Conservatives are prisoners of the '3 million Republicans stayed home in 2012' meme

The meme began with Jeffrey Lord at The American Spectator, here, whose real motive was to beat up the party for nominating another moderate:

"On Tuesday night, it comes clear, as this is written using the latest Fox News figures, Mitt Romney lost to President Obama by 2,819,339 votes. And the news ekes out that Moderate Nominee Number 10 Romney received some 3 million Republican votes less than Moderate Nominee Number 9 -- John McCain in 2008."

Blurted out as it was on November 8, 2012, no one could possibly have known that to be true at the time or trust it, but it has been accepted and remains endlessly repeated as the truth, mostly by the likes of Rush Limbaugh who uses it to browbeat his audience whenever someone spills some lemonade on the still open wound of the Romney defeat. The Republican base was at fault for not showing up, we are told, and Rush is never going to let you forget it. He's as angry at the right as John McCain is, but the meme just reverberates down through the conservative food chain through every microphone until you just want to scream out loud because it simply isn't true.

This is demoralizing for everyone and needed to stop long ago. But why it hasn't stopped has more to do with conservatives' penchant for self-flagellation for their failure to find a new Reagan than with anything else. What they should be doing is trying to learn something from the episode so that they do win next time, but you get the feeling that they don't do that because they really don't believe that they can win next time. Republicans want a Saviour to do the job for them, instead of doing it themselves.

I know why this is, and so do you.

Conservatives have become prisoners of a utopian dream. They keep thinking that if the right guy or gal comes along in the mold of the Gipper, we'll finally, finally, be able to take over the government and show everybody how it's supposed to be done once again, and all will be right with the world.

This is crazy.

The fact is there were just eight states lost by Romney to Obama in 2012 where McCain did better. Here they are, showing how many more votes McCain got than Romney:

Ohio: 16,383

New Mexico: 11,044

California: 171,823

New Jersey: 134,458

New York: 262,275

Maine: 2,997

Vermont: 6,276

Rhode Island: 8,187

Total votes by which McCain did better than Romney, but still lost: 613,443 . . . nowhere near 3 million.

Keep in mind that Romney garnered a net 984,084 more votes nationwide than McCain did in 2008, despite that under-performance in eight states detailed above, and despite what Jeffrey Lord told you in the wake of the election and people like Rush Limbaugh have endlessly repeated ever since. On top of that net better performance, Romney also won North Carolina and Indiana, both of which McCain had lost in bitterly narrow outcomes in 2008. Romney ended up winning 24 states vs. only 22 for McCain. You don't do that with 3 million Republicans staying home in 2012 who didn't in 2008.

To think so now at this late date is a form of mental illness.

Romney's better performance than McCain overall was despite two important factors working against Romney: a lower turnout nationwide in 2012 by 1.6% overall compared to 2008 (2.2 million); and a suppressed voter turnout in New Jersey and New York because of Hurricane Sandy right before the election, which makes McCain's better performance than Romney in those two liberal states in 2008 look questionable, quite apart from being inconsequential.

In New Jersey and New York in 2012 5.9% and 7.3% fewer votes respectively were cast than in 2008, alone totaling a whopping 789,000 votes. Based on Romney's performance in those two states in 2012, as many as 288,000 of those votes could have been his but were not, due to weather related impacts on the election. But they hardly mattered except to show that McCain's so-called out-performance was nothing of the kind.

The only state of the above eight which really mattered for Romney in the 2012 calculus to win was Ohio, where Romney lost by 2.98 points, or 166,272 votes.

Turnout in Ohio was also down in 2012, by 2.3% or 131,000, a rate of no-showing almost 44% higher than in the country as a whole (Just where was Gov. John Kasich when we needed him, hm?). With third party voting in Ohio turning out the same percentage in 2012 as it had in 2008, you have to reckon with the fact that Ohio's 101,788 third party votes in 2012 had a greater impact on the outcome in the lower turnout environment of 2012, and they did.

49,493 of those third party votes in Ohio went to the self-described Republican spoiler from the Libertarian Party, the Republican Governor Gary Johnson of New Mexico, who was just coming off being snubbed by the Republican Party in the presidential debates of late 2011. Another 33,722 votes in Ohio went to assorted libertarian and right of center fruits, nuts and flakes. Then add in the known 16,383 who voted for McCain in 2008 but not for Romney in 2012 and you're up to 99,598 of the 166,272 Romney lost by in Ohio in 2012. That leaves 66,674 additional votes Romney lost to account for, which as luck would have it is about 51% of the total reduced turnout, closely enough mirroring the 47.6% by which Romney ended up losing in Ohio to satisfy the equation's solution. The point is there was nothing terribly unusual about this outcome which couldn't have been remedied by a better boots on the ground operation than Romney fielded, outnumbered as it was by Obama by 10 to 1. Romney's failure in Ohio was remediable.

One gets the feeling from that that Romney too was looking for a Saviour when he should have been working harder. Only after the election was it confirmed by his family that he really didn't have the fire in the belly. We should have known. "ObamaCare's not worth getting angry about". "I'm not going to light my hair on fire".

Ohio, plus New Hampshire, Virginia and Florida in the east together would have given Romney the 270 electoral votes he needed instead of the 206 he actually received. Romney lost those four states, and the presidency, by just 429,522 votes.

Not.3.million.

Scientists are very smart, and you simply aren’t qualified to disagree with them

Seen here.

Like flies on manure, the libertarians swarm to any story about Ayn Rand

CNBC.com has a story up celebrating the 110th birthday of Ayn Rand, here (I don't recall seeing one for Ronald Reagan this week, whose 104th it was), entitled "Ayn Rand is 110 and still in your face after all these years".

Well, she wouldn't be in your face this week if it weren't for CNBC. And I swear the Randians use Google Alerts to swarm the comments section for any story that pops up about their heroine. CNBC even egged them on with an online poll embedded in the article.

Those of us old enough to have voted for the Gipper remember the critical verdict against Ayn Rand from the likes of Reagan's intellectual compatriots William F. Buckley Jr. and Whittaker Chambers, and against libertarians generally from people like Russell Kirk, all of whom insisted that man does not exist for his own sake, implying a transcendent, as opposed to a purely immanent, moral order. It was that precisely ideological character of Objectivism, that theological mistake, which made it but the other side of the totalitarian coin which Ayn Rand still carried in her pocket from the USSR, and which American conservatives instinctively rejected.

If I had a subscription to the NYTimes, I'd cancel it just for how David Brooks defended Obama's equation of Christianity and ISIS

David Brooks' defense of Obama is here.

Obama plays New York intellectuals like a fiddle.

Like Mitt Romney, Hillary Clinton has had her shot at the presidency and failed, so why isn't she out, too?

Hm?

Robert F. Kennedy Jr. is a distinguished "dog" environmentalist

The NY Post reported here May 17, 2012 on occasion of the suicide of Robert F. Kennedy Jr.'s wife Mary, also an environmentalist:

Mary’s close friend pointed to the strain of her 18-year marriage. “She was lovely. She always looked out for you,” she said, but added, “She did not have it easy, being Bobby’s wife. “I remember being seated at a dinner next to Bobby around 10 years ago that [Mary] was also at — it was the first time I had met either of them — and he put his hand on my thigh under the table. We hadn’t even spoken but to say hello. He is such a dog that way.” ... [T]he philandering took “a terrible toll,” the source said, adding, “He got all the glory, and she got no acknowledgment for what she did: holding it all together at home.”

Jon Stewart doesn't realize that Governor Bupkis is from Wisconsin, not New Jersey

Here.

He'll rip your government unions a new one if you don't watch out, Jon.

The eviscerated New Republic defends Obama's indefensible prayer breakfast remarks equating Christians with ISIS

Here.

The commenters are all over the affirmative action president like white on rice, if that's possible in this instance.

Talk about kicking a dog when he's down . . . for the Muslim cause.

And you thought America was lost.

Courage!

Missing the Gipper, who would have been 104 today

I'm proud to say I voted for him twice, when I was 24 and again when I was 28.

Communism abroad was our enemy then. Little did we imagine it would grow root and branch here, and invade the very White House.

The man would be appalled at what we've let happen to America.

King Abdullah of Jordan for President of the United States

Might as well have a real moderate Muslim as president instead of the one we've got. You know, someone who names the enemy and wants to take it to the enemy instead of lecturing Christians that they are sinners too, confusing people about whose side he's really on.

"Any man I see out there, I'm gonna kill him. Any son of a bitch takes a shot at me, I'm not only going to kill him, I'm going to kill his wife and all his friends and burn his damn house down."

Story here from Byron York.

Just add nausea when ad nauseam isn't enough

Seen here.

Surprise: Lefty Michael Tomasky wants to punish the middle class with an increase in the regressive gasoline tax

Here in "Pony Up, Middle Class, for a Gas Tax", recommending Hillary do it in 2017 like her husband did with income taxes in 1993, by lying about it:

"And the rich, even though they’re rich, only have so much to contribute. The top marginal tax rate just isn’t going to get much higher, and the corporate tax rate if anything should be lowered (although as loopholes are simultaneously closed). So you’re going to have to pay a little.

"I wouldn’t necessarily recommend this for a campaign. But let us not forget that the husband of the putative Democratic nominee in 2016 got into office in 1993 and promptly raised taxes, and fairly substantially, on just about everybody."

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Of course, Tomasky doesn't mention Bill Clinton specifically promising in October 1992 NOT TO RAISE TAXES on the middle class, period.

Americans were forced in the aftermath of those tax increases to plunder home equity to maintain their standard of living. Owners' equity as a percentage of the value of household real estate subsequently plunged from 60.88% when Clinton was elected to 57.43% in the autumn of 1997 even as those housing values began to soar in the gestating housing bubble. We won't digress about how Clinton then threw gasoline on the housing fire in the Taxpayer Relief Act of 1997 just as the percentage of owners' equity had hit that new low.

What's noteworthy is how enthusiastic the left is to punish the middle class, now as then. They haven't changed a wit, and neither have their methods. Everyone is paying higher taxes now in the form of healthcare premiums (hello HillaryCare), and if they get their way they'll raise federal gasoline taxes, too.

Of all the taxes which hurt working and middle class people more it's gasoline taxes, euphemistically referred to as user taxes by libertarians. The current federal gasoline tax of 18.4 cents per gallon generates about $131 of federal revenue for every vehicle driven 15,000 miles annually getting 21mpg. While that's hardly noticeable to your person making $50,000 per year, a mere quarter percentage point, it's like adding almost one percentage point to the taxes of a minimum wage earner making $15,000.

The problem is then greatly magnified by the states, which add on another 29.89 cents per gallon on average, also in the name of transportation funding. Suddenly your 1% tax on the poorest drivers becomes a 2.3% tax.

Any addition at the federal level will only exacerbate this regressiveness. It's not that liberals don't know any of this. They do. It's just that they don't care.

Everyone benefits from roads, not just the users. Everyone should pay for them.

Every Republican for president sucks on immigration, except for Romney

Ann Coulter gets reinstated here, for this, clearly delineating the new fault line for 2016, with Mitt Romney the only one on the right side of the issue:

The only Republican who has ever opposed the media and big campaign donors on immigration was Mitt Romney. You know, the guy we just kicked to the curb. On immigration, the elites speak with one voice: The donors want cheap labor, and the media hate Republicans who push ideas that are wildly popular with voters. ...

But with the cheap-labor plutocrats up in arms during the 2012 presidential campaign over Romney's suggestion that their serfs "self-deport," all the Republican lickspittles rushed to denounce his untoward remark. Rand Paul, Ted Cruz, Scott Walker -- all of them lined up to take Sheldon Adelson's loyalty oath, swearing that, as far as they were concerned, illegal aliens should be treated as honored guests. 

Hey Jeb Bush! Let's repopulate Detroit with Greeks, and persecuted Middle Eastern Christians!

Story here.

Michael Lind is right: American progressives should thank libertarians for hijacking American conservatism

From a perceptive (because he agrees with me) obituary for economic conservatism in Salon, here, by ex-neocon Michael Lind:

In today’s debate about the economy, populist liberals, centrist neoliberals and libertarians are represented. One group is missing from the American economic debate: economic conservatives.

The economists and economic pundits who are usually described as “conservatives” in the U.S. are really libertarians, or, if they are more moderate, right-neoliberals. While genuine conservatives are anti-utopian in temperament, most right-wing economists in the U.S. [today] share the utopian belief that many if not most public services and publicly regulated utilities can be replaced with competitive private markets. ...

The once-influential conservative historian Russell Kirk dismissed libertarians as “chirping sectaries” and declared that any genuine conservative would sooner be a socialist than a libertarian. From Kirk’s Burkean conservative perspective, libertarians or classical liberals were crazed, hyper-rationalist, utopian radicals, like Marxists.

Liberal Salon and libertarian Rand Paul both show their true colors: a shushing they will go

The episode, summarized here, shows the true colors of the politically related liberals and libertarians. Silencing speech is what they are both about, all the while claiming to champion it. Accordingly both resort to the ad hominem: Rand Paul is a "brat" to Salon while he says liberals typically need to "calm down", implying emotional inferiority.

I wonder if Joan Walsh protested being used in this way. And I do mean used: She never once suggests Rand Paul should be shushed, but the headline writer at Salon sure did the dirty work for her. Don't kid yourself. She was OK wit dat.

Standard and Poors admits no guilt in the financial crisis, but pays $1.375 billion

From the story here:

On Tuesday, Standard & Poor’s (S&P), agreed to pay $1.375 billion to settle claims by the Department of Justice and multiple state governments that the ratings agency defrauded investors in the lead up to the financial crisis.

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Theoretically Standard and Poors made about $7 billion during the period in question, so the claw-back is theoretically 20%.

There are plea bargains, and then there are plea bargains.

Romney beat McCain, but not in the mind of Donald Trump

2012

2008

Trump said just now on the Laura Ingraham show that Romney got fewer votes than McCain.

See how a falsehood repeated endlessly by Rush Limbaugh becomes the truth?

Roger Kimball doesn't believe in freedom of speech anymore than anyone else

Here, in The New Criterion:

'As for the herds of “Je Suis Charlie” marchers in Paris and elsewhere, it is worth noting how very few actual “Charlies” there were. It is one thing to carry a placard. It is another to take a stand by, for example, publishing a caricature of Mohammed.'

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

You see, by Roger Kimball's standard, unless I myself engage in a certain form of speech of which he approves, nay requires, I am an enemy of the West and all it stands for. It's not enough that I subscribe to the principle that one has a right to say or publish anything. Unless I actively read it and publish it myself I am not worthy. Kimball's world has no room in it for people who censor themselves out of religious and moral principle, who believe that without such principles there can be no civilization to begin with. Instead I must become a pornographer, I must become a blasphemer, I must join The Party.

Totalitarian ideology never looked so familiar.

I still haven't heard a single Tea Partier demand representation at 1:15,000, let alone 1:30,000

Which their holy, sacred Constitution alternately forbids and enjoins in Article I., Section 2:

"The number of Representatives shall not exceed one for every thirty thousand . . .."

Stephen Moore tells some whoppers: Income was FALLING long before the 2013 increase in the capital gains tax rate

From Stephen Moore of the Heritage Foundation, here:

"When Mr. Obama entered office the capital gains and dividend tax was 15 percent. Then he raised it to 20 percent and then he added a 3.8 percent investment surtax, bringing the rate to 23.8 percent. The tax rose by more than 50 percent. ...

"Wages have stagnated under Mr. Obama as taxes have risen on capital."

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

Nice try at hiding the chronology, Moore, but no cigar.

Real median household income and real gross private domestic investment crashed in tandem and in concert with the 2007 recession. The investment side rebounded quickly, but real household income did not, and still hasn't. What's more, the whole phenomenon preceded any increase in the capital gains tax rate, which didn't pass until January 2013, with Republican support by the way. 

And it won't do to talk about wages stagnating, either. Real incomes have actually fallen, and fallen big. Employers figured out that the 2008 crisis gave them the cover they needed, their golden opportunity, to shed millions of expensive workers and rehire younger, cheaper ones. It's the biggest scandal in recent history, much bigger than the lies about ObamaCare, but no one is going to talk about it, least of all libertarians who are happy that the business inputs cost less.

The incredible rebound in investment is on the backs of all this labor shed in the crisis, helped along by rock bottom interest rates for those who are first in line for the money: bankers and businesses.

So-called conservatism never looked so bad.  

The housing bubble was mainly a middle class and higher phenomenon, not of the poor

From Robert Samuelson, here:

". . . in poorer neighborhoods . . . the actual borrowers . . . were much richer than average residents. In 2002, home buyers in these poor neighborhoods had average incomes of $63,000, double the neighborhoods' average of $31,000. ...

"In 2002, the mortgage-debt-to-income ratio of the poorest borrowers was 2; in 2006, it was still 2. ... 

"[T]he bulk of mortgage lending and losses [during the housing bubble] - measured by dollar volume - occurred among middle-class and high-income borrowers. In 2006, the wealthiest 40 percent of borrowers represented 55 percent of new loans and nearly 60 percent of delinquencies (defined as payments at least 90 days overdue) in the next three years."

Grand Rapids, Michigan, starts 2015 with a January temperature anomaly of -3.2 degrees F

And 23.2 inches of snow after December's paltry 0.3 inches and November's deluge of 31.0 inches.

Here we go again.

It speaks volumes about our society that Rush Limbaugh has never been able to count in Roman numerals

Under his "Pearls of Wisdom" no less, here, last week:

"Is this Super Bowl XLIX? Super Bowl XLIX. I've lost track of the ability to count the Roman numerals. Not that I ever did know."

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

Maybe he'll finally figure it out next year at "Super Bowl L".

Oops, sorry. The NFL is giving up the Roman numeral counting system for Super Bowl 50, according to Wikipedia, here:

"Instead of naming it Super Bowl L with Roman numerals like in previous Super Bowls, this game will be marketed with the Arabic numeral '50'. The game is scheduled to be played on February 7, 2016, at Levi's Stadium in Santa Clara, California, the home stadium of the San Francisco 49ers. This will be the first Super Bowl held in the San Francisco Bay Area since Super Bowl XIX in January 1985."

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

I guess you'll still need to know the Roman numeral system to count Super Bowl XIX.

Surely The Apocalypse is nigh.

But to me it will still be "Super Bowl L", not to be confused with the official name of the trains of the Chicago Transit Authority:

Only in the United States of Moronica.

Kevin Drum admits ObamaCare is a cost to the middle class, not a benefit

Here in Mother Jones last November:

[N]early all [ObamaCare's] benefits flow to the poor. ... winners are those with household incomes below $25,000 or so, and losers are those with incomes above $25,000. ... If you think of Obamacare as something that benefits the working and middle classes, you're probably wrong. It may benefit a few of them, but overall it's a cost to them ... the bottom line is simple: like most of the social welfare programs championed by Democrats, Obamacare is primarily aimed at the poor. Once again, the working and middle classes are left on the outside looking in.

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First Obama did nothing about housing, the sine qua non of the middle class: Over five million completed foreclosures eliminated millions from the middle class without firing a shot.

Then he did nothing about jobs, without which no one buys a house: 18 million have been added to the potential workforce but haven't actually joined it.

Then he rammed through healthcare reform, which was designed to raise costs on the middle class.

And people wonder how Obama could even think of taxing their 529 plans?

The middle class is the enemy of the revolution, the object of the transformation, the source for the redistribution.

So, Libya was really Hillary's war, and more broadly the women's war, not Obama's

From the first part of an investigative report, here, which details that there were secret recordings between Gaddafi's son and none other than Rep. Dennis Kucinich, now out of office:

Mr. Kucinich, who challenged Mrs. Clinton and Barack Obama for the 2008 Democratic presidential nomination, acknowledged that he undertook his own conversations with the Gadhafi regime. He said he feared Mrs. Clinton was using emotion to sell a war against Libya that wasn’t warranted, and he wanted to get all the information he could to share with his congressional colleagues. ...

Numerous U.S. officials interviewed by The Times confirmed that Mrs. Clinton, and not Mr. Obama, led the charge to use NATO military force to unseat Gadhafi as Libya’s leader and that she repeatedly dismissed the warnings offered by career military and intelligence officials. 

In the recovered recordings, a U.S. intelligence liaison working for the Pentagon told a Gadhafi aide that Mr. Obama privately informed members of Congress that Libya “is all Secretary Clinton’s matter” and that the nation’s highest-ranking generals were concerned that the president was being misinformed. ...

Instead of relying on the Defense Department or the intelligence community for analysis, officials told The Times, the White House trusted Mrs. Clinton’s charge, which was then supported by Ambassador to the United Nations Susan E. Rice and National Security Council member Samantha Power, as reason enough for war.

Dang, Romney says he won't run

Now who will stop Jeb?

Secretary of State John Kerry who served in Vietnam fined $50 for not shoveling snow at his Boston residence

Story here:

Boston city officials issued a ticket to Kerry’s home for neglecting to shovel his sidewalk on Thursday, according to Citizens Connect, a website run by the city of Boston where residents can upload complaints.

John Kerry, who served in Vietnam, has also been rumored in the past to avoid stopping at four way stop signs in his Jeep, and to avoid paying taxes on his yacht domicile.

One law for me, another for thee. 

Hm: Obama makes it to Arabia within 4 days of the king's death, but couldn't pull off DC to Paris for Charlie Hebdo

King Abdullah died on the 23rd, on which he was immediately buried, and Obama scurried from India to Saudi Arabia by yesterday, the 27th, to pay his respects.

The Charlie Hebdo massacre in Paris was on a Wednesday, the 7th, and the infamous parade of idiots which Obama did not attend and to which he did not send a representative occurred on Sunday the 11th.

The flight time for the former is less than 5 hours, and for the latter about 7.5 hours.

Funny how security can be so hastily arranged, from so far away, when the trip really matters.

Obama is still a rookie after 6 years in office: drops proposed tax on 529 plans after massive blowback

CNBC reported the story here.

Evidently the White House realized the idea was a non-starter when someone explained that the 529 plans would stop being funded, meaning there would be insufficient revenue to fund alternatives, as reported here:

'On "Power Lunch," [Joe] Hurley [of savingforcollege.com] said this tax will deter people from using 529 plans. "Taxing 529 plans won't pay for any other initiative because people will no longer be using 529 plans," he said. "You can't raise revenue when you don't have any contributions going into these plans."'

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Well DUH!

Analyst says oil price plummet primarily driven by OPEC abandoning swing producer role

Dirk Leach, who also credits the rising dollar but not to the extent others have, here:

"Now that OPEC has abdicated their role as swing producer, the only mechanism to stabilize oil prices is the market itself based on supply and demand. As we are now seeing, the supply side of that balance has a lot of inertia. Despite some analysts' view that shale production can be turned on and off rather quickly, the time it takes to decrease production is measured in months or quarters while the crude oil price response is essentially immediate. Going forward, we appear to have a crude oil market pricing system with a very fast response time and a very slow feedback mechanism (supply adjustments). Generally, this type of system is not very stable and results in frequent large swings in market pricing. Going forward, it might be a more bumpy oil market than we have been used to."

Obama wants to tax 529 plans, 53% of which are owned by those making less than $100k

So reports The Wall Street Journal here about Obama's latest attack on the middle class:

"The average account balance [of 529 plans this June] was $20,671. ... The Investment Company Institute, trade group for the mutual-fund industry, says that in 2013 households saving for college through 529 plans, Coverdell ESAs, or mutual funds held outside these accounts tended to be headed by people younger than 45. And 49% of these heads of household had fewer than four years of college. A majority of these households, 53%, earned less than $100,000."

The dollar has surged 2.26% since Wednesday to trade at 95 this morning

The dollar hasn't traded at 95 since late 2003.

Much more of this dollar strength is due to the continued improving fiscal condition of the United States since 2012 than people realize. 

Tax revenues are way up under the made-permanent Bush tax cuts and the made-permanent Alternative Minimum Tax fix, both of which heralded in 2013. Federal receipts are up a whopping combined 36% in 2013 and 2014 over 2012.

And continued Republican control of the purse in Congress has meant almost zero expansion of federal spending. Federal outlays are up a paltry combined less than 1% in 2013 and 2014 over 2012.

The federal government is up a net $845.5 billion in the last two years. That's huge.

The dollar is not simply a fiction which competes with other fictions in the global marketplace, but a symbol of the determination of the American people to play by the rules and pay their bills. It is not a coincidence that this determination lately expressed politically paved the way for falling commodity prices generally, and oil in particular. It is uncertainty which breeds fear-trades.

Speaker John Boehner doesn't get the credit he deserves for achieving under the Democrat President Barack Obama what Republicans before him could only dream about.

And if you want to know what's wrong with Republicans, that's it.

Strange fact of the day: Both General Lee and MLK Jr. were born in January

Born January 19th

Born January 15th

Likely primary voters prefer Mitt Romney to Rubio and Bush in latest Zogby poll

Bank Failure Friday: The Second of 2015

Highland Community Bank, Chicago, Illinois, failed tonight, costing the FDIC $5.8 million.

This is bank failure number two in 2015.

S&P 500 market capitalization/GDP ratios the years before plus-20% crashes

http://www.advisorperspectives.com/dshort/commentaries/CAPE-at-Market-Peaks.php

1955: 104*
1956: 101
1957:   84

1960: 107
1961: 123
1962: 103

1965: 120
1966:   96

1967: 109
1968: 107
1969:   88
1970:   84

1972:   89
1973:   66
1974:   43

1979:   40
1980:   45
1981:   37
1982:   41


1986:   52
1987:   49

1999: 148
2000: 126
2001: 107
2002:   79

2006: 101
2007: 100
2008:   62
2009:   77

*The ratio is the S&P 500 level at the end of the calendar year divided by 4Q final GDP in trillions of dollars. The average peak ratio in the series is 99. The average trough ratio is 71. The average spread between peak and trough ratios in the series is 27%. The ratio through 3Q2014 is 112, 13% above the average peak in the series.

The chart from Doug Short gives the Shiller p/e ratios on the record dates. The average peak of these is 22.6, the average trough is 14.2, and the average spread between them in the series is 35%. The Shiller p/e ratio at the end of 3Q2014 was 25.16, 11% above the average peak in the series. 

Oh the horror: Did you know the personal savings rate INCLUDES IRA and 401(k) contributions?

The annual average of the rate is shown.

Then how come the personal saving rate has been in steady decline since 1974 when IRAs were first passed into law? And how come saving didn't improve after 1978 when 401(k) plans were first created? Or after 1997 when Roth IRAs were legislated? The current monthly reading of personal saving is a measly 4.4%.

A rich country saves, a poor one spends.

"Notice that NIPA’s [National Income and Product Accounts] treatment of IRAs and 401(k) plan contributions, for example, is perfectly consistent: Because these defined contributions are not part of personal outlays (and, therefore, must be included in the difference between personal income and personal outlays), they are correctly included in national saving computations."

-- Massimo Guidolin and Elizabeth A. La Jeunesse, "The Decline in the U.S. Personal Saving Rate: Is It Real and Is It a Puzzle?" in Federal Reserve Bank of St. Louis REVIEW, November/December 2007, p. 499, footnote 13 (here)

Hey Obama! Tell me how we get to yes . . .

. . . for life!

Jobless claims so far in 2015 are running 6.25% below the same period in 2014

First time claims for unemployment have averaged 450,000 per week in the first three weeks of January 2015 compared to 480,000 per week in the first three weeks of 2014, not seasonally adjusted.

The claims spike last week was equalized by a spike to the downside this week.

Expect the opposite: Obama says "The shadow of crisis has passed"

If you like your insurance you can keep your insurance.

Iraq is secure.

If you like your doctor you can keep your doctor.

Al-Qaeda is on the run.

Everyone will save $2500 under my health reform plan.

I'm as angry as you are about the IRS scandal.

We've fixed healthcare.gov.

Looming global financial catastrophe: Anglo-Saxon pioneers of QE have yet to pay its price

William White, former chief economist to the Bank for International Settlements, quoted here:

Those who argue that the US and the UK are growing faster than Europe because they carried out QE early are confusing "correlation with causality". The Anglo-Saxon pioneers have yet to pay the price. "It ain't over until the fat lady sings. There are serious side-effects building up and we don't know what will happen when they try to reverse what they have done."

Obama's $500 tax relief is so George W. Bush 2.0

Obama is to announce tonight not even inflation-adjusted George W. Bush-type tax relief to middle class families, as reported here, but just another gimmick:

"Among the highlights of President Obama’s State of the Union address plans to pull the American family out of economic plight is a $500 tax credit for two-earner families."

George W. Bush bookended his administration with similar gimmicks.

OK, the first one wasn't exactly a gimmick. The first was part of the then-temporary tax reduction passed by the Congress. You know the one. The check in the mail was a result of the implementation of the tax rate schedule which existed for the rest of Bush's presidency but was set to expire by the time of Obama. Obama finally agreed to make that schedule permanent, something George W. Bush wasn't able to make happen but Speaker John Boehner was. (Why is that? And how come no one except maybe two people on the planet recognize and applaud that? I am one of them. A Forbes columnist, Ralph Benko, is the other. But I digress.)

Flashback to the San Francisco Chronicle in June 2001, here, just six months after Bush assumed office after the narrowest presidential election victory in living memory:

Bush signed the $1.35 trillion tax cut -- which includes soon-to-be-mailed rebate checks of up to $600 -- amid the kind of presidential pomp he usually disdains: a formal ceremony in the East Room, with a Marine band playing "Hail to the Chief." ... In Congress yesterday, a few Republicans talked about making the current bill permanent. One of its odd features is that it expires on Dec. 31, 2010, a sunset provision put in because of congressional rules governing spending more than a decade into the future.

Bush's second and real gimmick came at the end of his presidency in 2008, just before all hell broke loose in the economy with massive bank failures, massive bankruptcies, massive foreclosures, massive job losses, and massive stock market declines. It was a minor echo of Herbert Hoover trying to stop the Great Depression, double, triple, and quadruple-downed on by his successor FDR but to no avail.

Market Watch had the story here in February 2008, detailing the very liberal character of the Republican stimulus plan, which at the time met with no criticism from candidate Obama (why? because it was Obama's brand of liberalism also):

President Bush signed a $168 billion economic stimulus package on Wednesday that will extend rebates to U.S. taxpayers, give tax breaks to businesses and make more-expensive mortgages available through the government and government-sponsored mortgage-finance companies. ... Bush said the U.S. economy has clearly slowed but that the package is "a booster shot for our economy." Approved by lawmakers last week, the package provides a tax rebate of up to $1,200 per working couple, plus $300 per child. ... Taxpayers will not have to apply for the rebate; it would come automatically based on their 2007 tax return. ... Democratic presidential candidate Barack Obama wove the stimulus package into a speech in Janesville, Wisc., on Wednesday, touting a plan he offered a few weeks ago. He proposed sending each working family a $500 tax cut and each senior a $250 supplement to their Social Security check. "Neither George Bush nor Hillary Clinton had that kind of immediate, broad-based relief in their original stimulus proposals, but I'm glad that the stimulus package that was recently passed by Congress does," Obama said.

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These crumbs from the Master's table aren't going to help Americans do anything except survive as dependents, maybe for a week. What Americans need is jobs, decent jobs, and the decent wages which go with them, and liberals know nothing about how to provide them with those.

Paris to sue Fox News for insults: "Free speech for me but not for thee"

Charlie Hebdo gets to insult every religion and every follower of same, but don't you dare insult Paris!

Story here.

The lagging indicator MACD told you to sell the S&P 500 in January 2008, and buy it in August 2009

Three months after the 2007 top, and five months after the 2009 bottom. That's how lagging indicators work: better on the front end and poorer on the back end.

But hey! Close counts in grenades and horseshoes.

Germany repatriated 120 metric tons of gold to the Fatherland in 2014

From the story here:

"The Bundesbank successfully continued and further stepped up its transfers of gold," the central bank said in a statement. "In 2014, 120 tonnes of gold were transferred to Frankfurt from storage locations abroad: 35 tonnes from Paris and 85 tonnes from New York. Germany's gold reserves are the second-biggest in the world after those of the United States and totalled 3,384.2 tonnes this month, according to the latest data compiled by the World Gold Council. ... Under the Bundesbank's new gold storage plan in 2013, it decided to bring back 674 tonnes from abroad by 2020 and store half of its gold in its own vaults. ... Since the transfers began in 2013, the Bundesbank said it has relocated a total of 157 tonnes of gold to Frankfurt -- 67 tonnes from Paris and 90 tonnes from New York.

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If I'm doing the math right, that means that in 2013 New York coughed up just 5 metric tons of Germany's gold to Germany, and Paris 32 metric tons.

If the plan is to repatriate 674 metric tons by 2020, the 157 repatriated so far means there are just 517 to go, or about 86.1 metric tons per year through 2020, to put half of Germany's gold back in Germany.

The story line not included above includes the narrative that it was unsafe to let Germany store its own gold in its homeland during the Cold War. But there were already 1,018.1 metric tons stored in Germany all those years, not quite a third of its holdings. Seems like a pretty big target to me.

An interesting assessment of the risks, wouldn't you say? Or was something else at work here? Versailles, and all that.

Bob Brinker's advice to stay fully invested in stocks in 2008 beats Jim Cramer's to sell

Bob Brinker famously said on his radio show Moneytalk during the 2008-2009 market meltdown that "no one could have predicted this".

As a market timer, he's taken a lot of heat for this statement, including from me, but it is time to reassess his 2003 call to return to a fully-invested position in the stock market and to stick to it in 2008 despite the meltdown.

How has that worked out? 

"Fully invested" means different things to different people. This is because it is a question of asset allocation. Asset allocation strategies are by definition highly individualized to meet objectives while minimizing risk, and they depend on many factors including income and age, which change over time and thus necessitate adjustments to the strategy periodically. So to be clear, a person who allocates 50% of all resources to stocks at any given time is fully invested when that is so. But that means that a person who has much more tolerance for risk and normally invests 90% of all resources in stocks by definition has a greater percentage of all his resources in stocks, yet both individuals are "fully invested".

OK, so let's take the hypothetical person born in 1949 who just retired at the age of 65 in November 2014. That person has had theoretically 43 years of continuous investing life, let's say beginning from November 1971 after landing that first job out of college in the spring of that year.

Now whatever this person had allocated to stocks over the course of those 43 years, using the S&P 500 as a proxy for the part allocated to stocks, he or she has averaged a nominal return of 10.68% annually with dividends fully reinvested through November 2014, including the crash periods of 2000 and 2008.

But back in March 2003 this person was turning 54 years old and was worried about the future after the stock market crash he had just experienced. And let's say he had ridden his investments all the way down in that crash by being fully invested through the 2000 debacle. From 1971 to that point in 2003 his average annual performance had been 10.94%.

Had he heard Bob Brinker's advice to be fully invested going forward and stayed the course he had been on, how did remaining in the market as before repay him as part of the overall average performance of 10.68% which he ended up achieving annually on average through November 2014?

The answer might surprise you: The average annual performance of the S&P 500 from March 2003 through November 2014 has been 10.01%. The market crash of 2008-2009 might certainly have unnerved this investor, who was then turning 60, to the point of utter capitulation, for it reduced his performance from 1971 through March 2009 to 9.11% per year on average.

It's clear, however, that cutting and running after the fact in 2008-2009 was not the answer. That was Jim Cramer's answer in October 2008, on morning television no less, but it wasn't Bob Brinker's.

Simply staying the course was like putting back on a point and a half for every year of the 43 year investing life of our hypothetical investor in a matter of just five years.

Kudos to Bob Brinker. Raspberries to Cramer.

Editor of Charlie Hebdo, Gerard Biard, attacks the pope for his "provocateur" comment

Here, after stating that "religion has no place in the political arena":

GERARD BIARD: We do not kill anyone. We should stop conflating the murderers and the victims. We must stop declaring that those who write and draw are “provocateurs,” that they are throwing gas on the fire. We must not place thinkers and artists in the same category as murderers. We are not warriors. We only defend one thing: Freedom, our freedom, secularism, freedom of conscience and democracy.

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Charlie Hebdo isn't just against Islam, it's against anyone with faith. It excludes everyone with faith from the political process. The only equality secularism recognizes is the equality of secularists. People of faith are second class citizens, or worse, totalitarian monsters, never mind that the worst totalitarian monsters were all extreme secularists. The crimes against humanity committed by religious fanaticism pale in comparison to the crimes of the Stalins, Hitlers and Maos of the world.

The main reason we are still in a secular bear market

Ed Easterling, Crestmont Holdings LLC, quoted here:

"P/E has not declined to levels that are required to drive a secular bull market.”

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Other forces have been hard at work manipulating prices, inhibiting discovery of actual value.

The wisdom of Mingdong Wu: How to raise interest rates without raising them

The Fed owns in excess of $2.4 trillion in Treasury securities.

Mingdong Wu is a very smart guy, knowing that Treasury securities are in short supply because government spending has been flat to negative since 2009. That makes the price of existing securities go up. This means interest rates are low, because those move inversely to price. To make interest rates go up, increase the supply, as he tells us here:

"The Fed should gradually sell its Treasury holdings to rebalance supply and demand."

Simply brilliant. Of the $2.4+ trillion held by the Fed, $1.1 trillion are 1 to 5-year instruments.

Voila!

Reuters agrees: the middle class is worse off now than when Obama took office

Here:

Federal Reserve survey data show families in the middle fifth of the income scale now earn less and their net worth is lower than when Obama took office. ...

In the middle, the economy has shed positions - whether in traditional trades like machining or electrical work, white-collar jobs in human resources, or technical ones like computer operators. ... 

Between 2010 and 2013, as recovery took hold and stock markets soared, the average net worth of families in the top 40 percent of income earners grew. For all others average net worth shrank, declining 19 percent for the middle fifth. Similarly, the average earnings for families in the top 10 percent grew more than 9 percent from 2010 through 2013, while those at other levels stagnated or shrank. For the middle fifth, average earnings fell 4.6 percent. Over the six years through 2013, the middle fifth's average annual family earnings fell to $47,243 from $53,008 while their average net worth dropped to $170,066 from $236,525.

Hillary Clinton doesn't have a Charlie Hebdo problem: The Neoconservatives have a pope problem

The Weekly Standard thinks Hillary Clinton has a Charlie Hebdo problem, here:

Clinton blamed an "awful internet video that we had nothing to do with" for the "rage and violence directed at American embassies." Clinton did not, in the course of her speech, defend the right to free speech. ... [D]oes Clinton see any difference between the blasphemous Charlie Hebdo cartoons and the blasphemous anti-Islam YouTube video?

All Hillary has to do is quote the pope:

"One cannot provoke, one cannot insult other people's faith, one cannot make fun of faith. There are so many people who speak badly about religions, who make fun of them ... they are provocateurs. And what happens to them is what would happen to [my dear friend] if he says a word against my mother."

Bank failure number one of 2015 is in Crestview, Florida

First National Bank of Crestview, Crestview, Florida, failed last night, costing the FDIC $4.4 million.

6,589 institutions remained insured under the FDIC through 9/30/14.

18 banks failed in 2014, 24 in 2013, 51 in 2012, 92 in 2011, 157 in 2010, 140 in 2009, and 25 in 2008 when there were still 8,384 banks and savings and loans in the FDIC system.

The shrinkage of membership in the system by about 1,800 over this period includes the 508 failures since 2007 and about 1,287 sales, mergers and consolidations.

Costs to the FDIC system for failures since the beginning of 2007 to date are close to $90 billion.

Liberty! Fraternity! Israel!

Ann Sterzinger on sex-obsessed Islam

Here:

"[A]mong religions in modern vogue, none is more explosively kinky than Islam."

It's true, Islam is sex-obsessed:

"[T]he world’s top porn consumers come out of the Middle East. According to data released by Google, six of the top eight porn-searching countries are Muslim states. Pakistan tops the list at number one, followed by Egypt at number two. Iran, Morocco, Saudi Arabia and Turkey come in at numbers four, five, seven and eight, respectively. Pakistan leads the way in porn searches for animals like pigs, donkeys, dogs, cats and snakes."