June 21, 2012

The American public prefers smaller government 52-39? I didn't realize.

On balance, Asian Americans prefer a big government that provides more services (55%) over a smaller government than provides fewer services (36%). In contrast, the general public prefers a smaller government over a bigger government, by 52% to 39%.

http://www.pewsocialtrends.org/2012/06/19/the-rise-of-asian-americans/

June 21, 2012

Voters Believe Attack Ads Even as They Don’t Like Them

Mitt Romney and Barack Obama are accusing each other of being “out of touch” based on things they’ve said on the campaign trail. The conclusion of a plurality of likely voters: They’re both right.

In the past two months, the presidential campaigns have been laying down their candidate narratives and fine-tuning the messages they will be using against their opponent. According to a Bloomberg National Poll, the public believes almost all of the bad things they are saying about each other.

More than half of voters agree Obama is “in over his head” when it comes to fixing the economy and that he hasn’t delivered the change he promised in the 2008 race, two central themes of Romney’s campaign.

At the same time, pluralities say Romney’s economic platform would be a return to the “failed” policies of President George W. Bush and that Romney would be an “ineffective” job creator.

http://mobile.businessweek.com/news/2012-06-20/voters-believe-attack-ads-even-as-they-don-t-like-them

June 19, 2012

FHFA Seeks to Limit Buybacks Afflicting BofA to PNC: Mortgages

http://mobile.bloomberg.com/news/2012-06-19/fhfa-seeks-to-limit-buybacks-afflicting-bofa-to-pnc-mortgages.html?source=email_rt_mc_body&ifp=0

The Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, plans to help banks avoid being forced to buy back mortgages as it becomes concerned that lenders are tightening standards even for the most creditworthy home buyers.

The FHFA will detail flaws that would trigger a putback request, Stefanie Johnson, a spokeswoman for FHFA, said in a statement. The regulator also is standardizing the data Fannie Mae and Freddie Mac collect on each loan so they have more information when buying mortgages from lenders, she said.

Banks are requiring credit scores on government-backed loans that are between 100-200 points higher than the minimums set by Fannie Mae, Freddie Mac and the Federal Housing Administration, after the government-controlled agencies demanded lenders repurchase more than $80 billion in flawed loans over the past three years.

“The lenders perceive the pendulum has swung too far, and they’re being held accountable for things beyond their control,” said Brian Chappelle, a partner at the bank consulting firm Potomac Partners. “Their reaction is going to be to tighten up.”

June 19, 2012

Fiscal-Cliff Concerns Hurting Economy as Companies Hold Back

http://mobile.businessweek.com/news/2012-06-19/fiscal-cliff-concerns-hurting-economy-as-companies-hold-back

Companies are starting to delay hiring and spending out of concern that Congress won’t reach a compromise in time to avoid automatic tax increases and budget cuts that would pull billions of dollars of purchasing power out of the economy.

Faced with a so-called fiscal cliff of more than $600 billion in higher taxes and reductions in defense and other government programs in 2013, U.S. companies are pulling back, though the deadline for congressional action is more than six months away.

Eaton Corp. CEO Sandy Cutler
The best strategy for companies to follow when confronted with such uncertainty ahead of Dec. 31 is to “stay lean and keep your inventories taut,” Sandy Cutler, chief executive officer of industrial equipment-maker Eaton Corp. (ETN) in Cleveland, told a conference May 31.

Economists are predicting this trend will pick up through the year. “A lot of people see the fiscal cliff as a 2013 story, but you don’t board up the windows when the hurricane is there, you board up the windows in anticipation,” said Michael Hanson, senior U.S. economist at Bank of America Corp. in New York.

June 18, 2012

Fiscal Cliff Road Paved by Those Who Took U.S. to Brink

The people responsible for averting the end-of-year fiscal cliff are the same ones who almost caused a U.S. debt default, let airline ticket taxes lapse for two weeks and came within two hours of shutting down the government.

The 112th Congress, paralyzed by ideological divides and deadlocked on routine issues, may approach the brink again. Lawmakers are nowhere near an agreement on what to do about $607 billion of tax increases and spending cuts slated to kick in at the beginning of 2013.

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If Congress does nothing the economy will probably fall into a recession in early 2013, according to the Congressional Budget Office, because of what Federal Reserve Chairman Ben S. Bernanke has called a fiscal cliff.

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In all, if Congress does nothing, 82.9 percent of U.S. households would face tax increases averaging $3,701, according to the Tax Policy Center. More than 98 percent of households earning more than $50,000 a year would pay higher taxes.
http://www.businessweek.com/news/2012-06-18/fiscal-cliff-road-paved-by-those-who-took-u-dot-s-dot-to-brink

June 17, 2012

Germany's Biotest first drugmaker to exit Greece

FRANKFURT/ATHENS (Reuters) - German pharmaceutical firm Biotest said it would stop shipments to Greece in July, becoming the first drugmaker to announce it would quit the debt-mired country's market because its bills had not been paid.

Though a relatively small player in Greece, the company's exit sets an unwelcome precedent for a country whose healthcare system is crumbling under the weight of economic crisis and administrative deadlock.

"We told the Greek health ministry in April that we would exit the market within three months if no payments were made," Biotest's Chief Financial Officer Michael Ramroth told German daily Boersen-Zeitung in an interview published on Saturday.

"And I don't believe that manna will fall from heaven in June."

http://m.yahoo.com/w/legobpengine/news/germanys-biotest-first-drugmaker-exit-greece-050833865.html?orig_host_hdr=news.yahoo.com&.intl=US&.lang=en-US

June 17, 2012

Troubled Greek Economy Is Being Left to Fend for Itself

ATHENS — No matter what happens in this weekend’s elections, Greece is rapidly becoming an isolated economy.

Carrefour, the giant French supermarket and retail group, said on Friday that it was selling its entire stake in Greece at a loss to its local franchise partner, so it could concentrate “on markets where it sees growth,” a spokesman said.

Coca-Cola’s operations in Greece were also downgraded by Moody’s Investors Service, which cited the increased likelihood that Greece could exit the euro zone. A day earlier, the French bank Crédit Agricole said it was ring-fencing its Greek operations to protect itself should that happen.

Two of the world’s largest import-export insurers, Euler Hermes and Coface, have recently refused to cover transactions involving companies in Greece, imperiling the import of basic goods.

http://www.nytimes.com/2012/06/16/business/global/greek-economy-is-being-left-to-fend-for-itself.html?pagewanted=all

June 15, 2012

Peak Monthly Inflation In 1945 Hungary: 12,950,000,000,000,000% And Other Hyprinflationary Facts

For some reason, whenever people want to make a historical example of a hyperinflationary period, they always bring up the Weimar Republic, aka Germany in 1920-1923. Yet with a highest monthly inflation of just under 30,000%, Weimar was a true walk in the park compared to the 309,000,000% monthly inflation in 1992-1994 Serbia, but especially to the 12,950,000,000,000,000% inflation that Hungarians had to deal with in the aftermath of WWII. For these and more  comparative examples of hyperinflation, particularly relevant now that the entire world is rumored (for now) to be getting ready to print, see below.

http://www.zerohedge.com/news/peak-monthly-inflation-1945-hungary-12950000000000000-and-other-hyprinflationary-facts

June 13, 2012

60 minutes on CNBC...Hard Times Generation.

Heartbreaking. 16 million kids in poverty.

June 12, 2012

Bond Markets Forcing Europe’s Austerity, Pimco’s Clarida Says

European leaders debating policies to increase economic growth are limited by bond markets that have shut out some borrowers, according Richard Clarida, global strategic adviser at Pacific Investment Management Co.

“Growth is sort of like mom and apple pie,” Clarida, who served under President George W. Bush as assistant Treasury secretary for economic policy, said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “Who’s against a growth agenda? The challenge is turning that into an operative policy within the framework of Europe.”

Greek bonds due in 10 years yield 28.3 percent, compared with 6.1 percent for similar maturity Spanish debt, 11.8 percent for Portuguese securities and 1.5 percent for German bunds. Gross domestic product among the euro member states will shrink 0.1 percent this year and expand 0.9 percent in 2013 instead of posting growth of 0.2 percent and 1.4 percent as predicted last November, the Paris-based Organization for Economic Cooperation and Development said today.

“In a lot of these countries, austerity isn’t really a choice -- they can’t borrow in private markets, they have to have an austere policy,” said Clarida of Newport Beach, California-based Pimco, manager of the world’s biggest bond fund. “At the margin, you might get some infrastructure funds here or there, you may phase in some policies. But we’re in for an austere period in Europe without question.”

http://www.bloomberg.com/news/2012-05-22/bond-markets-forcing-europe-s-austerity-pimco-s-clarida-says.html