Government Archives - Page 5 of 20 - Money Morning - Only the News You Can Profit From
Will John Kerry Kill the Keystone XL Pipeline?
When new U.S. Secretary of State John Kerry met Friday with Canadian Foreign Minister John Baird in Washington, the talk turned to the fate of the controversial Keystone XL pipeline.
Kerry said the controversial $7 billion Keystone XL pipeline project would undergo a "fair and transparent review," adding he expects to make a decision "near-term" on whether to move forward with it. The State Department has final say over the pipeline because it traverses international borders.
Government S&P Lawsuit: Who's Next?
But the collateral damage could spell bad news for a number of parties and has implications even for the overall health of the U.S. economy.
The Justice Dept., joined by attorneys general from 16 states, unveiled a case accusing S&P of fudging its ratings of subprime mortgages to make the toxic securities appear better than they were.
The federal government is seeking $5 billion in penalties — more than five times what S&P made in 2011 — to cover losses to investors in federally insured banks and credit unions. Separate suits filed by individual states could more than double that figure.
It's the first time the government has taken action against a credit rating agency over illegal behavior tied to the recent financial crisis.
The Real Cost of Obamacare
Like it or not, in less than a year – January 2014 – the core of U.S. President Barack Obama's healthcare reform goes into effect – and recent data show the cost of Obamacare will be quite high.
The statistics are startling, seeing as the intent of Obamacare was to reduce overall medical costs in the country – one big reason government spending is running wild – by improving access to treatment for Americans. An additional 30 million Americans are expected to be covered under Obamacare.
But new reports estimate the new healthcare system could cost about $1.3 trillion over the next 10 years.
That means the original outcome – which President Obama said would be to "cut the cost of a typical family's premium by up to $2,500 a year" – is far from reality.
Here's a breakdown of what Obamacare will really cost you – and your job could be included.
Why Did the U.S. Government Sue Standard & Poor's?
The U.S. Justice Department slapped Standard & Poor's Rating Services with a lawsuit claiming the agency sidestepped its own standards when rating mortgage bonds that collapsed during the financial crisis, resulting in billions of dollars in losses for investors.
U.S. Attorney General Eric Holder's civil charges, filed late Monday against S&P, are the first federal enforcement charges against a credit rating firm over the financial crisis.
Reports say the government is going after S&P to the tune of more than $1 billion.
Following a report in The Wall Street Journal Monday afternoon that the government planned to file the suit, S&P acknowledged it was expecting the action and claimed the firm was being wrongly punished by the U.S. government for "failing to predict" the housing meltdown or financial crisis.
New York-based S&P, one of the three major rating firms, has denied any wrongdoing. The firm said in a statement before the government filed the suit that it would be "entirely without factual or legal merit."
Mary Jo White: SEC Pick Compromised By Links to Wall Street
When President Barack Obama nominated Mary Jo White to be the next head of the SEC, he said he wanted someone who would be tough on Wall Street, but her past ties to many of the big banks will make that difficult, if not impossible.
President Obama nominated White to be the next chairwoman of the Securities and Exchange Commission Thursday, emphasizing her storied background as a New York prosecutor in the 1990s.
"She helped prosecute white-collar criminals and money launderers," the president said. "In the early 1990s, she brought down John Gotti, the head of the Gambino crime syndicate. You don't want to mess with Mary Jo."
Getting less attention from President Obama was how White has spent the most recent decade – as a defense attorney for Debevoise & Plimpton LLP. There, she hasn't been going after Wall Street's transgressors – she's been defending them.
Her former clients include former Bank of America (NYSE: BAC) CEO Ken Lewis, who was involved in a civil fraud suit over his company's acquisition of Merrill Lynch.
"[She's been] Wall Street's protector-in-chief," former SEC investigator Gary Aguirre told The Wall Street Journal.
Debt Ceiling Bill Intensifies Budget Pressure on Congress
The debt-ceiling showdown took center stage on Capitol Hill today (Wednesday) as a crucial vote on a Republican bill gave the Treasury the green light to borrow a fresh stash of cash until May 19.
The Republican-controlled House passed the bill by a 284-144 margin.
It now moves on to the Senate, where it is expected to pass quickly without any changes.
Senate Democrats are expected to back the plan even though they have been hesitant to support any short-term debt ceiling fix, maintaining it creates additional uncertainty for businesses and families.
"I'm very glad that (House Republicans) are going to send us a clean debt-ceiling bill," said Senate Majority Leader Harry Reid, D-NV.
The measure would go from the Senate to U.S. President Barack Obama, who has repeatedly said he will not wrangle over the debt ceiling and will sign the bill when it reaches his desk.
Pleased with the results, the White House added a "but," saying it would have liked a longer- term solution.
While the legislation looked extremely likely to make it to the Oval Office, there is still a chance it could get tangled up in Congress, given a controversial provision in the bill.
The legislation includes a divisive rider aimed at coercing Senate Democrats to ink a long-term budget deal. The "no budget- no pay" provision would withhold pay for members of Congress until a sustainable deal is agreed upon.
"It's not a slam dunk. But the main thing is that the Republicans will cave on the debt ceiling. So we're now just arguing over the details," Greg Valliere, chief political strategist for Potomac Research Group, told CNN Money ahead of the voting.
AIG and the New Victim Mentality
Some of you made harsh comments about what I wrote about AIG. I said that AIG should sue the U.S. government and the Fed for saving it when it could have (more likely would have) gone under during the peak of the crisis in 2008.
Insights & Indictments reader Darrell said, "Enough. This is the most vile piece… I have ever read. Those people SHOULD have been allowed to fail. FULL bankruptcy! To borrow from the taxpayers to compensate the "managers" who steered us into this mess with bonuses, and then whine [when] the terms of the loan were too extreme is beyond hypocritical. Capitalism without risk is NOT capitalism. Something you would do well to learn. I am unsubscribing form this service."
Matt chimed in, "I'm with you. Acting like AIG is a victim of the big, mean Fed is preposterous. Maybe Shah and Alex Jones should take their baloney show on the road."
I'm shattered. I've been put upon. I feel victimized by these comments. Where's the safe harbor for journalists and bloggers? How can I be criticized so harshly and not feel victimized? Oh, the humanity!
Of course I'm kidding.
I subject myself to any and all comments when I exercise my freedom of speech. I keep a "Comments" section on my website so my readers can exercise their freedom of speech. I'm not a victim. I don't need any protection from free speech. Free speech is a two-way street.
The point is that I'm sick of the victim mentality. Are you fed up yet?
Why We'll Be Talking About Sequestration For a Long Time
Another fiscal crisis lurks just on the horizon – a combination of the mandatory spending cuts known as sequestration and the need to raise the U.S. debt ceiling – and pundits are losing sleep trying to figure out what Washington is going to do about it.
They're wasting their time.
"The odds that Congress and the White House will ink a comprehensive deficit-reduction deal appear as long as they have been in more than two years, even though both parties acknowledge it's the only way to break the cycle of fiscal cliffs," Politico observed yesterday (Tuesday).
In all likelihood, Democratic and Republican leaders will make a last-minute deal that achieves the minimum necessary to keep the government running while putting off the harder decisions until later – three months, six months or even a year.
That's what they always do, although the script may change a little.
Now the Government Wants to Track and Tax Your Mileage
I love Oregon so much I gladly put up with its hypocritical governor, its out of control budget, its quirky liberal tendencies, its high personal income taxes, its hopelessly anti-business environment, and its progressive health care system.
But here's where I have to put my foot down: Oregon officials are now proposing a special per-mile tax on "gas-sipping" drivers.
Frustrated by the drop in tax revenue collected at the pump as drivers shift to more fuel-efficient hybrids and pure electric cars, Oregon legislators now want to make up the difference by sticking it to anyone who's willing to pay more for energy efficiency.
And as bad as that sounds, there's every reason to believe that if this takes hold, a mileage tax will be in the express lane to your neighborhood soon.
Washington's already got a law on the books that will require electric vehicle owners to pay a flat annual fee and is considering an additional per-mile tax. And Nevada is now also looking at a per-mile fee, despite all its gambling revenue.
I don't know about you, but this kind of nonsense makes me want to go out and buy a fire-breathing V8 or fusion-powered DeLorean like Doc Brown drove in the hit movie series Back to the Future just on principle alone to replace my 2006 Prius.
I thought energy efficiency was a national priority.
Welcome To a Place Called Oregon
Then I thought: how silly of me. This is Oregon, where the wisdom of our legislators seems to more closely resemble government at the expense of the people rather than for the benefit of the people.
Election 2012: Is Today's Presidential Election More About Lost Dreams Or a New Promise?
In what can only be described as a madcap dash for votes in key battleground states, President Barack Obama and Candidate Mitt Romney worked the crowds late into the night.
As well they should. Almost every Election 2012 poll I've seen has the candidates in a neck-and-neck race headed into today's finish line.
As of press time:
- CNN's survey has them in a dead heat at 49% to 49%.
- Pew Research shows Candidate Romney behind President Obama by a 50% to 47% margin.
- The Politico/George Washington University survey reflects a tie at 48%.
- And the latest NBC/Wall Street Journal numbers show President Obama pulling ahead with 48% compared to Candidate Romney at 47%.
On the other hand, Intrade, which is the world's leading predictions market, shows a 67.2% probability that Obama will win. What's interesting about that is that Intrade also shows a 22.5% chance that the winner of the Electoral College will actually lose the popular vote.
Given these mismatches, I can only hope we're not left counting chads or something equally ridiculous tonight when the polls finally close. The markets really wouldn't like that.
As it is, all the major averages are on hold. Not literally mind you, but figuratively. Nearly every trader and institutional manager I know is treading lightly at the moment.
Because they know that by Wednesday morning half of them will be wrong. That means they'll have to adjust both their outlooks and their portfolios.
In the financial scheme of things, though, the election is a sideshow. The far bigger issue when it comes to your money is the fiscal cliff. And I am not alone in my thinking, either.
A recent CNN poll suggests that 60% of market professionals are far more concerned about what's going to happen when spending cuts and tax increases hit January 1 than they are about who's in the White House.
I don't think they're wrong to be worried, either…