Saturday, December 20, 2014

The Housing Bubble Explained in One Little Gem of an Excerpt...The Housing Bubble Explained in One Little Gem of an Excerpt...

Published on Zero Hedge (http://www.zerohedge.com)

Home > The Housing Bubble Explained in One Little Gem of an Excerpt...


 

By Tyler Durden

Created 12/19/2014 - 18:55

 

Submitted by Thad Beversdorf via First Rebuttal blog [9],

For some reason I feel like this is a good time to review what we can expect when our government and its agencies attempt to create wealth out of thin air.  We can see the absurdity and hubris of our policymakers who believe they can circumvent economic laws in the following excerpt from the “The National Homeownership Strategy: Partners in the American Dream” [10].  This is a document that was put together by HUD and some other private and public stakeholders at the request of President Clinton way back in 1995.  Isn’t it amazing how poor policies that seem so right at the time, to some, end up kicking us in the ass for decades.  And as much as the government has gotten comfortable with the storyline suggesting banks are responsible for the entire mortgage bubble mess of the mid 2000′s, it was, in fact, all started by government agenda.  Have a look at this little gem which I am suggesting is the document that led us to the economic devastation from which we are yet to crawl out. 

For many potential homebuyers, the lack of cash available to accumulate the required downpayment and closing costs is the major impediment to purchasing a home. Other households do not have sufficient available income to to make the monthly payments on mortgages financed at market interest rates for standard loan terms. Financing strategies, fueled by the creativity and resources of the private and public sectors, should address both of these financial barriers to homeownership.

And while we all love a bit of creativity in life, maybe best to avoid creativity in an effort to ignore risk fundamentals.  Yet our government was certain it could defy gravity. A child could tell you that if a person doesn’t have sufficient money to pay back a loan, well they shouldn’t have a loan in the firsplace.  And so to force banks to lend depositors’ money to borrowers who have neither the required down payment nor the cash-flow to cover monthly payments is simply absolute unadulterated stupidity.  Most of us, if we had been made aware of that thought process, would have put a stop to it straight away.

So what lesson did we learn the hard way? Looking around today, absolutely nothing.  Our government officials and policymakers continue to operate under the presumption they are gods, not subject to the laws of this world.  Despite creating such immense devastation last time around they have actually convinced themselves that they are not responsible (evidenced by the $350 billion they have pillaged from the banks in the name of justice for having created the housing bubble).  And so by not acknowledging their mistake it allows them to still believe they can make pigs fly.  Specifically, the central bank is printing incredible stocks of money and pushing it directly into the stock market in an effort to create economic growth from nothing.  Their storyline is that such a strategy will create so much wealth at the top that it will spill over onto the rest of society.  They also believe there will be no consequence to printing an unprecedented supply of dollars despite the laws of economics very clearly telling us there most certainly will be consequences.

Now while they have managed to delay the inevitable devastation, it is coming. You see everything is a trade off.  You can create long drawn out overpriced markets but ultimately fundamentals will trump all and the subsequent recalibration will be that much more painful.  The fundamentals always come back into the equation.  Like anything, if you want to reduce the iterations you can but each iteration will then be larger.  Let me show you what I mean by reviewing historical market trends.

The following charts depict monthly returns (green line) and S&P price level (blue line) with a 24 month moving average (black line).  Note each chart depicts a different time period.  The first chart is 1950 to 1981, the second is 1981 to 1993 and the last chart is 1993 to present.  I’ve separated them in this way because there are 3 very distinct characteristics that are present between the three periods.  Look closely at the 24 month moving average and compare them across the three periods.

Screen Shot 2014-12-17 at 12.35.11 PM

Screen Shot 2014-12-17 at 12.34.33 PM [11]

Screen Shot 2014-12-17 at 12.56.06 PM

What we discover from the first chart is that between 1950 and 1980 we see very even cyclicality in the 2 year moving average of quite moderate positive peaks and negative troughs repeating every 2 or 3 years.  However, subsequent to 1981 we see something quite different.  Our 2 year moving average no longer has negative troughs.  In fact, the 2 year moving average stays positive and very calm from the end of ’81 through to mid ’93.  The third chart takes us into the extreme bubbles phase.  Here we see a strong positive trend with more variation than in the previous phase but with intermittent significant drawdowns.  This is different from the first phase where drawdowns were very regular but minimal in size and not catastrophic.  Whereas in this latest phase we have much longer periods in between drawdowns but each drawdown is many times more severe than in the first phase.

So this all begs the question why?  What caused the normal market cyclical iterations to change so significantly seemingly out of nowhere?  Well think about Fed policy between the three phases.  In the early phase our monetary policy was constrained by Bretton/Woods.  The second phase coincides with Volker taking over as Fed Chair and implementing very tight monetary policy with a focus shift to inflation control and so limiting money supply expansion.  The final phase corresponds with a very sharp increase in M2 expansion that continues today.

And so these variations in market trends seem to correlate to the underlying monetary policies.  Certainly there are significant changes within the sophistication of the market itself however, human behaviour is the same over time and markets react to market forces the same way over time.  And so what is different then are the underlying market forces.  And we see three very distinct market trends indicating there are three very different underlying market forces between the three periods.  Understanding these differences should make it easy to identify and acknowledge how monetary policy is affecting markets.

There is perhaps no natural best trend but the people should decide which market behaviour suits what we want out of a market and then apply the appropriate policies accordingly.  If large bubble build ups followed by infrequent but devastating crashes is the objective well then it appears our policymakers are right on point.  But let’s try to understand exactly what is taking place.

Screen Shot 2014-12-17 at 1.15.12 PM [12]

You can see the acceleration of M2 expansion in the mid 1990′s that has yet to slow down.  But money supply is not the only major underlying economic shift.  Thing is if we are allocating that money supply efficiently then economic growth would be extraordinary and that would support the notion of all time high markets.  So let’s see how efficiently we are deploying our money.

Screen Shot 2014-12-17 at 1.49.48 PM

We can see back in the ’60′s and ’70′s efficiency of money allocation was fairly steady around 1.75. Then into the Volker years money velocity improved slightly in the first half of the decade and then really took off toward the end of the ’80′s and into the first half of the ’90′s.  However, monetary efficiency seems to have peaked around the time M2 money stock started into it’s hyper-acceleration phase in the mid 1990′s.  Since then monetary efficiency has been a falling knife, yet to hit the ground. And if we look at the next chart it really ties this altogether for us.

fixed-cap-to-div [13]

Right up until the early to mid 1990′s we were allocating money to economic boosting investments.  Things like fixed capital reinvestment.  However, toward the mid ’90′s we began to reallocate money toward financial markets and away from economic investments.  This trend too continues today. The end result is that our economic policymakers and really the consciousness of society is so narrowly focused on “The Market” that we seem uninterested in all things not securitized.  And what this suggests is that once again our policymakers believe they can ignore economic laws.  That they can somehow create economic growth from nothing.

Last time it was handing out houses to folks who had not earned those assets in hopes that would somehow become real.  This time its printing endless amounts of dollars, sticking them in the stock market money machine and expecting that to somehow create economic prosperity to  all. It is mind boggling that men with so much power can be so incredibly thick.  The hubris is par for the course with such power, but one would not expect such stupidity.  The real ugliness of it all is that while those on top will ultimately create more wealth from the coming devastation, the vast majority of Americans have been forced to play along.  Forced to put their savings in the money machine that is now the only game in town.

And so when it does inevitably all come tumbling down only 6 years after the last policies failure, it will mean the end for so many.  And because those stories would reflect poorly on the prominent men whose stupidity led to such destruction those stories will not be told with truth.  They will be told as though retirees were taking outrageous risks late in life when everybody knows you should not be in the market.  Just as it was the banks, the borrowers and the brokers who were solely responsible for the housing bubble that devastated so many, including the folks you never hear about who lost 30% equity in their homes but continued to quietly and responsibly pay their mortgages.  Yes once again those responsible will profit from their misguided policies and will bear no accountability for the horrible consequences of their decisions.  Ah yes, America…. ain’t she wonderful!

Gun Violence In America (In 6 Uncomfortable Charts) (Zerohedge)

 

Tyler Durden's picture

Submitted by Tyler Durden on 12/19/2014 22:25 -0500

 

A recent report, The Annual Review of Public Health, summarizes the basic facts of firearm violence, a large and costly public health problem in the United States for which the mortality rate has remained unchanged for more than a decade. It presents findings for the present in light of recent trends. Risk for firearm violence varies substantially across demographic subsets of the population and between states in patterns that are quite different for suicide and homicide. Suicide is far more common than homicide and its rate is increasing; the homicide rate is decreasing. As with other important health problems, most cases of fatal firearm violence arise from large but low-risk subsets of the population; risk and burden of illness are not distributed symmetrically. Compared with other industrialized nations, the United States has uniquely high mortality rates from firearm violence.

SUMMARY POINTS

1. The overall fatality rate from firearm violence has not changed in more than a decade.

2. Suicide is the most common form of fatal firearm violence (64.0% of deaths in 2012) and is increasing. Homicide is decreasing.

3. Homicide risk is concentrated to a remarkable degree among Black males through much of the life span. Mortality rates from firearm violence are very high and unchanged in this group.

4. Suicide risk is highest among White males beginning in adolescence. They also account for most fatalities from firearm violence and have increasing mortality rates.

5. As compared with other industrialized nations, the United States has low rates of assaultive violence...

...but uniquely high mortality rates from firearm homicide and suicide.

Full report can be found here (PDF)

Saturday, December 6, 2014

19 Signs That You Live In A Country That Has Gone Completely Insane (ZeroHedge)

Submitted by

Michael Snyder of The End of The American Dream blog

Do you ever feel like you are living in a “Bizarro World”? That is how I feel much of the time.  I look around and it seems as though some form of mass psychosis has descended on most of the population.  Things that would have had Americans angrily marching in the streets a generation or two ago are now just accepted as “normal” by the “sheeple” that populate this nation.  If the talking heads that endlessly spew nonsense at us through our televisions tell us to believe something, no matter how absurd it is, most people just go along with it.  Before we had televisions and radios and computers and movies and the Internet, people actually had to do the hard work of thinking for themselves. But now we are all plugged into this giant “matrix” that tells us what to think, what to believe and how to feel about things.  And unfortunately, the people that are telling us what to think and believe are delusional themselves.  The blind are leading the blind, and as a result our nation is coming apart at the seams all around us.

The following are 19 signs that you live in a country that has gone completely insane…

#1 When those occupying the highest offices in the land tell you that an $18,000,000,000,000 debt is “under control“, you live in a country that has gone completely insane.

#2 When your president starts acting like an emperor and begins ruling by decree and your elected representatives won’t lift a finger to do anything to stop it, you live in a country that has gone completely insane.

#3 When the greatest dream in life for millions of your fellow citizens is to win the Powerball jackpot, you live in a country that has gone completely insane.

#4 When dressing up sex dolls in fashionable clothing and photographing them is considered to be art, you live in a country that has gone completely insane.

#5 When only 36 percent of the population can name all three branches of government, you live in a country that has gone completely insane.

#6 When a boy can sue his high school for not letting him use the girls’ restrooms and win $75,000 in “damages”, you live in a country that has gone completely insane.

#7 When people that want to have sex with their own family members start demanding “equal rights”, you live in a country that has gone completely insane…

Sex With Son - Photo from izismile

#8 When pregnancy is considered to be a “disease” and babies are considered to be “liabilities”, you live in a country that has gone completely insane.

#9 When the federal government collects billions of our phone calls and emails and hardly anyone gets upset about it, you live in a country that has gone completely insane.

#10 When 30 million of your fellow citizens are taking antidepressants, you live in a country that has gone completely insane.

#11 When an endless stream of gang members, drug dealers, sexual predators, welfare parasites and Middle Eastern terrorists can enter the country illegally and nothing is done, but anyone who criticizes this is in danger of being put on an “enemies list“, you live in a country that has gone completely insane.

#12 When you can get arrested for “encouraging terrorism on Twitter“, but not for publicly burning the American flag in the middle of the street, you live in a country that has gone completely insane.

#13 When your military airdrops huge loads of weapons into the hands of the very terrorists that they are supposed to be fighting, you live in a country that has gone completely insane.

#14 When there are 2.5 million homeless children living in your nation and nobody is calling it a “national emergency”, you live in a country that has gone completely insane.

#15 When a fifth-grade student can get suspended from school for making an imaginary gun with his fingers, you live in a country that has gone completely insane.

#16 When Congress has to pass a law to keep federal workers from watching porn all day long, you live in a country that has gone completely insane.

#17 When the number of payday lenders is greater than the number of Starbucks locations, you live in a country that has gone completely insane.

#18 When an illegal immigrant can get a drivers’ license, but the head of a fire department of a major U.S. city is suspended from his job without pay for promoting sexual morality, you live in a country that has gone completely insane.

#19 When the general public knows far more about Kim Kardashian than it does about the Federal Reserve, you live in a country that has gone completely insane.

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Thursday, November 20, 2014

21 Facts That Prove That Government Dependence Is Out Of Control In America (Zerohedge)

 

Tyler Durden's picture

Submitted by Tyler Durden on 11/19/2014 22:04 -0500

If you could stay home and watch television, play video games and hang out with your friends all day at government expense, would you do it? Of course most Americans that collect money from the government each month are not abusing the system.  Many truly are incapable of taking care of themselves, and others are just receiving government benefits (such as Social Security) that they feel that they have earned by a lifetime of hard work.  But with each passing year the number of Americans jumping on board “the safety net” continues to grow rapidly, and a lot of these people should be able to take care of themselves.  Today, the American people collectively receive more money from the government than they pay in taxes.  And remember, the federal government uses our money to build roads, inspect our food and fund the military as well.  So what does this say about our economy?  Could it survive without all of these debt-fueled transfer payments?  And what does this say about our society?  At one time, our nation was known for our work ethic.  What would our forefathers say about us today?  The following are 21 facts that prove that dependence on the government is out of control in America…

1. According to a Congressional Budget Office study that was just released, approximately 60 percent of all U.S. households get more in transfer payments from the government than they pay in taxes.  Here is more about this stunning report from Mark J. Perry’s Carpe Diem blog

Some additional analysis and commentary will be provided here that reveal a yet-to-be discussed major implication of the CBO report – almost the entire burden: a) of all transfer payments made to American households and b) of all non-financed government spending, falls on just one group of Americans – the top one-fifth of US households by income. That’s correct, the CBO study shows that the bottom three income quintiles representing 60% of US households are “net recipients” (they receive more in transfer payments than they pay in federal taxes), the second-highest income quintile pays just slightly more in federal taxes ($14,800) than it receives in government transfer payments ($14,100), while the top 20% of American “net payer” households finance 100% of the transfer payments to the bottom 60%, as well as almost 100% of the tax revenue collected to run the federal government. Here are the details of that analysis.

cbo1

The figures in Row 6 in the table above (and displayed in the graph above) show the amount of federal taxes paid by the average household in each income quintile minus the average amount of government transfers received by those households in 2011. For each of the three lower income quintiles, their average government transfer payments exceeded their federal taxes paid by $8,600, $12,500, and $9,100 respectively, and therefore the entire bottom 60% of US households are “net recipients” of government transfer payments.

2. About 70 percent of all government spending now goes toward dependence-creating programs.

3. From 2009 through 2013, the U.S. government spent a whopping 3.7 trillion dollars on welfare programs.

4. The percentage of the U.S. population that gets money from the federal government grew by an astounding 62 percent between 1988 and 2011.

5. According to an analysis of U.S. government numbers conducted by Terrence P. Jeffrey, there are 86 million full-time private sector workers in the United States paying taxes to support the government, and nearly 148 million Americans that are receiving benefits from the government each month.

6. According to the Survey of Income and Program Participation conducted by the U.S. Census, well over 100 million Americans are enrolled in at least one welfare program run by the federal government.  Sadly, that figure does not even include Social Security or Medicare.

7. Currently, there are somewhere around 40 million senior citizens in the United States.  By 2050, that number is projected to skyrocket to 89 million.  Supporting all of those senior citizens is going to be extraordinarily expensive.

8. Right now, more than 64 million Americans are receiving Social Security benefits.

9. Right now, more than 54 million Americans are enrolled in Medicare.

10. Right now, more than 70 million Americans are enrolled in Medicaid.

11. The number of Americans enrolled in the Social Security disability program now exceeds the entire population of the state of Virginia.

12. If the number of Americans on Social Security disability were gathered into a separate state, it would be the 8th largest state in the entire country.

13. In 1968, there were 51 full-time workers for every American on disability.  Today, there are just 13 full-time workers for every American on disability.

14. At this point, the federal government runs about 80 different “means-tested welfare programs”, and almost all of those programs have experienced substantial growth in recent years.

15. The number of Americans on food stamps has grown from 17 million in the year 2000 to more than 46 million today.

16. Ten years ago, the number of women in the U.S. that had jobs outnumbered the number of women in the U.S. on food stamps by more than a 2 to 1 margin.  But now the number of women in the U.S. on food stamps actually exceeds the number of women that have jobs.

17. Back in the 1970s, about one out of every 50 Americans was on food stamps.  Today, about one out of every 6.5 Americans is on food stamps.

18. Today, the number of Americans on food stamps exceeds the entire population of the nation of Spain.

19. According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”

20. According to a report from the Center for Immigration Studies, 43 percent of all immigrants that have been in the United States for at least 20 years are still on welfare.

21. Most Americans are not earning enough to support themselves and their families without government help anymore.  The following are some statistics about wages in the U.S. from a Social Security Administration report that was recently released

-39 percent of American workers made less than $20,000 last year.

-52 percent of American workers made less than $30,000 last year.

-63 percent of American workers made less than $40,000 last year.

-72 percent of American workers made less than $50,000 last year.

In order to have a middle class, you have got to have middle class jobs, and those are disappearing from our system very rapidly.

As a result, the number of people that are financially independent continues to drop.

So what will the future look like?

Will the government eventually have to take care of almost all of us?

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Monday, November 17, 2014

Racial Quota Punishment

Thomas Sowell

 

If anyone still has any doubt about the utter cynicism of the Obama administration, a recent agreement between the federal government and the Minneapolis Public Schools should open their eyes.

Under the Obama administration, both the Department of Education and the Department of Justice have been leaning on public schools around the country to reduce what they call the "disproportionate" numbers of black male students who are punished for various offenses in schools.

Under an implicit threat of losing their federal subsidies, the Minneapolis Public Schools have agreed to reduce the disparity in punishment of black students by 25 percent by the end of this school year, and then by 50 percent, 75 percent and finally 100 percent in each of the following years. In other words, there are now racial quota limits for punishment in the Minneapolis schools.

If we stop and think — as old-fashioned as that may seem — there is not the slightest reason to expect black males to commit the same number of offenses as Asian females or any other set of students.

When different groups of human beings have behaved differently in all sorts of ways, in countries around the world, for thousands of years of recorded history, why would we accept as dogma that the only reason one set of students gets punished more than others is because the people who are doing the punishing are picking on them?

Politically — which is the way the Obama administration looks at everything — any time they can depict blacks as victims, and depict themselves as their rescuers, that means an opportunity to get out the black vote for Democrats.

On the surface, this may look like a favor to blacks. But only on the surface.

Anyone with common sense knows that letting a kid get away with bad behavior is an open invitation to worse behavior in the future. Punishing a kid for misbehavior in school when he is 10 years old may reduce the chances that he will have to be sent to prison when he is 20 years old.

Other schools in other cities, which have also caved under pressure from the federal government, and agreed to lighten up on black kids who misbehave, have reported an increase in misbehavior, including violence. Who would have thought otherwise?

Letting kids who are behavior problems in schools grow up to become hoodlums and then criminals is no favor to them or to the black community. Moreover, it takes no more than a small fraction of troublemakers in a class to make it impossible to give that class a decent education. And for many poor people, whether black or white, education is their one big chance to escape poverty.

The people in the Obama administration who are pushing this counterproductive policy are not stupid. They are political, which is worse. They know what they are doing and they are willing to sacrifice young blacks to do it.

This punishment issue made me think back to the 8th grade, when I was punished by being kept after school, more often than any other kid in the class — black, white, Hispanic or whatever. I was bored in school and did various pranks to liven things up.

One day, after school, as I sat alone among the empty chairs in the classroom, the teacher said, sarcastically: "Well, here we are again, Sowell, just the two of us!"

"Good grief, Miss Sharoff," I said. "If we keep staying in after school together all the time, people will begin to talk."

"We will just have to live with the scandal," she said, without even looking up from the papers she was correcting.

Thank heaven there was no Obama administration to exempt me from punishment. Who knows how I might have ended up?

Years ago, there was a study of a working class community where there were black, Hispanic and Italian kids, and where many of the cops were Italian. When a black or Hispanic kid broke the law, the police took him down to the station and booked him. But, if an Italian kid did the same thing, they reacted differently.

The Italian cop would take the Italian kid out into an alley and rough him up. Then he would take him home to his family, tell them what had happened and leave him there — where the kid could expect another beating, instead of the wrist-slap punishment of the law. Those cops understood the realities of life that politicians ignore. And they were doing a favor to their own.

Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His website is www.tsowell.com. To find out more about Thomas Sowell and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2014 CREATORS.COM

Sunday, November 16, 2014

NCDC Grubers America, Yet Again

 

Posted on November 16, 2014 by stevengoddard

The experts at the National Climatic Data Center report that October was 4th warmest on record in the US, despite the fact that their own thermometers show it was 24th warmest – after 1947, 1963, 1884, 1900, 1882, 1950, 1881, 1931, 1938, 2007, 1953, 1918, 1956, 1897, 1910, 1927, 1971, 1934, 1973, 1941, 1940, 1962 and 1914

1947 and 1963 were nearly four degrees warmer.

ScreenHunter_4610 Nov. 15 18.44

They accomplished this by massively cooling the past, and warming the present. A full two degrees of data tampering!

ScreenHunter_4611 Nov. 15 18.49

The animation below shows how they completely corrupt the US temperature record, turning a century long cooling trend into a warming trend.

USHCNOctoberAdjustments

North America had the eighth highest October snow extent on record, yet NCDC claims it was fourth warmest here.

ScreenHunter_4612 Nov. 15 18.58

Rutgers University Climate Lab :: Global Snow Lab

In summary, NCDC is faking numbers and lying through their teeth.

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Friday, November 14, 2014

Greenfield: Super-Amnesty Will Turn Every City into Detroit


Sultan Knish blog ^ | Thursday, November 13, 2014 | Daniel Greenfield

Posted on ‎11‎/‎14‎/‎2014‎ ‎12‎:‎25‎:‎39‎ ‎AM by Louis Foxwell

Thursday, November 13, 2014

Super-Amnesty Will Turn Every City into Detroit

Posted by Daniel Greenfield @ the Sultan Knish blog

After another bloody weekend in Chicago, Mayor Rahm Emanuel branded the shootings unacceptable and the city’s top cop demanded more gun control laws. Chicago’s murder rate has actually dropped since concealed carry became legal. Emanuel’s lawsuits over his illegal gun control laws have left the already struggling city deep in the hole and forced to cover the NRA’s million dollars in legal bills.
Concealed carry paid off over that bloody weekend when a vet carrying a gun returned fire stopping a massacre before it happened. The original shooter ended up in the hospital, but nobody ended up in the morgue, which kept the death toll for the weekend down to fourteen.
Fourteen isn’t pretty, but it’s better than twenty or thirty.
Chicago’s murder rate in 1992 was double what it is today. The death rate was at 33.7 out of 100,000 which meant that you had a pretty good chance of being shot in Chicago. Today it’s down to 15 out of 100,000, which is small comfort to those ending up in the morgue, but it gives everyone else much better odds of surviving to see what ingenious ways the next corrupt mayoral administration will use to rip off the city.
Back in 1992, the cops also blamed guns for the murder rate. But it wasn’t the guns that were killing people. It was the gangs. Now the murder rate is down, but the number of shootings is up. To Chicago’s police boss, that’s a problem, as if it makes a difference to the deceased whether he’s shot, stabbed or dropped in the water wearing cement overshoes. But fighting guns is easier than fighting crime.
The gun obsession is one of the few things that cops and leftists have in common. It’s the last politically acceptable form of prohibitionism in a society that enthusiastically legalizes drugs, even if possessing crack cocaine is statistically much more likely to lead you to kill a man, than possessing a gun will.
Every shooting spree bypasses the obvious problem with calls for more gun laws and something for the youth to do over the weekend that doesn’t involve shooting up the local housing project. This weekend, Rahm Emanuel took on the problem of funding more teen centers while Chicago’s top cop blustered about more gun laws. And then having successfully talked around the issue, they all went home.
The left loves root causes more than it loves red shirts and black bandanas, a fashion choice that it shares with some of the gangs responsible for most of the shootings.
America’s gun violence problem is urban. It’s localized in Democratic enclaves. And it overlaps neatly with its corrupt political machines. It has nothing to do with the NRA and a great deal to do with the party of social engineering, the welfare state and gun bans.
And illegal immigration.
Homicide rates overlap with unemployment rates, especially when accounting for the demographic populations of young minority men who are statistically more likely to kill or be killed.
92% of black male teens in Chicago don’t have a job. In Detroit, 50% of black men are unemployed. It’s not that there aren’t any jobs, but the entry level jobs have been mostly going to immigrants.

The Center for Immigration Studies found that under Obama two-thirds of jobs went to immigrants, both legal and illegal. Throw in a massive illegal alien amnesty and the rush of illegal aliens into the country will turn the employment figures of every city into Detroit and Chicago.
The black male unemployment rate in New York was at 33%. And the murder rate in New York is significantly lower than in Detroit or Chicago. But how long will that last if the unemployment rate in New York rises above 50%? Before long the marginal gangs will swell to monstrous sizes controlling entire neighborhoods. Anyone who can will flee and the city will once again become what it was.
The same process will take place in most major American cities.
The United States of America does not have a shortage of workers. It has a shortage of jobs. The irresponsible immigration policy has created a surplus of workers. Illegal alien amnesty will make that surplus much worse. Legalize twelve million illegal aliens and another twelve million will come. Those who can’t find jobs, will find gangs. Those who lose jobs to them will also find gangs.
The gangs will fight each other for control of entire neighborhoods and the crime wave will set America back decades.
After the 1986 amnesty, the number of murders, which had begun to fall in the early eighties, rose again. They did not return to a pre-amnesty level until 1997. Rapes have only recently returned to a pre-amnesty level. Now the progress we’ve made is about to be undone all over again.
In 1986, murder rates suddenly rose mysteriously in major cities. The New York Times described the crime rates as being the highest since the 1970s.
In Chicago, murders increased by 20%. In New York they increased by 20%. The cities rushed to crack down on guns while insisting that they were mystified by the drastic increase.
The guns weren’t the problem. The illegal alien amnesty which had created a magnet was. Illegal aliens with fake documents headed in hoping to take advantage of amnesty. Later newly legalized immigrants invited their family members to join them. Even before the amnesty took effect, crime rates spiked.
Amnesty advocates claim that immigrants aren’t taking jobs from Americans because they are more likely to be employed at the lower and higher ends of the marketplace. And that’s half true. What it really means is that they displace trained technical workers at the high end of the marketplace. That leads to a further erosion of the native middle class, but it doesn’t directly lead to gang violence.
At the lower end of the marketplace, they not only displace workers, but they displace the workers that might have been. Teenagers who would have started working regular jobs instead roam around aimlessly. The lost entry level jobs are substituted with crime. Neighborhoods fall apart and gang violence increases as gang members compete for turf in the new drug marketplace. And the rest is crime statistics and children taken to morgues in cities that can barely keep the lights on.
If we want to repeat the same cycle again, Super-Amnesty, an amnesty several times bigger than the one in 1986, will make it happen. Entire cities will fall into gang violence. Their economies will collapse and that will have a ripple effect on their suburbs and on entire states.
America will be a more dangerous and poorer place. And the politicians will talk some more about banning guns and about building more teen centers for the youth to hang out in between shootings.

Monday, November 10, 2014

THE CRUSADES: A Direct Response To Islam’s Bloodlust

 

crusaders

Written by Audrey Russo on November 9, 2014

Most of us infidels in the West have been lied to. Trusting the education system, foolishly, we believed all the bunk bundled into our textbooks concerning the period in history (1096 AD -1272 AD) when the Crusades took place…they left out an itty bitty piece of info…This will be great for all your “enlightened” friends…

The real reason WHY the Crusades took place…and here’s the shocker: It was a response to Islam’s aggression!

That’s right…it all began with Muhammed’s implicit threat more than 450 years before the Crusaders entered Jerusalem. He said: “embrace Islam and you will be safe.” (Muhammed’s extortion letter to the Khaibar Jews)

Some facts for your ill-informed friends/family/colleagues:

— The Crusades were a delayed response for CENTURIES of Muslim aggression, that grew ever fiercer in the 11th Century. The Muslims focused on Christians and Jews…forcing conversions, plundering and mortally wounding apostates.
— The Crusades were a DEFENSIVE action, first called for by Pope Urban II in 1095 at the Council of Clermont.
— The Crusades were a response against Jihad, which is obligatory against non-Muslims entering “Muslim lands’”. (Muslim lands are any lands invaded and conquered by Islam.)
— The motives of the Crusaders were pure. They were jihad-provoked and not imperialistic actions against a “peaceful”, native Muslim population. The Crusades were NOT for profit, but rather to recover the Holy Land brutally invaded and conquered by Muslims…who conquered for profit and as a notch on their superiority belt.
— The lands conquered by the Crusaders were NOT colonized under the Byzantine Empire. The Empire withdrew its support so the Crusaders renounced their agreement.

The Islamic world ripped through the Christian world on a bloody Jihad crusade to propagate Islam. Muslim imperialistic conquest wars were launched for more than 1,500 years against hundreds of nations and over millions of square miles (larger than the British Empire at its peak). The Jihad crusade went from southern France to the Philippines, from Austria to Nigeria, and from central Asia to New Guinea.

The dictionary defines imperialism as “the policy and practice of seeking to dominate the economic and political affairs of weaker countries.” This historical Islamic Jihad WAS imperialistic…and its goals remain the same.

Islam’s greed and lust for bloody domination of non-Muslims and their property CAUSED the Crusades…it doesn’t get simpler than that!

Shalom through strength…

Saturday, November 8, 2014

Death Of The Working Class In 12 Charts (Zerohedge)

 

Tyler Durden's picture

Submitted by Tyler Durden on 11/07/2014 21:00 -0500

 

Submitted by Thad Beversdorf via First Rebuttal blog,

They say a picture is worth one thousand words.  And so here’s a twelve thousand word equivalent essay that quite clearly depicts how the policies of the new millennium are shaping the new world order.  The powers that be have looked at these same charts, understand their implications and yet continue on the current path.  The objective then is clear.  The death of the working class.

With almost 100% of ‘savings’ having been forced into the stock market we are getting ever closer to what will be described as an epic collapse of wealth.  However, the more fitting description will be an epic and final transfer of wealth from the working class to the burgeoning aristocracy as assets are picked up for pennies on the dollar.  Pay particular attention to data from the end of the 1990′s through the new millennium.

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real income by quintile

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US satisfaction

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9 Bills Republicans Should Pursue Immediately


by Ben Shapiro 5 Nov 2014 1511 post a comment

The big question now confronts a newly-emergent Republican majority in the Senate and an overwhelming Republican majority in the House: what next? Some party leaders have called for working with the opposition; some have proposed comprehensive legislation. Others say it’s time to push forward with a hard-core conservative agenda, full speed ahead.
The answer truly lies in combatting the narrative that the media will no doubt embrace: Republicans as the Party of No. We saw this narrative emerge in the aftermath of the Republican victories of 2010; Obama then ran against the supposedly obstructionist Congress. The media, seeking to prop up a Hillary Clinton run, will now demonize the Republican Party as a roadblock to progress.
Which is why the GOP must reverse the narrative. It is President Obama who is the roadblock. He is, in fact, the President of No.
How can the GOP achieve this reversal? By moving beyond omnibus packages, pork-laden monstrosities cobbled together via a consensus-building process. Instead, Republicans should pursue short, single-issue bills, no more than 10 pages in length, with clear and concise language. The bills should all be simple, comprehensible, and inescapable in the conclusions constituents should draw from a Congressional vote on them.
Here are the top options for Republicans:
Stop Amnesty Now. President Obama wants to pursue executive amnesty. We all know it. He knows it; his cabinet knows it; the media know it. The Republicans should pass a one-page bill defunding any agency of government that refuses to implement federal immigration law or that facilitates such refusal. The executive branch does not have the cash to implement amnesty – unless Congress gives it to President Obama.
Border Security. Republicans should immediately pass a bill securing the southern border, with funds available to complete the fence. Those funds should, if possible, be given to border state governors for implementation should those governors apply for grants. Furthermore, Republicans should fully fund all immigration agents so that the great lie that government cannot keep track of those illegally in the country can be put to bed once and for all: if the IRS can keep track of hundreds of millions of Americans, surely the feds can keep track of 10 million illegal immigrants.
Piecemeal Funding Of The Government. Republicans are already talking about passing a full budget. They shouldn’t. The budget process is a joke, created purely for the purpose of lard-slathered legislation. Instead, Republicans should individually fund each portion of the government, and force Obama to veto every one of those bills. Let him go on record as opposing funding for the Defense Department, the Centers for Disease Control, and the like, all in order to preserve his precious Obamacare. It will be difficult for him to argue that a government shutdown is the Republicans’ fault when he has hundreds of individual bills funding everything Americans want on his desk awaiting signature.
Repeal Obamacare. Yes, full repeal. Obama will reject it. That does not matter. The point is that the American people do not like Obamacare, and are not interested in preserving it. A full quarter of Americans said in exit polls yesterday that health care was their top voting priority. That number is likely to rise as Obamacare is implemented. Republicans pledged repeal. Now is the time for them to fulfill that pledge.
Restore Defense Department Cuts. The cuts to Defense funding under President Obama’s sequestration have been disastrous for Americans’ security. We no longer have the capacity to fight two wars simultaneously – a basic requirement of national security – and we are looking at the greatest cuts to military readiness in almost a century. Republicans should move quickly to replace Defense spending in the face of a growing threat from Islamic terrorism, Russian imperialism, and Chinese militarism.
Withdraw Funding From Certain Parts of The United Nations. The United Nations is an amoral joke, and councils like the Human Rights Council are far worse than that. Spending millions of taxpayer dollars to prop up failing dictatorships and thugocracies isn’t just wrong, it’s an insult to the men and women who work every day to stop such dictatorships – and those who die trying to fight them.
Pass Strong Sanctions on Iran, Withdraw Funding for the Palestinian Authority, Move the US Embassy in Israel to Jerusalem. President Obama’s outreach to Iran has been one of the greatest catastrophes for American foreign policy in decades. Iran will go nuclear, unless the United States takes severe action against Iran. That means harsh sanctions, beginning now. That would also send Iran the signal that no matter how much President Obama hates “chickens***” Israeli Prime Minister Benjamin Netanyahu, the people of the United States stand shoulder-to-shoulder with Israel. The same message would be sent by moving the embassy to Jerusalem – right now, the Obama administration refuses to even state that Jerusalem is a part of Israel – or with a move by the Congress to cut off foreign aid to the Palestinian Authority, which is working with Hamas in a genocidally anti-Jewish campaign of terror against the Jewish state.
Dismantle Common Core. Common Core is set to plague states across the country with its mishmash of standards and requirements. Federal power over education should be delegated back to the states, where it belongs. Republicans on the state level should then vote to set up grant programs that create actual teacher training standards, as in countries like Finland.
Greenlight Keystone XL. New Senate Majority Leader Mitch McConnell (R-KY) has already said that this remains a top priority. President Obama should be forced to give Keystone XL an up-or-down decision as soon as possible. As Alison Lundergan Grimes found out, Americans like access to energy.
There are plenty more such legislative proposals worthy of consideration. The bottom line: if Republicans blow this opportunity to draw a contrast with the Democratic Party, they will have failed dramatically. President Obama must become the President of No in order for Americans to see Republicans as a party worth saying yes to in 2016.
Ben Shapiro is Senior Editor-At-Large of Breitbart News and author of the new book, The People vs. Barack Obama: The Criminal Case Against The Obama Administration (Threshold Editions, June 10, 2014). He is also Editor-in-Chief of TruthRevolt.org. Follow Ben Shapiro on Twitter @benshapiro.

Monday, November 3, 2014

It's not an error, it's fraud. (Karl Denninger –Market-ticker.org)

It's not an error, it's fraud.

And this fraud is killing you.  Literally.

The top scientist guiding the U.S. government’s nutrition recommendations made an admission last month that would surprise most Americans. Low-fat diets, Alice Lichtenstein said, are “probably not a good idea.” It was a rare public acknowledgment conceding the failure of the basic principle behind 35 years of official American nutrition advice.

The problem is that there was never science behind any of it.  The so-called "science" was cooked, manipulated and the data selected to show a desired outcome.

That's fraud.

But this scam didn't just cost you money, although it sure as hell made a lot of medical providers very rich (at your expense.)  It also made you sick and killed many of you through heart disease, diabetes, obesity and more.

Yet most Americans are still actively trying to avoid fat, according to a recent Gallup poll. They are not aware of the USDA’s crucial about-face because the agency hasn’t publicized the changes. Perhaps it did not want to be held responsible for the consequences of a quarter-century of misguided advice, especially since many experts now believe the increase in carbohydrates that authorities recommended has contributed to our obesity and diabetes epidemics.

These people, and the doctors who lapped this crap up without question and dispensed advice that factually killed millions of Americans, should be prosecuted for their intentional falsehoods.

They won't be -- but they should be.

However, this points out something you ought to pay attention to -- other than patching holes and cutting things off, which medical science is very good at (it's damn hard to not understand what's going on when you broke your leg!) most of what is called "science" in the medical field and the recommendations that flow from it should be taken with an entire shaker full of salt -- on your food.

These are compelling reasons for Congress to ask the USDA and HHS to reconstitute the Dietary Guidelines committee so that its members represent the full range of expert opinion. The committee should then be mandated to fundamentally reassess the Guidelines’ basic assumptions, based on the best and most current science.

smiley

No.

What we need to see is incarceration, and lots of it.

Saturday, November 1, 2014

Don’t trust the NOAA warm winter forecast - ‘Polar Vortex’ will return (Weatherbell.com)

 

By Joseph D’Aleo, CCM
HLN Weekly

The Winter of 2013-14 was wild over North America. 

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Most forecasters including NOAA, the media and public, were caught by surprise. The arctic air pushed the grid to the brink of failure and led to supply issues and resulting price spikes for other sources of energy stressing homeowners and businesses. Look for a repeat this winter despite NOAA and Department of Energy forecasts of a warmer winter and no repeat of the polar vortex.

I, and most all meteorologists, have a high regard for the work of our forecaster brethren at the National Weather Service.  NOAA has done some great research on factors affecting longer term weather and they do a commendable job with medium range forecasts.

The government forecasters do a have a blind spot, however, with seasonal forecasts. Part of the reason, a former NOAA Climate Prediction Center Director once told me in 2003, was due to pressure from academia only to use El Ninos and La Ninas with an politically driven adjustment for long term warming trends (ignoring the fact they have been non-existent for almost two decades).

In September I was invited to a meeting at a large company in Toronto that advises many organizations on how to manage their way through energy market fluctuations and supply disruptions. They had heard that we at Weatherbell (in July of 2013) had projected a historically cold winter for 2013/14. That is in comparison to Environment Canada (Canadian Government weather service) prediction in late November 2013 that last winter would be warm in Toronto and the Great Lakes. 

Remember how cold last winter was for us here in New Hampshire??? It was even worst in Toronto and most large US cities around the Great Lakes. They wanted to know how Weatherbell got it right when both the Canadian & US Government forecasts were so wrong.

Our research at Weatherbell had identified a pool of warm water that had developed in the central Pacific during the super La Nina of 2010/11 and slowly drifted with the wind driven currents into the Gulf of Alaska.  A similar warm pool formation and movement occurred, during the brutal winters of the 1916-1918 period, 1976-1978 and again in 2002-2004. Indeed it was the coldest December to March in Chicago in the entire record from 1872 beating out the previous record cold. Vermont in the deep snow, had its coldest March ever, beating out 1916.

Unlike government forecasters that have to contend with toting the party line on Global Warming by academia and politicians, private sector forecasters investigate the relationship of many factors, major multidecadal cycles in the Pacific and Atlantic, variances on the sun, the winds in the high atmosphere that flip back and forth, soil moisture, snow cover in winter, volcanic eruptions, and unusual features like that warm pool. We study the past intensively to forecast the future.  At Weatherbell we have 3400 clients that depend on us and they will tell you we usually get it right.

We had promised a cool, spring and summer, an erratic fall this year and have advised our clients since early this year this upcoming winter will be another hard winter characterized by lots of snow. It should be cold over much of the country but focused in the east

NOAA meanwhile has again forecast a warm winter especially west and northeast. They have it cooler in the south, mainly because they see clouds and a southern storm track with the average of all El Ninos.  They have expanded the cold to the southeast and will likely expand it to the north but not enough. They have had a clear warm bias in the past dozen years.  A public information officer from NOAA in the DC area has heard many complaints from local and regional offices about that warm bias. 

El Ninos come in more than one flavor. El Ninos displaced towards the central tropical Pacific. Are cold to very cold here in the east.  We told our clients this will be one of the cold ones like the ones in 1968/69, 1976/77, 1977/78, 1993/94, 2002/03, 2003/04, 2009/10.  Because of some of the other factors, there will be a period of four to six weeks of intense cold midwinter.

Snow will fall in the east this weekend! Snow will be heavy into February in much of the country.  But fortunately, most of the similar years had winter end early. When the snow melts in March, milder weather follows in March and April. We all will be ready for it. Meanwhile prepare for the worst.

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Friday, October 17, 2014

Bus Driver Organizes Black Mob Violence Against White Family (American Thinker)

 

By Colin Flaherty

Some stories you have to read 10 times before deciding: ’Yes: What I thought was too crazy is really true.’

This is one of those stories. Here goes, believe it or not:

A black Baltimore bus driver organized a mob of 20 black people to assault a white family of three on her bus, which they did with gusto and pepper spray. All the while, the other black passengers hooted and hollered in encouragement.

All while the bus driver waited for the beating to finish so the attackers could get back on the bus. With her thanks.

The bus company didn’t give a darnn. And it took Baltimore police two months before they even investigated it.

If you want to reread that another ten times, go ahead. I’ll wait.

More details from WBAL TV that somehow escaped the attention of the Baltimore Sun. (Which means either this happens all the time and is not newsworthy. Or the paper has an embargo on news about large scale black mob violence. Or both.)

It happened in June: A Baltimore couple was escorting their 9-year old son home from school on the city bus. The bus was crowded, so the driver asked the family to move to the back. They said they could not. There was no room. That is when the driver started yelling at them. From WBAL TV news:

“If you would have gotten your (expletive) off you wouldn't be having these problems,” the bus driver told the family.  “You better watch the way you're talking to me.… Come up here and I'll show you what I'll do. You better get your ass way back there in the back.”

Eventually, the driver confronted her white passengers, said the mother of the family:

"She got out of her seat belt, stood up screaming in both of our faces, 'Don't tell me how to do my job. If you have a problem, come across this line and I'll knock you the F out.’”   

At that point, other black passengers started yelling for the bus driver to remove the white family from the bus. One of passengers urged the bus driver to use her phone and “call them up.” The family would soon find out who “them” was:

“Two bus stops later, (the victim) said a large number of Mergenthaler Vo-Tech and Academy for College and Career Exploration students boarded the bus.”

The victims were standing next to the bus driver and they heard her tell the newly-boarded students: “I don’t care where they get off. You handle that (Bleep) and I’ll take care of you. I’ll wait for you.”

Soon after, the family of three left the bus, along with the 20 black students who had just boarded it.

They beat and pepper-sprayed all three members of the family, choking and banging their heads on the ground -- all while the bus driver waited and watched. All while some of the students got on and off the bus.

"I was really scared," the 9-year-old victim told 11 News. “He said he tried to defend his mother but couldn't. "I tried to get the girl that was beating her up off of her, and she turned around and pepper-sprayed me."

Charging documents show the bus driver watched the assault and yelled several times, "Yeah, that's what you get." After the teens were finished with the beating, they got back on the bus, and the bus drove away, offering the victims no assistance, police said.

Murphy is awaiting a November trial. Eight students were also arrested.

The Baltimore Sun said this is the second recent example of a bus driver assisting people who assault riders.

Now you can go back to your real life, where bus drivers do not organize black mob violence against white families. Except for when they do.

Some stories you have to read 10 times before deciding: ’Yes: What I thought was too crazy is really true.’

This is one of those stories. Here goes, believe it or not:

A black Baltimore bus driver organized a mob of 20 black people to assault a white family of three on her bus, which they did with gusto and pepper spray. All the while, the other black passengers hooted and hollered in encouragement.

All while the bus driver waited for the beating to finish so the attackers could get back on the bus. With her thanks.

The bus company didn’t give a darnn. And it took Baltimore police two months before they even investigated it.

If you want to reread that another ten times, go ahead. I’ll wait.

More details from WBAL TV that somehow escaped the attention of the Baltimore Sun. (Which means either this happens all the time and is not newsworthy. Or the paper has an embargo on news about large scale black mob violence. Or both.)

It happened in June: A Baltimore couple was escorting their 9-year old son home from school on the city bus. The bus was crowded, so the driver asked the family to move to the back. They said they could not. There was no room. That is when the driver started yelling at them. From WBAL TV news:

“If you would have gotten your (expletive) off you wouldn't be having these problems,” the bus driver told the family.  “You better watch the way you're talking to me.… Come up here and I'll show you what I'll do. You better get your ass way back there in the back.”

Eventually, the driver confronted her white passengers, said the mother of the family:

"She got out of her seat belt, stood up screaming in both of our faces, 'Don't tell me how to do my job. If you have a problem, come across this line and I'll knock you the F out.’”   

At that point, other black passengers started yelling for the bus driver to remove the white family from the bus. One of passengers urged the bus driver to use her phone and “call them up.” The family would soon find out who “them” was:

“Two bus stops later, (the victim) said a large number of Mergenthaler Vo-Tech and Academy for College and Career Exploration students boarded the bus.”

The victims were standing next to the bus driver and they heard her tell the newly-boarded students: “I don’t care where they get off. You handle that (Bleep) and I’ll take care of you. I’ll wait for you.”

Soon after, the family of three left the bus, along with the 20 black students who had just boarded it.

They beat and pepper-sprayed all three members of the family, choking and banging their heads on the ground -- all while the bus driver waited and watched. All while some of the students got on and off the bus.

"I was really scared," the 9-year-old victim told 11 News. “He said he tried to defend his mother but couldn't. "I tried to get the girl that was beating her up off of her, and she turned around and pepper-sprayed me."

Charging documents show the bus driver watched the assault and yelled several times, "Yeah, that's what you get." After the teens were finished with the beating, they got back on the bus, and the bus drove away, offering the victims no assistance, police said.

Murphy is awaiting a November trial. Eight students were also arrested.

The Baltimore Sun said this is the second recent example of a bus driver assisting people who assault riders.

Now you can go back to your real life, where bus drivers do not organize black mob violence against white families. Except for when they do.

Wednesday, October 15, 2014

Federal Debt Now $200,000 Per Full-Time Private-Sector Worker (US)


Townhall.com ^ | October 15, 2014 | Terry Jeffrey

Posted on ‎10‎/‎15‎/‎2014‎ ‎9‎:‎54‎:‎59‎ ‎AM by Kaslin

Which will be greater: the burden of student debt on Americans who went off this fall to their first year of college, or the amount of federal debt per full-time private-sector worker when these students earn their degrees and start looking for jobs? There is no doubt: It will be the amount of federal debt per full-time private-sector worker.

As of last Friday, the total debt of the federal government was $17,858,480,029,490.28, according to the U.S. Treasury. That equaled $200,258.81 for each of the 89,177,000 full-time private-sector workers that, according to the Census Bureau, were in the United States in 2013.

(There were a total of 105,862,000 full-time workers in the United States in 2013, according to the Census Bureau. However, 16,685,000 of these full-time workers worked for government, getting paid with tax dollars or from government borrowing. That left only 89,177,000 who were self-employed or worked for private-sector employers.)

Federal debt per full-time private-sector worker has escalated rapidly. At the end of 2007, the total federal debt was $9,229,172,659,218.31, which equaled $101,158.25 for each of the 91,235,000 full-time private-sector workers in the United States that year. In 2000, the total federal debt was $5,662,216,013,697.37, which equaled $66,553.23 for each of the 85,078,000 full-time private-sector workers that year.

Since 2000, federal debt per full-time private-sector worker has more than tripled. On average, going to a four-year private college -- and borrowing every single penny of the cost -- will impose a smaller burden on this year's college freshman who ends up graduating and eventually becoming a full-time private-sector worker than will the federal deficit spending that took place per full-time private-sector worker before that young person ever stepped foot, as a matriculating student, on his or her college campus.

According to the College Board, the full price for tuition, fees, room and board at a four-year private college in the 2013-2014 school year averaged $40,917. At that rate, a student who went to a private college for four years would spend an average of about $163,668 for their education -- if they paid full fare.

Thus, the current federal debt per full-time private-sector worker of $200,258.81 exceeds the average four-year cost at a private college by about $36,591.

When this year's college freshmen graduate and get jobs, quite likely the biggest personal expense they will face is buying a home.

So which will be greater: the federal debt per full-time private-sector worker, or buying an existing single-family home?

In the short run, it may be a close call.

In 2013, the median price on an existing single-family home was $197,400, according to the National Association of Realtors. In January, it was $187,900. By August, the latest month for which figures are available, it had risen to $220,600. But single-family homes were less expensive in August in the South and Midwest, where the median prices were $192,000 and $175,000, respectively.

Still, a person putting a 10-percent down payment of $22,060 on a single-family home at the median August price of $220,600 would end up with a mortgage of $198,540. That $198,540 mortgage is less than the $200,258.81 in current federal debt per full-time private-sector worker.

Americans who invest in a college education or a single-family home are not only buying a solid asset that will serve them well for the rest of their lives; they are investing in what we used to consider the American dream.

Americans who get up every morning and go to work, and do it week after week after week, and are forced to pay progressively higher taxes to maintain a federal welfare state that is driving our national debt to an unsustainable level are being forced to subsidize a system that is killing the American dream.

After Central Bank Financial Bubbles, Comes Liquidation And Industrial Deflation (ZeroHedge)

 

 

Submitted by Tyler Durden on 10/14/2014 21:02 -0400

Submitted by David Stockman via Contra Corner blog,

Nearly two decades of central bank financial repression have created huge distortions and imbalances in the world economy. Now they are coming home to roost as the impossibility of ZIRP forever dawns on even our mad money printers. Having created yet another round of ebullient financial bubbles, they are now getting palpably nervous.

Even the lady with the perpetual tan and unfailing call for “moar” monetary and fiscal stimulus, IMF head Christine Lagarde, said something sensible over the weekend:

“There is too little economic risk-taking, and too much financial risk-taking.”

She got the “too much financial risk-taking” part right, but here’s the thing. The apparatus of state policy—-fiscal borrowing and central bank money printing—-can not cause enterprise to flourish. Free market capitalism is the milieu in which business enterprise, invention, risk-taking and labor productivity thrive best. So, yes, reducing market impairments—such as tax rates on production and capital which are too high or regulations, protectionist laws and subsidies which are too onerous—-is always helpful.

These latter steps are now coming into fashion under the heading “structural reform” and they make sense as far as they go. But central bankers like Draghi and international monetary bureaucrats like Lagarde pushing this agenda fail to recognize that their own policies on the fiscal and monetary side currently dwarf the ill-effects of, for instance, over-zealous EPA regulation in the US or protectionist labor laws in Europe.

In fact, long-standing financial repression and absurdly low interest rates have generated malinvestments and debt burdens that are crushing enterprise and true economic risk-taking throughout the world economy. In the DM (developed market economies), the resulting malady is consumer balance sheets that are bloated with debt; and in the EM (emerging markets) the ill takes the form of vastly bloated industrial capacity and public infrastructure. So if there were ever a case of “physician, heal thyself”, this is it.

Indeed, the current spectacle of Europe’s monetary arsonist, Mario Draghi, telling Italy’s most recently installed double-talking politician, Prime Minister Renzi, to change the nation’s labor laws so that employers can more easily fire redundant workers says it all. Of course this should be done—Italy can’t thrive in a global economy based on 1960s communist union theories that were invalidated the moment that the comrades in Beijing swapped Mao’s little red book for the printing presses of red capitalism. Still, the redundant labor and resulting economic inefficiency in Italy’s few remaining large-scale industrial plants is trivial compared to the burden of nearly $3 trillion of public debt—a figure that amounts to 130% of GDP and continues to mount.

Italy Government Debt to GDP

By his ill-considered and undeliverable pledge to do “whatever it takes”, and the phony peripheral bond rally it elicited, Draghi has destroyed any semblance of political will in Italy to tackle its 130% of GDP public debt. Instead, based on the blatant scheming now underway in Italy’s parliament, it is already evident that the “labor reform” that Renzi is talking up amounts to statutory legerdemain that will make almost no difference in the domestic jobs market for years to come. Yet, it will provide the pretext for a return to out-and-out fiscal profligacy in Italy next year—-as Italy’s politicians are already making evident in an openly public manner.

So what’s going on is Keynesian central bankers are looking for a scapegoat, and have found exactly the right word cloud to define it—-that is, “structural reform”.  And the politicians are grabbing the bait, knowing that infinitely malleable enabling acts can be made to sound constructive upon parliamentary approval, even as they permit real policy change to be buried in regulatory wrangling and judicial review for years to come.

At the same time, the politicians’ pound of flesh in this emerging scam is more pork barrel spending and fiscal stimulus in the guise of “public investment”. But the litmus test on that proposition is quite simple: Are the proposed public “investment” projects being funded with higher user fees and taxes or general government borrowing?

It goes without saying that it is the latter. Yet with DM governments at peak public debt ratios nearly everywhere (i.e. 100% of GDP and higher), borrowing even more money to fund public projects which for the most part are not needed, and will not contribute to improved economic efficiency, is a little more than a recipe for higher taxes and more economic stagnation down the road.

So the new consensus coming out of this weekend’s IMF meeting is just a smokescreen.  What ails the global economy can not be remedied by toothless “structural reforms” or wasteful “public investments”. What is urgently needed, instead, is an end to central bank financial repression and rapid return to normalized interest rates and budget surpluses that can pay down unsustainable public debt burdens that have built up over the past few decades.

Yes, that would cause the boys & girls and robo-traders on Wall Street to throw one hellacious hissy fit. But there’s no getting around it. Current money pumping policies by the major central banks are just inflating financial bubbles to ever more treacherous heights, guaranteeing that the eventual day of reckoning will be all the more traumatic.

And yet the central bankers are reluctant to allow interest rates to escape from the zero bound and begin their flight upward toward “normalization” because they are wedded to the Keynesian fallacy that a weak economy is evidence of insufficient “aggregate demand”. Therefore, monetary “accommodation”—even when it reaches the lunatic extent of recent years— is purportedly needed to goose households and businesses into more spending.

In the DM world, however, the credit transmission channel of monetary policy is broken and done.  Real interest rates for maturities up to five years have been negative in real terms for most of this century. Not surprisingly, main street households have smothered themselves in debt, and have thereby, ironically, reduced the efficacy of Keynesian stimulus policies practically to zero.

The reason is that during the decades after the demise of Bretton Woods in 1971, public and private balance sheets were consistently and drastically levered-up on a one-time basis. The resulting credit-fueled consumption binge in DM economies added to measured GDP, but not to true, sustainable wealth gains. It was a one-time parlor trick that has now left them with contractually fixed public and private debts ranging from 350-500% of GDP—– off-set by stagnant incomes and unsustainable mark-to-market asset values that are vastly inflated by the long years of bubble finance.

So the DM world has now reached the limits of “peak debt”, even with the ZIRP enabled ultra-low “carry” cost on these towering obligations. In this regard, the US and Spanish ratio patterns are typical. But in either case, Keynesian monetary stimulus is simply pushing on a string, as is reflected by slowly falling debt ratios since the 2007-2008 peak.

Stated differently, there has been no escape velocity owing to Keynesian stimulus. Massive central bank liquidity injections have remained in the canyons of Wall Street and other major financial markets where they have enabled endless free money funding of speculation and carry trades, but have contributed virtually nothing to spending by debt-saturated main street households.

Household Leverage Ratio - Click to enlarge.

At the same time, central bank financial repression has made capital inordinately cheap and has thereby caused fantastic over-investment in the EM world. The current disastrous overcapacity in China’s steel industry is a case in point. Between the year 2000 and 2010 its steel industry grew from 150 million tons of annual capacity to 750 million tons—a rate of heavy industry growth never before witnessed anywhere.

Yet as shown below, the flood of cheap money from the Peoples’ Printing Press of China in response to the Great Recession only stimulated a further round of even more fantastic steel capacity growth.

The 300 million tons or 40% gain since 2010 is a striking measure of the current global derangement. China’s steel capacity expansion in just the last four years exceeds the combined capacity of the entire steel industry of Europe and North America combined. Yet China’s sustainable domestic need is arguably less than 500 million tons per year—once its spree of constructing empty apartment buildings, unpopulated cities, redundant highways, bridges, airports and high speed railroads and unneeded industrial capacity comes to an end—as it surely must and will. Even the comrades in Beijing are signaling a resignation to that unavoidable outcome.

Already, the inevitable collapse is becoming visible. Prices are plunging, inventories are soaring, and profits in the steel industry have virtually disappeared. As detailed in the attached story from Bloomberg, the inexorable consequence will be a flood of cheap exports on the world market.

stel capacity

Indeed, the real problem is that once this immense capacity was brought into being, it was not going to go quietly into the night. China’s true excess capacity now amounts to upwards of 50% of steel production in the rest of the world. Consequently, when China’s domestic consumption is sharply curtailed as the world’s greatest historical building boom winds down, the flow of excess plate and sheet and rebar and structural products into the world steel markets will have a relentless shocking impact. Prices and profits will be crushed everywhere; and protectionist policies not seen since the 1930s are likely to be kindled.

After all, it only need be recalled that 85% of all the growth in global steel production since the year 2000 has been attributable to China. In the rest of the world, steel production during the last 14 years has barely inched forward—growing at just 1.1% per annum owing to a tepid level of end demand. So when the flood of dumped still comes flooding in from China, it is evident that the absorption capacity is next to zero.

And steel is just the most advanced case. A huge wave of industrial deflation is virtually guaranteed in the food chain of materials extraction, production and fabrication.

Today’s Bloomberg story on China’s growing steel industry crisis notes that “China steel now as cheap as cabbage.” Perhaps that is a foretaste of things to come!

In any event, the stunning collapse of steel prices and the soaring inventories of iron ore in China are a reminder that cheap capital artificially provisioned by central banks can lead to an enormous boom of malinvestment. But ultimately the laws of economics will out and a relentless deflationary correction ensues.

It would appear that the global steel industry, among others, is soon to find out about the crack-up part which inexorably follows the boom.

China Iron ore Inventory

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