The clean debt ceiling bill has just passed the House where it got the required majority in a 221 to 201 final vote, with just 28 Republicans voting Yea (and 199 voting Nay) - a vote that has made history with the fewest number of votes from a majority on a bill that passed the House since 1991. It also means means that with a Senate passage assured, the US can now spend away until March 15, 2015. The final breakdown:
- GOP: Yea - 28; Nay -199
- DEM: Yea - 193; Nay -2
- Total: Yea - 221; Nay - 201
Considering that the vast majority of Republicans voted against John Boehner's latest "plan" to do the Democrats' work for them, and pass a clean debt ceiling, perhaps it is time to look for a speaker who represents the interests of more than just a tiny fraction of the party... and the Democrats of course.
Following yesterday's major market drubbing, in which the sliding market was propped up by the skin of Nomura's (and BOJ, and Fed's) teeth at 103.00 on the USDJPY, it was inevitable that with Japan returning from holiday there would be a dead cat bounce in the Yen carry pair, and sure enough there was, as the USDJPY rose all the way back up to 103.70, and nearly closed the Friday gap, before starting to let off some air. However, now that US traders are coming back online, Japan's attempts to keep markets in the green may falter, especially since it only has a couple of ES ticks to show for its efforts, as for the Nikkei which dropped 3% overnight, it has now lost all US "Taper" gains.
A month ago, we showed a chart of median household income in the US versus that just in the District of Columbia. The punchline wrote itself: "what's bad for America is good for Washington, D.C." Today we got official verification that Bernanke's wealth transfer in addition to benefitting the richest 1%, primarily those dealing with financial assets, also led to a material increase in the wealth of one particular subgroup of the US population: its politicians. According to the OpenSecrets blog which conveniently tracks the wealth of America's proud recipients of lobbying dollars, aka Congress, for the first time ever the majority of America's lawmakers are worth more than $1 million.
House Oversight and Government Reform Committee Chairman Darrell Issa leads yet another hearing on the Obamacare implementation and the rollout of Healthcare.gov. The Committee will examine the operational challenges in the development of Healthcare.gov and the extent to which recognized Information Technology (IT) best practices were followed. This one should be fun since its the techies answering the questions - US CTO Todd Park and Deputy CIO Henry Chao answering the questions...
It is now clear why according to the Obama administration there were no glitches plaguing the Healthcare.gov website administering Obamacare: because a whopping six people managed to sign up on the first day it was launched - the same day the government proudly reported previously it had received 4.7 million unique visitors - a conversion factor of, well, Div/0. By the end of the second day: 248 happy participants in a socialized healthcare ponzi scheme. It is also clear why there was nobody happier than the president when the republican party decided to shut down government on the same day as Obamacare was rolled out: because if public attention had focused on the absolute and now confirmed, disaster that the healthcare law's rollout had been, then everyone, not just the Tea Party, would be demanding a substantial delay in Obamacare.
While some have proclaimed the 36,000 enrollment in The Affordable Care Act "a good start," the online marketplaces that Obamacare has become more infamous for have been plagued with problems in the brief two weeks since launch. Politico provides 25 of the most telling and colorful comments made about the "glitches" the online exchanges have faced...
After a two-day, five hundred point Dow Jones rally on nothing but hope that just because politicians are talking, all shall be well, it was the weekend's turn, when the market is conveniently closed, for true Congressional colors to emerge. Sure enough, moments ago Boehner told GOP lawmakers that Obama has "rejected our deal", and that talks with the president have hit an impasse. The WSJ, whose recent poll in conjunction with NBC found Republican approval rating at an all time low (because if the debt ceiling slams shut, the machinery that funds both the "wealth effect" for the 0.01% and the 60 million on foodstamps and disability will cease: or in other words a bust for the ultra wealthy and poor, if not quite so bad for what's left of the middle class) reports that his comments, in a closed-door meeting with House Republicans, put renewed focus on a plan being developed by Senate Republicans to raise the U.S. debt ceiling and fully reopen the government. As we speculated, Obama, smelling blood, has decided to shut down the GOP on all their demands: "On Saturday, a House GOP aide said Mr. Obama had essentially rejected everything offered by House Republican leaders in their proposal." Which is hardly a negotiation. The question is will the GOP, having pushed the country so far, decide to back off now, and let Obama take all the spoils?
If you want to live the high life, you don't have to become a rap star, a professional athlete or a Wall Street banker. All it really takes is winning an election. Right now, more than half of all the members of Congress are millionaires, and most of them leave "public service" far wealthier than when they entered it. Since most of them have so much money, you would think that they would be willing to do a little "belt-tightening" for the sake of the American people. After all, things are supposedly "extremely tight" in Washington D.C. right now. In fact, just the other day Nancy Pelosi insisted that there were "no more cuts to make" to the federal budget. But even as they claim that things are so tough right now, our politicians continue to live the high life at the expense of U.S. taxpayers.
First Congressman Allowed to Read Secret Treaty Says “This ... Hands The Sovereignty of Our Country Over to Corporate Interests”Submitted by George Washington on 06/19/2013 13:40 -0400
Mussolini Is Cheering from His Grave ...
In yet another hit for both the administration's trustworthiness and the hope of some spin-off of the GSEs, the WSJ reports that the Federal Housing Administration's projected losses over 30 years could reach as high as $115 billion under a previously undisclosed stress test. The results, which were not included in the agency's independent actuarial review (because of the potential uproar it might create according to emails), are based on the Fed's stress-test scenario - which seems like something that should (perhaps) have been included. The fact that this data was omitted from the report is "troubling" to House Oversight Committee head Darrell Issa. In its annual audit, the agency disclosed that under current conditions, total losses would exceed its reserves by $13.5 billion over 30 years (with a $943 million loss this year alone). The projected shortfall under a 'protracted economic slump' is $64.5 billion but the 'tail risk' event, that was originally included in earlier drafts, based on the Fed's stress test, is $115 billion. Hardly the upside-encouraging potential that private-finance will be looking for in funding FEDMAGIC.
"Never attribute to malice that which is adequately explained by stupidity"
- Apple Bonds Stick Buyers With $280.6 Million Loss as Rates Climb (BBG)
- Iceland Freezes EU Plans as New Government Shuns Euro Crisis (BBG)
- "Transparent Fed" - Ben Bernanke meets privately with Darrell Issa (Politico)
- Bank of Japan vows market steps to curb bond turbulence (Reuters) holds policy (FT)
- Stockholm riots spread in third night of unrest (FT)
- Dudley Says Decision on Taper Will Require 3-4 Months (BBG)
- Senate panel passes immigration bill; Obama praises move (Reuters)
- Italy to outline youth jobs plan as government struggles (Reuters)
- Apple CEO Tim Cook, Lawmakers Square Off Over Taxes (WSJ)
- Google Joins Apple Avoiding Taxes With Stateless Income (BBG)
- Sony Board Discussing Loeb’s Entertainment IPO Proposal (BBG)
- Vote Strengthens Dimon's Grip (WSJ), Dimon performance well choreographed (FT)
Today is one on those rare days in which everyone stops pretending fundamentals matter, and admits every market uptick is purely a function of what side of the bed Bernanke wakes up on, how loudly Kuroda sneezes, or how much coffee Mark Carney has had before lunch, but more importantly: that all "risk" is in the hands of a few good central-planners. Following last night's uneventful Bank of Japan meeting, in which Kuroda announced no changes to the "full speed ahead" policy of inflation or bust(ed bank sector following soaring JGB yields) and which pushed the Nikkei225 to surge above the DJIA closing at 15,627, today it is Bernanke's turn not once but twice, when he first takes the chair in the Joint Economic Committee's "Economic Outlook" hearing at 10 am, followed by the May 1 minutes release at 2pm (which may or may not have been previously leaked like last month). As a reminder, Politico reported last night that Ben Bernanke had previously met in secret with Darrell Issa and other lawmakers "to discuss the central bank’s efforts to stimulate the economy and how it could exit this strategy in the future, according to people who attended the meeting." And since we know how important transparency is to Bernanke and the Congress, "Participants in the meeting declined to disclose specifically what Bernanke told lawmakers beyond saying there was discussion about the Fed’s bond buying programs and other issues." But as long as Mr. Issa, the wealthiest man in the House, has his advance marching orders, all is well.
For an affair that numerous media outlets will have you believe has been spun out of all proportion, and that it really is the conservatives fault that the IRS was targeting them, it is somewhat ironic that the IRS official who opened up the entire Pandora's box with her targeted apology two weeks ago, and who learned in 2011 about the improper targeting of political groups yet lied under oath to Congress to the contrary, has decided to plead the Fifth and will invoke her right not to testify on Wednesday for fear of self-incrimination, according to her lawyer. But this would mean that... she may have something to hide? And that would be rather problematic for the media's spin cycle, although we are confident it will take just a few minutes of deep though in the proper channels, before this all too overt admission of guilt is somehow spun as the IRS being the unwitting targets of an aggressive McCarthyesque campaign seeking to discredit the government's impartial tax collector whose only noble purpose is to enable the government to get even bigger.
It has been a tough weekend for the President. First, the CEO of the Associated Press states the government's seizure of AP phone records was "so broad and so secret," among other factors, "that it was an unconstitutional act," adding that it had already had a chilling effect on newsgathering and press freedom. Add to that James Goodale's comments (the leading force behind the release of the Pentagon Papers and first amendment lawyer), that President Obama is "worse for press freedom than Nixon" and things are not going well. But, the problems did not stop there as the Wall Street Journal reports that while President Obama claims not to have been made aware of the IRS indiscretions until May 10th it seems the White House's chief lawyer learned weeks ago that an audit of the IRS likely would show that agency employees inappropriately targeted conservative groups. The President's response so far is that "we’re not going to participate in is a partisan fishing expedition."