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2019-12-16 07:00 by Karl Denninger
in Corruption , 41 references
[Comments enabled]  

That's right -- we have great "principles" in the USA.

The Thomson Reuters Foundation found via sources that the state's coffee plantations this year attracted the attention of U.S. customs officials who can block imports of slave-tainted goods, fuelling fears about trade with Brazil's biggest buyer.

U.S. Customs and Border Protection (CBP) met this year with labor inspectors and prosecutors in Minas Gerais - thought by sources to be the first such meetings - to discuss the industry.

"Discuss"..... uh huh.

And....

U.S. giant Starbucks, Swiss-based Nespresso and Brazil's Nucoffee have all used coffee plantations found by labor officials to have exploited laborers in recent years.

Then you have this:

"Consumers believe that when they pay $2 more for certified coffee, that money is being handed to workers when there is very little actual evidence that is the case."

But heh, fraud is a good business model so long as you don't get caught -- or is that punished?  Of course being caught doesn't matter if there's no punishment, does it?

Why is it that if I rip someone off by misrepresentation I go to prison but exactly none of these people have or will?

Don't worry folks, pay up for your $8 Latte which comes about because of slaves Literal ones.  But it's all good and you can virtue signal about all that wonderful "no straw" stuff.... right?

Oh, and where's the embargo Trump?

Still on your knees before Xi I see.... after all what's a few slaves in Brazil, right?

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2019-12-15 19:10 by Karl Denninger
in Podcasts , 52 references
[Comments enabled]  

2019-12-15 09:00 by Karl Denninger
in Editorial , 271 references
[Comments enabled]  

Seriously, I mean it.

Don't sit at home with Mom and Dad.  Don't be in a rut.  If you're working a wage job for whatever, and it's not fulfilling you, think about where you might be happier, even if just a bit happierand go.

If you have someone special, sit down and figure it out between the two of you.  If you don't, do it on your own.

This nation is full of both good and bad.  Go see the good, pass by the bad.  You figure out which is which.

I'm going to lay something on all you young folks: The older people in this nation -- including your parents and grandparents -- ****ed you.  And they're going to continue ****ing you.

There are a few of us "older people" who have worked hard, all the way just short of committing extreme acts of violence, to try to stop it.  We've participated in third-party political runs, even as officers of those parties.  We've written blogs. We've given speeches.  We've gotten in cars, buses and airplanes and raised hell in State Houses and DC.  We've done what we could through peaceful political process.

But we're very few in number and there are too many who are either sitting on their hands or worse, actively involved in hosing you.

Some of those sitting on their hands have some excuse.  They're married, they have a couple of kids (or more!) and they're occupied with trying to keep their lights on and food in the fridge, never mind preventing their three year old from braining their two year old with a Chinese-made plastic toy dinosaur.  I get it; as long as their employer is still around and the paycheck doesn't bounce they'll keep on keeping on, never mind that they have a fair excuse in the form of "family stability."

But that doesn't change the fact that you've been had.  You've been told by people like AOC, Bernie Sanders, Elizabeth Warren and even Donald Trump that the stock market, the jobs numbers, and whether you can get an Uber is a good measure of success.  You've been promised more and more "free stuff" and social media fills your brain with images of people who have "more and more."

It's a lie.  That Uber driver is making less than a taxicab driver and has none of the protections the taxi cab dude does.  Most of those drivers are in fact losing money when they add up the wear and tear on their vehicles plus the additional maintenance and insurance expense.  None of them can actually maintain a household on the remaining income; it's impossible.  I've run the math and virtually all of the so-called "gig economy" is set up this way on purpose.  The Amazons of the world will try to entice you to go work in a warehouse where they intentionally design the work environment to wear you out -- mentally and physically -- and when you succumb you'll be thrown away like yesterday's kitty litter.  After all, there's a line out the door to replace you.  They all say there's a path to advancement.  The facts say 1 in 100 people manage to survive their work environment long enough to achieve it.  Every other business at an "entry level" is pulling the same crap too; they hold out the carrot of advancement and raises to get you to go work for them but it's a lie and it has nothing to do with merit; it's simply that as you get raises and promotions you get more expensive.  That extra dollar or three an hour is one the owners can keep if they either can you or******you off enough that you quit and there's always another kid who will take your place.

The politicians all tell you that your college loans should be forgiven; that's their latest bid to buy your vote, but it's only the latest in a long line of lies.  Note that not one of those politicians has proposed hanging the University officials that made college so ******ned expensive in the first place from the nearest lamppost, along with confiscating the college's endowment, for intentionally violating anti-trust law -- which is why you got screwed up the ass.  When I was of college age you could literally spin pizzas or work at McDonalds' and not only pay for school you could live on your own at the same time in a dorm or apartment with a couple of friends.  We put men on the moon with college graduates building those huge rockets under exactly that sort of college program and at that level of cost.  Our flag is stuck in the surface of that rock as proof that it doesn't cost even a quarter of what's being charged today.

It's only so ******ned expensive today because you've been relentlessly and intentionally ****ed.

Ever notice that shop class disappeared from our Junior and Senior High Schools?  In the 1970s every single kid learned how to weld, turn metal and wood on a lathe and build a lamp starting with a block of wood, a socket and a piece of wire.  I took shop class because it was required.  As a result I can weld -- both stick and gas -- run a lathe, a milling machine, saws and other tools -- and build or fix things.  I may not be really good at any of it but I can do it because I learned how in eighth grade.  Now most High School graduates don't know how to change a tire, say much less the oil in their car's engine.

The year I was born you could give birth for an amount of money that, inflated by the official Government's inflation numbers, comes to right about $1,000 today. Today giving birth is anywhere from $8,000+ and I assure you that the way you get pregnant and have that child hasn't changed a damn bit.

A year or so after I started MCSNet this is what my computer room at the shared office building I moved into (out of my apartment closet) looked like:

 

Yes, those were hand-built computers you see in the racks and the racks themselves were bread racks from the warehouse club.  There was always some sort of work going on in there, thus the things laying about.  This was ~1993ish and I didn't go into one penny of debt during the entire time I ran the firm.  Today, with all the benefit costs such as health insurance, taxes, fees and other screwings imposed on small businesses I've gone back and looked at my original business plan, updated it to reflect those costs along with today's rents, and I would have gone bankrupt.

Our government is not going to fix this.

The government is in fact making it worse at an ever-accelerating rate.

Remember, this is the same government -- and your parents -- who sat back while the Chicago Skyway toll went from $1 in the late 1980s to $5 today; that's 500% of what it used to cost for the exact same thing.  An aberration?  Nope -- they did it here too; $1.00 toll in 2000 with a promise that the bonds would be paid off and the tolls zeroed; instead it's now $3.50 each way with the transponder discount and several times as much debt outstanding.  That's a $1,400 a year tax extracted from you to go to work.  If you work a $10/hour wage job your entire first hour's pay after taxes is consumed by that damned bridge getting to and from work and yet nobody has been hanged for their lies.

Florida claims to have no income tax.  Oh really?  If you're working a $10/hour job, full-time, that's a nine percent income tax and you can't deduct it either.  If you're working part time at that rate of pay it could easily be a 20% income tax right off the top.  Why do the people put up with that sort of butt-reaming lie?

In the mid 1990s when I was running MCSNet a reasonably-healthy young adult could buy health insurance for fifty dollars a month.  That's not conjecture -- it is what it actually cost in its entirety and I know it's a fact because I paid those bills on behalf of young employees for years, all of whom were individually rated.  It was a good plan too, with an effectively-zero deductible.  If you needed to go see a doctor for something you made the appointment and went to see him or her; there was no out-of-pocket cost. That's cheaper than your car insurance -- and I had the exact same health insurance, even though I was the CEO, as did every one of my employees.

How's that working out for all you young folks now?

The government and companies are doing all of this on purpose and the people in the government are split between useful idiots who can't find their ass with both hands and those who have as their true intent screwing you to within an inch of your life and getting kickbacks of one sort or another, which is how and why they all get rich.  Nancy Pelosi has seen her net worth quadruple to more than $125 million over the last few years yet she gets paid a salary under $200k.

None of this is an accident; basic statistics tell us that honest mistakes help you as often as they hurt.  These are all intentional acts as they all go one way.

The drugs, homelessness and other nastiness you see is a result of all this screwing.  You can choose to go that way and destroy yourself but when you're young you have options and thus I strongly recommend you don't commit slow suicide on a sidewalk.  You have stamina and adaptability that older people do not, for openers.

Like it or not there simply aren't any material number of people who are willing to write a blank check that might get cashiered, then start building gallows on the National Mall along with every state and local government's lawn.  In 1776 the people decided they'd had enough of this crap (largely over a 3% tax!), wrote those blank checks and told the British to blow goats.  The British tried to come take their ammunition at Concord and they got shot.  Many of those Colonists (and plenty of British Regulars) died but America exists because they both said it and meant it.  The majority of the Founding Fathers were either killed or died penniless; not only did they write those blank checks many of them got cashed.  Whether it's all the Ritalin you were force-fed as children, everyone having their face buried in a phone 20 hours a day, being sucked into a debt trap or some combination of the above that's no longer the case. Choosing to be a lone nut, which is what you'd be if you try to stop this crap on your own, simply means you're dead, you'll be called a terrorist and worse, nothing will change.  

So if you're young -- if you're in your late teens or 20s -- get out there and enjoy what there is to enjoy before more -- and maybe all of it -- is gone.

If there's somewhere you'd really like to go live for a year, two or three -- do it.

If you're part of a couple, both of you go do it.  Compromise on the how, where and what -- but go do it and do it now.  Not next year -- right here, right now.

Why?

Because there is a very good chance that in the next five or so years, and maybe in as little as a year or two down the road you won't be able to do it any more at all.

Not just because you'll be older, although that will be part of it.  No, the rest will be because the rot is going to get worse and it might get a lot worse.  Life-threateningly worse.  That which is there and beautiful today may well be gone tomorrow, or at least inaccessible.  Contemplate simply the Greta Thunburgs of the world who would love to tell you that you cannot own a car that can go more than 200 miles at one time.  Drive to Yellowstone?  Forget it; it'll take you a week with all the stops instead of a couple of days, the hotels won't be $50/night as with all the taxes and surcharges they'll be $200, it'll be illegal to sleep in the car under penalty of a $500 ticket and that's if you're allowed to go in at all and the charging stations aren't prohibitively expensive to use.

The rhetoric from people like Greta now includes explicit threats of violence.  Oh, she "walked it back", but "we will make sure they, that we put them against the wall, and that they will have to do their job and to protect our futuresis pretty clear in any language; we all know damn that the next thing done after that if the demand is not immediately met is that you shoot them.

When I was younger I seriously considered taking a month or two and going over to Europe, buying a Eurail Pass and staying at hostels.  The staying part was cheap, the flight reasonable, and the Eurail Pass would get you nearly anywhere.  I didn't do it and I regret it.  Today much of what was there in terms of culture is gone.  Unbridled importation of "refugees" has made large swaths of Europe unsafe, prices have risen to the point that you can't do that sort of travel any more at any kind of reasonable cost and it's getting worse rather than better.  There are parts of France you cannot go into safely as a white person, say much less a not-french-speaking white person.  Two or three decades ago that was unheard of.

Oh sure, there are still places in Europe you can visit and enjoy.  But it's not what it was, the change is not for the better and it's not improving.

The math on this is pretty clear.  Now I might be wrong -- I freely admit that.  But if I am -- what have you lost?  If you go and both see and do what you want to now, while you're young -- whether it's living in this place or that -- what cost did that impose on you?   If you deplete your savings and the world improves in the US instead of going down the crapper so will your personal and economic opportunities, so you've in fact lost nothing!  Indeed you have gained much -- including living in a place that makes you smile in the morning just by being there.

But if not you may well look back 20, 30 or 40 years from now and deeply regret that mistake.  Worse, if it all goes to Hell right here in America five years hence where there are no hamburgers for ordinary people because we can't afford them and you're beset upon by some group trying to literally rip the clothes off your back you won't draw your last breath muttering "I wish I'd gone to live in Colorado and spent the last two years hiking in the summer and skiing in the winter."

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2019-12-14 16:38 by Karl Denninger
in Editorial , 324 references
[Comments enabled]  

I don't know why I have to write this one again....

It's in Leverage; in fact it's one of the first and most-basic principles I present.

 

This graph shows GDP starting at "1" and debt starting at 0.1 -- 1/10th of GDP.  GDP grows at 3% and debt grows at 6%.

Note what happens.

This always happens.  It does not matter what values you start with so long as debt grows faster than GDP.  All that will change is the amount of time before the intercept occurs; that it will occur is mathematical certainty.

It cannot be otherwise.  But also note that right up until you get to about year 70 everything looks more or less ok, as there is actually more space between those two lines -- that is, you start with 0.9 between them and it expands to a high point of 2.622 or nearly three times greater in terms of "spread."

But from that point forward it's downhill -- and fast.  It takes 58 years to reach that 2.622 spread but only another 20 before the spread is back under 0.9, and just four years after that you're screwed as the two lines cross.

This "belly" is why politicians and central bankers scam you -- it is what they sell.

THEY KNOW ITS A DAMNED LIE.  THEY FURTHER KNOW THAT AT ANY RATE OF INTEREST, NO MATTER HOW LOW, THAT DEBT ESCALATION WILL CONTINUE TO WIDEN.  THIS MEANS THAT EVENTUALLY THE AMOUNT OF INTEREST OWED INEVITABLY WILL EXCEED THE AMOUNT OF ECONOMIC OUTPUT, WHICH IS IMPOSSIBLE.

WORSE,  FIVE YEARS AFTER THE LINES CROSS THE NEGATIVE DIFFERENCE EXCEEDS THE MAXIMUM POSITIVE BENEFIT YOU EVER SAW -- AND WHICH TOOK 58 YEARS TO ACHIEVE!

In other words in exchange for being duped and having a knowingly false narrative run on you for fifty eight years you face 20 years of the spread tightening in absolute terms, four more until you're hosed, and from there it gets exponentially worse.

The big lie is that in percentage terms the spread never got better; it in fact deteriorated exponentially from the first year.  The central bankers and ordinary banks all know this.  Wall Street knows this.  Every single broker knows this.  The politicians know this.  Volcker, Greenspan, Bernanke, Yellen and Powell all either knew or know this.

It takes nothing more than middle school mathematics, a pencil and a piece of graph paper to understand all of it.

It is a con.

We are now facing this:

 

Does that look familiar on the right side of the graph?

It's the red line, isn't it?

There is only one way to stop it -- you must not add more debt to the system than you add in GDP (output.)  You must in fact add less, and you must do so continually for a period of time roughly as long as you did the bad thing, and by about as much.

This means, among other things, no more deficit spending of any sort.

There is exactly one way to do that and it is to destroy all the medical monopolists because that is where it is all coming from, and at the same time stop expanding other domestic spending as well in all respects -- military, education, other "transfer payments", "welfare", etc.

Any further spending you wish to do must first be taxed.

There are plenty of those who say that "oh no, there's this new theory" here and there.  They're all wrong.  The laws of mathematics are not suggestions.  They're liars, they're knowing liars, they've been running this crap during the time the spread has widened and using that as their "example", knowing damn well it not only will fail but it will destroy this nation, all savings, all investment and all of you.

This is an act of deception worse than walking a nuclear bomb into the middle of TImes Square and setting it off -- by a factor of many times.  It is worse than hacking Russia's launch codes and nuking San Francisco.  It is worse than landing a million Chinese Soldiers on our soil and attempting to literally conquer the United States.

Oh, and make no mistake -- China is directly involved in doing this in concert with our government and central bank, they did not fail middle school math, they're doing it on purpose and their intent in participating and "egging it on" is to perpetrate that collapse of our society and nation.  What's even worse is that we just agreed to a "deal" that will make it worse rather than better.  The proper thing to do is to stop them from participating at all in this scheme; in other words, withdraw our economic connections from them entirely.

Oh, and as for Donald Trump?  Since he has a billion dollars he thinks he'll just get on his jet and fly to Tahiti or somewhere similar when it all goes to crap here in this nation -- and he, being a commercial real estate developer and having his own personal brush with this in the 1980s, knows good and damn well exactly what I'm writing about -- and that I'm right.

Don't look to the Democrats for answers either; every one of them wants to make it worse.

This isn't just an existential threat folks -- that four year ticking time bomb blows up in 2024 on the path we are now on no matter who is President.

What do you intend to do about?

You certainly can't vote your way out of this; the ReMurderAmerica party just agreed to nuke the country, and the DemoMurderAmerica party not only concurs they'd go for making it even worse.  Literally.

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2019-12-14 07:00 by Karl Denninger
in Corruption , 125 references
[Comments enabled]  

Why do we keep hearing this sort of nonsense?

The bill would make it illegal for a lender to provide someone with a $250 cash advance and then pay back the loan a week later with a $10 fee. But why? Can't consenting adults make up their own minds about whether they want to engage in this transaction? Or is the left so contemptuous of the poor they think their voters are incapable of making sound everyday decisions on their own?

Perhaps it is the Washington politicians who are financially clueless here. Well, more than half of all Americans live paycheck to paycheck today. Oftentimes these workers have poor credit scores, so they can't get a traditional loan or consumer credit from a bank. About 1 in 4 Americans without a credit card don't qualify, or if they do, they ring up debt on their Visa card, which is far more expensive than opting for a short-term payday or online loan.

That last sentence is a lie.

The problem isn't the up-front, one-time fee.  Most credit cards charge it on a cash advance.  And yes, interest rates on those cards are high.  The problem is the roll-over provisions that are in these agreements.

Why not ban that?

Is a $250 cash advance with a $10 fee for a week horrible?  Well, on an annualized basis it's a very high interest rate, but it's not the origination fee that's the problem, it's that it gets charged each and every week as the loan is rolled back over because the customer can't pay it back.

Why do the lenders get away with that?  Exactly how is it that we have allowed firms to design programs that have as their sole means of being profitable entrapment of the customer?

It's already illegal and has been for a long time to employ unfair and deceptive trade practices.  We recognized that a long time ago and passed laws against it.  Now Heritage argues that if you can trick someone, or worse, know they can't pay (which is why they're there in the first place) and wind up destroying their life that's perfectly ok with them.

How hard would it be to make such a "rollover" practice illegal?  That is, if you hold out that a person can borrow $250 for a week and pay a $10 fee, which sounds eminently reasonable then don't allow it to be rolled over at all; it is either paid back or defaulted and the lender eats it one week later.

Now we get down to brass tacks -- are you really helping people with these loans?  If you are, and if you're analyzing it as a business on that basis, then there's no problem.  You make a nice profit and the people who take said loans actually get their financial bridge.  All is well.

The problem is that these firms all know their intent is not to have the person borrow the $250 and one week later pay it back with a $10 service charge.  No, their intent is to continually ratchet said fee week by week so that the $250 loan carries $520 in service charges over a year, the $250 is never paid off, and the customer winds up paying that $520 every year to the so-called "lender" for the rest of his life.  This "arrangement" is also predicated on said person never considering their life to be worth less than $520 -- or he comes back and murders the dude or chick behind the counter when they leave for the evening -- which is why these "loans" are always for small amounts.

Cut the crap folks -- lending someone money who can pay it back is a reasonable and lawful business, even if the fees are high.

Intentionally trapping people isn't "lending" at all -- it's consumer fraud and abuse, and we're well past the time it should have been stopped with those who try to make a "business" out of this being sent to prison or worse.

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