Main Street, Obamaville: All Bumps, No Road

From the inimitable Mark Steyn, here:

The American Dream, 2011: You pay four bucks a gallon to commute between your McJob and your underwater housing to prop up a spendaholic, grabafeelic, paramilitarized bureaucracy-without-end bankrupting your future at the rate of a fifth of a billion dollars every hour.

In a sane world, Americans would be outraged at the government waste that confronts them everywhere you turn: The abolition of the federal Education Department and the TSA is the very least they should be demanding.

Cutting Spending: Tea Party's Meession from G-d

As reported by Howard Gold here:

Congress has raised the debt limit 74 times since 1962 so the federal government can meet its obligations.

Usually it’s just a rubber-stamp exercise. But this time a Republican-controlled House of Representatives, which swept into power on the back of the Tea Party movement, is preparing to take a stand against too much federal spending and picked the debt ceiling as the battleground.

[Greg] Valliere [chief political strategist of Potomac Research Group] called the 87 freshman Tea Party House Republicans “unlike any group I’ve ever seen in my career. These people don’t give a damn about being re-elected. They feel they are on a mission from God to cut spending,” he told me.

Guarantees Implicit Under Dodd-Frank Hand Big Banks Billions in Borrowing Advantages at Taxpayer Expense

So says John Carney here, calling Bank of America, Citigroup and Wells Fargo, among others, our new Fannie Maes and Freddie Macs.

Corporate Cash Reaches New Record Yet Corporate Borrowing is at Staggering Levels

Corporate cash reached a new record of $1.9 trillion in Q1 according to the Federal Reserve's Flow of Funds report. The figure is referenced in discussions here and here, among other places.

But what rarely seems to get mentioned in these sorts of discussions is the debt side of the equation involving all this corporate cash. To cite the growth in cash as evidence that corporations don't need a tax cut and aren't investing simply misses the larger reality which helps explain the phenomenon.

John Carney here points out among many other important considerations that corporations are behaving out of fear just like individuals had when they increased their savings in the wake of the recent financial crisis. Many businesses experienced first hand just how difficult times can be without sufficient liquidity in a situation where no one is lending. Increasing cash should be viewed in part as insuring against a repetition of a similar lending lock up in future. 

Other more extenuating circumstances should also be considered when evaluating the issue of corporate cash. One is Federal Reserve induced low interest rates.

David Zeiler calls attention here to the fact that the current low cost of borrowing is too attractive for corporations not to lock in before QEII ends and the cost of borrowing inevitably rises:

The amount of debt companies have issued this year is staggering. As of May 18, companies with investment-grade ratings had issued $392 billion of bonds, an increase of 30% over the same period last year.

Another consideration is related also to formal government policy, namely that much corporate cash may simply be too unattractive to use for tax reasons:

"Many tech companies have looked to raise capital in the [U.S. debt] market over the past year, for a multiple of reasons, including acquisitions, the maturing of businesses and the inability to tap offshore cash without tax consequences," Keith Harman, a managing director in debt capital markets at Bank of America Merrill Lynch told Reuters.

The issue of offshore cash is a significant one. For many companies, offshore money accounts for the bulk of their cash. About 46% of Google's cash is overseas; 90% of Cisco's and virtually all of Microsoft's.

Because of a reluctance to pay the 35% U.S. corporate tax on that money, that cash remains offshore and unavailable for many uses, such as stock buybacks and infrastructure investment. (Microsoft used some of its offshore cash to buy Luxembourg-based Skype earlier this month.)

This suggests that repatriating corporate cash should be a fundamental goal of tax reform in the US. That would mean making it more attractive to keep it here by reducing corporate tax rates.

Come to think of it, why stop there? Why not patriate everyone's cash in the world to America as a matter of formal government policy?

The more cash, the better.

Progressivism: Just Another Word For Fascism

As seen here:

"Reading various online threads, it never ceases to amaze me that advocates of what we will call a more liberal or progressive line of economic thinking inevitably embrace the corporate state [fascism] for solutions."

Palin Proves Again That the Climb Down Into the Gutter Comes Natural to Her

Here it is again on her Facebook page, playing cutesy with the acronym for Obama's "Winning the Future."

Every time she resorts to one of these easy low one-offs she destroys her credibility as a Christian and as a serious political player.

The descent into barbarism continues apace.

Imagine 1.2 Million Mortgagors Not Making ANY Payments in Over Two Years

And about 3 million more who haven't paid anything in over a year.

The story is here.

Looks like judicial foreclosure states only, of course.

The EU Project Has Been an Elaborate Charade from the Beginning

So argues Samuel Gregg, in considerable detail, here:

[T]he economic woes of countries like Portugal, Spain, and Greece have resulted from more than just bad policy. With each passing day, evidence mounts that one dynamic driving the crisis is that of untruth: a disturbing European pattern of fabrication about levels of public spending and debt.

The latest proof for this thesis is the discovery by newly-elected Spanish regional and local governments of concealed debts run up by their predecessors. This contradicts claims by Spain's Socialist Finance Minister, Elena Salgado, that Spain's regions had no "hidden deficits" on their accounts. Spain's business community, however, has long complained about local governments pressuring private companies to do business with them "off the books."

One reason for such behavior is that Spain's government knows that the greater Spain's real overall-public debt, the higher will be the interest-rates demanded by financial markets and the more stringent will be the conditions attached to any "financial assistance package" (i.e., bailout) that Spain might, like Portugal and Greece, eventually need.

Unfortunately, financial sleight-of-hand in today's EU has a longer history than the present turmoil. It's characterized the entire monetary union project from the start.

The rest at the link should not be missed.

Now You Know Why The Dept. of Education Wanted to Procure Shotguns

The "federal business opportunity" placed here on March 8, 2010 was for 27 shotguns for the Dept. of Education.

They probably used them in the recent raid reported here, smashing down a family's door at six in the morning, looking for payment on delinquent student loans.

There's an old saying that if you outlaw guns, only outlaws will have them.

Shotguns with barrels less than 18 inches long are outlawed. That's why Obama's fascist police state thugs from the Department of Education procured shotguns with 14" barrels.

Think of it as close quarters tutoring.

As we reported here, the IRS got some too, for close quarters audits, and ObamaCare insurance compliance.

What's Wrong With the Republican Party? That Any of it Approves of the Job Obama is Doing.

Over 25 percent is mind-boggling, but even 14 percent approving is nothing short of nutty:

"In May, over a quarter approved of President Obama's handling of his job, but that is down to 14 percent now, a clear indication that any advantage he gained from taking out Osama bin Laden has faded with time."

-- CNN Polling Director Keating Holland, here

Obama Safeguards Student Loans So Much He'll Break Down Your Door to Get to Them

"We be loans and shit."

Story here.

Radiation in Iitate, Japan, is Down to 2.69 Microsieverts Per Hour

Per the June 8th report of environmental radiation in the districts of Fukushima Prefecture, here.

The reading remains the highest of the 13 reporting locations and is roughly 24 times normal for the area.

If You Don't Have the Note Today, You Don't Have No Game

Chris Whalen here shows the regrettable continuity between the problems of today and the 1930s with respect to the legal issues in judicial foreclosure and concludes with the following:

One thing you can depend upon is that there will be no fixing of what is wrong with the US real estate sector until Congress addresses once and for all the issue of delivery of a note as collateral for a mortgage backed security. Unless, and until, we fix the private mortgage securitization market, the housing sector will not stabilize and the chance of further deflation will remain a threat to economic recovery.

My Favorite Homeowner's Front Door Visitor Welcome Sign

"Welcome to our illusion of economic prosperity."

The World, Upside Down

From Joel Miller at National Review, here:

In short, Palin basically got the whole story wrong.

From Robert Allison interviewed by NPR, here:

BLOCK: So you think basically, on the whole, Sarah Palin got her history right.

Prof. ALLISON: Well, yeah, she did. ...

Methinks the professor wants Palin to be the candidate as much as we all want Anthony Weiner not to resign.

The true mother of the child would give it up rather than see it hewn in half.

Finances of the States Still One of the Most Dangerous and Overlooked Problems Today

So says Shawn Tully here, looking at the latest news coming from Meredith Whitney, which is more comprehensive and compelling than before and who is sticking by her guns:

Whitney summons what appears to be the most comprehensive set of data ever assembled on state budgets and debt.

Her conclusion is that the future deficits that need to be closed, either by new taxes or draconian cuts in social services, are far bigger than the official numbers show, and that debt levels, when all liabilities are counted, vastly exceed the official estimates.

Late last year on 60 Minutes, Whitney predicted hundreds of billions in defaults on municipal bonds in the next five years. That controversial call was widely condemned, especially on Wall Street, where the muni market is an enormous profit spinner.

Now, Whitney tells Fortune she never meant to make more than a general forecast. "I never intended on framing the scale of defaults as a precise estimate, but I continue to believe that degree of municipal defaults will be borne out over the cycle. I meant to point out that the state debt problem is a massive headwind for the U.S. economy, second in importance only to housing."

Sarah Palin, Their Only Hope, is So Vulnerable That Both Limbaugh and Hannity Feel Compelled to Defend Her Indefensibly Stupid Caricature of Paul Revere's Midnight Ride

Sad, but true.

This is an indicator of how desperate things really when it comes to finding a truly acceptable conservative Republican candidate for president.

There isn't one, and they both know it.

Good thing for Palin that Anthony Weiner changed the topic.

Let Americans Use Their $15 Trillion in Retirement Accounts to Bailout Housing

John Crudele has mentioned this before, as have I.

Here he is once again in The New York Post:

Which gets me back to my favorite subject: my idea for fixing the economy.

If Washington wants to stimulate the economy without spending money (which it doesn't have) or reducing interest rates (which can't go any lower) or destroying the value of the dollar and stoking inflation (which Bernanke's QE is doing), then it should try my plan.

Change the rules on retirement accounts so that some small amount of the $15 trillion in these plans can be invested in real estate.

Let the Americans who can afford to buy real estate in their retirement plans do so.

Give them tax breaks. Encourage them to move into vacant condos in Florida, Arizona, California and everywhere else.

Get these properties off the books of banks and the federal government.

I'll get back to this another time when I have more space. But someone had better come up with a new idea -- and fast.

You Don't Hear the Tea Party Warning of Civil Unrest, But You Will Hear Democrats

Like James Carville, here:

But Carville said the consequences aren’t limited to politics alone. He warned of heightened risk of civil unrest with the bleak economic picture.

“You know, look — this is a humanitarian — you know, you’re smart enough to see this,” Carville said. 

“People, you know, if it continues, we’re going to start to see civil unrest in this country. I hate to say that, but I think it’s imminently possible.”

Congressional Budget Office Puts Fannie/Freddie Bailout at $317 Billion

The regime's Office of Management and Budget says it's $130 billion, net of certain repayments, apparently, totaling $34 billion.

Story here.