Wednesday, August 6, 2008
Peak Middle Class
Before I get into my "Peak Middle Class" diatribe...
The markets have been doing their best to make me look dumb. Happens all the time.
I cannot imagine how the Fed's admission that they cannot raise rates has caused the recent rally in the U.S. $ and the massive decline in commodity prices of late. No clue. I know the market is always right, so when it stops making sense, you have got to just get out of the way. Energy equities have cratered while banks have surged. In this regard, I take my hat off to the Fed. I thought they were powerless and clearly I was wrong. The old saying "don't fight the Fed" is ringing in my ears at the moment. Some of the energy equities might deserve their new valuation. The Big Oil Co's, the ones that can't seem to say the words "Peak Oil" but keep missing their production numbers - they don't look like great long term investments at the moment. Not that they might not have "trading buy" stamped all over them...
Usually things that don't make sense don't last very long in the markets. Investors, by and large, are for the most part pretty sharp. But things don't change over night, either. Also, Oil seems to move EVERYTHING in the commodity complex.
Speaking of Oil... why would Oil for delivery in 2016 be $4 lower than Oil for delivery next month? If you believe in "Peak Oil" opportunities abound.
In doing my usual reading it occurred to me that the "Peak" is probably in for the Middle Class ("MC"). Pretty simple really. In the U.S. the population of people unemployed, seeking government assistance, losing their homes, (the SOL) etc... is increasing and their numbers are coming out of another demographic - the MC. In an environment of declining Oil imports into the OECD countries, and the U.S. in particular, will this population ever be able to reverse that trend? NAFC.
There are not enough "Rich" falling into the MC to make up for the MC's that fall into the SOL.
The political implications could not be more stark.
Folks in the SOL are going to demand services. Extended unemployment, Medicaid, Food Assistance, etc... from state governments that have over promised retirement pension and healthcare benefits to current and retired state employees. These 2 groups are populated with "Believers" that the State can and will provide.
Taxes to fund this mess come from the MC. Didn't we just agree that they their numbers are shrinking? So now we have an EXPANDING group of VOTERS that fully EXPECT that their new Lord will provide, and a decreasing group of VOTERS that are expected to work harder to pay their "fair share", even though they cannot make ends meet.
This is going to be interesting.
I live in Florida, and we have a law here called the "Stand your ground" law. Simply stated the law says that individuals do not have a duty to retreat when threatened or confronted. And that if they feel threatened they can use force to neutralize the threat - including deadly force. Forget for a moment whether you agree or not... that is the LAW OF THE LAND.
Stay with me, I am going somewhere with this...
This morning it was reported that an off duty Federal Customs Agent was shot to death in a parking lot after an argument with another man in Post Office in Pembroke Pines.
OK so far? Stay with me...
So far no witnesses have come forward. We have no idea what might have happened in this incident. I already mentioned that Florida has a "Stand your ground" law. Now, I do not wish to speak ill of the dead, and I have NO IDEA what transpired, but isn't it possible that the Customs Agent bullied or threatened the other man? Are Law Enforcement personnel perfect?Come on, they suffer from alcoholism, divorce, depression, etc... to greater degree than the general population. Are they above the law? (Well, yes, but that's not the point...)
Stay with me...
If you or I had been shot in this incident, would the government mobilize a 200 HUNDRED MAN DRAGNET and 2 Black Hawk helicopters? Not a F%$##!!! chance. Is this Customs Agent more important than you or me? Does have special rights? You bet he does. He is the GOVERNMENT. He has STATUS. He was not killed in the line of duty. He was shot in an argument at the post office... Maybe he had a little anger problem, who knows?
So here is my point.
Our Federal, State, and local governments are bleeding from every orifice in the body politic. Do you have any idea how much this 200 man mobilization cost the tax payers? If it was, in fact, a crime by all means law enforcement should attempt to apprehend the perpetrator. And if these 200 members of Law Enforcement wish to volunteer their time to get the bad guy that killed their friend, by all means, I would applaud their effort. IF, IN FACT he is a "bad guy", and was not simply defending himself from a bigger, more aggressive threat in the parking lot at the post office. Either way, I wouldn't give 50/50 odds he gets taken alive...
I would be very willing to wager a significant amount of money that if this was an unpaid venture, their would be a handful of volunteers, not 200.
Government has an open purse of tax payer money and no one is managing the cost/benefit analysis. New roads are going in, even though total vehicle miles are down. Money is being thrown at Fannie Mae, Freddie Mac, GM, Ford, this, that and the other thing.
And not ONE of these powers that be gives a rat's ass about you. Go ahead, get shot at the post office. We will SEE how many government employees are out looking for the "bad guy".
Yours for a better (where Federal Agents are no more important than you and me) world,
Mentatt (at) yahoo (d0t) com
Posted by The Short Story Man at 4:17 AM