Campaign finance reform: Repeal the 17th Amendment

In 2012 there were 33 Senate seats up for grabs, and the cost to a candidate of winning one averaged $10.5 million, if the popular estimates of what winning candidates raised are to be believed. That's something like $700 million total spent by both the winners and losers.

For all 435 House seats the candidates spent something like $1.5 billion, with $1.7 million spent on average by each winner.

With $6 billion total spent on the 2012 Congressional election from all sources thanks to additional PAC spending courtesy of a US Supreme Court ruling, the candidates themselves therefore spent at most $2.2 billion while outside interests spent an additional $3.8 billion to elect both "your" representative and "your" Senator. No wonder you like them so much.

The five most expensive races alone in 2012 were for Senate seats, and cost from all sources in excess of $376 million, $142 million of which came from "outside" sources, 38% of the total. Assuming that $700 million was spent by all 33 Senate candidates themselves in 2012, and adding an additional 38% from outside sources, that would put the cost of the 2012 Senate election from all sources close to $1 billion for just the 33 seats. For the whole lot of 100 Senators, then, we are in reality talking $3 billion for the whole Senate, plus the $5 billion for the whole House in that snapshot of time in 2012, for a total of $8 billion.

That makes your Senator a $30 million target, while your representative is a paltry $11.5 million one by comparison.

You could fix 72% of what's wrong with our politics in this country in an instant by repealing the popular election of Senators.

Just undo it. 

Total Market Capitalization to GDP Ratio for the third and final estimate of 2Q GDP

Total market cap on June 30th: $25.0353 trillion

Final estimate of 2Q GDP: $17.3282 trillion

Ratio at the end of June 2014: 1.445

Ratio at year end 1981: 0.480

Ratio at year end 2000: 1.420

Ratio at year end 2008: 0.740

SELL! (imho)

The difference between AIDS and Ebola

AIDS doesn't liquify your internal organs within two weeks of infection.

E.B.O.L.A.

Enjoy Barack Obama's legacy, America.

S&P500 swoon is really not much to date, despite the volatility

The index at 1886.76 is about 6% off the peak reached on September 18.

Down 10% would qualify as a correction, down 20% as a bear market.

It's still a great time to sell! Your Peter Cundill sell markers are roughly S&P500 1900, 1700 and 1500, depending on how much you want to risk losing. 

The dollar closed tonight at 85.19

The 52-week high was 86.746 on October 3. The 52-week low was 78.906 on May 8, just five months ago.

I don't find that big of a move in so short a space very encouraging yet. A stable price at a high level is better. Let's see what it can do.

Gold and oil tonight are fairly valued one to the other

The gold/oil ratio comes in at 14.973, which is effectively par.

Gold is $1239 the ounce, oil $82.75 the barrel.

Bank Failure Friday is back with the fifteenth in 2014 in the state of Maryland

NBRS Financial, Rising Sun, Maryland, failed tonight, costing the FDIC $24.3 million. It is bank failure number fifteen in 2014.

FDIC insured institutions number 6,656 through June.

Amber Vinson was told by CDC she could fly on Monday, on Wednesday CDC tells airline she may have been already symptomatic

Committing malpractice in spades, the Centers for Disease Consumption told the infected Ebola nurse Amber Vinson she could fly on Monday even though she told them she had a fever, reported here:

Vinson told CBS Dallas Fort Worth that she was feeling ill before boarding her flight. She had a low grade fever, but she said that officials told her it was okay to get on the plane. Vinson told CBS that she called the CDC several times with concerns.

Ebola is only contagious when a patient is symptomatic. Vinson's 99.5 degrees Fahrenheit fever wasn't high enough to be considered a symptom.

The CDC confirmed to FOX 4 News that they gave Vinson the green light to fly. "Vinson was not told that she could not fly," a government spokesperson told NBC News.

Vinson's comments contradict remarks made earlier today by CDC Director Tom Freiden, who said that she never should have gotten on the plane.

On Wednesday night, a letter from Frontier Airlines CEO Dave Siegel to airline employees claimed that the CDC had notified the airline that Vinson may have had symptoms while on the flight, The Denver Channel reported. "At 1:55 p.m. MDT (Wednesday) Frontier was notified by the CDC that the passenger may have been symptomatic earlier than initially suspected; including the possibility of possessing symptoms while onboard the flight," the letter said. This would conflict with CDC's earlier statement that she didn't have symptoms of the illness while she was on the flight and didn't start showing symptoms until Tuesday.

Infected Texas Ebola nurse shouldn't have been allowed on a domestic flight, but it's OK for Liberians to travel to the USA

Thomas Frieden, MD, director of the CDC and red diaper doper baby graduate of Oberlin College and Columbia University, quoted here today:

The director of the U.S. Centers for Disease Control and Prevention said Wednesday that a second Dallas nurse who has been infected with Ebola shouldn’t have traveled halfway across the country on a commercial flight the day before she reported her possible illness. New measures are being put into place to ensure that other health-care workers at Texas Health Presbyterian Hospital Dallas who had contact with Thomas Eric Duncan, the first victim of Ebola in the U.S., are restricted from travel as long as they are being monitored for symptoms of the disease, said CDC Director Tom Frieden. “She [Amber Joy Vinson] should not have been on that plane,” Dr. Frieden said to reporters of the health-care worker, who he said had a temperature of 99.5 the day she flew.

But here he was on October 3 arguing for an open border with West Africa:

“Even if we tried to close the border, it wouldn’t work,” the top health official added. “People have a right to return. People transiting through could come in. And it would backfire, because by isolating these countries, it’ll make it harder to help them, it will spread more there and we’d be more likely to be exposed here.”

Oh, but closing borders within the US will work? And people here don't have a right to return home, which is what Ms. Vinson was doing?

If Duncan had never come here, we wouldn't have all these problems in Texas and now Ohio today, and two Americans with infections with a disease which is a death sentence wouldn't have them.

Frieden and Obama should be in jail, where we can limit the infection they spread.

America's engine of credit creation, housing, is still flat on its back despite recovery from the bottom

America's engine of credit creation, new housing starts, is still flat on its back despite a recovery from the bottom. The fact of the matter is, we have recovered TO the historic lows, that is all, to 955,000 annualized through the first half of 2014.

The total level of mortgage liability, a key component of total credit market debt outstanding, the growth of which has hit the wall, has been in steady decline over the period as well. Since 2008 it has declined from peak level at $10.7 trillion then to $9.4 trillion today, down over 12%. In the prior 6 year period, by contrast, total mortgage liability level increased 90% during the so-called housing bubble, and for the 6 year period prior to that 60%.

A second Texas hospital worker is confirmed with Ebola, thanks to Obama's failure to restrict travelers from West Africa

Reported here 45 minutes ago by CNBC.

Duncan died on October 8th. His second victim reported fever yesterday, the 14th.

Stupid Frenchman's solution to American capitalism is to make it even less capitalistic than it already is

He wants to prohibit you from selling "too soon", here:

"[I]f you want to hire someone else to manage your money, whether a mutual fund or a private equity fund or a hedge fund, you have to lock up your money for 15 years."

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Not a word in this guy's story about, for example, soaring corporate stock buybacks, suspension of mark-to-market accounting rules, the recently increased long-term capital gains tax rate, the much higher tax penalty for earning a big paycheck than for profiting from a big stock sale, nor the existence of long and short term gains in the first place, all of which are anti-free-market.

It's a lie that Liberians were denied ZMAPP: three got it and two of them survived Ebola

Reported by ABC here on August 26th, but race-baiters in this country never mention it:

MONROVIA, Liberia – Two African health workers who received doses of the experimental Ebola drug ZMapp are set to be discharged from the hospital later this week, a Liberian health official told ABC News today. Three African health workers — two African doctors and one physician’s assistant — received the drug after contracting the virus earlier this month, according to Dr. Moses Massaquoi, who heads Ebola case management at Liberia’s health ministry. Though they were all showing signs of improvement at first, one of the doctors died on Aug. 24. He also had diabetes and hypertension, Massaquoi said. The remaining two patients improved soon after receiving the first of three doses of ZMapp — a cocktail of three antibodies meant to attack the virus. They are expected to be discharged on Friday.

Obama's illegal immigrant children brought in enterovirus 68 this summer, and now American children are dying from it

Reported here:

A 21-month-old girl is the first in the state of Michigan and second in the U.S. to die this year from a strain of the enterovirus that has infected more than 500 people across the nation, health officials said on Saturday.

Madeline Reid, who was stricken with Enterovirus D68(EV-D68), passed away late on Friday while being treated at the Children's Hospital of Michigan in Detroit, hospital officials said in a statement. ...

More than 500 people, mostly children, in 43 states and the District of Columbia have been infected with EV-D68 since mid-August, according to the U.S. Centers for Disease Control and Prevention.

This week, the CDC said that a 4-year-old Eli Waller of New Jersey, who went to bed last month in seemingly good health and died in his sleep, was the first fatality linked directly to the strain of the virus.

Aside from Reid and Waller, at least four others infected with Enterovirus D68 have died this year, although the CDC said it is unclear what role the virus played in their deaths.

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But of course it's a lie that only 500 have been infected. Over 900 patients were seen in Colorado alone during the end of the summer season suddenly presenting with symptoms caused by the virus. And the article elsewhere tries to make it sound like the particular strain is common in the US when it's not.

We are being systematically lied to by the CDC, Obama, the IRS, the State Department . . ..

Outrageous race-baiter Robin Wright for CNN won't tell you Duncan got brincidofovir

People like Robin Wright belong in the dustbin of history along with Obama.

Here she is insinuating Duncan the Dallas Ebola victim didn't get treated like a white person would be:

Louise [Duncan's girlfriend] refused to allow her last name to be used for fear of repercussions. Unfortunately, doctors and the pharmaceutical developer said there was no longer any ZMapp left for Duncan or any other victim. But the imagery that accompanied his plight lingers: Whites can be flown to the United States or Europe at any expense, while Africans are left to die unattended on the streets of Liberia or Sierra Leone. Or now, without ZMapp, in Dallas.

But the Associated Press reports here that doctors did everything they could for Duncan, including giving him experimental drugs from North Carolina, with the FDA's blessing:

Just after midnight Oct. 4, Duncan went into multiple organ failure. By morning, a shipment of brincidofovir arrived and Duncan got the first dose.

Ebola is just the symptom: Obama is the disease

Texas hospital employee gets Ebola: Obama should be assigned to her nursing team instead of to the presidency

VGPMX at 9.63 hasn't been this cheap since 2003

The 2009 low was 9.73.

The thing is, the historical low water mark for this sector fund, which is a stock fund not a pure metals fund, was in August 1998 at 5.05. You could really lose your shirt in this fund even at this bargain price. I'd look for a broader stock market correction than the current 5% before I even thought about it more seriously.

On January 2, 2002 this fund was at 8.56. Following the Peter Cundill rule, you would have sold your entire initial investment in this fund at that price by late 2003 and recouped it because it would have doubled already at 17.12. (Often the easy money is made quickly off the lows, but it did take until February 2002 for the 5.05 price to double to 10.10, not quite four years.) The all-time high for this fund at 40.02 in May 2008 did not come until almost five years later.

US Federal Reserve continues to fail against deflationary headwinds

Bloomberg reports here:

The Fed needs a clear strategy for getting the inflation rate higher after falling short of its 2 percent target for 28 consecutive months. ...

Prices fell 1.2 percent for the 12 months ending in July 2009, when the economy had just exited the recession, according to the inflation measure the Fed uses, the personal consumption expenditures price index. Unemployment that month was 9.5 percent. Since Fed officials first published their inflation target in January 2012, the index has averaged 1.5 percent. ...

The 2 percent inflation objective first appeared in a January 2012 statement on longer-run policy goals, and has been restated each January since. The statements say nothing about tactics for returning inflation to 2 percent over the medium term.


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The all-items consumer price index shows the same thing, with the average of the annual average change at just +1.59% for each of the five years 2009-2013. In the most recently completed year, 2013, the change from 2012 was just +1.46%. And year over year on August 1, 2014, the change has been just +1.69%.

Despite a balance sheet for all Federal Reserve banks which appears to have peaked at $4.459 trillion on September 24th as QE prepares to end and excess reserves only slightly off peak at $2.677 trillion, inflation is slim to none in this economy, and slim just left the building.

In point of fact, these numbers are nearly meaningless in the face of the real deflation in the economy, which has nothing to do with prices but with credit. Total credit market debt is hardly expanding at all. Compared to the post-war record, where credit creation has doubled on average about every eight years, we have hit a brick wall since 2007.

At that time total credit market debt outstanding stood at $50 trillion. Seven years later it is barely $57.5 trillion, and there isn't a snowball's chance in hell that next year it will be at $100 trillion or anywhere close to that.

What we are witnessing is the unraveling of the post-war credit based economy, and no one seems to have a clue how to fix that, least of all the US Federal Reserve.

The irony: The Arab street views the Christian West as as anti-capitalist as itself

From Hernando de Soto, here:

For the poor in many Arab states, it can take years to do something as simple as validating a title to real estate. At a recent conference in Tunisia, I told leaders, “You don’t have the legal infrastructure for poor people to come into the system.” “You don’t need to tell us this,” said one businessman. “We’ve always been for entrepreneurs. Your prophet chased the merchants from the temple. Our prophet was a merchant!” ...

All too often, the way that Westerners think about the world’s poor closes their eyes to reality on the ground. In the Middle East and North Africa, it turns out, legions of aspiring entrepreneurs are doing everything they can, against long odds, to claw their way into the middle class. And that is true across all of the world’s regions, peoples and faiths. Economic aspirations trump the overhyped “cultural gaps” so often invoked to rationalize inaction.

As countries from China to Peru to Botswana have proved in recent years, poor people can adapt quickly when given a framework of modern rules for property and capital. The trick is to start. We must remember that, throughout history, capitalism has been created by those who were once poor.

News flash: most women in southeast Michigan want peters

Don't they everywhere?

Moochelle flubs Braley name in Iowa stump speech six times, Terri Lynn Land in Michigan ripped for similar number of mentions that she's a mom

Politico, here:

After calling him “Bruce Bailey” at least five or six times during her remarks at a campaign event, even directing people to ‘vote.BruceBailey.com,’ an audience member eventually corrected the first lady.

Breitbart, here:

“In case you were wondering, @TerriLLand mentioned she's a mom with kids six times during the #MICalling show,” Chad Livengood, a reporter for the Detroit News, tweeted.

The Faggot States of America (in passionate purple)

Notice that the non-gay-marriage states are all in yellow, the color of cowardice, as in homophobia.

Americans have been content to keep over $1 trillion in checking accounts for the last year

Or should I say they have been desperate, because they have been earning nothing on it? The feeling before August 2008 going back all the way into the 1970s, thirty-five years!, meant Americans felt comfortable with 3 to 4-times less cash on hand for immediate withdrawal. The panic of 2008 continues.

Net balances first moved above $1 trillion in October 2013, but notably have surged to that level since August 2008 out of all proportion with the historical record. 

Supremes let stand lower court rulings overturning state marriage laws, Rush Limbaugh misreports it

Rush Limbaugh opened the show today incorrectly saying the Supremes' ruling sent the matter back to the states when in fact allowing the lower court rulings to stand effectively validates the power of lower courts to strip the states of the power to define marriage for themselves. Someone in the office evidently told Rush he got it exactly backwards, and now he's been spending a few minutes correcting himself and beating a trail to put the focus on matters which are trivial by comparison, like the liberals' hypocrisy in ignoring Joe Biden's most recent offensive gaffes.

Combined with John Boehner's recent funding of openly gay GOP candidates, it is clear that real conservatives no longer have a home in the Republican Party, which is repudiating its former support for such laws in the states, and neither do they have a voice on the Rush Limbaugh radio program.

Conservatives who intend to vote for Republicans next month, or Democrats or libertarians for that matter, should have their heads examined, and their souls exorcised.

I didn't leave the Republican Party, the Republican Party left me

Temperature anomaly for Grand Rapids, Michigan, through September 2014 rises to -27.0 degrees F

The September temperature anomaly for Grand Rapids, Michigan, came to -0.7 degrees F. Added to the cumulative anomaly of -26.3 through August, the annual anomaly through September now totals -27.0 degrees F. That's an average to date of -3.0 degrees F per month.

Hahahahaha: Obama decries income inequality after $50k/plate fundraiser

h/t John Kass

The New York Times speaks out against free-trade

Here:

Since the 1970s, economic orthodoxy has argued for low tariffs, free capital flows, elimination of industrial subsidies, deregulation of labor markets, balanced budgets and low inflation. This philosophy — later known as the Washington Consensus — was the basis of advice the International Monetary Fund and the World Bank gave to developing countries in return for financial help. The irony is that during the Industrial Revolution, today’s rich countries — Britain, France and the United States — pursued the very opposite policies: high tariffs, government investment in industry, financial regulations and fixed values for currencies. Trade expanded, and capital flowed anyway. ... Nations that have ignored the nostrums of the Washington Consensus — China, India and Brazil — have grown rapidly and raised their standards of living. Improvements in poverty and inequality occurred in Latin America only in the 2000s, after the I.M.F. and the World Bank reduced their grip on those nations.

46,486,434 Americans received food stamps in July

The figure is down 2.4% from a year ago, according to the report released today.

11.2 million fewer people contribute to the economy today than in 2007

You'll have to do the math.

Rick Newman, here:

... there are still more than 16 million Americans who are unemployed or working less than they want because they can’t find a good full-time job. That’s 4.2 million more than in 2007.

Many others have dropped out of the labor force, which shows up in the numbers as a 3.3 percentage point drop in the participation rate since 2007. That might not seem like a big number, but it represents something like 7 million people who would be working or looking for work if they hadn’t dropped out. Combined with all the unemployed and underemployed, that’s a lot of people who are contributing less to the economy than they would have in a 2007 scenario.

The other big bummer is hourly wages, which have barely risen since 2007 when factoring in inflation. And that’s just for people with jobs. If you included people who used to have jobs but no longer do, the earnings number would be negative, which is why median household income is still far below where it was in 2007. That means people with jobs are barely staying even with inflation, on average, while the ranks of the economically distressed have swollen significantly.

Dallas Ebola vomit wasn't cleaned off the sidewalk for four days, and then improperly

Meanwhile, things Duncan contaminated filled 140 barrels.

The UK Telegraph, here:

Q: Was the ambulance trip to hospital handled properly?

A: On Sept 28 [Sunday] the daughter of his girlfriend brought Duncan tea in bed and found him shivering and sick. An ambulance was called. When it arrived neighbours witnessed him vomiting on the ground outside the apartment as he was placed in the emergency vehicle. No extra precautions were taken for the ambulance ride despite the fact he was Liberian and showing possible symptoms of Ebola. The ambulance was used for another 48 hours before being taken out of service. After his eventual diagnosis the three ambulance workers were told to stay home until they get the all clear. Meanwhile, it took until Thursday for workmen ... using high-pressure water jets and bleach to clean the area outside the apartment where he had been sick.

Unemployment drops to 5.9%, September jobs added were 248,000

Jobs are being added at the rate of 213,000 per month in the prior twelve months according to the report from the BLS (In 2013 population increased 187,000 per month). The average workweek is up .1 to 34.6 hours. Average hourly earnings were down a penny to $24.53. Those working usually part-time are 900,000 fewer in number than at the peak first reached in March 2010. Those working usually full-time are 3.4 million fewer in number than in the peak year of 2007. People working part-time but who want to be full-time are 2.6 million more in number than in the same month in 2007. The percentage of the population working, after falling dramatically after the election of Obama in November 2008 from 61.6 to 57.6 by January 2011, remains subdued at 1973 levels, at 59.1%.

How to sell the S&P500 in a bull market using the "Cundill" sell point

The Peter Cundill Sell is the principle that you sell half of your investment once it doubles, recovering 100% of the principal you risked. 

Assume you invested at the last S&P500 closing low, which was on March 9, 2009, at S&P 500 676.53. You multiply times 2 = 1,353.06, and sell half your holdings when the S&P500 rises to that level, according to the idea.

But the S&P500, for example, hit that level way back on April 27, 2011 at 1,355.66. So you doubled your money a long time ago, sold half your stake and recouped your entire principal. But then what? Cundill thought you were free to do anything with the remaining amount invested (which are the profits). The principal has to be reserved for another doubling opportunity.

What would a conservative bet with just the profits have meant from there?

Say you were to wager that the S&P500 would increase not 100% more as before, but only 25% more, because the S&P500 would have to hit 2706.12 to do the former. You are not greedy, just optimistic, you say. Is that a conservative plan? Maybe compared to what has just happened since 2009, but not really, because since 1970 the median annual return only has been north of 12%, half as much as that.

So you decide to let the profits ride, hoping for just an additional 12% on the index going forward. Here are the milestones of 12% from 1,353.06 up to today's current market level (1,949) at each of which you presumably sold half of your stake, gradually exiting the market and its growing risk:

1515.43 (February 2013)

1697.28 (July 2013)

1900.95 (May 2014).

An initial $10,000 invested this way made you $10,000 by April 2011 (not counting dividends).

The remaining $10,000 made you $1,200 by February 2013.

The remaining $5,600 made you $672 by July 2013.

The remaining $3,136 made you $376 by May 2014.

Since then you've had only $1,756 riding the market, making an additional 2.5% to date, or an additional $44. Total made: about $12,292 nominal. And you sell today.

By way of contrast, the buy and hold investor over the same period is up about $18,700, assuming he bought in low like you did and sells . . . TODAY. But trust me. He didn't buy low. And he won't sell today, tomorrow, in time to escape the correction, or any other time. He'll just ride it on down right past the 35% down marker at which point he'd begin waving up at you as he's headed lower. 

Jobless claims in September, not seasonally adjusted, have averaged just 236,000 weekly

Jobless claims in September have now averaged just 236,000 weekly as of this morning's report, the equivalent of an annual rate of just 12.3 million first time claims for unemployment.

Claims in August had averaged 253,000 weekly, down over 18% from July's 310,000 weekly. The average for the whole first half of the year was 326,000 weekly, so the current low level well below 300,000 sustained for two straight months is very welcome news at least for job holders.

With claims averaging 266,000 weekly at midpoint in the second half, it is conceivable that total claims in 2014 could come in under the 16 million mark, which would beat the best performance for initial claims achieved since 2000 (under George Bush). That will require claims averaging no more than about 310,000 weekly for the last three months of 2014. The last two months show that that low level is possible.

Stock futures a half hour after the report are nonplussed.

At 10.01 VGPMX is tonight again below the March 2009 low of 10.04

Vanguard Precious Metals and Mining is looking attractive once again, revisiting the territory of December 2013 when the fund briefly dipped below 10.00 to 9.69 or so. If a real stock market correction of 10% or more makes an appearance at long last, I'd expect the fund to fall in price quite a bit more, this sector fund being a stock fund. A stock market bear of 20% or more might actually take the NAV much lower, with the vicinity of 5.00 being not inconceivable.

ABA survey finds internet banking declines from 39% of customers in 2013 to 31% in 2014

Branch banking is up from 18% of customers in 2013 to 21% this year in the survey even as the number of branches has fallen back to 2006 levels, at 94,715.

Reported here.

Obama's 2014 #LIEOFTHEYEAR?

Obama quoted here, in National Journal, September 16th, 2014, two weeks ago, before the first US Ebola outbreak, reported today:

Obama said Tuesday that the outbreak is "a potential threat to global security, if these countries break down," yet said that the chance of an outbreak in the U.S. is unlikely.

Liberal hubris two months ago about Ebola virus may mean death for many Americans

Flashback to late July when you were on the beach. At the time the mendacious CDC said Ebola wouldn't spread "widely" in the US, not that it wouldn't get here, and you went on with your novel and your drink (dateline NBC here):

“It is not a potential of Ebola spreading widely in the U.S. That is not in the cards,” Frieden told reporters on a conference call. “We are not telling people who are essential to leave.” ... “This is a tragic, painful, dreadful, merciless virus. It is the largest, most complex outbreak that we know of in history,” Frieden said. “We at CDC are surging our response along with others. Although it will not be quick and it will not be easy, we do know how to stop Ebola.” ... “We have quarantine stations at all the major ports of entry,” he said. People cannot transmit Ebola to others unless they are sick, and Ebola makes you so sick that it’s pretty obvious pretty quickly, Frieden said. A traveler will be flagged by the flight crew and if someone gets sick after arrival in the U.S. they will almost certainly seek medical care. “Ebola poses little risk to the U.S. general population,” Frieden said. “Ebola is spread as people get sicker and sicker. They have fever and may develop serious symptoms.” Ebola doesn’t spread through the air like measles. People who get sick are family members or healthcare workers in prolonged and close contact with victims. ... “This is a marathon, not a sprint,” he said. “This is going to take at least three to six months, even if everything goes well.”

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If they knew how to stop Ebola, then why is it here two months later? Maybe because liberals couldn't get past their first ideological barrier: their commitment to the idea of world citizenship and thus of nations without borders and of free travel between them. Kind of reminds me of free trade, which has infected America with a disease known as unemployment and underemployment.

Stopping the spread of deadly viral disease requires restrictions on international travel, and contact tracing by every doctor, two things no longer routinely practiced in America nor supported by the health authorities. The latter has been considered "discriminatory" since the AIDS epidemic in the 1980s. And while AIDS has been more or less contained in the US for other reasons, sexually transmitted disease has not. Half the population carries one.

Your doctor is most likely part of the problem, not part of the solution.

US oil refining capacity is mismatched for our boom in light, sweet crude

So we either expand that capacity, or lift the 1975 ban on oil exports. Obama's decision to do nothing except take credit for production from private lands suggests he wants the oil boom to end.

Robert Samuelson, who has basically concluded elsewhere that Obama is lazy, in addition to being phony, tiny and small, here:

"The new oil consists mostly of "sweet, light" crudes, meaning they have a low sulfur content and are less dense than "sour, heavy" crudes. The trouble is that many U.S. refineries have been designed to process heavy, sour crudes and, therefore, aren't suitable for the new oil. At the end of 2013, the United States had 115 oil refineries capable of processing about 18 mbd, according to a report from the Congressional Research Service. About half were fitted for sour and heavy crudes. That's especially true along the Gulf of Mexico coast where more than half of U.S. refining capacity is located.

"The result is that more and more new oil is chasing less and less usable refining capacity. Refineries' bargaining power rises. Producers have to accept price discounts to sell their oil. A second problem is that much of the new production is located in North Dakota with an inadequate pipeline network to transport the crude to refineries. To offset more costly barge and rail transportation, producers (again) have to discount prices.

"Some strains will be eased by refinery expansions and new pipelines. How much is unclear. But as a report from the Brookings Institution argues, producers will be discouraged by an oil market that seems rigged against them. They will react by slowing -- or possibly stopping -- new exploration. The oil boom will ebb or end. Global oil supplies will then be lower than they would otherwise be; prices will be higher. It's a bad outcome for the United States but a good one for Russia, Iran and other producers hostile to us."

The US Dollar Currency Index, .DXY, is up 8.26% since May 6th: Expect pressure on 2nd half GDP from rising imports

Bush GDP vs. Obama GDP, same point in their presidencies

GDP under George W. Bush 5.5 years into his presidency was up nearly 35% nominal. Under Obama GDP is up nearly 18%.

Based on that, evidently, Time Magazine's Rana Foroohar is calling Obama's a 3% economy, without mentioning that Bush's was a 6% economy, nor that these figures are nominal as opposed to the generally reported real, inflation-adjusted numbers, here (it's two ways of making the present less intelligible, not more):

"But we’re now in a 3% economy, and I’m writing the same column [as three years ago]. Only this time, the message is more disturbing. Growth is back. Unemployment is down. But only a fraction of the jobs lost during the Great Recession that pay more than $15 per hour have been found. And wage growth is still hovering near zero, where it’s been for the past decade. Something is very, very broken in our economy.

"It’s a change that’s been coming for 20 years."

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Yes, wage growth has been flat since 2000. The difference is we still had our higher paying jobs with flat wage growth under Bush, but not now. But that, too, is only nominal. Add in inflation and we are 5.9% behind where we were in 2000, and Obama has done nothing to fix that, either. In fact, it got worse since the so-called recession ended in 2009, 3.1%. And dialing the blame back 20 years to further muddy the waters puts us in year two of the Clinton administration, when Clinton famously broke his promise and raised everyone's taxes, which precipitated one of the biggest and deepest waves of home equity borrowing ever to maintain disappearing lifestyles, helping to gut the basis of the American dream.

But that's not mentioned, either.

That's a lot for a financial journalist not to mention.

2Q2014 GDP, third estimate, comes in at 4.6%, 1Q still -2.1%

The third estimate of 2Q2014 GDP comes in at 4.6%, up from 4.2% a month earlier, mostly on revisions to exports and nonresidential fixed investment. Subtract 1.4 points for inventories and you've basically got 3.2%. Not too shabby but not gangbusters like it ought to be at this stage of the game.

Recall, however, that the export picture in 2Q reflects a dollar index trading in the range of 79, whereas the index has been on a tear since mid-July, marching upward beyond 85 today thus making exports very pricey in 3Q compared to then, portending rough news ahead on that front. Exports of goods are running at about $1.6 trillion nominal annualized in 2Q vs. $1.5 trillion a year ago. Imports of goods, however, which subtract from GDP, still swamp our exports by $800 billion net annually and are also up $100 billion year over year at $2.4 trillion nominal annualized in 2Q. To put that $800 billion in context, consider that total nominal GDP year over year is up only $700 billion. Think what we could be if we were an export powerhouse once again.

The Current Asset Allocation of The United States

Allocated to bonds of all types, through 2Q2014:   $38.17 trillion.

Allocated to stocks (current Wilshire 5000 X 1.2): $25.46 trillion.

Allocated to cash (MZM):                                               $12.72 trillion.

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Total:                                                                        $76.35 trillion.

That's 50% to bonds, 33% to stocks, and 17% to cash.

The trend since 2010 has been away from bonds at close to 59% to 50% now, mainly into stocks, while amounts allocated to cash have increased the percentage just a few points.

Total World Stock Market Capitalization Through 2012 Remains 17.5% Below The 2007 Peak

According to The World Bank, here.

Nigel Farage: The West is encroaching on Mr. Putin's space

"We should be viewing Ukraine as a buffer between East and West."

Interviewed here.

Freedom for me, but not for thee?

HEY HO LETS GO

Best reason yet to vote for Terri Lynn Land for US Senate from Michigan

Her Democrat opponent has been endorsed by former Republican governor, William Milliken. To moderate Republicans, like Milliken, compromising with Democrats is always more important than advancing the issues which matter to their constituencies. Republicans who vote for Peters are Republicans in name only.

Mish finally figures out why the part-timing trend caused by ObamaCare doesn't show up in the stats . . . yet

Here:

The BLS defines part time as less than 35 hours. Low wage industries had a lot of part-timers working 32 hours.

Under Obamacare, the threshold of part-time jobs is 30 hours. Obama made that change on purpose to force more businesses to offer healthcare. 

Instead, busiunesses [sic] cut hours. It was the hours of the already part-timers that got cut, and that explains why there was no spike in part time employment.

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Average hours worked overall isn't affected much by part-timers getting their hours cut, since the part-time portion of the workforce is so small to begin with, about 18%.

On an average annual basis, however, average hours worked overall haven't made it above the 35 hour full-time threshold since 1984. Larger forces have been at work to drive average hours down, mainly social revolution leading to the addition of large numbers of women to the workforce in the 1970s, but also a free trade revolution leading to offshoring of manufacturing. The libertarian rout of America has been terrible for its workers.

The verdict on what ObamaCare may do to hours is still not in, however, and won't be for many years because so much of its implementation has been delayed by the regime itself, notably the employer mandate. For large firms mandates do not kick in until 2015, and for medium size firms 2016. 

Food stamp recipient level up 0.6% in June 2014

46,496,145 million Americans received food stamps in June 2014. The level remains down from a year ago, now by 2.6%.

The total cost in June was $5.77 billion.

For the years 2010 through 2013 the average monthly benefit per person has been $133 and change.

Brother, can you spare a dime?

Richard Duncan gets creditism wrong three ways

Richard Duncan gets creditism wrong three ways here for The Daily Reckoning last July in "Creditism and the Threat of a New Depression".

The most egregious error occurs right in the opening paragraph:

"Once we broke the link between dollars and gold, all the constraints on how much credit could be created were removed."

This is simply untrue, for two reasons.

One: Total credit market debt outstanding (TCMDO) has been doubling like clockwork in the post-war every six to eleven years, both prior to 1971 and after. The doubling of TCMDO occurred at its fastest pace -- two episodes of six year doubling times -- under Jimmy Carter and Ronald Reagan, five years after the close of the gold window in 1971. Otherwise the doubling has never taken as much as twelve years, whether before 1971 or after.

And two: 1971 is irrelevant. It was not the end of the gold standard. The gold standard ended under Roosevelt. In fact, the close of the gold window under Nixon was the first patriotic act with respect to gold by an American president since Roosevelt. With the stroke of a pen, Nixon single-handedly stanched the outflow of America's gold reserves, which had dwindled under Democrat and Republican presidents alike from 20 tonnes to 8,134 tonnes.

Secondly, because Duncan doesn't understand just how often TCMDO has been doubling in the post-war, he completely misses its needed and now missing rate of growth, and the accompanying fact that under normal circumstances of creditism in the United States, TCMDO ought to be at least $81 trillion by now instead of $59 trillion:

'But at this point, the question is will credit ever begin to grow again enough to drive the economy? We now have such a large base, 59 trillion dollars. If we assume that the inflation rate is two percent, then we need total credit to grow by four percent so that total credit, adjusted for inflation, will hit this “two percent recession threshold”.'

The last time TCMDO doubled in the post-war was in 2007, at $50 trillion. At the slowest pace of its actual growth in the post-war, it should hit $100 trillion by 2018. We aren't going to make it. It is shocking that a former head of equity research for Salomon Brothers is so completely unfamiliar with the Rule of 72. When something doubles in six years, the implied annual rate is between 11% and 12%. When something doubles in eleven years, the implied annual rate is 6%. 4% isn't going to cut it, buddy, and the current rate between 1% and 2% is truly catastrophic by all historical norms.

Thirdly, because Duncan hasn't properly imagined our past, the future also eludes him:

"If you look at all the big sectors of the economy, there are just a few of them. You can see that none of them are going to expand their debt enough to make total credit grow by two percent."

That's right in its way. There is no sector currently capable of driving credit expansion as it did in the past. And the reason is because it was mostly housing in the past which drove the borrowing, and housing is effectively dead for such purposes now because of the way greedy Baby Boomers, whether as homeowners or bankers, fiddled with it to plunder the equity stored there or drive securitization. The effect has been to gut the basis of Americans' wealth and poison the balance sheets of the banking system.

The way out of this mess is so filled with trouble that it is little wonder neither John McCain, Mitt Romney, Hillary Clinton nor Barack Obama have made fixing it a priority. It is the glaring need of our time, a Goliath with no fear of a David anywhere. It is why the economic meltdown remains the leading story of our time. It is why our other over-commitments will be our undoing. Until we settle it upon a firmer foundation as was done in the 1930s, or find a different, surer basis for economic growth, many decades of economic shrinkage await, not just one or two:

"If this collapses now, we’re going to have an equally protracted crash, and it’s not going to be a matter of taking a pain for a couple of years. The consequences of it would, I think, be a replay of the 1930′s and the 1940′s, but this time with nuclear weapons involved."

Employment Situation report records 142,000 added to payrolls in August vs. 212,000 monthly in past year

That's a 33% decline in one month in the pace at which jobs have been added monthly in the last year.

From the report, here:

Total nonfarm payroll employment increased by 142,000 in August, and the unemployment rate was little changed at 6.1 percent, the U.S. Bureau of Labor Statistics reported today. ... Total nonfarm payroll employment increased by 142,000 in August, compared with an average monthly gain of 212,000 over the prior 12 months. In August, job growth occurred in professional and business services and in health care. ... The change in total nonfarm payroll employment for June was revised from +298,000 to +267,000, and the change for July was revised from +209,000 to +212,000. With these revisions, employment gains in June and July combined were 28,000 less than previously reported.

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Meanwhile, hours have been flat for six months at 34.5 and hourly wages climbed at a 2.1% annual pace, meaning there is little sign of an uptick in inflation in labor costs.

Those who work usually part-time declined slightly below last year's summer nadir, another sign ObamaCare is NOT part-timing workers . . . yet.

Those who work usually full-time rose to their summer peak to just over 120 million, but this measure is still 3.1 million off the summer 2007 peak, SEVEN years ago.

The labor participation rate came in at 63.0%, not seasonally adjusted, a level we thought we had said goodbye to permanently in the mid-1980s. The level was first achieved in 1976 in the post-war.

The pace of job creation under Obama remains well below the rates under Reagan and Clinton.

CNBC's headline expectation of "likely" job growth collides with banner indicating terrible August payrolls miss of nearly 37%

Temperature anomaly for Grand Rapids, MI in 2014 falls to -26.3 degrees F through August

This updates the previous post here.

The August 2014 temperature anomaly for Grand Rapids comes in at +0.2 degrees F, which lifts the total temperature anomaly for the eight months January through August from -26.5 to -26.3.

Eleven days with high temps of 80 or above in the second half of August helped turn the anomaly positive from -1.4.

The average anomaly per month has been -3.2875 degrees F. 

Jobless claims in August fall to 253,000 weekly on average

Jobless claims have fallen in August 2014 to 253,000 weekly on average, not seasonally adjusted. The rate is equivalent to 13.1 million claims annually, a very low level. The level averaged 280,000 weekly in August 2013, equivalent to 14.6 million annually, meaning the current month is an improvement of 10% from one year ago.

Last month the average weekly level was 310,000 first time claims for unemployment, and in the first half of the year claims averaged about 326,000 weekly. So with the first two months of the second half of 2014 coming in well below that, the trend remains very positive, but it should be remembered that summer is peak full-time employment season and that many of the seasonal jobs will drop off with the start of the school year.

PIMCO's Bill Gross wakes up to the wall hit by TCMDO, but not fully

Others saw this in April 2013.

Here's Bill Gross in September 2014:

The current outstanding total [credit] approximates $58 trillion and has been expanding at an average annual rate of 2% for the past five years, and 3.5% for the most recent 12 months. Put simply, if credit needs to expand at 4.5% per year, then the private and public sectors in combination must create approximately $2.5 trillion of additional debt per year to pay for outstanding interest. They are underachieving that target in the U.S., which is the reason why GDP growth struggles at 2% real or lower and nominal GDP growth seems capped at 4.5% or lower. Credit creation is essential for economic growth in a finance-based economy such as ours. Without it, growth stagnates or withers.

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What Bill Gross doesn't seem to appreciate is the gravity of this slowdown historically to total credit expansion of just $1.14 trillion annually. TCMDO, total credit market debt outstanding, in the post-war DOUBLED every 6 to 11 years until 2007. That implies that normal credit expansion until 2007 was between 6% and 11% PER ANNUM. At 8.5%, an average level, TCMDO should grow well in excess of $4 trillion annually at these levels. 4.5% isn't going to cut it. And the actual 2% or even 3.5% is a catastrophe compared with the historical record.

By 2013, according to historical norms, TCMDO could have already reached $100 trillion if it matched the fastest pace on record under Jimmy Carter and Ronald Reagan. Instead it's stuck at $58 trillion in 2014.

The system has hit the wall. Decades of economic shrinkage, to borrow Chris Whalen's phrase, lie ahead, and we're already in the first one.

Incidentally, nonfinancial corporate debt has grown on average $567 billion annually between 2010 and 2014, accounting for about 50% of the average increase in TCMDO. And in 2013, corporations bought back something like $600 billion worth of their own stock. 

The broad US stock market presently is valued 58.5% higher than at the end of 2002

At the end of 2002, the Wilshire 5000 (x 1.2) divided by the nominal GDP for the year stood at 0.912. As of June 30, 2014, the same calculation yields 1.446.

You have been warned!

Total Market Capitalization To Nominal GDP Ratios, Selected Years

I have used the Wilshire 5000 level at year end multiplied by 1.2 as a proxy for total stock market capitalization (except where noted by the month), and the latest summer revisions for calendar nominal GDP, in summer 2014 for the period back to 1999, and in summer 2013 for the period back to 1971.

A ratio close to 1.0 indicates the market is fairly valued relative to GDP. A ratio less than 1.0 indicates the stock market is "on sale" to some extent (for example, a ratio of 0.48 indicates the market is trading at a 52% discount). A ratio of more than 1.0 indicates the stock market is expensive and may be considered overvalued for investment purposes (for example, a ratio of 1.72 indicates the stock market is as much as 72% too expensive).

1971   .975

1981   .480

1987   .595

1990   .622

1994   .745

1997 1.296

1999 1.715
2000 1.420
2001 1.209

2002   .912

2003 1.125
2004 1.170
2005 1.147

2006 1.234

2007 1.228

2008   .740

March 2009   .676

2009   .962

2010 1.071

2011 1.019

2012 1.113

2013 1.410

March 2014 1.407

June 2014    1.446

Historically considered, valuation of the stock market by the end of 2008 made then a much better investing opportunity than was late 2002 and early 2003, almost 20% better. And valuations have remained reasonable throughout 2010-2012 and only became expensive in 2013. The four year period beginning in late 2008 has been an excellent opportunity for those with cash to invest.

I maintain that a primary driver of conditions in 2013 was the midnight hour 2012/2013 resolution of tax uncertainty, in the form of making the Bush tax cuts and alternative minimum tax rates permanent, ending the tinkering with Social Security, and reaching a compromise on capital gains tax rates.

All hail John Boehner.

Brad DeLong believes we are in a depression

And calls it the true name for what we are experiencing, here.

Market capitalization to GDP for 1999, before the August 2000 high and subsequent crash

The Wilshire 5000 level at the end of December 1999 was 13,812.7. Multiplied times 1.2 yields a total market capitalization of $16.57524 trillion.

Nominal GDP for 1999 was $9.6606 trillion according to the latest figures from the BEA.

The former divided by the latter yields 1.72.

The ratio through March 2014 is 1.41.

The ratio through June 2014 is 1.45.

Rush Limbaugh says Rutgers survey which mentions Obama 5 times never mentions Obama while blaming Bush!

Ah . . .  no.

The survey never mentions Bush, mentions Obama 5 times, and two of those times are in questions from the actual survey. See for yourself here.

Rush Limbaugh transcript here . . . not just reliably getting it wrong, but lying about it. No wonder people are pessimistic about the future.

Dim bulb Rush Limbaugh doesn't know what an L.E.D. is

Transcript here.

Does anyone really know what is the level of stock buybacks?

The LA Times reported yesterday here that the level was $598 billion in 2013.

But The Washington Post reported last December here that is was $754 billion, not counting a big buyback announced by Boeing.

How do they know?

2Q2014 GDP, second estimate, at 4.2% vs. 4.0% in advance estimate and -2.1% in 1Q2014

If today's report of GDP holds up in the final estimate of 2Q2014 GDP about a month from now, Obama will have racked up just three quarters in his entire presidency with prints in the fours:

4Q2011  4.6%

3Q2013  4.5%

2Q2014  4.2%.

Here's Obama's full record incorporating the latest annual revisions from bea.gov at the end of July and the annual revisions from the summer of 2013:

2009: -5.4, -0.4,  1.3,  3.9

2010:  1.6,   3.9,  2.8,  2.5

2011: -1.5,   2.9,  0.8,  4.6

2012:  2.3,   1.6,  2.5,  0.1

2013:  2.7,   1.8,  4.5,  3.5

2014: -2.1,   4.2.

Average report after 22 quarters: 1.7%.

Pathetic!

Congressional Budget Office quietly predicts 1.5% real 2014 GDP one day before BEA.gov announcement

Is 2Q2014 GDP of 4% just a memory?

The Canadian Broadcasting Corporation (!) had the story here:

"The Congressional Budget Office on Wednesday forecast that the U.S. economy will grow by just 1.5 per cent in 2014, undermined by a poor performance during the first three months of the year."

Why S&P500 2000.02 isn't the all time high

Because adjusted for inflation the August 2000 high was 2048.10, so we remain 48.08 points away from the all time high, or another 2.3%.

S&P500 makes historic close above 2000 yesterday

The housing riot: Average time in mortgage delinquency is 2.7 years nationwide, 4 years in New York State

Lawlessness and mayhem isn't just for po folk in Ferguson, Missouri, where law enforcement was overwhelmed by the bad actors doing millions of dollars in damage on the streets. Same goes for freeloaders in judicial mortgage states like New York where the authorities do not have the capacity to deal with the widespread problem of non-payment.

From Michael Sincere, here:

Millions of homeowners are already seriously delinquent. “The average length of time that houses remain delinquent nationwide is 995 days,” [Keith] Jurow says. “The worst culprit is New York State. The average delinquency period there is four years.” Many homeowners are aware that banks are not in a rush to file foreclosures, so they stay in their houses mortgage-free. “The banks are not initiating foreclosure proceedings because once the servicer forecloses, the lender takes a hit on earnings,” Jurow says. “They also have to manage the property, and most banks don’t want to do that.”

Postmodernism at The Atlantic, continued, where the seven-day week is completely man-made

What's completely man-made is this account of the week, "Where the Five-Day Workweek Came From", in which long observation of four lunar phases of 7.4 days in length over millennia means nothing to an architect, who is, fittingly, cited as an authority, as in architects making stuff up.

The author, one Philip Sopher, an economics graduate from Princeton who should know his dates better, is completely ignorant of the Julian calendar reform of the Roman market day cycle of eight days to the more natural seven, which together with its other changes in 46 BC helped remove ever after in the West, not add, deliberate human meddling with the calendar, a common problem at the time of Caesar, here:

“Seven days,” wrote Witold Rybczynski in the August 1991 issue of The Atlantic, “is not natural because no natural phenomenon occurs every seven days.” The year marks one revolution of the Earth around the sun. Months, supposedly, mark the time between full moons.  The seven-day week, however, is completely man-made.

If it’s man-made, can’t man unmake it? For all the talk of how freeing it’d be to shave a day or two off the five-day workweek, little attention has been paid to where the weekly calendar came from. Understanding the sometimes arbitrary origins of the modern workweek might inform the movement to shorten it.

... At the very latest, the seven-day week was firmly entrenched in the Western calendar about 250 years before Christ was born.

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Little attention, indeed.