NBC Reporter Arrested for Drunk Driving after ‘attending football party at Sandusky’s lawyer’s house’

Gray and the other reporters were likely trying to win favors to get them the air time, TMZ says [Win favors, or give favors?]

Jay Gray, the NBC News reporter covering the Jerry Sandusky sex abuse scandal in State College, Pennsylvania, was arrested on drunk driving charges after he attended a drunken football-watching party at Sandusky’s lawyer’s house, reports say.

The Pennsylvania State Police arrested Gray just before 2am December 12 during a traffic stop.

He was allegedly at the home of Joe Amendola, the eccentric lawyer defending Sandusky against allegations he molested 10 boys over the course of several years.

The Frontier Lab’s Breakthrough Study Proves Occupy Wall Street Short-Selling America

CHICAGO – The Frontier Lab released today the results of a 3-month-long study of Occupy Wall Street (OWS) protesters in New York City and Chicago. “Short-Selling America,” the Means-Ends Value Chain report of the OWS participants’ deep motivating values provides richer intelligence for social scientists, commentators, and civic leaders who seek a deeper understanding of this emerging segment of political activists.

“After reading, watching, and listening to so many thought leaders expound on the mission, motives, and manners of this group, we saw an opportunity for science to make sense of a movement catching everyone’s attention,” said Anne Sorock, partner and research director of The Frontier Lab. “The study reveals two segments, “Communitarians” and “Professionals,” with distinct value sets, and categorically refutes the notion that Occupy protesters share the deep values of Americans who seek financial security and are fed up with crony capitalism.”

Key insights from the report:

• The Communitarians’ deep values set includes Community, Purpose, and Security
• The Professionals’ deep values set includes Prestige, Validation, and Control
• The promise and responsibility of ‘The American Dream’ do not overlap with either deep values set
• The most viable segment for conversion to other political movements are the Communitarians, because a sense of Community, Purpose, and Security can be more easily replicated

“While their signs and rhetoric might decry crony capitalism and bank bailouts, their values reveal self-centered and fear-based motivations. When understood at the deep values level, the similarities drawn between everyday Americans’ desire for fiscal responsibility and Occupy’s signage appear superficial and hollow. Anyone who would market American freedom to this disinterested and differently motivated audience fails to realize that Occupy wins when America loses. They are going short on America,” concluded Sorock.

The Short-Selling America report demonstrates that the OWS protesters’ values form a new way of understanding the movement beyond the traditional Left-Right dimension. The Frontier Lab is using this understanding to map the Occupy segments and other segments across the political landscape to reveal the frontier lines in the battle for America.

The Frontier Lab is a non-partisan 501 (c) 3 not-for-profit organization that conducts marketing research and provides strategic marketing counsel to leaders and organizations promoting freedom. Inspired by Frederick Jackson Turner’s “Frontier Thesis” of 1893, the lab’s mission is to define a new and sustainable American frontier based on the values majorities of Americans share. The Frontier Lab team’s pioneering approach applies Means Ends Value Chain market research used by the most cutting-edge private sector organizations to the civic space in order to advance republican democracy. To read the complete “Short-Selling America” report and to learn more about The Frontier Lab, please visit www.thefrontierlab.org.

Direct Link to the Report.

Analyst: ‘This might be the most government-supported car since the Trabant’

Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

Hohman looked at total state and federal assistance offered for the development and production of the Chevy Volt, General Motors’ plug-in hybrid electric vehicle. Hohman included in his analysis 18 government deals that included loans, rebates, grants and tax credits. The amount of government assistance does not include the fact that General Motors is currently 26 percent owned by the federal government.

Read the rest here.

Read an excerpt from his recent Dow Theory letter here.

That sound you just heard was Paul Krugman’s head exploding.

PolitiFact’s Lie of the Year 2011

I say this is not the first time BLS has leaked employment info. I’m sure there are hedge funds out there who have the ability to pay well for such important information.

Perdue Media Team Used Confidential Data To Spin Jobs Reports

Federal officials question legality of getting employment info before official release

RALEIGH — Since as early as January 2011, and perhaps before then, Gov. Bev Perdue’s press office has received access to confidential employment data from the U.S. Bureau of Labor Statistics hours if not days before its scheduled release, quite likely in violation of federal law. The governor’s staff used its early access to massage the monthly employment press release that reported jobs data to the public.

Documents and correspondence obtained by Carolina Journal show that the Division of Employment Security, formerly known as the Employment Security Commission, sent a draft of the press release each month to Perdue’s press office. The governor’s spokesmen typically rewrote the text and added a positive spin, even if the data did not support Perdue’s talking points.

The glowing quotes were attributed to Lynn Holmes, director of the employment agency, but the documents show the quotes were approved and probably written by a Perdue press aide, either Chrissy Pearson or Mark Johnson.

In several instances, DES spokesman Larry Parker cautioned Pearson or Johnson against using extraneous or unverifiable information in a release to boost Perdue’s image. At times, the Perdue communications team would push back, and the release would undergo several revisions before final publication.

While the operation may sound like a harmless effort to add political spin to the release of jobs data, sharing confidential BLS estimates while they are protected by an embargo violates a federal law barring the early release of employment data. This is no small matter: A conviction for breaching the Confidential Information Protection and Statistical Efficiency Act of 2002 carries a fine of up to $250,000, up to five years in prison, or both.

The data, including monthly estimates for current job totals, the labor force, and the unemployment rate, are produced by BLS with some minor assistance from the Labor Market Information Division of DES.

Former Gov. Mike Easley’s administration received an early briefing on the employment reports from ESC staff for several months in 2003 and 2004, if not longer, but those briefings apparently stopped after CJ learned of and reported on them in 2004.

Perdue and her staff may not receive formal briefings, but Parker told CJ in September that he shares the jobs report with Perdue’s staff roughly 24 hours before the announced time for the monthly release. Emails obtained by CJ involving Parker, Pearson, Johnson, and in one instance Department of Commerce spokesman Tim Crowley, show officials discussing the data more than 48 hours before the embargo was lifted.

“BLS does not support the release of employment and unemployment data before the established dates and times,” said Janet Rankin, BLS regional commissioner for the southeast office in Atlanta in an email. She notes that states are required to publish the dates they will release employment data on Dec. 31 of the previous year and follow that schedule.

She added that state agencies enter a cooperative agreement with BLS to gain access to its confidential data, and that the agreements “state that estimates cannot be shared outside of the LMI unit until they are final and ready for publication. The data are embargoed until the state predetermined release date and time” (her emphasis).

When CJ reported on the briefings Easley received in 2004, Rankin said at the time: “A person associated with developing the data that is caught releasing it or commenting on it prematurely is subject to fines and jail time.”

CJ initially suspected Perdue was receiving employment information that was under embargo in August, when she discussed information in the jobs report at a meeting of the Rotary Club of Asheville the day before the data were released to the public.

The statewide employment report typically is released the third Friday of each month at 10 a.m. The December statewide employment report will be released Tuesday at 10 a.m. (To download a PDF of the release schedule, click here.)

A review of several 2011 email exchanges reveals how the monthly process, in which Perdue aides insisted on overseeing the releases, worked.

February release

Parker and Johnson had reviewed a draft of the February report no later than Thursday, March 24. The public release had been set for 10 a.m. the following day. In an email sent to Parker at 5:36 p.m. Thursday, Johnson wrote:

Also, please start using the message points that Chrissy included in her email to all the [public information officers]. The Governor’s message on jobs should be reflected. For example, Lynn’s quote could say something to the effect of: ‘As Gov. Perdue continues to fulfill her No. 1 priority of bringing new jobs to North Carolina, the state saw a significant number of job gains in February.

At 8:51 a.m. March 25, an hour before the scheduled release, Parker told Johnson he had difficulty following Pearson’s directive:

Mark, I looked through Chrissy’s generic messaging and found nothing to ‘totally’ fit.

‘North Carolina added a significant number of jobs in February,’ said ESC Chairman Lynn R. Holmes. ‘This was the second consecutive month with job gains as several sectors showed improvement. Gov. Perdue’s top priority is growing and keeping jobs in North Carolina, and in February there were a notable amount of job gains as well as over-the-year increase throughout many of the job sectors. Our statewide offices will continue to provide services to assist our state’s citizens who are looking to find work.

Also at 8:51, Parker sent Johnson a slightly different version:

”North Carolina added a significant number of jobs in February,” said ESC Chairman Lynn R. Holmes. “North Carolina experienced back-to-back months of job gains, showing that the state is forging ahead of the difficult recession. The Governor continues to focus on growing jobs in North Carolina and in February there were a notable amount of job gains, as well as over-the-year increases throughout many of the job sectors. Our statewide offices will continue to provide services to assist our state’s citizens who are looking for work.”

At 9:29, Johnson responded to Parker, “Chrissy still needs to review, but see the tweaked version of what you sent below.”

At 10:07, seven minutes after the scheduled public release, Parker had not received a go-ahead from Perdue’s team to finalize the language. “Do we have an update,” he asked Johnson. “BLS has already released the data.”

BLS posts data for all the states on its website at the time designated for release.

The final version released to the public read:

“Clearly Gov. Perdue’s focus on growing jobs in North Carolina should continue to be the No. 1 priority for North Carolina leaders,” said ESC Chairman Lynn R. Holmes. “We are showing signs of slow but steady progress, with job gains in February and over-the-year. Here at the ESC we remain committed to assisting out-of-work citizens with training and services to get them through these hard times and back to work.”

Read the rest here.

It was four years ago that a punishing recession officially began. The financial pressure drove many companies out of business, while the survivors generally adapted and got stronger.

But some firms are still struggling, whether from delayed effects of the recession, relentless competition, fresh strategic blunders or a turnaround plan that hasn’t panned out. While a double-dip recession seems unlikely in 2012, CEOs are intently watching for a financial crisis in Europe or policy mistakes in the United States that could weaken the economy. And consumer spending, surprisingly strong in 2011, could decline once again, as overspent consumers get nervous. There’s plenty that could go wrong, in other words, even though the economy is supposedly recovering.

To identify companies with the thinnest margin for error, I analyzed data on stock prices, expected 2012 earnings and other financial measures provided by S&P Capital IQ, a financial-information firm. The companies I’ve highlighted had a weak year-to-date stock performance through mid-December 2011, indicating deep investor worry. These are also firms likely to have weak earnings in the future, according to Capital IQ’s summary of analyst forecasts for 2012 and beyond.

There probably will not be a fresh surge of bankruptcies in 2012, but in some industries there’s likely to be consolidation as weak firms succumb to stronger ones. Plus, the usual forces of competition always produce winners and losers. Here are 11 prominent firms likely to struggle in 2012:

Eastman Kodak. Stock decline in 2011: 85 percent. It’s never a good sign when a firm denies that it’s heading for bankruptcy, as Kodak has been doing. Kodak was slow to join the revolution in digital photography, while taking several wrong turns into fields such as pharmaceuticals and document management. The firm is now seeking to sell assets and find other ways to raise cash so it can return to profitability after five consecutive money-losing years. Investors are clearly worried: Kodak stock has recently traded below $1 per share, a threshold at which companies are sometimes delisted from major exchanges.

Research in Motion. Stock decline: 76 percent. The once-ubiquitous Blackberry commanded 55 percent of the U.S. smartphone market in 2009, according to research firm Canalys. Today, its market share is less than 10 percent. Blackberry-maker RIM has failed to counter ruthless competition from Apple’s iPhone and the many Android phones now available, with total Blackberry shipments falling recently even though the overall smartphone market is still exploding. Plus RIM’s PlayBook tablet device–meant to take on Apple’s iPad–has been a flop. A key Blackberry upgrade has been pushed back until late 2012. By then, RIM might be gobbled up by a goliath such as Microsoft or Samsung.

OfficeMax. Stock decline: 75 percent. If the economy were booming, maybe three office-supply chains–OfficeMax, Office Depot and Staples–would all be able to thrive. But the tough economy, plus competition from discounters like Walmart and Costco, has put pressure on the whole group. Investors seem to have the strongest doubts about OfficeMax, whose stock has fallen significantly more than its two competitors over the last 12 months.

Monster Worldwide. Stock decline: 67 percent. If the economy springs back and hiring picks up, this job-placement firm could thrive. But the economic rebound, of course, is painfully slow, with CEOs basically waiting to see whether another crisis is coming. It could be 2013 or later before they’re convinced the clouds have passed. Meanwhile, new competitors are going online, hoping to cash in on the same hiring boom Monster is waiting for.

Bank of America. Stock decline: 61 percent The whole banking sector is beaten down due to fears of a European crisis. Bank of America is under special scrutiny because of its disastrous 2008 purchase of Countrywide Financial, which has saddled the bank with billions in losses on bad mortgages, many of which may to sour. Investors worry that B of A hasn’t fully revealed its full exposure to troubled counterparties in Europe or stressed mortgage holders. But if B of A skirts disaster, it may recover sooner than expected.

To see the final 6 companies, go here.

JustiaGate: ‘Natural Born’ Supreme Court Citations Disappear

By Dianna C. Cotter with L. Donofrio Esq.

5K emails were published in Climategate 2.0. It seems the rumors that the 20K or so emails still hidden with encryption may indeed contain proof of U.S. and U.K. government cooperation in publishing shoddy research, keeping skeptic research from being published, and disallowing sharing of data and algorithms developed using U.S. taxpayer funding.

Me thinks the One doth protest too much…

News stories saying 50 percent of Americans are low-income or in poverty may be wrong, Census analysts in LA said.

You may have heard worried news reports that 50 percent of Americans had either fallen into poverty or are considered low income.

UPDATE: Census Bureau clarifies poverty figures.

But while poverty in the United States is certainly an important issue, those figures appear to be wrong, perhaps based on a misunderstanding of the data by journalists who did not go back to the source to doublecheck their figures, said analysts at the U.S. Census Bureau district office in Los Angeles.

NBCLA worked with three data analysts at the Census Bureau to check the data, and the real figures do indeed appear to be quite different.

Read the rest here.

The research is here.

Abstract

We construct a growth model with an explicit government role, where more government resources reduce the optimal level of private consumption and of output per worker. In the empirical analysis, for a panel of 108 countries from 1970-2008, we use different proxies for government size and institutional quality. Our results, consistent with the presented growth model, show a negative effect of the size of government on growth. Similarly, institutional quality has a positive impact on real growth, and government consumption is consistently detrimental to growth. Moreover, the negative effect of government size on growth is stronger the lower institutional quality, and the positive effect of institutional quality on growth increases with smaller governments. The negative effect on growth of the government size variables is more mitigated for Scandinavian legal origins, and stronger at lower levels of civil liberties and political rights. Finally, for the EU, better overall fiscal and expenditure rules improve growth. [Emphasis mine]

Non-Technical Summary

Governments tend to absorb a sizeable share of society’s resources and, therefore, they affect economic development and growth in many countries. However, despite necessary, government intervention is not a sufficient condition for prosperity, if it leads to the monopolization of the allocation of resources and other important economic decisions, and societies do not succeeded in attaining higher levels of income.

The existing literature presents mixed results as to the relationship between government size and economic development. On the one hand, the former may impact economic growth negatively due to government inefficiencies, crowding-out effects, excess burden of taxation, distortion of the incentives systems and interventions to free markets. On the other hand, government activities may also have positive effects due to beneficial externalities, the development of a legal, administrative and economic infrastructure and interventions to offset market failures.

Our paper includes several contributions: i) we construct a growth model allowing for an explicit government role, we characterize the conditions underlying the optimal path of the economy and determine the steady-state solutions for the main aggregates; ii) we analyse a wide set of 108 countries composed of both developed and emerging and developing countries, using a long time span running from 1970-2008, and employing different proxies for government size and institutional quality to increase robustness; iii) we build new measures of extreme-type political regimes which are then interacted with appropriate government size proxies in non-linear econometric specifications; iv) we make use of recent panel data techniques that allow for the possibility of heterogeneous dynamic adjustment around the long-run equilibrium relationship as well as heterogeneous unobserved parameters and cross-sectional dependence; vi) we also deal with potentially relevant endogeneity issues; and vii) for an EU sub-sample we assess the relevance of
numerical fiscal rules in explaining differentiated GDP and growth patterns.

Our results show a significant negative effect of the size of government on growth. Similarly, institutional quality has a significant positive impact on the level of real GDP per capita. Interestingly, government consumption is consistently detrimental to output growth irrespective of the country sample considered (OECD, emerging and developing countries). Moreover, i) the negative effect of government size on GDP per capita is stronger at lower levels of institutional quality, and ii) the positive effect of institutional quality on GDP per capita is stronger at smaller levels of government size. [Emphasis mine]

On the other hand, the negative effect on growth of the government size variables is more attenuated for the case of Scandinavian legal origins, while the negative effect of government size on GDP per capita growth is stronger at lower levels of civil liberties and political rights. Finally, and for the EU countries, we find statistically significant positive coefficients on overall fiscal rule and expenditure rule indices, meaning that having stronger fiscal numerical rules in place improves GDP growth.

For an excellent analysis of this new research, go here.

*Note* They were drinking out of garbage cans…

LAS VEGAS (AP) — Some runners who participated in the Rock ‘n’ Roll Marathon in Las Vegas say water passed out during the race made them sick.

The Las Vegas Sun reports that health officials are investigating at least 10 claims of intestinal problems following the Sunday night marathon. They also have posted a survey to pinpoint a possible source for illness complaints that have been posted on Facebook.

Race organizers filled lined buckets or trash cans with hydrant water, which was used to fill cups offered to racers along the course.

Some runners complained that the water tasted odd or unclean.

Race organizers say the hydrant water was tested and found to be safe.

The event drew some 44,000 racers who paid up to $179 to run a half or full marathon.

Source

Keep in mind that Blodget was found guilty of securities fraud and is banned from the securities industry.

by Henry Blodget

In the war of rhetoric that has developed in Washington as both sides try to blame each other for our economic mess, one argument has been repeated so often that many people now regard it as fact:

Rich people create jobs.

Specifically, entrepreneurs, when incented by low taxes, build companies and create millions of jobs.

And these entrepreneurs, therefore, the argument goes, can solve our nation’s huge unemployment problem–if only we cut taxes and regulations so they can be incented to build more companies and create more jobs.

In other words, by even considering raising taxes on “the 1%,” we are considering destroying the very mechanism that makes our economy the strongest and biggest in the world: The incentive for entrepreneurs to start companies in the hope of getting rich and, in the process, creating millions of jobs.

Now, there have long been many absurd holes in this theory, starting with

1. Taxes on rich people (capital gains and income) are, relative to history, low, so raising them would only begin to bring them back in line with prior prosperous periods, and
2. Dozens of rich entrepreneurs have already gone on record confirming that a modest hike in capital gains and income taxes would not have the slightest impact on their desire to create companies and jobs, given that tax rates are historically low.

So this theory, which many people regard as fact, is already ridiculous.

But now a super-rich and super-successful American has explained the most important reason the theory is absurd, while calling for higher taxes on himself and people like him.

Read the rest of Blodget’s absurd piece here.

Gosh. Who knew that a massive tax could solve all imagined climate problems?

David L. Hagen writes:

The UN is demanding control over $1.6 trillion per year to control climate. See Section 47 in draft # FCCC/AWGLCA/2011/CRP.39 9 December 2011 #GE.11-71576 at: http://trade.cc/owg

47.  The provision of the amount of funds to be made available annually to developing country Parties, which shall be equivalent to the budget that developed countries spend on defence, security, and warfare. Fifty per cent of that amount shall be for adaptation, 20 per cent for mitigation, 15 per cent for technology development and transfer and 15 per cent for forest-related actions in developing country Parties;

See Reuters: Worldwide military spending edged up in 2010 to a record $1.6 trillion, a leading think-tank said on Monday. Source: Stockholm International Peace Research Institute’s military expenditure database. http://trade.cc/owi . . .

Read the rest here.

by Tom Steward

It’s that time of year again.  Thousands of Minnesotans begin implementing evacuation plans to temporarily relocate somewhere south and warm.  Before embarking, many make a preemptive appointment in a tanning facility to ramp up their exposure to ultra violet (UV) rays in advance. This winter, however, traveling tanners will have to look harder for a place to catch some rays — and not just in the frozen north.

Fourteen percent of indoor tanning facilities in Minnesota have gone out of business since 2009, according to the Indoor Tanning Association (ITA).  The number of professional indoor tanning salons registered with ITA in Minnesota has plummeted from 477 to 419 in less than two years. In the industry’s view, it’s no coincidence the store closures and layoffs came so soon after the federal government targeted tanning salons for tax hikes. “Once again we have our government trying to control our behavior,” said John Overstreet of the Indoor Tanning Association.  “You can’t just pick out an industry because someone views them some way and try to tax them into submission. That’s just crazy.”

While the economic downturn has undercut consumers’ discretionary spending, the industry places more blame on the ten percent excise tax imposed as part of the Patient Protection and Affordable Care Act.  The one—two punch of the untimely health care act tax and sour economy wiped out 16 percent of tanning parlors nationwide — a loss of 3,100 businesses and 24,000 jobs.  Three-quarters of tanning operations are owned by women which is three times the national average for other businesses.

“Basic economics tells you that you can’t tack ten percent on your prices without affecting demand. They’ve seen people cancel their packages, it’s definitely impacted demand and the number of customers and profitability of these businesses,” Overstreet told the Freedom Foundation of Minnesota. The tanning tax took effect in July 2010, the first tax imposed under the Obama administration’s health care reform legislation with 81 new IRS agents to enforce it. Congress estimated the excise tax on the estimated 25,000 professional tanning salons in business back then would generate $2.7 billion in revenue over ten years. The tax has raised about $37 million in the first half of the current fiscal year, putting it on course to generate less than half the $200 million in revenue projected by the Congressional Joint Committee on Taxation for the first full year of collections.

Read the rest here.

Via Bespoke:

Thursday, December 8, 2011 at 03:28PM

(Reuters) – European Union leaders agreed on new fiscal rules enshrining tougher budget discipline on Thursday, an EU official said, after the European Central Bank doused hopes of dramatic action on its part to arrest the euro area’s debt crisis.

The 27 EU leaders, meeting in Brussels, agreed on automatic sanctions for euro zone deficit offenders unless three-quarters of states vote against the move, and approved a new fiscal rule on balanced budgets to be written into national constitutions.

“There is a deal between leaders on the new fiscal compact,” an EU official told reporters after four hours of talks.

However, they were still debating how to strengthen their future permanent rescue fund and whether to give it a banking license, and had not yet broached the vexed question of whether the new pact requires major changes to the EU treaty.

European Council President Herman Van Rompuy, the summit chairman, wants all 27 EU states to agree to the rule changes via a minor adjustment to a treaty protocol that could be implemented quickly without requiring full ratification. But German Chancellor Angela Merkel demanded a fully fledged treaty change to give the measures extra weight.

“The Germans are obsessed with how we are going to do things, saying we have to change the treaty. They are totally obsessed. That’s why it can get difficult,” an EU diplomat said.

ECB President Mario Draghi earlier spooked financial markets by discouraging expectations that the bank would massively step up buying of government bonds if EU leaders agreed on moves towards closer fiscal union.

As soon as the draft summit agreement leaked, a senior German official rejected key measures including letting the future rescue fund, the European Stability Mechanism, operate as a bank, borrowing from the ECB, and a long-term goal of issuing common euro zone bonds.

Draghi said the bloc’s existing bailout facility should remain the main tool to fight bond market contagion, despite its clear limits. It was illegal for the ECB or national central banks to lend money to the IMF to buy euro zone bonds, he said, appearing to veto one firefighting option under consideration.

The ECB did take unprecedented action to support Europe’s cash-starved banks with three-year liquidity and cut interest rates back to a record low 1.0 percent to counter a forecast recession brought on by widespread austerity measures.

The euro and world shares briefly rallied on news of the draft summit conclusions, only to fall back on the German rejection. Investors are increasingly convinced only the ECB has the power to protect the euro zone, and were disappointed by Draghi’s caution on bond-buying.

“One step forward, two steps back,” said Alan Clarke, UK and euro zone economist at Scotia Capital. “The euro zone leaders might as well not bother. Pack their bags, go home, enjoy the weekend and do their Christmas shopping.”

French President Nicolas Sarkozy dramatized the danger facing the 17-nation single currency area hours before their eighth crisis summit of the year in a speech to European conservative leaders in the French port city of Marseille.

“Never has the risk of Europe exploding been so big,” he said. “If there is no deal on Friday there will be no second chance.”

France and Germany used the Marseille meeting to lobby for their plan to amend the European Union treaty to toughen budget discipline, which they want to have ready by March. But several countries are skeptical of full-blown treaty change.

Merkel said on arrival in Brussels: “The euro has lost credibility and this must be won back. We will make clear that we will accept more binding rules.”

The new ECB chief said his remark last week that “other elements” might follow if euro zone leaders agreed to seal tougher new budget rules had been overinterpreted as hinting the bank could step up bond purchases.

“I was surprised by the implicit meaning that was given,” Draghi said, without offering an alternative interpretation.

The ECB cut its main rate by a quarter-point and flagged a strong chance of recession next year. Draghi admitted the central bankers had been divided even on that decision.

The plight of Europe’s banks was also thrown into sharp relief. The European Banking Authority told them to increase their capital by a total of 114.7 billion euros, significantly more than predicted two months ago.

A Reuters poll of economists found that while 33 out of 57 believe the euro zone will probably survive in its current form, 38 of those questioned expected this week’s summit would fail to deliver a decisive solution to the debt crisis.

Read the rest here.

By Scott Cendrowski, writer-reporter

December 6, 2011: 12:50 PM ET

Investor Jeremy Grantham thinks stocks are overpriced, and he shows how long it could take the market to recover after another crash.

FORTUNE — Investing sage Jeremy Grantham sounded a little guilty in his latest report to clients, titling it “The Shortest Quarterly Letter Ever.” He should hold the apologies. Grantham, one of the pithiest market writers around, includes a chilling graphic in the four-page note that is one of the most mesmerizing market visuals of 2011.

Grantham is a value investor who oversees nearly $100 billion at his Boston-based firm, GMO. Using historical averages of prosaic data like profit margins and price-to-earning ratios, he’s made a series of prescient market calls. This spring, as U.S. stocks quickly rose, he told investors to flee the market because of escalating global fears. (He was right.) And back in 2009, he famously published a bullish note titled “Reinvesting When Terrified” at the market’s nadir.

Today he’s sounding the alarm again on stocks, and he seems as wary as ever. “Since the spring,” Grantham explains, “the equity markets have been absolutely bombarded by bad news.” Between the eurozone crisis and fears of a slowdown in China, there’s as much bad news as ever, he says. Yet the S&P 500 keeps recovering whenever crises ease for a just few days, thanks to sky-high profit margins and historically low inflation. Those two factors are driving U.S. stocks past Grantham’s estimate of the market’s fair value of 975-1,000 for the S&P 500 (SPX).

This is where his analysis starts to get scary. Profit margins will fall back to historical levels eventually, he says, and stocks will come down with them. Then there’s an inflection point. If any unresolved crises remain on the table when this happens — the eurozone crisis; a slowdown in China; budget impasses in the U.S. — then U.S. stocks could start to look a lot like those in Japan.

For two decades the Federal Reserve has bailed out stock markets, he argues. Former Fed Chairman Alan Greenspan cut interests rates to near zero percent at the slightest indication of economic decline. And today, Chairman Ben Bernanke has followed the same course, stimulating the market so drastically in 2009 that after stocks crashed they took only three months to recover to a long-term upward trend.

“This pattern is unique,” Grantham writes. And now that the Fed’s balance sheet is stuffed full with debt, he adds, it may not come to aid during another stock downturn.

“GMO has looked at the 10 biggest bubbles of the pre-2000 era and has calculated that it typically takes 14 years to recover to the old trend,” Grantham says. The important point of all this, he writes, is that almost none of today’s professional investors have experienced anything like this because the Fed has come to the rescue.

“When one of these old-fashioned but typical declines occurs,” he writes, “professional investors, conditioned by our more recent ephemeral bear markets, will have a permanent built-in expectation of an imminent recovery that will not come.”

That sets up an environment that Grantham dubs, “No Market for Young Men.” Grantham shows how long it may take U.S. stocks to recover if they crashed today:

Read the rest here.

If a spate of recent allegations proves true, Hollywood may have a hideous epidemic on its hands. The past two weeks have brought three separate reports of alleged child sexual abuse in the entertainment industry.

Martin Weiss, a 47-year-old Hollywood manager who represented child actors, was charged in Los Angeles on Dec. 1 with sexually abusing a former client. His accuser, who was under 12 years old during the time of the alleged abuse, reported to authorities that Weiss told him “what they were doing was common practice in the entertainment industry.” Weiss has pleaded not guilty.

By MARK STEYN Posted 12/02/2011 07:05 PM ET

I’ve been alarmed by the latest polls. No, not from Iowa and New Hampshire, although they’re unnerving enough. It’s the polls from Egypt.

Foreign policy has not played a part in the U.S. presidential campaign, mainly because we’re so broke that the electorate seems minded to take the view that if government is going to throw trillions of dollars down the toilet they’d rather it was an Al Gore-compliant Kohler model in Des Moines or Poughkeepsie than an outhouse in Waziristan.

Alas, reality does not arrange its affairs quite so neatly, and the world that is arising in the second decade of the 21st century is increasingly inimical to American interests, and likely to prove even more expensive to boot.

In that sense, Egypt is instructive. Even in the giddy live-from-Tahrir-Square heyday of the “Arab Spring” and “Facebook Revolution” I was something of a skeptic.

Back in February, I chanced to be on Fox News with Megyn Kelly within an hour or so of Mubarak’s resignation. Over on CNN, Anderson Cooper was interviewing telegenic youthful idealists cooing about the flowering of a new democratic Egypt.

Back on Fox, sourpuss Steyn was telling Megyn that this was “the unraveling of the American Middle East” and the emergence of a post-Western order in the region. In those days, I was so much of a pessimist I thought that in any election the Muslim Brotherhood would get a third of the votes and be the largest party in parliament.

By the time the actual first results came through last week, the Brothers had racked up 40% of the vote — in Cairo and Alexandria, the big cities wherein, insofar as they exist, the secular Facebooking Anderson Cooper types reside. In second place were their principal rivals the Nour party, with up to 15% of the ballots. “Nour” translates into English as “the Even More Muslim Brotherhood.”

As the writer Barry Rubin pointed out, if that’s how the urban sophisticates vote, wait till you see the upcountry results. By the time the rural vote emerges from the Nile Delta and Sinai early next month, the hard-core Islamists will be sitting pretty. In the so-called “Facebook revolution,” two-thirds of the Arab world’s largest nation is voting for the hard, cruel, bigoted, misogynistic song of Sharia.

The short 90-year history of independent Egypt is that it got worse. Mubarak’s Egypt was worse than King Farouk’s Egypt, and what follows from last week’s vote will be worse still. If you’re a westernized urban woman, a Coptic Christian, or an Israeli diplomat with the goons pounding the doors of your embassy, you already know that.

The Kingdom of Egypt in the three decades before the 1952 coup was flawed and ramshackle and corrupt, but it was closer to a free-ish pluralist society than anything in the years since.

In 1923, its Finance Minister was a man called Joseph Cattaui, a member of Parliament, and a Jew. Couldn’t happen today. Mr. Cattaui’s grandson wrote to me recently from France, where the family now lives.

In the unlikely event the forthcoming Muslim Brotherhood government wishes to appoint a Jew as finance minister, there are very few left available. Indeed, Jews are so thin on the ground that those youthful idealists in Tahrir Square looking for Jews to club to a pulp have been forced to make do with sexually assaulting hapless gentiles like the CBS News reporter Lara Logan.

It doesn’t fit the narrative, so even Miss Logan’s network colleagues preferred to look away. We have got used to the fact that Egypt is now a land without Jews. Soon it will be a land without Copts. We’ll get used to that, too.

Since the collapse of the Warsaw Pact two decades ago we have lived in a supposedly “unipolar” world. Yet somehow it doesn’t seem like that, does it? The term “Facebook Revolution” presumes that technology marches in the cause of modernity. But in Khartoum a few years ago a citywide panic that shaking hands with infidels caused your penis to vanish was spread by text messaging.

In London, young Muslim men used their cell phones to share Islamist snuff videos of Westerners being beheaded in Iraq. In les banlieues of France, satellite TV and the Internet enable third-generation Muslims to lead ever more dis-assimilated, segregated lives, immersed in an electronic pan-Islamic culture, to a degree that would have been impossible for their grandparents.

To assume that Western technology in and of itself advances the cause of Western views on liberty or women’s rights or gay rights is delusional.

Consider, for example, the “good” news from Afghanistan. A 19-year old woman sentenced to 12 years in jail for the heinous crime of being brutally raped by a cousin was graciously released by President Karzai on condition that she marry her rapist.

Read the rest here.