The American people are receiving a true education from our president regarding the various uses of the baffling word that is ‘Change‘.
First, during Obama’s campaign for presidency, we were led to believe that change meant ‘out with the old, in with the new’. Old representing all that was bad and new all that was good.
Then, after obtaining the presidency Obama has been kind enough to illustrate the use of the word change as in ‘the more things change the more they stay the same.’ This use of the word change can be evidenced by the Bernanke story below as well as countless examples of cronyism and kotowing to lobbyists by the Obama administration. Simply look up stories connecting Obama to ACORN if you desire evidence. Both of these egregious endeavors were objects of ridicule by Obama during his campaign and, might I remind you, reasons to vote for the caped crusader as he promised to eradicate the evils of Washington.
And that brings me to the next use of the word ‘change‘. If anyone actually believed that Obama was going to change Washington then I respectfully request you review the phrase, ‘A leopard can’t change its spots.”
Obama to reappoint Bernanke as Fed chief – WSJ
The Wall Street Journal reports President Obama will announce the nomination of Ben Bernanke to a second term as Federal Reserve chairman on Tuesday, opting for continuity in U.S. economic policy despite criticism in Congress of the low-key central banker’s frantic efforts to rescue the financial system. Mr. Obama’s decision had become a subject of growing speculation and uncertainty in financial markets and in Washington policy circles. The president called the Fed chairman to the Oval Office this past Wednesday to offer him another four-year term. Mr. Bernanke then flew off to Wyoming where he gave a defense of his controversial policies at the Fed’s annual meetings in Jackson Hole.
In recent weeks I have read countless stories about the end of the recession and the beginning of monetary tightening. I have witnessed innumerable reports on TV regarding the inevitable strength coming in the US$ because of the wonderful turnaround unfolding across world economies. And yet, the US$ value sits barely above the year low. Why the disconnect you might ask? Well, read the next three stories. These stories represent the reality of the situation and illustrate the desire of central banks around the world to continue the course of currency devaluation to stimulate nascent/non-existent growth.
Fewer catching up on lapsed mortgages – WSJ
WSJ reports homeowners who fall behind on their mortgage payments have become much less likely to catch up again, a new study shows. The report from Fitch Ratings focuses on a plunge in the “cure rate” for mortgages that were packaged into securities. The study excludes loans guaranteed by government-backed agencies as well as those that weren’t bundled into securities.
The cure rate is the portion of delinquent loans that return to current payment status each month. Fitch found that the cure rate for prime loans dropped to 6.6% as of July from an average of 45% for the years 2000 through 2006. For so-called Alt-A loans — a category between prime and subprime that typically involves borrowers who don’t fully document their income or assets — the cure rate has fallen to 4.3% from 30.2%. In the subprime category, the rate has declined to 5.3% from 19.4%.
“The cure rates have really collapsed,” said Roelof Slump, a managing director at Fitch. Because borrowers are less willing or able to catch up on payments, foreclosures are likely to remain a big problem. Barclays Capital projects the number of foreclosed homes for sale will peak at 1.15 million in mid-2010, up from an estimated 688,000 as of July 1.
Central bankers stress not rushing for exits – Reuters.com
Reuters.com reports if there was one message from central bankers gathered at this mountain retreat this weekend it was this: Don’t expect us to raise interest rates any time soon. A series of speakers at the Kansas City Federal Reserve Bank’s annual conference, which drew the monetary policy elite from around the world, heralded the global economy’s apparent push out of its deep recession. But they noted that economies were recovering only with extraordinary stimulus from governments and central banks, and said it was too soon to talk of a self-sustaining recovery.
“I am a little a bit uneasy when I see that, because we have some green shoots here and there, we are already saying, ‘Well, after all, we are close to back to normal,'” European Central Bank President Jean-Claude Trichet said on Friday. “We have an enormous amount of work to do.” As ECB Governing Council member Ewald Nowotny told Reuters, there seems to be a consensus among central banks to make sure they do not withdraw their stimulus too soon. “What we see now is that to a large part this is still a recovery sponsored by public measures,” he said. In the words of Harvard University professor Kenneth Rogoff: “They don’t want to go back into what we just got out of.”
China to keep policy loose as economy faces new woes – Reuters.com
Reuters.com reports China will maintain its stimulative policy stance because the economy, far from being on solid footing, is facing fresh difficulties, Premier Wen Jiabao said. In a downbeat statement on the government’s website following a trip to the eastern province of Zhejiang, known as a hotbed of private enterprise, Wen said Beijing would ensure a sustainable flow of credit and a “reasonably sufficient” provision of liquidity to support growth.
“We must clearly see that the foundations of the recovery are not stable, not solidified and not balanced. We cannot be blindly optimistic,” Wen was cited as saying. “Therefore, we must maintain continuity and consistency in macroeconomic policies, and maintaining stable and quite fast economic growth remains our top priority. This means we cannot afford the slightest relaxation or wavering.” China still faced great pressure from the slowdown in demand for exports, Wen said, adding that it was difficult to boost domestic demand in the short term to fill in the gap — despite the boost from the government’s 4 trillion yuan ($585 billion) stimulus package.
This is a public service message to the Obama administration:
Please review the following story closely. You will see a pristine example of how the real world reacts to tax increases. The evidence clearly illustrates that jobs are lost in the country where taxes are increased. Please have the good sense to avoid the evil temptations of tax hikes in the midst of a jobless economic recovery effort. This has been a word from your sponsors, you know, the voters.
New UK tax sends hedge funds fleeing – WSJ
WSJ reports a stream of hedge-fund managers and other financial-services professionals are quitting the U.K., following plans to raise top personal tax rates to 51%. Lawyers estimate hedge funds managing close to $15 billion have moved to Switzerland in the past year, with more possibly to come. David Butler, founder of professional-services co Kinetic Partners, said his company had advised 23 hedge funds on leaving the U.K. in the 15 months to April. An additional 15 are close to quitting the U.K., he said.
“In the past, managers would say they’d move some operations or dip their toe in the water,” Mr. Butler said. “Now that’s changed.” Hedge fund Amplitude Capital took its $735 million in assets under management to Switzerland at the start of this year. In May, Odey Asset Management threatened to move. All the hedge funds that have left the U.K. for Switzerland are concerned about tighter European Union regulations, as well as a new top rate of income tax announced by the U.K. government. Starting next April, individuals in the U.K. who earn more than 150,000 pounds, or about $247,000, a year will pay tax at 51%, including national insurance. They will also be taxed heavily on pension payments.