To the Back of the Queue

If I go there will be trouble
And if I stay it will be double
So come on and let me know
Should I stay or should I go?

The Clash                            

Maybe it was the fear of Britain being overrun by immigrating Turks.  Maybe Brits had enough of being told what to do by elitist policy makers in Brussels.  But Great Britain’s vote to leave the European Union was also a rebuke of President Obama.

You may recall that President Obama announced on his recent visit to the UK that if Brits voted to leave the EU, the UK would be moved to “the back of the queue” for trade deals.  Maybe he’ll call his new policy with the United Kingdom “trading from behind.” EU

The comment didn’t endear him to British voters, but our president wasn’t exactly an anglophile to begin with, having confessed to removing the bust of Winston Churchill from the White House.  To our knowledge, he hasn’t replaced it with a bust of Che Guevara, but he’s treated Iran’s mullahs with more respect than he has our friends the Brits.

Perhaps after watching the Dow Jones Industrial Average drop more than 500 points during the early minutes of trading, President Obama’s tone was more conciliatory on Friday, as he said, “The people of the United Kingdom have spoken, and we respect their decision,” adding that, “The special relationship between the United States and the United Kingdom is enduring.” 

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Theater of the Absurd

Vladimir: “Well? What do we do?”

Estragon: “Don’t let’s do anything. It’s safer.”

From “Waiting for Godot” 

In Waiting for Godot, two men spend more than an hour talking nonsense and it’s called Theater of the Absurd.

After last week’s Federal Open Market Committee (FOMC) meeting, Fed Chair Janet Yellen spent an hour talking nonsense and it was called a press conference. But, really, it could be argued that the Fed is at least as absurd as anything in Waiting for Godot. Much of the dialogue in Godot could, in fact, have come from the FOMC.  For example …

Vladimir: “I don’t understand.”

Estragon: “Use your intelligence, can’t you?”

Vladimir uses his intelligence.

Vladimir: (finally) “I remain in the dark.”

Janet Yellen: “Although the unemployment rate has declined, job gains have diminished.”talawa waiting godot

Estragon: “I can’t go on like this.”

Vladimir: “That’s what you think.”

The FOMC has continued ZIRP (zero interest rate policy) for 90 months. Estragon and Valdimir waited for Godot for only a couple of days. 

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More Destruction, Less Creativity

Business is thriving … for bankruptcy lawyers.

Last week we noted the dismal employment report. The commercial bankruptcy statistics are yet another sign that all is not well with the U.S. economy, in spite of the continuous cheerleading from the media and President Obama’s economic propaganda tour.

Commercial bankruptcy filings have increased each month year-over-year for the past seven months. Total U.S. commercial bankruptcy filings in May increased 32% from the previous year to 3,358, according to the American Bankruptcy Institute and Epiq Systems. US-commercial-bankruptcies-2012-2016_05

Standard & Poor’s reported 12 defaults in May from among the companies it rates, pushing its speculative-grade corporate default rate up to 4.1%, the highest since December 2010 when the U.S. economy was recovering from the financial crisis—and up from 2.8% just five months ago.

Zerohedge noted that, “Even during the early phase of the Financial Crisis, in September 2008, when Lehman Brothers filed for bankruptcy, and when all heck was breaking lose, the default rate was ‘only’ 2.96%, before skyrocketing and eventually peaking at 12% in November 2009.” 

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The Job Creation Snow Job

Consider this headline from the U.S. Bureau of Labor Statistics: Unemployment rate declines to 4.7% in May; payroll employment changes little (+38,000).

Great news, right? The unemployment rate fell to just 4.7% in May, the lowest it’s been since before the financial crisis began.

But take a closer look.

The consensus was that the U.S. economy would create 160,000 jobs in May. That’s a pretty modest number—but not nearly as modest as the actual number. It turns out that the experts were off by about 420%. The U.S. economy created a meager 38,000 jobs in May.Employment

And, by the way, the BLS also announced that the economy created 59,000 fewer jobs in March and April than previously estimated. In other words, the BLS reported a net loss of 21,000 jobs.

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