August 2011

Bernanke Jackson Hole Speech Kicks the Can Over to Obama and Congress

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bernake say whatFederal Reserve Chair Ben Bernanke gave his long awaited Jackson Hole speech this morning. Now all are reading between the lines on whether more quantitative easing will be done and picking apart every single word as if Bernanke speaks in cryptography.

 

First, here is the speech paragraph that will generate quantitative easing, or QE3 buzz:

In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. We will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September, which has been scheduled for two days (the 20th and the 21st) instead of one to allow a fuller discussion. The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability.

Clearly QE3 is still on the table from this speech.

Steve Jobs Resigns

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Steve Jobs has resigned from Apple as CEO, effective immediately. Tim Cook, is now CEO. Cook has been the #2 man, as COO, and has been effectively running Apple since Jobs latest medical leave.

Jobs has pancreatic cancer since 2004 with a liver transplant in 2009. Jobs is now chairman of the board. Jobs resignation marks an end of an era in a way. Apple was the great innovator that Microsoft copied, later to be handed over to a past Coca-cola CEO who mired Apple into bureaucratic boredom, engineers fast asleep, as Gates and his vision of the world dominated the planet. Jobs lost control of Apple in 1984, only to return in 1997.

Jobs Letter:

To the Apple Board of Directors and the Apple Community:

I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.

I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.

As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.

I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.

I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.

Steve

I Like Statistics and So Should You

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statistically significantFunny title for an article. Numbers, statistics, stats....those boring people with their spreadsheets, graphs, always showing you up at a party in a game of Trivial pursuit.

Facts! Who needs 'em! Uh, we do. A very obscure thing is happening in Washington D.C. All of those dusty agencies with their legions of geeks and geekettes, cranking through numbers and collecting data are under attack.

Here are some of the statistical and science programs cut....so far the BEA has not been cut, but the Census was, by -$6.2 billion. This is before the infamous super Congress was created to cut much more out of the budget.

As a result the Statistical Abstract is about to go bye-bye. People are speaking out trying to save this treasure trove of data. According to this op-ed requesting America save the statistical abstract:

The agency’s 2012 budget would eliminate the Statistical Compendia Branch, which compiles the Stat Abstract and other publications (example: the “County and City Data Book”). The cut: $2.9 million and 24 jobs. Both the book and online versions of the Stat Abstract would vanish. This is a mighty big loss for a mighty small saving.

Chicago Fed National Activity Index -0.06 for July 2011

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The Chicago Fed National Activity Index, often referred to as the CFNAI, was released today with a –0.06 value for July. June was -0.38, so the monthly index shows some economic conditions improved from last month, although still nothing to write home about. Below is CFNAI graphed against real quarterly GDP percent change.

 

$1.2 Trillion to Banks, You 0

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Bloomberg News has researched a bombshell story, the Federal Reserve gave $1.2 trillion in secret loans to banks during the financial crisis, from August 2007 until April 2010. This is in addition to the TARP bail outs which was publicly known.

The $1.2 trillion peak on Dec. 5, 2008 -- the combined outstanding balance under the seven programs tallied by Bloomberg -- was almost three times the size of the U.S. federal budget deficit that year and more than the total earnings of all federally insured banks in the U.S. for the decade through 2010, according to data compiled by Bloomberg.

The top three banks at peaking borrowing are: Morgan Stanley, $107.3 billion, Citigroup took $99.5 billion, Bank of America $91.4 billion, or a total of $298.2 billion. Gets worse, foreign banks amounted to half the loans.

Half of the Fed’s top 30 borrowers, measured by peak balances, were European firms. They included Edinburgh-based Royal Bank of Scotland Plc, which took $84.5 billion, the most of any non-U.S. lender, and Zurich-based UBS AG (UBSN), which got $77.2 billion. Germany’s Hypo Real Estate Holding AG borrowed $28.7 billion, an average of $21 million for each of its 1,366 employees.

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