Fox Business' broad inflation report contained an error

 Here's Megan Henney, September 29th :

An inflation measure closely watched by the Federal Reserve ticked higher in August as steep prices continue to squeeze millions of U.S. households.

The personal consumption expenditures (PCE) index showed that consumer prices rose 0.4% from the previous month, according to the Labor Department. On an annual basis, prices climbed 3.5% — up from 3.3% recorded the previous month, underscoring the challenge of taming high inflation.

She's referring to PCEPI. 

That measure isn't up from 3.3% the previous month. It's up from 3.4%, and 3.2% the month before that.

Jeff Cox at CNBC got it right, same day, as usual:

Including food and energy, headline PCE increased 0.4% on the month and 3.5% from a year ago. Headline inflation has been creeping higher in recent months after hitting 3.2% in June.

Forbes also had it right, because it actually checked the most recent data, which Fox evidently did not:

The most recent PCE price index data was released on September 29, 2023, covering the month of August. The headline August PCE inflation figure was +3.5% year over year, which was up slightly from the revised annual rate of +3.4% in July.

 

 

 

Libertarianism breaks a few eggs

STUDY: Cannabis Overuse Linked To Heart Failure And Heart Attacks...

Joe Biden is obviously not in charge: Calls Xi Jinping what he really is, a dictator, one day after his Secretary of State tries to soothe relations with Taiwan remarks

 Biden calls Xi 'dictator,' fueling Chinese anger... 

Blinken Tells Xi Jinping U.S. Does Not Support Taiwanese Independence, After Meeting To Quell Tension

Dan Bongino, who reportedly had the most successful Saturday cable show, is canceled at Fox in contract dispute after 10-year run

 Story.

Social Security: As usual, the people want a pony, daddy

81% support taxing income beyond $147k to shore up the projected Social Security trust fund shortfall, Republicans by 79% and Democrats by 88%.

81% also support cutting benefits for those same earners whose Social Security taxes would soar.

Meanwhile, 64% support increasing the minimum monthly benefit from $951 to $1,341.

More.

 

Equity used to mean everybody had a reasonable expectation of receiving what they put into the system, but that stopped being true for high income earners in the 1990s.

Last year, a person making $200k taxed at the current 6.2% rate for 30 years would have to live 10 years beyond full retirement age of 67 to recoup all his contributions at a 2021 maximum benefit level of $3,113 per month, or to age 77.

Life expectancy in the US fell to 76.6 years in 2021. 

Bathroom transmission of COVID-19

From: Preventing Fecal-Oral And Fecal-Aerosol Transmission Of Covid-19

Though the main way Covid-19 spreads will always be from person to person, exposure to infectious waste and sewage has a part to play in starting outbreaks, especially in apartment buildings or schools where many people share close quarters at regular intervals of the day. ...

Fecal-aerosol transmission, according to a research paper published in Annals of Internal Medicine in December 2020, was suspected to be the cause of a Covid-19 outbreak in a high-rise apartment building in Guangzhou, China that infected at least nine people across three separate households. ...

Almost all of the environmental samples that came back positive were from the master bathrooms, giving the researchers reason to believe that the drainage pipes connecting the three units were to blame.

Unaffordable No Health Care Act: Health insurance premium increases pre-Obamacare 10%, post-Obamacare 60%

Yes, It Was The 'Affordable' Care Act That Increased Premiums:

It turns out that across the board, for all ages and family sizes, for HMO, PPO, and POS plans, premium increases averaged about 60 percent from 2013, the last year before ACA reforms took effect, to 2017. In same length of time preceding that, all groups experienced premium increases of less than 10 percent, and most age groups actually experienced premium decreases, on average.

Pure insanity: 20% of total global bond market pays negative interest

Opinion: We haven’t seen interest rates this low since before Hammurabi, so what bonds should you buy?:

 

Some $13 trillion in bonds are paying negative interest rates, which means bondholders actually pay for the privilege of holding an issuer’s bonds. That represents more than 20% of a total global bond market value of $55 trillion, according to Bloomberg. Other bonds are paying positive rates so low they carry a real (after inflation) negative yield as well. ... Some civilizations, like the early Roman Catholic Church and Islam, were opposed to charging interest, but negative rates just didn’t happen, as far as Sylla knows, until the modern era. Now 14 European countries, including France, Germany, the Netherlands, and Spain, have negative interest rates on their two-year bonds.

 

Marijuana legalization is the spearhead of America's anti-conservative libertarian tide and ultimately of America's decline

Eventually there will be no place left to hide from marijuana users in America. And they are going to be the end of America as we once knew it. Marijuana legalization is coming to every state in the country, for the reason that a shared version of libertarianism is now America's dominant ideology, irrespective of political party. The consequences of extreme individualism are about to assert themselves like never before. Formerly, self-control and self-denial as practised by countless millions of America's original inhabitants and their descendants had been key to making America the great country which it became. Those values made possible the hard work and savings which were the necessary predicates of that greatness. But all that is in the rear view mirror now. As Baby Boomers squandered  the achievements of their parents, their children have learned from them only too well and have drunk deep from their well of narcissism. People like this will never make the country great like it was. A country full of laid back mellow folks  will never work hard and save, nor even acknowledge its need to do so. It is not a coincidence that the most hated men in America in 2012 and 2016 didn't even drink.

Marijuana Won The Midterm Elections :

Michigan voters approved a ballot measure making their state the first in the midwest to legalize cannabis. Missouri approved an initiative to allow medical marijuana, as did Utah. Voters in several Ohio cities approved local marijuana decriminalization measures, and a number of Wisconsin counties and cities strongly approved nonbinding ballot questions calling for cannabis reform. While North Dakota's long-shot marijuana legalization measure failed, cannabis also scored a number of big victories when it came to the results of candidate races. ... In Illinois, Democrat J.B. Pritzker won the governor's race after making marijuana legalization a centerpiece of his campaign. ... Minnesota Gov.-elect Tim Walz (D) wants to "replace the current failed policy with one that creates tax revenue, grows jobs, builds opportunities for Minnesotans, protects Minnesota kids, and trusts adults to make personal decisions based on their personal freedoms." ... In New Mexico, Michelle Lujan Grisham (D), who won the governor's race, said legalizing marijuana will bring “hundreds of millions of dollars to New Mexico’s economy." In New York, while easily reelected Gov Andrew Cuomo (D) had previously expressed opposition to legalization, he more recently empaneled a working group to draft legislation to end cannabis prohibition that the legislature can consider in 2019, a prospect whose chances just got a lot better in light of the fact that Democrats took control of the state's Senate. In Wisconsin, Democrat Tony Evers supports decriminalizing marijuana and allowing medical cannabis, and says he wants to put a full marijuana legalization question before voters to decide. He ousted incumbent Gov. Scott Walker (R) on Tuesday. ... Last month, a national Gallup survey found that 66 percent of Americans support legalizing marijuana, including a clear majority of Republicans.

 

I've always hated Forbes Magazine, but now I really hate it

Story here and here.

Papa John was set up, and Forbes was only too happy to help destroy him.

Brian Domitrovic and Larry Kudlow aren't the first to tell you the income tax made big government possible

Their book, JFK and the Reagan Revolution, released in September 2016, makes the point well, as does this article in Forbes:

And sure enough, with the income tax presenting itself as patriotically taxing the rich—at times with utterly fictional 91 and 94% top rates, from the 1940s until the 1960s, as Larry Kudlow and I marvel at in our recent book, JFK and the Reagan Revolution—government was able to grow where government under the tariff could not. The income tax supervised the rise of the federal government to well over a fifth of national output—from 3% during the era of the tariff. ... The dishonesty at the heart of the income tax was the key that unlocked the financing of big government, by the little guy no less.

We've been making the same point, more or less, since at least 2011, and especially in March 2016 here:

[Mark Levin's] tariff rant this evening ignores that the America of his precious founders was a tariff regime until the dreaded income tax of 1913.

The America of the founders was also a limited government for that reason until that very day.

But open wide the avenue for revenue, and you open the maw of the Leviathan and crawl into it.

Nathan Lewis thinks pretty highly of Judy Shelton's book on the gold standard

Here:

Today, the Federal Reserve, with the blessing of Congress, large banks, and many others, has embarked on an open-ended policy of printing money on a daily basis, basically to fund the Federal government's budget deficit although no one may speak such things in name. These situations tend to end badly, and are soon followed -- as was the case with the United States in 1789, immediately after the Continental Dollar hyperinflation of the 1780s -- by a rigorous gold standard system, more along the lines of the other four proposals that Shelton identifies.

The biggest gold standard advocates are those who lived through a hyperinflation. It is easy to forget that the hard money advocates of 1789 -- Hamilton, Jefferson, et. al -- were actually the same people that were printing money to finance Federal budget deficits in the 1780s, in the guise of the Continental Congress. Oops. More recently, people like Ludwig von Mises, who lived through the Austrian hyperinflation of the 1920s, became the biggest gold standard advocates of the 20th century.

Larry Kudlow likes her a lot, too, and had her on his show yesterday. You can listen to the podcast about an hour and twenty in at wabcradio.com: Go to the Saturday schedule and scroll down for the podcast.

The election in book sales: Trump 199,000 v. Hillary 2,912

Forbes reported Trump's sales numbers here.

The New York Times reports Hillary's sales numbers here (where there's no mention of Trump's).

h/t Chris

Zogby poll on September 20th had Trump out front with 33%

Reported here at Forbes:

Trump 33%

Carson 13%

Bush 9%

Fiorina 7%

Cruz 5%

Rubio 4%

Paul 4%

Kasich 4%

Christie 3%

Walker 2%

Huckabee 2%

We don't have free trade WITHIN the United States: Companies in just 13 states get over 90% of $110 billion in government subsidies since the 1970s

We're talking over $100 billion of taxpayer money favoring companies, in descending order, in New York way ahead in first, then Washington, Louisiana, and Michigan rounding out the top four, Kentucky, Oregon, Indiana, Texas, New Jersey, Missouri, Pennsylvania, Ohio and New Mexico over every other company in those states and throughout the states.

View the report here, and the state by state map here. For a shorter period involving additional federal subsidies adding another $68 billion to the above total see this report at the same site.

Forbes Magazine is not amused, here:

According to Good Jobs First, there are 514 economic development programs in the 50 states and the District of Columbia. More than 245,000 awards have been granted under those programs. I ask again, where is the outrage? The system is antithetical to the idea of free markets. A quarter of a million times, state governments decided what is best for producers and consumers. That should make us cringe. First, the government is inefficient at providing public goods, and it is terrible at manipulating the markets for private goods. But more importantly, those 514 economic development programs are almost all the result of insidious cronyism. Narrow business interests manipulate government policymakers, and those interests prosper to the detriment of everyone else. Free markets be damned.

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For the top four, think Wall Street, aircraft, oil and autos.

Highly secretive trade deal negotiations with Pacific "partners" no doubt reproduce sweeteners all around no different from what has been going on within our own country for a long time right underneath our noses.

The first step to curtailing this cronyism is to stop calling the one free trade and the other free-market capitalism. We have neither.

Libertarian John Tamny displays the anti-intellectualism characteristic of the breed

Here in "The Beatles And Wealth Inequality: A Reminder That Education Is Irrelevant To Success".

It's a veritable cornucopia of wrong, sentimental tosh in pursuit of a thesis.

It ignores the fact that George Harrison went to a pretty good school in Liverpool. It doesn't understand that Ringo was prevented from making academic progress as a child by recurring severe illnesses. It is unaware that Ringo actually was punching a time clock at a day job when he became interested in the drums, and that though it was his life's work he didn't play when the band wasn't recording.

Tamny also makes a mountain out of the molehill of Ringo Starr's two-week hiatus from the Beatles in 1968, which supposedly showed the rest of the Beatles how much they needed him. They didn't. Ringo spent much of his time in studio playing cards while the others whacked out their tracks as the group headed for a breakup.

Tamny would have made a better case using Rush Limbaugh as his example. The man's made piles and piles of dough but routinely slaughters math, attacks college education and has a lazy mind.

John Tamny of Forbes spends four pages trying to convince us falling oil prices are always due to a rising dollar

Here, in Forbes:

"Falling crude prices ... were a function of a rising dollar that revealed itself in a major decline in the price of gold that is and was priced in dollars."

I don't know. Maybe he's trying to convince himself, not us. Reminds me of listening to a religious fanatic who can't stop talking. You know the kind. They usually get older and eventually think the better of it and move on. But not John Tamny.

The idea that a falling dollar produces higher oil prices is a nice theory occasionally supported by the data. The trouble is, there are too many examples of the correlation breaking down.

Crude oil prices from the mid-1980s to 2004 were remarkably range-bound between $12 and $35 a barrel despite the huge drop in the dollar from 1985 and its subsequent rise through the early 2000s. The dollar's rise in the late 1990s did nothing to change this. In fact, oil rose in tandem with the dollar then, as it did marginally after 1995 and as it did at the end of the late recession.

The sheer scale of the moves in oil prices is not commensurate with the relatively small moves in the dollar since 2005, nor is the relative tranquility of oil prices before that explained by the out-sized moves in the dollar.

The case is similar with gold, which at the current price of the dollar is still much, much higher than a dollar at this level in the past would indicate is called for. Gold was quiescent for 20 years and a lot lower than now all the while the dollar moved dramatically down and up again and down, off the 85 level. Contrary to Tamny, the recent decline in the price of gold has hardly been major, and hardly enough to convince that it is hewing to the performance of the dollar.

To illustrate how little gold has cared for the dollar's level, just look at how long it took for gold to peak after the 2008 all-time low in the dollar: over three years. And there is also that roughly 13 point rise in the dollar during the late recession when gold also began its long and biggest leg up.

That's not supposed to happen.

Sorry!

Happy talk from Robert Lenzner of Forbes misses the 180 month bear market in performance

Robert Lenzner of Forbes, here, is only off by an order of magnitude (18 months vs. 180):

Bull markets last on average about 97 months each and gain an average of 440 points in the Standard & Poor’s 500 stock index. By comparison bear markets since the 1930s have an average duration of only 18 months and an average loss in value of about 40 percent.

Let's talk the most recent bear market in performance.

If you invested your nest egg in the stock markets fifteen years ago in a total stock market index fund, your average return annually, say in VTSMX, would be 4.75% through 2014, per Morningstar.

On the other hand, if you had taken the safe route and invested everything in an intermediate term bond index fund, say in VBIIX, your average annual return would be 6.52% through 2014, also per Morningstar.

DESPITE THE PHENOMENAL PERFORMANCE OF STOCK MARKETS SINCE 2011, WHEN THE S&P500 REVISITED THE 2008 CLIFF LEVEL BEFORE THE BOTTOM IN 2009, STOCKS ARE STILL IN A BEAR MARKET. NO ONE REALISES HOW BAD THEIR CONDITION STILL IS.

Only fools are investing in the stock market today. Returns from stocks 10 years from now will be similarly disappointing as they have been since 1999. If you have physical gold, keep it, imho. And if you can, raise cash, imho. Opportunities for riches to agile investors who are prepared to scoop up bargains as in the 1930s are in the offing.

As everyone should know by now but doesn't, 1999 was a blow off top period leading up to the previous inflation-adjusted stock market peak of August 2000.

Valuations today have still not reproduced themselves in comparison to the end of 1999 on a total market cap to GDP basis, but they are way above the 2007 levels and represent an historically exceptionally rarefied level of valuation. Valuation at the end of 2014 based on total stock market cap to GDP will be relatively certain with the second report of 4Q2014 GDP at the end of February.

Stay tuned.

Rush Limbaugh keeps trying to expunge Heritage Foundation's guilt for ObamaCare mandate

In the first hour today, after which the first caller of the day almost hit the third rail when he pointed out that Jonathan Gruber may have his "stupid voters" but Rush Limbaugh has his "low information voters".

Nevermind the two leading Republican candidates for president in October 2011 agreed they got the idea from Heritage (transcript here).

ROMNEY: Actually, Newt, we got the idea of an individual mandate from you.

GINGRICH: That’s not true. You got it from the Heritage Foundation.

ROMNEY: Yes, we got it from you, and you got it from the Heritage Foundation and from you.

GINGRICH: Wait a second. What you just said is not true. You did not get that from me. You got it from the Heritage Foundation.

ROMNEY: And you never supported them?

GINGRICH: I agree with them, but I’m just saying, what you said to this audience just now plain wasn’t true.

(CROSSTALK)

ROMNEY: OK. Let me ask, have you supported in the past an individual mandate?

GINGRICH: I absolutely did with the Heritage Foundation against Hillarycare.

ROMNEY: You did support an individual mandate?

ROMNEY: Oh, OK. That’s what I’m saying. We got the idea from you and the Heritage Foundation.

GINGRICH: OK. A little broader.

ROMNEY: OK.

Gold bug Ralph Benko thinks Richard Nixon had to resign over the closing of the gold window!

I like Ralph Benko. Ralph Benko often makes important arguments on behalf of the gold standard. But when he tries to force everything in the universe to be interpreted through the lens of it you know you have met an ideologue who has become unhinged from reality. Which is why Forbes is a good place for him.

His latest screed here is a mere flight of fantasy, imagining Richard Nixon was forced to resign over the closing of the gold window in 1971. Had he presented it as such, it would have entertained and illumined, even pleased. Instead, its talk of correlation only annoys, the way a chart reader plots two things on a graph and yells 'See! See! They both go up together!' Against Benko, Pat Buchanan may be forgiven for ignoring what didn't exist, just as Nixon's enemies ignored it, except in the fever camps of utopianism.

Benko makes Thomas Paine's opinions about gold a prophecy reaching 200 years into the future where gold becomes Nemesis and the end of Bretton Woods Hubris. Covering up Watergate? Well, simply an instrumental little detail:

"The House Judiciary Committee’s charges and the Connally indictment uncannily fulfill a prophecy by Tom Paine. ... Connally was acquitted on the charges of graft and perjury.  Later he underwent bankruptcy before dying in semi-disgrace.  Nixon resigned rather than undergoing impeachment, also living out his life in disgraced political exile.   The spirit of Paine’s declaration was fulfilled in both cases. Connally and Nixon engineered this violation, abandoning the good, precious-metal, money contemplated by the Constitution. Nemesis followed hubris. The closing of the 'gold window' was based, by Connolly, on deeply wrong premises.  It was sold to the public, by Nixon, on deeply false promises."

Methinks Tom Paine himself would be a little embarrassed at the almost religious regard with which some of his present day followers come to what he has left behind for us on paper.

He'd probably call them Burkeans.