This is something else.
From Business Insider:
Financial Reform Meets First Huge Unintended Consequence As Ford Halts Bond Offering
Joe Weisenthal | Jul. 22, 2010, 8:57 AM
Whenever you get new laws and “reform,” unintended consequences are sure to follow.
Usually they take awhile.
Not so with Dodd-Frank.
WSJ reports that Ford has already yanked a bond deal, because the ratings agencies, fearing legal liability, won’t let the automaker puts their ratings in the prospectus, making a sale impossible.
So did Dodd-Frank just kill the bond market? Well, probably not.. Regulators will likely find some way around this impasse, but it’s still amusing to see the bill INSTANTLY slow down the gears of capitalism (or at least capital raising) as its fiercest critics might have suggested.
Here’s the Wall Street Journal piece cited above:
JULY 21, 2010
Ford Scuttles Debt Deal as Overhaul Chills Market
BY ANUSHA SHRIVASTAVA
Ford Motor Co.’s financing arm pulled plans to issue new debt, the first casualty of a bond market thrown into turmoil by the financial overhaul signed into law Wednesday.
Market participants said the auto maker pulled a recent deal, backed by packages of auto loans, because it was unable to use credit ratings in its offering documents, a legal requirement for such sales. The company declined to comment.
The nation’s dominant ratings firms have in recent days refused to allow their ratings to be used in bond registration statements. The firms, including Moody’s Investors Service, Standard & Poor’s and Fitch …
Oh, well. Nobody needs those stupid jobs that Ford would have financed through an expansion, anyway. And who really cares if numerous deals that would have happened don’t now because of “finance reform”? Surely we’re all fine with scraping our own feces to heat our homes as in the other socialist Utopia in North Korea? Who isn’t willing to personally suffer to punish those greedy businesses?
Analyst David Rosenberg, in agreement with other market experts such as Bob Farrell, said on CNBC that the Dow could challenge the terrifying lows of March 2009 and drop below 5,000.
Well, surely the Chairman of the Federal Reserve would bring confidence to the market.
Not so much:
Bernanke says economic outlook is ‘unusually uncertain’
In congressional testimony, the Fed chairman predicts that unemployment will remain stubbornly high for years. His comments send stocks down sharply.
By Don Lee and Walter Hamilton, Los Angeles Times
July 22, 2010
Reporting from Washington and Los Angeles —
Saying the economic outlook was “unusually uncertain,” Federal Reserve Chairman Ben S. Bernanke predicted that unemployment was likely to remain stubbornly high for several years, straining families and endangering the nation’s economic stability and competitiveness.
“Long-term unemployment not only imposes exceptional near-term hardships on workers and their families; it also erodes skills and may have long-lasting effects on workers’ employment and earnings prospects,” he said Wednesday in his semiannual testimony to Congress.
“This is the worst labor market, the worst episode, since the Great Depression,” Bernanke said of long-term unemployment. “Not only for the sake of the unemployed and for the short-term strength of the economy but also for a long-term viability in international competitiveness, I think we need to be very seriously concerned.”
We look at the financial reform imposed by the Democrats and realize that it will cost banks billions and make them even more reluctant to lend than they already are even as they pass the increased costs to their customers in the form of a tax from Obama to you.
And I go back to the prediction of chief executive officers made prior to the worst decision America ever made:
In expressing their rejection of Senator Obama, some CEOs who responded to the survey went as far as to say that “some of his programs would bankrupt the country within three years, if implemented.” In fact, the poll highlights that Obama’s tax policies, which scored the lowest grade in the poll, are particularly unpopular among CEOs.
Barry Hussein is preaching about his “summer of economic recovery.” But he’s a liar without shame or principle.
On the flip side of the “summer of economic recovery,” there’s actual reality.
From CNN Money, July 22, 2010:
Jobless claims jump in latest week
By Blake Ellis, staff reporterJuly 22, 2010: 9:28 AM ET
NEW YORK (CNNMoney.com) — The number of Americans filing for initial unemployment insurance climbed last week, the government said Thursday.
There were 464,000 initial jobless claims filed in the week ended July 17, up 37,000 from a revised 427,000 the previous week, the Labor Department said.
The number of claims was much higher than expected. A consensus estimate of economists surveyed by Briefing.com expected new claims to rise to 445,000.
“It’s very disappointing to have this leading indicator of economic conditions jump higher,” said John Lonski, chief economist at Moody’s Economy.com. “This is the latest reminder of a weak labor market, and the jump preserves worries regarding the adequacy of economic growth.”
The Democrats passed a 2,300 page bill that is essentially mystery meat, which creates more than 20 new agencies that will write hundreds of as-yet unwritten regulations.
And even the author of the bill doesn’t have a clue how the massive Rube Goldberg Machine boondoggle will work:
“It’s a great moment. I’m proud to have been here,” said a teary-eyed Sen. Christopher J. Dodd (D-Conn.), who as chairman of the Senate Banking Committee led the effort in the Senate. “No one will know until this is actually in place how it works. But we believe we’ve done something that has been needed for a long time. It took a crisis to bring us to the point where we could actually get this job done.”
Never let a crisis go to waste.
If you are a Democrat, I suggest you burn your testicles off with a blowtorch. Because that would be change. And of course change is good. And who really cares about the irrelevant details of “change,” anyway?
Analyst Meredith Whitney, famous for being one of the very, very few who predicted the economic disaster in 2008, has made another prediction that no one listened to:
So, as the economy descends into the hell of unintended consequences, please comfort yourselves with my assuring you that I told you so.