Your Real 5-yr. Rate Of Return In Stocks Has Been Poor, Actually

The real rate of return in the S&P500 for the five years from February 2008 to February 2013 hasn't been all that good, actually. Just 2.61% per year. And long term investors have had to stomach all the volatility just to get that measly return. Meanwhile investors in the Vanguard Total Bond Market Index Fund have received returns in excess of 5%, while being able to sleep at night.

Has it all been worth it, Ben?

Calculator available here.

Case Shiller Home Price Index In February 2013 Dollars Flirts With Historic Highs

The Case Shiller Home Price Index re-calculated for inflation in February 2013 dollars at 136.11 is today 11.6% elevated from the historic mean of 121.96 going back to . . . the 19th Century.

The 122 level on the index is a veritable polestar of housing prices for forty years from the 1950s until the recent housing bubble, with 140 representing the rare high water mark of prices in the 1980s . . . and the 1890s.

From a long term perspective prices today are elevated and represent a good time to sell. Prices are only low if you think the housing bubble is repeatable.

And it must not be forgotten that the data from the housing bubble itself contributes to elevated mean and median prices on the index, biasing them upward.

First Time Claims For Unemployment NSA Below 300K For Only 2nd Time For Obama

The report is here. The report is good news.

Libertarian Sen. Rand Paul Embraces Form Of Amnesty For Illegal Aliens

Hardly anything good ever comes from libertarianism, including this "not-amnesty-amnesty" from so-called conservative Republican Sen. Rand Paul:

In year two of [Sen. Paul's] plan, illegal immigrants would begin to be issued temporary work visas, and would have to wait in line behind those already in the system before moving forward toward citizenship. A bipartisan panel would determine the number of visas per year. High-tech visas would be expanded and a special visa for entrepreneurs would be issued.

Different from other approaches, Paul would not attempt to crack down on employers by expanding working verification systems, something he says is tantamount to "forcing businesses to become policemen."

"My plan will not grant amnesty or move anyone to the front of the line," Paul says. "But what we have now is de facto amnesty."

All this will do is encourage a flood of more illegals looking for temporary work visas. And if it were really true that we have de facto amnesty now, one wonders then what is the urgency of the issue. Issuing a temporary work permit is the real de facto amnesty.

Sen. Paul must think that telling bald-faced lies works for Obama, so he might as well try it.

Chinese Abortion Ratio To US Perfectly Mirrors Exchange Rate

336 million dead from abortion in China v. 55 million in US over 40 years. That's a ratio of 6.11:1.

The yuan currently trades at 6.22:$1.

Rush Limbaugh Rightly Attacks Libertarian Idea Of Freedom

Today, here:

"[F]reedom" is taking on a whole new meaning, incorrectly and dangerously so. I might say -- and I know I'm gonna make some people mad by saying this. But this very broad definition of freedom that is used to, for example, justify gay marriage, is being advanced not just by radical leftists but by libertarians as well, and even some conservatives. ...

Freedom without virtue isn't freedom.  It will eventually destroy a society.  Freedom without morality. Freedom without proper constraints and restraints. Freedom without an accompanying sense of responsibility. Freedom without a spine or a spinal cord of morality.  We're not talking freedom.  But in today's modern vernacular, we are.  To young people today, that's exactly what freedom is. 

Freedom is hedonism.  Freedom is your sybaritic pursuits.  You do whatever you want, and as long as it doesn't hurt anybody else, there's nothing wrong with it.  And it's the "as long as it doesn't hurt anybody else," that's where the trouble begins.  Because is there great harm to a society when an age-old, I mean, as old as humanity itself custom is corrupted?  Any custom, any tradition that has demonstrated its usefulness, its primacy over hundreds of thousands of years, is a freedom that would corrupt that, actually good?  Is it virtuous?  It isn't. 

Libertarian Sen. Rand Paul Would Throw Everyone "Married Filing Jointly" Under The Bus

Pro-family forces fought long and hard to secure tax preferences for couples trying to raise children for the future in the aftermath of World War II, and libertarian Sen. Rand Paul would give it all away to appease the gay mafia. This is what passes for conservative Republicanism these days.

If you don't know by now that libertarianism is a threat to traditional Americans, you haven't been paying attention.

Story here.

Libertarian Charles Murray Comes Out For Same Sex Marriage

At CPAC, where else?

Story here.

Liberty, Illustrated

This is liberty.

This is not.

Diabolus Duplicetur

Europe: Where Your Money Has Nothing To Fear But The Bank Itself

US Stock Futures Are Down Sharply On Euro Confiscation Gambit

Haven't seen numbers like this in a while.

The market is like the devil: one little word can fell him.

US Banks Still Keep Literally Trillion$ In Liabilities Hidden Off Balance Sheet

So said Floyd Norris just last week, for The New York Times, here.

And you thought they laundered money only in Cyprus.

The New Motto Of The European Central Bank

"The European Central Bank, where your money has nothing to fear but the bank itself."

Cyprus Bailout Deal Amounts To Robbery Of Ordinary Citizens' Accounts

The Chair of the European Parliament's Economic and Monetary Affairs Committee, Britain's Liberal Democrat Member of the European Parliament, Sharon Bowles, comments here on today's news that Cyprus residents, regardless of nationality, must agree to confiscation of personal savings (at either 9.9% or 6.75% of the total) in exchange for an EU bailout, or face a messy national bankruptcy:

"This grabbing of ordinary depositors' money is billed as a tax, so as to try and circumvent the EU's deposit guarantee laws. It robs smaller investors of the protection they were promised. If this were a bank, they would be in court for mis-selling.

"The lesson here is that the EU's Single Market rules will be flouted when the Eurozone, ECB and IMF says so. At a time when many are greatly concerned that the creation of the 'Banking Union', giving the ECB unprecedented power, will demote the priorities of the Single Market, we see it here in action.

"Deposit guarantees were brought in at a maximum harmonising level so that citizens across the EU would not have incentive to move funds from country to country. That has been blown apart.

"What else will be blown apart when convenient? All the capital requirements we have slaved over, what about the new recovery and resolution rules? What does this mean for confidence in cross-border banking and resolution and preventing the fragmentation of the banking sector?

"When the dust has settled on this deal, which I hope it never does, we will see that the Single Market has been sold down the river for a shoddy price. All the worse as the consequences for Cyprus of the Greek bond haircuts were obvious."

The UK Guardian has a full report here, Reuters here. The cost of the 10 billion Euro bailout is to be offset by the confiscations, totaling as much as 6 billion Euros, perhaps half of which will come from rich Russians living on Cyprus. ATMs on the Mediterranean island nation ran dry before noon yesterday.

Of such small sparks are conflagrations made.

TNR Blames And Credits JK Galbraith For Contemporary Financier Fascism

It would be nice if liberals could make up their mind.

The New Republic's Tim Noah here traces TARP, Dodd-Frank and ultimately the general state of regulatory capture (Stigler) of the government by the banks to John Kenneth Galbraith's vision in his 1967 The New Industrial State:

Galbraith (who died in 2006) argued that big U.S. corporations had become immune to competition. Any effort to break them up into smaller companies would neither succeed nor—given the complex challenges of a modern economy—be especially desirable. Better to keep them in harness through a partnership with government. “Planning,” Galbraith wrote (in a sentence you could probably get arrested for writing today), “must replace the market.”

Galbraith was writing about manufacturing giants like General Motors and U.S. Steel. These seemed indestructible at the time, but of course they would soon prove all too susceptible to competition from abroad. Still, Galbraith’s vision of the regulatory state comes pretty close to describing today’s relationship between the federal government and a different oligopoly: the Big Six megabanks. ...

When the 2008 financial crisis hit, the feds went into Galbraithian planning mode. They bailed out the banks through the Troubled Asset Relief Program (TARP), arranged mergers, and, through the Dodd-Frank bill, required big banks to prepare “living wills” showing how they would dismantle themselves in orderly fashion should the need arise. ...

Conservatives were wrong to oppose the government’s bank rescue . . ..

For conservatives who feel queasy advocating the breakup of private enterprises, MIT’s Johnson offers this consolation: Remember George Stigler. Stigler, a conservative economist who died in 1991, won the Nobel for a theory that basically said Galbraith’s partnership approach didn’t work because of “regulatory capture,” i.e., the various ways corporations tame their minders—for example, by maintaining a revolving door between industry and government. Rather than try to control powerful corporations, Stigler thought government should use antitrust law to break them up and let competition rein them in.

What's wrong with this analysis is that banking is not a private enterprise and hasn't been since 1913. The then new partnership of banking with government in 1913 failed in less than 20 years, requiring Glass-Steagall in 1933, which was reactionary liberalism at work. And what we have just witnessed is an instant replay of that debacle, only in faster motion. The Gramm-Leach-Bliley Act of 1999 overturning Glass-Steagall took only 9 years to blow up. But unlike Glass-Steagall, the grotesque of interventions in the wake of this latest panic has done nothing to demarcate clearly the public vs. the private in banking, and consequently keeps the public, and the country, at risk while insuring advantage to those closest to the printing presses at the Treasury. Money goes to money, as they say out in the sticks.

It's not much solace that liberalism's fingerprints have been and continue to be all over the inception and development of financier fascism in the United States. There don't seem to be any conservatives smart enough to understand the advantage it presents to them, and to the country. Or maybe it's just that they've been captured, too.

Sarah Palin Remains A Vulgarian

At CPAC, reported here:

Palin also regaled listeners with a look into Christmas at the Palins. (Palin is set to pen a holiday book later this year.) She said her husband, Todd, got her a metal gun rack for the back of a four-wheeler, and she gave him a rifle. “He’s got the rifle, I got the rack,” she said.

NR called the speech "sprawling", as in "she lay sprawled on the bed, legs spread out".

Republicans, Esp. Mitt Romney, Still Don't Understand There Is No "End" In Politics

Here's Mitt Romney at CPAC, saying "in the end" we'll win:

"Each of us in own way is going to have to step up and meet our responsibility. I'm sorry I won't be your President, but it will be [as] your coworker and I [will] work shoulder-to-shoulder along side you. You see in the end we'll win. We will win for the same reasons we have won before . . .." 

Oh really. If we won before then why do we need to win again? We must have lost somewhere along the way if we have to win again. This is the mistaken thinking of politicians and the people who follow them, that political victories are somehow permanent, especially if we get the right people in there, meaning "us" as opposed to "them".

What it betrays, depending on the source, could be any number of things including narcissism and hubris, but perhaps in this case we see an ideological frame of mind as opposed to a conservative one, the kind of mind which imagines, or at least sells, a better future which unfortunately never arrives because it cannot arrive, due to the minor detail that the future like the present will be populated by the same flawed individuals as ourselves.

Marxists like Obama think that way, and so do too many religious people. And too many Republicans to be legitimately called conservatives, which is a main reason Romney did not appeal as a clear alternative.

CPAC clapped anyway.

Inflation In The 1970s, Illustrated

In the 1950s Woody Hayes taught the football offense known as "three yards and a cloud of dust".

By 1973 my line coach, Fritz Goettel, who passed away in July 1993, insisted on five.

The Banks Rule America And Blaspheme Against Capitalism

In "Bankistan Vanquishes America" here Barry Ritholtz rages against the criminal enterprise under which we live, with a rash of supporting links. Under Clinton, Bush and Obama, its grip has only gotten tighter.

From the conclusion:

On the other side lay the bank apologists, corrupted politicians, and crony capitalists. They advocate the Big Lie of the financial crisis. They choose to ignore the facts and data that disprove their narrative. They continue to push the lies that the bailouts were a good investment. (They weren’t). They work against the Bipartisan consensus that the giant banks should be broken up. They ignore the many former bank CEOs who call for the break up of “Too Big to Fail” banks. They mandated that GSEs were banned from Lobbying, but they made sure that the big banks retained their influence peddling and hold on Washington DC.

They no longer represent the voters of their districts, but instead are the elected representatives of Bankistan.

And unless we do something — and soon — they will vanquish America.

Things haven't changed much since 1819 when the revolutionary paper of fictitious capital resulted in fraudulent bankruptcies on the backs of real capital, real property and commerce (think of today's zero interest rates returning nothing to retirees, collapse in the value of housing long purchased honestly, and moribund GDP and zero velocity money punishing millions with unemployment):

The enormous abuses of the banking system are not only prostrating our commerce, but producing revolution of property, which without more wisdom than we possess, will be much greater than were produced by the revolutionary paper. That too had the merit of purchasing our liberties, while the present trash has only furnished aliment to usurers and swindlers. The banks themselves were doing business on capitals, three fourths of which were fictitious: and, to extend their profit they furnished fictitious capital to every man, who having nothing and disliking the labours of the plough, chose rather to call himself a merchant to set up a house of 5000. D. a year expence, to dash into every species of mercantile gambling, and if that ended as gambling generally does, a fraudulent bankruptcy was an ultimate resource of retirement and competence. This fictitious capital probably of 100. millions of Dollars, is now to be lost, & to fall on some body; it must take on those who have property to meet it, & probably on the less cautious part, who, not aware of the impending catastrophe have suffered themselves to contract, or to be in debt, and must now sacrifice their property of a value many times the amount of their debt. We have been truly sowing the wind, and are now reaping the whirlwind. If the present crisis should end in the annihilation of these pennyless & ephemeral interlopers only, and reduce our commerce to the measure of our own wants and surplus productions, it will be a benefit in the end. But how to effect this, and give time to real capital, and the holders of real property, to back out of their entanglements by degrees requires more knolege of Political economy than we possess. I believe it might be done, but I despair of it’s being done. The eyes of our citizens are not yet sufficiently open to the true cause of our distresses. They ascribe them to every thing but their true cause, the banking system; a system, which, if it could do good in any form, is yet so certain of leading to abuse, as to be utterly incompatible with the public safety and prosperity. At present all is confusion, uncertainty and panic.

-- Thomas Jefferson