Jim Cramer reads fellow Democrat Tim Geithner and suddenly discovers frugality: both men are only five years behind the curve

THE MARKET IS UP 11% SINCE CRAMER SAID SELL IN SEPTEMBER 2013

Jim Cramer, quoted here:

"I think America's gone frugal. Just like our parents, or grandparents, or even great-grandparents changed their patterns of behavior somewhat radically after the Great Depression, I'm thinking we've changed ours, too."

Here's a newsflash for you Jim: America went frugal already more than five years ago. Why do you think things are the way they are?

See Mish's "The Age of Frugality" here, from October 19, 2008, which noted that frugality had finally (!) made the cover of a magazine after he'd been talking about it since at least March:

"Frugality has finally made front page. BusinessWeek is commenting on The New Age of Frugality."

Cramer thinks there's a new opportunity in the "new" frugality. Remember, this is coming from the same guy who told you in October 2008 to get out of the market if you needed your money in the next five years. If you took his advice, you missed one of the most incredible bull markets in the history of investing. Unfortunately, being five years behind Jim doesn't realize we've already reaped the opportunity of the new frugality.

The future?

I'm still with Chris Whalen and Ambrose Evans-Pritchard: DECADES of economic shrinkage ahead. We've already enjoyed the prosperity which the debt we racked up provided. Civilizationally speaking: It's time to pay for all that.

Sorry old boy.

Unnumber'd Maladies each Joint invade,

Lay Siege to Life and press the dire Blockade;

But unextinguish'd Av'rice still remains,

And dreaded Losses aggravate his Pains;

He turns, with anxious Heart and cripled Hands,

His Bonds of Debt, and Mortgages of Lands;

Or views his Coffers with suspicious Eyes,

Unlocks his Gold, and counts it till he dies.

-- Samuel Johnson, 1749

Can you find yourself on this temperature chart?

The modern warm period is at the right in red.

Our entire history as a species as preserved in the usual objects of historical inquiry occurred in a period much warmer than now, and it could all be coming to an end because of cooling, not warming.

Discussed here, but from an inferior chart.

Why Republicans Must Not Get Control Of The US Senate And Hopefully Won't

Story here:

Two national surveys have shown that a plurality of voters would be "less likely" to support a candidate who favors amnesty, which could enhance the number of Democrats at the polls, which could make states like Arizona, Texas, and Georgia even more competitive. To complicate matters even more, an Eagle Forum report documented how mass immigration may doom a conservative Republican Party, by depressing conservative voters who may not turn out at the polls like they did not for Mitt Romney in 2012, while perpetually importing more Democrats.

Americans believe the most important problem facing the country involves representation, but don't say it quite that way

Dissatisfaction with the government, Congress and politicians took first place in a January Gallup poll. This includes dissatisfaction with poor leadership, corruption and abuse of power.

Perhaps if someone explained how too much power is concentrated there in too few hands the American people might be persuaded that more representatives with smaller districts might help solve the problem of our oligarchical Congress and improve its responsiveness to the people.

Results here.







h/t Laura Ingraham

Obama hates your guts, deliberately releases 36,000 violent aliens in 2013 to kill you, rape you, kidnap your children, beat you up, steal your car, deal drugs, drive under the influence

And he does it with a smile.

CBS News reports, of all people, here:

A majority of the releases were not required by law and were discretionary, the organization [ICE] says.

According to the report, the 36,007 individuals released represented nearly 88,000 convictions, including:

193 homicide convictions

426 sexual assault convictions

303 kidnapping convictions

1,075 aggravated assault convictions

1,160 stolen vehicle convictions

9,187 dangerous drug convictions

16,070 drunk or drugged driving convictions

303 flight escape convictions

Warren Buffett keeps the liberal wolves at bay by favoring higher taxes and now we learn abortion to the tune of $1.2 billion

In exchange for Warren Buffett's liberalism on tax increases on the rich and his support for abortion Obama is content to enrich Buffett with oil carried by Buffett's rail cars instead of approving the Keystone Pipeline, which in turn serves to strengthen Obama's support from the environmentalists while hurting Obama's conservative enemies as well as his greater enemy, the nation.

See how useful just one idiot can be?

Story here.

S&P500 ekes out another new high riding on the thermals, up just 0.8 points from yesterday's new high

Up 0.04% from yesterday.

Whoopee! Some new high.

"Are you going away with no word of farewell?

Will there be not a trace left behind?

Well, I could have loved you better,

Didn't mean to be unkind.

You know that was the last thing on my mind."

-- Tom Paxton

FiveThirtyEight Economists Assert But Don't Demonstrate Distributional Characteristics Of Great Recession Spending Pullback

I refer to "Why the Housing Bubble Tanked the Economy And the Tech Bubble Didn’t" by AMIR SUFI and ATIF MIAN, here, where they basically blame the spending pullback of the Great Recession on the poorest, most indebted homeowners:

"The poor cut spending much more for the same dollar decline in wealth. This fact is one of the most robust findings in all of macroeconomics, ... It also makes intuitive sense."

Their forthcoming book may show this, but this article surely doesn't.

They present data which tell us about homeowners' housing as a share of their net worth by quintiles, their mortgages as a share of their home values by quintiles, and about the net worth of richest and poorest homeowners. These are useful distributional observations which, unfortunately, in the case of spending are missing in the presentation! You'd think they would be present in a story which attacks traditional economists like Ben Bernanke for ignoring distributional data sets. Ah, yeah.

Apart from whether showing the distributional characteristics of the spending pullback is even possible, I wonder if it makes any sense that the poorest homeowners could cut their spending enough to account for the sums involved, which is what traditional economists wonder. Weren't they the ones primarily represented in the 5.6 million who lost their homes to foreclosure in the first place?

Using November 2007 real retail and food service sales as the baseline ($179.37 billion), the cumulative month to month shortfall from that to November 2012 came to $663.09 billion. Yes, it took five full years for real retail to recover. But the peak to trough decline in real GDP from 4Q2007 to 2Q2009 alone, on the other hand, was $639.2 billion, not even half way through the great retail depression. Retail spending shows only part of the picture.

Which is why it's wrong to imply, as the authors do, that the decline in spending, supposedly linked to the poorest homeowners, explains the Great Recession. It only explains about a third of it, but just how much of that can be blamed on the poorest homeowners remains a mystery.

New S&P500 all time high today at 1896.65 beats April 2nd high by just 0.3%

This doesn't look like a break-out to the upside to me, just floating around up in the ether riding the thermals.

Two members of the fascist oligarchy have a little fun with the rubes and pretend they're not part of it

"Are we still a capitalist democracy or have we gone over into an oligarchic form of society in which incredible economic and political power now rests with the billionaire class?" -- Senator Bernie Sanders, Socialist-VT

"And so I don't know what to call our system or how to -- I prefer not to give labels; but there's no question that we've had a trend toward growing inequality and I personally find it very worrisome trend that deserves the attention of policy-makers." -- Janet Yellen, Federal Reserve Chair

Read the Q&A here.

The S&P500 wouldn't be where it is without stock buybacks and cheap loans to finance them

Steven Pearlstein for WaPo, here:

[T]he corporations of the Standard & Poor’s 500-stock index spent $477 billion last year buying back their own shares, a 29 percent increase over 2012 and the most since the peak year of 2007. The idea behind buybacks is that they are a tax-advantaged way to return profits to shareholders by boosting the market price of their shares. Since the stock market tends to value companies by multiplying the profits per share times the number of shares, reducing the number of outstanding shares has the arithmetic effect of boosting the stock price. ...

Stock buybacks in the S&P 500 transformed what would have been an 80 percent rebound from the lows of 2009 into a 178 percent increase, according to a study by Fortuna Advisors.

It would be one thing if most of these stock buybacks were paid for out of the trillions of dollars in cash now sitting on corporate balance sheets. But as it happens, most of them have been paid for by near-record levels of corporate borrowing. Of the $3.4 trillion in additional debt taken on by nonfinancial corporations since 2009, nearly 87 percent has been sent off to shareholders in the form of dividends and stock buybacks, according to Paradarch Advisors. ...

The Federal Reserve has also played a big role in the buyout bonanza. Over the past five years, the Fed has pumped $3 trillion into the financial system, much of which remained there rather than making its way into the real economy. That’s made it easy for companies to use cheap borrowed money to buy back their stock, or that of other companies.

In 2012 births were 12.6 per 1000 women, but chlamydia infections were 456.7 per 1000 population

That means this sexually transmitted disease infection actually occurs about 36 times more frequently than pregnancy carried to term.

Stated another way, this venereal disease infection in America dwarfs actual reproduction by 3524.6%.

Story here at cnsnews.com:

In 2012, the average chlamydia infection rate in the U.S. was 456.7 per 1,000 population. Mississippi had the highest rate (774.0 per 1,000) while New Hampshire had the lowest (233.0 per 1,000).

Left untreated, chlamydia can make you blind.

Gay men have become walking syphilis factories exploding the disease by 183%

Story here from CBS in Atlanta:

[T]here has been a steady rise in gay and bisexual men catching the disease. They account for most of the recent infectious cases. ... [Syphilis] was far more common until antibiotics became available in the 1940s, slashing the number of annual cases to below 6,000. Last year, there were nearly 17,000 cases.

Pope Francis pontificates, calls for legitimate redistribution of economic benefits by the State

In front of the UN this morning, quoted at length and discussed here:

"[E]quitable economic and social progress can only be attained by joining scientific and technical abilities with an unfailing commitment to solidarity accompanied by a generous and disinterested spirit of gratuitousness at every level. A contribution to this equitable development will also be made both by international activity aimed at the integral human development of all the world’s peoples and by the legitimate redistribution of economic benefits by the State, as well as indispensable cooperation between the private sector and civil society."

Ed Morrissey tap dances all around this:

"It’s clear, though, that he wasn’t calling for widespread and massive confiscation of wealth by governments."

Yes he is, while calling for it at every level knowing that that's not going to happen, and hiding behind the word "legitimate", a qualification foreign to the language of Jesus on the subject. 

Well, you first. The pope, the Vatican and the people of the Roman Catholic faith should take the lead: Let the redistribution begin with them, with the enormous wealth of the church. When we see them impoverishing themselves for the sake of the poor perhaps we'll take this more seriously.

Until then, this is just more pontificating.

What part of "that ye have" don't they understand?

"Sell that ye have and give alms." -- Luke 12:33

Rick Santorum is right: Conservatism is about the family, and libertarianism isn't about enough

Blue Collar Conservatives, reviewed here:

A blithe attitude about economic disruption and the decline of traditional industries goes along with what Santorum sees as a philosophical overemphasis on individualism. Conservatives, he argues, have neglected an important strand of political thought in which the family is the fundamental unit of the polis.

“The basic unit of the society is the family,” he writes, not “the individual.” Liberty in America shouldn’t mean just “freedom from” coercion, he argues, but “freedom for” — for Americans to do the right thing, to choose the virtuous and Godly course. That, he explains, is the properly understood meaning of the right to “pursuit of happiness.” (He takes this up in American Patriots, his recent book of exempla from the Revolutionary period divided into defenders of life, defenders of liberty, and defenders of “the pursuit of happiness,” i.e., virtue.)

Santorum explicitly blames libertarians for the rise of individualism, but it’s hard not to feel as if he’s taking issue with most of his party. ...

Our brilliant masters raised the cost of youth labor by 41% in the teeth of the financial crisis, decimating their employment by 43%

The current deficit in the general employment level is about 1.55 million below the July 2007 peak (all figures are not-seasonally-adjusted as published by stlouisfed.org). Since the measurement typically is at its highest in the summers, it looks likely that after seven years we are finally going to dig out of this hole this coming summer. Swings up 2 to 4 million from the winter lows to the summer highs are not unusual for this measurement.

That said, deficits in the levels for some age groups remain, and reveal how far behind the employment level remains even as population has increased over the period by an additional 16 million.

The question is why.

Most importantly, workers in the core of the working age population 25-54 years old are today 5.7 million fewer in number than they were at their November 2007 peak, which is the largest deficit by age group.

The oldest of these workers today were born in 1960 when births per 1000 women were still 23.7. The youngest were born in 1989 when births per 1000 women had plummeted to 16.4. But it wasn't until 1965 that births fell below 20 per 1000. That means there are only five tranches left in the measurement today from the high birth rate years 1960-1964 inclusive, whereas seven years ago the picture was a little different. We had seven more high birth rate years represented than we do today. Those aged 54 seven years ago were born in 1953 when births per 1000 were pushing 25. Births per year from 1955 through 1964 reached as high as 4.27 million in 1961. Contrast that with 1973 through 1976 when births crashed to 3.1 million per year, a deficit of 4 million over just those four years compared to the pre-1965 levels.

It appears therefore that the fall-off in the employment level of those 25-54 can be explained entirely by the aging of their cohort in which many millions over the last seven years have moved on to the next level, and by the failure of the younger members of this group to bring up the rear in terms of their aggregate numbers because there just weren't enough of them born. The reason for the decline of their employment level is therefore structural, not economic, and will continue to be so for the next five years.

Indeed, workers aged 55 and older have escaped a decline in their employment level. There are in fact 6.9 million more working at this age right now in 2014 than there were exactly seven years ago, which is what one would expect from the data. The Baby Boom is simply aging and continuing to work as it did before, and it has a lot of room left to run.

If there is an economic problem revealed by the employment level, it has to do with the youngest workers.

Consider teenagers 16-19: 3.2 million fewer teenagers are working today in that age range than at their pre-recession peak in July 2006 at 7.5 million. That's a 43% decline in teenage employment levels in almost 8 years, an utter catastrophe which has nothing to do with demographics. Birth rates have held steady between 1987 and 1998 at 15.4 per 1000.

Unfortunately, teenagers paid the biggest price because in the teeth of the first economic depression in the post-war this country decided it would be a good idea to raise the minimum wage in 2007, again in 2008, and again in 2009. When wages came under severe pressure for every other age group and millions took pay cuts just to keep working, our brilliant masters decided to raise the cost of youth labor by 41% since 2006. And then the dopes voted for a guy who wants to raise the cost of their labor another 39%.

  

College age workers 20-24 by contrast, are in deficit from July 2007 by only 0.8 million.

The declines for the three age groups of 9.7 million minus the gain of 6.9 million for those 55 and older implies a net loss of 2.8 million in the employment level, impacting workers primarily 16-19.

If you want less of something, tax it. And that's what the minimum wage is, a tax on labor which reduces the quantity of it naturally.

After the holocaust of Jews, a holocaust of Germans at the hands of the victors

Remembered in After the Reich, reviewed here:

[Giles MacDonogh's] best estimate is that some three million Germans died unnecessarily after the official end of hostilities. A million soldiers vanished before they could creep back to the holes that had been their homes. The majority of them died in Soviet captivity (of the 90,000 who surrendered at Stalingrad, only 5,000 eventually came home) but, shamingly, many thousands perished as prisoners of the Anglo-Americans. Herded into cages along the Rhine, with no shelter and very little food, they dropped like flies. Others, more fortunate, toiled as slave labour in a score of Allied countries, often for years. Incredibly, some Germans were still being held in Russia as late as 1979.

The two million German civilians who died were largely the old, women and children: victims of disease, cold, hunger, suicide - and mass murder.

Apart from the well-known repeated rape of virtually every girl and woman unlucky enough to be in the Soviet occupation zones, perhaps the most shocking outrage recorded by MacDonogh - for the first time in English - is the slaughter of a quarter of a million Sudeten Germans by their vengeful Czech compatriots. The survivors of this ethnic cleansing, naked and shivering, were pitched across the border, never to return to their homes. Similar scenes were seen across Poland, Silesia and East Prussia as age-old German communities were brutally expunged.

With housing ATM shut down, Americans tapped retirements prematurely in 2011 to the tune of $57 billion

So says the story here at Bloomberg, extrapolating using the basic early withdrawal penalty rate of 10%:

It’s a small number that’s part of a much larger picture: The Internal Revenue Service collected $5.7 billion in 2011 from penalties, meaning that Americans took out about $57 billion from retirement funds before they were supposed to.

The median size of a 401(k) is $24,400 as of March 31, with people older than 55 having $65,300, according to Fidelity Investments. Those funds can disappear quickly in retirement, and the early withdrawals indicate that the coming retirement crisis could be even more acute than expected. ...

Meanwhile, the amount of home-equity loans outstanding was $704 billion in 2013, down 38 percent from the 2007 peak, according to Federal Reserve data. ...

During the 2008 campaign, President Barack Obama proposed allowing penalty-free withdrawals of up to $10,000 from retirement accounts. That idea went nowhere and wasn’t included in the 2009 economic stimulus.

In 2012, the New York State Society of Certified Public Accountants proposed a temporary waiver of the penalties while families were recovering from the recession.

--------------------------------------------------------------------------------

Actually the premature withdrawals could have been significantly higher than $57 billion in 2011. There are many exceptions to the 10% penalty rule, one of which is for withdrawals to pay for health insurance premia, which began jumping in the wake of the passage of ObamaCare in March 2010. Careful taxpayers withdrew exactly for that growing expense, paid no penalty and in certain circumstances also deducted the expense from income when self-employed. Since those sums escaped the 10% penalty, additional sums withdrawn probably contributed to the total penalties collected in 2011.

Obsessed with Congress' flaws, Justin Amash finds himself alienated from Republicans as a libertarian crank

The Detroit News here highlights how in "Michigan GOP leaves Justin Amash to fend for himself", including this from Mike Rogers who evidently feels more free to speak because he's baggin' it:

Rogers has sparred with Amash on foreign policy intervention and fought off an Amash attempt last year to curb the National Security Agency phone surveillance program. Rogers points to Amash’s lack of support on Iran sanctions, a vote against a balanced budget amendment and the “embrace” of isolationism that’s “not consistent with what’s in the best interest of the future of the United States. I just worry you have somebody who’s more concerned about their brand than the substance of the issues,” Rogers said.

------------------------------------------------------------------------------------------------

Congress' flaws are legion, but their remedy is not libertarianism. Their remedy is in representation.

In his zeal for the constitution Justin Amash has little to say about representation, perhaps because he represents the libertarian interests of a few, not the broader interests of his constituents. Which is odd, since lack of representation was the key complaint of the founding era which wrote it.

Today we have a Congress which is an artifact of the 1920s, not of the founding era. Representation has ceased to grow with population since the 1920 Census, by an act of Congress itself, the effect of which has been to turn the Congress into a powerful oligarchy arrayed against the great masses of the unwashed taxpayers whose wallets are plundered by it.

The Tea Party would be more convincing if it actually believed in a more representative Congress, which means a far more numerous Congress than the 435 member one we have now. So far we haven't seen the Tea Party demonstrate passion for any such thing, even from its preeminent leaders like Justin Amash who claim to be inspired by everything constitutional, except for representation at the level of one per 30,000.

Americans hate their Congress in unprecedented numbers, and the reason is because their individual representatives don't speak for them.

If the Tea Party had any genuineness to it, it would make fixing that job #1. 

The myth of the American holocaust: There were 4 million slaves in the US in 1860, yet "millions" were murdered

Math . . . hard to figure.

Story here:

“Its symbolism in history is directly linked to the enslavement, torture and murder of millions of Americans,” Hall said of the Confederate flag. “The state of California should not be in the business of promoting hate toward others.”

When you consider that in 1860 prime male field hands went for between $1,200 and $1,800 each, it is incredible to believe that such large numbers of slaves were murdered.