Free Republic

Last week it was announced that Israel's Bank Hapoalim surprised all the analysts and posted a quarterly net profit of 513 million shekels. In other words, half a billion shekels plus 13 million shekels net profit for three months. I have nothing against Bank Hapoalim. On the contrary, their commissions are cheaper than the other banks and I am pleased that they are making a lot of money. Everything written in this article pertains to all the large banks. Something bothered me when I listened to the report of Bank Hapoalim's profits. The bank's economists explained that the surprising increase...

Even before there was an Obama administration, there was the hue and cry for the government to "do something" to stimulate the economy reeling from the Chris Dodd Bear Market and Recession. But there also were voices warning that stimulating the economy the way Barack Obama and congressional Democrats intended — massive government borrowing to fund massive spending on government employees and infrastructure; government interference in commerce; microscopic interest rates — was failure waiting to happen. Those voices recalled how Japan stimulated its economy 10 times after the credit bubble burst in 1990. Each time, Japan ramped up government spending...

The Future Of The Global Public Debt Explosion John Mauldin | May. 2, 2010, 8:48 AM | 462 | comment 5 Everyone and their brother intuitively knows that the current government fiscal deficits in the developed world are unsustainable. They have to be brought under control, but that requires some short-term pain. Today we look at a rather remarkable piece of research from the Bank of International Settlements (BIS) on what the fiscal crisis may morph into in the future, how much pain will be needed, and what will happen if various countries stay on their present courses. Some countries...

A new interest-free credit card, the first of its kind in North America, aims to reconcile Islamic canonical law and Western consumer culture. Until now, observant Muslims have been precluded from owning credit cards on which they pay interest, a violation of shariah law. The iFreedom Plus Master-Card, set to be available in the coming days, promises no bills, no interest and no credit card debt. .... With the iFreedom Plus MasterCard, holders load up their card with cash in advance, up to $6,000. Each purchase draws down on the account without accruing interest. .... Because the new product doesn't...

A sudden drop-off in investor demand for U.S. Treasury notes is raising questions about whether interest rates will finally begin a march higher—a climb that would jack up the government's borrowing costs and spell trouble for the fragile housing market. For months, investors have focused their attention on the debt crisis in Europe, but there are signs the spotlight is turning to the ability of the U.S. to finance its own budget deficit. This week, some investors turned up their noses at three big U.S. Treasury offerings. Demand was weak for a $44 billion 2-year note auction on Tuesday, a...

What is wrong with this picture: the MTS just announced that the February budget deficit was $220.9 billion, after receipts of just $107.5 billion with vastly surpassed by outlays of $328.4 billion. This is a record. Yet the interest on the public debt was a mere $16.9 billion (page 13 of the MTS report). The reason for this is because as TreasuryDirect points out, in February the interest on public marketable debt (actual cash outlays), which as of Monday stood at $8.061 trillion, hit an all time low of 2.548%. How is it possible that unprecedented debt accumulation can result...

If you have bad credit in the new era of credit card regulation, be prepared to pay -- dearly -- for the privilege of using credit. That's the message underlying recent credit card offers that feature jaw-dropping interest rates of up to 79.9 percent. The sky-high rates may be a sign of things to come in the market for so-called subprime credit cards as issuers who lend to the riskiest of borrowers try to figure out how to stay in business and comply with the new credit card reform law. "We need to price our product based on the risk...

APR Shocks Many, but Issuer Says They Are Pricing for the Risk If you have bad credit in the new era of credit card regulation, be prepared to pay -- dearly -- for the privilege of using credit. That's the message underlying recent credit card offers that feature jaw-dropping interest rates of up to 79.9 percent. The sky-high rates may be a sign of things to come in the market for so-called subprime credit cards as issuers who lend to the riskiest of borrowers try to figure out how to stay in business and comply with the new credit card...

It could be the bets are off on low interest rates. In uncommonly frank remarks yesterday, the Fed's Ben Bernanke blamed lax regulatory oversight -- not super low interest rates -- for the housing bust. "All efforts should be made to strengthen our regulatory system to prevent a recurrence of the crisis, and to cushion the effects if another crisis occurs," he told the annual meeting of the American Economic Association in Atlanta. "However, if adequate reforms are not made, or if they are made but prove insufficient to prevent dangerous buildups of financial risks, we must remain open to...

The Federal Reserve has decided to hold interest rates at a record low and pledged to keep them there for an "extended period" to keep the recovery going and drive down double-digit unemployment. But in a more upbeat assessment, the Fed says the economy has "continued to pick up" and that "deterioration in the labor market is abating," a nod to the recent slowdown in the pace of layoffs. Despite some improvements, Fed Chairman Ben Bernanke and his colleagues said there's still reason for caution. Spending by households, while growing at a moderate pace, remains "constrained" by the weak job...

Ignoring The ProblemThe Cost of Paying the Debt NowBy starting today, the Federal Government can pay off the National Debt in 30 years by making interest and principal payments of $699,013,323,930.52 per year (see the chart below). In Fiscal Year 2009 the government made interest payments of $383,656,592,545.78. So it would take an additional $315,356,731,384.74 in annual payments to completely extinguish the debt in 30 years. By starting now, the total cost of interest will be $8,883,038,042,900.88, at 4%, over 30 years.Opportunity Cost: Waiting until 2019If the Federal Government chooses to wait until 2019 before addressing the debt, the cost...

LOS ANGELES (Reuters) - U.S. actor Alec Baldwin says he has lost interest in acting and considers his film career a failure. "I don't have any interest in acting anymore," Baldwin, 51, told "Men's Journal" in an interview for its December issue. Baldwin, best-known for his Emmy-award winning role in the NBC comedy "30 Rock" and the man chosen to co-host the 2010 Oscar ceremony, added: "Movies are a part of my past. It's been 30 years. I'm not young, but I have time to do something else".

NEW YORK (CNNMoney.com) -- Here's a new way to think about the U.S. government's epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest. More than half. In fact, $4.8 trillion. If that's hard to grasp, here's another way to look at why that's a problem. In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a...

Repeat After Me.... "There Is No Carry"The Market TickerTuesday, November 10. 2009 Posted by Karl Denninger in Editorial at 10:45 From this morning's open (there have been many essentially-identical charts over the last months...) You can argue anything you'd like, but this - the chart of the SPX cash and the dollar, overlaid - put the lie to any claim that "there is no carry" at play. Today, as with many days before (and I'm sure will be since) is stunning evidence that indeed there is a monstrous carry being perpetrated against the dollar and our nation, Bernanke knows it,...

U.S. stocks erased most of a 156- point rally in the Dow Jones Industrial Average after a House bill to curb credit-card rates spurred concern about bank earnings, outweighing the Federal Reserve's plan to keep interest rates at a record low. Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. led financial shares to the steepest loss among 10 industries as the vote moved up the start date of many rule changes that will make it more difficult for lenders to raise rates on existing credit cards. The Standard & Poor's 500 Index wiped out most of a...

Roubini Sees Market Crash All Over the World By Rocky Vega 10/29/09 Stockholm, Sweden – New York University Professor Nouriel Roubini, who recently saw the recovery as “U-shaped,” is now concerned a dollar rebound will cause global markets to crash. His main concern is the carry trade in the US dollar. The dollar is being borrowed at near-zero interest rates to then be invested into a wide array of now-popular assets including gold, commodities, equities, credit, and emerging markets. There are simply more dollars available in the system that are chasing the same types of things. The risk is that...

Defeat the Debt Children: I pledge allegiance to Americaʼs debt, and to the Chinese government that lends us money. And to the interest, for which we pay, compoundable, with higher ...

One of the important messages coming out of the central banker’s annual retreat in Jackson Hole, Wyoming is that once the crisis is over the Federal Reserve’s (Fed) tightening of monetary policy may be abrupt. If so, increases in short term interest rates will not be gradual but jarring. The reasoning behind this approach, as I understand it, is that (1) since there could be political pressures to monetize the government debt and (2) given the large amount of existing liquidity that needs to be drained the Fed’s exit strategy needs to be unmistakably clear in communicating that it will...

US government bond prices, especially those of longer maturities, lost considerable ground in the latest session. Bonds were hit across the board due to next week's supply, an improving tone in US jobless claims and productivity data, a jump in crude-oil prices, mortgage-related selling as well as hedges related to new corporate bond sales. The seven-year and 10-year notes were the biggest losers, with the 10-year yield touching as high as 3.747 per cent, approaching the six-month high of 3.76 per cent set in late May. The US Treasury Department announced a sale of $US65 billion ($81 billion) in notes...

Stimulus with interest: $1.2 trillionJeanne Sahadi, CNNMoney.com senior writer Tuesday January 27, 2009, 5:25 pm EST The long-term cost of the $825 billion economic recovery package before Congress could rise to $1.2 trillion over 10 years, a top budget official said Tuesday. That's because the government will borrow to fund the plan and pay an estimated $347 billion in interest, Congressional Budget Office Director Douglas Elmendorf told the House Budget Committee on Tuesday. The calculation was made at the request of House Republicans who have questioned the size and effectiveness of the bill. When asked at a press briefing about...