Someone Passed All This Legislation! Wasn't It President Obama?

 The article below reflects very much how I feel about President Obama's accomplishments since taking office. He may not have accomplished everything on everyone's to-do list, but he certainly has tried.   And he has indeed done more than any president in memory in a very short time. Below is a list of actual accomplishments. It's pretty impressive!
   . . . June



Too much irrational thinking about President Obama
 The Jackson Sun  August 29, 2010 

  "What are the underlying motivations causing so many Americans — partisan politicos aside — to blame President Barack Obama for every problem short of indigestion? Has the guy done anything right? Has he done what he said he would do when he ran for office? Has he done anything?

Hmmm, let's see. Based on a number of media reports, I have compiled a short list:

• Passed health care reform, which millions of Americans agreed needed to be done and was a major plank in his campaign.
   
• Passed a $789 billion economic stimulus package that saved millions of jobs and has been regarded a success by many economists who generally know a lot more about the economy than you and I do.
   
• Bailed out the auto industry, which saved more than 1 million American manufacturing jobs and enabled General Motors to return to profitability.
   
• Supported a Wall Street bailout that, had it not been completed, would have led to an economic depression like the one in the 1930, according to former Treasury Secretary Henry Paulson.
   
• Passed the Wall Street reform and Consumer Protection Act to bring some order and new safeguards to the nation's financial system and consumer protection rules.
   
• Ended the U.S. combat mission in Iraq and withdrew combat troops as he promised he would do during the election.
   
• Won confirmation of two women, including the first Hispanic, to the U.S. Supreme Court with minimal political partisan bickering.
   
• Began phasing out the prison at Guantanamo Bay as he promised during the election.
   
• Deployed additional troops to Afghanistan that military leaders have been requesting for years.
   
• Removed many restrictions on embryonic stem cell research — currently stymied by a ruling from a conservative activist federal judge.

Read More . . . .

Hindenburg Omen Tripped. Does this mean Stock Market Crash?

This is my first taste of the Hindenburg Omen. According to the article below, it's a technical indicator which foreshadows a stock market crash. Whether it works in actual fact, I think I'm very tempted to be out of the market for the moment.


  . . . June

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Yes Folks, Hindenburg Omen Tripped Again - MarketBeat - WSJ
"By Steven Russolillo

The Hindenburg Omen reared its ugly head late last week, signaling more doom and gloom as stocks plod along amid the dog days of summer.

The Omen, a technical indicator which uses a plethora of data to foreshadow a stock-market crash, was tripped again on Friday, marking the second time since Aug. 12 it has occurred. (It also came close on Thursday, but one of its criteria fell short.)"

The latest trigger has prompted the Omen’s creator, Jim Miekka, to exit the market. “I’m taking it seriously and I’m fully out of the market now,” Miekka, a blind mathematician, said in a telephone interview from his home in Surry, Maine. “I would’ve probably stayed in until the beginning of September,” depending on how the indicators varied. “That was my basic plan, until the Hindenburg came along.”

The Omen has been behind every market crash since 1987, but significant stock-market declines have followed only 25% of the time. So there’s a high likelihood that the Omen could be nothing more than a false signal.

But that isn’t stopping Miekka from taking any chances, especially as September, typically the market’s worst-performing month, sits only one week away.

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Fees Levied On The Mortgage Industry Could Cost You More

According to the article below, the government may levy fees on the mortgage industry which will likely be passed along to the borrower in return for federal backing of mortgage loans. Sounds like business as usual.

   ... June


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Reform of Fannie and Freddie Could Translate to Higher Costs For Borrowers

By Michael Kraus on August 24, 2010

Fairly interesting article by Deborah Solomon and Nick Timiraos in the Wall Street Journal today that says the government may levy fees upon the mortgage industry (which will likely be passed along to the consumer) in return for federal backing of mortgage loans.

Under the current system, mortgages are originated by mortgage companies, brokers, loan officers, etc.  These mortgage are then sold to investors or securitized and sold to investors.  Right now, Fannie Mae and Freddie Mac are pretty much the only investors who are purchasing mortgages.  Together they back more than 90 percent of single family mortgages in the United States.

Fannie Mae and Freddie Mac were seized by the government in 2008 in order to avoid their financial collapse.  Since that time the Obama Administration has dumped $150 billion into the GSEs, and has pledged an unlimited amount of capital to backstop their losses.  The Congressional Budget Office estimates the total bailout could cost around $400 billion, and many analysts estimate the bailout could cost more, with a worse case scenario of almost $1 trillion.  In a nutshell, U.S. taxpayers back almost all of the mortgages in the country (congratulations, you’re an investor in the housing market!).

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What Effect Will Credit Card Restrictions Have?

 It's finally the turn of the consumer to have some say in how their credit cards are managed - Or is it?  It seems to me that the credit card company have already implemented lots of changes in their favor while they waited for the changes to take place. It's for sure, the credit card companies aren't planning to suffer.
   . . . June


New credit card restrictions take effect - CNN.com 

"Washington (CNN) -- New rules designed to protect credit card users from 'unreasonable late payment and other penalty fees' come into force Sunday as a result of the Wall Street reform bill.

The rules block credit card companies from charging more than $25 for late payments except in extreme circumstances, prevent them from charging customers for not using their cards, and requires them to reconsider rate increases imposed since January 1, 2009, according to the Federal Reserve, which approved the regulations.

They are the final provisions of federal legislation that placed new restrictions on credit card interest rates and fees, completing the most comprehensive overhaul of the credit card industry in history.

The banking industry has already made changes in response to the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, a spokesman said Sunday."

"The industry has moved swiftly to implement all of these changes and the final piece of the puzzle is now in place," said Kenneth Clayton of the American Bankers Association.
"It will still take some time before we can really see how the landscape has changed, but it is clear that consumer choice and control will ultimately drive further changes in the marketplace," he said in a statement.

The Fed's rules could result in lower interest rates for consumers
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Ben Bernanke Says Feds Will Boost Economic Recovery

US Federal Reserve chairman Ben Bernanke 

So the Federal Reserve is going to help prop up the soft economic recovery. That's OK, since they plan on using some of the proceeds from the mortgage securities. I guess it's going to take a while longer before everyone can breathe a sigh of relief. It took a while getting here and it's not over yet. Below is an article from the BBC News on their reaction to this proposed change.

June

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US Federal Reserve Takes Step To Boost Recovery
 10 August 2010 Last updated at 16:24 ET

US Federal Reserve chairman Ben Bernanke The Fed said economic recovery was likely to be "more modest" in the short term

The US Federal Reserve has taken a step towards boosting economic recovery, by saying it will use proceeds from its investments in mortgage securities to buy longer-term government debt.

There had been speculation that it may choose to revive the "quantitative easing" (QE) scheme, pumping in more money to prop up a softening recovery.

The option it has taken has been dubbed "QE lite" by some commentators.

The Fed also kept interest rates unchanged at between zero and 0.25%.

Stock markets recovered some of their earlier losses after investors reacted positively but still cautiously to the news.

The Dow Jones index, down about 100 points before the Fed announcement, was only 15 points lower shortly afterwards. It closed down 54 to 10,644.

US government bond prices also rose.

Constraints on spending

In a statement, the Fed said the pace of recovery had slowed in recent months and is likely to be "more modest in the near term than had been anticipated".

"Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit," the central bank said.

Some analysts say the move could mean that money can be borrowed cheaply for a longer period of time.

"The Fed's investments in longer-dated Treasury debt should... lower mortgage and other borrowing rates," Stephen Gallagher and Aneta Markowska from Societe Generale commented.

Others believe the Fed will have to take further steps in the coming months.

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Should the Fed take more steps to boost the economic growth in the coming months?  Maybe lower the interest rates?


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June