In terms of owning inflation protected securities (TIPS), we find that at current price levels they offer absolutely NO protection against further increases in the US inflation rate. Rather, we believe that you should (at this point) own real assets such as commodities for protection or small cap stocks, which have proven to be a decent hedge against inflation historically.
Even after yesterday's pullback to $13.44, VIPSX is trading near ten year highs.
And Brett Arends, same article, thinks corporations used the borrowing to finance the stock buy-backs, which kind of puts the taint on both their stocks and their bonds:
The total [borrowing] at the end of 2007, at the peak of the so-called “credit bubble,” was just $6.7 trillion.
This borrowing spree has pushed overall gearing for nonfarm, nonfinancial corporates to hefty levels. The Fed says that U.S. nonfinancial corporates now have debt equal to 50% of their net worth. It’s near record levels for modern times. As recently as 2006, it was just 40%.
When a company borrows money to bolster its own stock price, it makes me wary of the bonds. When the executives aren’t even willing to invest their own money, it doesn’t exactly make me enthusiastic about the stock either.
Democrats say the $1.5 trillion to $2 trillion in spending cuts that the two sides have tentatively identified must be augmented by $400 billion in new tax revenue over the coming 10 years. That money would come by closing a range of tax breaks for hedge-fund managers, private jets and specific business sectors.
The ruling was by a three judge panel. The Reagan appointee voted against the healthcare mandate, while a Bush appointee and a Carter appointee voted for it, proving once again that W, who aimed to redefine conservatism in his own image, was no friend of the right.
Plaintiffs can appeal to the full, currently 15 member, 6th circuit court, or to the Supreme Court.
The Financial Crisis Inquiry Commission, under Phil Angelides who had a testy, partisan, op-ed in The Washington Post yesterday, in its report sought to blame Wall Street for leading the way to the housing bubble, not government policy as mediated through the likes of Fannie Mae.
Gretchen Morgenson of The New York Times has begged to differ, and Steven Malanga provides a timely and sympathetic review of a new book she co-authored which uncovers a major impetus to the housing bubble in the administration of none other than Bill Clinton, who took a weaker form of liberalism under George Herbert Walker Bush and ran with it:
RecklessEndangerment locates the origins of the crisis in the ironically named Federal Housing Enterprises Financial Safety and Soundness Act of 1992, which was supposed to protect taxpayers from big losses by Fannie and Freddie. That law pushed the institutions into affordable housing lending and prompted Fannie in particular to adopt a strategy to disarm critics by continually arguing that efforts to rein in the company's operations, such as requiring it to back its mortgage purchases with more capital, would only hurt the goal of expanding home ownership. "You should rejoice in Fannie Mae and Freddie Mac rather than fight them," Fannie's chief executive, James Johnson, told the New York Times.
In the wake of the 1992 legislation, Fannie Mae created the Housing Impact Advisory Council, an assembly consisting of low-income housing advocacy groups and mortgage lenders. Fannie Mae also began supplying grants to the housing groups, like ACORN, which a few years earlier had criticized the GSEs in the press as "strictly by-the-book" interpreters of underwriting standards whose young underwriters, "are not sensitized to the existence of redlining, be it racial or geographic." Now Fannie was singing a different, more cooperative tune, and its new council, Morgenson and Rosner write, evolved into "the centerpiece" of President Clinton's 1994 National Partners in Homeownership program, a "disastrous homeownership policy" that played a crucial role in inflating the housing bubble.
With TheNation pinning financial deregulation on Bill Clinton in recent days, liberalism's not having a good start to the summer.
If Bill Clinton were smart, he'd respond to all this by blaming Bush, or hope people still have enough money left to go to the beach and read trashy novels instead.
So says a detailed and insightful story at Bloomberg here by Jesse Drucker, showing how companies book earnings abroad through the Netherlands, Switzerland and Bermuda, lawfully, to minimize taxation both in the US and in high tax European countries.
The next time some pinhead US politician says he wants to take away your $88 billion mortgage interest deduction, tell him this corporate tax loss expenditure is just as big, and getting bigger.
When you consider that corporate taxes represent less than a third of the tax revenues which individual payers contribute to the federal government under current arrangements, there's plenty of room to rebalance that income portfolio more fairly.
Maybe we could start by rewarding companies for earning their money here instead of over there. If the Netherlands, Switzerland and Bermuda can do it, why can't we?
For flaky, we must throw out the much too tame traditional dictionary, and go to the Urban Dictionary, which nails it many times over:
An unreliable person. [See 'Obama' who hasn't improved one economic measure for black people, let alone anyone else, except for their government dependency]
A procrastinator. [See 'Obama' who dithered and dithered for three days after the Fruit of Kaboom bomber incident in route to Detroit because he and his administration were all on vacation, again. And how many months did it take him to decide to surge in Afghanistan?]
A careless or lazy person. [See 'Obama' who was content to let the House and the Senate duke it out over their versions of healthcare reform and provided no legislation of his own, or who let BP clean up the spill in the Gulf despite a long-standing contingency plan put in place by the government in the wake of the Exxon Valdez spill in Alaska]
Dishonest and doesn't keep to their word. [As in 'Obama' who didn't close Gitmo and didn't try the terrorists in civil court]
They'll tell you they're going to do one thing, and never do it. [See 'Obama' who promised to end the war in Iraq but our soldiers continue to die there]
They'll tell you that they'll meet you somewhere, and show up an hour late or don't show up at all. [As in 'Obama' who, the president of all the people, deliberately misses church, and patriotic or Christian holidays but never seems to miss a Muslim one]
Also spelled "flakey", or "flake" in the noun form. [Also spelled 'baked' in the adjectival form, as in the noun 'head']
She told me she would send me her pictures, but it's been 3 months and she hasn't sent me shit. She's flaky as hell.
Baby boomers, like Ben Shalom Bernanke, are such a self-loathing brood. First they put us all out of work, and then they pay us nothing on our savings:
[I]t is reasonable to call Bernanke the enemy of savers, because he is the enemy of savers. When one can’t earn anything over one year without risk, something is wrong. ...
Saving deserves a return. Let the Fed raise the Fed funds rate by 1%, and they will see that there is no harm to the banks, and little harm to the economy. Once you have 1% slope between twos and tens you have more than enough oomph to make the economy move. What, does the AARP have to bring a age discrimination lawsuit against the Federal Reserve to make this happen? The Fed is discriminating against the elderly.
Bill Fleckenstein, here, who advocates government guaranteed debt instruments maturing in a year or less, or FDIC insured cash accounts:
For the risks associated with [big money market funds], investors are getting paid a whopping one basis point (0.01%, or one one-hundredth of 1%). ...
The point in all of this is that because no one is being compensated no matter where they put their savings, there is really no point in taking any risk at all. Thus, it probably makes sense for those who can to shift their holdings to Treasury bills.
The hard fought war to subsidize the nuclear family has been lost from within. Dissolve the nuclear family through cultural decadence, and suddenly its members no longer value its advantages because they do not experience them. By choice.
The fool and his money soon are parted, one from the other.
Too stupid now to know how good they could have had it.
The loudest voices against the deduction stand to gain the most.
An astonishing number, as Tom Petruno points out here, because most of that cash is making next to nothing, and everyone who holds it is losing money because of inflation:
[I]nvestors who want absolute safety for their money are sticking with cash. Lots of cash.
Since 2008, millions of individuals and corporate investors have sharply boosted what they hold in cash accounts at banks. The total in basic savings and money market deposit accounts has reached a record $5.58 trillion, up from $5.09 trillion a year ago and $4.03 trillion three years ago, according to Federal Reserve data.
There's an additional $2.7 trillion sitting in money market mutual funds.
Most of the combined $8.3 trillion in those cash accounts is earning close to zero interest. That's a massive chunk of capital producing almost no return for its owners. To put it in perspective, the sum in cash accounts is 52% of the value of the entire U.S. stock market as measured by the Wilshire 5,000 index.
The act exempted from taxation the profits on the sale of a personal residence of up to $500,000 for married couples filing jointly and $250,000 for singles. This is for residences that were lived in for at least 2 years over the last 5 ... .
Real estate churning was off to the races, in concert with a deregulated financial industry, almost as if someone had flipped on a switch:
(source: Ritholtz/Steve Barry, The Big Picture, here)
Since May 2010, banks of eight countries with assets directly exposed to the PIIGS group of countries have made considerable progress in reducing that exposure, based on the figures reported here, now and previously:
IRELAND ........ down 65 percent to $ 31.7 billion
Netherlands ........ down 38 percent to $150.5 billion
Belgium ............... down 34 percent to $ 78.2 billion
PORTUGAL ........ down 30 percent to $ 45.2 billion
France ....... down 29 percent to $646.5 billion
Germany ..... down 24 percent to $532.7 billion
U.K. ............. down 17 percent to $347.2 billion
SPAIN............ down 15 percent to $126.8 billion.
Two additional countries, Austria ($36.8 billion exposed) and Switzerland ($56.4 billion exposed), join these eight in the top ten ranked by seriousness of exposure to PIIGS as a percentage of their bank assets. These are, in descending order:
UK, France, Portugal, Belgium, Germany, Netherlands, Austria, Spain, Switzerland and Ireland.
PIIGS ranked by the most owed to the banks of these ten countries are as follows:
Italy $780.3 billion
Spain $594.5 billion
Ireland $357.4 billion
Portugal $189.5 billion
Greece $130.0 billion.
Total owed by PIIGS to the banks of just these 10 countries: $2.052 trillion.
"When it comes to genuine, pro-capitalist job-creation, Obama is a saboteur, in the original meaning of the word. Its root is sabot, which is French for “wooden shoe,” and it was such shoes (clogs) that insecure, ignorant Dutch workers threw into the gears of new machines centuries ago, hoping to impede output gains and prevent job losses among colleagues. To sabotage something means to purposely weaken or destroy it through subversion, obstruction and disruption. That’s what public policy does today to those who might hire labor." -- Richard M. Salsman, here
"We've been inundated by inquiries on (our) exposure to French banks, to German banks, our direct exposure to Greece," said Peter Li, director in money markets at Northern Trust. "The profile of our portfolios has gotten very, very conservative."
Individual income tax revenues in 2008 were $1.03 trillion on AGI of $8.43 trillion, for an effective overall tax rate on the individual American taxpayer of . . . 12.25 percent, to which add social insurance taxes and excise taxes.
The bottom 50 percent of Americans enjoyed a much lower rate, however, than the top 50 percent: 2.59 percent vs. 13.65 percent.
The top 50 percent in 2008 made 7X as much as the bottom 50 percent, and paid 36X as much in taxes.
And liberals say the rich don't pay their fair share.
Steve Benen still expects us to believe that a reduction in the top rate from 39 percent to 35 percent, ten years ago, was a massive cut?
It would be nice if we could have some Republicans today actually proposing reducing top marginal tax rates to say, 28 percent. Now that would be a cut. But massive? From 70 percent, and 50 percent, yes (for a brief, shining moment under G.H.W. Bush, when 'Read My Lips. No New Taxes.' meant raising them anywhere north from 28 percent). But cutting taxes now anywhere south from 35 percent would be a massive cut? Puh-leeze.
Ofcourse things haven't improved since the Bush tax rates were extended, temporarily. Nothing has changed.
Unless of course the Republicans want to argue that the extension averted another Great Depression.
But only Democrats could say such things with a straight face.
An argument, here, with which we happily agree, except there's no discussion of the de-regulation of the homeowner, who, since 1997, has been able to forego taxes on up to $500,000 of gains on the sale of a principal residence every two years.
Smart couples plausibly have been able to milk this provision very profitably by flipping homes up to five times since then, until everything fell apart in 2008.
And don't forgot all those HELOCs whose capital was misallocated to financing automobile purchases, vacations, and other consumption not even remotely having to do with "home improvement."
The current housing debacle shows among other things, as Chris Whalen has suggested, how the entire post-war commitment to housing was a giant, civilizational misallocation of capital. More than anything, it was a failure of a sentimentality which developed in the wake of the de-moralization which forever destroyed the naivete of a nation. The de-regulation of the financial industry at the end of that road was only the logical conclusion of this process, its final outworking, not its cause.
“This is a systemic problem post-Lehman,” said Larry McDonald, author of ‘A Colossal Failure of Common Sense, the Lehman Brothers Inside Story.’ “After a near death experience with the capital markets closed for a record 18 months, they've raised cash now and are cautious. Imagine if you're a CFO and you went through this near death experience.”
Half of the country can't scrape together $2,000 for an emergency let alone for retirement. Meanwhile, $2,000 represents the median amount individuals have saved for retirement, meaning half of you have set aside less than that.
Well, $1,400 is how much state and local governments want to raise your taxes every year for 30 years to pay for government (usually union) employee pension promises.
That sounds fair. You have very little saved for retirement, but you should pay huge sums in taxes every year so some paper pusher can look forward to a life of ease and entertainment at your expense.
Perry ... entered the Texas House in 1984 as a Democrat. He won reelection as a Democrat in 1986 and 1988, the same year he served as state chairman of Al Gore’s presidential campaign.
Whether Perry left the Democratic Party or the Democratic Party left him, to borrow a phrase from Ronald Reagan, is immaterial. He perceived the long term trend of rising GOP political power in Texas. He also spotted an opportunity to capitalize on that trend by running in 1990 as a Republican against a nationally recognized figure of liberal Democratic politics — Agriculture Commissioner Jim Hightower.
The most potent of China's "weapons of job destruction" are an elaborate web of export subsidies; the blatant piracy of America's technologies and trade secrets; the counterfeiting of valuable brand names like Nike and Chevy; a cleverly manipulated and grossly undervalued currency; and the forced transfer of the technology of any American company wishing to operate on Chinese soil or sell into the Chinese market.
Each of these unfair trade practices is expressly prohibited both by World Trade Organization rules as well as rules established by the U.S. government, e.g., the Treasury Department has sanctions against currency manipulation (which, alas, the Obama administration refuses to use against China despite campaign promises to do so).
The only "candidate" who understood this was Trump. Navarro doesn't point to a replacement, but knows we need one.
Mother Jones is warning here of expanded Operation VIPR searches to come at train and subway stations, and ferry and bus terminals as TSA seeks expanded funding to add 12 VIPR teams to 25 existing units which already conduct 8,000 checks a year.
If they're doing that many already and we have to rely on stupid stories like this to learn about it, you know that the sheeple of the United States are just mutely complying, as they do at airports.
You know who you are, and you disgust me. Slaves all.
Just when I thought the headline "Payroll tax cuts rob the poor to feed the rich" meant that I was going to read a fine story by a liberal lamenting how the richest Americans, everyone making about $106,800 a year and "to infinity and beyond," don't pay Social Security taxes on all their income, I was met with this instead, that the present and proposed cuts in the payroll tax do nothing but finance the extension of the Bush tax cuts which, evidently, benefit only the rich:
Specifically, I'm talking about a new proposal to rob from Social Security to fund a continuing tax break for people who don't need Social Security — the wealthy. ...
It started back in December, when President Obama capitulated to the GOP on a budget deal by cutting the payroll tax, which funds Social Security. Advocates for the program pointed out then the shortcomings of this approach: It was targeted inefficiently and unfairly, skewing to the upper middle class and hurting lower-income families in comparison with the Making Work Pay tax credit it replaced.
Nevermind that the ten year Bush tax cut regime is responsible for the sorry state of affairs in which we presently find ourselves, with over 45 percent of the population paying nothing in federal income taxes, and a sizeable minority actually enjoying a negative tax rate whereby they receive government welfare through the tax code.
Nevermind that the latter is specifically designed as a subsidy to offset the regressivity of Social Security taxes on the poorest wage earners.
And nevermind that the future solvency of Social Security isn't really front and center in the author's mind, either.
What is Michael Hiltzik's greatest fear?
[O]nce you've cut a tax, it's ever harder to restore it.
You mean like abolishing the Bush tax cuts and thereby raising taxes on the poor by 50 percent?
Or how about this one?
In 2008, the top 14 million tax returns had AGIs totaling $3.8 trillion. If a liberal were really serious, he'd be advocating taxing all this income to make not just Social Security solvent, but Medicare, too. At 6.2 percent, we're talking an extra $236 billion of foregone tax revenue annually.
As tax loss expenditures go, it's the largest one I know of, by a long shot. But try getting people to focus on that one instead of my measly mortgage interest deduction, a tax loss expenditure of $88 billion.
The AP has a long and detailed accounting here of its investigation of radioactive contamination of groundwater from leaks at 75 percent of the US nuclear power sites where 104 aging reactors routinely get re-licensed by an industry-compliant US Nuclear Regulatory Commission, despite mounting evidence of problems associated with deteriorating underground infrastructure.
Perhaps most troubling is the fact that much of what is rusting underground would be depended upon to bring critical cooling water to the plants in an emergency, but they don't routinely test it or inspect it.
Meanwhile, 110,000 tons of cooling water contaminated with radioactivity has piled up at Fukushima in Japan and threatens to go to sea unless operators can get a de-contamination facility working properly.
Neither this nor our own problems with nuclear power have done much to move our feckless leaders in either party, while Barack Obama enjoys a very cozy relationship with GE head Jeff Immelt, whose company built many of the units in question, including the ones which have melted down in Japan.
In February, researchers unveiled a hummingbird drone, built by the firm AeroVironment for the secretive Defense Advanced Research Projects Agency, which can fly at 11 miles per hour and perch on a windowsill. But it is still a prototype. One of the smallest drones in use on the battlefield is the three-foot-long Raven, which troops in Afghanistan toss by hand like a model airplane to peer over the next hill.
Our politicians and bankers also view us as their property, indeed their slaves. It doesn't make much difference if it's your job that's theirs, or your mortgage, when the politicians are owned by the bankers.
We view them both as our tyrants, slaves also like us, but turned inside out.
And for someone who has concluded that the founders were playing swine off against each other in writing the constitution in the way that they did, the absence of the discussion of Attic tragedy is doubly disappointing.
A hole in his education, and that of his Republican rabbi, perhaps. No one knows everything, not even Hitch. Tragedy at 11.
The Fed may be slow to consider more stimulus for another reason: It still will be reinvesting the proceeds from its total $2.6-trillion securities portfolio in more Treasuries. And the central bank seems certain to keep short-term interest rates near zero for the time being. So in Fed parlance, policymakers remain very "accommodative" for growth.
Readers are left to wonder just how much money is involved when the Fed reinvests "the proceeds from its total $2.6-trillion securities portfolio."
According to the Federal Reserve, here, the earnings of the Fed in 2010 break down as follows:
The Reserve Banks reported comprehensive income of $81.7 billion in the year ended December 31, 2010, up from the year prior.
Total comprehensive income included interest earnings of $44.8 billion on the federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS) holdings,
$26.4 billion on holdings of U.S. Treasury securities,
and $3.5 billion on holdings of government-sponsored enterprise debt securities.
In addition, total comprehensive income included interest income of $3.5 billion on loans to depository institutions and others.
The consolidated LLCs contributed to the Reserve Banks’ comprehensive income, with net earnings of $7.6 billion for the year ended December 31, 2010. ...
Net earnings from the [System Open Market Account] portfolio were approximately $76.2 billion; most of the earnings were attributable to interest income on Treasury securities and federal agency and GSE MBS.
So compared to the QE2 program of $600 billion in purchases, the Fed's intention to reinvest the proceeds of about $75 billion annually in like instruments represents a continuation of the program, but scaled back by roughly 85 percent.
Various scenarios for the unwinding of the Fed's massive balance sheet are discussed here.
"People who come out of college with a degree in education and not a degree in a subject are severely handicapped in their capacity to teach effectively," Mr. McCullough argues. "Because they're often assigned to teach subjects about which they know little or nothing." The great teachers love what they're teaching, he says, and "you can't love something you don't know anymore than you can love someone you don't know."
Glass-Steagall separated investment banking from commercial banking and created the FDIC to protect the latter.
Nocera fails to note how the abolition of Glass-Steagall in our time left the FDIC in place to protect the former, which leaves taxpayers on the hook for the speculative failures of the trading desks of the big banks.
He poo-poos the Republican charge in 1933 that it all amounted to socialism. He's right. It's fascism, and it has gotten a whole lot worse.
Here was his advice on Monday, October 6, 2008 on The Today Show:
“Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”
The market free-fall had already begun after September 19 when this index was still above 1200. Selling two weeks into this crash was like trying to catch a falling knife. The time to bank one's profits had been after a pull-back from the highs over 1500, at the 1400 or even the 1300 level, not after a "mere" 100 point pull-back from 1200 to 1100. By then the time for action had already passed, over 400 points off the highs on the S and P 500.
"I know I have been castigated for having told people to sell stocks to raise money for anything they might need for five years, a solid attempt by me to really warn people who were counting on stocks for retirement and college tuition when we were at Dow 11,000 and Dow 10,300.
The assumption at the time was that things were bad -- like now -- but that it was worth buying and holding and 'riding it out.'
I didn't think so. I thought it was better to sidestep it and then come back when the coast was clear . . .." (source)
He's now laying out what a worst case scenario going forward would look like this time around, apparently in order to be able to say "I told you so" if we have another crash.
"During the fight over the financial reform bill, the administration consistently took the positions for which the banks were lobbying. Obama and his team were eager to weaken the “Volcker Rule" . . . [B]anks were given massive loans at or near 0 percent from the Fed . . . The administration sided with the banks in keeping the Consumer Financial Protection Agency inside the Federal Reserve . . .."
-- Eric Alterman, here, true believer, who nevertheless saves his real indignation for Wall Street
"You can't teach something that you don't have, so two men will never be able to show a woman how to be a woman."
"This [gay marriage] will be the beginning of our country sliding toward, it's a strong word, but anarchy."
"How can marriage be marriage for thousands of years and now all the sudden because a minority, an influential minority, has a push or agenda ... and totally reshapes something that was not founded in our country."
By his own admission he wants to spend the $100 billion tax loss expenditure on some big government fantasy of his own, instead of letting you keep it to raise a family in a safe environment of your own choosing where the kids don't have to be exposed to the low lifes who inhabit . . ..
Well, you get the idea.
These people have no use for families. Where the hell do you think the future country comes from?
And owe fealty to the family which turned its back on the Reagan revolution:
Huntsman is the second 2012 GOP White House hopeful to meet with the former president. Former Minnesota Gov. Tim Pawlenty visited with Bush at the former president's office in Houston, Texas a few weeks ago.
The meetings raise eyebrows, as many senior political advisers from both Bush administrations still don't have a candidate to support in the battle for the GOP nomination, especially with Indiana Gov. Mitch Daniel's announcement Sunday that he would not make a bid for the White House.
Like Obama, Hoover was the child of a broken home with an unconventional background. He was far more widely traveled than most Americans in his day, and his time overseas made him a globalist in his thinking in many ways. His wife (Lou Henry Hoover) was unusually well educated and assertive — at a time when few women went to college, she graduated from coeducational Stanford with a degree in geology. Hoover was an unconventional candidate who came into office on a tidal wave of support. Hoover, Secretary of Commerce during the Roaring Twenties, had never held elected office before winning the presidency. His campaign went deep into enemy territory, winning over solidly Democratic states in what was still the deep blue South including (like Obama) Florida, Virginia and North Carolina. Hoover was the great progressive hope of his day — he had supported Teddy Roosevelt’s 1912 Bull Moose campaign and was seen as much more forward looking and progressive than the party machine. He ran on the most diverse presidential ticket until Barack Obama’s own election in 2008; Hoover’s running mate, Kaw nation member Charles Curtis, was the first Native American and the first American with significant non-European ancestry to serve as Vice President of the United States. Hoover continued to burnish his diversity credentials in the White House; he was the first president since Theodore Roosevelt to invite an African American to a White House dinner and he wanted progress on Native American issues to be a hallmark of his administration. Hoover was also deeply concerned about the health of the middle class and the condition of the poor. He was an early backer of the long term, low interest mortgage that became the cornerstone of middle class finance, and he came into office hoping that prosperity would eliminate poverty in the United States.
The similarities in office are just as interesting, here.
As reported here by The Milwaukee Journal-Sentinel:
In its ruling Tuesday, the Supreme Court said it took up the case because the lower court had "usurped the legislative power which the Wisconsin Constitution grants exclusively to the Legislature."
The Democrats, the unions and courts in Wisconsin all behaved disgracefully in trying to stop the legislatively elected will of the people to find its expression through the due process which the Republicans followed.
ObamaCare, Medicare, and Social Security aren't the only back-breakers out there. The individual states have plenty of their own which they can't pay for, either. The whole country is stuck on stupid spending.
"[The Fed's] Treasury purchases reduce the quantity of risk free assets, forcing investors to buy riskier assets. Commodities are among those risky assets.
By monetizing the debt, the Federal Reserve is debasing paper money and investors are seeking for tangible assets, things that hurt when you drop them on your foot, as one colorful commentator put it."
It looks like in saving the banks from drowning, the Fed, the dollar, and the country are headed for Davy Jones' Locker.
From Michael Pento:
The truth is that without the ability to fully withdraw prior liquidity the Fed is incapable of significantly raising interest rates. After all, the Fed can't raise rates by fiat. It must sell assets to do so. Similarly, to support the dollar it must take money out of circulation, which is also accomplished by asset sales.
But the Fed's arsenal is no longer stocked with high grade weaponry.
As the rest makes plain, here, its stockpile is full of duds.
Even after a very long relationship, John Ziegler can't quite seem to put his finger on Sarah Palin's problem in the essay excerpted below. There's hardly a man alive who can diagnose the feminine disease, blinded as men are to women by their own passions, but Jonathan Swift came close: "The current of a female mind stops thus, and turns with ev'ry wind."
Ziegler didn't realize it, but he was on to it, here:
“Hi, John Ziegler, this is Governor Sarah Palin,” said the familiar voice on my phone message. There was a pause. “From Alaska,” she added. It’s typical of Sarah’s underappreciated sense of humor to pretend this needed to be clarified. “I just sat down and watched your movie about 9/11,” she went on, “and it’s unflippin’ believable”—”flippin’” is one of her favorite expressions—”I would like to talk with you about this next documentary. Could you give me a call?”
At this point, Sarah and I had met only once, but we were already developing a bizarre relationship. Over the almost three years that followed, we would often act like friends—while at other times she would act like she barely knew me.
Robert G. Wilmers, a defender of community banking, doesn't explicitly mention the abolition of Glass-Steagall, but he lays out some of the consequences of that nonetheless, one of which is that the FDIC is now on the hook for the mistakes of speculators, something it was never intended for:
In 1990, the six largest financial institutions accounted for 9 percent of all U.S. domestic deposits. As of Dec. 31, 2010, the six biggest banks accounted for 36 percent of deposits. ...
In 2010, the six largest bank holding companies generated $56.1 billion in trading revenue, or 74 percent of their $75.7 billion in pretax income. ...
The Big Six institutions earned more than 93 percent of the trading revenue generated by all American banks during the past two years. ...
The major Wall Street banks operate under the taxpayer-backed umbrella of the Federal Deposit Insurance Corp. and, as we saw in 2008, the Treasury Department and the Federal Reserve. To pay for the cost of such protection, legislators and regulators have forced thousands of Main Street banks like the one I run to absorb a larger, more expensive set of regulatory costs, including higher capital and liquidity requirements. ...
Regulators have failed to distinguish between trading activity and traditional banking, or to recognize that the activity of an institution, not its form, should be the proper focus of oversight.
New Rules Needed
Main Street banks are heavily regulated -- and have been for generations -- to ensure their safety, soundness and transparency. A new generation of regulation must now be applied to what has become a virtual casino. ...
Those financial institutions that engage in trading should live and die by the pursuit of their fortunes, rather than impose a burden on the whole economy.
It’s time to disentangle the trading of big financial institutions from their more traditional commercial banking operations and put an end to this unsafe business model.
Make sure to read his entire op-ed at Bloomberg, here.
I've predicted that lots of parts of Obamacare will not work the way they're expected to. But here's one I wouldn't have predicted: the high-risk pools, which were meant to tide people over until 2013, have signed up just 18,000 people as of March.
There were supposed to be millions of people who were uninsurable because of pre-existing conditions. We heard lengthy testimony about their terrible plight. I don't think it's too strong to say that this fear . . . was one of the main reasons offered for the health care overhaul.
Which just goes to show you that fear is a lousy reason to do anything, except run like hell from a bureaucrat wielding a butcher knife against your way of life.
The budgeted amount for the program was $5 billion to cover about 200,000 enrollees until ObamaCare kicks in in 2014, even though the Medicare actuary predicted there would be 400,000 enrollees (doesn't this tell us that we ought to wonder about everything else the Medicare actuary predicts?).
Now they're changing the rules to make it easier and cheaper to sign up for the high risk pools so the regime can say the program is a success.
Mormonism is particularly troubling . . . because Mormons believe in the idea of "continuing revelation." They may believe one thing today, and something else tomorrow. This is why Mormons have changed their views, for example, on marriage and race. Polygamy was once a key distinctive of the religion. Now, of course, it is not. Mormons once forbade blacks from leadership roles. Now they do not. What else will change?