Monthly Archives: May 2013

05.01.13
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Reuters: Fed holds steady on stimulus, worried by fiscal drag

Chairman of the Federal Reserve Bank Ben Bernanke attends the Treasury Department's Financial Stability Oversight Council in Washington April 25, 2013. REUTERS/Gary Cameron

The U.S. Federal Reserve said on Wednesday it will continue buying $85 billion in bonds each month to keep interest rates low and spur growth, and added it would step up purchases if needed to protect the economy.

Expressing concern about a drag from Washington’s belt-tightening, the Fed described the economy as expanding moderately in a statement that largely mirrored its last policy announcement in March. Fed officials cited continued improvement in labor market conditions and did not change their description of inflation, saying it should remain at or below the central bank’s 2 percent target.

But policymakers reiterated that unemployment is still too high and restated their intention to keep buying assets until the outlook for jobs improves substantially.

“Fiscal policy is restraining economic growth,” the U.S. central bank’s Federal Open Market Committee said in its policy statement at the close of its two-day meeting. “The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation.”

Some economists were surprised that the statement did not contain a clearer acknowledgement of a recent weakening in the economic numbers.

Until recently, analysts had expected the Fed to buy a total of $1 trillion in Treasury and mortgage-backed securities during its ongoing third round of quantitative easing, known as QE3, with expectations the Fed would start to take its foot off the accelerator in the second half of this year.

Now, things are looking a bit more shaky.

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Click below for the full article.

http://www.reuters.com/article/2013/05/01/us-usa-fed-idUSBRE94003X20130501

05.01.13
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The Week: Why I could never be a liberal

Decisions, decisions...

For years now, I’ve been urging conservatives to embrace immigration reform.

It sometimes feels like an uphill battle. Increasingly, bloggers, pundits, and talk radio hosts are decrying the “Gang of Ocho’s” attempt at “Shamnesty.” Killing this effort could permanently solidify the Democratic Party’s lock on Hispanic voters, and potentially render the GOP irrelevant.

What is more, a crushing defeat could also sink the presidential prospects of Sen. Marco Rubio, arguably the most eloquent and visionary communicator since Reagan.

But though my friends on the activist Right may sometimes drive me nuts, I’ve never ever entertained the thought of going over to the dark side of the Left. David Brock might have garnered a lot of attention and publicity by switching sides, but for me, the Left is never an option.

This isn’t just because I believe conservatism will lead to a more prosperous and virtuous society, but also because — in the unlikely event either side were to obtain carte blanche authority — the Left scares me more than the Right.

There’s no shortage of examples. Melissa Harris-Perry, for instance, recently revealed a terrifying tenet of the Left, which says our children belong to the collective, not to parents or families. As I wrote, this sentiment was so feared by George Orwell that he included it in both 1984 and Animal Farm. I should have also mentioned Aldous Huxley’s Brave New World.

Look at extremists abroad: From Stalin to Castro to Chavez, some on the Left have consistently displayed not just a tolerance for heavy-handed authoritarian regimes (as the Right has admittedly sometimes also done) but also an admiration of them.

In recent weeks, some on the Left have mourned the death of Venezuela’s Hugo Chavez, even while cheering the death of Britain’s Margaret Thatcher. And a similar sentiment was on full display when Jay-Z and Beyonce, perhaps naively, enjoyed Cuban hospitality — without noticing the dissidents or the gulags they conveniently avoided on their vacation.

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Unfortunately for the author the Establishment GOP of today isn’t any better.  Click below for the full article.

http://theweek.com/bullpen/column/242780/why-i-could-never-be-a-liberal

05.01.13
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Motley Fool: GM Still Taking Taxpayers for a Ride

Last September when Reuters calculated that General Motors  (NYSE: GM  )  was losing almost $50,000 on every Chevy Volt it sold the carmaker was apoplectic with indignation at the “grossly wrong” numbers being thrown around. Sure they were losing money, every new technological advance does, but as they built more cars and then released Volt 2.0 they would become profitable.

Well, GM has certainly built more Volts over the last six months or so and they’ve even sold a few more, too, but then so has Tesla Motors  (NASDAQ: TSLA  )  and Nissan  (NASDAQOTH: NSANY  ) . In fact Tesla sold more of its all-electric Model S cars in the first quarter of the year than GM did with its Volt, and Nissan turned itself around enough so that its LEAF outsold the Volt in March.

We’ll get the April sales numbers in a day or so to see if any traction has been made as spring has gotten under way, and if GM was able to recover from March sales plunging 35%. One thing hasn’t changed month to month and that is that the Volt is still a money-losing proposition for GM and for the taxpayers who bailed it out.

In a presentation yesterday, CEO Dan Akerson admitted GM is still losing money on every Volt sold and will continue to do so for the foreseeable future. So what’s the solution? Not to admit defeat, that’s for sure, at least certainly not when the taxpayer is still nominally footing the bill for your company. Nope, what you do is double down and say you’re going to make even more of your money-losing cars than you did before and you’re going to make them even cheaper than they are now!

Akerson didn’t say how much GM was losing on each Volt, but he did say that if it ever hoped to make a profit on them the carmaker would need to cut as much as $10,000 from the cost of production. That, however, won’t be happening until the next-gen model is introduced, which won’t be until 2015 or 2016 at the earliest.

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Click below for the full article.

http://www.fool.com/investing/general/2013/05/01/gm-still-taking-taxpayers-for-a-ride.aspx