Bernanke on the Brink

As the media breathlessly tracks every move of Scott Brown and watches over the remnants that was the centerpiece of the President's agenda, here's just one story that should be getting more attention.

Ben Bernanke's confirmation for a second term as Federal Reserve chairman will go down to the wire and could be a closer vote than seemed likely just a few weeks ago.

Bernanke's current term as Fed chairman expires at the end of the month, and a Senate confirmation vote has been pushed off until next week at the earliest. Bernanke met with Senate Majority Leader Harry Reid Thursday as Democratic and Republican leaders surveyed senators to tally votes on the nomination. Bernanke needs 60 supporters to win approval for another four-year term.

I don't remember any Senate vote that was anything but a rubber stamp. So, the fact that it's even close is itself unusual. Bernanke is a controversial figure but then again, every Fed Chairman winds up being controversial.

You simply can't take on as much power as the Fed chair without drawing some controversy. His handling of the financial crisis will be a major point of contention. Bernanke is drawing fire from the far left and many conservatives so this nomination fight could draw some very unusual political bedfellows.

This nomination fight could be an opportunity for our news cycle to examine the role of the Fed within our economy but our twenty four hour news cycle simply hyperanalyzes one or two stories and this one hasn't made the cut yet.

Morning Market Report

It was a bloody day in the markets yesterday. The Dow lost more than 200, and it's lost over 300 since Wednesday. Some of the blame, at least, is being put on the shoulders of the President's new plan to curb bank activities.

Stock futures indicated another rough day for Wall Street on Friday after the previous day's selloff on the back of President Obama's proposed new restrictions on the financial industry.

Futures were well off their lows for the morning after General Electric posted earnings that beat analyst estimates, sending its shares up 1.2 percent in premarket trading.

...

A plunge in financial stocks weighed heavily on the broader market as President Barack Obama proposed the most extensive curbs on banks' risk-taking since the
outbreak of the recent financial crisis.

J.P. Morgan Chase and Bank of America were two of the worst performers. J.P. Morgan fell 4.2% and Bank of America was down 3.9%. Goldman Sachs Group fell 3.5%, despite reporting stronger-than-expected earnings before the bell. Citigroup slid 4.1%.

The President is trying a new populist approach...

President Obama will travel to the Cleveland suburbs Friday -- the second leg of his "White House to Main Street" jobs tour -- where he will meet and talk with local employees and visit a sporting goods factory to see the production of baseball and football helmets.

Considering the mood in the country, his aides might recommend that Obama wear one of those helmets.

The president planned to use his visit Friday to Elyria, Ohio, to test-drive an
aggressive populist push on jobs, a top concern for voters across the country as the White House begins a message shift heading into fall elections expected to be difficult for Democrats.

If this new found populism causes the equity markets to take a big step back, that won't do anyone any good. The equity markets have been performing well during the last nine months. Dumping on banks, big oil, and insurance companies may seem like a good idea but it won't do their stocks any good.

Bonds continue to improve while equities are getting hurt. The ten year is worse this morning but still much better over the last week. It's down to a yield of 3.62%. It fell below 3.60% yesterday. The yield spread between the two and ten year is now at 2.87%. That's a new record. The three month t bill is steady at .041%.

It was a bloody day across the board in both the Far East and so far in Europe. The Hang Seng in China was down .65%, the NIKKEI was down 2.56%, and the Straits Time Index was down 1.1%. In Europe, the FTSE in London is down .92%, DAX in Germany is down 1.06%, and the Spanish index is down 1.39%.

The Dollar is mixed this morning. It's down .26% against the Euro, up .59% against the British Pound, and down .24% against the Japanese Yen.

Appearance Alert

Once again, I'll be on with Wyatt Mcintyre in an hour and a half to talk about the Dr. Anna Chacko saga. It will stream live at this link. It will be available there afterwards anytime if you can't catch the show live.

Also, tomorrow evening at 11PM ET, I'll be on with the Conservative Voice talking about the same topic.

Also, Dr. Mary Johnson, a local North Carolinian doctor/activist, and someone I've gotten to know a bit recently, has given her thoughts on the fiasco that Congressman Miller got himself caught up in when he decided to write a letter on Dr. Chacko's behalf.

UPDATE: Please also check out my new book, The Definitive Dossier on PTSD in Whistleblowers, in which I dedicate chapter four entirely to the exploits of Dr. Anna Chacko. 

Video, Quote, and Word of the Day

durance (noun)

imprisonment or confinement

Humor results when society says you can't scratch certain things in public, but they itch in public.

Tom Walsh

An Interesting Thought on Health Care

A doctor I frequently communicate with passed along this thought.

If the democrats are going to pass health care coverage for everyone, what do we need charitable care hospitals for?

Charitable hospitals, almost entirely, are "non profit" which makes them avoid paying taxes.

Southers Withdraws

As if things weren't already bad enough for the President, his TSA nominee officially withdrew his name.

President Barack Obama's choice to lead the Transportation Security Administration withdrew his name Wednesday, a setback for an administration still trying to explain how a man could attempt to blow up a commercial airliner on Christmas Day.

Erroll Southers said he was pulling out because his nomination had become a lightning rod for those with a political agenda. Obama had tapped Southers, a top official with the Los Angeles Airport Police Department, to lead the TSA in September but his confirmation has been blocked by Republican Sen. Jim DeMint, who says he was worried that Southers would allow TSA employees to have collective bargaining rights.

Southers originally took some heat because it appeared he was in favor of unionizing the TSA employees. He simply became toxic when details trickled in about activities he engaged in while an FBI agent. He tapped his ex's new boyfriend's phone and he either lied or accidentally, initially, gave false testimony about it during his hearing.

So, a year into his term, President Obama still has no TSA chief. That simply doesn't look good with his image weakened as a terror warrior by the Christmas day attempted hijacking and its aftermath. With the Massachusetts defeat and health care on the brink, this is yet another drip of bad news.

The Logic Behind a Progressive Tax

Introduction and disclaimer: Please note that I don't necessarily subscibe to this logic but I've recently had the logic behind the progressive tax explained to me.

The progressive tax is the hallmark of both the Democratic Party and the Green Party. It is the scourge of conservatives. Conservatives view the progressive tax system as patently unfair and punishing success. So, what is the logic behind the progressive tax system?

Those favoring a progressive system that the first $20,000 anyone makes is much more vital than the second million. So, you probably need all of the first $20,000 you make and so a progressive wouldn't want any of that taxed. You probably need most of the next $10,000 and so that's taxed vey slightly. Now, you probably need little of your second million and so that's taxed very heavy. So, the logic behind the progressive tax is entirely based on need.