SAR #10120

When a politician says 'we',  ask for a definition.

Progress Report:  According to General McCrystal, violence in Afghanistan is up 90%, roadside bombs have increased 240%, only a quarter of the country supports Karzai's government, and corruption is out of control - but things are looking promising.  It helps to squint a little.

Close, No Banana:  El-Erian says PIMCO won't buy Greek bonds until hell freezes over until there is “a sustainable solution to the nation’s fiscal crisis.”  That, and someone teaches the little PIIGS to fly.

It's Only A Paper Moon:  BP shareholders are $12 billion poorer from just one day's drop in share price.  The rig wasn't the only thing that collapsed.

Rate Of Change Changing:  Throw a ball up.  Just before it turns to come down, it slows and nearly stops.  That slowing in the rate of ascent is what's known as a clue.  Many 'leading indicators' are slowing in their rate of accent.  Wonder if it's a clue?

Complete the Sequence:  Greece, Portugal, Spain, Ireland, Italy, United Kingdom, United....

Action/Reaction:  The market is up again, pleased that the adults are going to bail out Greece.  But one of those adults is the IMF. The US is the majority contributor to the IMF and when it blows tens of billions saving the banks that bought Greek bonds, those tens of billions will come out of the US taxpayer's hide – at about the same time as the cheaper Euro kills export jobs in the US.  Party on.

Slippery Slope: The difference between showing your ID to get a library card and having to show a cop your “papers” on a dark street late at night is that librarians don't carry guns and the cop can put you in jail.

Mother Hubbard:  Now phosphorous production that has reached a peak and will decline and cause problems because there is no handy substitute. Look, we're running out of everything and not doing real good at finding substitutes.  Extraction industries follow a curve - ramp up, peak and then dwindle away – so could we stop with all the 'peak' this and 'peak' that? It has lost its dramatic impact.  Just assume that we’re running out of everything.

Essay Question:  What is 'productive investment' and when did you last see one?

The Quality of Mercy... Congress seems inclined to say that 99 weeks of unemployment benefits is enough.  Well, not enough, but all they're going to pay for.  Hundreds of thousands of unemployed voters have already run out of time, money and hope.  Now a few million more will.  Wonder how it'll all play out.

Lettering:  Neil Barofsky, TARP's Special Inspector General, says that his probe of an alleged New York Fed coverup in the AIG case could result in criminal charges.  Don't tell Little Timmy Geithner.

Quoted:  "The 20th century has been characterized by three developments of great political importance:   The growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy."

Action Figure:  In Iowa, GOP candidate Paul Bertoche wants immigrants captured, branded with an implanted microchip and let lose, so “we know where they are and where they are going.”  As long as they're working on the farm, they're okay.

SAR #10119

Why do they call them 'lessons' if no one learns anything?

Charge It:  Greece would be better off transferring their debt to a new Visa card.  They'd get air miles and not have to pay any more than the 26% interest they're paying now.

Reservations:  The argument in defense of Goldman seems to be that it was in fact a casino.  You wanted to bet on sub-prime, they'd take your money.  You wanted to bet against sub-prime, they'd take your money.  As long as every one involved understands that the big financial institutions are essentially bookies, the odds are known and the pricing and payoffs acceptable, fine have at it.  The customers wanted a chance to 'speculate', and they did.  Maybe we could get the Indians to run the investment houses, or put them on steamboats on the Mississippi.

Freedom and Unity:  Living up to it's motto, the citizens of Vermont have instructed their government to begin work on a single-payer health system.  You know, like Obama promised.

On The List:  The OK Senate overrode the governor's veto, making it state law that it is okay for your doctor to lie to you about you fetus's health, and forcing you to listen to a vivid (and misleading?) description of the fetus and have an ultrasound thrust in your face before having an abortion.  The laws will be overturned after the state wastes a bunch of money keeping the right wingers happy.

Homeward Bound:  The Census reports that home ownership in the US has reached a 10 year low.  And that's after pretending that 'homeowners' includes those with no equity and those underwater and those who have stopped paying the mortgage but haven't yet been evicted.

Enlightenment: Iraqi Prime Minister al-Maliki says that prisoners tortured themselves (by hanging themselves upside down, whipping and suffocating each other, beatings etc) in order to make his government look bad.  He didn't need the help.

Status Report:  Deepwater Horizon took $560 million to the bottom of the Gulf – about a mile down.  The replacement will run close to a billion. The blow-out preventer didn't, and as much as 200,000 gallons a day (an Exxon Valdez every 2 months... ) are spewing into the Gulf, and will be for at least three months – that's how long it will take to complete a relief well which may – or may not – stop the flow.  'Drill baby drill' isn't going to be near as popular along the coast from New Orleans to Tampa as it is on Palin's platform.

Un-People:  In Mississippi, lesbian students cannot go to their class proms and cannot have their pictures included in the school yearbook.  If a student is found to be a lesbian, all of the previous yearbooks in which she appeared will be recalled and the her images photoshopped out.

Cat/Bag:  According to NAM, only 30% of the 2 million manufacturing jobs lost in the recent Whatever will come back.  And those will dribble back over six years.

Stand On A Chair:  Germany (and the IMF) may bail out Greece, but if they do they will try to force Greece to get its budget deficit down to 3% of GDP by 2012.  That's not going to happen unless there is a huge surge in exports, and the world is pretty full of olives and ouzo.  Plus the budget cutting will lead to unemployment, economic contraction, deflation, and increased government spending on social support.  And that gets us back to increased deficit spending.

Daily Petard:  Sen. Chuck Grassley (R-IA) claims he "worked successfully to improve Medicare payments to doctors in rural states like Iowa and, in turn, access for beneficiaries, as part of the health care reform enacted this year."  But Grassley voted against the health care bill, claiming it was, “a government run plan to decide when to pull the plug on grandma.”

Quoted: “When it comes to economic growth and the future of mankind, there is nothing more precious – and more crucial – than cheap energy.” Study this graph to understand why the next quote is “Be afraid.”

SAR #10118

Why do we follow such people?

Morning Line:   Some folks are going to be surprised when Greece defaults.  Most won't be.  Some advice from the 1950's, “Duck and cover.”

Daily Petard:  “Iran doesn't directly threaten the United States,” said Secretary of State Hillary Clinton.  Then she added, “but it directly threatens a lot of our friends,” by which she meant Israel and that cleared things right up.

Stopped Clock:  The Party of No assures us that it will do all it can to block financial reform in the name of financial reform.

Scratch & Sniff:  In Arizona the police can stop anyone they want and demand to see their papers.  Never mind that US citizens are not required to carry identification, we're talking spicks and Mescans and towelheads and y'know, undesirables.  Republicans in Ohio think this is a good idea.

Rocket Science:  A Cornell study documents the obvious:  Good looking defendants are found innocent.  Attractive plaintiffs get larger settlements.

Teeter-Totter:  The headline was that the Case-Shiller report showed a y/y increase in house prices.  The 10-city index was up 1.4% and the 20 city index was up 0.6%.   But: 11 of the 20 cities showed declines, 6 cities were at four-year lows.    Nationally, February house prices were up 0.3% y/y and down 2% m/m, which was larger than the 1.6% decline from Dec to Jan.

Boilerplate:  The accused conspired with rating agencies, mortgage originators and hedge funds in a concerted effort to defraud investors.  Feel free to substitute actual names for the italicized items when preparing your indictment and/or lawsuit.

Apples?  Over 1,000 people camped out overnight in NYC in order to apply for a single job.  Elsewhere in lower Manhattan the recession is over and bonuses are back.

It's All Greek to US:  Sounding like the IMF lecturing Greece, Bernanke warns that “the American people will have to choose among making modifications to entitlement programs such as Medicare and Social Security, restraining federal spending on everything else, accepting higher taxes,” or all of the above.  Get out your magic decoder ring and translate “modifications” and “restraining”.

Better Mouse: In response to the US Missile Shield, Russia has developed a cruise missile that fits in a standard shipping container and can be put on a truck, a train and a ship .  Better defenses make better offenses – it's nature's way.  Be the first in your hemisphere to own one.

Paint By Numbers:  During the Current Whatever, those making over $150,000 have an unemployment rate of 3.2%, those in the $100,000 range are at about 4%, while over 30% of those who make less than $20,000 when they can find work cannot find work.  Gives new meaning to the term “The Great Divide.”

Twilight Zone:   The unknown is not as far away as you think.

Vision Test:  America does not have a real economy.  America has a phony stimulus-driven "free money" economy.  Public debt has replaced private debt in a futile attempt to keep credit-based consumption going long enough to start another bubble.  The real problem is that the consumer needs to save. But Americans cant save, they're living paycheck-to-unemployment check.  If you trace this back to the globalized dispatch of jobs abroad in exchange for Walmart's low prices, you're with me.

Another View:  A new book from the New York Academy of Sciences, based on over 5,000 published articles – most not available in English - claims that nearly a million people around the world have died as a result of the Chernobyl disaster.  This contradicts the WHO story, beloved of the nuclear crowd, that only those directly involved in the disaster were seriously impacted.  Don't tell Lovelock.

SAR #10117

Peak oil? I don't use much oil.  Now gasoline, there's a worry.

Litter Box:  The market welcomed Caterpillar's quarterly earnings as proof the economy is improving. Caterpillar posted profits of $233 million, up from prior year loss of $112 million, but overall revenue dropped 11%. Machine sales were up 11% in Asia, but down everywhere else: -15% in Latin America, -18% in Europe, and -21% in North America.  Revenue down, sales down, market up.  Sounds about right.

Thought Experiment:  What would the reaction of the press and the GOP be if the Tea Partiers were Americans of Arab descent?  Or just ordinary African Americans who gathered in the tens of thousands, angry, well armed and ranting incoherently about taking back the country?

Trees/Forest:  There were well over 100,000 people, perhaps 200,000, gathered on the National Mall for the Earth Day rally.  Even though there were ten times the number of people there than the Tea Partiers bussed in, they did not get one-tenth of the media coverage.  Maybe they should carry guns instead of signs, to show they are serious.

Grimm Fairie Tale:   The Washington Post says the IMF has “a long history of stabilizing economies and solving global financial problems." Actually, having the IMF show up to 'help' is second only to the Grim Reaper making an appearance.  The only advice you hear from the “helped” is “Run away, run away!”

The Disillusioned :  Like all of the generations since WWII, young people are told that if they study hard, get an education and work within the system, good jobs and the American Dream would be theirs.  As this year's graduates have discovered, this is a lie.  They are graduating with immense debts and very dim employment prospects.  They will not be setting off on a great adventure, they will be returning to mom and dad, defeated and depressed.  Welcome to the world Wall Street, globalization, and the free market have created.

The Law & The Profits:  “I would still like to know why buying CDS 'insurance' against your own issue of bonds deliberately engineered to default is NOT a form of insider trading.”   J. H. Kunstler

Hand/Glove:  Kuwait says that global demand for oil will increase by 5 mbd in the next 5 years. Nicely enough, Saudi Arabia says it has 4mbd  in “spare production capacity” on hand. Note the word “capacity”.  I have the capacity of spending tens of thousands of dollars – I just don't happen to have them.

Windage:  What are the odds you – or your doctor – know the odds?

Take Home Test:  Phosphorus is essential to human life.  There is not a lot of it and we are rapidly running though it. When it is gone there will be Serious Consequences.  No snarky comment, this stuff is serious.  Study up.

Q&A:  Is politics a joke?   Yes, and it's on us.

On Morals, Ethics and Capitalism:  While we here at Some Assembly Required do not often indulge in the nuanced reasoning of complex problems, that does not mean we do not appreciate it in the hands of a skilled practitioner.

Peace In Some Time:  Kosovo Albanian “special police” ( ie. armed thugs) broke into Serbian-based cell phone and landline operators, cut cables and removed transmitters and other equipment.  Gives a new meaning to 'dead zones'.

SAR #10116

The country has been captured by knaves.

Blood In The Water:  More chum to draw the lawyers to Goldman's doors, this time in the form of emails from one-time darling Fabrice Touree, who wrote that the CDOs he was structuring were"pure intellectual masturbation” and were “a ‘thing’ which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price.”  Maybe a jury will help with that.

Teaching Point:  The price of crude-oil futures has increased more than 70 percent over the past year.

Repeat After Me:  The crisis in Greece is over.  The crisis in Greece is now over.  The crisis in Greece is over now, really . But if Greece doesn't clean up its room, Germany won't give it an allowance.  A “tough restructuring program” lasting for many years is an “unavoidable and an absolute prerequisite” for Greece to receive the aid it needs.  Strikes, walkouts and riots will be the “unavoidable and absolute”  byproduct, too.

Financial Reform:  Here's an idea, let's make banks be depository institutions and set up a Federal Gaming Commission to oversee the gambling on Wall Street.

Long Division:  Take all the houses now on the market, add in all the houses the banks have on their 'to do' list, then add in all the houses that will most likely end up in foreclosure as the months go by.  Divide by the going monthly sales and find there is a 9 year supply of homes waiting to be drive down housing prices.

Coincidence?  93% of the 2006 vintage AAA-rated subprime MBS are now junk bonds.  Nothing to see here, move along.

Water Is Wet!  Carefully crafted surveys have revealed that the American public, by and large, are pissed off about being lied to and screwed over by the government and Wall Street.  A surprising number actually felt their opinions matter.

Words, Carefully Chosen:  The lawyer who lead George Bush's Office of Special Counsel has agreed to plead guilty to “failing to truthfully answer questions”.

Low Mileage:  The same guys who told you that the little old lady's car had only been driven on Sunday are claiming they've paid back the government money they borrowed.  Well, they did, but they borrowed that money from another government bailout-program.  And what they paid back was just one of several different gobs of billions they borrowed.  It's like Geithner claiming the bailouts only cost the government $87 billion, if you ignore the $2 or $3 trillion that no one wants to talk about.

Baby Steps:  The next Supreme Court nominee should know how to send a text message, but be too modest to Twitter.

Irony:  AIG, which went broke insuring the crap that Goldman Sachs originated, is going to have to pay the fines levied on Goldman execs and make up the losses others suffered through their acts and omissions.  This would seem nearly hilarious if AIG wasn't a wholly owned subsidiary of the US taxpayer.

Double Bubble:  The greater fool school of investing says that the recent Whatever is over and that up, up and away is the path to the future.  And perhaps they are right in the short term.  They just don't read to the end of the chapter, where it all comes tumbling down.

Porn O'Graph:  Connect the dots, add an arrow.

SAR #10114/Weekender

If it becomes too hot, too cold, too dry or too wet, things stop.

A Brief Pause:  The Greek government has thrown in the towel and is “accepting” 45 billion euros from the EU and another 15 billion from the IMF, along with severe budgetary restraints.  The market wasn't impressed. Greek civil servants will strike to protest these “barbaric” conditions while the opposition party calls the IMF conditions “a premeditated crime against Greek society.”

The Question:  What happens when all the fish are gone from the seas?

Fair Warning: The most likely outcome of the financial reform circus is a large, convoluted bill that lulls people into thinking something's been done to make the system safer if not fairer.  Real, effective reform would fit on a single page.  The shorter it is, the fewer loopholes get stuck in.

Efficiency:  Larry Summers explains that breaking up the big banks would make things worse, because it would be inefficient to bail out a whole bunch of little banks when we can quite efficiently just give the money to Citi, Goldman, JPMorgan and AIG. Ah, the holy grail of government efficiency.

Fashion Sense:  Newt Gingrich thinks that the Tea Party will become “the militant wing of the Republican Party.”  He did not state a preference for Black or Brown shirts.

Easy Does It:  Putting down rumblings from dissenting underlings, the Fed's Board of Governors is intent on continuing the free-money-for-bankers program.

Plotline:  A woman discovers she has breast cancer and her insurance is promptly canceled due to fraud.  She searches on-line and finds lots more women with the same experience. Investigation shows that the insurance company has a secret computerized program to find some minor technicality on which to claim fraud and deny nearly all breast cancer claims.  Sounds like a recent “The Good Wife” but is actually a possible “60 Minutes” story on WellPoint, one of the country's largest (and most profitable) health insurers.

Election Recount:  A series of bomb attacks in Baghdad killed at least 61 people and wounded more than 100.

Nuclear Family:  Saudi Arabia is planning to build the first nuclear power plant in the Arab states, with hopes of powering the new part of the capital, Riyadh, completely by nuclear energy.  Qatar, Kuwait, Bahrain, the UAE, and Oman all are studying the possibility of getting their power from nuclear plants, too.  They all say it will let them export more of their oil and gas – assuming that by the time they get the power plants built they have any oil or gas left to export.  Makes Iran seem prescient.

Take a Number:  Los Angeles has already closed 17 civil courts and will close another 50 by the end of summer.  The county plans to keep the criminal courts running, if enough money can be found.

Smelling Salts:  New house sales soared 26.9% m/m as the government bribery program winds down.  Previously owned houses saw a 6.8% rise in sales. Best to wait a couple of months and see what the market looks like after Uncle Sam backs off.

Poor Me!  Fellow named Barouh hid $10 million in foreign bank accounts from Uncle Sam for at least 7 or 8 years.  He claims that his tax fraud was a compulsive behavior forced on him because:  When he came to the US as a child he didn't speak very good English.  Growing up in Colombia was difficult because he was discriminated against for being Jewish.  And because of his parents experiences in the Holocaust, even though Mr. Barouh (who's only 65) was not born until the war was over.  He is also an orphan, now.

Porn O'Graph:  One more 25% increase in new house sales and we'll be back to 1991!

SAR #10113

When the going gets tough, the tough cheat.

Tail Wags Dog:  The Comedy Channel surrendered to a death threat from a fanatical Islamic website and censored a portion of last week's South Park. John Stewart's reaction was an immediate classic.  Too bad NBC, CBS etc. didn't lead with something similar.

Ratings For Sale or Rent:  As far back as 2006 employees at S&P and Moody's knew they were part of an immense charade, handing out unearned ratings on CDOs.  “Let's hope,” one wrote, “we are all wealthy and retired by the time this house of cards falls.”  Another acknowledged a deal “could be structured by cows and we would rate it.”  You get what they were paid for.

All Greek To Me:  Portugal, too, has been caught hiding their debts inside a wooden horse.

Siamese Twins:  Both China's oil consumption and it's GDP grew about 12% y/y in the 1st quarter.  The world's oil supply is expected to increase about 1.3 mbd this year, while China's consumption is expected to grow by about the same amount.  Red Queen, running.

How's Housing?  Sales of existing houses were up 6.8% m/m in March. The Federal Housing Finance Agency reported a 0.2% decline in house prices m/m in February,  the y/y inventory level of existing houses had declined for the last 20 months and still shows an 8 month supply.  Houses are expected to drop about 13% in value this year, either getting worse more slowly, or very slowly getting better, while over in the commercial markets, Fitch Ratings expects CMBS defaults to exceed 11%.

Disguise:  Turns out a black swan can look a lot like a volcanic ash cloud.

If You Give A Mouse Time Off:  European workers have long since institutionalized leisure as a part of life.  Now the EU sees that just having time off is not enough.  Pensioners, youth in the 18 – 25 age bracket and families in “difficult social, financial or personal” circumstances will be entitled to subsidized travel, because “tourism is a right”.

Indictment:  “We have failed and they have won.”  And we know who 'they' are and do nothing.

Cell Shaker:  While the government warns that Americans eat too much salt, nutritional scientists report that humans naturally regulate their salt intake within a narrowly defined physiologic range. They found that Americans’ average salt intake falls well within this range. Like all nutritional claims, take this with a pinch of salt.

Fuelishness:  Logistics is the central discipline in modern warfare – getting the troops and their equipment and their supplies where they are needed when they are needed.  And essential to that enterprise are the fuel supplies that keep the other supplies moving.  Naturally the process is privatized in US war zones, and naturally it's all done on no bid contracts and the local pashas get their cut – until they are overthrown and the next group gets in line.  Billions of taxpayer dollars, of course.

Steamed Streams:  A team of hydrologists and ecologists have found that water temperatures in rivers and streams throughout the US – from the Colorado to the Hudson – have undergone “statistically significant long-term warming”.

Room Service:  At 3 am the Holiday Inn in Monterrey Mexico was over-run by 50 masked gunmen who blockaded the streets, shot up the place and made off with at least three people. Used to be tourists worried about Montezuma's revenge

SAR #10112

Just because you can't explain it doesn't mean it's not real.

Tourre's Syndrome:  There are seven more Goldman deals similar to Abacus for which AIG wrote credit default swaps, according to Neil Barofsky, TARP special inspector general, who went on to single out Blackrock for scrutiny.  Many others think there is a lot more fraud to be disclosed.

The Empire Stirkes Back:  The IMF is trying to assume the mantle as the world's financial regulator, with it's first act being to levy taxes on banks' balance sheets and bonuses.  Did I miss the election?

Creative Speaking Workshop:  Some say that Mitch McConnell and the No! Band cannot possibly block financial reform in the face of the public's overwhelming desire to hobble the beast.  But that ignores the right's ability to invent its own reality and to sell that invention to the public.  They will claim that blocking reform is the best thing to do because Wall Street is in favor of reform.  Don't try being rational, rationality is rationed.

Quoted:  “I think it's more likely we don't do well from here,” Professor Robert Shiller on the housing market.

Which Devil?  Bishop Paproacki, who blamed the devil for sexual abuse lawsuits (that's fine as long as the church gets blamed for the abuse) has been named Bishop of the Springfield, Illinois diocese.  Paproacki feels “The settlement or award of civil damages is punishing the wrong people, namely the average parishioner or donor whose financial contributions support the church.”   Huh?

Mirror Image:  For centuries European Empires roamed the world, snatching up whatever resources they wanted.  The the American Empire came along and bullied the world into selling it the resources it wanted. Now China is buying up needed resources – oil and land mostly. Someone should stop them!

Fine Distinction:  A fine essay on trust, the kind you can buy and the kind that's priceless.

Stirred, Not Shaken:  We were told, based on climate models based in turn on then current research, that while the Arctic ice would melt, and Greenland too, slowly, Antarctica was solid.  And a good thing too, for if the Antarctic ice were to melt, the seas would rise 200 or more feet.  Study of recently obtained ice cores has shown that even the vast East Antarctic Ice Sheet has melted before.  At least three times, one of them quite abruptly.

Observation:  Enron came up with a foolproof business model – blatantly steal billions, knowing that when caught the company will pay a few million in fines and the executives get to keep their compensation.  Goldman Sachs watched and learned.

The Endless Summer:  Declining tax revenues are not only shortening the school year, school districts around the country estimate that some 300,000 teachers will find their jobs eliminated at the end of the current term.  Enjoy your vacation.

Connections:  Networks that are robust on their own become prone to catastrophic failure when interconnected with other networks.  Some are obvious – electrical systems, highways, water supplies, computer networks, financial systems.  And the volcanic disruption of air transport has pointed out the dependence of foods, medicines, businesses and the global village on the interconnected air transport networks.  The biggie: The globally interconnected communications systems.

School Daze: “...in this country you either sit down, shut up and do what you’re told, or you get diagnosed and drugged.”

SAR #10111

Done well, crime pays.

Plotline:  A lot of folks are hoping that Iceland's volcanoes are like American lives – No Second Acts.  (But the nearby Katla volcano typically erupts every 80 years or so. It's overdue.)

Spring?  In California 4% fewer houses received default notices during 1Q 2010 than in 4Q 2009 and 40% fewer than 1Q 2009.  Either things are looking up or the banks are running out of places to foreclose.

Raining on the Parade:  An energy analyst who has spent most of his 80+ years in the oil and gas business says that the curative powers of shale gas have been, to put it politely, overstated.  He points out that shale gas makes up only 6% of the US supply, that shale gas wells deplete exceptionally fast (45% in the first year), and that the drilling rig count for conventional wells – where 94% of the gas comes from – is 70% below the pre-crisis levels.  He expects the summer supply shortfalls to drive prices above $8MMbtu come fall.

Feelings:  A current Pew survey revealed that over half of all American households have felt a direct impact from job losses during the Current Whatever, which may explain why 92% felt the economy is in bad shape.

Better Mousetrap:  BofA is formulating a plan that would let the unemployed miss as many as nine monthly payments while they look for a job.  The missed payments would be tacked onto the end of the mortgage, not forgiven – this is a bank, after all.  If after 9 months there's still no job, BofA would give them $2,000 for mowing the yard and such and toss them out.

Hot Sheets:  The Taliban have checked into a recently abandoned US base in a remote area of Afghanistan.  The Americans were redeployed and let control of the area revert to the Taliban, taking and holding the land being so Early 20th Century.  Wars last longer and are more profitable if you can take the same hill or village several times.

MPG:  In February 2010. Americans drove nearly 3% less than the previous February.  This is the second consecutive month with a y/y decline in miles driven.  It was surely due to the deep snow and not the increased price of gasoline.

Heartbreak:  Much to the sorrow of the righteous help-thy-neighbor haters, research shows that unemployment payments do not cause nor extend unemployment. If there were no extended benefits the unemployment rate would be a scant 0.4$ lower.  The problem is not lazy workers, it's lazy demand.

It's All Over: Bill McKibben's new book, Eaarth is getting a lot of positive reviews.  Following up on his popular End of Nature, McKibben argues that global warming has so changed the planet homo sapiens grew up on that it is a different place and needs a new name.

SAR #10110

Amazing what one rogue trader can do, eh?

Establismentarianism:  Goldman Sachs took a few moments off from screwing their customers and thumbing their noses at the SEC today to announce they would be paying $5 billion in bonuses for their triumphs in the first three months of the year.  That is a tad over $9,000,000 per hour. What's the wording of the RICO statues?

First Thing:  Literally hundreds of thousands of travelers are stranded all over Europe.  Farmers in Kenya, Chile and New Zealand are losing tens of millions because they can't get their produce to markets in Great Britain and Northern Europe.  Airlines are loosing $200 million a day in flight revenue.  Of course it's the airlines which are prattling about a bailout.

Carrousel:  In yet another “major victory against al-Qaida in Iraq™” US forces have once again killed the organization's two top leaders.  Peace, however, did not immediately break out.

Jesus Wept:  Father Gerhart Gruber, former vicar-general for the archdiocese of Munich, says that last month church superiors pressured him into taking the blame for things Joseph Ratzinger, now Pope, did in the case of a pedophile priest 30 years ago.  Do you call this the smoking gun, or just another burning bush?

Things Not Thought About:  At the height of the bubble, there was $11.95 trillion in outstanding mortgages.  Through payments, default write-offs, foreclosures and such, that has decreased to $11.68 trillion – a 2% drop.  At the same time the value of the houses securing these mortgages has dropped 30%.  Move along, nothing happening here.  Move along.

Devil/Details: Senator Tom Coburn (R-OK) pledges to cut $300 billion is “waste, abuse, fraud and inefficiencies” out of Medicaid's $280 billion budget.

Values:  Citibank reported a net income of $4.43 billion for the quarter. ExxonMobil made $6.05 billion for the last quarter of 2009, drilling for, finding, producing, refining and delivering petroleum products like gasoline, which it delivers to the local gas station for about 10 cents a cup. What did Citibank do?  It charged the merchant 2% or more of the sale to let you use a credit card to pay for the gas, then charged you 14% to 28% or more interest, plus miscellaneous fees, for using the card.

Podium Note:  “If financial sector growth is so good for the real economy it ought to be easy for its defenders to demonstrate this empirically.”

A Few Gold Men: “ You want the truth?  You can’t handle the truth.  Son, we live in a country with an investment gap.  And that gap needs to be filled by men with money.  Who’s gonna do it?  You?  You, Middle Class Consumer?  Goldman Sachs has a greater responsibility than you can possibly fathom.  You weep for Lehman and you curse derivatives.  You have that luxury.  You have the luxury of not knowing what we know: that Lehman’s death, while tragic, probably saved the financial system.  And that Goldman’s existence, while grotesque and incomprehensible to you, saves pension funds.  You don’t want the truth.  Because deep down, in places you don’t talk about at parties, you want us to fill that investment gap.”  Brilliant.

SAR #10109

Who's going to kiss it and make it better?

Dominoes:  Merrill Lynch, too.

Decoder Ring:  Algeria's Energy Minister says OPEC can do nothing to keep the price of oil from rising “because the increase in prices is not led by the lack of supply, but it is really led by the economic recovery."  Usual prize for the first to explain what this means.

We've Only Just Begun:  Did Goldman commit fraud?  Yes, blatantly. The SEC, Connecticut, New York, Great Britain and Germany all want a piece of Goldman.  The charge:  Creating securities that were bound to collapse in value and sticking customers with them, in order to profit from their collapse.   All 41 Senate Republicans have declared their opposition to financial reform.

Thank You Note:  After the US taxpayers bailed out GE, imagine our surprise to learn that it won't pay any US taxes for 2009 because all their profits were earned overseas – they say.

Tree Falls In Forest:  In the last month we have been warned that peak oil is fast approaching by:  The UK Industry Task Force on Peak Oil and Energy Security,  Kuwait University's College of Engineering and Petroleum, researchers from Oxford University, Conoco Phillips, the US Department of Energy and the US Defense Department.  Peak oil has already happened in the United States, in Australia, Britain and in 49 out of 65 of the world’s oil producing regions.  But it still doesn't make a ripple in the mainstream media.

Cloak of Invsibility:  When pundits and prophets go on about the banks not wanting to reduce the principal on mortgages, isn't it Fannie and Freddie that hold most of the US mortgages or stand behind MBS they've bundled?

Drilled, Baby, Drilled:  Offshore drilling was going to preserve our petroleum paradise, the Gulf of Mexico was going to give us 1.7mbd, maybe more.  Really?  Remember Thunder Horse , Neptune Chicontepec?  They were going to yield 500,000 bpd, but have already dropped to 120,000 and falling.  Production for the entire Gulf, despite the best and most advanced technology, fell 250,000 bpd from September 2009 to January.

Tide's Out:  The volcanic ash flight cancellations are doing more than delaying travelers – it is bringing home to shoppers in Britain just how many of their fresh fruits and vegetables arrive by air – because they are not arriving, shelves are emptying, and prices rising.  An illustration of the food chain's vulnerability to transportation problems, such as petroleum shortages.

Draining The Swamp:  Has the fever broken, have the chills diminished? Are we cured or even recovering?  Moody's doesn't think so.  It has further downgraded $42 billion in 2005-07 subprime RMBS  (hard to imagine they had any value left) and warned of  “continued performance deterioration in subprime pools”  which is likely to worsen further as still-falling home prices and high unemployment trigger more defaults.  It also warned it was “re-evaluating” $140 billion in pre-2005 RMBS.

Me, Too: Researchers have discovered a swirling concentration of plastic debris covering thousands of square miles in the Atlantic, to go with the two huge garbage gyres in the Pacific.  There is no plausible way to clean up the oceans, nor to stop mankind from throwing plastics away as though 'away' was in another universe.  From Mother Nature's point of view, humans are as disposable, but more degradable – except for the tiny bits of plastic we get when we eat fish.

Porn O'Graph:  You no longer have a dog in this fight.

SAR #10107/Weekender

Madness is contagious.

Skunks Have Stripes:  Goldman is being charged with fraud. The market dropped a hundred points, pretending this was news.

Gift Horse's Mouth:  JPMorgan 'earned' $3.3 billion in the last quarter, some of it coming from Uncle Sam paying them to borrow money.  Right. We paid JPM 0.05% to use $271.9 billion of our money – mostly by lending it back to us.  Nice work if you can get it.  We're standing at the other end of the horse.

Partly Cloudy:  Mitch McConnell pretends to believe we  “must put an end to taxpayer funded bailouts for Wall Street banks.”  Time for an up-or-down vote, put up or shut up, Senator.

Diagnosis:  The health care reform law insists that at least 80% of every premium dollar go to medical costs.  So the insurance industry got right to work, reclassifying administrative costs as medical costs.  WellPoint, for example, "has already 'reclassified' more than half a billion dollars of administrative expenses as medical expenses."  A full recovery is expected.

Party Game:  Define “Bank”.

Beef, It's What's For Dinner:  Scientists examining bones left behind at the Donner party's winter campsite discovered no evidence of human remains among the bones of cattle horses, deer and dogs.  Another one bites the dust.

Lemonade, 2¢ A Glass:  BofA claims a $3.2 billion quarterly profit, mainly because it set aside $3.6 billion less for potential losses this quarter than last, even as the bank's net charge-offs grew by $2.4 billion to $10.8 billion for the quarter.  Bonuses all 'round!

Asked and Answered:  Is the consumer back?  Yes, but god knows how he got here, what she's using for money, and why nobody is paying sales taxes.

Leftovers:  Saudi Arabia’ growth in demand for petroleum products is the world’s second largest, accounting for 11.7% of the world's increased demand this year.  We get to bid on their leftovers.

Dismal Science:  In order to pretend that economics was a science, economists started using lots of numbers.  Eventually colleges got embarrassed and decided to teach some real math to economics students. But the curriculum was already overloaded, so something had to go. Economic history got jettisoned, which explains most of what has happened recently.

Seconded:  Present-day America and the People's Republic of China are both run by a small financial and political elite in largely inherited positions.  Who's your daddy?

Knee Jerk:  Scientists in New Zealand have been given permission to put human genes into goats, sheep and cows for the next 20 years, to see if the animals will produce human proteins in their milk.  The object is to make pharmaceuticals.  I've read Oryx and Crake, and I'm worried.

Why?  The Library of Congress is going to digitally archive your “tweets” for posterity, between the speeches of Abraham Lincoln and the novels of Herman Melville.

Something Else:  Phosphorus is critical in our food supply, both as a fertilizer and as a mineral in our diets.  For plants it is as necessary as water. It is mined.  And it is running out.  Projections range from 2034 to the 2070's, but all involved agree, when it's gone we are going to be in big trouble.  Go ahead, have another kid.

Porn O'Graph: Democratic Capitalism.

SAR #10106

More than half your taxes go to kill people.

Weakly Spin Cycle:  New unemployment claims rose to 484,000, up 24,000 from last week.  The 4-week average was 457,750, up 7,500.  The increase was blamed on the Easter Bunny.

Returning the Favor:  The economy is picking up, lifting the price of oil Soon the increased price of oil will bite the hand that feeds it.

Unforgiven:  There is a lot of discussion of how to 'modify' mortgages, who should get screwed and by how much.  Bottom line is that the government (you the taxpayer) will pay off part of the first mortgage, part of the second mortgage, pay some side bribes, and then watch the price of houses continue to fall, then rinse and repeat.  It is more extend and pretend and not an ounce of solution or resolution.  But the real question no one wants to address is this:  If you bail out the guy across the street because he lost his job or bought more house than he can afford etc, what are you going to do for me?  I vote,too.

Essay Question:  In several thousand well chosen words explain why JPMorgan can claim a $3.3 billion profit and not repay part of the $41 billion it owes the taxpayer.

Back At It:  One of the dumber things we do is celebrate the ridiculous profits the investment banks make for doing nothing useful.  JPMorgan claims a $3.3 billion profit but hasn't made a single widget and hasn't lent any money to anyone who wanted to make widgets.  It is all based on borrowing from the government at 0% and loaning the money back to the government at 4%.  Then they dress up the books by pretending their assets are worth way more than they really are, when everybody knows they are pretty worthless.  They pay their executives big bonuses while pretending they made an actual economic contribution.  Feather merchants, one and all.

Dead and Gone:  What's more important, alternative energy or the view from Nantucket's mansions, an Indian sunrise ceremony and a dead man's wish.  Can't have none of that “destructive” progress 'round there, nor a wind farm 5 miles out to sea.

Escalator:  Nearly a million properties received foreclosure filings in the first quarter, a 16% y/y increase.  March filings, at 367,056 – a new record, were up 19% m/m.

None Dare Speak Its Name:  Public debate over the dimension and timing of the coming supply crunch in petroleum is couched in terms of oil supplies.  It's a supply problem, they say.  Production of conventional oil has peaked and stuck around 74 mbd for 5 years now, despite record high prices.  Putative experts say global liquids production (now at 86 mbd) will grow to 95 mbd by 2020 – even while production of conventional oil declines.  At $200 a barrel there will be surprisingly little demand, so there will not be a supply problem.

Exponential Math:  Singapore's GDP was up 32% in 1Q'10, while China grew 11.9% .  Quick, how long can this go on, in that the things that caused the Great Recession have not been fixed?

Numbers:  A record 44% of the nations 15 million unemployed have not worked in over 6 months, and 4 million of them have been idle for over a year.  Just as the Great Depression scarred a generation, this will leave a mark on all the victims, many for a lifetime.  Most will never regain their career paths, many will never fully recover.  Nor will their children.

Census Data:  Maryland and Virginia scientists report there are 658,000,000 blue crabs hanging out in Chesapeake Bay, the greatest number since 1997.

Porn O'Graph:  A less-on in taxing the richer.

SAR #10105

Failure is individual, keep a bag packed.

When Will They Ever Learn? Retail sales are up 1.6% m/m and up 8.2% y/y.  Where is the money coming from?  Who keeps giving these people credit, and why?

Full Faith & Credit:  Given current and projected levels of US debt, in Gold We Trust may be both inevitable and disillusioning. ' Fiat' is the government's way of saying take it or leave it.

A List:  Most Americans see the financial system being as corrupt as the political system.  They are right.  The American Dream (and American's money) is being brazenly stolen in plain view on the public square.  Start with the acknowledged manipulation of the gold and silver markets, as well as the prices of most commodities and futures.  Include the fake and non-existent gold bars in depositories, no prosecution for thievery at the top or for cheating the customers and screwing municipalities here and abroad. Don't forget to include accountant-assisted theft, fraud and insolvency, our Ponzi's-are-US  Fed and Treasury, and a usurious 29% as the normal interest rate on credit cards.  We are all living on the never-never in a world that shouldn't be.  But the market's up 100 points.

Fools R US:  Stealing the Fed Chairman's traditional role as First Cheerleader, Treasury Secretary Geithner has announced that every day in every way everything is getting better and better , faster than expected and faster than any other developed economy. We’re number one!

Once More, With Feeling:  We just finished – globally – the hottest March on record (2 data sets) or tied for the hottest (NASA data).  It was the hottest first quarter according to all three sets of measurements.  This is especially noteworthy because we have been in “the deepest solar minimum in nearly a century.”  Of course I was paid by the world-wide conspiracy of scientists to say that.

"Materially Misleading":  As it was sinking beneath the waves of mismanagement, Lehman Brothers created a company called Hudson Castle and used it to shuffle investments off its books as it collapsed. Hudson Castle pretended to be an independent entity, but it was controlled by Lehman. Hudson Castle borrowed money and then lent it to Lehman. Wonder who got to keep the profits.

Hamsters: After huffing and puffing as hard as possible, the government's efforts at resuscitating the underwater homeowner has resulted in 75% of those “helped” by programs like HAMP being still underwater.  Drowning in shallower water is counted as a success.

Really Darjeeling:  Just like Boston in 1773, the great unwashed are being manipulated by cries of patriotism and unfair taxation for the benefit of the rich and powerful.  Once again it is the moneyed leading the ignorant toward goals they do not comprehend.

Resolution and Reform:  The economists say American households are trying to reduce debt levels.  But slowly.  Household debt has dropped from 96% of GDP in 2007 to 94% of GDP in 2009.   Sticky.

Silver Lining:  If you cut out eating fruits and vegetables and stop driving your car around, your world is deflating.  Even with these included, the CPI went up only a measly 0.1% in March.  You can put off worrying about hyperinflation till next week.

Quoted: “The planet on which our civilization evolved no longer exists.” Bill McKribben.  Read it and weep.

SAR #10104

Victim:  A priest, politician, or banker who got caught.

Go Away, Kid, Y'Bother Me:  On principle, the big banks, sitting on 11 million underwater mortgages worth nearly a trillion dollars, do not like the idea of giving Joe Public a break on the principal he owes.  Cut the balance for a few and everyone will have their hand out, lined up like Wall Street banks begging for bucks from Washington.

Late Comers:   The International Energy Agency has finally made it to the supply/demand garden party, declaring that - despite the Great Recession – oil consumption in 2010 will be a record 86.6 mbd, besting the previous (2007) record of 86.5 mbd.  The agency also said that rising oil prices would stall economic recovery in the developed world and questioned “the sustainability of prices higher” than $80 a barrel.  It also worried that “Capacity constraints, both in production and refining, have increased the potential of supply falling short of demand.  Given this delicate balance of supply and demand, even a disruption of relatively small volume can have a significant impact on the market.”  All that and never once mentioning Peak Oil.

Diplomacy:  Morgan Stanley put out a note commenting on the distance between the market and reality.  “Complacent” was the nicest thing they said.

Self-Hoisting Petard:  Rush Limbaugh asked  “Was there no union responsibility for improving mine safety?  Where was the union here? Where was the union?”   First, the question implies that worker safety is not a management concern.  Second, there was no union, Rush, because after 70% of the miners signed union cards, Massey Energy told them that if they voted for a union, the mine would be shut.

On Killing Various Civilians:   The Defense Department's cut of your tax dollar is a little over half; are you getting your money's worth?

Buck Rogers:  Scientists at MIT report a breakthrough in their attempts to replicate photosynthesis.  The hope is to manufacture energy from water using only sunlight as an energy source.  GE's Appliances and Lighting division has announced a 9-watt LED with a light output of a 40 watt incandescent. God bless them all – because we do need “this snake oil science stuff.”

Defined:  The nation runs on credit, which is actually debt.  And debt is simply a marker placed on tomorrows income, tomorrow's work. But “debt” is just a shorthand way of keeping track of how many of your tomorrows are no longer yours.

Unmentionables:  Quietly, so as not to interrupt the giddiness in the markets, consider these points:  Earnings, even with the new fast-and-loose accounting rules, are pitiful.   Housing customer traffic is dead.   Eleven million Americans are unemployed.  House prices are still falling.  The savings rate is approaching zero again.   Go ahead, buy some stock.

Crime and Punishment: The Chinese coal scuttle that rammed the Great Barrier Reef has cut a 2 mile long gash into the delicate coral.  What possible punishment would be adequate?

Out of Town Try-Out:  A 1650 x 650 foot hunk of ice broke off the Hualcan glacier in Peru, crashing into a lake, causing a 75 foot high tsunami and killing 3.  Peru is home to 70% of the world's tropical icefields – all of which will be gone within 20 years.  Scale this up by thousands to imagine coming attractions for Greenland.

Take the Money and Run:  If you are thinking about selling, do it.  “The housing market is more precarious than ever.”  Prices have to fall 20% - 30% to reach their 20 year average.  Inventory is enormous and the hidden overhang is humongous.  By 2011 there will be nearly 25 million underwater houses - up from about 15 million today, and 15% of all mortgages are over 30 days late.  For sale by dreamer…

Porn O'Graph:  Attention deficit orders.

SAR #10103

Where's my share?

Big Gulp:  While some would argue that $1 a gallon more for gasoline doesn't have much effect on customer spending, those of us in the real world – where we drive to work and use about 600 gallons a year - find that the extra 600 bucks out of our after-tax income is missed.  But not so much that we cut back on our driving.  Credit card data suggests that the US consumed more gasoline in March than ever before.  Before being the previous record, in July 2008, just before $148 a barrel oil.

Traffic Stop:  Near Kandahar, Afghanistan a civilian buss pulled to the side of the road to let an American military convoy pass, and was promptly shredded with hundreds of rounds, killing 5 and wounding 18 civilians. Rules of the road, combat style.

Cornered Ratzinger?  While activists in England propose arresting the Pope in connection with serial child abuse charges, the scandal has forced the Vatican to admit that the Pope, then Cardinal Ratzinger, mishandled pedophile priests, although a subordinate has fallen on his sword for these lapses.

Simple Solution:  Skeptics claim the reason the IMF won't sell gold is because it does not have as much gold as it pretends.  Of course if they (and others) would report the serial numbers of the gold bars in question, there would be no doubt.  But the IMF refuses...

Stopped Clock:  Ignore the source and consider this:  Georgia leads the nation in bank failures and in foreclosures. Texas has mostly been immune. Texas prohibits using your house as an ATM.  Georgia encouraged small banks to proliferate.  This suggests that making bad loans is not confined to big banks and that a little consumer protection regulation goes a long ways. And no mention of CDOs, CDSs or other derivatives.

Been There:  The US military says that "by 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day,"   With prices over $100 a barrel there would be “significant economic and political impact.” Not to mention the empire's need for oil, oil and more oil.

Lost or Survivors?  Bank of America, JPMorgan and Wells Fargo may have to set aside an additional $30 billion to cover possible losses on the $442 billion in second-lien mortgages they hold.  This equals their combined profits for the year.  But never fear, the accountants have several months in which to magic these losses into bonus payments.

Restraint on Trade:  Oakland Park, FL, has decided that you have to determine how solvent someone is before doing business .  If it turns out you bought a newspaper or a rose from a poor person you face $50 to $100 in fines and 90 days in jail.  This law will stay in effect until it is reversed by the first court it ends up in.

The Road:  Few look admiringly at our broken political system – except the Republicans, who intentionally broke it, consistently resisting all attempts at bipartisanship.  They are nihilists who see future glory as the public perceives the Democrats as incapable of governing – even though it is not just the GOP's doing, it is their plan, one they've been refining for 40 years.  (See: Nixon's sabotage of Johnson's Vietnam peace talks, Reagan's October Surprise against Carter and Gingrich's “Kill Bill” campaign.)

Porn O'Graph:   Making it, or not.

SAR #10102

Too much jargon is bad for you.

Wait A Minute:  In a new round of 'let's pretend', Europe has pledged 30 billion Euros to save the Greeks from themselves and the Greeks have pledged to...  There's the problem.  Buying a new bucket doesn't fix the leak.

Force Majeure:  Charged with decades of blatant manipulation of the price of gold and silver, JPMorgan (among others) defense is that they were doing so for and at the behest of the Federal Reserve and the US Treasury, and thus as agents of the government are immune from prosecution.

Belly Button:  Pundits in the US keep looking at our driving habits and saying that because we aren't driving as much as previously (by a few percent), the upward rush of petroleum prices must be due to speculators. A 60% y/y increase in auto sales in China has noting to do with it, and China's 29% y/y increase in petroleum imports goes unmentioned.  Another bunch runs around wondering if the increasing price of oil will harm the US economy.  It always has.  Ten of the 11 post-war recessions in the US have been preceded by a sharp increase in the price of crude petroleum.

Spade is Spade:  Professor Shiller looks at today's housing inventory overhang, wonders where the positive outlooks come from, and concludes that wishful thinking is not a sufficient basis for optimism.  He also thinks the stock market is 30% overvalued. Spoil sport.

It's A Drag:  One effect of Bernanke's near-zero interest rates has been to keep the Treasury's cost of financing the debt at record lows.  But the economy is beginning to recover and many of the Fed's governors think it is time to start increasing interest rates.  But that may well a) choke off the nascent recovery b) further cripple the housing sector, putting more drag on the economy, and c) increase the cost of carrying the immense US debt load, which will put even more drag on the recovery.

Firstest with the Mostest:  The US must borrow over a trillion dollars a year for the foreseeable future.  Most of the world needs record amounts. Plus states and cities and public utilities.  How high will the premium – the interest rate – have to be to raise this money?  Morgan Stanley thinks US Treasuries will reach 5.5% this year.  How will all this borrowing ever be paid back?  Never mind.  Today we'll worry about getting the loan.  Future rounds of money printing will surely promise great inflation in the years to come.  Endless deficits of this magnitude do have serious consequences. Let's hope tomorrow never comes.

Words of One Syllable: Twitch, while addressing the Southern Republican Leadership Conference – which was far more Southern than Republican and had far more followers than leaders – made it as clear as possible: America does not need “this snake oil science stuff.”  Which explains oh so many things.

Gambling at Rick's:  The financial press is shocked to discover that the major banks repeatedly used accounting tricks and fake sales to dress up their reports and make themselves look solvent when they weren't.  Curious that these manipulations are all referred to in the past tense.

Light, Dawning:  Why does it take something like the gratuitous violence shown in the Wikileaks film to remind us that “War is mass murder”? Mainly, I suspect, because unless our noses are rubbed into the violence done in our name, we pretend it doesn't happen.  But secretly we know it does, and are ashamed.

Mother Hubbard:  More than 30 states have spent their unemployment benefit budgets and must borrow billions from Washington to keep supporting those millions upon millions of unemployed Americans.  Expect more GOP nonsense.

Guilty Knowledge: Col Wilkerson, Colin Powell's chief of staff at State, says that Bush, Cheney and Rumsfeld knew that the majority of the initial 742 individuals incarcerated at Guantánamo were innocent, but thought it was “politically impossible to release them” without derailing the rush to war in Iraq.  Powell appears to concur with Wilkerson's appraisal.

SAR #10100/Weekender

America's political will has become a won't.

Replay:  Gasoline prices in the US are edging up, the Brits have broken the record prices set in the summer of 2008. Summer's coming.

Corporate Socialism:  The EPA says Houston-based petrochemical giant Lyondell is responsible for $5 billion in cleanups in a dozen places it has profitably polluted.  Lyondell says it's going bankrupt, so put it on the taxpayer's tab.  It's a standard part of business plans, especially the extractive industries - hide the profits and leave the cleanup to the citizenry.

On Display:  The rich are getting richer, the poor are getting poorer.  In the last 30 years the top 1% have doubled their income while the bottom 90% lost ground.  The top 10% command 70% of the wealth and 90% of the stocks and bonds.  The other 90% of us are failures.

Perspective:  Based on its budget, the United States government is a huge non-profit insurance company (Social Security, Medicare, and Medicaid), with an army.

Time Shifting:  In 2004 the Republicans pushed through an accounting change (GASB 45) that makes public pension and retiree health costs appear larger than they are.  Only the amount to be paid out this year is part of this year's expenses, but the GOP insisted that the entire obligation spread over 20 or 30 or more years in the future has to be reflected as a debt this year, even though it's not.  Similarly, the ganormus trillions in Social Security's future payments are not today's debts.  So we don't have to dig up those trillions in taxes this year – only a few tens of billions more than the system brings in in taxes.  Certainly less than we've given AIG. And the whole reason that Social Security has any of those government IOU's is that Ronnie and the Republicans began stealing from Social Security taxes back in the 80's.  It's a lot like Daylight savings – in the end it doesn't lengthen the day.  What the Congress avoided raising in taxes then will have to be raised in taxes as we go along.  But pay as you go was a Republican idea, too, no?

Observed:  The insurance industry's attempt to weasel out of one of the few provisions of the new health care reform law that took effect immediately is a harbinger of what's to come.

More Math:  Yesterday we noted that Bank of America intended to foreclose on about 250,000 houses this year.  But 1.2 million of their mortgagees are in default.  Once BofA ramps up to 45,000 foreclosures a month, it will take them nearly 2 years to foreclose those who are in default today. While 45,000 seems like a big number, it is not nearly big enough.

Credulity:  Iraq says it will be pumping 12 million barrels a day by 2015. Even over-optimistic IHS/CERA says 4.3 mbd will be a stretch.  Relentless optimism, along with nods and winks, are required equipment in Middle Eastern oilfields.

Volume:  Distressed house sales – such as short sales and foreclosed (REO) properties – made up 30% of January's house sales.  They are called “short” because they nearly always bring in less than the mortgage price.  And that drives down the price of your house.  Don't worry, we'll make it up on volume.

Porn O'Graph:  Turning the corner or loop-de-loop?

SAR #10099

Reality, the final frontier.

or

Why is Alan Greenspan allowed near a microphone?

Rewrite:  Remember a week or so ago when the experts announced the resolution of the Greek drama?  Turns out it was only the end of Act I.  Now the IMF has arrived and is huddled offstage working on a re-write of the script, which will feature sharp cuts in public payrolls, 15%-20% reductions in private wages, higher unemployment and “liberalization of the labor market” - in economics “liberalization” means the bankers get richer and the poor suffer more.  Critics expect the play to turn into a road show, touring the Continent, Great Britain and possibly the US.

Down Is Up:  The Labor Department reported jobless claims were up 18,000 to 460,000 last week and the 4-week moving average was up 2,250 to 448,000 – instead of the predicted reductions.  All together 11.1 million people are drawing unemployment benefits, minus the 373,000 folks who fell off the dole and no longer count.

Couch Surfing:  Where do all the former mortgage holders go when the house gets foreclosed?  Some rent, but not enough to drive up rents.  Some end up living in their cars.  A goodly number – as many as 1/3^rd – end up on someone's couch.  If you sleep on a couch as part of a vacation, that's an adventure.  If you are back at Mom's or bunking with a college friend or an increasingly distant acquaintance, the romance wears thin.

Relative Wealth:  In Tennessee if a family of four makes more than $16,500 they are no longer eligible for Medicaid assistance – no matter how severe the medical condition.  Since January 2009, over 100,000 such freeloaders have been kicked off the rolls.   Both of Tennessee's Senators voted against the health care bill.

Savings:  Private contractors supporting our military effort have certainly made the Pentagon more efficient at dispensing huge payments to firms like KBR for hours not worked, tasks not done.  In the first half of 2009 only 1 hour in 9 billed by KRB was for actual work – they billed for over 1.1 million hours while their employees documented only 116,000 hours of work. KBR says it had to keep the workers on standby in case something came up.

Yes, But:  Fixing the things that went fundamentally wrong on the way to the current collapse would mean taking some money or power or both away from the moneyed and powerful, and that's not going to happen.

Geography:  Kyrgyzstan is a key to the US strategy for keeping Middle Eastern and Central Asian oil out of the hands of the Chinese and the Russians.  Its importance centers on the Manas air base, which US forces rely on for resupply of forces in Afghanistan especially after the closure of K2 base in Uzbekistan. A while back the Kyrgyzstan leadership invited the US to leave Manas, but increased bribes to their President smoothed things over.  Now Bakiyev is gone and the rent'll probably go up.

Braggadocio:  If you believe CERA, OPEC and the cornucopians there are at least 1,350 billion barrels of conventional oil in known reserves.  But those are made up numbers.   One famous example is Kuwait, which has only 48 billion barrels of proven (95% sure) and probable reserves (50/50 chance of being there) but continues to claim 102 billion barrels of proven reserves. Once you take out the lies, worldwide the figure is closer to 850 billion barrels, or quite possibly as little as 600 billion.  The world uses over 30 billion barrels a year.

Porn O'Graph:  A neat graph that shows when mom went to work.