Stress Tests’ “Cover” Only Indicates Bad News
The media and the Administration are already out there spinning the results of the stress tests. I wouldn’t be surprised if they say that all banks “passed.” But the real suckers would be those who invest in this “bump” in the market before another drop this summer. The banks are still not viable and many are being propped up by distortions in their books and “funny money.” If the results were great in the first place, the government would not have delayed the release of the reports. I wonder if the politicians on Capitol Hill really think we are that dumb!? Roubini, a noted economist and known as Dr. Doom, has been correct on most of his statements about the markets and about banks – he says the following:
The spin machine about the banks’ stress test is already in full motion. Some banking regulators have already served up–to The New York Times–their spin that all 19 banks that are subject to the stress test will pass it. In other words, not one will fail.
But let’s look at the actual data. The macro data for the first quarter on the three variables used in the stress tests–growth rate, unemployment rate and home-price depreciation–are already worse than those in the U.S. government baseline scenario for 2009. They are, in fact, even worse than those for the stressed scenario for 2009.
The government used assumptions for the macro variables in 2009 and 2010 that are so optimistic that the actual data for 2009 are already worse than the adverse scenario. As for some crucial variables, such as the unemployment rate–key to proper estimates of default and recovery rates for residential mortgages, commercial mortgages, credit cards, auto loans, student loans and other banks loans–the current trend shows that by the end of 2009 the unemployment rate will be higher than the average unemployment rate assumed in the more adverse scenario for 2010, not for 2009. Put plainly, the results of the stress test–even before they are published–are not worth the paper on which they are written.
Let us look at how the stress tests are done. According to the U.S. government, there are two scenarios: a more optimistic “baseline scenario” for 2009 and 2010 for the three macro variables (gross domestic product, unemployment and home prices); and a more pessimistic “alternative adverse scenario.”
The baseline scenario assumes–based on the average of the forecasts by the consensus of macro forecasters at the time when the stress tests were announced–that GDP growth will be -2.1% in 2009 and 2% in 2010; that the unemployment rate will average 8.4% in 2009 and 8.8% in 2010; and that home prices will fall 14% in 2009 and 4% in 2010. In the alternative adverse scenario, GDP growth is assumed to be -3.3% in 2009 and 0.5% in 2010; the unemployment rate is assumed to average 8.9% in 2009 and 10.3% in 2010; and home prices are assumed to fall 20% in 2009 and 7% in 2010.
The description provided by the government of the stress test also shows graphs–but not actual figures–for the quarterly behavior of the three macro variables in 2009 and 2010 for both scenarios. Based on these quarterly graphs, in the first quarter of 2009 the unemployment rate would approximately average 7.7% in the baseline scenario and 7.8% in the adverse scenario; the GDP growth rate would be -1.9% in the baseline scenario and -2.1 in the adverse scenario; and home prices would fall 4% in the baseline scenario and by 7% in the adverse scenario.
How do these scenarios actually stack against actual figures for the first quarter of 2009, with current consensus forecasts and with current likely paths for these macro variables?
Read the rest of the bad news at Forbes…
Olbermann Will Give $1,000 for Every Second Hannity Lasts Getting Waterboarded
Keith Olbermann, who is against waterboarding, would be willing to give money to have Hannity waterboarded. This is quite interesting, you think that if you were against waterboarding, you would be completely against it. I guess if you are a conservative, you can be waterboarded in Olbermann’s opinion.
The rest of this video clip is nonsense. The fact that a Huffington Post editor is brought onto this show proves that no experts or legitimate folks are on this network. For Olbermann to bring up moral equivalency, morals, ethics and integrity is quite laughable especially after the shenanigans that the Democrats have been involved in over the years and even more so recently.
Newspapers Going Bankrupt; Dems Want Bailed Out ‘Independent’ Media
The New York Times and the Boston Globe are both in dire straits. To add more fuel to the fire, the Boston Globe is owned by the New York Times and both papers are losing significant amounts of money and are experiencing severe debt problems.
As The New York Times Co. tries to bask in the glory of having bagged five Pulitzers, the company is facing a cash crunch that could put it on the path toward insolvency.
According to its first-quarter earnings report, the Times said it had cash and cash equivalents totaling $294 million.
However, $260 million of that is earmarked to pay off debt that matures in March 2010, effectively leaving the company with $34 million.
That’s a particularly precarious position to be in, given the Gray Lady posted a wider-than-expected, first-quarter loss of $74.5 million amid worsening advertising declines, and is scrambling to raise cash as it labors under a $1.3 billion debt load.
This should be an indication of ultra liberal slants on newspapers and how they fare in Capitalist environments. Most newspapers will probably go the way of the Internet with paid member subscriptions, but it’s quite interesting how most of the papers going out of business are more liberal than right-leaning. Read more
GE Shareholders Are Peeved; Political Outbursts at Meeting
GE shareholder meeting reaches crescendo:
The hostility between Fox News Channel and MSNBC reached a fever pitch Wednesday when a Fox producer infiltrated the GE shareholders meeting.
Just before GE re-elected board members, company brass were hit with questions from shareholders critical of an alleged leftward political slant at MSNBC.
But one of those questions came from Jesse Waters, a producer on “The O’Reilly Factor” whose criticisms were cut short when his microphone was cut off, according to several attendees. Waters apparently did not publicly identify himself as a Fox employee.
If Waters owns stock in GE he can be at the meeting! Plus, reporting does require one to investigate and get to the truth of the matter. It is obvious with recent guests like Janeane Garofalo calling conservatives racists, Olbermann calling Cheney and Bush fascists and Rachel Maddow having no idea what she is talking about, may lead people to believe that there is quite a liberal slant on the network. There is also a lot to be said for Immelt and Zucker’s support of Obama, which has been more visible than previously. Jack Welch was a lot more tight-lipped about his politics than Immelt when he last ran GE. Since Immelt’s take over his company, which is usually one of the more stable stocks, has had to consolidate, restructure and cut dividends to try and make ends meet. Back in the summer of 2008, GE also considered dropping NBC after the Olympics because they did not know how to run a media outlet properly since it did not fit their business practices and core competencies. Immelt had also been selling equipment that could be used for violent purposes to places like Iran, who are banned on the export/ITAR lists.
Attendees who spoke to THR said shareholders asked about 10 politically charged questions concerning MSNBC as well as one about CNBC.
First up was a woman asking about a reported meeting in which Immelt and NBC Uni CEO Jeff Zucker supposedly told top CNBC executives and talent to be less critical of President Obama and his policies.
Immelt acknowledged a meeting took place but said no one at CNBC was told what to say or not to say about politics.
During the woman’s follow-up question, her microphone was apparently cut off. A short time later, Waters asked a question and his mic was cut, too.
“The crowd was very upset with MSNBC because of its leftward tilt,” one attendee said. “Some former employees said they were embarrassed by it.”
And the shareholders should be embarrassed since the leftward tilt was incredibly obvious when they cut off the microphones of those questioning them – even a woman who was a valid shareholder! With actions such as the ones mentioned above, are we supposed to believe what they tell us about their account of the CNBC meeting? Freedom of Speech is not allowed in Obamanation.
“My biggest surprise was the open hostility to MSNBC,” said Tom Borelli of the Free Enterprise Action Fund and a four-year critic of Immelt. “It was noticeable and loud. I don’t remember any of this going on last year.”
“Any time MSNBC was mentioned, there was a rumbling in the crowd of 400 people,” he added. Borelli also asked a question pertaining to GE’s stock performance since Immelt took the helm.
The meeting, which lasted more than two hours, was described by all four of the attendees THR talked to subsequently as variously rancorous or critical. Other than questions about MSNBC, shareholders brought up questions about executive pay and cuts to the company’s dividend.
I’m glad some people are starting to wake up and are starting to speak up – it’s about time!
The Establishment Hates Rocking the Boat
Many of us, who continue to read blogs and stay on top of political news, are aware of both the DNC and the RNC and what the parties have turned into.
Republicans and Democrats used to have clear differences between the two, but now they are just a blurred combination of one another. The point of the two party system was being able to have a choice; namely freedom.
The more I see how congress votes and what each representative or senator puts into their bills, the more I realize, at such a young age, that the government has become power hungry and spend happy. Congress couldn’t care less where the money comes from; the more “bacon” they bring home to their constituents and their special interests, the more money they receive in donations and campaign contributions as well as a little extra padding in their pockets.
We are being “represented” by an elite political class or, as I like to refer to it, the Politburo. This is a class of career politicians who have never worked outside of classrooms or as a lawyer or on their parent’s campaign. They have no idea what it is like to be average citizens in the United States working to live and living to work. Those of us who work 9-5 jobs day in and day out, just to make enough money to pay the bills, know what our priorities are and what really matters in this world. The political elite is reminiscent of the ‘popular’ clique in the high school I attended. It was mainly dependent on the income and social status of parents. Those whose parents belonged to a country club, played tennis, golfed, and went yachting were deemed ‘acceptable.’ However, regardless of your personality, looks, or good will if you didn’t measure up you were stuck in the middle rungs; never quite making it to the upper echelons of high school popularity. Many went on to ivy league schools, not because they were intelligent, but because they could afford it or they had connections. After spending 4 years hiding away in the bubble of elitism, some could quote text books or famous philosophers, while many were still incapable of doing anything. One thing was for sure; they never left their comfort zone to experience life in order to truly understand the difference between intelligence and wisdom; life-experience. Leadership tends to be a mixture of inherent characteristics as well as learned qualities through personal accomplishment and strife.
I was so incredibly appalled at what I saw and what I heard during the 2008 election cycle. I thought, based on character and integrity, the choice was obvious. I was wrong. The ticket had two very honorable, down-to-earth, decent human beings who, having made it through tremendous struggles, were overlooked due to race baiting, liberal media bias, propaganda, elitism, ivy league degrees, and the usual ‘Bush sucks’ sentiment.
One of my favorite books is the Little Prince by Antoine de Saint Exupery, and my favorite part of the story is when the Little Prince meets the Fox and discovers the meaning of friendship. The book teaches us what really matters after you tear away all of the materialistic aspects of the outside world. “It is only with the heart that one can see rightly, what is essential, is invisible to the eye.”
I know I’m not the only person in my age group to understand the Little Prince, but I am few and far between who actually applies it. What I have noticed during my young life thus far is the fact that those who appreciate honesty, morals, and ethics are usually those who have experienced something in their lives where they have been “enlightened” to a point where they have seen the “bottom” and know what it means to struggle. When people have to build their lives back up again or work like there’s no tomorrow to make it to the other side, they appreciate what so many others take for granted and they value those things that so many lose sight of; because, let’s face it, our society has become spoiled and we’ve lived beyond our means for too long.
Sarah Palin is the epitome of struggle and accomplishment. She represents the antithesis of the establishment and the elite. She is someone who you could sit down and have a heart-to-heart with and feel as though you have been friends for years. She is the quintessential Reagan type persona who so many have been waiting for. I feel funny saying that since I was only born in 1981, but I’ve done a bit of research 
I even have a $1,000,000 bill with Reagan’s face on it hanging in my cubicle. For all I know that $1,000,000 bill will be worth something soon due to all of this spending and the inevitable inflation!
Sarah Palin has fought her own machine and once you fight that monster under the bed it will keep coming after you for revenge. We saw that during the Alaska legislative session this past year in her attempt to nominate a decent conservative man as the next Attorney General. We also see it at the national level where Republicans continue to fear her and turn their noses up at her. The Republicans better be careful because the GOP’s approval rating is not doing too well either. When Sarah Palin releases her FEC filings for SarahPAC I whole-heartedly believe that we will hear the creaking of “old geriatric” jaws dropping around the beltway.
The DNC is just as bad and just as corrupt, if not more so. Obama is part of the Machine. He came from the most politically corrupt city in the nation; Chicago. He brought this style to Washington D.C. along with a slim resume and only 143 days of working experience in the Senate. I am doubtful that Obama can manage a hot-dog stand let alone the highest office in the land.
We have seen him sign legislation behind closed doors after he stated that he would make transparency a priority; and we have seen him sign over 18,000 earmarks within his first 100 days after he railed against them. We have seen him pay off his union buddies and not fire the head of the UAW but fire the head of GM. (The Union contributed nearly $400M to his campaign). We have seen him argue against Bush’s outrageous spending, but he has spent more than all presidents before him combined and in only 3 month’s time!
Barack Obama is not “change” or “hope.” He is the very essence of what it means to be establishment and beholden to lobbyists and special interests. Too many people were born yesterday in 2008, when it was obvious that the vitriol and hatred spewed towards Sarah Palin should have been reason and proof enough to vote for her ~ she isn’t the establishment and she isn’t in the pocket of the media, the lobbies, or anyone else. She scares the pants off of the Democrats, the Republicans, and the media for that very reason.
The D.C. elite have removed themselves so far from the purpose of their roles, as set forth in our constitution, that they all need to be thrown out as soon as humanly possible (2010). So let me start the chant “Throw the Bums Out.”
We have seen throughout history the effects of the ruling class trumping democracy and none of those societies have ever ended peacefully and quietly. One of the more humble and honest of politicians said the following when asked to run for re-election:
“We draw our Presidents from the people. It is a wholesome thing for them to return to the people. I came from them. I wish to be one of them again.” ~ Calvin Coolidge
The media elite and the Politburo went after a woman’s family and continue to dump on her even after she lost the VP slot and has been quietly doing her job in faraway Alaska. People may find themselves asking why? The answer to me is blatantly obvious, but to others, maybe not. She is a threat to everything they hold dear; the very epicenter of their control and power. She stands true to her morals and principles and does not back down from them, nor does she feel ashamed. She cannot and will not be manipulated to play machine politics and kowtow to the good old boys. The people that the GOP prop-up in the media or select to give counter addresses are the people who won’t “rock the boat.”
The establishment wants to bring up non substantive stories about this woman’s family when Obama’s family is far from classy. He has an illegal aunt living in the slums of Boston, a half-brother in Kenya living on a $1/day in a hut, another half-brother just hospitalized for cholera, and another half-brother just detained and turned away by customs in the UK for sexually assaulting a 13 year-old girl. He was also born out of wedlock and has more half siblings than previously mentioned. Joe Biden’s daughter was recently caught on tape at the age of 27, snorting a bunch of cocaine and she has been arrested before for drug possession and obstructing the law. I’m curious as to why we didn’t hear about this in the media? How many people in this world have had family members who have made mistakes and gotten into trouble? Do we have control over family members? And at what point as a parent do you let your children make their own mistakes so they can learn and become responsible adults? I can’t choose my family but I can certainly choose my friends and associations. That’s the difference between Sarah and Obama. She didn’t choose to associate with domestic terrorists, radicals, or members of the Communist Party USA. She just had a daughter who made a mistake and suffered the consequences for it.
I take extreme offense to anyone who judges Sarah Palin based on the decisions made by her daughter. Take it from an unruly, rebellious child writing this opinion. My parents did the best they could with what they had. They taught me that doing drugs was bad, they didn’t let me go to parties that were unsupervised, and they told me about pre-marital sex. We spoke, we discussed, and they parented. I made my decisions accordingly. My parents never bent my elbow and forced me to drink, they never told me to hop in bed with someone, they never told me to put something up my nose to “feel good.“ Those were my decisions and I should be the one who is judged, not my parents. The only way that we truly learn is by being allowed to make our own mistakes and applying those lessons in the next phase of our lives.
Sarah Palin is fighting this bipartisan backlash from both sides of the aisle; from both political machines in her state of Alaska and the lower 48. She is the citizen pundit, the all-American politician, the person who is tired of the way things are and she decided she could make a difference by getting involved. I’m curious as to whether the elite have a pocket constitution or realize that only half of the founding fathers had a formal education. Ben Franklin and our first president, George Washington, were two of those men. They wrote about regular citizens representing the government and the fear we should have if the government ever became too powerful. Sarah Palin knows this and she believes in the founding principle of Federalism. If people would only open their eyes and their ears.
Rob Harrison from The Spyglass writes the following:
Gov. Palin is now in a difficult, though probably inevitable, position. She is opposed by a bi-partisan coalition of the machine politicians in Alaska, who oppose each other on policy but share a common higher loyalty to the old boys’ club and the perks and procedures to which they’re accustomed. Gov. Palin has the support of a strong majority of the Alaskan people, but only a minority of the state’s politicians. This has meant that the State Legislature has been in full foot-dragging mode through the entire session – a fact which they now intend, via the Democratic Party PR department (aka the MSM, specifically the New York Times), to blame on her.
That the MSM will coordinate with the Democratic/Republican machine in Alaska on this is, I believe, a sign of their deepest agenda here—not just their general bias against conservatives, but a deeper bias yet: as much as they bleat about “speaking truth to power,” they are not the outside critics of the machine that they pretend to be. Rather, they are a part of the machine. They are inside the corridors of power, that’s where they want to be, and they really have no true understanding or interest of the world outside those corridors.
This is true, I believe, even of the conservatives within the MSM; which is why a lot of the elite conservative writers have been almost as unfair to Gov. Palin as their liberal colleagues. If a Democratic version of Gov. Palin were ever to emerge, a true reformer who bucked the party machine, I don’t think the likes of Eleanor Clift and Paul Krugman would be any kinder to that individual than the likes of David Brooks and David Frum have been to Gov. Palin. The initial MSM reaction to the appointment of Rep. Kirsten Gillibrand to Hillary Clinton’s vacant seat in the U.S. Senate certainly supports that thought.
Thomas Sowell also wrote an opinion entitled “Not One of Us,” in which he expresses the need to embrace Sarah Palin and explains why it is that those who are part of the Republican Elite have trouble doing just that.
Pragmatism tells you nothing about extremism. But the conservative intellectuals who seize upon President Obama’s pragmatism to give him the benefit of the doubt are obviously bending over backward for some reason.
With Governor Palin, it is just the opposite. The conservative intelligentsia who react against her have remarkably little to say that will stand up to scrutiny. People who actually dealt with her, before she became a national figure, have expressed how much they were impressed by her intelligence.
Governor Palin’s “inexperience” is a talking point that might have some plausibility if it were not for the fact that Barack Obama has far less experience in actually making policies than Sarah Palin has. Joe Biden has had decades of experience in being both consistently wrong and consistently a source of asinine statements.
Governor Palin’s candidacy for the vice presidency was what galvanized grass roots Republicans in a way that John McCain never did. But there was something about her that turned even some conservative intellectuals against her and provoked visceral anger and hatred from liberal intellectuals.
Perhaps the best way to try to understand these reactions is to recall what Eleanor Roosevelt said when she first saw Whittaker Chambers, who had accused Alger Hiss of being a spy for the Soviet Union. Upon seeing the slouching, overweight, and disheveled Chambers, she said, “He’s not one of us.”
The trim, erect, and impeccably dressed Alger Hiss, with his Ivy League and New Deal pedigree, clearly was “one of us.” As it turned out, he was also a liar and a spy for the Soviet Union. Not only did a jury decide that at the time, the opening of the secret files of the Soviet Union in its last days added more evidence of his guilt.
The Hiss-Chambers confrontation of more than half a century ago produced the same kind of visceral polarization that Governor Sarah Palin provokes today.
[...]
Why did it matter so much to so many people which of two previously little-known men was telling the truth? Because what was on trial was not one man but a whole vision of the world and a way of life.
Governor Sarah Palin is both a challenge and an affront to that vision and that way of life– an overdue challenge, much as Chambers’ challenge was overdue.
Whether Governor Palin runs for national office again is something that only time will tell. But the Republicans need a candidate who is neither one of the country club Republicans nor– worse yet– the sort of person who appeals to the intelligentsia.
The recent Rasmussen Polls only further drive home Sowell’s point when we see that the elite Politburo had an overwhelmingly unfavorable view of the recent Tea Party protests that took place across the nation. Governor Sarah Palin’s father, Chuck Heath, actually attended one in Wasilla, AK, and Governor Palin, herself, applauded the efforts of the protesters and even mentioned them in her 45 minute Pro-Life Speech last Thursday in Evansville, IN.
These Tea Parties show the disparity between the elite and the working class of America, the engine of the economy and the majority of this nation’s citizens. The Tea Parties are the embodiment of what most Americans desire of their government, which is representation, ethics, reform, principles, and their own interests served; not the ego of a politician or the pockets of the lobbyists.
But maybe it’s not best listening to someone from the states. Maybe it’s better to hear similar dislike and apathy toward the elite establishment from across the pond to further grasp that this concept and this problem is not exclusive only to us.
The New Snobs of Labour have gathered this week in Manchester for their party get-together. Snobbish? You bet. Our country is now governed by an elite that denies being elite. Our ruling class flaunts its state education, yet attended the best comprehensives in the land.
Of course, David Cameron’s cocooned background (Eton and Oxford) isn’t ideal preparation to lead the country, but David Miliband didn’t exactly grow up on a council estate either. Nor did I. However, like all those from the genuine middle I grew up around those who did. We went to school with them. We still see them. We couldn’t avoid seeing them even if we wanted to.
But for the new ruling class, which we might call the New Labour core vote, those from council estates are, knife crime aftermaths aside, invisible.
“We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we cant’ have both.” ~ Louis D. Brandeis
