Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Category Archives: Economics

The Postmaster General’s Challenges

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In his report to a Senate subcommittee Postmaster General Patrick Donahoe spelled out clearly why the U.S. Postal Service can’t make any money: too many cooks in the kitchen. Hamstrung and limited by rules and “stakeholders” with differing and often competing agendas, what’s remarkable is that the postal service isn’t deeper in the hole.

Heaven knows, he’s trying. Through agreements finally reached with the letter carrier unions, he has been able, over the past two years, to eliminate 12,000 carrier routes and to consolidate others, saving

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White House to NY: Accept Bank Foreclosure Deal

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New York’s Eric Schneiderman (right) is the only Attorney General who doesn’t like the foreclosure settlement agreed to by the major banks behind the mortgage-backed-securities (MBS) and foreclosure (robo-signing and faked-documents) frauds that helped bring on the economic crisis in 2008. And he is feeling the heat. In exchange for a small fine, the settlement agreement would end the years-long investigations by New York and other states into the frauds, and would prevent them or any of the investors hurt by the frauds from ever bringing additional charges in the future.

But Schneiderman’s investigation into the shady practices behind the development and sale of MBSs isn’t complete, and signing off on such an agreement now would end his efforts and forever protect the banks from further public exposure to their back office practices.

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Bank of America Blames Stock Price Decline on Analyst

The Emperor's New Clothes, by Hans Christian A...

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When Henry Blodgett explained that the reason for the decline in the price of Bank of America’s stock was because Wall Street thinks that Bank of America is worth less—much less—than what the bank itself thinks, bank spokesman Larry DiRita responded, “Mr. Blodgett is making exaggerated and unwarranted claims…[and that] as of June 30th, our tangible book value per share was $12.65.” At the time, BofA stock was selling for $6.42 a share.

The bank’s sharp retort caught Blodgett by surprise:

I was eating a tuna sandwich when I saw the news clip across Bloomberg TV. I almost choked.

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Bernanke’s Invisible QE3 and the Austrian School

Wall Street

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Wall Street professionals’ expectations are modest over Federal Reserve Chairman Ben Bernanke’s highly anticipated remarks at the Jackson Hole symposium this Friday. Unlike last year when the chairman announced the start of his program to purchase government securities in order to keep the economy from slipping into a recession and possibly deflation, known as Quantitative Easing II (QE2), his options now are much more limited. The anticipated bounce in the economy has fizzled, inflation is increasing, the banks are stuffed full of reserves but few are borrowing, and interest rates

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SuperCommittee Member Rep. Fred Upton Is Flexible

Rep. Fred Upton (R-Mich.) made his position on cutting entitlement spending as part of the SuperCommittee’s attempt to reduce the deficit perfectly clear, sort of: “It’s awfully hard to tell someone…who might be 82, that they’ve gotta go back to work, because their benefits are gonna be chopped. That’s not going to happen. We’re not gonna allow that to happen.” Of course, no one is suggesting any such thing.

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Some Unintended Consequences of Raising CAFE Again

New fuel economy label in 2008 shows estimated...

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With the President’s announcement of higher mileage requirements—to 54.5 mpg on new cars and trucks sold in the United States by the year 2025—came the usual promises of less dependence upon foreign oil and reduced “greenhouse gas” emissions. Said the White House blog, “Taken together, the standards established under this Administration span Model Years 2011-2015. They will save consumers money, reduce our

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Private Contractors Feeding at the Public Trough

The latest ranking of contractors providing services to the federal government reveals that at least nine of the top 10 are tied to the Department of Defense and took in nearly $70 billion of the government’s money in 2010. Leading the pack as it has for the past 17 years is Lockheed Martin, with $17 billion, followed by Northrop Grumman, Boeing, Raytheon, and General Dynamics.

The top 27 contractors each received at least $1 billion in contracts from the government last year, with Number 100 on the list, Teledyne, getting $170 million. This reflects the enormous growth of government spending in general, and on outside vendors in particular, growing from $207 billion in 2000 to

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Ending Ethanol Subsidies Won’t Reduce Food Costs After All

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The recent attempt to terminate both the ethanol subsidies of $.45 a gallon and the $.54-per-gallon import tariff on Brazilian sugar-based ethanol by the Senate failed because it was an amendment attached to a bill that was doomed to failure anyway. Both will cease on December 31 automatically, ending 33 years of subsidizing the ethanol industry; however, food prices are likely to stay high anyway. The main reason is neither the subsidy nor the tariff, but the mandate by the government requiring

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Everything’s Made in China? Not Quite.

Image representing iPhone as depicted in Crunc...

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An analysis just released by the Federal Reserve Bank of San Francisco concludes that most of what Americans spend on consumer goods, electronics, clothing, sneakers and the like, stays in America. Surprisingly little comes from China after all. Say the authors:

Goods and services from China accounted for only 2.7% of U.S. personal consumption expenditures (PCE) in 2010…Chinese imports make up only a small share of total U.S. consumer spending…

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Closing the Gold Window: Remembering the Nixon Lie 40 Years Ago

President Richard M. Nixon speaks on the telep...

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Against the backdrop of price inflation reaching six percent, the unemployment rate touching five percent, the increasingly large holdings by foreign governments of dollars (that at the time were convertible into gold upon demand) and his desperate need to get reelected, in August, 1971 President Nixon conferred with his economic advisers about how to solve the inflation problem without taking any blame for it.

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Good News: North Dakota’s Economy Doing Just Fine, Thank You

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Finally, some good news about the economy, from an unlikely place: North Dakota. CNNMoney reported that while the United States’ economy grew at less than 3 percent last year, North Dakota’s grew by more than 7 percent. And with national unemployment over 9 percent, in North Dakota it is just over 3 percent (and hasn’t touched 5 percent there in more than 20 years).

The prime driver is the discovery of

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Warren Buffet Wants his Friends’ Taxes Raised

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Warren Buffett, better known as the Oracle of Omaha, earned $40 million last year and paid $7 million of it in taxes. But in his editorial in the New York Times on Sunday, he claimed that he doesn’t think he’s paying enough, and neither are his friends. So he’s asking the SuperCommittee to stop “coddling” him and his friends, and raise their taxes as part of the deficit reduction scheme they are hatching.

He began by suggesting that

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The Fed: QE3 is All but Certain

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The latest report from the Board of Governors of the Federal Reserve System confirms what every sentient being already knows: The economy is in the dumper, with little improvement expected. The report used words like “considerably slower,” “deterioration,” “flattened out,” “weak,” and “depressed” to describe current conditions, and it even noted that excuses such as bad weather and the earthquake in Japan “appear[ed] to account for only some of the current weakness in economic activity.” (Emphasis added.)

In other words, the Board had a BFO (blinding flash of the obvious) and

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Physician Sentenced to 20 Years for Medicare Fraud

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The case brought by the Department of Justice against Dr. Rene de los Rios of Miami, Florida, succeeded not only in sending the physician to jail for 20 years for systematically defrauding Medicare, but also in exposing the dark underside of the entire Medicare system itself. The sentence meted out by U.S. District Judge Joan Lenard was the second most severe sentence handed out to any doctor in South Florida, known as the “epicenter” of Medicare fraud. The dubious honor of the most severe sentence is held by

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Why is Gold Over $1700 an Ounce?

A London Good Delivery bar, the standard for t...

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With gold bouncing up from $1,668 an ounce on Friday, August 5 to $1,778 on Tuesday, August 9, it was the biggest three-day rally since the start of the great recession in 2008. At the same time, the equities markets were falling precipitously, losing over 600 points on the Dow on Monday alone. What is the connection?

The easy answer is fear, loss of confidence, and

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Nine of 12 Super Committee Members Named: Tea Party Marginalized

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Senate Majority Leader Harry Reid was the first to announce his three nominees to the “Super Committee” created by the recent debt ceiling increase, and all three fit the mold of big-spending liberals: Senators John Kerry (D-Mass.), Max Baucus (D-Mont.), and Patty Murray (D-Wash, right.), the latter of whom will also serve as co-chairman of the committee. Reid observed of his picks:

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Standard and Poor’s Extends, Defends and Explains Its Downgrade

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In a series of expected additional press releases, the Standard & Poor’s credit rating agency is expanding its downgrade of debt securities tied to the now-lower-rated sovereign debt of the United States, including Israeli bondsFannie Mae and Freddie Mac, and “pre-funded” municipal bonds. Other credits tied closely to U.S. sovereign debt are also expected to be downgraded shortly, with only a few exceptions.

Most municipal bond issues are not pre-funded with U.S. Treasury securities, and so they aren’t likely to

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S&P Downgrade: Does It Portend a Death Spiral?

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Standard and Poor’s was blunt in its assessment of America’s deteriorating financial condition when it announced Friday night that it was cutting its credit rating on United States’ Treasury securities from AAA to the second-tier AA+, with a negative outlook. S&P said:

Progress [in] containing the growth of public spending, especially on entitlements, or on reaching an agreement on raising revenues, is less likely than we previously assumed

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Corzine to Replace Geithner as Treasury Secretary?

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Despite protestations from Jon Corzine, former New Jersey governor, that he has no interest in taking Treasury Secretary Timothy Geithner’s place if Geithner decides to step down, Corzine did manage to have a clause put into his company’s bond offering prospectus that if he did accept the position, bond holders would be paid an extra one percent interest, just in case.

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U.S. Credit Rating Still at Risk

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Moody’s announcement on Tuesday that it would retain its AAA rating of U.S. government sovereign debt as a result of the debt-limit agreement came with a warning: the government must rein in spending or risk a downgrade anyway. The deal “virtually eliminated the risk of [a] default,” but the agency warned that “Should the new mechanism put in place by the Budget Control Act prove ineffective, this could affect the rating negatively.” Moody’s added that it wanted to see the United States lower its debt-to-GDP ratio, now approaching 100 percent, to around

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2020 Bob Adelmann