Juggling Dynamite

If America aspires to being a model democracy in the world, it has to start acting like one.

Most Americans believe it’s illegal for politicians to profit from their public office but, as Steve Kroft reports, that’s not the case…

As the saying goes the real scandal in Washington isn’t what’s illegal, it’s what’s legal.

Georgia Sen. Saxby Chambliss likes golf, so much so that he spent more than $100,000 the past two years entertaining at some of the finest courses in the world. New York congressman Gregory Meeks prefers football. He spent $35,000 on NFL games. All of this was paid for with political contributions — all in the name of democracy.

Peter Schweizer: I think campaign fundraising is increasingly not just about winning elections. It’s a lifestyle subsidy. Here is a direct video link.

Today we have another day, another wave of weak retail sales reports…

Weak first-quarter earnings by retailing juggernauts Macy’s (M) and Walmart (WMT) have investors and industry insiders questioning the financial health of U.S. consumers. Howard Davidowitz, a longtime consultant to the retail industry, says retailers catering to the middle-class will continue to miss profit and sales forecasts for the foreseeable future.

“Eighty percent of America is in a recession,” he argues in the video above. “One in six Americans are in poverty. Forty-nine million are on food stamps. Americans don’t have money.”

Davidowitz rejects the notion that cold, wintery weather in the Northeast prevented individuals from shopping this winter. He believes it’s the economy that is keeping shoppers at home.

“Walmart [earnings] have been down for six straight quarters,” he says. “The economy is structurally weak. People can’t afford to shop at Walmart.” Here is a direct video link to an insightful discussion.

St. Louis Federal Reserve Bank President James Bullard said Friday that the Fed will need to raise interest rates by the end of the first quarter of 2015. However, Pimco’s Tony Crescenzi doesn’t see that happening so soon.Here is a direct video link.

Key factors pressuring rates lower today remain an aging population and the gifts of 30 years of reckless credit policies from global bankers and governments that resulted in stagnant wage growth courtesy of globalization and excess capacity leading to an indebted, under-saved, aging western populace along with an under-employed and already indebted youth. 

Our own work suggests that bond yields may well be rolling over again as shown below in the chart of the US 10-year Treasury. 2.50 is the next key test level and if that support fails, then the 2% range is back in view.  This will mean that under-capitalization rates in savings and pension plans will continue to grow and in turn, continue to suppress spending in the future.  The credit bubble is the gift that keeps taking future demand.