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Obama Will Err If He Tries To Prove A Nuclear Iran-Palestinian Linkage

Michael Redbourn — Mon, 18 May 2009 11:49:14 +0000

When President Obama welcomes Israeli Prime Minister Benjamin Netanyahu to the White House today, Obama will most likely propose that Israel be a test of Iran’s readiness to halt its pursuit of nuclear weapons.

He won’t put it in such blunt terms of course, but will talk of the supposed linkage that exists between Israel making peace with the Palestinians, and Iran’s nuclear ambitions.

Obama will unsuccessfully try to prove, that there is a connection between an Israeli-Palestinian peace agreement, and Iran’s mullahs giving up their quest for nuclear weapons.

If Obama takes this tack, which is he expected to, he will fail miserably because there is no connection whatsoever between the two issues, and Netanyahu will correctly remain unconvinced.

Obama may then try gentle pressure, which is the most that he can use, but the facts are clear and Obama surely knows them and will respect Netanyahu’s rejection.

Did Iran set out to get nuclear weapons in order to help the Palestinians get a State? Of course not.

Has Iran even faintly suggested that it will halt its pursuit of nuclear weapons if the Palestinians get a State. Never.

Abbas controls nothing, and can hardly order a pizza.

He would lose the West Bank to Hamas in a matter of weeks if Israel were to hand it over to him, and Hamas stated as recently as yesterday that it will never recognize Israel.

So who is Israel supposed to hold peace talks with, and who is it supposed to concede land to?

Where would this new State be, and who would control it?

What is more, even under Abbas’s moderate guidance, Palestinian children are still raised on a diet of hatred in their schools, and specially made cartoons and videos that glorify dying a martyr’s death and others that show Jews drinking babies blood are common place.

There are presently fifty seven Islamic states, but Abbas is recently on record as saying that he will “never accept Israel as a Jewish state”.

Some in the U.S. would like to coerce Israel into some sort of two state deal, simply to see how Iran would respond, since there is not much appetite for either an Iran with nuclear bombs or launching an attack against it at the present time.

Netanyahu is a seasoned politician however, and knowing that Obama cannot force him, he will refuse to allow Israel to be used as a guinea pig.

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More U.S. Cities Are Bulldozing Abandoned Homes

Michael Redbourn — Sat, 16 May 2009 08:18:55 +0000

Why Banks Are Using Bulldozers on Foreclosed Homes | The …

curiouscapitalist.blogs.time.com8/1/11

UPDATED (5:29 PM) Banks have a new remedy for America's ailing housing market: bulldozers. There are nearly 1.7 million homes in the U.S. in some state of foreclosure. Banks already own some of these homes and will …

Council to bulldoze 175 homes in Gateshead – Chronicle News …

www.chroniclelive.co.uk12/6/11

YET more families are being forced from their homes as Gateshead Council flattens a third housing estate.

The growing number of abandoned properties across the country has caused property values and tax revenues to drop substantially, which in turn has led to fewer buyers and a growing number of vacant properties.

As of March 31, about 4 million homes had been empty for at least three months, a higher figure than in 2008, and about 3% of all U.S. homes.

Many cities and States, are themselves struggling with potential bankruptcy, and they’re finding it difficult to pay the firemen and policeman who are expected to deal with the increasing number of abandoned homes.

All is not doom and gloom however, and an innovative solution is now rapidly spreading across the country which entails local governments bulldozing abandoned properties, and using the newly reclaimed land for parks and playgrounds.

It’s a seemingly win-win situation, because it not only pleases local residents, but also creates jobs, and the icing on the cake is that the federal government is funding the action.

Last summer, Congress allocated $3.9 billion in emergency funds for cities to acquire and rehabilitate foreclosed properties, and a further $2 billion was assigned after Cleveland and other cities lobbied Congress.

In fact, Cleveland, which has over 10,000 abandoned homes, says it will use more than half of its $25.5 million stabilization fund to demolish more than 1,700 houses.

In addition to Cleveland, Cincinnati, Detroit, Minneapolis and Youngstown all say they have plans to use at least one-third of their neighborhood-stabilization funds for demolition.

Housing supply presently stands at about nine months, which is almost double the historic level of around five months, and approximately one in four home-buyers is in arrears on their mortgages, both of which sadly suggest the appearance of more and more abandoned homes, but happily, more jobs and more parks and playgrounds.

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Ten US Banks Needs A Total Of $75 Billion

Michael Redbourn — Thu, 07 May 2009 22:25:59 +0000

The Three Biggest Lies the Government Is Telling You by Charles …

lewrockwell.com1/27/12

So I have chosen to focus on lies about each: the Federal Reserve, the orchestrator of monetary policy; the U.S. budget, the accounting of government fiscal policy; and a few of the Empire's war lies. I am sharing just a … The World Bank gets almost all of its money by way of the International Bank for Reconstruction and Development (IBRD),( also not a bank), which gets its money from taxes, the largest share coming from the American people. The IBRD also sells …

In defense of capitalism | RedState

www.redstate.com1/12/12

So all you people defending Mitt Romney's corporate activity as unassailable because by God the business of America is business and what not, remember he once made clear he didn't much care for you guys. …. (Actually it sounds quite a bit like what happened to the banks. …. I have said for months that Rush, Beck, Hannity even Palin keep telling us what our candidate should look like and then we have one and they won't put their money where their mouths are. …

The just released government’s “stress-test” results suggest that ten of the nation’s nineteen biggest banks will need a total of around $75 billion in new capital in order to withstand losses if the recession worsens.

According to the tests, some of the largest banks are stable, whilst others will need billions more in capital.

Meanwhile, government officials are stressing that the banking industry is still viable in spite of its vulnerability, but concur that it will need massive injections of capital if there’s to be an economic rebound.

The official line is, that none of the banks will be allowed to fail, and that it’s hoped that the tests will restore investors’ confidence, that not all the nation’s banks are seriously weak, and that those that are can be strengthened.

Kevin Logan, who is chief U.S. economist at Dresdner Kleinwort said, “Looking at the big picture, you can say that things aren’t so bad for the financial industry as a whole. The banking industry is not going to make a lot of money going forward, and that’s a dilemma for keeping banks solvent and getting them lending”.

The ten banks that need more capital, have until June 8th to develop a plan and to have it approved by their regulators, and analysts say that the test results sketched an encouraging but cautious picture of the banks.

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Two New Plans Announced To Help Homebuyers

Michael Redbourn — Wed, 29 Apr 2009 10:08:16 +0000

The Obama administration just announced two new programs, that it’s hoped will help homebuyers who are experiencing problems paying their mortgages.

The first program, which should be up and running within a month is intended to help borrowers that have second mortgages stay out of foreclosure, and it will make cash amounts up to $12,000 available to servicers, investors and borrowers who modify loan terms, and a government spokesperson said that as many as a two million participants in the mortgage-modification program may be eligible for the second-lien assistance.

An example of how the plan would work, would be borrower who had a $250,000 interest only, first mortgage and was paying 6% interest. If the housing expenses were equal to 40% of the borrowers income, then the government would pay $2,625 per year, for five years in order to reduce the payments. Moreover, if that same borrower also had a $43,942 second mortgage and was paying 8.6% interest, then the government might, and I say “might”, pay one half of the $2,336 annual cost for five years.

The government’s second plan, is intended to renew interest in the Hope for Homeowners program, which until now has attracted very little enthusiasm from either borrowers or lenders. The program is primarily aimed at borrowers who owe more on their mortgages than their homes are worth, and to make the plan more attractive, the government will now provide a $2,500 incentive fee to loan servicers, and also require them to consider the plan when reworking a mortgage.

Overall reaction to the plans seems favorable, with Laurie Goodman who is an analyst at the Amherst Securities Group LP saying, “The new measures may ease mortgage investors’ concerns that the biggest banks and servicers would be tempted to rework too many loans under the program, in order to bolster their home- equity portfolios. Certainly, it appears that the Treasury has listened to first-lien investors and the announcement goes a very long way toward addressing their objections”.

Treasury Secretary Timothy Geithner said in a statement, “Ensuring that responsible homeowners can afford to stay in their homes is critical to stabilizing the housing market, which is in turn critical to stabilizing our financial system”.

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Bailout recipients pay lobbyists almost $10 million.

Michael Redbourn — Thu, 23 Apr 2009 06:06:03 +0000

The top 10 recipients of the government’s $700 billion financial bailout plan (TALF) paid lobbyists around $9.5 million during the first three months of this year.

GM (General Motors Corp.) which just announced that it will most likely default on a $1 billion bond payment that’s due June 1, spent $2.8 million on lobbying in the first quarter of 2009.

GM has already received $13.4 billion in government loans and is pushing for an additional $5 billion.

Other bailout recipients that spent more than $1million in an attempt to influence future government decisions were;

A.I.G – which has already received $70 billion
Citigroup Inc. – 45 billion
JPMorgan Chase & Co. – $25 billion
Bank of America Corp., received $5 billion and spent $660,000 on lobbying which is 20% down from the last quarter of 2008.
Wells Fargo & Company, $25 billion in bailout money, and $700,000 on lobbying.
Goldman Sachs, received $10 billion and spent $670,000
Morgan Stanley got $10 billion and spent $540,000
U.S. Bancorp got $6.6 billion and paid out $170,000
PNC Financial Services Group, received $7.8 billion and spent $135,000 which is almost double its last quarter’s lobbying costs.

The companies in question deny using bailout money for lobbying, but seven of them spent more attempting to influence the government than they did in the last quarter of 2008, and Craig Holman of the watchdog group Public Citizen said “It’s completely unjustifiable. They say they’re not using public money for these purposes, but in effect these companies are steering taxpayer funds to lobbying, and campaign contributions”, and added, “What AIG’s reporting is, in fact, influence peddling”.


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Bill To Limit Credit Card Increases To Be Advanced
Michael Redbourn — Tue, 21 Apr 2009 09:46:05 +0000
Although the Federal Reserve finalized new regulations that will limit various credit-card rate increases last December, the rules won’t come into effect until July 2010, and there is now mounting pressure to implement the regulations at a much earlier date.
Not surprisingly, the banking industry says that both the White House and Congress should wait for the Fed’s new rules to take effect before taking any additional action, and Edward Yingling, who is president of the American Bankers Association, said last Sunday, “The banking industry understands the concerns about credit cards, but the administration should fully recognize the impact of the Federal Reserve Board regulation, which is one of the strongest consumer protection regulations ever adopted. As we go forward we need to be careful about piling on rules that very much may have the impact of restraining the availability of credit”.





Democratic lawmakers have already begun advancing legislation that would limit certain credit card fees and other practices and Larry  Summers, who is scheduled to meet with the heads of several of the largest U.S. credit card issuers at the White House on Thursday, recently said on NBC’s ‘Meet the Press’, “The president is going to be very focused, in a very near term, on a whole set of issues having to do with credit-card abuses”, and then added, “their abuses include charging consumers extraordinarily high rates that they wouldn’t have paid if they knew what they were getting themselves into”.
Summers’s comments were also underlined by White House spokeswoman Jen Psaki who said, “Addressing abuse in the credit card industry and standing up for consumers is a priority for the president and his economic team, and we look forward to working with Congress on these issues”.
Whereas banks claim that market conditions and changes in borrowers’ credit scores necessitated the increases, consumer advocates want new legislation that would not only limit rate increases on existing balances, but would also require credit card companies to provide more information on their rates, and they are particularly critical of banks that raised interest rates whilst receiving federal bailout funds.






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Several Banks Are Preparing To Repay Taxpayer Money
Michael Redbourn — Mon, 20 Apr 2009 12:32:53 +0000
Rahm Emanuel, who is the White House chief of staff recently said on ABC’s, “This Week” program, that he believes, “we will be able to avoid the temporary nationalization of the nineteen weakest of the big banks”, and added that he didn’t envisage that it would be necessary for the administration to ask for any additional funding, since several banks are already preparing to repay loans that they recently received.
Emanuel’s remarks were reinforced by those of Lawrence Summers, who is National Economic Council director, who said on NBC’s “Meet the Press”, “we won’t have to get more money because there’s the capacity to turn to the private market first for firms needing more capital. The government can also deploy if necessary additional taxpayer cash, which is likely be buttressed over time by lenders that are in the strongest position of paying back U.S. money”.
Financial regulators and The U.S. Treasury are presently clashing with each other as to how to disclose the results of stress tests that are scheduled to be released May 4, because several officials are concerned about the potential damage that could be caused to the weaker institutions if it’s not done correctly.





The intention of the tests, is to clarify which of nineteen companies that include Citigroup Inc., Bank of America Corp., GMAC LLC and MetLife Inc., have enough capital to weather a deeper economic downturn, should it in fact occur, and the Office of the Comptroller of the Currency, and other regulators would prefer that less details about the assessments be publicized, whilst the Treasury would prefer more.
The first of two major dangers that is envisaged, is that if all the banks pass the tests with clean bills of health, then the credibility of the tests themselves will suspect, especially since the economy has worsened since the Treasury announced the tests in February, causing questions to be raised about whether the checks that regulators are presently applying to bank portfolios are exacting enough. The second danger is that if some banks fail the tests, then investors can be expected to punish them, by refusing to invest in them, thereby causing them even greater problems. 
The nineteen financial institutions are all expected to get the preliminary results of the tests as early as April 24, and any banks deemed to be weak, and in need of additional capital will be given six months to raise additional funds. 
President Barack Obama said at a news conference in Trinidad and Tobago on April 19, that “the tests will show that different banks are in different situations”, and he pledged that no new injections of government money would, “go into a black hole where you aren’t going to see results or some exit strategy so the taxpayers ultimately are relieved of these burdens”.






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The Fed’s Top Policy Makers Play Down The Risks Of Inflation
Michael Redbourn — Sun, 19 Apr 2009 09:57:53 +0000
The Vice Chairman of the Federal Reserve, Donald Kohn,  said when Speaking in Nashville on April 18, that, “The Fed is only loaning to sound borrowers, and we are not taking significant credit risk that might end up being absorbed by the taxpayer. For almost all the loans made by the Federal Reserve, we look first to sound borrowers for repayment and then to underlying collateral”.
He was supported by New York Fed Bank President William Dudley, who spoke at the same conference, and said he’s “not worried at all that a doubling in the central bank’s balance sheet to $2.19 trillion will spur inflation”.
The above comments were made in response to recent warnings by several leading economists, who fear that the huge amounts of credit now being extended will soon cause serious inflation.





Former Fed Chairman Paul Volcker, who is now head of President Barack Obama’s Economic Recovery Advisory Board, said recently at Vanderbilt University, “I don’t think the political system will tolerate the degree of activity that the Federal Reserve, in conjunction with the Treasury, has taken. I think for better or for worse we are at a point where the Federal Reserve Act, after all that has been happening in the last year or more, is going to be reviewed”.
Former St. Louis Fed President William Poole, who is now  a senior economic adviser to Merk Investments LLC also expressed concerns during the Nashville conference, saying, “Central bank officials are underestimating the political forces they’re going to face once the recovery starts and we are very vulnerable to an inflation explosion”.






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The ‘Loan Modification Program’ Finally Gets Underway.
Michael Redbourn — Thu, 16 Apr 2009 10:26:52 +0000
The Treasury Department finally announced on Wednesday, April 4th the names of the first six banks that will get massive government subsidies.
The names of banks and what they’ll be getting are;
•	JPMorgan Chase – $3.6 billion in subsidy and incentive payments

•	Wells Fargo – $2.9 billion

•	Citigroup – $2 billion

•	GMAC Mortgage, $633 million

•	Saxon Mortgage Services, $407 million

•	Select Portfolio Servicing, $376 million
The government’s program was announced on February 18th but specific details have only just become available, and the delay caused major frustration amongst housing counselors and distressed homebuyers.
The stated aim of the program is to help as many as nine million borrowers to stay in their homes, and Wells Fargo recently said in a statement, “We view this modification program as yet another incremental opportunity for thousands of homeowners to preserve and maintain the dream of homeownership”.





The two-part plan requires servicers to either reduce monthly payments to no more than 31% of an eligible borrower’s pre-tax income, or to refinance eligible mortgages, even if the homeowner has little or no equity. 
The government has so far allocated $75 billion, to subsidize a part of the payment reduction, and it will also provide tens of thousands of additional dollars in incentives to participating servicers and borrowers.
Servicers will receive $1,000 for each loan modification, plus another $1,000 a year for three years if the borrower stays current. On top of this, the government will provide an additional $500 to servicers, and $1,500 to mortgage holders if they modify their at-risk loans before the borrower falls behind.
Homebuyers will get up to $1,000 a year for five years if they keep up with their payments, and the money will be used to lower their loan principals.
When asked “Where all this money come from?”, Treasury spokesman Andrew Williams answered, “We’re confident we’ll have enough money”.






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Is Inflation Beginning To Raise Its Ugly Head!
Michael Redbourn — Mon, 13 Apr 2009 16:00:29 +0000
By flooding the financial system with money, Federal Reserve Chairman Ben S. Bernanke is seemingly betting that the country’s highest jobless rate in 25 years, combined with the most idle factory capacity on record, will hold down inflation, and it’s textbook Keynesian economics.
If Bernanke’s gamble pays off, then he and the whole Obama administration will be viewed as saviors, but if instead, Milton Friedman’s theories prove correct, and the country lurches from the present financial crisis into rampant inflation, then they will not be so kindly remembered.
Several statements that have recently been made by experts suggest that Bernanke is batting on a very sticky wicket, and many of them have stated on record, their belief that reflation is still in its early stages, and they have pointed out that there are already signs of growing inflation.
John Brynjolfsson, who is the chief investment officer of the hedge fund Armored Wolf, said in a recent TV interview, “We’ve got at least nine innings of reflation ahead of us, ultimately ending with probably double-digit inflation”.
Allan Meltzer who is the Fed historian, and a professor of political economy at Carnegie Mellon University in Pittsburgh says, “If history is any guide, then the effort will end in tears and inflation will get higher than it was in the 1970s”.
Consumer prices rose at a year-over-year rate of 13.3% at the end of the ‘70s, mainly because political pressure from Richard Nixon’s White House prevented Chairman Arthur Burns from removing liquidity as quickly as was then necessary.





Former Fed economist John Ryding, who is the founder of RDQ Economics LLC in New York, concurs with Melzer and says that the central bank will be slow to withdraw all the excess cash it has injected into the financial system. “They pay lip service to inflation being a monetary phenomenon, but they’re too much concerned with the Keynesian explanation of inflation”.
The signs that are said to be pointing strongly to inflation are;
•	A swelling Fed balance sheet that has climbed $1.2 trillion in the past year to $2.09 trillion.
•	M2, which is a broad measure of the money supply that includes checking accounts and money-market mutual funds, rose in the last six months at an annual rate of 14% which is up from 6.3% a during the last decade. 
•	Copper is now at a five-month high and platinum reached a six-month peak on April 9th and there are those that expect oil prices to double from the present price of $52 a barrel now.
Moreover, Ken Mayland, who is  the president of ClearView Economics LLC says he sees, “oil prices increasing to “$80, $90, $100 before the end of next year. All that money is going to find a home”.






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