Tuesday, May 15, 2012

The Great Economic Numbers Lie.

Hey kids, been some time out here on this one. Anyone watch the news? You see these numbers that baffle the mind as they have absolutely no sense in reality. Unemployment down to 8.1%. But what is that 8.1% of? Hmm? You see, the true unemployment number is closer to 20%. For adult black males, that number is closer to 50%. The issue is is that after people's unemployment benefits run out (after 99, yes, ninety-nine weeks) they just stop counting them toward that unemployment number, whether or not they actually have a job. With an average weekly first time jobless claim number now hanging weekly over 300,000 easily, its safe to say that for every 300,000 plus people that actually file first time jobless benefits, There are about 200,000+ people that are actually FALLING OFF THE ROLLS and are no longer counted in the bigger picture. So sure, unemployment appears to be going down, but in reality the only thing that is going down, is the actual number of the people counted, or so they say the word, "workforce." So is unemployment actually going down? No, just the number of people actually being counted into this "fraudulent" 8.1% number is the only thing going down.

Stock market is up too. Very much so over the past couple of years. Let's think about this: what are stock prices driven on? Profits, Dividends and Margins. Hold that thought while I address the next part here, another aspect that neither the Liberal or Conservative media take the time to address. 

Let's keep this simple. If you own stock in a bread company per say, and the bread maker is raising the price of the same bread that was $1.09 not too long ago to about $2.18 (this is a real number people.) That is a 100% increase in the "margin" that this company is making. We'll give about 20% of that to increased food production costs (another unheralded issue altogether) so that leaves about an 80% "margin" now. And where do you think that profit/margin actually goes? It sure isn't going to hire more workers. You see because the actual number of units being sold is substaintally less at $2.18 a loaf as 
compared to $1.09 a loaf. But on paper, the profit "margin" is so much higher, that the earnings and balance sheets of the company look so much better. Better balance sheets entice more investment, hence driving the actual stock price up much higher than it would be if this same bread company continued to sell as many loaves of bread at $1.09 a loaf. Because people have to eat and are too ignorant to use coupons and comparison shop, the big corporations are raking it in. They are making big profits while the 99% everyone claims to care about so much, are getting slaughtered every time they go into a supermarket, car dealer, retail outlet, clothes store, etc. This is the entire premise that today's economy is built on in 2012.  

People need cars, and GM (Government Motors) are also posting massive gains and profits much more so than before they were on the brink of Bankruptcy. Anyone see sticker shock on a Dodge lately? Chevy? Pre-bailout , these cars could be had brand new for under $12,000. Now, today these same vehicles, 3/4 made in China mind you, are retailing for a base brand cheap barley functional $16,900 off the lot. So, sell less cars, give everyone a $500 car payment, but hey, you're making an extra $5,000 profit to go toward your margins. So of course, it looks wonderful on the portfolios of the 1% now doesn't it. Once again, this same measure applies across all aspects of the retail arena in today, 2012. It doesn't take a rocket scientist to figure it out. All you have to do is go shopping one weekend and actually look at the price compared to what it was a year ago on everything you buy. What you actually find will not only startle you, but scare you to death.

Another amazing scam is the credit card companies that offer "cash back" on purchases. Bank of America offers these amazing advertisements with "1-3% cash back" depending on the items you purchase. Capital One has those wonderful baby advertisements offering up to 5% cash back on certain cards that they offer. Well how can they do that you ask?

It's the simplest form of math in the books, let people once again are too ignorant to see it. Base Capital One cards offer 19.99% APR. Bank of America anywhere from 16.99%-33.99% APR. This of course excludes the extreme minority who qualify for (with 750+ FICO Scores) those low introductory APR's , etc. We are talking about everyday people. So BOA or Capital One gets you to sign up for a "cash back" credit card. Safe to assume they have a $45 annual fee. Safe to assume your APR after the first year will rise. So in actuality, sure they are giving you this cash back option for purchases, but as you ring up your charges, and happily see that "cash back" reward on your statement, you of course, will not notice that your normal APR has gone up by double the amount of your "cash back" percentage. And guess what? That APR does not care whether or not you fed the baby cheerios with it or used it to "fill this baby up." Nope, you are getting hosed and probably don't even realize it.

That's what today's economy is built on people, ignorance and lies. The 1% is always happy to take advantage of the 99%. It's just a matter of time before people are going to actually wake up and realize what's really going on out there. If they ever do.