#geithner obama

[midwest-musings]

THE WEARIN' OF THE GREEN AND THINGS LESS PRISTINE

I met with Pat Mc'Carrity an' he took me by the hand. He seys, "How is ol' Ireland and how does she stand?" 'Tis the most distressful country the world has ever seen. For they're shootin' people even now for wearing of the Green. The true meaning of that song we hum every March 17 and its verses are not really understood by all who have done so. It is a true song of "the troubles," finishing with, "...and if the color I must wear is England's bloody red I'll wear it for the color of the Irish blood's been shed..." HM Queen Elizabeth II visited the Republic today, the first British Monarch do do so in hundreds of years. She was dressed entirely in Green. It will not erase the memory of terror and hatred that has lasted so long but it was a welcome start that hopefully marks the true end of a horrible period in history. Good on ya, Mame, and kudos to the two governments that made it happen. And now of course, DSK. One could say that what occurred in that $3000 a night broom closet in New York was the first original thought that ever came out of the IMF but if one believes the accuations out there our boy has followed this thought process before. In my experience, the NYPD doesn't get many high profile cases wrong (unlike show-trials brought on by politically ambitious prosecutors--read Eliot Spitzer) so I am sure the truth will out. Whatever the result, DSK has created more than one awkward situation for a whole bunch of people who are more that a touch out-of-sorts as we speak. To begin, we just threw the guy who probably would have been M. Le President in the can thereby turning all of French politics on its head and convincing those Frenchmen who weren't already convinced that the Yanks have it in for France to join the chorus. Bad timing as issues of debt, currencies, trade and overall global leadership are not exactly in sync between the two countries. Of course, He With the Hottest Wife Around is turning handsprings. Reeeelection time! Come On! And just when rumors abound that Mme. Sarkozy is preggers. It just don't get better than that. What timing. What a coincidence...? Secondly, despite what kind of a human being DSK might prove to be, the guy had clout and a following which is sorely needed in Europe today in light of the financial condition of some of the members of Euroland about whom we have been speaking for a number of months now. Thirdly--and I'm not at all sure this is a bad thing--it puts the entire question of the future role (assuming a future) of the IMF in the great scheme of things, and clearly opens the door to broader participation of a number of the emerging member states who for years have been complaining that the IMF operates for the sole members of the founding nations...i.e. the western states...not without some justification I might add. If the fall of DSK does lead to a changing of the guard the result could easily turn into a campaign issue in the U.S. of A as there is a large body of opinion on both the right and left that has constantly questioned the use of taxpayer's dollars for reasons that do not directly benefit this country and the new order would undoubtably result in a clamor to "spread the wealth" globally highlighting what seems to be one of The Leader's core beliefs and not at the best of time for him. Fourthly, it's going to be important to watch who gets the nod for the new head boy. Of all things, Joe Ackermann of DeutscheBank is being pushed by persons or person unknown. Given the first thing on the agenda has to be the sovereign debt crisis and the exposure of European banks--especially, but not exclusively--Germany banks, we could be looking at a major league taxpayer rip-off that will have consequences far greater than any Hellenic implication imaginable. We shall keep watch. Finally, do you think anybody is going to ask the question on our behalf Mr. and Mrs. Taxpayer what in the hell this scuzbucket was doing in a $3000 a night room whilst on private business in New York and booked on Premirer Classe on L'Air Chance because you know he wasn't paying for it? Somebody damn well better.

[midwest-musings]

BACK HOME AND BAFFLED AS USUAL

The grandkids were great but I have no idea what's going on. I had expected a real brawl over in Blighty but the finance commission punted...or as they say over there kicked it into touch. Nobody knows what the rules relating to capital adequacy are going to be, no one knows as to what the structure of banks will be and it's beginning to look like everyone is getting tired of the entire thing. In the mean time, the three big guys are substantially more capitalized than any bank over here so the argument shaping up is heading in the, "What's the big deal" direction. Of course you all know my view that when the growth enhancer hits the rapidly turning object, the only percentage of capital that counts is 100% makes me yawn as well. But, the thing that shocked me was a Reuters' report that Barclays Bank, which has total footings of some 1.5 TRILLION POUNDS has but 100 billion pounds in demand deposits. And these guys are worried about capital at the end of the day and not liquidity? Waddya nuts? Better over on this side of the pond? Ha! There is a widespread mindset forming within the Beltway and in the hallowed halls of finance that nobody understands Dodd/Frank and no one knows how to write regulations that conform to its mandates. Coulda told you so...wait, I did. Rah me. What will happen in the end of course is that the legislators will throw up their hands and turn to the banks to ask them what is it they do and how would you like us to regulate that activity. A veritable win/win...except for the taxpayer. Guys, I keep telling you this, don't regulate the institutions, regulate the people who run the institutions. If it goes wrong, somebody has to die--fiscally, of course. It's all about the money. And speaking fiscally, the boys are standing eyeball to eyeball, and I think The Leader just blinked. The continuing resolution battle was, in my mind, a lot of hot air. The real fight is now in place over the raising of the debt ceiling and this one could be a doozy. No one wanted to shut down the government last week and everybody knew it. But what is also known is that there is no way...NO WAY the Speaker gets the debt ceiling raised through the House without a substantial pound of flesh on the deficit. The Leader knows that as well as anybody and also realizes that without such legislation things can get very tricky very quickly which is why I think tomorrow's speech may be the defining point of his Presidency. He has indicated that there might be compromises to be made. Let'ss hope he gets this right. We should know by publication time tomorrow.

[midwest-musings]

TOUGH TIMES

I mean when you have to highlight the bold and brave move of Moody's in lowering Greece's rating from B1a to B1 you got a serious blogging problem on your hands. These are tough blogging times my friend, really tough times. Maybe, I should become a political pundit; there always seems to be room for just one more of those. Then again, constant raving is probably not particularly good for my my overall physical and mental state given the quality of our politics and politicians these days. So Greece becoming junkier and junkier is all I have I guess for the foreseeable future. Oh yeah, Poo Bear did put out another warning last week that she and the FDIC would deal harshly and quickly with any bank that was in danger of failure. Who cares. And along the same lines, the pols and the news guys have finally figured out (well, almost) the Dodd/Frank has probably made the situation a good deal worse by the clear creation of two (at least) tiers of financial institutions as witnessed by the fact that the risk premium assigned to institutions deemed by the market as not big enough not to fail has increased to 78 basis points according to one report. I don't know whether this is correct but clerly what will happen is that the big will get bigger, risk in the system will be more and more centered in the big institutions making them more risky, the small will want to get big and take bigger risks in an attempt to accomplish that goal and the realization will eventually come that we have made things worse not better. Way to go guys. Oh yeah, another worthy news item. Bill Gross, he of PIMCO, proclaimed today that what we need are more taxes on the "rich" (to be defined) and higher taxes on corporations. I am sure The Leader and his mob will be screaming, "See, see, see, a leader of American finance says we need higher taxes!" The New York Times will be right along with them. Of course, overlooked in all of this is the fact that poor Mr. Gross is right where you don't want to be in an enviornment in which the Fed is going to do it's damndest to inflate the hell out of our problems: Mr. Gross owns the biggest fixed income (bond) portfolio in the world and is about to get murdered. What Mr. Gross is trying to say is we need more revenue at the governmental level but being no brighter than the average politician he thinks the way to get it is to raise taxes rather than by redoing the tax code in the manner that Billy's guy and the Wyoming Wing Nut suggested and which everyone has ignored, especially The Leader who appointed them...Oh damn, I'm becoming a political pundit. See what happens when there's nothing going on. Scary.

[midwest-musings]

THE RACE TO WASTE (of time)

It's going to be a close one this year. Davos is always an early leader of the pack what with it's expenditures approaching a billion dollars this year on nothing but ego. A long discussion yesterday on financial regulation produced absolutely nothing I am told except a couple of fairly heated, private arguments. Jamie Dimon announcing that he was tired of hearing criticism of banks and a general consensus that if it wan't business as usual, it was damn close. Oh yeah, Jamie also put his imprematur on the Greek bail-out and by implication, Ireland, Portugal and whatever else comes along I guess. By the by, Jamie is of Greek heritage. Beware of Greeks bearing gifts...and especially those who change their names. Wonder what it was? The other contender for the biggest waste of time is the Financial Crisis Inquiry Commission, chaired by Phil Angelides, whose report was issued the other day. Wait, I take that back. Having but ten members THREE reports were issued: one by Democrats on the committee, one by three Republicans and one by one guy who said the other two reports were crap. Surprisingly, no one has paid any attention other than to state that this 500-odd page, soon to be best-seller, is now on sale at a Borders near you; which may be an indication why Borders is in the toilet. I have no idea what the hell this exercise cost the American people but it has to be in the millions. Now besides being the former head of the California Democratic Party, ol' Phil was in charge of the finances for Los Angeles County. The theory behind his appointment as Chair was, I guess, "it takes one to know one," but I may be wrong. The scary part is I bet at some point The Leader and The Suit will start quoting from some part of the majority's report to prove a point. The lame, leading the halt, leading...God knows what whilst ignoring the Bowles/Wing Nut commission which had some pretty good ideas to chew on. Nevertheless, next week we shall have our own little discussion as to these meaty issues which seem to have brought all of these great minds world-wide to a grinding standstill. Stay tuned, and if you run into Al Gore, send him this way. We have a few folks around here who would like to ask him some questions about this global warming thingy. See you Monday.

[midwest-musings]

BULLET POINTS

It is way too hot out here in the fly-over zone to even think so today we just get bullet points to keep the mind turning over. ---Jamie Dimon, the CEO of J.P Morgan yesterday told Ben Bernanke what everybody knows but nobody would say: Has anyone given a thought as to the effect that all of these new regs might have in freezing up the financial system? Amazingly, Ben said "not really," claiming that it was a very hard thing to do but what happened two years ago simply could not be repeated, hence, new regs. A greater example of the lame leading the halt has never been seen. Jaime might have thought about what he was going to get when he dropped a couple of mil of his own money on The Leader in '08. Sorry Jaime. Deal with it. ---Germany jumped on the French bandwagon yesterday in regard to Greece. The effort to give the banks time is now in full voice. Of course no one is asking what in the hell the banks were doing for the last three years, but then again, Jaime can't be in two places at once or can he? He might think so. ---Big vote in the Senate today on the famous Durbin addition to the Dodd/Frank law. The vote was to delay the admendment which would slash fees consumers pay each time their debit card is "swiped" and was fought tooth and nail by the banking industry. The vote to delay failed and the consumers win. Personally, I think anybody stupid enough to use a debit card should be charged !0 bucks a swipe, but the banks take it in the neck again. This is not going to hurt Jaime and his buddies so much but the home town guys that are issuers of cards are going to get murdered. Way to go Sen. Durbin. Why don't you walk into Rock Island National this afternood and see what kind of a reception you get. ---And speaking of Senators...It seems Carl Levin crawled under a rock a few days ago and hasn't been seen since. Remember his hearings regarding Goldman Sachs noted for his liberal use of the four letter substitute for fertilizer? Remember Carl accusing Goldman of the "massive short" that almost ended the world? Well, it seems as though Carl's boys couldn't read and if they could they didn't understand what it was they were reading. Got all the numbers wrong in their final report and managed to convince everybody that not only didn't Goldie have a "massive short," but that Goldie may well have lost money on the trades. Stay under the rock, Senator. The world will be better off, but apologize first. ---And speaking of "massive shorts," THE Ohio State University football program is a massive short if I ever saw one. The joy around the mid-west is palpable and in that state "up north" as Woody used to say it's party time. Who cares if we're in the tank as a nation? Go Blue! We need rain to break the heat. It's driving people nuts.

[midwest-musings]

THE WEARIN' OF THE GREEN AND THINGS LESS PRISTINE

I met with Pat Mc'Carrity an' he took me by the hand. He seys, "How is ol' Ireland and how does she stand?" 'Tis the most distressful country the world has ever seen. For they're shootin' people even now for wearing of the Green. The true meaning of that song we hum every March 17 and its verses are not really understood by all who have done so. It is a true song of "the troubles," finishing with, "...and if the color I must wear is England's bloody red I'll wear it for the color of the Irish blood's been shed..." HM Queen Elizabeth II visited the Republic today, the first British Monarch do do so in hundreds of years. She was dressed entirely in Green. It will not erase the memory of terror and hatred that has lasted so long but it was a welcome start that hopefully marks the true end of a horrible period in history. Good on ya, Mame, and kudos to the two governments that made it happen. And now of course, DSK. One could say that what occurred in that $3000 a night broom closet in New York was the first original thought that ever came out of the IMF but if one believes the accuations out there our boy has followed this thought process before. In my experience, the NYPD doesn't get many high profile cases wrong (unlike show-trials brought on by politically ambitious prosecutors--read Eliot Spitzer) so I am sure the truth will out. Whatever the result, DSK has created more than one awkward situation for a whole bunch of people who are more that a touch out-of-sorts as we speak. To begin, we just threw the guy who probably would have been M. Le President in the can thereby turning all of French politics on its head and convincing those Frenchmen who weren't already convinced that the Yanks have it in for France to join the chorus. Bad timing as issues of debt, currencies, trade and overall global leadership are not exactly in sync between the two countries. Of course, He With the Hottest Wife Around is turning handsprings. Reeeelection time! Come On! And just when rumors abound that Mme. Sarkozy is preggers. It just don't get better than that. What timing. What a coincidence...? Secondly, despite what kind of a human being DSK might prove to be, the guy had clout and a following which is sorely needed in Europe today in light of the financial condition of some of the members of Euroland about whom we have been speaking for a number of months now. Thirdly--and I'm not at all sure this is a bad thing--it puts the entire question of the future role (assuming a future) of the IMF in the great scheme of things, and clearly opens the door to broader participation of a number of the emerging member states who for years have been complaining that the IMF operates for the sole members of the founding nations...i.e. the western states...not without some justification I might add. If the fall of DSK does lead to a changing of the guard the result could easily turn into a campaign issue in the U.S. of A as there is a large body of opinion on both the right and left that has constantly questioned the use of taxpayer's dollars for reasons that do not directly benefit this country and the new order would undoubtably result in a clamor to "spread the wealth" globally highlighting what seems to be one of The Leader's core beliefs and not at the best of time for him. Fourthly, it's going to be important to watch who gets the nod for the new head boy. Of all things, Joe Ackermann of DeutscheBank is being pushed by persons or person unknown. Given the first thing on the agenda has to be the sovereign debt crisis and the exposure of European banks--especially, but not exclusively--Germany banks, we could be looking at a major league taxpayer rip-off that will have consequences far greater than any Hellenic implication imaginable. We shall keep watch. Finally, do you think anybody is going to ask the question on our behalf Mr. and Mrs. Taxpayer what in the hell this scuzbucket was doing in a $3000 a night room whilst on private business in New York and booked on Premirer Classe on L'Air Chance because you know he wasn't paying for it? Somebody damn well better.

[midwest-musings]

ENGLISH SPEAKING NATIONS

Just back to earth after watching England go through with a workmanship performance and the United States take the Group in a heart-stopping match of the highest quality.  If ever a side deserved a result, this was the one and the manner in which they played together and achieved success was nothing short of spectacular. I wouldn't go so far as to say soccer is a window to the world, but this mob in Washington might want to look in a gain a few lessons from this United States squad.  Today was not a good day for this administration (except in the eyes of the mainstream media who are desperately looking for something good to say about The Leader.  "The new Harry Truman" is the cry going up  (Apologies, by the way. It was not HST and a bucket of warm spit but Alvin Barkley---thanks to reader George).  L'Affair McCrystal on the eve of the G-20 summit is not helpful.  I suppose his handler think this makes Obama look strong: I think it makes him look the fool because the rest of the world will not view this as being about one man but about an administration in complete disarray.  Afganinstan  is Mr. Obama's war:  the man he has now put in charge is the man excoriated by The Leader and his colleagues in the party less than three years ago and is actually taking a demotion to conduct this action.  Looks like we may have a few holes on the bench where four-star generals usually sit.  World leadership does not come from actions such as this.  Just a personal thought...then again what else does one find in a blog?  Dummy. Unfortunate in it's timing was a completely nonsensical puff piece in the Journal op ed page today from the dynamic duo of The Suit the lately quiet Larry Summers.  Read it for a laugh because that's what everyone who will be in Canada over the weekend will be doing.  It is becoming increasingly clear that the element of "every man for himself" is becoming dominant in these financial discussions and I would be quite surprised if the result of this latest go-round is anything more.  Again, we appear not to have a clue and even less influence but we shall see. Perhaps you have noticed that I have chosen not to comment on the negotiations in Congress as to the financial services legislation.  Simple reason: I haven't a clue other than what I read in the papers and from what I read it appears that not too many folks in Congress have a clue either.  So I shall choose to wait until the final version arrives which hopefully will not interfere with the Ghana match on Saturday.  Us against a continent.  Should be a cracker.

[midwest-musings]

QUE PASSO, CHE?

Now with Argentina watching us like a hawk, The Leader sallied forth today on the first step of implementing the "Framework for Sustainable and Balanced Growth"--I'm not kidding, that's what he calls it--by announcing he and Ma Belle are off to Copenhagen to bring back the Olympics to Chicago. The fact that half the people in Chicago want no part of the Olympics in 2016 for goodness sakes but seem to be focused on jobs for today and an end to children murdering children in the streets has not swayed the Dynamic Couple. 8-5 neither of them have been to Copenhagen. Oh well... Anyway, this Framework is going to require the U.S. to borrow less and import less. One assumes that The Leader asked the remaining G-19 what they thought about that import less part but I'm sure in his mind there was little need for that. The reciprocal is that the rest of the world (read, China) is going to export less and focus on internal demand. Riiiight. Last time I looked there are about 1,000,000,000 people in China and only about 3-400,000,000 of them have a day job. Now if 600,000,000 people aren't working it's pretty hard to make goods for people who have no money and if they stay among the mass of the unemployed it's a pretty sure bet that one might experience some domestic unrest before long. Hence, the shift in economic emphasis might be a difficult act to pull off. Indeed, if memory serves (and I'm not yet THAT old) this sermon has been repeated over and over for the last 10 years and we still have sinners. As for the U.S. reducing it's trade deficit, that might be a touch easier but not by much as with the fiscal deficit estimated to increase by 10 TRILLION dollars by 2018 and debt-to-GDP to settle around 100% of GDP (up from 60% IN 2007) one wonders who will have any money to spend on anything except for the fact that we would have to increase our exports and in case you haven't been watching closely dear reader WE DON'T MAKE ANYTHING ANYMORE. Now Larry Summers may be a lot of things but stupid is not one of them. Summers, The Leader's head economic hummer was at one time the chief economist of the World Bank and surely he has seen this sort of thing before, usually in places to which one didn't travel without a bodyguard. But do we hear a peep from Larry about the nonsense that was being spouted in Pittsburgh last week? Of course not. And was there disagreements or mutterings from any other point on the compass on the rubbish being put forth? Nah. Why, you may ask? Simple, is my answer. Unless you are willing to sail a gun boat up the River Platt nobody gives a damn and nations will continue to act in their own best interest just as they always have since the beginning of time. There was a time when I was willing to believe that this mob showed some promise but after this nonsensical display, I doubt it. Platitudes, nothing but platitudes. Oddly enough, I received a call this morning from an old friend of mine, a Brit who has managed to do rather well for himself in the foreign service and who actually was in Pittsburgh last week, I think in an official capacity. He stayed over for a bit of a holiday and was making the rounds of old friends. "Quite a gathering," says I. "They're all the same, Charlie, they never change." "What did you think of our guy," says I? "Oh, we absolutely love him," says he. "An absolute breath of fresh air." "Really. Still?" "Absolutely! He's a rock star." "Well, that's good to hear, I guess," says I. "Indeed. You have a real winner. Of course, he's a total prat as well." "Why did I see that coming." "Because, you're not entirely dumb ol' boy. Never have been." "Thank you, I suppose." "Don't mention it." We'll talk about the dollar tomorrow in what will be a short week. We have a Brit arriving on Thursday.