Quoting the Crisis05/11/2009
Dirk Bezemer in FT.com / Comment / Opinion - Lending must support the real economy
Quote posted at 17:03
The Wall Street Journal reports today that Goldman Sachs is trying to arrange to buy tax credits from Fannie Mae. Obviously, it would buy them at a discount.
Goldman, you may recall, was saved with taxpayer money when the panic spread last year. A naïve person might think such a company would see a patriotic virtue in paying taxes.
Fannie Mae is currently a ward of the government. So this boils down to a proposal to pay Uncle Sam perhaps 15 cents to avoid paying 20 cents to Uncle Sam. The gall involved in even proposing such a thing is awesome.
„Floyd Norris in Worst Idea of 2009 - Floyd Norris Blog - NYTimes.com
Quote posted at 15:02
People of good faith debate whether the gold standard, or national, state or local public banking is the best solution.
But they agree that the current fiat currency system where the creation of credit is controlled by the private banks has pushed us into an economic crisis and a credit crunch, with little hope of stability for the future.
Changing to a public banking system would clearly be a large change.
But remember – as Buckminster Fuller pointed out – building a new model is often easier than fighting the existing one.
The time is right for a new model.
„Quote posted at 13:00
Quote posted at 11:00
Photo posted at 09:00
04/11/2009
Four graphs created by the International Federation of Health Plans that compare how much US residents and people in other countries pay for health care. As Jay Livingston of the Montclair SocioBlog says, “Our Lipitor must be four to ten times a good as the Lipitor that Canadians take.” (via Charts showing how much US residents pay for health care compared to people in other countries - Boing Boing)
Click through to see larger versions of the graphs. Also read through the comments section.
Thanks, Will!
Photo posted at 23:14
» Wal-Mart's stingy sick-leave policy may contribute to swine flu's spread
So concludes a new report from the National Labor Committee that finds that employees of the Arkansas-based retail giant — even its food handlers — feel they have no choice but to work when they’re sick. That’s because the company gives workers demerits and deducts pay for staying home when they’re sick or caring for sick children. The report found that the only time the company is removing sick workers from the food section is when they are coughing too loudly or violently — and then the person is merely transferred to another department rather than being sent home. Wal-Mart’s sick-leave policy conflicts with recommendations for the federal Centers for Disease Control and Prevention, which calls on employers to advise workers to be alert for symptoms of flu-like illness and to stay home if they are ill. The CDC also asks employers to allow workers to stay home to care for sick family membersvia Facing South
…because we all needed another reason to hate Wal-Mart.
Link posted at 21:14
ginandtacos.com » Blog Archive » LATTE ECONOMICS (via robot-heart-politics)
Quote posted at 19:14
Willem Buiter, quoted by Edward Harrison in The creeping power grab by the executive branch and Federal Reserve - Credit Writedowns
Quote posted at 17:14
» House takes another step on healthcare reform | Small Business | Reuters
WASHINGTON (Reuters) - Democrats in the U.S. House of Representatives unveiled a sweeping healthcare overhaul on Thursday that would transform the insurance market, create a government-run insurance plan and levy new taxes on the rich.
Link posted at 15:13
Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners — holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear.
Technically, it’s not a tax increase, even though it may feel like one when your next paycheck arrives. As part of a bundle of budget patches adopted in the summer, the state is taking more money now in withholding, even though workers’ annual tax bills won’t change.
Think of it as a forced, interest-free loan: You’ll be repaid any extra withholding in April. Those who would receive a refund anyway will receive a larger one, and those who owe taxes will owe less.
„Shane Goldmacher and W.J. Hennigan in California to withhold a bigger chunk of paychecks — latimes.com
Quote posted at 13:13
Did we just hit $12 Trillion?
Normally I just use Treasury Direct’s Debt to the Penny. That lags by a day. The number is $11,974,737,715,216.11, but there was a $28 billion 4-week auction today. It depends on whether the bills paid on Monday were accounted for in today’s figure. We pay more bills on Thursday, so it’s likely that we’ll drop back below the 12T mark. Remember that Congress hasn’t yet upped our debt ceiling from $12.1T, so we’re pretty close to the limit. I wonder what happens if the government violates their own completely arbitrary limits on debt. How badly would it suck if they gave us a $20 over-limit fee?
I see a few possibilities:
Congress raises the limit — This would be boring. It is also the most likely scenario.
Auctions are deferred / canceled — This has been discussed. This is not a good idea. The demand for treasuries is quite strong (some think bubble territory) right now. The consequences of spooking that market are potentially devastating, and things can’t get much better, so why risk it?
The limit is ignored — This hasn’t been discussed, and I have some concern about how this move would be interpreted by our foreign investors. Again, given how good things are right now, rocking the boat doesn’t seem like a good move.
Spending is cut — This isn’t even being considered. This would be negatively interpreted by the stock market. Something is going to trigger the next move down, and this would be an absolute gift to short sellers.
Once again, things are very fragile. Our debt financing terms are great right now. While that could change instantly (if those calling a bubble are correct), there’s no reason to actively provoke such a reaction. There has never before been such a wide range of possible outcomes for so few policy decisions. As usual, I’m extremely pessimistic.
Text posted at 11:04
03/11/2009
» Ford Reports Nearly $1 Billion Profit - BusinessWeek
It’s now fair to declare Ford Motor (F) an unqualified turnaround story.
The company reported a $997 million third-quarter profit on Nov. 2, adding profits to gains in market share and improvements in quality since CEO Alan Mulally took over in September 2006. The nearly $1 billion profit is a $1.2 billion turnaround from the third quarter of last year. The company also generated $1 billion in cash and paid down $2 billion in debt.
Link posted at 13:13
02/11/2009
“Great Frontline last nite: How Wall St heist began w/ Rubin/Summers shutting down the woman who tried to stop them” - Michael Moore
watch it in it’s entirety above.
This is excellent. An excerpt of the transcript:
MICHAEL KIRK: [Commodity Futures Trading Commission chairperson Brooksley] Born believed the lack of transparency left the [over the counter derivatives] market open to fraud.
Joe Nocera’s a reporter with the New York Times. He says fraud came up during Born’s first meeting with the Chairman of the Federal Reserve, Alan Greenspan.
JOE NOCERA: He said something to the effect that, “Well, Brooksley, we are never going to agree on fraud. You probably think there should be rules against it.” And she said, “Well, yes, I do.” He said, “You know, I think the market will figure it out and take care of the fraudsters.”
Instead of taking the hint, Born began investigating. She immediately ran up against opposition from the president’s Working Group on financial markets. She even got an angry call from Larry Summers, the Deputy Treasury Secretary.
BORN: They were totally opposed to it. That puzzled me. You know, what was it that was in this market that had to be hidden? So, it made me very suspicious and troubled.
Summers, his boss at the Treasury Robert Rubin, and Alan Greenspan were big believers in letting the markets look after themselves.
…And we all know how well that worked out.
Video posted at 11:51
» CIT Files Bankruptcy; U.S. Unlikely to Recoup Money
The latest chapter in the CIT saga is Chapter 11.
The article has some good stuff in it. I consider this passage to be the most important:
CIT accounts for about 70 percent of all short-term U.S. financing known as factoring, worth about $40 billion a year, according to Ray Ecke, president of Credit Management Resource in Oakland, New Jersey.
In factoring, suppliers and manufacturers sell payments owed for goods and services to companies such as CIT because they need immediate cash. The process gives vendors money to produce goods retailers have ordered. Retailers typically make payments within 90 days. After they do, a factor keeps a fee based on a percentage of the total order.
This is what I referred to in my previous post. What isn’t clear from this article (or any article on CIT), is how large this business unit will be going forward. CIT was in the process of shrinking it during this whole slide into bankruptcy. Now that they’re in bankruptcy and will exit with much better cash flow, I want to see someone mention this on a forward-looking basis. I suspect that the wind down will continue. This may be orderly, but it still pushes many retailers closer to death.
Link posted at 09:49
