You know you've crossed into wonderland when both government and corporations say everything is fine, but behind closed doors, the exact opposite seems to be occurring. Before I get into some very bad news about the economy (like I have anything good to say lately), let me call out Ted Cruz for the lying douchebag he is when he claimed yesterday that democrats want to end free speech and things like SNL will disappear if Citizen's United is overturned. First off, free speech is NOT under attack, just rich people buying our politicians which has turned our democracy into oligarchy. Money does not equal free speech and I wish assclowns like Captain Fuckmunch here would shut the hell up. By the way anyone who voted for Cruz should kill themselves for being awful human beings.
Now if I some famously rich person, I would have to take the inevitable walk of shame and apologize for the above comment. As I have no advertisers, and make no money off this whatsoever (although anyone out there can feel free to donate to my PayPal account, not that more than one person ever has), I don't care what the easily offended out there think. The head of the Hawks Basketball team found that out when he published a non-racist e-mail that was more about marketing to white people who were not coming to games. This was because Southern white people might not feel comfortable in a room filled with black people, and considering the many attacks of white people that are happening with greater frequency, can you really blame them? If I replaced white with black in his email, no one would complain so why is it racist to want more white people at your games, who by the very economic reality, have more money than black people? When has it become racist for your company to make money? This PC garbage has officially gotten out of hand now.
But back to economics, there are more troubling signs ahead, beginning with the under-reported story about Scotland seeking independence from the UK.
This is from the Telegraph.com
Barclays, Deutsche Bank, Societe Generale, JP Morgan, RBC Capital Markets and Credit Suisse all made dire predictions about the country’s finances as they warned clients of the increased risk of investing in Britain in the event of a Yes vote.
One investment group predicted that Britain’s growth will be almost a percentage point lower next year if Scotland votes for independence. Axa Investment Managers said GDP would grow less than 2 per cent, compared with its earlier forecast of 2.7 per cent.
Mark Carney, the Governor of the Bank of England, said that an independent Scotland would not be able to keep the pound because it would be “incompatible with sovereignty”.
Senior Conservative MPs warned of “economic catastrophe” across Britain within days of a vote for independence.
In other words, we have yet another indicator that smaller is not always better. Everyone wants to secede from everything lately, with even states like California crying about wanting to be divided into six new states, which would screw things up just like Scotland. No one has any idea about anything lately. They just want to do it, consequences by damned.
If Scotland does vote for their sovereignty, it may crash their economy, the British economy and possibly the EU. This is a prime example of what is called the law of unintended consequences. Just because you are doing something that sounds great on paper, does not mean it will work in a real world environment.
And then there is the FED making yet another bone headed move that defies explanation. Yesterday, the Federal Reserve Board of Governors met together with the FDIC and the Office of the Comptroller of the Currency, and came up with new rules about bank liquidity that are beyond stupid.
This is from Wall Street on Parade:
The Federal regulators adopted a new rule that requires the country’s largest banks – those with $250 billion or more in total assets – to hold an increased level of newly defined “high quality liquid assets” (HQLA) in order to meet a potential run on the bank during a credit crisis. In addition to U.S. Treasury securities and other instruments backed by the full faith and credit of the U.S. government (agency debt), the regulators have included some dubious instruments while shunning others with a higher safety profile.
Bizarrely, the Fed and its regulatory siblings included investment grade corporate bonds, the majority of which do not trade on an exchange, and more stunningly, stocks in the Russell 1000, as meeting the definition of high quality liquid assets, while excluding all municipal bonds – even general obligation municipal bonds from states with a far higher credit standing and safety profile than BBB-rated corporate bonds.
This, rightfully, has state treasurers in an uproar. The five largest Wall Street banks control the majority of deposits in the country. By disqualifying municipal bonds from the category of liquid assets, the biggest banks are likely to trim back their holdings in munis which could raise the cost or limit the ability for states, counties, cities and school districts to issue muni bonds to build schools, roads, bridges and other infrastructure needs. This is a particularly strange position for a Fed that is worried about subpar economic growth.
That the Fed and its regulatory cohorts have to resort to this implausible plan – which crimps the ability of states and localities to raise essential funds to operate – in a strained effort to pretend that they’ve found a means of avoiding another massive bailout of Wall Street in a crisis, is just further proof that the only way to seriously deal with too-big-to-fail banks is to restore the Glass-Steagall Act and break up these complex creatures before they strike again.
So instead of increasing money to largely strapped communities, the government went the other way and took more money away. WTF? This is what we get from both sides: corruption, bad ideas and money flowing upward not down. All Republicans feel this way and 80% of the democrats. Vote come November and get rid of the Republican strangle hold on the House, and then turn around and demand more from democrats. If they won't listen, it's two short years to 2016 and the Presidency will be forced to contend with a voting block sick of the status quo. Or you can sit home, do nothing and bitch about why everything sucks. Your choice America and time is running out. If we do nothing, the economy is going to collapse and if you think things are bad now, just wait and see what a world without money is like. Think Mad Max on Steroids. You have been warned.