ObamaCare Abortion Judas, Bart Stupak, Is Actually Thinking Of Running For Gov.

The Democrats in Michigan must really be desperate if they think this guy is a viable candidate. Do Democrats really want their candidate for governor of Michigan to be Bart Stupak, who sold out pro-lifers everywhere to get ObamaCare passed, when the ObamaCare storm hits next year? Or maybe they're just taking drugs again.

"Bart Stupak Democrat Candidate for Governor" would probably be the only thing on God's green earth that would actually get me to contribute some money to the re-election of Gov. Snyder.

Sounds like a Republican plot.

Story here.

Big Whoop: Final Report Of Q4 2012 GDP Comes In At +0.4%

(click the images, as always, to enlarge)

The report from the Bureau of Economic Analysis is here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 0.4 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The pathetic performance is being hailed as good news. It is, like when the guy with the drill stops boring holes in your head, but only good relative to the first awful estimate.

This final revision is a huge revision up from the first estimate of -0.1% and the second of +0.1%. Suddenly growth in the 4th quarter is 4 times better than it was just a month ago. Yet even at that these are remarkable depths for US GDP to be in when the recession is supposed to be long over since 2009.

Speaking of which, it was said by Ben Bernanke back then, here in July 2009, that growth of 2.5% was necessary to keep the unemployment rate constant. So why is unemployment coming down? Even after today we still have growth roundable to zero in Q4, but the unemployment numbers magically came down anyway, from 8.1% last August to 7.7% in February 2013. If weak GDP is having a long term affect on unemployment, I don't see it. Even today's annual averages in the 1.8% and 2.2% range in the report for the last two years do not support Bernanke's assertion in 2009. Unemployment has come down despite such anemic growth rates. And if anything, we should have seen a gradual uptick in unemployment over the last two years because GDP has been insufficient to keep it constant. I don't think Bernanke really knows what he's talking about, and just makes this stuff up to mollify people at the time as he pursues his only real goal: keeping the banks afloat. Everything else is just for public consumption.

And you can put that in your Easter basket, and crack it. 

After 16 Years Minnesota High School Econ Teacher Still Can't Spell

Writing for Forbes, here.

I "disdain" having to point these things out, but someone has to do it.

And, sorry to say, the error is the most illuminating thing about the op/ed.

US Banks Stay In Business Because Of The Fed's Discount Window

So says Jeff Bailey, here:

Bankers will talk about being entrepreneurial and needing the freedom to compete. This is B.S. The only reason they're able to stay in business is FDIC deposit insurance and access to the Fed's discount window for emergency borrowing. They exist by virtue of extraordinary government assistance, and while their shareholders get to [the] upside of this deal, taxpayers are hugely exposed to the downside.

Very few people seem to understand this, or even care anymore. And it's the not-caring that really amazes. The lid was blown off this story by Bloomberg here on Sunday night, November 27, 2011, the end of the Thanksgiving weekend when absolutely nobody was paying attention in the public:

The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

The story became the rage for a time among bloggers who blogged about it at length and news organizations who dutifully reported the astounding figures, but the nation shrugged. Tens of millions of Americans lost their jobs, 5 million residences were forfeit by their owners, and the federal government basically did nothing about it, even protested there was not much it could do, but it made damn sure the bankers and corporations were made good at great expense and risk to the public. Meanwhile the big banks have grown bigger and more dangerous than ever, re-inflating asset prices in the process as they try to repair their off-balance-sheet balance sheets, along with their public ones, and rank and file Americans are basically set back decades because of their losses.

The poor you have always with you, the man from Galilee once told us. Customers of the banks, no doubt, every last mother's son of them.

Wiped-Out Rich Russians In Cyprus' Banks Should Get Remaining Assets In Return

So Steve Forbes, rightly, here:

The deal in Cyprus spares insured deposits, those of less than 100,000 euros. But deposits above that threshold at the two largest and most troubled banks stand to lose money.

Capitalism might suggest that these uninsured deposits would be lost when the bank fails.

. . . [Steve] Forbes makes the case that the government has “mucked things up” since the beginning.

He argues the senior depositors who stand to be wiped out should be first in line to get what’s left of the “good assets” at the “bad banks,” as the FDIC does in the U.S.

Uninsured Deposits: Cyprus, Maybe 17 Billion Euros, America, $4.75 Trillion

All you high rollers had better hope the big banks don't go bust, but that's what the last five years have been all about now, haven't they?

Government of the banks, by the banks, and for the banks. Big banks. Big mutha banks.

"Married", As In "A Man Provided With A Young Woman" (not with a young man)

Latin maritus, noun -- "married man", "husband", ultimately from Proto-Indo-European "provided with a mari" (a young wife, or young woman). Cf. Sanskrit marya -- "young man", "suitor".

A "bad" person, by contrast, is "inferior in quality" from 1200 C.E., from Old English baeddel or baedling, an "effeminate man", a "hermaphrodite", a "pederast", from baedan, "to defile". 

Robert Shiller Says The Problem Is Insufficient Demand. It's Not.

The estimable Robert Shiller wants the problem to be insufficient demand, when the real problem is everyone in government is doing everything they possibly can to prevent what insufficient demand causes: a lowering of the general price level. In a free market we permit, yeah laud, failure. In ours we loathe it. 

Picked up by Slate, here:

"The fundamental economic problem that currently troubles much of the world is insufficient demand. Businesses are not investing enough in new plants and equipment, or adding jobs, largely because people are not spending enough—or are not expected to spend enough in the future—to keep the economy going at full tilt."

Shiller wants to create demand by raising taxes, whereas free-marketeers want demand to develop the natural way, by letting prices fall. Prices falling means some go bankrupt, except for savers who have wisely prepared for such an eventuality by having NOT spent too much in the past. They survive and are rewarded with cheaper goods and services. If they have saved enough they acquire directly the businesses which produce them. Or if not enough, indirectly through purchase of stocks at lower prices.

Preventing such failure, which is really preventing opportunity, is job one in a credit-driven economy, which is why unleashing capital stored in housing was critical in the 1990s, and why the Fed is doing what it is doing now to keep things "at full tilt" in the hollowed out economy. If it didn't, it would expose all the spendthrifts for what they are, and the entire thing would fail.

One can always hope.

Rush Limbaugh's Junk Math Unnecessarily Discourages Republicans

Rush Limbaugh keeps repeating that 4 million Republicans stayed home and didn't vote for Romney, for example, here, on March 12:

"[H]ad four million Republicans shown up to vote, who did vote in '08 but didn't vote in 2012, we wouldn't be talking about an Obama victory."

This just isn't so. I understand Rush wants to blame the base and not the candidate, but this '4 million' assertion simply has no basis in fact.

McCain received 59.95 million votes in 2008, of 131.5 million cast: 45.6%.

Romney received 60.93 million votes in 2012, of 129.2 million cast: 47.2%.

That's almost a million more votes for Romney than for McCain, and as I've said before, in the swing states Romney lost the entire election by just 770,000 votes. McCain lost to Obama in roughly those same states by 1.4 million votes.

You can argue that lower turnout overall by 2.3 million was all Republican lower turnout, but I don't know how you'd know that. Besides, it's a fact Obama received 3.59 million fewer votes in 2012 than he did in 2008. A good share of them must be represented in that 2.3 million total. Splitting the difference, which is probably more unfair to Romney than to Obama, you are left with 1.15 million Republicans staying home minus the 980,000 by which Romney bested McCain.

The bottom line is you're left with 170,000 Republicans who may have stayed home. Peanuts compared to what was needed to prevail in the swing states.

If Rush wants to argue those 4 million he thinks stayed home were somehow replaced by some new Republican voters no one's ever heard of, he's welcome to do so, but as far as I can make out Republican registrations have remained constant longer than just the last two cycles, while Democrat registrations have declined as a percentage of the eligible voter base as more and more people, according to the Bipartisan Policy Center (BPPC), here, bail out of partisan affiliation altogether:

These revised figures further support the trend in the states which have partisan registration toward increased registration for neither party, rising for the 13th consecutive presidential election year. Based on raw and unadjusted registration figures, Democratic registration is 36 percent of eligible voters, down by 2.2 percentage points from 2008; Republican registration is 27.2, unchanged from 2008 and on the same level as it has been for several election cycles. Republican registration has remained steady due to an increase in Southern and Mountain states registration that have compensated for losses in the West and New England. Registration for neither major party is at 23.8 percent of eligible voters, up from 22.0 in 2008 and now nipping at the heels of the two major parties.

In 2012 BPPC estimated eligible voters at roughly 219 million, meaning Republican registrations were nearly 60 million, Democrat nearly 79 million. But as a share of the eligible voters, Democrats continue to lose affiliation while Republicans tread water, which is why Democrats have to work like dogs, lie, slander and spend gobs of cash to win in still pretty conservative places like Ohio, where the margin was 167,000 votes out of 5.6 million cast.

Rush Limbaugh should stop dumping on his peeps. They haven't let anybody down, but their leaders sure have.

Uninsured Deposits Make America A Much Bigger Casino Than Cyprus

According to the FDIC, here, at the end of 2012 there were $7.406 trillion in insured deposits, but that report covers commercial banks only.

According to the FDIC, here, at the end of 2012 there were $9.447 trillion in domestic deposits in the entire system of 7,083 institutions.

Does that mean there are $2.041 trillion in uninsured deposits? It's not that simple, and the number is actually much bigger than that.

Separately in its statistics on depository institutions the FDIC states that at the end of 2012 there were $8.6 trillion held in "domestic offices" of 6,096 commercial banks, of which 62.6% were insured, and $.8 trillion held in "domestic offices" of 987 savings institutions, of which 86.3% were insured. That's a total of 7,083 institutions with $6.1 trillion insured, and $3.3 trillion uninsured. Just over a year ago Felix Salmon put the figure then at about $3.1 trillion, properly not counting those deposits held outside of domestic offices in running the numbers, so the current $3.3 trillion today looks about right for one year later.

With $10.8 trillion in total deposits, however, both inside and outside of "domestic offices", does it not shock you that just $6.1 trillion is insured? That's insurance for just 56% of total deposits, and no insurance for 44%. It's a little misleading of the FDIC to say 64.27 is the percentage insured. Yeah, the percentage of "deposits held in domestic offices", not the percentage of "total deposits". The relevant line is indented in the illustration attached for a reason. It's a subset of what immediately comes before, not of "total deposits".

(Incidentally, at the end of 2003 there were 9,181 total institutions in the FDIC system. Today there are just 7,083, a decline of 23% in almost 10 years, most of it due to consolidation and just 22% due to bank failures since 2003.)

We're told that in the EMU bank heist in Cyprus, 38 billion euros of 68 billion euros in total deposits is held in accounts over 100,000 euros. But that's not saying 38 billion euros is uninsured. Anything over 100,000 euros is not insured, and that's what's getting plundered. But how much is that?

We're told the idea is to raise about 5 billion euros by expropriating depositors' funds, and that now all of it is going to come from the big depositors, not from the people with up to 100,000 euros. Reports say that the hit to these high rollers is going to be in the neighborhood of 30%. Simple math tells you therefore that 5 billion euros raised at a 30% rate must mean uninsured deposits in Cyprus run in the neighborhood of 17 billion euros, or just 25% of total deposits.

In the US it's 44% of total deposits, so whose banking system is the bigger casino, huh Mr. Moscovici?

With banks closed for the last week, the Central Bank of Cyprus imposed a 100-euro daily limit on withdrawals from cash machines at the two biggest banks to avert a run.

French Finance Minister Pierre Moscovici rejected charges that the EU had brought Cypriots to their knees, saying it was the island's offshore business model that had failed.

"To all those who say that we are strangling an entire people ... Cyprus is a casino economy that was on the brink of bankruptcy," he said.

EMU Sees Something Big On Cyprus And Decides To Tax It

Reuters, here:

Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout. ...

Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki's debts and recapitalize Bank of Cyprus through a deposit/equity conversion. ...

The tottering banks held 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros - enormous sums for an island of 1.1 million people that could never sustain such a big financial system on its own.

Velocity of Money Soared Over 35% During the Housing Bubble

Velocity of M1 money soared to unprecedented heights during the housing bubble, dating from the housing provisions in the Taxpayer Relief Act of 1997. Money changed hands at a rate over 35% faster at the peak reached in October 2007 at 10.367 than at the previous high levels around 7.4.

The burst bubble has seen velocity of M1 plunge to 6.5 today after all those years of new highs from 7.5. Velocity in the 6s was common for twenty years between the 1970s and 1990s, and looks to be again.

This is what happens when you convince Americans to unleash all the stored up capital in their homes, and squander it. Thanks Bill Clinton. Thanks Newt Gingrich.

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.