Category Archives: Stimulus

Fed Up

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The Fed has kept the stock market and, so it claims, the U.S. economy afloat with low interest rates. The Dow lost 1500 points in the past week. World economic growth is stuck in the mud.

And with interest rates near zero, the Fed is low on flotation devices.

If income inequality is your thing, cheer up. Jeff Bezos lost $2.6 billion on Monday. Bloomberg has the fat cat score card here.

Government Train Wreck

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A reporter blamed the tragic Amtrak train wreck in Philadelphia on not enough government spending on infrastructure. House Speaker John Boehner said the train wrecked because it was going 106 mph in a 50 mph zone. This may be just the sort of thinking President Obama wants Boehner to change.

No Acceptable Business Case

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 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.

 

 

Backdoor Wall Street Bailout

131114-fed-yellen-easy-money-backdoor-bailout-wall-streetOur magic president has appointed a new Fed chief to make more magic money.

Janet Yellen’s Senate hearing for approval to succeed Ben Bernanke began yesterday.

Backdoor Wall Street Bailout

Andrew Huszar, a former bond buyer for the Fed, wrote an interesting apology in the WSJ this week for his role in “quantitative easing”.

He says that the Fed never bought a mortgage bond in its 100 year history until he was hired in 2009 to buy $1.25 trillion of the things! In a single year. According to Huszar Bernanke spun the scheme as a plan to help Main Street but it was really “the biggest backdoor Wall Street bailout of all time”.

Chairman Ben Bernanke made clear that the Fed’s central motivation was to “affect credit conditions for households and businesses”: to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn.

QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.

Eat the Rich

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The tax hike on the rich to avoid the fiscal cliff will bring in 60 billion dollars. This year’s deficit is a trillion dollars. The president doesn’t want to cut spending. Stay tuned.