The US Is Toast

[Lenno]

The Leviathan
James Howard Kunstler

T he economic picture manufactured by the national consensus trance has never been more out of touch with reality in my lifetime. And so the questions as to what anyone might do can hardly be addressed. How can I protect my savings? Who do I vote for? How do I think about where my country is going? Incoherence reigns, especially in the circles ruled by those who guard the status quo, which includes the failing legacy news media.
The Federal Reserve has morphed from being a faceless background institution of the most limited purpose to a claque of necromancers and astrologasters, led by one grand vizier, in full public view pretending to steer a gigantic economic vessel that has, in fact, lost its rudder and is drifting into a maelstrom.
For more than a year, the fate of the nation has hung on whether the Fed might raise their benchmark interest rate one quarter of a percent. They talk about it incessantly, and therefore the mob of financial market observers has to chatter about it incessantly, and the chatter itself has appeared to obviate the need for any actual action on the matter. The Fed gets to influence markets without ever having to do anything. And mostly it has worked to produce the false narrative of an advanced economy that is working splendidly well to the advantage of the common good.
This is all occurring against the background of a larger global network of economic relations that is quite clearly breaking apart. The rising tensions between the US, Russia, China, and the Euro Union grew out of monetary mischief “innovated” by our central bank, especially the shenanigans around debt monetization, which have created dangerous distortions in markets, trade, and perceptions of national interest. Nations are rattling sabers at one another and bluster is in the air. The world is bankrupt after thirty years of borrowing from the future to throw a party in the present, and the authorities can’t acknowledge that.
But they can provide the conditions for disguising it, especially in the statistical hall of mirrors that once-upon-a-time produced meaningful signals for the movement of capital. Instead of reality-based choices and decisions, the task at hand for the people in charge has been the ever more baroque elaboration of a Potemkin economic false-front, behind which lies a landscape of ruin scavenged by desperate racketeers. That this racketeering has moved so seamlessly into the once-sacred precincts of medicine and higher ed ought to inform us how desperate and perilous it has become.
The latest installment of the disinformation game was Friday’s employment release from the US Bureau of Labor Statistics. It was a “blockbuster,” implying blue skies everywhere from Montauk to Malibu. Except that no one with a remaining shred of critical faculty can be expected to believe it. 80 percent of the new jobs numbers were attributed to the mystical birth-death model, a pseudo-scientific fantasy of hypothetical new business starts and associated hypothetical new hires. Demographically, the most new jobs went to the over-55 age cohort — grocery baggers and Walmart greeters — and the fewest to men 25 to 54 (that bracket substantially lost jobs). The official unemployment rate fell to 5.0 rate, with no meaningful discussion of the huge numbers of discouraged people who have dropped out of the workforce.
But the perception of an economy on full throttle chug sent the stock indexes up. The Dow, the S & P and the NASDAQ are the only signaling mechanisms that the legacy media pays attention to, and the politicos take their cues from them, in a feedback loop of false information that begets more delusional positive psychology in those same markets. I suspect the sentiment that reigns now is about nothing more than getting through the holiday season without a financial accident.
But this Fed now finds itself in a trap of its own making. Having so interminably yapped about the interest rate hike, the central bank will have to put up or shut up in December. Only the year-final BLS employment figures might give them an out, if the numbers don’t look so phosphorescent. I think the truth is, this phony baloney economy can’t withstand even a measly quarter-point benchmark interest rate hike. For one thing, it would blow up the operating models of Fannie Mae and Freddie Mac, the buyers of home mortgages who are keeping the construction industry on life support, as well as the parallel rackets in securitized auto and student loans. Imagine all the derivatives bets that would go south. In reality, the Fed knows that it will have to shovel more ZIRP money into the debt-saturated maw of a dying financial leviathan. It can do that, of course, and probably will in the coming winter of 2016, but when that time comes, it will have absolutely no credibility left. And the leviathan will be a little closer to heaving up dead on the beach.

[Lenno]

How About In Your Area? Islamic Association Buys Former Days Inn Motel In Asheboro, NC

Posted on November 9, 2015 | 7 Comments

“We just want to contribute to this community…”
Migrant relocation center?
Islam rising.
In FUSA.
In your town?
Just remember:

:ASHEBORO, N.C. — The former Days Inn motel in Asheboro has been bought by the Islamic Association of Central North Carolina.
The former motel changed ownership effective on Sept. 4, according to Randolph County tax records.
The association wants to convert the property into a Muslim school, an interfaith meeting space, and a food pantry and homeless shelter open to all, according to spokesperson Muhammad Elahi.
“We just want to contribute to this community,” Elahi told FOX8 in July.
The property at 901 Albemarle Road has a total appraised value of about $1.9 million, according to records.
Elahi previously told FOX8 that the motel’s cost was $600,000 and they had been raising funds to buy it.
Some in the community are concerned about the purchase, but Asheboro Mayor David Smith previously told FOX8 that, “It’s not our job to police who purchases properties.”
For 15 years, the Islamic group has owned a mosque on Brittain Street in Asheboro, which it plans to keep. Elahi said it currently serves about 200 people, but that number is growing.


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[Lenno]

Pipe Dreams Revisited
Readers- The cartoon and commentary below are from four years ago, showing just how long Obama has been stalling on the Keystone XL pipeline until finally killing it last week. He did so not because it would cause environmental harm (the State Department determined it wouldn't), and not because it wouldn't produce jobs (it would have produced plenty), but because he thought approving it would have made him look like less of a "leader" when he goes to Paris to conspire with the other anti-capitalists in the climate change club. What a schmendrick...



Only a few short weeks ago, a wee-wee'd up Barack Obama called a joint session of congress, told them that he had a plan for creating jobs, and demanded loudly (and repeatedly) that they "pass it now!"

Which is why it's more than a little jaw-dropping that this same president has taken a look at a plan to create thousands of new high-paying jobs which wouldn't cost taxpayers a penny...and decided to "pass on it now."

The Keystone XL project would build a pipeline to bring oil to the United States from lovable, maple-syrup distilling, beaver-pelt wearing Canada instead of sending our oil money to the "Death to America" lunatics in the Middle East... thereby giving us more of that "energy independence" that Mr. Obama usually can't shut up about, while creating jobs out the wazoo.

But despite the president's usual dedication to "the fierce urgency of now," he's decided to postpone a decision on the pipeline until after the next election...for fear of losing the votes of environmentalists who are terrified of long pipes for reasons only their Freudian psychoanalysts can understand.

And he's softened the blow by implying that Americans really wouldn't be up to the job of building the pipeline anyway...recently referring to us as soft, lazy, and lacking in the will and imagination to tackle "big jobs."

Unfortunately, Canada can't afford to wait to sell their oil...and so they're preparing to sell it to China instead. Which will be disastrous for the environment that Mr. Obama claims to be so concerned about...and probably disastrous for the United States since China is devoting a lot of their energy use these days to building up their military.

But the job of the president is to make tough decisions, and Obama has decided that his re-election is far more important than jobs, energy, or national security.

And unsurprisingly, he didn't find it a tough decision at all.

While controversial, the president's decision is not altogether unpopular.

Mike aka Proof said... When Barack Obama was running for re-elction, he flew to Cushing OK for a photo op to take credit for the portion of the Keystone XL pipeline he had basically no control over:
"Now, right now, a company called TransCanada has applied to build a new pipeline to speed more oil from Cushing to state-of-the-art refineries down on the Gulf Coast. And today, I'm directing my administration to cut through the red tape, break through the bureaucratic hurdles, and make this project a priority, to go ahead and get it done."
November 9, 2015 at 12:22 AM

[Lenno]

Crisis Progress Report (13): Time for the Crash, by Robert Gore

Posted on November 8, 2015 | 6 Comments

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From the last Crisis Progress Report, dated October 1: “Assume a rally like the one in 2008 is in the offing. If the 2008 rally’s timing is any guide, this one will start between now and New Year’s, but there are no assurances; it may begin next year.” SLL did not know then that the rally was already underway, the market having made its recent closing low on September 28. Now that the market has rallied, in the perverse way that markets work, Friday’s employment report, the best in some time, may well kick off the next down leg. October has had its share of market crashes, so with fear high at the beginning of the month, the market rallied and October was its best month in years. November and December are often strong, marked by end-of-the-year “Santa Claus” rallies. Again, in their perverse way, markets this year may leave a lump of high-sulfur-content, CO2-releasing, soon-to-be-outlawed coal in investors’ stockings.
This latest employment report will be revised multiple times; it is subject to a variety of abstruse statistical criticisms; it is seasonally and birth-death-model adjusted; it shows that almost all the jobs in October were taken by older workers, and finally, employment is, as any economist will tell you, a lagging indicator. Whatever the ambiguities in the employment report, there is no gainsaying that debt contraction is rolling through, and roiling, the global economy in textbook fashion. Global debt, central bank and government-force fed, approaches $225 trillion and has grown faster than global GDP for decades. It is the most massive in history, measured in either absolute terms or in relative terms against global GDP.
Debt is close to or at a high point that may not be exceeded for decades, but the underlying forces of contraction are in full flower. They first appeared in the most leveraged sector relative to its ability to repay: natural resources. China blew a debt-fueled bubble, and its economic “miracle” stoked investment in natural resources around the world. That investment binge was aided mightily by artificially low, central-bank suppressed interest rates. Once China’s bubble started to deflate, as all such bubbles must, investment that looked “opportunistic” on the way up has became malinvestment, with gluts in oil, iron ore, coal, aluminum, nickel, fertilizer, and a host of other raw materials.
Earlier this year, it was possible, if one was completely ignorant of debt dynamics, or “debtonomics” as SLL has christened them (see Debtonomics Archive), to argue that the raw materials situation would be contained. The same assurances were given in 2007 about the pending collapse of the housing and mortgage finance markets, and the present assurances will prove as spot off as those were. Natural resources are a far larger part of the global economy than the what proved to be earth-shaking US housing and mortgage finance market was in 2007. There are too many debt contraction ripples rippling out; the only way the contained argument can be made now is through willful ignorance. (SLL has been glutting its blog postings with stories on those ripples. Rather than clutter up this article with a multitude of links, readers who have missed those stories and are interested should scan through the blog over the last month.)
The glut of raw materials has led to a glut in raw materials transport. Tankers, bulk shipping vessels, and container ships are in oversupply and shipping rates have collapsed, in some cases to all time lows. China’s exports and imports are shrinking, as is overall global trade. The ripples are reaching US shores, where railroads are reporting shrinking volumes of not just natural resources, but chemicals, containers, and industrial products. The trucking industry is following suit; the US load-to-truck ratio just hit a 33-month low. Neither US railroads nor trucks are directly tied into China, but they are nevertheless being affected by reduced demand from China that is anything but “contained.”
Notice that the contraction has moved beyond raw materials. Cheap money and China’s supposedly perpetually expanding demand prompted fervid increases in Chinese and global industrial capacity, now overcapacity. Exhibit A is the steel industry, burdened with massive oversupply. Its raw material, iron ore, has gone from $154 per dry metric ton in February of 2013 to its current price below $50 per dry metric ton. It’s the same story with cement, finished aluminum and copper products, industrial machinery, tractors, and engines, to name a few. The segment of the global economy that makes things, especially the segment that makes things for other industrial users, is looking at gluts as devastating as those faced by producers of raw materials. Last month, Daniel Florness, the CEO of Fastenal, a US company that makes nuts, bolts, and other fasteners said, “The industrial environment is in a recession—I don’t care what anybody says, because nobody knows that market better than we do. You know, we touch 250,000 active customers a month.” (“‘Our Data Is Not Good’ – US Companies Warn That A Recession Is Coming,” by Tyler Durden, SLL, 10/26/15).
The fashionable refrain is that none of this will put the US in a recession because the US economy is based on services, not mining, manufacturing, and exports. The stock market has recovered most of its August and September losses, the housing market is holding up, and service sector statistics still show growth. This optimism is misplaced. The things-you-can-touch economy buys legal and financial services, communications, technology, insurance, consulting, office space, real estate, and advertising. The idea that significant cutbacks by America’s mining, manufacturing, transport, and distribution companies will have minimal impact on its service companies ignores the extensive commercial relationships between the two groups.
Layoffs have begun in mining, oil, and gas and will spread. The newly unemployed cut back on store trips, restaurants, entertainment, and other discretionary spending in the service economy. They may, heaven forbid, even cut back on their smart phone usage. Then we’ll know that things are really, really bad. About the only sector that may appear immune, at least for a while, is the government, but the relative health of this nonproductive—or more accurately, counterproductive—sector, will come, as it always does, at the expense of the rest of the economy.
One of the US’s world-beating service industries—the production, packaging, and distribution of debt—is already showing the strain. Fracking and mining companies are seeing their credit lines curtailed or eliminated, and bond financing unavailable or prohibitively priced. What started in the oil and gas corner of the bond market—widening credit spreads—has spread out to a general increase. The ultra-cheap interest rates that allowed companies to finance shareholder friendly dividends and buybacks are ratcheting up. Banks are cutting their commitments to both the investment grade and high-yield corporate bond markets. Constriction in credit markets often precedes significant stock market declines, but hey, things are different this time. Flinty creditors spend all their time looking at boring old balance sheets, revenues, expenses, and cash flows. Equity markets have hope and faith and central bank pixie dust!
They can ignore the writing on the wall, but not the wall. That would be the one into which the global economy is smashing. Pixie dust has probably taken US equity markets about as far as they’re going to go. A crash that begins before Christmas will surprise only those who still believe in Santa Claus.

[yatagan]

for fear of losing the votes of environmentalists who are terrified of long pipes for reasons only their Freudian psychoanalysts can understand.

[Lenno]

Insane: Hillary, O’Malley Would Bring In 65,000 Syrian Refugees, Despite FBI Director Saying They Cannot Adequately Check Them…
When asked about the problem of Syrian refugees and how they would each approach it, both Hillary Clinton and Martin O’Malley said even after the Islamic terrorist attack in Paris that they would welcome at least 65,000 Syrian refugees. “I was the first person on this stage to say that we should accept the 65,000 Syrian refugees that were fleeing the sort of murder of ISIL,” O’Malley said. “And I believe that that needs to be done with proper screening.”
Clinton agreed, “The administration originally said 10,000,” she said. But she wanted even more than Obama. “I said we should go to 65,000 but only if we have as careful a screening and vetting process as we can imagine, whatever resources it takes.”
Neither acknowledged that at least one of the Islamic terrorists in Paris was carrying a Syrian passport and came in the ‘refugee route’ through Greece. Nor have they acknowledged ISIS specific threat to smuggle people in with the ‘refugees’.
Neither acknowledged that the FBI Director, James Comey, has already said there is no way to adequately vette the refugees who are coming in. There are no records and as Europe shows, you have people buying Syrian passports to get in.
According to the Daily Caller:

FBI director James Comey said during a House Committee on Homeland Security hearing on in October that the federal government does not have the ability to conduct thorough background checks on all of the 10,000 Syrian refugees that the Obama administration says will be allowed to come to the U.S.
“We can only query against that which we have collected,” Comey said in response to a line of questioning from Mississippi Rep. Bennie Thompson .
“And so if someone has never made a ripple in the pond in Syria in a way that would get their identity or their interest reflected in our database, we can query our database until the cows come home, but there will be nothing show up because we have no record of them.”

Former FBI director James Kallstrom also reiterated this after the Paris attack, saying that the refugee policy was ‘crazy’ and that the FBI did not have enough manpower to watch the people that needed to be watched ‘by the thousands’. He asked, why would politicians want to put more weight in the packs of the FBI by bringing in people who could not be vetted.

[Lenno]

Remain Calm! White House: No Specific Or Credible Threat To The United States”
Threat is contained to Europe

[Lenno]

FBI: Motive In Chattanooga Recruiting Station Shooting May Never Be Released…
Global warming has not been excluded as a motive.
Via WSMV:

The public may never know what motivated a 24-year-old Chattanooga man to kill four Marines and a sailor in an attack on Chattanooga’s U.S. Naval and Marine Reserve Center last July.
Investigators have said Muhammad Youssef Abdulazeez was a homegrown violent extremist but have not offered more details about what motivated the attack that began at a military recruiting center and ended when Abdulazeez was shot to death by police who followed him to the reserve center.
“We’re still trying to make sure we understand Abdulazeez, his motivations and associations, in a really good way,” FBI Director James Comey told reporters during a visit to Nashville’s FBI field office on Friday.
Comey said he understands the public interest in the shooting, but he did not know whether there would ever be a public report on it.
“Sometimes the way we investigate requires us to keep information secret. That’s a good thing. We don’t want to smear people,” he said.
Keep reading…

HT: TAH

[graystone]

We never had a traitor like Obama in DC. NEVER. He's got plenty of time left to do kill the US. Taking down the USA is obviously his goal.

[merovingian]

We never had a traitor like Obama in DC. NEVER. He's got plenty of time left to do kill the US. Taking down the USA is obviously his goal.

Remember the quislings. Remember who enabled the quislings, as the day approaches.