Loose Lips Sink..... Economies

Washington Times - Geithner gaffe roils markets

The dollar plummeted by as much as 1.3 percent against the euro within 10 minutes of his remarks. But then the greenback quickly recouped most of its losses after Mr. Geithner retracted his statement and said, "I think the dollar remains the world's dominant reserve currency." Later in the day, as concern weighed down the dollar again, White House spokesman Robert Gibbs chimed in to the now universal chorus from top officials that the administration expects the dollar to be the world reserve currency for "a long, long time."

But the damage may already have been done. By afternoon, a poor showing of buyers at a Treasury bond auction sent interest rates sharply higher, raising fears about the U.S. ability to sell a massive load of $2.5 trillion of debt this year. Buyers may have been spooked not only by the Treasury secretary's remarks but also by the unveiling of budget plans on Capitol Hill that would double the amount of debt the Treasury has to sell in the next five years to nearly $12 trillion.

"They are opening the spigots and flooding the market, and there is no end in sight to the deluge of supply" of Treasury bonds, said Louise Purtle, analyst at CreditSights.

"The poor communication from the Treasury Department has complicated the market for Treasuries," said Jeffrey Caughron, chief market analyst at the Baker Group investment firm.

EU Presidency: Obama Plans 'a Way to Hell'

FOXNews.com - EU Presidency: Obama Plans 'a Way to Hell' - International News | News of the World | Middle East News | Europe News:

"STRASBOURG, France — A top European Union politician on Wednesday slammed U.S. plans to spend its way out of recession as 'a way to hell.'

Czech Prime Minister Mirek Topolanek, whose country currently holds the EU presidency, told the European Parliament that President Barack Obama's massive stimulus package and banking bailout 'will undermine the stability of the global financial market.'"

Washington Times - WH cleared way for AIG bonuses

Washington Times - WH cleared way for AIG bonuses

The Obama administration and one of its key allies in Congress belatedly acknowledged Wednesday that they were responsible more than a month ago for clearing the way for large bonuses to be paid inside taxpayer-supported companies like AIG, undercutting the White House's attempts to distance itself from a growing political embarrassment.

Meanwhile, fresh evidence emerged that more largesse was about to be doled out to the government's hand-picked executives running the troubled mortgage giant Fannie Mae.

As outrage grew on Capitol Hill and among the public, President Obama tried to deflect blame while conceding "the buck stops" ultimately with him in ensuring future bonuses aren't paid at taxpayers' expenses. Lawmakers on Capitol Hill unleashed their fury on Edward Liddy, chief executive of American International Group Inc., for allowing $165 million in new bonuses to be paid to executives of the bailed out insurer.

...Pants on Fire

And the Democrats said the Republicans couldn't be trusted. This really puts the GOP in the bush leagues.

Sen. Dodd Admits Adding Bonus Provision to Stimulus Package - First 100 Days of Presidency - Politics FOXNews.com:

"In a dramatic reversal Wednesday, Sen. Chris Dodd, D-Conn., confessed to adding language to a spending cap in the stimulus bill last month that specifically excluded executive bonuses included in contracts signed before the bill's passage.

Dodd told FOX News that Treasury officials forced him to make the change.

"As many know, the administration was, among others, not happy with the language. They wanted some modifications to it," he said. "They came to us, our staff, and asked for changes, and the changes at the time did not seem that obnoxious or onerous."

But the provision has become a flash point for criticism amid the controversy over $165 million in bonuses given out by AIG after securing more than $170 billion in federal aid. The language in the stimulus bill wasn't specific to AIG, but some have expressed outrage that it appears to have created a loophole.

...On Tuesday, Dodd told FOX News that he didn't add the exemption."

Will it End?

Bernanke: Fed will spend another $750 billion on mortgage-backed securities

"The Fed also said it will buy more mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac to help that battered market. The central bank will buy an additional $750 billion, bringing its total purchases of these securities to $1.25 trillion. It also will boost its purchase of Fannie and Freddie debt.

In addition, the Fed said a $1 trillion program to jump-start consumer and small business lending could be expanded to include other financial assets."

Another Stimulus, Pelosi Says

Jesus H, the last round hasn't even been distributed!

Congress May Need to Fund Another Stimulus, Pelosi Says - washingtonpost.com:

"House Speaker Nancy Pelosi said yesterday that the federal government may have to spend even more money to shore up the nation's ailing economy, on top of the more than $1.6 trillion so far approved by Congress."

A Rocky Start for Obama's Broadband Push - BusinessWeek

A Rocky Start for Obama's Broadband Push - BusinessWeek:

"No Hard Answers

And so it went again and again. At the first public discussion of the Obama Administration's much heralded broadband plan, government officials offered virtually no hard answers to the hundreds of people who gathered in person and the 2,500 more who participated via live Web video. For almost every substantive question about how the billions will be allocated, officials said they're looking for guidance from the public. Bernadette McGuire-Rivera, NTIA associate administrator, said the government is seeking input on 'nearly every facet of the program.'

The lack of answers proved frustrating for some participants. Charlie Mattingly, chief executive of a small Internet service provider in Texas called Broadband Rural, was taken aback that the meeting wasn't more productive. 'I had no idea how full of themselves they are in Washington,' he said. 'If we had half the money that the government spent to put on this meeting today and half of the money that people spent to attend it, we could have put 1,000 people online,' he said."

Top U.S., European Banks Got $50 Billion in AIG Aid

Here's the problem: the banks have already gotten a bailout, called the TARP. They're going to get another one, shortly. Now AIG has given the banks another bailout of their own, using the money meant to supplant the insurance sector.

Why did AIG do this? Because AIG was the insurer for the banks. The banks had policies covering them against losses in bad loans and such that they would make. Therefore, AIG had to pay the banks' policy claims.

Sound like double-dipping? it is. The question now: why is the government bailing out the banks? The answer: because those in government are so out of touch and incompetent, they didn't know this. Did the banks lie? Well, they didn't tell the whole truth, that's for sure. Will they be penalized criminally? Don't be silly.


Top U.S., European Banks Got $50 Billion in AIG Aid - WSJ.com:

"The beneficiaries of the government's bailout of American International Group Inc. include at least two dozen U.S. and foreign financial institutions that have been paid roughly $50 billion since the Federal Reserve first extended aid to the insurance giant.

Among those institutions are Goldman Sachs Group Inc. and Germany's Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.

Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French ..."

Top U.S., European Banks Got $50 Billion in AIG Aid - WSJ.com

Top U.S., European Banks Got $50 Billion in AIG Aid - WSJ.com:

"The beneficiaries of the government's bailout of American International Group Inc. include at least two dozen U.S. and foreign financial institutions that have been paid roughly $50 billion since the Federal Reserve first extended aid to the insurance giant.

Among those institutions are Goldman Sachs Group Inc. and Germany's Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.

Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French bank Société Générale SA.

More than a dozen firms with smaller exposures to AIG also received payouts, including Morgan Stanley, Royal Bank of Scotland Group PLC and HSBC Holdings PLC, according to the confidential document.

The names of all of AIG's derivative counterparties and the money they have received from taxpayers still isn't known, but The Wall Street Journal has identified some of them and is publishing others here for the first time.

At a time when we need Stability...

Washington Times - Markets plunge; Dow closes down 281 points:

"At the close, the Dow plunged 281.40, or 4.09 percent, to 6,594.44. The tech-laden Nasdaq plummeted 54.15, or 4 percent, to 1,299.59, its lowest point since Nov. 21, CNBC said. The S&P 500 sank 30.32, or 4.25 percent, to 682.55.

'There's too much uncertainty,' Alec Young of Standard & Poor's told CNBC."

Tax issues won't derail Ron Kirk nomination, key senators and experts say

Tax issues won't derail Ron Kirk nomination, key senators and experts say | News for Dallas, Texas | Dallas Morning News | National Politics:

"The former Dallas mayor is the latest Obama nominee to reveal tax problems, although tax experts said Kirk's errors are less serious than underpayments by other administration officials such as Treasury Secretary Timothy Geithner. The Senate Finance Committee revealed Monday that Kirk would pay $9,975 in back taxes, mostly stemming from speaking fees he failed to report as income and business-related deductions that weren't properly documented."

How Does This Help the Housing Market?

ABC News: Lawmakers Take First Whack at Obama Budget Plan:

'Lawmakers in both parties question Obama's call to reduce high-income earners' tax deductions for the interest on their house payments and for charitable contributions. Also drawing fire is his proposal to start taxing industries on their greenhouse gas pollution — a move sure to raise consumers' electric rates.'"

ABC News: AIG Price Tag: $1,400 per Taxpayer Family

ABC News: AIG Price Tag: $1,400 per Taxpayer Family:

"The government's newly overhauled rescue package for AIG is $162.5 billion, according to government officials. Divide that by 111,609,629 -- the total number of U.S. households, according to the U.S. Census' 2005-2007 American Community Survey -- and the result is $1,455.97. That's nearly double the maximum tax benefit U.S. couples will receive under the federal stimulus package approved last month.

Should the government keep giving money to companies like AIG? Vote here.

'I think the average American taxpayer should feel like they were cheated by AIG's managers and by the people who engineered this bailout scheme in the first place,' said Eli Lehrer, a senior fellow at the Competitive Enterprise Institute, a libertarian Washington, D.C., think tank."

AIG gets new aid after record $61.7 billion loss | Reuters

AIG gets new aid after record $61.7 billion loss | Reuters:

"For all of 2008, AIG lost $99.29 billion, wiping out profit dating back to the early 1990s.

"The Fed and the Treasury said AIG, which has counterparties around the globe, was so important to the U.S. economy and financial system that it needed more help.

"'This will take time and possibly further government support if markets do not stabilize and improve,' they said in a statement."

Upper-Income Taxpayers Look for Ways to Sidestep Obama Tax-Hike Plan

The Communist Ideal of wealth redistribution and sitting on your ass while someone else does the work is alive and well in this Administration. To wit:

ABC News: Upper-Income Taxpayers Look for Ways to Sidestep Obama Tax-Hike Plan

A 63-year-old attorney based in Lafayette, La., who asked not to be named, told ABCNews.com that she plans to cut back on her business to get her annual income under the quarter million mark.

"We are going to try to figure out how to make our income $249,999.00," she said.

"We have to find a way out where we can make just what we need to just under the line so we can benefit from Obama's tax plan," she added. "Why kill yourself working if you're going to give it all away to people who aren't working as hard?"

The attorney says that in order to decrease her income she'll have to let go of clients, some of whom she's been counseling for more than a decade.

Taxpayer Bailout of AIG Is Revised Once Again - FOXBusiness.com

Taxpayer Bailout of AIG Is Revised Once Again - FOXBusiness.com:

"American International Group (AIG: 0.4299, -0.0721, -14.36%) and the federal government will announce a major restructuring of the insurance giant’s government bailout Monday morning that will commit the Treasury Department to invest up to $30 billion in new equity in the company if it needs it, a person familiar with the negotiations told FOX Business."

U.S. economy plummets

U.S. economy plummets | Reuters:

"WASHINGTON (Reuters) - The U.S. economy suffered its deepest contraction since early 1982 in the fourth quarter, shrinking at a much worse-than-expected 6.2 percent annual rate as exports plunged and consumers slashed spending.

"The dour data and a move by the government that could boost its equity stake in Citigroup to as much as 36 percent hammered U.S. stocks to 12-year lows. The Dow Jones industrial average ended down 119.15 points at 7,052.93. Government bond prices fell, bruised by record issuance this week."

Obama Proposes New Wireless Spectrum Fee

Obama Proposes New Wireless Spectrum Fee:

"Under President Obama's budget submitted to lawmakers, wireless carriers such as Verizon, AT&T and Sprint would be hit with huge fees for the right to hold a spectrum license. The fee per carrier would be $50 million this year and eventually rise to $500 million per carrier, per year within a decade. Users fear carriers will add the new fee to phone bills."

Citigroup Reaches Aid Deal With Government

ABC News: Citigroup Reaches Aid Deal With Government:

"The U.S. government will exchange up to $25 billion in emergency bailout money it provided Citigroup Inc. for as much as a 36 percent equity stake in the struggling bank, greatly increasing the risks to taxpayers as voter unhappiness about the broader bailout program rises."

Obama Shifts Course with $3.5 Trillion Budget

ABC News: Obama Shifts Course with $3.5 Trillion Budget:

"President Obama's $3.5 trillion budget proposal, the largest in history, presents a dramatic break from policy and a shift in governmental priorities. The administration is attempting to redirect vast sums of money from businesses and wealthier individuals to those with lower incomes and enact ambitious and costly new programs for energy, education and health care.
Largest budget proposal in U.S. history would reform tax policies.

'I don't think that we can continue on our current course,' Obama said in his remarks about the budget submitted to Congress this morning. 'I work for the American people, and I'm determined to bring the change that the people voted for last November. And that means cutting what we don't need, to pay for what we do.'"

Obama Raises your Cell Phone Rates

Proposed Budget Includes New Spectrum Fees (Phone Scoop):

"The outline 2010 federal budget proposed today by the Obama administration includes significantly higher annual fees for holders of radio spectrum licenses, including cell phone companies. The fees would increase from $50 million/year now to up to $550 million/year over the course of the next decade. These fees are in addition the up-front license fees paid in auctions to reserve exclusive use of the spectrum. The current proposal is only an outline and a starting point; a more detailed budget proposal will be released in the spring. The goal of the increased fees is to help halve the budget deficit by 2013."

Commission Urges Taxing Drivers More - WSJ.com

Commission Urges Taxing Drivers More - WSJ.com: "

WASHINGTON -- The government should make it a lot more expensive for Americans to drive and should install devices in cars that levy a fee for every mile traveled, according to a report being released Thursday by a congressionally chartered commission.

The report lands in the middle of debate over how to pay for roads and other transportation projects and recommends an array of potentially controversial increases in the cost of driving.

Among the proposals: raising the 18.4 cents-a-gallon federal gasoline tax by 10 cents, or 54%, and then indexing future increases to inflation. The study estimates that would cost American households about $9 more a month. The plan also calls for adding 15 cents a gallon to the 24.4 cents-a-gallon tax on diesel fuel."

Obama seeks $200 billion for war spending - CNN.com

Obama seeks $200 billion for war spending - CNN.com:

"WASHINGTON (CNN) -- President Barack Obama will ask Congress for more than $200 billion to fund U.S. war efforts for the next year and a half, according to defense officials.

The request will be for $75.5 billion for 2009 to cover the cost of sending more troops to Afghanistan this year and an additional $130 billion for the rest of fiscal 2009, according to the sources.

War spending for 2010 will be part of the president's overall defense funding request, which is expected to be announced Thursday.

The money will be in addition to $534 billion for the U.S. Defense Department's other expenditures, which the president is expected to request from Congress.

Congress gave the Pentagon $65.9 billion for the first half of fiscal 2009."

House OKs $410B-spending bill

Washington Times - House OKs $410B-spending bill:

"WASHINGTON (AP) -- The Democratic-controlled House approved $410 billion legislation Wednesday that boosted domestic programs, bristled with earmarks and chipped away at policies left behind by the Bush administration.

The vote was 245-178, largely along party lines.

Republicans assailed the measure as too costly -- particularly on the heels of a $787 billion stimulus bill that President Barack Obama signed last week. But Democrats jabbed back."

$318B in new taxes:Fair?

Obama Outlines Health-Reform Plan Funded by Taxes, Spending Cuts - WSJ.com:

"The tax increases would raise an estimated $318 billion over 10 years by reducing the value of such longstanding deductions as mortgage interest and charitable contributions for people in the highest tax brackets. Households paying income taxes at the 33% and 35% rates can currently claim deductions at those rates. Under the Obama proposal, they could deduct only 28% of the value of those payments."

$634B: Obama Lays Out Ambitious Agenda

ABC News: Obama Lays Out Ambitious Agenda:

"When President Obama submits his ambitious first budget outline for 2010 Thursday, it will include a 10-year, $634 billion health care reserve fund that will pay for reforms to the health care system."

U.S. may up stake in Citi: source | Reuters

U.S. may up stake in Citi: source | Reuters:

"A report in the Wall Street Journal said taxpayers could own as much as 40 percent of the ailing lender's common stock."

"Higher Education: Are You Sick Yet?

One of the American dreams has been to either send your child to college, or attend it yourself. It has to do with improving your own stead, and making the next generation better than you. But what about your money enriching the already filthy rich?

To put a particularly disgusting underscore on the colleges to which middle and lower-class families pay their hard-earned money, it has been revealed what some folks make in pay who having nothing to do with actually educating your kid. For example, how about a college coach who makes over 4 million bucks a year? Having been a college teacher myself, I can assure you not much of your money goes toward hiring good instructors. Which then speaks volumes about the worthlessness of a college education.

Take note of the money spent on college sports. Nice if you're into that, but if your son or daughter is just trying to get, say, a good medical education, it's something else. Colleges have taken it on themselves to provide the NFL and NBA with a "minor league," training athletes for their prime gigs in pro sports - athletes who then receive the same degree as your kid at the end of 4 years, having not really earned it at all, but rather "working' for the school. It fits my definition of corruption, all on your educational dime.

High-paid officials: It's not just college presidents - USATODAY.com

Now, an analysis of tax filings of more than 4,000 other employees at 600 private colleges shows that presidents' earnings are relatively modest.

For example, the head football coach at the University of Southern California and a Columbia University dermatologist each earned more than $4 million in 2007, making them the highest paid employees at private colleges. The presidents, meanwhile, earned about $900,000 and $1.4 million, respectively.

The salaries of employees other than presidents were released today by the Chronicle of Higher Education, which has published a report on presidents' compensation each fall for more than 15 years. It is expanding its scope to other employees, it says, because their compensation "contributes to the broader national discussion about appropriate levels of pay for leaders in all sectors," including higher education.

"There are other people getting pretty big paychecks" besides presidents, says Chronicle editor Jeffrey Selingo.

How will the $7.2B allotted for broadband stimulus be spent?

How will the $7.2B allotted for broadband stimulus be spent?:

February 20, 2009 (PC World)

In the American Recovery and Reinvestment Act of 2009, recently enacted by Congress, many details regarding the allocation of funds for high-tech projects remain blurry.

And They Criticized Bush

America's Deficit-Spending Spree Raises Alarms - First 100 Days of Presidency - Politics FOXNews.com

Not since World War II has America spent so much money so quickly.

In the last two years, the United States has run up deficits that amount to a combined $2.5 trillion dollars -- almost a fourth of all the debt the nation has taken on in its entire history.

"It's really staggering to think we're going to have trillion-dollar deficits for the next several years," Rep. Adam Schiff, D-Calif., told FOX News.

The deficit for January alone totaled $83.8 billion, worse than the $78 billion economists expected. The government had run a surplus of $17.8 billion in January 2008.

The huge deterioration in the government's finances reflects the recession, which has cut into tax revenues, and the large amounts of money being spent from the $700 billion finance rescue plan that Congress passed in October. About three-fourths of the deficit increase was related to spending on the bailout program.

With eight months left in the current budget year, the deficit already has surpassed the deficit for 2008, an imbalance of $454.8 billion that is the full-year record.

The Congressional Budget Office has forecast that the deficit for the current budget year will hit $1.2 trillion, but that estimate does not include the cost of President Obama's $787 billion economic stimulus plan, which he signed this week.

Many private economists are forecasting that the budget deficit for the current year will hit $1.6 trillion.

"These are the first trillion-dollar deficits the world has ever seen," Brian Reidl, a budget analyst at Heritage Foundation, told FOX News.

Obama vows to spend stimulus money wisely

UPDATE 1-Obama vows to spend stimulus money wisely | Markets | US Markets | Reuters:

"WASHINGTON, Feb 20 (Reuters) - U.S. President Barack Obama vowed strict oversight on Friday of his $787 billion stimulus plan, pushing back against Republicans who have labeled the centerpiece of his economic agenda fiscally irresponsible.

Obama said he would name a team of managers to ensure that billions of dollars slated for infrastructure projects would be spent wisely."

Yeah, right. And how much will those managers cost, including the taxes they won't pay?

Washington Times - Markets seesaw as economy worsens

Washington Times - Markets seesaw as economy worsens:

"Wall Street seesawed Wednesday as gloomy government reports showed a worsening economy and President Obama unveiled a highly complicated $75 billion plan to help up to 9 million families avoid foreclosures on their homes.

The markets did not seem impressed with a housing plan that eventually could total $275 billion, and the Dow Jones Industrial Average at one point fell below its Nov. 20 post-meltdown low of 7,552.29."

Spending the stimulus won't be easy

Washington Times - Spending the stimulus won't be easy:

Mr. Walker also said too much of the stimulus bill is backloaded to later years, but that there's an odd silver lining to that because it gives agencies more time to ramp up their spending.

"If you look at this bill on one hand, not enough of it is truly stimulus, meaning it's not going to hit the economy quickly enough. That's bad news," he said. "On the other hand it means they've got more time....

"The federal bureaucracy is now being asked to absorb hundreds of billions of dollars, and the potential for waste, fraud, abuse and mismanagement is something we must be diligent in preventing and addressing," said Rep. Darrell Issa of California, the top Republican on the House Committee on Oversight and Government Reform...

The White House said Mr. Obama may not be done spending. Press secretary Robert Gibbs would not rule out another spending bill if the economy continues to founder, though he said there are no specific plans at this point.

Obama Foreclosure Prevention Plan Reaches $75 Billion - First 100 Days of Presidency - Politics FOXNews.com

Obama Foreclosure Prevention Plan Reaches $75 Billion - First 100 Days of Presidency - Politics FOXNews.com:

"President Obama will roll out a $75 billion plan Wednesday that his administration hopes will keep as many as 9 million Americans in their homes.

The announcement in Phoenix comes a day after he signed a $787 billion economic rescue package that combines spending and tax cuts aimed at saving and creating millions of jobs."