JFK, The So-Called Anti-Communist: "I'd Rather My Children Be Red Than Dead"

Quoted here:

At one point, after leaving the room to take another urgent phone call, he came back shaking his head and said to me, “I’d rather my children be red than dead.” It wasn’t a political statement or an attempt at levity. These were the words of a father who adored his children and couldn’t bear them being hurt.

Rush Says There's Nothing New, You Know, Like In The Book Of Genesis

"What has been is what will be, and what has been done is what will be done; and there is nothing new under the sun."

-- Ecclesiastes 1:9

Methodists these days.

Ann Coulter Should Just Shut Up And Stand There (and dance maybe)

John McCain Proves Yet Again Why We Who Supported Him In 2008 Were On A Fool's Errand

"It was pretty obvious that we were not going to defund ObamaCare."

Here.

Republicans' commitment to compromise means they are always defeated before they even begin.

ObamaCare Website Roll Out Fails Horribly, Despite Spending $500 Million

The conservative estimate of the cost of the website to date is $500 million, but in its first week just 51,000 nationwide are claimed to have completed applications successfully.

DigitalTrends.com:

[F]or the sake of putting the monstrous amount of money into perspective, here are a few figures to chew on: Facebook, which received its first investment in June 2004, operated for a full six years before surpassing the $500 million mark in June 2010. Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011. Instagram ginned up just $57.5 million in funding before Facebook bought it for (a staggering) $1 billion last year. And LinkedIn and Spotify, meanwhile, have only raised, respectively, $200 million and $288 million.

The UK Daily Mail:

Just 51,000 people completed Obamacare applications during the first week the Healthcare.gov website was online, according to two sources inside the Department of Health and Human Services who gave MailOnline an exclusive look at the earliest enrollment numbers.

John Boehner Tries To Do The Mussolini . . .

. . . but not very convincingly.

First Time Claims For Unemployment Surge Above 300,000 Breaking Long Streak

Not-seasonally-adjusted first time claims for unemployment surged back above 300,000 for the first time in over two months in today's report, here, to nearly 337,000. First time claims in this category had been averaging 269,000 weekly for ten weeks.

Separate stories indicate computer problems still plague California reporting after all, and that figures today included some catching-up because of that, on top of furloughs of non-federal workers affected by the shutdown. Michigan also reported truncated data due to conversion to a new computer system there, so it may be some time before a more accurate picture emerges. 

The Department of Labor did not include the link to prior data in this week's report.

Self-Described Moderate Rep. Justin Amash To Receive Primary Challenge From Conservative

Grand Rapids businessman Brian Ellis is set to challenge Rep. Justin Amash in the Republican primary as a conservative because of Amash's idiosyncratically liberal voting record, as reported here:

Kevin Heine, chief strategist for iCaucus Michigan, said he's interested in hearing more of Ellis' platform. iCaucus is a Wyoming-based nonprofit that is "strategically allied" with the Tea Party, Heine said. "We saw this primary challenge coming because Congressman Amash's voting record is conspicuously sloppy on both military and veteran issues, as well as social issues," he said. "Neither of those play well in the 3rd District."

In April Rep. Amash famously described himself as a moderate in an interview with George Will when Amash was still flirting with the idea of running for Carl Levin's Senate seat:

He adds, “Because I do not fit neatly in the Republican box, some establishment Republicans and pundits think I am extreme,” but “I am a moderate” because “the point of the Constitution is to moderate the government.”

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This may well be a battle of the businessmen, DeVos and company vs. Chamber of Commerce types, not of conservatism vs. libertarianism per se. Both are what we used to call "shop and till" conservatives, hands familiar with the feel of coins but which fumble with the pages of Plato, the Bible and Shakespeare. Ellis is an accounting major and finance MBA who at least has a history in the real world of making a go of it and raising a family. Amash is an economics major and lawyer who went straight into politics and controversy, heir to a fortune made by his father, not by himself. As a representative he has taken as many courageous stands as he has controversial ones, but remains a mixed bag of predictable aloofness which is always at risk in elections where emotion, not reason, often carries the day. In a region where people think of old trees as members of their family, the advantage goes to the candidate who can tap into that sap. Ellis' entry from the right is a good opener.  

Why Money Market Funds Are Especially At Risk If The Government Defaults

the one-month T-bill settled at .27 after spiking to .32

Money market funds invest in ultra short term securities like T-bills with average maturities under 60 days. These came under pressure yesterday, as reported here:

The one-month U.S. Treasury bill yield spiked to a multiyear high on Tuesday amid mounting concerns that the U.S. may not fulfill its payment obligations to short-term bond holders. The yield on the one-month T-bill traded as high as 0.322 percent, levels not seen since the fourth quarter of 2008, before settling at 0.273 percent, according to data from Thomson Reuters. The yield stood at 0.083 at the start of the month. ... 

"If the U.S. was to default, T-bills are under real threat of not being paid... and the risk premium in the bond yields is reflective of that fear," said Evan Lucas, market strategist at IG. A large portion of demand for T-bills comes from institutional investors, such as money market funds. "Ten-year bonds [by comparison] are relatively unaffected by the shutdown and debt ceiling as coupon payments will flow over the life of the instrument and one or two missed coupons can be recuperated," he added.

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To put the fear in perspective, a 2-year Treasury yields only 0.373% this morning, so the spike in the one-month to 0.322% shows how seriously the bond market can react to the prospect of debt default.

Thank Former Reagan Bureaucrat David Stockman For Gestapo Tactics Of Today's Park Service

The Christian Science Monitor reports, here:

Under a 1981 memo by then-budget Director David Stockman, which is still in effect, the federal government in shutdown mode is allowed to keep policing and protecting “federal lands, buildings, waterways, equipment and other property owned by the United States.” Other essential services cannot be funded, however, including most of the primary mission of the Park Service: providing guidance and interpretation for visitors.

In that way, visitors coming into the parks could be seen as a distraction for rangers providing basic protection, land policy experts suggest.

Old Yellen To Continue To Save The Banking System, And Screw The Rest Of Us.

Here comes Yellen. Woof.

The AP announces tonight that The New Bernank is Janet Yellen:

Under Bernanke's leadership, the Fed created extraordinary programs after the financial crisis erupted in 2008. It lent money to banks after credit markets froze, cut its key short-term interest rate to near zero and bought trillions in bonds to lower long-term borrowing rates.

Those programs are credited with helping save the U.S. banking system.

Yellen emerged as the leading candidate after Lawrence Summers, a former Treasury secretary whom Obama was thought to favor, withdrew from consideration last month in the face of rising opposition.

Yellen, 67, would likely continue steering Fed policy in the same direction as Bernanke.

Housing Analyst Predicts 20% Decline In House Prices In The Next Year

As reported by Bloomberg:

Talk to Mark Hanson about the housing market for five minutes and you may find yourself wanting to sell your home and park the cash in a suitcase. 

The Menlo Park, California, real estate analyst, blogger and founder of consultancy Hanson Advisers predicts a decline of 20 percent in housing prices in the next 12 months. Half the gains since the latest housing bottom in 2011 could be erased in the hot areas -- Florida, California, Nevada, Arizona and Georgia -- by rising interest rates and a thinner herd of speculative private-equity buyers, he says.

Read the rest here.

The Stock Market Laugh Of The Day Comes From Josh Brown, The Reformed Broker

TARP wasn't even a speed bump as the market crashed past 1099

Here:

The House got another crack at the TARP vote on October 3rd and this time it passed 236-171. 63 Dems and 91 Republicans had still voted no, but common sense triumphed. Bush signed it a few hours later and the markets eventually stabilized (although the bear market was far from over.)

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Excuse me, but the market went from 1099 on October 3, 2008 to 899 on October 10th, an 18% decline AFTER TARP was signed.

Then it went to 800 by Thanksgiving, on its way to below 700 by March 2009.

TARP didn't do a damn thing to stabilize the market.

Bloomberg's Wrong. Gold Is Actually Fairly Priced Today By 1980 Standards.

Bloomberg says gold is worth half what it was in 1980, here:

After taking inflation into account, gold is worth almost half of what it was in 1980. It reached a then-record $850 that year after U.S. political and financial turmoil in the late 1970s caused a surge in consumer prices. The metal is valued at $464 in 1980 dollars, according to a calculator on the website of the Fed Bank of Minneapolis.

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Assuming that's true (which it isn't because $850 was a bubble price), theoretically gold has another 45% up to go from today's $1,311 before reaching parity with the 1980 record value of $850. As it happens, that level would be $1,900 an ounce, which we already reached in September 2011.

Since the 1980 high was clearly a bubble price, we may infer that we've already repeated that bubble high in inflation-adjusted terms.

The question is, what's the fair price. The average price in 1980 was about $613, but the low was about  $482. That low today adjusted for inflation is something between $1,140 and $1,340.

Today's last spot price is $1,322.

I'd say gold is about where it should be today, adjusted for inflation relative to 1980.

But 1980 was the blowoff top of a horribly inflationary decade, and gold prices would subsequently sink farther to $300 an ounce. In a fiat currency system dedicated to a strong dollar policy, that's about as low as it gets in the late 20th century floating currency regime. So $300 an ounce in 1985 gets you to only $640 an ounce in 2012 adjusted for inflation, meaning gold needs to fall about 50% from where it is today, if . . . IF! we go back to a strong dollar policy.

Don't hold your breath. They don't believe in it.

Best Summary Yet Explains Federal Reserve's Real Objective Behind ZIRP: To Fix The Banks (Not You)

0.25% is the upper limit of the Fed Funds Target Range

And there's still a LONG way to go.

From Warren Sulmasy of Trinus Investment Partners last March:

[E]veryone ... should ask why the Federal Reserve Bank has overnight rates at 0.25%.

The financial calamity of 2008 relieved the global banking system of around one trillion U.S. dollars. Therefore, in order to recapitalize itself, the global banking system needs to make around 1 trillion US dollars.

The Federal Reserve has made a dramatic, concerted effort to help the global banking system recapitalize itself principally by keeping rates at near zero. The current estimates place the recapitalization in the $300 to $400 billion range. While that is a wonderful gain by any measure, $300 to $400 billion is woefully short of the $1 trillion hole, over $500 billion short.

  

The next $500 billion will be much more difficult for the banks to recapitalize due to the new rules and regulations. While the Dodd/Frank and the Volker rule were created with very good intentions, as so many laws and rules and regulations are, the real impact of these new rules and regulations will be on the bank's bottom lines.

Both Dodd/Frank and the Volker Rule severely limit the businesses banks can pursue. This will create a difficult environment for banks to earn profits and thus, will only increase the time it will take for the global banking system to completely recapitalize itself. Therefore, the Federal Reserve will be obligated to continue the current near zero interest rate policy for a longer period of time than people have projected in order to continue assisting the global banking system to get closer to recapitalizing itself.

Read the rest, here.

Be Careful, Default Is A Venerable Old Liberal Democrat Specialty, Exponentially Imitated By Liberal Republicans

The Atlantic stumbles into the truth, here:

In 1933, President Roosevelt devalued the dollar against gold. That violated the so-called gold clause, which required that all public debts be paid in gold coin of a fixed weight. (America’s overwhelmingly pro-Roosevelt Congress simply declared all gold clauses null and void.) The 1933 devaluation effectively amounted to paying off debts with devalued currency, which is widely viewed as a default. In fact, in her exhaustive research on sovereign debt, economist Carmen Reinhart clearly classifies the 1933 devaluation as a domestic default.

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Imagine waking up on a Monday morning only to find out you now needed almost 15 more greenbacks to get back the same ounce of gold which on Friday the government basically confiscated from you for 20 of them, and they wouldn't let you. That's the legacy of the Roosevelt Democrats.

30 million ounces of gold were handed over to the government in exchange for $600 million, and then the price of that gold was effectively raised to $1.05 billion.

The price of gold was kept close to $35 an ounce for 31 of the next 38 years, when at length Nixon closed the gold window in 1971 when gold averaged about $45 an ounce.

Since then dollar devaluation to date has come to an additional almost 97%.

Total dollar devaluation since 1933 as of this very hour now comes to 98.43%.

Maybe Obama Learned Refusal To Negotiate From Lincoln At Ft. Sumter

The South sent delegations to Washington, D.C., and offered to pay for the Federal properties and enter into a peace treaty with the United States. Lincoln rejected any negotiations with the Confederate agents because he did not consider the Confederacy a legitimate nation and making any treaty with it would be tantamount to recognition of it as a sovereign government. However, Secretary of State William H. Seward, who wished to give up Sumter for political reasons—as a gesture of good will—engaged in unauthorized and indirect negotiations that failed.

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In which case, not a good thing, not a good thing at all.

Wait Times At Healthcare.gov In Michigan Are Running About 5 Minutes

IBD Poll Puts Unemployment At 31%: 47.9 Million Looking For Work, 2 Times Higher Than BLS U6 Level

Here:

Investor's Business Daily has been polling Americans each month on the job market for well over a decade. Unlike the numbers released each month by the Labor Department, ours haven't been crunched, tweaked, twisted, seasonally adjusted or otherwise tortured to tell a comforting story. ... In our IBD/TIPP Poll, we ask a different question: "How many members of your household are currently unemployed and are looking for employment?" Not surprisingly, the answer we get differs greatly from the government's data. This month's survey, completed Thursday night, indicated that 47.9 million Americans are looking for work. No, that's not a misprint: 47.9 million. Out of a workforce of 154 million, that yields a gross unemployment rate of 31%. Among all households, 26% have at least one member looking for work.

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The U6 unemployment rate of 13.7% in August is the combination of the officially unemployed, 11.3 million, the marginally attached to the labor force, 2.3 million, and the part-time for economic reasons, 7.9 million. That comes to 21.5 million unemployed in August by the broadest official government measure. The IBD poll puts the level 2.23 times higher than that at 47.9 million.

The 5-year Anniversary of Jim Cramer's Worst Advice Ever

When TARP was signed by George Bush on Friday, October 3, 2008, the S&P500 closed at 1099 after falling dramatically in September during the events of the banking panic.

Jim Cramer came on television the next Monday morning and advised a national audience that if they needed their money in stocks in the next five years, they'd better sell.

They did sell, and the market continued to plunge . . . all the way into 2009 to the March lows. You might even say a lot of people panicked because of Jim Cramer.

But 5 years later, the S&P500 market index alone is up 54%, not counting dividends. And if you had stayed in the market from August 2008 to August 2013 and fully re-invested your returns, you'd be UP 6.4% per year in inflation-adjusted terms, and 7.8% per year nominal.

Thanks for nothing, Jim!