Reuters finance blogger Felix Salmon and Marketplace New York bureau chief Heidi Moore went on "The Madeleine Brand Show" this morning to discuss the ongoing (Neverending?) European debt crisis. It was a lively discussion, moving beyond the probability of a Greek default in its debt and raising the specter of Italy defaulting on its debt — or more accurately, being unable to "roll it over," or pay off maturing bonds with new bonds, at the same interest rate. Unfortunately for Italy, its borrowing costs are going up, making it difficult to execute this maneuver.
At one point, Heidi made reference to a video of French President Nicolas Sarkozy and German Chancellor Angela Merkel, the odd couple of the European Union, who together have been lurchingly trying to cobble together a rescue package for the Eurozone's common currency.
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GOP Presidential Candidate Rick Perry
I honestly didn't think anyone could — or would — come up with a worse plan for U.S. tax reform than Herman Cain did with his 999 proposal. But Texas Gov. Rick Perry just released his "Cut, Balance and Grow" plan, which is also being referred to as the "20-20" plan, echoing Cain's 999. The difference is that Perry replaces Cain's 9 percent flat income and corporate taxes with a 20 percent flat tax for both. But there's more! And just in time for Halloween, it's...terrifying!
I'd like to call it stupid, but ridiculously stupid would be better.
The plan has four key pieces:
- Americans will be able to choose between the current tax system and the 20-percent flat tax.
- Corporations will see their tax rate cut from an average of 35 percent under the current system to a flat 20 percent with Perry's plan.
- Federal spending would be capped at 18 percent of GDP, which Perry argues is the average since 1960. This will, he insists, balance the budget by 2020.
- Workers would be able to opt out of Social Security.
Ronald Reagan, an American legend
Ronald Reagan was a...harmonica player? I consider myself something of a student of Reaganalia, having enjoyed some formative years during the Gipper's reign. But Kitty Felde's story today about a Reagan exhibition at the National Portrait Gallery in Washington, D.C., included a tidbit about the 40th President's rumored late-life adoption of the mouth harp as his instrument of choice. That got my attention!
Evidently, Reagan's harmonica playing was something that journalists discussed, but like a sort of musical state secret, could never properly confirm. This is from the UK Independent — in 1994:
Some say it was Bill Clinton's saxophone playing that got him going, others that he read Presidents Lincoln, Teddy Roosevelt, Coolidge and Eisenhower played the harmonica so he felt he ought to.
Bemused friends claim a tutor visits twice a week and there have been suggestions that among the tunes the former actor has been working on are 'Git Along Little Doggie' and 'Streets of Laredo'.
AP Photo / J. Scott Applewhite
The Federal Reserve Building in Washington, DC.
The economist Peter Morici, who has been extremely critical of the Obama adminstration's economic policies of late, has taken a look at the housing crisis and doesn't see much hope. He does see one way out, however. But it's an exceptionally unlikely way out:
Currently, the rate on five-year adjustable rate mortgages is about 3.2 percent. If the Fed could get the investors who buy Fannie and Freddie bonds to accept interest rates of minus 3 percent, then young folks could be offered mortgages with appropriately negative interest rates. To accomplish that feat, the Fed would have to buy all those bonds itself-that's right the Fed would finance all federally guaranteed mortgages and write off 3 percent a year. I can just hear Ron Paul now.
Morici makes this argument in the context of discussing why it makes little sense for young people to buy houses right now (unfortunately, I can't link to his piece, as it isn't on his website yet). He refers to Ron Paul, a Texas congressman and noted libertarian, because Paul is no fan of the Fed.
BYD — it stands for "Build Your Dreams" — is building a future in Downtown LA, new home to its North American HQ. Unfortunately, it's enduring something of a nightmare with its business at home in China, even with billionaire Warren Buffett invested.
In business, timing is everything. So what to make of a dignitary heavy ribbon cutting this morning at the new North American headquarters of Chinese carmaker BYD ("Build Your Dreams"), at a time when the company is facing business challenges at home — and challenges to deliver on ecomomic promises in LA?
BYD America opened today about a year behind schedule with fewer workers than first targeted. The company, partly owned by Warren Buffett's Berkshire Hathaway Inc., has delayed plans to sell electric cars to retail buyers, citing limited availability of public chargers. Instead, it's focusing on solar panels, batteries, LED lighting and rechargeable buses.
Initial goals for the Shenzhen, China-based company's California arrival haven't been met either in BYD jobs or indirect business created. The delays reflect a combination of construction obstacles and an electric-car market that hasn't developed as rapidly as first expected.
In April 2010 when the deal was announced, BYD said it would open the office by the end of 2010, and have 150 employees by the end of this year. It now has 20 employees in Los Angeles, with plans to reach 30 by year-end and 100 by the end of 2012, according to Micheal Austin, the company's U.S. vice president.