Mish's Global Economic Trend Analysis |
- Obama's HAMP Program a Stunning Success
- Unions and Fundamental Freedoms: Two Upcoming U.S. Supreme Court Cases
- Gold Backwardation Conspiracy Nonsense
| Obama's HAMP Program a Stunning Success Posted: 24 Jul 2013 11:37 AM PDT Obama had lofty goals of helping 4 million Americans keep their homes with his Home Affordable Mortgage Program (HAMP). Here are some quick facts:
CNNMoney has additional details in Watchdog: Borrowers in Obama housing program re-defaulting. Borrowers who received help through the government's main foreclosure prevention program are re-defaulting on their mortgages at alarming rates, a federal watchdog said in a report released Wednesday.Stunning Success HAMP is certainly a failure compared to stated goals. However, as government programs go, it's easy to make a case that HAMP was a tremendous success. Here's why. "As part of the Troubled Asset Relief Program, Treasury allocated $19.1 billion to the HAMP program. So far, it has spent $4.4 billion". The typical government program wastes far more than initially allocated. This government program only wasted $4.4 billion out of a projected waste of $19.1 billion. It does not get much better than this! Unfortunately, there is still a big push to waste more money. Christy Romero, the head of SIGTARP says "Treasury pulled out all the stops for the banks, they should do the same for homeowners". This same "two wrongs make a right" genius also says "Treasury needs to research why so many borrowers are dropping out of the program." Really? What's to research? People are underwater in their homes (still), without a job, or struggling in minimum wage part-time jobs. But hey, give a bureaucrat money to waste and they will. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Unions and Fundamental Freedoms: Two Upcoming U.S. Supreme Court Cases Posted: 24 Jul 2013 10:04 AM PDT What follows is a guest post regarding two important union cases that the US Supreme Court will hear. Unions and Fundamental Freedoms by David. A. Bego The U. S. Supreme Court has agreed to hear two cases in the next year which will determine whether persons will be protected in their exercise of the fundamental right to either choose whether to engage in union representation or to abstain from such representation, and to make such decision absent intimidation from either the union or their employer via the secret ballot election — the same process we use to elect our local, state and federal government officials. Interestingly, both cases stem from the President's attempt to provide political payback to his allies in Big Labor through the Rogue NLRB. In the first case, the U.S. Supreme Court will decide if the President acted unconstitutionally when he made several recess appointments to the agency charged with oversight of labor-management disputes, the National Labor Relations Board. The lower courts, culminating in the U.S. Third Court of Appeals both found the appointments unconstitutional (see Supreme Court to Consider Obama Recess Appointments and Appeals Court Nixed Obama's Recess Appointments). This case not only has important implications concerning the further shredding of our constitution through ignoring the tenant of the separation of powers of the branches of government by appointing his nominees without review and agreement by the legislative branch. In the case of the NLRB, the Obama appointees seek to achieve Card Check through Regulation vs. Legislation. Simply put, the goal is to eliminate employees' rights to a secret ballot election and replace it with Card Check as the means for employees to determine if they wish union representation. If you listened to the Administration's and Big Labor's rhetoric, what could be more simple and fair? Unfortunately, it is a process of coercion and intimidation as chronicled in The Devil at Our Doorstep. A process aptly named Death by a Thousand Cuts, which forces employers and employees to capitulate and be subjected to the terms of the so called Neutrality Agreement through ruthless Corporate Campaigns. The so-called "neutrality agreement" is hardly neutral and subjects both the employees and the employer to labor intimidation. The second case involves a question of the validity of Big Labor's sacred cow, the aforementioned Neutrality Agreement (see BNA – Supreme Court Agrees to Review LMRA Case Involving Section 302, Neutrality Agreement). To appreciate this case and its relevance, one must understand why this agreement is so important to big labor. As documented in previous blogs, unions have been on a steady decline since 1947 when Congress, following more than a decade of union corruption, passed the Taft-Hartley Act. Of the many important provisions of the Act, perhaps none was more so than the guarantee of the secret ballot election which, for all intents and purposes, eliminated card check. Since its peak prior to passage of the Taft-Hartley Act, union membership has dropped from approximately 35-40% of the workforce to a low of 11.3% today. Statistics gathered by the federal Bureau of Labor Statistics, included a drop of approximately 400,000 members in the last year alone. Big Labor, realizing its imminent demise, understands it must reinstate card check to survive and is relying on the President and his rogue NLRB to allow them to exploit a little known and hidden clause in the Taft-Hartley Act that allows unions and employers to mutually agree to representation through card check. Unfortunately, it is very rarely an agreement achieved through mutual consent. It is predominantly achieved by Big Labor through outright intimidation of employers and employees. What is interesting about this particular case is that it has been brought by an employee disgusted with the intimidation and the fact he believes his rights to a secret ballot election and protection of privacy have been violated. One thing certain about these cases is that the justices of the Supreme Court will receive a tremendous amount of pressure from the Administration and its Big Labor buddies to overturn the decisions of the lower courts. The Gasping Dinosaurs, already headed toward extinction, understand all to well that if these decisions are upheld it will be the end of Big Labor as we know it in this country (see If ruling goes Against Labor Union, Organizing Could Get Even Harder). Additionally, the President and his party know all to well they need Big Labor's financial and ground support to continue to win elections, as well as increase their grip on and expand an already oversized government. Even more frightening for the future of the United States is what could occur if these decisions are overturned. If they are, the current administration will feel empowered to continue to appoint radical people to high positions, not just in the NLRB, but all areas of government. If they can eliminate the secret ballot election for union recognition and trample on the constitution to appoint government officials how long will it be before they expand these programs to every corner of the government? Can you imagine no secret ballot elections to determine our government officials and instead all being appointed by the President? These are landmark cases. About Bego David A. Bego is the President and CEO of EMS, an industry leader in the field of environmental workplace maintenance, employing nearly 5,000 workers in thirty-three states. Bego is the author of "The Devil at My Doorstep," and the just released sequel, "The Devil at Our Doorstep," based on his experiences fighting back against one of the most powerful unions in existence today. Mish comment: This article originally appeared on UnionWatch, a site to which I also contribute. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Gold Backwardation Conspiracy Nonsense Posted: 24 Jul 2013 01:01 AM PDT Business Insider says "Traders Are Talking About A Gold Conspiracy Theory And There's Evidence To Back It Up" No discussion about gold is complete without a good conspiracy theory. While most theories are easily dismissed, some stay around for a while due to a confluence of circumstantial evidence surrounding it. Wall Street veteran Art Cashin addresses one such theory in this morning's Cashin's Comments.Email is on the Way Consider what follows as my email to Business Insider and Cashin. People like conspiracy theories for two reasons:
Simply put, if gold goes up, it's because it should (and the traders are brilliant for understanding that). If gold gold down, it must be a conspiracy (because the traders cannot possibly be wrong). Investigating Backwardation My friend Nick at Sharelynx Gold emailed me earlier today regarding the alleged backwardation in gold. Nick writes.... Hello Mish Gold Futures Spread  click on any chart for sharper image Gold Chat Bron at Gold Chat posts the following amusing set of charts that may be easier to understand. Gold Futures Spread  Oil Futures Spread  Now That's Backwardation! Recall the definition of backwardation: Current price above future delivery price. There are many reasons this can happen with commodities, but the typical explanations are: temporary short-term supply shortage, expected future supply, or expected falling demand. Supposedly this can never happen with gold because "gold is money". Leaving aside the philosophical question as to whether or not gold is money, presume for a moment that it is. Using the above oil chart as a basis (assuming the gold chart were the same), backwardation implies that someone could borrow money today and pay it back in 2018 for 80 cents. Logically, that shouldn't happen. Acting Man Chimes In My friend Pater Tenebrarun at the Acting Man Blog (see his recent post Gold and Gold Stocks – More Signs of Life) chimed in with this email comment: There is no persistent and deep backwardation in gold, so it is definitely not something to get alarmed over just yet. However, it is still notable that the nearby futures repeatedly slip into slight backwardation versus spot. Moreover, the gold forward rate has recently turned negative. That means that people are now paying more interest for gold in a gold-dollar swap than for dollars. That happens only rarely. Of course all of this happens mainly because interest rates are so low. If interest rates were higher, then it would really be worth getting exercised over. Still, GOFO only rarely turns negative and it often marks a low when that happens.Philosophical Question The philosophical question regarding whether or not "gold is money" is an interesting one. If indeed "gold is money" (not an ordinary commodity like corn, copper, or oil), then severe backwardation implies skepticism as to whether future gold contracts will really be delivered. Thus, backwardation claims fuel all sorts of theories about gold shortages, gold leasing, and price suppression. However, the charts provided by Nick at Sharelynx and Bron at Gold Chat show that claims of backwardation are essentially nonsense. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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