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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (115380)	6/14/2012 2:05:45 PM
From: RetiredNow	Read Replies (1) \| Respond to of 149317

We're all connected. This idea of fortress America is a pipe dream, economically speaking. Here's what's really happening in the US: ---------------- Jobless claims on the rise By Charles Riley @CNNMoney June 14, 2012: 10:36 AM ET money.cnn.com NEW YORK (CNNMoney) -- The number of Americans filing for first-time unemployment benefits climbed last week, indicating continued trouble for the labor market. The Labor Department reported Thursday that 386,000 people filed new jobless claims in the week ended June 9, up 6,000 from the previous week's revised figure. That was 11,000 more than expected. Economists surveyed by Briefing.com had forecast 375,000 people would file new claims. Initial claims are a volatile number. But because they're closely correlated with layoffs, economists consider them to be a key gauge of the job market. How are you coping with the economy? Nearly 3.3 million people filed for their second week of unemployment benefits or more in the week ended June 2, the most recent data available. That number was down 33,000 from the previous week. Two weeks ago, the government released a May jobs report that indicated job growth is slowing sharply. Mark Vitner, a senior economist at Wells Fargo, said the worse-than-expected jobs numbers released Thursday are a sign that economic growth may slow in the second half of the year. "There is really no getting away from the point that things are slowing, the economy is slowing," Vitner said. The dour outlook is partially attributable to headwinds from Europe, Vitner said. "Now that the global economy is slowing, companies in the U.S. are becoming much more cautious about expanding," he said.

To: tejek who wrote (115380)	6/14/2012 2:30:44 PM
From: RetiredNow	Read Replies (1) \| Respond to of 149317

Hi ted and thread, who is confused about TBTF banks and their hedging activities? Education time. Let's answer some simple questions. When is a hedge not a hedge? A hedge is used by legitimate businesses to manage currency risk. For example, an airline's chief business is flying passengers and goods around in return for money. However, they have huge purchase contracts on jet fuel. If jet fuel prices move around on them, then those contracts can wipe out their profits on their primary business. Therefore, they buy hedges to lock in the price of jet fuel, so that they can be relatively certain of those costs in their forecasted business plans. This is legitimate hedging business. Now what if that same airline, created an entire department that developed sophisticated models around how the price of jet fuel would move and started to try to derive incremental revenues from jet fuel trading activities? What if the size of those bets exceeded the size of the legitimate hedging needs of their primary business? Then all of a sudden, I think it'd be fair to say that the airline has now become a commodities trading enterprise, instead of an airline. Why are non-hedge bets expressly banned by the Volcker Rule in the Frank Dodd Law? So why do people in the know care about the distinction I made above? Very simple, really. You see, the Too Big Too Fail banks are backstopped by the full faith and credit of the American Tax Payer. That is to say, that when they lose money and are threatened with insolvency, our government bails them out. In fact, another government entity called the FDIC specifically insures depositor accounts as well. So if a bank is engaged in activities to hedge their primary business of taking deposits from customers to lend at a higher rate of interest to other customers, then this is within remit of the FDIC. And the FDIC is capitalized with funds from the banks to insure against risks in this primary business. However, the FDIC is NOT capitalized nor modeled to handle the kinds of risks that happen in scenario 2 above. Because derivatives trading, as with commodities trading is highly risky and the FDIC and our government has specifically stated that they do not want to put the American Tax Payer at risk for gambling activities of the big banks. Why was what Jamie Dimon said a lie? Jamie said that no one can distinguish between scenario 1 and 2. He's lying. It is fairly easy to distinguish between hedging activities that are legitimate and those that are naked bets. Naked is the key word. If you are buying insurance on your house, then that is a legitimate hedging activity. If you are buying insurance on another person's house, then that is a gamble and NOT a legitimate hedging activity. In fact, it aligns your interests to something bad happening to another person, which is NOT what American Free Markets are supposed to be about, despite what Jamie will tell you. Even if the above were not true and it were impossible to distinguish, then that alone should be reason enough to ban all hedging and derivatives bets from happening within the same corporate entity as a government insured entity. In other words, Jamie inadvertently gave Congress the best reason of all to bring back Glass Steagal. If there is no way to regulate derivative exposure, then ban it from commercial banking and force it to be done within an enterprise that is allowed to bear the full brunt of the risks they take when they go bad without any government assistance. It really is that simple, folks. Don't let any of these so called superstar, genius, Nobel prize winning egg heads confuse you with technical jargon. This problem is solvable with common sense solutions. The only real problem is political willpower and the fundamental corruption of many in the Dem party and most in the GOP party. "Now more than ever before, the people are responsible for the character of their Congress. If that body be ignorant, reckless and corrupt, it is because the people tolerate ignorance, recklessness and corruption. If it be intelligent, brave and pure, it is because the people demand these high qualities to represent them in the national legislature.... If the next centennial does not find us a great nation ... it will be because those who represent the enterprise, the culture, and the morality of the nation do not aid in controlling the political forces." - James Garfield, the twentieth president of the United States, 1877