Even Goldman Can’t Explain Away The Market Exuberance

From the start of 2012, the S&P 500 up over 40% with the bulk of that surge coming since QE3 (and 4EVA) was unleashed. Until that point, Goldman’s global risk and macro models had stayed relatively well synced with stock market ‘reality’ but once that torrent of liquidity was released, all bets were off. As the following chart shows, more than half the equity market performance is due to factors unrelated to risk, macro fundamentals, or country-specific factors. So, BFTATH of course?

 

 

Chart: Goldman Sachs


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rD-IQUSsuU4/story01.htm Tyler Durden

Guest Post: The World Is Stuck Between A Rock And A Squishy Place

Submitted by Howard Kunstler of Kunstler.com,

The rock is reality. The squishy place is the illusion that pervasive racketeering is an okay replacement for an economy. The essence of racketeering is the use of dishonest schemes to get money, often (but not always) employing coercion to make it work. Some rackets can function on the sheer cluelessness of the victim(s).

Is it fair to suppose that money management is at the heart of the sort of advanced, complex economy that developed early in the 20th century? I think so. Money is the lifeblood of trade and of investment in productive activities that support trade. Of course, in order for money to have meaning, to function in such transactional relations, the people must be convinced that it legitimately represents its face value. Otherwise, money must be labeled “money” — that is, a medium of exchange suspected of false value. An economy that uses “money” — especially an economy of rackets — is an economy in a lot of trouble, and that is where ours is in December 2013.

The trouble reached escape velocity in the fall of 2008 when a particular brand of racket among the Wall Street kit-bag of rackets got badly out-of-hand, namely the business of selling securitized bundled mortgages and their “innovative” derivative “products” to dupes unaware that they were booby-trapped for failure which would, perversely, hugely reward the seller of such trash paper. These were, in the immortal words of Senator Carl Levin (D-Mich), the “really shitty deal[s]” propagated by the likes of the Goldman Sachs crypto-bank — so-called collateralized debt obligations — pawned off on credulous pension fund managers and other “marks” around the world greedy for “yield.”

It turned out that all the large banks trafficking in such booby-trapped contracts ended up choking on them when “the music stopped” — that is, when the derivative “swaps” payoffs at the heart of this particular racket began to fail, sending up a general alarm that all such “products” were primed to blow up the entire “banking” system. By the way, the quotation marks I so liberally resort to are necessary to denote that in such a matrix of rackets things are not what they appear to be but only what they pretend to be.

The failure of Bear Stearns followed by the implosion of Lehman Brothers and the near-death experience of AIG alerted “civilians” outside Wall Street that the banks were linked in a web of fraud and insolvency and had to be “rescued” in order for the rest of America to keep its “way of life” going. The rescue remedy proved to be several new layers of fraud that have now matured into institutionalized rackets. The best known are the Siamese twins of “Quantitative Easing” and zero interest rate policy (ZIRP). The lesser-known racket was the 2009 rule change by the Financial Accounting Standards Board that allowed banks to make up whatever numbers they felt like in reporting the value of their holdings (“assets”).

Hence, these dishonest, regularized operations can be labeled a hostage racket with coercion at their core. The coercion comes in the form of the threat that any let-up in the stream of QE “money” enjoyed by the banks in the form of carry-trade “loans” and “primary dealer” premium cream-offs will send the economy back to the stone age. Overlooked in this equation is the ongoing destruction of ordinary citizens (a.k.a. the “middle class”) who have already lost their grip on the emblematic “way of life” Wall Street is working so tirelessly to defend. Politicians are, of course, deeply implicated and indeed directly involved in all these rackets, since these hired handmaidens make and execute the laws protecting Wall Street’s looting operations.

The catch to all this, lately, lies in the cognitive dissonance between the symptomatic euphoria of record stock market indexes versus the conviction of a few hardcore skeptical observers that the rackets are now so reckless and impudent as to be beyond any hope of control and on a trajectory to bring about hardships orders of magnitude above anything imagined in 2008.

So-called “health care” is also a hostage racket, since sick people are hardly in a position to bargain for anything, but it is only a sub-system of the larger matrix of rackets that have made this such an unusually dishonest society. My guess is that ObamaCare is sure to make it worse, and pretty quickly too, since the rules for ObamaCare were written by the hireling lobbyists of the industries that benefit from the racketeering.

The big mystery in all this remains: where are the people with some institutional power who might stand up and denounce all this perfidy? What has made us such a culture of cowards and cravens that the best we can do is produce a couple of comedians who speak truth to power in the form of jokes. Most of this is not that funny.

By the way, one reason for the vulgar orgy of “consumerism” that, in recent years, has turned the Thanksgiving holiday into a sort of grotesque sporting event, is to mount a crude demonstration that our “money” is a viable medium of exchange. The dumbest people in the land are induced to swarm through the merchandise warehouse stores and fight to exchange their “money” for hard goods offered at false “bargains.” I wonder how much of it is a dress rehearsal for what happens in a hyper-inflation?


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Y-18TUNaV3Y/story01.htm Tyler Durden

Silver Is Having Its Worst Day In 10 Weeks

Spot Silver is trading back to early July 2013 levels as it drop 4.1% – its biggest down-day since the SeptTaper debacles began. Gold is also being monkey-hammered; down 2.9% for the biggest drop in 2 months. Meanwhile, Bitcoin is on the rise…

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/R2xNdBa1eeE/story01.htm Tyler Durden

Leaked U.N. Document Highlights Drug War Dissent

An internal U.N.
document leaked to The Guardian offers a

rare glimpse
of disagreement about drug policy among member
states, several of which are advocating a less violent approach.
The document, a draft of a policy statement scheduled to be
released next spring, suggests a breakdown in the international
consensus supporting the forcible suppression of politically
disfavored pharmacological tastes:

Ecuador is pushing the UN to include a statement that recognises
that the world needs to look beyond prohibition. Its submission
claims there is “a need for more effective results in addressing
the world drug problem” that will encourage “deliberations on
different approaches that could be more efficient and
effective.”

Venezuela is pushing for the draft to include a new
understanding of “the economic implications of the current
dominating health and law enforcement approach in tackling the
world drug problem”, arguing that the current policy fails to
recognise the “dynamics of the drug criminal market.”…

Norway wants the draft to pose “questions related to
decriminalisation and a critical assessment of the approach
represented by the so-called war on drugs.” Switzerland wants the
draft to recognise the consequences of the current policy on public
health issues. It wants it to include the observation that member
states “note with concern that consumption prevalence has not been
reduced significantly and that the consumption of new psychoactive
substances has increased in most regions of the world.” It also
wants the draft to “express concern that according to UNAids, the
UN programme on HIV/Aids, the global goal of reducing HIV
infections among people who inject drugs by 50% by 2015 will not be
reached, and that drug-related transmission is driving the
expansion of the epidemic in many countries.”

The EU is also pushing hard for the draft to emphasise the need
for drug-dependence treatment and care options for offenders as an
alternative to incarceration.

“Drug users should be entitled to access to treatment, essential
medicines, care and related support services,” the EU’s submission
suggests. “Programmes related to recovery and social reintegration
should also be encouraged.”

With the exception of Ecuador, this is pretty mild stuff,
especially at a time when former presidents of Latin American
countries have publicly called
for
 an end to the war on drugs and two U.S. states, along
with Uruguay, have taken a big step in that direction by legalizing
marijuana. But in the context of U.N. policy statements, which are
usually organized around mindless mantras like “A Drug-Free World
by 2000,” these deviations from prohibitionist orthodoxy seem
almost radical.

“The idea that there is a global consensus on drugs policy is
fake,” Damon Barrett, deputy director of Harm Reduction
International, tells The Guardian. “The differences
have been there for a long time, but you rarely get to see them. It
all gets whittled down to the lowest common denominator, when all
you see is agreement. But it’s interesting to see now what they are
arguing about.”

from Hit & Run http://reason.com/blog/2013/12/02/leaked-un-document-highlights-drug-war-d
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Arizona Battles Feds, Again, Over D.C.'s Restrictive Forest-Use Rules

Not Abandoned propertyState and federal officials in
Arizona are fighting just the latest skirmish in a long-running war
over just how restrictive rules should be over human use of forest
and desert areas. The locals want fewer and uniform restrictions,
while their D.C. counterparts like to play “What will we cite
people for this week?” with campers, hunters, and pretty much
anybody who likes the outdoors. The most recent battle is over a
federal rule-switch, requiring hunters to move their camps every 72
hours. Decades-long practice, as the Arizona Game and Fish
Department points out, is to allow campers to stay in place for 14
days.

The terse U.S. Forest Service
press release
(PDF) that set off the latest kerfuffle reads as
follows:

Flagstaff, Ariz. – The Coconino National Forest is
asking all northern Arizona -bound hunters to refrain from leaving
their trailers unattended in the forest during the upcoming hunting
season. In previous seasons, law enforcement officers have found
numerous trailers parked in the forests for the purpose of
reserving a location for the entire hunting season and also because
the individuals did not want to haul their trailers back and
forth.

Parking a trailer in the forest for this purpose violates Forest
Service regulations. If trailers are left unattended for more than
72 hours, the Forest Service considers them abandoned property and
may remove them from the forest. Violators can also be cited for
this action. Enforcing these regulations protects the property and
allows recreational users equal access to national forests.

This regulation applies to all national forests in northern Ar
izona, including the Coconino, Kaibab and Prescott forests.

Unmentioned in the press release is that this is a change in
long-standing policy. Everybody in Arizona knows that you’re
supposed to shift your camp every two weeks. This is to deter
people from simply moving into the forest permanently.

It doesn’t really work. Plenty of drifters, modern mountain
(wo)men, and adventurous types live scattered through the desert
and forest in tents, campers, trucks. and caves. Most stick it out
during the pleasant weather before moving on, but a few set up

fairly elaborate habitations
and stay for years. One of my
friends (who I’ll write about in detail another time) used to work
for a year or two, and then take to the wilderness. He lived in one
of my tents for a few months after a wildfire cut him off from his
main camp.

But you’re not supposed to do that. So the two-week rule has a
rationale behind it. You can camp, so long as you stop short of
digging a root cellar or building a chimney. Parking in the forest
during the hunting season and “reserving a location” isn’t really
an issue because, you know, the forest is big enough for frigging
mountain men to hide out in on illegal homesteads.

In a
very nice letter
(PDF) to the Forest Service, Larry D. Voyles,
Director of Arizona Game and Fish, points out that hunting and
fishing is actually on the decline across the country, and his
department is actually trying to get more people to go out
in the forest by reducing and simplifying rules and
restrictions.

Having worked as a game warden for more than 30 years, I am
aware that many hunters are forced to hunt in chunks of days. Keep
in mind that some hunters wait for years, if not decades to be
drawn for a particular big game tag. There are many times when a
hunter may be in camp for a few days, have to leave for work, and
then return a few days later to finish his or her hunt.

So running the risk of a citation or even having expensive gear
lifted by the feds is a bit of a downer, however unlikely it is
that one or another green-uniformed dickhead will stumble across
the camp. He pleasantly requested that the feds return to a uniform
14-day rule across all of Arizona’s forests.

No dice. The Game and Fish folks
sent out a warning
last month that “the Department has met
repeatedly with staff from the affected national forests to repeal
this enforcement approach, with no success.” With the sheriffs
departments from Yavapai and Coconino counties, the state developed
a
placard
for people to put on their vehicles, explicitly telling
rangers that trucks and trailers have not been abandoned,
although Game and Fish warns that the feds may well ignore
them.

As I mentioned, this is not the first confrontation between
Arizona and federal officials over land-use rules. During the
government not-so-shutdown, Coconino County deputies
cut the chains on the gate
of a facility closed by the Forest
Service because the closure was causing traffic jams. Sheriffs

went head-to-head with the Forest Service over road closures
.
And now the whole Arizona Sheriffs Association adopted a formal
resolution saying its members oppose and
won’t help the feds enforce their restrictions, including the new
72-hour rule
.

The way things are going, I’m waiting for the first ranger with
an attitude to get trussed and thrown over somebody’s hood. You
don’t even need a tag for them.

Have I mentioned that I’ve
written a novel about wilderness-living hermits, crazed rangers and
general shenanigans
?

from Hit & Run http://reason.com/blog/2013/12/02/arizona-and-feds-face-off-again-over-lan
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Arizona Battles Feds, Again, Over D.C.’s Restrictive Forest-Use Rules

Not Abandoned propertyState and federal officials in
Arizona are fighting just the latest skirmish in a long-running war
over just how restrictive rules should be over human use of forest
and desert areas. The locals want fewer and uniform restrictions,
while their D.C. counterparts like to play “What will we cite
people for this week?” with campers, hunters, and pretty much
anybody who likes the outdoors. The most recent battle is over a
federal rule-switch, requiring hunters to move their camps every 72
hours. Decades-long practice, as the Arizona Game and Fish
Department points out, is to allow campers to stay in place for 14
days.

The terse U.S. Forest Service
press release
(PDF) that set off the latest kerfuffle reads as
follows:

Flagstaff, Ariz. – The Coconino National Forest is
asking all northern Arizona -bound hunters to refrain from leaving
their trailers unattended in the forest during the upcoming hunting
season. In previous seasons, law enforcement officers have found
numerous trailers parked in the forests for the purpose of
reserving a location for the entire hunting season and also because
the individuals did not want to haul their trailers back and
forth.

Parking a trailer in the forest for this purpose violates Forest
Service regulations. If trailers are left unattended for more than
72 hours, the Forest Service considers them abandoned property and
may remove them from the forest. Violators can also be cited for
this action. Enforcing these regulations protects the property and
allows recreational users equal access to national forests.

This regulation applies to all national forests in northern Ar
izona, including the Coconino, Kaibab and Prescott forests.

Unmentioned in the press release is that this is a change in
long-standing policy. Everybody in Arizona knows that you’re
supposed to shift your camp every two weeks. This is to deter
people from simply moving into the forest permanently.

It doesn’t really work. Plenty of drifters, modern mountain
(wo)men, and adventurous types live scattered through the desert
and forest in tents, campers, trucks. and caves. Most stick it out
during the pleasant weather before moving on, but a few set up

fairly elaborate habitations
and stay for years. One of my
friends (who I’ll write about in detail another time) used to work
for a year or two, and then take to the wilderness. He lived in one
of my tents for a few months after a wildfire cut him off from his
main camp.

But you’re not supposed to do that. So the two-week rule has a
rationale behind it. You can camp, so long as you stop short of
digging a root cellar or building a chimney. Parking in the forest
during the hunting season and “reserving a location” isn’t really
an issue because, you know, the forest is big enough for frigging
mountain men to hide out in on illegal homesteads.

In a
very nice letter
(PDF) to the Forest Service, Larry D. Voyles,
Director of Arizona Game and Fish, points out that hunting and
fishing is actually on the decline across the country, and his
department is actually trying to get more people to go out
in the forest by reducing and simplifying rules and
restrictions.

Having worked as a game warden for more than 30 years, I am
aware that many hunters are forced to hunt in chunks of days. Keep
in mind that some hunters wait for years, if not decades to be
drawn for a particular big game tag. There are many times when a
hunter may be in camp for a few days, have to leave for work, and
then return a few days later to finish his or her hunt.

So running the risk of a citation or even having expensive gear
lifted by the feds is a bit of a downer, however unlikely it is
that one or another green-uniformed dickhead will stumble across
the camp. He pleasantly requested that the feds return to a uniform
14-day rule across all of Arizona’s forests.

No dice. The Game and Fish folks
sent out a warning
last month that “the Department has met
repeatedly with staff from the affected national forests to repeal
this enforcement approach, with no success.” With the sheriffs
departments from Yavapai and Coconino counties, the state developed
a
placard
for people to put on their vehicles, explicitly telling
rangers that trucks and trailers have not been abandoned,
although Game and Fish warns that the feds may well ignore
them.

As I mentioned, this is not the first confrontation between
Arizona and federal officials over land-use rules. During the
government not-so-shutdown, Coconino County deputies
cut the chains on the gate
of a facility closed by the Forest
Service because the closure was causing traffic jams. Sheriffs

went head-to-head with the Forest Service over road closures
.
And now the whole Arizona Sheriffs Association adopted a formal
resolution saying its members oppose and
won’t help the feds enforce their restrictions, including the new
72-hour rule
.

The way things are going, I’m waiting for the first ranger with
an attitude to get trussed and thrown over somebody’s hood. You
don’t even need a tag for them.

Have I mentioned that I’ve
written a novel about wilderness-living hermits, crazed rangers and
general shenanigans
?

from Hit & Run http://reason.com/blog/2013/12/02/arizona-and-feds-face-off-again-over-lan
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Are Another 1.3 Million Americans About To Drop Out Of Labor Force (And Send Unemployment Plunging)?

With even the Fed somewhat challenging the credibility of the official unemployment rate – as labor force participation collapses structurally – the possibility that if Congress does not act by Dec 28th, a further 1.3 million people will lose emergency aid and may be deemed 'out' of the labor force merely exaggerates an already farcical situation. As JPM's Mike Feroli notes, the "official" unemployment rate may drop up to 0.8 percentage points, but it won't mean the economy is any better. Is this the 'excuse' the Fed needs to transition from QE to forward guidance (with the public seeing only a rapidly collapsing unemployment rate as evidence of their success) even as the data that they are so "dependent" on becomes worse than useless?

 

As we warned in November, the only two charts that matter ahead of Friday's likely distorted nonfarm payrolls report.

First, the labor force participation rate, which plunged from 63.2% to 62.8% – the lowest since 1978!

 

But more importantly, the number of people not in the labor force exploded by nearly 1 million, or 932,000 to be exact, in just the month of October, to a record 91.5 million Americans! This was the third highest monthly increase in people falling out of the labor force in US history.

At this pace the people out of the labor force will surpass the working Americans in about 4 years.

 

And if the Congress does not pass the bill to extend emergency aid – set to expire Dec 28th – then up to 1.3 million more people will be added to that list of 91.5 million already our of the labor force (and another 800,000 more to come in further months)…

This has profound implications for the oh-so-important unemployment rate that  the Fed is so dependent upon…

JPM's Feroli: One observation that could set an upper bound on thinking about a participation effect is to hypothesize that all 1.3 million EUC claimants exit the labor force after benefits expire in 1Q (again, should Congress allow that to happen). In that case, the unemployment rate would fall by 0.8%-pt, obviously an extreme example. Some of the Fed studies can help to narrow the range of outcomes.

 

One of the more recent works (Farber and Valletta from the San Francisco Fed) indicates that about a fifth of long-term unemployment is due to extended benefits. With just over 4 million long-term unemployed recently, this would imply that the absence of extended UI benefits could lower the unemployment rate by 0.5%-pt.

This will directly impact the Fed's credibility to manage the economt in a "data-dependent" manner:

JPM's Feroli: Setting aside the normative aspect of whether from a public policy perspective this is a desirable or undesirable outcome, such a fall in the unemployment and participation rates could create some tricky choices for Fed policymakers as they assess the health of the labor market.

Remember, while consensus is convinced Taper is a positive (the Fed wouldn't pull back unless everything is golden); we suspect, and today's Treasury Auction Failure supports that thesis, that the Fed is looking for excuses to Taper (or shift policy away from QE)…

As we have noted numerous times before; the "taper" is all about economic cover for a forced move the Fed has to make:

 

1. Deficits are shrinking and the Fed has less and less room for its buying

 

2. Under the surface, various non-mainstream technicalities are breaking in the markets due to the size of the Fed's position (repo markets, bond specialness, and fail-to-delivers among them).

 

3. Sentiment is critical; if the public starts to believe (as Kyle Bass warned) that the central bank is monetizing the government's debt (which it clearly is), then the game accelerates away from them very quickly – and we suspect they fear we are close to that tipping point

 

4. The rest of the world is not happy. As Canada just noted, the US monetary policy will be discussed at the G-20

Simply put, they are cornered and need to Taper; no matter how bad the macro data and we are sure 'trends' and longer-term horizons will come to their rescue in defending the prime dealers' clear agreement that it is time…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/dTvkVxhjQDw/story01.htm Tyler Durden

Chart Of The Day: The Fed Now Owns One Third Of The Entire US Bond Market

The most important chart that nobody at the Fed seems to pay any attention to, and certainly none of the economists who urge the Fed to accelerate its monetization of Treasury paper, is shown below: it shows the Fed’s total holdings of the entire bond market expressed in 10 Year equivalents (because as a reminder to the Krugmans and Bullards of the world a 3 Year is not the same as a 30 Year). As we, and the TBAC, have been pounding the table over the past year (here, here and here as a sample), the amount of securities that the Fed can absorb without crushing the liquidity in the “deepest” bond market in the world is rapidly declining, and specifically now that the Fed has refused to taper, it is absorbing over 0.3% of all Ten Year Equivalents, also known as “High Quality Collateral”, from the private sector every week. The total number as per the most recent weekly update is now a whopping 33.18%, up from 32.85% the week before. Or, said otherwise, the Fed now owns a third of the entire US bond market.

At this pace, assuming Janet Yellen keeps delaying the taper again and again over fears of how “tighter” financial conditions would get, even as gross US bond issuance declines in line with the decline in deficit funding needs, the Fed will own just shy of half the entire bond market on December 31, 2014… and all of it some time in 2018.

Source: Stone McCarthy


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bJwW33y_Tuw/story01.htm Tyler Durden

America's Excuse Book: Take Your Choice, Victim Or Heartless Hypocrite

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Yes, there are injustices and imbalances of power and wealth that we collectively need to remedy. But the way to do that is to embrace fact, responsibility, choice, consequence and thrift rather than deny those realities in favor of a false dichotomy of victim and non-victim.

Are the “poor” really too poor to buy fresh ingredients? Let’s start with the fact that according to the U.S. Census Bureau, 49% of Americans Get Gov’t Benefits; 82 million in Households on Medicaid. That means roughly 156 million Americans out of 317 million total population are receiving cash benefits (i.e. direct transfers) from the Federal government. Approximately 57 million receive Social Security retirement or disability benefits.

Over 47.6 million people get SNAP food stamps, a non-cash benefit that acts just like cash at the grocery store. Clearly, the vast majority of those with low incomes receive government cash or equivalent benefits.

How many “poor” people routinely buy fast food meals that cost $3 or more? How many buy frozen waffles, chips, snacks, frozen pizzas, etc. with food stamps, purchases that add up to way more money than the ingredients of the Thanksgiving dinner that so enraged the reader? How many households would it take to pool some food stamps to spend $130 to make 40-50 servings of a great, healthy home-cooked meal?

The excusers, enablers and guilt-trippers seek to divide the populace into two (and only two) classes: victims and non-victims, who are by definition heartless hypocrites (or worse).

Luckily for the excusers, enablers and guilt-trippers, America’s Excuse Book runs into the thousands of pages. There are excuses for literally everyone and every situation; almost everyone can stake a claim to victimhood.

People have written me that the “poor” don’t have stoves/ovens, and this is why they are forced to eat junk food. Really? What percentage of people in America live in dwellings without stoves/ovens? People in residential single-occupancy (RSOs) flophouses, perhaps, but precisely how many people of the 317 million Americans have zero access to a single burner?

I suspect the number is quite small.

As I have noted before, 2 billion people in China and India prepare meals with one burner and a wok. If I didn’t have an oven, I can prepare a nice meal with a single-burner camp stove and a small wok. So can several billion other people.

This kind of refutation of victimhood enrages the excusers, enablers and guilt-trippers because it demolishes the primary claim of victimhood: that people have no other choices–in other words, denying that the vast majority of situations offer a range of choices, and that choices have consequences.

The basic assumption of excusers, enablers and guilt-trippers is that victimhood arises not from choices but from Fate or the heartlessness of those with “more.”

Let’s distinguish between Fate and consequences of choices. A person who discovers they have a brain tumor had no choice in the matter–the cancer was a matter of fate. A person who is obese due to poor dietary and fitness choices and presents their sleep apnea, diabetes, high blood pressure, etc. etc. as fate is avoiding the causal connection between their lifestyle and life choices and their health problems.

Can we deny that most people have choices, even in poverty? Can we plausibly claim that poverty is all Fate and choice is inconsequential? If choice is inconsequential, then isn’t our entire system of government and all major religions completely false, because they are all based on human will and choice being consequential?

If a person with low income chooses to stop buying fast food, junk food, sodas, snacks, chips and convenience food and only buys and prepare real food low on the food chain, they will instantly become wealthier because real food that is prepared and not thrown out is significantly cheaper than fast food, junk food, snacks, etc.

If the low-income person also stops smoking, they will also instantly become wealthier.

Since all that’s needed to prepare the great cuisines of Asia is a single burner and single wok or equivalent, we don’t need much to prepare healthy, tasty real-food meals. (I’ve posted photos here many times of my one-wok meals.)

If low-income (i.e. poverty) is fated, or the result of institutional forces that cannot be overcome, then how do we explain the multitudes of immigrants from every continent who arrive in America essentially penniless and who somehow manage to improve their lives despite low income, unfamiliarity with English, a dearth of institutional or family connections, etc. etc. etc.?

How is a low-income immigrant family able to pay off the mortgage on the family home in a few years while others blame the system for their heavy debt loads?

Since wealth creation is increasingly based on human and social capital and learning on one’s own, the low-income person who stops watching TV and spending hours on social media will instantly be “wealthy” in terms of time that can be invested in building human and social capital–subjects I have written about extensively here, precisely because they require essentially no money other than an Internet connection. Building human and social capital is mostly a matter of effort and time. Anyone can improve their human and social capital and thus eventually their income and financial security.

Surveys routinely find that typical Americans spend 4-6 hours a day watching TV or other entertainment. The individual who chooses to take those 28-42 hours a week and invest them in mastering a new skill, seeking mentors, becoming a mentor–all the building blocks of human and social capital–will soon find that there are multiple returns on their investment of time and effort.

This kind of refutation of victimhood enrages the excusers, enablers and guilt-trippers for another reason: we know from psychology that two primary psychological defenses against accepting responsibility are transference and projection: if we can project our own ills onto others, we feel justified in our self-pitying victimhood.

If we can transfer the source of our problems (i.e. our own issues and failures) onto someone else, then we feel blameless for our own difficulties, i.e. being a victim.

This is why troubled families will often subconsciously select one child as the “cause” of the family’s difficulties. If everyone blames this one child, they are magically free of responsibility.

This is the root psychology of the permanently-enraged excusers, enablers and guilt-trippers, i.e. those who have memorized entire chapters of the Book of Excuses: people are victims not from their own choices or a combination of choice and the fate that everyone is exposed to just by being alive, but because the non-victims are heartless hypocrites clinging greedily to everything that victims don’t have access to, for example, a potluck Thanksgiving meal that costs $3.25 a serving.

Did the person who claims to be denied access to a $3/serving meal really do everything in their power to forego counterproductive or wasteful spending so they could spend their food stamps or cash on real food? Di
d they devote their spare time to building human and social capital, for example, learning how to cook, sharing meals with others, teaching others how to cook once they had learned, etc.?

Everyone who feels enraged by the previous paragraph has to ask themselves: what is the real root of your outrage and your need to make excuses for everyone with difficulties resulting from choices made in response to their circumstances?

The question is always: is there absolutely nothing that a person can do to improve their circumstances? Are there things that could be learned for free that would improve their life? Is there absolutely nothing they can do on their own behalf in terms of building human and scial capital, both of which require only effort and time? Are there absolutely no alternatives or choices, even in the smallest details of everyday life?

Stripped to its essence, the outrage of excusers, enablers and guilt-trippers is phony and self-righteous, a classic psychological defense against having to accept responsibility: blame the heartless who “should” be giving their own meal away (if you don’t, you’re a heartless hypocrite, you heartless hypocrite!), blame Fate or something/somebody, do anything but accept that there are choices and that choices have consequences, both short and long-term.

I have a number of disabilities that are “good enough” to claim membership in the victimhood class (one famously “owned” by a Steinbeck character) but they are none of anyone else’s business. I think it’s self-evident that victimhood and the sense of enraged, self-pitying entitlement it fosters is a dead-end, ethically, spiritually, psychologically, politically and financially.

According to Social Security, I have earned $543,718 in 43 years of ceaseless toil (2013 is not yet included, of course, so I have been working for 44 years), generally working 50-60 hours a week in multiple endeavors. That is $12,644 per year. That was a decent wage in 1977, now, not so much. Inflation makes it difficult to adjust previous years’ income into “today’s dollars,” but however you figure it, it isn’t the lifetime earnings of a “wealthy” person. And no, I have never received an inheritance or made a fortune in capital gains or made a ton of unreported income in the black market, nor did my wife have any advantages or unearned wealth.

(In fact, she dropped out of college to spend three years working 60+ workweeks in low-paying jobs to save the money to buy her single-parent mother a modest home. In other words, clearly she too is a heartless hypocrite for daring to spend hours preparing a meal from scratch for family, friends and neighbors.)

Thank goodness some people are so saintly and godlike that they can discern heartless hypocrites without knowing a darn thing about the people they so assuredly toss into the heartless hypocrite class. Now I know how the Inquisition worked: the saintly sinless fingered the heartless without needing any facts.

In 14 of the past 20 years, my net taxable wages were less than $10,000 a year.

In other words, by official measures, I have been “poor” for much of my working life.

For the vast majority of those who choose to write for money (as opposed to pursuing an unpaid hobby), one consequence of that choice is a low income. Choices have consequences; there is nothing mysterious about this causal link. If you want another consequence, fire up your will and make another choice.

Changing one’s circumstances for the better generally requires not months of unceasing discipline, work and effort, but years or even decades of unceasing, dedicated toil, and daily sacrifices of present-day convenience for future benefits.

Improving one’s circumstances (health, mindset, spiritual attainment, financial security, networks of colleagues, circles of friends, etc. etc. etc.) is the same process as getting good enough at something that people will pay you to perform that service or make that good for them.

Sometimes it requires moving to a new locale, changing careers, studying hard, and distinguishing between conveniences that are assumed to be essentials but that are actually luxuries that can be sacrificed for thrift in service of long-term goals. In all cases, it requires accepting risks: risks of failure, risk that the study might not pay off, risk that some accident could derail your plans, and so on.

Victimhood is not just a rejection of choice and consequence, but of risk–yet risk is ever-present and cannot be disappeared. Risk can only be managed and hedged, and only imperfectly at best.

Another big chunk of my life was spent working for low-paying non-profit groups advancing causes I believe in. The low pay was a consequence that went with the choice of advancing causes one is devoted to furthering.

When I was a builder in my youth, I gave jobs to vets and guys with criminal records– marijuana dealing convictions, petty theft, that kind of thing. This choice opened the door to various risks and potential non-financial rewards. The reality is that “there is no security on this earth; there is only opportunity.” Some opportunities you take, others you give.

Alas, earning a modest income doesn’t preclude one from being tossed into the “heartless hypocrite” class if your ceaseless toil includes being extremely thrifty and making your own Thanksgiving meals with family, friends and neighbors. That you have have something others do not makes you a heartless hypocrite, regardless of your own frailties, disabilities, income or indeed, any other fact.

Here’s your Excuse Book, America. There’s something for almost everyone. Luckily, there is still an infinite abundance of excuses, guilt-tripping, victimhood, rage against those with “more” (never mind what they sacrificed to build it) and denial of choice, consequence, risk and fact.

Sadly, there are consequences to the pursuit of victimhood and the denial of will, choice, consequence, risk and fact, and they will be consequential indeed.

Yes, there are injustices and imbalances of power and wealth that we collectively need to remedy. But the way to do that is to embrace fact, responsibility, choice, consequence and thrift rather than deny those realities in favor of a false dichotomy of victim and heartless non-victim.

If those are the only “choices” left, America, count me out.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/fQz0BDrOsuQ/story01.htm Tyler Durden

America’s Excuse Book: Take Your Choice, Victim Or Heartless Hypocrite

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Yes, there are injustices and imbalances of power and wealth that we collectively need to remedy. But the way to do that is to embrace fact, responsibility, choice, consequence and thrift rather than deny those realities in favor of a false dichotomy of victim and non-victim.

Are the “poor” really too poor to buy fresh ingredients? Let’s start with the fact that according to the U.S. Census Bureau, 49% of Americans Get Gov’t Benefits; 82 million in Households on Medicaid. That means roughly 156 million Americans out of 317 million total population are receiving cash benefits (i.e. direct transfers) from the Federal government. Approximately 57 million receive Social Security retirement or disability benefits.

Over 47.6 million people get SNAP food stamps, a non-cash benefit that acts just like cash at the grocery store. Clearly, the vast majority of those with low incomes receive government cash or equivalent benefits.

How many “poor” people routinely buy fast food meals that cost $3 or more? How many buy frozen waffles, chips, snacks, frozen pizzas, etc. with food stamps, purchases that add up to way more money than the ingredients of the Thanksgiving dinner that so enraged the reader? How many households would it take to pool some food stamps to spend $130 to make 40-50 servings of a great, healthy home-cooked meal?

The excusers, enablers and guilt-trippers seek to divide the populace into two (and only two) classes: victims and non-victims, who are by definition heartless hypocrites (or worse).

Luckily for the excusers, enablers and guilt-trippers, America’s Excuse Book runs into the thousands of pages. There are excuses for literally everyone and every situation; almost everyone can stake a claim to victimhood.

People have written me that the “poor” don’t have stoves/ovens, and this is why they are forced to eat junk food. Really? What percentage of people in America live in dwellings without stoves/ovens? People in residential single-occupancy (RSOs) flophouses, perhaps, but precisely how many people of the 317 million Americans have zero access to a single burner?

I suspect the number is quite small.

As I have noted before, 2 billion people in China and India prepare meals with one burner and a wok. If I didn’t have an oven, I can prepare a nice meal with a single-burner camp stove and a small wok. So can several billion other people.

This kind of refutation of victimhood enrages the excusers, enablers and guilt-trippers because it demolishes the primary claim of victimhood: that people have no other choices–in other words, denying that the vast majority of situations offer a range of choices, and that choices have consequences.

The basic assumption of excusers, enablers and guilt-trippers is that victimhood arises not from choices but from Fate or the heartlessness of those with “more.”

Let’s distinguish between Fate and consequences of choices. A person who discovers they have a brain tumor had no choice in the matter–the cancer was a matter of fate. A person who is obese due to poor dietary and fitness choices and presents their sleep apnea, diabetes, high blood pressure, etc. etc. as fate is avoiding the causal connection between their lifestyle and life choices and their health problems.

Can we deny that most people have choices, even in poverty? Can we plausibly claim that poverty is all Fate and choice is inconsequential? If choice is inconsequential, then isn’t our entire system of government and all major religions completely false, because they are all based on human will and choice being consequential?

If a person with low income chooses to stop buying fast food, junk food, sodas, snacks, chips and convenience food and only buys and prepare real food low on the food chain, they will instantly become wealthier because real food that is prepared and not thrown out is significantly cheaper than fast food, junk food, snacks, etc.

If the low-income person also stops smoking, they will also instantly become wealthier.

Since all that’s needed to prepare the great cuisines of Asia is a single burner and single wok or equivalent, we don’t need much to prepare healthy, tasty real-food meals. (I’ve posted photos here many times of my one-wok meals.)

If low-income (i.e. poverty) is fated, or the result of institutional forces that cannot be overcome, then how do we explain the multitudes of immigrants from every continent who arrive in America essentially penniless and who somehow manage to improve their lives despite low income, unfamiliarity with English, a dearth of institutional or family connections, etc. etc. etc.?

How is a low-income immigrant family able to pay off the mortgage on the family home in a few years while others blame the system for their heavy debt loads?

Since wealth creation is increasingly based on human and social capital and learning on one’s own, the low-income person who stops watching TV and spending hours on social media will instantly be “wealthy” in terms of time that can be invested in building human and social capital–subjects I have written about extensively here, precisely because they require essentially no money other than an Internet connection. Building human and social capital is mostly a matter of effort and time. Anyone can improve their human and social capital and thus eventually their income and financial security.

Surveys routinely find that typical Americans spend 4-6 hours a day watching TV or other entertainment. The individual who chooses to take those 28-42 hours a week and invest them in mastering a new skill, seeking mentors, becoming a mentor–all the building blocks of human and social capital–will soon find that there are multiple returns on their investment of time and effort.

This kind of refutation of victimhood enrages the excusers, enablers and guilt-trippers for another reason: we know from psychology that two primary psychological defenses against accepting responsibility are transference and projection: if we can project our own ills onto others, we feel justified in our self-pitying victimhood.

If we can transfer the source of our problems (i.e. our own issues and failures) onto someone else, then we feel blameless for our own difficulties, i.e. being a victim.

This is why troubled families will often subconsciously select one child as the “cause” of the family’s difficulties. If everyone blames this one child, they are magically free of responsibility.

This is the root psychology of the permanently-enraged excusers, enablers and guilt-trippers, i.e. those who have memorized entire chapters of the Book of Excuses: people are victims not from their own choices or a combination of choice and the fate that everyone is exposed to just by being alive, but because the non-victims are heartless hypocrites clinging greedily to everything that victims don’t have access to, for example, a potluck Thanksgiving meal that costs $3.25 a serving.

Did the person who claims to be denied access to a $3/serving meal really do everything in their power to forego counterproductive or wasteful spending so they could spend their food stamps or cash on real food? Did they devote their spare time to building human and social capital, for example, learning how to cook, sharing meals with others, teaching others how to cook once they had learned, etc.?

Everyone who feels enraged by the previous paragraph has to ask themselves: what is the real root of your outrage and your need to make excuses for everyone with difficulties resulting from choices made in response to their circumstances?

The question is always: is there absolutely nothing that a person can do to improve their circumstances? Are there things that could be learned for free that would improve their life? Is there absolutely nothing they can do on their own behalf in terms of building human and scial capital, both of which require only effort and time? Are there absolutely no alternatives or choices, even in the smallest details of everyday life?

Stripped to its essence, the outrage of excusers, enablers and guilt-trippers is phony and self-righteous, a classic psychological defense against having to accept responsibility: blame the heartless who “should” be giving their own meal away (if you don’t, you’re a heartless hypocrite, you heartless hypocrite!), blame Fate or something/somebody, do anything but accept that there are choices and that choices have consequences, both short and long-term.

I have a number of disabilities that are “good enough” to claim membership in the victimhood class (one famously “owned” by a Steinbeck character) but they are none of anyone else’s business. I think it’s self-evident that victimhood and the sense of enraged, self-pitying entitlement it fosters is a dead-end, ethically, spiritually, psychologically, politically and financially.

According to Social Security, I have earned $543,718 in 43 years of ceaseless toil (2013 is not yet included, of course, so I have been working for 44 years), generally working 50-60 hours a week in multiple endeavors. That is $12,644 per year. That was a decent wage in 1977, now, not so much. Inflation makes it difficult to adjust previous years’ income into “today’s dollars,” but however you figure it, it isn’t the lifetime earnings of a “wealthy” person. And no, I have never received an inheritance or made a fortune in capital gains or made a ton of unreported income in the black market, nor did my wife have any advantages or unearned wealth.

(In fact, she dropped out of college to spend three years working 60+ workweeks in low-paying jobs to save the money to buy her single-parent mother a modest home. In other words, clearly she too is a heartless hypocrite for daring to spend hours preparing a meal from scratch for family, friends and neighbors.)

Thank goodness some people are so saintly and godlike that they can discern heartless hypocrites without knowing a darn thing about the people they so assuredly toss into the heartless hypocrite class. Now I know how the Inquisition worked: the saintly sinless fingered the heartless without needing any facts.

In 14 of the past 20 years, my net taxable wages were less than $10,000 a year.

In other words, by official measures, I have been “poor” for much of my working life.

For the vast majority of those who choose to write for money (as opposed to pursuing an unpaid hobby), one consequence of that choice is a low income. Choices have consequences; there is nothing mysterious about this causal link. If you want another consequence, fire up your will and make another choice.

Changing one’s circumstances for the better generally requires not months of unceasing discipline, work and effort, but years or even decades of unceasing, dedicated toil, and daily sacrifices of present-day convenience for future benefits.

Improving one’s circumstances (health, mindset, spiritual attainment, financial security, networks of colleagues, circles of friends, etc. etc. etc.) is the same process as getting good enough at something that people will pay you to perform that service or make that good for them.

Sometimes it requires moving to a new locale, changing careers, studying hard, and distinguishing between conveniences that are assumed to be essentials but that are actually luxuries that can be sacrificed for thrift in service of long-term goals. In all cases, it requires accepting risks: risks of failure, risk that the study might not pay off, risk that some accident could derail your plans, and so on.

Victimhood is not just a rejection of choice and consequence, but of risk–yet risk is ever-present and cannot be disappeared. Risk can only be managed and hedged, and only imperfectly at best.

Another big chunk of my life was spent working for low-paying non-profit groups advancing causes I believe in. The low pay was a consequence that went with the choice of advancing causes one is devoted to furthering.

When I was a builder in my youth, I gave jobs to vets and guys with criminal records– marijuana dealing convictions, petty theft, that kind of thing. This choice opened the door to various risks and potential non-financial rewards. The reality is that “there is no security on this earth; there is only opportunity.” Some opportunities you take, others you give.

Alas, earning a modest income doesn’t preclude one from being tossed into the “heartless hypocrite” class if your ceaseless toil includes being extremely thrifty and making your own Thanksgiving meals with family, friends and neighbors. That you have have something others do not makes you a heartless hypocrite, regardless of your own frailties, disabilities, income or indeed, any other fact.

Here’s your Excuse Book, America. There’s something for almost everyone. Luckily, there is still an infinite abundance of excuses, guilt-tripping, victimhood, rage against those with “more” (never mind what they sacrificed to build it) and denial of choice, consequence, risk and fact.

Sadly, there are consequences to the pursuit of victimhood and the denial of will, choice, consequence, risk and fact, and they will be consequential indeed.

Yes, there are injustices and imbalances of power and wealth that we collectively need to remedy. But the way to do that is to embrace fact, responsibility, choice, consequence and thrift rather than deny those realities in favor of a false dichotomy of victim and heartless non-victim.

If those are the only “choices” left, America, count me out.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/fQz0BDrOsuQ/story01.htm Tyler Durden