Cutting Spending: Tea Party's Meession from G-d

As reported by Howard Gold here:

Congress has raised the debt limit 74 times since 1962 so the federal government can meet its obligations.

Usually it’s just a rubber-stamp exercise. But this time a Republican-controlled House of Representatives, which swept into power on the back of the Tea Party movement, is preparing to take a stand against too much federal spending and picked the debt ceiling as the battleground.

[Greg] Valliere [chief political strategist of Potomac Research Group] called the 87 freshman Tea Party House Republicans “unlike any group I’ve ever seen in my career. These people don’t give a damn about being re-elected. They feel they are on a mission from God to cut spending,” he told me.

Guarantees Implicit Under Dodd-Frank Hand Big Banks Billions in Borrowing Advantages at Taxpayer Expense

So says John Carney here, calling Bank of America, Citigroup and Wells Fargo, among others, our new Fannie Maes and Freddie Macs.

Corporate Cash Reaches New Record Yet Corporate Borrowing is at Staggering Levels

Corporate cash reached a new record of $1.9 trillion in Q1 according to the Federal Reserve's Flow of Funds report. The figure is referenced in discussions here and here, among other places.

But what rarely seems to get mentioned in these sorts of discussions is the debt side of the equation involving all this corporate cash. To cite the growth in cash as evidence that corporations don't need a tax cut and aren't investing simply misses the larger reality which helps explain the phenomenon.

John Carney here points out among many other important considerations that corporations are behaving out of fear just like individuals had when they increased their savings in the wake of the recent financial crisis. Many businesses experienced first hand just how difficult times can be without sufficient liquidity in a situation where no one is lending. Increasing cash should be viewed in part as insuring against a repetition of a similar lending lock up in future. 

Other more extenuating circumstances should also be considered when evaluating the issue of corporate cash. One is Federal Reserve induced low interest rates.

David Zeiler calls attention here to the fact that the current low cost of borrowing is too attractive for corporations not to lock in before QEII ends and the cost of borrowing inevitably rises:

The amount of debt companies have issued this year is staggering. As of May 18, companies with investment-grade ratings had issued $392 billion of bonds, an increase of 30% over the same period last year.

Another consideration is related also to formal government policy, namely that much corporate cash may simply be too unattractive to use for tax reasons:

"Many tech companies have looked to raise capital in the [U.S. debt] market over the past year, for a multiple of reasons, including acquisitions, the maturing of businesses and the inability to tap offshore cash without tax consequences," Keith Harman, a managing director in debt capital markets at Bank of America Merrill Lynch told Reuters.

The issue of offshore cash is a significant one. For many companies, offshore money accounts for the bulk of their cash. About 46% of Google's cash is overseas; 90% of Cisco's and virtually all of Microsoft's.

Because of a reluctance to pay the 35% U.S. corporate tax on that money, that cash remains offshore and unavailable for many uses, such as stock buybacks and infrastructure investment. (Microsoft used some of its offshore cash to buy Luxembourg-based Skype earlier this month.)

This suggests that repatriating corporate cash should be a fundamental goal of tax reform in the US. That would mean making it more attractive to keep it here by reducing corporate tax rates.

Come to think of it, why stop there? Why not patriate everyone's cash in the world to America as a matter of formal government policy?

The more cash, the better.

Progressivism: Just Another Word For Fascism

As seen here:

"Reading various online threads, it never ceases to amaze me that advocates of what we will call a more liberal or progressive line of economic thinking inevitably embrace the corporate state [fascism] for solutions."

Palin Proves Again That the Climb Down Into the Gutter Comes Natural to Her

Here it is again on her Facebook page, playing cutesy with the acronym for Obama's "Winning the Future."

Every time she resorts to one of these easy low one-offs she destroys her credibility as a Christian and as a serious political player.

The descent into barbarism continues apace.

Imagine 1.2 Million Mortgagors Not Making ANY Payments in Over Two Years

And about 3 million more who haven't paid anything in over a year.

The story is here.

Looks like judicial foreclosure states only, of course.

The EU Project Has Been an Elaborate Charade from the Beginning

So argues Samuel Gregg, in considerable detail, here:

[T]he economic woes of countries like Portugal, Spain, and Greece have resulted from more than just bad policy. With each passing day, evidence mounts that one dynamic driving the crisis is that of untruth: a disturbing European pattern of fabrication about levels of public spending and debt.

The latest proof for this thesis is the discovery by newly-elected Spanish regional and local governments of concealed debts run up by their predecessors. This contradicts claims by Spain's Socialist Finance Minister, Elena Salgado, that Spain's regions had no "hidden deficits" on their accounts. Spain's business community, however, has long complained about local governments pressuring private companies to do business with them "off the books."

One reason for such behavior is that Spain's government knows that the greater Spain's real overall-public debt, the higher will be the interest-rates demanded by financial markets and the more stringent will be the conditions attached to any "financial assistance package" (i.e., bailout) that Spain might, like Portugal and Greece, eventually need.

Unfortunately, financial sleight-of-hand in today's EU has a longer history than the present turmoil. It's characterized the entire monetary union project from the start.

The rest at the link should not be missed.

Now You Know Why The Dept. of Education Wanted to Procure Shotguns

The "federal business opportunity" placed here on March 8, 2010 was for 27 shotguns for the Dept. of Education.

They probably used them in the recent raid reported here, smashing down a family's door at six in the morning, looking for payment on delinquent student loans.

There's an old saying that if you outlaw guns, only outlaws will have them.

Shotguns with barrels less than 18 inches long are outlawed. That's why Obama's fascist police state thugs from the Department of Education procured shotguns with 14" barrels.

Think of it as close quarters tutoring.

As we reported here, the IRS got some too, for close quarters audits, and ObamaCare insurance compliance.

What's Wrong With the Republican Party? That Any of it Approves of the Job Obama is Doing.

Over 25 percent is mind-boggling, but even 14 percent approving is nothing short of nutty:

"In May, over a quarter approved of President Obama's handling of his job, but that is down to 14 percent now, a clear indication that any advantage he gained from taking out Osama bin Laden has faded with time."

-- CNN Polling Director Keating Holland, here

Obama Safeguards Student Loans So Much He'll Break Down Your Door to Get to Them

"We be loans and shit."

Story here.

Radiation in Iitate, Japan, is Down to 2.69 Microsieverts Per Hour

Per the June 8th report of environmental radiation in the districts of Fukushima Prefecture, here.

The reading remains the highest of the 13 reporting locations and is roughly 24 times normal for the area.

If You Don't Have the Note Today, You Don't Have No Game

Chris Whalen here shows the regrettable continuity between the problems of today and the 1930s with respect to the legal issues in judicial foreclosure and concludes with the following:

One thing you can depend upon is that there will be no fixing of what is wrong with the US real estate sector until Congress addresses once and for all the issue of delivery of a note as collateral for a mortgage backed security. Unless, and until, we fix the private mortgage securitization market, the housing sector will not stabilize and the chance of further deflation will remain a threat to economic recovery.

My Favorite Homeowner's Front Door Visitor Welcome Sign

"Welcome to our illusion of economic prosperity."

The World, Upside Down

From Joel Miller at National Review, here:

In short, Palin basically got the whole story wrong.

From Robert Allison interviewed by NPR, here:

BLOCK: So you think basically, on the whole, Sarah Palin got her history right.

Prof. ALLISON: Well, yeah, she did. ...

Methinks the professor wants Palin to be the candidate as much as we all want Anthony Weiner not to resign.

The true mother of the child would give it up rather than see it hewn in half.

Finances of the States Still One of the Most Dangerous and Overlooked Problems Today

So says Shawn Tully here, looking at the latest news coming from Meredith Whitney, which is more comprehensive and compelling than before and who is sticking by her guns:

Whitney summons what appears to be the most comprehensive set of data ever assembled on state budgets and debt.

Her conclusion is that the future deficits that need to be closed, either by new taxes or draconian cuts in social services, are far bigger than the official numbers show, and that debt levels, when all liabilities are counted, vastly exceed the official estimates.

Late last year on 60 Minutes, Whitney predicted hundreds of billions in defaults on municipal bonds in the next five years. That controversial call was widely condemned, especially on Wall Street, where the muni market is an enormous profit spinner.

Now, Whitney tells Fortune she never meant to make more than a general forecast. "I never intended on framing the scale of defaults as a precise estimate, but I continue to believe that degree of municipal defaults will be borne out over the cycle. I meant to point out that the state debt problem is a massive headwind for the U.S. economy, second in importance only to housing."

Sarah Palin, Their Only Hope, is So Vulnerable That Both Limbaugh and Hannity Feel Compelled to Defend Her Indefensibly Stupid Caricature of Paul Revere's Midnight Ride

Sad, but true.

This is an indicator of how desperate things really when it comes to finding a truly acceptable conservative Republican candidate for president.

There isn't one, and they both know it.

Good thing for Palin that Anthony Weiner changed the topic.

Let Americans Use Their $15 Trillion in Retirement Accounts to Bailout Housing

John Crudele has mentioned this before, as have I.

Here he is once again in The New York Post:

Which gets me back to my favorite subject: my idea for fixing the economy.

If Washington wants to stimulate the economy without spending money (which it doesn't have) or reducing interest rates (which can't go any lower) or destroying the value of the dollar and stoking inflation (which Bernanke's QE is doing), then it should try my plan.

Change the rules on retirement accounts so that some small amount of the $15 trillion in these plans can be invested in real estate.

Let the Americans who can afford to buy real estate in their retirement plans do so.

Give them tax breaks. Encourage them to move into vacant condos in Florida, Arizona, California and everywhere else.

Get these properties off the books of banks and the federal government.

I'll get back to this another time when I have more space. But someone had better come up with a new idea -- and fast.

You Don't Hear the Tea Party Warning of Civil Unrest, But You Will Hear Democrats

Like James Carville, here:

But Carville said the consequences aren’t limited to politics alone. He warned of heightened risk of civil unrest with the bleak economic picture.

“You know, look — this is a humanitarian — you know, you’re smart enough to see this,” Carville said. 

“People, you know, if it continues, we’re going to start to see civil unrest in this country. I hate to say that, but I think it’s imminently possible.”

Congressional Budget Office Puts Fannie/Freddie Bailout at $317 Billion

The regime's Office of Management and Budget says it's $130 billion, net of certain repayments, apparently, totaling $34 billion.

Story here.

"Capitalism Without Bankruptcy is like Religion Without Hell"

Barack Obama sells the former, and more recently Rob Bell the latter. A coincidence?

Seen here, concluding an interesting discussion of the cost of the auto bailouts:

Former chief executive of Eastern Airlines, Frank Borman, once said: “Capitalism without bankruptcy is like religion without hell. It doesn’t work.”

The Decline in Housing Equity to Date is About $7 Trillion

So says TNR here:

To date, the decline in house prices has destroyed nearly $7 trillion in housing equity. And prices are still falling. Homeowners are likely to see another $1 trillion in equity disappear over the next year.

The article is otherwise full of nonsense, recommending deficit spending in the range of $4 trillion per year to boost employment, and blaming the stall speed in job creation on the imminent cessation of the heretofore grandiose spending of the early Obama regime.

Gee, I had no idea that all the jobs ever created in this country were the result of deficit spending. Who knew?

The Special Pleading on Palin's Misrepresentation of History is Getting Ridiculous

Here's what Palin said:

“Part of his ride was to warn the British that were already there. That, hey, you’re not going to succeed. You’re not going to take American arms.”

This makes it sound like the purpose "of his ride" was also to warn "the British." It wasn't. And who wasn't "British" for all that? That Revere warned "the British" after his capture is completely beside the point. Revere tried to bluff his way out of a predicament. Who wouldn't? But to imply as Palin did that the purpose "of his ride" included this warning to "the British" is total nonsense. Had Revere not been captured, he never would have said what he said to the loyalist patrol that detained him. His purpose at that time changed from warning patriots to escaping loyalists.

The fundamentalist minds of Literalville, USA, are parsing away on this, both on the left and the right, for purely partisan reasons. See here and here. It's ridiculous.

If you want historical exactitude, you're not going to get it from Palin, or Bachmann for that matter. Nor are you going to get it from Mr. 57 States Obama. 

Libertarian Swine on David Mamet

A nice Jewish boy realizes he's no longer a brain dead liberal and what do the libertarians find to complain about?

Readers on both sides of Mamet’s current political stance can take issue with his social conservatism. He is, among other things, an unbending proponent of traditional gender arrangements.

Political conservatism presupposes social conservatism, as Phyllis Schlafly pointedly argued here in the wake of the ObamaCare debacle, the most baneful affect of which was the neutering of the Hyde Amendment.

Libertarianism couldn't stand athwart a toy train and yell stop.  

Kish meir Yiddische Tuchus.

Sarah Palin Joins Michele Bachmann in Proving They're No Historians

Sarah Palin evidently insists Paul Revere's ride was meant also to warn . . . the British!

As reported here, along with supporters' shenanigans at Wikipedia.

For the Michele Bachmann flub, see here.

If we have to have a woman for president, why can't we have one more like Margaret Thatcher? Oxford graduate in chemistry, 1947.

Betrayed Marine to SECDEF: Our Values Are Better Than Your Values

As reported here:

"Sir, we joined the Marine Corps because the Marine Corps has a set of standards and values that is better than that of the civilian sector. And we have gone and changed those values and repealed the 'Don't Ask, Don't Tell' policy," the sergeant told Gates during the question and answer session.

"We have not given the Marines a chance to decide whether they wish to continue serving under that. Is there going to be an option for those Marines that no longer wish to serve due to the fact their moral values have not changed?" he asked.

"No," Gates responded. "You'll have to complete your ... enlistment just like everybody else."

Florida Couple Foreclosures on Bank of America!

I kid you not!

The story is here.

Don't try this in a non-recourse state.

Robot at Fukushima Reactor 1 Finds Crevice in Floor, Steam and Highest Radiation Yet Measured in Air Pouring From It

NHK World has the story here:

The operator of the damaged Fukushima Daiichi nuclear plant says steam was observed coming out of the floor of the No.1 reactor building, and extremely high radiation was detected in the vicinity.

Tokyo Electric Power Company inspected the inside of the No.1 reactor building on Friday with a remote-controlled robot.

TEPCO said it found that steam was rising from a crevice in the floor, and that extremely high radiation of 3,000 to 4,000 millisieverts per hour was measured around the area. The radiation is believed to be the highest detected in the air at the plant.

That's an astounding number, also expressed as 3 to 4 sieverts per hour. See this series of charts to appreciate the significance of the level, which is deadly:

It seems pretty clear that the earthquake damaged the floor of the reactor building, causing the crevice. And it also seems pretty clear that the water which has had to be supplied continually to the core to cool it has been leaking out, along with melted fuel materials, from holes caused in the pressure vessel by the meltdown and out onto the floor and into the crevice. Or something close to that.

A monumental mess.

Obama Owns the Unemployment: 23 of 28 Months at 9 Percent or Higher

Seen here:

[T]he unemployment rate has been below 9 percent for just five months since Obama took office — and three of those months were in the first 12 weeks of his presidency, before his policies took effect.

Follow the history of unemployment graphically here.

Quantitative Easing Explained: 'Back Door' Toxic Asset Relief for the Banks

As remarked elsewhere now and again, but not quite as succinctly as here:

So what did QE achieve once we look at the money flows?

This policy has been replenishing the banks’ coffers though not quite in the Mexican and Savings and Loan manner. Instead of printing money to fulfill nominal commitments, the government and the Fed have been taking toxic credits away from the  financial institutions’ balance sheets. The government and the Fed have been “validating” the lousy credit already created.

And if that’s not enough, banks can borrow from the Fed at extremely low rates and buy Treasuries. The generous spread between these rates is allowing them to record the profits that are rebuilding their balance sheets with no risk or effort.

As of March $2.7 Trillion Held in Money Market Mutual Funds

Seen here:

According to the Investment Company Institute, more than 50 million Americans keep at least some of their assets in money market funds. As of March 2011, in fact, some $2.7 trillion was held in money markets—about 25% of all mutual fund assets in the United States. Equally compelling is the fact that in the 40-year history of money market funds, only two funds have seen their net asset values dip below $1 per share (often called "breaking the buck"). During that same period, in contrast, some 2,800 U.S. banks have failed, according to the Federal Deposit Insurance Corporation.

Median Income Declined in Every State in 2009, Except South Carolina, North Dakota, and Washington, D.C.

While South Carolina is known for palmettos, North Dakota is known for oil.

And DC?

Snake oil.

As seen here.

Obama's War on the Middle Class Transfers Wealth to the Rich!

Even the Left agrees: the middle and upper middle classes lost the most in 2009, and they lost it to the rich.

Unfortunately for America, Obama's communist-inspired redistribution of wealth redistributes it from everyone to the rich.

Take whatever he says and always expect the opposite.

As seen here:

The bottom income quintile (households earning $20,453 or less a year) earned 0.5% less on average in 2009 than in 2008.

The 2nd income quintile (households earning $20,454 to $38,550 a year) also earned 0.5% less on average in 2009 than in 2008.

The 3rd income quintile (households earning $38,551 to $61,801 a year) earned 0.8% less on average in 2009 than in 2008.

The 4th income quintile (households earning $61,802 to $100,000 a year) earned 1.0% less on average in 2009 than in 2008.

The top income quintile (households earning more than $100,000 a year) earned 0.3% more on average in 2009 than in 2008.

Unemployment Back Up to 9.1 Percent, Fewest Jobs Created Since September

The story is here with all the numbers.

Way to go, Brownie Commie.

7 in 10 Democrats Sympathize with Communism

According to the latest Gallup Poll, here:

Seven in 10 Democrats believe the government should levy taxes on the rich to redistribute wealth, while an equal proportion of Republicans believe it should not. The slight majority of independents oppose this policy.

Recall Ebenezer Elliot (1781-1849):

What is a communist? One who has yearnings

For equal division of unequal earnings.

Idler, or bungler, or both, he is willing

To fork over his penny and pocket your shilling.

Why Not Count Bi-Sexual Softball Players as Three Fifths of a Teammate?

That way the team could have three bi-sexuals, which would count as only 1.8 players, 2 heteros and 5 full-on queers and win every time!

A gay softball organization can keep its rule limiting the number of heterosexual players [to two] on each team, but allegations by three players who say they were disqualified from a tournament because they weren't gay enough can proceed to trial, a federal judge said. ...

The organization says it has always considered bisexuals to meet the definition of "gay" for roster purposes, but the minutes [of a hearing] also note that one official involved in the decision to disqualify D2 commented that "this is not a bisexual world series. This is a gay world series."

More here.

Switch Hitters Nullify Softball Victory

"U.S. District Judge John Coughenour ruled Tuesday that the organization [North American Gay Amateur Athletic Alliance] has a First Amendment right to limit the number of heterosexual players, much as the Boy Scouts have a constitutional right to exclude gays."

More here. 

If the case goes to the Supreme Court, will she recuse herself?

Growing Schmoeing: Each Dollar of GDP Cost Almost $9.00

Charles Hugh Smith takes a tour of recent public debt and annual GDP and delivers the bad news:

Here are the numbers . . .

Total public debt in 2007 (pre-recession) was $8.95 trillion.

Total public debt in 2010 was $13.53 trillion.

This is an increase of $4.58 trillion.

Add in the 2011 deficit of $1.6 trillion and the total is $6.1 trillion in additional debt in the four years from 2008 to 2011.

GDP in 2007 (pre-recession): $14.08 trillion

GDP in 2008 (recession starts): $14.44 trillion ($364 billion gain)

GDP in 2009 (recession officially ends in mid-2009): $14.12 trillion ($322 billion decline)

GDP in 2010: $14.51 trillion ($390 billion gain)

Let's be generous and assume the U.S. economy continues "growing" at the first-quarter pace of 1.8% for all of 2011: GDP advanced 1.8% in Q1 2011 (BEA). That would add $260 billion to the 2010 GDP, so the GDP at the end of fiscal year 2011 would total $14.77 trillion in nominal dollars. In constant dollars, it might reach back up to 2007 levels, but only if the economy doesn't roll over.

Total up the gains and declines in annual GDP for the four years from 2008 through 2011, and you get $690 billion. That's the total sum of each year's gains for the four years.

That means we as a nation borrowed and spent $6.1 trillion to get $700 billion in GDP "growth."That means we borrowed and spent $8.70 for each $1 of nominal GDP "growth."

America is obviously in this and every other way completely insane.

Read the whole entry here.

The Truth About Student Loans

From Mish, here:

Obama brags about safeguarding student loans. That is like bragging about safeguarding the plague.

Student loans have done four things, all of them bad.

Jack up the cost of education

Make students debt slaves for the rest of their lives

Unjustly hand over huge profits to schools like the University of Phoenix at taxpayer expense

Add to the national debt

The best thing to do with student loans would be scrap the program entirely.

America worships at the altar of a secular god, education. The student loans are the sacrifices offered thereon. The professoriate is the priesthood, which grows fat on the first fruits. And the campi are its churches and cathedrals. The Ivies are the Holy See. And the liberalism taught there is the indulgence of its day. It desperately needs a Luther to nail it to the wall. Perhaps he will be called Bankruptcy.

If Senators Wyden and Udall Weren't Servile Cowards, They'd Tell America the Truth

And the rest of the slaves wonder in amazement at the senators' recent revelation discussed here that the Patriot Act is interpreted in a secret manner in order to hide from Americans their own government's routine violation of their Fourth Amendment rights:

"Today the American people do not know how their government interprets the language of the Patriot Act," [Senator] Wyden said. "Someday they are going to find out, and a lot of them are going to be stunned. Some of them will undoubtedly ask their senators: 'Did you know what this law actually did? Why didn't you know? Wasn't it your job to know, before you voted on it?' "

In an interview, [Senator] Udall said he wasn't even allowed to discuss details about the government's intelligence-gathering with fellow senators unless they go to a secure room in the Capitol designed to thwart eavesdropping.

Where is the real American who has the fire in the belly to tell the truth? The activists cower in fear, the senators cower in fear, everyone it seems is afraid and does NOTHING. Land of the free? What a joke.

Because none of you really believe in anything.

"Preserve, protect and defend the constitution, so help me God"? HaHaHaHaHaHaHaHaHaHaHaHaHa!

Maryland Transit Admin. Officers Illegally Detain Man, Demand ID

And did so citing the Patriot Act, as reported here:

“Listen, listen to what I’m saying. The Patriot Act says that critical infrastructure, trains, train stations, all those things require certain oversight to take pictures, whether you say they are for personal use or whatever, that’s your story,” the officer said.

“So why don’t you have any signs posted to say I cannot take pictures?” Fussell said.

“Our officers have become very sensitive post 9/11 and we’re trying to see that they understand our passengers and citizens also have a right to take pictures,” Wells said.

The officer eventually threatened to take Fussell into custody.

“Do you have Maryland state identification on you?” the officer asked.

“I am not committing a crime,” Fussell said.

“Sir, I’m going to ask you one last time, then I’m going to take you into custody.  Do we understand each other?” the officer said.

Fussell's videos are here and here.

The American Fascist Police State grows and grows . . . under Democrats.

Chicago: Olympic Venue Aspirant Cancels Fireworks Because It's Broke!

Story here.

Venetian Night, a 52 year old summer tradition, was canceled two years ago. Gee, wasn't that a sign already that the Olympic dream was just a pipe dream?

A fitting conclusion to the Daley legacy, and he gets to keep $1.1 million in campaign cash on top of it, plus his fat pension and a security detail.

New Investing Trend is to Not Invest?

I know I'm not, but it is a little hard for me to believe an on-line poll of investors by Prudential which shows nearly 60 percent have lost faith in markets and nearly 45 percent intend never to invest again.

See the pie charts here.

Presumably these are all Prudential customers who actively answered the poll? As opposed to a scientific sample of registered voters?

Of course they could be Tea Partiers set to unleash holy hell on the electorate again, right?

Tea Party sympathy has been running steady at about 33 percent of the electorate for months, and it would be just like them to go on strike. But I suspect that a large number of people who've lost big time -- jobs, houses, investments -- have nothing much left to invest anyway, so they answer accordingly, keeping very little stashed away, if anything. Maybe an insurance policy or two?

Nearly half the country admits it couldn't scrape together $2,000 in a pinch. 

Barry Ritholtz Can't Even Spell Other People's Book Titles Properly

His latest demonstration of illiteracy is here (which I rather like to point out now and again since Ritholtz seems to think he's God's appointed corrector of innumeracy--what's so great about being able to count when you can't read or write, either?):

The Case Shiller chart showing home prices in the 1920s or 30s does not use actual sales data, but are [sic] hypothesized by Prof Shiller in his book Irrational Exuberence.

On the substantive issue, Ritholtz is right to stress that there are problems comparing the two eras since data are not complete for the past in the same way that they are today for many things.

I rather liked one commenter's response to this post, objecting to the obvious straw man argument among other things: 

Mark A. Sadowski Says: 

June 1st, 2011 at 10:19 am

There’s a couple of problems with this post.

1) You’re conflating the claim that residential housing has done worse with the claim that this recession is as bad as the Great Depression. These are two seperate [ah, that would be "separate"] claims and one does not imply the other.

2) The relative absence of mortgages in the Great Depression would have greatly reduced the foreclosure problem relative to our own times.

3) High end real estate in Manhattan [!] in the 1930s was not a proxy for housing nationally.

Grebler, Blank and Winnick constructed a fairly decent index of nominal housing prices nationally (Shiller uses it). It fell 30.5% from 1925 to 1933.

http://www.nber.org/books/greb56-1

In contrast the S&P/Case-Shiller index has fallen 34.0% from 2006Q2 through 2010Q4.

Moreover your claim ignores the fact that there was considerable deflation in everything during the Great Depression. Taking into account the CPI, real housing prices only fell 12.6% from 1925 through 1932. In contrast real housing prices have fallen 40.1% this time around (so far).

P.S. For comparison[']s sake on the 67% decline in housing prices in Manhatten [Manhattan] between 1929Q3 and the end of 1932, consider the city of Las Vegas today. From peak in April 2006 to present housing prices in Las Vegas have fallen 58.4%. Adjusting for CPI the decline in housing prices in Manhatten [Manhattan] in the early 1930s is 57% whereas the decline in Las Vegas today it is 62.7% (so far).

If Ritholtz is so smart, how come it's not called the Case/Ritholtz index?

Now wasn't that fun? 

Housing Price Declines About 6.5 Percent Worse Than Great Depression

As reported here, quoting Paul Dales, senior economist at Capital Economics:

“On the Case-Shiller measure, prices are now 33% below the 2006 peak and are back at a level last seen in the third quarter of 2002. This means that prices have now fallen by more than the 31% decline endured during the Great Depression.”

The article concludes that it is probably even worse than that, if current modest inflation is factored in compared to the  deflation prevalent in the 1930s. 

The Housing Pox-Eclipse

As reported here by Stephen B. Meister, there are currently 2.25 million foreclosures, 1 million repos, 1.8 million more than 90 days delinquent, and 3.8 million legitimate listings. Add to that another 12 million underwater.

There were places like these.

Cities.

They were called cities.

They had lots of knowing.

They had skyscrapers. . .

. . .videos and they had the sonic.

Then this happened.

This Pox-Eclipse happened, and it's

finished. It isn't there anymore.

-- Savannah, Mad Max 3 Beyond Thunderdome

Yeah, Thanks Bernanke

"Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything."

"We’re on the verge of a great, great depression. The [Federal Reserve] knows it."

"We have many, many homeowners that are totally underwater here and cannot get out from under. The technology frontier is limited right now. We definitely have an innovation slowdown and the economy’s gonna suffer."

"Any bears out there better be careful because the dividend yields on these stocks look awesome relative to all the other investment vehicles out there. So bears are going to have to find a new way to express their discontent with the U.S. economy."

-- Peter Yastrow, market strategist, quoted here

These guys keep talking their book, which is the Fed's book, which is the politicians' book, until, you know, we vote them out of office. "Don't fight the Fed" is their number one rule.

Why do we have to find a new way to express our discontent? What's wrong with expressing our discontent in the usual way, like we've been doing? You don't want us to march in the streets again, do you? We aren't buying anything, we aren't traveling anywhere, eating out, investing, or working for a paycheck. In short, we're on strike. Howdoyalikethemapples, chump?

The only thing we can do is plant. And wait. And vote. And we're really looking forward to voting again.

Or have you forgotten last November?

Obama Hands Out Medicare Advantage Waiver from ObamaCare

He's running away from his own plan as fast as he can:

Millions of seniors in popular private insurance plans offered through Medicare will be getting a reprieve from some of the most controversial cuts in President Barack Obama's health care law.

In a policy shift critics see as political, the Health and Human Services department has decided to award quality bonuses to hundreds of Medicare Advantage plans rated merely average.

The $6.7 billion infusion could head off service cuts that would have been a headache for Obama and Democrats in next year's elections for the White House and Congress. More than half the roughly 11 million Medicare Advantage enrollees are in plans rated average.

When even AP and Yahoo notice, you know you've got a credibility problem.

Dope Obama Scheduled Facebook Townhall for Dopers' 420, 0.11 Percent of 19.3 Million Friends Sign Up

Story here, without a trace of understanding.

Obama in Indonesia Aged 9 Already Lusted for Power, Learned His 'Cool' from Discrimination

So claims a new book, reported about here.

Former Supporter Perceives the Blended Strongman in President Obama

In remarks available here from the president of the Black Chamber of Commerce.

Harry Alford likens Obama to both a fanatical Marxist and to a brown-shirted Fascist.

R. Christopher Whalen has called attention to the blend here, relying on defeated Herbert Hoover's reflections in retirement.

It is a useful hermeneutic for explaining otherwise disparate tendencies in American politics.

It also kind of gives new meaning to being "a mutt like me."

Fannie and Freddie Lose Billions But Their Top Executives Still Make Millions

American citizens are on the hook for $164 billion and counting from the ongoing failure of Fannie Mae and Freddie Mac, but the Obama cronies who run them still make big bucks:

Fannie Mae Chief Executive Michael J. Williams received a compensation package totaling $9.3 million in 2009 and 2010, according to a March report by the FHFA inspector general. That figure includes an annual salary around $900,000, a similar amount in long-term incentive awards each year, plus $2.9 million in annual deferred pay. All three types of compensation are paid in cash.

                

Fannie Mae’s chief financial officer, David M. Johnson, was paid $4.6 million in 2009 and 2010. The company’s general counsel, Timothy Mayopoulos, had a compensation package of $4.5 million for the two years, the inspector general said.

At Freddie Mac, Chief Executive Charles Haldeman had a two-year compensation package totaling $7.8 million in salary, incentive awards, and deferred pay. Freddie’s chief financial officer, Ross Kari, was paid $4 million and its general counsel, Robert Bostrom, took home $5.2 million, according to the inspector general.

It's hard work managing a disaster.

John Solomon and Julie Vorman have much more here.

Ratio of Employed to Population Below 59 Percent for Almost Two Years

Fannie Mae Net Loss Q1 $8.7 Billion, Freddie Mac Almost $1 Billion

As reported here.

Fannie has needed bailouts totaling $100 billion, Freddie about $64 billion.

Housing Index Now 138.16, Lower Than 2009's 139.26

Story here.

Sure, we've hit bottom!

Un-American Memorial Day Sentiments

"[O]ur freedoms, our ingenuity, our faith and our entrepreneurship . . . all of these virtues ha[ve] been purchased on battlefields, with the blood of those whom we commemorate on Memorial Day."

-- The Washington Examiner, here

What unadulterated rubbish. If the Founders could hear it, they'd roll over in their graves.

The rights to life, liberty and the pursuit of happiness, among other things, are inalienable. No military can purchase them for me, nor take them away from me. I own them already and always, despite my circumstances. That is what the founding generation believed most passionately, and which no one in America seems to believe anymore.

Therefore despotism surely awaits, for only free men who believe such things remain free, come hell, high water, or even chains. Servility begins, and ends, within.

Memorial Day's Origin is in Decorating Union Graves from the 'Late Rebellion'

General Orders No.11, Washington, D.C., May 5, 1868, reproduced here.

Holding Hands? They're PRAYING, You Idiot!

(source)

Pawlenty Badly Flubs An Equally Badly Asked Question He Shouldn't Have Taken As Is

But his answer wasn't just a casual misstatement of the facts. It shows he wasn't thinking about what he was saying at the time, nor about the question:

Yeah, well I think the situation now in Iran is such that Secretary Gates is negotiating with whether the United States military will be there beyond the end of this year.

And they're looking to the Iranians to see if they invite the Americans to stay, invite us to stay. And if they do invite us to stay at some very reduced level I think the United States will be wise, until we make sure that they get to the next level of stability, to accept that invitation.

So if Iran makes that invitation by the end of the year, leaving a residual force, a greatly reduced force, but a residual force that would be there for a temporary amount of time. Until they could establish much better air security, until they can develop their intelligence —

Pretty embarrassing this early in the campaign.

The video is here.

Jon Huntsman: For Cap and Trade, Obama's Stimulus, and Individual Mandate

Hear about it here.

This RINO hasn't got a prayer.

Nutty Romney and Gingrich Support Ethanol Subsidies

Story here.

Pawlenty is against them.

Do Americans not realize that $5 billion of their tax money propped up that industry in 2010?

It's a waste. And 42 percent of corn production now goes to it, when it should be going to food, which is why you are paying so much more at the grocery store, especially for meat.

Machine Rule

"Mr. President, I write to request your confirmation that S. 990, as passed by Congress, was presented to you prior to the autopen signing, as well as a detailed, written explanation of your Constitutional authority to assign a surrogate the responsibility of signing bills passed into law."

-- Rep. Tom Graves (R-GA), quoted here

Holes/Cracks in Fukushima Reactor Pressure Vessels/Containments Estimated at 3-10 Centimeters

So reported NHK World on Wednesday, here:

Tokyo Electric Power Company analyzed the changes in pressure levels inside the pressure and containment vessels to gauge the scope of the damage.

TEPCO said the analyses show that holes in the Number 1 reactor containment vessel amounting to 3 centimeters in total may have formed 18 hours after the quake. ...

The utility said holes and cracks equivalent to 10 centimeters in diameter may have formed in the Number 2 reactor's containment vessel about 21 hours after the quake. ...

TEPCO said these results were obtained through data calculations, and that it has yet to confirm whether such holes actually exist.

Presumably high radiation conditions near the reactors continue to prohibit the actual physical inspections which would confirm such estimates and calculations.

Fukushima Waste Water Treatment Facility is Leaking

So says this report, which indicates that the water in question had been transferred from the Unit 3 reactor's turbine building and tunnels earlier in the week.

The surface radiation of the water was said to be 70 millisieverts per hour.

It seems like these people just can't catch a break.

La Nina's Sudden Exit Three Months Ago Blamed For Brutal Tornado Season

Story here.

Epic May Snowpack in West Deepest in 45 Years

Story here.

Median Amount Saved in Retirement Accounts is $2,000?

Which would imply that half the population has less than that saved, and half the population has more than that saved.

The oft-repeated datum is pretty darn old already. A decade! It is based on a survey of about 3,400 people taken way back in 2001 and reported on the Bureau of Labor Statistics website in an "updated" posting dating to 2005, here:

The median amount held in retirement accounts--$2,000--provides another indication of the wide variation in the amounts held by households.

More recent surveys of somewhat smaller samples of Americans paint an only slightly less apocalyptic picture of the resources Americans may or may not have tucked away:

Just over a third (34 percent) of Americans have no retirement savings, up from 30 percent in 2009, according to a new Harris Poll of 2,151 adults. ... Some 42 percent of individuals age 45 and older have less than $25,000 saved for retirement, EBRI found. Only 11 percent of all current workers say they have $250,000 or more saved for retirement.

At a 4 percent per year drawdown rate in retirement, people with $250K can draw down roughly only $10K per year for 25 years, and then it's pretty much gone.

Pretty hard to live on that without Social Security and Medicare, which themselves are going bust.

Americans are not ready for the future, but the maw of the future sure is ready for them.

Statement of Q1 2011 GDP Unchanged at 1.8 Percent

Story here.

The expectation for the second statement of Q1 growth had been a revision up to 2.1 percent.

House Democrats' Insider Trading Easily Bests Republican Track Record

According to opensecrets.org, as reported here:

Despite the GOP’s reputation as the party of the rich, House Republicans fared worse than their Democratic colleagues when it comes to investing, according to the study. The Democratic subsample of lawmakers beat the market by 73 basis points per month, or 9 percent annually, versus 18 basis points per month, or 2 percent annually, for the Republican sample.

Average Wage Slave Uses 14 of 18 'Vacation' Days

Puritanism lives.

Story here.

Obama Conceded Government Spending is the Problem, not Tax Revenue, Nearly Two Years Ago

"Medicare and Medicaid are the single biggest drivers of the federal deficit and the federal debt by a huge margin."

-- Barack Obama, quoted here, June 24th, 2009, and affirmed as "mostly true" by the source.

Sen. Tom Coburn (R-OK) Wants To Deep Six Your Tax Deductions

Republicans should deep six Tom Coburn as soon as possible:

I’ve argued that Republicans should be willing to consider increases in revenue -- not through higher tax rates but through eliminating tax earmarks, such as that for ethanol, and other expenditure that misallocates capital.

"Tax earmarks ... and other expenditure that misallocates capital"?

Read "tax expenditures," better yet, "tax loss expenditures."

Like your mortgage interest deduction, your charitable contributions deduction, your property tax deduction, your state and local income taxes deduction, and so on. All these benefits of the tax code misallocate capital, if you're a politician running the business of government, and you are just its employee.

That's who Tom Coburn is, the boss. He wants more of your hide.

His complete remarks are here.

Nearly 50 Percent of Americans Can't Come Up with $2K for an Emergency

Story here. NBER paper here.

Radiation in Iitate, Japan, at 3.09 Microsieverts Per Hour as of May 25

As reported here, 39 km northwest of the Fukushima Nuclear Power Station 1.

Normal for the area would be more like 0.11 microsieverts per hour.

The long term repercussions of a nuclear accident such as this have faded from the news, but they are real, on-going, extremely difficult to mitigate, and costly.

Cheap, safe production of such electricity is cheap and safe until it isn't.

HooooooooooooooooooWee! That's Refreshing!

Radiation Conditions at Fukushima Nuclear Power Station on May 23rd

Radiation level: 389 microSv/h at the south side of the office building, 16 microSv/h at the West gate, as of 09:00, May 23rd, 42 microSv/h at the Main gate, as of 10:30, May 21st.

More here.

Because of water leaking from the containments, the fuel in reactors 1-3 continues to be fully or partially exposed to the air.

Peter Fonda Advocates Shooting Someone Important

Gee, he must be pretty upset about something:

Peter Fonda, the star of Easy Rider, suggested to Mandrake that he was encouraging his grandchildren to shoot President Barack Obama.

“I’m training my grandchildren to use long-range rifles,” said the actor, 71. “For what purpose? Well, I’m not going to say the words 'Barack Obama’, but …”

He added, enigmatically: “It’s more of a thought process than an actuality, but we are heading for a major conflict between the haves and the have nots. I came here many years ago with a biker movie and we stopped a war. Now, it’s about starting the world.

“I prefer to not to use the words, 'let’s stop something’. I prefer to say, 'let’s start something, let’s start the world’.

“There’s no room any more for a cissy and, like I said, don’t forget that I’ve got grandsons who I’ve trained with long-distance rifles. We have to run like mofos to change this world.”

Peter Fonda, right-wing fanatic. Who knew?

(source)

Obama Regime Can't Even Plan Its Way Out of One of Its Own Embassies

Today in Ireland (video here):

Justice Now Means Exposing the Public to Criminals Due to Overcrowding

Your Supremes in action.

Nothing could be more wrong than being treated without "dignity"? How about murder? Rape? Armed Robbery?

Reminds me of Draco. When he couldn't think of a more appropriate punishment, death was ordered.

The Supremes have just committed the analog to zero tolerance in the schools, but in reverse. No crime is too bad to have to suffer claustrophobia!

We are doomed.

Story here.

Banks are Overwhelmed with Real Estate Owned

More than 872,000 properties, almost double the number from before the housing catastrophe began in 2007, are owned by big banks and lenders, according to a story from The New York Times reproduced by CNBC here.

Another million foreclosures are expected this year, and millions more in years to come.

It not being their stock-in-trade, they say, the banks are finding it difficult to process them all in through foreclosure, as we're all too familiar, and processing them out through sales. Something about not having adequate staffing.

Gee, where would you think they could find people ready to work those jobs?

Meanwhile, Obama is enjoying being president. That's the important thing. He's drinking beer in Ireland today, reconnecting with his roots. Isn't that nice?

US Senate: Den of Thieves

Trains for Transportation? Try Painful Transformation.

Patrick McIlheran for the Milwaukee Journal-Sentinel, here, describes a transportation policy being shoved down our throats as surely as was Obamacare, just saying No to which isn't going to stop them:

"Obama promised change, but it is you who will undergo it. In 2008, you were electing a whole new you."

Louis Woodhill Thinks Gold at $218 the Ounce is About Right

Here, based in large measure on what it can buy, in relative terms.

Here's a similar way to look at it from measuringworth.com, using the 1913 price of gold in dollars:

Either way you cut it, gold is presently overvalued.

Some Call This a Buying Opportunity

The Res Gestae Divi Obama: Chooser, Declarer, Charger, Believer, Promiser, Director, Memorializer, Giver of Thanks, Uniter, Interpreter of Events, Perserverer

Naw, we don't spike the football:

When I chose Leon Panetta as Director of the CIA, I said he was going to be a strong advocate for this agency and would strengthen your capabilities to meet the threats of our time.

And when I chose Jim Clapper as Director of National Intelligence, I charged him with making sure that our intelligence community works as one integrated team.

On my first visit, just months after taking office, I stood here and I said that this agency and our entire intelligence community is fundamental to America’s national security. I said that I believed that your best days were still to come and I pledged that you would have my full support to carry out your critical work. 

Soon after that visit, I called Leon into the Oval Office and I directed him to make the killing or capture of Osama bin Laden the top priority in our war to defeat al Qaeda.

My second visit, a year later, came under more somber circumstances. We gathered to pay tribute to seven American patriots who gave their lives in this fight at a remote post in Afghanistan. As has already been mentioned, their stars now grace this memorial wall. And through our grief and our tears, we resolved that their sacrifice would be our summons to carry on their work, to complete this mission, to win this war.

Today I’ve returned just to say thank you, on behalf of all Americans and people around the world, because you carried on. You stayed focused on your mission. You honored the memory of your fallen colleagues. And in helping to locate and take down Osama bin Laden, you made it possible for us to achieve the most significant victory yet in our war to defeat al Qaeda. 

I just met with some of the outstanding leaders and teams from across the community who worked so long and so hard to make that raid a success. And I’m pleased today that we’re joined by representatives from all of our intelligence agencies, and that folks are watching this live back at all of those agencies, because this truly was a team effort.

This is one of the few times when all these leaders and organizations have the occasion to appear together publicly. And so I thank all of you for coming -- because I think it’s so important for the American people to see all of you here today.

That’s why I came here.  I wanted every single one of you to know, whether you work at the CIA or across the community, at every step of our effort to take out bin Laden, the work you did and the quality of the intelligence that you provided made the critical difference -- to me, to our team on those helicopters, to our nation.   

After I directed that getting bin Laden be the priority, you hunkered down even more, building on years of painstaking work; pulling together, in some cases, the slenderest of intelligence streams, running those threads to ground until you found that courier and you tracked him to that compound.

In the months that followed, including all those meetings in the Situation Room, we did what sound intelligence demands:  We pushed for more collection.  We pushed for more evidence.  We questioned our assumptions.  You strengthened your analysis.  You didn’t bite your tongue and try to spin the ball, but you gave it to me straight each and every time.

And we did something really remarkable in Washington -- we kept it a secret.  (Laughter and applause.)  That’s how it should be. 

Of course, when the time came to actually make the decision, we didn’t know for sure that bin Laden was there.  The evidence was circumstantial and the risks, especially to the lives of our special operations forces, were huge.  And I knew that the consequences of failure could be enormous.  But I made the decision that I did because I had absolute confidence in the skill of our military personnel and I had confidence in you.  I put my bet on you.  And now the whole world knows that that faith in you was justified. 

That’s why I still believe in what I said my first visit here two years ago:  Your greatest days are still to come.  And if any of you doubt what this means, I wish I could have taken some of you on the trip I made to New York City, where we laid a wreath at Ground Zero, and I had a chance to meet firefighters who had lost an entire shift; police officers who had lost their comrades; a young woman, 14 years old, who had written to me because her last memory of her father was talking to him on the phone while her mother wept beside her, right before they watched the tower go down. 

And she and other members of families of 9/11 victims talked about what this meant.  It meant that their suffering had not been forgotten, and that the American community stands with them, that we stand with each other. 

Liberal Senate Republicans Stand in the Way on Passage of Ryan Budget

As reported here.

They might as well switch parties:

Mitch McConnell

Susan Collins

Scott Brown

Olympia Snowe

Kay Bailey Hutchison

Dick Lugar

Chuck Grassley.

Free Ticket

"Have we eliminated Social Injustice or Poverty? Or, has the unintended consequence been to create a Welfare State which has become a tool to destroy many American families? Have we not created an opportunity for millions to behave irresponsibly without personal accountability while taxpayers pick up 'the tab'?"

(source)