Tag Archives | Stimulus

The Mantra on Wall Street Is ‘Don’t Fight the Fed’, but Do You Know What the Fed Is Doing? And Where Did Belgium Get $141 Billion to Purchase U.S. Treasury Bonds?

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The main mantra on Wall Street is ‘Don’t Fight the Fed’, implying that if monetary policy is geared towards easing – lowering of interest rates – then riskier markets are the game in town, and if monetary policy is geared towards tightening – rising interest rates – then volatile markets are to be avoided. But do we know what the Fed is up to?

I. DOW, S&P 500, QE, and Tapering

Both the DOW and S&P 500 are sitting at all-time highs. Since bottoming out in early March 2009 (DOW, S&P 500), the DOW is up approximately 150% and the S&P 500 approximately 180%. Astronomical returns no matter what period you compare this to.

It’s no secret that the only reason the markets have been soaring is because of unlimited quantitative easing [QE], i.e., stimulus, stimulus, and indefinite-stimulus – “fundamentally a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or those who already own homes, but passing little along to the rest of the economy.”

By December 2012, funds were being pumped into the markets to the tune of $85 billion a month – a last resort, desperate measure that the FOMC began so that their ‘growth’ targets could be met.

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Government Shutdown and Appointment of Janet Yellen Guarantees Flow of Funds to Wall Street: They are reducing “two-thirds of this country to subsistence level”, Chris Hedges

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Yellen Submarine

It’s no secret that the only reason the markets have been roaring – since bottoming out in March 2009, the DOW is up approximately 125% and The S&P 500 approximately 120% – is because of unlimited quantitative easing to the tune of $85 billion a month, a last resort, desperate measure that the FOMC began in 2012 to maintain its ‘growth’ targets. The end result of this program has essentially been the transfer of wealth from Main Street to Wall Street.

In terms of types of financial wealth, the top one percent of households have 35% of all privately held stock, 64.4% of financial securities, and 62.4% of business equity. The top ten percent have 81% to 94% of stocks, bonds, trust funds, and business equity, and almost 80% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.”


click to enlarge – source

How this plays out with the ‘government shutdown’ and the fears that we will enter a recession if the U.S.

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Why Stocks Have Risen: Stimulus, Stimulus, and Indefinite-Stimulus, i.e., Transfer of Wealth from Main Street to Wall Street

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Since bottoming out at an intra-day low of 6,467 on March 6, 2009, the Dow Jones Industrial Average (DOW) has risen to 15,295 as of May 23, 2013 – a gain of approximately 130% in just over 4 years. The S&P 500 has shown similar results, advancing from an intra-day low of 666 to 1,650 for the same period, a gain of approximately 125%. Stellar returns.

As to why the markets have risen at historic rates during times of austerity economics? The answer is simple, it’s due to quantitative easing (QE) began by centralized banks after the market crash of 2008 – “fundamentally a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or those who already own homes, but passing little along to the rest of the economy.”

The amount of stimulus used varies depending on your definition of stimulus, so we won’t bother keeping tabs on the trillions that have been dumped into the markets in the last 4 years.

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The Military Industrial Complex Stimulus Program is Undeterred

Is there a panic on the Potomac?  The Congress has turned into a wailing wall just to hear all the moans about threatened cuts in what is patriotically known as our Defense budget.

Never mind that many of the cuts were ordered from above because the people at the top know how much they have to slash given all the waste, planned obsolescence and other waste they can afford to trim before they cut the bone or some hostile force can bring us to our knees.

The people who experience the reality up close and personal know that the public is being defrauded on almost every level.

Listen to Sgt. 1st Class Robert Zlotow from Fort Riley, Kan. who had the guts to send this letter to Army Times.

“I nearly spit out my dinner when I read your headline “Fighting through austerity” (March 4).

Even with these “evil” and “scary” cuts factored in, the defense budget will still rise every year in the foreseeable future.  According to the Congressional Budget Office, the projected defense budget will still go from $593 billion in fiscal year 2014 to $702 billion in 2023, even if this sequester is allowed to stand.

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Faith-Based Groups Received Massive Amounts of U.S. Stimulus Money

Hypocrisy is one thing that relgious fanatics and politicians tend to have in common. Here's a great example revealed by Politico:
The stimulus bought Castleton United Methodist Church in Indianapolis a new heating and cooling system. In Laramie, Wyo., it bought the Church of St. Laurence O'Toole new windows for the Roman Catholic school it runs. And in Harrisburg, Pa., Christian Churches United of the Tri-County Area spent its $120,000 in stimulus funding on food and shelter for local homeless people. "It kind of fell from the sky, and it was unbelievable that we had this much extra money," said Jackie Rucker, executive director of the church-sponsored...
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Thousands Of Stimulus Checks Went To The Deceased And Incarcerated

Someone didn’t check their list twice to  see who was naughty or dead. From The Washington Post.:

The federal government last year sent about 89,000 checks of $250 each to dead or incarcerated people through the Obama administration’s economic stimulus program, according to a watchdog report.

The Social Security Administration distributed about $13 billion to 52 million eligible beneficiaries in the form of $250 checks as part of the economic recovery program. The program cost $814 billion. Most of the payments were issued properly, but SSA failed to check all available payment records or was unaware that beneficiaries had died, according to a report by the Social Security Office of Inspector General.

Although SSA lacks the authority to recoup most of the money, the report estimates that slightly more than half of the payments have been returned.

Continues at The Washington Post

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$800,000 of Economic Stimulus Money Spent On African Genital-Washing Program

From the “you can’t make this stuff up” department, via CNS News (yes, I know it comes with a deliberately right-wing spin, but still!):

The National Institute of Mental Health (NIMH), a division of the National Institutes of Health (NIH), spent $823,200 of economic stimulus funds in 2009 on a study by a UCLA research team to teach uncircumcised African men how to wash their genitals after having sex.

The genitalia-washing program is part of a larger $12-million UCLA study examining how to better encourage Africans to undergo voluntary HIV testing and counseling – however, only the penis-washing study received money from the 2009 economic stimulus law. The washing portion of the study is set to end in 2011.

“NIH Announces the Availability of Recovery Act Funds for Competitive Revision Applications,” the grant abstract states. “We propose to evaluate the feasibility of a post-coital genital hygiene study among men unwilling to be circumcised in Orange Farm, South Africa.”

Because AIDS researchers have been unsuccessful in convincing most adult African men to undergo circumcision, the UCLA study proposes to determine whether researchers can develop an after-sex genitalia-washing regimen that they can then convince uncircumcised African men to follow…

[continues at CNS News]

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Interest on U.S. Debt: $4.8 Trillion

DebtHurtsJeanne Sahadi writes on CNNMoney.com:

Here’s a new way to think about the U.S. government’s epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.

More than half. In fact, $4.8 trillion.

If that’s hard to grasp, here’s another way to look at why that’s a problem.

In 2015 alone, the estimated interest due — $533 billion — is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a deficit watchdog group.

More on CNNMoney.com

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Government Watchdog Can’t Verify Stimulus Job Stats

EAMON JAVERS writes on the Politico:

The chief federal oversight official for the stimulus program said in a letter Wednesday that he can’t certify whether the number of jobs “created or saved” by stimulus funds is accurate.

Recovery Board Chairman Earl Devaney was responding to a request for information by Rep. Darrell Issa (R-Calif.), the top Republican on the House Committee on Oversight and Government Reform. In a letter to Issa dated Nov. 17, Devaney wrote, “Your letter specifically asks if I am able to certify that the number of jobs reported as created/saved on Recovery.gov is accurate and auditable. No, I am not able to make this certification.”

The Obama administration claimed that it saved or created at least 1 million jobs this year. But errors in the stimulus job creation data have become a political hot potato, as the administration has been hit by news reports revealing that data it posted on recovery.gov includes jobs allegedly created in congressional districts that don’t exist.

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Postal Workers Are Paid to Do Nothing … What’s Worse, Bored Postman or Greedy Bankers?

I thought the stimulus package was going to create all these awesome new, “busy” jobs for people who might not want to do crossword puzzles all day. While I know the Post Office has been an independent agency of the U.S. government since the 1980s, something doesn’t seem right here.

Hmm, Wall Street had no problem getting some funds to keep them in business, to have people “work” in a manner that continues to cause great damage to our economy. What’s the government’s plan of action for our modern-day Pony Express?

Sarah Hollenbeck reports on NBC-2 TV, Fort Myers:

The United States Postal Service faces a $7-billion deficit this year. Closing local post offices and cutting one day of delivery service have both been suggested to save money, layoffs have not. But a decline in mail volume has led to some paid employees spending entire days doing nothing at all.

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