With US military units operating in West Africa the Pentagon’s Transportation Command recently ordered Ebola Isolation Units. With over 4,000 troops deployed it is best to be ready. With only a short time to train troops could easily make a mistake in an Ebola virus zone.
If highly trained doctors and nurses come down with Ebola the ordering of isolation units by the Pentagon seems like a good move. Just in case.
TransCom Rushes Buy Of Ebola Isolation Units; 60 Days From Idea To Test
WASHINGTON: The Pentagon’s Transportation Command — the folks who move most everything for the military from Point A to Point B — are testing a new isolation unit to fit in a C-17 or C-130 aircraft, just 60 days after issuing the requirement.
The head of TransCom, Gen. Paul Selva, told reporters this morning at a Defense Writers Group breakfast that the command realized it needed the units in case anyone in the military was exposed to or came down with Ebola and needed evacuation. Obviously, these units can be used for everything from tuberculosis to the Marburg virus (a relative of Ebola’s) but they were built in response to the Ebola crisis afflicting West Africa.
Selva issued a Joint Urgent Operational Need (known as a JUON) for the units, 12 of which are planned. So far, the one company that built the larger system now being used by the State Department on contract, a firm with the unlikely name of Production Products of St. Louis, has been working on the system. The photo above shows the single unit, which is larger than the new units and can handle only one patient at a time.
The systems are standardized for us with pallets so they can easily be moved and secured on aircraft.
Interestingly, Selva said TransCom worked with the Defense Threat Reduction Agency, which handles biological warfare issues, and the Department of Health and Human Services as it developed the requirements.
“We have the capacity to isolate a single person and that capacity was designed exclusively to handle a SARS patient,” the general said. Believe it or not, the entire US military only had one unit capable of something similar, but it was designed to carry one person suffering from Severe Acute Respiratory Syndromes (SARS).
The new units can carry two patients on a stretcher and four in chairs. They can be linked to allow access for a care giver — properly suited and otherwise protected, of course.
Will Japan be destroyed by volcanic eruptions? What would happen around the world if the third largest economy in the world is put out of business due to the deaths of millions and a nation covered by volcanic ash? How would the world adjust to a devastated Japan?
Should massive eruptions occur, they could literally destroy the nation of 127,000,000 people and bring severe threats to the rest of the world. Japan is home to 57 nuclear power plants.
Think of the Fukushima disaster times 57. There would be world-wide consequences.Sound like a plot for a grade B movie? Unfortunately, the threat is real. A disaster may happen tomorrow or a hundred years from now. Scientists believe with the current level of activity, it is a matter of when, not if.
Japan | Magma Eruption Underway: Mt. Aso Volcano in Kyushu [biggest eruption in 22 years]
Mount Aso is the largest active volcano in Japan. It is among the five largest in the world. Mount Aso stands in the Aso Kuju National Park in Kumamoto Prefecture, on the island of Kyushu.
The eruption is Aso’s first in 19 years and comes only two months after Mount Ontake in Nagano killed more than 60 hikers when it erupted without warning. Last month, experts warned that a disaster on Kyushu island, which has been struck by seven massive eruptions over the past 120,000 years, could see an area that is home to 7 million people buried by molten rock in only two hours. If several volcanos erupt at the same the nation would be covered with ash. Air travel would cease. Live would be difficult.
Should widespread eruptions occur, it would be the blackest of Black Swans one could imagine, with terrible worldwide consequences.
CBC’s “The Passionate Eye” presents The Putin System – a point-of-view documentary that presents an ominous view of what Putin is willing to do to make sure Russia regains its place on the world stage. Make no mistake. Putin is a strong,clever,tough leader who has many friends in the world.
America and other Western nations’ efforts to vilify and isolate Putin and Russia will not work. Western sanctions have largely backfired and hurt the West as much as Putin and Russia. Putin has become closer to China, Iran, Brazil, Turkey (a NATO member) and India. He is hardly isolated and enjoys a worldwide standing far above President Obama.
One of Putin’s long term goals is to replace the Petrodollar as the world’s reserve currency. The reserve status of the US Dollar gives Ameica a tremendous advantage in world trade. Putin plans to carry out trade in currencies other than the Dollar. Sanctions have pushed Putin to accelerate these efforts.
Russia recently announced a series of large deals that will bypass the dollar and be carried out in local currencies. The largest of the deals is a $400 Billion pipeline that will connect the world’s largest supplier of gas and oil (Russia) to the world’s largest consumer (China). It is doubtful if this deal would be made at this time without Western sanctions pushing up the timetable.
The Putin System chronicles the remarkable life of Putin, a tough, young leader who is not afraid to make harsh decisions and holds a not so secret purpose. He plans to restore the old Russia of his dreams to what he believes is its rightful place in the world. Putin has long understood nations that control the world’s supply of energy sources will dominate world affairs. Control energy and you have power.
The Putin System is directed by Jean-Michel Carré in association with Jill Emery for the French production company Les Films Grain De Sable. It’s a video well worth watching.
The fall in oil prices has winners and losers. The drastic reduction in gasoline prices will be like a raise for most consumers. Airlines will benefit as jet fuel cost drop. Jet fuel is airlines greatest operating expense.
It is nations that depend on oil sales to fund the major part of their budgets that will hurt the most. Nations such as Iran, Iraq, Nigeria, Venezuela, Algeria, Angola, even Saudi Arabia, will likely be forced to cut back on benefits to citizens and social programs. This will cause widespread unrest in a world already on fire with many hot spots.
If prices reach $40 a barrel the US fracking industry will see weaker companies going broke. American oil production will suffer. The next few months will become a nightmare for companies in the oil service industry. Deflationary pressures will become intense.
Oil at $40 Possible as Market Transforms Caracas to Iran
By Gregory Viscusi, Tara Patel and Simon Kennedy Nov 30, 2014
Oil’s declineis proving to be the worst since the collapse of the financial system in 2008 and threatening to have the same global impact of falling prices three decades ago that led to the Mexican debt crisis and the end of the Soviet Union.
Russia, the world’s largest producer, can no longer rely on the same oil revenues to rescue an economy suffering from European and U.S. sanctions. Iran, also reeling from similar sanctions, will need to reduce subsidies that have partly insulated its growing population. Nigeria, fighting an Islamic insurgency, and Venezuela, crippled by failing political and economic policies, also rank among the biggest losers from the decision by the Organization of Petroleum Exporting Countries last week to let the force of the market determine what some experts say will be the first free-fall in decades.
“This is a big shock in Caracas, it’s a shock in Tehran, it’s a shock in Abuja,” Daniel Yergin, vice chairman of Englewood, Colorado-based consultant IHS Inc. andauthor of a Pulitzer Prize-winning history of oil, told Bloomberg Radio. “There’s a change in psychology. There’s going to be a higher degree of uncertainty.”
A world already unsettled by Russian-inspired insurrection in Ukraine to the onslaught of Islamic State in the Middle East is about be roiled further as crude prices plunge. Global energy markets have been upended by an unprecedented North American oil boom brought on by hydraulic fracturing, the process of blasting shale rocks to release oil and gas.
Few expected the extent or speed of the U.S. oil resurgence. As wildcatters unlocked new energy supplies, some oil exporters abroad failed to invest in diversifying their economies. Coddled by years of $100 crude, governments instead spent that windfall subsidizing everything from 5 cents-per-gallon gasoline to cheap housing that kept a growing population of underemployed citizens content.
Those handouts are now at risk.
“If the governments aren’t able to spend to keep the kids off the streets they will go back to the streets, and we could start to see political disruption and upheaval,” said Paul Stevens, distinguished fellow for energy, environment and resources at Chatham House in London, a U.K. policy group. “The majority of members of OPEC need well over $100 a barrel to balance their budgets. If they start cutting expenditure, this is likely to cause problems.”
Costs as Benchmark
Oil has dropped 37 percent this year and, in theory, production can continue to flow until prices fall below the day-to-day costs at existing wells. Stevens said some U.S. shale producers may break even at $40 a barrel or less. The International Energy Agency estimates most drilling in the Bakken formation — the shale producers that OPEC seeks to drive out of business — return cash at $42 a barrel.
“Right now we’re seeing a price shock coming out of the meeting and it will be a couple of weeks until we see where the price really falls,” said Yergin. Officials “have to figure out where the new price range is, and that’s the drama that’s going to play out in the weeks ahead.”
Brent crude finished last week around $70, and New York oil near $66. Brent is now at its lowest since the financial crisis — when it bottomed around $36.
Not All Suffer
To be sure, not all oil producers are suffering. The International Monetary Fund in October assessed the oil price different governments needed to balance their budgets. At one end were Kuwait, Qatar and the United Arab Emirates, which can break even with oil at about $70 a barrel. At the other extreme: Iran needs $136, and Venezuela and Nigeria $120. Russia can manage at $101 a barrel, the IMF said.
“Saudi Arabia, U.A.E. and Qatar can live with relatively lower oil prices for a while, but this isn’t the case for Iran, Iraq, Nigeria, Venezuela, Algeria and Angola,” said Marie-Claire Aoun, director of the energy center at the French Institute for International Relations in Paris. “Strong demographic pressure is feeding their energy and budgetary requirements. The price of crude is paramount for their economies because they have failed to diversify.”
Brent crude is poised for the biggest annual decline since 2008 after OPEC last week rejected calls for production cuts that would address a global glut.
Like this year’s decline, oil’s crash in the 1980s was brought on by a Saudi-led decision to defend its market share, sending crude to about $12 a barrel.
“Russia in particular seems vulnerable,” said Allan von Mehren, chief analyst at Danske Banke A/S in Copenhagen. “A big decline in the oil price in 1997-98 was one factor causing pressure that eventually led to Russian default in August 1998.”
VTB Group, Russia’s second-largest bank, OAO Gazprombank, its third-largest lender, and Russian Agricultural Bank are already seeking government aid to replenish capital after sanctions cut them off from international financial markets. Now with sputtering economic growth, they also face a rise in bad loans.
Oil and gas provide 68 percent of Russia’s exports and 50 percent of its federal budget. Russia has already lost almost $90 billion of its currency reserves this year, equal to 4.5 percent of its economy, as it tried to prevent the ruble from tumbling after Western countries imposed sanctions to punish Russian meddling in Ukraine. The ruble is down 31 percent against the dollar since June.
This Will Pass
While the country’s economy minister and some oil executives have warned of tough times ahead, President Vladimir Putin is sanguine, suggesting falling oil won’t force him to meet Western demands that he curb his country’s interference in Ukraine.
“Winter is coming and I am sure the market will come into balance again in the first quarter or toward the middle of next year,” he said Nov. 28 in Sochi.
Even before the price tumble, Iran’s oil exports were already crumbling because of sanctions imposed over its nuclear program. Production is at a 20-year low, exports have fallen by half since early 2012 to 1 million barrels a day, and the rial has plummeted 80 percent on the black market, says the IMF.
Lower oil may increase the pain on Iran’s population, though it may be insufficient to push its leaders to accept an end to the nuclear program, which they insist is peaceful.
“The oil price decline is not a game changer for Iran,” said Suzanne Maloney, senior fellow at the Brookings Institution, a Washington-based research organization, who specializes on Iran. “The Iranians were already losing so many billions of dollars because of the sanctions that the oil price decline is just icing on the cake.”
While oil’s decline wrenches oil-rich nations that squandered the profits from recent high prices, the world economy overall may benefit. The Organization for Economic Cooperation and Development estimates a $20 drop in price adds 0.4 percentage point to growth of its members after two years. By knocking down inflation by 0.5 point over the same period, cheaper oil could also persuade central banks to either keep interest rates low or even add stimulus.
Energy accounts for 10 percent to 12 percent of consumer spending in European countries such as France and Germany, HSBC Holdings Plc said.
As developed oil-importing nations benefit, some of the world’s poorest suffer. Nigeria’s authorities, which rely on oil for 75 percent of government revenue, have tightened monetary policy, devalued the naira and plan to cut public spending by 6 percent next year. Oil and gas account for 35 percent of Nigeria’s economic output and 90 percent of its exports, according to OPEC.
“The current drop in oil prices poses stark challenges for Nigeria’s external and fiscal accounts and puts heavy pressure on the exchange rate,” Oliver Masetti, an economist at Deutsche Bank AG, said in a report this month. “If oil prices remain at their current lows, Nigeria will face tough choices.”
Even before oil’s rout, Venezuela was teetering.
The nation is running a budget deficit of 16 percent of gross domestic product, partly because much of its declining oil production is sold domestically at subsidized prices. Oil is 95 percent of exports and 25 percent of GDP, OPEC says.
“Venezuela already qualifies for fiscal chaos,” Yergin said.
The country was paralyzed by deadly riots earlier this year after police repressed protests about spiraling inflation, shortages of consumer goods and worsening crime.
“The dire state of the economy is likely to trigger renewed social unrest, while it seems that the government is running out of hard currency,” Capital Economics, a London research firm, wrote in a Nov. 28 report.
Declining oil may force the government to take steps to avoid a default including devaluing the currency, cutting imports, raising domestic energy prices and cutting subsidies shipments to poorer countries in the region, according to Francisco Rodriguez, an economist at Bank of America Merrill Lynch.
“Though all these entail difficult choices, default is not an appealing alternative,” he said. “Were Venezuela to default, bondholders would almost surely move to attach the country’s refineries and oil shipments abroad.”
In an address on state television Nov. 28, President Nicolas Maduro said Venezuela would maintain social spending while pledging to form a commission to identify unnecessary spending to cut. He also said he was sending the economy minister to China to discuss development projects.
Mexico shows how an oil nation can build new industries and avoid relying on one commodity. Falling crude demand and prices in the early 1980s helped send the nation into a debt crisis.
Oil’s share of Mexico’s exports fell to 13 percent in 2013 from 38 percent in 1990, even as total exports more than quadrupled. Electronics and cars now account for a greater share of the country’s shipments. Though oil still accounts for 32 percent of government revenue, the Mexican government has based its 2015 budget on an average price of $79 a barrel.
Over the past few weeks the spread of the Ebola virus has stopped being front page news in US mainstream media. That doesn’t mean the threat is over. The following story indicates to control the disease, there is still much to be done in West Africa.
Ebola Rages in Sierra Leone as UN Misses Goals for Curbing Cases
By Simeon Bennett and Makiko Kitamura Nov 30, 2014
The United Nations has probably missed targets it set for curbing West Africa’s Ebola epidemic, as new infections surge in Sierra Leone.
Only 23 percent of cases are being isolated in Liberia, and 40 percent in Sierra Leone, short of a goal set in October to isolate seven-in-ten cases by tomorrow. Neither country has enough burial teams to achieve a target of safely burying 70 percent of Ebola-related deaths, according to the World Health Organization. Still, unreliable data make it difficult to know conclusively whether the goals have been met, the Geneva-based WHO said.
While new infections are declining in Liberia and stable in Guinea, they’re rising in Sierra Leone, particularly in the country’s north and west, including the capital Freetown, according to the WHO. Burial rites in which mourners touch the corpse of a dead person are continuing to contribute to the spread of Ebola in Sierra Leone, Alpha Kanu, the nation’s information minister, said in a Nov. 27 briefing.
“Getting your people who for centuries have been steeped in those cultural practices to abandon those practices overnight is one of the challenges we have been facing,” Kanu said. “The culture of continuing with traditional practices is still very much a challenge. It’s a very touchy-feely African culture.”
The outbreak began on Dec. 6 last year in the remote Guinean village of Meliandou, where a two-year-old boy, Emile Ouamouno died. It’s since raced through Guinea, Sierra Leone and Liberia, infecting 16,000 people and killing 5,689, making it the worst Ebola outbreak on record. Cases have also been reported in Mali, Nigeria, Senegal, the U.S. and Spain.
The epidemic may wipe as much as $33 billion from the region’s economy in a worst-case scenario, according to the World Bank, which is mobilizing $1 billion for the response.
More than 1,300 people have been infected in Sierra Leone in the past three weeks, and the country’s total number of infections will soon eclipse those in Liberia, the worst-affected country, according to the WHO.
Doctors Without Borders is building a new treatment center in Freetown that will open within the next 2 weeks, according to Francien Huizing, a spokeswoman for the medical charity in the Sierra Leonean capital.
In Liberia, only 67 cases were reported in the week to Nov. 23, and the northern district of Lofa has reported no cases for four weeks, the WHO said. Successful community outreach programs to educate people at risk and get them to adopt new burial practices have helped to curb infections in Liberia, said Dorian Job, deputy emergency program manager for Doctors Without Borders in Geneva.
The charity’s 240-bed ELWA3 treatment center in Monrovia only had 23 patients as of Nov. 17. Still, in some areas community outreach teams still lack fuel for their cars, preventing them from getting to remote communities, Job said.
“In general, Liberia is better supplied and has more resources than other countries,” he said. “What is important is that we don’t relax the effort. It’s not over.”
Most everyone who follows the markets realizes we are coming to the end game. The printing of fiat money to pay interest on sovereign debt is unsustainable. No one knows when, but it is a matter of time until the public will reject fiat currencies. Chaos is sure to follow. The end of Western monetary dominance is fast approaching. A wave of sovereign defaults will make sure of it. The Federal Reserve Bank cartel will lose control of the fiat American Dollar.
This Sunday may mark the end of Western monetary dominance
November 28, 2014
by Simon Black
Writing from Santiago, Chile
Walking down the streets of Constantinople in the early Middle Ages, you would have immediately felt the energy and prosperity all around you.
Constantinople was one of the wealthiest, most advanced cities in the world, and some historians estimate its population could have been as high as 500,000 people.
Byzantine architecture in Constantinople was world famous, and local artists were producing mosaics that are still regarded as some of the finest ever made.
At this point in history, wealth and power in the world was clearly concentrated in the East.
Europe was nothing more than a plague-infested backwater. Constantinople flourished. And even further to the east, China was sporting some of the most advanced technology in the world.
But times changed.
By the 13th century, the Byzantine Empire was in clear decline. Its borders were shrinking and the empire was at the center of almost constant warfare.
And more importantly, they had begun to debase their currency. Again.
For centuries, the Byzantine gold solidus had acted as sort of de-facto international reserve currency. It contained roughly 4.5 grams of pure gold and was used in trade and commerce around the world for nearly seven centuries.
(Modern archaeologists have unearthed medieval gold solidus coins as far east as Inner Mongolia!)
Problem is– war is terribly expensive. And they paid for it by debasing by their currency. By the 11th century, the gold content in the solidus had been debased to the point that it was no longer worth anything.
So they gave it another try. Fool me once. Shame on you.
The successor to the solidus was called the hyperon; it was initially struck at 20.5 carats of gold (roughly 85% purity). But this was quickly reduced to 18 carats, then 15, then 12.
Fool me twice. Shame on me.
Enough was enough, and the rising powers in Europe demanded an alternative.
It was the Italians (the most advanced power in Europe at the time) who solved the problem.
Florence, Genoa, and Venice were all minting their own gold coins by the 13th century, and the 3.5g Florentine florin soon became the new international reserve standard used across Europe.
In many ways, this marks the beginning of the West’s rise to dominance: it all started with declaring their monetary independence from a declining power and a currency they could no longer trust.
Fast forward several centuries and we can see that the tables have clearly turned.
The West has been the dominant superpower for centuries. Yet like the Byzantines before, the West is in obvious decline.
At this point insurmountable debts and deficits plague nearly all Western governments. And they make up the difference by debasing their currencies.
This has created massive distrust, especially in the world’s most dominant reserve currency today, the US dollar.
Like the Venetians and Florentines before them, rising powers in Asia are starting to take matters into their own hands.
The Chinese renminbi (though surely not a one-way bet) is rising in international prominence. And China is at the center of a new emerging global financial system being set up in partnership with Russia, India, Brazil, etc.
Western dominance was born from a distrust in the dominant reserve currency at the time. Its decline will be because they followed the same route.
And the canary in the coalmine is what’s happening in Switzerland this weekend.
On Sunday, the people of Switzerland are going to the polls to vote on a return to the gold standard.
It was only 14 years ago that the Swiss franc, traditionally seen as a safe haven currency due to Switzerland’s reputation for stability, was still on a gold standard.
In fact, of all the major currencies, the Swiss franc was the last to abandon prudent monetary standards.
Ever since then, the Swiss National Bank’s balance sheet has absolutely exploded.
Now there’s a national election to return to a gold standard and conservative monetary policy.
Right now the polls suggest that the Swiss are leaning towards ‘NO’, i.e. they want to continue to abandon prudent practices and hand over total control of the money supply to unelected central bankers.
And if the country that has the world’s strongest traditions for financial stability chooses to turn its back on sound money, what hope is there for the rest of the West?
If the Swiss vote NO this weekend, I view that as a major watershed moment in signaling the beginning of the end of Western monetary dominance.
We can already see the signs everywhere.
Across Europe, government bond yields are NEGATIVE, i.e. you have to PAY these bankrupt governments for the privilege of loaning them money.
And as IMF director Christine Lagarde said last week that a diet of high debt, low growth and high unemployment may yet become “the new normal in Europe”.
Each of these data points signals an obvious long-term trend. We can see where this is going.
But here’s the good news: none of this need affect you. The power is in your hands.
Even if the Swiss divorce themselves from prudent policy, and even if your government refuses to maintain sound money, you still have options.
You can choose to maintain a portion of your savings at a well-capitalized bank abroad in stronger currencies.
You can choose to hold some physical precious metals (or even cryptocurrency) overseas at a secure location where it can’t be confiscated by a bankrupt government.
You can choose to own productive assets abroad or collectibles that cannot be conjured out of thin air by central bankers.
All of these tools and resources already exist today. And for now, they’re available for anyone to take advantage of.
The West, lead by lightweight Obama, is making a huge mistake in picking a fight with Russia. Sanctions will hurt the West as much as Russia. Perhaps hurt the West even more if Russia decides to respond where it could really hurt.
For example, the US generates about 20% of its electricity with nuclear power plants. And where does most of the fuel come from that power those plants? You guessed it, from Russia. Russia, under Putin, is a major player on the world stage. The sooner the US recognizes that fact the better. A man like Putin will not be intimidated by sanctions.
The US needs to listen to Henry Kissinger. He knows the realpolitics game. Obama and team are dangerous amateurs.
Kissinger: Ukraine should forget about Crimea and NATO membership
Former U.S. Secretary of State Henry Kissinger spoke about global threats, the secession of Crimea and Ukraine’s NATO accession.
Mr. Kissinger said that there currently is an urgent need for a new world order, but its coming into being will be long and complicated. “There are no universally accepted rules,” said Mr. Kissinger in an interview with the German magazine Der Spiegel. “There is the Chinese view, the Islamic view, the Western view and, to some extent, the Russian view. And they really are not always compatible.”
Speaking of Crimea’s accession to Russia, he noted that this is a special case, as Ukraine and Russia were one country for a long time. In his view, the West must recognize its mistakes. “Europe and America did not understand the impact of these events, starting with the negotiations about Ukraine’s economic relations with the European Union and culminating in the demonstrations in Kiev,” said Mr. Kissinger. “All these, and their impact, should have been the subject of a dialogue with Russia.”
He is sure that Ukraine has always had a special significance for Russia. Failure to understand this was fatal, and the Ukrainian authorities can forget about the Crimean peninsula. “Nobody in the West has offered a concrete program to restore Crimea,” said Mr. Kissinger. “Nobody is willing to fight over eastern Ukraine.” In his opinion, introducing anti-Russian sanctions was a mistake.
“We have to remember that Russia is an important part of the international system, and therefore useful in solving all sorts of other crises, for example in the agreement on nuclear proliferation with Iran or over Syria,” Mr. Kissinger said. “This has to have preference over a tactical escalation in a specific case.” He added that Ukraine should not hope to become a member of NATO in the foreseeable future, as the alliance will never vote unanimously for the accession of Ukraine.
As a former President Obama supporter it has been painful to witness the ineptitude of the Obama administration. It’s not only incompetence, but arrogance and narcissism are off the charts. Americans were not fooled by the flood of manipulating data that preceded the election. The election results showed how angry many Americans are at the Obama reign of executive signings, broken promises, and terror against those who dare to speak the truth. Now what? Will Obama came to terms with his repudiation and work with the Republicans, or we in for another two years of total gridlock while the rich get richer while everyone else suffers?
The Economy Is So “Strong” It Just Cost Obama The Senate
Based on the ridiculous, seasonally-adjusted data released day after day by the various US “Departments of Truth”, also known as the BLS, the Census, the Dept of Commerce, UMichigan, ADP, the Conference Board and so on, the US economy is so strong and consumer confidence is so resurgent, America is on the verge of a second golden age. Sadly, for Obama, and last night’s epic rout for Democrats, it was all a lie – a lie perpetuated by a manipulated S&P500 which now hits daily record highs on unprecedented central bank liquidity injections which have now terminally disconnected the “markets” from the economy, and the welfare of the vast majority of the common “folk” – and said “folk” saw right through it.
Bloomberg’s take is just one of many observations on the historic cognitive dissonance that is plaguing the mainstream media this morning, which has been furiously pumping up US confidence by pitching the endless array of “fake data” (to use Paul Singer’s words), only to see it all blow up in its face today.
The economy was voters’ most pressing concern as they cast their ballots in the midterm election, with seven of 10 rating conditions poor, preliminary exit polls showed.
More than five years after the recession ended, ordinary Americans still feel pinched. Wages and incomes haven’t recovered even as corporate profits hit records, stocks have almost tripled and the nation’s output of goods and services grew more than $1 trillion from its pre-recession peak.
Obama’s Democratic allies took the hit, with Republicans gaining a majority in the Senate for the first time during his presidency and adding seats in the House, which they have controlled for four years. Yet Republicans could hardly claim a mandate from yesterday’s results, and they’ll be judged on their ability to govern.
Irony #1: Bloomberg, which has been one of the many outlets spinning the “great recovery” is confused:
The discontent simmered even as the economy showed signs of strengthening in the run-up to the election, posting its strongest six months of growth in more than a decade. Gross domestic product expanded at a 3.5 percent annualized rate in the three months that ended in September after a 4.6 percent gain in the second quarter, the best back-to-back showing since 2003.
Maybe, just maybe, the economy never really strengthened, and it was all even more of the same propaganda that has ordinary Americans finally seeing through the lies. Bloomberg at least admits that much: “Most Americans haven’t shared in the gains. Adjusted for inflation, the July median household income of $54,045 was $2,600 lower than in December 2007…. Voters by 65-31 percent said the country is on the wrong track. That’s 12 points more negative than two years ago and was the second-gloomiest exit-poll reading since 1990, trailing only the 2008 election, the preliminary numbers showed. Half of voters expect life to be worse for the next generation.”
Irony #2: even as America is increasingly seeing through the left-right lies, and realizes that the GOP has no magic bullet to fix the economy, the vote last night was not for Republicans as much as against a broken status quo.
Senator Bob Corker, a Tennessee Republican, attributed his party’s gains to “disappointment and disillusionment with the administration.” He added, “I don’t think on the other end it’s a major endorsement of the Republican Party, either.”
Fifty-eight percent of voters said they were dissatisfied or angry at the White House, according to the preliminary exit polls; 59 percent said the same about Republican congressional leaders.
Irony #3: nothing will change:
Senator Ted Cruz, a Tea Party-backed Texas Republican, said this week that his colleagues must fight Obama at every turn. His priority, he told the Washington Post, is “looking at the abuse of power, the executive abuse, the regulatory abuse, the lawlessness that sadly has pervaded this administration.”
Cruz also wants to line up votes to dismantle Obama’s health-care law, a mission that would require improbable two-thirds majorities in both chambers to overcome presidential vetoes.
Some Republican leaders also say an all-out confrontation with Democrats is a one-way ticket back to the minority. Already, there are a few issues, most notably the Trans-Pacific Partnership trade deal, where both sides say there is opportunity for Obama to come together with Republicans.
The problem is that Obama, increasingly focused only on the golf course, will have none of it.
Frustrated with gridlock in Congress, Obama declared earlier this year that he would use his executive power to circumvent lawmakers on climate change and the minimum wage paid to federal contractors, as well as on immigration. That didn’t help his party yesterday and some, including Vice President Joe Biden, have signaled a willingness to compromise with Republicans.
The irony does not stop there, because the biggest beneficiary of the Obama administration and the split Congress so far has been the 1%, by way of the S&P 500 rising relentlessly in the fact of bad or good news. That rise continued overnight.
U.S. equity-index futures rose, the dollar strengthened and precious metals fell. Standard & Poor’s 500 Index futures advanced 0.4 percent at 10:03 a.m. in London, signaling the gauge will approach a record. The Bloomberg Dollar Spot Index climbed to its highest level since April 2009. The Stoxx Europe 600 Index jumped 1 percent.
Well, the economy may not get better but at least the rich will get a little richer as the charade continues.
But even a world full of ironies needs some humor, and it got it with this WSJ story, “GOP Senate Takeover Puts Fed on Hot Seat”:
Republicans’ takeover of the U.S. Senate promises increased political turbulence for the Federal Reserve, which has already been under pressure from a GOP-controlled House.
Financial executives say a GOP-led Senate would ratchet up congressional scrutiny of the central bank’s interest-rate policies, as well as its regulatory duties as overseer of the nation’s largest financial firms. Republicans haven’t controlled the Senate since before the 2008 financial crisis and recession, which put a spotlight on the Fed and its powers.
“If the Republicans take control of the Senate and thus have control of both the House and the Senate—two words for the Federal Reserve: Watch out,” Camden Fine, president of the Independent Community Bankers of America, said before the Election Day results were final. His group represents the community-banking industry.
While we enjoy the humor that someone will dare to touch the goose that lays the golden market, we wish to make a small correction: it’s not two words. It’s three: “get to work.” Because after a few days, when the excitement and the drama wears off, the people will once again realize they have been fooled, the only winners are Wall Street, the wealthy and their political marionettes in D.C. As for everyone else, well there is 2016, and then 2018, and so on… because the lie must go on.