Ruminations – 6feb16 (updated 9feb16)

George Rebane

Our ongoing theme on the nation’s economic stagnation – Depression2 - led by California is abetted by Linda Erdmann’s piece - ‘Fleeing the Golden State’ - in the 6feb16 Union print edition and a couple of cogent ZeroHedge links (here and here) sent by Russ Steele on the dissimulation that Team Obama and his progressives are spreading about the great state of the nation’s economy.  (See also the 9feb16 Sandbox.)

Catch & Release illegal aliens has been Obama administration’s reinstated sub-rosa policy of border control. The existence of this great National Lie was communicated to Congress in testimony by a Border Patrol executive that illustrates how every one of Obama’s cabinet secretaries promotes perfidy in covering up what their departments are really doing (more here).  HSA’s Jeh Johnson’s ongoing lies about our borders being more secure is based on the reported reduced number of arrests made of illegal entrants. However, the Border Patrol explained that they have been working under orders to release all illegals caught at the border who declare they have been in the country since 2014 and are not criminals – no further vetting of such claims are allowed, the individual is simply released on his own recognizance and told to appear at a future immigration hearing.  Hence arrests are down, no one shows up at their appointed hearing, and the borders remain open to all who remember the magic ‘Get out of Jail’ mantra.

'$100 Trillion Up in Smoke' trumpets the usually sensible financial pundit John Mauldin about the recent drop in the price of crude.  Such pronouncements join with headlines like 'Investors dump tech stocks'.  Nothing could be further from a more sober understanding of what's going on.  Markets price things at the margin - i.e. the money exchanged during the last buy/sell event.  Current market price never implies that you can buy nor will anyone sell the whole inventory at that figure.  For example, had you the money, you could not buy all of the world's above ground crude oil at the current $31.00 a barrel.  If you tried, the price would immediately sky rocket.  In the same hysterical vein investors did not dump tech stocks because the stocks were simply bought by other investors, not by potted plants nor were they flushed down the toilet by their previous.  It's best to pay attention and not get caught up in misleading one liners.

[update] More on Obama’s strangling our liberties and economy, and California’s secure place as America’s least free state in terms of personal liberties and business freedoms (more here).  McKee’s cartoon says it best.

[9feb16 update]  Bolshevik Bernie is cranking up his class warfare rhetoric which is easy to compare to the rhetoric heard on the streets of Moscow in 1917.  And it is lapped up enthusiastically by the new class of certifiably mindless millennials who have no idea what they will be voting for this year.  They might consider what socialismo has brought to Venezuela in their lifetime (with empty store shelves and citizens driven to destitution but kept in line by government guns).  Their little heads have been carefully kept empty in America's universities finds the National Association of Scholars after surveying the humanities reading requirements at 350 colleges (more here).  Also explains a lot about the political leanings of many high tech executives in Silicon Valley.

Comments

[Walt]

" Catch and release"? So.. The dept. of Fish and Game is now in charge of immigration.
The Boarder Patrol must be really at wits end having another gov. agency watching their every move. " Sorry,, you have gone over your limit, and three are too small. Those are Social service's to catch.. Cut them loose. Here is your ticket... See you in court, and have a nice day."

[Russ Steele]

Citi: World economy trapped in 'death spiral'

The economy is trapped in a 'death spiral' that could lead to further weakness in oil prices, recession and a bear market, Citi strategists have warned.

http://www.msn.com/en-us/money/markets/citi-world-economy-trapped-in-death-spiral/ar-BBpaGNy?li=BBnb7Kv&ocid=ansmsnmoney11

Obama seems to unaware there is a problem, he will have to read about it in the newspapers after the crash and burn at the end of the death spiral.

[Russ Steele]

California export trade’s winning streak snapped in 2015 -- The value of California merchandise exports fell 5 percent in 2015, the first annual decline since 2009. Mark Glover in the Sacramento Bee$ -- 2/5/16

[Russ Steele]

After years and years of toiling in the institutions of learning the progressives are beginning to see the benefits of their indoctrination. Koel Kotkin, who spoke last year at the ERC Summit on how to attract Millennials to Nevada County has some insight on what we could be attracting.

Joel Kotkin: Millennials heed the siren call of socialism.

The biggest story this election season is not Donald Trump or the fortunes of the two winners in Iowa, the unattractive tag team of Ted Cruz and Hillary Clinton. For all their attempts to seem current and contemporary, these candidates – and Trump as well – represent older, more established elements in American life, such as evangelicals, nativists and, in Hillary’s case, the ranks of middle-age women, seniors and public-sector unions.

The biggest and most important development has been the massive support among the new generation of voters for Vermont Sen. Bernie Sanders and his open embrace of socialism. In Iowa’s Democratic caucuses, which ended with Clinton and Sanders in a virtual tie, young people opted for Sanders at an almost inconceivable rate of 84-14. In 2008, Barack Obama won this segment, claiming only a 57 percent majority.

So we are seeing the embrace of an openly socialist septuagenarian by a generation that, within a decade, will dominate our electorate and outnumber baby boomers as soon as 2020. That should put more conventional politicians, and business, on notice. Whether you are a Republican, a free-marketer or, even a Democratic-leaning crony capitalist, be afraid – be very afraid.

For the first time since labor leader and presidential candidate Eugene Debs in the early 20th century, Americans are flocking in big numbers to a politician who rejects the efficacy of capitalism and seeks to create a new, notionally fairer, system. Now, as then, the reason to support socialist ideas – some of which were implemented during the New Deal – lies with the palpable failures of capitalism. Polls of millennials show consistently that economic issues, such as jobs and college debt, are their dominant concerns.

Yea, that is what the local economy needs, more socialists.

[Russ Steele]

Mrs. Clinton’s Ode to Serfdom:

Mrs. Clinton, quotes Herself telling an audience in New Hampshire: “Service is the rent we pay for living in this great country.”

Kevin Williamson:

There is a very old English word for people who are required to perform service as a rent for their existence, and that word is serf. Serfdom is a form of bondage. Americans are not serfs. We are not sharecroppers on Herself’s farm or in vassalage to that smear of thieving nincompoopery in Washington that purports to rule us. We don’t owe you any damned rent.

The American model is precisely the opposite of what Mrs Clinton imagines: Government has to justify itself to us. . . . They owe us service -- services they routinely fail to perform.

[George Boardman]

Given Steele's pessimism about the country in general and the economy in particular, I recommend he convert all of his assets into gold coins and bullion. I assume he has enough guns and ammo to protect his stash in case Hillary or Bernie is elected president.

[George Rebane]

GeorgeB 120pm - As a fellow traveler of Russ Steele, I wonder which of his sentiments or arguments you find most grating, or at least off base.

BTW Mr Boardman, excellent piece in today's Union. Thank you.

[George Boardman]

Re Dr. R's 1:59:

Three of Steele's most recent posts paint a rather gloomy picture: World economy trapped in 'death spiral'; California export trade's winning streak snapped in 2015; Millennials head the siren call of socialism.

As somebody who has been a regular investor in the stock market for almost 50 years, I have learned that things are rarely as good or bad as economists--purveyors of the dismal science--say they are.

Economists are fairly good at explaining what happened, but are poor at predicting what will happen. As Peter Lynch observed several years ago, if economists were any good, they'd all be retired and living on yachts in the Bahamas.

As for the future of this country, I'm more optimistic than most the commentators on this blog.

[Todd Juvinall]

When yu have had to deal with the government on property rights or a building permit, one gets a close up view of what the problems are in our country. Some of us tried to fix things, but most sit on the sidelines and complain and do nothing. But even all that has not dampened my desire to see this country succeed. So I guess Boardman can check me off on the optimistic side. LOL!

[Walt]

OK Boardman,, if you so great at investing, how much did you make today? I bailed a few months ago, and save thousands in losses. One account I have that I left alone as lost over 1/3 of it's value.
The market is more volatile than gasoline. Only today has gold made any kind of move.(missed out on that one.)

I doubt the market is done with it's free fall. All the damage from the FED's messing with Wall St. all this years. ( That would be QE 1 though 5? 6?)
The withdrawals from that "free money" addiction have yet to end. Not to mention zero interest. How the market squealed at the first slight hike in interest. It's been all downhill from there.

[Bill Tozer]

Gold is for hoarding......lawn rakes and shovels are for zombies. In case of emergency, use both.