Monday, August 16, 2010

Barker's Newsbites: Monday, August 16, 2010


Soothing music for the contemplative mind...
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9 comments:

William R. Barker said...

http://thehill.com/blogs/on-the-money/banking-financial-institutions/114349-banks-to-benefit-most-from-white-house-program-to-stave-off-foreclosures

Banks will get the biggest benefit from an Obama administration housing program...

(*SMIRK*) WELL, DUH...!

Housing experts expressed concern that banks, not homeowners, will be helped by the White House's $3 billion funding infusion...

(*SIGH*) (BTW... DON'T THEY MEAN THE TAXPAYERS' INVOLUNTARY FUNDING INFUSION...???)

"Giving money to the banks isn't what the government should be doing right now," said Dean Baker, co-founder of the Center for Economic and Policy Research.

"I'm not a big fan; it's ill-conceived," he said.

* ACTUALLY IT'S QUITE WELL CONCEIVED IF YOU FOLLOW WHERE THE MONEY GOES AND HOW IT GETS RECYCLED INTO DEMOCRATIC POLITICAL CAMPAIGNS. (*SHRUG*) THIS IS AFTER ALL THE AGE OF THE DEMOCRATIC KLEPTOCRACY. DON'T BELIEVE ME...??? CHARLIE RANGEL... MAXINE WATERS... CHRIS DODD... THE OTHER "FRIENDS OF ANGELO"... ALEXI GIANNOULIAS...

(*SIGH*)

Foreclosures were up 4% in July with 325,229 filings, a nearly 10% increase over the same month in 2009, according to a report from RealtyTrac, a group that tracks foreclosure filings.

* AND GUESS WHO IS ON THE HOOK FOR YET ANOTHER OBAMA BAILOUT...

The funding allocation announced last week is the third payout for the housing program, pushing the cost of the program to $4.1 billion.

* HEY... FOLKS... REMEMBER HOW THE FINANCIAL "REFORM" BILL WAS SOLD AS A MEANS OF "ENDING BAILOUTS?" (*SMIRK*)

Republicans have argued that it puts taxpayer money at risk, and the special inspector general for the $700 billion Troubled Asset Relief Program is auditing the program.

"It’s troubling that just weeks after the SIGTARP assailed the administration for its lack of success and transparency in managing their signature mortgage-relief program, they have ignored the IG’s warnings and are committing even more money in a failed program that ultimately isn’t helping those who need it the most," Rep. Darrell Issa (R-Calif.) told The Hill.

August 16, 2010 at 8:24 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748703960004575427690901781072.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

U.S. companies issued risky "junk" bonds at a record clip this week, taking advantage of keen investor appetite for returns amid declining interest rates and tepid stock markets.

The borrowing binge comes as the Federal Reserve keeps interest rates near zero and yields on U.S. government debt are near record lows. Those low rates have spread across a variety of markets, making it cheaper for companies with low credit ratings to borrow from investors.

* TO RECAP: WE'RE SO F--KING F--KED...

Corporate borrowers with less than investment-grade ratings sold $15.4 billion in junk bonds this week, a record total for a single week...

* JUST ANOTHER WEEK IN THE AGE OF OBAMA... (*SIGH*)

For the year, the volume of U.S. junk bonds has exceeded $155 billion, 80% higher than in the year-ago period and easily on pace to surpass the record $163.6 billion total for 2009.

(*HEADACHE*)

August 16, 2010 at 8:35 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748703960004575427402731178736.html?mod=WSJ_Opinion_AboveLEFTTop

Congress is gone for August - heaven be praised - but that hasn't stopped unions from quietly mobilizing to push through a big new priority this fall: A Pension Bailout.

We wrote in June about this class of some 1,500 union-run retirement vehicles, in which companies across an entire industry pay into a single pension pool. Hundreds of these multi-employer pools are badly underfunded, thanks to years of labor funneling money into new pay and benefits, rather than into the funds for retirees.

* DELIBERATELY UNDERFUNDED! IN OTHER WORDS, THE UNIONS (AND THE EMPLOYERS!) BET ON A SORT OF "FUTURES OPTION" BASED UPON THEIR HUNCH THAT THEIR BOUGHT AND PAID FOR (VIA CAMPAIGN CONTRIBUTIONS AND OTHER CAMPAIGN ASSISTANCE) POLITICAL ALLIES WOULD SIMPLY BAIL THEM OUT IF NEED BE USING TAXPAYER MONEY.

The big problem with these plans is that when one company in the pool goes out of business, the other companies remain on the hook for the cost of the plan. These spiraling liabilities inspired Pennsylvania Senator and Big Labor favorite Bob Casey to introduce legislation to cordon off "orphaned" pensions - those for which an employer has stopped contributing or withdrawn from the plan - and drop them on the federal Pension Benefit Guaranty Corporation.

The PBGC is already significantly underfunded and taxpayers are its ultimate backstop. Yet the Casey bailout could dump as much as $165 billion in new liabilities on the PBGC, while multi-employer plans would get a clean bill of health.

(*MIGRAINE HEADACHE*)

Senate Majority Whip Dick Durbin has [now] endorsed the bill.

(*GRITTING MY TEETH*)

Congress just completed paying off the teachers unions with $10 billion, and unions will put enormous pressure on Democrats to pass the pension bailout before they lose their huge majorities.

Many companies with multi-employer plans such as the trucking firm YRC Worldwide (organized by the Teamsters) are joining the union lobby effort, and more than a few Republicans could go along. The outrageous all too often becomes the inevitable with this Congress, and it will again unless taxpayers raise a ruckus.

August 16, 2010 at 9:59 AM
Anonymous said...

Sliding down the economic hill and into the sewer shortly.

August 16, 2010 at 10:08 AM
William R. Barker said...

http://www.realclearmarkets.com/articles/2010/08/16/the_hidden_truth_about_the_bush_tax_increases_98625.html

* FOLKS... YOU REALLY SHOULD FOLLOW THE LINK AND READ THE FULL PIECE.

As data from the IRS show, George Bush did not cut income taxes. He increased them.

* LIKE I SAY... YOU SHOULD READ THE ACTUAL PIECE IN ITS ENTIRETY.

In fact, Bush increased income taxes not only for the rich but for at least half of all tax filers.

Only the poor paid less income tax under George Bush than under Bill Clinton.

(*SHRUG*) (THAT'S "COMPASSIONATE CONSERVATISM" FOR YOU...) (*SIGH*)

Go to the IRS website and add up the numbers for yourself.

During the eight years of the Clinton Administration the Federal government collected a total of $5.66 trillion dollars in individual income taxes. During the eight years of the Bush Administration the Federal government collected approximately $7.45 trillion dollars in individual income taxes. The rich - that is, the top 1% of taxpayers - not only forked over a trillion dollars more to Uncle Sam under Bush than under Clinton, their share of the income tax burden increased from 33% to 38%.

During the eight years of the Clinton Administration the rich paid income taxes at a blended rate of 20.6%. During the eight years of the Bush Administration the rich paid income taxes at a blended tax rate of 21.3%. (Yes, the actual tax rate that matters when you fill out the bottom line of your tax return...)

George Bush cut the marginal tax rates paid by the rich, and everyone else for that matter. These are the tax cuts that are about to expire. The marginal tax rate is the rate you pay on the last dollars you earn. The blended tax rate is the effective rate you end up paying across all of your income. The total amount of tax you pay equals your blended tax rate times your taxable income. And it's the total amount of tax collected that finances the government.

As hard as this is for some people to accept, the rich change their behavior when their marginal tax rates are reduced. The working rich work harder and longer. They expand their businesses, creating jobs. The idle rich shift investments from lower yield tax-free government bonds into higher-return taxable investments, the kind of investments that finance companies that create jobs. Exactly the opposite happens when marginal tax rates go up, as they are scheduled to do unless Congress acts.

The rich do not get richer because they are stupid. Being rational people, they are usually happy to pay more taxes if at the same time they also take home more after-tax dollars. And that's exactly what they did under George Bush.

Do these facts surprise you? Is this the first time you've heard that George Bush was the biggest tax collector in American history? Were you aware that the rich paid a higher blended tax rate under Bush than under Clinton? Since reporters seem more willing to parrot talking points than dig up facts, spend a little time on www.irs.gov and see for yourself.

You can also ponder what this selective national blindness says about our dysfunctional politico-pundit complex and its handmaidens in the media.

August 16, 2010 at 2:23 PM
William R. Barker said...

http://www.newstatesman.com/asia/2010/08/china-research-chinese-science

China, driven by a desire for prestige and its own Nobel laureates, could soon lead the world in scientific research. Last year, following a decade of phenomenal growth, China became the second-biggest producer of scientific knowledge in the world. In 1998, Chinese scientists published about 20,000 articles. In 2009, they produced more than 120,000. Only the US turns out more.

According to figures released this year by the US National Science Foundation, there are now as many researchers working in China as there are working in the US or the EU. The state is encouraging Chinese scientists trained in the west to return home, offering them enormous salaries and access to world-class laboratories. (In 2008, for example, the molecular biologist Yigong Shi, one of Princeton University's rising stars, walked away from a $10m research grant to set up a lab at Tsinghua University in Beijing.)

August 16, 2010 at 2:24 PM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704868604575433270256793324.html?mod=WSJ_hps_MIDDLEFifthNews

Former House Majority Leader Tom DeLay, a Republican whose legal troubles helped propel Democrats to control of Congress in 2006, said Monday that the Justice Department informed him he is no longer the subject of a federal criminal probe.

(*SMIRK*)

* NOW I'M NOT DELAY FAN, BUT AS I PREDICTED ALL ALONG... (*SIGH*)... THE CHARGES AGAINST HIM WERE POLITICALLY MOTIVATED AND WOULDN'T STICK.

"The case was so weak…I was never interviewed by the investigators," Mr. DeLay said.

(*SHRUG*)

August 16, 2010 at 7:28 PM
William R. Barker said...

http://www.nypost.com/p/news/opinion/opedcolumnists/mortgage_madness_4eBKDKDuKBSxKJH2ZG0U2J

President Obama's flagship mortgage "modification" program is a colossal failure - it's a boondoggle that's wasting billions of taxpayer dollars.

The program's supposed to help Americans in danger of losing their homes - but the big winners...

* BESIDES THE BANKS...

...are richly paid executives at Fannie Mae, the now-government-run mortgage giant.

Let's look at a federal lawsuit filed in June by a former Fannie Mae executive who claims she was fired in January because she blew the whistle:

Caroline Herron was terminated from Fannie in a 2007 downsizing wave; she was brought back in as a consultant in spring 2009 to help Fannie administer Obama's mortgage-modification program.

Fannie plainly thought she had expertise: It hired her to work 40 hours a week at $200 an hour - that's $8,000 a week to help people struggling with their mortgage payments hopefully get modifications.

* YOU'RE READING WHAT I'M READING - RIGHT FOLKS...?!?!

In her suit, Herron claims she complained to Treasury officials that Fannie was pushing for trial mortgage "modifications" to start long before the borrowers had submitted backup documents to prove eligibility. She alleges that Fannie executives thwarted her efforts to streamline procedures so that only truly eligible borrowers would be signed onto trial modifications.

Indeed, she claims Fannie execs intentionally signed up premature modifications with ineligible borrowers - because the execs qualified for bonuses up to 20% of their salaries if they produced enough trial modifications, even if few ever became permanent.

(*SMIRK*)

And "incentive pay" at Fannie and its sister government mortgage agency, Freddie Mac, isn't chickenfeed. Last Christmas Eve, Obama ordered that the 12 top execs get bonuses totaling $42 million - including $6 million apiece for the two CEOs.

(*SNORT OF ABSOLUTE DISGUST*)

Wasn't this the administration that wanted to prevent huge bonuses at firms that got government bailouts?

August 16, 2010 at 7:28 PM
William R. Barker said...

http://www.minyanville.com/businessmarkets/articles/Nassim-Nicholas-The-Black-Swan-Fed/8/16/2010/id/29610?page=full

"The Fed Declares War on America" - Does this title sound extreme?

If you've been one of those Americans who has saved more than you borrowed and think your wealth is safe in savings accounts and bonds, this may not be extreme at all. As bond owners, CD holders and passbook savers, consciously or unconsciously Americans have stored wealth believing that the US government has their back. This week the Fed made it clear that additional quantitative easing is on the way and that savers of dollar-denominated investments won't be protected to any degree by Washington.

The message, that the government has decided it's politically acceptable to torpedo the life savings of many Americans, is disconcerting.

The fact that once again this is being done 80 days before elections to ease the burdens of even those who have borrowed in a reckless fashion is an unspoken but clear decision.

The revenue-generating ability of the government doesn't increase with “quantitative easing,” better known simply as “money printing," and the value of past US government promises to pay weakens while the supply of dollars increases. Ask any freshman econ student and he'll tell you that increasing supply without commensurate demand increase doesn't bode well for an asset.

At some point the dramatic expansion of our money supply (the simple definition of inflation) will lead to obviously decreased purchasing power of our dollars. As David Rosenberg highlighted, America is 234 years old yet more than half of our nation’s money supply has been created within the last four years. [L]ooking forward the dollars' fundamentals have never been worse.

August 16, 2010 at 7:29 PM

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