The market broke decisively up over it's glass ceiling, but on light trading. However, I expect the market to continue up for at least a short while - we just popped through the ceiling, it's time to dance on it, not drop back down.
Wells Fargo paid off their Tarp loans of $25B. The top five banks have now all, um, recovered. In other news, banks which are holding Tarp funds are supposed to make quarterly interest payments. Last quarter 55 banks failed to make their payments. Maybe there's still some problems out there. . .
Facebook is now involved in roughly 20% of all divorces. By helping people reconnect to old friends, it's also enabling affairs with old flames. Said one divorce lawyer of the facebook-inspired divorces, "The most common reason seemed to be people having inappropriate sexual chats with people they were not supposed to."
Fannie Mae and Fredie Mac, the two companies most culpable in the mortgage meltdown, have received hundreds of billions of dollars in bailouts and seen their share prices slide in the last year from $85 to $1. Meanwhile, treasury regulators just approved the compensation for their chief executives for 2009: $6 million each. I would have destroyed both companies for $3M, saving $9M.
Goldman Sachs is under investigation for selling mortgage backed securities to their customers, and then taking out bets that those same securities would collapse in price - this is the Wall Street equivalent of selling you a house, then taking out fire insurance on your house, then setting it on fire. Goldman customers lost over $100B on these securities, and Goldman made good money betting on their collapse.
Worried about Global Warming? In "Time to Eat the Dog, the Real Guide to Sustainable Living," Robert and Brenda Vale charge that a medium-size dog has twice the carbon footprint of a standard sport utility vehicle. Cats are roughly equal to small Volkswagens while two hamsters have the same footprint as a plasma television. Goldfish are comparable to a pair of cell phones. Have a Lab or a Shepard? You should feel guilty, guilty, guilty.
It's becoming clear that the government's attitude to the beleaguered greenback can only be described as benign neglect. With midterm elections in 2010, the Obama Administration will do everything it can to tack every last possible basis point onto gross domestic product growth and to prevent the unemployment rate, the most emotionally charged statistic of all, from reaching new highs. The decisions to give 57 million Social Security recipients an additional $250, and not only to extend the tax credit for first-time home buyers but to expand the subsidy to higher-income, trade-up buyers, smacks of a populism that will stop at nothing to generate growth, even with the deficit-to-GDP ratio already at a record of more than 10%.
The senate passed a health care reform bill, giving heavily subsidized insurance to 35 million. The senate bill was extremely finely balanced, it's very unclear that with any substantive change it can pass the senate again. Now it must be reconciled with the house bill, which is quite different in that it includes a government insurance plan. This bill, which is primarily aimed at insuring legions of the currently uninsured and taxing the rich to pay for it, is being sold to the American public as being about "cost containment" and "business competitiveness." Since by law hospitals in this country must treat anyone who shows up, this is not about getting health care for these people, it's about getting them insurance to pay for regular doctor's visits and cheaper prescriptions. Speaking as a businessman, I'm completely befuddled about how you add extra services for 35 million people and as a result costs go down for everyone. Recent polls suggest that about 2 out of 3 Americans are just as befuddled as I. The last time the Democrats were in charge, they cut military funding, put new work requirements on welfare, and balanced the budget. This time seems quite different - the national debt is set to double, hundreds of billions of dollars are being poured into Wall Street, and the poor get free health care and cell phones.
President Obama referred to "46 million uninsured Americans" in May 2009. Who are these uninsured? The Census Bureau says 9.7 million of the 45.7 million uninsured are "not a citizen." Of the remaining 36 million citizens, more than 17 million, nearly half, make at least $50,000 per year. Half of the remaining 19 million qualify for government health insurance programs. Even the liberal Kaiser Family Foundation put the number of uninsured Americans who do not qualify for government programs and make less than $50,000 a year between 8.2 million and 13.9 million.
There is a big debate on insuring non-citizens. Personally, I think this an easy issue. Everyone in this country is entitled to care if they show up at emergency rooms, so the more people who pay the better. My solution: Let anyone buy insurance, but subsidies are only available for citizens.