The Imperial Presidency strikes again. I want to have a formal apology from the Republicans who set Obama up so he could do his magic – Obama issues signing statement on $106B war bill –The Hill
This one will not be going away soon — More Power For the Fed? Seriously? –HoweStreet
TD is one heck of a fellow. Goldman Sachs Principal Transactions Update: Back With A Vengeance — this is beginning to smell … bad … –Zero Hedge
You’re not going to be able to say that nobody told you. — S&P May Cut $235.2 Billion in Commercial Mortgages –Bloomberg
Here’s a start are a regulatory framework that has some merit — The Republican Regulatory Reform Plan –Zero Hedge
And we thought the Chinese were just laughing at Timmy. So … tin foil hat in place … do you think the Chinese will declare financial war on us? Have they already done so by being responsible for the $134 billion of bearer bonds? Just asking …
Nouriel Roubini responds to Bloomberg report Dollar Drops as China Repeats Call for New Reserve Currency here The Chinese Proposal for a New Global Super Currency.
Sooner or later the yahoos in Washington and New York are going to start endangering our ultimate national security — our economy.
Oooops … I guess they already have.
Today’s sub trend/lesson is … drum roll … not all Republicans/conservatives are arses and not all Democrats/Liberals are naïve fools. Moral – don’t judge a potential ally by his clothing. We’re going to need all the friends we can get to stop the turkeys to the left and the sharks on the right from really screwing up our country.
Accountability, transparency, responsibility, moral hazard are in the greater good — Ron Paul’s Bill Would Put Fed on the Hot Seat
–AFP
When the FEDury finally does slow down its spending what happens? — The temporary problem: Rolfe Winkler — Spending Money is easy … stopping is a whole lot harder
–Alibaba.com
Voices are beginning to say Whoa Nellie — Robert Scheer: Obama Is more of the same
–Appeal Democrat
Duh! Hello Congress … the power of the FEDury is a scary thing. Personally I don’t believe in benevolent rulers or the Easter Bunny — Bernanke Grilling May Weaken Case for Fed as Risk Regulator
–Bloomberg
Not everybody things banks are too big to fail — Bank of England: no bank ‘too big to fail’
–Business Week
Bill Bonner is always good to read — The Public Still Has Faith in Economists – But Why?
–Daily Reckoning
Euphemism Alert! I believe the evidently politically incorrect term is socialism — Is the Obama Administration’s Financial System Overhaul Pushing Us Toward State Capitalism?
–Money Morning
Don’t discount this liberal she could be a valuable ally in the effort to prevent what’s going on in Washington while folks quake in their boots — Arianna Huffington: We’ve Gone From Saving Wall Street in Order to Save Main Street to Just Saving Wall Street
–TheUnion.com
Well … gee … you mean bankers just make good money vs. ridiculous bags full? — Plain-Vanilla Financing Could Melt Bank Profits
–Wall Street Journal
For More Headlines
Clueless on Wall Street … Wall Street Begins Campaign to Thwart ‘Populist Overreaction’
–Bloomberg
It ain’t over and the fat lady is only warming up offstage – there’s roundup mixed in with the fertilizer they’re spreading … Record Credit Card Losses Force Banks To Support Off-Balance Sheet Vehicles
–Business Insider
Even folks in NC are catching on to the scale of hubris that BB is showing — Fed tried to keep other regulators out of the loop
–Charlotte Observer
Being fiscally conservative has never been cool, but it sure keeps you warm in the winter … Ron Paul: ‘Anti-Fed Before Anti-Fed Was Cool’
–Lew Rockwell, CA
Tin foil hat alert – this story started out 3 days ago on a fringe site and today WSJ’s sister site picks up on it – dang … here’s hoping he’s wrong — Latest Schultz Shock: a ‘bank holiday’ — Commentary: A leading newsletter paints a grim picture of the future
–MarketWatch
California is showing everybody how to tax. California weighs global warming fees on producers — Trickle down taxes are coming
–Modesto Bee, CA
This is a big deal – don’t let it get whitewashed. Lawmaker accuses Fed of “cover-up” in BofA deal
–Reuters
Gee … the whole world seems to be catching on … Bernanke keeps his enemies close
–AsianTimes
Obama is going to get change. Too bad he didn’t/hasn’t seen it coming … Are U Prepared 4 Real Change???…..it’s getting closer!!!!!
–Motley Fool
Chairman of the FDIC wants to be diplomatic on proposed bank regulatory reform and keep from getting fired:
The big banks are using taxpayer money to manipulate the oil market. Here’s an excerpt from Phil Davis’ Friday post at Phil’s Stock World:
NYMEX futures expire on Monday and the wizards of Wall Street traded 75,000 contracts 265,000 times yesterday, driving the few remaining barrels from $70.15 to $71.75 at the close and a further $1 in overnight trading (so far). That’s right, they have canceled delivery of over 300M barrels of crude (1,000 barrels per contract) that were paid for and scheduled for delivery to the United States in July at prices between $60 at the beginning of the contract period to $74 at the top. One would think that the holders of contracts for 325M barrels of crude below $60 on May 21st would have been thrilled to take delivery as oil rocketed straight up from there to $74 but, FOR SOME MYSTERIOUS REASON, they didn’t want the barrels after all and they canceled their orders.
Well, not so much canceled as moved them… NOW they”want” 266M barrels of oil for August delivery and 132Mb in Sept, 44Mb in Oct, 26Mb in November and 150Mb in December. I will go out on a limb and predict right now that HALF of the remaining 75Mb scheduled for July delivery, plainly viewed on this NYMEX chart, will be CANCELED by Tuesday. That will be energy traders creating a 40 Million barrel delivery shortage to the United States of America in the month of July, at which time they will point to future demand (the long contracts they roll to) and the current “shortage” as evidence of why they need to charge the American people an EXTRA $5.7Bn for the month’s supply (+$10 per barrel). WHEN WILL THESE CRIMINALS BE STOPPED?
Is this not economic terrorism? How does this differ from Nigerian terrorists blowing up a pipeline when traders on the NYMEX floor shred contracts and create oil shortages during our summer driving season? There is no explosion, there is no gun but you WILL be forced to reach into your pocket, as will 200M other driving Americans and you will pay that extra .50 per gallon for gas. At 50 gallons a month it’s “just” a $25 robbery but it’s committed against 200M of us and that’s a nice chunk of change for the terrorists - $5Bn a month per 50 cents they raise gas prices (up from $1.50 in January already). Why do we regulate the phone company, the cable company, the satellites, water and even the electric company but these bastards are allowed to run wild and pillage our nation? And how foolish are our nation’s retailers, who stand mutely by while their production costs increase and the discretionary income of their customers is diverted away from American companies?
I’m sorry but I warned that high oil and commodity prices would wreck the economy last year and I was right and here we are, just 12 months later, zooming right along the same path while energy company employees on TV tell us that a commodity rally is a good thing…
Readers can subscribe to Phil’s Stock World and get in on exciting option trading strategies for the conservative and long term or those interested in daily action. Tell ‘em Swamp Report sent you!
Swamp Report usually focuses on the financial matters and trends particularly as related to government policy. Building a larger welfare class may seem like a good way to build a base of dependent voters, but in the long run, the government debt needed to fund such vote buying is unsustainable and will backfire. President Clinton knew this truth trumped any ideological goals, but sadly, the current administration does not. Below, Howie Rich, Chairman of Americans for Limited Government:
The Restoration of Dependency
By Howie Rich
Multi-billion dollar bailouts. A new national energy tax. The return of socialized medicine.
Almost every day we’re seeing another big government offensive taking direct aim at the core ideals on which our nation was founded—and upon which rests our essential strength.
Yet of all the counter-capitalist pillars included in President Barack Obama’s new “Era of Obscenely Big Government,” the is receiving a surprisingly small amount of ink.
Perhaps that’s because our sympathetic (if not sycophantic) mainstream media doesn’t want to throw a monkey wrench into the tired old “we’ve got to do something” refrain that has already seen $13 trillion spent, lent or pledged on “economic recovery” in the last year alone.
Or perhaps it’s because this “stealth” dismantling of welfare reform doesn’t fit neatly within the “Post hoc, ergo propter hoc” framework often used to justify so many of Obama’s policies.
After all, you can’t pin an “after Bush, therefore because of Bush” tail on this issue—which has its roots in the administration of President Bill Clinton.
Passed in 1996, the bipartisan “Personal Responsibility and Work Opportunity Act” represented a fundamental shift in the way our nation approached welfare. Rather than incentivizing states to expand their welfare rolls, the new law sent money in block grants which offered incentives for taking people off of welfare—and encouraging them to find jobs.
Not surprisingly, when the federal government stopped rewarding the perpetuation of poverty, it stopped seeing so much of it.
Contrary to the doom and gloom, “death in the streets” pronouncements of government bureaucrats chained to the failed “War on Poverty” approach, the results of welfare reform (in conjunction with a reduction in capital gains taxes and other economy-empowering reforms) were nothing short of phenomenal.
Poverty rates plunged, welfare rolls were cut in half, unemployment fell and the government recorded its first annual surpluses in decades.
At the heart of this free enterprise success story was the fact that personal responsibility, not government dependency, had been incentivized—a fairly self-evident truth that nonetheless had been ignored for decades by Washington politicians.
“The advocates of (the old system) had no inkling that these good-hearted strategies would lead to enduring cycles of poverty and family disintegration that threatened to consume entire generations,” writes Dr. Hunter Baker, a professor at Houston Baptist University. “Wishing for good outcomes resulted in disaster. It was only when a more tough-minded view took hold (the idea that it is reasonable to expect productivity and initiative out of healthy, working age persons) that many managed to escape mere subsistence.”
Sadly, Obama’s plans represent a nothing short of a complete U-turn back to the days of dependency and subsistence. In fact, one of the little-publicized components of the massive “American Recovery and Reinvestment Act” is the unfortunate “reinvestment” it makes in poverty and dependency.
The “bounty system” of paying cash-strapped states to expand their welfare rolls is back, only this time with an even higher incentive – a whopping $4 to $1 cash bonus for every new family that state bureaucrats are able to hook up to the government dole.
“The original goal of helping families move to employment and self-sufficiency and off long-term dependence on government assistance has instead been replaced with the perverse incentive of adding more families to the welfare rolls,” a recent report from the Heritage Foundation states.
This approach clearly benefits no one—well, except for government bureaucrats and Obama’s friends at ACORN, who rely on the perpetuation of poverty and dependence to keep their various scams up and running.
The sad, unavoidable reality is that the more one examines Obama’s position on welfare, the more obvious it becomes that his goal is not to help people who are poor, but rather to keep them dependent on his government to provide for their every need.
The author is chairman of Americans for Limited Government.
http://blog.getliberty.org/default.asp?Display=1297
Zero Hedge has a post highlighting the fact that while continuing employment claims have risen lately, the rise has been much outpaced by the increase in total federal dollars flowing to the unemployed:
“In summary, over the past two years, while unemployment claims have climbed from 2,688 million in March 2007 to 6,157 in May 2009, monthly unemployment payments have skyrocketed from $3,238 million to $10,807 over the same time period.”
The Seattle Times runs an AP story (ht ZH reader) that partially explains the discrepancy, but casts doubt on the true meaning of the reported continuing claims number, without all of the facts:
Still, millions of Americans are receiving unemployment compensation under an emergency federal program authorized by Congress last summer and extended by the Obama administration’s stimulus package.
About 2.4 million people received benefits under that program in the week ending May 30, an increase of more than 102,000 from the previous week. That’s in addition to the 6.7 million people receiving benefits under the 26-week program typically provided by states.
Thus, people can appear to “drop off” the continuing claims number – about 148,000 dropped off in the most recent report – yet they are still unemployed and still receiving unemployment benefits…just from a different program. Note that the increase in the number receiving benefits under the extended program for May 30 as reported by AP was 102,000. For that same week (May 30) the DOL reported a increase of 93,810:
“The advance unadjusted number for persons claiming UI benefits in state programs totaled 6,127,413, an increase of 93,810 from the preceding week.”
The extended unemployment program is a federal , not state program. The sum of the two increases is what’s relevant: 195,810 “true” continuing claims for week ending May30.
Simon Johnson has a good analysis of the administration’s so-called regulatory reform:
Writing in the New York Times today, Joe Nocera sums up, “If Mr. Obama hopes to create a regulatory environment that stands for another six decades, he is going to have to do what Roosevelt did once upon a time. He is going to have make some bankers mad.”
Good point – but Nocera is thinking about the wrong Roosevelt (FDR). In order to get to the point where you can reform like FDR, you first have to break the political power of the big banks, and that requires substantially reducing their economic power - the moment calls more for Teddy Roosevelt-type trustbusting, and it appears that is exactly what we will not get.
Interstate banking should have never been allowed. The issue is an old one, but still real. If that had been stopped, it would have prevented concentration in too big to fail banks. The best reform is to go back to what had been proven to work over about 60 years. We need to break those big banks up and restrict their territories, geographically and with respect to business lines. But as Dr. Johnson says:
The reform process appears to be have been captured at an early stage – by design the lobbyists were let into the executive branch’s working, so we don’t even get to have a transparent debate or to hear specious arguments about why we really need big banks.
Even undergraduate students in economics are taught that “trade makes everyone better off”. Sure, some workers suffer as domestic industries which are not competitive in the world market shrink. But new jobs open up in other domestic industries which ARE competitive on the world stage. However, the corollary is also true: Shrinking trade hurts everyone. There’s a world of hurt out there:
