Fed Defies Transparency Aim in Refusal to Identify Bank Loans

Nov. 10 (Bloomberg) — The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn’t require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

“The collateral is not being adequately disclosed, and that’s a big problem,” said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. “n a liquid market, this wouldn’t matter, but we’re not. The market is very nervous and very thin.”

Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.

The full article includes more Fed lies, Barney Frank hot air, and some info on the AIG bailout.

From Marketwatch:

The U.S. is on track to post a record budget deficit in 2009, the White House is expected to announce Monday, according to reports.

The federal deficit will jump to almost $490 billion in the next fiscal year, U.S. media said, citing White House officials. Meanwhile, this year’s deficit will swell to more than $410 billion, a White House budget update to be released Monday afternoon will show.

The White House is scheduled to release its mid-session budget review at 1:45 p.m. EDT.

The continuing economic slowdown and bills for military operations in Iraq and Afghanistan are behind the record deficit.

The U.S.’s biggest budget deficit to date was $413 billion, according to figures cited by USA Today. President Bush inherited a budget surplus of $128 billion when he entered office in 2001.

An adviser to Republican presidential contender John McCain told the Washington Post that the new surge of red ink won’t have implications going forward since it’s tied to cyclical developments like the slowing economy and economic stimulus checks.

http://www.cato-at-liberty.org/2008/06/13/obama-tax-proposals/

Candidate Obama has introduced an array of tax proposals, which he discusses in various places on his campaign website. There are four overlapping themes in the Obama tax proposals the way I see it:

1. Social engineering.
2. Discrimination.
3. Economic micromanagement.
4. Empty populism.

Under social engineering, I would put Obama’s plan to greatly increase the dependent care tax credit. That would further encourage parents to find institutional day care for their children, rather than providing care themselves.

Under discrimination, I would put Obama’s proposed special tax break for the elderly. The federal fiscal system is already heavily tilted in favor of the elderly, thus it is unclear why Obama would want to further discriminate against the young.

Obama’s “American Opportunity Tax Credit” also creates unfair discrimination. This new tax break for college essentially increases subsidizes for future lawyers, accountants, and other professionals. Why subsidize these folks who will likely have much higher earnings than factory workers, retail clerks, and others who don’t go to college?

Under economic micromanagement, I would put Obama’s Patriot Employer Act, which provides tax breaks to certain businesses that jump through hoops related to hiring, wages, and other items.  Obama wants to cut capital gains taxes on certain investments and increase capital gains taxes on others, and he is proposing various narrow energy tax breaks.

Under empty populism, I would put Obama’s railings against “tax haven abuse” and “corporate loopholes.” If Mr. Obama really wanted to reduce corporate tax avoidance–rather than just using it as a campaign prop–he would join with John McCain and call for an across-the-board corporate rate cut.

A final category might be “innocuous tax cuts that do nothing for economic growth.” Here I would put Obama’s $500 payroll tax credit called “making work pay.” If Obama had wanted to spur employment, he should have proposed a cut in the payroll tax rate, which would change the marginal incentive to work, unlike the proposed credit.

In sum, Obama’s tax proposals are pretty awful. It is true that many Republicans and Democrats have proposed similarly bad tax ideas over the years. But Obama can be contrasted with candidate McCain, who thus far has avoided narrow favoritism in his tax proposals, and favors broad-based tax reductions designed to spur economic growth.

This is “change?” Looks like more of the same failed policies and economic ignorance.

http://www.telegraph.co.uk/…

Ordinary Germans have begun to reject euro bank notes with serial numbers from Italy, Spain, Greece and Portugal, raising concerns that public support for monetary union may be waning in the eurozone’s anchor country.

Germany’s Handelsblatt newspaper says bankers have detected a curious pattern where customers are withdrawing cash directly from branches, screening the notes to determine the origin of issue. They ask for paper from the southern states to be exchanged for German notes.

People clearly suspect that southern notes may lose value in a crisis, or if the eurozone breaks apart. This is what happened in the US in the Jackson era of the 1840s when dollar notes from different regions traded at different values.

A group of leading German professors warned at the outset of EMU that the euro would tend to be weaker than old Deutsche Mark, and that it would fuel inflation over time. German citizens were never given a vote on the abolition of the D-Mark, which had become a symbol of Germany’s rebirth after the war.

Many have kept a stash of D-Marks hidden in mattresses to this day. A recent IPOS poll showed that 59pc of Germany now had serious doubts about the euro.

While I’m not sure how justified this action is but I support it regardless. Centralized control of the money supply is one of the most disgusting and insidious forms of theft and economic intervention. If people have lost faith in the money they generally use they should be free to replace it.

Press release from said website:

DALLAS, TEXAS - JUNE 16, 2008 /PRNewswire/—Ross Perot, business leader and former presidential candidate, announced today the launch of “PerotCharts.com,” a public information website that contains objective, factual information about the current economic crisis in America. The site is being launched as an alert and appeal for American citizens to inform themselves about federal government spending. Perot said, “The U.S. national debt reached $9.4 TRILLION on April 30, and it is increasing by more than $1 billion every day. We are leaving our children and grandchildren with debt they cannot possibly pay.”

The rest on the other side of the jump…

Read More…

http://www.ft.com/…

“Something is seriously wrong when the American people are left to bear the consequences of reckless corporate conduct, while the offenders themselves are packed off with another $40m or $50m for the road,” he said. “If I am elected president, I intend to see that wrongdoing of this kind is called to account by federal prosecutors. And under my reforms, all aspects of a CEO’s pay, including any severance arrangements, must be approved by shareholders.”

Doesn’t that effectively happen now? If you are a shareholder you generally have voting rights in the way things are run. Even then if you don’t like what is occuring don’t become a shareholder. Seems pretty obvious to me that just like with any business… the investors are the ones in control in the end. Whether the investor is the customer buying the final product or the shareholders funding their creation. You don’t like what is being done… take you money elsewhere.