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HomeBarack Obama Has Ben Bernanke by the Balls
Posted by Larry Doyle on March 16th, 2010 3:32 PM |
Is the White House now in charge of both fiscal and monetary policy?
The Federal Reserve just released its March statement confirming no change in its monetary policy and little change in economic outlook. A brief overview of the Fed’s statement includes the following:
>> Maintains the Fed Funds range at 0-.25% for an extended period.
>> The quantitative easing program used to purchase $1.25 trillion in mortgage-backed securities and $125 billion in federal agency debt is nearing completion at the end of this month. The Fed will monitor economic conditions and employ policy tools as necessary to promote economic recovery and price stability.
>> Economic activity is generally improving. The overall pace of economic recovery is moderate. (more…)
Tags: Barack Obama, Ben Bernanke, Christina romer, economic activity March 16 2010, extended period, extended period in White House statement, Fed statement March 16 2010, Fed's independence, Federal Reserve, Federal Reserve statement March 16 2010, Federal Reserve's independence, fiscal policy, inflation March 16 2010, Is the Fed independent, labor market March 16 2010, monetary policy, Peter Orszag, quantitative easing, sell the dollar, Tim Geithner, Wall Street Main Street March 16 2010, White House coordiantion with Federal Reserve
Posted in Barack Obama, Ben Bernanke, Federal Reserve, General | 6 Comments »
Will Obama Whack Geithner and Anoint Volcker?
Posted by Larry Doyle on January 21st, 2010 8:54 AM |
One year into his presidency, Barack Obama is losing support from many corners. The American public is clearly sending Obama specifically and Washington at large a strong message of disapproval. Obama’s liberal base of support within the Democratic Party is growing increasingly disenchanted. Individual supporters such as The New York Times’ Paul Krugman are backing away from Obama.
Obama and team have nobody to blame but themselves. They were elected to bring real change to Washington. The American public defined that change as embracing real truth, transparency, and integrity. To this point, Obama has fallen woefully short on all these fronts and proven himself to be ‘just another politician.’
Obama has tried to scale Mt. Everest when in fact the American public and economy were merely and are still trying to get back to sea level. As Obama looks to regroup and reconnect with the American public, what will he do? (more…)
Tags: America wants transparency in washington, Barack Obama, did Tim geithner sell his house, fire the messenger Tim geithner, is Obama just another politician, Krugman writes he wasnt the one we've been waiting for, liberal base disenchanted with Obama, Obama Administration, Obama administration mistakes es, Obama cabinet, Obama embraces Volcker plan, Obama plan to curtail proprietary trading on Wall Street, obama Presidency, Obama promotes Paul Volcker, Obama prop trading plan, Obama's financial team Geithner Summers Bernanke Schapiro, Obama's plans for Wall Street, Paul krugman backs away from Obama, truth transparency and integrity in washington, tts message to Obama, what will Obama do?, will Obama can Geithner, will Obama fire Tim Geithner?, will Obama reinstitute Glass-Steagall, will Obama replace geithner with Paul Volcker
Posted in Barack Obama, General, Paul Volcker, Tim Geithner | 4 Comments »
Second Stimulus: Barack and a Hard Place
Posted by Larry Doyle on July 7th, 2009 1:50 PM |
Does the United States economy need a second Stimulus Package? Can we afford to do it? Can we afford not to do it? What happened to the first one? Why hasn’t that package seemed to have a greater impact?
So many questions and seemingly so few concrete answers. The White House itself is sending out mixed messages on this topic. Add it all up and there is little doubt the U.S. economy is “between Barack and a hard place,” and neither looks all that appealing.
From my standpoint, the reason why we are at this juncture is ultimately due to the fact that the government, media, and financial industry have not fully explained the basic structural changes at work in our economy currently. That structural change centers on the fact that our economy is adjusting from running on excessive debt to operating on real savings and cash flow generated by real earnings. That adjustment takes time.
Obama has largely painted himself into a corner in regard to the economy and another stimulus package. What is surrounding Barack and team?
> The Wall Street Journal reports House Majority Leader Hoyer Signals More Stimulus May Be Needed. Steny is not exactly going out on a limb here, while clearly trying to curry favor with his constituents back home.
> Bloomberg highlights that Obama Adviser Says U.S. Should Mull Second Stimulus:
The U.S. should consider drafting a second stimulus package focusing on infrastructure projects because the $787 billion approved in February was “a bit too small,” said Laura Tyson, an outside adviser to President Barack Obama.
The current plan “will have a positive effect, but the real economy is a sicker patient,” Tyson said in a speech in Singapore today.
> The other side of the stimulus coin has real White House representation in the persons of Austan Goolsbee and Joe Biden, as Bloomberg reports:
Tyson’s comments contrast with remarks made two days ago by Vice President Joe Biden and fellow Obama adviser Austan Goolsbee, who said it was premature to discuss crafting another stimulus because the current measures have yet to fully take effect.
While Barack is catching it from all sides within his own party, the talk of green shoots has significantly subsided. From my standpoint, it seems rather obvious that the following are true: (more…)
Tags: Austan Goolsbee and Joe Biden, Barack and a hard place, can we afford another Stimulus, effectiveness of Stimulus Plan, green shoots wilted, has Stimulus Plan made an impact, how sick is the economy, Hoyer Signals More Stimulus May Be Needed, Laura Tyson, Obama Adviser Says U.S. Should Mull Second Stimulus, second stimulus bill, second stimulus package, Steny Hoyer, stimulus or Democratic agenda, Stimulus Package, Stimulus Plan, what happenbed to the green shoots, White House has no flexibility on stimulus
Posted in Barack Obama, General, Stimulus Plan | 1 Comment »
Barack and Barney Look to Further Plunder Freddie and Fannie
Posted by Larry Doyle on June 22nd, 2009 2:31 PM |
When a homeowner goes out without locking his doors and leaving some lights on, he is inviting trouble.
In a similar fashion, the American public should prepare itself for a continued plundering of the portfolios and balance sheets of Freddie Mac and Fannie Mae by our leading housing finance gurus, Barack Obama and Barney Frank.
The scene is already set for our dynamic duo to pile an ever increasing amount of risk onto these “wards of the state.” How so?
1. While Freddie and Fannie are very much the responsibility of Uncle Sam, their balance sheets are not technically on Uncle Sam’s roll. That ‘cover’ provides a convenient disguise, but the fact is these ‘foster children’ are now nothing more than receptacles for more of Uncle Sam’s risky undertakings.
2. Neither the media nor the political opposition truly call them on these financial charades.
We learn today that both Barack and Barney have grand visions to add more high risk loans at mispriced rates onto Freddie and Fannie’s books. The Wall Street Journal offers, Changes Urged to Rules on Condo Loans:
Two Democratic lawmakers are calling on Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery.
In March, Fannie Mae said it would no longer guarantee mortgages on condos in buildings where fewer than 70% of the units have been sold, up from 51%. Fannie Mae also won’t purchase mortgages in buildings where 15% of owners are delinquent on condo association dues or where one owner has more than 10% of units, which the firm sees as signals that a building could run into financial trouble. Freddie Mac will implement similar policies next month.
In a letter to the chief executives of Fannie and Freddie, Reps. Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, and Anthony Weiner (D., N.Y.) warned that the 70% sales threshold “may be too onerous” and could lead condo buyers to shun new developments. The legislators asked the companies to “make appropriate adjustments” to their underwriting standards for condos.
What does Barney Frank truly know about housing finance? This assessment is an elongated statement similar in style to Frank’s now famous approach to sub-prime lending back in September, 2003. Barney proposed, “I want to roll the dice.” America crapped out on that roll. Now in the height of hypocrisy, Barney is still providing insights and recommendations on mortgage topics. What’s wrong with this picture? (more…)
Tags: are 125% LTV loans eligible for freddie, Barack Obama and Freddie and Fannie, Barack Obama plans on housing, Barney Frank and GSEs, Barney Frank and rolling the dice, Barney Frank housing finance, Barney Frank hypocrite, Barney Frank plans with Freddie/Fannie, Barney Frank wants Freddie and Fannie to change condo rules, condo rules for Freddie and Fannie, fannie Mae's portfolio and balance sheet, Freddie Mac and Fannie Mae's downfall and decline, Freddie Mac's portfolio and balance sheet, government uses Freddie and Fannie for more risky mortgages, housing, loans with 125% LTV, losses at Freddie Mac and Fannie Mae, Obama refinancing plans, Obama wants to expand refinancing program, Obama wants to increase refinancing program, portfolios of Freddie/Fannie, risky mortgages, what does Barney frank know about mortgages, will freddie and fannie underwrite 125 loans
Posted in Barack Obama, Barney Frank, Fannie Mae, Freddie Mac, General | 3 Comments »
Things You May Have Missed
Posted by Larry Doyle on April 7th, 2009 10:08 AM |
The stream of data and market moving news is non-stop. I found these items of interest and look to share them with you as I believe they provide interesting insights and perspectives from around the world. I beg your indulgence if some of these items are not news to you, but if they are I hope they help you “navigate the economic landscape.”
1. Australia’s central bank cut its overnight lending rate to 3%, the lowest level in 49 years. While that rate is one of the highest rates in the developed world, it was widely expected to be left unchanged. Australia has had one of the strongest economies in the world. This cut is an indication the Australian central bank believes their economy is slipping into a recession.
2. Japan’s exports are reported to be down 40% versus a year ago. Additionally, Japan’s industrial production is reported to be down 30+% during the same time period. These economic figures are significantly weaker than most other developed economies. As a frame of reference, most other developed economies’ industrial production is down 10-15%. Clearly, Japan is so dependent on exports and it is now paying the price of not having more fully diversified its economic foundation.
3. Gold is now trading near $880/oz. A month ago this precious metal was trading slightly above $1000/oz. Why is gold down recently? Coming out of the G-20, there are expectations that the IMF may sell some gold reserves to raise funds for low-income countries. I commented the other day that gold is not perfectly correlated with inflation due to changing fundamentals and technical variables in the gold market. This development with the IMF is a perfect case in point of my assertion. (more…)
Tags: Add new tag, AIG, AIG selling asset management division, Australia cuts overnight lending rate, earnings for S&P 500, G20, gold, gold price declines, Japan's exports and industrial production declines, Japanese economy, Ken Rogoff, rating agencies receiving government assistance
Posted in AIG, Australia, Bailout, Banking Institutions, Barack Obama, Business, Current Affairs, Economic Stimulus, Economy, Equity Markets, Foreign Affairs, G20, General, Global Finance, S&P 500, Wall Street | 2 Comments »
Clowns to the Left of Me…
Posted by Larry Doyle on March 24th, 2009 12:52 PM |
I wrote earlier today about the ongoing pressure being applied on our senior financial representatives in Washington by their counterparts in China. In Congressional testimony this morning, both Secretary Geithner and Fed chair Bernanke have discounted China’s call for a new international reserve currency.
The Obama administration is not only being pressured by China prior to the upcoming G-20. Our European allies also have a decidedly different tact on the appropriate financial maneuvers for global governments at this time. While the United States is currently promoting the need for massive fiscal stimulus on a global basis, the WSJ reports from Europe, ECB Chief Says Stimulus Not Needed.
Tags: China, Chinese government surpluses, ECB Chief Trichet, Fed chair Bernanke, fiscal stimulus, G20, Germany, hyper-inflation, IMF, Obama Administration, Secretart Geithner
Posted in Barack Obama, China, Current Affairs, European Union, Foreign Affairs, Germany, Obama Administration | 1 Comment »
Financial Logic and Morality
Posted by Larry Doyle on March 22nd, 2009 12:26 PM |
I am a proud graduate of the College of the Holy Cross, a Jesuit institution in Worcester, MA. The strength of a Jesuit education lies in the principles of Logic and Morality. While I fully appreciated my classes in Economics, German, Philosophy, and others, my classes in Logic and Morality made the greatest impact on me. Those classes forced me to think, not make rash judgments, take positions, and defend them.
Fast forward to 2009 and a banking industry facing hundreds of billions, if not trillions, of unrealized losses. How do we most effectively, efficiently, and expeditiously address the health of this banking system so that our economy and population can regain its footing and prosper? Let me revert back to the late ’70s and early ’80s and the principles instilled in me by those Jesuits.
My Logic class utilized “decision trees.” My Morality class was based on the principle of ”the greatest good for the greatest number.”
What have we learned over the last 6 months, as well as the last 16 years, to help us chart our way forward? (more…)
Tags: AIG, Bank Nationalization, bank shareholder equity, banking losses, bankinig industry, class warfare, College of the Holy Cross, Democratic Congress, executive compensation, Fannie Mae, Freddie Mac, government interest rates, Logic, Moral Hazard, Morality, People's republic of China, populist outrage
Posted in American Consumers, Bank Nationalization, Banking Institutions, Barack Obama, Congress, Democratic Party, Economy, Equity Markets, Fannie Mae, Freddie Mac, General, Obama Administration, Wall Street | 11 Comments »
Kangaroo Court . . . MUST READ!!
Posted by Larry Doyle on March 19th, 2009 4:20 PM |
The kangaroo court on Capitol Hill just passed a bill to tax bonus payments at a 90% rate for employees (with family incomes in excess of $250,000) of AIG and other firms that received $5 billion or more in government bailouts. In my opinion, 
this piece of legislation is a poorly constructed means of recapturing government funds.
I have previously stated that firms which were truly bailed out by the government should be subject to strict government compensation controls. A number of firms – such as Northern Trust, JP Morgan, Wells Fargo, and Goldman Sachs – were compelled to take government funds. If employees of these firms are subject to this tax, it will be a travesty and injustice of unprecedented proportions. I believe that Congress is unknowingly escalating class warfare amidst a facade and charade of protecting the public. I believe we will see public outrage from employees at these firms (JP Morgan, Northern Trust, Goldman, Wells Fargo) that can only be rivaled by our forefathers back in the 1770s. This tax is another means of promoting the income redistribution upon which Obama ran his campaign. Taxation without representation is tyranny!!! (more…)
Tags: AIG, Ben Bernanke, Capitol Hill, government bailouts, kangaroo court, Nancy Pelosi, President Obama, Wall Street campaign contributions, Wall Street Journal
Posted in American Consumers, Barack Obama, Ben Bernanke, Congress, Economy, Hedge Funds, Insurance Industry, Nancy Pelosi, Obama Administration, Wall Street | 13 Comments »
Friends Like This…Who Needs Enemies
Posted by Larry Doyle on March 19th, 2009 12:36 PM |
Senator Dodd did not exactly fall on the sword for the Obama administration as Bloomberg reports, Senator Chris Dodd Blames Obama Administration for Bonus Amendment.
The very legislators who rushed through the Stimulus Bill, which included provisions to prevent AIG-like bonuses, are now railing and pandering as never before. Who are these politicians? Nancy Pelosi, Harry Reid, Barney Frank, Chuck Schumer, and many more. Treasury Secretary Geithner Vows to Recoup AIG Bonuses as Lawmakers Express Fury. Geithner himself feigned ignorance of his knowledge of these AIG payouts.
What do we learn from this sort of political circus? (more…)
Tags: AIG, AIG bonuses, Barney Frank, Chris Dodd, Chuck Schumer, Citigroup, Harry Reid, IMF, JP Morgan, Nancy Pelosi, Northern Trust, Obama Administration, stimulus bill, Tim Geithner
Posted in AIG, Bailout, Barack Obama, Barney Frank, Christopher Dodd, Citigroup, Commerce, Congress, Economic Stimulus, Economy, JP Morgan, Nancy Pelosi, Obama Administration, Wall Street | 6 Comments »
If Wall Street Wants a Fight, Obama Should…
Posted by Larry Doyle on January 21st, 2010 3:59 PM |
Earthquakes always lead to after-shocks.
With all due respect and sensitivity to the residents of Haiti, the earthquake felt in the Massachusetts Senate election on Tuesday has led to the after-shock dropped on Wall Street today by President Obama. Obama’s call to limit the size and risk-taking of Wall Street banks is meant to address the rage and anxiety of the American public. Any vision, however, will only be as effective as those commanders charged with its execution.
Who on Obama’s team will ultimately be in the position to execute this vision to reconstruct Wall Street? Tim Geithner, Ben Bernanke, Larry Summers, and Mary Schapiro. Each of these individuals is badly scarred as a result of the crisis that started on Wall Street and, in turn, crushed Main Street. (more…)
Tags: fire geithner, fire schapiro, fire summers, if wall street wants a fight, k about a fight with wall street, obama plan to reduce risk on wall street, obama proposal for wall street, obama's financial generals, Obama's plans for Wall Street, replace geithner with volcker, replace schapiro with cuomo, replace summers with feldstein, tim ryan of sifma comments on obama plan, wall street prop trading, who will execute obama plans for wall street
Posted in Barack Obama, General, Obama Administration, Wall Street | 8 Comments »