Only About 2½ Years Late

Tim Geithner has pretty much said that he won't serve in Obama's next term:

Treasury Secretary Timothy F. Geithner, the last remaining member of the Obama administration’s original economic team, said he doesn’t expect the president to ask him to stay in office if re-elected.

“He’s not going to ask me to stay on, I’m pretty confident,” Geithner said in an interview with Bloomberg Television today. “I’m confident he’ll be president. But I’m also confident he’s going to have the privilege of having another secretary of the Treasury.”

Geithner, 50, has led President Barack Obama’s efforts to pull the U.S. economy out of the worst recession since World War II, including overseeing bailouts of automakers General Motors Co. and Chrysler Group LLC, which have since emerged from bankruptcy. Before joining the administration in 2009, Geithner was president of the Federal Reserve Bank of New York, playing a key role in the government’s rescue packages for banks including Citigroup Inc. (C) and Bank of America Corp. (BAC)

Well, after completely f%$#ing the economy, the financial system, and the Democratic Party, through your relentless ass kissing of Wall Street, I guess that your work is done.

It should be noted though, the Cossacks work for the Czar.

FOMC Says that Rates Should Stay Low for 2-3 Years

I would expect Republicans' head to explode, because they will see this as "support" for Obama.

The Fed's Open Market Committee is saying that it expects rates to remain at near zero until at least late 2014.

The big news is that they have announced an explicit inflation target, 2%, for the first time ever.

While this is a refreshing step towards Fed transparency, we are in a debt overhang and a liquidity trap, and we should targeting a higher inflation rate, as this devalues debt and gives greater effect to low interest rates.

To my mind, they should be targeting 6-8%, but I'd take 4%.

Full Fed statement after the break.

Press Release

Release Date: January 25, 2012

For immediate release

Press Release

Release Date: January 25, 2012
For immediate release

Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee's dual mandate.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.

2012 Monetary Policy Releases

Obama Goes for Accelerated Review of Healthcare Reform

The Obama administration has decided not to appeal to the full 11^th circuit court and go directly to the Supreme Court, which means that we could see a ruling as early as June.

I'm not sure what the tactics are here.

There are three legal questions here

• The first question is whether they can rule on the mandate at all, since the anti-injunction act of 1869 prohibits suits against taxes until the tariff is actually levied.
• The second question is whether if part of the law is struck down, is the entire law struck down. (severability)
• The third question (and the biggie) is whether or not the mandate is constitutional. 

The third question is a slam dunk based on precedent, but I expect at least 4 of the justices to go full Bush v. Gore and find some contrived form of logic to ignore that.

It pretty much comes down to Justice Kennedy, but he ruled for Bush in Bush v. Gore, so I think that Obamacare is toast.

Well, We Have Mixed News on the Scott Walker Front

The good news is that some of his former staffers are facing more charges:

A new round of criminal charges is coming soon against at least a couple of Gov. Scott Walker's former county staffers for doing extensive campaign activity while on the taxpayers' dime, sources say.

The charges - which should be filed by District Attorney John Chisholm's office in the next week or two - will be part of the long-running John Doe investigation of Walker's aides and associates during his tenure as Milwaukee County executive.

Already, the probe has led to multiple felony charges against Walker's onetime deputy chief of staff, Tim Russell, and former county veterans official Kevin Kavanaugh. They are accused of taking more than $60,000 in donations intended for Operation Freedom, an annual event at the county zoo for veterans and their families.

Russell's domestic partner, Brian Pierick, was also hit with two felony counts for child enticement.

That's the good news.

The bad news is that under Wisconsin law, until a date is set for the recall election, Walker has no limits to his fund raising, and the Koch suckers have been showering him with money:

The Walker campaign announced on Tuesday that he raised $4.5 million in just the period from December 11 through Jan 17, and has over $2.6 million on hand. In all, he has raised $12 million since January 1, 2011.

“Governor Walker’s message of moving Wisconsin forward continues to resonate with voters,” said communications director Ciara Matthews. “It is this message, and the success of the governor’s reforms, that have inspired people to contribute to his campaign in overwhelming numbers. These donations will allow us to fight back against this baseless recall and ensure Governor Walker can continue to lay the foundation for a more successful Wisconsin and keep government working on the side of taxpayers.”

The press release notes that the donations came from a total of 21,443 contributions, including 16,406 of contributions of $50 or less. But under the surface, it becomes clear that Walker has been taking advantage of a key aspect of the state fundraising law for recalls — that until the election is officially triggered, the targeted incumbent can bring in unlimited donations.

That's a f%$# load of money. It's like $2½ for each man, woman, and child in the badger state.

The optimist in me hopes that the money wont matter. The pessimist in me …………

My Take on Obama's State of the Union Speech

I didn't expect to be impressed, and I wasn't.  I'm really not one of his fans.

Quick bullet points:

• His nods to populism seemed to be insincere.  I really don't believe that we'll see any effort to crack down on, for example, Chinese trade/currency manipulation.
• He couldn't resist inserting yet another "there are people on both sides" who are nasty bit, as was his digression about milk spill regulations, and icky regulations.
• Raising taxes on millionaires, and banning congressional insider trading and lobbying by campaign bundlers are winners, but won't pass this Congress.
• His statements on spending war savings on infrastructure is nothing new.
• His call for establishing a financial crimes unit is probably a good idea, assuming that it is not just rearranging deck chairs.
• I liked his shout out to Richard Cordray heading the CFPB.  It was pretty much his only "in your face" to the 'Phants.

Jon Stewart Must Love Newt

He does look a bit stunned though

Because the obvious hypocrisy and venality that is Newt must make his job easier.

Stewart's observation to Newt's fake outrage:

You imagined your wife, while she was dealing with having MS, would be open to you having sex with another lady you’d already been having sex with for six f%$#king years!” Stewart said. “I think you’ve got a pretty good imagination dispicability-wise.

And then there is Gingrich's claim to be running as an outsider:

You are the Washington outsider? When Washington gets its prostate checked, it tickles you.

Watch the video. It's a good way to spend 8 minutes and change.

Oh, This is Prize.

Freddie Dalton Thompson, whose 2008 presidential campaign debacle I called the "Fred Thompson Clown Show," has endorsed narcissistic sociopath Newt Gingrich for president:

Former Sen. Fred Thompson, the real life lawyer perhaps best known for playing one on television, announced his endorsement of Newt Gingrich Monday evening.

"I have come to the growing realization that Newt Gingrich is the guy who can articulate what America is all about," Thompson said of the former House speaker on Fox News.

This is kind of a clown show two-fer.