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Economics

Time to Unload My Portfolio!

More economics satires & musings by Luke Hauser

– in process – email Luke Hauser with ideas

I woke up this morning and realized – it’s time to unload my stock portfolio!

As my mind cleared, I recalled that I didn’t actually have a portfolio, or any stocks at all.

I don’t even have a 401K. My retirement plan is the 401EZ – it should cover me, as long as I don’t stop working after I retire.

Just the same – it’s time to sell stocks. A Dow of 30,000? It was 20,000 a year ago, and that was padded.

Take a look around – do you see 50% economic growth since last Spring? I see low interest rates, a huge tax cut for the rich, a housing bubble in major markets…. but not much economic growth.

But What About Uber?

Sorry, Uber is not “economic growth” – at best it’s a lateral movement that provides a slight improvement in taxi services. Whoop tee do.

What else is booming? Tourism? Destroying the environment in search of more fossil fuels? New advances in robotic senior care?

OK, I grant you those – but a 50% boost to the entire economy? I’m skeptical.

It’s a bubble. And while I can’t name the date it will burst, it is not going to inflate much further.

Let’s look back at the last bubble – which peaked much lower than this one.

The 2008 Crash Revisited

In the mid-2000s, the booming stock market – then passing peaks of 12, 13, and even 14,000 – was widely called “irrational exuberance,” even by the former Fed chairman.

No one believed the economy had grown that much, nor that housing prices should have doubled in a decade. The word bubble was widely bandied about.

Sure enough, the markets crashed.

In 2008, the Dow crashed to about 8000, and took until 2013 to get back to 14,000.

What brought the markets (housing and stocks in particular) back was not actual economic growth, but microscopic interest rates (.25 at one point in the US, which had a past average of around 4-5% in non-inflationary periods). Nearly-free money was hurled around, and lacking productive investments (more on this in another post) the money basically re-inflated stock and housing bubbles.

As I write, the Dow is over 29,000 – double the peak of just a few years ago.

Ie – double the peak that crashed hard in 2008.

Amazing What Cheap Money Can Do

Why? Cheap money. Low interest rates, big bonuses paid to the stock-buying classes, and most recently an absurdly unnecessary tax cut that poured billions more into the pockets of stock-buyers.

To no one’s surprise, the market bubble has inflated to new “irrational” heights.

But now, interest rates are as low as they can go (negative rates would destroy savings and retirement funds – a political non-starter unless we’re in a severe depression).

The tax cut will continue to pour money into the pockets of the rich – but the effect on the market will be to sustain current prices, not increase them.

The current peak will be almost impossible to surpass.

Sensing the peak, speculators will look for more lucrative “investments.” They’ll be selling – so whatever new cheap money comes into stocks, the speculators will balance by selling. The peak has been reached.

Sooner or later, stagnant or rising interest rates and declining effects of the tax cut will result in an overall slowdown. Recessions do happen, you know.

At that point, the downward spiral begins – people sell stocks because they need money to cover their debts. With increased stocks for sale, market prices go lower, so people have to sell more stocks to get the same money. And so on.

That moment is fast approaching. It’s been 12 years since the 2008 crash. That’s one of the longer stretches between crashes since 1900.

I’d say – prepare for hard times.

– in process – email Luke Hauser with ideas

More economics satires & musings by Luke Hauser

Economics

Economic Musings

Books & Other Stuff By Luke Hauser – no economics!!

Short reflections by Luke Hauser

Beware the Debt Zombies

Recessions Aren’t a Bug – They’re a Feature!

Slashed by the Debt Scissors – Low Fed Rates vs Government Debt

Time to Unload My Portfolio – oops, I forgot to get one!

Marx’s Capital – now an audiobook (short review)

Economics Satires & Miscellany

ToiletShare – my latest tech startup!

Eat4U – tech startup seeks funding!

Online Underwear Ads – Was It Mom?

HelloFresh Death Watch – farewell to a debt zombie

Youtubes Etc

Ponzi Scheme Documentary – meet Mr Ponzi!

Bernie Madoff’s scam – a modern Ponzi scheme

US Auto Industry – evolution of an industry (great visuals!)

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Culture

Brexit – Trashing 200 Years of British Strategy

Brexit-depositphotos-copyrightfree

What exactly is the strategic thinking behind Brexit? Not the emotions or the economics, but the geopolitical strategy?

Consider – Britain fought several world wars, beginning with the French Revolution, to prevent continental Europe from uniting against it. WWI and WWII continued the strategy – break up the continental bloc.

Whether it was the French under Napoleon or the Germans under the Kaiser or Hitler, the strategy remained the same – no sacrifice of life or wealth was too great to assure that Britain would never face a united Europe.

Indeed, Britain fancied itself the arbiter of the continent, able to throw its weight in one direction or another to prevent a power bloc from developing.

A Whimper and a Whine

Now, in 2020, Britain with a whimper and a whine hands the keys to the continent to Germany and France – England’s arch-enemies from 1700 to 1950.

Has the global balance of power so changed that a small island nation is best to go it alone while continental Europe’s economic and political power grows unchecked on its border?

Or has the decrepit British ruling class, bereft of its beloved empire, simply turned in to gaze upon itself as it fades into oblivion?

Demographic postscript – the voting on Brexit was strongly age-skewed. The young said no, the old farts said yes.

Safe to say, the decision will be eventually reversed, and this generation of Brexiteers will be scorned forever after.

Best source of Brexit and European news in English – the UK Guardian.

UK Edition – theguardian.com/uk

US Edition – theguardian.com/us

Image: Deposit Photos

activism, Immigration

Ma Nature Says No to The Wall!

BorderWall-Fall-TopTenNews

Mother Nature dismantles Trump’s wall – perfectly illustrating why Direct Action author Luke Hauser has long espoused scrapping the whole stupid idea of a wall and instead building a dome.

From the UK Guardian – the finest English language news-site on the interweb:

“A section of Donald Trump’s much-vaunted border wall between the United States and Mexico has blown over in high winds, US border patrol officers have been reported as saying.

“The steel panels, more than nine metres (30ft) high, began to lean at a sharp angle on the border between the Californian town of Calexico and Mexicali in Mexico amid gusts on Wednesday.

“The section of wall was under construction at the time, with concrete anchors being put in place. But the strong winds blew the panels over onto the Mexican side of the border before the concrete had cured, according to reports.”

PhotoTop Ten News

Also – Luke Hauser argues for scrapping the wall and building a dome

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Economics

Beware the Debt Zombies

More economics satires & musings by Luke Hauser

Zombie-ClipArtLibrary-Free

Debt zombie – a corporation which can only function by continuing to borrow money.

Debt is a part of corporate finance. Even the most successful companies are constantly manipulating debt vs income to maximize return.

If I can invest money and get a 10% return (say, during a stock or housing bubble), why not borrow all I can at 5%?

Basically, why not gouge your neighbor for all you can? In America, that counts as good business sense.

(I believe Jesus had a rather different opinion on this matter, but that’s a topic for another article.)

For these businesses, when hard times hit, they have to tighten their belts. Maybe they have to repay debt. People are laid off.

But they survive.

Ponzi Turns Green

Debt Zombies have a different balance sheet. For Uber, Lyft, Pelaton, Spotify – and possibly for the secretive Amazon, Google, and Facebook (none of which pays a dividend on its inflated stock) – debt is not simply good finance.

It’s a lifeline.

Charles Ponzi must be green with envy. Or mould. Or maybe both.

Ponzi actually had to convince investors that he had a money-making scheme (by buying US postal coupons in Italy and shipping them back to the US for cash-in, producing a small net profit on each transaction).

The scheme was probably unprofitable once you factored in labor, and in any case Ponzi simply lied about the transactions. Promising huge dividends, he paid early investors with money obtained from later investors, giving his name to the classic sucker’s game, the Ponzi Scheme.

Ponzi Scheme Documentary – Youtube

Uber and its ilk go Ponzi one better – they actually have no business plan at all except “be the biggest and the money will roll in.”

So Much For That Plan

Spotify is the biggest streaming service – and still hemorrhaging money. So much for that plan.

Uber jumps from rides to eats to on-demand house cleaning (really!), losing money on every one.

Lyft cries out: “We lose less than Uber!!”

And Pelaton, raising billions for what is at best a minor niche product, digs its own grave with the most ineptly patriarchal ad campaign of the decade.

The bottom line – not one of these tech giants could function without massive infusions of new credit.

The Day of Reckoning

In Summer 2008, the credit markets froze up. Loans became nearly impossible to obtain even for solvent companies.

Imagine that scenario today. A dozen top tech companies would be unable to meet payroll.

Employee loyalty will be put to a severe test. Techies with huge condo mortgages will have to jump ship.

San Francisco, for 20 years a gold-rush cesspool, will become a ghost town – tons of housing – but no jobs.

No Bailout This Time

In 2008, central banks around the West bundled “rescue” packages to bail out companies like Wells Fargo and Bank of America, which teetered on the edge of collapse due to irresponsible home loans.

Prime rates were cut. Billions of dollars were pumped into the banks at cut-rates.

The massive new credit slowly did the job, and by 2011 the housing market and stock market were reviving.

(As for the actual economy – flat-lined since the 1970s – that’s a different matter.)

So why can’t we just do it again?

Easy – because the Fed (under pressure from Trump) has already cut rates below 2% to pump up the current stock bubble.

Trump’s tax cut pumped billions into corporate treasuries – most of which has simply been poured into stock buy-backs that mainly benefit about 5% of Americans.

Basically, we’ve used up most of our silver bullets during a bubble.

When the crash comes this time – and it will, as I explain in a separate post – there won’t be many tools left to cope.

Expect to hear talk of the benefits of negative interest rates (a last-ditch effort that has never done more than keep a flaccid economy afloat – cf Japan since 1990).

And expect a major bout of inflation in the near future. It’s impossible to pump so much “cash” into completely non-productive sinkholes without producing inflation.

Capital Bids Adieu to the Zombies

As far as prevention, forget it. All the Trump/Fed cuts are doing is delaying the inevitable.

Capitalist recessions are not avoidable. They are not even a problem for the larger system. They’re a cleansing mechanism – the way the system wipes away moribund and redundant businesses. (See Recession link below for more.)

The global system has been teetering on the edge a year or more. China has been in a slump for two years. Europe is staggering to realign. Russia is a corrupt , decadent police state. India and Brazil, for all their efforts, aren’t going to make up the difference.

Capitalism in its cyclical splendor will soon wipe the debt zombies away. One or two might pick up the pieces and slowly become viable. Some (like Spotify) will be bought by bigger players.

Most will become punchlines of depressing jokes – “Remember when investors poured billions into subscription exercycles?”

What Do We Do?

We can’t prevent this crash. Nor can we prevent the knock-on effects it will have on millions of working people, who will lose jobs and income as the economy contracts.

What we can do is prepare for a major recession.

Prepare to live more modestly. Prepare to help one another. Prepare to value people more than possessions.

Prepare to ride your exercycle without a subscription.

Prepare to take back our cities. Prepare to squat vacant housing. Prepare to make cities a place we live, not the plaything of speculators.

Let’s go further – imagine a city with no cars – let alone robot-driven Uberlyfts.

There may actually be an upside to all of this…

Image: ClipArt Library.

Recessions Aren’t a Bug – They’re a Feature

More economics satires & musings by Luke Hauser

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Culture, Music, Video

Heilung – Intriguing and a Bit Disturbing

Heilung

Image: Wikimedia Commons

What do you do when music is intriguing, but the message and imagery are somewhat repulsive? When the visuals are fascinating, but you come away a bit queasy?

No, I’m not talking gangsta rap, although the same issue has occasionally been known to arise (cf Cardi B, my current favorite vocalist…)

I recently watched some videos by a unique ensemble from Northern Europe – Heilung. The band re-imagines prehistoric music, along with a heaping helping of Wagner-cum-Las Vegas grandiosity.

Click here for a compilation video

I was intrigued and amused (not that their videos and music betray the slightest humor or irony).

But after a while it got disturbing.

Stone-Age Techno?

The band re-visions what Stone and Bronze Age musical/ritual performances might have sounded and looked like. Using only materials that would have been available to our ancestors (along with microphones, pickups, etc), they “amplify” sounds from long ago.

Apparently our beloved forebears were into drony voices, slapping bones together, and pounding on anything else they came across. No one “plays” anything – the verb “to play” in all of its senses would be utterly out of place at a Heilung show.

The mix is undeniably engaging, and pushes “trance” music into a new zone – kinda like stone-age down-tempo house. I predict every Pagan band will soon have a veiled female vocalist wailing and banging bones together.

When the vocalists get going in polyrhythmic interplay, all the while pounding on big frame drums, the energy is incredible.

Militarism and Misogyny?

Yet I came away disturbed at an overall tone and imagery that ooze militarism and misogyny without any sense of implicit critique or even awareness.

The band disclaims any political intent or message. But when your performance mimics Wagnerian imagery last idolized by fascists, and you end the night with a bunch of spear-bearing warriors “dancing” around the stage – you might want to make just a mite bit clearer where your true sympathies lie.

Click here for the big spear-waving ending

The on-stage visuals are striking, and their videographer does a great job with angles and close-ups. There’s much pounding, yelling, and pulling of harsh faces.

The male voices are distant ancestors of today’s death-metal guttural groaners, and take their jobs very seriously. The one female vocalist is veiled and unmoving, as if stoically holding all of the pain and mourning of the male ensemble.

Imagery and Messaging

The band would surely deny any connection to fascism or intent to appeal to such elements. Here’s their wikipedia blurb, probably written by their agent:

“Heilung is an experimental folk band made up of members from Denmark, Norway and Germany. Their music is based on texts and runic inscriptions from Germanic peoples of the Bronze Age, Iron Age and Viking Age. Heilung describe their music as “amplified history from early medieval northern Europe”. Their music is usually about Norse deities, jǫtnar, and valkyries. ‘Heilung’ is a German word meaning “healing” in English.”

To pick a nit – last I heard, no scholar believes that runes can be read, pronounced, or that we have access to any ancient tradition of meaning. Modern runic divination is based on intuitive interpretation – well and good, but a flimsy basis for reconstructing lost languages and cultures.

To pick a further nit – is it my imagination, or does the band’s name carry a distinct echo of the salutation used by an infamous political movement of the last century when addressing their Great Leader?

Just askin’.

Male Aggressiveness and Female Passivity

At a broader level, this “reconstruction” of ancestral music and ritual suggests unremitting male aggressiveness accompanied by blindfolded, immobile women.

You can see where someone might read a bit of violence and misogyny into this.

Clearly the manufacturers of Hellblade, a poorly-animated adventure/fight videogame built around incessant threats to the physical well-being of a young woman, felt that the music was a perfect fit for their franchise.

Forget Them?

Is Heilung hopeless? Hard to say. The music is intriguing. Maybe what we’re seeing is just a warm-up for an extended Las Vegas run.

Whatever their goal, they are promoting dangerously ambiguous cultural imagery with no evident awareness of its history or implications.

At the least, I’d like to see some hint that Heilung is aware that our forebears had a sense of humor, that they interacted in ways other than growling and pounding, and that the goal of their rituals might not invariably have been to empower warriors.

Just a suggestion. Give them a look/listen.

Click here for a compilation video

Messianic Addendum

The lead singer apparently has a bit of a messiah complex – he reports that the band’s performances have resulted in numerous miraculous healings!

Messiah Complex Video

Sorry to laugh, folks, but this is a bit distasteful. Music can be healing – but performers are not messiahs.

Nuff said.

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Culture, Economics, Satires

ToiletShare – New Tech Start-Up!

Toilet-HighTech-ToykoWeekender

To all venture capitalists and others with too much money on their hands:

My company is called ToiletShare – we sublet time-share toilets to techies. After all, you can’t “function” without toilets!

Our innovative, cutting edge, high tech idea is – most of the time, toilets are sitting unoccupied. What if instead of paying for toilet-time you don’t use, you simply paid for a block of toilet time that you and your employees could use at your discretion?

ToiletShare maintains a worker-friendly environment, with quality reading material and relaxing muzak.

Bonus – ToiletShare monitors all toilet-related activity and provides a complete monthly report of employee toilet usage.

Can we have $5 billion for starts?

Photo – Tokyo Weekender

More economics satires & musings by Luke Hauser

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