Wednesday, July 31, 2013
When it comes to numbers, I have observed that Rush Limbaugh can be counted on to get something horribly wrong, and today was no exception. Today he has misrepresented the routine revision of the GDP data every five years as a revision of the numbers for only the last five years, as if it were designed specifically to make Obama look better. In actual fact, the revision of the numbers goes back not five years, but all the way back to 1929.
Truly incredible, and embarrassing in the extreme, since the truth is the revision occurs every five years, and this is the 14th revision in the series. This is why conservatives hope Rush retires soon, nevermind why liberals hope he retires. He's making us all look stupid when he carries on like this.
I have shown "five" in red below from today's Rush transcript so you can appreciate the thorough-going depth of Rush's misrepresentation of the facts:
RUSH: Here's what the Commerce Department is doing.
They have "made changes to how it calculates gross domestic product," going back five years. "At the same time, the government also went back and revised data for the past five years, to reflect more complete as well as additional statistics from a variety of sources, such as the Internal Revenue Service and the US Department of Agriculture." They have made changes to how they're calculating the gross domestic product, or economic growth, and what they're doing now is they're going back five years.
They have revised data for the past five years to, they say, "reflect a more complete, as well as additional statistics from a variety of sources, such as the IRS and the Department of Agriculture. Why do you think they decided to go back the last five years to revise data? To rewrite the horrible 4-1/2 years of Obama. There's no question. I don't know if it's fraudulent, but they're cooking the books -- and after cooking the books, after making it look as good as they can, it's 1.7% economic growth.
Here, however, is the statement from the BEA in today's official release about the routine revision every five years, which has been telegraphed to every reader of BEA GDP reports for many quarters running going back at least to last year (meaning Rush Limbaugh has never read even cursorily a single one of those GDP reports from the BEA in the interim, let alone today's):
Today, BEA released revised statistics of gross domestic product (GDP) and of other national income and product accounts (NIPAs) series from 1929 through the first quarter of 2013. Comprehensive revisions, which are carried out about every 5 years, are an important part of BEA's regular process for improving and modernizing its accounts to keep pace with the ever-changing U.S. economy.
1.7% GDP in Q2 2013 is horrible enough, but the average report for the last three quarters comes in under 1%, 0.966% to be exact. So if there is some conspiracy to make things look better than they are, whoever's in charge of that ought to be fired, stat!
This country remains in deep trouble, and there is no conspiracy to hide it.
Posted by jm at 10:25 PM
|"I redefined the Republican Party"|
1) .533 JFK/LBJ [best performance]
2) .458 Truman (72 months, 1-1-1947 to 1-1-1953)
3) .357 Clinton
4) .323 Reagan
5) .300 Carter
6) .245 Nixon/Ford
7) .214 IKE
8) .180 Obama (51 months, 1-1-2009 to 4-1-2013)
9) .173 George H. W. Bush
10) .142 George W. Bush [worst performance].
Don't forget that government spending is counted as GDP.
Don't forget that government spending is counted as GDP.
Posted by jm at 4:34 PM
First Report Of Q2 2013 GDP At 1.7%, Q1 Revised Down To 1.1% From 1.8%, Q4 2012 Down To 0.1% From 0.4%
The press release, excerpted below, from the BEA is here, the full pdf with the 14th revision of the comprehensive GDP data is here. The revisions lower in the prior two quarters combined with the low 1.7% first report in Q2 2013 should be extremely troubling to everyone. The economy is crawling.
"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 1.7 percent in the second quarter of 2013 (that is, from the first quarter to the second quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.1 percent (revised). The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 18). The "second" estimate for the second quarter, based on more complete data, will be released on August 29, 2013. The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, private inventory investment, and residential investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. The acceleration in real GDP in the second quarter primarily reflected upturns in nonresidential fixed investment and in exports, a smaller decrease in federal government spending, and an upturn in state and local government spending that were partly offset by an acceleration in imports and decelerations in private inventory investment and in PCE."
Posted by jm at 12:24 PM
Only ignoramuses or liars would call GDP of 1.7% "upbeat", so take your pick. Charity demands the former, but I'm fresh out of it.
It is now four years to the day since Ben Bernanke pointed to the need for 2.5% GDP to reduce unemployment (here):
'Bernanke's core message was similar to that he delivered last week in congressional testimony: that the recession should end soon, but that considerable risks remain -- especially relating to the labor market. It takes GDP growth of about 2.5 percent to keep the jobless rate constant, Bernanke noted. But the Fed expects growth of only about 1 percent in the last six months of the year. "So that's not enough to bring down the unemployment rate," he said.'
The Bureau of Economic Analysis comprehensive revision of GDP and related measures going back decades, available here in pdf of 83 pages, now shows the last three quarters to be truly abysmal for this point in a so-called recovery: growth of 0.1%, 1.1% and 1.7% in the last three quarters. Obama's best year to date, 2012, now comes in at a measly 2.8%, far off the new post-war average of 3.4%.
There's nothing upbeat about any of it.
So says a scathing report in The Washington Times here which says the General Accounting Office can somehow do an audit and find out that we've got 1 million overstaying visas right now, or that previously the number was 1.6 million, but the executive branch hasn't ever been able to figure it out in any year in two decades, nor has Homeland Security fulfilled its legal obligation to track exit compliance since 2004.
Maybe it's because presidents don't give a damn? Maybe it's because there's an unspoken agreement between the two parties to keep the flow coming despite what the people want? Because businesses want the cheap labor, and politicians want the extra votes? And oops, some terrorists get in, so sorry, so now we have to spy on everybody to fix that?
"The GAO said most of the overstays came by airplane, but 32 percent came through land ports of entry, and 4 percent came by sea. The average length of overstay was 2.7 years. ... The executive branch is supposed to report annually to Congress on how many people have overstayed their visas but has failed to do so for the past two decades, saying the information isn’t reliable enough. ... The total of 1 million potential overstays in the country is an improvement from two years ago, when the GAO found Homeland Security had lost track of 1.6 million people. Homeland Security went back and looked at those names and found that more than half had either actually left the country unbeknownst to the government, or had gained legal status that allowed them to remain in the U.S. Of the others, the department decided most were deemed not to be security risks and so there was no need to track them down. But 1,901 of them were deemed significant national security or public safety threats, and 266 of those were still unaccounted for as of March."
Posted by jm at 8:41 AM
Tuesday, July 30, 2013
And now a sampling of the treasure trove of innuendo* supplied by Anthony Weiner to Drudge's, er, headlines:
Weiner pulls out
Will Weiner rise again?
Can Weiner rise again?
Weiner's poll rising . . .
Weiner spotted shooting . . . video
Weiner plunges in
Weiner goes in
Cuomo flogs Weiner
Pre-mature Election: Cuomo slaps Weiner
Shumer shies away from Weiner
Poll: Weiner inside . . . margin of error
Weiner erupts after crowd confronts
NYT pulls Weiner . . . story
Shock Poll: Weiner spurts to lead
Poll: Weiner thrusts into lead
Weiner's lead peters out
Huma gathering women for Weiner
Poll: Weiner, Spitzer thrust to NYC lead
Erection Update: Weiner stays in
Erection Update: Pressure mounts on Weiner to pull out
Electile Dysfunction . . .
Poll: Weiner sags
Poll: Weiner goes soft
Dirty Dems: Weiner roasting
Weiner sticks it out
Poll: Younger women love Weiner
*Attention Rio Linda residents: an innuendo is not an Italian suppository
Monday, July 29, 2013
The pro-Hanoi Vietcong began a guerrilla campaign in the late 1950s to overthrow Diem's government. In the North, the communist government launched a land reform program, and executed between 50,000 and 172,000 people in campaigns against wealthy farmers and landowners, amid broader purges. In 1960 and 1962, the Soviet Union and North Vietnam signed treaties providing for further Soviet military support. In the South, Diem went about crushing political and religious opposition, imprisoning or executing tens of thousands.
The 44th president conveniently forgot Vietnamese history and slandered ours by linking a founder of our democracy, Thomas Jefferson, to the mass murderer Ho Chi Minh. [Vietnamese President Truong Tan] Sang had brought Obama a copy of a letter sent to President Truman from Ho in which the communist dictator spoke hopefully of cooperation with America. Obama, stopping short of yet another apology, mused about what might have been, and noted "we discussed the fact that Ho Chi Minh was actually inspired by the U.S. Declaration of Independence and Constitution, and the words of Thomas Jefferson."
Posted by jm at 9:53 PM
|Case Shiller Home Price Index @multpl.com|
Joel Kotkin reflects on the still expensive housing market here:
Ownership levels continue to drop, most notably for minorities, particularly African Americans. Last year, according to the Harvard study, the number of renters in the U.S. rose by a million, accompanied by a net loss of 161,000 homeowners.
This is bad news not only for middle-income Americans but even more so for the poor and renters. The number of renters now paying upward of 50% of their income for housing has risen by 2.5 million since the recession and 6.7 million over the decade. Roughly one in four renters, notes Harvard, are now in this perilous situation. The number of poor renters is growing, but the supply of new affordable housing has dropped over the past year. ...
According to the Center for Housing Policy and National Housing Conference, 39% of working households in the Los Angeles metropolitan area spend more than half their income on housing, 35% in the San Francisco metro area and 31% in the New York area. All of these figures are much higher than the national rate of 24%, which itself is far from tolerable.
Kotkin nowhere mentions that currently expensive housing is explicit Federal Reserve policy. ZIRP and QE are specifically designed to reduce long term interest rates to make home mortgages affordable. Instead those policies have re-inflated housing prices to their historical highs before the bubble and reversed the downward trajectory of price resetting those prices were on.
In June 2013 dollars, the Case Shiller Home Price Index reached its low point after the bubble at 126.30 for the quarter ended March 31, 2012. That level hadn't been seen since June 1998. But from the long term perspective prices should have reset to 120 on the index or lower as they have in the past. This expectation holds even more considering the excesses of the bubble which needed to be wiped out, but haven't been.
The Fed has done nothing but interfere with the free market in housing, creating the bubble in the first place and preventing its deflation now. To fix the problem, the Fed needs at a minimum to focus solely on price stability by maintaining a strong dollar. Markets will take care of themselves after that.
Posted by jm at 11:43 AM
Sunday, July 28, 2013
|Occupy Wall Street: The Mirror Image Of Congress|
'There’s a phrase in journalism-speak called “burying the lede,” which Leibovich appears to do by waiting until Page 330 to cite this arresting figure (previously reported by The Atlantic): in 1974, 3 percent of retiring members of Congress became lobbyists. “Now 50 percent of senators and 42 percent of congressmen do.” No one goes home anymore. Cincinnatus, call your office. ... By the end, one is left thinking that our country would be so much better off if, after putting in their years of “public service,” all these people would just go home. Or just away. But then what would we do for entertainment, being left with a mere Parliament of Bores?'
When the US Congress and the executive conspired way back in the 1920s to restrict representation to 435 in the US House to repress the growing political influence of the grown large immigrant population, mostly from Europe, which they also evidently wished "would just go home" or "away", it merely pushed on a string. So that today instead of worse representation we have representation of the worst sort: lobbyists whom we cannot dislodge at election time, and the 435 people who depend on them for campaign financing whom we cannot dislodge, either.
Today we should have a US House of Representatives of 10,490. Instead we had in 2012 12,411 registered lobbyists, and the 435 mopes the lobbyists, and we, routinely return to Washington, DC.
Representation is messy, but we desperately need more of it as the founders intended, not less.
Posted by jm at 8:38 PM
Peggy Noonan here:
House investigators this week said they have in fact received less than 1% of the documents they have been asking for from the agency. The IRS itself at one point identified a whopping and rather intimidating 65 million documents that might be relevant to the tea-party scandal. To date—almost three months since the scandal became public—the House Ways and Means Committee says the IRS has turned over only 13,000 pages. And some of them were duplicates. It's gone beyond what staff aides were, last month, calling "slow walking." Chairman Dave Camp said in a statement the IRS's actions look "a lot like obstruction." One aide said: "Patience is wearing thin."
1. JFK/LBJ -6.6%
2. Truman -5.0%
3. Clinton +1.3%
4. Obama +1.5% (to date)
5. Carter +1.6%
6. Bush2 +1.8%
7. Nixon/Ford +4.0%
8. IKE +4.1%
9. Bush1 +6.9%
10. Reagan +8.6%
Inequality of market income decreased most under Kennedy/Johnson and increased most under Reagan. The measure is before taxes and transfers, however. The Organization for Economic Cooperation and Development figures after taxes and transfers for certain periods may be observed here. See the helpful discussion by Tim Worstall, here, including this:
"[E]ven in the post-tax and post-benefit numbers the US is still an outlier in the statistical methods used. In looking at inequality, poverty, in the US we include the cash that poor people are given to alleviate their poverty. But we do not include the things that people are given in kind: the Medicaid, SNAP, Section 8 and so on. It’s possible (I’m not sure I’m afraid) that we don’t include the EITC either. We certainly don’t in the poverty statistics but might in the inequality. All of the other countries do include the effects of such policies. Largely because they don’t offer benefits in kind they just give the poor more money and tell them to buy it themselves. This obviously turns up in figures of how much money the poor have."
The president might want to consider that Bill Clinton did a better job of reducing income inequality than he has. But, then again, Bill Clinton did a better job than Obama in most everything, and ranks number two behind Truman overall for the best economy in the post-war.
Friday, July 26, 2013
Robert Skidelsky in The Economist here, referencing John Kay in the Financial Times:
"All of this led John Kay to wonder why so much attention was given to unconventional monetary policies ‘with no clear explanation of how they might be expected to work and little evidence of effectiveness?’ His answer: they are helpful to the financial services and those who work in them."
QE is medicine for sick banks, not sick economies.
Posted by jm at 3:12 PM
Bob Pisani reports here:
"Cash set a record in the first quarter of 2013 on an absolute basis: $1.093 trillion in the S&P 500. It has set a record for 18 of the last 20 quarters."
Yeah, but nonfinancial corporate business sector bond liabilities have climbed, too, from $3.7 trillion in 2007 to $5.9 trillion in the latest report.
Financial business sector bond liabilities have declined from $6.2 trillion to $4.9 trillion over the same period.
Posted by jm at 10:40 AM
Thursday, July 25, 2013
The more I think about the first time claims for unemployment data this year, I think it's very possible Ben Bernanke got a little ahead of himself on May 22nd with his admittedly mere hint of tapering, thinking there was real improvement in the unemployment picture. And there seemed to be.
In the run up to his May 22nd comments, there had been a string of 13 weeks averaging 320,538 first time claims per week, which translates into an annualized level of 16.6 million, something this country hasn't seen since 2006-2007 under George W. Bush, two years which were the best this country had seen the whole decade, and remain so. In other words, Ben Bernanke may have felt free to hint at tapering bond purchases later in the year if the numbers over the three months which he had just witnessed carried forward through the rest of the year. Entirely understandable.
Everybody went nuts over the tapering remark, which was really just a response to Rep. Brady's question. But Ben must have been seeing what careful observers were seeing: some of the best first time claims data of Obama's presidency. That said, the number of careful observers are few, and most people do not think much about the not-seasonally-adjusted numbers, let alone the long term comparisons.
Things have deteriorated since then, of course, but in the late winter and early spring, first time claims for unemployment were in fact looking much better.
Posted by jm at 10:04 AM
So says Robbert van Batenburg, quoted here:
"People underestimate the extent to which quantitative easing has benefited the S&P," said Robbert van Batenburg, director of market strategy at brokerage Newedge USA LLC in New York. He called the effect akin to "an athlete on steroids." The Fed's effect on corporate earnings is difficult to quantify. Van Batenburg estimates that corporate savings on interest expense after rates fell to historic lows has accounted for about 47 percent of S&P 500 earnings growth since 2009. At the end of 2009, quarterly earnings per share for the S&P 500 were less than $20, and companies in the index paid about $4 a share in interest, van Batenburg said. Now the S&P 500 is generating about $26.70 a share in quarterly earnings but pays just $1.50 a share in interest.
Jeffrey Snider, here:
What feels like a still-recovering recovery to so many looks far different in comparison to the real recession that was already in full swing in 2008 – the fact that so many companies and so much of the economy is running below 2008 rates is very revealing and startling in its implication. It should be even more remarkable aside the fact that QE 3 & 4 are right now being pushed into “markets”, and that a renewed housing bubble is building next to myriad other asset bubbles.
There is no hiding the fact that the global economy, including the US, is in full retreat. Investors and observers may choose to ignore it, but that just makes their game of waiting for recovery all the more curious.
Wednesday, July 24, 2013
As reported here:
While HAMP has helped about 865,100 homeowners avoid foreclosure over the lifetime of the program through permanent loan modifications, more than 306,000 homeowners had redefaulted on their modified mortgages as of the end of April, the report stated.
"Horne was the administration's third unanimous defeat in a property rights case in 18 months."
It's not just the Fifth Amendment which has been under attack by the Obama regime, either. The Supremes also handed down two unanimous defeats in First and Fourth Amendment cases in 2012.
America, are you listening? Your president hates your constitution.
Tuesday, July 23, 2013
Quoted here May 22nd:
“If we see continued improvement [in the labor market] and we have confidence that that is going to be sustained, then we could in -- in the next few meetings -- we could take a step down in our pace of purchases.”
The rate was 3.51% on May 16th. On July 18th it's 4.37%.
Posted by jm at 10:02 PM
|pappastax.com April 2009|
Peggy Noonan, last week here:
The IRS scandal was connected this week not just to the Washington office—that had been established—but to the office of the chief counsel. That is a bombshell ... Mr. [Carter] Hull told House investigators that at some point in the winter of 2010-11, Ms. [Lois] Lerner's senior adviser, whose name is withheld in the publicly released partial interview transcript, told him the applications would require further review:
Q: "Did [the senior adviser to Ms. Lerner] indicate to you whether she agreed with your recommendations?"
A: "She did not say whether she agreed or not. She said it should go to chief counsel."
Q: "The IRS chief counsel?"
A: "The IRS chief counsel."
The IRS chief counsel is named William Wilkins. And again, he is one of only two Obama political appointees in the IRS.
Monday, July 22, 2013
John Kass, Greek-American, channels Aristotle here in the Chicago Tribune:
Obama pronounced the killing as racially motivated, though he didn't use the words. He didn't have to, such is his prowess. It was so smooth that few noticed. He put the killing in a racial context, and that was enough. ... Race was established by the president of the United States, and by other political and media actors. It's a cynical business, about money and power, about keeping divisions between American tribes. There are the black tribes that see Martin in the context of the old civil rights struggles and leverage, and white tribes that see Martin being used to pummel them with racial guilt. ... Yet none of this tribalism has anything to do with what happened the night Martin was killed. Politicians don't worry about that. They're experts at the game of tribes, and a tribal America is what nourishes them.
"The tyrant should endeavor that the whole community should mutually accuse and come to blows with each other." -- Aristotle, Politics V
Sunday, July 21, 2013
Currency in circulation under George W. Bush increased nearly 51% between November 2000 and November 2008, according to the Federal Reserve, here. Over the course of his 96 months in office, that's a factor of .529. The measure of currency under Bush went from $571 billion to $861 billion.
Currency in circulation under Barack Obama increased nearly 39% from November 2008 to July 17, 2013. Over the course of his 56 months in office, that's a factor of .696. The measure of currency under Obama so far has gone from $861 billion to $1,196 billion.
That means the increase in the currency in circulation under Obama is 31.6% higher than it was under George Bush.
Currency in circulation includes coin and currency held in vaults of banks in addition to coin and currency held by the public.
Posted by jm at 8:50 PM
|weekly change in $billions|
|June 3, 2013 to date|
Did you know that the largest negative weekly change ever in M1 money stock in nominal terms occurred just recently on June 10th?
$109.4 billion was pulled from M1 the week ending June 10, 2013, which is money in circulation and the money on deposit in your checking account.
The swings in M1 money stock in June have been as dramatic as the swings were when America was attacked on 911.
Here are the figures from September 2001:
9-10-2001 + $001.2 billion
9-17-2001 + $124.5 billion
9-24-2001 - $086.1 billion
10-1-2001 - $034.1 billion
But look at what just happened in June:
6-03-2013 + $085.0 billion
6-10-2013 - $109.4 billion
6-17-2013 - $014.4 billion
And a measly $10 billion net has been added to M1 in the interim to July 8th.
So what terrible cataclysmic, earth shattering, civilizationally-threatening event occurred the week ending June 10th, 2013?
Actually, as a percentage of total M1 the 911 addition to M1 represented nearly 10% of total M1 on the same date. In June 2013 the decline in M1 wasn't even 4.5% of M1.
Still, it's a disturbing indication of turbulence at the most basic level of the economy, the money in your pocket and in your checking account.
Posted by jm at 6:48 PM
Posted by jm at 12:44 PM
Manufacturing jobs remain down 8.3% since Obama was first elected in November 2008, nearly five years ago.
The decline under almost eight years of George W. Bush was a whopping 22.7% (this data series begins in April 2001).
Recovery of manufacturing jobs under Obama began to flat-line in February 2012, over a year and a half ago.
|Don't tell Steve Clemons U6 has been measured since 1994|
Except he doesn't really discover it until the commenters clue him in to the fact.
Here's the relevant snip assuming Leo Hindery Jr. must be a god for discovering the truth about the real extent of unemployment:
"In other words, BLS reports that official unemployment stayed flat at 7.6% while Hindery's more extensive figures show that real unemployment increased by 0.4% to 14.3%."
Then two commenters, one of which is "dormilon" below, break the bad news to Clemons in the comments section:
"I was equally confused by what appears to be the author's lack of familiarity with the 'alternative measures for labor utilization.' The BLS doesn't just issue one set of unemployment estimates (U-3) as implied above (For decades, the only employment numbers that anyone would discuss were those issued by the Bureau of Labor Statistics (BLS).), it issues an array of estimates that are disseminated with varying degrees of acceptance or familiarity. And, yes, that U-6 number should definitely be much better understood and publicized."
Commenter "Dcoronata" then goes in for the kill:
"Once you start an article the way you did, sophisticated readers already know not to bother. If the rules have not changed, then there is no duplicity, just bad journalists."
Clemons took it personally:
"Your comment borders on ad hominem."
No, I'd say it is most definitely ad hominem. Face it, Steve, you're a dumb shit, and a liberal who hasn't cared about the biggest story of our time until someone you esteem told you to care about it. There is no "Deception in Counting the Unemployed" as Steve's headline indicates, just bipartisan indifference about it.
Saturday, July 20, 2013
. . . and the Fed just happens to have $1.2 trillion of MBS on its balance sheet today, about a third of which the Fed has acquired in the last nine months. The Fed currently owns over 9% of the face value of all mortgage principal owed. The decline in total mortgage debt outstanding since 2009 is also just over 9%. Hm.
Posted by jm at 9:09 AM
The latest report is here. There is no evidence of a recovery in driving despite a recovery in auto sales to 15.89 million units annualized in June. Average annual light vehicle sales had remained well above 16 million units annualized for a decade, from 1997 to 2007.
If you don't have a job to drive to, you don't drive.
Posted by jm at 7:23 AM
Gold is 1292.90 and WTI crude 108.05 (nearly at parity with Brent!). Gold remains a technical buy with the ratio 20% below 15, but that may be an illusion with the increase in the price of oil on unrest in Egypt and Syria.
Posted by jm at 6:22 AM
Friday, July 19, 2013
Look for yourself, here.
$1.2 trillion is the "remaining principal balance of the underlying mortgages". That's one third of the total balance sheet.
Acquired at the pace of $40 billion a month, it would take the Fed 2.5 years to acquire all that crappy mortgage paper, but of course the latest iteration of MBS acquisition at $40 billion a month has been going on only since last September. That means just $440 billion of the $1,200 billion has been acquired recently.
There's a whole lotta crummy paper out there, folks. And Ben Bernanke and the US Federal Reserve Bank have been buying it . . . just for you!
Posted by jm at 9:46 PM
Quantitative easing is for the banks and nothing else, despite the long-standing professorial deflections to the contrary by Ben Bernanke.
Oh, he can say it's to help housing recover, or employment, or whatever else happens to be languishing depending on the exigencies of the moment. But God forbid Ben should say what everyone ought to have understood from the beginning, that there's a huge pile of non-performing loans on the banks' books. Ben's various iterations of QE have kept him busy systematically transfering to the books of the Federal Reserve Bank of the United States significant tranches of those bad loans, and it won't be until those transfers end decisively that you can be sure that the banks are finally in the clear.
Meanwhile, have you considered that when Keynes said markets can stay irrational longer than you can remain solvent that Keynes never imagined how un-free markets were to become in the Western world? Five years out from the troubles of 2008, that the purchases of MBS continue apace should at once frighten everyone and galvanize support to reform the banking system and prioritize the commitment of its central bank to the integrity of the US dollar.
The voices warning us are out there. You just won't hear them on your television, which you should turn off at a minimum, and preferably execute loudly in your backyard with a shotgun, or drop on your driveway from a second story window. Please send film.
Consider this from Manuel Hinds, former finance minister of El Salvador and 2010 winner of the Hayek Prize, here:
"[H]igher interest rates would burst the bubbles in asset prices that monetary printing has created, bringing to the surface the losses that banks have accumulated by years of lending to unsustainable activities. Thus, the Fed is between a rock and a hard place. If it does not increase the rates of interest, excess demand will explode leading to high inflation, large current account deficits or both. If it increases interest rates, the activities that are profitable only with very low interest rates will collapse, including the equity and commodity markets. This would expose the banks to very large losses, which would trigger a serious crisis because the banks have accumulated bad assets for over a decade now and have cleansed them only partially because they trust that the government will save them without having to take painful write-offs. As a snowball going down a slope, the problem gets worse with time. ... The coming breakdown is likely to be much worse than that of 2008."
Or this from Joseph Calhoun of Alhambra Investment Partners, here, who doesn't consider that QE is so negative for present GDP growth because it is "financing" past growth now ensconced as bad debt:
"There are any number of reasons why QE might be negatively impacting growth, from high oil prices to the diversion of capital to speculative purposes to its effects through exchange rates on other countries with which we trade. I do not claim to know the full extent of the effects of QE but most importantly, neither does Ben Bernanke. That being the case and considering the evidence to date, why does Bernanke persist in pursuing the policy? Is there some other reason for the policy other than the stated one of spurring economic growth? If so, Bernanke sure isn't telling anyone what it is."
Or this from the ever-wise John Hussman, here:
"Meanwhile, with a monetary base of $3.27 trillion and an estimated duration of at least 7 years on present Fed holdings, the recent 100 basis point move in bond yields has created a loss of over $200 billion for the Fed. The Fed reports capital of only $55 billion on its consolidated balance sheet. but then, just like major banks, the Fed does not mark its assets to market. Most likely, the Fed is now technically insolvent. Moreover, the Fed is levered more than 59-to-1 even against its stated capital. The benefits of QE seem vastly overpriced and excessively trusted, particularly in an environment where the internal debate even within the Fed is becoming more pointed. Two members already want the Fed to taper in order “to prevent the potential negative consequences of the program from exceeding its anticipated benefits.” ... We don’t observe any material economic impact from quantitative easing, and continue to believe that the key event in the recent credit crisis was the FASB move to abandon the requirement for mark-to-market accounting among financial institutions (the Fed’s zero interest policy has merely allowed banks to recapitalize themselves on the backs of savers and the elderly on fixed incomes)."
QE is financial repression of the American taxpayer for the benefit of institutions which should be wound down and broken up. How long are you going to put up with it? Can you last another five years?
Thursday, July 18, 2013
It's one key to maintaining their power:
"What has been already mentioned is as conducive as anything can be to preserve a tyranny; namely, to . . . endeavour that the whole community should mutually accuse and come to blows with each other, friend with friend, the commons with the nobles, and the rich with each other."
-- Aristotle, On Tyranny
Wednesday, July 17, 2013
A third federal appeals court ruled Wednesday that President Obama violated the Constitution last year when he made recess appointments to the National Labor Relations Board, adding more weight to the case as it goes before the Supreme Court in the justices’ next session.
From Boston.com, here:
Ryan is hardly a newcomer to the issue. In 1994, when he worked with Kemp, he wrote a 4,000-word rebuttal to proponents of Proposition 187, the California ballot initiative that denied benefits to immigrants in the country illegally. He backed the immigration overhaul bill crafted by McCain and the late Sen. Edward M. Kennedy, D-Mass., that nearly became law in 2007.
The demographic problem of Baby Boomer retirement didn't yet exist in 1994 as it does now but Ryan was still in favor of cheap illegal labor for American business at the expense of legal citizen labor then. Paul Ryan is not a conservative and never has been. If he were, he would stand for the rule of law against the ineluctable fact of illegality.
That betrayal of the rule of law, now enshrined in the Senate immigration bill which gives legal status to law-breakers, is no different from Obama's selective enforcement of American law, which means his deliberate breaking of the law himself, from deportation rules to his own ObamaCare law and the now defunct DOMA.
They are all, Republican and Democrat alike, unfit to serve in their present positions, let alone in any future position. They are traitors to their own country and what it stood for but no longer does.
Tuesday, July 16, 2013
Republican Sens. Saxby Chambliss (Ga.), Tom Coburn (Okla.), Susan Collins (Maine), Jeff Flake (Ariz.), Lindsey Graham (S.C.), Johnny Isakson (Ga.), John McCain (Ariz.), Rob Portman (Ohio), Roger Wicker (Miss.), Orrin Hatch (Utah), Bob Corker (Tenn.) and Lisa Murkowski (Alaska) voted with Democrats to confirm Cordray. ... Sen. Mike Crapo (R-Idaho), ranking member on the Senate Banking Committee ... pointed out that Republicans want to replace Cordray's director position with a bipartisan “board of directors with staggered terms.” He also expressed concern over recent reports that the bureau is conducting “unprecedented data collection.” “The CFPB [Consumer Protection Financial Bureau] is collecting credit card data, bank account data, mortgage data and student loan data,” Crapo said ahead of the vote. “This ultimately allows the CFPB to monitor a consumer’s monthly spending habits.”
More here, if you need to puke.
Sen. Harry Reid wins.
. . . because Trayvon Martin picked a fight with what he thought was a homosexual rapist.
Posted by jm at 2:57 PM
Posted by jm at 2:26 PM
Monday, July 15, 2013
|We're ALL Creepy Ass Crackers To Them|
The Baltimore Sun reports here:
"They were just yelling and calling him names as they ran after him, but once they were hitting him and after that they started yelling, 'This is for Trayvon, [expletive],'" said Dudley, who heard the chant repeated multiple times.
Posted by jm at 9:39 PM
So says Molly Ball, here:
But the ironic thing is that, by virtue of its very do-nothingness, the do-nothing Congress got a big thing done. First, in the fiscal-cliff deal struck around the new year, wealthy Americans’ income-tax rates went up, a policy change long sought by the president and his party. Then, in March, the budget ax known as sequestration fell, chopping $1 trillion from federal spending over the next decade—a cherished goal for fiscal conservatives. More revenue plus less spending equals a lower deficit. A much lower one. Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities, estimates that these changes, combined with the domestic-spending caps imposed by the 2011 debt-ceiling deal (and counting savings on interest), will reduce the deficit by $3.99 trillion through 2023. That’s enough to stabilize the U.S. debt-to-GDP ratio, meaning that the debt will no longer be growing faster than the U.S. economy. In short, the deficit has been tamed.
She doesn't mention that both ideas were Obama's. Funny, Obama doesn't mention it either.
So says Jerry Shenk for PennLive.com here:
Reacting to Democratic overreach, American voters chose gridlock over “productivity” by awarding Republicans the House of Representatives following the 2010 mid-term tsunami and preserving their majority in 2012. House Republicans are doing the people’s business by obstructing the ambitions of President Obama and Washington Democrats.
|"barking up the wrong tree"|
So reported Bloomberg a week ago, here:
In a June 1-4 Gallup poll, 43 percent of Americans named either the economy or employment and jobs as the No. 1 issue facing the U.S., while 6 percent said immigration topped their list of concerns.
Sunday, July 14, 2013
And the famous Robert Shiller really doesn't care, here:
Consider Switzerland, which by several accounts has had one of the lowest rates of homeownership in the developed world. In 2010, only 36.8 percent of Swiss homes housed an owner-occupant; in the United States that same year, the rate was 66.5 percent. Yet Switzerland is doing just fine, with a gross domestic product that is 4 percent higher, per capita, than that of the United States, according to 2011 figures produced at the University of Pennsylvania. It’s not that the Swiss inherently prefer renting. A 1996 survey asked a sample of Swiss whether, if they could freely choose, they would rather be homeowners or renters. Eighty-three percent said homeowners.
To hell with what people want, right? Just keep property values so high only the likes of David Niven, William F. Buckley, Jr. and Tina Turner can afford to own there.
Saturday, July 13, 2013
The price of gasoline today is 147% higher than it was eleven years ago, but the CPI is up just 29.15%, May on May, 2002 to 2013 (latest available figures). So gasoline in Grand Rapids in July 2002 at $1.51 per gallon adjusted for inflation measured on "all items" arguably should be just $2.13/gallon today.
Instead gasoline's cheapest price today in GR is $3.73/gallon, 147% higher than in 2002.
What, oil companies weren't making a profit eleven years ago?