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More Stupid Stuff From D.C.
Reid TAGs Up
We’re going to get an important vote in the Senate later today. The vote will be on S.3637.
This about TAG; an emergency measure taken in 2008 where the FDIC guaranteed 100% of all money in checking accounts. Originally, it was intended that TAG would be around for only two years, in 2010 it was extended for another two. Now Harry Reid wants two more.
As is required with any proposed law, the Congressional Budget Office gave Reid’s bill a review. Some words from the CBO on S. 3637:
CBO estimates that fees collected by the FDIC would not offset the full risk of the additional insurance coverage.
CBO expects that, using recent history, the FDIC would underestimate probable losses when setting fees to charge for this additional coverage.
Because the fees charged for the additional insurance would be insufficient, in CBO's estimate, to offset the expected value of the cost, enacting S. 3637 would have a net cost to the FDIC over the next 10 years.
This is a D- report from CBO, yet Democratic Senators will line up to sign S. 3637.
The CBO calculated that extending TAG would cost about $20m a year. That seems like a very low number to me. It comes to an insurance premium of only 0.001% on the $2 Trillion of account balances that are getting the protection.
TAG is the poster boy for TBTF. Trillions of bank deposits are guaranteed by the FDIC without any insurance premiums being paid. TAG is not necessary in 2012 anymore than it was for the hundred odd years that the banking system worked before TAG came into being.
TAG is a free subsidy for big and medium sized banks. Reid’s motivations are questionable on this legislation. Either this is payback for corporate donations, or, even worse, it is a show pony law designed to piss off Republicans; possibly both.
Reid is a little guy, but has big clout in D.C. He might have the votes in the Senate to past this bill tonight, and send it to the House. But House Republicans are not going to go for this. Nor should they. It’s a bad law that makes big government bigger.
When the House does reject the Senate Bill, the Democrats will be able to cry that the “Reds” are the ones who are resisting progress. The American people don’t understand what TAG is about; they will believe that the Republicans are to blame (once again) for the lack of movement in Washington.
I don’t think Reid is a complete ass. He knows that the Bill he is sponsoring is bad law. This is about pay back. What a horrible place Washington is.
++
Eddie D. Takes a Walk
The Wall Street Journal reported yesterday that Ed Demarco, the current boss at the FHFA, is out of his job at the end of the month.
This development is no surprise to me, I wrote about this happening on November 7 (Link). Liberal Democrats in the House (Elijah Cumming and Maxine Waters), have been trying to get DeMarco out of his job for the past two years. Obama has used his Treasury Secretary, Tim Geithner in an attempt to push Ed out. But Ed has hung in. His survival has been assured, up till now, by a very powerful player, Senator Richard Shelby (R- AL).
DeMarco has, in my opinion, done a very good job with America’s busted mortgage lenders. The principal objective of the FHFA was to protect taxpayers from losses at these two dogs. F/F have proved to be a disaster for the country, but the losses that could have been incurred were many times larger than the actual results. DeMarco has saved the country tens of billions, possibly as much as $100B. For that, he is being shown the door.
A new, White House placed head of the FHFA will open the door for a massive Mortgage Mod program. Obama has been trying to do this for the past few years, DeMarco stood in the way. Come January, there will be a new person running the show, a lapdog for the Administration. A Mod program will follow, F/F will get stuck with the losses. In the end, the taxpayers will pay the bill.
You have to put Reid's Bill and the “Public” announcement that DeMarco is out, in the proper context. (Leaks at the WSJ are now public announcements) Democrats are strutting their stuff. The “big win” a month ago gives them that right, at least that is what they think. Now that they have a “mandate”, they can pass stupid laws (S.3637 is stupid), and they can do back backdoor bailouts that cost hundreds of billions, without asking a soul.
Hopefully, intelligent people in the House will see through the Reid scam. I don’t think that good ole Harry’s law comes into being. It will get through the Senate, but it will die in the House. All Reid will have accomplished is to set up the opportunity for another pissing match.
As for Senator Shelby, well, unlike Reid, he’s a big guy, but like Reid, he too has lots of clout. The President has hit his hot button with DeMarco. I can’t imagine that the good Senator is too pleased with this outcome. It’s hard to get deals done in D.C. without guys like Shelby stepping up.
The fiscal cliff debate gets center stage. But offstage, the Democrats are throwing knives on unrelated issues. Dumb ones at that. It’s as if they are trying to poison the well.
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Of course they're trying to poison the well.
http://en.wikipedia.org/wiki/Cloward%E2%80%93Piven_strategy
All politicians shit where they eat, some just shit a little less.
"Liberal Democrats in the House..."
Redundant.
Yet the market seems to think that all is peachy-keen.
Either that; or somebody made a phone call to their heavily indebted friends in the big NY Banks and left instructions as to what they were supposed to do with that free money today. But that couldn't be true, that would be a conspiracy.
And yet many CEOs freely admit that FED policy creates a phony market and is fatal in the long run. Their welcoming of this action is akin to kicking the can down the road. My financial advisor is convinced that the FED aims to keep markets permanently (and artificially) aloft by hook or crook. And ZIRP will be retained to force folks into riskier assets.
Easing is like regulation - the more you do, the more you say you have to do since the latest action didn't work. It's a hamster's cage of idiots doing the same thing over and over.
Don't confuse "the market" with "the algos". Oh, wait. I forgot, the algos are the market.
I think that stocks keep going up because collapsing small business confidence, record food stamps and an unraveling Europe all point towards even larger monetizations by the Fed.
Bingo.
It is like the debt 'ceiling' that isn't a ceiling
Let them "guaranty" it Bruce. It's all fiat anyway and it is going to be worthless soon. It's either that, default, or WWIII. Your choice.
When fraud is the status quo, possession is the law.
And possession must be defended. Prepare your defences.
There certainly is an opportunity for an old fashoned honest mafia in this new normal. All these guns and no one is shooting!
My defense is going to be a facade of integrity so fucking shiny, it'll blind any idiot willing to take a good look at it.
get your tribe in order. Humans never really change on some fronts, same as it ever was.
wait for it...
Of course Reid is a complete ass.
I bet it cheered old Harry up to learn that there is one person in the Western Hemisphere--maybe the entire world--who doesn't think he's a complete ass.
I know Nancy and Barney think he's a total ass, but they have to work the scam with him. Same for the Repubs. As far as I'm concerned, they're all total donkeys, even the ones with trunks. Still, it makes for an entertaining distraction---while the lot of them finish off the nation while stuffing their pockets.
Bruce makes me laugh.
He actually believes that Washington D.C. still has purpose!
Bruce, let me clue you in. They are all complete asses.
Until Bruce gets his ass out of that upscale ghetto and starts doing stuff he really, truly loves, he plays the red blue game.
C'mon in BK, the water's fine and life is short!
"More stupid stuff from B.K."
especially Shelby. Talk about a bank ho.
Their purpose is to spend the US into the grave, so that the entire world can become the bankster's unfettered serfdom.
I agree that they are all complete asses, but they do have a purpose - to f*ck almost all of us over - repeatedly.
They call that "serving" the public.
Good work if ya can get it.
In other news... Bruce, it seems, is becoming less relevant by the day.
Yeah, they work in the "public service area of the economy"; servicing the public. For some reason, I never wanted to be "serviced"; but I guess I'm kind of old fashioned.
wasn't it Shelby who said, "Washington's role is to serve the banks?" Oh no, that was Spencer Bacchus, another bank fellator - at least he was being honest...
When the TBTF banks shifted their derivative holdings from separate holding companies to their retail banks, effectively, depositor funds were put at risk to backstop derivative losses. What the TAG program does is grant an implied guarantee by the FDIC against catastrophic losses by a TBTF bank's derivatives portfolio.
The best thing anyone can do is pull their money out of a TBTF bank and starve them of deposits. However most people have no clue as to the accounting shenanagins going on with their funds. When the ATM's stop working they will just scratch their asses and wonder WTF just happened.
http://www.zerohedge.com/news/bank-america-forces-depositors-backstop-it...
Bruce is an uninformed punk with diarrhea of the mouth and an agenda.
http://finance.yahoo.com/blogs/daily-ticker/social-security-best-funded-government-program-david-cay-140244769.html;_ylt=AuhUV0xZiyk4M6BkYtsgoxaiuYdG;_ylu=X3oDMTQ0dnB2MzVjBG1pdANGUCBUaGUgRGFpbHkgVGlja2VyBHBrZwNlZWE4MzcwYi0xYWFhLTNhMDEtOGRmNC0zZGU4YjhkMDVmNDgEcG9zAzIEc2VjA01lZGlhU2VjdGlvbkxpc3QEdmVyAzUyZmY0MzQzLTQzYWQtMTFlMi1iYjFmLWMyMzVkYjA5NTRhYw--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3
now, now, now show some respect.
bruce you must know that all pieces of shit swirl in the bowl of dc.
i know you are smarter than this sugests.
please help yourself-they are the same or
you are one of them?????
hmmm
disapointed to say the least, with due respect...
Impressive double post with identical up/down votes.
now, now, now show some respect.
bruce you must know that all pieces of shit swirl in the bowl of dc.
i know you are smarter than this sugests.
please help yourself-they are the same or
you are one of them?????
hmmm
disapointed to say the least, with due respect...
i think that is the strongest reason not to vote.....they translate your vote to mean whatever they want it to mean..
This congress can't do anything right, or fix anything for that matter. Welcome to cliffonomics!, Part one.
BTW, TAG as might be implied does not cover ALL DDAs, but only those bearing no interest . Regardless of the diminimus interest being earned on interest bearing accounts (DDAs)
Yeah.. it's "temporary" because now it's a "crisis". And in some magical, shiny future we'll all be rich so we can repeal these unsustainable programs, for sure. I'm so glad I took the blue pill.