Robert Oak's blog

TARP Bail Out Blasted

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nun with rulerThe Great Wall Street Bail Out, TARP, gets an F for f&@&... something the middle class. Neil Barofsky grades TARP and let's just say it's more than a ruler whack across the knuckles.

SIGTARP, aka TARP Inspector General, has released a new report (large pdf) on TARP. Here are the grades per TARP's own stated objectives.

  1. Increase lending to small business? FAIL
  2. Decrease Unemployment? FAIL
  3. Preserve Homeownership? FAIL
  4. Remove Moral Hazard? FAIL
  5. Reduce Financial Sector Size? FAIL

The above summary might be harsh, yet the report pretty much concludes the same thing. TARP was clearly a bail out for Wall Street, leaving Main Street in the dust.

It's clear SIGTARP is frustrated with Treasury. Here's an overall blast quote from the report against Tim Geithner:

Sunday Morning Comics - Donald Duck Edition

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Brought to you by Spinning Truth for Millions - We take damning truths, sprinkle them with fear, then spin what caused the damning truth to now be the solution. Yeah, we can't believe how well this works either.
Cup O' Joe

 

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break out the O.J....hang out with the pooch...time to check out the Funnies.

 

G-20 Meeting Gives More Power to China, India, Brazil

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g20Earlier we noted Geithner proposed balanced trade at the G-20 meeting.

How did that work out for ya?

Well, in response to the demand the G-20 confront currency re-evaulation, the G-20 gave China and Brazil more power.

More than 6 percent of IMF voting rights will be reallocated to countries such as China, while Europe will give up two board seats, G-20 finance ministers said yesterday after meeting in Gyeongju, South Korea. They also assigned the Washington-based fund a role in monitoring global trade imbalances and exchange rates.

Great, the biggest currency manipulator now has more power in the IMF, plus one of the biggest offshore outsourcing destination countries now have board seats.

After the changes take effect, the fund’s 10 biggest shareholders will comprise the U.S., Japan, four major European economies and Brazil, Russia, India and China. The IMF will have 24 board seats.

From International Business Times, that ain't too swank, it implies the Asian countries, particularly China, India, can act as a block, in unison.

Google Double Dutch

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Sounds like a sex act, doesn't it? In a way, it is. Business Week has a HOWTO on not paying U.S. corporate taxes, courtesy of Google. shell game

Next time you hear about how we need to lower taxes to make America more competitive, think of this story. International tax law must be a lucrative career. Grand Puppeteer of global money flows, all to play nation states and their corresponding corporate tax codes against each other. The game is to not pay taxes anywhere.

To reduce its overseas tax bill, Google uses a complicated legal structure that has saved it $3.1 billion since 2007 and boosted last year's overall earnings by 26 percent. While many multinationals use similar structures, Google has managed to lower its overseas tax rate more than its peers in the technology sector. Its rate since 2007 has been 2.4 percent.

All perfectly legal, Business Week explains how Google profits end up in Bermuda, and shows how multinational corporations pit national tax codes against each other.

Remember Those Green Jobs? Might Label Them Made in China

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Remember all of those green jobs hyped up during campaigns that would save the economy?

Remember how we learned 84% of Stimulus money for green jobs went offshore?

We have a new added dimension. China is subsidizing it's green industries unfairly.

The U.S. Steelworkers made a trade compliant about China and the Obama administration took it on:

All praise from here for President Obama’s courageous decision Friday to proceed with an investigation of China’s opportunistic and illegal trade practices in the clean energy sector. Those of us dedicated to supporting U.S. workers, U.S. jobs and U.S. manufacturing owe him an enormous debt of gratitude.

The Administration deserves a tremendous amount of credit for considering this case on its merits, rather than letting some overarching philosophy dictate the outcome. Demonstrating a willingness to challenge China’s cheating could make a huge difference for American workers and businesses in the clean energy manufacturing sector. And if the Administration’s efforts with China are successful, the ultimate result will be more American jobs.

China Raises Rates, the World Freaks Out

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China raised rates by a quarter percent. The move made headline news, currencies jumped, stocks tanked. Do we have yet another freak out over nothing? Or is it more China holds the globe's economy by the short hairs?

Firstly, the interest rate was about their housing market, which is overheated and to curb inflation, which has risen the most in 2 years.

China’s central bank unexpectedly announced Tuesday that it would raise interest rates for the first time in nearly three years, apparently in the hopes of dampening inflation and cooling off this country’s hot property market.

MarketWatch is reporting the dollar jumped 1.4% against a basket of currencies.

The U.S. dollar jumped 1.4% against a basket of currencies on Tuesday as a rate hike by China fueled worries that the world’s fastest growing economy was trying to slow down

The sudden interest rate increase happened at the same time The World Bank issued a new report, East Asia Pacific Update and China's GDP and CPI numbers are due out this week. The World Bank expects China's GDP to be 9.5% this year.

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