What, Me Worry?

TARP Was Designed to Accommodate the Fat Cats

If my memory serves me right, the whole idea was dreamt up in the first place by people at Bank of America and actively pushed in Congress long before the collapse of autumn 2008, according to a story in the New York Times from early 2008. I'd better go find that.

Anyway, TARP was for the fat cats, if not of and by them, too. And so says banklawyersblog.com, here:

[I]t's galling that special action was taken at the highest levels to accommodate the fat cats, while providing any TARP for the little guys was at first an afterthought, and that now that many of the small banks took that capital, no one in Congress or the federal banking agencies is falling all over themselves to relax any rules (e.g., amortization of CRE losses) to help them [exit] before the dividend rates rise.

My new best friend.

S&P 500 Close at 1155, 26 Percent Off the October 2007 High

For technical analysts, such a datum signifies that we are in a long term bear market since at least 2007 because the decline persists below 20 percent.

Today the Shiller p/e ratio is 19.79, shown here:

314 percent higher than the all-time low in 1920;

25 percent higher than the median;

20.5 percent higher than the mean;

and 55 percent lower than the all-time high in 1999 -- when a child was born somewhere, to mark that occasion, I am sure. Think of that: To be born at the height of irrational exuberance. I know such a person, but I didn't know the fact at the time.

A crash in the p/e ratio from here to the historical nadir would mean a collapse of nearly 76 percent.

Unthinkable? No. It is not necessary for such a crash to occur from a great height in the p/e ratio.

The collapse to the nadir in 1920 was from a p/e ratio lower than 25, as was nearly the case also in the early 1980s.

Price, and condition, that's all that matters, says the realtor. So should we all say. 

Steve Jobs on Family

Seen here:

“Steve made choices,” Dr. Ornish said. “I once asked him if he was glad that he had kids, and he said, ‘It’s 10,000 times better than anything I’ve ever done.’ ”

Rush Limbaugh Says The Banks Were Victims, The Bailouts A Success!

And the Tea Party got all hot and bothered over what, exactly?

Santelli's rant against the $75 billion mortgage bailout program called HAMP on CNBC? Noboby heard it!

The interventions bailing out private corporations like GM, Chrysler, and AIG, etc? Why, totally meaningless! Didn't happen!

This gag never appeared anywhere:

Nearly 400 failed banks haven't failed.

The FDIC hasn't had to pay $80 billion because of it.

1000 more with $400 billion in assets aren't really in danger.

Taxpayers aren't on the hook for $160 billion and rising for Fannie Mae and Freddie Mac. 

$10 trillion in taxpayer funds weren't really lent to every Tom, Dick and Hairy Bastard in the world at rock-bottom rates by the Federal Reserve!

The New York Times is simply mistaken that TARP will end up costing the taxpayers $37 billion. The CBO estimate of $25 billion is also quite simply wrong.

Partial transcript here:

RUSH: Will in Amanda, Ohio. You're up first. Great to have you on the EIB Network. Hello.

CALLER: Hey thanks, Rush. Hey, don't you think the one common denominator between the Tea Party and the protesters on Wall Street is a lack of justice? And what I mean by that is the lack of criminal prosecution from anybody from Fannie Mae and Freddie Mac, Wall Street, the banking industry, or even our own government officials.

RUSH: Um, okay --

CALLER: Not one prosecution, Rush.

RUSH: You want prosecution? Oh, "not one." I'm trying to understand. What's the correlation to the Tea Party?

CALLER: Well, the Tea Party gathered great strength after the bailouts that they tried to stop, and I think without the prosecution of anybody for crimes that have brought this country to its knees --

RUSH: Okay, name for me a crime and who you think should be prosecuted. I'm not disagreeing, I just want to know. Obama was asked this question today.

CALLER: Rush.

RUSH: Somebody asked him today, "How come there haven't been any prosecutions?" Who? And for what?

CALLER: I have to untie the other half of your brain for this one. Think about Fannie Mae and Freddie Mac.

RUSH: Okay, when I think Fannie Mae and Freddie Mac I think Barney Frank and Chris Dodd.

CALLER: Absolutely.

RUSH: Okay.

CALLER: But look at the collusion that's taken place between Wall Street and the banking industry and selling the mortgages -- or giving mortgages to anybody -- 'cause we know we can sell 'em off over here and we don't care if they're qualified or not.

RUSH: All right.

CALLER: Do you think there was a lack of fiduciary responsibility from a lot of people?

RUSH: No! I think there was fear of government.

CALLER: The what?

RUSH: I think there was fear of government. You talk about all these mortgage-related projects. Why did they exist?

CALLER: That doesn't justify crime.

RUSH: I'm not saying it does. No, no, no, no. Wait a minute. (sigh) I'm not trying to justify crime, but when you have the... I don't know. ...

Now, it's risky saying this because I sound like I'm coming to the defense of bankers. ...

They were forced to accept the bailout. The banks have paid back their bailouts with interest. The government has made a profit from the bailouts.

Capitalism's Idea of More Efficient Regulation Than the Government Kind

"Failure."

-- Rick Santelli, on The Laura Ingraham Show this morning

Senate Democrat Millionaire Tax Would Pay Less Than 10 Percent of Jobs Bill Cost

In the first year. The Democrat trick is to levy the tax over ten years to pay for a spending bill this year, and to rely on data which is suspect.

So one would have to infer from an AP story here, but you have to do the math:

About 392,000 households would get hit by the Senate Democrats' proposed 5.6 percent tax on income above $1 million, according to an analysis by the Tax Policy Center, a Washington think tank. In 2013, the first year the tax would take effect, those households would see their taxes increase by an average of $110,500, according to the analysis.

The latter figure extracted from that many households comes to just $43 billion, $404 billion short after the money has already been spent.

Socialsecurity.gov reports here, however, that fewer than 80,000 individuals had net compensation in excess of $1 million in 2009, collecting in the aggregate $184 billion. Taxing each and every dollar of that amount, not just the adjusted gross income over $1 million as the Democrats propose to do, would net just $10.3 billion.

The Tax Foundation here has a much more conservative estimate of the numbers than The Tax Policy Center. It says that for 2009 there were just 230,323 tax returns reporting adjusted gross incomes in excess of $1 million, and just 8,148 reporting $10 million or more. (Adjusted gross income captures more than just wage compensation). It calculates that the 5.6 percent millionaires' surcharge all by itself would take an extra almost $45,000 in new taxes from the median filer in this group. That also comes to $10.3 billion in new revenues annually if that median filer is typical of millionaires.

Even over ten years for a one year jobs program Obama needs to get re-elected next year, either the rest of us will be paying the $344 billion the scheme is short, or it just gets added to the deficit, crowding out other spending.

The fact of the matter is, taxing the AGI of everyone in the top half of the country with an extra 5.6 percent surcharge still would not pay for Obama's one time $447 billion jobs spending bill.

That doesn't make any sense!

Senator Reid Goes Nuclear, So Does Senator McConnell

“We are fundamentally turning the Senate into the House."

-- Senator Mitch McConnell, R-KY, quoted here.

Sorry, Mitch, but the 17th Amendment already did that in 1913.

US Homeownership Rate Falls at a Great Depression-Like Rate

So says a story here, but written to obscure that fact:

[T]he U.S. may never return to its mid-decade housing boom peak in which nearly 70 percent of occupied households were owned by their residents. ...

Nationwide, the homeownership rate fell to 65.1 percent - or 76 million occupied housing units that were owned by their residents - from 66.2 percent in 2000. That drop-off of 1.1 percentage points is the largest since 1940, when homeownership plummeted 4.2 percentage points during the Great Depression to a low of 43.6 percent.

Since 1940, the number of Americans owning homes had steadily increased in each decennial census due to a mostly booming economy, favorable tax laws and easier financing. The one exception had been 1980-1990, when ownership remained unchanged at 64.2 percent.


So the recent drop to 65.1 from nearly 70 is 4.9 points (not even mentioned!), or 7 percent, compared with a Great Depression drop to 43.6 from 47.8 (again, not mentioned!), or 8.8 percent.

Instead, the article spins the story with the statistical irrelevancy of the homeownership rate in the year 2000, evidently because the 2000s was the bubble decade, which doesn't count, unless George Bush did it, if it's bad thing.

Another deliberate diversion by AP Obama. 

Sarah Palin Quit a Governorship, and Bails Out of a Race for President

Americans don't like quitters. Just like they don't like bailouts, unless they get one. All the Wall Street occupiers would go home tomorrow if you just gave them what they want: cancellation of their student loans. Political protest? I call it extortion.

I'm guessing the polling in the aftermath of Palin's Sept. 3 "crony capitalism" speech didn't look very good, either, otherwise Sarah would be getting ready to run right now, not announcing that she's quitting before she's begun.

I don't think anyone really believed her on Sept. 3, seeing how she defended the bailouts after McCain's defeat. She got the religion against bailouts long after the fact, then didn't press it home consistently as the number one issue and got sidetracked by all kinds of other stuff, only to find at this late juncture that the issue has, unhappily, lost its intelligibility among the electorate.

Government intervention in the financial sector has been too bewilderingly thorough-going and complex even for the experts to explain, even when they've been against it. Which is why people end up accepting facile explanations, which boobs like Rush Limbaugh excel at explaining and which elites are happy for people to believe as the surest way forward to business as usual.

One day after declining to run, here, Rush Limbaugh is telling his listeners that the bank bailouts were a big success, that TARP has been repaid, and that the banks are on the side of free-market capitalism, so don't be deceived and fall for occupywallst.org.

Too bad we haven't really had any free market capitalism since FDR, just big shots who stand to gain the most because they are the first in line for the money, which other big shots need at preferred rates to do business.

Try to remember that every time Rush takes an obscene profit center time out.

The rest is just entertainment.

Because Occupy Wall Street Refuses to Cooperate, Zuccotti Park Has Not Been Cleaned Since 9/16

Not a single headline like that could be written about The Tea Party.

Story here:

But Brookfield Office Properties, which owns Zuccotti Park, seems to be slowly building a case against protesters, saying Thursday that the protestors are interfering with the use of the park by others and are creating sanitary problems.

“Sanitation is a growing concern,” Brookfield said in a statement. “Normally the park is cleaned and inspected every weeknight. . . because the protestors refuse to cooperate. . .the park has not been cleaned since Friday, September 16th and as a result, sanitary conditions have reached unacceptable levels.”

They don't call 'em dirty commies for nothing.

Rush Limbaugh's Mission Accomplished: Tea Party Absorbed by Republican Party

Otherwise, Rush would not have tried so hard today to disagree with a caller who suggested the Tea Party was born of outrage over the bailouts. He even repeated the MSM mantra that TARP has been repaid in full by the banks, even though the program will end up costing taxpayers $37 billion.

It is apparent Rush now discounts Santelli's galvanizing rant against HAMP on CNBC in February 2009, which first floated the idea nationally of a Tea Party at Lake Michigan in August.

The nascent Tea Party didn't wait for summer.

The reason, of course, is that it is now safe for Rush to spin all that, with Palin and her cronyism message safely out of the way, since she announced yesterday she is not going to run.

Rush doesn't want the troops confused by an anti-bank message now that the left and the unions in league with Democrats and George Soros are in the process of co-opting the original message of the Tea Party. Rush is clearly aware that the Tea Party doesn't have the edge anymore, is politically leaderless, is inured to the problem, and just plain old too tired to mount a new charge against government bailouts. Most of us are graying baby-boomers, after all, taking naps in the afternoon, or wanting to. And some of us are broke.

Besides, Republicans have their mits all over the banking crisis, with New Gingrich and Phil Gramm leading the charge to overturn Glass-Steagall in 1999. Better now to emphasize the private, capitalist character of the banking industry as a target of the socialist left, rather than its dependence on and compromised relationship with the public, government institution called the Federal Reserve Bank, with its phony money and monetarist mission.

Rush Limbaugh the chameleon turns on a dime once again. 

'The Capitolist Pigs and There Damn Banks'

Seen at occupywallst.org here in reply to communist Lloyd J. Hart's posting of Marxist demands:

"I hope these demands get met. I would love to get a check mailed to me every month or week or whatever and not have to work like a slave for it! That would be [       ] sweet as hell. [    ] the capitolist pigs and there DAMN banks. I propose $2000 a month for ALL people in this country including the UNDOCUMENTED CITIZENS. We will take the money from teh DIRTY BANKS and give it to those of us that are DESERVING!" (italics added)

Corect spelin is so bourgeois to teh internet left.

Why the organizers leave that stuff up there even one day after the right has savaged it, I'll never know:

Wait, I do know. They sympathize with it.

Steve Jobs: 'I'm a Big Believer in Boredom'

As reported here:

Jobs usually had little interest in public self-analysis, but every so often he’d drop a clue to what made him tick. Once he recalled for me some of the long summers of his youth. "I’m a big believer in boredom,” he told me. "Boredom allows one to indulge in curiosity," he explained, and “out of curiosity comes everything.” The man who popularized personal computers and smartphones — machines that would draw our attention like a flame attracts gnats — worried about the future of boredom. “All the [technology] stuff is wonderful, but having nothing to do can be wonderful, too.”

Net Revenue from Dem. Surcharge on Incomes Over $1 Million in '09 = $9 Billion

Nowhere near enough to pay for Obama's nearly $500 billion "pass this bill now" jobs bill.

In 2009 (the last year for which the data is available) 78,147 people made more than $1 million in net compensation, according to socialsecurity.gov, here, pulling in about $184 billion. I said "billion."

A 5 percent surcharge on that, which is what the Democrats are proposing to pay for Obama's latest jobs spending bill of nearly $500 billion, is . . . drum roll please . . . $9.2 billion.

Sen. Harry Reid must think the whole country is as stupid as the voters in Nevada who re-elected him, the man Bob "Money Talk" Brinker has called "a good man."

Hell, CONFISCATING EVERYTHING from everyone who makes over $1 million WOULDN'T PAY FOR HALF the proposal.

Do you hear me? A 100 percent tax on everyone making $1 million or more would pay for precisely 41.0 percent of Obama's spending bill. SPENDING BILL! A 5 percent tax pays for 2.0 percent!

Which means YOU are paying to create someone else's MAYBE one year job.

Instant replay of stimulus bill, February 2009.

Reuters' Mike Dolan Gets It Wrong On Depressions

The relevant passage from his story here on the recent debate about whether we've had, face, or are in a depression makes a real hash of it:

But search for a precise definition of economic depression and you'll be hard pressed to find anything more specific than it's more severe than typical business cycle recessions, tends to cross multiple countries and lasts much longer.

Anecdotal rules of thumb -- cited in The Economist magazine and elsewhere -- center on a peak to trough drop in real gross domestic product of more than 10 percent or recessions lasting more than three years.

On that measure, the 1929-1933 Great Depression in the United States qualifies with a 27 percent loss of GDP and a peak unemployment rate of some 25 percent. The shorter 1937 and 1945 downturns qualify on the GDP measure alone too.

"Hard pressed"? The most useful rule of thumb learned way back in my childhood is not even mentioned: back-to-back years with GDP declines, on the analogy of recessions, which are back-to-back quarters with GDP declines. String out a recession long enough with annual GDP failing to surpass a previous high and you have a depression.

People may have to disagree about such definitions, but not about the data behind the theory.

The GDP decline of the 1929 depression is not correctly represented by the writer. Nominal GDP in 1929 was $103.6 billion, falling to its nadir in 1933 to $56.4 billion, a 45.56 percent drop, not 27 percent as the author states. It took until 1941 to surpass 1929 GDP.

Nor did GDP decline from 1937 to 1938 by more than 10 percent. It declined by 6.3 percent, from $91.9 billion to $86.1 billion. But GDP in 1939 exceeded that achieved in 1937, technically not a depression within a depression because there weren't back-to-back years of GDP decline.

And the GDP decline between 1945 and 1946 was a measly 0.36 percent, falling to $222.2 billion from $223 billion. The $1.9 billion decline between 1948 and 1949 was only 0.71 percent.

Missing from the story are the real 10 percent or greater depressions in the 20th century apart from The Great one: the depression of 1907-1911, when nominal GDP fell by 11.1 percent; and the depression of 1920-1925, when GDP fell almost 17 percent. Prohibition, dontchaknow. The roaring '20s were really a lot shorter than ten years.

If the 2008-2009 depression will compare to anything, it will be to 1937-1938's 6.3 percent decline, or to 1913-1916 when GDP fell 6.6 percent. The problem is the numbers are still fluid. The numbers from the Bureau of Economic Analysis still show a nominal decline in one year only, 2009, of 1.8 percent from 2008, despite reports of larger nominal declines in 2008 from 2007 and in 2009 from 2008 in the neighborhood of 3.8 percent.

If it's pretty clear we've had at most only a very small depression, we're technically out of it in 2010 due to government spending. It's equally clear, however, that current GDP is so anemic in the aftermath that we may well repeat the episode.

Prohibition: An Alliance Between Evangelical Christians and Criminals

So said George Will last year in his review of Daniel Okrent's book which details how the women's war on men's drinking inspired a chain of constitutional and social changes ills:

Women's Prohibition sentiments fueled the movement for women's rights -- rights to hold property independent of drunken husbands; to divorce those husbands; to vote for politicians who would close saloons. ...

Women campaigning for sobriety did not intend to give rise to the income tax, plea bargaining, a nationwide crime syndicate, Las Vegas, NASCAR (country boys outrunning government agents), a redefined role for the federal government and a privacy right -- the "right to be let alone" -- that eventually was extended to abortion rights. But they did.

Now the "darkly hilarious" story has been immortalized by none other than Ken Burns on none other than PBS.

Don't miss it.

You can watch it online, here.

Moochelle's June Vacay Flight Costs to Botswana and South Africa: Over $400K

As reported here.

There was no mention of any big game hunted while on safari in South Africa.

Admitting You Drive Drunk Declines 30 Percent Since 2006 Peak To Lowest Level Ever

In other words, the bad economy is producing more lying.

The AP has the full story here:

That led to a CDC estimate of more than 112 million episodes of drunk driving in 2010. CDC officials lamented that finding; still, it was the lowest estimate since the survey question was first asked in 1993, and down significantly from the 161 million incidents in the peak year of 2006.

Rep. Bachmann and Gov. Romney Support Obama's Murder of American Citizen

As reported here.

Rep. Ron Paul thinks it might be an impeachable offense.

Firing squad is more like it.