SAR #12060

A model is a metaphor with numbers.

Democratic Demon: Ireland says it must ask its citizens before committing to the EU fiscal compact. If turning over national fiscal sovereignty to Brussels is depends on the citizens of 17 nations approving the idea, it is not going to happen. Only 12 of the 17 need approve, but then it would only apply to those who said “yea', which means when Ireland (or anyone else, say Portugal or Spain) needs another helping of austerity tinged bailout, it won't get one.

Wrap It To Go: Orders for durable goods fell 4% in January; excluding defense orders, new orders were down 4.5%. Strange weather we're having.

Following The Script: According to Pfizer's annual report “a number of European governments and government agencies” are paying (or not paying) for their pharmaceuticals with script. The countries include Portugal, Italy, Ireland, Greece and Spain, for a total of “about $15 billion.

From The Head Down: In 1994Philadelphia Cardinal Bevilacqua ordered all copies of a memo identifying 35 priests in the Archdiocese as pedophiles destroyed and thereafter denied that that the church had conspired to conceal clerical sex abuse. He kept his own copy, which was discovered after his death last year. How many Hail Mary's is this gonna take?

Flashback: Will the American withdrawal from Afghanistan more closely resemble the Russian experience in 1988, or the fall of Saigon? Or will it quietly but quickly fade away in a version of the retreat from Baghdad?

Auch Auf Deutsch: The German version of the BLS reported that there were officially 3,081,706 unemployed persons in Germany while 5,394,064 were drawing unemployment compensation. Nice work, if you can't get it.

Just In Case-Shiller:All three S&P/Case-Shiller indices for the quarter ended December 2011 were at new lows, with the composite falling 3.8% during the quarter.

Psychopaths Are Us: While only 1% of the general public are psychopaths, on Wall Street at least 10% are. Experience suggests this is a conservative estimate.

Another Straw: The FHA is raising its mortgage insurance premiums from 1% of the mortgage amount to 1.75%. It's only another $5 a month, and can be painlessly rolled into the monthly payment.

Imagination At Work: The US corporate tax rate is 35%. General Electric, which paid nothing in federal taxes in 2010, paid only 2.3% in taxes on its $81 billion in profits over the last decade.

Porn O'Graph: Dunning noticed.

SAR #12059

Hopes have become but unfulfilled disappointments.

Scavenger Hunt: While Apple/Foxconn have been pinned in the spotlight, they are not exceptional. There is no ethical smartphone. Nor an ethical flat-screen TV, personal computer, digital camera, digital tablet. None. But there's not much in the way of ethically made clothing or athletic shoes, either. Or fish. If it get's shipped here in a conex, pretty much it is manufactured in conditions you wouldn't put up with.. Yet.

A Lost Generation: About half of the young adults (16 – 29) in Spain are unemployed, as the EU/ECB/IMF austerity program grinds on. This will erode Spain's social fabric for years, putting an entire generation at the mercy of northern overlords. The young, without careers and homes and savings, will not be able to support the rapidly aging population – and the country's social safety net is being dismantled and shipped to Berlin and Paris.

Ask The Man Who Drives One: The administration has vowed not to change its strategy in Afghanistan. Okay, when did they get one?

Bottom Fishing: Forget the hype about the housing market looking up. There is little evidence to suggest that house prices will be increasing in the foreseeable future and quite a bit that suggests house prices have a long way to go before reaching bottom. The only thing about housing in the US that might have bottomed out is the business ethics of bankers and mortgage servicers.

Cow/Cabbage: "It is completely ironic that we would be experiencing one of the most powerful cyclical upswings in the stock market... when we are clearly coming off the poorest quarter for earnings... There is this pervasive view that the U.S. economy is in better shape because a 2.2% sliver of GDP called the housing market is showing nascent signs of recovery. What about the 70% called the consumer?...Let's keep in mind that the jump in crude [oil] prices has occurred even with the Saudis producing at its [sic] fastest clip in 30 years - underscoring how tight the backdrop is... Throw in rising gasoline prices and real incomes are in a squeeze, and there is precious little room for the personal savings rate to decline from current low levels." - David Rosenberg

Wet Water Alert: Research shows that the rich are more likely to cheat, break the law, steal candy from children and lie for financial gain. This is not really news.  How did you think they got rich in the first place?

Be Prepared: Over 40% of Americans put preparing for a catastrophe ahead of saving for their retirement. Which pretty well guarantees that their retirements will become catastrophes.

SAR #12058

Who owned the universe before Goldman Sachs?

Focus: The anti-American rioting continues in Afghanistan. It is not about burning the Koran, y'know, it's about hating the occupiers. The Afghans know that the lies, damn lies, and pablum the last two Administrations have spread is mostly about the keeping the empire.

Moving The Goal Posts: AIPAC – Israel's lobbyists on Capital Hill – have managed to get Senator Joe-the-puppet Liberman to push a bill that would declare it “unacceptable” for Iran to possess the capability of building a nuclear weapon. Not of building one ( or 120 or more, like Israel) but just having the capability.

Fraudus Interuptus: A year ago the government spent $77 million on a Medicare fraud detection system. Just knowing Big Brother was watching seems to have sent the crooks packing; how else to explain that only $7,591 worth of actual fraud has been detected.

Proof Of... Something: My eyes have been lying to me again, because Google Trends does not show an increase in people searching for gas prices, which is means that there is no increase in gasoline prices and the media are making it all up and “there's nothing special about the current jump.” Where do they get these people?

Competition, Defined: When the pundits say that globalization means the US worker has to become more competitive, what they mean is we must become more like the Chinese. Apple doesn't build its stuff there because the workers are well-educated, they ship jobs there because the workers are afraid and desperate and because China permits (and encourages) labor practices that democracy does not allow. “Because in China employers can and do make people live in dormitories at the factory and can roust them at midnight and make them work 12-14 hour days, seven days a week, using toxic chemicals.” Because it is cheaper, and cheap is good. If we do not fight, we will lose more than jobs.

Paper Chase: The primary reason for the surge in oil prices – beyond the Bomb Iran hysteria – is the surge in money-printing by the Fed BofE and ECB. That $2 trillion in extra liquidity had to go somewhere, so gold and oil – among others – have benefited.

And Away We Go! Germany's Interior Minister thinks Greece should leave the Eurozone "to regenerate itself and restore its competitiveness." In the US this sort of balloon is floated anonymously.

Protect and Defend: Santorum says “I don't believe in an America where the separation of church and state is absolute." In which case I hope a lot of people remember the oath says “to protect and defend the Constitution from all enemies, foreign and elected.

Carthago Delenda Est! Reasons to attack Iran: Iran cut off their oil before we could. Israel wants us to. The guy on television said we should. They're not civilized. We have documents that prove... Women who survive our bombardment will have more rights, like in Virginia. War is good for the U.S. economy. War will help Obama get re-elected. I just saw 'Act of Valor'!

Zoom: Oil (WTI) is up to $110 and is on a roll. The last time oil went in this direction, it caused a slowing in the global economy that led to a global financial panic. What's causing it? Peak oil, Chinese growth and lots of potential oil disruption. Pretty much the same factors that caused it last time.

What Doesn't Go Up May Come Down: The price difference between a barrel of WTI oil and a barrel of North Sea Brent crude is about $15. Goldman thinks it will shrink to a $5 difference by year's end and Citi thinks it will widen to $20. Ah, experts talking their books.

The Reformation: Newt says he can 'reform' the federal Civil Service and save “a minimum of $500 billion a year.” Neat trick, in that the federal payroll, including the military, is $432.6 billion. Maybe he plans on making US civil servants pay the government for the privilege of working for him... like in Greece.

GEDs All 'Round: Sanctimonious Rick says that education for the underclass has gone far enough and that those who have high school degrees should be happy if their kids can get a GED. Santorum doesn't want “everybody in America to go to college;” and we certainly don't need any more uppity blacks becoming president.

Porn O'Graph: Hitting the slopes!

SAR #12056

The dollar's not the only thing that's no longer worth the paper it's printed on.

Geritoil: Iraq is asking BP to rejuvenate the huge 77-year old Kirkuk oilfield, where production plummeted from 900 kbd to 20kbd in ten years. Maybe the same magic the Saudis are counting on to rejuvenate the old Dammam field which was closed in the 1930's. Wonder how many other old giants are ready to fall off a cliff.

Fear & Loathing: Nearly a year following the Fukushima disaster, all but 2 of Japan's 54 nuclear power plants remain offline.

Survivor Type: Barclays' Peter Newland says that if your hands are dismantled one finger at a time, with a week or ten days rest between amputations, it won't hurt much at all. Or at least that's his explanation for why $4.00 gasoline won't hurt the economy – we've gotten there slowly. Wow, too bad Stephen King didn't figure that out.

Clip & Save: US intelligence agencies think that Iran gave up actively trying to build a nuclear weapon 8 years ago and has no plans to do so now. Of course that means the Iranian regime is breaking one of the main principles of modern government by telling the truth.

Different Views: An economist with Deutsche Bank, not understanding the intricacies of the internal combustion engine, says that high petroleum prices are not a threat to the economy because natural gas is cheap. He also believes that the extra $40 billion spent on gasoline in the last two months due to a 30 cent increase in prices is not a problem because of the improving economy.

The Workers' Paradise: A U of Michigan/Harvard University study reports that more than 1.4 million families live on $2 per day per person. In the United States.

Until The Last Teardrop Falls: Central bank bailouts have become embedded in the modern economy. No effective financial reforms have made it through Congress. Big financial institutions have learned that no matter what they do, the government will bail them out and their management will never be prosecuted. Wall Street has found a way, through a cowed and compliant government, to eliminate risk, socialize losses and privatize gains. And short of depression and armed revolt, these conditions will prevail.

Doing The Math: Gasoline prices in the US vary by about 2.5 cents/gallon with a $1 change in the price of oil. To get to Newt's $2.50 a gallon, the price of a barrel of WTI would have to fall to about $60.00 a barrel. Happy days, or deflationary hell?

Down Memory Lane: Republicans claim that recently unearthed documents reveal a long history of Iranian deceit over their nuclear program. Remember the Niger Memo? Well, they've substituted Iraq for Iran and dropped the stuff about Niger and yellowcake, but it is essentially the disinformation. It's even printed on recycled paper.

Putin On The Ritz: 130,000 showed up at a pro-Putin rally at a Moscow soccer stadium to show support for what bribes and coercion can accomplish in a democracy.

Take Losses and Prosper: Various commentators are annoyed that AIG has manipulated the tax and accounting rules to conjure up billions in profits from tens of billions of losses that the taxpayers suffered. I'm annoyed that there's still an AIG.

Mirror, Mirror: Right-wing Republicans (they are not conservatives) hate, above all, reliance on government programs. Yet the regions of America most reliant on government programs are the same regions that so detest government handouts. The mystery is why the relatively poor and greatly dependent red states are... red states. They have the lowest levels of educational achievement - which may explain why 44% of Social Security recipients, 43% of those receiving unemployment benefits and 40% of those on Medicare say that they do not use government programs and do not want government involved in their lives. It is wrong to characterize America as a fundamentally conservative country. It is not. It is a fundamentally ignorant, confused, and fearful place.

Porn O'Graph: Rooms with a view.

SAR #12055

Credit worked better when we thought of it as borrowing money.

Proud To Be An American: The latest data shows that the number of US children living in poverty has increased 25% since 2000. Virginia has passed a ‘ritual humiliation law’ designed to stigmatize women seeking abortion and a partisan GOP crowd booed at the mention of contraception, while Rick Santorum claimed the President was "in bed with the Muslim Brotherhood" and threw dictator Hosni Mubarak "under the bus." The best (or worst, depending) Romney could do was to allege that Obama's re-election would be the prelude to the use of nuclear weapons.

Sunrise, Sunset: The White House has unveiled its online privacy proposal. Google announced they had started work on finding a way to disable it.

Batter Up: Now that the EU/ECB/IMF have brought Greece to its knees, Portugal - by majority vote - will be next. Already the poster child for adopting severe austerity measures such as brutal tax hikes and sharp reductions in pensions and unemployment benefits and as a result falling into a deep recession, Portugal seems unlikely to avoid  suffering mightily for having done so.  The country is the next domino destined to fall in the course of rescuing the European bankers from their bad investments.

Usual Suspects: Research shows that 5% of Americans account for 50% of America's total healthcare costs. Any suggestions?

Steady As She Goes: The Labor Department reported initial unemployment claims were unchanged from last week at 351,000 - after last week’s figure was increased by 3,000. Looking ahead, the Postal Service said it will lay off 35,000 by May.

Whistle/Graveyard: North Sea Brent oil, priced in euros, has reached the highs of 2008, just before the crash.

Going Down? House prices are down 33% and, according to Gary Shilling, have another 20% to go. With 90% of mortgages only written because of Fanny, Freddie and FHA guarantees, the increases in origination fees and the return of some degree of sanity in credit requirements have slowed both new loans and refinancing. The deliberate slowdown in foreclosures is coming to an end and are now expected to rise, putting more houses on the market at ever lower prices. One of the few positives, if speculation is a positive, is that an increasing number of speculators investors are looking for bargains – over 30% of sales are now all-cash.

Moderation In All Things: The EU now predicts a 'moderate recession' in 2012, with the 17-nation GDP falling 0.3%. Greece is expected to be down 4.4%, Portugal down 3.3%, and Germany to be the winner with a 0.6% annual growth rate. Last November they were predicting an overall growth of 0.5%.

The Payoff: Newt Gingrich - who is spending $3 for every $2 he raises - has again been told to stop paying "questionable reimbursements" to himself and his friends from campaign funds, including $88,000 to Gingrich himself in January. Understandable, now that he's no longer getting $25,000 a month as the Fannie Mae historian.

Don't Worry, Be Happy: At a modest $3.50 a gallon for gasoline and a 15 gallon tank, it will take the single mother working at Wallyworld  or the local drive-in at least 6 hours just to earn enough to fill up.

SAR #12054

Debt is a dance; it takes two.

Huffing and Puffing: The National Association of People Who Want You To Buy A House Realtors claim that existing home sales increased 4.3% last month. The mortgage purchase index was down 2.9% last week and the index tracking refinancing dropped 4.8%. Tough call, believing bankers over the realtors.

Devil/Details: The bailout, among other absurdities, gives Greece's lenders the right to confiscate the country's gold reserves. It also demands changes in the Greek constitution that will ensure that debt servicing comes before all other uses of Greek revenue.

Political Science: Gasoline prices are rising because of: 1) Geo-political forces. 2) Speculators. 3) Supply and Demand. 4) The flood of QE from the Fed. 5) Peak Cheap Oil. 6) China's thirst for our oil. The correct answer(s) depend on your political leanings.

Less Than Minimum Wage: As part of their abject surrender to the northern invaders, Greek public sector contract workers' pay will be retroactively cut (effective November 1st). Teachers, municipal workers and civil servants expected to work without pay until they have "paid back" the overpayments. And this is on top of a 20% reduction in pay.

Fog Of Justifying War:The Pentagon's top lawyer claims that there is no real difference between killing selected (or random) American citizens and shooting down the commander of the Japanese Navy during WWII. And if it is, the President still has the right to kill you, based on secret interpretations of those parts of the Constitution that were written in secret ink.

Why Less Is More: If the US is using less gasoline, and it is, why do prices keep rising? Because people in China, Brazil, and India are using more. A lot more. And there are also speculators driving up the price of petroleum and geopolitical stresses in producing regions. So expect $4.00 or $4.5o – which "will have a significant impact on the economy ... and if we would have a $5 average for a month or two, we're going back into recession."

Voting With Their Feet: Greek 1-year notes are now priced to yield 763%. Fitch agreed, downgrading Greece from CCC to C.

Gander/Goose: If women's contraception is not to be covered by medical insurance, what about vasectomies? After all, if the government knows best what's good for women, why should men be allowed to make decisions regarding their plumbing? And a vasectomy is equal to years and years of abortions, in terms of thwarting God's plans.

Broken Dreams: As was obvious when the Army refused to give up power, those who made the revolution in Egypt see no hope for ending undemocratic governance or improving economic conditions. Even with the elections, they seem to be just trading one tyranny for another. Perhaps there was not enough bloodshed.

Swallow/Not Spring: Euro zone industrial orders, which fell 1.1% in December, rose 1.9% in January.

Not Always: Water apparently isn't going to be allowed to run downhill from two Austin-area lakes that are still extremely low due to the long drought. This will put a serious crimp in Texas rice production, much of which depends on this water source.

Daily Dose: GOP pollster Frank Luntz, appearing with Sanctimonious Rick Santorum, said he put a ‘Run, Barack, Run’ sticker on his front bumper. Isn't this a direct threat to the President?

SAR #12053

Mission Statement: In order to form a more perfect union...

There Goes the Neighborhood: We are invited to believe in miracles. The current Greek bailout imagines that billions in budget cuts enforced by years of on-site supervision by the EU/ECB/IMF will result in a strong and growing economy (with a 4.5% budget surplus!) that will cut Greece's debts to 121 percent of GDP by 2020. The deal won't last much over a month, if it ever gets signed by the various national parliaments. The Greek electorate will see to that, unless the EU puts off the elections. The Orwellian (and unconstitutional under Greek law) insistence that some (ECB held) bonds are more equal than other (privately held and much haircut) bonds ensures that Portugal, Spain and Italy will find fewer takers for their bonds once the they succumb to imposed austerity.. Did April come early this year?

A Famous Victory: The Dow Jones finally reached (and fell back from) 13,000, entirely on the back of $7 trillion printed by the world's central banks in the last 4 years. The market in the Weimar Republic had similar gains. For a while. But priced in gold the dow is down 50% since 2008.

Deja Vu All Over Again: Strauss-Kahn is being held by French police in a prostitution probe, although he claims he didn't know the women at orgies were prostitutes. He thought they were IMF groupies.

Another Silly Question: Is fructose causing the obesity epidemic? No, one calorie is the same as another and we consume too many of them.

Noted: In the spirit of Alfred E. Newman we note that the spread between S&P earnings yield and 10-year Treasury notes has not been higher since 1962. What, me worry?

Officer Krupke: Seriously delinquent and in-foreclosure FHA loans increased to 9.9% - 732,775 homes - in January up from 8.8% a year earlier.

Thus Always Tyrants: Virginia took time out from passing a bill that would insist that women undergo rape by an ultrasound wand before having an abortion to pass a bill banning adoption by LBGT citizens.

Dumb Question #834: Will rising gasoline prices derail the economic recovery? (a) What recovery? and (b) Do bears and the Pope do those sorts of thing?

Overcoming the Odds: Scientists continue to accumulate data that shows that humans are not competitive, aggressive and brutish by nature. Some seem predisposed to learn it as they age.

Budgeting Tip: One of the main reasons Americans health care costs are increasing is because Americans are fat and getting fatter waistlines are increasing. Make that the main reason...

Elsie Call Home: Cows are being fitted with monitors which call up the farmer and tell him how the cow is doing.

Swampland: Florida state Republican Senator Jack Latvala has introduced a bill to prevent homeowners from challenging the loss of their home, even if the foreclosure was fraudulent. This would mean that someone can buy a foreclosed property with clear title, even if the foreclosing party didn’t own the home.

Dew Line: No major Chinese city reported real estate price increases in January.

Daily Dose: Repulsive Republican Indiana state representative Bob Morris topped his complaint about "honorary president Michelle Obama's pro-abortion viewpoint" by revealing that the Girl Scouts is a radical organization that "promotes homosexual lifestyles" and that 47 of 50 Girl Scout role models are " feminists, lesbians, or Communists".

Porn O'Graph: Find the nugget.

SAR #12052

Oxymoron: European leaders.

Back To The Stables: The Greek bailout seems likely to happen. But it is not a bailout of Greece. Every euro will go to the banks that are Greek creditors (and a few crumbs to the private investors, who pretty much have to settle for a whole lot of mumbo-jumbo and hand-waving over newly issued bonds). For scraping up enough money to run the country and pretend to pay back the mountain of debt, Greece will have to collect 200% more taxes than it did last year, while the economy tanks. So, we're good, right?

On the Election Trail: JPMorgan expects all the quantitative easing liquidity to drive WTI crude to $120 a barrel just about the time Obama doesn't get re-elected.

Spanish Steps: Those who must be obeyed are telling Spain that "deficit have to be brought down sharply..." Preventive austerity, guaranteed to make Spain's deficit bigger, Spain's populace even more restive. The biggest problem is the government's effort to bail out the country's banksters whose incompetence and greed has run up a 175 billion euro pile of bad real estate bets. Remember Ireland?

Countdown: An audit suggests that 99% of foreclosures in San Francisco have irregularities in their paperwork, 84% have violations of the law, and so on. Who owns your house? Better yet, who owns the house you are thinking of buying? What is not made clear in discussions about the mortgage settlement and the MERS robo-signing and all the rest is this: No one knows who actually owns a house anymore – nor can we find out.

Changing Times: President Assad is confused. The US used to pat him on the back for the viciousness of his secret police in torturing the 'rendered'. Now the US is upset at him for trying the same thing on his own people.

See For Yourself: Will higher energy prices slam the economy and the market? Say goodnight, Gracie.

Shale Gas Fever: Shale gas is our latest energy fad. Remember the hydrogen economy? $2 billion and 8 years later we have a handful of fueling stations and 500 hydrogen fuel-cell vehicles. After thirty years of ethanol salvation at a cost of $20 billion, we convert 40% of the US corn crop into a second rate fuel that is 75% subsidized by the taxpayer. Here's the scoop on shale gas: The supposed 2,200 trillion cubic feet that would fuel the US for a century is, according to the Energy Information Agency, most likely about 10% of that - an 11 year supply. Plus it is not profitable now, nor in the foreseeable future.

Everything That Goes Up Together... Every major asset class is climbing the mountain of liquidity the central bankers keep printing, a phenomena that has been followed by double-digit market declines in 3 of the last 4 occurrences. How long can you hold your breath?

Porn O'Graph: Looks like up from here!

SAR # 12051

When is The Reckoning scheduled?

The Return of Simon Legree: Now that the banks and mortgage servicers have slithered past the courts and have a 'Fraud? What Fraud" card coming from Uncle, foreclosure filings are headed up, increasing 3% m/m in January. Warning: Entering avalanche area.

Wishes Come True: Iran has stopped sales of crude oil to the British and French, long before the US was going to force the issue. Iran had been shipping 700kbd to the EU (plus Turkey). It will be interesting to see if the Saudis can pick up the slack.

Early Finish: At mid-month, Gallup's non-seasonally adjusted version of the US unemployment rate was 9.0% and its U-6 version was 19.0%, both showing a sharp deterioration in the US job market. The Gallup mid-month data is generally a good predictor of the BLS monthly data.

Laugh Test: According to the NAR folks, the national inventory of single-family homes, condos and townhomes declined 23.2% in January from a year earlier. Is there any way in hell this could be believable?

Getting Used To Not Using: Gasoline at the pump is going to $4.00 soon, on its way to much higher. So we cut back again. Or do we? Gasoline consumption has dropped 7.3% in the last year as the price crept up. How long before the price of gasoline crimps the economy again? How much more can drivers economize on gasoline before they have to start economizing on food?

Define 'Monitored': The NYPD 'monitored' Muslim college students as far from NYC as Yale, Buffalo, Rutgers and the U of Penn, counting how many times a day they prayed and sending undercover cops white water rafting with the suspects students.

Compare and Contrast: Wannabe Santorum has clarified the problem: Barack Obama isn't following the Roman Catholic playbook, but “some phony theology.”

Clarification: Citigroup says that the concept of peak oil has been 'buried' by the surge in US production. Sorry, despite the 0.5 mbd from North Dakota shales, the US only produces 6 mbd, way down from the 10mbd before oil production in the US peaked back in 1970. Peak oil is the only reason anyone tries to pry oil out of ND shale. Why didn't we let Citi go bankrupt when we had the chance.

Service With A Smile: Florida is in the process of cutting the minimum wage for tipped workers from $4.65 an hour to $2.13 an hour. How much do you have to be making before a $2.50 an hour pay cut doesn't hurt?

Compound Growth: Even as China loosens bank reserve requirements and tries to increase lending, we all should recognize that mathematically, China's economic growth – the 8-10-12% compounded year after year – cannot continue forever, and will eventually crash and burn. The trick is in defining 'eventually'.

'Twas Ever So: Capitalism requires not only a certain minimum level of unemployment (to keep wages down), but that the unemployed be unhappy (so they will take jobs at low wages). The poor, after all, deserve their poverty, and the rich their rewards.

Heel, Clicking: Because "you can't put a gun rack on a Volt," Gingrich says he will drown demand by letting the free market increase supplies to stabilize the price of gasoline at $2.50 a gallon. [WARNING: This is a political promise and as such has a 24-hour shelf life and comes with no guarantee.]

Piglets in the Poke: In order to pass a simple bill extending the payroll tax deduction and extended unemployment benefits a few sweeteners had to be tossed in. Like forcing the President to let the Keystone XL pipeline be built. And letting doctors bill Medicare for an extra $110 billion this year. It also lets states make the unemployed pee in a cup to get the benefits, lets the rich keep their 100% bonus tax depreciation allowance (at a cost of $28 billion), changes the rules on flood insurance in ways that will undoubtedly screw homeowners, and introduces means-testing for unemployment, food stamps and Medicare - a prelude to means-testing for Social Security.

Porn O'Graph: Pace yourself.

SAR #12049

There is no believable 'best case' scenario.

Crib Death: Citigroup announced (again) that peak oil is dead, killed by the production of nearly 0.5 mbd from North Dakota oil shales. Never mind that while North Dakota was scraping up that half-million barrel capacity, the net exports from the seven major Western Hemisphere oil producers fell by 1.2 mbd (or 20%).

Two Down: Germany's president, Christian Wulff, has resigned while corruption charges against him were being investigated. He is the second German president in as many years to resign.

Did You Hear... It's not just the town gossips and Homeland Security that know everything you do. It's the grocers and others retailers, too. Target, for example, knows you are pregnant before your husband does. Or in this case, your parents.

What is $4.01? It is, according to customers, the point at which the price of a gallon of gasoline will make them change their driving habits. Unless you're making over $100,000, then it's $5.01. Sliding scale.

What Goes Around... Reportedly Iran has the ability attack US targets in the Middle East and could close the Straits of Hormuz at least temporarily. Of course the US has the ability to attack Iranian targets, too. Other officials say it is unlikely that Iran would strike first. Further deponent sayeth not.

Part Time Lovers: It used to be there were 5 full time jobs in the US for every part time one. Now it's barely 4 to 1.

A Clue: Saudi Aramco plans to re-open and re-work the Damman field, trying to breathe life into a field left for dead 30 years ago. There is, after all, a real demand for hard to refine heavy, sour crude.

The Rest of The Story: Initial unemployment claims is one data point - one that as a raw number has been decreasing. But like the unemployment rate, it tells only a small slice of the employment/unemployment story. If you add up all of the unemployment claims (not counting those who have long since run out of any possible aid) the number is over 70% above the long term trend.

Yawn: Both headline and core CPI growth came in at 0.2% for January.

Sign Language: A closer look at the Philly Fed Index data that was warmly greeted yesterday. The Index's employment component (based on simply asking employers if they planned on hiring) fell dramatically, a sign that February Non-farm jobs gain will be an anemic 50,000 - a big drop from January's 243,000 new jobs.

Some Things Haven't Changed: Police in Austin, Texas have – again – stopped, cuffed and interrogated a man caught in the act of walking his granddaughter home. “Why is it,” she asks, “that the police won’t ever believe you’re my Grandpa?” Then she looks at him and adds, “Because you’re white?” APD denied allegations of racism.

Restraint: “While we believe that capitalism is fundamentally superior to any other system for organizing economic activity, it is also clear that some of the ways in which it is now practiced do not incorporate sufficient regard for its impact on people, society and the planet." Al Gore.

----> A Trojan Horse <---

Bringing in the Sheaves: New money is necessary to fix Greece, but new money won't fix Greece. At least not a Greece with an economy that has already shrunk 16%, with worse to come as austerity beggars the populace and drives them into the streets. Most likely there will be yet another band-aid. but it will not be enough. Nothing will. Greece will leave the euro (which has been the goal for some time) by the end of summer, with rounds of devaluation and inflation, riots in the street and political and social upheaval. Athens is ripe to turn into a disaster zone.

Others see a Greek default by April 1^st, starting a chain reaction, throwing the global economies into contraction and sending markets tumbling as the euro unravels. The EU overlords want to see how much further they can push the Greeks. They forget the basic rule of the Game of Nations – you have to stay in power in order to stay in the game – a rule Greek politicians understand. There is plenty of room for error.

Eurozone finance officials are looking to delay parts (or all) of the second bailout, while somehow keeping Greece tottering along until after the April elections so they can see if the next government will bend to their demands. This will require that the private investors acquiesce to massive haircuts – but no one has asked them if they'd go along with this scheme while they have (or think they have) CDS protections.

And so we are back to the same fiscal feudalism that Germany has insisted on all along. The ECB is intent on swapping 50 billion euros of old bonds (which cost them about 35 billion) for 50 billion in new bonds with covenants that to prevent Greek default, making these bonds 'more equal' than the ones held by the private market. Again, no one asked the private investors to the dance.

Reading all of the commentary suggests the final days are close upon us, when we we learn – among many other things - whether CDS on sovereigns have any value, whether the euro has a future, and how long the night will be; for after Greece will come Portugal, Spain and possibly Italy. The endgame is approaching. No one is in charge and things are going to get uglier. All we can be sure of is that those who think they know how it all plays out are wrong.

SAR #12048

Just when did we all go crazy?

Barefoot and Pregnant: The Republicans convened an all-male hearing on health insurance contraceptive coverage, saying it wasn't a women's health issue but one of freedom of religion. No doctors need apply, either. Let's all go to Rio, where the government is handing out 3 million condoms for Carnival!

Progress: The week's initial unemployment claims of 348,000 continues the downward trend, with the 4-week moving average now at 365,000. The prior week was revised upward, as is traditional. Continuing claims were 3.426 million, down 100,000 from last week, while 23,000 workers dropped out of the running, having used up 99 weeks of unemployment insurance without finding a job.

Asked & Answered: How do Walmart, McDonald's and Starbucks feel about paying their employees so little that most of them qualify for food stamps?? Profitable.

Paying The Piper: The Republicans will go along with a slimmed-down version of extended jobless benefits, but only if federal employees contribute more towards their pensions, plus cuts in Medicare fees paid to hospitals and specialists.

Foreclosures Shall Rise Again! Foreclosure fillings were up 3% in January, m/m, and an upward trend in foreclosures is expected over the coming months as banks get get-out-of-jail-free cards from the mortgage settlement that will let them go forward without fear of criminal or civil penalties for fraudulent paperwork. In addition, short sales increased 12% in December, y/y.

Penny/Pound: The Obama budget will eliminate the only national program that regularly tests our fruits and vegetable for things like e-coli. What could go wrong?

Denouement: All those MF Global customers can relax, it turns out that their money was not vaporized. In fact it's not even actually missing. It has been stolen. Twice. By bankers, who want to steal it one more time.

Breaking Ground: A French court has found Monsanto guilty of chemically poisoning a French farmer, resulting in severe neurological problems. This opens the door for legal action in Europe against Monsanto's Roundup and similar pesticides/herbicides.

Devil/Details: The American Dream of owning a home is best kept as a dream. The reality is that renting is better 100% of the time. Don't let on to the NAR that you know.

The Dickens You Say: Debtor's prisons are so 19^th Century, right? At least in the US, right? Wrong. The Feds won't throw you in jail, true, but many states will, as debt collectors game the process so that the debtor is arrested for contempt of court and then has to post a bail bond to get out. The bond, of course, equals the amount the collection agency claims is owed. Not able to make bail? Rot in jail.

Money Talks: The International Olympic Committee says that as long as Dow keeps giving them money, the 1984 Bhopal disaster will not be considered to be Dow's responsibility. (Note: When Dow bought Union Carbide, they bought the responsibility.)

Porn O'Graph: Getting Sentimental.

SAR #12047

An increase in total debt is a prerequisite for economic growth.

Missing In Transit: The EU has yet to authorize any additional payment to Greece, mainly because finance ministers do not believe Athens' promise not to do a Lucy.

He Said She Said: The Financial Times reported that Iran had cut petroleum exports to six EU countries. Reuters reported that they had not. It was all lost in the saber rattling later in the day, which is also more of the he said/she said variety.

Mystery Measures: The seasonal adjustment virus strikes again, this time on the Empire State Manufacturing Survey, which is reported at the highest level in over 18 months. Expected to be at 15.0, it arrived at 19.5... unexpectedly, even though new orders declined , unfilled orders declined, inventories declined, prices paid declined, prices received declined and the number of employees declined. But here in Magic Data land, increases in shipments, average workweek and delivery times were enough to make a purse out of a sow's ear.

Shocker! The British public, in a show of stubborn pig-hotheadedness, clings to an 8.4% unemployment rate (highest in 17 years), just to make Cameron's austerity measures look bad.

Tea Leaves: The Greek deal either won't be made or won't last, for Greece cannot pay its debts. Eventually – months, not years – they will leave the euro. In the resulting chaos on the continent, considerable damage will be done to economies and to democracy.

Another Shoe? Commercial real estate was booming in 2007, almost any projecct could get a loan - apartments, office complexes, shopping strips and malls. That was then. Five years ago. Commercial loans are generally for 5 years and about $150 billion of those mortgages on half-empty office buildings and deserted shopping strips are coming due. But many of these properties are seriously underwater. Experts fear that “50%-60% of the 2007 vintage five-year-term loans maturing next year may fail to refinance, and retail loans are at the greatest risk.” [Memo to self: Check and see if any of my money is in CMBS.]

Rhetorical Question: "Is the $25 Billion Foreclosure Settlement a Stealth Bank Bailout?" No, there's nothing stealthy about it.

Thy Neighbor's Keeper: Iowa Republicans have introduced a bill that would totally outlaw abortion in the state and mandate up to life in prison for terminating a pregnancy. In Virginia GOP lawmakers have approved legislation conferring “personhood” at the moment of conception and outlawing all abortions, no exceptions.

Drowning In Debt, Maybe: Before you give up all hope, note that today the US is paying less to finance its debt than it did in the 80's and 90's. Ditto as a percentage of GDP. And we're also paying less in interest as a percentage of tax receipts than back in the 90's. Great Porn O'Graphs, too.

Good Tidings: The EU economy did not shrink as much as expected, but did contract 0.3%.

Consequences: Long-term municipal bond issuance has fallen 32% y/y as cities large and small cut infrastructure investment by $138 billion, almost all of it ($129 billion) coming from putting off new infrastructure construction. Town fathers are betting the bridge won't collapse, nor the school roof cave in or raw sewage start bobbing down the street when the sewers fail. This, too, ends badly.

Sanity Vs Santorum: “We were put on this Earth as creatures of God to have dominion over the Earth, to use it wisely and steward it wisely, but for our benefit not for the Earth’s benefit." So says Rick Santorum, apparently subscribing to the theory that God made the earth for us to use up. And when it is used up the good (Christian) people will be raptured away, and the unholy will be left behind. He forgets Leviticus 18:26-8. where God said “... if you defile the land, it will vomit you out as it vomited out the nations that were before you." Santorum's seven children should disqualify him from any public office.

SAR #12046

Predicting “what” is easy, predicting “when” is the trick.

On Again Off Again: After a "Yes she is" "No she's not" tug of war in the news media, the current story is that the eurozone finance ministers meeting in Brussels to consider Greece's austerity plan is a non-starter. Apparently the finance ministers do not consider the Greek plan sufficient even to warrant discussion. Eurogroup President Juncker said that the prerequisites established by the EU had not been met - specifically in the matter of political assurances. In other words, the EU would like the Greeks to at least pretend they're going to do some of the things in their proposal.

Real Tale: According to Commerce Department data, January's auto sales grew over December's. According to just released retail sales data - which came in at just half the expected increase - auto sales were the weakest part of the overall 0.4% growth. December's retail sales were revised sharply downward, to a -0.5%. Note, too, that the unadjusted decrease of $98.5 billion in sales was the biggest one month drop in retail sales history. Merry Christmas and many Happy Returns.

Compounding the Interest: What's the sustainable long-term growth rate for the world population? And what's the sustainable long-term growth rate of the world economy? The answer to both is "Less than zero."

Creative Destruction: The worst aspect of the free market's creative destruction is that what is getting destroyed, at least in Greece, are the citizens. 25% of Greek companies have gone out of business, half of those that remain open cannot pay their employees, suicide is up 40%, hospitals have shortages of medicines, half the young people are unemployed... and so on. The country is collapsing into anarchy. The fundamental problems are two-fold. Yes, the euro is fatally flawed, but bankers and private investors fucked up and lent far too much money to obviously uncreditworthy borrowers. Competent bankers could have prevented most of this.

Band On the Run: The Republicans are betting that Congress will never be able to reinstate the long-deferred payroll taxes, and that they can use that as a stepping stone to abolishing Social Security once and for all.

Parageography: In my mental geography, America is not a place where 1.5 million children are homeless, where in some schools half the children arrive without having had breakfast, where families live in tent cities around major urban areas or in Las Vegas storm drains. I must be remembering another country.

One for All and All for One: Health-care costs overall fall when poor, uninsured patients are provided with coverage. “The use of primary care increased but use of emergency services fell, and -- over time -- total health care costs declined" by over 50%. Universal single payer health care is the most affordable way for the nation to make sure that decent medical care is available to all.

The Final Solution: The whole housing mess - from fraudulent foreclosures to underwater homeowners and banks pretending to be solvent - can only be resolved when the underlying problem is addressed. And what might that be? It is that Americans owe hundreds of billions of dollars that they will never be able to pay back. Much of it will have to be written off and our beloved leaders haven't the foggiest idea how to do this without pulling the whole thing down on our heads.

Blowback: If the fantasies and fabrications of the GOP wannabes are truly representative of modern conservatism, the conservative base they are wooing is simply delusional. For over a generation the GOP has appealed to blatant racial prejudices and social fears and delivered tax cuts and deregulation to the rich while blaming "the liberals" for the Republican destruction of middle class America. Now they reap what they have sown, which explains why those guys in the tinfoil hats are on television all the time, telling lies about each other.

SAR #12045

Now that the feast is over …

Close The Door On Your Way Out: Party poopers are pointing out that the end game for Frau Merkel is still getting Greece to leave the eurozone. Soon. And the euro isn't going to be saved, either.

Working Man's Friend: The Republicans now want to extend the withholding tax cut for the rest of the year – without demanding offsetting budget cuts. Their plan seems to be to help Obama run up the deficit willy-nilly and force the Treasury into a debt ceiling kerfuffle before the fall elections.

Step Right Up: The European Union suspects that Spain's is “very likely” likely to take action against Spain's newly installed government by May for “overstating” 2011's deficit figures in order to delay imposing additional austerity measures. It's thought that a fine of 0.1% of the nation's GDP would get their attention where the havoc wrought in Greece hasn't seemed to make their point. Portugal seems to be beyond hope.

Pedal To The Metal: The San Francisco Fed anticipates unemployment will remain well above 7% for several more years, making it vital to keep flooding the market with dollars.

Batting Order: Moody's has presented a new European batting order: At Aaa negative: Austria, France, and the UK. Demoted from A1 to A2 are Slovakia and Slovenia. Now at A3 are Italy and Malta. Spain dropped from A1 to A3, and Portugal is now down to Ba3. All have negative outlooks.

Down Is Not Up: Is December's 21.2% y/y decline in listed housing inventory (a) a good thing or (b) reflecting reality? Probably neither; sales were only up 1.4% y/y, so that didn't account for the decline. What does is a combination of a sharp decline in distressed houses entering the market as banks hold on to them so as to pretend they are worth something, the long pause in foreclosures, and individual owners fearful of trying to sell into a sure loss.

Berlin, We Still Have A Problem: The politician most likely to replace Papademos as leader after the April elections views the current concessions as renegotiable.

All Volunteer Army: Fox News says that females in the military have to make up their minds to be warriors and stop complaining about getting raped – what did they expect was going to happen? They need to take Santorum's advice and “ accept what God has given to you... make the best out of a bad situation.”

Recalculating... Recalculating: As the planet warms, the once in a century hurricane, the 100-year flood and similar unique displays of mother nature's might are becoming far more frequent. Do a global search on "100-year" and replace with "20-year".

Marketing 101: The Catholic Church – like any giant corporation – wants a continually expanding market, thus their opposition to contraception and endorsement of erectile dysfunction drugs. They argue that it is neither sexist nor hypocritical, just another way to expand their customer base.

Magic Bullet: Adding things like fiber to unhealthy foods does not make them healthy. Perhaps the kindest thing that can be said about synthetic fiber additives is that they can give you gas. There is no research that shows all this added fiber enhances anything but profit margins.

Shocker: We are underwhelmed to learn that military officers will kiss ass and parrot the company line to get ahead!

Speak Up! Rat out the neighbors today, before they make up stuff about you! That's the message from Nazi Germany, the Soviet Union, East Germany's Stasi, Homeland Security. Just keep in mind that when they come for you, innocence will be no barrier to incarceration, torture and eventual disappearance.

SAR #12044

Humanity isn't inherently evil, but we're fast learners.

Mulberry Bush: It is hard to tell which was worse, the behavior of the Greeks in the streets of Athens, or the behavior of those in the Parliament building as the EU/ECB/IMF foreclosed on the country, using it as a conduit to pass 100 billion euros to the banks. The questions now are (i) what the Greek population will do in response to the terms of surrender forced on them and (ii) what Germany will do next to force Greece out of the eurozone. Somehow the markets think things are better, as if words and deeds might coincide.

Idle Hands... Pew reports that only 54% of young adults (18 to 24) have a job.

Chattel: The GOP under Mitch McConnell says employers should have the right to exclude any health service or procedure they personally find objectionable from the medical insurance available to their employees. No more C-sections, perhaps. Or no coverage for vaccinations and immunizations. Let's bar female doctors from treating men... This is not about freedom of religion, it's about gutting health care in this country any way they can.

“And then what?” The same bunch that promoted the troop-free smash and grab of Iraq are now urging a 'surgical strike' against Iran's nuclear facilities that would have no collateral damage and no repercussions to the US, Israel, or the oil industry. Wrong. War is messy. War with Iran will be very, very messy. They've been preparing for this longer than we have.

Watched Pot: Scientists now estimates that by 2100 the earth will be at least 2°C warmer (we've already added 0.75°C) and possibly as much as 5°C hotter. Call it 3.5°C and put a fork in us.

Fine Print: There is no official version of the "mortgage agreement" agreement available and there will not be. The details will only be released when the documents must be filled in federal court, and a fully authorized, legally binding deal signed. And even after that the servicers will have three months to develop ways pass the costs on to the public. But don't worry, we're told, they document isn't available because they're trying to make it a better deal. For the banks?

Our Gang: Western Hemisphere oil exporters net output available for export fell from 2005's 6.0 mbd to 4.8mbd in 2010 and is still falling. Global net exports available to importers other than China fell from 40mbd in 2005 to 35mbd in 2010. That's why oil goes for $100 a barrel.

Lying Eyes: For 20 years Monsanto has been selling dramatically increased food production and reduced pesticide use. No, no, just kidding. For 20 years they've been advertising those things and selling lots of Roundup and Roundup-Ready nostrums. The increased production and lowered costs? Hey, it's advertising.

Candid Camera: It is a felony in Illinois to make a recording of a police officer beating the crap out of non-resisting citizens exercising their First Amendment rights. It'll be interesting to see just how even-handedly this law is applied come May's G8 and NATO gatherings in Chicago. Given the ubiquity of cellphones with video capability, lots of luck.

Sin-be-Gone: Florida Republicans think that Florida's poor are too dumb realize that a dollar in food stamps from their right pants pocket will buy a dollar of healthy stuff, freeing a dollar in their left pants pocket to buy sweets and chips. It this idea worked, then prohibiting a charity from using federal dollars to promote birth control and abortions wouldn't free up dollars that used to be spent elsewhere for birth control and abortion services. Look up the word 'fungible.'

Storytime: According to our text, the US “is the closest it has been in almost 20 years to achieving energy self-sufficiency... Domestic oil output is the highest in eight years... [and] prices will fall “in the long run because long-term production is declining.” (Note that the laws of supply and demand have been rescinded.) “The U.S. is producing so much natural gas that it is no longer profitable to produce , where the government warned four years ago of a critical need to boost imports, it now may approve an export terminal.” And so on. Pathetic.

SAR #12042

Greece is not unique, it is just first.

Definition: A terrorist is now officially defined as anyone who disagrees with the government on anything: Protesters who think we shouldn't bomb the crap out of Iran. Those who think killing random civilians via drones is wrong. Those who buy coffee for cash at Internet cafes. Those, like Ron Paul, who think that we are overtaxed and over-regulated. And those who think Nixon was wrong to dump the dollars last tie to gold are going to be in a whole lot of trouble, along with the rest of us.

Easy One: The banks or the Greeks? Europe appears is prepared to pay what it costs to save its banks. But not to rescue Greece.

Cave Dwellers: Around the world youth are leading the social unrest as they are the hardest hit by the global deleveraging. The US is not insulated from this – youth unemployment is above 20% and 1 out of 3 in the 25-29 age-range are back living with the parents. Don't be surprised when Yankee-Spring comes along.

Is There An Echo In Here? Ireland beat Portugal to be the first of the beggars to step up and ask for equality with the Greeks in writing off debts and handing out haircuts.

Car Pool: Gasoline consumption declined 21% from 54.8 million gallons a day(MGD) in July 2008 to 42.4 MGD in July 2011 and has now fallen another 27% to 30.9MGD in November 2011. Driving less during the ongoing economic contraction would be the likely explanation, but all the positive economic data put out by the government rules that out. Must be carpooling in all those hybrids.

Catchachism: Over 8,000 instances of child sex abuse have allegedly occurred in the Roman Catholic Archdiocese of Milwaukee. You know – Catholic Preists – old white men who know what's best for women... and little kids. Why would anyone ever send their child to a Catholic Church?

Shopper's Guide: Saudi Arabia says it will buy a nuclear weapon if Iran tests one. From E-Bay?

Pin Money: During a 2003 peace rally in Chicago, about 500 demonstrators were beaten, maced, arrested, charged, held for two days and then released. Others were arrested and released without charges, and many others were 'detained' but not arrested. Every single one of them will get from $800 to $15,000. Hey y'all, come on out to the NATO/G8 protests in March and make some money!

See You and Raise You: The “$4.00 a gallon by May” has now been upped to $5 by year's end, due to increasing demand from places like China and India that more than replaces the drop in demand from Europe and the US as their economies stall.

Sex, Lies & Politics: Huckabee tells CPAC: ‘We are all Catholics now!’ He's wrong, of course. And over 90% of Catholic women use some form of birth control and would like their health insurance to cover the costs. This is more of the Republicans hiding behind religion so they can punish women for having sex.

Asked & Answered: Why are capital gains and dividends not taxed the same as income from honest labor? Silly, look who does the honest labor and who buys the politicians. The old Golden Rulers again.

Tidy: A floating mass of trash the size of California, carried out to sea by the tsunami in Japan, has begun washing up on beaches in Washington. No hurry, it'll be washing up for years, if not decades. The Japanese disavowed paternity, "No one knows if it's from Japan.” Well it's not from Dayton, bubba.

Value Judgment: Facebook is valued higher than Citi or Pepsi. Valued. Not worth more, just 'valued'. At $102.6 billion, how many ads do they have to sell for how many years to make enough profit so the mania is anything but a Bigger Fool investment?

Shaken, Not Stirred: Improved satellite data has helped climate scientists refine their estimate of global warming's impact on ice caps and glaciers. While nearly 230 billion tons of ice is melting into the ocean from glaciers, ice caps, and mountaintops annually, that's about 30% less than previously estimates. The same research shows that glaciers in the higher Himalayas that have not yet begun to melt. It is very still very chilly up there and will be for a long time. Which means it will take us longer to drown, but eventually we'll get 'em to melt.

SAR #12041

Our trillions of dollars in debts are a call on quantities of labor and resources that do not exist and probably never will.

The Reformation: Here's the proposed wedding vows for the marriage of Greeks to French and German banks: GDP to shrink at least 5% more this year. Health related spending to be cut 20%. Wages to be cut 20% (or in most cases, 100% as unemployment soars, including 150,000 public servants - the equivalent of Uncle Sam letting 5 million go). The Greek government kcaved in and has announced a deal has been reached. re their second bailout, The head of the European Central Bank is saying a deal has been done as well. The German finance minister says not so fast, the cuts proffered do not fulfill the required conditions. If Greece gets a deal, other countries will want one, so it behooves the overlords to make the conditions as nasty as possible.

Good Tiding Of Great Joy: Unemployment claims fell 9,000 to 358,000 last week. The previous week was revised up to 373,000 from 367,000. Pepsi didn't get the word, announced plans to fire 8,700 workers. It plans to spend the money on advertising.

A Drop in the Bucket: The headlines got it right: Mortgage Settlement Good for Banks, Not So Good for Homeowners, The Worst Kind of Crony Socialism, and so on. The $5 billion from the banks is just $1 billion each, probably spread over 3 years. They pay out far more than than in bonuses - they made $46 billion in profits just last year. Only 1 in 11 underwater homeowners will benefit and the benefit will average a $17,000 write-down and refinance on a mortgage that is $50,000 underwater. And about 20% of those the banks kicked out of their houses may get as much as $2,000 as a consolation prize. Those of you who stayed current on your mortgages get to applaud as your pension fund and your taxes pony up most of the remaining $20 billion.

Chasing the Dragon: The market was happy to learn that consumer credit is rising because that means more consumption which leads to stronger economic growth. This much is true. But it assumes either that the consumer will consume much less in the future, or that the consumer's income will be much higher in the future. It does not assume the most likely outcome: That the consumer will end up having to borrow even more - not to pay the debt, but for everyday living expenses. Oh, wait. That's what they're doing now.

Little Behinds: The administration is going to allow ten states to escape from the well-intentioned but poorly formulated No Child Left Behind and let them continue to turn out illiterate, uneducated children. But now they will not call the schools failures or the students unprepared - now they're going to be 'improved." As a bonus, school districts will be able to stop cheating on test results.

Evasive Action: Barred from using the US dollar, Iran has turned to barter and gold to conduct its international trade. Agri-giant Cargill acknowledges that trade with Iran is still possible through "payments other than the dollar... in gold bullion and barter deals." Which makes the dollar as an intentional reserve currency irrelevant, which is not what Obama had in mind.

Let's Look At The Record: Housing gurus have been seeing the bottom of the housing market again. They're wrong this time, too. Zillow reports median home values decreased 4.7% y/y, and they expect a 3.7% decline during 2012. BofA's Michelle Meyer says " those who are counting on the housing sector to save the economy this year will be disappointed. She expects home prices will fall another 7% through 2013.

Fungibility: The US spent $100 billion more on gasoline in 2011 than in 2010. We're headed over $4 a gallon before summer. It is likely to have a negative impact on the economy, especially when much of that money goes to foreign producers.

German Miracle: Why does Germany think the way forward is through downtrodden workers? Maybe because that's how they do it. They have no minimum wage, 20% of their workforce makes less than €400 ($520) a month, many skilled workers are listed on the books as custodial staff earning €2 an hour.

SAR #12040

How much of your future have you already spent?

Volunteers: The Obama administration is said to have forced all the state's AGs to voluntarily agree to let the mortgage bankers off with a slap on the wrist and a Get Out of Jail Free card.

Done deal in Greece? German lawmakers will have to approve the bailout funds, pass on letting the AESF guarantee ECB-held Greek bonds, and approve guaranteeing Greek bonds held by the private sector after the debt swap. They may have an agreement in principal, but the cows can't even see the barn yet. And someone's got to keep Zorba in line, too. When you get through being enthused about how far down the road the can went tumbling, tell me about Spain.

Blockade: The US sanctions against Iran have forced it to default on its payments for 200,000 tons of Indian rice. Tehran is having trouble buying rice, cooking oil and other staples to feed its 74 million people weeks before an election. Starving them into submission is far more humane than an outright attack, but don't expect it to win a lot of hearts and minds.

Ends/Means: They started it! That's Obama's justification for embracing a Super PAC to raise and spend unlimited & deniable money buying a second term. The Obama campaign explained that there was too much at stake not to behave as despicable as their opponents.

Downhill: Like Sisyphus' rock, the Italian economy is picking up speed as it goes down hill, with GDP now contracting at a 0.3% annual rate.

Unexpectedly: Closing out the year with €1.06 trillion in exports – the most ever – didn't save Germany's exports from a 4.3% decline m/m in December, as international trade slowed. Imports also fell 3.9%, unexpectedly.

Silly Question:Why do the horrific events in Syria not prompt a Libyan-style intervention by NATO? Oil, or the lack thereof, and Russians and the presence thereof.

May The Power Be With Them: Chinese electricity consumption declined 7.5% y/y, the first production decline in ten years. It is thought that this reflects a sharp slowdown in Chinese industrial production. Either that, or they celebrated Chinese New Year in the dark.

Cue Laughter & Applause: The ECB is willing to forgo profits on their holdings of Greek sovereign bonds. Profits? On Greek bonds?

Life In The Austerity Lab: If there were a typical Greek today, he or she has taken a 40% cut in pay and seen the sales tax rise to 23%. This cold winter has brought increased electricity costs and a new tax on heating oil. Gasoline is $10 a gallon and rising – assuming the Iranians keep shipping fuel. If retired, the pension has been cut. The kids are around the house all day because the schools can't pay the teachers. The local clinic's funding has been cut 40% and there are shortages of many common medicines. Do the Greeks feel gratitude to the Germans and French for rescuing them? Did the Greeks vote for thee austerity measures? Did they even get to vote for the leader installed by the EU? Do the Greeks feel proud of having to suffer now and suffer tomorrow so French banks can remain solvent? And the new bailout plan turns the screws even further?

Porn O Graph: Shy, not retiring.