Tag Archives | Economy

Federal Regulators Sue Big Banks Over Mortgages

resize_bank_of_america_signWill the Obama administration finally approach national banks with an iron fist? The New York Times reports:

A bruising legal fight pitting the country’s most powerful banks against the full force of the United States government began Friday, as federal regulators filed suits against 17 financial institutions that sold the mortgage giants Fannie Mae and Freddie Mac nearly $200 billion in mortgage-backed securities that later soured.

The suits are the latest legal salvo fired at the banks accusing them of misdeeds during the housing boom. Investors fled financial shares Friday amid growing concern that the litigation could last for years and undermine earnings and balance sheets in the process.

The complaints were filed just as the stock market closed Friday afternoon, but with word leaking out of the impending legal action during the trading session, shares of Bank of America fell more than 8.3 percent, while JPMorgan Chase dropped 4.6 percent and Goldman fell 4.5 percent.

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Obama Readies Jobs Plan While The Right Plans To Scuttle It In A Country Facing Economic Apocalypse

Labor Day New York 1882

New York, Labor Day Weekend 2011: The magic wand is being readied in the White House as the President and his minions finally unwrap the mother of all jobs plans that will be revealed to the rest of us in a speech next Thursday before the cameras and Congress with the gravitas-packed aura of a State of the Union Address.

Attention, collapsing Economy: you finally have the big man’s attention. Nearly 70 organizations are pressing the President to take strong action.

Please give him a break. He’s been busy tending Empire business — waging GWOT warfare on IraqAfghanistanLibyaYemenPakistanSomalia et al …

Call it the greatest “long war” in American history: an unending and unbelievably expensive intervention justified as necessary to keep us safe.

We can assume that contingency plans for new wars with Syria, Iran and the Republic of Wikileaks are being drafted as we speak.

The challenge this week is to bring together all of the Administration’s sophisticated strategic planning, disciplined focus and ‘get it done’ fervor finally to straighten out this out of control economic mess.… Read the rest

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City Introduces “Sex Tax Meters” For Prostitutes

800px-10.3010_Torino-nightlife.v2Inspectors may be pulling prostitutes off the streets in Germany. Not because they’re trying to lower crime rate, but because they haven’t been paying their income taxes. Via Reuters:

Prostitutes in the German city of Bonn must carry a ticket purchased from a new parking meter-like machine while working the streets or face hefty fines from tax authorities in a scheme launched on Monday night.

In Germany, ladies of the night pay income tax — the level of which varies from region to region — but compliance is difficult to enforce with women seeking business on the street.

Germany’s first “sex tax meters,” from which prostitutes can purchase a ticket for 6 euros ($8.72) per night, will ensure the tax system is fairly implemented, a city spokeswoman said.

“Inspectors will monitor compliance — not every evening but frequently,” the spokeswoman told Reuters.

[Continues at Reuters]

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Systems Collapse When The Irrational Is Considered Rational


Photo: Agamisudo (CC)

Oh thank you, Wikipedia, for this definition:

“Irrationality is cognition, thinking, talking or acting without inclusion of rationality. It is more specifically described as an action or opinion given through inadequate reasoning, emotional distress, or cognitive deficiency. The term is used, usually pejoratively, to describe thinking and actions that are, or appear to be, less useful or more illogical than other more rational alternatives.”

And what about this one? Market Psychology?  This term is defined in the Investopedia this way:

“The overall sentiment or feeling that the market is experiencing at any particular time. Greed, fear, expectations and circumstances are all factors that contribute to the group’s overall investing mentality of sentiment.”

Q: What do we have when we put the two together?

A: The current madness and market mayhem.

S&P’s downgrade is being blamed for the market panic even though all the business media expected a downgrade and initially minimized its potential impact.… Read the rest

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The Trouble With Too Much Democracy

US_Government_Accountability_Office_sealIs America’s bigger problem the economic decline or it’s political decay? Andrew Potter writes in Axis of Logic:

The most telling moment of the recent standoff over talks to raise the American government’s debt ceiling came on July 22, when President Barack Obama called a press conference to announce that House Speaker John Boehner had backed out of the negotiations. “I’ve been left at the altar twice now,” Obama pouted. In case the image of the President as a jilted lover was not clear to everyone watching, he added that he had spent the previous day waiting for Boehner to return his phone calls.

The whole affair has left a lot of Americans in a state of bipartisan disgust, with citizens from all points on the political compass cursing out their elected representatives. Yet it doesn’t seem to have occurred to many people that there is something structurally flawed with a system that allows the head of just one legislative house to treat the supposed leader of the free world as his last choice for the senior prom.

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Second Recession In This ‘Double Dip’ Will Be Worse Than First

Panic1837_cropThere’s no doubt about it, the United States never really recovered from 2008’s crash and burn and the gas frantically poured on the fire by the Obama administration to “stimulate” the economy created nothing more than a spike in corporate profits that were never distributed to the people. What should we do now – start growing vegetables and stockpiling canned goods? Catherine Rampell reports on America’s dubious prospects for the New York Times:

If the economy falls back into recession, as many economists are now warning, the bloodletting could be a lot more painful than the last time around.

Given the tumult of the Great Recession, this may be hard to believe. But the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then.

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The Political War Will Continue

partyfightAs The Dog Days Of Summer Approach, Politicians Rest Before Returning To The Fray

Now that the debt drama is over for the moment, we can all safely retreat in what was once called the “Dog Days Of Summer” and chill out if the volatile weather allows us to. We can think back to that old song, “Summer time and the living is easy.” Even as we all know that for millions “the living” is anything but.

The House and Senate have become ghost-like chambers because all its members, so filled with strident indignation and inflexible talking points just a week ago, are now off on their paid vacations hyping their political war stories to grandchildren.

Imbued with a sense of triumph, the Tea Party is huddling to come up with ongoing tactics to hold the system hostage while the party leaders plan the new “super committee” with 12 chosen acolytes (how Biblical, that number 12!) to map the next round of fiscal blood-lettering.… Read the rest

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Is Apple Holding More Cash Than The U.S.?

Photo: TheIronLion

Photo: TheIronLion

Do US companies have more money than the US government? Recent financial figures show that Apple does. Via BBC News:

Apple now has more cash to spend than the United States government.

Latest figures from the US Treasury Department show that the country has an operating cash balance of $73.7bn (£45.3bn).

Apple’s most recent financial results put its reserves at $76.4bn (£46.9bn).

The US House of Representatives is due to vote on a bill to raise the country’s debt ceiling, allowing it to borrow more money to cover spending commitments.

If it fails to extend the current limit of $14.3 trillion (£8.7tn) dollars, the federal government could find itself struggling to make payments, and risks the loss of its AAA credit rating.

[Continues at BBC News]

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Durban South Africa, Friday Night at The Movies: We Can’t Escape The Tensions Around Us

Soweto. Photo: Michael Toft Schmidt (CC)

Soweto. Photo: Michael Toft Schmidt (CC)

It’s Friday night, and the motorways are packed with cars heading for the mall. Here in Durban, the Gateway Mall is the destination of choice. It’s huge, the biggest of its kind in the Southern Hemisphere. It’s stuffed with stuff, much of it upscale, calling itself a “theater of shopping.”  (It is actually built over what was once a dump.) The parking lots are packed with late model cars, many of them high end.

I have to confess, I was invited there to see America’s latest high culture import, the 3D version of the movie Transformers 3, based on a toy and cartoon, in a modern movie complex with 18 theaters and rows and rows of packed gates where you line up for endless popcorn and soft drinks.

Business was booming; the theater was full. Most of the crowd seemed to be whites and Indians but there were also many blacks now firmly anchored in the consumer life style.… Read the rest

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Video: President Obama Says It’s ‘Time To Be A Dick’ (Parody)

With news of President Obama's frustration with the debt talks, here is a parody from Funny or Die of what Obama may really want to say. As he said about the debt talks:
"I have reached the point where I say enough," and added "I've reached my limit. This may bring my presidency down, but I will not yield on this," according to the Republican aide. After leaving the debt talks, Obama said this confirms the totality of what the American people already believe" about Washington politicians who are "too focused on positioning and political posturing." (RawStory)
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