Q2 2012 GDP, First Estimate, Up Only 1.5 Percent. Q1 Revised Up To 2 Percent.

The Bureau of Economic Analysis report may be found here. The customary summer revision of the data going back several years is also part of the release, here.

The revised real GDP numbers going back to 2008 are something of a stunner, revealing no real GDP growth in any year from 2008 at 2.5 percent or above.

I am reminded of this statement attributed to Ben Bernanke three years ago today at Reuters, here:

It takes GDP growth of about 2.5 percent to keep the jobless rate constant, Bernanke noted. But the Fed expects growth of only about 1 percent in the last six months of the year.

"So that's not enough to bring down the unemployment rate," he said.


Since we haven't had annual GDP growth of 2.5 percent for going on five years, declining unemployment obviously has had nothing to do with government action, but rather with the growing number of people not counted as unemployed. Headline unemployment is based on the answer to the question "Did you look for work in the last four weeks?" and if you answered "No" you are not counted as unemployed even if you are.

Americans have dropped out in massive numbers because they are tired of beating their heads against a wall of mismatched skills, massive age discrimination, cheaper foreign labor and inhospitable government policy toward business, and they no longer count, quite literally.

It's no surprise really. 50 million abortions since 1973 haven't counted either. And while a gunman killing a dozen or more in a theatre makes big news for a few days, a similar number of illegals dying in a truck crash a few days later doesn't.

The message of the "modern" world is that lives are expendable, especially unemployed lives, who are now nothing more than "depreciating assets".

US Birthrate Declines From Replacement Rate To 1.87

So says a report in USA Today, here:

As the economy tanked, the average number of births per woman fell 12% from a peak of 2.12 in 2007. Demographic Intelligence projects the rate to hit 1.87 this year and 1.86 next year — the lowest since 1987. ... The U.S. fertility rate has been the envy of the developed world because it has remained close to the replacement rate of 2.1 (the number of children each woman must have to maintain current population) for more than 20 years.

This Is Capitalism? Negative Interest Rates Mean Capital Is Being Destroyed.

So says Jeffrey Snider, here:

It cannot be a true capitalist system that is creating negative interest rates throughout the "developed" world since capitalism, at its very core, values capital. Negative interest rates are the very real signal that capital is being destroyed at will. Since this capital destruction is not localized, and does not appear to be temporary, this strongly suggests that some exogenous force (exogenous from the perspective of a system that values capital) is uniformly acting upon the global system in a manner that does not conform to what would fairly be called capitalism. ...

Today's negative interest rates are the prime signal that money is more valuable than capital, a consequence that only monetarism and financial domination could produce willingly. In all those countries experiencing the renewal of the receding economic tide of re-recession (or just continued depression for simplicity's sake) there sits an activist central bank at its modern core. ...

[T]he real economy appears to be fighting back, rejecting money and credit as a workable solution.

That's Hysterical: Do 2 Recessions Equal 1 Depression?

So Paul Vigna in The Wall Street Journal, here:

"Do two global recessions equal a modern depression? We seem destined to find out."

Notice the word "modern",  as if to say we in our time are much too advanced to have an old-fashioned depression like they had way back in the day. You know, a god-awful depression where massive numbers of people go hungry and die before their time.

The fact is depressions happen. They have a technical character. You can measure them. Some are indeed severe, as in 1920. Some are also short, as in 1920. Some are relatively shallow, as in 2008 or 1937, and go on forever due to incompetence. Some are severe and go on forever due to incompetence, as in 1931, or in Greece today. Our problem is that we won't agree to agree on a name for this depression enemy this time around because depressions don't happen in "modern" times. Insisting that depressions don't happen in "modern" times is actually a form of hubris. And you know what cometh before a fall. But try telling that to an entire civilization.

By the way, isn't the "modern" age over already? The old right in America, you know, the opposition to FDR in the 1930s, used to stand against the modern age which FDR, and Wilson before him, represented. There's still a magazine in print by that name which hails from the conservative ethos of that very time and continues to talk about this, which really is a mark of true conservative distinction, seeing that conservatism at its best brings forward into the present the truths, and critiques, of the past. But "modern" truly is an old conception which is getting a little long in the tooth to continue to be used of this age when we have clearly moved on in any number of ways, except perhaps in our conceits. An exception to this might be our nostalgia for Glass-Steagall, which makes us sort of conservatives of modernism, if it's permissible to speak that way.

But I digress.

What thoughtful people are worrying about at this moment is that we could re-elect this incompetent boob, Barack Obama, who is working on the choom gang, and finally go really and truly insolvent while he fritters away four more years getting in touch with his inner Arnold Palmer. Some people think insolvency is actually his objective, which to my mind gives him way more credit than he deserves. He seems to think money grows on trees, planted by the financial, insurance and real estate sectors, but hasn't yet figured out that his usefulness to them comes with an expiration date not unlike the expiration dates which attach to all the promises he has made and end up going poof into the air.

When liberals finally do conclude the emperor has no clothes on, this indeed will be all over, but the problem with that is that most liberals went to public school. They won't figure it out until it's way too late. Say 2022, if they live that long.

The left already figured it out, however, in the first year of Obama's presidency, but decided to make their strategy of destroying the country Obama's strategy by continuing to support him. This was an inflexion point where all that stupid talk from the right about how we share some common ground with the left should have come to an end. I don't recall the left saying they had any common ground with us. Instead what we got and continue to get from Republicans and other liberals is incredulity about Obama's failure to have learned anything by now.

Here's a newsflash for you: He has no intention of learning anything. Republicans continue to misunderstand his opposition, as is their wont. Saddam Hussein was not worth getting angry about, but they did, and Barack Obama is worth getting upset about, but their response is . . . Romney. No wonder Democrats have contempt for Republicans. The stupid party.

No, everything now depends, unfortunately, on the residuum of common good sense among the rank and file out there, the apolitical people who simply have had enough of this. Considering the depths of our social dissolution, however, and Obama's attempts to subsidize that with food stamps, free cell phones, disability payments and the revivification of welfare (what else would you expect from a drug addict?), it is hard to remain optimistic about them, but that's probably all we've got remaining.

"The Great Depression, after all, actually comprised two technical recessions, 1929-1933 and 1937-38, not that most people could tell the difference.

"What would you call a 7-10 year period of suppressed growth and stagnant wages, of economies on the verge of collapse and overwhelmed leadership? You could do worse than “depression” – lowercase “d” to be sure, and we’ll hope for a great new age on the other side of it. But a depression all the same."


I'll see you at the polls in November, voting for Romney. I'll be the one with a clothes pin on my nose.

And I'm going to keep it because I have a feeling I'm going to be needing it.

Samuel Johnson For Our Overly Political Times

"How small, of all that human hearts endure,

That part which laws or kings can cause or cure.

Still to ourselves in every place consign'd,

Our own felicity we make or find:

With secret course, which no loud storms annoy,

Glides the smooth current of domestic joy."

The poetry is Oliver Goldsmith's, but Johnson wrote it.

Methodism Remains A Grandmother Of Bolshevism

Jewish Lutheran Atheist

Mark Tooley says as much here for The American Spectator:

Methodism, rather than stepping back to reflect on its 30 year initially successful but ultimately failed Prohibition crusade, instead accelerated its political activism. The Methodism Building became the headquarters of America's Religious Left in Washington, D.C., housing radicals of every cause especially from the 1960s onward. It still clung to an uncompromising perfectionism that insisted evil could be banished, and the New Jerusalem established, with the passage of just a few more laws.

Of course, presidents and congressmen no longer "tremble and gobble" before Methodism and its lobbyists, who are largely ignored. Banning handguns, even after 40 years of endorsement by Methodism, will never happen. But maybe other uncompromising idealists and utopians, who believe human nature can be transformed at the stroke of a pen, will heed the lessons of Methodism and Prohibition. 

No One Can Spell Today

Leave It To Forbes To Offer The SOCIALIST Thought Of The Day

There's nothing like the smell of class warfare in the morning.

The Whole World Is Turning Japanese, He Really Thinks So

So says Scott Sumner, here:


Wherever people draw a line, bond yields just seem to plunge right through, to one record low after another. And we know from Japan that they can go even lower. But what does this mean?

It probably means multiple things. ... We are looking at BOTH low inflation and low real GDP growth for many years to come. ... Japan is the future of the world.

Most Important Thing Obama Has Transformed

Dem. Sen. Patty Murray Is Willing To Throw Middle Class Under The Bus

Unless Sen. Murray and the Democrats get what they want, the middle class is indeed expendable.

All taxpayers would be punished by Democrats' unwillingness to compromise with Republicans, who were elected to get spending under control, but no one more so than those Americans who file at the bottom of the income ladder in the 10 percent bracket, if current tax rates are allowed to expire as the Democrats threaten. Those hapless souls at the bottom will have to pay in the 15 percent bracket in that event, a tax rate increase of 50 percent.

It is remarkable that Democrats are willing to punish the poor in this way if they can't punish the rich in theirs.

Republicans want current progressive tax rates for all taxpayers made permanent, but Democrats do not. In Democrats' opinion, the rich don't deserve to pay their currently much higher rates, but need to pay even higher ones to meet a definition of fair Democrats demand to write by themselves. Nevermind a tax increase of any kind anywhere in this economy will be negative for growth. As for the spending cuts, Democrats agreed to those in the face of a downgrade to America's bond rating, but they weren't enough, and the AAA rating went into the ashbin of history. If those cuts were going to be inadequate, why did Democrats vote for them, and why aren't they calling for steeper ones now in order to restore the country to AAA?

In France, new socialist government tax increases on the rich are driving the wealthy out of the country, taking their money with them to friendlier, lower-tax-rate neighbors, which will deprive France not only of the tax revenue, but of the investment capital.

Expect the same here if the Democrats get their way.

Here is Sen. Murray, quoted in The Christian Science Monitor:

With the US economy speeding toward a year-end fiscal cliff of some $560 billion in higher taxes and draconian spending cuts, Sen. Patty Murray (D) of Washington bluntly laid out her party’s position on how Congress should handle the nation’s coming fiscal travails: Go big or go over the ledge.

“Millions of jobs could be lost through the automatic cuts, programs families depend on would be slashed irresponsibly across the board, and middle-class tax cuts would expire.  And once again, if Republicans won’t work with us on a balanced approach, we are not going to get a deal,” said Senator Murray,  the Senate’s No. 4 Democrat, in a speech at the Brookings Institution on Monday.

“[I]f we can’t get a good deal – a balanced deal that calls on the wealthy to pay their fair share – then I will absolutely continue this debate into 2013, rather than lock in a long-term deal this year that throws middle-class families under the bus,” she said.

Right On Schedule, Obama's Pals In FIRE Start To Snap Up Your American Dream

Having unleashed all that pent up capital in the American dream of home equity, skimmed it, and tag-teamed it, leaving you underwater and broke, Obama's pals in the financial, insurance and real estate sectors from Wall Street are starting to swoop in and gobble up your broken dreams.

Stephen Gandel reports for Fortune, here:

In the past six months or so, a number of investment firms, hedge funds, private equity partnerships and real estate investors have turned into voracious buyers of single-family homes. And not just any homes, but foreclosures. Investment banks, who also want in on the action, are lining up financing options to keep the purchases going.

Take for instance private equity mega-firm Blackstone Group (BX). ... Blackstone now owns 2,000 single-family homes. At $300 million, that might be small compared to Blackstone's overall real estate portfolio of about $50 billion. But it's one of the biggest piles of homes ever intentionally put together (banks and Fannie and Freddie are sitting on many more foreclosed homes, but that's a different story) by an institutional investor, and it's likely not the largest portfolio out there these days. ...

[L]andlords have always tended to be mom-and-pop outfits often not owning more than a few dozen units confined to one area. Large Real Estate Investment Trusts and private equity funds generally focused on apartment buildings and commercial real estate, like malls and office buildings. That appears to be changing.

Robert Fitch tried to tell everyone that this is what was coming under Obama, because it's what Obama helped make happen on the near south side of Chicago's Loop as a state senator. Obama helped throw out all the poor black people there, nearly 50,000 of them, so his friends could buy up the land, develop it, and make lots of money off it. They ended up helping finance him to the US Senate and The White House.

Looks like they might be at it again.

I first read about it here.

"The United States Is Based On Guns, You Know"

So says Ice-T here:

Ice-T: Yeah, it's legal in the United States. It's part of our Constitution. You know, the right to bear arms is because that's the last form of defense against tyranny. Not to hunt. It's to protect yourself from the police.

A Baker's Dozen Pays 6% Or More On 10yr. Paper

Romney's Sins

In no particular order. Just making my list . . . and checking it twice.

• thinks the 1st Amendment is first
• wants to index the minimum wage to inflation
• supports ethanol subsidies
• flipped on abortion at least 3 times
• supported Obama's murder of an American citizen
• supports TARP
• has a weird religion
• thinks W prevented a depression
• believes in the individual mandate in principle
• was soft on public unions in Ohio
• thinks government coercion in healthcare is conservative
• believes in progressive income taxation
• reassures liberals by pledging to soften up conservatives
• reassures liberals that Republicans like him can make liberal extremism seem almost mainstream
• supports domestic partner benefits
• thinks it's a good idea to shift away from fossil fuels
• he's way too rich to lead the charge to abolish the progressive tax code even if he wanted to
• the world's getting warmer and humans contribute to that
• farm subsidies are a national security issue
• supports No Child Left Behind
• agrees with Milos Forman: Obama's no socialist
• Bain Capital bailed out companies just like Obama bailed out GM and Chrysler
• corporate restructuring is job creation
• "We must make equality for gays and lesbians a mainstream concern"
• "ObamaCare is not worth getting angry about"
• "I was an independent during the time of Reagan-Bush"
• "Fox is watched by the true believers"
• spending cuts will cause a recession or even a depression
• gladly accepts support of John McCain in 2012 even though McCain said in 2010 that Obama's was a left-wing crusade to bankrupt America
• won't light his hair on fire for that angry mob, the Republican base

It Is All FIRE Now

So says L. Randall Wray:

They screwed workers out of their jobs, they screwed homeowners out of their houses, they screwed retirees out of their pensions, and they screwed municipalities out of their revenues and assets.

Financiers are forcing schools, parks, pools, fire departments, senior citizen centers, and libraries to shut down. They are forcing national governments to auction off their cultural heritage to the highest bidder. Everything must go in firesales at prices rigged by twenty-something traders at the biggest and most corrupt institutions the world has ever known.

Read it all at this link.

Make No Mistake: The Libertarians Are The Enemies Of Humanity

the ideal state of labor under libertarianism

Libertarians are the very enemies of living, especially the likes of John Tamny, who doesn't want you to live in a place for long, have a job there, a house, a family, friends, roots or a history. In short, no country, no patrimony, just rootless searching for the next dollar, until you drop:

Along the lines of the above, Moretti makes the essential observation that quite unlike Italians (Moretti grew up in Italy) who tend to live where they grew up, Americans are constantly moving. Absolutely. Americans are “restless amid abundance” to quote De Tocqueville (as Moretti does), and they are because they’re constantly in search (I would argue this a function of Americans descending from restless immigrants, hence the need for more of them) of better opportunities. If so, the last thing our federal minders would want to do would be to subsidize a stationary state. Housing subsidies are just that, so let’s abolish them in order to facilitate what makes us so great. End of story.

Republican Judd Gregg, Author Of TARP, Now Promotes Superstition

What an embarrassing load of claptrap, here, from the Republican author of TARP, without any basis in facts, just pure superstition about dates, which is just a cover for the real point of the article, a weaseling defense of TARP in the face of Neil Barofsky's critical book on the subject, being released this week:

September is a month where unusual and often extremely damaging things seem to happen. It is the month that kicked off the Great Depression and led to Black Monday a month later. It also is the month in which, in 2008, the nation came close to a total economic collapse. ...

[T]here have been numerous sharp stock market downturns in September. Why these events seem to crowd into September is a subject of a great deal of conjecture.  There is no consistent answer. But it seems September is the point in the year where people assess where they have gone, and what the next year will be like, and make investment decisions based on their conclusions. ...

Unfortunately, this year, September may be a decisive month for the world and our nation’s economy. ...

This will probably be undeniably clear by September. ...

Not long, one suspects. September. ...

September has been a good time for such a reaction. ...

Municipalities, Others, May Have Lost Tens Of Billions Of Dollars On LIBOR-Tied Bonds

So says this story from The Fiscal Times:

As the world has learned in recent months, the banks behind Libor have been reporting incorrect lower rates to make their finances appear more stable. ...

The revelations sparked a major class action lawsuit filed earlier this year by the city of Baltimore, which entered into dozens of swap-based municipal bond contracts in the past decade that were tied to Libor. The suit accused more than a dozen financial institutions involved in setting Libor rates of engaging in a systematic conspiracy that resulted in “hundreds of millions, if not billions, of dollars in ill-gotten gains.”

“Just about every jurisdiction in the U.S. was affected,” said Michael Hausfeld, one of the attorneys representing Baltimore. “It affected hedge funds, money market investors, institutional investors. The total losses could exceed tens of billions of dollars.”

Possible LIBOR Penalties Hardly Match The Enormity Of The Crimes

CNBC reports, here:

Activity in the Libor investigation, which has been going on for three years, has quickened since Barclays agreed last month to pay $453 million in fines and penalties to settle allegations with regulators and prosecutors that some of its employees tried to manipulate key interest rates from 2005 through 2009. ...

Morgan Stanley recently estimated that the 11 global banks linked to the Libor scandal may face $14 billion in regulatory and legal settlement costs through 2014.

These sums are paltry in comparison with the enormity of the skim operation siphoning off profits on hundreds of trillions of dollars worth of transactions.

It almost sounds like the lowball fines were themselves defined by the very regulators already suffering from "regulatory capture".

Satyajit Das, here, provides an in-depth exploration of the LIBOR scandal which includes considerable speculation about the sums lost. He points out that by one unrealistic estimate up to $80 billion is involved, which means the actual damages are far south of that.

On the other hand, he includes this:

Many American corporations and municipalities entered into interest rates swaps where low rates would have resulted in significant losses. The International Monetary Fund estimates the amount lost by municipalities at US$250 billion to US$500 billion in 2010. If successful action is brought under US anti-trust regulation, then banks may be liable for punitive triple damages.

Investment bank Morgan Stanley estimates that losses to banks could total (up to) US$22 billion in regulatory penalties and damages to investors and counterparties, equivalent to around 4-13% of banks’ 2012 earnings per share and 0.5% of book value. In reality, it is difficult to accurately quantify potential losses.

It would seem as of this moment that both banks and regulators have a significant legal and financial interest in suppressing the actual extent to which those last in line for money were fleeced.

Neil Barofsky, TARP "Watchdog", Blasts Financial Fascism In New Book

And Gretchen Morgenson of The New York Times provides a favorable review, here:

He is Neil Barofsky. Remember him — the man whose job it was to police the $700 billion Troubled Asset Relief Program? And his new account, a book titled “Bailout” (Free Press), to be published on Tuesday, is a must-read. ...

He soon discovered that the [Treasury] department’s natural stance of marching in lock step with the banks meant that he had to question its policies and programs repeatedly to ensure that taxpayers weren’t at risk for fraud and abuse.

“The suspicions that the system is rigged in favor of the largest banks and their elites, so they play by their own set of rules to the disfavor of the taxpayers who funded their bailout, are true,” Mr. Barofsky said in an interview last week. “It really happened. These suspicions are valid.” ...

Meaningful changes to our broken system may finally come about, he writes, if enough people get angry. His conclusion is this: “Only with this appropriate and justified rage can we sow the seeds for the types of reform that will one day break our system free from the corrupting grasp of the megabanks.”

At the center of that whole sordid affair of regulatory capture at the time was Tim Geithner at Treasury, former head of The New York Federal Reserve Bank, who obviously isn't simply morally challenged with respect to paying his taxes, but also with respect to reporting LIBOR irregularities.

Unfortunately for us, we not only had two candidates for president in 2008 who voted FOR TARP (Sen. John McCain and Sen. Barack Obama), in 2012 the Republican candidate still defends it, as recently as March here in USA Today Away:

"There was a fear that the whole economic system of America would collapse, that all our banks or virtually all (banks) would go out of business," Romney told a town-hall-style forum in Arbutus, Md. "In that circumstance, President Bush and Hank Paulson said, 'We've got to do something to show we are not going to let the whole system go out of business.' I think they were right. I know some people disagree with me, I thought they were right to do that.".

And not only that, Romney is as unlikely as anyone to get angry about bailouts in future. We can't even get Romney to be angry about ObamaCare.

It's not even clear Obama's recent $100 million in attacks against Romney's personal character have made him mad, especially when it's the subject of speculation on conservative talk radio. Here Rush Limbaugh notes Romney "finally" gets ticked off about Obama's (plagiarizing) use of (Elizabeth Warren's) "you didn't build that", but even Rush isn't 100 percent convinced:

RUSH: You know, folks, I think this actually made Romney mad! I actually think that what Obama said finally ticked Romney off. I think Romney now has realized Obama is not a nice guy who's just befuddled and wrong. That was Romney's prior description of Obama: "He's a nice guy, just doesn't know what he's doing." I think this really got to Romney. Let's squeeze one more in here...

RUSH: Yes, siree bob! Something lit a fire. I am convinced that what Obama said actually has made Romney mad. Not in an insulting way. It has made him mad over what we're up against now. And, of course, as I say: The Obamaites are saying that their guy was "taken out of context." Right. Okay. ...

RUSH: Have you seen anything on Romney's speech in Irwin, Pennsylvania? "A little bit." Well, before we go to the break, let's play sound bite nine again and then follow it up with the last one. This is Romney on fire yesterday in Irwin, Pennsylvania, a suburb of Pittsburgh. He's really ticked off now, I think. This is about Obama saying (impression), "You started a business? You didn't do that! You didn't make that happen! You didn't build that. Uhhhh, you didn't -- you -- you -- you had help! You had a road, a bridge. You didn't do that."

And I think Romney is really ticked. I think there's now a fire burning under the posterior. So here are the two bites. Just bang 'em back-to-back, Mike.

If conservatives aren't sure if Romney's really angry, who is? The man is cool, I tell you, as in passionless, just like Obama. And that is the prerequisite for deception.

On the outstanding problems of our time, from massive bailouts of the banking system to government coercion in healthcare, Gov. Romney is on the same side as Obama and the Democrats.

Some choice!

Meanwhile, the American people just shrug.

A country that can't get angry about anything is a country that deserves what's coming to it (see France).

LA DEUDA ES LA ESCLAVITUD MODERNA

debt is modern day slavery

Libertarian John Tamny Excuses LIBOR Low-Balling Because It Didn't Hurt Anybody

John Tamny's logic fails on two counts.

Throwing out low-balled LIBOR rates along with the high rates, to achieve the average reported, misses the fact that the low-balled rates would have been higher if accurately reported, thus aggregating all reported interest rates paid on the low end higher up the ladder, necessarily boosting the level at which the lowest rates were thrown out and skewing the average higher.

Here he says it:

As readers are aware, the banks that participate submit what they estimate to be their cost of credit, and the 4-5 highest and lowest estimates are thrown out. ...

Of course assuming Barclays truly lowballed the number in question, its false estimate wouldn't have factored into the calculation. And if it did, as in if Barclays' estimates actually worked to lower various Libor-informed interest rates, then the borrowers on whom lenders allegedly predate would have been made better off.

No, false low estimates most certainly would have factored into the calculation precisely because their input at their true higher level was missing. 

But the real kicker is, so what if they succeeded at cheating! Big deal! At least borrowers got a better deal!

I don't know how much more morally obtuse you can get.

For some people, nothing more than materialism can be imagined, and they're usually either communists or libertarians. For both of them, the end justifies the means.

Hey Nolan You Hypocrite, Your "Home" Is Full Of Blood, Real And Imagined

There's nothing innocent and hopeful about the place you live in, you fraud.

Quoted here:

"The movie theater is my home, and the idea that someone would violate that innocent and hopeful place in such an unbearably savage way is devastating to me.”

Democrat Senator Pat Leahy Of Vermont Loves Violent Batman Film "Best Of The Three"

As reported here at The Hill:

The Vermont Democrat and big-time Caped Crusader fan got a sneak peek of “The Dark Knight Rises” at an advance screening Sunday in his home state and says he “Loved it.” The flick, which hits theaters Friday, is the last installment in the three-part series starring actor Christian Bale. ...

When asked how “The Dark Knight Rises” compares to the first two “Batman” films in director Christopher Nolan’s trifecta, the unlikely big-screen star beamed, “I liked it the best of the three.”


From a review which refuses to spoil it (how do you spoil what's already reeking?):

After the murderous clown heist, things slip downhill. A man's face is filleted by a knife, and another's is burned half off. A man's eye is slammed into a pencil. A bomb can be seen crudely stitched inside another man's stomach, which subsequently explodes. A trussed-up man is bound to a chair and set alight atop a pile of banknotes.

A plainly terrorised child is threatened at gunpoint by a man with a melted face. It is all intensely realistic. Oh but don't worry, folks: there isn't any nudity.

And by the way, the director of the film appears to have contributed funds to Sen. Pat Leahy's political campaign in 2010. Did I mention he was the Democrat Senator from Vermont? Not to be confused with the Socialist Senator from Vermont, Bernie Sanders?

Moral Failure Friday in Colorado Gives Way To Bank Failure Friday, Cinco Iteraciones

The 34th bank failure of 2012 is The Royal Palm Bank of Florida, Naples, Florida, costing the FDIC $13.5 million.

#35 is Georgia Trust Bank, Buford, Georgia, costing the FDIC $20.9 million.

#36 is First Cherokee State Bank, Woodstock, Georgia, costing the FDIC $36.9 million.

#37 is Heartland Bank, Leawood, Kansas, costing the FDIC $3.1 million.

#38 is Second Federal Savings and Loan Association of Chicago, Chicago, Illinois, costing the FDIC $76.9 million.

When The Purge Comes, It's Inspiration Will Be Obama's Barbarians In Hollywood

From The UK Daily Telegraph, here, which does a pretty good job of exposing the vulgar and violence-loving friends of Obama in Hollywood who represent the popular face of the global reach of Obama's crony capitalism fascism:

Spider-Man now looks like Bambi when set next to The Dark Knight. Even since 2002, the public's willingness to expose children to previously unthinkable levels of screen violence has soared, and the BBFC finds itself virtually powerless to stop it. ...

Britain appears to be gulping down entertainment values wholesale from a Hollywood intent upon mining the profit margin from barbarism. America, for all its manifold strengths, is still a country in which the population can be roused to a frenzy of condemnation by the sight of Janet Jackson's escaped nipple on the Super Bowl, but views the sight of a bound man being torched to death as all-round family entertainment. ...

Little boys have always played with swords and guns. But they did not always play at beating a prisoner's genitals with a rope, or stitching a live bomb inside a man's stomach. For that innovation we must thank Hollywood, the industrious factory of dreams, now frequently devoted to churning out nightmares.

These evil dreams, repeated often enough to the young, prepare them to commit crimes such as have occurred in the past, for example at the hands of this woman, executed in 1945 at the age of 22 for her crimes at Bergen-Belsen:

She admitted that she regarded the inmates of the concentration camps as "dreck", i.e. subhuman rubbish and like you or I may kill an insect without feeling guilty about it, she saw nothing inherently wrong in what she was doing. At her trial, she denied selecting prisoners for the gas chambers although she did admit she knew of their existence. She did admit to whipping prisoners with the cellophane whip and also to beating them with a walking stick, despite knowing that both practices were contrary to the camp rules.

Hers is a classic case of what happens when an immature person is given total charge of a large number of people who are viewed by those in authority as totally expendable. No one seemed to care how many of the concentration camp inmates were killed or beaten by her even though there were nominal rules against mistreatment of prisoners. So Irma had, effectively, freehand to kill and torture to her heart's content. She clearly felt that she was carrying out Hitler's and Himmler's policies, which in her mind largely exempted her from responsibility for her actions.

It has been said that Nazism replaced this young girl's normal sex life and that her sexuality manifested itself in the brutal and sadistic treatment of her female prisoners. 

Ingenious Interpretations of "You Didn't Build That"

If you didn't build that then they can take it.

You didn't build that, my cronyism did.

Oh yeah. Yankee ingenuity.

Full Time Employment In June 2012 Is At The Year 2000 Level

America first achieved full time employment at today's 114 million level way back in the year 2000.

Things are not fine in the full time employment sector, which remains 6 percent depressed from the all time high in November 2007 when nearly 121.9 million worked full time.

Examine the data for yourself, here.

Not only should the country have back all those 7 million lost full time jobs by now in a normal recovery, there should be even more working full time than that to accommodate the natural increase in the population in the last five years. The trend line would suggest that we should have in excess of 125 million or more working full time, 11 million more than work full time today.

Not Only Should The Young Have No Guns, They Should Have No Movies

And while we're at it, no one shall vote for president who isn't also at least 35 years of age.

ABC News reports here that the gunman's gear and m/o resembled the film:

Holmes was wearing a bullet-proof vest and riot helmet and carrying a gas mask, rifle, and handgun, when he was apprehended, according to police. Federal Alcohol, Tobacco, and Firearms sources told ABC News that agents will begin tracing an assault rifle, shotgun, and two handguns used in the attack. ...

The highly-anticipated third installment of the Batman triology opened to packed auditoriums around the country at midnight showings on Friday morning, and features a villain named Bane who wears a bulletproof vest and gas mask. Trailers for the movie show explosions at public events including a football game. Though many moviegoers dressed in costume to attend the opening night screening, police have made no statements about any connection between the gunman's motives and the movie.

Rep. Amash, Other Opponents Of Spending, Cave To Avoid A Government Shutdown Crisis

 

 

The Tea Party in Congress is dead, if it were ever alive.

 

Its most ardent wannabes in the Congress have been now fully and completely co-opted by the Republican Party, which couldn't use a crisis to get what it wants if a Democrat spelled it out in an instruction manual. Republicans not only have no principles, they have no skills.

Republican opponents of increased government spending have caved in to a plan to avoid a government shutdown crisis and accept a continuing resolution of at least six months, enshrining spending at the high levels they formerly opposed.

The mood is not dissimilar to the banking panic period around the election of 2008, when Republicans caved in to TARP in order to get past the crisis. They got past it alright, and deservedly lost everything in the process.

The whole point now, they say, is to get past the danger the upcoming election represents, and the lame duck session, periods when government is most responsive to, and most dismissive of, politics, and it is politics which the so-called conservatives now fear. It doesn't occur to them that one of the rewards of an election is the free hand given to the winners to do the will of the people. Gov. Scott Walker's victories on behalf of the people of Wisconsin evidently mean nothing to them. Fear of a lame duck session is simply proof that so-called Tea Partiers in Congress don't have the courage of their convictions.

The election, on the contrary, is the perfect opportunity to crucify the Democrats on the issue of spending, and especially their intransigence on it. Nothing focuses the mind like when your job is on the line.

Well guess what, Republicans? Your job is on the line, too. And I have a keyboard, and an internet connection.

Instead of postponing the issue to next March, outrageous spending should be front and center in October when Americans spend a few days paying attention to it for once. Republicans obviously have no stomach for such fighting. But Democrats do, which is why they win.

Making Democrats take the fall for increased spending and taxes may be difficult work, but if you can't figure out how to do that, then quit, but don't piss down our necks and tell us it's rainin'.

The truth appears to be that the so-called conservatives can see the handwriting on the wall. They have a candidate for president who won't cut spending if elected because that candidate, Gov. Mitt Romney, thinks cutting spending would put the country into depression. So-called Tea Partiers in Congress evidently agree with this Keynesian analysis. They'd rather look like they support this absurdity for political ends than do the right thing for the country. They don't want to continue in lonely isolation under a Romney administration. And they certainly don't want to be held responsible for a depression.

In taking this step, the conservatives no longer deserve our support, or our respect.

It's just one more reason why alliance with the Republican Party is the kiss of death for conservatism.

The Christian Science Monitor has the story, including these excerpts, here:

In a bid to avoid a potential government shutdown, several of the House’s most conservative Republicans say they would be willing to go along with a six-month extension of government funding, which is currently set to run out at the end of September, at levels they’ve voted against in the past. ...

The idea is spearheaded by Sens. Jim DeMint (R) of South Carolina, the most prominent tea party figure in Congress, and Lindsey Graham (R), South Carolina's senior senator. It was laid out in a letter signed by 20 Republicans to House and Senate GOP leaders on Wednesday. But support for the move is wider than the initial signatories: Even Rep. Justin Amash (R) of Michigan, who voted against the Republican budget proposal in March because he said it cut too little from government spending, said he would vote in favor.

And here's a little news flash for you: Lindsey Graham is not now, nor has he ever been, a member of the Tea Party, or a conservative.

As for Rep. Amash, I guess your precious "consistency" has its limits, eh Justin?

Fired American Workers Take 50 Percent Pay Cuts And Do Nothing About It. Spaniards Take 15 Percent Cuts And March.

The American people will do anything for money.

Ask anyone over 50 who's been fired despite being highly productive and highly skilled, now working any job, or any number of jobs, just to pay the bills, but making half what they used to make. We're too old to sustain a fight, and they know it.

But they marched today in Spain, and over far less, as reported here:

"There's nothing we can do but take to the street. We have lost between 10 and 15 percent of our pay in the past four years," said Sara Alvera, 51, a worker in the justice sector, demonstrating in Madrid. ...

Protestors complained that they were being made to pay for the financial crisis while banks and the rich were let off.

"We have to all come out into the street, firefighters, street-sweepers, nurses, to say: enough," said Manuel Amaro, a 38-year-old fireman in Madrid holding his black helmet by his side.

"If we don't, I don't know where this is going to end."

I think prosperity has bred the fight out of Americans. Many have lost 40 percent of their net worth since 2008, but here we sit, just taking it, while Spaniards march over just 15 percent.

Something has put the fight back into Spaniards somehow. I admire them for that.

Don't you know that you can strike back at your oppressors, too, America?

Just stop working. Just stop cooperating. 

What if everyone just said "No" to work for a month, say starting August 1? And "No" to volunteering. And "No" to everything anyone expects of you. Employers would absolutely panic. You might even bankrupt them. Shouldn't someone go bankrupt for a change besides you?

The government would panic because it desperately needs the tax revenue. You might even get rid of the government, considering that its reaction just might de-legitimize it.

How about making someone else panic for a change?

How about if America protests for a change?

How about taking August off? Europe does. Why don't we?

What Do Hillary and Huma Have In Common?

Dicks.

They even work for one.

Pelosi Backs Off Romney Tax Returns. Does She Fear Having To Release Her Own?

She's rich as Croesus, after all. Her financial disclosure for 2010 makes her nearly as rich as Romney.

Roll Call reports here that only 17 of 535 elected members of the US House and Senate have disclosed their tax returns:

The Minority Leader faced questions about the issue after a McClatchy News report showed only 17 of 535 Members released their tax returns when asked. ...

“Some people think the same standard should be held to the ownership of the news media in the country who are writing these stories about all of this. What do you think of that?” she asked.

How quickly they pivot to put the focus anywhere but where it belongs get the stink off.

Hey, but while we're at it, how about Diane Sawyer, who married the descendant of a famous communist? She makes an awful lot of money, asking no important questions of anyone, especially of Democrats.

According to salon.com, here:

In 2008, Forbes ranked her 65th on the list of the “World’s 100 Most Powerful Women.” She is said to command a salary of between $12 and $15 million a year.

Obama has spent about $100 million trying to put the stink on Romney, and it isn't working. Obama's rating on his handling the economy has slipped into the 30s during the same interval.

Pelosi is telling him it's time to move on.

MoveOn!

Forward! 

Dick Bove Sounds Just Like George Bush: We Tampered With LIBOR To Save The Banks

The hypocrisy just never ends. It gets so common no one has the energy left from all the outrage to pick up a torch and a pitchfork anymore. The whole industry is corrupt and all we can hope for is God sends a meteor attack to destroy them all, preferably at the opening bell.

Dick Bove, quoted in a story here:

Bove acknowledged holding what "may be a contradictory stance," but he is sticking to it.

"It will be recalled that the regulators were dealing with a significant financial crisis. To stem the panic, they lowered interest rates, invested in banks, loaned trillions of dollars to these institutions and guaranteed trillions more in bank liabilities," he said in an analysis for clients.

"If the dollar Libor rate had risen sharply in this period all of this activity would not have succeeded."

Every time some new misdeed is discovered we're told that it was necessary to bend the rules in order to keep everything from falling apart.

We're nearly four years on from the onset of the panic, and here we have a leading cheerleader for the banking industry telling us that suppressing LIBOR was necessary to save the system. I seem to recall that was the argument for TARP which relieved NOT ONE SINGLE TOXIC ASSET, and for the Fed opening the discount window to the world with nearly $10 trillion in liquidity loans at ultra-low rates homeowners will never get, and for every other violation of the principles of free markets we have witnessed under Republicans and Democrats alike, all of which amounts to the biggest fascist swindle ever perpetrated on a once free people.

A pox on all your houses! 

"Look. I obviously have made a decision to make sure the economy doesn't collapse. I have abandoned free market principles to save the free market system. Having said that, I'm very confident that with time the economy will come out and grow and people's wealth will return."

-- President Bush, 2008

Germany's Lonely Realists About The Euro

From Ambrose Evans-Pritchard, here:

Thilo Sarrazin is not everbody’s cup of tea. The ex-Bundesbanker and shock-jock critic of Islam in Europe loves to make mischief.

But his latest broadside against monetary union in the Frankfurter Allgemeine is spot on. ...

Mr Sarrazin is almost alone in German public life, at least until the dam breaks, which cannot be far away.

His one big ally is Hans-Olaf Henkel, former head of the German industry federation and author of a master plan to break EMU in two – with Germany and northern allies withdrawing, leaving France and the Latin bloc with the euro. ...

He is a brave man, the survivor of two years of vilification in the German press for daring to challenge orthodoxy.

Elizabeth Warren Is Still Talking Bull: Defends Obama's Theft Of Her Idea In "You Didn't Build That"

The Boston Herald quotes her here:

Elizabeth Warren yesterday came to the defense her former boss President Obama’s controversial statement that businesses’ owners can’t take credit for their success, repeating her own campaign line that, “nobody got rich on their own.”

Warren’s reiteration of her statement — which became an iconic and controversial cornerstone of her campaign — comes as conservatives have leapt on Obama for saying “If you’ve got a business — you didn’t build that. Somebody else made that happen.”

Warren said during a campaign stop in Dorchester yesterday, “I think the basic notion is right. Nobody got rich on their own. Nobody. ... they moved their goods on roads the rest of us helped build, they hired employees the rest of us helped educate, they plugged into a power grid the rest of us helped build,” she said.

“The rest of us made those investments . . .."

Class consciousness blinds the left from seeing the obvious defect in the argument. The successful also helped build the roads, build the power grid, and educate the employees in addition to doing what they did on their own.

You know, she should be a little upset with Obama for stealing her arguments without attribution. Obama didn't build those, she did. 

Price Of Gold Adjusted To The Purchasing Power Of The Dollar

What is today's fair value price of an ounce of gold? Is it really $1,579 the ounce?

In 1913 the price of gold was still fixed at $20.67 the ounce and remained there until FDR devalued the dollar and fixed the price at $35 the ounce. It wasn't until 1971 that gold convertibility was finally ended and the dollar allowed to float completely freely. Today's gold price represents a price increase of over 7500 percent from $20.67 the ounce, which was gold's prevailing price after the War Between The States until the establishment of the Federal Reserve in 1913 and right up to the Great Depression election of FDR in 1932.

Does that sound right to you? 7500 percent?! 

One way to decide is to see what's happened to the dollar in terms of its purchasing power since 1913, which marked the end of a long 35 year period of dollar purchasing power stability.

From 1913 through 2011, the dollar's purchasing power has declined so much that it took $23.40 to buy in 2011 what $1 could buy in 1913. Another way to say that is the dollar has suffered a devaluation of 2340 percent over the period.

So if you applied that percentage to the price of gold in 1913, you'd arrive at a gold price in 2011 of $484 the ounce, suggesting that today's gold price is inflated by about 226 percent and needs to fall about $1,095 the ounce.

Opinions vary on the fair price of gold, from $218 (Woodhill's calculation of purchasing power) to $800 (Tamny's ten year average) and even today's market value around $1,500 (Lewis).

I think it is interesting that gold ended both 2003 and 2004 below $440 the ounce. It was in November of 2004 that GLD, the SPDR Gold Shares, first made its appearance on the NYSE, making daily speculation in gold like daily trading in a stock.

It has hardly looked back since, but it probably should, and probably will.

The Purchasing Power of the Dollar Under Post-War Presidents Is A Catastrophe

The purchasing power of the dollar under Truman fell 12 percent in four years (1949-1953).

The purchasing power of the dollar under Eisenhower fell 12 percent in eight years.

The purchasing power of the dollar under Kennedy/Johnson fell 23 percent in eight years.

The purchasing power of the dollar under Nixon/Ford fell 65 percent in eight years (gold convertibility went out the window in 1971).

The purchasing power of the dollar under Jimmy Carter fell 50 percent in four years.

The purchasing power of the dollar under Ronald Reagan fell 36 percent in eight years.

The purchasing power of the dollar under GHW Bush fell 17 percent in four years.

The purchasing power of the dollar under Bill Clinton fell 23 percent in eight years.

The purchasing power of the dollar under GW Bush fell 21 percent in eight years.

Overall, the purchasing power of the dollar has fallen 800 percent in the sixty years between 1949 and 2009. It takes $9 in 2009 to buy what $1 could in 1949.

People like Larry Kudlow who talk about "strong dollar" presidents "like Ronald Reagan" don't know what they are talking about.

We haven't had a single strong dollar president in the post-war period. All eleven have presided over inflationary (monetary) policies which have impoverished the American people.

For the 35 years between 1878 and 1913 the dollar ACTUALLY GAINED A PENNY in its purchasing power, when the dollar was fixed at $20.67 per ounce of gold.

The strong dollar presidents? Hayes, Garfield, Arthur, Cleveland, Harrison, McKinley, Teddy Roosevelt and Taft.

A different breed of men.

Stocks Are Really Cheap? I Don't Think So.

Stocks are not "really cheap".

The Shiller p/e ratio is at 21.90 as of yesterday, 33.3 percent elevated off the mean of 16.43.

Stocks weren't even "really cheap" in March 2009 when the Shiller p/e ratio dipped dramatically to 13.32. Which is not to say stocks weren't "on sale" then. They certainly were, compared to the mean now, but that was barely a 19 percent discount.

"Really cheap" is rare in market history, say a Shiller p/e of 6.64 in 1982, or 4.78 in 1920, or 5.56 in 1932. Compared to the mean today, a Shiller p/e of 5 represents something like a sale of nearly 70 percent off.

Now that's "really cheap".  

Getting Out While The Getting's Good: Decade-Long Retirement Spree Exacerbated Unfunded Liabilities

So says Steven Malanga for RealClearMarkets, here:

From 2001 through 2010, the number of government workers or their beneficiaries receiving pensions from state and municipal funds soared by 2.3 million, or 38 percent, to 8.25 million. During that time, total government workers active in pension funds increased by just 5 percent. As a result, the ratio of public employees still working to those retired fell by a full half worker during the decade, from 2.3 to 1.8. The outflow of money from funds soared, doubling from $100 billion paid to beneficiaries in 2001 to $200 billion in 2010 (the latest year comprehensive statistics are available). ...

Since we haven't set aside enough money to fund these beneficiaries, the massive outflows of funds are troubling. In 2001, governments and workers contributed $65 billion toward pensions while $112 billion went out the door, counting not only payments to beneficiaries but other kinds of withdrawals too. In 2010, workers and government contributed $125 billion to the funds, thanks largely to a sharp increase in contributions from governments (that is, taxpayers), but $213 billion exited the funds.

Unfunded Liabilities Of State, Local Governments Could Be $4 Trillion Or More

That's what I read in the new State Budget Crisis Task Force Report, here:

Under current assumptions used by actuaries to value liabilities, state and local government pensions are underfunded by approximately $1 trillion. Economists and financial analysts generally believe that liabilities should be valued using “low risk” discount rates, which would lead to much higher liability estimates. Under this approach, estimated unfunded pension liabilities are $3 trillion or more. ...

Most state and local governments have promised, in addition to pensions, substantial retirement health care benefits to their workforces. These benefits have barely any funding. In addition to health care, sometimes there are other benefits provided in retirement, such as life insurance; in combination all of these are known as “Other Post-Employment Benefits” (OPEB). Until the Governmental Accounting Standards Board in 2004 issued standards requiring disclosure, governments did not regularly make these liabilities public. ...

State-administered OPEB plans have unfunded liabilities of more than $600 billion. Similar liabilities for locally administered plans are likely even larger, since local workforces are almost three times as large as state workforces. The combined state and local government liabilities are likely to be well above $1 trillion. If the federal government increases the eligibility age for Medicare, OPEB liabilities could increase further, because state and local government retiree health plans generally provide substantial benefits for the transition period between retirement (usually under age 65) and eligibility for Medicare.

Most governments fund these benefits on a pay-as-you-go basis rather than contributing to a funded plan.

The New York Times discusses the report, as reproduced here.

Municipal bond investors will want to weigh seriously this language from the report:

Recently, the number of municipal bond downgrades for governments has outnumbered upgrades. States are finding it difficult to ignore their local governments’ increasing fiscal distress. A few states, including North Carolina, New Jersey, and Pennsylvania, have well-established, effective procedures for monitoring and assisting local governments before they encounter acute fiscal distress . . .. More recently, Michigan has established significantly expanded oversight procedures. But most states wait until local governments approach fiscal insolvency or seek aid from the state before intervening. There appears to be growing recognition in the financial community and the states themselves that state monitoring, supervision, and early state involvement in solving local government fiscal problems is sound policy for both levels of government. But it will require skilled political leadership at the state level to overcome local government resistance to what localities often regard as intrusions on their right to self-government.