Our financial system is crumbling this week.

[IMADreamer]

Warren Buffet said today "if we are fighting class warfare then my class is winning."

Btw mom and pop businesses like mine don't make anything remotely close to the income needed to get a tax increase. If I did I would gladly pay more.

[Freed Roger]

It's class warfare when the richest people in our country pay the least percentage in Taxes? Sounds like a war that needs to be fought.
I can already hear the right crying about how an increase in taxes on the rich will cause the rich business owners to lay off workers and stifle the growth of new businesses.

They'll do their best to convince people that it will harm the poor mom and pop small business owners who "are the true job creators in this economy". Which it wouldn't affect them, but Republicans are really good at convincing people that it does.

And they'll of course bring up how the taxes just stiffle big businesses from hiring. You know, the big businesses who are sitting on the largest cash reserves in history, yet are not hiring.

They'll also bring up the stats -top 10% pay the vast majority of taxes in this country. Yes, they do pay a lot in taxes, but the % of overall tax has gone down quite a bit IIRC, meaning they already have shifted tax burden to lower classes.

And that talking point conveniently leaves state level and other regressive forms of tax at lower levels, which have become an increasingly larger part of the tax pie in the country.

And it ignores the benefactors of government spending - there is no way of really figuring who gets the govt money. but I'm guessing the lower income people don't really see much benefit from spending in foreign wars, other than a job serving in the military. Hard to get benefits from a govt-subsidized road system, when you don't have a car. With the wealth accumulation being ever so concentrated, it is clear to me who gets the vast benefit from our government and it's spending.

[TimeForGuinness]

Quote from Slashdot

What's going to be entertaining (in the sense that the sad circus of American politics is entertaining) about this whole thing is to watch the about-face the conservatives will make about how much money it takes to be rich. Recently, various state governments have been going after unions, and you see conservative commentators on the various shows talking about how teachers make enough money, how $30-40k a year is plenty when you consider union benefits, blah blah. Now these same exact people are going to go on the same exact shows and, with a straight face, say how those poor folks making a million a year are just struggling to get by and really need a break in this kind of economy while completely ignoring the fact they've spent a better part of a year telling us a teacher's salary is downright lavish. How does a conservative's head not explode from the cognitive dissonance? Do they actually simultaneously believe these polar opposite stances they take, or are they (like all politicians) simply bought and paid for by their masters and puppet whatever talking points they are fed?

For those of you who are going to dispute my point, here are some preemptive replies. First, I know that folks on the left do this [expletive] all the time too. I remember Kerry's "flip flopping" helping cost him the 2004 election. But pointing to the other side and saying "See, they do the same reprehensible thing we do" does not actually make it okay. It's still downright disingenuous. My point is simple: How much money does it take to be rich? Because the conservatives in America have two different definitions that depend not on the amount income, but essentially on class. The fact that these same conservatives are the first to scream "Class Warfare!" at this kind of proposal is deliciously ironic and the whole thing would be [expletive] hilarious if the stakes weren't so high.

Reality check: to solve the long-term debt crisis, two things need to happen. Taxes need to go up, and spending needs to go down. Either side that says you can do one but not the other is living in some magical fairy-tale land where facts are superseded by what they wish were true.

[slide_into_first]

Today the Fed is expected to announce they will buy up old treasuries to change the yield curve and make it less feasible to hold low yielding bonds. There is talk of Bernanke "expanding the balance sheet." HJ or anyone- what does that mean?

[slide_into_first]

FOMC members may differ over policy, but the gang will always agree its mission should be free of political interference, notes JPM's Mike Ferroli. For this reason, the GOP letter last night may lead to a circling of the wagons, i.e. the removal of the 3 dissents and possibly even easier policy than anticipated.

Only true if you believe in the Tooth Fairy.

Utter nonsense. Fed decisions have *always* been influenced by politics.

Actually I think the Republicans are clueless. I also think thay have a much greater sense of self worth than is justified. If the FOMC does what it wants and goes against the Republicans what are they going to do, have Boehner cry.

[JackofDiamonds]

Today the Fed is expected to announce they will buy up old treasuries to change the yield curve and make it less feasible to hold low yielding bonds. There is talk of Bernanke "expanding the balance sheet." HJ or anyone- what does that mean?

Quick answer while I'm getting coffee: Over next nine months, the Fed plans to buy $400 billion worth of 6-30 year bonds through like-sized sale of under-three year maturing bonds. Also will reinvest maturing housing debt. Downside risks to economic growth noted. The hope is that lower long term rates will result and spur growth, though Bernanke has already downplayed the potential power of the program.

Here's a good primer on on the Fed's balance sheet.

[slide_into_first]

Thanks. I shorted acme packet after the announcement and am doing ok so far.

[JackofDiamonds]

Thanks. I shorted acme packet after the announcement and am doing ok so far.

High correlation between APKT and 10 year treasury yields.

[greenback44]

http://blog.cleveland.com/metro/2011/09 ... th_de.html

CLEVELAND, Ohio -- Members of the Amish community traditionally have settled their scores independent of secular society, but the federal legal system will decide the fate of Monroe Beachy, 77, of Sugarcreek, Holmes County.

Beachy was charged (pdf) Wednesday with defrauding thousands of his fellow Amish farmers, carpenters and neighbors of tens of millions of dollars in an alleged Ponzi scheme that has earned Beachy a nickname: The Amish Bernie Madoff.

[Hungary Jack]

Today the Fed is expected to announce they will buy up old treasuries to change the yield curve and make it less feasible to hold low yielding bonds. There is talk of Bernanke "expanding the balance sheet." HJ or anyone- what does that mean?

Quick answer while I'm getting coffee: Over next nine months, the Fed plans to buy $400 billion worth of 6-30 year bonds through like-sized sale of under-three year maturing bonds. Also will reinvest maturing housing debt. Downside risks to economic growth noted. The hope is that lower long term rates will result and spur growth, though Bernanke has already downplayed the potential power of the program.

Here's a good primer on on the Fed's balance sheet.

So the Fed will buy long term bonds to bid up the price, effectively lowering yields on benchmark bonds, which in term should lower long-term rates for corporate borrowers, spurring capital investment.

Makes some logical sense, but I wonder how much of a bump one can expect given that corporate balance sheets are very clean and, in some cases, flush with cash. Long-term rates were pretty low to begin with, so I am not sure long-term capital projects are going to be that more compelling given a drop in rates. I don't think the airlines will order more planes because of this, and most IT projects have much shorter payback requirements.

Our financial crisis has metastasized into a demand crisis. Projects are uneconomic because of cost of capital concerns, but due to stagnating demand and other uncertainties.