Friday, August 22, 2014

The Stunning Charts Showing Just How Much Richer The Rich Have Gotten While The Poor Drown In Debt (Zerohedge)

 

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Submitted by Tyler Durden on 08/21/2014 19:59 -0400

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The Fed's epic wealth redistribution scheme has gotten so simple, even a 5 year old Census Bureau employee gets it.

In the latest Household Wealth report by the government agency, the Census found that for the period ended 2011 the rich got richer (and would get much richer in the subsequent 2.5 years), while the poor, i.e. the majority of the US population, got poorer. In fact, not only did the poor get poorer, but the first quintile of the US population, or the bottom 20% by net worth, certainly not by representation as it happens to be the most populated, saw a decline in net worth from negative $905 in 2000 to negative $6,029, in other words debt.  Remember this chart showing that the rich have assets and the poor have debt...

... Well here it is again, this time with numbers populated from the Census Bureau:

In the meantime the rich have gotten ridiculously rich. The numbers, for 2011, are straightforward: the median net worth of the top 20% rose 0.4% to $630,754, and has increased by $61,379 in net worth since the year 2000. A simple infographic showing this:

A time lapse at the change in net worth across all cohorts. Of note: the 4th and 5th quintiles have done well. Everyone else, not so much. In fact, the median net worth for all households declined by 6.8% ot $5,046 between 2000 and 2011!

This is how the Census phrases it:

Median net worth increased between 2000 and 2011 for households in the top two quintiles of the net worth distribution (the wealthiest 40 percent), while declining for those in the lower three quintiles (the bottom 60 percent), according to new statistics released today by the U.S. Census Bureau. The result was a widening wealth gap between those at the top and those in the middle and bottom of the net worth distribution. Each quintile represents 20 percent, or one-fifth, of all households.

According to Distribution of Household Wealth in the U.S.: 2000 to 2011 and associated detailed tables, median household net worth decreased by $5,124 for households in the first (bottom) net worth quintile and increased by $61,379 (or 10.8 percent) for those in the highest (top) quintile (Figure 1). Median net worth of households in the highest quintile was 39.8 times higher than the second lowest quintile in 2000, and it rose to 86.8 times higher in 2011. (Figure 2).

The report also details a widening of the wealth gap for households sharing the same demographic characteristics, such as age, race and Hispanic origin, and educational attainment of the householder. For example, the median net worth for non-Hispanic whites in the highest quintile was 21.8 times higher than for those in the second-lowest quintile in 2000; in 2011, this had increased to 31.5 times higher. For blacks, the ratio increased from 139.9 to 328.1, and for Hispanics, the increase was from 158.4 to 220.9.

As noted above, keep in mind that this data is only through 2011. Based on historical data, and as we have reported previously total household net worth surpassed previous records in mid 2013 and is currently in uncharted territory courtesy entirely of the relentless engineered rise in the Fed-manipulated stock market. In fact, based on Q1 data, total household net worth is at a record high of $81.8 trillion, with the bulk of it, or $67 trillion, derived from financial assets.

Which means that in the interim two years the rich not only got even richer, but have now surpassed all previous records.

And by implication, America's poor, that 20% on the net worth scale which is far greater than 20% in terms of population and that has only debt to show and no assets, are currently so deep in debt, there is no wonder the US economy is a complete disaster to all but the choice few who comprise the top quntile, and to the paid economists and pundits who make money by cheerleading the "growing" US economy to its final resting place.

But nowhere is the "financialization" of the US economy more evident than in this chart showing the relative net worth ratio of quntile to the next quintile right below it. Quote Census: "The distribution of net worth became more spread out between 2000 and 2011. The ratio of median net worth of the highest quintile to the second quintile increased from 39.8 to 86.8 between 2000 and 2011, and the ratio of the highest quintile to the third quintile increased from 7.7 to 9.2. The ratio of the highest quintile to the fourth quintile was 3.0 in 2000 and showed no statistically significant change over this period." 

The surge took place precisely as the last credit bubble peaked and then burst. "Ironically" the richest did not get nearly as hurt as everyone else.

It is safe to say that the net worth ratio of the top quntile to the second higher is now, 2014, well over 100%. And to thin it was just 40% at the beginning of the century.

Here Census does a curious detour, because in addition to just wealth quntiles it also looks at wealth distribution by race. And while it is no surprise that in absolute terms rich whites are richer than rich blacks or hispanics, with a net worth at the end of 2011 of $754,244, $229,041 and $250,462 respectively...

... the wealth redistribution within the ranks is far greater among blacks than the other two racial cohorts. In fact, while the ratio of the wealthiest 20% of whites increased only modestly, the increase was somewhat greater for the fifth hispanic quintile, and soared for the richest 20% of all blacks.

From the Census: "the ratio of median net worth of non-Hispanic whites to that of blacks rose from 10.6 to 17.5 between 2000 and 2011, and the ratio of non-Hispanic whites to Hispanics also increased from 8.1 to 14.4. "However, when looking at the highest quintile for these groups, we see that blacks experienced higher relative increases in median net worth than non-Hispanic whites and Hispanics," Census Bureau economist Marina Vornovitsky said.

This is a finding that probably won't be mentioned too often by the president in his populist, race-baiting speeches.

Finally, why is any of this important?

Simple: the trends presented here confirm not only why class animosity within American society is at all time highs, they also explain why without the life support of the Fed, the US economy would crumple.

The chart below, which we have shown before, explains why: with the purchasing power of the poor being funneled to the rich couretsy of the Fed, and as a result of ever greater indebtedness which limits how much more debt they can carry, the poor have no choice but to consume less and less. Something which the US economy has demonstrated vividly to all but the 1% who continue to live, oblivious, in its ivory tower.

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30 Facts That Prove The American Middle-Class Is Being Destroyed (ZeroHedge)

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Submitted by Tyler Durden on 08/21/2014 21:26 -0400

The 30 statistics that you are about to read prove beyond a shadow of a doubt that the middle class in America is being systematically destroyed. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a staggering pace.  Yes, the stock market has soared to unprecedented heights this year and there are a few isolated areas of the country that are doing rather well for the moment.  But overall, the long-term trends that are eviscerating the middle class just continue to accelerate. 

Over the past decade or so, the percentage of Americans that are working has gone way down, the quality of our jobs has plummeted dramatically and the wealth of the typical American household has fallen precipitously.  Meanwhile, we have watched median household income decline for five years in a row, we have watched the rate of homeownership in this country decline for eight years in a row and dependence on the government is at an all-time high.  Being a part of the middle class in the United States at this point can be compared to playing a game of musical chairs.  We can all see chairs being removed from the game, and we are all desperate to continue to have a chair every time the music stops playing. The next time the music stops, will it be your chair that gets removed?

And in this economy, you don't even have to lose your job to fall out of the middle class.  Our paychecks are remaining very stable while the cost of almost everything that we spend money on consistently (food, gas, health insurance, etc.) is going up rapidly.  Bloomberg calls this "the no-raises recovery"...

Call it the no-raises recovery: Five years of economic expansion have done almost nothing to boost paychecks for typical American workers while the rich have gotten richer.

Meager improvements since 2009 have barely kept up with a similarly tepid pace of inflation, raising the real value of compensation per hour by only 0.5 percent. That marks the weakest growth since World War II, with increases averaging 9.2 percent at a similar point in past expansions, according to Bureau of Labor Statistics data compiled by Bloomberg.

There are so many families out there that are struggling right now.  So many husbands and wives find themselves constantly fighting with one another about money, and they don't even understand that what is happening to them is the result of long-term economic trends that are the result of decades of incredibly foolish decisions.  Without middle class jobs, we cannot have a middle class.  And those are precisely the jobs that have been destroyed during the Clinton, Bush and Obama years.  Without enough good jobs to go around, we have seen the middle class steadily shrink and the ranks of the poor grow rapidly.

The following are 30 stats to show to anyone that does not believe the middle class is being destroyed...

1. In 2007, the average household in the top 5 percent had 16.5 times as much wealth as the average household overall.  But now the average household in the top 5 percent has 24 times as much wealth as the average household overall.

2. According to a study recently discussed in the New York Times, the "typical American household" is now worth 36 percent less than it was worth a decade ago.

3. One out of every seven Americans rely on food banks at this point.

4. One out of every four military families needs help putting enough food on the table.

5. 79 percent of the people that use food banks purchase "inexpensive, unhealthy food just to have enough to feed their families".

6. One out of every three adults in the United States has an unpaid debt that is "in collections".

7. Only 48 percent of all Americans can immediately come up with $400 in emergency cash without borrowing it or selling something.

8. The price of food continues to rise much faster than the paychecks of most middle class families.  For example, the average price of ground beef has just hit a brand new all-time record high of $3.884 a pound.

9. According to one recent study, 40 percent of all households in the United States are experiencing financial stress right now.

10. The overall homeownership rate has fallen to the lowest level since 1995.

11. The homeownership rate for Americans under the age of 35 is at an all-time low.

12. According to one recent survey, 52 percent of all Americans cannot even afford the house that they are living in right now.

13. The average age of vehicles on America’s roads has hit an all-time high of 11.4 years.

14. Last year, one out of every four auto loans in the United States was made to someone with subprime credit.

15. Amazingly, one out of every six men in their prime working years (25 to 54) do not have a job at this point.

16. One recent study found that 47 percent of unemployed Americans have “completely given up” looking for a job.

17. 36 percent of Americans do not have a single penny saved for retirement.

18. According to one survey, 76 percent of all Americans are living paycheck to paycheck.

19. More than half of all working Americans make less than $30,000 a year in wages.

20. Only four of the twenty fastest growing occupations in America require a Bachelor’s degree or better.

21.  In America today, one out of every ten jobs is filled by a temp agency.

22. Due to a lack of decent jobs, half of all college graduates are still relying on their parents financially when they are two years out of school.

23. Median household income in the United States is about 7 percent lower than it was in the year 2000 after adjusting for inflation.

24. Approximately one out of every four part-time workers in America is living below the poverty line.

25. It is hard to believe, but more than one out of every five children in the United States is living in poverty in 2014.

26. According to one study, there are 49 million Americans that are dealing with food insecurity.

27. Ten years ago, the number of women in the U.S. that had jobs outnumbered the number of women in the U.S. on food stamps by more than a 2 to 1 margin.  But now the number of women in the U.S. on food stamps actually exceeds the number of women that have jobs.

28. If the middle class was actually thriving, we wouldn’t have more than a million public school children that are homeless.

29. If you can believe it, Americans received more than 2 trillion dollars in benefits from the federal government last year alone.

30. In terms of median wealth per adult, the United States is now in just 19th place in the world.

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Wednesday, August 20, 2014

This Is Your Recovery, And This Is Your Recovery Without Drugs (Zerohedge)

 

 

Submitted by Tyler Durden on 08/19/2014 21:01 -0400

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”Thomas Jefferson

Does this chart portray an economic recovery in any way? Wages have been stagnant since the START of the supposed recovery in 2010. Real median household income, even using the highly understated CPI, is on a glide path to oblivion. You just need to observe with your own two eyes the number of Space Available signs in front of office buildings, strip centers and malls across America to realize we have further to fall. Low paying, part-time burger flipping jobs aren’t going to revive this debt saturated economic system. But at least the .1% are enjoying their Federal Reserve created high. Fiat is a powerful drug when administered in large doses to addicts on Wall Street.

The S&P 500 has risen from 666 in March of 2009 to 1,972 today. That is a 196% increase in a little over five years. During this same time, real household income has fallen by 7%. There have been a few million jobs added, while 11 million people have left the labor market. According to Robert Shiller’s CAPE ratio, the stock market valuation has only been higher, three times in history – 1929, 1999, and 2007. He seems flabbergasted by why valuations are so high. Sometimes really smart people can act really dumb.

The Federal Reserve balance sheet was $900 billion before the 2008 financial crisis. Today it stands at $4.4 trillion. The Fed has increased their balance sheet by 220% since the March 2009 market lows. Do you think there is any correlation between the Fed puppets printing $2.4 trillion and handing it to their Wall Street puppeteers, who used their high frequency trading supercomputers and ability to rig the markets so they never lose, and the third stock bubble in the last 13 years? It’s so self evident that only an Ivy League economist or CNBC anchor wouldn’t be able to see it.

sp500fedbal

Let’s look at the amazing stock market recovery without Federal Reserve heroine pumped into the veins of Wall Street banker addicts. If you divide the S&P 500 Index by the size of the Federal reserve balance sheet, you see the true purpose of QE1, QE2, and QE3. It wasn’t to save Main Street. It was to save Wall Street. Without the Federal Reserve funneling fiat to the .1% banking cabal and creating inflation in energy, food, and other basic necessities for the 99.9%, there is no stock market recovery. The recovery has occurred in Manhattan and the Hamptons. It’s been non-existent for the vast majority of people in this country. The wealth effect and trickle down theory have been disproved in spades. The only thing trickling down on the former middle class from the Fed is warm and yellow.

sp500fedbalratio

The entire stock market advance has been created on record low trading volumes and record high levels of monetary manipulation. Even though the Federal Reserve has driven senior citizens further into poverty with 0% interest rates, those with common sense have refused to be lured back into the lion’s den. They have parked record levels of fiat in no interest bank and money market accounts. They are tired of being muppets led to slaughter.

Quantitative easing was supposed to force little old ladies into the stock market and consumers to spend their debased dollars before they lost more value. The spending would revive the dormant economy just as the Keynesian text books promised. It didn’t happen. The peasants haven’t cooperated. Quantitative easing and ZIRP sapped the life from the middle class as their wages have stagnated and their living expenses have skyrocketed. Mission Accomplished by the Fed. Of course, the CNBC bimbos and shills would declare this $10.8 trillion to be money on the sidelines ready to boost the stock market ever higher. I love that storyline. It never grows old.

The MSM, government and Wall Street continue to flog the story about a housing recovery. It’s been nothing but a confidence game based upon the Fed’s easy money and the Wall Street scheme to buy up foreclosed properties with the Fed’s money. The scheme was to artificially boost home prices by restricting home supply through foreclosure manipulation, in order to allow the insolvent Wall Street banks to get out from under their billions in toxic mortgage loans.

Shockingly, the Case Shiller home price index has soared by 25% since 2012 despite first time home buyers being virtually non-existent and mortgage applications plunging to 14 year lows. How could that be? Don’t people need mortgages to buy houses? Isn’t real demand necessary to drive prices higher? Not when Uncle Ben and Madam Yellen are in charge of the printing press. Housing bubble 2.0 has arrived. I wonder if the Federal Reserve balance sheet increase of 50% since 2012 has anything to do with the new housing bubble.

It seems a similar result is obtained when dividing the Case Shiller Index by the size of the Fed’s balance sheet. The real housing market for real people is worse than it was in 2009. The national home price increase has been centered in the usual speculative markets, aided and abetted by the Fed’s easy money, managed by the Wall Street hedge funds, and exacerbated by the late arriving flippers who will be left holding the bag again. The Fed/ Wall Street scheme has priced young people out of the market and has failed to ignite the desired Keynesian impact. Investors/flippers account for 34% of all home sales. Foreigners with no knowledge of value metrics account for 30% of all home sales. The lesson of history is that most people don’t learn the lessons of history. The 2nd housing bubble in seven years is seeking a pin.

If ever you needed proof of the confidence game in its full glory, the chart below from Zero Hedge says it all. Mortgage rates have been falling for the past year, home builders have been reporting soaring confidence about the future, and the National Association of Realtors keeps predicting a surge in home buying any minute now. One small problem. Mortgage applications are in free fall, new home sales are at 1991 levels, and existing home sales are falling. Home prices have peaked and are beginning to roll over. The Wall Street hedgies are all looking to exit stage left. Young people are saddled with over a trillion of government issued student loan debt and millions of older subprime borrowers have been lured into more auto loan debt. Home sales will be stagnant for the next decade.

Quantitative easing will cease come October, unless Yellen and Wall Street can create a new “crisis” to cure with more money printing. By every valuation measure used over the last 100 years, stocks are overvalued by at least 50%. By historical measures, home prices are overvalued by at least 30%. Ten year Treasuries are yielding 2.4%, while true inflation is north of 5%. With real interest rates deep in negative territory, the bond market is even more overvalued than stocks or houses. These simultaneous bubbles have been created by the Federal Reserve in a desperate attempt to keep this debt laden ship afloat. Their solution to a ship listing from too much debt was to load it down with trillions more in debt. The ship is taking on water rapidly.

We had a choice. We could have bitten the bullet in 2008 and accepted the consequences of decades of decadence, frivolity, materialism, delusion and debt accumulation. A steep sharp depression which would have purged the system of debt and punishment of those who created the disaster would have ensued. The masses would have suffered, but the rich and powerful bankers would have suffered the most. Today, the economy would be revived, saving and investing would be generating needed capital for expansion, and banks would be doing what they are supposed to do – lending money to businesses and individuals. Instead, the Wall Street bankers won the battle and continue to pillage and loot the national wealth while impoverishing the masses.

The arrogance, hubris and contempt for morality displayed by the ruling class is breathtaking to behold. They think they are untouchable and impervious to norms followed by the rest of society. They may have won the opening battle, but will lose the war. Discontent among the masses grows by the day. The critical thinking citizens are growing restless and angry. They are beginning to grasp the true enemy. The system has been captured by a few malevolent men. When the stock, bond and housing bubbles all implode simultaneously, all hell will break loose in this country. It will make Ferguson, Missouri look like a walk in the park. I wonder if the occupants of the Eccles building in Washington DC will get out alive.

“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.”Henry Ford

Charts provided by Confounded Interest

Friday, August 15, 2014

8 Reasons Children of the 1970s Should All Be Dead


Feedly.com ^ | 09 June 14 | Yeoman Lowbrow

Posted on ‎8‎/‎15‎/‎2014‎ ‎12‎:‎54‎:‎14‎ ‎PM by Drew68

The way things are going, every kid is going to go to school wearing bubble wrap and a helmet. Back in the 1970s (and earlier), parents didn’t stress about our health and safety as much as they do today. It’s not that they cared less – they just didn’t worry compulsively about it.

Parents of 2014 need to be reminded of how less restricted, less supervised, less obsessively safety-conscious things were… and it was just fine.

1. JARTS: IMPALING ARROWS OF DEATH

Can your mind comprehend a more deadly toy than a weighted spear that kids hurl through the air like a missile? No one ever obeyed the actual manufacturer’s rules, we just flung these damn things everywhere. We threw them. They stuck where they landed. If they happened to land in your skull, well, then you should have moved.

After roughly 6,700 emergency-room visits and the deaths of three children between 1978 and 1988, they finally outlawed Jarts on December 19, 1988. I suppose it needed to be banned, but a part of me is sad that kids today won’t have the battle scars and Jart survival stories we had. Goodbye Jart – you were an impaling arrow of death, but I loved you anyway.

2. LOST AND NOT FOUND: SEAT BELTS

Cars came with seat belts in the 1970s, but no one used them except maybe out of curiosity to see what it was like to wear one. Of course, you’d have to fish them out of the deep crevice of the backseat cushion where they often came to rest, unwanted and ignored.

The only “click” heard in the 1970s automobile was your dad’s Bic lighting up a smoke with the windows rolled up. (cough!)

I should also mention that, not only were there no seat belts, child seats were nowhere to be found. Whether it was the front seat of your mom’s station wagon or her bicycle, chances are, you were entirely untethered.

3. SEMI-LETHAL PLAYGROUNDS OF HOT METAL

Remember when playgrounds were fun? Sure, there was a pretty good chance you’d be scalded by a hot metal slide, or walk away with tetanus, but that’s what memories are made of.

The ground wasn’t coated with soft recycled rubber or sand as most are today – they were asphalt. Remember being hurled from a spinning merry-go-round, then skidding across the gravel at full speed? Good times.

I remember my school playground had a metal ladder “wall” that I swear went up three stories – it didn’t connect to a slide or anything. It was literally a ladder to the sky. I remember fully believing the oxygen was thinner at the top. One false move and I’d have been a flesh colored stain on the asphalt.

According to the New York Times we are making playgrounds so safe that they actually stunt our kids’ development. So, while blood was spilt and concussions were dealt on the playgrounds of the 1970s, we were at least in a developmentally rich environment – and we had the bruises and scabs to prove it.

4. PRECIOUS LITTLE SUN PROTECTION

    “Tanfastic lets the sunshine in. It’s not loaded up with sunburn protection like old folks and kids want. Tanfastic’s for you 15-to-25 year olds who can take the sun. Especially if you want to get superdark. Superfast.”

Back in the 70s, your goal was to get as brown as your skin would permit. Sun BLOCK or sun SCREEN was basically nonexistent. You wanted to AMPLIFY your rays, so women typically lathered on Crisco and baby oil to get that deep baked look.

For the kids, SPF numbers hovered around 2, 4 and 8. The idea that you would spray an SPF of 50 or even 30 wasn’t even an option, except perhaps from medical ointments prescribed for albinos.

5. HELMETS: FOR THOSE WITH MEDICAL CONDITIONS ONLY

Whether you were riding a bike, roller skating, or skateboarding, one thing was for certain: you were not wearing a head protection. You would have been looked at as a sideshow freak by other kids, and parents would assume you had some kind of medical condition.

6. IGNORED AND UNATTENDED ON THE REGULAR

Hey, who’s watching the kid in the stroller? YOU MUST HAVE YOUR EYES ON THE KID AT ALL TIMES OR ELSE HE WILL DIE!

My mother routinely left me alone in the car at a young age while she ran errands. Today, this will literally get you arrested. You see, once upon a time it was okay to leave your kids for long periods without supervision (remember the so-called “latch-key kids” of the 70s?), or let them free roam without constant surveillance. Today, parents won’t let their kids go out to get the mail alone, and any fun with friends has to be scheduled, closely monitored “play dates”.

On summer break or weekends in the 1970s, parents kicked their kids out the front door and didn’t let them back in until the sun went down. “Go play,” were their only words, and you were left to your own devices for hours upon hours. Neighborhoods looked like Lord of the Flies.

7. ROUTINELY ALLOWED TO GET SERIOUSLY HURT

This poor kid is about to get rammed in the nuts by a goat, and the nearby adult isn’t the least bit concerned. In fact, he finds this all incredibly amusing! As hard as this is to believe, but when kids got hurt back then, adults didn’t come running with first-aid kits. More than likely you’d be left alone with your pain, with no alternative but to get over it.

In the 70s, parents watched their offspring fall from trees and fall off bikes with a smile.

8. SECONDHAND SMOKE EVERYWHERE

From airplanes to your family car, it seemed the world of the 70s was shrouded in a haze of cigarette smoke. It wasn’t just the fact that many more people smoked, it was the absolute 100% lack of concern for those that didn’t, including children. Teachers smoked, doctors smoked, your parents smoked…. and they didn’t take it to a secluded smoking area, they did it right in your face.

Please don’t interpret this as condoning it. There’s no question that engulfing your child in a thick carcinogenic cloud isn’t a good idea. I’m just stating facts – this is the world we lived in. It was full of adults who didn’t seem to have anxiety attacks over our safety, and we turned out just fine…. right?

Monday, August 11, 2014

Pfizer, Lipitor, and Diabetes (The Market Ticker Karl Denninger)

 

I find this particular version of lawsuit lottery amusing.

(Reuters) - Pharmaceutical giant Pfizer is facing a mounting wave of lawsuits by women who allege that the company knew about possible serious side effects of its blockbuster anti-cholesterol drug Lipitor but never properly warned the public.

In the past five months, a Reuters review of federal court filings shows, lawsuits by U.S. women who say that taking Lipitor gave them type-2 diabetes have shot up from 56 to almost 1,000.

Yes, blockbuster.  As in blockbuster profits.

There's a basic problem with the premise though: The lipid hypothesis, which is the predicate upon which all "cholesterol modification" therapies, including these drugs, rest is at best questionable and is likely nothing more than quackery.

The hypothesis arose from a single researcher named Ancel Keys; he published a claimed "Seven Countries Study" that allegedly showed that cardiovascular disease was caused by high serum (that is, blood) cholesterol levels and that was caused by eating a high-fat diet.

Keys, it is now known, preferentially selected data that showed what he wanted to show up front and ignored everything else.  Worse, there was no primary research either before his "study" nor was any conducted to validate his claims after it was published.

Indeed, when the full data set (not just his "seven") is re-analyzed -- all data that Keys had access to and intentionally ignored -- the correlation he claimed disappears.

In the interim, however, you've been told to eat less (or no!) saturated (animal) fats and eat lots of plant-based fats ("polyunsaturated".)  Since there are only three forms of food -- carbohydrate, protein and fat, if you eat less fat you must eat more of either protein or carbohydrate.  Very large amounts of protein are both extremely expensive and known to be tough on the kidneys, so the shift was obvious -- toward carbohydrates.  The agricultural lobby pressed for and furthered this and then added on to it extremely cheap sweeteners such as high-fructose corn syrup.  You see, when you remove fat from food it tends to taste like cardboard, so sugar in its various forms was substituted.

The government published its guidelines and your doctor chided and cajoled you to eat this way.  Advertising claiming that this or that was part of a good breakfast (and similar) has promoted this "lifestyle."

What did you get for it?  Diabetes and obesity, to name two undesirable things.

You also got a monstrous industry selling you pills to "lower" your cholesterol and guys and dolls in white coats steering you toward being both fat and dead while at the same time believing you're lying to them when in fact you're doing exactly what they told you to do when it comes to what you eat.

Companies like Pfizer love conditions like "high cholesterol" because they never go away.  You wind up on a statin and you'll be taking it for life, if you believe your doctor and the big pharma interests.  Nobody asks how in the hell anyone managed to survive before these drugs existed, or why they suddenly are necessary where they weren't before.

Rather than change what you eat you pop a pill.  But that doesn't change the obesity problem (at all) and while it might lower your cholesterol if that's not actually causing disease why in the hell would you want to do that?  Other than fattening the wallet of a pharmaceutical company, that is.  Remember that there is no such thing as a drug without side effects -- that is, risk.

So what risk did you take and for what improvement?  If the improvement is nil then any amount of risk is unwarranted and inappropriate since there is nothing to be gained!

1 in 10 Americans (approximately) are on Lipitor.  Do you actually believe that 1 in 10 people needs a permanent, life-long treatment that has racked up $130 billion in sales globally over the last 20 or so years? 

Again, how in the hell did we survive the previous thousands of years without it, if that's so?

Yes, I know that Pfizer claims that the "overwhelming consensus" in the medical community is that statins have benefits.  But there has been 50 years of overwhelming consensus about the lipid hypothesis in general and yet we now factually know both that it came about due to cherry-picking data and when re-evaluated using the full data set the claimed correlations disappeared.

In other words we know the overwhelming consensus upon which the entire paradigm of "lipid avoidance" has been based is factually wrong.

I don't know if Lipitor causes diabetes.  But what I do know by the manifest weight of the evidence is that being obese has a high correlation with development of the disease, and that the epidemic of obesity is well-correlated with the "medical advice" to avoid fats in one's diet and load up on the carbs.

I can also tell you from personal experience that ignoring that advice, eschewing carbohydrates and eating a high-fat, moderate protein and low-carb diet dropped 60 lbs off my body, and since I was at the same time tracking my caloric consumption due to exercise (by wearing a GPS-enabled watch and heart-rate strap while working out) I could only account for 20 of those pounds in the number of calories that I burned.  The other 40 therefore had to have come off as a direct and proximate result of changing what I put down my pie hole.  And no, you don't have to eat carbs to be able to perform athletically either.  I do just fine running 5ks and biking for ****s and grins without any carbohydrate input.

Further and at least as important, it is now 2014 and I began this program in the spring of 2011.  The weight loss was complete by the end of that year and it tapered off all on its own without any attempt to do so as my body, most-notably my belly, approached a "normal" appearance.  I was told repeatedly during that time that while I might lose weight eating low carb it would all come back and probably with interest besides.

Well, it's now coming up on three years hence and I still weigh between 150-155, depending on exactly when I step on the scale.  I do not count calories, I have maintained the change in what (not how much) I eat, and my weight has been stable the entire time despite wide variations in my workout schedule (go figure; I don't really enjoy doing long, strenuous runs in 95 degree heat with 100% RH readings nor do I like it when it's freezing-ass cold out either.)  Further, my glucose response and blood pressure are both normal and I can see my dick in the shower when standing straight up -- without having to suck in my gut.

I take no prescription medications of any sort and I've more than a half-century of years under my belt.

The plural of anecdote is not data, but my read of the literature strongly suggests that the entire statin industry was manufactured out of whole cloth predicated on what is now known to be a discredited hypothesis.

That, standing alone, ought to be enough for liability to attach when hundreds of billions of dollars have been siphoned off through what is now known to have been intentionally-doctored results -- that is, utter and complete bull****.

Friday, July 18, 2014

Guest Post: How To Find Shelter From The Coming Storms? (Zerohedge.com)

 

Submitted by Tyler Durden on 07/01/2014 09:52 -0400

Submitted by Charles Hugh Smith from Of Two Minds

A Reader Asks: How to Find Shelter from the Coming Storms?

Some basic suggestions for those who are seeking shelter from the coming storms of global financial crisis and recession.

Reader Andy recently wrote: "I look forward to your blog each day but am still waiting for your ideas for surviving the coming crisis." Andy reports that he and his wife have small government and private pensions, are debt-free and have simplified their lifestyle to survive the eventual depreciation of their pensions. They currently split their time between a low-cost site in North America and Mexico. They are considering moving with the goal of establishing roots in a small community of life-minded people.

Though I have covered my own ideas in detail in my various books (Survival+: Structuring Prosperity for Yourself and the Nation, An Unconventional Guide to Investing in Troubled Times, Why Things Are Falling Apart and What We Can Do About It and Get a Job, Build a Real Career and Defy a Bewildering Economy, I am happy to toss a few basic strategies into the ring for your consideration.

Let's start by applauding Andy for getting so much right.

1. Don't count on pensions maintaining their current purchasing power as the promises issued in previous eras are not sustainable going forward. I've addressed the reasons for this ad nauseam, but we can summarize the whole mess in four basic points:

A. Demographics. Two workers cannot support one retiree's pensions and healthcare costs (skyrocketing everywhere as costly treatments expand along with the cohort of Baby Boomer retirees). The U.S. is already at a ratio of two full-time workers to one retiree, and this is during a "recovery." the ratio in some European nations is heading toward 1.5-to-1 and the next global financial meltdown hasn't even begun.

B. The exhaustion of the debt-based consumption model. The only way you can sustain a debt-based model of ever-expanding consumption is to drop interest rates to zero. But alas, lenders go broke at 0%, so either the system implodes as debtors default or lenders go bankrupt. Take your pick, the end-game of financial crisis and collapse is the same in either case.

C. Printing money out of thin air does not increase wealth, it only increases claims on existing wealth. An honest government will eventually default on its unsustainable promises; a dishonest government (the default setting everywhere) will print money to fund the promises until its currency loses purchasing power as a result of either inflation or some other flavor of currency crisis.

In other words, the dishonest government will still issue pension checks for $2,000 a month but a cup of coffee will cost $500--if anyone will take the currency at all.

D. Pensions funds are assuming absurdly unrealistic returns on their investments. Many large public pension plans are assuming long-term yields of 7.5% even as the yield on "safe" government bonds has declined to 3% or 4%. As a result, the pension fund managers have taken on staggering amounts of systemic risk as they reach for higher yields.

When the whole rotten house of cards (shadow banking, subprime everything, etc.) collapses in a stinking heap, the yields will be negative. As John Hussman has noted, asset bubbles simply bring forward all the returns from future years. Once the bubble pops, yields are substandard/negative for years or even decades.

Pension funds that earn negative yields for a few years will soon burn through their remaining capital paying out unrealistic pensions.

2. Lowering the cost of one's lifestyle. It's much easier to cut expenses than it is to earn more money or squeeze more yield out of capital.

3. Establishing roots in a community of like-minded people. Though it's rarely mentioned in a culture obsessed with financial security, day-to-day security is based more on community than on central-state-issued cash--though this is often lost on those who have surrendered all sense of community in their dependency on the state.

The core of community is reciprocity: before you take, you first have to give or share. Free-riders are soon identified and shunned.

My suggestions are derived from this week's entries on the inevitable popping of credit bubbles, the unenviable role of tax donkeys in funding corrupt state Castes and the Great Game of Elites acquiring essential resources with unlimited credit issued by central banks, leaving the 99% debt-serfs and/or tax donkeys with neither the income nor the credit to compete with Elites for real resources.

4. Lessen your dependence on anything that requires debt and assets bubbles for its survival. Whatever depends on expanding debt and asset bubbles for its survival will go away when credit/asset bubbles pop, which they always do, despite adamant claims that "this time it's different." It never is.

5. Control as many real resources as you can. These include water rights, energy-producing or conserving assets (solar arrays, geothermal heating/cooling systems, etc.), farmland, orchards and gardens, rental housing, and tools that you know how to use to make/repair essential assets such as transport, housing, equipment, etc.

6. It's easier to conserve/not use something than it is to acquire it or pay for it. As resources rise in price, those who consume little will be far less impacted than those whose lifestyles requires massive consumption of gasoline, heating oil, electricity, water, etc. It's as simple as this: don't waste food, or anything else.

7. The easiest way to conserve energy and time is to live close to your work and to essential services/transport hubs. Those who reside in liveable city neighborhoods and towns with public transport and multiple modes of transport who can walk/bike to work, farmers markets, cafes, etc. will need far less fossil fuel than those commuting to everything via vehicle.

8. If you can't find work/establish a livelihood, move to a locale with a better infrastructure of opportunity. I explain this in Get a Job, Build a Real Career and Defy a Bewildering Economy, but John Kenneth Galbraith made much the same point in his 1979 book The Nature of Mass Poverty.

9. If you buy property, do so in a state with Prop 13-type limits on property tax increases. We have no choice about being tax donkeys, but choose a state where income and consumption (i.e. sales tax) are taxed rather than property tax. You can choose to earn less and buy less, but you can't choose not to pay rising property taxes.

10. Be useful to others. That way, they'll want you around and will welcome your presence. There are unlimited ways to be helpful/useful.

11. Trust the network, not the state or corporation. Centralized systems such as the government and global corporations are either bankrupt and don't yet know it or are bankrupt and are well aware of it but loathe to let the rest of the world catch on.

12. Be trustworthy. Don't be morally corrupt or work for corrupt/self-serving institutions. Many initially idealistic people think they can retain their integrity while working for morally bankrupt, self-serving bureaucracies, agencies and corporations; they are all eventually brought down to the level of the institution.

Lagniappe suggestion: lead by example. "Setting an example is not the main means of influencing others; it is the only means." Albert Einstein

Average:

4.688525

Tuesday, July 8, 2014

You feel poorer because you are poorer. (Zerohedge.com)

 

In the last fourteen years, has your income increased over 50%? If you think it has, has it done so after taxes? Even if it has, you likely have not kept up in terms of inflation.

If you are a retiree, living on fixed income, a pension or bonds, you certainly have become poorer. If you had bought the Dow-Jones on 12/31/1999 you would have entered at about 11,500. It closed last week at less than 17,100. That would have been an appreciation of 6,600, better than 50%. But, of course, that was before taxes.

As a retiree, you have seen your purchasing power stolen by Fed policies. Whether you invested in fixed income or equities, you lost ground. Anyone in that position has seen their lives become poorer despite a lifetime of successful work and careful financial planning.

For those still working, most are losing purchasing power each year. Wages are not keeping up with inflation, even the understated numbers reported by government. In short, the decline of a once-great economic power is well underway. The country is no longer growing enough to raise everyone’s standard of living.

Government has killed the golden goose and in an attempt to hide the obvious is debauching the dollars. Government tries to hide their own failure with phony statistics and a welfare state designed to placate the masses. Bread and circuses are deceptions not progress.

This charade will not work! It is merely a futile attempt to prolong the Ponzi scheme for a little longer. While the process continues, the parasites who plunder the productive ready expand in numbers. The productive either give up or remove their capital from the country. Those who stay build compounds with the walls around them to protect against the   soon-to-become enraged masses. Bread and circuses precede poverty. They don’t continue through it.

To understand the loss of purchasing power, look at this series of items:

costoflivingxpenses-7-1-14

H/T Zerohedge

The last two items are what government claims is price inflation over this period. Wikipedia defines them as follows:

The personal consumption expenditure (PCE) measure is the component statistic for consumption in GDP collected by the BEA. It consists of the actual and imputed expenditures of households and includes data pertaining to durable and non-durable goods andservices. It is essentially a measure of goods and services targeted towards individuals and consumed by individuals.[1]

The PCE price index (PCEPI), also referred to as the PCE deflator, PCE price deflator, or the Implicit Price Deflator for Personal Consumption Expenditures (IPD for PCE) by the BEA, and as the Chain-type Price Index for Personal Consumption Expenditures (CTPIPCE) by the FOMC, is a United States-wide indicator of the average increase in prices for all domestic personal consumption. It is currently benchmarked to a base of 2009 = 100. Using a variety of data including U.S. Consumer Price Index and Producer Price Index prices, it is derived from the largest component of the Gross Domestic Product in the BEA’s National Income and Product Accounts, personal consumption expenditures.

The less volatile measure of the PCE price index is the core PCE (CPCE) price index which excludes the more volatile and seasonal food and energy prices.

In comparison to the headline United States Consumer Price Index, which uses one set of expenditure weights for several years, this index uses a Fisher Price Index, which uses expenditure data from both the current period and the preceding period. Also, the PCEPI uses a chained index which compares one quarter’s price to the last quarter’s instead of choosing a fixed base. This price index method assumes that the consumer has made allowances for changes in relative prices. That is to say, they have substituted from goods whose prices are rising to goods whose prices are stable or falling.

The last one, the PCE Deflator is used in government’s calculation of real GDP growth. To the extent that this number is understated, reported real GDP is overstated by an approximate amount. That is not an accident.

Average:

4.77778

Monday, July 7, 2014

Arithmetic: How Badly You Have Been Screwed ( http://market-ticker.org/ )

 

Folks, I know people have this desire to moan about how bad this part of our country is or that, whether it be on guns, poverty, religion or whatever else pushes your buttons.

I challenge you to read and let this post sink in for a good hour today.  Do nothing else.  Find the hour, print this out or send it by email to your cellphone, read it and contemplate it.

Then choose, today and forward, whether you're going to sit for what has been done to you.

I present a simple arithmetic chart:

The data was pulled from here: http://www.bls.gov/data/#productivity

It is not my data.  It is official government data.  I did nothing other than pull it into Excel and chart it as a compound function.

Now let me explain what it shows you.

This chart shows the output per hour worked for Americans across the labor force.

It shows that today one hour of work at the end of 2013 produces 169.8% of the output that one hour of work produced in 1980.

Now stop and read that last sentence again -- very, very slowly.

Read it as many times as you have to until you understand it.

You should have 170% of the standard of living you obtained in 1980 from one hour of labor.

Let me ask: Do you?

If you did, what would you be complaining about?  The average middle-class person that could afford a house in 1980 could afford a house 70% better (not more expensive, better -- larger, with more appliances, that uses less energy, etc.)  You could buy 70% more food with an hour of labor today than you could in 1980.

Equally to the point -- note that there was no decrease in productivity at any time from 2007 to today.  In other words, what "great recession"?  You ought to be ~10% ahead of where you were in 2007.  What would there be to complain about, were this the case?

I could flip pizzas and pay for college in 1980.  I should be able to flip those same pizzas, pay for college in cash and have another 70% of the tuition, fees, books, room and board left over to buy other things. Can you?  NO, YOU CANNOT.

Look at the world in 1980 and a typical skilled and unskilled job.  Is the typical worker able to buy, with cash, 70% more than they were in 1980?  Did the typical lower-income worker need food stamps, EITC, Medicaid, etc?  Did that typical worker need a five, six, seven or ten year car loan, or was a car loan (if there was a loan at all!) for two, three or four years?

Or did they just write the check -- for a new or used car?

How come I could buy "no fault" insurance for a couple hundred dollars a year back then -- as a young driver?  Can you do that today or will the gecko bend your ass over the table for five or ten times as much?

How did that massive amount of improvement in your standard of living -- that was yours, not someone else's -- get stolen from you?

I've spent seven years explaining how it happened and why it continues. 

It does not matter how many dollars you have or are paid.  What matters is how much time you must spend working to earn a gallon of gasoline, rent, electricity or water for a month, food to feed your family and so on.  That is, what matters is how much what you have and earn buys in material goods and services.

Your purchasing power isn't stolen through "inflation" per-se.  If you are paid $20 tomorrow for an hour of work instead of $10 but the price of everything doubles you can say "inflation" was 100% (as expressed in prices) but it doesn't matter because you get paid twice as many dollars.  (Of course it matters a great deal if you saved those dollars from previous work, which is why inflation is bad and deflation is good -- but we're talking about the "Average Joe" that saves nothing.)

In short only purchasing power matters as measured by a monetary invariant -- such as an hour of work or a BTU of energy.

How much longer can this crap continue?  Are you a servant to the government today, dependent on those handouts?  Will you be tomorrow?  Do you think you can outrun this with your wits when a theft of nearly half of what should be yours in improved standard of living has already happened over the last 35 years?

Note that this improvement should happen for everyone.  A person who is dirt poor and has their standard of living improve by 70% is now probably lower middle class and self-sufficient!  Yes, the rich have even more.  So what -- so do you!

The schemes and scams concocted through monopoly games (such as in the health care and education fields) along with the continual deficit spending that destroys purchasing power is why you have not seen that 70% improvement.  It was stolen from you via the deliberate acts of our Government, including both political parties via deficit spending and permitting private banks to create ever more "dollars" via unbacked credit -- acts that are factual frauds.

Period.

The "wedge issues" that are often raised, whether they be "gay marriage", "pot smoking", "gun rights" or whatever else are a damned sideshow.  Do you really care about "gay marriage" if you are so damned poor you're living under a freeway overpass in a refrigerator box, gay or straight?  Do you really care about gun rights if you can't afford a gun no matter how little they cost because your income is insufficient to pay for food, water and a place to take a crap?

Go back and read that big, bold sentence up above again.

Read it however many times you need to until you get it.

Then decide.

Either you fix that and demand that the government enforce the law, returning to you what has been stolen, or sit down and shut up, because so long as you do not do that all of the other complaints you have are utterly immaterial to the outcome of your life and that of your children and grandchildren.