Markets dropped again this week as fears of a Greece collapse bring much of Europe into question, and when JPMorgan announced they had lost $2 billion in the first quarter on market trading.
JPMorgan bank posted a $2 billion loss on market trading in the first quarter. How is this legal? Why have we not reinstated Glass- Steagall, the 70 year old law that kept banks from gambling with depositors money? Why was it repealed in the first place? Why is no one going to jail? In fact, why is no one even fired? In these times of high unemployment, tight money and growing debt, why do we allow these Wall Street children to play with economic dynamite?
Greece's elections resulted in a split government that has failed to elect a prime minister. So, they will have new elections the first week of June. Current polls suggest the socialist party Syriza will improve their position to a point where they can likely form a leftist government. Their leader, ex-communist Tsipras, says Europe is bluffing when they talk of cutting off aid to Greece - he will set up a $250 billion game of chicken. This could mean the end of Greek austerity, and the end of Greece's membership in the Euro. Europeans think they can handle a Greek exit; many non-Europeans are skeptical. Everyone agrees that Greece exiting from the Euro will result in a huge depression in Greece with inflation, unemployment, hospital failures, and perhaps a series of failed governments. It's almost impossible to predict a happy outcome for Greece at this point: it seems the EU is determined to make an example of the Greeks.
Politics in Europe are becoming split, bifurcated. There is a growing fraction of the electorate moving to the left, to the socialist and labor oriented parties who want an end to austerity and more bailouts by the European Central Bank. At the same time there is a growing movement of other voters to the right, who believe you cannot solve a debt crisis with more debt, and who want recent and illegal immigrants tossed out. Especially Muslims. Nazi-like parties are growing into getting double digit vote percentages. Voters in the center are becoming an endangered species. It's worth remembering that the last depression had a similar split in politics, and not every country turned to the left. Even in France, a very liberal country by US standards, Marine le Pen and her National Front party got 18% of the vote in the election last week campaigning on a platform to throw out Muslims.
Soon Europeans are going to understand why we Americans have so much trouble governing our country: you can't get 51% of our electorate to agree on a pizza, much less major government policies like medical costs, taxes, military funding, budget deficits. Why this split? I think it's because no one has any clue what to do to fix this. Liberals hope that if the Government supports the economy by spending, then business will recover and jobs lost to automation and third world countries will return. I see no hope for that, buying time with debt will not bring back jobs in my opinion. Conservatives think if the government cuts spending and quits running up deficits, then we will have a Reagen-like recession followed by more good times. Again, I see no hope for that, the jobs lost to automation and third world countries are gone forever, we are facing a generation of high unemployment, perhaps even a generation of our youth lost to an economy where they can't find a decent paying job, college degreed or high school dropout. I have few answers, and most of what I think would help is anathema to the electorate, like no citizenship for children of illegals and actual consequences for teenage unwed mothers who go onto welfare - and their parents. But I'm admitedly a lone voice in the wilderness; politicians and economists both liberal and conservcate seem to agree that we need a growing population to get ourselves out of this mess. I'm the only one I know who thinks more children born into poverty to unwed and uneducated parents will simply drag the problem out for another generation or three. It seems completely obvious to me that the world is already overpopulated at seven billion, and the projected ten billion population of twenty years from now will be only much worse.
David Stockman, the budget director under Reagen, is plugging his new book. He had some interesting things to say in a recent interview.
California's budget deficit is back up to $16 billion, in spite of raised taxes and tuitions. The liberal California government continues to believe if they just survive this one year at a time it will get better on its own and they won't have to quit paying out one third of the entire US welfare. The democrats wish to raise taxes further on the already most highly taxed electorate in the nation, and any cuts will Senate President Darrell Steinberg said Saturday. "We know that more cuts are inevitable but we will do our very, very best to save more than we lose, especially for those in need." Governor Brown's proposed cuts include a K-12 school year shortened by up to three weeks, higher college tuition fees and reduced funding for police and courts. Send us your tired, your poor, The wretched refuse of your teeming shore. We'll educate the best of them as scientists and engineers and then refuse them visas. The uneducated unwed mothers and their teeming children can stay.
A new poll indicates that the average American thinks that they will have to work until age 80 before they can retire. The average life expectancy is 78. The average American now believes he will have to work two additional years before he can afford to be dead.
Known oils reserves on the Earth will keep current civilization going for about 45 more years, not quite until 2060. That presumes oil consumption in China and India don't rise, a rather optimistic presumption. From where will this last fix of oil come?
|1||Saudi Arabia||265 billion barrels|
|2||Venezuela||211 billion barrels|
|3||Iran||137 billion barrels|
|4||Iraq||115 billion barrels|
|5||Kuwait||102 billion barrels|
|6||UAE||98 billion barrels|
|7||Russia||77 billion barrels|
|8||Libya||46 billion barrels|
|9||Kazakhstan||40 billion barrels|
|10||Nigeria||37 billion barrels|
|11||Canada||32 billion barrels|
|12||USA||31 billion barrels|
|13||Qatar||26 billion barrels|
|14||China||15 billion barrels|
|15||Brazil||14 billion barrels|
|Total||1246 billion barrels|
Notice in the table above that we have already had a war with #4, Iraq, and we're getting set to have a war with #3, Iran. Europe has had a war with #8, Libya. And after 911 the Saudis scrambled hard and fast to make sure we didn't start a war with them. If these countries didn't have oil, how many people would be able to spell their names? If I ran Venezuela, I would keep a lower profile than Venezuelan president Chavez does. What will replace oil? Wind, tide, solar, geothermal. . . but 90% will be coal and nuclear, the dirty power of last century.