Trade Data Suggest Another Global Downturn Is On the Cards

Given the historical relationship between cross-border trade and global economic activity, today's report from the Netherlands Bureau for Economic Policy Analysis that world trade volumes fell for a third straight month and are within a hair's breadth of turning negative on a year-over-year basis suggests that another global downturn is on the cards.

FYI, that was just one of many topics I discussed this week at my members-only website, Panzner Insights.

If you are interested in reading and hearing more unique updates on markets, economics, and geopolitics, you might want to consider joining those who've already signed up.

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[Who controls the trade?]

Social Classes in 1984
The Theory and Practice of Oligarchical Collectivism
by Emmanuel Goldstein (George Orwell)

"...if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupefied by poverty would learn to think for themselves, become politically conscious and so depose the ruling oligarchy; therefore, in the long run, a hierarchical society is only possible on a basis of poverty and ignorance.

Point Zero of Systemic Collapse
By Chris Hedges

"...We stand on the cusp of one of the bleakest periods in human history when the bright lights of a civilization blink out and we will descend for decades, if not centuries, into barbarity.

The elites have successfully convinced us that we no longer have the capacity to understand the revealed truths presented before us or to fight back against the chaos caused by economic and environmental catastrophe. As long as the mass of bewildered and frightened people, fed images that permit them to perpetually hallucinate, exist in this state of barbarism, they may periodically strike out with a blind fury against increased state repression, widespread poverty and food shortages.

But they will lack the ability and self-confidence to challenge in big and small ways the structures of control. The fantasy of widespread popular revolts and mass movements breaking the hegemony of the corporate state is just that – a fantasy."

http://jessescrossroadscafe.blogspot.com/2012/10/gold-daily-and-silver-weekly-charts_26.html

[Tackle Banking Reform]

Neil Barofsky on the Need to Tackle Banking Reform

October 26, 2012
Between President Obama’s ineffectual proposals and Mitt Romney’s loving embrace, bankers have little to fear from either administration, and that leaves the rest of America on perilously thin economic ice. Neil Barofsky, who held the thankless job of special inspector general in charge of policing TARP, the bailout’s Troubled Asset Relief Program, joins Bill to discuss the critical yet unmet need to tackle banking reform and avoid another financial meltdown.

http://billmoyers.com/segment/neil-barofsky-on-the-need-to-tackle-banking-reform/

[Reform this]

Charles Ferguson: Standing Behind Every Great Con Artist is Someone Like Glenn Hubbard

I interviewed Hubbard for my documentary film Inside Job, and analyzed his record again for my book Predator Nation. The film interview became famous because Hubbard blew his cool after I interrogated him about his conflicts of interest: "This isn't a deposition, sir. I was polite enough to give you time, foolishly I now see, but you have three more minutes. Give it your best shot." But the really important thing about Hubbard isn't his personality; it's that as an economist and an advisor, he is a total, unmitigated disaster.
First, Hubbard has an abysmal track record in economic policy, including the very issues that Romney has made the pillar of his presidential campaign. Second, like Romney, Hubbard refuses to disclose critical information about his income, conflicts of interest, and paid advocacy activities. Third, both in public statements and in my personal experience, Hubbard has been evasive, misleading, and even dishonest when discussing both policy issues and his own conflicts of interest. And last but not least, those conflicts of interest are huge: Hubbard has long advocated policies that Wall Street loves, often without disclosing that he is, in fact, highly paid by Wall Street.
But we're not done yet. There is a more that Hubbard still hasn't disclosed, and refused to disclose to us when we were making Inside Job. On his CV, Hubbard lists The Analysis Group as a consulting client. That is misleading at best. The Analysis Group is one of a half dozen major firms that specializes in matching private companies and lobbying groups, who are the real clients, with professors who they pay to support their positions in regulatory, policy, Congressional, and legal disputes. It was The Analysis Group, for example, that arranged for Hubbard to testify on behalf of two Bear Stearns hedge fund managers who were prosecuted for securities fraud in 2009. Hubbard was paid $100,000 for his testimony.
Hubbard has been affiliated with the Analysis Group for many years, but when we asked him, he refused to disclose who he had worked for or what he had done. He also refused to provide us with a copy of the Federal financial disclosure form he was required to submit in 2001; we couldn't obtain it from the White House, because they had already destroyed (yes, that is interesting, isn't it?). Nor has Hubbard provided his total consulting income, his tax returns, or a comprehensive list of his income sources and clients for the period since he left the White House in 2003.
http://www.capitalismwithoutfailure.com/2012/10/charles-ferguson-standing-behind-every.html#more

[Trade, with what?]

How does the US achieve a sustained recovery if “the 99%” continues to suffer perpetual decline in real income?

Other than some obligatory arrests for disorderly conduct, the Occupy Wall Street movement celebrated its one year anniversary this past September with little fanfare. While the movement seems to have lost momentum, at least temporarily, it did succeed in showcasing the growing sense of unease felt among a large segment of the US population – a group the Occupy movement shrewdly referred to as “the 99%”. The 99% means different things to different people, but to us, the 99% represents the US consumer. It represents the majority of Americans who are neither wealthy nor impoverished and whose spending power makes up approximately 71% of the US economy. It is the purchasing power of this massive, amorphous group that drives the US economy forward. The problem, however, is that four years into a so-called recovery, this group is still being financially squeezed from every possible angle, making it very difficult for them to maintain their standard of living, let alone increase their levels of consumption.

Figure 2 below is courtesy of Shadow Government Statistics, and shows US Average Weekly Earnings adjusted for inflation using two versions of inflation measurement. It is a sobering chart. The blue line shows inflation-adjusted earnings using government CPI, and shows a small but steady increase in real earnings since the mid-1990s. The green line, however, shows what inflation adjusted earnings would be today had the US Bureau of Labour Statistics not made changes to the CPI in the early 90s, and reveals that average weekly earnings have actually been in contraction for over 17 years. Forget blaming our current woes on the hangover from 2008-2009. The average American worker has been losing income in real terms since the late 1990s. This is clearly a long-term trend which has compounded itself over the last ten years. Weakness begets more weakness.

http://www.zerohedge.com/news/2012-10-30/eric-sprott-americas-great-endangered-species-99