Friday, September 28, 2018

Shock Doctrine 2.0: Nothing Left To Sell

In summary, this week their daughters went under the bus. There will be hell to pay...

Social acrimony is reaching a fevered pitch. The divide between the two Americas could not be more stark this week. One side of America feels sympathy for a gang-raping frat boy. The entire rest of the world is just now realizing that America is captured by entitled frat boys. Nothing will improve until the Banana Republican base wakes up to the fact that they've been voting against their own economic interest for almost forty years straight. This will be their final lesson. Entitled frat boys are not the solution, they are the problem. The base will be shocked to learn that their latest Frat-Boy-in-Chief is not their saviour. Quite the opposite.

I just saw a headline on Zerohedge claiming that "Poverty, Crime, Feces: The Worst Cities In America Are Run By Democrats". Sounds bad. How to explain this?

Here's how to explain it: Almost ALL of America's largest cities vote Democrat:

"Clinton captured the largest metros. She bested Trump with 55 percent compared to 40 percent of the vote in metros with more than one million people, and won eight of the ten largest metros. These metros accounted for more than half the vote and generate two-thirds of America’s economic output."

What this means is that the author of the Zerohedge post is conflating correlation with causation. It's America's dirty little secret that the inner-cities are hell holes of intractable poverty and have been for decades. Only now that the same fate is befalling the rest of the country is it becoming "an issue". 

The author of this disinformation goes on to say that Democratic control has caused the downfall of Baltimore and other once great cities. Here is what the first son of Baltimore had to say about causation:

Baltimore Orioles Chief Operating Officer John P. Angelos:

[M]y greater source of personal concern, outrage and sympathy beyond this particular case is focused neither upon one night’s property damage nor upon the acts, but is focused rather upon the past four-decade period during which an American political elite have shipped middle class and working class jobs away from Baltimore and cities and towns around the U.S. to third-world dictatorships like China and others, plunged tens of millions of good, hard-working Americans into economic devastation, and then followed that action around the nation by diminishing every American’s civil rights protections in order to control an unfairly impoverished population living under an ever-declining standard of living and suffering at the butt end of an ever-more militarized and aggressive surveillance state (emphasis added)."

Interestingly, even Trump and Bannon agree that Globalization carved out the middle class. Which is what Trump said at the U.N. just this week

"The United States lost over 3 million manufacturing jobs, nearly a quarter of all steel jobs, and 60,000 factories after China joined the WTO. And we have racked up $13 trillion in trade deficits over the last two decades."

Manufacturing jobs, millions:

Trump's borrowed tax cut for the rich - "paid for" with higher interest rates and stronger dollar is only making the problem far worse. 

"The good news is that imports are about to collapse"

What has happened to manufacturing in the U.S. at the hands of sociopaths, should have been the canary in the coalmine. Because the fate that met manufacturing is now befalling the remainder of the economy -  the swapping out of high quality jobs for low quality jobs. The use of ever-cheaper capital to automate or otherwise commodify the highest paying jobs. 

Poverty is feeding back as ever-more poverty due to cheap capital being recycled back into non-amortizing investment. Mass commodification of industry, which will leave no profession untouched.

One decade since the Global Financial Crisis and interest rates are still near 5,000 year lows:

At the end of all this of course awaits mass corporate bankruptcy as corporate debt is now at an all time high relative to GDP. The self-delusion of the day is that the cycle never ends and therefore cash flows from the discounted cash flow model will remain high in perpetuity. 

Sadly there is no such thing as perpetuity in reality, which means that every ten years or so, "forever" morphs back into, "aw fuck, not this again".

Corporate debt, % of GDP:

In the meantime, just more wandering in Death Valley. Making excuses for rampant greed, circus clowns, and frat boys.