50% Tax on bank bonuses above €27,500. ($40,000)
I’m not surprised about the tax, though I am surprised that it happened so quickly, and that the threshold is so low.
Year: 2009
Regulators Sell Out To Banks
This time, it’s international regulators, who have pushed back the so called Basel requirements on capitalization:
Global regulators will give banks a grace period before forcing them to implement stricter capital rules, three people said on Wednesday, easing concerns that lenders might need to issue massive amounts of shares in the near future.
……………
The committee is expected to publish proposals this week for stricter financial regulations in response to the credit crisis. There had been fears that if banks implement the new rules quickly, they would have to raise substantial capital.
The three people with knowledge of the matter said the committee would stick to its plan to gradually implement changes starting in 2012, but will give banks a transition period to help them adjust to the rules.
My bet is that in 2010, start will be pushed off to 2013, and in 2011, it will be pushed off to 2014.
Rinse……Lather……Repeat.
Did Nancy Pelosi Just Call Barack Obama a Bitch?
Why yes, I think that she did just call Barack Obama a bitch.
On a slightly more precise level, what she has said is that if Barack Obama wants Democrats in the house to support him on Afghanistan, that Pelosi will not use her position as speaker to whip votes:
House Speaker Nancy Pelosi said President Barack Obama must press his own arguments for sending 30,000 more U.S. troops to Afghanistan because she won’t ask House Democrats to pay for the military escalation.
“The president is going to have to make his case,” Pelosi told reporters today in Washington.
The speaker said persuading House Democrats to approve a $106 billion spending bill in June to finance the wars in Iraq and Afghanistan was “definitely” the hardest vote of her tenure as speaker. She said she told Democrats her request for their support was the last time “I would ever ask them to vote for it.”
House Democratic leaders will provide briefings on funds for the additional troops, and members “will have the information” they need to make a decision, she said. “But this, for members, is a vote of conscience.”
I’m sure Steny Hoyer, 2nd in command as House Majority Leader, will continue to whip the vote, but this is a big deal.
I expect the bill to pass anyway, since the Republicans will always vote pro war, but much like during our private little war in South East Asia in 1968, it’s the Democrats who are opposing it, and much like that private little war in South East Asia in 1968, they are correct in their opposition to the this private little war in South Asia.
Economics Update
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Rent-price ratio h/t Calculated Risk
So, the Open Marked Committee of the Federal Reserve left rates unchanged, though they do seem set on ending their quantitative easing over the next few months:
In light of ongoing improvements in the functioning of financial markets, the Committee and the Board of Governors anticipate that most of the Federal Reserve’s special liquidity facilities will expire on February 1, 2010, consistent with the Federal Reserve’s announcement of June 25, 2009.
Full FOMC statement is after the break.
The bond markets responded with Treasurys falling, and yields rising.
We actually saw a non trivial inflation rate in November, with the Consumer Price Index rising 0.4% in November, though that was energy and food, the core rate was 0%.
There is a troubling data point in the data though, rent, and owners’ imputed rent both fell, which is not a problem in terms of inflation, but is in terms of real estate.
Basically, even with house prices having fallen in the past 2 years, they are still above the traditional price-to-rent ratio trend, and as rents, fall, homes have to fall further to get back to the traditional (and sane) range, so there is more pain in real estate.
In more real estate news, new home construction jumping 8.9% from October to November, though it is down 12.4% year over year, (PDF link) while mortgage applications, and the rate for a 30-year fixed mortgage, rose marginally last week.
The statements on the unwinding of quantitative easing pushed the dollar up.
In energy, oil rose again, on reports of falling inventories.
Press Release
Release Date: December 16, 2009For immediate release
Information received since the Federal Open Market Committee met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating. The housing sector has shown some signs of improvement over recent months. Household spending appears to be expanding at a moderate rate, though it remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment, though at a slower pace, and remain reluctant to add to payrolls; they continue to make progress in bringing inventory stocks into better alignment with sales. Financial market conditions have become more supportive of economic growth. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, the Committee is gradually slowing the pace of these purchases, and it anticipates that these transactions will be executed by the end of the first quarter of 2010. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets.
In light of ongoing improvements in the functioning of financial markets, the Committee and the Board of Governors anticipate that most of the Federal Reserve’s special liquidity facilities will expire on February 1, 2010, consistent with the Federal Reserve’s announcement of June 25, 2009. These facilities include the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility. The Federal Reserve will also be working with its central bank counterparties to close its temporary liquidity swap arrangements by February 1. The Federal Reserve expects that amounts provided under the Term Auction Facility will continue to be scaled back in early 2010. The anticipated expiration dates for the Term Asset-Backed Securities Loan Facility remain set at June 30, 2010, for loans backed by new-issue commercial mortgage-backed securities and March 31, 2010, for loans backed by all other types of collateral. The Federal Reserve is prepared to modify these plans if necessary to support financial stability and economic growth.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
House Passes Jobless Benefits and COBRA Subsidy Extension
Both of these programs are so overwhelmingly popular that even Republicans voted for them, the vote was 395-to-34.
What the Hell are We Doing In Afghanistan Again?
Because Afghan President Hamid Karzai just gave a speech defending Kabul Mayor Abdul Ahad Sayebi, who was just sentenced to 4 years in prison at the Afghan anti-corruption conference:
Afghan President Hamid Karzai used a keynote anti-corruption speech on Tuesday to defend the most senior of his officials to be convicted of graft in years, a move that could anger Western backers who demand more accountability.
The president opened a three-day, anti-corruption conference, which had been billed by diplomats as a sign that Karzai took seriously the West’s concern over an issue seen as key to winning popular support against a resurgent Taliban.
That sound you hear is Eric Arthur Blair spinning in his grave at 4200 rpm.
Seriously, we need to get out now, because you can’t win hearts and minds with this corrupt ratf%$#.
Corruption Update: Another Bailout for Bob Rubin’s Old Firm
Seriously. The fact that the IRS, or let’s be clear about, Timothy Geithner’s Department of the Treasury is allowing Citi to get an additional $32 billion in tax breaks so that it can repay the TARP more quickly:
The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.
By way of comparison, the government invested $45 billion in Citi, which has, through various means, converted into common stock at above market valuations.
So, it now appears that we are paying Citi to pay us back the TARP money, $32 billion in tax deductions, so that they can pay back the $20 billion that is still owed as debt, overpay their next CEO.
With the top corporate tax rate at 35%, this translates to about us paying them $11.2 billion to get back our $20 billion, which was earning us 8%, or $1.6 billion a year……Lovely deal, huh?
I’m calling corruption on this.
I’m not sure if anyone in the White House is personally getting rich on this, but, much like the recently deceased Yegor Gaidar in Russia, they are creating and maintaining a corrupt system.
I’m sure, like Gaidar, they see themselves as heroic, but they are looting the United States.
Berbanke is Time’s Man of the Year
Well, he’s certainly been influential, but so was Typhoid Mary.
[on edit]
Paul Krugman reminds us all what it means to be a cover subject for Time Magazine.
Deep Thought
Who Knew that Santa Drank Beer
Not Enough Bullets: Porsche Cayenne Turbo Edition
Click for full size
SEC & DoJ need to fix this.
It should read: Sorry Ass in Jail!
So, Morgan Stanley Vice-Chairman Rob Kindler drives a Porsche Cayenne with the License Plate 2BG2FAIL.
Just delightful.
I need to figure out how to go long on pitch forks and torches.
And maybe some rabid ferrets, and ground beef, and honey, and really nasty stinging ants.
But no guns or rope: I oppose capital punishment.
H/t Matt Taibbi
Here is the Video of Howard Dean Disavowing the Senate Bill
I want him to be my president
Courtesy of the Big Orange Borg.
He makes it very clear: this is a tax on the American people that will be transferred to insurance companies.
He says that it’s not healthcare reform, or even that it’s not even insurance reform. He’s right.
He notes that reconciliation should have been used from the start, and he also notes that this bill will cause the Democrats to lose seats.
He also notes that this is about Joe Lieberman preening for attention.
The Washington press corps went after him hammer and tongs because, hell I don’t know why, in 2004, and he is so much better than anyone else on this it’s not funny.
Pwn36*
Click for full size
They paid someone to do this?
So, the Republican Party comes up with a URL shortener, the idea being that they would send people to the site, but put banners top and bottom that would advertise themselves and pranksters use it to link to pr0n:
The Republican party took down its innovative link-shortening tool Tuesday for several hours after pranksters had a field day using the tool to associate the GOP with bondage sites.
Having used Tinyurl and bit.ly for almost a decade, this is “innovative” only in the sense that House Minority John Boehner has a “human” complexion.†
As part of its new media strategy, the Republican party launched a new site called GOP.am on Monday. It’s a URL shortener designed to make it easy for conservative web surfers to exchange links to web pages.
This is what happens when people try to be hip and cool when they have not the slightest inkling what it means to be hip and cool.
So quoth the engineer, who has no clue as to what it means to be either hip or cool.
*Owned.
†Truth be told, if I didn’t know that he’s had it for years, I would have tagged it as jaundice.
Oral Roberts Dead at 91
Here is his obituary.
There is a lot that I could say, but, on the theory that it’s classless to speak ill of the dead, let me add the following:
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VPR Audio: VPR News: Dean On Health Care: “Kill The Senate Bill”
The Plum Line is breaking the story that Howard Dean is calling for the Senate bill to be scrapped, and for the house to push through reform via reconciliation, which only requires 50 Senators (+ Joe Biden) to pass.
VPR has a transcript of the interview:
This is essentially the collapse of health care reform in the United States Senate. And, honestly, the best thing to do right now is kill the Senate bill and go back to the House and start the reconciliation process, where you only need 51 votes and it would be a much simpler bill.
Yeah, but Republicans will call it a “Nuclear Option,” and say bad things about Barack….You know?
Great googly moogly.
December is a Good Month for Fairy Dust
First the A400M, and now the 787 have completed their maiden flights.
It took off at 1:35 PM PST, and everything appears to have went well, though the flight was cut short by bad weather.
What stands out for me is the amount of wing flex as it flies.
I saw it in various computer renderings, but it’s a bit of surprise when you see it for real.
Lieberman and Obama, and the Shark that They Jumped
Click for full size
This is one big shark that he jumped.
With Frikken Lasers!
It appears that the excessive wankerage of Joseph Lieberman on healthcare has even gotten the Villagers, specifically nepotism affirmative action hire Luke Russert (video at link), and wannabe villager Ezra Klein to admit that perhaps, just perhaps, Joseph Lieberman is not acting out of moral conviction, but instead is acting out of a need for revenge.
When you have guys like this calling Joe Lieberman small and petty, and, well basically evil, Holy Joe has done more than jump a shark, he’s jumped the shark, specifically, he’s jumping C. Megalodon*.
Of course, this doesn’t mean that Obama and His Stupid Minions™ are getting a clue on this, or that they understand that Joe just wants to turn the knife, and will keep pulling the football away, because his goal is to punish liberals for not recognizing his brilliance and moral superiority over the past 9 years.
Harry Reid, no doubt wanting to avoid Chris Dodd’s fate, where Dodd was hung out to dry by the administration for doing Geithner’s bidding and putting in a loophole on banker salaries, is now leaking like a seive, with sources who are clearly from his office saying that, Rahm Emanuel personally pressured Reid give in to Lieberman’s extortion. (See also here and here here)
As a result of this, 81% Of Dememocrats want Lieberman’s chairmanship of the Senate Homeland Security and Governmental Affairs Committee pulled, which to my mind, would be a good thing, because the Senate Democrats would have to start learning to live with 50+ the Vice President to pass a bill, and people like Lieberman (and Lincoln and Baucus) would be told to go pound sand.
If you want any more evidence of bad faith, Lieberman admits that he’s flipped on the Medicare option because liberals like it:
And he said he was particularly troubled by the overly enthusiastic reaction to the proposal by some liberals, including Representative Anthony Weiner, Democrat of New York, who champions a fully government-run health care system.
(emphasis mine)
You see, it’s all about pissing off liberals. It does not matter if hundreds of thousands of people die every year because of lack of insurance, Lieberman wants to punish liberals.
Joe Lieberman is a venal sociopath.
*The largest shark, and likely largest predator fish ever. It died out some 1.5 million years ago. The Genus is still in dispute, between either Carcharodon (Great White) or Carcharocles (broad toothed Mako). So in jumping C. Megalodon, you have jumped the biggest shark ever.
Economics Update
Click for full size
H/t Calculated Risk
H/t Calculated Risk
The 2006 spike is just before the new bankruptcy law
h/t Calculated Risk,
Well, we are in for a bumpy ride, with the Federal Reserve Bank of New York’s Empire State Manufacturing Survey falling 21 points in November. (top pic)
It’s still positive, barely, meaning that there is expansion, but it is a rather precipitous drop.
We also saw US industrial capacity utilization rise in November, (2nd pic down) so it appears that there is an upswing going on, albeit a slow one.
Even so, we are saw both homebuilder sentiment falling (3rd pic down), credit card chargeoffs rising (bottom pic), and the Architecture Billings Index falling in November on the other side of the ticket.
In energy, oil rose for its first time in 10 days, and in currency, the dollar was up, hitting an October high.
It’s Called Doing Your Homework
And Rachael Maddow, with the aid of a John Waters film, shows how the Teabaggers chose the name because they simply did not do the research on what the term meant in the first place, and not something that Maddow and Ana Marie Cox invented out of thin air, but was actually a cultural/sexual reference of long standing. (or squatting, see pic)
Has Fail Written All Over It
Headline at Bloomberg:
Well, This is One Way to Beat the System
If you order large amounts of coinage via credit card, the US Mint sends it to you free of charge, which means that you can turn around and deposit the money in the bank, and, if you have a credit card with reward miles, you still get those miles, for buying money, which you use to pay off the bill:
Enthusiasts of frequent-flier mileage have all kinds of crazy strategies for racking up credits, but few have been as quick and easy as turning coins into miles.
At least several hundred mile-junkies discovered that a free shipping offer on presidential and Native American $1 coins, sold at face value by the U.S. Mint, amounted to printing free frequent-flier miles. Mileage lovers ordered more than $1 million in coins until the Mint started identifying them and cutting them off.
Coin buyers charged the purchases, sold in boxes of 250 coins, to a credit card that offers frequent-flier mile awards, then took the shipments straight to the bank. They then used the coins they deposited to pay their credit-card bills. Their only cost: the car trip to make the deposit.
Neat scam, and as always, the only problem is that I discover it too damn late.