April 10, 2013
Hiatus!Apologies for blog silence of late. Work is busy(ier than usual). I'll try to throw up some actual content now and then, but it might be slim pickings for a while.
March 15, 2013
All I have to do is divine from what I know of you. Are you the sort of woman who would put the poison into her own lobster salad or her enemy's?
President Barack Obama: Now, a clever woman would put the poison into her own lobster salad, because she would know that only a great fool would reach for what he was given. I am not a great fool, so I can clearly not choose the lobster salad in front of you. But you must have known I was not a great fool. You would have counted on it! So I can clearly not choose the lobster salad in front of me.
Senator Susan Collins: You've made your decision then?
Obama: Not remotely! Because lobster salad comes from Maine, as everyone knows, and Maine is entirely peopled with RINOs, and RINOs are used to having people not trust them, as you are not trusted by me, so I can clearly not choose the lobster salad in front of you.
Collins: Truly, you have a dizzying intellect.
Obama: Wait till I get going! Where was I?
Obama: Yes, Maine. And you must have suspected I would have known the lobster's origin, so I can clearly not choose the lobster salad in front of me.
Collins: You're just stalling now.
Obama: You'd like to think that, wouldn't you? You've beaten my White House tour cancellation gambit, which means you're exceptionally strong, so you could've put the poison in your own lobster, trusting on your strength to save you, so I can clearly not choose the salad in front of you. But, you've also bested my illegal recess appointments, which means you must have studied, and in studying you must have learned that man is mortal, so you would have put the poison as far from yourself as possible, so I can clearly not choose the lobster salad in front of me.
Collins: You're trying to trick me into giving away something. It won't work.
Obama: It has worked! You've given everything away! I know where the poison is!
Collins: Then make your choice.
Obama: I will, and I choose... What in the world can that be? [Obama gestures up and away from the table. Collins turns to look...]
Collins: What? Where? I don't see anything.
Obama: Well, I, I could have sworn I saw something. No matter. [Obama smirks]
Collins: What's so funny?
Obama: I'll tell you in a minute. First, let's eat. Me from my plate, and you from yours.
Collins: You guessed wrong.
Obama: You only think I guessed wrong! That's what's so funny! I switched plates with Biden when your back was turned! Ha ha! You fool! You fell victim to one of the classic blunders! The most famous is never get involved in a land war in Libya, but only slightly less well-known is this: never go in against a Chicagoan when death is on the line!! Ha ha ha ha ha ha ha!! Ha ha ha ha ha ha ha!! Ha ha ha... Joe?
February 10, 2013
Galactic WarmingThe debate is over. An overwhelming and infallible consensus of CNN anchors conclude that mankind's carbon emissions do indeed summon vengeful fireballs from the heavens.
Know Your AmendmentsAt least the first couple.
February 04, 2013
Bo Has a Belly Full of HomeworkAgain.
February 01, 2013
Lots of noise and rebalancing in the January report, as always, but the headline headline came in weaker than expected at 157k nonfarm payrolls (private payrolls: 166k). Unemployment ticked up from 7.8% to 7.9% (vs. expectations of 7.7%).
Naturally, futures extended their gains in response to the news, perhaps because it means the Fed's 6.5% jobless target has slipped even further over the horizon, allowing unprecedented accommodation to continue unabated forever and ever.
The change in total nonfarm payroll employment for November was revised from +161,000 to +247,000, and the change for December was revised from +155,000 to +196,000.
Those are healthy revisions, but the perverse result is that we're left with a fairly frightening 3-month decelerating trend (247k, 196k, 157k).
January 30, 2013
With plenty of caveats, yes, but it's still the first negative print since the end of the recession 3.5 years ago. At -0.1%, the fourth quarter came in well below expectations of +1.1% and marked a steep plummet from the prior quarter's +3.1% (the worst quarterly deceleration since the trough of the recession).
Markets seem to be taking it in stride, perhaps because the news comes in time for the Fed to sweeten their language by the end of today's policy meeting.
January 29, 2013
Consumer Confidence Plunges As Tax Hikes Kick In
A good number of non-millionaires-and-billionaires may have made the critical error of looking at their 2013 paystubs.
It would appear that the hike in taxes on 77% of Americans that was heralded as a success, has dented confidence just a little. As the efficient stock market moves to all-time nominal highs in many cases, Consumer Confidence just fell off a cliff. The conference board printed at the worst level in 13 months - so all those 2012 gains are gone - and fell month-over-month by the most since the August 2011 fiscal cliff debacle. For every income levels (except those earning under $15k) confidence plunged with the $35k-$50k bracket crashing the most.
January 25, 2013
"Violating the Constitution" = "An Embarrassing Setback"?
Barely half of the oath of office deals with upholding the Constitution, after all.
WASHINGTON (AP) -- President Barack Obama violated the Constitution when he bypassed the Senate to fill vacancies on a labor relations panel, a federal appeals court panel ruled Friday.
A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said that Obama did not have the power to make three recess appointments last year to the National Labor Relations Board.
The unanimous decision is an embarrassing setback for the president, who made the appointments after Senate Republicans spent months blocking his choices for an agency they contended was biased in favor of unions.
January 21, 2013
Obama's Superlative Electoral Achievement
According to historical Gallup data, Barack Obama is the least popular post-war president to convince the country to give him a second term.
First-Term Average Approval Ratings:
Johnson - 74.2%
Kennedy - 70.1%
G.W. Bush - 62.2%
G.H.W. Bush - 60.9%
Nixon - 55.8%
Truman - 55.6%
Reagan - 50.3%
Clinton - 49.6%
Obama - 49.1%
Ford - 47.2%
Carter - 45.5%
I hope Jim Messina got a big bonus last year.
January 18, 2013
TurboTax Bug Leaks Upcoming Fed Policy Decisions To Big Banks
MR. LACKER. If I could just follow up on that, Mr. Chairman.
CHAIRMAN BERNANKE. Yes, go ahead.
MR. LACKER. Vice Chairman Geithner, did you say that [the banks] are unaware of what we’re considering or what we might be doing with the discount rate?
VICE CHAIRMAN GEITHNER. Yes.
MR. LACKER. Vice Chairman Geithner, I spoke with Ken Lewis, President and CEO of Bank of America, this afternoon, and he said that he appreciated what Tim Geithner was arranging by way of changes in the discount facility. So my information is different from that.
CHAIRMAN BERNANKE. Okay. Thank you. Go ahead, Vice Chairman Geithner.
VICE CHAIRMAN GEITHNER. Well, I cannot speak for Ken Lewis, but I think they have sought to see whether they could understand a little more clearly the scope of their rights and our current policy with respect to the window. The only thing I’ve done is to try to help them understand—and I’m sure that’s been true across the System—what the scope of that is because these people generally don’t use the window and they don’t really understand in some sense what it’s about.
January 16, 2013
Bill Clinton Assures Hillary Will Make It To 2025
He actually predicts she'll hang on until 2067, but this testament to her longevity seems designed to reassure the electorate that, despite turning 69 in 2016, she won't expire in office if she succeeds Obama.
BILL CLINTON: She's always been very, very healthy and she has very low blood pressure, very low standing heartbeat. I tell her that, you know, she's still got time to have three more husbands after me. So, I think she'll live to be 120.
And I always know that she's thinking about that whenever I'm, you know, stubborn about something, in her constant quest at my self- improvement. She refers to me as her first husband. Because I told her once she's going to live to be 120 and have time for plenty more.
But anyway, my advice is that she should rest up and decide what she wants to do with the rest of her life.
January 12, 2013
Treasury, Fed Debase Themselves By Dignifying Trillion Dollar Coin Trick With a Response ("No.")
Policymakers have gazed into the banana republic and found the banana republic gazing back at them.
The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling. If they did, the Federal Reserve would not accept it.
That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me today. ”Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” he said.
Accordingly, we've gone ahead and cashed out the platinum coin futures contract on the American Civics Exchange demo market, where it last traded at $24.98.
January 10, 2013
Latest Brilliant Debt Ceiling End-Around: Off Balance Sheet Financing
Lots of style points for this one. And as a former Enron advisor, Paul Krugman should find it even dandier than the trillion dollar coin trick.
[T]here is a plausible course of action, one that the president should publicly adopt in the coming weeks as his contingency plan should debt-ceiling negotiations falter. He should threaten to issue scrip — “registered warrants” — to existing claims holders (other than those who own actual government debt) in lieu of money. Recipients of these I.O.U.’s could include federal employees, defense contractors, Medicare service providers, Social Security recipients and others.
The scrip would not violate the debt ceiling because it wouldn’t constitute a new borrowing of money backed by the credit of the United States. It would merely be a formal acknowledgment of a pre-existing monetary claim against the United States that the Treasury was not currently able to pay.
Not "debt" mind you. Just a "formal acknowledgment of a pre-existing monetary claim." One which finds itself blessedly omitted from the liabilities side of the federal balance sheet.
And what do you do after you concoct a shady new debt finance structure designed to conceal its underlying risk or to sidestep rules limiting such risk? You securitize it and squirt it out into the capital markets, that's what.
Finally, the scrip would be transferable, allowing financial institutions to buy it at a high percentage of its face value, knowing that the political crisis would almost certainly be resolved before long.
The federal Anti-Assignment Act generally prohibits the transfer of claims against the United States from one private actor to another, but the government could waive the act’s application, which is what the president would do here.
See - it's even almost legal!
(As long as the President decrees that the law that outlaws it doesn't outlaw it.)
January 09, 2013
White House Won't Rule Out Trillion Dollar Platinum Coin
The White House on Wednesday didn't outright deny the possibility of minting a $1 trillion coin, an idea that's been floated as a way for the Obama administration to pay its debts if Congress were to fail to raise the debt ceiling in the coming weeks.
Absurd an option as this may be, it's apparently on the table. So we've gone ahead and launched a futures contract on it in our demo market.
You can trade it here.
January 08, 2013
Go back to bed. Your local business owners are.
Small-business owner confidence did not rebound in December, according to the National Federation of Independent Business (NFIB) Small Business Optimism Index. While owner optimism crept up 0.5 over November’s historically-low report, the 88 point reading was still the second lowest since March 2010. December’s poor report resulted largely from a deterioration of labor market components, and the surprising percentage of owners who still expect business conditions to worsen in the next six months.
And why so glum?
The Index is at a recession level reading as pessimism prevails; December’s reading is certainly not typical during a recovery. Seventy (70) percent of owners surveyed characterized the current period as a bad time to expand; one in four of them cite political uncertainty as the top reason. Taxes (23 percent) and regulations (21 percent) rank as the top two business problems, with “poor sales” as a close third (19 percent).
January 07, 2013
January 02, 2013
Building a Bipartisan Bridge To Two Months From NowThe Cliff Is Dead, Long Live The Cliff.
December 31, 2012
Senate Rolls Out of Bed
The upper chamber gaveled to order at the crack of 11 am today, with hours upon hours left to get done what they've shown no capacity to do over the last 18 months. They plan to debate into the wee minutes of the afternoon, so we should see a deal take shape any time now.
Live coverage of the Senate floor at C-SPAN.
Update: Obama to give a speech flanked by "regular folk" human props. We're saved.
December 20, 2012
Chart of the Night (the Mayans Were Right)