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Dem bill urges new US powers over financial firmsTue Oct 27, 2009 8:16pm EDT By Kevin Drawbaugh and Rachelle Younglai * Financial Services Oversight Council would be set up * Treasury would head council to monitor, address risks * Federal Reserve, FDIC would get new authorities * Obama says bill urgent, crucial (Updates with Obama letter to Frank) WASHINGTON, Oct 27 (Reuters) - The U.S. government would gain far-reaching new powers to regulate, and even shut down, large financial firms that threaten economic stability under a draft bill released in Congress on Tuesday. Congressional Democrats and the Obama administration agreed...

More Black Swans In Store For The US Economy The Pragmatic CapitalistOct. 23, 2009, 6:46 AM Central Banks and governments around the world have thrown everything they can muster at the financial crisis. And up until now, it appears as though they have succeeded. Equity markets are up 60%+ around the globe and investors are beginning to party like its 1999. But a look underneath the hood shows that shiny Cadillac might just be a clunker (don’t worry, the government will take out a loan so you can take out a loan to turn in your clunker for a new...

Major institutions should be broken up if necessary, Greenlight manager says NEW YORK (MarketWatch) -- Greenlight Capital manager David Einhorn said Monday that his hedge-fund firm is betting on the possibility of a major currency collapse and a surge in interest rates, citing ballooning government deficits in some of the world's most developed countries.The hedge-fund manager, who warned about Lehman Brothers' frailty before it collapsed last year, also said financial institutions that are deemed as "too big to fail," such as Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 4.57, -0.02, -0.38%) , should be broken up. ReutersDavid Einhorn of Greenlight Capital. Greenlight has...

NEW YORK – Get over it, America. Wall Street bankers make too much money. The latest example: Goldman Sachs says it has set aside $16.7 billion so far this year for compensation — or about $530,000 per employee. Not bad for a company that a year ago received $10 billion in federal money as well as $12.9 billion from the government's bailout of American International Group Inc. Maddening? Sure. But forcing Goldman or any other Wall Street firm to pay employees less won't help a single unemployed American find a job. It won't help a single homeowner who can't afford...

In the Medieval era -- when the periodic table of the elements was comprised of only Fire, Earth, Air, and Water -- alchemists posited the existence of a fifth magical substance, Quintessence, which when mixed in combinations of the other four would create every other form of matter. They searched in vain for this ethereal substance in their pursuit of a means of changing base metals into gold. Their quest went unrealized, but this magical quintessence was subsequently discovered five centuries later by the new alchemists: mortgage bankers and investors. They found a way to turn worthless mortgages into hordes...

One of the larger mistakes in the Obama financial regulatory reform package was its attempt to give the Federal Reserve additional powers so that it could in theory protect the economy from risks such as the housing bubble that could endanger the entire financial system. As we have argued in the past, the entire concept of minimizing systemic risk is a thankless task that is probably impossible. A key question is how much power such a regulator would have. As we said in June, “Congress could grant it such wide powers that the agency could intervene in just about any...

NEW YORK (AP) - The Obama administration is working up plans to push for new sanctions against Iran, targeting its energy, financial and telecommunications sectors if it does not comply with international demands to come clean about its nuclear program, U.S. officials said Monday. The officials said the U.S. would expand its own penalties against Iranian companies and press for greater international sanctions against foreign firms, largely European, that do business in the country unless Iran can prove that its nuclear activities are not aimed at developing an atomic weapon.

Former Alaska Gov. Sarah Palin emerged from a two-month absence from public view with a private talk, heavy on foreign policy, to a group of investors in Hong Kong. Palin was paid an undisclosed amount, said to be in the low six figures, for the 90-minute speech. She has said one of the reasons she resigned was to pay legal bills that have topped $500,000. The speech was closed to reporters, but Palin later posted lengthy excerpts on her Facebook page. "This speech had very little to do with advancing her political career and more to do with advancing her...

WASHINGTON – The chairman of a new congressionally appointed panel has promised a no-holds barred investigation into last year's devastating economic collapse. The inquiry will look into whether any of the nation's biggest financial firms and the regulators in charge of monitoring them were guilty of criminal misconduct. Phil Angelides, appointed this year by Democrats to lead the 10-member Financial Crisis Inquiry Commission, said the group will examine the conduct of top officials at such firms as Lehman Brothers, Citigroup, AIG and Bear Stearns, as well as mortgage buyers Freddie Mac and Fannie Mae.

Whoa. Amateur night at the White House. The White House is billing the President's mid-day speech today at Federal Hall in the belly of Wall Street as a "major" speech on financial reform. PR 101 says if you are president, you never give a major financial speech while the markets are open. If you say one thing that is negative for stocks, or misinterpreted as being negative toward stocks, the market starts to tank as the speech goes on, and that will be the headline. Financial speeches should always be delivered at 6:00 PM or later.

President Obama is planning a major address on Monday to mark the anniversary of the Lehman Brothers Collapse, to take credit for “taking us back from the brink.” Well, a speech seems appropriate, since next week marks another anniversary, that's the week, a year ago, that the president's political fortunes changed for the better. One year ago today, Lehman Brothers collapsed, which set off a week of financial bloodletting on Wall Street. Within a month, the Dow Jones Industrial Average dropped almost 3,000 points from 11,421.99 on September 12 to 8,451.19 on October 10. By the end of the year...

Everyone’s analysis of this financial crisis is far too complicated. The simple facts are that it was created by complete and utter greed on the part of various regulators and financiers. In simple terms, the banks (investment and otherwise) lobbied Congress, the SEC, and other regulators to let them engage in business practices that were neither sensible nor responsible (excess leverage, financial wizardry that turned junk subprime assets into “AAA” rated entities, and more). They did this under the pretence that these practices would be good for the market and US economy as a whole. The reality is that these...

THE CONSCIENCE OF A LIBERTARIAN by Wayne Allyn Root Review by Dr. John Hospers, © September 2009 My book, LIBERTARIANISM was first published in 1971. Its subtitle, ‘A Political Philosophy for Tomorrow’ has at long last come true today. I hope it’s not too late. The pragmatic reality is in Wayne Allyn Root’s brilliant new volume: THE CONSCIENCE OF A LIBERTARIAN - a title I might add, that was obviously carefully considered and borrowed in the “classic liberal” sense –that is, it was returned with dividends of thought and deserved tribute to The Conscience of a Conservative author, politician –...

Just when you think the Obama White House couldn't find any more power to seize... what with already successful takeovers of banks, Wall Street CEO salaries, auto industries, the energy industry with cap and trade, health care and his proposed Medicare czars, and seizing control from the CIA over terrorist interrogations... Boston.com lets us know what Barney Frank has been tasked with - "...assembling a complex bill to give the federal government unprecedented control over the country’s financial institutions."And the ambitious agenda - catering to Obama's agenda - will be creating the unlikely bedfellows of the Barney Frank liberal/progressive faction...

CAIRO (AFP) – Ramadan tradition dictates that Egypt's fruit-sellers nickname their dates to reflect unofficial popularity ratings, but this year the global recession has forced down the price of the 'Obama'. Named after US President Barack Obama who chose Cairo to deliver a landmark speech to the world's Muslims in June, the popular date was expected to sell for 25 Egyptian pounds (around 4.5 dollars) a kilogram (2.2 pounds). "People can't afford dates this year, we had to bring the price down to 15 pounds (2.7 dollars)," said Mohammed, a fruit vendor in the bustling Sayyeda Zeinab neighbourhood. Emulating the...

Back by popular demand... Extreme Value editor Dan Ferris parses the world's financial headlines...

“Obama’s inauguration speech triggered “one of the greatest munie-bond rallies in history.” Municipal bonds (munies) are rising in value as the threat of additional taxation looms.”

Frank's fingerprints are all over the financial fiascoBy Jeff Jacoby Globe Columnist / September 28, 2008 "THE PRIVATE SECTOR got us into this mess. The government has to get us out of it." That's Barney Frank's story, and he's sticking to it. **SNIP** "What does it mean when Boston banks start making many more loans to minorities?" I asked in this space in 1995. "Most likely, that they are knowingly approving risky loans in order to get the feds and the activists off their backs . . . When the coming wave of foreclosures rolls through the inner city, which...

Geithner wants to fast track financial regulatory reformCalcutta News.Net Saturday 25th July, 2009 Treasury Secretary Timothy Geithner has urged Congress to approve a financial package of regulatory system reform supported by President Barack Obama by the end of the year. Geithner and Federal Reserve Bank Chairman Ben Bernanke testified with other officials to the House of Representatives Financial Services Committee: House and Senate committees have worked for months to move financial system reform forward, including steps to intensify supervision of financial institutions, strengthen existing regulation, and create a Consumer Financial Protection Agency. Under the proposal the House Financial Services Committee...

US Democrats name financial crisis investigatorsWed Jul 15, 2009 1:57pm EDT (Adds Republican appointees) WASHINGTON, July 15 (Reuters) - Brooksley Born, a former head of the Commodities Futures Trading Commission who also warned about unwarranted risks in the U.S. financial system, was appointed on Wednesday to help investigate the causes of the U.S. and global financial crisis. Democratic leaders also named former California state treasurer Phil Angelides to chair the inquiry. But Born's appointment attracted more immediate attention because of her prominence in warning about financial risks before the crisis struck. **SNIP** The other four commission members named by House...

When a pro-terrorist organization announces its intention to launch a financial jihad against the West, it is well worth learning their methods --- especially when they promote a religious pseudo-financial scheme through largely unregulated practices purported to be safer than the conventional. But ultimately, the new assets are constructed with as little, and perhaps considerably less, transparency than the last wave of toxic assets that hit the economy, with catastrophic results. The Muslim organization Hizb Ut Tahrir capitalizes on Muslim Brotherhood founder Hassan al-Banna's 20th century derivative, encouraging followers to build a parallel financial structure. Al-Banna envisioned the resultant Shari'a-compliant...

If you haven't seen this, you need to. Christopher Whalen is a principal of a firm that rates the performance of commercial banks, Institutional Risk Analytics. I have featured some of his writing before in Tickers, but this one, submitted to The Senate Committee on Banking, Housing and Urban Affairs yesterday, takes the cake. You must read this in full but for those who are incapable of understanding it, I'll spell out details for you. Some excerpts: Simply stated, the supra-normal returns paid to the dealers in the closed OTC derivatives market are effectively a tax on other market participants,...

"Wall Street names that have been among the most buffeted in recent months – Merrill Lynch, UBS and Citigroup – are hiking pay for their top investment bankers in an attempt to stop an exodus of talent. Rivals report that poaching the best people from troubled banks has become far trickier. “Since the middle of May it has got far more difficult to get the people we want,� said one senior banker." ""I would say UBS and Merrill have each lost 25 per cent of their best people," said Patrick Field, chairman of London-based financial headhunter Hanover Search. In spite...

The banks were bailed out last fall, the automobile companies last winter. For Edward McClelland, a writer in Chicago, deliverance finally arrived a few days ago. Mr. McClelland’s credit card company was calling yet again, wondering when it could expect the next installment on his delinquent account. He proposed paying half of his $5,486 balance and calling the matter even. It’s a deal, the account representative immediately said, not even bothering to check with a supervisor. As they confront unprecedented numbers of troubled customers, credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially...

<p>Just a headline at this point. Is it really worth of a siren if we knew it all along?</p>

Brazil, Russia, India and China on Tuesday called for a more diversified international monetary system, but wrapped up their first full-fledged summit by avoiding any explicit criticism of the world's dominant currency, the U.S. dollar. The statement issued by the leaders from the so-called BRIC nations contained no reference to developing new reserve currencies to complement the dollar, which Russia had called for at a separate event earlier in the day. Instead, the cautious wording appeared to reflect China's concerns that any anti-dollar statements could erode the value of its currency reserves. "There is a strong need for a stable,...

The president is set to announce the details of a massive reorganization of financial market oversight, according to a published report. NEW YORK (CNNMoney.com) -- President Barack Obama is set to release on Wednesday the details of his proposed overhaul to how financial markets are regulated, according to a report published in The Wall Street Journal Monday.

It has been a bad week for gun owners in Tennessee, but the taxpayers lucked out when a proposal to tax online purchases when the retailer advertised through an instate company, website or blogger, stalled. Check to see if your state is considering an eTax.

While economists and real estate investors "celebrate" the slight deceleration in the pace of home price declines in the recent data, a quick look at home price trajectories over the past 100 and 50 years reveals little to cheer about and much to be feared. More significant than small month-to-month changes is the flow of home price patterns over decades. In his book Irrational Exuberance, Robert Shiller determined that in the 100 years between 1900 and 2000, home prices in the U.S. increased by an average of about 3.4% per year. These figures have not been adjusted for inflation. If...

Stephen Bloom, a lecturer of economics and personal finance at Messiah College and an estate planning attorney, has identified 10 building blocks for solid financial foundations. His list: 1. Make the World's Best Investment You can search for a lifetime, but you won't lock-in a better return on investment than you get by simply paying off your high-interest debt. 2. Work Your Butt Off Sorry, there's no substitute for plain old hard work. 3. Have Fun Spending Really, it's OK! But do your spending according to a plan. You can call it a budget, but calling it a spending plan...

In case you've ever wondered what it must have been like to read Pravda, reading the American media's treatment of the financial crisis and our wise leaders' expert management of it all has given everyone a wonderful opportunity. For instance, check out this piece from several days ago on Politico. (at article link) If you can't bring yourself to click on the link, I'll give you the headline: "Obama Would Regulate New 'Bubbles.'" Yes, you read that right. "Bubbles" just occur spontaneously. They have no cause or explanation. We need government to identify and destroy them. Sometimes I wish our...

“Vice President Joe Biden, tasked by the president with overseeing the "stimulus" efforts Wednesday issued a "progress report" to the president. As was to be expected, he calls the effort a success - and he included a set of PRESS CLIPPINGS TO PROVE IT”

WASHINGTON (AFP) – US Treasury Secretary Timothy Geithner said Wednesday that the financial system "is starting to heal" as a result of massive efforts to rescue banks and steady the housing market. In a speech to community bankers, Geithner said the adjustment in the financial system has largely been accomplished as a result of government rescue efforts. "The financial system is starting to heal," he said. "Concern about systemic risk has diminished. And overall lending conditions have started to improve." Geithner said this is reflected in easier borrowing conditions for corporate bonds and interbank lending as well as for mortgages,...

I'm sure you've noticed it. Headlines like "US trade deficit widens in March, BUT less than expected." or "China's exports sink, BUT factory investment rises". We could call it the silver-lining financial press. I can't recall when the MSM had so much "accent the positive" attitude. Oh yeah, when Bill Clinton was president.

Financial stocks drag Wall Street downBy Tim Paradis The Associated Press Posted: 05/11/2009 01:37:51 PM PDT NEW YORK - Financial stocks dragged Wall Street lower Monday as traders worried that last week's rally was overdone. Investors who had been focused on what banks would pass the government's "stress tests" are now turning to the fallout from the evaluation. Three banks that got good marks on the tests last week said Monday they plan to issue shares to help repay federal loans they received last fall. Concerns about more shares hitting the market weighed on financial stocks. The Dow Jones industrial...

At the end of April the Obama administration tested its ability to take direct control of the US financial system. The test was a success. There is a revolution underway which would impress Chavez or Castro. If you were like most people, you did not realize it happened. As the details of the GM restructuring plan emerged, on Monday, April 27th, Lawrence Kudlow was one of the first to sound the alarm as secured lenders and bond holders were being given a fraction of the amount owed to them under long established bankruptcy law. What is going on in this...

WASHINGTON – The Senate has agreed to spend $5 million to investigate the cause of the economic crisis, as it moves toward passing a $245 million bill that would substantially increase the number of FBI agents and prosecutors working mortgage fraud cases. ... "We must hold those responsible for this calamity to account," said Sen. Kent Conrad, D-N.D.

Up next for the Obama Administration and its ongoing attempt to completely redefine the American financial industry - the credit card industry. First, the comes rhetoric: "We are ... working with Congress on legislation that will promote simplicity, require transparency, demand fairness, and ensure accountability, so that we can strengthen consumer protections against abusive and deceptive practices," says Valerie Jarrett, Senior Advisor to the President. Whatever that means. Apparently, those platitudes mean that the White House is putting the screws to the credit card industry.

“This week, in honor of Tax Day, CFA is officially launching Tax Bites. In an effort to highlight the hidden burdens imposed by government, Americans for Tax Reform Foundation has estimated average prices and taxes imposed on 13 popular targets for multiple layers of hidden taxes. “

Boy, do you remember all the meltdown over the $165 million AIG bonuses? Remember all the Democrats climbing all over each other to win the coveted title of "most outraged"? Remember how they passed that unconstitutional law to specifically target the AIG employees receiving bonuses by singling them out to punish them with a 90% tax? Remember Barney Frank claiming on the floor of the House of Representatives that Republicans who opposed this completely unconstitutional Bill of Attainder somehow suffered from a "psychological disorder"? The funny thing was that Democrats - who came so unglued over the AIG bonuses -...

When the tree fell in the financial forest, the reported sound was deafening but hardly anyone talked about the ax. Imagine if Hitler had won World War Two and having done so, his historians and propaganda machine would never speak of his crimes. Rather, they would blame all the problems on those horrible, nasty Jews led by Churchill and Roosevelt...

WASHINGTON, April 2, 2009 – The global financial crisis is adding a layer of uncertainty that could exacerbate problems in many parts of the world, the chairman of the Joint Chiefs of Staff said on NBC-TV’s “Today Show” this morning. “This global financial crisis in the months ahead could have a significant effect on security around the world,” Navy Adm. Mike Mullen told host Matt Lauer during the interview. “That creates an additional sense of urgency [for leaders] in resolving that as fast as we can.” The chairman did not speculate as to where problems might crop up. Some obvious...

The second edition of “Rich States, Poor States” has just been released. Surprise! Surprise! Low tax states have the highest growth and high tax states have the lowest growth.

***The following are excerpts. It is far better to read the entire commentary (long but good). The graph is scary - it will make sense if you read the whole commentary .*** Last week, the U.S. Treasury Secretary advanced two proposals; one was a call for regulatory reform that is absolutely essential to the resolution of the current financial crisis. The other was a recipe for the insolvency of the FDIC, which would squander public funds to subsidize private speculation in troubled mortgage securities. [snip] Indeed, the only way for the toxic asset sale to increase shareholder equity is if...

China challenges US global financial leadership ago SHANGHAI (AP) — The only major economy still growing at a fast clip, China is being unusually forthright in challenging the U.S.-led global order ahead of an April 2 summit on the financial crisis. In his second rebuke of U.S. leadership this past week, the central bank governor, Zhou Xiaochuan, said China's rapid response to the downturn — including a 4 trillion yuan ($586 billion) stimulus package — proved the superiority of its authoritarian, one-party political system. "Facts speak volumes, and demonstrate that compared with other major economies, the Chinese government has taken...

WASHINGTON - With the country sinking deeper into recession, the Federal Reserve launched a bold $1.2 trillion effort Wednesday to lower rates on mortgages and other consumer debt, spur spending and revive the economy. To do so, the Fed will spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.

The City Of Pawtucket gets a Skate Board Park as part of the Friday the 13th Stimulus Package. Obama promised money would be spent on “critical” projects. City of Pawtucket is in deep trouble, the US Taxpayer and Taxpayers for generations to come, are all very happy to save the city of Pawtucket with this most “critical” need project. FYI.. Rhode Island’s. Rep Patrick Kennedy and Senator Jack Reed both sit on the powerful panels that have authority over all the federal gov’s DISCRETIONARY spending ... Appropriations Committees

In recent weeks, a number of U.S. banks have asked to give back their taxpayer-funded government bailout money. The reason: too many strings attached. In short, despite White House denials, the federal government — not bankers — now runs our banking system.

Tired, Frustrated Obama Inspires Zero Confidence, Scares MillionsMarch 9, 2009 **SNIP** OBAMA: By the time we got here, there already had been an enormous infusion of taxpayer money into the financial system, and the thing I constantly try to emphasize to people is that if coming in the market was doing fine, nobody would be happier than me to stay out of it. REPORTER: Right. OBAMA: You know, I have more than enough to do without having to worry about the financial system. RUSH: Now, that's an inspiring thing to say. I have more than enough to do without having...

At the moment, only a fool would argue with the premise that the primary trend for the global economy at this time is ‘contractionary.’ ‘Down -- and down hard’ is the best phrase to describe the current global economic trend. Some would argue that in this context, Deflation is the dominant theme in what we have sometimes characterized as the ‘Leaky Bathtub Economy.” Picture the global economy as the bathtub, where on the one hand we have a huge credit deflation taking place where debt is being extinguished, defaulted upon, and wealth is being destroyed at a record rate.