Establishment Survey +155,000 Jobs; Household Survey +28,000 Jobs; Unemployment Rate Revised Up, Flat Since September

Initial Reaction

The establishment survey report of +155,000 jobs was about what most expected.

However, beneath the surface, this report looks weak.

The household survey shows a gain of a mere 28,000 jobs. The unemployment rate stayed the same although the number of people unemployed rose by 164,000.

December BLS Jobs Report at a Glance

• Payrolls +155,000 - Establishment Survey
• US Employment +28,000 - Household Survey
• Involuntary Part-Time Work -220,000 - Household Survey
• Baseline Unemployment Rate +.00 at 7.8% - Household Survey
• U-6 unemployment +.00 to 14.4% - Household Survey
• The Civilian Labor Force +192,000 - Household Survey
• Not in Labor Force  -16,000 - Household Survey
• Participation Rate +.00 to 63.6 - Household Survey

Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data.

Quick Notes About the Unemployment Rate

• Last month it was reported the US unemployment rate fell -.2 to 7.7%
• This month the unemployment rate was reported flat at 7.8% (so last month was revised up)
• In the last year, those "not" in the labor force rose by 2,199,000
• Over the course of the last year, the number of people employed rose by 2,436,000
• Long-Term unemployment (27 weeks and over) was 4,766,000 a decline of 16,000
• Ratio of long-term unemployment to overall unemployment is 39.1%. Once someone loses a job it is still very difficult to find another.

December 2012 Jobs Report

Please consider the Bureau of Labor Statistics (BLS) December 2012 Employment Report.

Nonfarm payroll employment rose by 155,000 in December, and the unemployment rate was unchanged at 7.8 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in health care, food services and drinking places, construction, and manufacturing.

Click on Any Chart in this Report to See a Sharper Image

Unemployment Rate - Seasonally Adjusted



Nonfarm Employment - Payroll Survey - Annual Look - Seasonally Adjusted



Employment is above the total just prior to the 2001 recession, and about where it was in mid-2005.

Nonfarm Employment - Payroll Survey Monthly Changes - Seasonally Adjusted



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Between January 2008 and February 2010, the U.S. economy lost 8.8 million jobs.

Since the employment low in February 2010, nonfarm payrolls have expanded by about 5.3 million jobs. Of the 8.8 million jobs lost between January 2008 and February 2010, approximately 60.22% have been recovered (not accounting for normal demographic-related job growth).

In 2012, employment grew by an average of 153,000 per month, the same as the average monthly gain for 2011.

Statistically, 125,000+- jobs a month is enough to keep the unemployment rate flat. For a discussion, please see Question on Jobs: How Many Does It Take to Keep Up With Demographics?

Once again, recall unemployment is based on the household survey.


Current Report Jobs



Average Weekly Hours



Average weekly hours have improved substantially but are still below where they were at the start of the recession.

Index of Aggregate Weekly Hours



The index of aggregate hours paints a good picture of the stall in the recovery. Employment is up, but hours are not up proportionally.

Average Hourly Earnings vs. CPI



Average hourly earnings has been falling for years and lagging CPI inflation since September 2009. Simply put real wages have been declining. Add in increases in state taxes and the average Joe has been hammered pretty badly.

For further discussion, please see What's "Really" Behind Gross Inequalities In Income Distribution?

BLS Birth-Death Model Black Box

The BLS Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey.

The Birth-Death numbers are not seasonally adjusted, while the reported headline number is. In the black box the BLS combines the two, coming up with a total.

The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance.

Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way.

Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.

Birth Death Model Adjustments For 2011



Birth Death Model Adjustments For 2012



Birth-Death Notes

Once again: Do NOT subtract the Birth-Death number from the reported headline number. That approach is statistically invalid.

In general, analysts attribute much more to birth-death numbers than they should. Except at economic turns, BLS Birth/Death errors are reasonably small.

For a discussion of how little birth-death numbers affect actual monthly reporting, please see BLS Birth/Death Model Yet Again.

Household Survey Data



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In the last year, the civilian noninstitutional population rose by 3,766,000. Yet the labor force only rose by 1,566,000.

Those "not" in the labor force rose by 2,199,000 to 88,839,000.

The massive rise of those "not" in the labor force is primarily economic weakness, not demographics. Actually, older workers are returning to the work force because they cannot afford retirement. One look at the average age of Walmart greeters and those working in fast food restaurants tells a story itself.

Decline in Labor Force Factors

1. Discouraged workers stop looking for jobs
2. People retire because they cannot find jobs
3. People go back to school hoping it will improve their chances of getting a job
4. People stay in school longer because they cannot find a job

Were it not for people dropping out of the labor force, the unemployment rate would be well over 10%.

Part Time Status (in Thousands)



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There are 7,918,000 workers who are working part-time but want full-time work. This is a volatile series.

BLS Alternate Measures of Unemployment



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Table A-15 is where one can find a better approximation of what the unemployment rate really is.

Notice I said "better" approximation not to be confused with "good" approximation.

The official unemployment rate is 7.8%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 is much higher at 14.4%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Duration of Unemployment



Long-term unemployment remains in a disaster zone with 39% of the unemployed in the 27 weeks or longer category.

Grossly Distorted Statistics

Given the complete distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is easy to misrepresent the headline numbers.

Digging under the surface, the drop in the unemployment rate over the past two years is nothing but a statistical mirage. Things are much worse than the reported numbers indicate.

Last month shows pronounced weakness in the underlying numbers, this month was weak again.

For a look ahead to 2013, please see Small Business Owners' Hiring Intent Plunges to 2008 Lows; Don't Blame Sandy or Fiscal Cliff.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

"Wine Country" Economic Conference Hosted By Mish
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Fire Rescues

While everyone sleeps, cops prevent a possible tragedy:

• Grand Crossing District officers kicked in two doors of a burning apartment building and ushered to safety a resident who had trouble walking and seeing through a thick haze of smoke that enveloped the second floor.
  
  “On our end its another family above me, she’s an older lady. They went upstairs, knocked on her door, helped her down the stairs," said Ashley Wilson, who was inside the building when the fire broke out.
  
  Two plainclothes officers were on patrol on the 400 block of East 66th Street in the West Woodlawn neighborhood when they noticed smoke from a first floor window.

Some of the quotes from the families and coppers might make you grin. Nice job Officers.

Nikkei Soars as Yen Sinks to 30-Month Low

Inquiring minds note the Nikkei is up 293 points (2.8%) to 10,688 as the Japanese 30-Year Yield is Highest Since 2011.

Thirty-year yields climbed to levels unseen since December 2011, tilting the so-called yield curve to the steepest level in 17 months. Japan’s newly installed Prime Minister Shinzo Abe said in a New Year’s statement that “bold” monetary policy is one of the three prongs of his economic measures.

The yield on the 30-year bond touched 1.995 percent, the most since Dec. 2, before trading at 1.99 percent as of 3:21 p.m. in Tokyo from 1.975 percent on Dec. 28, according to Japan Bond Trading Co., the nation’s largest interdealer debt broker.

Japan’s Nikkei 225 (NKY) Stock Average jumped 2.8 percent after the Standard & Poor’s 500 Index in the U.S. on Jan. 2 reached its highest close since September. The yen touched 87.83 per dollar, the weakest since July 28, 2010, extending its longest series of weekly declines since 1989.

Yen Weekly



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I happen to think Prime Minister Shinzo Abe is serious about causing inflation in Japan. The currency market seems to agree as well.

However, the yield on the 30-year bond is only 2%, which is nothing to get that excited over. For now, the bond market is not treating Abe's inflation threat that seriously. If and when the bond market does react, Abe will not like the state of affairs one bit.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Nice Job Anita!

Before we even quote the article, let's just lay this out there - Police CANNOT charge felonies in Cook County.  Almost every single felony charge must go through Felony Review, a construct unique to Cook County and Rockford if we aren't mistaken.

It is a method that appears to let the Cook County State's Attorney "try" a case before a judge is even involved, thereby leading to a supposedly higher conviction rate and greasing the skids for reelection chances. It also provides countless well paying patronage jobs for the connected bottom-of-the-barrel law school grads who can't find actual employment or don't want to spend years researching legal briefs.

It also leads to a dismal prosecution rate of felonies, everything being bargained down to misdemeanors or labeled "continuing investigation" while clearance rates hover around 25%.

Once again, Anita's minions cost people their lives:

• An alleged arsonist accused of setting a fire that killed his girlfriend and daughter on the West Side last week threatened almost exactly the same deed just three months ago.
  
  Nathaniel Beller filled his bathtub with gasoline and threatened to torch his 4-year-old daughter Neriyah and 9-year-old son Naciere during a tense standoff with Cicero Police on Sept. 9, but neither police nor the Cook County State’s Attorney charged him.
  
  Quickly freed after a psychiatric evaluation, the career criminal allegedly made good on his chilling threat at his mom’s house Saturday. Chicago Police say the mentally ill 29-year-old poured an accelerant on both children and their mother, Taniya Johnson, then started a fire that claimed the lives of Neriyah and Johnson as well as his own.

And the excuse given?

• Andy Conklin, a spokesman for the Cook County State’s Attorney office, confirmed that prosecutors declined to file felony charges, in part because Johnson refused to sign a criminal complaint. He declined further explanation of why Beller wasn’t charged.

Here's a funny little quirk of the law. If a police officer responding to a domestic situation sees cuts, bruising or obvious trauma on a victim, and the victim refuses to sign complaints against his/her abuser because they are afraid of further abuse, the officer is obligated under the law to sign complaints on behalf of the victim. Failure to do so subjects the officer to possible criminal and internal charges, termination and jail time.

But Anita's office can accept a victim's refusal to sign complaints to charge an asshole who has a 9-year-old standing in a tub filled with gasoline and the fallout is........what exactly? Oh yeah, a dead woman, a dead 4-year-old and a 9-year-old whose chances of survival are currently less than 50%.

Banned from Denny's

Ignorant citizen complains to an ignorant Denny's manager and stupidity ensues:

• Are you a cop? Do you carry a gun? Don't go to the Denny's in Belleville, Ill.
  
  You are not allowed, the police chief says. Not after what happened Tuesday.
  
  The flapjacks -- sorry, the flap -- began when several on-duty detectives with the Belleville Police Department dropped in to Denny's for some on-duty noshing, according to local media.
  
  They had their badges and their guns, but as detectives, not their uniforms, according to the St. Louis Post-Dispatch. This bothered a patron who then complained to a manager, David Rice, who then complained to one of the detectives: Please take your gun to your car or leave. No guns allowed.

Denny's attempted a walk-back and offered a half-hearted apology after finding out these were on-duty detectives, but Belleville Chief William Clay was having none of it:

• "This was an insult, a slap in the face, to those detectives and to all of the men and women who proudly wear the uniform or badge and serve in law enforcement," Police Chief William Clay said, according to the News-Democrat.
  
  "This individual [Rice] was the manager of Denny's. He therefore speaks for Denny's, in my mind. This policy effectively prohibits on-duty sworn police officers from dining in a Denny's Restaurant, but allows 'registered sex offenders,' 'felons' and or 'pedophiles' to enjoy a dining experience in Denny's."

Looks like Golden Nugget from here on out.

NY TImes Discovers Crime

Shocking discovery - murders happen in primarily minority neighborhoods!

• CHICAGO — This city’s 471st homicide of 2012 happened in the middle of the day, in the middle of a crowd, on the steps of the church where the victim of homicide 463 was being eulogized. Sherman Miller, who was 21, collapsed amid gunfire not far from the idling hearse that was there to carry away James Holman, 32, shot to death a week earlier.
  
  A funeral shooting at St. Columbanus Catholic Church on the South Side left neighbors fretting that no place, not even a church, felt safe any longer. “It’s become the Wild Wild West,” said Charles Childs Jr., who had watched from across the street as mourners screamed and scattered.
  
  
• More than 80 percent of the city’s homicides took place last year in only about half of Chicago’s 23 police districts, largely on the city’s South and West Sides. The police district that includes parts of the business district downtown reported no killings at all. And while at least one police district on the city’s northern edge saw a significant increase in the rate of killings, the total number there still was dwarfed by deaths in districts on the other sides of town, and particularly in certain neighborhoods.

The Times even provides a handy map of neighborhoods to avoid.

And of course, what's an earth-shattering discovery like this without the requisite blame being laid? The Times lists income, education, and racial percentages in its attempt to seek answers.

Nothing about broken homes, though. Missing family structure. And certainly no stats listing access to guns, seeing as how Chicago, Cook County and Illinois currently ban most ownership of handguns. That wouldn't fit the narrative of all guns being evil and needing to be banned - they already are (pending implementation of a court ordered Concealed Carry law that is.)

We certainly hope the local media picks up on this story. Maybe they can start listing the descriptions of offenders.

Ban Hammers, Clubs, Fists and Feet

Perusing the FBI crime stats reveals this info:

• According to the FBI annual crime statistics, the number of murders committed annually with hammers and clubs far outnumbers the number of murders committed with a rifle.
  
  This is an interesting fact, particularly amid the Democrats' feverish push to ban many different rifles, ostensibly to keep us safe of course.
  
  However, it appears the zeal of Sens. like Dianne Feinstein (D-CA) and Joe Manchin (D-WV) is misdirected. For in looking at the FBI numbers from 2005 to 2011, the number of murders by hammers and clubs consistently exceeds the number of murders committed with a rifle.
  
  Think about it: In 2005, the number of murders committed with a rifle was 445, while the number of murders committed with hammers and clubs was 605. In 2006, the number of murders committed with a rifle was 438, while the number of murders committed with hammers and clubs was 618.
  
  And so the list goes, with the actual numbers changing somewhat from year to year, yet the fact that more people are killed with blunt objects each year remains constant.

But don't let the facts get in the way of a good old panic-pushing agenda that has no basis in reality.

I'll Believe It When I See It

Here's one for the "I'll Believe It When I See It" file: Backlash pushes Republicans to seek cuts.

A conservative backlash against Republicans over their deal with Barack Obama to lift taxes has hardened the party leadership’s resolve to demand huge spending cuts as the price for increasing the country’s borrowing limit.

Mitch McConnell, the Republican Senate minority leader, rejecting Mr Obama’s statement that he would not negotiate over the issue, said the debt ceiling debate in coming months was the ideal time to force the administration to cut outlays.

“The President may not want to have a fight about government spending over the next few months, but it’s the fight he is going to have, because it’s a debate the country needs,” Mr McConnell said in an opinion article on Yahoo.com.

Mr McConnell, who is up for election in 2014, and his Republican colleagues in the Senate, have been stung by criticism on the right for their role in brokering a deal with the White House over the fiscal cliff.

The final deal, negotiated between Mr McConnell and Joe Biden, the vice-president, was passed overwhelmingly in the Senate, marking the first time Republicans in Washington have voted for income tax increases in more than two decades.

The administration had also wanted to adopt a proposal first advanced by Mr McConnell, which would have curtailed the ability of Congress’ to refuse to limit the debt ceiling.

But Mr McConnell no longer seems to support this plan and also says that the fiscal cliff agreement is the last time Republicans will support tax increases.

“The moment he [Obama] and virtually every elected Democrat in Washington signed off on the terms of the current arrangement, it was the last word on taxes. That debate is over,” he said.

Does anyone believe the Republicans will really hold out for budget cuts? I sure don't after all the white flag waving we have seen.

I sure hope I am wrong, but what I fully expect is another can-kicking exercise in which Republicans cave in on cuts to entitlements in return for Democrats caving in on cuts to military.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com 

60% of Spanish Companies are Losing Money, Social Unrest Evident; Unemployment Rate Drops

Via Google translate from Libre Mercado, Joan Rosell, the president of the Spanish Confederation of Employer Organizations (CEOE) has estimated 60% of Spanish Companies are Losing Money.

This is a Mish-modified translation of some key snips.

In an interview with the newspaper La Razon, Rosell said that "social unrest is evident and the business world is no exception."

The private sector "has already made ​​all the restructuring that had to do and the decline in employment in the private sector has virtually stopped. Now is the time for restructuring the public sector."

After defining the first year of Mariano Rajoy's government as a year of shock, Rosell has considered that the Spanish economy has "superfluous fat on many sides: Central government, regional and local. We are a hyper-regulated country".

Still, the CEOE president has identified several dynamic sectors in the economy, such as tourism, and exports (automobile, capital goods, power and chemical), and Rosell points out that Spain is gaining positions and externally against France , Italy or Germany.

Unemployment Rate Drops

According to the Financial Times, Spain's unemployment rate fell in December. This is the first drop in unemployment since July. However, that drop follows heavy job losses in the prior two months.

Spain saw a slight drop in the number of registered unemployed in December, in a welcome but most probably fleeting boost to the recession-plagued economy.

According to figures released by the ministry of labour on Thursday, the number of unemployed Spaniards fell by 59,094 between November and December. This followed two months of heavy back-to-back job losses, and left the overall number of unemployed 1.2 per cent lower at just under 4.85m.

December is usually a relatively strong month for the Spanish jobs market, as retailers, restaurants and other service providers bolster their staff ahead of the Christmas season. Even by that standard, however, the past month was exceptionally buoyant: according to Spain’s labour ministry, the drop in the number registered unemployed was the largest on record.

Raj Badiani, an economist with IHS Global Insight, described the December figures as a “rare piece of good news”, but pointed out that the rise in employment was the result of a “temporary fillip to short-term service sector employment”.

Most economists expect the Spanish unemployment rate to remain above 25 per cent in 2013, and for the economy as a whole to endure another year of recession.

Hyper-Regulation with Bloated Public Sector

Here is the problem in a nutshell: Spain is indeed a hyper-regulated economy, with a banking system that is insolvent, a hugely bloated public sector, unemployment over 25%, and youth unemployment over 50%.

Structural problems remain and over half of businesses are losing money. Don't get too excited about a seasonal rebound in hiring.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com 

Glass Half Missing? What About Healthcare Premiums? What's the Hit to GDP?

I have seen Fiscal Cliff analysis written from two perspectives

1. Republicans Caved In
2. Democrats Caved In

Theory number 1 (Mine and others) says Congress punted the ball and Republicans waived the white flag. Given that virtually nothing has been done about the deficit, I fail to see how there can possibly be any debate on this. Yet there is.

Theory number 2 (primarily liberals) still blames Bush for the "Bush Era" tax cuts, while moaning about spending cuts that did not happen, and bitching that not enough tax hikes occurred on the wealthy. Curiously, the "Bush Era" tax cuts are now the "Obama Era" tax cuts and even the AMT problem was allegedly fixed.

A subset of the proponents of perspective number 2, people are bitching the "temporary 2-percent reduction in Social Security taxes" just expired.  Payroll taxes will jump from 4.2% to 6.2% of income for everyone.

In the glass half missing theory, this will cause a 1% hit to GDP so it should not have been done. This set of folks wanted "temporary" to become permanent, while simultaneously bitching about the "Bush Era" tax cuts.

Lost in the entire debate is how the country can possibly afford any of this.

What About Healthcare Premiums?

Let's assume for the moment that the expiring payroll tax cut will amount to a hit on GDP of about 1 percent. Reader Greg writes ...

Hello Mish

One thing I have not heard a lot of chatter on is the size of the increase in healthcare premiums most small to medium-sized companies are experiencing.  I have involvement with 3 companies and all three have seen quotes from current providers with an average increase over 30%. 

It's hard to extrapolate this, as in small companies it only takes 1 or 2 serious illnesses to jack the costs.  However, I've yet to talk to anyone that has seen anything less than a 10% jump.  And if employers pass along 30-40% of the costs to employees that could add another 1-2% out of each employees paycheck, which doubles the whole FICA thing. Greg

I am not quite sure how to total this either, but Obamacare is having some peculiar effects to say the least.

Many businesses are shifting even more to part-time employment, and given there are no incentives anywhere to reduce healthcare costs, those costs will continue to rise, taking a bite of the checks of workers, and giving employers additional reasons to not hire in the first place.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Station Security - NOT!

Once again:

• How about addressing what happened out here in 003 yesterday? No, it wasn't on the news because we can't have the Sheeple reminded of just how insecure some of our facilities are and how determined some of the savages are that we deal with daily.
  
  Brief synopsis: dude walks into the desk at 0900 hours, sucker punches an officer and then tries to disarm him. Other officers subdue the asshole, but not before two are injured (loose teeth, busted lip, possible broken thumb, etc.). Our illustrious CCSOA tried to decline the upgrade based on asshole being on "psych meds". We quickly pointed out that dude did the same thing at 004s desk in October 2008 and promise to override if necessary. (Reference CB #18568012 for yesterday's incident, CB # 17385628 for the '08 incident). Dude is charged accordingly...although he should have been put down like the dog that he is. 

Nice to see that J-Fled's station security survey is still bearing zero fruit and hasn't made a single officer safer by and measure.

And an interesting tidbit - the psycho who lit the house on fire in 010 the other night, killing a woman, her 4-year-old daughter and himself, was the same headcase who wandered into the 011th District a year or so ago with a rifle before being disarmed by the desk crew.  And still no additional security safeguards in place.

Another Wreck?

Anyone hear about a wreck in 016 early New Years morning?  Couldn't find any media coverage, but an e-mailer said a parked Tahoe got totaled by a drunk and two cops had to be cut out of the vehicle somewhere on Foster.

If true, best wishes for a speedy recovery.

Gallup Poll Suggests Private Sector Hiring Down Since April

Gallup reports U.S. Job Creation Steady in December, but hiring in the nongovernment job sector stalls.

The following charts (trendlines added by me) reflect answers to Gallup's question: Based on what you know or have seen, would you say that, in general, your company or employer is 1) hiring new people and expanding the size of its workforce, 2) not changing the size of its workforce, 3) letting people go and reducing the size of its workforce.

Percentage of Employers Hiring Minus Those Letting Go



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The hiring momentum that began in early 2009 slowed in mid-2011. Momentum vanished (at best) in March or April of 2012.

Slowdown in Hiring Since Mid-2011



There appears to be even less momentum from this perspective. However, the first chart is simply a subtraction of the numbers in the second chart.

Factor in Government Employment and Things Look Worse



From this perspective, private hiring peaked in April of 2012 and has since been in a very slow decline.

Meanwhile, states and local governments have been adding workers since the beginning of the year although it is highly doubtful they can afford such actions with private sector running at stall speed at best.

Bear in mind, two things: First, the survey represents what people perceive to be happening at their employer. Actual hiring or firing may be different.

Second, these charts only show direction not size. Thus, a small-sized company laying off a single person counts as much as a larger company that is hiring 40. Of course, the opposite is true as well  (a small-sized company hiring a single person counts as much as a large company firing 40).

However, based on the randomness of the samples, there will be more calls to those working for large-sized companies than those working for small or medium-sized companies and most people are probably aware of what their company is doing.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Crowd of Fools Cheers Obama; Tweet Irony

Caroline Baum, one of my favorite Bloomberg columnists has an interesting article today that's worth a read.

Please consider Wanted: Middle-Class Tweeters for White House Event.

Who were these people, gathered on the afternoon of New Year's Eve to fete the president as a deal to avert the fiscal cliff was hanging in the balance?

They were "middle-class Americans" who had tweeted their way to a staged White House event, according to Politico.

The crowd gathered at the Eisenhower Executive Office Building on Monday looked fairly young, which makes their cheering even more disconcerting. Don't they understand that the president has done nothing to protect future generations from a crushing debt burden? Nothing about deficit reduction other than to talk about it? Nothing about preserving Medicare other than to demagogue any changes to the program?

A president truly interested in the issues he claims to be would have used this opportunity to educate younger Americans. Explain to them that the government has made promises to the elderly that it can't keep. Tell them they have choices to make on the benefits they want and the price they'll have to pay.

You won, Mr. President. You won re-election. You got your promised tax increases on the rich. But we lost. And if we lose, then ultimately you lose.

Tweet This

Politico notes Obama's staged event, jokes draw McCain rebuke

The crowd was nothing if not adoring. ("Thank you for having us!" Two standing ovations.) And the president did seem in a good mood. (Cracking jokes about showing up at an audience member's house to ring in the new year.)

Sen. John McCain (R-Ariz.), for one, took to the Senate floor and slammed the president for "antagonizing" Republicans during a White House event "with that group of people that he was talking to who were laughing and cheering and applauding as we are on the brink of this, of this collapse."

The audience members, billed by the White House as "middle-class Americans," were drawn from Obama supporters who responded to the White House's #my2k hashtag campaign and tweeted what a $2,000 tax hike would mean to them. Being invited to the White House based on a tweet, it would seem, doesn't make for a dour audience.

Tweet Irony

1. Young Americans like Obama because he gives them student loans making them debt-slaves for life
2. Young Americans like Obama because of a promise for "free" health-care for everyone. Little do they realize, nothing is "free", and they are the ones overpaying.

The fact of the matter is youth overpay for health-care as the benefits primarily go to the elderly. Obama needed a pool of fresh suckers to overpay for health-care costs to keep the system solvent for a bit longer.

Since nothing was done to contain costs, Obama will be asking for more and more money in the future.

Baum asked "Don't they understand that the president has done nothing to protect future generations from a crushing debt burden? Nothing about deficit reduction other than to talk about it?"

Obviously not.

The crowd [of fools] was adoring.

Young Americans tweeted Obama and they got an invite to bow down to the person making them debt-slaves to union educators as well as debt-slaves to the ungrateful elderly.

By the time they are old enough to collect benefits, the system will be bankrupt, with no benefits to be had. In the meantime, Republicans Prepare to Wave White Flag Again, This Time On Debt Ceiling, proving that neither party is capable of a remotely honest discussion.

The sad irony in this mess is youth have gotten nothing out of Obama but a big screw job. And for that screw job, they offer adoring praise.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Republicans Prepare to Wave White Flag Again, This Time On Debt Ceiling; "Temporary, Partial, Non-Threats"

Having totally collapsed on deficit reductions in fiscal cliff non-negotiations (agreeing to a mere $12 billion in cuts down from an Obama offer of $600 billion), Republicans are already offering signs they will once again wave the white flag when it comes to the alleged battle over the debt ceiling.

Reuters reports Bigger fights loom after "fiscal cliff" deal.

President Barack Obama and congressional Republicans looked ahead on Wednesday toward the next round of even bigger budget fights after reaching a hard-fought "fiscal cliff" deal that narrowly averted potentially devastating tax hikes and spending cuts.

Retreat, Retreat, Then Surrender

Let's stop right there for a second. What "hard fight" was there?

It certainly took a lot of time to reach a deal, but there never was much of a fight. Every day Republicans offered more and more concessions until deficit reductions were whittled down to a mere $12 billion or so from a starting point of $600 billion.

Senate Republicans immediately waved the white flag of surrender as only 5 Republicans voted against the deal. Please see Obama Deal Adds $3.97 Trillion to Deficit Over 10 Years; Only 5 Republicans Voted Against; White-Flag Surrender for details.

This was a pathetic case of retreat, retreat, then surrender, with every retreat making the president more confident he would get his way.

Reuters continues ...

[The fiscal cliff agreement] set up political showdowns over the next two months on spending cuts and on raising the nation's limit on borrowing. Republicans, angry the deal did little to curb the federal deficit, promised to use the debt ceiling debate to win deep spending cuts next time.

"Our opportunity here is on the debt ceiling," Republican Senator Pat Toomey of Pennsylvania said on MSNBC, adding Republicans would have the political leverage against Obama in that debate. "We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean."

Opportunity to Surrender Again

There is no opportunity here. Read the paragraph carefully to see if you can spot the crucial words.

In case you missed it, the crucial word is "temporary". More specifically the crucial phrase is "willing to tolerate a temporary, partial government shutdown, which is what that could mean".

The word "temporary" is pathetic enough. But Toomey goes even further, adding the word "partial".

Temporary, Partial, Non-Threats

Who is supposed to fear a "partial, temporary" shutdown? Anyone?

Sadly, Republicans are already signaling they are prepared for more temporary threats coupled with more permanent can-kicking exercises.

The wimpy language bantered about by Republicans before debt ceiling debate even begins suggests the safe thing to do is prepare for more retreats and more white flags.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Zero Homicides?

Maybe we ought to take a lesson from these guys?

• While Chicagoans saw the city's homicides rise past 500 last year, residents of the state's second largest city, Aurora, quietly observed a milestone of their own — a year without a slaying.
  
  The slaying-free year was Aurora's first in recent times, police Sgt. Matt Thomas said.
  
  Aurora, a city of about 200,000 on the Fox River west of Chicago, notched 25 homicides in 2002, but totals have dropped recently, according to FBI statistics. There were five in 2009, four in 2010 and two in 2011, according to the FBI.

In the entire article, there isn't one single mention of "CompStat."

That has to be a clue.

2013 - Just Like 2012

Only bloodier:

• In the first homicide of 2013, a 20-year-old man was killed in West Town, police and the Cook County medical examiner’s office said.
  
  Octavius Dontrell Lamb, 20, was shot in the throat in the 700 block of North Noble around 3:45 a.m. Tuesday. Lamb was pronounced dead at Northwestern Memorial Hospital at 4:16 a.m., according to the medical examiner’s office.
  
  
• Besides Lamb, Kevin Jemison, 29, was shot in the head about 2:45 p.m. Tuesday afternoon, in the 4500 block of South Champlain Avenue in the Grand Boulevard neighborhood, authorities said. Jemison, of the 4700 block of South Michigan Avenue, was taken to University of Chicago Medical Center where he died less than an hour later.
  
  Just before 5 p.m., Devonta Grisson, 19, was shot in the chest during an apparent drive-by in the Southwest Side Gage Park neighborhood, in the 5800 block of South Sacramento Avenue, police said. Grisson, of the 6700 block of South Artesian Avenue, was dead at the scene, according to the medical examiner’s office.

Three dead and 15 others wounded and the year isn't even 24 hours old yet. Taking this to the logical CompStat conclusion, Chicago should experience 1095 homicides and 5475 wounded. Way to Garry!

Shades of Phil Cline

Look!  Up in the Sky!

It's a bird!  It's a plane! It's Super-Superintendent!

• It’s always busy for Chicago Police on New Year’s Eve but when Austin District Patrol Officer William Riga learned he’d be elbow to elbow with the superintendent himself, another factor was in the mix.
  
  “Initially I felt a little bit more pressure but when we got into the car with him he put it to rest,’’ said Riga, 31
  
  “He said, ‘Let’s go out and do the job,’’’ Riga said, quoting police Supt. Garry McCarthy.

Of course, the story goes on to tell of a traffic stop, suspicious activity and a gun arrest.

It reminds us of the time that Phil Cline on-viewed shots fired, gave chase around some alleys, through an abandoned building, over three or four fences before finally kicking in a door and arresting a felon with a gun on New Years Eve a number of years back.  Or something like that.  The finer details escape us.

While it's all well and good to see a boss, let alone The boss, riding around making the troops edgy, we'd probably appreciate it more if we weren't reading about it in the papers and heard it over small talk somewhere else.  The Department confiscates how many illegal guns a year?  But we hear about this one?  This kind of smells of self-promoting. 

Discrepancy

Anyone from the Department or D-Unit care to explain?

• In 2012, 532 people were murdered in the city of Chicago, according to statistics compiled by the Crime in Chicago website. The number of people murdered the year before was 441, meaning in the city of Chicago, murders have increased by 91 from 2011 to 2012.
  
  The Chicago Police Department was not available to confirm these numbers today, which is New Year's Day.
  
  The website also claims that, through December 25, 2012, there 2,670 people were shot in Chicago last year. That's also an increase from the year before, when 2,217 people were shot in Chicago that year.

That 532 seems higher than the "official" number, meaning someone is counting homicides that the CPD doesn't.  Are the missing numbers all death investigations?

The "Crime in Chicago" website can be located here by the way.

Hypocrisy 101

If you've been following the gun "debate," you may have heard of a paper called the Journal News that obtained the gun registration list and published an interactive map showing the location of all houses that may have weapons inside.  The "journalists" claim it's a public service to let everyone know where the so-called "dangerous firearms" are.

Citizen outrage at this is palpable as many pointed out this is a road map to criminal seeking locations where they might actually steal guns. The clearer thinking folks realize that this map to where the gun aren't is actually making is safer for the criminals to break into homes that don't have the means of defense.

In an ironic twist though, the editors and reporters at the Journal News have been the subject of massive letter writing campaign, paper and e-mail. One website published the names, addresses and Google street-views of reporters' homes on their website in an ironic twist. This led the editors to file complaints with police over the contents of certain e-mails that made them "uncomfortable." The police investigated and found their claims to have no merit, so what did the Journal News do?

• Guns are good for the goose but NOT for the gander.
  
  A Clarkstown police report issued on December 28, 2012, confirmed that The Journal News has hired armed security guards from New City-based RGA Investigations and that they are manning the newspaper’s Rockland County headquarters at 1 Crosfield Ave., West Nyack, through at least tomorrow, Wednesday, January 2, 2013.
  
  According to police reports on public record, Journal News Rockland Editor Caryn A. McBride was alarmed by the volume of “negative correspondence,” namely an avalanche of phone calls and emails to the Journal News office, following the newspaper’s publishing of a map of all pistol permit holders in Rockland and Westchester.
  
  Due to apparent safety concerns, the newspaper then decided to hire RGA Investigations to provide armed personnel to man the location.

So men and women with guns will keep you safe from unsubstantiated threats? Hmmmm.

Mutual Guarantee Society: Spain Proposes State Guarantee of Bank Loans to Small and Medium Businesses

Lending in Spain has all but dried up. Banks don't want to (or cannot) lend because they are capital impaired and there are too few creditworthy risks.

In such an environment, lending is not wise. It will lead to more losses. But that is not how government bureaucrats think. Prime minister, Mariano Rajoy is preparing measures to 'desbancarizar' save the economy and SMEs

He acknowledged President Mariano Rajoy in balance the first year of government: the main problem of the economy to start recovery is the lack of financing for SMEs [Small and Medium Enterprises]. With that goal-getting liquidity regrease economic system, the government last a number of measures to facilitate the financing of small and medium enterprises. Or what is the same, it is 'desbancarizar' the Spanish economy far too dependent on credit institutions in granting loans or other financing of productive activity.

The Government is considering the creation of new instruments for SMEs operate with the State guarantee, which is considered key to boost economic activity. At the same time, they want to boost mutual guarantee societies, an instrument in the hands of the regions that did not just start with all its potential. In parallel, the Ministry of Economy is betting big on the credits of the ICO for SMEs, about 22,000 million euros in 2013 for self-employed and SMEs.

The result of this 'banking' of the Spanish economy is lethal. There are no corporate funding mechanisms that provide a continuous flow of resources, which is an additional difficulty facing Spanish companies in a recessionary environment. With the addition of that full financial restructuring-dunk entities to restore its solvency levels, can not allocate funds to finance productive activity. To this we must add that the public sector is eaten much of the credit to finance their high fiscal deficits, the so-called crowding out effect, which involves the removal of private economic agents in funding.

Spain Beyond Repair

"Spain hopes to boost small business access to finance outside of the banking world by encouraging the market to accept paper of smaller businesses, by guaranteeing debt, and via the official credit office", writes reader Bran who lives in span and forwarded the above link.

Regardless of the precise translation of "desbancarizar", I am certain it will fail. Quite literally Spain is beyond repair, at least within the eurozone.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com 

Obama Deal Adds $3.97 Trillion to Deficit Over 10 Years; Only 5 Republicans Voted Against; White-Flag Surrender

For all the pissing and moaning over the fiscal cliff, there was never much of a "cliff" in the first place. Worse yet, every delay made matters increasing irresponsible in terms of addressing the deficit.

The final result, as passed by the Senate, watered down budget cuts from $600 billion to a mere $12 billion.

Moreover, the extension of the tax cuts will add almost $4 trillion to the deficit over 10 years according to CBO analysis of the American Taxpayer Relief Act.

Nonetheless, that was not enough for liberal democrats who thought they did not get enough out of the deal.

The "Fiscal cliff" moves to House, where a slim hope remains that Republicans will punt this bill a mile high.

In a rare late-night show of unity, the Senate voted 89 to 8 to raise some taxes on the wealthy while keeping income taxes low on more moderate earners.

Republicans, unhappy that the bill contained over $600 billion in tax increases but only around $12 billion in spending cuts, said they may change it more to their liking and send it back to the Senate. Party leaders planned to take the temperature of rank-and-file lawmakers over the afternoon before deciding on a course of action.

"My recommendation would be not to take a package put together by a bunch of sleep-deprived octogenarians on New Year's Eve," said Representative Steve LaTourette, a moderate Republican from Ohio who is a close ally of House Speaker John Boehner.

"My district cannot afford to wait a few days and have the stock market go down 300 points tomorrow if we don't get together and do something," Representative Steve Cohen, a Democrat from Tennessee, said on the House floor.

The White House has floated $600 billion worth of spending cuts in earlier negotiations, and Obama said he would be willing to tackle deficit reduction over the coming months.

"There's more work to do to reduce our deficits, and I'm willing to do it," he said in a statement urging the House to pass the current bill.

Republican Representative Tom Cole said his House colleagues should pass the Senate bill rather than try to change it.

"We ought to take this deal right now, and we'll live to fight another day," Cole said on MSNBC.

Only 5 Republicans Voted Against

The Tax Foundation has additional Details of the Fiscal Cliff Tax Deal

At 2AM this morning, the Senate passed H.R. 8, the American Taxpayer Relief Act of 2012, by a vote of 89-8. Voting no were Bennet (D-CO), Carper (D-DE), Grassley (R-IA), Harkin (D-IA), Lee (R-UT), Paul (R-KY), Rubio (R-FL), Shelby (R-AL). Not voting were DeMint (R-SC), Kirk (R-IL), and Lautenberg (D-NJ). TaxProfBlog has the text of Senate-passed bill  (157 pages). The Joint Committee on Taxation (JCT) has also produced a revenue estimate, as has the Congressional Budget Office (CBO).

White-Flag Surrender

Somehow, right before the election, budget cuts of 10-1 over tax hikes were not acceptable to Republicans. Now, they have settled for a package that essentially makes no budget cuts at all.

This is one of the biggest white-flag political surrenders in history.

Obama Tax Cut" To Add $4 Trillion To Deficit Over Next Decade

President Obama made the biggest understatement ever regarding the budget deficit: "There's more work to do to reduce our deficits".

More work? Pardon me for asking, when was "any" work done to reduce the deficit? Ill-fated attempts to reduce the budget deficit have only gone in reverse.

Finally, it's important to note that the bill that passed the Senate is technically a tax cut. ZeroHedge accurately sums up the situation as follows "Obama Tax Cut" To Add $4 Trillion To Deficit Over Next Decade

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com