Maybe help is around the corner...if you call it that.
Riverside Info » About Riverside
Forewarned is forearmed...
(60 posts)-
Posted Monday Nov 29, 2010 08:04 #
-
Congratulations on electing another brain-dead lightweight - Mark Kirk. Right off the bath he delivered for his constituency - stating it was most important to pass the tax cuts for the rich but only extend unemployment for the 2 mil that are about to lose them "if they can be paid for." Idiot - the tax cuts for those making over one million bucks a year will cost $700 billion and are unpaid for - and the CBO - the non-partisan people that study these things, say extending tax cuts for the 4% wealthiest is the least productive in terms of job creation, while granting extended unemployment to those who will shortly fall off the scale is the most productive. Nevertheless, this fool pays back the unknown (not really) people who spent millions to put his vote in the Senate. When are people going to wake up...
KIRK: We should extend the Bush tax cuts and make sure we don’t have a double-dip recession. And I have the honor to be the first of ninety-five new Republicans, fiscal conservatives, to help right our ship of state. [...]
Q: The first thing you’re talking about is deficit reduction and spending. Does that mean that right now, as of today, you’d be against extending the unemployment insurance?
KIRK: That’s right. You could extend it if you found a way to pay for it. And I voted for that in the past. But these proposals to extend unemployment insurance by just adding it to the deficit are misguided.
Excuse me? Misguided? How long will thinking people accept this kind of garbage?
Posted Monday Nov 29, 2010 20:12 # -
Mr. Roubini added that until debt is restructured, the fundamental problems of low growth and deflation will remain.
The economic growth seen in the U.S. and Europe this year is already withering as financial shocks, together with growing political, regulatory and debt risks, create greater uncertainty—making investors more skittish, driving up borrowing costs and deepening the debt spiral, Mr. Roubini said.
"This period of volatility is going to stay with us," he said, recommending that governments take a more balanced view that favors stimulating growth in the short term. "Ideally, in a world in which you can do it, every country should cut spending and raise taxes, but most fiscal consolidation should be back-loaded and not front-loaded as front-loading cuts economic activity."
If fiscal cuts are phased in gradually, investors will see the light at the end of the tunnel, and if another small stimulus is needed in the short run, markets won't punish sovereign-debt issuers, as is the case now amid harsh sovereign budget cuts, he said.
"I'd tell the U.S. to do another short-term stimulus and then medium-term fiscal consolidation, but in the U.S. they're doing the opposite of what they should do," Mr. Roubini said, adding that the new Congress is unlikely to take steps to promote economic growth.
Posted Tuesday Nov 30, 2010 18:55 # -
Another case of "can't resist." RT - Russian newscast has been covering this in depth for a few days - bet you haven't seen much on it here yet.
"Secret Federal Reserve System data released December 1 reveals that the banking cartel (the Fed and its member banks) bailed itself out to the tune of more than $10 trillion in “emergency” funds, with trillions more going to line the pockets of big European and foreign banks.
The previously undisclosed information was made available after Congress passed and the President signed a watered-down version of U.S. Congressman Ron Paul’s (R-Texas) wildly popular “Audit the Fed” bill. The original disclosure provisions were virtually gutted in the Senate by socialist Senator Bernie Sanders (I-Vt) before the audit was added to the financial reform bill.
But the Fed was still forced to hand over details about six emergency loan programs, trillions in “asset purchases,” the bailout of certain favored firms like AIG, and so-called “currency swaps” with foreign central banks. And the results of even the milder audit have shocked analysts and lawmakers.
"The $700 billion Wall Street bailout turned out to be pocket change compared to trillions and trillions of dollars in near zero interest loans and other financial arrangements that the Federal Reserve doled out to every major financial institution," said self-described socialist Senator Sanders after learning about the Fed data.
"After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed's multitrillion-dollar bailout of Wall Street and corporate America," Sanders added in a statement. "Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions."
The biggest Fed “overnight loans” recipient was Merrill Lynch with over $2 trillion in low-interest handouts during the crisis. The firm eventually wound up collapsing anyway and was acquired by Bank of America — possibly with illegal strong arming from Fed bosses, according to comments made by Special Inspector General Neil Barofsky.
Citigroup, another rescued mega-bank, received $2 trillion under the program. That institution was also bailed out separately by the U.S. Treasury. In third place was Morgan Stanley with just under $2 trillion in loans from the Fed. Next on the list were Bear Stearns, Bank of America, and Goldman Sachs, which called the Fed’s actions “very successful” through a spokesman.
“As we have previously disclosed, Morgan Stanley utilized some of the Federal Reserve's emergency lending facilities during a time of immense financial turmoil throughout the banking sector and the broader market," said Morgan Stanley public-relations people in a statement released December 1.
"The Fed's actions were timely and critical, and we commend them for providing liquidity and stabilizing the financial system during that period,” the statement also claimed, referring to the central bank’s extraordinary and unprecedented actions during the economic crisis.
In addition to data on the Fed’s “overnight” loans, information related to its purchases of troubled assets like mortgage-backed securities and commercial paper was also disclosed. European banks were the biggest beneficiaries, with Deutsche Bank dumping almost $300 billion of securities on the Fed, and Credit Suisse unloading close to $290 billion worth. In total, the Fed bought well over $1 trillion of mortgage-backed securities.
The biggest winners in terms of money for commercial paper were also generally foreign banks. Swiss giant UBS, the largest borrower, received almost $75 billion from the Fed’s “Commercial Paper Funding Facility.” Even a state-owned bank from Korea got billions.
Details of the Fed’s bailouts of AIG and Bear Stearns were also disclosed. The Federal Reserve Bank of New York actually set up front corporations to distribute the funds and buy “assets” from the firms. It justified the measures by citing the Federal Reserve Act’s “unusual and exigent circumstances” provision allowing the Fed to give money to non-banking institutions.
And it wasn’t just financial and banking institutions receiving Fed largesse. General Electric — which owns NBC and does have some involvement in finance — was among the bigger institutions. But even McDonald’s and Harley Davidson were among the beneficiaries of Fed billions.
Some of the “emergency” Fed programs and powers detailed in the newly released documents have since been shut down or rolled back. But the banking cartel is still holding trillions of dollars worth of “assets” including everything from real estate to securities.
According to the Fed, it does not expect any significant losses on the programs or assets. In fact, some of them may have actually generated a profit for Federal Reserve-cartel shareholders, mostly major banks. A small portion of any potential profits would also go to the U.S. Treasury.
But the new disclosures were a welcome development for most. Even some Fed bosses sounded relieved about finally coming clean — to some extent — about what they did with Americans’ money. “We owe an accounting to the American people of who we have lent money to,” Richmond Fed boss Jeffrey Lacker said Wednesday in an interview with Bloomberg. “It is a good step toward broader transparency.”
But the Fed has been very resistant to transparency historically, and even recently. While the audit legislation was being debated in Congress, the cartel even hired a top lobbyist to protect its interests, and perhaps more importantly, its secrets.
And it succeeded in important ways. For example, the Fed’s “discount window” operations remain secret, with Bernanke claiming before the House Financial Services Committee that the secrecy “must be maintained.”
Numerous courts have also ordered the central bankers to turn over the data in response to media Freedom of Information Act lawsuits. But the Fed continues to stonewall, with the New York Fed claiming that, since it is a private corporation with private shareholders and a privately elected board, it has no obligation to comply with the requests.
One of the groups leading the charge for Fed transparency — and ultimately an end to the institution altogether — is planning more work in the months ahead. “This release is just a small glimpse into what the Fed does everyday — devalue our money, create moral hazard, and put taxpayers on the hook,” noted Campaign for Liberty President John Tate in an e-mail to supporters, activists who have been instrumental in pushing the issue.
“And we can only speculate on how much the Fed isn’t telling us, including information on individual securities that were pledged as collateral for over $800 billion in loans,” he added. According to Tate, Congressman Paul will reintroduce the full Audit the Fed bill in the next Congress. And the Campaign for Liberty, along with a broad coalition of groups including the John Birch Society and many more, will be there to push it through.
“It’s time to permanently end the Fed’s shroud of secrecy,” Tate concluded. “The American people should not have to wait years to find out what deals they’re being committed to — if they ever find out at all.”
I'd like one of those loans.
There's better coverage and embedded links for details here.
http://www.businessinsider.com/federal-reserve-bailout-details-2010-12
Bloomberg has the easiest access to detailed coverage - like this. Or Huffingtonpost.com
"5:58 PM ET The Fed's Ridiculously Low Interest Rate
NEW YORK -- For the lucky few on Wall Street, the Federal Reserve sure was sweet.Nine firms -- five of them foreign -- were able to borrow $5 billion in U.S. government securities, which effectively act like cash on Wall Street, for four weeks at the minuscule interest rate of 0.0077 percent.
That is not a typo.
On 31 separate transactions, the lucky nine were able to borrow billions for 28 days as part of a crisis-era Fed program that lent the securities, known as Treasuries, for 28-day chunks to ensure that firms had cash on hand to lend, invest with and trade. The market was seizing up; effectively free money, courtesy of Uncle Same, helped it thaw.
The European firms -- Credit Suisse (Switzerland), Deutsche Bank (Germany), Royal Bank of Scotland (U.K.), Barclays (U.K.), and BNP Paribas (France) -- borrowed $5 billion worth of Treasuries 19 different times, each paying just $383,561.64 in interest for the privilege. Deutsche led the way with seven such deals/
That's equal to 0.0077 percent interest for the 28-day loan. The annual interest rate equals 0.10 percent. -- Shahien Nasiripour"
Damn! If they'd give me one of those loans I could buy a Duesenberg. Life's not fair.
Don't forget: 2 million foreclosures are still in the pipeline, and 7 million mortgages are showing consistently late.
This isn't over.
Posted Thursday Dec 2, 2010 22:41 # -
India rising as we sink...
According to noted economist Nouriel Roubini, India's economy may expand more than China's in the next 10 years if India lifts curbs on foreign investment in retail and boosts spending on roads and bridges.
''I'm very optimistic about India's future growth'' because the economy is driven by domestic demand while China relies more on exports, the New York University professor and chairman of Roubini Global Economics who predicted the global financial crisis said in New Delhi yesterday. ''The challenge for India will be to sustain 9 percent growth and at the same time keep inflation under control.''
Roubini joins Morgan Stanley in projecting a faster pace of growth for India than China. Prime minister Manmohan Singh's government has plans to double spending on roads, ports and power plants to $1 trillion in the five years to 2017 in a bid to improve the country's infrastructure which ranks below Sri Lanka and war –ravaged Ivory Coast.
India's gross domestic product was up at 8.9 per cent for a second successive quarter in July to September according to the government which came out with the figures this week.
Posted Friday Dec 3, 2010 09:16 # -
"Robert Pollin, the co-director of the Political Economy Research Institute at the University of Massachusetts-Amherst who has written extensively about the Fed and economic issues for The Nation, has been in the forefront of this debate.
Here's a brief outline from Pollin of his smart proposal:
"The federal government must continue to aggressively fight the recession created by Wall Street hyper-speculation and promote recovery through both spending measures and credit market interventions.
"Austerity is not a solution. The federal government's deficit spending over the past two years succeeded in averting a 1930s-style depression. Large deficits are still needed now to prevent the economy's rickety floor from collapsing. Are the deficit hawks really prepared, for example, to preside over mass layoffs of teachers, nurses and police officers that would result without continued large-scale federal support for state and local governments?
"Credit must be channeled to small business. Credit markets remain locked up, especially for small businesses, while banks are holding an unprecedented $1.1 trillion in cash reserves. The Federal Reserve's new "quantitative easing" is a halfway solution. It directly reduces interest rates for longer-term U.S. Treasury bonds only. It will not be effective at lowering interest rates and risks for private borrowers and lenders.
"Two initiatives -- one carrot and one stick -- can deliver lower rates and risks to businesses. The carrot is an expansion of existing federal loan guarantees by $300 billion, which would roughly double what's annually available now. Small businesses should be the primary beneficiaries. The stick is a 1% to 2% tax on the excess cash reserves now held by banks, to push them to become more bullish on loans for job-creating investments.
"These measures could generate about 3 million jobs as the $300 billion in loan guarantees turns into new business investments. Job creation would be sgnificantly higher if a large proportion of the spending were for green activities such as retrofitting buildings to make them energy-efficient. Job creation per dollar of green investments is about 50% greater than the economy-wide average. The total costs for the program -- mostly from loan defaults -- would almost certainly be well below 1% of the federal budget."
That's from The Nation. Here's a link...
Posted Saturday Dec 4, 2010 18:14 # -
NEW YORK (CNNMoney.com) -- On the heels of a disappointing jobs report, the country's top economist told 60 Minutes the outlook isn't much brighter.
"At the rate we're going, it could be four, five years before we are back to a more normal unemployment rate," Federal Reserve Chairman Ben Bernanke told 60 Minutes in an interview that aired Sunday night.
The 60 Minutes broadcast comes just a couple days after the government released a jobs report bringing two downbeat surprises: the economy added only 39,000 jobs in November and the unemployment rate rose to 9.8%.
Stubbornly high unemployment is one reason Bernanke is standing by the Fed's recent controversial decision to initiate a $600 billion bond-buying program, its second round of so-called quantitative easing or QE2. It is meant to stimulate the economy by keeping interest rates low and encouraging consumers to spend more and businesses to create jobs.
But the plan has drawn a major backlash from both conservatives and global leaders over the past month. Critics argue the policy of low interest rates will feed long-term inflation, artificially devalue the dollar and create asset bubbles.
While Bernanke doesn't address all those topics in the interview, he does stand strong against his critics in three main ways.
He says long-term inflation fears are "way overstated," and the Fed is not just "printing money." Plus, while critics are pointing out QE2's risks left and right, they are not weighing the risks of "not acting," Bernanke said.
Responding to a question about the possibility of additional quantitative easing, Bernanke said: "Oh, it's certainly possible. And again, it depends on the efficacy of the program. It depends on inflation. And finally it depends on how the economy looks." He added that it "doesn't seem likely" that there will be a double-dip recession.
Bernanke also said he's "100%" confident in the Fed's ability to control long-term inflation. "We could raise interest rates in 15 minutes if we have to," he said. "That time is not now."
As Congress debates extending the Bush tax cuts and implementing budget cuts to slash the national deficit, Bernanke also stressed the importance of Congress and the White House doing more to help the recovery.
While the Federal Reserve can help the economy through monetary policy -- keeping interest rates low -- decisions on taxes and spending, or so-called fiscal policy, are left up to lawmakers.
"We don't want to take actions this year that will affect this year's spending and this year's taxes in a way that will hurt the recovery. That's important," Bernanke said. "But that doesn't stop us from thinking now about the long-term structural budget deficit."
He also called the tax code "inefficient."
"By closing loopholes and lowering rates, you could increase the efficiency of the tax code and create more incentives for people to invest," he said.
Posted Sunday Dec 5, 2010 20:17 # -
From Paul Krugman...
December 4, 2010, 10:07 AM
Class And Social Security
Digby sounds the warning: a fair number of “centrist” Democrats – probably including the Incredible Shrinking President — seem willing, even eager, to join up with Republicans in cutting Social Security benefits and raising the retirement age. As she says, this is idiotic even in narrow political terms: in the very next election, Republicans will run ads in which they pose as the defenders of Social Security, while Democrats are the meanies who want to take away your retirement.The question you have to ask is, why are Democrats such suckers on this issue?
The proximate cause is that cutting Social Security is one of those things you’re for if you’re a Very Serious Person. Way back, I wrote that inside the Beltway calling for Social Security cuts is viewed as a “badge of seriousness”, which has nothing to do with the program’s real importance or lack thereof to the budget picture; that column elicited a more or less hysterical reaction, which sort of proved the point. (Looking back at the column, I was surprised to see that it was about the ISP himself; tales of a debacle foretold.)
But why Social Security? There was a telling moment in 2004, during one of the presidential campaign debates. Tim Russert, the moderator, asked eight or nine questions about Social Security, trying to put the candidates on the spot, while asking not once about Medicare, which serious people – as opposed to Serious People – know is the real heart of the story. Why the focus on Social Security?
The answer, I suspect, has to do with class.
When medical expenses are big, they’re big; even the very affluent are grateful when Medicare pays the bills for their mother-in-laws bypass or dialysis. The importance of Medicare, in short, is obvious to all but the very rich.
Social Security, by contrast, is something that matters enormously to the bottom half of the income distribution, but no so much to people in the 250K-plus club. A 30 percent cut in benefits would represent disaster for tens of millions of Americans, but a barely noticeable inconvenience for VSPs and everyone they know. A rise in the retirement age would be a vast hardship for people who do manual labor, but if anything a gift to VSPs, who don’t want to step aside in any case. And so on down the line.
So going after Social Security is a way to seem tough and serious — but entirely at the expense of people you don’t kno
Posted Sunday Dec 5, 2010 22:10 # -
Nouriel Roubini, who predicted the global financial meltdown of 2008, has revised down the outlook for the U.S. gross domestic product growth from a previously forecasted 2.8 percent this year to 2.7 percent, adding that the pace of growth will be insufficient to spur job growth.
"GDP growth in 2011 will most likely support a pace of job creation that will be barely capable of absorbing increases in the labor force and will fail to bring down the unemployment rate significantly." Roubini says unemployment will remain high at around 9.5 percent.
The report predicts the disturbing possibility that it will take at least a decade to bring down unemployment rate to five percent, even if the U.S. economy grows at a rate of 4 percent a year.
Also, inflation will remain below expectations, the report says. "Inflation will remain well below the implicit 2% Fed target for core PCE for quite some time. This implies no change in Fed policy; i.e., completion of the large-scale asset-purchase program and perhaps more quantitative easing."
However, the report predicts that the possibility of the country slipping back into recession is much lower now than before. "The tail risk of a double dip now is much lower than before: around 15-20%."
The part about it taking "at least a decade" to bring unemployment down to 5% is probably not far off. The country needs to get back to producing things rather than just consuming them. 70% of our economy was domestic consumption. Since real wages for the Middle Class have not risen in a decade, and show no reason to do so in the immediate future, it would be hard to project solid across-the-board growth. So the cost of things like these latest tax breaks for the wealthy are going to take longer than projected to pay off. When this passes we will be borrowing more from the Chinese, Arabs, etc. Between paying the interest on that and the ever-higher required to keep places like this going, there isn't much to be optimistic about. Now we are getting exactly the wrong people coming into control. Trickle-down has never worked, never will. But you wouldn't know that from their rewriting of history.
Case in point:
"Perhaps Orwell would have something to say about this?
By Ezra KleinI had to read this a couple of times to make sure I had it right:
During a private commission meeting last week, all four Republicans voted in favor of banning the phrases "Wall Street" and "shadow banking" and the words "interconnection" and "deregulation" from the panel's final report, according to a person familiar with the matter and confirmed by Brooksley E. Born, one of the six commissioners who voted against the proposal.
Whose interests are even served by this? The financial regulation bill has already passed. The country is aware that Wall Street had something to do with the financial crisis. Even Wall Street is aware that Wall Street had something to do with the financial crisis.
By Ezra Klein | December 15, 2010; 12:45 PM ET
Posted Thursday Dec 16, 2010 11:15 # -
Whoopie! Tomorrow it starts, the beginning of Darrel Issa's campaign to be President. Scalia's in the bag, in case there are any hanging chads out there, and the way is open for Orange County's Viper King to investigate everyone. The ghost of Murray Chotiner rises from the grave. (If you don't know who that is, look 'em up.) Ahhh, I know you're too lazy, so I'll intro you to the Spartucus net and shoot you this link. Draw a Spartucus web for this guy and you'll see the history of America writ large. BTW, Jonah Goldberg is his kid, even if he won't admit it - and who would.
Posted Tuesday Jan 4, 2011 18:55 #
Reply
You must log in to post.