How Much of Your Money Market Fund is in the Repo Market?

Just days ago it seems we were worried sick about money market exposures to European banks who are in turn exposed to the PIIGS.

Overall US money market funds have had just under half of their assets in short term European investments, meaning that US cash savers in such funds are actually providing perhaps as much as several trillions of dollars in liquidity to Europe's stressed banks and sovereigns.

Now Jim Jubak thinks money market exposures to the repo market should also worry people, here:

My big worry is that the current slow erosion of faith in U.S. Treasurys will turn into a cascade of unanticipated consequences if the debt ceiling isn't raised. Treasurys play a unique role in the global financial markets. They aren't important only because they're jammed into so many global portfolios, including the portfolios of so many of the world's countries. They're also important because they serve as collateral on a huge percentage of the complex deals that use derivatives to shift risk around the globe. ...

Treasurys are used as collateral for cash loans in the repo (repurchase) market. In a repo agreement, the seller of a security agrees to buy it back from a buyer at a higher price on a specified date in the future. Repos are, in effect, short-term loans; they are used to raise short-term cash by banks and corporations. Central banks, such as the Federal Reserve, also use them to manage the money supply. To expand the money supply, the Fed decreases the repo rate at which it buys back government debt instruments from commercial banks. To shrink the money supply, the Fed increases the repo rate.

It's a huge market. Bank of America Merrill Lynch estimates that 74% of primary dealer repo financing -- or about $2.1 trillion -- involves Treasurys as collateral. ...

Money market funds have big chunks of their cash in the repo market. (Anyone who remembers the problems that the Lehman crisis created for money market funds should regard any advice on using money market funds as a safe haven in the event of a U.S. default with extreme skepticism.)

North Carolina Dept. of Transportation A Little Hacked Off At Obama

For what reason, we do not know, but the sign displayed the message over the weekend and motorists pulled over to take pictures.

The story is here:

The Bernanke S and P After 2 Rounds of Quantitative Easing

600 points for $2.5+ trillion in MBS and Treasuries.

Ben Bernanke: The Very Face of Moral Hazard

Senator Jim Bunning (R-KY), quoted here:

“You are the very definition of a moral hazard.”

Damn Right Gloria: The Tea Party Stopped The Transformation

And we aim to reverse it.

Video here.

Pay It Down Now, Or Pay A Lot More Later

“I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”

-- James 'Cue Ball' Carville, quoted here

Will Government Be Short $134 Billion In August as Bob Brinker Claims Today?

He made the claim on his radio show, "Money Talk." See the recap here.

Others, as for example here, maintain there's plenty of cash flow to pay for everything critical both in law and for creditworthiness:

"The Daily Treasury Statement for June 30—which any American, including the president, can look up on the U.S. Treasury Department’s website at this link—says the government took in $196.994 billion in revenue during the month ... more than enough to pay not only all Social Security benefits and veterans benefits and programs for the month, but also, on top of that, the interest on the federal debt, Medicare, Medicaid, the Indian Health Service, Temporary Assistance to Needy Families, all federal workers’ salaries, federal workers’ insurance benefits, Justice Department programs, and Defense Department venders.

"The combined costs for all of these federal expenditures in June was $195.502 billion.

"That means that out of the federal government’s $196.994 billion in revenue in June, the government would have had a surplus of $1.492 billion after it had paid the interest on the national debt, plus all Social Security benefits, veterans’ benefits, veterans’ programs, Medicare, Medicaid, the Indian Health Service, Temporary Assistance to Needy Families, federal workers’ salaries, federal workers’ insurance benefits, Justice Department programs, and Defense Department vend[o]rs."


Isn't it the potential of cutting off the cash cow for extraneous government spending which really has liberals like Brinker in a fit? After all, he called Senator Harry "The War is Lost" Reid of Nevada "a good man" more than once on his show. Brinker loves the guy.

How is it that Brinker can assert, as he did today, that advocating against raising the debt ceiling, as certain Republicans are doing presently, disqualifies one for the presidency when Obama actually voted against raising the debt ceiling in 2006, along with all the rest of his Democrat colleagues in the Senate? The Roll Call vote is here.

The minions of liberals in the federal workforce might actually have to THINK going forward and prove their competence for their exorbitant salaries by PRIORITIZING spending for a change if Republicans muster the courage to force them TO DO THEIR JOBS and leave the debt ceiling where it is. Raising the debt ceiling is the true default: It means you can't pay your bills without more borrowing.

Maybe Bob Brinker is afraid the Democrats are not really up to it. They certainly haven't been in the past. We're still waiting for a budget proposal from the Senate. The Senate under Reid hasn't passed one in over two years.

Obama Proves The Rule: Stoners Can't Remember Dates

Not only can he not remember his daughter's birthdate, he can't remember his own.

Story here.

Nor quantities and sizes: Obama's America has at least 57 states and hundreds of millions of inhabitants.

US Money Market Funds Are Keeping The PIIGS' Banks Liquid

So says Felix Zulauf, here:

[T]he banks, particularly at the periphery, are refunding themselves via the U.S. money market that is extremely liquid, and half of the money in the U.S. money market funds is really money to fund the peripheral European banks. Once those money market funds get hit by redemptions because investors find out, then you have a funding crisis of major scale at the periphery of Europe, and that is the next step. It is a never-ending drama until it breaks in a big way.

The Dollar, Then and Now

In 1913, when the Federal Reserve came into being, the 1790 Dollar had lost little value over the preceding 123 years. You needed just $1.08 to buy what a 1790 Dollar could buy.

58 years on from 1913, however, when the Dollar and Gold were finally and completely de-linked from one another in 1971, that 1913 Dollar worth $1.08 had lost over 300 percent of its value. You needed $4.56 in 1971 to buy what $1.08 could buy in 1913. Much of the devaluation of the Dollar occurred in 1933 when FDR confiscated Gold and then reset the price per ounce at $35.00 from $20.67, a 70 percent devaluation almost overnight.

By 2010, just 39 years on from 1971, that $4.56 really went south. Completely unhinged from Gold, you now needed $24.50 in 2010 to buy what $4.56 could buy in 1971. That 1971 Dollar worth $4.56 had lost over another 400 percent of its value.

Carthago delenda est? Try: Down with the Fed!

Woman Gropes TSA Agent!

It's about time!

Story here.

Obama's Got The Better Approach? Granny Hawkins Begs To Differ.

"I’m confident that I will win that [debt] debate because ... we’ve got the better approach.”

-- President Obama


Granny Hawkins:

I say that big talk's worth doodly-squat.

Moody's Downgrades 7 Portuguese Banks Which Just Passed EU 'Stress' Tests

The laughs never stop.

Story here.

DC Circuit Court Rules Naked Body Scans Do Not Violate Fourth Amendment

Because they're optional.

As in you can either get photographed naked, or groped, without which you are not "free to fly about the country."

Some option. Papers will be next. And then every form of transportation you  take will make you subject to unreasonable search and seizure.

Just roll over and take it, bitch. You'll enjoy it.

Story here.

Rep. Sheila Jackson Lee Confuses Not Getting Your Way With Racism

Pretty soon anyone who says No to anyone will be a racist, too.

Story here.

'If Obama Cuts Medicare or Social Security, I'll Vote Communist'

Chicagoan Mary Ellen . . . Croteau was asked if she would still vote for Obama, "No I won't . . .. Not if he cuts Medicare and Social Security. I'm 61. I'm looking at retirement in a few years."

". . . I will vote for someone. Whether it's a Green candidate, whether it's a Communist, I don't care. Somebody who's going to stand up for people. This is disgusting. [Obama] has given away everything he pledged to stand for."

Read the full entry here.

Dr. Obama Prescribes The Same Old Medicine Of The Miserable

"I always have hope. Don't you remember my campaign? [laughter] Even after being here for two and a half years, I continue to have hope. You know why I have hope? It's because of the American people."

Video here.

The miserable have no other medicine,

But only Hope:

I've hope to live, and am prepar'd to die.

     -- Claudio, William Shakespeare's Measure for Measure, Act III, Scene I

Rasmussen Poll, Like Gallup, Shows Low Support For New Taxes at 34 Percent

Again, as part of a debt limit increase measure. While Gallup has 50 percent wanting spending cuts as the primary feature of the legislation, Rasmussen shows that at 55 percent.

The poll results are here.

Obama Says 80 Percent Want Balanced Approach, Gallup Says 32 Percent

Only 11 percent want a predominantly tax approach, while 50 percent want a predominantly spending cuts approach.

See Gallup here, and Obama here.

Why Michele Bachmann Won't Be President

TMI.

Is Tim Pawlenty "The Unnatural"?

There's a certain metaphysical quality to the guy. And we're not talking Platonic philosophy.

The New Republic tries to explain, here.

Ann Althouse Calls Obama A Liar

Well, yeah. And you thought reading was fundamental.

"Obama lied about a central fact about his own life which he used — powerfully — to push health care reform."

I wonder if he ever lied to his own mother.

Democrats Under Obama Were The First Since 1974 Not To Pass A Budget

So Mona Charen, here:

Unlike Republicans under President Bush, Democrats were in full control of the federal government from January 2009 until January of 2011. Despite a 77-seat majority in the House, an 18-seat majority in the Senate and a Democrat in the White House, the Democratic Party became the first since budget rules were enacted in 1974 to fail to pass a budget. Budgets are clarifying. So is the failure to produce one.

Democrat Rick Perry Once Voted For Texas Size Tax and Salary Increases

. . . Back in the 80s, when now Republican Governor of Texas Rick Perry also worked for Al Gore.

The New York Times is happy to tell you, here.

For Mockery of Fiscal Conservatism, You Can't Beat MarketWatch

As here.

Being a commie must be a line item check-off on the job application. 

When the counter-revolution comes, those guys better watch out.

America is Completely Insane: TSA Pats Down Titanium SECDEF Rumsfeld

Story here.

The Atlantic Doesn't Really Care What Kind of Nut Michele Bachmann Is

Just that you know she's a nut.

Joshua Green here thinks she's a Wisconsin Evangelical Lutheran anti-Catholic nut, even though she's formally separated herself from the group after many years.

The reason surely has to do with theological views she has which are errors according to these Lutherans. Green would like Bachmann to be all about the Lutheran position that the pope is the Antichrist, a position Bachmann has gone on record disavowing.

You'd think Green would dig a little deeper because of that, say at Salon here or especially Mother Jones here, to gain a little wider appreciation for Bachmann's interest in an apocalyptic timetable at the center of which is the state of Israel, and the dispensationalism and millennialism which goes with it, all of which are eschewed by Lutheran interpretation.

Lutheranism is amillennial, and Pauline in its insistence that the Church is the Israel of God, and has replaced it in the world. For Lutherans, the state of Israel is theologically irrelevant. And therefore it is impossible for them that one's relationship to the state of Israel could be talismanic in any way, as Bachmann appears to believe.

For end times enthusiasts like the Congresswoman, the Antichrist is an historical personage who is revealed before the end of the world, not a spirit of error who perennially inhabits the seat of Roman Catholic false doctrine, as the Lutherans believe.

I don't find it surprising at all that Bachmann has parted ways with Lutheranism in the light of these facts. What is surprising is that it took her so long.

She may herself be still quite confused about much of this. Lots of Christians are, and spend inordinate amounts of time trying to figure it all out. But who can really say, except Bachmann herself? About that Green is correct.

The political ramifications for Bachmann's presidential run are not inconsiderable, since many of the people on all sides of these issues in the churches are her potential base of support. For fervent believers as many of them are, positions taken on these issues can be fundamentally alienating.

It's fascinating in a way . . . kind of like a train wreck.

Social Security Tax Cut For 2011 Adds To Stress In A Government Shutdown

The revenue lost to Social Security, about $120 billion in 2011 due to the temporary tax cut, will be reimbursed to the Trust Fund from income tax withholding, over two years, not one. That means that with annual deficit spending already at $1.5 trillion, in a shut down there's even less cash flow to count on if $5 billion in funds are being siphoned off for this purpose monthly.

TheHill.com explains here:

The tax cut will put roughly $120 billion into workers’ pockets. Perhaps $90 billion of this, or three quarters, will be spent. This could provide enough of a boost to GDP to create more than 300,000 jobs. 

Also, the Social Security trust fund will be reimbursed for the lost revenue. Under the deal that President Obama worked out with the Republican leadership, funds from general revenue will replace the lost tax revenue for the next two years. This means that the tax break will have no effect on the long-term solvency of Social Security.

Doh!

Treasury's Own Figures Show It Has Plenty of Cash Flow To Pay Seniors

[A]ccording to the Daily Treasury Statements published by the U.S. Treasury Department, the ongoing flow of federal tax revenue since the Treasury declared that it had hit the debt limit on May 16 has been more than sufficient to cover the combined costs of federal spending on interest payments, Medicare, Medicaid, Social Security, the Veterans Affairs department and federal workers wages and insurance benefits (including wages and insurance benefits for military personnel).

All the figures follow at the link here.

In 2009 Only 10.5 Million Americans Still Got Paper Checks From Social Security

Tens of millions use direct deposit instead:

[A]bout 10.5 million Americans still receive their Social Security and Supplemental Security Income (SSI) payments by paper check each month.

Read the full story here.

Obama Would Be Breaking The Law If He Stopped Social Security Checks

Obama must issue Social Security checks. They're mandatory, not discretionary.

The authority to issue Social Security checks is outside the scope of the president's decision-making authority.

He would be in violation of the law if he ordered them stopped. So would The Treasury Department. 

The Social Security trust fund receives regular infusions from income specially withheld from paychecks for the purpose. Its income is presently in equilibrium with its outflow.

Neither the president nor the Congress can lawfully interfere with this process.

The president is a scoundrel for terrorizing Social Security recipients with his idle threats.

Don't believe it? 

Read it. 

'Uncle Sam Would Not Qualify For A Home Mortgage'

So says Bill Wilson of Americans for Limited Government here:

Currently, the U.S. is paying about 3 percent interest on the $14.3 trillion debt, or $430 billion of gross interest payments every year. If we had to repay everything over the next 30 years, principal and interest owed would amount to $908 billion out of revenue every year. That’s 41.7 percent of this year’s $2.174 trillion projected tax collections.

Is that affordable? Would repayment even be possible today? Perhaps just barely. The benchmark total debt service ratio for mortgage lenders is 40 percent. Anything above that, and a prospective borrower would not qualify for a loan. So even today, Uncle Sam would not qualify for a home mortgage.

I think the situation is much worse than that.

I remember that way back in 1990 the debt service ratio for a residential mortgage loan was much lower than 40 percent. Your mortgage payment had to be no more than 28 percent of income, and all your debt payments combined, adding in automobile and credit card debt, could not exceed 36 percent of income. Higher than that and you didn't get the loan.

By that standard, the US government today isn't even close at 41.7 percent, and would be laughed out of the bank.

The over-spending must stop.

Even Bruce Bartlett Admits We're in a Depression

Here, where the 1930s is the interpretive lens through which he seems to see everything, including the prospect of fiscal and monetary tightening. Evidently he prefers a looser sphincter.

Is this former Republican sleeping with Paul Krugman?

Fascist Obama's Fascist General Electric Shill Lectures Business on Jobs

GE's Jeff Immelt lectures business on taking the lead on jobs here while cutting his own workforce 11 percent between 2009 and 2011 (here), from 323,000 to 287,000.

"Our motto shall be: Moronica for Morons!"

New Book Contradicts Obama's Story That His Mother Was Denied Health Coverage

Byron York summarizes here:

"'Though [Barack Obama] often suggested that she was denied health coverage because of a pre-existing condition,' Scott writes, 'it appears from her correspondence that she was only denied disability coverage.'"

She had health coverage, and it paid her medical bills, contrary to Barack Obama's repeated claims.

Read the complete story at the link above.

Chris Farrell Speaks Up For Cash, Glorious Cash, and Shakespeare

Here:

That’s why the time-honored tactic of diversification remains one of the more powerful ways to protect finances from the downside. Shakespeare powerfully captured the idea when, in The Merchant of Venice, Antonio tells friends that his investments cause him no worry. "Believe me, no. I thank my fortune for it, my ventures are not in one bottom trusted, nor to one place; nor is my whole estate upon the fortune of this present year. Therefore my merchandise makes me not sad."

In times of trouble, Chris likes T-bills as an inflation hedge, and investment grade corporates for return. And diversification, of course.

Another Voice Searching for the Word

Fascism:

The nexus of big government, big business and the Federal Reserve has brought us to financial ruin. The US has the ability and the resources to create a better economy for all but it won’t happen as long as we continue to look to this troika of elites for economic salvation. They cannot and will not repair the damage they have done. I don’t know how to end this triumvirate of tyranny ...

Americans generally prefer the euphemism State Capitalism, for the obvious historical reasons.

For more from Joseph Y. Calhoun, III, go here.

The Tea Party Began With Moral Outrage Over Mortgage Bailouts

Ron Klain provides a needed reminder of the forgotten origins of the Tea Party movement, here:

Although we now associate the Tea Party with a general opposition to government spending, it was mortgage-relief policies that were the target of the seminal rant by the CNBC commentator Rick Santelli in February 2009 that is credited with getting that movement off the ground: “How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills?”

A striking aspect of the conservative backlash against the administration’s mainstream economic policies -- from using federal money to keep teachers on the job, to saving the domestic auto industry, to investing in job-creating public works projects -- is how much the opposition’s arguments have been based on morality and values, not economic considerations. Sure, critics offer facts and figures to challenge these policies, but the most potent weapons have been values-laden attacks about borrowing from the future, being irresponsible about spending, and failing to hold the profligate responsible for the consequences of their ways. Even direct beneficiaries of the president’s policies have pressed these moral critiques.

Klain fancies, however, that there was an equivalent moral reaction on the left to Obama's failure to prosecute wrongdoers. As genuine as it may have been, and still is, it did not translate itself into political action on a scale which did anything. It was the Tea Party which gave the Republicans a stunning and sweeping national victory in November 2010 screaming No! to Obama's policies. It entirely co-opted the left's moral pretensions.

And I rather doubt there are many leftists who would concede the right's claim to such moral equivalence with them. They still think of themselves as far superior, both intellectually and morally, to everyone else in America.

Nevertheless, while malefactors continue to go unpunished, the bailouts are a fact and have not been reversed. To that extent, the Tea Party has not been victorious at all.

It may just be my imagination, but in a better time in America left and right could have come together at a time like this to reverse these injustices. Until they do, we will live uncomfortably in a house divided.

Who Will Buy Your Crappy Ass-et: Megan McArdle, or Jesus?

Have you lost your soul? Were you just your job? Are you fit for nothing now, a drag on society, a problem that can't be solved?

Megan McArdle thinks so, and her barren, soulless assumptions lead straight to war, to the gulag, and to the ovens where the unproductive assets of humanity can be "soaked up." In the language of the dismal economist, liquidated:

"Human capital is like almost any other form of capital: it is a depreciating asset. The longer you stay out of the workforce, the less valuable you are to potential employers. You lose market intelligence and industry connections. Your technical knowledge and skills atrophy.

"I was unemployed for basically two years between . . . 2001 . . . and . . . 2003. ... I felt the isolation and the desperate fear of everyone who doesn't have a 'real job', the people who don't know how they're going to earn enough over the next forty years to keep body and soul together.  I experienced real despair for the first time in my life. And it changed me, permanently.

"... What really matters is how it changed my outlook on the world. I became afraid then in a way that has never really left me. I obsess about economic security.  I catastrophize small setbacks. ...

"There was also the crushing sense of isolation, and failure. ...

"[M]illions of people, staring into the abyss of an empty future.  We don't know how to re-employ them. The last time this happened, in the Great Depression, World War II eventually came along and soaked up everyone in the labor force who could breathe and carry a toolbag.  I hope to God we're not going to do that again, so what are we going to do with all these people?

-- Megan McArdle, here

Such is the way of death. Many are they who walk in it. But there is a way where there is no fear, where everyone is valued, not for what they do, but for who they are, for whom the future is full because God inhabits it: 

Therefore I say unto you, Take no thought for your life, what ye shall eat, or what ye shall drink; nor yet for your body, what ye shall put on. Is not the life more than meat, and the body than raiment?

Behold the fowls of the air: for they sow not, neither do they reap, nor gather into barns; yet your heavenly Father feedeth them. Are ye not much better than they?

Which of you by taking thought can add one cubit unto his stature?

And why take ye thought for raiment? Consider the lilies of the field, how they grow; they toil not, neither do they spin:

And yet I say unto you, That even Solomon in all his glory was not arrayed like one of these.

Wherefore, if God so clothe the grass of the field, which to day is, and to morrow is cast into the oven, [shall he] not much more [clothe] you, O ye of little faith?

Therefore take no thought, saying, What shall we eat? or, What shall we drink? or, Wherewithal shall we be clothed?

(For after all these things do the Gentiles seek:) for your heavenly Father knoweth that ye have need of all these things.

But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.

Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day [is] the evil thereof.

-- Matthew 6:25-34

For whosoever will save his life shall lose it; but whosoever shall lose his life for my sake and the gospel's, the same shall save it. For what shall it profit a man, if he shall gain the whole world, and lose his own soul?

-- Mark 8:35-36

Come unto me, all [ye] that labour and are heavy laden, and I will give you rest.

-- Matthew 11:28

'The US Remains Trapped in Depression'

Ambrose Evans-Pritchard is back at it, here:

The calamitous US jobs data released last Friday leave no doubt that the US remains trapped in depression. Broad U6 unemployment rose from 15.8 to 16.2pc in June; the numbers in work fell by a quarter million to 153.4m; the average time without a job reached a fresh record of 39.8 weeks; hourly pay fell; hours worked fell; the employment/population ratio crashed to new lows of 58.2pc.

Spending Trendlines: Obama Goes Vertical

Let's play "Find the Conservative Spending Trendline."

Is it the postwar trendline of the 1940s? Can you imagine such a small government today, spending just barely $400 billion by 2015?

Or how about The Great Society trendline of the 1960s, spending $800 billion by 2015? Unfortunately its little Vietnam-guns and Medicare-butter time bombs had time delay detonators.

They went off and set the trendline established in the wake of the mid-1970s recession, oil embargoes and Iranian hostage crisis which took us all the way through Carter, Reagan, Bush 41, and Clinton. Does $2.5 trillion by 2015 sound conservative to you? All assisted by a dollar finally unglued from gold in 1971.

It certainly couldn't be George W. Bush's trendline, could it? It was an even more radical departure from the past because of added spending on drugs for seniors and two more wars. And don't even think of calling that policy "tax and spend." It was all spend. 

For an encore to that sorry enterprise, Obama has taken it practically vertical, but it can't reach escape velocity and looks doomed to crash. Which is why the man who eight months ago signed the extension of the Bush tax rate regime now suddenly wants to raise taxes as part of a debt ceiling deal this summer.

Some people define conservatism as maintaining the status quo. Some as measured, gradual change. Cutting current spending back toward the 1970s trendline, which is where Rep. Paul Ryan is trying to go, is viewed as radical by the likes of Newt Gingrich and the left. In reality, though, it's just a return to a status quo ante which for its time was anything but conservative. What this means is that so-called conservatives today find themselves reduced to defending the liberalism of the still recent past.  

  

Federal Spending and Federal Receipts 1901-2010

Tax receipts have fallen dramatically during the Panic of 2008, but spending has not. It should.

If you don't have the dough, you don't go to the show.

Unemployed? To Megan McArdle You're Just A Depreciating Asset

Here:

"Human capital is like almost any other form of capital: it is a depreciating asset."

In other words, your worth as a human being is purely economic.

Megan may have a job, but it masks a poverty of soul which lies at the heart of America's problems, where everything is fungible, including your house, and now you.

Want a vacation? Write a check on your HELOC account. Pregnancy inconvenient for your career? End it. Old people cost too much to take care of? Withhold food and water. 14 million unemployed?

"[W]hat are we going to do with all these people?"

Why, liquidate them, of course, like any other asset.

Anyone who will do anything for a job will do . . . anything.

Save your self. 

Repatriating Overseas Corporate Cash Primarily Benefits Shareholders

Claims it will boost the dollar, job growth, new investment and the stock market are exaggerated, according to Marc Chandler, here.

He points out that overseas cash may be as high as $2 trillion but that perhaps 40 percent of it is already parked in low tax havens abroad. Why move it?

Based on the last repatriation in 2004 and 2005, when about $300 billion came home, only on the most generous reading about 250,000 new jobs were created compared to a predicted 500,000, if 2003's anemic 100,000 new private sector jobs per month is the baseline. And dollar gains could just as easily be attributed to incremental 25 basis point upticks in interest rates by the Federal Reserve.

For the full argument, follow the link above.

To Hell With Clive Crook and The Financial Times

For phrases, here, such as:

"if there were any such thing as a moderate Republican;"

and

"a pathologically intransigent Republican party."

Why don't you bugger off to The Guardian or something, Clive? You'd be more happy there, fantasizing about how immune from the dark side of human nature you think you are, and how inferior you imagine the Colonies remain.

We beat you, and we'll beat you again, and again and again and again.

Landslide Vote For Israel in Congress, Except for Rep. Justin Amash and 5 Others

The vote was a non-binding resolution, a shot across the bow of the Palestinian Authority, which Justin Amash, among others, could not bring himself to support:

The U.S. House of Representatives threatened to cut off funding to the Palestinian Authority if it pursues recognition of statehood outside of negotiations with Israel.

A resolution passed Thursday night by a vote of  406 to 6 "affirms that Palestinian efforts to circumvent direct negotiations and pursue recognition of statehood prior to agreement with Israel will harm United States-Palestinian relations and will have serious implications for the United States assistance programs for the Palestinians and the Palestinian Authority."

The non-binding resolution is similar to one passed last month by the Senate. ...

Among those voting against was a freshman, Rep. Justin Amash (R-MI), who is aligned with the Tea Party and who is of Palestinian descent.

Tea Party candidates were an unknown quan[t]ity to pro-Israel groups last year and since then, the Republican leadership has endeavored to secure assurances of support for Israel from lawmakers aligned with the Tea Party.

Most have done so, although there are holdouts like Amash. The five other members who voted against the resolution were Reps. Ron Paul (R-TX), Walter Jones (R-NC), Dennis Kucinich (D-OH), Nick Rahall (D-WV) and Earl Blumenauer (D-OR).

Read more here.

Krauthammer Attempts to Define the Political Spectrum

He says, here, that a person open to both liberal and conservative views is a moderate, which would be David Brooks of The New York Times, in his opinion.

Gee, we didn't know David Brooks was open to conservative views.

Government Spent About $113K PER SECOND in 2010

Federal Spending 1901-2010

As calculated here.

Treating Radioactive Water at Fukushima is Not Going Well

Components made in the US and France have been able to treat only 2,000 tons of approximately 110,000 tons of radioactive water.

More water storage tanks are being installed while efforts continue to improve removal of radioactive cesium.

As presently configured, the systems work for about five hours instead of for weeks at a time, and remove only 10 percent of the radiation.

Story here.

New Taxpayers, Not New Taxes

"Let's stop talking about new taxes and start talking about creating new taxpayers, which basically means jobs."

-- Senator Marco Rubio, here

June Unemployment Up 0.1 to 9.2 Percent!

Love that laser-like focus on jobs, you incompetent flake!

Story here.

Down With The Establishment!

"The Establishment is in a panic. It has been jolted awake to the realization that the GOP House, if it can summon the courage to use it, is holding a weapon that could enable it to bridle forever the federal monster that consumes 25 percent of gross domestic product."

-- Patrick J. Buchanan, here

Cheap Oil Fuels The Booms

Mexican on Death Row Since 1994 Brutal Murder Finally Executed, Despite Obama

The AP has the story here:

A Mexican national was executed Thursday for the rape-slaying of a San Antonio teenager after the U.S. Supreme Court turned down a White House-supported appeal to spare him in a death penalty case where Texas justice triumphed over international treaty concerns.

Humberto Leal, 38, received lethal injection for the 1994 murder of Adria Sauceda. She was fatally bludgeoned with a piece of asphalt.

In Saudi Arabia he would have been bludgeoned with a piece of asphalt, in 1994.

TSA Agent Stole From Your Luggage, Fenced The Stuff Online

$50K worth at FLL.

Story here.

Republican Governor of Tennessee Wants To Spearhead Internet Tax Initiative

The RINO's name is Bill Haslam. Rhymes with Has-Been.

Story here.

Conservatism Has Always Been Counter-Revolutionary

A frequent MO of the left is to substitute its own definition of something for the real thing, and then argue against it. Otherwise called setting up a straw man. Words mean whatever they say they mean.

That's what Michael Lind has done to Russell Kirk over at Salon.com.

A commenter on his "The three fundamentalisms of the American right: How conservatism went from orthodox and traditional to radical and counter-revolutionary" here gets it exactly right:

The stupidity is also amusing for the way Lind telegraphs his punch in the title, since Russell Kirk, channeler of Burke, consistently advocated for the counter-revolutionary interpretation of the American Revolution throughout his career. More than that, he thought that his own interpretation of the American Revolution as a revolution not made but prevented was entirely consistent with E.J. Payne's interpretation of the Burke who famously loathed what became of France's revolution. Kirk lays out his interpretation in this famous essay, stating from the start his indebtedness to Payne for the idea:

The most learned editor of Burke’s works, E. J. Payne, summarizes Burke’s account of the events of 1688-89 as “a revolution not made but prevented.” Let us see how that theory may be applicable to North American events nine decades later.

On this interpretation, the King of England was the revolutionary, against whose red-coated infringers on the chartered rights of Englishmen the American colonists reluctantly and at length opened fire with more than just words.

Lind would like things to be as they once were, when conservatism was still inchoate, unsure of itself, and above all, politically ineffectual:

Back when conservatism was orthodox and traditional, rather than fundamentalist and counter-revolutionary, conservatives could engage in friendly debates with liberals, and minds on both sides could now and then be changed.

But now that conservatism is a genuine threat to the revolutionary left which has taken control of America, it's time to sound the alarms:

Sooner or later, dogmatism and reality will collide, and it is not reality that will crumple like tinfoil. The only question is how much damage will be done to the American polity before the revolution of the saints fizzles out.

"Collide." "Crumple." "Damage." Sounds more like an invitation to a train wreck than to a battle, but I could be wrong.

Round one to the right last November. More skirmishes to follow. 

The Liberal Attack on Bill Clinton Continues, This Time From Joe Stiglitz

As picked up by Slate, here, which especially savors a straw man when mixed with a delusion:

[A] powerful ideology—the belief in free and unfettered markets—brought the world to the brink of ruin. Even in its heyday, from the early 1980s until 2007, American-style deregulated capitalism brought greater material well-being only to the very richest of the richest country of the world. ...

A decade ago, in the midst of an economic boom, the United States faced a surplus so large that it threatened to eliminate the national debt. 

Here Come The Mexican Trucks

Unless Congress stops them by not ratifying the agreement.

Story here.

Defining a Depression

"Some point to the success of Latvia in managing its so-called internal devaluation. But its GDP is 23 percent below its pre-crisis peak. That is a depression."

-- Martin Wolf, here

Rare Earth Mineral Finds on Pacific Floor Dwarf Known Land Reserves

The new discoveries near Hawaii and Tahiti in international waters by the Japanese are said to be on the order of perhaps 100 billion tons, while known land reserves are in the vicinity of 100 million tons.

Looks like the Chinese may soon discover they've been paying way too much in their attempt to corner this market.

The article, here, makes no mention of the implications of the Law of the Sea for the discovery.

 

Updated link here.

Everything You Need To Know About TX Gov. Rick Perry, George W., and Karl Rove In One Sentence

"In 1989, Mr. Rove, already a powerful Texas political consultant, helped persuade Mr. Perry to join the Republican Party and run as agriculture commissioner."

The New York Times, here.

Walter Williams Skewers Democracy, and Time Magazine's Richard Stengel

Just one of the bons mots:

Stengel says, "If the Constitution was intended to limit the federal government, it sure doesn't say so." That statement is beyond ignorance. The 10th Amendment reads:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Stengel apparently has not read The Federalist No. 45, in which James Madison, the acknowledged father of the Constitution, said:

"The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite."

Stengel's article is five pages online, and I've only commented on the first.

Read the whole thing here.

Fight The Will-Try-ANYTHING Fed

From Bill Julian, making the contrarian case here that it's already winter:

M3, the broadest definition of money that includes credit creation, is still well off its peak of 2008 and is no higher than it was when QE2 was instituted. ... This is unprecedented and is consistent with the current flurry of poor economic data. It is almost certainly a huge disappointment to the FED.

The meaning of this is that the asset prices which have been inflated by Federal Reserve policies look less and less sustainable. 

'Money is the Lifeblood of the Nation'

"Money, the lifeblood of the nation,
Corrupts and stagnates in the veins,
Unless a proper circulation
Its motion and its heat maintains."

-- Jonathan Swift

End Obama's Big Fat 'Tax Break' For Air Force One: $35 Million a Year

From Rich Karlgaard, here:

[T]he annual carrying costs and fuel costs of Obama’s big fat jet comes to $100 million, give or take. My round number is supported by the National Taxpayer’s Union finding that Air Force One costs $181,000 an hour to operate, all in.  Obama would have to fly 552 hours to hit $100 million-a-year by this calculation. However you analyze it, the cost of Air Force One comes in at around $100 million.

Gee, wouldn’t you call that a form of compensation? The president of the U.S. makes $400,000 in salary but he gets a perk that is worth $100 million a year. Cool! I’m not even counting the annual costs of his other perks — ground transportation in limos, free digs at the White House, the parties, the First Lady’s trips, and so on.

Just one perk, Air Force One, is worth $100 million a year.

You are right, Mr. President. Let’s end this tax break for corporate jets. Which means, you pay up, Big Guy! You owe the IRS roughly $35 million a year for your personal jet.

Rethinking 2008: Panic Number Fifteen

From The Chicago Tribune:

There are remarkable similarities in the events that trigger panics. A century-old economic text, "A Brief History of Panics and their Periodical Occurrence" noted, "The symptoms of an approaching panic… are wonderful prosperity… a rise in the price of all commodities, of land, of houses, etc, etc…, by the gullibility of the public, by a general taste for speculating in order to grow rich at once, by a growing luxury leading to excessive expenditures…." The book further cited excessive leverage in the financial system, a point taken up by [Roger] Babson, who likened the creation of new financial institutions to "putting out a flame by pouring oil over it." How easily all this could have described the years preceding the Panic of 2008!

Read more from Jeff Korzenik's fascinating op-ed, here.

Risk-Taking Capital is Fleeing the US

From The Wall Street Journal here:

Americans are taking their investment dollars abroad at a faster pace than foreigners are bringing capital to these shores. In 2010, for example, U.S. investment abroad was $351 billion—$115 billion higher than foreign investment here. Economic recoveries are periods when investment capital usually surges into a country, but since this weakling rebound began in the middle of 2009 the U.S. has lost more than $200 billion in investment capital. That is the equivalent of about two million jobs that don't exist on these shores and are now located in places like China, Germany and India.

This is a recent and dramatic reversal of fortune. Huge net inflows of productive capital into the U.S. in the 1980s and '90s helped finance the 25-year boom in jobs and broad-based prosperity from 1982-2007. Over that period, foreigners invested just over $6 trillion more in the U.S. (in total capital) than Americans invested abroad, according to the Bureau of Economic Analysis, with most of it going into businesses.

Minnesota Governor Flip Flops on Government Shutdown

Seen here:

[D]uring the 2010 gube[r]natorial election ... governor Dayton said he would not shut down state government in order to get his way on a tax increase.

Anonymous Eyewitness Fukushima Workers Allege Quake Caused Meltdowns, Not Tsunami

The Atlanticwire.com has the long story here, including testimony from three different workers:

 “I personally saw pipes that came apart and I assume that there were many more that had been broken throughout the plant. There’s no doubt that the earthquake did a lot of damage inside the plant. There were definitely leaking pipes, but we don’t know which pipes – that has to be investigated. I also saw that part of the wall of the turbine building for Unit 1 had come away. That crack might have affected the reactor.”

“If the walls are too rigid, they can crack under the slightest pressure from inside so they have to be breakable because if the pressure is kept inside and there is a buildup of pressure, it can damage the equipment inside the walls so it needs to be allowed to escape. It’s designed to give during a crisis, if not it could be worse – that might be shocking to others, but to us it’s common sense.” (first worker)

“It felt like the earthquake hit in two waves, the first impact was so intense you could see the building shaking, the pipes buckling, and within minutes, I saw pipes bursting. Some fell off the wall. Others snapped. I was pretty sure that some of the oxygen tanks stored on site had exploded but I didn’t see for myself. Someone yelled that we all needed to evacuate and I was good with that. But I was severely alarmed because as I was leaving I was told and I could see that several pipes had cracked open, including what I believe were cold water supply pipes. That would mean that coolant couldn’t get to the reactor core. If you can’t sufficiently get the coolant to the core, it melts down. You don’t have to have to be a nuclear scientist to figure that out.”

“There were holes in them [the walls of Unit 1]. In the first few minutes, no one was thinking about a tsunami. We were thinking about survival.” (worker two)

“I was in a building nearby when the earthquake shook. After the second shockwave hit, I heard a loud explosion that was almost deafening. I looked out the window and I could see white smoke coming from reactor one. I thought to myself, ‘this is the end.’” (worker three)

Worker three, quoting a supervisor: “there’s been an explosion of some gas tanks in reactor one, probably the oxygen tanks. In addition to this there has been some structural damage, pipes have burst, meltdown is possible. Please take shelter immediately.”

It's a little odd that the story concludes with this statement:

[S]haking experienced at the plant during the quake was within it’s [sic] approved design specifications.

Three readings from TEPCO's own report of the seismic data, updated June 16, 2011, contradict this statement for Units 2, 3, and 5, and Unit 1 got very close to not just its E-W limit, but also its N-S, which would cohere with its geographic position at the plant, bearing the brunt of the forces from the north, and sharing in the record-setting forces from the east:

Workers fleeing west before the tsunami hit were reported here to have heard a radiation alarm sounding at a point 1.5 km distant from reactor Unit 1.

White House Staff: 454 People. Total Compensation? $37.1 Million.

As reported here:

141 White House staffers make six figures. ...

In total, the 454 White House staffers earn a payroll of $37,121,463.

Poverty Lines 2010 US Census

(source)

Poverty Guidelines for 2011 from HHS

(source)

The Current Tax Code is Already Unseemly and Socialist

Because of the way it massively extracts taxes from the top 50 percent of earners and redistributes the benefits to every class of people, to be sure, but disproportionately to the poorest who pay nothing in federal taxes. They number in excess of 63 million tax filers.

So why can't Bruce Bartlett, here, just say that?

"Perhaps the right and left can at least agree that it is unseemly for those in the top 1 percent of income distribution, with incomes at least 10 times the median income, to pay no federal income taxes. It’s not socialism to ask them to pay something."


"Unseemly"? We're talking 24,000 filers in the top 1 percent. Why isn't it unseemly, and in fact a scandal, that over 5 times as many people in the lowest two quintiles pay no federal income taxes than in the highest three quintiles?

Bartlett well knows that the rich who pay no federal taxes may in fact pay capital gains taxes, and may also be massively financing America's municipalities in the bond market to escape federal taxes, just as he knows the poor who work pay Social Security taxes just like everyone else who works.

That's the problem with the tax code. It's balkanized and hyphenated, just like America, and when only looking at one part of it and from that perspective, it only provokes judgments as distorted as the code itself.

A tax code which taxed all income in all forms and at all levels without exception and at one low rate would go a long way to repairing the divisions in this country.

Unfortunately we don't have very many people in leadership advocating for this.

From the article:

Tim Pawlenty Wasn't Much of Spending Cutter in Minnesota From 2003

Captain Capitalism has the story here:

More Than Half of Real GDP Through 2010 Came from Government Spending

From deficit spending, that is, measured in the hundreds of billions per year under George Bush, and now in the trillions in just two and a half years under Barack Obama.

It ain't worth it! And the country needs a growth strategy.

Seen here at The Department of Numbers:

The Great Stagnation

"[M]ore than half of our economic growth in the past ten years has come from government spending."

Minnesota Government Employee Fears Two Month Government Shutdown

Big whoop:

State worker Lori Sobczak tried to remain optimistic.

"There's frustration," said Sobczak, a two-year Minnesota Department of Transportation employee.

The fear is "the unknown, you know," she said. "Rumors are flying around; [a shutdown] could be, you know, 45-60 days. ... That's scary."

Scary? You don't know scary. Try going two and a half years without a regular paycheck, sister, like seven million other unemployed Americans. That's why your government is shutting down, because we used to pay the taxes that made your job possible in the first place.

If I were you I'd tell my union to cut a deal.

Read all about the Minnesota government shutdown here.

Only Dreamers Think Corporate Cash Will Be Used To 'Create Jobs'

Robert Lenzner opines on the naive hopes for repatriating about $1 trillion in corporate cash, noting how corporations are already sitting on a similar sum here and could just as easily use it to create jobs if they needed to:

[Companies] aren’t in business to serve the public patriotic interest by using that money to create jobs unless there is demand over and above what is being filled today.

Which would mean that a tax break for repatriating the cash would just be a "sweetheart deal," the favor   of which would no doubt redound to the politicians granting it, in the time-honored form of campaign contributions, or revolving door jobs in industry.

It's the same story with using taxpayer funds to "create jobs." There's no economic demand for the jobs created, otherwise they'd exist already. They're a sweetheart deal, usually for the affected government and/or union workers whose jobs, and (Democrat) votes, they're designed to preserve.

Whatayah Mean 'Yesterday'?

“I thought he was a dick yesterday,” [Mark] Halperin, who also is a senior political analyst for MSNBC, said on Morning Joe, referring to the President’s conduct during his press conference.

Story here.

$280 Billion

The minimum cost to the economy when 7 million people lose the average $40,000/year job.

Inflation Analyst Says TIPS Are Overpriced

Seen here:

In terms of owning inflation protected securities (TIPS), we find that at current price levels they offer absolutely NO protection against further increases in the US inflation rate. Rather, we believe that you should (at this point) own real assets such as commodities for protection or small cap stocks, which have proven to be a decent hedge against inflation historically.

Even after yesterday's pullback to $13.44, VIPSX is trading near ten year highs.

Q1 Non-Bank Corporate Debt Surged to a Record $7.3 Trillion

And Brett Arends, same article, thinks corporations used the borrowing to finance the stock buy-backs, which kind of puts the taint on both their stocks and their bonds:

The total [borrowing] at the end of 2007, at the peak of the so-called “credit bubble,” was just $6.7 trillion.

This borrowing spree has pushed overall gearing for nonfarm, nonfinancial corporates to hefty levels. The Fed says that U.S. nonfinancial corporates now have debt equal to 50% of their net worth. It’s near record levels for modern times. As recently as 2006, it was just 40%.

When a company borrows money to bolster its own stock price, it makes me wary of the bonds. When the executives aren’t even willing to invest their own money, it doesn’t exactly make me enthusiastic about the stock either. 

Q1 SPX Rise of 5 Percent: Companies Painted The Tape

Just like they're doing in the last three days, along with everyone else, to make Q2 look better after a tough couple of months.

Brett Arends has the story here:

So who was driving up the market? What was creating this boom?

Turns out it was the companies themselves. TrimTabs says companies spent a thumping $124 billion in the first three months of the year trying to boost their share prices by buying up stock.

That works out at about $2 billion for every day the market opened.

Meanwhile, according to Trim Tabs, guess who avoided buying stock during the first quarter? Company executives. The “insiders.”

Phony as a $3 bill.

The Democrat Idea of a 50 Percent Tax Cut

Buy one, get one half off!

If Anyone's Hung Up on Taxes, It's the Democrats: It's Their Price for Spending Cuts

So says the much trumpeted Reuters story today:

Democrats say the $1.5 trillion to $2 trillion in spending cuts that the two sides have tentatively identified must be augmented by $400 billion in new tax revenue over the coming 10 years. That money would come by closing a range of tax breaks for hedge-fund managers, private jets and specific business sectors.

The Most Dangerous Combination of Four Words in the English Language

"Debt draws forward prosperity."

-- Ambrose Evans-Pritchard, here