JCCIII

Wall Street Breakfast: Must-Know News

Quote from above: "As expected, President Obama vowed to help jump-start job creation by using some of the $200B in leftover TARP funds. Spending for the proposals could reach $150B ... Some of the money will also likely go toward easing the budget deficit. ... He also promised to accelerate the pace of spending from the $787B stimulus scheme passed in January, with just one-third of the total having been spent so far. Meanwhile, sources say Treasury Secretary Geithner will tell Congress, perhaps as soon as today, that he's extending TARP until next October; Geithner has the power to extend TARP by notifying Congress."

Quote from the summarized FT article: "Republicans condemned what they described as a misuse of funds from the troubled asset relief programme , the early repayment of which has given Mr Obama space for new stimulus measures without adding to the deficit. 'This violates both current law and the pledge we made that every dollar we got back would be returned to the taxpayer to reduce the national debt,' said Mitch McConnell, the Republican Senate leader."

Violating the law and pledges previously made are not things that seem to bother the current rulers in Washington, DC. Pumping other people's money, or just printed up money, timed to maximize its desired effect on the Nov 2010 elections are what's important.

Wall Street Breakfast: Must-Know News

Robert B Ferguson, you covered a lot very well. Now that the Obama administration has trampled on contract and bankruptcy laws (and introduced a new risk that must now be quantified), I would add, it will be interesting to see what interest rate potential new "secured" bond investors will demand of the new government and UAW owned GM/Chrysler/Ford.

Wall Street Breakfast: Must-Know News

The Senate Health Care bill puts "... an end to industry practices such as refusing insurance to people with pre-existing medical conditions. The bill will also give subsidies to help the underprivileged pay for mandatory health insurance." Does the bill also cap premiums? If not, I wonder what the premium for an individual with a known expensive pre-existing condition will be. And, if this person is "underprivileged," is there a cap on how much the tax payers can be forced to subsidize? If the bill does cap premiums, wonder how many insurance companies will be put out of business (or maybe that's the real point of the bill)?

Wall Street Breakfast: Must-Know News

"In a speech Tuesday, President Obama is expected to talk about using leftover TARP funds for job creation, although he may hit resistance from Republicans who want to use such funds for deficit reduction."

Obama may also hit resistance when he goes back and reads the TARP legislation, which does not allow for using TARP funds in the manner he desires. Of course, the rule of law did not slow him down during the Chrysler and GM bankruptcy proceeding, did it?

Wall Street Breakfast: Must-Know News

Government Motors getting out of debt:

"A potential catch: the carmaker plans to use other money from the government to repay the borrowing."

This is exactly how the US government pays off bonds; sell new bonds to pay off the old. I am sure Mr Ponzi is rolling over in his grave and Mr Madoff is wondering "Why am I in jail?"

Wall Street Breakfast: Must-Know News

Here's a news flash. Obama wins the Nobel Peace Prize. No surprise, of course; Obama will win the top award from every liberal/socialist group on the planet over the next few years.

Wall Street Breakfast: Must-Know News

Our politicians want to disregard contract law, the foundation of a capitalist system, in order to get back a few million dollars from AIG people while at the same time spending billions of dollars in earmarks and pork in the recently passed and signed into law funding bill. What hypocrisy! Was this what the founders had in mind when they guaranteed the right to bear arms? I predict the tea party movement will gain momentum.

Wall Street Breakfast: Must-Know News

"GMAC Financial Services and the Treasury are reportedly in advanced talks to prop up the auto-lender with its third helping of taxpayer money, making it the first of the stress-tested banks to need additional government capital. ....... The government's willingness to deepen taxpayer exposure to GMAC reflects the troubled lender's importance to the revival of the auto industry."

Call me a skeptic, but the gov't's willingness to throw good money (to GMAC) after bad reflects the importance of the unions to the democrats and the brazenly unethical qualities of the Obama administration.

Wall Street Breakfast: Must-Know News

Climate change has been a cycling hysteria since at least the late-1800's; alternating between cooling (late-1800's, 1970's) and warming (1930's, early 2000's). The progressives will never be satisfied until they control everything, and they are well on their way with the current administration.

Wall Street Breakfast: Must-Know News

I totally agree with bobbobwhite on Geithner. Paraphrasing Jay Leno, Geithner is either a tax cheater or he is incompetent in handling his own taxes. There has to be a better person for the job.

Wall Street Breakfast: Must-Know News

UAW reveals itself as the self-interested entity everyone already knows they are. They couldn't care less about the harm they are doing to America's competitiveness.

Wall Street Breakfast: Must-Know News

It took Detroit and the UAW 40 years to do it, but they have finally convinced me that they cannot build a competitive world-class car. Congratulations.

Wall Street Breakfast: Must-Know News

Not trying to be cynical, but disagree with the statement about the GM restructuring, "The restructuring will cost taxpayers billions of dollars more than expected." I am never surprised when the government underestimates the cost of a program; quite the contrary, actually.

Wall Street Breakfast: Must-Know News

Excellent Wall Street Breakfast this morning, Suzanne. A couple of comments:

"House Speaker Nancy Pelosi suggested recycling leftover funds from the $700B TARP fund to create jobs and boost some salaries." Why boost salaries, as we now live in a world of no inflation and 0% increases for Social Security?

"Interim GM Chairman Ed Whitacre will announce new responsibilities for Vice Chairman Bob Lutz as part of an overhaul of the management team this morning, sources say. Whitacre is building a team to run the company until a replacement is hired, in a push to make GM more nimble and to hold employees accountable." Wonder if any of the employees who will be held accountable are UAW members. And, aren't employees already accountable for what they do?

Wall Street Breakfast: Must-Know News

From above: "Barron's magazine's Andrew Bary urged Ben Bernanke to hike interest rates to a "more normal" 2%, or risk fostering another financial bubble. Barron's says with the economy recovering, the dollar falling, and commodities on the rise, keeping rates near zero will only fuel speculation and anger America's economic partners and foreign creditors - and potentially stoke inflation. Bary worries the Fed is failing to distinguish between normal accommodative monetary policy and crisis accommodative policy."

Couldn't agree more with the Barron's comments. However, Bernanke is an expert on the Great Depression and one of the lessons learned from the GD (rightly or wrongly) is that money was tightened too soon (i.e., interest rates were raised to soon); I think, based on the GD lesson learned and Fed comments, that the Fed will err on the side of easy money for too long. Also, raising interest rates will be detrimental to the gov't's borrowing; a serious conflict of interest. Also, if easy money produces inflation (an almost certainty), so much the better for the gov't; a huge tax increase without having to vote on it and repayment of debt with cheaper and more readily available (if/when jobs increase) money.