"A Corrupt Elite Strangles the Economy"

"A Corrupt Elite Strangles the Economy"

by Bill Bonner

SAN MARTIN, ARGENTINA – "We begin today with a new study by the RAND Corporation. It tallies a little more of the hidden cost of House Arrest. ABC News reports: "Now, new data shows that during the COVID-19 crisis, American adults have sharply increased their consumption of alcohol, drinking on more days per month, and to greater excess. Heavy drinking among women especially has soared. […]

“The magnitude of these increases is striking,” Michael Pollard, lead author of the study and a sociologist at RAND, told ABC. “People’s depression increases, anxiety increases, [and] alcohol use is often a way to cope with these feelings. But depression and anxiety are also the outcome of drinking; it’s this feedback loop where it just exacerbates the problem that it’s trying to address.”

The bills will continue to trickle in for years. Jobs lost. Companies bankrupted. Careers and families stifled and stunted.

Job Cuts: Yesterday came more news of job cuts. Here’s Bloomberg: "American Airlines Group Inc. and United Airlines Holdings Inc. will start laying off thousands of employees as scheduled, spurning Treasury Secretary Steven Mnuchin’s appeal for a delay as he negotiates with Congress over an economic relief plan that includes payroll support for U.S. carriers. American is furloughing 19,000, while United is laying off about 13,000."

Bloomberg also reports: "Tens of thousands of job cuts announced by blue-chip companies in a 24-hour period are a warning sign for the world’s recovery and emerge just ahead of two key reports forecast to show limited progress in the U.S. labor market.

In one of the biggest layoff announcements since the pandemic caused widespread economic shutdowns, Walt Disney Co. said late Tuesday that it’s slashing 28,000 workers in its slumping U.S. resort business. In the hours that followed, the pace of job cuts at some of the world’s biggest companies – across a range of industries from energy to finance – quickened. On Wednesday, Allstate Corp., the fourth-largest car insurer in the U.S., said it will cut 3,800 jobs, roughly 8% of its workforce. And Bloomberg reported that Goldman Sachs Group Inc. plans to cut roughly 400 jobs after temporarily suspending job reductions at the beginning of the crisis."

High Price: When the figures are eventually toted up, they will show that the U.S. paid a very high price – for nothing. Different countries (and different states) tried different techniques to control the spread of the coronavirus, from strict lockdown (as here in Argentina) to a light touch (as in Sweden). Their results are all over the place. Northern Italy had a high death rate; Southern Italy had a low rate. Sweden’s death rate was high in nursing homes, but low in the general population.

America, with the most sophisticated and expensive medical care in the world, has had more deaths than any other nation. But some areas had almost none at all. Africa, with minimal medical services, has had relatively few. As near as we can tell, it doesn’t matter what the feds do. The virus has a mind of its own.

Why Do It? But today, we are puzzling over a larger phenomenon: How come? If the payoff from LockDown-LockUp policies was so uncertain, why do it? Old people are about 1,000 times more at risk from the virus than young people (and seniors are 10 times more likely to die from something other than the coronavirus). Why not just advise them to lay low? Why inconvenience millions of young people for the convenience of a few old ones? Why make 300 million fearful… when only 30 million had much to worry about?

But a similar question could be asked about a lot of things. Why are so many things set up that way? Each new bugaboo sends the nation into hysterics; many suffer and only a few benefit. The War on Terror benefited a few military/industrial/consulting companies in Northern Virginia; it cost the rest of the nation $6.4 trillion. The anti-racism industry makes billions; it puts everyone else at each other’s throats.

Likewise, the poverty fighters have been gaining wealth and status on the front lines of the War on Poverty; poor people are just as poor as ever. The government’s medical care giveaways are designed, chiefly, for old people; the young pay.

The Federal Reserve’s fake-money/fake-interest-rate policies have shifted more than $30 trillion to the richest people in the country over the last 30 years; the poor and middle classes got nothing. Getting right to the point, the fix is in – a few benefit… most pay.

Optical Illusion: And now, a geriatric elite controls the country… its businesses… its armed forces… its money and its government. Donald Trump is 74. Joe Biden is 77. Nancy Pelosi is 80. Mitch McConnell is 78. Jerome Powell is 67. Anthony Fauci is 79. Biden, Pelosi, McConnell, and Fauci have been in government for a combined 185 years. Naturally, they arranged the furniture to suit them. And what suited them all was a scammy, modern look – heavy on the trompe l’oeil, where things are never quite what they appear. That’s why the subject never came up in the presidential debate. The reds and blues may disagree on the details – Who’s more corrupt? Who’s more dangerous, Antifa or Proud Boys? But there is one thing they agree on so completely that it is never even mentioned…

Complete Agreement: The biggest threat to the U.S., and most of its people, remains hush-hush… like the source of a mobster’s wealth… And whatever else may happen… nothing can be allowed to interfere with it. The flimflam must go on. Not since the French Revolution has there been an elite so desperate to hold on to its privileges. The French aristocracy hoped to remain exempt from taxes. But the American geriatric aristocracy seeks an exemption from the laws of economics! More to come…"

- www.rogueeconomics.com

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"The New York Fed, Pumping Out More than $9 Trillion in Bailouts Since

September, Gets Market Advice from Giant Hedge Funds"

"The New York Fed was in charge of almost all of the secret $29 trillion in bailouts during the 2007 to 2010 financial crisis. Congress never approved these loans or was even aware of where the money was going. After the Fed lost a multi-year court battle to keep its bailouts a dark secret from the American people, we learned that Morgan Stanley was one of the largest recipients, receiving a cumulative total of $2.04 trillion according to the audit conducted by the Government Accountability Office (GAO)."

And how are you doing, Good Citizen? 

“The Important Thing Is to Not Be Afraid”

“The Important Thing Is to Not Be Afraid”

by Ryan Holiday

“There was no virtue more important to the Stoics than courage, particularly in times of stress or crisis. In scary times, it’s easy to be scared. Events can escalate at any moment. There is uncertainty. You could lose your job. Then your house and your car. Something could even happen with your kids. Of course we’re going to feel something when things are shaky like that. How could we not?

Even the Stoics, who were supposedly masters of their emotions, admitted that we are going to have natural reactions to the things that are out of our control. You’re going to feel cold if someone dumps a bucket of water on you. Your heart is going to race if something jumps out from behind a corner. These are things the Stoics openly discussed.

They had a word for these immediate, pre-cognitive impressions of things: phantasiai. No amount of training or wisdom, Seneca said, can prevent us from having these reactions. What mattered to them, and what is urgently needed today in a world of unlimited breaking news about pandemics or collapsing stock markets or military conflicts, was what you did after that reaction. What mattered is what came next.

There is a wonderful quote from Faulkner about this very idea. “Be scared,” he wrote. “You can’t help that. But don’t be afraid.” A scare is a temporary rush of a feeling. Being afraid is an ongoing process. Fear is a state of being. The alertness that comes from being startled might even help you. It wakes you up. It puts your body in motion. It’s what saves prey from the tiger or the tiger from the hunter. But fear and worry and anxiety? Being afraid? That’s not fight or flight. That’s paralysis. That only makes things worse.

Especially right now. Especially in a world that requires solutions to the many problems we face. They’re certainly not going to solve themselves. And inaction (or the wrong action) may make them worse, it might put you in even more danger. An inability to learn, adapt, to embrace change will too.

There is a Hebrew prayer which dates back to the early 1800s: כל העולם כולו גשר צר מאוד והעיקר לא לפחד כלל. “The world is a narrow bridge, and the important thing is not to be afraid.” The wisdom of that expression has sustained the Jewish people through incredible adversity and terrible tragedies. It was even turned into a popular song that was broadcast to troops and citizens alike during the Yom Kippur War. It’s a reminder: Yes, things are dicey, and it’s easy to be scared if you look down instead of forward. Fear will not help.

What does help? Training. Courage. Discipline. Commitment. Calm. But mainly, that courage thing – which the Stoics held up as the most essential virtue. One of my favorite explanations of this idea comes from the Canadian astronaut Chris Hadfield. “It’s not like astronauts are braver than other people,” he says. “We’re just, you know, meticulously prepared…” Think about someone like John Glenn, the first American to orbit the earth, whose heart rate never went above a 100 beats per minute the entire mission. That’s what preparation does for you.

Astronauts face all sorts of difficult, high stakes situations in space – where the margin for error is tiny. In fact, on Chris’ first spacewalk his left eye went blind. Then his other eye teared up and went blind too. In complete darkness, he had to find his way back if he wanted to survive. He would later say that the key in such situations is to remind oneself that “there are six things that I could do right now, all of which will help make things better. And it’s worth remembering, too, there’s no problem so bad that you can’t make it worse also.” That’s the difference between scared and afraid. One prevents you from making things better, it may make them worse.

After the stock market crash in October 1929, America faced a horrendous economic crisis that lasted ten years. Banks failed. Investors were wiped out. Unemployment was some 20 percent. Herbert Hoover, who’d only been in office barely six months when the market collapsed, tried and failed repeatedly for the next 3.5 years to stem the tide. FDR, who succeeded him, would have never denied that things were dangerous and that this was scary. Of course it was. He was scared. How could he not be? Yet what he counseled the people in his now-legendary first inaugural address in 1933 was that fear was a choice, it was the real enemy to be fought. Because it would only make the situation worse. It would destroy the remaining banks. It would turn people against each other. It would prevent the implementation of cooperative solutions.

And today, whether the biggest problem you face is the coronavirus pandemic or the similarly dire economic implications – or maybe it’s both those things plus a faltering marriage or a cancer diagnosis or a lawsuit – you have to know what the real plague to avoid is.

This life we’re living – this world we inhabit – is a scary place. If you peer over the side of a narrow bridge, you can lose the heart to continue. You freeze up. You sit down. You don’t make good decisions. You don’t see or think clearly.

The important thing is that we are not afraid. That we don’t overthink things. That we don’t get distracted with the worst-case scenario on top of the worst-case scenario on top of the collision of two other worst-case scenarios. Because that doesn’t help us with what’s right in front of us right now. It doesn’t help us put one foot in front of the other, whether it’s on a spacewalk or a tough business call. It doesn’t help us slow our heart rate down whether we’re re-entering the earth’s atmosphere or watching a plummeting stock portfolio. It doesn’t help us remember that we’ve trained for this, that there is a playbook for how to proceed.

Remember, Marcus Aurelius himself faced a deadly, dangerous pandemic. His people were panicked. His doctors were baffled. His staff and his advisors were conflicted. His economy plunged. The plague spanned fifteen years of his reign with a mortality rate of between 2-3%. Marcus would have been scared – how could he not have been? But he didn’t let that rattle him. He didn’t freeze. He didn’t relinquish his ability to lead. He got to work.

“Don’t let your imagination be crushed by life as a whole,” he wrote to himself, as it was happening. “Don’t try to picture everything bad that could possibly happen. Stick with the situation at hand, and ask, ‘Why is this so unbearable? Why can’t I endure it?’ You’ll be embarrassed to answer.” The crisis could have crippled him. But instead he stood up. He not only endured it, but he was a hero. He saved lives. He prevented panic from turning the battle into a rout.

Which is what we must do today and always, whatever we’re facing. We can’t give into fear. We have to repeat to ourselves over and over again: It’s OK to be scared, just don’t be afraid. We repeat: The world is a narrow bridge and I will not be afraid.

We have to focus on the six things, as Chris Hadfield might say, that we can do to make it better. And we can’t forget that there are plenty of things we can do to make things worse. Foremost among them, giving into fear and making mistakes. Rather, we have to keep going. Now is the time for everyone to show courage, like the thousands of generations who have come before us. Because time marches in only one direction – forward.”

- https://ryanholiday.net/

"If You Want To Know..."

 

"The Great Stagger"

"The Great Stagger"

by The Zman

"One of the curious things about the Roman Empire is how it managed to stagger on for so long after the second century. The third century is actually called The Crisis of the Third Century, because the empire was in chaos. Yet, the empire managed to get through that period and carry on for roughly two more centuries. In time, Historians will probably puzzle over the same question regarding America. How is that it staggers on despite the obvious problems?

A popular theme in science fiction is one where the human explorers stumble upon alien technology and they are baffled as to what it does. It’s not that they know the purpose but cannot figure out how to make it work. It’s that they don’t understand the purpose of the technology. The implication is that the aliens were so advanced that they were creating tools to solve problems humans have yet to contemplate. The gap between the aliens and humans is so great that it cannot be bridged.

It is a useful thing to keep in mind when thinking about the modern world. The evidence is pretty good that Western man is dumber than his ancestors. We have more overall knowledge than our ancestors, but our ability to add to it is in sharp decline along with our ability to use it. The people in charge now struggle to do the basics of government, like maintain order and the infrastructure. In America, streets are crumbling and there are regular power failures in parts of the country.

A good small-scale example is the city of Baltimore. All of the machinery that was put in place back when it was an important city is still in place. The people running that machinery today are not doing so well. They clearly lack the intellectual firepower to operate that machinery. Baltimore is one of the most dangerous cities in the world and it is suffering from a steady population decline. The political class is so incompetent they can’t even run the graft system properly.

This was all true before the Covid panic. One thing that kept Baltimore afloat was the tourist and sports industry. In the summer, tourists would come to the well-guarded inner harbor. People from the surrounding areas would come in for sports games and the surrounding restaurants. All of that was shuttered by the panic, which means the tens of millions in tax dollars never arrived. Then there is the cost of the Covid panic itself, which has further crippled the city administration.

When you look at many American cities like Baltimore, St. Louis, Detroit, Newark and so on, the question is not “How did they get to this point?” The question is, “How have they not collapsed by now?” Part of it, of course, is the surrounding infrastructure that keeps them propped up. In the case of Baltimore, the rest of the state is taxed to keep Baltimore City government going. Federal dollars pour in to keep the cops on the streets and the schools open for business.

That’s fine for cities, but that cannot work for the country as a whole. Like those cities, the national government is increasing incompetent. Both official political parties are in such steep decline that the next election will offer a choice between a carny barker and a dementia patient. The sober minded will always feels as if the current age sits on the shoulder’s of giants, but the gap between the best we have today and just a few generations ago is breathtaking.

The only thing the political elite is good at doing is keeping the public at one another’s throat over trivia. This is why Trump in President. His main skill as a politician is to stir the pot and cause outrage. He’s a terribly inflamed hemorrhoid on the political ass of the establishment. The upcoming circus over the Supreme Court nominee promises six weeks of television mayhem. The shouting and shrieking, of course, will be from the political class itself, not an outraged public.

One can dismiss that as “bread and circuses” but that does not explain how the country staggers on despite it all. For six months the government at all levels has been sabotaging the economy and civic life with the Covid panic. Tens of millions have been thrown out of work. No one knows how many businesses have closed for good due to the Covid lock downs. Food lines are popping up in the suburbs. How is it that none of this has resulted in civil unrest or at least a few protests?

Of course, no one can really know what is happening. The media told us over 50 million people were thrown out of work due to the panic. The empty streets seem to confirm it, but they also tell us unemployment is below 10%. The stock market has returned to the levels it was at before the panic. The media also tells us that the riots we saw over the summer were a figment of our imagination. How can anything work when no one can be sure of anything being told to them by the rulers?

Like Rome for close to three centuries, America staggers on, despite the problems and the decline of the ruling class. In the case of Rome, there was no organized force capable of toppling her. In the case of America, the global order assumes America will be the pivot point, the fulcrum on which order balances. As long as people are being fed and have shelter, they will not rise up to challenge the rulers. Like Rome, the great stagger will continue until the corpse of the empire collapses."

- https://www.theburningplatform.com/

"Hold Up Your Head!"

“Each must for himself alone decide what is right and what is wrong, and which course is patriotic and which isn’t. You cannot shirk this and be a man. To decide against your convictions is to be an unqualified and inexcusable traitor, both to yourself and to your country, let men label you as they may. If you alone of all the nation shall decide one way, and that way be the right way according to your convictions of the right, you have done your duty by yourself and by your country – hold up your head! You have nothing to be ashamed of.” 

- Mark Twain

"Market Fantasy Updates 10/1/20"

"Market Fantasy Updates 10/1/20" 

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 10/1/20 UPDATE: 

“Alert! Mass Layoffs Begin. New Bailout.”"

 - https://traderschoice.net/

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Updated live.

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

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- https://www.zerohedge.com/

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- https://wallstreetonparade.com/

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Daily Update (September 30th to October 1st)

- http://www.shadowstats.com/

"Covid-19 Pandemic Update 10/1/20"

Updated October 1, 2020, 7:48 A.M. E.T.

• A large new study in India found that children of all ages can spread the coronavirus. The study is not the last word in the debate, but it adds to the evidence that school openings are likely to lead to new outbreaks.

• The White House overruled the Centers for Disease Control and Prevention and will allow cruise ships to begin sailing again after Oct. 31, rather than February.

• The governor of Mississippi, Tate Reeves, refused to extend the state’s mask mandate. “We should not use the heavy hand of government more than it is justified,” Reeves said.

• For the first time this season, the N.F.L. postponed a game - between the Tennessee Titans and the Pittsburgh Steelers - after an eighth member of the Titans organization tested positive.

OCT 1, 2020 7:48 AM ET:

 Coronavirus Map: Tracking the Global Outbreak 
The coronavirus pandemic has sickened more than 33,967,100 
people, according to official counts, including 7,262,630 Americans.

      OCT 1, 2020 7:48 AM ET: 
Coronavirus in the U.S.: Latest Map and Case Count

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- https://www.zerohedge.com/

OCT 1, 2020 7:43 AM: “WHO Begs For Billions To Support Global COVID-19 Vaccinations, Israel Sees Another Daily Record: Live Updates”

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Updated 10/1/20, 5:23 AM ET

Click image for larger size.

- https://coronavirus.jhu.edu/map.html

"How It Really Is"

 

"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

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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