Sunday, August 29, 2010

"Morning Papers" - Its Origins

The Rooster

...and maybe the tooth fairy will come, too.

I think it is time for a Town Hall Meeting about the economy. Let's talk.

Obama said in an NBC interview that the batch of grim economic data over the past few weeks was something his administration had anticipated. (click title to entry - thank you)
Gloomy reports on gross domestic product and housing have raised fears the fragile economy could slip back into a recession or face a lengthy period of growth that is too slow to make much of a dent in the 9.5 percent unemployment rate.

"The economy is still growing, but it's not growing as fast as it needs to," Obama told NBC in the interview in New Orleans,...

..."We should be passing legislation that helps small businesses get credit, that eliminates capital gains taxes so that they have more incentive to invest right now," he said. "There are a whole host of measures we could take. No single element of which is a magic bullet."...

...Obama also faces constraints on his ability to act....

And the reason he is facing constraints to ACT is because of political hacks that obstruct every helpful form of legislation to come to the USA Senate !

I simply love that title as if Housing shouldn't be down except by some inept government maneuver.

The Republicans and Wall Street ran the country into ruin by building a glut of housing and commercial buildings.  Then they turn around and decide it is a shame the USA dollar can't retain its value due to fears over a housing crisis. 

Is everything in the media hype?   Does it ever get real anymore?  Or does the global financial community still believe they can do this all over again if they only had enough 'risk taking' by Americans again with backign from their government?

Where does the hideousness of this reality stop?  The American people are rebulding their economy ALONE.  It isn't going to happen overnight.  There is no LOOSE credit anymore due to necessary tightening of lending laws.  I mean the geniuses that caused this disaster are nore now wondering what happened to the USA?  Really? 

The real question is, do they care? 

AUGUST 24, 2010
12:51 P.M. ET

WORLD FOREX: Dollar Down; US Housing Data Feed Recovery Fears (click title to entry - thank you)

By Frances McInnis Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The dollar lost considerable ground Tuesday after U.S. housing data for July came in well under expectations and raised further doubts about the pace of the U.S. recovery.
The euro reversed its slide against the dollar, rebounding above $1.27. Other higher-yielding currencies, such as the Canadian and Australian dollars, pared earlier losses but remained down on the day.
The U.S. currency had extended its losses against the yen in the immediate aftermath of the housing data, falling to Y83.58, its lowest level since June 1995, but it then pulled back above Y84. In earlier trading, the dollar had dropped through a series of 15-year lows as investors probed the determination of Japanese authorities to hinder their currency's advance.
The dismal housing data prompted "a broad knee-jerk reaction against the dollar," with concerns growing that the Federal Reserve will take further steps to stimulate the economy, said Brian Kim, currency strategist at UBS in Stamford, Conn....

Pick your poison I suppose.

But, the reality is there needs to be some 'real thought' going forward and not just 'knee jerk' reaction to potential election outcomes.

I believe the American people are on a 'self path' to recovery.  They are spending less and saving more.  They want their own country to have viable economic sectors that sincerely provide a good living to its citizens.  That takes capital.  The sure way for the country to build capital is to save. 

What bothers me is that if Americans have chosen this 'self healing' path of recovery.  Then where exactly are the funds going to come from to fund a second stimulus.

We haven't seen the First Stimulus at work 100% yet. 

Job growth is slow, but, then it is obvious the choices to continue to abandon the USA by Wall Street is still contracting the economy domestically.  We witnessed that when GM, with its new CEO or whatever he is.  Oh, yeah, Hatchet Man; decided to cut jobs in the USA, pay bills in Europe and sell stocks.

If Wall Street is still 'leaving' the USA behind because it has been drained of all its assets, then we still haven't seen the end of the economic contraction.  And while a Second Stimulus is a good idea and is probably the best idea, it simply isn't practical from most view points to continue to run up a deficit that has no clear resolve.

I think we are stuck. 

Basically, the 'worth' of the USA has been destroyed.  Homes have lost their value and Americans are stagnant in their ability to simply pick up and move at will as they are used to which stimulated their own happiness.

There is a lot "W"rong in the USA and I am not surprised the USA dollar is diminished internationally and China is taking over the global economy in leaps and bonds.

I just can't figure out why people like G. W. Bush and Hank Paulson still live here for as much as he hates us.

This is an Op-Ed from the New York Times

Op-Ed Contributor

Why We Need a Second Stimulus (click title to entry - thank you)


Published: August 28, 2010
OUR national debate about fiscal policy has become skewed, with far too much focus on the deficit and far too little on unemployment. There is too much worry about the size of government, and too little appreciation for how stimulus spending has helped stabilize the economy and how more of the right kind of government spending could boost job creation and economic growth. By focusing on the wrong things, we are in serious danger of failing to do the right things to help the economy recover from its worst labor market crisis since the Great Depression.
The primary cause of the labor market crisis is a collapse in private demand — the same problem that bedeviled the economy in the 1930s....

This is from the an Op-Ed in "American Banker" published by The Financial Services Form.

Op-Ed: U.S. Must Control Deficit to Avert Economic Decline (click title to entry - thank you)

Tuesday, 27 July 2010 09:21

American Banker
By Rob Nichols
Given current Congressional Budget Office projections, there is reason to conclude that, unless significant structural changes are made to balance revenues with spending, the U.S. will probably approach a point where global market sentiment regarding the nation's fiscal condition could change abruptly for the worse.
This would make corrective action far more urgent and painful than if such steps were taken in the near term.
Failure to meaningfully address the nation's fiscal circumstances raises the prospect of dangers that could hurt the U.S. economy. Principal among these is the risk that investors could demand higher risk premiums when buying U.S. government debt.
At the current elevated debt tally, rising interest rates could quickly compound an already challenging fiscal situation. Moreover, given that Treasury bills and bonds are the basis for borrowing structures in private credit markets, the effect of burgeoning government debt on the cost of capital, economic growth and job creation would be far-reaching and decidedly negative....

Tell me this makes sense. Republicans are always 'high' on defense. They love the military and military spending.

Admiral Mullens.  Nice Guy.  I think he really does worry about us.

Mullen: National Debt is a Security Threat  (click title to entry - thank you)

Aug 27, 2010

The national debt is the single biggest threat to national security, according to Adm. Mike Mullen, chairman of the Joint Chiefs of Staff.
Tax payers will be paying around $600 billion in interest on the national debt by 2012, the chairman told students and local leaders in Detroit.
“That’s one year’s worth of defense budget,” he said, adding that the Pentagon needs to cut back on spending.
“We’re going to have to do that if it’s going to survive at all,” Mullen said, “and do it in a way that is predictable.”
He also called on the defense industry to hire veterans and become more robust in the future....

So a return of Republicans to the Congress means they would raise military spending and cut taxes while the Joint Chiefs is stating the National Deficit is the biggest security threat to the country.  Where does that make sense to anyone casting a vote this November?

July 16, 2010

...What would be the effect on the deficit if the Republicans get their way on repealing the Bush tax cuts? Well we know that in 2005 alone those tax cuts helped add add $539 BILLION to the deficit. Here’s what the CBO said at the time regarding the Bush tax cuts:
In 2005, the cost of tax cuts enacted over the past four years will be over three times the cost of all domestic program increases enacted over this period.The new CBO data show that changes in law enacted since January 2001 increased the deficit by $539 billion in 2005. In the absence of such legislation, the nation would have a surplus this year. Tax cuts account for nearly half — 48 percent — of this $539 billion in increased costs. [1] Increases in program spending make up the other 52 percent and have been primarily concentrated in defense, homeland security, and international affairs....

The economic recovery is slow because the people of the USA are funding it. No one else is.

Wall Street can't be found anywhere.  They refuse to lend to the people of the USA, the very people that bailed them out.

So, the citizens, almost instinctually started to save again.  IN THAT is the way to recover the economy. 

I stated on this blog as soon as I heard about the bailout that it wouldn't matter to the USA economy that we would be building our economy all over again.

By saving, the banks the citizens are investing their monies can begin to lend.  There are formulas for any bqnk to establish 'safe lending' while maintaining the fiscal integrity of the bank for its depositors. 

Don't let any hype get in the way of being financially solvent.  Increasing savings is a sound way for Americans to establish credit again in the Small Business and Housing sector.  It is going to take time, but, it will be worth it. 

During the Bush Years everyone got used to the 'fiscal high' and 'quick return.'  It isn't there anymore.  The USA has been raided of its treasury and its economy and it will take time to rebuild.  There isn't anymore spinning gold out of straw.  That ended at the end of 2008.

Increasing USA Saving Rate is a Good Sign  (click title to entry - thank you)

Sun, 06/28/2009 - 22:45 EDT
Surging U.S. Savings Rate Reduces Dependence on China
Government data today showed that the household savings rate rose to 6.9 percent in May, the highest since December 1993, as personal spending increased less than incomes. The rate in April 2008 was zero. Most of the rise in income in May was due to one-time government stimulus payments to seniors

Nouriel Roubini, an economics professor at New York University and chairman of RGE Monitor, forecasts that the savings rate will ultimately reach 10 percent to 11 percent. What’s critical, he said in a Bloomberg Television interview on June 24, is how quickly it increases.

A rapid rise in the next year because of a collapse in consumption would push the economy, already in its deepest contraction in 50 years, further into recession, he said. If it occurs over a few years, the economy may grow.
From 1960 until 1990, households socked away an average of about 9 percent of their after-tax income, government figures show. Americans got out of the habit in the 1990s as they saw their wealth build up in other ways, first through surging stock prices and then soaring home values, Gramley said....

The Bush Tax Cuts were "W"rong. They were designed to provde tax relief for him and his cronies.

This isn't about increasing taxes in a recession.  This is RETURNING the Tax Code to normal and equity.

There is no way of funding more tax cuts for the wealthy either.  I have yet to hear where the Republicans are going to find a way to fund more tax cuts in the middle of a recession.

This entire tax structure is simply OUTRAGEOUS.  There is nothing more or decent about it and that is just the beginning.

...Since 1929, the first year for which data is available from the Bureau of Economic Analysis’ National Income and Product Accounts (NIPA) (click title to entry - thank you) tables, there have been five Presidents that have served an eight year or more term: FDR, Ike, Reagan, Clinton and GW. Additionally, there are several more “quasi-eight year terms.” These are instances in which a VP took over upon the death or resignation of the President and maintained a similar a policies similar to those of his predecessor (JFK/LBJ and Nixon/Ford), or in which a VP took over a mere few months into a new terms and thus could put his own stamp on just about the entire eight years (Truman)....

...Notice… increases in the tax burden in the first two years of an administration tend to be followed by rapid growth during the remainder of that administration. Conversely, administrations that greatly decreased the tax burden during their first two years suffered from poor economic growth during their remaining six years. This relationship, at least, is very difficult to explain by insisting that administrations which enjoyed rapid growth simply were more able to raise tax burdens than administrations which grew more slowly. It is also impossible to explain by anything said by anything you hear out of the Austrians or the Chicago school....

When government reduces the deficit and increases taxes it is 'structured' and 'focused' change and application of wealth.  When government decreases taxes and increases the deficit it puts monies in the 'random' economy.  As we witnessed with the $700 billion bailout of Wall Street, it didn't do a darn thing for the USA economy.  It went into investments and payments to Europe and otherwise.  I trust the 'growth' that will happen when government applies it rather than Wall Street.  There is too much diffuse global application of monies to ever trust TAX CUTS FOR THE WEALTHY again.

The Obama Administtration is not about growing government. It is about normalizing government so it can function.

There is nothing worse than people trying to be elected to office on 'talking points' rather than facts.  The Obama Administration didn't grow government with its last budget, it returned it to function.  That is a huge difference than 'Big Government.' 

A good deal of the American Recovery and Reinvestment Act went to 'stabilizing' the slide into the burgeoning insult on American sovereignty.  Did anyone ever stop to realize that if there was no 'Stimulus' where the USA would be?  Did anyone ever stop to realize there would be no USA?  Quite possibly?

Oh, the Republicans were going to shrink government, they were going to shrink it so much the 'integrity' of what would be left wouldn't matter.

What absolutely astounds me is that during the entire process of hearing about the collapse and reacting to it and then passing the Bailout of $700 billion never once was the sovereignty of the USA even mentioned.  Never once did the impact of the collapse take on the dynamics of 'real concern' as to what the citizens would do in the face of complete and abject loss of everything they ever had in life including their country's ability to function. 

It wasn't until the Obama Administration took over and the majority Democratic Congress passed the ARRA did anyone give a damn about the integrity of the country, its citizens and how we were going to BEGIN to get out of this mess.

And what about the jobs that were saved, the relief for the States, the new jobs created, the intact nature of our governments and the fact we STILL have a future as a country and a democracy.  That doesn't matter?  That is taken for granted?  Really?

...Although CBO has examined data on output and employment during the period since ARRA’s enactment, those data are not as helpful in determining ARRA’s economic effects as might be supposed because isolating the effects would require knowing what path the economy would have taken in the absence of the law. Because that path cannot be observed, the new data add only limited information about ARRA’s impact....

...•Raised the level of real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.5 percent,

•Lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points,

•Increased the number of people employed by between 1.4 million and 3.3 million, and

•Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 4.8 million compared with what those amounts would have been otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers.)...

We elected a new President amid the worst economic collapse of the modern era.

There is no doubt President Obama is a great President.  He has accepted the challenge of piecing the economy back together while still pursuing the moral high road.

What does that mean? 

That means that besides a needed recovery from a global economic crisis the USA economy would suffer on many fronts because there were moral people in the admnistration that would not allow corruption to become a form of econmic stimulus as Bush did.

When corruption is at work it has its own economy.  No different than any other form of crime that is allowed to flourish within a society.  Everyone knows and understands the term "Drug Economy." 

What ends these forms of 'economies?'  Investigation and prosecution and prison and fines.  When a President is determined to cut the size of government to the bone, there is a trade off and that trade off usually manifests in some type of White Collar crime and/or political corruption. 

When President Obama took office, he brought with him an Attorneys General with a long history of corruption focus.  So, with Eric Holder in the Justice Department corruption of any nature was to be ended and with that a continued shrinkage of the economy even though it was illegal.

It doesn't matter that it was a crime and should be ended, it was still contritbuting to the economy and the USA's options for employment was shrinking on all fronts, even the criminal fronts.

...The struggle against corruption, as President Obama has put it, "is one of the great struggles of our time." As I speak, a corrupt official somewhere is enjoying undeserved and illegal proceeds. He may be driving a brand-new luxury car. She may be filling her off-shore bank account with tainted cash. They may be traveling first-class on all-expenses-paid holidays....

...The World Bank estimates that more than one trillion dollars in bribes are paid each year out of a world economy of 30 trillion dollars. That's a staggering three percent of the world's economy. And the impact is particularly severe on foreign investment. In fact, the World Bank estimates that corruption serves, essentially, as a 20-percent tax....

So while crime and punishment doesn't seem like a reason for an economic impact, it sincerely is.  Not only does it shut down economics surrounding crime, but, it also increases the costs to the government in enforcing the laws of the USA.  It is easy to say 'Decrease the Size of Government,' but, it is sincerely something different to actually be able to effectively run a government with far less staff and funding.

...As part of Project Coronado, law enforcement officers executed numerous search warrants at various locations throughout North Texas during the week of October 21, 2009, that resulted in the seizure of more than 1000 pounds of methamphetamine, 4.5 kilograms of cocaine, $660,000 in cash, 50 firearms, 53 vehicles, one boat, two all terrain vehicles, one camper, and two real properties. These seizures are in addition to more than 650 pounds of methamphetamine, 135 kilograms of cocaine, more than 100 firearms, more than $2.4 million in U.S. currency, and more than $1 million in other assets already seized from members and customers of these organizations throughout the investigation by law enforcement in the DFW area....

The Institutions citizens look toward for signs of economic improvement are basically invalid markers.

Suppy side economics doesn't work.  Supply side economics is what "W" practiced with his Commerce Secretary Don Evans.  Supply side economics 'creates' uncertainty.  Basically, build it and they will buy it. 

When the global economic crisis hit there was already too much supply in the market place.  So, it was easy for companies to downsize, lay off workers and still maintain a profit while emptying their warehouses. 

They were all ready, but, the citizens of the crisis were not and neither were the USA banks, at least the local banks, the ones that matter to people.  A record number of them were closed down by the FDIC and while depositers received their monies from failed banks, it left the lending institutions available for citizens and small businesses at a premium or in many instances absent.

WASHINGTON, May 3, 2005 (U.S. Newswire via COMTEX)
The Financial Services Forum today announced that former United States Commerce Secretary Donald L. Evans will join the group as chief executive officer and lead its executive membership in promoting global competitiveness and robust capital markets.
"Don Evans brings to the Financial Services Forum a keen understanding of both the policy process and the benefits of strong, liquid capital markets," said Henry Paulson, chairman of the Forum and chairman and CEO of Goldman Sachs. "All of our members look forward to his leadership in addressing the broad challenges and opportunities confronting financial markets, economies and policy makers."
Evans will interact closely with the CEOs of the largest financial institutions in the world, representing a broad cross- section of diversified financial services.
"In this fast-paced environment of the new global marketplace, leaders in the financial services industry have an opportunity to participate in the dialogue and events that shape global economic growth," said Evans. "Today I have the opportunity and privilege to bring to this unique organization a vision that will allow our citizens to participate in vibrant and competitive markets, whether they be on a local or global level. This is also a great opportunity to begin a broader based education effort to show the …

What is going on already with the economy? If I may?

It's Sunday Night Posted by Picasa

"Let's Hang On" by Frankie Valli

There ain't no good in our good-bye

True love takes a lot of tryin oh I'm cryin

Let's hang on to what we've got
Don't let go girl we've got a lot
Got a lot of love between us
Hang on hang on hang on
To what we've got

You say you're gonna go and call it quits
Gonna chuck it all and break our love to bits
(breakin up) I wish you'd never said it
(breakin up) No no we'll both regret it

That little chip of diamond on your hand
Mean a fortune baby but you know it stands
(for your love) A love to try and bind ya
We just can't leave behind us

Baby (don't you go) Baby (oh no no)
(think it over and) Stay

Let's hang on to what we've got
Don't let go girl we've got a lot
Got a lot of love between us
Hang on hang on hang on
To what we've got

There isn't anything I wouldn't do
I'd pay any price to get in good with you
(patch it up) Give me a second turning
(patch it up) Don't cool off while I'm burning

You've got me cryin dyin at your door
Don't shut me out let me in once more
(open up) Your arms I need to hold you
(open up) Your heart oh girl I told you

Baby (don't you go) Baby (oh no no)
(think it over and) Stay

Let's hang on to what we've got
Don't let go girl we've got a lot
Got a lot of love between us
Hang on hang on hang on
To what we've got

I thought Bush got rid of Al Qaeda in Iraq. Hm. I guess Shell and Halliburton will have to fund private contractors for security.

Road to normality … A Baghdad marketplace that used to be a haven for militias and violent gangs. Photograph: Graham Crouch for the Guardian
And Shell and Halliburton should not forget about the citizens.  They have endured war, maiming and death in order to accommodate them.  I would think Shell and Halliburton would put a 'clause' in their agreements with the provinces that the monies won't be squandered or put in offshore bank accounts but used to REBUILD the country the Plutocracy demanded.

12:00 AM CDT on Sunday, August 29, 2010

The New York Times, The Associated Press
BAGHDAD – Insurgents with al-Qaeda in Iraq (click title to entry - thank you) claimed responsibility Saturday for a wave of car bombings, roadside mines and hit-and-run attacks in at least 14 Iraqi cities and towns, a deadly campaign whose breadth dealt a blow to Iraq's fledgling security forces.
At least 56 people were killed in the attacks Wednesday, in which insurgents deployed more than a dozen car bombs. Two of the assaults wrecked police stations in Baghdad and Kut, a city southeast of the capital.
The statement from the Islamic State of Iraq, an umbrella group for al-Qaeda militants, was posted on one of its websites. It called the assaults "the wings of victory sweeping again over a new day."...

I have a suggestion for Shell and Halliburton.  They should hire Iraqis as their private contractors.  Yep.  Pay them well.  And I would work out an arrangement with the multiple provinces for direct payment.  I sincerely believe working with the central government is what the problem is in Iraq.  If the oil companies meet with provincial leaders they'll probably find more cooperation and less violence.  Consider it a 'kickback.'  No doubt it will work.  It might even be condusive to a peaceful transition in Iraq when its central government fails and the provinces take over.  The way it was suppose to work is that all the provinces were to get a 'cut of the action' to insure national security.

Good luck.

..."In 2005, Iran, Syria and Saudi Arabia were all feeding the violence in Iraq; the United States was adrift without a strategy; and the Iraqi government and security forces were barely existent," said Eurasia Group analyst David Bender.
Today, he argued, those neighbors preferred stability in Iraq, Iraqi security forces had improved and the viability of the Iraqi state was not being threatened as it was in 2005....

It would seem as though there is something about this 'USA Transitioning Out of Iraq' that is good for the region.  The USA is no longer a target of extremists in Iraq so the region has to concentrate on cooperation and security.  Hm.  I'm sure they'll be fine.  I hold "Beirut" as inspiration to the possiblities.