Day: June 17, 2009

Are We Headed For A Recovery?

If you believe some in the media….then yes….a recovery is on the way…at least that is the line they are pushing to give investors more confidence and to help loosen the grip they have on their money.

The economic recession in the U.S. will end during the third quarter, although unemployment and federal deficits will continue to weigh, economists for the American Bankers Association said Tuesday.”The economy will return to growth, but not to health,” said Bruce Kasman, chairman of the group’s economic advisory committee. “Growth in the coming quarters is likely to gather momentum but will not prove sufficiently robust to undo much of the severe damage done to our labor markets and public finances.”

So reports the ABA on the current economic condition.  Unfortunately not everyone is seeing that same light in that tunnel.

A top Federal Reserve official warned on Tuesday not to take recent gains across a range of asset prices as proof the U.S. economy is on the verge of a strong recovery.

Federal Reserve Governor Kevin Warsh said private demand, the true arbiter of economic performance, “remains weak” even while government spending has surged, and the the jobless rate is likely to peak at a higher rate, and linger longer at those high rates, than in recent recessions.

Once again there is the same continuous disconnect within Wall Street.  The real question to ask is “who do you believe”?

Obama’s New Rules

Senior Obama administration officials on Monday said in a newspaper op-ed piece that a landmark financial regulation reform plan to be released this week will target capital requirements, securitization and other problem areas blamed for the global financial crisis.

One proposal, said Geithner and Summers, will be “raising capital and liquidity requirements for all institutions, with more stringent requirements for the largest and most interconnected firms.”

In addition, large and interconnected firms whose failure could threaten the stability of the system “will be subject to consolidated supervision by the Federal Reserve, and we will establish a council of regulators with broader coordinating responsibility across the financial system.”

New reporting requirements will be urged for issuers of asset-backed securities, as well as a rule saying securitizers must “retain a financial interest” in the performance of the asset-backed securities they issue, they said.

Reduced reliance on credit-rating agencies will also be proposed, said the piece.

Addressing another market implicated in the crisis, the plan will urge “oversight of ‘over the counter’ derivatives,” an unspecified “harmonizing” of futures and securities regulation, and stronger payment and settlement systems.

“All derivative contracts will be subject to regulation, all derivatives dealers subject to supervision, and regulators will be empowered to enforce rules against manipulation and abuse,” according to the op-ed piece.

It said the proposals will call for “a resolution mechanism that allows for the orderly resolution of any financial holding company whose failure might threaten the stability of the financial system.”

New rules……same game…different rules……not much will change.

Get The Crapper Out Of The Yard

The AP has had a great story:

The planters in Tina Asmus’ front yard aren’t too pleasing to some of her neighbors, and village officials in Lakemoor have told her to remove them, or face a fine. Asmus, who likes to recycle discarded items, created the planters out of two old toilets and a pedestal sink. Mayor Todd Weihoffen, who is a plumber by trade, said he stands behind police who have given Asmus 30 days to remove the toilets.He said she faces a fine of $25 to $500 if she doesn’t comply by June 15.

Asmus, though, said she will not remove what she calls her “art pieces.” She said each toilet planter cost about $100 to make and holds an assortment of daisies, angel’s breath, lilies and other flowers.

Would not this be a form of recycling?  Kept a bunch of broken porcelin out of a local landfill.