We passed a dark milestone: more money came out of 401(k)s than went in

Summary: Lost in yesterday’s festival about the latest meeting of America’s central planners (wielding tools that Kings of the pre-modern world would envy) was a small article in the Wall Street Journal announcing that we have passed a small milestone on the road to a harsh future.  {1st of 2 posts today.}


America passes an important inflection point

The boomers pass through America like a sheep through a snake. In our wild and crazy younger days we dragged the nation into miniskirts and riots. In our old age into censors on our language and behavior.

Our effect on prices has been equally large. What we buy goes up in price. What we sell goes down. Our long journey into adulthood has put wind into the sails of home and stock prices. Our retirement will turn us into sellers of these assets, with the smaller and poorer generations following unlikely to replace our buying.

The Wall Street Journal reported that we have hit the next milestone on this path, as the decades long tsunami into 401(k) plans turns into a slow ebb tide when people retire, rolling over their 401(k) accounts to IRAs. Although this has little impact on markets, it is another step to the day money begins to flow out of retirement plans. We don’t have long to wait. The bottom 80% of Boomer’s have only small sums saved; many have only small pensions (or none) — and will begin withdrawals immediately after retirement is forced upon them either from disability (white collar cowboys have no idea how quickly bodies wear out from a lifetime of physical work) or inability to find a job.

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Dueling remarks about the Pope & the climate from Rush & Jeb! We can learn from both.

Summary: Two voices on the Right illustrate vital aspects of our largely dysfunctional political system, bad news and good news about the climate wars (and the Pope). We can learn from the former and gain inspiration from the latter.  {2nd of 2 posts today.}

“It is extremely likely (95 – 100% certain) that human activities caused more than half of the observed increase in global mean surface temperature from 1951 to 2010.”

— From the IPCC’s AR5 Working Group I report.

Unicorn politics

We can do it.

Author Marc A. Cirigliano (see his books) tweeted today about two interesting articles by conservatives. Rush shows us why climate change has become yet another example of dysfunctional US public policy, locked in a futile debate — and religion so often just a prop used by both sides. I am no fan of Jeb Bush, but yesterday he said some sensible things about climate change and the Pope. If we put aside our ideological blinders, both Left and Right can learn from these two men.

Rush shows us the problem

Transcript of the Rush Limbaugh show: “The Pope’s Leaked Marxist Climate Rant“, 16 June.

“Meanwhile, we’re in a ten-year cooling period! There hasn’t been any warming. The whole thing is a hoax, and we’ve got this leak of a papal encyclica on the “fact” that global warming is man-made. It’s man-caused and we have almost a religious commandment here to deal with it. I mean, it’s just right out of the Democrat Party.”

Years ago I asked Michael Cohen if there were people on the stage of America who didn’t believe in global warming. Rush proves Cohen correct and me wrong about this (again). But if we listen closely, he makes some valid points.

First, he makes the obvious point about the hypocrisy of the Left suddenly believing the Pope is a guide to the good and the true. Are they going to follow his teachings on homosexuality, the role of women, the use of birth control and abortion? Probably not.

Second, later in the program Rush points to actual science — and demonstrates how it is often lost in the political conflict that’s rendered US public policy so dysfunctional (except in matters of direct interest to the 1% or the Deep State).

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When you look back on this day & remember the bubble…

Summary: We’re in a time of great events. Like all such, it consists of breaks with the past combined with periods of deceptive calm. This is a transition between the post-WWII era and the as yet unknowable new regime that lies ahead. The stock market provides a mirror in which we can see these great events play out.   {1st of 2 posts today.}

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  1. When you look back on this moment…
  2. These things are matters of perspective.
  3. Is this an investment bubble?
  4. What’s different this time?
  5. What’s next?
  6. This series about our bubble economy.
  7. For More Information.

(1)  When you look back on this moment in history

Wise words by John P. Hussman (manager of the Hussman Funds, former professor of economics at U MI):  “When You Look Back On This Moment In History“. The full essay is well worth reading.

There are moments in time when durable history is made; history that others observe much later, shaking their heads, at a loss to understand how the events that followed could not have been obvious at the time. When you look back on this moment in history, remember these things.

When you look back on this moment in history, remember that spectacular extremes in reliable valuation measures already told you how the story would end. Among the measures best correlated with actual subsequent S&P 500 total returns, capitalization-weighted market indices such as the S&P 500 were more richly valued in only 54 weeks of history, 21 of which represented the final advance to the 2000 market peak, with the remaining 33 representing the retreat from that high to present valuation levels, on the way to a 50% loss in the S&P 500 Index and an 83% loss in the Nasdaq 100 Index.

… When you look back on this moment in history, remember that the valuation of the median stock was never higher. Ever. Even at the 2000 peak.

… When you look back on this moment in history, remember that S&P 500 returns had never materially exceeded zero over the decade following similar valuations.

…When you look back on this moment in history, remember that rich valuations had not only been associated with low subsequent market returns, but also with magnified risk of deep interim price losses over shorter horizons.

… When you look back on this moment in history, remember that dismal return/risk prospects were grounded in objective historical evidence, not simply opinion.

… When you look back on this moment in history, remember that the strongest historical prerequisites for a market crash were already in place.

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Are we at war with ISIS? Does it make a difference what you call it?

Summary:  Today Chet Richards (Colonel, USAF, retired) looks at our conflict with the Islamic State. What kind of conflict is this? What is the nature of our foe? Victory becomes a matter of luck without answers to these questions.  {2nd of 2 posts today}.

What's in a name?

Does it make any difference what you call it? Yes, because what you call it affects how you think about it. Here’s just one example, from John Basil Utley’ “12 Reasons America Doesn’t Win Its Wars” in The American Conservative: “During wartime who dares question almost any Pentagon cost ‘to defend America’?”

Sun Tzu suggested, in the opening lines of The Art of War, that “War is a matter of vital importance to the state, the province of life or death; the road to survival or ruin.” (Griffith trans., p. 63.)

It follows, then, that if what you’re looking at isn’t a matter of survival of the state, it isn’t war. Can you, with a straight face, claim that the United States is engaged with an existential enemy outside of its own borders? 

So if it isn’t war, how should we deal with it? Well, let’s look at what one of our opponents is doing (one can have “opponents” in many fields other than war). The title of this article from today’s New York Times pretty much tells the story: “Offering Services, ISIS Ensconces Itself in Seized Territories.”

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The Barons of England warn us not to throw away what they gained in Magna Carta

Summary: 800 years ago on a field at Runnymede the Barons of England took a large step for humanity. The consequences of their actions still echo today. Now we’re losing what they won for us. On this anniversary recognition of that sad fact can alarm and inspire us.  {1st of 2 posts today.}

“Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.”
— Written by Benjamin Franklin for the Pennsylvania Assembly in its “Reply to the Governor” (11 November 1755).

King John signing Magna Carta

If only we were so bold and strong.

Our elites greet the 800th anniversary of Magna Carta (the Great Charter) with “no big deal; move along.” A New York Times op-ed by Tom Ginsburg tells us to “Stop Revering Magna Carta“,, He’s a professor of international law & political science at U Chicago. Law professors are often among the leaders of the movement against our liberty.

The Wall Street Journal of course bats for the anti-liberty teams, with the news headline “Magna Carta Celebrations Reignite Legacy Debate: some question the importance of the document“. Its editors live for the day they can run that headline for the Bill of Rights.

The Economist misleadingly says “The great majority of its provisions have been repealed: of the original charter’s 63 chapters only three — one confirming the freedom of the church, one confirming the liberties of the City of London and the crucial chapter 39 — remain on Britain’s statute book” (except that many of the other provisions remain codified in laws expanding and deepening MC’s provisions).

These blasé sophisticates misunderstand the significance of Magna Carta. It matters little that many of its provisions are meaningless or repugnant to us, that King John repudiated it, or that it was often forgotten for generations (then rediscovered).  Runnymede on 15 June 1215 was a milestone on the long road paved with “blood, sweat, and tears”. The meeting at Philadelphia in 1787 laid another milestone, one now being lost.

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Obama rolls the dice in Iraq, as we hope for victory thru folly

Summary: The most fascinating aspect of our new round of wars in the Middle East is their endorsement by people who were wrong about the first round, and condemnation by those who were correct. Here’s a keen analysis by Michael Brenner about the folly of our new adventure in Iraq. Our strategy is little but a FAILure to learn. It will not end well for us. But we cannot say that we were not warned.  {2nd of 2 posts today.}

Obama dice

Obama rolls the dice in Iraq

By Michael Brenner
Reposted with his generous permission.


Admittedly, it is difficult to visualize Barack Obama shooting craps in his impeccable $1,000 custom tailored suit. His debonair figure is better suited to an ultra chic Bavarian resort with hints of Casino Royale – although Angelo Merkel is an improbable femme fatale. Moreover, gambling is alien to an instinctively cautious man who naturally defers to established wisdom and established personages. Obama studiously avoids decisive action that leaves him vulnerable and whose unpredictable results are not susceptible to finesse. That explains the “kind of” in the title of this commentary.

Our newest war

Obama’s decision to launch a major new training cum advising project in Iraq to be augmented by up to 1,000 more American troops is revealing of how his administration’s thinking about Iraq/ISIL/Syria is oriented. Clearly, there remains no coherent strategy; clearly, the incongruities and contradictions among of the various bits and pieces of policy also remain unresolved. There are a few valuable insights to be garnered from this latest move, nonetheless.

Washington still is wedded to the idea that it can push back ISIL in Iraq without the cooperation of the Shi’ite militias. They receive no mention in the new-old plan. All the stress is placed on expanded recruiting and training for the Iraqi National Army and the arming of those Sunni tribal militias ready to fight ISIL. There are hints that Washington is considering by-passing the Iraqi government to arm the tribes directly although it publicly pledges not to. In addition, it intends to build a new base for operations in Anbar province despite the current low utilization rate for existing bases. Due emphasis is placed on airpower but no explanation is given for the minimal use of airstrikes to date.

By implication, Obama et al see the objective of containing Iranian influence in Iraq as on a par with the aim of stymying ISIL. This interlocks with its fostering of the Saudi-Israeli conception of the Middle East’s big strategic picture and corresponds with blanket support for the bombing of the Houthis in Yemen. In other words, the increase in influence of any Shi’ite group anywhere in the region is to be resisted. Whether Washington shares this view wholly, or is caught in the mind warp of giving precedence to placating Riyadh and Jerusalem on expedient grounds (themselves not clear), makes little practical difference since either interpretation leads to the same policy outcomes.

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What happened to NASA’s missing weather satellites & their vital data about global warming?

Summary: The world has a new and serious mystery, right up there with “Where in the World Is Carmen Sandiego?” and “The President’s plane is missing!” What happened to NASA’s satellites that measure global temperatures? They appear to have disappeared from the nation’s major newspapers, their valuable information about global warming lost from view. Today’s post retrieves it to help you understand one of the top public policy issues of our time.  {1st of 2 posts today.}



  1. Where are NASA’s satellites?
  2. How warm was May?
  3. Watch the trend in temperatures!
  4. Climate models predict too much heat.
  5. Who measures the world’s temperature?
  6. For More Information.
  7. Another view of the satellites.
  8. Giving the IPCC the last word.

(1)  Where are NASA’s satellites?

NASA has launched a fleet of satellites which (among other things) since 1979 have measured Earth’s temperature in the lower troposphere, with better coverage and consistency than the surface temperature networks — with their spotty coverage of the world’s seas and scores of national weather bureaus (many poorly funded) that the collect land temperatures. Being careful and thorough, NASA pays two teams to analyze the data:  Remote Sensing Systems (RSS) and the University of Alabama in Huntsville (UAH).

Here are the satellites whose sensors — at vast cost — have driven the RSS dataset since 1979, among the most valuable results from the space program (see the end of the post for a more detailed chart).

Oddly, the results of the satellites’ temperature measurements have almost disappeared from much of the news. As a crude measure, there are 2,970 Google News stories in the past year mentioning “hottest year”, but only 637 (21%) include the word “satellite” — and few of those are in the mainstream news. For example, per Google News only 1 of the many “hottest year” stories in the New York Times include both terms, 2 of the 49 science articles in the Washington Post (here and here), and 6 of the 17 in the Wall Street Journal.

The eclipse of this data is mysterious since it would provides a contrary perspective to the “hottest year” stories, since neither RSS nor UAH shows 2014 as a record (details here). But whatever the reason, we need not rely on journalists to tell us the expensive findings of this NASA research.

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