Today is Thursday, May 17, 2012

Economy

Forecasts, reports, earnings.

Obama seeks to bully Chrysler’s creditors into accepting drastic changes in bankruptcy laws

When will the stock and bond markets begin to reflect the huge changes in bankrutpcy and contract laws that President Obama has demanded and is demanding from Chrysler’s bondholders?

After reading numerous comments on Chrysler’s filing for Chapter 11 bankruptcy, it’s clear that lawyers, investors and bond buyers are very worried about how the president is blaming and bullying Chrysler’s creditors for the company’s bankruptcy.

The consensus of all but the pro-union and pro-Obama types is that the president’s disrespect for 200 years of bankruptcy law precedent will make it very difficult for companies to sell bonds and borrow money in the private markets. The president is in the process of destroying the credibility of borrowers and the trust that has

Because nobody knows value of banks’ stocks, trading them is very risky

Trading banks’ stocks has been very risky because nobody knows how to value them, and the mixed first-quarter earnings reports issued by banks haven’t changed that, according to Zacks.

What makes banks stocks volatile and risky?

First, politicians are messing with the money and banking markets as never before, and

Older workers have tough times finding new jobs

The NYT found some management scholars who explain why older workers who have jobs hang on to them and those who are looking for work have to settle for lower paying jobs.

My thoughts:

 

ClimateDepot.com features skeptics of Al Gore’s global warming alarmism

Skeptics of Al Gore’s global warming alarmism and his mostly successful campaign to intimidate presidents, members of Congress and other politicians into supporting his drive to destroy the U.S. and world economies despite significant evidence that their science is bad have an important new information resource, www.ClimateDepot.com.

While I agree that there is global warming, there are enough credible scientists who don’t agree that humans’ activities do not have anything to do with it that I believe that the world wide panic over global warming is way over done.

Bookmark www.ClimateDepot.com.

Bond markets predicting another 17% drop in industrial production and 7.8 million job loss in 2009

The bond markets are predicting the U.S. economy will see another 17% drop in industrial production by yearend.

And another 7.8 million jobs are likely to be lost. We’ve already lost 5.1 million.

Those predictions come from an econometric model based on the bond market’s pricing, which has been very accurate in forecasting the economy since 1973, The Wall Street Journal reports here.

Impact graphs from wsj.com:

Geithner’s bailout scheme may make things much worse by increasing debt

Secretary of Treasury Geithner’s bailout scheme may weaken the economy by increasing government debt in an effort to take toxic assets off banks’ balance sheets.

That’s the message that Nassim Taleb, author of the famous book, The Black Swan, is sending to bankers and policy makers.

He says we all have to

House GOP: End bailouts, create jobs, lower taxes and spending, provide health care

House GOP leaders today released a summary outline of the kind of budget and universal health insurance plan they would enact if they had the power, which, of course, they don’t.

They would end bailouts for failing businesses, curb inflationary spending, lower taxes and provide universal health care that would improve care under the Medicaid program and give Americans choices of providers and treatments that the Democrat’s planned HMO would not.

Their 18-page document, which is not a full-blown budget, is being put down by the White House.

President Obama, like Woodrow Wilson, our first totalitarian president, brooks no criticism nor accepts any alternative ideas. And left wing bloggers and commenters on those blogs are having a field day parroting the White House line.

But the document is worth a read, because it clearly explains the problems with the president’s unaffordably ambitious budget and HMO-style health plan that would enrage Americans if it were enacted and implemented. The document does a good job of explaining the problems with the president’s budget and broadly outlining the Republicans’ alternatives.

Democrats are so anti-business that they are willing to prolong the recession

The Wall Street Journal’s Daniel Henninger says, “the national Democratic Party has disconnected itself entirely from the private sector.”

What this means for investors is that

Stocks are rallying in the face of a long recession that may be just beginning

Stocks are rallying in this bear market for the wrong reasons.

The AP has a good roundup of the bullish and bearish views of the economy and the markets, and I think things are

 

President Obama fails to restore confidence in himself and his economic team

Reporters gave President Obama a chance to restore confidence in him and his economic advisers and he blew it.

To me, the big news is that Obama is another Woodrow Wilson.

He’s stubborn, supremely confident, believes in strict Federal control of the private sector, disdains and puts down critics (Wilson put them in jail) and refuses to listen to the Henry Cabot Lodges of the world.

In short, he scared investors and

Questions for President Obama’s press conference

This evening President Obama will attempt to use a nationally televised press conference to sell voters on his economic proposals, the budget and his competence.

My questions for the president:

 

Pressure is on Obama to change market rules he promises to not change

President Obama and Treasury Secretary Geithner are trying to entice hedge funds and other private speculators into using government subsidies to buy toxic assets from banks and other financial institutions.

But Paul Krugman is warning:

 

Christina Romer wastes her credibility defending Obama’s budget; on the road to bankruptcy?

Christina Romer, a prominent economist and chair woman of the president’s Council of Economic Advisers is wasting her credibility as she glibly defends President Obama’s budget, which Sen. Judd Gregg (R-NH) predicts will put America in bankrutcy.

On a scale of one to ten, with ten being high, Romer’s credibility already is down to a five. She defends the indefensible budget that

Obama to Warren Buffett: Shut up

President Obama this morning bluntly rejected the demand by leading investors and business executives that he focus on fixing the financial system and not try to restructure America with all of his liberal health, education and energy programs at the same time.

The president very directly told Warren Buffett,

 

President Obama’s attacks on AIG’s bonuses a smokescreen covering for the political class

As usual, The Wall Street Journal editorial pages expose the real reason President Obama and Congress are raising such a ruckus about AIG’s notorious bonuses.

In an editorial, The real AIG ourtrage, in tomorrow’s paper, the Journal asserts: