First Report Of Q2 2013 GDP At 1.7%, Q1 Revised Down To 1.1% From 1.8%, Q4 2012 Down To 0.1% From 0.4%

The press release, excerpted below, from the BEA is here, the full pdf with the 14th revision of the comprehensive GDP data is here. The revisions lower in the prior two quarters combined with the low 1.7% first report in Q2 2013 should be extremely troubling to everyone. The economy is crawling.

"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 1.7 percent in the second quarter of 2013 (that is, from the first quarter to the second quarter), according to the "advance" estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP increased 1.1 percent (revised). The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 18).  The "second" estimate for the second quarter, based on more complete data, will be released on August 29, 2013. The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, private inventory investment, and residential investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. The acceleration in real GDP in the second quarter primarily reflected upturns in nonresidential fixed investment and in exports, a smaller decrease in federal government spending, and an upturn in state and local government spending that were partly offset by an acceleration in imports and decelerations in private inventory investment and in PCE."

CNBC Falls In Love With Its GDP Jailer: Average Report Of GDP 0.966% Last 3 Quarters

The only thing GDP beat was poor expectations.

The average report of GDP in the last three quarters is now 0.966%, thanks to 1.7% in Q2 2013.

It feels good in its way when your killer stops stabbing you.

Moronic Shills For Obama At CNBC Call 1.7% GDP "Upbeat"

Only ignoramuses or liars would call GDP of 1.7% "upbeat", so take your pick. Charity demands the former, but I'm fresh out of it.

It is now four years to the day since Ben Bernanke pointed to the need for 2.5% GDP to reduce unemployment (here):

'Bernanke's core message was similar to that he delivered last week in congressional testimony: that the recession should end soon, but that considerable risks remain -- especially relating to the labor market. It takes GDP growth of about 2.5 percent to keep the jobless rate constant, Bernanke noted. But the Fed expects growth of only about 1 percent in the last six months of the year. "So that's not enough to bring down the unemployment rate," he said.'

The Bureau of Economic Analysis comprehensive revision of GDP and related measures going back decades, available here in pdf of 83 pages, now shows the last three quarters to be truly abysmal for this point in a so-called recovery: growth of 0.1%, 1.1% and 1.7% in the last three quarters. Obama's best year to date, 2012, now comes in at a measly 2.8%, far off the new post-war average of 3.4%.

There's nothing upbeat about any of it.

Presidents Haven't Done Their Job In 20 Years Reporting On Visa Overstays

So says a scathing report in The Washington Times here which says the General Accounting Office can somehow do an audit and find out that we've got 1 million overstaying visas right now, or that previously the number was 1.6 million, but the executive branch hasn't ever been able to figure it out in any year in two decades, nor has Homeland Security fulfilled its legal obligation to track exit compliance since 2004.

Maybe it's because presidents don't give a damn? Maybe it's because there's an unspoken agreement between the two parties to keep the flow coming despite what the people want? Because businesses want the cheap labor, and politicians want the extra votes? And oops, some terrorists get in, so sorry, so now we have to spy on everybody to fix that?

Excerpts:

"The GAO said most of the overstays came by airplane, but 32 percent came through land ports of entry, and 4 percent came by sea. The average length of overstay was 2.7 years. ... The executive branch is supposed to report annually to Congress on how many people have overstayed their visas but has failed to do so for the past two decades, saying the information isn’t reliable enough. ... The total of 1 million potential overstays in the country is an improvement from two years ago, when the GAO found Homeland Security had lost track of 1.6 million people. Homeland Security went back and looked at those names and found that more than half had either actually left the country unbeknownst to the government, or had gained legal status that allowed them to remain in the U.S. Of the others, the department decided most were deemed not to be security risks and so there was no need to track them down. But 1,901 of them were deemed significant national security or public safety threats, and 266 of those were still unaccounted for as of March."

Anthony Weiner's Wacky Gifts To Drudge: A Brief History Since 2012

And now a sampling of the treasure trove of innuendo* supplied by Anthony Weiner to Drudge's, er, headlines:

Weiner pulls out

Will Weiner rise again?

Can Weiner rise again?

Weiner's poll rising . . .

Weiner spotted shooting . . . video

Weiner plunges in

Weiner in

Weiner goes in

Cuomo flogs Weiner

Pre-mature Election: Cuomo slaps Weiner

Shumer shies away from Weiner

Poll: Weiner inside . . . margin of error

Weiner erupts after crowd confronts

NYT pulls Weiner . . . story

Shock Poll: Weiner spurts to lead

Poll: Weiner thrusts into lead

Weiner's lead peters out

Huma gathering women for Weiner

Poll: Weiner, Spitzer thrust to NYC lead

Erection Update: Weiner stays in

Erection Update: Pressure mounts on Weiner to pull out

Electile Dysfunction . . .

Poll: Weiner sags

Poll: Weiner goes soft

Dirty Dems: Weiner roasting

Weiner sticks it out

Poll: Younger women love Weiner

*Attention Rio Linda residents: an innuendo is not an Italian suppository

Obama's Jeffersonian Hero, Ho Chi Minh, Was A Mass Murderer

The pro-Hanoi Vietcong began a guerrilla campaign in the late 1950s to overthrow Diem's government. In the North, the communist government launched a land reform program, and executed between 50,000 and 172,000 people in campaigns against wealthy farmers and landowners, amid broader purges. In 1960 and 1962, the Soviet Union and North Vietnam signed treaties providing for further Soviet military support. In the South, Diem went about crushing political and religious opposition, imprisoning or executing tens of thousands.

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The 44th president conveniently forgot Vietnamese history and slandered ours by linking a founder of our democracy, Thomas Jefferson, to the mass murderer Ho Chi Minh. [Vietnamese President Truong Tan] Sang had brought Obama a copy of a letter sent to President Truman from Ho in which the communist dictator spoke hopefully of cooperation with America. Obama, stopping short of yet another apology, mused about what might have been, and noted "we discussed the fact that Ho Chi Minh was actually inspired by the U.S. Declaration of Independence and Constitution, and the words of Thomas Jefferson."

Unemploy An Illegal: Bring On The Lettuce Bots!

Story here:

"Technology is about to take over America's fruited plains - robots, it seems, are all the rage down on the farm, and their introduction and spread will make human farm work a thing of the past."

Home Prices Still Too High: Nationally 24% Pay More Than Half Their Income On Housing

Case Shiller Home Price Index @multpl.com

Joel Kotkin reflects on the still expensive housing market here:

Ownership levels continue to drop, most notably for minorities, particularly African Americans. Last year, according to the Harvard study, the number of renters in the U.S. rose by a million, accompanied by a net loss of 161,000 homeowners.

This is bad news not only for middle-income Americans but even more so for the poor and renters. The number of renters now paying upward of 50% of their income for housing has risen by 2.5 million since the recession and 6.7 million over the decade. Roughly one in four renters, notes Harvard, are now in this perilous situation. The number of poor renters is growing, but the supply of new affordable housing has dropped over the past year. ...

According to the Center for Housing Policy and National Housing Conference, 39% of working households in the Los Angeles metropolitan area spend more than half their income on housing, 35% in the San Francisco metro area and 31% in the New York area. All of these figures are much higher than the national rate of 24%, which itself is far from tolerable.

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Kotkin nowhere mentions that currently expensive housing is explicit Federal Reserve policy. ZIRP and QE are specifically designed to reduce long term interest rates to make home mortgages affordable. Instead those policies have re-inflated housing prices to their historical highs before the bubble and reversed the downward trajectory of price resetting those prices were on.

In June 2013 dollars, the Case Shiller Home Price Index reached its low point after the bubble at 126.30 for the quarter ended March 31, 2012. That level hadn't been seen since June 1998. But from the long term perspective prices should have reset to 120 on the index or lower as they have in the past. This expectation holds even more considering the excesses of the bubble which needed to be wiped out, but haven't been.

The Fed has done nothing but interfere with the free market in housing, creating the bubble in the first place and preventing its deflation now. To fix the problem, the Fed needs at a minimum to focus solely on price stability by maintaining a strong dollar. Markets will take care of themselves after that.

Dear Christopher Buckley: "Go Away" Is Not A Solution, Unless You're A WASP

Occupy Wall Street: The Mirror Image Of Congress

Reviewing "This Town" by Mark Leibovich in The New York Times, here, Christopher Buckley wishes in the end that most of the denizens of DC would just go home or, better yet, go away, citing the important fact that the lobbyists are really mostly just former elected officials:

'There’s a phrase in journalism-speak called “burying the lede,” which Leibo­vich appears to do by waiting until Page 330 to cite this arresting figure (previously reported by The Atlantic): in 1974, 3 percent of retiring members of Congress became lobbyists. “Now 50 percent of senators and 42 percent of congressmen do.” No one goes home anymore. Cincinnatus, call your office. ... By the end, one is left thinking that our country would be so much better off if, after putting in their years of “public service,” all these people would just go home. Or just away. But then what would we do for entertainment, being left with a mere Parliament of Bores?'

When the US Congress and the executive conspired way back in the 1920s to restrict representation to 435 in the US House to repress the growing political influence of the grown large immigrant population, mostly from Europe, which they also evidently wished "would just go home" or "away", it merely pushed on a string. So that today instead of worse representation we have representation of the worst sort: lobbyists whom we cannot dislodge at election time, and the 435 people who depend on them for campaign financing whom we cannot dislodge, either.

Today we should have a US House of Representatives of 10,490. Instead we had in 2012 12,411 registered lobbyists, and the 435 mopes the lobbyists, and we, routinely return to Washington, DC.

Representation is messy, but we desperately need more of it as the founders intended, not less.

Presidents Ranked By Level Of Income Inequality: Gini Ratio Of Families, End Of Term

1. .349 JFK/LBJ (least income inequality)

2. .359 Truman

3. .363 Nixon/Ford

4. .369 Carter

5. .374 IKE

6. .401 Reagan

7. .429 Bush 1

8. .435 Clinton

9. .443 Bush 2

10. .450 Obama, to date (most income inequality) 

The IRS Is Obstructing The Investigation Into Its Crimes

Peggy Noonan here:

House investigators this week said they have in fact received less than 1% of the documents they have been asking for from the agency. The IRS itself at one point identified a whopping and rather intimidating 65 million documents that might be relevant to the tea-party scandal. To date—almost three months since the scandal became public—the House Ways and Means Committee says the IRS has turned over only 13,000 pages. And some of them were duplicates. It's gone beyond what staff aides were, last month, calling "slow walking." Chairman Dave Camp said in a statement the IRS's actions look "a lot like obstruction." One aide said: "Patience is wearing thin."

Presidents Ranked By Change Of Income Gini Ratio Of Families In Post-War

1. JFK/LBJ       -6.6%

2. Truman       -5.0%

3. Clinton       +1.3%

4. Obama        +1.5% (to date)

5. Carter         +1.6%

6. Bush2          +1.8%

7. Nixon/Ford +4.0%

8. IKE              +4.1%

9. Bush1          +6.9%

10. Reagan      +8.6%

Inequality of market income decreased most under Kennedy/Johnson and increased most under Reagan. The measure is before taxes and transfers, however. The Organization for Economic Cooperation and Development figures after taxes and transfers for certain periods may be observed here. See the helpful discussion by Tim Worstall, here, including this:

"[E]ven in the post-tax and post-benefit numbers the US is still an outlier in the statistical methods used. In looking at inequality, poverty, in the US we include the cash that poor people are given to alleviate their poverty. But we do not include the things that people are given in kind: the Medicaid, SNAP, Section 8 and so on. It’s possible (I’m not sure I’m afraid) that we don’t include the EITC either. We certainly don’t in the poverty statistics but might in the inequality. All of the other countries do include the effects of such policies. Largely because they don’t offer benefits in kind they just give the poor more money and tell them to buy it themselves. This obviously turns up in figures of how much money the poor have."

That said, inequality of market income hasn't gone up very much in the twenty years since 1993, contrary to President Obama's recent comments here. 

The president might want to consider that Bill Clinton did a better job of reducing income inequality than he has. But, then again, Bill Clinton did a better job than Obama in most everything, and ranks number two behind Truman overall for the best economy in the post-war.

Dangerous Libertarian Appears On David Letterman Show

If QE Is Helping Only The Financial Sector, Maybe It Was Meant To

Robert Skidelsky in The Economist here, referencing John Kay in the Financial Times:

"All of this led John Kay to wonder why so much attention was given to unconventional monetary policies ‘with no clear explanation of how they might be expected to work and little evidence of effectiveness?’ His answer: they are helpful to the financial services and those who work in them."

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QE is medicine for sick banks, not sick economies.

Corporate Cash Sets Another Record At $1.093 Trillion, Liabilities Climb To $5.9 Trillion

Bob Pisani reports here:

"Cash set a record in the first quarter of 2013 on an absolute basis: $1.093 trillion in the S&P 500. It has set a record for 18 of the last 20 quarters."

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Yeah, but nonfinancial corporate business sector bond liabilities have climbed, too, from $3.7 trillion in 2007 to $5.9 trillion in the latest report.

Financial business sector bond liabilities have declined from $6.2 trillion to $4.9 trillion over the same period.

Hey, Democrats Defunded The Vietnam War, So Republicans Can Defund ObamaCare

Did Bernanke Honestly Think Employment Was Improving Significantly On May 22nd?

The more I think about the first time claims for unemployment data this year, I think it's very possible Ben Bernanke got a little ahead of himself on May 22nd with his admittedly mere hint of tapering, thinking there was real improvement in the unemployment picture. And there seemed to be.

In the run up to his May 22nd comments, there had been a string of 13 weeks averaging 320,538 first time claims per week, which translates into an annualized level of 16.6 million, something this country hasn't seen since 2006-2007 under George W. Bush, two years which were the best this country had seen the whole decade, and remain so. In other words, Ben Bernanke may have felt free to hint at tapering bond purchases later in the year if the numbers over the three months which he had just witnessed carried forward through the rest of the year. Entirely understandable.

Everybody went nuts over the tapering remark, which was really just a response to  Rep. Brady's question. But Ben must have been seeing what careful observers were seeing: some of the best first time claims data of Obama's presidency. That said, the number of careful observers are few, and most people do not think much about the not-seasonally-adjusted numbers, let alone the long term comparisons.

Things have deteriorated since then, of course, but in the late winter and early spring, first time claims for unemployment were in fact looking much better.

QE-Induced Savings On Interest Expense Accounts For 47% Of S&P500 Earnings Growth Since '09

So says Robbert van Batenburg, quoted here:

"People underestimate the extent to which quantitative easing has benefited the S&P," said Robbert van Batenburg, director of market strategy at brokerage Newedge USA LLC in New York. He called the effect akin to "an athlete on steroids." The Fed's effect on corporate earnings is difficult to quantify. Van Batenburg estimates that corporate savings on interest expense after rates fell to historic lows has accounted for about 47 percent of S&P 500 earnings growth since 2009. At the end of 2009, quarterly earnings per share for the S&P 500 were less than $20, and companies in the index paid about $4 a share in interest, van Batenburg said. Now the S&P 500 is generating about $26.70 a share in quarterly earnings but pays just $1.50 a share in interest.

Revenues Show Global Economy In Full Retreat

Jeffrey Snider, here:

What feels like a still-recovering recovery to so many looks far different in comparison to the real recession that was already in full swing in 2008 – the fact that so many companies and so much of the economy is running below 2008 rates is very revealing and startling in its implication. It should be even more remarkable aside the fact that QE 3 & 4 are right now being pushed into “markets”, and that a renewed housing bubble is building next to myriad other asset bubbles.

There is no hiding the fact that the global economy, including the US, is in full retreat. Investors and observers may choose to ignore it, but that just makes their game of waiting for recovery all the more curious.

Finally, A Caption For That Weird 2008 John McCain Photo

John McCain, creepy ass cracker