Skip to the last paragraph for the money quote, although all of it is a must-read.

Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off.

ECRI’s recession call isn’t based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down – before the Arab Spring and Japanese earthquake – to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes. In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not “soft landings.”

Last year, amid the double-dip hysteria, we definitively ruled out an imminent recession based on leading indexes that began to turn up before QE2 was announced. Today, the key is that cyclical weakness is spreading widely from economic indicator to indicator in a telltale recessionary fashion.

Why should ECRI’s recession call be heeded? Perhaps because, as The Economist has noted, we’ve correctly called three recessions without any false alarms in-between. [Emphasis mine] In contrast, most of those who’ve accurately predicted a recession or two have also been guilty of crying wolf – in 2010, 2005, 2003, 1998, 1995, or 1987.

Read the rest here.

Link to Anonymous’s video threat:

Operation Invade Wall Street: A Message to the Media

The smart money says the U.S. economy will splinter, with some states thriving, some states not, and all eyes are on California as the nightmare scenario. After a hair-raising visit with former governor Arnold Schwarzenegger, who explains why the Golden State has cratered, Michael Lewis goes where the buck literally stops—the local level, where the likes of San Jose mayor Chuck Reed and Vallejo fire chief Paige Meyer are trying to avert even worse catastrophes and rethink what it means to be a society.

Read the rest here.

ORLANDO — Former Godfather Pizza CEO Herman Cain won the Presidency 5 straw poll here Saturday, delivering a blow to Texas Gov. Rick Perry’s frontrunner status and a victory for a candidate who has struggled to transform his grassroots popularity into strong showings in national polls.

“Tonight’s winner is Herman Cain,” Florida Gov. Rick Scott announced. “It shows you something, the road to the White House come through Florida, and it pays to spend time here.”

He received 37 percent of the more than 2,600 votes cast.

“Thank you to the Republican voters for this incredible honor of being named the winner of the Presidency 5 straw poll in Florida today,” Mr. Cain said. “This is a sign of our growing momentum and my candidacy that cannot be ignored. I will continue to share my message of ‘common-sense solutions’ across this country and look forward to spending more time in Florida, a critical state for both the nomination and the general election.”

Read the rest here.

VIEWS on the best way to deal with the rich-world’s debt problems vary across its countries, according to the latest annual survey of American and European public opinion by the German Marshall Fund, a think-tank. The poll shows clear support for austerity over stimulus in the rich world. That may be because announced austerity plans have yet to kick in: Britain is an exception to this, and there views seem to be more finely balanced. The biggest change in sentiment can be seen in the euro area. In 2009 only 8% of Italians thought their government was spending too much compared to 49% who now want it cut. In Portugal and Spain nearly one-third of those asked two years ago thought that too little was being spent, an opinion now held by only a fraction of that.

Go here for the rest, including the chart of global public opinion on government spending.

A law enforcement source seems to think so.

September 5th, 2011 by Roy W. Spencer, Ph. D.

One of the most annoying things about the climate change debate is that any regional weather event is blamed on humans, if even only partly. Such unscientific claims cannot be supported by data — they are little more than ambiguous statements of faith.

The current “exceptional” Texas drought is no exception. People seem to have short memories…especially if they were born after most of the major climate events of the past occurred.

Andy Dessler recently made what I’m sure he thought was a safe claim when faulting Texas Gov. Rick Perry for being “cavalier about climate change” (as if we could stop climate from changing by being concerned about it).

Dessler said, “..warming has almost certainly made the (Texas) heat wave and drought more extreme than it would otherwise have been.”

This clever tactic of claiming near-certainty of at least SOME effect of humans on weather events was originally invented by NASA’s James Hansen in his 1988 Senate testimony for Al Gore, an event that became the turning point for raising public awareness of “global warming” (oops, I’m sorry, I mean climate change).

The trouble is that climate change theory predicts changes, up and down, in just about anything you can imagine. So, anything unusual that happens anywhere, anytime, is deemed “consistent” with global warming.

But this tactic can work both ways — a specific drought might have instead been made LESS severe by the general tendency toward MORE rainfall, which is a much more robust prediction of the climate models with warming.

For example, let’s look at June-July total rainfall over the whole contiguous U.S. — which is only 1.6% of the Earth’s surface — over the last 100+ years (August data are not yet posted at NCDC):

To read the rest (including some great chart porn) go here.

Twenty high-profile economists have urged the government to drop the top 50p tax rate, which they say is doing “lasting damage” to the UK economy.

In a letter to the Financial Times, they say it should be axed “at the earliest opportunity” to boost growth.

The tax is paid at 50p for each pound earned over £150,000 and affects around 310,000 people.

Critics say cutting the top rate at a time of cuts would be “monstrously unfair” and “phenomenally immoral”.

Ministers say although the 50p rate is temporary, their policy is to first increase the income tax threshold to £10,000.

The chancellor has asked HM Revenue and Customs to look at how much has been raised by the 50p rate, but it will not be able to count this until this year’s self-assessment tax returns are in after January next year.

The 20 signatories to the FT letter include two former members of the Bank of England’s Monetary Policy Committee, DeAnne Julius and Sushil Wadhwani.

It is part of a campaign being promoted through PR firm Westbourne, which they say is funded by businesses concerned about the impact of the 50p rate.

‘Mobile people’

The economists argue that the tax rate makes is making the UK “less competitive internationally, and making us less attractive as a destination for both foreign investment and talented workers”.

They call on the coalition, “to drop the 50p tax at the earliest opportunity as part of a package of measures to stimulate growth”.

Read the rest here.

Nick Gillespie, September 7, 2011

In The Washington Times, businessman Mike Whalen (who’s associated the free-market think tank NCPA) writes up an interesting take on why various federal stimulus program have tanked like the Titanic(while causing few ripples on the way down).

His points are worth thinking about.

According to the Keynesians, the remedy for today’s economic problem is for the federal government, as the single biggest actor, to “prime the pump.” As government money starts to ripple through the economy, consumers and businesses will be encouraged and cautiously respond with limited increases of their own. Vroom! The economic engine steadily revs up in billions of responsive steps until happy days are here again. This pump-priming reaction is termed the “multiplier effect.”

There are many reasons to doubt that the multiplier exists at all and if it does, it certainly isn’t at the levels the Obama administration has claimed. As Reason’s economics columnist Veronique de Rugy has pointed out, the administration claimed that one dollar of government spending would create as much as four dollars in economic activity while other economists were coming in with multipliers of between 0.8 and 1.2, meaning that each dollar of government spending might yield just 80 cents to $1.20 in activity. Even if accurate, that buck-twenty is nothing to write home about, especially given the fact that government spending has to be pulled out of some other part of the economy via current or future taxes or borrowing. Which casts huge doubt on the possibility of any stimulus to work.

But Whalen isn’t simply dumping on Keynesianism, he’s bent on pointing out that even its latter-day adherents are straying far from their master’s theory. And in this, he’s surely correct. As Allen Meltzer has argued, Keynes was against the very sort of large structural deficits that characterize contemporary federal budgets and policy, believing instead that deficits should be “temporary and self-liquidating.” And Keynes believed that any sort of counter-cyclical spending by government should be directed toward increasing private investment, not simply spending current and future tax dollars on public works projects.

Or, to put it another way: If the federal government had a strong track record of responsible spending, it would mean one thing if it went into hock for a short period of time to goose the economy (again, whether this would work is open to question). It means something totally different when a government that spent all of the 21st century piling on debt and new, long-term entitlement programs responds to an economic downturn first by creating yet another gargantuan entitlement (Obamacare) and taking on even more debt in the here-and-now. This cuts in a Milton Friedmanesque, monetarist direction too. If the Federal Reserve had not been keeping money artificially cheap for the past couple of decades and it worked to lower interest rates and increase the availability of money in a given moment, that would mean one thing. Promising to keep rates low for the next couple of years – after years of loose money and statements that all those bubbles weren’t bubbles at all  – doesn’t mean the same thing.

Read the rest here.

Charles Hugh Smith publishes Foreclosure Crisis Weekly, dedicated to documenting the often-amazing foreclosure crisis.

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All attempts to reform the Status Quo of advanced finance-based Capitalism will fail, as its historically inevitable crisis is finally at hand. It is self-evident that conventional economics has failed, completely, utterly and totally. The two competing cargo cults of tax cuts/trickle-down and borrow-and-spend stimulus coupled with monetary manipulation have failed to restore advanced Capitalism’s vigor, not just in America, but everywhere.

Conventional econometrics is clueless about the root causes of advanced finance-based Capitalism’s ills. To really understand what’s going on beneath the surface, we must return to “discredited” non-quant models of economics: for example, Marx’s critique of monopoly/cartel, finance-dominated advanced Capitalism. (“Capitalism” is capitalized here to distinguish it from “primitive capitalism.”)

All those fancy equation-based econometrics that supposedly model human behavior have failed because they are fundamentally and purposefully superficial: they are incapable of understanding deeper dynamics that don’t fit the ruling political-economy conventions.

Marx predicted a crisis of advanced Capitalism based on the rising imbalance of capital and labor in finance-dominated Capitalism. The basic Marxist context is history, not morality, and so the Marxist critique is light on blaming the rich for Capitalism’s core ills and heavy on the inevitability of larger historic forces.

In other words, what’s wrong with advanced Capitalism cannot be fixed by taxing the super-wealthy at the same rate we self-employed pay (40% basic Federal rate), though that would certainly be a fair and just step in the right direction. Advanced Capitalism’s ills run much deeper than superficial “class warfare” models in which the “solution” is to redistribute wealth from the top down the pyramid.

This redistributive “socialist” flavor of advanced Capitalism has bought time–the crisis of the 1930s was staved off for 70 years–but now redistribution as a saving strategy has reached its limits.

To read the rest and see some nice chart porn, go here.

This week the left-wing press has been attacking House Majority Leader Eric Cantor for holding disaster relief funding “hostage.” A more accurate way to put this is that Senate Democrats won’t approve new funding for disasters unless they get the funding they want for corporations that make electric cars.

Here’s the story: In June, House Republicans passed the 2012 Homeland Security appropriations bill, which included an amendment adding $1 billion to the Disaster Relief Fund of the Federal Emergency Management Agency (FEMA). In a sensible move for taxpayers, the amendment offsets this new disaster funding by cutting spending on the Advanced Technology Vehicles Manufacturing Loan Program. This may ring a bell with readers as the funding conduit for one of Washington’s adventures in crony capitalism.

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One reason the House bill has less funding for Democratic priorities is because, even before the hurricane, Republicans had decided that the President’s budget didn’t have enough money for the Disaster Relief Fund. So they funded it at $850 million above the President’s request. Then as they realized that the damage in places like Joplin, Missouri would put additional strain on the fund, the GOP added the amendment that provided still more disaster assistance and cut funding for Mr. Biden’s beloved electric cars.

The White House hasn’t asked for more funding, though White House budget director Jacob Lew wrote to lawmakers Thursday suggesting it could be well north of $5 billion. But so far Mr. Cantor is being blamed for opposing disaster relief because he has been trying to spend more than the President, and to place that above other spending priorities.

Read the whole story here.

You’ll have to visit the source to see the chart.

As Lawrence Solomon has reported, with little fanfare—certainly none from pseudo-scientific, apocalyptic, anthropogenic warmists and their uncritical (if witless) media and political champions—Jasper Kirkby et al. have just published a seminal paper in Nature (“Role of sulphuric acid, ammonia and galactic cosmic rays in atmospheric aerosol nucleation.” Nature Volume: 476, Pages: 429–433  (25 August 2011) DOI: doi:10.1038/nature10343).

Solomon’s pellucid lay description summarizes the key study findings and their devastating impact upon the so-called “settled science” of greenhouse gas- mediated, “anthropogenic warming”:

The research…comes from über-prestigious CERN, the European Organization for Nuclear Research, one of the world’s largest centres for scientific research involving 60 countries and 8,000 scientists at more than 600 universities and national laboratories. CERN is the organization that invented the World Wide Web, that built the multi-billion dollar Large Hadron Collider, and that has now built a pristinely clean stainless steel chamber that precisely recreated the Earth’s atmosphere. In this chamber, 63 CERN scientists from 17 European and American institutes have done what global warming doomsayers said could never be done — demonstrate that cosmic rays promote the formation of molecules that in Earth’s atmosphere can grow and seed clouds, the cloudier and thus cooler it will be. Because the sun’s magnetic field controls how many cosmic rays reach Earth’s atmosphere (the stronger the sun’s magnetic field, the more it shields Earth from incoming cosmic rays from space), the sun determines the temperature on Earth.

Read the rest here.

The Old Dominion Freight Line trucking company, based in North Carolina but with 211 service centers across the country, found itself with a personnel problem back in June 2009.  An employee with an otherwise clean record approached management and confessed he had a drinking problem.  Following U.S. Department of Transportation regulations, the company suspended this employee from his driving position, and referred him for substance abuse counseling.

The company took one other action: they told the alcoholic that they would never let him drive trucks for them again, even after he finished his counseling program.  They have apparently told other alcoholic drivers the same thing in the past.

Unfortunately for the Old Dominion Freight Line, other trucking companies, and everyone who finds themselves driving in the shadow of an 18-wheeler with a drunk driver:

Alcoholism is a recognized  disability under the Americans With Disabilities Act (ADA), and disability  discrimination violates this federal law.  The EEOC said that the company violated both the ADA and the Americans With Disabilities Act  Amendment Act of 2008 (ADAAA) by conditioning reassignment to non-driving  positions on the enrollment in an alcohol treatment program. In addition, the EEOC argued that Old  Dominion’s policy that bans any driver who self-reports alcohol abuse from ever  driving again also violates the ADA.

The EEOC filed suit after first  attempting to reach a voluntary settlement.  The suit seeks monetary relief in the form of reinstatement to a driving  position, back pay and compensatory and punitive damages, compensation for lost  benefits for two drivers, and an injunction against future discrimination.

“The ADA mandates that persons with disabilities have an  equal opportunity to achieve in the workplace.  Old Dominion’s policy and practice of never returning an employee who  self-reports an alcohol problem to a driving position violates that law,”  said Katharine Kores, director of the EEOC’s Memphis District Office, whose  jurisdiction includes Arkansas. “While the EEOC agrees that an employer’s  concern regarding safety on our highways is a legitimate issue, an employer can  both ensure safety and comply with the ADA.”

Read the rest here.

The world’s developed economies are trapped at the “stall speed” of low growth and need to have greater fiscal stimulus and less austerity to kick-start growth, leading economist Nouriel Roubini told CNBC Friday.

Speaking at the Ambrosetti Forum on the shores of Lake Como, near Milan, Roubini said in an interview: “We are in a worse situation than we were in 2008. This time around we have fiscal austerity and banks that are being cautious.”

Read the rest here.

Watch the disturbing video here.

Federal authorities entered the warehouse brandishing automatic weapons. Employees were separated and interrogated. The Fed seized over half a million dollars of product.

What was the Obama Administration after? Weapons grade plutonium? Heroin? No…something much more sinister.

Guitar fingerboards.

In apparent effort to lose the musician vote, the Obama Administration has launched not one but TWO Kafkaesque raids on one of America’s iconic brands – Gibson guitars, makers of such classis instruments as the Les Paul, SG, ES-335 and the brand new Firebird X.

Read the rest here. It is well worth the read.

The U.S. economy is growing very slowly, just 0.4 percent in the first quarter, 1.3 percent in the second. And it might not do a whole better the rest of the year. That’s a problem. A recent study from the Federal Reserve finds that that since 1947, when two-quarter annualized real GDP growth falls below 2 percent, recession follows within a year 48 percent of the time. (And when year-over-year real GDP growth falls below 2 percent, recession follows within a year 70 percent of the time.

So while we may be in a recovery, it’s a fragile one, at best. In short, nothing can go wrong or we’ll end up back in recession. That’s a big reason everyone is so focused on Europe and its ongoing sovereign debt and banking troubles. And why problems at Bank of America cause flashbacks of 2008.

But what about the nasty storm making its way up the East Coast? What’s the potential it causes enough economic damage and disruption to nudge the American economy back into a downturn? Well, I suppose the worst-case scenario would be a direct strike on New York City. That would be pretty bad:

In the city, a hurricane’s storm surge would cause sudden, extensive flooding, submerging much of Lower Manhattan and crippling the subway system and tunnels.

The powerful winds would uproot thousands of trees, down power lines and send debris flying in all corners of the city. And those winds could shatter windows on skyscrapers, especially in the taller buildings that would bear the brunt of powerful gusts that occur at higher elevations. The canyons of Manhattan could magnify the winds, and would be a deadly place for anyone caught beneath the raining glass.

Other comparisons to Hurricane Katrina are hard to ignore. Katrina, the most costly natural disaster in U.S. history, caused insured losses of more than $40 billion in 2005. AIR Worldwide, a firm that models disaster scenarios for insurance companies, has said that a repeat of the Long Island Express would cost $33 billion if it happened today. In the most dire projections, a direct hit on New York City could cost upwards of $100 billion.

The impact would be felt long after flood waters recede. Coch predicts that the salt water in the subway would corrode the switches and cripple the system for months or years, and disable much of the communications infrastructure in Lower Manhattan. “In 1893, Wall Street was cut off from the rest of the country when the telegraph lines went down,” he said. “Imagine what would happen now when the fiber optic cable failed.”

Sounds a lot worse than Hurricane Katrina given the incredible importance of Manhattan to the U.S. and global economy. Tough to quantify, of course. But, for comparison purposes, here is a Congressional Research Service analysis of the economic impact of Katrina in 2005:

Read the rest here.