Juggling Dynamite

Senators Elizabeth Warren (D-Mass) and John McCain (R-Ariz.) continue as forceful advocates for the intelligent and obviously necessary return to a Glass-Steagall-like division preventing banks from levered speculating backed by the American taxpayer. This clip from 2013, is a good reminder of some of the history of this fight and why congress and the business media continue to oppose this return to reason with all of their bank-sponsored might. Here is a direct video link.

As more and more people move into cities, the demand for access to fresher, more nutritious foods continues to rise.

Brooklyn-based Gotham Greens builds greenhouses on urban rooftops. Inside the greenhouses, the company grows vegetables that don’t have to make the long journey most food makes from rural farms to cities…

This high-tech solution, though costly and subject to space limitations, is one of many approaches to urban agriculture now being explored around the globe. And on a per-square-foot basis, its product yields could potentially eclipse those produced by traditional farming methods.

Here is a direct video clip.

In 2013, $10.832 trillion of the $15.942 trillion GDP produced in the US went toward household purchases. This means that consumer spending from US households–the wealthiest in the world–while diminished since the credit bubble peak in 2007-08, still accounts for more than two-thirds of U.S. economic demand, and remains the most dominant cohort driving global demand. In Q1 the growth in this key sector was lowered to a 1.0 percent rate compared with the long-term average growth trend of more than 3% a year.

While corporations have borrowed trillions at the lowest interest rates in at least 3 centuries and then plowed the funds into buying back their own shares on the open market to increase reported profits (per share) and use their sky-high stocks as the “free” currency for mergers and acquisitions of other over-valued companies, the aging and indebted western consumer continues to slip further below historic consumption trends.

The great equalizer persists however:  just as neither labor nor management get their way indefinitely in the interdependent ecosystem of a consumer-led economy, corporate profits remain the most mean-reverting economic series ever plotted as shown below.  The glaring overshoot of corporate profits as a percentage of GDP the past 5 years has some re-coupling to do.  And when that happens, those owning stocks today valued at 26 times average 10 year earnings, are likely to feel the financial pain of excessive optimism.