Look at this chart:
LOOK AT IT!!!! This is America, damn it! We peaked out in earnings in 2000 and it's been downhill ever since. Even worse, this is America AFTER the Federal Reserve spent $4 TRILLION to boost the economy. This is America AFTER our Government plunged another $6 TRILLION into debt – supposedly to save jobs and support the economy.
This is a DISASTER! If this were the chart of a company you owned – you'd be selling. If there were a board of directors, we'd be looking to make changes, right? Actually, there is a sort of board of directors and, as is often the case with Corporate Management – they're the only ones making any money!
Only in Washington DC and Dick Cheney's Wyoming are people in this country still making as much money as they were in the good old days (Clinton years). The rest of the country is in various states of decline – some of it fairly drastic – and in big states like Ohio, Michigan and Illinois, where people are earning about 20% less now than they did 14 years ago.
Our standard of living is in decline, especially when you consider that inflation is chewing into those lower wages from the other end as well. How much more evidence can we possibly need that the Bush Tax cuts were a complete and utter policy failure? Yet you will hear none of that in the MSM. What TV station owner or newspaper & magazine publisher is going to tell you that they should be paying 20% more taxes than they are paying now?
There's a reason that, despite the BS Employment Numbers put up by the Administration, that the #1 concern of US voters is JOBS! People may HAVE jobs (actually 20% of the families in our country have NO ONE employed at the moment) but, clearly, from an economic perspective – the jobs suck! Even people lucky enough to keep their jobs through the crisis haven't had raises in a decade but, of course, they are too afraid to leave because we all know people who lost their jobs and didn't find another one for a year – who can afford that?
I do love these polls, it's so interesting to see the difference in what people from each party care about:
6 times more Democrats and Independents care about Education than Republicans. This is why I use big words when I make fun of the GOP – they don't understand them anyway… 
Democrats are no longer worried about Health Care – we fixed that. Republicans are still freaking out about it. Republicans think Racism is no longer an issue – nor is pollution or the wealth gap, which makes sense – how could anyone who understands the wealth gap be a Republican?
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The moral majority is still a big factor in the GOP, with 10 time more Republicans making morals and religion their top issue than the Godless Democrats. The Deficit is also a huge disparity, with 5 times more Republicans worrying about it than Democrats and the Independents are right between the two on that one.
The GOP should be concerned with the huge number of Democrats, Republicans AND Independents who are dissatisfied with the current leadership as all 234 of their Representatives are up for re-election (or not) in November.
Unfortunately for the Democrats, 21 of the 36 Senate seats up for grabs already belong to them and the GOP is projected to even up the Senate if the Dems can't improve their narrative between now and November. The GOP needs to flip 6 seats to take control – it's going to be a very interesting 6 months ahead!
It's tricky, as investors, to digest this information. It's great for our Corporate Masters when wages are depressed and, unlike us, they don't have to live in this declining country. They certainly don't have to sell here. The transfer of wealth from the poor and middle class to the top 1% isn't just an American phenomenon – it's Global!
That means that 1% of this planet's 7Bn people or 70M people, are very, very rich. And it's not 70M people – it's 70M families so figure about 170M people are able to spend 20-1,000 times more than the median income (see chart in yesterday's post) in their country. Even in countries where the median income is $5,000 – that still puts them into what would be the top 10% in the US.
When we were growing up and even when most of us went to college, we didn't consider the GLOBAL MARKET because it was, traditionally, too hard to reach. That's not true anymore. I can buy or sell something on Ebay with people in Africa and UPS will get it there in 3 days. There are virtually no barriers to global trade and the Internet makes it just as cheap to advertise your product in Botswana as it is in Brooklyn.
So what we are seeing, in terms of rising profits, is the success of Globalization that has been made possible by the Internet (circa 1995ish). All that BS they used to promise us about changing the World is actually happening – only not quite as quickly as we expected and, unfortunately for US Citizens, Globalization is also globalizing our wages to bring them DOWN to the levels that other countries have suffered with for decades.
I'm not proposing a "fix" to this problem – the obvious one is to tax excess wealth but the problem with that is, if we do it and Russia doesn't – then our Corporate Citizens and the top 1% will simply move there. There's no patriotism at work here – they threaten to do it all the time. If you think things are rough in this country now – think about what would happen if the only people with any money left too! So we're trapped and the only thing we can really do about it is to be rich – so you too will have the freedom to move to wherever they tax you the least, or where the business climate is best.
There's still a lot of nationalism in people's thinking but it will be gone in another generation or so. If you had a business in the US and most of your customers were in Florida – you'd consider moving to Florida. As we continue to globalize, companies will make very different decisions than they have in the past, because it no longer matters where your Corporate Headquarters are. In fact, the US is actually falling far behind in infrastructure – which is what made us a Global powerhouse in the first place.
Long-term, I'm still bullish as Corporations will adapt and survive in the changing global landscape but, between now and then, there are likely to be some serious dislocations that are currently being papered over by our Fed and other Central Banksters cranking up the printing presses and handing out Trillions to support the struggling top 0.01% (struggling to wipe you out).
Take CAT, for example (we're short), their April Global Sales Report shows a 13% decline from last year and this is the 17th consecutive decline posted by the company. NONETHELESS, the company is still making about $1Bn per quarter – because they laid people off and, more importantly, got FREE MONEY to finance their debt. Artificially low interest rates are causing artificial corporate profits and, for a company like Caterpillar, with $64Bn in liabilities, shaving a couple of points off their interest rates more than makes up for a little 13% decline in sales.
Money is so cheap for CAT that they bought back $2Bn of their own stock last year (4%), rather than pay down 3% of their debt. Having less stock to divide into lower earnings is another trick corporations have been using to "beat" expectations this year. Again, as a worker for the company or a citizen of the country that is going into debt to finance this fiasco – you might be disgusted but, as a shareholder – THANK YOU UNCLE SAM!
As I said yesterday – you can't fight the Fed. As long as they keep printing money and handing it out to their rich friends, this charade can go on and on. God help us all when the music stops…
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From Bloomberg, May 22, 2014, 10:42:25 PM
China’s new-home price increases slowed across the country last month amid tighter credit that prompted developers to give discounts. Klibaner speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)
China’s biggest homebuilding slump in
at least four years isn’t enough to dissuade a majority of
economists from predicting real estate will still contribute to
2014 growth. Property controls will be eased, they said in a
Bloomberg News survey.
To read the entire article, go to http://bloom.bg/1kufNC1
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From Bloomberg, May 23, 2014, 1:21:08 AM
Nissan Motor Co. (7201)’s luxury Infiniti
brand forecast record sales this fiscal year, driven by Chinese
demand for models including the Q50 sedan.
To read the entire article, go to http://bloom.bg/1goweAf
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From Bloomberg, May 22, 2014, 11:03:36 PM
Violence in eastern Ukraine cast a
shadow on this weekend’s presidential election, as government
forces suffered their worst losses in battles with pro-Russian
separatists since the secession campaign began in March.
To read the entire article, go to http://bloom.bg/1kuNEuC
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From Bloomberg, May 22, 2014, 4:00:20 PM
President Vladimir Putin is trying to transform Crimea into the Singapore of the Black Sea. That effort so far has cost Russia’s newest republic its entire banking system and all three of its McDonald’s.
To read the entire article, go to http://bloom.bg/1oXa7nd
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From Bloomberg, Apr 24, 2014, 5:20:19 PM
Billionaire hedge-fund managerJohn Paulson said today that Puerto Rico’s economy is at the beginning of a turnaround and predicted the island will become the Singapore of the Caribbean.
To read the entire article, go to http://bloom.bg/QCeo1c
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From Bloomberg, May 23, 2014, 2:08:39 AM
He speaks from the sidelines of the World Economic Forum on East Asia in Manila with Haslinda Amin on Bloomberg Television’s “On the Move.” (Source: Bloomberg)
Schools were shut and international television channels were off air as stations broadcast military logos and periodic army statements, a day after Thailand’s military seized control following a six-month political stalemate that has sapped economic growth.
To read the entire article, go to http://bloom.bg/1m8oqlI
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From Bloomberg, May 23, 2014, 12:01:00 AM
Chief Executive Officer Meg Whitman is still struggling to turn around Hewlett-Packard Co. (HPQ), spurring more job cuts after 11 straight quarters of declining sales.
To read the entire article, go to http://bloom.bg/1jb0F81
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From Bloomberg, May 23, 2014, 3:48:22 AM
Australia’s program to rein in
pollution is losing momentum, the latest in a series of setbacks
for the international effort to tackle global warming.
To read the entire article, go to http://bloom.bg/1oXh6g6
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Marc Faber Sees `Gigantic’ Credit Bubble in China
May 22 (Bloomberg) — Marc Faber, publisher of the Gloom, Boom & Doom report, and Ian Bremmer, president of Eurasia Group, talk about U.S. initial public offerings by Chinese companies, the economy of China, the outlook for U.S. stocks and bonds, and investment strategy.
They speak with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)
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China Mortgage Availability Constrained: Klibaner
April 18 (Bloomberg) — Michael Klibaner, regional head of research at real estate firm Jones Lang LaSalle Inc. in Hong Kong, talks about China’s housing market.
China’s new-home price increases slowed across the country last month amid tighter credit that prompted developers to give discounts. Klibaner speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)
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From Bloomberg, May 23, 2014, 3:11:34 AM
KKR & Co. (KKR)’s offer to buy Treasury
Wine Estates Ltd. (TWE) for less than the maker of Penfolds shiraz
could fetch in a firesale leaves the door open for a higher bid.
To read the entire article, go to http://bloom.bg/1n6SVtb
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From Bloomberg, May 23, 2014, 1:50:36 AM
Chinese stock arbitragers are backing
away from the Hong Kong-to-Shanghai price convergence trade.
To read the entire article, go to http://bloom.bg/1n7865E
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From Bloomberg, May 22, 2014, 7:30:23 PM
As Japanese stocks slump, investors have one small comfort: hump day.
To read the entire article, go to http://bloom.bg/1n6Y6t8
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From Bloomberg, May 23, 2014, 2:03:56 AM
Narendra Modi, who until recently was
treated as a pariah by the U.S. and U.K., suddenly finds himself
the object of affection of world leaders embroiled in disputes
from Ukraine to the South China Sea.
To read the entire article, go to http://bloom.bg/1jyPdaR
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From Bloomberg, May 22, 2014, 8:43:37 PM
The World Trade Organization has
ruled in favor of the U.S. in a dispute with China involving
automobiles, two years after filing complaints against the Asian
nation, according to a person familiar with the matter.
To read the entire article, go to http://bloom.bg/RYaT5i
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From Bloomberg, May 22, 2014, 1:25:12 PM
A couple of weeks ago, Andrew Bowden of the Securities and Exchange Commission gave a speech about private equity fees. It was pretty punchy, for an SEC speech. Especially punchy were the bits about “operating partners,” which the SEC views as a way for private equity firms to get paid fees without sharing them with their limited partners.1
To read the entire article, go to http://bv.ms/1lWQ0AJ
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From Bloomberg, May 22, 2014, 6:13:54 PM
Beware the things a mismanaged oil-rich country might do when pressed for money. This rule applies in spades to Venezuela under President Nicolas Maduro.
To read the entire article, go to http://bv.ms/1mb2czi
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From Bloomberg, May 22, 2014, 5:52:28 PM
A commenter, TheRadicalModerate, chides me for my earlier post on Benghazi:
To read the entire article, go to http://bv.ms/1maXSjD
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From Bloomberg, May 22, 2014, 4:50:00 PM
There’s a certain irony in the fact that Airbnb Inc.’s decision to comply with a subpoena from New York Attorney General Eric Schneiderman came the same week that we learned of the death of Gabriel Kolko. Kolko, the eminent historian whose work on the early 20th century showed the role of government regulation in strangling small businesses for the benefit of big ones, would likely have seen in the struggle between the state of New York and pesky Airbnb as further vindication of his theories.
To read the entire article, go to http://bv.ms/1ph5aTA
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From Bloomberg, May 22, 2014, 4:05:17 PM
To read the entire article, go to http://bv.ms/ReFJpT
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From Bloomberg, May 22, 2014, 2:16:46 PM
The foreign strategy that Google Inc. has used to justify keeping billions of dollars in cash overseas, out of the reach of U.S. tax authorities, might not be as foreign as it seems.
To read the entire article, go to http://bv.ms/1jaPgFc
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From Bloomberg, May 22, 2014, 1:07:44 PM
Will Benghazi destroy Rand Paul?
To read the entire article, go to http://bv.ms/1lWKHRG
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From Bloomberg, May 22, 2014, 12:51:37 PM
The first sign of Darth Nikolayevich Vader’s approach is the distant sound of the Imperial March from Star Wars, playing from a speaker on his motorcycle. The music grows louder as he appears, riding upright in a black chariot-style sidecar. A storm trooper drives the bike. (Watch the video.)
To read the entire article, go to http://bv.ms/1lWFYQ8
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German business confidence falls
04:14 AM ET · EWG
States probe eBay following major cyberattack
03:16 AM ET · EBAY
German Q1 GDP confirmed at +0.8%.
02:39 AM ET · EWG
China looks like big winner in landmark gas deal; U.S., Canada may be losers
Yesterday, 07:40 PM ET · OGZPY
Barrick, execs named in $6B class action suit over Pascua-Lama project
Yesterday, 06:46 PM ET · ABX
Report: Ruckus working with Google on Wi-Fi initiative
Yesterday, 06:34 PM ET · RKUS
NYT: BlackRock encourages AstraZeneca to renew Pfizer talks at later date
Yesterday, 06:19 PM ET · AZN
Alcatel in talks to unload cybersecurity unit
Yesterday, 06:08 PM ET · ALU
Aeropostale -17% AH on revenue miss, weak guidance
Yesterday, 04:54 PM ET · ARO
Marvell offers strong outlook, but GM misses guidance
Yesterday, 04:38 PM ET · MRVL
The Fresh Market skies after Q1 results
Yesterday, 04:31 PM ET · TFM
GameStop results boosted by Xbox One and PS4
Yesterday, 04:22 PM ET · GME
Stocks close higher, Russell 2000 jumps while blue chips lag
Yesterday, 04:20 PM ET
H-P guides in-line, announces more job cuts
Yesterday, 04:17 PM ET · HPQ
Best Buy reiterated a Buy at BAML
Yesterday, 04:11 PM ET · BBY
Northern Dynasty asks court to stop EPA from blocking Pebble project
Yesterday, 03:37 PM ET · NAK
WSJ: TD Bank looking into major NYC expansion
Yesterday, 02:55 PM ET · TD
Goldman’s 50 most-loved hedge fund stocks
Yesterday, 02:43 PM ET · GOOG
Lithium battery testing still not good enough, NTSB says
Yesterday, 02:40 PM ET · BA
Google algorithm change dings eBay traffic, could force it to buy more ads
Yesterday, 02:35 PM ET · EBAY
Manchester United and Nike in talks over contract extension
Yesterday, 02:03 PM ET · MANU
RetailMeNot responds to Google traffic report; shares now -20%
Yesterday, 02:00 PM ET · SALE
Obits piling up on Sears Holdings
Yesterday, 01:43 PM ET · SHLD
Bove: Easier D.C. mortgage policy a boon to Wells Fargo
Yesterday, 01:25 PM ET · WFC
Home values fall for first time in over 2 years says Zillow
Yesterday, 01:18 PM ET · SBY
Cree +5.7% after announcing 200 lumens/watt LED
Yesterday, 12:55 PM ET · CREE
3 Signs The Economy Is Doing Okay
03:26 AM ET | by Cullen Roche
There is a persistent concern about recession in the current environment where growth is operating below trend, but there are signs of hope. Three of my preferred real-time economic data points continue to show signs of positive economic trends:1) Rail traffic continues to perform nicely in Q2 after a slowdown earlier in the year. The latest intermodal reading of 6.8% year over year brings our 12 …
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