Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Friday, December 03, 2010

The Five Graphs of Doom

Runner-up Headline: The Genius of Obamanomics: If You Incent People to Stay Unemployed, They Stay Unemployed


Gee, these are such stellar results, how about we extend unemployment benefits to, say, 200 weeks? Or maybe... 20 years to life?

Unemployment Rises to 9.8%


"Private payrolls +50K on expectations of +160K! Retail Manufacturing payrolls plunge 13K on expectations of +5K. Previous revised down to -7K. As Zero Hedge expected the ADP was totally and completely off. And so the myth of the recovery can suck it"

Record Foodstamp Usage


"For those seeking a perfect explanation of what is happening in United Banana States of America right now, then look no further: the just released September Supplemental Nutrition Assistance program data is out and we are happy to report that the number of poor Americans has never been higher - SNAP recipients just hit a fresh all time high of 42.9 million. Naturally, the market celebrates the record number of poor Americans by closing at 2010 highs."

Biggest Non-Farm Payroll Miss In Over Two Years


"Today's actual [Non-Farm Payroll] NFP result, which was at 111,000 jobs below the economist estimate of 150,000, was the worst miss in over two and a half years."

Money-Printing 101, 202, and 303


"So now that two years of QE (in their 1, Lite and 2 iterations) are in the history [books], we finally can run some correlation analyses to see just what asset class the Fed had been targeting all along. The attached chart presents the very simple result... The [accompanying] chart ... shows total Fed holdings of USTs and of the [S&P 500]... Now here's a thought: the Fed has another $800 billion in UST purchasing dry powder left under QE2 alone... ...Of course the chart above excludes the price of gold in US currency, which confirms that on a real basis, the value of the black line has declined over the same period as it has gotten progressively more diluted with pieces of linen courtesy of the red line."

And the Winner Is... Gold


As Ben Bernanke's magic printing press continues to churn out paper buckos backed by nothing less than the full faith and credit of hope'n'change, gold (and silver, for that matter) continues to ratchet ever higher.


Update: "We've never had a longer stretch of 9%-plus unemployment since... World... War... II." -- Gerri Willis, describing 19 straight months of devastating unemployment thanks to Obamanomics.

Thursday, December 02, 2010

Does this deficit make my butt look big?

This is weird.

Been driving for 25 miles and this big ol' truck's been following me the whole way.

Creepy.

Whoa. He's been getting closer and closer...

Damn! What the...

S***! He's gettin' right up on my bumper!

Alright, that's it. I'm pulling over. What the heck is going on here?

A frickin' Brinks truck?

What the hell? He's getting out of the armored car... walking up here...

Officer - is there some sort of a problem?

Sir, I couldn't help but notice the Obama sticker on the back of your car.

Yeah? So what? Did I do something wrong?

No, sir. But could you look in your rear-view mirror once more?

What the hell? What are those two eyeballs doing on your armored car?

Those, sir? That's the $480,000 your family could have saved by voting Republican over the last eighty years.

Bags Fly Free

Someone's got some mad Photoshop skillz.

Photoshop has a website that conducts weekly contests on a theme that they select. This week the theme was to build a picture that says "Goodbye to Nancy Pelosi". The winning entry follows for you to share with friends:

Since Nancy Pelosi is no longer Speaker of the House, she must give up her private jet. She'll be flying Southwest from now on because "Bags fly free"!

Won't you please help Nancy buy a Gulfstream 6?


Hat tip: Papa B.

Wednesday, December 01, 2010

Photo of the Day: And they impugn Sarah Palin's intelligence?

Matthew J. O'Connor, writing at the Clarion Advisory, describes the real effects of the federal pay freeze announced Monday by President Obama.

First, there are about 2.1 million federal jobs now, and in 2009 only 177 of those received “unsatisfactory” job performance ratings—150 of those received pay increases anyway. Facetiously speaking, such competency.

Second, the average federal employee receives 30%-40% more in total compensation than the average private sector employee. Facetiously speaking, their production and results demonstrate they are worth every penny.

Third, since President Obama took office 141,000 new federal jobs have been added, and during the first 18 months of the recession federal pay rose 6.6%.

Fourth, the “freeze” is only for two years and then only affects cost of living (COLA), not bonuses or movement within the General Services (GS) pay schedule.

[Now remember] what the President said about Health Care Reform a few months ago: “No matter how we reform health care, we will keep this promise to the American people. If you like your doctor, you will be able to keep your doctor..."

I will leave it to the Obama lemmings to swallow his recent federal pay freeze deficit control hoax and dive off the edge of the turnip wagon, like they seem to do with almost anything Obama says-off his teleprompter.

And the legacy media endlessly reminds us that Sarah Palin is dumb and Barack Obama is some kind of genius. Okay.

Forget the birth certificate -- where are the college transcripts?


World's Dumbest Blogger's Latest Brainstorm -- Let's Print More Money and Hand It Out to the Poor So We Can Save the Economy

When it comes to the pinnacle of dimwitted commentary, the crack journalist named Matthew Yglesias is the undisputed champ*. His latest brainstorm is a doozy as it involves printing lots and lots of money, Weimar Republic-style, which he believes will -- yes, he actually says it -- stimulate the economy.

The trouble in Europe seems to be getting worse, with debt fears spreading somewhat beyond even Spain to Belgium and Italy.

This is something people need to keep in mind when they think about QE2 and the fact that the real problem with current monetary policy is that it’s not loose enough. One thing you’re seeing as all this plays out in Europe is that the Euro is declining in value relative to the dollar. The dollar could go up for two kinds of reasons. One would be that foreigners are increasing their demand for US-made goods and services. They could be saying “I don’t want these Italian financial assets, I’m going to go buy a Boeing jet.” But obviously that’s not what’s happening here. Instead people are concerned about the increasingly rickety-looking European monetary system and want to get their hands on dollars as such.

The right response to this is for the Fed to be doing monetary stimulus—printing more money. This can take a number of forms. Buying longer-dated Treasuries seems to be what the FOMC is most comfortable with, but in a lot of ways I think it would be better to just create the money and send it to people...

...There are some questions about exactly how you would organize such a “helicopter drop” but I’m confident it could be worked out. And working those problems out would, among other things, have the advantage of improving the politics of monetary stimulus. Cut the banks out of the transmission mechanism and illustrate the fact that the point is to increase the amount of money that people have.

Terrifying: this is actually considered informed commentary among the Democrat intelligentsia (oxymoron alert).

And they say Sarah Palin is dumb? But I digress.

The club of numbskulls masquerading as Democrat commentators would do well to read Gonzola Lira's Hyperinflation, Part II: What It Will Look Like, authored by a man who lived through the Chile's money-printing nightmare.

During the period 1970–’73, Chile experienced hyperinflation, brought about by the failed and corrupt policies of Salvador Allende and his Popular Unity Government... In 1970, Salvador Allende was elected president by roughly a third of the population. The other two-thirds voted for the centrist Christian Democrat candidate, or for the center-right candidate in roughly equal measure. Allende’s election was a fluke.

He wasn’t a centrist, no matter what the current hagiography might claim: Allende was a hard-core Socialist... Land was expropriated—often by force—and given to the workers. Companies and mines were also nationalized, and also given to the workers. Of course, the farms, companies and mines which were stripped from their owners weren’t inefficient or ineptly run—on the contrary, Allende and his Unidad Popular thugs stole farms, companies and mines from precisely the “blood-thirsty Capitalists” who best treated their workers, and who were the most fair towards them.

...One of the key policy initiative Allende carried out was wage and price controls. In order to appease and co-opt the workers, Allende’s regime simultaneously froze prices of basic goods and services, and augmented wages by decree.

At first, this measure worked like a charm: Workers had more money, but goods and services still had the same old low prices. So workers were happy with Allende: They went on a shopping spree—and rapidly emptied stores and warehouses of consumer goods and basic products. Allende and the UP Government then claimed it was right-wing, anti-Revolutionary “acaparadores”—hoarders—who were keeping consumer goods from the workers. Right.

Meanwhile, private companies—forced to raise worker wages while maintaining their same price structures—quickly went bankrupt: So then, of course, they were taken over by the Allende government, “in the name of the people”. Key industries were put on the State dole, as it were, and made to continue their operations at a loss, so as to satisfy internal demand. If there was a cash shortfall, the Allende government would simply print more escudos and give them to the now State-controlled companies, which would then pay the workers.

This is how hyperinflation started in Chile. Workers had plenty of cash in hand—but it was useless, because there were no goods to buy...

Read the whole thing.

And please -- please -- don't ruminate on the fact that President Obama appears to see himself as an Allende-like figure. It's terrifying enough to know that the World's Dumbest Blogger™ actually has mucho credibility among influential Democrats.


* This is not meant in any way to impugn the dimwit pothead known as Andrew Sullivan who recently took time away from investigating Sarah Palin's vulva to use the novel word "dickishness" in his latest Pulitzer Prize-winning blog post. This year Sullivan is running a close second to Yglesias in TIQ (total ignorance quotient) but has yet to beat the master. And no, that wasn't a double entendre. At least, not an intentional one.

Tres Awesome: Did GM Pull Off Its IPO By Stuffing the Dealer Channel With Inventory -- at Taxpayer Expense?

If you were a scam artist, can you think of anything better than pulling off a multi-billion dollar con using the imprimatur of the federal government? Let's not mince words: the folks running GM may be a unique breed of crony capitalist -- perhaps more crooked than capitalist.

Hidden deep in today's disappointing GM November sales release is a number that all GM longs may want to quickly forget... [check out] the linear rise in GM's auto inventory safely stashed away at dealers, i.e., unsold. The chart below demonstrates what some may argue is nothing less than a blatant case of channel stuffing. Is it really surprising that GM will resort to such pathetic schemes to boost its top line numbers?

...Of course not: the government's GDP report demonstrates that this is occurring everywhere in the US economy, courtesy of near record inventory accumulation which two years after the start of the depression refuses to let up...

It is obvious that beginning in July, GM has started an aggressive channel stuffing program whereby it offload[ed] tens of thousands of cars (over 110,000 since July) on dealer lots, hoping these will get sold somehow, at some price, all the while dealers enjoy taxpayer subsidized floorplan leases which allows them to hold nearly infinite inventory. If and when the liquidation event takes place who cares? After all the company is now public and has managed to massage it artificial sales numbers sufficiently to fool investors that there is actual end demand for its cars.

So what would have happened if in October GM had held its dealer inventory flat (not declining, just flat): well, the top line number would have been 21,000 cars less sold. Which also means that total sales would have been not 169k but 148k, and instead of a 11.4% increase, GM would have reported a drop of 2.4% in November sales YoY [year-over-year], which would have made the life of GM DMM GETCO that more unbearable as the High Frequency Trader would soon end up with 100% of the stock float at $33.

...Bottom line - if indeed GM is right, and manages to sell hundreds of thousands of cars in December, we will take back everything we said above. On the other hand if the number remains flat, or, heaven forbid, increases, it will be more than obvious that GM is now involved in nothing less than the most transparent channel stuffing scheme we have seen in years.

Gee, I wonder which it is?

You know, these union payoffs by the Democrats keep getting better and better with age, kinda like a fine wine.


Tuesday, November 30, 2010

HHS Head Sebelius: We'll Protect Americans' Sensitive Health Information With the Same Level of Security The State Department Uses

Secretary of Health and Human Services Kathleen Sebelius visited the campus of Kansas State University yesterday to deliver a staunch defense of ObamaCare.

"Health is really about freedom, [Ed: which is why we intend to make all decisions for you] when we live longer, healthier lives, we've got time to do our jobs, time to volunteer in our neighborhoods [Ed: there they are with the community organizing again] and play with our children, to watch our grandchildren grow up [Ed: each of them owing hundreds of thousands of dollars thanks to the vast unconstitutional bureaucracies we created]," Sebelius said. "When the health of the nation improves we see the benefits each and every day of our lives."

...As well as the defense of the insurance portion of the Affordable Care Act, Sebelius also emphasized six lesser-known health issues that HHS is seeking to improve. They ranged from making medical records electronic and preventing infections in hospitals, to funding efforts to fight obesity and cancer...

... Chris Connell, senior in animal science business, said his favorite point was when Sebelius talked about how hospitals should adopt electronic medical records... Sebelius emphasized how electronic records could help prevent accidents where people with medical problems are given the wrong medication or treatment because doctors would have easy access to the patient's medical history...

...To wrap up..., Sebelius briefly discussed food safety in the United States [Ed: which is why the FDA has to regulate every aspect of food production and distribution]. She said changes needed to be made to the system, but instead of mentioning specific initiatives, she talked about the economic impact that food related disease outbreaks had on farmers.

I don't need to tell you, dear reader, that with geniuses like Kathleen Sebelius and Barack Obama in charge, there's little chance anything can go wrong.


"We have to pass the kidney stone to see what's in it"

Doesn't this headline say it all?

Perhaps you have to be familiar with New York politics to understand how truly bizarre this story is: 1199 is dropping its health care coverage for children.  1199 is the extraordinarily powerful local health care workers' union which has pushed New York State's Medicaid reimbursements into the stratosphere.  The state not only has much higher than average Medicaid enrollment, but also spends more per-enrollee than any state but Alaska.  Every time a governor tries to cut into, say, the funds for home health care workers, the union runs tear jerking ads which imply that the governor is trying to end health care for everyone in the state.

Nturally, 1199--and its national parent--were a powerful force advocating for a national health care program.  An article on their website from June speaks approvingly of PPACA as a "first step", though also complains that it didn't go far enough in creating a public option.

That article also says that "1199ers in the major health funds such as the 1199SEIU National Benefit Fund (NBF) should see little or no change in their coverage."  Just a few months later, the Journal is reporting that the SEIU is dropping its coverage for children, citing, among other things, the impact of the new healthcare law...

Ironical, no?

O/T: If it weren't for Megan McArdle, I'm not sure most Americans would even know The Atlantic was still in business.


What do you get when you put a former ACORN community agitator, who never held a job, in charge of the world's largest economy?

Pretend it's a hypothetical question, so you won't grow even more depressed.

Nothing too fancy or hard to understand here... from the Just-released Case-Shiller index, it's clear that the housing double dip is here.

The chart (below) depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 1.5% decline in the third quarter of 2010 over the third quarter of 2009...

One question remains: how will Pelosi, Reid and Obama blame Bush for the continued destruction of the private sector?

Or, in the case of the whack-job lefty bloggers, how will they blame Dick Cheney?


Hat tip: Dennis.

Monday, November 29, 2010

O-conomy: Sounding the Inflation Alarm

It's the debt, stupid.

...QE2 looks like "Fed speak" for monetizing the nation's growing debt — printing new money to finance deficit spending... [But] Chairman Bernanke... downplays evidence that 12 months of a 1% Federal funds rate in 2003-2004 contributed to the housing bubble and subsequent collapse. Now, after maintaining a 0% Federal funds rate for nearly two years, he shows no inclination to raise short-term interest rates...

...Mr. Bernanke speaks of the threat of deflation, but gives little heed to signals from commodity and currency prices, which are reliable indicators of inflation... It is not just oil prices approaching $90 a barrel and new highs in precious metals that are clear warning signs of a new inflating bubble... It is also a broad basket of commodities that includes copper, rubber, wheat, oats, pork, coffee, sugar and cotton — all of which are up over 50% in the past 12 months — that is sounding the inflation alarm...

But the more serious consequences from the Fed's pursuit of debt monetization and currency printing, the essence of QE2, is moving the country ever closer to an insolvency crisis — one that could destroy the dollar and bring global financial chaos.

...When investors conclude that inflation and devaluation make holding U.S. Treasury debt unattractive, they will demand higher offsetting coupon rates... At the present time, the blended cost of the publicly held U.S. debt (some $9.14 trillion) is less than 2.5% annually, the lowest in over 50 years.

...[But] a crisis in confidence — triggered by either a failed U.S. Treasury auction or the weight of the Fed balance sheet having grown too large for orderly liquidation except at fire sale prices — would cause an immediate spike up in bond yields and interest rates.

The cost of servicing the U.S. Government's debt service would increase many fold, setting in motion a downward spiraling liquidity crisis ending with the U.S Government unable to finance its obligations.

And when it all unfolds, the likes of Obama, Pelosi and Reid -- the architects of "progressive" change -- will be long gone, leaving our children to pick up the pieces.


Original Images: Library of Congress Flickr Feed: 1930s Color Photographs.

Sunday, November 28, 2010

Super: Star-Ledger Columnist Now Holding Contests Asking Readers to Predict the Date of Chris Christie's Next Policy Shift

New Jersey Governor Chris Christie spoke at the Republican Governors Conference [RGC] ten days ago and reportedly brought down the house. He told the audience that sometimes leaders simply have to ignore their advisers and face the tough issues head on.

The New Jersey Star Ledger's Paul Mulshine has followed the career of Chris Christie for nearly two years. And he doesn't quite recognize the current version.

[The RGC] Chris Christie sounds like a heck of guy — not at all like the Chris Christie I have been following closely for almost two years... [For example, after] a number of legislators held a press conference in the Statehouse to announce they were... protesting the new screening policies of the [TSA, Christie] declined an offer to back the resolution because, his spokesman said, it was a federal issue...

...Just for fun, I put up a post on my blog asking readers to predict how long it would take before Christie came out against the TSA. If you bet on last Monday, you would have won. In response to a question from a kid at one of those town-hall meetings he holds, Christie announced the screenings were "too invasive."

That’s just one instance in a pattern obvious to those of us who’ve been covering Christie since he entered state politics. Name an issue — from judicial activism to the Highlands Act — and you will see Christie tiptoeing up to it and finally committing when the consensus is clear.

On issues such as guns and abortion, Christie’s views have moved rightward over the years, in remarkable harmony with the rightward drift of the GOP primary electorate... His position in favor of New Jersey’s participation in the cap-and-trade program, known as the Regional Greenhouse Gas Initiative, for example, would be a non-starter with Republican primary voters. Sure enough, he recently made an incremental move away from that when he told a participant in another town hall that he is becoming skeptical about man-made global warming.

Some took that as a sign that he’s serious about running for president. If so, he’ll have to start inching away from other positions associated with RINOs, or "Republicans In Name Only," such as his mushy stands on gun rights and immigration amnesty.

Christie's oft-changing positions are the antithesis of the Tea Party's immutable principles.

Global warming.

Gun control.

• Amnesty for illegal aliens.

Mike Castle.

And those are but a few of Christie's amorphous policy positions.

Some great YouTube sound-bites have immortalized Christie's fight against the public sector unions. And there is much to appreciate in his stand.

But it is clear that the Governor has substantial work ahead of him. After all, Constitutional conservatives rightfully fear the nomination of another "Maverick", the positions of whom are rooted only in political expediency.


Krugman's Chickens Come Home to Roost: Imminent Euro Meltdown Begs the Question--When Will Debt Contagion Infect the U.S.?

The laboratory experiment known as Keynesian economics is set to complete in the Eurozone over the next few months. The European Central Bank's infinite borrow-and-spend policies, backstopped by heaven knows what, appears to be the same game-plan advocated by the likes of Paul Krugman here in the states.

And it is all set to topple like a house of cards during an earthquake.

This weekend offered no respite for the European central bankers, who have moved from country to country trying to reassure investors that banks are healthy even though they own billions in badly wounded bonds. The EU and the IMF shored up Greece in the spring with €10 billion and have arranged a set of bailouts for Ireland that will total around €85 billion more. But dominoes Portugal and Spain are now tilting over concerns that they, too, will be unable to service the massive debts they've incurred over the last two decades.

The three-year tab for all of the Eurozone rescues was earlier set at €440 billion; there are now plans to double it before the European banks that own the toxic debt are themselves crushed.

Even Germany Threatened: 'You cannot find a bank safe deposit box'

Even the most financially secure EU state -- Germany -- is trembling. The ongoing crisis "on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union."

Credit default swaps (CDS) measuring risk on German, French and Dutch bonds have surged over recent days, rising significantly above the levels of non-EMU states in Scandinavia.

"Germany cannot keep paying for bail-outs without going bankrupt itself," said Professor Wilhelm Hankel, of Frankfurt University. "This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings."

The critical question remains unanswered. At what point does Germany refuse to bail out the more irresponsible members of the EU. That question is going to the German Constitutional Court early next year as many citizens have objected to the legality of the Greek bailout and other backstopping efforts.

No Certain Thing: 'time the Irish became more militant'

While Eurozone officials would like to portray Ireland's bailout as a fait accompli, the 100,000 protesters in the streets of Dublin yesterday tell another story. The turnout was gargantuan given the snow and freezing temperatures the marchers had to endure. Most protesters are unionists and socialists objecting to the four-year austerity plan announced by the government.

Among the marchers there is deep anger that most of the more than €80bn (£67bn) from the EU and the International Monetary Fund will be given to shore up Ireland's ailing banks.

Marching in the rally was Irish builder Mick Wallace who has had to lay off 100 workers due to the crash in the construction industry. Wallace said it was time the Irish became more militant.

If there's a pattern of civil unrest to be detected throughout Europe, it hinges on the malevolent collaboration between public sector unions and socialists. Their mission, it would appear, is to overthrow any vestige of capitalism in Europe.

'Day of Reckoning' Nears With Talk of Restructuring

The borrowing costs for the most exposed European states are at record highs. The average yield for 10-year bonds issued by Portugal, Ireland, Italy, Greece and Spain hit a Euro-era record of 7.57 percent on Friday.

The spread of PIIGS debt compared to German issues also hit a new high of 492 basis points (or nearly 5%). And the cost to insure the five countries' bonds also hit a record of 517 basis points.

“It’s no longer taboo to speak about a restructuring,” said Johannes Jooste, a portfolio strategist at Bank of America Corp.’s Merrill Lynch Global Wealth Management in London, which oversees about $1.4 trillion for clients. “The fact that bond yields continue to rise and put pressure on countries that have to fund from the market makes investors less and less confident, and it’s bringing forward the day of reckoning.”

Bondholders of European banks are being urged to accept "huge haircuts" because the nature and amount of the debt owned by those institutions is simply so huge it can never be repaid.

Downgrades

Irish banks were hit with another downgrade by rating agencies on Friday and many bank bondholders have already taken horrible losses of 80 to 90 percent.

[Prime Minister] Cowen is unveiling an emergency budget Dec. 7 that seeks to cut euro6 billion ($8 billion) from Ireland's 2011 deficit. He and European officials say that budget must be passed to clear the way for the EU-IMF bailout loan for Ireland.

Ireland's 2010 deficit is running at 32 percent of GDP, the highest in Europe since World War II. The country's severe financial problems are rooted in its enormous bailout of Irish banks who gorged themselves on overpriced real estate.

Meanwhile Portugal, reportedly next weakest of the peripheral Eurozone countries, has denied that it needs a bailout. Economists, however, point to increased risk premiums for Portuguese debt and a survey of experts found most agreeing that a bailout is imminent due to "spiraling debt costs".

Spain, which appears to be next on the endangered list, has a two-fold plan to build a "firewall" against further contagion. It has announced massive budget cuts and is simultaneously trying to find local buyers for its debt.

“The big elephant in the room is Spain, which is too big to fail and too big to be bailed out,” Nouriel Roubini, the New York University professor who predicted the global financial crisis, said in an interview Nov. 23. “In some sense though, Spain is in a better place.”

Asked whether its size would deter an EU bailout, Bank of Spain chief economist Jose Luis Malo de Molina said late yesterday that “the systemic importance” of a country like Spain “reinforces the incentives and stimuli for the rest of the countries to be ready to help in the case that it were necessary.” He said market tensions can become a “self- fulfilling prophecy.”

In other words, remain calm. Don't panic.

'Urgent Action' Needed in the U.S.

With debt contagion washing over Europe, there is little doubt what the impact will be for the U.S.

The US needs to take urgent action to cut its debt in order to prevent the next financial crisis, which may start in Washington, Sheila Bair, chair of the Federal Deposits Insurance Corp. (FDIC) wrote in an editorial in the Washington Post...

The federal debt has doubled over the past seven years, to almost $14 trillion, and the growth is a result of both the financial crisis and the government's "unwillingness over many years to make the hard choices necessary to rein in our long-term structural deficit," Bair wrote...

The tidal wave of baby boomers headed into retirement represents a double whammy for the federal deficit. Bair noted that this year's spending on the big three entitlements (Social Security, Medicare and Medicaid) represents 45 percent of federal spending -- but that it was 27 percent in 1975.

"Eventually, this relentless federal borrowing will directly threaten our financial stability by undermining the confidence that investors have in U.S. government obligations," Bair said.

"With more than 70 percent of US Treasury obligations held by private investors scheduled to mature in the next five years, an erosion of investor confidence would lead to sharp increases in government and private borrowing costs," she added.

The policy prescription of Krugman and the Eurozone is simple:

"Borrow more money to pay off borrowed money."

The problem is, someday the ability to borrow money runs out.

And that's the day that the Ponzi scheme collapses, like Bernie Madoff -- times a million.


Hat tip: Drudge. Linked by: Instapundit and Michelle Malkin. Thanks!

Friday, November 26, 2010

Sadly, No Economic Literates at Unintentionally Hilarious Lib Blog

Robin of Berkeley's conversion to conservatism apparently offended more than a few progressives.

Witness the economic geniuses at Sadly, No F'ing Sense, who echo the standard liberal response to Robin's heartfelt article.


Never mind that the system that has enriched and fed more people around the world than any other is the free market -- otherwise known as capitalism, which the crackpottery routinely rejects.

Never mind that the authoritarian and Fabian socialist systems that the left idolizes are collapsing as we speak.

Never mind that we already have Medicaid for the poor. And Medicare for the elderly. And those systems, too, are melting down.

Never mind that 75% of all pharmaceutical and medical innovation -- which the bankrupt NHS and Canadian health care systems freeload upon -- originate in the United States. And that those systems are bankrupt. Just like Medicare and Social Security. And the insanity of ladling on another monstrous entitlement -- a bill that no one read and fewer understand -- is just the ticket for the economic illiterates.

But facts, logic, reason and history have never been strong suits for the Left. Especially the jackasses at Sady, No F'ing Sense.


Linked by: Michelle Malkin and American Power. Thanks!

Thursday, November 25, 2010

Things are tough all over: Nicholas Cage's foreclosed house sells at less than a third of its original listing price

Actor Nicholas Cage lost his Bel-Air estate to foreclosure earlier this year. Two weeks ago, an anonymous buyer grabbed the mansion for $10.5 million in cash, less than a third of its original listing price.

The 1940 Tudor had failed to generate any bids in April when it was offered at the county courthouse steps in Pomona. Six loans totaling $18 million encumbered the house, which the actor had decorated in a style one local real estate agent dubbed "frat-house bordello." Among personalized touches were garish room colors, three dozen bronze wall sconce holders made from a cast of the Oscar winner's arm and hundreds of elaborately framed comic-book covers lining the walls.

...The Colcord-designed house sits on an acre, has a central tower, a custom wine cellar, a 35-seat home theater, six bedrooms, nine bathrooms and a swimming pool.

...May Ormerod Harris, a major USC benefactor, commissioned the home; then it sold to banker Stanley Stalford in the early 1960s, Parsons said. Yuban-brand coffee heirs were the next inhabitants before the estate transferred to a series of celebrity owners: Dean Martin, Tom Jones and Cage...

Although Cage is reported to have earned $40 million in 2009 alone, he's suing his former manager for collecting outsized fees and giving ruinous advice. For his part, the ex-manager claims Cage engaged on a "spending binge of epic proportions", noting that in 2008 the actor had owned "15 palatial homes around the world, four yachts, an island in the Bahamas, a private Gulfstream jet and millions of dollars' worth of art and jewelry."

Doctor Housing Bubble observes that several banks, which had written $18 million in six different loans on the house, took a $7.5 million haircut on the deal.

Which goes to show you that no one -- not you or me, not a Hollywood actor, not even the richest and most prosperous country on Earth -- can spend beyond their means for long.

Which is a lesson the modern Democrat Party apparently never learned.


Wednesday, November 24, 2010

Union bosses hate their members, chapter 4,323: New York's public sector fat-cats kick 1,000 members to the curb

The modern public sector union bosses despise their membership. After all, the bosses vocally support open borders, illegal immigration and global warming legislation -- all of which destroy opportunities for "workers".

So if there's anyone out there who still thinks that union bosses support their members, this news out of New York ought to disabuse them of that quaint notion.

Gov. David Paterson is in the process of laying off 898 people as of Dec. 31 to plug a hole in the state budget, which assumes a $250 million savings in personnel...

Unions didn't agree to furloughs or a five-day pay lag -- meaning they would lose a week's pay now but get it back at the end of their state service.

Paterson said Tuesday that his only remaining option is layoffs. Notices will have to go out Dec. 10 to give the required minimum of 20 days' notice.

"There didn't have to be any layoffs at all. I don't want to lay off anybody," Paterson said at an event in Buffalo. "Layoffs add to the real crisis that we have, which is a revenue crisis. If you lay people off, you're bringing in less revenue."

...Paterson has complained for months that unions aren't sharing the burden of New York's ongoing fiscal crisis.

Long story short: in the midst of a fiscal calamity, New York's Public Employees Federation has refused a 1.9% salary deferral -- not cut, deferral -- and instead chose to kick nearly 1,000 of its own members to the curb.

Union members need to reject their leaders en masse. They need to throw off the yokes of oppression and embrace economic prosperity, not the failed, fifties-style Marxist policies of the SEIU, AFSCME, the NEA, AFT and PEF.

They're out to destroy America and they need to be stopped.


California 'College' Students: Please Jerry Brown, We Voted For You, So Hurry and Make Water Into Wine Plus Give Us Money

Earlier today the students of Citrus College in Glendora, California published an open letter ("Governor Elect Jerry Brown: We need your help") concerning the institution's financial health. And if the letter's economic illiteracy and intellectual bankruptcy are indicative of California in general, I recommend flushing twice and starting over.

Dear Gov.-Elect Jerry Brown,

...as the generation who is currently feeling the brunt of the state's financial hardships, we are asking for your help because we do care and changes need to be made.

-- Education is our priority. Please invest in it.

...College enrollment has gone down inpart [sic] because students cannot afford tuition costs, putting more weight on our already-impacted local community colleges.

The UC and Cal State systems have continuously imposed tuition increases while still making class cute [sic], in reality, making students pay more for less... We as students are not only handling with the pressures of succeeding in our studies, but also dealing with the stress of getting, seemingly unattainable, classes [sic] and trying to afford tuition...

Could someone interpret those last few sentences for me?

In order to pay for the ever-rising tuition, we also need to find work.

We need you to create jobs and offer tax incentives to keep jobs in California.

In short: we, the students of Citrus College, demand that you raise taxes to help increase the quality of education while simultaneously lowering taxes to keep jobs in California so we can find jobs.

According to the Los Angeles Times, California is ranked as having the third highest unemployment rate...

Next cuts and tax increases must be made in appropriate areas to bring back balance to this state's finances.

I'm sooo confused, students! Tax incentives, mentioned in the prior paragraph, are the opposite of tax increases.

One thing is certain, California needs to keep a closer eye on who is receiving public services like welfare and WIC...

The government should be run just like any other business and reduce the wasteful spending that they so often spend on overtime and unrealistic government pensions.

There should also be an increase in taxes... Alcohol and cigarettes should be more heavily taxed as well as the uncommonly thought of, junk food... For example, reconsider the soda tax.

Say, I wonder if heavy taxation of "junk food", "soda" and sundry other taxes will hurt entry-level jobs like those in grocery and convenience stores, mom-and-pop retailers and the like?

This is your second time as California's governor and our votes have shown we trust in your experience.

Please, do not let us down.

Sincerely, the students of the Citrus College Clarion.

Jerry Brown's first two terms as governor led to many of the problems you're facing now, kids. In fact, during the campaign, he was forced to admit to a series of screwups and Statist social engineering policies that helped bankrupt the state.

What color is the sky on your planet, Citrus College students?

Sorry, children, but you're about to find out for yourselves just how screwed up the the modern Democrat Party is. There are no unicorns, there are no free lunches, and your new governor is just like the old Jerry Brown: dumber than ever and owned lock, stock and barrel by the public sector unions.

Welcome to the Tea Party.


Tuesday, November 23, 2010

Cloward-Piven Democrats finally succeed in destroying American dream: Minimum wage earner nets more than family making $60K

Got Cloward?

Tonight’s stunning financial piece de resistance comes from Wyatt Emerich of The Cleveland Current. In what is sure to inspire some serious ire among all those who once believed Ronald Reagan that it was the USSR that was the “Evil Empire”, Emmerich analyzes disposable income and economic benefits among several key income classes and comes to the stunning (and verifiable) conclusion that “a one-parent family of three making $14,500 a year (minimum wage) has more disposable income than a family making $60,000 a year.” And that excludes benefits from Supplemental Security Income disability checks...

America is now a country which punishes those middle-class people who not only try to work hard, but avoid scamming the system. Not surprisingly, it is not only the richest and most audacious thieves that prosper – it is also the penny scammers at the very bottom of the economic ladder that rip off the middle class each and every day, courtesy of the world’s most generous entitlement system...

You can do as well working one week a month at minimum wage as you can working $60,000-a-year, full-time, high-stress job.

First outlined by Columbia Professors Cloward and Piven in their blueprint for the destruction of American capitalism, the Democrat Party's dual policies of limitless welfare and open borders have finally succeeded.

America stands on the brink of economic catastrophe. The 2010 elections were a hopeful beginning, but only a beginning. We must unwind the treasonous policies of the progressive left and leave them no more a political force than the Whigs.


Hat tip: RightNetwork's Jim Hoft.

How's "Helicopter Ben's" Anti-Deflation Checklist Working Out?

In 2002, Ben Bernanke -- the nation's foremost expert on the Great Depression -- gave the infamous "helicopter drop" speech in which he described how America could avoid deflation.

As Chairman of the Federal Reserve, Bernanke has had more than enough time to try each and every policy prescription. How's he doing?

Here is Bernanke’s roadmap, and a “point-by-point” list from that speech.

1. Reduce nominal interest rate to zero. Check. That didn’t work...

2. Increase the number of dollars in circulation, or credibly threaten to do so. Check. That didn’t work...

3. Expand the scale of asset purchases or, possibly, expand the menu of assets it buys. Check & check. That didn’t work...

4. Make low-interest-rate loans to banks. Check. That didn’t work...

5. Cooperate with fiscal authorities to inject more money. Check. That didn’t work...

6. Lower rates further out along the Treasury term structure. Check. That didn’t work...

7. Commit to holding the overnight rate at zero for some specified period. Check. That didn’t work...

8. Begin announcing explicit ceilings for yields on longer-maturity Treasury debt (bonds maturing within the next two years); enforce interest-rate ceilings by committing to make unlimited purchases of securities at prices consistent with the targeted yields. Check, and check. That didn’t work...

9. If that proves insufficient, cap yields of Treasury securities at still longer maturities, say three to six years. Check (they’re buying out to 7 years right now.) That didn’t work...

10. Use its existing authority to operate in the markets for agency debt. Check (in fact, they “own” the agency debt market!) That didn’t work...

11. Influence yields on privately issued securities. (Note: the Fed used to be restricted in doing that, but not anymore.) Check. That didn’t work...

12. Offer fixed-term loans to banks at low or zero interest, with a wide range of private assets deemed eligible as collateral (…Well, I’m still waiting for them to accept bellybutton lint & Beanie Babies, but I’m sure my patience will be rewarded. Besides their “mark-to-maturity” offers will be more than enticing!) Anyway… Check. That didn’t work...

13. Buy foreign government debt (and although Ben didn’t specifically mention it, let’s not forget those dollar swaps with foreign nations.) Check. That didn’t work...

The Fed can certainly encourage inflation by offering money at seemingly attractive rates, but it cannot force the issue.

Right now, neither consumers nor businesses want the risk. They are too loaded up with debt already, no matter how attractive the Fed wants debt to appear. It's like trying to give a kid one piece of cake too many. At some point, extra frosting makes the cake look less attractive, not more. At that point the kid will not take another bite.

That is the point we are at now.

"Mr. Wizard, get me the hell out of here!"

Monday, November 22, 2010

Democrats' Cavalcade of Corruption Continues Apace: New Evidence Against Maxine Waters May Make Her Radioactive in 2011

Quick quiz: which of the following Democrat luminaries enriched themselves the most at taxpayer expense? (Please choose only one*)

Max Baucus
Kent Conrad
Little Dick Durbin
Dianne Franken Feinstein
Barneys Frank
Tom Harkin
Alcee Hastings
Barack Obama
Nancy Pelosi
Charlie Rangel
Harry Land Deal Reid
Maxine Waters

*Chris Dodd, William Jefferson, Teddy Kopechne, Allan Mollohan and John Murtha are no longer eligible

Answer: I have no freaking idea. Why are you asking me?

Ed Morrissey explains that the rocket scientist known as Maxine Waters is the latest crook Democrat to visit the hot seat.

...The New York Times reported over the weekend that the House Ethics Committee suddenly postponed the trial of Maxine Waters on ethics violation because it found more evidence of direct intervention by her office to benefit the bank in which her husband owned a substantial interest.... [The emails show] her chief of staff directly coordinated with other members of the House Financial Services Committee on behalf of OneUnited...

The e-mails are between Mikael Moore, Ms. Waters’s chief of staff, and members of the House Financial Services Committee, on which Ms. Waters serves. The e-mails show that Mr. Moore was actively engaged in discussing with committee members details of a bank bailout bill apparently after Ms. Waters agreed to refrain from advocating on the bank’s behalf. The bailout bill had provisions that ultimately benefited OneUnited, a minority-owned bank in which her husband, Sidney Williams, owned about $350,000 in shares...

...A person directly involved in the investigation said the new e-mails could show that members of her staff continued to work on the bank’s behalf... “It may directly contradict a bit of Maxine’s story, if not the actual facts, the way she has told it,” said the person, who did not want to be identified because of the sensitivity of the trial.

Waters may not be the only Democrat in trouble if this is true. The e-mails used loaded but generic terms like “small bank language,” a code for the known interest Waters had in OneUnited...

That opens up questions about the ethics not just of Waters but of those committee members who cooperated with Moore and his pleas for “small bank” assistance. OneUnited ended up with millions in TARP money, and unlike other applicants, got to count that cash among its assets before actually receiving the money. The preferential treatment the bank received — unique among over 700 applicants for TARP money — seems oddly coincidental to Waters’ status and the newly exposed machinations of Moore on her behalf.

These Democrats make Bernie Madoff and Charles Ponzi look like shoplifters.