Last Thursday, you were all shocked (not) to consider the possibility that members of Congress might be making money by dishing out dirt on legislation they're brewing up, this time to traders who profited from leaky pipes in the Senate or House.
I'm going to tell you what the feds and the courts are trying to do here. I expect a full-on, separation-of-powers battle royale.
Read all the ugly details, in addition to scandals with the IRS and BNP Paribas, here…
- The U.S. Farm Bill Summed Up in Five Facts After three years of squabbling, Congress finally has passed a new five-year farm bill. However, many don't realize that almost every American will be touched by this bill. And this time around, a lot of big changes were made. Here's what you need to know...
- Congress Just Played a Trick on American Taxpayers After the debacles of 2008, you'd think that Congress would be looking for more ways to restrict Wall Street's excesses. But for some reason, the House just passed a bill that does the exact opposite - it actually reduces restrictions that were put in place to try to prevent a repeat of the nightmares of 2008. You won't believe why they thought this would be a good idea...
- How Leadership PACs Turned into "Slush Funds" for Congress As individuals, members of Congress make more than three times as much as the average American household. And their average net worth is nearly $1 million. So why are they siphoning off political donations for such personal indulgences as trips abroad and tickets to NFL games? This is an insult to every hard-working American...
Why Congress Is Still the Best Club in the World
Oh, to be a Washington insider...armed with "inside information," the kind that moves markets.
Not that anybody in Congress would ever use their position as crafters of law or disseminators of dollars to special interests to make a few dollars.
But members of Congress and their staffs were caught with their insider hands open last year, forcing Congress to pass legislation slapping their own wrists if members trade on "congressional knowledge."
It was designed to prevent insider trading among lawmakers.
Any guesses on how well that worked...
To learn more about Wall Street's and Washington's shenanigans and opportunities, and to subscribe to Shah Gilani's free newsletter Wall Street Insights and Indictments click here... Read More...
How the Richest Members of Congress Made Their Fortunes
Capitol Hill is brimming with millionaires, but if you think that most of the richest members of Congress got that way from working hard, guess again.
When you browse through the list of the richest members of Congress, one of the most common themes is that many of them married into wealth, regardless of gender.
The best-known beneficiary of spousal wealth is former Sen. John Kerry, D-MA, who recently left the Senate to serve as Secretary of State in the Obama administration.Read More...
Debt Ceiling Bill Nothing More Than a Band-Aid
We have a short-term debt ceiling fix - with emphasis on short term.
U.S. President Barack Obama Monday night signed into law a bill suspending the debt ceiling, a move that allows the government to avoid default-at least until August when Congress will again have to act to prevent such a scenario.
The new law lifts the current debt limit through May 18, allowing the federal government to continuing borrowing to pay its bills until then.
But Congress does have more leeway than the May 18 deadline. The Treasury can use "extraordinary measures" to access funds, which will give it until August before the risk of default comes up again.Read More...
Are Steep U.S. Spending Cuts Inevitable?
U.S. Rep. Paul Ryan (R-WI), the chairman of the House Budget Committee, is adamant Republicans will resist any further tax increases - a staunch GOP stance that makes steep spending cuts almost certain.
Ryan, the 2012 vice president nominee, told NBC's "Meet the Press" Sunday that the $1.2 trillion worth of automatic spending cuts will take effect because "Democrats have opposed our efforts to replace those cuts with others."In the NBC interview, Ryan took aim at President Barack Obama.
"I don't think that the president actually thinks we have a fiscal crisis," Ryan said. "He's been reportedly saying to our leaders that we don't have a spending problem, we have a healthcare problem. That leads me to conclude that he just thinks we ought to have more government-run healthcare and rationing."Read More...
Will the Debt Ceiling be Good for Gold and Silver?
Investors preparing for Washington's budget battle need to know: Will the debt ceiling be good for gold and silver?
Thanks to recent legislation passed in the U.S. House of Representatives Wednesday, the debt ceiling could be extended until May 19. The bill now moves onto the Senate where it is expected to get the green light, then should be signed quickly by U.S. President Barack Obama.
That gives investors time to prepare for what any budget decision - or indecision - out of Washington will do for their investments.
While the bill leaves the government without a long-term budget strategy, investors ought to have a plan in place.
One thing they can plan on is higher silver and gold, and here's why.Read More...
Debt Ceiling Bill Includes Controversial "No Pay" Plan
Republicans will vote tomorrow (Wednesday) on a debt ceiling bill that will give Congress nearly four months to make some major budget decisions - or risk losing out on pay.
The bill aims "to ensure complete and timely payment of the obligations of the United States Government until May 19, 2013," according to a release Monday from the House Rules Committee. Exactly how much the $16.4 trillion debt ceiling will be lifted hasn't been discussed.
In a significant shift in GOP strategy, the legislation does not include specific spending cuts, like previously when Republicans have requested dollar-for-dollar cuts to match the debt ceiling increase.
What it could include is a requirement for both the House and Senate to pass a budget by as early as April 15 or have Congress members' salaries held in escrow until one is passed - what the GOP has coined a "no budget, no pay" rule.
"[I]f the Senate of House fails to pass a budget in that time, members of Congress will not be paid by the American people for failing to do their job. No budget, no pay," House Majority Leader Eric Cantor, R-VA, said last week.Read More...
Ours is the Greatest Story Ever Written
Ask practically any American this week about their country, and they will likely tell you that - despite its faults - the United States is the greatest nation on earth.
I would even take it a step further by saying the United States is the greatest country there is, ever was, and ever will be...
But then again, I'm a bit of a homer.
Maybe it was all those World War II movies I watched with my great uncle when I was kid. He was an old sailor who was big on Admiral "Bull" Halsey, and by extension, so was I.
Or maybe it's because I'm much older now, and I realize just how dark the world would be without her. That much I am sure of.
But what I love most about my country is that it was founded on the idea that all men are created equal and are born with unalienable rights - among them life, liberty, and the pursuit of happiness.
Of course, Thomas Jefferson put those words much better than I ever could some 236 years ago when he penned the Declaration of Independence.
What you may not know is that Jefferson was just 33 years old when he sat down to the task of writing one of the most important documents of all time.
Chosen by John Adams for his "happy talent for composition and singular felicity of expression," it took Jefferson 17 days to complete under the apparent constant harassment of horseflies from a nearby barn. Being mid-June in Philadelphia, it was also undoubtedly quite warm.
I often wonder what that must have been like, using only an ink well, pen, and candlelight at night. Did Jefferson know his elegant phrasing and high tone would go on to forever change the world?
What was it like, that moment when he scratched out the word subjects and replaced it with the word citizens?
Was it a slip from a lifetime of habit... or Jefferson's first recognition that the people of his cause were no longer subjects of any nation- but citizens of an emerging democracy?
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Stock Market Today: Obamacare Upheld
Volatility in the stock market today is high due to several factors both domestically and abroad.
The Obamacare ruling is the main driver causing uncertainty in the market, followed by the start of the European Union summit today in Brussels.
The Obamacare ruling had been anticipated with such fervor that reporters camped in front of the Supreme Court for days before the decision.
They finally got one - and it may come as a surprise to many.
The controversial mandate that requires everyone to purchase healthcare by 2014 or pay a small fine was upheld. The vote came in at 5-4 with Justices Scalia, Kennedy, Thomas and Alito dissenting.
Chief Justice Roberts said that the mandate is not a valid exercise of Congress's power under the Commerce Clause, but it will survive as a tax.
Republicans had been almost certain that the mandate would be stuck down and President Obama can now breathe a small sigh of relief that his healthcare overhaul has been upheld.
Back to the EU summit, which has been awaited with such pessimism that the yield on Spanish 10-year bonds has risen above 7% again and the euro slipped to a three-week low of $1.24 versus the dollar.
There is an unusual and detrimental air of division and discord among the European leaders heading into the summit. The continent needs to work towards more integration rather than fragmentation if they are to lay down a framework for better fiscal, financial and political union.
U.S. unemployment claims fell slightly from the 392,000 initial claims reported last week to a still alarmingly high number of 386,000 for the week ended June 23. The final estimate for the first quarter's gross domestic product (GDP) came in at the expected 1.9%, but that estimate had already been lowered last week by the U.S. Federal Reserve.
Looking beyond these reports, here are some stocks in the headlines today.
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Dumb and Dumber: Congress, the Language, and the Facebook Fiasco
You're not imagining things. Congress is dumb and getting dumber.
According to the Sunlight Foundation, the median grade level for Congressional proceedings and speeches has dropped nearly a full grade level from eleventh to tenth grade.
The result of studying the Congressional Record for the past seven years, the Foundation's data also suggests that both conservatives and new congressmen are responsible for dumbing the entire legislative body down.
But I don't know if I buy that when you consider that Republicans own both ends of the scale.
For example, Rep. Rick Mulvaney , R-SC, speaks at an average grade level of 7.9 while Rep. Dan Lungren, R-CA, uses speech consistent with a college senior.
What I do find very interesting is that the majority of "sophisticated" speakers are only sophisticated when using prepared notes.
The Sunlight data tells us when the majority of our leaders have to speak extemporaneously -a five dollar word in itself- they appear just as "dumb" as the rest of us.
Maybe this explains why our leaders say so much yet actually communicate so very little.
Take the last 67 p residential addresses for instance. They were given at an average grade level of 10.7.
Meanwhile, all of President Obama's State of the Union addresses have tallied at a level you'd expect of an eighth grader, according to the University of Minnesota's Smart Politics.
Dumbing Down the MessageI actually think there is something else at work here. It's sound bites.
Our leaders are now trained to talk in them because they know that's what gets them re-elected and what sells in the nightly news. As a result, most politicians can't put together a string of intelligent sentences even if they wanted to.
Again, is this simply a matter of language? .... Or does it hide a bigger underlying issue?
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Dodd-Frank Isn't Legislation; It's a Comedy
In last week's Insights & Indictments, in my commentary on all the letters sent to the SEC about the proposed Volcker Rule, I not-so-casually commented that the Volcker Rule "shouldn't exist at all."
And then I called the parents of the Volcker Rule, the Dodd-Frank Act, a "joke."
Well, by the amount of comments I got back from I&I readers - right now, there are about 95,000 of you (and counting) - you'd think I was talking about something really controversial, like contraception, for heaven's sake.
Talk about passionate!
I understand that people get passionate about contraception. After all, without all that passion, we wouldn't need contraception.
But me being passionate about the birth of the Volcker Rule, which I said should never had been conceived, apparently caused a lot of to you think I crossed some moral line.
Not me! I'm not one to ever say anything controversial! And I'm certainly not the kind of guy to wade into the contraception debate.
But, if I was, I'd be a strong advocate for it.
The unwelcome birth of the Volcker Rule is a good example...
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Insider Trading Ban: Congress Really Wants You to Like Them
In an attempt to end plunging approval ratings - and win favor in an election year - the Senate passed an insider trading ban yesterday (Thursday) preventing Congress members from profiting from non-public information.
The Senate passed the bill in a 96-3 vote. U.S. Rep. Eric Cantor, R-VA, said the House would consider the bill next week. U.S. President Barack Obama pledged to sign it immediately.
Congress members hope the new law will change growing American disgust with Congressional perks and partisanship, which has hammered approval ratings down to the teens.
"The numbers of people who have a favorable impression of this body are so low that we're down to close relatives and paid staff. And I'm not so sure about the paid staff," Sen. Joe Lieberman, I-CT, said earlier this week.
Insider Trading Ban Run Down
The insider trading ban prevents members of Congress, top aides, and administrative officials from using non-public information when trading. Any stock bought or sold must be disclosed in a public report online within 30 days.
Several last-minute amendments added to the insider trading ban include:
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