The Political Bridge

The National Retail Federation Data Provide Mix Hits on Black Friday Weekend 2009

(Media outlets and blogs are mostly putting a positive spin on this news. I disagree with that spin, but I don't see this news as overly negative.  Looks like the economy and consumer spending are in holding patterns...)

From Investment Advisor.com

According to a survey conducted by the National Retail Federation over the weekend, 195 million shoppers hit the malls and other retail outlets over the Black Friday weekend, an increase of 23 million over last year’s shoppers.

The increased number of bargain hunters did not translate into bigger sales, however, although the average shopper did spend $343.31 and the overall total was estimated at $41.2 billion. Those figures represent a significant drop from the $372.57 average and $64 billion total seen over the same weekend in 2008

The Kentucky Retirement Systems Makes First Hedge Fund Move with Arrowhawk Capital Partners's First Hedge-Fund Plan

Pensions and Investments: October 1, 2009

 Kentucky Retirement Systems, Frankfort, will invest up to $200 million in a direct investment in Arrowhawk Capital Partners’s first hedge fund, Durable Alpha, which launched Sept. 1.

The hedge fund investment is the first for the $12 billion system.

Funding comes from a 5% target allocation to absolute-return strategies approved by KRS’ investment committee in February, CIO Adam Tosh said in an interview.

The Arrowhawk Durable Alpha Fund is a core, risk-controlled, multistrategy hedge fund open to institutional investors and sovereign wealth funds.

Insider trading case rocks Silicon Valley: Three Accused of Making Millions From Secrets of Intel, Google and Other E-Firms

The San Jose Mercury News

In a dramatic insider-trading case unprecedented in scope and involving some of Silicon Valley's iconic tech giants, federal prosecutors Friday charged six money managers and hedge-fund operators — including two from the South Bay — with conspiracy and securities fraud, alleging that the defendants earned $20 million selling and trading on secrets of firms including Intel and Google.

This case involves Raj Rajaratnam, founder of the New York hedge fund Galleon Group and one of the richest men in the world.  Also charged are two well-known Silcon Valley operators — Rajiv Goel, an executive at Intel's treasury department, and Anil Kumar, an executive at the global consulting group Mc-Kinsey & Co.

The Government Accounting Office's Fall 2009 Update: The Federal Government’s Long-Term Fiscal Outlook

 Weaknesses in the economy and financial markets—and the government’s response to them—have contributed to near-term increases in federal deficits, which reached a record level in fiscal year 2009. While a lot of attention has been given to the recent fiscal deterioration, the federal government faces even larger fiscal challenges that will persist long after the return of financial stability and economic growth. GAO’s simulations continue to show escalating levels of debt that illustrate that the long-term fiscal outlook remains unsustainable. In little over 10 years, debt held by the public as a percent of GDP under our Alternative simulation is projected to exceed the historical high reached in the aftermath of World War II and grow at a steady rate thereafter...

To read the entire report click: Download GAO

 

The Bulls(Jim Cramer et al) and the Bears(Professor Roubini and George Soros) on Whether Gold And Stocks Are Dangerously High

Consumer Affairs

Market bull Jim Cramer, on his CNBC show Mad Money Wednesday, ridiculed market bears, saying they have offered up nothing but "alibis" as to why the market should go lower instead of higher.

But the bears include New York University Professor Nouriel Roubini, who accurately predicted the financial crisis last year, and billionaire investor George Soros.

Markets have gone up too much, too soon, too fast," Roubini told Bloomberg News in an interview earlier this month.

Financial News for October 14, 2009: Stocks Skyrocketed; Retail Sales Plummeted

From Yahoo News 

The Dow Jones industrial average has reclaimed 10,000 for the first time in a year. The Dow crossed five figures in afternoon trading Wednesday, seven months after it hit a 12-year low of 6,547.05 on March 9, 2009.

From the U.S. Census Bureau

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for September, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $344.7 billion, a decrease of 1.5 percent (±0.5%) from the previous month and 5.7 percent (±0.7%) below September 2008. Total sales for the July through September 2009 period were down 6.6 percent (±0.3%) from the same period a year ago. The July to August 2009 percent change was revised from+2.7 percent (±0.5%) to +2.2 percent (±0.2%).

Retail trade sales were down 1.7 percent (±0.7%) from August 2009 and 6.4 percent (±0.7%) below last year. Gasoline stations sales were down 25.3 percent (±1.3%) from September 2008 and building material and garden equipment and supplies dealers were down 13.0 percent (±2.0%) from last year.

To read the entire report click: Download Advance Monthly Sales for Retail and Food Services

BBC: Professor Roubini Says "The World's Economic Crisis is Not Yet Over;" When Professor Roubini Speaks, Knowledgeble People Listen

Nouriel Roubini told the BBC that he is concerned about the growing gap between the "bubbly and frothy" stock markets and the real economy.

Over the last six months, the Dow Jones Industrial Average has risen about 45%.

But Mr Roubini says he sees an economy where consumers are "shopped out" and "debt burdened".

Based on the run up in share prices in recent months, investors appear to be betting that good times are around the corner. A view not shared by Mr Roubini. "The crisis is not yet over," the New York University professor said.

Follow the Money: Senator Baucus Big Beneficiary of Big Drug Money

From the Center for Responsive Politics

...Sen. Max Baucus, D-Mont., chairman of the powerful Senate Finance Committee and author of the main health care reform bill now being debated in the Senate, was one of the biggest beneficiaries of this one-two punch from the lobbyists and their clients. From January 2007 through June 2009, Baucus collected contributions from 37 outside lobbyists representing PhRMA, the pharmaceutical industry's chief trade association, and 36 lobbyists who listed drug maker Amgen Inc. as their client.

Why is the Insurance Industry Exempt from the Anti-Trust Laws of The United States of America? by Gregg Wagner

(Gregg is a long-time political and community activist in Louisville and Kentucky. He has spent many an hour working and volunteering at Mother Teresa's Missionaries of Charitty, DrTed.)

 During the health reform debate I listen in amazement when I hear the Insurance Industry and politicians say they believe in the free market for private insurance companies and that is the reason we must prevent health insurance reform. Hogwash!  The truth is there is only two industries in the United States of America which do not have to follow the Anti-Trust laws of our country, which all other businesses in our country must follow, and that is Major League Baseball and the Insurance Industry. If the Insurance Industry honestly believed in the free market system, like they claim, they would not be upset to have Congress appeal their Anti Trust exemptions.  It is very hypocritical to hear them voice such strong support of the free market system, when they do not have to compete under the same free market system as all other businesses must operate. No other business other than MLB has such government sanctioned  protections to allow such things as collusion, price fixing and market allocation. This is a major part of the problem that we face today in reforming the health insurance industry.

 If politicians of both parties believe in the free market system, like they both parties love to claim, then they would repeal the anti-trust exception for the insurance industry and MLB. There is a reason that most states have very few Insurance companies providing insurance in each state. This could all be banned very easily by repealing exemptions the Anti Trust Law for both of the above. Then we would have competition and thought everyone believes in competition.  Isn’t that how the free market is supposed to work? The problem is we seem to have few real leaders in elective office anymore. Few who have guts and honestly care about average Joe, but many who care about Corporate Bob.

 Imagine if President Lyndon B. Johnson did not have the courage to pass the Civil Rights Bill and the Voting Rights Act because many people were against it, which they were,  even though it was the right and moral thing to do? Johnson was well aware and correct about the negative political ramifications for his party in the South, and he even voiced them before signing the bill, but Johnson signed the bill anyway, knowing the negative consequences which it could have for his party.  He was a leader not a follower.  It would be great today if we had more elected officials that had backbones like Johnson. But judging from the health care debate they seem few and far between.

 Call your Congressman and Senator and urge them to repeal the Antitrust exemptions of the Insurance Industry and make them play in the free market system like the rest of businesses must.

Paul Krugman: Why Do We have to Return to Traditional Banking

The banks don’t need to sell securitized debt to make loans — they could start lending out of all those excess reserves they currently hold. Or to put it differently, by the numbers there’s no obvious reason we shouldn’t be seeking a return to traditional banking..Yet the assumption at the Fed seems to be that this isn’t an option — that the only way to go is back to the securitized debt market of the years just before the crisis.

Why? Are we still convinced that securitization is a far superior system to conventional banking, and if so why?

Inquiring minds want to know..