We are pretty sure his mom used to reassure him that he was a late bloomer (there was that blown spelling bee, after all), so the grins all around accompanying the news that he is widely and wildly supported by “other economists” and likely to see an invite to keep the spot, is a nice touch for The Beard.
Economists are nearly unanimous that Ben Bernanke should be reappointed to another term as Federal Reserve chairman, and they said there is a 71% chance that President Barack Obama will ask him to stay on, according to a survey.
Meanwhile, the majority of the economists The Wall Street Journal surveyed during the past few days said the recession that began in December 2007 is now over. Battling the downturn defined most of Mr. Bernanke’s term, which began in early 2006 and expires in January, and economists say his handling of the crisis has earned him four more years as Fed chief.
It does sort of make you wonder though, will Bernanke accept the invitation to stick around?
Economists Call for Bernanke to Stay, Say Recession Is Over [The Wall Street Journal]
Even a limp horse pulls. Everyone has a purpose. But you really wonder if there shouldn’t be closer adult supervision when Austan Goolsbee speaks in (non/semi/openly) public forums. Perhaps a pair of Kissinger glasses with teleprompter HUD? You certainly wouldn’t be pushing him too much farther in personal appearance. Maybe a discrete earpiece with a direct signal from Rahm Emanuel. Sure, it’d sound a little like he was giving dictation, but that’s whole lot better.
“If you tried to slash spending and raise taxes you would repeat what drove us into the Great Depression,” he said. “Treasury and the administration have embarked on a whole bunch of policies that have eased the credit spread quite substantially. There is no question that it is going to be a bumpy ride, but it is a signal achievement to be less worse.”
I’m not sure we had to bold that. Is this just poor copy-editing by Bloomberg? We don’t think so. We think it more likely these words actually escaped the Gool’s lips. What could this have been parsed from?
“There is no question that it is going to be a bumpy ride, but it is a signaled agreement to be less worse.”
“There is no question that it is going to be a bumpy ride, but it is a singular achievement to be less worse.”
“There is no question that it is going to be a bumpy ride, but it is a singular achievement to be bratwurst.”
Who knows. Then there are these gems:
I am thrilled, overjoyed that we aren’t all out of our jobs and we have prevented the Great Depression….
It is unrealistic to think you are going to solve all our problems in a three-month period.
Sheesh.
Obama Prevented Depression, Now Needs Patience, Goolsbee Says [Bloomberg]
Steven Rattner, head of the U.S. Treasury Department’s automotive team, has a net worth of at least $188 million and held shares in an investment fund run by the majority owner of Chrysler LLC, according to his financial- disclosure statement.
Rattner, co-founder of Quadrangle Group LLC, also bet as much as $150,000 on General Motors Corp.’s senior secured loans using a credit-default swaps index that guarantees the secured debt of 100 companies, including GM, the filing shows.
Rattner Worth at Least $188 Million, Disclosures Show [Bloomberg]
Day late, dollar short?
The situation is fluid.
It seems The Big Picture beat us to it.
It is, of course, the goal of everyone involved to shift businesses with large government stakes back into the private sector quickly. The question is, how do we define “quickly,” exactly. How about almost two decades?
GMAC LLC, which is giving the U.S. Treasury Department a 35.4 percent equity stake, said on Friday it might take 17 years for the government to shed its investment if the auto and mortgage lender were to go public.
The timetable suggests that federal involvement in GMAC’s affairs could persist long after troubles plaguing the economy and the auto industry end.
The reality is that if time lines like this are the only realistic alternative, we should consider another option:
Punt.
Directly related to this issue is a missive on credit penned by Megan McArdle recently. She closes with:
But maybe it’s worth remembering that the tyranny that credit scores exercise over our imagination have everything to do with the fact that we’ve built a society so utterly dependent on credit. If you didn’t need a credit card, an auto loan, and probably a mortgage to be considered middle class in this society, these opaque and unresponsive bureaus wouldn’t be the most important source of information about us.
Of course, we recognize that to save UAW jobs you have to save car companies and that means boosting car company revenue and that means getting consumers to buy more cars than the situation would generally warrant and that means providing them (all of them) with loads of cheap debt to finance their purchases and that means subsidizing loans and that means saving GMAC no matter what the cost and even if it takes 18 years, $750,000 per UAW job and hundreds of lives. We also recognize that this is supposed to be the brilliant “new way” to reform crony capitalism.
We repeat: Punt.
U.S. could take 17 years to exit GMAC after an IPO [Reuters]
It must be a measure of the times that a firm that regards itself with such favor would deign to even consider participating in something so base as a government recovery program, much less discuss it on the record. Or perhaps Mr. Kravis is just a lot more loose-lipped than he used to be. That’s saying something.
Still, it is hard to blame KKR for wanting to play. Accepting free money handed out without thought to risk or reward by dimmer bulbs is, after a certain sense, what private equity is all about. Kravis argues the point (unconvincingly).
KKR could take advantage of the infrastructure stimulus plan but is less interested in buying banks or their troubled assets, co-founders Henry Kravis and George Roberts have told the Financial Times.
“I think there may be some programmes where it will be appropriate for us to partner with the government,” Mr Kravis said. “I think one area in particular that I think is a very big need and where we will have opportunities to participate is in infrastructure.”
The Obama administration has committed hundreds of billions of dollars to infrastructure spending as part of its plan, ranging from road and bridge construction to investments in broadband and “green” energy.
Mr Kravis said the firm was looking at the public-private investment partnership and other initiatives. But the partners expressed caution about an overly opportunistic approach.
“Simply buying a pool of assets [through] a highly levered vehicle because a government is willing to give you more leverage than the markets and just sitting there and running off the assets and giving the money back to your partners is not what we do,” Mr Roberts said.
Of course this is totally ridiculous. This is exactly what private equity firms do and if the government had been offering buyout artists even a tenth of a percent lower rates than the leveraged finance groups that multiplied like rabbits over the last fifteen years the Treasury would now labor under a balance sheet bloated with large swaths of now-private businesses in or approaching default.
KKR sets out stall for role in stimulus package [The Financial Times]
Treasury Secretary Timothy Geithner said the U.S.’s $700 billion financial rescue package can’t be used to aid Lehman Brotherscities and states facing budget crises.
The law “does not appear to us to provide a viable way of responding to the issues that Lehman Brothers facesthat challenge,” Geithner told a House Appropriations subcommittee in Washington today. Among the hurdles: Money from the Troubled Asset Relief Program is reserved for financial companies, he said.
The Treasury chief said he will work with Congress to help investment banksstates such as California that have been battered by the credit crunch and are struggling to arrange backing for municipal bonds and short-term debt.
Geithner Says TARP Can’t Help U.S. States Solve Budget Crises [Bloomberg]
Nothing is fucked people. Nothing. Nothing at all. Green shoots are made thick oak. Cats have filed for voluntary separations from dogs and are no longer living together. Britney will retire from creating… anything. Including children. The Flu is cured. So is cancer. Just relax, will you?
Lawmakers in Washington are increasingly optimistic that the prospect of economic Armageddon is behind them.
Despite rising unemployment and continued dismal news in the housing market, which instigated the financial crisis, there’s been a definite shift in the Beltway’s economic mood.
“We’re headed toward the bottom,” said Rep. Paul Hodes (D-N.H.), who expects continued uncertainty in the economy but sees a recovery on the horizon.
“It will be a very slow, gradual recovery,” he said. “But it’s like falling off a cliff. It’s the place where the cliff hits the beach, that kind of end of collapse.”
…where your battered and crushed body will be gently nestled in a bloody bed of sand, quietly caressing you before the crabs begin to pick at your lips and the seagulls your eyes. How very beautifully peacefully consoling. Hey, how about you raise my taxes now?
Lawmakers don’t expect Armageddon [The Hill]
Optimism in the face of facts seems to be the theme this week, and it’s only Monday. Don’t shed any tears. Growth is just around the corner. Right after our massive deficit becomes a bit more massive and the tens of billions of savings add up to offset hundreds of billions. What are you worried about?
The Obama administration projected that the U.S. economy will expand at a 3.5 percent annual rate by year-end, a rebound that would be almost twice as strong as private forecasters expect.
In the economic assumptions of its 2010 budget request, President Barack Obama’s economic team didn’t change its 2009 predictions for a 1.2 percent drop in gross domestic product this year, slower inflation, higher unemployment and lower market interest rates than a year ago.
White House Sees 3.5% Growth by Year-End, Exceeding Forecasts [Bloomberg]
Yes, they were eye-wateringly high, but you didn’t really believe the initial budget deficit estimates that came out of the White House, did you? I mean, you knew they were a crock of reptile dung when first their stench wafted by your nostrils, didn’t you? Or did you? Were you soothed by the placating and calming words that accompanied the figures? Are you as likely to be cowed by assurances that there are a few billions in savings in there somewhere that over the years will “add up?” Exactly how financially challenged do the powers that be think we are?
Wait, don’t answer that.
The White House on Monday pushed up its forecast for the U.S. budget deficit for this year by $89 billion, reflecting the recession, a raft of new unemployment claims and corporate bailouts.
A fresh estimate of the deficit showed it coming in at $1.84 trillion — representing a massive 12.9 percent of gross domestic product — in the current 2009 fiscal year that ends on September 30. A prior White House forecast released in February projected a deficit of $1.75 trillion, or 12.3 percent of GDP.
White House forecasts higher U.S. budget deficit [Reuters]
