Heyer Capital, LLC

This is largely a repost from Jeff Matthew’s “Is Not Making It Up” blog.

Comments from Emerson Electric CEO David Farr.

“I’m Not Going to Hire Anybody in the United States”

“Now, to tell you how bad this is and tell you what I think Washington is doing right now, Washington is doing everything in their manpower capability to destroy US manufacturers, fundamentally destroy US manufacturers.

“Cap and trade, medical reform, labor rules, whatever they want to do, raise taxes. They’re just going to destroyed jobs. We have already reached 7.3 million jobs in this downturn. We’re going to 8. That is a summation of the last four downturns.

“So what do you think the recovery is going to be in jobs? It ain’t going to be very good. I listen to everything Washington is doing — wasting money, raising the deficit to 10, $12 trillion — the debt level to 10, $12 trillion, going to $23 trillion; raising taxes; putting regulations and requirements on me as a manufacturing company.

“What do you think I’m going to do? I’m not going to hire anybody in the United States. I’m moving. So they’re doing everything possible to destroy jobs, in my opinion. That’s my opinion as a manufacturer and we employ 125,000 people worldwide. So I do know what the (expletive) I’m talking about.

“We used to employ a lot more in the United States and we will continue to move [all this]. When I see guys like this, Wall Street bailouts, car bailouts, I’m looking — what are these guys doing with our money? They’re wasting trillions of dollars, trillions of dollars.

“So what they are going to do, they’re going to pass a new medical healthcare, raise my costs, jobs will go. Cap and trade, tax me, jobs will go. It’s pretty straightforward. What they’re doing right now ain’t working. 8 million jobs, summation of the last four downturns….

Estimates are that global government banks and agencies have shoveled against the bubble upwards of $30 Trillion (that’s a ” T “) in direct aid and indirect guarantees.  Does that mean we’re facing a hyperinflationary hell?

Not necessarily.  If the trillions upon trillions were in the form of currency, then we’d be on a direct path through Thermopylae. Instead, the vast vast majority of the aid is in the form of credit reserves and contingent taxpayer guarantees.  So long as the reserves remain just that — reserves — and are not put into general use, then their effects on the system are limited only to keep zombie banks (and their creditors & establishment owners) above ground.

Behind the curtain — think Wizard of Oz — the central banks are trying to figure out the best way to remove these reserves from the system.  And government/central banks have never been able to time that shift correctly.  Fortunately, the public’s unwillingness to borrow and the bank’s unwillingness to lend keep the reserves out of reach.

(BTW, I facilitate the local Dave Ramsey Financial Peace University course. Believe me, people are increasingly very unwilling to borrow.  I mean not a thin dime  ever, ever again.  And we’re teaching our children that too. There are inter-generational consequences to this extended crisis.)

The general market (summarized here with the S&P500 ETF) has had a powerful up trend the past eight months. A peculiarity of it is the major trendline connecting the price action in March, July and early October.  To make it to new high ground (toward “Point A“), the market will have to pass through not only the natural doubting resistance of new highs but also up through the strong trendline.

Failure to press through toward “Point A” possibly sets us up for a head and shoulders reversal.

Linked here is an extraordinarily interesting CSPAN commentary & Q&A with Janet Tavakoli.