“The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it comes stronger than their democratic state itself. That, in its essence, is fascism - ownership of government by an individual, by a group.” Franklin D. Roosevelt
Wha' Happened? A funny thing happened on the way to The Recovery™, just 69K new jobs were creatd in May - less than half of the expected 150K. April's number was chopped from 115K to only 77K. Unhappiness abounds.
Working Notes: Forget Greece. Either it leaves the euro and fades to insignificance, or surrenders to Germany and fades to insignificance. Big whoop. The panic d'jour is Spain. Spain (seeing how well the idea worked for Ireland) decided to nationalize its banks – which had borrowed a lot of money from Northern European biggies and frittered it away on stupidity – and has discovered it doesn't have enough money nor enough taxable citizens and needs a bailout. Except the Germans won't give them one, so the IMF said it would but forgot that its cupboard is bare and no one has any money to loan it to loan Spain so Spain can pay off Germany, so Spain will be following Greece, but not insignificantly. Say goodnight, Dulcinea.
Do Over: US 1Q2012 GDP guestimate has been cut from 2.2% to 1.9%. Last week's unemployment claims were revised upward from 370,000 to 373,000 while this weeks initial figure is 383,000 – unexpectedly. Elsewhere, over 61,000 layoffs were announced in May, a 66% increase over last year and the biggest rise in 8 months.
Prescription: We the people – of the US and Europe, both – need to stop expecting simple solutions to complex problems. We also need to realize that many of our leaders, in both government and finance, are either lying on a grand scale or are simply delusional. Either way, “chances of systemic failure are very high.” Pimco's Bill Gross says the same thing in a lot more words.
It's A Gruel, Gruel World: Adjusted for (woefully understated official) inflation, 1969's minimum wage of $1.60 an hour would be $10.00 an hour today, not the $7.25 that it is. In 40 years real minimum wages have declined 30% while the rich have accumulated incomprehensible sums.
Helping You Diet: Oscar Mayer (Kraft) is helping fight the American obesity epidemic by cutting the size of its individual portion Lunchables from 4.4 oz to 3.3 oz. To help you refrain from simply buying two of the new packages, they've kept the price the same. More for less, the American Way.
About The Cow And The Cabbage: “If it is to be either Germany for the Germans or Germany for the citizens of Athens, make no mistake in your thinking; Berlin will prevail regardless of the outlying costs to either the nation or to the future of the Union that theoretically governs Europe.”
The Daily Dose: Albert Edwards of Société Générale expects the S&P 500 to “decline decisively below its March 2009, 666 intraday low. All hope will be crushed.” I think the last part smacks of overkill. The S&P closed at 1310 on Thursday.
Severance Pay: The Roman Catholic Archdiocese of Milwaukee says it was not paying pedophiles to leave the priesthood. The money, it says, was to help “unassignable priests” slink quietly back into the shadows.
What You See Depends On Where You Stand: The Wall Street experts consult various statistics and sheep entrails and say the recession is over and the recovery is underway. The people out in the hicks look at their paychecks and their bills and wonder what all the excitement's about. While 71% of small business owners say the economy is still in recession, Wall Street CEOs say the common man just doesn't understand and relies on “a superficial and simplistic assessment of reality.” Unlike the financial wizards who caused the financial crisis and triggered the most severe economic downturn since the Great Depression.
Sunburn: In Germany last weekend, about half of the country's electricity during the midday hours of Friday and Saturday - some 22 gigawatts of electricity - was produced by solar facilities. That's output equivalent to 20 nuclear power stations at full capacity. Can't happen here because...
Problem Solved: The school district in Muskegon Heights, Michigan has solved its problem with school financing. It is closing the schools. All of the teachers have been fired and their jobs sold to the lowest bidder by the city's 'Emergency Manager', Don Weatherspoon. In Michigan the Governor has taken to appointing outside skinflints to take over and run municipalities dictatorially, with no input from any elected official or citizen. It's a Republican thing.
The Parting Shot:
Podophyllum peltatum - ‘Mayapple’