Between Sequester Cuts And Payroll Tax Hike, Expect 41% Hit To Nominal GDP

Between the sequester spending cuts and the payroll tax rate going back up by 2 percentage points, I'm expecting a decline in nominal GDP of as much as 41%.

The sequester cuts come to $85 billion.

The payroll tax hike will remove conservatively $96 billion from American paychecks. Based on payrolls in 2011 of $6,239 billion, about $1,459 billion was exempt from Social Security taxation. Taking 2% of the remaining $4,780 billion yields a payroll tax hike of $95.6 billion using 2011 payrolls, the last available from SocialSecurity.gov.

Nominal GDP increased between October 2008 and October 2012 by $1,769.5 billion. That's been an average of $442 billion a year, nominal, over the last four years.

Subtracting the sequester cuts and the payroll tax increase (conservatively $181 billion) from that means cutting nominal GDP by about 41%.

Radiation Conditions Near The Fukushima Reactors Almost 2 Years Since The Accident

Tepco (Tokyo Electric Power Company) here provides a useful summary of daily radiation conditions at the Fukushima Daiichi Nuclear Power Plant complex.

A series of 8 monitoring posts recently measured an average air radiation level of just over 5 microsieverts per hour along the perimeter from north to west to the south end of the facility.

On March 4, 2013, the level in the air at the west gate was measured at 6 microsieverts per hour.

At the main gate, the level increased to 20 microsieverts per hour.

On the south side of the main building for the power station, the level leaped to 200 microsieverts per hour, varying little throughout the day, between 191-201 microsieverts per hour. Working at that last location outside for 8 hours a day for just under 4 days would give an American a typical ANNUAL dose of radiation.

Radiation In Namie Town, Japan, Almost 2 Years After Fukushima Meltdowns

The pdf of the latest readings of radiation in the areas surrounding the Fukushima Daiichi Nuclear Power Plant (marked with an X on the map inset) may be viewed here.

Namie Town remains the hardest hit with one startling sampling point as high as 21.1 microsieverts/hour, which totals to about 185 millisieverts/year. Normal there is 1 millisievert/year.

Americans typically get about 6 millisieverts/year from all sources environmental, travel- and medical-related. In a long lifetime of 80 years one wouldn't accumulate 500 millisieverts, but in Namie you could have theoretically already come close to that if you had stayed there for the two years since the accident because the levels were much higher in the immediate aftermath. 

The Bush/Obama Depression In Electricity Consumption

Between 1990 and 2000, US electricity consumption per capita grew at a rate of almost 17%.

But since then, between 2000 and 2010, electricity consumption actually FELL at a rate of 2% despite growth in population at a rate of nearly 10%.

By 2010, consumption was still 2.3% below the 2005 peak achieved under George W. Bush.

The trend is probably due mostly to the transfer of manufacturing capacity to China, and to some extent to energy efficiency efforts in the US.

Meanwhile in China, the decade of the 1990s witnessed growth in electricity consumption per capita of 94%, and in the decade to 2010 of 196%. Overall, since 1990 Chinese growth in electricity consumption has outstripped the US growth rate by 33 times.

The House Should Pass A CR Of $2.983 Trillion And Drive The Blade Home

Now that Republicans have Democrats off balance with a small spending cut, the up-coming vote on a continuing resolution to fund the government for the remainder of the fiscal year presents an opportunity to drive the blade home.

I propose going back to the status quo ante in 2008 when outlays were at $2.983 trillion, and freezing spending at that level until revenues have in fact caught up. In 2013 revenues are estimated to be just under that level, at $2.902 trillion.

Since it was Democrats who abandoned the statutory budget process after 2009 and funded the government through continuing resolutions at the new much higher level laid down that year, nearly 18% higher in 2009 than in 2008, two can play at that game.

If Democrats in the Senate, and Obama, don't like the new diet of $249 billion a month, they can say no and be responsible for shutting down the government.

Just don't telegraph the plan. Keep Democrats off balance as before, demanding Senate action on a budget. We all know they won't pass one, and when they don't, just pass a continuing resolution to fund the government at the last second and adjourn. The procedure will probably have to be done monthly, and probably indefinitely.

There will be wailing, weeping and gnashing of teeth.

Table of federal receipts and outlays here. 

Barack Obama: Chester The Sequester Taxpayer Molester

According to The Des Moines Register here, Pres. Obama told two of its editors just two weeks before the 2012 election that he was COUNTING ON the sequestration cuts which he now says are going to hurt middle class Americans, and that he was COUNTING ON the expiration of the Bush tax rates, in tandem "to implode the partisan gridlock" referred to by his interlocutor at The Register (full transcript at the link), to which the following was part of the reply by the president:

"In the short term, the good news is that there’s going to be a forcing mechanism to deal with what is the central ideological argument in Washington right now, and that is: How much government do we have and how do we pay for it?

"So when you combine the Bush tax cuts expiring, the sequester in place, the commitment of both myself and my opponent -- at least Governor Romney claims that he wants to reduce the deficit -- but we’re going to be in a position where I believe in the first six months we are going to solve that big piece of business."

In other words, Obama said he was counting on the sequestration gambit and the expiration of the Bush tax rates gambit to accomplish his "balanced approach", which is tax rate increases combined with spending cuts "to reduce the deficit". Notice how he likes "force" especially when he can distance himself from it, and how that force can impose an ideological conclusion for which he otherwise is reticent to take responsibility. The man isn't really up to being the tyrant.

President Obama all along has wanted this sequestration event to occur, and any tax increase he could get along with it. The forced spending cut idea was his idea from the beginning according to Bob Woodward, but Obama could only welcome the forced expiration of the Bush tax rates idea. He's just sorry he was not the author of it. As it turned out, he got some tax increases on the rich in the year end tax deal ($60 billion annually), but more importantly he got the reset of the Social Security payroll tax ON EVERYBODY without so much as a shot being fired by anyone in Washington. The latter comes to about $100 billion annually. Add in a few spending cuts now on the backs of all these people he's been parading as victims, and Obama is as happy as a clam.

Yes, some of the American people are being actually molested by the president's policies, but they just don't know who the perp is because the creep can make himself invisible. Unfortunately for them, because they are mostly denizens of government, private sector Americans who have been living in greatly reduced circumstances for four years now because of Obama's on-going depression just aren't sympathetic to their plight.

The trouble is, neither is Obama.

I Know! Let's Get The Sequestration Cuts From The Banks!

In an editorial on February 20th, here (which has caused quite the hubbub), Bloomberg.com maintained that most big banks are not profitable because their preferred rate to borrow from the government amounts to a gift roughly equal to their stated profits:

The top five banks -- JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. - - account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits . . .. In other words, the banks occupying the commanding heights of the U.S. financial industry -- with almost $9 trillion in assets, more than half the size of the U.S. economy -- would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.

No one seems to be inquiring too deeply, however, why the banks are not profitable without continuing massive taxpayer support ($83 billion annually -- remind you of anything beginning with the letter "s" and starting today?).

Gee, could it be because of all those bad mortgages on and off the books which are not performing and cutting into their capital? Ya think?

And maybe, just maybe, the Fed's policies are trying to repair this one thing only, while telling us it's to help with employment, housing, the stock market even, blah, blah, blah, pissing down our backs and tellin' us it's rainin'?

If this were really a free market economy with a private banking industry, we'd have had the equivalent of $85 billion in sequestration spending cuts for years already by not subsidizing these losers.

And another thing we wouldn't have is these big banks. They would have failed already.

Warren Buffett, Amoral Crony Capitalist, Bought An Indulgence From The Left

So says Daniel Mitchell of The Cato Institute, here:

"If you’re an amoral person with political connections, it’s possible to make a lot of money.

"Warren Buffett lined his pockets by making a government-subsidized investment in Goldman Sachs during the financial crisis.

"The rest of us suffered and he got richer, but the left seems to be okay with that perverse form of redistribution because he supports class-warfare tax hikes. Sort of like buying an indulgence in the Middle Ages."

I really like that analogy with the church because it speaks to the failure of all idealist conceptions to deliver on what they promise. This is as true of socialism as it is of capitalism, of fascism as it is of Christianity. All offer a promised land which never seems to arrive, but you have to ask yourself who thought this stuff up.

Like beer to Homer Simpson, it is we who are the cause of and the solution to all of life's problems.

The Founders Got Many Things Wrong, Especially The Role Of Their Own Rationalism

Here:

"American politicians and those who serve them think that they’re ducks, and although they aren’t, they are likely to continue to quack ideologically. [I]t is doubtful that a non-ideological politics, which emphasizes both the limitations and the necessity of political activity—the need for real consensus, the need to address actual not 'potential' problems, etc.—could succeed in the United States."

Not to mention the rise of political factionalism, the declining influence of religion and morality, and the power of parchment.

Even In September 2009 Obama Showed He Didn't Understand The Size Of The Country

From his speech to Congress, here:

"First, if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have."

Well, what if you are not among those "hundreds of millions", eh? Then you are out of luck in his mind, evidently. Who could he possibly be referring to?

It is customary to speak of tens of millions when speaking of up to 100 million.

It is customary to speak of a couple hundred million when speaking of up to 200 million.

It is customary to speak of a few hundred million when speaking of up to 300 million.

But "hundreds of millions" refers to far more than 300 million, especially if you are not lucky enough to be among them. By analogy with 100 million, you could be speaking of up to 1,000 million. That's 1 billion for those of you in Rio Linda.

Anyway, all those extra people in the "hundreds of millions" category must be those people you didn't know about from the 57 states Obama says he visited during the campaign "with one left to go", not counting Alaska and Hawaii! Densely populated states, those in excess of the 50 states, they must have been, too, which begs the question why he hadn't visited them yet!

The US population at the time of the speech was about 307 million. So by September of 2009, seven months after having been sworn in, Obama had had plenty of time to figure out the size of the country, but he hadn't.

The guy's a moron, and you know it. He wasn't even "learning on the job". Toking on the job is more like it.

Rep. Maxine Waters Is A Complete Moron, Just Like Rep. Hank Johnson

Rep. Maxine Waters obviously has no idea about the size and scope of the American working population. She states here that 170 million jobs will be lost if tomorrow's spending cuts go through.

If you simply check here, you'll discover that there are fewer than 152 million Americans working at all jobs as far as the Social Security Administration is concerned. Pretty shocking for an elected US representative not to know that, and pretty shocking that she thinks we'll all be without jobs in an instant because of a puny spending cut. By her reckoning, the WHOLE DAMN COUNTRY will become unemployed tomorrow because we cut 2% from federal spending. Even more shocking is it that this gets reported with a straight face. But then you remember that we have a congressman from Atlanta who thinks Guam might tip over if we station too many troops on one side of it, the estimable Rep. Johnson.

Second Estimate Of Q4 2012 GDP Revised Up To 0.1%

The BEA reports here, with the big takeaway that the average upward revision of 0.5 utterly failed to materialize this time, meaning the economy is really in the toilet already in the fourth quarter, pre-Social Security tax rate resumption, pre-tax increase on the rich, pre-ObamaCare taxes starting to kick in, etc., etc., the economy having hit a huge brick wall after Q3 GDP of a more respectable 3.1%:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 0.1 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, real GDP declined 0.1 percent. The upward revision to the percent change in real GDP is smaller than the average revision from the advance to second estimate of 0.5 percentage point. While today’s release has revised the direction of change in real GDP, the general picture of the economy for the fourth quarter remains largely the same as what was presented last month . . ..

If Only Rush Limbaugh Were This Right Every Day

Yesterday, here:

"But the one thing that the Republicans are reluctant to try is draw the contrast with what liberalism is, what Obamaism is, what his intentions are.  They do not effectively make the case for the alternative. ... There's a big move on now to just totally eliminate any concern over the social issues whatsoever, because we gotta save the economy.  The economy is where your kids' future is, the grandkids' future.  And that's exactly right.  But all this stuff is interlinked. 

"Social issues and economic issues are linked by something, and it's called morality.  And it's morality that's missing here, and while Obama runs around and claims the country was founded immorally and unjustly, the truth of the matter is that they're doing everything they can to eliminate morality.  There are no guardrails. There are no limits.  And there will be no judgments.  Nobody has the right to say something is wrong.  Nobody has the right anymore to say something is right.  Nobody has the right to say something shouldn't happen because it's destructive and detrimental.  You don't have that right.  Who you love, who you want to live with, how you want to live, where you want to get your money from the government for a job, it's nobody else's business. 

"And so morality is being eliminated, and this country was founded on the basis of it.  This country was founded on the premise that if morality is ever eliminated, this country can't exist as it was founded."

“Human passions unbridled by morality and religion ... would break the strongest cords of our Constitution as a whale goes through a net.” -- President John Adams

AP Story On Auto Delinquencies Gets Peak Wrong, TransUnion Doesn't Seem To Care

The AP story here, "Late Auto Payment Rose in the Fourth Quarter: TransUnion", was picked up and dutifully reproduced at at least 900 websites containing the error "The national late-payment rate on auto loans peaked in the first three months of 2000 at 2.39 percent, the firm said":

The rate of auto loans with payments late by 60 days or more was 0.41 percent in the last three months of 2012. That's up from 0.38 percent in the previous quarter, but down from 0.46 percent a year earlier, TransUnion said.

Turek noted that the company always sees a slight uptick in the auto loan delinquency rate during the fourth quarter. The financial pressures of holiday shopping can lead some borrowers to delay or skip a loan payment — a dynamic that also leads to higher late-payment rates for credit cards and home loans.

Even so, the fourth quarter's late-payment rate remained near the lowest rate on TransUnion's records going back to 1999. That record-low rate, 0.33 percent, was recorded in the second quarter of last year.

The national late-payment rate on auto loans peaked in the first three months of 2000 at 2.39 percent, the firm said.

If the firm said that, I'd be very surprised.

Turek in 2010 previously stated, here, that the peak was in late 2008, at 0.86%, which is 160% higher than the all time low on TransUnion's scale:

"The good news is that TransUnion expects national auto delinquency rates to continue to be well below the peak of 0.86 percent -- a rate experienced during the heart of the recession in the fourth quarter of 2008."

TransUnion's own graphic shows that the scale of the national rate is measured in tenths and hundreths of a percent, while the scale measuring the worst delinquencies in the worst of times in the worst states doesn't even reach as high as 1.80%:

So something is really amiss with the AP story.

Separately, a story here from March 2011 indicates that auto loan delinquencies, measured using a different scale but with a similar difference between highs and lows in the neighborhood of 160%, were never higher than in 2008-2009, which rules out the year 2000 for worst year in modern times for auto loan delinquencies:

From late 2008 through 2009, dealers and consumers found themselves in the midst of the worst credit crisis in modern US history. Lending activity froze, thus limiting dealers’ ability to finance their inventories and provide consumers access to auto loans. With unemployment rising and home foreclosures breaking records during this time, auto loan delinquencies peaked as well. Normally, seriously delinquent (90-plus days past due) auto loans represent between 4% and 7% of outstanding auto loans. In the fourth quarter of 2008, however, such loans totaled $8.5 billion and 13.9% of outstanding auto loans. In the first quarter of 2009 that share climbed to a historic high of 15.9%. Fortunately for the auto-sales industry, delinquencies, in value and percentage terms, rapidly declined during the second half of 2010.

Messages left with two different individuals in TransUnion's media relations department in Chicago yesterday seeking confirmation of the AP story remain unanswered at this hour. 

Republicans Come Out To Publicly Oppose CA Prop 8

From The New York Times, here, the following Republicans have added their names to a brief opposing the 7 million people of California who passed the 2008 ballot proposition 8 defining marriage as between a man and a woman:

Theodore B. Olson, the former solicitor general under Mr. Bush;

Meg Whitman, who supported Proposition 8 when she ran for California governor;

Representatives Ileana Ros-Lehtinen of Florida and Richard Hanna of New York;

Stephen J. Hadley, a Bush national security adviser;

Carlos Gutierrez, a commerce secretary to Mr. Bush;

James B. Comey, a top Bush Justice Department official;

David A. Stockman, President Ronald Reagan’s first budget director;

Deborah Pryce, a former member of the House Republican leadership from Ohio who is retired from Congress;

Jon M. Huntsman Jr., the former Utah governor, who favored civil unions but opposed same-sex marriage during his 2012 presidential bid;

Christine Todd Whitman, former governor of New Jersey;

William Weld and Jane Swift, both former governors of Massachusetts;

Ken Mehlman, the former chairman of the Republican National Committee, who came out as gay several years ago;

Steve Schmidt, senior adviser to the 2008 Republican presidential nominee, Senator John McCain of Arizona;

Seth P. Waxman, a former solicitor general in the administration of President Bill Clinton;

Reginald Brown, who served in the Bush White House Counsel’s Office.

I didn't leave the Republican Party. The Republican Party left me.

Four Republican Chump Senators Vote To Confirm Hagel

Story here:

The vote was 58-41, with four Republicans joining the Democrats in backing the contentious choice. Hagel's only GOP support came from former colleagues

Thad Cochran of Mississippi,

Dick Shelby of Alabama ...

Mike Johanns of Nebraska ... 

and Rand Paul of Kentucky. ...

[Other] Republicans ... challenged Hagel about a May 2012 study that he co-authored for the advocacy group Global Zero, which called for an 80 percent reduction of U.S. nuclear weapons and the eventual elimination of all the world's nuclear arms.

These men just voted to let a Republican take the blame for dismantling the American military.

They are not on our side.

Secretary Of State John Kerry Causes 11 Letter Pile-Up Between Kyrgyzstan And Kazakhstan, Causing Kyrzakhstan

The former senator from Massachusetts was not seriously injured in the accident, physically.

Story here.

h/t Chris

Retirement Investments Hit New High In Q3 2012: $19.4 Trillion

The Investment Company Institute has all the data, here.

The old high, before the financial crisis, was reached in 2007 at the level of $17.8 trillion. In 2008 the level of total retirement investments in all categories slipped to a total of $14.1 trillion, a decline of almost 21% as the stock market tanked.

By the end of 2010, however, all the losses were recouped as the level bested 2007 at $17.9 trillion. In 2011 the level climbed again, to $18.0 trillion.

The latest reading in Q3 2012 puts all retirement assets at $19.4 trillion, 9% higher than in 2007, not quite five years on.

The biggest pile of dough, $5.3 trillion, remains in Individual Retirement Accounts, followed by Defined Contribution Plans like 401k accounts, with $5.0 trillion.

Roughly 50% of the American population is not participating in this recovery of retirement accounts because they have nothing in stocks, which under Obama have posted their 4th best performance since World War Two. More precisely, the percentage is probably quite a bit higher than that since just 37% of the stock market is owned by "households", while banks own about 32% of the stock market, the two biggest players if "households" really meant retail investors like mom and pops. It doesn't. But that's another story.

h/t Bloomberg, RushLimbaugh

125 Million Americans Are "Close To The Edge Of Ruin"

Story here:

"Nearly a quarter, 24 percent, admit to having more debt on plastic than money in the bank, while 16 percent say they have neither credit card debt nor savings. That puts 40 percent of the population close to the edge of ruin while everyone else seems to be sitting pretty."

(The Three Stooges, "An Ache In Every Stake", 1941, here)

Obama Favors A Jim Crow Law

So says Dean Kalahar, here:

The precursor to the modern minimum wage law began in 1931 with the Davis Bacon Act; which allowed whites to discriminate against blacks in the workplace because it protected the wages of unionized white construction workers from competition with black workers. Stunningly, this remnant of Jim Crow is still on the books. The first federal minimum-wage law, the Fair Labor Standards Act, passed in 1938 under FDR.

Fast forward to today where President Obama asked for the minimum wage to be increased to $9.00 hour in his State of the Union Address. Let's get this straight; the first African American President of the United States advocates a Jim Crow law that increases unemployment to the very low skilled young minorities he claims he wants to help? When did a wage of zero become more of a "fair share" than a job and opportunity? That's just a shameful irony, Machiavellian politics, or shear [sic] ignorance.

Or maybe that's Obama's white half talking.

New York's Puritan Mayor Bans 2-Liter Pop With Pizza Deliveries

Story here.

It used to be conservatism and reaction which in 1950 were said not  to exist as real ideas but only as mere actions or irritable mental gestures. Now it's liberalism and progressivism occupying that role, but without actually resembling ideas. They represent emotions instead, usually of revulsion, especially for people who are fat, or of shame, especially for holding otherwise intelligent opinions critical of other people's culture, way of life and religion.

Rep. Justin Amash Is Poison For The GOP

Once again Rep. Justin Amash illustrates that he's not really a Republican. It's really hard to say what he is, actually. Who knows, maybe he's a Martian. His loyalties obviously lie elsewhere than with the Republican Party. Whatever he is, it's not a team player.

Consider that if it were really true, as he claims below, that the Republicans weren't really serious about any alternatives to the sequester, why would that be anything but good except for the political lying part, seeing that the sequester will force some real cuts to spending? I gather he's against those cuts because they aren't really real cuts because baseline budgeting increases spending automatically and we're just reducing the increase not the net spending year over year, or . . . they just aren't big enough cuts, kind of like voting to defund Planned Parenthood wasn't good enough because the bill didn't defund everyone like Planned Parenthood, so just vote to continue funding the nation's largest abortion provider. Interesting Republicanism.

Here he was at mlive: 

"They've been throwing this at the Democrats, saying we [Republicans] put two proposals on the table to replace the sequester," Amash told the gathering of 75-plus constituents at Gaines Township Hall. "No, we haven't."

The effect of this was nothing more than a poke in the eye to all Republicans, whom he'll never persuade if he keeps acting like that in public. God knows he'll never persuade Democrats in Congress. At some point you just have to shrug your shoulders at Rep. Justin Amash. He won't play nice and he can't persuade anybody, so . . .  what? We elected him so he could go to Washington and just play in the big Congressional sandbox?

Surely there's a good ole country boy up there somewhere on Capitol Hill who can talk some sense into the child. But somehow I think it's going to take more than talk to adjust his attitude.

The Banks Own 32% Of The Stock Market, Households 37%

This Bank of America chart from July 2012 seen here shows bank ownership of the equity markets at 32% in Q1 2012, a stunning number rivalling the household sector's share of 37%. In 1950 households (an elastic category including much more than simply retail investors) held roughly 90% of the market in their hands (admittedly far fewer retail investors than today, but that's another story).

So you've got to ask yourself why ultra cheap loans to banks by the Federal Reserve have gone into markets in such spectacular fashion? To help them recapitalize after the housing implosion, that's why. Banks can't make money the old fashioned way anymore because the owners' equity of household real estate of consumers is down to about 45% (it had sunk as low as 39% in 2010 and 2011), a decline of over 45% since 1950. Think cash-out-refis at artificially low interest rates and HELOCS and the housing market collapse. The banks are left holding the bag, or the Feds are, on 5 million repossessed properties in the last seven years, leaving a huge capital hole in their off-balance-sheet balance sheets. Having plundered John Q. Public by selling him the rope he hung himself with (HELOC reform 1986 Tax Reform, Taxpayer Relief Act of 1997 2-Year Rule on Sale of Principal Residence, Repeal of Glass-Steagall 1999), the government-banking cartel has had to look elsewhere for profits. They're finding them.

Care to buy stocks? 

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.