Archive for the ‘Wall Street’ Category

WILL THE 20’S ROAR AGAIN ?

Saturday, January 4th, 2020
THE WALL STREET JOURNAL

Will the ’20s Roar Again?

We are overdue today for another wave of creative thinking about everything—politics, the culture, education and morality. But this time, hold the roaring.

By Daniel Henninger January 2, 2020

If time travel were real, nearly half the U.S. population—and all the Democrats—would ship Donald Trump back to the Roaring ’20s, an era presumably more in sync with his instinct for creative outrage. But voters then would have been as startled by Mr. Trump’s political personality as voters now. Despite the dawn of the Flapper Age, their taste in presidents ran more toward Warren G. Harding, elected in 1920, whom no one would mistake for Donald J. Trump.

Harding’s campaign slogan was “a return to normalcy.” When he died in office 2½ years later, his successor was the uber-normal Calvin Coolidge, who won election on his own in 1924.

Other than the American presidency, though, the 1920s were in no way normal. In the U.S. and much of the world, the decade witnessed a remarkable economic and industrial boom. If we’re going to compare the ’20s then to the ’20s being born this week, an economic footnote is in order about a main cause of the first “roaring.”

When the 16th Amendment created the personal income tax in 1913, the original top marginal rate was 7%. By 1920 it was 77%, in part because of the Great War.

At the urging of Treasury Secretary Andrew Mellon, Congress enacted tax cuts in 1921, 1924 and 1926, with the top rate falling in middle-decade to 25% on incomes above $100,000. Prosperity followed, just as it did after the Kennedy tax cuts in the 1960s, Reagan’s reductions in the 1980s, and today—undeniably—after the Trump corporate rate cut of 2017. As in the 1920s, the consumer is again king, with disposable income available to buy an innovative economy’s extraordinary array of new products.

Pessimists say the Great Depression silenced the 1920s’ roar. It did, and some of its lessons deserve mention.

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U.S. FINANCING CHINA’S WORLD DOMINATION PLANS

Friday, November 15th, 2019

 

This is an article you have to read as there is so much new information in it regarding China and how our financial markets are being used to finance China’s expansion of their technological and military advances.  Nancy
IMPRIMIS – HILLSDALE COLLEGE

Why and How the U.S. Should Stop Financing China’s Bad Actors

October 2019  • Volume 48, Number 10 • Roger W. Robinson, Jr.

Roger W. Robinson, Jr.
Chairman, Prague Security Studies Institute

Roger W. Robinson, Jr. is president and CEO of RWR Advisory Group and co-founder and chairman of the Prague Security Studies Institute. He earned a B.A. from Duke University and an M.A. from George Washington University. He served as senior director of international economic affairs on President Reagan’s National Security Council, where he was the principal architect of the secret economic and financial strategy that proved decisive to the defeat of the Soviet Union. He later served as chairman of the Congressional U.S.-China Economic and Security Review Commission. Prior to his government service, he was a vice president in the international department of the Chase Manhattan Bank.

The following is adapted from a speech delivered at Hillsdale College on September 9, 2019, during a conference on the topic, “Understanding China.”

In the early 1980s, I served on President Reagan’s National Security Council. Prior to my time at the White House, I was a vice president at Chase Manhattan Bank, in charge of its USSR and Eastern Europe division. It was my job to assess the creditworthiness of the countries in that part of the world, and I had come to realize that the Soviet Union had relatively modest hard currency income—and that what little it had came largely from the West.

In 1982, the Soviets had an empire stretching from Havana to Hanoi, but their hard currency revenue totaled only about $32 billion a year—roughly one-third the annual revenue of General Motors at the time. They were spending about $16 billion more annually than they were making, with the funding gap—the USSR’s life support—being financed by Western governments and banks.

President Reagan had long believed that the Soviet Union was economically vulnerable, because he knew it lacked the entrepreneurship, technological dynamism, and freedoms that are the prerequisites of a strong modern economy. And when he learned that we in the West were financing its brutal regime, he committed to slowing, and ultimately terminating, that flow of discretionary cash.

Our European allies had a completely different approach. Their belief in Ostpolitik, as the Germans called it, presupposed that commercial bridge-building would lead to geopolitical cooperation. If the West would offer financing and trade with the Soviets, peace and prosperity would result. Meanwhile, the Soviets were using the proceeds of Western loans, hard currency revenue streams, and technological support to build up their military, expand their empire, and engage in anti-Western activities.

The Reagan administration drew the line on a project called the Siberian Gas Pipeline, a 3,600-mile twin-strand pipeline that stretched from Siberia into the Western European gas grid. If completed, not only would it become the centerpiece of the Soviets’ hard currency earnings structure, but Western Europe would become dependent on the USSR for over 70 percent of its natural gas, weakening Western Europe’s ties to the U.S. and leaving the continent open to Kremlin extortion. Moreover, the pipeline was being financed on taxpayer-subsidized terms, since France and Germany viewed the USSR as a less developed country worthy of below-market interest rates.

The U.S. at the time had a monopoly on oil and gas technology that could drill through permafrost—which we had developed for Alaska’s North Slopeand we imposed oil and gas equipment sanctions on the USSR and European companies that were helping to build the Siberian pipeline. At one point, despite the strain it placed on relations with our NATO allies, we closed the U.S. market entirely to companies that continued to supply the pipeline project over our objections. Four of the six affected companies went under within six months, and Europeans woke up to the fact that they could do business with us or the Soviets, but not both.

As a result of these efforts we capped Soviet gas deliveries to Western Europe at 30 percent of total supplies, delayed the first strand of the pipeline by years and killed the second strand, and eventually helped dry up the bulk of Western credits to the USSR. In a secret deal, we also persuaded the Saudis to pump an additional two million barrels of oil per day and decontrolled prices at the wellhead in this country, knocking oil prices down to about $10 a barrel—significant because for every dollar decrease in the price of a barrel, the Soviets lost some 500 million to one billion dollars. In short, the Soviet Union never recovered from these economic and financial blows. It defaulted on some $96 billion in Western hard currency debt shortly before the total collapse of the Soviet empire.

The story with China today has certain similarities, but with one big difference: the U.S. has been playing the role of the naïve Europeans. Since adopting the Kissinger policy of engaging with China in the 1970s, our government has operated on the assumption that economic and financial relations with China would lead Beijing to liberalize politically. And since 2001, when we backed China’s entry into the World Trade Organization, the pace at which we have given China access to our best technology and capital and trade markets has accelerated. Yet China has shown no signs of embracing individual freedoms or the rule of law.

Instead, with our support, the Chinese have launched a massive campaign to become the world’s leading superpower. We know about the “Belt and Road Initiative,” a strategic undertaking to place huge segments of the world under China’s influence or outright control. We know about “Made in China 2025,” a strategy designed to dominate key technology sectors—from artificial intelligence and quantum computing to hypersonic missiles and 5G. We know about China’s practice of forced technology transfers: requiring American companies to share their trade secrets and R&D in order to do business in China. We know about China’s predatory trade practices. We know many of these things only because President Trump has brought them to the forefront of national attention, for which he deserves credit. And the ongoing tariff war is a good thing in the sense that we’ve finally begun to take a stand.

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VIDEO – ELITES VERSUS MIDDLE AMERICA

Sunday, July 28th, 2019

 

One of the most hopeful and inspiring speeches I’ve ever heard. I guarantee you won’t regret the 20 minutes it takes.

Senator Hawley’s keynote at the National Conservatism Conference

10,899 views

Published on Jul 17, 2019

This week Senator Josh Hawley (R-Mo.) delivered a speech at the National Conservatism Conference where he discussed the state of American politics today. Senator Hawley also addressed the growing divide between cosmopolitan elites and the rest of America and the need for policies geared toward the great American middle.

 

 

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CONGRESS IS COMING FOR YOUR IRA

Saturday, July 13th, 2019

 

 

The Secure Act which is before the U.S. Senate for a vote can impact the taxes of  many of us and our children and grandchildren.   Take the time to look at this information and contact your senators if you would like to comment on how you want them to vote on  this bill.   Nancy
THE WALL STREET JOURNAL

Congress Is Coming for Your IRA

The Secure Act would upend 20 years of retirement planning and stick it to the middle class.

By

Philip DeMuth  Mr. DeMuth is author of “The Overtaxed Investor: Slash Your Tax Bill and Be a Tax Alpha Dog.”      July 10, 2019

Like grave robbers opening King Tut’s tomb, Congress can’t wait to get its hands on America’s retirement-account assets. The House passed the Setting Every Community Up for Retirement Enhancement Act, known by the acronym Secure, in May. The vote was 417-3. The Secure Act is widely expected to pass the Senate by unanimous consent. While ostensibly helping Americans save for retirement, the bill would actually reduce the value of all retirement savings plans: individual retirement accounts, 401(k)s, Roth IRAs, the works.

The main problem with the Secure Act is that it eliminates the stretch IRA,the fixed star in the financial-planning firmament since 1999. The stretch IRA lets savers leave their retirement accounts to children, grandchildren or other beneficiaries. Under current rules, the recipients can parcel out the required minimum distributions from the accounts over the course of their actuarial lifetimes. Payouts tend to be relatively small for children but grow in size over the decades until the inherited IRA might comfortably provide for the child’s retirement through the power of tax-deferred compounding. A parent could die with the knowledge that, whatever vicissitudes their children might experience in life, they won’t have to worry about retirement.

Congress wants to kill this. The Secure Act gives nonspouse beneficiaries 10 years to pull out all the money in an IRA. The effect would be to make more of an IRA subject to higher taxes sooner, as distributions are made in supersize chunks. As much as one-third more of an inherited IRA would get gobbled up by taxes than under current rules. When the Tax Cuts and Jobs Act expires in 2025, taxes will rise across the board. If President Trump signs the Secure Act into law, the stage will be set for a taxpocalypse sometime in the next decade.

In exchange for its windfall under the Secure Act, Congress will push back the age at which retirees must take their first required minimum IRA distributions from 70½ to 72. This isn’t the deal American savers were promised when they made contributions to their IRAs the last 20 years. Before, the optimal approach was for savers to leave their IRAs to their children or grandchildren and stretch the payouts over decades.

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“MAD MAXINE” AND WALL STREET

Wednesday, December 12th, 2018

Maxine, the fox guarding the hen house.   Stephen Moore gives us a  sweet bit of history regarding the  financial crisis.   Don’t you just love those Dems and their pious self righteousness !  Nancy

www.washingtontimes.com/news/2018/nov/11/why-wall-street-must-get-ready-for-maxine-waters/

WASHINGTON TIMES

Why Wall Street Must Get Ready for Maxine Waters

By Stephen Moore • Stephen Moore, a columnist for The Washington Times, is a senior fellow at the Heritage Foundation. His new book with Arthur Laffer is “Trumponomics.”

November 11, 2018

Democratic Rep. Maxine Waters of California appears a lock to become the next chairman of the powerful Financial Services Committee. Ms. Waters is pledging to be a diligent watchdog for mom and pop investors, and recently told a crowd that when it comes to the big banks, investment houses and insurance companies, “we are going to do to them, what they did to us.” I’m not going to cry too many tears for Wall Street since they poured money behind the Democrats in these midterm elections. You get what you pay for.

But here we go again asking the fox to guard the hen house.

Back during he the financial crisis of 2008-09, which wiped out trillions of dollars of the wealth and retirement savings of middle-class families, we put the two major arsonists in charge of putting out the fire. Barney Frank of Massachusetts and Chris Dodd of Connecticut were the cosponsors of the infamous Dodd-Frank regulations. Readers will recall that good old Barney resisted every attempt to rein in Fannie Mae and Freddie Mac and said he wanted to “roll the dice” on the housing market. That worked out well.

Meanwhile, Mr. Dodd took graft payments in the form of low-interest loans from Countrywide, while greasing the skids for the housing lenders in these years. Instead of going to jail or at least being discharged dishonorably from Congress, he wrote the Dodd-Frank bill to regulate the banks.

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FACEBOOK TO BANKS: GIVE US YOUR DATA, WE’LL GIVE YOU OUR USERS !!!!!

Monday, August 6th, 2018

 

I, for one, object !  How about you ?  Nancy

THE WALL STREET JOURNAL

Facebook to Banks: Give Us Your Data, We’ll Give You Our Users

Facebook has asked large U.S. banks to share detailed financial information about customers as it seeks to boost user engagement

August 6, 2018
Write to Emily Glazer at emily.glazer@wsj.com, Deepa Seetharaman at Deepa.Seetharaman@wsj.com and AnnaMaria Andriotis at annamaria.andriotis@wsj.com

The social media giant has asked large U.S. banks to share detailed financial information about their customers, including card transactions and checking account balances, as part of an effort to offer new services to users.

Facebook increasingly wants to be a platform where people buy and sell goods and services, besides connecting with friends. The company over the past year asked JPMorgan Chase JPM -0.31% & Co., Wells Fargo & Co., Citigroup Inc. -0.14% and U.S. Bancorp USB +0.08% to discuss potential offerings it could host for bank customers on Facebook Messenger, said people familiar with the matter.

Facebook has talked about a feature that would show its users their checking-account balances, the people said. It has also pitched fraud alerts, some of the people said.

Data privacy is a sticking point in the banks’ conversations with Facebook, according to people familiar with the matter. The talks are taking place as Facebook faces several investigations over its ties to political analytics firm Cambridge Analytica, which accessed data on as many 87 million Facebook users without their consent.

One large U.S. bank pulled away from talks due to privacy concerns, some of the people said.

Facebook has told banks that the additional customer information could be used to offer services that might entice users to spend more time on Messenger, a person familiar with the discussions said. The company is trying to deepen user engagement: Investors shaved more than $120 billion from its market value in one day last month after it said its growth is starting to slow.

Facebook said it wouldn’t use the bank data for ad-targeting purposes or share it with third parties.

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REPEALING DODD FRANK

Thursday, June 7th, 2018

 

THE WEEKLY STANDARD

Regulatory Release

May 24, 2018
The partial repeal of Dodd Frank could have gone farther, but it’s a good start.

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, and President Obama signed it into law. The legislation, more than 2,000 pages long, imposed cumbersome regulations on financial institutions, which the bill’s authors took to be responsible for the 2008 financial crisis and the consequent recession. The law also established the Consumer Financial Protection Bureau, or CFPB, an advocacy agency for consumers that, to no one’s surprise, quickly turned into a Naderite anti-corporation attack dog.

Complicated laws passed in the middle of a crisis are guaranteed to make things worse in the long run, and so Dodd-Frank proved. The Democrats, who controlled both House and Senate in 2010, took the blinkered view that the financial crisis had come about exclusively thanks to the unregulated excesses of the private-sector financial industry; regulating that industry was, for them, the only rational response. The law thus deprived the market of liquidity in the middle of a recession—with predictable results.

The Democrats ignored two important points. First, the role of the federal government itself: Government-backed mortgage giants Freddie Mac and Fannie Mae—then as now boasting powerful allies in Congress—encouraged precisely the sort of risky and foolish loans that led directly to the housing-market collapse and attendant financial meltdown. Second, what many of the investment banks did was already illegal: “cooking the books,” to use the popular term. To that extent, it was an enforcement problem, not a regulatory one. Greater regulation of investment banks largely missed the point—though it allowed powerful Democrats in Congress to blame someone other than themselves for the crisis. (The bill’s authors, Chris Dodd of Connecticut and Barney Frank of Massachusetts, both had a long history of encouraging Fannie and Freddie’s worst practices.) One of the law’s further follies is that it shackled small and mid-sized banks with the same provisions despite the fact that they had nothing to do with the financial crisis.

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MCMASTER’S # 2 – DINA ‘HABIB’ POWELL

Saturday, September 9th, 2017

 

Dina ‘Habib’ Powell is the US Deputy National Security Advisor right under McMaster. Still question why the NSC is getting rid of its best people?

www.breitbart.com/big-government/2017/09/07/clinton-cash-dina-powell-partnered-with-clinton-foundation-for-goldman-sachs-globalist-initiative/

Clinton Cash: Dina Powell Partnered with Clinton Foundation for Goldman Sachs Globalist Initiative

NEW YORK — When she served as president of the Goldman Sachs Foundation, the philanthropic arm of the Wall Street giant, White House Deputy National Security Adviser Dina Habib Powell repeatedly partnered with the Clinton Global Initiative for a globalist women’s project that served as the centerpiece of Goldman’s charitable foundation.

Besides partnership with CGI, Powell’s foundation also directly funded the Clinton Foundation and partnered with Hillary Clinton’s State Department. Powell herself was associated with numerous groups and projects linked to the Clintons.

Powell served as president of the Goldman Sachs Foundation, where she ran the foundation’s projects after Goldman Sachs was implicated in the 2007-2008 financial crisis and sought to resurrect its shattered image.

The Clinton Global Initiative (CGI) was founded by Bill Clinton in 2005 as a part of the controversial Clinton Foundation. CGI was co-founded by Doug Band, co-founder and president of Teneo Holdings. Powell’s now ex-husband, Richard C. Powell, is president of Teneo Strategy, an arm of Band’s Teneo Holdings.

Powell, an Egyptian-American, reportedly received a salary of $2 million per year from Goldman Sachs. Her financial disclosure form from this year reveals salary, benefits, cash bonuses and equity from Goldman Sachs totaling $6,128,950.

As head of the Goldman Sachs Foundation, she specifically oversaw two major charitable initiatives, one called 10,000 Women and another named 10,000 Small Businesses. 10,000 Women aims to provide at least that number of women around the world with a business and management education to further economic opportunities and global financial growth. 10,000 Businesses, according to Powell’s Goldman bio, “provides small business owners in the US and UK with business education and access to capital.”

The projects were widely viewed as Goldman’s efforts to resurrect its tarnished image after the firm was accused of unsound practices that allegedly helped precipitate the financial crisis. “Engaging wasn’t just the right thing, it was necessary, especially in the wake of the financial crisis when people said we weren’t doing enough,” John F.W. Rogers, Goldman Sachs’ chief of staff, told the New York Times of the company’s charitable efforts.

Goldman would later agree to pay a $5 billion settlement to the Justice Department for its alleged role in the financial crisis. “This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” acting associate attorney general Stuart Delery announced in a statement when the settlement was finalized.

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THEY WANT YOUR IRA

Saturday, April 9th, 2016

 

www.wsj.com/articles/they-want-your-ira-1459985170

THE WALL STREET JOURNAL

They Want Your IRA

The White House pushes investors toward government accounts.

Secretary of Labor Thomas Perez in Washington D.C. on April 30, 2015.
Secretary of Labor Thomas Perez in Washington D.C. on April 30, 2015. Photo: CQ-Roll Call,Inc.

The Department of Labor says its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. This is no coincidence.

Labor’s new rule will start biting in January as the President is leaving office. Under the rule, financial firms advising workers moving money out of company 401(k) plans into Individual Retirement Accounts will have to follow the new higher standards. But Labor has already proposed waivers from the federal Erisa law so new state-run retirement plans don’t have the same regulatory burden as private employers do.

This competitive advantage could be significant. Last month the board of California’s new “Secure Choice” retirement plan wrote to state legislators about their “exciting win” in Washington. They reported that employers enrolling workers in the new government-run plan “would have no liability or fiduciary duty for the plan.” Score! The California bureaucrats added that “we have been given the green light to auto-enroll workers into an Individual Retirement Account (IRA).”

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FANNIE AND FREDDIE FOREVER

Thursday, December 31st, 2015

 

THE WALL STREET JOURNAL
FANNIE AND FREDDIE FOREVER
Prior to the financial crisis of 2008, these two government-created behemoths owned or guaranteed more than $5 trillion in mortgage debt. When the housing boom went bust, taxpayers were forced to provide a $188 billion bailout to the toxic twins—and endure an historic financial crisis. So the taxpayer interest is in shrinking and eventually shutting down Fan and Fred.
But these days the Federal Housing Finance Agency that supervises the twins under federal “conservatorship” seems to view itself as the official preserver of Fan and Fred’s market share. So instead of simply telling the mortgage giants to stop buying and guaranteeing so many mortgages, the regulator has been encouraging the use of ever more complex financial instruments to keep Fan and Fred at the center of this multi-trillion-dollar market.

One Fan and Fred innovation—check your wallet when that word is used in government—is to use synthetic collateralized debt obligations (CDOs) to offload some of the mortgage risk they are holding. These new instruments are essentially a way for the mortgage giants to buy insurance against the possibility that lots of mortgage borrowers don’t repay the money they owe. But how about simply not holding these risks in the first place? Then taxpayers would have no need for insurance.
Fan and Fred are selling the CDOs to private investors, who are getting compensated with juicy yields in return for theoretically accepting much of the default risk in Fan and Fred’s bundles of mortgages. The program is ramping up and now covers at least some of the risks on more than $800 billion in mortgages of the more than $4 trillion that Fan and Fred still own or guarantee.
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