Friday, September 17, 2010

Elizabeth Warren to Be Obama's New Czar

That's the last person whom I expected to join Obama's cadre of czars, but there she is, quite happily, it sounds like.

Elizabeth Warren gets the job of shaping the Consumer Financial Protection Bureau she first proposed (9/17/2010

But her capacity is not that of the bureau director, which requires the formal nomination and the Senate confirmation. Instead, she has become one of Obama's czars:

"the White House is naming Warren an assistant to the President and special advisor to Treasury Secretary Timothy Geithner"

Assistant to the Prez? Special advisor to Timmy?

The Obama White House didn't even try to formally nominate her or make a recess appointment. Instead, Obama has named her as his assistant, personally responsible to him only, to shape this agency which is supposed to protect consumer (hahahahaha).

I am not sure if this nebulous, sprawling financial reform law (Dodd-Frank bill) even allows the White House to shape the agency like this. (By the way, this agency is to be housed within the Federal Reserve, a private entity which is now known for wrecking havoc by causing boom and bust throughout its existence. Isn't that comforting.)

Ms. Warren, welcome to my list of Obama Czars. I am disappointed, but not surprised. After all, a Harvard Law professor who believes in the power and authority of the government to "do the right thing" is expected to happily work with the government. When this agency fails to "protect", she and her cohorts have this timeless excuse to make: "Oh we meant well.... Who could have known?"

Thursday, September 16, 2010

City Controller of Los Angeles: $111 Million Stimulus Saved 55 Jobs

Wendy Greuel, City Controller of Los Angeles writes for Huffington Post:

Los Angeles Shows $111 Million in ARRA Grants Has Only Created 55 Jobs (Wendy Greuel, 9/16/2010 Huffington Post)

"I released two very disappointing audits today of how the City of Los Angeles has used American Recovery and Reinvestment Act (ARRA) funds. The audits looked at the how the two departments that have received the largest amount of ARRA funding so far - the Department of Transportation (LADOT) and the Department of Public Works (DPW) - have used those funds and how many jobs were created. Los Angeles has become the largest City in America to conduct an audit of how ARRA funds have been expended.

"DPW has received $70.65 million and created or retained 45.46 jobs, though they are expected to create 238 jobs overall (the fraction of a job created or retained correlates to the number of actual hours works). LADOT has been awarded $40.8 million and created or retained 9 jobs, though they are expected to create 26 jobs overall. Overall, the Departments have received $111 million in federal stimulus funds out of the $594 million the City has been awarded so far and created or retained 54.46 jobs.

"I'm disappointed that we've only created or retained 55 jobs after receiving $111 million in ARRA funds. With our local unemployment rate over 12% we need to do a better job cutting the red tape and putting Angelenos back to work." [Emphasis is mine. The article continues.]

Even at a liberal/progressive bastion like Huffington Post, the readers' comment section is getting sharper and better than the main article. Here are some of the posts:

See, this just goes to prove that Paul Krugman is right -- if the stimulus had been several trillion dollars, we could easily have created a couple hundred jobs in Los Angeles. Maybe even 250! And then, man, we're on the road to recovery.

Only government can give you value for money like that.

I am not sure what is more astounding - that $111,000,000 only created 55 jobs or that spending $420,000 per job to get the 264 anticipated would have been considered a success.

There's a reason why people go into public service. It's because there's no way in hell they would survive in private enterprise.

they would probably be better off if they just paid 2000+ people 50k for a year to do nothing.

What Ms. Greuel would never admit but is crystal clear to everyone else outside any government: government ISN'T the answer. It never was, it never will be.

(h/t jdgreger)

Tuesday, September 14, 2010

Bank of Japan Intervention Sends Yen Back to Last Friday's Level

well, ever slightly above but not by much.

Still, Nikkei celebrates by reversing almost 300 points.

According to Nikkei Shinbun newspaper, the intervention was ordered by the Finance Minister at 10:30 AM Japan Standard Time, and Bank of Japan carried out the operation of dumping yen at 10:35 AM.

Wanna bet how long will this last?

Unlike the privately-owned Federal Reserve, Bank of Japan is 55% owned by the government. Unlike the Fed, the shares of Bank of Japan is traded on a stock exchange (Jasdaq Securities Exchange).

All That Glitters - Gold Breaks Out


In the meantime, algo bots that have reduced the US stock market to a joke seem to be moving into the commodities market. For more, read "CME Says Test Orders Were `Inadvertently' Made in Energy, Metals Markets" (9/14/2010 Bloomberg)

Monday, September 13, 2010

Japan's DPJ to Elect Next Leader

in about hour and a half (2:00 PM Japan Time).

Naoto Kan (current Prime Minister after Hatoyama resigned) vs Ichiro Ozawa (the king maker). For stronger leadership, Ozawa would be a better choice for Japan. Probably more realistic than Kan or Hatoyama, who tried his best to ape Obama policies.

For forex traders and the US equity market traders, Ozawa would be better, as he is very likely to intervene in the currency market to (try to) stop the rapid appreciation of yen.