Freddie Mac posts $5.5 billion loss for third quarter

It says it will need more money, from guess who?

Say, here’s a surprise: half the stimulus job money went to teachers

Most of these teachers wouldn’t really have been laid off, but it sure sounds good, and  The One knows how to reward the people who put him where he is. Obama, by the way, labelled as “calculator abuse” ABC’s figure of $160,000 per job “saved”. Of course he did.

Will CBS join Fox and Edmunds.com on the White House enemies list?

CBS says Obama is fudging the numbers of jobs its “Stimulus” created. Lyndon Johnson knew he’d lost the American people when Walter Cronkite spoke out on Tet. I wonder if Obama is feeling the same eerie chill?

UPDATE: Is there room for Joe Biden on that list? He says jobs numbers “not 100% accurate”.

Stimulus fun

Yesterday I pointed out that, using the fed’s own figures, each of the puny 30,000 jobs “created or saved” cost $74,000 – pretty pricey for a shovel-wielder. Michigan, though, has outdone itself, spending $1,550,000 for each of its 319 jobs. Now it is possible that there are 319 new millionaires in Michigan as I write, driving their Bentleys or even buying coats for poor folk at Burlington Warehouse. And it’s possible that around the county, 30,000 employees are savoring their tripling in pay.

It’s possible. It is also possible, however, and far more likely, that bureaucrats are having a fine time skimming off all this plunder and leaving crumbs for their charges. Years ago I read that for what we were spending on welfare we could give every poor man, woman and child $120,000 a year and still save money. That never happened, for some odd reason. Perhaps this time, it will.

ABC News: Obama moving the stimulus goalposts

Oops! Did we say that the $780 billion stimulus package [that Cos Cob’s Jim Himes voted for] was going to have an immediate effect? We meant to say, it won’t start until July 1st – the watch us grow!

A $787 billion mistake?

I’m not as sanguineas this Forbes columnist that ur economy is beginning to reboundbut my liberal friends are, and if it is, then this guy’s right: we’ve only spent $37 billion of the Stimulus funds so far, much too little to have had an effect, so we didn’t need it and when it does show up in the pipeline it will do nothing but push up inflation and increase our debt, just as many economists and commentators said.

Given the rapid improvement in the economic outlook, and the slow rate of stimulus spending under the act thus far, most of the spending under ARRA will likely occur well after recovery is under way. A new CBO studyshows that through late May only about $37 billion has been spent, which is just under 10% of authorized spending under the ARRA. In fact, the Departments of Education, Transportation and Energy all have spent 2% or less of their allocations. Recovery is on the way, without massive government spending.

But wasn’t the whole idea for fiscal stimulus that there was no way we would recover without it? And didn’t Vice President Biden indicate that virtually all economists agreed with this view? Given the improving economic outlook, ARRA now represents a significant and very expensive public policy mistake. And in contrast to the vice president’s view about economists’ support for the program, it is well known that many of them who specialize in macroeconomic policy significantly criticized the need for substantial fiscal stimulus before ARRA was passed.

The economic arguments for ARRA were badly dated and erroneous. The stimulus bill was promoted under the old-fashioned Keynesian view that only the federal government is big enough to dig us out of the hole that we had gotten ourselves into, and digging us out of that hole required massive federal spending. But there was significant opposition to this premise by many economists who not only predicted that spending would be significantly delayed–with the bulk of spending not taking place until after recovery was well under way–but who also sharply disagreed with the premise that enormous increases in government spending were required to restore economic prosperity.

In fact, the 1930s Keynesian model that was used to sell the idea of fiscal stimulus to Americans was eliminated from economics decades ago.And this abandonment of Keynesian multipliers does not reflect any ideological or partisan issues that divide conservatives and liberal economists. Rather, it is because the old Keynesian model does not come anywhere close to meeting today’s standards for economic analysis.

Of course, I never believed this spending had anythig to do with a “crisis” except to use that scare word to seize power. We now have Government Motors, run by a 31 year old Obama politico, a Wage Czar, government controlled banks and nationalized medicine coming up. The economy can go its merry way – Obama and his crowd have gotten what they want.

Dance with the Devil

Banks trying to give back federal money – bailout smacks of “social engineering”.  Well, duh!

[NYT} WASHINGTON — The list of demands keeps getting longer.

Financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote onexecutive pay packages. They must slash dividends, cancel employee training and morale-building exercises, and withdraw job offers to foreign citizens.

As public outrage swells over the rapidly growing cost of bailing out financial institutions, the Obama administration and lawmakers are attaching more and more strings to rescue funds.

The conditions are necessary to prevent Wall Street executives from paying lavish bonuses and buying corporate jets, some experts say, but others say the conditions go beyond protecting taxpayers and border on social engineering.

Some bankers say the conditions have become so onerous that they want to return the bailout money. The list includes small banks like the TCF Financial Corporation of Wayzata, Minn., and Iberia Bank of Lafayette, La., as well as giants like Goldman Sachsand Wells Fargo.

They say they plan to return the money as quickly as possible or as soon as regulators set up a process to accept the refunds. On Tuesday, Signature Bank of New York announced that because of new executive pay restrictions in the economic stimulus package, it notified the Treasury that it intended to return the $120 million it had received from the government only three months ago.

Other institutions like Johnson Bank of Racine, Wis., initially expressed interest in seeking bailout funds but have now changed their minds. Bank executives told The Milwaukee Journal Sentinel that one reason they rejected the government money was to avoid any disruption in the bank’s role in the local community, including supporting the zoo or opera company if they chose to.

One of the biggest concerns of the banks is that the program lets Congress and the administration pile on new conditions at any time.

The demands to modify mortgages or forestall evictions are especially onerous, some bank executives and experts say, because they could prompt some institutions to take steps that could lead to greater losses.

[snip]

But a growing chorus of industry experts are warning that asking weak banks to carry out the government’s economic and social policies could increase the drain on the public purse. These experts say that the financial assistance, while helpful in the short run, could force weak banks to engage in lending practices that will lose even more money, and that the government inevitably will become more heavily involved in dictating how banks do business.

UPDATE: The WSJ reports that investment bankers are leaving that industry, too.

The past week alone has seen the announcement of several high-profile departures: Jean Manas, head of Americas M&A for Deutsche Bank; Deutsche Bank media banker Fehmi Zeko; Goldman Sachs Group partner Joseph Ravitch; and UBSmanaging director Jeff Sine. They follow a parade of other senior bankers who have recently left big firms, including Robert Scully at Morgan Stanley, former UBS Vice Chairman Robert Gillespie, and George Ackert, the former head of Merrill Lynch’s transportation group.

In London, the exodus of talent has been no less acute than in New York. At Bank of America, for example, where bankers are grappling with both the financial downturn and a tumultuous takeover of Merrill Lynch, a raft of senior Merrill bankers have jumped ship. Many of them, including Mark Aedy, the recently named head of corporate and investment banking for Europe who was close to such blue-chip Merrill investment-banking clients as miner BHP Billiton, have left without another job lined up.

[snip]

In the past, many of these bankers would have been locked in place with stock options, accumulated after years of toiling from junior analyst to managing director. History is now of little concern as many firms are remade or wiped out by mergers, and stock options are mostly worthless. The market’s collapse has also laid bare tensions between traders who generated most of the firms’ outsize profits — and losses — over the past five years and the advisers who weren’t risking firm capital.

“I still believe in the investment-banking business, but it has become a bit of a boat anchor, in that there doesn’t seem to be a difference between an advisory banker who generates fees without capital and a [proprietary] trader whose job is like going to the casino every day,” said one senior banker who is still constrained by agreements with his former firm.

 

Here’s a shocker: TARP ripe for fraud!

Billions and billions of dollars. I’m so disappointed to learn this.

Get rich by failing

Here’s a deal for you, as detailed by Saturday’s New York Times. First, borrow $10 million from a bank to run a gas station/casino chain. Default on the loan, then have your lender fail and the FDIC take over the loan. Now buy back your debt for less than 50 cents on the dollar and there you are: last week you were $10 million in debt with a creditor breathing down your neck. Today you own your business again, freed of half that debt. It’s a fresh start – a “stimulus” to coin a term, and it’s all paid for by U.S. taxpayers. This all just keeps getting better.

The bill that keeps on taking

What happens when Obama scores “A Victory of Historic Proportion”  with passage of the Stimulus Bill before anyone (except lobbyists) has a chance to read all 17,500 pages? The good news about what’s in it just keeps coming. Here’s some now:

Trade Wars! “WASHINGTON – Congress approved protectionist measures in a $787 billion stimulus bill Friday that U.S. trading partners have warned could spark a trade war.”

If, as Obama’s Chief of Staff Emanuel insists,” you never want a crisis to go to waste”, is it possible that triggering a world wide depression is seen by our Messiah as just an opportunity to expand that crisis and put it to use? Hope not.

A week ago, I’d have told you this was a crock. Today, what are you waiting for?

Get yur Gov’mint money here!

The Economic Stimulus Program Our country faces its most serious economic crisis since the Great Depression. Beginning with their inauguration Barack Obama and Joe Biden have a plan in place to revitalize the economy:      1. Immediate Action to Create Good Jobs in America      2. Immediate Relief for Struggling Families      3. Direct, Government Funding for Homeowners and Business Owners      4. Rapid, Aggressive Response to Our Financial Crisis, Using Tools Such as Government Grants Immediate Action To Help You Tax cuts are one means of providing economic relief to those in need and will be part of the recovery plan for America. However, Government Grants will also play a vital role as a means to swiftly provide assistance to those who could use financial assistance. Unlike a loan these Government Grants provide funds which do not need to be repaid and can be used for virtually any purpose including: pay off family debt consolidate debt provide mortgage help to deal with the forclosure crisis purchase a new home start a new business or assist with an existing business pay off student loans or assist new students with obtaining a degree and giving government aid If there is a bill out there that needs to be paid there may be funding now available that will be able to cover it. The Next Step Demand is expected to be very high for these programs, so although billions have been set aside, unfortunately the funds will only last for a limited period of time. Those that are interesting in applying for a grant are encouraged to do so immediately before earmarked funds are depleted. Grant Claim Applications have been assembled which contain enrollment information to assist Americans with determining which grants may be available to them and how to request payment. These applications are available through a third party for simply the cost of shipping and handling.

Is Obama incapable of standing up to Pelosi or is he just as much in the tank as she?

InstaPundit links as follows:

JUST WORDS? CHANGE.GOV PROMISES:

 End the Practice of Writing Legislation Behind Closed Doors: As president, Barack Obama will restore the American people’s trust in their government by making government more open and transparent. Obama will work to reform congressional rules to require all legislative sessions, including committee mark-ups and conference committees, to be conducted in public. By making these practices public, the American people will be able to hold their leaders accountable for wasteful spending and lawmakers won’t be able to slip favors for lobbyists into bills at the last minute.

 Instead we got a bill that the lobbyists got before the Congressmen, which will pass without being read. Hope and change?

My question: did he mean it when he said it and just got rolled by more sophisticated Washington politicians, or was he lying all along? As recently as Tuesday the House promised to make the bill public and available for review for at least 48 hours before voting on it. Pelosi stomped that promise to death and not a single Democrat, including her president, said boo. I hope we do better standing up to international bogeymen.

rational Default?

It says here that a third of all homeowners will walk away from their mortgages if the value drops 20% below what they owe. Why keep paying when something isn’t worth it? goes the reasoning and hence the term, “rational default”. This is probably a good reason to figure out the rental value of a house before you decide to buy it. If you do buy and the value drops but your loan payment is pretty much the equivalent of a rent payment, you won’t feel like such a chump.

But the gist of the article is that programs designed to forestall  home foreclosures won’t work if house values keep dropping. Seeming to defy that argument, Citibank and JP Morgan, bowing to government pressure, have announced a moritorium today on foreclosures.

I continue to believe that the key to fixing housing is to move people out of homes they can’t afford and I don’t think our government’s doing that. I also don’t see the logic in bailing out the improvident and unlucky while telling more fortunate homeowners who have seen the same price declines yet keep their obligations current that they’re playing a sucker’s game. Somewhere down the line, won’t we all pay for this lesson?

But whatever I think, no one asked me, so we’ll just sit back and see how this works out. Europe, if you care, experienced the largest economic contraction last quarter in recent history. Whatever.

How do you increase unemployment?

Pay people to quit their jobs! It’s all covered in the “Stimulus” bill, though how encouraging workers to abandon their employment will stimulate the economy escapes me.

Dealbreaker: How to solve the slump

Warning to my humor-challenged friends: sarcasm ahead.

How do you handle a flagging economy convulsing with the powerful seizures of acute (and badly needed) deleveraging? Why, by creating incentives to pour more debt into the system, of course. You have to make sure people are buying flat panel TVs and SUVs on credit without impediment, as is their god-given right as Americans. You have to encourage more deposit-less mortgages. You create the impression that low interest rates are an entitlement. Raising them to meet market needs is a crime.

You have to rev up the re-fi machine. People can’t afford their mortgage anymore? Give them a tax credit, a check and then kick the living shit out of the lender until she forgives a large portion of the debt. (We call that “modification” and not “nationalization” of the debt, but it’s the same thing. Want TARP money? No? Take it anyhow, unless you want to destroy the financial system in the United States you anti-American pig. And use it to lend lend lend, damnit, or there will be hell to pay).

And you talk the talk:

You don’t say borrowing. You say lending. You don’t say debt. You say credit. Example:

Incorrect: If we want to save this country, we have to increase the debt in this economy.
Correct: If we want to save this country, we have to increase the available credit in this economy.

Now get back to work (buying on credit) you American hating slackers.

Dodd Says Credit Card Companies Too Often Are Gouging Customers [Bloomberg]

Big whoop

The compromise Stimulus Bill cut the home buyers credit from $15,000 to $8,000. This is driving down the stock price of the big home building companies but other than that, who cares? $15,000 was never going to do any good because, as explained here a few days ago, home prices are already too high and ripe for at least $15,000 reductions with little or no negotiating skills. The bill was always a sop to large political contributors and for some reason, Pelosi and her crowd decided to screw taxpayers a little less. It’ll still send billions of dollars to those corporations, of course, because after all, Congress is an honorable institution and tries to live up to its promises to contributors.

This is stimulating

The problem: Nancy Pelosi has a pet project in her hometown, preserving a swamp outside of San Francisco, but the Stimulus Bill is a “no-earmarks” bill. No pork here, nosiree, the crisis is too important for that!

The solution: Nancy Pelosi gets her $30 million dollars (yours and mine, actually), but denies that it’s an earmark. We don’t have a budget problem, we have a language problem.

An end to welfare as we knew it

Thanks to the Stimulus bill, we’re eliminating the Clinton welfare reforms and going back to the old, failed system but this time, of course, it’s bigger and worse than before. Politics for a change!

Democrats squabble over who put one over on whom

But the result is the same: a trillion dollars wasted, and aren’t they proud.

Whatever the real story, Pelosi’s members were more than a little bewildered and headed into Wednesday’s night’s negotiation singing their Kumbayas through gritted teeth.

“[Senate Democrats] don’t know everything that’s in the bill,” said a laughing Charles Rangel (D-N.Y.), chairman of the Ways and Committee. “So I’m afraid to go to that damned conference.”

If there’s anyone who knows about hiding money, it would be Charles Rangel.

Here’s a shock

Stimulus tax break for builders will heap billions on the biggest firms, do nothing for small home builders. It has nothing to do with campaign contributions, and it means nothing that the large corporations have their own lobbyists hard at work in Washington. This is all about helping Main Street and Main Street is owned by the big guys. Why don’t you get that?

Imagine, if you can, the reaction if the Republicans rather than the Democrats had pulled this fast one in favor of “Big Business”. Politics, for a change!