Fired American Workers Take 50 Percent Pay Cuts And Do Nothing About It. Spaniards Take 15 Percent Cuts And March.

The American people will do anything for money.

Ask anyone over 50 who's been fired despite being highly productive and highly skilled, now working any job, or any number of jobs, just to pay the bills, but making half what they used to make. We're too old to sustain a fight, and they know it.

But they marched today in Spain, and over far less, as reported here:

"There's nothing we can do but take to the street. We have lost between 10 and 15 percent of our pay in the past four years," said Sara Alvera, 51, a worker in the justice sector, demonstrating in Madrid. ...

Protestors complained that they were being made to pay for the financial crisis while banks and the rich were let off.

"We have to all come out into the street, firefighters, street-sweepers, nurses, to say: enough," said Manuel Amaro, a 38-year-old fireman in Madrid holding his black helmet by his side.

"If we don't, I don't know where this is going to end."

I think prosperity has bred the fight out of Americans. Many have lost 40 percent of their net worth since 2008, but here we sit, just taking it, while Spaniards march over just 15 percent.

Something has put the fight back into Spaniards somehow. I admire them for that.

Don't you know that you can strike back at your oppressors, too, America?

Just stop working. Just stop cooperating. 

What if everyone just said "No" to work for a month, say starting August 1? And "No" to volunteering. And "No" to everything anyone expects of you. Employers would absolutely panic. You might even bankrupt them. Shouldn't someone go bankrupt for a change besides you?

The government would panic because it desperately needs the tax revenue. You might even get rid of the government, considering that its reaction just might de-legitimize it.

How about making someone else panic for a change?

How about if America protests for a change?

How about taking August off? Europe does. Why don't we?

What Do Hillary and Huma Have In Common?

Dicks.

They even work for one.

Pelosi Backs Off Romney Tax Returns. Does She Fear Having To Release Her Own?

She's rich as Croesus, after all. Her financial disclosure for 2010 makes her nearly as rich as Romney.

Roll Call reports here that only 17 of 535 elected members of the US House and Senate have disclosed their tax returns:

The Minority Leader faced questions about the issue after a McClatchy News report showed only 17 of 535 Members released their tax returns when asked. ...

“Some people think the same standard should be held to the ownership of the news media in the country who are writing these stories about all of this. What do you think of that?” she asked.

How quickly they pivot to put the focus anywhere but where it belongs get the stink off.

Hey, but while we're at it, how about Diane Sawyer, who married the descendant of a famous communist? She makes an awful lot of money, asking no important questions of anyone, especially of Democrats.

According to salon.com, here:

In 2008, Forbes ranked her 65th on the list of the “World’s 100 Most Powerful Women.” She is said to command a salary of between $12 and $15 million a year.

Obama has spent about $100 million trying to put the stink on Romney, and it isn't working. Obama's rating on his handling the economy has slipped into the 30s during the same interval.

Pelosi is telling him it's time to move on.

MoveOn!

Forward! 

Dick Bove Sounds Just Like George Bush: We Tampered With LIBOR To Save The Banks

The hypocrisy just never ends. It gets so common no one has the energy left from all the outrage to pick up a torch and a pitchfork anymore. The whole industry is corrupt and all we can hope for is God sends a meteor attack to destroy them all, preferably at the opening bell.

Dick Bove, quoted in a story here:

Bove acknowledged holding what "may be a contradictory stance," but he is sticking to it.

"It will be recalled that the regulators were dealing with a significant financial crisis. To stem the panic, they lowered interest rates, invested in banks, loaned trillions of dollars to these institutions and guaranteed trillions more in bank liabilities," he said in an analysis for clients.

"If the dollar Libor rate had risen sharply in this period all of this activity would not have succeeded."

Every time some new misdeed is discovered we're told that it was necessary to bend the rules in order to keep everything from falling apart.

We're nearly four years on from the onset of the panic, and here we have a leading cheerleader for the banking industry telling us that suppressing LIBOR was necessary to save the system. I seem to recall that was the argument for TARP which relieved NOT ONE SINGLE TOXIC ASSET, and for the Fed opening the discount window to the world with nearly $10 trillion in liquidity loans at ultra-low rates homeowners will never get, and for every other violation of the principles of free markets we have witnessed under Republicans and Democrats alike, all of which amounts to the biggest fascist swindle ever perpetrated on a once free people.

A pox on all your houses! 

"Look. I obviously have made a decision to make sure the economy doesn't collapse. I have abandoned free market principles to save the free market system. Having said that, I'm very confident that with time the economy will come out and grow and people's wealth will return."

-- President Bush, 2008

Germany's Lonely Realists About The Euro

From Ambrose Evans-Pritchard, here:

Thilo Sarrazin is not everbody’s cup of tea. The ex-Bundesbanker and shock-jock critic of Islam in Europe loves to make mischief.

But his latest broadside against monetary union in the Frankfurter Allgemeine is spot on. ...

Mr Sarrazin is almost alone in German public life, at least until the dam breaks, which cannot be far away.

His one big ally is Hans-Olaf Henkel, former head of the German industry federation and author of a master plan to break EMU in two – with Germany and northern allies withdrawing, leaving France and the Latin bloc with the euro. ...

He is a brave man, the survivor of two years of vilification in the German press for daring to challenge orthodoxy.

Elizabeth Warren Is Still Talking Bull: Defends Obama's Theft Of Her Idea In "You Didn't Build That"

The Boston Herald quotes her here:

Elizabeth Warren yesterday came to the defense her former boss President Obama’s controversial statement that businesses’ owners can’t take credit for their success, repeating her own campaign line that, “nobody got rich on their own.”

Warren’s reiteration of her statement — which became an iconic and controversial cornerstone of her campaign — comes as conservatives have leapt on Obama for saying “If you’ve got a business — you didn’t build that. Somebody else made that happen.”

Warren said during a campaign stop in Dorchester yesterday, “I think the basic notion is right. Nobody got rich on their own. Nobody. ... they moved their goods on roads the rest of us helped build, they hired employees the rest of us helped educate, they plugged into a power grid the rest of us helped build,” she said.

“The rest of us made those investments . . .."

Class consciousness blinds the left from seeing the obvious defect in the argument. The successful also helped build the roads, build the power grid, and educate the employees in addition to doing what they did on their own.

You know, she should be a little upset with Obama for stealing her arguments without attribution. Obama didn't build those, she did. 

Price Of Gold Adjusted To The Purchasing Power Of The Dollar

What is today's fair value price of an ounce of gold? Is it really $1,579 the ounce?

In 1913 the price of gold was still fixed at $20.67 the ounce and remained there until FDR devalued the dollar and fixed the price at $35 the ounce. It wasn't until 1971 that gold convertibility was finally ended and the dollar allowed to float completely freely. Today's gold price represents a price increase of over 7500 percent from $20.67 the ounce, which was gold's prevailing price after the War Between The States until the establishment of the Federal Reserve in 1913 and right up to the Great Depression election of FDR in 1932.

Does that sound right to you? 7500 percent?! 

One way to decide is to see what's happened to the dollar in terms of its purchasing power since 1913, which marked the end of a long 35 year period of dollar purchasing power stability.

From 1913 through 2011, the dollar's purchasing power has declined so much that it took $23.40 to buy in 2011 what $1 could buy in 1913. Another way to say that is the dollar has suffered a devaluation of 2340 percent over the period.

So if you applied that percentage to the price of gold in 1913, you'd arrive at a gold price in 2011 of $484 the ounce, suggesting that today's gold price is inflated by about 226 percent and needs to fall about $1,095 the ounce.

Opinions vary on the fair price of gold, from $218 (Woodhill's calculation of purchasing power) to $800 (Tamny's ten year average) and even today's market value around $1,500 (Lewis).

I think it is interesting that gold ended both 2003 and 2004 below $440 the ounce. It was in November of 2004 that GLD, the SPDR Gold Shares, first made its appearance on the NYSE, making daily speculation in gold like daily trading in a stock.

It has hardly looked back since, but it probably should, and probably will.

The Purchasing Power of the Dollar Under Post-War Presidents Is A Catastrophe

The purchasing power of the dollar under Truman fell 12 percent in four years (1949-1953).

The purchasing power of the dollar under Eisenhower fell 12 percent in eight years.

The purchasing power of the dollar under Kennedy/Johnson fell 23 percent in eight years.

The purchasing power of the dollar under Nixon/Ford fell 65 percent in eight years (gold convertibility went out the window in 1971).

The purchasing power of the dollar under Jimmy Carter fell 50 percent in four years.

The purchasing power of the dollar under Ronald Reagan fell 36 percent in eight years.

The purchasing power of the dollar under GHW Bush fell 17 percent in four years.

The purchasing power of the dollar under Bill Clinton fell 23 percent in eight years.

The purchasing power of the dollar under GW Bush fell 21 percent in eight years.

Overall, the purchasing power of the dollar has fallen 800 percent in the sixty years between 1949 and 2009. It takes $9 in 2009 to buy what $1 could in 1949.

People like Larry Kudlow who talk about "strong dollar" presidents "like Ronald Reagan" don't know what they are talking about.

We haven't had a single strong dollar president in the post-war period. All eleven have presided over inflationary (monetary) policies which have impoverished the American people.

For the 35 years between 1878 and 1913 the dollar ACTUALLY GAINED A PENNY in its purchasing power, when the dollar was fixed at $20.67 per ounce of gold.

The strong dollar presidents? Hayes, Garfield, Arthur, Cleveland, Harrison, McKinley, Teddy Roosevelt and Taft.

A different breed of men.

Stocks Are Really Cheap? I Don't Think So.

Stocks are not "really cheap".

The Shiller p/e ratio is at 21.90 as of yesterday, 33.3 percent elevated off the mean of 16.43.

Stocks weren't even "really cheap" in March 2009 when the Shiller p/e ratio dipped dramatically to 13.32. Which is not to say stocks weren't "on sale" then. They certainly were, compared to the mean now, but that was barely a 19 percent discount.

"Really cheap" is rare in market history, say a Shiller p/e of 6.64 in 1982, or 4.78 in 1920, or 5.56 in 1932. Compared to the mean today, a Shiller p/e of 5 represents something like a sale of nearly 70 percent off.

Now that's "really cheap".  

Getting Out While The Getting's Good: Decade-Long Retirement Spree Exacerbated Unfunded Liabilities

So says Steven Malanga for RealClearMarkets, here:

From 2001 through 2010, the number of government workers or their beneficiaries receiving pensions from state and municipal funds soared by 2.3 million, or 38 percent, to 8.25 million. During that time, total government workers active in pension funds increased by just 5 percent. As a result, the ratio of public employees still working to those retired fell by a full half worker during the decade, from 2.3 to 1.8. The outflow of money from funds soared, doubling from $100 billion paid to beneficiaries in 2001 to $200 billion in 2010 (the latest year comprehensive statistics are available). ...

Since we haven't set aside enough money to fund these beneficiaries, the massive outflows of funds are troubling. In 2001, governments and workers contributed $65 billion toward pensions while $112 billion went out the door, counting not only payments to beneficiaries but other kinds of withdrawals too. In 2010, workers and government contributed $125 billion to the funds, thanks largely to a sharp increase in contributions from governments (that is, taxpayers), but $213 billion exited the funds.

Unfunded Liabilities Of State, Local Governments Could Be $4 Trillion Or More

That's what I read in the new State Budget Crisis Task Force Report, here:

Under current assumptions used by actuaries to value liabilities, state and local government pensions are underfunded by approximately $1 trillion. Economists and financial analysts generally believe that liabilities should be valued using “low risk” discount rates, which would lead to much higher liability estimates. Under this approach, estimated unfunded pension liabilities are $3 trillion or more. ...

Most state and local governments have promised, in addition to pensions, substantial retirement health care benefits to their workforces. These benefits have barely any funding. In addition to health care, sometimes there are other benefits provided in retirement, such as life insurance; in combination all of these are known as “Other Post-Employment Benefits” (OPEB). Until the Governmental Accounting Standards Board in 2004 issued standards requiring disclosure, governments did not regularly make these liabilities public. ...

State-administered OPEB plans have unfunded liabilities of more than $600 billion. Similar liabilities for locally administered plans are likely even larger, since local workforces are almost three times as large as state workforces. The combined state and local government liabilities are likely to be well above $1 trillion. If the federal government increases the eligibility age for Medicare, OPEB liabilities could increase further, because state and local government retiree health plans generally provide substantial benefits for the transition period between retirement (usually under age 65) and eligibility for Medicare.

Most governments fund these benefits on a pay-as-you-go basis rather than contributing to a funded plan.

The New York Times discusses the report, as reproduced here.

Municipal bond investors will want to weigh seriously this language from the report:

Recently, the number of municipal bond downgrades for governments has outnumbered upgrades. States are finding it difficult to ignore their local governments’ increasing fiscal distress. A few states, including North Carolina, New Jersey, and Pennsylvania, have well-established, effective procedures for monitoring and assisting local governments before they encounter acute fiscal distress . . .. More recently, Michigan has established significantly expanded oversight procedures. But most states wait until local governments approach fiscal insolvency or seek aid from the state before intervening. There appears to be growing recognition in the financial community and the states themselves that state monitoring, supervision, and early state involvement in solving local government fiscal problems is sound policy for both levels of government. But it will require skilled political leadership at the state level to overcome local government resistance to what localities often regard as intrusions on their right to self-government.

Mark Hamill Says Romney's Not Actually Human

Oh yeah? Mark Hamill's not actually Luke Skywalker.

So there.

The answer is -2.18 percent per annum

The question is what is the annual rate of return with dividends fully re-invested and adjusted for inflation for the Standard and Poor's 500 Index for the full five years between May 2007 and May 2012.

For ten years through May it's +1.69 percent per annum.

For fifteen years through May it's +2.55 percent per annum. 

Dead Lefty Accused Obama Of Complicity With The Right And Ethnic Cleansing

It's a fascinating paper delivered by one Robert Fitch, here, shortly after Obama's election in 2008.

He paints a history of Obama you've probably never heard, one which doesn't fit the neat little categories of Left and Right because Obama's Third Way politics, going back at least to Bill Clinton's Hope VI program, is really about the partnership between the status quo, especially the FIRE (finance, insurance, real estate) sector, and government.

Fitch wrote about the same phenomenon in Democrat-controlled New York, which gives you an idea why he was kind of a man without a constituency, especially since he thought the American labor movement got co-opted for the enterprise.

We used to call that sort of partnering fascism, and unfortunately, Robert Fitch is dead and we can no longer ask him to think about it that way.

But we should call it that, and we should still think about it that way if we're ever going to escape the police state which looms on the horizon and is in many respects already here:

"When the Third Way advocates insist that we share a common good; when they refuse to recognize that the interests of the oppressed and the interests of the oppressors don't exist on the same moral plane; when they counsel us to stop being partisans of those interests -- they're not being non or post partisan; they're siding with the powers that be.

"In the same way, Obama's notion of change claims to transcend the politics of interest while it steers sharply to the right. ...

"What we see is that the Chicago core of the Obama coalition is made up of blacks who've moved up by moving poor blacks out of the community. And very wealthy whites who've advanced their community development agenda by hiring blacks. Will this be the pattern for the future in an Obama administration? I can't read the envelope. But I do believe that if we want to disrupt the pattern of the past we have to make some distinctions: between the change they believe in and the change we believe in; between our interests and theirs; between a notion of community that scapegoats the poor and one that respects their human rights -- one of which is not to be the object of ethnic cleaning. Between Hope VI and genuine human hope."

In the same way, one can't help but think that the broader impoverishment of America's home-owning classes was intentional, that the powers that be saw all that wealth locked-up in decades-long built-up home equity and wanted to unleash it, skim it, and junk it so that they could take it over one day, enrich themselves and their friends, and install themselves in power permanently.

Another Person Notices Declining Savings Fueled Personal Consumption

Jeffrey Snider here:

To maintain the post-recovery muddle required a serious correction in the personal savings rate – from a high of around 6% in mid-2010 all the way down to 3.2% earlier in 2012. Without that decline in the savings rate personal spending and consumption would have likely contracted long before 2012. The savings rate has backed up toward 4%, and it appears retail sales are following that.

We noticed the phenomenon already last November here, calling attention to the role that the Social Security tax reprieve was playing in the equation.

Imagine how bad the savings rate and retail sales would look now without that extra cash sloshing around. As it is we're still robbing Peter to pay Paul from Social Security, if anyone out there remembers anymore who those two guys were.

If anyone in the media bothered to check, regular folks out here are getting crushed in this economy at the same time that they are paying for all the handouts given up and down the ladder.

Unfortunately no one will listen to those of us who say stopping the run-away spending train is job one. Not Bush, and now not even Romney.

YOU PEOPLE ARE IN DENIAL.

S&P500 Real Rate Of Return, Dividends Fully Re-Invested, From October 2007 . . .

. . . is -2.83 percent, annualized, through May.

Bob Diamond Has A New Gig: LIBORACE

See it, here.

How The World Will End: The Myrmikan Edition

Good stuff from Daniel Oliver, here, describing how the banking system has become the key institution through which American-style fascism expresses itself:

[T]his is why politicians engage in complicity with the bankers to lower interest rates: first, because money flowing into sovereign debt enables them to spend more money and, second, because the promise of higher asset prices makes for happier voters. But none of this adds to wealth, merely the perception and distortion of wealth.

Moreover, Bernanke’s thesis is not working: the transmission mechanism into higher general assets prices is broken. The banks are insolvent. They flee from one safe haven to another. As Herbert Hoover once lamented: “capital is acting like a loose cannon on the deck of a ship in the middle of a storm.” The banks buy Treasuries not for the income, but because they can pledge them as collateral for more credit, which they require to remain liquid. They are pushed into taking sovereign duration risk because they are too weak to take business risk.

When the market does finally overpower the manipulations, sovereign debt markets will pop, interest rates will rise, the banks will tumble along with the markets they have rigged, and then the real witch-hunts will begin. It is this outcome, not more rounds of money printing, that will send gold up vertically in terms of the major currencies. The current inflation/deflation seesaw is merely the prelude to debt failure and currency revaluation.

Just Say "No" To Work: Why Some Free Men Say "Take This Job And Shove It"

As seen here:

[F]rom the factory to the office tower, the American workplace has been morphing for many into a tightly-managed torture chamber of exploitation and domination. Bosses strut about making stupid commands. Employees trapped by ridiculous bureaucratic procedures censor themselves for fear of getting a pink slip. Inefficiencies are everywhere. Bad management and draconian policies prop up the system of command and control where the boss is God and the workers are so many expendable units in the great capitalist machine. The iron handmaidens of high unemployment and economic inequality keep the show going.

I'm Shocked: George W. Bush Warns Against Spending Cuts Same As Romney

The Keynesian grip on the Republican Party continues apace, which is why it is no match for the real Keynesian deal in the form of the Democrats:

[W]hile warning of the consequences of spiraling federal debt, the book cautions against deficit reduction as an immediate goal, saying tax increases and spending cuts in the short term could strangle growth.

Read all about it here.

The reason these clowns are against spending cuts is they don't have enough confidence in their growth measures. Without the GDP gained from government spending, their policies look weak.

Because they are.