Bank Failure Friday: the 18th of 2014 is in Mankato, MN

Northern Star Bank, Mankato, Minnesota, failed today, costing the FDIC $5.9 million.

As of September 30, 2014, there are 6,589 institutions remaining in the FDIC system.

That means that since the summer another 67 formerly independent participating institutions in the FDIC have left the system, most of which have been absorbed by larger institutions through acquisition and mergers because they were no longer able to survive and compete as stand-alone profitable banks in the new rigorous regulatory environment imposed under the Dodd-Frank legislation and Basel capital rules.

Over 300 formerly FDIC-participating institutions have suffered this same fate since the beginning of this year.

And in February 2007 there were 8,743 FDIC member institutions, 2,154 more than there are now. Only 500+ of these failed. The rest have been gobbled up by big-banking.

Mitt Romney remains the frontrunner and more popular than Jeb Bush, beating him 19 to 12 on average

Byron York reported here yesterday:

A Fox News survey released this week found Romney the GOP leader, with 19 percent, ahead of Jeb Bush, who was pretty far back at 10 percent. Everybody else was bunched together behind Bush.

A McClatchy-Marist poll a few days earlier showed a similar result, with Romney leading at 19 percent and Bush at 14 percent. A Quinnipiac poll before that found Romney at 19 percent and Bush at 11 percent.

Many polls don't include Romney in their surveys. But the many that do suggest that, at least for now, Romney is a front-runner, if not the front-runner in the 2016 Republican race.

Average food stamp participation under Obama is 43.2 million annually to date, 84% higher than under Bush

Under Bush it was 23.5 million on average, and under Clinton 23.1 million.

Liberal WaPo defends economist who says middle class is just fine because of . . . transfer payments!

Where have I heard this before?

Consider The Washington Post, here:

"CBO saw a dramatic difference in middle class income gains because it captures information that tax records miss, such as income from transfer programs such as Social Security and Medicare, [economist Stephen J.] Rose said."

A libertarian made this same argument to me very recently: that the middle class is intact if you count transfer payments made under the tax code.

For a libertarian to argue with a straight face that the middle class is intact because of income redistribution is an offense to capitalism. To be middle class from the purely economic point of view is to have achieved a level of economic independence and status not shared by the lower class. It is symbolized by home ownership, and by that new car smell every few years. Dependence on government transfer payments to maintain such status does nothing but obscure the truth of what is really going on.

This is consistent with the wider practice of economic liberalism in our time, which is similarly designed to hide the truth while posing as its custodian at the same time.

Mark-to-market accounting rules have been changed since April 2009 under Financial Accounting Standards Board rule 157, making price discovery of many "assets" nearly impossible. Circumstances became catastrophic under the old rule during 2008, so the solution was to change the rule. Call it moving the goal posts.

The Fed, acting as the Board's tag team wrestling partner, through QE has been buying up the crappy assets of the banks and transferring them to its own balance sheet in order to hide the truth of their crappiness and restore the banks to health. At the same time the Fed makes war against the free market with its repression of interest rates to the zero bound, driving up the value of risk assets, especially housing, stocks, bonds and commodities while punishing savers and aspirants to the middle class. It's not a coincidence that this helps only the elites, who cannot continue to spend money they don't have unless they can borrow it on the cheap.

A truly conservative economic universe, that is, one aligned with reality, would not permit any of this. 

Too bad we don't live there anymore. Libertarians shouldn't pretend that we do.

Brian Wesbury is wrong: First rate hike will not be in six months

Brian Wesbury & Co. here says the first Fed rate hike is coming in six months (June) because "considerable time" has secretly meant six months to Janet Yellen all along. Dropping that phrase for the word "patient" signals that the six month timer has begun ticking.

OK, maybe so.

But if the employment numbers cool as I expect them to after the first of the year when all the part-timers hired recently are let go, the Fed will still be in the rhetorical catbird seat to delay a June rate hike indefinitely because of the language change, without looking like it has back-tracked on its plan.

Janet Yellen may have an "obsession with the labor market" but she is not stupid.

If Democrats and Republicans had been so obsessed, she wouldn't have to be. At least workers' lives matter to Janet Yellen, which is more than can be said for the usual practitioners of the dismal science.

The good olde days . . . when Cuba was still the enemy

PT boat on the way to Havana

I used to make a livin' man

pickin' the banana

Now I'm a guide for the CIA

hooray . . . for the U.S.A.

Baby, baby, make me loco

Baby, baby, make me mambo

Sent to spy on a Cuban talent show

First stop . . . Havana a go go

I used to make a living man

pickin' the banana

hooray . . . for Havana

Baby, baby, make me loco

Baby, baby, make me mambo

Useless Steve Gruber Show shields Rep. Tim Walberg from heat for Cromnibus vote

Steve Gruber had his opportunity this morning to let Congressman Tim Walberg feel the heat for his vote last week which helped move Cromnibus through the Congress, and instead shielded him by talking about anything but that.

1320 WILS' Michael Cohen had a much better interview of the Congressman here on Monday addressing the issue in depth, but alas it was not a talk show which takes callers' questions and comments.

They call it freedom of the press in America, but its organs make sure that they continue to protect the liberal status quo for obscene government spending and its representatives, because they PROFIT from it.

Was the valet driving?

Rep. Tim Walberg (MI-7) admits everyone in the US House read the Cromnibus bill in July and knew what was in it

In a recent interview, here (Capital City Recap with Michael Cohen for Monday, December 15th), Republican Rep. Tim Walberg (MI-7) said one of the reasons he ended up voting for Cromnibus was that it overturned some parts of Dodd-Frank, a law which in his view is responsible for the middle class being "destroyed".

How putting the FDIC on the hook for derivatives is good for the public in a crisis like we just had is beyond me. The FDIC went severely into the red, had to be backstopped by the very public it serves, and then was replenished by raising rates on member banks which have crushed the small and regional banks who behaved honorably, and raised costs for everyone who uses a bank. The whole process has accelerated bank sales and consolidations, reducing competition in the industry. 

Well, at least Walberg acknowledges the middle class is in big trouble, unlike some people. But becoming "unbanked" is hardly at the top of the list of their troubles like being unemployed is.

Walberg also stated that voting against Cromnibus and shutting down the government as a possible consequence was not an option because that would have punished members of the American military who wouldn't get their paychecks, presumably at this the happiest time of the year. No, you wouldn't want to shut down the government and anger a government employee, no sir.

Maybe the most interesting thing Walberg said, however, and doubled-down on in the interview is that everyone in the House knew what was in the massive spending bill because they had all read the individual components of the bill in the form of individual legislation which they had passed in July and sent to the Senate piecemeal . . . all to die under the withering glare of Dirty Harry Reid.

So all the crap that's funded in the bill Rep. Tim Walberg is admitting to knowing about ahead of time, and voting for.

Read like what, here, but not after meals.

Moochelle turns anonymous shopping into racism

Liar liar pants on fire.

Seen here.

Yield on the US 10-year has fallen 29% since last December but the S&P500 is up 11% year over year

It's a little odd.

Falling yields have been associated with big stock market pull backs in the recent past, but not this year . . . so far.

Between December 2007 and December 2008, the 10-year Treasury yield fell over 40% while the S&P500 tanked 37% in calendar 2008. Similarly in calendar 2011 the S&P500 barely eeked out a total return of 2% as the 10-year yield also fell 40%.

Conversely, rising yields have been associated with healthy stock market gains. In 2013 yield on the 10-year rose almost 69% as the S&P500 posted a phenomenal total return in excess of 32%, the fourth best return since 1970. Similarly yield rose 50% between late 2008 and late 2009 as the S&P500 recovered 26% in 2009.

Steady yields in 2006, 2007, 2010 and 2012 relative to the prior year are associated with S&P500 gains of between 5.5% and 16%. That 5.5% year in 2007 is associated with a yield drop of 10%.

The current yield of 2.07% would need to fall another .33 to represent a 40% drop in yield year over year associated with the big stock market pull backs of the recent past which everyone seems to have been waiting for but not getting.

Ugly People Magazine: U.G.L.Y. You ain't got no alibi, you ugly!

Football!

Obama was mistaken for a valet?

He's also been mistaken for a president, an American and a golfer, but who's counting?

The story in People here is making a lot of people pretty angry.

Gone are the days back in 2011 when Obama claimed to miss being so anonymous.

Liar then. Liar now.

Queen Moochelle STILL has a huge chip on her shoulder

Seen here:

"I tell this story – I mean, even as the first lady – during that wonderfully publicized trip I took to Target, not highly disguised, the only person who came up to me in the store was a woman who asked me to help her take something off a shelf. Because she didn't see me as the first lady, she saw me as someone who could help her. Those kinds of things happen in life. So it isn't anything new."

WHAT A BUNCH OF CRAP.

I WAS IN THE STORE RECENTLY AND AN OLD LADY COULDN'T REACH SOMETHING AND ASKED ME TO FETCH IT FOR HER, NOT BECAUSE SHE MISTOOK ME FOR AN EMPLOYEE BUT BECAUSE PEOPLE DO THINGS FOR EACH OTHER . . .

. . . UNLESS YOU ARE THE QUEEN OF THE USA. DON'T ASK HER FOR A SIMPLE ACT OF HUMAN KINDNESS, NO SIR.

THAT'S RACIST!

Did Steve of the Steve Gruber Show ever pay attention to the guy he just helped reelect?

You know the guy: Rep. Tim Walberg, who said the middle class in this country was getting crushed?

You know Tim Walberg, the same guy Gruber had on his show like clockwork during election season, campaigning for free, who just got reelected and promptly voted for Cromnibus?

And you know the Gruber, the one who recently agreed with his buddy Liberal Lee that the middle class in this country was quite intact, and spoke out against Cromnibus?

They must be smokin' the really special ganja on the set of the Steve Gruber Show, you know what I mean man?

True Born Sons of Liberty 2, Gruber 0

Gas for $2.50: What Obama called a phony promise in 2012 is now the reality, without him, without Gingrich, without government

Gasoline nationally just now averages $2.50/gallon without Newt Gingrich's help, or Obama's

See here for the controversy over Newt's faith in his drilling program in March 2012, which materialized without him, and without Obama, because private enterprise did it all, drilling on private lands:

The Gingrich campaign responded to [White House spokesman Jay] Carney Tuesday with a statement that read in part, "$2.50 gasoline is achievable and drilling here, drilling now so we can pay less and be independent of Middle East oil is just common sense."

Jeb Bush meets with John McCain for advice on how to win without conservatives

You know, without those 2012 fear-mongering types.

From the New York Times, here:

When former Gov. Jeb Bush of Florida quietly visited Senator John McCain in his Capitol Hill office this fall, discussion turned to a subject of increasing interest to Mr. Bush: how to run for president without pandering to the party’s conservative base.

“I just said to him, ‘I think if you look back, despite the far right’s complaints, it is the centrist that wins the nomination,’ ” Mr. McCain, an Arizona Republican, said he told Mr. Bush. ...

Mr. Bush would benefit most if those Republicans who do run vie for the support of the party’s hard-liners. That would fracture the conservative base, leaving an opening for him among more moderate-leaning Republicans.

“Lock up the center and let them fight it out on the right,” Mr. McCain said.

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

Yeah, and lose the election.

Who wants another president who thinks it's perfectly alright to divide instead of unite in order to win?

In 2012 Jeb Bush sought to distance himself from conservatism, but in 2014 he wears it like a badge

Judge for yourself from the video and full transcript here a couple of days ago when Jeb insisted he isn't going to change what he believes if he decides to run for president, but it's plain as day to me that he has already flip-flopped and wants this conservative thing both ways, just like his brother did and just like his father did, because he's basically an open borders libertarian who doesn't want to go to the trouble of lifting up existing Americans to fill the "skills gap" and instead wants to bring in the best and the brightest from abroad to take those jobs:

"WE HAVE A LOT OF PROBLEMS THAT COULD BE SOLVED IF WE FIX A FEW BIG THINGS AND IMMIGRATION IS ONE OF THEM. SO LONG STORY SHORT, IF I WAS TO RUN, I WOULD TRY TO PERSUADE PEOPLE. I'M NOT GOING TO CHANGE WHAT I BELIEVE. AND MY BELIE[F]S, [I] THINK, ARE GOOD SOLID, MAINSTREAM CONSERVATIVE THOUGHTS."

Flashback to February 2012 here when Jeb Bush sought to distance himself from conservatism, his own and its then-current expression in the Republican presidential debates:

"I used to be a conservative and I watch these debates and I'm wondering, I don't think I've changed, but it's a little troubling sometimes when people are appealing to people's fears and emotion rather than trying to get them to look over the horizon for a broader perspective and that's kind of where we are," said the former Florida Governor. "I think it changes when we get to the general election. I hope."

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

So in 2012 we have this incoherent jibber jabber that it was totally acceptable to "change for the general election" but he hasn't changed a lick even though he used to be a conservative but in 2014 it's not acceptable to change and Jeb Bush is all transparency and light and hasn't changed a wit don't you know (except he used to be a conservative), and if anyone's changed it's them, those fake conservative demagogues, and vote for me because I'm what I've always been, blah blah blah.

For Jeb Bush conservatism is exhausted by three things in the interview: reforming what's broken, limited government and liberty. Nothing there about preserving anything valuable which exists or what those things might be or how they got that way, or how people in this country who have perverted liberty into license are supposed to be capable of limiting the government when they can't, and won't, control themselves.

And evidently it also just comes down to consistency, which is the hobgoblin of libertarian minds.

It haunts him still.

Average hourly earnings are up 2.69% year over year, inflation 1.66% suggesting Fed tightening may be coming

Earnings are actually getting ahead of the curve in the latest data, suggesting the Fed may move to raise interest rates as "planned".

Not-seasonally-adjusted, average hourly earnings are up $0.65 from $24.11 to $24.76 for all private employees in November. For October the all items consumer price index is up only 1.66% year over year.

In July the picture wasn't as clear, before the dollar took off and gasoline prices began to fall off the cliff. Average hourly earnings at the time were up just 2.01% year over year while CPI (again with a one month lag) was up a nearly identical 2.07%.

I'll go out on a limb and say the Fed continues with "the plan" in order to cool the heat evident in rising earnings.

Not that they should.

I think everyone is forgetting that the employment numbers have recently surged as they always do at the end of the year because part-timers have swelled the ranks at the end of the year. Full-time surges to its cyclical peaks in the summers and early autumn. This is always made more clear by the not-seasonally-adjusted data, which is why it is often missed.

Remember, full-time failed to rise above the 2007 peak again this summer, the seventh year in a row and another dubious post-war distinction for the Obama regime, and part-time just made an all-time high.

An accommodative Fed is still probably necessary, unfortunately, at least the way they think.