Income Inequality Killing America, or, Is It Already Dead?

Once again, just so we all get it straight: stock markets are not necessarily reflective of the underlying economy. That point was driven home with a lead hammer today, when European and US stocks fell out of bed and into an early dive only to rally the rest of the day and finish close to unchanged (US stocks, at least).

Most European bourses were down hard in the early going, but rallied into the close. Reasons for the swan song for stocks were the ongoing crisis in Cyprus and instability in Italy, which has been operating without a government for months and appears to be ready to do so for many months more.

As for why stocks regained some of the losses throughout the various trading sessions, the acronym, BTD, would suffice, as in "Buy the Dip," which has become shorthand for day-trading insiders making money while there's still some not being confiscated in a bank reorganization.

Meanwhile, Cyprus (where the local stock market has been tanking for four years, down 96%, so we should have seen this coming) prepares for a decade or longer of depression as planes flew euros in from the continent to shore up the banks and ATMs, which will open tomorrow. The rules, however, have changed. Cheques cannot be cashed, only deposited; the limit on daily withdrawals is 300 euros, and not more than 3000 euros can leave the island on one's person. Thus has the troika enslaved and imprisoned the million of so residents of the once-beautiful Mediterranean island.

But, unless one is still convinced that what is happening in Cyprus and, to a lesser extent, along the southern periphery of Europe can't happen in the United States, there are certainly enough examples of debt-slavery, capital destruction and other assorted miseries that come with a declining economy to convince most of the "recovery" die-hards that the US is more likely mired in a recession (and has been since 2008) than experiencing a recovery.

All one has to do to verify this condition is open one's eyes to what's going on in one's own town or city, as Jim Quinn eloquently lays out in his essay titled Available. Empty strip malls, for sale and lease signs everywhere, shuttered storefronts and vacant commercial developments are just the tip of the iceberg Quinn sees heading directly toward the USS Titanic, ending in the complete blow-up of the Federal Reserve's balance sheet. It's a great read.

This article by David Cay Johnston, details the extent of wealth inequality in America over the past 50 years - how it has grown, improving the lives of those in the top 10% and the top 1%, while impoverishing just about everybody else.

According to Johnston's article - published in January - the average gain in annual income since 1966 for the bottom 90% in America was an astonishingly-small $59. Read that again. FIFTY-NINE DOLLARS. Now, consider how much taxes and inflation have eroded disposable income and spending power and one begins to see clearly how America's "wealth curve" is distorted - toward the rich.

Here's an example comment that sends the point home:

I wish my father were still alive to see this. I always used to tell him that it was easier to make a good living back in his peak earning years - 1955-1975 - than mine - 1985-2005 - but he never wanted to believe that the America he fought for in WWII was any different now than then.

He stubbornly stuck to his preferred line of reasoning, all the while watching single-earner households evolve into double-earner debt traps, inflation, stagflation, recession, government regulation and bungling, even as it got harder and harder for him to make decent money in his later years.

Now I know why my general acceptance of prices has been stuck somewhere around a 1974 level, when a new car cost $3500-6000, a two bedroom apartment was $400 and a steak dinner ran about $6-8. Because my income has been stuck there thanks to inflation. Back in 1975, I was making about $350 a week and had plenty of money left over after regular expenses. Guess what? I'm making a little more than that now - about $500 - but it's a struggle to get by. Taxes went way up since then, along with gas, food, rent and just about everything else.

Now, greed and loopholes may be great for the .001%, but inflation has truly wrecked our middle class and society.

And the wreckage continues.

Now it becomes clear as to why the stock markets continue to rise to record levels as the general economy crumbles into ruins. The top 10% of Americans own 50% of the stock market. They're living in a parallel universe, one in which their profits are earned by plundering the lower, middle and even the upper-middle classes.

So-called "conservative" commentators might say statements like that spark class warfare, but that's what the upper class has been engaged in for many years. They've waged an economic war on the rest of America, thanks to short-sighted tax policies that heavily favor the rich. How can anyone find anything "conservative" about promoting distortions in income that threaten the American way of life?

Here's a must-see video on the topic.

Wealth Inequality in America (this video has gone viral over the past month)



That should be enough for today. In case you want to keep believing mainstream television media instead of what you can see with your own two eyes, then remain in your deluded non-reality of willful ignorance. The rest of us must begin to move on, outside the debt-servitude structure imposed upon us by government at all levels and into something that's more sustainable and self-reliant.

Stocks, bonds, bank deposits? Keep 'em. What the truly enlightened are now stocking up on are gold (silver), guns and grub (seeds, gardens).

Dow 14,526.16, -33.49 (0.23%)
NASDAQ 3,256.52, +4.04 (0.12%)
S&P 500 1,562.85, -0.92 (0.06%)
NYSE Compos... 9,070.44, -13.27 (0.15%)
NASDAQ Volume 1,418,889,500.00 (light)
NYSE Volume 3,180,277,250 (lighter)
Combined NYSE & NASDAQ Advance - Decline: 3294-3059
Combined NYSE & NASDAQ New highs - New lows: 330-48
WTI crude oil: 96.58, +0.24
Gold: 1,606.20, +10.50
Silver: 28.61, -0.067

Dow 13,000. Fail. G20 Wants $2 Trillion Firewall; 1% Tip from a One-Percenter

Today was another in a seemingly-endless series of ridiculously small gains or losses for stocks, but, if one looked at the major indices early in the day, one would have thought any kind of gain or even getting close to unchanged was out of the question.

Stocks sold off right at the open, but suddenly, miraculously, once the Dow bottomed out with a 100-point loss, the entire market reversed and headed higher.

Some of the commentary surrounding the market reversal seem to suggest that it was due to the NAR's release at 10:00 am ET of pending home sales, which witnessed a 2% gain in January. Such commentary should be immediately dismissed as pure rubbish, for a number of reasons, the first being that real estate is such a small sliver of the US economy - and generally divorced from stocks - that the number doesn't move the Dow 120 points. Also, the January gain comes on the back of a 1.9% decline in December, and the warm weather this winter likely threw off all of the NAR's seasonable adjustments.

Probably the utmost reason that the theory concerning the move upward for the Dow being caused by pending home sales should be disregarded is that the bottom and subsequent move higher occurred 15 minutes before the NAR news. The Dow was already nearly 40 points off the bottom by 10:00 am.

No, the turnaround was more than likely the result of pump-priming by a gang of primary dealers, who, in a lightly-traded market, as this is, have more than enough firepower to move stocks in any direction they please, and the current pleasure is being positive, as it almost always is. The idea that the the major brokerages and big banks would like to engender more participation from individual investors, who have lost faith in Wall Street since the financial crash of '08 and haven't returned, is real, and the best way to get investors back in the mood - in the small minds of big bankers - is to manufacture rallies, such as the current one, which is about a 25% move since the start of October.

The trouble for the bankers is multitudinous. Nobody believes in their ways of doing business; there isn't enough disposable income in most households to really consider stocks as investments; there are too many headwinds, like Greece, the rest of Europe, Iran, high gas prices, lingering unemployment and more, and; the market sure looks toppy at this juncture.

Lastly, volumes for the better part of the last two months have been nothing but pathetic. Today was more of the same, so trying to entice individual investors back in is akin to finding volunteers for cliff diving. It looks dangerous, and nobody wants to go first.

To get an idea of how stalled out this market has become, consider that on Friday, February 17, the Dow closed at 12949.87 and today at 12,981.51. That's a move of less than 32 points in five days, and the repeating pattern of being down in the morning only to rally at some unknown time - though also in the A.M. - isn't exactly an inspiring feature.

So, after spending most of the day above the 13,000 mark on the Dow, the cheerleaders at CNBC will have to root again tomorrow, for the seventh day in a row.

Over the weekend, financial representatives of the G20 nations met in Mexico and came up with the notion that Europe needs to erect a $2 trillion financial "firewall" to keep its contagion from spreading. That's all they seem to know how to do, these top-level bureaucrats, spend money to keep Europe's debt conflagration from inflicting collateral damage. Next time you hear the word "firewall" your response should be "stupid," because a firewall, by definition, is purposely set up to keep everything enclosed. In other words, anything inside the firewall will burn to a crisp. The term, and the idea are almost as revolting and ignorant as the much-bantered-about term, "ring-fence."

Now that the globalist elitists have their global economy and things aren't going so well, they want to revert to feudalism. Well, at least, via their ancestry, it's something they actually understand.

And, finally here's a story about a one-percenter, a rich banker, leaving a waitress a - you guessed it - a one percent tip. Talk about callous.

Dow 12,981.51, -1.44 (0.01%)
NASDAQ 2,966.16, +2.41 (0.08%)
S&P 500 1,367.59, +1.85 (0.14%)
NYSE Composite 8,143.56, -8.41 (0.10%)
NASDAQ Volume 1,761,845,125
NYSE Volume 3,492,574,750
Combined NYSE & NASDAQ Advance - Decline: 2682-2894
Combined NYSE & NASDAQ New highs - New lows: 230-25
WTI crude oil: 108.56, -1.21
Gold: 1,774.90, -1.50
Silver: 35.52, +0.19