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James Quinn is a senior director of strategic planning for a major university. James has held financial positions with a retailer, homebuilder and university in his 25-year career. Those positions included treasurer, controller, and head of strategic planning. He is married with three boys and... More
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    Fed Independence or Fed Secrecy?

    Rep. Ron Paul
    Texas Straight Talk
    Jul 14, 2009

    Last week I was very pleased that hearings were held on the independence of the Federal Reserve system. My bill HR 1207, known as the Federal Reserve Transparency Act, was discussed at length, as well as the general question of whether or not the Federal Reserve should continue to operate independently.

    The public is demanding transparency in government like never before. A majority of the House has cosponsored HR 1207. Yet, Senator Jim DeMint's heroic efforts to attach it to another piece of legislation elicited intense opposition by the Senate leadership.

    The hearings on Capitol Hill provided us with a great deal of information about the types of arguments that will be levied against meaningful transparency and how the secretive central bankers will defend the status quo that is so beneficial to them.

    Claims are made that auditing the Fed would compromise its independence. However, by independence, they really mean secrecy. The Fed clearly cherishes its vast power to create and spend trillions of dollars, diluting the value of every other dollar in circulation, making deals with other central banks, and bailing out cronies, all to the detriment of the taxpayer, and to the enrichment of themselves. I am happy to challenge this type of "independence".

    They claim the Fed is endowed with special intellectual abilities with which to control the market and that central bankers magically know what the market needs. We should just trust them. This is patently ridiculous. The market is a complex and intricate thing. No one knows what the market needs other than the market itself. It sends signals, such as prices, that should be reacted to and respected, not thwarted and controlled. Bankers are not all-knowing and cannot ignore the rules of supply and demand. They might act as if they are, but their manipulation of the market just ends up throwing it wildly off balance, which gives us the boom and bust cycles.

    They claim the Fed must remain apolitical. No organization is apolitical that relies on the President to appoint the Chairman. In fact, it is subject to the worst sort of politics ­ power to create trillions of dollars and affect the value of every dollar in the country without the accountability of direct elections or meaningful oversight!  The Fed typically enacts monetary policy that is favorable to particular administrations close to elections, to the detriment of long term considerations. They do this partly because of the political appointee process for the Chairmanship.

    The only accountability the Federal Reserve has is ultimately to Congress, which granted its charter and can revoke it at any time. It is Congress's constitutional duty to protect the value of the money, and they have abdicated this responsibility for far too long. This was the issue that got me involved in politics 35 years ago. It is very encouraging to finally see the issue getting some needed exposure and traction. It is regrettable that it took a crisis of this magnitude to get a serious debate on this issue.

    Jul 13, 2009
    Rep. Ron Paul

    Jul 16 12:20 PM | Link | 2 Comments

    I thought the price of inaction was millions of jobs lost, homes lost, and crippling dependence on foreign oil. Thank God we passed the $767 billion stimulus package. Since Obama signed the stimulus into law, the economy has lost more than two million jobs and the unemployment rate has climbed to 9.5% when the  White House predicted it would stay below 8% if the stimulus was passed. He said it would create or save three million jobs in 2009. Now he says the package was designed for 2 years. Was he lying in February or is he lying now? Foreclosures are accelerating. The deficit is soaring. And last time I looked, we were still dependent on foreign oil. His lies are continuing regarding healthcare and cap & trade. The result will be disaster.

    Homes are being lost at an increasing rate every month since the passage of the stimulus. National foreclosure filings in the U.S. continue shattering records, propelled by mounting unemployment and continued erosion of home values. Filings were reported on more than 336,000 properties in June, the fourth-straight month to see the total topping 300,000, according to RealtyTrac's latest foreclosure report released Thursday. That helped boost the second-quarter's tally by 20% from the year-earlier period, making it the highest quarterly total since the report's first-quarter 2005 launch. When counting this year's first half, one in every 84 homes was slapped with at least one filing, ranging from default notices to bank repossessions. Moody's estimates 15 million homeowners owe more on their mortgages than their houses are worth. Barclays Capital, meanwhile, estimates new foreclosures started this year at 3.0 million, with 2.6 million expected in 2010.

    The deficit is on pace to reach at least $2.2 trillion in 2009. Only $359 billion more than Obama's estimate. So, his estimate is off almost by the entire deficit for 2008. Last year, in all of fiscal 2008, the deficit was $454.8 billion. That was a record. Fiscal years start Oct. 1. In the first nine months of fiscal 2008, the government spent $285.85 billion more than it took in. In the same period this year, the figure is $1.086 trillion. "That sounds in line with estimates we saw publicly reported earlier in the year," White House spokesman Robert Gibbs said.The White House has predicted the deficit will climb to $1.841 trillion this fiscal year.


    "Then there's the argument, well, this is full of pet projects.  When was the last time that we saw a bill of this magnitude move out with no earmarks in it?  Not one.  (Applause.)"

    "Millions more Americans will lose their jobs.  Homes will be lost. Families will go without health care.  Our crippling dependence on foreign oil will continue.  That is the price of inaction."

    "I believe that legislation of this enormous magnitude, that by necessity we are moving quickly -- we're not moving quickly because we're trying to jamb something down people's throats.  We're moving quickly because we're told that if we don't move quickly, that the economy is going keep on getting worse, and we'll have another 2 or 3 or 4 million jobs loss this year."

    "Number two, it is expected that we are going to lose about a trillion dollars worth of demand this year, a trillion dollars of demand next year because of the contraction in the economy.  So the reason that this has to be big is to try to fill some of that lost demand.  And as it is, there are many who think that we should be doing even more.  (Applause.)  So we are taking prudent steps."

    "So then you get the argument, well, this is not a stimulus bill, this is a spending bill.  What do you think a stimulus is?  (Laughter and applause.) That's the whole point.  No, seriously. (Laughter.)  That's the point. (Applause.) "

    "But let's think big right now.  Let's not think small.  Let's not think narrowly."

    "This plan will save or create over three million jobs -- almost all of them in the private sector."

                                                                                  BARACK OBAMA - FEBRUARY 6, 2009


    "I love these folks who helped get us in this mess and then suddenly say, 'Well, this is Obama's economy,'" the president said, pointedly deviating from his prepared text. "That's fine. Give it to me!"

    My job is to solve problems, not to stand on the sidelines and harp and gripe," he said Tuesday, his sleeves rolled up, barely disguising his targets as congressional Republicans.

    In his weekly radio and Internet address Saturday and in a newspaper opinion piece, Obama argued that the stimulus program was designed as a two-year plan and that it had already halted the economic free fall. Indeed, the Fed now expects that the economy this year will shrink at a slower pace than it had predicted in April.

    It hasn't helped Obama, however, that the jobless rate now stands at 9.5 percent, even though his economic team initially predicted that the stimulus would prevent unemployment from going higher than 8 percent.

    Obama and his advisers say the recession turned out to be worse than anticipated when they made that forecast in January. Still, 2 million jobs have been lost since Congress passed the stimulus package.

    "We had a problem even before this recession, even during periods of economic growth, where the pace of job growth, wage growth, income growth was not moving as quickly as overall economic growth," Obama said before leaving Washington.

    The plan "was not designed to work in four months," Obama said. "It was designed to work over two years."

    The Council of Economic Advisers this week released a new report predicting "robust" job growth on the heels of Obama's $787 billion stimulus package, particularly in the health care industry. Obama’s current forecasts envision 3.2 percent growth next year, 4 percent growth in 2011, 4.6 percent growth in 2012 and 4.2 percent growth in 2013. The White House projected revenues for 2012 are forecast at $3.1 trillion. But if growth is just 2 percent, rather than around 4 percent, as some economists now expect, that income would hover around $2.4 trillion - adding another $700 billion to the projected deficit of $581 billion.

    Jul 16 11:52 AM | Link | 4 Comments

    Lenny Dykstra filed for bankruptcy last week as he has less than $50,000 in assets and $50 million of liabilities. He has 23 fraud lawsuits against him. Sounds like another candidate for Federal Reserve Chairman. If you have ever heard Lenny Dykstra speak, you realize immediately he is not a bright dude. A great ballplayer but his IQ is below 100. Jim Cramer knows a catch when he sees one. He hired this moron for his site that he shills mercilessly every night on his circus disguised as an investment show. Cramer was as accurate with Dykstra as he is picking stocks. Read his quote below. Jon Stewart nails Cramer to the wall again. When is the world going to wake up and realize what an idiot and a shill Cramer is? He should be off TV.

    "This is a guy who is applying the same skills to money as he applied to sports. It's brilliant...Not only is he sophisticated, but he's one of the great ones in this business."  

    Jim "The Shill" Cramer


    Jim Cramer Never Wants To Hear Or See The Name 'Lenny Dykstra' AgainPosted by Bess Levin, Jul 13, 2009, 4:01pm

    Last week pulled an article that dared to mention the fact that Lenny Dykstra had filed for Chapter 11 bankruptcy, and jokingly (?) suggested you "short Dykstra rookie cards." Today we're told the site has censored another story on Nails' and his financial trubs. This one was not taken down entirely, but instead edited to remove any (essentially innocuous, compared to what they could have said) references to L-Dykes. This was the original copy:

    Robert Marcin

    Insana, Nails, Meredith

    7/13/2009 2:38 PM EDT

    If I heard Ron right, he was "doubling down" on homebuilders and banks with proceeds from defensive tech, staples and health care. It's an aggressive call, but both sectors had been hit hard in the recent correction and offered decent entry points. It's the averaging down that's the problem.

    I didn't think Meredith was all that positive. Sure, there are gimmicks the banks can use to help EPS. And, the capital raises necessary to fund the deficits are huge and come with fees. But so bad it's good is not an investing theme in my opinion.

    How much money has been lost on the oil drop tax cut theme? Another gimmick trade that can work for days but doesn't have legs. And speaking of no legs, what the heck happened to Nails? Not a lot of kudos there.


    The new version, behind a subscription wall, is merely called "Insana, Meredith," and lacks the last two lines. So-- kinda shady! We get that TSC-founder Jim Cramer is attempting to distance himself from former employee and friend LD, and the bold call JC made back in March 2008 that Lenny-boy is one of the greatest investors of our time. But this is getting ridic. Also? JC could be making some money here. Who in financial journalism knows Nails better than Uncle Jim? Who has the early drafts of this column? Who's got the outtakes of this photoshoot? This is sort of thing we, and I don't think we're alone here, would actually pay to view on TSC. In fact, if we weren't cornering the market ourselves, we'd suggest that they convert the entire site to exclusive coverage of the big man.

    Jul 16 9:23 AM | Link | 1 Comment
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