Saturday, July 30, 2011
For Investors, Cash Is King
From the Wall Street Journal online:
"Investors, companies and small savers are stashing billions of dollars in plain-vanilla bank accounts, taking cash out of short-term markets, in an effort to shield themselves from any market convulsions caused by Washington's stalemate over the debt ceiling.
The movement of money, akin to that during the peak of the 2008 financial crisis, is one more sign that skittishness is on the rise as officials in Washington remain deeply divided about ways to reduce the deficit and lift the debt ceiling ahead of the Aug. 2 deadline...
Corporations are following the same route.
Glass and ceramics maker Corning Inc. has moved about 16% of its cash, or $1 billion of its $6.4 billion pool, into non-interest-bearing bank accounts insured by the FDIC over the past few weeks for fear that the Treasury bond market and other financial markets become volatile... (p)reviously, Corning invested all of its cash in Treasurys and money market funds that invest in Treasury bonds and other government-backed debt that matured in three months or less.
The $1 billion covers about three months of Corning's bills..."
---------
Link: http://online.wsj.com/article/SB10001424053111903635604576476551562186880.html
Friday, July 29, 2011
This Just In! The Tea Party Faction in the House: "full blown terrorists."
--------
William Yeomans, an American University law professor, served as Sen. Ted Kennedy’s chief counsel on the Senate Judiciary Committee and as a Justice Department official:
"It has become commonplace to call the tea party faction in the House “hostage takers.” But they have now become full-blown terrorists.
They have joined the villains of American history who have been sufficiently craven to inflict massive harm on innocent victims to achieve their political goals. A strong America has always stood firm in the face of terrorism. That tradition is in jeopardy, as Congress and President Barack careen toward an uncertain outcome in the tea party- manufactured debt crisis.
As we stumble closer to Aug. 2, it has become clear that many in the tea party are willing to inflict massive harm on the American people to obtain their political objective of a severely shrunken federal government. Their persistence in rejecting compromise, even as the economic effects of the phony crisis they have created mount, has taken their radicalism beyond tough negotiating, beyond even hostage-taking.
As markets fall in anticipation that there may not be a timely resolution; as credit agencies issue dire warnings that the U.S. political system has become so dysfunctional that a credit downgrade may be inevitable, and as America looks weakened in the eyes of the world, the tea party’s hostage-taking has evolved into the intentional infliction of harm on innocent Americans to achieve a political objective – terrorism.
Terrorism is a tough term, but, unfortunately, it describes tea party tactics precisely..."
--------
Talk about profiling! With such terrorism in our midst, it sounds like the law professor needs Big Sis and the TSA to step up. Push granny and the little kids aside: let's get them tea party terrorists now!
--------
Link: http://www.politico.com/news/stories/0711/60202.html
William Yeomans, an American University law professor, served as Sen. Ted Kennedy’s chief counsel on the Senate Judiciary Committee and as a Justice Department official:
"It has become commonplace to call the tea party faction in the House “hostage takers.” But they have now become full-blown terrorists.
They have joined the villains of American history who have been sufficiently craven to inflict massive harm on innocent victims to achieve their political goals. A strong America has always stood firm in the face of terrorism. That tradition is in jeopardy, as Congress and President Barack careen toward an uncertain outcome in the tea party- manufactured debt crisis.
As we stumble closer to Aug. 2, it has become clear that many in the tea party are willing to inflict massive harm on the American people to obtain their political objective of a severely shrunken federal government. Their persistence in rejecting compromise, even as the economic effects of the phony crisis they have created mount, has taken their radicalism beyond tough negotiating, beyond even hostage-taking.
As markets fall in anticipation that there may not be a timely resolution; as credit agencies issue dire warnings that the U.S. political system has become so dysfunctional that a credit downgrade may be inevitable, and as America looks weakened in the eyes of the world, the tea party’s hostage-taking has evolved into the intentional infliction of harm on innocent Americans to achieve a political objective – terrorism.
Terrorism is a tough term, but, unfortunately, it describes tea party tactics precisely..."
--------
Talk about profiling! With such terrorism in our midst, it sounds like the law professor needs Big Sis and the TSA to step up. Push granny and the little kids aside: let's get them tea party terrorists now!
--------
Link: http://www.politico.com/news/stories/0711/60202.html
Good Business if You Can Get It
From the New York Times Dealbook:
"Evercore Partners is still playing in the big leagues.
The investment firm reported second-quarter revenue of $142 million, a 119 percent increase from the period a year earlier, and it posted a profit of $2.3 million, up from $117,000...
it has been a good year for Evercore, the M.&A. advisory specialty firm co-founded by Roger C. Altman, the Democratic power broker who served as deputy Treasury secretary under President Clinton....
Evercore has bolstered its advisory business in recent months...(b)ut adding experienced employees meant paying them well, and the firm gave out $101 million, or 71 percent of its revenue, as compensation this quarter, up from 70 percent in the period a year earlier...."
71% of revenue? These are Democratic power brokers?
-----------
Link: http://dealbook.nytimes.com/2011/07/28/evercore-posts-profit-of-2-3-million/
"Evercore Partners is still playing in the big leagues.
The investment firm reported second-quarter revenue of $142 million, a 119 percent increase from the period a year earlier, and it posted a profit of $2.3 million, up from $117,000...
it has been a good year for Evercore, the M.&A. advisory specialty firm co-founded by Roger C. Altman, the Democratic power broker who served as deputy Treasury secretary under President Clinton....
Evercore has bolstered its advisory business in recent months...(b)ut adding experienced employees meant paying them well, and the firm gave out $101 million, or 71 percent of its revenue, as compensation this quarter, up from 70 percent in the period a year earlier...."
71% of revenue? These are Democratic power brokers?
-----------
Link: http://dealbook.nytimes.com/2011/07/28/evercore-posts-profit-of-2-3-million/
U.S. GDP Grows Just 1.3% / 1st Quarter Revised DOWNWARD to just 0.4%
From the Wall Street Journal Online:
"The Commerce Department Friday said gross domestic product rose at an annualized seasonally adjusted rate of 1.3% in April through June, while first-quarter growth was revised down sharply to a 0.4% rate from the earlier estimate of a 1.9% gain. A big reason behind the downward revision in first-quarter growth was that the inventory buildup by companies was less than initially estimated, while ..."
Link: http://online.wsj.com/
"The Commerce Department Friday said gross domestic product rose at an annualized seasonally adjusted rate of 1.3% in April through June, while first-quarter growth was revised down sharply to a 0.4% rate from the earlier estimate of a 1.9% gain. A big reason behind the downward revision in first-quarter growth was that the inventory buildup by companies was less than initially estimated, while ..."
Link: http://online.wsj.com/
Thursday, July 28, 2011
Why the Debt Ceiling Debacle Is a Good Thing
FROM the Mean Street blog by Evan Newmark, Wall Street Journal Online:
"Thank goodness for the utter mess our politicians are making down in Washington.
It’s not only good summer entertainment. It’s also giving the American public the one thing it needs most: an education on just how screwed up we’ve become, both in our nation’s finances and in our collective mindset....
The debt-ceiling “crisis” is exactly what America needs as our $14 trillion debt careens towards the point of no return.
The dueling Obama and Boehner press conferences, the red-faced screaming on talk radio and cable TV, S&P’s threat to cut America’s AAA rating, the stock-market jitters, the family fights over whether Grandpa really needs the Medicare-funded knee-replacement surgery – bring it on!
The bigger and more intense the debate, the better. How else will America ever come face-to-face with the hard choices it has to make?
After all, millions of Americans are still living under the illusion that there is some magical Social Security lock-box to fund their retirement or that they’re only taking out of Medicare what they paid in or that some new taxes on the wealthy will solve all our fiscal woes....
As we head into this weekend, ask yourself the following: Would I rather have my politicians fighting each other in Washington over the debt-ceiling today, or my neighbors fighting each other in the streets when the nation goes bankrupt five years from now?
That’s why this debt-ceiling mess is a very good thing, indeed."
----------
Link:
http://blogs.wsj.com/deals/2011/07/28/mean-street-why-the-debt-ceiling-debacle-is-a-good-thing/
"Thank goodness for the utter mess our politicians are making down in Washington.
It’s not only good summer entertainment. It’s also giving the American public the one thing it needs most: an education on just how screwed up we’ve become, both in our nation’s finances and in our collective mindset....
The debt-ceiling “crisis” is exactly what America needs as our $14 trillion debt careens towards the point of no return.
The dueling Obama and Boehner press conferences, the red-faced screaming on talk radio and cable TV, S&P’s threat to cut America’s AAA rating, the stock-market jitters, the family fights over whether Grandpa really needs the Medicare-funded knee-replacement surgery – bring it on!
The bigger and more intense the debate, the better. How else will America ever come face-to-face with the hard choices it has to make?
After all, millions of Americans are still living under the illusion that there is some magical Social Security lock-box to fund their retirement or that they’re only taking out of Medicare what they paid in or that some new taxes on the wealthy will solve all our fiscal woes....
As we head into this weekend, ask yourself the following: Would I rather have my politicians fighting each other in Washington over the debt-ceiling today, or my neighbors fighting each other in the streets when the nation goes bankrupt five years from now?
That’s why this debt-ceiling mess is a very good thing, indeed."
----------
Link:
http://blogs.wsj.com/deals/2011/07/28/mean-street-why-the-debt-ceiling-debacle-is-a-good-thing/
Plan? Sure, we've got a plan
"White House press secretary Jay Carney said Thursday that President Obama’s debt ceiling plan is the best-known option at this point. There’s just one problem with that: No publicly available, detailed Obama plan exists....
What Carney was referring to is the negotiations Obama and House Speaker John Boehner were conducting behind closed doors. No written plan ever came out of those meetings, and the two political leaders never reached an agreement. Boehner went on to develop his own plan....
More confusion about what specifically White House officials are referring to when talking about Obama’s plan ensued later on Thursday. In a White House Twitter chat Thursday afternoon, Obama administration officials tweeted out a link to what they call the president’s debt ceiling plan. Instead of linking to the “Obama-Boehner” plan Carney referred to mere hours before, the link directs to an April 13 White House “Fiscal Responsibility” fact sheet. The fact sheet does not use the term “debt ceiling."
---------------
Link:
http://dailycaller.com/2011/07/28/where-is-the-plan-carney-says-obamas-is-the-best-known-debt-plan/
What Carney was referring to is the negotiations Obama and House Speaker John Boehner were conducting behind closed doors. No written plan ever came out of those meetings, and the two political leaders never reached an agreement. Boehner went on to develop his own plan....
More confusion about what specifically White House officials are referring to when talking about Obama’s plan ensued later on Thursday. In a White House Twitter chat Thursday afternoon, Obama administration officials tweeted out a link to what they call the president’s debt ceiling plan. Instead of linking to the “Obama-Boehner” plan Carney referred to mere hours before, the link directs to an April 13 White House “Fiscal Responsibility” fact sheet. The fact sheet does not use the term “debt ceiling."
---------------
Link:
http://dailycaller.com/2011/07/28/where-is-the-plan-carney-says-obamas-is-the-best-known-debt-plan/
Keith Hennessy: "Why I support the Boehner bill"
"It cuts spending and it doesn’t raise taxes. That is an improvement over current law.
There is nothing in the bill that I dislike. That’s a rarity.
It is better than the Reid bill, which is the next most likely alternative to become law if the Boehner bill fails.
It tees up this battle again in 4-6 months, providing another opportunity and keeping the pressure on to cut spending.
It creates a process that keeps our underlying fiscal policy problems front-and-center for the foreseeable future rather than punting them into 2013.
I can see no viable alternative strategy to enact a stronger bill."
-------
Full link: http://keithhennessey.com/2011/07/27/why-i-support-the-boehner-bill/
There is nothing in the bill that I dislike. That’s a rarity.
It is better than the Reid bill, which is the next most likely alternative to become law if the Boehner bill fails.
It tees up this battle again in 4-6 months, providing another opportunity and keeping the pressure on to cut spending.
It creates a process that keeps our underlying fiscal policy problems front-and-center for the foreseeable future rather than punting them into 2013.
I can see no viable alternative strategy to enact a stronger bill."
-------
Full link: http://keithhennessey.com/2011/07/27/why-i-support-the-boehner-bill/
Wednesday, July 20, 2011
The Debt Ceiling by Presidency
From the Washington Post:
Full link: http://www.washingtonpost.com/business/economy/who-raised-the-debt-ceiling/2011/07/14/gIQA7TIvEI_graphic.html
Full link: http://www.washingtonpost.com/business/economy/who-raised-the-debt-ceiling/2011/07/14/gIQA7TIvEI_graphic.html
Sunday, July 17, 2011
"Caution: Storm Approaching" Caroline Glick
Economic turmoil in the Middle East as Egypt is going broke and capital is fleeing:
"...Most of the news coming out about Egypt today emanates from Cairo's Tahrir Square. There the protesters continue to demand ousted president Hosni Mubarak's head on a platter alongside the skulls of his sons, business associates, advisors and everyone else who prospered under his rule....
But while easily accessible, the action at Tahrir Square is not Egypt's most important story. The most important, strategically consequential story is that Egypt is rapidly going broke. By the end of the year, the military dictatorship will likely not only default on Egypt's loans (but) will almost certainly be unable to feed the Egyptian people....
Egypt's foreign currency reserves are being washed away... the problem is capital flight... Egypt's wealthy and foreign investors are taking their money out of the country....
What this means is that in a few short months, Egypt will be unable to pay for its imports. And consequently, it will be unable to feed its people.
EGYPT IS far from alone. Take Syria. There too, capital is fleeing the country as the government rushes to quell the mass anti-regime protests...."
--------------------------
Full story: http://www.realclearpolitics.com/articles/2011/07/16/caution_storm_approaching_110607.html
"...Most of the news coming out about Egypt today emanates from Cairo's Tahrir Square. There the protesters continue to demand ousted president Hosni Mubarak's head on a platter alongside the skulls of his sons, business associates, advisors and everyone else who prospered under his rule....
But while easily accessible, the action at Tahrir Square is not Egypt's most important story. The most important, strategically consequential story is that Egypt is rapidly going broke. By the end of the year, the military dictatorship will likely not only default on Egypt's loans (but) will almost certainly be unable to feed the Egyptian people....
Egypt's foreign currency reserves are being washed away... the problem is capital flight... Egypt's wealthy and foreign investors are taking their money out of the country....
What this means is that in a few short months, Egypt will be unable to pay for its imports. And consequently, it will be unable to feed its people.
EGYPT IS far from alone. Take Syria. There too, capital is fleeing the country as the government rushes to quell the mass anti-regime protests...."
- What leadership do we have to respond to this approaching storm?
- Should we start apologizing and claim it is our fault?
- Will we push another "reset" button?
- Send more billions of dollars?
- How about offer our health care system to care for their poor?
--------------------------
Full story: http://www.realclearpolitics.com/articles/2011/07/16/caution_storm_approaching_110607.html
Saturday, July 16, 2011
Mean Street: Cantor and the Republicans Outbluff Obama
"... And from what I can see, the Republicans are schooling the Democrats in what brinksmanship is all about.
That’s not the conventional wisdom. Inside-the-beltway pundits will tell you that it’s exactly the other way around. The Republicans aren’t united, they say, they’re in disarray.
Please. That President Obama even has to sit in a room and get smarmy lectures from a lowly House Majority leader is a victory for the Republicans. So is the fact that Moody’s and S&P have put America’s AAA debt rating under review.
That’s why the president is so unhappy and why he stormed out of the room the other day.
Losing your cool is poor brinksmanship – and so is warning the other side, “Don’t call my bluff.” It shows everyone that you’ve lost control of the situation.
The trouble for the president is that he just has too much to lose by really going to the brink. Consider a scenario if August 2 arrives and he has to sit at his Oval Office desk and grimly explain the coming financial Armageddon to the nation.
For Obama, it would be like reading a confession of his own incompetence..."
-----------------
Full story: http://blogs.wsj.com/deals/2011/07/15/mean-street-cantor-and-the-republicans-outbluff-obama/
That’s not the conventional wisdom. Inside-the-beltway pundits will tell you that it’s exactly the other way around. The Republicans aren’t united, they say, they’re in disarray.
Please. That President Obama even has to sit in a room and get smarmy lectures from a lowly House Majority leader is a victory for the Republicans. So is the fact that Moody’s and S&P have put America’s AAA debt rating under review.
That’s why the president is so unhappy and why he stormed out of the room the other day.
Losing your cool is poor brinksmanship – and so is warning the other side, “Don’t call my bluff.” It shows everyone that you’ve lost control of the situation.
The trouble for the president is that he just has too much to lose by really going to the brink. Consider a scenario if August 2 arrives and he has to sit at his Oval Office desk and grimly explain the coming financial Armageddon to the nation.
For Obama, it would be like reading a confession of his own incompetence..."
-----------------
Full story: http://blogs.wsj.com/deals/2011/07/15/mean-street-cantor-and-the-republicans-outbluff-obama/
Gloomy consumers cast dark cloud over economy: Reuters
"U.S. consumer confidence hit a near 2-1/2 year low in early July and manufacturing output stalled in June, further frustrating expectations of a quick economic growth rebound in the second half of the year...
The reports were the latest in a series, including weak retail sales and employment, to suggest the anticipated step-up in growth in the second half of the year might not be as strong has initially thought...."
-------------
Full story: http://www.reuters.com/article/2011/07/15/us-usa-economy-prices-idUSTRE76E2LW20110715
The reports were the latest in a series, including weak retail sales and employment, to suggest the anticipated step-up in growth in the second half of the year might not be as strong has initially thought...."
-------------
Full story: http://www.reuters.com/article/2011/07/15/us-usa-economy-prices-idUSTRE76E2LW20110715
Subscribe to:
Posts (Atom)