Good Ministry of Propaganda discussion:
Happy Days Are Here Again!!! Forever!!!
by Judson Henry, Wednesday March 02 2005
wallstreetexaminer.com
Very few “numbers” were scheduled for Wednesday morning. As is typical, rather than catching a break from the usual nonsense, “words” from Greenspan himself were on the schedule.
While the rest of us waited with baited breath for the content of Greenspan’s “words,” certain privileged participants in the currency “market” knew the content ahead of time. These top insiders-amongst-insiders of the currency-world reside in London. Guess what? USD rallied smartly in front of Greenspan’s “words,” shortly after the London open. Was anyone surprised?
Here’s the schedule item that mattered on Wednesday, the only one that mattered:
10:00 a.m. -- "words" from Fed's Greenspan on the FOMC HedgeFund Ecomony
Absolutely nothing was scheduled leading up to this. The last stuff to come out had been a few not-too-important “numbers” from Europe 5 to 10 hours earlier. Europe’s important “numbers” had already been released yesterday. A couple of US “numbers” were scheduled at the same time as Greenspan.
At first, I saw this as poor production management, something that even the most inexperienced Broadway-playwrite wannabe would try to avoid. Not so. Again today, the scriptwriters had a method to their madness (madness they help create). You see, one of the “numbers” involved petroleum inventories, and the scriptwriters wanted this buried in the blinding light, loud buzz, and hoopla that always attends Greenspan.
They did get it right after all. The best part of today’s show was not any of the theatrical acts, not even Greenspan’s. It was the sequential ordering of acts. You see, “numbers” always get out faster than “words.” After all, a “number” is just a single utterance, hitting the Bullhorn exactly at its chosen time. In contrast, “words” are usually an overly verbose, long-winded pseudointellectual babble-a-thon, and this requires summarizing to bullet points before hitting the Bullhorn.
Not today, however. Greenspan’s “words” hit the Bullhorn, which includes all internet news wire services and major financial media, at 10:00 a.m. sharp. The crude inventory “numbers” didn’t hit until after 10:30 a.m. Exactly how long does it take to report just a few numbers? As it turns out, this was good planning because, while the “numbers” were good, the audience didn’t believe them. Oil is just so hard to lie about. It’s just not fair. Simply burying these “numbers,” whether good or bad, in the excitement that surrounds Greenspan was, in the end, stage management at its finest.
Okay. On to the content of the show:
Mar 2 10:01 *GREENSPAN SAYS ECONOMY GROWING AT REASONABLE RATE
Mar 2 10:01 *GREENSPAN: TAX INCREASES NOT REQUIRED AND COULD SLOW GROWTH
Mar 2 10:00 *GREENSPAN CALLS FOR 'MAJOR' DEFICIT-REDUCTION
Mar 2 10:00 *GREENSPAN: SOCIAL SECURITY CHANGES SHOULD COME SOON
Mar 2 10:00 *GREENSPAN REPEATS SUPPORT FOR PRIVATE SAVINGS ACCOUNTS
Mar 2 10:00 *GREENSPAN: MEDICARE MORE A PROBLEM THAN SOCIAL SECURITY
As is so often the case, the “market” saw this as foreshadowing a positive direction, reacted positively, and the stock “market” exploded upwards. Now, the inconsistencies and the utter impossibility of this combination does not matter. This is really just a continuation of the style of babbling that was popularized by Ronald Reagan over 20 years ago. Borrow and spend equals low taxes and lots of goodie promises. It was exactly what the Baby Bubblers -- and seemingly everybody else -- wanted to hear back then, and still do. Since Reagan, all politicians and officials of all types on all levels have been too afraid to deviate very much from this general motif.
We all know it by heart because it's so old now-- Lower taxes while government goes ever more parabolic with reckless spending. The promise of "Happy days are here again forever" is realistic, even inevitable, because "America is Great" and its economic productivity miracle and magical stock market are as well. By what amounts to priestly theocratic proclamation, the productivity miracle will always both deliver increased revenue to cover all deficits and at the same time provide eternal milk and honey for all. All of this will be ours forever, if we all will only just believe.
So now we're at the point where the 'borrow' portion of borrow and spend is so out of control that officials like Greenspan are literally forced to at least pay it lip service. What do we get? Simply a more 'serious' and 'responsible' sounding (i.e. all image) version of the same old thing: 1) Taxes need not go up; 2) The stock market will save Social Security and other such promises; 3) Deficit reduction will be achieved by just reigning in the parabola a little while the "productivity miracle" takes care of the rest; and 4) Happy, happy happy ... forever, forever, forever.
Good thing they buried all those problematic crude oil “numbers,” especially the one that exceeded $53.00 per barrel.
By now, such bullhorning must be so ingrained in Greenspan that he could do it in his sleep. After all, he's a Reagan appointee himself and has been here for all of it. Can you remember all the way back then? Can Greenspan? Even if he is senile, it still comes out smoothly, the way that somebody with Alzheimer's still has knee-jerk reflexes and can quote a full conversation from 50 years ago. Also, even if he is still mentally present and his incoherent mumbling still deliberately crafted to preserve his positive image, he knows that no one will notice the unworkable contradictions. Greenspan fully expects to sail off with worshipful admiration regardless.
In summary, he acknowledged a lot of problems, which shows that he is ‘responsible’ and ‘prudent’ so we can all relax and depend on the Fed. At the same time, he said it in a context from which we can infer, through three layers of nonsensical mumbling, that it's really not so bad after all. Taxes need not ever be raised because the magic of the stock market will take care of everything. No need to worry.
Of course, the vast majority seem to be believing it, just because Al said it. Because his “words” are really pure psychotic delusion, the fact that any noticeable segment of our society would buy into them shows what level of psychotic insanity we’ve reached collectively. While this is disturbing to me, I must admit that I admire the brilliant artistry of it, both in the choreography and in the performance. Bravo Maestro Greenspan, and standing cheers to all the behind-the-scenes Plutocrats who were no less instrumental in choreographing the show.
Oh, I forgot -- the currency markets. EUR/USD nosedived almost 100 pips over a few hours starting with the London open. This rate, as well as the broader USD Index, then flatlined in immediate anticipation of Greenspan.
Surprisingly, even in the midst of all above-described theatrics, these “markets” just stayed dull and have flatlined through the day. I take the "surprising" part back, as Greenspan’s bullhorning gave the US dollar just a strong enough up-impulse to counter-balance the down impulse the dollar received from skyrocketing stocks and skyrocketing oil. In the end, on the daily charts, the result is a nice up day for the US Dollar. No trading opportunities for me, or for anybody else who isn’t a Plutocrat or one of their London PigMan minions.
For those of us who weren’t in our trading platforms and didn’t identify what was happening – at or near the London open – we missed out. There wasn’t any left; we know who got it all. Oh well, while my time of the day was too late to jump in on this one, it was a very entertaining show and well worth getting up to join the audience and bear witness.
posted Wednesday March 02, 04 41 PM ET |
