Northern Trust under pressure...

[RJ_Daley]

Craig, read my post on the choices, there were two and most didn't go for one of them.  

Dave, veto the bill that was squirted out of the stinking sausage machine as a whole or nothing sends the whole process back to the gate, more bickering, more obstructionism and worst of all, exponentially loss of confidence by the people that nothing will be done while they go down the tubes.  How long can this fester in the banking and financial sector, the jobs sector, etc.  How much more loss of confidence can those sectors suffer, for how much longer?  

I frankly don't think this is going to work for some of the same reasons you cite, regarding misdirected pork barrelling where every $ counts towards economic stimulus.  I get the phrase by O, "what do you think a stimulus is?".  But, I am just as worried that too many hands are in the pie, and it isn't enough where it should be more, and way too much misdirected where it needs little or none.  But, even if the O wants to do as he said, and not get compromised as he is, he isn't a dictator and is stuck in the system that we have, compromise.

But, I ask again, what is the realistic alternative?  If you think sending it back to the gate, is the answer, then I disagree.  In my opinion, there are zealots in the legislative system following the "I hope he fails" mantra in even more deveous ways than the big Limbo.  They are the equivalent to komikaze or hari-kari right wing idealogues that actually think their theory can survive the big crash that is on its way and will survive to take over.  If We keep delaying and all we will insure is that the millionaire will starve 6 weeks later than the thousandaire, and that a few days after the poor.  

That is my view, full of crap or not.  

[Joe Hancock]

 

Dave, veto the bill that was squirted out of the stinking sausage machine as a whole or nothing sends the whole process back to the gate, more bickering, more obstructionism and worst of all, exponentially loss of confidence by the people that nothing will be done while they go down the tubes.  How long can this fester in the banking and financial sector, the jobs sector, etc.  How much more loss of confidence can those sectors suffer, for how much longer?  

I agree that your description would have been the likely scenario, but it would have been exactly the kind of leadership this country needs right now, had OB sent it back to rid the bill of "earmarks". Instead, he folded on the terms of immediacy, and that doesn't bode well for his future leadership decisions, as far as my confidence level is concerned.

Joe

[Mike_Cirba]

Honestly, I think that sometime between election and inaguration somebody somewhere scared the sh*t out of Obama with some economic analysis because pretty quickly his language turned to "crisis", "catastrophe", etc...

So, either he now knows something we don't know and is taking the calculated gamble that doing something...even something obviously flawed...has much higher chance of success...or, of avoiding catastrophe, than continuing to wrangle for perfect bills without pork, and gone through meticulously (and time-consumingly)  line by line.

The system is frozen, people.

This IS a crisis, I think we're all realizing.

To mix metaphors, I think he's trying to pour water on the smoldering house, even if it lowers the lake and the kids might have to think about where else they're going to swim (or even drink from) next summer.

[Mike_Cirba]

I think there's a time for aggressive, even if imperfect action.

Just because he chose that path this time under obviously unusual and critical circumstances in the first month of his presidency when doing nothing, or delaying the process could have led to even further collapse doesn't mean he won't fight battles, even with his own party.

I think his decision on Iraq is proof of that.

Personally, given the choices we had, I think we clearly picked the best guy and even the Republicans seem to know that deep down.

[Craig Sweet]

Shivas...you are a typical lawyer putting words in my mouth...I never said the middle class doesn't itemize...some do and most don't.  Why should they when they get a better deal with the standard deduction?


And Shivas...your numbers don't add up....

"Better than 1/3 of the country itemizes.  And if half the homeowners (which is 2/3 of America) itemize, that's probably somewhere in the neighborhood of 75 million American households that own homes and itemize, which is probably better than half the country in terms of population because homeowners have kids!"

First of all...that is 1/3 rd of filers...not the "country"....and 1/2 the homeowners itemizing can't be 2/3rd of America, if only 1/3 of the country itemizes....

[Craig Van Egmond]

RJ,

   The problem is that you (and not just you) see this as a your camp/my camp thing and I see it as our camp. America (and the world) is in deep doo doo, but lets not sell out our children and grandchildren futures for this current generations many failings.

   Obviously Obama is not going to do anything about earmarks, he needs Congress to pass his budget, now is not the time to get tough. Here's what one of our elected officials had to say on that subject:

"House Majority Leader Steny Hoyer has a blunt message for the White House on the issue of earmarks: Back off.

On Monday, White House Press Secretary Robert Gibbs hinted that the White House would be pushing for earmark reform, telling reporters: "I think that you'll see that the president is going to draw some very clear lines about what's going to happen going forward.

But Hoyer made clear Tuesday that he would have none of it.

While the White House can “suggest ways for us to reform,” Hoyer said, “I don’t think the White House has the ability to tell us what to.”

And the majority leader was quick to point out that before he hit the campaign trail, Obama was serving the people of Illinois in the Senate — and obtaining federally-funded projects himself.

“The president, of course, had earmarks, as you’ll recall, not last year but the year before,” Hoyer said."

[Craig Sweet]

Shivas...

Here's some info from CNN that might clarify your numbers.

http://money.cnn.com/2005/11/03/pf/taxes/deduction_numberes/index.htm

[Jeff Goldman]

Anybody old enough to remember the Doonesbury series of strips right after Ford took office?  There was one where the radio guy, Mark Slackmeyer, was reading off the bad deeds of the Ford administration, and he concluded with something like,

"so, in the first 3 hours of the Ford administration the President has been guilty of several potential crimes.  While it is too early to talk of impeachment......"

Somehow, that strip came to mind.  

[Sean_A]

  Show me a government that is worth 39% of my wage and I will gladly pay.  The problem is, I don't believe any such animal exists.  Its almost like we need to step back to square one and figure out what is what with no carryover assumptions about the military, health care, etc etc etc.  

Ciao

Sean-I would say living in the US is definitely worth paying 39% of my wage-and I don't discount the great priveledge/lucky break I got being born in this great country.

The problem is it we don't know where it stops. Every time we turn around he references taking more from what he calls the super-rich.
I'd be thrilled if my total tax bill was just 39%.

According to Obama I'm super-rich-that's OK  -but he tends to lump us working "rich" in with the billionaires/multimillionaires with multiple houses etc.
 I guess when you've been a community organizer and a Congressman you really don't get it. When I was naive and inexperienced I thought $100,000 was a fortune.
His lack of recognizing that $250,000 less taxes (more like 50-60+%) doesn't leave a lot in high cost of living area where property taxes on normal 3 bedroom homes can be $30,000 annually +mortgage (again for many a much higher int. rate because it's a "jumbo"i.e. not federally subsidized) , health ins. +social security+ self employment tax+ etc. (all of which we pay EXTRA to SUBSIDIZE-there's that word again- the guy who doesn't have the insurance or pay his mortgage)

Jeff

All I can say is you are a far more tolerant man than I am where it concerns tax.  When I see how my money is spent it makes me wish Guy Faulkes was successful.  I just don't ever see getting 39% value - of course 39% is nowhere near the end of line once every coincidental tax is added up.  

Shivas

Unfortunately and regretfully, I don't see any other way out of this mess other than gov't led job creation programs.  There isn't a company or companies big enough to take on the situation and they would be foolish to try to.  The problem is the gov't didn't bank money when times were good.  That is when taxes should have gone up to save for a day such as this - precisely when folks could have afforded it.  The problem though is that presidents don't get elected on banking money for the future so there isn't a candidate on earth who is gonna campaign on that sort of platform - even though it is prudent and best for the long term prospects of the country.  The other problem is even if somebody did get elected on this sort of fiscal policy the gov't would find some way to waste the money rather than bank it.  Knowing how those knuckleheads work they would probably offer a tax rebate which makes about as much sense as a hole in the head!    

I must admit to being totally surprised by your feeling of betrayal by Bush and the Congress.  If there was thing I always credited Bush with is that he stuck to his guns.  Did you ever once get the impression that Bush was going to be fiscally responsible?  I know I never did.  As soon as he won the first term I knew we were going into war because that was part of the Bush deal - to sort out the Middle East which for him was first and foremost Iraq.  Though we always know that war costs far more than any predictions, what I didn't know was that Bush was going to offer that disastrous tax rebate which essentially tipped the gov't right there and then into a reckless tailspin of which there was no way to reverse.  That move came as a complete shock to me and really signaled that Bush wanted business to continue as normal with a war on.  It was then I knew the man was more than just the run of the mill political cretin, but a genuine example of a morally bankrupt leader.

Ciao    

[Peter Pallotta]

Guys, if you can take a break to answer a question please - a very basic one. The news today reported that in terms of their price-to-earnings ratio, stocks were trading at 1986 levels.  My question is, in a historic/long term context, were 1986 price-to-earnings ratios good, bad or indifferent? In other words, if I set aside the appearances of just terrible news and downward spirals in the stock market day after day,  are stocks today trading at reasonable prices? 

And believe me, this is a simple and sincere question - I don't know much about how the stock market works, and I'm just trying to find some good news

Thanks
Peter   

[John Kirk]

Anybody old enough to remember the Doonesbury series of strips right after Ford took office?  There was one where the radio guy, Mark Slackmeyer, was reading off the bad deeds of the Ford administration, and he concluded with something like,

"so, in the first 3 hours of the Ford administration the President has been guilty of several potential crimes.  While it is too early to talk of impeachment......"

Somehow, that strip came to mind.  

I'm just going to ask questions in this thread.

Which potential crimes did the Obama administration commit?

[Craig Sweet]

Shivas....

"Craig:  I hate to tell you this, but if 25% is a "vast majority" according to your math, I really don't have any reason to put any faith in any economic or mathematical analysis you apply to ANYTHING.  Sorry, but you're 100% dead nuts wrong on this.  Most people itemize.  Itemizing is not the exclusive tool of "the rich", as you portrayed it to be..."

The IRS says only 35% itemize....

Here's some info from the Tax Foundation:

"The table below shows the frequency of itemization by state and income group for tax year 2005. Only one state, Maryland, has an itemization rate over 50 percent, albeit just barely above 50 percent. This may seem surprising given the rhetoric we hear so often on tax preferences such as the mortgage interest deduction, which is portrayed as a way to help families achieve their dreams of home-ownership. But the rhetoric on this tax preference doesn't match the reality: in the long run, the home mortgage interest deduction tends to merely provide windfalls to real estate agents and homebuilders, and in the short run it benefits mostly high-income households—those who itemize, and those who need it least."

and this...

"Conclusion
The data in the table above show that itemization is highest among high-income taxpayers, as well as in states with high home values and high state and local taxes. Therefore, the tax savings associated with most itemized deductions tend to be distributed rather narrowly, both across geographic areas and across the income spectrum. As members of Congress begin to ask what's next with regard to the expiration of the Bush tax cuts in 2011, those who seek to make the tax code more progressive should find common ground with those who seek to make it more economically efficient. Both groups can realize their goals by eliminating tax preferences that mostly flow to higher-income taxpayers while also lowering marginal rates for all taxpayers."

[JESII]

Guys, if you can take a break to answer a question please - a very basic one. The news today reported that in terms of their price-to-earnings ratio, stocks were trading at 1986 levels.  My question is, in a historic/long term context, were 1986 price-to-earnings ratios good, bad or indifferent? In other words, if I set aside the appearances of just terrible news and downward spirals in the stock market day after day,  are stocks today trading at reasonable prices? 

And believe me, this is a simple and sincere question - I don't know much about how the stock market works, and I'm just trying to find some good news

Thanks
Peter   

I'll let the smarter guys answer your real question, but to me it reads like the answer to how you made a bogey on a hole...in 1986 we probably felt like we made a 12 footer, while today it's more like a three putt...

[Jeff Goldman]

Jim,

Based on historic bear markets, they may still be a little high, which I guess shows how overvalued they were compared to historic norms.  In the past, it has gone down into the single digits.  

Jeff

[John Kirk]

You know, the one where he promised to turn the entire economy on its ear with trillions of spending that doesn't solve the problem.

Go ahead, Dave.  Explain how you know this is so.

Because it doesn't work even in better economic conditions.  Never has.

While you are at it, explain why the trillions in question are not the direct and necessary result of poor decision making by previous administrations.

That's blame game nonsense I'm not interested in.

Kalen, explain why a $1 trillion investment in national infrastructure is a bad investment.

What trillion?  He's not spending anywhere near that on infrastructure?  Not even close.  If he was spending a trillion on a power grid, communications networks and rehabilitating manufacturing, I'd say that's a grand idea.  But that ain't the number.  I'd be happy to be proven wrong, but I recall a number of about $130 billion or so. 

My blood is starting to boil on this whole "blame Obama" train of thought six weeks into his presidency.

John, that's a mischaracterization.  It's more like "warn Obama".  It's more like "get your hand away from the stove!".    It's "do what you said you were going to do!".  That's not blame.  Other people will do plenty of that.  I don't have to.

1.  So you think that New Deal spending did not help to remedy the Great Depression.  Is that right?

2.  Of course you don't want to play the blame game. 

3.  Dear Mr. Volcker, my name is David Schmidt, a lawyer from Chicago.  I'm just writing to warn you that you may be making some huge mistakes here.

4.  Seems the Democrats would like to spend more on infrastructure, but felt they should compromise with the Republican's desire to stimulate with tax cuts.  Republicans howled in protest of infrastructure projects, saying they would take too long to initiate.

5.  Where do you see Obama not carrying through on his promises?  Besides, who cares what he promised if he does the right thing?  Rahm Emanuel hinted on "Face The Nation" that this may be the last time Obama allows Congress to easily pass "earmarks".  Obama may not be so willing the next time around, but for now, the decision has been made to spend money to hire people to avoid further deterioration of the economy.

I know it's hard to comprehend that we might have a leader who puts the interest of the people first, after being subjected to the inherent corruption of corporatism for so long.

[Peter Pallotta]

Jeff - does that mean that stocks today are trading low in terms of price-to-earnings, but not as low as they have during other market downturns?

If so, that seems like decent news -- unless there are relevant/mitigating factors that mean "low" today is somehow worse then "even-lower" in the past? 

Jim - I think you're a lot smarter than you let on; at least, I hope you are....

Thanks
Peter

[John Kirk]

Finally, I challenge any of you Republicans to show me a thread where the Democrats on this board were protesting the Bush administration six weeks into his presidency.  Give it a shot.  March 1, 2001.

[John Kirk]

1.  So you think that New Deal spending did not help to remedy the Great Depression.  Is that right?

I don't know enough about it to have a well-informed opinion, to tell you the truth.  I've read stuff from smart guys on both sides of the issue. I assume you have, too.

2.  Of course you don't want to play the blame game. 

I don't.

3.  Dear Mr. Volcker, my name is David Schmidt, a lawyer from Chicago.  I'm just writing to warn you that you may be making some huge mistakes here.

Yup.

4.  Seems the Democrats would like to spend more on infrastructure, but felt they should compromise with the Republican's desire to stimulate with tax cuts.  Republicans howled in protest of infrastructure projects, saying they would take too long to initiate.

I disagree with them.  I think real infrastructure spending is good, as long as it's the right infrastructure.  Obama is calling child care infrastructure.  It's ridiculous.

5.  Where do you see Obama not carrying through on his promises?  Besides, who cares what he promised if he does the right thing?  Rahm Emanuel hinted on "Face The Nation" that this may be the last time Obama allows Congress to easily pass "earmarks".  Obama may not be so willing the next time around, but for now, the decision has been made to spend money to hire people to avoid further deterioration of the economy.

If so, he'll have only compromised his stated principles once, and that's pretty good in that cesspool of bullshit a/k/a Washington.

I know it's hard to comprehend that we might have a leader who puts the interest of the people first, after being subjected to the inherent corruption of corporatism for so long.

Oh no, that's the blame game again, and there's plenty of that to go around.  John, where you and I disagree is this notion that he's putting the people first.  I think he's putting politics first.  If he was putting the people first, his budget wouldn't be loaded up with long-term "wish list" utopian stuff that might be fine some other day after reasoned debate, but will not stimulate the economy in the current circumstances.  For example, health care is an important issue for the country.   But that's got to wait, from a strictly economic perspective, because you can't just create jobs in health care - at least not jobs that actually heal people.  The people that heal, doctors and nurses, need to be trained and licensed.  Almost by definition, the only jobs you can create in health care in the short term non-healing jobs.  Where's the benefit there?   How does that do anything except increase the cost?

Sucked in.

Dave, thanks for the reasoned response.

In my opinion, the problem with health care is not quantity of health care.  It's the inefficient structure of the industry, with too many middlemen taking a piece of the pie.  We need to eliminate all the insurance middlemen, and make the drug companies compete for big contracts on price.

And yes, we need to educate new doctors and nurses and all types of scientists.

That's my view.

You watch.  Obama is going to clean up this mess, but it's going to take a long time before the economy starts moving forward significantly.  Everybody should get used to lower net worths.  They're not going back to 2007 levels for a long time.

[jeffwarne]

Guys, if you can take a break to answer a question please - a very basic one. The news today reported that in terms of their price-to-earnings ratio, stocks were trading at 1986 levels.  My question is, in a historic/long term context, were 1986 price-to-earnings ratios good, bad or indifferent? In other words, if I set aside the appearances of just terrible news and downward spirals in the stock market day after day,  are stocks today trading at reasonable prices? 

And believe me, this is a simple and sincere question - I don't know much about how the stock market works, and I'm just trying to find some good news

Thanks
Peter   

Peter,
1986 may not be the greatest confidence inspiring example of low PE's, considering it was followed by the crash of '87.

PE ratios can be measured many ways and have historically had a wide range, depending upon the business and industry a company was in and its' FUTURE growth prospects. (and of course how it was being measured)

Early in bear markets/recessions PE's often stay high because the stock price is falling, but the earnings (the E) are falling faster.
Eventually the stock price stabilizes well before the earnings come back.

the big question right now is when do earnings come back -in many companies they don't or won't and new leaders emerge.
Historically the stock price moves up before the end of a recession, in anticipation of earnings returning, but at the moment with the economy continuing to sink and with all the proposed legislation uncertainty--PE'S  could drop a long way-and most likely will overshoot on the low side, the same as they vastly overshot high in the late 90's.

Even if earnings return, PE's could stay low as an entire generation may shun stocks, much as they did in the 30's 40's and 50's.

I hear Obama say he thinks stock prices are low and that scares me to death-

[RJ_Daley]

John Kirk, I think you are very much on the right path.  I think that spending on health care is a key to future success in many ways including revitalizing our economy.  That prospect was there for decades, where an efficient and streamlined universal delivery system with the middlemen out of it, and a medical oversight board (yes rationing to the extent the people will put up with it via their votes for the leadership who appoint the board and make policies) that would be the kind of spending that would stimulate many high paying jobs, and take care of this sick hole in our country, and would have - and will if finally achieved - loosen up the American private and business investors because they can finally count on that basic security and certainty of universal health care with relatively fixed costs and would spend/invest what they are hoarding as a hedge against the health care monster, on growth and enterprise.  

If we would have wisely spread/shared the risk of national health care and managed it properly, by every measure I have seen, we would be spending less per capita on yearly health care costs than we do now, just by comparison to the other countries in the industrialized universe.  People like me (and I have no doubt that there are huge numbers like me) don't and can't invest our savings and funds elsewhere because we are frozen in fear and uncertainty that we are one sickness away from financial disaster.  So we hoard our funds, and pay more in premiums than need be, and don't get good health care or exclusionary plans anyway.  We are paying huge amounts to insurance co.s where middle men waste huge percentages of the premiums on their admin and bloated comps and perks.  

Just think if in this stimulus, 1 billion for a bricks and mortar and 1 billion to staff and furnish 100 new teaching hospitals and medical research centers was spent on that kind of infra structure.   How many medical industry jobs and more importantly, how many of the now ~50million citizens that are under or non insured would that take care of?  Them's good jobs, not cement pourers workers who go away when the road is done.

The most stupid non-investment this country has allowed itself to get buffaloed into in the last several decades was the fear of 'socialist' health care.  Just more example of conservative obstructionism and small ideas leaving large segments of our citizenry in the cold while a middleman class of insurance and pharma and facilities execs skimmed the cream that was left.  

I truly believe that had this country done the right thing on universal health care when the rest of the industrialized world did the right thing, we'd be a light year ahead of all of them competing in all sectors.  But, we are sucking hind tit, IMHO.

[Kalen Braley]

Finally, I challenge any of you Republicans to show me a thread where the Democrats on this board were protesting the Bush administration six weeks into his presidency.  Give it a shot.  March 1, 2001.

John,

First things first.  I'm not a Republican nor can I show you a thread  on GCA.com....but I can do one better than that.

The dems were already crying, bitching, moaning, etc about George Bush before he even set one foot in the White House.  Did you forget the election nightmare in Florida?  And all the corresponding bitching and moaning that Bush had won illigitmetaly, and his brother was the governor of the state and gave him favorable treatment, and how the Supreme Court used thier Republican majority to steal the election for Bush, etc, etc.

Oh yeah John, the dems didn't even wait until he was sworn in before they started up with the cry babying....

[Lou_Duran]

Kirk:  "So you think that New Deal spending did not help to remedy the Great Depression.  Is that right?"

Schmidt: "I don't know enough about it to have a well-informed opinion, to tell you the truth.  I've read stuff from smart guys on both sides of the issue. I assume you have, too."

From FDR's Treasury secretary and close friend, Henry Morganthau, conceded this fact to Congressional Democrats in May 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"

Google Henry Morgenthau for verification.  The quote was carried in the WSJ and I am fairly sure it has been fact checked.

The reply from the current administration is that New Deal spending was too small; not "bold" enough.  My daugher has used this same argument numerous times, quite successfully I might add, when approaching my wife.

[Peter Pallotta]

Jeff W - thanks much for that answer. I understand some of, and some of it I don't . But it seems like the "news" isn't as hopeful as I'd hoped.

Peter

[John Kirk]

Finally, I challenge any of you Republicans to show me a thread where the Democrats on this board were protesting the Bush administration six weeks into his presidency.  Give it a shot.  March 1, 2001.

John,

First things first.  I'm not a Republican nor can I show you a thread  on GCA.com....but I can do one better than that.

The dems were already crying, bitching, moaning, etc about George Bush before he even set one foot in the White House.  Did you forget the election nightmare in Florida?  And all the corresponding bitching and moaning that Bush had won illigitmetaly, and his brother was the governor of the state and gave him favorable treatment, and how the Supreme Court used thier Republican majority to steal the election for Bush, etc, etc.

Oh yeah John, the dems didn't even wait until he was sworn in before they started up with the cry babying....

How did that recount turn out?

[Kalen Braley]

Finally, I challenge any of you Republicans to show me a thread where the Democrats on this board were protesting the Bush administration six weeks into his presidency.  Give it a shot.  March 1, 2001.

John,

First things first.  I'm not a Republican nor can I show you a thread  on GCA.com....but I can do one better than that.

The dems were already crying, bitching, moaning, etc about George Bush before he even set one foot in the White House.  Did you forget the election nightmare in Florida?  And all the corresponding bitching and moaning that Bush had won illigitmetaly, and his brother was the governor of the state and gave him favorable treatment, and how the Supreme Court used thier Republican majority to steal the election for Bush, etc, etc.

Oh yeah John, the dems didn't even wait until he was sworn in before they started up with the cry babying....

How did that recount turn out?

Which one?  I've lost track of the number of recounts they did in Florida.....

The one that counted though had George Bush ahead.  Wouldn't it have been best for the dems in the spirit of unity and bi-partisanship to come together and bury the hatchet to finally get some closure and move on?  To let bygones be bygones and quit the crying to get the nation going in the right direction?  I guess not cause that ain't what happened....   

I guess what's good for the goose now (Obama) wasn't good enough for the Gander (Bush) back then?