Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Wed 03.10.2010
Stimulus or Sedative? By Thomas Sowell - GOP USA Abraham Lincoln once asked an audience how many legs a dog has, if you called the tail a leg? When the audience said "five," Lincoln corrected them, saying that the answer was four. "The fact that you call a tail a leg does not make it a leg." That same principle applies today. The fact that politicians call something a "stimulus" does not make it a stimulus. The fact that they call something a "jobs bill" does not mean there will be more jobs. What have been the actual consequences of all the hundreds of billions of dollars that the government has spent? The idea behind the spending is that it will cause investors to invest, lenders to lend and employers to employ.
The Albatross of Sovereign Debt Bob Chapman - TheInternationalForecaster.com Sovereign Debt hinders nation states, Interrogations for the Fed to answer, debt burdened California, Fed integrity in question, Gold still a good investment play, unemployment benefits for now, volatile swings in housing demand, Sovereign debt hangs like an albatross around the necks of too many countries. There are 17 medium-size to large countries that are close to, or are bankrupt. Many are being kept solvent by using two sets of books and by marking to model. As you know we expect these bankruptcies to take place by the end of 2011. That will be accomplished at meetings such as we saw in the 1970s at the Smithsonian, the Plaza Accord of 1985 and the Louvre Accord of 1987. There will be a realignment of currencies.
Jim Rogers Discusses Greece's Fiscal Woes, Euro
Beijing vows not to use U.S. debt for political gain By David M. Dickson - WashingtonTimes Rejects general's idea of 'dumping' bonds A top Chinese official said Tuesday that Beijing will not use its vast holdings of U.S. government debt for political gain, just a few days after a forecast projected that the U.S. national debt is on course to triple to $20 trillion over the next decade. China holds the world's largest cache of foreign exchange reserves, which soared more than $450 billion last year to reach $2.4 trillion at year's end. Concerns about Beijing's plans for its holdings have peaked in recent weeks after Chinese military officials suggested using that debt to pressure the United States in other policy areas. But a top Chinese state financial officer Tuesday rejected that approach.
Greece's crisis could presage America's By: TOM RAUM - AP via Washington Examiner Greece is a financial basket case, begging for international help. Is America heading down that same road? Many of the same risky financial practices that now imperil the Greeks were at the center of the all-too-recent U.S. meltdown. As with Greece, America's national debt has been growing by leaps and bounds over the past decade, to the point where it threatens to swamp overall economic output. And in the U.S., as in Greece, a large portion of that debt is owed to foreign investors.
US Economy is Some 11 Million Jobs Short of Full Employment By Bill Bonner - DailyReckoning.com.au If you don't read the newspapers you run the risk of missing something. Of course, if you do read them, you run the risk of catching something. Not much in the financial news worthy of comment this morning... The Dow gained $13. Gold lost $13. Nothing much to say about it... So we will comment on something beneath comment...something so low we have to dig down to find it...something so unworthy we hardly imagine we are mentioning it...something in the newspapers... We're talking, of course, about politics... The love-fest with politics is heating up. The drugs have been passed around. Now, the clothes are coming off...
N. Korea Says It Is Ready to 'Blow Up' U.S. AP - FOXNews SEOUL, South Korea — North Korea's army said Monday it is ready to "blow up" South Korea and the U.S., hours after the allies kicked off annual military drills that Pyongyang has slammed as a rehearsal for attack. South Korea and the U.S. — which normally dismiss such threats as rhetoric — began 11 days of drills across South Korea on Monday morning to rehearse how the U.S. would deploy in time of emergency on the Korean peninsula.
Buy Gold While Supplies Last, Says Fund Manager by Peter Gorenstein - TechTicker.com Lost in the headlines over the dollar's resurgence in 2010 is the fact gold is still rising in most worldwide currencies. It is also still faring well in dollar terms. Gold is trading at around $1,120 per ounce, up about $60 in the last month. Frank Holmes, CEO and CIO of U.S. Global Investors, a long time gold bull sees no reason for this trend to end. He tells Aaron in the accompanying clip, "there are many compelling factors both from a supply side and then from the demand side that looks like gold will trade higher."
Seven reasons to invest in gold By Bradley George and Daniel Sacks - Telegraph.co.uk Investec outline seven reasons why it believes that the price of gold will continue to rise. There are both headwinds and tailwinds influencing the gold price, but the positives combined with the degree of investment demand from wealthier investors – should outweigh the negatives. We believe this is likely to force a peak that is nearer $1,300 per ounce over the next six months, with $1,000 per ounce becoming the new long-term floor. In our view, the following factors are currently influencing the gold price in the medium to long-term.
Gold is in a Real Bull Market By Bill Bonner - Dailyreckoning.com.au The news yesterday pushed against us like a gentle wind. Pending house sales were bad. Consumer spending was good. Unemployment was bad. Manufacturing was good. The Dow rose 47 points. It has moved without much conviction for several weeks. It can't seem to make up its mind. We thought it had headed down decisively a few weeks ago...and then, it stabilized...and wandered about... Gold has more sense of destiny about it. It's been in a bull market for the last 10 years...and shows no sign of wanting to do anything else. It lost $11 yesterday, but still trades at $1,132...not that far from its all-time high.
Why gold is a commodity and a currency By Stewart Thomson - CommodityOnline.com Is gold trading as a commodity, a currency, or both? I believe the answer is: Mainly as a currency, but the fact that aprox 70% of mined gold usually goes into jewellery cannot be ignored. Another fact is that gold seasonals dictate a possible intermediate top in late December. This time it topped in early December. The gold price has been “ruled” by the massive head and shoulders pattern on the weekly chart (Gold Weekly Chart), so the usual late sept/early oct hard sell off not occurring is most likely a function of the action of two factors: a. The hedge fund momentum buying, trying to milk the technical chart pattern. b. The action of Barrick acting in the comex open market buying futures contracts to cover off their hedge position.
As Confidence Returns, Gold Will Rise MineWeb.net The Gold Report: John, in Investors Digest of Canada you recently said you're expecting gold to gain another 30% this year. John Embry: I would say at least 30%. I said that I thought it would be the best year to date. We've had nine years consecutive higher year-end prices and the best year in that span for a year's return was 31%. I think this will be the year that we exceed it in this, the 10th year of the bull market.
Warning Of A Gold Super Spike Janet Tavakoli - SilverBearCafe.com "Congress Must Act Immediately To Abolish Credit Default Swaps On The United States" Congress should act immediately to abolish credit default swaps on the United States, because these derivatives will foment distortions in global currencies and gold. Failure to act now will only mean the U.S. will be forced to act after these "financial weapons of mass destruction" levy heavy casualties. These obligations now settle in euros, but the end game is to settle them in gold. This is so ripe for speculative manipulation that you might as well cover the U.S. map with a bull's-eye.
China says gold is 'unlikely' to be primary investment The Telegraph.co.uk China has disappointed gold investors today after arguing that the yellow metal is 'unlikely' to be a primary investment as it diversifies its $2.4 trillion of foreign-exchange reserves. Gold, which has risen in price for 10 straight years, is 'unlikely' to be a primary investment, Yi Gang, the head of the State Administration of Foreign Exchange, said at a press briefing in Beijing today, Bloomberg reported. The price has "had handsome gains in recent years,” Yi said. But, “if we look at the past 30 years, it had big ups and downs.” China has lifted its holding of gold by 454 tons to 1,054 since 2003, leaving it with the world's fifth-biggest holding. After India, China is the biggest consumer of gold and, according to Mr Yi, increasing its reserves of gold will "push up prices" and "hurt Chinese gold consumers."
Using Gold to Fend of the FDIC and Its “Problem Banks” By: Richard Daughty - GoldSeek.com People think that Addison Wiggin is just another talented, intelligent, pretty face who secretly thrills to hear people say things like, “You’re a lot better looking than The Mogambo! And younger and smarter, too!” but he is much, much more than that. His story starts off that “The FDIC is even more broke than it was three months ago” to which most people rudely say, “Welcome to the club! Waddya think, we got some kind of picnic at the beach going on out here in the real world while you pretty-face hotshots talk about who is smarter and about some idiot named Mogambo who must be an idiot because otherwise he would not have such a stupid name!”
Bernanke’s Dilemma: Hyperinflation and the US Dollar By Ron Hera - GoldSeek.com Ben Bernanke, Chairman of the US Federal Reserve, faces a Sisyphean task because US banks are experiencing debt deflation and, because lending is now at much lower levels, monetary deflation is encumbering the domestic US economy as existing debts continue to be serviced. Government deficit spending can only offset lower consumer spending to a degree, and the mushrooming debt of the US government raises the question of whether the US can repay or roll over its debt obligations, given that tax receipts are likely to fall. Despite deflationary pressure, the value of the US dollar is in a downtrend pointing to higher prices for imported goods and energy. Devaluing the US dollar will reduce the value of debts in real terms, thus it can make debt levels sustainable, but higher prices will exacerbate debt defaults, worsening the condition of US banks. Mr. Bernanke’s dilemma is how to salvage the balance sheets of US banks without sparking high inflation or unleashing hyperinflation.
Stronger Dollar Is Good For Economy ... Except Where It's Bad By JOSEPH LAZZARO - DailyFinance.com President Harry Truman understood the upside/downside dimension to economic polices, having heard his administration's economists explain, "On the one hand, if you increase social spending, you'll address these social problems. On the other hand, it may increase inflation." That led to Truman's famous lament, "What I wouldn't do for a one-armed economist."
Further, the upside/downside nature of economic policy also applies to the dollar: There's a better than 50/50 chance the dollar will strengthen in the year ahead, after a long period in the currency market's desert. Heck, even commodity guru Jim Rogers, chairman of Rogers Holdings and not a historical dollar bull, is buying the dollar these days. At midday on Tuesday, $1.3582 bought one euro, a gain of about 10% for the dollar since December 2009. Still, investors shouldn't view a stronger dollar is an unqualified positive or a slam-dunk economic plus for the U.S. -- not by a long shot.
Jamming The Accelerator Martin Hutchinson - SilverBearCafe.com With the retirement of Fed Vice Chairman Donald Kohn, President Obama now has the right to appoint three Fed governors. Together with the reappointed Bernanke and Daniel Tarullo, whom he appointed last year, that will create a Fed Board of Governors on which five of the seven members are extreme soft-money advocates, and make it almost impossible, even in a crisis situation, for the 12-member Federal Open Market Committee to pull together a majority for anything but the most modest increase in interest rates. Essentially, the throttle will have been jammed open until at least January 2013. It's worth examining the implications of this for the U.S. and global economies.
China pledges prudence in adding gold to reserves ZHOU XIN AND SIMON RABINOVITCH - businessday.co.za CHINA would be prudent in adding gold to its official reserves, wary that any move to buy the metal would only drive its price higher, its top foreign exchange manager said yesterday. Yi Gang, head of the State Administration of Foreign Exchange, said that while gold was “not a bad asset”, it would never become a big part of China’s overall investment portfolio. “The international gold market is very limited. If I purchase gold on a massive scale, it will definitely push up global gold prices,” Yi said at a news conference on the sidelines of China’s annual parliament.
Another Real-Time Economic Indicator Is Rolling Over And Showing Contraction The Pragmatic Capitalist - businessinsider.com -- The new indicators just keep popping up all over the place. In a great interview with James Montier at Simoleon Sense we discover Montier’s favorite indicator, the ADS Business Conditions Index: “1. Tell us how you look at cycles. Are there any indicators or measurements you rely on? James Montier: Personally I’ve never really found it that tricky to know where we are in a cycle. There are a lot of indicators that gauge exactly that sort of thing from the ISM to the ECRI measures. The Philly Fed have a good (by which I mean timely) index called the ADS measure which tracks where we are in real time.”
Fast Money, unemployment, big government
Gibbs Fires Back At Chief Justice Roberts Over Obama Criticism Sam Stein - HuffingtonPost.com -- The White House fired back at Justice John Roberts Tuesday night, after the Supreme Court Chief told a crowd that he found it "very troubling" that President Barack Obama would criticize the court during his State of the Union address. In a statement sent to reporters, White House Press Secretary Robert Gibbs said that the only troubling thing was the 5-4 ruling by the court, which said that corporations could spend unlimited amounts of money advocating on behalf of candidates in elections. Roberts leads the court.
CBO Debt Projections: Make Room for “Crowding Out” By Addison Wiggin - The DailyReckoning.com 03/08/10 Baltimore, Maryland – The latest deficit projection from the Congressional Budget Office was conveniently revealed just prior to the close of business on Friday. “Why so?” You ask suspiciously. “Because,” we respond in a hushed tone. The CBO’s latest numbers reveal that President Obama’s proposed fiscal 2011 budget would add $9.7 trillion to the national debt over the next 10 years. The White House projection is only slightly less staggering – $8.5 trillion. Further, the CBO projects the national debt will be 90% of GDP by the end of this decade – higher than the 83.4% recorded at the end of fiscal 2009 last fall. We’re 100% certain this comment will elicit the customary response: “Look at Japan, its debt is 170% of GDP…and it’s been running massive deficits for years!”
Fitch warns Britain and questions Greek rescue as sovereign risks grow By Ambrose Evans-Pritchard - Telegraph.co.uk Fitch Ratings has delivered a serious blow to the credibility of the Government's budget plans, warning that Britain risks a loss of investor confidence and erosion of its AAA rating unless it maps out clear austerity measures. Brian Coulton, the agency's head of sovereign ratings, said the UK has seen "the most rapid rise in the ratio of public debt to GDP of any AAA-rated country" and is courting fate with its leisurely plan to halve the deficit by the middle of the decade. "It is frankly too slow, a pedestrian pace. Why the UK thinks it has more time than other countries , we're not sure. This needs to be reoriented," he told the Fitch forum on sovereign hotspots.
Fears of a Greek bank run By Dody Tsianta (Fortune) -- In the middle of the 2001 debt crisis, Argentines stormed their nation's banks to get their money out. To stop the stampede, the government imposed controls that allowed them to take out only $250 at a time and limited withdrawals for overseas trips to $1,000. Greece, in the middle of its own financial crisis, is teetering on the brink of a default. Many of its wealthier citizens are also uneasy about what lies ahead for their cash. According to estimates from private bankers in Greece and Cyprus, as much as 10 billion euros have left the country for Greek-owned bank subsidiaries in Switzerland and Cyprus in the last couple of months.
Obama: Greece, facing bad days, has US as ally By DESMOND BUTLER - AP via DailyFinance.com WASHINGTON -President Barack Obama stood with Greek Prime Minister George Papandreou on Tuesday and pledged that the United States would work with its ally, even as Greece's enormous debts sparked frenzied trading. Papandreou said he outlined European proposals in his White House meeting and Obama reacted positively to European ideas about cracking down on currency speculation. He also said the issue would be discussed at the next meeting of the Group of 20 summit of leading and emerging economies in June. Earlier Tuesday, European officials urged the U.S. to curb certain financial instruments.
Get up earlier, Germans tell Greeks guardian.co.uk First Greece was told to sell islands to pay off its debts, now the German tabloid Bild has reminded George Papandreou of the two countries' differences After yesterday's call by two German politicians that Greece sell off islands, historic buildings and artworks before receiving aid, the German tabloid Bild has written an open letter to the Greek prime minister George Papandreou: Dear prime minister, If you're reading this, you've entered a country different from yours. You're in Germany. Here, people work until they are 67 and there is no 14th-month salary for civil servants. Here, nobody needs to pay a €1,000 bribe to get a hospital bed in time.
Greece seeks U.S. help regulating speculators By Anthony Faiola and Steven Mufson - Washington Post Greek Prime Minister George Papandreou will seek President Obama's support at the White House on Tuesday for a European campaign to crack down on global financial speculation that critics say has exacerbated Europe's worst debt crisis in decades. The U.S.-born Papandreou, who assumed Greece's highest office in October, is pushing a plan in Europe that would impose new limits and stricter monitoring on complex and largely unregulated financial bets. Officials in Europe have blamed investors for manipulating the price of Greek bonds, fueling higher borrowing rates across Europe and accelerating the euro's fall against the dollar and other currencies.
Europe bars Wall Street banks from government bond sales Elena Moya - guardian.co.uk European countries are blocking Wall Street banks from lucrative deals to sell government debt worth hundreds of billions of euros in retaliation for their role in the credit crunch. For the first time in five years, no big US investment bank appears among the top nine sovereign bond bookrunners in Europe, according to Dealogic data compiled for the Guardian. Only Morgan Stanley ranks at number 10. Goldman Sachs doesn't make the table. Goldman made it to number five last year and in 2006, and number eight in 2007, the data shows. JP Morgan was in the top ten last year and in 2007 and 2006 but doesn't appear this year.
Senate financial bill appears likely to keep Fed as regulator of big banks By Brady Dennis - Washington Post -- Key members of the Senate banking committee are coalescing around legislation that would strip the Federal Reserve of much of its regulatory authority but would leave the central bank with oversight of the nation's largest banks, according to aides familiar with the ongoing negotiations. Under the plan, the Fed would continue to supervise only 23 bank-holding companies with assets exceeding $100 billion. Supervision of the nearly 5,000 banks below that threshold would fall largely to a proposed new regulator to be created by merging the Office of Thrift Supervision and the Office of the Comptroller of the Currency, aides said.
One World Government and a One World Currency: Is This a “Sign” of the END Times? Steven and Debra Wallace - The End Times Hoax Have Christians unwittingly embraced and promoted the concept of a one world government and one world currency based on what they perceive as being the fulfillment of end time prophecy? When does a belief, in and of itself, lend itself to self-fulfillment separate and apart from a perceived future reality? Have tyrants sought to take advantage of those holding to such end time beliefs in order to advance, prematurely and selfishly, their own agendas possibly millions, billions, or trillions of years ahead of this much anticipated event?
China May Raise Rates ‘Within Weeks’ as Prices Climb March 10 (Bloomberg) -- China’s inflation accelerated in February, according to a survey of economists, and exports climbed in the month, increasing the likelihood of the central bank raising interest rates from a five-year low. Consumer prices rose 2.5 percent from a year before, the most in 16 months, according to the median of 29 estimates in a Bloomberg News survey before tomorrow’s report. While the gain was likely exaggerated by seasonal factors, economists project the momentum to continue, sending the rate to as high as 4.4 percent during the year, a separate survey showed last week.
Policies that need Fed attention By Sol Palha - CommodityOnline.com The US senate boldly and blatantly refused to give 57 million elderly individuals $250 more. The story below highlights this point. A measure to give some 57 million elderly people, veterans and persons with disabilities a $250 check was rejected by the Senate on Wednesday, a setback for the powerful seniors' lobby. Social Security payments for the elderly and disabled will stay flat this year for the first time since 1975 because they are tied to consumer prices, which decreased amid the worst economic recession in 70 years.
Treasury Getting More Comfortable With Principal Write-Downs -- Sort Of Shahien Nasiripour - HuffingtonPost.com -- Is the Treasury Department finally going to help homeowners who owe more than their homes are worth get out from underwater? Maybe, maybe not. At a background briefing Monday afternoon, a senior Treasury Department official indicated that the department is headed in the direction of writing down mortgage principal more often -- the one thing underwater borrowers need the most. Market observers and consumer advocates have long been calling for such a shift
Making Sure Wrong Home Isn't Seized By Sara Lepro -NationalMortgageNews.com Reports of lenders repossessing the wrong home are further tarnishing the banking industry's image, already bruised by bailouts and bonuses. The mix-ups have been perpetuated by the sheer number of foreclosures being processed today as well as the various layers of communication involved. Addresses and other information passed from one department to another, or from a contractor to a subcontractor, can get garbled along the way. "It's what you call a new weakness," said Joe Bada, chief executive of Five Brothers Mortgage Co. Services and Securing Inc., a Warren, Mich., company that inspects and manages foreclosed properties for lenders. "There's just so much happening at the same time. The means of communicating haven't been refined. Information is not moving fast enough from one department to the other."
Lenders starting to run after 'walkaway' homeowners Charles Feldman - walletpop.com It's a variation of "you can run, but you can't hide," in the case of underwater homeowners (those whose homes are now worth less than the remaining mortgage). In increasing numbers, according to reports, people are simply walking away from their homes. Now banks and other lending institutions are starting to run after them. According to the Detroit Free Press, more and more lenders are either hiring collection agencies or "getting deficiency judgments -- court orders that allow banks to collect on mortgage balances."
What’s the FDIC Supposed To Do With This Stuff? HousingDoom.com Banks have been going under at a rate not seen in years, leaving the FDIC short of funds and long on assets. They are trying to alleviate the problem by auctioning off these assets, but that's leaving surviving banks unhappy: [Thanks L!] March 8 (Bloomberg) — A Federal Deposit Insurance Corp. plan to auction more than $1 billion in assets seized from failed banks next month, including a loan to build a W Hotel in Atlanta, may trigger writedowns that weaken lenders nationwide. Almost half of the loans were originated by Silverton Bank N.A., whose collapse last May was the biggest in Georgia history. Community banks that joined Silverton in providing $80 million for the 237-room hotel and condominium complex, as well as backing for 39 other projects, could be forced to write down their stakes to reflect sale prices.
Obama's whopper on health care Washington Examiner Editorial President Obama has said it repeatedly during his yearlong campaign to win approval of his proposal to put Washington bureaucrats in charge of America's health care system: Obamacare will reduce the federal deficit by lowering government spending on health care programs. After the health care summit two weeks ago, the claim was prominently posted on the official White House Web site: "It puts ourbudget and economy on a more stable path by reducing the deficit by $100 billion over the next 10 years -- and about $1 trillion over the second decade -- by cutting government overspending and reining in waste, fraud and abuse."
Obama Criticizes Insurers in Bid to Sell Health Plan By Kristin Jensen and Alex Nussbaum March 9 (Bloomberg) -- President Barack Obama and his top health official are stepping up attacks on the nation’s insurers in an effort to sway public opinion and persuade lawmakers to back U.S. health-care legislation. Obama told an audience outside Philadelphia yesterday that insurers have calculated that higher premiums can more than make up for the loss of customers who can’t afford coverage. Health and Human Services Secretary Kathleen Sebelius highlighted her call to insurers to post information justifying their rates.
Senate Clears Key Hurdle to Aiding Unemployed By NAFTALI BENDAVID - WSJ The Senate on Tuesday cleared a hurdle to extending unemployment benefits and health-care subsidies for the jobless until year's end, the latest modest bipartisan success on jobs and the economy. The vote was 66-34, with eight Republicans, including newly-elected Sen. Scott Brown of Massachusetts, joining the Democrats. One Democrat, Sen. Ben Nelson of Nebraska, voted against the measure.
Unlocking the Jobs Dilemma By: John Browne - MarketOracle.co.uk Productive, private-sector jobs - the lifeblood of a sound economy - are under assault by politicians in the United States and Western Europe, who have unwittingly taken a number of steps that make future job losses a foregone conclusion. In the 1980s, as a Member of the UK Parliament and elected Chairman of the Conservative Small Business Committee, I led discussions on the issue of job creation. At that point, the British labor market was dealing with technological advances that threatened traditional industries and an influx of highly competitive Eastern European workers who drifted westward in the waning days of the Cold War.
"Real" Unemployment Could Surge to 25%, Portfolio Manager Says by Heesun We - TechTicker.com With Wednesday's ADP report and Thursday's jobless claims data laying the groundwork for Friday's unemployment report, there's an intense focus on jobs from Wall Street to Washington D.C. and beyond. But there's really only one jobs figure that matters, says John Lekas, senior portfolio manager for the $320 million Leader Short-Term Bond Fund: The U-6 or "real" unemployment number. U6 is more important than the headline unemployment rate because it includes both the unemployed and "underemployed" workers faced with reduced hours who "still can't pay their bills," Lekas tells Aaron in the accompanying clip. "I think that's a more representative number."
Unions to Kick Off Major Anti-Bank, Pro-Jobs Campaign Monday By Peter Barnes - FOXBusiness -- As labor unions wind down their fight for health care reform, they will announce details Monday of their next major campaign: an attack on the nation’s biggest banks for their role in the financial crisis and a push for a new transaction tax to raise $100 billion a year for a national jobs program. The “Call to Action on Jobs” will last six to nine months and will run to at least Congressional mid-term elections, a union official said, and will target six firms: JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs.
Goldman Sued by Big Pension Fund Over Pay By Darryl R. Isherwood - FOXBusiness The pension fund for the electrical workers union has filed a suit against Goldman Sachs Group Inc claiming the bank is overpaying its executives. The International Brotherhood of Electrical Workers Local 98 fund seeks to recover money on behalf of itself and other shareholders. The suit filed in Delaware seeks to stop Goldman from paying executives roughly 47% of its 2009 net revenue, calling it “corporate waste.”
New chairman of House panel says job creation to be top priority By Lori Montgomery - Washington Post -- As he takes the reins of the tax-writing House Ways and Means Committee, Rep. Sander M. Levin is vowing to raise the profile of a once-powerful panel that, in recent years, has been overshadowed by the ethical troubles of its previous chairman, Rep. Charles B. Rangel. In one of his first interviews as the new chairman, Levin (D-Mich.) said that job creation will be his top priority in the run-up to this fall's congressional elections. But he said he also plans to wade aggressively into the debate over national tax policy and return his committee to its customary position at the center of the coming battle over tax reform.
Senate takes up unemployment insurance By Andrew Taylor - AP via WashingtonTimes.com Legislation extending unemployment insurance for the long-term jobless faces a key test vote in the Senate, its momentum helped by about 60 popular tax breaks for individuals and businesses that expired at the end of last year. The measure also prevents doctors from absorbing a crippling cut in Medicare payments, extends health insurance subsidies for the unemployed and gives cash-starved states help with Medicaid, the federal-state program providing health care to the poor and disabled. The unemployment insurance alone -- to provide weekly unemployment checks averaging above $300 to people whose core 26-week benefit package has run out -- will cost $66 billion through December. In some states people are eligible to receive benefits for up to 99 weeks.
Chevron Job Cuts: Chevron To Slash 2,000 Jobs This Year SANDY SHORE - HuffingtonPost.com Chevron Corp. said Tuesday it will cut 2,000 jobs this year and sell some overseas operations as it revamps its struggling refinery, marketing and transportation operations. The job cuts represent almost 12 percent of its 17,000 workers in the so-called downstream part of its business and just over 3 percent of its overall work force. Executives of the second-largest U.S. oil producer are still deciding where and when they will eliminate the jobs as they try to complete the restructuring by the third quarter, company spokesman Lloyd Avram said. Additional cuts are expected next year.
Few Californians benefiting from rescission settlements By Lisa Girion Report finds that fewer than 300 of 6,000 former policy-holders who were dropped after they became ill are participating in health insurers' agreements to settle such cases. Only a small fraction of eligible Californians have benefited from agreements that Anthem Blue Cross and other insurers made to settle accusations that they systematically and illegally dropped sick policyholders to avoid paying for their care, a report due out Wednesday finds. In settlements with the state Department of Managed Health Care and the Department of Insurance, California's largest health insurance companies agreed to offer new coverage to nearly 6,000 people they dropped after they were diagnosed with cancer and other serious conditions.
Consumer Debt and the Supply-Demand Dynamic By The Mogambo Guru - The DailyReckoning.com 3/08/10 Tampa, Florida – I was recently reminded of the old argument about Say’s Law, and that reminded me that it was Keynes who twisted Say’s theories around to create the ridiculous argument that supply created its own demand, which I say is a load of crap, which pretty much sums up a lot of what Keynes did, probably because he was an egotistical idiot-savant who erroneously thought that he could put economics and human behavior in terms of absolutes that you could turn into equations, a particular, arrogant stupidity that has, nonetheless, fascinated generations of economists since then, all of whom childishly delight in equations and computers, whether it means anything or not, which it doesn’t, which I can actually prove – prove! – with an entire storage area full (the “supply”) of ashtrays made out of dried dog crap, which nobody wanted to buy (the “demand”), proving that supply does NOT create its own demand. Instead, it is actually true that demand created its own supply, like the “supply” of new “neighbors” at the storage place are demanding (“demand”) that I get that stinking, festering fecal mess out of there or they are going to sue me or something, to which I said “Great! I’ll pay you off with some of these ashtrays, which will make wonderful gifts for your friends and family!”
Gasoline prices climb in state, nation By Ronald D. White - LA Times The increase of about 5 cents from a week ago, normal for March, is attributed to higher oil prices, the switch to summer gas and a slight uptick in demand. Oil climbed slightly higher in commodities trading Monday as the Energy Department reported that retail gasoline prices increased by about a nickel nationally and in California from a week ago. The average retail price of regular gasoline rose 4.9 cents nationally to $2.751 a gallon Monday. California saw a similar 4.7-cent gain to $3.046 a gallon, according to the Energy Department's weekly survey of filling stations.
Bifurcation of American Society Continues at Pace; By: Trader Mark - MarketOracle.co.uk Nearly Half Have Less than $10K for Retirement A Quarter Less than $1K, but Millionaires Rebound Smartly I won't get into all the dogmatic arguments that surround the massive income disparity in the US, we've discussed them in many other pieces. (frankly I think wealth disparity - rewarding generations for nothing more than having the right genes - is a much larger problem the income disparity) We must however understand "it is what it is" and Wall Street has entire thesis (plural?) built around it
Boeing gets big tailwind from subsidized bank By: Timothy P. Carney - Washington Examiner A government agency that finances U.S. exports directed 90 of its loan guarantees last year to subsidize one company: Boeing. Before President Obama unfurls his export-promotion plan at the Export-Import Bank's annual conference this Thursday, he should review the agency's recent annual report, which documents an unparalleled case of corporate welfare -- a government program dedicated almost entirely to serving one well-connected company.
Boeing wins $69M Air Force drone contract St. Louis Business Journal A St. Louis-based unit of Boeing won a contract worth about $69.7 million by the U.S. Air Force for the initial engineering, manufacturing and development of QF-16 Full Scale Aerial Targets, drone planes that will act as targets for newly developed weapons. The remainder of the QF-16 contract, expected to be awarded in coming years, calls for up to 126 of the drones to be delivered beginning in 2014, according to Boeing. The QF-16 will replace the QF-4 fleet. Boeing will convert retired F-16 aircraft into QF-16s, drones that will be able to fly manned or unmanned. The drones, to be used as aerial targets, will be equipped to evaluate how U.S. fighters and weapons operate against possible adversaries.
Is Bakken Shale the New American Gold Rush? By Chris Mayer - The DailyReckoning.com 03/09/10 Gaithersburg, Maryland – You know the labor market is tight when the local McDonald’s starts handing out $300 signing bonuses. Workers are coming in from all over, making it tough to find housing. They might sleep in their trucks or pitch tents, but it can get 50 degrees below zero, which makes such a move dangerous. There is also a chronic shortage of hotel rooms. I browsed the Web to see if I could find a room. I checked the Super 8 motel – no rooms available. I checked a few others – no rooms there, either. I used Priceline to search, and there were no rooms available. What’s going on here?
Despite fears, big powers resist trade wars By David M. Dickson - WashingtonTimes.com Protectionists ease pressure on G-20 It's the trade war that wasn't. Fears that the deep global recession would fuel protectionist measures have not been borne out, a major survey found. Commissioned by the Group of 20 leading industrial powers, the study found that the United States and its major trading partners have cut back sharply on trade-killing restrictions since September, despite strong political pressures at home.
Building A Future Without The New World Order Giordano Bruno - SilverBearCafe.com I have heard it said in the past that attempting to articulate the concept of freedom for a man who was born a slave is much the same as attempting to explain the concept of language to a man who was born deaf. Without a psychological point of reference, the task is arduous, or nearly impossible. And yet, it happens all the time. Some people are born deaf and blind, yet within them lay dormant the ability to understand concepts such as speech and form. Just as methods of expression and sense perception are inherent, so too are the desire and the comprehension of free will; the aptitude for choice, along with the intuitive conscience to help effectively direct such choice. Regardless of how oppressive our surroundings may be, this ability to choose can never be taken away.
Cisco Says New Router to "Forever Change the Internet": The Question Is 'When?' by Peter Gorenstein - TechTicker.com -- Cisco made headlines today announcing a next generation router that will revolutionize the internet by increasing downloads to unheard of speeds. The Cisco press release makes the following claims about the CRS-3 router: It enables the entire printed collection of the Library of Congress to be downloaded in just over one second; every man, woman and child in China to make a video call, simultaneously; and every motion picture ever created to be streamed in less than four minutes.
Lawmakers insist shower run-ins like the one Massa alleges are far from norm By Philip Rucker - Washington Post -- It's no secret that members of Congress broker deals on the treadmill or in the weight room of the House and Senate gyms. But former congressman Eric Massa's accusation that White House Chief of Staff Rahm Emanuel once berated him in the gym's shower over his vote against President Obama's budget left Washington watchers wondering how much business politicians conduct while naked. The answer, lawmakers revealed Tuesday, is not much. The private gyms are sanctuaries where lawmakers can huff, puff and disrobe knowing that only fellow members will see them.
Obama meets with key senators in bid to advance climate legislation By: MATTHEW DALY - AP Washington Examiner -- President Barack Obama made a renewed push for a long-stalled climate and energy bill Tuesday, urging lawmakers at a White House meeting to pass a comprehensive bill this year. Fourteen senators from both parties — including several who remain undecided on the climate bill — met for more than an hour with Obama, four Cabinet members and White House energy adviser Carol Browner. White House spokesman Robert Gibbs said Obama wants a comprehensive bill that includes a cap on emissions of pollution blamed for global warming.
Biden Condemns Israel Housing Plan as Impediment to Peace Talks By Gwen Ackerman and Jonathan Ferziger -- March 10 (Bloomberg) -- Vice President Joe Biden condemned an Israeli plan to build new houses in East Jerusalem, saying it threatened to undermine a U.S. effort to restart the Israeli- Palestinian peace process that had brought him to the region. In a statement issued hours after he met with Israeli Prime Minister Benjamin Netanyahu in Jerusalem yesterday, Biden said the announcement of the plan “is precisely the kind of step that undermines the trust we need right now and runs counter to the constructive discussions that I’ve had” in Israel.
Is There a Mideast Solution? By William Pfaff DOHA, Qatar—Internationally speaking, there are only two subjects to talk about in the Middle East. These are Israel, the Palestinians and the Americans; and Iran and Israel. The two subjects dominated the annual meeting here of the Institute for Mediterranean Political Studies, a group of senior or retired European, American and Middle Eastern officials and observers, otherwise known as the Club of Monaco. The prospect of an Israeli attack upon Iran was of general concern, assumed as being certain to bring Iranian retaliation against oil transit to the West and against American forces in Iraq and the Gulf principalities, as well as against Israel itself, leading to ruinous escalation and grievous permanent consequences—most of all for the United States.
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