Reports of Our Recovery: Blue Sky, Fairy Dust, Puffs of Smoke and Unicorns
By George Mantor
A couple of weeks ago a reader sent me an email linked to a number of mainstream media stories pointing to the rising stock market, the jobs report, and the supposed improving real estate market with the comment, “See, you were wrong. We are firmly on the road to recovery.”
Really? I don’t think so. I wish we were. The highly touted jobs report she referred me to with its 157,000 low wage part time jobs doesn’t even make a dent in the 12.4 million Americans who lost good jobs or lucrative careers.
As a result, the unemployment rate itself remains unchanged. The Bureau of Labor Statistics is also notorious for giving overly optimistic numbers and then revising them downward later so that the current jobs report will reflect improvement over last month’s now revised downward number. I know, right?
In January, incomes declined the most in the last twenty years. Recovery? Recovery? Don’t talk to me about a recovery!
Manufacturing showed no signs of improvement and transportation lost jobs. Construction showed a small improvement, but there are still 2 million fewer construction jobs today then there were seven years ago. If we aren’t making things and building things, we cannot recover all of those lost jobs.
Retail electronics had a boost in January, but with the Super Bowl, playoff games, basketball and hockey, I’ll bet that was just a blip.
Now cometh the dreaded “sequester” designed and soon to be implemented to make sure that the middle class never gets back on its feet again.
The 14,000 stock market? Are you fucking kidding me? Average people aren’t buying shares in profitable companies to finance expansion and growth in exchange for dividends. If companies were actually producing anything, then transportation would not be contracting.
At some point, the disconnect between imagined corporate profits and higher stock prices will be unsustainable.
Today, it’s just computers kicking algorithms back and forth in some strange form of high-tech Pong that only those who created the computer program comprehend.
Who programmed them? God only knows. The Wiz? The “Fabulous Fab”, Fabrice Tourre? Vladimir Putin? Kim Jong Un? Mahmoud Ahmadinejad? China?
There isn’t even any insider trading anymore. Who needs it? It’s been fully automated. It’s all insider trading.
The computers do it. Who really knows what is in the codes of those programs? The lightning fast watchdogs over at the SEC, the OCC, the FDIC, the FBI, and the AG? They’ve done everything in their collective powers to facilitate and abet this looting of America. Is it real? Is it accurate? Does it do what it does legally? Is it set to hit 14,200 and then drop to 5,000?
Insiders sell stock they don’t even have and which often doesn’t actually exist. No one knows. There are way more shareholders than shares ever issued. And, the money is all made up. The entire thing is a massive illusion created and operated to benefit wealthy insiders.
The numbers drive themselves to benefit the people who control the computers. They will now make huge bets against the market and tear it all back down again. And, get even richer.
There is no connection between company profitability and stock price. It’s a game played with money that doesn’t even exist, the end result of which is to transfer individual wealth to them. Note how well it is working. Forbes list of billionaires got richer.
While J.C. Penny is on death watch and Wal-Mart has stopped re-stocking its shelves, upscale boutiques are laundering worthless QE money through Gucci, Prada, and Jimmy Choos. They know that if you have it, now is the time to spend it, because tomorrow…well…tomorrow never comes for them, but it surely will for the rest of us.
This brings us to the much heralded rebound in real estate. Fiction! Pure, unadulterated fiction. The numbers used are themselves deciving and the books are cooked. The National Association of Realtors, (an extension of the bankstas) has been falsifying numbers for years. Modest price increases tend to reflect the fact that, in most markets, bottom-feeding foreign investors have siezed, litereally, the lowest rung on the price ladder and are now moving up to higher priced properties.
At the same time, hedge fund managers are buying seven figure properties with cash.
It doesn’t matter, housing doesn’t drive the economy; it reflects it. No jobs recovery and no plan to create jobs any time in the future means no real appreciation in real estate.
Certainly there is a baseline of activity driven by the events that occur in individual lives. Promotions are still being given and babies are still being born. But more and more, young people lack the resources to marry and start a family. The student loan crisis will be the next shoe to fall.
Further, the market is constrained by large pockets of negative equity homes, high unemployment, few prospects for improvement, and a retail sector contracting at an alarming pace closing stores in malls small and large. Big box warehouse tilt-ups sit empty all along America’s freeways, their weedy parking lots a stark reminder of how things really are.
I guess we went over the fiscal cliff, but it actually happened long ago. Like the man falling from a forty-story building said as he passed each floor, “So far, so good.”
Inevitably, those would be his last words. And, maybe ours. Washington has no plans to fix anything. So sooner or later, there is going to be a brain-splattering thud.
Until then, pass the hookah, Caterpillar, and remember what the Door Mouse said, “Feed your head.” Who needs reality?