Poverty Stats Worst Since 1960s

The Washington Post has the story:

The ranks of the working-age poor climbed to the highest level since the 1960s as the recession threw millions of people out of work last year, leaving one in seven Americans in poverty.

The overall poverty rate climbed to 14.3 percent, or 43.6 million people, the Census Bureau said Thursday in its annual report on the economic well-being of U.S. households. The report covers 2009, President Barack Obama's first year in office.

The poverty rate climbed from 13.2 percent, or 39.8 million people, in 2008.

According to the story, the rate of 14.3% would have been higher still had there not been an increase in Social Security and federal emergency unemployment outlays.

Read more here.

You Want Cheese With That?

h/t Theo

Liquidity Defined

"That's when you look at your investments and wet your pants."

-- Randy Glasbergen

The Change He Hoped For: Record Increase in Poverty Under Obama

As reported by Yahoo News (on Saturday, Sept. 11, when you weren't paying attention):

The number of people in the U.S. who are in poverty is on track for a record increase on President Barack Obama's watch, with the ranks of working-age poor approaching 1960s levels that led to the national war on poverty.

Census figures for 2009 — the recession-ravaged first year of the Democrat's presidency — are to be released in the coming week, and demographers expect grim findings.

It's unfortunate timing for Obama and his party just seven weeks before important elections when control of Congress is at stake. The anticipated poverty rate increase — from 13.2 percent to about 15 percent — would be another blow to Democrats struggling to persuade voters to keep them in power.

More government. More poverty. The change he hoped for.

Read the complete story here.

Freedom Absolutists

Birds of a feather flocked together:

Think of an economy where people could be an artist or a photographer, a writer without worrying about keeping their day job in order to have health insurance. Or that people could start a business and be entrepreneurial and take risks, but not be job-locked because a child has asthma or diabetes or someone in the family is bipolar. You name it, any condition is job-locking.

-- Nancy Pelosi, Speaker of the House, dependent of the American people

[C]ommunist society ... regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner, as the spirit moves me ...

-- Karl Marx, unemployed academic and journalist, dependent of Friedrich Engels

Without the notion of patriotism and national borders, people would live wherever and however they prefer, practice the religions they want, marry whomever they desire, and produce, exchange, and prosper in whatever way they see fit.

-- Kel Kelly, libertarian author and ingrate, here

It should bother more Democrats and Republicans that their country and political parties have been invaded by people who all drink from the same well of failed utopianism, whether they be socialists in the Democrat party, or libertarians in the Republican. Vote for such at your peril.

Federal Reserve Given Until October 19 To Appeal To US Supreme Court

Bloomberg.com reported on August 27th that the Federal Reserve has won yet another reprieve as it seeks to escape rulings requiring it to comply with a Freedom of Information Act request for the names of firms receiving approximately $2 trillion in taxpayer loans:  

The Federal Reserve Board was given 60 days to decide whether to take a Freedom of Information Act case to the U.S. Supreme Court or disclose documents about loans it made to banks during the credit crisis.

The U.S. Court of Appeals in New York today acceded to the Fed’s request to delay implementation of a ruling that compels the central bank to release the reports, giving the bank until Oct. 19 to appeal. The clock began to run on Aug. 20 when the court refused to revisit its earlier ruling against the Fed.

At issue are 231 “term sheets” documenting Fed loans to financial firms during 2008. The records, which include the banks’ names and the amounts borrowed, were originally requested by the late Bloomberg News reporter Mark Pittman through the FOIA, which allows citizens access to government papers.

Expect an appeal to be filed by the Fed on the Oct. 19 deadline to avoid if at all possible having to disclose the explosive information before the Nov. 2 midterm elections.

The complete story is available here.

"I Am Totally Opposed to Burning the Koreans!"

Seen here.

Obama's Brain is Baked

"Boring. Obama. Presser. Is. A. Flop. If Reagan had stammered like this, the media would be talking dementia."

-- Rush Limbaugh, today

The reason the guy can't spit it out is long term exposure to THC. His head is a bakery, man. That's why he needs those teleprompters.

Crusaders Got It Right The First Time

There's much more from Sheik Yer'Mami here.

German Leftist Says Importing Guest Workers A Gigantic Error

From the jobs-Germans-won't-do department, Thilo Sarrazin of the German Social Democrat party and a Bundesbank board member has written a book which has had multiculturalists everywhere in an uproar:

In the book, Sarrazin says Europe's top economy is being undermined, overwhelmed and made "more stupid" by poorly educated, fast-breeding, badly integrated and unproductive Muslim immigrants and their offspring.

"If I want to hear the muezzin's call to prayer, then I'll go to the Orient," he says, saying that allowing in millions of "guest workers" in the 1960s and 1970s was a "gigantic error."...

According to a study from Bielefeld University, one in two Germans thinks there are too many foreigners in the country.

And that's what the left in Germany thinks.

For more, go here.

One Bourbon, One Cymbalta, and One Beer

Bloomberg.com reports disturbing news about our disturbed population, which shelled out $234 billion in 2008 for prescription drugs, saying nearly half the population is on something or other. And then there's this little tidbit at the end:


For adults ages 20 to 59, antidepressants, including Eli Lilly and Co.’s Cymbalta and Pfizer Inc.’s Zoloft, were the most-used drugs.


I note from this source that in 2007 the top five antidepressants were prescribed at a rate in excess of 100 million times. The thirteen antidepressants listed were prescribed an astounding 201.9 million times. That's a lot of Americans walking around emotionally medicated, perhaps between 16 million and 50 million people. How does that compare with the depressants we consume?


Despite this headline back in March, "Alcohol Sales Sober in 2009," the economic downturn did not result in an overall decline in alcohol consumption in 2009:


Distilled spirits and wine experienced positive results, albeit at a much slower rate than in the past, while beer saw unprecedented declines. ...


Distilled spirits grew 1.7 percent in 2009 to 188.7 million cases, marking the 12th consecutive year of positive results for the category. However, the spirits market's expansion slowed from the 3.2 percent gain posted in 2007 and 2.1 percent in 2008. ...


Wine experienced a slight slowdown in its 2009 growth rate. Wine consumption increased 0.8 percent, only 0.1 percent less than its 2008 gain, and finished the year at 297.1 million 9-liter cases. ...


Total beer consumption declined 1.4 percent in 2009 to 2.9 billion cases.


I put that at about .8 cases of booze for every adult per year, 1.3 cases of wine, and 12.7 cases of beer, assuming an adult population of 228 million in 2008. That comes to about .78 ounces of booze per day, and 10 ounces of beer. In other words, a shot and a beer. And less than a glass of wine a week.


And maybe a Zoloft.

Roubini: Corporate Profits Came on Backs of Unemployed

Ambrose Evans-Pritchard reports on the Ambrosetti conference at Lake Como, where Nouriel Roubini made the remark:

Dr Roubini said US companies have plenty of cash but are boosting profits by a policy of “slash and burn” on labour costs. “We’ve lost 8.4m jobs and if you include the loss of hours worked it is equivalent to another 3m. We need to generate an extra 450,000 jobs every month for three years to get it back,” he said.

For more go here.

"King" Quotation on New Oval Office Rug Belonged to Theodore Parker

Martin Luther King Jr.'s freewheeling habit of quoting without attribution plagiarism is now memorialized on the new rug in Obama's Oval Office.

The story is here.

On "Gin"

This limerick’s for purging my sin,

Ousting lust and desire from within,

Which leaves oodles of space

For agape and grace,

Plus humility, virtue, and gin.

-- Robin Kay Willoughby

The Keynesian Stake in the Term "Depression"

The Keynesians need it to be a depression as much as the Austrians, and John Judis of The New Republic explains the former's point of view, here:

In its basic contours, the current downturn is much more similar to the depressions of the 1890s and the 1930s than to the post-World War II recessions. 

ZIRP is Legalized Theft

The line of the day comes from Chris Whalen, writing at Reuters.com here about the damage the Fed's zero interest rate policy is doing to the country:

Fed Chairman Bernanke and the other members of the FOMC are killing the real economy to save the banks — but none of the benefit flowing to the banks is reaching US households. In fact, the Obama Administration has been providing political cover for the Fed to conduct a massive, reverse Robin Hood scheme, moving trillions of dollars in resources from savers and consumers to the big banks and their share and bond holders.

Read the rest at the link, at your peril.

Problem Bank List Update: 829, or 2500?

The latest data on problem banks has been updated by the FDIC, showing an increase from 775 in the first quarter to 829 in the second, according to this story. An unofficial list of the problem banks receives regular updating here.

Compare that with these remarks from an anonymous commercial banker from California offered at Mish's blog here in an on-going series of posts about insufficient loan loss provisions at banks:

In my estimation, if every bank had the collateral of all loans accurately appraised and each loan’s loan grading was finely tuned for an expected loss based on financial performance and collateral values, the number of essentially bankrupt banks in this county would increase by a factor of 4-5 from the current level.

In other words, there is a potential pool of 2000-3000 banks that would be on the FDIC radar's for getting closed.

The health of the industry is not accurately reported by any means.

What continues at the heart of this issue is asset valuations and the accounting rules which govern them. Banks want the most liberal rules they can get, while taxpayers who end up footing the bill for bank malfeasance do not. Elected government officials and unelected bureaucrats in the middle have been and continue to be on the bankers' side, with a few notable exceptions, at a horrible cost to the taxpayers, who rightly feel that they have no voice.

And that's a big part of what all the fuss is about as the midterm elections loom.

Rule By The Rich: Do They Really Need Their Salaries of $3.83 Million?

2009's top congressional millionaires consist of ten senators and twelve representatives, in order from top to bottom as follows:

1. Sen. John Kerry, D-MA, $188.6 million

2. Rep. Darrell Issa, R-CA, $160.1 million

3. Rep. Jane Harman, D-CA, $152.3 million

4. Sen. Jay Rockefeller, D-WV, $83.7 million

5. Rep. Michael McCaul, R-TX, $73.8 million

6. Sen. Mark Warner, D-VA, $70.2 million

7. Rep. Jared Polis, D-CO, $56.5 million

8. Rep. Vern Buchanan, R-FL, $53.5 million

9. Sen. Frank Lautenberg, D-NJ, $49.7 million

10. Sen. Dianne Feinstein, D-CA, $46.1 million

11. Rep. Alan Grayson, D-FL, $31.1 million

12. Rep. Nancy Pelosi, D-CA, $21.7 million

13. Sen. Jim Risch, R-ID, $20.1 million

14. Rep. Rodney Frelinghuysen, R-NJ, $19.9 million

15. Rep. Gary Miller, R-CA, $19.4 million

16. Sen. Bob Corker, R-TN, $18.3 million

17. Sen. Claire McCaskill, D-MO, $15.7 million

18. Rep. Kenny Marchant, R-TX, $15.6 million

19. Rep. Nita Lowey, D-NY, $15 million

20. Rep. Carolyn Maloney, D-NY, $14.1 million

21. Sen. Olympia Snowe, R-ME, $12.6 million

22. Sen. Lamar Alexander, R-TN, $12.1 million.

Altogether they represent wealth of $1.15 billion. Twelve are Democrats, seven of whom are in the top ten and six of whom are in the senate, worth $744.7 million. Ten are Republicans, worth $405.4 million,  three of whom are in the top ten and four of whom are in the senate.

TheHill.com has the complete story here and here, published annually.

GDP for Q2 2010 In Context

"Historically, four quarters following a bottom in GDP, growth is running over a 6% annual rate. Rejoicing over 1.6% because it wasn’t 1.4%, particularly in the context of the most radical bailout, monetary and fiscal stimulus in U.S. history, totally misses the point that we are operating in a totally abnormal and fragile economic environment."

-- David Rosenberg, quoted here

Set 'Em Up, Joe

A glass of wine a day is better for longevity than none (and better than the whole bottle), according to a new study following out-patients aged 55-65:

1,824 participants were followed for 20 years. ... Just over 69% of the never-drinkers died during the 20 years, 60% of the heavy drinkers died and only 41% of moderate drinkers died.

Read all about it, here.

New Republican Record in Gallup Weekly Tracking Poll

Gallup reports that registered voters prefer Republicans to Democrats by 11 points, besting the 1994 5-point record, which preceded the ascendancy of Newt Gingrich and the Contract With America while Bill Clinton was president.

The poll dates to 1942.

Go here for the whole thing.

You'd Know It's a Depression If . . .

. . . 50 million Americans getting Medicaid, stopped getting it (cost $273 billion);

. . . 40 million Americans getting Food Stamps, stopped getting them (cost $70 billion);

. . . 10 million Americans on Unemployment, stopped getting it (cost $160 billion);

. . . 4 million on Welfare, stopped getting it (cost $22 billion).

The total current cost of these safety net programs: $525 billion.

Read all about it, here.

"Bond Markets Tell Us We Are Already In Depression"

Ambrose Evans-Pritchard had a memorable line in a posting July 27th which is apropos after Friday's stock market rally despite so much bad GDP news yesterday:

As David Rosenberg at Gluskin Sheff reminds us eloquently every week, the bond markets are telling us that we are already in a deep and intractable depression – which does not preclude Japanese-style rallies, technical recoveries, and bursts of growth, all within a Kondratieff Winter.

GDP for Q2 2010 at 1.6%

The advance estimate of GDP for Q2 2010 was revised down today to 1.6% from 2.4%, on surging imports and slower growth in corporate profits. The latter, according to news reports, came in at an increase of 2.9% in the second, off fully 50% from the Q1 rate of 5.8% growth in corporate profits.

The next revision to GDP is expected at the end of September.

The data is here.

Federal Reserve Appeal Denied, Continues to Stymie to Protect Banksters

Bob Ivry for Bloomberg News is reporting that the Federal Reserve's appeal in May of a March ruling requiring the Fed to disclose information under the Freedom of Information Act has been denied as of August 20:

The full U.S. Court of Appeals in New York, in a docket entry dated Aug. 20, denied a May 4 request by the Fed to review a three-judge panel’s unanimous March 19 decision requiring the agency to release records of the unprecedented $2 trillion U.S. loan program begun primarily after the 2008 collapse of Bear Stearns Cos.

Unless the court stays its decision, the Fed will have seven days to disclose the documents. In the event of a stay, the central bank and the Clearing House Association LLC, an organization of 20 commercial banks that joined the Fed in defense of the lawsuit, will have 90 days to petition the Supreme Court to consider their appeal. The Clearing House has already said it will ask the high court to rule on the case. ...

The amount the Fed and the U.S. government lent, spent and guaranteed to stem the recession and rescue the banking system peaked in March 2009 at $12.8 trillion, most of it following the September 2008 bankruptcy of Lehman Brothers Holdings Inc.

Go here for complete coverage by Bloomberg.

About That Failure of ShoreBank, Chicago, Illinois

Here's what Mish has to say about it after excerpting reports from Bloomberg, The Wall Street Journal and Zero Hedge:

This is what matters: It is crystal clear there were irregularities in attempting to keep this turkey of a bank alive, irregularities in who was allowed to bid, irregularities in selling the assets to failed management, and a suspicious single bid by a consortium of large US financial institutions, including Bank of AmericaCorp., Goldman Sachs Group Inc. and Morgan Stanley.

The FDIC's handling of Shore Bank smells as bad as a pile of dead alewives on a Chicago beach in mid-July.

Read the rest, here.

David Stockman Hates America

David Stockman's latest screed against PIMCO reveals what a creature of his age he has become:

"Housing is a commodity like furniture and automobiles, and inducing citizens to buy more of it is no business of the state."

In truth everything is a commodity to people like David Stockman, and that he'd much prefer a world which puts more people into that category, as the tenants of landlords, says it all.

Without realizing it, he puts his finger on the problem with what has happened in America in our lifetimes. Everything got commodified, not just our jobs, and now our mortgages, but our very selves. It happens to people who forget where they came from, who they are, and God. That we let the vampires get a hold of the American dream and make a bundle off it is only the most acute and visible example of it. It is almost quaint how Stockman likens what's happened to indentured servitude, as if his remedy doesn't resemble the same.

With mortgage securitization, the American dream got carved up, packaged and sold off to the highest bidder like so many sausages at the meat counter. But the intangible assets of four walls and a piece of ground mean nothing to David Stockman. Privacy, peace and quiet. Some flowers for the table and tomatoes for the pasta, the companionship of pets and a place to bury them when they're gone. The sound of the wind blowing through the trees. The glory of a red maple leaf against a blue sky. The goldfinch, the bluejay, the robin, and crows as big as coons. The snowman standing where bright green grass once called you to mow it. Where families gather to give thanks once a year for our many blessings, in spite of it all.

If that makes me a slave, I'll own it. Someone's banking on it, and not just Bill Gross.

The Desperation Index: Bull Market in Lotto Tickets and Metal Detectors

BusinessWeek.com is reporting here that lotto ticket sales increased 1.5% in the fiscal year just ended, making the North American lottery business larger than $70 billion. Metal detector sales have also jumped.

Follow the link for the whole story. 

Price to Earnings Ratios

John Hussman has an important article here on price to earnings ratios, in particular "forward earnings ratios," which came into vogue in the 1980s and for which there have not been adequate historical series preceding that era. 

In other words, forward earnings ratios are an innovation of the greatest bull market era in American history, and thus they are an outlier.

Follow the link for the complete story. 

"Moochelle": Michelle Obama's New Name

Given to her by none other than Rush Limbaugh:

We have a name for Michelle: "Moochelle." Mooch, mooch, Moochelle Obama. That will tick 'em off, won't it, Snerdley?  

Moochelle Obama.  You compare her with the hated Sarah Palin. Moochelle Obama keeps a personal staff of 24.  Now we know why: To administer to gynecologist friends whose fathers pass away.  Her personal staff includes a makeup artist and a hairstylist, a total annual government salary of more than $1.6 million for the personal staff of Moochelle Obama, plus their travel expenses.  Her Secret Service for security is extra on these trips.  Now, you compare and contrast that with the hate and the ridicule that is thrown at Sarah Palin who did what?  She sold the governor's jet, she dismissed the government's cook, she prepared her own meals, she returned the governor's automobile and drove her own car, she dismissed the governor's security staff, and knows how to use her own gun.  So Michelle's gynecologist, her father died.  So she needed to go to Spain to sort it all out.  All right, there you have it.  That's why.

The whole thing is here.

The Choice Wasn't "Do Bailouts" or "Do Nothing"

Barry Ritholtz provides a very succinct summary of what were the alternatives to the bailouts of 2008, and takes to task those who want to defend the bailouts as if doing nothing were the alternative.

Don't miss it here.

Boycott The Airlines: Don't Fly Until The Scanners Come Out

As Grand Rapids' Ford Airport gets its new backscatter body scanners this week, I learned that the low penetration, privacy and dose claims for these scanners have been challenged by Leon Kaufman as recently as February:

A very few dozen of zealots and madmen have led the economically and militarily most powerful nation the world has known to ... , with the use of x-ray backscatter machines, begin a great public health experiment. ... For a typical body thickness, half of the energy leaves the body on the side opposite the beam’s entrance point. ... Under “features” in the Rapiscan brochure are listed archive, save, and print. The AS&E Bodysearch permits hard-copy printing and storage of images for “file reference.”

If they are wrong about penetration and privacy, can they be wrong about dose?

And isn't it enough that we've been lied to about penetration and privacy?

Read more here.

BLACKOUT NATION

More "year of the black:" black president, Chicago Blackhawks, black beaches, and now blackouts.


Thom Patterson reports for CNN.com on the growing problem of electricity blackouts because of an aging electrical grid, now an estimated $1.5 trillion problem, at which the current administration has thrown roughly $4 billion, a drop in the bucket:

Experts on the nation's electricity system point to a frighteningly steep increase in non-disaster-related outages affecting at least 50,000 consumers.

During the past two decades, such blackouts have increased 124 percent -- up from 41 blackouts between 1991 and 1995, to 92 between 2001 and 2005, according to research at the University of Minnesota.

In the most recently analyzed data available, utilities reported 36 such outages in 2006 alone.


Read Patterson's worthwhile article here. 

The Mother of All Bailouts

Bloomberg.com had an important article in June about the Government Sponsored Enterprises in which it is estimated that they may reasonably require taxpayer bailouts of $1 trillion in coming years:

Fannie, based in Washington, and Freddie in McLean, Virginia, own or guarantee 53 percent of the nation’s $10.7 trillion in residential mortgages, according to a June 10 Federal Reserve report. Millions of bad loans issued during the housing bubble remain on their books, and delinquencies continue to rise. How deep in the hole Fannie and Freddie go depends on unemployment, interest rates and other drivers of home prices, according to the companies and economists who study them.

Unlimited bailout authority for these failed government programs was granted in December 2009. That's what prepared the way for the idea behind the rumors now that underwater mortgage balances may be reduced by the Obama administration.

Read all about it, here.

Bankers Scamming the American People Out of Hundreds of Millions of Dollars

Bloomberg.com has an interesting look inside a bank failure, describing the crimes which occur but never get prosecuted, unless you happen to be a small fry criminal:

If you were a banker, which of the following activities would be more likely to land you a quick trip to the federal penitentiary? Is it:

(a) Misrepresenting your dying bank’s financial condition in order to secure almost $300 million in TARP bailout cash and then quickly proceeding to lose it all, or

(b) Embezzling about $235,000 from your employer to support your compulsive-gambling addiction and pay off personal debts?

The correct answer, naturally, is “b.” In this country, when it comes to matters of high-finance crime and punishment, little pigs get slaughtered, while hogs get fat -- convicted Ponzi schemer Bernard Madoff being this rule’s most notable exception. ...

The large scale crimes are [m]ainly those related to overvalued loans and understated losses. ... where bank employees lied to ... auditors, intentionally delayed loan writedowns and altered documents to hide credit losses.

That's why we highlight "overvaluations" of reported assets when we report on Bank Failure Fridays, just to try to provide some perspective on the scope of the chicanery going on.

Read the complete story here.