November 17, 2011

Maxine Waters’ ‘That’s Life’ Reax to OWS Deaths, Violence, and Crime Ignored by AP, NYT

MaxineWaters1111This one’s utterly predictable, but still needs to be noted.

As Edwin Mora at CNS News reported on Wednesday, California Congresswoman Maxine Waters, after a Congressional Progressive Caucus-sponsored event at the Capitol, “when asked to comment … about the deaths and crimes that have occurred around Occupy protests being held across the country, … said ‘that’s life and it happens.’” What’s also happened, or actually not happened, is that the Associated Press and the New York Times have failed to note what Waters said, as shown in the following search results on her first name at AP and on her full name (not in quotes) at the Times:

(more…)

Thank You, Ann Barnhardt; We Need More People With Your Courage

Filed under: Activism,Economy,Taxes & Government — Tom @ 8:35 pm

AnnBlendedAnn Barnhardt, a hedge broker specializing in cattle and grain, is quitting the brokerage portion of her business, and has posted an announcement as to why.

Big deal? Uh, yeah.

I’ve had similar more general conversations with several people along the lines Ann follows in her announcement over the past several months (really, upon reflection, including relatives, over the past year). These discussions obviously pre-dated what Ann saw as the point which dictated her exit. I’ve never articulated my thoughts on the situation here at BizzyBlog because, as a non-trader and non-insider who doesn’t closely follow the day-to-day ebb and flow of the markets, I’m not in a position to prove them or to know that I’m interpreting matters properly. Ms. Barnhardt is.

That’s why what follows is a big, big deal (link is to her blog’s home page, as Ann doesn’t have permalinks; excerpted heavily because of the importance of her assertions; HTs to Zero Hedge and Rush Limbaugh):

Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,

It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.

The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.

The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.

Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.

I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.

… And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.

Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.

To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. … my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.

As for me, I can only echo the words of David:
“This is the Lord’s doing; and it is wonderful in our eyes.”

My contention is that the extent of the lawlessness goes far beyond the futures markets. Though there were obviously several decades of missteps and craven political calculations which led to it, I insist that the final of three key tipping points of the financial system’s credibility occurred on October 14, 2008, when Hank Paulson put a figurative gun to the heads of the CEOs of the nation’s largest banks, and — utterly without any legal authority, i.e., lawlessly — forced them to “accept” partial ownership and “temporary” de facto control of their firms.

In that same general time frame, the Federal Reserve, in this case secretly and again utterly without any authority, began engaging in massive transfers of funds to troubled domestic and overseas entities, while Fannie Mae and Freddie Mac’s implosions exposed how the two government-sponsored frauds-by-design systematically lied about the quality of the mortgages underlying the securities they issued and the loans they kept on their own books to the combined tune of likely trillions of dollars. No one involved, or at least no one involved at a sufficiently high level, has done hard time.

We began heading down the road Ann cited three-plus years ago when Fan and Fred collapsed without personal consequences for anyone, when Ben Bernanke turned the Fed into the world’s discount window, and finally when Hank Paulson formally announced the beginning of the government’s tyranny over the private portion of the banking system. Note well that all of this took place under cover of the final two months of a presidential election campaign, when apparently no one is allowed to object to anything lest they be accused — perish the thought! — of “politicizing” matters. Now, barring a sea change, it appears that someone who gambled away hundreds of millions of dollars which weren’t his won’t face consequences, while those whose funds were looted are becoming victims of system-enabled theft.

Ms. Barnhardt doesn’t understand how in good conscience one can confidently invest other people’s money, or make recommendations to people as to how they should invest their own money, in what have become lawless financial markets. Neither do I. People who wish to invest on their own are obviously free to try their luck, and of course some will do well. Others won’t. But please, let’s not have anyone kid themselves. In a lawless market, if you do well, it’s because you got lucky, not because you were smart — unless your definition of “smart” includes keeping your head down and not getting noticed, or joining the morally bankrupt cronyism game yourself.

Thank you, Ann Barnhardt. How many other financial advisers, planners, and “market” participants who know the truth are going to have the courage to stop playing along?

Y’know Ann, there’s an Oval Office in Washington which could really, really use a morally grounded occupant — or a reliable, reform-minded Treasury Secretary.

Initial Unemployment Claims: 388K SA, 360 NSA; More Slow ‘Improvement’

Filed under: Economy,Taxes & Government — Tom @ 9:03 am

From the Department of Labor:

In the week ending November 12, the advance figure for seasonally adjusted initial claims was 388,000, a decrease of 5,000 from the previous week’s revised figure of 393,000. The 4-week moving average was 396,750, a decrease of 4,000 from the previous week’s revised average of 400,750. …

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 360,139 in the week ending November 12, a decrease of 42,355 from the previous week. There were 409,548 initial claims in the comparable week in 2010.

Business Insider’s email predicted 395K, as did Reuters and Bloomberg.

So we have a 7-month low, a four-week average below 400K (and it will almost definitely stay there, even after next week’s virtually inevitable upward revision), and more slow “progress.” The word is in quotes because after almost 3-1/2 years of the POR (Pelosi-Obama-Reid) Economy, it’s worth asking whether the numerical comedown is due to genuine if slight improvement, or if employers are beginning to run out of people to let go who would are legally eligible for unemployment compensation.

There hasn’t been a period of such sustained high weekly claims numbers since World War II, so the skepticism is not at all out of order. We’ll just have to wait and see if declining claims really lead to legitimate declines in unemployment (i.e., both as regularly measured and fully-loaded) and to significant increases in employment in the next few months’ Employment Situation reports.

Econo-Misery, and Three Econo-Myths

PJmediaPopListing111611“It’s not so bad” media and leftist memes for the coming miserable year.

_____________________

Note: This column went up at PJ Media and was teased here at BizzyBlog on Tuesday. Many thanks to BizzyBlog and other readers who, as seen at the right, kept it at the top of PJM’s “Most Popular” list nearly 40 hours after it initially appeared (12:03 a.m. PT on Nov. 15). Update: It actually stayed at the top for several more hours. Thx to all.

_____________________

“It’s one thing to fall into a ditch. Quite another to paint and decorate the ditch and call it home.”

– Rich Karlgaard at Forbes.com, November 2

Private and government forecasters are conceding that the economy is in a funk and won’t improve much next year. The Federal Reserve’s most recent predictions are that economic growth in 2012 will be 2.5% – 2.9%, and that unemployment will still be above 8.5% at year’s end.

I would add: “If we’re lucky.”

Two observations put all of this into perspective:

  • We are still in the midst of the worst post-World War II “recovery” — and you can barely call it that — on record. As Investor’s Business Daily pointed out in August, in every post-war downturn until the most recent recession, the economy’s output got back to where it was before the downturn began in three or fewer quarters. This time, we didn’t get over that hump for nine quarters. That’s three times longer than any other recovery since the Great Depression. Oh, and I almost forgot: The private sector is still smaller than it was at the end of 2007.
  • Until Team Obama occupied the White House, the longest string of months during which the seasonally adjusted unemployment rate was greater than 8.5% was 22, from January 1982 until October 1983. We’re now at 32 months and counting. If the Fed’s prediction above is correct, the streak will be at 44 on Election Day next year, doubling the previous record. Primarily because of misguided Keynesianism on steroids, millions of the long-term unemployed, in many instances despite their best efforts, are seeing their skills diminish. Because the pace of technological change is so much faster now than it was during the 1930s Depression Era, we are arguably witnessing the greatest destruction of human capital in U.S. history.

Welcome to Rich Karlgaard’s ditch — except that it’s not your normal two-sided affair. While we could with luck eventually climb out on the right side, to the left there is only a steep cliff. Additionally, any number of possible earthquakes from, say, Europe, bankrupt U.S. cities, or elsewhere could bring the whole thing crashing down at any time.

Sadly, none of this matters to President Obama, his apparatchiks, or his establishment press propagandists nearly as much as their virtually all-consuming goal of achieving his reelection. That is why you can expect any number of expectations-diminishing characterizations of the economy — de facto ditch painting and ditch decorating — to emanate from the White House and to be dutifully repeated in the media between now and November 6, 2012. What follows are just three of them.

1. It’s unrealistic to expect economic growth of 4% or more.

Gosh, the last time I heard this one was during the late 1970s, when — imagine that — a failing first-term Democrat was in the White House. “Somehow,” after emerging from the ugly recession brought on by Jimmy Carter’s high-inflation, high-interest rate disaster, economic growth under Ronald Reagan averaged 4.4% per year from 1983 to 1988. In the first six quarters after the Carter-driven recession officially ended, annualized growth averaged over 6-1/2%.

Given the amount of underutilized though increasingly skills-deficient labor and the abundant fossil-fuel resources available if only the governmental willpower existed to allow us to go get them, growth of greater than 4% is not out of the question; in fact, it’s inexcusable that we’re not achieving it right now.

But there’s another key element of economic holdback about which the government and the press remain in denial.

2. Regulations really aren’t that excessive — and besides, they don’t cause jobs losses.

This is a real craw-sticker. At least twice recently, Christopher Rugaber at the Associated Press, which really ought to end the pretense and rename itself “The Administration’s Press,” has criticized candidate assertions during the Republican debates about how regulations are killing jobs. Rugaber’s most risible claim:

… Labor Department data show that few companies where large layoffs occur say government regulation was the reason. Just two-tenths of 1 percent of layoffs since Obama took office have been due to government regulation, the data show.

One hardly knows where to begin. Here are just a few of many valid counterarguments:

  • Companies usually cite multiple reasons for layoffs and plant closures, and sometimes don’t mention regulations at all, even if they’re relevant. Take two paper company closures occurring in Hamilton, Ohio, just north of Cincinnati, during the past month. One company, in announcing 237 layoffs, cited “competition from Asia, rising costs of raw materials and uncertainty surrounding new federal pollution rules.” Is this one part of Chris’s 0.2%, or does it not count because the “pollution rules” weren’t mentioned first? Clearly, regs were relevant. The second company is terminating 133 jobs and will “transition manufacturing” to mills in another state. The coverage of their announcement doesn’t say a word about regulations, but since the second company’s plant is similar in age to the first company’s, pollution regs were also probably relevant there. Yet it won’t count in Chris’s calculations.
  • Looking only at large layoffs is an obviously incomplete procedure. Small layoffs tend to happen at smaller enterprises, may affect more employees in total, and are more likely to occur due to increased regulatory costs.
  • There are two well-known recent examples of regulations killing jobs that don’t directly involve layoffs. The Obama administration’s regulatory slowdown of Gulf of Mexico deep-water drilling permit approvals in the wake of last year’s BP oil spill is preventing over 10,000 people from getting back to work and causing some rigs to move, permanently ending related job opportunities. The Washington Examiner recently reported that a lawyer at the National Labor Relations Board, which regulates union-worker matters, was “joking” in an email “that the NLRB’s suit against Boeing would kill jobs in South Carolina” — potentially about 4,000 of them. Is that in your numbers, Chris?
  • As I noted in October, “laying a worker off is not the only way to ‘kill’ a job,” as Rugaber would seemingly have us believe. Regulatory burdens can and do cause companies to reduce their workforces through attrition, not replacing those who retire, deciding to manufacture new products overseas instead of domestically, and hiring temps, seasonal, or part-time workers instead of full-timers.

3. The flat economy is hurting government employees, while the private sector is doing okay.

This claim was made by Harry Reid and dutifully regurgitated a short time later by Tom Raum at the AP in October. Seasonally adjusted public-sector employment didn’t stop growing until May 2009, the month before the recession ended. Federal non-postal employment has increased by 130,000 since Obama took office. The private sector, while gaining over 2.7 million jobs since the beginning of 2009, is still down by over 6 million jobs from its pre-recession peak, and is at the same level it was in the spring of 2004. By comparison, state and local government employment, both of which grew too much during the past decade and stayed artificially high through the recession, are back to where they were in early 2006. There’s no reasonable doubt that the greater pain by far is still in the private sector.

The White House and Congress should be doing everything they can to get the private sector fully back on its feet. But they’re not. That’s because the administration’s and congressional Democrats’ aim, as evidenced in Dodd-Frank, ObamaCare, and so many other legal and regulatory matters, is to permanently make the government a bigger and ever more intrusive part of the economy and every citizen’s daily life. That, dear readers, is not a myth.

Thursday Off-Topic (Moderated) Open Thread (111711)

Filed under: Lucid Links — Tom @ 7:25 am

Rules are here. Possible comment fodder follows. Other topics are also fair game.

____________________________________________

Obama-endorsed (proof herehere, and hereOccupy Update:

  • New York (HT JWF) — “At Zuccotti Square members of the press now outnumber protesters.”
  • At National Review — “The OWS Legal Team; The radical lawyers who sought to bring occupiers back to Zuccotti Park.”
  • Zombie at PJ Media“Occupy Cal time-travels back to the ’60s.” Sad, pathetic, funny, and infuriating all at once.
  • New York (HT John at Powerline, whose title I am using) — “Why Zuccotti Park Needed to Be Cleaned Up.” A tasty sampler of reasons: “the park became a firetrap,” scabies, lice, lung ailments, dirty hypodermic needles, moldy food, “a sealed pickle bucket which … (cleanup crews) suspected was filled with human waste” … Had enough yet?
  • BigGovernment.com is carrying an Accuracy In Media video (“Union PAYS #Occupy Protesters”). AIM “infiltrated the National Nurses United for the duration of their Occupy DC protest tour. As the footage reveals, NNU in association with the AFL-CIO sent over 1,000 nurses from across the country, public and private sector, all expenses paid (to Occupy sites).”
  • New York (HT Atlas Shrugs) — “Angry mother of EMT injured during Zuccotti Park raid praises crackdown.”
  • Cincinnati: “Rev. Jesse Jackson rallies Occupy Cincinnati protesters.” Thanks to Jackson’s “inspiration,” Cincinnati police “arrested 15 Occupy Cincinnati protesters at Piatt Park early Wednesday.” In case they care, these arrests, assuming the justice system does its job (unfortunately doubtful) will show up in criminal background checks done during reviews of employment applications, and could keep many of those who were “inspired” from getting the good jobs they supposedly desire. Thanks, Jesse.
  • Speaking of background checks (HT OWS Exposed), “Man Arrested For Child Porn ‘No Longer Welcome’ At Occupy Chicago.” This of course implies that he once was welcome. He says he was involved with Occupy security, which of course the Occupiers deny. Do your homework, people.

____________________________________________

Today’s Occupy Mayhem Update is in a separate segment because it is sponsored by California Congresswoman Maxine Waters.

Just three months ago, Waters told a Los Angeles audience that “The Tea Party can go to hell.”

CNS News (HTs to PJ Tatler; Hot Air) reports that on Wednesday Waters, after a Congressional Progressive Caucus-sponsored event at the Capitol, “when asked to comment Wednesday about the deaths and crimes that have occurred around Occupy protests being held across the country, … said ‘that’s life and it happens.’”

Ms. Waters will therefore not object to yours truly informing readers that as of early this morning:

  • According to OWSexposed.com, the Occupy “That’s Life” death toll remains at 7.
  • At BigJournalism.com, John Nolte’s incomplete but nevertheless useful “It Happens” incident count stands at 256.

The Democratic Party — Barack Obama, Nancy Pelosi, Harry Reid, and its politicians — all own the Occupy movement, and it’s far too late for them to even think about walking it back, no matter what happens at today’s Day of Occupation “events” and in future “Occupy” efforts.

Too bad, so sad Update (“Tweets, e-mails, phone calls and texts keep OWS strong”; HT JWF) — “The key people are in jail, that’s kind of the tough thing.”

____________________________________________

Needed reinforcement of an important point made here ten days ago: “Public school teachers aren’t underpaid.”

____________________________________________

At the Epoch Times (HT Breaking Economics via commenter dscott) — “Chinese TV Host Says Regime Nearly Bankrupt.” Specifically, “Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis—on the brink of bankruptcy. In his memorable formulation: every province in China is Greece.”

____________________________________________

Also via commenter dscott, at Infowars“MF Global Looted Customers’ Accounts Via Internal Bank Run.” Specifically, “Days before the doomed financial broker filed for bankruptcy, MF Global conducted ‘unexplained wire transfers’ that led to a $900 million shortfall in client funds, leading customers like Gerald Celente to learn that their accounts had been looted and setting the precedent for internal bank runs as more big firms go bust.” Meanwhile, Paul Joseph Watson alleges that “Big players got warning ahead of time that financial broker was set to collapse.” Related: “Gerald Celente’s gold account was emptied by MF Global.”

Positivity: Pope will use iPad to light up world’s largest Christmas tree

Filed under: Positivity — Tom @ 5:59 am

From Vatican City:

Nov 16, 2011 / 02:37 pm

Pope Benedict XVI will light up the largest Christmas tree in the world on Dec. 7 located in the Italian city of Gubbio in the region of Umbria.

Vatican Radio radio reported that the Pope will use an iPad to turn on the tree’s lights from his residence in the Papal Apartments.

Built in 1981, the Christmas tree stretches more than 2,000 feet up the face of Mount Igino outside Gubbio. It contains hundreds of lights and more than 25,000 feet of electrical cables and is considered the largest electric tree in the world according to the Guinness Book of World Records.

Go here for the rest of the story.