Category Archives: markets

Hillary Clinton’s Wall Street Speeches

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She was for releasing the transcripts before she was against it. The fact is, there could well be contractual requirements for not releasing them. However, I discount that because if such contract clauses existed, she’d cite them. Her latest weasel-worded excuse for not releasing is this, instead, in response to a George Stephanopoulos question about why she’d not yet:

Yeah, you know, here’s another thing I want to say. Let everybody who’s ever given a speech to any private group under any circumstances release them. We’ll all release them at the same time. You know, I don’t mind being the subject in Republican debates, the subject in the Democratic primary. That kind of goes with the territory.…

Couple things about this. One is the typical Clintonian (and others’) tactic of releasing the bad news within a deluge of good news, other bad news, and utterly irrelevant news. Everyone releasing at the same time would bury whatever embarrassing or outright bad stuff might be in the Clintons’ Wall Street speeches.

The other thing is this: why not show the way and be the first to release the transcripts? Because that would be taking the high road.

Home Buying Down Payment Requirements

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The PRC is reducing the size of down payment it requires for a Chinese citizen to buy a home from 25% to 20% of the purchase price. For those who already own a home and haven’t yet fully repaid that mortgage, the mandatory down payment on the purchase of a second home is being reduced to 30% from 40%. This is that government’s attempt to stimulate a slowing economy by inducing more consumption and thereby growing jobs. Supposedly.

The moves, though, raise the question: why is the PRC government mandating this sort of thing at all?

Oh, wait….

PRC Markets

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The PRC stock market tanked again earlier in the week. It’s a broader drop than just a fall in the PRC’s benchmark Shanghai Composite Index, though.

China’s outstanding margin loans—money investors borrow to buy stocks—declined for 16 consecutive sessions to Jan 22, the longest losing streak on record, with 209 billion yuan ($32 billion) worth of leveraged bets unwound during the period.

“Volume is getting very thin, as there are hardly any fresh inflows, and the process of deleveraging is continuing,” said Chang Chengwei, analyst at brokerage Hengtai Futures [a PRC-based financial investments player].

Fox Business lays much of this drop off to continued low (and perhaps lowering) oil prices. It’s not just oil, though. All those erstwhile investors have had their faces rubbed in the fact that it’s not (if it ever was) a price-sensitive market; it’s a government-sensitive market. And that it never had any contact with the underlying economy; it is a purely speculation play.

Empirical Socialism

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Bernie Sanders style. You remember him: the Independent Senator from Vermont, Democratic Party Presidential candidate, avowed Socialist, and as of Monday night’s Democratic Party Town Hall “debate” an avowed Democratic Socialist. In that “debate” (because it really wasn’t a debate; the three candidates appeared sequentially and answered carefully selected questions—and not even the same ones), Sanders assured us, one and all, that he really will raise taxes on us if he’s elected President.

From The Washington Examiner we get a list of just how bad his tax increase will be.SandersTaxes

To put that in perspective, the Congressional Budget Office projects that federal revenues over the next 10 years will be a total of $41.6 trillion, meaning that Sanders would raise taxes by 47% over current levels.

Guess what happens when Government takes that much money away from working Americans, removes that much money from the economy?

Yup.

The Supreme Court and Utilities

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The Supreme Court on Monday upheld the federal government’s ability to spur incentives for industrial businesses, schools and other large energy consumers to reduce power usage at times of peak demand.

The court, in a 6-2 ruling by Justice Elena Kagan, said the Federal Energy Regulatory Commission acted within its powers when it issued an order in 2011 requiring higher levels of compensation for some power customers that agreed to reduce their electricity use.

The Court likely is right on this, in that FERC’s rule is within the confines of the underlying law. However, this still is the government picking winners and losers, and this still is the government dictating to private enterprise what it must do.

The corrective answers that are required, then, are two: one is to withdraw FERC’s authority to issue such rules, to rescind Congress’ delegation of such rule-making to FERC (such a rescission is required across the board, but that’s for another writing).

The other required answer is to alter the underlying law that the FERC rule was…fleshing out. It’s a law that is no longer necessary and that, as the FERC rule demonstrates, has become vulnerable to Executive Branch abuse.

That law is Section 201 of the Federal Power Act, which

empowers FERC to regulate “the sale of electric energy at wholesale in interstate commerce.”

Congress’ authority (not an Executive Branch agency’s) to regulate interstate commerce is constitutionally limited to regularizing commerce among the States, not to dictate the terms of that commerce. Of course, for Congress to recover this authority and its limits, a third required answer consists of correcting a number of Supreme Court mistakes regarding how far Big Government may reach inside any State to regulate commerce there.