Category Archives: bailout

Greek Credit Swagger

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Greece is in default. On Tuesday the government missed a payment deadline on its IMF debt. On Sunday Greeks will vote in a referendum to accept terms from the IMF for more loans. The terms include tax increases and pension cuts.

Prime Minister Alexis Tsipras says he’ll step down if the referendum passes. Holman Jenkins in the WSJ says Greece has put a gun to its head saying, “Pay us ransom or the idiot gets it.”

The Greek economy is only 1.8 percent of the Eurozone. At 18 trillion in the hole, nobody has a credit swagger like Uncle Sam.

 

GM Bailout Airbag

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It looks like GM might avoid liability for some lawsuits over it’s ignition switches. The bankruptcy judge ruled the company can’t be sued for anything that happened before the government bailout.

Ben Bernanke’s Money

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What good is quantitative easing if Ben Bernanke can’t get a loan? The former Fed chairman confided last week that he was unable to refinance his $850,000 home mortgage. It’s true he’s out of a job but ex-government swells are never out of the money. Bernanke is still making the stuff from thin air (or hot air) by cranking out speeches at more than $200,000 a pop.

Helicopter Ben Bernanke

IBD notes that even Barney Frank now lays some blame on the government for the 2008 banking crisis. It forced banks to lend to risky home buyers and now Dodd Frank is overcorrecting by putting the clamps on the banking industry. Banks have been forced to close branches to pay penalties. They’re sitting on piles of free money but they’re reluctant to lend, even to Helicopter Ben.

In that same speech he also discussed how the government can always avoid deflation by printing more dollars and referred to a statement made by Milton Friedman, a Nobel Prize winning economist, about using a helicopter drop of money to fight deflation. Since then, Bernanke has had the nickname of “Helicopter Ben.”

 

 

No Acceptable Business Case

140404 GM Acceptable Buisness Case

 The Chevy Cobalt is being recalled because the ignition shuts off while the vehicle is running! None of the solutions to fix it represented an “acceptable business case“, according to General Motors. Thirteen people have died so far. GM warns this can be caused by too heavy a key ring.

So, as your life passes before your eyes while barreling downhill at 80mph without power, or airbags, please keep in mind… your key ring is too damn heavy.

Acceptable Business Case

On the other hand you could have kept your key ring and GM could have fixed the problem with a 57 cent part.

At least they’re not blowing your bail out money.

 

 

Bipartisan Farm Bill

140130-bipartisan-farm-bill-cartoonCongress got something done last week. It passed a bipartisan, 10 year, trillion dollar farm bill.

The farm bill includes insurance against “adverse price movements”. Isn’t that what the credit default swaps were supposed to do for subprime loans before the great recession?

Bipartisanship on Farm Bill

It’s all too much for the editors of  National Review who note that:

Many crop prices are near all-time highs, and if they drop as expected, new loss-protection programs could — likely will — cost billions more than the CBO calculates.

In an even rarer case of bipartisanship the Washington Post editorial board agrees:

Supposedly necessary to secure the nation’s food supply at a time of record farm income and epidemic obesity, this federal largess flows almost regardless of how much money its recipients already have.

The Post then calls on President Obama to use his pen to veto the bill.

More Bipartisan Farm Bill Update:

Bloomberg reports the Senate threw out a requirement that members of Congress would have to publicly report if they receive federally subsidized crop insurance.