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When the people fear the government, there is tyranny; When the government fears the people, there is liberty.  ~ Thomas Jefferson

 

Entries Tagged as 'Money Matters'

Obama won’t sign bill that would affect foreclosure proceedings

October 7th, 2010 · Banking Industry, Democrats, Economy, Housing Industry, Obama's Scheme, Selling Out the US

By Jia Lynn Yang Washington Post Staff Writer
Thursday, October 7, 2010; 2:34 PM

Amid growing furor over the legitimacy of foreclosure proceedings, White House officials said Thursday that President Obama will not sign a two-page bill passed by lawmakers without public debate after critics said the legislation could loosen standards for foreclosure documents.

The bill, named the Interstate Recognition of Notarizations Act, would require courts to accept document notarizations made out of state. Its sponsors intended the effort to promote interstate commerce. But homeowner advocates warn the new law could allow lenders to cut even more corners as they seek to evict homeowners.

White House press secretary Robert Gibbs said the president did not believe Congress meant to undermine consumer protections regarding foreclosure challenges. Still, Obama will use a “pocket veto,” which will effectively kill the legislation.

Democratic leaders on the Hill were scrambling to figure out how the bill managed to sail through both chambers of Congress without any objection. The episode may prove embarrassing for Democrats who in recent weeks have been calling for federal investigations into flawed paperwork, forged documents and other kinds of misconduct in foreclosure proceedings initiated by big lenders.

The House passed the bill in April by a voice vote, meaning there’s no record of who voted for or against the legislation. The Senate passed the bill on Sept. 27, just before recess, without any debate.

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U.S. companies buy back stock in droves as they hold record levels of cash

October 7th, 2010 · Money Matters

By Jia Lynn Yang Washington Post Staff Writer
Thursday, October 7, 2010; 12:04 AM

For months, companies have been sitting on the sidelines with record piles of cash, too nervous to spend. Now they’re starting to deploy some of that money – not to hire workers or build factories, but to prop up their share prices.

Sitting on these unprecedented levels of cash, U.S. companies are buying back their own stock in droves. So far this year, firms have announced they will purchase $273 billion of their own shares, more than five times as much compared with this time last year, according to Birinyi Associates, a stock market research firm. But the rise in buybacks signals that many companies are still hesitant to spend their cash on the job-generating activities that could produce economic growth.

Some companies are buying back shares partly because they don’t want to invest in developing new products or services while consumer demand remains weak, analysts said.

“They don’t know what they want to do with all the cash they’re sitting on,” said Zachary Karabell, president of RiverTwice Research.

Historically low interest rates are also prompting some companies to borrow to repurchase shares.

Microsoft, for instance, borrowed $4.75 billion last month by issuing new bonds at rock-bottom interest rates and announced it would use some of that money to buy back shares. The company already has nearly $37 billion in cash, but much of that money is being held by its operations overseas. The tech company is reluctant to repatriate the money, because it would get hit with a huge corporate tax bill.

A share buyback is a quick way to make a stock more attractive to Wall Street. It improves a closely watched metric known as earnings per share, which divides a company’s profit by the total number of shares on the market.

Such a move can produce a sudden burst of interest in a stock, improving its price.

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In foreclosure controversy, problems run deeper than flawed paperwork

October 7th, 2010 · Banking Industry, Deception, Democrats, Economy, Housing Industry, Obama's Scheme, Selling Out the US, Tax Dollars, Unemployment

By Brady Dennis and Ariana Eunjung Cha Washington Post Staff Writers
Thursday, October 7, 2010; 12:01 AM

Millions of U.S. mortgages have been shuttled around the global financial system – sold and resold by firms – without the documents that traditionally prove who legally owns the loans.

Now, as many of these loans have fallen into default and banks have sought to seize homes, judges around the country have increasingly ruled that lenders had no right to foreclose, because they lacked clear title.

These fundamental concerns over ownership extend beyond those that surfaced over the past two weeks amid reports of fraudulent loan documents and corporate “robo-signers.”

The court decisions, should they continue to spread, could call into doubt the ownership of mortgages throughout the country, raising urgent challenges for both the real estate market and the wider financial system.

For struggling homeowners trying to avoid foreclosure, it could mean an opportunity to challenge the banks they argue have been unhelpful at best and deceptive at worst. But it also threatens to leave them in prolonged limbo, stuck in homes they still can’t afford and waiting for the foreclosure process to begin anew.

For big banks, “there’s a possible nightmare scenario here that no foreclosure is valid,” said Nancy Bush, a banking analyst from NAB Research. If millions of foreclosures past and present were invalidated because of the way the hurried securitization process muddied the chain of ownership, banks could face lawsuits from homeowners and from investors who bought stakes in the mortgage securities – an expensive and potentially crippling proposition.

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New coalition wants companies to pledge not to use corporate dollars on political campaigns

October 4th, 2010 · Accountability, Politics, Small Business

By Dan Eggen – Monday, October 4, 2010; 1:20 AM

Several prominent Democratic politicians plan to announce a new coalition Monday aimed at pressuring major companies to foreswear using corporate money on political campaigns.

The Coalition for Accountability in Political Spending, spearheaded by New York City Public Advocate Bill de Blasio (D), aims to secure promises from major corporations to fully disclose any political spending and, ideally, to avoid spending corporate money directly on elections.

The effort marks the latest response to the Supreme Court’s landmark ruling early this year in Citizens United v. Federal Election Commission, which allows corporations, unions and nonprofit groups to spend unlimited amounts of money on elections. The ruling has helped fuel a record year for spending by outside interest groups, mostly in favor of Republicans, records show.

The new coalition springs out of a successful effort by de Blasio, who serves as a trustee for New York City’s largest pension fund, to convince Goldman Sachs, J.P. Morgan Chase and Morgan Stanley to adopt policies against spending money from their general treasuries in elections. The firms will still run their own political-action committees, which are operated independently, officials said.

De Blasio said in an interview that the national effort was necessary because of the failure of Congress to agree to new disclosure requirements for corporations.

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The Trade and Tax Doomsday Clocks: The worst is yet to come. The clock is ticking.

October 4th, 2010 · Deception, Democrats, Economy, Federal Spending, Money Lost, Money Matters, Non-Transparency, Obama's Scheme, Selling Out the US, Tax Dollars, Taxes, Unemployment

Click to enlarge

By Donald L. Luskin

The nearby chart is an update of one I showed on this page in early July. It depicts how the stock market over the last year and a half has followed a path eerily similar to that of 1937. This week corresponds on the chart to mid-August 1937, when the cumulative effects of massive hikes in personal and corporate tax rates, severe monetary tightening, and aggressive business-bashing by the Roosevelt administration tipped the economy into the “depression inside the Depression.” From there, stocks were in for the longest and second-deepest bear market in history.

Thankfully, we’re not repeating all the mistakes of 1937. But Congress and the Obama administration are flirting dangerously with one of them by failing to extend the expiring low tax rates for all Americans. What’s worse, we’re close to repeating the mother of all policy errors, the one made not in 1937 but in 1930—the one that started the Great Depression. We’re on track to resurrect the 1930 Smoot-Hawley Tariff Act.

Let’s start with taxes. If today’s low rates expire at year-end per current law, that would at a stroke reduce after-tax income for every working American, the average reduction being 3.3% according to the Tax Policy Center. Do the math: 94% of income goes to consumption, and consumption is 70% of gross domestic product. All else being equal, if the Bush tax cuts don’t get extended, that’s a 2.3% hit to 2011 GDP. That means instant double-dip recession, starting at midnight, Dec. 31.

Editorial Page Editor Paul Gigot analyzes a disturbing trend. Also, columnist Kimberley A. Strassel reviews the political prospects for the “moderate” Democrats that voted with Pelosi.

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A Republican stimulus that just might work

September 12th, 2010 · Accountability, Change of Power, Obama Exposed, Small Business

By Ezra Klein – Sunday, September 12, 2010

It’s been a long week of stimulus proposals here in Washington. Our anti-business White House proposed hundreds of billions in tax cuts for businesses, reiterated its support for $30 billion to support lending to small businesses, and proposed $50 billion in new infrastructure investment — money that would go, ultimately, to pay private businesses to build things. Marx would be so proud.

But the more interesting action was on the Republican side of the aisle. On Thursday, House Minority Leader John A. Boehner released a “two-point plan for immediate, bipartisan action on jobs and spending.” Boehner’s proposal? Extend the Bush tax cuts and pass a budget holding spending at 2008 levels. That’s a bit back to the future — or at least back to the Aughts. The worst economic crisis since the 1930s, and all we need to do is extend some tax cuts from 2001 and 2003 and hold down spending a bit? This doesn’t require any new thinking at all?

The most stinging counterpoint didn’t come from Nancy Pelosi, though. It came, quite inadvertently, from Indiana Gov. Mitch Daniels, a wonkish Republican who led George W. Bush’s Office of Management and Budget from 2001 to 2003, and who, that same Thursday morning, published a plan that put to shame the proposals from both the administration and the House Republicans.

“A stagnant, impoverished America will not be a greener or safer or fairer place,” Daniels warned. “Grown-ups make trade-offs. Pass the brandy, then let’s get busy.” And get busy he did: Daniels proposed a one-year suspension in the Social Security payroll tax for workers. In an interview, he estimated that this would raise about $350 billion. He also envisioned a tax break allowing businesses to fully expense their capital investments for the next year. As it happened, the administration proposed exactly that this week, though Daniels noted that there was no word of it two weeks ago, when he first drafted his op-ed. “If they’re there,” he told me, “that’s good.”

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Health insurance tax credit likely to affect small part of small-business workforce

September 2nd, 2010 · Democrats, Economy, Federal Spending, Healthcare, Money Lost, Non-Transparency, Obama Exposed, Obama's Scheme, Selling Out the US, Small Business, Tax Dollars, Taxes

By N.C. Aizenman Washington Post Staff Writer
Thursday, September 2, 2010; 12:09 AM

About 16.6 million workers are employed by small businesses that are eligible for health insurance tax credits under the new health-care law, according to estimates that were to be released by a nonpartisan research foundation Thursday.

However, the report by the Commonwealth Fund estimated that only 3.4 million of those workers are at firms that would take advantage of the tax credit. For the most part, those are firms that already offer their employees health insurance.

Those firms that do not offer coverage are unlikely to consider the tax breaks enough of a financial incentive to start doing so, according to the report’s authors.

Still, the authors stressed the potential stimulus benefits of the tax credits, which apply beginning this taxable year and will increase in value in 2014 from as much as 35 percent of an employer’s premium contribution to as much as 50 percent. (The lower the wages and number of workers at a small business, the greater the size of the tax credit it is eligible for.)

The Congressional Budget Office has estimated that by 2016, the last year for which the tax credits will be available, they will have reduced health insurance premiums for small business by 8 to 11 percent.

At that point, small businesses and their employees will be able to buy comprehensive insurance on state-based exchanges, which will be established in 2014 and are expected to offer more affordable rates than available in the current market.

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Honey, I Shrunk My Approval Ratings

August 26th, 2010 · Auto Industry, Banking Industry, Deception, Democrats, Economy, Federal Spending, Government Control, Greed, Non-Transparency, Obama Exposed, Obama's Scheme, Reform, Tax Dollars, Taxes, Unemployment

The White House is having a disastrous ‘summer of recovery.’

By Karl Rove

In what will rank as one of the all-time presidential PR disasters, we’re now well over half way through what the White House called “the summer of recovery.” And what a recovery it’s been.

Earlier this month, first-time claims for unemployment hit a nine-month high. The unemployment rate remains at 9.5% and 18.4% of workers are out of a job, can only get part-time work, or have given up looking for a job altogether. Sales of existing homes dropped 27% from June to July, hitting the lowest point since data were first collected in 1999. The Conference Board’s Consumer Confidence Index fell to 50.4 in July, continuing a slide that started in February. And the stock market is down 11% from its peak in April.

All of this has helped shatter public confidence in the president. In early May, Mr. Obama’s approval on the economy in the YouGov/Polimetrix poll was 42%. By mid-August, it was 35%—a frightening number for Democrats less than 70 days from a midterm election. According to this week’s Reuters poll, 72% are “very” worried about jobs and 67% “very concerned” about government spending.

Mr. Obama’s credibility is crumbling, and for good reason: He and his people are saying things people don’t believe. At the start of his summer of recovery road show, the president flatly asserted that last year’s massive stimulus package had “worked.” Vice President Joe Biden, not to be outdone, promised monthly job gains of up to 500,000 and insisted that the recovery’s pace “continues to increase, not decrease” as stimulus spending was “moving into its highest gear.”

It’s slightly surreal. “Who are you going to believe,” as Groucho Marx once said, “me or your own eyes?”

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Recovery in danger as firms, homebuyers cut back

August 25th, 2010 · Dissention, Economy, Housing Industry, Money Lost, Non-Transparency, Obama's Scheme, Real Estate, Selling Out the US, Unemployment

By DANIEL WAGNER and ALAN ZIBEL – The Associated Press
Wednesday, August 25, 2010; 12:09 PM

WASHINGTON — The economic recovery appears to be stalling as companies cut back last month on their investments in equipment and machines and Americans bought new homes at the weakest pace in decades.

Overall orders for big-ticket manufactured goods increased 0.3 percent in July, the Commerce Department said Wednesday. But that was only because of a 76 percent jump in demand for commercial aircraft.

Taking out the volatile transportation category, orders for durable goods fell at the steepest rate since January. And business orders for capital goods took their sharpest drop since January 2009, when the economy was stuck in the deepest recession in decades.

Separately, Commerce said new home sales fell 12.4 percent in July from a month earlier to a seasonally adjusted annual sales pace of 276,600. That was the slowest pace on records dating back to 1963. Collectively, the past three months have been the worst on record for new home sales.

The weak sales mean fewer jobs in the construction industry, which normally powers economic recoveries. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

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With their Jobs on the line, Dems want to fix the economy. Too little too late.

August 25th, 2010 · Accountability, Auto Industry, Banking Industry, Change of Power, Deception, Democrats, Economy, Ethics, Federal Spending, Government Control, Greed, Money Lost, Non-Transparency, Obama's Scheme, Reform, Selling Out the US, Tax Dollars, Taxes, Terrorism from Within, Treason, Treasury, Unemployment

As midterms loom, Democrats work to shore up faltering recovery

By Lori Montgomery – Wednesday, August 25, 2010

A rapidly weakening economy threatens to undermine President Obama’s assertion that he has set the nation on a path to prosperity and, with barely two months until congressional midterm elections, Democrats find themselves with few options for reviving the faltering recovery.

The latest sign that the economy is losing steam: Home sales fell 27 percent in July, the steepest one-month drop since figures were first compiled in 1968, according to a report released Tuesday. Analysts had expected sales to decline following the expiration of a federal tax credit for homebuyers this spring, but the drop was nearly twice as large as forecast.

The housing report punctuated a wave of bad news that has been building all summer. The number of jobless claims has risen in each of the past four weeks and last week hit its highest point in nine months. Private-sector job creation is trending well below the level needed to keep up with population growth. Retail sales have also been disappointing.

Economists generally do not expect a dip back into recession, although many say the risk has grown with each new piece of disheartening data.

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