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2017-12-26 10:01 by Karl Denninger
in Corruption , 681 references
[Comments enabled]  

Time for this one again:


Just in from a reader..... Texas' teacher's retirement system (TRS) served up an upper-decker for Christmas.

You know all those teachers and others who say "they're protected" in their retirement -- and health care?

Well, maybe they are, but guess what -- their spouses?  Not so much.

Health premiums for spouses (paid by the retiree) just went up -- a wee bit.

From $200 -> $700 a month.

2% inflation eh?  Uh huh......  See what happens when you intentionally ignore all the fraud for years because you believe "I'm protected"?

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2017-12-26 07:00 by Karl Denninger
in Federal Government , 292 references
[Comments enabled]  

I'm not sure what's going on here, but this much I do know -- nobody is talking about this in the media, and they should be.

The latest MTS (Monthly Treasury Statement) has some interesting data that I cannot explain when it comes to Medicare and Medicaid.

Specifically, it appears that Medicare and Medicaid spending is down materially in the first couple of months of the fiscal year (by about 5%).  This is a chimera, however, and the internals are really troubling.

First, the funds given to the states for Medicaid are up by 4.55%.  That's bad, especially considering that we were under a "freeze" for the first month or so.  Worse, by a lot, are the SCHIP (children's health fund) payments, which I've flagged repeatedly as hideously bad -- they're up an outrageous 13.9% over comparable year period.

Medicare hospitalization is up 6.78% -- down a bit over the 9% run rate of recent years, but not by much.

So how did they get a decrease of 5% overall?

Two ways: They are underfunding the trust fund (although the received taxes are up) by 31% on a comparable year basis and are also not paying drug makers (by an astounding 51%.)  It's essentially impossible that half the senior citizen meds have suddenly stopped being prescribed, so this is quite-clearly a stiff-arm treatment coming from Treasury.

I suspect this is part of Treasury's gaming of the debt ceiling, but nonetheless it bears watching into the new year -- especially when our "lovely" asteroid-munchworthy Congress inevitably lifts the limit at which point an utterly huge shift in those numbers should "magically" appear.

That is, unless the MTS has become as accurate as the DOD's accounting....

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2017-12-25 10:01 by Karl Denninger
in Editorial , 243 references
[Comments enabled]  

First, any politician who spouts anything about Christmas in a religious context needs to be the recipient of a pile of horse**** in a gift box.  Oh wait, someone already did that with our Treasury Secretary.  It's a good start; long live the First Amendment.

Thus my first Christmas wish is that the rest of the political class get enough of these that they have to be delivered by front-end loaders.  And asteroids.

My second is that the people of this nation wake up from their toper, but I know better.  After all one need merely see "what matters" this time of year on display in every town in the country to figure that out.  Amish excepted, of course.  Speaking of which I have a special Christmas wish for Wood County, WI: May everyone in the county government get an asteroid down their chimney of sufficient size to level their house.  

I could write a little treatise as I have in prior years about how Christmas actually wound up in December -- but nobody cared in those years and won't today either.

So therefore, enjoy the day.  I won't ruin it for 'ya, but I hope you don't mind if I crack a smile at the Grump Tree I was given this year (and yes, it will look nice when planted in my yard in another week or so) as it seems rather appropriate to me.

Merry Christmas

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2017-12-24 10:14 by Karl Denninger
in Corruption , 603 references
[Comments enabled]  

You need no further proof than this:

 by tickerguy

Trump has now publicly acknowledged that McCabe violated several federal laws, not the least of which is the Hatch Act.  Yet he now proposes to allow McCabe to retire next year, keeping his federal pension and benefits.

Not only that but Congress has that evidence now too -- but note that the House Judiciary Committee is not issuing a single word about the fact that such actions are violations of several federal laws.

What Trump should do is have Sessions immediately indict him - after firing McCabe for cause, which terminates his right to any sort of federal pension or benefit.  If McCabe wants to sue for his pension let him, because that will force into the public record all of the evidence on exactly what he did as he will have to defend the claim that his firing "for cause" wasn't actually for cause.

Good luck with that.

But Trump isn't going to do that.  Instead he's going to let McCabe walk off with your money America.  Money he will steal from you for the rest of his life after having taken actions that, the President has good reason to believe, were felony violations of the law and abuses of his office, effectively using the FBI as a political weapon in a Presidential contest.

That's damn close to a coup, and that it failed doesn't matter.  It's still illegal.

There is nobody who can honestly support President Trump unless he upholds The Rule of Law, and in this instance since he has publicly declared that McCabe used the FBI as a weapon in a political contest he must either dismiss and prosecute him now or he has declared himself exactly equal in his tolerance and support of corruption as are both Hillary Clinton and President Obama.

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Once in a while you read something that has a nugget of truth in it -- on accident.

That is, the writer didn't intend to enlighten, and for 99% of the people in the country, it won't -- because America is, for the most part, an innumerate nation.

It is for this very reason that I have pounded my head against the wall on this web page for over 10 years.  If the people of this nation were not innumerate there would have been an utterly vicious reaction by now and not one single politician -- or Fed President -- would still be in office.  None.

They'd have either left peacefully or piecefully long ago.

So with that in mind read the following from an NPR article on the horrid living conditions in a Dallas suburb and the cost-push problems that are outlined therein:

Across the country, the majority of poor families are spending more than half of their already small incomes just to cover rent. And while median rent has increased 70 percent over the past two decades, housing conditions haven't improved, according to a 2015 Harvard study.

Got it?


What rate of inflation over 20 years produces a 70% increase in price?

About 2.7%.

What is the Fed's "inflation target"?  2%.

What is the rate of inflation in housing costs at the target?  A 49% increase in price.

Now here is what the Federal Reserve Act (a law, I remind you), says about the Fed's "objectives":

The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

But what does the Fed DO?

Following its meeting in January 2012, the FOMC issued a statement regarding its longer-run goals and monetary policy strategy. The FOMC noted in its statement that the Committee judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve's statutory mandate. Communicating this inflation goal clearly helps keep longer-term inflation expectations firmly anchored, thereby fostering price stability and moderate long-term interest rates and enhancing the FOMC's ability to promote maximum employment.

The Committee does not get to "judge."  But, it does, and since nobody stops them.....

2% inflation is not "price stability."  That rate of inflation results in a nearly 50% increase in prices over 20 years.  Further, "PCE" (not "core PCE" either, which is what they actually use) is not a measure of all prices in the economy; it intentionally ignores asset prices (some of which you must either buy or rent in order to live, such as housing) and instead substitutes for price things like "owners equivalent rent."

The Committee's "decision" in this regard is a direct violation of the Federal Reserve Act and the mandate set forward by Congress, they do not hide it and in fact specifically state what they are doing and yet not one question has been directed toward The Fed chair in semi-annual appearances, not one demand made to The Fed to cut that crap out and not one enforcement action has been threatened or taken, including exercising the right of Congress to de-authorize and literally delete The Fed.

I have repeatedly brought this fact up in my column here for the last 10 years running.

Do not blame the thief who repeatedly steals and then laughs when you refuse to call the cops despite seeing them steal from you and others right under your nose.  That thief is not a thief at all; he is in fact invited by you after the first theft because you refuse to call the cops.

Second, for all those who say "The Fed" creates money out of "nothing", that's a lie as well.  The Fed is forced (by law) to buy Treasuries and other guaranteed government debt securities.  Why does the Treasury issue more debt securities?  Because it runs deficits.  No deficit, no more debt securities, no Fed issuance of "money."  In other words it is not the Fed that "issues money out of nothing" and is responsible for the destruction of the dollar's purchasing power it is Congress that is responsible for that and you both DIRECTLY elect and allow Congress to continue to hold their positions of power.

And by the way, Trump and the Republican Party just added another trillion and change to the expected debt on a forward basis over the next ten years plus that which was already going to be put on from previous policy.  May I remind you that due to the way the CBO calculates such expected impacts, which is intentionally skewed by that very same Congress and their rules for the CBO, this has historically resulted in the CBO always understating the deficit increases that spending and tax decisions will have over time?


There was no "tax cut"; there was a tax shift on to the backs of the American people and those so-called "bonuses" that a few companies issued will be clawed back by same through monetary depreciation -- plus more!

Why are people not in the streets demanding that every single member of Congress resign and every single member of the FOMC vacate their seats -- now?  Why are not the people demanding that there be actual measurement of price change in all things bought and sold in the economy, including actual houses (not "owner's equivalent rent"), health care (not ginned up "health insurance", and not excluding what third parties pay) and stock prices?  And why are not the people demanding zero deficits and in fact surpluses be run, which would reverse the previous destruction of purchasing power?

In short the real inflation rate is not "under 2%" never mind that the Fed intentionally ignores food and energy -- as if nobody actually has to buy those to remain alive.  Oh, and Obamacare now, at least for another year and change (with the "tax cut" bill) -- at least for self-employed people.  (Note that the employer mandate was not killed by the tax bill.)

So here we are with a bunch of Americans living in squalor and whining about the poor state of housing.  Meanwhile the cost has gone up 70% which is actually below the price escalation of house prices over the last 20 years.  In other words so-called "slumlords" are indeed defraying maintenance and such but they're taking capital losses doing it as their properties are depreciating, and they're doing it because someone in the house paying rent is better than nobody in the house and thus collecting nothing.

Rather than all those less well-off people taking to the streets or, since many of them are on government assistance and not working (thus having no job to lose) descending on Washington DC and demanding the expulsion of both Congress and The Fed, replacing both with a mandate for government surpluses instead of deficits which will increase purchasing power over time and a zero inflation mandate coupled with actual price measurements across all things in the economy and enforcement by hanging if both Congress and The Fed do not comply we have whinefest pieces written like this.

Puerile and outrageous whines at that, since the complained about condition is in fact a function of compliance with what The Fed says it intends to do and which is in direct violation of the law and yet same has knowingly and intentionally gone unanswered both by Congress and the people who elect said individuals to Congress for DECADES.

Let me know when you're ready to actually demand and enforce that this lawless behavior end.  Until then the responsibility is yours NPR, among others.

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