4/5/11…chopping…chipping? away

Bloomberg Top Stories:

*China Raises Interest Rates Quarter-Point in Fourth Step to Curb Inflation

*Google Said to Be Possible Target of Antitrust Probe After ITA Acquisition

*Portugal Bonds Fall, Euro Weakens on Bailout Concern; U.S. Futures Decline

*Portugal’s Long-Term Credit Rating Is Lowered One Level to Baa1 by Moody’s – that’s all???

*Portugal Surpasses Ireland as Default Risk on rating Cut – why trust rating agencies???

*Siemens Finance Chief Says Growth Will ’Cool Down’ in Second Half of Year!

*Arbitrage-fueled Rally Spurred by Banorte’s Purchase of Ixe

*U.S. to Spend $2 Billion to Tempt Sanofi, Sigma to Build Vaccine Factories – Tempt? Bribe?

*Libyan Rebels Push Forward in Center of Country, Preparing to Export Crude

*Radiation Evacuees Left Guessing by Information Blackout in Japan Shelters

Monday’s dismal volume was a new low for the year at 770 million shares – that’s 350 million BELOW the already low 12-month average, and below 1 billion for 9 of the last 10 sessions. Over the past 11 sessions volume has now averaged just 876 million shares – 300 million BELOW average! But that didn’t stop there being 499 new 52 week highs and just 43 new lows on advance/declines and breadth that were barely positive. The major indices were mixed and little changed..

Volatility (VIX) was little changed closing at a  low 17.50 + .10.

Overnight, European equities are weak (down about 0.4%), along with Japan, -1.1%.  Hang Seng closed; Korean Kospi +0.7%, Indian SENSEX -0.1%. Futures are weaker ahead of the open: DOW -27; SPX -5; NDQ -16. U.S. Bonds slightly higher in the long end with the 10 year +3.32 to 3.41% and the long bond 4.46% +1/4.

Gold is little changed: $1436.00 +$3.00;  Crude is $108.11 –.37. Dollar about even.

TB’s Quote of the Day: “Severed from any national allegiance of family ties by microchip-based gadgets that will enable individuals to carry out for themselves manyh of the functions of health, education, and security, the consumer-citizens of the world’s privileged regions will become ‘rich’ nomads.” – Jacques Attali in Millenium: Winners and Losers in the Next World Order – published in 1991! Attali was Mitterand’s right hand man and despite forecasting class warfare when appointed head of the European Bank for Reconstruction and Development after the fall of the Soviet Union, he did as the rich he wrote of. Built an edifice with expensive artwork and marble floors and was relieved as during the first two years they made no loans to the former soviet bloc.

…yesterday TB talked about the three women who if they hadn’t been silenced by Wall Street’s powerful lobby and the bought and paid for Congress not might, but WOULD have prevented the financial crisis that nearly destroyed us…and still might.

The GOP has decided to solve the budget crisis before we are even out of the financial crisis…based on hiring and consumption of most goods and the fact that food and energy are sapping disposable incomes while wages have barely moved…except for the financial sector and CEO’s of course.

But what are they proposing to cut? Trillions over the next three decades. Wait, we have seen this before with their first Contract of America (broken), and by whom? The Dems? No by a greedy don’t tax and spend GOP controlled Congress. They would have us believe also that the problem with the deficit now was caused by spending by the Dem controlled Congress when most of the increase was in aid to the financial sector passed under the Bush administration in an almost bi-partisan manner. TB says almost because Congress hasn’t been bi-partisan on anything since Katrina.

Let’s look at some of the cuts with TB’s thoughts on them:

Treasury Department: $675 million – yet the GOP won’t let them stop making pennies!

IRS – $593 million – good idea, less money for audits for the wealthy…when the IRS has an obsolete computer system that is decades old

State and Local government aid to law enforcement – $256 million – good idea who cares about crime, right?

International Food Aid Grants – $544 million – that will help us be viewed as humanitarian, right?

Clean water/drinking water state fund – $950 million – who needs pure water

CDC – $755 million…wait for the next outbreak of disease…or act of terrorism!

Energy efficeincy and renewal – $819 million – what about that big NE blackout when we saw how vulnerable and outdated the power grid was…who cares?

National Institute of Standards – 865 million – who needs that…right?

NOAA – $336 million – wait, don’t they warn of hurricanes and tsunami’s? who cares?

FBI – $74 million – again no need for law enforcement

COPS – $600 million – a program that has helped educate and prevent crime

NASA – $379 million – space is a lark

NSF – $130 million – Scholarships for the bright but non-affluent…who needs them

Each of you will have an opinion on these cuts but the point is these are not all frivolous and some could endanger us, particularly with the high unemployment among teens and minorities in the urban areas.

So let’s put it in perspective: remember Alaska Sen. Ted Stevens (R) and his bridge to nowhere, which actually went to Gravina Island which is nowhere. This was an earmark to another bill. The cost $223 million plus $185 million from the state which Sarah Palin endorsed…until it became an political football and she then said the state would not advance the funds killing the deal. Also, recall that other members of Congress asked him to give it back in the wake of Katrina to provide more relief funds. Stevens refused!

Now at least you see this in perspective.

Lastly, TB has been watching Ken Burn’s great documentary, The Civil War on PBS. That is the best piece of historical research and provides an understanding of what really happened…it shows how fragile our government really is. The GOP is out to get public broadcasting and TB agrees that some of the programs could be self-supporting, mostly children’s shows like Sesame Street. But what commercial station would show the Burn’s documentary? None! Look at the wasteland that is now commercial television. Sit coms being replaced by reality shows as they are cheaper to produce. These mind-numbing shows are pathetic and there are more of them each year. Also, as Kokie Roberts pointed out, NPR has news bureaus in EVERY major city in the world. Think of what is happening in Africa and the Middle East and how late our networks were in figuring it out. But the GOP has always viewed NPR as the enemy despite TB’s never finding it particularly anti-conservative…but this is a party that embraced anti-communism and isn’t letting go despite the sins of Joe McCarthy. Be careful what you wish for. We have NO networks that care to provide the full story…only skew it to their ideology – just like the government. The truth? You can’t handle the truth!

. . .  – – –  . . .   . . .  – – –  . . . (again that is S.O.S.!!!)

A friend forwarded the Joseph Stiglitz article TB discussed yesterday and did not notice the publication date: January 2009! Amazing as he was one of the first to note the class warfare and it is proving to be correct as the wealthiest Americans prosper and the other 95% suffer. Not a problem though as they don’t associate with ‘those’ people.

A classic example of this is Stephen Moore a Bush administration economist who wrote an op-ed in the WSJ Friday. Here is the link…you decide if he is correct but it is the crux of the GOP jobs cutting (budget cutting? Get real!), program.  Here is the crux of it:

Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?

The GOP is very good at digging up convenient statistics. What Moore doesn’t say is that over the period since 1980, the labor force grew by 30 million workers! Yet, it was manufacturing jobs that barely increased then plateaued and at first service sector jobs took up the slack, so without government hiring, which admittedly is a poor solution, where would have the unemployment rate been? Worse, when you factor in the multiplier effect of those government jobs, there would have been NO consumption boom and NO housing boom. As TB has repeatedly said we gave the American people an opiate – credit – to provide them with the illusion that they were prospering…until they weren’t and now despite a dearth of credit for most Americans, they expect us to consume more – again! Also, note that Mr. Moore never uttered a word of this during his tenure with the Bush administration (here is the link to the entire article: Stephen Moore)

Moore is on the editorial staff of the Wall Street Journal. This is of course the same pro-capitalist publication that investigated all of Michael Milken’s crimes on the front page then blasted the governments persecution of him on the editorial page under then editor, Jude Wanniski.

Enjoy your day!

TB

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