To Fix The Mortgage Market, Pay Wholesalers And Brokers Over Time, Not Up Front

So suggests Jeffrey Dorfman, here:

"If we want to avoid a repeat of the recent mortgage market meltdown, we would be wise to reform the incentive structure in the mortgage industry. No government regulation is needed to accomplish this. Wholesalers can change the way they pay brokers and investors can require wholesalers to keep some skin in the game by taking at least some of their profits over time along with the investors. Spreading payments over even as little as three to five years would significantly change the incentives.

"If wholesalers and brokers got paid only if the mortgage borrowers made their payments, I suspect that we would have fewer mortgages with repayment problems."

Real 10-Year Cost Of Being In Cash

With an average annual return of 1.77% in the last 10 years, July 2003 to July 2013, the cost of being in cash in VMMXX comes down to the inflation-adjusted return because inflation has averaged in excess of the nominal returns to cash: 2.43% annually over the period. That results in an average annual real return of -0.644% in cash. Ouch. By contrast, the real rate of return of the S&P500 has been +4.63% annually June 2003-June 2013, dividends fully reinvested. Going back 38 years to the inception date of VMMXX, 6-4-1975, the S&P500 has returned a real rate of 6.83% per annum. Cash has returned a nominal 5.58%, but with inflation averaging 3.95%, the real rate of return in cash has been just 1.568% per annum since 1975.

Your Real Return In Stocks Since 2000? Just 0.32% Per Year!

Sad, but true.

Check for yourself, here.

The Bernank Bombs The Buck

US Dollar Currency Index watchers have been reaching for the gin in recent weeks:

This was supposed to be a summer when the U.S. dollar would stand tall, pumped up by higher interest rates and the prospect of an improving economy.

But instead it's been sagging, with the dollar index losing 3.6 percent to 81.02 since July 10. On that day, Fed Chairman Ben Bernanke clarified the Fed's intentions about what it means to 'taper' its $85 billion a month in bond purchases. He emphasized that even with paring back of bond buying, the Fed would take its time pulling back from easing, and it has no plans to raise short term rates any time soon.

Read the rest from Patti Domm at CNBC here.

Obama Can See The Gulf Of Mexico From Three Atlantic Ocean Ports

The world's smartest president strikes again:

"If we don't deepen our ports all along the Gulf — places like Charleston, S.C., or Savannah, Ga., or Jacksonville, Fla. — if we don't do that, these ships are going to go someplace else and we'll lose jobs," Obama said.

Video and story here (AP dishonestly added the "(and in)" to the quotation above before the word "places").

Affirmative action in editing.

The link is now dead. Mediaite still has it all, here.

Mark Levin Only Just Discovers TSA VIPR Program Tonight

Mark Levin's recent discovery of TSA VIPR operations reinforces his interpretation of the developing police state, but it's just old news to us.

Welcome anyway, Mark.

40 Million In Individual And Small Group Health Plans Will Be Hit Hardest By ObamaCare

McClatchy reported here in June:

Those two coverage areas – the individual and small group markets – face the biggest rule and cost changes next year, when the main provisions of the Affordable Care Act finally kick in. ... About 24.5 million people have small-group coverage through companies with 50 or fewer employees, according to federal estimates. Just 15.4 million people purchase individual coverage, according to the nonpartisan Kaiser Family Foundation, a nonprofit health care research center.

Learn more at ObamaCareWatch.org.

Conservatives Have Completely Dismissed Sen. Marco Rubio And Rep. Paul Ryan

Poll at lauraingraham.com.

Long Term Care Insurance Getting Harder To Get As Firms Exit The Business

So reported CNBC here last week:

Three major plan providers, Metlife, Prudential and Unum, have stopped selling individual policies within the last three years.

"Companies have had a very difficult time hitting profit objectives," said Marc Cohen, chief research and development officer at insurer LifePlans. "Many of the assumptions underlying the pricing of these policies didn't hold true."

Among the assumptions firms made when they began selling plans in the 1990s was that policyholders would let their coverage lapse at about the same rate they do life insurance products. The lapse rate for long-term care has proven to be much lower. Policyholders who buy coverage during their senior years tend to hold onto their coverage and collect on their claims.

"The largest claim that's still open is from a woman," said Slome. "She's been on claim for 15 years. Her insurance policy has paid out one point $8 million to date and it continues to pay. She only paid $881 for three years before her claim began."

The industry has responded to that kind of bad underwriting by tightening qualifications for the coverage, setting caps on benefits and raising prices.

With 76 million baby boomers reaching retirement age over the next decade, the need for long-term care services is expected to surge.

Economic Distress: Average Age Of American Car Climbs To 11.4 Years From 9.9 In 2006

Story here.

Total Public Debt Outstanding Stuck At $16.738 Trillion For Over Two Months

The normal explanation for this would be that redemptions of Treasury securities are running at precise equilibrium with issues, which might imply there has been a big shift away from note and bond purchases by the public since the end of May when Ben Bernanke first floated the possibility of a tapering of Fed purchases in the secondary market. Bond outflows in June of nearly $62 billion dramatically reversed a trend (albeit declining) of purchases in 2013 through May.

Theoretically total public debt outstanding occasionally goes down in the rare cases when redemptions exceed issuances, but the maintenance of a consistent level equilibrium is indicative of a deliberate policy, that is, a policy not to exceed the debt limit of $16.7 trillion. This is effected by recourse to extraordinary measures on the part of the US Treasury Dept.

Tax revenues are also running higher in 2013, helping remove pressure from the situation as is the sequester which is curbing outlays. Revenue has also increased from the GSEs, in excess of $59 billion according to Reuters, here. The Associated Press has reported here for July 18th that the current fiscal year deficit is projected to come in over $300 billion less than last year when all is said and done.

Now you know why Congress felt it could take the traditional August recess without doing anything about the debt ceiling. They'll just let Jack Lew sweat it out.

The Kookiest Jobs Story In Months: Republican House Ways And Means Tallies Just 270k Full-Time Since 1-09

Story here.

What's next, 911 really was an inside job? Paul McCartney did die?

To believe this number you have to believe all the numbers reported all the time by the Bureau of Labor Statistics have been wrong for 4.5 years and that everyone who works there is content to keep a secret, and can, but I'll bet you those are precisely the numbers House Ways and Means have been "crunching" to arrive at the "truth". 

I realize John Crudele at The New York Post is fond of that skeptical pose now that a former BLS official has been talking to him about his skepticism about the numbers, but really, have we all gone off the deep end in order to drive home a political point about what ObamaCare is going to do to the nature of work in America when it's not really yet self-evident? For example, average hourly earnings should be plummeting if Ways and Means is right, but they are not. Wages are up nearly 1.9% in the last year. Nothing to write home about, but completely dispositive of the thesis.

As usual the devil is in the details, which in this case means the word "net", as in net total. Well, net from what benchmark? The all-time high of full-time at 123.219 million under George Bush? Full-time isn't anywhere near recovering to that level, so it's impossible that for the Republicans net means net above the all-time high by the paltry sum of 270,000, as in 123.489 million full-time jobs. Would that the Republicans were right!

Alas, they are not. Usually full-time is presently 117.688 million, 3.873 million above the January 2009 level when Obama took office, not 0.270 million above the January 2009 level. That's the nominal number. Doug Short at Advisor Perspectives could run the population-adjusted figures for us to show us just how far behind we really are in recovering to trendline at the Bush peak. Population has continued to grow causing employment-population ratios to plummet and labor participation rates to tank under truly dismal GDP conditions, so there is value in looking at it from that perspective. It's true. Obama is a total failure at job creation. When he turns his gaze to them, they seem to vaporize. Rush Limbaugh thinks this is on purpose.

Meanwhile the numbers continue to improve because this is a giant capitalist ship with tremendous inertia whose communist captain can't turn her on a dime for another go at the iceberg. He wishes we were China, but we aren't.

God bless the Republican House, but get off the number-of-angels-on-the-head-of-a-pin stuff. It's August, and we have gin to drink.

US Marine Helps Flagging 9-Year Old In 5k Finish Race: "Will You Run With Me?"

The United States Marines, America's finest.

Story here.

Colorado Democrat Faces Recall After Narrow Victory Courtesy Of Libertarian Spoiler

Ross Kaminsky has the story in The American Spectator, here:

Forty-five miles north, Senate President John Morse is in even bigger trouble. Although his senate district includes the quirky (and liberal) town of Manitou Springs, John Morse won his 2010 election by only 252 votes in a race in which a Libertarian candidate won five times that number. In other words, if not for the presence of a third party candidate, Mr. Morse would likely have lost; this is not a safe “blue” seat, despite redistricting since 2010 having made the district lean slightly more Democratic than its prior configuration. ... [P]erhaps most galling, even to Morse’s liberal constituents, were comments he made on MSNBC’s Rachel Maddow show in which he proudly said (while claiming the mantle of Abraham Lincoln) that he counseled fellow Democrat senators to avoid reading e-mails from constituents. To be fair, Morse probably assumed that nobody was watching the show.

"The current state of valuation is as clear as a bell. We're not cheap here."

Joshua Brown, here, who notes that value investors are raising cash:

"In the meantime, many famous value managers are husbanding their cash - either because they can't find compelling values or because they foresee better opportunities ahead."

Fox News Thinks Abu Ghraib Is In Afghanistan

How soon they forget.

They report, you decide.

Story here.

The Trend To Part Time Jobs Is A Myth, Otherwise Average Hourly Earnings Would Be Down

Earnings are up 1.87% in the last year

So says Jim O'Sullivan, here:

Jim O'Sullivan, chief U.S. economist of High Frequency Economics . . . is not convinced that part-time, low wage jobs are driving the nation's employment growth. Average hourly earnings most of this year have been rising about 2% at an annual rate, notwithstanding a slight dip in July. That's consistent with the rest of the four-year-old recovery. If low-wage jobs were growing much faster than other positions, they should be pulling down average wage growth, O'Sullivan says.

-------------------------------------------------------------------------------------

Not only are earnings up modestly year over year, the not-seasonally-adjusted figures for usually full time workers show a year over year increase of 1.55 million jobs, or 1.34%. Usually part time is up more, 1.59%, but that's only a net 430,000 workers.

The Part-Timing Of America Has Been Slowing Down, Not Speeding Up

The part-timing of workers was a much more severe phenomenon from the 1960s . . . when teenagers used to bag groceries, for example.

That was a good thing. We should have more of it, not less.

Is it a coincidence that as the minimum wage rises over time part-timing decreases?

!

Usually Part Time Is Up Only 1.25 Million Since Obama Elected In 2008

That's a less than 5% increase in the size of this group over the period, and a less than 1% increase in usually part time compared to the total size of usually part and usually full time taken together in November 2008.

Full Time Jobs Are Almost Back To Where They Were When Obama Was Elected In 2008

That's not to suggest full time is back to the 123 million level as under Bush in 2007, but it is almost back to 118 million as in November 2008.

Did employers continue to shed full time jobs as a response to Obama and the Democrats taking over?

Full time is up over 8 million since 2010.

Obama Still The Worst For Unemployment: Above 7% For 56 Months Straight Since Elected

The average report of unemployment under Reagan was 7.58%, the absolute worst record in the post-war until Obama, who for the 57 months since his election in 2008 has had an average report of unemployment of 8.74%.

The Part-Timing Trend Still Hasn't Materialized In The Unemployment Report

The Bureau of Labor Statistics' employment situation report for July is here, where we learn that the unemployment rate has fallen two tenths of a point to 7.4%, and that jobs added monthly has fallen to 189,000 per month, or 2.268 million jobs added in the last year.

Since everyone is making a big deal of part-timing because of ObamaCare and generally moribund economic conditions, it is noteworthily absent in today's numbers.

The not-seasonally-adjusted numbers show those classified as part-time for economic reasons in all industries down 116,000 from June to July. Year over year the number is up only 8,000. In other words, there is no trend up to be seen there. For those part-time for noneconomic reasons the decline is much more dramatic month over month: 428,000. But year over year the number is up, but only 303,000 or less than 2% of the category.

Those classified as usually part-time are down 17,000 from June to July while those classified as usually full-time are up 288,000 from June to July in the not-seasonally-adjusted columns. Usually full-time also is up 1.557 million year over year. Usually part-time is up only 430,000 year over year or less than one half of 1% of all the workers in those categories combined, and just 1.6% of usually part-time workers from a year ago.

I don't call any of that "the part-timing of America."

Not yet.

The Redcoats Are Already Here: Proof Ordinary Americans Are Spied-On Online By The Police State Right Now

She googled "pressure cookers", he googled "backpacks". Weeks later the police showed up and interrogated him and searched their house for 45 minutes, without a warrant:

"45 minutes later, they shook my husband’s hand and left. That’s when he called me and relayed the story. That’s when I felt a sense of creeping dread take over. What else had I looked up? What kind of searches did I do that alone seemed innocent enough but put together could make someone suspicious? Were they judging me because my house was a mess (Oh my god, the joint terrorism task force was in my house and there were dirty dishes in my sink!). Mostly I felt a great sense of anxiety. This is where we are at. Where you have no expectation of privacy. Where trying to learn how to cook some lentils could possibly land you on a watch list. Where you have to watch every little thing you do because someone else is watching every little thing you do."

I wonder what happens when you don't agree to let them search your house? Face down on the floor in handcuffs? The m/o of the tyranny is to intimidate you into relinquishing your rights. The Redcoats aren't coming. They're already here.

The story was related here in full, and here in part.

Rep. Mike Rogers, Ex-FBI Goon, Proven Wrong By Revelation Of XKeyscore

Chairman, House "Intelligence" Committee

The latest revelations from Glenn Greenwald here show Rep. Mike Rogers of Michigan to be either ignorant or a liar:

The files shed light on one of Snowden's most controversial statements, made in his first video interview published by the Guardian on June 10.

"I, sitting at my desk," said Snowden, could "wiretap anyone, from you or your accountant, to a federal judge or even the president, if I had a personal email".

US officials vehemently denied this specific claim. Mike Rogers, the Republican chairman of the House intelligence committee, said of Snowden's assertion: "He's lying. It's impossible for him to do what he was saying he could do."

But training materials for XKeyscore detail how analysts can use it and other systems to mine enormous agency databases by filling in a simple on-screen form giving only a broad justification for the search. The request is not reviewed by a court or any NSA personnel before it is processed.

Jobless Claims Plunge Over 60k To Lowest Level Ever Under Obama

For only the third time under Obama, first time claims for unemployment, not-seasonally-adjusted, have fallen under 300,000 and in today's report to their lowest level yet: 279,869.

On June 1 the raw number of claims had fallen to just under 294,000. And before that, on September 8, 2012, raw claims fell to just under 300,000. Those are the only two prior instances under 300,000.

Break out the party hats.

Full report here.

Rush Limbaugh Finds A GDP Conspiracy Where There Is None

When it comes to numbers, I have observed that Rush Limbaugh can be counted on to get something horribly wrong, and today was no exception. Today he has misrepresented the routine revision of the GDP data every five years as a revision of the numbers for only the last five years, as if it were designed specifically to make Obama look better. In actual fact, the revision of the numbers goes back not five years, but all the way back to 1929.

Truly incredible, and embarrassing in the extreme, since the truth is the revision occurs every five years, and this is the 14th revision in the series. This is why conservatives hope Rush retires soon, nevermind why liberals hope he retires. He's making us all look stupid when he carries on like this.

I have shown "five" in red below from today's Rush transcript so you can appreciate the thorough-going depth of Rush's misrepresentation of the facts: 

RUSH:  Here's what the Commerce Department is doing. 

They have "made changes to how it calculates gross domestic product," going back five years. "At the same time, the government also went back and revised data for the past five years, to reflect more complete as well as additional statistics from a variety of sources, such as the Internal Revenue Service and the US Department of Agriculture." They have made changes to how they're calculating the gross domestic product, or economic growth, and what they're doing now is they're going back five years. 

They have revised data for the past five years to, they say, "reflect a more complete, as well as additional statistics from a variety of sources, such as the IRS and the Department of Agriculture.  Why do you think they decided to go back the last five years to revise data?  To rewrite the horrible 4-1/2 years of Obama.  There's no question.  I don't know if it's fraudulent, but they're cooking the books -- and after cooking the books, after making it look as good as they can, it's 1.7% economic growth.

Here, however, is the statement from the BEA in today's official release about the routine revision every five years, which has been telegraphed to every reader of BEA GDP reports for many quarters running going back at least to last year (meaning Rush Limbaugh has never read even cursorily a single one of those GDP reports from the BEA in the interim, let alone today's):

Today, BEA released revised statistics of gross domestic product (GDP) and of other national income and product accounts (NIPAs) series from 1929 through the first quarter of 2013. Comprehensive revisions, which are carried out about every 5 years, are an important part of BEA's regular process for improving and modernizing its accounts to keep pace with the ever-changing U.S. economy.

-----------------------------------

1.7% GDP in Q2 2013 is horrible enough, but the average report for the last three quarters comes in under 1%, 0.966% to be exact. So if there is some conspiracy to make things look better than they are, whoever's in charge of that ought to be fired, stat!

This country remains in deep trouble, and there is no conspiracy to hide it. 

George W. Bush Falls To Last For GDP Performance Using 14th Comprehensive Revisions

"I redefined the Republican Party"

The revised GDP figures going back decades came out today, and may be conveniently viewed here. Using these figures based on time frames which span January on January of presidential term, calculating percentage increase in GDP overall and dividing by the number of months in term to arrive at a factor, the rankings are as follows:

1) .533 JFK/LBJ [best performance]

2) .458 Truman (72 months, 1-1-1947 to 1-1-1953)

3) .357 Clinton

4) .323 Reagan

5) .300 Carter

6) .245 Nixon/Ford

7) .214 IKE

8) .180 Obama (51 months, 1-1-2009 to 4-1-2013) 

9) .173 George H. W. Bush

10) .142 George W. Bush [worst performance].

Don't forget that government spending is counted as GDP.  

First Report Of Q2 2013 GDP At 1.7%, Q1 Revised Down To 1.1% From 1.8%, Q4 2012 Down To 0.1% From 0.4%

The press release, excerpted below, from the BEA is here, the full pdf with the 14th revision of the comprehensive GDP data is here. The revisions lower in the prior two quarters combined with the low 1.7% first report in Q2 2013 should be extremely troubling to everyone. The economy is crawling.

"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 1.7 percent in the second quarter of 2013 (that is, from the first quarter to the second quarter), according to the "advance" estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP increased 1.1 percent (revised). The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 18).  The "second" estimate for the second quarter, based on more complete data, will be released on August 29, 2013. The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, private inventory investment, and residential investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. The acceleration in real GDP in the second quarter primarily reflected upturns in nonresidential fixed investment and in exports, a smaller decrease in federal government spending, and an upturn in state and local government spending that were partly offset by an acceleration in imports and decelerations in private inventory investment and in PCE."

CNBC Falls In Love With Its GDP Jailer: Average Report Of GDP 0.966% Last 3 Quarters

The only thing GDP beat was poor expectations.

The average report of GDP in the last three quarters is now 0.966%, thanks to 1.7% in Q2 2013.

It feels good in its way when your killer stops stabbing you.

Moronic Shills For Obama At CNBC Call 1.7% GDP "Upbeat"

Only ignoramuses or liars would call GDP of 1.7% "upbeat", so take your pick. Charity demands the former, but I'm fresh out of it.

It is now four years to the day since Ben Bernanke pointed to the need for 2.5% GDP to reduce unemployment (here):

'Bernanke's core message was similar to that he delivered last week in congressional testimony: that the recession should end soon, but that considerable risks remain -- especially relating to the labor market. It takes GDP growth of about 2.5 percent to keep the jobless rate constant, Bernanke noted. But the Fed expects growth of only about 1 percent in the last six months of the year. "So that's not enough to bring down the unemployment rate," he said.'

The Bureau of Economic Analysis comprehensive revision of GDP and related measures going back decades, available here in pdf of 83 pages, now shows the last three quarters to be truly abysmal for this point in a so-called recovery: growth of 0.1%, 1.1% and 1.7% in the last three quarters. Obama's best year to date, 2012, now comes in at a measly 2.8%, far off the new post-war average of 3.4%.

There's nothing upbeat about any of it.

Presidents Haven't Done Their Job In 20 Years Reporting On Visa Overstays

So says a scathing report in The Washington Times here which says the General Accounting Office can somehow do an audit and find out that we've got 1 million overstaying visas right now, or that previously the number was 1.6 million, but the executive branch hasn't ever been able to figure it out in any year in two decades, nor has Homeland Security fulfilled its legal obligation to track exit compliance since 2004.

Maybe it's because presidents don't give a damn? Maybe it's because there's an unspoken agreement between the two parties to keep the flow coming despite what the people want? Because businesses want the cheap labor, and politicians want the extra votes? And oops, some terrorists get in, so sorry, so now we have to spy on everybody to fix that?

Excerpts:

"The GAO said most of the overstays came by airplane, but 32 percent came through land ports of entry, and 4 percent came by sea. The average length of overstay was 2.7 years. ... The executive branch is supposed to report annually to Congress on how many people have overstayed their visas but has failed to do so for the past two decades, saying the information isn’t reliable enough. ... The total of 1 million potential overstays in the country is an improvement from two years ago, when the GAO found Homeland Security had lost track of 1.6 million people. Homeland Security went back and looked at those names and found that more than half had either actually left the country unbeknownst to the government, or had gained legal status that allowed them to remain in the U.S. Of the others, the department decided most were deemed not to be security risks and so there was no need to track them down. But 1,901 of them were deemed significant national security or public safety threats, and 266 of those were still unaccounted for as of March."

Anthony Weiner's Wacky Gifts To Drudge: A Brief History Since 2012

And now a sampling of the treasure trove of innuendo* supplied by Anthony Weiner to Drudge's, er, headlines:

Weiner pulls out

Will Weiner rise again?

Can Weiner rise again?

Weiner's poll rising . . .

Weiner spotted shooting . . . video

Weiner plunges in

Weiner in

Weiner goes in

Cuomo flogs Weiner

Pre-mature Election: Cuomo slaps Weiner

Shumer shies away from Weiner

Poll: Weiner inside . . . margin of error

Weiner erupts after crowd confronts

NYT pulls Weiner . . . story

Shock Poll: Weiner spurts to lead

Poll: Weiner thrusts into lead

Weiner's lead peters out

Huma gathering women for Weiner

Poll: Weiner, Spitzer thrust to NYC lead

Erection Update: Weiner stays in

Erection Update: Pressure mounts on Weiner to pull out

Electile Dysfunction . . .

Poll: Weiner sags

Poll: Weiner goes soft

Dirty Dems: Weiner roasting

Weiner sticks it out

Poll: Younger women love Weiner

*Attention Rio Linda residents: an innuendo is not an Italian suppository

Obama's Jeffersonian Hero, Ho Chi Minh, Was A Mass Murderer

The pro-Hanoi Vietcong began a guerrilla campaign in the late 1950s to overthrow Diem's government. In the North, the communist government launched a land reform program, and executed between 50,000 and 172,000 people in campaigns against wealthy farmers and landowners, amid broader purges. In 1960 and 1962, the Soviet Union and North Vietnam signed treaties providing for further Soviet military support. In the South, Diem went about crushing political and religious opposition, imprisoning or executing tens of thousands.

--------------------------------------

The 44th president conveniently forgot Vietnamese history and slandered ours by linking a founder of our democracy, Thomas Jefferson, to the mass murderer Ho Chi Minh. [Vietnamese President Truong Tan] Sang had brought Obama a copy of a letter sent to President Truman from Ho in which the communist dictator spoke hopefully of cooperation with America. Obama, stopping short of yet another apology, mused about what might have been, and noted "we discussed the fact that Ho Chi Minh was actually inspired by the U.S. Declaration of Independence and Constitution, and the words of Thomas Jefferson."

Unemploy An Illegal: Bring On The Lettuce Bots!

Story here:

"Technology is about to take over America's fruited plains - robots, it seems, are all the rage down on the farm, and their introduction and spread will make human farm work a thing of the past."

Home Prices Still Too High: Nationally 24% Pay More Than Half Their Income On Housing

Case Shiller Home Price Index @multpl.com

Joel Kotkin reflects on the still expensive housing market here:

Ownership levels continue to drop, most notably for minorities, particularly African Americans. Last year, according to the Harvard study, the number of renters in the U.S. rose by a million, accompanied by a net loss of 161,000 homeowners.

This is bad news not only for middle-income Americans but even more so for the poor and renters. The number of renters now paying upward of 50% of their income for housing has risen by 2.5 million since the recession and 6.7 million over the decade. Roughly one in four renters, notes Harvard, are now in this perilous situation. The number of poor renters is growing, but the supply of new affordable housing has dropped over the past year. ...

According to the Center for Housing Policy and National Housing Conference, 39% of working households in the Los Angeles metropolitan area spend more than half their income on housing, 35% in the San Francisco metro area and 31% in the New York area. All of these figures are much higher than the national rate of 24%, which itself is far from tolerable.

-------------------------------------------------

Kotkin nowhere mentions that currently expensive housing is explicit Federal Reserve policy. ZIRP and QE are specifically designed to reduce long term interest rates to make home mortgages affordable. Instead those policies have re-inflated housing prices to their historical highs before the bubble and reversed the downward trajectory of price resetting those prices were on.

In June 2013 dollars, the Case Shiller Home Price Index reached its low point after the bubble at 126.30 for the quarter ended March 31, 2012. That level hadn't been seen since June 1998. But from the long term perspective prices should have reset to 120 on the index or lower as they have in the past. This expectation holds even more considering the excesses of the bubble which needed to be wiped out, but haven't been.

The Fed has done nothing but interfere with the free market in housing, creating the bubble in the first place and preventing its deflation now. To fix the problem, the Fed needs at a minimum to focus solely on price stability by maintaining a strong dollar. Markets will take care of themselves after that.

Dear Christopher Buckley: "Go Away" Is Not A Solution, Unless You're A WASP

Occupy Wall Street: The Mirror Image Of Congress

Reviewing "This Town" by Mark Leibovich in The New York Times, here, Christopher Buckley wishes in the end that most of the denizens of DC would just go home or, better yet, go away, citing the important fact that the lobbyists are really mostly just former elected officials:

'There’s a phrase in journalism-speak called “burying the lede,” which Leibo­vich appears to do by waiting until Page 330 to cite this arresting figure (previously reported by The Atlantic): in 1974, 3 percent of retiring members of Congress became lobbyists. “Now 50 percent of senators and 42 percent of congressmen do.” No one goes home anymore. Cincinnatus, call your office. ... By the end, one is left thinking that our country would be so much better off if, after putting in their years of “public service,” all these people would just go home. Or just away. But then what would we do for entertainment, being left with a mere Parliament of Bores?'

When the US Congress and the executive conspired way back in the 1920s to restrict representation to 435 in the US House to repress the growing political influence of the grown large immigrant population, mostly from Europe, which they also evidently wished "would just go home" or "away", it merely pushed on a string. So that today instead of worse representation we have representation of the worst sort: lobbyists whom we cannot dislodge at election time, and the 435 people who depend on them for campaign financing whom we cannot dislodge, either.

Today we should have a US House of Representatives of 10,490. Instead we had in 2012 12,411 registered lobbyists, and the 435 mopes the lobbyists, and we, routinely return to Washington, DC.

Representation is messy, but we desperately need more of it as the founders intended, not less.

Presidents Ranked By Level Of Income Inequality: Gini Ratio Of Families, End Of Term

1. .349 JFK/LBJ (least income inequality)

2. .359 Truman

3. .363 Nixon/Ford

4. .369 Carter

5. .374 IKE

6. .401 Reagan

7. .429 Bush 1

8. .435 Clinton

9. .443 Bush 2

10. .450 Obama, to date (most income inequality) 

The IRS Is Obstructing The Investigation Into Its Crimes

Peggy Noonan here:

House investigators this week said they have in fact received less than 1% of the documents they have been asking for from the agency. The IRS itself at one point identified a whopping and rather intimidating 65 million documents that might be relevant to the tea-party scandal. To date—almost three months since the scandal became public—the House Ways and Means Committee says the IRS has turned over only 13,000 pages. And some of them were duplicates. It's gone beyond what staff aides were, last month, calling "slow walking." Chairman Dave Camp said in a statement the IRS's actions look "a lot like obstruction." One aide said: "Patience is wearing thin."

Presidents Ranked By Change Of Income Gini Ratio Of Families In Post-War

1. JFK/LBJ       -6.6%

2. Truman       -5.0%

3. Clinton       +1.3%

4. Obama        +1.5% (to date)

5. Carter         +1.6%

6. Bush2          +1.8%

7. Nixon/Ford +4.0%

8. IKE              +4.1%

9. Bush1          +6.9%

10. Reagan      +8.6%

Inequality of market income decreased most under Kennedy/Johnson and increased most under Reagan. The measure is before taxes and transfers, however. The Organization for Economic Cooperation and Development figures after taxes and transfers for certain periods may be observed here. See the helpful discussion by Tim Worstall, here, including this:

"[E]ven in the post-tax and post-benefit numbers the US is still an outlier in the statistical methods used. In looking at inequality, poverty, in the US we include the cash that poor people are given to alleviate their poverty. But we do not include the things that people are given in kind: the Medicaid, SNAP, Section 8 and so on. It’s possible (I’m not sure I’m afraid) that we don’t include the EITC either. We certainly don’t in the poverty statistics but might in the inequality. All of the other countries do include the effects of such policies. Largely because they don’t offer benefits in kind they just give the poor more money and tell them to buy it themselves. This obviously turns up in figures of how much money the poor have."

That said, inequality of market income hasn't gone up very much in the twenty years since 1993, contrary to President Obama's recent comments here. 

The president might want to consider that Bill Clinton did a better job of reducing income inequality than he has. But, then again, Bill Clinton did a better job than Obama in most everything, and ranks number two behind Truman overall for the best economy in the post-war.

Dangerous Libertarian Appears On David Letterman Show

If QE Is Helping Only The Financial Sector, Maybe It Was Meant To

Robert Skidelsky in The Economist here, referencing John Kay in the Financial Times:

"All of this led John Kay to wonder why so much attention was given to unconventional monetary policies ‘with no clear explanation of how they might be expected to work and little evidence of effectiveness?’ His answer: they are helpful to the financial services and those who work in them."

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QE is medicine for sick banks, not sick economies.

Corporate Cash Sets Another Record At $1.093 Trillion, Liabilities Climb To $5.9 Trillion

Bob Pisani reports here:

"Cash set a record in the first quarter of 2013 on an absolute basis: $1.093 trillion in the S&P 500. It has set a record for 18 of the last 20 quarters."

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Yeah, but nonfinancial corporate business sector bond liabilities have climbed, too, from $3.7 trillion in 2007 to $5.9 trillion in the latest report.

Financial business sector bond liabilities have declined from $6.2 trillion to $4.9 trillion over the same period.

Hey, Democrats Defunded The Vietnam War, So Republicans Can Defund ObamaCare

Did Bernanke Honestly Think Employment Was Improving Significantly On May 22nd?

The more I think about the first time claims for unemployment data this year, I think it's very possible Ben Bernanke got a little ahead of himself on May 22nd with his admittedly mere hint of tapering, thinking there was real improvement in the unemployment picture. And there seemed to be.

In the run up to his May 22nd comments, there had been a string of 13 weeks averaging 320,538 first time claims per week, which translates into an annualized level of 16.6 million, something this country hasn't seen since 2006-2007 under George W. Bush, two years which were the best this country had seen the whole decade, and remain so. In other words, Ben Bernanke may have felt free to hint at tapering bond purchases later in the year if the numbers over the three months which he had just witnessed carried forward through the rest of the year. Entirely understandable.

Everybody went nuts over the tapering remark, which was really just a response to  Rep. Brady's question. But Ben must have been seeing what careful observers were seeing: some of the best first time claims data of Obama's presidency. That said, the number of careful observers are few, and most people do not think much about the not-seasonally-adjusted numbers, let alone the long term comparisons.

Things have deteriorated since then, of course, but in the late winter and early spring, first time claims for unemployment were in fact looking much better.

QE-Induced Savings On Interest Expense Accounts For 47% Of S&P500 Earnings Growth Since '09

So says Robbert van Batenburg, quoted here:

"People underestimate the extent to which quantitative easing has benefited the S&P," said Robbert van Batenburg, director of market strategy at brokerage Newedge USA LLC in New York. He called the effect akin to "an athlete on steroids." The Fed's effect on corporate earnings is difficult to quantify. Van Batenburg estimates that corporate savings on interest expense after rates fell to historic lows has accounted for about 47 percent of S&P 500 earnings growth since 2009. At the end of 2009, quarterly earnings per share for the S&P 500 were less than $20, and companies in the index paid about $4 a share in interest, van Batenburg said. Now the S&P 500 is generating about $26.70 a share in quarterly earnings but pays just $1.50 a share in interest.

Revenues Show Global Economy In Full Retreat

Jeffrey Snider, here:

What feels like a still-recovering recovery to so many looks far different in comparison to the real recession that was already in full swing in 2008 – the fact that so many companies and so much of the economy is running below 2008 rates is very revealing and startling in its implication. It should be even more remarkable aside the fact that QE 3 & 4 are right now being pushed into “markets”, and that a renewed housing bubble is building next to myriad other asset bubbles.

There is no hiding the fact that the global economy, including the US, is in full retreat. Investors and observers may choose to ignore it, but that just makes their game of waiting for recovery all the more curious.

Finally, A Caption For That Weird 2008 John McCain Photo

John McCain, creepy ass cracker

Economic Stress: Almost Half Of TARP Funded Mortgage Mods Redefault

As reported here:

While HAMP has helped about 865,100 homeowners avoid foreclosure over the lifetime of the program through permanent loan modifications, more than 306,000 homeowners had redefaulted on their modified mortgages as of the end of April, the report stated.

Supremes Slap Down Imperial Obama 3x In Last 18 Months In Property Cases 9-0

Story here:

"Horne was the administration's third unanimous defeat in a property rights case in 18 months."

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It's not just the Fifth Amendment which has been under attack by the Obama regime, either. The Supremes also handed down two unanimous defeats in First and Fourth Amendment cases in 2012.

America, are you listening? Your president hates your constitution.

How Bernanke Moved Mortgage Rates Up Nearly 25% On May 22nd

Quoted here May 22nd:

“If we see continued improvement [in the labor market] and we have confidence that that is going to be sustained, then we could in -- in the next few meetings -- we could take a step down in our pace of purchases.”

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The rate was 3.51% on May 16th. On July 18th it's 4.37%.

IRS Political Targeting Scandal Goes All The Way To The Top

pappastax.com April 2009

Peggy Noonan, last week here:

The IRS scandal was connected this week not just to the Washington office—that had been established—but to the office of the chief counsel. That is a bombshell ... Mr. [Carter] Hull told House investigators that at some point in the winter of 2010-11, Ms. [Lois] Lerner's senior adviser, whose name is withheld in the publicly released partial interview transcript, told him the applications would require further review:

Q: "Did [the senior adviser to Ms. Lerner] indicate to you whether she agreed with your recommendations?"

A: "She did not say whether she agreed or not. She said it should go to chief counsel."

Q: "The IRS chief counsel?"

A: "The IRS chief counsel."

The IRS chief counsel is named William Wilkins. And again, he is one of only two Obama political appointees in the IRS.

John Kass: Obama Played The Race Card On Purpose To Divide America

John Kass, Greek-American, channels Aristotle here in the Chicago Tribune:

Obama pronounced the killing as racially motivated, though he didn't use the words. He didn't have to, such is his prowess. It was so smooth that few noticed. He put the killing in a racial context, and that was enough. ... Race was established by the president of the United States, and by other political and media actors. It's a cynical business, about money and power, about keeping divisions between American tribes. There are the black tribes that see Martin in the context of the old civil rights struggles and leverage, and white tribes that see Martin being used to pummel them with racial guilt. ... Yet none of this tribalism has anything to do with what happened the night Martin was killed. Politicians don't worry about that. They're experts at the game of tribes, and a tribal America is what nourishes them.

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"The tyrant should endeavor that the whole community should mutually accuse and come to blows with each other." -- Aristotle, Politics V 

Obama's Response To Zimmerman Verdict Divides His Own Supporters

Currency In Circulation Under Obama Is Increasing By A Factor 31% Higher Than Under Bush

Currency in circulation under George W. Bush increased nearly 51% between November 2000 and November 2008, according to the Federal Reserve, here. Over the course of his 96 months in office, that's a factor of .529. The measure of currency under Bush went from $571 billion to $861 billion.

Currency in circulation under Barack Obama increased nearly 39% from November 2008 to July 17, 2013. Over the course of his 56 months in office, that's a factor of .696. The measure of currency under Obama so far has gone from $861 billion to $1,196 billion.

That means the increase in the currency in circulation under Obama is 31.6% higher than it was under George Bush.

Currency in circulation includes coin and currency held in vaults of banks in addition to coin and currency held by the public.