Tuesday, December 31, 2013

2013 Reviews

Review: Well, it's another year and another chance to see what we've gotten right and what we just flat out face planted on. Some huge, if seemingly no-brainer hits included the backlash on Obamacare, the Syrian 'war', Facebook's decline and the evisceration of Constitutional rights. Misses included Apple's sales decrease, the Fed's failure to target assets and no countries leaving the EU. 

As always, reviews are in red and if you disagree, feel free to set us right.

(20/29) 69% Correct.

Theme : The year the world changed, for the worse. "That" guy is to blame. 

Like a bad divorce or a separating business, the business practices that were not only acceptable 10 years ago but commendable, become the 'I told you so' moments of the new age. People begin to turn on one another in droves as they need a raison d'etre for their pain, anguish and empty checkbooks. Surely they are not responsible in any way. It was THAT man, over there. He did this. He did this to us! And he must pay!

  •  Since the differences between ideology and practices could not be sorted out publicly, it now turns to the battlefield.  Civil war begins its shift to national wars.
    • Assassination -  At least one moderate to major head of state is taken out. (Assad?) (Hugo Chavez kicks the bucket, Venezuela's VP think he's being targeted, a Bulgarian man starts the race to see who's going first, Tunisia puts opposition candidate Chokri Belaid down, Egypt is worried,  Nelson Mandela died. +1/1)
    • Nationalism continues to build with major globalists leading the charge. (Beware the atrocities that will follow)  UKIP leads the way with talks of exporting people, the NY Times notes the increase in 'non-democracy'. +1/1
      • In light of this, a final case for globalism builds - Talk starts to reemerge about the selfish nature of nation states and how nationalism is one of the main factors driving war. (Religion being the other)
    • At least 3 moderate/major wars. (Muslim vs Christian, East vs. West.) (Bloodshed continues in Syria, but no actual wars to speak of... +0/1)
    • Far East
      • China 
        • Severs some ties with the west. (EU and the US)I would think this would be economic in form, perhaps selling of some bonds? (Declares a military zone in the east islands, threatens the US repeatedly. +1/1)
      • North Korea
        • Attempts to solidify the region come with the north and south once again attempt to end the war and join sides. (No real overtures here. +0/1)
          • Critical to the success of this will be Washington's influence
    • West
      • US 
        • Defense wise, the US slows down as a 'world super power' 
          • Bahrain (5th fleet being ostensibly kicked out?) (Happening already...) 
          • Syria - Unsuccessful at drawing in Hezbollah in 2012, the US appears to be doubling down and create the script of 'mass genocide' in Syria to justify an invasion. If it succeeds, NATO will lead the way and Iran will be next. (Talks of 'chemical weapons' migrating lead to an Israeli strike on Syria, but there are no overt invasions. +0/0)
          • Iran - Iran continues to be second on the priority list. If Syria falls, Iran is next. (Several attempts to topple the Assad government failed. +0/0)
          • Iraq - Contractors are targeted (Lots of civil war issues, no overt targeting of contractors. A report over the weekend explains 2013 has seen an Al Quaeda "surge" +1/1)
          • Pakistan
          • Afghanistan
          • Africa (Mali kicks off the new year. Yemen gets droned massively, the 'kill list' gets expanded.)
            • Libya
            • Uganda
            • Sudan
            • Chad
        • Special forces focus - The US will continue its slowdown in combat strength but will continue to increase its special forces projection. This will be visible in minor skirmishes in lots of countries.(Women get added to the mix. An intervention in Mali. A carrier cannot be refueled. in Afghanistan the Spec Ops are causing havoc +1/1)
        • Draft - Because of the slowdown in troop strength, a legislative attempt at reenacting the draft is attempted. (Charlie Rangel is still trying. +1/1)
    • Mideast -
      • Syria
      • Egypt
      • Iran

  • CIA sponsored terror attacks increase with frequency as the destabilization efforts continue. (Ukraine, Russia... it appears that the old Soviet Union is the target now. +1/1)
    • Unfortunately, the ability to determine the difference between 'false flags' and legitimate terror begins to wane as the local populaces fight back.
    • A commercial airliner is shot down by terrorists. Most likely the ordinance will trace back to Syrian rebels, which in turn will be blamed on Iran. (Nope, big fat miss here +0/3)
  • Civil war expands
    •  US - As flash robberies (organized crime) continue, the local police departments become overwhelmed. Yet, their priorities are out of order as 'revenue generation' continues to be the top priority. (The knockout game surges, flash mobs grow in size, police continue to respond. This is a hard one to gauge. So we're going to nix this one. +0/0)
      • Police splinter - Federal/DHS faction versus the local sheriff. (In some cases, very vocally.)
      • DHS/TSA morphs into a 'control agency'. (Detention pods, robots... +1/1)
      • Feds desperately try to buy off the local cops (Tons of 'free' military equipment is not exactly new, but it's becoming exceedingly commonplace +1/1)
    • Constitutional war
      • 1st: Social Media sites get pinched as Bloggers, FB and other media experiences a sort of crackdown as 'subversive' material is sent the way of the memory hole.(The White House threatens Woodward and Lanny Davis, Biden's press office forces a college student to delete pictures, myriads of examples of Youtube, Facebook censoring articles due to content. (Related: Putin dissolves state media) +2/2)
      • 2nd: Gun registrations/confiscations with a low level at first, perhaps registrations as some sort of 'peace offer'  (And CT/Feinstein beat me to the punch) (The DOJ is talking confiscation and buybacks, confiscation continues especially in New York +1/1)
      • 4th: Highway checkpoints increase moderately as the TSA embraces its new 'mandate'. (DPS checkpoints, Sacremento is pointing guns at people, Ferry checkpoints in Galveston, Texas, The airports receive more thorough "detention pods", they try to circumvent public opinion by making them 'optional'. +1/1)
      • The Republicans march to war - (States vs the Fed) - One moderate miscalculation on my part was the assumption that the power struggle between secessionist Republicans vs Statist Democrats would be played out at the Federal level. While accurate in that this is exactly where the problem metastasized as a result of the Federal election results and the subsequent hissy fit, it seems as though the narrative is shifting to a State versus Federal contest.
        • The resistance starts with Obamacare and plays out in other issues like gun control as Republican governors stand up against the Feds.*(Perry makes a scene, South Carolina is set to nullify Obamacare, +1/1)

  • Asia deteriorates. Now that the Chinese miracle has been staggered, look for problems to materialize in the East. Japan should lead the way here as they are way overdue.(Abenomics stutters, and ultimately falls, yet the Nikkei had a huge rally +1/2)
  • EU 
    • One country attempts to leave the Union.(Scotland indirectly looks to leave, but no one heads for the doors...yet. +0/1)
  • US
    • The United States credit rating is downgraded again. (In a possible shock move, it gets hit twice) (Fitch warns over the credit ceiling +0/1)
    • The Federal Reserve
      • QE3 'fails' (Read as it doesn't save corporatists from their bad decisions.)
        • The Fed cannot continue to kick the can, because it is no longer a can, it's an F-150. This does not mean they will not do it, merely that the effect of it will no longer matter. (Congress seems a bit concerned, QE Infinity takes over +1/1)
        • Inflation rot begins to show. (People are certainly noticing the 'non-inflation' inflation.)
      • The Fed moves to a 'targeted asset revaluation program' - Inflating the entire economy won't work, so now the Fed will just declare that an asset or company is not worth X but 2X. (Moving the US to an overt command and control economy) I would imagine that GM's 'success' would be used as a justification.(Nope, and it finally comes out the GM is a huge failure, to the tune of $10 BILLION... +0/2)
    • Healthcare spending skyrockets exponentially. (At least +20%) Especially on a corporate and governmental level (THE story of 2013, besides Syria is Obamacare...Obamacare hits Americans massively a year before it takes effect. +1/1  Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010. Massive premium increases all across the board ranging from 19% - 106%. The architect admits that you will pay more.)
      • This blows up several base line projections from the government. (What should more properly be called an absolute detonation in costs. +1/1)
      • At least 30% of companies move to 30 hour work weeks. (Massive amounts of employees see their hours cut. +1/1)
    • The student bubble explodes, a moderate to major movement eventually comes out of the college-debt scene.
  • Corporations
    • Apple takes a major shot to the head as sales start declining massively (At least 10%) The fanbois scream in abject horror that Apple is just fine even as their stock plummets (A 50% decline in screens ordered, Q4 numbers show a diminishing profit margin - 6.1% YoY and does not exceed expectations, the stock is down 40%, sales end up being flat in the US. + 0/1)
    • Facebook - Put a fork in FB. Users abandon in droves as they migrate to Twitter, Google and other accounts that don't either 1) Make unusable updates continually 2) Sell your data (600k users jump ship in December alone. FB admits they're on the way out. Everyone else notices. + 1/1)

Monday, December 30, 2013

Chicago Pension Collapse, Right On Schedule

From our dear leader's home town
The woes of the city and the state of Illinois – which has its own, worst-in-the-nation, $100bn unfunded pension liability – have been driven primarily by the government’s failure to pay its share to keep its pension promises.

But this month, after years of inaction, Illinois passed a bill to tackle its unfunded pension liability. The state hopes the new law will save $160bn over the next 30 years – savings that will come from cuts in retirement benefits for state workers and forcing the state to make its pension contributions. The law has won plaudits as a first step towards fiscal reform. But it comes only after repeated downgrades that have left Illinois with the lowest credit rating of any US state.
 This is what always happens with supply/demand -
  1. A group demands more than can be adequately funded.
  2. Said group provides either research that 'proves NEW ECONOMIC REALITY' or infiltrates the representatives in order to take over.
  3. The group promises pie in the sky fantasy scenarios in which 'everyone can be rich!'
  4. Conservative groups which, rightly, observe this scenario is completely unsustainable are demonized by the group and marginalized.
  5. The scenario is completely realized including the conservative's predicted dire consequences.
  6. The group either mutates into a 'totally new group' with another 'NEW ECONOMIC REALITY' or the group seeks to impose its will via force. (War)
Indeed, these actions are so reliable, that one can predict future events off of these:
 Now, I'm going to go out on a limb here and guess that these projections factor in an economic recovery and do not include the current housing crisis let alone the Depression. Following the government time rule of 1/3 (to factor in the propensity of government to massively step up their idiocy) that would mean Illinois will be bankrupt in 2015 without a housing crisis.
Now, where do we currently stand?
“The pension crisis is not truly solved until relief is brought to Chicago and all of the other local governments across our state that are standing on the brink of a fiscal cliff because of our pension liabilities,” Mr Emanuel said after the state deal.

The Chicago teachers’ pension fund is roughly 54 per cent funded, far below the 80 per cent threshold considered healthy. But it is better off than the city’s municipal workers, police, labour and firefighters’ pension funds, which Fitch, the credit rating agency, estimates are collectively 33 per cent funded.
Well, well, well... lookie here... Half funded eh? And of that half funding, how much of that is "toxic derivatives"? (Translation - Non-existent assets)

This vindicates many, myself included, who for decades have been shouting that it is impossible to do economic acrobatics and screaming for the incarceration of the fraudulent hucksters who set these messes up. Further, it completely discredits those who are unable to perform basic math in order to understand that this situation is only, going, to, get.....worse....