Last year (2019), before there was any news of "COVID-19" some large real estate funds in the UK has to stop withdraws. Most of this was continued spillover going back to Britain's Exit from the EU which has been a slow train wreck for the commercial property market now for years. These halts on withdraws started a conversation about the elephant in the room: ETF's in the US that hold long dated corporate debt of all kinds yet advertise themselves as "liquid". Well so much for that. Not only is advertising "liquid" totally misleading and should be illegal outright. Many found out that in reality these products should not be in existence at all. Yet they are and now the Fed is endorsing these misleading funds that should be banned.
ETF products are as the acronym states: Exchange Traded Funds. Now, why on earth would the SEC have ever allowed, especially after the lessons learned during the last financial crises in the Money Market Industry (where those idiots managing money market accounts were buying long dated securities that became illiquid during the "crises") ETF's that hold long dated securities to advertise themselves as "liquid"? The Money Markets had to be bailed out even though the Money Market Industry was SPECIFICALLY NOT INSURED and was clearly stated as so. But then WTF? Every Tom, Dick and Harry back then could get a quick banking license so they could put the US Taxpayer and the Fed on the hook for their survival... I could go on about that BS but you all know that history.
Here today we have an entire "industry" run by the largest "grey" banking organizations in the US, uninsured, speculating, monoliths. They are uninsured custodians to Trillions of Dollars. They create ETF products, many of which "invest" or buy long dated debt with short term money given tho them by "investors" who want access to markets they have no business being into in the first place. These criminals, I mean grey monoliths, claim (and pay lots of money to PR organizations that promote them) to show, they "provide liquidity" to an industry that previously was not traded on exchanges at all. Yea, well when the market is expanding / rising and money is flowing in they rake in huge profits and grow their ETF's exponentially. Then when people want to "sell" these supposedly "liquid" Funds during a market correction, they cry "liquidity crises" and run to the Fed. WTF? And the Fed has been all to accommodating for OVER 10 YEARS NOW to these idiots. The Fed IS the entire credit market now. I don't give a damn if they are buying fractions or just a billion here and there, it adds up to tens of billions of "created" dollars chasing otherwise illiquid "assets" where the money simply flows to the only "liquid" place left in the ENTIRE UNIVERSE of our supposedly capitalistic "markets", the stock market. Buying ETF products by the Fed is a crime against the American People, Period. They are buying these "products" with money given them by the Criminal Assh)L@ running the Treasury right now and the dweebs who shut down the country and created the bill that allocated the money in the first place. But that is another topic of discussion.
How these ETF products can continue to perpetuate in the market is beyond belief. They should be frozen to new investors and be wound down immediately then closed and no "fund" or "money market" or any other "product" should every be allowed to exist that advertises itself as liquid when everybody in the damn universe knows this is not the case. In addition, the Fed needs to stop buying indiscriminately any and all credit products in the name of "providing liquidity" again! The Market is a Market and "liquidity" has been stressed for some time now DUE TO THE FED's distorting crises based policies that have continued for over 10 years that CREATED an environment that so encouraged leverage that without a complete and total "reset" of the entire financial system, we are in serious trouble of the likes that humanity has never seen.
Thursday, May 28, 2020
Thursday, May 14, 2020
Incompetent FTC
The FTC in the United States has been completely incompetent for several decades now and just like any Ponzi or plunder scheme, it takes a crises to expose it. I have been railing for years how outdated the FTC is. How their use of economic theory that is at least a century old / outdated should have been trashed a very long time ago. Their decisions over the years to allow the US economy to become pretty much an oligarchy have been the most instrumental in American history and at this point.
I have been hearing for weeks about the lack of basic supplies, really basic supplies, to the health care industry. I have heard NOTHING about why these supplies are in short supply. I have read about how some of the shortages have been made up on a small scale but NOBODY is asking, "Hey, why or how did every major industry end up having so few suppliers?"
There is no way I am going to cover this topic in depth here. It is dissertation material. However any idiot (who does not work for the FTC obviously) that has been alive at least 50 years has seen this process unfold even if they can't "see" the supply chains and producers disappear as obviously, they have seen it in their interaction with the world every day on at least the retail front.
While the FTC has been applying way out dated "rules" to every merger let's just look at a basic example, DIY or Home Improvement sector. Mind you, what I say here goes for every industry the consumer touches and every supply chain, wholesale channel, manufacturing etc. When top end, ie; retail, mergers happen a great deal of repercussions happen down stream. These repercussions have been completely overlooked and utterly missed even though the same dynamics happen over and over again. The mergers create immediate oversight of suppliers. The desire for "economies of scale" mean the merged retailer looks at it's supply chain and tries to reduce costs, first by pitting suppliers against each other then eventually by offering monopoly positioning of the winner's products on their shelves.
What happens in this scenario? If you make locks and have served say a tri-state area or some regional area for decades it is likely your existence is due to the consolidation of even smaller producers in the generations before you, before your product was mass produced in your factory. Now you have a "market" that has served the retailers in your market, hardware stores, home improvement stores and the like. After a retail merger your company gets a call asking you to compete for continued access to the stores you previously served (along with other suppliers / competitors who operated in your market as well). The demands for cost reductions are pretty steep. In order to be able to meet these demands you are going to need to increase output; get your cost of production down. To do this quickly you call your competitors, who are getting the same demands from the retailer. A merger is created and new investment to increase production / reduce costs between the suppliers. This also creates another down stream effect on the providers of inputs to these manufacturers and down whatever chain exists in the making of your product. For a while you win continued shelf space.
Meanwhile, the newly merged retailer is trading on the message of more variety, lower prices etc. to their customers and touting this great benefit to the idiot regulators who look at the market from a national perspective and sign off due to their outdated useless academic "models". What happens over time? Simple answer, desire for increased profits creates additional pressure on suppliers. Retailer decides to shrink the number of suppliers over time going through additional rounds of requests for lower cost product. Suppliers are forced to merge again, consolidate production more. This further drives out the down-line supply chain.
Next, additional retail mergers and buyouts. Those DIY retailers that serve regional markets start to merge. Private Equity firms step in and demand mergers or selling out to new "national" players in an ever drive to increase profits and squeeze out competitors. FTC sits back and watches this slow train wreck. Consumers see fewer choices on the store shelves. Slowly the lower priced competitive products begin to disappear, being replaced by the mega suppliers who by now have merged, bought out competitors and managed to restructure to supply the entire nation from a much smaller supply chain.
Most manufacturing has been off shored by the surviving companies as the retailers go to them and say "hey, some factory in China can get me this product for $.05 cheaper". Now this small margin would not mean so much in the past but now we are talking about thousands of locations where a nickle means millions of dollars when selling an item on a national scale. Of course the final step is straight out monopoly shelf space where the retailer goes to bed with the suppliers to guarantee a designated profit on every item sold.
Monopoly shelf space, guaranteed profits, where to go next? Increase prices, lower quality to squeeze more profit out of each unit of sale and most importantly, now you have monopoly suppliers with a "predictable" demand selling to oligopoly retailers all production is coming from one or two factories somewhere on the planet, ordered months or years in advance, sold into a radically shrunk supply chain, while engineers spend all of their research dollars figuring out how to cut costs and effectively dumb down products to increase margins.
I could go on, like explaining how these dynamics also mean sales forces look to the developing world to decimate any and all local production by flooding markets with their cheap mass produced products made in sweatshops by workers under some authoritarian regime as the markets in the developed world stagnates along with the population. But I will stop here.
Now apply the above dynamic to everything the consumer touches... Remember 2009 when the infrastructure spending bill resulted in shortages of seemingly simple products like the paint to put lines on roads? Well now we are seeing how fragile this new dynamic is. We (the FTC allowed) the total decimation of manufacturing, driven by the consolidation of retail, producers, suppliers etc. and we now have the resulting repercussions. With now a full 70% of the US economy driven by consumer expenditure it does not take a genius to see how the incompetence of the FTC in allowing the rapid consolidation of every sector of the economy has created a recipe for disaster not only for the future of our nation's well being as a producer of goods, but now as a consumer of goods as these dramatically reduced supply chains have exposed the food supply in the same way.
Where are the MSM "reporters" or "anchors" that are asking "why are there only 2 companies in the country producing XYX?" "Why are there 3 or 5 companies supplying 80% or more of our food on any given level, from retail, to production to distribution?" Where are we as a nation when everything has been relegated to oligarchy? I don't see the questions being asked. Why, the oligarchy pays the MSM. They would not challenge them. Nor would the incompetent government agents we have "elected" or those heading up the government agencies that have overseen this progress for half a century as they round trip from government to industry in just about every category of "regulation" the government has.
So now the "government" has to step in and procure basic supplies and force other companies to produce products because there are mass shortages of necessary supplies of, well, just about everything needed to meet the needs of the medical community. Why don't we just ask the FTC?
I have been hearing for weeks about the lack of basic supplies, really basic supplies, to the health care industry. I have heard NOTHING about why these supplies are in short supply. I have read about how some of the shortages have been made up on a small scale but NOBODY is asking, "Hey, why or how did every major industry end up having so few suppliers?"
There is no way I am going to cover this topic in depth here. It is dissertation material. However any idiot (who does not work for the FTC obviously) that has been alive at least 50 years has seen this process unfold even if they can't "see" the supply chains and producers disappear as obviously, they have seen it in their interaction with the world every day on at least the retail front.
While the FTC has been applying way out dated "rules" to every merger let's just look at a basic example, DIY or Home Improvement sector. Mind you, what I say here goes for every industry the consumer touches and every supply chain, wholesale channel, manufacturing etc. When top end, ie; retail, mergers happen a great deal of repercussions happen down stream. These repercussions have been completely overlooked and utterly missed even though the same dynamics happen over and over again. The mergers create immediate oversight of suppliers. The desire for "economies of scale" mean the merged retailer looks at it's supply chain and tries to reduce costs, first by pitting suppliers against each other then eventually by offering monopoly positioning of the winner's products on their shelves.
What happens in this scenario? If you make locks and have served say a tri-state area or some regional area for decades it is likely your existence is due to the consolidation of even smaller producers in the generations before you, before your product was mass produced in your factory. Now you have a "market" that has served the retailers in your market, hardware stores, home improvement stores and the like. After a retail merger your company gets a call asking you to compete for continued access to the stores you previously served (along with other suppliers / competitors who operated in your market as well). The demands for cost reductions are pretty steep. In order to be able to meet these demands you are going to need to increase output; get your cost of production down. To do this quickly you call your competitors, who are getting the same demands from the retailer. A merger is created and new investment to increase production / reduce costs between the suppliers. This also creates another down stream effect on the providers of inputs to these manufacturers and down whatever chain exists in the making of your product. For a while you win continued shelf space.
Meanwhile, the newly merged retailer is trading on the message of more variety, lower prices etc. to their customers and touting this great benefit to the idiot regulators who look at the market from a national perspective and sign off due to their outdated useless academic "models". What happens over time? Simple answer, desire for increased profits creates additional pressure on suppliers. Retailer decides to shrink the number of suppliers over time going through additional rounds of requests for lower cost product. Suppliers are forced to merge again, consolidate production more. This further drives out the down-line supply chain.
Next, additional retail mergers and buyouts. Those DIY retailers that serve regional markets start to merge. Private Equity firms step in and demand mergers or selling out to new "national" players in an ever drive to increase profits and squeeze out competitors. FTC sits back and watches this slow train wreck. Consumers see fewer choices on the store shelves. Slowly the lower priced competitive products begin to disappear, being replaced by the mega suppliers who by now have merged, bought out competitors and managed to restructure to supply the entire nation from a much smaller supply chain.
Most manufacturing has been off shored by the surviving companies as the retailers go to them and say "hey, some factory in China can get me this product for $.05 cheaper". Now this small margin would not mean so much in the past but now we are talking about thousands of locations where a nickle means millions of dollars when selling an item on a national scale. Of course the final step is straight out monopoly shelf space where the retailer goes to bed with the suppliers to guarantee a designated profit on every item sold.
Monopoly shelf space, guaranteed profits, where to go next? Increase prices, lower quality to squeeze more profit out of each unit of sale and most importantly, now you have monopoly suppliers with a "predictable" demand selling to oligopoly retailers all production is coming from one or two factories somewhere on the planet, ordered months or years in advance, sold into a radically shrunk supply chain, while engineers spend all of their research dollars figuring out how to cut costs and effectively dumb down products to increase margins.
I could go on, like explaining how these dynamics also mean sales forces look to the developing world to decimate any and all local production by flooding markets with their cheap mass produced products made in sweatshops by workers under some authoritarian regime as the markets in the developed world stagnates along with the population. But I will stop here.
Now apply the above dynamic to everything the consumer touches... Remember 2009 when the infrastructure spending bill resulted in shortages of seemingly simple products like the paint to put lines on roads? Well now we are seeing how fragile this new dynamic is. We (the FTC allowed) the total decimation of manufacturing, driven by the consolidation of retail, producers, suppliers etc. and we now have the resulting repercussions. With now a full 70% of the US economy driven by consumer expenditure it does not take a genius to see how the incompetence of the FTC in allowing the rapid consolidation of every sector of the economy has created a recipe for disaster not only for the future of our nation's well being as a producer of goods, but now as a consumer of goods as these dramatically reduced supply chains have exposed the food supply in the same way.
Where are the MSM "reporters" or "anchors" that are asking "why are there only 2 companies in the country producing XYX?" "Why are there 3 or 5 companies supplying 80% or more of our food on any given level, from retail, to production to distribution?" Where are we as a nation when everything has been relegated to oligarchy? I don't see the questions being asked. Why, the oligarchy pays the MSM. They would not challenge them. Nor would the incompetent government agents we have "elected" or those heading up the government agencies that have overseen this progress for half a century as they round trip from government to industry in just about every category of "regulation" the government has.
So now the "government" has to step in and procure basic supplies and force other companies to produce products because there are mass shortages of necessary supplies of, well, just about everything needed to meet the needs of the medical community. Why don't we just ask the FTC?
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