The Pips Squeak

The Pips Squeak

Physical Inertia can be a bitch. Just ask Captain Schettino.

Costa Concordia

Captain Schettino stated that, before approaching the island, he turned off the alarm system for the ship’s computer navigation system.

“I was navigating by sight, because I knew those seabeds well. I had done the move three, four times.”

He told investigators that he saw waves breaking on the reef and turned abruptly, swinging the side of the hull into the reef.

“I have to take responsibility for the fact that I made a judgment error.”

“This time I ordered the turn too late.”

The captain initially stated that the ship was about 300 metres (330 yd) from the shore (about the length of the vessel) and hit an uncharted rock.

https://en.wikipedia.org/wiki/Costa_Concordia_disaster

Inertia is the resistance of any physical object to any change in its state of motion (this includes changes to its speed, direction or state of rest). It is the tendency of objects to keep moving in a straight line at constant velocity.

The principle of inertia is one of the fundamental principles of classical physics that are used to describe the motion of objects and how they are affected by applied forces.

https://en.wikipedia.org/wiki/Inertia

But Economic Inertia can be a blessing. Just ask British politicians.

Economic Inertia let’s you temporarily squeeze the rich.

Denis Healy

Harrison said, “‘Taxman’ was when I first realised that even though we had started earning money, we were actually giving most of it away in taxes. It was and still is typical.”

As their earnings placed them in the top tax bracket in the United Kingdom, the Beatles were liable to a 95% supertax introduced by Harold Wilson’s Labour government (hence the lyrics “There’s one for you, nineteen for me”).

https://en.wikipedia.org/wiki/Taxman

Then reality sets in as you “run out of other people’s money.”

Margaret Thatcher

And I will go on criticising Socialism, and opposing Socialism because it is bad for Britain – and Britain and Socialism are not the same thing. (…)

It’s the Labour Government that have brought us record peace-time taxation.

They’ve got the usual Socialist disease – they’ve run out of other people’s money.

In a speech to the Conservative Party Conference (10 October, 1975)

The last sentence is widely paraphrased as “The trouble/problem with socialism is that eventually you run out of other people’s money.”

https://en.wikiquote.org/wiki/Margaret_Thatcher

Economic Inertia let’s you de-industrialise.

cappuccino-economy

Why Britain is in the wrong type of recovery
The Telegraph – Szu Ping Chan – 13 Dec 2013

http://www.telegraph.co.uk/finance/economics/10513061/Why-Britain-is-in-the-wrong-type-of-recovery.html

Then reality sets in.

To put it bluntly, the UK is slowly going bankrupt.

united-kingdom-current-account-to-gdp

Revenge Of The Rubes – Why The Days Of The Financial Elite’s Rule Are Numbered
David Stockman – 29 June 2016

See: http://davidstockmanscontracorner.com/revenge-of-the-rubes-why-they-days-of-the-financial-elites-rule-are-numbered/

Economic Inertia let’s you borrow to participate in the Empire of Chaos.

united-kingdom-government-debt-to-gdp

Revenge Of The Rubes – Why The Days Of The Financial Elite’s Rule Are Numbered
David Stockman – 29 June 2016

See: http://davidstockmanscontracorner.com/revenge-of-the-rubes-why-they-days-of-the-financial-elites-rule-are-numbered/

Then reality sets in and [this time] you start to squeeze the poor.

united-kingdom-government-spending-to-gdp

Revenge Of The Rubes – Why The Days Of The Financial Elite’s Rule Are Numbered
David Stockman – 29 June 2016

See: http://davidstockmanscontracorner.com/revenge-of-the-rubes-why-they-days-of-the-financial-elites-rule-are-numbered/

Economic Inertia let’s you buy your ticket to ride the EU Gravy Train.

EU-budget

7 key factchecks from Nigel Farage’s UKIP conference speech
FullFact.org

https://fullfact.org/news/7-key-factchecks-nigel-farages-ukip-conference-speech/

Then reality sets in and the pips squeak.

Leave won by 52% to 48%.

The UK’s EU referendum: All you need to know
BBC News – Brian Wheeler and Alex Hunt – 24 June 2016

http://www.bbc.com/news/uk-politics-32810887

UK-EU-trade-balance

Revenge Of The Rubes – Why The Days Of The Financial Elite’s Rule Are Numbered
David Stockman – 29 June 2016

See: http://davidstockmanscontracorner.com/revenge-of-the-rubes-why-they-days-of-the-financial-elites-rule-are-numbered/

Whilst an October Surprise is primed for implosion.

So here we are three years later, when not only did Deutsche Bank just flunk the Fed’s stress test for the second year in a row, but moments ago in a far more damning analysis, none other than the IMF disclosed that Deutsche Bank poses the greatest systemic risk to the global financial system, explicitly stating that the German bank “appears to be the most important net contributor to systemic risks.”

DB IMF
http://www.zerohedge.com/news/2016-06-29/imf-deutsche-bank-poses-greatest-risk-global-financial-system

Volkswagen Agrees to $15 Billion Diesel-Cheating Settlement
http://www.bloomberg.com/news/articles/2016-06-28/volkswagen-to-pay-14-7-billion-to-settle-u-s-emissions-claims

Enjoy your summer vacation!

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4 Responses to The Pips Squeak

  1. oldbrew says:

    How long has Deutsche Bank got left?

    ‘If it fails, it will take along with it 3,4,5,6 or 10, or 15 other banks!’
    http://www.silverdoctors.com/gold/gold-news/jim-willie-if-deutsche-bank-goes-under-it-will-be-lehman-times-five/

    • tempestnut says:

      Deutsche Bank can keep going just so long as the banking system keeps bumbling along in its current dysfunctional state. But at some point, in one of the countries of Europe some form of reality will occur and that’s when the house of cards will come down. Predicting the exact event that triggers this is difficult, but you can see that the market has forced down bank shares across the board, and Deutsche in particular. Perhaps the event has occurred and we just don’t realise it.

  2. How to enjoy your Summer Vacation – American Style, as a Public Skool Teacher in Illinois:

    Money may be tight in Bellwood School District 88, but the school board still managed to quietly divert more than $105,000 from an education fund to replenish a retirement account its superintendent drained years ago.

    The money added 20 years of service to the Illinois Teachers Retirement System account for Superintendent Rosemary Hendricks. That change, under a TRS formula, would increase annual pension benefits to $77,000 from an estimated $14,000. Taxpayers across the state will pick up the tab, potentially for years to come.

    The move is another example of an Illinois school board diverting funds to help administrators land more lucrative retirement packages. The Tribune has written extensively about salary spikes, penalty payments and sweetheart deals that compound the state’s pension obligations.

    District 88’s attorney said Hendricks, 66, is required to repay the $105,504 to the district, but the district has not provided a copy of that agreement or any details about a repayment plan or said whether she must pay interest.

    “What I can inform you with some certainty is that the item you reference was voted on by the BOE (school board) approving the payment of said amount and requiring Ms. Hendricks to pay the money back,” attorney Michael Castaldo wrote in an email.

    The district did not disclose the spending during open records requests seeking details of Hendricks’ compensation, but the Tribune found the $105,000 expense listed in a September document among scores of other district payments for routine bills including milk for school lunch, legal work and general maintenance.

    The terms of the spending have been so elusive that records show even the district’s finance director and the Proviso Township school treasurer’s office, which oversees District 88’s finances, have been kept in the dark about whether Hendricks and the school board hashed out an official agreement over the spending.

    http://www.chicagotribune.com/suburbs/ct-bellwood-pension-met-20160624-story.html

    Therefore, how long does Illinois have left?

    There seems to be no limit to the amount of relevant news about the U.S. economic and financial system that the mainstream media keeps off the radar screen. I truly believe the technically insolvent status of the country’s fifth largest State is a lot more relevant to our collective lives than is the latest episode of The Jerry Springer Show Trump vs. Rubio vs. Cruz vs. Clinton “reality” TV show.

    Illinois sports a $111 billion unfunded State pension, it has $8 billion in unpaid bills, tax revenues are declining, spending is accelerating and it has yet to approve a FY 2017 budget. If this were a private corporation, it would have been taken through bankruptcy court and emerged with new owners at this point.

    http://investmentresearchdynamics.com/the-state-of-illinois-is-bankrupt/

  3. Another view from America:

    Brexit states unequivocally the City of London is insolvent; at the the point where it cannot finance itself any longer. This is the reason why the establishment rolled out the Brexit referendum in the first place, to save the banks. Think of Brexit as a bailout: the small will pay for the excesses of the great. The City certainly cannot finance the rest of the country and its massive and non-remunerative fleet of gas-guzzling automobiles; something has to give. There are 31.5 million cars in a country of 64 million humans, each car requires the resources of 20 persons. UK staggers under the equivalent human population of 630 millions on a small island … the bulk of those being dented, metal deadbeats. Talk about immigration, no wonder the economy struggles.

    The automobiles and their need for fuel imports and infrastructure paid for w/ endless credit issue have bankrupted the entire West, not just England. In Europe: the euro = gasoline. For once — maybe not realizing exactly why and not being entirely happy about it — the British have voted against their cars.

    http://www.economic-undertow.com/2016/06/26/ciao-britannia/

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