The Hits Just Keep Coming - One Set of Rules for You Another for the Banks

In the latest abomination the Obama administration has changed tax law for Citibank. Not to belabor the technicalities, but US tax law generally limits a taxpayer's ability to utilize operating losses to offset prior or future income. The limitation is operational where there is a change in control. The disposal of the federal government stake of approximately 34 percent of Citi combined with the equity offering runs into this problem. But as if by a king's decree the Obama administration is pretending as though the limitation doesn't exist in Citi's case. The impact is only $38 billion, yes $38 BILLION. This is beyond obscene, I think it's illegal. Now mind you I just learned this so I need to investigate it further, but I can't imagine how else it could work (I am a tax attorney). Essentially, US taxpayers have just bailed out Citi to the tune of another $38 BILLION, and no one's the wiser. Are you kidding me. This is beyond the pale.

The Mess That is Our Government

I am beyond disgust. What has happened the last week. Obama finally talks about jobs and then sources say he'll fund it with TARP funds. The knucklehead Harry Reid gets some semblance of a health care bill through (although it's ultimate prospects remain unclear). All this followed by the EPA's display of hubris, by saying if Congress didn't act that they'd put forward their own onerous version of cap and trade (put aside the ridiculously long amount of time that would take). This idiocy is only rivaled by the inanity of the loyal opposition. The Republicans say nothing meaningful.

The only conclusion I can draw is that they are completely out of touch with reality. It is shocking, simply shocking that all these idiots can do is either try to shout the other side down or trying to push forward a laundry list of political priorities irrespective of the economic reality we find ourselves in now. I have always been a political afficiando, but never have I felt so entirely voiceless. The situation is glum indeed.

Retail Numbers are Universally Disappointing

Initial retail sales figures have come out for Black Friday and they were poor and below most forecasts. Before we get to the numbers let's challenge the prognosticators. Estimates for this year's retail sales on Black Friday generally were strongly favorable when compared to the cataclysm of 2008. What world are these prognosticators living in? The facts are hard to avoid, yet the estimates seem based upon the foolish notion that American consumers will continue to ignore reality despite 17% unemployment, 1 in 4 mortgage holders underwater and an unsure retirement lying in front of them. How can this be, haven't we moved to a "new normal" and assuming we have (I do), when are analysts going to catch up. I feel like they spend way too much time watching the happy talk on CNBC.

Initial estimates show retail sales increased .5% over last years, but the Northeast numbers showed a 5% decrease from the paltry 2008 numbers. How can that info be spun positively, frankly, I have no idea. I don't doubt, however, that the bulls and the senseless cheerleaders on CNBC will attempt to do so.

Dubai Default

On our holiday the financial world took its first step back to reality as Dubai asked its lenders for forbearance on billions of dollars of debt. Dubai's recent building have been nothing short of incredible, if you aren't sure (oh shucks, even if you are sure) look at this http://ibankcoin.com/chart_addict/2009/11/26/dubai-the-city-on-crack/ . Well in the happy-happy land reflected in recent stock market movement, this has caused an enormous impact while we gorged ourselves on great homemade food (at least I did). The dollar rose as did the Yen as the Euro and Pound were, well pounded. This is the flight to safety that market bears warned about.

The Greek stock market was down 7 percent (another potential default risk), while most of the other European markets were down roughly 2 percent. But the full impact hasn't all been accounted for yet. The closure of the US market certainly cushioned the fall in equities and the shortened day in the US markets tomorrow (and low volume driven by the lack of market participants) may tamp down the impact tomorrow, but the long-term implications remain intact. The short dollar trade has been oversold (at least in the near-term). This fact, not sustainable increases in corporate earnings have driven the market to regain more than 60 percent of the market losses sustained. A return to the dollar as the safety currency may be exacerbated by a short squeeze of an overplayed trade.

The foregoing may (I believe likely) will cause an enormous impact on the value of US equities. I don't buy the case sold by current market bulls. Consumers account for approximately 2/3 of the US economy. Between job losses, credit cards and underwater mortgages, it absolutely amazes me that analysts claim that we're going to have a good holiday season. Be real, folks are strapped. Whether this event or subsequent events cause a return to rationality I don't know. But one thing for sure things are different than they have ever been in my lifetime and certainly the clowns in Washington (all of them), simply don't get it. Disappointing.

New Spin on Health Care Reform

Let me start this piece by saying that health care reform is needed. There is simply no way it is acceptable that our per capita spending is first amongst industrialized countries, yet our results are 37th amongst the same group. Moreover, the rate of increase in costs is daunting.

That said, the latest spin is that not passing health care is worse for Democrats than passing something, anything. Given the precarious state of our economy, I find that contention patently absurd. The two disparate bills generated by the House and Senate are fraught with problems. What the bills do display in abundance is the problems with our Congress and their lack of connection with body politic. Much has been made of the deal to get Senator Mary Landrieu to buy off on cloture. That seedy deal is normal Washington politics, headline benefit with little to nothing accomplished.

The fact is the Democrats are no where near a deal on health care and the Republicans have decided to take their toys and go home. This is not to say a deal won't get done, but the abomination that will emerge if it gets done, will be ever more frightening. The Republicans seem to be hoping this happens so they can hoist the Democrats on their own petard in the '10 elections. The lack of leadership is frightening, and the complete abdication of leadership from the White House is nothing short of shocking.

The spin that something no matter how fetid and obese is better than nothing at all is obscene. Our legislature cannot effectively legislate. Moreover, the Administration pitiful silence is deafening. Do they simply not get it, not understand what their jobs are?

First Winter Storm on Its Way

Well the lovely November we've enjoyed thus far are about to end. The news stations are in breathy tones, although it looks like we are more likely to get mostly rain, of course the storm track could change. The weather outlook appears to track closely the rough ground that lays in front of the Administration. The jobs numbers are abysmal, much worse than the headline number of 10.2%, that number has been cooked up by administration's interested in happy talk regarding the US economy for almost 20 years. Health care is a mess and nothing is likely to happen before the new year. Cap and trade is even more of a disaster. Afghan policy remains in limbo, although that may change soon.

What is the administration to do? Although it's patently unclear how much impact any devised plan will have, they better quickly move toward creating jobs. While the effect of any change won't likely happen anytime soon, the failure to do something is clearly the road to folly. Because of its unwillingness to prioritize the economy, I think 2010 will be an unmitigated disaster for Democrats. The administration fell in love with their own press and decided to press long-held legislative priorities, irrespective of the scope of the problems they were walking into. But how, how could they have been so oblivious to the nature of the challenges facing the country. Simple answer, hubris, the same disease that infests the D.C. political class. UGH!

Major Deficit Reduction Proferred

The administration has offered their first attempt at reducing the deficit, they're going to utilize unused TARP funds. A brave, disciplined move no doubt. I mean let it sit around a little longer Nancy and the troops will find a way to spend the cash. The country is in a quandary, Obama has promised not to raise taxes on those taxpayers making less than $200,000 (or was it $250,000, no matter), but the fact is that absent raising taxes the debt load is daunting. Moreover, it somewhat robs the Republicans of their primary legislative offering, lower taxes. No worry, nothing to see here just move along. Our feckless politicians will continue their dopey dance, providing no leadership whatever. Our government is failing (although not in a way knucklehead Glenn Beck screams about), but we continue to fiddle while Rome burns, alas.

House Democrats Believe Passage of Health Care Will Help Them in 2010

Self deception is dangerous and the level of self deception among Democrats, particularly the leadership is profound. How they can even make such a claim is evidence that sanity has no place in D.C. The health care debate combined with the unemployment rate and the perilous state of the US economy create dark ominous clouds over the heads of Congressional representatives recently elected. Sure it'll have little impact on the House leadership because they're in safe districts. The impact on many of their colleagues promises to be severe. It astounds me that the leadership is so tone deaf to what's going on in the real world.

Obama to Endorse House Healthcare Bill Today

The President according to reports plans to endorse the House healthcare bill today, so what does that mean. Firstly, I must confess to largely ignoring the House bill as a Pelosi build disaster area, but not the WH. The WH initially had expressed so much enthusiasm with the Senate's machinations around healthcare, so why the sea change?

I'm frankly not sure. Is this a desperate last second throw to the end zone? If I were pressed to render a judgment I guess that I'd have to say that it is. Let's digress, no substantive bill will pass Congress without the complicity of the Senate, yet the House bill has absolutely no chance of passing the Senate. So why does the Administration decide to weigh in at this moment.

I'm a little lost, is this Administration, which so capably managed the Presidential campaign, unable to recognize the minefield that they have stumbled into? Does anyone above the age of 25 really believe that any plan that our federal government enacts can actually bend the cost curve. Please, put aside all the crazy talk surrounding this debate.

Health care is 16-17% of our economy albeit with poor results relative to the world (i.e., child mortality, neo-natal care etc.). Put aside that our critical care medicine is without peer, that is where our competitive advantage lies. The level of medical costs is clearly detrimental to the overall economy, but can the government cure it. My 46 years on this planet leave me with a jaundiced view. Maybe it could happen and it certainly is worthy of Congressional and Presidential attention, but the House bill is a train wreck.

We're going to save $50 billion on fraud and abuse in Medicare. If so, why are we waiting to pass a bill to realize that savings. That mere proposal of the foregoing shows its insanity. The House bill is a testimony to bureaucracy not to added efficiency, how does the Administration feel that this represents our best answer to a clearly vexing problem. I am disappointed that the President's advisers have apparently told him that this is the best he can hope for. I don't pretend to know the answer, but I'm confident that the House bill ain't it.

NJ is the Key - Is Rome Burning?

Cast aside Virginia and the 23rd district in NY, the real takeaway from yesterday's races is Corzine's loss in NJ. More importantly, it's the size of the loss - 5% points. The win by Christie is significant in a number of ways. He ran an abysmal campaign against an unpopular governor in a horrible economy. His performance in the debates was deplorable, yet he won. Not an insignificant undertaking given NJ's predilection for electing democrats.

However, the whys behind the victory aren't difficult to discern nor is the impact this may have on the feckless members of Congress. This election and the inability of the economy to recover anytime soon bode ill tidings for incumbents, particularly blue dog democrats in the House. The election, combined with word from Senate sources that no health care bill would be issued prior to 2010 portend difficult times ahead for health carer and the administrations other domestic priorities. The administration looks like a slightly disabled car in a demolition derby, endless circling around awaiting the death blow of one of its competitors.

As I have said before the triumverate of advisors to the President are doing him no favors, their tin ears to the encompassing economic gloom is astounding and their lack of apparent attention to the same are beyond problematical. Much like the outset of the Clinton administration it appears that kids have been thrust into adult jobs. The question is who can right the ship. Clinton turned to the politically savvy insider David Gergen, but to whom Obama can turn is more vexing.

Firstly, send Ms. Jarrett home, she's obviously a bright person, but as clearly, she lacks the political acumen necessary to help the President navigate his way through this morass. Secondly, allow Mr. Axelrod to head home, he's as ineffectual a domestic advisor as his predecessor, Mr. Rove. Rahm should stay, but lord knows he needs a counterweight, and one of equal or greater stature than him.

I doubt that any of the above will happen until things get much worse (ugh!), Obama doesn't strike me as someone willing to act quickly, nor to I see his chief of staff (Rahm) recommending it. The said, if this Administration doesn't wake up very soon, the mid-term elections will be a disaster for the Democrats. If things aren't significantly better by next October look for cartoon picture of Obama as Nero, fiddling while Rome burns.

Health Care Done for 2009

Senate democratic sources indicate the no bill will be put forward prior to year end. Irrespective of one's position on such a measure, the political ineptitude is remarkable. The Obama administration has done nothing to strengthen its own hand, to the contrary they are the primary source of the failing of their main domestic imperative. An overall view is that hubris and political idiocy dominates the administration, more to my previous post.

Given this delay, it remains unclear to me that such a plan can be implemented, the 2010 elections will predominant, and the power of Obama will diminish. Such a sorry state of political acumen.

Pelosi, Reid, McConnel, Boehner and Most of All Obama - Do They Care What's Going On?

I remain throughly interested in the business of politics, but my view has changed somewhat. I know am far more interested in leadership, something sadly missing amongst the majority of our political class. Do these folks recognize the sorry state of our federal economy? Do they honestly care? If actions truly speak louder than words, these folks are clowns, not worthy of the positions they have.

The Republicans appear vested in the interest of the economy imploding once again to allow them to retake power. The Democrats, on the other hand, want their agenda passed, irrespective of the cost. The President, intent on listening to the knuckleheaded, tone-deaf trio of Jarrett, Emanuel and Axelrod, plods forward ineffectually. A sorry plight.

Where we leadership come from, sadly I have no answer. What I can say with some certainty is that the present path will not succeed. Housing, jobs, the explosion of the federal debt and the decline of the dollar do not bode well for our economy over the next 2 years. I for one am highly pessimistic.

More of the Same From The WH

Are they tone deaf or simply idiots. The latest from the government about the jobs they've created or saved, debunked http://tiny.cc/Mk7lS. What we learn as citizens is that the government, irrespective of the party in control, will tell the country what it believes they want to hear. It's pitiful, our governmental class is so out of touch with the citizenry that it is astounding. When will it change, I fear, no rather I expect, not within my lifetime. Congress is a joke, as is the Executive branch. I'm no kind of believer in the nonsense of the village idiot Glenn Beck, but the distance of our politicians from the people they reportedly represent is vast. I beyond troubled, I am despondent.

Thin Skin of WH Getting Pretty Old

Time to man up WH, the latest shot across the bow from the WH is against Edmunds.com, the car website. The shot attacks Edmunds.com's assertion that cash for clunkers cost the taxpayers $24,000 per car. While I question the number from Edmund's, the fact is the WH looks like clowns, trying to shout down all who challenge their programs. Grow up, everyone recognizes that we are playing on untrod ground. Quit being so defensive, do what you think is right, if the data shows you were wrong, do something shocking, admit it. The current administration continues to look weak.

Moreover, the administration's job creation numbers are pure fantasy. It is pitiable to put forward such lame information when the economic realities are so severe. It is entirely the wrong economic time to have such a pro-government administration in place.

The administration has shown precious little attentiveness to the present economic circumstances, instead they continue down a wish list that is out of step with present facts. I am extraordinarily troubled, the US economy is in shambles. Not beyond repair, mind you, but profoundly troubled.

I Question the Intellectual Strength of Valerie Jarrett

I watched her a number of times at this point and I am not yet convinced that this woman is all that bright, certainly not with regard to national politics. I know she has many acolytes not the least of which is the President himself, but I remain unconvinced. More importantly, I think her non-public, governmental knowledge is even more wanting. Frankly, I think her advice is atrocious. While her name is not associated with her unattributed comments to the press, I feel fairly confident her fingerprints are apparent on a number of items, yet of course her style is entirely different from the other 2 major spinners within the administration, Rahm and Axelrod. Her careless hiring decisions are one thing, but having a tin ear to the national political scene convinces me she is out of her depth.

How Bad Was That Call

The call on Joe Mauer's ball to right field in yesterday's Yankee Twins game was deplorable. I will say as succinctly as possible that it is the worst call I have ever seen in playoff baseball. The call was not even close and was absolutely abysmal. There is simply no excuse, the umpire was the left field umpire, unbelievable.

Big Fun on The Blog

Nothing to say other than I wish I saw sunshine and had income, oh well.

Glenn Beck - Roger Ailes' Nutjob

While I confess to watching Beck nightly (yes, I realize I'm part of the problem), it's because I'm totally fascinated by him. Do not worry about logical progression when watching the show, it's unimportant. Two plus two doesn't equal four, but just jump on board on the fun train! The 9/12 "project" is bizarre, what is the point, I watched him describe it innumerable times but I still have no idea what he's talking about. My conclusion, it's about Glenn, the entirety of the show and its antecedents are about Beck, logic need not apply.

Obama Speech to Joint Session, Stimulus Bill Saves/Generates 1 Million New Jobs, Stock Markets Up (Again)

It's a beautiful world, all is great, nothing to worry about, give me a break. Where is the reality potion, 'cause lord knows there is tons of demand. I am flummoxed, how long can this nonsense go on. Enough of my mindless ranting, I'm done.

Tonight Obama Speaks to Joint Session of Congress

Story on the web last night claims Reid and Pelosi have the votes and Obama wants to utilize hyper speed to push health care reform too, note that the story was light on specifics and that's the rub. I don't see how the Senate passes a bill nearly as comprehensive as the administration was looking/hoping for, point of fact, I think there's no shot. Leaks from the White House indicate that Obama will support the public option, but that ship sailed seven weeks ago.

The real remaining question is what type of speech Obama will deliver. I'd seriously question an extensive lecture format, because than nonsense simply won't work and its failure will leave a gaping hole in the hull of the USS Obama. Whether that leads to a democratic blood bath next November, despite current thinking, isn't a fait acompli, democratic fortunes are more tied to the economy. As to the economy, I am not optimistic. A jobless recovery, in my opinion, will result in an unmitigated romp for republicans. While the death of the republican brand may have been greatly exaggerated, the only real cure is one party rule, just what we have now.

I for one have lost almost entire confidence in the political class. These clowns (just pick a party) care very little about what happens in "real" America. They live in an unrealistic fantasy land. The vast majority of the state legislatures are, in fact, worse than the feds. State bureaucracies are even more ignorant of economic reality than the feds. States' have promised employees, police and teachers ridiculous pension and medical care that are simply not sustainable. Not only not sustainable now, but unsustainable in the best of economic times. But will government shrink, unlikely.

The Reports of My Demise are Greatly Exagerated!

Despite claims to the contrary, I am alive. My silence has been driven more by amazement than anything else. The administration is a mess. Lack of focus, overconfidence, and general ignorance of the body politic can all be blamed for the ineffectualness of the present administration. Oh, let's not forget ceding 'control/authority' to Nancy and the nut-jobs running the House of Representatives. I don't know what else to say at this point. More to follow.

A few comments regarding the inane equity markets: Please get a grip on reality. Sure the market is supposed to look forward six to nine months, but let's get a grip, true recovery is a ways off. The consumer is strapped, if not unemployed. Housing ain't going to recover when people with 770+ FiCO scores can't get mortgages. I think the recovery will be slow, but what do I know.