McDuck's Account Talk

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Re: Greg's Account Talk

1/3/2009
U.S. Debt Expected To Soar This Year
- Washington Post

  • the national debt is projected to jump by as much as $2 trillion this year
  • about 40 percent of the debt held by private investors will mature in a year or less
  • it's unclear whether demand for debt can be sustained
  • "There's a time bomb in there somewhere," Crandall said, "but we don't know exactly where on the calendar it's planted."
  • As of yesterday, the debt stood at nearly $10.7 trillion, of which about $4.3 trillion is owed to other government institutions, such as the Social Security trust fund. Debt held by private investors totals nearly $6.4 trillion, or a little over 40 percent of gross domestic product. Foreign investors held about $3 trillion in U.S. debt at the end of October. China, which in October replaced Japan as the United States' largest creditor, has increased its holdings by 42 percent over the past year; Britain and the Caribbean banking countries more than doubled their holdings.
 
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Re: Greg's Account Talk

the Caribbean banking countries more than doubled their holdings
Click to expand...

Any idea on whether the source of these funds is largely domestic American or foreign (sovereign or individual)?
 
Re: Greg's Account Talk

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http://www.ft.com/cms/s/0/ff671f66-d838-11dd-bcc0-000077b07658.html

Paulson says crisis sown by imbalance

By Krishna Guha in Washington
January 1 2009 23:31

Global economic imbalances helped to foster the credit crisis by pushing down global interest rates and driving investors towards riskier assets, outgoing US Treasury Secretary Hank Paulson told the Financial Times.

In a valedictory interview, Mr Paulson cast the crisis as partly the result of a collective failure to come to terms with the way the rise of emerging markets was reshaping the global financial system. These imbalances – arising from differences in the inclinations of different nations to save and invest – are reflected in large current account deficits and surpluses around the world.

The US Treasury Secretary said that in the years leading up to the crisis, super-abundant savings from fast-growing emerging nations such as China and oil exporters – at a time of low inflation and booming trade and capital flows – put downward pressure on yields and risk spreads everywhere.

This, he said, laid the seeds of a global credit bubble that extended far beyond the US sub-prime mortgage market and has now burst with devastating consequences worldwide.

“Excesses .  . . built up for a long time, [with] investors looking for yield, mis-pricing risk,” he said. “It could take different forms. For some of the European banks it was eastern Europe. Spain and the UK were much more like the US with housing being the biggest bubble. With Japan it may be banks continuing to invest in equities.”

This argument – already advanced by a number of economists and largely endorsed by Federal Reserve chairman Ben Bernanke – suggests that the roots of the crisis do not simply lie in failures within the financial system.

It also implies that avoiding crises in future will require global macroeconomic co-operation as well as better financial regulation and risk-management.

Copyright The Financial Times Limited 2009
 
Re: Greg's Account Talk

http://www.marketoracle.co.uk/Article8053.html
Overbought Stock Market Expected to Correct Lower

  • In a healthy market volume increases with prices. That has not been happening.
  • Since 1928 the SPX has been
    • up 50% of the time during the 1st year of the Presidential Cycle with an average gain of 3.1% making it the worst year of the Presidential Cycle behind
    • year 3 up 89% of the time with an average gain of 14.9%,
    • year 4 up 71% of the time with an average gain of 6.7% and
    • year 2 up 55% of the time with an average gain of 4.0%.
    • The best ever year 1 was 1997, up 31.0% and the worst ever year 1 was 1937, down 38.6%
  • The market is overbought so the 1st few days of next week are likely to be down.I expect the major indices to be lower on Friday January 9 than they were on Friday January 2.
 
Re: Greg's Account Talk

As the tax cuts stand they are primarily welfare transfer payments - that won't stand in the Senate. It's the infamous earned income tax credit at work again. Gimmeee.
 
Re: Greg's Account Talk

Wall Street's '09 Gain Gone
[SIZE=-1]The labor market took center stage before the open, as investors absorbed precursors to Friday's government jobs report. Payroll firm Automatic Data Processing said private-sector employers trimmed 693,000 jobs in December, while outplacement agency Challenger Gray & Christmas said 166,300 planned layoffs were announced during the month. Analysts expect the Labor Department to report nonfarm payrolls lost 480,000 jobs and unemployment ticked up to 7.1% in December.


[/SIZE]
 
Re: Greg's Account Talk

Why Obama Will 'Own' the Recession

But can a repetitive "Blame Bush" mantra allow Democrats to hold their huge Congressional majorities in 2010 and get Obama reelected in 2012 if they economy is as bad they think it will be? The latest iteration of Obama's stimulus -- I mean "economic recovery" -- package indicates that Team Obama has its doubts about voter patience and the economy. The larger-than-expected tax cuts, even if they are really just disguised government spending, are an effort to rejigger the plan to provide more economic oomph this year. Indeed, as the CBO said when Obama adviser Peter Orszag ran the joint, using infrastructure spending to juice the economy is "totally impractical." There just aren't enough "shovel-ready projects" to make effective use of the hundreds of billions Obama wants to throw at the recession.

And Obama has good reason to doubt the patience of voters. Recall that bad economies propelled Ronald Regan and Bill Clinton to the White House -- and both gentlemen saw their respective parties suffer badly in the very next midterm election because of voter economic anxiety. To quote Oscar Rogers, the impatient "financial consultant" on Saturday Night Live, American voters want Washington to "Fix it!" and fix it fast.

And, really, how can Obama avoid taking responsibility when he will be so actively meddling in the economy? It will be his decision to forego deep and permanent new tax cuts, his decision to not extend the Bush tax cuts, his decision on how to spend the remaining $350 billion in TARP money, his decision to quasi-nationalize healthcare, his decision to push a cap-and-trade carbon emission program and his decision to spend hundreds of billions on a "green" industrial policy. It might even be his decision to try and reunionize the American laborforce. Obama will "own" the battered economy, perhaps almost literally, given Uncle Sam's bailout binge.

So what standard should voters hold Obama to? How about this one: The 1981-82 recession last lasted 16 months and was followed by an explosive recovery thanks largely to the Reagan tax cuts (even though they were slowly implemented). The current downturn, according to the National Bureau of Economic Research, started in December 2007. Mr. Obama better hurry.
 
Re: Greg's Account Talk

Wow, the DJI and SP500 both dropped 4% during the first week of 2009.

attachment.php
 
Re: Greg's Account Talk

Gun sales still booming on eve of inauguration
[SIZE=-1]KXXV News Channel 25, TX - 8 minutes ago[/SIZE]

Throwing around money won't fix the current financial crisis
[SIZE=-1]Yakima Herald-Republic, WA - 4 minutes ago[/SIZE]

Mother-in-law heads for White House
[SIZE=-1]The Press Association - 4 minutes ago[/SIZE]

Obama harps more on BCS
[SIZE=-1]Outsports.com, CA - 12 minutes ago[/SIZE]

Spider-Man celebrates Obama as "nerd-in-chief"
[SIZE=-1]MSNBC - 26 minutes ago[/SIZE]

Marching Band Takes Heat For Mascot
[SIZE=-1]MSNBC -37 minutes ago

[/SIZE]Scammers cite Obama speech
[SIZE=-1]Montana's News Station, MT - 45 minutes ago

[/SIZE]Obama uncertainties
[SIZE=-1]American Chronicle, CA - 1 hour ago[/SIZE]
[SIZE=-1]
[/SIZE]http://www.myfoxkc.com/myfox/pages/...n=2&locale=EN-US&layoutCode=VSTY&pageId=3.1.1[SIZE=-1][/SIZE][SIZE=-1][/SIZE]
[SIZE=-1][/SIZE]
 
Re: Greg's Account Talk

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1/10/2009
'Atlas Shrugged': From Fiction to Fact in 52 Years
- The Wall Street Journal

'Atlas Shrugged': From Fiction to Fact in 52 Years

By STEPHEN MOORE

Some years ago when I worked at the libertarian Cato Institute, we used to label any new hire who had not yet read "Atlas Shrugged" a "virgin." Being conversant in Ayn Rand's classic novel about the economic carnage caused by big government run amok was practically a job requirement. If only "Atlas" were required reading for every member of Congress and political appointee in the Obama administration. I'm confident that we'd get out of the current financial mess a lot faster.
[Atlas Shrugged] Getty Images

The art for a 1999 postage stamp.

Many of us who know Rand's work have noticed that with each passing week, and with each successive bailout plan and economic-stimulus scheme out of Washington, our current politicians are committing the very acts of economic lunacy that "Atlas Shrugged" parodied in 1957, when this 1,000-page novel was first published and became an instant hit.

Rand, who had come to America from Soviet Russia with striking insights into totalitarianism and the destructiveness of socialism, was already a celebrity. The left, naturally, hated her. But as recently as 1991, a survey by the Library of Congress and the Book of the Month Club found that readers rated "Atlas" as the second-most influential book in their lives, behind only the Bible.

For the uninitiated, the moral of the story is simply this: Politicians invariably respond to crises -- that in most cases they themselves created -- by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.

In the book, these relentless wealth redistributionists and their programs are disparaged as "the looters and their laws." Every new act of government futility and stupidity carries with it a benevolent-sounding title. These include the "Anti-Greed Act" to redistribute income (sounds like Charlie Rangel's promises soak-the-rich tax bill) and the "Equalization of Opportunity Act" to prevent people from starting more than one business (to give other people a chance). My personal favorite, the "Anti Dog-Eat-Dog Act," aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. Why didn't Hank Paulson think of that?

These acts and edicts sound farcical, yes, but no more so than the actual events in Washington, circa 2008. We already have been served up the $700 billion "Emergency Economic Stabilization Act" and the "Auto Industry Financing and Restructuring Act." Now that Barack Obama is in town, he will soon sign into law with great urgency the "American Recovery and Reinvestment Plan." This latest Hail Mary pass will increase the federal budget (which has already expanded by $1.5 trillion in eight years under George Bush) by an additional $1 trillion -- in roughly his first 100 days in office.

The current economic strategy is right out of "Atlas Shrugged": The more incompetent you are in business, the more handouts the politicians will bestow on you. That's the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies -- while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to "calm the markets," another trillion of national wealth is subsequently lost. Yet, as "Atlas" grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate "windfalls."

When Rand was writing in the 1950s, one of the pillars of American industrial might was the railroads. In her novel the railroad owner, Dagny Taggart, an enterprising industrialist, has a FedEx-like vision for expansion and first-rate service by rail. But she is continuously badgered, cajoled, taxed, ruled and regulated -- always in the public interest -- into bankruptcy. Sound far-fetched? On the day I sat down to write this ode to "Atlas," a Wall Street Journal headline blared: "Rail Shippers Ask Congress to Regulate Freight Prices."

In one chapter of the book, an entrepreneur invents a new miracle metal -- stronger but lighter than steel. The government immediately appropriates the invention in "the public good." The politicians demand that the metal inventor come to Washington and sign over ownership of his invention or lose everything.

The scene is eerily similar to an event late last year when six bank presidents were summoned by Treasury Secretary Hank Paulson to Washington, and then shuttled into a conference room and told, in effect, that they could not leave until they collectively signed a document handing over percentages of their future profits to the government. The Treasury folks insisted that this shakedown, too, was all in "the public interest."

Ultimately, "Atlas Shrugged" is a celebration of the entrepreneur, the risk taker and the cultivator of wealth through human intellect. Critics dismissed the novel as simple-minded, and even some of Rand's political admirers complained that she lacked compassion. Yet one pertinent warning resounds throughout the book: When profits and wealth and creativity are denigrated in society, they start to disappear -- leaving everyone the poorer.

One memorable moment in "Atlas" occurs near the very end, when the economy has been rendered comatose by all the great economic minds in Washington. Finally, and out of desperation, the politicians come to the heroic businessman John Galt (who has resisted their assault on capitalism) and beg him to help them get the economy back on track. The discussion sounds much like what would happen today:

Galt: "You want me to be Economic Dictator?"

Mr. Thompson: "Yes!"

"And you'll obey any order I give?"

"Implicitly!"

"Then start by abolishing all income taxes."

"Oh no!" screamed Mr. Thompson, leaping to his feet. "We couldn't do that . . . How would we pay government employees?"

"Fire your government employees."

"Oh, no!"

Abolishing the income tax. Now that really would be a genuine economic stimulus. But Mr. Obama and the Democrats in Washington want to do the opposite: to raise the income tax "for purposes of fairness" as Barack Obama puts it.

David Kelley, the president of the Atlas Society, which is dedicated to promoting Rand's ideas, explains that "the older the book gets, the more timely its message." He tells me that there are plans to make "Atlas Shrugged" into a major motion picture -- it is the only classic novel of recent decades that was never made into a movie. "We don't need to make a movie out of the book," Mr. Kelley jokes. "We are living it right now."

Mr. Moore is senior economics writer for The Wall Street Journal editorial page.

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

ED-AI826_dgmoor_DV_20090108211701.jpg


The art for a 1999 postage stamp.
 
Re: Greg's Account Talk

CHANGE WE CAN BELIEVE IN, EH ?

Is Government Spending Too Easy an Answer?
[SIZE=-1]New York Times
[/SIZE][SIZE=-1]
[/SIZE]Audacity itself as economic experiment
[SIZE=-1]Los Angeles Times

[/SIZE][SIZE=-1]Obama Says Recession Requires Scaling Back Promises[SIZE=-1]
Bloomberg

[/SIZE][/SIZE]Can nation afford this much red ink?
[SIZE=-1]MLive.com, MI

[/SIZE]Obama's Vision: Only Government Can End Economic Woes
[SIZE=-1]San Jose Mercury News

[/SIZE]BHO, please crib from RWR
[SIZE=-1]Pittsburgh Tribune-Review[/SIZE]
[SIZE=-1]
[/SIZE]Conservative view: Obama's 'New Deal' won't boost economy
[SIZE=-1]Duluth News Tribune[/SIZE]
 
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