Libertarian Megan McArdle Makes Me Want To Puke

Because she thinks there is anything which can make abortion humane, here:

"I knew about the Gosnell case, and I wish I had followed it more closely, even though I'd rather not.  In fact, those of us who are pro-choice should be especially interested.  The whole point of legal abortion is to prevent what happened in Philadelphia: to make it safer and more humane.  Somehow that ideal went terribly, horribly awry.  We should demand to know why."

Abortion at any stage is the brutal murder of another human being, the mark of an unrefined, barbarous people, and our country is full of them. To exercise humanity in this situation would be to sterilize every woman who comes into an abortion clinic, and every man who put her there. They should have no right ever again to inflict such pain and injustice on another utterly defenseless human being.

Robert Samuelson: Obama Is Timid, Lazy, Phony, Tiny and Small

"Timid, lazy, phony, tiny and small" doesn't quite have the same ring as "solitary, poor, nasty, brutish and short", but you never know, it might catch on.

Here:

There is something profoundly timid about President Obama's proposed $3.778 trillion budget for 2014. ... [T]he budget is a status-quo document. It lets existing trends and policies run their course, meaning that Obama would allow higher spending on the elderly to overwhelm most other government programs. This is not "liberal" or "conservative" so much as politically expedient and lazy. ...

Obama remains unwilling to grapple with basic questions posed by an aging population, high health costs and persistent deficits. Why shouldn't programs for the elderly be overhauled to reflect longer life expectancy and growing wealth among retirees? Shouldn't we have a debate on the size and role of government, eliminating low-value programs and raising taxes to cover the rest? The "spin" given by the White House -- and accepted by much of the media -- is that the president is doing precisely this by putting coveted "entitlement" spending on the bargaining table.

It's phony. Compared with the size of the problem, Obama's proposals are tiny. The much-discussed shift in the inflation adjustment for Social Security benefits to the "chained" consumer price index would save $130 billion over a decade; that's about 1 percent of projected Social Security spending of $11.23 trillion over the same period. ...

The work of politics is persuasion. It is orchestrating desirable, though unpopular, changes. (Popular changes don't require much work.) . . . Already, his small proposed cuts in Social Security benefits have outraged much of the liberal base.

So Obama has taken a pass. He has chosen the lazy way out. He's evading basic choices while claiming he's bold and brave. ...

Despite Gold's Drop, Gold/Oil Ratio Finishes The Week At Oil-Bullish 16.45

texasbullfights.com

Even at the spot price of gold of $1,477 after the NY close the ratio is 16.18, indicating that oil remains on sale relative to gold.

Gold closed at $1501.40, well below what is understood to be a key support level of $1,521. There is talk of price falling to below $1,300 by early 2014.

At current prices of oil around $90, $1,300 gold would be an attractive buy, but it remains to be seen if oil can remain that expensive in a period of reduced demand due to chronic, severe unemployment, increasing domestic supply from oil shales, replacement of diesel with natural gas and increased passenger vehicle efficiency standards.

Rising dollar strength from early February to as high as 83.22 on the index in late March may well be the result of these oil trends, along with relative constraints on US federal spending due to divided government and more certainty about government revenue streams due to the settlement of long-standing income tax impermanencies. 

Gold Fell Out Of Bed Today, Dropping 4%

The carnage continues in after hours trading with spot prices around $1,477 the ounce.

It is thought in some quarters that the terms of the Cyprus deal requiring Cyprus to sell some of its gold to contribute for its bailout sets a bad precedent for other periphery countries in the Euro who may also be asked to sell gold to help pay for bailouts. The increased supply would be hugely negative for prices.

Sounds like people got out of GLD in particular big time just as the rumors were breaking in the middle of the week, and today the facts are spreading a dim pall over the entire gold market.

Deposit confiscation, then sovereign gold. Are they going to start going through the safe deposit boxes, too?

Real Retail Remains In Depression, Still Over 8% Down From 2005 Peak

Doug Short explains his chart, here.

Real retail remains mired in a depression, despite the progress made digging out of the bottom of the hole reached in 2009. Adjusted for population and inflation, and backing out gasoline sales which Short rightly deems a tax, the current level remains over 8% off the 2005 peak, eight years ago.

Russia Was Just The Excuse For The Eurogroup To Steal From Cyprus

So says Ambrose Evans-Pritchard, here, for the UK Telegraph:

"First they purloin the savings and bank deposits in Laiki and the Bank of Cyprus, including the working funds of the University of Cyprus, and thousands of small firms hanging on by their fingertips. Then they seize three quarters of the country’s gold reserves, making it ever harder for Cyprus to extricate itself from EMU at a later date. ...

"Cypriots are learning what it means to be a member of monetary union when things go badly wrong. The crisis costs have suddenly jumped from €17bn to €23bn, and the burden of finding an extra €6bn will fall on Cyprus alone. ...

"The workhouse treatment of Cyprus is nevertheless remarkable. The creditor powers walked away from their fresh pledges for an EMU banking union by whipping up largely bogus allegations of Russian money-laundering in Nicosia. A Council of Europe by a British prosecutor has failed to validate the claims. The EU authorities have gone to great lengths to insist that Cyprus is a 'special case', but I fail to see what is special about it. There is far more Russian money – laundered or otherwise – in the Netherlands. The banking centres of Ireland and Malta are just as large as a share of GDP. Luxembourg’s banking centre is at least four times more leveraged to the economy. ...

"The original plan in Cyprus – approved by the Eurogroup, but rejected by the Cypriot parliament – was to steal the money from any bank regardless of its health, and from small depositors regardless of the €100,000 guarantee. They have shown their character. The Eurogroup don’t give a damn about moral hazard. They are thieves."

Jim Cramer Still Thinks You Are A Fool. He May Be Right.

M1 since the 2008 panic

M2 since the 2008 panic

M2 is up $2.71 trillion since the crisis, M1 $1.05 trillion. That means since September 1, 2008, nearly 39% of the rise in M2 is directly the result of the increase in M1 (checkable deposits, i.e. the spending money in circulating cash and checking accounts).

Overall, M1 is up nearly 75% over the period, but M2 just 35%. But back out the M1 and M2 is up only 21% net, or $1.66 trillion. Still, that's a lot of moolah being saved and not flowing into stock markets.

Enter Jim Cramer, who here says that as CD instruments (M2) mature now, they will not be rolled over but get invested in the only thing going for return, namely stocks:

"Every-day CDs from the halcyon days of the middle of the last decade, when rates were going higher, will come due -- and the dramatic decline in the rollover CDs should force that money into the stock market. Invariably I hear that this flow won't amount to a lot of money. Just dismiss these people out of hand; they are either short or ignorant."

"Force"? "I hope" is more like it. I smell a book-talker.

Most of this CD and money market fund money is money of "households", small time stuff under $100,000. With plunging returns on savings over the period as the US Federal Reserve Bank pursues its policy of financial repression through zero interest rate policy, Cramer is hoping households will suddenly become the greater fools with markets at all time highs and plunge into stocks even though households have been net negative all along since the crisis, pulling out $250 billion from the stock markets according to widely reported figures from Standard and Poors.

In contrast to households it's the funny money which has been driving the markets higher, banks and other corporations doing stock buy-backs to the tune of $1.2 trillion net over the period. Most troubling of all, a year ago already banks were reported to be responsible for fully 32% of the ownership of the total market all on their own, rivaling the household sector's 37% share. If you want to understand how markets are up so much, you have to look there.

Suckers who took Cramer's sell advice in early October 2008, people who "need their money in the next five years", have entirely missed this bank-driven rally which has been aided and abetted by the Fed. And potentially they lost as much as 25% right up front in just the first three weeks after his sell announcement on the nationally televised NBC Today Program, before the markets opened on Monday morning, October 6, 2008, the Monday after TARP was signed.

And here he is, 4.5 years later, hoping people will take his advice again and plunge in because there's plenty of liquidity to keep markets buoyant. Well, plenty as long as you provide it.

You know. Sell low, buy high.

They should hang a warning label around that guy's neck.

For What The Nation Earns Homes Are Still Overpriced (15%)

So says Bloomberg Businessweek, here:

"[H]ouses are overvalued. From 1988 through 1999, median home values averaged 2.6 times the median annual income. As the bubble kicked into gear, prices pushed up to almost four times income. With the crash, that ratio has come down—but not far enough, largely because incomes have been stagnant, if not declining, in recent years. Home values are now at three times the median income—that’s 15 percent higher than they have historically been, relative to what Americans earn."

From the point of view of the Case Shiller Home Price Index, a 15% correction to the current index value of 136 would imply 115.

In the post-war period, we have witnessed 115 on the index in December 1982, March 1975, December 1973, September 1968, and December 1952.

Jim Cramer Blames President's Fear-Mongering Over Sequester For March Jobs Number

Here:

"I think the report can be totally explained by our Fear Monger in Chief (i.e., President Obama), who scared the heck out of everyone as he talked about the massive job losses coming from sequester. I am sure that'll be the case, but the real impact here was similar to the U.S.'s pre-cliff non-dive, when the country's business was frozen."

35% Of Long Islanders Seriously Delinquent On Mortgages, Banks Not Foreclosing

And the people just keep living in the homes so long the notices of default expire and have to be refiled.

So says Keith Jurow for BusinessInsider here, who thinks the recovery in the housing market is a mirage actually created by the banks to help them unload some inventory at higher prices:

"I have solid figures from the Federal Reserve Bank of New York on the number of first mortgages in both NYC and Long Island. So the latest figures from the NYS Division of Banking indicate that roughly 30% of all owner-occupied properties in NYC are now seriously delinquent. For Long Island, it is an incredible 35%. ...

"Had the banks been foreclosing in the NYC metro, then the total number still delinquent would certainly be much lower than the Division of Banking figures. But the banks are not foreclosing in the NYC metro. I have shown this in several previous articles. ...

"Once a filing (called a notice of default) has been active for three years, it expires under NY state law. So the attorney for the lender has to refile the notice and begin the process all over. Picture those owners living in their house for more than three years without having paid a nickel toward the mortgage. It’s crazy, but that is what is occurring throughout Long Island." 

US Prints Record 3+ Billion $100 bills in 2012

The US Bureau of Engraving and Printing issued a record 3.0272 billion individual $100 bills in fiscal year 2012, according to its website here. Production problems with the new $100 bill for 2011 release as reported here resulted in only $72.32 billion in $100 bills being produced in fiscal 2011. The $100 note is the most produced paper currency in the US, averaging $173 billion worth annually for the last five years.

The $100 denomination's print run in fiscal 2012 alone is worth $302.72 billion.

The total production figures since 2008 for all paper money are as follows, averaging $216 billion annually:

2008 $154.2 billion

2009 $219.5 billion

2010 $239.5 billion

2011 $109.7 billion

2012 $358.9 billion.

Since over 90% of the notes replace money which is or has been in circulation, on average about $21 billion annually is actually being added to the currency supply, which is peanuts in a banking system with in excess of $10 trillion in deposits.

It is reported here that total circulating cash presently comes to about $1.175 trillion, so it would take about 6 years to replace all circulating currency at current production levels, perhaps a little longer as some currency effectively disappears because it is destroyed in accidents, sold on the collector market, or hoarded, the latter becoming more popular abroad. Currency in circulation, however, appears to be up about 26% since 2010 when $930 billion was reported to be in circulation. That's an increase of $245 billion in just over two years, which is curious if it's true since one might expect an increase of barely $50 billion over that short a time.

If that is thought to be highly inflationary, however, the figure actually pales in comparison to the real money increase in the country since 2008, namely total credit market debt outstanding, which is up $4.5 trillion to October 2012.

Margaret Thatcher Was No Libertarian, Moving Leftward To Adapt Like Sen. Rand Paul

Marco Rubio, are you listening?

Ben Domenech, here:

Thatcher was originally seen as a Heath acolyte within the Tory wing, given a cabinet position in Education – but the distance between them grew, and she became closer to fellow Cabinet member Keith Joseph, forming a tiny band of back benchers disagreeing with the aims of the party leadership. ...

Heath’s approach failed at the ballot box. After losing the election in 1974 and failing to form a coalition government with the Liberal Party (a No Labels-esque Government of National Unity), he took it as a sign that the Tories had to move leftward in order to adapt to the opinions of the nation. Thatcher disagreed, and that made all the difference. When Joseph announced that he would challenge Heath for party leadership, Thatcher was the only Cabinet member to endorse him; when Joseph was forced to withdraw (thanks to demography comments implying the working class really ought to consider using birth control more regularly – the speech is here), he was forced to withdraw. So Thatcher insisted she would run. ...

The dominant assumption was that [Thatcher] would have to moderate to become acceptable to the British people. She did not. Instead, she repackaged conservative principles with a message of common sense and optimism, attacking nonsensical regulation, union dominance, and high taxes with verve. She promised hope and growth, not dour austerity, and insisted that acceptance of a nation in decline was a choice, not an inevitability.

Thatcher: "Socialist governments ... always run out of other people's money."

Llew Gardner:

There are those nasty critics, of course, who suggest that you don't really want to bring them down at the moment. Life is a bit too difficult in the country, and that … leave them to sort the mess out and then come in with the attack later … say next year.

Mrs. Margaret Thatcher:

I would much prefer to bring them down as soon as possible. I think they've made the biggest financial mess that any government's ever made in this country for a very long time, and Socialist governments traditionally do make a financial mess. They always run out of other people's money. It's quite a characteristic of them. They then start to nationalise everything, and people just do not like more and more nationalisation, and they're now trying to control everything by other means. They're progressively reducing the choice available to ordinary people. Look at the trouble now we're having with choice of schools. Of course parents want a say in the kind of education their children have. Look at the William Tyndall School—an example where the parents finally rebelled. Of course they did. These schools are financed by taxpayers' money, but the choice to parents is being reduced.

Look at the large numbers of people who live on council estates. Many of them would like to buy their own homes. Oh, but that's not approved of by a Socialist government …   . oh no! But that's absurd. Why shouldn't they? Well over thirty per cent of our houses are council houses. Why shouldn't those people purchase their own homes if they can?

-- February 5, 1976, Thames TV interview, here

Thatcher's Finest Hour: And So Say All Of Us

"She always afterwards regarded the Falklands War as the most important period of her premiership."

-- The UK Telegraph, here

"The Prophet Without Honor In Her Own Country": Thatcher Dead at 87

both free at last

'The second negative [which helped end her prime ministership] was [Mrs. Thatcher's] intransigent attitude to further European integration; this put her in a minority in her own party. But re-reading her strident speeches today gives no sense of them being out-of-date or belonging to a by-gone era. She dismissed the idea of a United States of Europe as a fantasy. I believed in it at the time, but now I see that she was correct. She thought that the European Union should be simply a free trade area with limited co-operation between sovereign nations. That is what an increasing number of us who were once fervent Europeans would like to get back to. As she said in a famous speech in Bruges that was widely criticised: “Working closely together does not require power to be centralised in Brussels or decisions to be taken by an appointed bureaucracy… We have not successfully rolled back the frontiers of the State in Britain, only to see them re-imposed at a European level with a European super-state exercising a new dominance from Brussels.”

'... [I]n light of the perpetual crisis in which members of the Eurozone have found themselves since the onset of the financial banking crisis in 2007 as a result of misjudged integration, those negative judgments now appear wrong. In this respect at least, she was an example of the prophet without honour in her own country.'

-- Andreas Whittam Smith in The UK Independent, here

Since ObamaCare Was Upheld 2.03 Million Jobs Have Simply Disappeared

Ho-ney? I shrank the workforce!

The Supreme Court upheld ObamaCare on June 28, 2012.

Since July 1, 2012, full-time jobs are down 1.335 million over the eight months.

Part-time employment for economic reasons is down 607,000.

And part-time for noneconomic reasons is down 84,000.

So ObamaCare appears to be more negative for full-time jobs, but part-time employment is down also, by 691,000.

ObamaCare doesn't yet appear to be transforming the workforce into part-time. It just appears to be shrinking it, period.

Why Both Bush And Obama Were Re-elected

Bush and Obama both were re-elected in part because full-time jobs under their respective watches started and ended at almost precisely the same levels. Full-time employment was at 112 million and change at the beginning for each, and at 113 million and change at the end for each. 

Full-time jobs were up 1.6% under George W. Bush, and up 0.8% under Barack H. Obama.

Figures are for first terms beginning after accession to office through calendar election years, beginning on Feb. 1 and ending on Dec. 31.

Strange, but true. 

First They Came For Your Silver . . .

First they came for your silver (1964, last year minted).

Then they came for your dollar (1971, final year of dollar convertibility to gold).

Then they came for your tax deductions (1986 Tax "Reform" repealed deductibility of credit card interest).

Then they came for your mortgages (1997, introduction of two year rule to get you to borrow and churn).

Then they came for your banks (1999, allowed commercial banks to act like investment banks but with FDIC backstop).

Now they are coming for your bank deposits (2013, Cyprus), and not coincidentally, your guns.

Next it will be your 401ks and IRAs.

And then?

Of course there were other firsts before 1964, but these will do for now.

Economic Impact Of Lost Full-Time Jobs Since 2007

The level of full-time jobs for the five years between 2008 and 2012 has averaged about 114.2 million.

Peak full-time was 123.2 million in July 2007, so the average level is down from the 2007 peak by 9 million.

Average hourly earnings for all employees in the private sector for the period is about $22.60, or $47,008 per annum.

Times 9 million jobs that's $423.1 billion per year, or $2.12 trillion over the five years.

That's simply the payroll cost savings to American business, without adding in savings from no longer having to pay Social Security matching, unemployment insurance and workmen's compensation insurance premiums, and all the other benefits like health insurance, retirement and the like. The savings to business could easily have reached $2.5 trillion to date.

If you are wondering where business got the $1.2 trillion it has used for stock buybacks during the crisis, now you know.

March Unemployment Drops To 7.6%, Full-Time Work Still In Depression

You talkin' to me?

The full pdf report from the Bureau of Labor Statistics is here.

The official number of unemployed fell to 11.7 million from 12.0 million last month, but nearly 500,000 left the civilian labor force in the seasonally-adjusted measure. In the raw measure the civilian labor force participation rate is down to 63.1%, the only other example of which in the data going back to 1948 was in July 1976. Those not in the labor force rose year over year by about 2.5% to almost 90.5 million.

Multiple job-holding is up barely 2% year over year in the report. Full-time with a secondary part-time job is up 7.7% year over year. Holding two part-time jobs is down 7.9% year over year. Part-time for both voluntary and involuntary reasons is not much changed year over year: Voluntary is up about 1.2%, involuntary is actually down less than one half of one percent in the seasonally-adjusted category, but down 1.7% in the raw numbers. . . . I'm not yet seeing any convincing evidence in the data to date that ObamaCare is part-timing the country in general. Full-time by either measure is actually up a little, by about 0.7% year over year.

Total nonfarm employment is either 134.5 million not-seasonally-adjusted, or 135.2 million seasonally-adjusted, up less than 1.5% year over year. Peak was in January 2008 at 138 million seasonally-adjusted, so the depression in employment continues, driven by the loss of full-time jobs, which in the raw measure are still down 8.4 million from the July 2007 peak, or 6.8%.

Jobs added per month on average for the last year has been at the level of 169,000. Both January and February saw upward revisions to the previous reports of jobs added in the neighborhood of 30,000 each month. Jobs added in March at 88,000 looks like a big stall in the trend, but we'll have to wait a month or two for the revisions to say that with certainty.

At the current rate of job addition, Obama will be long gone (one hopes) before full-time jobs come back. Of the 169,000 jobs added per month on average in the last year, only somewhere between 63,000 and 73,000 are full-time per month based on the year over year gains in full-time. Call it 68,000 per month, that's 816,000 per year, so it will take only 10.3 more years to add back those 8.4 million full-time jobs we're down and get us back to the level of 2007 . . . in the year 2023.

Way to go, Brownie!