Crisis

What could possibly go wrong?

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From Jo Nova

“SA Government has just agreed to run itself for 20 years off a plant that is a copy of Crescent Dunes in the US. It’s paying twice the price of wholesale coal power, the US plant took 5 years to build and worked for 1 year and 1 month before breaking down for 8 months.

Crescent Dunes only works at a 16% capacity factor which means a 150MW version would average only 24MW. Winter generation is a mere one third of summer (though there is only one year of data to go on!) SA may well be better off if Parliament has to shut down for winter, but how do you run hospitals and schools on one-third of the power?

What could possibly go wrong?”

The growing dangers of the Sanctimonious Society

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Welcome to the sanctimonious society. Social media has taken this to new levels. Given the superficiality of much of today’s internet posts, memes and rants, what it has done is destroy the need for serious debate over contentious issues. Before discussing the likes of Twitter or Facebook censoring certain bloggers, the discourse is self-evident. How often do you read a credible rebuttal to a topical post? Hardly ever is the answer. Usually the criticism is laced with sanctimony, expletives and ridicule. The aim of trolling is none other than to shut down debate and make fun of the person who makes the statement. The intensity of cyber-bullying is chronic. In some respects it is none too surprising we are dealing with words like snowflake, trigger warnings and safe spaces these days.

Take cyber bullying stats from the Association of Psychological Science in the US. In 2015 more than 16,000 young people were absent from school daily because of bullying. 83% of young people say cyber bullying has a negative impact on their self-esteem. 30% of young people have gone on to self-harm as a result of cyberbullying. 10% of young people have attempted to commit suicide as a result of cyberbullying. People who have been bullied are at greatest risk for health problems in adulthood, over six times more likely to be diagnosed with a serious illness, smoke regularly, or develop a psychiatric disorder compared to those not involved in bullying. In the US alone, suicides per 100,000 head of population since 2000 are up 38% according to WHO.

However the WiFi world is quickly escalating unreasoned stupidity in the real world. The internet is awash with so much ill-considered social media activity that if one chooses to breathe for 10 minutes the story will likely have changed 180 degrees from the initial knee jerk. Take the terrible events of Charlottesville this week. The driver that plowed into the crowd was initially reported as a white supremacist before other media reported he was Antifa. Regardless of his affiliation his actions were repugnant. Anyone with common decency can see that. Trying to justify the legitimacy of masked Antifa (many who were carrying baseball bats) staging a ‘peaceful’ protest was somehow morally superior to alt-right torch bearers or vice versa is almost like trying to say watering your lawn with gasoline is less harmful than diesel to kill off weeds.

While the tragedies of the lost lives and depraved acts of violence from both sides is impossible to ignore, the (social and mainstream) media was awash with one sided views. There was no debate and balanced reasoning was next to non existent. One could argue the media has always been biased and to some extent that is true however in the social media world clickbait means revenue and the more sensational and less accurate the reporting the higher the likely ‘hits’ which only exacerbates the problem. We only need to look at CNN’s admission that the ‘Russiagate’ story has been a fabrication for ratings. Integrity be damned. Sadly that is becoming almost an all too common thread of today’s society. Selfish, narcissistic and insensitive bullying.

The other problem nowadays is that almost everyone carries a video camera. It is as if many think they are behind the safety of their own computer screens, oblivious to what is going on. Only a few months ago, an armed SWAT team boarded a Malaysian Airlines flight to suppress a crazed passenger. Despite the screams to get down, multiple people could be seen standing as tall as possible trying to improve the angle of the altercation on their iPhones. There is a sick surrealism to it. Yet if we take this clickbait of someone’s footage at Charlottesville, disseminated to an audience already prejudiced, it only adds to the hysteria. The instant it hits the mobs’ feed it can lead to incorrect assumptions to what is actually going on, even worse hampering emergency services efficacy in controlling the situation. Yet, 10 minutes later, the unedited version of the same scene or one shot from a different angle can completely undermine that biased view. It might show how the violence really escalated rather than the deliberately cut version showing the evil of the unhinged. If we managed to get all of the collective footage from 1,000s of smartphones and objectively analyzed it all it wouldn’t be surprising to see both sides fueling the violence in different areas. Yet because it fits the picture of the ‘divided’ country narrative no attempts are made to seek balance which only fires up the misinformation.

Did Trump take too long to condemn the KKK, Neo-Nazi and White Supremacists? Perhaps. Was he waiting for a full debrief on what went on? Perhaps. Are all 63 million odd Trump voters that don’t openly condemn these acts of violence guilty of being white-supremacists by association? No. Are all Democrats responsible for what Antifa does? No. Internet trolls seem less intent on getting tacit admissions of guilt from their enemy. Think of the campaign which has identified some of the torch bearers leading several to get fired by their employers. Where was the campaign to identify the baseball bat wielding Antifa thugs? Was it because they were masked? Some might cynically claim they don’t have jobs to be fired from. However this idea that only one side is guilty serves no purpose and risks further division.

What we have here is a failure to communicate. Both extremes are so caught up in their own views there is little scope for reasoning much less any desire to consider the alternative argument. This idea that Trump is all of a sudden responsible for unleashing this division is preposterous. Hate doesn’t surface in 6 months. It brews over longer periods of time. If anything Trump is a catalyst to it. His caustic manner is tipping an apple cart of decades of political correctness and walking on eggshells legislation that has sought in many cases to promote victimhood. The President’s actions now threaten many of these altruistic views and socialist ideals. They are upset. This isn’t to debate the rights and wrongs of policy set by previous administrations, rather seek to identify why this scourge is happening. It doesn’t justify any forms of violence but it highlights how tightly sprung things are. Just think of why a p*$$y grabbing vulgarian was able to defy all the odds in the election? Could it be that the underbelly of division has existed in America for so long? It finally reached breaking point and delivered him to the White House? The idea he has created this division is a complete falsehood. One might argue his tweets are stirring this hornet’s nest but the sad fact of the matter is that the problems have been brewing way before his inauguration. Ask yourself why hasn’t the mainstream media worked out the best way to cripple Trump is to ignore him? 18 months on since he won the GOP ticket they have not stopped hyperventilating which gives him more airtime than he deserves and ultimately makes them look foolish.

This bullying behaviour is only likely to get worse. The ever worsening cesspit of social media will only exacerbate the problem. Behind a keyboard, people feel they can afford to be 10 feet tall but seldom do they realize their actions could carry (un)intended negative reactions.

More laws are being created to clamp down on what is called ‘hate speech’ or discriminatory language. However we are witnessing more countries shut down free speech and innocent people are having their lives destroyed for expressing points of view that are completely acceptable and not even the slightest bit racist or bigoted (Australians will know the secret trial held by the AHRC of several QUT students expressing a fact). Seeking prescriptive measures to shut people up will invite exactly the sort of behaviour it seeks to prevent. One can call former EDL leader Tommy Robinson a bigot but he has two best selling books in the UK. Could it be there are more people in the UK that share his views than politicians are willing to admit because political correctness is easier for them to dodge discussing pertinent issues? Whether Tommy is right or wrong in his analysis is beside the point. He obviously represents a larger mindshare of the community. Shutting them up forces the movement underground. Do we ban his book? It doesn’t seek to address the problem which in his case is Islam. In some cases he has a point. The exposure of predominantly Bangladeshi/Pakistani rape gangs who have groomed 100s of innocent women across 18 British cities is an issue. Listening to Newcastle City Mayor Nick Forbes, one of the places impacted by this depravity, spent an entire interview dodging the question of these grooming gangs not wanting to discuss the M word. All it does is alienate more people against an optically biased system.

One can debate till the cows come home about whether the M word is the main factor but if it is not openly debated, it is not hard to see why some will grow prejudiced. It is hardly desirable. It doesn’t mean the thinking is right rather a growing number of people feel ignored. It doesn’t automatically make them racists or bigots. Some feel politicians are hiding from speaking openly of jihadi attacks on home soil, dismissing them as lone wolf attacks or the community’s fault for forcing them to commit such atrocious acts. If indeed the left leaning media is so assured of bigotry by Anglo Saxon Brits why not show the other side of the debate and broadcast hours of footage showing Muslim clerics speaking out against these attacks, everyday Muslims integrating with their non-Muslim communities and how they are actively working with authorities to weed the radicals that are demonizing their faith? No, it’s easier to point fingers at bigoted Brits who see no comfort offered by their elected leaders in what they see happening to their community. Once again bullying people for expressing what they perceive as legitimate concerns doesn’t solve the problem.

To put the shoe on the other foot, Robinson posted a video link of the start of an Oldham (a borough of Manchester) Council meeting. It showed the majority of Anglo-Saxon councillors with their heads bowed as the elected Muslim Mayor requested his imam to say prayers. Of course it easy to see why some might draw conclusions to the decline of centuries of British culture however looking deeper into the matter yielded interesting findings. Voter turnout at the last election in the 25% Muslim borough was around 30%. It was a fairly held election. Democracy. Whether local politics is too petty for some, if the residents of Oldham are so incensed by the idea of an imam saying prayers in Arabic and English after following the Serjeant at Arms carrying a mace bearing a Christian cross it is hard to have sympathy. If one is truly in fear of the cultural upheaval, why not use their democracy to change it? Expressing outrage at something that is controllable seems ridiculous.

Australia is in the midst of bullying as well. Same sex marriage (SSM) is on the table. A postal plebiscite is set to occur. Many argue that parliamentarians should vote on it and get it over with. Indeed there are far more pressing economic issues to deal with. Yet the Turnbull government lacks any moral authority and is beholden to so many internal factions to be able to pass so called marriage equality.

Still regardless of one’s views on SSM, the bullying is in full effect. Musician Nick Minchin created one of his hallmark curse-ladened parodies of a Peter Allen song called, “I still call Australia homophobic”. Sadly he is part of the problem, not the solution. One doesn’t have to be homophobic to be against SSM. Yet Minchin thinks it is ok to call these people ‘bigoted c*nts’. Such words have all the same traits of ridiculing Trump or Brexit voters in the lead up to the vote. It has the opposite impact at the polling booth.

A Tasmanian archbishop is being hauled before a tribunal for expressing his anti-SSM views on the grounds of spreading hate. Are his views old fashioned or just part of millennia of religion? A hotel was forced to cancel a lawful gathering of anti-SSM campaigners through intimidation. Is this the sort of behaviour (albeit at the fringe) that unites a nation on a subject?

Some argue it is a waste of $122mn to hold a SSM plebiscite for a government in a $750bn hole. Maybe it is but to many out there, they want a democratic vote to take place. Some feel lobby groups that ignore their concerns (however backward, ancient or stiff) on issues they hold dearly are the exact reason why a vote should be held. It doesn’t matter to them whether a Catholic country like Ireland passed gay marriage, these people don’t want to be brow beaten, attacked or pilloried for expressing an alternative view. I am quite certain that should ‘Yes’ get up in the plebiscite people will have had their say. Shouting down the views of others is wrong. Let their voices be heard and allow the marketplace for free speech settle the differences. Sadly this is not the case. Any polling done by Get Up which shows an emphatic victory should be discounted. Indeed if they are so sure of a ‘Yes’ outcome then they should be over the moon to let democracy back its findings. Secretly they think otherwise. What they view as a waste of money won’t be to others.

Some people fear (again we’re not debating the rights and wrongs of it) that should lobby group bullying win the fight for SSM by an act of parliament then what comes next? We only need to look at the Safe Schools Programme in Victoria which is nothing more than a way to enforce gender indoctrination under the guise of anti-bullying. Cross dressing/role playing, whichever bathrooms and other ‘progressive’ programs are not necessary for 6 year olds. Boys playing with Tonka trucks and Matchbox cars or girls playing with Barbie dolls is not something that requires the school system to enforce boys and girls to reverse toy box selections. When I was a baby my mother recalled I had a love for cars. Even from my pram I knew more car names than English words. I’m sure she wasn’t wheeling me around the Warringah Mall car park trying to force me to do male things. By the same token my daughters weren’t chained to the Bratz corner of Toys’R’us in order to force them to be girls. Seeing her mother apply makeup was something she wanted to do.

What this all boils down to is society’s growing intolerance for free and open debate. We do not lack the ability to talk but we’re incapable of listening. That alternative views must be mocked or banned. There are some with such inability to accept alternative views who suggest prison sentences for climate skepticism. Are the arguments for climate change so weak that alarmists believe the only way to force the end game is to legally ban freedom of opinion?

One imagines that if we put an Antifa and a KKK supporter in the same room unbeknownst to them both and asked a standard questions on a variety of topics they probably would agree on more than they would if within their representative groups. These experiments have been conducted before where complete strangers meet and by the end when identities are revealed there is an awakening. It isn’t forced but occurs naturally through cordial conversation.

I make no apology for my conservative views. One friend is an unabashed socialist. We debate intensely on a variety of issues we have polar views on. I recently wrote to him privately to thank him for broadening my understanding of his views. While I might disagree with him I certainly respect his right to debate his points, which he often does insightfully. Some points are indeed valid and on certain issues we see eye to eye. Others less so. However we listen.

Sadly sanctimony is becoming ever more firmly entrenched into our culture and it can have nothing but bad outcomes. Perhaps to end with a Jewish proverb – “slander slays three people: the spoken by, the spoken to and the spoken of”

 

80,000 litres of diesel an hour to save renewable energy failure

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You have to laugh at the irony. In order to make up for South Australia’s misguided renewable energy policy which has been the cause of numerous blackouts, 9 diesel generators costing $111mn will use 80,000 litres of diesel per hour to keep the lights on during power shortages. Had the Port Augusta coal fired plant not been ceremoniously dynamited as a virtue signaling exercise, South Australian tax payers would be $100mn better off as a start. Energy Plan Implementation ED Sam Crafter said after the initial 13-month period, there was an option to extend the lease for a further 12 months. There also was an option to walk away at the end of 25 months. So if South Australia chooses to extend the lease of the generators for another 12 months the cost won’t be included in the $111m. It is hard not to laugh at the irony of governments who make such appalling choices and cover up their mistakes by stealing more from taxpayers who they never properly showed costings to in the first place. Is it any wonder South Australia has the highest energy costs in the world, the highest unemployment rate in the country and the slowest growth. Don’t be surprised if Premier Jay Weatherill sees this as a fair price to pay to save the planet, even if South Australia is crushed in the process.

Is PM Abe’s at risk of a health relapse with yet more voter backlash?

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Yet more voter backlash for PM Shinzo Abe and the LDP. The scandals and shenanigans are causing some glaring results at the local and prefectural level. Last month’s Tokyo Municipal Assembly elections saw the LDP experience its worst ever outcome. The Sendai Gubernatorial elections this Sunday saw the LDP stench continue. Japan has been pushing the Abenomics revival theme but given the stress from a plummeting approval rating (26% heading into the Kake Gakuen hearings in parliament) will his health issues kick up forcing him to resign? The July 22-23 Mainichi newspaper poll showed that 56% did not back his government, +12 points from the previous survey in June.

Independent candidate Kazuko Kori (right) promised education reform and a quick resolution to the problem of long child care waiting lists. Her LDP competition in the form of  Hironori Sugawara (left),ironically a president of a funeral services operator, was defeated.

PM Abe’s left his first term after just 12 months in 2006-2007 being diagnosed with an illness known as chronic ulcerative colitis — a type of inflammatory bowel disease which according to the Bungei Shunju monthly magazine in Feb 2008:

“He would rush to the toilet in pain…he felt the urge to evacuate every half hour or so.

While in the 2012 campaign Abe assured us he’d been cured, the question is whether the current crop of scandals (involving him and his wife Akie) will see a relapse of this condition, rendering him out of action. Markets are not yet forecasting Abe to resign but whatever one thinks about “Abenomics” it has brought some long overdue semblance of stability in Japanese politics. Should an event occur we could see some financial evacuations.

3 maps which explain a lot

IMG_0743The chart above shows the average % change in housing prices in the US by county today vs that in 2000 according to a Harvard study. The following maps show the results of the 2008 and 2016 election by county. Could this be yet another basic concept showing why the US voted the way they did last election?

2008 – a hope for change

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2016 – the last 8 years didn’t help – time to vote for wholesale change

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Feel free to draw your own conclusions. These three maps to me voice the disgruntled who remain destitute after all this time.

From Sesame to Elm Street

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ETF markets continue to surge in popularity. With low fees and basic packaging of the ETF product even Big Bird can understand what The Count is going on about. No wonder investors are snapping up these products faster than the Cookie Monster. However there is something chilling about the ETF market. In the lead up to and eventual crash of Lehmans et al CDOs, CDSs and other synthetic products were seen as the root of all evil. They were so complex that even Fields Medal winners in mathematics couldn’t make head nor tail of them. The ETF became the opposite – being too simplistic – and with that the product has brought huge complacency. To that end Sesame Street could well switch to Elm Street.

Today assets invested in ETF/Ps comprise over $3 trillion globally. Put simply the new funds flowing into ETFs vs. traditional mutual funds is at a 100:1 ratio and in terms of AUM is on par with total hedge fund assets which have been in existence for 3 times as long.

However ETFs, despite increasing levels of sophistication, have brought about higher levels of market volatility. Studies have shown that a one standard deviation move of S&P500 ETF ownership carries 21% excess intraday volatility. Regulators are also realising that limit up/down rules are exacerbating risk pricing and are seeking to revise as early as October 2015. In less liquid markets excess volatility has proved to be 54% higher with ETFs than the actual underlying indices. A full report can be seen here.

With the continuation of asset bubbles in a TINA (there is no alternative) world, ETFs in my view will lead to massive disappointments down the line. Their downfall could well invite the revival of the research driven fund manager model again as robots show they’re not as infallible as first thought in managing the volatility. Don’t forget humans designed the algorithms.

There is also the added risk of whether some ETFs actually hold the physical of the indices or commodities they mimic. A gold ETF is a wonderfully good way to store wealth without resorting to one’s own bank vault but how many ETF owners have inspected the subterranean cage that supposedly holds the physical the ETF is backed by? Has it been lent out? Does it own a fraction of stated holdings? It could be any other commodity too. Of course the ETF providers bang on about the safety of the products but how many times have we gasped when fraud reared it’s ugly head right in front of us. Bernie Maddoff ring any bells?

Given the implied volatility on the downside we need to bear in mind the actions of central banks. The Bank of Japan (BoJ) is the proud owner of 60% of the ¥20 trillion+ domestic ETF market. While the BoJ says it isn’t finished expanding its world’s largest central bank balance sheet (now 100% of GDP), the US Fed is looking to reduce its balance sheet by over 40% in order to normalize. While one can applaud some level of common sense pervading sadly the consequences of defusing the timer on the bomb they created at a period when the US economy is showing signs of recession will only be an overhang on asset markets. Should the US market be put through the grinder, global markets will follow.

It is one thing for the Fed to be prudent. It is another for it to be trying to cover its tracks through higher interest rates in a market that looks optically pretty but hides serious life threatening illnesses. The Fed isn’t ahead of the curve at all. It is so far behind the 8-ball that its actions are more likely to accelerate rather than alleviate a crisis. Point to low unemployment or household asset appreciation as reasons to talk of a robust economy but things couldn’t be further from the truth. Wage growth is not the stuff of dreams and the faltering signs in auto, consumer and residential markets should give reason for concern.

Since GFC we have witnessed the worst global economic revival in history. The weakest growth despite record pump priming and balance sheet expansion. Money velocity is continually falling and the day Greenspan dispensed with M3 reporting one knew that things were bad and “nothing to see here” was the order of the day.

Record levels of debt (just shy of $220 trillion or 300% of GDP when adding private, corporate and government), slow growth, paltry interest rates and coordinated asset buying have not done anything other than blown more air into a bubble that should have been burst. GFC didn’t hit the reset button. Central banks just hit print to avoid the pain. We’ve doubled up on stupidity, forgot the idea of prudent and sensible growth through savings and just partied on. Ask any of your friends in finance what they “really” think and I can assure you that after a few drinks they’ll tell you they’re waiting for the exit trade. They know Armageddon is coming but just don’t know when

Whether we like it or not, the reset button will be hit. I often argue people should not worry about the return ON their money but the return OF it. Global markets can’t be bailed out again with massive cash infusion. That has been a recipe for disaster, only widening the gap between haves and have nots. Debt must be allowed to go bad, banks must be allowed to go bust and free markets must be freed from the shackles of state sponsored manipulation to set prices. It will be ugly but more of the same can kicking won’t work.

ETFs are a sign of the times. They represent the slapdash approach to life these days. Time saving apps if you will. However nothing beats hard nosed analysis to understand what awaits us. Poor old Big Bird will be the canary in the coal mine and Sesame Street will be renamed Elm Street as the Kruger’s move in to give us nightmares Janet Yellen assures us aren’t possible.

Perhaps that is the ultimate question. As you go to work each day do you honestly feel that things are peachy as the management town hall meetings would have you believe? Are your friends or colleagues all bulled up about the future? Perhaps that is easier to answer than an ETF.

Yellen’s Fedtime stories

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US Fed Chair Janet Yellen uttered perhaps some of the most bizarre words to come out of a central banker. So much so that Alan Greenspan’s “I know you think you understand what you thought I said but I’m not sure you realize that what you heard is not what I meant.” seems almost comprehensible by comparison. Yellen told an audience that she believes we won’t see another severe financial crisis in our lifetimes. Either Ms Yellen is not long for the world or denial is running deep within her veins. One of her own FOMC board members (James Bullard) wrote a piece on why the Fed needs to trim its balance sheet from $4.47tn to around $2.5 trillion) so they can prepare for the next horror that awaits.  Even Minnesota Fed Reserve Bank President Neel Kashkari said the likelihood of another financial crisis is 2/3rds. We have a world with debt up to its eyeballs and global interest rate policies that have only led to the slowest post slowdown growth in history. The signs of a global slowdown are becoming ever more obvious even in the US. Slowing auto sales and rising delinquencies are but one signal. The imminent collapse of so many public pension funds another.

Had she not seen the European Commission’s decision to let Italy spend up to 17 billion euros to clean up the mess left by two failed banks? The news is not only another whack for Italian taxpayers but a setback for the euro zone’s banking union, and a backflip for the EU’s stance on non-standard bailouts. The Italian government wound down Banca Popolare di Vicenza and Veneto Banca, two regional lenders struggling under the weight of non-performing loans which averages 20% across the nation and up to 50% in the south. Intesa Sanpaolo bought the banks’ good assets for one euro, and was promised another 4.8 billion euros in state aid to deal with restructuring costs and bolster its capital ratio. Italy’s taxpayers get to keep the bad loans, which could end up costing them another 12 billion euros. Even the Single Resolution Board — whose purpose is to take the politically difficult decision of whether to close a bank out of the hands of governments — chose not to intervene.

Last year four Italian banks were rescued and it seems that since Lehman collapsed in 2008 non performing loans (NPLs) have soared from 6% to almost 20%. Monte Dei Paschi De Siena, a bank steeped in 540 years of history has 31% NPLs and its shares are 99.9% below the peak in 2007. Even Portugal and Spain have lower levels of NPLs. The IMF suggested that in southern parts of Italy NPLs for corporates is closer to 50%!

Italy is the 3rd largest economy in Europe and 30% of corporate debt is held by SMEs who can’t even make enough money to repay the interest. The banks have been slow to write off loans on the basis it will eat up the banks’ dwindling capital. It feels so zombie lending a la Japan in the early 1990s but on an even worse scale.

Not to worry, the Italian Treasury tells us the ECB will buy this toxic stuff! But wait, the ECB is not allowed to buy ‘at risk’ stuff. So it will bundle all this near as makes no difference defaulted garbage (think CDO) in a bag and stamp it with a bogus credit rating such that the ECB can buy it. In full knowledge that most of the debt will never be repaid, the ECB still violates its own rules which state clearly that any debt they buy ‘cannot be in dispute’.

The Bank of Japan has no plans to cut back on the world’s largest central bank balance sheet. It continues to Hoover up 60% of new ETF issues at such an alarming pace it is the largest shareholder of over 100 corporates. Then there is the suggestion of buying all $10 trillion of outstanding JGBs and convert them into zero-rate (+miniscule annual service fee) perpetuals.

Australia’s banks are now the most loaded with mortgage debt globally at 60% of the total loan book.  Second is daylight and third Norway at 40%. Private sector debt to GDP is 185%. We have a government who can’t tighten its belt basing its budget on rosy scenarios that will be improbable. Aussie banks have been slapped with a new tax and with the backdrop of a rising US rate environment, the 40% wholesale funded Aussie banks will be forced to accept higher cost of funds. That will be passed straight onto consumers that are already being crushed under the weight of mortgages. One bank survey by ME Bank in Australia said that 1/3rd would struggle to pay a month’s mortgage if they lost their jobs.

Had Ms Yellen forgot to read the St Louis Fed’s survey which revealed that 45% of Americans can’t raise $400 in an emergency without selling something? USA Today reported that 7 out of 10 Americans have less than $1,000 in savings to their name.

“Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account…Breaking the survey data down a bit further, we find that 34% of Americans don’t have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.”

So Chair Yellen, we are not sure what dreamland you are living but to suggest that we won’t see another financial crisis in our lifetime almost guarantees it will happen. The Titanic was thought unsinkable until history proved otherwise. Money velocity is not rising and every dollar printed is having less and less impact. I thought it nigh on impossible to surpass the stupidity of Greenspan but alas you have managed it.