"Retirement Is The Darkness At The End Of The Tunnel"

The End Of The Tunnel

So says Rosie, here:

“The median age of the boomer is 55 going on 56 and retirement is the darkness at the end of the tunnel,” Rosenberg said. “The trend towards second jobs, do-it-yourself, private labels, dollar stores, maintaining your existing vehicle, downsizing property needs, cocooning and frugality will continue unabated.”

Can We Call It A Depression Yet?

2008 GDP in 2005 dollars didn't recover until 2011, and only just barely so. 

Per the latest revisions from the Bureau of Economic Analysis here, real GDP in 2005 chained dollars:

2008 $13.162 trillion

2009   12.758

2010   13.063

2011   13.299

2012   13.558.

I've written that I think we had a depression starting in 2008 when GDP declined from the previous year 2007, and that the depression ended based on reports of real GDP, but perhaps looked at from the point of view of chained 2005 dollars the depression ended just last year and not in 2010 as I've maintained previously.

Al Lewis for MarketWatch here disagrees:

The Great Depression that Federal Reserve Chairman Ben Bernanke claims to have averted has been part of the background radiation of our economy since at least 2008.

It’s just that like radiation — it’s invisible.

We’ve called it the recovery, the jobless recovery, the slogging recovery and more recently the fading recovery. We’ve measured modest growth in our nation’s gross domestic product to record that our so-called Great Recession ended in June 2009. And now we are saying that if this disappointing growth suddenly disappears, as currently feared, we will be in a new recession.

There is nothing more depressing than hearing about a new recession when you haven’t fully recovered from the last one. I take heart in suspecting that in a still-distant future, historians will look back with clarity and call this whole rotten period a depression.


Lewis' remarks at least show that calling what we've been through a "depression" is now possible in polite company.

I'd call that . . . progress!

Congratulations, Rush, For 24 Years Of Success With Irritable Mental Gestures

Euro Area Gold Holdings Declined Almost 14 Percent Up To Crisis, Then Held Steady

So says Axel Merk in a very interesting analysis, here, which concludes that central banks have been scared into holding gold since the financial crisis:

From what we see, central banks have been scared into holding gold since the onset of the financial crisis. Beyond that, we don’t see an active strategy at the ECB to keep its gold reserves at 15% of total assets. Instead, the ECB’s comparatively measured approach has simply lead to a reasonably stable percentage of gold reserves. Of course that was before ECB President Draghi said on July 26, 2012, that he shall do “whatever it takes to preserve the euro.” (an interpretation of that may be that more money printing is on the way). For now, the cultural differences in responding to the financial crisis (Europe: think austerity; US: think growth) suggest that the euro should outperform the U.S. dollar over the long term, assuming the not-so-negligible scenario of a more severe fallout from the Eurozone debt crisis won’t materialize.

His chart shows Italy has sold absolutely no gold since 1999, and Germany very little, while the Euro area as a whole has sold just under 14 percent of gold holdings since December 1999. France was the big seller from 1999, arresting its gold holdings during the crisis at a level which nearly matches Italy's. America's gold reserve has remained constant for years according to official reports, although it is said that Rep. Ron Paul would like to audit Fort Knox and The Federal Reserve Bank Of New York just to make sure.

(image source)

"Never Has The American Consumer Been This Weak For This Long"

So says Stephen Roach of Yale University, here:

Over the last 18 quarters, annualized growth in real consumer demand has averaged a mere 0.7 percent. This compares with a 3.6 percent growth trend in the decade before the crisis erupted. Never before has the American consumer been this weak for this long.

What's Happened To Michelle Obama's Toned Arms?

Lookin' just a little flabby down south.

h/t 'nita (source)

The State-Capitalist Quotation Of The Day Comes From Elizabeth Warren

Elizabeth Warren provides the state-capitalist quotation of the day, as seen at this link:

“We've got bridges and roads in need of repair and thousands of people in need of work. Why aren’t we rebuilding America? Our competitors are putting people to work, building a future. China invests 9% of its GDP in infrastructure. America? We’re at just 2.4%. We can do better.”

Oh, if only Obama were the head of China, things would be so much better . . . here!

Banking "The Achilles Heel Of Capitalism"? Or The Right's Version Of Socialism?

There is a term for right-wing socialism, but nobody seems to want to use it because to do so is to indict what we've been living under since at least the time of FDR as fascism.

It was inevitable that grafting onto capitalism elements of left-wing economics would turn out this way. Just look at China, which grafted from the other direction. Both now meet in that middle ground of state capitalism and find in each other the most agreeable of economic partners. The Chicoms have become but the mirror image of an America which long ago shed its devotion to free-market capitalism.

This upsets people, especially the partisans of left and right who couldn't possibly tolerate the obliteration of the distinctions they assert between themselves, as between Republicans and Democrats. Still, some perceptive individuals in our midst see that there is really no difference between left and right in America because the two have been combined in a peculiarly American way through multiple revolutions in banking which socialized both the assets and the liabilities.

Despite what anyone says, the fact is we don't have a free market in banking, and haven't had one for a very long time.

From Ed Yardeni, excerpted here:

“The problem with banks is that they tend to blow up on a regular basis. That’s because bankers are playing with other people’s money (OPM). They consistently abuse the privilege and shirk their fiduciary responsibilities. Whenever they get into trouble, government regulators scramble to bail them out first and then scramble to regulate them more strictly. Without fail, the bankers respond to tougher rules by using some of the OPM to hire financial engineers and political lobbyists to figure out ways around the new regulations.

"In my opinion, banks are the Achilles’ heel of capitalism. They really do need to be regulated like utilities if their liabilities are either explicitly or implicitly guaranteed by the government, i.e., by taxpayers. Banks should be permitted to earn a very low utility-like stable return. Bankers should receive compensation in the middle of the pay scale for government employees, somewhere between the pay of a postal worker and the head of the FDIC. It should be the capital markets, hedge funds, and private-equity investors that provide credit to risky borrowers instead of the banks.”

Our money is your money. We print it for you to use.

The Fascist Grip Of Banking: Rate Rigging In LIBOR, Now Also In Municipal Bonds

There is no corner of contemporary economic life which is not in thrall to state-sponsored banking, and so no corner of it which is not rigged to favor the players wielding the taxpayer backstop.

American-style fascism only seems most vivid when "banking's" losses are finally socialized through spectacular bailouts. Just as spectacular as the bailouts are the efforts to re-define nearly everything as banking in order to bring it all under its aegis. Think GE, GM, Chrysler, investment banking and AIG. That process of socialized losses continues apace on a smaller scale with every bank failure carefully orchestrated for Friday nights, to which Americans are now so thoroughly inured due to its frequency and efficiency. That is but the ubiquitous residual background radiation of the system's big bang, the collapse of banking's housing collateral, rapaciously used to leverage private shareholder and investor gains.

But even the spectacular blow-ups do not keep our attention for very long. Like the public servants who have succumbed to regulatory capture by industry, our anger is also subject to capture by the power of banking's propaganda, the central message of which is that the collapse of banking as we know it would mean nothing short of civilizational collapse. But it is merely their revolutionary version of civilization, not ours, based as it is on the dictum "How can you respect a man who needs you more than you need him?" Traditional Americans have always believed instead in "Owe no man anything".

Meanwhile the gains accruing to elites manipulating the levers of industries which have installed doors to the government are harder to ferret-out, the heads-they-win side of tails-you-lose. Lately it was LIBOR manipulation which came to the light, which has been rigged for far longer than since the latest financial crisis. Now the municipal bond market's municipal market data index, MMDI, is in the spotlight, according to this story in The New York Times, reproduced here:

Thomson Reuters, which owns Municipal Market Data, said on Monday that it “has been involved in discussions with regulators” about the rates, which influence the prices of bonds and derivatives in the $3 trillion municipal bond market.

The company released the statement after the municipal bond industry’s self-regulator, the Municipal Securities Rulemaking Board, said that its board was “concerned about the transparency” behind the creation of a few indexes used to set prices in the municipal bond market, the most important of which is the M.M.D. index.

What we may find from this is that local taxing districts have been paying way too much for roads, schools, libraries, cops and firemen, providing gains for the few financed once again on the backs of many (property) taxpayers.

Massive Central Bank Purchases Of Gold Boosted Price Over 30 Percent In Last Year

This baby weighs one metric ton

That's the upshot from this report in The Wall Street Journal, here, in early June:

Central banks increased their gold hoards by 400 metric tons — each equal to almost 2,205 pounds — in the 12 months through March 31, up from 156 tons during the prior year, according to recent World Gold Council data. ...

Central banks “will probably be continuous buyers of small volumes of gold for the foreseeable future,” says Jeff Christian, founder of New York–based commodities consulting firm CPM Group. By small volumes, he means 311 to 374 metric tons a year, or about 10% of the global supply. ...

He says that central bankers will avoid buying any quantity that dramatically affects the price. They know that the market is tiny, compared with the $4 trillion-a-day foreign-exchange market. Still, consistent buying of 10% of annual supply can’t but help keep the price elevated.

Up from 156 tons? That's a 156 percent increase in purchases by banks in the last year, March over March.

That's a remarkable development in the face of the enormous growth in central bank balance sheets to support weak economies at the same time that stiffer Basel III capital rules are imposed on the world's largest fiat money banks. Central banks are the banks of last resort and have been demonstrating rather vividly what they think counts as the capital of last resort.

Is it any wonder then that gold soared from $1,400 the ounce in March 2011 to $1,900 by September 2011? Gold has been above $1,750 as recently as March 2012. Clearly central bank demand has boosted price. 

Purchases of 400 metric tons at today's pull-back-price of $1,600 the ounce would imply $22.58 billion allocated to gold purchases by central banks during the one year period. Purchases of 156 tons at $1,400 the ounce at the top previously comes to at best only $7.7 billion allocated to gold purchases just prior to the period. That's a nearly three-fold increase, and a sign that central banks' confidence in sovereign support of fiat currencies has eroded to say the least. 

The implications for gold price going forward, however, are tricky.

The Wikipedia gold investing article, which also depends on figures from the World Gold Council, puts annual demand in 2005 at 3,754 tonnes and states annual production figures, for example, of as few as 2,500 tonnes as of 2010 to as many as 3,859 tonnes in 2005. Complicating matters is its assertion that 2,000 tons routinely gets allocated to jewellry and industrial production annually, making central bank acquisitions of 375 metric tons annually far more than 10 percent of the remaining supply on either accounting of the total.

It would seem that the very wide spread for annual production reported between 2,500 tons and nearly 3,900 tons (over 50 percent!) is part of a delicate balancing act by the industry, which attempts to pay its respects to all sides concerned in the gold business, both those who profit from production and those who profit from consumption.

Jeff Christian, cited in The Wall Street Journal article above, hints perhaps at how to split the difference. If his low end estimate for bank purchases of 311 metric tons is really 10 percent of annual supply, that means annual supply is probably closer to 3,100 metric tons. Sans jewelry of 2,000 metric tons, bank consumption of 350 metric tons or so going forward would be nearly a third of remaining production if sustained at that level.

In response to this surging demand by banks in the last year, however, production has probably run up against a new and unsustainable level, which is why the price of gold has softened roughly 15 percent off the high in recent months. Add to this that significant fresh inputs from consumers are unlikely in view of declining wages and the increased demand for return on investment which gold cannot give. Few have significant resources left to mop up increased supply of gold.

Oversupply of gold has been noted as recently as mid-July, here, by Dominic Schnider, an analyst at UBS Wealth Management in Singapore:


"The market is in oversupply -- production growth is solid and we simply don't see incremental gold purchases," he said.


That suggests banks continue to buy at levels consistent with the recent past, but are restraining themselves a little bit. This coheres with an observed supply glut and softened prices.

An attempt at a non-partisan evaluation of supply here suggests that already mined gold "above ground" historically totals 170,000 metric tons, with another 100,000 metric tons in the ground, less than half of which is profitable to mine under current conditions. In other words, you could devalue the above ground supply with the below ground supply over time, but only by another 28 percent at the extremes, not counting such factors as the small amounts of above ground gold lost to industrial production, the long time required for mines to become profitable, the changing costs of extraction, and the like.

My take is that bank purchases of gold at higher levels in recent times signals that the pendulum has started to swing against endlessly devaluing fiat currencies and against the elite consensus which created them. Official gold reserves around the world already approach 31,000 metric tons, and I expect they will only increase from here, if but gradually. The effect, however, may be to shore up existing currencies rather than to replace them, which would augur for a stabilization of gold prices near present levels and improved conditions for the world's economies.

Interest On The Debt 2007-2012 Has Completely Swallowed GDP Growth

Using the numbers from the June Z.1 release from the Federal Reserve, combined with the latest revisions to GDP from the Bureau of Economic Analysis, I'm showing current GDP, Q2 2012, at $15.596 trillion. GDP in 2006 was $13.377 trillion, for a nominal gain of $2.219 trillion over the period.

The Treasury Department indicates that for fiscal years 2007 through 2011, interest payments on the debt have totaled $2.132 trillion. Extrapolating to twelve months for fiscal 2012 from nine months so far, I add an additional $504 billion to get $2.636 trillion in interest payments over the period, for a net loss of $417 billion. If I forget the current fiscal year and substitute 2006, interest payments have totaled $2.538 trillion, for a net loss of $319 billion.

Either way, America isn't growing at all, and hasn't since 2006. In point of fact, America is in decline. Our national income is not growing sizeably enough even to keep pace with interest payments on the debt.

Ask many people who have gone bankrupt in recent years if they are familiar with the phenomenon of more going out than coming in.

Noted Progressive Calls Second-Great-Depression-Excuse For TARP "Crap"

Dean Baker, here:

[T]he commonly claimed "second Great Depression" scenario is, to use a technical economic term, "crap."  The first Great Depression, by which I mean a decade of double-digit unemployment was not locked in stone by the mistakes made at its onset. There was nothing that would have prevented the government from having the sort of massive stimulus spending that eventually got us back to full employment (a.k.a. World War II) in 1931 instead of 1941 and without the war. The fact that we remained in a depression for more than a decade was due to inadequate policy response.

Don't you see? There are no problems which Keynesian monetarism cannot solve, it's just that FDR didn't practice them then,  and that Obama is not practicing them now.

Otherwise Baker makes the case for clearing the system the quick and dirty way, the way free markets are supposed to work:

The place to look for insight on this question is Argentina, which went the financial collapse route in December of 2001. This was the real deal. Banks shut, no access to ATMs, no one knowing when they could get their money out of their bank, if they ever could.

This collapse led to a plunge in GDP for three months, followed by three months in which the economy stabilized and then six years of robust growth. It took the country a year and a half to make up the output lost following the crisis.

While there is no guarantee that the Bernanke-Geithner team would be as competent as Argentina's crew, if we assume for the moment they are, then the relevant question would be if it is worth this sort of downturn to clean up the financial sector once and for all. I'm inclined to say yes, but I certainly could understand that others may view the situation differently.


Once again, the domestic analogy would be 1920, but that's so, I don't know, modern.

This Idaho Billboard Doesn't Quite Capture It For Me

Instead of "Kills Thousands With His Foreign Policy," I suggest more to the point would be:

"Murders Americans Abroad With Drones. Republicans Applaud."

The political party which lately lays claim to all things constitutional, even showboating by reading the damn thing from the House floor, loudly approves of the president deeming someone a terrorist and dispatching him without benefit of trial. Which is why they voted for the NDAA, an ominous codification of the imperial power of the presidency by a servile Congress.

The Republicans are not the friends of ordered liberty they claim to be. They are the Executive's slaves.

So what does that make you?

"WHY DO WE HEAR THE LOUDEST YELPS FOR LIBERTY THE CONSTITUTION FROM THE DRIVERS OF NEGROES THOSE WHO IGNORE IT?"

Ben Bernanke Sure Is Lucky

Somehow he got the European Central Bank to commit to quantitative easing for a change instead of having to do it again himself.

It buys Ben a bunch of time, and gives him cover during the perilous political season when direct Federal Reserve action would look especially political. Maybe it even frees him up to do a little bit more, on the theory that he can always credit any success we experience to European action, not to his, saying a rising tide lifts all boats, and rot like that.

Crafty devil.

Obama must be praying like hell it works long enough and well enough to keep everyone afloat for three more months.

Famous Spaniard Threatens Leaving Euro On Wednesday, ECB Moves On Thursday

And markets pop accordingly to finish the week, solely on a serious promise of coming central bank intervention.

As reported here on Wednesday the 25th, Spanish elder statesman Francisco Alvarez Cascos, former secretary-general of Spain’s ruling party, became the first major figure in Spain to openly suggest leaving the Euro, saying,

'This can’t go on for long, or we will have to think about leaving the euro before we are thrown out.'

Is it any coincidence that the European Central Bank "moved" on Thursday, as reported here?

'Mario Draghi, the ECB president, vowed to do "whatever it takes" to save the euro within limits of its mandate. "Believe me, it will be enough," he said in London.

'Picking codewords instantly understood by traders, Mr Draghi said the violent spike in bond yields in recent days was hampering "the functioning of the monetary policy transmission channels" - the exact expression used to justify each of the ECB's previous market interventions.'

It was bad enough that ousted Italian leader Silvio Berlusconi had been openly suggesting in recent weeks that Italy should think seriously about whether it ought to continue in the Euro. To put that on the table in Europe's third largest economy was a serious sign that events were turning. Now joined by a similar suggestion in the fourth largest economy in Europe, the ECB had to act to stanch the wound.

The bond markets are forcing everyone to do what they do not want to do, but they will have their say, one way or another.

Q2 2012 Anemic GDP Nearly Swallowed Whole By June's Debt Service Payment

WTOP reports the annualized dollar figure for Q2 2012 GDP at almost $118 billion, here:

Current-dollar GDP increased at an annual rate of $117.6 billion in the second quarter to $15.6 trillion.

Unfortunately, interest payments on the public debt swelled in June to nearly $104 billion:

The debt service shark just chomped the thing down, leaving the head and shoulders on the beach.

"If I Stop Eating The Unemployed I'll Be Just A Regular Bastard"

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.