SAR #12007

It's only funny when someone else steps on the banana peel.

Free Lunch: Freddie Mac will “forbear” mortgage payments from the unemployed for up to a year. Details were not immediately available, but massive abuse is easily predicted, as is the Republican reaction.

Advancing To The Rear: Acknowledging that the American Empire has crested and is in retreat, Obama announced that the US can no longer afford to blunder around the world causing unnecessary pain and suffering and will be reducing its military by half a million troops over the next ten years. In the future the Pentagon will focus on countering terrorism at home and containing the Chinese.

Datenpunkt: German factory orders fell 4.8% m/m in November and foreign orders fell 7.8%, while European retail sales declined 0.7%. Austerity, all around.

Bandwagon: The BLS reported 200,000 new jobs (42,000 of which were part time workers for places like FedX and UPS and will be gone next month) and an unemployment rate of 8.5%. Twenty percent of the jobs previously reported for November were revised away, leaving only 100,000. For the year, the economy added 1.64 million total non-farm jobs and the economy has 6.0 million fewer jobs than in 2007. The number of people not in the labor force (and thus not officially unemployed) is up 7.5 million since 2007 and now stands at 13.1 million. Labor force participation is now at a 27 year low of 64%,The real unemployment rate, using a realistic labor force participation rate, would be 11.4%. Following the BLS approach, when the participation rate reaches 58.5% there will be no unemployed people in the US and the stimulus will have worked.

The Art of War: The object of war is to inflict serious harm on the enemy, generally by military means, but the long history of warfare has often included blockades and sieges. The trade and financial sanctions being imposed on Iran by the US and its dependencies can thus be considered acts of war. As the sanctions reduce the options available to the Iranian regime, the negative costs for doing something catastrophically irrational become less and less. And this is just the beginning.

Speak Softly: Last week Spain's new leaders caved in to US State Department threats and enacted a version of the SOPA, giving copyright holders the right to shut down Internet sites by simply alleging infringement. No legal process, just their say so. Same thing is coming soon to the US, as part of the drive to eliminate tiresome aspects of the Bill of Rights.

Preview: Heavily armed Federal Protective Service officers, wearing body armor and accompanied by dog teams, surrounded the Leesburg, Florida Social Security offices and began stopping seniors and demanding identification in a search for "unauthorized persons involved in potentially disruptive or dangerous activities." DHS said it was "a random training operation". Training for what?

Lock, Stock & Barrel: As part of the negotiations seeking a 50% writedown on its debt, Greece has agreed that the new bonds to be issued would be governed by English law, which permits creditors to seize Greek assets when if the country defaults on its payments.

Warning, Curves Ahead: Following up on Bernanke's prodding Congress to 'help' banks and investors turn REO housing into rental units, Fed officials are publicly suggesting moves to help re-inflate the housing bubble market, such as having the Fed buy more MBS (that is, buy the dogs from the banks at inflated prices). They also are urging Congress to task Fannie and Freddie to "provide cheaper mortgages to a broader pool of homeowners." This, it is suggested, will help lower unemployment. Somehow.

Porn O'Graph: The good news in perspective.