Archive for the ‘gold’ Category

Financial Advice, Recovery, Trumped by Obama, Congress, Media, Polls

March 21, 2009

Last week when news came that AIG was paying huge bonuses to employees even after the federal bailout, the president’s two top financial advisors knew what to tell the president.

“Pay the bonuses.  We can’t void a contract.”

That advice came from Larry Summers and Treasury Secretary Tim Geithner: Obama’s top economic advisors.

“Summers is the head dog.  He’s Geithner’s mentor.  Geithner is the protoge.  I don’t know how Obama fires one and keeps the other,” a top man in New York financial circles told us.

So maybe that is why Obama has not yet fired Geithner.

Obama Talks Too Much: Time For Action
(Time to Fire Geithner and Summers Too?)

US President Barack Obama, seen here on January 29, 2009, sits ... 
US President Barack Obama, seen here on January 29, 2009, sits alongside Treasury Secretary Timothy Geithner.  Obama has to get his face out of the same photo with Geithner’s face….

And maybe that is why the stimulus contained a provision to allow the AIG bonuses: Geithner and Summers made sure it was put in.

Dodd would know but hasn’t named names.

Heck: Dodd has a house in Ireland to make his retirement happy and secure.

With the nation in what the president has called a financial “crisis” and even a “catastrophe,” Obama is moving away from his top financial advisors at least on some issues, and sticking close to the advice of White House Chief of Staff Rahm Emanuel and policy advisor David Axelrod.

“Those guys know politics.  They are listening to the Hill and watching the media and the polls.  That’s driving Obama’s policy right now,” a top political analyst told us.

Last year, while still a senator, Obama voted for the bailout for AIG….

Meanwhile, Ben Bernanke is taking heat from media folks.

Bernanke released  more money into the nation’s money supply this week and the price of gold went up while the value of the dollar dropped…..

****************

Dodd under fire in his home state:

Dodd’s decision to move his family to Iowa to campaign for a doomed bid for president, his initial refusal to release documents of his two controversial mortgages with Countrywide, criticism of how he financed a vacation cottage in Ireland, and now his involvement as Senate Banking Committee chairman in the bill that ultimately protected bonuses for executives at insurance giant AIG have all taken their toll.

Read it all:
http://news.yahoo.com/s/ap/2009
0321/ap_on_re_us/aig_outrage_dodd_3

Related:
Wall Street Journal: “Geithner Incapacitated;” President Voices Support

Government To Have Bigger Role in All American Lives; Obama Seeks to Increase Oversight of Executive Pay
Bankers Press Case Against Punitive Tax 

Obama, Geithner, Congress Squandering Confidence Needed For Recovery

Bonus backlash hits Wall Street

American Democracy With Checks and Balances is Broken; Media, Congress Failing

Obama’s Radicalism Is Killing the Stock Market

 Obama Spending, Tax Plans Likely Out The Window As CBO Predicts Much More Debt

Obama: Why Are We Saving Geithner and His Incestuous Relationship With Wall Street?

Finance, one of America’s great industries, being destroyed by Congress during crisis?

For Cuomo, AIG, Financial Crisis Is His Political Moment

 Did Obama White House Fuel AIG Bonus Mess To Enact Tougher Rules With Public Support, “Outrage”?

Fed to pump another $1 trillion into U.S. economy “from thin air”

March 19, 2009

Expect elegant Ben Bernanke on Jay Leno before long.  He’s the coolest Obama spokesman on the economy — as he proved Sunday on “60 Minutes.”

But he knew about the AIG bonus money last year and he hasn’t said a word.

And four years ago, Ben Bernanke famously identified the huge influx of foreign currency as a sign that America was about to go over an economic ledge — but he didn’t understand what that might mean.

As FinancialPost.com reports:

[The] Federal Reserve chairman delivered an elegant mea culpa for pinpointing the massive capital inflows as a force lifting the U.S. economy, but failing to stop Americans from going on a destructive spending spree.

“The global imbalances were the joint responsibility of the United States and our trading partners, and although the topic was a perennial one at international conferences, we collectively did not do enough to reduce those imbalances,” the Fed chief told the Council on Foreign Relations.

Then yesterday Bernanke released $1 trillion into the U.S. economy “out of thin air.”

We haven’t created more jobs or more wealth but we do have more money now — which will usually start inflation and an economic roller coaster ride….

Before long the only financial guys getting bonuses will be Chinese….

Related:
http://www.financialpost.com/persona
l-finance/wealthy-boomer/story.html
?id=1374217

**************************

The Federal Reserve sharply stepped up its efforts to bolster the economy on Wednesday, announcing that it would pump an extra $1 trillion into the financial system by purchasing Treasury bonds and mortgage securities.

By Edmund L. Andrews
International Herald Tribune

Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air. But the moves on Wednesday were its biggest yet, almost doubling all of the Fed’s measures in the last year.

The action makes the Fed a buyer of long-term government bonds rather than the short-term debt that it typically buys and sells to help control the money supply.

The idea was to encourage more economic activity by lowering interest rates, including those on home loans, and to help the financial system as it struggles under the crushing weight of bad loans and poor investments.

Investors responded with surprise and enthusiasm. The Dow Jones industrial average, which had been down about 50 points just before the announcement, jumped immediately and ended the day up almost 91 points at 7,486.58. Yields on long-term Treasury bonds dropped markedly, and analysts predicted that interest rates on fixed-rate mortgages would soon drop below 5 percent.

U.S. Federal Reserve Chairman Ben Bernanke speaks at the Council on Foreign Relations in Washington March 10, 2009.

U.S. Federal Reserve Chairman Ben Bernanke speaks at the Council on Foreign Relations in Washington March 10, 2009.  Reuters/Yuri Gripas
.

But there were also clear indications that the Fed was taking risks that could dilute the value of the dollar and set the stage for future inflation. Gold prices rose $26.60 an ounce, hitting $942, a sign of declining confidence in the dollar. The dollar, which had been losing value in recent weeks to the euro and the yen, dropped sharply again on Wednesday.

In its announcement, the central bank said that the United States remained in a severe recession and listed its continuing woes, from job losses and lost housing wealth to falling exports as a result of the worldwide economic slowdown.

“In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability,” the central bank said.

Read the rest:
http://www.iht.com/articles/2
009/03/18/business/fed.php

http://michellemalkin.com/20
09/03/19/the-david-copperfi
eld-school-of-economic-recovery/