"Chamath Palihapitiya Slams Airline Bailouts: 'Giving More Money To These CEOs Is Idiotic And Dumb'"

"Chamath Palihapitiya Slams Airline Bailouts:

 'Giving More Money To These CEOs Is Idiotic And Dumb'"

by Tyler Durden

9/30/20: "American Airlines and United to Furlough 

32,000 Workers as Aid Program Set to Expire"

"Good live TV is tough to pull off, especially on CNBC, but once in a while, an otherwise boring debate about the economy or policy will fly 'off the rails' and traders and other financial professionals will turn the volume up and tune in.

That happened back in the spring, when Ventuer Capitalist Chamath Palihapitiya debated CNBC's Scott Wapner about whether the Trump Administration should bail out the airlines, and other industries suffering from the pandemic. Palihapitiya famously asserted that the government should "Let them fail" before explaining that these companies burnt up their rainy day funds and took on unnecessary debt to finance share buybacks. And since airlines are asset rich, the businesses will survive bankruptcy intact, along with all or most of the staff.

This response horrified Wapner, and we chronicled the resulting clash. Thrilled with the response, CNBC has brought Palihapitiya and Wapner together for at least one interview since that initial encounter, and on Wednesday, the pair sat for yet another interview as part of CNBC's "Seeking Alpha" Conference, which was hosted digitally this year.

Remarkably, the two men essentially circled back to their original debate about bailouts, and Palihapitiya delivered on the colorful quotes. Troubled airlines shouldn't be bailed out, Palihapitiya argued, because they have been so poorly managed. Handing government money to the airline CEOS and their boards would be "idiotic and dumb".

CNBC has frequently hosted airline executives and lobbyists to argue the other side - that not delivering on the bailouts could put the industry in jeopardy (while implying that customer safety could ultimately be impacted). But Mnuchin's comments this morning seemed to put hopes for a bail out to rest, even though President Trump promised that the airlines would be taken care of.

But instead of blaming COVID-19 for the airlines' woes, Palihapitiya pointed out that the companies essentially put themselves in this situation. Instead of building up reserve funds, these companies focused on buying back stock and bolstering the company's valuation. It was "the most absolutely horrid and idiotic form of capital allocation you could imagine," he said.

"Not a single extra dollar should go to these companies. All this money should be focused on those people." Chamath Palihapitiya says people out of work should be assisted through unemployment benefits and eviction protections."

- CNBC (@CNBC) September 30, 2020

If governments are going to hand out money to corporations every 10 years, then the government should impose new restrictions on how that money is spent, Palihapitiya said, hinting at support for making share buybacks illegal, or subject to greater restrictions. "This has been happening for the last 15 or 20 years," Palihapitiya said. "If you were going to give these folks money, you should have created some much tighter guardrails for what you were going to do in the future."

Instead of topping off the rescue programs instituted by Congress and the Fed, Palihapitiya argued that any future stimulus funds should go to small business owners and individuals only. “If you really believe in trickle-down economics, then let’s actually see how trickle-down economics would work. Give money into the hands of ordinary Americans...What I guarantee you they will do is they will spend." "We should be improving unemployment benefits, we should make sure they don't get forced out of their homes, to the extent that they have loans that are coming due...they need to be compensated," Palihapitiya.

Prodded again by Wapner about the tens of thousands of airline employees who may lose their jobs this week, the venture capitalist who recently launched a SPAC of his own, stood his ground and insisted that "not another dollar" should go to "these CEOs and boards".

Moving on to the subject of politics, Palihapitiyah dismissed Tuesday night's debate as "shambolic" and called it a "Dumpster fire" that was "so bad". However, he also said that, in a way, it was also "incredibly clarifying," before cautioning that a shift toward brand over substance could one day lead to Kim Kardashian, the pioneering reality TV starlet, to the White House."

- https://www.zerohedge.com/markets

Gregory Mannarino, "Middle-Class Meltdown; Updates"

Gregory Mannarino,

"Middle-Class Meltdown; Updates"

- https://traderschoice.net/

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Related:

09/30/2020 - 20:40: “Global Food Shortages Are Becoming Very Real, And US Grocery Store Chains Are Preparing For Worst Case Scenarios”

SEP 30, 2020 12:20 PM: "Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO"

Sept. 30, 2020 10:41 PM ET: "American Airlines and United to Furlough 32,000 Workers as Aid Program Set to Expire"

"This Explosion Of Bankruptcies And Layoffs In The U.S Is Unlike Anything We Have Ever Seen Before"

"This Explosion Of Bankruptcies And Layoffs In The U.S

 Is Unlike Anything We Have Ever Seen Before"

by Epic Economist

"The U.S. economy was supposed to be turning a corner by now, but instead it looks like we are headed for an exceedingly painful winter. All over the country, big companies are laying off thousands of workers, and in some cases the numbers are even larger than that. 

Even before the viral outbreak had started, businesses were filing for bankruptcy, but the unemployment rates that resulted from the present collapse were unexpectedly high, especially after witnessing the historic low in February. The first spike was shocking, with over 1 million jobless claims registered in a week, and although the numbers haven't peaked that high in recent days, last week, another 800,000 claims were filed, and forecasts for the winter indicate that tens of thousands of workers will be permanently laid off by the end of the year. 

According to a recent piece published by the WST, we are on a path to set new records for retail store closings, retail bankruptcies, and retail liquidations this year. The publishing states that "retail store closings in the U.S. reached a record in the first half of 2020 and the year is on pace for record bankruptcies and liquidations as the sanitary crisis accelerates industry changes, particularly the shift to online shopping, according to a report on the downturn’s severity. 

If the current trends continue, the 2020 retail bankruptcies will exceed the ones that happened in 2010, when 48 retailers went bankrupt during the Great Recession of 2007-2009. This tendency has been going on for a while now. In 2019, 22 retailers filed for bankruptcy, summing to a total of 5,998 store closures up until this point. And every week more and more companies announce they will be shutting their doors for good. Last week, coffee giant Starbucks disclosed that 400 of its restaurants would close, while Telecom behemoth AT&T will have 250 of its locations shut down. Bed Bath & Beyond will downsize 200 of its outlets and Macy’s will be closing 125 of its stores. 

In any case, the retail sector isn't the only one that has been absolutely hammered in face of this unprecedented economic collapse. - the broader commercial real estate market, by contrast, continues to implode at the epicenter of New York City, "where nearly 6,000 business closures, has resulted in a 40% eruption in bankruptcy filings across business districts of all five boroughs this year," reported Bloomberg. Moreover, the Partnership for New York City, a nonprofit membership organization of NYC's top businesses, alerted that the effects of the health-crisis-related restrictions could potentially close a third of the 230,000 businesses across all five boroughs for good. The Bloomberg report also described that bankruptcy filings in the region have soared since mid-March, which was when the state of New York reported its first casualty from the viral outbreak, leading Governor Andrew Cuomo to close all nonessential businesses. 

Court records show that there were 610 filings in the Southern and Eastern Districts of New York from March 16 to September 27, marking a 40 percent surge from the same period in 2019 and the highest by far for any year since the financial crisis. 

And, on top of all this overwhelming announcements, here comes even more concerning news: the airline industry is on the brink of a historical fall-out if the federal government doesn't proceed to enact a massive bailout. According to Wolf Richter on his daily Wolf Street economic examination, "October 1 is the day US airlines that accepted their portion of the $25-billion bailout under the CARES Act can start involuntary layoffs of their employees. They’ve been shedding large numbers of employees since March but through voluntary buyouts, early retirements, and other programs that induced employees to temporarily or permanently leave. 

Now the airlines are engaged in a desperate lobbying effort to get legislation signed into law that would provide the next $25-billion bailout package. Threats have been flying, so to speak, to motivate Congress to get this done. American Airlines CEO Doug Parker told CBS News on Sunday that if there isn’t a new bailout program, “there are going to be 100,000 aviation professionals who are out of work, who wouldn’t be otherwise.” This would include the 18,000 employees American Airlines has threatened to lay off." All these crushing events are going to resonate on winter's unfoldings, and soon we will unfortunately see more people in financial distress and more businesses disintegrating. From where we stand, the economic future doesn't look any more promising. The dominoes are falling and our society is crumbling. We do hope America still has the resilience to deal with everything that is coming for us.

- http://theeconomiccollapseblog.com

○

Related:

"NYC Hammered By 40% Bankruptcy Surge, Braces For Next Wave"

"The Urban Exodus and How Greatness Goes Bankrupt"

"The Urban Exodus and How Greatness Goes Bankrupt"

by Charles Hugh Smith

Two recent essays pin each end of the "urban exodus" spectrum. James Altucher's sensationalized "NYC Is Dead Forever, Here's Why" focuses on the technological improvements in bandwidth that enable digital-economy types to work from anywhere, and the destabilizing threat of rising crime. In his telling, both will drive an accelerating urban exodus over the long-term,.

Jerry Seinfeld's sharp rebuttal, "So You Think New York Is 'Dead'," focuses on the inherent greatness of NYC and other global metropolises based on their unique concentration of wealth, arts, creativity, entertainment, business, diversity, culture, signature neighborhoods, etc.

The core issue neither writer addresses is the financial viability of high-cost, high-tax urban centers. It's telling that Seinfeld's residency in Manhattan began in the summer of 1976, shortly after the federal government provided loans to save the city from defaulting on its debts and declaring bankruptcy. In other words, Seinfeld arrived at the very start of New York's fiscal rebuilding, though its social decline would continue for another few years (the 1977 blackout and looting, etc.). Fiscal conservative Ed Koch was elected mayor in 1977 and by 1978, the city had paid off its short-term debt.

This return to solvency laid the foundation for the eventual revival that attracted capital, talent and hundreds of thousands of new residents, replacing the 1 million+ residents who had moved to the suburbs in the tumultuous 1960s and 70s. This urban exodus had led to urban decay which had generated a self-reinforcing feedback: the greater the decline in livability, the more people who moved out, which then reduced commerce and taxes, further exacerbating urban decay, and so on.

As I explained in "How Extremes Become More Extreme", these feedback loops are one way that Extremes Become More Extreme until a tipping point / phase change is reached and livability and solvency both collapse.

The other dynamic I discuss is the Pareto Distribution, the 80/20 rule which can be distilled to 64/4 (80% of 80% is 64%, 20% of 20% is 4%). Once the vital 4% act, they exert outsized influence on the 64%, far out of proportion to their numbers. Thus the expanding criminality of the 4% criminal class can dramatically change perceptions of safety and security of the 64%.

Telling people who no longer feel safe in the city that crime only went up 10% will not change their minds. If 20% of the businesses in a district close for good, the district might retain enough of a concentration of commerce to draw customers. But once the number of businesses plummets below a critical threshold, the survival of the remaining enterprises becomes doubtful as the customer base drops below the level needed to sustain the remaining businesses. As I have repeatedly stressed, the surviving businesses are burdened by high fixed costs, none of which have declined even as commerce collapsed.

Again, you cannot persuade people who no longer feel that shopping is safe and fun to get out there and spend, spend, spend like they did a year ago. Neither Altucher nor Seinfeld mention the macro-issues of demographics and the broader economy. Despite soaring inflation and a roller-coaster stock market, jobs were plentiful in the 1970s, partly because the Baby Boomers were entering the market for goods and services and partly due to low costs for employers.

As late as the mid-1980s, it only cost me $50/month (one day's pay for a moderate-wage worker) to provide good healthcare insurance for a single, young worker. Try buying a month of good healthcare insurance today for one day's moderate-wage pay. Not only were rents much cheaper (measured by the number of hours of work needed to pay rent), there were "squats" where the rent was zero, and a variety of cheap "slum" dwelling options. These options have mostly disappeared from the housing inventory, so it now takes enormous sacrifices to live in a "great city".

Compare these positive demographics and cost structure then to the present. Not only are jobs no longer plentiful, many of the Millennials who flocked to a "great city" for jobs and the amenities can no longer afford to live there. Many found jobs in the dining-out and retail sectors that have been devastated, and they only survived financially by sharing flats with multiple roommates.

Costs such as healthcare insurance and housing are "sticky:" insurers, landlords, etc. are reluctant to cut prices for fear that cost reductions may become permanent, hurting their profitability. These high costs are also endangering all the cultural institutions and commercial life that attracted people to the "great cities." I doubt that every symphony, opera company, museum, music venue, etc. will survive the downturn, due to their incredibly high fixed costs of operation.

As I've noted before, the patrons who are financially able to support these costly institutions are older and wealthier, and have the most to lose if they feel their basic security is no longer assured. They're the first to join the exodus to safer, less risky homes elsewhere. Yes, they'll miss all the amenities, but not enough to make them stay. I've also stressed the absolute necessity for any entity to be financially viable. If the entity isn't viable in terms of income covering all expenses, it dissolves regardless of its greatness.

Seinfeld is on solid ground arguing that great cities will never go away, as their benefits are simply too compelling. On the other hand, goats were grazing in Rome's Forum, a few decades after the Western Empire collapsed. What collapsed wasn't just Imperial authority; the city could no longer afford all the free bread and circuses which fed and amused much of its vast populace, not could it defend / maintain the long trade routes that fueled commerce or the political structure that secured the wealth of its nobility.

Cities are not cheap to operate, and they must continually attract workers and capital / wealth which can both be taxed at a high rate. They also need a high volume of commerce that can be taxed. Most employers are facing a profound reset that will very likely require permanent cost-cutting to maintain profits, and remote work is very cost-effective, as commuting and office space are both unnecessary expenses that can be eliminated. In terms of financial viability, much of the activity that generated taxes for "great cities" is gone for good: downtown concentrations of tens of thousands of workers that supported hundreds of small businesses, commercial landlords paying high property taxes, and so on.

The question nobody seems to be asking is: are cities no longer financially viable, given the enormous cost of living, the high taxes needed to run the city, and the strong economic and demographic headwinds? What kind of city is possible if half the small businesses close and tax revenues fall by 50%? What effect will those massive changes have on the livability of the city and its most compelling attractions? How will the city provide services on half the revenues? The worst-case scenario is only those who can't afford to leave will be left. Unless great sacrifices are made by those remaining, that's not a recipe for financial viability, it's a recipe for goats grazing in the Forum.

The best-case scenario is those who love their "great city" will accept the daunting reality that even greatness can go bankrupt, and that the city will have to adapt in new and wrenching ways to remain financially viable as tax revenues decline and some percentage of the wealthiest taxpaying residents have left or will leave.

It's not just the urban exodus that's the challenge - it's who's in each successive wave of the exodus. If the wealthy, the entrepreneurs and the displaced small business owners leave in the first wave, the adaptation will have to be rapid and profound, as the modest, incremental reforms that typify the past 75 years will not be enough to be consequential."

- https://www.oftwominds.com/

Musical Interlude: Adiemus, “Adiemus”

Adiemus, “Adiemus”

Please view in full screen mode.

A Pueblo Indian Prayer

"Hold on to what is good, even if it's a handful of earth.

Hold on to what you believe, even if it's a tree that stands by itself.

Hold on to what you must do, even if it's a long way from here.

Hold on to your life, even if it's easier to let go.

Hold on to my hand, even if someday I'll be gone away from you."

~ A Pueblo Indian Prayer

"A Look to the Heavens"

“Far beyond the local group of galaxies lies NGC 3621, some 22 million light-years away. Found in the multi-headed southern constellation Hydra, the winding spiral arms of this gorgeous island universe are loaded with luminous young star clusters and dark dust lanes. Still, for earthbound astronomers NGC 3621 is not just another pretty face-on spiral galaxy. Some of its brighter stars have been used as standard candles to establish important estimates of extragalactic distances and the scale of the Universe.

Click image for larger size.

This beautiful image of NGC 3621 traces the loose spiral arms far from the galaxy's brighter central regions that span some 100,000 light-years. Spiky foreground stars in our own Milky Way Galaxy and even more distant background galaxies are scattered across the colorful skyscape.”

- http://apod.nasa.gov/apod/ap090919.html

"I Used To Think..."

 

"I Asked For; I Was Given..."

“In my youth I respected the world and life, 

I needed nothing but peace of heart;

And yet I changed despite myself and believed in Iktomi's lies.

He seemed to know all the truth, 

he promised to make me happy.

He made me ask Wakan Tanka for wealth, that I might have power;

I was given poverty, that I might find my inner strength.

I asked for fame, so others would know me;

I was given obscurity, that I might know myself.

I asked for a person to love that I might never be alone;

I was given a life of a hermit, that I might learn to accept myself.

I asked for power, that I might achieve;

I was given weakness, that I might learn to obey.

I asked for health, that I might lead a long life;

I was given infirmity, that I might appreciate each minute.

I asked Mother Earth for strength, that I might have my way;

I was given weakness, that I might feel the need for Her.

I asked to live happily, that I might enjoy life;

I was given life, that I might live happily.

I received nothing I asked for, yet all my wishes came true.

Despite myself and Iktomi, my dreams were fulfilled,

I am richly blessed more than I ever hoped,

I thank you, Wakan Tanka, for what you've given me.”

- Billy Mills, Oglala Lakota (1938-)

◆◆◆

"In Lakota mythology, Iktomi is a spider-trickster spirit, and a culture hero for the Lakota people. Alternate names for Iktomi include Ikto, Ictinike, Inktomi, Unktome, and Unktomi. These names are due to the differences in tribal languages, as this spider deity was known throughout many of North America's tribes. Iktomi can be compared to the African trickster figure Anansi, and to some extent, the transculturated Yoruba Ellegua, also depicted as a trickster disguised in red. Due to his nature as a Trickster as well as patronage of communication, Iktomi is also comparable to the Greco-Roman Hermes/Mercurius (Mercury)."

- https://en.wikipedia.org/wiki/Iktomi

"In Native American mythology, Wakan Tanka (great mystery) is the supreme being and creator of the Lakota Sioux. Sometimes called Great Spirit, he is similar to the supreme beings found in the myths of many other North American peoples. According to Lakota myth, before creation Wakan Tanka existed in a great emptiness called Han (darkness). Feeling lonely, he decided to create companions for himself. First, Great Spirit focused his energy into a powerful force to form Inyan (rock), the first god. Next, he used Inyan to create Maka (earth) and then mated with that god to produce Skan (sky). Skan brought forth Wi (the sun) from Inyan, Maka, and himself. These four gods were separate and powerful, but they were all part of Wakan Tanka.

The first four gods produced four companions—Moon, Wind, Falling Star, and Thunderbird—to help with the process of creation. In turn, these companions created various gods and spirits, including Whirlwind, Four Winds, Buffalo, Two-Legged Creatures (humans and bears), Sicun (thought), Nagi (spirit of death), Niya (breath of life), and Nagila (shadow). All of these beings were aspects of Wakan Tanka. Together, they created and oversee everything that exists.

- http://www.mythencyclopedia.com/Tr-Wa/Wakan-Tanka.html

The Poet: Mary Oliver, "Lead"

"Lead"

"Here is a story to break your heart.
Are you willing?
This winter the loons came to our harbor and died,

 one by one, of nothing we could see.
A friend told me of one on the shore
that lifted its head and opened
the elegant beak and cried out
in the long, sweet savoring of its life
which, if you have heard it,
you know is a sacred thing,
and for which, if you have not heard it,
you had better hurry to where they still sing.
And, believe me, tell no one just where that is.
The next morning this loon, speckled
and iridescent and with a plan
to fly home to some hidden lake,
was dead on the shore.
I tell you this to break your heart,
by which I mean only
that it break open and never close again
to the rest of the world."

- Mary Oliver

"What Is Hope?"

"What Is Hope?"

"What is hope? It is the pre-sentiment that imagination is more real and reality is less real than it looks. It is the hunch that the overwhelming brutality of facts that oppress and repress us is not the last word. It is the suspicion that reality is more complex than the realists want us to believe.

That the frontiers of the possible are not determined by the limits of the actual; and in a miraculous and unexplained way, life is opening creative events which will light the way to freedom and resurrection. But the two - suffering and hope - must live from each other. Suffering without hope produces resentment and despair. But hope without suffering creates illusions, naïveté and drunkenness.

So let us plant dates even though we who plant them will never eat them. We must live by the love of what we will never see. That is the secret discipline. It is the refusal to let our creative act be dissolved away by our need for immediate sense experience, and it is a struggled commitment to the future of our grandchildren. Such disciplined hope is what has given prophets, revolutionaries and saints the courage to die for the future they envisage. They make their own bodies the seed of their highest hope."

- Rubin Alves

The Daily "Near You?"

Torrance, California, USA. Thanks for stopping by!

"Reflect On What Happens..."

“Reflect on what happens when a terrible winter blizzard strikes. You hear the weather warning but probably fail to act on it. The sky darkens. Then the storm hits with full fury, and the air is a howling whiteness. One by one, your links to the machine age breakdown. Electricity flickers out, cutting off the TV. Batteries fade, cutting off the radio. Phones go dead. Roads become impassible, and cars get stuck. Food supplies dwindle. Day to day vestiges of modern civilization – bank machines, mutual funds, mass retailers, computers, satellites, airplanes, governments – all recede into irrelevance. Picture yourself and your loved ones in the midst of a howling blizzard that lasts several years. Think about what you would need, who could help you, and why your fate might matter to anybody other than yourself. That is how to plan for a secular winter. Don’t think you can escape the Fourth Turning. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted.”

– Strauss and Howe, “The Fourth Turning”

"Boomer Elite Faces Day of Reckoning"

"Boomer Elite Faces Day of Reckoning"

by Bill Bonner

"This was a spiteful, chaotic, abusive, often out-of-control brawling

 encounter, with both candidates revealing their contempt for each other."

– Paul Kelly, Editor-at-Large, "The Australian"

SAN MARTIN, ARGENTINA – "What is amazing, at least to us, is that two grown men – with decades of public speaking experience, months to prepare, and millions of people watching – could not do a better job. Not that we expected Marcus Tullius Cicero or even Sam Irvin. But Donald Trump and Joe Biden took the presidential debate down to a new level. Many commentators said it was an “embarrassment” to the nation, that America’s prestige fell in foreign eyes. But, always the optimists, we doubt there was much room left on the downside. After 20 years of Bush the Younger, Obama, and Trump, the foreigners knew what to expect. Last night, like the third sequel to a bad movie, they got it.

No Real Threat: Yesterday, colleague Dan Denning called to record an interview on the eve of the debate. “Would the presidential debate… or the upcoming election… make any real difference?” he asked. The pitch was wide. But we reached for it. The answer was: No.

Because none of the bugaboos and hobgoblins that the candidates promise to protect us from are much of a real threat. “Unfair” trade – whatever that is – is no danger to the republic. Viruses come and go. Neither Antifa nor the Proud Boys are likely to lead a revolution. China will not invade California. Russia will not change the election results. And nothing the president does is likely to have any effect on the planet.

On the other hand, the thing that will almost certainly cause misery to millions of Americans… and over which the president has more control than any other human being… was not even mentioned last night. Nor will either candidate ever bring it up. Why? Because the two old, white men running for president are both champions of the same worn-out, degenerate scam. Neither will admit that it doesn’t work. Neither will propose to change it.

Real Danger: But let us back up a moment and introduce three intertwined themes. First, the Baby Boomer elites, who control American business and government, are getting old and fearful.

Second, they have set up a political/economic system which is fundamentally unsustainable… corrupt… and counterproductive.

And third, they are now desperate to keep the jig up.

The real danger is not abroad. It’s at home. It speaks English. It is college educated. It lives in a nice house… wears a suit and tie… and may even go to church on Sunday. It is over 60 and looking forward to a rich, comfortable retirement… perhaps in one of the new Zoom Towns, where it can protect itself from the disintegration of the American economy.

This elite is neither good nor bad. It just is what it is. It is, well, us. Look around you. Have you ever seen so many fearful people? People who have lost courage… lost faith… and lost their minds. They are willing to be frisked every time they get on an airplane… as protection against the almost negligible chance that someone will want to blow it up. Even young, healthy people are willing to submit to house arrest… rather than face the risk of getting sick. They are afraid that the “planet is angry” and that it will be consumed by the fires of Hell unless we stop using fossil fuels.

Ahead of the Game: Do civilized adults need the government to tell them how to protect themselves from a virus? The New York Times reluctantly admits that they don’t: "Vilified Early Over Lax Virus Strategy, Sweden Seems to Have Scourge Controlled." Sweden let people decide for themselves. Those who were afraid of the virus could stay at home. Those who were not could go about their business.

The U.S., meanwhile, panicked, shutting down large parts of the economy (U.S. second-quarter GDP fell 31%!). But the death rate for both countries was about the same. And now, Sweden appears to be way ahead of the game, with very few new cases.

Cost of Protection: Aging Americans see a future full of bogeymen. And they want the government to protect them. But the protection comes at a cost. The cost of their “war against terror,” according to Brown University, totes to more than $6 trillion… 800,000 dead… and 37 million displaced. Their heavy-handed attempts to hold off the virus crippled the economy… and resulted in collateral damage – depression, suicide, stunted careers, etc. – which will be tallied later.

Real Risk: But what concerns us here at the Diary is the cost of protecting against the financial future. That is where the real risk lies. Having bent and distorted the economy for its own benefit, the Baby Boomer elite now faces a reckoning. In an effort to protect itself from the risks of old age, it has promised itself health and pension benefits, unfunded, worth over $200 trillion. It would be impossible to keep up with those obligations, even with a healthy economy.

Trump and Biden may trade moronic calumnies, but they represent the same group, with the same desperate goal – to keep the show on the road. What will they do? Will they sell their souls? Or sell out their children? Let’s look at it tomorrow…"

- www.rogueeconomics.com

"Soon Or Late..."

“A craven can be as brave as any man, when there is nothing to fear. And we all do our duty, when there is no cost to it. How easy it seems then, to walk the path of honor. Yet soon or late in every man’s life comes a day when it is not easy, a day when he must choose.”

- George R.R. Martin

"Big Orly’s Diary: Bulk-Lot Wisdom from Up the Holler"

"Big Orly’s Diary: Bulk-Lot Wisdom from Up the Holler"

by Fred Reed

"Saturday morning was sunny and bugs screaming and buzzing, at least in my part of West Virginia, and it was nice and cool. Bugs is pretty much like folk. The boy bugs holler or buzz or I don’t know what all so the girl bugs will love them and they can get laid, and then the boy bugs run off and leave the girl bugs with the eggs. You’d think the girl bugs would learn, but they never do. If you have a choice, it’s better to be a boy bug.

Anyways, I was planning to go see Uncle Hant that makes skull break moonshine back in the woods so he could tell me how to make a living. Hant knows everything. A few years back, he sent the Poverty Office in Wheeling a letter that said he was a one-legged Injun princess named Sighing Cloud with black lung, and they started sending him money in trucks. Then they wrote him a letter saying did he have any children he didn’t know who was the daddy to, so they could send him more money. He told them he had thirteen and he didn’t have no idea where they came from but they all had Down’s Syndrome, whatever that is, and now he’s the richest man in McDowell County. So don’t nobody who says gummint is a bad thing know what he’s talking about.

But Hant don’t get up too early in the morning, so first I went up the holler to see my old school teacher, Mr. Entropy McWilliams that’s got a internet television and lets me look at it sometimes. He was watching what he said was a Sympathy Orchestra and a noise was coming out of it like a blow-out plug on a high-pressure drill rig. It was real awful and I asked Mr. McWilliams what it was and he said somebody was blowing a hobo. I thought that was pretty ripe for a show anybody could watch, even little children, but it turned out it wasn’t so much a hobo as a oboe, which is like a three-foot duck call. I didn’t see much future in it. Neither would our McDowell County ducks, that don’t have much schooling. It might work with city ducks, though.

Anyway, he said it did sound kind of like a cat squalling because of Affirmative Action, which I didn’t know what was. He said it was a newfangled law in Washington, that’s the Yankee capital, that says if you want somebody to do a job, you have to hire someone that can’t do it. I said that made sense, about like taking poison. He said I thought that because I wasn’t in Washington and it was God’s own truth, and it was for Social Justice. The more you couldn’t do a job, the more you had to get it.

That was too many for me. I thought, what if I had cancer in the head and the brain doctor showed up with a claw hammer and a ice pick and didn’t know where to start, so they put a sign on my foot that said Open Other End or something. I’d shoot the sonofabitch before he got in striking distance. Maybe there’s such a thing as too much social justice. At least if it’s my head.

Mr. McWilliams said the Sympathy, that was in New York, used to hire music people by setting them down and listening to them play the fiddle or duck call or banjo and taking the best ones. But then women got into a uproar and started yowling that the Sympathy only got men. They said women could play fiddles and all just fine and it was affirmative action for men and they was madder than wet hornets. So the Congress made a law that the Sympathy had to string up a bed sheet and them as wanted the job had to play behind it and the judges didn’t know who they were and couldn’t let in their sisters and uncles. It made sense, but they did it anyway, and pretty soon the Sympathy was full of ladies blowing and honking and sawing away, and everybody was happy because they did it right.

Well, everybody except American Africans, that said none of them was in the Sympathy. They wanted Social Justice. Best I can tell, Social Justice means getting anything you want or you’ll scream and yell and bite and wet yourself like a two-year-old that needs a whupping and a new diaper. So now they’re going to choose by colors, like they was painting a ‘57 Chevy. I guess that’ll work.

Mr. McWilliams said I just didn’t understand Advanced Thought. Well, I didn’t. I guess it’s because I’m not real smart. I used to be, though. The first time I was in the fourth grade my teacher, it was Miss Purity Perkins, said I was real special and she hoped I’d go far, but I guess she would have settled for the next county over. I told Mr. McWilliams if Affirmative Action meant getting a job because you couldn’t do it, I wanted to be a Space Rocket Driver. At least if I could be one from Lou-Bob’s Billiards and Rib Pit. I was having a lot of fun with my girlfriend Jiffy Lube and I figured I couldn’t drive a Space Rocket at the Rib pit just as good as I couldn’t drive it from Australia or Wheeling or wherever they have Space Rockets.

I said so much Social Justice was giving me a motingator headache and I wanted to go off to Lou-Bob’s that serves bust-head shine under the table if you don’t look like a damn Revenoor.

Then the television started talking about Reparations for Slavery, that I thought they got rid of after World War Two. He said it didn’t matter and it was to pay you for bad stuff that never happened to you, just like Affirmative Action was to give you jobs you couldn’t do, but that was a whole nutheer bucket of crawdads and we could talk about it later. I don’t know. It all sounded like a crooked poker game to let grifters and frauds get paid without going into the mines and getting killed like Christians.

It was still early so I went off to tell Hant about Affirmative Action. He was at his still. Like I said, he makes panther sweat that takes the enamel off your teeth to sell to yuppies from Washington that want a Cultural Experience. He puts it in genuine authentic mountain stone jars he gets from Taiwan. Some folks say he gets a cut from liver doctors in Bluefield, but I don’t know.

Hant’s a tall skinny rascal with arthritis so when he bends over it looks like folding a Buck knife and he’s got a jaw like a front-end loader. Later he said he told the Poverty Office he wanted to be a Orthostatic Ontological Proctologist. I asked him what that was. He said he wasn’t sure but he sure as hell didn’t know how to be one so they had to pay him for it. He said they would never dare say no to a one-legged Injun princess with black lung.

After, I went down the hill to look for Jiffy Lube that I hadn’t seen for weeks. What happened was, Jif is real pretty, and she was in Lou Bob’s, and Lester ‘Callister got smart with her like he didn’t know what parts of her was handles and what parts wasn’t. She laid him out cold with a pool stick and went to hide in the mountains. But after a while the sheriff said he figured the Statue of Limitations was about a month for smacking Lester, and anyway the doctor said he probably be out of a coma in a week, so weren’t no harm done but his teeth might be all cattywumpus. Jif was smiling all happy like. That’s a good sign if you know Jif, and I felt like a man with five aces and a date with somebody else’s wife, so we went off to my doublewide. I figure there’s nothing better on a mountain night than a good girlfriend, a six-pack, and a Bug Zapper."

- https://www.unz.com/freed/

"If We Have No Idea..."

“If we have no idea what we believe in, we’ll go along with anything. Truth takes courage. Courage to stand up for what we believe in. Not necessarily in a confrontational way, but in a gentle yet firm way. Like an oak tree, able to sway gently in the wind, but strongly rooted to the ground.”

- A.C. Ping

"2021: As China's Golden Ox Rises The US Bald Eagle Will Crash"

"2021: As China's Golden Ox Rises The US Bald Eagle Will Crash"

by Egon von Greyerz

"The Chinese understand the long game and they have infinite patience. They have always known that they never needed to attack the US, financially or militarily. Because China has invariably understood that the US would self-destruct.

Click image for larger size.

Click image for larger size.

Politics And Princes Don't Mix: The Duchess of Sussex who has dragged her poor husband, Prince Harry, into the US election has declared that this will be the most important election in history. She will most probably be right but for the wrong reason. Meghan Markle believes a Biden victory is the only way that the US can be saved, primarily because she can’t stand Trump (which is reciprocal). It probably doesn’t matter who wins the election when is comes to stopping the crash of the US economy and currency. But what is guaranteed is that Biden’s policies will bankrupt America much faster than Trump’s. The profligate democrats will forgive trillions of debt, increase spending and reduce taxes for the masses.

The Chinese have waited patiently for this moment. They forecast the collapse of the “capitalist monetary system with the dollar as its prop” already half a century ago and how right they have been.

The Days Of The Dollar Are Counted: A 98% fall in real terms – against gold – and a 78% fall against the Swiss franc tells the world that the days of the dollar are counted. So will we see the US bald eagle crash to the ground and a phoenix in the form of a new world currency emerge like in the 1988 Economist article?

Well, the dollar crash is guaranteed and a Biden victory will accelerate the move. But there is unlikely to be a new world currency in the near term. As the dollar falls and with it the US economy, China will gradually emerge as the next dominant economy and super power. But this will take time. Before that we will have chaos in the global financial system, economic collapse in many countries, political upheaval, riots, and wars.

Biden – A Catalyst For Accelerated US Decline: So is a Biden victory going to cause all this? No not solely. But just as the coronavirus sped up that fall of the US and world economy, Biden will be the catalyst for an accelerated decline of the US. Both events would have happened anyway but probably not as dramatically as with these two powerful catalysts – CV and Biden.

The coming US election will have bitter consequences for the US and the world whoever wins. It is likely to be aggressively fought not just before November 4th but more so after the result is declared. There will be a plethora of forums where the election result will be disputed and fought like in the courts, the media, the streets, in families and in politics of course.

Churchill – We Shall Fight On The Beaches: The fighting everywhere reminds me of Winston Churchill’s speech in parliament in June 1940 after the evacuation of Dunkirk: “We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills…”

Churchill’s speech was obviously to unify and prepare the nation for the major war effort ahead. But the consequence of the US election will be extremely divisive and damaging for the US whoever wins. So 2021 is not just likely to be the start of a severe and long lasting economic downturn or collapse for the US but also an extended period of extreme political and social disharmony and discontent.

Reminiscing Over Better Times: I have just entered my 52nd year of working life. But I can clearly remember life before that as a young boy in Sweden, back in the 1950s. This was a time when the family was the kernel of society and there was total respect for law and order. Mothers were at home and looked after the children. The wages of the father were sufficient to provide for the family. Very few people had debt and obviously there were no credit cards. Most things were paid for in cash. The police was unarmed and there was total respect for their authority. 

Sweden then was a very homogenous society with few immigrants. There was very little crime and virtually no violent crime. I remember visiting churches in the countryside and the doors were open and church silver would stand on shelves totally unprotected. Young children could move around freely without parental protection. Very few people went on holiday abroad or had cars or televisions. The economy was strong, based on real money with little debt. The quality of life was far superior to today. I am not talking about material things but people were much happier with less stress and strong respect for your fellow humans. There was integrity with strong moral and ethical values.

The End Of An Era: I do realize that all of this could sound like a mature man nostalgically reminiscing and embellishing the past. There might be some truth in that criticism but I am quite convinced that the era we are now in is the end of a cycle when it comes to quality of life, values, crime, honesty, integrity. The current debt based economy with fake money and values is clearly creating a very unhappy society and many discontented people.

This is why the current cycle needs to soon come to an end. The world needs a proper forest fire which destroys the debt and all the bubble assets financed by printed money and worthless debt. The coming fall of the global debt edifice will be a relief for the world but it will obviously involve a long period of suffering. But only after this fall can the world start a new cycle with green shoots based on a sound monetary and financial system which is based on real values, both moral and material.

Half A Century Of Dramatic Changes In The World: Coming back to my half a century of working life, there have also been some dramatic changes in the world. The table below shows what has happened to debt, dollar, GDP & stocks during my 51 years’ involvement with financial markets, between 1969 and 2020. US federal debt is up 75x and GDP is only up 20x. There is no clearer evidence that the US economy is running on empty and that more and more debt is required to produce an increase in GDP in nominal terms.

Debt Default Coming: US debt to GDP has now reached 135% against 35% in 1969 and growing. These debt levels are unsustainable for future growth. With falling tax revenues and rising expenditure, there is zero chance that this debt will ever be reduced. And when interest rates go up, the US will not even be able to service the debt. So a debt default is very likely in the next few years.

Whilst US GDP is up 20x since 1969, China’s GDP is up 175x. There can be little doubt that China will be the next global economic superpower. Only a revolution in China would stop that.

Gold is up 53x since 1969 and the Dow 34x. If dividends after tax are included and reinvested, the rise of the Dow and gold would be fairly equal. I started the article with China’s view, in 1971, on the future of the dollar and the US economy. The debt explosion and slow GDP growth are clear evidence of how right China was. But the dollar’s 98% fall against gold and 79% against the Swiss franc confirms China’s 1971 prediction:

“…the seriousness of the US economic crisis and the decay and decline of the entire capitalist system."

“…mark the collapse of capitalist monetary system with the US dollar as its prop. Nixon’s new economic policy cannot extricate the US from financial and economic crisis.”

So there we have it. The wise Chinese saw half a century ago what would happen to the US, the dollar and the capitalist system and they knew already then that they would be the main beneficiaries. But destruction of currencies and fall of empires is not new in history. Von Mises stated this phenomenon very eloquently:

2021 The Chinese Year Of The Golden Ox:  2021 will be the Chinese year of the Metal or Golden Ox. It will also be the 50th anniversary of Nixon’s fatal decision to end the gold backing of the dollar.

As the golden ox rises in China, the US bald eagle will crash to the ground as a symbol of the crashing dollar and US economy. 2021 is likely to be an ominous year in the global economy. We may not see the “final and total catastrophe of the currency system” completed already then but we are likely to see the start of the final dollar collapse and a major surge in gold and silver. Anyone holding depreciating dollars and other currencies will soon regret not holding real money in the form of physical gold and silver."

- https://www.investmentwatchblog.com/

"How It Really Is"

 

"Market Fantasy Updates 9/30/20"

"Market Fantasy Updates 9/30/20" 

Down the rabbit hole of psychopathic greed and insanity...

Only the consequences are real - to you!

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"The more I see of the monied classes, 

the better I understand the guillotine."

- George Bernard Shaw

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"The Only Thing Systematic Is The Destruction Of America"

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Gregory Mannarino,

AM 9/30/20 UPDATE: "U.S. GDP Craters! Important Updates- 

Beyond The Epic Freak Show"

 - https://traderschoice.net/

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Updated live.

- https://www.marketwatch.com/tools/marketsummary

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- https://www.zerohedge.com/

SEP 30, 2020 9:54 AM: "The Fed's Bazooka Is Broken – Will Direct Lending Be Next?"

SEP 30, 2020 8:46 AM: "Final Q2 GDP Revision Shows US Economy Shrank -31.4%"

09/29/2020 - 20:25: "NYC Hammered By 40% Bankruptcy Surge, Braces For Next Wave"

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- https://wallstreetonparade.com/

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Daily Update (September 29th to 30th)

- http://www.shadowstats.com/

“More to Come…”

“More to Come…”

By Jeff Thomas

“Years ago, when visiting the US, I’d often watch late night television. Just prior to each interval, in order to ensure that viewers would sit through the adverts, the show would run a panel that said, “More to Come.” This, of course, was effective, as the viewer would be anticipating that the best part of the program would come in a later segment and would be more likely to continue watching.

Today, we’re looking at the reverse of that situation. The program we’re watching is The Decline and Fall of the American Empire and those who recognize the decline are viewing with ever-increasing trepidation, the developments that are unfolding there. Even those of us who are not American and don’t live there are glued to our screens, as we’re aware that were viewing the early stages of a collapse that promises to be the greatest social, political and economic event that we’re likely to see in our lifetimes.

Following World War Two, the US was in a boom beyond anything the world had ever seen. The Americans came to the war late, after having built up their manufacturing capacity for war dramatically, at the expense of the Allied powers in Europe. And they did this, essentially for free. It was paid for with the gold from the vaults of the European allies. After the war, Europe was trashed and it would take decades for them to get on their feet again. Meanwhile, the US had been going flat out in production, had first-rate modern factories and, most important, held the majority of the world’s gold.

The 1944 Bretton Woods Agreement ensured that the US dollar would become the world’s default currency and, later, become the petrodollar, ensuring American hegemony over much of the rest of the world. There can be no doubt that, in the first decades after the war, the US had an amazing run and was, arguably, one of the best places to live in the world.

But, unfortunately, as so often happens, American political and industry leaders became full of themselves and couldn’t resist going out on limb to gain even more for themselves. In so doing, they turned the US from the world’s foremost creditor nation into the world’s foremost debtor nation. Worse, when they reached this unprecedented point, they opted to just keep going.

Worse still, it would appear that today’s leaders are aware that the mother of all bubbles that they’ve created is going to pop sometime in the near future, as they’re preparing themselves for the mother of all pushbacks from the populace when the crashes come.

The FBI, CIA, NSA, and a host of other authorities have either been created or expanded, allowing the creation of the world’s foremost police state. And, beginning in 2001 with the Patriot Act, have created a host of laws to assign authority to any of those bodies to exert ever-increasing control over the population. Capital controls, migration controls, higher taxes, confiscation of deposits in banks and quite a bit more have been passed in legislation, including the ability to declare the US in its entirely to be a “battle zone,” through which habeas corpus and the court system can be suspended nationally.

Yipes. (Or, blimey, depending on where you’re from.) At this point, any American who’s paying attention could be forgiven if he’s genuinely frightened at where his government is going with all this.

And so, we come back to the title of this essay – “More to Come.” A regular flow of proposed laws is now coming down the pipeline that would have been considered the stuff of a bad movie a few decades ago, but is now only too real and threatening to the freedoms of the average citizen. Instead of “more to come” meaning that the best is still on the way, the opposite would appear to be the case, and the worst is here, now.

But, how can this be, we ask ourselves. Surely those in power – the politicians, the industrialists, the central bankers, etc., must have seen this coming and, if that’s so, surely they’d have done something to stop it. Well, historically, that’s never been the case. Those in the greatest positions of power have never suddenly reversed an empire when it was about to self-destruct. What they tend to do instead is to guard against becoming casualties of the disaster they’ve created.

So, is that what’s happening this time around? In a word, yes.

The Bernie Madoffs of the world go to jail. However, those who commit the same fraudulent acts from within the system never go to jail. For example, if the heads of a bank commit massive fraud, the bank pays an enormous fine. The fine is then paid by the stockholders. And should the fine be large enough to crash the bank, the bankers can appeal to the government to bail them out, as they’re “too big to fail.” Thus, the taxpayers pick up the bill.

At this point, what we’re witnessing is an era in which laws are regularly being passed to ensure that the creators of the bubble will get a “Get Out of Jail Free” card and others will sustain the losses.

This is the very essence of what happens in an endgame run. Just as a hitman who places a bomb in a building makes his exit before the bomb can go off, the creators of bubbles safeguard themselves before the economic bomb can go off. They have no intention of being around to live with the resultant devastation that they’ve put into play.

Pete Townshend wrote prophetically, “Won’t Get Fooled Again,” in 1971, in which he hopes that the latest gang of leaders will be better than the last. In the final line of the song, he grimly announces, “Meet the new boss – same as the old boss.”

And, in fact, this is the usual outcome. Perhaps the reason why empires collapse much in the same way, time and again, and their citizens consistently fail to see it coming, is that empires general last a long time before collapsing. The Venetian Republic lasted 200 years. The Spanish Empire lasted just over 120 years. Holland lasted 130 years, Russia – 200, the UK, just under 120. And it’s been much the same for the others. In every case, they last longer than a single lifetime, so it’s rare that any individual sees more than one empire collapse in his own lifetime and doesn’t understand that empires don’t end with a whimper. They end with a crescendo, not unlike the Who’s “Won’t Get Fooled Again.”

We are witnessing the collapse of the world’s foremost empire. This is not mere conjecture. The US has all the symptoms that we’re now coming close to the final stages. And, if history plays out yet again, as it has repeatedly, we can expect that, in the lead-up to the collapse, the controls by governments will become increasingly draconian. As we consider, “more to come,” we should be braced for the likelihood that the worst controls are yet to be revealed.”

- http://www.swpcayman.com/