Economy

Obama Unveils $450 Billion Jobs Plan

Mark Noonan55 Comments

From the AP – first, bait the GOP with a tax cut:

…The newest and boldest element of Obama’s plan would slash the Social Security payroll tax both for tens of millions of workers and for employers, too. For individuals, that tax has been shaved from 6.2 percent to 4.2 percent for this year but is to go back up again without action by Congress. Obama wants to keep it and deepen the cut to 3.1 percent for workers…

Then get on to Porkulus II – from Hot Air:

…According to CBS, more than $100 billion will go towards infrastructure and a similar amount will be comprised of money to states to hire more teachers and first-responders and tax breaks for small businesses…

Don’t get me wrong, I like teachers – but how are teachers going to get us out of a recession?  What Obama is really doing here is shoveling more money at government-union enterprises to keep employment up in those areas, thus assuring a large and steady stream of union donations to Obama’s re-election effort.  As for the infrastructure stuff…first off, didn’t we already spend hundreds of billions on that?  Secondly, did thos hundreds of billions actually create jobs?

And all this will lead to a campaign meme:  “I offered them a middle class tax cut, but those obstructionist GOPers in Congress were more interested in tax cuts for millionaires and billionaires.  Let me be clear, I know that we have much to do and things are hard…but I need more time to get our do-nothing Congress motivated to work for the people”.

Its nothing but a campaign speech.  Obama knows that no policy he can use would help the economy, so now he’s just setting a blame-shifting stage and hoping we all sorta forget he’s been President since 2009.

UPDATE:  Bank of America may lay off 40,000 workers.

Obamunism! Unemployment Claims Surge

Mark Noonan6 Comments

From Reuters:

The number of Americans filing new claims for jobless benefits rose unexpectedly last week, further evidence of a weak labor market just hours before President Barack Obama unveils a plan on job creation in a major address to Congress…

…Applications for unemployment benefits rose to 414,000 in the week ending September 3 from an upwardly revised 412,000 the prior week, the Labor Department said on Thursday. Wall Street analysts had been looking for a dip to 405,000…

Why would analysts be look for a dip?  Over at FinViz, they report the expected number not a 405,000, but 400,000…and here it goes, again, with an “unexpectedly” higher number.  Are the analysts working on the “magic” theory in which an increasingly bankrupt nation will create jobs “just because”?  Are they just guessing?

That is what I figure – after all, how can you really analyze such a thing?  Not like you can call all the businesses in America on Monday and ask them how many they will lay off on Friday.  What this shows is that a great deal of the data we’re using to make decisions on is bogus…meaningless numbers put out by people who (a) think they have to put them out and (b) figure that any number is better than no number.

Better to just wait for the number – and until it drops below 250,000 a week, we’re not getting anywhere.

Obama’s Fat Cat Donors

Mark Noonan11 Comments

From Zero Hedge:

Before tomorrow’s 2012 pre-election speech in which President Obama’s vocal elocution will be earnest, and results – to put it mildly – tepid, about about how he could create jobs dammit, if only the Republicans would behave, it’s interesting to note who’s supporting Obama keep his job. A cursory look at the early stages of his campaign fundraising reveals that the same group of people that benefitted from policies (bi-partisan) that lavished them with cheap money, secret loans, debt guarantees and other forms of perks not available to the average citizen, are backing him for President… To date, Obama’s Presidential bid dosh comes largely from – wait for it – the financial sector. Yes, the same sector that screwed the country over, and that, despite some unpleasant lawsuits they will likely settle,  remains as powerful, unrepentant, unaccountable, selfish and Main-Street-destabilizing as before Obama took office…

You can read it and weep over at Open Secrets.  Now, to be fair, a lot of rich people will also be shelling out for the eventual GOP nominee – and we should find a way to discourage that…at all events, we won’t out-raise Obama in 2012 and, anyways, money won’t determine the winner – but Obama and his Democrats claim to be for the little guy.  Remember, one of the memes for Obama is how we nasty, mean, cruel GOPers are trying to destroy the middle class…on purpose, because we’re just such bastards.  We want everyone to die as long as millionaires and billionaires can get their private jet tax breaks…so go Democrat talking points.  But I ask you, do the 44 “bundlers” from the Securities and Investment industry who have ponied up $7.2 million for Obama represent the middle class?

The bankers are deathly afraid of one thing – a government which won’t bail them out.  So far, Obama has proven ever willing to screw everyone to bail out the banks.  In fairness to Obama, I doubt he fully understands what he’s been doing…completely insulated from day-to-day American living and never having had to struggle to make ends meet, Obama may not know how a bail out eventually causes higher food and energy prices for average Americans.  But whether Obama understands it or not, the fact is that he has been the bankers best friend since January 20th, 2009; and the amount of money the bankers are lavishing on Obama indicates they believe he’ll continue to be their friend if re-elected.

The middle class really has only one bulwark these days – the TEA Party.  Sure, a lot of TEA Partiers are Republicans, but even the GOP – from olden times the party of the middle class – has not fully grasped just how bad things are getting out there.  Only the TEA Party – being made up mostly of middle class Americans – understands.  The battle of 2012 is a battle of the Ruling Class against the Middle Class…with Obama and his bankers defending the Ruling Class while the TEA Party defends the Middle Class.

We’ll see how it comes out – we’ll find out, once and for all, who runs this nation.

 

Obama Connection to Solyndra?

Mark Noonan3 Comments

Just what are the full details of that “green jobs” loan to Solyndra?  Inquiring minds want to know – and fortunately Bruce Krasting over at Zero Hedge has been digging around:

I wrote about the solar panel manufacturer Solyndra last week; “Government Investment Disaster in the Works” I highlighted all of the negatives that the company was facing.

It was pretty clear to me that that company was facing trouble. But I had no idea that they would file Chapter 11 the very next day. (Sometimes you just get lucky)

I also made note of some scuttlebutt that George Kaiser (Oklahoma oil billionaire) was involved with Solyndra. I have been looking for a confirmation of this. Kaiser is an important link in this story. He is also a very big fund-raiser for Obama. He is often referred to as a “Bundler”. In this case that means he encouraged/pushed others to put up money for the big O’s campaign…

Checking on that and Kaiser is, indeed, a bundler (per Open Secrets).  Don’t know how much he’s done for Obama lately, but for the ’08 cycle he raked in 33,600.00 for Obama – not as much as some of the big boys, but a tidy sum, none the less.  So, we have a big Obama donor who is heavily invested in a firm that Obama cares greatly about (remember, he used the firm as a backdrop for his efforts to convince the people that he’s doing good work as President) – that firm received a hefty loan from the government and has now gone bankrupt.  All that is bad enough…but the Zero Hedge article goes on to claim that in February of this year, Solyndra’s debts were reorganized in such a way that the taxpayer loan went to the back of the bus as far as repayment in bankruptcy goes, while firms like Kaiser’s went to the front of the line.  Convenient, huh?  Imagine that – just six months before it goes belly up, the debt structure is changed to the unusual situation where debtors like Kaiser are at the head of the line.  That is either stupendously good timing, or someone worked an inside deal…in this case, maybe a phone call to Barry or one of his minions from Kaiser?

We don’t know. Could be just the most amazing run of luck imaginable.  But it is something we need to know…after all, quite a lot of money was passed out via stimulus and we should get answers to the following:

1.  How many have failed?

2.  How many are currently in danger of failing?

3.  How many have investors people who were large donors to President Obama?

4.  In all the failed and possibly failed firms, did any of them have their debts reworked to put taxpayers last and banksters first?

I suggest a House hearing in order to clear this up.  Tens of billions of taxpayer dollars were doled out after the stimlus passed, and we need to ensure that it was all used properly…that no one used political connections to get the money nor used them to cover their losses for those firms which have failed.

Obamunism! Worst Recovery, Ever

Mark Noonan13 Comments

From Investors Business Daily:

…By consensus, the most recent recession ended in June 2009, less than six months after Obama took office.

According to the NBER, in the 60 years prior to Obama’s tenure, we had 10 recessions.  In the two years following those respective recessions, average real (inflation-adjusted) quarterly GDP growth was 5%, according to federal government figures. In the two years of Obama’s “recovery,” average real quarterly GDP growth has been just 2.4%, less than half of the historical norm coming out of a recession…

And, honestly, if you take out the bogus effects of money-printing, we’ve probably had little or no real growth.  Obama’s economic policies didn’t get us out of the recession (his policies could not have taken effect quickly enough) but they have ensured that the recovery, such as it was, failed to deliver the necessary growth to restore American prosperity.

And now Obama is proposing more of the same – the news has it that Obama will propose a $300 billion jobs plan, most of which amounts to extending various tax credit already enacted…while, of course, tacking on a few more “shovel ready” jobs (watch the speech – Obama will not say the word “stimulus” nor the phrase “shovel ready”; they have been banned from Democrat talking points…because they failed and Democrats don’t want to admit it).  The GOP will have to respond in some manner so that we’re not tagged as “anti-job”, but whatever it is Obama wants will have to be offset by spending reductions elsewhere.  For the most part, though, I don’t think that the people will care what Obama says…especially as he’ll say nothing new.

2012 can’t get here fast enough…

As Greek 1 Year Bonds Rise to 88%…

Mark Noonan7 Comments

…the Eurozone dimwits prescribe “more of the same”.  From the New York Times:

…As Europe struggles to contain its government debt crisis, the greatest fear is that one of the Continent’s major banks may fail, setting off a financial panic like the one sparked by Lehman’s bankruptcy in September 2008.

European policy makers, determined to avoid such a catastrophe, are prepared to use hundreds of billions of euros of bailout money to prevent any major bank from failing…

It is getting rocky for Europe’s banks, to be sure – it is getting harder and harder to secure those short term loans banks need to keep operating.  If any one of the major European banks fails to obtain the necessary operating capital, then that will be the end of the global financial system.  Given this, you can understand why the bureaucrats and banksters want to do something…the problem is that they are planning on doing what has already been done, and failed.   Most people were suckered by the bailout of the “too big to fail” banks in 2008 and 2009 – we bought the story that if we just did this, all would be made well.  Turns out it didn’t work…so now we’re back to square one in 2011 but with much higher debt and greatly devalued currencies.  To try it a second time is asinine…but not trying it means default, and that scares the Ruling Class.

And it mostly scares them not because of the loss of wealth (someone who is worth millions or billions and loses 50% of his wealth is still pretty darn rich, after all) but because it could spark political revolutions all across the world…it won’t be a matter of a financial shark like Soros or Buffett taking a hit on the balance sheet, but of the whole political-economic structure being overturned…and thus our financial sharks will lose their power to influence government.  That is what scares them – that is what is making them attempt what they know will fail, but which just may keep the global economy out of recession until late 2012 or 2013…by which time they hope that something else will come up to preserve them in power.

Personally, I don’t think they’ll be able to pull it off – a round of printing money (which is the only way they can keep the insolvent banks afloat) would so increase inflation that it would kill off whatever economic activity we currently have.  People would be forced to spend an ever increasing part of their income on necessities, thus leaving ever less for the frills…more money on food, less money on electronic gadgets.  Gadget makers feel the pinch and start laying people off (mostly because that is the corporate drill..profits down?  Lay people off…never even think about using them more efficiently; that would take effort and some basic, human decency).  It spirals down from there.  Whatever “puff” they can put in to the economy by another round of bail outs will be so damaging that the net result would be worse than if they let things just crash…including “worse” in the Ruling Class sense, as people are on to the scam and another round of it leading to even worse times will just make the revolution burn hotter.

And, “burn, baby, burn”, is all I have to say…I’m heartily sick of things as they are and a little revolution, now and then, is a good thing.

 

 

Maxine Waters: Tax Banks Out of Business

Mark Noonan20 Comments

Sort of the liberal gift that keeps on giving – from ABC:

…Waters also wants to help by putting more pressure on the big banks to help with mortgages.

“If they don’t come up with loan modifications and keep people in their homes that they’ve worked so hard for, we’re going to tax them out of business,” Waters said…

And suppose you do tax them out of business – who does the banking, then?  I guess that Waters would just set up some sort of government-funded entity and put her family members in charge…in keeping with her past actions.

There is an extra spice of weirdness growing on the left – as things get worse and Obama’s failures become manifest, the left is retreating in to a socialist cocoon where all that is required is the application of more liberalism.  Long time readers know I have no love for our banks – in fact,  I hold them in contempt…but to talk of taxing them out of business if they essentially don’t just give away the houses they hold mortgages on is stupid…counter productive; it would make the housing market even worse.

Things can be done to help those who are upside down on their mortgages (in fact, I started advocating them in 2008…but also feel that by now it might just be too late).  Lots of things can be done to reform banks.  But we need banks and we need to have mutual accountability between lenders and borrowers…Waters and the left only wants accountability from the banks, or she’ll tax them out of existence.  Boiled down, as liberalism fails the left is insisting that we destroy everything rather than admit to the failure.

But the failure is unmistakable…and while Waters and others will be calling for the end of the banks, I think that the voters in 2012 will call for an end to the left.

HAT TIP:  Tax Prof Blog

IMF Official Expects Greek Default

Mark Noonan5 Comments

Over at Noonan for Nevada I note that Greek one year bonds have rocketed to an amazing 72%, now comes this Zero Hedge:

While the US was panicking over a double zero jobs report, things in Europe just fell off a cliff. As both the WSJ and Reuters report, it seems that the second Greek bailout, following repeated and consistent disappointments by Greece which has resolutely refused to comply with the terms of its fiscal austerity program, has just collapsed.And with the US closed on Monday: long a counterbalance to European risk pessimism, this week (especially with the news fro the latest FHFA onslaught against global banks) may just be the one that “it” all comes to a head. But back to Europe, and more specifically Greece, which it now appears is doomed. “I expect a hard default definitely before March, maybe this year, and it could come with this program review,” said a senior IMF economist who is keeping close tabs on the situation. “The chances for a second program are slim.” …

And remember, Italy and Spain are also on the financial chopping block – it has just been the belief of the Eurozone leaders that if they can save Greece, they can save the entire Eurozone.  Maybe that was true, but what has become clear by now is that Greece cannot be saved…the financial requirements to be placed upon the people of Greece are not politically possible for an elected Greek government to impose (additionally, in my view, even if the Greek people willingly embraced the austerity measures it would not be enough…Greece – like Spain, Italy and so many other nations – owes more than it can ever repay).  So, default.

Some rumors have had it that all the Eurozone leaders were ever trying to do was find a safe place to crash land the Greek economy…knowing all along that default was necessary, they just wanted it to happen in the least damaging manner possible.  I don’t hold to that view – Greek default being inevitable, the sooner it happens, the better.  The longer you keep trying to bail out Greece the more debt is involved and thus the bigger the hit when the default happens.  I think the Ruling Class of Europe really thought they could manage this…the Masters of the Universe never imagined that there wasn’t some way to borrow, print and steal their way out of the jam, as they have done so many times in the past.

But now they are rather stuck…no one in Europe wants to get further on the hook for Greece.  Default must happen, and keeping things afloat even for another full year won’t make it any better for those who continue to extend Greece credit.  Maybe there are one or two more rabbits for the European Central Bank to pull out of the hat, but I don’t think so.  Get ready for an interesting financial time.

President Zero

Mark Noonan24 Comments

From MSNBC:

…Nonfarm payrolls were unchanged last month, the Labor Department said Friday. It was the first time since 1945 that the government has reported a net monthly job change of zero. The August payrolls report was the worst since September 2010, while nonfarm employment for June and July was revised to show 58,000 fewer jobs…

…Despite the lack of employment growth, the jobless rate held steady at 9.1 percent in August…

He promised us that his stimulus would keep unemployment below 8%.  That, really, is all that needs be said – by his own standards, he has failed.

Will Unemployment Increase?

Mark Noonan17 Comments

Lance Roberts over at Zero Hedge thinks so:

Unemployment is potentially set to rise sharply in the coming months.  That is a pretty bold claim on the surface and one that flies in the face of both mainstream economists, and the White House which is about to unveil a new “jobs plan”.

Let’s take a quick look at some numbers:  8, 160, 400, 350, 12 and 5.  There have only been 8 weeks out of last 160 weeks that unemployment claims have been below 400 thousand claims.   In normal circumstances we are worried about recessions when claims are rising above 350 thousand claims.   Furthermore, jobless claims tend to plunge below 350 thousand a week within 12 months after the end of a recession.  Currently we are still holding above 400 thousand claims after more than two full years since the recession statistically ended…

But what about “5”?  He gets to that – the STA Composite Employment Index.  When it gets to “5” or less, it is a solid indicator of a recession.  Right now, it is at “5”.

But even without that, anyone with eyes to see knows that the economy is in bad shape – the mere fact that we’re sitting on 400,000+ plus claims for unemployment week after week after week shows that we are, at best, treading water…and more likely we’re slowly losing ground, in spite of all the new jobs the Bureau of Labor Statistics claims we’re creating (of course, it must be noted that then the BLS says “X” jobs were created in month “Y” it is really no more than a guess…and it will be about a year before we know how many really were created in month “Y”…and if BLS guesses wrong…).  Along with the jobs picture, every metric of economic activity has been pathetic for a “recovery” period…and they are all trending towards worse.  Even when some statistic comes in higher than expected, it is not high enough to indicate a robust economy.

It remains to be seen whether or not Bernanke will print up a bag of money to keep us out of official recession through the 2012 election – I think it would be disastrous, and may not even give us fake “growth”.  But he may try it – the Ruling Class is worried about a political revolution in the United States next year and will pull out all the stops to ensure that Obama is re-elected.  Or, failing that, that the eventual GOPer is wedded to the current system.  These people don’t care if America is going to heck in a handbasket…all they care is that they remain rich and in charge.

Brace yourselves – we’re going to have to deal from now through election day with a bad economy and an exceptionally nasty, political fight.  We will win – and win rather big, I think – but it will take every last ounce of effort we can muster.  As for me, I’m excited about the prospect and looking forward to the battle…it will be honorable, it will be fun and it will change America.