Rahm Emanuel is the pit bull Chief of Staff at the White House. Joe Biden is Joe Biden and Laura Tyson is on the President's Economic Advisory Board.
Joe said the other day that Stimulus II can't be ruled out. But Joe says a lot of things. Tyson said the other night that another stimulus packagewas needed. But the pit bull says don't blame us for the unemployment rate. Our Stimulus package is just rolling out and you have to give it time to work.
Well, the Administration can't say "give it time to work" and have some others say "we need another one before this one has had time to do its thing." Talk about creating a box needlessly.
And don't you find it curious that the meat of the Stimulus package, the shovel-ready job-creation part of the deal, is due to hit just about in time for the midterm elections? Funds paid out on the quarter just ended increased $45 billion, to bring the total to around $60 billion. They are scheduled to increase about $40 billion a quarter, so, by the end of Q3 2010, over $250 billion will have been disbursed, in time for the election. Could our fearless leaders have been thinking so politically?
Another TALF deal should close today, and it looks like a total of $10 billion or so of asset-backed paper will be placed, with an almost-$4-billion Bank of America - sponsored deal leading the way. This program was designed to be much bigger, but it looks to me like its very existence has calmed the markets to the point where it isn't needed. Not a lot of asset-backed paper is being done, but probably a bit more of non-TALF paper gets placed. We don't need to go crazy extending credit and winding back up in the same mess we are struggling to get out of. Credit should be available, but on business-like terms.
The Big Three auto companies ("little three," really?) finished June with the lowest inventories in 25 years. Our preferred stock in this group—Buy-rated Ford —has announced a production increase for this quarter. This could be viewed as an example of the inventory draw-down that will be somewhat reversed soon and will contribute to a recovery. Other good news comes from overseas: China, India, the UK and the Euro zone in general saw rising Purchasing Managers indices last period. India expects growth of almost 8% this year, and China has predicted a 9% annual rate of GDP growth for the fourth quarter.