Showing posts with label Dismal. Show all posts
Showing posts with label Dismal. Show all posts

Monday, December 30, 2013

The Dismal Year in Politics



WASHINGTON — The effects of the holiday season linger. Like the post-haunting Scrooge, I am as light as a feather, as happy as an angel, as merry as a schoolboy, determined to keep Christmas well. And still, when forced to consider it: 2013 was a dismal, terrible, cringe-inducing year in American politics. God help us, everyone.


It was a year in which the left, in implementing Obamacare, showed its worst face: overconfident, coercive, economically irrational and incompetent. The whole enterprise of technocratic planning will henceforth be shadowed by three numbers: three, 500 million and six. Three years to prepare the launch of HealthCare.gov. About half a billion dollars spent on contractors. And six people (according to an internal memo) signed up the first day.


It was also a year in which the right, in the government shutdown, showed its worst face: angry, fractious, ideological and uninterested in governing. “They pushed us into this fight to defund Obamacare and to shut down the government,” House Speaker John Boehner later complained. “Most of you know, my members know, that wasn’t exactly the strategy that I had in mind.” When is the last time a congressional leader publicly admitted to being railroaded by an irrational political faction?


In both of these cases — the Obamacare launch and conservative attempts to defund the program — there were clear signs of trouble ahead. The software and the strategy were obviously flawed — like ice too thin to take the required weight. But politics and ideology compelled smart people to strap on skates and attempt their doomed salchows.


This led to an extraordinary spectacle in the fall. The central appeals of two great political parties were discredited at the same time: Health care politics as a new governing majority. Anti-government populism as the wave of the future. Neither worked out as planned.


So what emerges from these ideological ruins? Perhaps a centrist governing coup, in which the Obama administration and congressional leaders plot immigration reform, measures to encourage economic mobility and major health care reform revisions? Not likely. While 2013 did end with a budget deal, it was the result of political exhaustion, not ideological innovation.


The politics of 2014, leading up to the midterm elections, will probably be dominated by two holdover trends from 2013.


First, the travails of implementing Obamacare will continue, with unexpectedly high premium and deductible costs, restricted doctor networks and small business plan cancellations that affect millions. The conditions of exchange systems in various states will vary radically — some relatively healthy, others with catastrophically underpopulated and risky insurance pools. Many Americans, of course, will benefit from provisions of the Affordable Care Act. But the disastrous launch of Obamacare has created a narrative of failure, leading to the natural selection of press stories consistent with that assumption.


The central problem of Obamacare will not yield to technical or rhetorical solutions. President Obama sold it to Americans as a plan with no losers. But it is a redistribution program, creating both winners and losers.


And many of the losers in Obamacare consider themselves middle class. This realization may eventually lead a number of elected Democrats to favor serious revisions.


The second trend is an outgrowth of the first. The problems of Obamacare are likely (and perversely) to delay any serious ideological repositioning of the Republican Party. The argument will be: “Why take any risk of dividing the GOP with, say, an immigration reform push, or a health reform alternative, when Democrats are in the process of self-destructing?”


Republicans have a serious prospect of retaining control of the House and regaining control of the Senate in November — assuming that tea party challenges don’t knock off some of their stronger Senate candidates. The generic congressional ballot is increasingly favorable to Republicans. It is the probability of losing elections that forces parties to creatively alter their appeal. The failures of Obamacare, in short, reinforce Republican ideological timidity, at least at the congressional level.


The central problem for the GOP is a split political personality. For congressional Republicans, ideological timidity is a reasonable, short-term electoral strategy. For Republicans concerned about retaking the presidency in 2016, it is wholly insufficient. There is an urgent need to reposition the party with minorities, women and the young. Pointing and laughing at the failures of Obamacare will not be a sufficient governing vision.


This is, perhaps, the best a Republican can hope for in 2014: to benefit from the failures of Obamacare, while incubating the ideas that move the GOP beyond reflexive negativity. 




RealClearPolitics – Articles



The Dismal Year in Politics

Thursday, November 14, 2013

Shocking Video – Obamacare Architect, Ezekiel Emmanuel, Blames Fox News for Obamacare’s Dismal Rollout & Glitch-Plagued Website!

Last night, Fox News’ Megyn Kelly asked Obamacare’s Architect, Ezekiel Emmanuel, to explain healthcare.gov’s failed rollout.


Emmanuel didn’t stop at saying Team Obama couldn’t be blamed for Obamacare’s initial failure; he also said everything wrong with Obamacare is really Fox News’ fault!


Megyn answered Ezekiel’s outrageous charge with her usual calm, cool, collected, quick-wit, stating:


“I don’t think Fox News had anything to do with the rollout of HealthCare.gov.  As far as I know, we didn’t touch that website…”



As you watch time index 8:20-8:40, remember Ezekiel Emmanuel isn’t just Obamacare’s architect, he’s also the brother of Chicago Mayor and Obama-Confidant, Rahm Emmanuel…


Here’s the clip:




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Shocking Video – Obamacare Architect, Ezekiel Emmanuel, Blames Fox News for Obamacare’s Dismal Rollout & Glitch-Plagued Website!

Wednesday, July 10, 2013

China shares bounce as dismal trade data spurs easing talk




An employee of the Tokyo Stock Exchange (TSE) works at the bourse in Tokyo June 13, 2013. REUTERS/Toru Hanai


1 of 6. An employee of the Tokyo Stock Exchange (TSE) works at the bourse in Tokyo June 13, 2013.


Credit: Reuters/Toru Hanai






TOKYO | Wed Jul 10, 2013 3:03am EDT



TOKYO (Reuters) – Chinese shares rose sharply on Wednesday, with traders citing talks that China’s central bank may ease policy to boost growth after the country’s exports fell for the first time in 17 months.


European shares were expected to open steady, with Britain’s FTSE 100 .FTSE seen down as much as 0.1 percent and Germany’s DAX .GDAXI up as much as 0.2 percent. U.S. stock futures suggested a flat opening for Wall Street.


China’s exports fell 3.1 percent in June from a year earlier, while imports dropped 0.7 percent, severely missing market expectations and reinforcing signs of a second-quarter economic slowdown in the world’s second-largest economy. Beijing also warned of a “grim” outlook for trade.


The downbeat data follow Beijing’s crackdown on the use of fake export documents to close a loophole for short-term money inflows that had exaggerated China’s export performance.


“The surprisingly weak June exports show China’s economy is facing increasing downward pressure on lackluster external demand. Exports are facing challenges in the second half of this year,” said Li Huiyong, economist at Shenyin & Wanguo Securities in Shanghai.


China’s CSI300 .CSI300 index gained 2.2 percent, however, on the easing talk.


The index has been battered recently as Beijing tried to bring risky lending under control. At one point, it had fallen as much as 24 percent from a near three-month peak touched on May 29, and is down nearly 13 percent this year.


MSCI Asia-Pacific ex-Japan index .MIAPJ0000PUS was up 0.7 percent after gaining as much as 1.2 percent to a one-week high before the Chinese data. Earlier, Asian shares were buoyed by Wall Street’s gains on optimism for U.S. company earnings.


Assets in Australia, seen as a proxy of China’s growth, were also hit after the data. The Australian dollar fell to a session low of $ 0.9125 before stabilizing at $ 0.9192, and the country’s S&P/ASX 200 index .AXJO also pared gains.


Copper prices reversed early losses incurred after the trade data from China, a top consumer of raw materials, as Chinese stocks moved higher. They added 0.5 percent to above $ 6,700 a metric ton (1 metric ton= 1.1023 ton), while gold put on 0.2 percent, extending Tuesday’s 1.1 percent rise.


Brent crude prices were steady at just below $ 108 a barrel after rising 0.6 percent in the previous session on concerns that violence in Egypt could ignite conflict in the Middle East.


YEN GAINS


But concerns over China pulled the dollar .DXY further from a three-year high against a basket of major currencies touched on Tuesday. It was last down 0.1 percent after rising as high as 0.2 percent.


The dollar also fell 0.6 percent to 100.52 yen, which weighed on Tokyo’s Nikkei average .N225, down 0.4 percent.


Investors have been betting on further dollar gains as the U.S. Federal Reserve prepares to scale back its $ 85 billion a month stimulus program. The U.S. central bank is to release its minutes of the June policy meeting later in the day, plus Fed Chairman Ben Bernanke is to speak on Wednesday.


“Dollar buying will continue. With rising Treasury yields, there is no incentive to sell the dollar, particularly against the euro,” said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.


But Murata added, “any evidence of a slowdown in China will prompt some people to buy back the yen.”


EURO STABILISED


The euro steadied at $ 1.2793 after sliding to a three-month low of $ 1.2755 after ratings agency Standard & Poor’s cut Italy’s debt rating by one notch to BBB, the second lowest of the investment grade status, and left its outlook on negative, citing concerns about prospects for the Italian economy.


The downgrade, which moved in line with rival Moody’s, came a day before Italy was due to sell 9.5 billion euros of Treasury bills and two days before a planned sale of up to 6.5 billion euros of medium- and long-term bonds.


Also weighing on the common currency were comments by European Central Bank policymaker Joerg Asmussen, who said the central bank’s guidance on interest rates staying at record lows extends beyond 12 months.


The ECB later issued a statement saying Asmussen had not intended to give any guidance on the exact length of time for which it expects to keep rates at record lows.


Sterling was up 0.1 percent at $ 1.4883 after sliding to a three-year low of $ 1.4814 in the previous session on weak factory output and trade data, seen as raising the risk of the Bank of England easing monetary policy in the coming months.


(Additional reporting by China Economics Team, Lisa Twaronite in Tokyo and Ian Chua in Sydney; Editing by Richard Borsuk)





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China shares bounce as dismal trade data spurs easing talk

Thursday, June 13, 2013

Notes from the Dismal Science: Wall Street Cooking Up Another Financial Crisis


Wall Street is cooking up another crisis-making shoddy loans and selling worthless securities to investors hungry for higher yields than CDs and government bonds offer.


Dodd-Frank banking reforms imposed very costly regulations on mortgage and commercial lending. Regional banks, which have solid knowledge of smaller businesses, could not bear these costs and sold out to large Wall Street institutions. Now a handful of money center banks control more than half the deposits and lendable money.


Although big banks have branches everywhere and are flush with funds, they don’t know much about which businesses are likely to repay what they borrow.


Banks aren’t carrying many mortgages on their books–they are merely conduits for Fannie Mae-but business loans have recovered to pre-financial crisis levels. And the bank examiners at the Comptroller of the Currency, the FDIC and Federal Reserve are alarmed about their lending standards.


Too often loans are made to businesses with inadequate cash flow–paper profits are important to stock investors but banks focus on cash flow to evaluate whether an enterprise can pay up each month. Also, many loans carry weak covenants and collateral.


Banks are lending at today’s low interest rates with alarmingly long maturities. That is troublesome because banks’ cost of funds go up and down as the Federal Reserve tightens and loosens monetary policy.


Many economists expect GDP growth to pick up the latter half of this year and next, and for the Federal Reserve to start pushing up interest rates. Then banks will lose money–lots of it–on 5 and 10 year loans made today. If the economy doesn’t pick up-economists have been known to be wrong-then loans made on questionable cash flow and weak collateral will fail.


Either way, banks are at the casino again!


But alas banks are shunting off a lot of their risky bets onto witless investors-thanks to the new boom in derivatives trading. Remember those nifty bonus generating contraptions that made 28 year old MBAs millionaires and wrecked AIG and Citigroup.


Manhattan financiers are once again bundling questionable corporate bonds and bank loans into investment securities–Collateralized Debt Obligations–for sale to wealthy individuals and retirees through hedge funds and unethical brokers.


When the losses on shaky bonds and loans come, big banks, bless their generosity, will spread the headaches around. Wrecked personal finances and broken dreams will follow, and consumer spending will slow, taking the economic recovery into the drink.


Not to be out done by their predecessors, today’s modern bankers are also writing lots of “synthetic securities.” Those generate returns to investors, not from the cash flow on loan repayments, but rather from bets made by third parties about whether loans will succeed or fail. Those have as much place in sound banking as nepotism does in government employment.


As in pre-crisis days, the total value of derivatives outstanding is many multiples of the actual value of the U.S. economy. When the loans and derivatives fail, many who have made promises to pay up won’t have the cash-just like 2008.


Look for bank balance sheets to be rocked, lots of wealthy folks to file for bankruptcy, and the economy to suffer another migraine.


Depressing? They don’t call this the dismal science for nothing. 



Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the U.S. International Trade Commission.



RealClearPolitics – Articles



Notes from the Dismal Science: Wall Street Cooking Up Another Financial Crisis