----------
From the WSJ editorial page:
St. Augustine at the Fed
Ben Bernanke delivers a political lecture.
Ben Bernanke's annual Jackson Hole policy speech on Friday—more hyped than Hurricane Irene—contained little news about monetary policy. But such is the Federal Reserve Chairman's influence among the Wall Street-media establishment that his speech is being celebrated as a rebuke of Congress for its fiscal drama. He should have stuck to his day job.
"The country could be well served by a better process for making fiscal decisions," Mr. Bernanke declared. "The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses."
... Senate Democrat Chuck Schumer "read between the lines of the Chairman's remarks" that "Republicans are hurting the economy," and the White House more or less agreed.
Mr. Bernanke also lectured that "U.S. fiscal policy must be placed on a sustainable path," though not by cutting spending in the short-term. So the Fed chief joins the Keynesian queue of spending St. Augustines—Lord, make us fiscally chaste, but not yet....
The remarks also sound like an alibi for the Fed's own inability to midwife a faster recovery. Republicans have run the House for fewer than eight months. Mr. Bernanke has been Fed Chairman since February 2006 and has presided over 32 months of historically easy monetary policy in the name of spurring faster growth and avoiding deflation. What we have instead is a mild stagflation—1% GDP growth, 9.1% unemployment, and a commodity price bubble that has robbed middle-class real incomes.
Is this John Boehner's fault?
---------
Link: http://online.wsj.com/article/SB10001424053111904199404576536692576451976.html?mod=WSJ_Opinion_AboveLEFTTop
Monday, August 29, 2011
Friday, August 26, 2011
Warren Buffett makes $1.3 billion in one day
Warren Buffett may have earned $1.3 billion in one day on his $5 billion investment in Bank of America Corp...
“I’m sure Warren cut a pretty good deal,” said Linus Wilson, assistant professor of finance at the University of Louisiana at Lafayette...
Berkshire will receive 50,000 perpetual preferred shares with a liquidation value of $100,000 each, according to the statement. The preferred shares pay a dividend of 6 percent per year, and are redeemable at any time by Bank of America at a 5 percent premium. The dividends are cumulative, meaning Bank of America would have to catch up if it skipped any payments....
------------------------
Link: http://www.bloomberg.com/news/2011-08-25/buffett-s-bank-of-america-stakes-net-1-4-billion-in-profit-on-first-day.html
“I’m sure Warren cut a pretty good deal,” said Linus Wilson, assistant professor of finance at the University of Louisiana at Lafayette...
Berkshire will receive 50,000 perpetual preferred shares with a liquidation value of $100,000 each, according to the statement. The preferred shares pay a dividend of 6 percent per year, and are redeemable at any time by Bank of America at a 5 percent premium. The dividends are cumulative, meaning Bank of America would have to catch up if it skipped any payments....
------------------------
Link: http://www.bloomberg.com/news/2011-08-25/buffett-s-bank-of-america-stakes-net-1-4-billion-in-profit-on-first-day.html
Buffett to Host Obama Fundraiser in New York
From Bloomberg.com:
"Billionaire Warren Buffett plans to hold a Sept. 30 fundraiser in New York City to benefit President Barack Obama’s re-election bid, according to two Democratic officials not authorized to speak publicly about the event.
The fundraiser, reported earlier by the New York Post, will also feature former Obama economic adviser Austan Goolsbee.
Obama, who is preparing for a post-Labor Day speech about his plans for stimulating the economy, spoke with Buffett Aug. 22 by phone from his vacation on Martha’s Vineyard as he works to gather ideas on how to boost job creation and spur growth...
Buffett has primarily supported Democratic candidates, including giving the maximum allowed by law during the 2008 campaign to both Obama and the Democratic National Committee."
-----------------
Link: http://www.bloomberg.com/news/2011-08-25/warren-buffett-to-host-obama-fundraiser-in-new-york-on-sept-30.html
"Billionaire Warren Buffett plans to hold a Sept. 30 fundraiser in New York City to benefit President Barack Obama’s re-election bid, according to two Democratic officials not authorized to speak publicly about the event.
The fundraiser, reported earlier by the New York Post, will also feature former Obama economic adviser Austan Goolsbee.
Obama, who is preparing for a post-Labor Day speech about his plans for stimulating the economy, spoke with Buffett Aug. 22 by phone from his vacation on Martha’s Vineyard as he works to gather ideas on how to boost job creation and spur growth...
Buffett has primarily supported Democratic candidates, including giving the maximum allowed by law during the 2008 campaign to both Obama and the Democratic National Committee."
-----------------
Link: http://www.bloomberg.com/news/2011-08-25/warren-buffett-to-host-obama-fundraiser-in-new-york-on-sept-30.html
Tuesday, August 23, 2011
Why Software Is Eating The World
From Marc Andreeson writing for WSJ.com:
"This week, Hewlett-Packard (where I am on the board) announced that it is exploring jettisoning its struggling PC business in favor of investing more heavily in software, where it sees better potential for growth. Meanwhile, Google plans to buy up the cellphone handset maker Motorola Mobility. Both moves surprised the tech world. But both moves are also in line with a trend I've observed, one that makes me optimistic about the future growth of the American and world economies, despite the recent turmoil in the stock market.
In short, software is eating the world...
...too much of the debate is still around financial valuation, as opposed to the underlying intrinsic value of the best of Silicon Valley's new companies. My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy...
Why is this happening now?
Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale....
Companies in every industry need to assume that a software revolution is coming. This includes even industries that are software-based today. Great incumbent software companies like Oracle and Microsoft are increasingly threatened with irrelevance by new software offerings like Salesforce.com and Android (especially in a world where Google owns a major handset maker).
In some industries, particularly those with a heavy real-world component such as oil and gas, the software revolution is primarily an opportunity for incumbents. But in many industries, new software ideas will result in the rise of new Silicon Valley-style start-ups that invade existing industries with impunity. Over the next 10 years, the battles between incumbents and software-powered insurgents will be epic. Joseph Schumpeter, the economist who coined the term "creative destruction," would be proud...."
--------
Link: http://online.wsj.com/article/SB10001424053111903480904576512250915629460.html?mod=WSJ_hp_mostpop_read
"This week, Hewlett-Packard (where I am on the board) announced that it is exploring jettisoning its struggling PC business in favor of investing more heavily in software, where it sees better potential for growth. Meanwhile, Google plans to buy up the cellphone handset maker Motorola Mobility. Both moves surprised the tech world. But both moves are also in line with a trend I've observed, one that makes me optimistic about the future growth of the American and world economies, despite the recent turmoil in the stock market.
In short, software is eating the world...
...too much of the debate is still around financial valuation, as opposed to the underlying intrinsic value of the best of Silicon Valley's new companies. My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy...
Why is this happening now?
Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale....
Companies in every industry need to assume that a software revolution is coming. This includes even industries that are software-based today. Great incumbent software companies like Oracle and Microsoft are increasingly threatened with irrelevance by new software offerings like Salesforce.com and Android (especially in a world where Google owns a major handset maker).
In some industries, particularly those with a heavy real-world component such as oil and gas, the software revolution is primarily an opportunity for incumbents. But in many industries, new software ideas will result in the rise of new Silicon Valley-style start-ups that invade existing industries with impunity. Over the next 10 years, the battles between incumbents and software-powered insurgents will be epic. Joseph Schumpeter, the economist who coined the term "creative destruction," would be proud...."
--------
Link: http://online.wsj.com/article/SB10001424053111903480904576512250915629460.html?mod=WSJ_hp_mostpop_read
Monday, August 22, 2011
Wall Street Aristocracy Got $1.2 Trillion
From Bloomberg:
"...The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.
Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.
“These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.”
It wasn’t just American finance. Almost half of the Fed’s top 30 borrowers, measured by peak balances, were European firms..."
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Link: http://www.bloomberg.com/news/2011-08-21/wall-street-aristocracy-got-1-2-trillion-in-fed-s-secret-loans.html
"...The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.
Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.
“These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.”
It wasn’t just American finance. Almost half of the Fed’s top 30 borrowers, measured by peak balances, were European firms..."
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Link: http://www.bloomberg.com/news/2011-08-21/wall-street-aristocracy-got-1-2-trillion-in-fed-s-secret-loans.html
Monday, August 15, 2011
Will "more of the same" help now?
-------------
From Gretchen Morgenson in her column at the NYTimes.com:
"...The Fed has spent several years trying to kick-start the economy with low rates and other policies, with little success. Which raises this question: Will more of the same help now?
Among the doubters is Thomas M. Hoenig, the soon-to-be former president of the Federal Reserve Bank of Kansas City...
Mr. Hoenig has been pretty much alone among Fed presidents in publicly calling to break up large banks that are too big to succeed.
“Extremely powerful institutions, both financially and politically, undermine the long-term strength of our system and make us look like a financial oligarchy,” he told me. This view, of course, receives little applause in Washington and on Wall Street...
Mr. Hoenig’s prescription was to bar institutions that engage in risky business from offering government-backed deposits and to minimize their access to emergency Fed loans. Although he has been vindicated in this view, big bankers howled and regulators yawned at the time.
“I was trying to point out that these kinds of activities are beyond management’s control,” he recalled, “and that if you want to do this, you cannot have the taxpayers subsidizing it.”
-------------
Link: http://www.nytimes.com/2011/08/14/business/kansas-city-fed-president-defies-conventional-wisdom.html?_r=1&ref=gretchenmorgenson
From Gretchen Morgenson in her column at the NYTimes.com:
"...The Fed has spent several years trying to kick-start the economy with low rates and other policies, with little success. Which raises this question: Will more of the same help now?
Among the doubters is Thomas M. Hoenig, the soon-to-be former president of the Federal Reserve Bank of Kansas City...
Mr. Hoenig has been pretty much alone among Fed presidents in publicly calling to break up large banks that are too big to succeed.
“Extremely powerful institutions, both financially and politically, undermine the long-term strength of our system and make us look like a financial oligarchy,” he told me. This view, of course, receives little applause in Washington and on Wall Street...
Mr. Hoenig’s prescription was to bar institutions that engage in risky business from offering government-backed deposits and to minimize their access to emergency Fed loans. Although he has been vindicated in this view, big bankers howled and regulators yawned at the time.
“I was trying to point out that these kinds of activities are beyond management’s control,” he recalled, “and that if you want to do this, you cannot have the taxpayers subsidizing it.”
-------------
Link: http://www.nytimes.com/2011/08/14/business/kansas-city-fed-president-defies-conventional-wisdom.html?_r=1&ref=gretchenmorgenson
Sunday, August 14, 2011
NYT: The Mutual Fund Merry-Go-Round
------------
From David Swensen, Chief Investment Officer at Yale University, writing online for the New York Times:
"...Too often, investors believe that mutual funds provide a safe haven, placing a misguided trust in brokers, advisers and fund managers. In fact, the industry has a history of delivering inferior results to investors, and its regulators do not provide effective oversight.
The companies that manage for-profit mutual funds face a fundamental conflict between producing profits for their owners and generating superior returns for their investors. In general, these companies spend lavishly on marketing campaigns, gather copious amounts of assets — and invest poorly. For decades, investors suffered below-market returns even as mutual fund management company owners enjoyed market-beating results. Profits trumped the duty to serve investors..."
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Link: http://www.nytimes.com/2011/08/14/opinion/sunday/the-mutual-fund-merry-go-round.html?_r=1&adxnnl=1&hpw=&adxnnlx=1313323210-Ns2dHZcS1dzqN3FqHp8eAQ
From David Swensen, Chief Investment Officer at Yale University, writing online for the New York Times:
"...Too often, investors believe that mutual funds provide a safe haven, placing a misguided trust in brokers, advisers and fund managers. In fact, the industry has a history of delivering inferior results to investors, and its regulators do not provide effective oversight.
The companies that manage for-profit mutual funds face a fundamental conflict between producing profits for their owners and generating superior returns for their investors. In general, these companies spend lavishly on marketing campaigns, gather copious amounts of assets — and invest poorly. For decades, investors suffered below-market returns even as mutual fund management company owners enjoyed market-beating results. Profits trumped the duty to serve investors..."
----------
Link: http://www.nytimes.com/2011/08/14/opinion/sunday/the-mutual-fund-merry-go-round.html?_r=1&adxnnl=1&hpw=&adxnnlx=1313323210-Ns2dHZcS1dzqN3FqHp8eAQ
Thursday, August 11, 2011
Mean Street: Why I’m Still Buying Stocks
Evan Newmark online at the WSJ.com:
"With the Dow down 10% over the last five sessions, some of you are probably wondering whether I’m still crazy enough to be buying stocks.
You know the answer. Of course I am.
Call me naïve, call me delusional. But I bought last Thursday and last Monday. I bought again yesterday — and if the market heads lower today, I’ll probably buy once more.
No, I’m not ignorant of America’s stumbling economy, France’s impending S&P downgrade or Wall Street’s sundry woes.
It’s just that U.S. large-cap stocks are already pricing in lots and lots of bad news. To be comfortable buying stocks at this level, I only have to be less pessimistic about future long-term corporate earnings than all the panicky sellers.
And that’s easy...
Nearly two-thirds of the Dow’s 30 stocks today will give you a dividend yield greater than the current yield on the 10-year Treasury. This list doesn’t just include quasi-utilities like Verizon or AT&T that yield a stunning 6%. At under $20 a share, Intel yields over 4% and trades with a single-digit P/E.
Are the attractive P/E multiples and solid yields in U.S. large caps a guarantee that these stocks can’t go lower? No, of course not.
Didn’t the collapse of Lehman and the recent S&P downgrade of the U.S. teach you anything? When it comes to investing, there are no absolute certainties, no guarantees. No investor has been able to repeatedly pick stock market tops and bottoms.
That’s why I stagger both my stock purchases and sales over weeks or months. You will never get it absolutely right. The best you can do is keep your wits about you when everybody else is losing theirs.
Time and time again, history has shown that investors who buy when others are frantically selling tend to make a lot more money..."
-----------------
Link: http://blogs.wsj.com/deals/2011/08/11/mean-street-why-im-still-buying-stocks/
"With the Dow down 10% over the last five sessions, some of you are probably wondering whether I’m still crazy enough to be buying stocks.
You know the answer. Of course I am.
Call me naïve, call me delusional. But I bought last Thursday and last Monday. I bought again yesterday — and if the market heads lower today, I’ll probably buy once more.
No, I’m not ignorant of America’s stumbling economy, France’s impending S&P downgrade or Wall Street’s sundry woes.
It’s just that U.S. large-cap stocks are already pricing in lots and lots of bad news. To be comfortable buying stocks at this level, I only have to be less pessimistic about future long-term corporate earnings than all the panicky sellers.
And that’s easy...
Nearly two-thirds of the Dow’s 30 stocks today will give you a dividend yield greater than the current yield on the 10-year Treasury. This list doesn’t just include quasi-utilities like Verizon or AT&T that yield a stunning 6%. At under $20 a share, Intel yields over 4% and trades with a single-digit P/E.
Are the attractive P/E multiples and solid yields in U.S. large caps a guarantee that these stocks can’t go lower? No, of course not.
Didn’t the collapse of Lehman and the recent S&P downgrade of the U.S. teach you anything? When it comes to investing, there are no absolute certainties, no guarantees. No investor has been able to repeatedly pick stock market tops and bottoms.
That’s why I stagger both my stock purchases and sales over weeks or months. You will never get it absolutely right. The best you can do is keep your wits about you when everybody else is losing theirs.
Time and time again, history has shown that investors who buy when others are frantically selling tend to make a lot more money..."
-----------------
Link: http://blogs.wsj.com/deals/2011/08/11/mean-street-why-im-still-buying-stocks/
Tuesday, August 9, 2011
"Why government cuts won't hurt growth"
------------
From Shawn Tully at Fortune.com:
"S&P has a point: We need to cut more spending."
"...the Keynesian argument that lower government spending automatically hampers GDP growth... is far from the sure thing its champions keep trumpeting. Many eminent economists, from Eugene Fama of the University of Chicago to Allan Meltzer of Carnegie Mellon, take a totally different view.
... the utter failure of the $862 billion "stimulus" to produce a robust recovery should encourage Americans to listen carefully to the view that more spending did little or nothing to raise GDP in the past two years....
"It's crucial to understand the logic behind the "spending-equals-growth" argument... Keynesians believe in something called the "multiplier effect."
"...for example, if new outlays rise by $1 trillion, and the multiplier effect is 1.2 ... GDP will jump by an extra $1.2 trillion. In that scenario, Americans can have more teachers, solar energy subsidies and bridges without sacrificing a dime in corporate investments or consumer spending.
"But that math could be bunk...
"The stimulus skeptics ... argue that the multiplier doesn't exist, and that by simple accounting, every dollar in government spending must reduce another part of GDP by an equal amount, resulting in a wash.
"The money you lend the government has to come from somewhere," says Cochrane. "The stimulus is just moving the same money around."
...The second group of economists... acknowledge that higher borrowing and outlays may temporarily raise growth. But they claim that the immediate bump in output is far weaker than its advocates maintain, and that the longer-term effects of the big borrowing and spending are extremely damaging.
..."The stimulus and multiplier effect were way oversold... Germany and Britain are cutting spending, and they're doing better than we are."
...The skeptics are an impressive group, and they deserve a prominent place in the debate... why hasn't all the spending resulted in better growth and more jobs?"
------------
Link: http://finance.fortune.cnn.com/2011/08/08/why-government-cuts-wont-hurt-growth/
From Shawn Tully at Fortune.com:
"S&P has a point: We need to cut more spending."
"...the Keynesian argument that lower government spending automatically hampers GDP growth... is far from the sure thing its champions keep trumpeting. Many eminent economists, from Eugene Fama of the University of Chicago to Allan Meltzer of Carnegie Mellon, take a totally different view.
... the utter failure of the $862 billion "stimulus" to produce a robust recovery should encourage Americans to listen carefully to the view that more spending did little or nothing to raise GDP in the past two years....
"It's crucial to understand the logic behind the "spending-equals-growth" argument... Keynesians believe in something called the "multiplier effect."
"...for example, if new outlays rise by $1 trillion, and the multiplier effect is 1.2 ... GDP will jump by an extra $1.2 trillion. In that scenario, Americans can have more teachers, solar energy subsidies and bridges without sacrificing a dime in corporate investments or consumer spending.
"But that math could be bunk...
"The stimulus skeptics ... argue that the multiplier doesn't exist, and that by simple accounting, every dollar in government spending must reduce another part of GDP by an equal amount, resulting in a wash.
"The money you lend the government has to come from somewhere," says Cochrane. "The stimulus is just moving the same money around."
...The second group of economists... acknowledge that higher borrowing and outlays may temporarily raise growth. But they claim that the immediate bump in output is far weaker than its advocates maintain, and that the longer-term effects of the big borrowing and spending are extremely damaging.
..."The stimulus and multiplier effect were way oversold... Germany and Britain are cutting spending, and they're doing better than we are."
...The skeptics are an impressive group, and they deserve a prominent place in the debate... why hasn't all the spending resulted in better growth and more jobs?"
------------
Link: http://finance.fortune.cnn.com/2011/08/08/why-government-cuts-wont-hurt-growth/
Friday, August 5, 2011
Oh, Master of the Online Media! Enlighten Us! Teach Us How Intellectually Primitive We Are!
From Slate, where genius evolves...just pay attention because everyone there is smarter than you:
------------------------------------
"It is hard to remember a more dismal moment in American politics. The debt-ceiling crisis and the agreement that ended it point to deep dysfunction in our system. In a variety of ways, the episode portends continued short-term economic misery and long-term national decline. It's as if the United States chose at the last minute not to commit financial suicide—but only out of preference for a slower, more excruciating form of self-destruction.
President Obama is trying to push a jobs agenda. But for the federal government to spur growth or create jobs, it has to spend additional money...
[Republicans] believe that the 2009 stimulus bill, which has prevented an even worse economy over the past two years, is actually responsible for the current weakness...
are simply intellectual primitives who reject modern economics on the same basis that they reject Darwin and climate science..
We now also understand that we're not going to make meaningful investments in our economic future... for the same reason [we have] failed at sensible economic management: because the Tea Party has a veto...
At the level of political culture, we have learned some other sobering lessons: that compromise is dead and that there's no point trying to explain complicated matters to the American people..."
----------------------------
Oh, Master! Tell us more! Tell us more, Master!!!!
---------------------------
"...A Congress dominated by mindless cannibals is now feasting on a supine president"
--------------------------
Get the Full Catechism Lesson at: http://www.slate.com/id/2300840/
"The site, which is owned by The Washington Post Company, does not charge for access and is supported by advertising revenues."
------------------------------------
the big idea: The thinking behind the news.
Lessons of the Crisis
"there's no point in explaining complicated matters to the American people."
"It is hard to remember a more dismal moment in American politics. The debt-ceiling crisis and the agreement that ended it point to deep dysfunction in our system. In a variety of ways, the episode portends continued short-term economic misery and long-term national decline. It's as if the United States chose at the last minute not to commit financial suicide—but only out of preference for a slower, more excruciating form of self-destruction.
President Obama is trying to push a jobs agenda. But for the federal government to spur growth or create jobs, it has to spend additional money...
[Republicans] believe that the 2009 stimulus bill, which has prevented an even worse economy over the past two years, is actually responsible for the current weakness...
are simply intellectual primitives who reject modern economics on the same basis that they reject Darwin and climate science..
We now also understand that we're not going to make meaningful investments in our economic future... for the same reason [we have] failed at sensible economic management: because the Tea Party has a veto...
At the level of political culture, we have learned some other sobering lessons: that compromise is dead and that there's no point trying to explain complicated matters to the American people..."
----------------------------
Oh, Master! Tell us more! Tell us more, Master!!!!
---------------------------
"...A Congress dominated by mindless cannibals is now feasting on a supine president"
 |
| Responding to the dinner bell. |
--------------------------
Get the Full Catechism Lesson at: http://www.slate.com/id/2300840/
"The site, which is owned by The Washington Post Company, does not charge for access and is supported by advertising revenues."
Thursday, August 4, 2011
Bailout Buddies Stay In Touch! BFF!!
From the Wall Street Journal online:
How White House Wooed Wall Street in Debt Debate
"Often at odds since the financial crisis, banks and the White House found themselves on the same side in recent weeks as they worked to back a compromise that would fend off a default by the U.S. government. White House Chief of Staff Bill Daley even tried to enlist the help of his former employer, J.P. Morgan Chase & Co., as part of a final push to get a deal done in Congress...
The message from administration officials: contact key senators and congressman in both parties to tell them that an agreement was crucial for business confidence and the economy. Last Thursday, banks sent an open letter to President Barack Obama and Congress, urging compromise...
Both sides have much to gain from a thaw: President Obama is courting contributors as he prepares for a re-election run next year, while the banks are seeking leverage with regulators implementing last year's Dodd-Frank financial-overhaul law.
Some of the biggest banks—J.P. Morgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc.—are negotiating with state and federal officials over what is expected to be a multibillion-dollar tab for their mortgage-foreclosure missteps...."
--------
So, do you have your investments with a charming representative of one these wonderful banks? There is a better way to invest outside of the expensive advice sphere of banks or brokerage or mutual fund companies or planners or advisers.
Discover a direct, honest way to cut and keep almost all of your costs. Over time, keep extra thousands, tens of thousands, and hundreds of thousands of dollars in YOUR ACCOUNTS. We teach an easy to follow way you can do it yourself anywhere you invest.
--------
Link for WSJ article: http://online.wsj.com/article/SB10001424053111903885604576486613348006704.html
How White House Wooed Wall Street in Debt Debate
"Often at odds since the financial crisis, banks and the White House found themselves on the same side in recent weeks as they worked to back a compromise that would fend off a default by the U.S. government. White House Chief of Staff Bill Daley even tried to enlist the help of his former employer, J.P. Morgan Chase & Co., as part of a final push to get a deal done in Congress...
The message from administration officials: contact key senators and congressman in both parties to tell them that an agreement was crucial for business confidence and the economy. Last Thursday, banks sent an open letter to President Barack Obama and Congress, urging compromise...
Both sides have much to gain from a thaw: President Obama is courting contributors as he prepares for a re-election run next year, while the banks are seeking leverage with regulators implementing last year's Dodd-Frank financial-overhaul law.
Some of the biggest banks—J.P. Morgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc.—are negotiating with state and federal officials over what is expected to be a multibillion-dollar tab for their mortgage-foreclosure missteps...."
--------
So, do you have your investments with a charming representative of one these wonderful banks? There is a better way to invest outside of the expensive advice sphere of banks or brokerage or mutual fund companies or planners or advisers.
Discover a direct, honest way to cut and keep almost all of your costs. Over time, keep extra thousands, tens of thousands, and hundreds of thousands of dollars in YOUR ACCOUNTS. We teach an easy to follow way you can do it yourself anywhere you invest.
--------
Link for WSJ article: http://online.wsj.com/article/SB10001424053111903885604576486613348006704.html
Tuesday, August 2, 2011
Fake "Good News" in Detroit Free Press
Phony good news? Yes, jobs are being added. But an 11 year high? The facts presented in the article simply don't support the conclusion of the headline.
--------
Headline: "Building group: Metro Detroit construction jobs at 11-year high"
Opening: "In a glimmer of good news on the economy, a major building group, the Associated General Contractors, said today that construction jobs have reached an 11-year high in metro Detroit.
The metro area added 1,800 construction jobs in the 12 months ending June 30, AGC said....“From a construction point of view, it looks like this area’s long slump has finally come to an end.”
Final paragraph: "Prior to the real estate crash, Michigan construction firms employed around 190,000 workers. That dipped to under 120,000 by June 2010, but has climbed back to around 130,000 today, according to last month’s report from the Michigan Department of Technology, Management & Budget."
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WHOA! Read those totals: the "11-year high" is 60,000 jobs BELOW the peak before the real estate crash. This is typical of media outlets like this: cheer-leading with phony conclusions that mislead. Why would the editors make up phony conclusions? Good question.
Sure, we all know more jobs are a good thing. But the reality is starkly different, which makes me wonder if the Detroit Free Press editors consider themselves to belong to the "reality based" community. Maybe they think members of the tea parties are terrorists, too.
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Link to article: http://www.freep.com/article/20110802/BUSINESS06/110802033/Building-group-Metro-Detroit-construction-jobs-11-year-high-?odyssey=mod|newswell|text|FRONTPAGE|s
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Headline: "Building group: Metro Detroit construction jobs at 11-year high"
Opening: "In a glimmer of good news on the economy, a major building group, the Associated General Contractors, said today that construction jobs have reached an 11-year high in metro Detroit.
The metro area added 1,800 construction jobs in the 12 months ending June 30, AGC said....“From a construction point of view, it looks like this area’s long slump has finally come to an end.”
Final paragraph: "Prior to the real estate crash, Michigan construction firms employed around 190,000 workers. That dipped to under 120,000 by June 2010, but has climbed back to around 130,000 today, according to last month’s report from the Michigan Department of Technology, Management & Budget."
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WHOA! Read those totals: the "11-year high" is 60,000 jobs BELOW the peak before the real estate crash. This is typical of media outlets like this: cheer-leading with phony conclusions that mislead. Why would the editors make up phony conclusions? Good question.
Sure, we all know more jobs are a good thing. But the reality is starkly different, which makes me wonder if the Detroit Free Press editors consider themselves to belong to the "reality based" community. Maybe they think members of the tea parties are terrorists, too.
----------
Link to article: http://www.freep.com/article/20110802/BUSINESS06/110802033/Building-group-Metro-Detroit-construction-jobs-11-year-high-?odyssey=mod|newswell|text|FRONTPAGE|s
Monday, August 1, 2011
Biden: Tea partiers like 'terrorists'
Dear Vice President Biden:
If there are Terrorists in our midst, call Janet Napolitano at Homeland Security!
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From Politico:
"Vice President Joe Biden joined House Democrats in lashing tea party Republicans Monday, accusing them of having “acted like terrorists” in the fight over raising the nation’s debt limit.
Biden was agreeing with a line of argument made by Rep. Mike Doyle (D-Pa.) at a two-hour, closed-door Democratic Caucus meeting.
Biden, driven by his Democratic allies’ misgivings about the debt-limit deal, responded: “They have acted like terrorists,” according to several sources in the room..."
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VP Joe: call Homeland Security now! Wait. What did they do? Doyle said the terrorists "made it impossible to spend any money." Whose money?
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Link: http://www.politico.com/news/stories/0811/60421.html
If there are Terrorists in our midst, call Janet Napolitano at Homeland Security!
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From Politico:
"Vice President Joe Biden joined House Democrats in lashing tea party Republicans Monday, accusing them of having “acted like terrorists” in the fight over raising the nation’s debt limit.
Biden was agreeing with a line of argument made by Rep. Mike Doyle (D-Pa.) at a two-hour, closed-door Democratic Caucus meeting.
“We have negotiated with terrorists,” an angry Doyle said, according to sources in the room. “This small group of terrorists have made it impossible to spend any money.”
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VP Joe: call Homeland Security now! Wait. What did they do? Doyle said the terrorists "made it impossible to spend any money." Whose money?
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Link: http://www.politico.com/news/stories/0811/60421.html
Budget Deal a 'Joke,' Obama Is 'Incompetent': says Donald Trump: 'China is eating our lunch'
From CNBC:
'The apparent deal to extend the debt ceiling is "fantastic" for President Barack Obama but a "joke" for the rest of the country, real estate magnate Donald Trump said...
In all, Trump said in a CNBC interview, the weeks-long squabble is another black eye for America.
Beyond that, he said, Obama is incompetent.
'The apparent deal to extend the debt ceiling is "fantastic" for President Barack Obama but a "joke" for the rest of the country, real estate magnate Donald Trump said...
In all, Trump said in a CNBC interview, the weeks-long squabble is another black eye for America.
"Eventually you have to balance the budget. This is a long way from balancing the budget," he said. "This is just a joke. This is a down payment at most...
Beyond that, he said, Obama is incompetent.
"When I say incompetent, he's competent in getting elected and re-elected, but as far as running the country, he's incompetent," Trump said.
In addition to making another broadside at Obama, Trump repeated his worries that the US continues to fall behind China in terms of infrastructure, manufacturing and education.
"China is eating our lunch," he said. "Our country is going down and going down fast."'
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Link: http://www.cnbc.com/id/43969198
Paul Krugman: "The President Surrenders"
From the New York Times' Paul Krugman, a Nobel Laureate:
"A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong.
For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status...
Republicans will surely be emboldened by the way Mr. Obama keeps folding in the face of their threats. He surrendered last December, extending all the Bush tax cuts; he surrendered in the spring when they threatened to shut down the government; and he has now surrendered on a grand scale to raw extortion over the debt ceiling. Maybe it’s just me, but I see a pattern here...."
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Link: http://www.nytimes.com/2011/08/01/opinion/the-president-surrenders-on-debt-ceiling.html
"A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong.
For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status...
Republicans will surely be emboldened by the way Mr. Obama keeps folding in the face of their threats. He surrendered last December, extending all the Bush tax cuts; he surrendered in the spring when they threatened to shut down the government; and he has now surrendered on a grand scale to raw extortion over the debt ceiling. Maybe it’s just me, but I see a pattern here...."
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Link: http://www.nytimes.com/2011/08/01/opinion/the-president-surrenders-on-debt-ceiling.html
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