Inflation Analyst Says TIPS Are Overpriced

Seen here:

In terms of owning inflation protected securities (TIPS), we find that at current price levels they offer absolutely NO protection against further increases in the US inflation rate. Rather, we believe that you should (at this point) own real assets such as commodities for protection or small cap stocks, which have proven to be a decent hedge against inflation historically.

Even after yesterday's pullback to $13.44, VIPSX is trading near ten year highs.

Q1 Non-Bank Corporate Debt Surged to a Record $7.3 Trillion

And Brett Arends, same article, thinks corporations used the borrowing to finance the stock buy-backs, which kind of puts the taint on both their stocks and their bonds:

The total [borrowing] at the end of 2007, at the peak of the so-called “credit bubble,” was just $6.7 trillion.

This borrowing spree has pushed overall gearing for nonfarm, nonfinancial corporates to hefty levels. The Fed says that U.S. nonfinancial corporates now have debt equal to 50% of their net worth. It’s near record levels for modern times. As recently as 2006, it was just 40%.

When a company borrows money to bolster its own stock price, it makes me wary of the bonds. When the executives aren’t even willing to invest their own money, it doesn’t exactly make me enthusiastic about the stock either. 

Q1 SPX Rise of 5 Percent: Companies Painted The Tape

Just like they're doing in the last three days, along with everyone else, to make Q2 look better after a tough couple of months.

Brett Arends has the story here:

So who was driving up the market? What was creating this boom?

Turns out it was the companies themselves. TrimTabs says companies spent a thumping $124 billion in the first three months of the year trying to boost their share prices by buying up stock.

That works out at about $2 billion for every day the market opened.

Meanwhile, according to Trim Tabs, guess who avoided buying stock during the first quarter? Company executives. The “insiders.”

Phony as a $3 bill.

The Democrat Idea of a 50 Percent Tax Cut

Buy one, get one half off!

If Anyone's Hung Up on Taxes, It's the Democrats: It's Their Price for Spending Cuts

So says the much trumpeted Reuters story today:

Democrats say the $1.5 trillion to $2 trillion in spending cuts that the two sides have tentatively identified must be augmented by $400 billion in new tax revenue over the coming 10 years. That money would come by closing a range of tax breaks for hedge-fund managers, private jets and specific business sectors.

The Most Dangerous Combination of Four Words in the English Language

"Debt draws forward prosperity."

-- Ambrose Evans-Pritchard, here

"I Redefined the Republican Party"

"Let me tell you something. I whupped Gary Bauer's ass in 2000. So take out all this [conservative] movement stuff. There is no movement.

"Look, I know this probably sounds arrogant to say, but I redefined the Republican Party."    (source: Matt Latimer)

"And I redefined my foot in your ass"

Barack the Magic Cadger, on Vacation Every 6 Weeks, Complains Congress Takes Off

The whole debt ceiling thing is really getting under his skin. Republicans should keep it up.

Lengthy, ornery, news conference quotations here.

Bush Appointee to 6th US Circuit Court of Appeals Tilts Ruling in Favor of ObamaCare

Thanks George you mushy headed liberal.

The ruling was by a three judge panel. The Reagan appointee voted against the healthcare mandate, while a Bush appointee and a Carter appointee voted for it, proving once again that W, who aimed to redefine conservatism in his own image, was no friend of the right.

Plaintiffs can appeal to the full, currently 15 member, 6th circuit court, or to the Supreme Court.

The story is here.

ClimateGate's Michael Mann Isn't Off the Hook Yet

Larry Bell explains why here.

Rolling Irrational Exuberance . . . in Pictures

in housing from 1997

in the fed funds rate from 1990

in stocks from 1994

in oil from 2003

in gold from 2005

Liberals Blame Bill Clinton for Housing Bubble

The Financial Crisis Inquiry Commission, under Phil Angelides who had a testy, partisan, op-ed in The Washington Post yesterday, in its report sought to blame Wall Street for leading the way to the housing bubble, not government policy as mediated through the likes of Fannie Mae.

Gretchen Morgenson of The New York Times has begged to differ, and Steven Malanga provides a timely and sympathetic review of a new book she co-authored which uncovers a major impetus to the housing bubble in the administration of none other than Bill Clinton, who took a weaker form of liberalism under George Herbert Walker Bush and ran with it:

Reckless Endangerment locates the origins of the crisis in the ironically named Federal Housing Enterprises Financial Safety and Soundness Act of 1992, which was supposed to protect taxpayers from big losses by Fannie and Freddie. That law pushed the institutions into affordable housing lending and prompted Fannie in particular to adopt a strategy to disarm critics by continually arguing that efforts to rein in the company's operations, such as requiring it to back its mortgage purchases with more capital, would only hurt the goal of expanding home ownership. "You should rejoice in Fannie Mae and Freddie Mac rather than fight them," Fannie's chief executive, James Johnson, told the New York Times.

In the wake of the 1992 legislation, Fannie Mae created the Housing Impact Advisory Council, an assembly consisting of low-income housing advocacy groups and mortgage lenders. Fannie Mae also began supplying grants to the housing groups, like ACORN, which a few years earlier had criticized the GSEs in the press as "strictly by-the-book" interpreters of underwriting standards whose young underwriters, "are not sensitized to the existence of redlining, be it racial or geographic." Now Fannie was singing a different, more cooperative tune, and its new council, Morgenson and Rosner write, evolved into "the centerpiece" of President Clinton's 1994 National Partners in Homeownership program, a "disastrous homeownership policy" that played a crucial role in inflating the housing bubble.

With The Nation pinning financial deregulation on Bill Clinton in recent days, liberalism's not having a good start to the summer.

If Bill Clinton were smart, he'd respond to all this by blaming Bush, or hope people still have enough money left to go to the beach and read trashy novels instead.

Corporate Cash Earned Overseas, Presently About $1 Trillion, Cost the US Treasury About $90 Billion in 2008

So says a detailed and insightful story at Bloomberg here by Jesse Drucker, showing how companies book earnings abroad through the Netherlands, Switzerland and Bermuda, lawfully, to minimize taxation both in the US and in high tax European countries.

The next time some pinhead US politician says he wants to take away your $88 billion mortgage interest deduction, tell him this corporate tax loss expenditure is just as big, and getting bigger. 

When you consider that corporate taxes represent less than a third of the tax revenues which individual payers contribute to the federal government under current arrangements, there's plenty of room to rebalance that income portfolio more fairly.

Maybe we could start by rewarding companies for earning their money here instead of over there. If the Netherlands, Switzerland and Bermuda can do it, why can't we?

Well? 

Flaky, as in 'Obama' (not as in 'Bachmann')

Michele Bachmann may be many things, but flaky is not one of them.

For flaky, we must throw out the much too tame traditional dictionary, and go to the Urban Dictionary, which nails it many times over:

An unreliable person. [See 'Obama' who hasn't improved one economic measure for black people, let alone anyone else, except for their government dependency]

A procrastinator. [See 'Obama' who dithered and dithered for three days after the Fruit of Kaboom bomber incident in route to Detroit because he and his administration were all on vacation, again. And how many months did it take him to decide to surge in Afghanistan?]

A careless or lazy person. [See 'Obama' who was content to let the House and the Senate duke it out over their versions of healthcare reform and provided no legislation of his own, or who let BP clean up the spill in the Gulf despite a long-standing contingency plan put in place by the government in the wake of the Exxon Valdez spill in Alaska]

Dishonest and doesn't keep to their word. [As in 'Obama' who didn't close Gitmo and didn't try the terrorists in civil court]

They'll tell you they're going to do one thing, and never do it. [See 'Obama' who promised to end the war in Iraq but our soldiers continue to die there]

They'll tell you that they'll meet you somewhere, and show up an hour late or don't show up at all. [As in 'Obama' who, the president of all the people, deliberately misses church, and patriotic or Christian holidays but never seems to miss a Muslim one]

Also spelled "flakey", or "flake" in the noun form. [Also spelled 'baked' in the adjectival form, as in the noun 'head']

She told me she would send me her pictures, but it's been 3 months and she hasn't sent me shit. She's flaky as hell.

I think Sean Hannity is still waiting for an RSVP for that beer.

Plane for Moochelle's Africa Trip Alone Cost Us Over $400,000

Another timely expenditure by the queen of shtrong.

White House Dossier has the shtory here.

The Federal Reserve's ZIRP is Another Form of Age Discrimination

Baby boomers, like Ben Shalom Bernanke, are such a self-loathing brood. First they put us all out of work, and then they pay us nothing on our savings:

[I]t is reasonable to call Bernanke the enemy of savers, because he is the enemy of savers. When one can’t earn anything over one year without risk, something is wrong. ...

Saving deserves a return. Let the Fed raise the Fed funds rate by 1%, and they will see that there is no harm to the banks, and little harm to the economy. Once you have 1% slope between twos and tens you have more than enough oomph to make the economy move. What, does the AARP have to bring a age discrimination lawsuit against the Federal Reserve to make this happen? The Fed is discriminating against the elderly.

David Merkel has more to say here.

James Altucher Refuses to Recognize the (Education) Gods of the State

But they didn't serve him hemlock at the dinner party, just hatred. (Hey, isn't that a crime?)

Here:

The main thing is, these people didn’t like me very much. I felt like I had upset the religion of America so I was an apostate. I left at the end and very few said goodbye to me.

My new hero.

One Voice Suggesting Money Market Mutual Fund Risk is Not Worth It

Bill Fleckenstein, here, who advocates government guaranteed debt instruments maturing in a year or less, or FDIC insured cash accounts:

For the risks associated with [big money market funds], investors are getting paid a whopping one basis point (0.01%, or one one-hundredth of 1%). ...

The point in all of this is that because no one is being compensated no matter where they put their savings, there is really no point in taking any risk at all. Thus, it probably makes sense for those who can to shift their holdings to Treasury bills.

Another Enemy of the Mortgage Interest Deduction

Bloomberg.

Editorial here.

The hard fought war to subsidize the nuclear family has been lost from within. Dissolve the nuclear family through cultural decadence, and suddenly its members no longer value its advantages because they do not experience them. By choice.

The fool and his money soon are parted, one from the other.

Too stupid now to know how good they could have had it.

The loudest voices against the deduction stand to gain the most.

Asset Allocation: The Big American Picture, Built on Debt

Cash:   14 percent ($8.3 trillion)

Stocks: 27 percent ($16 trillion)

Bonds: 59 percent ($35 trillion)