SAR #9150/Weekender

"Liberty is not the power of doing what we like,

but the right to do what we ought."

Lord Acton

Click Your Heels: US GDP fell 5.7% in the latest quarter, a slight bit better than the previously reported 6.1%. Do you think Noah cared whether it rained 6 inches or only 5 3/4 on any given day?

Chicken/Egg? "Dollar falls to 5-month low" and "Oil rises to new six-month high."

If Nominated... David Petraeus, Bush's favorite general and current head of US Central Command, admits that under Bush, the US "violated the Geneva Conventions." This will not endear him to the Limbaugh/Cheney wing of the GOP.

Tightrope: Energy prices are prompting inflation concerns - as is the Treasury, flooding the market with bonds. The resulting rise in long term rates - especially mortgage rates - has enormous negative consequences for the housing market and thus for any hope for a recovery.

Details: The US complains that the Chinese are manipulating the value of the yuan. The clever orientals are doing this by buying US Treasuries. So the US wants they should stop?

On Being Prepared: Buy printers, ink & paper; inflation protection.

Fine Print: The headlines blather that the Arctic may hold twice the oil previously found there. Sounds like a big deal until you note that "previously" (USGS) was 90 billion barrels and this time the estimate is 40 to 160 bn bbls. So the Arctic may hold less than half that previously claimed. If they are ever actually found. But that doesn't sell the papers. Nothing does, anymore.

Keep off the Grass: Forget the headlines. Forget green shoots. New houses sold at a SAAR of 352,000 - 34% below April 2008. All the rest of the comparisons are lost in statistical noise.

Here Comes CMBS: S&P suggests that 25%, 60%, and 90% of the very best of the 2005, 06, and 07 vintage Commercial Mortgage Backed Securities (CMBS) will be downgraded to "less than wonderful." Geithner is getting a plan ready.

Danger of Inflation? Who you gonna believe, Paul Krugman or your lying eyes?

Boogeyman: The wingnuts are out to save your freedoms. Not by repealing the Patriot Act, which is a good idea whose time will never come, but by warning you that the EPA will be regulating your life from now on. And it's all the Sierra Club's fault. Strict controls on emissions, higher electric rates, bans on driving you car to Wal-Mart. Mandatory use of paper, not plastic. Fear all change!

True Or False: "A sufficiently-determined central bank can repeal the laws of mathematics!"

Star Wars: The Pentagon is unilaterally invading cyberspace and setting up a new military command for both offensive and defensive computer warfare. The innocent have nothing to fear.

Sideshow: Good News: The subprime crisis may be over. Bad News: The mortgage crisis is not. Foreclosures break another record! Charts, graphs, free popcorn!

Advise and Consent: "Let’s hope that the key conferences aren’t when she (Sotomayor) is menstruating or something, or just before she’s going to menstruate," Liddy said. "That would really be bad. Lord knows what we would get then." Newt says that Sotomayor is such a threat to America that her nomination should not come to a vote in the Senate. Rush, as head of the wing-nut faction of the GOP, confines himself to calling Judge Sotomayor "a racist."

Pelican: Much like the bird with the big beak, US consumers may be confident but that doesn't mean they can actually swallow any more debt.

Early Worm: Getting a head start on the hurricane season - official start is June 1st - National Hurricane Center reported that it is currently tracking its first storm -- an unnamed tropical depression -- for 2009. Way off Cape Cod and headed northeast.

Blow Hards: A variety of government programs and subsidies to the renewable energy programs are succeding - at least in Texas - to the point that there's too much power being generated and it's driving down the price of electricity. Darn.

Mortgage Insurance: Perhaps things could be better if the government worked for the people and not for the Usual Suspects. Like in Marinaleda, Spain.

Greed, Incorporated: The Treasury's PPIP is designed to subsidize private investors to get them to buy toxic assets from the banks. The banks say they are private investors and want the taxpayers to subsidize their buying their own 'legacy loans' from themselves.

Porn O'Graph: Bad moon rising.

SAR #9149

Before investing for the future, try to figure out which future.

Asked & Answered: "Was Rape an Enhanced Interrogation Technique?" Yes, and there are pictures....

Leadership: Former GOP Speaker of the House Newt Gingrich, in a display of the qualities he is remembered for, Twittered one and all regarding Judge Sotomayor: "White man racist nominee would be forced to withdraw. Latina woman racist should also withdraw." Unfortunately he was limited to 140 character assassinations characters.

Tsunami II: Warning, Plot Spoiler: A wave of foreclosures at least as big as the original inundation is headed this way. Option ARMs will come crashing down in 2010, 2011 and 2012.

Juvenile Prime Delinquents: Prime rate mortgages make up 53% of new foreclosures, while the delinquency rate has jumped to 9.12%.

Smile: The UK is expanding its already extensive CCTV camera/computer network with the goal of automatically logging every car's license plate as it passes any of thousands of checkpoints. "Innocent people have nothing to fear from the way we use it," say police administrators.

Elixir: Discerning readers will note that Louis - friend, co-conspirator and editor - is back at his oar. Only the one. A bit more diet Dr. Pepper and we'll let him have both, but for now he's not to touch split infinitives or puns.

Memory Lane: The past is prologue. Next time, the pictures will be digital and in color, but the banknotes just as worthless.

Green Zone II : Obama's devotion to Bush's wars can be measured by his new billion dollar embassy building plans for Islamabad and Kabul. "If you build it, they will come stay."

Baskervilles: In 2008, 140 muni bond issuers defaulted on a record $7.6 billion. So far this year, only 16 municipal issuers have failed to make payments on $426 million in bonds. Spooky, huh?

Growth Industry: Washington says that absent stiff mandatory limits on CO2 emissions, the amount of CO2 dumped into the air will increase by 40% by 2030. In that limiting carbon emissions means decreasing economic output, and that those who profit most from killing the planet give the most to politicians, we're toast.

Destiny: In response to warnings that "the world's destiny" depends on quick and drastic reductions in greenhouse gas emissions, the US is now planning to reduce CO2 emissions by 3% below 1990 levels by 2020.

Asked and Answered: "Why Do Republicans Oppose Sotomayor?" It's what they do.

Flash in the Pan: We have an abundance of natural resources - as long as we are supplied with abundant cheap energy, mainly petroleum, to dig 'em out, transport, refine and transform them. Absent the cheap energy, there are a lot of scarcities waiting to show up.

The Sting Redux: The confidence game known as bailout is but a fleecing of the American taxpayer to benefit the few. It does not star Paul Newman, and Geithner is in a supporting role.

We Are Screwed: Predictions generally become amusingly irrelevant soon after utterance. Here's a look at the US as it becomes a banana republic with nuclear weapons sometime between next week and reset day. The current Wall Street/Washington attempt to keep the game going at all costs will eventually consume all costs and then be consumed. Not that any of these predictions will happen, but what if?

Change You Can Believe: Despite efforts by the administration and GM bondholders and GM management, the UAW pension plan will not be gutted to save investors.

Porn O'Grpah: Net Worthlessness.

SAR #9148

Iraq - where we have too much to lose if we leave,

and too much to lose if we stay.

Better Late Than... Ten mayors and 17 other high-ranking officials, including an aide to the governor of Michoacan, have been arrested on drug-trafficking charges. President Calderon was shocked. Shocked.

Credit Where It's Overdue: JP Morgan claims credit card losses at subsidiary WaMu may reach 24%. But is someone playing games with the numbers?

Economists Say Recovery Sighted... Just think how high the Dow would go if the US lost only 500,000 jobs a month. Or if houses lost only 12% y/y in value, instead of 18.7%. Or if home-owner's equity melted away at only $250 billion a month instead of $400 billion. What a wonderful world it would be...

Downer: US Army Chief of Staff General George Casey (to give credit where credit is due), says the Pentagon is prepared to occupy Iraq for another ten years. A SOFA is something to sit on.

Fraternal Twins: The US economy and the US stock market are two entirely different creatures living more or less under the same roof. Stocks are looking up, the economy is not.

Hide In Plain Sight: Banks are keeping 70% of REO houses - perhaps half a million - off the market. In addition, some 15+ million homeowners would like to sell their houses "if the market improves." These inventories should keep housing prices depressed for years.

Interesting: The ongoing rise in Treasury yields threatens both the stock market and whatever stirring of recovery are abroad in the land. The tightrope walk begins.

Skinny Dipping: If the melt-rate of Greenland's ice sheet keeps increasing at 7% a year - as it has for the last decade - sea levels along North America's Atlantic coast will raise by 12 to 20 inches more than the overall increase in sea levels worldwide.

Either/Or: A new report claims a new oil price shock is inevitable and could come as early as 2010 or as late as 2013. Others see it differently.

Rinse Cycle: The US may be 'surging' troops into Afghanistan, but they'll be playing catch-up. The Taliban has become the effective government in much of northern Afghanistan. Among other signs of their control is the disbandment of schools for girls - at least 10 have shut down in the Kunduz area alone. The Taliban are certainly despicable to civilized eyes, but they are winning.

Well, Duh? Some are just now realizing that people with underwater mortgages on unsaleable homes that are losing value aren't out shopping for a bigger, more expensive place. Soon they'll begin to suspect that "moving-up" has moved out.

Matchbox Collection: When I was a kid I collected matchbox replicas of famous cars. Now, as a taxpayer, I'm collecting the companies that made those classic cars.

Shocking Stockings: Those elasticized stockings they make you wear in the hospital, the ones that are supposed to prevent blood clots - don't. At least not when given to stroke patients to prevent clot formation.

If/Then : In a shocking turn of events, the IRS acknowledged that tax revenue has fallen right along with taxpayer income. Revenue is down 34% in April, y/y. You can work out the rest.

Spin Cycle: NAR reports that existing single family home sales were down 2.8% y/y and median sales price dropped 15% y/y. Their spin: "Existing-home sales rose in April with strong buyer activity in lower price ranges..."

Plug-Ins: Tesla only builds electric cars and builds the only true "highway" electric. They go for $140,000 a copy. The future is not what it used to be.

Whitewash: Energy Secretary Chu says that if we paint the roof and driveway white, we can keep on polluting the skies with CO2. Or something like that. This will work best if - along with the whitewash - we become vegetarians, have fewer kids, consume less, use mass transit and walk to work.

Porn O'Graph: The Bear went over the mountain.

SAR #9147

What's better, shattered dreams or shattered lives?

Ilargi

The First Cut Is the Deepest: State after state, needing to reduce their deficit-laden budgets, turn first to cutting spending on education, employee healthcare, pensions, and eliminating public health support, Illinois is even cutting state troopers. This is what comes from the GOP Starve the Beast campaign. Are states cutting here in order to get Congress to bail them out? Welcome to the twilight zone.

What Caused This Rally? Big boost in consumer confidence drives up the market even though housing continues to drop and oil options suggest a further fall in prices as the economy slows. Really, all I want is a believable explanation.

Misprint: The GOP is accusing Obama of thinking the Supreme Court should "protect people who may be vulnerable in the political process." They also suspect the nominee will erode the property rights of the unborn or something like that...

Who Ya Gonna Trust? The same bunch that did not have a clue that there was a housing bubble, or that the credit scheme supporting it would crumble and destroy the economy, now are absolutely, positively, 110% sure the recession will end this fall. October 17th is the predicted date.

Cliff Notes: House prices continue to fall at a 19% y/y rate and will eventually drop 40% or more from the peak (down 30% now). Prices are falling about in line with the bank stress-test 'worst case' scenario. Nation-wide the median nominal price is about $140,000.

There Goes the Sun: The economy is doing in the sunshine business. Suntech Power - the world's largest maker of solar-power modules - reports 1Q profits fell 96% on reduced demand. A planed expansion of module production has been delayed. “Solar demand dried up.”

Vive La Difference: Accepted more or less as a religion in the US, in France Scientology is accused of being a money-making scam. Just how this disqualifies it as a religion is not clear.

Halloween Part II Between November and February, delinquent, in foreclosure and/or REO prime mortgages increased by 473,000, Alt-A mortgages increased 159,000 and subprime increased 14,000 - in total the three categories jumped 60% in dollar terms, to $717 billion, on which losses are expected to be over $300 billion. Then we can start talking about the derivatives and tranches and such that will fail...

Leg Up: A little help, please: Yesterday a CSMonitor article cited "some indications that the Obama administration may have leaned on banks not to release the entire foreclosure inventory at once..." Anybody got an original source for this?

Deceptive Advertising: Send me your poor.. it says on the plaque. Just as long as they don't vote and don't expect to get their fair share of the pie in this ever-more class laden classless society.

Olduvi: Richard Duncan has long claimed that one of the first signs of the end of our current technological civilization will be a decrease in electrical production. I mention this because the International Energy Agency is forecasting a 3.5% drop in electricity demand this year. Russia's demand is set to drop 10%, OECD countries nearly 5% and China about 2%. This is the first decline ever in global electricity supply.

Help Wanted: Why are folks paying any attention to the pundits? Especially the consensus view - whatever that might be? The consensus view missed the housing bubble, the credit bubble, assured us it was 'contained' to the sub-prime sector, and has generally missed every important financial point in the last 20 years.

Down is the New Up: The constant change in nature is astounding. Just now I learned that the natural rate of unemployment in the US economy from henceforth will be 8%, not the silly 5.5% that replaced the earlier 4%. And the new normal for GDP growth will be 2%, not that silly old 3% we'd hoped for.

Bubble? Some Russians put $200 million into Facebook, raising its "valuation" to $10 billion. Where's the value & don't tell me it's in the advertising revenue.

Quoted: "Of all the things to worry about in today’s world, the prospect of Social Security shortfalls several decades from now doesn’t rank high on the list. But there’s a whole generation of Very Serious People who think that worrying about entitlements is how they demonstrate their seriousness — while worrying about climate change is hippy-dippy... declaring that saving the planet is, you know, expensive, so let’s not.

Collector's Corner: Dow 6500 in 6 Months or Less? Where Are The Markets Going? All Indicators Show Down Why We'll Probably See Another Serious Equities Sell-Off Downward Correction Could Be in Store for the Markets

Porn O'Graph: The national case.

SAR #9146

Failing at capitalism does not automatically make one a socialist.

Default Settings: The combination of low wages and high consumption built the massive debt that fueled the bubble. Salvation lies in an equal period of higher wages and lower consumption. Today's prize goes to the reader who can lead us to that promised land of unlikely outcomes.

The Fire Next Time: The overburden of dead and dying trees in the forests of the Northwest - the handiwork of pine bark beetles encouraged by global warming - suggests that massive and prolonged forest fires loom in the near future.

Porn O'Graph: Credit where credit's over-due.

Improbable Event: Some estimate that it will take 17 years for the US to rid itself of its 35% ($12.5 billion) ownership of GMAC. Hands now, how many of you believe this is going to happen?

Un-warranted: Old National Bancorp of Evansville, IN, paid the Treasury $1.2 million to retrieve warrants worth $5.8 million from TARP. How is this fair to the taxpayers?

Where do the Joneses live? Folks in Miami carry an average balance on their credit cards of $9,800 - 22% of their income. Tampa, Los Angeles, Jacksonville and Orlando are all above 16% of their income. Notice a trend here?

Missing the Point: There's a growing debate over the future of personal transportation in the US between plug-in hybrids and fuel cell vehicles. The real debate should start with the conviction that hauling around 3,500 pounds of car to move 200 pounds of people probably isn't the optimum solution.

Suffer the Little Children: Bringing California's budget under control may require completely eliminating the state’s medical insurance for low-income children, the welfare program for families and assistance to college students.

Surrender: Eventually the true cost of money will surface, for if the world is a riskier place, the cost of borrowing should rise. If governments are competing with each other to borrow large amounts of money, its price should rise. Sooner or later interest rates will rise, and the violence of the upheaval will be proportionate to the suppression.

Marks & Markers: The top holders of US debt are: China ($767 bn), Japan ($686 bn) and then it falls rapidly to Russia ($138 bn), the UK ($128 bn).

Menu: Interest on ten-year Treasuries jumped 10% last week to yield 3.45%. By September the Treasury has to sell $900 billion in new bonds. Despite Mr. Bernanke's belief in his ability to hold borrowing rates down, there's a lot of suspicion that the free lunch isn't going to be free. "There isn't enough capital in the world to buy the new sovereign issuance required to finance the giant fiscal deficits that countries are so intent on running."

Failure: California is the 8th largest economy in the world. It should not be having a budgetary crisis. But this not a budgetary crisis, it is a political crisis - California's political system does not work. What’s really alarming is the chance that California’s political problems are a preview of the future for other states and the US as a whole.

Farm Teams: Torture? Not the US. Now the US only provides the intell to enable others to arrest and interrogate mid-level suspects. Oberfeldwebel Schultz is in charge of the operation.

Porn O'Graph: The unemployed don't play the market.

SAR #9145

"E pluribis Unum" has been replaced with "What's in it for me?"

"We are out of money." Barack Obama, May 23, 2009 . Not that it was a surprise to learn the US is broke; we were simply too polite to mention it and hoped it would go away. Not that the US will default, it won't. It will keep paying in dollars of lesser and lesser worth... until something else replaces the dollar.

A Whiter Shade of Pale: Levels of atmospheric methane are rising in the Arctic. Scientists hope it is from some mysterious, unknown source, and not bubbling up from melting permafrost.

Good News, Bad News: The good news is that $1.4 trillion in commercial real estate may not totally collapse. The bad news is that it may.

Reruns: Nearly 60% of voters are against Washington helping the states with their budget problems. Even more - 66% - are against helping California. But the states will be saved - I've seen this movie before.

Investment Science: To charts, hemlines, tips, hunches, greed and unjustifiable optimism as ways to make a fortune on Wall Street, add this one: Sell on the first day of the month. Nonsense, it's all gambling.

Porn O'Graph: All the tea oil in China.

Age & Beauty: The oldest and largest trees in Yosemite Nation Park are dying, done in by global warming. If this is happening in one of the most protected areas in the USA, what's going on down the street from your house?

Risky Behavior: Of kids who get the flu, those who had flu vaccinations are three times as likely to be hospitalized than those who did not.

Scolding: On top of the S&P downgrade, now the IMF is scolding the UK to repair its public finances by "putting public debt on a more firmly downward path faster than envisaged in the 2009 Budget, or face serious shocks" to its already battered economy.

The Heat of the Sun: Ultimately, global warming can be blamed on the sun. But for the last few years the sun has been pretty quiet, which helped keep the temperature increase down. This weakening of the sun's warmth has been overwhelmed by man's CO2 outputs. The sun will eventually regain it's strength and add to the warming of the planet.

Smoke? Mirrors? The Fed plans to keep interest rates near zero until the economy pulls out of the tailspin and begins to recover. At the same time, the Treasury will borrow $2 trillion, which will drive up the cost of money. Do these folks talk to each other?

Facts Not In Evidence: Discussions about how to feed 9+ billion humans come 2050 assume that 9+ billion humans are going to make it to 2050. Maybe the challenge will be smaller.

Simple Truth: How are we going to pay for universal health care? Taxes.

Coming Or Going? The dollars dropping in value, quick run to safety! What's safe? The US dollar. Sounds like a Kafka play.

Porn o"Graph: Going Loonie, again.

SAR 9143/Weekender

If your civilization depends on consumerism,

you don't actually have a civilization.

Be Careful What You Wish For: California's survival requires eliminating or greatly reducing children's health insurance, welfare-to-work programs, children's welfare, mental health services, college loans, state park maintenance and operation and the dismissal of thousands of teachers. "Women and children first" used to have a different meaning.

Walks Like A Duck: Another bunch of fools have been recruited and trained by the FBI to be fall-guys, this time it's blowing up a synagogue and using a single missile to shoot down military aircraft. Today's phrase is 'agent provocateur'. Can you use it in a sentence?

Do-Over: The health insurance folks would like to explain that what they said (at a press conference with Obama) and what they meant (in their mean, tiny hearts) are not quite the same. Instead of actually supporting changes in the system, what they meant to say was they would try to ramp up savings somewhat in the future. Besides, there wasn't a Bible in the room.

Failing State: Mexico's petroleum exports fell 18% last month, to 1.17 mbd. But Mexico also imported 300,000 bpd in gasoline, lowering net exports to only 850,000 bpd. To the lack of oil revenue, add the drop in tourism, the drug wars, the decrease in remittances from the US, the endemic corruption and Mexico looks to be headed for civil unrest and eventual collapse.

Two'fer: China's burgeoning car culture is not only gobbling up petroleum and spewing carbon dioxide - it's also causing immense tracts of forests in SE Asia to be leveled and replanted as rubber plantations to grow tires for all the new cars.

Essentials: There is no actual evidence to support the headline claiming 1 in 7 detainees' had rejoined the jihad on release. In the first place of the original 700 or so probably only 1 in 7 were actually jihadists - the rest were turned in for the reward, picked up by accident and so on. After being tortured and confined in cages for years it is understandable that some might seek revenge. The innocent do act that way. And the "rejoining" some of those 1 in 7 did was to write editorials criticizing US torture. And even the writer of the original story has come to disavow it.

Magic Tricks: The GAO says that mismanagement and a lack of investment in new satellites will lead to failures of the GPS system as early as next year. The first of the replacements was due up in 2007, but has been delayed. Out of sight, out of mind.

Tag Sale: JD Powers estimates that only 10 million cars and light trucks will be sold in the US this year - lowest number in over 30 years; damned few of them will be made by Chrysler or GM.

Geography Lesson: Is Obama but Bush in blackface? We've a Petraeus-invented surge underway in Afghanistan, where US money and munitions continue to be diverted to the enemy - just as in Petraeus' Iraq. General McChrystal, fresh from secret camps and prisons in Iraq, is now in Afghanistan. A huge Bondsteel-type mega base is going up in Helmand province. And all this to gain control of the rug trade in Baluchistan - along with pipeline right of way and a port.

Good Question: 'Why don't we stop hurting the planet?'

Daisy Cutter: The RNC is running Goldwater's Daisy ad in an attempt to convince the American public that the prisoners at Guantanamo are capable of superhuman feats of strength and are too scary to be held in the puny prisons in the US. (Presumably including Omar Khadr, a Canadian-born 15 year old when he was taken in 2002, who has grown up in a cage). Actually, the Republicans are afraid that if these prisoners are moved to the US they would have to be treated as humans, with rights and all, and that, they believe, is not right.

Recidivism: A year after being 'helped' by the government's Home Saver Advance (HSA) program, 70% have redefaulted on their mortgages. You can lead a horse to water, but if it's not alive it won't drink.

Angels on Pins: The difference between the Paulson Plan and the Geithner Plan is that Paulson wanted to save the financial system with taxpayer money and Geithner wants to use taxpayer money to save the financial system. But Geithner will cost more than Paulson's, so his plan's better.

Porn O'Graph: Peeking at the Peak.

SAR #9142

The consumer is not resting. It's a dead customer.

Rumor Mill: GM is to be sent off to bankruptcy court next week with a plan that includes billions of additional taxpayer funding "sources said." But the same sources also said GM then would re-emerge as a global competitor.

Rehearsal: On a Thursday night - Thursday, mind you - the FDIC spent nearly $5 billion (and obligated itself for up to $10.7 billion as a gift to Carlyle, Blackstone and WL Ross ) putting Bank United FSB of Coral Gables out of and back into business. Long weekend coming up.

Hyperventilating: Headline hype 'Unemployment Claims Drop'. Well yes, from 643,000 new claims to 631,000. Exactly 1.866%. The 4-week moving average was 3,500 down at 628,500, a decrease of one-half of one percent. What's the margin of error? How many folks got the flu and couldn't make it to the labor office? Who stopped for coffee? Continued claims are now at 6.66 million - an all time record.

Silly Question: "Can America's Debt Get Too Big to Pay?" Does this dress make me look fat?

Here's An Idea: Tired of bailout nation? Frustrated? Tired of hoping for change? "I'll tell you what we should do. Stop paying our taxes. And our mortgages. They can't throw us all in jail! They can't evict us all!" Back in the 19th Century they were called Rent Strikes.

Sticks and Stones: Netanyahu, after calm and serious consideration of the recommendations from President Obama, VP Biden, and Secretary Clinton, deemed their ideas stupid, childish, and juvenile. And he complained that the promised billions in aid were insufficient, also.

Pounded; How real is the spreading fear that more and more governments are less than sterling risks? So far this year Greece, Ireland, Japan, Portugal and Spain have had their credit ratings cut. Now the UK is "under negative review". Add to that the jump in US bond yields and the euro's climb back to $1.40 and you could get a little jumpy, too.

The Biggest Question: Will the world really, really bail the US out?

Supply/Demand? Crude is back in the $60 range and gasoline in the US about $2.30. Either way, it's still a lot cheaper than bottled water. Crude is up about 50% and gasoline about 35% from their lows - during a time of immense oversupply even though stocks have dropped a bit lately. Strange.

Rogers That: Jim Rogers, generally known as 'the legendary investor', alleges the market will fall more, bottoming out "later this year, next year, who knows?" Governments, he says, have papered over the problems with new money, not by solving the problems. Rogers doesn't understand how the problem of too much consumption and too much debt can be solved by cheaper credit to encourage more consumption and more debt.

Slippery Slope : Obama is considering the need for “preventive detention” to be legally established in the US - to incarcerate those who think bad thoughts. I suppose eternal incarceration is marginally preferable to starting wars of aggression against those who might some day call us stupid or otherwise disrespect the US. Amusingly, this was in a speech on civil liberties.

Time Travel: Rising unemployment will drive childhood poverty in the US to 27%, and over 50% for African American children. Not a surprise when unemployment among blacks will reach 28% in some states. When I was in college my mother was a foot-soldier in Lyndon Johnson's War on Poverty. It worked out about as well as the War on Drugs and the War on Terror. The war on the poor and the black in the US is older than any of those, and still goes on.

No Knock: If you have the convenience of a wi-fi net in your home, you've given the FCC permission to enter and search the place without bothering with a warrant. Better yet, they claim they've had this power since 1934.

SAR #9141

Instead of minimum wages,

why don't we give maximum wages a try?

Governance 101: California is a fine example of what happens when you don't supervise the children. Democracy only works with an educated, rational electorate operating within a functional legislative structure. This is the future Nyquist & the GOP envision - government with no money. California Dreaming indeed.

Hang-Up: Corporate earnings are down over 30%, the markets are up over 30%. Sounds like another crank call.

Proud to be an American? If you are not sure waterboarding is torture, what about using a razor to make small slashes on a prisoner's genitals? Once a month. For years. And then dropping all charges and releasing the subject. After he confessed, of course. See, torture works.

Charterhouse: Pundits and stock hustlers claim the rally means the recession is over and you should buy stocks now. Any stocks, doesn't matter what, they're all going up. Or maybe not, for the chart shows the 52-week moving average is above the current S&P and that predicts more bearishness. Of course, I've got a seed packet that predicts I've got tomatoes by now, too.

Capitulation: Congress is letting the insurance companies, the pharmaceuticals, the for-profit hospitals and the medical suppliers write the healthcare legislation. It will be a rejection of the idea of a single payer health care system and a re-enforcement of health-for-profit by an insurance monopoly run 50 layered complexity of enrichment of the entrenched. More business as usual.

Toll'd Ya: In 2Q09, revenues for Toll Brothers, the largest US luxury home builder, dropped 51%, y/y.

Write if You Get Work: Despite massive "quantitative easing" and their continuing AAA rating from Fitch and Moody's, the British have managed to fall deeply into a deflationary cycle - ahead of the rest of the world. We wish them well as they enter the abyss - and ask that they drop us a postcard so we'll know what we can expect.

Six of One...: Bankers say that if they cannot gouge the poor they will be forced to gouge the rich - especially you tightwads who pay off the balance every month. One way or another they intend to get their pound or two of flesh.

Cart, Horse, Cart: The price of crude rose to near $60 a barrel as investors speculators drove stock markets higher on the unproven theory the US recession is ending easing. The higher prices will kill the recovery. Then the price of crude oil will rise as....

Revisionist Future: New analysis shows that by 2100 global warming will be twice the IPCC estimate, reaching 5.2ºC instead of a comfy 2.4º. Even this may understate the problem because some feedbacks, such as the melting of the permafrost and the subsequent release of methane) were not included. Don't panic yet, wait until it gets really, really scary. By the way, 5.2ºC is about 10ºF. Okay, panic.

Amazing Stories #628. Deere expects world-wide construction and forestry equipment sales to decline 42% and smaller utility tractors and turf equipment to fall 20%. So their stock goes up. Twilight zone.

The Irregulators: . The Obama administration is planning an entirely brand new regulatory body to monitor consumer financial products, like mortgages and credit cards, to protect the consumer from abject stupidity, credulity, and gullibility.

Alternative Universe: The Pension Benefit Guaranty Corporation resembles nothing so much as the Social Security Trust Fund. There is no money in either. PBGC is about $33 billion in the hole now, with GM and Chrysler careening down the street with $77 billion in underfunded pensions and $42 billion in totally unfunded pensions. (Others say the shortfall is only $10 billion, but that's not dramatic enough anymore.) Taxpayer? Is there a taxpayer in the house?

Porn O'Graph: Real debt, real wealth, real depressing.

SAR #9140

"There is no error so monstrous that it fails to find

defenders among the ablest men."
- Lord Acton

Damned If/If Not: Given the choice between taxiing themselves and a budget needing $21.3 billion in cuts, Californians shot themselves in the foot. Again. Direct democracy in action.

Note: The observant may have noted a subtle deterioration in SAR of late. I am happy to advise that Louis, our long-time friend, editor & co-conspirator, has been removed from the ICU and deposited in Recovery. He may soon be back - silently - among us. I have missed him and so, unknowingly, have you.

Downslope: Japan's economy, with a 4.0% decline in 1Q09, passed Germany's 3.8% drop, reaching an annualized rate of 15.2%. Globalization, indeed.

Fun with Numbers: The Bank for International Settlements reports that outstanding derivatives fell 13% last year, to leave an outstanding total of $592 trillion. Outstanding.

Dragnet: According to the US Commerce Department, April housing starts fell 13% from March and 54% y/y on an annualized basis. Building permits were down 50% y/y. Single-family housing starts in April were at 368,000 units annual pace. N\Housing, with new starts now down 77% from their peak, isn't going to lead this parade. There are already too damned many houses sitting around, so maybe this is a good thing.

Thought Experiment: AmEx stock climbed after it announced cutting 4,000 employees, 6% of its staff. How much more would the stock soar if AmEx fired everybody?

The Delinquents: Commercial banks are experiencing the following delinquency rates: Residential real estate, 7.91%. Commercial real estate, 6.4%. Credit cards, 6.5%. Charge-offs are: 1.8% for residential real estate and 7.49 for credit cards. "Highest since records...."

My Question, Exactly: "If Consumers Won't Kick-Start the Economy, What Will?"

Clear Skies From Now On? How often do you talk to your children about thrift, saving for a rainy day. Tell them stories about squirrels and acorns? Didn't think so. And one out of four of you don't lead by example, either, having not even enough savings to survive missing more than a couple of paychecks. And 41% report buying only necessities - which seems to include iPods, cell phones, and Happy Meals.

The Short Of It: Deleveraging will not be painless, not for you and not for the banks.

Connections: Farmers, like everyone else, operate on credit. But this year the credit crunch is making it difficult for farmers to borrow. No credit, no seed,no fertilizer, no equipment. And eventually, no food.

Baby Steps: First, China and Argentina worked out a currency swap, now China and Brazil are inching closer to dropping the dollar and denominating their bilateral trade in their respective currencies. Russia and Turkey are discussing the same idea. Pretty bold of them, doing business without giving Uncle Sam his little commission on the deals.

Definition: The Cheney doctrine consists of torturing random foreigners to obtain false confessions to support a previously told lie or delusion.

Spend It All, Now: Economists have begun asking for a planed inflation rate of 6% for a few years, to eat up what little value you have left in your savings. Certainly makes Treasuries look like a good bet, huh?

Enough Said: US Said to Consider Stripping SEC of Power, Shifting Some Duties to Fed - Sure, we want to give more governing power to a private bank.

Kicking the Tires: Here's the plan: GM files bankruptcy and 'sells' the health assets (?) to a US government owned entity for about $6 billion. The GSE would pay the $6 billion to the secured lenders (pay off the rich and well connected). The other assets would be sold off to pay off some portion of outstanding claims. The GSE would then portion out the new company to the union and the bondholders while writing off the $15 billion in loans that GM has already wasted. Tiny Tim is also giving GMAC $7.5 billion.

English 101: Correct the following headline: "Some Madoff’s Victims Are Also Crooks And Liars."

Ah-ha! A somewhat long but quite convincing explanation of the path from the end of the Bretton Woods era in 1971 to today (and tomorrow) is drawn from Duncan's "The Dollar Crisis”. Get a cup of coffee go read it - after you're done here, of course.

Porn O'Graph: Here a spike, there a spike. And remember 30% have no mortgage!

SAR #9139

I have seen the future, and it won’t work. Paul Krugman

New Normal: The US faces a long slow descent to a calmer and more rational standard of living. It's not a depression ahead, it's a return to living within our means - which is scary enough. It's not a "bottom" we're looking for, to bounce off and begin another climb. It's a leveling off at some sustainable level. You never really thought sneakers should cost $165 a pair, did you?

Bar Quiz: Can you (a) Name the seven dwarfs ? (b) the eight reindeer ? (c) the thirteen guilty?

Predation: The absolutely never-fail, never-miss Predators have failed us again. Twenty-nine people were killed in North Waziristan by two drones and nine more on Monday. How can this be true? The Air Force told 60 minutes that drones were foolproof. Or something about fools, anyway.

Final Grades: Fitch lowered some Citigroup RMBS from AAA to CCC- in one step; some Bear Stearns RMBS got the same treatment. But the toxic waste is, remember, worth far more than 27 cents on the dollar...

Bright Side: Athens created the art and philosophy on which western civilization is based after it lost wars to Persia and Sparta; maybe there's still hope for America.

Revival: The random walk theory looks better and better as an explanation not just for the market, but nearly everything - the economy, politics, US foreign policy, American Idol...

Get Out Of Jail Free: Good thing the Nuremberg Trials took place before the US Supreme Court ruled that if Bush didn't hold you down while Ashcroft poured the water, you cannot sue either for things they had their underlings do.

Just Go Away: Those about to be evicted are offered $1,000 by Uncle Sam to mail in the keys and quietly go away - without trashing the place

Small Comfort: The good news is that the projected rise in sea levels from the collapse of the West Antarctic Ice Shelf has been trimmed from 5 meters to 3.5 meters. That's' from 16 feet 4 inches to 11 feet 6 inches, on average. Big sigh. However, the report noted that the sea levels along both US coasts would rise by 14 feet 6 inches.

Tea Leaves: China's electricity production fell in early May by 3.9% y/y. Electrical generation is a proxy for economic activity.

Cliff Notes: The US housing bubble has brought prices down to 2000-2003 levels, and will fall another 17% from peak for a total decline of 40%. There will be no recovery, as tight credit, unemployment, and housing over-supply for a long while - 3 to 5 years. Or so says Deutsche Bank.

My Question, Exactly: "Why Are We Bailing Out GM And Letting Them Ship Jobs Overseas?"

Fine Print: Visa is marketing a gift card that says, in the small print, it cannot be used for 24 hours after purchase. If an attempt to use it is made, the card is automatically canceled and the money reverts to Visa. Well, it's certainly a gift.

Dark Spots: Hidden in the unemployment data is the 10% decline in employment for engineers, and a 9% decrease in employed computer professionals. There has been a sharp uptick in census counters.

Onward Christian Soldiers: The covers.

Back In The Sadle Again: The Street is spreading the meme that not paying the top guys gazillions is ruining everything and they'll hold their breaths until Obama gives in and lets them gorge themselves again.

Tautology: Niall Ferguson maintains that because regulation wasn't really tried, it didn't work, and because it was subverted, it didn't work, and thus shouldn't be tried again, because it won't work. After all financial crises happen. Relax and enjoy them.

Porn O'Graph: Reversion to the mean, applied.

SAR #9138

When Obama promised change

I thought it would amount to more than 17 cents.

Horse's Mouth: Real US GDP decreased at an annual rate of 6.1 percent in the 1Q09, after falling at a 6.3% annual rate in 4Q08 In the fourth quarter, real GDP decreased 6.3 percent.

Task Master: Don't be fooled by the conversion of Rogoff and Roubini to the Goody Twoshoes school of economics, the US has started a 10-year decline and our living standards will never be the same. If you are not scared silly, you've not been paying attention.

Definition: With graduates flooding out of the colleges and universities with dim prospects for employment you might think that unemployment would increase. It won't. If you've never had a job, your are not counted as being unemployed. To U-3 and U-6 we to need a new category: U-Lose.

Takes One... Five Centuries after giving the world the Spanish Inquisition, the Spanish now are leading the campaign to expose the US inquisition to the world.

Précis: "Credit Card Defaults At Record Highs But Worst Is Yet To Come." Usual depressing details.

Genocide? No. Except Charles Krauthammer claims "Genocide is an impermissible evil. Except..." Apparently except when done the the US or Israel. Same, too, torture.

Onward Christian Soldiers: After the US invasion of Iraq, Bush's daily intelligence briefings from the Pentagon arrived with Top Secret covers bearing Biblical quotations, courtesy of Major General Shaffer, the Pentagon's Director of Proselytizaton Intelligence.

Spelling Bee: There are trillions of dollars worth of funny money hiding somewhere out there, nobody knows where Can you spell hyperinflation?

Fill in the Blank: A human being who was repeatedly tortured by the CIA until he provided the (false) information they were seeking, has died in a Libyan prison, having beaten himself to death while chained to a wall.

Sad Fact: The US cannot afford to pay higher interest rates. Much of this week's activity will flow from this fact. And this month, and this year.

Going Thru a Phase: S&P says the banking crisis is merely entering "a new phase" and that the crisis will last another 4 years. S&P said banks will have a tough time surviving absent a bigger capital cushion than regulators require.

Quit Playing Pretend: There never was a 'trust fund'; the government spends every penny it takes in, every year. Social Security is interchangeable with the Defense Department, except we don't have a special tax labeled "DoD". They are both costs and neither is going to go away. The government will either increase taxes, increase borrowing, or increase inflation. Social Security and the Defense Department are both going to be with us for as long as politicians want to be re-elected. End of story.

Charlie Wilson's Way: If what's good for GM is good for America, then the concern about the US going bankrupt seems well placed.

Form a Line: Every politician and every commentator who thinks that torture is acceptable under some set of circumstances should be required to undergo public waterboarding before making such pronouncements. Every time. And retroactive enforcement of this requirement would be a good idea, too.

Not News: "The IMF is hurting poor countries."

Things to Ban: There's so much to be incensed about... Obama's duplicity. Cheney's existence. Wall Street bailouts. But save room for AIPAC.

Porn O'Graph: Earning a bear market.

SAR #9136/Weekender

America's reigning religion has demonstrably failed; what now?

Whole Life: Allstate, Amirprise, Hartford, Lincoln National, Prinicipal Financial Group, and Prudential - life insurers all - have been volunteered to be propped up the Geithner Life Insurance, Banking, Finance and Automobile Company to the tune of $22 billion dollars. Actually, that's not the whole tune, the $22 billion is just the opening movement.

Undersized: On a non-annualized basis. Italy's GDP shrank 2.4% in 1Q, Germany at 3.8%. Times four would be a 15% drop in GDP but that's not possible. Is it?

Storm Doors Inc: One of the largest trucking companies in the US, YRC Worldwide, is seeking $1 billion in federal money in order to baill them out of their woefully underfunded pension plan.

Cheer Up, Things to get Worse: Robert Prechter, a technical analyst noted for calling the 1987 stock crash, sees US stock markets plunging to half their lows on March 09, as a deflationary depression sets in.

Futurama: The car of the future is a bicycle

The face Chart That Launched 700 bn: Last fall, big lenders started increasing the interest charged for short-term lending, driving up all other rates and shutting down the economy. Instead of trying to explain the intricacies to Congresspeople, Paulson had a scary chart drawn up. It worked.

Vote Ethanol! Ethanol creates more smog than gasoline, reduces fuel efficiency, destroys fuel pumps and fuel lines, and is destroying large numbers of engines. Larger subsidies are sought.

What Part of This Sounds Right? Obama apparently plans on closing Guantanamo and holding the inmates in the US indefinitely, without trial. Slippery slope, my ass - it's the whole damned ski run except for the crash at the bottom.

Numerology: If the banks didn’t have Fannie and Freddie to sell their mortgage loans (re: the risk) to, how many houses do you think would be sold in the US today?

New Moons & High Tides: S&P is not fooled. It says the credit/banking crisis has "merely entered a new phase" and will continue to 2013. The system and the banks may not fail, but they are going to be on life-support for a long time.

8.0 On the Richter: It's come to this, either they vote for Arnold's soultion, or Arnold will take 8% of property tax revenue from cities and counties. All in favor vot "Aye", opposed, "Aye". We're done here. And they are, there.

3,000 Words: Unemployment is way up, average real weekly wages are way flat, and household debt isn't fit for polite society, all in pictures.

Just Wondering: Some 9,000 people claim they lost nearly everything to Madoff's Ponzi scheme. But is that true? If Bernie had your money for 10 years and pretended to earn 12,5% year after year, after the 10 years 70% of your money had been returned to you.

So Yesterday: AL, ID, ND, OK & SD have passed resolutions asserting their sovereignty uner the 10th Amendment. Mostly GOP sponsored, the resolutions are merely symbolic - but I repeat myself.

Enough, Already: To pay promised Social Security benefits over the next 75 years, the payroll tax rate (half paid by the worker, half by the employer) would have to increase about 2%. To kiss it and make it better for ever and ever, a staggered series of raises to a 4% (2+2) increase would be required. Quit scaring the horses.

Zero as a Positive Number: The CBO says that money lent to the IMF has a 5% chance of being defaulted. This is the equivalent of saying there is a 5% chance the international financial system will collapse.

Porn O'Graph: As high as an elephant's eye and as far as the eye can see...

SAR #9135

"They saw law as a nicety we couldn't afford."

California or is Bust! It's all over but tripping down to the courthouse. CA has lead nation in real estate losses, in unemployment, in stupidity about taxation, and now it is the first to declare itself a bank, insurance company, financial giant and auto maker rolled in one and to petition for its turn at the trough in Washington. The others are not far behind.

Headline Quiz: What's "The Problem With Debt"? (a) You have to pay it back, even if the asset you bought with the loan is now worthless. (b) Your children have to pay it back, if it was loaned to Wall Street. (c) Your grandchildren have to pay it back if it was loaned to the Treasury. (d) All of the above.

On Deck: Investor Jim Rogers claims the dollar’s rally is set to end in a “currency crisis”, probably this autumn or else in the autumn of 2010. Mark your calendar - in pencil.

Not a Cough in a Carload: How right those wanting to limit carbon emissions are can be judged by how much the emitters are spending so they can keep on spewing. The fossil fuel folks have upped their PR spending by 50%, shelling out $45 million in the first three months of 2009. Their message is that cleanliness is bad, killing the planet profitable.

Good One: Within 2 years, GM plans to begin exporting vehicles made in China to the US. Probably SUVs.

Here to Help: Foreclosure numbers continue to rise. The government's attempt to save 3 to 4 million (of the 15 million) who are underwater is slowly improving. The original plan modified a total of 50 mortgages. The Hope for Homeowners has modified 55,000 - but somehow, even with modification, nearly half did not get their payments reduced.

Be Prepared: When I was an Explorer our big adventure was a month-long canoe trip in Canada. Today they're playacting at patrolling the border and having fire-fights with drug lords. Lots of folks are going to mention Hitler Youth and Young Pioneers. Not me.

Discretly: Sales of home furnishings, home & garden and building materials, consumer electronics and department store sales experienced fell 9.3% y/y. Shoppers are showing the utmost discretion.

Oz As A Location: The greater portion of Americans live in a single place - Oz. Must. Three out of four think the housing collapse is over, nearly half think prices will stabilize in 6 months, and 30% are planning to sell 'as soon as the market rebounds'. If one-third of homeowners are ready to dump their houses on the market, prices are bound to go down, not up.

Not Quite News: "The IMF Is Hurting Poor Countries. The IMF's conditions on financial aid to poor countries are [too harsh]. It can afford to be more generous." I believe the author misunderstands the purpose of the IMF. I suggest he read Klein's Shock Doctrine.

Repetition: 637,000 filed for first-time unemployment benefits last week. Continuing claims are at an all-time high for 15th week in a row, and continued claims are over 6.5 million. At least somethings growing.

Secret Operator: One of the changes we can believe in is that there will be more assassinations, kidnapings, and other secret operations in Afghanistan now that McChrystal will be running things. For five years he has run the secret war in Iraq (and environs). But don't ask him about then or now, it's all classified way beyond your pay grade. And successful, don't forget successful.

Pick a Number: Currently you can buy all of GM for less than $700 million. By the end of the month it will be much less. Along with dropping dealers and sending perhaps 200,000 to the unemployment lines, the dealers going out of business sales will generate some fairly curious unintended consequences.

Homework Assignment: Define "rewards for excellence in performance" so as to explain why the largest financial failures in history were caused by the highest paid executives in history. Essays submitted on time, with less than 10% error rate in spelling, grammar and facts, will receive 10 bonus points.

Porn O'Graph: Home Sweet Foreclosure.

SAR #9134

We always suspected the streets weren't really paved with gold.

Come On: The administration is now refusing to release the remaining Abu Ghraib pictures because they have the potential to cause harm to our troops who committed war crimes in Iraq and Afghanistan. Do they really think that this time the pictures won't leak?

Weeding: Retail sales fall 0.4% in April and 10% y/y, second straight monthly decline.

Snow Job: The annual scare-the-seniors parade is passing by, threatening armageddon and/or the poorhouse. True or True: A payroll tax increase of about 2% and expanding the tax to all income resolves the problem until way past death by global warming.

Leaner & Meaner: GM will close about 2,000 dealerships, which the market thinks is a good idea. Chrysler will close about 1,000. It will lead to the loss of about 250,000 jobs, which the market will briefly think is a good idea.

Sticks and Stones: The RNC, meeting in "an extraordinary special session next week" is expected to pass a resolution rebranding Democrats the “Democrat Socialist Party.” I'm not sure this will be binding on the Democrats or any of the news media except FOX.

Pocket Change: OMB expects Fannie and Freddie to ask for $92 billion more (they already got $79 billion) this fall. A trial balloon labeled "Kill Fannie and Freddie" is floating around the Beltway.

Happy Meals: Citizens 'happiness levels 'are highest in northern European countries - Denmark, Finland and the Netherlands are rated at the top of the list. The USA didn't make the top ten, but again swept the awards for obesity, infant mortality, and childhood poverty, although Turkey and Mexico beat the USA in these last two categories. The poor deluded socialists are apparently satisfied with their free medical care, too.

Open Secret: In the beginning, the Taliban was created by ISI and funded by the CIA. Another one of those things that seemed like a good idea at the time.

Contray Mary: Too many economists are now saying we're getting close to the bottom, that things are starting to improve. Hurry, run away, run away - these folks haven't been right yet...

Fad: Yesterday it was California, now it's the Feds - receipts are down 34% y/y. Soon appearing everywhere.

Whistling Past the Graveyard: European output dives, hopes shift to US shoppers.

Another One Bites the Dust: Bolivia's Chacaltaya glacier, at 17,4000 feet, used to be the world's highest ski run. It used to be a glacier, too. Too bad about the skiing. Sad, too, for La Paz and El Alto which rely on summer melt from the glaciers for their water supply.

Greens, Shot: People without jobs that pay reasonably well are not able to buy stuff, much less buy stuff on credit - they are lucky if they can continue to "service" their debts. Who could have guessed?

Terminology; "Reversion to the mean" is a statistical concept that explains why house prices will continue to fall.

Phases: Gulf of Mexico oil production is expected to peak at about 1.78 mbd in 2013, then decline. Whether the decline will be faster or slower than Cantarell wasn't specified.

What If? What happens if even more pensions fail? What happens when the states can't raise enough money? Where are all the real estate gurus, mortgage clerks, finance nerds going to work? What if the economy hasn't turned the corner? What if job losses continue apace, mortgage foreclosures continue to rise and corporate bankruptcies spike? What if the banks are really insolvent? What if Bernanke can't prevent rampant inflation? Just asking.

Sub-Prime Redux: No money down - 100% financing. That's right, you can borrow your down payment from a friend or your in-laws, add in the $8,000 gift from Uncle Sugar and buy that FHA backed house with zero down! Great idea, what?

Porn O'Graph: Easy come, easier go - spending up 17%, income down 15% and the gap groweth.

SAR #9133

Is cause and effect that difficult a concept?

Foiled: The administration apparently plans to release a May 7, 2004 CIA report that shows that torture does not work, was not medically safe, and that one-time VP Dick Cheney is lying when he claims "hundreds of thousands" of lives were saved. Apparently it was more matter of ruining hundreds of lives to appease sadists at the top of the Bush administration. Photo's to come, maybe.

Headline Only: "U.S. Foreclosure Filings Hit Record for Second Straight Month"

Entrails: Hedge funds will make about $2.5 billion from their CDS holdings on GM, if GM goes bankrupt. The top GM executives have dumped all their shares. Guess who's gonna take the loss? Got a mirror?

Check the Sofa Seats: No one at the Fed has the faintest idea where $9 trillion dollars have gone. The same people don't know what losses the Fed has suffered on its $2 trillion portfolio, either. Relax, these are the people who are going to rescue us.

Again: House prices fell again in March, down just 1% from February and 14% y/y.

Could Be Worse: Yes, U6 unemployment is above 15%. Yes, that's terrible. But at the peak of the Great Depression U6 was over 37%. Today's numbers merely match 1930 - not later on.

Saved! The current market rally is based on the chance that fewer of us will soon be homeless.

Whoa: Advanta, which only issued credit cards to small businesses, with $5 billion in outstanding balances and facing an 18 - 20% write-off , has canceled everyone's card. A million of them. They hope that their customers keep paying down their balances, as though the companies were using the cards for lunch and morning donuts, not payroll or accounts receivable management. If each small business averages but 3 or 4 employees, is this another 3, 4, 5 million unemployed?

Nope, Not the Sun: Research published in both Science and Geophysical Research Letters, concludes that the sun and cosmic rays cannot explain the observed global warming. Now for the spin cycle.

For Consideration / Wish I'd Said: "You take Rush Limbaugh's listeners away from the Republican Party base and there isn't a lot left." Mark Steyn.

Numerology: Unemployment figures are people, people who will not be productive members of society for months, maybe years, people who are not able to pay the utility bills, buy food and clothing, make mortgage or rent payments. Investors worry about the banks, the stores, the profits. Someone should worry about the people.

Headline Only: NYC charging rent at homeless shelters.

Ex-ports: Exports from mainland China declined 22.6% year-over-year in April, exports are off 17.4%. Worse, the dreaded second derivative was essentially flat..

Judgment: Eliot Spitzer was spending his own money. That's not a problem for the country. Tim Geithner, at the NY Fed and in his current incarnation, that's another story. To see the system's flaws up close, read Spitzer's article.

Free Advice: Oppenheimer's Brian Belski: "We have a new bull market. Who cares whether it is cyclical or secular. Let's just be happy that the worst is now behind us, and frankly, just buy." Free, and worth it.

Porn O'Graph: Mortgage Brokers find new jobs.

SAR #9132

Americans want cheap fuel, no matter what it costs.

One Third: A study in Science estimates that in the next nine months as many as one in three exposed to the swine flu virus will become infected. According to WHO, of the 5,251 known cases, 61 (1%) have died.

Translation: Obama's budget works out like this: Joe Sixpack is going to pay $19,000 in taxes and the government is going to pretend it was $35,000 and borrow the difference.

Hula Hoops: California is $20 billion in the hole so far this fiscal year. In April income from corporate taxes was down 35%, that from personal income tax was down 12%, and the state's sales-tax receipts were down 20%. Trends start in California, work east.

Same, Only Different: Here's a "Quantitative Easing for Idiots" article, with a good chart & all. It's about the Bank of England. To make it about the dollar and the Fed, draw the tail on the chart twice as high and add two or three zeros to the numbers.

Lies, Damned Lies, & Citigroup: Citi says it has lent out $99.5% of its $45 billion TARP money - which would be impressive if it was true. The TARP money was capital. On a very bad day Citi's fractional ratio is well north of 10:1, which means Citi has another $400 billion to go.

Asked & Answered: 'Should People Just Ignore Economists?' Yes.

Spring Shower: Couple of things: US housing busts typically last 42 months. We are 26 months into this one. Eurozone banks have only taken 20% of the losses they will eventually have to swallow, the US has gulped down about half of its medicine. In Germany, Europe's strongest pillar, banks have $1.1 trillion in toxic assets on the books. Book your trip now and you can be in Europe for the crisis this summer, then return to the US for the fall follow-up.

Reform: Back in the 90's the US didn't reform health care. The GOP hasn't reformed either, they've hired the Swifboaters to scare the health out of US again.

Potato Potahto: In 1Q reports, earnings beat expectations 66% of the time, even though 62% of the reporting companies had missed expectations for sales. They did it by cutting staff, cutting wages, cutting inventories, cutting futures.

Restraint: Krugman gave a talk in Bejing full of neat-o nuggets about the inadequacy of the Obama stimulus, but I quote him too often already...

Can Not: Received wisdom is that capitalist competition results in better products, lower prices and greater consumer choice. Yes, sometimes, but only as an accidental byproduct of the capitalist goal of market domination.

Analogy 101: From now on, every time the economy starts to get wound up, so will the oil supply and thus the price of oil. The more you wind the economy, the tighter the oil gets and the harder (more costly) it will be to continue winding.

Casting About: Some analysts argue that the problem with Option ARMs is not the recast payment amount. But think for a moment, the recast does a couple of things: it adds in all of the missed payments and missed interest during the 'option' period, it raises the interest rate a bit, and it then requires payments that will amortize the new amount in 25 years. It will generally be a 100% or more increase in the monthly payment. If that's not a shock, you've got bigger absorbers than I do.

Quiz: What do you call that 7 of 10 who are uninsured or underinsured, or have medical bills, medical debts, or problems accessing medical care? (a) Americans, (b) Women, (c) American women, or (d) Democratic voters.

Drip, Drip, Drip... More torture memos, pictures, announcements, and waffling are on the way; but it must be okay, Obama's folks are doing it too.

Fertilizer: Wall Street applauds companies for their aggressive cost-cutting, layoffs and deferring capital expenditures in the name of this quarter's profits. But these are not 'green shoots' - they are dry rot, the basis for a prolonged and deeper recession. They are the start of a self-fullfilling plan. Acts that increase unemployment and decrease the wages of the employed are harmful in the long run. Ah, but Wall Street never cared for the long run, as long as they could run away with the cash.

Another Chapter: Ethanol maker White Energy has filed for bankruptcy, citing the high cost of raw materials and the low price for the product in an oversupplied market.

Right's Rights: When those on the right start berating the government for limiting their legal right to be sociopathically greedy, they lose sight of the underlying premise - at least in the US - behind the formation of a government. It is 'of the people, by the people and for the people' and any rights that a firm or class of investor has flows from and can be limited by the government. The government, at the moment, permits capitalism. Permits.

Porn O'Graph: 25 years of instant gratification.

SAR #9131

Their intent is to restore faith in the system, not to fix it.

Concession Stand: Faced with a near revolution on the part of the governed (the banks), the Fed capitulated and reduced the size of the some capital deficits by a reported 60%. Now the Fed says they don't have to raise that if the banks can manipulate the accounting rules sufficiently to pretend to be profitable for a couple of quarters.

Being Prepared: The FDIC is opening an office in Jacksonville, FL and staffing it with 500 "asset resolution specialists."

Chimera: While Wall Street and the government struggle to return to the heroic days of yesteryear, the American consumer has turned much farther back, to the days of pinching pennies, saving, and paying their debts. Mostly paying their debts. Economists expect this behavior to persist well beyond any hoped for recovery, not because of a sudden return to Puritanism but rather out of sheer necessity.

Keystoned: The White House looks to turn the Fed into the nation's financial supercop. Okay, but who will guard the guards, and who's going to provide on-the-job training?

Time Warp: On the TV talk circuit this week: Former GOP VP Cheney, Former GOP Presidential Candidate McCain, 2012 GOP Presidential Candidate Petraeus , former GOP Speaker of the House Gingrich, and GOP installed Afghan President Karzai. The Democrats were busy running the country.

Mother's Day Present: The BLS unemployment rate for men is 10%, for the ladies, 7.6%. But they did get yesterday off, right?

Recast Resets: Interest rate resets on Option ARMs is not a big problem with today's interest rates, but recasts are - recasts being the resetting of payments to a totally amortizing rate, where instead of making interest only payments, or other 'negative amortizing' payments, the patsy has to come up with real dough, now. Or rather, then, then being next year.

Resourcefulness: A new report cautions businesses to consider their vulnerability to the increasing scarcity of energy, food and water and to take steps to reduce the potential damage shortages could entail. Just what steps was not specified.

Mating Dance: Research suggests that tightwads generally marry spendthrifts. While it may explain my marriage, this sheds no light on the union between Washington and Wall Street.

Criticising the Critic: Akerlof & Shiller's Animal Spirits gives a well deserved thrashing of the 'rational actor' basis for market theory economics, but they still seem to think that people put away their 'animal spirits' when they enter the government. Paulson, Bernanke, Geithner and Obama make a prima facie case that delusions, greed, fear and hope also animate political man.

Eating Cake: Obama's budget clearly says that Fannie and Freddie are private companies, so why is Fannie asking the Treasury for another $19 billion?

The Good Times: Population growth and increased food production have both literally been fueled by the use of ever more fossil fuels. Unending economic and population growth is not sustainable, and will end soon after oil availability peaks.

Taps: Hydrogen fuel cells, once the Holy Grail that would banish global warming and dependence on foreign oil and free the US from fossil fuels has officially been identified as a chimera which will not be practical for decades. Government funding for development of hydrogen powered vehicles will be severely reduced. That's okay, there are no cars in the future. Converting 10% of the 250,000 million vehicles in the US to 100 mpg non-emitting engines would take way over 10 years and not change anything.

Nerds, Inc. The ongoing excitement over improvement in the second derivative of this or that statistic should be seen as grasping at straws. Reality seems to have slapped CNBC upside the head this morning.

Porn O'Graph: Land Ahoy! There's a mountain ahead!

SAR #9129/Weekender

What are the chances they've got it right this time?

Beauty and Truth: The unemployment data is not hopeful - half a million jobs lost is half a million fewer consumers. The unemployment rate continues higher and the private sector continues to lose jobs. U3 increased to 8.9%, U6 to 15.8%. If you subtract the 'revisions' and the increased Census Bureau employment (132,000 net jobs), you end up with a 671,000 loss rather than the rosy 539,000 reported. Over 25% of the 13.7 million unemployed Americans have been out of work for more than six months, the highest percentage of long-term unemployed in the 61 years that reading has been tracked.

On the Other Hand: Crude oil is either set to reach $52.65 a barrel in the near term, or to fall to $45 a barrel by July. I'm glad all my money is tied up in Scotch.

Five, Count'em, Six: Why the stress wasn't stressful: (1) Banks were allowd a debt/net ratio of 25:1, not the pre-disaster 12:1 required by the SEC. (2) The 8.5% loss rate postulated for CRE is a joke. (3) The fake 1Q09 earnings were treated as though they were real, rather than paper pushing. (4) Transferring numbers from here to there on a ledger doesn't actually make it new money. (5) The banks were allowed to mark their own take-home tests. Oh, and (6) The final scores were negotiated between the testers and the tested and it got pretty testy.

Basics: Just as you suspected, the fundamental difference between the rich and the poor is greed. A close second is a fortuitous choice of fathers.

Explication: The jobs of 800 voters in Rep. Hinchey's (D-NY) district depend on the $835 million a year the new presidential helicopter costs. Obama does not want (nor need) the chopper. Hinchey does. There goes another billion.

Also Ran: Despite suspiciously sound banks, a slight uptick in existing home sales, a small dip in unemployment, etc, there's one thing missing. Demand. If Tom in the next cubicle gets let go, everyone who knows him gets a little more edgy, cuts back a little bit more, buys a cheaper pair of jeans and so on, until suddenly, Mary down the hall is 'let go' too. Etcetera.

Same But Different: Retailers are reporting upbeat same-store results. But that really should read: "Surviving retailers report that some customers from bankrupt competing stores are wandering in from time to time."

Company: On the lighter side, Toyota lost more in the last quarter than GM did in all of the last year. Seems there's enough misery to go around.

Low Milage: To the $2.4 trillion homeowners lost in their house equity last year, add the same amount this year plus the loss of $2.5 trillion in lines of credit on MC/Visa and that's $7.5 trillion in purchasing power out the window. That's half of the US GDP gone missing, a GDP that is 70% consumer spending - and that largely debt driven.

The Usual Suspect: Russia's Deputy PM warns that Eastern Europe could face a new energy crisis next winter if Ukraine doesn't buy more natural gas from Russia now and stockpile it. He also suggested that Ukraine's gas infrastructure is insufficient to handle the volume required. Either way, it's going to be their fault, not Russia's.

Diet is as Diet Does: As I've long suspected, people get fat because they eat too much. Putting down the fork and leaving the table is still the best exercise.

Putting the Bull in the Market: Most of the top 25 originators of subprime mortgages were financed by BofA, Citigroup, Goldman Sachs, JP Morgan and Wells Fargo - to the tune of about $1 trillion. These same buffoons have garnered $700 billion in taxpayer rewards. The stress isn't theirs, either. It belongs to the taxpayers.

Ah, shoots: Consumer credit fell $11 billion last month. That's $11 billion they didn't spend, too. But that's not enough to make the $2.5 trillion in outstanding credit look any more reasonable.

Essay Question: "Why Has the Securitization Market Dried Up?" And I want something more than "because they ran out of greater fools."

Old Adage: My wife claimed our boat was a hole in the water into which we kept throwing money. Tanker owners' wives are saying the same thing as ship owners are making no rental income carrying oil from the Middle East to the US, while paying $3,500 a day for fuel. At least I had sails.

Follow-up: A 30-year follow-up study of 54,000 smokers shows - once again and "strongly" - that smoking will kill you. Too bad we don't have 54,000 earths and 30 years to study global warming.

Let the Good Times Roll: Fannie Mae has lost another $23 billion, needs an increase in its allowance because "its entire mortgage portfolio was experiencing increases in delinquency and default rates."

Porn O'Graph: Down on the farm.

Porn O'Graph: Down on the farm, part II.

Porn O'Graph: Down on the farm, Part III, You are here.

SAR #9128

The American populace is not a source of inspiration.

Gullibility: Whenever I asked permission, Mother would ask "Why?" "Because all the other kids are... " was never an acceptable reason. 'Lemmings' and 'jumping in front of cars' featured in her next comment. Good thing I didn't have to ask her before I plunged all my money back into the market.

Preemtive Strike: Obama's health plan will deny you treatment that you need and make you wait weeks and months for whatever treatment they decide to let you have under the Democrats' list of acceptable treatments. That's what the GOP is saying. Maybe it's true, maybe not; it's hard to say because Obama hasn't even submitted a proposal to Congress yet.

Ethanol Is All Wet: Ethanol may do and be a lot of things, but one thing for sure - it is thirsty. It takes 50 gallons of water to produce enough ethanol to drive a single mile.

Weeding the Garden: The recovery is on the way, housing has bottomed and is rebounding, and there are two chickens in every pot. Except. Except there is a huge increase in jumbo mortgages entering foreclosure, a 10% loss rate on securitized jumbo mortgages, and a 43% decline in the sale/re-sale of homes valued over $1 million. Move along, folks, Ben said there's nothing but blue skies....

Re-Education Camp: The American consumer's behavior has undergone a fundamental and irreversible shift. So says P&G's former director of marketing.

Before and After : BMW reduced production sharply in the first quarter, which allowed it to report a smaller than expected loss. It's shares rose 6% on this 'good' news. It lost less than expected by producing fewer cars and this is seen as a cause for celebration. No test today, I'm feeling ill.

Self-Inflicted: Autism in California has undergone a 12-fold increase in the last 20 years. Sooner or later we'll find out it is caused by something we are putting into the air, water, food or plastics and that, as Pogo observed, the enemy is us.

Forest/Trees: Turns out they miscounted the trees and there is not enough "waste wood" in the forest to feed proposed biomass plants. Oops.

On Globalization: World trade fell 31% y/y in January. In the US, private credit market debt is 174% of GDP and US households have 39% more debt than income. US wages and salaries have dropped 5.7% y/y. Retail sales in Europe have fallen 4.2% y/y, while Great Britain has the worst fiscal outlook since WW II. Where's Candide when you need him?

Essay Assignment: Compare & contrast the Obama and Bush administrations in regard to Guantanamo, torture, abductions and secret prisons. 25 words or less.

The Impoverishment of a Generation​? If you are tired of 'green shoots', administration happy talk and the pablum parceled out by CNBC, WSJ and the Usual Suspects, try Spiegel Online. It's nice to find serious discussion in adult language, Deutsch or English.

Quickie: How much of those recently reported bank earnings are real? (a) None, (b) Very Little (c) Either 'a' or 'b'. (d) Yes.

Doomed, We're Doomed: After 25 years and $10 billion wasted, the government is giving up on the Yucca mountain nuclear waste storage site. This is a fine example of the complete and utter foolishness of expecting the federal government to actually do something useful about global warming.

Surprise: The Supremes have decided it is not a crime to be an undocumented worker, and the vast majority of undocumented workers are no more criminal than their employers.

Factoid: Among all the fertilizer being spread on the 'green shoots' by a 2.25% drop in the number of initial unemployment claims, let's remember that 631,000 jobs went away. There are now 6,271,000 folks with continuing claims for unemployment. That's 6 million families that cannot pay their bills, cannot pay the mortgage, cannot buy even a grossly discounted car.

SAR #9126

SAR 9127

Killing your opponents is not the same as actually winning the argument.

Approximations: ADP says 491.000 private sector jobs were lost in April, the government will report (on May 8) the loss of 610,000 jobs, and Trim Tabs weports the loss of 745,000 jobs and a resulting U3 unemployment rate of 8.9% with 10% expected by summer. The more accurate U6 measure of unemployment is now above 16%.

Axiom: A slap on the wrist not torture, nor is it an adequate punishment for those who instigated and authorized torture. Nor is disbarment. Jail is, preferably at Guantánamo.

Apocalypse Now: Americans are not driving as much as they used to. But if teenagers aren't driving up and down the drag, companies are not shipping goods hither and yon, and there are hundreds of loaded tankers hovering just off-shore, why is the price of oil and gasoline going up?

Wish I'd Said: "If reporters would focus more on reporting the news rather than repeating what the Fed chairman says the public would be much better informed." Dean Baker.

Another Infamous Victory: Faced with truckloads of dead Afghan women and children - perhaps as many as 150 - the US admitted that there had been a battle in the neighborhood and that air support had been used, but could not comment on the collateral damage.

Spiral Logic: There is a long term connection between industrial production and the consumption of energy. Absent a new source of cheap and abundant energy, economic recovery will lead to oil price spikes and a downward spiral in both energy use and industrial production.

Drive Off: Chrysler, having gotten $7 billion in bailout cash, is speeding away towards bankruptcy without paying a penny back.

Circling the Drain: The BLS employment cost index shows wages and benefits grew in 1Q09 at an annual 0.8% pace - lower than the inflation rate. This is a sharp drop from 4Q08 and indicates that wage growth will slow more as 2009 progresses. Thus workers will have less purchasing power, which will in turn slow any economic recovery.

Asked & Answered: Do the Rich Really Get Richer? Yes.

Cheer Up, Things Will Get Worse: People in Western democracies expect a rise in political extremism. An overwhelming 86% anticipate unrest, strikes and violent demonstrations - half being sure these will happen in their countries.

Restless Natives: The yield on 10-year Treasury notes is creeping up as investors demand larger returns for the larger risk. The US federal deficit for the first 6 months of the fiscal year is $956 billion, nearly 15% of GDP. Debt held by the public will rise from 41% of GDP last year to 54% in 2011. The outlook is for rapidly increasing debt in the years ahead, with interest rates rising as government borrowing crowds out investment in a recovery.

Scout's Honor: AIG paid out $454 million in bonuses last year. This is their latest guess. In March they said it was only $120 million, but that was just for the janitors. And the $454 million doesn't include another $165 million in retention bonuses.

Activist Judges: South Carolina's highest court has stopped some 5,000 pending foreclosure sales throughout the state on homes guaranteed by FHA, Freddie, Fannie, or any mortgage company that has signed on to any federal assistance program. Hotbed of socialist judges there in the Deep South.

Tea Leaves: China's power use is down 4% so far this year, and is expected to continue to decline, suggesting that rumors of a quick recovery in China have been overstated.

Alchemy: Michael Milken, godfather of credit flim flams, has morphed into a paragon of reason and advocate of reform in debt creation financing. He points out that the rating firms worked an interesting bit of magic, certifying over 17 thousand AAA rated debt obligations and yet today certifying only 4 companies as having triple A worthy debt. He also wonders " How can you sell trillions and trillions of dollars of loans on an assumption that is false?”

Deep End: How many American home-owners owe more than their house is worth? (a) 8.2 million, (b) 14.8 million, (c) 26.9 million, (d) take a hike, Ike.

Good Luck: Wells Fargo announced it would no longer contribute to its traditional pension plan, which is a direct reduction in workers total compensation. The stock rose 12% amid cheers. Their employees are sitting around the kitchen table, scribbling aimless columns of numbers.

Lines: The current downturn exceeds all previous ones in both intensity and speed; the total value destroyed to date is larger than that of the Great Depression even when adjusted for inflation.

Porn O'Graph: Where the boys (and girls) are.

Try not to confuse voting with democracy,

nor democracy with morality.

(Note - SAR is temporarily being 'blocked' by blogspot - we'll be back soon.)

Hot Air: Rumors: Citi's fine. Citi needs $10 billion. BofA needs more than $10 billion. Or $60 billion. Or maybe $100 billion. Only 4 banks fail the stress test. Or 14. Or maybe just 10. Or they all did. Or is Bernanke only going to give the banks 30 days to raise funds before having to accept a Fed takeover via "infusions"? Or these are all trial balloons as the administration 'adjusts' the numbers to some acceptable result.

Insiders Out: Corporate insiders continue to sell aggressively - both in volume and in frequency - into the rising market, with sell orders topping buys at levels not seen since the market top in 2007.

Wicked Witch: Workers of the world are getting pummeled as employers slash hours, cut wages and eliminate overtime. In Japan the drop is nearly 4%, in the UK wages have dropped the fastest in over 60 years, and in the US over a third of all households have at least one worker whose hours or wages (or both) have been cut in the last few months. Some green slips shoots.

Betting Slip: "Technical Analysis" indicates crude oil is on its way to $71.55 a barrel. Not $71.46 or $72.03, $71.55.

Shortcut: China has entered into a series of currency swaps with Brazil, South Korea, Hong Kong, Belarus and Malaysia. Sounds pretty harmless, but it is a way of establishing direct convertibility between these currencies without reference to the US dollar, which is pretty interesting.

Lying Eyes: Roubini says you shouldn't believe your lying eyes, the market rally is an temporary illusion and the bank stress tests are a fraud. Or the other way around.

A Famous Victory: The US has been so successful against the Taliban in Afghanistan that half a million Pakistanis are fleeing Taliban forces who now control the Swat area. Meanwhile, back at the ranch, US bombs have killed dozens of Afghan civilians, saving them from the resurgent Taliban. Explain to me again, please, why are we there, doing what?

Charts: The S&P 500 is up 34% from the bottom, and still off 42% from the peak. Violent rallies are often followed by slow, painful sell-offs.

Room At The Inn: The Fed is now accepting commercial mortgage-backed securities and securities backed by insurance premium finance loans as collateral for TALF underwriting. In other words, the Fed is now bailing out commercial real estate adventures and insurance company losses.

Medic! ADM's profits have fallen 98%, mostly due to a lack of demand for ethanol. Congress will meet in special session.

Without A Trace: According to the headline, "The Economy Will Turn Up Later This Year" It's been in the witness protection program all this time.

Out of Sight: Those worst hit by Wall Street's economic banditry are packed into cheap motels, living in cars on vacant parking lots, and in tent cities hidden from decent folks' view. They spend their days alternately distressed and hopeful, searching for work and praying their fortunes will change, dreaming of America.

Assumptions: Senior bank officers suspect that credit quality for all types of loans will continue to deteriorate during 2009. "If the economy does not take a turn for the worse..." Further deponent sayeth not.

Suitable for Framing: Here's a keeper: "AIG Supposedly Done Needing Money" Well, maybe for at least this quarter - or until the silliness of the mark-to-myth rules change.

Big Bucks: Economists say that firms using undocumented workers pay them less and thus gain a competitive advantage. Wow! Also, stopping the flow of undocumented workers often leads to firms moving production to where the cheaper workers are. And forcing firms to pay the undocumented the same as legal employees cuts the demand for undocumented workers but tends to chase the jobs abroad. They conclude that the employers demand for cheap labor will prevent actual enforcement of both immigration laws and equal pay laws.

Conspiracy: Haven't TARP, TALF, and all the trillions given/lent/guaranteed to Wall Street made the US Treasury and FED co-defendants in any prosecution of the guilty?

Porn O'Graph: Joy to the World Wall Street, 2009 Version.

SAR #9125

Collapse takes time.

On the Never Never: The Keynesean cure - government spending to replace absent consumer demand - will drive interest payments on US debt from last year's $172 billion to $806 billion a year in 2019. But we'll have other problems by then.

The Other Shoe: Analysts say that the world has passed peak oil, so any economic rebound will quickly drive oil prices above $100 a barrel, which will kill the recovery and start another round of decline. This cycle will repeat indefinitely.

For Want of a Nail: Credit card losses will mount with rising unemployment, and the faster unemployment rises, the faster banks will suffer credit portfolio losses. Unemployed customers also use their cards less, which will lower both the fee income and the amount of interest income performing credit card debts generate. Charged amounts dropped 5% in 4Q08 and 14% in 1Q09.

Planning for Failure: The New York (Albany) Capital District Transportation Authority reports an 11% increase in ridership for the last year. CDTA response to this success is to reduce service runs by 35,000 hours annually.

The Shouting: 70% of US banks expect loan delinquencies and losses to increase this year if the economy progresses as (rosy glasses on) forecast. So the economic downturn is all over. Maybe. Except, of course, for all the bad stuff that's going to happen.

Naturally: At the end of this recession the 'natural rate' of unemployment will be "markedly higher," perhaps as high as 7%, as hundreds of thousands of jobs have vanished forever, and millions of the unemployed will find it hard to get hired again and will have to accept lower earnings. It's natural.

Accomplishment: The disappearance of Bolivia's Chacaltay glacier, long predicted by global warming nuts, is finally fiat accompli. The 18,000 year-old glacier finished melting away early this year.

Circus: Private non-residential construction has fallen 5.7% from the 2008 peak, residential construction is 61% below the early 2006 pace, pending home sales are up 3.2% or 1.1% depending on who you read. In the center ring, foreclosures...

Trasher Island: There's a Texas-sized island of plastic trash floating in the center of the North Pacific gyre, composed of six million tons of plastic. Cleaning up the mess would bankrupt any country that tried. Another accomplishment made possible by petroleum.

Waiting List: Having learned that offering high-risk borrowers low down-payment loans lead to defaults, the FHA has insured $180 billion of new low down-payment loans to high-risk borrowers. But don't worry, it's all insured. Back in 2006 the FHA was on the hook for only 2% of mortgages. Now 60+% are FHA insured, so the banks won't be losing any money. Nope, not the banks.

Pudding: Wages are falling all across America. Why? Because unions would rather give ground than give up, because workers don’t dare protest, because they don’t think they can find other jobs. The stock market thinks reacts as though this were a good thing. Yea, the stock market doesn't think falling wages are a symptom of a sick economy getting sicker. Repeat after me: "Those with no income don't buy things."

Porn O'Graph: More are depending on the single-prayer health system.

SAR #9124

Weeds start out as green shoots, too.

Upping the Ante: Now it's 14 of 19 stress-test banks that need more capital (Citi may need $10 billion more and BofA "well in excess of $10 billion").

Difference: This weekend's bank seizures were different - one of them was Silverton in Atlanta, the nation's largest banker to other banks. Over 1,500 US banks were Silverton customers and nearly 400 banks were shareholders. It provided back-office services and lines of credit to many banks. Dominoes are expected to fall.

Prudent Prejudice: In a display of fear and ignorance, nations around the world are shunning Mexican citizens for fear of the flu. In enlightened New York Cinco de Mayo celebrations went on after a threat to ban them was cured.

Downlook: The European Commission forecasts economic contractions across the continent, with Germany falling 5.4%, the UK and France down 4% and the eurozone falling 4.3% in aggregate. This will come with a eurozone unemployment rate of 11.5%, which mahy well come with political changes.

Wealth of Nation: The government says that, as a group, American homeowners hold equity equaling 45% of the value of their homes. Some 33% own their houses outright, which leaves the other 67% splitting the remaining 15% of the equity. I've got my 0.25%, how about you?

Who Choses? WHO expects to produce 600 million doses of a vaccine against the H1N1 virus within six months. That's enough for one out of ten.

Smoke: Those who view the decline in industrial inventories as suggesting a Renaissance in demand are seriously misled. Manufacturers are letting inventories drop because they have no binding orders. None.

Journal of Prevarications. In a recent survey, 3 out of 4 doctors did not know that the Australasian Journal of Bone and Joint Medicine was not a peer-reviewed journal, but an advertising gimmick dreamed up by Merck to publish data favorable to Merck's drugs.

Promises, Promises: An Iraqi government spokesman, responding to questions about US plans to keep troops in Mosul, said Iraq will not extend the withdrawal deadline. However, the definition of 'combat' and 'troop' seem open to interpretation.

Clever: Need more capital? Convert government-owned preferred stock into common. Done; the numbers look better, it doesn't cost anything, and it screws the taxpayers.

Waste! Washington keeps saying they want the consumer to consume more because then factories can make more stuff. The economy would work perfectly if everyone would buy a car every year and then drive it off a cliff and buy another. And another. Cars, widgets, salad spinners - doesn't matter what. What matters is borrowing, buying, consuming, and repeating the cycle. Don't laugh, that's what the military-industrial complex has always been about. Borrow money, build stuff, blow it up. It's the American way.

Porn O'Graph: Weakly Income.

9122/Weekender

"No members of society – none – deserve to be victims of a violent crime. because of their race, their religion, their ethnic background, their disability, their gender... or their sexual orientation,"

Edward Kennedy.

Roundup: Much to Wall Streets dismay, unemployed workers make poor consumers. The March decline in customer spending gave the lie to the deceptive "green shoot" spurt of the prior two months. Just weeds.

Death Knell: A Gallup Poll reports that 32% of Americans have been spending less recently and 27% intend to save more and spend less going forward. Retailers do not view this as "going forward."

Physics Smysics: Capitalism's apologists inhabit an imaginary world with no constraints to economic growth, which can and will improve the lives of all mankind, one salad shooter at a time, forever and ever. Don't need no Second Law of Thermodynamics 'round here.

Dusting: The danger of global warming melting the vast ice caps in the Antarctic and Greenland is probably overstated, for there is a good chance that the layer of soot being deposited on the ice from our ever expanding coal-fired power plants may cause them to melt long before the CO2 that wafted the soot and dust up the smokestacks gets a chance to do so.

Moving On: 43% of Georgia's Republicans feel the state would be better off if it seceded from the US. Elsewhere it is reported that 25% of Americans do not finish high school. But like Texas, the US would be well rid of Georgia - both states get more money from Washington than they pay in federal taxes. Alabama, Louisiana and Mississippi seem to be good candidates, too.

Believe It or Don't: As unlikely as it seems, US manufacturing contracted again in April. Fifteenth consecutive month.

Yes, But. Chrysler is bankrupt, but that doesn't mean Chrysler is bankrupt. Not yet. Now we'll play a few rounds of 'surgical restructuring' that will magically allow Chrysler to produce cars and employ workers without cutting into the sales of other (GM) manufacturers and the livelihood of their (GM's) union employees, while letting suppliers slowly starve to death. Perhaps they should have practiced various ways of cutting up a pie first.

News, Good and Bad: Sales of Ford's fuel-efficient Fusion helped Ford grab a bigger piece of the auto sales pie, even as the pie got smaller. GM's sales fell 34% in the last month.

Relatives: An extensive examination of DNA markers of modern-day Native Americans showed that a particular non-biological variant occurred in all 41 of the populations studied, from Alaska to Chile. This strongly suggests that all existing Native American populations share a common ancestor.

Better and Better: Last week DHS saved the US from having a Frence plane with an leftist journalist passenger from flying over the ever-pure USA. Now DHS has included Mexican separatists, “black power” advocates, “racial Nordic mysticism” practitioners, black nationalists and anti-immigration extremists (unless they are elected officials) on the list of dangerous extremists.

Does This Dress Make Me Look Fat: Congress is warming up to pitch another bad idea into the mix: Cash for clunkers, wherein consumers with old, gas guzzlers get $1,500 to $5,000 government gifts to use toward the purchase of a new car. If they promise to convert the clunkers to electric propulsion, I'm for it.

Quoted: “The supposed omniscience and perfect efficacy of a free market stems from economic work done in the 1950s and 1960s, which with hindsight looks more like propaganda against communism than plausible science.” The capitalist ideology that undergirds economics in the United States has led the profession to be detached from reality, rendering it incapable of understanding many of the crises the world faces .

Porn O'Grah: Weakly Earning.

SAR #9121

Global warming is our most important accomplishment.

Reality Check: So far this is a "relatively mild" viral strain. How mild is one question, how widespread is another. Even the 1918 pandemic, which killed about 100 million, was lethal in only 2% of the cases. But even if it is just twice as bad as a normal flu season in the US it could kill 80,000. The scary part is the time frame involved, with a normal "flu season" lasting three or four months, verses a pandemic spreading in a few weeks. Remember, the US has a lot fewer hospital beds now, per capita, than the last big flu epidemic, 40 years ago.

Today's Word: Locavore, a person who eats food grown nearby. Used to be called people, now viewed as a temporary fad.

Unprecedented: Scientists say that the actual level of CO2 in the atmosphere is not the major threat, but rather the speed of the change of CO2 levels and the accompanying rapid change in the temperature of the environment. This is not a problem for Intelligent Design/Creationism, but evolution takes time. Generations and generations. "The rate of increase is much faster than only 10-20 years ago. You can almost see the changes taking place. Never before have CO2 levels increased so fast," he said.

Larry, Larry: The Dow was at 14,200. It fell to 6,440. Today it's at 8,168. Get a grip. Yes it is up nicely - 27%. But I'm still down 42%.

Hard Choices: The GOP is engaged in a serious debate over the future of the party. Should it embrace its conservative agenda ever more irrationally, or just disappear all together? All in favor, say "Aye".

Stop and Savor: The headline read: Catastrophic Quarter Is Averted as Job Cuts Help Profits Exceed Estimates. "Job cuts help profits." Why isn't that headline: Job cuts weaken customer base?

What's in a Name: Pork producers and Israel, among others, do not like the calling swine flu swine flu. Okay, why not something we can all agree to dis: Hedge Fund Flu.

Partial Credit: The results of the stress test are being delayed while the banks argue with the Fed over how the essay questions were scored. Maybe they should be graded on a curve.

Are We That Stupid? Because we have done nothing yet, now we must prepare for a world 4° C warmer. This used to be the 'worst case' scenario and is now the best we can hope for, accompanied by abrupt and irreversible climate shifts. And new studies show that it is the total amount of CO2 released, not the emission rate nor the atmospheric concentration that is the deciding factor. The longer we wait to Do Something, the quicker we will have to stop burning fossil fuel. Not cut back, stop. No oil, no coal. And, yes, we are exactly that stupid.

Who Loves Ya? The US Senate rejected the 'cram-down' measure that would have helped homeowners who have mortgages they cannot pay while penalizing investors who have mortgages that aren't being paid.

Factoid: House prices tend to deflate 3% per quarter until housing supply inventory is below an eight month supply. Even if no houses are built, demand is so weak and unsold inventory so high that it would take three years to reach that point. Let's see, 12 quarters at 3% compounded is a further house price deflation of... 40%?

Math Problem: How much potential gain do you see on the up side? How much potential loss is possible on the downside? Are you smarter than Warren Buffet? Why are there no yacht clubs for individual investors?

Porn O'Graph: Continuing Unemployment Continues.