November 19, 2013
- Bernanke lays hands on Bitcoin, Bitcoin jumps 54% in a day… What?!
- Your last hope for protection from NSA spying
- The bureaucrat who slammed his “white suburban mom” critics
- Obamacare impact spills over into Medicare
- Another try at Dow 16,000: Guenthner and Ritholtz on the “bubble” talk
- Unemployment numbers move from fudge to fraud… affordable housing in New York… one of our editors accused of treason… and more!
So much for the “cool” factor of Bitcoin. It now has an implicit government blessing.
We begin a chronicle of federal folly this morning with a Senate hearing about the cryptocurrency. In written testimony submitted yesterday, Federal Reserve chairman Ben Bernanke averred Bitcoin “may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”
With that, it spiked from $550 to nearly $850 in a day. This morning, it’s settled back to $718.
Never mind that the hearing was held by the Homeland Security Committee, which was zeroing in on how Bitcoin was aiding and abetting drugs, terrorism and money laundering. “Law enforcement officials and others testified about the dangers of the currency at the hearing,” reports The Guardian, “but did not announce any new initiatives and stopped short of calling for new laws.”
Whew…
The government fudged the unemployment numbers — more than usual.
We’ve long chronicled the problems with the jobs figures — how you magically don’t count if you’ve given up looking for work, and so on — but here we’re talking blatant manipulation for political purposes, according to the New York Post’s John Crudele.
The Census Bureau conducts the household survey each month on behalf of the Bureau of Labor Statistics; it aims to reach nine out of 10 households targeted and report back on their job status. In the run-up to the election last year, the Philadelphia region was coming up short, so it opted for fake interviews.
“It was a phone conversation — I forget the exact words — but it was, ‘Go ahead and fabricate it’ to make it what it was,” recalled Census employee Julius Buckmon.
Voila… The unemployment rate fell from 8.1% in August last year to 7.8% in September.
Don’t count on the Supreme Court to protect you from NSA spying. The court refused a petition yesterday from the Electronic Privacy Information Center asking for the court to review the NSA’s call-tracking program.
The order came with no comment, and no indication of dissent. “The justices’ action,” according to Politico, “makes it unlikely the high court will provide a definitive answer on the question during its current term.”
The action is also consistent with the position of the White House — which claims no court has jurisdiction to rule on NSA surveillance. God help us: The only possible remedy from within the government lies with… Congress.
Did you know yesterday was “National Don’t Send Your Child to School Day”? Here, too, the heavy hand of leviathan looms.
We have no idea how many people took part, but a Facebook event listed more than 6,000 participants hoping to start a “revolution in opposition of the Common Core Standards.”
The feds swear up and down that Common Core is not an attempt to impose a one-size-fits-all curriculum on the entire nation. But 45 of the 50 states are nonetheless implementing a uniform regimen centered on lots and lots of standardized testing.
Common Core has performed the remarkable task of uniting tea partiers and big-city teachers unions in common cause.
Nor are they alone, says Politico: “Catholic scholars say the standards aren’t rigorous enough. Early childhood experts say they demand too much. Liberals complain the Common Core opens the door to excessive testing. Conservatives complain it opens the door to federal influence in local schools. Teachers don’t like the new textbooks. Parents don’t like the new homework.” Indeed, many parents are downright baffled by some of the assignments.
For them, Education Secretary Arne Duncan has nothing but contempt: “It’s fascinating to me,” he said last week, “that some of the pushback is coming from, sort of, white suburban moms who — all of a sudden — their child isn’t as brilliant as they thought they were and their [schools aren’t] quite as good as they thought they were, and that’s pretty scary.”
An update on the feds’ war against small farmers: The FDA has extended its deadline for submitting comments on its “food safety” regulations. It’s now this coming Friday.
As we mentioned two weeks ago, the 2010 Food Safety Modernization Act has an exemption for operations with annual sales of less than $500,000.
But “even these very, very small farms are not fully exempt,” writes Brad Jordan at Activist Post. “The FDA admits that farmers with revenues under $500,000 will spend 4-6% of their revenue complying with a smaller set of regulations. Since their average total net income is only about 10% of their revenues, small farmers will likely spend over half of their profits on regulatory compliance costs.”
And if their customers like organic, too bad: The National Sustainable Agriculture Coalition says the rules make it “nearly impossible to use natural fertilizers like manure and compost. Farmers will be pushed to use chemicals instead of natural fertilizers.”
Whoops, the government got its hands on Medicare.
We couldn’t resist that jape this morning, recalling one of the most precious moments during the original debate over Obamacare — a constituent telling Rep. Bob Inglis (R-SC) to “keep your government hands off my Medicare.”
Now comes word that even people covered by Medicare are not to be spared: UnitedHealth has been cutting thousands of doctors from many of its Medicare Advantage plans, according to The Wall Street Journal.
“Other carriers will likely follow UnitedHealth’s lead,” suggests Washington Times blogger Terry Ponick “The ripple effect will inevitably lead to health care rationing under Medicare, as more and more patients will need to queue up for appointments with fewer and fewer doctors and even fewer specialists. Welcome to the beginning of socialist health care rationing, European style.”
[Ed. Note: We bring you this laundry list of failure today not to drag you down… but rather in hopes of demonstrating that you don’t have to be helpless. You can take practical, concrete and legal steps to shield yourself from the NSA, to lessen the blow of Obamacare on your family and to shrink your tax bill as much as possible. Hey, it’s those tax dollars that enable the feds to do all they do, right?
The Laissez Faire Club has just published a 166-page book — a manual, if you will, of “practical liberty” that begins at home. It’s packed with the proverbial 101 ways to reclaim the freedom you’ve lost bit by bit. Learn how to secure your free copy at this link.]
So maybe today will be the day we get Dow 16,000 and S&P 1,800. Both indexes rose above those round numbers intraday yesterday, but couldn’t hold on by the close. As we write, the S&P has some work to do at 1,792.
Gold slumped midday yesterday and hasn’t recovered; at last check, the bid is $1,274.
“Is the recent action in stocks really a bubble?” asks Greg Guenthner, rhetorically. “Does one exceptional year for equities somehow cancel out the hundreds of billions ripped from stock funds since investors began fleeing more than five years ago?
“Unfortunately,” he writes in today’s Rude Awakening, “many investors missed this rally. The bubble talk resonates with this audience. ‘We’re in a bubble’ has become code for ‘I need to justify not participating in this market’ or ‘See? I missed out on the rally because I was practical, not wrong.'”
“We have had so many bubbles,” chimes in uber-blogger and money manager Barry Ritholtz, now holding court at Bloomberg View, “we are having a ‘bubble in bubbles.’
“We have a tech IPO bubble, and a stock bubble and, of course, a bond bubble. This is caused by a global central bank QE bubble. We had an Apple bubble, we had a fraud bubble, we had a derivatives bubble and a subprime bubble. Silicon Valley is having a startup bubble, and parts of south Florida and Manhattan are having mini real estate bubbles.”
Not to mention the cover of Barron’s last weekend…
But think back within the last 15 years. Did you see magazine covers warning about the dot-com bubble or the housing/credit bubble? No, you saw this…
“I am hard-pressed to recall,” writes Mr. Ritholtz, “when any sort of bubble was accurately identified in real-time on the cover of a major media publication. If anything, the opposite is true.”
Heh, it gives our little firm a critical niche to fill. Doesn’t hurt that we called both major bubbles of the last 15 years, either…
How expensive is real estate in New York? So expensive a used RV is a viable option.
“I’ve got everything,” says construction worker Steven Cintron. “I’m comfortable here.”
“Here” is a 1996 Gulf Stream Ultra posted on Craigslist for $5,000, parked near the upscale Park Slope neighborhood in Brooklyn. It’s all he could afford after breaking up with his girlfriend and trying to find a place that would take his pit bull.
“By turning to mobile apartments,” reports the Los Angeles Times, “RV dwellers are something of real estate pioneers in New York. RVs give New Yorkers a way into hip or exclusive neighborhoods they otherwise might not be able to afford. They don’t have to worry about nagging landlords, rent hikes or upstairs neighbors tap-dancing at midnight.”
On the other hand, “the ladies aren’t really kicking down the door,” says Rick Hall, an RV-dwelling student at St. John’s.
“The city’s Law Department,” the paper reports, “offered little clarity over whether RV life was legal in New York. A department spokeswoman said the agency knew of no city laws specifically addressing living in an RV or any prohibition against living in a parked vehicle.”
Yeah, give it time…
“This guy,” writes a reader referring to our Byron King, “is no better than the Snowden guy. He wants to sell reports about the USA!”
Hmmm…. Near as we can tell, the reader is referring to Byron’s expose of the Pentagon’s “black budget.”
For the record, the existence of that budget has been widely reported in the media. What’s more, Byron’s takeaway of the investment implications is based on his thorough review of declassified government documents.
That said, he’s also reached his conclusions based on an extensive network of contacts within government and private industry. He spent many years building up those sources, and for understandable reasons, he doesn’t want to burn them. That’s why we ask you to sign a disclosure form before you review his research.
Cheers,
Dave Gonigam
The 5 Min. Forecast
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