Tag Archives: stock bubble

Are The Wheels Coming Off The System?

The dollar is said to be “soaring,” though I take issue with that characterization for now (see the chart below);  10-yr Treasury yields are also rising, though the yield on the 10-yr is only up about 67 basis points if you measure from January 1, 2017.  What’s really going on?

Ten years of money printing by the Federal Reserve has removed true price discovery from the markets.  The best evidence is the inexorable rise in the stock market despite the fact that corporate earnings have been driven largely by share buybacks and GAAP accounting gimmicks.  Measuring stock values  on the basis of revenue and revenue growth multiples would reveal the most overvalued stock market in U.S. history.

Now that the Fed has stopped printing money used to buy Treasury issuance and prop up the banks, the system is vulnerable to relatively small increases in interest rates.  20 years ago, when I was trading junk bonds on Wall St, a 60 basis point rise in the 10yr or a 200 basis point rise in the dollar index would have be a non-event.  Now those types of moves permeate the current market and policy narrative.

In fact, the Fed is terrified by the Frankenstein stock market is has created to the extent that, since the sharp decline in August 2015, the Fed steps in to prevent the inevitable crash when a draw-down in the Dow/SPX approaches 10%.

With the dollar moving higher, gold is has been sluggish. Now the price is being attacked aggressively in the paper gold derivatives market.  The propaganda is that a rising dollar and rising rates are negative for gold.  However, gold had one of its best rate or return periods from mid-2005 to mid-2006 while the dollar was spiking higher.  More troubling, the trading pattern in gold and the dollar reminds me of the same pattern in 2008 – just before the de facto financial system collapse hit the hardest (click on image to enlarge):

The economy has been in a recession for most households below the top 1% in wealth and income. This chart is one of many examples showing that most households are not even fortunate enough to be living on the economic gerbil wheel. Instead, they are sliding backwards downhill in their debt/lease-saddled vehicle and the brakes are about to go out:

I would argue that the rising dollar – an concomitantly the obvious official attack on the price of gold – is the signal that the wheels are coming off the system. The Government issued nearly half-a-trillion dollars in Treasuries in Q1, thanks to the soaring defense and entitlement budget  combined with the massive tax cuts. The spending deficit and the flood of Treasury issuance is going to get worse from there and well beyond the CBO’s sanguine projections.

Throw in soaring oil and gasoline prices and rising household debt delinquency/default rates against a backdrop of stagnant wages and an accelerating ratio of household debt service payments to personal income and it’s pretty obvious that the wheels are coming off the system.

The U.S. economic and financial system is an enormously fraudulently Ponzi scheme in which record levels of money printing and credit creation have acted as temporary bandages placed over gaping cancerous economic wounds that are soon going to start hemorrhaging.

The homebuilders are already in a bear market, like the one that started in mid-2005 in the same stocks about 18 months before the stock market started heading south in 2007. My Short Seller’s Journal subscribers and I are raking in a small fortune shorting and buying puts on homebuilder stocks. As an example, I recommended shorting Hovnanian (HOV) at $2.88 in early January. It’s trading at $1.78 as I write this – a 38.2% ROR in 4 months. Anyone get that with AMZN in the last 4 months? You can learn more about the SSJ here: Short Seller’s Journal.

Sparks Fly Toward The Debt Powder Keg

The stock market has gone 74 days without making a new high but that hasn’t stopped the bulls from boasting about how it is up or flat six days in a row. I still say to sell into strength – David Rosenberg, Gluskin-Sheff

The narrative that the economy continues to improve is a myth, if not intentional mendacious propaganda. The economy can’t possibly improve with the average household living from paycheck to paycheck while trying to service hopeless levels of debt. In fact, the economy will continue to deteriorate from the perspective of every household below the top 1% in terms of income and wealth.

Theoretically, the Trump tax cuts will add about $90 per month of extra after-tax income for the average household. However, the average price of gasoline has risen close to 40% over the last year (it cost me $45 to fill my tank last week vs about $32 a year ago) For most households, the tax cut “windfall” will be largely absorbed by the increasing cost to fill the gas tank, which is going to continue rising. The highly promoted economic boost from the tax cuts will, instead, end up as a transfer payment to oil companies.

The Fed reported consumer credit for March last week. Consumer credit is primarily credit card, auto and student loan debt. The 3.6% SAAR (Seasonally Adjusted Annualized Rate) rate of increase over February was the slowest growth rate in consumer debt since September. Credit card debt outstanding actually dropped 3% (SAAR). But the 6% growth in non-revolving debt – auto/student loans – rose 6% (SAAR). Given the double-digit increase in truck sales in March, which offset the double digit decline in sedan sales, it’s safe to speculate that the increase in consumer credit during March was primarily loans to “buy” trucks/SUVs.

Remember, the average light truck/SUV sales ticket is about $13k more than for a sedan, which means that the average size of auto loans in March increased significantly during March. This is a horrifying thought in my opinion. Here’s why (original chart source was Wolfstreet.com):

As you can see, the rate of subprime 60-day-plus delinquencies is nearly 6%, which is substantially higher than during the peak financial crisis years. Why is this not directly affecting the system yet? It is but we’re not seeing it because the banks are still sitting on unused “excess reserves” – pain killers – that were given to them by the Fed’s QE program. The excess reserves act to “buffer” the banks from debt defaults, which in turn enables the banks to defer taking these auto loans into foreclosure and writing them off. But this will only serve to defer the inevitable:  debt defaults in quantities that will far exceed the amount of debt that blew up in the 2008 financial crisis.  Bank excess reserves are down 13% since August 2017.

I knew at the time that the Fed’s QE program was a part of the Fed’s strategy to build a “cushion” into bank balance sheets for the next time around. The only problem is that the size of the debt bomb has grown disproportionately to the size of the “cushion” and it’s only a matter of time before debt defaults blow a big hole in bank balance sheets.

Here’s the other problem with the statistic above. The regulators, along with FICO, lowered the bar on differentiating between prime and subprime. Despite the supposed effort to tighten lending standards since 2008, it’s just as easy to get a loan now as it was in 2007 and the variables that differentiate sub-prime from prime have blurred. I witnessed this first-hand when I accompanied a friend to buy a near-new car from a major Audi dealer in Denver. Based on monthly income, I advised him to buy a less expensive car. But Wells Fargo was more than happy to make the loan with very little money down relative to the cost of the car. No proof of income disclosure was necessary despite being self-employed. The friend’s credit rating is a questionable mid-600’s

This is the type of loan transaction that occurs 1000’s of times each day at car dealers across the country. If we had gone to one of the seedy “finance any credit” used car dealers, getting the loan would have been even easier because those car brokers also use credit unions and other non-bank private capital “pools” like Credit Acceptance Corporation (CACC) and Exeter Finance (private).

Student loans are not worth discussing because no one else does. Someone with a student loan outstanding can easily put the loan into “deferment” or “forbearance,” which makes it difficult to assess the true delinquency/default rate on the $1.53 trillion amount outstanding (as of the end of March). However, I have seen estimates that the real rate of serious delinquency is more like 40%. Most borrowers who defer or request forbearance do so because they can’t make current payments. Again, this is one of the bigger “white elephants” that is visible but not discussed (the $21+ trillion of Treasury debt is another white elephant).

The debt bubble and implosion will push homebuilder stocks off the cliff.   Several of my subscribers plus myself are raking in money shorting and buying puts on homebuilders stocks.  I took 50% profits on the puts I bought late last week.

The commentary above is an excerpt from last Sunday’s Short Seller’s Journal. My Short Seller’s Journal is a unique newsletter that presents the alternative to the “bull” case. It also presents short ideas, along with put strategies, every week. You can learn more about this newsletter here:  Short Seller’s Journal information.

 

Amazon And Tesla Reflect Deep Fraud Throughout The Financial System

Not much needs to be said about Tesla.  Elon Musk’s performance on the Company’s conference call speaks for itself.  He basically told the lemming analysts who have been the Company’s Wall Street carnival barkers to go have sex with themselves in response to questions looking for highly relevant details on Model 3 sales projections and Capex spending requirements.

I believe Musk is mentally unstable if not mildly insane.  He would do the world a favor if he gathered up what’s left of his wealth and disappeared into the sunset.  When Tesla collapses, I hope analysts like Morgan Stanley’s Andrew Jonas are taken to court by class-action hungry lawyers.  My response to something like that would be justified schadenfreude.

Amazon is similar story on a grander scale of accounting fraud and fantasy promotion. AMZN reported its Q1 numbers Thursday after the close. It “smashed” the consensus earnings estimate by a couple dollars, reporting a questionable $3.27 per share. I’m convinced that Jeff Bezos is nothing more than an ingenious scam-artist of savant proportions, as this is the second quarter in a row in which AMZN reported over $3/share when the Street was looking for mid-$1 per share earnings.

I bring this to your attention because there’s something highly suspicious about the way Bezos is managing the forecasts he gives to Street analysts. Every company under the sun in this country typically “guides” analysts to within a few pennies, nickels or dimes of the actual EPS that will be presented. For the Street to miss this badly on estimates for AMZN two quarters in a row tells me that Bezos is intentionally misleading the analyst community, which typically hounds a company up until the day before earnings are released. Food for thought there.

I don’t want to spend the time dissecting AMZN’s numbers this quarter in the way I have in
past issues. This is because the earnings manipulation formula remains constant. One interesting detail that Wall St. will ignore is the fact that AMZN’s cost of fulfillment as a percentage of product sales increased to 24.6% vs 19.7% in Q1 2017. It cost 25 cents per dollar of e-commerce revenue vs 20 cents per dollar of revenue a year ago to deliver an item from the warehouse shelf to the buyer’s door-step. Apparently all of the money Bezos spends on fulfillment centers ($2.3 billion in Q1) is not reducing the cost of delivery as promised.

The financial media flooded the airwaves with hype when Bezos announced that AMZN Prime had 100 million subscribers. However, the fact that the cost of fulfillment increased 500 basis points as percent of revenue generated tells us that AMZN is losing even more on an operating business on Prime memberships. I love ordering $10 items that are delivered in 2-days because I know that AMZN loses money on that transaction.

For “product sales” in aggregate (e-commerce + Whole Foods + the portfolio of crappy little service businesses) the operating margin increased to 1.16% of sales vs. 0.3% of sales in Q1 2017. HOWEVER, in acquiring Whole Foods, AMZN folded a 5% operating margin business into its revenue stream. It should have been expected that AMZN’s operating margin would increase this year. I’m surprised that folding in a 5% business did not boost AMZN’s operating margin even more. See the cost of fulfillment. In effect, Bezos used positive cash flow from WFM to subsidize the growing cost of Prime fulfillment. I also suspect that Bezos will be running WFM’s margins into the ground in an effort to boost revenues. The prices of WFM’s house-label brands were slashed immediately. AMZN’s stock is driven off of revenue growth and Bezos does not care if that means sacrificing profitability.

What’s mind-blowing is that big investors have let him get away with this business model for nearly two decades.  If the Fed and the Government had not printed trillions starting in 2008, Amazon’s grand experiment would have expired.  More than any company or business on earth, Amazon is emblematic of a fiat currency system that has gone off the rails combined with Government-enabled fraud of historic proportions.

So far, AMZN has not segmented the revenues from the WFM business in its footnotes. I doubt this will occur despite the fact that it would help stock analysts understand AMZN’s business model. Again, the conclusion to be made is that Bezos will push WFM’s operating margins toward zero, which is consistent with the e-commerce model. Hiding WFM’s numbers by folding them into “product sales” will enable Bezos to promote the idea that Whole Foods is value-added to AMZN’s “profitability.” In truth, I believe WFM was acquired for its cash – $4.4 billion at the time of the acquisition – and for the ability to hide the declining e-commerce margins for a year or two.

In terms of GAAP free cash flow, AMZN burned $4.2 billion in cash in Q1 compared to $3.6
billion in Q1 2017. Again, this metric helps to prove my point that Bezos sacrifices cash flow in order to generate sales growth. Not only does AMZN now have $24.2 billion in long term debt on its balance sheet, it has $22.2 billion in “other liabilities.” This account is predominantly long-term capital and finance lease obligations. This is a deceptive form of debt financing, as these leases behave exactly like debt in every respect except name. One of the reasons AMZN will present “Free Cash Flow” at the beginning of its earnings slide show every quarter is because it excludes the repayment of these leases from the Bezos FCF metric. However, I noticed that AMZN now sticks a half-page explanation in its SEC financial filings that explains why its FCF metric is not true GAAP free cash flow. A half-page!

In effect, AMZN’s true long term debt commitment is $46.4 billion. Funny thing about that, AMZN’s book value is $31.4 billion. One of the GAAP manipulations that AMZN used to boost its reported EPS is it folded most of the cost of acquiring WFM into “Goodwill.” Why? Because goodwill is no longer required to be amortized as an expense into the income statement. For presentation purposes, this serves to increase EPS because it removes a GAAP expense. Companies now instruct their accountants to push the limit on dumping acquisition costs into “goodwill.” But most of the $13 billion in goodwill on AMZN’s balance sheet was the cost of acquiring WFM, which required that AMZN raise $16 billion in debt.

Regardless of whether or not WFM is profitable for AMZN over the long term, AMZN will still have to repay the debt used to buy WFM. In other words, the amount thrown into “goodwill” is still an expense that has be paid for. For now, AMZN has funded that expense with debt. If the capital markets are not cooperative, AMZN will eventually have a problem refinancing this debt.

In summary, the genius of Bezos is that he’s figured out how to generate huge revenue growth while getting away with limited to no profitability. Yes, he can report GAAP net income now, but AMZN still bleeds billions of dollars every quarter. It’s no coincidence that Bezos’ scam mushroomed along with the trillions printed by the Fed tat was used to reflate the securities markets. For now, Bezos can get away with telling his fairytale and raising money in the stock and debt markets. But eventually this merry-go-round will stop working.

The tragic aspect to all of this is that a lot of trusting retail investors are going to get annihilated on the money they’ve placed with so-called “professional” money managers. I don’t know  how long it will take for the truth about Amazon to be widely understood, but Tesla will likely be a bankrupt, barring some unforeseeable miracle, within two years.  Perhaps worse is that the fact that people appointed to the Government agencies set up to prevent blatant wide-scale systemic financial fraud like this now look the other way.  It seems the “paychecks” they get from the likes of Musk and Bezos far exceed their Government pay-scale…

When you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed.  – Francisco D’Anconia “Money Speech” from “Atlas Shrugged”

“The System Will Have To Collapse”

The public pension fund system is approaching apocalypse.  Earlier this week teachers who are part of the Colorado public pension system (PERA) staged a walk-out protest over proposed changes to the plan, including raising the percentage contribution to the fund by current payees and raising the retirement age.   PERA backed off but ignoring the obvious problem will not make it go away.

Every public pension fund in the country is catastrophically underfunded, especially if strict mark-to-market of the illiquid assets were applied. Illinois has been playing funding games for a few years to keep its pension fund solvent.  In Kentucky, where the public pension fund is on the verge of collapse, teachers are demanding a State bailout.

If the stock market were sustain a extended decline of more than 10% – “extended” meaning several months in which the stock market falls more than 10% – every public pension in the U.S. would collapse.  This is based on an in-depth study conducted by a good friend of mine who works at a public pension fund.  He has access to better data than “outsiders” and I know his work to be meticulous.   Please note that the three big market declines since August 2015 were stopped at a 10% draw-down followed by big moves higher.  The current draw-down was stopped at 10% but subsequent outcome is to be determined. My friend and I are not the only ones who understand this:

The next phase of public pension reform will likely be touched off by a stock market decline  that creates the real possibility of at least one state fund running out of cash within a couple of years. – Bloomberg

I know a teacher in Denver who left her job that was connected to PERA in order to take a lump-sum payout rather than risk waiting until she retired to bankrupt pension plan. She took a job in the Denver school system, which is not part of the PERA system. She’s actually thinking about teaching in Central America, where there’s high demand for English-speaking teachers and the pay relative to the cost-of-living is much higher:

“Teaching sucks right now.  Teachers are underpaid for the work we’re doing.  After all of these years, I’m making about $60,000. That’s BS! I have a masters. Truthfully, the classroom is burning me out right now. The f#cked up world is spilling into kids’ lives. They’re largely defiant and off-track. I don’t have the energy to try to streamline whole classrooms.”   In reference to the pension system: “When the mother f#cking-f#ck is any of this going to be corrected?!?! I am beyond mad.  Ecuador has become an option, because this country is beyond f#cked up.”

Unfortunately, I was compelled to answer with the truth – a truth she already knows:  “It won’t be corrected. The system will have to collapse and then who knows what will happen. Criminals run everything now and the people who are supposed to enforce Rule of Law are well paid to look the other way. This has been building for at least 2 decades. It doesn’t help when the President is caught shoving a cigar up a staff interns vagina and then a joke is made of it in Congress. “Is oral sex, sex?” Answer: “it depends on what the meaning of the word ‘is,’ is.”

Now the corruption and fraud is out in the open and there’s nothing that can be done about it. The system will have collapse – its the final solution.

Tesla (TSLA): “It’s Not A Lie If You Believe It”

TSLA stock has levitated on statements from Elon Musk that TSL A would be cash flow positive by Q3, an announcement that TSLA would roll out a Model Y “crossover” SUV by November 2019 and the reiteration of ambitious Model 3 production milestones. All three will never happen.

Elon Musk’s attorneys must be giving Elon the same advise given to Jerry Seinfeld by George just before Jerry took a polygraph test: “Elon, just remember, it’s not a lie if you believe it it.”

It looks like reality is catching up to TSLA and TSLA is going into a death spiral.  An amended complaint to an existing class-action suit against the Company, Musk and the CFO was filed. The suit accuses Musk and the CFO of knowingly making false and misleading public statements with regard to production and quality targets for all of TSLA’s models. The amended complaint includes testimony from several former employees.  The amended allegations give the lawsuit far sharper teeth than the original court filing. When I find the time, I’m going to read the entire court filing.

In addition, recently a judge denied Elon Musk’s request to dismiss a class-action suit stemming from TSLA’s acquistion of Solar CIty (which is turning into a disaster) against Musk and TSLA’s board

As for TSLA generating positive cash flow by Q3 and avoiding the need to raise more money, I found an analysis of TSLA’s current liabilities which shows TSLA’s current cash position is worse than it appears.

At the end of 2017, TSLA showed a cash balance of $3.3 billion. Of that, 25% or $840 million is refundable customer deposits. Another $1.3 billion is current payables which are due over the next few months. This includes $753 million owed for equipment, $378 million in payroll and $185 million in taxes payable. Netting out customer deposits and the accrued payables, TSLA’s net cash position at the end of 2017 was $1.3 billion.

TSLA’s current assets minus current liabilities showed a working capital deficit of $1.1 billion at year-end. TSLA generates a cash loss on every vehicle sold. It’s highly likely that TSLA’s cash net of current cash payable obligations is now well under $1 billion. Elon Musk must have taken LSD before he made the announcement that TSLA would be operating cash flow positive and would not need to raise money in 2018.

Although nothing would surprise anymore in this market, I just don’t see how TSLA breaks higher from the current chart formation. Lawsuits are piling up. Last week the NTSB kicked TSLA out of its participation in the NTSB’s investigation of that fatal accident involving a Tesla in California. The NTSB stated that TSLA violated agency protocols. Consumer Union, the consumer advocacy division of Consumer Reports, issued a report last week which stated that Tesla needs to improve the safety of its autopilot. On top of all of this, I’m convinced that Elon Musk, based on his erratic and volatile behavior, is certifiably insane.

Insane Valuations On Top Of Insane Leverage

The recent stock market volatility reflects the beginning of a massive down-side revaluation in stocks. In fact, it will precipitate a shocking revaluation of all assets, especially those like housing in which the price is driven by an unchecked ability to use debt to make the “investment.” This unfettered and unprecedented asset inflation is resting precariously on a stool that is about to have its legs kicked out from under it.

The primary reason the U.S. is now holding a losing hand at the global economic and geopolitical “poker table” is that this country has been committing too many sins for too long for there not to be a price to be paid. With bankrupt Governments (State and Federal), a bankrupt pension system, a broken healthcare system, all-time high corporate and household debt levels and a broken political and legal system, the U.S. is slowly collapsing. This is the “perfect storm” for which you want to own plenty of gold, silver and related stocks.

Eric Dubin and I are producing a new podcast called, “WTF Just Happened?” The inaugural show discusses the topics mentioned above:

“WTF Just Happened?” w/ Dave Kranzer and Eric Dubin is produced in association with Wall Street For Main Street       –       Follow  Eric here: http://www.facebook.com/EricDubin

Why Trump Won: People Vote Their Wallets

This commentary is emphatically not an endorsement of Trump as President.  I have not voted since 1992 because, when the system gives the public a Hobson’s Choice, voting is pointless.

An  age-old adage states that “people vote with their wallets.”  The chart below suggests that this adage held true in 2016:

The graphic above (sourced from Northman Trader) was prepared by Deutsche Bank and the data is from the Fed. It shows that, since 2007 through 2016, U.S. median household net worth declined between 2007 and 2016 for all income groups except the top 10%.

Given that a Democrat occupied the Oval Office between 2008-2016, and given that the economic condition of 90% of all households declined during that period, it follows logically that empty promises of a Republican sounded better to the general population of voters than the empty promises of a Democrat.

In other words, the “deplorables” didn’t vote for Trump because they wanted a wall between the U.S. and Mexico or they wanted to nuke North Korea off the map, they voted for a Republican because the previous Democrat took money from their savings account.

The rest of the propaganda and rhetoric  connected to the 2016 election, which was elevated to previously unforeseen levels of absurdity, was little more than unholy entertainment that served to agitate the masses.  These two graphs explain a lot about the outcome of the 2016 “election.”

Economic, Financial And Political Fundamentals Continue To Deteriorate

I’ve been writing about the rising consumer debt delinquency and default rates for a few months.  The “officially tabulated” mainstream b.s. reports are not picking up the numbers, but the large credit card issuers (like Capital One) and auto debt issuers (like Santander Consumer USA) have been showing a dramatic rise in troubled credit card and auto debt loans for several quarters, especially in the sub-prime segment which is now, arguably the majority of consumer debt issuance at the margin.  The rate of mortgage payment delinquencies is also beginning to tick up.

Silver Doctor’s Elijah Johnson invited me onto his podcast show to discuss the factors that are contributing to the deteriorating fundamentals in the economy and financial system, which is translating into rising instability in the stock market:

If you are interested in learning more about my subscription services, please follow these link: Mining Stock Journal / Short Seller’s Journal. The next Mining Stock Journal will be released tomorrow evening and I’ll be presenting a junior mining stock that has taken down over 57% since late January and why I believe, after chatting with the CEO, this stock could easily triple before the end of the year.

“Thanks so much. It was a pleasure dealing with you. Service is excellent” – recent subscriber feedback.

Short Sell Ideas: Will Overstock.com End Up At Zero?

Overstock’s attempt to capitalize on “blockchain mania” appears to have fallen flat. The SEC is investigating it ICO fund-raising scheme and a class-action lawsuit has been filed in connection with the deal. OSTK finally announced today that it was pulling its attempt to unload 4 million shares on the public. This is after a failed effort to sell its e-commerce business. Meanwhile, OSTK’s operating losses are mounting, including a big loss in Q4, a period in which retailers can put on a blind-fold and make money.

I believe OSTK can be profitably shorted at its current price of $33 if you are willing to endure periods in which the stock might respond to highly promotional announcements from the Company that would cause the stock to spike up temporarily. My ultimate price target is below $10.

As I write this (Thursday, March 29th), CNBC is reporting that Overstock has canceled its 4 million share offering, though the Company has not issued a formal press release to that effect. The reason given is “market conditions.” If this is true, in my view, it means that a lack of demand at the current stock price – $37 – would have necessitated pricing the deal significantly lower in order to place the shares. I would suggest that this indicates that OSTK stock is headed lower anyway.

Seeking Alpha published my anlysis on OSTK, you can read the rest of here: Overstock.com: An Epic Short Opportunity

You can learn about short ideas in the Short Seller’s Journal, a weekly newsletter that provides insight on the latest economic data and provides short-sell ideas, including strategies for using options. You can learn more about this newsletter here: Short Seller’s Journal information.

It’s Not The Trade Wars That Should Worry You

Trade wars historically have been symptomatic of more profound underlying problems. Primarily economic in nature. Any big war in history can be tied to economic roots. The degree to which the U.S. financial and economic system is self-destructing varies inversely with the amplitude of the propaganda promoting the opposite.

Yet, in 2016 based on the latest annual W-2 numbers available (SSA.Gov), 55% of worker earn less that $34k per year; 80% of all Americans earn less than $63k per year. Based on the BLS’ labor force participation rate, 37% of all working-age Americans were not considered part of the labor force. But wait, you’re not considered part of the “labor force” if you have not actively looked for a job in the past four weeks.

Just based on these attributes, how is it all possible that the U.S. economy is “healthy and growing?” I’ve left out the fact that household debt hits a new record every month. The average car loan outstanding is $31k. How does that compare to the income numbers? This means that, on average, 80% with a car loan have an outstanding balance that is about 50% of their annual salary. What would happen to the economy if the Government were unable to issue more Treasury to fund the accelerating spending deficit? Sorry to break the news but the economy is collapsing…

Trump’s solution to this is to give us the three-headed neo-con monster called Bolton, Pompeo and Haspel. All three are drooling to drop nukes, spy on U.S. citizens and torture anyone who disagrees with U.S. imperialism.

Paul Craig Roberts posted a must-read article by Stephen M. Walt:

[T]he departures of Tillerson and McMaster and the arrivals of Bolton, Pompeo, and Haspel herald the ascendance of a hawkish contingent that will tear up the Iran deal, reinstate the torture regime, and eventually start a war with North Korea that goes way beyond a simple “bloody nose.” And with Bolton in the White House, Trump is going to be advised by a guy who never saw a war he didn’t like (when observed from a safe distance, of course)…Let me be clear: Bolton’s appointment is on par with most of Trump’s personnel choices, which is to say that it’s likely to be a disaster

You can read the rest of this here: Welcome To The Dick Cheney Administration

Upon reading that commmentary, you’ll understand why it’s not the trade wars that keep up at night…