Top Ten Countries with Direct Banking Exposure to PIIGS

Since May 2010, banks of eight countries with assets directly exposed to the PIIGS group of countries have made considerable progress in reducing that exposure, based on the figures reported here, now and previously:

IRELAND ........ down 65 percent to $  31.7 billion

Netherlands ........ down 38 percent to $150.5 billion

Belgium ............... down 34 percent to $  78.2 billion

PORTUGAL ........ down 30 percent to $  45.2 billion

France ....... down 29 percent to $646.5 billion

Germany ..... down 24 percent to $532.7 billion

U.K. ............. down 17 percent to $347.2 billion

SPAIN............ down 15 percent to $126.8 billion.

Two additional countries, Austria ($36.8 billion exposed) and Switzerland ($56.4 billion exposed), join these eight in the top ten ranked by seriousness of exposure to PIIGS as a percentage of their bank assets. These are, in descending order:

UK, France, Portugal, Belgium, Germany, Netherlands, Austria, Spain, Switzerland and Ireland.

PIIGS ranked by the most owed to the banks of these ten countries are as follows:

Italy       $780.3 billion

Spain     $594.5 billion

Ireland   $357.4 billion

Portugal $189.5 billion

Greece   $130.0 billion.

Total owed by PIIGS to the banks of just these 10 countries:  $2.052 trillion.

Oh, Obama's Ignorant Dutch Sabotoogee, Eh?

"When it comes to genuine, pro-capitalist job-creation, Obama is a saboteur, in the original meaning of the word. Its root is sabot, which is French for “wooden shoe,” and it was such shoes (clogs) that insecure, ignorant Dutch workers threw into the gears of new machines centuries ago, hoping to impede output gains and prevent job losses among colleagues. To sabotage something means to purposely weaken or destroy it through subversion, obstruction and disruption. That’s what public policy does today to those who might hire labor." -- Richard M. Salsman, here

(video here, 1944)

Secretary of State Hillary Mussolini

Money Funds Inundated by Inquiries About Exposure to Euro Banks

Reported here:

"We've been inundated by inquiries on (our) exposure to French banks, to German banks, our direct exposure to Greece," said Peter Li, director in money markets at Northern Trust. "The profile of our portfolios has gotten very, very conservative."

America's Top Half of Income Earners Paid 36 Times More in Taxes in 2008

Individual income tax revenues in 2008 were $1.03 trillion on AGI of $8.43 trillion, for an effective overall tax rate on the individual American taxpayer of . . . 12.25 percent, to which add social insurance taxes and excise taxes.

The bottom 50 percent of Americans enjoyed a much lower rate, however, than the top 50 percent: 2.59 percent vs. 13.65 percent.

The top 50 percent in 2008 made 7X as much as the bottom 50 percent, and paid 36X as much in taxes.

And liberals say the rich don't pay their fair share.

(source)

Whose Side Are You On?

So asks Secretary of State Hillary Clinton of the US House.

Glenn Greenwald notices that in saying so, the Obama regime sounds just like the Bush regime.

Here.

None dare call it liberalism.

Liberals Deliberately Conflate Extension of Bush Tax Rates With New Cuts

As here. It's their, well, job to lie like this.

Steve Benen still expects us to believe that a reduction in the top rate from 39 percent to 35 percent, ten years ago, was a massive cut?

It would be nice if we could have some Republicans today actually proposing reducing top marginal tax rates to say, 28 percent. Now that would be a cut. But massive? From 70 percent, and 50 percent, yes (for a brief, shining moment under G.H.W. Bush, when 'Read My Lips. No New Taxes.' meant raising them anywhere north from 28 percent). But cutting taxes now anywhere south from 35 percent would be a massive cut? Puh-leeze.

Of course things haven't improved since the Bush tax rates were extended, temporarily. Nothing has changed.

Unless of course the Republicans want to argue that the extension averted another Great Depression.

But only Democrats could say such things with a straight face.

The Nation Rips Bill Clinton a New One for Enabling Financial De-Regulation Under Gingrich

An argument, here, with which we happily agree, except there's no discussion of the de-regulation of the homeowner, who, since 1997, has been able to forego taxes on up to $500,000 of gains on the sale of a principal residence every two years.

Smart couples plausibly have been able to milk this provision very profitably by flipping homes up to five times since then, until everything fell apart in 2008.

And don't forgot all those HELOCs whose capital was misallocated to financing automobile purchases, vacations, and other consumption not even remotely having to do with "home improvement."

The current housing debacle shows among other things, as Chris Whalen has suggested, how the entire post-war commitment to housing was a giant, civilizational misallocation of capital. More than anything, it was a failure of a sentimentality which developed in the wake of the de-moralization which forever destroyed the naivete of a nation. The de-regulation of the financial industry at the end of that road was only the logical conclusion of this process, its final outworking, not its cause.

Obama Regime Tries to Mollify Restless Natives, Releases Oil From Strategic Reserve

The bread and circuses continue.

Story here.

Combined with announcing an end to the surge in Afghanistan last night, the man who would be king is trying to remedy political and economic disasters of his own making.

The surge has been ineffective, and the drilling moratorium a disaster. So like FDR he'll just keep trying things in the hope that they will work.

Good thing we decided to limit presidents to two terms.   

S and P 500 Companies Sit on $800 Billion in Cash, A New Record

This sum, however, is still less than half the total of all corporate cash.

The story from John Melloy is here:

“This is a systemic problem post-Lehman,” said Larry McDonald, author of ‘A Colossal Failure of Common Sense, the Lehman Brothers Inside Story.’ “After a near death experience with the capital markets closed for a record 18 months, they've raised cash now and are cautious. Imagine if you're a CFO and you went through this near death experience.”

Do You Save $1,400 Each Year For Retirement?

I didn't think so.

Half of the country can't scrape together $2,000 for an emergency let alone for retirement. Meanwhile, $2,000 represents the median amount  individuals have saved for retirement, meaning half of you have set aside less than that.

Well, $1,400 is how much state and local governments want to raise your taxes every year for 30 years to pay for government (usually union) employee pension promises.

That sounds fair. You have very little saved for retirement, but you should pay huge sums in taxes every year so some paper pusher can look forward to a life of ease and entertainment at your expense.

The story is reported here.

Jon Huntsman and His Family are Thick as Thieves with Dem. Sen. Harry Reid

Gee, what a shock.

Story here.

Talk about over before he begins.

Republican Gov. Rick Perry of Texas: Democrat, Al Gore Operative and Opportunist

What?! Did I say "Democrat?"

Yes, I did.

Did I say, "Al Gore?"

Yes, I did.

As reported here:

Perry ... entered the Texas House in 1984 as a Democrat. He won reelection as a Democrat in 1986 and 1988, the same year he served as state chairman of Al Gore’s presidential campaign.

Whether Perry left the Democratic Party or the Democratic Party left him, to borrow a phrase from Ronald Reagan, is immaterial. He perceived the long term trend of rising GOP political power in Texas. He also spotted an opportunity to capitalize on that trend by running in 1990 as a Republican against a nationally recognized figure of liberal Democratic politics — Agriculture Commissioner Jim Hightower.

It Ain't Free Trade:Peter Navarro Rips China's Infractions of WTO Rules

Here:

The most potent of China's "weapons of job destruction" are an elaborate web of export subsidies; the blatant piracy of America's technologies and trade secrets; the counterfeiting of valuable brand names like Nike and Chevy; a cleverly manipulated and grossly undervalued currency; and the forced transfer of the technology of any American company wishing to operate on Chinese soil or sell into the Chinese market.

Each of these unfair trade practices is expressly prohibited both by World Trade Organization rules as well as rules established by the U.S. government, e.g., the Treasury Department has sanctions against currency manipulation (which, alas, the Obama administration refuses to use against China despite campaign promises to do so).

The only "candidate" who understood this was Trump. Navarro doesn't point to a replacement, but knows we need one.

The Fed Must Tighten, and Marginal Tax Rates Must Be Cut at the Same Time

So says Brian Domitrovic, here, but only if we want to stop stagflation.

Otherwise, just keep doing what we're doing, like we did in the 1970s.

TSA Operation VIPR Searches Cars and Trucks at Random at Port of Brownsville, TX

Obama's fascist police state flexes its muscles, and tightens its grip on your constitutional liberties.

The story is here.

Mother Jones is warning here of expanded Operation VIPR searches to come at train and subway stations, and ferry and bus terminals as TSA seeks expanded funding to add 12 VIPR teams to 25 existing units which already conduct 8,000 checks a year.

If they're doing that many already and we have to rely on stupid stories like this to learn about it, you know that the sheeple of the United States are just mutely complying, as they do at airports.

You know who you are, and you disgust me. Slaves all.

Huntsman is Pro-Gay, Tied to Log Cabin Republicans

The story is in Politico, here.

Like Romney, Huntsman Won't Sign Anti-Abortion Pledge

As reported on Rush's show today.

Zuckerman is Mortified: It May Be A Depression

He takes a long look at the depth of the unemployment problem, here, and concludes with this:

Gluskin Sheff's Rosenberg captured it perfectly: We may well be in the midst of a "modern depression."

Liberal Bizarro World Bait and Switch Tax Math

Just when I thought the headline "Payroll tax cuts rob the poor to feed the rich" meant that I was going to read a fine story by a liberal lamenting how the richest Americans, everyone making about $106,800 a year and "to infinity and beyond," don't pay Social Security taxes on all their income, I was met with this instead, that the present and proposed cuts in the payroll tax do nothing but finance the extension of the Bush tax cuts which, evidently, benefit only the rich:

Specifically, I'm talking about a new proposal to rob from Social Security to fund a continuing tax break for people who don't need Social Security — the wealthy. ...

It started back in December, when President Obama capitulated to the GOP on a budget deal by cutting the payroll tax, which funds Social Security. Advocates for the program pointed out then the shortcomings of this approach: It was targeted inefficiently and unfairly, skewing to the upper middle class and hurting lower-income families in comparison with the Making Work Pay tax credit it replaced.

Nevermind that the ten year Bush tax cut regime is responsible for the sorry state of affairs in which we presently find ourselves, with over 45 percent of the population paying nothing in federal income taxes, and a sizeable minority actually enjoying a negative tax rate whereby they receive government welfare through the tax code.

Nevermind that the latter is specifically designed as a subsidy to offset the regressivity of Social Security taxes on the poorest wage earners.

And nevermind that the future solvency of Social Security isn't really front and center in the author's mind, either.

What is Michael Hiltzik's greatest fear?

[O]nce you've cut a tax, it's ever harder to restore it.

You mean like abolishing the Bush tax cuts and thereby raising taxes on the poor by 50 percent?

I'll say.

Or how about this one?

In 2008, the top 14 million tax returns had AGIs totaling $3.8 trillion. If a liberal were really serious, he'd be advocating taxing all this income to make not just Social Security solvent, but Medicare, too. At 6.2 percent, we're talking an extra $236 billion of foregone tax revenue annually.

As tax loss expenditures go, it's the largest one I know of, by a long shot. But try getting people to focus on that one instead of my measly mortgage interest deduction, a tax loss expenditure of $88 billion.

Liberals are so caring.

Nike Drug Messages Upset Boston Mayor, Vulgarities . . . Not So Much

The story is here:

". . . an accepted expression for performance at the highest level . . ."

-- Nike

Yeah, if you're an elephant maybe.

Obama is Vulnerable: McCain Lost Because of Nine States, 1.38 Million Votes

Yahoo News repeats the myth here:

McCain lost to Barack Obama in 2008 in a race that was not close.

McCain's loss was actually very narrow, and attributable to two interrelated factors, as here:

1) he lost nine formerly Red states which went to Bush by just 1.38 million votes; that's 1.04 percent of 131.5 million votes cast; had these gone his way, he'd be president today, not Obama;

2) in those same states, Obama outperformed Kerry and McCain underperformed Bush by a margin of over 3.2 million votes; Obama turned out his vote in those states, McCain turned his away.

Republicans and independents won't vote like that again . . . unless of course Republicans buy up all the stupid pills at Walgreens and make McCain their candidate again.

Aging US Nuke Plants: 48 of 65 Sites With Tritium Leaks, Rusting Underground Systems

The AP has a long and detailed accounting here of its investigation of radioactive contamination of groundwater from leaks at 75 percent of the US nuclear power sites where 104 aging reactors routinely get re-licensed by an industry-compliant US Nuclear Regulatory Commission, despite mounting evidence of problems associated with deteriorating underground infrastructure.

Perhaps most troubling is the fact that much of what is rusting underground would be depended upon to bring critical cooling water to the plants in an emergency, but they don't routinely test it or inspect it.

Meanwhile, 110,000 tons of cooling water contaminated with radioactivity has piled up at Fukushima in Japan and threatens to go to sea unless operators can get a de-contamination facility working properly.

Neither this nor our own problems with nuclear power have done much to move our feckless leaders in either party, while Barack Obama enjoys a very cozy relationship with GE head Jeff Immelt, whose company built many of the units in question, including the ones which have melted down in Japan. 

Too busy golfing.

Government Interest Payments as a Percentage of GDP

As reported here:

Greece            6.7 percent

Italy                4.8 percent

Portugal          4.2 percent

United States  2.9 percent.

The Left in Wisconsin is Falling Back, and Calling in the Lawyers for Cover Fire

So says the Milwaukee Journal-Sentinel's Pat McIlheran, here, who moves on to a new assignment.

We wish him well.

Here Come The Bird and Insect Drones: They'll Be Hiding in Plain Sight, Watching You

The New York Times has the story, here:

In February, researchers unveiled a hummingbird drone, built by the firm AeroVironment for the secretive Defense Advanced Research Projects Agency, which can fly at 11 miles per hour and perch on a windowsill. But it is still a prototype. One of the smallest drones in use on the battlefield is the three-foot-long Raven, which troops in Afghanistan toss by hand like a model airplane to peer over the next hill.

Fukushima Cooling Water Requirements Total 500 Tons Per Day

The water gets contaminated with radioactivity and must be stored on site. A new system to decontaminate this water was unsuccessfully tested on Friday.

NHK World reports here:

Contaminated water is increasing by 500 tons a day as fresh water is continuously being injected into the reactors to cool them down.

The storage facilities for the contaminated water are filling up and a delay in restarting the system could cause the water to overflow [into the sea] in about a week.

A story via Reuters here says 110,000 tons of the stuff has already accumulated since 3/11 and that space is running out.

The Indignants of Spain: 'We are not property in the hands of politicians and bankers'

Their story, here, is also our story.

Our politicians and bankers also view us as their property, indeed their slaves. It doesn't make much difference if it's your job that's theirs, or your mortgage, when the politicians are owned by the bankers.

We view them both as our tyrants, slaves also like us, but turned inside out.

Our answer?

NO, to either condition!

RINO Romney Won't Affirm Pro-life Position

Bachmann pins him to the wall. Story here.

Christopher Hitchens: You Can Take the Liberalism out of the Brain Dead Liberal . . .

. . . but he'll still be brain dead.

"From a playwright, however, one might also have expected some discussion of what the Attic tragedians thought: namely, that tragedy arises from the fatal flaw in some noble person or enterprise."

In the New York Times, here.

And for someone who has concluded that the founders were playing swine off against each other in writing the constitution in the way that they did, the absence of the discussion of Attic tragedy is doubly disappointing.

A hole in his education, and that of his Republican rabbi, perhaps. No one knows everything, not even Hitch. Tragedy at 11.

After QE2 Ends It Continues, But on a Far Less Grand Scale

At least for the time being.

Tom Petruno for the LA Times notes:

The Fed may be slow to consider more stimulus for another reason: It still will be reinvesting the proceeds from its total $2.6-trillion securities portfolio in more Treasuries. And the central bank seems certain to keep short-term interest rates near zero for the time being. So in Fed parlance, policymakers remain very "accommodative" for growth.

Readers are left to wonder just how much money is involved when the Fed reinvests "the proceeds from its total $2.6-trillion securities portfolio."

According to the Federal Reserve, here, the earnings of the Fed in 2010 break down as follows:

The Reserve Banks reported comprehensive income of $81.7 billion in the year ended December 31, 2010, up from the year prior.

Total comprehensive income included interest earnings of $44.8 billion on the federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS) holdings,

$26.4 billion on holdings of U.S. Treasury securities,

and $3.5 billion on holdings of government-sponsored enterprise debt securities.

In addition, total comprehensive income included interest income of $3.5 billion on loans to depository institutions and others.

The consolidated LLCs contributed to the Reserve Banks’ comprehensive income, with net earnings of $7.6 billion for the year ended December 31, 2010. ...

Net earnings from the [System Open Market Account] portfolio were approximately $76.2 billion; most of the earnings were attributable to interest income on Treasury securities and federal agency and GSE MBS.

So compared to the QE2 program of $600 billion in purchases, the Fed's intention to reinvest the proceeds of about $75 billion annually in like instruments represents a continuation of the program, but scaled back by roughly 85 percent.

Various scenarios for the unwinding of the Fed's massive balance sheet are discussed here.

The Problem with the Public Schools is that the Teachers are Illiterate

From The Wall Street Journal:

"People who come out of college with a degree in education and not a degree in a subject are severely handicapped in their capacity to teach effectively," Mr. McCullough argues. "Because they're often assigned to teach subjects about which they know little or nothing." The great teachers love what they're teaching, he says, and "you can't love something you don't know anymore than you can love someone you don't know."

Much more here.

Under Bair, FDIC Sought and Won Powers Nothing Short of Fascist

With Sheila Bair out after five years, the authors of this piece in Forbes don't exactly call a spade a spade, but their message is unmistakeable nonetheless:

The legislation [Dodd-Frank] granted the FDIC additional powers, including the extraordinary power to liquidate systemically important non-bank institutions.

One nation, under the banks and for the banks, and anyone else large enough to give us a campaign contribution or a job when we leave office.

Working it, as ever.

Joe Nocera Takes a Look at the Passage of the Glass-Steagall Act in 1933

For The New York Times, here.

Glass-Steagall separated investment banking from commercial banking and created the FDIC to protect the latter.

Nocera fails to note how the abolition of Glass-Steagall in our time left the FDIC in place to protect the former, which leaves taxpayers on the hook for the speculative failures of the trading desks of the big banks.

He poo-poos the Republican charge in 1933 that it all amounted to socialism. He's right. It's fascism, and it has gotten a whole lot worse.

Jim Cramer Defends His October 2008 Sell Advice

Here was his advice on Monday, October 6, 2008 on The Today Show:

“Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”

The market free-fall had already begun after September 19 when this index was still above 1200. Selling two weeks into this crash was like trying to catch a falling knife. The time to bank one's profits had been after a pull-back from the highs over 1500, at the 1400 or even the 1300 level, not after a "mere" 100 point pull-back from 1200 to 1100. By then the time for action had already passed, over 400 points off the highs on the S and P 500.

"I know I have been castigated for having told people to sell stocks to raise money for anything they might need for five years, a solid attempt by me to really warn people who were counting on stocks for retirement and college tuition when we were at Dow 11,000 and Dow 10,300.

The assumption at the time was that things were bad -- like now -- but that it was worth buying and holding and 'riding it out.'

I didn't think so. I thought it was better to sidestep it and then come back when the coast was clear . . .." (source)

He's now laying out what a worst case scenario going forward would look like this time around, apparently in order to be able to say "I told you so" if we have another crash. 

Liberal Grotesque: Obama and the Cleft Lips

"During the fight over the financial reform bill, the administration consistently took the positions for which the banks were lobbying. Obama and his team were eager to weaken the “Volcker Rule" . . . [B]anks were given massive loans at or near 0 percent from the Fed . . . The administration sided with the banks in keeping the Consumer Financial Protection Agency inside the Federal Reserve . . .."

-- Eric Alterman, here, true believer, who nevertheless saves his real indignation for Wall Street

Incompetent FBI Stormtroopers Raid Address Vacated by Suspect Two Years Prior, Terrorize Renters

The incident occurred in March and is now the subject of a Fourth Amendment lawsuit.

The story is here.

White House Spokesman: "We've created more than 2.1 private sector jobs"

Oh yeah? Prove it!

Here.

David Tyree Stands Up For Traditional Marriage

"You can't teach something that you don't have, so two men will never be able to show a woman how to be a woman."

"This [gay marriage] will be the beginning of our country sliding toward, it's a strong word, but anarchy."

"How can marriage be marriage for thousands of years and now all the sudden because a minority, an influential minority, has a push or agenda ... and totally reshapes something that was not founded in our country."

Quoted here.

Another One Who Hates Your Mortgage Interest Deduction: Felix Salmon

Here.

By his own admission he wants to spend the $100 billion tax loss expenditure on some big government fantasy of his own, instead of letting you keep it to raise a family in a safe environment of your own choosing where the kids don't have to be exposed to the low lifes who inhabit . . ..

Well, you get the idea.

These people have no use for families. Where the hell do you think the future country comes from?

Pawlenty, Huntsman and Daniels are Not Real Conservatives: They're Bushies

And owe fealty to the family which turned its back on the Reagan revolution:

Huntsman is the second 2012 GOP White House hopeful to meet with the former president. Former Minnesota Gov. Tim Pawlenty visited with Bush at the former president's office in Houston, Texas a few weeks ago.

The meetings raise eyebrows, as many senior political advisers from both Bush administrations still don't have a candidate to support in the battle for the GOP nomination, especially with Indiana Gov. Mitch Daniel's announcement Sunday that he would not make a bid for the White House.

(source)

Jon Huntsman Admires Not Getting Many Things Right The First Time

Lyrics from one of Jon Huntsman's favorite artists, as heard on The Laura Ingraham Show, this morning:

I don't get many things right the first time,

In fact i am told that a lot.

Now i know all the wrong turns ands tumbles and falls

Brought me here. ...

Ben Folds Five, "The Luckiest"

Yeah, that's all we need . . . another president who doesn't get many things right the first time.

The Eerie Way 'Obama' Rhymes With 'Hoover'

From Walter Russell Mead:

Like Obama, Hoover was the child of a broken home with an unconventional background. He was far more widely traveled than most Americans in his day, and his time overseas made him a globalist in his thinking in many ways. His wife (Lou Henry Hoover) was unusually well educated and assertive — at a time when few women went to college, she graduated from coeducational Stanford with a degree in geology. Hoover was an unconventional candidate who came into office on a tidal wave of support.  Hoover, Secretary of Commerce during the Roaring Twenties, had never held elected office before winning the presidency. His campaign went deep into enemy territory, winning over solidly Democratic states in what was still the deep blue South including (like Obama) Florida, Virginia and North Carolina.  Hoover was the great progressive hope of his day — he had supported Teddy Roosevelt’s 1912 Bull Moose campaign and was seen as much more forward looking and progressive than the party machine.  He ran on the most diverse presidential ticket until Barack Obama’s own election in 2008; Hoover’s running mate, Kaw nation member Charles Curtis, was the first Native American and the first American with significant non-European ancestry to serve as Vice President of the United States. Hoover continued to burnish his diversity credentials in the White House; he was the first president since Theodore Roosevelt to invite an African American to a White House dinner and he wanted progress on Native American issues to be a hallmark of his administration. Hoover was also deeply concerned about the health of the middle class and the condition of the poor. He was an early backer of the long term, low interest mortgage that became the cornerstone of middle class finance, and he came into office hoping that prosperity would eliminate poverty in the United States.

The similarities in office are just as interesting, here.

Gov. Walker Wins in WI, Supreme Court Smacks Down County Circuit Court Judge as Usurper

As reported here by The Milwaukee Journal-Sentinel:

In its ruling Tuesday, the Supreme Court said it took up the case because the lower court had "usurped the legislative power which the Wisconsin Constitution grants exclusively to the Legislature."

The Democrats, the unions and courts in Wisconsin all behaved disgracefully in trying to stop the legislatively elected will of the people to find its expression through the due process which the Republicans followed.

Rush Limbaugh: "Agreement between people does not make something true."

On the show, Friday, June 10, 2011.

States of Disaster Depended on $316 Billion of Federal Stimulus in Last Fiscal Year

And that help for current operations is coming to an abrupt end as the new fiscal year begins on July 1.

The Associated Press reports, adding these staggering numbers on top of the current budget data:

The 50 states have a combined $689.5 billion in unfunded pension liabilities and $418 billion in retiree health care obligations.

Read the complete details here.

ObamaCare, Medicare, and Social Security aren't the only back-breakers out there. The individual states have plenty of their own which they can't pay for, either. The whole country is stuck on stupid spending.

4 out of 5 New Mortgages Require 20 percent Down

I'm shocked, shocked, I tell you.

Story here.

Landlords Are Raising Rents!

5 percent this year, and 5 percent next.

Story here.

Quantitative Easing and its Affects in Three Sentences

"[The Fed's] Treasury purchases reduce the quantity of risk free assets, forcing investors to buy riskier assets. Commodities are among those risky assets.

By monetizing the debt, the Federal Reserve is debasing paper money and investors are seeking for tangible assets, things that hurt when you drop them on your foot, as one colorful commentator put it."

-- Marc Chandler, here

Why Quantitative Easing is Here to Stay

It looks like in saving the banks from drowning, the Fed, the dollar, and the country are headed for Davy Jones' Locker.

From Michael Pento:

The truth is that without the ability to fully withdraw prior liquidity the Fed is incapable of significantly raising interest rates. After all, the Fed can't raise rates by fiat. It must sell assets to do so. Similarly, to support the dollar it must take money out of circulation, which is also accomplished by asset sales.

But the Fed's arsenal is no longer stocked with high grade weaponry.

As the rest makes plain, here, its stockpile is full of duds.

Why Hold Bonds in Tax Protected Accounts and Stocks Outside Them?

"Bond coupons are taxed as ordinary income. Stock dividends are taxed more lightly."

-- Brett Arends, here, on a completely different topic.

The Turning Currents of Sarah Palin's Vulgarized Mind

Even after a very long relationship, John Ziegler can't quite seem to put his finger on Sarah Palin's problem in the essay excerpted below. There's hardly a man alive who can diagnose the feminine disease, blinded as men are to women by their own passions, but Jonathan Swift came close: "The current of a female mind stops thus, and turns with ev'ry wind."

Ziegler didn't realize it, but he was on to it, here:

“Hi, John Ziegler, this is Governor Sarah Palin,” said the familiar voice on my phone message. There was a pause. “From Alaska,” she added. It’s typical of Sarah’s underappreciated sense of humor to pretend this needed to be clarified. “I just sat down and watched your movie about 9/11,” she went on, “and it’s unflippin’ believable”—”flippin’” is one of her favorite expressions—”I would like to talk with you about this next documentary. Could you give me a call?”

At this point, Sarah and I had met only once, but we were already developing a bizarre relationship. Over the almost three years that followed, we would often act like friends—while at other times she would act like she barely knew me.  

The Current Shape of the 78 Year Emergency

Robert G. Wilmers, a defender of community banking, doesn't explicitly mention the abolition of Glass-Steagall, but he lays out some of the consequences of that nonetheless, one of which is that the FDIC is now on the hook for the mistakes of speculators, something it was never intended for:

In 1990, the six largest financial institutions accounted for 9 percent of all U.S. domestic deposits. As of Dec. 31, 2010, the six biggest banks accounted for 36 percent of deposits. ...

In 2010, the six largest bank holding companies generated $56.1 billion in trading revenue, or 74 percent of their $75.7 billion in pretax income. ...

The Big Six institutions earned more than 93 percent of the trading revenue generated by all American banks during the past two years. ...

The major Wall Street banks operate under the taxpayer-backed umbrella of the Federal Deposit Insurance Corp. and, as we saw in 2008, the Treasury Department and the Federal Reserve. To pay for the cost of such protection, legislators and regulators have forced thousands of Main Street banks like the one I run to absorb a larger, more expensive set of regulatory costs, including higher capital and liquidity requirements. ...

Regulators have failed to distinguish between trading activity and traditional banking, or to recognize that the activity of an institution, not its form, should be the proper focus of oversight.

New Rules Needed

Main Street banks are heavily regulated -- and have been for generations -- to ensure their safety, soundness and transparency. A new generation of regulation must now be applied to what has become a virtual casino. ...

Those financial institutions that engage in trading should live and die by the pursuit of their fortunes, rather than impose a burden on the whole economy.

It’s time to disentangle the trading of big financial institutions from their more traditional commercial banking operations and put an end to this unsafe business model.

Make sure to read his entire op-ed at Bloomberg, here.

Will 'Buy and Hold' Soon Mean Just Minutes?

Jack Hough wonders in a fascinating little story about high frequency trading, here, in which we learn that program trading by some estimates now accounts for more than 75 percent of the volume.

Just one of the reasons I remain out.

'High Frequency' or 'Program Trading' is on the Rise in Asia

So says a recent story from Reuters, predicting it will take only three to four years for Asia to catch up to the US:

Japan is the only market that comes close right now to the HFT seen in western markets. ... [T]he proportion of trades classified as high frequency [is] around 30 percent . . ..

High frequency trading now accounts for as much at 70 percent of turnover in US equity markets, where have HFT systems are dealing with up to 2.3 million messages per second in some cases.

Read the full story here.

Quantitative Easing Was 'Cash for Spelunkers'

Jed Graham made the case last November here, and now notes that among other commodities, gold is $200 an ounce higher.

Absent more Fed purchasing of Treasuries, look for commodity price deterioration.

Sarah Palin: The Vulgarian Streak Runs Deep

If Sarah Palin is supposed to represent a resurgent social conservatism, her fascination with all things 'WTF' speaks against it.

I had forgotten this one, which Toby Harnden of The UK Telegraph recalls here a couple of days ago, breezing right over it:

The notion of Mrs Palin as White House kingmaker would have seemed wildly improbable if anyone had raised it before August 2008.

It was then that she was catapulted to international fame by Senator John McCain’s surprise decision to make her his vice-presidential running mate. Her reaction? “Can you flippinbelieveit?!”

Cleaning out the alcohol from the Alaska governor's residence was easy by comparison.

"Not that which goeth into the mouth defileth a man; but that which cometh out of the mouth, this defileth a man."

-- Matthew 15:11

Addison on criticism

 

A critick is a man who, on all occasions, is more attentive to what is wanting than what is present.

-- Joseph Addison

The Nine Rebellious Stripes

DE PA NJ CT MA MD SC NY RI

ObamaCare's High Risk Pools Flop, Only 18,000 Sign Up as of March

So says Megan McArdle here:

I've predicted that lots of parts of Obamacare will not work the way they're expected to.  But here's one I wouldn't have predicted: the high-risk pools, which were meant to tide people over until 2013, have signed up just 18,000 people as of March.

There were supposed to be millions of people who were uninsurable because of pre-existing conditions.  We heard lengthy testimony about their terrible plight.  I don't think it's too strong to say that this fear . . . was one of the main reasons offered for the health care overhaul.

Which just goes to show you that fear is a lousy reason to do anything, except run like hell from a bureaucrat wielding a butcher knife against your way of life.

The budgeted amount for the program was $5 billion to cover about 200,000 enrollees until ObamaCare kicks in in 2014, even though the Medicare actuary predicted there would be 400,000 enrollees (doesn't this tell us that we ought to wonder about everything else the Medicare actuary predicts?).

Now they're changing the rules to make it easier and cheaper to sign up for the high risk pools so the regime can say the program is a success. 

Top 5 Radiation Hot Spots of 50 Air Measurement Points Inside Fukushima 20 km Zone

Okuma town is the hardest hit at points 2.5 to 5 km distant from the nuclear power plant:

Koirino 93.9 microSv/hour

Ottozawa 68.4 microSv/hour

Kumagawa 41.2 microSv/hour

Shimonogami 35.6 microSv/hour.

Futaba town, 5 km distant, also has many points with high readings, the highest of which is:

Nagatsuka 30.8 microSv/hour.

The measurements were made June 3 and reported here.

Normal readings would be more like 0.11 microSv/hour.

It's been three months since the tsunami and meltdowns.

A Vote for a Mormon is a Vote for the Flip-Flop as an Acceptable Principle

And Mitt Romney epitomizes this ethos already.

From Warren Cole Smith here:

Mormonism is particularly troubling . . . because Mormons believe in the idea of "continuing revelation." They may believe one thing today, and something else tomorrow. This is why Mormons have changed their views, for example, on marriage and race. Polygamy was once a key distinctive of the religion. Now, of course, it is not. Mormons once forbade blacks from leadership roles. Now they do not. What else will change?

Your Healthcare Future: Door Number One, Door Number Two, or Door Number Three?

Shikha Dalmia chooses door number three:

ObamaCare is the worst thing that could happen to seniors in their old age; inaction is the next and RyanCare is the least bad. As a senior in the making, if those were my only options, I would ignore Democratic demagoguery and take RyanCare in a heartbeat.

ObamaCare, however, I’d avoid like the plague.

Follow the link here to find out why in "Medicare's Least Bad Fix."

Main Street, Obamaville: All Bumps, No Road

From the inimitable Mark Steyn, here:

The American Dream, 2011: You pay four bucks a gallon to commute between your McJob and your underwater housing to prop up a spendaholic, grabafeelic, paramilitarized bureaucracy-without-end bankrupting your future at the rate of a fifth of a billion dollars every hour.

In a sane world, Americans would be outraged at the government waste that confronts them everywhere you turn: The abolition of the federal Education Department and the TSA is the very least they should be demanding.

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.