Saturday, July 30, 2011

Iraq says...

...It will buy 36 F-16 fighters from U.S.

Tweet from @jtLOL

If you blow stuff up & kill people, you're a militant or insurgent. If you want less spending & lower taxes, you're a terrorist

Neil Cavuto-FOX News

"Tax Hikes are Back on the Table".

World Population...

...to Top 9 Billion by 2050, 49% Growth from Africa

Syrian army colonel...

...says he has defected together with "hundreds" of soldiers - AFP

http://aje.me/kSZ2wl

The Big Mac Index

Yuan is at fair value to the dollar, burger wise | Reuters cc: @TheEconomist

http://ow.ly/5QgSu

China's population of 15- to 24-year-olds...

...is projected to decline by 44.6 million this decade

Friday, July 29, 2011

President Obama Is No Longer Tethered To Reality

President Barack Obama’s speech to the nation Monday night was highly disturbing.  Because read carefully, it reveals a president wildly divorced from the fundamental realities of the nation he is supposed to be leading.
President Obama actually told America on national television that it is a nation “with a system in which the deck seems stacked against middle class Americans in favor of the wealthiest few.”  It is incomprehensible how a man serving as president of these United States could make such a fundamentally false assertion about his own country

Obama, Geithner May Regret Threats of Default: Caroline Baum

For Washington's part, the short-term focus on raising the $14.3 trillion debt limit by the Treasury's Aug. 2 deadline has become a diversion from the nation's long-term fiscal problems. The federal government has to rein in the growth of its debt so that it becomes
manageable in relation to the size of the economy.

-->
http://www.bloomberg.com/news/2011-07-29/obama-geithner-may-regret-threa
ts-of-default-commentary-by-caroline-baum.html

Libya's rebels...

....were in disarray on Friday after the mysterious killing of their leading military commander triggered fears that opposition fighters battling to oust Col Muammar Gaddafi could instead turn their weapons on each other.

Units loyal to Gen Abdel Fattah Younes, who was shot dead on Thursday, reportedly abandoned the rebel front line near the oil town of Brega and poured into the opposition capital of Benghazi to avenge their commander's death.

The U.S. homeownership rate...

...fell to the lowest level since 1998 in the second quarter as stricter lending standards blocked purchases and
foreclosures forced people out of their residences. The ownership rate through June was 65.9 percent, the lowest since the same rate 13 years ago, the U.S. Census Bureau said in a report today. The vacancy rate, the share of properties empty and for sale, was 2.5 percent, compared with 2.6 percent in the first quarter.
Pelosi: GOP Connecting Debt Limit to Reducing Deficit 'Appalling'

House Minority Leader Nancy Pelosi (D-Calif.) said that House Republicans should not be connecting an increase to the debt limit to reducing the nation's current $1.5 trillion deficit. "Over 30 times we have lifted the debt ceiling since President Reagan was president.

Over 30 times, not one time did we subject a president to this burden of
saying you can't - we won't lift it unless we reduce the deficit," said
Pelosi

-->
http://cnsnews.com/news/article/pelosi-gop-connecting-debt-limit-reducin

Obama: Why Isn’t Anyone Thinking About My Reelection?

President Obama​ used an interesting phrase to describe John Boehner​'s debt ceiling bill today: "It's a plan that would force us to relive this crisis in just a few short months… in other words, it does not solve the problem."

This is a patently ridiculous statement on its face; the debt ceiling has to be raised regularly–as Obama has frequently reminded the American people during this debate. Does that mean "the problem" is never solved? If so, the GOP has nothing to do with it. Is Obama pushing for the elimination of the debt ceiling? No, what he meant to say was: "In other words, it does not solve my problem."


---> http://www.commentarymagazine.com/2011/07/29/obama-reelection/

Noonan: 'Obama Is a Loser'


Noonan: 'Obama Is a Loser'

Goldman Sachs and Citigroup...

...pulled a $1.48bn (€1.03bn commercial mortgage-backed security from the market late Wednesday after an 11th-hour internal review by Standard & Poor's, throwing the $700bn CMBS market into disarray. (The Wall Street Journal)

Primary Dealers called to NY Fed...

....for meeting at noon today The NY Fed just asked primary dealers to come downtown today at noon to meet with Fed and Treasury Dept officials. We expect to hear them outline a contingency plan for next
week.

Consensus forecast...

...For Non Farm Payrolls next week is +98K

The 6 month average is currently +126K

GDP

In addition to the disappointing 1.3% for second quarter versus expectations if 1.8%, fourth quarter was revised down from 3.1% to 2.3%. First quarter was sharply revised as well from 1.9% to 0.4%

This and the sharp revisions to previous quarters suggest a more troubling and fundamental slowdown may be underway

Thursday, July 28, 2011

CME will no longer...

...Accept short term Treasuries on the same basis as cash

Both the FT and WSJ carry stories...

Both the FT and WSJ carry stories...

...that IMF officials (particularly those from Emerging Markets) are unconvinced on the latest Greek bail out package and nervous about committing more funds. The assumption was that the IMF would provide €36bn of the €109bn - maybe the EFSF will have to carry more, further reducing its potential firepower

Obama 'Unpresidential,' 'Petulant' 'Dividing Us': Langone

President Obama's conduct during the debate over the debt ceiling has divided the country and will inflict damage that will last well after the battle is over, former New York Stock Exchange director Ken Langone said.

Full Story:
http://www.cnbc.com/id/43924372

US Downgrade Good for Dollar? Don't Rule It Out

When "the dollar is the reserve currency underpinning the system, waking up to discover that U.S. debt may not be AAA after all is surely a market event," says an analyst at one European bank.

Full Story:
http://www.cnbc.com/id/43922241

Initial Jobless claims...

...Fall below 300K for the first time since early April

Wednesday, July 27, 2011

'Why I Support the Boehner Plan'


This Time The Debt Ceiling...


... Hike Really Is Different

Mohamed A. El-Erian’s latest article...

..."The 'how' undermines the 'what' of the debt ceiling debate," is now on PIMCO.com.

http://bit.ly/or725g

Tweet from @jestei

@jestei: In most cities, people boast about the superiority of their sport team. In DC, people brag about their crushing CBO score.

The CBO...

...scored the revised Boehner debt ceiling plan as a $22 billion cut in 2012, the only enforceable year. Amounts to two days spending.

Boehner's office...

...says revised debt plan would cut spending by $917 billion over 10 years, citing CBO

CBO confirms...

...cuts exceed hike in adjusted GOP bill; includes $22B in 1st yr deficit reduction

http://bit.ly/pC92Du

Decline of small-town America

Share of rural population hits new low as cities, suburbs boom:

http://apne.ws/r4XYOT

Aren't we overdue...

...For a Presidential Press Conference, Television Address, or Town Hall meeting?

Obama, FDR, and the Strategy of Massive Spending

 
 

Sent to you by wam4 via Google Reader:

 
 

via The Corner by Burton Folsom, Jr. & Anita Folsom on 7/27/11

"FDR comes in, he tries all these things with the New Deal; but FDR, contrary to myth, was pretty fiscally conservative." Thus spoke President Obama at a town-hall meeting at the University of Maryland. The president likes FDR and believes the two of them think in similar ways. That may be true, but the major myths we need to correct are those put forth by President Obama on the success — or lack thereof — of FDR's economic policies. Let's look at three myths about FDR that Obama supported in his town-hall speech.

First, FDR was "pretty fiscally conservative." False. No president before FDR ever grew the national debt more rapidly in peacetime. In fact, FDR increased the national debt by more in his first two terms than 30 presidents combined did before him, more than doubling it. And in April 1939, toward the end of his second term, unemployment was 20.7 percent — greater than it had ever been before the Great Depression. All that massive spending and almost no jobs created with those tax dollars.

Keep reading this post . . .


 
 

Things you can do from here:

 
 

Rule by Rating Agencies

 
 

Sent to you by wam4 via Google Reader:

 
 

via The Corner by Ramesh Ponnuru on 7/27/11

This, from Holman Jenkins, sounds right to me:

For the unwarranted power granted to rating agencies, which after all merely issue opinions, blame U.S. law and regulation. These require bankers, pension funds and other regulated investment funds not just to consult ratings, but to act on them.

Keep reading this post . . .


 
 

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Growth Slowed in 8 of 12 U.S. Regions: Fed

The Federal Reserve said the economy grew at a slower pace in more parts of the country since the beginning of June as shoppers restrained spending and factory production eased. "Economic activity continued to grow," the Fed said in its Beige Book survey released today in Washington.

"However, the pace has moderated in many districts." Growth
slowed in eight of the Fed's 12 regions, compared with four in the last survey, the central bank said. The report underscores Fed Chairman Ben S. Bernanke's message to Congress earlier this month that maintaining record monetary stimulus is necessary to bolster the economy

-->

http://www.bloomberg.com/news/2011-07-27/fed-says-growth-moderated-in-ei
ght-of-12-regions-on-restrained-spending.html

Some Facts About the Debt Limit

 
 

Sent to you by wam4 via Google Reader:

 
 

via Power Line by John Hinderaker on 7/27/11

This chart by the Heritage Foundation offers a great deal of information about the history of changes in the debt limit–which, of course, tracks closely with the history of growing federal debt. You can see at a glance how the skyrocketing debt of the last few years smashes all historical precedent:

The chart also responds implicitly to some recent Democratic Party talking points. The Democrats like to point out that the ceiling was raised 18 times during the Reagan administration. That's right, an average of about once every six months. In other words, those increases were small and highly temporary, as you can see from the chart. It is also noteworthy that the total increase in the debt ceiling during the Reagan years was almost exactly equal to the increase in the debt ceiling during the Clinton administration. Neither, however, is in the same universe with the spiraling debt the Democrats have racked up since they took control of Congress in 2007.


 
 

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No growth, no jobs

 
 

Sent to you by wam4 via Google Reader:

 
 

via Free exchange by R.A. | WASHINGTON on 7/18/11

I AM prepared to accept that the American economy faces some, and perhaps many, structural labour market problems. It would be strange if there were no structural issues slowing employment growth, and it would be stranger still if a sustained period of very high long-term unemployment didn't add to these problems. But if you're looking to explain the painfully slow recovery in labour markets, you don't need to focus on these structural problems. All you really need to look at is the path of GDP growth.

The recession was an ugly one, at least relative to postwar American recessions. Real output grew just 1.9% in 2007, was flat in 2008, and fell 2.6% in 2009. That performance was more than enough to create a large pool of unemployed workers. The American economy is estimated to have a trend growth rate between 2% and 3%. To reabsorb idled workers while also accommodating normal labour force growth, the economy needs to grow above that trend rate. In 2010 it barely managed this, growing at 2.9% for the year as a whole. In the first quarter of 2011, growth slowed to just 1.9%—below trend. We have yet to get official numbers on the second quarter, but it's a good bet that the expansion performed below trend once again. Goldman Sachs estimates the annual growth rate in the second quarter at just 1.5%. Macroeconomic Advisers puts it at 1.4%. 

At best, closure of America's output gap seems to have stalled. And unsurprisingly, the labour market has failed to add enough jobs over the past couple of months to keep up with normal labour force growth. Meanwhile, early forecasts for third quarter output growth are being revised down. That seems premature to me; the third quarter has only just begun and it still seems likely that low petrol prices and a recovering Japan, among other things, may buoy American output. But the broader point is this: two years into recovery, GDP has simply not recovered fast enough to put unemployed Americans back to work, and it isn't clear that a sustained acceleration is on the way.

The question then becomes why growth has been so slow. I'll address that in a follow-up post.


 
 

Things you can do from here:

 
 

Worried About a Downgrade?

 
 

Sent to you by wam4 via Google Reader:

 
 

via The Corner by Veronique de Rugy on 7/27/11

According to Politico, today the risk of a downgrade by S&P is what's scaring the White House and Congress the most, not default.

It's not the default that strikes the most fear in the White House and Congress these days. It's the downgrade.

Keep reading this post . . .


 
 

Things you can do from here:

 
 

Ten things that happen if the Boehner bill gets through

 
 

Sent to you by wam4 via Google Reader:

 
 

via Right Turn by Jennifer Rubin on 7/27/11

We know what happens if the Boehner bill fails in the House. There is no alternative plan. We suffer whatever shock to the U.S. and world economies that will follow a default. The president will go to the country, claiming the Republicans endangered the country's economy and global standing. But what happens if the House passes the Boehner bill?

1. The Boehner bill becomes the inevitable solution to the crisis. As Keith Hennessey explains, we also make progress in restoring fiscal sanity:

2. The House would have done its job without violating the core promises the speaker made: more spending cuts than dollars increased in the debt ceiling. And no tax hikes.

Read full article >>


 
 

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Reports: House GOP lining up behind Boehner’s plan

 
 

Sent to you by wam4 via Google Reader:

 
 

via Hot Air » Top Picks by Allahpundit on 7/27/11

"[T]his may not even be close."


They're getting their asses in line. [T]he opposition bloc led by [Jim] Jordan appears to be crumbling, as leadership's message seems to be sinking in. Sources tells NRO that a number of members who were confirmed no votes against the Boehner plan announced during the meeting that they would be voting yes. One of those [...]

Read this post »


 
 

Things you can do from here:

 
 

All S&P 500 sectors...

...Down today, technology the worst

US Durable Goods ex-Transportation...

...Has been 0.7% or lower for 3 straight months for the first time since January 2009

Obama's national poll numbers...

...aren't good, but they're worse in battleground states

--> http://bit.ly/nFgfEF

Treasury bonds...

...are now judged to be riskier than comparable debt of companies like Coca-Cola - says the credit default swap market

Weekly Standard Editor Bill Kristol..

...tells conservatives a vote against Boehner is a vote for Obama

US government social welfare benefits...

...Now account for 17.8% of personal income -- highest on record

Broad mortgage application index...

...declined 5.0% , refinancing application index declined 5.5%, purchase application index declined 3.8%.

Boeing...

...Beats Expectations and Raises Guidance

IMF forecasts...

...2.1% GDP growth in 2011, 1.9% in 2012 and 2.0% in 2013 for France

Durable goods orders...

...Fell 2.1% in June, the second drop in 3 months

Monday, July 25, 2011

Tweet from @JRubinBlogger

@JRubinBlogger: obama is the problem, not dems or GOP in Congress http://wapo.st/nns4hB

Tweet from @stephenfhayes

@stephenfhayes: One thing I'll be looking for in POTUS remarks tonight: Will he strongly reiterate his veto threat on a short-term debt ceiling hike?

Japanese stocks...

...open higher, with financials stronger; Nikkei Average up 0.2%

Tweet from @stephenfhayes

@stephenfhayes: My guess: POTUS spends much of the speech tying fight over debt ceiling to economy more broadly. WH looking for an argument for next 17 mos

Tweet from @jimgeraghty

@jimgeraghty: I think we're just one wildly-hyped long national televised address from Obama away from solving the debt ceiling issue.

Tweet from @jaketapper

@jaketapper: Hey, I know! Maybe pass a bill in one body of Congress that the other body can also pass! #SoCrazyItJustMightWork

President's last major speech...

...in June, about withdrawing from Afghanistan-drew 25M viewers, smallest audience he has had

Atlantic contagion

 
 

Sent to you by wam4 via Google Reader:

 
 

via Free exchange by R.A. | WASHINGTON on 7/25/11

SORRY to be so stuck on news in Europe and America; these days it's difficult to focus on much else. Earlier today, I mentioned that yields on Spanish and Italian debt were up sharply to start the week. That increase is partially a product of ongoing consideration of last week's deal and it's implications for the future of the euro zone. It was also influenced by a Moody's downgrade of Greek debt. The ratings agency expressed concern that a Greek default would hit financial institutions in other peripheral countries, and it fretted that, "The support package sets a precedent for future restructurings should the finances of another euro area sovereign become as problematic as those of Greece". In other words, having put together the machinery of a sovereign-debt restructuring, the euro zone is likely to use it more than once. That doesn't mean that the euro zone made a mistake in putting these mechanisms together; it was simply acknowledging the inevitable. But having acknowledged one obvious case of insolvency, it does become harder to delay acknowledgement of other obvious cases.

That's especially true when pressure is being applied from several directions. The Financial Times reports today that a number of European banks with significant exposures to Greece are showing reluctance to sign up for one of the voluntary restructuring options in last week's deal. It's early going yet, but there is growing concern that the estimated 90% take-up of the restructuring offerings was a tad optimistic.

European banks have plenty to worry about, as things stand. European default risk is one worry, but banks are also feeling an impact from the impasse in America. The FT:

US money market funds have sharply cut their exposure to banks in the eurozone over the past few weeks and reduced the availability of credit, even in stronger countries such as France.

While the agreement of a second bail-out deal for Greece might ease nerves, the funds are also stockpiling cash in case US politicians fail to raise the federal debt ceiling, prompting withdrawals from investors.

One French financier said: "Up to mid-June, getting three, six or nine-month money was not that difficult.

"But now, getting one-week or one-month money is about all we can manage".

At the moment, this is undermining euro-zone economic activity and putting additional pressure on stress banks. Should a debt-ceiling impasse lead to real financial market difficulties and a flight to safety, peripheral banks and sovereigns will come under a great deal of pressure. A lot of people will yank their money away from anything that looks vulnerable, and there are a lot of European institutions looking vulnerable right now.

America will probably avoid the catastrophe of an outright default. But it could experience an economic setback serious enough to trigger collapse in Europe. If you think those two dominoes can fall without knocking over any others, you're more optimistic than I am.


 
 

Things you can do from here:

 
 

Geithner Admits to Playing Politics with Debt Ceiling

 
 

Sent to you by wam4 via Google Reader:

 
 

via The Weekly Standard Blog by Jeffrey H. Anderson on 7/25/11

Why, exactly, do we need to extend the debt limit to the point where the federal government can borrow another $2.4 trillion (hardly a nice round number) — about the same amount of money, even in inflation-adjusted dollars, that we borrowed to fight all of World War II? Because, as Treasury Secretary Timothy Geithner made abundantly clear during his Fox News Sunday interview with Chris Wallace, $2.4 trillion is the amount of money that the Obama administration thinks it needs to borrow (on behalf of taxpayers, who will have to pay it back) to get Obama through the next election.

Here is Secretary Geithner, during his interview: 

"Chris, let me tell you what we're trying to do, what the president is trying to do, is, first and most important, we have to lift this threat of default from the economy for, you know, for the next 18 months. We have to take that threat off the table through the election…." 

Geithner then proceeded twice more to reiterate the importance of the 18-month timeline forgetting through the election. 

How's that for taking the long-term view?

Two other points are worth noting from the interview. The Treasury secretary blamed this year's slow rate of economic growth partly on "a lot of bad weather" — and also on the fact that "oil prices went up."  Of course, Americans wouldn't be as vulnerable in the long-term to rising oil prices if the Obama administration weren't so adamantly opposed to domestic exploration.

In the course of the interview, Wallace also observed that "Republicans have offered several specific plans to deal with the national debt," noting, "They have the Ryan plan. They had cap, cut and balance. You guys have no plan…."

Geithner replied that Obama has "a framework." Wallace responded, "…which the CBO director said is so fuzzy, he couldn't even score it."  Geithner then repeated the principal Democratic talking point against Ryan's bold and responsible plan to reform Medicare — that it would allegedly, in Geithner's words, "require beneficiaries of Medicare to pay $6,500 a year more…for Medicare benefits than they do today." 

That claim, however, contradicts 40 years of empirical evidence about whether the government or the private sector does a better job of controlling health costs. It also obscures the fact that the Ryan plan wouldn't affect anyone who's currently at least 55 years of age. In fact, Ryan's Medicare reforms wouldn't even go into effect for more than a decade (in 2022) — a lot more than 18 months from now.  


 
 

Things you can do from here:

 
 

According to InTrade...

...The chances of the Democrats holding the White House is 56%

Jobs Woes Make U.S. Labor Market Look More European

 
 

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via Real Time Economics by Michael S. Derby on 7/25/11

The financial crisis has helped to wash away a defining difference between U.S. and European labor markets, economists at the Federal Reserve Bank of New York said Monday.

In a posting on the bank's website, the analysts note that over the last decade, the percentage of workers relative to overall population has moved closely together in the two economic blocs, largely because of lost ground in America. The convergence has several drivers.

"The narrowing employment gap is due to three factors: declining U.S. employment rates across almost all age-gender groups; more women working in Europe, particularly prime-age and older workers; and rising employment for older European men," wrote Christian Grisse, Thomas Klitgaard and Aysegul Sahin, for the New York Fed's Liberty Street Economics blog.

The researchers observed that a decade ago, the labor participation gap was 10.5%, with the U.S. putting the greater share of its population to work. This disparity was largely attributed to American firms' greater ease in hiring and firing staffers. Meanwhile, the argument has gone that Europe's more generous social safety net and labor protection laws have made it easier not to work, and complicated firms ability to hire in the face of always uncertain business conditions.

As of 2009, the researchers said the gap between labor participation rates in the U.S. and Europe has moved to a relatively modest 1.7%. The difference had already fallen to just under 5% on the eve of the financial crisis.

The New York Fed report arrives at a time when U.S. labor conditions remain under considerable pressure. Even with a recovering economy, the nation seems unable to add jobs in a significant fashion, and while it's off its peak, the unemployment rate stood at 9.2% last month. In years past that sort of unemployment level was not unfamiliar in Europe even during times of economic health, and it is shocking to most observers to see it now in the U.S. economy. What's more, most forecasters agree it will be a long time before U.S. unemployment falls back toward its historical norm, so the difficulty of finding jobs may keep the labor participation rate depressed as well.

Relatively speaking, European labor markets lost less ground during the financial crisis. The report says some of that success comes from European attempts to make their labor markets more flexible.

The economists see some ground for U.S. labor participation rates to rise above Europe's again, but they reckon what was seen in the past is unlikely to be repeated.

"The increase in Europe's employment rate, particularly for women and older workers, represents a steady change over the past decade as the rate neared the U.S. rate," the economists wrote, adding, "the influence of this development on the narrowing of the employment gap is unlikely to be substantially reversed."


 
 

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Obama's Empty Dance Floor

 
 

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via The Weekly Standard Blog by Daniel Halper on 7/25/11

President Obama, at a speech earlier today at the National Council of La Raza, indicated that he "need[s] a dance partner here -- and the floor is empty."

THE PRESIDENT: ... Now, I know some people want me to bypass Congress and change the laws on my own.  (Applause.)  And believe me, right now dealing with Congress –  

AUDIENCE:  Yes, you can!  Yes, you can!  Yes, you can!  Yes, you can!  Yes, you can! 

THE PRESIDENT:  Believe me -- believe me, the idea of doing things on my own is very tempting.  (Laughter.)  I promise you. Not just on immigration reform.  (Laughter.)  But that's not how -- that's not how our system works.

AUDIENCE MEMBER:  Change it!

THE PRESIDENT:  That's not how our democracy functions. That's not how our Constitution is written.     So let's be honest.  I need a dance partner here -- and the floor is empty.  (Laughter.) 

The president seems to be suggesting that Republicans don't want to come to the table to broker a deal on the debt ceiling and that he's all by himself--the sole honest broker in all of the negotiations. But the Republicans have actually passed a plan in Congress, and Obama refuses to walk away from the idea that tax hikes are what is now required to solve our economic woes. 

But maybe it is pretty lonely for the president on that dance floor, considering the Democrats don't seem willing to dance with him. The AP reports

Senate Majority Leader Harry Reid, D-Nev., has been working on a fallback bill that officials said would cut $2.7 trillion in federal spending and raise the debt limit by $2.4 trillion in one step - enough borrowing authority to meet Obama's bottom-line demand.

In the process, though, another of the president's long-held conditions appeared to be in danger of rejection.

Neither Boehner's measure nor the one Reid was drafting included additional revenue, according to officials in both parties.

So Senate majority leader Harry Reid is brokering his own plan with Speaker of the House John Boehner. And where's the president? Delivering a speech to La Raza.

The other revealing thing President Obama said is this: "Believe me -- believe me, the idea of doing things on my own is very tempting." No doubt it is.

The statement is reminiscent of Obama's reaction to the Egyptian protests in Tahrir Square. "Mr. Obama has told people that it would be so much easier to be the president of China. As one official put it, 'No one is scrutinizing Hu Jintao's words in Tahrir Square,'" the New York Times reported in March.

Of course it's a hard job to be president of the United States. And of course it's hard to broker a deal with folks who don't believe in your political philosophy. But there isn't much gained by complaining about the system he ran to be the leader of. 


 
 

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Obama to Banks: We're Not Defaulting

While officials from the Obama Administration raised their rhetoric over
the weekend about the possibility of a debt default if the debt ceiling isn't raised, they privately have been telling top executives at major U.S. banks that such an event won't happen, FOX Business has learned.

In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn't raised by the August 2 date Treasury Secretary Tim Geithner
says the government will run out of money to pay all its bills

Article-->
http://www.foxbusiness.com/markets/2011/07/25/obama-to-banks-were-not-defaulting/

Still no sign of panic in markets

Phillip Klein

Despite the media hype about a major sell-off in markets Monday without a debt ceiling deal, investors seem to be mostly shrugging off the weekend's news about the ongoing stalemate. While stocks are down, they aren't down by much.

The Dow is off 33 points, or about 0.5 percent in mid-morning trading. The S&P 500 and Nasdaq averages are roughly similar.

"There's nervousness about the U.S. debt negotiations, but this isn't panic in the markets," one investor told Bloomberg. This isn't to say that the markets don't care if the debt ceiling is raised.


Article-->
http://washingtonexaminer.com/blogs/beltway-confidential/2011/07/still-no-sign-panic-markets

The release of Oil from the SPR...

...Has so far been successful in increasing the price of a barrel of Oil almost 4 dollars

Obama administration's charm offensive fails to win over business groups

The Obama administration's push to mend its relationship with business has gone cold only six months into the effort. Complaints abound about the regulations pouring out of federal agencies to implement the federal
healthcare and financial regulation laws.
There's also fear that labor-friendly policies emerging from the National Labor Relations Board and tax-reform legislation expected in 2012 will further hold back growth."With the Obama administration, it just seems to be relentless," said David Rhoa, owner of a bulk-mailing facility

Full Story:
http://thehill.com/homenews/administration/173177-charm-offensive-fails-to-win-over-business

White House stokes debt-ceiling crisis

A Republican aide e-mails me: "The Speaker, Sen. Reid and Sen. McConnell
all agreed on the general framework of a two-part plan. A short-term increase (with cuts greater than the increase), combined with a committee to find long-term savings before the rest of the increase would be considered. Sen. Reid took the bipartisan plan to the White
House and the President said no." If this is accurate the president is playing with fire. By halting a bipartisan deal he imperils the country's finances and can rightly be accused of putting partisanship above all else.

Full Story:
http://www.washingtonpost.com/blogs/right-turn/post/white-house-stokes-debt-ceiling-crisis/2011/03/29/gIQAvx8DYI_blog.html

Daily US Opening News And Market Re-Cap: July 25

From ZeroHedge-->

Despite frantic efforts to reach an agreement to raise the US debt ceiling, no concrete measures emerged during the weekend, which allied with Moody's downgrade of Greece's sovereign rating by three notches today, promoted risk-aversion in the market.

European equities traded under pressure, weighed upon by financials, which in turn provided support to Bunds, whereas the Eurozone peripheral 10-year government bond yield spreads widened across the board. Particular widening was observed in the Belgian/German spread leading up to the bond auctions from Belgium, however the spread narrowed somewhat after they went through successfully. Elsewhere, CHF and JPY emerged as major
beneficiaries of the risk-averse trade, whereas commodity-linked currencies traded lower.

Moving into the North American open, the economic calendar remains thin, however Chicago Fed National Activity and Dallas Fed Manufacturing reports are scheduled for later in the session. Also, Texas Instruments, and Anadarko Petroleum are among some of the companies reporting their corporate earnings today.

Gold at record


Gold climbed to a record in New York and London as U.S. lawmakers failed to reach an agreement on raising the federal debt limit, boosting demand for the metal as a protection of wealth.

U.S. House Speaker John Boehner plans to press ahead with a two-step debt-limit extension that President Barack Obama has threatened to veto, fueling concern the nation is lurching toward a default as early as Aug. 2 and jeopardizing its AAA credit rating. Greece's rating was cut three notches by Moody's Investors Service. Europe's debt woes helped bullion reach all- time highs in euros and pounds last week.

Swiss Franc strongest ever


Switzerland's franc strengthened to a record against the dollar on demand for the safest assets as U.S. lawmakers failed to agree on raising the nation's $14.3 trillion debt ceiling and Greece's credit rating was cut.

The franc also appreciated toward a record versus the euro, while the yen rose against 15 of 16 major peers. U.S. Republicans and Democrats prepared dueling plans for raising the debt ceiling, seeking to break a partisan stalemate amid market concern about a potential default Aug. 2. The euro slid against the yen as Moody's Investors Service downgraded Greece to its second-lowest rating, saying the European rescue plan for the debt-laden nation will amount to a default.

Moody's: Greek Default Is Almost Certain. Here's Why

Ratings agency Moody's has cut Greece's debt ratings by three notches to Ca on Monday, leaving it just one notch above what is considered default, and said the chance of a default is now "virtually 100 percent".

Full Story:
http://www.cnbc.com/id/43876647

U.K. House Prices...

...Fall 0.1% in 'Downward Trend'

Sunday, July 24, 2011

Still No Deal, GOP Will Move Own Plan

via The Corner by Andrew Stiles on 7/24/11

Republicans sources say House Speaker John Boehner (R., Ohio) told members on a conference call this afternoon that talks with Congressional Democrats have yet to yield an agreement, but said House Republicans would move forward with a plan of their own. Boehner said he hoped to have details of the plan to present members on Monday, but said it will be a "two-tiered" approach (meaning the debt ceiling will have to be raised again sometime early next year) and will "reflect the principles" outlined in the House-passed "Cut, Cap and Balance" legislation.
Party leaders slammed President Obama, who has threatened to veto any short-term increase in the debt ceiling, as being primarily focused on his reelection campaign, rather than solving the debt crisis. They also cited Obama's insistence on raising taxes as the reason why talks with the White House fell apart. Members were urged to remain united in the coming days in order to maximize their leverage in negotiations, but Boehner stressed that the best way to thwart Obama now would be to put forward a plan that can pass both houses.
Keep reading this post . . .

Income Distribution Across the World’s 7Billion

via The Big Picture by Anna W on 7/14/11

This interactive Nat Geo chart shows the distribution of income around the globe:
>
Click into interactive map for more information




Gold surges to fresh record high


Gold surges to fresh record high

Wal-Mart vs Amazon



Wal-Mart vs Amazon in the Battle for Sales Tax

The Demand For Water



The Demand For Water Will Increase Five Times By 2050

Barack the Mad


Barack the Mad

Who is really being bailed out



New deal is a charter for the Fourth Reich

The Terminology of Taxation

The Terminology of Taxation

Court backs school choice



Court Says NAACP, Teachers Union Can't Trap Kids in Failing Schools

Bluster and Bluffs



Boehner to call Obama's bluff on short term debt deal

Saturday, July 23, 2011

Another Breakdown?

California adds jobs in June


California adds jobs in June

Gold To Rise...


...$14.3 Trillion U.S. Debt Limit Increase – Bloomberg Chart of the Day

Greece defaults


Greece defaults

Barack Obama's approach to the deficit


Barack Obama's approach to the budget talks puts him well to the left of Franklin D Roosevelt

Krauthammer


Krauthammer: 'This is Obama at his most sanctimonious, demagogic, self-righteous and arrogant'

Friday, July 22, 2011

The Dow...

...Is down 42 points, Caterpillar is costing it 46 points by itself

Wednesday, July 20, 2011

The International Monetary Fund...

...pressed for gains in the yuan, drawing criticism from Chinese officials who blamed the global financial crisis for delaying a shift to a more consumer-led economy.

The IMF's 24 directors "generally agreed that, over the medium term, a stronger renminbi would be an important component in rebalancing the economy toward domestic demand," the fund said in a statement released late yesterday in Washington, using another term for the yuan.

German Chancellor Angela Merkel and French President Nicolas Sarkozy...

....agreed on a joint position to solve Greece's debt crisis on the eve of a summit convened to stamp out contagion in European bond markets

Obama in perilous shape


Obama in perilous shape

Ten Oil Rigs...


..Have Exited Gulf Since Obama Moratorium Went Into Effect

Report: Private sector job creation...


...ground to a halt almost instantly after Obamacare passed - Hot Air

Germany, France Reach Accord on Greek Bailout

Germany and France have reached a common position on a second bailout of Greece in their effort to prevent the country's debt crisis from spreading through Europe, officials said on Thursday.

Full Story:
http://www.cnbc.com/id/43832799

The number of Germans fell...

.... by more than 3.2 million over the last three decades even though the
country's total population has managed to remain more or less steady at about 82 million thanks to immigration -- often from countries in Eastern Europe and the Balkans as well as Turkey and Arabic countries

The President's daily Gallup approval rating...

...Is now below 45% for 6 consecutive days for the first time in 11 months. It is the second longest such streak ever

EU May Use Bailout Fund for Emergency Credit

European officials are considering steps previously rejected by Germany, including the use of precautionary credit lines, to prevent the spread of the region's debt crisis, a person close to the talks said.

Monday, July 18, 2011

Get Ready...


... for a 70% Marginal Tax Rate

InTrade's chance...

...Of the democrats holding the White House: 56.9%

Cisco...

...To cut 9% of work force

Gold...

...Over 1600

China Chengxin International...

....a domestic rating agency, may soon lower its credit ratings on two local government-backed bonds, according to a source close to the company. If it happens, it will be the first downgrade in the history of China's domestic bond market, potentially triggering a flurry of similar moves on municipal government-backed bonds that analysts believe are on the verge of default.

Saturday, July 16, 2011

Friday, July 15, 2011

Manufacturing flat in June because of weak autos

U.S. auto factories produced fewer goods in June than the previous month, and overall factory production was flat. It marked the third straight month of weak output slowed by supply chain disruptions caused by the Japan crisis. The Federal Reserve reported Friday that factory production was unchanged last month following a tiny 0.1 percent rise in May. The May data were revised down from an initial 0.4 percent increase. (Snip) Overall industrial production was up 0.2 percent in June

One year moving average...

...Of the gasoline future is the highest since its all time high in 5ecember 2008

Italian 10 bond yield...

...Has risen 89 basis points this month

US Consumer prices...

...Drop for first time in a year as energy costs ease

Thursday, July 14, 2011

Italian Bond 10 year yield...

...Is 100 basis points higher than it was on June 3

According to Gallup...

....Americans' satisfaction with the way things are going in the country fell to 16% in July, the lowest in more than two years. Satisfaction approached this level in December 2010, when it descended to 17%, but it has not registered as low as 16% since February 2009 -- President Barack Obama's first full month in office -- when it was 15%.

European finance ministers...

....are concerned that the International Monetary Fund will curb its share of a Greek rescue of as much as 115 billion euros ($163.billion) unless the plan includes deep cuts in Greece's debt burden, two people close to the talks said --Bloomberg

In the daily Rasmussen...

...Approval poll, the President has risen 3 points in the last 5 days to 49%

Wednesday, July 13, 2011

California companies fleeing


California companies fleeing the Golden State

What's Behind the Dismal Jobs Picture

An increase in layoffs may be the culprit behind the weak employment picture, rather than a decrease in hiring.

Full Story:
http://www.cnbc.com/id/43740953


From the Audacity of Hope to Audacity

When President Obama took an active role in the talks aimed at addressing the nation's debt ceiling, the tone he used to describe the closed-door negotiations (so much for transparency) was a marked departure from his campaign theme of "Hope and Change."

Now, since realizing that the buck stops on his desk, he is chiding, critical, and
quite pessimistic. ..[sic]...His first order of business in implementing a program of shared sacrifice was to reprimand Democrats and Republicans as though they were behaving like unruly, obstreperous children, in not agreeing to a plan that would put us deeper in debt.

-->
http://blogs.forbes.com/stevenberglas/2011/07/12/obamas-journey-from-the-audacity-of-hope-to-simply-audacity/?partner=contextstory

Obama: Unneeded Income Belongs to the Government

John Steele Gordon

President Obama's press conference yesterday-in which he only took questions from left-leaning reporters apparently-contained an amazing statement. It should be noted the first two instances of the first person singular pronoun in the sentence refer to Barack Obama, President of the United States. The second two refer to Barack Obama, taxpaying citizen:

And I do not want, and I will not accept, a deal in which I am asked to do nothing, in fact, I'm able to keep hundreds of thousands of dollars in additional income that I don't need, while a parent out there who is struggling to figure out how to send their kid to college suddenly finds that they've got a couple thousand dollars less in grants or student loans.

There is, of course, nothing whatever stopping Barack Obama, taxpaying citizen, from donating his excess income to the United States Treasury. But his statement demonstrates an astonishing economic illiteracy. To be sure, someone earning a great deal of money has an income greater than what he spends. You can only spend so much on luxurious living however hard you try, a reality so rich with comic possibilities that a 1902 novel called Brewster's Millions has been made into a movie no fewer than nine times.


But, unlike Scrooge McDuck, the rich do not put the excess in a vast money bin and frolic about in it. They invest it. What a concept! Where does Obama think new capital comes from, the tooth fairy? It's nothing more than the excess of income over outgo. Take away the income the rich "don't need" and spend it on social programs, and capital formation in this country drops to zero.

So determined is Obama to deprive "the rich" of excess income-as defined by him, of course-he is even willing to adversely impact government income in order to do so. Read this colloquy between Obama and ABC's Charlie Gibson in a 2008 debate with Hillary Clinton:

MR. GIBSON: And in each instance, when the [capital gains tax] rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

SENATOR OBAMA: Well, Charlie, what I''ve said is that I would look at raising the capital gains tax for purposes of fairness.

MR. GIBSON: But history shows that when you drop the capital gains tax, the revenues go up.

SENATOR OBAMA: Well, that might happen or it might not. It depends on what''s happening on Wall Street and how business is going.

Actually, it doesn't. Every time capital gains tax rates have gone up, revenues have gone down and vice versa. High capital gains tax rates, because the tax liability is only incurred when an asset is sold, have the effect of locking in capital, which is economically pernicious, preventing capital from flowing to its most productive, i.e wealth creating, use.

Shortly after Obama's election in 2008, I wrote a piece for the Wall Street Journal (irritatingly no longer available on their website, which archives back only two years) saying Obama might not turn out to be the vanguard of the future but rather the last liberal president. I am more confident in that prediction every day.

The Telegraph reports...

....that between April 1992 and December 2010 the percentage of people aged 50 to 64 in work rose from 56.5% to 64.9%, with the number over 64 in work rising from 5.5% to 9%.

There are various reasons for this
including the cost of retirement. However at the other end the number of 18 - 24 year olds working fell over that period from 65.8% to just 58%.
Higher education has delayed people's entry into employment, but the
real reason is the jobs are simply not being created

Great rehearsal

Very solid

One more and we will be ready

Scott/Harry: I am available this weekend to work on parts again

Only thing I have going on is a 1:20 cub game on Sunday

Jim Geraghty

Sure, Obama raised less than Bush did by June 2003, but that's an unfair comparison. Under Bush's economy, Americans had more to give.

Mortgage Applications Drop for 4th Week

Applications for U.S. home mortgages fell last week for the fourth week in a row, hurt by a drop in refinance demand even as interest rates tumbled, an industry group said on Wednesday.

Full Story:
http://www.cnbc.com/id/43736739

China Beats Slowdown Fears, Further Tightening Expected

China's economy grew a stronger-than-expected 9.5 percent in the second quarter from a year earlier, retaining much of its momentum and giving Beijing more confidence to tighten monetary policy further to tame stubbornly high inflation.  

Full Story:
http://www.cnbc.com/id/43733027