Blogs

China's Currency Manipulation Makes America See Red

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A little noticed bill was voted out of committee Friday from the House Ways and Means Committee, H.R. 2378, the Currency Reform for Fair Trade Act. This bill finally addresses China's currency manipulation by enabling tariffs. It passed out of committee by voice vote and all it will take to pass is to hear from constituents demanding Congress do so. The Senate version of the bill is S. 3134.

Government in the Securitization Business

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Thought bail outs were over?   Think again.    Last Friday the government bought $50 billion in toxic assets from three corporate credit unions.

The government’s National Credit Union Administration seized three corporate credit unions on Friday and announced a plan to separate the $50 billion of troubled assets from the industry.

What is a corporate credit union you ask? A corporate credit union is kind of a wholesale or bank to the regular credit unions which consumers use.

The NCUA press release overviews their Corporate System Resolution to deal with buying billions of worthless crap derivatives. What are they doing? Repackaging $50 billion in worthless derivatives as $35 billion in government backed derivatives. I kid you not. The government is in the securitization business.

La de da, look at the NCUA's statement on how the corporate credit unions got into trouble:

Several large corporate credit unions made large investments in private label mortgage-backed securities that are now worth much less than the amount the corporates originally paid for them. This affected corporate credit unions in two significant ways.

Sunday Morning Comics - Congressional Testimony Edition

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Brought to you by the NBER - The Recession is over because real people don't cycle enough.
Cup O' Joe

 

Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the Funnies.

 

Broke Living Is a Serious Medical Condition...

 


Cartoonist: R.J. Matson

 

Recession Ends; Nobody Notices

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The National Bureau of Economic Research declared this week that the Great Recession ended over a year ago. Yet, for some reason, the average American isn't ready to break out the champagne.

"Every single one of the individuals who wrote the report needs a serious reality check," said Bob Johnson of the Queens borough of New York, who is 46, had worked in communications and has been looking for a job for more than three years.

The American working class is hurting. The unemployment rate is only marginally down from the peak and the economy has been losing jobs over the last three months. Households were $1.5 Trillion poorer last quarter, and $12.3 Trillion poorer than three years ago. Most of this is reflected in the crushed dreams of retirement. The poverty rate is at a 15-year high.

poverty.jpg

Nevertheless, the economy is improving, right? That depends on who you ask.

The Great Recession Is Over! So Declares the NBER

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The National Bureau of Economic Research has declared an end of the Great Recession.

The committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.

So, it's all good then and we're back to normal? Not exactly.

In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.

Sunday Morning Comics - Bubble Dreams Edition

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Brought to you by campaign contributions - This year's election choices are guaranteed to not give you one.
Cup O' Joe

 

Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the Funnies.

 

 


Cartoonist: Tom Toles

 

Rally to Restore Sanity

 


Cartoonist: Joel Pett

 

The Economics of Ecology

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The summer of 2002 was a drought year in the Klamath Basin.

An estimated 70,000 salmon died that year after the Bush administration "ignored its own federal biologists and divert more water from the Klamath River for farm irrigation". According to documents, the decision was made because the farmers generally voted Republican. The Bush Administration then went on to order that water continue to be diverted for another eight years.

Only 24,000 fall chinook spawned naturally in the Klamath in 2004, followed by 27,000 last year.

The analysis from the U.S. Fish and Wildlife Service identified low water flows as a prime culprit in a major salmon kill on the Klamath River in 2002.
Because it takes several years for salmon to reach peak reproducing age, the effects of this huge fish-kill only started in 2005 when the National Marine Fisheries Service abbreviated the commercial salmon season. It cut the income of west coast fishermen "by 50 percent".
California and Oregon indian tribes, that have depended on salmon fishing for thousands of years, also had their fishing quotas cut back by as much as half.

It's easy to look at this example as an exception based on petty politics, but that would require you to overlook five centuries of political and economic policy.

When you look around the global environment today you will see nearly every animal species, large and small, in trouble. It doesn't matter if they live on land, water, or air.

Geithner Hearts China with Tough Love?

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Treasury Secretary Timothy Geithner testified today before the Banking, Housing & Urban Affairs Committee. The headlines blaze with a Geithner quote, it is past time for China to move on Yuan re-evaluation, as if some sort of action might actually happen against China and their currency manipulation.

In reading Geithner's hearing testimony, we have this:

We have very significant economic interests in our relationship with China. With over 1.3 billion people and an economy continuing to grow at or near double-digit rates, China is our fastest-growing major overseas market. China’s record of bringing hundreds of millions out of poverty, building a rapidly growing middle class, and now its efforts to encourage growth led by domestic demand, ultimately mean more demand for American goods and services. Increasing opportunities for U.S. firms and workers through expanded trade and investment with China will be an important part of the success of the President’s National Export Initiative and our efforts to support job growth more broadly.

Triumph of the Money Party!!! Warren's role downgraded, reports to Geithner

Michael Collins

The White House snatched back one of the few bones it's thrown to the people outraged at the looting of the United States Treasury by failed financial concerns - the big banks and Wall Street. The promised appointment Elizabeth Warren as head of the new agency to protect consumers from the financial services industry has been seriously downgraded. Instead of running the Consumer Finance Protection Agency, Warren's role has been diminished to that of special assistant to the president and adviser to Treasury Secretary Tim Geithner.

"President Obama, sidestepping a possibly heated confirmation battle, will appoint Harvard law professor Elizabeth Warren as a special advisor to the Treasury Department to launch the government's powerful new Consumer Financial Protection Bureau, according to two Democratic officials familiar with the decision." LA Times, Sept 15

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