008, that is when the broad market picked up downside momentum. Don’t let the price action of IYM going forward be overlooked!

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We’re Definitely Getting More Fed Action per My Read of WSJ’s Hilsenrath

by ilene - August 31st, 2011 1:27 pm

Courtesy of Trader Mark, Fund My Mutual Fund

This is what I was looking for – I stated last week that the normal Fed plan is send out some minions to lay the groundwork for easing, and then follow it up with leaks to very specific members of the press. It’s all happened in record time – this story by the Wall Street Journal’s Hilsenrath which deals with the minutes of the last Fed meeting, effectively says it is a matter of when (and to a degree how), not if. At this point I’d consider it happening – seems like Operation Twist first, and then QE (forever) later in the winter. ~~Those in the know~~ The stock market ‘figured it out’ an hour or two after the speech and hence the non stop rally.

Via WSJ

Minutes of the Fed’s Aug. 9 meeting, released Tuesday after the normal three-week lag, offered new evidence that some officials wanted to immediately restart a controversial bond-buying program aimed at spurring the economy. Others felt that even the smaller steps the central bank instead chose were too aggressive.
Officials considered a range of actions—which included setting numerical targets for inflation and unemployment, rejiggering their holdings of Treasury securities and trying to push already-low short-term

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Belarus Hyperinflation Update: Food Runs Out As Friendly Foreigners Take Advantage Of The “Favorable” Exchange Rate Arb

by Zero Hedge - August 31st, 2011 1:23 pm

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Yesterday we had the first case study of what happens in a hyperinflation, when we noted that the local central bank had just hiked interest rates from 22% to 27%. Net result for the economy? Zero. Today is case study #2 where we learn what happens to an imploding economy which happens to be surrounded by friendly neighbors who just happen to find themselves in a massive arbitrage courtesy of a currency that is losing multiples of its value on a monthly if not daily basis. Per Bloomberg: “Belarus’s supermarkets are running out of meat as Russians take advantage of a currency crisis that a devaluation and the world’s highest borrowing costs have failed to stem. “All meat has gone to Russia,” Alexander Andreyevich, an 82-year-old former tractor-plant worker, said Aug. 25 in Minsk, the capital. “My relatives near the Russian border called me a few days ago and said the shops are empty.”…”Private stall owners simply go and buy meat from state- owned vendors and sell it a couple of steps away for a hefty profit,”Deputy Agriculture and Food Minister Vasily Pavlovsky told reporters in Minsk Aug. 24. The government banned individuals in June from taking basic consumer goods such as home appliances, food and gasoline out of the country. Russians, buoyed by the removal of border checkpoints July 1 as part of a customs union, have circumvented the restrictions.” Funny- if the locals had preserved their purchasing power by holding their money in gold, they would not find themselves in a position where those who still have a stable fiat exchange rate (for the time being) can literally steal products from under their noses for a paltry sum as sellers scramble to converts products into some currency before it is devalued even more tomorrow.

China and Copper

by Zero Hedge - August 31st, 2011 12:57 pm

Courtesy of ZeroHedge. View original post here.

Submitted by Michael Victory.

via TVR

J. Farchy & Javier Blas, Financial Times

Chinese companies and investors are stepping up their purchases of industrial commodities such as copper, in a show of confidence in the global economy that stands in contrast to the turmoil in western markets.

The wave of buying is providing support for metals and minerals prices after commodities prices fell this month at worries about a double-dip. Senior executives at trading houses, mining companies and banks said Chinese consumers had used the recent drop in prices to rebuild stocks.

“China is significantly less pessimistic relative to people in the western world,” said Raymond Key, head of metals trading at Deutsche Bank. “On dips they are restocking, especially in copper.” An executive at an important Chinese trading house added: “There is no doubt some traders have been buying [copper] recently.”

The surge in copper buying benefits the largest exporting nations, including top producers Chile and Peru, and miners such as Freeport McMoRan Copper & Gold and trading houses such as Glencore [0805.HK 51.65 2.05 (+4.13%) ] and Trafigura.

Copper prices fell to a 8-month low of $8,446 a metric ton in early August, but since then prices have risen more than 9.0 percent to $9,225 on Tuesday.

China accounts for 38 percent of global copper demand, and as such has the power to almost single-handedly prop up the market even if companies in the west are holding back. Nonetheless, traders warned that Chinese buyers could rapidly step back from the market if they believed prices would fall further.

Glencore, the world’s largest commodities trader, said that so-called bonded warehouses stockpiles had seen a “significant drawdown”. It estimated that stocks have “at least halved” since the beginning of the year.

The strength of demand by China in the past four-to-six weeks has been buoyed by a jump in the strength of the renminbi, which makes importing commodities cheaper for Chinese traders. Western traders said that some large Chinese buyers had been able to access credit more easily, enabling larger purchases — although they cautioned that credit is still tight for smaller companies.

“We have seen our Chinese counterparties have been able to open significantly larger letters of credit than in the first half of the year,” a senior trading executive in Geneva said, referring…

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Europe squanders its last shred of credibility

by ilene - August 31st, 2011 12:52 pm

Courtesy of The Automatic Earth

Detroit Publishing Co. "The Missis" 1905
Check the hands

Ilargi: The YoY Case/Shiller housing index came in ugly today. "S&P/Case-Shiller index of property values in 20 cities fell 4.5 percent in June from a year earlier, after a 4.6 percent drop in the 12 months ended in May that was the biggest since 2009." Still, I saw headlines that claimed "Case Shiller: Home Prices increased in June", this one at Calculated Risk. Here’s thinking that’s perhaps a little more optimism than we deserve.

Now, I know Bill McBride uses seasonally adjusted numbers, while S&P doesn’t, but still. Creating the impression that the numbers were somehow positive does not seem warranted by developments, unless perhaps you work at the NAR or Fox, organizations that create their own reality. My problem with it is that it may induce people to make purchasing decisions they will live to regret, possibly for the rest of their lives.

I’m a big fan of CR, don’t get me wrong, but this looks too much like spinning, and I wish it wouldn’t happen. That "Home Prices increased in June" headline pops up in the same daily read as this from Bloomberg, based on exactly the same sets of numbers [..] "home prices declined for a ninth month." I rest my case. Here’s Bill’s own graph based on the data, you decide.

At about the same time the housing report came in, US consumer confidence was reported thusly: "The Conference Board’s index slumped to 44.5, the weakest since April 2009, from a revised 59.2 reading in July [..]. It was the biggest point drop since October 2008."

Luckily (?!) the US isn’t alone: "European confidence in the economic outlook plunged in August by the most since December 2008 as a persistent debt crisis roiled markets and clouded growth prospects. An index of executive and consumer sentiment in the single-currency region fell to 98.3 from a revised 103 in July [..] "

European stock markets didn’t even notice. Only Frankfurt was down. The idea seems to be: Consumers, who needs consumers? Sort of reminds you of the days of old, when "jobless recovery" was all the rage. Not so much now.

If European markets had any sense left, they’d have paid attention to the farce performed inside the EU/IMF/ECB troika over the weekend, with guest roles for the

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Guest Post: Marx, Labor’s Dwindling Share Of The Economy And The Crisis Of Advanced Capitalism

by Zero Hedge - August 31st, 2011 12:50 pm

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Charles Hugh Smith from Of Two Minds

Marx, Labor’s Dwindling Share of the Economy and the Crisis of Advanced Capitalism

All attempts to reform the Status Quo of advanced finance-based Capitalism will fail, as its historically inevitable crisis is finally at hand.

It is self-evident that conventional economics has failed, completely, utterly and totally. The two competing cargo cults of tax cuts/trickle-down and borrow-and-spend stimulus coupled with monetary manipulation have failed to restore advanced Capitalism’s vigor, not just in America, but everywhere.

Conventional econometrics is clueless about the root causes of advanced finance-based Capitalism’s ills. To really understand what’s going on beneath the surface, we must return to “discredited” non-quant models of economics: for example, Marx’s critique of monopoly/cartel, finance-dominated advanced Capitalism. (“Capitalism” is capitalized here to distinguish it from “primitive capitalism.”)

All those fancy equation-based econometrics that supposedly model human behavior have failed because they are fundamentally and purposefully superficial: they are incapable of understanding deeper dynamics that don’t fit the ruling political-economy conventions.

Marx predicted a crisis of advanced Capitalism based on the rising imbalance of capital and labor in finance-dominated Capitalism. The basic Marxist context is history, not morality, and so the Marxist critique is light on blaming the rich for Capitalism’s core ills and heavy on the inevitability of larger historic forces.

In other words, what’s wrong with advanced Capitalism cannot be fixed by taxing the super-wealthy at the same rate we self-employed pay (40% basic Federal rate), though that would certainly be a fair and just step in the right direction. Advanced Capitalism’s ills run much deeper than superficial “class warfare” models in which the “solution” is to redistribute wealth from the top down the pyramid.

This redistributive “socialist” flavor of advanced Capitalism has bought time--the crisis of the 1930s was staved off for 70 years--but now redistribution as a saving strategy has reached its limits.

The other political-economic strategy that has been used to stave off the crisis is consumer credit: as labor’s share of the economy shrank, the middle class workforce was given massive quantities of credit, based on their earnings and on the equity of the family home.

The credit model of boosting consumption has also run its course, though the Keynesian cargo cult is still busily painting radio dials on rocks and hectoring…

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Slave Nation – Nature or Nurture?

Lockhart Hints At More QE: “No Policy Option Can Be Ruled Out At The Moment” And “Slow Growth Bigger Problem Than Inflation”

Greek Bailout #3 Coming? Barroso Working On “New Greek Program”

Basic Materials hitting a key resistance hurdle?

We’re Definitely Getting More Fed Action per My Read of WSJ’s Hilsenrath

Belarus Hyperinflation Update: Food Runs Out As Friendly Foreigners Take Advantage Of The “Favorable” Exchange Rate Arb

China and Copper

Europe squanders its last shred of credibility

Guest Post: Marx, Labor’s Dwindling Share Of The Economy And The Crisis Of Advanced Capitalism

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