Five years after the recession ended . . .

. . . Democrats are still trying to pass "emergency" unemployment benefits.

It must be a depression, Obama's depression.

More than 7 years after the crisis began, banks are still failing

The Freedom State Bank, Freedom, Oklahoma, failed tonight, costing the FDIC $5.8 million. It's the 12th failure of 2014.

Metropolitan Savings Bank, Pittsburgh, Pennsylvania, kicked off the wave of bank failures in the current crisis on February 2, 2007, with assets of $15.8 million. About $1.2 million in deposits exceeded the FDIC insured limit at the time. It had been the first bank failure in the country since 2004 and the first of a string of failures which now totals 504 banks and close to $89 billion in covered losses.

Stay tuned. 

Supremes unanimously slap down the King of constitutional law in the White House for 13th time

From John Fund here:

"Those decisions are very revealing about the views of President Obama and Eric Holder: Their vision is one of unchecked federal power on immigration and environmental issues, on presidential prerogatives, and the taking of private property by the government; hostility to First Amendment freedoms that don’t meet the politically correct norms; and disregard of Fourth Amendment protections against warrantless government intrusion. These are positions that should alarm all Americans regardless of their political views, political-party affiliations, or background."

The first three months of 2014 were worse than the whole 2001 recession

Jeffrey Snider, here:

"The first quarter of 2014 is worse than anything seen during the 2001 recession – which the worst contraction then was -1.2% in the third quarter of 2001. In raw GDP terms, that would make the first three months of 2014 worse than the whole of the 2001 recession."

Tyler Durden of Zero Hedge is crazy, but you knew that

The website that specializes in the economic wacky, lately popular on the right as a rhetorical club against Obama which Tyler Durden exploits to gain eyeballs, says today here that ObamaCare spending is the cause of the total collapse in 1Q2014 GDP. You know, like ObamaCare is responsible for all you full-timers getting part-timed.

ObamaCare, the heart of all darkness.

That's funny, because in April Zero Hedge maintained ObamaCare spending was the sole cause of the rise in 1Q2014 GDP.

Well which is it?

In other words, in April ObamaCare was the only thing responsible for positive GDP ihao, but in June it is the only thing responsible for negative GDP. This is because we're supposed to believe that healthcare services spending evaporated in the final estimate of GDP (a swing from +$39.9 billion in the 2nd estimate to -$6.4 billion in the 3rd), evidently accounting for $46 billion of lost spending in the Zero Hedge world of weird math between Q4 and Q1. The swing negative caused the personal consumption expenditures collapse, he says, which fell almost $60 billion inflation-adjusted Q4 to Q1.

Of course, that's comparing apples to oranges. Healthcare services spending in Q4 was positive $24.4 billion. That makes the swing barely $31 billion from positive into negative territory, not $46 billion.

From that you wouldn't know that PCE was still positive in the 3rd estimate: $27.7 billion. Nor that goods consumption collapsed $24.5 billion from Q4. Nor that spending on utilities was up a whopping $23 billion because of the cold weather. Nor that the output of nonprofits swang nearly $28 billion into negative territory from positive, while receipts for goods and services of nonprofits suffered a similar swing, $29 billion from positive to negative. Schwing!

Does he read the report?

The inflation-adjusted decline in GDP totaled just over $118 billion, $81 billion of which was from a decline in private domestic investment from positive $16 billion in Q4, mostly inventories, and $58 billion of which was from a decline in net exports of goods and services, from a positive $37 billion in Q4. That's where the real decline was, a total swing of over $190 billion from just those two categories.

Maybe the silliest thing Durden predicts is that all that "lost" ObamaCare spending will magically reappear in Q2.

Which leads us to ask: What if ObamaCare actually did reduce healthcare services spending in Q1? Isn't it conceivable that a bunch of people, now qualifying for subsidies under the program, had significantly reduced costs? Who knows, the $6.4 billion drop might actually be the first and only drop we're ever going to see in healthcare services spending under ObamaCare.

I'll bet on that before I'll bet on a 5% GDP print from Obama.

Obama vs. Bush on GDP

Bush's average quarterly report of GDP: 2.1%. Obama's average quarterly report of GDP through today's final number for 1Q2014: 1.6%.

Too hot to shop: There goes Q2 GDP

Keeping the people ignorant of their poverty: Obama's media shills bury the awful GDP story

NBC briefly had a red banner headline at the top of the page and then moved the GDP story to the top left but not among the page lead stories.

ABC buried the story near the bottom left.

CBS buried the story near the bottom right.

GDP tanks 2.9% in first quarter, CNBC shills for Obama calling it disappointing, doesn't even put GDP in headline

Consensus estimate for GDP has worsened to -1.7% from -1.6% at fxstreet

Bob Brinker mentioned the consensus estimate for GDP this last weekend on his radio program Money Talk at -1.8%. fxstreet.com had had the consensus estimate at -1.6% as recently as last week, but now shows it at -1.7%. Very curious.

How did the winter get so much worse in the last month for its impact on GDP? After all, everyone has blamed the -1.0% print in the second estimate on the bad winter. But somehow things are much worse than we thought because of the weather? 70% or 80% worse than we imagined?

It's not because of the winter, dear friends. It's because your master wants you to suffer, wants to cut you down to size, wants to destroy your aspirations.

He is succeeding.

How does it feel to be a slave?

The keys to corporate profits since the 2008 panic

Layoffs and ZIRP and buybacks, oh my! Layoffs and ZIRP and buybacks, oh my!

Art Hogan doesn't think valuation is a fundamental

Here:

"At these levels you need a strong catalyst, and I thought we got that, but we've got investors that are nervous about things other than fundamentals, namely geopolitical and valuations, so the path of least resistance is to take chips off the table. There's a large cohort of investors looking for any opportunity to take some money off the table near record highs," said Art Hogan, chief market strategist at Wunderlich Securities.

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

Translation: paying too much for something shouldn't concern you.

$82,077: What you need to make to afford the median existing home price in May 2014

The median sales price of an existing home in May rose to $213,400 from $201,500 in April.

In May you needed to make $82,077 for that home to be affordable to you.

In April you needed $77,500.

Housing affordability is generally calculated by multiplying your salary by 2.6.

Just 10.5% of individual wage earners made $80,000 or more per year in 2012, which means the vast majority of Americans must settle for homes which are priced in the bottom half of the market. Two people each making the median wage in 2012 of $27,519.10 could afford a home priced at no more than $143,100, which was the typical price of a suburban home in the collar communities of Chicago in . . . 1993, over twenty years ago.

"And it is a device of tyranny to make the subjects poor, so that a guard may not be kept, and also that the people being busy with their daily affairs may not have leisure to plot against their ruler. Instances of this are the pyramids in Egypt and the votive offerings of the Cypselids, and the building of the temple of Olympian Zeus by the Pisistratidae and of the temples at Samos, works of Polycrates (for all these undertakings produce the same effect, constant occupation and poverty among the subject people); and the levying of taxes, as at Syracuse (for in the reign of Dionysius the result of taxation used to be that in five years men had contributed the whole of their substance)." -- Aristotle, Politics, 5, 1313b.

Run away: Today's total market capitalization/GDP ratio is 1.46

$25.003 trillion
-------------------  = 1.46 (June 23, 2014: a really bad time to invest)
$17.101 trillion


$10.222 trillion
------------------- = 0.71 (April 6, 2009: a pretty good time to invest)
$14.381 trillion













h/t John Hussman, Warren Buffett

Consumer indebtedness has exploded since the 1980s

Americans haven't saved 10% since 1984

Blaming negative GDP on the harsh winter is already forecast to get worse

The consensus estimate of the third and final report of 1Q2014 GDP, coming out on Wednesday next week, is already 60% worse than the actual second report at -1.6%. What, is the late winter suddenly become worse in the last month?

The first estimate, you will recall, came in at +0.1%, and was quickly downgraded in various places to something ranging between -0.2% and -0.4%. When the second estimate came in at a much worse -1.0%, just about everyone blamed the harsh winter for the pathetic print, including the White House, which incredibly credited GDP from spending on utilities at the same time it debited GDP because people weren't traveling (which isn't true--just examine the government's miles-traveled reports over the winter), weren't vacationing and weren't spending money on hotels and restaurants, and other such drivel.

Having it both ways, it seems, only applies south of the Canadian border, where real GDP was a negative almost $40 billion. North of it real GDP was actually positive, despite the winter, at about $4.7 billion US. A much smaller economy Canada's is, to be sure, but for that reason you'd think it more vulnerable to the harshest winter in decades whereas our much larger, more varied economy ought to be more resilient.

But up against an Obama, you would be wrong. He is secretly happy that things are going as poorly as they are, because it means that the middle class is steadily shrinking and soon will no longer be able to stand in his way, and the Democrat Party's way, of remaking America into a few haves and a lot of have-nots.

In this they are assisted by the libertarians who have successfully infiltrated the Republican Party as conservatives, who see this as their natural mission, too. Politically speaking, they are out to defeat Republicanism just as much as the Democrats are. The successful individual lone ranger is the sine qua non of their vision, after all, whose fabulous wealth is the only object of their affection. And the only thing standing in his way are people who believe in something bigger than themselves.

People who believe in something larger than themselves in America today occupy the extremes of the left and the right, and seem to be getting fewer in number as we speak, a fact noted in a recent article in The New Republic. Between them are a mass of social and economic libertines who are already the slaves of the elites, for whom neither the economic nor the moral restraint of the Protestant founders which built our country are a value. Unless we recover something of the latter the America of the past will cease to exist, if it hasn't already.

And persistently poor GDP proves it.

Tonight's S&P500 remains 4.02% below the August 2000 inflation-adjusted all-time high

2045.09 is the inflation-adjusted all-time high, on August 1, 2000. 1962.87 is the current level of the S&P500, June 20, 2014.

1753.10 is the inflation-adjusted high on October 1, 2007 before the crash. We are currently almost 12% above that.

Your real rate of return with full dividend reinvestment August 2000 to May 2014 is just 1.32% per annum.

Your real rate of return with full dividend reinvestment October 2007 to May 2014 is 3.36% per annum.

Update: And your real rate of return with full dividend reinvestment between August 2000 and October 2007 was -0.51% per annum.

Bank Failure Friday . . . two tonight: the 10th and 11th in 2014

Reported here and here.

The FDIC still insures 6,730 institutions through March 31, 2014.

In February 2007, over 500 bank failures ago, the FDIC still insured 8,743 institutions, meaning about 1,500 additional institutions have succumbed to acquisition by bigger banks which have swallowed them up since the financial panic.

Call it income inequality, banker style.

FISA Court rules NSA can take your metadata for another 90 days, until September 12th

Story here, buried in the tyranny's Friday afternoon document dump.