economics log: U.S. consumer spending up again (Reuters)

Reuters – U.S. manufacturing grew in February, though more slowly than expected, while consumer spending rose for a fourth straight month, showing the economy continued a modest recovery.

U.S. consumer spending up again (Reuters)

Mon, 01 Mar 2010 21:16:13 GMT

Okay boys and girls let’s not get too excited here. One of the reasons that spending is up for the fourth straight month is because of the stimulus money that has been going out to the general citizenry. Another reason is because the credit card rules have been rewritten to make it easier for people to use their credit cards. So let’s not take spending increasing for four-month as anything indicative of a possible recovery because it’s not you’re looking at false information if you think that it is. Just remember there was a huge amount of stimulus money that when out the Pvt. citizenry. Additionally, the credit card rules were rewritten so the credit card companies can’t act like money lenders anymore. So those two things together are fueling a little bit of the purchasing going on.

But let’s look a little more closely. When you consider that companies. When they get their annual budget which they do in January these budgets are primarily mapped out months before the budget actually goes live January. And when it does go live there are certain sections during the calendar year. When certain amounts of people are to be hired and certain expenditures are to take place. So consequently, what you’re looking at is a certain amount of hiring that is going on, pursuant to the budgets of these companies have.

Is the hiring that these companies doing indicative of any kind of recovery? Not likely. And the reason it’s not is because it has to be considered that $800 trillion of market loss was realized in the third business quarter of 2009. Now that is the amount of loss that was initially impacted by the American market system. That loss has not permeated the entire American economy yet. Which means it has not spread out or extended through all the businesses in the United States that are going to realize a share of that loss. That loss only represented the amount of loss of all the companies in the entire American market system was worth cumulatively realized I the in the third business quarter. So as far as accounting, we have in one column $800 trillion of market loss. And now all the money that has been lost are all the value that has been lost is going to begin to expand through all the different companies across centers of the United States, which will take about a year. And as it does that you will see various degrees of more loss in many different ways.

Now, the smart companies, will begin to shift a lot of their in-house profit margins and the cost of their goods and services in order to try to run, what is called in a more lean or cost-effective manner. Which means they’re going to start trimming some of the waste. Because that’s going to be the key to survival over this year, where they United States market is going to try to deal with the $800 trillion of market loss that realized during the tail end of 2008 and all the way through 2009.

But that’s the actual truth about what’s really going on. That’s not all the happy talk that the people on Wall Street are the bankers were the government or anyone else is telling you. I’m telling you what’s really going on because of a financial analyst and I know what’s really going on, because that’s what I’ve done for 42 years. I’m not being paid to tell you anything by some political group or business group and telling you the truth. Because I happen to care about business I happen to care about the United States. And I happen to love the world and the people in the world, because I’m basically at the point where I almost have 1 foot in the grave. And so as a result. I’m going to do everything I can to give back as much as I can to the world before, I suddenly not here.

It’s like I wrote in some of my articles were all during my life. I did make a lot of money, because I wasn’t interested in making a lot of money as a financial analyst. I was more interested in giving people who never had the benefit of financial analysis, financial analysis. And like I said, I’ve got a 1930s shortwave radio that I got in barter for one contract. I’ve got a Steelcase desk that I got in barter for another contract. And as I also wrote in one contract. I was working for a man who only owned one gas station. And when I was done, projecting his growth over the next 18 months in figuring out some ways to do things with the extra money he would have every month. He said that he didn’t really have the money to pay me. And I said well why don’t you take me to dinner. And he said that’s it. And I said well, don’t you feel pretty good about getting the kind of financial help that mostly large companies get most of the time? And we shook hands and went to dinner. And that dinner, I actually said to him I said, you are buying me dinner and will call it Jake. And as I said in this other article Jake is a term that used to be used during the Depression in the United States. Between two parties to indicate that everything was going to be square or okay. And so I have used it a lot in my life, because that was one of my father’s favorite terms.

So, what I’m telling you is the truth. Now the important question is whether or not there is going to be a recovery and when. Any recovery that might take place depends on two very significant factors.

1. The first thing that has to happen is that companies mean the banking industry and the insurance industry and most of these morons who are living really high on the hog, need to get it through their brains that they don’t stop demanding these high and compensation packages they’re going to basically ruin the economic system to the point where it simply going to capitulate and fail. And that is one very potential scenario of what lays ahead in the future. If the American market system and the global system doesn’t put up and shut up and stop being interested in how much money can get out of the system rather than how to sustain the system, no recovery will take place. And what will actually happen is that the global system in part or totally will in fact capitulate or fail.

On the other hand give the wealthy and upper class realize that it is in their best interest not to act like a bunch of selfish moneygrubbing bastards what to do everything they can to try to maintain some degree of economic equivalency between the classes as a kind of humanistic and social responsibility pursuant to economic solidarity and stability, then of course the potentiality of a recovery very well might take place sometime around 2011. Meaning that after a full year of the American market system and the global system dealing with the tremendous amount of losses that the whole world is realized. And thereby as a result giving the global economic system. The time that it needs to allow those losses to move all the way through the different processors and all the companies so they can finally be put to rest. Then you’re talking about a possible restructuring but to do a restructured prior to that happening is a mistake because the money hasn’t hit the wall yet.

I mean, the header trillion dollars just in the United States market alone isn’t going to finally make it through all of the cost centers and the companies in the United States where it’s being realized as a result of the initial loss and so probably sometime around December 2000 can and it might take until January of 2011 will, once it does, then we get back to this first consideration whether or not the psychology in the general marketplace of United States is still going to be one of selfishness or if it’s going to change to a point where the movers and shakers are going to realize that if they continue the way they are they won’t have economic system. And so at that point they will do whatever they can to try to make it work. That’s the first consideration.

2. The second consideration is one that has to do with political regimes and political agendas. In the global economic system. You don’t have a completely totally free market system. You have some systems that are what they call a proprietary, or semi-representative free market system. Now one of the system like that is China. Because while China actually enjoys a certain degree of free market activity. The Chinese government is primarily a proprietary representative pursuant to the free market system in China because China of course is a communist nation. The same is said of the Russian economy. When you have nations where they are not totally of free market oriented society, and these countries enter into the free market system, these countries enter into the free market system on the basis of proprietary agreements. And what that basically means is that the psychology in these countries such as these communist countries. With all do respect to these countries and I mean that sincerely have a tremendous hesitation on their part in trusting the total free-market system or capitalism. And of course it makes sense because they’re communist by orientation.

So consequently, for example in China. When China enters into an agreement with companies in United States. The agreements are written with a proprietary rider. And what this basically means is that China is willing to take the risk and entering into an agreement with free-market oriented companies in the West such as United States. But China at the same time, because of their hesitancy of trusting the capitalistic ideology doesn’t want to be put into a position of being untenable pursuant to its own political agenda pursuant to how it runs its country. So, what it does is it sets up the agreements with companies in the United States or companies in the West that when they do business in China if the companies inside China begin to lose money is not the Chinese to lose that money. You of the business is losing money in China it is the headquarters the company in the country where the company is headquartered that actually takes the loss.

Now this is not true. Oddly enough, when a communist country is dealing with another communist country in a semi-proprietary or representative free market system. So in other words, when China is doing business with any of the exchanges or countries in the Pacific off market system, which is all of those countries throughout Asia and their market system’s. These are systems that are in many ways communistic in one way or another. So under those circumstances, there is a little bit of an easier feeling on the part of China. But doing business with those companies. And so as a result, the proprietary agreements are not quite as restrictive as they are when China for example is doing business with countries from the West.

And the obvious question is how do I know this? And the answer to that question is that when pioneer linen supply was doing business as a linen supply company in Cleveland Ohio, my father was a corporate lawyer made many business arrangements with companies overseas to get linen for the wealthy restaurants and so forth in Cleveland Ohio. One of the places that he got linen was from China. So all my father made the legal agreements with China for the linen to be shipped to pioneer. It was I who actually was on the phone with the Chinese once or twice a month to work out the details of shipments and things of that nature. And I did this for probably 15 years. So I got to know how businesses overseas relate to the American market system and vice versa.

So this is the other consideration, which in fact, is somewhat of a major consideration, because inherently in a lot of the communistic countries today. You have a certain amount of corruption that is different than in the Western market systems. And that is because of the nature of how the political superstructure in these countries operates. So that’s why for example with Russia, the government in Russia is run by two extremely intelligent gentleman. And while the United States and Russia have never agreed on political agendas and things of that nature doing business with Russia is really not difficult and is really fairly simple when you ignore a lot of the political rhetoric. And doing business with China can be somewhat the same way. It’s just that you can’t go into any of the conversations with any degree of attitude that places you in the conversation. In any other way other than in complete and total equal footing with the other party. Meaning that when you’re on the phone with someone from China doing business with them. You have to be talking to them like the two of you are exactly equals. And nothing more. That’s how it works.

So these are the two considerations. One consideration is will the psychology of the robber barons in the American market system. Chill out to the point where these idiots with all the money in the American market system will suddenly realize that if they continue to act like selfish bastards, they will destroy the American market system? And the other consideration of course is whether the economies in some of these proprietary, and/or semi-representative free market systems such as China are going to be able to sustain their own market viability, pursuant to the nonproprietary or less limited proprietary agreements that they have within their own market regions. So that those agreements will be enough to keep their market as solid as possible, while the Western markets are working out the rather catastrophic losses that have taken place.

And of course the other element in all this is that people in the Western market system don’t understand that a lot of people in the communistic or the semi-representative free market systems are looking at the capitalistic market systems. And with a certain degree of respect laughing at the free-market systems, because when you watch the market activity in the overnights when I say overnight the mean like the Nikkei and the Hang Seng, use the different types of market activity pursuant to what they’re doing than you do in the American and Western market systems. And this is because the semi-representative market systems have been much more conservative and less reactionary to the catastrophic losses that are going on, and they have been much more restrictive with regard to compensation. And have a great deal more control over compensation than does the free-market system.

And so consequently, a lot of people in the communist countries tend to laugh a little at the free-market system. Because we’ve been acting in the free-market system like a bunch of pigs trying to rush up to a trough to see who could eat first. So, these are the kinds of dynamics that the market is really dependent on. And it’s not what we’re being told by the fancy brainiacs with all the money you claim to be real honest financiers or financial analysts, because are basically lying to. I’m not. But then I don’t have any agendas. They do.

And for anyone who was wondering why I haven’t talked about this earlier in my life. I have. It’s just that most people weren’t listening. I’ve actually been talking about the entire economic situation in the United States and around the world for 40 years. But most people kept thinking it was easier to laugh at me and call me stupid. And of course a lot of those people have gone out of business. It’s like when I was working as a contract analyst doing one small set of fragile analysis for local Price Waterhouse installation here in Cleveland Ohio. And when I got done with the analysis. I explained to one of the people at Price Waterhouse that I could see that there was some economic difficulty ahead for the company because they were like top-heavy as far as compensation packages. And that they had a kind of economic disparity going on within their own company. Between their lower management people and their hourly wages people versus their upper-level management and executives. And I tried to explain to them that if they continued operating that way that the disparity would simply get larger. And they asked why and I said, because when you are compensating people at the high-end of your employment meaning the upper-level management and executives so highly. You end up taking more and more money out of your cash flow, which leads to less money to be able to pay for your bid management and lower management people and your hourly employees. And I said, so, you eventually end up compromising them by having to fire some of them up. And so your company ends up in more trouble.

Their reaction of course was a tell me that I was full of crap. And they went ahead and paid me anyhow. And then of course, what I expected and told them what happened did happen. And they went bankrupt. And when they did one of the people that was in on the meeting. When I told him all this a few years before. When they were on the phone with me was very amazed. Because they couldn’t believe I was actually right. And my question back to them was if you didn’t think I was right than why did you hire me?

So consequently, that is what I see going on economically now as to whether any of you are going to read this. And as to whether any of you are going to even understand what I’m talking about. And also as to whether any of you are going to have so much ego inside yourselves that you’re not to be willing to accept that I might actually know what I’m talking about. Those are huge questions, because I have no idea if you will be able to move your ego out of the way to actually understand that I really might know what I’m talking about that I actually did live through these experiences. And I actually have been doing numbercrunching a financial analyst for 42 years. So I’m not stupid.

So yeah, if the powers that be in the economic community are so arrogant and so selfish that they will simply be much Whatever that I might actually know what I’m talking about, that probably no one will take advantage of what I’m writing here on the other hand. If people are willing to realize that I am almost 60 years old and I’m not stupid and never have been stupid. Then they will use some of what I’m writing here to have a better understanding of exactly what’s going on economically and not only the American market system, but the global system as well.

The choice is up to all of you. I am in bed. I basically have a hard time just walking around. And to not having breathing problems, which is normal. And I have a migraine. And that’s normal to, and I’m having trouble seeing out of one of my eyes because I’m legally blind in one eye. And that’s also normal.

But I’m still doing this dictation, because I really believe that is my duty as a human being to offer my assistance whenever possible. Just like I believe it’s my duty to stand up and defend women’s rights in the United States and around the world, because men and male oriented organizations have become so arrogant and so hateful that they are willing to treat women like nothing but cattle and to literally destroy them. Rather than to give them the same degree of freedom that they are taking for themselves.

And as I said, if I when I go to God or the creator that I’m the make darn will sure that when I go to God or the creator. But I go with a clear conscience. And that means as far as I’m concerned, if I have to die am when I die doing everything I can to defend women’s rights and to help women to stand up and demand from all of the societies throughout the world that they believe these women alone that they leave. You women alone, you don’t deserve to be treated this way you don’t deserve to be told what to do you don’t deserve to be treated as cattle and livestock you don’t deserve that at all and you certainly don’t deserve in the United States to have 5.5 million of you either raped or murdered every year. That’s not disgusting. That’s a national disgrace.

So that’s one doing all these things. Just you know.

Economic Fact Sheet (Current as of Jan. 2010)

1. The United States currently has a national debt in excess of $12 trillion.

2. The interest on the national debt is now in excess of $11 trillion.

3. The operating budget for the United States government is now in excess of $43 trillion.

4. The members of the United States Congress stole $200 million from the Medicare fund, which was going to go for cost-of-living increases to Medicare recipients, so that the members of Congress could have their paper medical records converted to computerized medical records. The attitude by the members of Congress was that they didn’t care if they murdered American citizens as long as they get the medical protection they wanted.

5. The Christian conservatives and the Republican Party are taking the stand that they do not want American citizens to have any kind of healthcare the of healthcare is extended to anyone that the Christian conservatives or the Republican Party does not like. And this is based not on constitutional law or the Christian conservatives and the Republican Party being patriots. It’s based upon the Christian conservatives Republican Party demanding that the American government understand that no Christian conservative or Republican Party member will in any way ever support the US Constitution above their Christian religion and above their Christian Bible. And so as a result, their Christian Bible and Christian religion says that healthcare should not go to Hispanic Americans or black Americans or Jews or Muslims or gay Americans or Native Americans or anyone who is an immigrant that the Christian conservatives Republican Party just doesn’t happen to like.

And so as a result, the Christian conservatives Republican Party members are trying to commit mass murder in United States by denying health care to millions of American citizens who are in desperate need of medical attention. But the Christian conservatives Republican Party doesn’t really care about that because as far as they’re concerned if they have to walk through rivers of blood to make sure that their Christian religion and their Christian faith is supported more than the Constitution of these United States and the Christian conservatives will do just that.

6. The current level of unemployment in the United States is now over 10%.

7. The current cost for liquidating the national debt is now in excess of $39,000 per person, which means that every man woman and child in the United States would have to pay at least $39,000 to be able to liquidate the national debt.

8. When you look at the history of United States from the American Civil War until present day you find that the Republican Party and Christian conservatives were in total and complete control of the United States government every single time there was a financial crisis from the American Civil War to present day. And that basically means that all the policy decisions that were being made by the American government during these times when these financial catastrophes were taking place were being made strictly by Christian conservatives and the Republican Party . And of course that’s all public record. And if the Christian conservatives or the Republican party say that these financial catastrophes were not their fault, That would mean that all the public statements that the Christian conservatives and the Republican party, were making during the times when all these financial disasters were taking place, to the news media and the general public were lies. On the other hand if they say that they were not lying then, that means that they are lying now. But either way you look at, the Christian conservatives and the Republican party are being found out for the liars that they have always been, and that they still are today.

9. As my financial analysis of the global economic system , in my see also section below, clearly shows, it was the Republican Party and the Christian conservatives under President Bush who gave the American banking industry $400 billion of taxpayer money and simply told the banking industry to use the money anyway they wanted to. And the banking industry did just that they use the money to pay for expensive gifts and presents and take vacations.

10. To date, the banking industry has only paid back $30 billion out of the over $500 billion that was given to them by the American taxpayers.

11. The issues of profitability indexing, pursuant to profit margins and per unit costs and customer bases as they relate to compensation packages throughout the entire corporate sector have not been resolved. That basically means that most businesses are being held hostage by upper level management and executive employees in their own companies who are demanding more and more for their compensation packages. As a result of this most companies are having to readjust their per unit costs for their goods and services in such a way so that what they are doing is pricing their services and their products. So that mostly the upper class and the wealthy will be able to afford them. And this is being done so these companies and corporations can get as much money into their company as possible.

But they are in fact forgetting one of the major factors which is that while most of the money that any company gets comes from the wealthy are customers most of their day-to-day cash flow actually comes from the middle and lower income customers. This is true regardless of where that company exists. So as a result of this most of the companies in the corporate sector are operating on what is known as a cash poor basis. And this basically means that since they are pricing their goods and services in order to get the most money possible they are foregoing pricing their goods and services so they will be more affordable to the middle and lower income customers, which actually provide these companies with their day-to-day cash flow. And so as a result, these companies don’t have enough money to pay for employees or many of the other day-to-day costs that come up.

This factor has not been dealt with in any country in the world at this time. Furthermore, these companies are refusing to be honest about their financial reporting. They are constantly using and accounting,/statistical variance, which is .5%. And .5% variance is such a large variance pursuant to statistical and financial analysis that you can basically drive a moving van through the space. That is allocated for plus or minus error correction in the statistical analyses and financial analyses that are in fact done with .5% variance. This is why I have never used that level of variance statistically or financially. I’ve always used .05% variance because it is such a small variance that the statistical analysis of the profitability analysis cannot be falsified. It is true that using .05% variance does require an additional 100,000 to 200,000 calculations in order to be able to complete the analysis. But when you consider that the final product is incredibly more honest and reliable. It’s worth it.

12. The banking industry has turned cruel. For example here in Cleveland Ohio Keycorp is taking a lot of pride and threatening senior citizens and kicking them out of their homes so that they can foreclose on the property. This is happening all over Cleveland Ohio and KeyCorp actually is one of the most hated banks in the entire state of Ohio. But KeyCorp is not the only one who’s doing this practice. Because was really happening is that banks all over the United States are basically threatening senior citizens with foreclosure to the point where suicides are now escalating and accelerating at an alarming rate. So badly that the medical community is swamped by the number of suicide calls they are getting. And this is all happening because KeyCorp and other banks like KeyCorp are basically taking the attitude that they don’t care how many men and women and children they have to murder. They just want their money.

When you consider these kinds of factors are going on in the banking industry you realized that the other thing that’s happening is that senior citizens and homeowners are becoming incredibly sick. Do becoming physically ill as a result of the horrible attitude that KeyCorp in other banks like KeyCorp are pushing on the citizens. And there is no help for this at all.

13. Additionally, the medical community is helping with this because we have a hospital here in Cleveland Ohio called MetroHealth that basically is working hard. Just like KeyCorp to threaten senior citizens and have them thrown out of their homes. So that they can foreclose on the property. And basically kill the individuals. I have been personally threatened by KeyBank and MetroHealth and have recorded conversations proving that.

So MetroHealth does all these commercials where they’re talking about how good a hospital they are and yet they have been sued a number of times for Medicare fraud. They have also been sued by their own employees for unfair business practices. And they have lost doctors so badly because they don’t treat their doctors very well either. Nobody likes MetroHealth.

And for the record, it needs to be understood that my grandfather’s brother, Dr. ally Maschke, was the director of medicine at mount Sinai medical center here in Cleveland Ohio until his death. And my cousin, Dr. Victor Vertese, was also the director of medicine at mount Sinai medical center until his death. Additionally, my grandfather, Maurice Maschke, and his business partner, Mark Hanna, who founded the Hana mining company, which became the 3M company, basically built mount Sinai medical center in Cleveland. And in addition to that, my father, Maurice Maschke Junior, was on the Board of Trustees at Case Western Reserve University, University hospitals of Cleveland, Cleveland clinic, and mount Sinai medical center until his death. And in addition to that, my father, Maurice Maschke Junior, and I., were partners and co-owners of pioneer linen supply company of Cleveland Ohio for 25 years until 1975 when we sold the company.

14. So given all of the foregoing as actual facts. The only reason that the accelerated growth has taken place is because certain industries in the United States have in fact been making money. Only because their industries are addressing sections of the population who are otherwise disenfranchised by most of the business sector. For example Tyco International is a business that specializes and fire prevention and warning systems and security systems. And of course they’ve done a really good job because people are scared to death and living in their homes and there are so many foreclosures going on that people are having to protect their homes because in most cities the number of police has dropped so badly because most cities are in a huge budget crisis. In Cleveland, Ohio, for example, the city went from 1,500,000 people down to approximately 400,000 people in only a matter of months. And conditions are so bad in Cleveland that Cleveland is now charging nine dollars a month just pick up our garbage.

15. Furthermore, as I predicted on May 21, 2009, the American market system had already lost approximately $500 trillion of market value. And, in my journal entry (see my LiveJournal entry of May 21 2009). Then on May 22, 2009, I accurately predicted that the American market system would lose approximately $800 trillion of market value. (see LiveJournal entries of May 22, 2009, entry #1, entry #2, and entry #3, ). And the market did lose that much money. So, I was right. As I have always said. In 42 years of being a financial analyst, I have never been wrong on any financial projection I have ever done. Just like I was not wrong in 2009, with the above projections, I am, by the like term, not wrong now.

So again, it’s really easy for people to talk about how well the market is doing that the foregoing represents the actual facts of what’s going on in business.

And as I said before, I have been studying the stock market since I was six years old. At age 6 I started studied the stock market at Prescott ball and turban here in Cleveland Ohio. With one of the partner broker’s, Bernie Towell, who was a personal friend of mine. And so every day for four hours every day and age 6 until age 16 I studied the stock market and learned economics and financial analysis . At age 16, while working and being a partner and co-owner of pioneer linen spy company in Cleveland, I did my first financial analysis and profitability analysis . It was done on the linen supply company’s of Cleveland Ohio. The analysis was so good that the results were used to program some computers at the time. And in 42 years and having been a financial analyst I’ve never once been wrong in any financial projection I’ve ever done. Not once. Just like I’m not wrong now.

In my financial analysis of the global economic system in my see also section below, I clearly show that the American market system was going to lose $800 trillion of market value in the third business quarter of 2009. I further substantiated this claim last January in January of 2009. When I explained that the American market system was going to take a huge hit in the third quarter and that it would come out to about $800 trillion of market loss. And that this was in fact in line with the Kondratieff wave . And in fact that’s exactly what did happen. Which means the analysts were wrong. And I was right.

Now, it’s important to remember that anyone can say anything about the market that they want. But being able to back up what they say takes an expert. And someone who understands the science of financial analysis. And that’s something I have been doing for 42 years.

Therefore, if you go ahead and look at all these factors without looking at all of the peripheral details than you are going to be responding to the information in a very symptomatic, or symptomatically oriented manner whereby you will behave to the information in an extremely reactionary way. By the like term, if you look at all of the information regarding economics throughout the entire global economic system in a problematically oriented manner you will be looking at the financial information in a more anticipatory manner. And much more pervasive rather than in a stereotypical or linear manner. And as a result, you will begin to understand that all of these different factors that I have brought forth in this article right now. Actually do justify what I’m saying that the American market system is on the verge of collapse. And that the economic system for Greece is about to go under. And that unemployment in Spain and France and England is running at almost 30%.

These do not make things look like they’re going good in the United States is basically doing nothing but lying about the economic they I went to school with most of the people who run a lot of these companies in the United States and who are working on Wall Street either went to school with them at Case Western Reserve why went to school with them at Fort Lewis college board went to school with them at southern Arizona school in Tucson Arizona. Or, I did business with them throughout my life.

So again, this is a reality check. And all I can say is, if you don’t believe what I’m saying that’s not a problem. Because you haven’t believe me, for 40 years, what I’ve been talking about all of these issues facing the economic system in the United States and the global economic system. So why would you believe me now?

But the fact is that just because you may not believe what I’m saying doesn’t mean that what I’m saying is not true. Simply means you are refusing or are not able to see the veracity in what I’m saying and that’s all it means.

economics log

Monday, March 1, 2010

U.S. consumer spending up again (Reuters)

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