In a continuing effort to provide words of wisdom from beyond the walls of Zacks, here are a few things that I think people should find to be interesting. The views expressed in the articles are not always shared by either myself or Zacks, but I do find them thought provoking.
President Obama lays out his plan for long-term deficit reduction. While I am not crazy about it, it relies about 75% on spending reduction and 25% on revenue increases, while I would favor more of a 50-50% split, I see it as a much better plan overall than either Simpson-Bowles or the Ryan Plan.
Mark Thoma, of the University of Oregon and the Economist’s View Blog, gives his reaction to the speech, along with excepts of the reaction from Nobel Laureate, Princeton Professor and N.Y Times Columnist Paul Krugman, and U.C. Berkley Professor Brad DeLong’s take on the speech.
Hoenig: New GSEs Are Citi, Bank of America
Barry Ritholtz, of the Big Picture Blog, covers the key points of a speech made by Kansas City Fed President Tom Hoenig about the “too big to fail banks." While I disagree with Mr. Hoenig significantly about monetary policy (he wants to start tightening now; I think the economy is too weak and core inflation is well contained, and thus I think they need to stay accommodative), I fully agree with him on these points.
The problem with Fannie and Freddie was that since they were seen as backstopped by the government, they had a lower cost of capital and started taking on far too much risk. That process is being repeated now with the big banks like Citigroup (C) and Bank of America (BAC). The likely result — not now, but a few years down the road — is going to be similar, with yet another big bailout required to save the world from economic implosion.
9 Things the Rich Don’t Want You to Know About Taxes
Veteran tax reporter and analyst David Cay Johnston, and columnist for tax.com, has a fairly long and detailed article on the distribution of the tax burden in this county, and it is not what you think it is.
BANK OF AMER CP (BAC): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
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