Best News Since 2011: Republican Majority Leader Eric Cantor loses in primary

The weenie is out!

But the seat may well go Democrat as a result. The question is, to which Democrat. The Republican winner, Brat, is perceived by some voters as someone who isn't really sure what he is. One thing's for sure: Cantor was ousted over his immigration squishiness. Radio host Laura Ingraham helped lead the charge against him on this issue and succeeded. Importantly, she noted today on the program that the Tea Party had abandoned Brat, meaning Brat is not a victory for the Tea Party. The Tea Party has been co-opted by open borders libertarians who secretly supported Cantor with their indifference.

The danger now is that Cantor will help broker a bad immigration deal with Obama, bad for Republicans and bad for the country, on his way out the door. 

Real returns from stocks since April 2000 have been just 1.3% per annum

Stock market investors who think market peaks like now are good times to add large sums to the equity side might want to consider what would have happened had you gone all in with new monies in the spring of 2000.

Today's real S&P500 for April 1, 2000 was higher than it is today: 2,022.46 then vs. 1951.27 now. The real S&P500 would go on to exceed that level only once: on August 1, 2000 at 2,037.97. It's been a pretty rough ride since then even with the spectacular 5-year run we've just had, added in.

Ironman here provides an excellent tool to calculate your returns in the S&P500 since April 2000 to April 2014, the most recent date available. They are horrible: just 1.3% per annum real, 3.68% not adjusted for inflation.

By way of contrast, Morningstar reports that Vanguard's Total Bond Market Index Fund through yesterday has produced a nominal 15-year return of 5.34% per annum.

John Hussman: It's advisable to panic before everyone else does

From the irrepressible mind of John Hussman, here:

Market conditions presently match those that have repeatedly preceded either market crashes or extended losses approaching 50% or more. Such losses have not always occurred immediately, but they have typically been significant enough to wipe out years of prior market gains. ... On the basis of historically reliable measures, the S&P 500 would have to move slightly below the 1000 level to raise its prospective returns to a historically normal 10% annually. ... Regardless of whether the market’s losses in this cycle turn out to be closer to 32% (which is the average run-of-the-mill bear market loss) or greater than 50% (which would be required to take historically reliable valuation measures to historical norms, though most bear markets have continued to undervalued levels), it’s going to be difficult to avoid steep losses without a plan of action. In our view, that action should be rather immediate even if the market’s losses are not. However uncomfortable it might be in the shorter-term, the historical evidence suggests that once overvalued, overbought, overbullish conditions become as extreme as they are today, it’s advisable to panic before everyone else does.

S&P500 rises just 0.09% yesterday to new high

That puts correction territory everywhere down to 1561.016, where the market was as recently as April 2013.

1365.889 demarcates a bear down 30% from here, the market level in April 2011.

1170.762 is a 40% bear, the market level in March 2010.

976.135 is a 50% bear from here, the market level in July 2009.

780.508 is a 60% bear from here, the market level in April 1997.

585.381 is a 70% bear from here, the market level in September 1995.

That should about unwind it. 

Oops: "Collapsing" Antarctic glacier is melting because of geothermal heat energy, not CO2

Magma!

Reported here:

Thwaites Glacier, the large, rapidly changing outlet of the West Antarctic Ice Sheet, is not only being eroded by the ocean, it’s being melted from below by geothermal heat, researchers at the Institute for Geophysics at The University of Texas at Austin (UTIG) report in the current edition of the Proceedings of the National Academy of Sciences. ... Until now, scientists had been unable to measure the strength or location of heat flow under the glacier. Current ice sheet models have assumed that heat flow under the glacier is uniform like a pancake griddle with even heat distribution across the bottom of the ice. The findings of lead author Dusty Schroeder and his colleagues show that the glacier sits on something more like a multi-burner stovetop with burners putting out heat at different levels at different locations.

Fertility drops in 2013: Maybe some demographers are under the ILLUSION of economic recovery

They're puzzled by the total fertility rate dropping and staying below the replacement rate.

Reported here:

But the total fertility rate, or TFR, the average number of children a woman would have during her child-bearing years, fell to just 1.86 [in 2013], the lowest rate in 27 years. TFR is considered the best metric of fertility. A TFR of 2.1 represents a stable population, with children replacing parents as they die off.

Demographers expected the fertility rate to fall during recession, as financially strapped families put off childbearing. But what has surprised some demographers is both the depth of the decline and the fact that fertility has continued to drop even over the course of the country's five years of slow but steady recovery. The rate has fallen steadily each year since 2007, when it stood at 2.1 percent. ...

[T]he U.S. only reached a TFR above 2.1 in 2006 and 2007, at the height of the housing bubble years.

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

The total fertility rate in the US has been below the replacement rate since 1971 except for the two years noted. This is the real reason behind the immigration liberalization push by Republicans, who didn't have enough children themselves and still don't understand as a political party that it's impossible for America to look like it did in the past, now or in the future, without having done so. They are as guilty as liberals in eschewing family.

It raises the question of what comes first: the GDP or the population which goes on to consume it. Arguably, just as banks create money by writing loans, not by the Fed printing dollars, people actually create future economic growth by having children in the present. It really isn't the other way around, but we haven't been smart enough as a culture to grasp this. Women naturally grasp this. They not only naturally want children on a time schedule dictated by human biology, but also grandchildren. But the liberal war on this natural instinct has succeeded in killing off the goose that laid the golden egg of American greatness. It should not come as a surprise that GDP was negative again.

We do not live. We just survive.

A little Larry Norman from 1973, from the not coincidentally entitled "Nightmare Number 71":

We kill our children swap our wives


We've learned to greet a man with knives


We swallow pills in fours and fives

Our cities look like crumbling hives

Man does not live he just survives

We sleep till he arrives


Love is a corpse we sit and watch it harden


We left it oh so long ago the garden

Globe and Mail columnist forgets to lump in Henry Kissinger with Nigel Farage, Marine Le Pen and Geert Wilders as Putin's 5th column in the West

Doug Saunders, here:

In words widely reported in the Russian media, [Farage] added that the EU has “blood on its hands” for supporting the democracy movement in Ukraine. Rather than posing a threat to Europe, Mr. Farage said, Russia has fallen prey to Europe’s “activist, militarist and expansionist foreign policy.”

Henry Kissinger, here:

The European Union must recognize that its bureaucratic dilatoriness and subordination of the strategic element to domestic politics in negotiating Ukraine’s relationship to Europe contributed to turning a negotiation into a crisis. Foreign policy is the art of establishing priorities. ... Ukraine should not join NATO, a position I took seven years ago, when it last came up.

Lefties say America has 6 million not counted as unemployed

The extreme left Economic Policy Institute here puts the number of missing workers in the US employment statistics at almost 6 million, give or take, since October 2013.

This is premised on a 2007 government projection of labor force participation rates in a healthy economy to 2016 which already controlled for demographic change, including the burgeoning retirements of Baby Boomers and, evidently, emerging smaller workforce cohorts due to declining fertility rates. That can be used against the measurements of labor force participation rates and labor force levels which have actually filled the record over the period to derive discrepancies.

Currently EPI calculates the discrepancies to mean that unemployment is 9.7%, not 6.3%.

And you thought only wild-eyed kooks on the right thought unemployment was still that high.

Jimmy Carter appointee in Wisconsin overturns Defense of Marriage Amendment

As usual, the meaning of liberalism is to overturn by the decree of a single individual what the voters have passed into law. In other words, to impose what they can't pass. In this case the now 75 year old judge waited like a sleeper for many years until Barack Obama made it safe to unleash rulings against the people.

Barbara Brandriff Crabb, who has been inflicting herself on the voters since 1979 thanks to an appointment to the US District Court by Jimmy Carter, has previously ruled in 2010 the National Day of Prayer unconstitutional. A federal appellate court subsequently ruled she had no standing. She has also ruled in 2013 against the clergy exemption from income of housing allowances. In 2009 she ruled that Wisconsin's restrictions on judges against joining political parties, endorsing candidates and raising campaign funds violated their First Amendment rights.

Story here:

A federal judge in Madison on Friday overturned Wisconsin's gay marriage ban, striking down an amendment to the state constitution approved overwhelmingly by voters in 2006 and prompting an emergency action by the state to halt the scores of weddings that began in the state's two largest cities. ... In Wisconsin, voters in 2006 resoundingly approved the same-sex marriage amendment, 59% to 41%. Every county in the state except Dane voted for it.

The May 2014 unemployment rate is unchanged at 6.3%

Here.

Not seasonally adjusted, total nonfarm employment is up 199,916 monthly in the last 12 months to May 1, 2014

April 1, 2013 to April 1, 2014 the rate was 196,750 monthly.

During the Clinton presidency, which was without a recession, total nonfarm averaged a spectacular gain of 235,000 monthly. Under Reagan, who had one, jobs boomed at the rate of 250,000 monthly for six full years once it was over.

Presently job creation is 15% behind the Clinton rate, and 20% behind the Reagan rate.

After 76 months, the jobs recession ends no thanks to Obama as the liberals declare victory and go home

That's after 6 years and 4 months for those of you in Rio Linda.

From Calculated Risk here:

This [graph] shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis. Total employment is now 98 thousand above the pre-recession peak and at an all time high.  It is probably time to retire this graph - until the next recession.

Obama was first elected in month 12 of the jobs recession when its severity was still at -3.0% on this chart. Americans had no idea what was coming. Nearly 30 million Americans would go on in 2009 alone to file first time claims for unemployment compensation.

If Obama's election meant salvation from a looming crisis, businesses didn't think so. They proceeded out of fear of the most anti-capitalist president to be elected in the history of the country to cut their number one cost in order to survive what was coming. Arguably Obama's election made a severe downturn into the employment crisis that it became.

The longest and deepest jobs recession in the post-war is now over according to the seasonally adjusted figures published by the Bureau of Labor Statistics. At the very least the Columbia and Harvard educated Obama did nothing effectual to end it in a timely manner as all his predecessors had done, even George W. Bush by comparison. The reason? Your choices are a) incompetence and b) malice aforethought.

Bringing America down a notch or two seems to have been the guiding principle for every problem Obama has had to confront during his presidency, whether in domestic or foreign policy. When it comes to jobs, the average middle class family which lost a good $50,000 income to long term unemployment is now in the 6th year of reduced circumstances. Such a family is easily $250,000 behind when you combine the effects of reduced wages and retirement funding. Such equality with the poor isn't what the middle class had in mind, but it sure looks like what Obama did.

Calculated Risk Blog retires its unemployment recession chart

This tracks seasonally adjusted figures, of course. Not seasonally adjusted total nonfarm employment still has not recovered to peak under Bush.

Discussion here:

This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses.  Employment is now back above pre-recession levels and this graph will be retired until the next recession (Of course this doesn't include population growth).

3 million more still work part-time for economic reasons under Obama than under Bush

Those usually working full-time are still 4 million fewer in number than in 2007 at peak under Bush

Despite all the crowing, total nonfarm employment, not-seasonally-adjusted, remains below 11/'07 peak

Monetarism on the rocks: TCMDO has grown less than 19% in 6.5 years

Deflation in today's economy is not a decline in the general price level but a decline in the expansion of total credit market debt outstanding, now unhelpfully called "all sectors credit market instruments liability level". The monetarists keep trying to get the borrowing engine going again, but to no avail, and the bottle of Viagra seems to be always in need of a refill. In six and a half years total credit market debt outstanding has grown by a paltry 18.7%. During the good old days of Jimmy Carter and Ronald Reagan TCMDO twice doubled in as little time. At this rate it will take 35 years from 2007 for TCMDO to double again when the longest it has taken in the post-war is about eleven and a half.

Conservatives may well mock the flacid, shriveling manhood of our metrosexual economy, but in the absence of structural measures designed to reward savers in the form of strong currencies and honest rates of return and punish spendthrifts with budget disciplines, what we are witnessing is a crack-up of epochal proportions which threatens to wipe away the achievements of centuries.

Who could possibly be happy about that?

The best that we can hope for is an arrangement which will buy us time to pay back what we have borrowed from the future for the prosperity of the past. It will require us to sober up. It will require personal repentance. The alternatives are a long slow decline into poverty, bankruptcy and war if we do nothing, or a stimulation-induced heart attack if we keep on the present path. 

Shiller p/e hits 25.94 as total market index and S&P500 make the barest of new highs

The S&P500 floated up 0.19% while Vanguard's Total Stock Market Index Fund was up just 0.22%.

The Shiller p/e at nearly 26 is close to a level matched on the first of the month just 24 times going back to 1881. Valuation is presently 56.9% above the mean Shiller p/e of 16.53.

From John Hussman earlier this week, here:

On Friday, our estimate of prospective 10-year S&P nominal total returns set a new low for this cycle, falling below 2.2% annually. This is worse than the level observed at the 2007 market peak, or at any point in history outside of the late-1990's market bubble. 

Obama goes outside the experience of the enemy (you): swaps Muslim combatants for US deserter

To piss off the patriots and please his anti-Gitmo critics in one stroke.

And talk about using different tactics and actions and all events of the period to maintain a constant pressure:

FBI tries to shake down Phil Mickelson last Thursday on the golf course, a political spectacle aimed at the non-compliant rich.

Arizona is punished as a dumping ground for busloads of illegal immigrant children because it dared to enforce its border with Mexico.

With GDP negative the EPA moves forward with rules to make electricity more expensive for the already beleaguered masses.

Liberal Jonathan Turley says Obama's behavior in Bergdahl affair just adds to the pile of laws Obama's broken

Here:

CNN ANCHOR: Jonathan, did the White House violate federal law?

JONATHAN TURLEY: They did. I don't think the White House is seriously arguing they're not violating federal law. To make matters worse, this is a long series of violations of federal law this president has been accused of. I testified twice in Congress about this record of the president in suspending or ignoring federal laws. This is going to add to that pile. I don't think there's much debate that they're in violation of the law.