Meanwhile, gold was up 11%, and up for the tenth year in a row.
"He's just an honest man, and that's something we need now in this day and time. It's a lot of politics, and no honesty. When you have honesty, well, people will try to do anything to blot you out, and that's what they will try to do is blot him out, because he will be honest, and they need more like him."
Truer words were never spoken. Are any other candidates speaking the truth about the sustainability of trillion-dollar deficits or the Federal Reserve's monetization of the them?
I can beat that. I snapped this picture of an Obama "Yes We Can" puzzle at Big Lots! (née Pic n' Save) for $2.00 two days before Christmas. Hate to see what that's marked down to now!
UPDATE: Welcome, Instapundit readers! Please check out our Tea Party buddies the SLOBs (San Diego Local Order of Bloggers).
Greenspan's Body Count: Aziz "Bob" Yazdanpanah, NaFatemah Rahmati, Nona Yazdanpanah, Ali Yazdanpanah, Mohamad Hossein Zarei, Zohreh Rahmaty, and Sara Fatemeh Zarei
His latest massacre involved a man dressing up as Santa to kill his family among their just-opened presents on Christmas Day.
The Dallas Morning News reported the family was having financial troubles and that the mother moved into the Grapevine apartment after separating from her husband, who is still living in the family's Colleyville home just a couple of miles away.Aziz Yazdanpanah is listed at 5406 Sycamore Court in Colleyville, TX, which was purchased pre-bubble in 1999, so he almost certainly took out a big home equity loan to get in trouble.
Last year, the bank foreclosed on the home, which was tied go the father's filing for bankruptcy according to federal records, The Dallas Morning News reported.
Neighbors told News 8 that the father had been living at the house and was seen just last week cleaning up leaves in the yard. They said the family lived there for at least 12 years.
Neighbors also told News 8 they believe the father works in real estate.
Greenspan's Body Count stands at 207.
UPDATE: Islamic honor killing? There's plenty of blame to go around for this. Greenspan's Body Count killers are never otherwise well-adjusted individuals. Greenspan's bubble crashing is always a contributing factor that pushes at-risk people over the edge. So is Islam, apparently.
At our request, William Bernstein, an investment manager at Efficient Portfolio Advisors in Eastford, Conn., reviewed Rep. Paul’s portfolio as set out in the annual disclosure statement. Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe. ”This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,” he says.
There are many possible doomsday scenarios for the U.S. economy and financial markets, explains Mr. Bernstein, and Rep. Paul’s portfolio protects against only one of them: unexpected inflation accompanied by a collapse in the value of the dollar. If deflation (to name one other possibility) occurs instead, “this portfolio is at great risk” because of its lack of bonds and high exposure to gold.
Running an investment portfolio that protects against only one bad outcome is like living in California and buying homeowner’s insurance that protects only against earthquakes, says Mr. Bernstein. You also want protection against fire and wind and theft and the full range of risks that houses are prone to.The bumbling Mr. Bernstein fails to consider the first and most important thing in financial planning: looking at the totality of the investor's financial circumstances. Having served in Congress for decades, Ron Paul is entitled to a Congressional pension which caps out at 80% of final year's salary of $174,000, as well as full health care benefits. He's also likely got some Social Security and a Congressional 401(k).
How exactly is a 76-year-old man with a Congressional pension well over $100,000 a year, $500,000 in cash, and full Congressional health care benefits at risk from deflation? In the unlikely event that sound money breaks out, Ron Paul is set for life! Wouldn't it then make sense to use the bulk of Paul's investment assets to protect against the risk of unsound money, especially with serial deficits running around 10% of GDP and the central bank printing trillions of new dollars?
And as for bonds, don't get me started. Treasuries have negative real yield. You lose more in inflation than you are paid in nominal interest. And then the government taxes you on the nominal interest anyway. Sure, you could pick up a little more yield by taking on credit risk, but then if deflation actually does hit, those credit risks are going to default! Ron Paul's decision to hold cash instead of bonds is sound.
UPDATE: I stand corrected. In a selfless and principled move that sets him miles apart from the rest of the scum in Washington (I'm looking at you, Newt Gingrich!), Ron Paul refused his Congressional pension. Still, with a half million in cash and millions in dividend-paying mining stocks, I don't think the deflation boogeyman keeps Ron Paul up at night. And don't forget all that gold that he once had that he mysteriously stopped reporting to the government.
Strangely parallel to the Yellowstone catastrophe was the start of the federal government's other fire-suppression policy with the 1984 Continental Illinois "too big to fail" bank bailout. This was followed by Alan Greenspan's pronouncement immediately after the 1987 stock market crash that the Federal Reserve stood by with "readiness to serve as a source of liquidity to support the economy and financial system," which heralded the birth of the "Greenspan put." The Fed would no longer tolerate fires of any size.
From a forestry point of view, the lessons were learned. In 1995, the Federal Wildland Fire Management Policy stated, "Science has changed the way we think about wildland fire and the way we manage it. Wildland fire, as a critical natural process, must be reintroduced into the ecosystem."
Herein are pearls of great wisdom for central bankers today. Central banks are creating a tinderbox by keeping alive many very bad investments, fertilizing them with everything from artificially low interest rates to preferential liquidity to outright securities purchases. As these institutions and instruments overrun the financial landscape, they hamper the economic ecosystem and perpetuate the environment of low growth and high unemployment in which we currently find ourselves.
Seeing periodic, naturally occurring catastrophes as part of the growth cycle requires thinking more than one step ahead, not only longer term but, more specifically, intertemporally. This is perhaps an insurmountable cognitive challenge, both to investors and central bankers in today's news-flash world. When contemplating the forest, we may intuitively understand nature's logic of growth. Yet when we look at the seeds of destruction we have sown through current monetary policy, it is clear we are lost in the trees.
Ahh the TSA. They've molested me, pulled out my questionable battery-operated devices in winding lines, scanned my boyfriend's naughty bits, harassed me for the state of California budget problems that prevented my state-issued ID from being released in a timely manner and destroyed my $700 HP laptop. My relationship with them goes beyond love-hate, it's a necessary evil that I accept as a person who actually needs to get out of town every few weeks or months. I've driven across the country - several times - but with 3 or 4 vacation days to cash in, what can I do but subject myself to the TSA violations just to escape from my homebase for 72 short but precious hours?
So when I read about the person stopped on a Washington to Chicago flight trying to smuggle in knives hidden in a carved-out book (a book about ninjas, none the less), I couldn't help but think back to my harassment on a flight to San Francisco from Richmond way back in 2009:
If anyone recalls, the first time I'd flown in a long time was mid 2009. The very nice but totally wrong TSA agent at Richmond International Airport confiscated my pink bullet belt (available from the terrorist costume outlet Hot Topic) because bullets were a "replica weapon," which are not allowed on American flights. I repeat: fake bullets grommeted to a pink canvas belt, looped into my pants. I'm crying in the airport carrying an Eeyore I used as a pillow and this guy wants to confiscate my lame Hot Topic belt because its (likely plastic) fake bullets "replicate" a weapon. Who am I going to threaten with the fake bullets firmly attached to what is holding up my pants?
Whatever. I let him toss it in the trash. It's not worth getting violated (I had been on vacation, I'd spent days doing that anyway) over a cheap ass belt. It was an awesome belt. My pants slipped down my ass all the way home once I made it back to San Francisco. Dickhead.
Anyway. What happened to the wanna-be ninja shlepping daggers to Reagan Airport in a ninja book? Finally, we know.
WUSA reports there are no plans to file charges, since investigators determined the passenger was not a security threat.
If I would have fought the TSO in Richmond about my precious bullet belt, I'd have missed my flight while sitting in a Richmond Airport jail cell. And yet, you're telling me some dude tried to hide knives in his carry-on and yet wasn't charged with anything?
There is something horribly fishy about this story.
However, a friend sent me his most recent subscription newsletter, which was devoted not to investment advice but to commenting on the sad state of our nation. Every one of those words rang true, and it glowed like burning coal. I forwarded it to friends but regretted not having an online copy that I could link here for WCV readers.
Well, here it is, a concise and precise explanation of the corruption that is rotting America from within. Enjoy.
Porter Stansberry: The Corruption of America.
PPP shows Ron Paul in the lead in Iowa.
According to the PPP poll, Mr. Gingrich's campaign poll numbers are dropping "rapidly" and Ron Paul has now taken the lead in Iowa. While Rep. Ron Paul, Texas Republican, is leading the poll at 23 percent, Mr. Gingrich is now at 14 percent. Only former Massachusetts Governor Mitt Romney barely trails Rep. Paul at 20 percent.We have a stark choice in 2012: the status quo of never-ending debt, intrusive government, Wall Street looting of the economy, and global military adventurism; or peace, liberty, and fiscal responsibility.
Please give what you can here.
An employee who killed two people at a Southern California Edison office before taking his own life targeted his victims, a witness said.
The shooter was identified Saturday as Andre Turner, 48, of Norco, the Los Angeles Times reported. He shot four co-workers at the company's information and technology office in Irwin Friday afternoon, including two who were critically injured.
Let's go to the real estate records. Turner was listed at 1495 Andalusian Drive in Norco in California's Inland Empire, ranked the #2 worst place in America.
Turner bought the McMansion in 2004 for $711,000, reportedly put a lot more money into it, and was trying to short-sell it for $590,000.
Workplace disputes rarely end in violence. The psychological impact of severe financial distress caused by Greenspan's bubbles cannot be underestimated. It is what pushes a few, like Andre Turner, over the edge.
Greenspan's Body Count stands at 200.
It's one thing for $1.2 billion to vanish into thin air through a series of complex trades, the well-publicized phenomenon at bankrupt MF Global.Jesse's Cafe and Market Ticker have additional thoughts, with which I agree completely. This completely violates the basic assumption that any financial assets you hold through a broker are legally yours and protected by law. You should immediately reassess ALL of your financial assets held through brokers. Here are a few steps I'd recommend:
It's something else for a bar of silver stashed in a vault to instantly shrink in size by more than 25%. That, in essence, is what's happening to investors whose bars of silver and gold were held through accounts with MF Global.
The trustee overseeing the liquidation of the failed brokerage has proposed dumping all remaining customer assets—gold, silver, cash, options, futures and commodities—into a single pool that would pay customers only 72% of the value ...
1) Immediately take your stock brokerage accounts out of "Type 2" (margin) and make them all "Type 1" (cash). If you have Type 2 accounts, your broker can lend out your securities to other banks (called "rehypothecation"), which is similar to what may have happened at MF Global. You don't need margin anyway unless you want to use risky leveraged stock and option strategies.
2) Consider taking your securities out of brokerage accounts entirely. You can request stock certificates be sent out to you, and you'll receive your dividend checks in the mail.
3) With respect to precious metals, there is no substitute for physical that you hold yourself or with a private storage firm such as Brinks that is not connected to a leveraged financial firm. We've warned before not to buy the ETFs, and that applies to futures and other derivatives. Just ask Gerald Celente or Bill Fleckenstein.
4) Don't hold any significant money in money market funds. Use FDIC-insured savings accounts or buy FDIC-insured short-term CDs instead. Many money market funds are invested in paper from European banks, and with funds paying essentially 0%, you are taking real risk without any compensation.
5) Where you must stay with a broker (for IRAs, for example), stick with independent, plain-vanilla firms like Schwab, e-Trade, Vanguard, or Fidelity. Avoid brokerages owned by the dirty, leveraged, global banks. See what Bank of America just did moving trillions of derivatives from its investment arm to its FDIC-insured bank arm? The global banks are ticking time bombs and they want to take their customers and the taxpayers down with them. Want to hide by going to 100% cash and Treasuries? Not so fast. Also in this week's Barron's, here is "Face-ripping inflation" from Lee Quaintance and Paul Brodsky of QB Asset Management:
The [trillions in systemic] bad debt could be restructured so that creditors get cents on the dollar. The QB partners doubt this will happen because it would cause too much pain.
The more likely outcome is that the central bankers print more base currency, reducing the buying power of the money already in circulation.Long-time W.C. Varones readers will recognize a familiar theme here. The unsustainable debt will be resolved either by inflation or default, and inflation is likely to be the political path of least resistance. I'm not as confident on the timing as Quaintance and Brodsky, as this has already taken longer to play out than I would have expected.
And voila! You have skin-peeling inflation.
"A full deleveraging of the banking system could mean that the dollar and other currencies will lose 70% to 80% of their purchasing power," Quaintance says, arguing that all major banks in developed lands will suffer because markets are so interconnected.
How should investors prepare if they buy into this Grinch-y world view? Buy gold and unlevered assets, says Quaintance. The losers in this scenario: holders of cash and "risk-free" Treasuries. Of course, cash and Treasuries are what risk-adverse investors favor right now.
Stay diversified out there.
They've gone indoors and are hammering the phones, organizing, and holding politicians accountable. Read all about Tea Party 2.0 at Reuters, including a quote from our own Leslie Eastman.
In other Tea Party news, Tea Party Patriots spokesman Mark Meckler was arrested at a New York airport while declaring his permitted, locked, and unloaded gun per TSA regulations. Leslie has the full story at Temple of Mut, and Sarah Bond discusses it with KOGO radio's LaDona Harvey here (starting 01:40). Apparently the local cops have a history of harassing lawful gun owners in violation of federal law. I think there's going to be blowback on this one.
I for one am proud of this step and never ever want to be considered a terrorist because I'm certainly not one. I can state without reservation that I would give up all my freedoms to ensure that my freedoms are protected.
(Reuters) - The U.S. House of Representatives approved a defense bill on Wednesday requiring the military to handle suspected militants linked to al Qaeda, acting not long after President Barack Obama removed a veto threat from the controversial legislation.
The bill is expected to pass the Senate this week and then go to Obama's desk for his signature into law.
Shortly before the House vote, the White House announced the president's advisers would not recommend a veto, although they said they still had concerns about the measure.
CHEERIO CONGRESS! CHEERIO SUPREME LEADER! WE SUPPORT YOU UNCONDITIONALLY BECAUSE IF WE DIDN'T, WE KNOW OUR CONSTITUTIONAL RIGHTS NO LONGER EXIST.....
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More on Jerry Sandusky's rock solid legal defense here.
This bit made think for the first time that he -- or at least his speechwriter -- actually understands what's going on:
Long before the recession hit, hard work stopped paying off for too many people. Fewer and fewer of the folks who contributed to the success of our economy actually benefited from that success. Those at the very top grew wealthier from their incomes and their investments -- wealthier than ever before. But everybody else struggled with costs that were growing and paychecks that weren't -- and too many families found themselves racking up more and more debt just to keep up.
Now, for many years, credit cards and home equity loans papered over this harsh reality. But in 2008, the house of cards collapsed. We all know the story by now: Mortgages sold to people who couldn't afford them, or even sometimes understand them. Banks and investors allowed to keep packaging the risk and selling it off. Huge bets -- and huge bonuses -- made with other people's money on the line. Regulators who were supposed to warn us about the dangers of all this, but looked the other way or didn't have the authority to look at all.
That's exactly right.
The middle class fell behind for many reasons, both natural economic reasons and Washington-created policy error reasons. Chief among the first category are technological developments and international competition, in that order. ATMs replaced tellers, e-mail replaced mailmen, MERS replaced loan processors, computers replaced cubicle-dwellers (see our earlier posts Rise of the Machines and RotM continued).
The policy errors that contributed to the demise of the middle class include the Federal Reserve deliberately facilitating stock market and housing bubbles so that a generation of Americans thought they could get rich quick. Why get a difficult degree in engineering or medicine when you can make more money flipping stocks or flipping houses? These bubbles enriched those at the top (investment bankers, stock brokers, mortgage brokers, asset owners), and left middle-class workers with neither jobs nor skills after the bust. Beyond the Federal Reserve, Congress and many Administrations were complicit in the bubble-blowing with misguided policies via FHA, Fannie Mae, Freddie Mac, CRA, etc. Obama doesn't understand -- or doesn't admit to understanding -- this yet.
But if Obama is beginning to understand how we got here, he couldn't be further from understanding how to get us out of here. Obama's solutions are expensive mandates on businesses like ObamaCare, left-wing tribunals like the NLRB telling companies how they can run their businesses, and demonization and taxation of successful business people. Oh, and raising taxes for 10 years to pay for a 1-year re-election stimulus. All these will destroy job opportunities for the middle- and aspiring-middle classes.
What might turn the tide? Repeal ObamaCare, scrap the NLRB, and flatten the tax structure, ending loopholes and subsidies. Yeah, we need to deal with the debt issue too, but that's another post (and another area where Obama's policies make things worse).
I'm reminded of the lyrics of Son Volt's Drown:
What goes wrong
You're causing it to drown
Didn't want to turn that way
You're causing it to drown
Doesn't make a difference now
You're causing it to drown
Scariest Words I Have Heard All Year: The Federal Reserve's moves to grant special favors to European governments "pose little risk to the U.S. taxpayer, Fed officials said, because the Fed is doing business with foreign central banks viewed as trustworthy." Fannie Mae and Freddie Mac, Bear Sterns, Lehman Brothers, Merrill Lynch, Dexia Bank of Belgium -- they were "viewed as trustworthy," too. U.S. taxpayers once were told they would never, ever have to cover Fannie Mae losses. Now U.S. taxpayers are being told they will never, ever have to cover losses for European bonds.~ Gregg Easterbrook
What happened last week was that the Fed offered deeply discounted "liquidity swap lines" to European banks. This mumbo-jumbo means European banks can borrow U.S. dollars from the United States at 0.5 percent interest. If you need to borrow for a car or credit card debt, can you get a 0.5 percent loan directly from the United States government? Now wealthy Europeans can!
As collateral, the Federal Reserve received promises of euros. Possibly you have read a newspaper at some point in the past year. If so, you know there is a real chance the euro might go out of existence. In that case the collateral becomes worthless. The Fed will have given a large amount of U.S. dollars to Europe to be squandered.
The Federal Reserve did not say how many U.S. dollars have been offered to European governments. The last time transactions of this sort happened, Fed "swaps" to Europe peaked at $580 billion. And as Bloomberg News pointed out last week in an important investigative story by Bob Ivry, Bradley Keoun and Phil Kuntz, the Fed recently has been handing insider companies huge subsidies without even disclosing that it is doing so.
The reason European banks seek dollars in the first place is that, at the moment, companies and investors don't want to borrow euros: corporations and investors know there is a risk the euro will become worthless. Last week that risk was shifted onto American taxpayers. Now European banks can make loans in dollars rather than in euros. If the loans succeed, the rich of Europe keep the profits. If the loans fail, average Americans will be handed the bill. Perhaps that's why the Fed announcement was written so as to be incomprehensible.
At the Fed, when high-level staffers leave, one year later they may seek lucrative jobs at the banks whose profits rise because of Fed actions. Banks and other big businesses often hire former regulators to cushy jobs, in order to send this message to current regulators: sell the public down the river, and there will be a cushy job for you too.
A Fed defender would say that if the economy rebounds and the euro stabilizes, then there will be GDP growth with no losses to taxpayers. Let's hope. Yet in this best-case scenario, the wealthy of Europe get their capital at a half percent courtesy of Uncle Sam, while typical Americans pay 4 to 20 percent interest to borrow. That's the best case!
Washington has not only put the younger generation on the hook for at least $14 trillion in debt -- now young Americans may end up on the hook for money squandered in Europe. TMQ asks again: Why aren't voters under age 30 outraged about this?
CNBC "experts" should read more ESPN columns and watch more Comedy Central shows. They might learn something.
Also well worth reading is George Will's column, Romney and Gingrich, from bad to worse.
Gingrich, however, embodies the vanity and rapacity that make modern Washington repulsive. And there is his anti-conservative confidence that he has a comprehensive explanation of, and plan to perfect, everything.
Granted, his grandiose rhetoric celebrating his “transformative” self is entertaining: Recently he compared his revival of his campaign to Sam Walton’s and Ray Kroc’s creations of Wal-Mart and McDonald’s, two of America’s largest private-sector employers. There is almost artistic vulgarity in Gingrich’s unrepented role as a hired larynx for interests profiting from such government follies as ethanol and cheap mortgages. His Olympian sense of exemption from standards and logic allowed him, fresh from pocketing $1.6 million from Freddie Mac (for services as a “historian”), to say, “If you want to put people in jail,” look at “the politicians who profited from” Washington’s environment.
His temperament — intellectual hubris distilled — makes him blown about by gusts of enthusiasm for intellectual fads, from 1990s futurism to “Lean Six Sigma” today. On Election Eve 1994, he said a disturbed South Carolina mother drowning her children “vividly reminds” Americans “how sick the society is getting, and how much we need to change things. . . . The only way you get change is to vote Republican.” Compare this grotesque opportunism — tarted up as sociology — with his devious recasting of it in a letter to the Nov. 18, 1994, Wall Street Journal (http://bit.ly/vFbjAk). And remember his recent swoon over the theory that “Kenyan, anti-colonial” thinking explains Barack Obama.
Gingrich, who would have made a marvelous Marxist, believes everything is related to everything else and only he understands how. Conservatism, in contrast, is both cause and effect of modesty about understanding society’s complexities, controlling its trajectory and improving upon its spontaneous order. Conservatism inoculates against the hubristic volatility that Gingrich exemplifies and Genesis deplores: “Unstable as water, thou shalt not excel.”
Meanwhile, Ron Paul is a strong second in Iowa!
Let's hope Gingrich implodes before, not after, the nomination. And maybe we'll have a chance to vote for a real reform candidate this time.
Seeking Alpha posted commentary on metals and fiat currencies titled "Is Gold A Risk Asset Or A Safe Haven" which offers an interesting argument.
One of the reasons the debate over whether gold is a risk asset or a safe haven seems to live on is the fact that one troy ounce of gold has a monetary value priced in fiat currency. This monetary value fluctuates up and down. As it does, people like to call gold a risk asset or a safe haven, based on how the fiat monetary value is performing relative to asset classes such as equities or fixed income. It seems like every time we see gold, in dollar terms, move in a direction opposite the S&P 500’s (SPY) daily movement, the debate heats up. Furthermore, people like to point out the bear market that dollar-priced gold suffered during the 1980s and 1990s as evidence that gold is neither an inflation hedge nor worth owning over long periods of time.
All of this misses the point about what gold as a store of value represents in a fiat currency world. When owning gold as a store of value in a world dominated by fiat currency, the only thing that should matter to the owner is the number of ounces owned. If gold is being owned to protect against the destruction of the current monetary system, then debating its daily moments when priced under the current monetary regime is pointless. All that matters is how many ounces an investor owns. These ounces, kept as a store of value, would then either be converted into whatever new currency regime comes about, if the current one fails, or continue to be held as a store of value in those instances in which the owner simply doesn’t trust the new currency structure.
Last week we lost legendary Welsh player and manager Gary Speed to, still yet to be determined why, suicide. Yesterday we lost Dr. Socrates to a far more reasonable means of exit, death by alcohol abuse.
Socrates was the captain of the greatest soccer team that didn't win the World Cup, in 1982. While some may debate that, what is not debatable was that he was part of the most loved team in Brazil. That 1982 team was the most elegant practitioners of the beautiful game maybe in history. Socrates was their leader. Click here for a link to a fantastic tribute to that 1982 team.
He was known as Dr. Socrates because while playing he earned a medical degree and after his playing career was over became a doctor.
Obrigado Dr. Socrates, boa viagem.....
And this guy added 6 trillion by his lonesome in his first 3 years in office:
Zerohedge with the deets.
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
Read about the quite literal traitors of the Constitution here.
Those who swore to defend the Constitution are trying to destroy the Constitution, and we were always at war with Eurasia. If you don't see a post from me again, please send all mail correspondence to:
Negocios Loucos, care of O'Brien
U.S. Naval Station Guantanamo Bay, Cuba
PSC 1005, Box 25
APO AE 09593
The president sends a proposal to the Republicans and then offers the "pre-compromised" version before negotiations get out of the gate. He has yet to figure out that he is hated -- as in really hated -- because of what he symbolizes: the end of the WASP power structure as we know it.
Aside from religious stereotyping that is completely unacceptable unless it's targeted at people we don't like, apparently, he also provides a sixth grader's view of how to fix the economy. Of course when I write sixth grader I mean Keynesian. So how do we fix the economy?
1.) Borrow money. Despite the incredibly stupid complaints of people about federal spending, the bond market isn't worried about the US' fiscal situation right now. The 10-year bond is trading right around 2%.
2.) Rebuild the nation's infrastructure: According to the society of civil engineers, the US' infrastructure gets a grade of D-. I recently noted a story from AgWeb that also illustrates the problem.
3.) Hire people to do the work. Considering that half the un\employed are blue collar workers (people that do things like ... construction) this would lower unemployment -- which also happens to be a big problem right now.
4.) This increases aggregate demand, which increases GDP. Once you get GDP growing at 3%+ for a few quarters, the economy because self-sustaining. This also helps to halt the debt/GDP growth rate.
STIMULUS! OF COURSE! Why haven't we tried that yet? Oh, what, we did, and it totally doesn't work, and it actually got our debt rating downgraded because we can never pay our current debts let alone add on for more stimulus that won't work. We've already tried this and it failed? I would say the "incredibly stupid" thing is to argue for something that continually fails.
Business Insider provides the good with the bad. It's sort of like the People Magazine of the blogo-sphere while Zerohedge is the Economist. Hey I like it but there are a bunch of dolts working there.
Obama promised everything and delivered nothing except for the Marxist doctrine that he was so passionate about pre-elected career, but the MSM felt that wasn't relevant to comment on.
We have yet to see a bankster charged in the fraud cases that have cost the US taxpayer trillions; we have yet to see troops removed from Iraq and Afghanistan and have seen a new front opened up in Libya and another on coming in Syria (Dems love, love, love war when Dems wage war especially when it's a Nobel Peace Prize winner doin' the wagin'); and we have seen the opposite of a the most transparent administration ever. We have also seen continued bailouts, continued reductions in our Constitutional rights and megalomaniac like disregard for the majority's wishes and instead the transfer of Chicago mafia union politics to Washington DC.
And what would we have gotten if we had voted for that senile, geriatric, Hanoi Hilton pigeon Maobama was running against?
Termed the National Defense Authorization Act (NDAA) and drafted behind closed doors by Senators Carl Levin (D-Mich.) and John McCain (R-Ariz.) the NDAA would:
1) Explicitly authorize the federal government to indefinitely imprison without charge or trial American citizens and others picked up inside and outside the United States;
(2) Mandate military detention of some civilians who would otherwise be outside of military control, including civilians picked up within the United States itself; and
(3) Transfer to the Department of Defense core prosecutorial, investigative, law enforcement, penal, and custodial authority and responsibility now held by the Department of Justice.
That's all of course completely unconstitutional but we have become a fake democracy that doesn't adhere to any law of the land. It's communists on the left, fascists on the right, both with a mission to destroy liberty and the Constitution. They work together for that common goal and there is really only one party. We've woken up and our choice is tyranny. Khrushchev was right.
McCain finished by mentioning Paul simply had no idea the massive threat posed to the US by terrorists. "An individual, no matter who they are, if they pose a threat to the security of the United States of America, should not be allowed to continue that threat," McCain said. " We need to take every stop necessary to prevent that from happening, that’s for the safety and security of the men and women who are out there risking their lives....in our armed services."So according to a guy who might have been President, if the State deems you a threat you have no rights and you could be detained or even eliminated without any process. Wonder what McCain thinks of the movie Brazil?
Anyone who voted for McCain needs to reconsider why they are a Republican. This is terrifying.
A man apparently shot and killed his mother at their Gillies Street house before deliberately overdosing on drugs sometime over the holiday weekend, authorities said Sunday.
Police were called to the two-story, single-family home around 4:30 p.m. Saturday after a family friend reported finding the bodies inside, said Detective Sgt. Robert Bracken of the Clifton police.
Bracken identified the victims as Cheryl Regazzi, 53, and her son, Robert Regazzi, 20.[...]
Neighbors said they believed that Cheryl Regazzi was having financial problems, but they could not be specific.
A for-sale sign was posted outside the four-bedroom, colonial-style house on Sunday.Regazzi's next-door neighbor, Gloria Kirwin, said the house has been on the market since early this year. Trulia, a real estate website, says the house had been listed for 140 days, and real estate listings show the most recent asking price as $239,000.
Kirwin, 69, said Regazzi recently told her she could no longer afford the house.
"She was trying to sell the home but she had no luck," Kirwin said.
A public records search indicates that Cheryl Regazzi refinanced the mortgage on the house at least three times since 2003, with the mortgage amount rising from nearly $61,000 that year to $105,000 in 2008.
Real estate records show that Regazzi and her husband, Jacques, bought the house in 1992 for $110,000.
Patrick F. Allen, 44, accused of killing his wife, Kimberly, on Nov. 19, remained in the Monmouth County jail in Freehold Township Friday in lieu of $1.5 million bail with no options to post 10 percent to secure his release, as set by state Superior Court Judge Anthony J. Mellaci Jr.
“Patrick Allen killed his wife of 20 years during a financial dispute. He was the only person at home with her and he is the only person who could have killed her,” [prosecutor Marc] LeMieux said in court.
A check of financial records show that Patrick and Kimberly Allen held two mortgages totaling $625,000 on their home on West Front Street, and that Patrick Allen individually owed nearly $25,000 in credit card debt that was being levied against his property and a bank account following three court judgments handed down earlier this year.
Records held at the Monmouth County Clerk’s Office reveal the Allens financed $352,800 when they initially purchased the lot upon which they built a 3,184-square-foot home. They also show that by 2006, the Allens had refinanced the mortgage on the home three different times, taking out increasing amounts until the final $455,000 mortgage was obtained in 2006.
In addition to the mortgages, three additional home equity lines of credit were taken out during a six-year period beginning with a $45,000 secondary loan the Allens secured 18 months after the initial purchase, up to the outstanding $160,000 in the form of a 15-year second mortgage was obtained in 2005.
The two mortgages put the couple into debt totaling $615,000, but a source said the couple was also about $19,000 behind in their mortgage payments.
Greenspan's Body Count stands at 195.
I still like this diversified basket, and I am continuing to dollar-cost average into these asset classes. One exception is the bond fund I mentioned, Pimco Foreign Equity Unhedged (PFUIX). It has performed well, but I think it is time to dump it. The fund invests heavily in European debt and bond futures, and with Europe facing the choice between printing and default, neither is likely to be good for Euro bondholders.
"Have I a legal right to do this?" Roosevelt asked a group of senators in the Oval Office. He was talking about his plan to devalue the dollar. "Mr. President," replied Thomas Gore of Oklahoma, who opposed the idea, "you could go on the street right now, knock down an old man, drag him into the White House, and take his clothes. You could sell them second-hand. It would be just about as legal as what you are planning to do. But that doesn't matter. You can do it anyway." Roosevelt roared his approval, and, indeed, did it anyway.
- Supreme Power: Franklin Roosevelt vs. the Supreme Court
The good news is it doesn't mean much. The Supercommittee's goal was a farce anyway, cutting only $1.2 trillion over 10 years, or $120 billion a year, when we are currently running deficits over $1.2 trillion each and every year.
And the automatic cuts that will kick in when the Supercommittee fails? They are a joke, too. Conveniently for Obama's re-election, they don't kick in until 2013. And they are so annoying to the military-industrial and welfare-industrial complexes that a future Congress is sure to undo them. Both Obama's Defense Secretary Leon Panetta and Congressional Republicans are already freaking out over the defense cuts.
The allegedly Draconian Congressional Republicans have now achieved precisely zero spending cuts in three opportunities: the budget, the debt ceiling, and the Supercommittee. What exactly are Republicans good for?
Damn the credit rating; full speed spending ahead.
From Karl Denninger:
The first winter was disasterous - nearly half of the Pilgrims died of starvation, pneumonia and tuberculosis. Many claim that Bradford's first wife perished that first winter, but that is not quite true - she actually fell off the Mayflower quite close to land and drowned, never making it to Plymouth (he later remarried.)
During the first two years the colony lived under what could only be called Communism, enshrined in the Mayflower Compact. Each person was accorded a "share" of the totality of what was produced at the colony, and each person was expected to do their part in working toward the common good. The land, and that upon it, was owned by the colony as a collective.
It not only did not work out, it nearly killed them all.
William Bradford wrote in his diary "For in this instance, community of property (so far as it went) was found to breed much confusion and discontent, and retard much employment which would have been to the general benefit and comfort. For the young men who were most able and fit for service objected to being forced to spend their time and strength in working for other men’s wives and children, without any recompense. The strong man or the resourceful man had no more share of food, clothes, etc., than the weak man who was not able to do a quarter the other could. This was thought injustice.”
After the second winter, realizing that the colony had survived only through the friendship and largesse of the native Americans, and would soon perish if changes were not made, Bradford tore up the Mayflower Compact. He instead assigned each family a plot of land to be their property, to be worked as the family saw fit, and with the fruits of that land to be their own. It was the beginning of private property rights in the New World.
The result? Again, from his diary: "It made all hands very industrious, so that much more corn was planted than otherwise would have been by any means the Governor or any other could devise, and saved him a great deal of trouble, and gave far better satisfaction.”
From the very day that Bradford tore up the Mayflower Compact, Plymouth began to prosper. Within a year the colonists found themselves with more food than they could eat. Flush with a bountiful harvest far in excess of their need for food and having bartered for all the goods they needed to get through the winter, they had a feast of thanks with their Indian trading partners.
Don't hold your breath waiting for the leftist teachers unions to teach this lesson to your children. Better show them this video from Reason:
And as China starts to back away from holding our bad debt, the Dirty Fed has stepped in to print money and become the largest Treasury holder.
How convenient to be able to spend at will and not have to actually borrow money from real investors. This will surely end well.
Now, however, Bloomberg has changed the headline! Now it's "Fed Employees Serve Treasury in Assignments Deepening Crisis-Forged Ties." Here's a screen cap of the pre-censorship headline.
The Ministry of Truth must not allow the Fed-Treasury money-printing circle jerk to be exposed!
Former Freddie Mac officials familiar with the consulting work Gingrich was hired to perform for the company in 2006 tell a different story. They say the former House speaker was asked to build bridges to Capitol Hill Republicans and develop an argument on behalf of the company’s public-private structure that would resonate with conservatives seeking to dismantle it.
If Gingrich concluded that the company’s business model was at risk and that the housing market was a “bubble,” as he said during the debate, he didn’t share those concerns with Richard Syron, Freddie Mac’s chief executive officer at the time, a person familiar with the company’s internal discussions said.
Newt claims that they were paying him not for influence with Republicans, but for his opinion as a historian. Riiiiiiiiiight. How many third-rate professors who weren't politically connected did they cut $300,000 checks to?
It looks like it was an investment that paid off for the corrupt government-sponsored enterprise. The Republican-controlled House didn't pass GSE reform, and we all know how that worked out for the country. But hey, Newt had to pay for that half-million debt to Tiffany's somehow, right?
They're all whores, with the apparent exceptions of Ron Paul and Gary Johnson.
The State Department said Thursday it would postpone until after the 2012 election a decision on an oil pipeline that had raised a furor among environmental groups, a delay that angered the oil industry and unions that have pushed for the project.
The department, in a statement, said it would examine alternate routes for TransCanada Corp.'s Keystone XL pipeline to avoid an environmentally sensitive portion of Nebraska.
That would require an assessment of the new route's environmental impact, which "could be completed as early as the first quarter of 2013," the department said.
The delay is a temporary victory for environmental groups, which have pressed the administration to deny the request by TransCanada to construct a pipeline from Alberta to Texas.
The oil and gas industry as well as unions have urged the administration to approve the project this year, arguing that it will create thousands of jobs and reduce U.S. dependence on oil imports from the Middle East. The government of Canada also supports the project.
"The president is putting politics ahead of American jobs," said a spokeswoman for the American Petroleum Institute. "The project has been under review for three years. This delay would be another year and a half. I don't know what would happen after that."
The very moderate and non-partisan UCSD economist James Hamilton discusses the economic importance of the pipeline here.
Sandusky, who retired from coaching in 1999 after 32 years on Paterno's staff, was arrested Saturday on 40 charges that include felony sex crimes against children. Penn State athletic director Tim Curley and university vice president Gary Schultz have been charged with felony perjury in their grand jury testimony in the case, as well as failure to report to law enforcement what they knew about Sandusky's behavior.His book:
If you too have been touched by Jerry Sandusky, you are asked to contact the Pennsylvania Attorney General's office located at this fantastic URL (way to be first in line): http://www.attorneygeneral.gov/
Where it states:
...from the messy business of prosecuting its pedophiles. Well until now.
Apparently the Happy Valley branch of NAMBLA is lending support to Joe Paterno.
To be fair, he was only notified that his ex-assistant coach was showering with a 10 year old boy (which would have been enough for me to dial 911) and having sexual contact with the boy. He told his boss and therefore his conscience is good. Because remember folks, in Pennsylvania, if a grown man rapes a boy, the legal thing to do is tell your boss...WTF???
To fix the banking sector, should we rely more on government regulation and oversight or let the market figure it out? Tougher rules or more capitalism? Right now, we have the worst of both worlds. We have a purportedly capitalistic system with a lot of rules that are not strictly enforced, and when things go wrong, the government steps in to protect banks from the market consequences of their own worst decisions. To me, that's not capitalism.
It's easy to understand the appeal of certain regulation. If we'd had the right oversight in place, we would have limited the degree of the financial crisis, which included bailouts measured in hundreds of billions of dollars and millions of people losing their homes due to foreclosures. But we also would have sacrificed innovations in credit and a vibrant financial sector.
Moreover, the real problem with regulation is that it often doesn't work very well, in part because it's always considering problems in the rearview mirror. The financial system today is almost dizzyingly complex and moving at light speed, and new rules tend to address fairly precise things, like banning specific types of securities or deals.
The more effective solution would come from letting market forces work. That doesn't mean no rules at all—a banking system like the Wild West, with blood on the floor and consumers being routinely swindled. We need a cultural, perhaps generational, change that compels companies to better apply accounting rules based on economic substance versus surface presentation.
Even in 2011, some banks were woefully deficient in detailing the amount of their securities and loans that are vulnerable to the ravages of the European financial crisis. The solution is to increase transparency and let outsiders see what's really going on.
What we need is a better version of capitalism. That version starts with accounting: Let banks operate with a lot of latitude, but make sure outsiders can see the numbers (the real numbers). It also includes bankruptcy: Let those who stand to gain from the risks they take—lenders, borrowers and bank executives—also remain accountable for mistakes. As for regulation, the U.S. may want to look to London for ideas. In the last decade, the U.K. equivalent of the Securities Exchange Commission (called the Financial Services Authority) fired much of its staff and hired back higher-caliber talent, at higher salaries. This reduced the motivation for regulators to jump to more lucrative private sector jobs and improved the understanding between banks and regulators.
A better version of capitalism also means a reduction in the clout of big banks. All of the third-party entities that oversee them need sufficient latitude to serve as a true check and balance. My peer group, the army of 5,000 sell-side Wall Street analysts, can help lead the way to provide scrutiny over the markets. Doing this involves a culture change to ensure that analysts can act with sufficient intellectual curiosity and independence to critically analyze public companies that control so much of our economy.
That's about right: no more Too Big To Fail and no more mark-to-fantasy and off-balance-sheet accounting fraud. Too bad the Dodd-Frank fake financial reform bill did exactly zero to address either of these issues.
In the US, he says, capital has always been allocated where it could achieve the highest return [until Obama: Government Motors, AIG, Fannie/Freddie, Solyndra... -ed.]. In the 19th century, when America was the economic upstart on the block, it was also on the gold standard. Which is very important, according to Hendry, because it allotted entrepreneurs one – and only one – chance to succeed. It was not a time of bailouts and multiple bankruptcies!
China is different, he believes, because it is industrializing with a fiat currency. Thus they fall into the trap of misallocating capital – building bridges to nowhere, towers for nobody, and so on. China’s goal is similar to that of 1980’s Japan in his opinion – full employment, rather than maximizing return on capital. A critical, and even fatal, difference, in his mind.
You know the old drill – China and Asia produce, the US consumes. They cycle their greenbacks back over this way, finance our debt, we buy more of their stuff, and the beat goes on.
This model officially stopped with the launch of QE2, Hendry says, as the US officially started rejecting the globalization that had made the global economy hum (perhaps largely at the expense of US employment and manufacturing). With QE2, dollars were printed and exported – along with inflation – to Asia.
Because wage labor is approximately 70% of total business costs, he does not see meaningful inflation without wage inflation.
He’s also down on gold because it is not a contrarian investment today as it was 10 years ago (he had a nice year in 2003 buying gold and gold stocks when nobody wanted them).
The widespread belief among the greatest financial minds today that hyperinflation is inevitable greatly disturbs him.
In the Western world, he sees hyperinflation as a political choice – one that requires the will of the populous. (Forget Zimbabwe, he says – that might as well be Timbuktu. It’s not our culture.)
He sees society’s current mood as “dark” (Tea Party, Occupy Wall Street, and social unrest in Europe to name a few), and believes this makes bailouts and money printing very hard. The only environment that makes hyperinflation possible is “the mother of all depressions” he says.
All of which is possible, I suppose, but "hyperinflation" is a straw man. I'm not calling for hyperinflation, just inevitable eventual debasement of the dollar. This could take the form of 70's style stagflation, or Argentinian-style step devaluation, or slow and steady erosion of the dollar just like the Federal Reserve has done the last 100 years. The "political choice" is not hyperinflation, but inflation vs. depression. Even the Tea Party electoral tsunami and debt-ceiling posturing didn't make a dent in federal spending or the deficit. What makes Hendry think austerity will become politically popular now?
Two problems with Hugh's view:
1) If we do get his crash, how on earth does Ben Bernanke (or even a more sober successor) not print money in response? (Similarly, does he really think Europe will choose default and banking system collapse rather than printing?)
2) The U.S. Federal Government is currently running deficits of 9% - 10% of GDP, and in a depression scenario this would get even worse as revenues declined and social welfare costs increased. Running double-digit percent of GDP deficits is not consistent with a strong dollar or deflation.
So what we have is an education challenge. The more the public learns how fiat currency has enabled both government and Wall Street to run amok, the more they'll support a return to the gold standard. These pages are a good starting point. Tell a friend.
Superpollster Scott Rasmussen has pulled the pin and rolled one of his patented hand grenades under the chair of the Political Class. Rasmussen’s “October Surprise” is contained in a recent poll showing 44% of likely voters favor returning to the gold standard, 28% opposed. That intensifies. If the public knew that it would “dramatically reduce the powers of bankers and the political class to steer the economy” support goes up to 57%. Opposition drops to 19%.[...]
The only solid majority opposition comes, unsurprisingly, from self-described members of the political class. If anybody picks up on this dynamic it could prove decisive in what remains a remarkably fluid field with early contests fast approaching.
Now, The Economist discusses:
What are the potential implications of a world in which many large economies are weighing the benefits of competitive devaluation?
The first point to make is that Japan is not particularly good at this game. Large, one-off interventions against a backdrop of sustained deflation are unlikely to be effective; markets know the yen will be going back up again in no time. Second, a real intervention would be very good for Japan. Consumer prices are falling in Japan, as they tend to. Were the Bank of Japan to make a concerted effort to print yen and sell them for other things—dollars, say—then deflation might finally be vanquished and the economy might stumble into sustained growth for a change.
Third, that kind of intervention would have a direct, negative impact on other economies, whose currencies would appreciate relative to the yen. This negative impact could easily be offset, however, if those economies were to respond by printing their currencies and using them to buy yen. No one would get an exchange rate advantage, but broad monetary easing would lead to reflation, a higher level of aggregate demand, and better conditions in depressed economies. If everyone plays along, the net effect is of a coordinated monetary stimulus. Fourth, however, if other central banks are reluctant to play along, then elected governments may respond to pressure from foreign exporters by adopting trade restrictions. This was the common response among gold bloc countries to devaluations by other economies.
In sum, a crummy economic situation will encourage economies to pursue competitive devaluation. This action needn't be globally harmful and it could kick off a beneficial series of imitative efforts, approximating coordinated stimulus. There is a risk, however, that it will lead to a troubling unravelling of liberal trade regimes. It would therefore seem to be a good idea to skip right to the coordinated stimulus, which would reduce the pressure for risky economic policies in the first place.
And in the wake of The Economist's post, today the Australian central bank, custodian of one of the world's recently relatively sound currencies, takes a first step toward easing by cutting interest rates.
Shall we play a game?
Love to. Let's play Global Competitive Devaluation.
Wouldn't you prefer a nice game of chess?
Later. Let's play Global Competitive Devaluation.
I'm so tired of hearing you whine
About the revolution
Bringin' down the rich
When was the last time you dug a ditch, baby!
You're just a middle class, socialist brat
From a suburban family and you never really had to work
And you tell me that we've got to get back
To the struggling masses (whoever they are)
You talk, talk, talk about suffering and pain
Your mouth is bigger than your entire brain
What the hell do you know about suffering and pain . . .
The movie is strange. It starts off with pink script credits reminiscent of Miami Vice or 80's John Hughes teen movies. And the soundtrack, though original, is heavily influenced by 80's music.
After an opening heist and getaway scene sets the hook, the film turns to a character drama replete with love interest, cute kid, flawed but loving mentor, etc. And then Ryan Gosling does the worst James Dean act I've ever seen. He stands around, wearing a denim jacket, leaning against doorways, and not talking. Except he doesn't look cool and disaffected as James Dean did. He looks retarded. I thought this might be Gilbert Grape 2: The Driver Years.
The theme song from the movie is "A Real Hero" by "College featuring Electric Youth," though I'm not sure whether College is the chick singer and Electric Youth is the synthesizer or vice versa. The lyrics were so clunky that I initially thought they were a tribute to the retard Gosling, but alas, they appear just a contorted way to arrive at the line "Real human being, and a real hero..." as a chorus which sounds really cool the way the chick with the great voice sings it to Top Gun music.
All of which is a really bizarre way to lead up to the main point of this review: you have got to go see this movie. It is amazing. It is a real genre-bender. The bad acting fades away and the weird music becomes compelling. The film is a good human drama and a good action movie (one middle-aged couple left mid-film because of some Tarantino-ish ultraviolence), and the combination of the two is incredible.
I can't begin to do justice to this movie, so let me leave you with this song which I initially found so cheesy and now can't stop listening to.
Body Count goes to Vegas! Ernest Scherer III was a Vegas loser who fancied himself a professional poker player. Doesn't that photo t...
UPDATE: Edited to remove the guy's name. I hope nobody harasses him or his employer. He was good-natured and his sign was innocuous a...
Anybody else think horse paste might be worth a try?