Hard to imagine it being happier for the markets than 2013, with the indexes closing at record highs and investor optimism nearing 80% bullish – as good as it's been since October of 1929 – just day's before the crash. Earnings were also looking great in 1929 and the gap between the top 1% and the bottom 99% had never been greater – until now.
That's another record we've shattered in this trickle-less rally, wealth disparity is at an all-time high. The top 10% are partying like it's 1999, and why shouldn't they? The top 10% control 83% of the country's financial wealth, 50% more than they did in 1929 and the next 10% have 12%, leaving 5% for the bottom 80% to share.
There's no use complaining about it, these are the conditions we're living in (well, that's what we like to say to the bottom 80% – to keep them from revolting!). If the prevailing social condition is slavery and the average white plantation owner has 200 slaves, then we should buy stock in the plantations, right?
That's what we do when we play the markets, there was a brief fad of "social-conscience investment funds" but, of course, they underperformed and no one wanted them and they died a quick death. There are, in fact, just 29M people in the World who have more than $1M and only another 344M people who have more than $100,000 in assets. Between them, these 373M people, just 5% of the World's population, control 82.4% of the World's assets.
Ken Langone is one rich person that won't be pushed around by the poor, telling New York's Cardinal Timothy Dolan that he needs to shut the Pope's trap if he wants to see any more donations for a new cathedral from his crowd. "I've told the cardinal, 'Your Eminence, this is one more hurdle I hope we don't have to deal with. You want to be careful about generalities. Rich people in one country don't act the same as rich people in another country,' " Langone said. And of course, he's right – rich people in other countries wouldn't have the balls to strong-arm the Pope!
Dolan told CNBC that he had heard from Langone and said, " 'Well, Ken, that would be a misunderstanding of the Holy Father's message. The pope loves poor people. He also loves rich people.' … So I said, 'Ken, thanks for bringing it to my attention. We've gotta correct to make sure this gentleman understands the Holy Father's message properly.' And then I think he's gonna say, 'Oh, OK. If that's the case, count me in for St. Patrick's Cathedral.' "
I guess if you want to be the Cardinal for NYC, you do have to learn how to kiss rich people's asses. I wonder if the Pope will learn the same lesson in 2014 when the Vatican needs a new wing or whatever?
I predicted back in 2010 that the Fed's ridiculous experiment in trickle down economics would do nothing but widen these gaps and we had a brief flurry of protests by Occupy Wall Street in 2011, but that movement was quickly and violently crushed out of existence. At the Nato Chicago meeting in 2012, protestors were clubbed and arrested and globally, we've had many instances most of which were quickly repressed. That's GOOD! We are the repressors – it means we're winning!
After all, what was the 2008 crisis? Banks ran out of money to lend. What's the solution? Give them FREE MONEY! And we have given them Trillions and Trillions of Dollars and the people have gone into more and more debt, doubling our load in the last 5 years to over $17Tn. That debt is divided equally among all citizens so the Government and the Fed borrowed (assuming you are one of the 140M working Americans) $60,000 on your behalf and they gave it to Banksters and Corporations who, so far, have essentially hoarded it.
Again, just like with the plantation owners – you can't beat them, you can't join them – but at least we can bet on them through the stock market (those very few of us with enough wealth assets to invest, of course). And that's how we "won" in 2013 and that's how we'll "win" in 2014 – by playing the game. It's a rigged game – it's not very hard to play – as long as the Corporations, their pet politicians and the Mainstream Media can keep the riff-raff in line.
Here's wishing you a happy, healthy and prosperous 2014!
Happy New Year,
- Phil
