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News For Thought Employers are in no hurry to fill job openings. Accordingto The Wall Street Journal: "Companies lack confidence about theoutlook for consumer demand, they're not sure what the government willdo with taxes and regulation, and they want to keep squeezing as muchoutput from their current workers as they can. They also feel they haveplenty of time to pick the best candidates." Allegations of foreign money raise the heat of theNovember election. PresidentObama is accusing the Republicans of using foreign money to financecampaignadvertising produced by groups that, by law, don't have to disclose thesourceof their donations. According to The New York Times, among thePresident's targetsare the U.S. Chamber of Commerce and groups that have been "helped" byformerBush aides Kark Rove and Ed Gillespie. The Times reported: "The chamberis hardlythe only organization playing a role in the campaign that hasinternational affiliationsand gets money from foreign institutions. Among others are groups onthe politicalleft like the A.F.L.-C.I.O. and the Sierra Club. The law bars them fromusingforeign money for domestic political activity." Obama alleges Republicans are financing campaignswith foreign money. Accordingto The Wall Street Journal: "President Obama blasted oppositionfund-raisersat a campaign rally, charging that they solicited foreign donations andpumpedthe millions of dollars they received into congressional races to helpRepublicans." U.S. to increase currency exchange pressure on China.Accordingto The Wall Street Journal: "The U.S. will try to intensify pressurefurtheron China over its exchange-rate policy after a weekend meeting of theIMF failedto produce an agreement on international currency movements." The fearof a currencywar, and its potential unintended consequences, such as tariffs is acentralpoint in the potential future for the global economy, and is a fearshared byother countries. According to The Journal: "The U.S., European nationsand anumber of emerging markets complain that China is deliberatelyundervaluing itsyuan to aid its exporters. To compete, Japan, South Korea, Brazil andothershave taken measures to beat down the value of their currencies as well,leadingto fears these efforts may presage a trade war." |
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| The world is at the breaking point asspecial interests, including individual populations are focusing onself interest while the limited amounts of resources limit the amountof gain potential for anyone particular group. In the 1970s, this scribe, wistfully remembers listening to the radio.This wasjust your basic small transistor with what is now a rudimentary, nondigital,monophone earphone. Then, the simple pleasure was the expectation ofwonderingwhat song would come next. And what made it more magical was thevariety of thefare on any Top 40 station at the time. But as things got more sophisticated, FM came along. And with it camethe consultants,and the specialized playlists. As radio stations became focused onmaking moremoney, so did the playlists become narrow, both in the genre, and inthe numberof artists and the songs by each artist that would be played. What wasonce anadvance, the cleaner, stereophonic sound of FM, became a hindrance. While "Classic Rock" was once an exciting novelty, it's now become abother.How many times can we listen to the same five tunes by The DoobieBrothers, orDeep Purple? How many more spins can "Sweet Home Alabama" get? And howmany localdisc jockeys have disappeared forever as the syndicated morning showshave takenover the airwaves? So satellite radio came along. Hundreds of channels, each onecustomized, andsurgically fragmented to cater to each special niche of listener. Nowwe have "Watercolors" forcontemporary Jazz. And we have "Hair Nation" for melodic heavy metal,while "TheBoneyard" spins "classic" metal, and "Real Jazz" for the true Jazzbuff. But,after a few months, each station seems to have succumbed to the samemalady thatthe local FM stations fell prey to, the consultants, the playlists, andthe ensuingboredom for the listener. And all of the plugs for each station's"Facebook" pagesdon't do anything to ameliorate the obvious. If we don't like whatthey're playing,why do we want to go to their web page and waste time there getting adifferentangle from the consultants? Satellite radio is heading down the samepath asAM and FM traveled, listener boredom. What does this have to do with politics and money, the elixir fromwhich these pages extract their daily nourishments? Think about it. Inthe old days, candidates stood for something; low taxes, high taxes,national defense, aiding the poor, and so on. You didn't have to agreewith them, but you knew where they stood on things. Now, theconsultants have taken over, and all the candidates want is to win, toget into office, and to plug into the never ending cycle of being inoffice, staying in office, or the equally attractive alternative ifthey lose,get a job as a big lobbyist and cash in on their time in office. Sothey're coachedabout what to say, how to dress, and how to portray themselves duringtheir publicmoments. And at the end of the day, the voter doesn't really know whatthey'regetting, except, the same five sound bytes from any of the candidates,just likethe same five FM "Classic Rock" tunes. And how has this brought us to the brink? Well, it's the, to borrowMuhammadEl-Erian's latest word, "contaminated" status of the whole process inWashington,and its interactions with the rest of the equally "contaminated" globalgovernmentsthat has brought the world to its current status. How have we arrived at the current moment? The long answer is thattoday's disputesare just the continuation of the disputes that have been progressingover thelast several thousand years, as people fight for power, money, andglory. Butfor now let's keep it contemporary, so we'll just focus on the lastcentury orso. World War I begot World War II, which got us Korea, Vietnam, and thecold war.Russia went into Afghanistan, and the CIA spawned Al-Qaeda. Al-Qaedafelt betrayedwhen the CIA left them stranded in Afghanistan, and we got 9/11. Afterthan thingsaccelerated. Somewhere in between we got two Gulf Wars, lots of peoplegot older,started sucking up Medicare resources, and deficits got bigger. So called "smart guys" on Wall Street and their cronies at the mortgagecompaniesdecided that they could sell expensive houses to people with no money,who werefoolish enough to believe the tripe that they were peddled, and we gota housingbubble. Some really smart guys figured out the game and shorted theB.S. backedpaper that was known as a C.D.O., and when enough of the faux mortgagesthatwere peddled as real mortgages went officially bust, they collectedtheir winnings. Real money evaporated from circulation and went into the pockets of thesmartguys who shorted the air mortgages housed in the B.S. paper structuresknownas C.D.O.s, and the fools on the wrong side of the trade had to sellreal assetsto pay the smart guys who shorted the greatest scam of all time. What's left is that the U.S. government now has all, or much of theB.S. C.D.O.'s,and they're housing them at Fannie Mae, and Freddie Mac, where they arenow worthless than the nothing that they were worth when they were created andpeddledon the morons that bought them. Except now, they are being financed bytaxpayermoney, with no hope of ever being worth anything. And the government,nor anyoneelse seems to be telling the public that this is what a "toxic asset"is, orwhere these pieces of fiction are sitting, collecting dust, and suckingup taxpayermoney. Now that we know how we got here, what does this have to do with thefragmentationof the world's political and financial system? First, the U.S. was seen as a place where this kind of stuff couldn'tgo on,or maybe as a place where if it went on, and you were closelyassociated withthe right group, the bad things wouldn't happen to you. Yet, as itturned out,the hoax was perpetrated on the Swiss, the Germans, the French, theBritish,and the Chinese, as well as many others who have not been named, atleast asof yet. The repercussions of the world's greatest hoax, the subprime mortgage,and thesubsequent bust, has in fact become the tipping point of modernhistory. TheU.S. is now personna non grata. Not only did we invade foreign landsand causewars, the U.s. actually hurt people's pocket books by perpertrating agreat hoaxthat made trillions of dollars in Yen, Yuan, and Euros in valueevaporate alongwith dollars. To some people, losing money is worse than the horrors of war. Andthose arethe guys that got hurt the worse by the subprime mortgage bust, thepeople whohate nothing more than losing money. That the average Joe's 401-k gotdecimatedwhen the big money guys had to sell real stocks and real houses to paythe smartguys who bet correctly, isn't the issue to the big money guys, althoughit'sthis collateral damage that is being felt the most by average people. So the big money, private and governmental, via sovereign funds, isstartingto come up with a coordinated, either by intent or default, strategy,the simultaneousdevaluation of multiple global currencies, specifically, the Yuan, theYen,and by the effect of the market responding to the notion of the Fed'squalitativeeasing, the dollar. In other words, currencies are the new weapons. By devaluing theircurrencies,countries are hoping to export their way out of their current problems.Except,there is one problem with that strategy. Eventually, it will causefriction.And that's when the stuff will hit the fan. The Great Depression, theprecursonto World War II was preceded by the Smoot-Hawley tariff, and theensuing tradewar. That's where the current signs are pointing, another set oftariffs, andtrade wars that may lead to something worse. Conclusion The fragmentation of radio in the 1970s led to the awfully boring radioof today.The awful radio of today has made it impossible record companies to bepatient,and to allow enough time for artists to develop their talents to theirfullest.Thus, we get manufactured music and stars like Lady Gaga, with drummachines,canned keyboards and recycled lyrics passing as music. That's why record companies are going bust on a regular basis, and whyonly afew artists can fill large halls in this day and age. The musicbusiness is abust. Just like the relationships between governments and theirconstituents,and the relationships between countries in the world are going bust.Fragmentationis nothing more than the symptom of a broader disease, in the musicbusinessand in the world. And the disease is self interest, at the cost of everything else.That's whypeople cheat on a regular basis, and why the culture of "if I tell youa lieand you believe it, it's true" is flourishing, much to the chagrin ofthe restof us who are living with the consequences. What does this have to do with your pocketbook and your investments?Everything,especially as the election season heats up and the claims of one sideversusthe other become more stridant and the discord rises to a fever pitch.For thoseon the outside, especially those who are waging currencies as a weapon,as theU.S. nears its election point, so could the rest of the world go beyondits inflectionpoint. |
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