Not a lot of fun getting hit in the face with a blast from a leaf blower. Even less fun when you realize what must be hanging around in the residue from the fall when you eye blows up like a balloon inside of three hours from an infection and not from mere trauma. Washed the damn thing out as well not five minutes after the event. From now on I wear gloves when working in the garden.
There was a wonderful little vignette in the Times today about the N.Y. City A.G. bringing an action against some firm for improperly charging clients for loans made. Sounded like a good idea given the reported facts but the funny part was that the authorities just realized that they could bring such an action only because of Dodd/Frank. What a kick and where is Nancy Pelosi when you need her?
Somebody actually read this 2000 page piece of rubbish unlike Obama Care which nobody read. Of course they read it sometime after it became law but, hey, that's the way we do things these days. Onward and upward.
Meanwhile, Over There, our friends were quite pleased to have announced that for the first time in quite some time the Union has met it's target for deficits coming in overall at 3% which had been the bogie at the very formation of the currency union but hardly ever met--or for that matter enforced--throughout these many years. Of course the manner of achievement, the draconian cuts in governmental spending which has led to near-economic collapse in some states cannot be overlooked. Nor can the identity of the one member that stands far apart from complying with the fiscal accords; yep, you guessed it, France again. It's all great fun, really, but it is not far from the truth when one says that European recovery cannot be achieved without France and France is in a bad case right now. Of course, she is well-capable of sending one of her leading economists on the road to hump his book proclaiming the joys of a wealth tax under the adoring eye of Little Paulie, ignoring of course that solely as a result of France's tax laws, there are more Frenchmen in London than in Lyon; a perfect reversal of the situation of 6-8 years ago when the Brits were moving in droves to France. Memo to Jacob/Jack: taxes do matter.
Another item in the fun department that occurred during my recovery was the Argies getting there first shot before the Supreme Court in a case that only a lawyer could love. You might remember that they got the crap knocked out of them in the Second Circuit on really what was a contract law decision with an overlay of sovereign immunity and nonsense regarding the "safety of the system" if the plaintiffs should prevail. That decision is under review as a writ of Ceritorari has been asked to be granted but in putting the cart before the horse, the Supremes overheard arguments as to the lengths the creditors could go to seek out and find Argentine assets of any size, shape or color anywhere in the world. As I said, it's a wonderful case for lawyers only, involving the Sovereign Immunity Act of 1976 and vast reaches of international conflict of law issues but that does not mean it is unimportant. Indeed it is very important, but why decide this if you haven't decided to hear the argument in the case which brings this to the fore? Maybe because Cert will not be granted meaning the Argies lose? Or signals are being sent to the tune of, "common guys, settle this." We shall soon know. Don't forget about it. As Joe Biden would say, "This is a big ^%$*)*^ case."
Showing posts with label supreme court. Show all posts
Showing posts with label supreme court. Show all posts
Thursday, April 24, 2014
Tuesday, October 8, 2013
A FAR, FAR BETTER TUESDAY
Indeed, it was a wonderful Tuesday. Yesterday evening, the Supreme Court of the United States announced their refusal to hear Argentina's appeal of the 2nd Circuit's decision in the suit brought by Aurelius Capital and Elliot Management, holders of unrestructured Argentine debt subject to a pari passu clause under New York law. While the Fat Lady hasn't begun to sing, she is certainly warming up in a terrific victory for the rule of law. The Argies will exhaust every legal means to get a rehearing but my odds are very long against this happening. The odds are almost impossible. As I have admitted previously that my dislike for Argentina is surpassed only by my hatred for Venezuela, there is really no question that this is the proper decision and one that was certainly expected. When the final effort on the Argies part comes to nought, the really interesting thing will be watching the plaintiffs trying to bugger every Argentine payment option around the globe in order to cash in...if it comes to that. They have superb counsel who, while not objecting in principle to collecting enormous fees, will no doubt at some point nothing more can be done and a settlement is in order. We shall see.
Of course, what of the claims (to be expected) of the plaintiffs that Argentina has destroyed its credit forever? And of the howls from those creditors who settled for 20 cents on the dollar as the hold-out walk away with a huge windfall? I regret to say that in the first case, once the dust has settled, some fool will be prepared to lend to Argentina once again if the yield is deemed sufficient despite the fact that this must be God-only-knows how many times Argentina has defaulted on some debt obligation in the past 150 years. As for the second, here's a dirty little secret: during the Latin American debt crisis c. 1980, numerous lenders (mostly smaller banks) stood firm against restructuring and were quietly repaid--either straight up or by having their obligations purchased by banks who had a lot more to lose despite assurances that this would never occur or that all those involved had participated in the end. As the world famous financier of years past, Rocky Balboa once put it, "Ya do what ya gotta do."
And so we come to the present day. We have our government shutdown. Will we have a default? I really don't know but I think not. But if we do, what happens? Don't know that either, but I do know that ever nation that has been a dead beat in the past, at some point borrowed money again. Or to put it another way, you got your Argentina and you got your United States. Who's bond do you buy?
Visiting grandchildren starting tomorrow at 0 dark 30. Might be a bit spotty for the next few days.
Friday, June 29, 2012
GOBSMACKED
I can't quite get over what occurred yesterday. The biggy for us on this side of the pond was the affirmation by the Supreme Court of the constitutionality of Obamacare. That didn't really surprise me but the manner in which it came about certainly did and for us the consequences will, I am afraid, be grave. No one really knows for sure, but rumor has it that the position taken by Chief Justice Roberts came about at the last minute. I shall not comment on the outcome other than to say the majority opinion is tortured both in law and in logic. The dissent is brutal and direct: rarely if ever has a Chief Justice be subjuected to such withering language. The astounding part of the the entire process is that the case was decided on an argument not made; the Chief essentially re-wrote the government's brief to decide the case in the manner which he did. And it is here that danger lurks.
The Chief obviously had two things on his mind, the case before him and the political result that would have occurred if Obamacare were to be struck down. The Leader and his minions, fully expecting a defeat or so it appeared, had already been gearing up attacks on the Court and personally attacking individual Justices claiming that the Court had become "purely political" in it's scope. As The Leader is the darling of the press the strategy was certain to be widly distributed.
The Chief Justice seems to have been faced with a choice; decide the case in a conventional fashion and almost certainly insert the Court into the Presidential campaign or decide the case in a manner which would insulate the Court, at least in this instance, from ongoing political attacks. He chose the latter but in so doing, IMHO, has confirmed precisely the result he wished to avoid; the Court is a political institution subject to the pressures faced by all politicians. The result will be that the question of Obamcare will be decided in November as it should be, but I am greatly afraid no good will come of this. All of us need icons and one of them was this Court. No longer. Unfortunately, we have lost another; the Federal Reserve, whose independence can no longer be taken for granted in the face of its desperate attempt to solve structural and political issues even when it has been proven over and over that monetary responses to structuraal--and political--absurdities. The November election, as I have said oft before, is one of the most important in the history of this nation and will no doubt determine not only the state of this Republic (if we can keep it as Ben Franklin warned) but our position in the world order. We are rapidly running out of options and wisdom seems to have been spent. Best we keep a close eye on Euroland as a window to the future...
...and segueing right along, Angie got wacked by Frankie and the boys down south and boy, did I miss that one...or did I? After a marathon session, Germany agreed to allow the European Stability Fund to lend directly to Eurozone banks (Spain) initially through the sovereign, but when (if?) a Eurozone wide governing body for all banks implemented under the ECB is put in place the obligation will transfe immediately to the banks frreing up sovereign balance sheets to receive additional credit support from the private sector. Yhose assembled also agreed that private lenders would stand pari passu with the official sector. Huzzars all around as the Hun was humbled on the pitch in Poland by the Italians and in Brussels by the same with a bit of help from their friends.
On July 7, Spain will request a 100 billion Euros for their banks (gee, I though all they needed was 65) and work will begin immediately on a new Europe where all banks are governed centrally, economic standards are set and collective debt issuance will be discussed. Clang, clang goes the can down the road.
And as for Frau Merkel. Well, she gave up money already committed that was going to wind up in the banks anyway and good luck getting it back from Spain if things go haywire which they will. As soon as the funds go in the front door on July 7 they will begin exiting out the back door on July 8 and we will find ourselves right back where we started from. I expect to see some stabilizing of the interbank market but do not expect the sovereign debt market to return anytime soon; there is no bid save from central banks. She's back in Germany now under a good deal of fire for "loosing" the argument. Actually, she gave away little and bought a bit of time. Now if there is any honesty among thieves I would expect to see talk among the rating agencies of a downgrade for Germany and if that occurs the Volk will not stand for it. Oh, anybody following Greece?
Anyway, the stock market has convinced itself that the end is just around the corner and stayed was up all day with the DOW closing 277 points to the good. Spain vs. Italy on Sunday. They may agree to draw just to present a united front. Now THAT would be newsworthy
The Chief obviously had two things on his mind, the case before him and the political result that would have occurred if Obamacare were to be struck down. The Leader and his minions, fully expecting a defeat or so it appeared, had already been gearing up attacks on the Court and personally attacking individual Justices claiming that the Court had become "purely political" in it's scope. As The Leader is the darling of the press the strategy was certain to be widly distributed.
The Chief Justice seems to have been faced with a choice; decide the case in a conventional fashion and almost certainly insert the Court into the Presidential campaign or decide the case in a manner which would insulate the Court, at least in this instance, from ongoing political attacks. He chose the latter but in so doing, IMHO, has confirmed precisely the result he wished to avoid; the Court is a political institution subject to the pressures faced by all politicians. The result will be that the question of Obamcare will be decided in November as it should be, but I am greatly afraid no good will come of this. All of us need icons and one of them was this Court. No longer. Unfortunately, we have lost another; the Federal Reserve, whose independence can no longer be taken for granted in the face of its desperate attempt to solve structural and political issues even when it has been proven over and over that monetary responses to structuraal--and political--absurdities. The November election, as I have said oft before, is one of the most important in the history of this nation and will no doubt determine not only the state of this Republic (if we can keep it as Ben Franklin warned) but our position in the world order. We are rapidly running out of options and wisdom seems to have been spent. Best we keep a close eye on Euroland as a window to the future...
...and segueing right along, Angie got wacked by Frankie and the boys down south and boy, did I miss that one...or did I? After a marathon session, Germany agreed to allow the European Stability Fund to lend directly to Eurozone banks (Spain) initially through the sovereign, but when (if?) a Eurozone wide governing body for all banks implemented under the ECB is put in place the obligation will transfe immediately to the banks frreing up sovereign balance sheets to receive additional credit support from the private sector. Yhose assembled also agreed that private lenders would stand pari passu with the official sector. Huzzars all around as the Hun was humbled on the pitch in Poland by the Italians and in Brussels by the same with a bit of help from their friends.
On July 7, Spain will request a 100 billion Euros for their banks (gee, I though all they needed was 65) and work will begin immediately on a new Europe where all banks are governed centrally, economic standards are set and collective debt issuance will be discussed. Clang, clang goes the can down the road.
And as for Frau Merkel. Well, she gave up money already committed that was going to wind up in the banks anyway and good luck getting it back from Spain if things go haywire which they will. As soon as the funds go in the front door on July 7 they will begin exiting out the back door on July 8 and we will find ourselves right back where we started from. I expect to see some stabilizing of the interbank market but do not expect the sovereign debt market to return anytime soon; there is no bid save from central banks. She's back in Germany now under a good deal of fire for "loosing" the argument. Actually, she gave away little and bought a bit of time. Now if there is any honesty among thieves I would expect to see talk among the rating agencies of a downgrade for Germany and if that occurs the Volk will not stand for it. Oh, anybody following Greece?
Anyway, the stock market has convinced itself that the end is just around the corner and stayed was up all day with the DOW closing 277 points to the good. Spain vs. Italy on Sunday. They may agree to draw just to present a united front. Now THAT would be newsworthy
Monday, April 2, 2012
OBAMA CARE
A rare venture into politicoland.
Told you it was important. Today, the Leader, in the presence of two heads of state remarked that the Supreme Court had no right to review an act of a duly elected Congress. Funny, as to the question, I thought that it was exactly for the purpose of reviewing congressional actions that the Supreme Court was established. I must be wrong if The Leader says so. If that's the case why go through all this nonsense. Why not just say something like, "Supreme Court?" "SUPREME COURT?" I don't need no damn Supreme Court!" It would make life so much easier just like "I don't need no damn Constitution!"
Wonder if he has thought of that.
It's Holy Week so we will hear no more from Europe for at least a fortnight which is probably not a bad thing. And so thoughts turn to speculating over whether the recovery in the U.S. is real, whether it can continue on it's own or will the increasingly dreadful numbers out of Euroland finally have a spill-over effect into this hemisphere. I must say, I have never witnessed so many economists and talking heads not only hedging their bets but increasingly refusing to make any bets at all. No more of this, "On the other hand..." stuff at all. I have actually heard a couple of them admit that they don't know. Heady stuff. All I can say is that I don't like the direction of things either here or especially in Europe. The French elections are going to begin to dominate the news headlines in about a week and that outcome could well tell the tale. Remarkably, the left has said such dopey things that Sarkozy may actually be able to pull this thing out. Then again, he is Sarkozy and how does one run against oneself?
Less noticed, even by Americans, is the Mexican election in a few months which is vitally important to us and for which electioneering has just begun. We shall be watching developments to our south over the coming months, keeping in mind that this election will mark probably the successful conclusion to Mexican democratization which really began with Ernesto Zedillo 18 years ago. There are huge challenges facing Mexico no doubt, but they have made great strides. I firmly believe that it is vitally important to the future of the United States that the relationship between the two countries is normalized in the form of a hemispheric partnership which, along with Canada, secures the future for all three nations. Beginning tomorrow, that will become part of our focus.
Told you it was important. Today, the Leader, in the presence of two heads of state remarked that the Supreme Court had no right to review an act of a duly elected Congress. Funny, as to the question, I thought that it was exactly for the purpose of reviewing congressional actions that the Supreme Court was established. I must be wrong if The Leader says so. If that's the case why go through all this nonsense. Why not just say something like, "Supreme Court?" "SUPREME COURT?" I don't need no damn Supreme Court!" It would make life so much easier just like "I don't need no damn Constitution!"
Wonder if he has thought of that.
It's Holy Week so we will hear no more from Europe for at least a fortnight which is probably not a bad thing. And so thoughts turn to speculating over whether the recovery in the U.S. is real, whether it can continue on it's own or will the increasingly dreadful numbers out of Euroland finally have a spill-over effect into this hemisphere. I must say, I have never witnessed so many economists and talking heads not only hedging their bets but increasingly refusing to make any bets at all. No more of this, "On the other hand..." stuff at all. I have actually heard a couple of them admit that they don't know. Heady stuff. All I can say is that I don't like the direction of things either here or especially in Europe. The French elections are going to begin to dominate the news headlines in about a week and that outcome could well tell the tale. Remarkably, the left has said such dopey things that Sarkozy may actually be able to pull this thing out. Then again, he is Sarkozy and how does one run against oneself?
Less noticed, even by Americans, is the Mexican election in a few months which is vitally important to us and for which electioneering has just begun. We shall be watching developments to our south over the coming months, keeping in mind that this election will mark probably the successful conclusion to Mexican democratization which really began with Ernesto Zedillo 18 years ago. There are huge challenges facing Mexico no doubt, but they have made great strides. I firmly believe that it is vitally important to the future of the United States that the relationship between the two countries is normalized in the form of a hemispheric partnership which, along with Canada, secures the future for all three nations. Beginning tomorrow, that will become part of our focus.
Wednesday, June 10, 2009
WHEN I GROW TOO OLD TO DREAM...
It hasn't happened yet but I'm getting close. The Supremes got cold feet and ruined my dream of intervention in re the Great Chrysler Grab. I can see why as the amount involved was quite small and the fall-out would have been quite large. Perhaps they are saving their powder for GM where the same issue might well resurface with a far greater number attached to it. By the by, did you see GM's new CEO's answer to the question, "What do you know about cars?" Answer: "Nothing." OoooooooK.
Anyway, the papers got signed today and Chrysler is now Fiat by fiat. As stated in the past, Fiat does know a thing or two about cars and as the price of oil just passed $71 a barrel they may get lucky trying to sell the little things they have on the shelf. It's really going to be interesting to watch the surviving dealers switch sales pitches from Hemmis, 442s and four-on-the-floor to, "Ah che bella picalina macchina!" But back to finance.
Lots and lots of stuff. The Treasury agreed to allow a bunch of banks to pay back the Tarp money and released the numbers on the latest actions by Citi to become, "One of the world's best capitalized banks," in the words of their CEO, the besieged Mr. Pandit. This is coming about through the conversion of approximately $68 billion in preferred shares into common equity which will give Our Hero's shop about a 38% ownership in the joint that never sleeps. Now do you remember way back a few months ago when I stated that the concept of equity and capital adequacy involving banks was a myth? From a dog's breakfast, Citi, through the magic of accounting has been transformed into "one of the world's best capitalized banks" WHILE NOT ANOTHER DIME OF CAPITAL HAS BEEN ADDED! Thank you Mr. Geithner for making me look good again. God, sometimes I even scare myself! The amazing part is people and especially the media, the watchdogs of society, continue to fall for this crap.
Of course, this has given our girl friend, Ms. Bair, yet another reason to continue to yap. Now her pitch is the management of Citi must be changed to protect the investment of the American taxpayer in the common shares and to put in some, "Good, old credit managers," who she believes to be lacking in Citi's strength. For a change she may be right as Sandy Weil destroyed the great credit culture that had been a hallmark of the Bank for years while putting together a totally unmanageable mismash of businesses and strategies. Ol' Sandy went so far as to fire his fair haired boy, Jamie Diamond, now CEO of J.P. Morgan Chase after Jamie fired Sandy's daughter (who by all accounts was a first class pain in the ass). How delicious is that? But while Shelia may be on to something, the situation was hardly unknown among regulators with a brain which is why the merger with Wachcovia made considerable sense as it would have brought to Citi a solid group of domestic bankers and a large, solid core of domestic deposits which Citi sorely needed...not to mention some handy tax consequences. Of course it was Ms. Bair, in an outrageous act of conflict of roles, queered the deal while ADVISING Wells Fargo as to their strategy for capturing Wachcovia.
That's our girl.
Our Hero had a tough one today as well. Seems as though The Leader and his gang got hammered by the Wall Street guys on the issue to pay guidelines so they sent poor Tim out to tell the press that the administration was no longer thinking of proposing anything and that they would simply punt it over to Congress. Bad hair day all around. Of course this gives Barney Frank the ball but now the whole thing gets caught in the middle of both houses so it looks like a win for the execs.
The Leader is now telling folks that Congress is going to be under a strict "Pay as you Go" spending restraint--right after he spends all the money in the world over the next few months. This is a charade and a half, but I guess we have come to expect it. The bond market certainly has. Last time I looked the 10 year had ticked up to 3.96%. If summer comes can winter be far behind? Tune in tomorrow. Ciao!
Anyway, the papers got signed today and Chrysler is now Fiat by fiat. As stated in the past, Fiat does know a thing or two about cars and as the price of oil just passed $71 a barrel they may get lucky trying to sell the little things they have on the shelf. It's really going to be interesting to watch the surviving dealers switch sales pitches from Hemmis, 442s and four-on-the-floor to, "Ah che bella picalina macchina!" But back to finance.
Lots and lots of stuff. The Treasury agreed to allow a bunch of banks to pay back the Tarp money and released the numbers on the latest actions by Citi to become, "One of the world's best capitalized banks," in the words of their CEO, the besieged Mr. Pandit. This is coming about through the conversion of approximately $68 billion in preferred shares into common equity which will give Our Hero's shop about a 38% ownership in the joint that never sleeps. Now do you remember way back a few months ago when I stated that the concept of equity and capital adequacy involving banks was a myth? From a dog's breakfast, Citi, through the magic of accounting has been transformed into "one of the world's best capitalized banks" WHILE NOT ANOTHER DIME OF CAPITAL HAS BEEN ADDED! Thank you Mr. Geithner for making me look good again. God, sometimes I even scare myself! The amazing part is people and especially the media, the watchdogs of society, continue to fall for this crap.
Of course, this has given our girl friend, Ms. Bair, yet another reason to continue to yap. Now her pitch is the management of Citi must be changed to protect the investment of the American taxpayer in the common shares and to put in some, "Good, old credit managers," who she believes to be lacking in Citi's strength. For a change she may be right as Sandy Weil destroyed the great credit culture that had been a hallmark of the Bank for years while putting together a totally unmanageable mismash of businesses and strategies. Ol' Sandy went so far as to fire his fair haired boy, Jamie Diamond, now CEO of J.P. Morgan Chase after Jamie fired Sandy's daughter (who by all accounts was a first class pain in the ass). How delicious is that? But while Shelia may be on to something, the situation was hardly unknown among regulators with a brain which is why the merger with Wachcovia made considerable sense as it would have brought to Citi a solid group of domestic bankers and a large, solid core of domestic deposits which Citi sorely needed...not to mention some handy tax consequences. Of course it was Ms. Bair, in an outrageous act of conflict of roles, queered the deal while ADVISING Wells Fargo as to their strategy for capturing Wachcovia.
That's our girl.
Our Hero had a tough one today as well. Seems as though The Leader and his gang got hammered by the Wall Street guys on the issue to pay guidelines so they sent poor Tim out to tell the press that the administration was no longer thinking of proposing anything and that they would simply punt it over to Congress. Bad hair day all around. Of course this gives Barney Frank the ball but now the whole thing gets caught in the middle of both houses so it looks like a win for the execs.
The Leader is now telling folks that Congress is going to be under a strict "Pay as you Go" spending restraint--right after he spends all the money in the world over the next few months. This is a charade and a half, but I guess we have come to expect it. The bond market certainly has. Last time I looked the 10 year had ticked up to 3.96%. If summer comes can winter be far behind? Tune in tomorrow. Ciao!
Tuesday, June 9, 2009
BACK HOME AGAIN IN INDIANA...!
Well, the Hoosier State threw a real spanner in the works. As of 5:00 pm the stay against the Chrysler bankruptcy plan still stands with no clear indication as to how Justice Ginsburg or all of he colleagues will come down on what has been somewhat overlooked as one of the critical constitutional and business issues that has arisen in many a year. The United States has always had one immutable thing that has set it apart from all other nations save perhaps England; the absolute dominance of the rule of law and the consistency with which it has been applied. This has been an enormous advantage over the ages; the greatest advantage perhaps that we enjoy. Individuals of any nation and corporations regardless of their origin stand equal before the bar in this country. No other nation in history can claim this equality. The law has always been fairly and equally applied.
Some weeks ago we joked that Fiat may not understand their relationship with the government of the United States as its relationship with the various governments of Italy have been, shall we say, cozy. This suit, brought by the Attorney General of the State of Indiana on behalf of Indiana government investors against the Chrysler bankruptcy plan is IMHO in the finest of traditions of American jurisprudence. One and all should watch the disposition of this case. It may well prove critical not only in the specific incidence but as to what kind of a system under which we shall go forward. Are we to have a free market society in which the sanctity of contract and the rule of law stand unabated, or will we live under a different understanding of the definition of rights? All societies evolve but not always to the general benefit. Is this one of those moments? We shall see.
$35 Billion in new auctions and refundings this week in the 3, 10 and 30 year maturities. No one seems to be too concerned as to their success but the 10 year benchmark continues to creep upward towards the important--at least from an emotional standpoint--to the 4.00% level.
As this is being written, Oil is well-bid at $70.54 a barrel, up over 2 bucks from the open. Commodities continue to move higher and the dollar in getting crushed. One talking head mused whether these actions might impede the recovery. It would be funny if not so sad. There is no recovery: unemployment is up, the lower advance figure is present only because people now realize the temp jobs number is way up, income levels are down across the board; unemployment has pushed through the 9% level with some Federal Reserve Banks hinting at 10-11.5% by next year. The Leader's plan, after five months has been a failure heading towards a catastrophe with spending out of control and a new czar for some segment of the economy being created daily seeming without any Congressional oversight. Results and improvement need to be shown quickly or confidence, which showed a nice up-tick in March will begin to quickly erode. I fear that this may well be a lost year leaving the country even more vulnerable to exogenous shocks. One hopes one is wrong.
Meanwhile, Our Hero s getting some of his money back as a number of TARP institutions are going to be allowed to repay the advances most of them didn't want in the first place. How nice. But here's a goodie: the TARP funds were allocated by Congress for a specific purpose. The monies to be returned seem to be destined for some sort of "rainy day fund" that Our Hero can use for whatever his little heart desires. Where is Barnie and his "oversight" when you really need it?
Finally, The Leader, Our Hero and their entire mob have apparently decided that the regulatory mechanism presently in place needn't be rejiggered; what we have is ok, what we need is better regulation. So much for Shelia Regina...or is it too soon to announce her demise? Methinks somebody better have a wooden stake close by. This is going to be a hell of a summer.
Some weeks ago we joked that Fiat may not understand their relationship with the government of the United States as its relationship with the various governments of Italy have been, shall we say, cozy. This suit, brought by the Attorney General of the State of Indiana on behalf of Indiana government investors against the Chrysler bankruptcy plan is IMHO in the finest of traditions of American jurisprudence. One and all should watch the disposition of this case. It may well prove critical not only in the specific incidence but as to what kind of a system under which we shall go forward. Are we to have a free market society in which the sanctity of contract and the rule of law stand unabated, or will we live under a different understanding of the definition of rights? All societies evolve but not always to the general benefit. Is this one of those moments? We shall see.
$35 Billion in new auctions and refundings this week in the 3, 10 and 30 year maturities. No one seems to be too concerned as to their success but the 10 year benchmark continues to creep upward towards the important--at least from an emotional standpoint--to the 4.00% level.
As this is being written, Oil is well-bid at $70.54 a barrel, up over 2 bucks from the open. Commodities continue to move higher and the dollar in getting crushed. One talking head mused whether these actions might impede the recovery. It would be funny if not so sad. There is no recovery: unemployment is up, the lower advance figure is present only because people now realize the temp jobs number is way up, income levels are down across the board; unemployment has pushed through the 9% level with some Federal Reserve Banks hinting at 10-11.5% by next year. The Leader's plan, after five months has been a failure heading towards a catastrophe with spending out of control and a new czar for some segment of the economy being created daily seeming without any Congressional oversight. Results and improvement need to be shown quickly or confidence, which showed a nice up-tick in March will begin to quickly erode. I fear that this may well be a lost year leaving the country even more vulnerable to exogenous shocks. One hopes one is wrong.
Meanwhile, Our Hero s getting some of his money back as a number of TARP institutions are going to be allowed to repay the advances most of them didn't want in the first place. How nice. But here's a goodie: the TARP funds were allocated by Congress for a specific purpose. The monies to be returned seem to be destined for some sort of "rainy day fund" that Our Hero can use for whatever his little heart desires. Where is Barnie and his "oversight" when you really need it?
Finally, The Leader, Our Hero and their entire mob have apparently decided that the regulatory mechanism presently in place needn't be rejiggered; what we have is ok, what we need is better regulation. So much for Shelia Regina...or is it too soon to announce her demise? Methinks somebody better have a wooden stake close by. This is going to be a hell of a summer.
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