So much has happened over the past two weeks that it’s hard to know where to begin, much less wrap one’s head around it, but here goes.
After saber rattling and speeches, a diplomatic solution to the problem of Syrian chemical weapons took immediate military action off the table. The haters and warmongers are bemused. Unable to label President Obama weak for threatening air strikes, they instead give all credit to Russian President Putin. Where’s Michelle Bachmann’s investigation of anti-American sentiment in Congress now?
With the threat of war removed, the fear premium was sucked out of the price of crude oil, offering consumers a few pennies of relief at the gas pump. But taxpayer dollars are still flowing to the oil companies and won’t end anytime soon, despite G-20 countries agreeing “in principal” to phase out fossil fuel subsidies. Expect much kicking and screaming, even as those oil companies report record quarterly earnings, again, starting next month.
This week also brings the 5th anniversary of the collapse of Lehman Brothers and the start of the Great Recession. You wouldn’t know it by looking at the stock market, but the 2008 financial collapse wiped out jobs, savings and homes for many Americans who have yet to recover. However, big banks are even bigger than they were before the crisis, and no one has been held accountable for the policies and practices that brought the economy to its knees. Former Congressman Barney Frank asked a really good question on Sunday’s Meet the Press in response to a “get over it” mentality: “To your question about those poor beleaguered bankers who have been forced to do so much, why are they paying themselves so much money? Where did these enormous salaries come from if they were in fact in such serious trouble?” The answer, “crickets”.
Enter Larry Summers, a key figure in the financial meltdown of 2008. An economist (and some say a misogynist), former Treasury Secretary (under President Clinton) who endorsed the repeal of Glass-Steagall (the law that separated commercial and investment banking operations) and deregulation of the financial services industry, former Harvard professor and president, Summers was considered a key economic adviser to President Obama, but was shadowed by a conflict of interest as he fought to remove executive pay caps on companies receiving government stimulus dollars, the same companies that paid him consulting fees.
With that type of baggage (maybe even cargo), is there any surprise that he withdrew his name from Fed Chair consideration? It was for those betting on him and a continuation of policies that reward the rich while punishing the poor and news to the Japanese media outlet that reported Summers was a done deal. They in turn blame President Obama for “bungling the nomination process”, despite no nomination ever being made.
Back on Main Street, jobs and the economy remain the focus as Gallup reports that 1 in 5 households experience food insecurity and a University of California Berkeley analysis that shows the largest U.S. income inequality gap since 1927. Fast food workers are demanding a “living wage” while retirees live in fear of their pensions being cut or eliminated entirely. In the meantime, Congress is debating whether to take another vacation or stay and repeal Obamacare or shut down the government instead of raising the debt ceiling.
The stock market is sprinting to the end of the quarter, having regained all the ground lost in August after notching new highs. Data this week will be overshadowed by yet another Federal Open Market Committee meeting (complete with economic projections, policy statement and Chairman’s press conference) and whether tapering is still in the cards. The following week’s data will take a back seat to end-of-quarter positioning by money managers afraid of posting poor performance numbers. Even they realize the importance of having some skin in the game, some money invested in the stock market.
WHAT’S NEXT?
So much has happened over the past two weeks that it’s hard to know where to begin, much less wrap one’s head around it, but here goes.
After saber rattling and speeches, a diplomatic solution to the problem of Syrian chemical weapons took immediate military action off the table. The haters and warmongers are bemused. Unable to label President Obama weak for threatening air strikes, they instead give all credit to Russian President Putin. Where’s Michelle Bachmann’s investigation of anti-American sentiment in Congress now?
With the threat of war removed, the fear premium was sucked out of the price of crude oil, offering consumers a few pennies of relief at the gas pump. But taxpayer dollars are still flowing to the oil companies and won’t end anytime soon, despite G-20 countries agreeing “in principal” to phase out fossil fuel subsidies. Expect much kicking and screaming, even as those oil companies report record quarterly earnings, again, starting next month.
This week also brings the 5th anniversary of the collapse of Lehman Brothers and the start of the Great Recession. You wouldn’t know it by looking at the stock market, but the 2008 financial collapse wiped out jobs, savings and homes for many Americans who have yet to recover. However, big banks are even bigger than they were before the crisis, and no one has been held accountable for the policies and practices that brought the economy to its knees. Former Congressman Barney Frank asked a really good question on Sunday’s Meet the Press in response to a “get over it” mentality: “To your question about those poor beleaguered bankers who have been forced to do so much, why are they paying themselves so much money? Where did these enormous salaries come from if they were in fact in such serious trouble?” The answer, “crickets”.
Enter Larry Summers, a key figure in the financial meltdown of 2008. An economist (and some say a misogynist), former Treasury Secretary (under President Clinton) who endorsed the repeal of Glass-Steagall (the law that separated commercial and investment banking operations) and deregulation of the financial services industry, former Harvard professor and president, Summers was considered a key economic adviser to President Obama, but was shadowed by a conflict of interest as he fought to remove executive pay caps on companies receiving government stimulus dollars, the same companies that paid him consulting fees.
With that type of baggage (maybe even cargo), is there any surprise that he withdrew his name from Fed Chair consideration? It was for those betting on him and a continuation of policies that reward the rich while punishing the poor and news to the Japanese media outlet that reported Summers was a done deal. They in turn blame President Obama for “bungling the nomination process”, despite no nomination ever being made.
Back on Main Street, jobs and the economy remain the focus as Gallup reports that 1 in 5 households experience food insecurity and a University of California Berkeley analysis that shows the largest U.S. income inequality gap since 1927. Fast food workers are demanding a “living wage” while retirees live in fear of their pensions being cut or eliminated entirely. In the meantime, Congress is debating whether to take another vacation or stay and repeal Obamacare or shut down the government instead of raising the debt ceiling.
The stock market is sprinting to the end of the quarter, having regained all the ground lost in August after notching new highs. Data this week will be overshadowed by yet another Federal Open Market Committee meeting (complete with economic projections, policy statement and Chairman’s press conference) and whether tapering is still in the cards. The following week’s data will take a back seat to end-of-quarter positioning by money managers afraid of posting poor performance numbers. Even they realize the importance of having some skin in the game, some money invested in the stock market.