Uninsured Deposits: Cyprus, Maybe 17 Billion Euros, America, $4.75 Trillion

All you high rollers had better hope the big banks don't go bust, but that's what the last five years have been all about now, haven't they?

Government of the banks, by the banks, and for the banks. Big banks. Big mutha banks.

"Married", As In "A Man Provided With A Young Woman" (not with a young man)

Latin maritus, noun -- "married man", "husband", ultimately from Proto-Indo-European "provided with a mari" (a young wife, or young woman). Cf. Sanskrit marya -- "young man", "suitor".

A "bad" person, by contrast, is "inferior in quality" from 1200 C.E., from Old English baeddel or baedling, an "effeminate man", a "hermaphrodite", a "pederast", from baedan, "to defile". 

Robert Shiller Says The Problem Is Insufficient Demand. It's Not.

The estimable Robert Shiller wants the problem to be insufficient demand, when the real problem is everyone in government is doing everything they possibly can to prevent what insufficient demand causes: a lowering of the general price level. In a free market we permit, yeah laud, failure. In ours we loathe it. 

Picked up by Slate, here:

"The fundamental economic problem that currently troubles much of the world is insufficient demand. Businesses are not investing enough in new plants and equipment, or adding jobs, largely because people are not spending enough—or are not expected to spend enough in the future—to keep the economy going at full tilt."

Shiller wants to create demand by raising taxes, whereas free-marketeers want demand to develop the natural way, by letting prices fall. Prices falling means some go bankrupt, except for savers who have wisely prepared for such an eventuality by having NOT spent too much in the past. They survive and are rewarded with cheaper goods and services. If they have saved enough they acquire directly the businesses which produce them. Or if not enough, indirectly through purchase of stocks at lower prices.

Preventing such failure, which is really preventing opportunity, is job one in a credit-driven economy, which is why unleashing capital stored in housing was critical in the 1990s, and why the Fed is doing what it is doing now to keep things "at full tilt" in the hollowed out economy. If it didn't, it would expose all the spendthrifts for what they are, and the entire thing would fail.

One can always hope.

Rush Limbaugh's Junk Math Unnecessarily Discourages Republicans

Rush Limbaugh keeps repeating that 4 million Republicans stayed home and didn't vote for Romney, for example, here, on March 12:

"[H]ad four million Republicans shown up to vote, who did vote in '08 but didn't vote in 2012, we wouldn't be talking about an Obama victory."

This just isn't so. I understand Rush wants to blame the base and not the candidate, but this '4 million' assertion simply has no basis in fact.

McCain received 59.95 million votes in 2008, of 131.5 million cast: 45.6%.

Romney received 60.93 million votes in 2012, of 129.2 million cast: 47.2%.

That's almost a million more votes for Romney than for McCain, and as I've said before, in the swing states Romney lost the entire election by just 770,000 votes. McCain lost to Obama in roughly those same states by 1.4 million votes.

You can argue that lower turnout overall by 2.3 million was all Republican lower turnout, but I don't know how you'd know that. Besides, it's a fact Obama received 3.59 million fewer votes in 2012 than he did in 2008. A good share of them must be represented in that 2.3 million total. Splitting the difference, which is probably more unfair to Romney than to Obama, you are left with 1.15 million Republicans staying home minus the 980,000 by which Romney bested McCain.

The bottom line is you're left with 170,000 Republicans who may have stayed home. Peanuts compared to what was needed to prevail in the swing states.

If Rush wants to argue those 4 million he thinks stayed home were somehow replaced by some new Republican voters no one's ever heard of, he's welcome to do so, but as far as I can make out Republican registrations have remained constant longer than just the last two cycles, while Democrat registrations have declined as a percentage of the eligible voter base as more and more people, according to the Bipartisan Policy Center (BPPC), here, bail out of partisan affiliation altogether:

These revised figures further support the trend in the states which have partisan registration toward increased registration for neither party, rising for the 13th consecutive presidential election year. Based on raw and unadjusted registration figures, Democratic registration is 36 percent of eligible voters, down by 2.2 percentage points from 2008; Republican registration is 27.2, unchanged from 2008 and on the same level as it has been for several election cycles. Republican registration has remained steady due to an increase in Southern and Mountain states registration that have compensated for losses in the West and New England. Registration for neither major party is at 23.8 percent of eligible voters, up from 22.0 in 2008 and now nipping at the heels of the two major parties.

In 2012 BPPC estimated eligible voters at roughly 219 million, meaning Republican registrations were nearly 60 million, Democrat nearly 79 million. But as a share of the eligible voters, Democrats continue to lose affiliation while Republicans tread water, which is why Democrats have to work like dogs, lie, slander and spend gobs of cash to win in still pretty conservative places like Ohio, where the margin was 167,000 votes out of 5.6 million cast.

Rush Limbaugh should stop dumping on his peeps. They haven't let anybody down, but their leaders sure have.

Uninsured Deposits Make America A Much Bigger Casino Than Cyprus

According to the FDIC, here, at the end of 2012 there were $7.406 trillion in insured deposits, but that report covers commercial banks only.

According to the FDIC, here, at the end of 2012 there were $9.447 trillion in domestic deposits in the entire system of 7,083 institutions.

Does that mean there are $2.041 trillion in uninsured deposits? It's not that simple, and the number is actually much bigger than that.

Separately in its statistics on depository institutions the FDIC states that at the end of 2012 there were $8.6 trillion held in "domestic offices" of 6,096 commercial banks, of which 62.6% were insured, and $.8 trillion held in "domestic offices" of 987 savings institutions, of which 86.3% were insured. That's a total of 7,083 institutions with $6.1 trillion insured, and $3.3 trillion uninsured. Just over a year ago Felix Salmon put the figure then at about $3.1 trillion, properly not counting those deposits held outside of domestic offices in running the numbers, so the current $3.3 trillion today looks about right for one year later.

With $10.8 trillion in total deposits, however, both inside and outside of "domestic offices", does it not shock you that just $6.1 trillion is insured? That's insurance for just 56% of total deposits, and no insurance for 44%. It's a little misleading of the FDIC to say 64.27 is the percentage insured. Yeah, the percentage of "deposits held in domestic offices", not the percentage of "total deposits". The relevant line is indented in the illustration attached for a reason. It's a subset of what immediately comes before, not of "total deposits".

(Incidentally, at the end of 2003 there were 9,181 total institutions in the FDIC system. Today there are just 7,083, a decline of 23% in almost 10 years, most of it due to consolidation and just 22% due to bank failures since 2003.)

We're told that in the EMU bank heist in Cyprus, 38 billion euros of 68 billion euros in total deposits is held in accounts over 100,000 euros. But that's not saying 38 billion euros is uninsured. Anything over 100,000 euros is not insured, and that's what's getting plundered. But how much is that?

We're told the idea is to raise about 5 billion euros by expropriating depositors' funds, and that now all of it is going to come from the big depositors, not from the people with up to 100,000 euros. Reports say that the hit to these high rollers is going to be in the neighborhood of 30%. Simple math tells you therefore that 5 billion euros raised at a 30% rate must mean uninsured deposits in Cyprus run in the neighborhood of 17 billion euros, or just 25% of total deposits.

In the US it's 44% of total deposits, so whose banking system is the bigger casino, huh Mr. Moscovici?

With banks closed for the last week, the Central Bank of Cyprus imposed a 100-euro daily limit on withdrawals from cash machines at the two biggest banks to avert a run.

French Finance Minister Pierre Moscovici rejected charges that the EU had brought Cypriots to their knees, saying it was the island's offshore business model that had failed.

"To all those who say that we are strangling an entire people ... Cyprus is a casino economy that was on the brink of bankruptcy," he said.

EMU Sees Something Big On Cyprus And Decides To Tax It

Reuters, here:

Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout. ...

Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki's debts and recapitalize Bank of Cyprus through a deposit/equity conversion. ...

The tottering banks held 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros - enormous sums for an island of 1.1 million people that could never sustain such a big financial system on its own.

Velocity of Money Soared Over 35% During the Housing Bubble

Velocity of M1 money soared to unprecedented heights during the housing bubble, dating from the housing provisions in the Taxpayer Relief Act of 1997. Money changed hands at a rate over 35% faster at the peak reached in October 2007 at 10.367 than at the previous high levels around 7.4.

The burst bubble has seen velocity of M1 plunge to 6.5 today after all those years of new highs from 7.5. Velocity in the 6s was common for twenty years between the 1970s and 1990s, and looks to be again.

This is what happens when you convince Americans to unleash all the stored up capital in their homes, and squander it. Thanks Bill Clinton. Thanks Newt Gingrich.

Your Real 5-yr. Rate Of Return In Stocks Has Been Poor, Actually

The real rate of return in the S&P500 for the five years from February 2008 to February 2013 hasn't been all that good, actually. Just 2.61% per year. And long term investors have had to stomach all the volatility just to get that measly return. Meanwhile investors in the Vanguard Total Bond Market Index Fund have received returns in excess of 5%, while being able to sleep at night.

Has it all been worth it, Ben?

Calculator available here.

Case Shiller Home Price Index In February 2013 Dollars Flirts With Historic Highs

The Case Shiller Home Price Index re-calculated for inflation in February 2013 dollars at 136.11 is today 11.6% elevated from the historic mean of 121.96 going back to . . . the 19th Century.

The 122 level on the index is a veritable polestar of housing prices for forty years from the 1950s until the recent housing bubble, with 140 representing the rare high water mark of prices in the 1980s . . . and the 1890s.

From a long term perspective prices today are elevated and represent a good time to sell. Prices are only low if you think the housing bubble is repeatable.

And it must not be forgotten that the data from the housing bubble itself contributes to elevated mean and median prices on the index, biasing them upward.

First Time Claims For Unemployment NSA Below 300K For Only 2nd Time For Obama

The report is here. The report is good news.

Libertarian Sen. Rand Paul Embraces Form Of Amnesty For Illegal Aliens

Hardly anything good ever comes from libertarianism, including this "not-amnesty-amnesty" from so-called conservative Republican Sen. Rand Paul:

In year two of [Sen. Paul's] plan, illegal immigrants would begin to be issued temporary work visas, and would have to wait in line behind those already in the system before moving forward toward citizenship. A bipartisan panel would determine the number of visas per year. High-tech visas would be expanded and a special visa for entrepreneurs would be issued.

Different from other approaches, Paul would not attempt to crack down on employers by expanding working verification systems, something he says is tantamount to "forcing businesses to become policemen."

"My plan will not grant amnesty or move anyone to the front of the line," Paul says. "But what we have now is de facto amnesty."

All this will do is encourage a flood of more illegals looking for temporary work visas. And if it were really true that we have de facto amnesty now, one wonders then what is the urgency of the issue. Issuing a temporary work permit is the real de facto amnesty.

Sen. Paul must think that telling bald-faced lies works for Obama, so he might as well try it.

Chinese Abortion Ratio To US Perfectly Mirrors Exchange Rate

336 million dead from abortion in China v. 55 million in US over 40 years. That's a ratio of 6.11:1.

The yuan currently trades at 6.22:$1.

Rush Limbaugh Rightly Attacks Libertarian Idea Of Freedom

Today, here:

"[F]reedom" is taking on a whole new meaning, incorrectly and dangerously so. I might say -- and I know I'm gonna make some people mad by saying this. But this very broad definition of freedom that is used to, for example, justify gay marriage, is being advanced not just by radical leftists but by libertarians as well, and even some conservatives. ...

Freedom without virtue isn't freedom.  It will eventually destroy a society.  Freedom without morality. Freedom without proper constraints and restraints. Freedom without an accompanying sense of responsibility. Freedom without a spine or a spinal cord of morality.  We're not talking freedom.  But in today's modern vernacular, we are.  To young people today, that's exactly what freedom is. 

Freedom is hedonism.  Freedom is your sybaritic pursuits.  You do whatever you want, and as long as it doesn't hurt anybody else, there's nothing wrong with it.  And it's the "as long as it doesn't hurt anybody else," that's where the trouble begins.  Because is there great harm to a society when an age-old, I mean, as old as humanity itself custom is corrupted?  Any custom, any tradition that has demonstrated its usefulness, its primacy over hundreds of thousands of years, is a freedom that would corrupt that, actually good?  Is it virtuous?  It isn't. 

Libertarian Sen. Rand Paul Would Throw Everyone "Married Filing Jointly" Under The Bus

Pro-family forces fought long and hard to secure tax preferences for couples trying to raise children for the future in the aftermath of World War II, and libertarian Sen. Rand Paul would give it all away to appease the gay mafia. This is what passes for conservative Republicanism these days.

If you don't know by now that libertarianism is a threat to traditional Americans, you haven't been paying attention.

Story here.

Libertarian Charles Murray Comes Out For Same Sex Marriage

At CPAC, where else?

Story here.

Liberty, Illustrated

This is liberty.

This is not.

Diabolus Duplicetur

Europe: Where Your Money Has Nothing To Fear But The Bank Itself

US Stock Futures Are Down Sharply On Euro Confiscation Gambit

Haven't seen numbers like this in a while.

The market is like the devil: one little word can fell him.

US Banks Still Keep Literally Trillion$ In Liabilities Hidden Off Balance Sheet

So said Floyd Norris just last week, for The New York Times, here.

And you thought they laundered money only in Cyprus.

The New Motto Of The European Central Bank

"The European Central Bank, where your money has nothing to fear but the bank itself."

Cyprus Bailout Deal Amounts To Robbery Of Ordinary Citizens' Accounts

The Chair of the European Parliament's Economic and Monetary Affairs Committee, Britain's Liberal Democrat Member of the European Parliament, Sharon Bowles, comments here on today's news that Cyprus residents, regardless of nationality, must agree to confiscation of personal savings (at either 9.9% or 6.75% of the total) in exchange for an EU bailout, or face a messy national bankruptcy:

"This grabbing of ordinary depositors' money is billed as a tax, so as to try and circumvent the EU's deposit guarantee laws. It robs smaller investors of the protection they were promised. If this were a bank, they would be in court for mis-selling.

"The lesson here is that the EU's Single Market rules will be flouted when the Eurozone, ECB and IMF says so. At a time when many are greatly concerned that the creation of the 'Banking Union', giving the ECB unprecedented power, will demote the priorities of the Single Market, we see it here in action.

"Deposit guarantees were brought in at a maximum harmonising level so that citizens across the EU would not have incentive to move funds from country to country. That has been blown apart.

"What else will be blown apart when convenient? All the capital requirements we have slaved over, what about the new recovery and resolution rules? What does this mean for confidence in cross-border banking and resolution and preventing the fragmentation of the banking sector?

"When the dust has settled on this deal, which I hope it never does, we will see that the Single Market has been sold down the river for a shoddy price. All the worse as the consequences for Cyprus of the Greek bond haircuts were obvious."

The UK Guardian has a full report here, Reuters here. The cost of the 10 billion Euro bailout is to be offset by the confiscations, totaling as much as 6 billion Euros, perhaps half of which will come from rich Russians living on Cyprus. ATMs on the Mediterranean island nation ran dry before noon yesterday.

Of such small sparks are conflagrations made.

TNR Blames And Credits JK Galbraith For Contemporary Financier Fascism

It would be nice if liberals could make up their mind.

The New Republic's Tim Noah here traces TARP, Dodd-Frank and ultimately the general state of regulatory capture (Stigler) of the government by the banks to John Kenneth Galbraith's vision in his 1967 The New Industrial State:

Galbraith (who died in 2006) argued that big U.S. corporations had become immune to competition. Any effort to break them up into smaller companies would neither succeed nor—given the complex challenges of a modern economy—be especially desirable. Better to keep them in harness through a partnership with government. “Planning,” Galbraith wrote (in a sentence you could probably get arrested for writing today), “must replace the market.”

Galbraith was writing about manufacturing giants like General Motors and U.S. Steel. These seemed indestructible at the time, but of course they would soon prove all too susceptible to competition from abroad. Still, Galbraith’s vision of the regulatory state comes pretty close to describing today’s relationship between the federal government and a different oligopoly: the Big Six megabanks. ...

When the 2008 financial crisis hit, the feds went into Galbraithian planning mode. They bailed out the banks through the Troubled Asset Relief Program (TARP), arranged mergers, and, through the Dodd-Frank bill, required big banks to prepare “living wills” showing how they would dismantle themselves in orderly fashion should the need arise. ...

Conservatives were wrong to oppose the government’s bank rescue . . ..

For conservatives who feel queasy advocating the breakup of private enterprises, MIT’s Johnson offers this consolation: Remember George Stigler. Stigler, a conservative economist who died in 1991, won the Nobel for a theory that basically said Galbraith’s partnership approach didn’t work because of “regulatory capture,” i.e., the various ways corporations tame their minders—for example, by maintaining a revolving door between industry and government. Rather than try to control powerful corporations, Stigler thought government should use antitrust law to break them up and let competition rein them in.

What's wrong with this analysis is that banking is not a private enterprise and hasn't been since 1913. The then new partnership of banking with government in 1913 failed in less than 20 years, requiring Glass-Steagall in 1933, which was reactionary liberalism at work. And what we have just witnessed is an instant replay of that debacle, only in faster motion. The Gramm-Leach-Bliley Act of 1999 overturning Glass-Steagall took only 9 years to blow up. But unlike Glass-Steagall, the grotesque of interventions in the wake of this latest panic has done nothing to demarcate clearly the public vs. the private in banking, and consequently keeps the public, and the country, at risk while insuring advantage to those closest to the printing presses at the Treasury. Money goes to money, as they say out in the sticks.

It's not much solace that liberalism's fingerprints have been and continue to be all over the inception and development of financier fascism in the United States. There don't seem to be any conservatives smart enough to understand the advantage it presents to them, and to the country. Or maybe it's just that they've been captured, too.

Sarah Palin Remains A Vulgarian

At CPAC, reported here:

Palin also regaled listeners with a look into Christmas at the Palins. (Palin is set to pen a holiday book later this year.) She said her husband, Todd, got her a metal gun rack for the back of a four-wheeler, and she gave him a rifle. “He’s got the rifle, I got the rack,” she said.

NR called the speech "sprawling", as in "she lay sprawled on the bed, legs spread out".

Republicans, Esp. Mitt Romney, Still Don't Understand There Is No "End" In Politics

Here's Mitt Romney at CPAC, saying "in the end" we'll win:

"Each of us in own way is going to have to step up and meet our responsibility. I'm sorry I won't be your President, but it will be [as] your coworker and I [will] work shoulder-to-shoulder along side you. You see in the end we'll win. We will win for the same reasons we have won before . . .." 

Oh really. If we won before then why do we need to win again? We must have lost somewhere along the way if we have to win again. This is the mistaken thinking of politicians and the people who follow them, that political victories are somehow permanent, especially if we get the right people in there, meaning "us" as opposed to "them".

What it betrays, depending on the source, could be any number of things including narcissism and hubris, but perhaps in this case we see an ideological frame of mind as opposed to a conservative one, the kind of mind which imagines, or at least sells, a better future which unfortunately never arrives because it cannot arrive, due to the minor detail that the future like the present will be populated by the same flawed individuals as ourselves.

Marxists like Obama think that way, and so do too many religious people. And too many Republicans to be legitimately called conservatives, which is a main reason Romney did not appeal as a clear alternative.

CPAC clapped anyway.

Inflation In The 1970s, Illustrated

In the 1950s Woody Hayes taught the football offense known as "three yards and a cloud of dust".

By 1973 my line coach, Fritz Goettel, who passed away in July 1993, insisted on five.

The Banks Rule America And Blaspheme Against Capitalism

In "Bankistan Vanquishes America" here Barry Ritholtz rages against the criminal enterprise under which we live, with a rash of supporting links. Under Clinton, Bush and Obama, its grip has only gotten tighter.

From the conclusion:

On the other side lay the bank apologists, corrupted politicians, and crony capitalists. They advocate the Big Lie of the financial crisis. They choose to ignore the facts and data that disprove their narrative. They continue to push the lies that the bailouts were a good investment. (They weren’t). They work against the Bipartisan consensus that the giant banks should be broken up. They ignore the many former bank CEOs who call for the break up of “Too Big to Fail” banks. They mandated that GSEs were banned from Lobbying, but they made sure that the big banks retained their influence peddling and hold on Washington DC.

They no longer represent the voters of their districts, but instead are the elected representatives of Bankistan.

And unless we do something — and soon — they will vanquish America.

Things haven't changed much since 1819 when the revolutionary paper of fictitious capital resulted in fraudulent bankruptcies on the backs of real capital, real property and commerce (think of today's zero interest rates returning nothing to retirees, collapse in the value of housing long purchased honestly, and moribund GDP and zero velocity money punishing millions with unemployment):

The enormous abuses of the banking system are not only prostrating our commerce, but producing revolution of property, which without more wisdom than we possess, will be much greater than were produced by the revolutionary paper. That too had the merit of purchasing our liberties, while the present trash has only furnished aliment to usurers and swindlers. The banks themselves were doing business on capitals, three fourths of which were fictitious: and, to extend their profit they furnished fictitious capital to every man, who having nothing and disliking the labours of the plough, chose rather to call himself a merchant to set up a house of 5000. D. a year expence, to dash into every species of mercantile gambling, and if that ended as gambling generally does, a fraudulent bankruptcy was an ultimate resource of retirement and competence. This fictitious capital probably of 100. millions of Dollars, is now to be lost, & to fall on some body; it must take on those who have property to meet it, & probably on the less cautious part, who, not aware of the impending catastrophe have suffered themselves to contract, or to be in debt, and must now sacrifice their property of a value many times the amount of their debt. We have been truly sowing the wind, and are now reaping the whirlwind. If the present crisis should end in the annihilation of these pennyless & ephemeral interlopers only, and reduce our commerce to the measure of our own wants and surplus productions, it will be a benefit in the end. But how to effect this, and give time to real capital, and the holders of real property, to back out of their entanglements by degrees requires more knolege of Political economy than we possess. I believe it might be done, but I despair of it’s being done. The eyes of our citizens are not yet sufficiently open to the true cause of our distresses. They ascribe them to every thing but their true cause, the banking system; a system, which, if it could do good in any form, is yet so certain of leading to abuse, as to be utterly incompatible with the public safety and prosperity. At present all is confusion, uncertainty and panic.

-- Thomas Jefferson

No President In Post War Has Made More People Suffer Jobless Longer Than Obama

One Stupid Thing That Really Is George Bush's Fault

Daylight saving time starting three weeks early:

The Energy Policy Act of 2005 (Pub.L. 109–58) is a bill passed by the United States Congress on July 29, 2005, and signed into law by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico. The act, described by proponents as an attempt to combat growing energy problems, changed US energy policy by providing tax incentives and loan guarantees for energy production of various types. ...

The bill amends the Uniform Time Act of 1966 by changing the start and end dates of daylight saving time, beginning in 2007. Clocks were set ahead one hour on the second Sunday of March (March 11, 2007) instead of on the first Sunday of April (April 1, 2007). Clocks were set back one hour on the first Sunday in November (November 4, 2007), rather than on the last Sunday of October (October 28, 2007).

Republican Sen. Rob Portman Of Ohio Flips On Same Sex Marriage

As reported by The Associated Press, here:

Portman said his views on gay marriage began changing in 2011 when his son, Will, then a freshman at Yale University, told his parents he was gay and that it wasn't a choice but "part of who he was." Portman said he and his wife, Jane, were very surprised but also supportive. ... Portman told reporters Thursday that his previous views on marriage were rooted in his Methodist faith.

Portman voted for DOMA in 1996 as representative from Ohio's 2nd Congressional District, and was elected to the Senate in 2010 with Tea Party support.

Portman's wife, who used to work for Democrat Tom Daschle, flipped to the Republican Party when Portman agreed to flip to the Methodist Church.

There's a whole lotta flippin' goin' on, especially toward the voters. If Sen. Portman had an integrity, he'd resign.

How The Mujahideen Fight Against Drones

How the Mujahideen fight against drones, according to The Associated Press, here:

1 – It is possible to know the intention and the mission of the drone by using the Russian-made “sky grabber” device to infiltrate the drone’s waves and the frequencies. The device is available in the market for $2,595 and the one who operates it should be a computer-know-how.

2 – Using devices that broadcast frequencies or pack of frequencies to disconnect the contacts and confuse the frequencies used to control the drone. The Mujahideen have had successful experiments using the Russian-made “Racal.”

3 – Spreading the reflective pieces of glass on a car or on the roof of the building.

4 – Placing a group of skilled snipers to hunt the drone, especially the reconnaissance ones because they fly low, about six kilometers or less.

5 – Jamming of and confusing of electronic communication using the ordinary water-lifting dynamo fitted with a 30-meter copper pole.

6 – Jamming of and confusing of electronic communication using old equipment and keeping them 24-hour running because of their strong frequencies and it is possible using simple ideas of deception of equipment to attract the electronic waves devices similar to that used by the Yugoslav army when they used the microwave (oven) in attracting and confusing the NATO missiles fitted with electromagnetic searching devices.

7 – Using general confusion methods and not to use permanent headquarters.

8 – Discovering the presence of a drone through well-placed reconnaissance networks and to warn all the formations to halt any movement in the area.

9 – To hide from being directly or indirectly spotted, especially at night.

10 – To hide under thick trees because they are the best cover against the planes.

11 – To stay in places unlit by the sun such as the shadows of the buildings or the trees.

12 – Maintain complete silence of all wireless contacts.

13 – Disembark of vehicles and keep away from them especially when being chased or during combat.

14 – To deceive the drone by entering places of multiple entrances and exits.

15 – Using underground shelters because the missiles fired by these planes are usually of the fragmented anti-personnel and not anti-buildings type.

16 – To avoid gathering in open areas and in urgent cases, use building of multiple doors or exits.

17 – Forming anti-spies groups to look for spies and agents.

18 – Formation of fake gatherings such as using dolls and statutes to be placed outside false ditches to mislead the enemy.

19 – When discovering that a drone is after a car, leave the car immediately and everyone should go in different direction because the planes are unable to get after everyone.

20 – Using natural barricades like forests and caves when there is an urgent need for training or gathering.

21 – In frequently targeted areas, use smoke as cover by burning tires.

22 – As for the leaders or those sought after, they should not use communications equipment because the enemy usually keeps a voice tag through which they can identify the speaking person and then locate him.



When The Drones Come After Us, Here's What We're Facing

The missile is about $70K a pop, and a little shorter than yours truly, and considerably thinner.

Michigan And Tennessee To Fly Armed Reaper Drones, Based Elsewhere

Michigan and Tennessee are not going to get C-130 cargo aircraft missions, but armed Reaper drone missions, according to a widely circulated AP story. The way the story is worded is alarming because it makes it seem that the traditional support functions of the bases are being transformed into offensive operations.

A Cadillac, Michigan, source here reproduces the story and mentions a munitions dump going in at Battle Creek in addition to the command and control facility to operate drones, but an mlive.com story here says the drones themselves will be based overseas. Nevertheless, it appears that the Battle Creek base is preparing for a future when there will be offensive drone launch, recovery and support:

"The base is also working toward ... the Launch and Recovery aspect of the RPA [remotely piloted aircraft], a regional munitions storage area, and a Cyber Command mission. "

It is said that the MQ-9 reaper has an effective range of almost 3,700 miles and can operate at up to 50,000 ft. and for as long as 42 hours straight.

Why has President Obama been reluctant to disavow the use of drones on American soil? Maybe it's because that's what he's been planning for all along.

Rush Limbaugh, Shill For Florida Sugar?

What a joke. Rush Limbaugh just accused the regime of trying to interfere in the "free market" in sugar, to drive up the price. Like we've got a free market now. Obama hates sugar like he hates oil and just wants to make it more expensive to use, you know, because liberals hate fat people, but the fact is sugar would be cheaper than it is today if Florida producers weren't protected with tariffs, quotas and price supports.

Americans pay more for sugar already because it's NOT a free market.

Rush once said Donald Trump wasn't a conservative because Trump advocates tariffs against the Chinese.

Given the choice between Trump who's for tariffs and says so, and Limbaugh who's for them but says he isn't, the choice is clear.

236K New Jobs Last Month, Or 100K?

The government report that 236,000 jobs were added last month comes from a long controversial model. An actual private count, as reported here, has a number nearly 58% lower than that:

For all the optimism of the government's report Friday, there were other weaknesses in the data.

More than 100,000 of the new positions came through the Labor Department's Birth/Death Model, which approximates the number of positions created through new business creation and failure.

The Job Openings and Labor Turnover Survey, also from the government, showed a net of 145,000 new positions filled, which is at or just below the level associated with bringing down the unemployment rate.

Market research firm TrimTabs said its independent count, which relies on income tax withholdings, showed just 100,000 new jobs.

"The U.S. economy is not as strong as the conventional wisdom believes." said TrimTabs CEO David Santschi.

Think Mish Will Correct This Blooper?

The deeper I dig the smellier it gets

Seen here:

In "real" (CPI-adjusted) terms, 50% of households are no better off than they were in 1988. Let's dig a litter deeper.

The Gas Hydrates Revolution Will Dwarf The One In Shale Oil/Gas

And the desperate Japanese are leading the way to its successful recovery within 5 years.

So says Ambrose Evans-Pritchard for the UK Telegraph, here:

'The immediate discoveries in Japan's Eastern Tankai Trough are thought to hold 40 trillion cubic feet of methane, equal to eleven years gas imports. The company described the gas as "burnable ice", saying the trick is free it from a crystaline cage of water molecules by lowering the pressure. Tokyo hopes to bring the gas to market on a commercial scale within five years.'

The stuff is all over the world, especially along coastlines of continents, deep, deep down, in quantities double the known fossil fuel varieties.

The future is bright!

Follow the link for more charts and discussion.

Depression In Real Retail Sales Finally Ends, Beats Old 2006 High

The old high in Dec. 2006 was $180.016 billion. The depression low was $155.927 billion in March 2009, a decline of 13.4% in inflation adjusted retail sales. The new real gain in monthly retail sales, however, is barely $350 million, with an "m".

It remains to be seen if the new higher level of real retail sales can be sustained with increased payroll taxes factored in, presumably taking money out of retail circulation. Velocity of M2 and MZM were already at historic lows in Q4 2012 in the post-war period at the temporary lower payroll tax rate.

Gasoline prices were last consistently below $3.00 a gallon in 2010 and since then have averaged about $3.50 a gallon. At roughly 10% of total retail, sudden spikes in gasoline prices can produce expenditure on gasoline which represents a phantom increase to sales, and also mask the fact that miles-traveled remain in depression, a more concrete, so to speak, decline in velocity caused chiefly by enduring low employment by historical measures.

Update, 4-15-13: While the above graph shows real retail, that is, retail level adjusted for inflation, I have found a better representation of reality by Doug Short, reproduced and referenced here, which also adjusts for population growth and removes gasoline because it is really a form of taxation which obscures the underlying level of true retail activity. Bottom line: real retail is actually still about 8% off the 2005 high measured the same way.

Commentary Magazine Defends Reagan's Liberalism

Peter Wehner, here:

"[I]magine the Norquist and Shirley standard being applied to Reagan in the 1970s. If Jeb Bush’s comments unleashed heated attacks, even given his sterling anti-tax record, think about what Reagan’s support for unprecedented tax increases–including higher taxes on top rates, sales taxes, bank and corporate taxes, and the inheritance tax–would have elicited. The Gipper would have been accused of being a RINO, a pseudo-conservative, unprincipled, and a member of the loathsome Establishment. Fortunately for Reagan (and for America) the temptation to turn conservatism into a rigid ideology was not as strong then than it is now."

Let's face it.

Reagan was a Democrat in recovery who brought a substantial number of Democrats in recovery to the Republican Party, where they met fellow liberals with whom they could forge an alliance around the liberalism bequeathed to them by Wilson and FDR, without the communist fellow traveling. Conservatives got pushed to the side, or taken for a ride.

Reagan defended the welfare state but on a scaled back basis with emphasis on less reliance on government and lower income taxes. The New Deal was not scaled back, nor was The Great Society. Even the ramped up Cold War to defeat the Soviets was interventionist and therefore arguably anti-conservative in its basic impulse. The resulting glorification of the US military would horrify the founders who feared them as instruments of tyranny in the hands of an American Caesar.

And now here we are with an enlarged welfare state in OBAMACARE, and actually having a public kerfuffle about an administration which resisted abjuring the use of said military on American soil to snuff out people it and it alone decides are a threat. You know, like gun owners. Are we really supposed to be charmed by the likes of the Krauthammers of the world who insist what Obama has been doing is entirely consistent with the model of Abraham Lincoln who put fellow Americans Confederates to death based on a private interpretation of the constitution?

Nothing's changed, except for the worse. His truth keeps marching on.

Another Observer Notices The Broken Link Between The Monetary Base And Markets

Kopin Tan, who otherwise believes the Fed has been juicing markets, for Barron's, here:

"[W]hile the Fed tripled its balance sheet, not all that money gushed through to the real economy—one reason why inflation is just 2%—as banks funneled the money to mend their balance sheets, corporations hoarded cash, and Americans paid off loans and saved more.

"Between 1960 and 1999, ratcheting up the supply of money often directly lifted stock prices. In the 1970s, for instance, stocks' annual returns were 70% correlated to the growth in money supply. But that link has recently broken down: year-over-year growth in money supply slowed in 2009 and 2012, but stocks rallied in both of those years."

John Hussman Warns Correlation Is Not Causation

Here in "Two Myths and a Legend":

'This first myth is embodied in statements like “since 2009, there has been an 85% correlation between the monetary base and the S&P 500” – not recognizing that the correlation of any two data series will be nearly perfect if they are both rising diagonally. As I noted last week, since 2009 there has also been 94% correlation between the price of beer in Iceland and the S&P 500. Alas, the correlation between the monetary base and the S&P 500 has been only 9% since 2000, and ditto for the price of beer in Iceland (though beer prices and the monetary base have been correlated 99% since then). Correlation is only an interesting statistic if two series show an overlap in their cyclical ups and downs. ...

'In the case of quantitative easing, much of what we observe as “causality” actually runs the wrong way. Market declines cause QE in the first place, and the result is a partial recovery of those declines.'

Depression In Oil Consumption Continued In 2012 At 18.56 million Barrels Per Day

US Petroleum Consumption '80-'11, eia.gov

Reuters had the story here on Feb. 27:

Oil demand for the year was at 18.56 million bpd, down 2.08 percent compared with 2011, with petroleum use falling in every month in 2012 except May.

Consumption in 2011 was 18.95 million bpd according to the Energy Information Administration, here.

Peak consumption was in 2005 at 20.8 million bpd, so 2012 is still 10.8% off the high reached eight years ago.

Consumption in 2012 is almost equivalent to consumption in 1997 when it stood at 18.6 million bpd.

The decline in 2008 to 17.06 million bpd represented a decline in petroleum consumption of a whopping 18%.

TSA Feels Up Claire McCaskill, Senator Upset

Story here.

Airports, where even the senators get treated like criminals by the TSA. But in that case the TSA would be right.

Corporations Have Been Considered Persons Since At Least 1775

And not only have corporations been considered persons since at least 1775, the original 13 American Colonies were considered corporations who like individuals subject to their king also owed everything to him.

To wit, one Samuel Johnson, harmless drudge, in "Taxation No Tyranny" (1775) here:

An English colony is a number of persons, to whom the king grants a charter, permitting them to settle in some distant country, and enabling them to constitute a corporation enjoying such powers as the charter grants, to be administered in such forms as the charter prescribes. As a corporation, they make laws for themselves; but as a corporation, subsisting by a grant from higher authority, to the control of that authority they continue subject. ...

To their charters the colonies owe, like other corporations, their political existence. The solemnities of legislation, the administration of justice, the security of property, are all bestowed upon them by the royal grant. Without their charter, there would be no power among them, by which any law could be made, or duties enjoined; any debt recovered, or criminal punished. ...

It is, say the American advocates, the natural distinction of a freeman, and the legal privilege of an Englishman, that he is able to call his possessions his own, that he can sit secure in the enjoyment of inheritance or acquisition, that his house is fortified by the law, and that nothing can be taken from him but by his own consent. This consent is given for every man by his representative in parliament. The Americans, unrepresented, cannot consent to English taxations, as a corporation, and they will not consent, as individuals. ...

A corporation is considered, in law, as an individual, and can no more extend its own immunities, than a man can, by his own choice, assume dignities or titles. ...

That corporations, constituted by favour, and existing by sufferance, should dare to prohibit commerce with their native country, and threaten individuals by infamy, and societies with, at least, suspension of amity, for daring to be more obedient to government than themselves, is a degree of insolence which not only deserves to be punished, but of which the punishment is loudly demanded by the order of life and the peace of nations.

So in one sense the American revolution was a throwing-off of the corporate yoke and the deliberate breaking of a business contract the terms and conditions of which had fallen into dispute, with the added overlay of political philosophy lately inclined to view monarchy as tyranny.

And we thought crony capitalism was a late invention of fascist Italy when America was actually born of it.

New Food Stamp Record Set In December 2012: 47.79 Million Americans

Libertarian Mish Apologizes For Spelling "Dike" "Dyke"

Gee, that's a first. Of all the misspellt wurds on Mike Shedlock's improbably famous blog which he has never apologized for let alone corrected, and they are LEGION, he not only apologizes for this one, but corrects it. As I've pointed out over and over again, people who can't spell are dangerous.

Libertarians would not be caught dead offending dykes, but the rest of us English-spelling-Nazis have to take it, well, like men! 

Here in "Not Enough Fingers to Contain the Leak in the Dike":

"Apologies for originally misspelling dike as dyke. It was not intentional. I rushed a post, heading out the door for a party."

Dykes everywhere agree: there are never enough fingers.

Nancy Pelosi: Let's Make Elections Less Important!

The anti-democratic Democrat Rep. Nancy Pelosi strikes another blow against that sorry thing, the American voter, here:

“All of us come here to get a job done for the American people, and certainly that is the case with the president of the United States,” Pelosi told CNN chief political correspondent Candy Crowley. “I think that these meetings are not something to say, ‘Well, I’ll do this with you now and do that with them later.’ I think it is, ‘Let’s get some things done together to make elections less important.’”

Elections with less importance are elections which are easier to win. You know, as in if the election isn't that important, we don't really need your votes. Which is just voter suppression of the opposition. Damn straight she'll get her side out.

Democrats. Always trying to impose their vision:

"We will go through the gate. If the gate is closed, we will go over the fence. If the fence is too high, we will pole vault in. If that doesn’t work, we will parachute in. But we are going to get health care reform passed for the American people for their own personal health and economic security and for the important role that it will play in reducing the deficit." -- Nancy Pelosi, March 2010, here

And Bill Kristol says worrying about tyranny is kooky.

Jeb Bush doth protest too much.

Jeb Bush appears on five or six shows on Sunday and accuses the media of being obsessed with politics.

Uh huh.

Only Kooky People Say America Is Hurtling Toward Tyranny

So says, who else?, Bill Kristol, here:

"On the other hand, Paul’s political genius strikes us as very much of the short-term variety. Will it ultimately serve him well to be the spokesman for the Code Pink faction of the Republican party? How much staying power is there in a political stance that requires waxing semihysterical about the imminent threat of Obama-ordered drone strikes against Americans sitting in cafés? And as for the other Republican senators who rushed to the floor to cheer Paul on, won’t they soon be entertaining second thoughts? Is patting Rand Paul on the back for his fearmongering a plausible path to the presidency for Marco Rubio or Ted Cruz? Is embracing kookiness a winning strategy for the Republican party? We doubt it. ...

"And while Obama’s a bad president, and America’s got many problems, it isn’t, as Paul sometimes seemed to suggest, hurtling towards tyranny."

A substantial part of the English speaking world in 1776, notably in America itself, found the following sentiments from the Declaration of Independence equally hyperbolic:

The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. ... In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

It's good to know who's the loyalist, and who the patriot.