Gordian Naught, the Sword of the Fed, Rentenmarks for everyone

WIKI: At one time the Phrygians were without a legitimate king. An oracle at Telmissus (the ancient capital of Phrygia) decreed that the next man to enter the city driving an ox-cart should become their king. This man was a poor peasant, Gordias, who drove into town on his ox-cart. He was declared king by the priests. This had been predicted in a second way by a sign of the gods, when an eagle had landed on that ox-cart. In gratitude, his son Midas dedicated the ox-cart to the Phrygian god Sabazios (whom the Greeks identified with Zeus) and either tied it to a post or tied its shaft with an intricate knot of cornel (Cornus mas) bark. The ox-cart still stood in the palace of the former kings of Phrygia at Gordium in the fourth century BC when Alexander arrived, at which point Phrygia had been reduced to a satrapy, or province, of the Persian Empire. In 333 BC, while wintering at Gordium, Alexander the Great attempted to untie the knot. When he could find no end to the knot, to unbind it, he sliced it in half with a stroke of his sword, producing the required ends (the so-called "Alexandrian solution"). Once Alexander had sliced the knot with a sword-stroke, his biographers claimed in retrospect that an oracle further prophesied that the one to untie the knot would become the king of Asia.


The Federales' 'I Can't Believe it is not Capitalism' plan, simply stated as the formation of a JV Hedge fund between the Treasury and the FED, has successfully run the carry trade using the sovereign scrip as the funding currency. The underlying thesis? Naught up (destroy the currency) and shut up (we really want a strong dollar, wink,wink,nudge,nudge, say no more).

The Nancy Capitalists with beige books extended have been promised unlimited pudding. Yet even as Chairman Ben commits to monetizing cows to increase the price of milk, many worry that the milk will someday become sour.

The great washed huddle around the Oracle at Eccles to discern what is being prophesied. Petitions by supplicants for an Alexandrian solution are heard as whispers of Bennie Bills abound. Priests and priestesses opine that issuing debt backed by the Fed will take the sword to the Gordian Naught.

Standard of living being destroyed? Of whom do you speak of?

System being corrupted? My dear sir whose system?

In the end it will be rentenmarks for everyone.

WIKI: The Rentenmark (literally, "Security Mark") (RM) was a currency issued on 15 November 1923 to stop the hyperinflation of 1922 and 1923 in Germany. The Rentenmark replaced the Papiermark. Due to the economic crises in Germany after the Great War there was no gold available to back the currency. Therefore the Rentenbank, which issued the Rentenmark, mortgaged land and industrial goods worth 3.2 billion Rentenmark to back the new currency.

Mortgaged land and industrial goods backing a currency?

Move along nothing to see here.

How much wood does a woodchuck chuck if it is someone else's wood?

It's your life
And isn't it a mystery
If it's nobody's bus'ness
It's everybody's game.
-Kenny Loggins

By LOUIS UCHITELLE
Published: November 8, 2009
New York Times

WASHINGTON — A widening gap between data and reality is distorting the government’s picture of the country’s economic health, overstating growth and productivity in ways that could affect the political debate on issues like trade, wages and job creation.

(Mistakes were made. -AM)

The shortcomings of the data-gathering system came through loud and clear here Friday and Saturday at a first-of-its-kind gathering of economists from academia and government determined to come up with a more accurate statistical picture.

The fundamental shortcoming is in the way imports are accounted for.

(Tip 'o the iceberg. -AM)

A carburetor bought for $50 in China as a component of an American-made car, for example, more often than not shows up in the statistics as if it were the American-made version valued at, say, $100. The failure to distinguish adequately between what is made in America and what is made abroad falsely inflates the gross domestic product, which sums up all value added within the country.

(Mr. Hand's chimera of currency debacement that masquerades America's wealth exporting machine and is promulgated by our leaders as an exceptional example of America's resiliency. -AM)

“We don’t have the data collection structure to capture what is happening in a real time way, or what is being traded and how it is affecting workers,” said Susan Houseman, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich., who has done pioneering research in the field.

(Right in the lumberyard, Susan. -AM)

“We have no idea how to measure the occupations being offshored or what is being inshored.”

(It is just too terribly complicated don't you know. Bwa haha. -AM)

On another front, many argue that labor productivity is rising faster than the pay of workers who made the greater productivity possible. That argument would be watered down if more accurate data showed that productivity had been overstated.

(How much wood does a woodchuck chuck if it is someone else's wood? -AM)

“What we are measuring as productivity gains may in fact be changes in trade,” said William Alterman, assistant commissioner for international prices at the Bureau of Labor Statistics.

(Google GNP. -AM)

Grappling with these blind spots, nearly all of the 80 experts at the conference, which was sponsored by the Upjohn Institute and the National Academy of Public Administration, agreed that the statistics now published tend to overstate the strength of the economy. That view was shared by those who attended from the Bureau of Economic Analysis, the Bureau of Labor Statistics and the Federal Reserve, all big players in measuring economic performance.

(Crickets chirping. -AM)

The King Report
August 12, 2009

U.S. productivity rises at fastest pace in six years ...so what. Over the past decade productivity gains have NOT been accompanied by higher real wages and living standards – a first in US history. Long-time readers know our crusade to debunk the ‘Great US Productivity’ miracle, which rests on faulty, if not fraudulent US economic data that understates inflation, which overstates production(GDP).

Years ago (Sept. 2003 IWRC), Sen. Robert Bennett (R-UT), a former banker, told CNBC that when Easy Al saw that productivity numbers were not showing bigger gains, the worst Fed CEO in history went to the BLS and told them ‘this cannot be true!’ Bennett added, ‘and do you know what, when the BLS reworked the numbers they found huge productivity gains.’

We literally jumped out of our chair when the naive senator unintentionally suggested that Easy Al had the BLS cook the books so Al could keep pumping credit and paper over declining US living standards due to the massive transfer of wealth abroad.

(They cut you in half while you are smiling ear-to-ear , its' magic. -AM)

The manufacture of contempt : it is only a Great Depression if they say it is.

by DAVID LEONHARDT
New York Times November 6, 2009

With the release of the jobs report on Friday, the broadest measure of unemployment and underemployment tracked by the Labor Department has reached its highest level in decades. If statistics went back so far, the measure would almost certainly be at its highest level since the Great Depression.

In all, more than one out of every six workers — 17.5 percent — were unemployed or underemployed in October. The previous recorded high was 17.1 percent, in December 1982.

This includes the officially unemployed, who have looked for work in the last four weeks. It also includes discouraged workers, who have looked in the past year, as well as millions of part-time workers who want to be working full time.

Officially, the Labor Department’s broad measure of unemployment goes back only to 1994. But early this year, with the help of economists at the department, The New York Times created a version that estimates it going back to 1970. If such a measure were available for the Depression, it probably would have exceeded 30 percent.


Probably? If Mr. Leonhardt had petitioned the economists at the Grey Lady to utilize the toolkit of 'frontal lobe meets opposable thumbs' they could have coaxed Mr. Google into revealing that during the First Great Depression the Unemployment Rate peaked at 23.53% in 1932, 24.75% in 1933 and 21.6% in 1934.( Source :U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1957)

However during the First Great Depression the Unemployment Rate counted everyone over the age of 16 that did not have a job.

So how exactly would the First Great Depression 'underemployment' measure reach 30 percent Mr. Leonhardt?

In 1916 the Child Labor Act passed, setting a national minimum age of 14 in industries producing nonagricultural goods for interstate commerce or for export and the Keating-Owen Act passed, forbidding the transportation among states of products of factories, shops or canneries employing children under 14 years of age, of mines employing children under 16 years of age, and the products of any of these employing children under 16 who worked at night or more than eight hours a day.

Maybe if you counted every 'underemployed' teenager you could reach Mr. Leonhardt's projection.

With one out of six Americans on the dole and with half of all of America's children at some point on food stamps, nowadays there is a 'desperation put' from the long-fingered Hand. You won't see someone selling apples on the corner .. Ipods? Maybe.

A more accurate measure of unemployment is the SGS Alternate Unemployment Rate, as tabulated by John Williams at shadowstats.com, which reflects current unemployment reporting methodology adjusted for SGS-estimated "discouraged workers" defined away during the Clinton Administration.

Up until the Clinton administration, a discouraged worker was one who was willing, able and ready to work but had given up looking because there were no jobs to be had. The Clinton administration 'disappeared ' about five million discouraged workers who had been so categorized for more than a year.

And surprise, surprise,surprise, the participation rate peaked during the Clinton Administration.

Why? Gosh no one knows...

Northern Trust Company
January 10,2006:

Noteworthy Aspects About the Participation Rate (2000-2005)

The labor force participation rate has dropped each year in the 2000-2004 period and held virtually steady in 2005. This is an atypical event because during economic recoveries the participation rate rises as more people enter the labor force. There is no conclusive research explaining the reasons for the downward trend..


More folks in prison, more disability payments, less baby boomers ... not much in the way of a definitive 'official' explanation has been made as to why folks seem to keep on disappearing and never coming back (in aggregate and most especially if one considers population growth.)

Where did you go Joe?

Two sentences reveal the truth.

After World War 2, our blessed leaders, impressed by German 'organizational' skills crafted a policy of manufacture of consent.

Over time these techniques moved to the economic realm in an attempt to manufacture content.

With the latest employment bloodletting, The SGS Alternate Unemployment Rate is 22.1%.

One might argue that this still is not as inclusive as the First Great Depression metric of those of workin' age that ain't workin' ... but it is close enough to support the thrust of this entry and frankly this blog in general.

The manufacture of contempt : it is only a Great Depression if they say it is.

Repost : To understand Wall Street is to understand goldfish

Goldfish will eat just about everything that fits in their mouths.

Goldfish eat their eggs and their young.

Goldfish eat any dead goldfish floating in the tank.

And a very big goldfish will eat a very small goldfish as well.

Liquidate them all, the Fed will recognize their own

"Zeal must be met by zeal, humility by humility, false sanctity by real sanctity, preaching falsehood by preaching truth." -Saint Dominic

"Profit is not Satanic. Is Christianity and banking compatible? Yes, and is Christianity and fair reward compatible? Yes.” -Barclays Plc Chief Executive Officer John Varley

"The injunction of Jesus to love others as ourselves is an endorsement of self-interest. We have to tolerate the inequality as a way to achieving greater prosperity and opportunity for all.” -Goldman Sachs International adviser Brian Griffiths

"Today Chairman Ben, five hundred thousand souls, per the Household Survey, were put to the 'employment' sword, regardless of rank, age, or sex." -Anonymous Monetarist

Citizen ... step away from the dump truck

By ALEX P. KELLOGG
Wall Street Journal
November 6

DETROIT -- Nobody can say for sure how an old dump truck ended up on the fourth floor of the abandoned Packard auto plant on East Grand Boulevard. But there's no doubt about how it got back down.

It was pushed through a hole in the wall.

Detroit has 80,000 abandoned lots and buildings, according to the city's planning department. Old housing projects, homes, strip malls and even high-rise buildings sit empty across much of the city. Motown has more vacant office, retail and industrial space than nearly every other big city in the country.

Like many of Detroit's abandoned buildings, though, it's anything but deserted. Rather, it's a hive of activity, buzzing with scavengers, vandals, late-night revelers, arsonists, photographers and urban explorers who brave the crumbling buildings' many hazards and create a good number of their own. The complex remains unguarded.

"Mayhem. That's what they should call the place," says John, a 36-year-old telephone-line repairman who spends his spare time exploring Detroit's legendary industrial ruins. "If you decide you want to push a dump truck out of a window, this is the place to do it."

Those who prowl Detroit's vacant buildings are largely unimpeded. Many live in the suburbs but come here for the adventure, knowing that they're unlikely to get caught. Some say they break into the building to explore, but not to steal or vandalize. Others have no qualms about collecting souvenirs from the rubble, but they say they don't intentionally damage the structure. Still others draw the line at setting fires. But for a few, anything goes.

Let us not forget the Code of Silence. Those that go oobatz get pinched.

November 5, 2009 – Issue 3629
The King Report

The ISM Non-Manufacturing Index declined to 50.6 from 50.9 in October; 51.5 was expected. More importantly, employment declined to 41.1 from 44.3. Given that the service sector is far larger than the manufacturing sector, this decline augurs for softer employment data in October.

Speaking of ISM, few people realize that the index is seasonally adjusted and the ISM will not divulge the adjustment.

People that called ISM to get the adjustment were told to ‘figure it out for yourself’.

(The cafones and poveretts, for whom the books are always closed have been told 'col tempo la foglia digelso diventa seta'. -AM)