Capital Commerce


February 2009


A 6.2 Percent GDP Drop? Ouch!

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The revised fourth-quarter GDP number is pretty terrible, biggest drop since 1Q 1982. And it might get a twin in the current quarter. And 2Q might not be much better. But yet Team Obama expects over 3 percent GDP growth in 2010, followed by an acceleration in 2011 and 2012 despite higher income and ...

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Why Mitt Romney Gets It

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I sat down this morning for a chat with Mitt Romney here in Washington. (He's in town to give a speech today at the Conservative Political Action Conference.)  I am going to post the interview later, but one thing struck me right away. He really understands the dynamics of our current economic ...

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Obama's $646 Billion Cap-And-Trade Green Tax

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As I see it, the most important single item in President Obama's budget is his commitment to a cap-and-trade plan (to limit and reduce carbon emissions). It represents nothing less than an absolutely breath-taking attempt at reengineering the entire American economy. The White House expects the ...

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Economic Math Vs. Obama's Speech

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President Obama's speech seemed to go over pretty well. Words are important, after all. A CNN/Opinion Research insta-poll found that 85 percent of respondents said the address made them feel more optimistic about where the country is heading. But math is important, too. And that afterglow of ...

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How to Make the Financial Crisis Worse

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The great Ed Yardeni tallies up the awful record of the feds and their attempt to rescue Wall Street:

Investors in the S&P 500 Bank Composite Index have lost 86% since the price index peaked on February 20, 2007 despite everything Washington has done to end the financial crisis. On Friday, it was ...

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Rick Santelli: The Man Who Talked Back

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Which, do you suppose, would be the bigger draw right about now: a) a Barack Obama house party supporting the housing bailout package, or b) a Rick Santelli-inspired "Chicago Tea Party" opposing the bailout package? Well, given that a) more Americans oppose the plan than support it, and b)

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Obama: Cut Defense, Raise Taxes

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I love it when politicians break out of their traditional policy boxes and do something suprising, novel. Here is how the WaPo describes President Obama's first budgt: "President Obama is putting the finishing touches on an ambitious first budget that seeks to cut the federal deficit in half over ...

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Peter Schiff: How He Would Fix America

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Apparently there is a movement to get doomsayer investor/libertarian Peter Schiff to run for the U.S.. Senate in Connecticut. And a website has gone up to draft him. Here is the Schiff agenda as the website outlines it:

1. Increase savings and production. People need to start saving and ...

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Rick Santelli Rant: America Rants Back

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CNBC's Rick Santelli seems to have struck a chord, at least with my readers. Here is one email:

Santelli is a new joe the plumber.  The challenge to obama is an american self reliance tradition that obama derides in favor of the harvard/belgian school of public policy.  The real gamble is obama ...

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Obamanomics and Wealth Destruction

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Jennifer Rubin of Commentary tries to sum up Obama's first month, particulary fears of bank nationalization:

In other words, the Obama administration, and specifically the boy genius Treasury Secretary, succeeded is wrecking havoc on the markets in a matter of weeks. It is rather remarkable that ...

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Housing Bill Not a Game Changer

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So says economist Michael Darda of MKM Partners:

Lastly, we don’t believe the $275 billion mortgage rescue package unveiled yesterday will be a game changer. It may help those holding on by their fingernails, but many of these borrowers are going to be in trouble if home prices continue to ...

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Obama's $75 Billion Housing Bailout

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So Obama's plan to save the housing market is out. This sentence from the president's speech really struck me: "Sub-prime loans – loans with high rates and complex terms that often conceal their costs – make up only 12 percent of all mortgages, but account for roughly half of all foreclosures."

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The Housing Great Depression

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Some housing perspective from IHS Global Insight on the 12 percent drop in single-family starts and the 8 percent drop in single-family permits:

Conditions in the market for new homes have not been this bad since the 1930s, and they continue to worsen. In recent months, several factors that ...

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Fellow Americans, Stop Saving!

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Yes, yes, we all need to save more and spend less. So the scolds keep telling us. But this change of behavior will have consequences, as superstrategist Ed Yardeni notes:

We are told: Americans must save more. Maybe so but that won’t be good for our economy. I’ve heard some observers ...

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Should China Send Us Stimulus Checks?

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China has been a huge growth engine for the global economy in recent years. Exports to America are a big reason for this. America is now in recession. And China is slowing dramatically. So maybe China should send Americans stimulus checks that we can spend money on their stuff. Hey, they are dollar ...

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Japan's Drunk Finance Minister and Geithner

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Joke #1: "Hey, did you hear the stock market is plunging again?" "Hey,I didn't know Treasury Secretary Geithner was giving another speech!"

Joke #2: "Did you see that rambling, incoherent  finance minister on TV?" "Hey, I didn't know Treasury Secretary Geithner was giving another speech!"

Me:

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Brzezinski: U.S. Recession Could Lead to Riots

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Zbigniew Brzezinski, former National Security Adviser to Jimmy Carter, thinks America's rich people should get together and create a fund to give money to America's non-rich people. Pay it forward -- or else. Here is what he alarmingly said today on MSNBC's Morning Joe program (thanks to

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Saving the Banking System in Four Easy Steps

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Those bank CEOs may have been, as my friend Larry Kudlow put it,  "dead men walking into a Soviet show trial," but something of use came out of it -- an idea on how to fix the banking system from Citigroup CEO Vikram Pandit. He wants bank mark-to-market losses to be realized over time rather than ...

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Great Recession or Great Depression?

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Nariman Behravesh, chief economist at IHS Global Insight:

This is the Great Recession, not the Great Depression 2.0 and not Japan in the last decade. We’re seeing a different policy response than what we saw during the Depression and Japan in the 1990s. It took Japan seven years to deal ...

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Coming Soon: Obama's Next Stimulus Plan

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Sen. Judd Gregg is hardly the only American to have big problems with the $800 billion stimulus package coming from President Obama and the Obamacrats on Capitol Hill. Even after a major P.R. push by the White House, including the warnings of economic catastrophe if the package didn't pass, still ...

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Why You Should Buy Stocks

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I wish I was as optimistic as the guys at Strategas Research:

At the moment, it appears unlikely that we will repeat the mistakes of the 1930s in the U.S. when a combination of a one-third decline in the money supply, protective tariffs, and increases in marginal tax rates compounded our ...

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Where All the TARP Money Went

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Ed Yardeni tell us:

Yesterday’s interrogation of the eight bank CEOs by the 71 inmates of the House Financial Services Committee was surreal. The politicians all demanded to know what happened to the $350bn of the first installment of TARP. Few seem to understand that it was given to the ...

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Summing Up Geithner

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The great Andy Busch of BMO Capital Markets sums it up as well as anyone: "The market dropped faster than Chris Brown's sponsors as we were clearly anticipating a detailed, comprehensive program.  Why did we expect this, because Obama and Geithner told us they would deliver. Markets are all about ...

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Obama! Geithner! Banks! Bailout! Confusion!

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Did Tim Geithner freak out when he heard his president say the following during the Monday press conference: "And so tomorrow my Treasury Secretary, Tim Geithner, will be announcing some very clear and specific plans for how we are going to start loosening up credit once again.”

Maybe so since ...

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Geithner: From Indispensable to Indecipherable

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Treasury Secretary Timothy Geithner has gone from being the Indispensable Man to Indecipherable Man. With global financial community watching closely, Geithner laid out a confusing rescue plan for the U.S. banking system that did little to stem the ongoing dissipation of investor confidence.

The ...

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Bank Bailout: Axelrod vs. Geithner

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In today's NYT story on today's Geithner bank bailout plan, there was this interesting nugget:

In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, a senior adviser to the ...

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Obama Press Conference: Economy

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One of the interesting questions asked of President Obama was how would Americans know his economic politices were working to turn around the economy. The first thing Obama mentioned was an improvement in the labor market. Actually, that might be the last thing to turn around. Even after the ...

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American Stimulus, Japanese Stimulus

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Here is an interesting chunk from an NYT article that looks at Japan's attempt to boost its economy through infrastructure spending in the 1990s (bold is mine):

Dr. Ihori of the University of Tokyo did a survey of public works in the 1990s, concluding that the spending created almost no ...

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