Wednesday, June 29, 2011

CNBC: Virginia Is Best for Business

CNBC names Virginia the best state for business. CNBC reporter Scott Cohn explains why.

Tuesday, June 14, 2011

Bill Gross: United States in Worse Shape Financially Than Greece

Pimco founder and co-chief investment officer Bill Gross told CNBC that the unfunded debt burden of the United States puts it in a worse position than Greece.

By his calculation, the U.S. is on the hook for $100 trillion. "To think that we can reduce that within the space of a year or two is not a realistic assumption," Gross told CNBC. "That's much more than Greece, that's much more than almost any other developed country. We've got a problem and we have to get after it quickly."

Thursday, June 9, 2011

Jim Rogers: Next Crisis Will Be Worse Than 2008

Jim Rogers, ceo of Rogers Holding, says that when the next crisis comes around, the United States will be in far worse shape than in 2008, according to an interview on CNBC with Maria Bartiromo. Rogers says that we need to cut the budget drastically.

Rogers calls Fed Chairman Ben Bernanke a "disaster," who has gotten nothing right since he came to Washington. "He doesn't understand finance. He doesn't understand currency. He doesn't understand the economy," Rogers says of Bernanke.

Bernanke only knows about printing money as a way to address problems, so he will revert to QE3, further weakening America's debt position, according to Rogers. He predicts the dollar is going to crash while the Chinese yuan will become a safe currency.

If gold and silver correct, Rogers recommends buying more. Rogers is shorting technology stocks.

Wednesday, June 8, 2011

Jamie Dimon Takes on Bernanke

JPMorgan Chase & Company chairman and ceo Jamie Dimon confronted Federal Reserve Chairman Ben Bernanke today, asking him if he had considered the impact of all the regulations being proposed and how they might together negatively impact the availability of credit and the economy. The Chairman revealed that, in essence, regulators had examined proposed rules individually but not in the aggregate.

This is a rare public challenge from a banker to a top regulator.

In the second video Jeffrey Sonnenfeld, professor in the practice of management for the Yale School of Management talks about Dimon's challenge to Bernanke.

Friday, June 3, 2011

Alan Greenspan on CNBC: Dodd-Frank Based on Faulty Understanding of Financial System

Part One:

Part Two:

CNBC Squawk Box hosts Joe Kernen, Becky Quick and Carl Quintanilla interviewed Alan Greenspan June 3 from the Department of Labor in Washington, D.C., where they had traveled to broadcast the show remotely.

In his comments, Greenspan says that one of the missing parts of the economic recovery is the construction sector, missing partly because of the weak housing sector. According to research by his firm, Greenspan said, If the production of longer-lived assets had recovered as it has in the past, unemployment would be at 6 percent.

Greenspan also supports raising income tax rates to the Clinton era levels, if necessary, for a budget agreement that reduces the deficit and debt outlook.

Greenspan also does not believe that there will be a crisis after August 2, as Secretary Timothy Geithner has suggested, if the debt ceiling is not raised. Treasury is high likely to continue paying interest on the nation's debt service. The problem is that a 40 percent decline in government spending (40 percent of each dollar is borrowed) would negatively impact the economy.

While he opposed the idea of the debt limit on principle, in this instance it provides a real opportunity to address the serious issue of deficits.

Business Uncertainty

Greenspan said part of the problem facing business is that they cannot get an idea of what the outlook is going to be 20 years or more from now.

The uncertainty is holding back long-term business investment, he added.

"One of the reasons is that there's too much government activism in a technical sense," he said. The high level of government activism has a very negative impact on potential rates of return. When calculating the rate of return on a long-term investment, such as an aluminum rolling mill, which Greenspan said he had done, the distribution of potential rates of return is very wide.

"The distribution [of rates of return], if it is very wide give you agebraicly very low risk-adjusted rate of return," Greenspan said.

The coming onslaught of regulations, "the structure of activism," from new laws in response to the crisis, as well as Obamacare, are factors in the reluctance of business to expand or hire.

"I don't think the structural framework of how the financial system actually works is captured in the philosophy of Dodd-Frank," Greenspan said.

"in other words, they are specifying if you do this (moves hand right), this (moves hand left) will happen. All the evidence of which I'm aware is that it will not. It will do this (raised hand)," he added.

Greenspan said that he did not see how the 200 rule-makings at the Fed could be accomplished. "When I was at the board, if we had 10 a year, that was a big work load," Greenspan said.

Greenspan believes that federal entitlement programs will necessarily face the budget knife.

"Medicare or any other kind of defined benefit program cannot persist in the type of economy that we are going to be viewing over the next decade," Greenspan said.

One of the reasons is that as highly educated productive people retire, new entrants into the labor force will not be able to make as much of a contribution in terms of productivity because of the failures in the U.S. educational system, according to Greenspan.

The former Fed chairman also believes that because banks have been parking their excess reserves rather than lending them out to earn more money, the end of quantitative easing will not necessarily have a huge negative impact. Banks have not lent, he said, because of capital constraints.

Thursday, June 2, 2011

Matthew Vadum Challenges ACORN on Their Role in the Financial Crisis

In his new book Subervsion Inc. Matthew Vadum accuses ACORN of intentionally targeting Wells Fargo with demonstrations, harrassment, phony studies and lawsuits on behalf of their paymaster Herb and Marion Sandler who contributed more than $11 million to ACORN. On Fox News Vadum debates a representative of ACORN.

The Sandlers were the former owners of Golden West (World Savings) which had more than $100 billion in toxic payment option ARMs on its books when they sold the company to Wachovia in 2006. The toxic mortgages helped sink Wachovia during the financial crisis and Wells Fargo acquired Wachovia in 2008.

Wednesday, June 1, 2011

British Equity Analyst Simon Maughn Says Bond Markets Are Telling Us "QE3 Is Coming"

Simon Maughn, co-head of European equities at MF Global, speaking on CNBC's European Squawk Box show June 1, says investors should prepare themselves for a third round of quantitative easing.

He says that decline in the equity values suggest this market does not anticipate the advent of QE3. "It's all about the monetary injection trade," he says of the sell-off of equities in advance of QE2. "The equities are calling up a post-QE2 trade."

While the equities markets do not know if we are going to have Q3, the bond markets are clearly expecting a QE3, he said.

On the Greek crisis, Maughn says, "Most informed opinion will tell you that a Greek default is inevitable."