Der USA Bären-Thread

consumer staples, and health care. In other words — the defensives. The
worst performers were financials, tech, energy, and consumer discretionary.

• Baa spreads widened +56bps from 237bps to 296bps

• CRB futures dropped from 279 to 267.

• Oil went from $84.30 a barrel to $75.20.

• The VIX index jumped from 16.6 to 24.5.

• The trade-weighted dollar index (major currencies) firmed to 76.5 from 75.5.

• Gold was the commodity that bucked the trend as it acted as a refuge at a
time of intensifying economic and financial uncertainty — to $1,235 an
ounce from $1,140 and even with a more stable-to-strong U.S. dollar too.

• The yield on the 10-year U.S. Treasury note plunged to 2.66% from 3.84%.

So you see, the bond market actually does better (same was true during QE1)
without the Fed balance sheet expansion than with it. Why? Because the Fed’s
real goal is to ignite investor risk appetite. Bernanke et all have not kept it a
secret that the real aim of the QEs is to generate a liquidity-induced rally in the
equity market. If bond yields end up rising as they have for most of the past six
months but occurs with a rising stock market and greater economic strength,
then the Fed is totally cool with that and again Mr. Bernanke has stated that
very bluntly (even if the higher mortgage rates that ensue drive another knife
into the heart of the housing market). When the Fed stops QE, as we saw last
year, risk appetite fades and the economy sputters — a development that will
likely be even more acute this time around given the accelerating fiscal restraint
at all levels of government that is just around the corner.

So who buys the bonds when Ben leaves the building?
The same folks who were the buyers last year from April to August. The ones
who were switching out of equities, commodities, and other risk-assets.

Now you know how to play the second half of the year!

---

P.S. Wenn Trichet wegen Inflation bremst, würde Bernanke bei QE3 Argumentationsprobleme bekommen. Die Rohstoff-Inflation wirkt schließlich weltweit, nicht nur im Euro-Raum.

für den nächsten Tauchgang.

www.godmode-trader.de/blog/weygand/2011/03/...jones-ab/seite/1

For the 15 million Americans who can’t find jobs the labor market is like an awful game of musical chairs. There are many more players than there are available seats.

Yet at Extend Health, a Medicare health insurance exchange firm in Salt Lake City, the problem is just the opposite—a growing number of chairs to fill and not enough people with the skills to fit the jobs.

 

“It seems like an oxymoron in this environment that you can somehow be challenged to find great workers,” CEO Bryce Williams admits, almost sheepishly.

Extend Health’s call center workers help retirees navigate the process of signing up for commercial Medicare Advantage and drug coverage plans. For this fall’s Medicare Enrollment season, the firm will need close a thousand workers. The ideal candidate is over 40, with a background of financial services in order to qualify for insurance licensing.

“They need to be able to pass the state of Utah exam, which is not easy, “he explains. “They need to have a background in comparing the financial metrics of trying to help someone compare and analyze and give great advice.”

Williams has hire a recruiter, plans to roll out billboards along Interstate-15 in Utah, and is now looking at establishing a new call center out of state where the firm can find more people to train and hire.

“We like being in Utah but at a certain point you max out on the total pool of people that you can tap, “ Williams says. “So, we're going to have to look at other states.”

Part of Williams’ problem is that his business is in a sector that’s facing a skills gap.

A Tight Labor Market For Skilled Jobs

Overall labor demand softened in February, but online ads for computer science jobs were up more than 15 percent from January, according to The Conference Board Help Wanted Online Data Series (HWOL).

While there are more than twenty-five job seekers for every open position in fields like construction, in technology, health and science-related jobs the exact inverse is true.

 

For computer science jobs and skilled health care practitioners, there were just over three ads for every job seeker in February. For life sciences jobs like medical science researchers and chemists, the ratio was 2 to 1.

"It’s the equivalent of a seller’s market in real estate,” says Jeanne Shu, HWOL Project Coordinator. While those occupations are seeing a lot of growth, employers are scrambling to find available qualified workers.

“If they can't find the right person with the right skill set they'll hold out longer for them."

But employers also appear to be holding out for ideal hires for jobs that aren’t facing a skills gap believes professor Steven Davis of the University of Chicago Booth School of Business, who recently co-wrote a paper on the subject.

“Our best estimate is maybe 20 percent of shortfall in hires per vacancy in the last couple of years can be accounted for by lower recruiting intensity by employers.”

Though they may be placing ads, they don’t appear in a rush to fill vacancies.

The Beveridge Curve

A number of economists are closing watching the relationship between the jobs vacancy rate and the unemployment rate—what’s known as the Beveridge Curve, named for economist William Henry Beveridge.

“In March last year the vacancy rate started to rise, without drawing down in the unemployment,“ says professor Steven Davis, making for what he sees as a troubling move in the curve. “It broke down rather substantially.”

Davis believes the repeated extension of jobless benefits for long-term unemployed workers has made job seekers more willing and financially able to hold out for better jobs. But, in the mean time, their skills are falling behind making them less employable.

“We have to some extent set ourselves up to have 1 to 2 percent of the workforce without jobs for long time, with dim prospects of returning to a job market even after the market recovers,” he cautions. “That's what kind of worries me.”

New York Federal Reserve President William Dudley doesn’t see the Beveridge Curve signaling a long-term structural problem in the jobs market.

"The loop in the Beveridge that is evident now has been seen in the past business cycles," Dudley said in a speech at the Stern School of Business earlier this week. "This strongly suggests that the rise in job mismatch has a cyclical component."

When Workers Can’t Move For Jobs

Mark Zandi, of Moody’s Analytics believes the shift in the Beveridge Curve is likely temporary. But, he is concerned that the downturn in the housing market may be making it harder for job vacancies to be filled.

 

“So many people are under water on their mortgages and they can’t move,” he says. “So, they lost a job in Las Vegas and can’t move to L.A. because of their mortgage.”

Zandi’s own firm is feeling the impact of the skills gap. He’s having trouble finding and hiring junior economists with advanced degrees.

“That part of the job market is tightening up quite significantly.”

Extend Health’s Bryce Williams is actively looking at options beyond his company's base in Utah, and beyond that is also trying to develop a home-based model so that he bring his jobs to the workers he needs. But he's worried he won't be able to ramp hiring enough, and that would kill his company's growth.

“What it could require us to do is meter the number of clients we can take on, in any given year,“ he confides.

With the health care exchange sector poised for rapid expansion over the next two years because of the health reform law, Williams is determined not to turn business away.

Von den 165 Erstemissionen, die seit Juni das US-Börsenlicht erblickten, notieren 54 unter ihrem Emissionspreis. 66 stehen tiefer als ihre Erstnotiz.

Wenn mehr als ein Drittel aller IPOs in die Hose geht, wirft dies ein schlechtes Licht auf das Vertrauen der Anleger in den US-Aktienmarkt.

Am Markt sind fast nur noch Daytrader und Hedgefondszocker mit Index-ETF bzw. Indexfutures unterwegs. Es ist ein riesiges Casino und hat mit "Investment" kaum mehr was zu tun.

Der Konsens hat zudem die Gewinnprognosen für den SP-500 leicht gesenkt - die erste Abwärtsrevision seit Oktober.

---

Quelle: Rosenberg, s.o.

For Q1, the latest consensus estimate for S&P 500 EPS growth is currently
+13.2% YoY, a mini-haircut from +13.8% at the end of January. This represents
a break in the upgrade phase as analysts had steadily increased estimates from
October (10.9%) to 12% by early January, to 13.8% by the end of January (where
they peaked). A possible sense of foreboding.

Not only are analysts and economists becoming more cautious, but so is the
investment community. We can see this in the growing number of IPOs that are
now trading below their offering prices. Of the 165 U.S. IPOs to go public since
last June (based on data from Renaissance Capital and cited in the USA Today),
nearly one-third or 54 stocks are now trading below their IPO prices. Not only
that but 66 of the IPOs are trading below their first-day trading prices. Let’s just
say that the IPO market is important to watch as it is a reflection of investors’
confidence in stocks and the economy, and it looks very weak right now despite
how the major averages have managed to hang in close to the cycle highs.

der Euro mit dem Schweizer Franken verglichen wird, ist das eine teuflische Verniedlichung des Euros. Die Eurozone ist der größte Wirtschaftsraum mit einheitlicher Währung der Welt. Der Euro ist eindeutig und unbestritten die Nummer 2. Bis er den US-$ eingeholt hat dauert es aber noch. Wenn sich Euro und Dollar bewegen bewegt sich zwangsweise die restliche Welt. Volumen, die im Euro oder Dollar kaum was ausmachen, können mit kleineren Währungen Kasperle spielen. Und in diesem Spiel ist Australien ein absoluter Wicht. Betrachtet man die Landkarte lässt man sich oft irritieren. Wirtschaftlich ist Australien jedoch wesentlich unwichtiger als die BeNeLux. Sogar mit der Einwohnerzahl kann es nicht mithalten. Wirtschaftlich lebt es im wesentlichen von der Einwanderung (Bausektor) und Rohstoffen. Die restliche Wirtschaft ist hochgradig ineffektiv. Wenn es also zum Platzen der Rohstoffblase kommen sollte - Zinserhöhungen in Europa würden da nachhelfen - wird der Zinsriese schnell zu einem Zinszwerg und die harte Währung schnell zu einem überlagerten Camembert.

Das Nachbarland Portugal dagegen gilt weiterhin als der nächste Kandidat für Notkredite, wie sie bereits Griechenland und Irland beansprucht haben. Portugal muss derzeit bei der Kreditaufnahme so hohe Zinsen zahlen, dass es nach Ansicht vieler Experten früher oder später auf eine Geldspritze angewiesen sein wird - obwohl sich das Land am Mittwoch ebenfalls erfolgreich Geld am Finanzmarkt geliehen hatte.

Die unterschiedliche Einschätzung dieser Länder lässt sich gut an den Renditen ihrer zehnjährigen Staatspapiere ablesen: Der Risikoaufschlag gegenüber den als sicher geltenden deutschen Papieren, die aktuell rund 3,3 Prozent Zinsen bringen, liegt im Falle Spaniens bei rund 2,1 Prozentpunkten. Bei Portugal fordern Investoren dagegen eine Gefahrenzulage von 4,3 Prozentpunkten.

Das unter den Euro-Rettungsschirm geschlüpfte Irland beharrt unterdessen auf einer Verbilligung der Notkredite. Der künftige irische Ministerpräsident Enda Kenny kündigte an, Bundeskanzlerin Angela Merkel bei einem Treffen konservativer Staats- und Regierungschefs am Freitag in Helsinki niedrigere Zinsen abringen zu wollen. Die Verärgerung der irischen Bevölkerung über die Finanz- und Wirtschaftskrise in ihrem Land hatte Kenny vor einer Woche einen Wahlsieg beschert.

Merkel hatte jedoch erst am Mittwoch die Hoffnung Irlands auf große Zugeständnisse gebremst. "Das irische Paket ist ja noch nicht sehr alt", sagte Merkel nach einem Treffen mit dem portugiesischen Ministerpräsidenten Jose Socrates in Berlin. "Ich kann heute noch nicht sagen, ob wir überhaupt zu einer Veränderung dieses Pakets kommen müssen." Zwar seien Gespräche über die Zinsen grundsätzlich möglich. Es dürfe jedoch nicht sein, dass etwa Portugal als Teil des Euro-Rettungsschirms am Markt hohe Zinsen zahlen muss und das Geld dann zu einem geringeren Satz an Irland weiterreichen muss. Irland hatte von der EU und dem Internationalen Währungsfonds (IWF) ein Rettungspaket im Volumen von 85 Mrd. Euro erhalten, um seine angeschlagenen Banken zu retten. Für die EU-Kredite zahlt Irland im Schnitt 5,8 Prozent Zinsen.

Quelle: rts/dpa

mit Irland könnte den Aufstieg des Euros bremsen und ihn in gesündere Relationen bringen. Alle Exportländer der Eurozone hätten daran ein Interesse. Auch würde dadurch die EZB bessere Luft für Zinserhöhungen bekommen. Ich glaube deshalb nicht, dass es jetzt schon zu einer Einigung über den künftigen Rettungsschirm kommen wird. Wäre hochgradig unproduktiv.

In Russland oder so würde man einen solchen Gesamtkontext "Korruption" nennen. Mit Recht... :-(

Der  Chart unten zeigt den steil ansteigenden Prozentsatz der Amis, die Lebensmittelgutscheine (Food Stamps) beziehen.

Am "Krisentief" im März 2009 lag die Rate bei 11 %, inzwischen sind es 14,3 %.

Das kostet. Kein Wunder, das Geithner nächste Woche 66 frische Milliarden drucken will.

ha, ha...

Die haben wohl Angst, dass irgendeine Blase platzt, bevor die Amis sich entleert haben.

www.marketwatch.com/story/...inst-europe-tightening-2011-03-03

veranschaulicht wie das soziale Engagement der US-Behörden laufend steigt. So etwas hat es in den Dreißigern nicht gegeben. Da gab es diese hässlichen Schlangen vor den Suppenküchen. Aber China sei Dank, gibt es so etwas heute nicht mehr.

;o)

in # 687 könnte man als Länge der "virtuellen Warteschlange" vor der Bernanke-Geithner'schen  Suppenküche betrachten.

Ken Shreve, street.com
Today's Rally
3/3/2011 12:31 PM EST

I don't' have a problem saying I'm a bit surprised at the scope of today's gains. Volume looks pretty strong as well.

But a worthwhile question to ask is if today's move is simply short-covering ahead of a potentially robust jobs number tomorrow, or if today's strength really is about NEW money coming in from the sidelines. If it's the former, then the foundation is still shaky. If it's the latter, another sustained upward move could be in the cards. It's a hard question to answer but my guess is that it's the former: short-covering.

Divisions over how to combat the global economic crisis have morphed in a matter of months into a new disconnect between central banks in the United States and Europe on the threat posed by commodity-fueled inflation.

 

Rhetoric from Federal Reserve Chairman Ben Bernanke and European Central Bank President Jean-Claude Trichet this week underscored a deep transatlantic divide that has opened up at a time when surging oil, political pressures and mixed economic signals are adding to the challenge for monetary policymakers.

The message from Trichet after the ECB's monthly policy meeting on Thursday was crystal clear — the Frankfurt-based bank is worried about euro zone inflation, which at 2.4 percent has climbed to its highest level since October 2008, and is prepared to act, perhaps as early as next month.

"Strong vigilance is warranted with a view to containing upside risks to price stability," Trichet said, using a phrase that in the past has signalled a rate rise is imminent.

The Frenchman described a hike in April as "not certain" but "possible."

The Bank of England, which has held fire despite an inflation rate that is double its 2.0 percent target, is expected to tighten soon too, most likely in the second or third quarter of this year.

Before today, few would have predicted the ECB would move first.

But in Washington, where Bernanke delivered his semi-annual report to Congress earlier this week, the chances of a rate hike in 2011 look slim, despite the surge in oil above $100 per barrel and clear signs the U.S. recovery is gathering speed.

Bernanke told the Senate Banking Comittee on Tuesday that he expected oil prices to have only a modest, temporary impact on U.S. inflation "at most" and said the Fed remained preoccupied with weak job creation.

The contrast is as stark as it was last year when the Fed embarked on a second round of "quantitative easing," dubbed QE2, despite denunciations of the money-printing policy in Europe and Asia.

"We seem headed for a historically unusual event where the ECB and the BOE will raise rates ahead of the Fed," said Nick Matthews, an economist at RBS in London.

Fed Pivot

There are sound economic reasons why that may happen for the first time since the ECB was created 12 years ago.

 

Headline inflation in the euro zone and in Britain was above central bank targets even before the latest oil price jump and many economists believe it will rise further in the months ahead.

In contrast, U.S. inflation remains relatively subdued for now.

The ECB and BOE have a mandate to focus on inflation alone, while the Fed is required by law to consider growth as well — a point underlined by Bernanke's focus on the labour market.

The U.S. economy also appears to have plenty of slack, in contrast to the euro zone's big economy Germany, which has experienced skilled labor shortages.

"As QE2 is ongoing and inflation risks in the United States are still relatively subdued, it would be confusing if Bernanke shifted his focus to inflation, in line with Trichet and (BOE Governor) Mervyn King," said Mark Miller, senior global economist at Lloyds Bank Global Markets.

But swift rate hikes in Europe and a prolonged period of transatlantic rate divergence clearly carries risks for the Fed as it could push down the value of the dollar further, stoking fears about the longer term U.S. inflation threat.

The dollar slumped to a near four-month low against the euro on Thursday after Trichet's hawkish news conference and has fallen to its weakest level against the British pound in over a year.

"The Fed has a communications management issue — they have to pivot from a focus on deflationary risks to flagging inflation as a risk and this can't be done rapidly," said Gilles Moec, an economist at Deutsche Bank.

Moreover, according to analysis by Fathom Consulting, oil persistently around $120 — only a little above where it is now — would add about 0.5 percentage points to UK and European inflation but more than 1.5 points to U.S. inflation because of greater American consumption of oil and its lower energy taxes.

Undercutting Growth

Rapid hikes by the ECB and BOE are also fraught with dangers although Trichet played down ideas of a series of rises.

Britain suffered a shock contraction in gross domestic product (GDP) in the fourth quarter of last year and is girding for some of the deepest spending cuts in the developed world.

A poorly timed tightening there could undercut a recovery prematurely, exacerbating the country's housing woes and private debt problems.

For the ECB the stakes look even bigger.

It must be wary that a "one-size fits all" rate hike aimed at strong core economies like Germany does not expose countries like Portugal and Spain to new market assaults and threaten the consolidation programmes in bailout victims Greece and Ireland.

"In our view, the ECB is preparing to raise rates too early," said Julian Callow of Barclays. "It should give the euro area economy more chance to get on a sustainable footing, particularly since it is still too early to tell how the intense fiscal consolidation in many countries will affect demand this year and next."

Asked on Thursday about the risks of a policy split with the Fed, Trichet said: "We have our own responsibility, the Fed has its responsibility."

Ich wünsche euch einen schönen Abend. Entgegen meiner eigentlichen Absichten werde ich mich nun zu den alten Weibern gesellen und ein wenig entspannen.
 

Permanent

US-Finanzministerium verkauft nächste Woche Anleihen für 66 Mrd.$

It's incredible how malleable (formbar - A.L.) a herd can be. The latest example is the falacy that stocks rise when crude falls. There is just no evidence to support this supposed negative correlation. In fact, the opposite is true, at least since the 2009 "confidence" low in stocks and crude. In the past two years, the S&P has roughly doubled from its 665 low. If this falacy was in fact true, then crude would now be lower than its low at that time of $33. Let's see what happened. Crude has tripled! Ipso facto, the correlation is perfectly positive, not negative.

For what it's worth...


Timothy Collins, street.com
Herd mentality with oil and equity prices
3/3/2011 12:56 PM EST

Ken, I would argue this is more a case of diminishing returns. Have you run correlations of oil between certain price points? For instance, I would postulate when oil is over $100 and rising, then it would more likely have a negative correlation on the market. However, when oil is $40 to $60 a barrel it would be positively correlated to the market. You are using the term "herd" too loosely here, in my opinion and ignoring the impact on the consumer and the economy of the price in time. Correlations can and do often change, many time precipitated by price.

Saudi Arabia’s Tadawul stock index has tumbled 11pc in wild trading over the past two days, led by banks and insurers. Dubai’s bourse has hit a 7-year low.

The latest sell-off was triggered by the arrest of a Shi’ite cleric in the Kingdom’s Eastern Province after he called for democratic reforms and a constitutional monarchy. The province is home to Saudi Arabia’s aggrieved Shi’ite minority and also holds the country’s vast Ghawar oilfield, placing it at the epicentre of global crude supply. ....

Bahraini dissidents have so far been much bolder, prompting a bloody crackdown last month when at least seven people were shot by the military. The ruling family – under intense pressure from Washington to stop the killings – has since held out an olive branch to protesters and let the radical Haq leader Hassan Mushaima return from exile, yet the crisis is far from contained.

My Mushaima said on Wednesday that protesters have “the right to appeal for help from Iran” if Saudi military units interfere in the struggle. Tanks were seen crossing the 17-mile causeway from Saudi Arabia to Bahrain on Tuesday.

“These were supposed to be Bahrain’s tanks returning from Kuwait: that is not a credible story,” said Firas Abi Ali, a Gulf expert at the risk group Exclusive Analysis.

He said the outcome in Bahrain will set the template for events across the border. “There is no good outcome from this for Saudi Arabia. If Bahrain offers concessions, the Saudi Shia will demand similar concessions. If they crack down, they risk an uprising. These people do not want to live under the House of Saud,” he said.

Saudi activists have called on Facebook for a “Day of Rage” on March 11, despite the penalty of lashing for street protest. A similar call to arms in Syria fizzled because people were frightened, ....Whatever the hopes in the West, Mr Abi Ali said the Mid-East is now in the vortex of multiple uprisings that will create turmoil for years and destabilise oil supply for a long time. “The Arab world is not going to start behaving like the Swiss,” he said. ....
www.telegraph.co.uk/finance/markets/...triggers-Gulf-rout.html

Portugal hat derzeit €4 Mrd. in der Kasse und benötigt 2011 weitere €20 Mrd., um Altschulden zu bedienen und das Haushaltsdefizit zu decken.

... Leute da bleibt einem echt die Spucke weg. Respekt und Mitleid mit/vor jedem Shorter, der sich da reinwagt, ich bin definitiv raus aus der Shorterei bis wir nicht ein ATH gesehn haben.

Hier kommt in jede Korrektur mit Gewalt ein Shortsqueeze. Sowas hat die Welt einfach noch nicht gesehn...

=> ATH  - the final fight... noch diesen Sommer an ihrer Börse!

Schon beachtlich, was Bubblevision dem guten alten Paul Farrell an Revolutions-Pathos durchgehen lässt. Aber Recht hat er ohnehin - vor allem mit der Frage, warum die Krisenverursacher aus der Wall Street nicht längst (zum Madoff) in den Knast gesperrt wurden.

---

Paul B. Farrell

March 1, 2011, 12:01 a.m. EST
Four time bombs that will blow up Wall Street
Commentary: Too late to jail bank CEOs; only revolution will succeed

By Paul B. Farrell, MarketWatch

SAN LUIS OBISPO, Calif. (MarketWatch) — Put Goldman Sachs CEO Lloyd Blankfein in jail for six months, and all this will stop, all over Wall Street and America, a former congressional aide tells Matt Taibbi in his latest Rolling Stone attack, “Why Isn’t Wall Street in Jail? Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them.”

Taibbi’s right, everyone knows Wall Street’s run by a bunch of dictators who are doing more damage to democracy and capitalism than North Africa’s dictators. But jail the CEOs of Goldman, Citi, B. of A. or my old firm Morgan Stanley? Too late.

Only a revolution will stop Wall Street’s self-destructive capitalism. And watching the people revolt against dictators like Mubarak and Gadhafi reminds us of the spirit that sparked America’s revolution in 1776. But today we need a 1930s-style revolution.

During the S&L crisis two decades ago America had a backbone, indicted 3,800 executives and bankers. Today’s leaders have no backbone. Besides jail time won’t reform the darkness consuming Wall Street’s soul. We’re all asleep, in denial about the moral crisis facing America. Yes, we need a new revolution.

Jail time? We’ve heard that many times before. Journalists have been beating that dead horse for three years. Jailing CEOs made sense in early 2009. But our naïve president missed that opportunity, instead surrounded himself with Wall Street insiders as Bush did with Blankfein’s predecessor. Trojan Horses manipulating a Congress filled with clueless Dems mismanaging tired Keynesian theories.

Taibbi got it right: Washington’s error was in protecting Wall Street’s billion-dollar crooks when they should have been prosecuting CEOs for criminal behavior in getting us into the 2008 mess. So today, the political statute-of-limitations has run. Jail solution is wishful thinking, like praying to the tooth fairy for a miracle. Time for action. Time for a revolution on Wall Street.

Jail Wall Street? Old news. They got away with it. We chickened out.

“Jail Bank CEOs” makes a great sound bite in the cable pundits’ echo chamber. Remember Taibbi’s earlier indictment of Goldman Sachs: the “world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

But so what? Just three years after Wall Street’s crooks “brought down the world’s economy” Goldman’s Blankfein and his buddies are paying record bonuses, and laughing at us.

Seriously, think about it folks: Since the 2008 meltdown magazines and newspapers have analyzed the 2008 crash to death. It really is old news, history. Journalists churned out book after book: “Greenspan’s Bubbles,” “House of Cards,” “Trillion Dollar Meltdown,” “13 Bankers,” “Dumb Money,” “Bailout Nation,” “All the Devils Are Here,” “The Big Short,” “Too Big to Fail,” “The Failure of Capitalism,” “This Time is Different,” “And Then the Roof Caved In,” on and on, ad nauseum. All talk, no action, and no effect.

Get it? With every book, every editorial, every expose the past three years, Wall Street bankers actually grew stronger, got richer, more arrogant, bolder on bonuses, impervious to attacks, even taunting us, like the dictators Mubarak, Ben Ali and Gadhafi, confident they could do no wrong, confident no one would rebel. Jail? Our moment to act is long past. We blinked.

Yes folks, Wall Street is the “Comeback Kid” story of the 21st century. Like a terrorist in a horror film, Wall Street thrives on threats. Three short years ago, Wall Street was virtually bankrupt, a ward of the state. We could have jailed “just one” of them back then, when they were down for the count. Instead, we bailed them out! Made them richer. Gave them $13.7 trillion, loans, credits, cash, asset buyouts. Gave them keys to the Treasury. They didn’t just recover, they “ran the tables,” to use a blackjack/pool metaphor. Now Wall Street dictators have absolute power, ruling Washington, America, you and me.

Yes, America’s bankrupt, but the rich just do not care

Admit it, we lost the opportunity. Jail a bank CEO and Wall Street will miraculously reform? You’re joking, right? Wall Street got away with a “legal” bank heist. Today the should-be/would-be inmates are running the prison.

Wall Street’s corrupt banks have lost their moral compass … their insatiable greed has become a deadly virus destroying its host nation … their campaign billions buy senate votes, stop regulators’ actions, manipulate presidential decisions. Wall Street money controls voters, runs America, both parties. Yes, Wall Street is bankrupting America.

Wake up America, listen:

• “Our country is bankrupt. It’s not bankrupt in 30 years or five years,” warns economist Larry Kotlikoff, “it’s bankrupt today.
• Economist Peter Morici: “Capitalism is broken, America’s government is two bankrupt political parties bankrupting the country.”
• David Stockman, Reagan’s budget director: “If there were such a thing as Chapter 11 for politicians” the “tax cuts would amount to a bankruptcy filing.”
• BusinessWeek recently asked analyst Mary Meeker to run the numbers. How bad is it? America really is bankrupt, with a “net worth of a negative $44 trillion.” Bankrupt.
   

And it will get worse. Unfortunately, nothing can stop America’s self-destructive Wall Street bankers. They simply do not care that their “doomsday capitalism” is destroying themselves from within, and is bankrupting America too.

One mega-millionaire sent me an email after reading my Jan. 4 column, “America’s worst 10 years start now.”

“Paul, you may well be right about the coming decade, but the rich exist in a different world from the one you write about. They live privileged lives in gated communities. Meet for holidays at the world’s elite resorts. The richest just aren’t worried about today’s economy like your readers. Their issues revolve around who’s the best masseuse, best Pilates teacher, best concierge medical doctor, which private school to choose, what investments they are making at this time, etc. Folks at the top are not concerned with the underlying deterioration of America, except in the abstract, because they aren’t directly affected. That’s why no amount of information from you will ever change things. To them, it’s irrelevant. Best wishes, always enjoy your stuff.”

4 ticking time bombs that will ignite the Wall Street revolution

Yes, the rich live in a different world. And no, information won’t change them. But a revolution will. Revolutions build slowly over a long time. Then, suddenly, a critical mass, a flash point, something totally unexpected ignites the ticking bomb.

It happened recently in a remote Tunisian village. Mohamed Bouazizi, a 26-year-old college graduate, unable to pay bribes, set himself on fire to protest police confiscation of his unlicensed vegetable cart. That triggered a revolution. And his death rapidly led to the collapse of a 24-year dictatorship.

Today we have four hot time bombs, tick-ticking, soon to make history; any one can easily accelerate the revolution that’s already killing Wall Street from within.

 

1. Wealth gap: Super-Rich vs class wars, death of democracy

The gap: In one generation, America’s wealthiest 1% has exploded from 9% to 23% of America’s income, while middle-class income has stagnated. Even Buffett admits: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and winning.”

But my rich friend tells the real story, of their social disconnect. The rich just don’t care. They live in a different world, live by a self-centered code lacking a moral compass. The public welfare is honored only if supported by tax benefits.

The wealth gap is widening and soon something unpredictable will ignite a Wall Street revolution.

 

2. Wall Street’s doomsday capitalism vs rule by anarchy

A key Supreme Court decision accelerated and codified Wall Street’s ability to use billions stolen from taxpayers to lobby Washington and solidify its power, all for its own self-interest, through campaign payola, senators’ votes, presidential access, manipulation of regulators, grabbing tax benefits, etc. And it’s every man and woman for themselves.

Don’t believe it? Know this, democracy is dead and you’re in denial. Wall Street CEOs and Forbes 400 billionaires are either engaged in a secret conspiracy, or a classic anarchy picking apart America, oblivious of the fact they are setting up the next big revolution.

 

3. Pentagon’s perpetual war machine vs America’s budget time bomb

The mathematics of our $75 trillion Social Security and Medicare deficits often seem insurmountable, but can be recalibrated. However, the war-loving mindset of America’s neocons — fueled by China’s military actions, the insatiable expansion of our military spending and a Pentagon prediction that global population growth — is putting more and more pressure on the world’s scarce resources, and will, in turn, increase global wars and the demand for more war spending, increasing the risk of sudden revolutions everywhere.

 

4. Global population explosion vs resources, jobs, better lifestyles

As the world population explodes from 7 billion to 10 billion in the next generation, the demand for more jobs and the pressure on scarce resources will increase, while expectations will fall as the ratio of haves to have-nots increases, making the world all around Wall Street a burning powder keg setting up a revolution.

Bottom line: Forget jailing Wall Street’s dictators. It’s naïve and too late. We missed that opportunity. But a revolution will do the trick, give us a second chance to jail the crooks.

Until then, remember, these four factors are building to a head, merging into a critical mass that will accelerate into a revolution and destroy Wall Street from within: The widening wealth gap, capitalism’s new rule-by-anarchy, the high cost of feeding the Pentagon’s costly war machine, and the huge global population explosion.

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