Thursday, March 18, 2010

SAR #10077

'A few good men' overstates the case.

No Loitering:  Under the terms of Sen Dodd's reform bill, financial institutions would be required to keep some portion of “certain loan products” (for which read 'crappy loans') on their books.  This “risk retention” is designed to make banks hold an interest in the financial products they create.  Banks naturally don't want anything at all to do with the stuff they've been pushing out the door.

Moody's Blues:  Moody's says that the reduction in government spending, increases in taxes and cuts to social programs will involve “substantial execution risk.”   By which, they rush to explain, they mean merely riots, not revolution.

Chickens, Home:  The scam that Reagan and the GOP pulled on America in the 1980's, and that has been happily used by every administration since, is finally coming unwound.  After 25 years of “investing” the Social Security Trust Fund in US Government debt – which was just a way of taxing and spending without calling it that – it is time to make good on the IOU's.  The government simply has to raise income taxes or borrow even more money and keep on writing the checks.  And that's what they'll do. Until they figure out how to dump the obligation.  Funny, no one ever thought we'd actually have to pay back what we borrowed.  So, naturally, we'll borrow more.  Kneejerk reaction. "As long as the federal government can keep borrowing to fund the Social Security deficit and Medicare deficit and fund the massive annual general budget shortfalls projected throughout the decade, the benefits will keep flowing.  But unpleasant decisions lie ahead.  First we'll pretend it is no big deal.  Then we'll begin to renege on the promise.  The taxable income level will rise, and with it the retirement age – to 70 or more.  Check back in 5 years.

Easy Come, Easy Go:  Last month investors took nearly $4 billion out of US stock-oriented mutual funds, while shoving nearly $20 billion into taxable bond funds.  Cowards.

A Profit In Its Own Land...   Nigeria is trying to write laws that will let it gain some control over the country's oil fields and receive a reasonable share of the profits.  Big oil says this unreasonable and they will walk away and the entire world – especially their shareholders - will suffer.  If Nigeria ends up with oil in the ground longer, it won't necessarily be a bad thing.

They say... More and more reports are surfacing that claim that more and more homeowners are walking away from their mortgages, even though they can still make the payments.  The numbers are impressive – half a million in 2008 and growing.

Expired:  The neocons now say that their former darling General Pretraeus has passed his use-by date.  Maybe because he sent a briefing team to the Pentagon with a stark warning:  “America’s relationship with Israel is important, but not as important as the lives of America’s soldiers.”

Now It Can Be Told:  It is alleged that Louisiana cops were guilty of racist behavior in Katrina's aftermath. Not before, just after.

Once Upon A Time:  The US housing market – sales and prices – is propped up by taxpayer money, but the Fed is beginning to kick out the props.  When the Fed stops supporting Fannie and Freddie and the FHA, and the Buyers' Bribes end, what's going to happen?  What flavors does tear gas come in?

Straw Men:  A new article claims that “Scientists Need a New Approach on Climate Change” and goes on to allege that scientists have only diagnosed the illness, not recommended a course of treatment.  How much plainer than “Stop burning fossil fuels!” does Dr Hansen have to be?

Over There:  The Bank of England has warned British families to expect a dramatic drop in their standard of living.  It also warned that unemployment had not yet peaked (despite the curious data for February).

Porn O'Graph:  Don't Tell Alice.


TulsaTime said...

Social Security needs means testing, it also needs a massive increase in retirement age. People used to only last a few years in retirement, and now they go on forever! With the rugged character of individuals in this country (haha), the gubbmint should not support anybody that can work.

Charles Kingsley Michaelson, III said...

TT - "can work" ? Or "can find a job"? How many greeters does Walmart need? sadly, we do not need all the workers we now have. Expanding the workforce, absent expanding the job supply, will only drive down wages and lower tax income and make extending the retirement age even more.

But I do agree with the means testing and with taxing all income (and not just for SS purposes) - all income at equal rates: cap gains, interest etc.


Anonymous said...

Over There: The Bank of England has warned....

"Say it ain't so, Sir Joe: a centuria horribilis!"

Anonymous said...

The democrats are too busy creating a new entitlement boondoggle to worry about something as trivial as Social Security. God help us; the pinheads are in charge.

It will be a bloodbath in November at the polls.

Any politician who votes on a deem and pass bill should be removed from office. And that goes for the pinhead Republicans when they eventually control the House.