While Americans remain thoroughly distracted by a bogus war on terror, the enemy
within is devouring any chance we have left of maintaining a meaningful democracy
in this country.
Street just can't get enough red flags these days.
Almost everywhere investors turn, [selective] signs of inflationary
pressures make it less likely the Federal Reserve will pause from
two years of interest rate increases.
Stock investors have tied themselves in knots worrying about rising energy
and commodity prices, fearing these will force the Fed to stay on
the inflation warpath.
Nevermind the fact that THEY are the ones bidding up the price of commodities
because THEY are awash in cash and they DO NOT trust the dollar
(rightly so) - so they pour
all their cash into commodities.
That aside, Wall Street's insatiable greed makes bondbuyers - who believe it
or not are even more greedy - green with envy. Bondbuyers then demand that the
Fed increase interest rates so that they can bleed some of those profits
away from equity investors.
Isn't infighting wonderful? They deserve eachother. And if it ended there,
it would be poetic justice. But, it doesn't. There is significant collateral
damage among working Americans in this civil war among the greedy classes.
Because equity investors stand helpless before the Fed and bondbuyers, who
reign supreme, they pick on the only people they CAN pick on - workers.
[L]abor costs -- the biggest cost of doing business -- have
largely been on the back burner, as wage gains by U.S. workers remained relatively
tame. Until now.
Aside from being utter
bullsh*t - wages have been stagnate for years - the only reason they consider
labor costs as the biggest cost of doing business is because, at least for now,
human beings cannot be treated entirely like commodities.
For the first time since the recession about five years ago, U.S. wages are
catching up with inflation as the unemployment rate stays low and the
work week lengthens.
Uh, excuse me, braniac. But, if the work week is lengthening, that means workers
earn more BECAUSE they work HARDER, not because 'wages rates are increasing.'
"At a 4.7 percent unemployment rate, U.S. workers do have the
leverage to ask for higher wages or benefits, and that's part of the problem,"
said Marc Pado, Cantor Fitzgerald's chief U.S. market strategist.
Americans will do good to read that sentence over, and over, and OVER
The real terrorists are not cowering in the mountains of Tora Bora,
but towering in the boardrooms of Wall Street and London.
Case in point: The latest monthly productivity report from the Labor Department
showed hourly pay rose at a 5.7 percent annualized pace in
the opening three months of 2006, more than double the 2.7 percent pace in
the previous quarter.
First-quarter unit labor costs -- a key gauge of profit and price pressures
monitored by the Fed for clues on wage inflation -- increased
at a 2.5 percent annual pace, more than economists had predicted at the time.
What a crock of sh*t. Even if I believed these numbers - which I don't - they
prove absolutely nothing since 5.7 percent annualized increase is not nearly
enough to keep pace with the increased cost of living for Americans. Remember,
their stinking inflation index EXCLUDES
the price of food and energy!
Furthermore, employees are working longer each week than they have
in nearly four years, a detail often viewed as a sign of
labor scarcity and a signal of higher pay rates.
See. I told you. Workers are working harder than ever. But, that is neither
a sign of labor scarcity nor a signal of higher pay
rates, unless of course you're brain dead or you're trying to scorch
WAGES OBSTACLE FOR STOCKS? [!!!]
Analysts say mounting wage pressures are poised to squeeze corporate
profits and create a new headwind for U.S. equities, which have enjoyed
16 consecutive quarters of double-digit earnings growth.
At greatest risk are small-cap companies, a sector that has defied repeated
predictions of its demise, consistently outperforming larger peers for more
than five years.
"As U.S. compensation costs rise this year, many small- and
mid-cap firms will have little choice but to pay up, trimming revenue and
profit margins," said Joseph Quinlan, chief market strategist
at Banc of America Capital Management.
Others, who have sufficient bargaining power over their helpless employees,
will continue to exert enormous pressure on them to work harder for the same
or fewer benefits.
When the pool of available workers was large and wages stagnated,
small caps didn't have a problem competing with big caps for new
hires, but the relatively low unemployment now has given workers more
bargaining power and put small companies at a disadvantage, he said.
Now, does that sound like America the beautiful to you?
Wakeup people, we're at WAR and the enemy's within.