Wednesday, December 18, 2013

As the Federal Open Market Committee (FOMC) of the Federal Reserve Bank meets to decide if it will or won’t tighten the money spigot known as QE, my bet is that the Fed stands pat.

Of course, that means I’m probably wrong, because the Fed never does the thing I think it ought to do, even the thing I think it will do.

But for better or worse here are my reasons:

1) The strength in the economy is more apparent than real. Our friends over at Political Calculations have done some investigation into apparently “robust” economic growth that the economy witnessed in the third quarter of 2013. What they found was that growing conditions were almost perfect for crops around the country. As a result, the U.S. was able to boost GDP—and exports—through bumper crops. From Political Calculations:

We drilled down into the Census' data on what the U.S. exported to China. And what we found is that the U.S. exported a record amount of soybeans to China in October 2013, the value of which accounted for 22.6%, or nearly $1 out of every $4 of the value of all $13.060 billion worth of the U.S.' exports to that nation, accounting for nearly all of the year-over-year increase.
 
So where did all these soybeans come from? Because they definitely weren't there last year....
 
It turns out that weather conditions in 2013 across all of North America were nearly ideal for growing just about every crop grown in the U.S., with the result that U.S. farmers were harvesting bumper crops of just about everything they grow in August and September 2013.
 
Those bumper crops, in turn, solves a different mystery: why did the U.S.' GDP unexpectedly grow so much on increased business inventories in the third quarter of 2013?
    2) Obamacare will be more of a drag on the economy in 2014 than it was in 2013. You know those mandates Obama postponed for a year? A new year will start in a few short weeks.

    And then watch out. Much of the employment market, the health of which is a key determinate of the continuation of QE, will be thrown into disarray, again. The members of the FMOC are aware of this. While it’s true that many of the health "reform” mandates are delayed BEYOND the mid-terms, that doesn’t mean the effects of Obamacare won’t be felt prior to the mid-terms.

    Remember, by December of last year companies were already making changes to hiring in order to accommodate Obamacare. While the employer mandate won’t be effective until January 2015, the disruption should be felt well before then. Here’s what Timothy Jost, a law professor at Washington and Lee who supports Obamcare said at the time the employer mandate was delayed in July 2013: “I hope that this means that employers who have been cutting employees to part-time will now call them back to full-time employment, but regret that the administration is delaying the implementation of an important provision of the ACA.” Jost can’t have it both ways. Those people called back to full time employment as a result of the delay are going part time again in 2014. That’s what happens when law professors try to “reform” the economy.

    3) The Fed doesn’t like to take the markets by surprise. Ben Bernanke, just in time to leave, has figured out the art of telegraphing his intentions. He was notably terrible in this role previously. The markets aren’t making new highs on the basis that the economy is improving by leaps and bounds. They are going to new highs because they think the risk of a cutoff with quantitative easing is low to minimal.

    4) The Housing Market has cooled off. For everyone from economists to electricians this is bad news. One of the central features of our economy is housing. The rise in interest rates precipitated by the bond market sell-off has cooled of housing big time. Again Political Calculations provides some context:
We believe we've identified where the distress in the U.S. economy is originating. A number of Real Estate Investment Trusts (REITs), which allow stock market investors to be able to invest in the nation's real estate markets, have been acting to cut their dividends.
 
This follows the apparent stagnation of the U.S. new home real estate market, which has seen price increases stall out in recent months as mortgage rates spiked upward, largely upon the speculation that the Federal Reserve will act to trim the amount of U.S. Treasuries and Mortgage-Backed Securities from its current buying pace of $85 billion per month, which has driven that increase in U.S. interest and mortgage rates.
 
Ironically, it’s merely speculation that the Fed will start to taper that will help continue quantitative easing. As interest rates have gone up the housing market has cooled off a bit more than perhaps the Fed governors would like.

Here’s the more worrisome trend however: In those moments when the stock markets rally on more QE, the bond market doesn’t react with lower interest rates. Instead interest rates have remained at higher levels.

This is either because the bond market thinks QE is coming to an end or, more ominously, it’s because the bond market thinks that there is more risk in QE than the markets appreciate.

In 2014, the trouble is, we’ll find out which is right.

Dirty Harry Reid sabotaged the filibuster, and now the Democrats are running wild in Washington. Mark my words: We all will pay a price. Thanks to Reid's crony-coddling rule change, unqualified stooges will manage the Obama Department of Homeland Security. It's a bundler's world, and we're just living in it. God help us. 
 
On Monday night, Senate Democrats voted 57-37 to end debate on the nomination of Jeh Johnson to head DHS. That's three votes short of the traditional 60-vote filibuster threshold that Reid nuked last month. Johnson went on to win his appointment by a 78-16 margin. The White House performed its Snoopy happy dance soon after, with President Obama declaring Johnson "a strong leader with a deep understanding of the threats we face and a proven ability to work across agencies and complex organizations to keep America secure."

DHS employs 240,000 people and boasts a $40 billion budget. Johnson, unlike his most recent predecessors, has never actually held an executive position governing a state or managing a complex organization. Let me summarize his relevant experience in border security, port security, airport security or immigration enforcement: Zero. Zip. Nada.

News coverage instead stresses that Johnson is the "first African-American" to hold the No. 1 position at DHS. Because, you know, diversity will keep us safe. Here's more you should know about Johnson: He's a lifelong beneficiary of the government/law firm revolving door, dating back to the Clinton years. In a recent interview with a legal website, Johnson cheerfully bragged that his initial "foray into national security was a fluke, really. The Clinton White House recruited me to be general counsel of the Air Force. I had no idea what the job was about, had never been in the military and had never set foot in the Pentagon."

Yep, a "fluke." That's a public confidence booster, huh?

Johnson counts among the "big breaks" in his life a fateful meeting with Obama in 2006. He went on to shovel gobs of money into Obama's campaigns and Democratic coffers. In 2008, this top campaign finance bundler served on the Team Obama transition team. Next, Johnson found himself -- like the feather floating in "Forrest Gump" -- appointed to the position of general counsel at the Defense Department. He was "involved" in ending the military's "don't ask, don't tell" policy and reportedly "oversaw" the use of unmanned drone strikes in Iraq and Afghanistan.

White House aides claim that Johnson is a "respected national security leader." But respected by whom (other than Democratic fundraisers) the administration will not say.

Perhaps we might comfort ourselves if the No. 2 in charge at DHS had strong qualifications and a record on national security to compensate for Johnson's deficiencies. Sorry. As I reported last week, Dirty Harry Reid exploited the nuked filibuster threshold to ram through Alejandro Mayorkas' nomination as deputy DHS secretary. Mayorkas remains under investigation for a partisan cash-for-foreign-investor-visas scandal by the DHS inspector general's office, which itself remains under investigation for fraud and ethics violations that endanger national security. His appointment is expected to sail through the full Senate on Wednesday.

At DHS, adjudicators remain under pressure to rubber-stamp visa applications. Open-borders ideologues continue to push for administrative amnesty programs behind closed doors and in circumvention of congressional oversight. Three years after the death of Border Patrol agent Brian Terry, his colleagues are under siege inside and outside their agency. And whistleblowers are an endangered species.

The elevation of Obama's stooge donors to the two highest civilian homeland security posts in the country comes as both vote-seeking Democrats and big-business Republicans prepare for another illegal alien amnesty push next year.

As Dan Stein of the immigration enforcement group FAIR noted this week: "There is no mistaking the signals the president has sent to the American people. ... President Obama has called on the House to pass 'comprehensive' immigration reform, yet nominated an individual to head DHS who has zero immigration experience. Thus, it is clear the president wants the amnesty portion of such a bill, but has little or no intention of prioritizing any enforcement measures that might be contained in it."

The inmates are running the asylum. Homeland security threats and ciphers are running the homeland security department. God help us all.
State Department announces its willingness to engage with Islamic Front in Syria 
From Jihad Watch / Posted by Robert Spencer

al-qaeda-in-Syria.jpgJeffersonian democrats

The U.S. mulls allying with an al-Qaeda force. What could possibly go wrong? "U.S. Weighing Closer Ties With Hardline Islamists in Syria by John Hudson for Foreign Policy, December 17 (thanks to Chas and Gayle):
As the moderate faction of the Syrian rebellion implodes under the strain of vicious infighting and diminished resources, the United States is increasingly looking to hardline Islamists in its efforts to gain leverage in Syria's civil war. The development has alarmed U.S. observers concerned that the radical Salafists do not share U.S. values and has dismayed supporters of the Free Syrian Army who believe the moderates were set up to fail. 
On Monday, the State Department confirmed its openness to engaging with the Islamic Front following the group's seizure of a Free Syrian Army headquarters last week containing U.S.-supplied small arms and food. "We wouldn't rule out the possibility of meeting with the Islamic Front," State Department spokeswoman Marie Harf said Monday. "We can engage with the Islamic Front, of course, because they're not designated terrorists ...  We're always open to meeting with a wide range of opposition groups. Obviously, it may make sense to do so at some point soon, and if we have something to announce, we will."
How soon the U.S. might engage with the powerful rebel faction, if it chooses to,  is uncertain. On Saturday, Reuters reported that Syrian rebel commanders in the Islamic Front were due to meet U.S. officials in Turkey in the coming days to discuss U.S. support for the group. A Syrian opposition source speaking with The Cable said that efforts were in place to unite the Western-backed Free Syrian Army and the Islamic Front under the same coalition. "There are negotiations planned for very soon between the [Free Syrian Army's] SMC and the Islamic Front to determine what the relationship will be," said the source. America's role in coordinating the talks remains unclear.
Though the Islamic Front is not a U.S.-designated terrorist group, many of its members hold intensely anti-American beliefs and have no intention of establishing a secular democracy in Syria. U.S. interest in the group reflects the bedraggled state of the Supreme Military Council and the desire to keep military pressure on President Bashar al-Assad ahead of next month's planned peace conference in Geneva. "The SMC is being reduced to an exile group and the jihadists are taking over," said a senior congressional aide.
The creation of the Islamic Front was announced on Nov. 22 with the purpose of uniting the strength of prominent Islamist militias across the country. Seven Islamist groups, with a total estimated strength of 45,000 to 60,000 fighters, signed on to the merger.
Soon after its creation, the Islamic Front signed a charter that made it clear the group aimed to create a Sunni theocracy, not a Western-style democracy. The document rejected the prospect of any sort of representative government, arguing that in Islam, only "God is the sovereign." It explicitly rejects secularism as "contradictory to Islam," and argues that Syria's ethnic and religious minorities can be protected on the basis of Islamic law. 
Some of the comments from the Islamic Front's top leaders support the contention that the group's ideology comes dangerously close to that of al Qaeda though the front is not aligned with the terrorist network. Zahran Alloush, the Islamic Front's military chief, has demonized Syria's Alawite minority and called for them to be cleansed from Damascus.
As he put it in a recent video: "The jihadists will wash the filth of the rafida [a slur used to describe Shia] from Greater Syria, they will wash it forever, if Allah wills it."
Though the coalition's beliefs are troubling, their military strength can't be denied. By some estimates, it's the single largest rebel command. With an inventory of heavy weaponry, tanks and artillery, experts say it's both disciplined and generously funded by Gulf sources...

You Won’t Believe How The Government Spent $30 Billion Of Your Money In 2013

by / Personal Liberty Digest


You Won’t Believe How The Government Spent $30 Billion Of Your Money In 2013
Senator Tom Coburn (R-Okla.) released his annual government spending “Wastebook” on Tuesday, highlighting $30 billion in wasteful government spending in 2013 on 100 different projects.

The report also said that while the government went out of its way to inconvenience average Americans to prove a point about the $85 billion government sequester and shutdown, it continued to throw taxpayer dollars away by lending millions to wealthy Americans for beachfront property, purchasing 3-D pizza printers for NASA and building a $300 million failed Army surveillance blimp.

The report’s comic book themed cover page references $125,000 spent by the National Endowment for the Humanities (NEH) and the National Endowment for the Arts (NEA) to finance the production of a documentary, “Superheroes: A Never-Ending Battle,” which examines the history of comics and their impact.

“Collectively these cost more than $30 billion in a year when Washington would have you believe everything that could be done has been done to control unnecessary spending,” Coburn said in a statement. “Had just these 100 been eliminated, the sequester amount would have been reduced nearly a third without any noticeable disruption.”

The budget hawk contends that the 113th Congress has provided a good example of why lawmakers should be paid only when they get the job done.

“The first session of the 113th Congress will likely go down in history as the least productive in history, more notable for what it do not do than what it did,” Coburn said, adding that the government shutdown cost taxpayers $400 million to reinstate paychecks for furloughed Federal employees who earn more than $100,000 a year.

“Congress should not be paid when it fails to pass an annual budget required by law,” Coburn said.

The lawmaker also noted that the budget deal currently being touted by some lawmakers does nothing to cut the government’s most wasteful spending highlighted in his report.

wbookThe report’s comic book themed cover page references $125,000 spent by the National Endowment for the Humanities (NEH) and the National Endowment for the Arts (NEA) to finance the production of a documentary, “Superheroes: A Never-Ending Battle,” which examines the history of comics and their impact.

Here are 15 examples of the most outrageous government spending as noted by the report (photos from Coburn’s report):

1. Uncle Sam Looking for Romance on the Web — (NEH) $914,000

ffMore and more people are looking for love online and now Uncle Sam is paying to make the web a little more romantic. The Popular Romance Project has received nearly $1 million from the National Endowment of the Humanities (NEH) since 2010 to “explore the fascinating, often contradictory origins and influences of popular romance as told in novels, films, comics, advice books, songs, and internet fan fiction, taking a global perspective — while looking back across time as far as the ancient Greeks.” In addition to the funds provided by NEH, the Library of Congress Center for the Book is also a participant in the project.

2. Beachfront Boondoggle: Taxpayer’s on the Hook for Paradise Island Homes — (HI) $500 million

Ever dream of escaping it all and owning a dream home on a remote island paradise? Didn’t think you could afford it? Think again. There is now a U.S. Department of Agriculture (USDA) home loan program here to help you. Created to assist those with low and moderate incomes in rural areas obtain “safe and sanitary dwellings,” the program has expanded to cover “mortgages for millionaires” and homes in suburban and urban areas, as well as seaside “resort communities.”
This year more than 100 individuals or families received loan guarantees for $500,000 or more from the U.S. Department of Agriculture to purchase a residence in Hawaii. If these new homeowners later cannot afford their new homes, it’s no problem; the federal government will protect the banks from losses by repaying 90 percent of the loans.

3. Pimping the Tax Code — (NV) $17.5 million

Through the tax code, Uncle Sam is assisting the operation of the legal brothels in Nevada. These businesses are antiquated practices from the days of the state’s silver boom starting in the 1850s, yet they still manage to get special treatment in the tax code through exemptions designed for businesses.
Though prostitution is illegal almost everywhere in the nation, the federal tax code still allows brothels to qualify for standard business deductions and expenses. These deductions significantly reduce a brothel’s overall federal income tax liability, even though annual revenues for the industry have been approximately $50 million. All while other sectors of the economy shriveled.
Brothels can take deductions for groceries, “salaries and wages of prostitutes, rent, utilities and taxes and licenses.” The Mustang Ranch brothel, which was Nevada’s oldest, reduced its income tax liability by also deducting costs of “promotion,” which included “free passes.” Workers are also allowed business deductions. “[B]reast implants and…costumes” have also been ruled allowable deductions by the Internal Revenue Service (IRS).  Workers can also deduct the cost of “equipment for that specialized stuff,” noted one tax expert

4. Mass Destruction of Weapons — (DoD) $7 billion

As the U.S. war effort in the Middle East winds to a close, the military has destroyed more than 170 million pounds worth of useable vehicles and other military equipment. The total amount of equipment eventually to be scrapped — the equivalent of 77,000 metric tons — is approximately 20 percent of the total war material the U.S. military has in Afghanistan.
The military has decided to simply destroy more than $7 billion worth of equipment rather than sell it or ship it back home.

5. Millions Spent Building, Promoting an Insurance Plan Few Want and a Website that Doesn’t Work — (Department of Health and Human Services) At least $379 million

21-b47b4b442cWith nearly half-a-billion dollars in government funding put behind promoting a product relatively few people seem interested in purchasing from a website that doesn’t work, Obamacare is perhaps the biggest marketing flop since Coca-Cola introduced the world to “New Coke” in 1985.
The cost to build Healthcare.gov is estimated at $319 million so far. “The total amount to be spent nationally on publicity, marketing and advertising will be at least $684 million, according to data compiled The Associated Press from federal and state sources.”

Op-ed:
Arrogant narcissism...Obama's calling card
By: Diane Sori

Narcissist: someone with excessive love or admiration for oneself characterized by self-preoccupation and lack of empathy for anyone other than themselves.

Barack HUSSEIN Obama will forever be known as the most narcissistic of all America's presidents. Everything is all about him ...ranging from 'selfies' taken at a state funeral, to photo-ops garnered on the backs of dead children, to single-handily taking out Osama bin-Laden (in his own mind anyway). Every press conference, every speech, every address to the nation is done for his adoration alone...for the man who is our president (gag) fancies himself King of America.

And if he is our King then 'We the People' are but his lowly subjects expected to fawn over him... bow down to him...and swoon when he walks by as we throw rose petals at his feet as it's all about an audience of adoring subjects...for narcissists feed on being center stage at all times.

And in the world of politics center stage means photo-ops...all cameras zeroed in on me, me, me... looky at me...translation: Barack, Barack, Barack...as this is a president who relishes in attention...a man who will inject his image into historical events (as he did at the recent Pearl Harbor observances)...and even play to negative attention if it gets all eyes focused on him...for even negative attention is better than NO attention at all.

Just think about this for a moment...when Obama is scheduled to give a speech, address the nation, or hold a press conference, Americans are asked to tune it at a certain time. And as usual our media anointed 'savior' is always late...late so he can make a grand entrance and have all eyes focused on and mesmerized by him as he slowly makes his way to the podium...as the msm cameras lovingly pan him as he strolls...struts actually...up to said podium as his narcissistic brain tells him that we lowly subjects are sitting there in anticipation of his every word.

Now remember, the State of the Union Address is coming up next month and all State of the Union Addresses are given before Congress in the halls of Congress, and as Obama enters the room to a standing ovation...relishing in the applause... enamored by everyone standing and clapping for him... this adoration becomes his life blood as he flashes that big smirk of a smile for this is what narcissists do. And Barack HUSSEIN Obama does this quite well as he's playing to his audience... using his audience to feed his enormous ego.

And herein lies the story of a president whose said enormous ego has allowed him to have done only two addresses to the American people from the Oval Office...for in the Oval Office there is NO audience for him to play to.

The Oval Office is the heart of the White House, so to speak, where past presidents have addressed the nation on critical issues like the economy, the military, or foreign policy. Addressing the American people from the Oval Office affords 'We the People' a one-on-one audience with the president, if you will, as there is NO cheering section present, NO 'planted' clappers, NO adoring fans...it's just the President of the United States sitting at his desk looking into the camera like he's talking to each and every one of us alone.

Addresses from the Oval Office are reserved for serious matters...many times matters of war...and many times matters of sorrow given while our nation grieves. Ronald Reagan's consoling words after the Challenger disaster came from his heart and touched America's soul...George W. Bush vowing revenge against those who murdered 3000 Americans on a warm and sunny September day comforted a stunned nation...and these are but two that come to mind. But above all what addresses from the Oval Office should NOT ever do is betray our country...betray those who serve...betray the trust America is supposed to have in its president. In his five years in office, Barack HUSSEIN Obama has given but two Oval Office Addresses and both were in 2010. Remember, in the Oval Office there is NO live audience to play to and with NO audience words spoken are the epitome of seriousness...of getting the job done...and while getting the job done is on Obama's agenda it is NOT the job 'We the People' ever envisioned.

On June 15, 2010, Obama spoke from the Oval Office about the BP oil spill. This spill was an accident, yet Obama demonized the oil industry to the point of temporarily shutting down oil drilling in the Gulf. But in his shutting down of drilling...in his stopping construction of the Keystone Pipeline...in his catering to the EPA and their crying wolf about the 'supposed' dangers of drilling... Obama deliberately made us even more dependent on his brethren's oil. And doing this from the Oval Office where his narcissistic self knew NO one could boo him or call him to task....he was able to wait on the people he is really serving for having the safety of NO physical audience allowed him to give yet another nod and a bow to his buddy...King Abdullah of Saudi Arabia.

On August 31, 2010, Obama gave his second address from the Oval Office announcing the end of US combat operations in Iraq. Now let that sink in for a moment...the President of the United States used the sanctity of the Oval Office to tell the enemy when we would be leaving their country, thus handing them a timetable for when they could waltz in and retake all that our troops had freed. And in that split second the lives of all our brave troops lost became to him mere expendable commodities ...and all the American blood that was shed was now shed in vain. And this he proudly announced away from a live audience for he knew they would question this decision and so he chose deflection instead...true narcissist that he is.

Now when most people think of narcissism they also think of arrogance for the two go hand-in- hand. Remember, arrogance is having a sense of overbearing self-worth or self-importance... basically feeling superiority over others...and that fits Barack Hussein Obama to a tee doesn't it.

The man who says he's "doing what's best for the country" when what he really means is 'it's my way or the highway' speaks volumes of a man totally lacking in humility...a 'community organizer'...who had the arrogance to do away with our free market health care system that encompassed a full 1/6th of our economy...and then replace it with a more expensive system that denies you your doctors... denies you your hospital of choice...denies you the policies you were happy with as his arrogant self wants you to know that he has deemed you 'under-insured'...and soon to deny you your very right to life as those of a certain age will be unable to access life-saving medical treatment just to satisfy this man's arrogant obsession with 'fundamentally changing America' to line up with his ideal of a more 'just and fair society'...a society where 'the haves' are the devil trying to deny the 'have-NOTS' their Obama dictated just due.

Arrogance personified as Obama makes NO excuses for redistribution of your wealth to placate the 'sponges' who want... who demand...what you have but who will be damned if they have to work for it. And dare we forget his famous line that screams of arrogance at its very best...or should I say its very worst...as he declared in NO uncertain terms to Congress and to the American people that, "The Affordable Care Act is moving forward. You can't shut it down."

And let's NEVER forget Obama's arrogance concerning Benghnzi...his arrogance in knowing that his oh so controlled media downplayed this tragedy turning it into a non-issue as far as they were concerned. Only the most arrogant of the arrogant could turn the orchestrated murders of four Americans into a theater of the absurd complete with a laughable video as the supposed cause. And he had the sheeple smiling sweetly thinking all was as it should be for Obama's arrogance does NOTHING but fuel their adoration for the man who thinks himself untouchable.

And so Barack HUSSEIN Obama...the man who rules by Executive Order... combines  together in a perfect meld both narcissism and arrogance and it's 'We the People' who are the unfortunate recipients of the man who would be King.