by Mel Watt (D, NC). What a surprise.
Federal Reserve Policy Audit Legislation ‘Gutted,’ Paul Says
(Bob Ivry, 10/30/09 Bloomberg) [emphasis is mine]
"Oct. 30 (Bloomberg) -- Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward a possible vote in the Democratic-controlled House.
"The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff, Paul said today.
"“There’s nothing left, it’s been gutted,” he said in a telephone interview. “This is not a partisan issue. People all over the country want to know what the Fed is up to, and this legislation was supposed to help them do that.” "
"Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated “just about everything” while preparing the legislation for formal consideration. Watt is chairman of the panel’s domestic monetary policy and technology subcommittee."
"Paul said he intends to introduce an amendment to the bill when it comes to the House floor for a vote restoring the legislation’s original language."
Mr. Watt's district includes Charlotte, NC, where Bank of America, the largest lender in the U.S., is headquartered, as noted by the article.
If you are in Mr. Watt's district, or Chairman Frank's district and want to know what on earth the Federal Reserve has been doing with your money and a whole lot of others, PLEASE write to them and tell them they must restore the original bill as introduced by Ron Paul.
Saturday, October 31, 2009
by Mel Watt (D, NC). What a surprise.
Thursday, October 29, 2009
"Stimulus is stimulating all the wrong things."
is no bang at all, for taxpayers.
Take the cash for clunkers program. According to Edmunds.com, the program which cost $3 billion generated 125,000 additional sales. That's $24,000 per car. (See my previous post.)
Ford Fusion, one of the popular "cash for clunkers" cars, could be had for that amount. There is no "bang" in here. The government might as well have bought cars from GM, Chrysler and Ford outright. Better yet, buy them on loans so that Goldman Sachs or Morgan Stanley can securitize the loans and sell the newly created securities to pension funds and university endowments as a very safe investment. If they becomes risky in any way, the Federal Reserve will step in and buy those securities to support the market. (Now that's a bang for the money.)
One of the unintended (and totally foreseeable by many, many people) consequences of this program is the higher used car prices, as totally good, operational cars and trucks are being scrapped instead of going into the used car market. Thank you, Car Salesman in Chief.
Or take the House 1990-page bill on health care "reform" which debuted with fanfare today. According to Congressional Budget Office (which by the way is not known for over-pessimism), the "reform" will cost $1.055 trillion dollars over the 10 years to insure additional 35 million people. That's over $30,000 per person.
In exchange, the government gets to have more bureaucracy they love, get to play in more committees and round tables and working groups, have access to everyone's bank accounts and personal information, set IRS for offenders, decide who gets treatment when and how, and collect taxes on medical devices that may include Q-tip and tampons, again (I'm yet to take a peek at this monstrosity of a bill). O what fun, what fun!
Ohhh, I get it. The government will have a bang, a great time, by sucking up the money from taxpayers who don't get to participate in the fun (or whose idea of fun is totally different from the government bureaucrats and legislators).
according to Edmunds.com. The administration ridicules.
Well, my vote is for Edmunds.com.
Clunkers: Taxpayers paid $24,000 per car
( Peter Valdes-Dapena, 10/29/09 CNN)
"NEW YORK (CNNMoney.com) -- A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com.
"Still, auto sales contributed heavily to the economy's expansion in the third quarter, adding 1.7 percentage points to the nation's gross domestic product growth.
"The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.
"The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales."
The administration tries to paint it as if Edmunds.com is a "naysayer" (a new dirty word these days for this administration):
""It is unfortunate that Edmunds.com has had nothing but negative things to say about a wildly successful program that sold nearly 250,000 cars in its first four days alone," said Bill Adams, spokesman for the Department of Transportation. "There can be no doubt that CARS drummed up more business for car dealers at a time when they needed help the most."" [emphasis is mine]
I thought the cash for clunkers program was all about "fuel efficiency" and "environment". (At least it was sold as such.) So now they are openly saying it was to prop up car dealers. And remember this cash for clunkers program was announced right after a boatload of GM and Chrysler dealers got axed under allegations that the dealers who donated to Republican party were targeted.
(That actually reminded me of Bear Stearns under severe liquidity crisis being forced to sell itself to J.P. Morgan Chase for $2, only to have the Federal Reserve open the discount window to investment banks after the fire sale was official. Nice job, Tim [Geithner].)
Anecdotal evidence suggests that the dealers marked up the cars eligible for the rebate, sometimes even higher than MSRP, then they gave a token discount if at all.
So who got the short end? Taxpayers who had the honor to fund the program to the tune of $24000 per car. But if you take a look at this chart from St. Louis Fed, you'll see it's Edmunds.com who is right. The vehicle purchase collapsed back after the program. All it did was to bring forward the demand that existed anyway without the program.
Auto sales heavily aided by the cash for clunkers program contributed 1.66% to the total GDP growth of 3.5% for the 3rd Quarter. If you subtract this 1.66% and other government spending from the 3rd Quarter GDP, it would have been flat at best.
I personally would have liked to see the GDP flat to ever so slightly positive without the government intervention that distorted the picture so much to render it worthless.
The CNN link above also contains a video interview of ex-Car Czar Steve Rattner, of Quadrangle fame. (What an insult it must have been for Rick Wagoner to be fired by a person like this.)
It looks like an open rebellion at the Fed...
Allan Melzer is an economist who wrote the definitive history of the Federal Reserve. He was interviewed in the BBC World Service radio program Business Daily (first 9 minutes) and spoke about the Fed policies and internal strife regarding those policies. In his own words, he is still very well connected to people inside the Fed.
Melzer claims that the current rescue measures of the Fed will have unintended consequences, and the U.S. is heading for another financial disaster. To avoid it, he says the government should implement the policies of cutting the budget deficit, and slowing the future money growth so that we have a fighting chance.
As to the Chinese continuing to fund the U.S. deficit, he replies it is basically a wishful thinking. The U.S. government projects $1 trillion to 1.5 trillion a year deficit, which would suck up most or all the savings in the world. Is it sensible for the world to fund the consumption in the United States, is it the sensible policy for the U.S.? he asks.
But the bulk of his interview focuses on the Federal Reserve. He is emphatically critical of the Fed chairman Ben Bernanke as highly political (i.e. doing the bidding of the administration), contrary to his public remarks of the Fed "independence". Melzer says his connections, including the governors at the Federal Reserve tell him that they disagree with Bernanke and are encouraging Meltzer to "keep talking".
The Federal Reserve's balance sheet is full of the administration's fiscal policies - buying up agency bonds/MBS to prop up the housing market, direct loans to financial institutions to prop them up, special investment vehicles to manage the assets of the failed investment bank (Bear Stearns) and failed insurance company (AIG) that have been decreasing in value. These have nothing to do with the monetary policy, which is one of the two mandates of the Fed.
Is the Fed interfering in places where it shouldn't be?
Absolutely, he answers, and he is not alone in thinking that way.
Meltzer even says the Fed policies jeopardize the democracy. "Democracy works best when you have the legislature involved in resolving the crisis, not by taking a quasi-independent agency and giving them the power."
He says he hates to see the country go where it's going: high unemployment, inflation, dollar's fall, hurting the rest of the world; Americans will have high unemployment, stagnant or lower wages, and inflation that will decrease their bank accounts.
His final message: Economy IS recovering, but the recovery will be short-lived unless we do something. Now is the time to slowly restore the stability (i.e. getting out of fiscal policies). We shouldn't wait until the next crisis hit, and we have to act in a draconian fashion. Do it now, slowly, deliberately, firmly.
His choice of venue (BBC) is interesting to me. His comments are not for the domestic (U.S.) consumption but an appeal to the international community, i.e. Europeans and Chinese who are increasingly uneasy about wanton spending by the U.S. government and the Fed's monetization. Meltzer seems to be trying to win them over by presenting the opposings view to Bernanke's within the U.S. central bank, promising restraint.
You can listen to the entire interview here.
...so who perpetrated this hoax?
This is a link posted on Lewrockwell.com.
Fake Dutch 'moon rock' revealed (8/28/09 BBC News)
"A treasured piece at the Dutch national museum - a supposed moon rock from the first manned lunar landing - is nothing more than petrified wood, curators say.
"It was given to former Prime Minister Willem Drees during a goodwill tour by the three Apollo-11 astronauts shortly after their moon mission in 1969.
"When Mr Drees died, the rock went on display at the Amsterdam museum.
"At one point it was insured for around $500,000 (£308,000), but tests have proved it was not the genuine article."
The Dutch are laughing about it, and the U.S. officials has no explanation. You can read the whole article by clicking on the link above.
(Was the lunar landing a hoax after all?)
(Oh wait, I have a better theory: the moon once had a lush forest. I wonder if the Dutch determined what kind of wood this "moon rock" was.)
Wednesday, October 28, 2009
If I am to apply technical analysis of stocks to Presidential Job Approval number of likely voters as published by Rasmussen Report, here's what I see.
A declining trend line and inability of the index to recapture the trend line:
A steady decline from the January high. Almost a inverse correlation to the stock market move so far, and in sync with the decline of U.S. dollar. In late May, there were a few attempts to regain and surpass this trend line, but they were unsuccessful. But those failures were to be expected, because, as you can see just prior to those attempts, there was a rising wedge formation in the downtrend (bearish). So, sure enough, after failed attempts, the index resumed the downward trend.
After impulsive low (dipping to 45%) sometime in late August-early September, the index has found the range between 48% and 52%. But again, a weak attempt to regain and surpass the downward trend line was unsuccessful (red arrow in the chart), and the index has recently dropped down below 50% and is oscillating in a very tight range. If I could superimpose the bollinger band, the band would be very narrow, indicating a very low volatility.
A break seems imminent. It could be up, it could be down. We have to keep an open mind. If it is up, the first target is the trend line at 52% or so. If that happens, and if it is to be a trend change, the index has to break above it in a convincing manner. If it is down from here and now, it can threaten to break 40%. If it first goes up near the trend line and then goes down, the drop may still be to the low 40s if the previous two downtrends are any indication. Trend is your friend until it isn't, as many swing traders would say.
Potential trigger for the move: passage of House health care "reform" bill. (The decline in June may have been triggered by the passsage of House climate bill.)
Also, if the stock market declines sharply from here (trigger: 3rd Quarter GDP number tomorrow) and U.S. dollar appreciates sharply from here, the job approval index may recapture the trend line and surpass it, marking a definite trend change.
Some of you may get indignant, even offended, to analyze the presidential poll number as if it were a stock. But come to think about it, it's all about sentiment, poll and stock.
says Rocco Landesman, chairman of National Endowment for the Arts (NEA).
I saw the headline on Drudge Report, and I had to see the original to believe it. So here it is, from NEA's own web site. The paragraph that compares Obama with Julius Caesar appears about half-way into the piece:
We Know Art Works: Rocco Landesman Addresses Grantmakers in the Arts (10/21/09, NEA)
"My answer is pretty simple. There is a new president and a new NEA. The president first. This is the first president that actually writes his own books since Teddy Roosevelt and arguably the first to write them really well since Lincoln. If you accept the premise, and I do, that the United States is the most powerful country in the world, then Barack Obama is the most powerful writer since Julius Caesar. That has to be good for American artists."
That has to be good for American artists?? Was Julius Caesar writing war memoirs good for Roman artists?
Mr. Landesman is a theater producer on Broadway whose appointment by Obama as chairman of NEA was confirmed in August 2009.
Here are some snippets from the speech:
"Our conference title, “Navigating the Art of Change” refers, with some subtlety, to our present circumstances, and since I’m always reading about how blunt I am, I will go along and translate that as “The news is bad.”" [He's using the "change" theme, overused by this administration. What the bad news? That the money is steering away from the arts, according to him.]
"I’m a theatrical producer. Fewer than 20% of the shows that open on Broadway earn back their investment, it is an absolutely terrible business and the people who invest in it know that. So why do they do it? Because they’re optimistic." [Sure they're optimistic. Probably that 20% of the shows more than make up for the bombs.]
"Which brings me to President Obama, our Optimist in Chief." [That Optimist in Chief has been threatening catastrophe and dire consequences unless people don't do his bidding. But clearly since Mr. Landesman is quite willing to do his bidding, NEA is all set for optimism.]
In conclusion, he says this:
"We are grantmakers, not a regulatory or enforcement agency. And will we “advocate” for the President’s agenda as well? If it’s a particular program – e.g. health care reform – no, of course not. But the President picked me for a reason and I decided to go to Washington and sign on with a federal bureaucracy – ugh! – for a reason. And that reason is that within the ethos of this White House, where words like change and hope and aspiration have real meaning, the arts can play a starring role. Whatever might be said on television, radio or blog sites, I have no intention of walking away from the compelling themes of this presidency and a historic opportunity in arts policy."
"Will we realize our hopes? Hey, I’m an optimist. I produced “The Producers,” so I’m sure Mel Brooks would give me permission to appropriate and butcher some lines from that show. We are optimistic, irrational, unrealistic and delusional. But we can’t help it. We’re grantmakers in the arts."
He says NEA does not advocate a particular program of this president, but quite willing and enthusiastic about promoting his agendas in general.
You can read his entire speech by clicking on the link above.
For your information, Julius Caesar (13 July 100 BC – 15 March 44 BC) was Roman military and political leader. He played a critical role in the transformation of the Roman Republic into the Roman Empire (Wikipedia.org).
His literary works entirely consist of memoirs from his military campaigns.
To match Julius Caesar, President Obama would have to fight in Iraq, Afghanistan, Pakistan, etc., as the commander on the front line, and come back to Washington D.C. to reminisce about his exploits, along with astute observation on geography, economy and the peoples.
Not so much about talking (or reading the teleprompter).
Tuesday, October 27, 2009
FT Alphaville cites this from Structured Finance News (10/27/2009):
"The Federal Deposit Insurance Corp. (FDIC) has seen a growing volume of assets acquired from failed banks in its role as receiver of these institutions.
"Michael Krimminger, special advisor for policy, office of chairman at the FDIC, spoke at Information Management Network’s 15th annual ABS East conference in Miami.
"As part of his speech, Krimminger said that the FDIC has acquired more than 100 failed banks and it is likely that the agency might consider securitizing the assets from these financial institutions."
The conference was from October 25 to 27, and Mr. Krimminger was a panelist on an October 26 event.
A security created out of assets held by failed banks that FDIC couldn't sell. If someone can somehow manage to slap on even an "A" rating, it should sell like hot cakes among savvy investors (pension funds, university endowments, money market funds...). That should boost the confidence and morale in the financial markets, no doubt.
After all, with the reputation of the rating agencies (Moody's, Standard & Poor, Fitch) in tatters, it may not matter much anyway whether the security is rated AAA or BBB.
Monday, October 26, 2009
Has Chris Dodd heard about "an unintended consequence"?
According to Bloomberg,
"Senate Banking Committee Chairman Christopher Dodd said he will introduce a bill today to freeze interest rates on existing credit-card balances before a federal law takes full force."
Credit card issuers across the board have already jacked up the rates to stratosphere in anticipation for a new federal law (CREDIT CARD ACCOUNTABILITY RESPONSIBILITY AND DISCLOSURE ACT OF 2009, signed into law on May 22, 2009) which is supposed to regulate the credit card industry to "protect consumers".
So now Chairman Dodd wants to freeze these higher rates in order to protect consumers? How would that constitute a protection? Is this some kind of cruel joke? Or doublespeak, where "protection" means "extortion"?
The damage is already done for consumers by passing this Act. Now Dodd's bill will probably make things worse, as the recent government actions are any indication. So much for "protecting consumers", which is the mantra for every government legislation.
Sunday, October 25, 2009
According to New York Times, the United Nations has assigned an official to investigate the U.S. housing crisis. Ms. Raquel Rolink, UN Rapporteur on Housing, is to make sure people have "adequate" housing in the on-going crisis, particularly in places like New York City.
Affordable? U.N. Puts a Questioning Eye on New York’s Housing
(10/23/09 New York Times)
"Everybody knows New York City is an expensive place to live. But the United Nations wants to know if affordable housing is so tough to come by that it actually violates human rights.
"The United Nations has assigned an official, “a special rapporteur on the right to adequate housing,” to check the city’s affordable housing. The rapporteur, Raquel Rolnik, is to tour the city for the next three days with housing advocates and city officials to “hear the voices of those who are suffering on the ground,” she said.
"The United Nations Human Rights Council appoints a rapporteur, or independent experts, to investigate human rights conditions around the world. In the case of Ms. Rolnik, a professor of urban planning at the University of Sao Paulo in Brazil, her “mission” is to tour New York City and six other places in the United States and to report back to the United Nations General Assembly about housing rights violations and advances.
"After that, “We send off letters to governments to ask, ‘Is this true? What’s going on?’ and to please intervene,” she said."
(You can read the entire incredible article by clicking on the link above.)
The United Nations, after her reportage, will formally declare housing as a basic human right in the United States and elsewhere (Ms. Rolink is already saying that, as you see in the video below). That's my guess. Just like health care is a basic human right, as some people claim. Therefore, the state has to step in to ensure everyone has the equal right to housing and punish the violators, regardless of the economic situation.
What I want to know is: Who invites these people like her?
You can see Ms. Rolink in this video clip. She seems to have a bubbly personality (or her meds are conflicting with each other).