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Weekend Reading – Waiting to get Screwed

Still no deal? 

This is amazing, isn't it?  I was reminded in Member Chat this weekend that Eisenhower (a Republican, by the way) once said: "Should any political party attempt to abolish social security unemployment insurance and eliminate labor laws and farm programs you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt, a few other Texas oil millionaires and an occasional politician or business man from other areas.  Their number is negligible and they are stupid."  Unfortunately, the Stupids are currently holding our Nation hostage and it looks like the very weak-willed Democrats are going to give into their demands.  

Unlike Obama, President Roosevelt was proud to say "Organized money hates me--and I welcome their hatred!"  These days, the Democrats are in the same beds and wrapped up in the same, stained sheets as the Republicans and Banksters and they are all willing to sell the people of this country down the river in exchange for 4 more years at the head table.  A big difference these days is that a Congressman doesn't need to be in office for life to get rich – Here's a great list of Democrats and Republicans who have more than doubled their net worth in just 4 years of servicehere's a good video on the subject.  


These are the Congresspeople who were PAID to look the other way while our economy was destroyed and were PAID to vote for TARP, stimulus and countless other programs that favor their Corporate Masters.  So it is true, trickle-down economics does work – it trickles from the Corporations that make Billions to the Congresspeople who make millions, but that's about as far as it goes unless you happen to work for the Congresspeople, and then you may be able to pick up some scraps of your own.  

Now they prepare to sell us down the river again, engineering another crisis that should never happen (and there was no reason for BSC or LEH to fail at the time either – NOT giving them Billions cost this country Trilllions AND THEY KNEW IT WOULD HAPPEN!).  Here we are though, just 3 years later, entertaining the possibility of letting the United States of America default on it's debt – something that will cost us countless Trillions of additional Dollars in interest payments on our current debt as well as future borrowing costs?  

Why would we let that happen?  Well who do you think those countless Trillions of additional Dollars will be paid to?  That's right, our friends the Banksters!  That's what this whole thing is about – cause a crisis, GET Trillions in low-cost loans, cause another crisis – MAKE Trillions in high-cost loans.  It's called the long con and, as I said, our own Congress has sold us down the river because they aren't as dumb as they seem – if they were, the Banksters wouldn't have had to pay them hundreds of Millions of Dollars to look the other way while they raped their constituents.   Roosevelt also said:  

The first truth is that the liberty of a democracy is not safe if the people tolerated the growth of private power to a point where it becomes stronger than the democratic state itself. That in its essence is fascism: ownership of government by an individual, by a group, or any controlling private power.

The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living. Both lessons hit home. Among us today a concentration of private power without equal in history is growing.

That was 1938 and it took 70 years for us to forget everything we had learned from the first Great Depression and allow our Nation to be set up again for the second one.  In that speech, Roosevelt had cited horrific statistics showing that 1% of US Corporations owned 52% of all Corporate Assets and got 50% of all Corporate Income.  Less than 5% of US Corporations owned 87% of the assets and less than 4% of manufacturing corporations made 84% of the net profits.  In 1929, 0.3% of the population collected 78% of all dividends and, in 1936, 33% of all inheritances went to 4% of all heirs.  Those are the numbers we are back to today.

Unlike today's politicians – Roosevelt had a remedy:  He commissioned "a thorough study of the concentration of economic power in American industry and the effect of that concentration upon the decline of competition" to be undertaken by the Federal Trade Commission, Department of Justice and Securities & Exchange Commission, for whom he recommended appropriating $500,000 (a lot of money back then). In addition, the President requested $200,000 more to enable the Department of Justice — whose Assistant Attorney General Thurman Arnold (The Folklore of Capitalism), who told a New York audience about his plan to publicize antimonopoly prosecutions and to enforce existing anti-trust laws.  The President also initiated Congressional investigations into the following:  

  1. Improvement of anti-trust laws by placing the burden of proof of innocence on those charged with certain violations, such as presenting identical bids, uniform price raises.
  2. More careful scrutiny of mergers and interlocking relationships.
  3. Supervision of investment trusts and gradual separation of banks from holding companies.
  4. Supervision and publicizing of activities of trade associations;
  5. Amendment of patent laws to prevent use of patent controls for suppression of new inventions.
  6. Correction of tax laws to encourage competition and dividend distribution.

You will notice, of course, that almost all of Roosevelt's reforms have been rolled back in the intervening seven decades and here we are again, right back where we were in the 1930s – a nation controlled by Business Interests with a People who are suffering and near the end of their ropes.  Obama had the opportunity to come in and push for a new, New Deal but that opportunity was squandered in his first two years and now we dwell in the muck and quagmire that is the current state of affairs in Washington.  

Perhaps things have to get worse before they get better.  Perhaps we can't have proper reform until the entire system crashes.  Perhaps that will happen on Tuesday?  As it stands now, it would take an unprecedented act by both houses of Congress to move a bill to the President's desk in 48 hours.  Tom Daschle was a Senate Democratic leader in the mid-1990s, when Congressional Republicans forced government shutdowns rather than compromise on spending cuts states in the NYTimes:  “That was nothing compared to this. That was a shutdown of the government; this could be, really, a shutdown of the entire economy,” Daschle said. “You can’t be too hyperbolic about the ramifications of all this.”  

Democrats and Republicans with legislative experience agree that even if both sides decided Saturday to raise the $14.3 Trillion borrowing ceiling and to reduce future annual deficits, it would be extremely difficult for the compromise measure to wend its way through Congress before Tuesday’s deadline, given Congressional legislative procedures.  “Failure to Raise Debt Ceiling Could Turn the Economy Back Into a Recession” was the headline on a statement from the U.S. Chamber of Commerce.

















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  1. Phil / FDR Quote – The first one there is actually from Eisenhower, where he’s acknowledging the value and permanence (or what should have been the permanence) of what was created during the New Deal.  However it sure sounds like FDR!
    Here’s where the quote comes from –
    It appears in the fourth paragraph.  Good to read that paragraph in full.

  2. Thanks JC – Always good to get these things right! 

  3. Phil, what you thinking about selling VXX 2013 jan 25 calls 7.4 (71% 18month ) or 40 Calls 4,2 (62% 18 m)?  Or short term selling VXX dec 30 C 2,5 (50% 5 m)

  4. Wow futures are opening up big time. 

  5. ok, futures open gap up, maybe next time…

  6. dont you know their close to a deal thats a sure thing because it has to get done! – I saw it on CNN – FU gap up

  7. Oh you know you should be selling into that kind of BS!  

  8.  That could be one very short lived rally…everyone’s known a deal would get done, and we’d go down to the wire, witness the lack of major downward pressure, ie a May 6 type flash crash…..however, I would argue the real bad news Friday was the GDP number. 1/3% with Q1 GDP going DOWN to 0.3%!
    That’s awful, and going back and looking at the Fed notes from Q2, I can’t see how they revise that number upwards at anytime.  Lots of comments about things slowing slightly in Q2 vs Q1 or Q310….so how does that add up to more than 0.3%?  
    Tough times ahead, as we’re still not doing what needs to be done to get this economy back on track.  Regardless of who’s to blame, we’re not willing to take the medicine we need to cure us of our ills.  So, maybe a couple of days of rallying which could be faded heavily to cover larger positions exiting the game???
    BTW, great conversation in the Friday thread, thanks to everyone for their candor and insight.  Terrific stuff, I’m sorry I lack the experience or knowledge to add significantly to the discussion, but it was extremely enlightening….ZZ, angel, dclark, Phil…..thanks y’all.

  9. Dollar actually up a bit to 74.13, Euro $1.434, Pound $1.64 and 77.22 Yen to the Dollar so they are going to be super-motivated to shove it down (and that’s bullish!).  

    I was at the pool so I missed that open, would have made excellent shorts selling into the excitement.  Unless I missed something, there’s still no actual deal.  

    We’ll see what holds in the futures but the RUT was soundly rejected at 805 and the Dow at 12,250.  At the moment the S&P is 1,302, Nas 2,384, Rut 803.7, Dow 12,214.  Gold is $1,629 and we know there’s a deal when gold starts dropping.  Silver is way behind at $39.71, copper is right on $4.50, Nat gas is $4.13 so their relationship broke and gasoline is $3.078.  Oil is $96.69 and we’re still early in the contract period to go too crazy shorting it. 

    We’ll see if they can stay over RUT 805, S&P 1,305 and Dow 12,250 (Nas is too silly) and that’s pretty bullish if we’re over all 3 and the RUT (/TF) would be the play over the line but VERY TIGHT STOPS.  

    The last official statement I see on Debt is from this morning:  

    8:42 AM Democrats and Republicans reportedly reach a tentative agreement on the framework of a deal that would increase the debt ceiling by up to $2.4T and guarantee an equal amount of deficit reduction over the next 10 years.

  10. Other news:  

    If a debt deal comes in the next three days, you’ll probably be tempted to join a relief rally in equities. Don’t buy it, says James Saft: Weakness in areas like housing and consumer spending isn’t going anywhere, and the trend toward U.S. austerity likely won’t change until "after the beginning of the recession it will help to cause."

    "Not since 2008 have federal officials and bankers been so clearly aligned in their push for the same policies," goes a NYTarticle describing the concerted effort by the financial industry to get debt ceiling legislation passed. "Everyone was on the same page," says a power broker, describing a recent meeting of lobbying honchos at the Treasury Department

    "What’s with all the Bernanke bashing?" asks Gregory Mankiw? He’s assailed from the left and the right, and received a 95% disapproval rating in a CNBC poll. Yet Bernanke has shepherded the economy through the worst financial crisis since the Great Depression and has inflation pretty much where he wants it. 

    Regulators shut three banks on Friday, bringing the total failures in 2011 to 61 so far. The banks closed were in Indiana, Virginia and South Carolina, with the combined cost to the FDIC’s insurance fund expected to be $253.4M. By this time last year, regulators had shut 108 banks.

    Rage from China’s citizens over a tragic high-speed rail crash is shining a light on a critical issue for the country’s economy:the bigger collision between the need for hot-running growth, and the corruption and corner-cutting by a secretive government that may not survive a move to transparency.

    The SEC has sent subpoenas to energy companies about how they calculate the performance of their shale gas wells. Regulators are concerned firms may be overstating how their wells perform and how much gas can be extracted, and that there are discrepancies in their disclosures. 

    The Justice Department is intensifying a probe into whether the six companies that recently bought patents from Nortel could use the IP to unfairly hinder smartphones using Android (GOOG). The companies include Apple (AAPL), Microsoft (MSFT) and RIM (RIMM). 

  11.  Phil—seriously, does this mean all the f n MoMos will be up 5% at the open??

  12. Obama sell out.     He’s sold out his base so that there’s no ceiling vote until after the Presidential election.  The fool, a $Trillion spending reduction and no support for any fiscal stimulus /job creation will leave us mired with 22% real unemployment as we slide into Ddip.  I guess that’s what happens when you elect an eloquent social worker as President.  Two fools in a row now.

  13. Phil, after pointing out the documentary "Gasland" I saw it this weekend and of course was horrified.  Not from the fact that Oil and Gas Companies throw away the lives of people like they are just rubbish on the ground but from the fact that if it weren’t for documentary makers, the truth would never come out.  Are there any journalists out there anymore???  There are more stories involving deep seeded corruption with roots that go far into the government to be exposed now than maybe ever before and we rarely see any stories on it.  In the 70′s, Woodward and Bernstein lived for this.  There would be no Watergate Scandal in this day an age, it would be spun to look like the boys were just gathered to play poker and reporters would be politely told to go away , there is no story here, no go spend some time with your kids as they are still healthy, for now.  If there was a shred of justice in this country, these execs of the Oil and Gas companies should be in prison for genocide of their own people as well as Dick Cheney for numerous other crimes.

  14. rustle / journalism – One of the problems with journalism, as I’m sure you know, is that no one pays for investigative journalism anymore (ok, it’s not yet extinct, but is on the way).  It is very expensive and the best of it has traditionally been the province of print journalism, which is dying because of online alternatives.  That’s why PBS/NPR are so important, as are papers like the UK’s Guardian.  The Guardian was founded and is maintained by an independent trust.  If only more of our media could be funded this way, we might have more of investigative journalism that has a real impact.

  15. I still think part of the problem of print journalism dying is precisely that.  They don’t put money into investigating stories so the papers are filled with the same paparazzi crap you can read at or tmz.  There is no "scoop" by any paper today.  But journalists can still do investigative work without using much money also.  I mean the gasland story was just phone calls, request for interviews and visiting some people.  Getting a water sample tested.  None of this is big money so I don’t think you can put the blame solely on expense.  I think it’s just a culture of laziness.

  16. rustle – I didn’t intend to say it was "only" a question of money.  I agree that they tend to focus on "paparazzi crap" but they sell what the masses want (unfortunately).  As to journalists doing their own investigative work – how do you expect them to do that when their bosses are editors who say, "I want you to cover X and don’t spend a minute on that pithy stuff"?  My brother-in-law was a journalist at a small town paper in Colorado and had to leave the field because he could get a lot higher salary as a high school teacher!  He did a great job and mourns what has happened to journalism, but he was on the front line and what I’m describing is his experience.  He now tries to do some stuff on his own time and dime, but that’s not easy when you have a family and another full time job to boot!

  17. Like I said, for some things I agree with that statement, but your brother-in-law was a journalist at a small town paper in Colorado, what’s the excuse for a NY Times or Washington Post?  Their not small town papers and their stories go worldwide.

  18. Phil / QE3    Clearly the economy is headed, now more rapidly with confirmation of austerity, for Ddip.  Logic is go short, but will some form of QE3 come out of left field without warning, or will Ben need the ‘cover’ of Ddip evidence to bring out the cannon again?  Just don’t wan’t to be caught with my pants down with my shorts exposed!

  19. This about sums it up.

  20. Seems like a pretty muted reaction in the future considering all the projections for a fantastic rally.

  21. exec – You’re joking right?  You know people who say "the poorer half doesn’t pay taxes" are talking about federal income taxes, not all taxes (property, sales, FICA, local/ state, etc.).  And let’s imagine we had an income distribution like we had in 1973 – do you think more people could actually afford to be paying income taxes (as they did back then)? I think so.  What the federal government has effectively done since that time has been to ameliorate (to a very small extent) growing income inequality through the tax code. 
    Here’s a different way to get the "other half" to "pay their fair share."  How about we make this country a bit more equal from an income standpoint, like in the good old days, and then a lot more of the people will be paying taxes?  Would you go for that?

  22. Hail Caesar

  23. Tentative debt deal = ONLY $1 Trillion over the next 10 years?  That USED to be a lot of money.  NOW, it’s a joke.
    Have we ever seen a sitting President so adamant about raising taxes?
    How about a political party so willing and ready to crash the economy for their ideology?
    We need some new national leaders!  Keep voting all the bums out, regardless of party, until we get a group willing to work together to REALLY solve our fiscal problems…

  24. tuscadog/Q3 - bad is good and good is better…I got caught with my pants down short Friday morning, and spent the rest of the day cleaning up the mess.  I keep forgetting that the more horrible the economic numbers…the more likely the markets will get the Bernank Q3 put, and thus rally! 
    Phil/Obama - so do you really agree with tuscadog that Obama is selling out the democrats?  Most of your recent articles treat the word "republicans" quite harshly…at some point you are going to have to treat Obama like one!  Honestly the guy had potential, and the perfect crisis to change America…and he fracked it up quite nicely, agreed?  Attempting to iron out who is really to blame in Washington is the ultimate distraction from formulating and enacting long term solutions.  I pour over dozens of forums weekly, and can say the one common factor, no matter how intelligent or ignorant, how poor or rich, how redneck or elite…the repub versus demo "war of words" is everywhere, and only getting worse as the financial conditions and standard of living continue to deteriorate. 
    Is it possible to expand the forums, and start a brainstorming thread to spur creative solutions?  Something I’ve never ran across myself.

  25.  Congressional Reform Act of 2011

    1. No Tenure / No Pension.
    A Congressman collects a salary while in office and receives no pay when they are out of office. 

    2. Congress (past, present & future) participates in Social Security.
    All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.

    3. Congress can purchase their own retirement plan, just as all Americans do.

    4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

    5. Congress loses their current health care system and participates in the same health care system as the American people.

    6. Congress must equally abide by all laws they impose on the American people.

    7. All contracts with past and present Congressmen are void effective 1/1/12.
    The American people did not make this contract with Congressmen. Congressmen made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

  26. jabobeast. WELL SAID.

  27. Rep. Emanuel Cleaver (D-Mo.), the leader of the Congressional Black Caucus, who earlier in the day called the emerging debt ceiling deal a "sugar-coated Satan sandwich," stood by his criticism in an interview with MSNBC following Obama’s announcement of the deal.
    "We lost this early on," Cleaver said. "I came back to Washington at the beginning of the year thinking we were going to create jobs, and we allowed the national discourse to change from jobs to the debt, and so right now there’s very little we can do."
    "If I were a Republican, I would be dancing in the streets," he said. "I don’t have any idea what the Republicans wanted that they didn’t get. And I can’t tell you anything that Democrats got out of this deal, except that we’re probably going to prevent the nation from crashing."

  28. jabo – for a moment I thought they passed this law…

  29. jabo—my daughter interned for VP Biden and also worked as an LA handling foreign policy and social security for Senator Sherrod Brown—may I send her your proposal for the Congressional Reform Act of 2011?

  30.  guys--I wish I could claim it to be mine ;-)  

  31. Well, if there was ever any doubt that Obama was in bed with the banksters, I think that’s been pretty much laid to rest. I get the sense he just traded a debt deal for a second term, so 5 years till we get anything done.

    Ha! I KNEW he wasn’t the second coming. He’s just a sell out, only we have to write the checks. However, the cynical side of me wonders what all the celebrating is for, nothing has been voted on. How about a one or two day super-sucker, retail rally, then a failed vote that blows up the markets? Wouldn’t that be fun! Have to watch and see if this rally gets sold into or not.

  32. Looks like markets are going for at least 2% tomorrow.. need to stay focused :-)
    China’s factory sector struggled with its weakest activity in 28 months in July as manufacturers grappled with a credit shortage and softening global demand, the latest sign that the world’s second-biggest economy is slowing.
    Data showed China’s official purchasing managers’ index (PMI) dipped to 50.7 in July from June’s 50.9. Output eased, although the fall was accompanied by a modest rise in new orders.

  33. For me, it’s tough to chase this rally. The pop is going to be huge, right on the open, and obviously fadeable. However, tomorrow is the first of a new month, so there may be some tailwinds there to get to 2%.

    Need to go back and check Phil’s lines and see where we are. This grand deception around the debt ceiling may have hidden the GDP news and revision pretty well, but don’t think that will last very long. Glad I went neutral into Fridays close, but would be afraid to chase this rally. Probably just look to short against one of Pbils lines. Would like to see all indexes back above must hold lines for at least a day before getting serious about longs.

    will see in the am.

  34. Let’s keep in mind it’s not a real recovery until we take back our 50 dmas at least and that’s: Dow 12,321, S&P 1,310, Nas 2,753, NYSE 8,218 and Russell 816 – we were WAY over those before the debt BS began so ANY failure at those levels means something else is very wrong.  Even then – keep in mind that those 1.25% lines are a WEAK bounce as we’re down from the 5% lines and until we’re back over our 2.5% lines we’re still in a down-trend.  

    This is why we took that money and ran and flipped bullish on Friday’s spike down – it doesn’t matter how terrible things look – it’s always smart to take profits off the table (selling into the excitement) and make small bets against the trend – especially if you correctly bet on the trend in the first place!  

    IF this deal gets through Congress, THEN the ratings agencies may still downgrade us and then you’ll have two weeks of people freaking out about what that means for our future.  

    Gold got smacked down to $1,615 even though the Dollar is back below 74 at the moment but oil is up to 97.14, which is why we didn’t want to play it this evening.  Silver is $39.67 at the moment and no move from copper ($3.50) or Nat gas ($4.15) but gasoline (/RB) flew up to $3.1085 and just got rejected at $3.11 so a nice short below that line on expectations the Dollar holds 74.  

    Keep in mind my BEARISH premise for a debt solution is that the Dollar will rise and tank the markets.  The Dollar fell from 76.72 on the 13th to 73.42 Thursday (4.5%) on the premise that the US might default or might have a solution that prints money – that’s not happening so – logically, the Dollar should go up from here, back towards 76 or HIGHER!  That’s going to take the markets down because they were falling pretty hard DESPITE the drop in the Dollar (see Stock World Weekly) so I doubt it will take much of a pop in the Dollar to take us down.  That’s why we went short on Gold and now we can short oil (/CL) below the $97 line and short the Dow (/YM) if they fail 12,250 (now 12,267) in the futures, watching the Dollar at the 74 line.  

    Just like we sold our short-term shorts on Friday’s open, we’ll want to be selling the short-term longs (especially the ones we picked up on Friday) into this morning’s assignment – assuming the markets stay bullish that long, of course –  we’ll see later.  At the moment, Asia seems happy with Hong Kong up 1.5% but the Shanghai is flat but up 2% from a terrible open.  India is up 1% and the Nikkei is up 2% and back over that critical 10,000 mark at 10,025.  

     Monday’s economic calendar:
    10:00 ISM Manufacturing Index
    10:00 Construction Spending

    Notable earnings before Monday’s openALLCNAHUM,LNVESOHUUDR

    Notable earnings after Monday’s close: BGCBXPCVG,FOEFSTHLF,HOLXIDTIPFG


    Stock index futures are sharply higher – S&P 500 +1.5% - as a deal to raise the debt limit appears within reach. The greenback is solidly higher against the safety currencies – the yen and the swissie – but lower vs. the risk currencies – the aussie and the loonie. Treasury yields are marginally higher. 

    China’s official PMI slows to 50.7 in June from 50.9 previously. The number came in faster than expectations which had been parred back in the wake of HSBC’s flash PMI printing below 50ten days ago. Shares all over Asia are flying – up around 2% – but that’s because of the debt ceiling deal.

    The Emerging Debt Plan


    The latest proposal, according to officials on both sides:

    There is also a provision to have Congress vote on a balanced-budget amendment.

    The debt-ceiling increase would be done in two phases: $900 billion initially; a second increase of $1.5 trillion to get through 2012 if Congress agrees to committee cuts or passes a balanced-budget amendment to the U.S. Constitution. Otherwise, the second increase would be $1.2 trillion and would come along with broad spending cuts.

    The committee wouldn’t necessarily tackle a tax overhaul. But President Obama is threatening to veto any extension of the Bush-era tax cuts unless Congress acts on an overhaul of the U.S. tax code

    $917 billion in the first stage of deficit reduction.

    $1.5 trillion in the second stage of deficit reduction to be defined by congressional panel.

    $1.2 trillion in cuts triggered if committee doesn’t succeed, part would be Defense cuts and part would be non-Defense cuts, exempting Social Security and Medicaid, and only affecting providers in Medicare.

  35. Am I pissed at Obama?  Of course I am but I’m not switching sides because I’m unhappy with what my leader’s doing!  That’s like giving up on Washington when he retreated into NY (before leading the attack on Trenton) – battles go back and forth and Obama made a strategic retreat on this one – now the Reps own whatever bad comes out of this for the people but it’s Obama who cared about America enough to compromise.  Also, don’t forget – Congress is totally out of control and the House could still tank this and Doom the Republican party to National Joke status.  

    Momos/Jabob – You cannot seriously still be playing those things, can you?  

    GasLand/Rustle – That’s my goal of the week, I want to make sure everyone sees this documentary.  If it wasn’t for HBO, I wouldn’t have seen it – it’s so hard for a documentary to get noticed.  Also, the guy who interviewed me about the oil scam couldn’t get anyone to give him money because they were all terrified of being sued and no network would touch it so the project is dead at the moment – that’s how things work in the Corporate Media.  When I spoke out against ICE I got slammed by their lawyers the next day as did Seeking Alpha.  It doesn’t matter whether a case has merit, as long as they can make you go to court and take up dozens of days of your time and cost you tens of thousands in legal fees, that’s enough to break most writers.  Also, with our insane Supreme Court, freedom of the press is not what it used to be so you can’t get the MSM to investigate anything anymore – even if they want to – as they are so terrified of getting sued by deep-pocket corporations.  

    So what is the game in the press now?  Corporate media attacks individuals but never other corporations.  Politicians are fair game but never a word about their sponsors.  Woodward and Bernstein these days are a lawsuit waiting to happen so people like that don’t have jobs at most papers.  

    Paying for journalism/JC – That’s because if you pay for it, you can get sued for it.  One of the smartest things Corporate America ever did was allow lawyers to charge $500 and $1,000 per hour for their service.  While that seems counter-productive, what it does is create an exclusivity to "good" lawyers and "good" firms that prices them out of the ballpark for ordinary people and smaller competitors.  Your local $150 and hour attorney is no match for a major law firm the same way your local minor-league ball team is no match for the NY Yankees – all the top talent has been pulled away from the bottom leaving ordinary citizens with inadequate representation.  

    Suing people or competitors into bankruptcy is now standard practice for Big Business and it also stifles innovation through they club-like use of patent law – as you can see from the frenzy all the phone and PC makers are engaging in as they buy up patents and sue each other.   They all end up settling with each other but the real game is to have a court uphold the patents so that all the little companies are completely frozen out.  AAPL, HPQ etc. do a great job of making sure there will never be another company starting out of a garage that will invent something to challenge their business model.  

  36. I think its all about the Naz tomorrow lifting the markets, the S&P and RUS have been the weakest out of the bunch. Watching those 2 very closely while going long tech. $ 74.79 should be easy resistance to cross, if its weak they will take the markets higher and the cherry on top is a sell off in the bond market. Financials should also bounce after weeks of weakness.

  37. Great point on taxes/JC – EVERYONE pays SS and medicare.  That’s 6.25% even if you don’t count the part on the employer’s side.  Sales tax is 6%+ in most places, state taxes 2% so that’s 14.25% already for the people who pay "no taxes," which is already about what the top 1% pay on average.  Add in property taxes, school taxes etc and it’s amazing they can afford a home and once they have a home it’s gas, water, phone, cable, garbage etc – all things rich people don’t think about because it’s a small part of their salary but which, for poor people force monthly choices of which bill not to pay in order to keep things going for another month.  

    Not only that but poor people don’t get to buy in bulk – they buy everything in small amounts, which is much more expensive, including housing.  As anyone in real estate knows, you can make a fortune being a slum-lord as you can charge $600 a month for a 10 x 15 room while 1,500 foot apartment will not rent for $6,000.  

    Poor people don’t have cars to drive around for sales, they go to whatever is close that doesn’t rip them off too much.  Even if milk or butter or can’s of raviolios are on sale – they don’t have room to store them (back to those mini-fridges) in their small apartments.  There is also the poverty of time as poor people go to a laundrymat and sit while my laundry is spinning away in my basement and I’m able to work or spend quality time with my kids.  The same goes for all the endless lines poor people are forced to wait on in their daily lives.  We take our cars for granted but just try spending a week not using yours and see how much free time you lose.  

    Poor people simply can’t afford to spend money to save time.  They don’t hire gardeners or painters or plumbers or anything they can possibly do themselves – even if it’s inefficient to do so, because they simply don’t have a choice.  Are you terrified when your kids start a new school year that they will come home with a list of books they need that you can’t afford?  That’s a "tax" too since books used to be supplied by the school (as did lunch).  

    Don’t even get me started on banking.  Banks totally screw poor people over.  Transaction fees are massive taxes on the poor.  I always take at least $300 out of an ATM so I don’t feel like an idiot paying the $2 fee but poor people pay $2 every time they need $20.  We have direct deposit while poor people get payday loans that work out to 300% annualized interest.  If you don’t have a checking account, by the way (and many poor people can’t afford the fees) then the utility companies charge you extra for handling money orders and the banks charge you for it on their end too.  

    People who think poor people pay no taxes are simply clueless.  They pay not taxes because they have no money – that’s not a complicated concept at all.  I don’t usually say anything because it makes me very angry to hear that kind of crap spouted so this is about as nice as I can be explaining it to people.  The bottom 80% have 7% of the wealth and about the same portion of the income goes to the bottom 60% while the top 40% make 94.4% of the money globally and the top 20% get 82.7% – to complain that they don’t pay enough taxes is not just ignorant – it’s prejudiced, although we don’t consider classism to be prejudiced do we?  It’s just "the American way" and how sad is that?  


    This study from Harvard does a good job of pointing out the problem – people think we have a much more fair income distribution than we actually do (and you can thank the MSM for that) and the richer you are the less you think you have compared to the rest.  The average person thinks the bottom 60% have 5 TIMES more than they actually do and think the next 20% have more than double what they actually do.  We are a brain-washed culture that tortures the poor out of ignorance more so than malice but no one wants to hear about it, do they?  

    So  I’ll stop there.  

  38.  Texas Income Household











  49.  plutocracy

  50.  Look at the wealth gap grow!

  51.  The last two decades were great...if you were a CEO or owner.  Not if you were anyone else.

  52.  Meanwhile, income tax is getting lower and lower for the rich

  53.  If you aren't in the top 1%, then you're getting a bum deal



  56. Bought /CL at 97.  Looking for the tripple tap to 97.45

  57. Phil
    These charts/graphs are scary….thanks for sharing though.  Can I please share these charts with others? Copy and paste via email?  I was shocked recently when someone said to me that "there has never been easier time to get ahead" (start a company and climb the economic ladder).  I was in disbelief that he said that.

  58. Sharing/Russell – Of course you can.  They’re not mine, just various linked images I picked up on Google.  The more people that are aware of these issues, the better.  

  59. Oil/DDay – Be careful, I’m not liking oil long.  Dollar smacked down to 73.75 and could not boost the markets past my lines – that’s not good!  

  60. The recent activity in the sausage making process that is our ‘government’ isn’t the incompetent, inept, and failure-driven procedure that it has been portrayed to be. In spite of Phl’s rants.
    It has, gradually and over several hundred years, reached critical mass in an eternal struggle of two (at least) competing visions for the country. It’s messy, it’s puerile, complicated and it’s frustrating beyond belief. It is however the only way it can be. 
    It IS what it Is.
    However, it should make clear once and for all that this country is too big to be governed by one body whether it be 535 members of congress, the other  branches, and the fourth estate that pretends to do so.
    It must either be split up into several regions each with its own type of governing body or prepare to spend the rest your lives, your children’s lives, and their children’s lives and theirs in an ever-increasing cacaphony.
    If you are not yet convinced that it is hopeless to expect a nation of this size and breadth, with all its multi-poly diversity to be governed with anywhere near the efficiency of a dozen different nations (witness the protests in Israel right now about poverty inducing inflation for real effectivness)  then you will live a life of constant complaint, tearing your hair out and screaming into the void.
    It is only going to get worse, never better the larger the population grows. There are no men and women alive or yet to be born in any political party that can accomplish even an iota of what needs to be done to have a society this gargantuan and divided forever that is responsibly governed.
    Phil’s ruminations, rants, and criticisms are all lost in the chaos. The suffering will be born by those with fantastical expectations of our so-called leaders who would need to be Captain Americas to do what needs to be done.  They may think they are gods and kings but they are sociopaths and psychos with a self-regard that Zeus laughs at.
    Break it up or expect the worse.
    That is the only choice.

  61. /CL/Phil. Yea I was trying to play the waves and it didn’t quite work out. Lost a dime so not too bad. The only bad thing is now I have to trade during business hours today.

  62. Crap. I should’ve trusted my eyes and stuck with it. Oh well.

  63. They just never miss an opportunity to sell into the crowd, do they?  Could be we drift down until this thing has passed the house.