Gold/Oil ratio ends week at 15.14, and gold loses its relative advantage to oil

The edge goes back to oil, which, however, is probably going to keep declining in price, so there's no rush, especially since oil not that long ago had enjoyed an impressive "buy" relative to gold.

TSA Claims All Nude Scanners Now Gone

Nice belt!

Story here:

"[A]s of May 16, all US airports scanners equipped with the ability to produce the penetrating images will now only show a generic outline of a passenger to the operator."

Sorry Charlie, Household Net Worth Remains In Depression: Still 15% Off 2007 Peak

From the newly issued 2012 annual report of the St. Louis Federal Reserve here, taking the nominal figures in the March Z.1 Flow of Funds Release of the Federal Reserve and adjusting them both for inflation and population growth since 2007:

"Clearly, the 91 percent recovery of wealth losses portrayed by the aggregate nominal measure paints a different picture than the 45 percent recovery of wealth losses indicated by the average inflation-adjusted household measure. Considering the uneven recovery of wealth across households, a conclusion that the financial damage of the crisis and recession largely has been repaired is not justified."

Completed Foreclosures Still Running 148% Higher Than Normal

According to Corelogic's monthly foreclosure report, here, completed foreclosure activity is still running at a rate of 52,000 per month in April, down from 62,000 per month a year earlier.

The average monthly rate before the financial panic, however, was 21,000 per month, making the current rate, though improved, nearly 148% higher than was the case in the years between 2000 and 2006.

But don't worry, everyone says things are better now and housing has recovered.

GDP For Q1 2013 Revised Down To 2.4% From 2.5% In Second Estimate

From the report of the Bureau of Economic Analysis, here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.4 percent in the first quarter of 2013 (that is, from the fourth quarter to the first quarter), according to the "second" estimate released by the Bureau of Economic Analysis.  In the fourth quarter, real GDP increased 0.4 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month.  In the advance estimate, real GDP increased 2.5 percent.

To put the second estimate of Q1 2013 real GDP in context, a real rate of growth of 2.4% now is just slightly ahead of the average report of 2.23% during George W. Bush's first term in office. But compared to Barack Obama's first term, it's a world of difference from his performance in his first term with a paltry 0.83% average report.

That said, it used to be the opinion of Ben Bernanke, the Federal Reserve chairman, back in July 2009 that we needed 2.5% growth just to keep the jobless rate constant. That's why under Bush it took so long for jobs to recover after 911. And it's why jobs are taking so long to recover now. With growth of just 2.4%, going forward all we can expect is the current level of unemployment. And you can forget about putting the millions who lost their jobs in the recent financial panic back to work in decent jobs, maybe ever.

Price Discovery In Health Care

The past is the future: Doctor in Maine stops taking insurance, cuts prices in half and posts them online.

Story here.

Stupid: Well, There It Is

P.J.O'Rourke, here:

Call a man, best of all, wicked and you get to don the sacramental vestments, climb into the pulpit and thunder forth with such a sermon as to bring him weeping to the font of righteousness or cause the Lord God Almighty to strike him with a thunderbolt in his pew or something fun like that. But call a man stupid and . . . there it is.

And there it is: Dopey stimulus, obtuse bailout, noodle-headed Obamacare, half-wit Dodd-Frank, damfool IRS Tea Party crashers, AP and Fox News beset by oafish peeping Toms and the Benghazi tale told by an idiot. One could go on. Stupid is a great force in human affairs. And the great force has a commander in chief.

IRS' Shulman Visited White House 9 Times In '09 Alone, Everson Once In 5 Years

The former IRS Commissioner Douglas Shulman is widely reported to have visited the White House well over 100 times after 2008 when he took over the agency, just as the IRS was preparing to target Tea Party groups in earnest.

What's more interesting, however, isn't the aggregate number of visits he made, most of which occurred in the wake of the passage of ObamaCare in 2010 and which are detailed in the logs as health-care related discussions, but that he made so many visits to the White House prior to March 2010.

Earl Glynn here has made an exhaustive study of the White House logs and finds Shulman visited the White House 9 times in 2009 alone.

Shulman's predecessor Mark Everson, by contrast, recalls making just one visit to the White House in the five years between 2003 and 2007, as reported by Susan Ferrechio here:

'The frequent trips to the White House under Obama far outnumbered the times other administrations felt the need to meet with the IRS, according to Mark Everson, who led the IRS under former President George W. Bush. Everson said he remembers making only one trip to the White House between 2003 and 2007 and said he felt like he'd "moved to Siberia" because of the isolation.'

In Shulman's testimony before Congress he has denied discussing targeting of Tea Party groups, but he also testified that he doubted he visited the White House as many times as reported, as recounted here:

He also expressed skepticism that he had visited 118 times.

“I don’t accept the premise that there are 118 visits to the White House,” he objected. “That may or may not be true.”

Yeah right, that's because there were 157 visits, not 118.

The guy's a Slick Willie who absolutely must parse so that if and when we get the goods on the guy at least he'll avoid a perjury charge:

[A]ll of Shulman’s answers were parsed and delivered in practiced legalese.  He almost never answered anything with simple assertions, opting for “recollections” and “as far as I can remembers.”  In his apparent painstaking efforts to avoid making any statement that might ensnare him in a perjury controversy, Shulman seemed unable to cleanly field simple questions about his opinion.  So he hedged and qualified and dissembled — and looked really guilty doing so. 

IRS' Lois Lerner Actually Signed Letters To Targeted Tea Party Groups

The story is here:

"The IRS official who refused to testify this week -- while claiming she had done nothing wrong -- signed letters to Tea Party groups a year ago that asked them to turn over everything from printouts of their Facebook pages to the credentials of speakers who participated in their events." 

Hillary, Holder and Shulman: Obama's Know-Nothing Government Zoo?

Hillary Holder and Shulman

Jonathan Turley in The Washington Post, here, warns about the growth of Leviathan, the administrative state, which makes monkeys out of its politically appointed overseers (or does it?):

There were times this past week when it seemed like the 19th-century Know-Nothing Party had returned to Washington. President Obama insisted he knew nothing about major decisions in the State Department, or the Justice Department, or the Internal Revenue Service. The heads of those agencies, in turn, insisted they knew nothing about major decisions by their subordinates. It was as if the government functioned by some hidden hand.

Clearly, there was a degree of willful blindness in these claims. However, the suggestion that someone, even the president, is in control of today’s government may be an illusion. ...

For much of our nation’s history, the federal government was quite small. In 1790, it had just 1,000 nonmilitary workers. In 1962, there were 2,515,000 federal employees. Today, we have 2,840,000 federal workers in 15 departments, 69 agencies and 383 nonmilitary sub-agencies. ...

[T]he Supreme Court ruled in 1984 that agencies are entitled to heavy deference in their interpretations of laws. The court went even further this past week, ruling that agencies should get the same heavy deference in determining their own jurisdictions — a power that was previously believed to rest with Congress. In his dissent in Arlington v. FCC, Chief Justice John Roberts warned: "It would be a bit much to describe the result as ‘the very definition of tyranny,’ but the danger posed by the growing power of the administrative state cannot be dismissed.”

-----------------------------------------------------------

Doesn't this line of argument smell just a little like a pre-emptive defense of the bad monkeys who were actually up to no good? Perhaps a diversionary tactic? Throughout the article, Turley constantly refers to the untouchable agencies as "the fourth branch" of the government. Isn't this a deliberate rhetorical shift? The fourth estate, the press, has been the traditional conception from the time of Carlyle. The fourth branch appears to be a recent innovation, a neologism originating in a leftist critique of the media when captured by the elected, usually Republican, government (as fine a description of the current Obama regime as any, which might be a reason Turley seeks to redeploy the term for what conservatives have long termed the managerial state to keep the focus off the compromised media--it's more prudent for a liberal to change the subject from media complicity when it's media complicity with liberalism we're talking about).

It's also suspicious when liberals start talking like conservatives just when their side starts getting its feet held to the fire. And isn't it also a little rich to hear John Roberts warning about the growing power of the administrative state when on behalf of the third branch of government he basically shoved ObamaCare down the throats of the American people against their will? Or is Leviathan so irresistable that the judiciary follows the legislative in ceding its own power to the faceless bureaucracy?

It would probably behoove the cause of liberty more to forego a special prosecutor in the IRS scandal at this time simply in order to keep televised hearings before the eyeballs of all. Educating the people about the malfeasance of the so-called fourth branch under Obama is job one in order to pierce the fourth estate's media halo around their hero Obama.

America Still Stands Despite Enemies Foreign . . .

. . . and domestic.

Obama's Tea Party Attack Dog Bob Bauer Is A Maoist Like His Wife, Anita Dunn

"struggle session"

From Investor's Business Daily, here, which thinks the dots connect to Obama:

But as the Wall Street Journal's Kimberly Strassel reminds us, Obama's 2008 campaign was demanding the Justice Department criminally prosecute conservative groups with 501(c)4 tax-exempt status. Then, last year, President Obama's re-election campaign "targeted private citizens who had donated to Romney groups."

The chief operative? Longtime Democratic Party lawyer Robert Bauer, general counsel for Obama's presidential campaigns, White House general counsel during Obama's first term, Democratic National Committee general counsel, and the Democrats' counsel in President Bill Clinton's Senate impeachment trial. And, not least, husband of Democratic political strategist Anita Dunn, White House communications director in Obama's first term, and now an MSNBC contributor.

Actually, the dots connect beyond Obama to Mao.

Maggie's Notebook prominently showcased Bauer and Dunn as a couple already in 2009, here. We should have understood better what this implied. While Anita Dunn is on record stating her admiration for Mao, Bauer actually has been busy echoing Maoism in his capacity as Obama's personal lawyer and as general counsel for the White House and the Obama political campaigns.

One of the main techniques of Mao's Great Leap Forward in China was for local communist parties to target landowners for public intimidation in "struggle sessions" in order to break the grip of counterrevolutionary power in the countryside. They ended up executing an estimated 2 million of them during the 1950s. As a feature of the permanent revolution, the struggle sessions eventually made it to the cities where counterrevolutionary rival communists were frequently targeted and persecuted.

These struggle sessions have been adapted to the new revolutionary environment by the Obama Left. Whether it's Acorn cadres occupying bank lobbies, or using the Justice Department, the IRS, and individual US Representatives and Senators to single out private citizens, businesses and nonprofits on political grounds, targeting one's political and class enemies with whatever means are available comes straight from the dark ages of 20th century communism, brought to you by ObaMao and Company.

China was ready to welcome one of their own.

The new Great Leap Forward

No bank failures so far tonight

The total stands at 13 for 2013.

Happy full moon everybody!

Rush Limbaugh Continues In Error: McCain Did NOT Get More Votes Than Romney

Rush Limbaugh can be so wrong sometimes it's infuriating, and once he gets some misinformation into his head, it's almost impossible to get it out of there. He can complain about the low information voters all he wants, but it's the lazy misinformation he spews which we all need to worry about, as when Rush won't allow Donald Trump into the conservative movement because The Donald wants to raise tariffs to beat the hell out of China. That's not conservative, Rush says, nevermind a tariff regime funded this country clear through the War Between The States and many decades thereafter. The fact is that Rush Limbaugh's version of conservatism doesn't win because it can't imagine America before 1913, isn't intelligent and doesn't compel assent for that reason. America still has an institutional memory, and the people still can tell when someone makes sense and when they don't.

Rush opened the second hour of the program today, here, claiming for the umpteenth time that Romney got fewer votes than McCain, which he didn't: "Obama got millions fewer votes in 2012 than he did in '08, but so did Romney get many million fewer votes than did McCain." This phone-it-in comment is in service of Rush's new vote suppression meme, i.e. Democrat suppression of Republicans, courtesy of the new IRS nonprofits targeting scandal. But the theory is completely unsupported by the facts of the last election. How different is this misinformation than the idea swallowed hook line and sinker by Republicans that they lost in 2012 because they lost the Hispanic vote? Maybe they lost the white vote. 

Romney polled 60.93 million in 2012 and McCain 59.95 million in 2008, okay? And Romney lost the election by half as many votes in the swing states as McCain lost it by in those same states. Romney was a better candidate than McCain, but he was still a bad candidate.

With what's happened with the IRS scandal I don't think Rush will ever be convinced he's wrong about the 2012 election numbers, even though he is.

That would require some effort on his part, and as we all know, the older we get, the harder that gets.

IRS Scandal Under Democrat Shulman Is The Bipartisan Gift That Keeps On Giving

Rush Limbaugh, here:

"By the way, everybody is making a big deal out of the fact that Shulman was a Bush appointee. All right, let me deal with that. We must. Yeah, he was a Bush appointee, but he's a Democrat. Douglas Shulman is a Democrat. He gave the Democrat National Committee $250 a month before Bush appointed him to his job. Do you know what Shulman is? Shulman is one of countless Bush appointees who were put there by Bush -- Democrats -- in order to show bipartisanship.

"Remember he had that Florida aftermath -- all this acrimony, hatred and partisanship -- and Bush put a lot of Democrats in positions, and he left a lot of Democrats in positions -- as a show of good faith, in an attempt to show compassionate conservatism, in an attempt to mend fences with the Democrats. It didn't matter. It never will work that way. It never does matter. But that's what Bush was trying to do. Shulman's a Democrat. He's a lifelong Democrat. He's a Democrat partisan."

----------------------------------------------------

President George W. Bush appointed Douglas Shulman to run the IRS in November 2007 as the political wheels were coming off the Bush administration bus after the Democrats took over the US House in the November 2006 elections, and as the economic wheels began coming off the country as the housing bubble popped and banks began to fail in 2007.

Meanwhile we have now learned from Kim Strassel of The Wall Street Journal here that the general counsel of the 2008 Obama campaign and later also the general counsel in the White House, Bob Bauer, was part of a new and broad attempt by Obama's leftists to suppress conservatives precisely on their own nonprofit turf:

'Bob Bauer, general counsel for the campaign (and later general counsel for the White House), on the same day [August 21, 2008] wrote to the criminal division of the Justice Department, demanding an investigation into AIP [American Issues Project], "its officers and directors," and its "anonymous donors." Mr. Bauer claimed that the nonprofit, as a 501(c)(4), was committing a "knowing and willful violation" of election law, and wanted "action to enforce against criminal violations."

'The Bauer onslaught was a big part of a new liberal strategy to thwart the rise of conservative groups. In early August 2008, the New York Times trumpeted the creation of a left-wing group (a 501(c)4) called Accountable America. Founded by Obama supporter and liberal activist Tom Mattzie, the group—as the story explained—would start by sending "warning" letters to 10,000 GOP donors, "hoping to create a chilling effect that will dry up contributions." The letters would alert "right-wing groups to a variety of potential dangers, including legal trouble, public exposure and watchdog groups digging through their lives." As Mr. Mattzie told Mother Jones: "We're going to put them at risk."'

-----------------------------------------------------

Someone at the IRS embarked on the exact same strategy of creating a chilling effect at least from March 2010, perhaps in the wake of Citizens United in January 2010, but the strategy, and the practice, predates it.

How Shulman could not have known about it is hard to believe.

  

Old Yeller, New Yellen?

“When the time has come, am I going to support raising interest rates? You bet.” 

Janet Yellen, quoted here.

George Will's Euphemism For The Left's And Obama's Tyranny

"[P]rogressivism’s agenda — unchecked executive power."

Read all about it, here.

Former Sen. Phil Gramm Underestimates The Cost Of Obama's Debt Bomb

Sen. Phil Gramm for The Wall Street Journal, here:

Since the World War II era, the average maturity of outstanding federal debt has been about five years, and the average interest cost on a five-year Treasury note has been 5.9%. At this interest rate, the expected cost of the Obama debt burden will eventually approach some $590 billion per year in perpetuity, exceeding the current annual cost of any federal program except Social Security.

----------------------------------------------------------------------------------

As might be expected, the senator who didn't understand the consequences of the final repeal of Glass-Steagall in 1999 grossly underestimates the cost of carrying the national debt under a normalized interest rate environment.

Interest expense on the debt for fiscal 2009-2012 has averaged $404 billion annually. The debt to the penny on October 1 for each year 2009-2012 has averaged $14.1 trillion annually. Therefore the implied interest rate has been 2.87% annually. Normalized to 5.9% as he suggests, which is just a little more than double the current average rate, the debt service interest expense would have been $832 billion annually, over 40% higher than the former senator predicts down the road.

Of course, not all debt resets instantly in a rising interest rate environment, but in view of the number, size and long duration of many of the securities on the fed's balance sheet which would suffer immediate declines in net asset values, it is difficult to imagine how the fed could prevent a bond market debacle and unwind everything as gradually, and as imprudently, as it wound it up in the first place.

This is what passes for conservatism, folks.

Lois Lerner Pleads The Fifth Amendment After Trampling On The First

Seen here.

The Current Asset Allocation Of The United States

Total bond market: $38 trillion (Bloomberg/SIFMA here)

Total stock market: $21 trillion (Wilshire 5000 x 1.2)

MZM money stock:$12 trillion (StLouisFed here)

That's 17% to cash, 30% to stocks, and 53% to bonds.

With stock and bond markets at all time highs, the country really ought to be raising cash.

The 3-Month Treasury Yield Is An "Abomination"

So says John Hussman, here:

The 3-month Treasury yield now stands at a single basis point. Unwinding this abomination to restore even 2% Treasury bill rates implies a return to less than 10 cents of monetary base per dollar of nominal GDP. To do this without a balance sheet reduction would require 12 years of 6% nominal growth (which is fairly incompatible with sub-2% yields), a more extended limbo of stagnant economic growth like Japan, or significant inflation pressures – most likely in the back half of this decade. The alternative is to conduct the largest monetary tightening in the history of the world.

Normalization of yields to even 2% implies 50% balance sheet contraction [see his last graph].

-------------------------------------------------------------------------------------

The latter would mean a contraction of $1.55 trillion or so based on the current level, and that those securities would not mature on the balance sheet for their respective terms and come off naturally over time but quickly in a disorderly fashion, and therefore a bond market debacle is implied, and that to be defensive under this threat is to remain in cash, painful as that is.

Latest Tanana River, AK, Ice-Out In 97 Years Today, Surpassing 1964 Record By Hours

Story here, where they live-blogged the event linked to the official Nenana Alaska "Ice Classic" webcam.

Up there you pays you money and takes you chances. But it's only $2.50 for a ticket, on which you predict the date and time of the ice-out, which seems to occur as early as April 20 and as late as, well, today. If you're the closest, you win the kitty, this year over $318K.

Previously scientists were wont to point to seemingly earlier and earlier ice-outs on this river as evidence of the phenomenon of global warming. The long record in this location, however, has shown a cyclicality of its own which on days like today produces silence from that community. 

It was like watching paint dry overnight, but one guy did show up all alone in the parking lot to entertain everyone for a moment by mooning the cam, which is fixed on the tripod-like marker placed out in the ice every March for the event. 

Ron Fournier: Obama Is An Incompetent, Obfuscatory, Demagogic, Bungling Political Quack And Buffoon

Well, that about covers it from the former Washington Bureau Chief of the Associated Press.

Ron Fournier says all that, and more, for National Journal here.

Obama's IRS, FBI, ATF And OSHA Gang Up Vs. Family At Center Of TrueTheVote

There is must reading here today at National Review about coordinated Obama regime harassment of the family at the center of TrueTheVote.org.

America Remains In A Depression

So says James Rickards, here:

“We don’t have to worry about a recession — we are in a depression,” says James Rickards. “If you take the classic definition of a sustained, long-term downturn with economic growth below trend, then we are in the midst of a depression,” says the senior managing director of Tangent Capital and author of “Currency Wars.” Rickards doesn’t see Fed Chairman Ben Bernanke as having the solution to the economic malaise gripping the county.

Real GDP per capita through 1/1/11 bears this out (I think this gets updated through 1/1/12 this summer in the big annual GDP revision):

The peak to trough decline was 5.1% January 2007 to January 2009.

The metric remains 2.6% off peak.

Obama Remains A Small Man Without The Courage Of His Socialist Convictions

Here The New York Times matter of factly displays Obama the socialist, longing to be free like the character Bulworth ("Yeah, yeah / You can call it single-payer or Canadian way / Only socialized medicine will ever save the day! Come on now, lemme hear that dirty word - SOCIALISM!"):

In private, he has talked longingly of “going Bulworth,” a reference to a little-remembered 1998 Warren Beatty movie about a senator who risked it all to say what he really thought. While Mr. Beatty’s character had neither the power nor the platform of a president, the metaphor highlights Mr. Obama’s desire to be liberated from what he sees as the hindrances on him.

“Probably every president says that from time to time,” said David Axelrod, another longtime adviser who has heard Mr. Obama’s movie-inspired aspiration. “It’s probably cathartic just to say it. But the reality is that while you want to be truthful, you want to be straightforward, you also want to be practical about whatever you’re saying.”

Inflation Year Over Year April Is 1.06%: Bob Brinker Thinks That's Great!

Here's a news flash for you: At 1% inflation it will take about 69 years to halve the value of your money. I said halve it. To many people like Bob Brinker on his radio program "Money Talk" today it is more than acceptable that after 69 years go by your dollar will be then worth 50 cents. That's what the rule of 72 teaches, but our contemporaries couldn't care less about rules, especially involving MATH!

Back in the good old days of the gold standard when you couldn't pull a fast one on the average Joe without getting a bullet in your chest, a dollar from 1774 lost nearly NOTHING of its value by 1899, when you needed an extra 3 cents to buy what $1 bought 125 years prior.

But things have completely collapsed in this country in the 113 years since 1899. Compared to then, in 2012 you needed $28.60 to buy what your $1.03 could buy two years before the close of the 19th century. What would you choose? A loss of 3 cents over 125 years, or a loss of $27.57 over 113 years, for every dollar you own?

The founders of our country would find today's relatively very low rate of inflation an outrage and a cause for taking up arms against the government because the government of the United States is robbing its own people blind as a matter of policy.

None dare call it tyranny.

Obama's Choom Gang In 2012

Another Big Lois Lerner Lie: There Was No Surge In 501(c)(4) Applications In 2010

In addition to trying to deceive the public that the IRS under Obama has been a transparent, apolitical arm of the government by planting the question she took from the audience of an American Bar Association conference, now we learn there was no surge in tax-exempt applications from conservatives as Lois Lerner has said, undermining her excuse that aggregating them in that way was merely an administrative efficiency.

TheAtlantic.com here explains how on Friday it was revealed that the IRS itself provided data to the Inspector General which shows the actual number of such applications went down in 2010, not up as she claimed in testimony:

Lois Lerner is a snake who, sensing a threat, struck before the Inspector General's disclosure that the IRS unaccountably and exclusively targeted Tea Party and other conservative group applications, and then recoiled to the safety of a demonstrably false excuse.

Like the rest of the incompetents in Obama's administration, she can't even lie properly.

Real Compensation Under Obama Down 0.5%, Under Bush Up Almost 8%

Real Comp Under Obama Down 0.5%

Real Comp Under Bush Up Almost 8%

3 Recent Failed Banks Subsidiaries Of Troubled Lansing-Based Capitol Bancorp LTD

Story here in the Lansing State Journal.

Evidently the closure of the 13th bank to fail in 2013 in Scottsdale, Arizona was concluded on a Tuesday for prudential reasons related to the immediately previous two Capitol Bancorp-related closures last week.

Bank failures have normally occurred on Friday nights.

I wouldn't be surprised if there's more bad news to come about Capitol Bancorp LTD.

Whoops! The 13th Bank Failure Of 2013 Was On Tuesday The 14th!

Well now, that's unusual. The 13th bank failure of 2013 occurred this past Tuesday, May 14th. Usually the FDIC waits until Friday late to close a bank. Can you imagine having closed it the day before, on Monday, May 13th? Me either. I guess the Feds are having a little fun with us. Either that or the FDIC is having a baseball game with Goldman Sachs tonight.

The bank in question which failed on Tuesday was Central Arizona Bank, Scottsdale, Arizona, costing the FDIC a measly $8.6 million.

Lefty Rep. Sander Levin Calls For The Head Of IRS' Calculating Snake Lois Lerner

Quoted here:

Sander Levin, the [House Ways and Means Committee's] ranking Democrat, said the IRS and its employees 'have completely failed the American people' by 'singling out organizations for review based on their name or political views, rather than their activity.'

'All of us are angry about this on behalf of the nation,' the left-leaning Michigan congressman said.

Lois Lerner is the civil servant who heads up the IRS division in charge of evaluating charitable and other nonprofit organizations. Levin called for her head.

'Ms. Lerner should be relieved of her duties.' he said.

We must seek the truth, not political gain.'

In what [ousted acting IRS commissioner Steven] Miller called 'a prepared Q-and-A' on May 10, Lerner told an American Bar Association conference about a pending IRS Inspector General report examining the targeting of conservative groups inside the IRS's Exempt Organizations section.

That admission started the media feeding frenzy that has spiraled into a full-blown scandal. The acknowledgement that Lerner went to the event with the intention of publicly disclosing the IG report's existence raised eyebrows on the congressional panel.

The Daily Caller here emphasizes that the disclosure by Lerner was pre-planned and misrepresented as an answer to an innocent question posed by an audience member at the American Bar Association conference when in fact the question was planted:

As it turns out, it was not a spontaneous revelation. The question, said outgoing IRS Commissioner Steven Miller in testimony before the House Ways and Means Committee Friday, was planted, as part of a prepared strategy for the IRS to release this information to the public.

Profiles in Courage, or Something

Benito Curly & Barack, As A Trio They're A Crock

Oh Yeah, That'll Work: Incompetent FBI To Investigate Terrorist IRS

The guys who didn't lift a finger to notify Boston police that Tamerlan Tsarnaev was a potential threat and then committed illegal searches for his brother in Watertown but skipped the place he was hiding are going to put the heat on their own kind whose job it has become to intimidate the American people?

Might as well have the Crips investigate the Bloods.

Reuters reports here that the focus of the investigation would come down to "speech rights", the only rights liberals care about other than abortion:

Analysts said that a federal criminal prosecution of IRS employees for allegedly violating a taxpayer's speech rights - by delaying or rejecting a conservative group's legitimate claim to tax-exempt status, for example - could be unprecedented and that the offense would need to be egregious.

Why you shouldn't feel "forced" to own stocks.

"The perception that investors are 'forced' to hold stocks is driven by a growing inattention to risk. But Investors are not simply choosing between a 3.2% prospective 10-year return in stocks versus a zero return on cash. They are also choosing between an exposure to 30-50% interim losses in stocks versus an exposure to zero loss in cash. They aren’t focused on the 'risk' aspect of the tradeoff, either because they assume that downside risk has been eliminated, or because they believe that they will somehow be able to exit stocks before the tens of millions of other investors who hold an identical expectation that they can do so."

-- John Hussman, here

If QE Were Cash Going Straight To Shareholders, Markets Would Be Up Just 6%/Year

But, of course, stocks are up almost 17% in the last year, and just under 13% annually over the last three years, and QE is NOT reaching the stock markets anywhere near so efficiently as it would if it were a direct cash distribution to shareholders.

So the penetrating thinker, John Hussman, here:

[T]he suppression of risk premiums [is] the remaining and primary effect of QE. In other words, QE has not increased the value of equities. It has only increased the price, but that increase in price has no significant fundamental underpinning.

To see this, first consider cash flows. Imagine that instead of attempting to boost stock prices indirectly through quantitative easing, the Fed took the candy-land approach of literally handing the $85 billion directly to stockholders to reward them for owning stocks. How much would that direct cash distribution benefit a stock market with a $17 trillion market capitalization? Do the arithmetic. Only 0.5% a month. Yet investors have chased prices at a far more rapid pace as a result of quantitative easing. Remember, of course, that the Fed is not in fact distributing cash to shareholders.

Presently the effect of such QE would probably be even less than 0.5% per month if every point of the Wilshire5000 represents a multiple of $1.2 billion, yielding a total market cap far higher than $17 trillion. A 0.4% per month rate of QE on $20.5 trillion of total market cap comes to $82 billion a month.

Rosie May Be Right: Cash May No Longer Be Safe

David Rosenberg points out that financial repression could go on as long as 2018, here:

[T]he Fed said in its December post-meeting press release that it will not budge from its 0% policy rate until the U.S. unemployment rate drops to 6.5%. It is currently around 8%.

We have done estimates based on various assumptions and found that achieving this Holy Grail likely takes us to the opening months of 2018 or another five years of what is otherwise known as financial repression.

People think their money is safe in cash, but it isn’t.

Following on that, just compare cash in the form of Vanguard's Prime Money Market Fund with stocks in the form of Vanguard's Total Stock Market Index Fund over the last five years and you will see that while cash was relatively safe compared to stocks for the four years up to May 2012 with stocks mostly underperforming cash, since then stocks have firmly broken out, as of about May 31, 2012 (the dot on the chart grabbed from Morningstar).

The only problem is that with a Shiller p/e today of 24.26 it's an awfully rich time to be investing in stocks which have reached new all-time highs.

And the alternatives don't look very attractive either.

At this hour the gold/oil ratio stands at 15 indicating that relative to each other their prices may have normalized but both at high levels relative to the long term.

Housing prices also are at the far upper end of the long term trend prior to the bubble.

And the bond market is within 2% of its highest valuations and also remains expensive to buy.

In my humble opinion the smartest thing to buy under these conditions is any long term debt one may be carrying at a rate of interest higher than about 3.5%. To retire it one would have to deploy capital, i.e. savings, but you can hardly lock in say 6.25% for twenty or twenty-five years anywhere else more easily than by retiring a 30yr-mortgage taken out at that rate in 2007. Bonds have returned less than 5% annually over the last ten years, and one year returns have fallen below 3.5%.

Still, there is no substitute for savings.

The surest way to get a 10% return is to save one dollar of every ten earned.

What Do The FBI And The IRS Have In Common In March 2010?

How about a conspiracy against the president's political opponents?

Late March 2010 was when the FBI swatted the Hutaree militia for supposedly subversive activities, and now it turns out also when the IRS explicitly began targeting conservative groups for investigation. It was also the month ObamaCare was very controversially passed and some vandalism erupted in various places around the country.

It's clear the trigger was pulled way too early on the Hutaree militia. The government's case was still too weak at the time, and it subsequently fell apart in court, quite ignominiously for the FBI. The militia members were completely vindicated in court of conspiracy to overthrow the government. Only the charge of illegal possession of a fully automatic weapon stuck. Not even the bomb charges could be proven. The rationale for pulling the trigger early must have been as a shot across the bow of the right wing, so to speak, in the light of the vandalism across the country after ObamaCare passed. The coincidence of the raid on the Hutaree at the end of that week in March 2010 should not be discounted, especially now that it turns out that the IRS also began targeting conservatives in that same month in 2010, according to ABC News, here:

The targeting of conservatives by the IRS started earlier and was more extensive than the IRS acknowledged last week, according to a draft IRS inspector general report obtained by ABC News.

As we reported on “Good Morning America” this morning, the IRS began targeting “Tea Party or similar organizations” in March 2010. That was when the Cincinnati-based IRS unit responsible for overseeing the applications for tax exempt status starting using the phrases “Tea Party,” “patriots” and “9/12″ to search for applications warranting greater scrutiny.

The only other person I know to have called the government's response in the Hutaree affair a calculated response to ObamaCare violence at the time, other than yours truly, is Monica Crowley. But now it appears there is more to it than that, making it look more and more like Obama has been using other organs of government against the people who oppose him, with deliberation and in a coordinated manner.

And George Will, of all people, might as well be calling for Obama's impeachment.

Maybe it's time to subpoena the mayor of Chicago.

Forbes Magazine Calls Keynes A Dead White European Male

Some of us would beg to differ.

All kidding aside, Jerry Bowyer makes some great points about John Maynard Keynes, pederast, misogynist, anti-Puritan immoralist and devotee of the cult of the higher sodomy:

"Keynes was a man who exhibited what most of us would see as an almost pathological preference for exclusively male intellectual and sexual companionship specifically because of the great admiration for the male mind and disdain for the female one, who disapproved of the presence of women in his economics classes, who found women’s thinking patterns repugnant and who associated savings with feminine reticence. Is it really such an unforgiveable sin to take these facts and to surmise that his odd sexual views might be related to his odd economic views? Is it really right that anyone who suggests that they are connected should be drummed out of polite society?"

Much more here.

John Tamny's Libertarian Myopia On The Plan B Pill

John Tamny, libertarian ideologue extraordinaire, asks us to join him in complete denial about reality, here:

"[G]overnments don’t nor can they exist as our Nanny."

An awful lot of people chafing under Nanny Bloomberg in NYC would beg to differ with that statement.

Does it really need to be pointed out that the mayor of New York routinely acts like he's everyone's mother? I think Bloomberg would be just as amused as we are to learn that his own perception that he even exists is as mistaken as is our perception that he exists. The man does exist, and gets away with what he does because there are plenty of people in the world who want him to, at least in New York City. The fact of the matter is that there are plenty of people just like Bloomberg who are all too happy to accomodate those who want to be ruled. Lately these characters also want in the worst way to be president of the United States for some reason. Just because we wish these things were not so doesn't mean that they are not so. The assertions of success of five-year-plan after five-year-plan in the Soviet Union eventually bowed to reality, as must we.

This sort of denial of reality is what lies behind Tamny's analogy between teen use of alcohol and teen use of the plan B pill, which he evidently advocates not because it is necessarily good but because it is not preventable for the same reason we cannot prevent teen use of alcohol. But this is not the proper analogy. The proper analogy is between the alcohol and the sex, both of which are desirable for the sensations which they provide, which is why it is difficult to regulate them. The reality is that a profound difference exists between the alcohol and the plan B pill: the pill is designed to kill, while the beer is not.

The plan B pill provides no pleasure analogous to beer which makes us desire it, except of a psychological sort such as any medication or placebo may provide. For that reason alone it should be as easy to regulate as any other medication. It alleviates a condition like an aspirin does after too much beer, but it does so by taking a human life. The utility of it masks its gravity.

Deregulation of the plan B pill for minors stands in stark relief against the FDA's own labeling regulations: Warnings "to keep product out of children's reach" must appear on over-the-counter medications like aspirin bottles, they say. My bottle says,  for example, "Reye's syndrome: Children and teenagers who have or are recovering from chicken pox or flu-like symptoms should not use this product." My aspirin bottle even comes with a child-thwarting cap in compliance with the FDA regulations: "Many OTC medicines are sold in containers with child safety closures. Use them properly.  Remember—keep all medicines out of the sight and reach of children." Contrary to its own stated mission, the FDA will be placing the plan B pill in plain sight of them.

One would think that a libertarian, being consistent, would be calling also for the abolition of all such age restrictions on medications and on alcohol, if the plan B pill is to be allowed to minors. But that, too, is conspicuously missing from Tamny's argument, which is sort of what one would expect of the perpetual childishness of the libertarian. Johnny still can't tell the truth. 

If government really no longer has any interest in preventing young girls from murdering their unborn children, which is what the plan B pill debate is really all about, then we might as well disband police departments everywhere.

No wonder gun stores are running empty. The people know too many of us have given up just like Tamny.

Boston Herald Calls Obama And Company Biggest Bunch Of Liars Ever

Here:

"Surely there has never been a bigger bunch of liars than the crew currently occupying the White House and the now-departed secretary of state. The steady drip, drip, drip of the Benghazi scandal is now a torrent — one that cries out for a special congressional Select Committee to put it all together email by email, revelation by revelation and lie by lie. ... For eight months the lies have continued. ... There surely must be a special place in hell reserved for those who cried crocodile tears at the death of our ambassador after doing nothing to help keep him safe and everything to cover up the true nature of the attack."

The Anti-Gang-Of-Eight-Bill Lines Of The Day

"A huge amount of American social policy is directed to reducing the number of people in our country who have low levels of skills and education, and it would be bizarre to use our immigration policy to increase that number significantly. Between the temporary-worker program . . . and its increase in low-skill immigration, this bill envisions a very significant increase in that number."

-- Yuval Levin in National Review, here.

Oh well, no more bizarre than imposing new federal taxes on mortgages while we attempt to drive down interest rates to boost home ownership. The ancients called this carding wool into the fire or carrying water in a sieve, the fruitless, eternal occupations of the inhabitants of the infernal regions.

Welcome to hell.

Larry Kudlow Wants To Exploit Immigrant Labor To Help Business, Not People

Here:

The dynamic idea is that immigration significantly increases the size of the U.S. labor force, and that more workers mean more growth.

The labor force has shrunk because there are no jobs, not because there is insufficient labor. If you bring in more labor competition, all you will do is lower the wages available for such jobs as exist, and enrich the employers at the workers' expense.

Sorry pal, more workers means even less opportunity for the Americans already unemployed. The last thing this country needs is more cheap labor undercutting the people who are already here and out of work.

We're all against you, Kudlow! 

The Guaranteed 10% Investment Return

For every ten bucks you earn, save one.

Gold/Oil Ratio Falls To 14.96, Slightly Favoring Gold For First Time Since 2008

Gold is presently trading at 1436.60 in after hours trading, oil at 96.04.

We haven't had a buy gold signal like this since 2008, but it's way too early to really say we should buy gold now. A sustained ratio below 15 is required, and this is just the first week of many weeks required below 15 to say buy gold without qualification.

Still, noteworthy.

Jim Cramer Sucks: Vanguard's Total Market Index Vaults To 41.02

Up 147% since the March 2009 low of about 16.60.

Don't forget, Jim Cramer told you on NBC, the Obama network, the Monday morning after TARP was signed the previous Friday in early October 2008, to sell if you needed your money in five years.

His statement materially contributed to more panic selling and the market lows. Within weeks the market plunged even though TARP was supposed to restore confidence.  By the following April the percentage of the public claiming to own stocks had fallen a full five percentage points from the previous April before the crisis began, according to Gallup, an unprecedented decline of confidence. And the decline has continued another full five percentage points since then.

Let's look at the lows by year as reported by Vanguard, remembering that on Friday, October 3, 2008 VTSMX, a proxy for the total market, closed at 26.62, before Cramer opened his big yap:

Nov. 20, 2008 = 18.00 (a decline of 32% from October 6 when Cramer said "sell"; thanks Jim)

Mar.  9, 2009 = 16.43 (over 38% down after Cramer opened his yap; what's another 6 points, huh?)

Jul. 2, 2010 = 25.36 (this low is already back up to within less than 5% of the pre-Cramer level)

Oct. 3, 2011 = 27.16 (this low for the year firmly 2% above the pre-Cramer level)

Jan. 4, 2012 = 31.75 (this low for the year almost 20% above the pre-Cramer level).

In other words, you had all your money back in three years to the date, despite the damage Cramer caused.

But what if he had just shut up? And what if we just hadn't listened?

Looks Like An Awful Lot Of People Stupidly Took Jim Cramer's Advice In 2008

The percentage of the population claiming stock market ownership plunged dramatically between April 2008 and April 2009 by five points, and has continued to decline by more than a point per year since then as of April 2013.

Jim Cramer told everyone to sell in October 2008 on NBC's Today Show after the panic of September, saying to do so "if you needed your money in five years". Well, if you had just left your money in the market, you'd be sitting pretty right now, four and a half years later. Since March 2009 the broad market is up over 140%, and since October 2008 to March 2013 your real rate of return in the S&P500 index has been +11.88% annually.

Gallup has the story and graph here.

American investing behavior over the long haul is a contrary indicator.