Jan 31, 2012, 6:45 am EST
Last Wednesday, the Fed announced after its Federal Open Market Committee (FOMC) meeting that it’s now forecasting just 2.2% to 2.7% GDP growth for 2012. The FOMC also forecasts an unemployment rate of 8.2% to 8.5% for 2012. Finally, the Fed provided its first-ever interest rate forecast, predicting that long-term rates will eventually rise to 4% to 5% — up substantially from current 10-year Treasury bond yields of 1.93%.
The biggest news coming out of the Fed’s unprecedented series of announcements last week was that the central banks pledged to extend its current 0% interest rate policy through at least late 2014. This shocking news is essentially an 18-month extension from the Fed’s previous guidance of low rates through mid-2013. Fed Chairman Ben Bernanke’s official reason for extending 0% short-term rates for six years (i.e., from late 2008 to late 2014) is that the U.S. economy remains “fragile.” He said the weak housing market is deterring economic growth.
Without saying so, what the Fed is really doing is protecting the banking system. Many banks have made “workout mortgages” with only 2% interest rates for homeowners who fell behind in their mortgage payments. Since banks are underwater on many of these low interest rate mortgages, the Fed can’t raise key interest rates because that would further strain the U.S. banking system’s Tier-3 (i.e., mortgage) capital. Read
Jan 30, 2012, 1:33 pm EST
With Mitt Romney drubbing Newt Gingrich in both the Florida polls and TV ad spending in the Sunshine State, news that Gingrich won an endorsement from another former presidential candidate would seem welcome.
How welcome, of course, depends on your view of Herman Cain.
Cain, the former CEO of Godfather’s Pizza and the National Restaurant Association, offered his endorsement to Gingrich during a surprise visit to a Lincoln Day Dinner event with Gingrich and the West Palm Beach County Republican Party (the Lincoln Day Dinner is a traditional celebration and fundraiser for state and county Republican Party organizations.). Cain is the second former presidential candidate from the 2012 election to endorse Gingrich, after Texas Gov. Rick Perry. Read
Jan 30, 2012, 10:47 am EST
Campaign season is in full swing, for both the Democrats and Republicans. And this means candidates from both parties are doing everything they can to raise money, from pledge drives to donation dinners to online stores. Even President Barack Obama is no stranger to these fundraising tactics.
What is strange, though, are some of the items being sold by Obama’s online store. In between the expected T-shirts, buttons and stickers are some wonderfully weird items. Here are five of the oddest items you can purchase:
1. Rhodium Ball Ornament
Because nothing says Christmas like a clear ornament with Obama and Biden repeatedly written in big blue letters across the surface. Read
Jan 30, 2012, 9:22 am EST
Our troops may have finally pulled out of Iraq, but that doesn’t mean the end of our troubles in the nation. Audits from the Special Inspector General for Iraq Reconstruction, an agency created to oversee rebuilding in Iraq, states that the U.S. Defense Department can’t account for $2 billion given to Iraq projects and that they have not provided Iraq with a complete list of projects funded by the U.S.
However, it’s not likely that the missing funds have been misplaced or stolen. The audits indicate that records tracking payments and expenses went missing, particularly during the start of the Iraq war, when government was understandably unstable and less concerned with records.
The inspector general also lays blame for discrepancies on the U.S. government, who only reported projects to Iraq that cost more than $250,000. Designed to help focus the country’s limited resources on key U.S.-backed projects, the inspector general stated that it made Iraq’s reconstruction planning more complicated and ignored less expensive projects that might still be more important to the country. Read
Jan 27, 2012, 1:08 pm EST
Mitt Romney’s money advantage seems to be rearing its green head in Florida finally. Reports have the former Massachusetts governor outspending former House Speaker Newt Gingrich 5-1 on television ads, news that comes alongside recent polls putting Romney up 9 points on Gingrich.
Gingrich’s campaign has spent about $1.1 million in the Sunshine State, while a Gingrich-aligned Super PAC has spent about $2.1 million on TV advertising, for a total of around $3.2 million. Romney’s campaign, on the other hand, has spent about $6.7 million on TV ads, while his Super PAC has chipped in an additional $8.8 million, for a grand total of about $15.5 million spent.
If you’re looking for figures on Ron Paul and Rick Santorum’s TV spending, well, don’t. Both candidates have sworn off television advertising in Florida. Santorum has apparently focused on other advertising mediums, while Paul has not been advertising — or campaigning — in the state at all. When asked why Santorum hadn’t fielded TV ads, an adviser for the campaign responded astutely. Read
Jan 27, 2012, 11:22 am EST
Clean energy appears to be a harder sell to Wall Street than Main Street. Ener1, the parent company of a electric car battery maker that received a $118 million grant from the Obama administration, filed for Chapter 11 bankruptcy yesterday.
Ener1 received the grant in 2009 from the Energy Department, and Vice President Joe Biden visited the company’s new battery plant in Indiana last year. It is the third company, after Solyndra Inc. and Beacon Power, to file for bankruptcy after a grant, a loan, or a loan guarantee from the government as part of the stimulus package.
While Solyndra’s collapse, and the revelation that the administration hurried approval of its $528 million loan, have been a black eye on Obama’s attempts to push clean energy, an Energy Department spokesperson indicated that the department still had confidence in the company in spite of the bankruptcy filing. They said that company restructuring would not affect work at the Indiana plant, that they did not anticipate jobs being lost as a result of the bankruptcy, and that additional private investment in the company “demonstrates that the technology has merit.” Read