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>One More Business Obama Policies Are Relinquishing To China

>Has the U.S. Lost its Grip on the Credit-Rating Business? 

[Editor’s Note: Money Morning’s Martin Hutchinsona noted commentator, author and longtime international merchant banker, outlines how the credit-rating-agency business will function in the post-financial-crisis world – and explains what that will mean for investors. His predictions may surprise you.

By Martin Hutchinson, Contributing Editor, Money Morning


There’s a new name in the credit-rating-agency business these days: It’s Dagong Global Credit Rating Co. Ltd., and this Beijing-backed business is China’s bid for a spot in the global-credit-rating oligopoly.

And Dagong’s Chairman Guan Jianzhong doesn’t think much of his long-established U.S. competitors. 

The Western rating agencies are politicized and highly ideological and they do not adhere to objective standards,” Jianzhong told The Financial Times earlier this month.

Is he right? And does the newly passed Wall Street Reform and Consumer Protection Act correct their flaws, or does it make matters worse? It’s a question that affects all investors – even those of us that don’t invest in bonds, as we’ll soon see.

To understand how credit-raters will influence investments going forward, please read on…

Hutchinson on…
— 
The CIVETS: Windfall Wealth From the ‘New’ BRIC Economies
— 
The Global Double-Dip Recession: Which Markets to Hold… And Which Ones May Fold


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BP Hopes for a CEO Savior in American Robert Dudley

By Kerry Shannon, Associate Editor, Money Morning 


BP PLC (NYSE ADR: BP) plans to oust Chief Executive Officer Tony Hayward from the top spot and to appoint Robert Dudley – an American and an insider – in an attempt to regain U.S. trust after a highly criticized, ineffective response to the Gulf oil spill. 

BP is expected to announce the change today (Tuesday) when it releases its second-quarter financial report and Hayward addresses shareholders. The official appointment would be effective Oct. 1 – following a transition period that would give BP time to permanently seal the massive oil leak and to clean up most of the five million barrels of oil that have polluted the Gulf region as a result of the worstenvironmental disaster in U.S. history.

Read full story…


Money Morning Mailbag

We’d like to hear from you! If you have an idea that amplifies something you’ve read in Money Morning, send it to us here to share:mailbag@moneymappress.com.

“ALL BRANCHES… of our government ARE IN BUSINESS with Wall Street…”
from Money Morning Reader, T.S.


Battle Over Expiring Bush Tax Cuts Likely to Shape Fall Elections

By Don Miller, Associate Editor, Money Morning 


A colossal battle is shaping up in Congress over what to do about the Bush-era tax cuts that are set to expire at the end of this year. It’s an issue that entails sufficient economic and political consequences that could shape the fall elections and fiscal policy for years to come.

The expiring tax breaks received little public attention this year as Congress tussled with heavyweight issues like healthcare reform andfinancial regulation. But the fate of the tax cuts will be a major focus of debate in September when lawmakers return to Washington from their summer recess and the midterm campaign gets rolling.

“It has enormous ramifications for the fall and clearly will be one of the dominant issues,” Sen. Ron Wyden, D-OR, told The New York Times. “This is code for the role of the federal government, the debate over the size of government and the priorities of the nation.” 

Democratic party leaders, including President Barack Obama, have said they want to extend the tax cuts for individuals earning less than $200,000 and families earning less than $250,000, while letting the cuts expire as scheduled for those exceeding those thresholds.

Most Republicans, and some Democrats, want to extend the tax cuts for everyone, characterizing any tax increases on anyone in this fragile economy as unwise. If no action is taken, taxes on income, dividends, capital gains and estates will all rise.

Read full story..

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>Fixing America’s Economy: One Man’s Fix

>The following excellent article was written by my brother-in-law, Paul Christensen. It makes a lot of sense. Don White

By Paul Christensen
Dear Mr. President, Please find below my suggestion for fixing America’s economy.

Instead of giving billions of dollars to companies that will squander the money on
lavish parties and unearned bonuses, use the following plan. You can call it the

Patriotic Retirement Plan:

There are about 40 million people over 50 in the work force. –
Pay them $1 million each in s everance for early retirement with the following stipulations:
1) They MUST retire.. Forty million job openings – Unemployment fixed.

2) They MUST buy a new American CAR. Forty million cars ordered – Auto Industry fixed.

3) They MUST either buy a house or pay off their mortgage – housing crisis fixed.

It can’t get any easier than that!

P.S. If more money is needed, have all members in Congress and their constituents pay their taxes…

And Mr. President…while you’re at it….make congress retire on Social Security and Medicare…I’ll bet both programs would be fixed…pronto!!

>Why America’s Economy Collapsed

>While Democrats and Republicans point the finger of blame for our fizzled economy, why aren’t they being practical. The economy went to hell because of greed — plain and simple greed and dishonesty of people in power.

It included that of big business, and can you blame them. High paid union people in America made it prohibitive for American business to produce simple technology in the U.S. — too expensive, so they went abroad. Read the following and pass it along. In it you will see the reason for all of our troubles — together with plenty of wicked greed of Congressmen like Barney Frank, Chuck Schumer, and others who will do anything to stay in Washington, the deceit of leaders of Fanny May and Freddie Mac who precipitated the housing debacle by asking Congress and Bush to pass a law that allowed poor people — those who they knew could never pay back a house loan — to buy a house. Or was it the other way around? Was it Barney Frank who told ACORN and Freddy Mac’s President Franklyn Raines that he had the perfect ploy — he would stop funding the troops unless Bush agreed to change the law allowing poor Democrats to qualify for loans. Unfortunately, Bush fell for it instead of being strong willed.

It was all a vicious circle of greed. We could have avoided this financial problem if people would just have continued to go to church, read the Bible, be honest in their dealings with one another, prayed to God at home and allowed school children to pray at school and recite the Pledge of Allegince. Instead, they allowed the atheists to take over their thinking. The story I want you to read is  “Why The American Economy Fell Off The Cliff” and it is found on m companion web site,
http://GettingAmericaRight.blogspot.com
Click over there right now and read and re-read this important message. Then tell your children about it and your friends at work and wherever you see people, the barber, the grocer, the cab driver, the next door neighbor. Then have them pass it along to their friends and families.

>Paint Your Wagon — No Your Roof — White

>

AmSpecBlog

Chu Roofing

The White House was aware that U.S. Secretary of Energy Steven Chu would call for flat-topped roofs (both current and new construction) to be painted with white reflective paint. Chu made the remarks on Tuesday at a conference of Nobel laureates in London. “[Chu’s] press people said there wouldn’t be much press coverage,” says a White House aide familiar with the vetting of Chu’s trip.


Chu claimed that a government plan to mandate white reflective roofs would achieve the environmental equivalent of pulling all of the world’s cars off the road for eleven years.

Chu indicated that government regulations would most likely have to require construction firms and developers to paint the flat roofs of building white, and slanted roofs colors that would reflect heat and energy.


A Democratic staffer working on the House Energy and Commerce Committee says that such a policy could be tied to federal housing financing through HUD aid or via tax credits to encourage homeowners to renovate their homes’ roofs with new materials that reflected heat, and the proposal could be included in the upcoming global warming legislation.

Comments

Angel| 5.27.09 @ 12:10AM

Yeah right! Does Al Gore’s multi-million dollar mansion have a flat, white roof? They’re nuts.

MattSwartz| 5.27.09 @ 12:18AM

The comment above merely points out that 15 container ships emit as much pollution as all the world’s cars.

Better to keep harping on about CAFE standards for cars, though, it scratches a certain itch for the liberal body politic.

Admr. Frank N. Beans| 5.27.09 @ 1:23AM

Wha? No tin foil?

Paul Curley| 5.27.09 @ 3:30AM

In what parallel universe do these people reside?

wow gold| 5.27.09 @ 4:22AM

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Becky| 5.27.09 @ 9:00AM

The building codes, zoning laws, subdivision covenants already are deterring that goal of “affordable” housing for many. Every time an authority adds a requirement for your home, it not only raises the costs, but makes the process more complex and longer.

I attended a HBA seminar on the new Michigan Energy Code earlier this year. Supposedly we were going to find out what the state requires. What it ended up being was a presentation by a qualified Energy Star “rater” who gave a sales pitch. Actually the state code and energy star requirements are almost nil from what I could decipher. What the state did is leave room for a fellow like this one (who spends time testifying before the state legislators) to be in business. You cannot get the little blue sticker unless you hire someone like him (a builder cannot rate his own house to avoid a conflict of interest (lol)), to come in for about $2,000.00 to check behind the builder to make sure he insulates and just previous to the owner moving in does a blower door test for changes of air per hour. My notes say a .35 air changes per hour is assumed without the blower door test. .15 is too tight. We wondered, what if it fails the blower door test, who is responsible, the rater, or the builder? Supposedly the rater’s job is to make sure it will qualify for the sticker, that’s why you have to pay for him to visit the site during construction. We also got the old “Who moved my cheese?” lecture.

From what I got out of the seminar, the difference between following the code and paying for this guy is a marketing gimmick. My good builder friend wants me to go be a rater because there will be a big demand (And I could rate his houses cheaper). I looked into it, and while the price is not prohibitive, I can’t do something I don’t believe in. I think things like this will retard housing. You can add on up to 500 s.f. without having to meet the new code.

Crusader| 5.27.09 @ 2:17PM

Roads are next.

Lorna Spangler| 5.27.09 @ 7:25PM

Won’t all that reflected heat cause the air to be warmer? The presence of cement reflecting sun light causes the air to be hotter.

Smitty| 5.27.09 @ 8:43PM

Good point, Lorna. I know all of the cement and asphalt in Phoenix have made the city about 10 degrees hotter on average. Looks like libtards have struck again.

123123123| 5.28.09 @ 2:44AM

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Monica from ACCCE| 5.28.09 @ 4:07PM

Look, we all know that affordable electricity is an essential part of protecting consumers and American businesses. During the America’s Power Factuality Tour, our team traveled all over the country to document the places, people and technologies involved in producing cleaner electricity from domestic coal. We even went to Council Bluffs, Iowa, home of the Walter Scott Energy Center – one of the most efficient coal-based plants in America. This facility generates more than 1,600 megawatts of affordable electricity, which has a positive long-term economic impact on the region—one that includes a Google data facility.

Take a look at the plant and meet the people who keep it running.

Leave a Comment

>The Forgotten Man

>
By Don White
The Forgotten Man
is a book authored by Amity Shlaes, syndicated columnist at Bloomberg and a visiting senior fellow on the Council on Foreign Relations. She has written for the Financial Times and for the Wall Street Journal, where she was an editorial board member, as well as for the New Yorker, National Review, Fortune, The New Republic and Foreign Affairs.
Shlaes is also author of The Greedy Hand. She lives in New York.

Ms. Shlaes recent book offers some of the grist for the following list of similarities between our current president, Barak Obama, and Franklin D. Roosevelt.

Why is it important? Because Obama isn’t learning from the past. Oh, he’s learning, but what he’s learning from FDR is how to grow government.

While Europe did not spend lavishly on “New Deals” to bring themselves out of the Depression of the 1930’s, FDR did. He created an expensive, wasteful New Deal and spent every dollar available to bail out and nationalize industries (witness the Tennessee Valley Authority created May 18, 1933 by FDR). He could have accomplished the same thing much more economically by cooperating with private industry.

This progressive stance is Obama’s own modus operandi and America paid dearly then and will pay today — our depression lasted 11 years, Europe’s depression lasted only three or four years. So much for government throwing money at financial problems. It isn’t in our best interest. Yet, Obama is primed to again “bailout” ten of nineteen banks recently re-examined by the Federal Government and found to have deficient funding. Obama wants to spend upwards of $100 billion, making them “sound financially.”

Sun Trust Bank, prominent in Florida and Georgia, is among those banks. I say let all of the ten unsound banks fail, however convenient it may seem to bank at one of Sun Trust’s many branches or those of other non-passers of the government tests. Customer savings will be covered by the FDIC for up to $250,000 per account, which should protect virtually all savings accounts. Strong banks will assume this business and emerge even stronger. That’s the way it works in free enterprise and everyone understands the rules going in, everyone except fascist Barak Obama.

During the election campaign Obama said he had recently been studying the life of the most prominent Republican in history, Abraham Lincoln. However, since arriving at the White House he has not been following good old Abe as much as FDR. His Lincoln references were merely a ruse, a bid for independent and Republican votes and to make voters get that fuzzy Republican feeling and a false sense of security that Obama would rule from the middle, not the far left. But if he followed centrists ideals of fiscal responsibility, we wouldn’t be traveling this road, bailing out every company that is near bankruptcy. A moderate or a conservative would have let failed firms fail.

Democrats are smart enough to know that this would be better for the country. But they have greedy hands. They want to get reelected time after time more than they want the country to succeed. I find it to be the height of arrogance for Obama’s gang to fault Rush Limbaugh and other conservatives for saying they hope Obama fails (at socializing America). I too hope he fails. All true American patriots should hope he fails. It is only the Democrats who want people to believe that they have the country’s interest at heart when they don’t. They have their own political survival in mind when they criticize conservatives for opposing socialism and the far left’s obvious attack on our liberties and on our Constitution.

“Too big to fail” shouldn’t be in the president’s lexicon. Economically, Obama would look more American than the Vladimir Putin he resembles today if he would stop this fascism and socialism stuff.

Regarding foreign policy, it might be better if our president were more assertive like Putin, proud of his nationality, able in negotiation and in leaving the strong feeling that if you cross America you’ll pay, capable and desirous of keeping promises made to countries like Poland and the Czech Republic regarding missile defense regardless of which president made them.

Instead, his foreign policy so far has been a dismal failure partly because of his hatred of anything signed into law by his predecessor. Contrary to George Bush who was a pragmatist, Obama equates a warm fuzzy hug between the presidents of Pakistan and Afghanistan as true mediation and “we’ve won the war with Al Qaeda.” He can’t be that inept, can he? He cozies up to America’s enemies: Raul Castro in Cuba; Hugo Chavez, Venzuela; Dmitriy Medvedev in Russia, Kim Jong-il, North Korea; King Abdullah, Saudi Arabia (who merited a big pandering bow. Remember, most of the nineteen perpetrators of 9/11 were from Saudi Arabia. Americans are sickened each time the news replays that terrible, deep subservient bow from an American president. How would America have reacted if President Roosevelt had pandered to Hitler? British Prime Minister Neville Chamberlain did just that and his name went down in infamy. He was a negotiator, sadly resembling Obama in weakness, signing the Munich Agreement in 1938, conceding the Sudetenland region of Czechoslovakia to Germany, part of his failed “containment” policy of Germany in 1939 that did nothing but embolden the Nazi regime.) Other’s that Obama has pandered include Iran leader Mahmoud Ahmadinejad who will have nukes thanks to Obama’s reticence to join Israel in taking them out. The problem is that Obama has no foreign policy, just a series of apologies. Others Obama wants to befriend are; Muammar al-Qaddafi, Libya, and Robert Mugabe, Zimbabwe.

If the above isn’t bad enough, what Obama does that is so inexcusable and damnable is that in his quest for international popularity he dishonors free men everywhere by giving the stamp of approval to these tyrants and their government-approved chaos, economic bungling, human-rights violations, torture (while he calls waterboarding torture and outlaws it), censorship, and forced labor.

Chavez has noticed our new president’s weakness — it doesn’t take a genius to see it — and has already acted against us with impunity. It isn’t coincidence that just this week Chavez nationalized a big American business within Venezuela’s borders, seizing all assets of an oil company owned by Americans. If that’s the kind of success attracted by Obama’s weak positions visa viz America’s enemies, we should want no part of it. It’s a disaster.

How Obama copies FDR:
Wasteful Spending: Both believe in Keynesianism and emphasize big government spending.

Power Hungry: Since moving to 1600 Pennsylvania Avenue, Obama has discovered how FDR won reelection three times — it’s war or threat of war. Have you noticed how fully he has embraced the Afghanistan war and the Al Qaeda nuke threat in Pakistan despite campaign words to the contrary? When, not if, Al Qaeda takes over Pakistan and their Nukes, Obama will attempt to use his powers of verbal persuasion to keep them from lobbing bombs at America and its allies. He will find you cannot negotiate from a position of weakness or threat of enemy attack. Power is all these people believe in, while at the same time Obama has drastically cut U.S. military spending down to pre-World War II levels, taken money out of his budget — a mere one-half of one percent — by eliminating bomb searches at our borders, and cancelled the F22 fighter jet, the fastest, most effective jet in our arsenal, even faster than anything the Russians have.

Habitual bullies: Obama and FDR rangled with business leaders and the “forgotten man” — those honest states’ rights conservatives who plan to own their homes and are neither poor nor rich. It is these conservatives who disdain affirmative action, big government, and Hollywood liberals — honest Americans they are, people who pay their bills on time, don’t buy cars and homes they don’t intend to pay for, never seek government help, in fact distrust governments and have never been foreclosed on, and, unlike many Democratic cabinet and other nominees, actually pay their taxes.

These are Obama’s enemies. These kindly folks are the quiet majority who will end up paying for Obama’s mischief.

Stock Market Gains: Both men incorrectly read interim stock market gains as signs of economic recovery. Seven of ten of the biggest stock market days of the twentieth century took place in the 1930s.

Guilty of Coercion: FDR and Obama coerced unwitting average citizens when they found that to justify giving to one forgotten man, they had to make a scapegoat of another. Businessmen were their chief targets.

Both lacked faith in the marketplace.

Taxes: Like President Hoover, FDR’s predecessor, Obama is about to take the perilous step of raising general taxes when economists warn it’s a deadly sin during recession. He has already imposed a ninety-percent tax on industry leaders who took bonuses despite the fact in the case of AIG those bonuses were authorized by Obama, himself, and his counterfeit Democratic Congress.

Tariffs: Hoover allowed the Smoot-Hawley tariff to become law. Obama has yet to take this step and we warn against it. Hoover’s tariff resulted in America having few markets for its goods and prolonged the recovery.

Protecting the Constitution: Roosevelt cared little for constitutional niceties, believing they blocked progress. Obama showed the same contempt for rule of law when he first announced he would give aid to banks which could pay it back. Then he changed his mind and called the aid preferred stock. He changed his mind again, now calling it common stock, or voting stock, which has little chance of payback if the bank goes under. He bypassed Congressional debate and the Constitutional provision that Congress holds the purse strings, not the presidency, which merely administers laws passed by Congress, and in a round-about way he left Congress in the dust, making it possible for him to nationalize those banks without anyone’s approval. How’s that for an end run around the Constitution?

Doctoring The Economy: FDR did it constantly, but Obama has non-stop “doctoring” going on because he believes that this economy is an opportunity too good to pass up, as his chief of staff Rahm Emanuel said.

Both Like To Control Events. I accuse Obama of treason for his hatred of the American system of government, his caving in to totalitarian governments, his $800 billion support of Hamas following their war with Israel last year, and his deceitful mismanagement of the financial crisis.

Strength of the Economy:
Both doubted its ability to right itself in storms, underestimating the vitality of the overall economy. It played into Obama’s and FDR’s hands to tell America how bad the economy was. Because Obama has the liberal press in his pocket, the recession won’t be over until the President says it’s over despite contrary compelling signs.

Pessimism:
Both men offered rhetorical optimism, but pessimism underlays their politics.

Demonizing Wall Street:
Both demonized Wall Street, finding no sin in government policy, believing business infidelity caused the market to crash (both with banks and housing). But the 1929 crash did not cause the depression any more than the current recession was caused by business.

Balanced Budget:
Both men correctly believe that this is not a time for a balanced budget. Obama has taken that one step further, blithely outspending all prior American presidents combined with nerry a wrinkle on his marshmallo chocolate forehead or a gray hair in his pitch black head, making certain no one will be able to balance a U.S. budget for a decade or more.

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>Don’t Think The Economy Has Recovered Yet!

>First Line News – Business –
Monday, April 20, 2009

Federal Banking Takeover Unlikely
Some big banks will need more bailout bucks, Obama administration officials said Sunday, although it is unlikely the government might need to take over any reeling institution.

U.S. to Put Conditions on TARP Repayment
Strong banks will be allowed to repay federal bailout funds, but only if such a move passes a test to determine whether it is in the national economic interest, the Financial Times reported on Sunday, citing a senior U.S. administration official.

U.S. May Turn Its Loans to Banks Into Stock
White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they expected, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.

Economy Shows Flickers of Strength
Recent data has provided faint hope of a comeback. Even so, high unemployment would stretch well into 2010.

>Liberal Left Discriminates Against The Truth

> Economy Booming Again? Seriously?

Mike Larson
It’s hard to find anyone who’s still bearish on the economy or the market these days. Listen to the average pundit on CNBC and this is what you’ll hear:
arrow The credit crisis? It’s over! Quit worrying.
arrow The real estate mess? Fixed! No problem. 
arrow The economy? Rebounding. The worst is behind us.
arrow The markets? They’re headed to infinity and beyond! Better get on board.
I’ve talked about the credit crisis a few times in previous Money and Markets columns. And no less an authority than the International Monetary Fund (IMF) believes we’ve only acknowledged $1.29 trillion of the $4 trillion in total global credit losses to date. That means we’re not even a THIRD of the way through the process.
In the real estate arena, we’re seeing tentative signs of life in some hard-hit markets. But it’s the distressed, “fire sale” stuff that’s moving. Inventory levels remain high, and foreclosures show no sign of abating. In fact, foreclosure filings hit a new record high of 341,000 in March — a gain driven by rising unemployment, falling home prices, and the expiration of several, temporary state and industry moratoriums.
And that’s just on the RESIDENTIAL front!
Commercial real estate is suffering, too. In fact, General Growth Properties, the second-largest mall operator in the U.S., just filed the biggest real estate bankruptcy in U.S. history.
Commercial real estate is suffering, too. In fact, General Growth Properties, the second-largest mall operator in the U.S., just filed the biggest real estate bankruptcy in U.S. history.
The COMMERCIAL real estate business is in full-scale meltdown mode. Prices are plunging, vacancies are soaring, and rents are dropping. Office tenants recently vacated a whopping 24.9 million square feet of space, the most since the 9/11 attacks. And General Growth Properties, the second-biggest mall operator in the U.S., just filed for Chapter 11 bankruptcy protection. The company is buried under $27 billion in debt, and its bankruptcy is the largest EVER seen in the commercial real estate industry.
It’s (still) the Economy, Stupid!
But it’s the economy that could be the weakest link here. Several companies have come out and said that business isn’t getting any worse. Some of the earnings reports I’ve read talk about how conditions are now simply horrendous, rather than Armageddon-like.
But does that mean things are getting better? Is the economy really ramping up? Is the worst really behind us? I find that hard to believe. Just consider what we learned this week …