Friday, August 13, 2010

Even the Poor Are Abandoning Obama, According to Gallup Poll Data

from CNS News (8/13/2010):

"In every week of his presidency until now, Barack Obama has enjoyed a majority approval rating in the Gallup Poll from people earning less than $2,000 per month. But that changed in the Gallup survey conducted from Aug. 2-8, when only 49 percent of Americans in that income bracket said they approve of the job Obama is doing.

"This marks the first time since Obama was inaugurated on January 20, 2009, when Americans in all four of the income brackets reported in Gallup’s weekly survey of presidential approval gave Obama less than 50 percent approval.

"For the week of Aug. 2-Aug. 8, only 42 percent of Americans earning $7,500 per month or more said they approve of the job Obama is doing. Forty-four percent of those earning between $5,000 and $7,499 said they approve of the job he is doing. And forty-six percent of those earning between $2,000 and $4,999 said they approve of the job he is doing." [The article continues.]

It's surprising to me that well over 40% of people in each category still support Obama. But then, well over 30% of Democrats believe the media (TV, newspaper) after all ...

Thursday, August 12, 2010

Germany Economy Grew By 2.2% in Q2, Best in Two Decades

unlike the US economy whose Q2 GDP growth may be reduced to mere 1%.

For more on Germany's second economic miracle since the World War II, read my post from July.

From AP (8/13/2010):

BERLIN (AP) -- Official data show that the German economy -- Europe's biggest -- grew by 2.2 percent in the second quarter compared with the previous three-month period. That was its best performance since reunification two decades ago.

Preliminary figures from the Federal Statistical Office showed Friday that growth surged from 0.5 percent in the first quarter -- a figure that was revised up to more than double the initial reading of 0.2 percent.

An improving global economy has fed demand for German exports, while industrial orders and business confidence have been rising.

Second-quarter gross domestic product for the full 16-nation eurozone are due later Friday.

Wednesday, August 11, 2010

Ben Bernanke's "Quantitative Recycling" Disappoints, the Stock Market Tanks

On closer inspection, people seem to be finding out that Ben Bernanke's "Quantitative Easing Part 2" is not much of an "easing" after all. Not even "lite". All his Fed is going to do (at least so far) is to maintain the current size of their balance sheet ($2 trillion, more or less) by buying Treasuries (notes, and it turns out, bonds and TIPS) from banks with the money freed up from maturing agency bonds and agency-backed MBS. As the result, the excess reserves at the Fed will be maintained.

Some call it "Quantitative Nothingness". I'd say "Quantitative Recycling".

How is this supposed to "stimulate" anything on Main Street? (Answer: it isn't.) Ben is not living up to his moniker "Helicopter Ben", is he? This is worse than "doing more of the same"; he is "doing more of the same on a smaller scale", and pretending to support a sagging (if not toppling) economy while in fact all he's doing is to support the risk assets. Again. For the big banks and their big clients.

This recycling operation will amount to $300 billion or so, although the exact amount is unknown at this point. Judging by the way they have been squawking for a few months, it seems to me that PIMCO has another boatload of Treasuries ($300 billion of them, probably) to sell to Ben, just like they did during the first quantitative easing operation.

US dollar jumped today, so did 30-year bond as it turned out today that the Fed would be buying 30-year bond also (the initial indication was that they would buy 2-10 years). Now the US Treasuries have the floor again, thanks to the ready buyer (the Fed). In order to buy Treasuries you need US dollars. So, US dollars get bid up; export costs go up, import costs go down, trade deficit will go up, pressuring the GDP.

The stock market duly took note today, one day after the Fed's announcement, by gapping down and sinking with no traction whatsoever. Dow lost nearly 2.5%, S&P500 lost 2.82%, Nasdaq lost over 3%. (Another reason why you shouldn't be watching CNBC and listening to Jim Cramer, unless you are going to do the opposite.)

Tuesday, August 10, 2010

Obama Signs $26 Billion "Jobs" Bill for Public Union Workers

which in fact was a bill for the modernization of the FAA (H.R. 1586). Go figure.

Obama Signs Measure for $26 Billion in State Aid (8/10/2010 Bloomberg)

"President Barack Obama signed into law legislation providing $26 billion in aid to cash-strapped state governments amid fears the U.S. economy is stalling just months before this year’s midterm elections.

"The House, taking a one-day break from the campaign trail, returned to Washington today to approve the measure 247-161 before lawmakers adjourned once again for their August recess.

The bill, designed to prevent thousands of layoffs of teachers and other public service employees, cleared the Senate last week after a pair of Republicans joined Democrats in breaking a filibuster.

"“We can’t stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe,” Obama said earlier today in a White House Rose Garden appeal for passage." [The article continues.]

Hahahaha that's rich. He has no problem seeing nearly half a million Americans go unemployed every single week. For many non-ruling class people who have been unwillingly footing the bills for his government, pink slips to these public union employees aren't coming fast enough.

$26 billion, of which $16 billion will go to Medicaid help and $10 billion for education, is supposed to help save 150,000 jobs, according to Mark Zandi, chief economist at Moody's who avers, "Even with the $26 billion, they are going to be cutting into real bone".

Hahahahaha that's even richer. $26 billion divided by 150,000, that is $173,333 per "saved" public union job.

This is nothing but recycling the campaign donation. Dems want to distribute this money to their core supporters (public unions) so that these supporters will donate to the Dems campaigns.

Obama defends that it won't add to the deficit. Uh huh. This $26 billion is to be funded by cutting the funding for a renewable energy loan program and ditching $12 billion worth of food stamps, and taxing multinational corporations to the tune of $10 billion. Further burdening the businesses in an economy threatening to go "double-dip" and taking away from people who are struggling so that the public union employees get to keep the jobs and benefits (and in gratitude they will vote Democratic come November). Make sense, doesn't it?

In case you aren't aware, the federal help for public union workers like teachers, firefighters, and police have been scattered all over the bills that this Congress have passed. Tens of billions here, another tens of billions there.

QELite Here We Come...

(Federal Reserve Press Release)

Release Date: August 10, 2010

For immediate release

Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.

Measures of underlying inflation have trended lower in recent quarters and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve's holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.1 [Emphasis is mine.] The Committee will continue to roll over the Federal Reserve's holdings of Treasury securities as they mature.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh.

Voting against the policy was Thomas M. Hoenig, who judges that the economy is recovering modestly, as projected. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and limits the Committee's ability to adjust policy when needed. In addition, given economic and financial conditions, Mr. Hoenig did not believe that keeping constant the size of the Federal Reserve's holdings of longer-term securities at their current level was required to support a return to the Committee's policy objectives.

Market Awaits Ben Bernanke

Sometime after 2:15PM EST, the Federal Reserve's FOMC will divulge what they've been supposedly discussing today. The stock market gapped down this morning, then slowly clawed its way back up, but now sinking again. Hardly a bullish move.

There has been so much chatter of QE2 or QELite in the past month that the stock market, I'm afraid, has priced it in fully. Anything less coming out of Ben Bernanke may trigger a market sell-off; anything more may still trigger a sell-off, because investors (and algo bots programmed to mimic carbon-based investors and analysts) are now convinced that the US economy is in a very bad shape, probably worse than a year ago.

Benanke in a pickle. Why he bargained so hard to keep his job is still a mystery to me, unless he was promised untold riches to be had once he's no longer the Fed chairman. Maybe a title of "Sir".

As for the stock market, traders will tell you that the initial move right after the FOMC announcement is usually a false one.

Let Them Eat Cake - Federal Labor Union Version

The NTEU (National Treasury Employees Union) who represents over 150,000 employees in 30 august federal government agencies and departments says its members deserve higher salaries and benefits because they are more skilled and more educated than the private sector, according to USA Today's article. The private sector, by the way, deserves lower pay because the government is contracting lower pay jobs to the private sector.

They are so deserving, the federal government employees, that President Obama has proposed 1.4% pay raise across the board for 2011 for his 2-million federal workforce as the country languishes in high unemployment and contracting tax base that cannot support these deserving public union employees.

But no matter. The masses in the private sector don't count unless they cough up taxes to the feds so that the first lady can romp off to Spain to comfort her friend.

Below is an article by USA Today.

Federal workers earning double their private counterparts
(Dennis Cauchon, 8/10/2010 USA Today)

At a time when workers' pay and benefits have stagnated, federal employees' average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds.

Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.

Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.

The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year.

Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years.

"The data are not useful for a direct public-private pay comparison," says Colleen Kelley, president of the National Treasury Employees Union.

Chris Edwards, a budget analyst at the libertarian Cato Institute, thinks otherwise. "Can't we now all agree that federal workers are overpaid and do something about it?" he asks.

Last week, President Obama ordered a freeze on bonuses for 2,900 political appointees. For the rest of the 2-million-person federal workforce, Obama asked for a 1.4% across-the-board pay hike in 2011, the smallest in more than a decade. Federal workers also would qualify for seniority pay hikes.

Congressional Republicans want to cancel the across-the-board increase in 2011, which would save $2.2 billion.

"Americans are fed up with public employee pay scales far exceeding that in the private sector," says Rep. Eric Cantor, R-Va., the second-ranking Republican in the House.

Sen. Ted Kaufman, D-Del., says a pay freeze would unfairly scapegoat federal workers without addressing real budget problems.

What the data show:

Benefits. Federal workers received average benefits worth $41,791 in 2009. Most of this was the government's contribution to pensions. Employees contributed an additional $10,569.

Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.

•Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers.

Monday, August 9, 2010

There He Goes Again - Obama Attacks Bush

Sure he inherited the policies of his predecessor. All presidents except for the very first one inherited the policies of their predecessors. He didn't need to inherit by not running. But there he goes again, attacking Bush while greatly expanding just about every single policy of Bush - from Afghan war to warrant-less wiretapping to deficit spending to "stimulate" economy.

Obama attacks Bush policies in Bush's home state
(Ross Colvin, 8/9/2010 Reuters)

"Obama hammers Bush's "disastrous" economic policies.

"AUSTIN, Texas, Aug 9 (Reuters) - President Barack Obama attacked the economic policies of his Republican predecessor George W. Bush in Bush's home state on Monday as evidence of the way Republicans would operate if given power in Nov. 2 U.S. congressional elections.

"At a fund-raising event for Democrats in Dallas, where Bush now lives, Obama said the former president's "disastrous" policies had driven the U.S. economy into the ground and turned budget surpluses into deficits.

"Obama defended his repeated references to Bush's policies, saying they were necessary to remind Americans of the weak economy he inherited from Bush in January 2009.

""The policies that crashed the economy, that undercut the middle class, that mortgaged our future, do we really want to go back to that, or do we keep moving our country forward?" Obama said at another fund-raising event in Austin, referring to Bush's eight years as president.

"In reminding voters about the policies of the unpopular Bush, Obama is trying to protect his fellow Democrats' majorities in Congress and limit anticipated Republican gains." [The article continues.]

I wonder who he is thinking about when he says "our" country. I also wonder which direction he thinks is "forward".

Two rats have bolted from Obama's economic policy team already. I wonder what Obama's definition of "disaster" is.

Sunday, August 8, 2010

UK, France Attended Nagasaki Atomic Bomb 65th Anniversary Ceremony

but not the US, who sent its ambassador to Hiroshima's ceremony last week.

Delegates from 30 countries joined the United Kingdom and France, who attended the ceremony for the very first time.

Nagasaki holds 65th A-bomb memorial (8/9/2010 Press TV)

"Japan commemorates the 65th anniversary of the United States' dropping of an atomic bomb on Nagasaki, three days after its first nuclear bomb was dropped on Hiroshima.

"The ceremony started on August 9 around 11:02 a.m., the time of the 1945 bombing, in the southern city of Nagasaki, AP reported on Monday.

"Representatives from 32 countries attended the ceremony. The UN Secretary-General Ban Ki-moon visited Nagasaki a day before the Hiroshima anniversary. However, the United States did not send a delegation to the event.

"The US destroyed Nagasaki by a plutonium bomb three days after dropping an atomic bomb on Hiroshima during the final stages of World War II.

"Around 80,000 people were killed in the Nagasaki attack in addition to the 140,000 who were killed in Hiroshima.

"Washington has never acceded to Japan's demands for an apology for the loss of thousands of innocent lives." [The article continues.]

It has always struck me as extremely ironic that the US decided to drop an atomic bomb on Nagasaki. The city had a significant population of Christians, who survived the brutal persecution under the Tokugawa Shogunate for over 200 years. After the Meiji Restoration, the freedom of worship came finally to Nagasaki, only to be obliterated by a Christian nation.

The photos are from Wikipedia, Nagasaki before and after the bomb. Nothing left.

People in Nagasaki and Hiroshima hoped that President Obama would visit their cities after the US president won the Nobel Peace Prize last year. Their naivete is almost painful.

Where Has All the Oil Spill Gone?

Long time passin'...

Disaster that never was: Why claims that BP created history's worst oil spill may be the most cynical spin campaign ever (David Jones, 8/6/2010 Mail Online)

"The warm, white sand stretches for miles as clean and flat as a freshly laundered bed sheet.

"The turquoise sea is so clear that I can see silvery fish playing around my toes as I take a cooling paddle.

"If there is any more pristine resort in which to spend a summer holiday than Pensacola Beach, on the Gulf Coast of Florida, I would like to find it.

"And yet, at a time of year when usually there is barely room to unfold a deckchair, the shore is eerily deserted.

"Ask Pensacola’s fretfully quiet seafront traders why the tourists have all stayed away and they angrily recall one chaotic day back in late June.

"Then, hungry for dramatic TV footage to support Barack Obama’s announcement, that the BP - or, as he preferred, ‘British Petroleum’ - oil spill was ‘the worst environmental disaster America has ever faced’, news networks descended on their town.

"They quickly found what they were looking for: shocking images of Pensacola’s famously white beaches thickly-coated with sticky, black crude oil and apparently beyond salvation.

"The apocalyptic message was reinforced in doom-laden interviews with locals. ‘It’s damn near biblical. This place is done for!’ lamented 36-year-old Kevin Reed, whose family have swum and sunbathed in the area for generations.

"Yet, as I saw this week, nothing could be further from the truth. Strolling along the beach for an hour, I found just one, pea-sized tar-ball which crumbled to nothing between my fingers.

"When, as a young boy, I played on Morecambe beach in Lancashire, worse things often washed up from the nearby ICI refinery.

"Moreover, if the U.S. TV news crews had returned just three days after their original visit, they would have seen that the black morass had already been removed by some of the 20,000 clean-up workers hired by BP.

"The workers are still there - only now they are using toothbrushes to sift out even the tiniest particles of oil."

The article continues, to discuss "the disaster" on the ecosystem and the Obama administration's "response" driven by political considerations; you can also view the pictures of a pristine white beach and of marsh grasses with new green growth.

Well, it's not just Brits wondering out loud where the dratted oil has gone. People (not just hard-core environmentalists) attribute this lack of oil to the "toxic oil dispersant", "spraying of bleach on the beaches at night", or "massive importation of white sand to replace the soiled sand on the beach".

Yes, it could be any of those, or it could be that what some sites and some scientists have been saying all along is correct - that the spill is really a tiny drop in the bucket, and the ecosystem is more robust than portrayed and will recover.

(And cleaning the oil soaked birds is just for the camera, in case you don't know yet. They break the birds' necks after the camera stops rolling.)

With his scaremongering (deliberate or out of ignorance), President Obama has managed to kill the tourism in the Gulf region for the summer. And since it is a "perception" by the tourists that the beaches are soiled with oil that caused the cancellations, not the actual damage, Obama's Pay Czar Kenneth Feinberg will find no reason to compensate the tourism industry.

My questions at this point are:

What will happen to that $20 billion escrow fund? My guess is that the Obama administration will try to divert that money to pay the public union workers in the region - teachers, firefighters, police, you know, the usual people who benefit from this administration.

What was that story of people dying from internal hemorraging? Or about a medical treatment facility with barbed wire fence in Venice, LA?