Lex Haris
Greenspan on Fedspeak

"As Fed chairman, every time I expressed a view, I added or subtracted 10 basis points from the credit market. That was not helpful. … And so you construct what we used to call Fed-speak. …I would catch myself in the middle of a sentence. Then, instead of just stopping, I would continue on resolving the sentence in some obscure way which made it incomprehensible. But nobody was quite sure I wasn’t saying something profound when I wasn’t." 

BusinessWeek, August 9, 2012

Geithner on Charlie Rose (July 23, 2012)

[Not an exact transcript - just notes to myself]

On question of letting all tax cuts expire so we can cut them next year [The Patty Murray idea]: “It’s not something any of us should contemplate.”

Timing of a plan: What we want to do is bring both sides together after the election. 

Recognition that we need a long-term plan: “Our challenges are very manageable. But we can’t put them off forever. We can’t delay this.” 

"If we say right now to the world, we’re going to extend all those deadlines, and we don’t do anything to get more growth now and lock in some fiscal savings, "what’s the going to do for confidence."

"It would not be responsible to put those things off."

Extending the taxes for the wealthy would be deeply irresponsible. It would cost $1 trillion over 10 years. Where are you going to find that $1 trillion. There’s not an economically responsible trade off. To delay would be expensive. 

The president is trying to balance two things: 

1) Healing the damage. more growth now

2) Break the political stalemate and restore fiscal sustainabilty.  

"Let’s extend the middle class cuts. If we do that, that takes away most of the uncertainty from the fiscal cliff."  

"And let’s have a balanced package of fiscal reforms, that raises revenue through tax reform and savings that extend the solvency of medicare, medicaid and SS. And leaves money for investment in education and infrastructure."

On the Bush tax cuts: 

"He’s going to stand by that. He’s absolutely committed to that." [to letting them expire - the tax cuts for the rich]

On Simpson-Bowles:

Why didn’t we embrace it more fully?
There are two reasons:
1) They chose as their mix too deep on defense for a commander in chief to embrace
2) Savings on entitlements were designed in a way that were very tough for us to support
http://www.charlierose.com/view/interview/12468

Romney’s ‘firing’ gaffe - the full quote

Here’s the full quote from CNN.com. http://www.cnn.com/2012/01/09/politics/gop-nh-main/index.html?hpt=hp_t1

Asked about health insurance at an event in Nashua, New Hampshire, Romney said he wanted a person to be able to own his or her own policy “and perhaps keep it the rest of their life.”

"That means the insurance company will have the incentive to keep you healthy. It also means if you don’t like what they do, you can fire them," he said.

"I like being able to fire people who provide services to me," Romney added. "If someone doesn’t give me the good service I need, I want to say I am going to get somebody else to provide that service to me." - Jan. 9, 2012

Krugman: Why U.S. debt isn’t like household debt

"Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.

"This is, however, a really bad analogy in at least two ways.

"First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

"Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves."

NYT: Jan. 2, 2012

2012 stock forecast - CNNMoney survey

Investment strategists and money managers expect the S&P 500 will rise 7%, on average, in 2012, according to an exclusive CNNMoney survey

While Schaeffer’s Investment Research’s Ryan Detrick agrees that debt problems will result in ongoing volatility, he’s more optimistic about the market’s overall performance for the year.

"Europe’s problems are obviously still out there, and there’s potential for more curve balls, but we’re making a bullish assumption: things won’t spiral out of control and we will get some good news," said Detrick, whose year-end target for the S&P 500 stands at 1,450, which translates to an impressive 15% gain for the year.

CNNMoney - Jan. 2, 2012

Bridgewater: Weak growth, but stocks an okay bet

From WSJ: in short, sounds like everything’s still a mess, but you can buy gold, government bonds…and stocks. 

"Robert Prince, co-chief investment officer at Bridgewater, and his managers at the world’s biggest hedge fund firm are preparing for at least a decade of slow growth and high unemployment for the big developed economies. Mr. Prince describes those economies—the U.S. and Europe, in particular—as "zombies" and says they will remain that way until they work through their mountains of debt.

"What you have is a picture of broken economic systems that are operating on life support," Mr. Prince says. "We’re in a secular deleveraging that will probably take 15 to 20 years to work through and we’re just four years in."

"In the U.S., leveraged investors who can borrow money at rates near zero could find a good deal in Treasurys, Mr. Prince says.

"Gold prices should resume a rally amid continued printing of money by the Fed and other central banks, Mr. Prince says. 

"Mr. Prince also thinks stocks are attractive from a long-term perspective, especially compared with bonds or cash. Broadly, discounted earnings-growth rates, which reflect the expectations about future earnings implied by current prices, are negative, he says.

"A moribund economic outlook "is pretty priced in right now," he says. "If we have a long, drawn out deleveraging process without substantial air pockets, chances are equities are a pretty good bet, ironically."

WSJ - Jan. 3, 2012 

Super Committee: Which baseline to use

I always need to take an extra minute to think through baseline issues. David Walker explains it pretty well in Politico (Oct. 20).

The supercommittee could choose from two primary bases to keep score. The first is the Congressional Budget Office’s extended baseline, or the current-law baseline. This assumes that the Bush tax cuts will expire at the end of calendar 2012; the alternative minimum tax will not be addressed and physician reimbursements under Medicare will be cut dramatically.

The other is the CBO’s alternative baseline, or the current-policy baseline — which assumes that most of the Bush tax cuts will be extended; the alternative minimum tax will be patched and physician payments will not be cut dramatically.

The latter method results in more than $6 trillion in additional deficits over the next 10 years.

Because the hole is deeper under current policy, it’s much easier for Congress to show big progress. That’s why Walker recommends looking at current law.

Breakdown of Obama jobs plan (Sept. 8. 2011)

Tax breaks ($253 billion)

Half of payroll tax (3.1%) on first $5 million payroll; Full holiday for added workers or increased wages (how long?) ($65 billion)

100% expensing of investment: $5 billion

 

$4,000 for hiring LT unemployed ($8 billion)

 

Extend payroll tax for workers ($175 billion)

 

“Returning Heroes”: $5,600 to $9,600 to encourage hiring of unemployed veterans

 

 

Infrastructure: $105 billion

$50 billion: Immediate investment in infrastructure

 

$10 billion: iBank

 

$15 billion: construction workers on vacant and foreclosed homes

 

$30 billion investment in school infrastructure

 

Access to high-speed wireless

 

 

Aid to states ($35 billion)

$30 billion to prevent layoffs of 280,000 teachers

$5 billion for public safety and first responders

 

 

Safety Net: $54 billion

Unemployment Insurance programs ($49 billion)

Pathways back to work fund ($5 billion)

 

Regulations

Speeding up payments

Work with SEC to reduce burdens for raising capital

 

NYT: Moves the Post Office is considering

 the agency is considering ideas, like gaining the right to deliver wine and beer, allowing commercial advertisements on postal trucks and in post offices, doing more “last-mile” deliveries for FedEx and U.P.S. and offering special hand-delivery services for correspondence and transactions for which e-mail is not considered secure enough.

Mr. Donahoe’s hope is to cut $20 billion of the $75 billion in annual costs by 2015. To do that, he wants to close many post offices and slash the number of sorting facilities to 200 from 500 and trim the agency’s work force by 220,000 people, from its current 653,000. (A decade ago, the agency employed nearly 900,000.)

NYT, 9/5/2011

Latest White House forecasts

The Office of Management and Budget said in a new report that it now expects the

GDP Growth
2011: 1.7%
2012: 2.6%
2013: 3.5%

Unememployment
2011: 9.1%
2012: 9.0%
2013: 8.5%

2016: 6.1%

From “Mid-Session Review”, Released Sept. 1, 2011