Why The Shiller p/e Might Mean The Market Has Room To Run

The market might have room to run if excluding the bubble period from the calculation of the Shiller p/e is any guide.

So John Hussman, here:

"Excluding the bubble period since mid-1995, the average historical Shiller P/E has actually been less than 15."

That means the bubble period skews the calculation of today's historical average of 16.46 upward by something like 9%. So with a current Shiller p/e of 23.35 which looks backward incorporating bubble-era p/es into its calculation, a discount of 9% yields a truer Shiller p/e presently of something more like 21.25, which could mean there is still considerable upside potential in the market.

Today's Shiller p/e would have to rise to about 26.4 to reflect the old upper range redline of 24 identified by Hussman as a danger zone.

Interestingly, the March 1, 2009 Shiller p/e of 13.32 was therefore more like 12.1, quite the buying opportunity indeed, though nowhere near the 7 identified by Hussman as that rare thing marking the buying opportunity of a lifetime.

I wish I had had the courage to get in in March 2009. The real average annual rate of return in the S&P500 from then to January 2013 has been +19.14%, simply amazing. But as late as May 2010 people like Richard Russell were telling us to get out of debt and get completely liquid because technical analysis was predicting Armageddon was 6 months away. By August he had changed his tune.

Near term I am somewhat less pessimistic than I was, if only because a real blow-off top looks more definable than before. I'm still keeping my powder dry.

Paul Farrell's Latest AntiCapitalist Mess At MarketWatch Ridiculed Good

In the comments section, here.

"William Sisco" and "J.D." obviously know their stuff.

Buchanan's "The American Conservative" Isn't Conservative

Pat Buchanan's "The American Conservative" isn't a conservative magazine. It never has been, and isn't now. It's editor has endorsed Obama in 2008 and voted for him. That's when I stopped reading. For all I know, he voted for him in 2012.

Now the magazine publishes an article by Mormon Jon Huntsman, former governor of Utah and one time presidential candidate, advocating gay marriage. That makes perfect sense, since Mormons have never subscribed to Christian monogamy except by force of federal intervention. Yes, federal intervention. Utah statehood depended on Mormon renunciation of plural marriage at the dawn of the 20th century. Now here comes a Mormon telling us to redefine marriage once again.

Pat Buchanan should be ashamed of himself.

Ten Years of the Euro v. the Dollar: Up 25%

The Euro/Dollar has gone from 1.06 ten years ago to 1.32 today, up 24.5%, thanks in no small measure to the efforts of the Germanic north.

Forbes' Top 20 Most Miserable Metropolitan Cities For 2013

Here:

20. Youngstown, Ohio

19. Gary, Indiana

18. Poughkeepsie, New York

17. Cleveland, Ohio

16. Atlanta, Georgia

15. Atlantic City, New Jersey

14. Milwaukee, Wisconsin

13. Camden, New Jersey

12. St. Louis, Missouri

11. Toledo, Ohio

10. New York, New York

09. Lake County, Illinois

08. Stockton, California

07. Warren, Michigan

06. Vallejo, California

05. Modesto, California

04. Chicago, Illinois

03. Rockford, Illinois

02. Flint, Michigan

01. Detroit, Michigan

Totals:

Michigan 3

Illinois 3

California 3

Ohio 3

New York 2

New Jersey 2

Missouri 1

Wisconsin 1

Georgia 1

Indiana 1

They Don't Actually READ The Stories At Real Clear Politics

Two People In Washington DC Who Get Reelected For Doing Nothing

Gasoline In Grand Rapids Is Up 25% Since Christmas

Gasoline is up about 25% in Grand Rapids, Michigan, since Christmas to date, just two short months ago. We're actually a little off the highs today. Prices have been erratic at places like Sam's Club where lines are long for what is often the cheapest gasoline in the area (members only). I waited 20 minutes to fill the day after Valentine's, with a bitter cold wind blowing which was not deterring anyone from filling at $3.689/gallon. Today it's $3.769. The price of a fill for me is basically $12 higher today than it was at Christmas.

Molly Ball Doth Espy The Flaccid Organ Called The Senate

For The Atlantic, here:

"The last time a major new piece of policy legislation passed the U.S. Senate was July 15, 2010.

"That's when the Dodd-Frank financial-reform bill came through the Senate. And it was 951 days ago."

Just before the Republicans retook the House in 2010, over 400 bills passed by the then Democrat-controlled House under Speaker Pelosi languished unactioned in Sen. Harry Reid's Democrat-controlled Senate, on which, see here.

Obama Flashback 11/21/11: I Will Veto Any Effort To Stop Sequester

See him say it here, about 3 minutes 55 seconds into the statement made just four months after signing the sequester:

"I will veto any effort to get rid of those automatic spending cuts."

Now, of course, the sequester is no longer his idea and is going to be catastrophic:

Obama cautioned that if the $85 billion in immediate cuts - known as the sequester - occur, the full range of government would feel the effects. Among those he listed: furloughed FBI agents, reductions in spending for communities to pay police and fire personnel and teachers, and decreased ability to respond to threats around the world.

Just ask the Fed to monetize some debt and move on already, will ya buddy?

What You Get When Santa's Hearing Aid Batteries Die

You asked for a GPS unit . . .

. . . but you got a PMS unit instead.

Rush Limbaugh Nonplussed By Caller, Expunged From Record

Rush Limbaugh received a call today from an impertinent listener who suggested that the sequester hubbub about cutting spending by $85 billion a YEAR was completely meaningless since the Federal Reserve has been buying securities in similar amounts every MONTH in the various quantitative easing iterations. We could cut the spending, the caller suggested, and just turn around and recreate the money since the Fed is doing it all the time anyway and no one would ever be the wiser.

The caller was correct, but Rush was completely nonplussed and nervously dismissed the call and cut to commercial (which is why all calls are taken just before commercial breaks, in case they go Egypt). Since I can't find a record of it in the transcripts tonight, I'm guessing it really did disturb Rush enough to make sure the memory of it went straight into the circular file.

But think about it. The Democrats, especially Obama, are screaming the spending cuts are draconian and will hurt necessary jobs and the economy's growth. The Republicans are screaming that unless we cut spending, the world as we know it may come to an abrupt end because of the way a huge mountain of debt threatens to crush growth. Meanwhile the Federal Reserve has expanded its balance sheet from about $500 billion before the crisis to $3 trillion today by purchasing all manner of MBS and Treasury securities and what have you. Over four years that comes to a rate of about $52 billion a MONTH of funny money fed intravenously into the banking sector because it is still as good as dead in its bed.

That threatens everything Rush believes and says about the banks, how they were forced to take TARP, didn't really need it, paid it all back, are now healthy, blah blah blah. When the real story is that the losses they have taken on housing are gargantuan and have left huge holes in their balance sheets (you know, the off-balance-sheet-balance-sheets). The virtually free money from the Fed is designed to help them profit to get back on their feet. For public consumption the Fed says it is doing this to make mortgages cheaper so that housing revives, so that employment revives, neither of which is the real reason. The real reason is to throw banks a life line to allow their private trading desks to make money speculating in the stock markets et alia and restore their capital base.

It's government of the banks, by the banks and for the banks. The rest is just a sideshow.

Hey Obama! Go Sequester Yourself!

CHRIS WALLACE, "FOX NEWS SUNDAY" HOST: Bob, as the man who literally wrote the book about the budget battle, put this to rest. Whose idea was the sequester, and did you ever think that we'd actually get to this point? 

BOB WOODWARD: First, it was the White House. It was Obama and Jack Lew and Rob Nabors who went to the Democratic Leader in the Senate, Harry Reid, and said, 'this is the solution.' But everyone has their fingerprints on this. (FOX News Sunday, February 17, 2013)

Watch here.

Republicans Need To Get A Grip: Obama Did Not Win By A Landslide In 2012

Republicans need to get a grip: Obama did not win in a landslide. Not in 2008, and especially in 2012.

Joe Curl for The Washington Times, in particular, needs to take a pill and calm down, who three times in a recent op-ed (here) credits Obama with a "landslide" victory, which drives him to all manner of hand-wringing and unnecessary speculation about the need for Republicans to alter their message. Instead, what Republicans need to do is alter their candidate.

At this far remove from the November election the results are plain for everyone to see, but no one, evidently, is looking. It really doesn't come as a surprise, however, because they didn't really look at the results after 2008, either, and promptly annointed another loser in the mold of McCain, albeit a better loser.

Sen. John McCain lost to Sen. Barack Obama in 2008 by 1.4 million votes out of 131.3 million cast, barely 1.1% of the total vote.

Gov. Romney lost to Pres. Obama in 2012 by 0.77 million votes out of 129.1 million cast, barely 0.6% of the total vote.

They both lost because both failed to carry Colorado, Florida, Iowa, Nevada, New Mexico, Ohio and Virginia. Had Romney carried them all, which he failed to do by just 767,000 votes in the aggregate, he'd be the president today. McCain failed to carry the exact same states, but by 1.34 million, a performance almost twice as bad as Romney's. In addition McCain lost both North Carolina and Indiana by just 42,000 votes between the two, either of which with the other seven states would have meant a McCain presidency, not an Obama presidency.

The problem with the Republican Party isn't that it can't win elections against a supposedly landslide commanding Democrat machine. Its problem is it can't win with bad candidates like McCain and Romney. They are bad candidates because they are essentially liberal Republicans whom the voters take for Democrat-lite, and shrug.

Why vote for that at all, or why vote for that when you can vote for the real thing?

Message to Republicans: Don't alter your message. Alter your candidate. Nominate a real conservative for a change. The chances are good you'll win.

Sen. Rand Paul Forgets His Libertarian Father Was A Point-47-Percenter

There are losers like Mitt Romney, and then there are real losers like Ron Paul, who in his 1988 foray as the Libertarian Party candidate for president managed a laughable 0.47% of the popular vote.

Libertarianism doesn't stand a chance in 2016 either, except in the fictional polling world of Sen. Rand Paul's own mind, as here:

'His father, he pointed out, came out ahead of Obama in some presidential election polling: “He beat him with an interesting dynamic — loses a third of the Republican vote, gains a third of the Democratic vote and wins the independents. So it’s a sort of third way.”'

Republican primary voters didn't see it that way in 2012 in Rep. Ron Paul's last hurrah, who preferred Mitt Romney to the outgoing congressman by almost 5 to 1. And in the 2012 general election barely 1.3 million people voted for the Libertarian Party candidate for president, former Republican Gary Johnson, who eked out a paltry 0.99% compared to Mitt Romney's 47.18%.

One of the chief characteristics of the ideological mind is its disconnect from reality. Sen. Rand Paul should have his head examined.

Sen. Rand Paul Is Dreaming If He Thinks "Libertarian Republican" Can Win In 2016

Here:

"You know, points have been made and we'll continue to make points, but I think the country really is ready for the narrative coming, libertarian Republican narrative, also because we have been losing as a national party. We are doing fine in congressional seats but we're becoming less and less of a national party because we don't win on the West Coast, we don't win in New England. We really struggled all around the Great Lakes."

"Libertarian Republican" is an oxymoron, kind of like "Reagan Republican". The Libertarian Party in the United States characteristically considers itself successful when it defeats Republicans, not Democrats. Taking over the Republican Party from within is simply another version of this.

Both libertarians and Reaganites are essentially Democrats on the social issues but Republican to the extent that Republicans believe in the free market, which actually is where the rub is. They make a lot of noise protesting their social conservatism, but when the rubber hits the road they do nothing about it legislatively. Meanwhile the country continues to reset to the left on the social issues with every passing year. This is not by accident.

Since neither group gains traction in the Democrat Party on the economic front, the Democrats having sold out long ago to socialism and social license, they both naturally come to the Republican Party to play, where they are partly welcome but eventually cause trouble. The problem is both groups alienate the social conservative base of the Republican Party to one degree or another, and then can't quite convince the Republican establishment either, which is still economically liberal in its orientation and currently is based in the Bush clan. There's a reason, after all, why the Republicans continue to nominate economic liberals like Bush 43, McCain and Romney who do not naturally exude free market principles.

Reagan Democrats succeeded in the Republican Party because they made successful alliances with both Republican factions, which are otherwise so divided they cannot stand on their own. They need liberals of one kind or another to win, either libertarian social liberals or Democrats recovering from the economic radicalization of the Democrat Party, like Ronald Reagan. When Republicans do win with this help, they call it conservatism but still govern from the left, whether it takes the form of Reagan's 1986 tax reform with its hidden mandates and expansions of middle class welfare or George W. Bush's guns and butter in the Wars on Terror and Drugs for Seniors.

The libertarians will not be able to reduplicate this achievement, however, because under their banner fly all the fruits, nuts and flakes Republicans have always identified as socially fringe characters with whom there can be no agreement, while their doctrinaire free market devotion will preclude compromise with the Republican establishment's tax and spend liberals which they will need to win.

As ever, the Republican Party is a house divided against itself, which is why Pres. Obama just loves Pres. Abraham Lincoln.

US Air Force D.U.I. Decoration

More hilarity here.

Michigan's Sales Taxes On Fuel Aren't Spent On Roads!

Oi, just when you thought everything was so simply dissected, you find out it's not. It turns out that Michigan's sales tax on gasoline, distinct from its excise tax on gasoline, is by law earmarked for something other than roads, according to this story for mlive.com by Jonathan Oosting:

[A]ccording to Lance T. Binoniemi of the Michigan Infrastructure and Transportation Association, ... the state collects sales tax on fuel but does not earmark any of that revenue for roads.

"It's the biggest public policy problem we have," Binoniemi said today during a joint session of the Senate and House transportation committees. "The general public does not understand that the 6 percent tax does not go to funding roads and bridges. When you include that sales tax, we probably do have one of the highest (gas tax rates) in the nation." ...

Michigan is amongst a handful of states that levies a sales tax on motor fuel sales, but it does not dedicate any of that revenue to road funding. Most Michigan sales tax is constitutionally earmarked for schools and revenue sharing, while a small amount collected from fuel and automotive products is statutorily earmarked for public transportation. State law currently requires retailers to pre-pay sales tax on gasoline based on a projected per-gallon cost set quarterly (and soon, monthly) by the state Treasury. Those rates are based on the price after the federal excise tax but before the state excise tax.

Obviously one cannot simply substitute a general sales tax increase for a fuel tax increase and spend it all on roads when that increase as applied to fuel sales would sequester it and spend it on something else because the Michigan constitution requires it. Gov. Snyder doesn't really have much of a near term choice for increased road funding but to resort to an increase in the excise portion of the tax on fuel. Longer term the constitution would have to be amended, alas.

This is why one should not be amending the constitution for legislative purposes in the first place, an especially bad habit in Michigan where everyone wants to resort to that nuclear option for every pet project and crackpot idea. The result is chaos, confusion, unreason, inflexibility and disorder.

What's a legislature for if not to raise or reduce taxes and defend that at reelection time? Enshrining minutiae like what the 6% sales tax on fuel must be spent on in the constitution simply allows legislators to escape the political consequences of that allocation, which I'm guessing is why so much of Michigan politics seems to get shuffled off to the referendum process, otherwise known, at best, as direct democracy, at worst, as mob rule.

Pretty cowardly when you get down to it.

Give Us A President So Depressed He Can Hardly Get Out Of Bed

So opines Gene Healy for Reason, here:

[T]he conventional wisdom overvalues presidents who enjoy the job. In his influential 1972 book The Presidential Character, political scientist James David Barber argued that we should pick presidents by their personality type. The "active-positive" president—the ideal voters should seek—tackles the job with manic energy and zest and "gives forth the feeling that he has fun in political life." The "passive-negative" sees the office as a matter of stern duty, and his "tendency is to withdraw." Among Barber's "active-positives" were troublemakers FDR, Truman, and JFK; his "passive-negatives" included the Cincinnatus-like figures Washington, Eisenhower, and, of course, Coolidge. Maybe we should only give the job to people who are so depressed they can barely get out of bed.

Russia Violated 2010 START Agreement In June 2012

The noisiest military aircraft on earth carries long range cruise missiles.

So reports The Washington Free Beacon, here:

[I]n June ... two Bear H’s ran up against the air defense zone near Alaska as part of large-scale strategic exercises that Moscow said involved simulated attacks on U.S. missile defense bases. The Pentagon operates missile defense bases in Alaska and California.

Those flights triggered the scrambling of U.S. and Canadian interceptor jets as well.

The bomber flights near Alaska violated a provision of the 2010 New START arms treaty that requires advance notification of exercises involving strategic nuclear bombers.

The story at the link details a more recent, highly unusual, deployment of two such bombers to spook Guam.

Drudge Falsely Reports Charges Vs. Jesse Jackson Jr. "Dropped"

Drudge linked to the story at left. A Google search at this hour reveals no such drop of the charges. Both The New York Times and NBC report the filing of charges, not the dropping of charges.

And all of a sudden, Drudge changes the headline to correct himself. Is this race baiting, or what? 

"This Is Not A Market System, Nor Is It In Any Relation To A Capitalist System"

So says Jeffrey Snider of Alhambra Investment Partners, here.

The Best Reason To Oppose Sen. Chuck Hagel For SECDEF

It's not because he's anti-Semitic.

It's not because he flipped on the Iraq War and opposed The Surge.

It's not because of an anti-gay slur.

It's not because he made such a hash of his confirmation hearing.

It's because he'll dutifully dismantle the American military for his boss, thus enabling Democrats to claim that the weakened state of the US fighting machine is the fault of Republicans.

In short, it's because Hagel's a dupe.

Make the president nominate a Democrat to dismantle the military. Republicans shouldn't let Republicans drive drunk, especially when they're puking in the car. 

Charles Krauthammer Loves The Drone War, And So Do You

Here is Charles Krauthammer for National Review:

"[T]he case for Obama’s drone war is clear."

And The New York Times, here, says 71% of you approve of the drone war, too:

"And on several issues, the CBS News poll finds a majority of Americans are in the president’s corner. Most, 59 percent, back a combination of spending cuts and tax increases to reduce the deficit; 53 percent say gun control laws should be made more strict; 53 percent support a path to citizenship for illegal immigrants currently working in the United States; and 71 percent favor carrying out drone strikes against suspected terrorists."

It's getting pretty lonely on the extreme right when we have to look to far left people like Glenn Greenwald for friends calling for an end to this madness. One of these days a Commander in Chief will exercise a fictitious right both to declare you an insurrectionist and to snuff you out in the middle of the night as you sleep, right here in River City because, hey, the whole world's a battlefield, even Grand Rapids, Michigan. The only thing the war on terror has achieved is to reveal that most Americans already surrendered their freedoms long ago, 1861 to be precise.

Noted Lefty Calls Obama's Secrecy Orwellian and Tyrannical

Noted lefty Glenn Greenwald for the UK Guardian here calls Obama's secrecy about a CIA program to kill even Americans with drones Orwellian and tyrannical (he's right):

"[W]hat is missing from the debate is the most basic information about what the CIA does and even their claimed legal justification for doing it. The Obama administration still refuses to publicly disclose the OLC memo that purported to authorize it (they agreed two weeks ago to make it available only to certain members of Congress without staff present, thus still maintaining "secret law"). They conceal all of this - and thus prevent basic democratic accountability - based on the indescribably cynical and inane pretense that they cannot even confirm or deny the existence of the CIA program without seriously jeopardizing national security.

"This is a complete perversion of their secrecy powers. Even among the DC cliques that exist to defend US government behavior, one would be hard-pressed to find anyone willing to defend what is being done here. The Obama administration runs around telling journalists how great and precise and devastating the CIA's assassination program is, then tells courts that no disclosure is permissible because they cannot safely confirm in court that the program even exists.

"Such flagrant abuse of secrecy power is at once Orwellian and tyrannical. It has the effect of blocking even the most minimal transparency on the most consequential question: the government's claimed authority to execute anyone it wants without charges, far from a battlefield, in total secrecy. It yet again demonstrates that excessive government secrecy is an infinitely greater threat than unauthorized disclosures. This is why we need radical transparency projects and aggressive whistle-blowers. And it's why nobody should respect the secrecy claims of the Obama administration or believe the assertions they make about national security. What else do they need to do to prove how untrustworthy those claims are?"

Levitt Capital Management Predicts Brent Oil At $80 By Year End

That's roughly a 30% drop from the current level of $117 for Brent. For West Texas Intermediate Crude such a drop would mean a price of $65. The prediction is based in part on rising contributions to supply from shale oil.

Story here.

If Rep. Justin Amash Were A Real Conservative, He Wouldn't "Run" For Senate

Real conservatives want to repeal the 17th Amendment, not perpetuate it. That Rep. Amash is "'intrigued' by the prospect of going for Levin's seat" in just his second term as a representative betrays his ambition, not his conservatism. If he cared about his constituents he'd serve them, not use them as a stepping stone for his own career. He's done nothing to represent his congressional district, and he'll do nothing to represent the State of Michigan as senator. All he'll represent is his personal conception of the libertarian ideology, and not much else. If you want a mascot for your eccentricity, by all means vote for Justin Amash.

Story here.

How About A National Minimum Wage Of $4.34 As In Obama's American Samoa?

"The first attempt at establishing a national minimum wage came in 1933, when a $0.25 per hour standard was set as part of the National Industrial Recovery Act. However, in the 1935 court case Schechter Poultry Corp. v. United States (295 U.S. 495), the United States Supreme Court declared the act unconstitutional, and the minimum wage was abolished."

So says the Wikipedia article on the minimum wage, here.

Adjusted for inflation according to the Consumer Price Index since 1933, the minimum wage in 2011 should have been just $4.34, not $7.25.

So if we should do anything, we should lower the minimum wage, not raise it to $9.00 as President Obama hypocritically calls for. I say hypocritically because President Obama already thinks the lower level around $4.00 is just fine for the residents of American Samoa, who by law make between just $2.68 and $4.69, which is where even now he aims to keep them:

On September 30, 2010, President Obama signed legislation that delays scheduled wage increases for 2010 and 2011. On July 26, 2012, President Obama signed S. 2009 into law, postponing the minimum wage increase for 2012, 2013, and 2014. Annual wage increases of $0.50 will recommence on September 30, 2015 and continue every three years until all rates have reached the federal minimum.

This is thought to be a favor to Rep. Nancy Pelosi, the former Democrat Speaker of the House, which keeps her business pals there (tuna canners) more profitable than they otherwise would be if they had to comply with the federal minimum wage legislation.

Claiming the mantle of the working poor is so much easier than actually vetoing a bill which keeps workers impoverished indefinitely. He didn't veto it but signed it, and the residents of American Samoa remain second class citizens as a result, under the first black president. There's a new massa in town, but it's the same old shit.

The Second Difference Between Pres. Obama and Dr. Ben Carson

President Obama supported infanticide while an Illinois state senator, voting not once, not twice, not three times, but four times against a law which would protect infants born alive after failed abortions. Dr. Carson operates on 300 children a year to save their lives.

What's The First Difference Between Pres. Obama And Dr. Ben Carson?

The smartest president ever needs one of these.

Sales Taxes Or Gasoline/Diesel Taxes, You Decide.

What you won't realize from this story, "What does an additional penny of gas tax buy in Michigan?" by Amy Lane for mlive.com, is how regressive are the fuel taxes which Michigan motorists pay compared to sales taxes.

From the story we are told:  

For each penny of gas or diesel tax, Michigan gets about $45 million for transportation funding needs that include roads. ...

A penny of Michigan sales tax brings in about $1.1 billion to $1.3 billion.

Well, just how many pennies are we really talking about in each case?

When you buy a gallon of gasoline, Michigan collects 38.7 pennies. But when you buy two fifty cent rolls of toilet paper, Michigan collects just 6 pennies. In the latter case, your tax rate is 6%, but in the former it works out to more like 12%, double the rate. Does that make any sense?

The driver of the $35,000 SUV can probably well afford it without thinking twice, but not the driver of the Ford Focus, whom the regressive fuel tax hurts more because he's probably making a lot less than the SUV driver.

If it's true Michigan collects $45 million per penny of current fuel taxes, that means that times the 38.7 pennies Michigan is already collecting, $1.74 billion is currently available from motor fuel taxes for roads and transportation. The sales tax, on the other hand, is bringing in over $7 billion at the much lower rate, and everyone is paying it. A simple 1.5 cent increase in the sales tax could eliminate the need for the fuel tax altogether. A 2 cent increase could provide an additional $660 million for roads. To get that from a gas tax increase, you would have to hike the gasoline tax per gallon by 15 cents, which is what Gov. Snyder wants to do, plus a little more, but which punishes the little guy even more.

Against those who say road users should bear the burden of road maintenance, I say everyone who buys goods is a road user. Well over 80 percent of everything we purchase moves by road. If you don't drive, you are being subsidized by those who do everytime you buy something which moves by road, which is just about everything.    

Jim Cramer's Stock Picking Secret

TNR Notices Obama's Recovery Benefitted Only Elites

Well, what else would you expect from a national socialist? (Obama silly, not TNR).

Tim Noah, here:

"The biggest gainers in 2011 were the bottom half of the top one percent, i.e., those making between $358,000 and $545,000. They saw their incomes increase, on average, by 1.70 percent (not much to write home about, but you've got to put a weak recovery somewhere)."

Fewer than 1 million Americans earned net compensation for Social Security purposes in that range in 2011.

Investors.com Agrees With Us: GDP Under Obama The Worst Since WWII

So Jeffrey Anderson for Investors.com, here:

"According to the BEA, average annual real GDP growth during Obama's first term was a woeful 0.8%. To put Obama's mind-bogglingly low number in perspective, consider this: It was less than half the tally achieved during Bush's second term. It was barely a quarter of the tally achieved under President Carter. It was the worst tally achieved during any presidential term in the past 60 years."

We told you so already last October, here, in "Obama Racks Up Worst GDP Record In Post-War Period":

"But Obama comes in with a pathetic, ridiculous average report of GDP over 16 quarters of just 0.86%, over twice as bad as Bush."

Pope Resigns In Latin, UK Tabloid Can't Spell In English.

Story here.

The word is "incredulity".

How fitting an English tabloid can't spell it, since the English word is derived directly from the Latin "incredulus" for "not believing".

The cardinals in assembly, many of whom understood no Latin themselves, didn't understand what was happening:

"He announced his resignation in Latin to a meeting of Vatican cardinals this morning, saying he did not have the 'strength of mind and body' to continue leading more than a billion Roman Catholics worldwide. ... Several cardinals did not even understand what Benedict had said during the consistory, said the Reverend Federico Lombardi, the Vatican spokesman.

"Others who did were stunned.

"A cardinal who was at the meeting said: ‘We listened with a sense of incredulity as His Holiness told us of his decision to step down from the church that he so loves.’"

Well, there you go. A Pope "steps down from the church".

Dare we say, "Welcome, sir"?

Thanks for nothing, Jim Cramer

Flashback to Jim Cramer, Monday, 10/06/2008 ("Take Your Money Out Right Now"):

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

-- Jim Cramer, Monday morning, October 6, 2008 (before the market open)

The Friday before that outrageous, irresponsible advice was nationally televised on NBC's Today Show, the Vanguard Total Stock Market Index Fund (VTSMX) had slumped to 26.62 from 30.90 two weeks before, not quite 14%. After his Monday call, however, the fund, a proxy for the whole market, dropped nearly 18% in that one week alone, to 21.85, on its way to its 16.60 low in March 2009. TARP, by the way, was signed into law also on that Friday before Jim opened his BIG mouth the next Monday morning.

Four years and four months since that fateful day in October 2008, VTSMX has bounced back to reach a new all time high of 38.13 as of Friday, February 8, 2013.

Your $36,700 in early October 2008 would be worth $57,300 today, a gain of 56%, if you had ignored Jim's advice.

THANKS FOR NOTHING, JIM. Not only did I need the $36,700, I needed the $20,600 gain.

Of course, Jim technically has until October of this year to be vindicated, but that presupposes a market crash from here of at least 36% to start cutting into that original pile of money I needed. But hey, I needed it, so it's not there, so no worries, right?

And what's Jim saying last week?

“We have a genuine, honest to goodness, bona fide bull market here,” Cramer said Tuesday.   

Look out below.

Gov. Snyder Is Nuts: Gas Taxes In Michigan Are Already 6th Highest In America

Michigan in January 2013 had the SIXTH highest overall gasoline taxes in the nation, and Gov. Snyder is talking about raising them higher still to fix the roads. He is quite clearly nuts.

The excise tax on gasoline is already double the rate you would pay in sales tax on a box of Kleenex or a roll of toilet paper and is one of the most regressive taxes in the state and in the country. The excise tax on gasoline penalizes the working poor the most who depend on their cars to get to their crummy jobs, if they are lucky enough to have one. And Governor Snyder only wants to make it worse.

Here are the top six states for combined federal, state, and local gasoline taxes as of January 2013:

New York:   69.0 cents per gallon

California:   67.1 cents

Hawaii:        65.5 cents

Connecticut: 63.4 cents

Illinois:         57.5 cents

Michigan:     57.1 cents.

The federal portion EVERYWHERE is fixed at 18.4 cents per gallon, so that means Michigan already takes 38.7 cents out of your pocket every time you put a gallon of gas in your car.

Today's average price for gasoline in Michigan is $3.743, meaning the base price at the pump is $3.172, including all profits and costs before the taxes are applied. That means the federal tax of 18.4 cents represents a federal excise tax on gas of 5.8%, and that your Michigan excise tax on gasoline is a whopping 12.2%, more than twice the sales tax rate of 6%. The average sales tax nationwide is just 5.04%.

Michigan is one state which bears the full brunt of the Davis-Bacon Act of 1931, resulting in road workers getting top dollar. Funny how we have some of the worst roads in the country in exchange for that. Maybe the governor should spend more time trying to figure that out before picking the taxpayers pockets again.

If the country needs anything, it is a tax cut on gasoline. The national average tax is 48.8 cents a gallon. Backing out the federal portion, that means the states on average are taking 9.3% on gasoline, a tax rate 85% higher than the average state sales tax rate.

Poverty Guidelines 2013

As shown here.

Poverty Thresholds 2012

As shown here.

In Bond Debacles Of 1994/1999, Net Asset Values Fell About 10%

In the bond debacle of 1993-1994, the Vanguard Total Bond Market Index fund saw a decline in the net asset value of 11.6%, falling from 10.35 to 9.15.

In a similar episode between 1998 and 2000, the net asset value plunged from 10.43 to 9.46, a decline of 9.3%.

The Model For All American Authoritarians Is Pres. Lincoln

So Ralph Peters, here:

"But no president should murder American citizens. Tell it to Abe Lincoln, Hollywood’s celebrity-president of the season, who invaded the South (which had not even threatened acts of terror). The result? Perhaps 750,000 dead Americans. I believe Lincoln was our greatest president after Washington, but he wasn’t just about emancipation."

Funny how emancipation for 4 million black people required the deaths of 750,000 and the repression of liberties of millions ever after.

Well, at least he's honest about The War of Northern Aggression. And Lincoln was a murderer. I'm glad we cleared that up.

One key to surviving in the future will be making sure we don't all move to the same geographic location. Another is refusing to wear the Star of David. You know a third.

Bush Paved The Way For Obama's Insane Imperial Claim He Can Kill You

If you still harbor the slightest loyalty to either George Bush or Barack Obama after reading this withering, eviscerating critique of what's happened to our liberties under these two ne'er-do-wells by noted American lefty Glenn Greenwald for The UK Guardian here, then the future truly is hopeless.

From the concluding paragraph:

"[W]e have the current president asserting the power not merely to imprison or eavesdrop on US citizens without charges or trial, but to order them executed - and to do so in total secrecy, with no checks or oversight. If you believe the president has the power to order US citizens executed far from any battlefield with no charges or trial, then it's truly hard to conceive of any asserted power you would find objectionable."

He must know that when the purge starts under a future American Caesar, his ilk will be among the first to go.

Good Grief, Bulgaria Grew Better Than The US Last Quarter

h/t TradingEconomics.com

Liberals Everywhere (and libertarian elites) Sneer With Doyle McManus: How Dare You Live In A Bigger House?

 

 

 

 

 

Today's liberal sneer comes from Doyle McManus for, you guessed it, The LA Times, here:

But don't take it from me. Take it from the economists at the Mercatus Center, a mostly conservative think tank at Virginia's George Mason University. ... "Recent empirical research suggests that the mortgage interest deduction increases the size of homes purchased but not the overall rate of homeownership," they wrote. ... You can be sure that home builders and Realtors, whose businesses thrive on big houses and high prices, will push back hard against any proposal for change. ... The mortgage interest deduction subsidizes big houses and bigger mortgages, but that's not a good use of tax dollars. Its benefits flow disproportionately to the wealthy and do nothing for the working poor.

In other words, God forbid that modestly incomed people with big families should live in the same comfortable digs as the elites. No, the only thing suitable for them is something small and cramped in keeping with their station in life. The "Realtors" is a nice touch, with a capital "R", the evil purveyors of this excess and offense against the crabbed liberal view of life. We have met the enemy, and he works for Remax. Puritanism still lives, my friends, in the indignant hearts of the America's liberals.

George Mason University, for its part, is a libertarian bastion, not a conservative one, and being socially liberal, libertarians are ever helpful to one side and one side only: liberalism. Make no mistake about it, the societal decision long ago to subsidize home ownership is a by-product of the conservative consensus of yesterday. That consensus recognized that the basic social unit was the family, defined as a husband, wife and children, the incubator for the transmission of the values of our civilization, and that shaping tax policy to support it materially was not only in the best interests of the present, but of the future.

The people who attack that now are either dimwits, or enemies. 

Theoretical Oil Investing Years Since 1980 According To The Gold/Oil Ratio

Theoretically according to the gold/oil ratio, oil investing years might include any year when the gold/oil ratio rose above 15, that is, when the price of an ounce of gold was "more expensive" than 15 barrels of oil, say about 25 barrels as in 1998, indicating that the price of oil was a bargain relative to gold:

1980  16.37

1986  25.10

1987  25.51

1988  29.39 ($14.87/barrel)

1989  20.81

1990  16.54

1991  17.94

1992  17.86

1993  21.49

1994  24.52

1995  22.91

1996  18.95

1997  17.45

1998  24.71 ($11.91/barrel)

1999  16.86

2009  18.17

2010  17.20

2011  18.06

2012  19.76
2013  15.71

You'll notice very few ads on the radio, on the internet, or generally, for oil. You don't have to sell something that's on sale. Gold ads proliferate for a reason: Gold is too expensive, but the mother of idiots is always pregnant, providing another customer.  

Theoretical Gold Investing Years Since 1980 Using Gold/Oil Ratio

Theoretically according to the gold/oil ratio, gold investing years might include any year when the gold/oil ratio dipped below 15, that is, when the price of oil was more expensive, making an ounce of gold "cheaper" than 15 barrels of oil, say 9 barrels instead of 15 as in 2005 and 2008:

1981  13.13

1982  11.91

1983  14.63

1984  13.11

1985  11.97

2000  10.19

2001  11.78 (gold $271.04/ounce, lowest average annual price for gold since 1980 to date)

2002  13.58

2003  13.12

2004  10.95

2005    8.91 (gold $444.74/ounce)

2006  10.35

2007  10.83

2008    9.53.

Not coincidentally, Vanguard launched both its energy fund, VGENX, and its precious metals fund, VGPMX, on May 23, 1984 when it was time to invest in gold and avoid oil. But if you had invested $10,000 in the energy fund that year, by May 31, 2008 you'd have in excess of $352,000. The precious metals fund did much less well, almost reaching $107,000 over the same period.

Charting The Dollar And The Gold/Oil Price Ratio

Create a graph

Is it just me or is there no real correlation going on between any of these?

A Rationale For Ending The Tax On Corporate Profits

John Steele Gordon provides a helpful survey of the history of American taxation, here, including the chronically avoided topic of how the tax on corporate profits (ruled constitutional as an excise tax "on the privilege of doing business as a corporation") was meant to be a temporary tax on the rich:

In the first decade of the 20th century, the stock of corporations was owned almost entirely by the rich. So taxing corporate profits was, in a very real sense, taxing the rich. Congress passed the legislation and in 1911 the Supreme Court ruled unanimously that the tax was constitutional. ...

Unfortunately, the [subsequent] personal income tax did not replace the corporate income tax that had originally been intended only as a stopgap. Nor did Congress integrate the two taxes so that income, whether corporate or personal, was only taxed once. The two taxes simply ignore each other as if corporations are owned by Martians, not people.

At the tax levels of the early 20th century, the harm was inconsequential. But when tax levels rose dramatically to fund the great wars that soon followed the personal income tax, the pressure to legally avoid taxes rose equally. As a result, the two separate, uncoordinated tax systems became a uniquely powerful engine of complexity as accountants and lawyers have played the two systems off each other and Congress has tried, unsuccessfully, to close or regulate the resulting “loopholes.” ...

The two income taxes have been the main reason that the tax code has exploded to a 4-million-word incomprehensible mess.

Global Warming Skepticism Bothers CNBC More Than Calling ObamaCare Fascist?

For quite some time now CNBC has chosen to showcase Whole Foods' co-founder John Mackey for his global warming opinions rather than for his characterization of ObamaCare as fascist. So many targets, so little room in a headline.

From the story:

As for regulation to reduce global warming, he said, “We can probably eliminate poverty on the planet earth in the next 50 years if we will just continue to follow the tenets of free enterprise capitalism to the greatest extent possible. So I just don't want to see that change.”

Mackey’s taken some heat for some of his other publicly stated opinions. In a recent interview on NPR, he characterized President Obama’s health care legislation, ‘Obamacare’ as “more like fascism.” He backpedaled in subsequent interviews.

This Is A Depression, Says Dem. Billionaire Mort Zuckerman

"We believe we live in more normal times—and we do not. Millions of people today are experiencing exactly the same struggle as the millions did in the Great Depression. They can't find work. They depend on government and philanthropy. They live on hope denied. ...

"The reality is, we are experiencing a modern-day Depression. It is harder to find work than it has been in any previous economic recovery period. ...

"The Pew Research Center reports that for the first time in the post-World War II era, middle-class families finished the decade significantly poorer in terms of household net worth—which is down almost 40 percent since 2007—and with lower incomes than a decade earlier. This has hit the middle class harder than any other group. According to Pew, one third of Americans now identify themselves as lower class or lower middle class, a deterioration since 2008 when one quarter identified themselves that way. ...

"We are living through a breakdown of the great American jobs machine. This is not a recovery. Annual GDP growth in 2010 and 2011 averaged a mere 2.4 percent; in 2012, GDP growth slowed to 1.8 percent. In other words, cumulative growth for the last 11 quarters was just 6.8 percent, less than half the 15.2 percent average growth in GDP after previous recessions over a similar period of time. This is the slowest growth rate following all 11 post-World War II recessions. ...

"No recession since the end of World War II has been as deep or as long as this one, severely testing the optimism, confidence, and animal spirits that typify the temper of America. The question of the hour is how can we find a way to avoid becoming a low-wage, part-time country."

Read the full story, "How We Can End Our Modern-Day Depression," from Mort Zuckerman, here. 

Wily Democrats Ramped Up Spending Baseline Almost 18% In 2009

The Tax Policy Center here provides a useful history in pdf format of federal outlays and revenues going back to 1940.

After taking complete control of the federal purse strings in January 2009 with the election of President Obama, the Democrat-controlled House and Senate proceeded to ramp up federal spending almost 18% in 2009 compared to 2008, from $2.98 trillion to $3.52 trillion. You can see from the chart that expenditures have continued at that new, higher level ever since, despite the fact that revenues have not recovered. Is this the height of irresponsibility, or what? It certainly is one of the more baneful consequences of one party Democrat rule. Now you understand why Democrats won't pass budgets. Continuing this excess using continuing spending resolutions keeps their names out of the papers.

You'll notice on the revenue side for 2008 and 2009 that the government's income from taxes of all sorts declined almost 17% while these expenditures were being dramatically increased at nearly the same rate, opening up a gigantic fissure in the government fiscal landscape. Revenues declined by $419 billion between 2008 and 2009 while expenditures increased $535 billion. The revenues declined due to the bursting of the housing bubble, the ensuing financial panic and the massive unemployment which followed. Nearly 11.31 million Americans lost their full time jobs between November 1, 2007 and December 1, 2009. People who don't work don't pay taxes. With federal outlays already running over $450 billion in excess of revenues, you can understand why the deficit in 2009 swelled to over $1.4 trillion, and continues elevated at that level every year since. Deficits for fiscal years 2009-2012 will top well over $5 trillion in the end. At the Bush-level of deficit spending, the number would have been closer to $3.5 trillion.

In exchange for that astounding liability we have fat bankers not prosecuted for their crimes; bigger banks more dangerous than ever; fat government salaries at every level compared to the private sector; crony capitalism in banking, autos and healthcare; 5 million homes repossessed in seven years; over 12 million officially unemployed; over 2 million per year leaving the labor force for Social Security disability, reduced lifestyles, poverty, or retirement; nearly 48 million on food stamps; GDP struggling to average 1% per year under Obama, the worst performance in 65 years; interest rates near zero destroying returns on retirement capital; an exploding wave of reduced work in the form of impermanent contract and part-time labor; and on and on.

And what's hot on the web right now?

"Where's my refund?"