Author Archive for

The Shakedown

I don’t know what else to call it.  Last week’s “settlement” with the five biggest banks in the country, where the Obama Administration squeezed $25 billion to settle “claims” of “inappropriate” lending practices that resulted in 2008’s Financial Crisis, was nothing more than a shakedown.  The settlement suggests that there were no other parties involved in the creation of our most recent recession (assuming we are in economic recovery).  It did not go after the other responsible parties, namely, the people who took out mortgages they couldn’t afford, the people who packaged these loans into securities and sold them for huge fees, the people who bought the securities and ended up holding the bag, and the government that forced the banks to make substandard loans …


Warren Buffett’s Taxes

For some strange reason, probably because this is an election year, I decided to watch President Obama’s State of the Union address tonight.  I usually avoid watching because I don’t need to elevate my blood pressure beyond what’s safe, given my advancing age.  But I also don’t watch because I find the President boring.  His version of the State of America is not the same as mine.  And since he uses rhetoric instead of facts to support his arguments, and delivers them in a manner that is both condescending and arrogant, I generally choose to avoid his incendiary speeches.

But this is an election year, and much is being made about how the uber-wealthy are being taxed, whether it’s Warren Buffett, or Mr. Buffett’s secretary, …


Connecting the Dots

Yesterday the Labor Department released the employment statistics for October.  I prefer to refer to is as “employment” rather than “unemployment”.  While it may seem to be nothing more than semantics, it is more positive.

The good news is that the economy created jobs–104,000.  The bad news is that the economy needs to create 120,000 new jobs a month to break even.  But there are now 104,000 new taxpayers, and for that fact alone the rest of us are thankful.  Buried in the article in the Wall Street Journal was this sobering statistic:  there are 13.9 million people looking for work.

President Obama had this to say:  “I’m worried about putting people back to work right now, because those folks are hurting and the U.S. …


Chickens and the Roost

Yes, the chickens are coming home to roost.  All of a sudden, the man who had all the answers three years ago has none.  He was calm, cool and collected.  He convinced the American citizenry that he could solve all of the country’s problems, and that it was critical that we abandon the “failed policies of the last eight years”.

We are 17 months away from the next presidential election and the economy is definitely slowing.  Aggregate demand for goods and services is weakening.  And unless President Obama changes course on legislation enacted in the last two years, we are likely to enter yet another recession.  He won’t, though, and it will prove to be his undoing.

Conservative pundits and Republican presidential candidates are licking …


Obama’s Economy

Every once in a while, and in the case of several of the Wall Street Journal’s editoral staff, there is clarity.  Today’s column by Daniel Henniger provides such clarity.

Here’s the link:  http://online.wsj.com/article/SB10001424052702303745304576359570364488858.html

Rock on!…


Supply and Da Man

First of all, a wonderful Memorial Day to you all.  I pray that your travels, picnics, barbeques and parties would be safe and fun.  And let’s remember our fallen heroes, who without them and their ultimate sacrifice, we wouldn’t have the freedom to enjoy what we do.

The economic calendar of last week revealed what appears to be a slowing economy.  First, the analysis.

  • Durable goods orders, a highly volatile statistic, were down significantly, reflecting slower orders for cars, airplanes, refrigerators and washing machines.
  • The second estimate of  Q1 GDP growth was anemic at 1.8%.  3% would be healthy and would suggest an economy growing fast enough to grow our employment base.
  • Having said that, initial jobless claims rose to 424,000, which again suggest a

Supply and Da Man

U.S. markets closed off today, while foreign markets ended generally positive.  A bright spot in the US economy was the release of new home sales, which were estimated to be up 7.3% in April, to 323,000 new homes sold.  This represents the fourth month in a row of increasing new home sales, but we’re coming off a dismal low. In 2005, 1.4 million new homes were sold.

The housing market reflects a classic supply/demand equation.  The supply of housing far outstrips demand, and with a glut of foreclosed homes still in the market, the housing market is unlikely to return to 2005 levels for several years.

The markets seemed to be more concerned with the nation of Greece’s ability to service it’s debt.  Keep in …


Wisconsin: Not Just Cheeseheads After All

Who would have thought that the state with the first Socialist governor and subsequent Socialist Party candidate for President, Robert LaFollette, would be the first state to actively attempt to bring the public employee unions under control?  What’s next?  Vermont goes Conservative?

So much of life can be equated to the supply and demand theory of economics.  That is, there’s unlimited demand for things, but always a limited supply and when demand outstrips supply, there’s friction.  This concept can be applied to the present fiscal situation that Wisconsin, and all states for that matter, face.  They are out of money.  Tax revenues, that is, supply, have outstripped the demand for services.  The public unions, in fact all unions, have been feeding at the trough of …


A New Year, A New Congress

Out with the old, in with the new, goes the standard cliche every year about this time.  No, this is not a reference to Nancy Pelosi’s age, although incoming House Speaker John Boehner is 9 years younger.  Speaker Boehner does represent a new attitude and the resulting optimism is being reflected in the markets and the broader economy.

Consider:

  • Retail sales, Christmas sales, were up significantly over 2009
  • Consumer and business confidence for November and December have inched higher
  • Jobless numbers are moving downward, evidenced by today’s ADP employment report that suggested 297,000 new private sector jobs were created in December (this is a big number!)

This is not a coincidence.  This is, however a direct result of increased optimism in the country due to …


The Big Spanking

Our grandchildren were over last weekend–two boys ages 5 and 3.  At one point the 3-year-old was telling me about being disobedient and how Daddy had to give him a big spanking.  Now I know my son and I’m sure that he was providing gentle discipline, but the point wasn’t lost and can be applied to last week’s election.

Much has been made of the Republican’s gains in the House and Senate, and their effective control of Congress.  This was clearly a repudiation of the Obama, Reid, and Pelosi policies of economic stagnation.  Make no mistake about it, this was about the economy.  The Democrats insistence on spending taxpayer’s money ineffectively, squandering it, actually, passing huge and unpopular bills, and their complete lack of caring …


    Log in