Warning To Sen. Mitch McConnell: Watch Out For A Libertarian Spoiler

Incumbent Republican Senator Mitch McConnell of Kentucky, the minority leader in the US Senate, should get ready to face both a Democrat and a libertarian spoiler in his reelection bid.

Libertarians spoiled the senate races for Mourdock in Indiana and for Rehberg in Montana in 2012. So-called Tea Party candidates, Mourdock and Rehberg lost by margins posted to the libertarians' columns in their races. In Montana the libertarian was actually funded by Democrats.

Republicans like Sen. Jim DeMint and Gov. Sarah Palin continue to think, incorrectly, that libertarians are on the Republicans' side. They are not. Gov. Palin in particular has said in the past that she believes it would be a political mistake to alienate libertarians. In saying that, she reveals that she believes Republicans cannot stand on their own. Senator DeMint has said recently that as the new head of the Heritage Foundation he believes it is time to reach out to libertarians to forge an alliance on those things about which Republicans and libertarians agree. It makes one wonder if their own minds aren't divided over whether they are conservatives or libertarians.

Politico reports on the possibility of a libertarian running against McConnell, buried on page 3 of this story about Democrats planning to back a Tea Party candidate:

Liberty for All, a super PAC that put cash behind [Rep. Thomas] Massie and other conservative Republicans, is signaling it’s prepared to spend money to boost a McConnell challenger. One of the group’s leaders, Preston Bates, is a former Democratic operative who worked for Jack Conway, the Democratic candidate who lost to Rand Paul in 2010.

Bates said he left the Democratic Party in 2010, adding that while he personally identifies more with his former party, his year-old group puts money behind viable small government and libertarian-minded conservatives.

“Generally, what we need is to stop electing Republicans that are out of touch with most general election voters,” Bates said.

Libertarians are indeed a subset of the Democrat Party, not a genuine third party. They view themselves as successful not when they stop Democrats from getting elected, but Republicans, as Bates openly states. Democrat money helped a libertarian spoil the race for a Republican challenger to Rep. Giffords in Arizona in 2010, after which she was shot by a deranged libertarian, and in 2012 the Libertarian Party viewed itself as successful because it stopped those Republican candidates for senate in Indiana and Montana.

Sen. McConnell should consider the Democrat threat to back a Tea Party candidate in the Republican primary as a fake to the right. I'd bet rather that the Democrats intend to go left and back a libertarian in the general if possible. That's been their m/o in the past, and likely will be again because it is the more natural for them. When push comes to shove, libertarians jettison economic conservatism for social liberalism, the latter's home being in the Democrat Party.

Why You're A Janitor Or A Taxi Driver With A BA Degree

"[T]he stock of college graduates in the workforce (41.7 million) in 2010 was larger than the number of jobs requiring a college degree (28.6 million)."

Read more about it, here.

Gold To Oil Ratio 2003-2012 Screamed Gold In The Past, Oil In 2012

Year / Average Oil Price / Average Gold Price / Ratio

2003 / $27.69 / $363.38 / 13.12
2004 / $37.41 / $409.72 / 10.95
2005 / $49.93 / $444.74 / 08.91
2006 / $58.30 / $603.46 / 10.35
2007 / $64.20 / $695.39 / 10.83
2008 / $91.48 / $871.96 / 09.53 (dollar low 69.27 on March 18, 2008)
2009 / $53.52 / $972.35 / 18.17
2010 / $71.21 / $1,224.53 / 17.20
2011 / $87.04 / $1,571.52 / 18.06 (dollar low 67.97 on May 2, 2011)
2012 / $84.46 / $1,668.98 / 19.76
2013 / $89.84 / $1,411.23 / 15.71

DHS Wants Assault Weapons For "Personal Defense"

The federal business opportunities website in June solicited bids for 7000 rifles chambered for the popular AR "assault weapon" round and says they are for the "personal defense" of the Dept. of Homeland Security/Immigration and Customs, but stipulates "select fire" which means full auto capable. Yeah. Full auto for personal defense. For them, not you. The contract is for up to $9.8 million.

Hypocrites. 

Check it out for yourself, here.

h/t The Blaze (here)

Sarah Palin Is Still A Box Of Rocks

Sarah Palin thinks monetary policy under Obama has been inflationary, and will continue to be, here:

"Predicting the future has never been easier because here we are! Already we see higher taxes, a stagnant economy, the same inflationary monetary policies, Obamacare looming like a dark cloud over small businesses, yet another demand for 'debt ceiling' increases, continued stonewalling about the tragic Benghazi attacks, a Secretary of Defense nominee who has a history of being antagonistic to our ally Israel, and the attack on our Second Amendment rights by an administration that has no respect for the Constitution or the separation of powers."

Let's see.

The CPI level was 174.2 in November 2000. In November 2008 it was 213.074. And in November 2012 it was 231.025.

That means under eight years of George W. Bush inflation was up 22.32%, for an annual factor of 2.79.

Under four years of Obama inflation was up 8.42%, for an annual factor of 2.11.

The difference between the two is that under Obama the rate of CPI increase has been reduced almost 25% compared to Bush.

It should stop being an article of conservatism to ignore the difference, because insisting on being wrong about it won't help sell the other points.

S&P500 Buy And Hold Investors Since October 2007 Are Down 1.14% Per Year

Read it and weep, here.

The real rate of return in the S&P500 from October 2007 through 2012, five years and two months, is negative 1.14% per year with all dividends reinvested. Stories are circulating that individual investors are beginning to get back into the market. With the Shiller p/e above 23, they're going to get what's coming to them, imho. I've been 90% out of the market since late 2006, and intend to stay that way until a genuine buying opportunity arises, but this sure as hell isn't one of them.

The story is even worse going back to January 2000: real rate of return down 0.56% per year for 13 years January 2000 through 2012.

The S&P500 Is Up 12.31% Per Year In Obama's First Term

You can use the tool which generated this graphic here, anytime you want for anytime you want.

I measure November on November because elections mark the turning point psychologically, which counts for more than anything imho.

Elites have benefitted handsomely under Obama, which is what you would expect from a fascist. If that's too harsh for you, supply "national socialist" or "corporatist".

I reported in September, here, that stock market performance under Obama is the 4th best since Harry Truman, based on incomplete data showing inflation adjusted returns to date. Now that it's the new year, the data is in, but the conclusion is the same. Even though he slips from 12.66% to 12.31% for per annum returns, he's still safely in 4th place behind Truman, Clinton and Eisenhower.

Free market capitalism isn't practised in the United States and hasn't been since at least Woodrow Wilson. The corporatist model in the United States is mediated primarily through banking and the institution known as the Federal Reserve, which attempts to manipulate the economy through control of money, lending and interest rates, rewarding those first in line the most, the bankers, and leaving a few crumbs for the rest of us in a descending pecking order: corporations, unions, insurance companies, etc.  To a lesser extent, the tax code is used to reward friends and punish enemies, which is why it has grown so enormous in size and complicated to follow. The fascists' biggest coup in recent years was the tax reform of 1997 and the banking deregulation of 1999, both under Clinton and Gingrich, which unleashed a torrent of capital stored in decades of the housing stock from which elites skimmed and got very rich. You know it as the housing bubble, the result of the bursting of which has been 5 million homes repossessed and massive unemployment on a scale not scene since FDR. As a socialist, Obama is entirely happy with this arrangement because it offers him political opportunities. Idealism is merely a tool. He uses it to get power and get rich. And like dopes, Americans continue to hand it over, election after election. And some of these prisoners even grow to love their jailers.

The 1932 Dollar Adjusted For CPI Through 2011

The 1932 dollar (when gold was last fixed at $20.67 the ounce) adjusted for CPI through 2011 comes to $16.50 ($1 x 1650%). If you had $20.67 to start in 1932, you'd need $341.06 today to have the identical amount in terms of CPI.

An ounce of gold held since 1932 is worth $1660 right now in 2013, an increase of 8031% since 1932 ($20.67 x 8031%).

Tough choice, right?

Foreign Holdings Of US Treasuries Up Almost 11% Since 2011

Foreign holdings of US Treasury securities is up about 11% from November 2011, when the total outstanding was $5.01 trillion. In November 2012 $5.56 trillion is outstanding, according to the US Treasury, here.

About $548 billion in new monies has thus been lent by foreigners to the US in the twelve months through November 2012.

Federal revenues for fiscal 2012 are estimated at $2.5 trillion, with outlays at $3.8 trillion. That leaves about $750 billion of lending to the feds made up from domestic sources to pay for all the spending.

Reince Priebus Is An Electoral College Fiddler. Get Rid Of Him.

We already have fiddling going on with the National Popular Vote campaign. Now it turns out Reince Preibus, RNC chairman, favors a form of fiddling with the Electoral College of his own, here.

That's three strikes against Reince for me. He did a lousy job in 2012. We did nothing but keep the House, in the worst economy since WWII. He attacked the duly elected candidate for Senate in Missouri. I won't mention Indiana. And now this.

Dump Reince Preibus.

What Was Josh Brown, The Reformed Broker, REALLY Thinking About?

about bullets with one 't'?

or about bulletts with two?

The Left Refuses To Spell Properly. The Right Can't.

People Who Won't Spell Are The Enemy

"We are perfectly in the right to abandon conventions if we can afford to."

Seen here (what a shock, right?).

There is nothing too low which will not be lifted up by this sort.

ObamaCare Is Fascism? So Is The Federal Reserve.

And TARP. And Dodd-Frank.

So says Robert Romano for Investors.com here:

[ObamaCare] guarantees customers to large companies, in this case insurance providers that supported passage of the legislation, and in the process cartelizes the system.

In other words, private profits are being embedded into the law, and enforced by the bureaucracy, which will levy fines on individuals and employers that fail to comply with the mandates. ...

[T]he level of state control in this new system, and insurance industry participation in implementing it to its own benefit, is undeniable. It is corporatism defined.

One could compare it to the National Industrial Recovery Act of 1933 that implemented the National Recovery Administration, which may have been patterned after Mussolini's labor laws, as summarized in a 1991 Yale Law School study by James Whitman, before it was subsequently overturned by the Supreme Court.

Or the Federal Reserve Act of 1913, which gave privately owned banks the power to appoint regional Fed chairmen and outsourced creation of the public currency to a banking cartel.

Or more recently, one might examine the Troubled Asset Relief Fund (TARP), Dodd-Frank's "orderly liquidation fund" and the Fed's continued mortgage-backed securities purchase program — all bailout programs that privatize profits and socialize losses in the financial sector. More corporatism.

This country has been a veritable cornucopia of fascism since the days of Woodrow Wilson and FDR.

Has free market capitalism failed in the United States? It's hardly been tried.

Annual Percentage Increases To Federal Spending Since Fiscal 1999

Fiscal Year / Percentage increase to outlays over prior year

1999 /  3.0%

2000 /  5.1

2001 /  4.1

2002 /  7.9

2003 /  7.4

2004 /  6.2

2005 /  7.8

2006 /  7.4

2007 /  2.8

2008 /  9.3

2009 / 17.9

2010 / (1.8)

2011 /  4.3

2012 /  5.3

Average annual increase over the last 14 fiscal years: 6.2%.

At that rate, the rule of 72 says outlays will double in fewer than 12 years. Outlays for 2012 are estimated to finish at $3.8 trillion. Half of that is $1.9 trillion. Actual outlays in 2001, eleven years prior, were $1.9 trillion.

So in 2023, eleven years from 2012, expect outlays to reach $7.6 trillion.

What Is The Cost Of 5 Million Homes Repossessed By The Banks?

In 2009, it is estimated the average mortgage was $172,000. If 5 million homes have been repossessed by banks in the current 7 year housing catastrophe, using that average amount as a proxy for the cost would mean a hit to the banks of about $860 billion, far less than the $7.7 trillion in emergency lending extended by the Federal Reserve which we have learned about.

The government could have stepped in, if it had had the resolve, and paid off each mortgage at that cost to save the banks in question who were on the hook, and renegotiated ownership with each homeowner. An additional 10 million plus mortgages today are underwater, and could have been incorporated also into the payoff deal.

For its part, the government could have prevented moral hazard in the arrangement by enforcing foreclosure and assuming ownership where applicable, and expanded its public housing role by radically expanding its owned housing stock and becoming the landlord to the former owners, now transformed into renters.

Why that is not preferable to the current arrangement where we continue to bail out the banks and extend and pretend on housing I do not know. It would be bad, but it couldn't be worse.

Yes, it is a formidable logistical task, not without considerable cost in itself, but we'd have this behind us by now if there had only been resolve and decisive action had been taken.

It takes imagination, and our leaders don't have it, in either party.

Latest Real Case Shiller Home Price Index Shows Prices Top Of Range Pre-Bubble

If you take out the obvious housing bubble, the graph shows how prices for housing today are at the upper range of historical experience when adjusted for inflation. These are prices in December 2012 dollars going back to 1890, over 120 years. It doesn't get more current than that. Housing assets are still expensive on this showing, about 12% too expensive, imho. Price discovery is being impeded by Federal Reserve zero interest rate policy. See the graph here.

Money Available For Spending Is Up Over 70% Since 2008, But Total Debt Is Up 7%

M1 money supply has gone up about $1 trillion between mid-2008 and now, almost 5 years. This is basically spending money which is not being spent.

Total credit market debt fell an equivalent amount, but all of it in 2009, so one cannot say the one "offset" the other. (The extra M1 was saved over the nearly five year period. The debt was discharged somehow, through pay-downs or defaults, and relatively quickly during the year of the biggest GDP decline in post-war memory). And since early 2010, total debt is back up over $2.5 trillion. And since 2008 TCMDO is up over $3.6 trillion overall.

Somebody is ramping up debt just like before the crisis, but it's not the consumer.

The Anti-Rush Morning Update

Don't blame the Republican base, or the American people, or the 47 percent for that matter . . . lead them!

Zillow Recognizes 2012 Housing Value Increase Is Double The Norm

The final three months of 2012 marked five consecutive quarters of U.S. home value appreciation, and the near 6% annual jump is roughly double the historical average that has home values climbing about 3% a year, Zillow said.

“Good news for homeowners after years of poor performance,” Stan Humphries, Zillow’s chief economist, said in a statement. But Humphries cautioned consumers against expecting 2012-like gains in the future, saying we expect this recovery to continue into 2013, but at a more sustainable pace.”

The rest is here.

Without a driver for jobs, I see no reason for housing to appreciate at even 3% per year. In fact, prices today are within that percentage of the historical top of their range prior to the bubble. In other words, prices are still too high, historically, but Zillow isn't going to tell you that, at least not that way.

Buyer beware, imho.