Bond Mutual Fund Prices Remain Expensive, Returns Negative: Cash Has Been King

Bond mutual fund prices remain expensive by historical standards despite the recent carnage, while returns have been negative. For a safe haven, cash has been the place to be over the last year, such as it is.

For example, the short duration bond index fund from Vanguard, VBISX, finished the week at 10.51, 1.05% above the high end of normal (10.40). Vanguard reports returns down -0.27% for this fund in the last year.

The intermediate duration total bond index fund from Vanguard, VBMFX, a mixture of short, intermediate and long bonds, finished the week at 10.61, 1.04% above the high end of normal (10.50). Vanguard reports returns down -2.77% for this fund in the last year.

The pure intermediate duration bond index fund from Vanguard, VBIIX, finished the week at 11.24, 2.18% above the high end of normal (11.00). Vanguard reports returns down -3.66% for this fund in the last year.

Meanwhile the long duration bond index fund from Vanguard, VBLTX, finished the week at 12.51, 4.25% above the high end of normal (12.00). Vanguard reports returns down -10.01% for this fund in the last year.

Add in the insult of all items inflation of 1.5% to these miserable returns over the last year and cash was the place to be for safety even though it is also down because of inflation (gold, by the way, has fallen, per the London Fix, from 1758.50 on September 20th, 2012 to 1349.25 on September 20th, 2013, a decline of 23.3%).

Clearly such bond funds have farther to fall before they become attractive safe havens once again.

WaPo Finally Demotes The Leader Of The Banana Republic To Lecturer

When you lose The Washington Post, you've really lost it.

The comment at the left was seen here in the comments section to an article in The Washington Post which, among other things, omits Obama's use of the term "Banana Republic" in his address in Kansas today, but does finally demote him to the mere lecturer that he was at the University of Chicago:

Obama at times sought to belittle GOP lawmakers. “The most basic constitutional duty Congress has is to pass a budget,” said the president, a former constitutional law lecturer. “That’s Congress 101.”

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

The demotion from "professor" is interesting in the light of the omission of "Banana Republic" since America pretty much qualifies as one by the definition in Wikipedia if you remember that the bank and automobile maker bailouts enriched private enterprise by socializing the losses on the backs of the taxpayers:

In economics, a banana republic is a country operated as a commercial enterprise for private profit, effected by a collusion between the State and favoured monopolies, in which the profit derived from the private exploitation of public lands is private property, while the debts incurred thereby are a public responsibility. Such an imbalanced economy remains limited by the uneven economic development of town and country, and tends to cause the national currency to become devalued paper-money, rendering the country ineligible for international development-credit. Such government by thieves is a kleptocracy; such a kleptocratic government is manipulated by foreign (corporate) interests, and functions mostly as ceremonial government that is unaccountable to its nation. The national legislature is, in effect, for sale, influential government employees illegitimately exploit their posts for personal gain (by embezzlement, fraud, bribery, etc.), and the resulting government budget deficit is repaid by the country's working people who earn wages rather than making profits.

Better, apparently, to deflate his credentials than face his fascism.

Economic Stress: Middle Class Can't Eat Out On Friday Night . . .

. . . neither at Red Lobster nor at Olive Garden:

"Outside Darden's niche in casual dining, limited-service eateries that don't require tipping are gaining ground."

Read more, here.

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

Tonight's menu at your blogger's home? Baked Steelhead lemon pepper trout filet, Jasmine rice, and steamed broccoli with butter. Serves three tonight for $10.

Nancy Pelosi Doin' The Mussolini

The World Has Learned Nothing Since The Crisis: Global Public Debt Is Up 63% 2008-2013

2008 global public debt $32 trillion

Global public debt, the amount owed by the world's governments, has risen by almost $20 trillion in the five years since the panic of 2008, an increase of nearly 63%.

Note the main offenders, none of whom has been practicing austerity in any sense of the term: America, Canada, Mexico, Brazil, The UK, Europe, India, China, Japan and Australia. Spendthrifts all.

See the data and charts, here.

2013 global public debt $52 trillion

None of this is ever going to be paid back. Chaos awaits.

Jobless Claims Plunge Again To A New Record Low Under Obama: 8 Weeks Under 300,000

Not-seasonally-adjusted first time claims for unemployment now average another new all-time low in the last four weeks under Obama, also marking the eighth week in a row below 300,000.

Over the last four weeks, jobless claims have averaged just 262,000 weekly, handily beating last week's old record 4-week average low of 273,000.

Over the last eight weeks, jobless claims have now averaged an astonishing 273,000 weekly.

Annualized these average levels would fall into the range of 13.6 million to 14.2 million per year. The best actual performance under Bush was 16.2 million per year, also not-seasonally-adjusted. So these are excellent numbers indeed, if they can keep them up. The difference, however, is that under Bush the low levels of claims occurred simultaneously with high levels of employment.

By the way, the advance estimate of 228,399 in last week's report for September 7th merely bumps up this week to a revised 229,485. Supposedly reporting problems were blamed for the low level. It appears any missing numbers from last week appear in this week's advance estimate, which is up +42,262 week over week, which means this week's advance estimate is significantly higher than it really is.

Read this week's report here.

If It's A Number And It's On Rush Limbaugh, You Can't Trust It

Here is today's Rush Limbaugh basic K-8 math error, which keeps him and his audience from appreciating the fact that high gasoline prices have been pummeling the American people for one year longer than he says they have:

"The number of people losing their jobs is up. The number of jobs lost, all of this, is up. The one thing that none of these stories cover is another thing that's going on, and that is the price of gasoline has been over $3 a gallon for 20 months now.  Now, Obamacare is gonna raise everybody's health care costs.  Premiums are gonna skyrocket. The cost of food is way up.  Gasoline is over $3."

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

Actually the number of people losing their jobs is DOWN and down big in the last 2 months to a rate low enough to compete with George W. Bush, if it can be sustained. Usually part-time is not up significantly, and usually full-time is almost back to where it was on Election Day 2008. The real story there is the failure of full-time to recover to the 2006-2007 level.

But gas has been above $3 for 1000 consecutive days, according to The Wall Street Journal, not 600 days:

1000

------  = 33 months (not 20).

30

He read it, he flubbed it, boo hoo. And you people pay for that?

New Stock Market High Based On Nothing But ZI(R)P

The total stock market makes another new high today on mere words from the Federal Reserve.

So what does that have to do with fundamental analysis?

ZI(R)P.

By Not Tapering, Fed Devalues Your $ In One Day By Almost What It Takes A Year To Do

The dollar fell 1.2% today because the Fed decided not to taper bond purchases, while year over year the dollar is down 1.5% to 1.8% because of inflation, as reported yesterday by the Bureau of Lies and Statistics, here:

The all items [Consumer Price] index increased 1.5 percent over the last 12 months. The [core] index [Personal Consumption Expenditures] for all items less food and energy has risen 1.8 percent over the last year; the 12-month change has remained in the range of 1.6 percent to 2.3 percent since June of 2011.

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

By all means the Fed should have tapered, and increased interest rates to boot.

The war on the citizenry continues.

End the Fed.

(As far as broken clocks go, Ron Paul is correct twice every 24 hours).

Best American Rifleman Cover Ever

Leave Them There

Rush Limbaugh Can't Even Divide 1000 by 30

33: That's how many consecutive months gasoline has been above $3/gallon, but Rush just said 20 months.

Nipplehead.

The Wall Street Journal, yesterday, here:

"A millstone has reached a milestone. On Tuesday, the national U.S. average gasoline price chalked up its 1,000th consecutive day above $3 a gallon, according to the AAA. That’s a landmark most Americans couldn’t have dreamed of a decade ago: Pump prices didn’t break above the $2 level sustainably until 2005."

American Businesses Have Saved $2.8 Trillion In Last Four Years Due To ZIRP

In the form of lower borrowing costs, according to this story from Bloomberg:

America’s companies, from Apple Inc. (AAPL) to Verizon Communications Inc., are saving about $700 billion in interest payments with the Federal Reserve’s unprecedented stimulus. ...

Savings of about $700 billion represents the difference between what companies that have sold bonds since Sept. 17, 2009, are paying annually based on an average maturity of nine years for securities in the Bank of America Merrill Lynch U.S. Corporate & High Yield Index, versus what they might have paid before the crisis.

After rising as high as 11.1 percent on Oct. 28, 2008, it wasn’t until Sept. 17, 2009 that yields fell below the pre-Lehman average of 6.14 percent, the Bank of America Merrill Lynch index shows.

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

Just another reason corporate profits after taxes have skyrocketed to another record seasonally-adjusted annual rate of $1.83 trillion for Q2 2013.

First Black President Brings Record High Poverty And Inequality As The New Normal

You talkin' to me?

Hm. Imagine that.

From the Associated Press story, here:

The nation's poverty rate remained stuck at 15 percent last year despite America's slowly reviving economy, a discouraging lack of improvement for the record 46.5 million poor and an unwelcome benchmark for President Barack Obama's recovery plans.

More than 1 in 7 Americans were living in poverty, not statistically different from the 46.2 million of 2011 and the sixth straight year the rate had failed to improve, the Census Bureau reported Tuesday. Median income for the nation's households was $51,017, also unchanged from the previous year after two consecutive annual declines, while the share of people without health insurance did improve but only a bit, from 15.7 percent to 15.4 percent.

"We're in the doldrums, with high poverty and inequality as the new normal for the foreseeable future," said Timothy Smeeding, an economics professor at the University of Wisconsin-Madison who specializes in income inequality. "The fact we've seen no real recovery in employment and wages means we've just flatlined." ... 

"This lack of improvement in poverty is disappointing and discouraging," said John Iceland, a former Census Bureau chief of the poverty and health statistics branch who is now a Penn State sociology professor. "This lack of progress in poverty indicates that these small improvements in the economy are not yet being equally shared by all."

Ron Haskins, a senior fellow at the Brookings Institution who specializes in poverty, agreed.

"Everything's on hold, but at a bad level; poverty and income did not change much in 2012," he said. "So child poverty is still too high and family income is still too low. The recession may be over, but try to tell that to these struggling families. Don't expect things to change until the American economy begins to generate more jobs."

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

Way to go, Brownie!

Kook Fringe Republican Comes Out For Gun Control

David Frum, here.

Guns don't kill people, Canadians do.

Charlie Gasparino Gets It Right: America Lost Its AAA Because Of Debt, Not Debt Ceiling

Charles Gasparino for The New York Post, here:

In fact, economic growth is barely existent on [Obama's] watch; millions of Americans have stopped looking for work and the country lost its Triple-A bond rating because debt isn’t the settled matter Obama pretends it is.

5 Years Post-Lehman Bros. Bankruptcy, VTSMX Makes New All Time High

Vanguard's Total Stock Market Index Fund is up 163% since the March 2009 low of 16.43.

On the day Lehman Bros. failed in September 2008, VTSMX closed at 29.24 but proceeded to fall from there another 44% into 2009 despite the passage of TARP in early October 2008, and despite massive short-term discounted loans to just about the whole world by the US Federal Reserve Bank denominated in the trillions of dollars throughout the period.

From the 2007 high to September 15, 2008 this fund had already fallen from 37.80 or nearly 23%. The total decline of the fund from the 2007 high to the March 2009 low was nearly 57%.

A decline of that magnitude from today's new high would land the fund back at 18.81.

The Founders Didn't Believe In American Exceptionalism: They Sought To Be Equals In The World

"When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation."

Rush Limbaugh: The Big Boob On The Right

It's Monday and you know what that means. If Rush Limbaugh is talking about numbers on a Monday he's going to slaughter them.

I counted two major instances today of getting it totally backwards.

The first, on Janet Yellen, is totally missing from the transcripts. He had said she will completely reverse the Bernanke policy and tighten when everyone knows she'll do no such thing. Someone must have called him to correct him, and then he reversed what he had said previously, and corrected it (here) to avoid looking like the total boob that he is:

I was misinformed by a self-professed market expert.  Anyway, my bad.  I got 'em reversed.  That's why the market's doing well today. It is because the priming of the stock market pump is scheduled to continue unabated if this Yellen woman ends up being the chairman of the Fed.  Now, I'll give you the stats on all this quantitative easing. It's basically $85 billion a month.  What it is, is they're not really printing the money.

In other words, the man with the golden EIB microphone doesn't have the brains to discern the one position from the other, nor is any real knowledge about the subject he may possess anything but completely derivative. He relies on what other people whom he trusts tell him, and can't reason it out for himself, not even by checking the stock market before he goes on the air. And for that reason what he says is no good to his audience. He's just quoting an authority figure. But what is really shameful is that he simply blamed his error on someone else when the privilege of holding a microphone going straight into the ears of millions should be viewed by him as a great responsibility which rests on him, not on his sources. Instead he treats his public position, and his hearers, with contempt by blaming someone else.

The second major blunder was that Rush stated that the US created $18 trillion out of thin air during the financial crisis, when that figure is the estimate for global borrowing, and certainly is not money printing:

The overall amount of priming that the federal government and the Federal Reserve along with several other central banks all over the world have done, the amount of money that they put in to the global economy... What was it I heard? It's $18 trillion, and that's just the US number. That's what it is. It's $18 trillion all told for $1 trillion worth of growth.  So in order to get $1 trillion of economic expansion in the past five years, the Fed has spent $18 trillion.  It's been classic Keynesian economics. ...

The bottom line was, folks, that $18 trillion was created out of thin air -- $18 trillion.  I mean, this doesn't even get lopped on to the national debt because this is not money authorized by the federal budget by US Congress.  This is just the Federal Reserve just decided to print money wherever they wanted and send it wherever they wanted, all ostensibly to save the world economy.  All it did was bail out the best and the brightest from the mistakes that they had made. 

Then during a break another panicked phone call comes in from the trusted source and Rush again quickly corrects himself, putting the $18 trillion figure on the global effort, not on the US alone, and designating it as "borrowed" not "printed":

It's $18 trillion. The G7 nations borrowed $18 trillion since the financial crisis and have only $1 trillion in economic growth to show for it.  That's it.  That's what it's bought us. There was $18 trillion borrowed, and a lot of it's gonna be forgiven and not have to be paid back.  By the way, if you want to know what happens to that money, say hello to tax increases down the line.

I'm sure by this time the rubes are completely confused by their hero. There's no point in explaining any of this to Rush because he gets this stuff wrong no matter how many times it is explained to him, which just shows he has no desire to learn it or simply lacks the mental equipment.

In which case he ought to just shut up about it. Spreading falsehoods is bad for the country and bad for the cause. 

Debt To The Penny Has Been $16.738 Trillion For 74 Days Straight

View Debt to the Penny for yourself here, and count the days.

It's really remarkable, because the debt was in the $16.8 trillion range for many days in April, and backed down from there and stayed at the current level, a few hundred million dollars here and there notwithstanding.

Under Obama Identifying As "Lower Class" Reaches Highest Level Ever: 26 Million

400 homeless encampments in Marin County in 3 years

As reported here:

Roquemore is among the small but surging share of Americans who identify themselves as "lower class." Last year, a record 8.4% of Americans put themselves in that category — more than at any other time in the four decades that the question has been asked on the General Social Survey, a project of the independent research organization Norc at the University of Chicago.

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

The September 11th story excerpted at left details the ongoing problems of homelessness and poverty in Marin County, California, during the last three years and concludes that there are about 630,000 Americans living like this throughout the country as we speak.

Read it, here.

The Crony Capitalist Banks: The Biggest Winners Since The Crash

And we, of course, are the biggest losers.

Tom Petruno for The LA Times:

In the second quarter of this year U.S. banks earned a total of $42.2 billion — the biggest industry profit in history, and double the earnings of the same period in 2010. It's no accident that the banks have prospered mightily since the crash, said Neil Barofsky, who was the watchdog over the U.S. bank bailout program launched in September 2008. "We turned the entire resources of the nation toward one goal: setting up a situation where the banks could earn their way out of this," said Barofsky, now an attorney at Jenner & Block in New York. The plan was not, he lamented, "about holding institutions accountable" for the debacle. ...

[I]n the longer run, TARP was less significant for many banks than the aid of the Federal Reserve under Chairman Ben S. Bernanke. By hacking short-term interest rates to near zero and holding them there since the end of 2008, the Fed has slashed bankers' cost of money — particularly deposits — to well below what they earn on loans and investments. Hence, record profits. ...

The Fed's decision to keep short-term interest rates near rock bottom for nearly five years has devastated the income of tens of millions of Americans. In the mid-2000s, savers in banks were routinely earning 4% or more on one-year bank certificates of deposit, or $2,000 in annual interest on a $50,000 nest egg. The average rate now: 0.23%, according to Bankrate.com. The same $50,000 nest egg earns just $115 a year in interest at that rate. "And after inflation they're actually losing ground," said Andrew Lo, a finance professor at MIT in Cambridge, Mass.

Read the rest from Tom Petruno, here.

Larry Summers Officially Not A Candidate For Fed Chair, S&P500 Futures Soar 20

The Bernank will be replaced by a clone, according to the market players.

Another dark day for the free market, an ecstatic one for those first in line for money.

Food Stamp Recipients In June Edged Up Again To Near Record Level

The number of people receiving food assistance edged up again in June to 47,760,285, just shy of the record in December 2012 which was 47,792,056.

The reports may be viewed here.

Data is through September 6th.

15.18% of America's population of 314.69 million receives government food assistance, or 1 in 6.6 individuals, each receiving less than $133 per month or $1.47 per meal.

To Us Obama's A Dictator, To Liberals An "Executive-Power Extremist"

You won't find the traditional words "king", "tyrant", "usurper" or "dictator" in Conor Friedersdorf's Atlantic column, "Obama Acts Like He Doesn't Know He's An Executive-Power Extremist", here, because, before dictatorship disarms the population, it has to disarm the language first.

And it has:

The grammer is priceless. Who "put more and more war-making power in the hands of the president"? In Obama's telling, "a decade" put the executive power there. ... We know that Obama is an executive-power extremist in his actions. ...  [I]s he fooling himself, because he likes to think of himself as [a] more prudent and moderate man than he is? Can he not bear the truth that he's a Cheneyite extremist?

There it lies, limp as a dick. 

NSA Poses As Google To Spy

G.NSA.NSA.G.L.E.

'Brazilian site Fantastico obtained and published a document leaked by Edward Snowden, which diagrams how a "man in the middle attack" involving Google was apparently carried out.'

Story here.

Completed Foreclosures In July Still 133% Of Pre-2006 Averages, Starts Down To 7.25% Above Normal

Corelogic reports here at the end of August that completed foreclosures in July 2013 ran at a level of 49,000. The pre-2006 average level was 21,000. Though still highly elevated, July 2013 is a big improvement over July 2012 when completed foreclosures were at 65,000. That means conditions have improved by almost 25% in the last year.

Corelogic puts completed foreclosures since September 2008 at 4.5 million, with 949,000 homes presently in some state of foreclosure.

Separately CNBC and AP Obama here are happy to report that foreclosure starts are almost back to 2005 levels and are within 7.25% of normal at 55,775 in August:

Lenders initiated foreclosure action in August against the fewest U.S. homes for any month in nearly eight years, a trend that should help reduce the number of homes lost to foreclosure in the months ahead. Some 55,775 homes entered the foreclosure process last month, a decline of 8 percent from July and down 44 percent from August last year, foreclosure listing firm RealtyTrac Inc. said Thursday.

Muslims Submit 5 Times A Day, Americans Not Even Once

"Stand up to Islam".

Australian Conservative Victory Was Backlash Against Carbon Tax

WUWT, here:

"Many Australians are celebrating the win of Tony Abbott and his coalition government as a vote by the populace against the much hated Carbon Tax ramrodded by former prime minister Julia Gillard."

Low Jobless Claims "Not At All Inconsistent With ... Maximum Market Risk"

So says John Hussman, here:

"[W]hile the low level of initial claims for unemployment has been a bright spot, the simple fact is that initial claims are almost always depressed at major market peaks, which contributes to the optimism and euphoria at those highs. ... the recent pattern of new claims for unemployment ... is not at all inconsistent with previous instances of maximum market risk."

Absolute Strategy Research Survey Finds 11% Think This Is Still A Depression, 25% A Recession

The survey may be viewed here.

Look on the bright side: Since February almost 20% fewer think the economy is still in recession, and over 30% fewer think the economy is in a depression.

I guess we'll have to try harder.

Average Weekly Hours Haven't Been "Full-Time" For 12 Back-To-Back Months Since 4/'80

The last time average weekly hours averaged full-time, that is, 35 hours or above, for 12 consecutive months or more was in April 1980.

ObamaCare's 30-Hour Full-Time Rule, A Depression Era Idea Going Back To 1937 And Hugo Black

In 1935, Black became chairman of the Senate Committee on Education and Labor, a position he would hold for the remainder of his Senate career. In 1937 he sponsored the Black-Connery Bill, which sought to establish a national minimum wage and a maximum workweek of thirty hours. Although the bill was initially rejected in the House of Representatives, an amended version of it, which extended Black's original maximum workweek proposal to forty-four hours, was passed in 1938 (after Black left the Senate), becoming the Fair Labor Standards Act.

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

Even before Roosevelt was inaugurated, Black introduced legislation to establish a minimum wage and to limit work in most large industries to 30 hours a week in order to spread available jobs to millions of workers who lost their jobs in the Great Depression. Six years later, Black's substantially revised legislation became the Fair Labor Standards Act, America's first minimum-wage law. Black's Senate committee investigations prompted the reorganization of the nation's airline and utility industries. While most Southern members of Congress selectively supported New Deal proposals, Black usually voted for Roosevelt's policies and often complained that the administration did not go far enough to help the lower classes.

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

Senator Hugo Black of Alabama, a champion of a 30-hour workweek, agreed to sponsor the Administration bill on this subject in the Senate, while Representative William P. Connery of Massachusetts introduced corresponding legislation in the House. The Black-Connery bill had wide Public support, and its path seemed smoothed by arrangements for a joint hearing by the labor committees of both Houses.

Generally, the bill provided for a 40-cent-an-hour minimum wage, a 40-hour maximum workweek, and a minimum working age of 16 except in certain industries outside of mining and manufacturing. The bill also proposed a five-member labor standards board which could authorize still higher wages and shorter hours after review of certain cases.

Proponents of the bill stressed the need to fulfill the President's promise to correct conditions under which "one-third of the population" were "ill-nourished, ill-clad, and ill- housed." They pointed out that, in industries which produced products for interstate commerce, the bill would end oppressive child labor and "unnecessarily long hours which wear out part of the working population while they keep the rest from having work to do." Shortening hours, they argued, would "create new jobs...for millions of our unskilled unemployed," and minimum wages would "underpin the whole wage structure...at a point from which collective bargaining could take over."

Government Statistics Will NEVER Capture The ObamaCare "Part-Timing" Trend

The long term trend in average weekly hours is down, down, down.

And the reason is simple and devious by design, in order to escape detection: Anyone working less than 35 hours is already part-time as far as the government statistical agency, the Bureau of Labor Statistics, is concerned, so if hours are reduced from say 34 to 29 to comply with ObamaCare's new definition of part-time, that will never show up in the part-time numbers because that will not make the slightest bit of difference. People working 34 hours were already part-time as far as the BLS is concerned, so if they are cut back to 29 they will still be so. 

The BLS here defines full-time as 35 hours or more per week, and part-time as anything less than 35:

"[Part-time] Refers to those who worked 1 to 34 hours during the survey reference week and excludes employed persons who were absent from their jobs for the entire week."

This is a well known fact. But it is little appreciated that as ObamaCare deviously defines full-time as 30 hours or more, that will by definition not make a difference to the BLS' statistical presentation, which doesn't begin counting full-time until hours are 35 or more.

It's as if the 30 hour rule were designed to exploit the bureaucratic inertia behind the different definition and fly under its radar.

The only way we'll be able to observe the perverse scaling back of employee hours is in the hours statistics. Unfortunately, the long-term trend in hours is down, down, and down, and it will be difficult to detect the new downward trend within the old downward trend. Besides, average weekly hours are up since ObamaCare passed, obviously because the economy is slowly improving from a great deficit, ObamaCare notwithstanding. Average weekly hours are actually up 2% since ObamaCare passed.

The Senate healthcare bill, like the Senate itself since the passage of the 17th Amendment, is a Trojan Horse meant to destroy the country as we once knew it. It were almost better if the Senate no longer existed, and the House expanded to the proportions it had formerly before the Reapportionment Act of 1929, itself a grievous offense against the liberties of the people.

Average weekly hours are up 2% since ObamaCare passed.

The Workforce Depression Of 2007 Remains 4.19 Million In The Hole According To Social Security

The size of the workforce earning wages for Social Security purposes went into multi-year depressions since 1990 three times: 1990, 2001 and 2007.

The 1990 depression saw the workforce shrink by 1% and not recover in size until the third following year.

The 2001 depression saw the workforce shrink by 0.4% and not recover in size until the third following year.

The 2007 depression saw the workforce shrink by 3.3% and as of 2011 still has not recovered, four years later. The depression in workers through 2011 is 4.19 million, and since the bottom in 2010 982,000 workers have been added through 2011. 2012 figures will be available in mid-October 2013.

The depression in jobs designated "usually full-time" is 5.35 million, 4.3% below its 2007 peak. 

Sorry, But We Aren't Talking About A Lot Of People Not Counted In The Unemployment Numbers

I'd estimate the number not counted in the unemployment numbers to be between 1.5 million and 3.2 million, max.

9.784 million have left the labor force under Obama and are not counted as unemployed since he was elected 4.75 years ago. That's a lot of people, 75% more than left the labor force under George Bush. Not quite 9.5 million left under Bush, but that was over 8 full years.

Who are they who have left the labor force? And should any of them be counted as unemployed as many critics keep maintaining?

The people who should not be counted as unemployed from that total include the 1.1 million who retire every year, so subtract 5.2 million over the period, leaving 4.584 million. Those not in the labor force with a disability are up 1.4 million since 2008. Subtract them and that leaves 3.184 million.

As for the people who should be included in the unemployment number but aren't, they include the number leaving the labor force who wanted to work and searched for a job but were not counted as unemployed. But they were counted by the government. That number has increased by about 1 million since the beginning of the 2007 recession, as shown in the graph (h/t Mish). Then add in those not in the labor force who weren't discouraged workers but looked for work for other reasons and you add another 475,000. They weren't counted in the unemployment numbers either, but they were counted by the government.

So subtracting those 1.475 million from 3.184 million, you get 1.7 million unaccounted for who might or might not need to be included with those 1.475 million who perhaps should be. Many of those 1.7 million are probably like a lot of Americans who became sole proprietors in the aftermath of losing their regular jobs and involuntarily went into business for themselves, making lots less money than before in many instances, typically as contract employees and freelancers, supplementing their incomes from their savings and practicing frugality. The US Census Bureau might agree, having just reported here in May that between 2008 and 2011 alone the number of such "businesses" is up 1.2 million in the aggregate. That leaves you with a minimum expansion of the unemployed to 12.8 million from the current 11.3 million, and a maximum expansion to 14.5 million, but based on the Census data on sole proprietorships, I'll lean to the under.

The real unemployment rate would therefore be something a little higher than the current 7.3%,  between 8.3% and 9.4%, but probably closer to 8.3%. I'll go with 8.6% unemployment based on an additional 1.975 million not in the labor force who could very well be in it.

That's almost 18% worse than the government says unemployment is right now, but based on what I see regularly from government estimates of things, that's routinely good enough for them.

After all, hasn't it been called "good enough for government work" for decades for a reason?

Usually Full-Time Under Obama Has Nearly Recovered, Just 564,000 Jobs Short Of The 11/08 Level

The graph shows usually full-time from November 2008 to present. Full-time jobs, contrary to what you may have heard, have nearly recovered to the level they were at when Obama was first elected.

Full-time is cyclically higher in summers, so expect a decline in this metric by Christmas. If the pattern of shallower cyclical lows persists, expect a dip to 116 million.

The country is still a long way from a full full-time jobs recovery, however. Peak full-time in 2007 had been in excess of 123 million jobs.

The Part-Time Myth: Usually Part-Time Is Up Just 465,000 Since Obama Was Elected In 2008

Usually part-time is up barely 1.8% since Obama was elected in November 2008. The number goes up in the winter and comes down in the summer, with the school year. There are no dramatic higher highs after ObamaCare was passed in 2010, however, just higher lows, which is what you would expect from a growing population.

Drudge, repeater of stupid

Stupid Conservative Headline Alert: CNS News Says Unemployment Down Only Half A Percent Since 2009

The story is here.

A drop of .5 from 7.8% to 7.3%, of course, is a drop of 6.4%, not .5%.

Ignorant boob.

August Unemployment Ticks Down To 7.3% From 7.4%, Job Gains Now Averaging 184,000/month

Obama's job recession still going strong long after everyone else's ended

That's 4.75 years straight of unemployment above 7%, or 57 months.

Job gains averaging 184k/month are slightly higher on average than two months ago, despite revisions down to jobs added in June and July. Separately, not-seasonally-adjusted first time claims for unemployment in August were running 278,000 per week, the lowest yet under Obama.

The full report is here.

Two months ago the unemployment rate was 7.6% and we were adding an average 182,000 jobs a month. At that time hourly earnings were also up 2.2% year over year, and they still are in the August report.

Not-seasonally-adjusted, part-time for economic reasons is down 152,000 year over year while usually full-time (+35hrs/wk) is up 1,654,000. Usually part-time (-35hrs/wk) is up only 297,000 year over year, not-seasonally-adjusted.

If ObamaCare is supposed to be part-timing us all, I still don't see evidence of it. What it's really doing is helping to retard employment generally. We need to start viewing persistent, long-term employment deficits as a response by business to Obama administration policies. Otherwise full-time jobs would not have continued to decline throughout 2009 and 2010 the way they did. As late as February 2011 full-time was still at the 110 million level, only slightly off the low just under 109 million a year earlier in January 2010.

At just under 118 million now, full-time remains 5.35 million off the 2007 peak above 123 million. Factor in population growth and full-time should be trending close to 130 million by this time. We're 12 million full-time jobs behind where we should be.

The Bush jobs recession ended after 47 months, but the Obama jobs recession is still going strong at 67 months.

That's the real scandal of this so-called recovery.

When It Comes To Moral Obscenity, The US Takes The Prize For Indiscriminate Slaughter Of Civilians

That Red Line In Syria, Somebody Else Drew That

Organisation for the Prohibition of Chemical Weapons

President Obama, quoted here:

“I didn’t set a red line, the world set a red line,” Obama said. “My credibility’s not on the line. The international community’s credibility is on the line. And America and Congress’s credibility’s on the line."

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

When everyone's responsible, no one is.

Radioactive Water Tank Leaks At Fukushima Produce 2.2 Sv/hr

Reported here:

Readings just above the ground near a set of tanks at the Fukushima Daiichi plant showed radiation as high as 2,200 millisieverts (mSv), the Nuclear Regulation Authority (NRA) said on Wednesday. The previous high in areas holding the tanks, 1,800 mSv, was recorded on Saturday. Both levels would be enough to kill an unprotected person within hours. The NRA has said the recently discovered hotspots are highly concentrated and easily shielded.

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

Normally, 2000 mSv/hr is enough to kill you, but because the story says the radiation is "easily shielded" after it's found, this must mean this is not deadly gamma radiation for the most part. Paper can block alpha and foil can block beta, but gamma requires 2.5 inches of concrete just to reduce intensity by 50%.

Constitutional parchment was no "practical security" against the US Senate's ObamaCare, was it?

After discriminating, therefore, in theory, the several classes of power, as they may in their nature be legislative, executive, or judiciary, the next and most difficult task is to provide some practical security for each, against the invasion of the others.

What this security ought to be, is the great problem to be solved. Will it be sufficient to mark, with precision, the boundaries of these departments, in the constitution of the government, and to trust to these parchment barriers against the encroaching spirit of power? This is the security which appears to have been principally relied on by the compilers of most of the American constitutions. But experience assures us, that the efficacy of the provision has been greatly overrated; and that some more adequate defense is indispensably necessary for the more feeble, against the more powerful, members of the government. The legislative department is everywhere extending the sphere of its activity, and drawing all power into its impetuous vortex. The founders of our republics have so much merit for the wisdom which they have displayed, that no task can be less pleasing than that of pointing out the errors into which they have fallen. A respect for truth, however, obliges us to remark, that they seem never for a moment to have turned their eyes from the danger to liberty from the overgrown and all-grasping prerogative of an hereditary magistrate, supported and fortified by an hereditary branch of the legislative authority. They seem never to have recollected the danger from legislative usurpations, which, by assembling all power in the same hands, must lead to the same tyranny as is threatened by executive usurpations. In a government where numerous and extensive prerogatives are placed in the hands of an hereditary monarch, the executive department is very justly regarded as the source of danger, and watched with all the jealousy which a zeal for liberty ought to inspire. In a democracy, where a multitude of people exercise in person the legislative functions, and are continually exposed, by their incapacity for regular deliberation and concerted measures, to the ambitious intrigues of their executive magistrates, tyranny may well be apprehended, on some favorable emergency, to start up in the same quarter. But in a representative republic, where the executive magistracy is carefully limited; both in the extent and the duration of its power; and where the legislative power is exercised by an assembly, which is inspired, by a supposed influence over the people, with an intrepid confidence in its own strength; which is sufficiently numerous to feel all the passions which actuate a multitude, yet not so numerous as to be incapable of pursuing the objects of its passions, by means which reason prescribes; it is against the enterprising ambition of this department that the people ought to indulge all their jealousy and exhaust all their precautions. The legislative department derives a superiority in our governments from other circumstances. Its constitutional powers being at once more extensive, and less susceptible of precise limits, it can, with the greater facility, mask, under complicated and indirect measures, the encroachments which it makes on the co-ordinate departments. It is not unfrequently a question of real nicety in legislative bodies, whether the operation of a particular measure will, or will not, extend beyond the legislative sphere.

On the other side, the executive power being restrained within a narrower compass, and being more simple in its nature, and the judiciary being described by landmarks still less uncertain, projects of usurpation by either of these departments would immediately betray and defeat themselves [don't laugh, he really wrote this]. Nor is this all: as the legislative department alone has access to the pockets of the people, and has in some constitutions full discretion, and in all a prevailing influence, over the pecuniary rewards of those who fill the other departments, a dependence is thus created in the latter, which gives still greater facility to encroachments of the former. I have appealed to our own experience for the truth of what I advance on this subject. ...

The conclusion which I am warranted in drawing from these observations is, that a mere demarcation on parchment of the constitutional limits of the several departments, is not a sufficient guard against those encroachments which lead to a tyrannical concentration of all the powers of government in the same hands.

-- James Madison, 1788 (Federalist 48, emphases added)

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

Repeal the 17th Amendment.

Estimated Fair Value Of The S&P500 Today Is About 1000

Doug Short doesn't say "fair value", but about 1000 should be the fair value level of the index using regression analysis, here (where he has, as always, a vivid chart):

The peak in 2000 marked an unprecedented 152% overshooting of the trend — nearly double the overshoot in 1929. The index had been above trend for two decades, with one exception: it dipped about 11% below trend briefly in March of 2009. But at the beginning of July 2013, it is 62% above trend. In sharp contrast, the major troughs of the past saw declines in excess of 50% below the trend. If the current S&P 500 were sitting squarely on the regression, it would be around the 998 level. If the index should decline over the next few years to a level comparable to previous major bottoms, it would fall to the 450-500 range.

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

Investors with a memory will remember that when TARP was signed on October 3, 2008, the S&P500 was at 1099 and then fell dramatically from there until early March 2009, and that on the third anniversary of TARP in October 2011 the index revisited 1099 exactly, in the wake of the summer debt ceiling brouhaha. But we haven't looked back since.

Unfortunately, the S&P500 has another date with the depths, but just hasn't set it yet.

Fed Tapering QE "In Part To Relieve The Collateral Scarcity"

Mentioned here by Peter Coy:

The abrupt shrinkage of the budget deficit this year caused the Treasury Department to cut back on issuance of debt in the shorter maturities that are sought after on Wall Street. Foreign demand has been strong, partly because some European government securities that had been used as collateral are no longer considered safe enough. Finally, the Federal Reserve, in its efforts to stimulate the economy, has been soaking up $85 billion a month of Treasuries and mortgage-backed securities. Some market participants argue that the Fed is planning to taper its bond purchases in part to relieve the collateral scarcity.

Stereotypical Federal Spending Wei Tu Hai

Federal outlays from fiscal 1985 through 2012 are up 274%, from $946.3 billion in 1985 to $3,537.1 billion in 2012. Federal receipts have lagged those outlays, however, up only 234% over the period, resulting in a net addition to deficits in nominal terms of $9.08 trillion as of the end of fiscal 2012, exploding the national debt. The political argument has been whether the taxes were insufficient to cover the spending, or the spending too high given the taxes. But in 24 of those 27 years there were annual deficits, each a message that Sum Ting Wong. Many Democrats shrugged and answered on taxes "Wi Tu Lo". Republicans looked at all that spending and said "Ho Lee Fuk, spending Wei Tu Hai". And now that we are $17 trillion in the hole the people say "Bang Ding Ow". But will they demand a cut to spending? No Fuk Hing Wei. Nao Tu Suun, they will say, as always. Po Ni up Tai Ni Sum later, maybe, but No Like Lee. Besides, Ri Li No Won Tu, anyhow. No Fun. Rather Tai Wan On.

London Grows By A Million 2001-2011, But 600,000 Native Whites Flee

Which helps explain why UKIP is winning elections in Great Britain: It just went from 7 seats in Parliament local elections to 147, with Britons fed up with regulations which come with EU membership and flood their country with cheap, foreign labor.

Stories here at The UK Telegraph, and here at Sky News.

(originally posted May 7th, corrected)

Got Gas? You Should.

The cheapest Grand Rapids gasoline price today is $3.64/gallon, while the average price is $3.75/gallon. The cheapest price is up 6.7% from just a week ago when gasoline was already expensive at $3.41/gallon. Truly affordable gasoline would be closer to $2.60/gallon, according to Tim McMahon at inflationdata.com.

After hearing reports on the radio this week that Michigan ranks 10th in number of miles traveled by car in the country, today Woodradio.com reports, more to the point, that travel miles are actually down in Michigan, all the way to 2005 levels, something I and some others have been reporting for over a year about the country in general. Travel miles actually have been stuck at levels first achieved 8-9 years ago as a consequence of the economic depression we entered in 2007, when travel miles reached their peak.

We haven't been the same since.