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."