Big Bubbette

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  • Stocks shrug, Treasurys and gold slide following FOMC  [View news story]
    At some point all of the plates the Fed has spinning will start to fall. We are in uncharted territory in Fed monetary policy and interest machinations. It is going to splat, just a matter of time. Tick tock.
    Oct 30, 2014. 09:24 AM | Likes Like |Link to Comment
  • Jobless Claims +3K to 287K  [View news story]
    Does anyone believe government statistics anymore? Obama and the truth are strangers in the same sentence. All statistics will be revised the day after the elections. That is all.
    Oct 30, 2014. 09:21 AM | 1 Like Like |Link to Comment
  • 60 Million Barrels of Strategic Reserve Oil Won't Solve the Problem  [View article]
    When the government releases the oil do they get paid for the price of the oil? If so, where does that money go (other than the black hole that is DC)?
    Jun 24, 2011. 06:13 PM | 1 Like Like |Link to Comment
  • 'Top Kill' 1.0 Has Failed. BP Is Now Trying Version 2.0  [View article]
    The Russians used nuclear devices to seal oil wells but that was years ago. Technology has progressed and perhaps shaped charges could be used to direct the force to try and collapse the pipe. I have read that some areas in the Gulf have been used to dump military ordinance which could make an explosive "interesting".

    Maybe load Napolitano in a torpedo tube and fire her down to "plug that hole". For once she would be some use to the Nation.

    The administrations response to this has been dismal at best. There is going to be an oil soak Albatross hanging around Obama's neck on this one. The failure to mobilize the Corp of Engineers, National Guard or have meetings with representatives of all of the major oil companies to share information and help is a huge question mark.

    I understand the last oil well leak in the Gulf, not this deep, where they tried all of these steps took nine months to shut off. This could be with us for a while and the first hurricane in the Gulf will make this very interesting.
    May 29, 2010. 08:29 PM | Likes Like |Link to Comment
  • Can We Grow Our Way Out of Debt?  [View article]
    For some reason I thought this would be an argument to legalize pot, which seems to be the only way States can find to "grow" their way out of this Depression.

    Until we can get the government under control and start massive cutting we cannot recover. It is like a 800 pound person that cannot leave their bedroom. Like that person we need to lose about 500 pounds of government. Every government job requires 2 to 5 private sector jobs to support the government job.

    Start by dismantling HUD. Cut the Department of Education and bring it back as a small section of the Interior Department. End the Department of Labor. Pass a flat tax and fire the IRS. Repeal JFK's executive order that allowed Federal government unions and grandfather them out of existence. Mandate underwriting standards for loans including the Community Re-Investment Act.

    Unless the government is put on a drastic diet it will continue to grow, and will kill the taxpayer.
    May 20, 2010. 01:02 PM | 17 Likes Like |Link to Comment
  • Why I'm in Favor of Net Neutrality Regulation  [View article]
    The government promised they would have "light weight" control? We all know the government never breaks a promise. More government control is not good. More government is not good.
    May 7, 2010. 04:53 PM | 1 Like Like |Link to Comment
  • Greece Is on the Brink of Recession  [View article]
    Austria needs to be added to this list. Then chart California, Illinois, New York, New Jersey, oh heck just find a State with a Democratic Legislature and large government unions and they are bankrupt. The financial woes of the States is not getting much coverage in the press. Seems like only yesterday LA was on the verge of bankruptcy. Wait, it was only yesterday.

    The IMF was created to deal with Third World Countries. How it is coming to pass that the IMF is bailing out Greece and other EU Countries is interesting. The US taxpayers are taking it up the colon again with another bail-out that our government is going to have to borrow to fund. Petroleum jelly would help but then there is the added cost of the carbon credit.
    May 4, 2010. 06:41 PM | 4 Likes Like |Link to Comment
  • Updating Our Outlook on Housing (Four Potential Scenarios)  [View article]
    What happens when interest rates go over 20% as they did under Carter (who was downright penurious compared to the spending spree and creation of dollars under Obama). Where does that scenario fall, other than like a plonker in the National punch bowl? Interest rates are going up, just a matter of time. Your confidence that Bernanke can control interest rates with the ravenous need for more borrowing to cover the tab Obama is racking up is imho misplaced.
    Apr 30, 2010. 12:04 PM | 3 Likes Like |Link to Comment
  • Rising Treasury Yields Point to Stronger Growth  [View article]
    " in the meantime they are doing nothing to reverse their quantitative easing."

    If you listen closely, you might be able to realize that the printing presses have stopped.

    What I'm talking about of course is a follow-up to my column from a couple of weeks ago. That column involved the Federal Reserve's "quantitative easing" program that ended as scheduled Wednesday.

    This program with the technical sounding, mysterious name was really much simpler than the name implies.

    The program essentially involved the Federal Reserve creating new money, $1.4 trillion as a solid estimate, and circulating this money into the economy by purchasing mortgage-backed securities from investment companies, including Freddie Mac and Fannie Mae.

    Mortgage rates

    This had the effect of keeping the demand for these securities high, which had the direct causal effect of keeping interest rates on consumer mortgages low over the past year and half.

    As an additional -- perhaps intended, perhaps unintended -- consequence, this program also had the effect of keeping interest rates on other types of bonds such as U.S. Treasury bonds and corporate bonds low as well.

    That's because as these investment companies sold off their mortgage-backed securities, they tended to take the proceeds from those sales and use them to buy these other types of bonds, keeping their prices high as well.

    Theoretically, however, you can't print money forever, and so, as with all parties, this one is over ... at least for now.

    The impact that the end of this program might have on the economy could be significant. The central bank has been dribbling this $1.4 trillion into the market by roughly $25 billion per week during the course of the last 16 months. Now that the program is over, there is literally going to be a $25 billion hole in the bond market that will need to be closed by other sources of capital inflows.

    What this means is that it's basically time for the credit markets to sink or swim.

    Regardless of your political leanings, let's be honest -- the Obama administration's stimulus package was ineffective at best.

    The programs that have had the biggest impact on stabilizing the economy have been the TARP, which restored investor confidence in the financial sector, and quantitative easing which was able to keep new money flowing into the credit markets and therefore keep the wheels of credit turning.

    TARP's ongoing impact has been diminished to just about zero, and now the printing presses have stopped. While I won't say that this huge amount of slack can't be absorbed by the financial markets, I want to be ready if it can't.

    First, if you're buying a home or refinancing a mortgage, lean on your mortgage banker to get you locked ... now. Mortgage rates could rise very quickly and it's not too late to get a nice rate around 5 percent.

    Second, if you ran to bonds over the past year you've had a pretty good run.

    It's time to take some profits, especially from those high yield bonds (which have done great) off the table.

    We're looking at short term senior loans.

    These investments are cousins to bonds, but they have interest rates that will reset every 90 days if rates begin to rise.

    Also consider investing in companies with strong dividends and solid balance sheets, and don't be afraid to look overseas, especially for opportunities in Australia, Brazil and Canada.
    Apr 5, 2010. 05:02 PM | 2 Likes Like |Link to Comment
  • Wednesday's Worry: Worldwide Cash Crunch  [View article]
    Where is Andrew Jackson when we need him? We need fundamental change in government to represent the taxpayer, as opposed to a government that views taxpayers as a commodity to harvest.
    Apr 2, 2010. 12:13 PM | 1 Like Like |Link to Comment
  • March Employment Numbers Better Thanks to Government Hiring  [View article]
    "Sometime, Rock, when the Country is up against it, when things are going wrong and the breaks are beating the boys- tell them to go in there with all they've got and win just one for Obama. I don't know where I'll be then, Rock. But I'll know about it, and I'll be surprised."
    Apr 2, 2010. 12:05 PM | 1 Like Like |Link to Comment
  • Where's the Recovery in U.S. Consumer Spending?  [View article]
    It is called the "Stealth Stimulus" as banks and the government are allowing people to stay in homes without making mortgage payments for years. I am involved in a collection company. We are finding first mortgage holders (banks) that have not foreclosed on liens that were recorded as early as 2007. One can speculate as to the reasons, including the fact that banks do not want to foreclose and have to state the real value of paper they are holding, the cost of foreclosure versus the value of the property, etc. The fact remains that there are an enormous number of properties in this category with owners living rent free, ultimately at taxpayer expense.
    Mar 29, 2010. 02:53 PM | 6 Likes Like |Link to Comment
  • Don't Bet on a Recovery  [View article]
    There is a theory that the government, Fannie, Freddie and Ginnie are not foreclosing on properties to allow the residents to stay for "free" to provide a source of funds to foster the illusion of consumer spending. It was called the stealth stimulus package. With the change to mark to myth, sorry I mean mark to market accounting, banks and the government can carry these dead loans without having to show the real value of the assets on their books.
    Mar 3, 2010. 01:45 PM | 5 Likes Like |Link to Comment
  • The Week Ahead: Are the PIIGS, EU Already Beyond Help?  [View article]
    Get ready for the VAT. In California the State has raided the local funds to give the illusion of a balanced budget. The purported 21 billion shortfall will balloon to 40 to 60 billion depending on how much shortfall there is in government union pension shortfalls guaranteed by the taxpayer.

    Due to green initiatives and a tax program that must be intended to drive business out of California the tax base is going to create another hole in the California budget.

    Many States are going to face the voracious beast of government union pension shortfalls:

    The best step would be to ban Federal government unions and start working down from there.

    The other issue that continues to be ignored are illegals. Until our government both Democrat and Republican start to enforce our immigration laws and empty the Nation of illegals taxpayers are going to continue to bear the cost of this. Enforce E-Verify, finish the real border fence. The cost to taxpayers in California is estimated to be 12 to 20 Billion a year.

    A very important bill is HR 1868 to end the so called Anchor Baby law that would require one parent at the time of birth of the child to be a US citizen at the time of birth to transfer citizenship. This alone would save taxpayers a tremendous amount, but it does not play to politicians. Take a look at HR 1868 and see the few that are supporting it.
    Mar 1, 2010. 01:38 PM | 3 Likes Like |Link to Comment
  • Secret Deals Involving No One; AIG Cover-Up Conspiracy Unravels  [View article]
    Where are we with HR 1207 and S604 to audit the Federal Reserve? That will tell us much about this and what role the Fed should or should not be in the future.
    Jan 31, 2010. 01:13 PM | 4 Likes Like |Link to Comment