NEIL HOWE: OBAMA WILL WIN

Neil Howe details why Obama will win. Essentially, Romney is a clueless candidate.

2012 Election Update: Romney in Retreat

Regrettably, I’ve been away from this blog too long—the result of too much travelling and a bit too much work. I’m hoping for an easier fall and winter.

Seven weeks have passed since I looked at the generational dynamics behind the Obama-Romney contest, when the overall balance seemed fairly even. Now, it’s tipping clearly if not decisively for Obama. RCP currently shows a 3.3 percent national margin for Obama, but this probably understates the incumbent’s advantage: RCP records not a single national survey giving Romney even a minimal margin since Gallup’s tracking poll in late August. Global futures markets like InTrade now tip 70/30 for Obama. (If you’re confident Romney is going to win, you can at least expect to make some money.) And for true gloom and doom for Romney, take a look at this new Pew survey. It shows Obama ahead by 8 percentage points overall among likely voters, and leading Romney on almost every issue and every scale of likeability.

The last month has been genuinely and relentlessly awful for Mitt Romney.

First came his selection of Paul Ryan as VP, which reinforced the male-white-accounting-econowonk side of the ticket (not exactly where Romney needed reinforcement—and there were so many great alternative VP picks roughly Ryan’s age) while tying Romney to a very specific plan to cut the cost of Medicare. Nothing could have pleased Axelrod and Plouffe and others in the Democratic HQ more than to change the topic of conversation from how slowly the economy is recovering under Obama to how much Romney wants to throw seniors over the cliff. I actually agree with most of the fundamental elements of the Ryan plan (incentives and budgets for health-care providers are surely coming, like them or not). But hey Romney, wait until you’re President and appoint Ryan as your director of OMB or your head of CMS. But add him to your ticket? Probably not the best idea.

Second, there was the GOP’s lukewarm convention. The Democrats’ wasn’t much either, but then again they didn’t have to prove anything: Everybody already knows who the Obamas and Clintons are. The GOP had to persuade the public why the presidential mantle of office should be transferred to this relative unknown. They needed to put the Democrats on trial for keeping America mired in the worst economic mess since the Great Depression. They needed to excoriate the other party for the suffering of America’s unemployed and underemployed middle- and lower-income citizens (just as the Democrats surely would have done to the GOP had a Republican been the incumbent). But the Romney campaign did very little of this. Instead, they talked about budget-balancing, too much regulation, and Obama’s “anti-business” attitudes. Wow. And with the growing danger of war or broader war mounting in the Mideast and East Asia, the GOP could have mounted a principled critique, say, of Obama’s track record on his policies of engagement with Iran, Russia, and China. But no. Virtually nothing at all on national security issues, which subsequently (and remarkably) allowed the Democrats at their convention to look responsible in an area where their party has been perennially vulnerable.

OK, a missed opportunity with the convention. But (and here’s number three), Team Romney subsequently failed to follow up with any of the policy strategy and detail he “didn’t have time for” earlier. Instead, he has been dogged by gaffes and garbled misstatements in poorly staged impromptu interviews—while getting rhetorically outmaneuvered at every turn by Team Obama. The worst fumble of all was his off-the-record suggestion that the growing share of Americans who pay no federal income taxes (“47 percent”) are essentially lost to the Republican Party. Mindboggling. This poor, struggling, laid-off, and dependent 47 percent in fact constitutes a growing constituency for the GOP (a point I will return to shortly). Rather than express outrage that today’s horrible economy has stripped them of their livelihoods and independence, Romney is throwing them under the bus.

It’s almost as though Romney is channeling Herbert Hoover and can’t recall Ronald Reagan. When he tries to talk like a conservative, George Will recently commented, Romney sometimes sounds like one of those robotic German spies in vintage WWII movies: He’s memorized lots of facts, but he’ll never know who Stan Musial is.

Fourth, and most recently, comes Ben Bernanke’s announcement of QE3 and an “indefinite” guarantee of near-zero interest rates, which was soon followed by a sizeable surge in the Dow. For the first time—even though the real economy hasn’t done much of anything–Obama is matching or even overtaking Romney in his perceived ability to handle the economy. A very large and somewhat amusing gap has now appeared in how political partisans now view the economy. Back in early August, 71 percent of Republicans and 62 percent of Democrats said they were hearing “mostly bad news about the economy.” Today, 60 percent of Republicans continue to say that—but only 15 percent of Democrats. That’s a 45-point spread.

Is the economy doing much better? I say no. I don’t think it’s doing better at all. (Indeed, I think it’s likely we have already entered a new recession and just don’t know it yet.) So I think the GOP—which is now hopping mad at Bernanke for giving the economy a “sugar-water high” just weeks before the election—is quite mistaken about Bernanke’s motives. Chairman Ben did not go “all in” with QE3 because he wants to be re-chosen as Fed head by Obama. He did it because he knows the economy is in really deep trouble. (I will come back to this in another post.)

So what are Mitt’s odds at this point? Quite honestly, they aren’t great, and if I had to make a wager right now I would certainly bet on a modest Obama victory—a smaller voter margin than 2008, but not a cliffhanger. As for Congress, the House will certainly remain in GOP hands (Pelosi’s sudden optimism seems delusional) and the Senate will probably be split 50-50 right down the middle.

Of course, a comeback is possible. It’s a tall order. For Romney to rally and win, some combination of the following three-and-a-half things will have to happen.

(1) Romney has a great debate performance. Without it, he’s toast. With it, he could get back into the running. The boost could be big precisely because voter expectations at this point are so low. And because lots of voters still don’t know him very well—aside from the gaffes they hear about in the news. According the surveys, voters are really looking forward to the debates: Fully two-thirds now say they will be “very” or “somewhat” helpful in deciding which candidate to vote for, the largest share since Clinton-versus-Bush, Sr., in 1992. Keep in mind as well that Romney got plenty of practice debating in the primaries and often performed very well in them, showing plenty of wit, humor, and grace under fire.

(2) National security goes critical, which will probably hurt Obama. It’s hard to recall a recent election–maybe Clinton-Dole in 1996?—in which foreign affairs has played such a minor role. Which is incredible when you think we now have 70,000 troops fighting in Asia (and getting shot at and killed by our own uniformed “allies”) together with thousands more fighting more surreptitiously, with and without deadly predators, in dozens of other far-flung nations. And the temperature is now getting hotter on most fronts, with Islamist violence clearly rising, Syria gripped in civil war, Egypt and much of North Africa run by new and unstable regimes, Iran and Israel (and inevitably the United States) near the brink of war in the Persian Gulf, and, most recently, a new risk of war in the China Sea. At some point, geopolitics may well burst into 2012 election like a wild and uninvited guest–to the White House at least, which will likely be put mostly on the defensive. Romney may or may not be able to leverage the opportunity. In any case, Obama doesn’t have enough time left for a “wag the dog” response.

(3) Another bad shoe drops on the economy, which will certainly hurt Obama. Obama “owns” current economic performance in 2012 nearly as much as Hoover “owned” it in 1932. Most Democratic partisans understand this, explaining their desire to play up positive news and to rejoice at the Fed-triggered revival in the Dow. Voters mostly think that Obama is trying hard, and so long as GDP and employment are growing ever so slightly (unlike 1932, obviously), they may go along with his argument that he is at least much better than the GOP alternative. But what if these numbers, which are now merely flatlining, suddenly turn decisively down between now the election, raising new and urgent talk of yet another recession? Perceptions about Obama’s “slow progress” and “incomplete” grade on the economy would, in this case, quickly shift—on the issue that everyone agrees is most on voters’ minds.

I promised three-and-a-half things, so let me add one more consideration that is related to the condition of today’s economy and is more speculative. I want to talk for a moment about class and income deprivation, and how these may feed into a new sort of partisanship.

To mention class, of course, is to raise perceptions that nearly everyone figures work against the GOP. And a recent Pew report (“Yes, the Rich are Different”) makes it clear just how tough it is, once the words “rich” and “poor” are mentioned, for most voters to say much that’s flattering about the GOP.

The report, which is well worth reading for its own sake, tries to analyze how Americans think about class. When most Americans are simply asked what they think about “the rich,” the responses reflect an revealing mix of praise and damnation. On the other hand, most Americans agree that rich people are more “intelligent” and more “hardworking” than the average American. (More “hardworking” is, I think, a new development: Fifty years ago I’m quite sure most Americans would not have said that.) On the other hand, most Americans also believe that the rich are much more likely to be more “greedy” and “dishonest” than the average American.

Yet it’s when the report assesses changes over time, especially from 2008 to 2012, that its findings really tip hard against the GOP. Point (1): Americans across-the-board, in both parties, feel that since 2008 the gap between the rich and poor has been widening. Point (2): Most Americans, again in both parties, feel this widening is a bad thing for our country. Point (3): Most think that the Republicans will help mostly the rich and that the Democrats will help mostly the poor and middle class. Point (4): Most think point (3) is especially true for Mitt Romney (at least, those who knew enough about Romney to have an opinion). This is a veritable syllogism of bad news for the Romney camp.

So now let me bring your attention to another Pew survey, which appeared at nearly the same time: “A Closer Look at the Parties in 2012: GOP Makes Big Gains among White Working-Class Voters.” It comes to conclusions which, while not contradicting the other report, point in a totally different direction. It’s fascinating to contemplate these two reports side by side.

The report starts with the unsurprising finding that total voter identification by party has faded somewhat for the Democrats since 2008 (from 51 to 48 percent) and has gained somewhat for the GOP (from 39 to 43 percent). Not including “leaners,” the GOP has a net gain of 3 percentage points. Yet here’s the surprise: More than all of this total gain for the GOP has occurred in the lowest income brackets. Among the highest income brackets, the Democrats have actually gained share.

The report shows, in addition, that minorities at all ages are just about as Democrat-favoring in 2012 as in 2008 (and more than in 2004), while nearly all the Democrat identification losses are among whites–and virtually all of these losses are among lower-income whites. (High-income whites are just as pro-Obama today as in 2008.) In 2008, whites were strong pro-GOP in every income bracket above $50,000. In 2012, they are strong pro-GOP in every bracket above $30,000.

The same holds true if you substitute education for income. College-plus America (with a four-year degree or more) is more pro-Democratic in 2012 than it was in 2008; college-minus America (everybody else) is more pro-GOP.

You’re welcome to view the crosstab data yourself, graciously provided by Pew. Let me summarize the main findings in the following graphic.

So how do we make sense of these very different perspectives? My own view is that, yes, a sense of class awareness—and class division—has grown since 2008 in ways that tarnish the image of the GOP in eyes of America’s have-nots and have-lesses. But these are also the Americans who have been hurt the worst over the last four years in unemployment, lost income, lost wealth, and foreclosed homes. (See the new annual CBO report on income and poverty for the gory details.) Their sense of class grievance is overweighed by their sense of performance failure on the party now in the White House: This is Obama’s economy, he failed, it really hurts, and I don’t want four more years of this. Wealthy Americans just aren’t feeling the “really hurts” part.

Overall, from 2008 to 2012, the share of all Americans who call themselves “lower” or “lower-middle” class has grown from 25 to 32 percent. (This itself is a disturbing finding, again brought to us by Pew Research.) More than all of that 7 percentage point increase has gone to the GOP. The share of GOP supporters who call themselves “lower class” has jumped from 13 to 23 percent while the “lower class” share of Democratic supporters has risen much less (from 29 to 33 percent).

Moreover, areas that do not traditionally vote Democratic, but swung blue for Obama, appear to be swinging back the most in this election. The Midwest, South, and Mountain regions show large declines of 6 to 9 points in net support for Democrats over Republicans, while traditionally bluer regions like New England, the Mid-Atlantic, and the West Coast show little or no decline. (This is reflected in the rural/urban split in my table.) In other words, traditionally Republican voters who “took a chance” on Obama and are hurting in today’s economy may be feeling buyers’ remorse.

Whether all this affects the outcome of the election is uncertain. Clearly, the aftermath of the Great Recession provides the GOP with some real opportunities for a full-throated populist message. Just as clearly, Mitt Romney is probably the candidate least equipped to deliver such a message. The “47 percent” miscue says it all. And for this reason, the GOP is now likely to lose the election. (You notice that I called this merely “half a point” for Romney.)

Yet there are other implications likely to follow from this growing two-way rip tide of class tension in America. Ominously, it may portend a further widening of the blue-red polarization of America once the 2012 exit polls are counted, with a growing regional and urban-rural split in voter preferences. We may see the disappearance of the “purple” states that appeared in 2008, and the reappearance of more bright-blue and bright-red states. By 2016, assuming Obama wins, a crowded and all-Gen-X field of GOP primary contestants may choose to tack far more in the populist direction than did McCain in 2008 or Romney in 2012.

And what about voting by generation? The huge generational gap remains: The Silent will swing way to the GOP this year, and the Millennials will swing way to the Democrats. But on top of this preference, there is certain to be a distinct class twist. You can expect the huge anti-Obama margin among seniors to acquire an extra passion among the hard-beaten, Tea-Party, “heartland” edge. Likewise, you can expect the huge pro-Obama margin among young adults to pick up its greatest energy among collegians and among affluent and urban young professionals. According to the New York Times’ recent feature story on non-college Millennials, many of them are struggling but few of them plan on voting for Obama. More to the point, however, few of them plan to vote for Romney either—or even feel they are in any way on his radar screen.

WE PISS TRILLIONS AWAY OVERSEAS WHILE OUR INFRASTRUCTURE CRUMBLES

The http://theeconomiccollapseblog.com/ with another fine list of things to depress you. Here is the missing piece. I hear various jackass pundits like Larry Summers declare that what this nation needs is a massive Keynesian Federal Infrastructure Program to repair our infrastructure and generate jobs. It’s a crock of shit. The Federal government, state governments, county governments, and municipal governments create budgets every fucking year and have been creating them for over 200 years. Expenditures for capital and infrastructure projects have been in these budgets every year. So why is our infrastructure crumbling?

It’s because these politicians and government bureaucrats have CHOSEN to spend YOUR money on gold plated public union contracts, beautiful new municipal buildings, bridges to nowhere, social welfare programs, food stamps, SSDI for depressed people, corporate tax breaks, solar energy subsidies, ethanol subsidies, and the biggest of them all – handing hundreds of billions to dictators we prop up throughout the world, three trillion dollars fighting wars in the Middle East, and spending $900 billion per year policing the world.

We spent billions blowing up Iraqi infrastructure, then spent billions more rebuilding Iraqi infrastructure that we had blown up, while our own infrastructure crumbles by the day.

Well it’s too fucking late people. The fucking money is gone. We can’t afford a massive Keynesian infrastructure program. The money is already committed to Social Security, Medicare, Obamacare, and the Military Industrial Complex. So Solly.

21 Facts About America’s Decaying Infrastructure That Will Blow Your Mind

You can tell a lot about a nation by the condition of the infrastructure. So what does our infrastructure say about us? It says that we are in a very advanced state of decay. At this point, much of America is being held together with spit, duct tape and prayers. Our roads are crumbling and thousands of our bridges look like they could collapse at any moment. Our power grid is ancient and over a trillion gallons of untreated sewage is leaking from our aging sewer systems each year. Our airports and our seaports are clogged with far more traffic than they were ever designed to carry. Approximately a third of all of the dam failures that have taken place in the United States since 1874 have happened during the past decade. Our national parks and recreation areas have been terribly neglected and our railroads are a bad joke. Hurricane Katrina showed how vulnerable our levees are, and drinking water systems all over the country are badly outdated. Sadly, at a time when we could use significant new investment in infrastructure, our spending on infrastructure is actually way down. Back during the 50s and the 60s, the U.S. was spending between 3 and 4 percent of GDP on infrastructure. Today, that figure is down to about 2.4 percent. But of course we don’t have any extra money to spend on infrastructure because of our reckless spending and because of the massive amount of debt that we have accumulated. While the Obama administration is spending more than half a million dollars to figure out why chimpanzees throw poop, our national infrastructure is literally falling apart all around us. Once upon a time nobody else on the planet could match our infrastructure, and now we are in the process of becoming a joke to the rest of the world.

The following are 21 facts about America’s failing infrastructure that will blow your mind….

#1 The American Society of Civil Engineers has given America’s crumbling infrastructure an overall grade of D.

#2 There are simply not enough roads in the United States today. Each year, traffic jams cost the commuters of America 4.2 billion hours and about 2.8 million gallons of gasoline.

#3 It is being projected that Americans will spend an average of 160 hours stuck in traffic annually by the year 2035.

#4 Approximately one-third of all roads in the United States are in substandard condition.

#5 Close to a third of all highway fatalities are due “to substandard road conditions, obsolete road designs, or roadside hazards.”

#6 One out of every four bridges in America either carries more traffic than originally intended or is in need of repair.

#7 Repairing all of the bridges in the United States that need repair would take approximately 140 billion dollars.

#8 According to the U.S. Chamber of Commerce, our decaying transportation system costs the U.S. economy about 78 billion dollars annually in lost time and fuel.

#9 All over America, asphalt roads are being ground up and are being replaced with gravel roads because they are cheaper to maintain. The state of South Dakota has transformed over 100 miles of asphalt roads into gravel roads, and 38 out of the 83 counties in the state of Michigan have transformed at least some of their asphalt roads into gravel roads.

#10 There are 4,095 dams in the United States that are at risk of failure. That number has risen by more than 100 percent since 1999.

#11 Of all the dam failures that have happened in the United States since 1874, a third of them have happened during the past decade.

#12 Close to half of all U.S. households do not have access to bus or rail transit.

#13 Our aging sewer systems spill more than a trillion gallons of untreated sewage every single year. The cost of cleaning up that sewage each year is estimated to be greater than 50 billion dollars.

#14 It is estimated that rolling blackouts and inefficiencies in the U.S. electrical grid cost the U.S. economy approximately 80 billion dollars a year.

#15 It is being projected that by the year 2020 every single major container port in the United States will be handling at least double the volume that it was originally designed to handle.

#16 All across the United States, conditions at many of our state parks, recreation areas and historic sites are deplorable at best. Some states have backlogs of repair projects that are now over a billion dollars long….

More than a dozen states estimate that their backlogs are at least $100 million. Massachusetts and New York’s are at least $1 billion. Hawaii officials called park conditions “deplorable” in a December report asking for $50 million per year for five years to tackle a $240 million backlog that covers parks, trails and harbors.

#17 Today, the U.S. spends about 2.4 percent of GDP on infrastructure. Meanwhile, China spends about 9 percent of GDP on infrastructure.

#18 In the United States today, approximately 16 percent of our construction workers are unemployed.

#19 China has plans to build 55,000 miles of highways by the year 2020. If all of those roads were put end to end, it would be longer than the total length of the entire U.S. interstate system.

#20 The World Economic Forum ranks U.S. infrastructure 23rd in the world, and we fall a little bit farther behind the rest of the developed world every single day.

#21 It has been projected that it would take 2.2 trillion dollars over the next 5 years just to repair our existing infrastructure. That does not even include a single penny for badly needed new infrastructure.

So where did we go wrong?

Well, one of the big problems is that we have become a very materialistic society that is obsessed with short-term thinking. Investing in infrastructure is something that has long-term benefits, but these days Americans tend to only be focused on what is happening right now and most politicians are only focused on the next election cycle.

Another major problem is that there is so much corruption and waste in our system these days. The government certainly spends more than enough money, but very little of that money is spent wisely. A lot of the money that could be going toward rebuilding our infrastructure is being poured down the toilet instead. For much more on this, please read my previous article entitled “16 Sickening Facts That Show How Members Of Congress And Federal Workers Are Living The High Life At Your Expense“.

Unfortunately, it is probably appropriate that our infrastructure is decaying because we are decaying in just about every other way that it is possible for a society to decay.

We are decaying economically, politically, mentally, emotionally, physically, morally and spiritually.

We are a complete and total mess. So why shouldn’t what is happening to our infrastructure on the outside match what is happening to us as a nation on the inside?

And sadly, we simply do not have the money that we need for infrastructure because of all the debt that we have piled up. The federal government, our state governments and our local governments are all struggling to stay afloat in an ocean of red ink, and unfortunately that means that spending on infrastructure is likely to be cut even more in the years ahead.

So get used to rotting, crumbling, decaying infrastructure. What you see out there right now is only just the beginning.

iTARDS

Today is the day. This is the day that 10 million morons will wait in line for hours and sometimes days to get a fucking phone. It’s a phone people!!!!

Sometimes I think I’m too hard on the ignorant masses and their sheeplike qualities. It’s days like today where I realize how shallow and vapid our society has become. A corporation upgrades a fucking phone for the 5th time, the mainstream media works itself into a frenzy, Wall Street drives the stock price of the corporation to ridiculous valuations with their hype machine, and the non-critical thinking masses camp out for days so they can be the 1st person on their block to have a fucking phone. The phone will be available next week and the week after that. How fucking worthless must your life be to sit in line for days to get a fucking phone?

The coup de grace of this charade is that most of the iTards who buy this phone for $399 will put it on their credit card because they can’t actually afford the phone. This delusional wasteland of gadgets, debt and brainlessness is a sight to see. As I drove towards my parking garage on campus, there were long lines of people in front of the Verizon store on one block and another long line in front of the AT&T store on the next block. The numbskulls waiting in line appeared to be a mixture of college students and West Philly’s finest. I expect to see a few homies talking on their iPhone 5 as they head beack to their Section 8 housing gated townhouses later today. Only a few more days until their EBT card gets replenished.

IPhone 5 sale draws huge crowds

NEW YORK (CNNMoney) — Jessica Mellow has been in line for more than 180 hours — that’s eight straight days — waiting to buy an iPhone 5. She’s been woken up by cops, “showered” in a torrential downpour, and watched two taxis collide right in front of the growing crowd outside Apple’s gleaming retail cube on Manhattan’s Fifth Avenue.

In just a few more minutes, Apple (AAPL, Fortune 500) will finally deliver the prize she and thousands of line-sitters around the world are waiting for. The iPhone 5 goes on sale at 8 a.m. local time on Friday in the U.S., Australia, Canada, France, Germany, Hong Kong, Japan, Singapore and the UK.

The phone is virtually guaranteed to be Apple’s all-time bestseller.Apple took more than 2 million pre-orders in the first 24 hours, shattering last year’s iPhone 4S record, and analysts forecast that it will sell as many as 10 million units by Monday morning. Apple’s early inventory is already sold out: Online orders placed now won’t ship for three to four weeks.

Those hoping to snag an iPhone 5 right now will need to brave a retail line. Apple’s stores typically have the best stockpiles, but they also draw the longest lines. By Friday morning, Apple’s Fifth Avenue flagship had a line that stretched down an entire city block and wrapped around.

Apple’s lines traditionally draw a mix of marketers, Apple zealots and more casual fans. Natalie Lopez, 32, joined the line at 5:30 a.m. Friday.

“I’ve got the original iPhone. I’ve been sitting on it for 5 years. I’m just excited to upgrade it to something new,” she said.

Alex Brooks upgrades his Apple phone every cycle and typically sells the old model. (An iPhone 4S can still snag well over $200 on many resale sites.) He said he’s excited about trading up for a lighter, thinner, faster phone.

The crowd at the Apple Store at Grand Central Station was quiet but large about 40 minutes ahead of opening time. The line snaked from the Main Concourse, down hundreds of feet of corridor, to a sign for the exit at 48th St. and Park Avenue. A handful of iPhone hopefuls stepped right up to the marble staircase that leads to the Apple Store — and appeared bewildered when pointed down the corridor toward a long and growing line.

People were still jumping in line at 7:30 a.m. One twentysomething man arrived breathless, asking, “Is this the line for the iPhone 5?”

“It’s the line for the express train to Poughkeepsie,” a security guard quipped.

Several people at the back of the line were heard asking each other, “Do you know how many iPhones they have today?” Everyone shrugged.

Many people in line at Grand Central were passing the time using other Apple gadgets like Macs and iPhones.

A variety of other retailers — including carriers AT&T (T, Fortune 500), Verizon (VZ, Fortune 500) and Sprint (S, Fortune 500) — will also have the iPhone 5 available for sale on Friday, but their stashes could go fast.

A total of zero people were in line at a Radio Shack less than a block away from Grand Central shortly before the iPhone was slated to go on sale.

Representatives at several Best Buy (BBY, Fortune 500) locations in Manhattan said the stores were still receiving their shipments on Thursday afternoon, and that they therefore didn’t know many units would be available for purchase Friday morning.

An employee at one Best Buy location in the NoHo section of lower Manhattan said that store is opening at 8 a.m. ET, but the iPhone 5 “will probably be sold out for anyone who didn’t pre-order.”

The Fifth Avenue Best Buy, near Grand Central Station, is opening at 9 a.m. An employee who answered the phone at that location said “a whole bunch” of people had pre-ordered the iPhone 5 and that many others called this week asking for details.

Employees at Verizon Wireless stores in Manhattan were similarly tight-lipped. The Grand Central location is opening at 8 a.m., but a representative said she had no information on the number of phones that would be available. Ten minutes before the iPhone’s sale time, the store had a line of around 3 dozen shoppers.

Callers who contacted the Verizon store near Times Square were greeted by a recorded message trumpeting that the location will open early, at 8 a.m., for the launch of the iPhone 5. A store manager said he was “not able to disclose the amount of units.”

Apple’s iPhone 5 release comes nearly one year after Apple’s iPhone 4S, the model that introduced the world to Siri. The thinner, faster iPhone 5 is Apple’s first hardware overhaul in several years. Reviewers have praised the phone’s bigger screen, zippy processor, stellar camera and elegant packaging, but two major changes sparked blowback.

Apple’s redesigned “Lightning” connector will require a pricey adapter to link up with old accessories (and it won’t work at all with some of them), and early adopters have almost universally blasted Apple’s new Map app, which replaced the more-polished Google Maps. A satirical Tumblr, theamazingios6maps.tumblr.com, popped up on Thursday to highlight the ludicrously inaccurate suggestions the new app often makes.

Apple’s fans were undaunted.

“I heard maps isn’t so great, so that’s pretty disappointing, but I’m sure they’ll make it better,” Lopez said.

IS MONSANTO KILLING US?

Monsanto Roundup weedkiller and GM maize implicated in ‘shocking’ new cancer study

19 Sep 2012 | By Elinor Zuke

The world’s best-selling weedkiller, and a genetically modified maize resistant to it, can cause tumours, multiple organ damage and lead to premature death, new research published today reveals.

In the first ever study to examine the long-term effects of Monsanto’s Roundup weedkiller, or the NK603 Roundup-resistant GM maize also developed by Monsanto, scientists found that rats exposed to even the smallest amounts, developed mammary tumours and severe liver and kidney damage as early as four months in males, and seven months for females, compared with 23 and 14 months respectively for a control group.

“This research shows an extraordinary number of tumours developing earlier and more aggressively – particularly in female animals. I am shocked by the extreme negative health impacts,” said Dr Michael Antoniou, molecular biologist at King’s College London, and a member of CRIIGEN, the independent scientific council which supported the research.

GM crops have been approved for human consumption on the basis of 90-day animal feeding trials. But three months is the equivalent of late adolescence in rats, who can live for almost two years (700 days), and there have long been calls to study the effects over the course of a lifetime.

The peer-reviewed study, conducted by a team of researchers at the University of Caen, found that rats fed on a diet containing NK603 Roundup resistant GM maize, or given water containing Roundup at levels permitted in drinking water, over a two-year period, died significantly earlier than rats fed on a standard diet.

Up to half the male rats and 70% of females died prematurely, compared with only 30% and 20% in the control group. Across both sexes the researchers found that rats fed Roundup in their water or NK603 developed two to three times more large tumours than the control group. By the beginning of the 24th month, 50-80% of females in all treated groups had developed large tumours, with up to three per animal.

By contrast, only 30% of the control group were affected. Scientists reported the tumours “were deleterious to health due to [their] very large size,” making it difficult for the rats to breathe, [and] causing problems with their digestion which resulted in haemorrhaging.

The paper, published in the scientific journal Food and Chemical Toxicology today, concluded that NK603 and Roundup caused similar damage to the rats’ health, whether they were consumed together or on their own. The team also found that even the lowest doses of Roundup, which fall well within authorised limits in drinking tap water, were associated with severe health problems.

“The rat has long been used as a surrogate for human toxicity. All new pharmaceutical, agricultural and household substances are, prior to their approval, tested on rats. This is as good an indicator as we can expect that the consumption of GM maize and the herbicide Roundup, impacts seriously on human health,” Antoniou added.

Roundup is widely available in the UK, and is recommended on Gardeners Question Time. But this also represents a potential blow for the growth of GM Foods.

With the global population expected to increase to nine billion by 2050, the UN has said that global food production must increase by 50%. And a consultation led by DEFRA entitled Green Food Project recommended as recently as 10 July 2012 that GM must be reassessed as a possible solution.

Some 85% of maize grown in the US is GM, while 70% of processed foods contain GM ingredients without GM labelling. In the UK and Europe GM maize is not consumed directly by humans but is widely used in animal feed without the requirement for GM labelling.

Antoniou said there could be no doubting the credibility of this peer-reviewed study. “This is the most thorough research ever published into the health effects of GM food crops and the herbicide Roundup on rats.”

Led by Professor Gilles-Eric Seralini, the researchers studied 10 groups, each containing 10 male and 10 female rats, over their normal lifetime. Three groups were given Roundup – developed by Monstanto – in their drinking water at three different levels consistent with exposure through the food chain from crops sprayed with the herbicide.

Three groups were fed diets containing different proportions of Roundup resistant maize at 11%, 22% and 33%. Three groups were given both Roundup and the GM maize at the same three dosages. The control group was fed an equivalent diet with no Roundup or NK603 containing 33% of non-GM maize.

A spokesman for Monsanto said: “We will review it thoroughly, as we do all studies that relate to our products and technologies.”

Watch the video: experts discuss the significance of the findings

QUOTES OF THE DAY – HUXLEY ON WAR, HISTORY & TRUTH

What is absurd and monstrous about war is that men who have no personal quarrel should be trained to murder one another in cold blood.
Aldous Huxley

The most shocking fact about war is that its victims and its instruments are individual human beings, and that these individual beings are condemned by the monstrous conventions of politics to murder or be murdered in quarrels not their own.
Aldous Huxley

The propagandist’s purpose is to make one set of people forget that certain other sets of people are human.
Aldous Huxley

Facts do not cease to exist because they are ignored.
Aldous Huxley

Great is truth, but still greater, from a practical point of view, is silence about truth. By simply not mentioning certain subjects… totalitarian propagandists have influenced opinion much more effectively than they could have by the most eloquent denunciations.
Aldous Huxley

An unexciting truth may be eclipsed by a thrilling lie.
Aldous Huxley

Idealism is the noble toga that political gentlemen drape over their will to power.
Aldous Huxley

A democracy which makes or even effectively prepares for modern, scientific war must necessarily cease to be democratic. No country can be really well prepared for modern war unless it is governed by a tyrant, at the head of a highly trained and perfectly obedient bureaucracy.
Aldous Huxley

So long as men worship the Caesars and Napoleons, Caesars and Napoleons will duly arise and make them miserable.
Aldous Huxley

That men do not learn very much from the lessons of history is the most important of all the lessons of history.
Aldous Huxley

The charm of history and its enigmatic lesson consist in the fact that, from age to age, nothing changes and yet everything is completely different.
Aldous Huxley

You shall know the truth, and the truth shall make you mad.
Aldous Huxley

One of the great attractions of patriotism – it fulfills our worst wishes. In the person of our nation we are able, vicariously, to bully and cheat. Bully and cheat, what’s more, with a feeling that we are profoundly virtuous.
Aldous Huxley

ARE YOU SEEING WHAT I’M SEEING?

Is it just me, or are the signs of consumer collapse as clear as a Lowes parking lot on a Saturday afternoon? Sometimes I wonder if I’m just seeing the world through my pessimistic lens, skewing my point of view. My daily commute through West Philadelphia is not very enlightening, as the squalor, filth and lack of legal commerce remain consistent from year to year. This community is sustained by taxpayer subsidized low income housing, taxpayer subsidized food stamps, welfare payments, and illegal drug dealing. The dependency attitude, lifestyles of slothfulness and total lack of commerce has remained constant for decades in West Philly. It is on the weekends, cruising around a once thriving suburbia, where you perceive the persistent deterioration and decay of our debt fixated consumer spending based society.

The last two weekends I’ve needed to travel the highways of Montgomery County, PA going to a family party and purchasing a garbage disposal for my sink at my local Lowes store. Montgomery County is the typical white upper middle class suburb, with tracts of McMansions dotting the landscape. The population of 800,000 is spread over a 500 square mile area. Over 81% of the population is white, with the 9% black population confined to the urban enclaves of Norristown and Pottstown.

The median age is 38 and the median household income is $75,000, 50% above the national average. The employers are well diversified with an even distribution between education, health care, manufacturing, retail, professional services, finance and real estate. The median home price is $300,000, also 50% above the national average. The county leans Democrat, with Obama winning 60% of the vote in 2008. The 300,000 households were occupied by college educated white collar professionals. From a strictly demographic standpoint, Montgomery County appears to be a prosperous flourishing community where the residents are living lives of relative affluence. But, if you look closer and connect the dots, you see fissures in this façade of affluence that spread more expansively by the day. The cheap oil based, automobile dependent, mall centric, suburban sprawl, sanctuary of consumerism lifestyle is showing distinct signs of erosion. The clues are there for all to see and portend a bleak future for those mentally trapped in the delusions of a debt dependent suburban oasis of retail outlets, chain restaurants, office parks and enclaves of cookie cutter McMansions. An unsustainable paradigm can’t be sustained.

The first weekend had me driving along Ridge Pike, from Collegeville to Pottstown. Ridge Pike is a meandering two lane road that extends from Philadelphia, winds through Conshohocken, Plymouth Meeting, Norristown, past Ursinus College in Collegeville, to the farthest reaches of Montgomery County, at least 50 miles in length. It served as a main artery prior to the introduction of the interstates and superhighways that now connect the larger cities in eastern PA. Except for morning and evening rush hours, this road is fairly sedate. Like many primary routes in suburbia, the landscape is engulfed by strip malls, gas stations, automobile dealerships, office buildings, fast food joints, once thriving manufacturing facilities sitting vacant and older homes that preceded the proliferation of cookie cutter communities that now dominate what was once farmland.

Telltale Signs

I should probably be keeping my eyes on the road, but I can’t help but notice the telltale signs of an economic system gone haywire. As you drive along, the number of For Sale signs in front of homes stands out. When you consider how bad the housing market has been, the 40% decline in national home prices since 2007, the 30% of home dwellers underwater on their mortgage, and declining household income, you realize how desperate a home seller must be to try and unload a home in this market. The reality of the number of For Sale signs does not match the rhetoric coming from the NAR, government mouthpieces, CNBC pundits, and other housing recovery shills about record low inventory and home price increases.

The Federal Reserve/Wall Street/U.S. Treasury charade of foreclosure delaying tactics and selling thousands of properties in bulk to their crony capitalist buddies at a discount is designed to misinform the public. My local paper lists foreclosures in the community every Monday morning. In 2009 it would extend for four full pages. Today, it still extends four full pages. The fact that Wall Street bankers have criminally forged mortgage documents, people are living in houses for two years without making mortgage payments, and the Federal Government backing 97% of all mortgages while encouraging 3.5% down financing does not constitute a true housing recovery. Show me the housing recovery in these charts.

Existing home sales are at 1998 levels, with 45 million more people living in the country today.

New single family homes under construction are below levels in 1969, when there were 112 million less people in the country.

Another observation that can be made as you cruise through this suburban mecca of malaise is the overall decay of the infrastructure, appearances and disinterest or inability to maintain properties. The roadways are potholed with fading traffic lines, utility poles leaning and rotting, and signage corroding and antiquated. Houses are missing roof tiles, siding is cracked, gutters astray, porches sagging, windows cracked, a paint brush hasn’t been utilized in decades, and yards are inundated with debris and weeds. Not every house looks this way, but far more than you would think when viewing the overall demographics for Montgomery County. You wonder how many number among the 10 million vacant houses in the country today. The number of dilapidated run down properties paints a picture of the silent, barely perceptible Depression that grips the country today. With such little sense of community in the suburbs, most people don’t even know their neighbors. With the electronic transfer of food stamps, unemployment compensation, and other welfare benefits you would never know that your neighbor is unemployed and hasn’t made the mortgage payment on his house in 30 months. The corporate fascist ruling plutocracy uses their propaganda mouthpieces in the mainstream corporate media and government agency drones to misinform and obscure the truth, but the data and anecdotal observational evidence reveal the true nature of our societal implosion.

A report by the Census Bureau this past week inadvertently reveals data that confirms my observations on the roadways of my suburban existence. Annual household income fell in 2011 for the fourth straight year, to an inflation-adjusted $50,054. The median income — meaning half earned more, half less — now stands 8.9% lower than the all-time peak of $54,932 in 1999. It is far worse than even that dreadful result. Real median household income is lower than it was in 1989. When you understand that real household income hasn’t risen in 23 years, you can connect the dots with the decay and deterioration of properties in suburbia. A vast swath of Americans cannot afford to maintain their residences. If the choice is feeding your kids and keeping the heat on versus repairing the porch, replacing the windows or getting a new roof, the only option is survival.

All races have seen their income fall, with educational achievement reflected in the much higher incomes of Whites and Asians. It is interesting to note that after a 45 year War on Poverty the median household income for black families is only up 19% since 1968.

Now for the really bad news. Any critical thinking person should realize the Federal Government has been systematically under-reporting inflation since the early 1980’s in an effort to obscure the fact they are debasing the currency and methodically destroying the lives of middle class Americans. If inflation was calculated exactly as it was in 1980, the GDP figures would be substantially lower and inflation would be reported 5% higher than it is today. Faking the numbers does not change reality, only the perception of reality. Calculating real median household income with the true level of inflation exposes the true picture for middle class America. Real median household income is lower than it was in 1970, just prior to Nixon closing the gold window and unleashing the full fury of a Federal Reserve able to print fiat currency and politicians to promise the earth, moon and the sun to voters. With incomes not rising over the last four decades is it any wonder many of our 115 million households slowly rot and decay from within like an old diseased oak tree. The slightest gust of wind can lead to disaster.

Eliminating the last remnants of fiscal discipline on bankers and politicians in 1971 accomplished the desired result of enriching the top 0.1% while leaving the bottom 90% in debt and desolation. The Wall Street debt peddlers, Military Industrial arms dealers, and job destroying corporate goliaths have reaped the benefits of financialization (money printing) while shoveling the costs, their gambling losses, trillions of consumer debt, and relentless inflation upon the working tax paying middle class. The creation of the Federal Reserve and implementation of the individual income tax in 1913, along with leaving the gold standard has rewarded the cabal of private banking interests who have captured our economic and political systems with obscene levels of wealth, while senior citizens are left with no interest earnings ($400 billion per year has been absconded from savers and doled out to bankers since 2008 by Ben Bernanke) and the middle class has gone decades seeing their earnings stagnate and their purchasing power fall precipitously.

The facts exposed in the chart above didn’t happen by accident. The system has been rigged by those in power to enrich them, while impoverishing the masses. When you gain control over the issuance of currency, issuance of debt, tax system, political system and legal apparatus, you’ve essentially hijacked the country and can funnel all the benefits to yourself and costs to the math challenged, government educated, brainwashed dupes, known as the masses. But there is a problem for the 0.1%. Their sociopathic personalities never allow them to stop plundering and preying upon the sheep. They have left nothing but carcasses of the once proud hard working middle class across the country side. There are only so many Lear jets, estates in the Hamptons, Jaguars, and Rolexes the 0.1% can buy. There are only 152,000 of them. Their sociopathic looting and pillaging of the national wealth has destroyed the host. When 90% of the population can barely subsist, collapse and revolution beckon.

Extend, Pretend & Depend

As I drove further along Ridge Pike we passed the endless monuments to our spiral into the depths of materialism, consumerism, and the illusion that goods purchased on credit represented true wealth. Mile after mile of strip malls, restaurants, gas stations, and office buildings rolled by my window. Anyone who lives in the suburbs knows what I’m talking about. You can’t travel three miles in any direction without passing a Dunkin Donuts, KFC, McDonalds, Subway, 7-11, Dairy Queen, Supercuts, Jiffy Lube or Exxon Station. The proliferation of office parks to accommodate the millions of paper pushers that make our service economy hum has been unprecedented in human history. Never have so many done so little in so many places. Everyone knows what a standard American strip mall consists of – a pizza place, a Chinese takeout, beer store, a tanning, salon, a weight loss center, a nail salon, a Curves, karate studio, Gamestop, Radioshack, Dollar Store, H&R Block, and a debt counseling service. They are a reflection of who we’ve become – an obese drunken species with excessive narcissistic tendencies that prefers to play video games while texting on our iGadgets as our debt financed lifestyles ultimately require professional financial assistance.

What you can’t ignore today is the number of vacant storefronts in these strip malls and the overwhelming number of SPACE AVAILABLE, FOR LEASE, and FOR RENT signs that proliferate in front of these dying testaments to an unsustainable economic system based upon debt fueled consumer spending and infinite growth assumptions. The booming sign manufacturer is surely based in China. The officially reported national vacancy rates of 11% are already at record highs, but anyone with two eyes knows these self-reported numbers are a fraud. Vacancy rates based on my observations are closer to 30%. This is part of the extend and pretend strategy that has been implemented by Ben Bernanke, Tim Geithner, the FASB, and the Wall Street banking cabal. The fraud and false storyline of a commercial real estate recovery is evident to anyone willing to think critically. The incriminating data is provided by the Federal Reserve in their Quarterly Delinquency Report.

The last commercial real estate crisis occurred in 1991. Mall vacancy rates were at levels consistent with today.

The current reported office vacancy rates of 17.5% are only slightly below the 19% levels of 1991.

As reported by the Federal Reserve, delinquency rates on commercial real estate loans in 1991 were 12%, leading to major losses among the banks that made those imprudent loans. Amazingly, after the greatest financial collapse in history, delinquency rates on commercial loans supposedly peaked at 8.8% in the 2^nd quarter of 2010 and have now miraculously plummeted to pre-collapse levels of 4.9%. This is while residential loan delinquencies have resumed their upward trajectory, the number of employed Americans has fallen by 414,000 in the last two months, 9 million Americans have left the labor force since 2008, and vacancy rates are at or near all-time highs. This doesn’t pass the smell test. The Federal Reserve, owned and controlled by the Wall Street, instructed these banks to extend all commercial real estate loans, pretend they will be paid, and value them on their books at 100% of the original loan amount. Real estate developers pretend they are collecting rent from non-existent tenants, Wall Street banks pretend they are being paid by the developers, and their highly compensated public accounting firm pretends the loans aren’t really delinquent. Again, the purpose of this scam is to shield the Wall Street bankers from accepting the losses from their reckless behavior. Ben rewards them with risk free income on their deposits, propped up by mark to fantasy accounting, while they reward themselves with billions in bonuses for a job well done. The master plan requires an eventual real recovery that isn’t going to happen. Press releases and fake data do not change the reality on the ground.

I have two strip malls within three miles of my house that opened in 1990. When I moved to the area in 1995, they were 100% occupied and a vital part of the community. The closest center has since lost its Genuardi grocery store, Sears Hardware, Blockbuster, Donatos, Sears Optical, Hollywood Tans, hair salon, pizza pub and a local book store. It is essentially a ghost mall, with two banks, a couple chain restaurants and empty parking spaces. The other strip mall lost its grocery store anchor and sporting goods store. This has happened in an outwardly prosperous community. The reality is the apparent prosperity is a sham. The entire tottering edifice of housing, autos, and retail has been sustained by ever increasing levels of debt for the last thirty years and the American consumer has hit the wall. From 1950 through the early 1980s, when the working middle class saw their standard of living rise, personal consumption expenditures accounted for between 60% and 65% of GDP. Over the last thirty years consumption has relentlessly grown as a percentage of GDP to its current level of 71%, higher than before the 2008 collapse.

If the consumption had been driven by wage increases, then this trend would not have been a problem. But, we already know real median household income is lower than it was in 1970. The thirty years of delusion were financed with debt – peddled, hawked, marketed, and pushed by the drug dealers on Wall Street. The American people got hooked on debt and still have not kicked the habit. The decline in household debt since 2008 is solely due to the Wall Street banks writing off $800 billion of mortgage, credit card, and auto loan debt and transferring the cost to the already drowning American taxpayer.

The powers that be are desperately attempting to keep this unsustainable, dysfunctional debt choked scheme from disintegrating by doling out more subprime auto debt, subprime student loan debt, low down payment mortgages, and good old credit card debt. It won’t work. The consumer is tapped out. Last week’s horrific retail sales report for August confirmed this fact. Declining household income and rising costs for energy, food, clothing, tuition, taxes, health insurance, and the other things needed to survive in the real world, have broken the spirit of Middle America. The protracted implosion of our consumer society has only just begun. There are thousands of retail outlets to be closed, hundreds of thousands of jobs to be eliminated, thousands of malls to be demolished, and billions of loan losses to be incurred by the criminal Wall Street banks.

The Faces of Failure & Futility

My fourteen years working in key positions for big box retailer IKEA has made me particularly observant of the hubris and foolishness of the big chain stores that dominate the retail landscape. There are 1.1 million retail establishments in the United States, but the top 25 mega-store national chains account for 25% of all the retail sales in the country. The top 100 retailers operate 243,000 stores and account for approximately $1.6 trillion in sales, or 36% of all the retail sales in the country. Their misconceived strategic plans assumed 5% same store growth for eternity, economic growth of 3% per year for eternity, a rising market share, and ignorance of the possible plans of their competitors. They believed they could saturate a market without over cannibalizing their existing stores. Wal-Mart, Target, Best Buy, Home Depot and Lowes have all hit the limits of profitable expansion. Each incremental store in a market results in lower profits.

My trip to my local Lowes last weekend gave me a glimpse into a future of failure and futility. Until 2009, I had four choices of Lowes within 15 miles of my house. There was a store 8 miles east, 12 miles west, 15 miles north, and 15 miles south of my house. In an act of supreme hubris, Lowes opened a store smack in the middle of these four stores, four miles from my house. The Hatfield store opened in early 2009 and I wrote an article detailing how Lowes was about to ruin their profitability in Montgomery County. It just so happens that I meet a couple of my old real estate buddies from IKEA at a local pub every few months. In 2009 one of them had a real estate position with Lowes and we had a spirited discussion about the prospects for the Lowes Hatfield store. He assured me it would be a huge success. I insisted it would be a dud and would crush the profitability of the market by cannibalizing the other four stores. We met at that same pub a few months ago. Lowes had laid him off and he admitted to me the Hatfield store was a disaster.

I pulled into the Lowes parking lot at 11:30 am on a Saturday. Big Box retailers do 50% of their business on the weekend. The busiest time frame is from 11:00 am to 2:00 pm on Saturday. Big box retailers build enough parking spots to handle this peak period. The 120,000 square feet Hatfield Lowes has approximately 1,000 parking spaces. I pulled into the spot closest to the entrance during their supposed peak period. There were about 70 cars in the parking lot, with most probably owned by Lowes workers. It is a pleasure to shop in this store, with wide open aisles, and an employee to customer ratio of four to one. The store has 14 checkout lanes and at peak period on a Saturday, there was ONE checkout lane open, with no lines. This is a corporate profit disaster in the making, but the human tragedy far overrides the declining profits of this mega-retailer.

As you walk around this museum of tools and toilets you notice the looks on the faces of the workers. These aren’t the tattooed, face pierced freaks you find in many retail establishments these days. They are my neighbors. They are the beaten down middle class. They are the middle aged professionals who got cast aside by the mega-corporations in the name of efficiency, outsourcing, right sizing, stock buybacks, and executive stock options. The irony of this situation is lost on those who have gutted the American middle class. When you look into the eyes of these people, you see sadness, confusion and embarrassment. They know they can do more. They want to do more. They know they’ve been screwed, but they aren’t sure who to blame. They were once the very customers propelling Lowes’ growth, buying new kitchens, appliances, and power tools. Now they can’t afford a can of paint on their $10 per hour, no benefit retail careers. As depressing as this portrait appears, it is about to get worse.

This Lowes will be shut down and boarded up within the next two years. The parking lot will become a weed infested eyesore occupied by 14 year old skateboarders. One hundred and fifty already down on their luck neighbors will lose their jobs, the township will have a gaping hole in their tax revenue, and the CEO of Lowes will receive a $50 million bonus for his foresight in announcing the closing of 100 stores that he had opened five years before. This exact scenario will play out across suburbia, as our unsustainable system comes undone. Our future path will parallel the course of the labor participation rate. Just as the 9 million Americans who have “left” the labor force since 2008 did not willfully make that choice, the debt burdened American consumer will be dragged kicking and screaming into the new reality of a dramatically reduced standard of living.

Connecting the dots between my anecdotal observations of suburbia and a critical review of the true non-manipulated data bestows me with a not optimistic outlook for the coming decade. Is what I’m seeing just the view of a pessimist, or are you seeing the same thing?

A few powerful men have hijacked our economic, financial and political structure. They aren’t socialists or capitalists. They’re criminals. They created the culture of materialism, greed and debt, sustained by prodigious levels of media propaganda. Our culture has been led to believe that debt financed consumption over morality and justice is the path to success. In reality, we’ve condemned ourselves to a slow painful death spiral of debasement and despair.

“A culture that does not grasp the vital interplay between morality and power, which mistakes management techniques for wisdom, and fails to understand that the measure of a civilization is its compassion, not its speed or ability to consume, condemns itself to death.” – Chris Hedges

TORA TORA TORA

In case you hadn’t noticed, this Fourth Turning just happened to turn up a few notches on the intensity scale in the last week. For those who are hoping for a positive outcome and rational people to come to their senses – So Solly. Fourth Turnings are a bitch.

Meanwhile In Beijing: “For The Respect Of The Motherland, We Must Go To War With Japan”

Submitted by Tyler Durdenon 09/15/2012 12:23 -0400

Anti-US protests sweeping across the entire Muslim world (which are continuing today), besieging, attacking and burning down US embassies, are not the only thing that the central banker policy vehicle known as “the markets” have to ignore in the coming days and weeks. Cause here comes China: “Thousands besiege Japan’s embassy in Beijing over Tokyo’s assertion of control over disputed islands in East China Sea.” And China is not happy: “For The Respect Of The Motherland, We Must Go To War With Japan.” Sure enough, where would the US be if the focal point of this escalation in militant anger – the Senkaku Islands – was not merely the latest expression of Pax Americana, and America’s national interests abroad.

We already discussed the inevitable implications of the meaningless populist agitation over the contested Senkaku Islands. Here it is playing out in real time:

Protests in China are growing over Japan’s assertion of control of disputed islands.

Thousands of Chinese besieged the Japanese embassy in Beijing on Saturday, hurling rocks, eggs and bottles with protests reported in other major cities over the territorial dispute in the East China Sea.

Paramilitary police with shields and batons barricaded the embassy, holding back and occasionally fighting with slogan-chanting, flag-waving protesters who at times appeared to be trying to storm the building.

“Return our islands! Japanese devils get out!” some shouted.

One of them held up a sign reading: “For the respect of the motherland, we must go to war with Japan.”

The protests were not confined in Beijing. In Shanghai, streets around the Japanese consulate, in the were cordoned off on Saturday even as hundreds of police allowed a small groups of people in at a time to protest.

“The Chinese government has not done much to quell the inflamed passions of its citizens,” Al Jazeera’s Marga Ortigas reported from Hong Kong on Saturday.

Protesters are also calling for a widespread boycott against Japanese businesses and products.

Liu Gang, a migrant worker from the southern region of Guangxi, said: “We hate Japan. We’ve always hated Japan. Japan invaded China and killed a lot of Chinese. We will never forget.”

Japanese media are also reporting that large anti-Japan protests were held in the Chinese cities of Xian, Changsha, Nanjing and Suzhou.

Kyodo news agency said protesters attacked a dozen Japanese restaurants in Suzhou.

Sino-Japanese ties have long been plagued by China’s bitter memories of Japan’s military aggression in the 1930s and 1940s and present rivalry over resources and regional clout.

Relations between the two countries, whose business and trade ties have blossomed in recent years, chilled in 2010, after Japan arrested a Chinese trawler captain whose boat collided with Japanese Coast Guard vessels near the Japanese-controlled islands of Senkaku, called Diaoyu in China.

Anti-Japanese sentiment surfaced anew in the last few weeks after the Japanese government purchased the islands from their private owners.

Though Japan has controlled the islands for decades, China saw the purchase as further proof of Tokyo’s refusal to negotiate.

In response to Japan’s purchase, China on Friday sent six surveillance ships into what Japan says are its territorial waters.

And that’s how “escalation” always begins.

REMEMBER THE DROUGHT?

Time for some more dot connecting. The crop situation ccontinues to worsen. The corn and soybean crops will be the lowest in decades. The prices you pay in the supermarket lag because food producers generally hedge their prices for six months. The rising prices will not fully hit your pocketbook until 2013. The high price for feed has forced ranchers to slaughter cattle and pigs sooner than normal, creating a glut and lowering prices short term. The price of meat will soar next year.

The world is already a powderkeg, with the Middle East on the verge of explosion, Europe falling into an abyss, and China in the midst of a shadowy leadership transition with an imploding economy. The U.S. is the biggest exporter of corn and soybeans in the world. Higher prices and lower supply will cause starvation in many countries around the globe. Nothing like desperation and lack of food to set off the powderkeg. Combine that with our elections, the fiscal cliff and the debt limit and you’ve got the makings of the next nasty phase of this Fourth Turning.

But at least the stock market is soaring and Bennie will provide QE3 tomorrow. Party on Garth.

Government Lowers Crop Yield Forecast Again

By RON NIXON

Published: September 12, 2012

WASHINGTON — The Agriculture Department on Wednesday slightly lowered its estimates of corn and soybean yields from its forecast last month as record heat continued to batter crops in the Midwest, making it likely that farmers will bring in one of the lowest harvests in years.

The new estimates, which are published monthly, mark the third report in a row in which the department has lowered its forecasts for this fall’s harvest of corn and soybeans.

The new data suggested that customers would pay more at the grocery store next year as the price of corn and soybeans — major ingredients in processed food, animal feed and biofuels — rise to record levels.

The corn crop yield is expected to be 122.8 bushels an acre, the lowest in 17 years, and corn prices are projected to reach a record $7.20 to $8.60 a bushel, the report said. A month ago, the government said that the yield would be 123.4 bushels an acre. Jerry Norton, an analyst with the Agriculture Department, said the forecast for corn production was generally within the range of expectations. “It’s unlikely that we will see any big changes from here on,” Mr. Norton said. “A lot of the effects of the drought are reflected in what came out today.”

The corn crop for this year had been projected to hit a record 15 billion bushels, as farmers had planted the most acreage in nearly 70 years.

But as record heat set in, projections of a bumper crop were cut.

Remnants of Hurricane Isaac brought much-needed rainfall to a large portion of the country last week, including parts of the Midwest, but the rain will have little effect on the corn crop, which had already been damaged because of the record heat. About 52 percent of the corn crop is currently rated in poor or very poor condition, unchanged from a week earlier, according to the Agriculture Department. The report said soybean production is expected to be 2.634 billion bushels — 58 million bushels below last month’s government estimate. Soybean prices are expected to be $15 to $17 a bushel, unchanged from last month, the government said.

Rice production was one of the few bright spots in the report. Farmers are expected to harvest a record 7,334 pounds per acre, up 138 pounds from last month’s estimate.

The United States is the world’s largest exporter of corn and soybeans. The report said exports of both crops would be substantially lower than last year, which could have a devastating effect on countries, including China and Mexico, that depend heavily on American exports. The government estimated that corn exports would be 50 million bushels lower because of drought conditions and competition from cheaper South American supplies. Soybean exports are down 55 million bushels largely because of the drought, the report said.

Eric Munoz, a senior policy adviser with Oxfam, said the reduction in exports for corn and soybeans means American food aid will reach fewer people. “It’s certainly a danger since several developing countries that get food aid are dealing with limited supplies and rising prices,” Mr. Munoz said.

Because of higher feed cost, the report said beef and poultry production is expected to increase this year as livestock producers cull or sell their herds. But prices for beef and poultry are expected to rise 4 to 5 percent next year. Eggs, milk and pork production are expected to decline because of the increase in feed prices.

The new estimates from the Agriculture Department are based on surveys of farmers and its own inspections. The report provides the most authoritative view yet of crop damage since the drought began in May.

WHO’S RUNNING CHINA?

Some weird shit going on in China. Who’s in control? Their economy is imploding and there appears to be a power struggle going on for the top spot. Fits nicely into the Fourth Turning Crisis scenario.

The China Post
Media speculate Xi injured in accident
10 September 2012

There were a series of media reports saying that Chinese Vice President and presumptive future top leader Xi Jinping was injured in a traffic accident, barring him from some public functions.

Xi and He Guoqiang, who supervises discipline affairs in China, have been receiving medical treatments at Beijing’s 301 Military Hospital after they were injured in two separate road accidents on the evening of Sept. 4, according to reports of Boxun, a U.S.-based citizen news website.

There were also reports in Hong Kong media about the accidents, sparking speculation and rumors that they were assassination attempts.

Xi, aged 59 and a new-generation leader in China, has been widely tipped to take over the top Communist post from General Secretary Hu Jintao at the Communist Party Congress expected to take place in October this year. Xi is also expected to take over national presidency in next March.

But there were rife rumors after Xi canceled a public appearance for a meeting with visiting U.S. Secretary of State Hillary Clinton on Sept. 5.

There were also unconfirmed reports that Xi was suffering from a painful spinal cord problem.

The media cited internal Beijing sources claiming that Xi was involved in a mysterious car accident in Beijing.

His vehicle was sandwiched by jeeps and Xi was said to have passed out during the collision before being rushed to Beijing’s 301 Military Hospital with injuries.

According to the source, He Guoqiang, the secretary of the Commission for Discipline Inspection, was involved in a separate road accident on the same night when a truck traveling at high speed hit his car from behind, causing it to turn over.

He also was rushed to the 301 Military Hospital and was said to be in a more critical condition.

There were rumors that the perpetrators could be military officers and supporters of Bo Xilai, former commerce minister and Chongqing party boss, who has been in detention for investigation concerning unspecified “serious discipline violations” since March.

Bo’s wife, Gu Kailai, was given a suspended death sentence last month for her role in murdering British businessman Neil Heywood. Bo was believed to have helped cover up the crime.

General Liu Yuan, political commissar of the General Logistics Department of the People’s Liberation Army of China, was reportedly to have personally coordinated the medical treatment for Xi and tightened security at the military hospital.

Liu, son of former Chinese President Liu Shaoqi, who was persecuted by ex-Communist leader Mao Zedong, was once thought to be among the senior military officers that have built close ties with Bo, son of another former Chinese Communist leader.

But Liu was thought to have ceded relations with Bo because of his close relations with Xi, who is expected to treat Liu as one of his own men in the influential military sector…

EPIC WORLDWIDE FAIL

Nothing like a little Kunstler on a Monday morning to make you want to slit your wrists. This is a longer than normal depressingly accurate assessment of the world. Did you actually think this Fourth Turning would get better?

Zeitgeist Failure

By James Howard Kunstler
on September 10, 2012 8:28 AM

In an age of gross zeitgeist dysfunction — when untruth, delusion, and deception rule – politics is mere advertising, which is to say surface shimmer playing on the public’s wish-fulfillment fantasies. The trouble at this moment in history is that the American public’s wishful fantasies are inconsistent with the circumstances that reality offers to us and the choices for action that they present.

President Obama’s historical role will be seen as a wish-fulfillment totem for late 20th century progressive liberalism – the first black president. The Democratic Party apotheosized the genial young lawyer with his appealing family in order to demonstrate the triumph of social justice, which was their great struggle of the era. Evidence of that is the striking divergence from the get-go between Mr. Obama’s Hope and Change advertising and his sedulous defense of pervasive racketeering at the highest levels of polity once in office. Otherwise, you must decide whether he was a tool of the giant banks, or a dupe-made-hostage to them, or simply too clueless to understand what was required in 2009 – namely the break-up and reorganization of the banks plus hearty prosecution of their executives for massive swindling (along with reinstatement of the Glass-Steagall Act). I voted for him in 2008, by the way, since the wish-fulfillment motif moved me, and also because of the horrifying McCain-Palin opposition.

In office, then, Mr. Obama quickly proved to be a different breed of porpoise than the voters bargained for. He let the Wall Street privateers run amuck another four years, aided with colossal infusions of conjured-out-of-nothing “money” from the Federal Reserve. He let loose the demons of a high-tech totalitarian “security” state with every sort of electronic surveillance, citizen data-mining, and drone spying that innovation allowed. He stood silent like a Banana Republic store mannequin after the supreme court decided that corporations could buy elections (he could have pushed loudly for legislation or even a constitutional amendment to redefine corporate “personhood”). And of course, he continued to prosecute the absurd war in Afghanistan where, after nine years, US forces are unable to accomplish the only aims of being there: to control the terrain and to moderate the behavior of the people who live there.

Hence, the appalling spectacle of the Democratic convention last week, with its odor of ideological bankruptcy, stale rhetoric, and empty promises. The party seeks only validation of its cherished fantasy: the social justice of reelecting the first black president. And all it really has to offer is cheerleading to that end – with some social justice table-scraps tossed to the lesser totems of social justice politics: women, assorted ethnic minorities, and gays.

Meanwhile, the “advanced nations” of industrial civilization all spiral into coordinated disintegration, especially in the realm where economy meets finance. Economy is about what we actually do to stay alive: make things, trade things, grow things, run things. Finance is supposed to be about maintaining the flows of accumulated wealth to support these things we do – with a modest service charge for the financiers who do the work. But in the great divorce of truth from reality in our time, finance is only about pretending to maintain these “capital” flows. In fact, it has degenerated into a set of looting operations, swindles, frauds, and political dodges, and it is on the verge of blowing up.

There’s a fair chance that global finance (and trade) will blow up this season leading to the US elections. The nations of Europe are stuck in an intractable predicament. The European Union can’t control the fiscal operations (taxing and spending) of its sovereign members, and it only pretends to be able to lend them the money to cover the interest payments on their previous loans. That shuck-and-jive is now headed for a climax. But the situation is not materially different in the USA and Japan. In one way or another, they are bankrupt, too, as are probably most of their commercial banks. China’s banks are certainly a fiasco, since they are government-run, with no independent accounting oversight whatsoever. China does have a big cushion of US Treasury holdings, huge stockpiles of industrial metals and cement, and many new tons of recently-acquired gold. But they are also hostage to the bankrupt West’s lost appetite for “consumer” goods, and tens of millions of laid-off Chinese factory workers could foment political upheaval in a delicate time of regime transition coming later this year.

The antics of the ECB, the US Federal Reserve, and all the other central banks in conjuring ever more money-out-of-nothing draws us toward that event horizon where faith is lost in a faith-based money system. The only question really is whether wealth destruction (deleveraging, debt default) out-paces currency destruction (inflation). My own guess continues to be that wealth destruction wins that contest, with massive unpayable debt sucked into a black hole, and then all the advanced industrial nations waking up one oddly warm morning to find their standards of living destroyed.

As a political matter in the face of all this, the big question is how we will reorganize daily life – the activities of a whole culture – to comport with the reality of a compressive contraction in economic reality. It also includes the shape and content of the consensus we construct to explain to ourselves what is happening. The obvious epic failure of the two major parties in the USA to even begin this necessary work may propel this country into an historic political convulsion to attend the financial implosion. Imagine, for instance, if the failure of international banks leads to the rapid paralysis of trade supply lines and then to empty shelves in American supermarkets.

People complain about “the size and burden of government,” but our problems extend to the size and burden of everything, beginning with the number of human beings now vying to occupy the planet and moving to the size and scale of every activity supporting them. Truthful political leadership would engage in preparing the public for a long “to do” list of necessary tasks – from the return to Main Street economies that will follow the inevitable collapse of WalMart to the reorganization of food production when agri-biz style farming fails from scarcities of cheap oil, phosphates, and capital for revolving loans. Include also the rebuilding of transportation networks not based on cars and airplanes and the painful reconstruction of a monetary and banking system based on the rule of law.

This is the true work of the future: the rebuilding of these systems. All the blather about “jobs” from the presidential convoys is based on looking backward to a way of life that is ending: the age of giant everything, especially corporations. The days of cubicle serfdom are numbered. Useful, gainful work in the decades ahead will be much more about how you fit into your local community. The word “job” may even become obsolete – a curious artifact of the industrial past. Which party is preparing young people for local agriculture and all the value-added activities around it? Which party understands that the national chain-store model of trade is doomed and Main Streets all over America will have to be re-activated? Which party understands that we’re in the twilight of mass motoring and commercial aviation? And what are they doing to prepare for the implications of that?

The two doddering parties want to promise more of what we’ve already got in a world that doesn’t have anymore of that to give. The result is likely to be that we will go through all the noisy motions of the 2012 elections only to find ourselves plunged into a political crisis possibly worse than the Civil War.

Sidebar on How “Smart” We Think We Are

TV commercial seen during the Women’s finals of the US Tennis Open:

Cadillac is bragging that they have replaced the old dashboard knobs and toggles with a “smart” iPad-type control system. Has a car company ever done something so fucking stupid? The whole point of knobs and toggles is that you can keep your eyes on the road while adjusting things by feel. An iPad you actually have to look at to see what you’re tapping on. Expect a colossal death toll from buyers of the latest Cadillacs in the next couple of years. I suppose there’s poetic justice in the automobile age winding down on a note of such supernatural idiocy.

TROUBLE IN SOCK CITY

Hold onto your socks, it’s going to be a bumpy ride. It really isn’t as complicated as the morons and numbskulls in the MSM and government want you to believe. It’s simply the boom and bust cycle playing out as it has done for centuries. The average American is significantly poorer than they were in 2005. Their net worth has plummeted. If they’ve stayed employed, their real wages have declined. Millions have lost their jobs and are either unemployed or under-employed.

Americans buying cheap shit produced in China, using credit, was what made the world go round. Well guess what? When Americans were forced to scale back on buying shit, the rest of the world got kicked in the balls. Anyone who thinks the Chinese economy will keep chugging along without Americans and Europeans buying their socks, toxic dog food and rubber dog shit, is living a dream.

China has hit the proverbial wall at 100 mph. The casualties are many. The government will keep reporting fake economic numbers and the U.S. MSM will dutifully report them with a straight face. This will continue until this sand castle of hope, built on a foundation of socks, crumbles into the hamper of history.

So Solly.

Sock City’s decline may reveal an unravelling in China’s economy

The hosiery business has been good to the entrepreneurs of Datang, who rode out the 2008 crisis and recovered. But now business is slowing again – and experts fear that may presage a hard landing for the whole country

A worker at a sock factory in Yiwu, China. But after years of brisk business, Zhejiang province is now facing an economic slowdown. Photograph: Eugene Hoshiko/AP

The foolish man built his house upon sand; the wise man built his house on a rock. The ambitious entrepreneurs of Datang chose a sturdy nylon and wool foundation. “People always need socks,” points out Xu Leile, whose company clothes the feet of the British and US armies, European hikers and pampered pet dogs.

Thanks to Xu and hundreds more like him, “Sock City” – north-west of Tie Town, east of Sweater Town – epitomised China‘s economic success story. The obscure settlement in eastern Zhejiang province became an export-driven boomtown, producing as much as a third of the world’s sock supply and thriving even through the financial crisis in 2008 and the subsequent global recession.

Last year, Datang made roughly two pairs of socks for every person on earth. Long and short, Argyle or polka-dotted, they cram the stores of the nearby wholesale market. In Xu’s spacious new factory, the shelves are stacked with huge reels of red, blue and orange thread. But ask Xu about the future and he grimaces. “I’m very worried. This year is much worse than 2008-9,” he says.

The biggest of his rivals to have gone under in May – the Anli Sock Group, which produced 60m pairs of socks annually – could prove to be “the Lehman Brothers of Datang”, according to Fan Jianping, chief economist of the State Information Centre.

Failures such as Anli’s and a slew of disappointing data in recent weeks are raising fears far beyond China that a slowdown in the world’s second largest economy is turning into a hard landing. In the face of Europe’s woes and the weak US recovery, Chinese growth has become more important than ever: the ripples are already being felt globally, with commodities analysts blaming tumbling prices on falling demand from China.

The country’s premier, Wen Jiabao, has issued repeated warnings about the economy, saying growth is under pressure and exports need support. Last week’s announcement of approval for infrastructure projects, which some estimate to be worth 1tn yuan (£99bn), appears to be an indication of just how alarmed authorities have become about the largely investment-driven economy.

Until now, they have taken a series of milder measures, such as cutting the reserve ratio requirement and reducing interest rates, mindful of the painful hangover that resulted from the huge 4tn yuan stimulus they adopted to stave off the last crisis. That inflated property prices again and left a legacy of massive local government debt and questionable loans and infrastructure projects.

China’s economy saw second-quarter growth of 7.6% year-on-year: enviable to US or European eyes, but the lowest rate in three years, and the sixth straight quarter of slowing growth. Export growth slid to 1% in July – the lowest rate for three years, bar January, which was skewed by the lunar New Year holiday – and earlier this week, the official factory purchasing managers’ index fell to 49.2 – the first time since November that it had dropped below the 50 barrier separating expansion from contraction.

“We should be very worried,” says Anne Stevenson-Yang, co-founder of Beijing-based J Capital Research. “The economy has been in a hard landing since the fourth quarter of last year, but seems to have been helped by the consumer economy … That’s now down as well.”

Most analysts are more optimistic, at least for now. While growth has fallen from a peak of 11.9% in the first quarter of 2010, when there were concerns about overheating, the decline is far less steep than last time, when it plummeted from a peak of 14.8% in the second quarter of 2007 to a low of 6.6% in early 2009.

But Alistair Thornton of IHS Global Insight warns: “More of the indicators we are looking at are showing strain and weakness. It’s nowhere near what we were looking at four years ago, but nonetheless pretty ugly.

“There are huge stockpiles of coal at Qinhuangdao; steel factories in Hebei are over capacity; in retail, auto dealers have two, three, four months’ more stock than they are used to.”

Cranes still tower over construction sites, but no one is working in them, says Yu Wankun, the sales manager for SANY Excavators in Jiangsu, the neighbouring province to Zhejiang.

“I feel like a blossoming summer has suddenly turned into a dull winter,” he laments. “In 2008, we didn’t feel the crisis at all. This year, we do feel the crisis has really struck. The government’s stimulus created a bubble. But many local governments are in debt now and the central government’s financial support has stopped.”

The knock-on effects hit people hard when exports started falling in May, says Xiao Zhou, boss of another Datang firm. “A lot of sock companies started doing real estate in Jiangsu – they went bust because of the property market, not because of sales,” he says.

Back in the sock factory, Xu says 73 clothing firms have gone under this year, with some leaving behind debts of billions of yuan. Things have not been so bad since 2003, when foreign buyers stayed away because of the Sars crisis. Usually Xu goes to the US once a year; this time, he has made three trips – but one major customer halved its usual $5m order anyway. Sales to civilian customers are down by at least a fifth.

It is a sign of the times that his firm, Huazhong, considers the boom in sales to the Syrian army as a rare bright spot. “Last year they bought 870,000 pairs. This year it’s 960,000 already,” he says. Few might imagine that camouflage or khaki ribbed socks came in so many varieties, but French, Singaporean and Saudi Arabian soldiers have proved exacting customers.

But Datang also has its strengths. Smart entrepreneurs have moved away from piling high and selling cheap to targeting foreigners. Xu decided early on to focus on high-quality products and military sales, which he hoped would prove more stable and more lucrative. Though his company has dabbled in producing woolly hats, lacy tights and dog booties, Xu’s latest target is the medical market, with products such as support stockings. Others in Datang have focused on domestic consumers or sought new markets in rival developing countries.

The rise in Chinese purchases and the increase in trade to the Middle East should also help to offset problems elsewhere, says Hou Zhiping, general manager of the city’s hosiery market.

So far, there is little sign of rising unemployment – admittedly a trailing indicator – which might fuel fears of social unrest. At the labour market in nearby Yiwu, a recruiter for the Xialaite sock company grumbled about the difficulties of finding enough employees.

Geoff Crothall of China Labour Bulletin, a Hong Kong-based group supporting mainland workers, says there have been noticeably more layoffs than last year, especially in Zhejiang and Guangdong, “but nothing like 2008-9, when 20m workers were laid off … I don’t think there’s a huge number of unemployed migrant workers wandering around.”

Recruiters in those provinces had previously complained of severe labour shortages, he points out, and opportunities in migrants’ home provinces have improved: “Recently it was reported that, for the first time, there were more rural labourers from Sichuan working within the province than outside it.”

Beijing’s push to develop inland areas has also had some success, as Crothall points out: while Zhejiang’s economy grew 5.2% in the first half of 2012, down from 12.1% in the same period last year, western areas like Sichuan, Chongqing, Shaanxi and Guizhou all saw rates of above 16%, according to official figures.

But growth is now slowing in those regions, too – and because their economies are so much smaller, they have less effect on the overall situation. “You would have to triple Xinjiang’s economy to have an impact on the national picture … If you can’t fix Guangdong, you can’t fix China,” says Thornton.

Yet, says Patrick Chovanec of Tsinghua University’s School of Economics and Management, the outlook is not uniformly negative: “This is an economic adjustment and, in the long run, will be good for China and the world, but it doesn’t mean it won’t be painful.”

Officials and analysts have long warned that the Chinese economy is unsustainable; that the years of double-digit growth were fuelled by investment and exports, and that rebalancing and reform were desperately needed.

A powerful editorial in Caixin, the country’s most influential business magazine, raised fears that local governments were ignoring the centre’s cautious approach and instead attempting another major stimulus that would crowd out smaller private enterprises, deter competition and increase distortions in the system.

Continuing to pursue high-speed growth, fuelled by government investment, will mean that “growth will fall; discrimination will become pervasive, and rent-seeking and corruption rampant; our society and environment will be pushed to their limits; and development cannot be sustained. The mass protests, riots and environmental disasters we have seen are just some of the consequences of this distorting growth model. They are a warning,” it said.

“If we continue to hanker for economic ‘miracles’, we must be prepared to pay a high price in future.”

Additional research by Cecily Huang and Kathy Gao

SUBPRIME AUTO NATION

Have you heard the news? Auto sales are booming. Total sales for the month of August were 1,285,202 vehicles, according to Autodata Corp, the highest monthly sales figure for any August since 2007, when 1.47 million autos were sold in the United States. Year to date auto sales have totaled 9.7 million and are on track to reach 14.5 million. Between 2006 and 2007, auto sales ranged between 16 million and 18 million. They crashed below 10 million in 2009. The Keynesians running our government have pulled out all the stops to restart this engine of consumer spending. First they wasted $3 billion of taxpayer funds on the Cash for Clunkers debacle. Almost 700,000 perfectly good cars were destroyed in order to keep union workers happy. This Keynesian brain fart distorted the used car market for two years, raising prices for cars needed by the working poor. After that miserable failure, they realized the true secret to selling vehicles is to give them away to anyone that can scratch an X on a loan document, with 0% interest for 60 months, financed by Federal government controlled banking interests. Add in some massive channel stuffing and presto!!! – You’ve got an auto sales boom.

General Motors sales are up 3.7% over 2011. Ford Motors sales are up 6% over 2011. The Obama administration continues to tout their saving of the U.S. auto industry with their bailout in 2009 that saved unions and screwed bondholders. If this strong auto recovery is not an illusion, how do you explain the two charts below? General Motors stock is down 42% since 2011. The highly proclaimed success story called Ford Motors has seen their stock collapse by 50% since 2011. This is surely a sign of tremendous success and anticipation of soaring profits for these bastions of American manufacturing dominance.

This is America, land of the delusional and home of the vain. The appearance of success is more important than actual success. The corporate mainstream media dutifully reports the surge in auto sales is surely a sign the economy is recovering and the consumer has finished deleveraging and is ready to spend again. The government propaganda machine proclaims the surging auto sales are due to their wise and forward thinking policies (like the Chevy Volt). Luckily for them, there are millions of gullible Americans who believe the storyline and are easily convinced that driving a $30,000 new car, financed over seven years, makes them a success. The decades of Bernaysian marketing propaganda has worked its magic on the government educated, math challenged citizenry. There are only two things that matter to the non-thinking auto buyer (renter) – the monthly payment and what the next door neighbor and his coworkers will think. Buying a fuel efficient car they can afford, paying it off in three or four years, and driving it for ten years, while saving the monthly car payment, is what a practical, rational thinking person would do. The fact that only 20% of the 9.7 million vehicles sold this year have been small cars and the average sales price of new cars sold is now $31,000 proves Americans are still living in a delusional fantasyland of cheap gas and monthly payments for eternity.

As gas prices surpass $4 per gallon across the country, somehow 4.7 million of the 9.7 million vehicles sold in 2012 have been pickups, vans, crossovers or SUVs. Three of the top eight selling vehicles are pickups. Luxury vehicle sales are booming, with Mercedes, BMW, Porsche, Land Rover and Audi showing double digit percentage sales gains over 2011. We’ve entered a recession, gas prices are approaching all-time highs, job growth is pitiful, and Americans continue to buy luxury gas guzzlers on credit. This will surely end well.

The average payment on a new car in 2012 is $461. For used cars, the average monthly payment is $346. Today, 77% of new car purchases are financed. About half of all used vehicles involve financing. Of those cars financed, 89% are through a loan vs. 11% with a lease. A critical thinking person might wonder how a country with 4 million less employed people than we had in 2007, median household net worth down 35%, and real wages lower than they were in 2007, could be experiencing an auto boom. The answer is a government/corporate/banker/media effort to funnel taxpayer funds to deadbeats across the land in a fruitless attempt to create a facade of recovery. Our governing elite are convinced that more debt peddled to the masses is the path to recovery for an economy that imploded due to excessive debt peddled to the masses in the first place. Essentially, it comes down to who benefits from the peddling of debt. It isn’t the masses, as they become enslaved in the chains of debt and monthly payments in perpetuity. Debt peddling benefits Wall Street bankers, politicians, and mega-corporations selling crap to the masses.

The storyline being sold to the vegetative dupes (watching Honey Boo Boo) that occupy space in this delusional paradise we call America, by the corporate media, is that consumers have deleveraged and are ready to resume their “normal” pattern of spending money they don’t have on stuff they don’t need. Of course, the facts always seem to get in the way of a good yarn. Consumers have never deleveraged. Consumer credit outstanding is at an all-time high of $2.58 trillion. The decline from $2.55 trillion in 2008 to $2.4 trillion in 2010 was NOT deleveraging. It was the Wall Street Too Big To Fail banks taking a big dump on the American taxpayers. They passed their bad debts to you through TARP, the Federal Reserve buying their toxic “assets”, and ZIRP.

Revolving credit (credit card) debt peaked at just above $1 trillion in 2008 and “declined” to $850 billion during 2010. The media storyline is that you buckled down and paid off your credit cards, therefore depressing consumer spending and creating a recession. Sounds convincing except for the fact that it’s a load of bullshit. The Federal Reserve’s own data proves it to be false. Your friendly Wall Street banks have written off $213 billion of credit card debt since 2008 and passed the bill to the few remaining taxpayers in this country. For the math challenged, this means that consumers have actually INCREASED their credit card debt by $68 billion since 2008. The bad news for our Chinese crap peddling mega-retailers is that the significantly poorer average middle class American household is using their credit cards to pay their property tax bills, IRS bills, and utility bills in order to survive.

Credit Card Charge-off in Dollars 2005 – 2011 — Not Seasonally Adjusted:

Year	Dollar Amount
2011	$46,017,459,671
2010	$75,090,106,350
2009	$83,179,901,000
2008	$53,506,353,600
2007	$38,149,440,000
2006	$32,111,934,400
2005	$40,634,994,400

Year & Quarter	Dollar Amount
2012Q1	$8,772,385,443

The category of debt that barely budged in the 2009 collapse was non-revolving credit. It stayed in the $1.5 trillion range in 2009 and has since surged to over $1.7 trillion in 2012. What could possibly have made this debt skyrocket by $200 billion when the GDP has only grown by 12% over the same time frame? You guessed it – your corporate fascist friends in Washington DC and on Wall Street. Non-revolving debt consists of auto loan debt of $663 billion and student loan debt of approximately $1 trillion. Student loan debt has shot up by $300 billion since 2008. This student loan debt is being distributed, like candy by a pedophile, from the Federal government in an effort to artificially hold down the unemployment rate.

Approximately $500 billion of the student loan debt is held directly by the Federal government, up from $100 billion in 2008. The Feds guarantee the majority of the remaining student loan debt. Can you think of a more subprime borrower than a 40 year old former construction worker getting a liberal arts degree from the University of Phoenix, sitting at his computer in his underwear scratching his balls, and paying with a $10,000 Federal student loan from you? This fraudulent attempt to obscure the true employment situation will end in tears for the borrowers and the American taxpayer. It’s tough to make a loan payment without a job. The student loan bailout is just over the horizon and will cost you at least $300 billion. Delinquencies are already off the charts.

When has offering low interest debt in ample portions to people without jobs, income or assets ever backfired before? The bankers and politicians that control this country seem to be a one-trick pony. They will never admit that debt is the problem and reducing it the solution. The real solution would make them poorer, so their solution is to pour gasoline on the fire with more debt at lower interest rates to more people. The addict will keep injecting more poison into their system until sudden death. The bankers and politicians know we are a car-centric society and appeal to our vanity and poor math skills to keep the game going.

During the first quarter of this year, total U.S. car loans totaled $52.5 billion. That’s 49% higher than the same period in 2009. Also during the first quarter, the average amount financed on new vehicles rose by $589, to $25,995, and for used cars by $411, to $17,050. Furthermore, buyers are stretching out payments for longer terms: The average length of new- and used-vehicle loans jumped a full month during the first three months of this year, to 64 and 59 months, respectively. The surge in auto sales is being completely driven by doling out more loans for a longer time frame to deadbeat borrowers. Subprime auto loans now make up 45% of all car loans and the vast majority of all used car loans. They have even created a category called Deep Subprime. Borrowers classified as “deep subprime” (i.e. those with Vantage scores below 600) account for 10.7% of auto loans. You can also classify them as loans that will never be repaid.

Two thirds of all car sales are for used cars, so the fact that 37% of all new cars are being sold to subprime borrowers is exacerbated by the ridiculous lending practices for used cars. The fine folks at Zero Hedge have provided the outrageous data and a chart that proves beyond a shadow of a doubt what awaits the American taxpayer – another bailout. Zero Hedge has already revealed the GM fake recovery by detailing their channel stuffing over the last two years. Now they’ve dug up more dirt on why car sales are surging. What could possibly go wrong providing loans for more than the value of the asset to people with a history of not paying their debts?

Subprime borrowers received 56.46% of loans on used cars in the quarter, up from 52.70% a year earlier.
The average loan-to-value on new cars was 109.55%
The average used car loan-to-value ratio rose to 126.62%
77% of Subprime Auto Loans are for a period greater than five years

It’s amazing how many cars you can sell when you aren’t worried about getting paid. This is the beauty of a fiat currency, a printing press, and a taxpayer available to pick up the tab after the drunken party gets out of hand. The chart below provides the details of our superhighway to disaster. The percentage of used car loans to prime borrowers is now at an all-time low, while the percentage of loans to subprime borrowers is near all-time highs reached just prior to the 2008 crash. When lenders cared about being paid back in the early 2000’s, they rarely made loans longer than five years. Today, more than 77% of all subprime used car loans are longer than five years and average FICO scores are now well below 600. Just to clarify – if your FICO score is below 600 – YOU ARE A DEADBEAT.

When you start to connect the dots, things that didn’t seem to make sense begin to crystallize. This is all part of the master plan concocted by Bernanke, Geithner, Obama and the Wall Street Shysters. The auto section of my local paper now makes sense. Offers of 7 year financing at 0% interest and monthly lease offers of $150 to $200 for brand new cars now are understandable. The newer model BMWs, Cadillac Escalades, Volvos, and Jaguars I see parked in front of the low income luxury gated townhome community in West Philadelphia now makes sense. A pizza delivery guy driving a new Lexus is now explainable.

The master plan is fairly simple. The Federal Reserve lends money to the Wall Street banks for 0% interest. These banks then turn around and provide credit card debt at 13% interest, new & used car loans to prime borrowers at 5% interest, and new & used car loans to subprime borrowers at 16%. When you can borrow for free, you can take a chance that a significant number of your borrowers will default. Essentially, Ben Bernanke is screwing the prudent savers and senior citizens by paying them 0.15% on their savings in order to subsidize the bankers that destroyed the country so they can make auto loans to the same people who took out the zero percent down interest only no doc mortgage loans in 2005. In addition, Wall Street knows the Bernanke Put is still in place. If and when these subprime loans explode in their faces again, Bennie, Timmy and Obamaney will come to the rescue with your tax dollars. Its heads you lose, tails you lose, again.

The chart below is like a who’s who of TARP recipients. The top 20 auto lenders control half the market. And look at the leader of the pack. Our friends at Ally Bank are the market share leader. You remember Ally Bank – they conveniently changed their name from GMAC (also known as Ditech – biggest subprime mortgage lender) after losing billions and being bailed out by you. They still owe you $11 billion and are 85% owned by the U.S. Treasury. No conflict of interest there. You have the biggest auto lender on earth controlled by the Obama administration. Do you think they have an incentive to make as many loans as humanly possible to help Obama create the illusion of an auto recovery? The only downside is for the American taxpayer when we have to eat billions more in Ally/GMAC losses. This insolvent excuse for a lending institution has been extremely aggressive in the subprime auto lending market and has forced the other wannabes – Wells Fargo, JP Morgan, Capital One and Bank of America – to lower their lending standards. Does this scenario ring a bell?

We’ve become a subprime auto nation, addicted to easy debt, living lives of hope, delusion and minimum monthly payments. Storylines about economic recovery, fraudulent government statistics showing lower unemployment, feel good propaganda from the corporate mainstream media, and a return to easy money debt fueled spending does not constitute a real recovery. Until the bad debt is purged from the system and saving takes precedence over spending, the country will stagger and ultimately fall under the weight of its immense debt. We are lost in a blizzard of lies. This subprime fueled engine of recovery will propel the country into the same canyon of reality we entered in 2008. The crack up boom approaches.