President Obama returned to populist rhetoric Jan. 14 when he announced a $90 billion tax on roughly 50 large banks, supposedly to recoup "every single dime" of the TARP dollars used to rescue the financial sector.
Nevermind that a number of those banks including Goldman Sachs, JP Morgan Chase and Morgan Stanley already repaid their TARP debts with interest and were forced to take the money in the first place.
Just recently BB&T's former CEO John Allison, who "adamantly opposed" TARP, told Fox Business viewers how the government strong-armed banks like his, that didn't need loans into taking money anyway.
Now Obama wants to assess billions of dollars in yearly "fees" on those firms. Talk about a raw deal.
According to the Wall Street Journal, the six largest banks - Goldman Sachs, JP Morgan Chase, Morgan Stanley, Citigroup Inc., Bank of America, and Wells Fargo & Co. - will bear most of the burden for this punitive bank tax if it is approved by Congress. The tax bill for each bank would range from more than $1 billion to more than $2.4 billion per year for 10 years the Journal said.
Obama claims the 10-year Financial Crisis Responsibility Fee isn't a "punishment," but the timing and tone of his announcement suggest revenge, not policy.
Former Barack Obama supporter Jim Cramer on Friday said the stock market would have a huge rally if Scott Brown defeats Martha Coakley in Tuesday's special senatorial election in Massachusetts.
"I think investors who are nervous about the dictatorship of the Pelosi proletariat will feel at ease, and we could have a gigantic rally off a Coakley loss and a Brown win," said Cramer on Friday's "Mad Money."
"It will be a signal that a more pro-business, less pro-labor government could be in front of us."
The often outspoken CNBCer marvelously declared it a "Pelosi politburo emasculation" (video embedded below the fold with partial transcript):
It goes without saying that what America's struggling banking industry doesn't need is for all of its depositers to withdraw their funds.
Regardless of this seemingly obvious truth, the folks at ABC and "World News with Diane Sawyer" actually did a report Friday profiling a campaign started by the far-left website the Huffington Post to get people to pull their money from the larger national banks and deposit their savings into "smaller, community-oriented financial institutions."
Although ABC's David Muir pointed out to Arianna Huffington how "a lot of people are going to look at this and say you are encouraging a run on the bank," the network along with the show's producers hypocritically ignored how they were doing precisely that by airing this report (video embedded below the fold with transcript):
While countries like China, Brazil and India are on the path to ascendency, the United States appears to be heading in the opposite direction, according to the former CEO of a major U.S. bank.
In a segment on the Jan. 7 broadcast of the Fox Business Channel's "Stossel," John Allison, the former CEO of North Carolina-based BB&T Corporation (NYSE:BBT), the 10th largest bank in the United States, warned of dark times ahead if the country continues on its current course.
"Now, it's a long-term trend," Allison said. "We will have some kind of economic recovery and we'll have some economic growth. I think the most likely intermediate scenario is stagflation like the 1970s."
The network news media cheered when Obama called for restrictions on CEO pay or bonuses that, according to reporters, exemplify the Wall Street "greed" that toppled the American economy.
But when $42 million in cash compensation packages were announced on Christmas Eve for Fannie Mae and Freddie Mac executives, the networks couldn't muster any anger toward the highly connected groups. Although Fannie and Freddie were two government-sponsored enterprises whose excessive risk taking contributed significantly to the housing crisis, the networks barely reported the story at all.
Salaries and bonuses at American International Group (AIG), Goldman Sachs, Citigroup and others have been criticized in dozens of network reports in 2009.
While much of the national media was focused on a Christmas Eve Senate vote to pass health care reform legislation, the Obama administration's Treasury Department was tending to other business that will have serious implications for the U.S. economy. But did anyone notice?
As Zachary Goldfarb reported for The Washington Post on Christmas Day, the Obama Treasury said it would lift the limits on what the federal government could provide in "emergency aid" to Fannie Mae and Freddie Mac - without seeking permission from Congress. That led CNBC CME Group floor reporter Rick Santelli to ask if anyone noticed and/or realized what was really at stake with this move during the Dec. 29 broadcast of "Squawk Box."
In keeping with the tradition of the holidays - the minds at MSNBC, the place for politics if you're of the lefty persuasion, decided rate the top 10 political stories of the decade.
And leading this gang of masters of the political journalism universe was "Hardball" host Chris Matthews, who on the broadcast of his Dec. 24 program, announced that conservative activism, mainly the tea party movement was the eighth biggest story of the decade - but labeled "angry white voters" (emphasis added).
"Welcome back to ‘Hardball' - our number eight political story of the decade, angry whites at town hall meetings across the country," Matthews said. "Lawmakers heard the wrath of angry voters."
If you believe polls, current Federal Reserve Chairman Ben Bernanke favorability has been slipping. A recent Rasmussen Reports poll indicates that only 21 percent of Americans favor his reappointment as the Fed chair.
And this hasn't gone unnoticed by some members of the Senate, where Bernanke's fate lies. Bernanke's reconfirmation passed through the Senate Banking Committee by a 16-to-7 vote on Dec. 17. But that margin calls into question how his reconfirmation vote on the Senate floor could go. And as CNBC "The Kudlow Report" host Larry Kudlow warned, that puts his reconfirmation in question.
"Look, ‘Helicopter' Ben passed the Senate Banking Committee vote on his reconfirmation," Kudlow said on his Dec. 17 program. "He got 16-to-7, but he lost seven votes. I think all the Republicans except Sen. Bob Corker voted against Bernanke, and they were joined by one Democrat, Sen. Jeff Merkley of Oregon. Now the reconfirmation goes to the floor of the Senate. So, I think Bernanke's reconfirmation could be in some trouble when that Senate vote occurs. I'm going to bet that most, if not all, of the 40 Republicans are going to vote against Bernanke and that they are going to be joined by a number of Democrats."
CNN’s Larry King equated efforts against further regulation of the banking industry to letting the mentally ill run their psych wards on his program on Monday. King pressed conservative columnist S. E. Cupp: “Banks are lobbying against a bill to tighten regulatory controls. Are you going to let the inmates run the asylum? You don’t think we should regulate banks?” [audio clips from the segment available here]
The CNN host moderated a panel discussion on the economy during the first segments of the program. The panel surprisingly leaned to the right on economic issues. Besides Cupp, King had Penn Gilette and Larry Elder, both libertarians, and liberal former Clinton administration official Robert Reich. After the host used the “inmates run the asylum” idiom in his question, the columnist first answered that “we do need regulation, but it’s putting them in a really tough spot.” King interrupted with a blunt one-word question: “So?”
At the top of Monday’s CBS Early Show, co-host Harry Smith enthusiastically proclaimed: “A frustrated President Obama gets set to read the riot act to the heads of America’s top banks.” Minutes later, Smith claimed it would be a “tough day for America’s biggest bankers” as the President planned to admonish them over executive compensation and lending practices at a White House meeting.
White House correspondent Bill Plante followed with a report on the meeting: “...the bankers are likely to get an earful when they meet with the President later today and he previewed some of his frustrations over their bonuses and over their reluctance to make loans on 60 Minutes.” Plante referred to an interview the Obama gave to 60 Minutes’ Steve Kroft Sunday night, but none of the Early Show coverage mentioned the numerous parts of that interview in which Kroft grilled the President on topics ranging from Afghanistan to health care reform.
NBC's Matt Lauer, on Monday's Today show, in his first question to RNC Chair Michael Steele, asked if opponents to Barack Obama's health care reform bill, were going to deprive the President of politically joyous holiday season, as the Today co-anchor pressed: "So is the President's stocking going to be empty on Christmas Day?" Lauer then went on to question if the Republican's entire strategy was that of simply "delaying and stalling," as seen in the following exchange:
MATT LAUER: Let's talk about health care reform. The President says he thinks the Senate will pass his version of the bill by Christmas. Joe Lieberman says he's not voting for it in it's current form. So is the President's stocking going to be empty on Christmas Day?
On his first day as the new co-anchor of Good Morning America, former Clinton aide turned journalist George Stephanopoulos lobbied for a windfall profits tax on the bonuses of bankers. Also on Monday’s program, senior White House advisor David Axelrod reminded viewers of Stephanopoulos’ liberal background. [Audio available here.]
After the rookie GMA host asserted that Axelrod "has an office right next to the President," the Obama official retorted, "Used to be your office, George." A laughing Stephanopoulos quickly spun, "That’s right. A long, long time ago."
The journalist clearly hasn’t lost the habits of a Clinton-era Democrat. He pressed Axelrod for new taxes on the bonuses of bankers: "David, why not tax the bonuses? Britain last week announced that they're going to have a big windfall tax, a one-time tax on these big bonuses this year because the banks got so much help. Why not do that?"
In the latest of a series of White House - media head-on confrontations, Jared Bernstein, the chief economist and economic policy advisor to Vice President Joe Biden, took on the Wall Street Journal in a Dec. 1 post on the federal government's WhiteHouse.gov Web site.
"There's a new report out from the Congressional Budget Office (CBO) on the economic impact of the Recovery Act," Bernstein wrote. "I'll get to the findings in a second, but somebody over at the Wall St. Journal's editorial page has a whole lot of explaining to do."
On yesterday's CNN Newsroom, anchor Kyra Phillips shifted to "Bad Boys" mode:
Lenders, lenders -- what you gonna do when they come for you? Call it an early Christmas present for people on the edge of losing their homes. The Obama administration cracking down on mortgage companies.
We'll tell you about it.
After the break:
PHILLIPS: Well, from your health (ph) to your home, the foreclosure crisis shows no signs of letting up, so the Obama administration is trying to fight back.
"You had me convinced - yes, he was. But you had me convinced that Jeremiah Wright and Bill Ayers and some of these people are all going to be in the Cabinet. We'd be better off if they were," Imus said.
On Fox's Nov. 22 "Fox News Sunday," former "Special Report" anchor and Fox News senior political correspondent was dead spot on target in many regards when it came to criticizing the tack President Barack Obama has taken with his foreign policy gestures.
First, Hume reflected on how Obama reacted on his trip to Asia last week. He noted that Obama was in a tough position, having to rely on borrowed Chinese money. However, "embracing weakness" was not the proper way for Obama to represent the country in Hume's view (emphasis added).
"Look, the president is in a weaker position than he might have been, not least because his policies have contributed mightily to the immense amount of new borrowing that's being done, much of it from the Chinese," Hume said. "So now you have the Chinese even worried about the size of the health care plan. That is unfortunate. But this president seems quite willing to embrace weakness as a position for the United States. I mean, the bowing and scraping that we see -- Saudi Arabia we saw it. We saw it on this trip in Japan."
But it is also something that some in the financial media are reluctant to support, especially judging from the tone of CNBC "The Call" co-host Trish Regan and comments CNBC senior economics reporter Steve Liesman. On the Nov. 20 broadcast of "The Call," CME Group reporter Rick Santelli made the case that Federal Reserve should be audited. He cited opposition to the Fed audit proposal from Sen. Judd Gregg, R-N.H., which was based on Congress' inability to be fiscally responsible.
"He said, ‘You know, there independence is important to protect the soundness of the dollar,'" Santelli said. "Has he read any papers lately or looked at any charts? Come on. Amen, amen that this process is happening. They're not taking away their independence to make a decision on interest rates. We need to know where the money is going. I remember when Ben Bernanke faced committees of elected officials and said, ‘We can't audit the Fed because then you might look unfavorably on some of the counterparties we deal with. That's like finding paraphernalia under your kids bed and then not asking where he got it."
Joe the Plumber was certainly on to something when he got then-candidate Barack Obama to admit he wanted to redistribute the wealth, according to former Republican presidential candidate and Arkansas governor Mike Huckabee.
Huckabee, who now hosts a show aired on the weekends on the Fox News Channel, told "On The Record" host Greta Van Sustren on Nov. 16 that Obama's policies go beyond just the redistribution of wealth, especially on health care. He likened a provision in the House health care bill that would require people to have some sort of health care coverage to a "poll tax."
"[W]hile we really wish [the president's priorities] were recovery, getting jobs back - that's the number one thing we ought to be focused on - but it appears to be redistribution," Huckabee said. "That's what's going on in the health care world, where we're trying to make sure that we've redistributed health care, taking it from people who have it, taking from them, giving it to people who may not even desire to have it, and forcing people into an unconstitutional system where they're going to have to virtually pay into a private marketplace in order to get full rights of citizenship. It's the equivalent of a poll tax."
According to Dimon, regulators should be given "authority to facilitate failures," wipe out shareholders and unsecured creditors, fire management and liquidate assets.
Dimon said this is better than the alternative: "This is challenging but worth doing. The alternatives, neither of which is acceptable, are to perpetuate the politically, economically and ethically bankrupt "too big to fail" idea, or to try to impose artificial limits on the size of U.S. financial institutions."
Disclaimer: we're talking politics here, not personal stuff . . .
If there's a bigger sourpuss in Congress than Barney Frank, I wouldn't want to meet him. On MSNBC this evening, the dyspeptic Member from Massachusetts got into it with, of all people, Ed Schultz. You might think the two libs would make beautiful progressive music together, but what made this spat especially entertaining was that Barney found himself being attacked . . . from the left.
The topic was the billions in bonuses awarded by Wall Street firms that had received TARP money. Schultz's beef was that Congress blew it by awarding TARP dough without obtaining advance agreement limiting bonus payouts.
"[I] think we're building a stairway to heaven in Dow prices on the back of paper and I think that, you know it seems kind of dire to me that 8 percent - 8,000, 9 percent - 9,000, 10.2 - 10,000," Santelli said. "I shudder to think where the unemployment rate is going to be at 11 and 12,000 in the Dow."
There's a lot of uncertainty with the U.S. economy and a lot of its recovery hinges on some key policy decisions due from the federal government.
On CNBC's Nov. 2 "The Kudlow Report," CNBC host Maria Bartiromo discussed her interview with former Chairman of the Federal Reserve and Obama adviser Paul Volcker from the Global Financial Leadership Conference in Naples, Fla. One of the topics Bartiromo reported on from the conference was the possibility the Bush tax cuts would be allowed to expire, which she insisted is unlikely.
Now that the Obama administration is attempting to take a victory lap on the U.S. economic recovery, claiming the $787-billion stimulus passed earlier this year was what did the trick, despite a cost of $160,000 per 'stimulus' job, as ABC's Jake Tapper pointed out, it has come at the cost of the U.S. dollar.
Since then, the stock market has rebounded nicely. The Dow Jones Industrial Average (DJIA) is off a March low of 6,547 points, even topping the 10,000-mark recently. But what has caused this nearly 50-percent jump? According to CNBC's Larry Kudlow - loose monetary policy by the Federal Reserve, with low interest rates, has made it possible for the markets to rise, with the 'loose' money going into the market.
"The funny thing is, Steven, it has gone into stocks - I mean the stock market guys ... there's no real multiplier for the economy, right?" Kudlow said on his Oct. 30 CNBC program. "But it has gone into stocks and the stock market crowd wants to see the Fed to keep pouring the money in no matter what happens to the U.S. dollar."
Give Ed Schultz credit for something: on his MSNBC show this evening, he hosted an amusing smackdown between Barney Frank and Ralph Nader, perhaps the two most morose public men in America. For once, Barney was attacked from the left. The gist of Ralph's rebuke was that Frank hasn't gone far enough in regulating the financial industry.
Frank was finally so provoked that he claimed/admitted that when it comes to regulation, Democrats are "trying on every front to increase the role of government."
The Federal pay czar announced that executives in companies that took bailout funds from the Troubled Asset Recovery Program should not receive the bonuses that were announced recently. And there are rumblings about extending government reach into the executive compensation at all publicly traded companies. That would be just fine with Harry Smith at CBS's "Early Show."
On Oct. 22, Smith interviewed Elizabeth Warren, the chairperson of the Congressional Oversight Panel - basically the government-mandated babysitter of companies that were bailed out by TARP funds.
"Guys, you can't party on like it's 2007," said Warren. "If you're going to have to take taxpayer dollars, then it means the game has to change."
Worried about a potential slippery slope with the Obama administration dictating what people are paid in the private sector - TARP bailout or no TARP bailout? Message from CNBC's Jim Cramer: Get over it.
On CNBC's Oct. 21 "Street Signs," the "Mad Money" host ripped into Wall Street executives that objected to the government dictating the rules of compensation. Opponents argue these pay restrictions inhibit Wall Street firms ability to retain the best employees possible - an argument Cramer says doesn't matter.
"Hey, there's no God-given right to work at those companies," Cramer said. "These people can go off if they want to. I know that [Citigroup Inc. Chief Executive] Vikram Pandit has kept 23 of the top 25 people with very severe pay restrictions. If you believe in your institution, you stay. See, a lot of Americans are looking at those pay cuts and thinking, ‘How do I get in on the action?' So I don't really care."
Showing that Reverends Al Sharpton and Jesse Jackson have become interchangeable, in the 2:00PM ET hour on MSNBC, anchor Contessa Brewer mistakenly introduced Jackson as Sharpton: “Joining me now to talk about this and the nation’s real problem of joblessness, the Reverend Al Sharpton....I’m so sorry, the – the script in front of me said Reverend Al Sharpton...I know who you are, Reverend Jackson.”
Brewer was just starting to bash capitalism as she made the error: “A Goldman Sachs adviser....Brian Griffith says, quote, ‘we have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all.’” She then sarcastically asked Jackson: “What’s your reaction to hearing someone say, you know, when it comes to income inequality, all’s well, the rising tide floats all boats?” Before replying, Jackson had to clarify his identity: “I’m Reverend Jesse Jackson.” Which prompted Brewer’s apology. Jackson went on to argue that Griffith’s claim was a “vulgar statement.”
Want to make a big splash to bolster your chances in a political campaign? A tried and true strategy for some attorneys general has been to champion a populist position by exploiting the legal system for publicity. Just look at the lead up to the launch of former New York AG Eliot Spitzer gubernatorial campaign with his attacks on Wall Street.
And that appears to be the playbook California Attorney General Jerry Brown is using in a lawsuit accusing State Street (NYSE:STT) of cheating the state's two largest pension funds, the California Public Employees' Retirement System and the California State Teachers' Retirement System, of at least $56.6 million.
However, CNBC's Michele Caruso-Cabrera wasn't afraid to ask Brown if that was indeed the case in an Oct. 20 interview on CNBC's "Power Lunch."